9 ms·

Bitcoin and other compute-intensive cryptocurrencies should be banned or taxed so heavily that it's financially infeasible to use them. The amount of energy be

Bitcoin and other compute-intensive cryptocurrencies should be banned or taxed so heavily that it's financially infeasible to use them. The amount of energy being wasted (reportedly more than seven nuclear power plants worth) on what is essentially an unproductive project is quite absurd. In a world where we should all be increasingly concerned about the looming climate catastrophe, it's wholly irresponsible for Bitcoin to exist other than as an academic curiosity. Also I reckon if recreational drugs were legalised, there would be no real reason to use Bitcoin at all. I mean what would be left except for just buying into the pyramid scheme, and ransomware payments?

WealthVsSurvive 6y ago
It's a plutocrat wealth store during uncertainty, like gold, but it has no intrinsic value. That's it, that's its only purpose.
- colejohnson66 6y ago
  Preface: Bitcoin is a neat idea (decentralized currency), but it’s not practical at scale. Reply: To be fair, the US’ currency has no intrinsic value either. Prior to the removal of the gold standard, your $20 bill was backed by exactly $20 worth of gold in some vault. Mid-1970s, the gold standard was stopped and the US’ currency became “fiat”; it only has value because the US says it does. Should the US’ economy collapse, the bills become literally worthless. It’s not exactly the same, but Bitcoin is essentially fiat money as its only value is what people say it is (somewhat similar to the stock market). So I think it’s an apt comparison.
  - alwillis 6y ago
    It’s not exactly the same, but Bitcoin is essentially fiat money as its only value is what people say it is (somewhat similar to the stock market). So I think it’s an apt comparison. Absolutely not. There's nothing "fiat" about Bitcoin. Fiat means by decree—there's no Bitcoin nation or organization that decreed that Bitcoin is valuable. There's no authority that says what a Bitcoin is worth; the market decides. Bitcoin, like gold, is hard money. https://tradesmithdaily.com/educational/bitcoin-is-the-purest-form-of-hard-money-ever-created-2/ https://tradesmithdaily.com/educational/bitcoin-is-the-pures... https://www.realvision.com/shows/the-interview-crypto/videos/the-real-vision-crypto-story-understand-the-future-of-everything https://www.realvision.com/shows/the-interview-crypto/videos... This is perhaps the best podcast for Bitcoin skeptics: "Bitcoin Common Misconceptions w/ Robert Breedlove"—https://podcasts.apple.com/us/podcast/btc001-bitcoin-common-misconceptions-w-robert-breedlove/id928933489?i=1000500156216 https://podcasts.apple.com/us/podcast/btc001-bitcoin-common-...
    - colejohnson66 6y ago
      Nowhere did I say Bitcoin was fiat. I said it’s like fiat in that there’s no store of physical value behind it like the gold standard had. Bitcoin has a value of $x because the market says it has a value of $x. And the USD has a value of $y because the government says it has a value of $y. But on the gold standard, a $20 bill corresponded to a literal $20 of gold - a backing currency. Despite what Bitcoin proponents want to believe, there is no intrinsic value in Bitcoin - hence why its “exchange rate” fluctuates so much. When a new block is mined, ~$20k of gold don’t magically get added to a vault - because there’s no backing currency.
      - alwillis 6y ago
        The fact that Bitcoin is a non-sovereign, hard-capped supply, global, immutable, decentralized digital store of value and that it’s an insurance policy against monetary and fiscal policy irresponsibility from central banks and governments globally is valuable. It can't be inflated and it can't be counterfeited. It's not subject to political pressure or the whims of a government. To the extent that anything has intrinsic value, since value is subjective at the end of the day, Bitcoin certainly does, especially now as we have Great Depression levels of unemployment during a global pandemic. The more the global reserve currency is inflated—that would be the trillions and trillions of dollars that have been printed in the past year—the more valuable Bitcoin becomes.
str33t_punk 6y ago
You would love Eth 2.0 then! The idea of proof of stake is to remove waste from the equation
- deleted 6y ago
  [deleted]
- centimeter 6y ago
  Proof of stake does not have the same security properties as proof of work. The arguments are too complicated for me to usefully communicate them in a short HN post, but as a heuristic just keep in mind that most cryptocurrencies haven't adopted PoS despite it facially seeming better/"less wasteful".
