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What a surprise. Turns out burning through the power demands of a country to run a system of value-token-exchange lagging 4 orders of magnitude behind the capab

What a surprise. Turns out burning through the power demands of a country to run a system of value-token-exchange lagging 4 orders of magnitude behind the capability of credit cards measured in transactions done per year, is not a good Idea. Who could have seen that coming.

logicalmonster 5y ago
So long as centrally managed currencies are designed to rob the public through inflation, nothing else about Bitcoin's weaknesses really matters to its users. Pointing out how it's inefficient means nothing if the alternative means that you're robbed blind.
- verdverm 5y ago
  What are the cons of a deflationary currency?
  - logicalmonster 5y ago
    I suppose the textbook Keynesian argument would be that everybody would have an incentive to save as much of their money for as long as possible because it goes up in value over time, leading to incentivizing less short-term economic consumption, which would be harmful. Is it harmful though? Whether this is a good or bad thing might come down to how much importance you place on random consumption vs capital investment as the real engine of society. The Keynesian viewpoint is more favorable towards the importance of random consumption, the Austrian mentality would put a lot more weight on the value of saving for future investment and building.
    - verdverm 5y ago
      If people don't spend on goods and services, where do wages come from?
      - logicalmonster 5y ago
        As a defense of deflation, I'd say that "being incentivized to spend less doesn't mean that you're spending zero". Humans still need to eat and stay warm and fulfill their daily needs in a deflationary environment. You'll be very-well incentivized to work in a deflationary environment, you just might think a lot harder about buying something like a movie ticket if that money might be worth more in the future.
        verdverm 5y ago
        Right, so discretionary spending goes way down. I may be incentivized to work, but who can afford to employ me?
        logicalmonster 5y ago
        "Humans still need to eat and stay warm and fulfill their daily needs in a deflationary environment." EDIT: to add onto that answer, I'd say that just as there are still savers in an inflationary environment, there will still be consumers in a deflationary environment. Incentives matter, but are not absolute drivers.
        verdverm 5y ago
        I'm not convinced this logic holds up. It is counter intuitive with economic theory and history
        logicalmonster 5y ago
        > "It is counter intuitive with economic theory" If you said "It is counter intuitive with Keynesian economic theory", I'd see your point a bit more. But different schools of thought like the Austrians view the importance of short-term consumption differently than what is a sort of textbook model of the world.
      - MrMan 5y ago
        sharecropping - feudalism
    - ClumsyPilot 5y ago
      "how much importance you place on random consumption vs capital investment as the real engine of society" Deflationary currency competes with investment, not with consumption. For example investing in infrastructure, is a safe, low return investment. in single percentage digits. If the deflation of the currency is faster than that rate of return, then nobody will ever invest in infrastructure. People will never install solar panels on their house, etc.
  - tromp 5y ago
    For a cryptocurrency, the cons of diminishing block subsidies (as required by a capped supply) are 1) concentration of wealth on early adopters 2) no long term security unless you have a constant backlog of high-fee paying transactions I think an uncapped, disinflationary emission is to be preferred [1]. [1] https://john-tromp.medium.com/a-case-for-using-soft-total-supply-1169a188d153 https://john-tromp.medium.com/a-case-for-using-soft-total-su...
- timeon 5y ago
  Ok but Bitcoin is not currency.
hungryforcodes 5y ago
But you totally forget that for credit cards to work, we need all the merchant terminals and ATMS where people make cash advances. How much electricity does THAT use? I guarantee you it's not trivial.
bob1029 5y ago
To be fair, those credit card processors are not running as fast as they could in theory either. You can find another 3 orders of magnitude in certain financial exchanges. In some cases, those millions of transactions per second are being managed on a single thread.
- AccountToUse 5y ago
  Well, certainly not on Robin Hood's servers.
  - nacs 5y ago
    Robin Hood isn't a credit card processor -- they're stock traders.
- zenron 5y ago
  LMAX Disruptor is living proof of that. https://martinfowler.com/articles/lmax.html https://martinfowler.com/articles/lmax.html
  - bob1029 5y ago
    This is precisely what I was referring to. I sometimes wonder if the dev community has blinders on regarding how much elegance lives with this technique.
    - anthonygd 5y ago
      Why do you suspect blinders? Do you know of many cases where the disruptor pattern should be used by isn't?
      - bob1029 5y ago
        > Do you know of many cases where the disruptor pattern should be used by isn't? The disruptor pattern is the way to solve any problem where you need to process events/transactions/commands/et. al. in a serialized fashion [0] as quickly as possible. This problem space involves almost all business software, databases, simulations, etc. I do not know of any other technique that would allow for faster serial processing of data, especially when controlling for practical applicability. When I refer to blinders, I think I am mostly pointing to the ignorance regarding what is actually possible with the hardware (if you get the software out of its way). Any other technique involving cache-friendly structures, ring buffers, etc. is in the same league as far as I am concerned. [0] To be as clear as possible, "serialized" in this context means that the consequences of event #1 may alter how event #2 would be processed, and so on.
