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> You can say this about anything that uses lots of electricity Sure, but it's especially important to say here because proof-of-work cryptocurrencies are nove

> You can say this about anything that uses lots of electricity Sure, but it's especially important to say here because proof-of-work cryptocurrencies are novel, popular, and consume orders of magnitude more electricity per transaction than more common transaction processing systems.

cwkoss 5y ago
Quantifying the energy per transaction of fiat is hard. Yes, changing a number in a centralized database is cheap, but the cost of maintaining trust in that centralized database is immense and has far-reaching tentacles. Ex. How much of the energy budget of the US military should be included in the cost of a dollar denominated transaction?
- wpietri 5y ago
  Answer: it doesn't matter. If a relatively small number of people (say, 10m) stop using the US dollar, its military isn't going away. But if the same number of people stop using POW "currencies", the energy impact could drop drastically. And if we were charging for underlying infrastructure costs, then Bitcoin would have to put in its share. Unlike paper/specie currencies, Bitcoin is entirely dependent on a functioning global internet. There are an awful lot of long-tail scenarios under which Bitcoin becomes effectively useless and therefore valueless.
  - cwkoss 5y ago
    > If a relatively small number of people (say, 10m) stop using the US dollar, This is a very weak straw man. The majority of people on the planet interact with the dollar economy, either directly or indirectly, because of its extreme dominance. Of course a ~0.3% reduction in users isn't going to change much. Dollar hegemony is fairly binary: either it's the dominant world currency or it isn't. If hegemony falls, the US military will have to reduce in size, because it can no longer be funded by being the gatekeeper of the global economy.
    - wpietri 5y ago
      Interesting speculation, but all wildly off the point. Which is that ending POW "currencies" would have a significant environmental benefit with an amount of inconvenience somewhere between marginal and net negative.
      - cwkoss 5y ago
        It would not be a "significant environmental benefit". POW mining is ~0.5% of global energy usage. If it was magically eliminated, that 'progress' would be eliminated in a year as growth in the more urgently-relevant sectors continues marching on. It seems you don't see the value of POW cryptocurrencies at all. The attitude that "bitcoin is worthless, so any energy spent on it is wasteful" has been parroted a lot on HN recently, but... scoreboard: the market disagrees. I wish more bitcoin skeptics kept some intellectual curiosity around it rather than just writing it off as "I don't get it: its worthless" - there are reasons people are paying tens of thousands of dollars for a bitcoin, even if you don't understand them. I think these attitudes are indicative of cognitive dissonance in individuals who dismissed Bitcoin a long time ago and don't want to recognize their own regret for discounting it: if they didn't dismiss it their net worth would probably be higher today.
        wpietri 5y ago
        Redirecting 0.5% of global energy to productive use is very clearly significant. That's the whole-country level of energy usage. Markets also value Ponzi schemes highly. So what? Markets can be a useful guide to value in certain circumstances, but it's correlative, not probative. I've had plenty of intellectual curiosity around Bitcoin, blockchains, etc. For a while I was hoping something good would come out of it. But it's been 10 years and there's been almost no economically positive use demonstrated. It's great for certain kinds of light financial crime (ransomware, money laundering, etc) and it's great for creating the sort of unregulated markets in which scammers, fraudsters, and other economic parasites thrive. I'm personally very happy never to have put a nickel into cryptocurrencies. Could I have made a bunch of money? Maybe! Would have it been through creating value? No, not at all. It's a "greater fool" game, and I don't play those. I haven't since I quit working for financial traders in the 1990s, as I don't think it's moral to get paid when no value is created.
jkhdigital 5y ago
Bitcoin is a hard currency first; it includes a mechanism for transactions because that is a hard requirement for anything that functions as a currency but the network is optimized for security not throughput. If my only problem is paying people and getting paid, then Visa/ACH works just fine. If my problem is lack of confidence in my nation’s money supply (and this is a very real problem in quite a few countries) then Bitcoin is unquestionably the most convenient alternative.
- wpietri 5y ago
  I don't buy it. Bitcoin has much higher volatility than other currencies and much higher costs to use it. If your problem is lack of confidence in your nation's money supply, you're better off getting some more stable currency, like any one of these: https://fxssi.com/top-10-world-most-stable-currencies https://fxssi.com/top-10-world-most-stable-currencies

cwkoss 5y ago

Quantifying the energy per transaction of fiat is hard. Yes, changing a number in a centralized database is cheap, but the cost of maintaining trust in that centralized database is immense and has far-reaching tentacles. Ex. How much of the energy budget of the US military should be included in the cost of a dollar denominated transaction?

