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This seems like a pretty flawed idea and an attempt to justify the incredible amount of electricity required by bitcoin. If bitcoin was changed to require a fra

This seems like a pretty flawed idea and an attempt to justify the incredible amount of electricity required by bitcoin. If bitcoin was changed to require a fraction the amount of electricity all of these ideas would suddenly fall apart. Building renewable energy sources in the middle of nowhere to power a bitcoin farm is just completely nonsensical and does noting to help with the shift to renewables.

nickez 6y ago
If bitcoin would be fully powered by renewables, do you still think its energy consumption would be a problem?
- merlinscholz 6y ago
  Not the energy consumption in itself, but the amount of heat and physical electronic waste generated certainly is.
  - skohan 6y ago
    Yes it's not like solar panels are condensed out of the air with zero waste. They have to be manufactured, in a process which almost certainly isn't carbon neutral yet. The materials used to make them have to be extracted from somewhere. They're transported to the installation site on the back of diesel-burning trucks. Cleaner energy sources are a necessity, but simply reducing consumption will always have the best impact on sustainability.
- UncleMeat 6y ago
  Depends. Could those renewables go to other applications? If so, then using them for BTC means that somebody else must use carbon. If instead the renewables were located in places where it was not possible to move the energy to more useful locations or if the entire world ran on zero-emission power, then it'd be much less of a concern. I'm happy to let BTC win if it means that global warming is halted. But if worldwide net zero emissions is a prerequisite for BTC being considered non-wasteful then that's a tall order.
- betterunix2 6y ago
  Yes. Energy spent on Bitcoin is energy not spent on something else, even in a world where everything is powered by renewable energy. We do not live in a world where everything is renewable, and renewable energy spent on Bitcoin means whatever non-renewable power is being used elsewhere instead of being eliminated. It is also a myth that renewables have no negative environmental impact: metals have to be mined/smelted/etc., chemicals of various kinds are used, and there is waste from the manufacturing processes. Ideally we would be working towards more efficient technologies that use less energy to accomplish whatever task (and for the most part we have been doing that).
- dukeyukey 6y ago
  Yes, because those renewables could be powering people's homes and productive equipment, or powering conventional payment systems with plenty capacity left over. It's not necessarily a deal-breaker, but plenty of crypto exists that doesn't need this much power.
  - doomroot 6y ago
    Energy for the home and nearly every other electricity demanding enterprise easily outbids bitcoin miners. There’s a reason they have to go the there ridiculously remote places to set up operations.
- maxerickson 6y ago
  Proof of work will always be an expensive way to secure a ledger, with little in the way of real advantages. "Distributed" sounds nice, but it isn't really that valuable in the end.
  - noxer 6y ago
    PoW doesn't even lead to good distribution as we can see since a few years and more importantly its not needed. We have Federated Byzantine Agreement (FBA) "blockchians" since like 8 years and it beats PoW by any metric.
- plater 6y ago
  All energy generation is bad for the environment, just more or less bad. Solar cells and wind power might be "renewable", but it requires a lot of metals and material to build (and also energy), they disturb natural habitat etc. They are much better than coal, oil and gas, but they are not harmless. It's better to avoid using energy if possible than using renewable energy.
  - bingbong70 6y ago
