5 ms·

What if I told you that you can use this "useless" BTC to purchase carbon offsets, invest in renewable energy (which otherwise would have no funding), etc? Sur

What if I told you that you can use this "useless" BTC to purchase carbon offsets, invest in renewable energy (which otherwise would have no funding), etc? Sure, money has no value when you're stuck on an island, but a bow and arrow does. Similarly, a bow and arrow has little value in Tokyo city and money does. Money is the engine that drives motivation - it can be used to compel others to do good things. Also, people don't understand what Bitcoin mining in wholistic sense is. Model A: Energy -> Factory (Assets) + Labor -> Revenue Model B: Energy -> Mining hardware (Assets) -> Revenue It is surprisingly the same (we can even argue that labor is involved in building mining assets, GPUs don't grow naturally). You can argue that any economic endeavor is a waste.

paulgb 7y ago
> What if I told you that you can use this "useless" BTC to purchase carbon offsets, invest in renewable energy (which otherwise would have no funding), etc? Unless they actually are using it to purchase carbon offsets, I don't see what's the point of this hypothetical? > Also, people don't understand what Bitcoin mining in wholistic sense is. Sure, some Bitcoin critics don't understand it well, but don't paint us all with that brush. Some of us have a very good understanding of what Bitcoin mining is and still find it tremendously wasteful.
- fermienrico 7y ago
  I think it is just to make a point - that BTC generated from this "wasteful" activity can be used for any purpose. It could pay off executives or the government can use it to propel society forward or offset carbon credits or build warheads. The right or wrong is not in the action of mining BTC, it is the same as any other economic acivity. I've added some more clarity. > Sure, some Bitcoin critics don't understand it well, but don't paint us all with that brush. Some of us have a very good understanding of what Bitcoin mining is and still find it tremendously wasteful. By all means, expand on this and enlighten me, I am curious to hear both sides.
  - sixstringtheory 7y ago
    It is wasteful because it is expending fossil fuels, manufacturing and raw materials to build the compute resources to perform calculations that don’t produce any intrinsic value, but rather just another way to represent and redistribute the value that already exists. It is as worthless as options/RSUs until you convert it to currency, and no currency is created in that transaction. It’s like writing an unnecessary API wrapper or similar abstraction layer. YAGNI
  - paulgb 7y ago
    > By all means, expand on this and enlighten me, I am curious to hear both sides. Sure. My concern with Bitcoin mining is that (#1) it absorbs efficiency improvements by design, and that (#2) it is structurally an environmental race to the bottom. By #1, I mean that even if you could magically halve the energy use of mining overnight, you wouldn't meaningfully reduce Bitcoin's footprint: mining would use less energy, so it would be (temporarily) more profitable, so miners would scale up until it was back at equilibrium. It's back in equilibrium when the cost of mining is the market value of a coin, and since energy costs dominate the cost of mining, this is (roughly) when energy use is on par with what it was before the efficiency improvement. By #2, I mean that mining naturally gravitates to places where the externalities are not priced in. If Country A has a carbon tax and Country B does not, mining will just move (pushed by the invisible hand) to Country B, rendering the carbon tax ineffectual with regards to coin mining. Of course this is just part of a bigger problem of enforcing global externalities locally, but the tools that would usually help here (trade policy, etc.) do not really apply to crypto mining.
DagAgren 7y ago
Not only is nobody using bitcoin for that, bitcoin is also a negative-sum game, and no actual new wealth is created. If you were going to buy those credits, you would get more if you cut bitcoin out of the equation entirely.
- thebean11 7y ago
  That's assuming it never creates any utility, which might be a fair assessment now but the same argument could have been made about many early stage innovations
  - DagAgren 7y ago
    How many decades is it going to take for bitcoin to not be “early stage”?
    - thebean11 7y ago
      Maybe never, but just dismissing the technology as worse than useless seems a bit irrational. If your position is that the entire crypto space is just delusion, it's probably good to take a step back and consider that you are the one that's missing something.
      - DagAgren 7y ago
        I am not actually doing any of those things, even though they would all be fair to say. I am saying that the economic system built around bitcoin is, by definition, negative-sum. And there is nothing about the technology that can change that.
        thebean11 7y ago
        Can you give an example of why an economy using bitcoin would be negative sum? If I'm producing widgets and transacting in crypto, value (widgets) are created, the transaction medium seems irrelevant to me. I don't actually think switching exclusively to a deflationary currency is a good idea, but I don't buy that it creates a situation where value can only be destroyed..
asdkhadsj 7y ago
You raise a good point, but sidestep a good conclusion I feel like. I can agree that it is surprisingly similar. However the root of the issue is that we need to speak in terms of environmental impact to get to Revenue. I think the (implied) argument that the GP is making is such that Bitcoin is having too large of a cost to the value add to society. I have no idea if this is true or not. I don't even know how we can quantify environmental damage relative to revenue.
kevinqiu1 7y ago
Except in Model A the products have some utilitarian/recreational value to humanity (coats, iPhones, ect.) In Model B the product is a transaction network that is horribly inefficient in terms of $$$ transferred per unit of energy input. It probably makes sense to buy Cocaine (even then other cryptos are likely more efficient energy wise/secure) with Bitcoin, it doesn't make any sense to buy a car with it when there's already a banking system
- fermienrico 7y ago
  Definitely, I am missing the intrinsic societal value of Goods and Services produced from Model A and that's lacking in Model B. I am curious if Model B can use the generated revenue with a guaranteed (by law) expenditure to benefit the society? Right now, say governments use unused hydroelectric power to mine BTC and use it to buy masks or ventilators? Also, lol at Cocaine :D
  - jsjohnst 7y ago
    > say governments use unused hydroelectric power to mine BTC This would be predicated on there being unused hydroelectric power, which there generally is not (unless you factor in over production via other means of generating power that are less environmentally friendly). Unlike wind and solar, hydroelectric power is generally very predictable and controllable how much is produced and when.
ezrast 7y ago
That's not the same at all. You left out an important step in the first model: Energy -> Factory + Labor -> Goods and Services -> Revenue Goods and services improve the life of people, and we have deliberately organized our society in such a way that providing goods and services is incentivized with revenue. That you can also leech revenue for yourself by shuffling liquid assets around while providing no net benefit to the world is a side effect nobody intended. If you happen to reinvest that revenue into something more positive than what the other suckers would have, then no harm no foul, I suppose, but then "Revenue" shouldn't be the endpoint of your model. Something like "Well-being" should.
- fermienrico 7y ago
  This is a really good counterpoint, thanks. What, if any, government interventions could be put in place to somehow add value to BTC mining? What are your thoughts of governments using a resource such as hydroelectric dam or wind power to mine BTC and using it to build infrastructure (Goods), healthcare (Service), etc.? It kind of sounds like trickle down economics though, I am afraid.
  - ezrast 7y ago
    > What, if any, government interventions could be put in place to somehow add value to BTC mining? Well, the typical answer to "what can government do about this thing that is bad for society, but not bad enough to ban outright" is "tax it", though as another poster pointed out offshoring limits the efficacy of this strategy. I'm going to interpret your second question as "What are your thoughts of governments using a resource such as hydroelectric dam or wind power to mine BTC and using it to increase their budget?" since in general, money spent on Expense X doesn't remember whether it was generated from Assets Y or Z; money in the budget is money in the budget. That said, I suppose I'm not strictly opposed to the idea, though I'd be interested in an analysis of the returns you can get on those CPUs when you're optimizing for a community rather than an individual - for example, how much benefit does society get from putting all that CPU to work for something like folding@home?

