6 ms·

> That is not a value most people care about. People in a free market pay for what they care about. To date, those who use Bitcoin have been happy to pay for t

by noch 6y ago

> That is not a value most people care about. People in a free market pay for what they care about. To date, those who use Bitcoin have been happy to pay for the energy the network consumes. In the end, that is all that matters.

Grustaf 6y ago
I'm not saying people are not willing to pay for it, I'm saying it's inefficient and specifically that the metric mentioned is not relevant.
- noch 6y ago
  > I'm saying it's inefficient Compared to what else that provides a decentralised, censorship resistant monetary network without trusted third parties required to secure it? > the metric mentioned is not relevant It's relevant in explaining the energy usage relative to economic value and architecture of an engineered monetary system. If you have a metric that can explain Bitcoin's design and value proposition with respect to energy consumption better than Dan Held's explanation, you should propose it and logically demonstrate your idea's superior explanatory and predictive power.
  - Grustaf 6y ago
    > Compared to what else that provides a decentralised, censorship resistant monetary network without trusted third parties required to secure it? I don't particularly feel that any of those characteristics are very important, and I think most people would agree. > It's relevant in explaining the energy usage relative to economic value and architecture of an engineered monetary system Again, that is not how you construct a metric for how cost efficient something is. You start with the "job to be done" of the object. And storing all historical transactions forever is seldom desirable. If you want to measure the efficiency of electric cars vs combustion engine ones you look at things like miles/Wh or CO2 emissions/mile. You DON'T look at explosions per second or something like that. It might explain how combustion engines work but it is not the goal of a car.
    - noch 6y ago
      > I don't particularly feel that any of those characteristics are very important, and I think most people would agree. Bitcoin doesn't care what you feel. It exists as an engineering artifact, continues to exist and functions to serve the needs of those who use it. Those who use it don't pay for it with their feelings but with their hard earned money. You evaluate a piece of engineering for what it aims to achieves not what you feel it should achieve. Bitcoin at block height 670061 has a market cap >USD800B. That's a lot of people who feel the characteristics of Bitcoin are valuable. Cf. A statement like: "I don't particularly feel HD screens on a phone are important and I think most people would agree that they're a waste and bad for the environment. Therefore HD screens shouldn't be in smart phones." > if you want to measure the efficiency of electric cars vs combustion engine ones you look at things like miles/Wh or CO2 emissions/mile. > You DON'T look at explosions per second or something like that. It might explain how combustion engines work but it is not the goal of a car. Again, Dan Held said: "the efficiency of Bitcoin’s PoW, should be defined in terms of the security of an economic history."[0] That history is perhaps analogous to the entire lifetime travel distance of the vehicle. Let a coin be a vehicle. There are 21M coins. Let a block be a mile long and infinitely wide (for transactions of any value can be contained in a block without limit to the value), for instance, and you can get your miles/Wh. Or just humbly study the Bitcoin timechain and understand what it does and why it does it. [0]: https://danhedl.medium.com/pow-is-efficient-aa3d442754d3 https://danhedl.medium.com/pow-is-efficient-aa3d442754d3
      - Grustaf 6y ago
        Excellent analogy. No government would allow a car where the gas mileage decreased proportionally to how far you’ve driven since the car was made. That would be a very silly way to waste fuel.
        noch 6y ago
        > a car where the gas mileage decreased proportionally to how far you’ve driven since the car was made. Torturing metaphors: it's more useful to say that the gas/mile (kw per block) fuels all 21 million cars simultaneously, not just one car, and ensures that all the roads they've travelled remain useable, and that anyone in the world can use a car at any time and verify the journey it made and the cargo it carried. Further, each car can carry an arbitrary amount of cargo (the value of the transaction).
bccdee 6y ago
Markets don't account for externalities. That's the reason this is an issue — people as individuals are willing to pay for the energy they spend mining cryptocurrency, but as a society it's a huge waste of energy and a massive source of carbon that is entirely unnecessary. Like, I don't just want to say "the tragedy of the commons" over and over again, but you can't just wave your hands and go "the free market will ensure that we don't emit too much carbon"
- noch 6y ago
  > individuals are willing to pay for the energy they spend mining cryptocurrency, but as a society it's a huge waste of energy and a massive source of carbon that is entirely unnecessary. Society is made up of individuals. Assuming you don't believe a small cabal of individuals should, in the name of society and ideology, force other individuals to follow their dictates, the questions then are: - will eliminating Bitcoin really reduce carbon emissions to a meaningful extent compared to other sources of carbon emissions? - How much are individuals willing to pay to reduce carbon emissions? i.e. skin in the game. One way to pay to reduce Bitcoin's carbon emissions would be to sufficiently/relentlessly short Bitcoin to tank the price or develop/invest in an alternative green currency and let the market decide which is best. - How much, in carbon emission, are individuals willing to pay for the benefit of a given technology like Bitcoin?
  - Grustaf 6y ago
    You really don't get the concept of "tragedy of the commons" do you? The problem is that the people that use bitcoins are not the only ones that pay for them. We all pay because of the negative externalities involved with producing electricity. They are not part of the price of electricity currently. If all countries had robust carbon taxes or similar schemes, then you could possibly argue that the price of bitcoin reflects their true cost. Possibly. But definitely not now.
    - noch 6y ago
      > If all countries had robust carbon taxes or similar schemes, then you could possibly argue that the price of bitcoin reflects their true cost. Possibly. But definitely not now. This contradicts your earlier point that markets can't resolve negative externalities. Presumably a tax will cause a marked market response. Further, Bitcoin's price is a reflection of demand, not cost. In the long run, however, the price of any currency will likely converge to its cost of production, which is also why fiat is fundamentally a poor store of value. > You really don't get the concept of "tragedy of the commons" do you? The tragedy of the commons is mostly in the word "commons", as opposed to "private property". I merely have a different opinion on how negative externalities should be resolved. [0] > We all pay because of the negative externalities involved with producing electricity [...] Such a statement is too nebulous to be useful. Consider that what "we" pay is entirely subjective based on what individuals value. I know people who care deeply about every part per millon of carbon emission while others don't. How then do you propose to determine what "we" pay? Who is this "we"? Are you going to somehow convince nonplussed people that they are paying for some particular externality that they don't care about? Suffering and loss are subjective. You want carbon taxes, enforced by some authority who can presumably accurately determine the correct price for such things. All I can say is good luck. And how many other externalities would you like taxed? At what granularity? Perhaps households or individuals should pay carbon taxes too? What about all that energy wasted on Christmas lights?[1] What's your preferred maximum level of elictricity production that will guarantee carbon neutrality? Is carbon neutrality the most important thing and everything else a distant second? However, for those who care deeply about the matter, they can make their preferences and values felt right now and every day in the market, which is especially easy to do in cryptocurrency markets. Organise a coalition to short Bitcoin to protect the environment. Surely there are many of you just on HN alone given that this article was on the front page. Shorting is a form of taxing. Drive the price to 0. Save the environment. If one is not willing to have skin in the game to stop Bitcoin's energy consumption, they are just larping as saviours of the environment. [0]: https://mises.org/library/austrian-theory-environmental-economics https://mises.org/library/austrian-theory-environmental-econ... [1] https://www.nsenergybusiness.com/features/christmas-lights-energy/ https://www.nsenergybusiness.com/features/christmas-lights-e...

