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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

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.

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.