    Cavemen used very little energy before the discovery of fire. Are you prescribing a return to that state? >>>Response to Dan added here due to rate limit. > waste power Infinite energy in the universe and everything mankind has achieved has been in large part due to energy consumption. The idea that we should now stop that trend is antihuman/antihuman-progress at its core. Let the individual/market decide the best uses for energy... not your money = not your choice. BTW off-planet mining using the sun/stars is a great idea for the future and doesn't require them to be blacked out.
    - danShumway 6y ago
      No of course not, that reading isn't any more accurate than it would be to say that you're arguing that we should set up a Dyson sphere around our sun to black out the earth and mine Bitcoin in the vast dead emptiness of space for all eternity[0]. Be careful not to inflate arguments into completely separate positions. What GP is saying is that switching to renewables doesn't make all of the negative externalities of wasting power go away. You shouldn't extrapolate out on that to some grand view of the world that says we should never use technology. It just means we shouldn't waste power, and we shouldn't use "solar" as an excuse to waste power. [0]: After all, Dyson spheres are powered by renewable energy.
      - bingbong70 6y ago
        > waste power > not a battery What's a better way to losslessly and securely store human labor/time for future use? Almost everything else (fiat, gold, silver, real estate, etc...) that exists is debased/debasable, deteriorates, or loses value. The above arguments completely hinge on energy being "wasted". Lossless labor/time storage isn't "waste" to market participants seeing a need for it and putting their hard earned money behind it. Bitcoin basically turns one of the hardest to counterfeit things in the universe, energy, into money. How else can you achieve lossless storage without a trustless secured environment (the bitcoin network)? Any multi-decade/multi-century solution that market participants should focus on instead?
delaaxe 6y ago
Bitcoin mining is good for the environment https://pomp.substack.com/p/bitcoin-mining-is-good-for-the-environment https://pomp.substack.com/p/bitcoin-mining-is-good-for-the-e...
- elaus 6y ago
  I can't really follow the logic in this article – maybe I don't get it? The article states that Bitcoin uses a lot of energy and as miners want to maximize profit, they want cheap energy. This is good for renewables as that is cheaper than other forms of energy generation. Doesn't everyone want cheap energy, like factories or heavy industry? Are Bitcoin miners really more eager to push for clean energy than other industries? The whole arguments sounds like "we need to use up more energy so there's more incentive to produce additional, clean energy".
  - Nursie 6y ago
    That’s exactly what it is - any energy demand, under this worldview, is good because it means more demand for clean energy. In a world that’s already struggling with this, it makes no sense at all.
  - hinkley 6y ago
    > Doesn't everyone want cheap energy, like factories or heavy industry? Are Bitcoin miners really more eager to push for clean energy than other industries? Yes. Given enough time, Bitcoin will gentrify the power grid.
- eganist 6y ago
  The post is making the free-market argument: > In reality, this couldn’t be further from the truth. Bitcoin is actually one of the greatest financial incentives to transition the world to clean energy. without bothering to explain why any one point they highlight would beget any one outcome claimed by the post. In fact, there are some backwards incentives that are missed. An example would be their claim with regards to Great American Mining: rather than using mining as an incentive to pay for capturing lost methane, what's to stop producers from diverting existing gas production towards mining right now, putting demand pressure on existing supplies and driving up gas production (and leaks, etc.) rather than just capturing and processing leaked gas? There's nothing. There's no incentive for existing gas facilities to fix their leaks when they can just pipe their existing output into bitcoin, drive up demand for gas, and therefore justify more drilling (and more