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> they say that the fact that it is deflationary and can not see inflation is a good thing, when it is actually a bad thing. There is a reason the target inflat

> they say that the fact that it is deflationary and can not see inflation is a good thing, when it is actually a bad thing. There is a reason the target inflation is at ~2% almost everywhere. We need inflation to keep the economy going. And what is the magical reason why we need to keep the economy going? We're burning through this planet's resources much faster than they are being replenished. The economy needs to stop going. If cryptocurrency causes people to use products until they fall apart instead of throwing away a pocket-size supercomputer every year then I am damn fine with that.

foepys 6y ago
Then why waste electricity in the equivalent of Denmark on math puzzles just to write 1MB of data every 10 minutes?
- eMGm4D0zgUAVXc7 6y ago
  To replace the waste of energy that is building giant sky-penises and glass palaces everywhere which pretend to signal economical strength (banks). Until someone crunches the math on how much energy the construction and maintenance of every bank on the whole planet costs, including digging shiny rocks out of the earth, I am not sold on "PoW is a waste of energy". It merely compresses the concept behind the existing banking system into its very essence to do that efficiently without bells and whistles.
  - thezoginator 6y ago
    There is nothing efficient about the blockchain, distributed ledger, etc.
- ballofrubber 6y ago
  So you decide whats a waste of energy then? Here watch this: https://www.youtube.com/watch?v=xLYYh4aPXAM https://www.youtube.com/watch?v=xLYYh4aPXAM Bitcoin mining allows energy companies to de-risk an investment in green energy solutions such as solar. If you place some miners onsite you always have full demand (which is a problem during peak production times). Bitcoin mining is a energy revolution.
microtherion 6y ago
If you believe that (and it's a legitimate point of view), investing in Proof of Work secured cryptocurrencies is a terrible way of putting that belief into action, as PoW burns enormous amounts of resources merely maintaining the ledger of people HODLing their hoards.
- bendergarcia 6y ago
  I think this is an interesting point however, banks today aren't just their IT infrastructure. For banks to function there are so many things that have to work, right down to the local branches and ATMs (and physically moving money around). I think this burning enormous amounts of resources argument isn't fully fleshed out yet. You almost have to think about the entire banking system and compare that to the entire crypto system. Has that been done? It would be interesting to see how this compares.
  - microtherion 6y ago
    I'm sure the existing banking system takes energy+other resources to maintain. But the incentives in the existing banking system are to look for ways to use LESS of these. Each Kilowatt-hour a bank doesn't use shows up in their bottom line. Proof of works is DESIGNED to waste energy. If tomorrow, you'd make hash computations 1000x as energy efficient, the hashing difficult is designed to adjust to make sure that 1000x as many computations are performed and the same amount of energy is wasted. Think of it this way: Currently, 900 bitcoins are mined per day. At a price of $40K per bitcoin, whoever mines those bitcoins earns a combined $36M. So miners are incentivized to invest approximately that much money into energy & equipment per day (minus some profit margin). If they invested substantially less, somebody could invest more and pick off their coins. (And that's counting only mining profits. There are also transaction rewards, and, if you were to control a majority of mining, more nefarious sources of profit). This means that PoW has some truly perverse incentives: * Industry wide energy efficiency does not matter, because the difficulty will adjust accordingly. * The higher the bitcoin price rises, the MORE energy gets wasted (That's a big difference with e.g. Gold. Sure, rising prices lead to more marginal deposits being exploited, but it's not like pickaxe prices for a given prices rose proportionally with gold prices).
bendergarcia 6y ago
I agree with this sentiment. I like the idea that, people who invest in crypto will think longer term about using that crypto to buy things. Just because it is deflationary doesn't mean people will spend less, they'll have to think more about the opportunity cost of what they are buying. And i think that's good for consumers and it's good for the planet.
armada651 6y ago
> And what is the magical reason why we need to keep the economy going? His article starts talking about his investment portofolio, so I think we can safely conclude his opinions are predicated on there being economic growth.

foepys 6y ago

Then why waste electricity in the equivalent of Denmark on math puzzles just to write 1MB of data every 10 minutes?

eMGm4D0zgUAVXc7 6y ago
To replace the waste of energy that is building giant sky-penises and glass palaces everywhere which pretend to signal economical strength (banks). Until someone crunches the math on how much energy the construction and maintenance of every bank on the whole planet costs, including digging shiny rocks out of the earth, I am not sold on "PoW is a waste of energy". It merely compresses the concept behind the existing banking system into its very essence to do that efficiently without bells and whistles.
- thezoginator 6y ago
  There is nothing efficient about the blockchain, distributed ledger, etc.
ballofrubber 6y ago
So you decide whats a waste of energy then? Here watch this: https://www.youtube.com/watch?v=xLYYh4aPXAM https://www.youtube.com/watch?v=xLYYh4aPXAM Bitcoin mining allows energy companies to de-risk an investment in green energy solutions such as solar. If you place some miners onsite you always have full demand (which is a problem during peak production times). Bitcoin mining is a energy revolution.

microtherion 6y ago

If you believe that (and it's a legitimate point of view), investing in Proof of Work secured cryptocurrencies is a terrible way of putting that belief into action, as PoW burns enormous amounts of resources merely maintaining the ledger of people HODLing their hoards.

bendergarcia 6y ago
I think this is an interesting point however, banks today aren't just their IT infrastructure. For banks to function there are so many things that have to work, right down to the local branches and ATMs (and physically moving money around). I think this burning enormous amounts of resources argument isn't fully fleshed out yet. You almost have to think about the entire banking system and compare that to the entire crypto system. Has that been done? It would be interesting to see how this compares.
- microtherion 6y ago
  I'm sure the existing banking system takes energy+other resources to maintain. But the incentives in the existing banking system are to look for ways to use LESS of these. Each Kilowatt-hour a bank doesn't use shows up in their bottom line. Proof of works is DESIGNED to waste energy. If tomorrow, you'd make hash computations 1000x as energy efficient, the hashing difficult is designed to adjust to make sure that 1000x as many computations are performed and the same amount of energy is wasted. Think of it this way: Currently, 900 bitcoins are mined per day. At a price of $40K per bitcoin, whoever mines those bitcoins earns a combined $36M. So miners are incentivized to invest approximately that much money into energy & equipment per day (minus some profit margin). If they invested substantially less, somebody could invest more and pick off their coins. (And that's counting only mining profits. There are also transaction rewards, and, if you were to control a majority of mining, more nefarious sources of profit). This means that PoW has some truly perverse incentives: * Industry wide energy efficiency does not matter, because the difficulty will adjust accordingly. * The higher the bitcoin price rises, the MORE energy gets wasted (That's a big difference with e.g. Gold. Sure, rising prices lead to more marginal deposits being exploited, but it's not like pickaxe prices for a given prices rose proportionally with gold prices).

bendergarcia 6y ago

I agree with this sentiment. I like the idea that, people who invest in crypto will think longer term about using that crypto to buy things. Just because it is deflationary doesn't mean people will spend less, they'll have to think more about the opportunity cost of what they are buying. And i think that's good for consumers and it's good for the planet.

armada651 6y ago

> And what is the magical reason why we need to keep the economy going? His article starts talking about his investment portofolio, so I think we can safely conclude his opinions are predicated on there being economic growth.