q1w2 5y ago
This assumes the use-case is small credit-card like transactions. The real (unspoken) use-case of bitcoin is large-scale international money laundering.
- mistrial9 5y ago
  careful there cowboy -- the law of your land is not the law of your neighbor's land. James Bond provides one view of the world, and the stars and stripes seem to have some blinding power in Hollywood, but in reality, tax and tax enforcement is not perfectly molded or enforced. The Tax Sheriff and his men drive very new models of auto, ever noticed that?
  - q1w2 5y ago
    I don't understand the point of this comment. I'm not making any judgements in my comment above, I'm merely stating my perception.
    - LordDragonfang 5y ago
      I think they were trying to argue in favor of tax evasion, which is both illegal and a different topic than money laundering. Sure is interesting the kind of defensive comments you get on any story negative about crypto.
MitPitt 5y ago
Why do people always forget that credit cards are powered not only by electricity, but with an absurd amount of bureaucracy as well. Has it ever crossed your mind how many man power and work hours goes into management of traditional banking systems? And how much energy that consumes? Across every country and every town. In PoW blockchains, on the other hand, it's just electricity.
- cool_dude85 5y ago
  That's right, no wasted man hours or pointless nonsense in the blockchain world. Side note, got a hot tip on an ICO I can invest in?
- toiletfuneral 5y ago
- a-priori 5y ago
  You don't have to imagine, because VISA is a public company. According to their 2021 financial report (year end Sept 30, 2020), VISA logged $8.3B in operating expenses. The majority of this is "personnel" at $4.2B (covering the salaries, benefits, etc. for their staff), $0.7B is "network and processing" (covering the expenses to operating their payments network), and the remainder is stuff like general administrative, marketing, professional fees and legal fees. But for comparison I'll use the $8.3B in total operating expenses. Over the same period VISA processed 164.7B transactions, so if you divide you get that on average it costs VISA $0.05 in total expenses to process a transaction, of which $0.004 is for actually operating the payments network. By comparison, it currently costs the Bitcoin network $176.39 to process a transaction (transaction fees plus block rewards per day / total transactions per day), over 3500x the expenses of VISA. Maybe you'll say that's still not the same thing, because "total transaction fees" represents _revenue_ to miners, not expenses. Fine. VISA's revenue over the same period was $24.1B, which works out to revenue-per-transaction of $0.14. That's still over 1200x as much as VISA. https://s29.q4cdn.com/385744025/files/doc_downloads/Visa-Inc_-Fiscal-2021-Annual-Report.pdf https://s29.q4cdn.com/385744025/files/doc_downloads/Visa-Inc... https://ycharts.com/indicators/bitcoin_average_cost_per_transaction https://ycharts.com/indicators/bitcoin_average_cost_per_tran...
hffftz 5y ago
> lagging 4 orders of magnitude behind the capability of credit cards How can you transfer large amounts of money between countries with minimal fees using credit cards?
- ballenf 5y ago
  It's maybe not apples-to-apples, but it's an instructive comparison like comparing the energy consumption of a day of Zoom calls to a business flight.
- oliwarner 5y ago
  About 1% by card with fraud prevention options forced. Spendable money directly into my account. The sender doesn't have to buy Bitcoin first. They don't have to wire it to me. I don't have to turn it back into money (at God knows what rate). Coinbase looks like it would take 1.49%+$2.99 at each end for a large end-to-end. And 1% is expensive. My bank charges a flat £25 for sending internationally. Many other banks and companies charge considerably less.
  - hffftz 5y ago
    > Coinbase looks like it would take 1.49%+$2.99 at each end for a large end-to-end. You should look into other cryptos.... bitcoin is not the one with least fees...
    - oliwarner 5y ago
      Rather than me "doing my own research", you could provide some indicative figures, like I did. It speeds up discussion. But whoever you pick, if you have to buy it with a card, chances are you're going to pay that card processing fee and a withdrawal fee at the other end. However you look at it, it's three transactions instead of one.
      - hffftz 5y ago
        I'm not sure which one has the least fees (which is why I didn't go into specifics).. and it probably changes often... (but Bitcoin isn't one of them). Ideally, an app would pick the best one at the time of transaction? Edit: and just today I had issues receiving a wire transfer from Canada, again, and it was less then $1k (because of my home address)
Jansen312 5y ago
Greed of capital gain. Everyone I know is talking about crypto in terms of USD price. Not a single person I know (including some miners) able to explain Ethereum usage other than USD pricing per token. Basically the whole crypto is running on ponzi fuel. Once that settle, we will see big corporations and governments putting in supercomputers to circumvent pheasants hash processsing. Look at China able to create 5G network in Shanghai that makes NY look like rural places and their big firewall that are able to hold out majority of western online contents. We basically help governments to establish blockchain uses by being the guinea pigs to fund the gpu cards development.