by noch 6y ago

Grustaf 6y ago

I'm not saying people are not willing to pay for it, I'm saying it's inefficient and specifically that the metric mentioned is not relevant.

noch 6y ago
> I'm saying it's inefficient Compared to what else that provides a decentralised, censorship resistant monetary network without trusted third parties required to secure it? > the metric mentioned is not relevant It's relevant in explaining the energy usage relative to economic value and architecture of an engineered monetary system. If you have a metric that can explain Bitcoin's design and value proposition with respect to energy consumption better than Dan Held's explanation, you should propose it and logically demonstrate your idea's superior explanatory and predictive power.
- Grustaf 6y ago
  > Compared to what else that provides a decentralised, censorship resistant monetary network without trusted third parties required to secure it? I don't particularly feel that any of those characteristics are very important, and I think most people would agree. > It's relevant in explaining the energy usage relative to economic value and architecture of an engineered monetary system Again, that is not how you construct a metric for how cost efficient something is. You start with the "job to be done" of the object. And storing all historical transactions forever is seldom desirable. If you want to measure the efficiency of electric cars vs combustion engine ones you look at things like miles/Wh or CO2 emissions/mile. You DON'T look at explosions per second or something like that. It might explain how combustion engines work but it is not the goal of a car.
  - noch 6y ago
    > I don't particularly feel that any of those characteristics are very important, and I think most people would agree. Bitcoin doesn't care what you feel. It exists as an engineering artifact, continues to exist and functions to serve the needs of those who use it. Those who use it don't pay for it with their feelings but with their hard earned money. You evaluate a piece of engineering for what it aims to achieves not what you feel it should achieve. Bitcoin at block height 670061 has a market cap >USD800B. That's a lot of people who feel the characteristics of Bitcoin are valuable. Cf. A statement like: "I don't particularly feel HD screens on a phone are important and I think most people would agree that they're a waste and bad for the environment. Therefore HD screens shouldn't be in smart phones." > if you want to measure the efficiency of electric cars vs combustion engine ones you look at things like miles/Wh or CO2 emissions/mile. > You DON'T look at explosions per second or something like that. It might explain how combustion engines work but it is not the goal of a car. Again, Dan Held said: "the efficiency of Bitcoin’s PoW, should be defined in terms of the security of an economic history."[0] That history is perhaps analogous to the entire lifetime travel distance of the vehicle. Let a coin be a vehicle. There are 21M coins. Let a block be a mile long and infinitely wide (for transactions of any value can be contained in a block without limit to the value), for instance, and you can get your miles/Wh. Or just humbly study the Bitcoin timechain and understand what it does and why it does it. [0]: https://danhedl.medium.com/pow-is-efficient-aa3d442754d3 https://danhedl.medium.com/pow-is-efficient-aa3d442754d3
    - Grustaf 6y ago
      Excellent analogy. No government would allow a car where the gas mileage decreased proportionally to how far you’ve driven since the car was made. That would be a very silly way to waste fuel.
      - noch 6y ago
        > a car where the gas mileage decreased proportionally to how far you’ve driven since the car was made. Torturing metaphors: it's more useful to say that the gas/mile (kw per block) fuels all 21 million cars simultaneously, not just one car, and ensures that all the roads they've travelled remain useable, and that anyone in the world can use a car at any time and verify the journey it made and the cargo it carried. Further, each car can carry an arbitrary amount of cargo (the value of the transaction).