inevitable leaks that they won't have any incentive to fix). > Bitcoin isn’t bad for the environment. In fact, Bitcoin is very, very good for the environment. The University of Cambridge reported at over 75% of miners use renewable energy and now there are solutions to turn methane emissions into mining as well. This doesn't mean anything. Or worse, it means 25% of a phantom industry makes use of dirty power, So whatever Bitcoin imposes on the world in power usage (130 Terawatt-hours of energy - https://techcrunch.com/2021/03/21/the-debate-about-cryptocurrency-and-energy-consumption/ https://techcrunch.com/2021/03/21/the-debate-about-cryptocur...), 25% of that, or about 0.15% of global power production, leverages dirty fuels. If all mining ceased tomorrow, we'd benefit substantially from dirty power usage coming down and more clean energy supply being directed back into productive work. Thanks for hearing my rant.
whoisstan 6y ago
It’s so totally misguided IMO that I feel like I am maybe not understanding that. It seems to inspired or in the spirit of ‘The Ministry for the Future’ by Kim Stanley Robinson. “ It’s called Carbon Coin in the book, a Bitcoin-like currency that the Ministry gives out for carbon sequestration — that is, any project that sucks CO2 out of the air, whether it’s carbon capture or farmers rewilding their fields — at a rate of one coin to one ton. Oil companies get coins if they stop being oil companies, basically, leaving their assets in the ground for a century or so. Coins can then be bought and sold on currency exchanges like any other.” The only argument I can see is that the sheer resource hunger will force our hand in using renewable energy. Of course, I am not saying this is a good argument at all. There is no such thing as virtual energy. And the other forms of payment we use are a million times more energy effective. What bothers me is that newsletters as this one who I believe are widely read serve this up as a good idea. https://www.exponentialview.co/p/ev-315 https://www.exponentialview.co/p/ev-315 %)
incrudible 6y ago
> Building renewable energy sources in the middle of nowhere to power a bitcoin farm is just completely nonsensical and does noting to help with the shift to renewables. Building renewable energy sources in the middle of nowhere to power nothing also appears nonsensical at first glance, yet it actually happens to the point that energy prices can go negative. For one, some forms of renewable energy are highly volatile and can not just be made to match demand under any circumstance. Hence there is a need for batteries to store this otherwise worthless energy. Today, these batteries just don't exist, wind farms are ideally backed up by gas plants, whose output can be regulated to even out wind volatility. In other cases, wind is backed up by coal or nuclear plants which can not be regulated as well, hence more of that wind energy goes to waste. Secondly, especially in the case of China, these renewable energy projects are meant to raise the domestic product and production capacity numbers, with little regard to actual demand. The electricity grid to deliver all that energy to actual consumers is an afterthought. In due time, these problems shall be solved. Better ways to store volatile renewable energy will emerge, better transmission infrastructure will arise. Bitcoin could be a stepping stone to solve the hen-egg part of that problem.
jgeerts 6y ago
> This seems like a pretty flawed idea and an attempt to justify the incredible amount of electricity required by bitcoin. It's not "required", it's only that high because it has so much success. Bitcoin would be working with only one miner running, the first blocks were minted on a private computer.
- noxer 6y ago
  Sorry but that's BS, It absolutely requires the energy. If it would be running on a privet computer still then anyone with such a computer could double spend which would make it useless regardless of success.
  - jgeerts 6y ago
    That’s not the point, I didn’t say that it would be a good idea. The point is that it would work with just 100 or a 1000 miners if no one has 51% of computing power, hence the computing power is a consequence of Bitcoin’s success.
