4 ms·

> It's as if we're taking away compute from "productive" processes that are in a dire need of compute! Compute? No. Energy? Yes, because today energy comes at

by DenisM 7y ago

> It's as if we're taking away compute from "productive" processes that are in a dire need of compute! Compute? No. Energy? Yes, because today energy comes at the expense of environment which is running thin on the ground. > I suspect this is just an intellectual circle jerk. Come on, was that really necessary?

hombre_fatal 7y ago
Just seems like a weird hill to die on that's convenient because HN doesn't like bitcoin and gets to grandstand on saving the environment. Someone just as judgemental could criticize HNers for all the energy they waste using high powered devices to sit on HN. Or air conditioning their entire house when they could simply sweat a little bit or use a fan in the one room they are in. Or driving to the movies when they could twiddle their thumbs at home for entertainment. This is why it seems like such a belabored circlejerk.
- perl4ever 7y ago
  But is it a minor waste of energy, like a lot of things people worry about? A $100 bill costs around 10 cents to print. The value of bitcoin is defined by the cost of the energy dissipated to mine it, so that means it's a thousand times more expensive than conventional money. Do you disagree with that logic?
  - fredfoobar 7y ago
    This is another one of my pet peeves. So, you think a dollar bill is printed and that's it, there's no ecosystem around it to secure and manage the logistics around our current banking system. Sit down and think for a bit before typing out shallow comments like that.
    - perl4ever 7y ago
      One of my pet peeves is when people point out something is not particularly precise and then wave their hands and declare that makes up for three orders of magnitude difference. Of course there is an ecosystem around regular money. There's no way it costs 1,000 times as much per dollar as printing the money, and, the major, universal complaint about bitcoin has been that it doesn't provide an alternative to all of the additional functions of the conventional banking system, so your point seems doubly void to me.
      - fredfoobar 7y ago
        what "additional functions" are you referring to? I haven't set foot in a bank in a decade, I need someone to refresh my memory. How can you consider my point "void" if it does provide some of the functions? I can't understand how you can acknowledge the "ecosystem around regular money" and ignore it in the very next sentence and resort to your narrative of "1000 times the cost of printing a dollar", lol! And you complain about hand-waving? italicizing "doesn't" isn't really a way to convince someone about what's missing.
        perl4ever 7y ago
        If a pair of roller skates provides some of the functions of a car, is that a justification for it costing 1,000 times as much as a car? I'm not saying "oh, this is idiotic" because when something seems extremely dumb, often it's just because of some missing context. But you'll have to explain more if I'm going to understand. And I don't understand what you don't understand about the factor of a thousand difference. Do you think that less than $100 in energy is dissipated in order to produce $100 worth of bitcoin, or do you think that the regular financial system costs more than a few pennies to produce and maintain $100? It's true that the cost of printing a $100 bill does not cover all of the functions of the banking system, but it's also true that dollars don't even have to be printed to be used, and those which exist only as ledger entries are far cheaper. So I think 0.1% is more like an upper bound than a lower one.
        deleted 7y ago
        [deleted]
        fredfoobar 7y ago