paulgb 7y ago

> What if I told you that you can use this "useless" BTC to purchase carbon offsets, invest in renewable energy (which otherwise would have no funding), etc? Unless they actually are using it to purchase carbon offsets, I don't see what's the point of this hypothetical? > Also, people don't understand what Bitcoin mining in wholistic sense is. Sure, some Bitcoin critics don't understand it well, but don't paint us all with that brush. Some of us have a very good understanding of what Bitcoin mining is and still find it tremendously wasteful.

fermienrico 7y ago
I think it is just to make a point - that BTC generated from this "wasteful" activity can be used for any purpose. It could pay off executives or the government can use it to propel society forward or offset carbon credits or build warheads. The right or wrong is not in the action of mining BTC, it is the same as any other economic acivity. I've added some more clarity. > Sure, some Bitcoin critics don't understand it well, but don't paint us all with that brush. Some of us have a very good understanding of what Bitcoin mining is and still find it tremendously wasteful. By all means, expand on this and enlighten me, I am curious to hear both sides.
- sixstringtheory 7y ago
  It is wasteful because it is expending fossil fuels, manufacturing and raw materials to build the compute resources to perform calculations that don’t produce any intrinsic value, but rather just another way to represent and redistribute the value that already exists. It is as worthless as options/RSUs until you convert it to currency, and no currency is created in that transaction. It’s like writing an unnecessary API wrapper or similar abstraction layer. YAGNI
- paulgb 7y ago
  > By all means, expand on this and enlighten me, I am curious to hear both sides. Sure. My concern with Bitcoin mining is that (#1) it absorbs efficiency improvements by design, and that (#2) it is structurally an environmental race to the bottom. By #1, I mean that even if you could magically halve the energy use of mining overnight, you wouldn't meaningfully reduce Bitcoin's footprint: mining would use less energy, so it would be (temporarily) more profitable, so miners would scale up until it was back at equilibrium. It's back in equilibrium when the cost of mining is the market value of a coin, and since energy costs dominate the cost of mining, this is (roughly) when energy use is on par with what it was before the efficiency improvement. By #2, I mean that mining naturally gravitates to places where the externalities are not priced in. If Country A has a carbon tax and Country B does not, mining will just move (pushed by the invisible hand) to Country B, rendering the carbon tax ineffectual with regards to coin mining. Of course this is just part of a bigger problem of enforcing global externalities locally, but the tools that would usually help here (trade policy, etc.) do not really apply to crypto mining.