logicalmonster 5y ago

So long as centrally managed currencies are designed to rob the public through inflation, nothing else about Bitcoin's weaknesses really matters to its users. Pointing out how it's inefficient means nothing if the alternative means that you're robbed blind.

verdverm 5y ago
What are the cons of a deflationary currency?
- logicalmonster 5y ago
  I suppose the textbook Keynesian argument would be that everybody would have an incentive to save as much of their money for as long as possible because it goes up in value over time, leading to incentivizing less short-term economic consumption, which would be harmful. Is it harmful though? Whether this is a good or bad thing might come down to how much importance you place on random consumption vs capital investment as the real engine of society. The Keynesian viewpoint is more favorable towards the importance of random consumption, the Austrian mentality would put a lot more weight on the value of saving for future investment and building.
  - verdverm 5y ago
    If people don't spend on goods and services, where do wages come from?
    - logicalmonster 5y ago
      As a defense of deflation, I'd say that "being incentivized to spend less doesn't mean that you're spending zero". Humans still need to eat and stay warm and fulfill their daily needs in a deflationary environment. You'll be very-well incentivized to work in a deflationary environment, you just might think a lot harder about buying something like a movie ticket if that money might be worth more in the future.
      - verdverm 5y ago
        Right, so discretionary spending goes way down. I may be incentivized to work, but who can afford to employ me?
        logicalmonster 5y ago
        "Humans still need to eat and stay warm and fulfill their daily needs in a deflationary environment." EDIT: to add onto that answer, I'd say that just as there are still savers in an inflationary environment, there will still be consumers in a deflationary environment. Incentives matter, but are not absolute drivers.
        verdverm 5y ago
        I'm not convinced this logic holds up. It is counter intuitive with economic theory and history
        logicalmonster 5y ago
        > "It is counter intuitive with economic theory" If you said "It is counter intuitive with Keynesian economic theory", I'd see your point a bit more. But different schools of thought like the Austrians view the importance of short-term consumption differently than what is a sort of textbook model of the world.
    - MrMan 5y ago
      sharecropping - feudalism
  - ClumsyPilot 5y ago
    "how much importance you place on random consumption vs capital investment as the real engine of society" Deflationary currency competes with investment, not with consumption. For example investing in infrastructure, is a safe, low return investment. in single percentage digits. If the deflation of the currency is faster than that rate of return, then nobody will ever invest in infrastructure. People will never install solar panels on their house, etc.
- tromp 5y ago
  For a cryptocurrency, the cons of diminishing block subsidies (as required by a capped supply) are 1) concentration of wealth on early adopters 2) no long term security unless you have a constant backlog of high-fee paying transactions I think an uncapped, disinflationary emission is to be preferred [1]. [1] https://john-tromp.medium.com/a-case-for-using-soft-total-supply-1169a188d153 https://john-tromp.medium.com/a-case-for-using-soft-total-su...
timeon 5y ago
Ok but Bitcoin is not currency.