        Look, if you really wanted to understand this, you'd be honest in your arguments and present a better understanding than just repeating that it costs pennies to print 100$ (and therefore USD is superior) If it was so easy and cheap to print a 100$, why isn't everyone doing it? Obviously, it's not easy or cheap to do, and it's also illegal. The US govt enforces the legality. So, you should factor in the cost of running the US govt and the cost of enforcing the law through the judicial system. Suppose the US military disappeared overnight, what do you think will happen to the value of the dollar? you most certainly should factor in the cost of running the US army as well. And then the banking ecosystem itself in the US, which is well over 10 trillion $ as of now. The bitcoin ecosystem rolls all of these features into a single concise, self-policed network. I'd much rather have a permission-less SoV that is not controlled/backed by a nation state or a set of corporations (like Libra). 'perl4ever' should've tipped me off, I never learn :(. I don't think I have anymore time to argue with you.
  - Obi_Juan_Kenobi 7y ago
    > the value of bitcoin is defined by the cost of the energy dissipated to mine it Other way around. Bitcoin is valued according to the market. Mining is rewarded two ways: The inflationary (and reducing) coinbase reward for coin issuance, and transaction (txn) fees. The value of mining a block depends on these two factors, which both depend on the price of Bitcoin. So long as the marginal cost of increasing hash rate is lower than the marginal gain of Bitcoins mined, hash rate will increase. When hash rates increase, mining difficulty is adjusted by the network to keep average block times near a 10 minute target. With these costs and rewards, Bitcoin mining costs will reach an equilibrium near the value of mined Bitcoins, with two caveats: * Risk from price variability and capital investment. Mining infrastructure takes time to deploy, so there is considerable lag between price and mining costs. And capital expenditures have opportunity costs, so deployed resources will reliably reflect predicted returns less these opportunity costs. * Profit. The mining market will not mine Bitcoins for no profit (excepting brief periods, potentially) as there is no point to do so. > it's a thousand times more expensive than conventional money This is a comparison based on transactions, but why is that a suitable comparison? Money is both a medium of exchange and a store of value. It's also absurd to consider that the costs of the US dollar are in printing alone; the value of US currency is underpinned by the entire US government. If they US did not have a powerful military, trade agreements reflecting that military, taxes that must be paid in dollars, etc., then dollars would not have the value they do. The global monetary system - banks, sovereign nations, etc. - is extraordinarily expensive. But Bitcoin is a global currency, so this is the suitable comparison, even if it is very young and tremendously inflationary at the moment.
    - perl4ever 7y ago
      Most of the additional costs associating with the banking system would still have to be paid if bitcoin were to provide the same services. But also, there's no reason that they should account for exactly 1000 times the cost of printing the money. I think you can expect you've gone down the wrong track when you believe numbers are exactly what is necessary to justify your argument for no particular external reason. The only costs that are reasonable and appropriate to include, it seems to me, in an apples-to-apples comparison, are the costs of actually creating the money and regulating the supply. So, ok, over and above the negligible amount to create money, it's plausible to include the cost of the Federal Reserve system, since that is what keeps the money supply stable, analogous to the mining algorithm. The M2 money supply (a bit arbitrary, but for this comparison it's somewhat generous to the opposing view and anyway, I guess they don't publish M3 any more) is something like $14.5 trillion. The cost of the Federal Reserve is something like $5 billion[1] So the "maintenance" cost for a dollar is something like 3 cents every hundred years. To me, that seems de minimus and it also seems a person with some common sense would expect that without doing an analysis. If you want to be obstinate about this, I suspect you will argue that bitcoin as it currently exists provides the facility to do transactions which I am not including the cost of with dollars, and my response is that the throughput of bitcoin is negligible and therefore not appropriate to equate with the capacity of the real financial system. [1]https://www.federalreserve.gov/publications/2017-ar-federal-system-budgets.htm https://www.federalreserve.gov/publications/2017-ar-federal-...