    - noxer 6y ago
      But you are wrong, it would absolutely not work. The only way to make sure no one has 51% and no one can simply get 51% (buy cloud computing for example) is if the 51% is more than what feasibly can be bought or it would at least need to cost more than what you could gain from a double spend. Also its about hash power not number of miners, that's completely irrelevant. 100 or 1000 miners that means nothing.
- UncleMeat 6y ago
  It would work in the sense that you've be able to add more transactions to the chain. But it'd also be very easy for somebody to double spend.
Dzugaru 6y ago
This is an excellent take on why the Grossman's idea is plainly idiotic [0]. You don't get more bitcoin for more electricity, you just get more security. The system itself can reach a state when you need 51% of whole planet electricity and computation devices locked into it to be perfectly secure. Thats frankly scary. [0] https://elad-verbin.medium.com/bitcoin-is-not-a-battery-it-is-a-sink-852db9669f20 https://elad-verbin.medium.com/bitcoin-is-not-a-battery-it-i...
- PragmaticPulp 6y ago
  > You don't get more bitcoin for more electricity, you just get more security. Specifically, more security for the next block, only. Once that block is mined, the process starts all over again for the next block. The energy usage reset button is pressed as soon as each block is mined. No energy is "stored".
  - WrtCdEvrydy 6y ago
    Bitcoin itself is energy or can be converted into energy. If I can buy wood to burn for energy with Bitcoin, I am converting mined Bitcoin into energy.
    - bathtub365 6y ago
      If I have Bitcoin how do I convert it into energy to power something else?
      - danboarder 6y ago
        By purchasing electricity with Bitcoin.
        ForHackernews 6y ago
        By this logic, dollar bills make a much better "battery".
jasonlaramburu 6y ago
Bitcoin’s price is backed by the sunk cost of energy used to mine it. If any critical mass of miners began using cheap or free renewable energy, the price of BTC would fall precipitously. Miners have, in the past, resisted improvements to the network that would reduce their profits so this all seems pretty unlikely as well.
- mode80 6y ago
  This is false. Bitcoin’s value is “backed” by the expectation that it will be valuable tomorrow — nothing more. It’s the same with gold. Gold’s value has nothing to do with the cost of mining it out of the ground. Rather the cost of mining it is justified on the basis of its expected value.
  - jasonlaramburu 6y ago
    Its price certainly can appreciate for many reasons but that’s not my point. The price of BTC price is backstopped by the sunk cost of mining. Every time the price has fallen below the cost of production miners deactivate and the price stabilizes. If a miner’s opex goes to zero (due to cheap or free renewable energy) in the future there will be no incentive to stop mining during a crash and prices will go to $0.
    - deleted 6y ago
      [deleted]
    - toss1 6y ago
      Then it is not the sunk cost of the mining that drives it in your model, but the cost of new mining. (the sunk cost is mere history). Also, it is not clear that having more or fewer miners on the network drives prices - it seems more likely that more miners reduce transaction/confirmation times, improving service levels and increasing value (to the extent that actual transactions drive value or price).
      - jasonlaramburu 6y ago
dehrmann 6y ago
> If bitcoin was changed to require a fraction the amount of electricity all of these ideas would suddenly fall apart This is actually a weird game theory problem because there are a lot a miners with expensive hardware that would be worthless if such a change happened. You could fork it, but you'd have to attract miners after burning them (possible if commodity GPUs were viable, again), and you'd have to convince people that the new tokens are also valuable, and this isn't just Bitcoin Cash II. Bitcoin has odd, long-term systemic risks based around miners.