DagAgren 7y ago

Not only is nobody using bitcoin for that, bitcoin is also a negative-sum game, and no actual new wealth is created. If you were going to buy those credits, you would get more if you cut bitcoin out of the equation entirely.

thebean11 7y ago
That's assuming it never creates any utility, which might be a fair assessment now but the same argument could have been made about many early stage innovations
- DagAgren 7y ago
  How many decades is it going to take for bitcoin to not be “early stage”?
  - thebean11 7y ago
    Maybe never, but just dismissing the technology as worse than useless seems a bit irrational. If your position is that the entire crypto space is just delusion, it's probably good to take a step back and consider that you are the one that's missing something.
    - DagAgren 7y ago
      I am not actually doing any of those things, even though they would all be fair to say. I am saying that the economic system built around bitcoin is, by definition, negative-sum. And there is nothing about the technology that can change that.
      - thebean11 7y ago
        Can you give an example of why an economy using bitcoin would be negative sum? If I'm producing widgets and transacting in crypto, value (widgets) are created, the transaction medium seems irrelevant to me. I don't actually think switching exclusively to a deflationary currency is a good idea, but I don't buy that it creates a situation where value can only be destroyed..

asdkhadsj 7y ago

You raise a good point, but sidestep a good conclusion I feel like. I can agree that it is surprisingly similar. However the root of the issue is that we need to speak in terms of environmental impact to get to Revenue. I think the (implied) argument that the GP is making is such that Bitcoin is having too large of a cost to the value add to society. I have no idea if this is true or not. I don't even know how we can quantify environmental damage relative to revenue.

kevinqiu1 7y ago

Except in Model A the products have some utilitarian/recreational value to humanity (coats, iPhones, ect.) In Model B the product is a transaction network that is horribly inefficient in terms of $$$ transferred per unit of energy input. It probably makes sense to buy Cocaine (even then other cryptos are likely more efficient energy wise/secure) with Bitcoin, it doesn't make any sense to buy a car with it when there's already a banking system

fermienrico 7y ago
Definitely, I am missing the intrinsic societal value of Goods and Services produced from Model A and that's lacking in Model B. I am curious if Model B can use the generated revenue with a guaranteed (by law) expenditure to benefit the society? Right now, say governments use unused hydroelectric power to mine BTC and use it to buy masks or ventilators? Also, lol at Cocaine :D
- jsjohnst 7y ago
  > say governments use unused hydroelectric power to mine BTC This would be predicated on there being unused hydroelectric power, which there generally is not (unless you factor in over production via other means of generating power that are less environmentally friendly). Unlike wind and solar, hydroelectric power is generally very predictable and controllable how much is produced and when.

ezrast 7y ago

That's not the same at all. You left out an important step in the first model: Energy -> Factory + Labor -> Goods and Services -> Revenue Goods and services improve the life of people, and we have deliberately organized our society in such a way that providing goods and services is incentivized with revenue. That you can also leech revenue for yourself by shuffling liquid assets around while providing no net benefit to the world is a side effect nobody intended. If you happen to reinvest that revenue into something more positive than what the other suckers would have, then no harm no foul, I suppose, but then "Revenue" shouldn't be the endpoint of your model. Something like "Well-being" should.

fermienrico 7y ago
This is a really good counterpoint, thanks. What, if any, government interventions could be put in place to somehow add value to BTC mining? What are your thoughts of governments using a resource such as hydroelectric dam or wind power to mine BTC and using it to build infrastructure (Goods), healthcare (Service), etc.? It kind of sounds like trickle down economics though, I am afraid.
- ezrast 7y ago
  > What, if any, government interventions could be put in place to somehow add value to BTC mining? Well, the typical answer to "what can government do about this thing that is bad for society, but not bad enough to ban outright" is "tax it", though as another poster pointed out offshoring limits the efficacy of this strategy. I'm going to interpret your second question as "What are your thoughts of governments using a resource such as hydroelectric dam or wind power to mine BTC and using it to increase their budget?" since in general, money spent on Expense X doesn't remember whether it was generated from Assets Y or Z; money in the budget is money in the budget. That said, I suppose I'm not strictly opposed to the idea, though I'd be interested in an analysis of the returns you can get on those CPUs when you're optimizing for a community rather than an individual - for example, how much benefit does society get from putting all that CPU to work for something like folding@home?