  - sgarman 6y ago
    My favorite argument: "it's too complicated for me to explain!"
    - olalonde 6y ago
      See this comment by Gregory Maxwell (a core Bitcoin developer): https://news.ycombinator.com/item?id=25007874 https://news.ycombinator.com/item?id=25007874 Saying that PoS offers zero security seems a bit extreme but there's definitely a trade-off.
  - X6S1x6Okd1st 6y ago
    Given that ETH is the second biggest cryptocurrency it will be a great stress test of the security properties of proof of stake. Honestly if it runs successfully for multiple staking periods I don't think there will be much of an argument for PoW cryptocurrencies that aren't the dominate coin in their respective type of work. Essentially all coins that share a proof of work with a larger coin are constantly at risk of a 51% attack. We've seen it before with bitcoin forks. Proof of work's security properties are broken for everything that isn't BTC, ETH (although this will change soon) and whatever the dominate CPU coin is (Monero?)
gruez 6y ago
>The amount of energy being wasted (reportedly more than seven nuclear power plants worth) on what is essentially an unproductive project is quite absurd. As opposed to the energy and pollution generated by digging up yellow rocks or shiny crystals? What about billionares flying around the world in private jets or cruising in their yachts? Moreover, if carbon emissions are the issue, why not tax it directly (aka carbon tax), rather than indirectly via a "sin" tax? That would have the effect of incentivizing the reduction of carbon emissions economy wide, rather than in a tiny sector.
- deleted 6y ago
  [deleted]
seibelj 6y ago
If I build a geothermal plant in a place where no one needs power, and use it only to mine bitcoin, then only renewable energy is used, nothing is added to the climate. See https://www.theguardian.com/world/2018/feb/13/how-iceland-became-the-bitcoin-miners-paradise https://www.theguardian.com/world/2018/feb/13/how-iceland-be... Using excess hydro power (china) or renewables like geothermal doesn't hurt the planet. Most bitcoin is mined using marginal energy that would be wasted otherwise. It has to be, as mining is an extremely cutthroat industry where burning actual fossil fuels is generally not cost effective.
- mdoms 6y ago
  Geothermal is neither renewable nor zero-carbon.
  - seibelj 6y ago
    https://www.energy.gov/eere/geothermal/geothermal-faqs https://www.energy.gov/eere/geothermal/geothermal-faqs > First, it's clean. Energy can be extracted without burning a fossil fuel such as coal, gas, or oil. Geothermal fields produce only about one-sixth of the carbon dioxide that a relatively clean natural-gas-fueled power plant produces, and very little if any, of the nitrous oxide or sulfur-bearing gases. Binary plants, which are closed cycle operations, release essentially no emissions. > WHY IS GEOTHERMAL ENERGY A RENEWABLE RESOURCE? > Answer: Because its source is the almost unlimited amount of heat generated by the Earth's core. Even in geothermal areas dependent on a reservoir of hot water, the volume taken out can be reinjected, making it a sustainable energy source.
centimeter 6y ago
> The amount of energy being wasted (reportedly more than seven nuclear power plants worth) on what is essentially an unproductive project is quite absurd. Orders of magnitude less than the amount of energy being "wasted" sustaining the millions of employees of the banking industry. I use scare quotes because the energy is being spent, not wasted. > I mean what would be left except for just buying into the pyramid scheme, and ransomware payments It's hard to give you the benefit of the doubt when you clearly haven't bothered to understand the argument for Bitcoin's value proposition. Hard money (i.e. money which cannot be inflated) has valuable economic properties, and many people think that a hard money is concomitantly a valuable long-term investment/store of value.
- jeffreyrogers 6y ago
  I think most people would agree that finance is too large in most developed countries, but it is also important. It's not like the large companies that pay investment banks to help them with their IPOs or with issuing bonds just want to waste money.
  - paulgb 6y ago
    Also, it's not like the functions that banks currently do would become unnecessary in a Bitcoin maximalist world. It's an apples to oranges comparison.
    - brian_cloutier 6y ago
      I think both of you are misunderstanding what centimeter is trying to say. They didn't suggest that Bitcoin will replace traditional finance, or that traditional finance is a waste.
      - paulgb 6y ago