nickez 6y ago

If bitcoin would be fully powered by renewables, do you still think its energy consumption would be a problem?

merlinscholz 6y ago
Not the energy consumption in itself, but the amount of heat and physical electronic waste generated certainly is.
- skohan 6y ago
  Yes it's not like solar panels are condensed out of the air with zero waste. They have to be manufactured, in a process which almost certainly isn't carbon neutral yet. The materials used to make them have to be extracted from somewhere. They're transported to the installation site on the back of diesel-burning trucks. Cleaner energy sources are a necessity, but simply reducing consumption will always have the best impact on sustainability.
UncleMeat 6y ago
Depends. Could those renewables go to other applications? If so, then using them for BTC means that somebody else must use carbon. If instead the renewables were located in places where it was not possible to move the energy to more useful locations or if the entire world ran on zero-emission power, then it'd be much less of a concern. I'm happy to let BTC win if it means that global warming is halted. But if worldwide net zero emissions is a prerequisite for BTC being considered non-wasteful then that's a tall order.
betterunix2 6y ago
Yes. Energy spent on Bitcoin is energy not spent on something else, even in a world where everything is powered by renewable energy. We do not live in a world where everything is renewable, and renewable energy spent on Bitcoin means whatever non-renewable power is being used elsewhere instead of being eliminated. It is also a myth that renewables have no negative environmental impact: metals have to be mined/smelted/etc., chemicals of various kinds are used, and there is waste from the manufacturing processes. Ideally we would be working towards more efficient technologies that use less energy to accomplish whatever task (and for the most part we have been doing that).
dukeyukey 6y ago
Yes, because those renewables could be powering people's homes and productive equipment, or powering conventional payment systems with plenty capacity left over. It's not necessarily a deal-breaker, but plenty of crypto exists that doesn't need this much power.
- doomroot 6y ago
  Energy for the home and nearly every other electricity demanding enterprise easily outbids bitcoin miners. There’s a reason they have to go the there ridiculously remote places to set up operations.
maxerickson 6y ago
Proof of work will always be an expensive way to secure a ledger, with little in the way of real advantages. "Distributed" sounds nice, but it isn't really that valuable in the end.
- noxer 6y ago
  PoW doesn't even lead to good distribution as we can see since a few years and more importantly its not needed. We have Federated Byzantine Agreement (FBA) "blockchians" since like 8 years and it beats PoW by any metric.
plater 6y ago
All energy generation is bad for the environment, just more or less bad. Solar cells and wind power might be "renewable", but it requires a lot of metals and material to build (and also energy), they disturb natural habitat etc. They are much better than coal, oil and gas, but they are not harmless. It's better to avoid using energy if possible than using renewable energy.
- bingbong70 6y ago
  Cavemen used very little energy before the discovery of fire. Are you prescribing a return to that state? >>>Response to Dan added here due to rate limit. > waste power Infinite energy in the universe and everything mankind has achieved has been in large part due to energy consumption. The idea that we should now stop that trend is antihuman/antihuman-progress at its core. Let the individual/market decide the best uses for energy... not your money = not your choice. BTW off-planet mining using the sun/stars is a great idea for the future and doesn't require them to be blacked out.
  - danShumway 6y ago
    No of course not, that reading isn't any more accurate than it would be to say that you're arguing that we should set up a Dyson sphere around our sun to black out the earth and mine Bitcoin in the vast dead emptiness of space for all eternity[0]. Be careful not to inflate arguments into completely separate positions. What GP is saying is that switching to renewables doesn't make all of the negative externalities of wasting power go away. You shouldn't extrapolate out on that to some grand view of the world that says we should never use technology. It just means we shouldn't waste power, and we shouldn't use "solar" as an excuse to waste power. [0]: After all, Dyson spheres are powered by renewable energy.
    - bingbong70 6y ago
      > waste power > not a battery What's a better way to losslessly and securely store human labor/time for future use? Almost everything else (fiat, gold, silver, real estate, etc...) that exists is debased/debasable, deteriorates, or loses value. The above arguments completely hinge on energy being "wasted". Lossless labor/time storage isn't "waste" to market participants seeing a need for it and putting their hard earned money behind it. Bitcoin basically turns one of the hardest to counterfeit things in the universe, energy, into money. How else can you achieve lossless storage without a trustless secured environment (the bitcoin network)? Any multi-decade/multi-century solution that market participants should focus on instead?

delaaxe 6y ago

Bitcoin mining is good for the environment https://pomp.substack.com/p/bitcoin-mining-is-good-for-the-environment https://pomp.substack.com/p/bitcoin-mining-is-good-for-the-e...