bccdee 6y ago

Markets don't account for externalities. That's the reason this is an issue — people as individuals are willing to pay for the energy they spend mining cryptocurrency, but as a society it's a huge waste of energy and a massive source of carbon that is entirely unnecessary. Like, I don't just want to say "the tragedy of the commons" over and over again, but you can't just wave your hands and go "the free market will ensure that we don't emit too much carbon"

noch 6y ago
> individuals are willing to pay for the energy they spend mining cryptocurrency, but as a society it's a huge waste of energy and a massive source of carbon that is entirely unnecessary. Society is made up of individuals. Assuming you don't believe a small cabal of individuals should, in the name of society and ideology, force other individuals to follow their dictates, the questions then are: - will eliminating Bitcoin really reduce carbon emissions to a meaningful extent compared to other sources of carbon emissions? - How much are individuals willing to pay to reduce carbon emissions? i.e. skin in the game. One way to pay to reduce Bitcoin's carbon emissions would be to sufficiently/relentlessly short Bitcoin to tank the price or develop/invest in an alternative green currency and let the market decide which is best. - How much, in carbon emission, are individuals willing to pay for the benefit of a given technology like Bitcoin?
- Grustaf 6y ago
  You really don't get the concept of "tragedy of the commons" do you? The problem is that the people that use bitcoins are not the only ones that pay for them. We all pay because of the negative externalities involved with producing electricity. They are not part of the price of electricity currently. If all countries had robust carbon taxes or similar schemes, then you could possibly argue that the price of bitcoin reflects their true cost. Possibly. But definitely not now.
  - noch 6y ago
    > If all countries had robust carbon taxes or similar schemes, then you could possibly argue that the price of bitcoin reflects their true cost. Possibly. But definitely not now. This contradicts your earlier point that markets can't resolve negative externalities. Presumably a tax will cause a marked market response. Further, Bitcoin's price is a reflection of demand, not cost. In the long run, however, the price of any currency will likely converge to its cost of production, which is also why fiat is fundamentally a poor store of value. > You really don't get the concept of "tragedy of the commons" do you? The tragedy of the commons is mostly in the word "commons", as opposed to "private property". I merely have a different opinion on how negative externalities should be resolved. [0] > We all pay because of the negative externalities involved with producing electricity [...] Such a statement is too nebulous to be useful. Consider that what "we" pay is entirely subjective based on what individuals value. I know people who care deeply about every part per millon of carbon emission while others don't. How then do you propose to determine what "we" pay? Who is this "we"? Are you going to somehow convince nonplussed people that they are paying for some particular externality that they don't care about? Suffering and loss are subjective. You want carbon taxes, enforced by some authority who can presumably accurately determine the correct price for such things. All I can say is good luck. And how many other externalities would you like taxed? At what granularity? Perhaps households or individuals should pay carbon taxes too? What about all that energy wasted on Christmas lights?[1] What's your preferred maximum level of elictricity production that will guarantee carbon neutrality? Is carbon neutrality the most important thing and everything else a distant second? However, for those who care deeply about the matter, they can make their preferences and values felt right now and every day in the market, which is especially easy to do in cryptocurrency markets. Organise a coalition to short Bitcoin to protect the environment. Surely there are many of you just on HN alone given that this article was on the front page. Shorting is a form of taxing. Drive the price to 0. Save the environment. If one is not willing to have skin in the game to stop Bitcoin's energy consumption, they are just larping as saviours of the environment. [0]: https://mises.org/library/austrian-theory-environmental-economics https://mises.org/library/austrian-theory-environmental-econ... [1] https://www.nsenergybusiness.com/features/christmas-lights-energy/ https://www.nsenergybusiness.com/features/christmas-lights-e...