        Ok, but then at best the argument is whataboutism -- it's ok to waste more energy because we already waste a lot? The reality is that Bitcoin already objectively uses a lot of energy by design, and the problem will only get worse if its price goes up.
ISL 6y ago
The resources consumed by Bitcoin should be compared with those consumed by other transaction-clearing and store-of-value methods. Credit-card companies consume a few percent of revenue for a large chunk of consumer transactions. Gold mining is an environmental catastrophe [1]. Bitcoin is far from perfect, but it is important to place it in context with other systems that achieve the same ends. As bitcoin-mining technology matures, it is increasingly reasonable to think about home-heating/data-furnace ways to make use of the waste heat. [1] https://www.google.com/maps/place/Cripple+Creek,+CO/@38.729572,-105.157268,6067m/data=!3m1!1e3!4m5!3m4!1s0x8714a4857bc1cc4d:0xd14ac36d2725c603!8m2!3d38.7466555!4d-105.1783149 https://www.google.com/maps/place/Cripple+Creek,+CO/@38.7295...
- arcticbull 6y ago
  Energy consumption in the classical model is substantially lower because if you scaled up Bitcoin to the size of Visa alone it would exceed the amount of energy generated on earth a few times over and the amount of ewaste generated on earth too. This is a classic pro Bitcoin argument that’s trivially falsifiable. The fact folks here think their transactions in the online economy should heat their homes is so bananas to me. What is this, the industrial revolution? I mean, I know we’ve got our plague doctor masks on but that’s not intentional.
  - ISL 6y ago
    It depends upon the scaling algorithm -- as volume goes up, there may be efficiencies that allow the (competing!) miners to reduce their transaction fees. In theory, since there is no notion of a Bitcoin chargeback and no need to extend credit to any party in the transaction, the intrinsic cost of a bitcoin transaction should be lower.
    - arcticbull 6y ago
      The intrinsic cost of a transaction is basically zero, the cost associated with Bitcoin is Smaug-style keeping people off your coins. There is no scaling algorithm and no scaling to date. Believe it or not chargebacks and credit are good things. This you can find out if you ask literally anyone why they use their credit card instead of their debit card.
olalonde 6y ago
We should tax/price externalities in general, there is no need to single out cryptocurrency.
johnyzee 6y ago
> essentially an unproductive project Who are you to judge? There are lots of things that I find useless that the world uses a lot more energy on.
cloudinshape 6y ago
Bitcoin is perhaps the most important project we'll see in our lifetimes. The liberation of the most important asset in a capitalist society, money, from the tragedy that has been the current fiat system can not be over emphasized. Money touches everything and is about time the market takes control of it, takes it away from the crony-states destroying the value of our savings, hence destroying our productivity, undermining the law at every turn in defense of a faux-egalitarianism when in reality that power has only been used to inflict (unwillingly or not) more pain to the marginalized sectors propping up a financialized economy that only exacerbates the wealth gap and radicalizes society to a dangerous level that sadly we all know where it ends up. Bitcoin may not end up succeeding, but its fight is worthwhile, and necessary, and in the end inevitable, and because of that if the price now is 7 nuclear power plants we should pay it, as god knows we waste enough resources in lobbying, war and corruption already, because the cost to society of not doing it will be even greater in the future, and most probably, bloodier too.
- arcticbull 6y ago
  None of the social ills you identify are a function of fiat currency which is intentionally a temporary, lossy store of value. You take your fiat and you invest it and nothing you say below the first paragraph matters. Savings are meant to be assets not currency, whether that’s stock, bonds, real estate - whatever. Even a savings account collateralizes loans. You’re not supposed to save cash. Whoever told you that has misled you. You’re supposed to keep a small stockpile to see you through a rainy few months. No more. The issue is that people don’t have money, and they don’t have wealth. This is strictly a social problem. This is not true in all countries but it certainly is true in the US which has a worse wealth and income distribution than your average banana republic. However there’s zero political will to change it. By anyone, on either side of the political spectrum (with the possible exception of the centre-left Bernie Sanders). Social policy is the only and I do mean only way to make real meaningful progress here. Replacing one inflationary currency with a worse distribution than a banana republic, with a different deflationary currency with a worse distribution than a banana republic changes nothing.
