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This assumes that the value produced by bitcoin transactions is equivalent to the value produced by banks operating, though, which seems a rather huge assumptio
by kevingadd 9y ago
This assumes that the value produced by bitcoin transactions is equivalent to the value produced by banks operating, though, which seems a rather huge assumption? The stuff banks do on a daily basis is very, very important, and they do a lot of it.
Like, a trivial example: Let's say I can eventually pay my rent with bitcoin instead of a bank wire. I'd have to do that off-chain or on an exchange or something, right? What happens once you factor the cost of operating those exchanges in? My landlord probably needs to convert that BTC to USD at some point, so then banks and wires are involved to transact the USD.
- jstanley 9y agoIt's trivially the case that the value produced by bitcoin mining exceeds the cost of the electricity, else nobody would bother.
- ben_w 9y ago#cough# JavaScript cryptocurrency miners in adverts, #cough# cloud computing with stolen resources, #cough# anticipation of future bitcoin value when estimating cost effectiveness
- mikeash 9y agoIt's trivial that the value exceeds the price of the electricity. Unfortunately, electricity is often priced well below cost once you account for externalities like pollution.
- MereInterest 9y agoAren't bitcoin transactions dependent on miners continually mining in order to verify transactions? It sounds like bitcoin is relying on a perpetual profit margin for mining, in order to make transactions possible.
- indubitable 9y agoThis is the point of transaction fees in bitcoin. Fees get 'attached' to the block that is mined and go the miner. So even when all bitcoins have been distributed there will remain a profit motive for mining. The difficulty in mining is also automatically algorithmically adjusted, so if the industrial scale miners move onto other things - suddenly it might become profitable to go back to GPU mining. And the fewer people mining, the more profitable it would become.
- s73ver_ 9y agoIs it? And are those who are consuming the electricity paying the entire cost for it, including impacts to the environment?
- baddox 9y agoSurely there is also a lot that banks do that isn’t important, or that is even harmful to society.
- Symbiote 9y agoBitcoin also does things harmful to society -- like enabling money laundering and tax evasion.