wpietri 5y ago
Answer: it doesn't matter. If a relatively small number of people (say, 10m) stop using the US dollar, its military isn't going away. But if the same number of people stop using POW "currencies", the energy impact could drop drastically. And if we were charging for underlying infrastructure costs, then Bitcoin would have to put in its share. Unlike paper/specie currencies, Bitcoin is entirely dependent on a functioning global internet. There are an awful lot of long-tail scenarios under which Bitcoin becomes effectively useless and therefore valueless.
- cwkoss 5y ago
  > If a relatively small number of people (say, 10m) stop using the US dollar, This is a very weak straw man. The majority of people on the planet interact with the dollar economy, either directly or indirectly, because of its extreme dominance. Of course a ~0.3% reduction in users isn't going to change much. Dollar hegemony is fairly binary: either it's the dominant world currency or it isn't. If hegemony falls, the US military will have to reduce in size, because it can no longer be funded by being the gatekeeper of the global economy.
  - wpietri 5y ago
    Interesting speculation, but all wildly off the point. Which is that ending POW "currencies" would have a significant environmental benefit with an amount of inconvenience somewhere between marginal and net negative.
    - cwkoss 5y ago
      It would not be a "significant environmental benefit". POW mining is ~0.5% of global energy usage. If it was magically eliminated, that 'progress' would be eliminated in a year as growth in the more urgently-relevant sectors continues marching on. It seems you don't see the value of POW cryptocurrencies at all. The attitude that "bitcoin is worthless, so any energy spent on it is wasteful" has been parroted a lot on HN recently, but... scoreboard: the market disagrees. I wish more bitcoin skeptics kept some intellectual curiosity around it rather than just writing it off as "I don't get it: its worthless" - there are reasons people are paying tens of thousands of dollars for a bitcoin, even if you don't understand them. I think these attitudes are indicative of cognitive dissonance in individuals who dismissed Bitcoin a long time ago and don't want to recognize their own regret for discounting it: if they didn't dismiss it their net worth would probably be higher today.
      - wpietri 5y ago
        Redirecting 0.5% of global energy to productive use is very clearly significant. That's the whole-country level of energy usage. Markets also value Ponzi schemes highly. So what? Markets can be a useful guide to value in certain circumstances, but it's correlative, not probative. I've had plenty of intellectual curiosity around Bitcoin, blockchains, etc. For a while I was hoping something good would come out of it. But it's been 10 years and there's been almost no economically positive use demonstrated. It's great for certain kinds of light financial crime (ransomware, money laundering, etc) and it's great for creating the sort of unregulated markets in which scammers, fraudsters, and other economic parasites thrive. I'm personally very happy never to have put a nickel into cryptocurrencies. Could I have made a bunch of money? Maybe! Would have it been through creating value? No, not at all. It's a "greater fool" game, and I don't play those. I haven't since I quit working for financial traders in the 1990s, as I don't think it's moral to get paid when no value is created.

jkhdigital 5y ago

Bitcoin is a hard currency first; it includes a mechanism for transactions because that is a hard requirement for anything that functions as a currency but the network is optimized for security not throughput. If my only problem is paying people and getting paid, then Visa/ACH works just fine. If my problem is lack of confidence in my nation’s money supply (and this is a very real problem in quite a few countries) then Bitcoin is unquestionably the most convenient alternative.

wpietri 5y ago
I don't buy it. Bitcoin has much higher volatility than other currencies and much higher costs to use it. If your problem is lack of confidence in your nation's money supply, you're better off getting some more stable currency, like any one of these: https://fxssi.com/top-10-world-most-stable-currencies https://fxssi.com/top-10-world-most-stable-currencies