  - cloudinshape 6y ago
wavepruner 6y ago
The most important use-case for Bitcoin is the separation of money and state. As in, taking the place of USD as the worlds reserve currency. It does not need to be used to settle every little transaction for this, but rather used as a base layer for institutions. I know you are unlikely to see this use-case as plausible, but that is why so many people are buying Bitcoin right now. For this use case, the amount of energy used to secure Bitcoin should be compared to the amount of energy used to secure the USD. Not just the energy to print cash, maintain digital system, etc, but the energy and human lives spent on war to maintain dominance.
- modeless 6y ago
  > the energy and human lives spent on war to maintain dominance This is a really important point that I want to emphasize. Maintaining the value and scarcity of a fiat currency such as the dollar requires strong law enforcement and ultimately, for a global reserve currency, dominating military power. Bitcoin mining is a rounding error compared to the peacetime US defense budget, let alone all the externalities associated with militaries and war. This is still a big if, but if the function of establishing a scarce digital global reserve currency can be done by an algorithm without relying on law enforcement or militaries, at a fraction of the cost, that is a huge win for the world.
alwillis 6y ago
Actually, is helping to reduce the carbon footprint of natural gas and oil producers: https://www.coindesk.com/energy-giant-equinor-to-cut-gas-flaring-with-bitcoin-mining-tie-up-report https://www.coindesk.com/energy-giant-equinor-to-cut-gas-fla... All of the excess gas and oil that's currently wasted but goes into the atmosphere is starting to be used for Bitcoin mining:https://cointelegraph.com/news/oil-companies-will-dominate-btc-mining-in-five-years-marty-bent https://cointelegraph.com/news/oil-companies-will-dominate-b...
georgesC 6y ago
When I see those kind of subjective opinions getting popular, I'm glad that projects like bitcoin exists. It's really a political topic, as much as economical or tech.
X6S1x6Okd1st 6y ago
IMO the space to watch in cryptocurrencies is distributed storage. After storage is solved we might start to see distributed compute at prices below what data centers cost. Sia currently beats S3 at 1/6th the price.
anythingdude321 6y ago
this has been discussed to death. ultimately Nic Carter's piece settles it i think: https://www.coindesk.com/the-last-word-on-bitcoins-energy-consumption https://www.coindesk.com/the-last-word-on-bitcoins-energy-co... "Ultimately it’s just a matter of opinion as to whether the existence of a non-state, synthetic monetary commodity is a good idea. The truth is that blockspace is a service which is paid for, and that’s where its resource cost is derived. Something duly purchased cannot, by definition, be a waste. Its buyer derives benefit from its existence, regardless of anyone else’s subjective opinion of the merit of the transaction. These same arguments have been made countless times about perceived “costs” of the gold standard, and rebutted on similar grounds before. Fundamentally, millions of individuals the world over still value physical, bank-independent savings, so it still gets pulled out of the ground with regularity. As long as people value Bitcoin, so, too, will the block-space auction continue in perpetuity. The Bitcoin-energy worriers need not despair, however. There is a solution. All they must do is persuade Bitcoin fans to use and value an alternative settlement medium. Their best bet will be to devise a system that is even more secure, offers stronger assurances, settles faster, is more privacy preserving and is more censor resistant – all without using Proof-of-Work. Such a system would be miraculous. I’m waiting with bated breath."
X6S1x6Okd1st 6y ago
We should have a carbon tax. Cryptocurrency mining isn't so awful if it's funding the development of sustainable, low negative externality energy.
Siira 6y ago
Work proof does NOT waste energy. Get your facts together. The more energy is in Bitcoin, the stronger is its guarantee of a non-tamperable ledger. Even as it currently stands, China can change the network (I assume). Coordination is not free, rationality 101.
anthony_barker 6y ago
Bitcoin lightning. Please check it out. A ton of electricity is wasted. Maybe outlaw giant SUVs with 1 person in them?

