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People can use ANYTHING to transact. Seashells? Specs of rare metals? Pieces of paper with signatures? Bags of cocoa leaves? Bits in a computer database owned b

People can use ANYTHING to transact. Seashells? Specs of rare metals? Pieces of paper with signatures? Bags of cocoa leaves? Bits in a computer database owned by a trusted party? Bitcoin does not provide value, it is just one of possible alternative to use to make transacting easier. Unfortunately, bitcoin also burns energy at a rate of small country which is quite unnecessary but will make every person poorer (if only for making our environment worse).

fastball 6y ago
Yes, and if actually used, those things have value too. You might want to look into how much our existing banking systems consumes in terms of total energy. It might shock you. Bitcoin mostly only contends with two costs – energy (computing hashes) and resources (making mining rigs). Meanwhile, traditional banking systems have crazy high energy and resource costs from: building physical banks, vaults, armored cards, paper money, coins, bank clouds, stock market clouds, cheques, payment networks (Visa / MasterCard)... the list goes on. Additionally, classical banking has incredibly high human capital costs – think of all the innumerous people involved in just maintaining a system of trust compared with the near-zero human capital cost of the Bitcoin network.
- lmilcin 6y ago
  > You might want to look into how much our existing banking systems consumes in terms of total energy. It might shock you. Actually working for a bank, I can tell you that banks do a lot more than just keep your money. If you are not convinced try to move your entire financial life to bitcoin and tell me how you get cash, how you pay for fuel at gas station or pay your taxes. Does bitcoin have inherently web application for you to log in and manage your account? Does it have a call center for you to call to block your credit card? What about a host of other services banks provide you just conveniently omitted?
  - fastball 6y ago
    That's the whole point – most of those things aren't needed for cryptocurrency because cryptocurrency is trustless. You pay for gas in the same currency you get paid in – crypto. There is nobody to call to cancel my credit card because some 3rd party does not control my credit card – I do. Ditto for "managing my account". If I want to convert ETH to BAT or whatever, I just authenticate (using the same wallet as used above) to a thin wrapper around the network and everything happens on the Ethereum network itself. Meanwhile, if I want to convert USD to GBP, the layers below whatever service I actually use (let's say TransferWise) as the consumer is deeply nested, probably involving somewhere between 5 - 10 different entities.
colechristensen 6y ago
I think you're struggling with the meaning of "provide value". What exactly do you mean when you say something does not provide value? I mean that it is accomplishing a task which has utility to some person.
- lmilcin 6y ago
  I think you might be the one struggling with it. Calculating value (and its possible future) is actually my job description (I work on risk systems for one of the largest banks in the world). If something "provides value" it means it generates net benefit after inclusion of various costs and risks. If we take "provides value for humanity" it means bitcoin would have to make net benefit for humanity. But that is not the case. Almost all people have other as convenient ways to transact money. So we only have actually very small minority of people who see the actual benefit. These are mostly people who use bitcoin not to transact but rather to speculate on it -- they don't benefit on it because it makes transacting easier, it is just a pure game on whether the value of bitcoin is going to go up or down. Another class of people for whom bitcoin creates value are the ones with access to capital, cheap energy and silicon to play the game of burning money for bitcoin. Everybody else (ie. almost all people in the world) is left with no benefits and a disadvantage of worsening environment. The energy must be produced somewhere. Even if the particular MWh for mining was produced from renewable sources, it could have been used to offset some non-renewable MWh, but now is lost to the space. The capacity to produce energy is being wasted. Even if humanity produces 100% energy from renewable resources we are still long way to repairing our environment and that energy could have been used to maybe sequester some CO2. "Normal" coin on normal account does not require so much energy to be burned.
  - colechristensen 6y ago
    Ah, there we are, we don't disagree. You are talking about net value and I am talking about absolute value which are of course very different.
    - lmilcin 6y ago
literallycancer 6y ago
Have you ever tried to buy a car with seashells? Or take them along for the vacation?
- lmilcin 6y ago
  No, but I successfully bought a car with couple of magnetic disturbances on a disk at my bank and another time, with a stack of pieces of paper with fancy signature. That these things have any value attached to them is only due to people agreeing to it and believing it. Which makes them no different from seashells. While seashells would be a lot less practical in todays world they have been used in the past.
  - fastball 6y ago
    Yes, exactly, and the systems built around that process of signing documents and having settlement through a bank I can guarantee used more energy (human/electricity/resources) than a single Bitcoin transaction would've.
    - rspeele 6y ago
      Are you comparing the cost of the entire banking system's existence, to the cost of a single Bitcoin transaction? That seems like a pointless comparison. Or are you dividing the cost of that banking system by the number of transactions it processes? I.e. comparing 1 transaction to 1 transaction? On a per-transaction basis traditional banking uses a lot less energy than Bitcoin. Including the cost to run the bank's servers, the air conditioning in their buildings, the Christmas lights their employees put up, and everything. How can I make such a bold claim? How could I possibly have calculated the energy usage of all those things? Simple. Bitcoin does about 8.5 TPS which works out to around 268 million transactions per year. Bitcoin uses 0.55% of the world's energy production per cbeci.org. The ACH network (US direct deposit system) processes around 23 billion transactions per year. The European SEPA network does about 22 billion. The UK's BACS accounts for another 8 billion or so. So just counting those 3, that's 53bn transactions per year, which is 197x what Bitcoin does. If their energy cost per transaction was as bad as Bitcoin's, then that would take 0.55 * 197 = 108.35% of the world's energy production. There literally isn't enough energy in the world for the banks to be as inefficient as Bitcoin. And we're only handling direct bank debit/credits in the US and Europe so far, we haven't even touched on credit card stuff, international wires, anything in Asia, etc.

