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Bitcoin mining has been suggested as the solution for incentivizing the effort without massive government subsidies. It might be economically impossible to fund
by Geee 5y ago
Bitcoin mining has been suggested as the solution for incentivizing the effort without massive government subsidies. It might be economically impossible to fund the effort if there is not enough electricity demand in the local area, resulting in huge costs without returns. I.e. Bitcoin mining could be more profitable than selling electricity to local network, and make the whole effort actually profitable.
- pphysch 5y agoPutting the energy output of this highly expensive engineering project to waste unscrambling numbers is certainly not a way to make it economical.
- Geee 5y agoThe heat is waste. The problem is how to make profit from it to finance the project, not to make moral judgements about the use of electricity. You could build energy-intensive data centers too, if that makes you feel better.
- pphysch 5y agoIt's not a moral judgment, it's an economical judgement. Mining bitcoins costs lots of economic value (energy, hardware, personnel) and produces virtually none. It's extremely uneconomical in the purest sense of the term.
- Geee 5y agoMining produces blocks, and miners are rewarded with bitcoin, which have a certain positive value because people want to buy them. The operation generates more value than it consumes, and therefore it is economical.
- rbanffy 5y agoIt relies on the existence of the proverbial bigger fool down the chain.
- voldacar 5y agoI bet any argument you could give for that statement could be equally applied to dollars. Bitcoin is valued because it functions as an [imperfect] form of money. People value it (aka are willing to exchange their dollars for it) because it lets them transact with other people in a way that is, barring massive computational power, immutable and uncensorable, and because it was the first system to do this and therefore has the longest history of transactions. There are plenty of valid criticisms of bitcoin, but it would be idiotic to deny that a currency which functions in this way would be valueless or not in demand. Some people are certainly fools, but nobody has to be a fool in order to explain a world in which bitcoin commands a high price.
- rbanffy 5y ago> could be equally applied to dollars. It could, but it'd be wrong. What would happen if nobody wanted to buy or receive BTC tomorrow? Some people would be very angry. Now imagine what would happen if the dollar ceased to have any value? Unimaginable, isn't it? Economies would collapse, the whole world would be in disarray.
- Geee 5y agoEconomies wouldn't collapse because people can switch to bitcoin. In free markets, people always try to switch to a stronger currency, when their own currency loses value. Bitcoin is volatile, but it's still better than a currency that loses value in long term. Recently, the president of Turkey said that they are in war with Bitcoin. This is exactly what happens when cronies manipulate money supply for their own benefit, but they can't do anything to stop people from choosing a better currency. Cronies get demonetized and finally they lose power. Same thing is happening in Africa in many countries.
- 5y ago
- voldacar 5y agoEconomic value is not an objective phenomenon. It isn't like mass or energy or charge or fluid flow. It follows no conservation laws. It's a subjective, often ephemeral phenomenon that emerges from the interactions of buyers and sellers. When I say "x has value y" all I'm saying is that in current market conditions, some human would be willing to sell x at price y and another human would be willing to buy x at price y. So your statement that bitcoin mining is bad because it "costs value" and doesn't "produce value" is not really meaningful. And even if it were, the simple fact is that bitcoin mining is often profitable, depending on the cost of watts and ASICs.
- pphysch 5y agoEconomic value is rooted in both perceived and real, non-negotiable needs (water, shelter, food, etc). Economic idealists tend to skip over the latter, probably because they have never faced poverty. Rather than unscrambling numbers in pursuit of a diseased fantasy, compute could be put to work solving complex allocation problems, simulations, training, etc. to advance economic efficiency. For food production & distribution, water management, natural disaster mitigation, housing allocation, etc.
- Geee 5y agoGood money is a prerequisite for a functioning economy. The majority of world's countries don't have access to good money, and that's why Bitcoin is really important. It really does provide water, shelter and food to these people.
- pphysch 5y agoFalse. Money, i.e. markets, are a particular method of allocating resources. Useful for some aspects of economics, but not others. Economics is not built on finance. Finance is built on economics.
- Geee 5y agoOk, so you're a communist. Good luck trying to decrease poverty with communism.
- fallingfrog 5y agoUgh, we probably deserve to be blown up, don’t we