WealthVsSurvive 6y ago

It's a plutocrat wealth store during uncertainty, like gold, but it has no intrinsic value. That's it, that's its only purpose.

colejohnson66 6y ago
Preface: Bitcoin is a neat idea (decentralized currency), but it’s not practical at scale. Reply: To be fair, the US’ currency has no intrinsic value either. Prior to the removal of the gold standard, your $20 bill was backed by exactly $20 worth of gold in some vault. Mid-1970s, the gold standard was stopped and the US’ currency became “fiat”; it only has value because the US says it does. Should the US’ economy collapse, the bills become literally worthless. It’s not exactly the same, but Bitcoin is essentially fiat money as its only value is what people say it is (somewhat similar to the stock market). So I think it’s an apt comparison.
- alwillis 6y ago
  It’s not exactly the same, but Bitcoin is essentially fiat money as its only value is what people say it is (somewhat similar to the stock market). So I think it’s an apt comparison. Absolutely not. There's nothing "fiat" about Bitcoin. Fiat means by decree—there's no Bitcoin nation or organization that decreed that Bitcoin is valuable. There's no authority that says what a Bitcoin is worth; the market decides. Bitcoin, like gold, is hard money. https://tradesmithdaily.com/educational/bitcoin-is-the-purest-form-of-hard-money-ever-created-2/ https://tradesmithdaily.com/educational/bitcoin-is-the-pures... https://www.realvision.com/shows/the-interview-crypto/videos/the-real-vision-crypto-story-understand-the-future-of-everything https://www.realvision.com/shows/the-interview-crypto/videos... This is perhaps the best podcast for Bitcoin skeptics: "Bitcoin Common Misconceptions w/ Robert Breedlove"—https://podcasts.apple.com/us/podcast/btc001-bitcoin-common-misconceptions-w-robert-breedlove/id928933489?i=1000500156216 https://podcasts.apple.com/us/podcast/btc001-bitcoin-common-...
  - colejohnson66 6y ago
    Nowhere did I say Bitcoin was fiat. I said it’s like fiat in that there’s no store of physical value behind it like the gold standard had. Bitcoin has a value of $x because the market says it has a value of $x. And the USD has a value of $y because the government says it has a value of $y. But on the gold standard, a $20 bill corresponded to a literal $20 of gold - a backing currency. Despite what Bitcoin proponents want to believe, there is no intrinsic value in Bitcoin - hence why its “exchange rate” fluctuates so much. When a new block is mined, ~$20k of gold don’t magically get added to a vault - because there’s no backing currency.
    - alwillis 6y ago
      The fact that Bitcoin is a non-sovereign, hard-capped supply, global, immutable, decentralized digital store of value and that it’s an insurance policy against monetary and fiscal policy irresponsibility from central banks and governments globally is valuable. It can't be inflated and it can't be counterfeited. It's not subject to political pressure or the whims of a government. To the extent that anything has intrinsic value, since value is subjective at the end of the day, Bitcoin certainly does, especially now as we have Great Depression levels of unemployment during a global pandemic. The more the global reserve currency is inflated—that would be the trillions and trillions of dollars that have been printed in the past year—the more valuable Bitcoin becomes.