fastball 6y ago

Yes, and if actually used, those things have value too. You might want to look into how much our existing banking systems consumes in terms of total energy. It might shock you. Bitcoin mostly only contends with two costs – energy (computing hashes) and resources (making mining rigs). Meanwhile, traditional banking systems have crazy high energy and resource costs from: building physical banks, vaults, armored cards, paper money, coins, bank clouds, stock market clouds, cheques, payment networks (Visa / MasterCard)... the list goes on. Additionally, classical banking has incredibly high human capital costs – think of all the innumerous people involved in just maintaining a system of trust compared with the near-zero human capital cost of the Bitcoin network.

lmilcin 6y ago
> You might want to look into how much our existing banking systems consumes in terms of total energy. It might shock you. Actually working for a bank, I can tell you that banks do a lot more than just keep your money. If you are not convinced try to move your entire financial life to bitcoin and tell me how you get cash, how you pay for fuel at gas station or pay your taxes. Does bitcoin have inherently web application for you to log in and manage your account? Does it have a call center for you to call to block your credit card? What about a host of other services banks provide you just conveniently omitted?
- fastball 6y ago
  That's the whole point – most of those things aren't needed for cryptocurrency because cryptocurrency is trustless. You pay for gas in the same currency you get paid in – crypto. There is nobody to call to cancel my credit card because some 3rd party does not control my credit card – I do. Ditto for "managing my account". If I want to convert ETH to BAT or whatever, I just authenticate (using the same wallet as used above) to a thin wrapper around the network and everything happens on the Ethereum network itself. Meanwhile, if I want to convert USD to GBP, the layers below whatever service I actually use (let's say TransferWise) as the consumer is deeply nested, probably involving somewhere between 5 - 10 different entities.

colechristensen 6y ago

I think you're struggling with the meaning of "provide value". What exactly do you mean when you say something does not provide value? I mean that it is accomplishing a task which has utility to some person.

lmilcin 6y ago
I think you might be the one struggling with it. Calculating value (and its possible future) is actually my job description (I work on risk systems for one of the largest banks in the world). If something "provides value" it means it generates net benefit after inclusion of various costs and risks. If we take "provides value for humanity" it means bitcoin would have to make net benefit for humanity. But that is not the case. Almost all people have other as convenient ways to transact money. So we only have actually very small minority of people who see the actual benefit. These are mostly people who use bitcoin not to transact but rather to speculate on it -- they don't benefit on it because it makes transacting easier, it is just a pure game on whether the value of bitcoin is going to go up or down. Another class of people for whom bitcoin creates value are the ones with access to capital, cheap energy and silicon to play the game of burning money for bitcoin. Everybody else (ie. almost all people in the world) is left with no benefits and a disadvantage of worsening environment. The energy must be produced somewhere. Even if the particular MWh for mining was produced from renewable sources, it could have been used to offset some non-renewable MWh, but now is lost to the space. The capacity to produce energy is being wasted. Even if humanity produces 100% energy from renewable resources we are still long way to repairing our environment and that energy could have been used to maybe sequester some CO2. "Normal" coin on normal account does not require so much energy to be burned.
- colechristensen 6y ago
  Ah, there we are, we don't disagree. You are talking about net value and I am talking about absolute value which are of course very different.
  - lmilcin 6y ago

literallycancer 6y ago

Have you ever tried to buy a car with seashells? Or take them along for the vacation?

lmilcin 6y ago
No, but I successfully bought a car with couple of magnetic disturbances on a disk at my bank and another time, with a stack of pieces of paper with fancy signature. That these things have any value attached to them is only due to people agreeing to it and believing it. Which makes them no different from seashells. While seashells would be a lot less practical in todays world they have been used in the past.
- fastball 6y ago
  Yes, exactly, and the systems built around that process of signing documents and having settlement through a bank I can guarantee used more energy (human/electricity/resources) than a single Bitcoin transaction would've.
  - rspeele 6y ago
    Are you comparing the cost of the entire banking system's existence, to the cost of a single Bitcoin transaction? That seems like a pointless comparison. Or are you dividing the cost of that banking system by the number of transactions it processes? I.e. comparing 1 transaction to 1 transaction? On a per-transaction basis traditional banking uses a lot less energy than Bitcoin. Including the cost to run the bank's servers, the air conditioning in their buildings, the Christmas lights their employees put up, and everything. How can I make such a bold claim? How could I possibly have calculated the energy usage of all those things? Simple. Bitcoin does about 8.5 TPS which works out to around 268 million transactions per year. Bitcoin uses 0.55% of the world's energy production per cbeci.org. The ACH network (US direct deposit system) processes around 23 billion transactions per year. The European SEPA network does about 22 billion. The UK's BACS accounts for another 8 billion or so. So just counting those 3, that's 53bn transactions per year, which is 197x what Bitcoin does. If their energy cost per transaction was as bad as Bitcoin's, then that would take 0.55 * 197 = 108.35% of the world's energy production. There literally isn't enough energy in the world for the banks to be as inefficient as Bitcoin. And we're only handling direct bank debit/credits in the US and Europe so far, we haven't even touched on credit card stuff, international wires, anything in Asia, etc.