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GP claimed that generating dollars using electricity is bad. Isn't that what the majority of companies are doing? Edit: that's my whole point: mining BTC is ge
by rcstank 6y ago
GP claimed that generating dollars using electricity is bad. Isn't that what the majority of companies are doing?
Edit: that's my whole point: mining BTC is generating value by verifying transactions. In turn, the miner gets paid for their work.
- airstrike 6y agoCompanies are generating value, not dollars.
- Closi 6y agoNo, companies do not create new money. They create goods and services in order to generate value/profit.
- jld 6y agoBanks are companies and their service is to create new money.
- Closi 6y agoBanks that are for-profit companies add to the money supply (via loans) but don't 'create new money' in the same sense as mining Bitcoin. Mining bitcoin is most similar to a central bank printing/issuing money (except it's issued to the person that can waste the most electricity or show proof of stake rather than being issued selectively by the central government). Banks can add to the money supply by lending out money which has been saved in them by others, but there is nothing unique to fiat currencies about this, and the same can be done with Bitcoin or other crypto. I suspect you wouldn't say that 'banks can create new bitcoins without mining', but that's the same thing as saying 'banks can create new money without printing it'.
- sudosysgen 6y agoCompanies generate dollars by first generating things that some people find useful. Just generating dollars by themselves should be done with the smallest possible amount of electricity.
- shawnz 6y agoBitcoin's energy usage is proportional to its market value so you might say it always uses the smallest possible amount of energy (given the current valuation). We have yet to see if alternative systems like proof-of-stake can gain the same trust and replace proof-of-work while actually consuming less energy in practice. I'm hopeful though.
- sudosysgen 6y agoCreating currency by itself does not create any value.
- shawnz 6y agoRight, the creation of Bitcoins only redistributes the value. The value mining provides is actually in outcompeting potential attackers who might want to change the consensus of the network.
- bluescrn 6y agoOr they generate dollars by trading and speculating but not actually creating anything. How much power is used worldwide by stock trading, HFT, etc?
- sudosysgen 6y agoI agree that this is an issue, but I don't think that's anywhere near what Bitcoin uses.
- cortesoft 6y agoNo, creating new dollars is just updating a database at the fed, basically. There are no companies that generate dollars. That would be counterfeiting.
- jki275 6y agoThe fed certainly generates new dollars.
- Matticus_Rex 6y ago> There are no companies that generate dollars Other than banks. Banks generate new dollars through fractional reserve lending, though they also destroy them.
- AaronFriel 6y agoBitcoin consumers more power than entire nations' economies while generating so little value that I suspect my home town in Iowa would exceed the transaction rate on a daily basis. A moderately busy food district in a major city would exceed that every day. (I'm thinking roughly 100,000 people getting lunch or dinner in 1 hour ought to generate 13 to 27 times as many transactions/second as the entire Bitcoin network supports.) Sure, there's bitcoin cash, lightning network stuff - but uhh, where's the beef? I mean, seriously, where are the users using Bitcoin at volume? It seems like Bitcoin is a Ponzi scheme for people mining (or HODLing) Bitcoin, not a store of value, not a mechanism of currency.
- lallysingh 6y agoThey're moving money out of their countries past currency export controls.
- shawnz 6y agoTransaction rate is not the only possible way to judge the value a monetary system. Also: Bitcoin's maximum possible transaction rate could be arbitrarily scaled up without impacting the electricity usage at all (but it would have other trade-offs not related to energy usage, which has made it hard to establish a consensus on the issue).
- vkou 6y agoTransaction rate is the only possible way to judge the value of a monetary system. A system where you essentially can't transact is economically dead. The health of an economy is measured by how quickly money flows in it, not in how wealthy a dragon sitting on a pile of gold can get. It can be a speculative system, but that's far less useful than being a monetary system. Bitcoin is a terrible currency in the same way that houses, or diamond rings are a terrible currency. Settling transactions in them is slow and incredibly expensive.
- shawnz 6y agoNot true. For example a monetary system might be valuable because it supports high transaction volumes even at a low rate, or because it has high costs to attack. > The health of an economy is measured by how quickly money flows in it Bitcoin isn't an economy. It is just a small part of the overall economy
- X6S1x6Okd1st 6y agoIt's unclear how much value is being created by Bitcoin vs how much is being captured/transferred from elsewhere. Plenty of reasonable people likely think that Bitcoin doesn't create any value.