str33t_punk 6y ago

You would love Eth 2.0 then! The idea of proof of stake is to remove waste from the equation

deleted 6y ago
[deleted]
centimeter 6y ago
Proof of stake does not have the same security properties as proof of work. The arguments are too complicated for me to usefully communicate them in a short HN post, but as a heuristic just keep in mind that most cryptocurrencies haven't adopted PoS despite it facially seeming better/"less wasteful".
- sgarman 6y ago
  My favorite argument: "it's too complicated for me to explain!"
  - olalonde 6y ago
    See this comment by Gregory Maxwell (a core Bitcoin developer): https://news.ycombinator.com/item?id=25007874 https://news.ycombinator.com/item?id=25007874 Saying that PoS offers zero security seems a bit extreme but there's definitely a trade-off.
- X6S1x6Okd1st 6y ago
  Given that ETH is the second biggest cryptocurrency it will be a great stress test of the security properties of proof of stake. Honestly if it runs successfully for multiple staking periods I don't think there will be much of an argument for PoW cryptocurrencies that aren't the dominate coin in their respective type of work. Essentially all coins that share a proof of work with a larger coin are constantly at risk of a 51% attack. We've seen it before with bitcoin forks. Proof of work's security properties are broken for everything that isn't BTC, ETH (although this will change soon) and whatever the dominate CPU coin is (Monero?)

gruez 6y ago

>The amount of energy being wasted (reportedly more than seven nuclear power plants worth) on what is essentially an unproductive project is quite absurd. As opposed to the energy and pollution generated by digging up yellow rocks or shiny crystals? What about billionares flying around the world in private jets or cruising in their yachts? Moreover, if carbon emissions are the issue, why not tax it directly (aka carbon tax), rather than indirectly via a "sin" tax? That would have the effect of incentivizing the reduction of carbon emissions economy wide, rather than in a tiny sector.

deleted 6y ago
[deleted]

seibelj 6y ago

If I build a geothermal plant in a place where no one needs power, and use it only to mine bitcoin, then only renewable energy is used, nothing is added to the climate. See https://www.theguardian.com/world/2018/feb/13/how-iceland-became-the-bitcoin-miners-paradise https://www.theguardian.com/world/2018/feb/13/how-iceland-be... Using excess hydro power (china) or renewables like geothermal doesn't hurt the planet. Most bitcoin is mined using marginal energy that would be wasted otherwise. It has to be, as mining is an extremely cutthroat industry where burning actual fossil fuels is generally not cost effective.

mdoms 6y ago
Geothermal is neither renewable nor zero-carbon.
- seibelj 6y ago
  https://www.energy.gov/eere/geothermal/geothermal-faqs https://www.energy.gov/eere/geothermal/geothermal-faqs > First, it's clean. Energy can be extracted without burning a fossil fuel such as coal, gas, or oil. Geothermal fields produce only about one-sixth of the carbon dioxide that a relatively clean natural-gas-fueled power plant produces, and very little if any, of the nitrous oxide or sulfur-bearing gases. Binary plants, which are closed cycle operations, release essentially no emissions. > WHY IS GEOTHERMAL ENERGY A RENEWABLE RESOURCE? > Answer: Because its source is the almost unlimited amount of heat generated by the Earth's core. Even in geothermal areas dependent on a reservoir of hot water, the volume taken out can be reinjected, making it a sustainable energy source.

centimeter 6y ago

> The amount of energy being wasted (reportedly more than seven nuclear power plants worth) on what is essentially an unproductive project is quite absurd. Orders of magnitude less than the amount of energy being "wasted" sustaining the millions of employees of the banking industry. I use scare quotes because the energy is being spent, not wasted. > I mean what would be left except for just buying into the pyramid scheme, and ransomware payments It's hard to give you the benefit of the doubt when you clearly haven't bothered to understand the argument for Bitcoin's value proposition. Hard money (i.e. money which cannot be inflated) has valuable economic properties, and many people think that a hard money is concomitantly a valuable long-term investment/store of value.

jeffreyrogers 6y ago
I think most people would agree that finance is too large in most developed countries, but it is also important. It's not like the large companies that pay investment banks to help them with their IPOs or with issuing bonds just want to waste money.
- paulgb 6y ago
  Also, it's not like the functions that banks currently do would become unnecessary in a Bitcoin maximalist world. It's an apples to oranges comparison.
  - brian_cloutier 6y ago
    I think both of you are misunderstanding what centimeter is trying to say. They didn't suggest that Bitcoin will replace traditional finance, or that traditional finance is a waste.
    - paulgb 6y ago
      Ok, but then at best the argument is whataboutism -- it's ok to waste more energy because we already waste a lot? The reality is that Bitcoin already objectively uses a lot of energy by design, and the problem will only get worse if its price goes up.

