6 ms·

To the scalability issues section I'd add the environmental aspect. It has already been reported that by some estimates Bitcoin today consumes more energy than

by aylmao 6y ago

To the scalability issues section I'd add the environmental aspect. It has already been reported that by some estimates Bitcoin today consumes more energy than Argentina, and that's with an estimated 1 million active wallets per day. Argentina is home to about 50 million people. This means that in order to have Bitcoin serve as the daily currency for all of Argentina's 50 million people would at least 50-tuple its energy consumption. This is comically absurd. It's thankfully not achievable or economical with the energy resources we currently have available, because pursuing a 4,900% increase in energy consumption would be disastrous. If crypto sees any widespread usage I think it'll be as the backbone of financial systems, for big transactions between institutions. In that space I don't see much incentive for people to adopt it— there's already a good level of trust amongst the parties, various levels of transaction verification, and it's mostly all digital already. [1]: https://www.bbc.com/news/technology-56012952 https://www.bbc.com/news/technology-56012952 [2]: https://www.bitcoinmarketjournal.com/how-many-people-use-bitcoin/ https://www.bitcoinmarketjournal.com/how-many-people-use-bit... [3]: https://en.wikipedia.org/wiki/Argentina https://en.wikipedia.org/wiki/Argentina

WanderPanda 6y ago
> This means that in order to have Bitcoin serve as the daily currency for all of Argentina's 50 million people would at least 50-tuple its energy consumption. How do you justify this linear extrapolation?
waheoo 6y ago
This is like saying we shouldn't build or invest in computers anymore because they cost so much and take up whole rooms full of space. Bitcoin is version 0.1 of a new way to record and share a common ledger. The cost and energy requirements are simple tradeoffs that are completely configurable to the applications needs. Go look at all the alt coins out there, blockchain tech does not require the same levels of decentralization as Bitcoin, many work off more centrally controlled systems, not all require huge amounts of energy to mine blocks, and many are extremely aware of the need to be an environmentally friendly solution. Like I get it's a very valid criticism to make about Bitcoin. But it's such a contrarian for the sake of being contrarian thing to say and completely ignores ten years of alt coin and defi evolution. Feel free to keep bag holding those "federal" reserve notes, they'll pay off one day I'm sure.
- bawolff 6y ago
  Not really, most of the centralized ones could just be replaced with a mysql server and have the same properties. Notable exception being some of the proof-of-stake schemes, but its not like that's a scaling tradeoff but a totally different approach.
  - waheoo 6y ago
    And 64k memory should be enough for everybody but banks can't share a single MySQL database. They can try, but they would need an impartial intermediary. As someone that got shafted by the gme shutdown, I would have loved to be trading over a block chain unimpeded by "regulatory oversight".
bawolff 6y ago
Well i agree that the energy cost is immense, it doesn't scale with number of users but mining power.
- deleted 6y ago
  [deleted]
- Ekaros 6y ago
  Energy cost scales with value of coins produced. As the price of bitcoin goes up so does the cost of energy and equipment used for mining. Market searching optimum. This will be fixed at some point, but the point when rewards get low is very far away... So if Bitcoin were really come the one true currency with global market cap, the costs would be enormous...
lima 6y ago
Everyone (except Bitcoin) agree that Proof of Stake is the way to move forward. Even Ethereum is migrating to pure PoS consensus. This solves the environmental aspect, thankfully.
- tromp 6y ago
  Hundreds of PoW altcoins disagree. PoS is not a coin distribution method either.
  - lima 6y ago
    Hundreds of PoW altcoins are doomed: https://www.crypto51.app https://www.crypto51.app
    - tromp 6y ago
      Most PoW coins that have been 51% attacked go on merrily with little to no price suppression. The worst effect is much longer deposit confirmation times on exchanges.
  - Ekaros 6y ago
    How many of these hundreds of PoW altcoins are used for making payments for real products and services? Let's say single transaction a day over reasonable period?
andreaorru 6y ago
The energy argument has been debunked over and over again. I recommend you read this thread by Yassine Elmanjdra (analyst at ARK Invest): https://twitter.com/yassineARK/status/1360343382556483587?s=09 https://twitter.com/yassineARK/status/1360343382556483587?s=...
- qayxc 6y ago
  This "debunk" is bunk in at of itself - have you actually looked at the presented arguments? They are ridiculous and make no sense whatsoever (e.g. comparing PoW with literal gold mining - as if gold were a currency...).