by DenisM 7y ago

hombre_fatal 7y ago

Just seems like a weird hill to die on that's convenient because HN doesn't like bitcoin and gets to grandstand on saving the environment. Someone just as judgemental could criticize HNers for all the energy they waste using high powered devices to sit on HN. Or air conditioning their entire house when they could simply sweat a little bit or use a fan in the one room they are in. Or driving to the movies when they could twiddle their thumbs at home for entertainment. This is why it seems like such a belabored circlejerk.

perl4ever 7y ago
But is it a minor waste of energy, like a lot of things people worry about? A $100 bill costs around 10 cents to print. The value of bitcoin is defined by the cost of the energy dissipated to mine it, so that means it's a thousand times more expensive than conventional money. Do you disagree with that logic?
- fredfoobar 7y ago
  This is another one of my pet peeves. So, you think a dollar bill is printed and that's it, there's no ecosystem around it to secure and manage the logistics around our current banking system. Sit down and think for a bit before typing out shallow comments like that.
  - perl4ever 7y ago
    One of my pet peeves is when people point out something is not particularly precise and then wave their hands and declare that makes up for three orders of magnitude difference. Of course there is an ecosystem around regular money. There's no way it costs 1,000 times as much per dollar as printing the money, and, the major, universal complaint about bitcoin has been that it doesn't provide an alternative to all of the additional functions of the conventional banking system, so your point seems doubly void to me.
    - fredfoobar 7y ago
      what "additional functions" are you referring to? I haven't set foot in a bank in a decade, I need someone to refresh my memory. How can you consider my point "void" if it does provide some of the functions? I can't understand how you can acknowledge the "ecosystem around regular money" and ignore it in the very next sentence and resort to your narrative of "1000 times the cost of printing a dollar", lol! And you complain about hand-waving? italicizing "doesn't" isn't really a way to convince someone about what's missing.
      - perl4ever 7y ago
        If a pair of roller skates provides some of the functions of a car, is that a justification for it costing 1,000 times as much as a car? I'm not saying "oh, this is idiotic" because when something seems extremely dumb, often it's just because of some missing context. But you'll have to explain more if I'm going to understand. And I don't understand what you don't understand about the factor of a thousand difference. Do you think that less than $100 in energy is dissipated in order to produce $100 worth of bitcoin, or do you think that the regular financial system costs more than a few pennies to produce and maintain $100? It's true that the cost of printing a $100 bill does not cover all of the functions of the banking system, but it's also true that dollars don't even have to be printed to be used, and those which exist only as ledger entries are far cheaper. So I think 0.1% is more like an upper bound than a lower one.
        deleted 7y ago
        [deleted]
        fredfoobar 7y ago
        Look, if you really wanted to understand this, you'd be honest in your arguments and present a better understanding than just repeating that it costs pennies to print 100$ (and therefore USD is superior) If it was so easy and cheap to print a 100$, why isn't everyone doing it? Obviously, it's not easy or cheap to do, and it's also illegal. The US govt enforces the legality. So, you should factor in the cost of running the US govt and the cost of enforcing the law through the judicial system. Suppose the US military disappeared overnight, what do you think will happen to the value of the dollar? you most certainly should factor in the cost of running the US army as well. And then the banking ecosystem itself in the US, which is well over 10 trillion $ as of now. The bitcoin ecosystem rolls all of these features into a single concise, self-policed network. I'd much rather have a permission-less SoV that is not controlled/backed by a nation state or a set of corporations (like Libra). 'perl4ever' should've tipped me off, I never learn :(. I don't think I have anymore time to argue with you.
- Obi_Juan_Kenobi 7y ago
  > the value of bitcoin is defined by the cost of the energy dissipated to mine it Other way around. Bitcoin is valued according to the market. Mining is rewarded two ways: The inflationary (and reducing) coinbase reward for coin issuance, and transaction (txn) fees. The value of mining a block depends on these two factors, which both depend on the price of Bitcoin. So long as the marginal cost of increasing hash rate is lower than the marginal gain of Bitcoins mined, hash rate will increase. When hash rates increase, mining difficulty is adjusted by the network to keep average block times near a 10 minute target. With these costs and rewards, Bitcoin mining costs will reach an equilibrium near the value of mined Bitcoins, with two caveats: * Risk from price variability and capital investment. Mining infrastructure takes time to deploy, so there is considerable lag between price and mining costs. And capital expenditures have opportunity costs, so deployed resources will reliably reflect predicted returns less these opportunity costs. * Profit. The mining market will not mine Bitcoins for no profit (excepting brief periods, potentially) as there is no point to do so. > it's a thousand times more expensive than conventional money This is a comparison based on transactions, but why is that a suitable comparison? Money is both a medium of exchange and a store of value. It's also absurd to consider that the costs of the US dollar are in printing alone; the value of US currency is underpinned by the entire US government. If they US did not have a powerful military, trade agreements reflecting that military, taxes that must be paid in dollars, etc., then dollars would not have the value they do. The global monetary system - banks, sovereign nations, etc. - is extraordinarily expensive. But Bitcoin is a global currency, so this is the suitable comparison, even if it is very young and tremendously inflationary at the moment.
  - perl4ever 7y ago
    Most of the additional costs associating with the banking system would still have to be paid if bitcoin were to provide the same services. But also, there's no reason that they should account for exactly 1000 times the cost of printing the money. I think you can expect you've gone down the wrong track when you believe numbers are exactly what is necessary to justify your argument for no particular external reason. The only costs that are reasonable and appropriate to include, it seems to me, in an apples-to-apples comparison, are the costs of actually creating the money and regulating the supply. So, ok, over and above the negligible amount to create money, it's plausible to include the cost of the Federal Reserve system, since that is what keeps the money supply stable, analogous to the mining algorithm. The M2 money supply (a bit arbitrary, but for this comparison it's somewhat generous to the opposing view and anyway, I guess they don't publish M3 any more) is something like $14.5 trillion. The cost of the Federal Reserve is something like $5 billion[1] So the "maintenance" cost for a dollar is something like 3 cents every hundred years. To me, that seems de minimus and it also seems a person with some common sense would expect that without doing an analysis. If you want to be obstinate about this, I suspect you will argue that bitcoin as it currently exists provides the facility to do transactions which I am not including the cost of with dollars, and my response is that the throughput of bitcoin is negligible and therefore not appropriate to equate with the capacity of the real financial system. [1]https://www.federalreserve.gov/publications/2017-ar-federal-system-budgets.htm https://www.federalreserve.gov/publications/2017-ar-federal-...