ISL 6y ago

The resources consumed by Bitcoin should be compared with those consumed by other transaction-clearing and store-of-value methods. Credit-card companies consume a few percent of revenue for a large chunk of consumer transactions. Gold mining is an environmental catastrophe [1]. Bitcoin is far from perfect, but it is important to place it in context with other systems that achieve the same ends. As bitcoin-mining technology matures, it is increasingly reasonable to think about home-heating/data-furnace ways to make use of the waste heat. [1] https://www.google.com/maps/place/Cripple+Creek,+CO/@38.729572,-105.157268,6067m/data=!3m1!1e3!4m5!3m4!1s0x8714a4857bc1cc4d:0xd14ac36d2725c603!8m2!3d38.7466555!4d-105.1783149 https://www.google.com/maps/place/Cripple+Creek,+CO/@38.7295...

arcticbull 6y ago
Energy consumption in the classical model is substantially lower because if you scaled up Bitcoin to the size of Visa alone it would exceed the amount of energy generated on earth a few times over and the amount of ewaste generated on earth too. This is a classic pro Bitcoin argument that’s trivially falsifiable. The fact folks here think their transactions in the online economy should heat their homes is so bananas to me. What is this, the industrial revolution? I mean, I know we’ve got our plague doctor masks on but that’s not intentional.
- ISL 6y ago
  It depends upon the scaling algorithm -- as volume goes up, there may be efficiencies that allow the (competing!) miners to reduce their transaction fees. In theory, since there is no notion of a Bitcoin chargeback and no need to extend credit to any party in the transaction, the intrinsic cost of a bitcoin transaction should be lower.
  - arcticbull 6y ago
    The intrinsic cost of a transaction is basically zero, the cost associated with Bitcoin is Smaug-style keeping people off your coins. There is no scaling algorithm and no scaling to date. Believe it or not chargebacks and credit are good things. This you can find out if you ask literally anyone why they use their credit card instead of their debit card.

olalonde 6y ago

We should tax/price externalities in general, there is no need to single out cryptocurrency.

johnyzee 6y ago

> essentially an unproductive project Who are you to judge? There are lots of things that I find useless that the world uses a lot more energy on.

cloudinshape 6y ago

Bitcoin is perhaps the most important project we'll see in our lifetimes. The liberation of the most important asset in a capitalist society, money, from the tragedy that has been the current fiat system can not be over emphasized. Money touches everything and is about time the market takes control of it, takes it away from the crony-states destroying the value of our savings, hence destroying our productivity, undermining the law at every turn in defense of a faux-egalitarianism when in reality that power has only been used to inflict (unwillingly or not) more pain to the marginalized sectors propping up a financialized economy that only exacerbates the wealth gap and radicalizes society to a dangerous level that sadly we all know where it ends up. Bitcoin may not end up succeeding, but its fight is worthwhile, and necessary, and in the end inevitable, and because of that if the price now is 7 nuclear power plants we should pay it, as god knows we waste enough resources in lobbying, war and corruption already, because the cost to society of not doing it will be even greater in the future, and most probably, bloodier too.

arcticbull 6y ago
None of the social ills you identify are a function of fiat currency which is intentionally a temporary, lossy store of value. You take your fiat and you invest it and nothing you say below the first paragraph matters. Savings are meant to be assets not currency, whether that’s stock, bonds, real estate - whatever. Even a savings account collateralizes loans. You’re not supposed to save cash. Whoever told you that has misled you. You’re supposed to keep a small stockpile to see you through a rainy few months. No more. The issue is that people don’t have money, and they don’t have wealth. This is strictly a social problem. This is not true in all countries but it certainly is true in the US which has a worse wealth and income distribution than your average banana republic. However there’s zero political will to change it. By anyone, on either side of the political spectrum (with the possible exception of the centre-left Bernie Sanders). Social policy is the only and I do mean only way to make real meaningful progress here. Replacing one inflationary currency with a worse distribution than a banana republic, with a different deflationary currency with a worse distribution than a banana republic changes nothing.
- cloudinshape 6y ago