elaus 6y ago
I can't really follow the logic in this article – maybe I don't get it? The article states that Bitcoin uses a lot of energy and as miners want to maximize profit, they want cheap energy. This is good for renewables as that is cheaper than other forms of energy generation. Doesn't everyone want cheap energy, like factories or heavy industry? Are Bitcoin miners really more eager to push for clean energy than other industries? The whole arguments sounds like "we need to use up more energy so there's more incentive to produce additional, clean energy".
- Nursie 6y ago
  That’s exactly what it is - any energy demand, under this worldview, is good because it means more demand for clean energy. In a world that’s already struggling with this, it makes no sense at all.
- hinkley 6y ago
  > Doesn't everyone want cheap energy, like factories or heavy industry? Are Bitcoin miners really more eager to push for clean energy than other industries? Yes. Given enough time, Bitcoin will gentrify the power grid.
eganist 6y ago
The post is making the free-market argument: > In reality, this couldn’t be further from the truth. Bitcoin is actually one of the greatest financial incentives to transition the world to clean energy. without bothering to explain why any one point they highlight would beget any one outcome claimed by the post. In fact, there are some backwards incentives that are missed. An example would be their claim with regards to Great American Mining: rather than using mining as an incentive to pay for capturing lost methane, what's to stop producers from diverting existing gas production towards mining right now, putting demand pressure on existing supplies and driving up gas production (and leaks, etc.) rather than just capturing and processing leaked gas? There's nothing. There's no incentive for existing gas facilities to fix their leaks when they can just pipe their existing output into bitcoin, drive up demand for gas, and therefore justify more drilling (and more inevitable leaks that they won't have any incentive to fix). > Bitcoin isn’t bad for the environment. In fact, Bitcoin is very, very good for the environment. The University of Cambridge reported at over 75% of miners use renewable energy and now there are solutions to turn methane emissions into mining as well. This doesn't mean anything. Or worse, it means 25% of a phantom industry makes use of dirty power, So whatever Bitcoin imposes on the world in power usage (130 Terawatt-hours of energy - https://techcrunch.com/2021/03/21/the-debate-about-cryptocurrency-and-energy-consumption/ https://techcrunch.com/2021/03/21/the-debate-about-cryptocur...), 25% of that, or about 0.15% of global power production, leverages dirty fuels. If all mining ceased tomorrow, we'd benefit substantially from dirty power usage coming down and more clean energy supply being directed back into productive work. Thanks for hearing my rant.

whoisstan 6y ago

It’s so totally misguided IMO that I feel like I am maybe not understanding that. It seems to inspired or in the spirit of ‘The Ministry for the Future’ by Kim Stanley Robinson. “ It’s called Carbon Coin in the book, a Bitcoin-like currency that the Ministry gives out for carbon sequestration — that is, any project that sucks CO2 out of the air, whether it’s carbon capture or farmers rewilding their fields — at a rate of one coin to one ton. Oil companies get coins if they stop being oil companies, basically, leaving their assets in the ground for a century or so. Coins can then be bought and sold on currency exchanges like any other.” The only argument I can see is that the sheer resource hunger will force our hand in using renewable energy. Of course, I am not saying this is a good argument at all. There is no such thing as virtual energy. And the other forms of payment we use are a million times more energy effective. What bothers me is that newsletters as this one who I believe are widely read serve this up as a good idea. https://www.exponentialview.co/p/ev-315 https://www.exponentialview.co/p/ev-315 %)

incrudible 6y ago

> Building renewable energy sources in the middle of nowhere to power a bitcoin farm is just completely nonsensical and does noting to help with the shift to renewables. Building renewable energy sources in the middle of nowhere to power nothing also appears nonsensical at first glance, yet it actually happens to the point that energy prices can go negative. For one, some forms of renewable energy are highly volatile and can not just be made to match demand under any circumstance. Hence there is a need for batteries to store this otherwise worthless energy. Today, these batteries just don't exist, wind farms are ideally backed up by gas plants, whose output can be regulated to even out wind volatility. In other cases, wind is backed up by coal or nuclear plants which can not be regulated as well, hence more of that wind energy goes to waste. Secondly, especially in the case of China, these renewable energy projects are meant to raise the domestic product and production capacity numbers, with little regard to actual demand. The electricity grid to deliver all that energy to actual consumers is an afterthought. In due time, these problems shall be solved. Better ways to store volatile renewable energy will emerge, better transmission infrastructure will arise. Bitcoin could be a stepping stone to solve the hen-egg part of that problem.

jgeerts 6y ago

> This seems like a pretty flawed idea and an attempt to justify the incredible amount of electricity required by bitcoin. It's not "required", it's only that high because it has so much success. Bitcoin would be working with only one miner running, the first blocks were minted on a private computer.