hungryforcodes 5y ago

But you totally forget that for credit cards to work, we need all the merchant terminals and ATMS where people make cash advances. How much electricity does THAT use? I guarantee you it's not trivial.

bob1029 5y ago

To be fair, those credit card processors are not running as fast as they could in theory either. You can find another 3 orders of magnitude in certain financial exchanges. In some cases, those millions of transactions per second are being managed on a single thread.

AccountToUse 5y ago
Well, certainly not on Robin Hood's servers.
- nacs 5y ago
  Robin Hood isn't a credit card processor -- they're stock traders.
zenron 5y ago
LMAX Disruptor is living proof of that. https://martinfowler.com/articles/lmax.html https://martinfowler.com/articles/lmax.html
- bob1029 5y ago
  This is precisely what I was referring to. I sometimes wonder if the dev community has blinders on regarding how much elegance lives with this technique.
  - anthonygd 5y ago
    Why do you suspect blinders? Do you know of many cases where the disruptor pattern should be used by isn't?
    - bob1029 5y ago
      > Do you know of many cases where the disruptor pattern should be used by isn't? The disruptor pattern is the way to solve any problem where you need to process events/transactions/commands/et. al. in a serialized fashion [0] as quickly as possible. This problem space involves almost all business software, databases, simulations, etc. I do not know of any other technique that would allow for faster serial processing of data, especially when controlling for practical applicability. When I refer to blinders, I think I am mostly pointing to the ignorance regarding what is actually possible with the hardware (if you get the software out of its way). Any other technique involving cache-friendly structures, ring buffers, etc. is in the same league as far as I am concerned. [0] To be as clear as possible, "serialized" in this context means that the consequences of event #1 may alter how event #2 would be processed, and so on.

q1w2 5y ago

This assumes the use-case is small credit-card like transactions. The real (unspoken) use-case of bitcoin is large-scale international money laundering.

mistrial9 5y ago
careful there cowboy -- the law of your land is not the law of your neighbor's land. James Bond provides one view of the world, and the stars and stripes seem to have some blinding power in Hollywood, but in reality, tax and tax enforcement is not perfectly molded or enforced. The Tax Sheriff and his men drive very new models of auto, ever noticed that?
- q1w2 5y ago
  I don't understand the point of this comment. I'm not making any judgements in my comment above, I'm merely stating my perception.
  - LordDragonfang 5y ago
    I think they were trying to argue in favor of tax evasion, which is both illegal and a different topic than money laundering. Sure is interesting the kind of defensive comments you get on any story negative about crypto.