  - andreaorru 6y ago
    Of course, I've read everything, including the article by Nic Carter [1] (which I highly recommend) and all his related articles on the subject. The comparison with gold mining is quite apt actually - one of the use cases for Bitcoin is to act as a store of value and hedge against inflation, precisely like gold. [1] https://www.coindesk.com/the-last-word-on-bitcoins-energy-consumption?amp=1 https://www.coindesk.com/the-last-word-on-bitcoins-energy-co...
    - qayxc 6y ago
      > The comparison with gold mining is quite apt actually - one of the use cases for Bitcoin is to act as a store of value and hedge against inflation, precisely like gold. Ahem, the primary use of gold is jewellery, not a hedge value against inflation. That's where the vast majority of all mined gold ends up (plus some in electronics and medical applications).
      - andreaorru 6y ago
        That's not entirely correct. Less than half of the demand for gold is for jewellery, and only a tiny percentage is used for technology. Almost half of it is held in vaults to act as a store of value. [0] Regardless of what the percentages are, the price of gold is mostly determined by speculation. It varies wildly during periods of economic uncertainty. Arguably, not because there's more or less demand for its industrial use cases, but precisely for the reason I mentioned: a big part of its value derives from being perceived as a safe haven for storing wealth and as a hedge against inflation. Bitcoin positions itself as a direct competitor in that sense. Its main narrative in the past few years has been "digital gold" or "gold 2.0". It has some of the same properties of gold (scarce, difficult to produce) and some better ones (fast and easy to transfer, easily auditable, impossible to steal or confiscate). I don't think Bitcoin is suited to be used as a currency to i.e. buy coffee. But it doesn't have to do that in order to succeed. Stablecoins are a better tool for that use case. [0] https://www.statista.com/statistics/299609/gold-demand-by-industry-sector-share/ https://www.statista.com/statistics/299609/gold-demand-by-in...
Erlich_Bachman 6y ago
> This means that in order to have Bitcoin serve as the daily currency for all of Argentina's 50 million people would at least 50-tuple its energy consumption. That's not how Bitcoin or any PoW works. The amount of energy used is not a direct function of number of wallets. It is not either a direct function of number of transactions.
- bildung 6y ago
  The only intermediate step is the fact that the amount of currency in circulation needs to raise. As that isn't possible with bitcoin, the price has to rise. And that increases the incentive for throwing more recourses into mining.
RurouniK 6y ago
"This means that in order to have Bitcoin serve as the daily currency for all of Argentina's 50 million people would at least 50-tuple its energy consumption." This comment is beyond dumb and just showcases that you have no clue whatsoever about how bitcoin works. Bitcoin's power consumption doesn't go up when more people use it. It goes up when more people COMPETE for the production of the next block, meaning when there are more miners. Also more than 50% of bitcoin's power consumption already comes from renewable sources. Also youtube and online gaming need many times more power and I'd argue that a global, open, permissionless financial network is far more important.
- bildung 6y ago
  No, it isn't dumb. The monetary base currently provided by bitcoin is tiny. If an economy would switch to bitcoin as it's currency, the amount of BTC in circulation would need to gain multiple zeroes. As bitcoin has a fixed cap, that would mean the price would rise. And that, in consequence, would make mining way more profitable, with newcomers entering the field and established organizations to employ more resources. And that increases the power needed.
- smartties 6y ago
  > Also more than 50% of bitcoin's power consumption already comes from renewable sources. You are tweaking numbers here. The only source I've found, It says 39% and it's from a shady crypto website that make a living promoting cryptocurrencies [0]. And if you look deeper in the source [1] they quoted it says "A total of 280 entities from over 50 countries across various regions responded to the surveys.". So this study is based on surveys they sent to companies... Without anyway to verify their answer. This study has 0 value. Renewable energy is way more expensive and not reliable. https://cointelegraph.com/news/report-76-crypto-miners-use-renewables-as-part-of-their-energy-mix https://cointelegraph.com/news/report-76-crypto-miners-use-r... https://www.jbs.cam.ac.uk/faculty-research/centres/alternative-finance/publications/3rd-global-cryptoasset-benchmarking-study/ https://www.jbs.cam.ac.uk/faculty-research/centres/alternati...