noxer 6y ago
Sorry but that's BS, It absolutely requires the energy. If it would be running on a privet computer still then anyone with such a computer could double spend which would make it useless regardless of success.
- jgeerts 6y ago
  That’s not the point, I didn’t say that it would be a good idea. The point is that it would work with just 100 or a 1000 miners if no one has 51% of computing power, hence the computing power is a consequence of Bitcoin’s success.
  - noxer 6y ago
    But you are wrong, it would absolutely not work. The only way to make sure no one has 51% and no one can simply get 51% (buy cloud computing for example) is if the 51% is more than what feasibly can be bought or it would at least need to cost more than what you could gain from a double spend. Also its about hash power not number of miners, that's completely irrelevant. 100 or 1000 miners that means nothing.
UncleMeat 6y ago
It would work in the sense that you've be able to add more transactions to the chain. But it'd also be very easy for somebody to double spend.

Dzugaru 6y ago

This is an excellent take on why the Grossman's idea is plainly idiotic [0]. You don't get more bitcoin for more electricity, you just get more security. The system itself can reach a state when you need 51% of whole planet electricity and computation devices locked into it to be perfectly secure. Thats frankly scary. [0] https://elad-verbin.medium.com/bitcoin-is-not-a-battery-it-is-a-sink-852db9669f20 https://elad-verbin.medium.com/bitcoin-is-not-a-battery-it-i...

PragmaticPulp 6y ago
> You don't get more bitcoin for more electricity, you just get more security. Specifically, more security for the next block, only. Once that block is mined, the process starts all over again for the next block. The energy usage reset button is pressed as soon as each block is mined. No energy is "stored".
- WrtCdEvrydy 6y ago
  Bitcoin itself is energy or can be converted into energy. If I can buy wood to burn for energy with Bitcoin, I am converting mined Bitcoin into energy.
  - bathtub365 6y ago
    If I have Bitcoin how do I convert it into energy to power something else?
    - danboarder 6y ago
      By purchasing electricity with Bitcoin.
      - ForHackernews 6y ago
        By this logic, dollar bills make a much better "battery".

jasonlaramburu 6y ago

Bitcoin’s price is backed by the sunk cost of energy used to mine it. If any critical mass of miners began using cheap or free renewable energy, the price of BTC would fall precipitously. Miners have, in the past, resisted improvements to the network that would reduce their profits so this all seems pretty unlikely as well.

mode80 6y ago
This is false. Bitcoin’s value is “backed” by the expectation that it will be valuable tomorrow — nothing more. It’s the same with gold. Gold’s value has nothing to do with the cost of mining it out of the ground. Rather the cost of mining it is justified on the basis of its expected value.
- jasonlaramburu 6y ago
  Its price certainly can appreciate for many reasons but that’s not my point. The price of BTC price is backstopped by the sunk cost of mining. Every time the price has fallen below the cost of production miners deactivate and the price stabilizes. If a miner’s opex goes to zero (due to cheap or free renewable energy) in the future there will be no incentive to stop mining during a crash and prices will go to $0.
  - deleted 6y ago
    [deleted]
  - toss1 6y ago
    Then it is not the sunk cost of the mining that drives it in your model, but the cost of new mining. (the sunk cost is mere history). Also, it is not clear that having more or fewer miners on the network drives prices - it seems more likely that more miners reduce transaction/confirmation times, improving service levels and increasing value (to the extent that actual transactions drive value or price).
    - jasonlaramburu 6y ago

dehrmann 6y ago

> If bitcoin was changed to require a fraction the amount of electricity all of these ideas would suddenly fall apart This is actually a weird game theory problem because there are a lot a miners with expensive hardware that would be worthless if such a change happened. You could fork it, but you'd have to attract miners after burning them (possible if commodity GPUs were viable, again), and you'd have to convince people that the new tokens are also valuable, and this isn't just Bitcoin Cash II. Bitcoin has odd, long-term systemic risks based around miners.