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Most of the value of the US Dollar comes from international treaties that require barrels of oil to be sold in dollars. This gives the dollar an intrinsic, pos
by snarfy 9y ago
Most of the value of the US Dollar comes from international treaties that require barrels of oil to be sold in dollars. This gives the dollar an intrinsic, positive energy value, backed by the military. Contrast that with Bitcoin which has a negative energy value. There are no treaties requiring oil to be sold in Bitcoin.
Energy is what is scarce, has real value, and what drives the economy. At some point in the future, after the hype has died, it won't be worth the energy to mine bitcoin.
- Retric 9y agoOil has almost nothing to due with the value of USD. People need to pay a few trillion dollars in US taxes every year based on the size of the US economy. If the dollar was worth 1/10 as much they would then need to pay 10x as many dollars in taxes because people pay taxes as a percentage of value creation not simply arbitrary units. On top of that people who want US goods like movies need USD to buy them. Further, US companies foreign profits need to be converted back to USD to pay out dividends. Apple may sell a Chinese made iPad in China, but the profit needs to be converted to USD.
- kuschku 9y agoOil and international transactions has everything to do with the power of the USD. There are more transactions, and of larger volume, and more savings between EU citizen than between US citizen. Yet, the EUR is only ~20% of global currency volume, and over 60% is in USD. That is all due to international transactions.
- Retric 9y agoTrading volume has little to do with a currency's power. To be a medium of exchange something needs to have value. Euro's are unstable due to polical issues, but the EU's economy is why it has any value in the first place. Now this has and will change over time, but it's really stability not military power that backs the adoption of USD's.
- xdeqx366 9y agoThe energy cost of mining bitcoin equates to exactly what people are willing to pay for it. If the cost of mining increases, profits decrease, and the system re-equalizes. It is simply another market, BTC/kj.
- Retric 9y agoEnergy costs are only part of the equation. The point where people buy new equipment is significantly different from the point where they turn off equipment they already own.