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Bitcoin is getting an unfair treatment here on HN. The mining of Bitcoin uses as much resources as people are willing to pay for the resulting coins. The same
by ArtTimeInvestor 6y ago
Bitcoin is getting an unfair treatment here on HN.
The mining of Bitcoin uses as much resources as people are willing to pay for the resulting coins.
The same holds true for gold.
3000 tons of gold are mined per year. Which is worth about $150B. So the mining probably uses resources of about $150B as well.
The value of bitcoins mined per year is $15B.
So Gold mining probably uses about 10x as much resources as Bitcoin mining.
- numbsafari 6y agoOnce mined, gold is gold and we can just hand it to each other, or exchange notes of ownership on a very efficient ledger. Bitcoin requires a constant supply of electricity to maintain its utility. Without electricity, Bitcoin would collapse. Gold’s utility as a medium of exchange and a store of value is secure in a crisis, bitcoin’s is not.
- moralsupply 6y agoFeel free to keep all your wealth allocated in gold. We'll talk again in 5 years time.
- rpadovani 6y agoWill gold lose its value in the next 5 years?
- CalChris 6y agoGold is a useful metal over and and above its currency value. Bitcoin is not useful except as a currency.
- moralsupply 6y agoExcept that most gold being traded under the "store of value" premise doesn't exist, it's "paper gold". Also, gold is the one most manipulated market in the world, having both banks, central banks and governments actively interfering in its price discovery.
- ArtTimeInvestor 6y agoThere is no set amount of electricity needed to move Bitcoin. The exchange of Bitcoin costs just as much as people are willing to pay for it. That amount can go arbitrarily low.
- bitcharmer 6y ago> There is no set amount of electricity needed to move Bitcoin. This is simply untrue. We're not talking about simply moving your wallet on a pendrive. In this context moving bitcoin means changing ownership and this simply cannot happen without electricity.
- ArtTimeInvestor 6y agoOnly as much energy as people are willing to pay for.
- JeremyBanks 6y agoSure, but that becomes problematic when your proof-of-work security level depends on that. It's inherently fucked.
- numbsafari 6y agoPerhaps to clarify, by “constant supply of electricity”, I did not mean a supply that is fixed in either price or amount, simply that it is necessarily greater than zero, which is definitely more than is required to exchange gold, which was done quite successfully long before we understood how to harness or generate electricity.
- oconnor663 6y ago> Without electricity, Bitcoin would collapse. I'm curious about this: What portion of the electricity used for mining is needed to prevent the collapse of bitcoin? My understanding is that the answer looks something like "however much is required to make a 51% attack impractical." If that's right, how should we go about estimating it? Should we understand "practical" to mean "profitable", or should we be thinking more about unprofitable, terroristical attacks?
- fredfoobar 6y agoYou need to transport and secure gold between transacting parties, you will need to audit the gold coin/bar/jewelry for purity (you aren't going to blindly trust people are you?)
- bombcar 6y agoYou can only be sure about an upper bound on gold mining (they’d likely not continue mining if it was at a loss).
- wildrhythms 6y agoThe author is arguing that bitcoin mining does not produce a marginal asset in return for the energy used to mine it. Do you think your gold mining analogy fits this?
- ArtTimeInvestor 6y agoI don't agree with him on this. 50% of gold is used as an asset to store value. This half is just a more cumbersome store of value than Bitcoin. It costs more money to store and move gold than to store and move Bitcoin.
- SanFranManDan 6y ago> It costs more money to store That might not be true if you consider that it is dramatically easier to lose $1b of bitcoin by forgetting the key, but there is almost no way you could lose $1b of gold by forgetting the combination or losing the key to the safe. And if you stored bitcoin for 20 years on a key without moving it, would you really be that confident that after 20years you would still have access to it? That the media you used to store the key on didn’t degrade? That you have the correct password. I can be extremely certain that the gold bars I have now will be exchangeable in the future. With bitcoin when storing money, there is a much bigger risk of it going to zero when you are storing it.
- ArtTimeInvestor 6y agoDifferent assets have different threats. You mention keeping gold in a safe. The first question to assess the safety of that gold would be where that safe is.
- isoprophlex 6y agoThe function that Bitcoin serves can be fulfilled by other systems that don't use energy inefficient POW. It is incredibly clear. Millions of kWhs go in, hashes are computed, a couple of bits of information are stored. Nevertheless BTC holders go to extraordinary lengths to justify the status quo. Bitcoin gets exactly the treatment it deserves.
- cjbenedikt 6y agoLots of discussions around gold as a means to store value. Little about its industrial use. Using Bitcoin that way may pose a challenge.
- cjbenedikt 6y agohttps://www.mecmining.com.au/top-5-uses-of-gold-one-of-the-worlds-most-coveted-metals/ https://www.mecmining.com.au/top-5-uses-of-gold-one-of-the-w...
- iso1210 6y agoSo the vast majority is for aesthetic reasons, and industrial reasons are a tiny amount.
- choward 6y agoI still don't get why people keep using gold mining to defend Bitcoin. Society realized it was artificially slowing down the economy to constrain the money supply arbitrarily. We've been off the gold standard for decades. Nobody uses gold as money anymore.
- p_l 6y agoBecause bitcoin is product of goldbugs' fevered imagination where somehow the gold standard a) existed for much longer than in reality b) was much more successful.
- LAMike 6y agoHN/SV in general can't wrap their minds around Bitcoin, because it's the opposite of everything they stand for. Bitcoin doesn't "move fast and break things"... it just keeps chugging along every 10 minutes adding new blocks and ignoring the naysayers crying about the energy usage. If they were really concerned, they would stop taking flights across the country to talk about their useless startup at a conference nobody wants to be at. Instead they try to police the world's energy, and don't realize Bitcoin will drive unsubsidized renewable energy faster than any government program.