wavepruner 6y ago

The most important use-case for Bitcoin is the separation of money and state. As in, taking the place of USD as the worlds reserve currency. It does not need to be used to settle every little transaction for this, but rather used as a base layer for institutions. I know you are unlikely to see this use-case as plausible, but that is why so many people are buying Bitcoin right now. For this use case, the amount of energy used to secure Bitcoin should be compared to the amount of energy used to secure the USD. Not just the energy to print cash, maintain digital system, etc, but the energy and human lives spent on war to maintain dominance.

modeless 6y ago
> the energy and human lives spent on war to maintain dominance This is a really important point that I want to emphasize. Maintaining the value and scarcity of a fiat currency such as the dollar requires strong law enforcement and ultimately, for a global reserve currency, dominating military power. Bitcoin mining is a rounding error compared to the peacetime US defense budget, let alone all the externalities associated with militaries and war. This is still a big if, but if the function of establishing a scarce digital global reserve currency can be done by an algorithm without relying on law enforcement or militaries, at a fraction of the cost, that is a huge win for the world.

alwillis 6y ago

Actually, is helping to reduce the carbon footprint of natural gas and oil producers: https://www.coindesk.com/energy-giant-equinor-to-cut-gas-flaring-with-bitcoin-mining-tie-up-report https://www.coindesk.com/energy-giant-equinor-to-cut-gas-fla... All of the excess gas and oil that's currently wasted but goes into the atmosphere is starting to be used for Bitcoin mining:https://cointelegraph.com/news/oil-companies-will-dominate-btc-mining-in-five-years-marty-bent https://cointelegraph.com/news/oil-companies-will-dominate-b...

georgesC 6y ago

When I see those kind of subjective opinions getting popular, I'm glad that projects like bitcoin exists. It's really a political topic, as much as economical or tech.

X6S1x6Okd1st 6y ago

IMO the space to watch in cryptocurrencies is distributed storage. After storage is solved we might start to see distributed compute at prices below what data centers cost. Sia currently beats S3 at 1/6th the price.

anythingdude321 6y ago

this has been discussed to death. ultimately Nic Carter's piece settles it i think: https://www.coindesk.com/the-last-word-on-bitcoins-energy-consumption https://www.coindesk.com/the-last-word-on-bitcoins-energy-co... "Ultimately it’s just a matter of opinion as to whether the existence of a non-state, synthetic monetary commodity is a good idea. The truth is that blockspace is a service which is paid for, and that’s where its resource cost is derived. Something duly purchased cannot, by definition, be a waste. Its buyer derives benefit from its existence, regardless of anyone else’s subjective opinion of the merit of the transaction. These same arguments have been made countless times about perceived “costs” of the gold standard, and rebutted on similar grounds before. Fundamentally, millions of individuals the world over still value physical, bank-independent savings, so it still gets pulled out of the ground with regularity. As long as people value Bitcoin, so, too, will the block-space auction continue in perpetuity. The Bitcoin-energy worriers need not despair, however. There is a solution. All they must do is persuade Bitcoin fans to use and value an alternative settlement medium. Their best bet will be to devise a system that is even more secure, offers stronger assurances, settles faster, is more privacy preserving and is more censor resistant – all without using Proof-of-Work. Such a system would be miraculous. I’m waiting with bated breath."

X6S1x6Okd1st 6y ago

We should have a carbon tax. Cryptocurrency mining isn't so awful if it's funding the development of sustainable, low negative externality energy.

Siira 6y ago

Work proof does NOT waste energy. Get your facts together. The more energy is in Bitcoin, the stronger is its guarantee of a non-tamperable ledger. Even as it currently stands, China can change the network (I assume). Coordination is not free, rationality 101.

anthony_barker 6y ago

Bitcoin lightning. Please check it out. A ton of electricity is wasted. Maybe outlaw giant SUVs with 1 person in them?