MitPitt 5y ago

Why do people always forget that credit cards are powered not only by electricity, but with an absurd amount of bureaucracy as well. Has it ever crossed your mind how many man power and work hours goes into management of traditional banking systems? And how much energy that consumes? Across every country and every town. In PoW blockchains, on the other hand, it's just electricity.

cool_dude85 5y ago
That's right, no wasted man hours or pointless nonsense in the blockchain world. Side note, got a hot tip on an ICO I can invest in?
toiletfuneral 5y ago
a-priori 5y ago
You don't have to imagine, because VISA is a public company. According to their 2021 financial report (year end Sept 30, 2020), VISA logged $8.3B in operating expenses. The majority of this is "personnel" at $4.2B (covering the salaries, benefits, etc. for their staff), $0.7B is "network and processing" (covering the expenses to operating their payments network), and the remainder is stuff like general administrative, marketing, professional fees and legal fees. But for comparison I'll use the $8.3B in total operating expenses. Over the same period VISA processed 164.7B transactions, so if you divide you get that on average it costs VISA $0.05 in total expenses to process a transaction, of which $0.004 is for actually operating the payments network. By comparison, it currently costs the Bitcoin network $176.39 to process a transaction (transaction fees plus block rewards per day / total transactions per day), over 3500x the expenses of VISA. Maybe you'll say that's still not the same thing, because "total transaction fees" represents _revenue_ to miners, not expenses. Fine. VISA's revenue over the same period was $24.1B, which works out to revenue-per-transaction of $0.14. That's still over 1200x as much as VISA. https://s29.q4cdn.com/385744025/files/doc_downloads/Visa-Inc_-Fiscal-2021-Annual-Report.pdf https://s29.q4cdn.com/385744025/files/doc_downloads/Visa-Inc... https://ycharts.com/indicators/bitcoin_average_cost_per_transaction https://ycharts.com/indicators/bitcoin_average_cost_per_tran...

hffftz 5y ago

> lagging 4 orders of magnitude behind the capability of credit cards How can you transfer large amounts of money between countries with minimal fees using credit cards?

ballenf 5y ago
It's maybe not apples-to-apples, but it's an instructive comparison like comparing the energy consumption of a day of Zoom calls to a business flight.
oliwarner 5y ago
About 1% by card with fraud prevention options forced. Spendable money directly into my account. The sender doesn't have to buy Bitcoin first. They don't have to wire it to me. I don't have to turn it back into money (at God knows what rate). Coinbase looks like it would take 1.49%+$2.99 at each end for a large end-to-end. And 1% is expensive. My bank charges a flat £25 for sending internationally. Many other banks and companies charge considerably less.
- hffftz 5y ago
  > Coinbase looks like it would take 1.49%+$2.99 at each end for a large end-to-end. You should look into other cryptos.... bitcoin is not the one with least fees...
  - oliwarner 5y ago
    Rather than me "doing my own research", you could provide some indicative figures, like I did. It speeds up discussion. But whoever you pick, if you have to buy it with a card, chances are you're going to pay that card processing fee and a withdrawal fee at the other end. However you look at it, it's three transactions instead of one.
    - hffftz 5y ago
      I'm not sure which one has the least fees (which is why I didn't go into specifics).. and it probably changes often... (but Bitcoin isn't one of them). Ideally, an app would pick the best one at the time of transaction? Edit: and just today I had issues receiving a wire transfer from Canada, again, and it was less then $1k (because of my home address)

Jansen312 5y ago

Greed of capital gain. Everyone I know is talking about crypto in terms of USD price. Not a single person I know (including some miners) able to explain Ethereum usage other than USD pricing per token. Basically the whole crypto is running on ponzi fuel. Once that settle, we will see big corporations and governments putting in supercomputers to circumvent pheasants hash processsing. Look at China able to create 5G network in Shanghai that makes NY look like rural places and their big firewall that are able to hold out majority of western online contents. We basically help governments to establish blockchain uses by being the guinea pigs to fund the gpu cards development.