by aylmao 6y ago

WanderPanda 6y ago

> This means that in order to have Bitcoin serve as the daily currency for all of Argentina's 50 million people would at least 50-tuple its energy consumption. How do you justify this linear extrapolation?

waheoo 6y ago

This is like saying we shouldn't build or invest in computers anymore because they cost so much and take up whole rooms full of space. Bitcoin is version 0.1 of a new way to record and share a common ledger. The cost and energy requirements are simple tradeoffs that are completely configurable to the applications needs. Go look at all the alt coins out there, blockchain tech does not require the same levels of decentralization as Bitcoin, many work off more centrally controlled systems, not all require huge amounts of energy to mine blocks, and many are extremely aware of the need to be an environmentally friendly solution. Like I get it's a very valid criticism to make about Bitcoin. But it's such a contrarian for the sake of being contrarian thing to say and completely ignores ten years of alt coin and defi evolution. Feel free to keep bag holding those "federal" reserve notes, they'll pay off one day I'm sure.

bawolff 6y ago
Not really, most of the centralized ones could just be replaced with a mysql server and have the same properties. Notable exception being some of the proof-of-stake schemes, but its not like that's a scaling tradeoff but a totally different approach.
- waheoo 6y ago
  And 64k memory should be enough for everybody but banks can't share a single MySQL database. They can try, but they would need an impartial intermediary. As someone that got shafted by the gme shutdown, I would have loved to be trading over a block chain unimpeded by "regulatory oversight".

bawolff 6y ago

Well i agree that the energy cost is immense, it doesn't scale with number of users but mining power.

deleted 6y ago
[deleted]
Ekaros 6y ago
Energy cost scales with value of coins produced. As the price of bitcoin goes up so does the cost of energy and equipment used for mining. Market searching optimum. This will be fixed at some point, but the point when rewards get low is very far away... So if Bitcoin were really come the one true currency with global market cap, the costs would be enormous...

lima 6y ago

Everyone (except Bitcoin) agree that Proof of Stake is the way to move forward. Even Ethereum is migrating to pure PoS consensus. This solves the environmental aspect, thankfully.

tromp 6y ago
Hundreds of PoW altcoins disagree. PoS is not a coin distribution method either.
- lima 6y ago
  Hundreds of PoW altcoins are doomed: https://www.crypto51.app https://www.crypto51.app
  - tromp 6y ago
    Most PoW coins that have been 51% attacked go on merrily with little to no price suppression. The worst effect is much longer deposit confirmation times on exchanges.
- Ekaros 6y ago
  How many of these hundreds of PoW altcoins are used for making payments for real products and services? Let's say single transaction a day over reasonable period?

andreaorru 6y ago

The energy argument has been debunked over and over again. I recommend you read this thread by Yassine Elmanjdra (analyst at ARK Invest): https://twitter.com/yassineARK/status/1360343382556483587?s=09 https://twitter.com/yassineARK/status/1360343382556483587?s=...

qayxc 6y ago
This "debunk" is bunk in at of itself - have you actually looked at the presented arguments? They are ridiculous and make no sense whatsoever (e.g. comparing PoW with literal gold mining - as if gold were a currency...).
- andreaorru 6y ago
  Of course, I've read everything, including the article by Nic Carter [1] (which I highly recommend) and all his related articles on the subject. The comparison with gold mining is quite apt actually - one of the use cases for Bitcoin is to act as a store of value and hedge against inflation, precisely like gold. [1] https://www.coindesk.com/the-last-word-on-bitcoins-energy-consumption?amp=1 https://www.coindesk.com/the-last-word-on-bitcoins-energy-co...
  - qayxc 6y ago
    > The comparison with gold mining is quite apt actually - one of the use cases for Bitcoin is to act as a store of value and hedge against inflation, precisely like gold. Ahem, the primary use of gold is jewellery, not a hedge value against inflation. That's where the vast majority of all mined gold ends up (plus some in electronics and medical applications).
    - andreaorru 6y ago
      That's not entirely correct. Less than half of the demand for gold is for jewellery, and only a tiny percentage is used for technology. Almost half of it is held in vaults to act as a store of value. [0] Regardless of what the percentages are, the price of gold is mostly determined by speculation. It varies wildly during periods of economic uncertainty. Arguably, not because there's more or less demand for its industrial use cases, but precisely for the reason I mentioned: a big part of its value derives from being perceived as a safe haven for storing wealth and as a hedge against inflation. Bitcoin positions itself as a direct competitor in that sense. Its main narrative in the past few years has been "digital gold" or "gold 2.0". It has some of the same properties of gold (scarce, difficult to produce) and some better ones (fast and easy to transfer, easily auditable, impossible to steal or confiscate). I don't think Bitcoin is suited to be used as a currency to i.e. buy coffee. But it doesn't have to do that in order to succeed. Stablecoins are a better tool for that use case. [0] https://www.statista.com/statistics/299609/gold-demand-by-industry-sector-share/ https://www.statista.com/statistics/299609/gold-demand-by-in...

Erlich_Bachman 6y ago

> This means that in order to have Bitcoin serve as the daily currency for all of Argentina's 50 million people would at least 50-tuple its energy consumption. That's not how Bitcoin or any PoW works. The amount of energy used is not a direct function of number of wallets. It is not either a direct function of number of transactions.

bildung 6y ago
The only intermediate step is the fact that the amount of currency in circulation needs to raise. As that isn't possible with bitcoin, the price has to rise. And that increases the incentive for throwing more recourses into mining.

RurouniK 6y ago

"This means that in order to have Bitcoin serve as the daily currency for all of Argentina's 50 million people would at least 50-tuple its energy consumption." This comment is beyond dumb and just showcases that you have no clue whatsoever about how bitcoin works. Bitcoin's power consumption doesn't go up when more people use it. It goes up when more people COMPETE for the production of the next block, meaning when there are more miners. Also more than 50% of bitcoin's power consumption already comes from renewable sources. Also youtube and online gaming need many times more power and I'd argue that a global, open, permissionless financial network is far more important.

bildung 6y ago
No, it isn't dumb. The monetary base currently provided by bitcoin is tiny. If an economy would switch to bitcoin as it's currency, the amount of BTC in circulation would need to gain multiple zeroes. As bitcoin has a fixed cap, that would mean the price would rise. And that, in consequence, would make mining way more profitable, with newcomers entering the field and established organizations to employ more resources. And that increases the power needed.
smartties 6y ago
> Also more than 50% of bitcoin's power consumption already comes from renewable sources. You are tweaking numbers here. The only source I've found, It says 39% and it's from a shady crypto website that make a living promoting cryptocurrencies [0]. And if you look deeper in the source [1] they quoted it says "A total of 280 entities from over 50 countries across various regions responded to the surveys.". So this study is based on surveys they sent to companies... Without anyway to verify their answer. This study has 0 value. Renewable energy is way more expensive and not reliable. https://cointelegraph.com/news/report-76-crypto-miners-use-renewables-as-part-of-their-energy-mix https://cointelegraph.com/news/report-76-crypto-miners-use-r... https://www.jbs.cam.ac.uk/faculty-research/centres/alternative-finance/publications/3rd-global-cryptoasset-benchmarking-study/ https://www.jbs.cam.ac.uk/faculty-research/centres/alternati...