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For some reason you only decided to include VISA, while I meant the whole traditional finance system, including central and other banks. VISA can't operate by

For some reason you only decided to include VISA, while I meant the whole traditional finance system, including central and other banks. VISA can't operate by itself.

vorpalhex 5y ago
Your local bank branch running a few ATMs is not exactly a mining farm and provides other services other than "processing transactions". Even the central banks are just office buildings with regular data centers.
- MitPitt 5y ago
  You missed the part where I said that this is not about electricity but man hours. Those office buildings are filled with people whose whole lives are to be spent managing these traditional finance institutions. That wastes much more energy, money, and human life.
gokdisjtrdcvv5 5y ago
I’m confused. How would adding more stuff change the picture that dramatically? No matter how you slice it Bitcoin has extremely prohibitive transaction costs
- latchkey 5y ago
  I wouldn't describe the fees as "extremely prohibitive"... https://ycharts.com/indicators/bitcoin_average_transaction_fee https://ycharts.com/indicators/bitcoin_average_transaction_f... "Bitcoin Average Transaction Fee measures the average fee in USD when a Bitcoin transaction is processed by a miner and confirmed. Average Bitcoin transaction fees can spike during periods of congestion on the network, as they did during the 2017 Crypto boom where they reached nearly 60 USD. Bitcoin Average Transaction Fee is at a current level of 1.560, down from 1.798 yesterday and down from 15.45 one year ago. This is a change of -13.20% from yesterday and -89.90% from one year ago."
  - gokdisjtrdcvv5 5y ago
    Obviously it depends on the use case but for most things it is. Not only is it random but 1.5 dollars is a lot! I think PayPal is like .3 + 2.3 percent? Basically anything under $5 would be almost impossible to sell. Not only that but having a chance for the fees to go incredibly high ($15) it’s just not worth it.
rebuilder 5y ago
Bitcoin doesn’t operate without the traditional finance system, either. Exchanges interface with it all the time.
- MitPitt 5y ago
  It does operate without those systems just fine. But even if we include those exchanges, how much energy do they spend, and how many people work in that sphere? I don't know the number, but there are not more than a hundred big crypto exchanges. And they don't have hundreds of people working inside them. That is incomparable to the traditional finance system.
  - rebuilder 5y ago
    Bitcoin without any way to exchange into traditional currency would be a very different scenario than what currently exists. It makes no sense to talk about it since we’re discussing energy use here and now. So if we need to consider the resources used by the whole banking system when thinking about VISA etc, we must do so for Bitcoin as well. Otherwise we’re just playing with blue-sky hypotheticals.
a-priori 5y ago
The factors I came up with, 1200x and 3500x, leave plenty of margin for including more actors if that's the comparison you want to make, while still ending up with more or less the same result.
dragontamer 5y ago
Bitcoin dwarfs the electricity usage from the US Mint, the literal money printers. The US Bureau of Engraving and Printing has a $1 Billion budget for manufacturing. https://home.treasury.gov/system/files/266/24.-BEP-FY-2022-BIB.pdf https://home.treasury.gov/system/files/266/24.-BEP-FY-2022-B... How far down the rabbit hole do you want to go? No matter how you look at it, Bitcoin is horribly inefficient. Compared to the US Dollar (the literal physical dollar), credit cards, banks, or other institutions. -------- Mind you: Coinbase is _NOT_ part of the bitcoin mining network, despite being a "bank" or "exchange" that processes a huge number of bitcoin transactions. Even when we ignore the electricity costs of Coinbase (and other servers), the BTC electricity usage is colossal.
- naraga 5y ago
  There's US MINT, then there is Canadian MINT, then there is China MINT, ... Bitcoin is fully autonomous system serving all layers (from settlement to Lightning payments) without thousands of expensive shiny buildings and state armies to protect it.
  - dragontamer 5y ago
    We're comparing transactions per second, are we not? The US Dollar has far more transactions per second than the measly 7 transactions per second.
    - naraga 5y ago
      on which layer? Bitcoin base layer has 7 TPS for which is able to guarantee its security properties. if you want to have fair comparison than maybe interbank settlements is close to what we are talking about. once we are talking about VISAs and Venmos we should pull Lightning network into discussion for which base layer provides security anchor.
      - dragontamer 5y ago
        Any and all layers. Bitcoin is miniscule, far smaller than the US Dollar. Do whatever you want to make BTC as big as possible. Artificially inflate the value and scope of BTC as much as you wish. It won't be anything close to the US Dollar. And yet, the electricity usage of BTC is absolutely colossal.
nullsmack 5y ago
If the other credit cards were several orders of magnitude more expensive to process transactions they wouldn't be in business.

For some reason you only decided to include VISA, while I meant the whole traditional finance system, including central and other banks. VISA can't operate by itself.

vorpalhex 5y ago

Your local bank branch running a few ATMs is not exactly a mining farm and provides other services other than "processing transactions". Even the central banks are just office buildings with regular data centers.

MitPitt 5y ago
You missed the part where I said that this is not about electricity but man hours. Those office buildings are filled with people whose whole lives are to be spent managing these traditional finance institutions. That wastes much more energy, money, and human life.

gokdisjtrdcvv5 5y ago

I’m confused. How would adding more stuff change the picture that dramatically? No matter how you slice it Bitcoin has extremely prohibitive transaction costs

latchkey 5y ago
I wouldn't describe the fees as "extremely prohibitive"... https://ycharts.com/indicators/bitcoin_average_transaction_fee https://ycharts.com/indicators/bitcoin_average_transaction_f... "Bitcoin Average Transaction Fee measures the average fee in USD when a Bitcoin transaction is processed by a miner and confirmed. Average Bitcoin transaction fees can spike during periods of congestion on the network, as they did during the 2017 Crypto boom where they reached nearly 60 USD. Bitcoin Average Transaction Fee is at a current level of 1.560, down from 1.798 yesterday and down from 15.45 one year ago. This is a change of -13.20% from yesterday and -89.90% from one year ago."
- gokdisjtrdcvv5 5y ago
  Obviously it depends on the use case but for most things it is. Not only is it random but 1.5 dollars is a lot! I think PayPal is like .3 + 2.3 percent? Basically anything under $5 would be almost impossible to sell. Not only that but having a chance for the fees to go incredibly high ($15) it’s just not worth it.

rebuilder 5y ago

Bitcoin doesn’t operate without the traditional finance system, either. Exchanges interface with it all the time.

MitPitt 5y ago
It does operate without those systems just fine. But even if we include those exchanges, how much energy do they spend, and how many people work in that sphere? I don't know the number, but there are not more than a hundred big crypto exchanges. And they don't have hundreds of people working inside them. That is incomparable to the traditional finance system.
- rebuilder 5y ago
  Bitcoin without any way to exchange into traditional currency would be a very different scenario than what currently exists. It makes no sense to talk about it since we’re discussing energy use here and now. So if we need to consider the resources used by the whole banking system when thinking about VISA etc, we must do so for Bitcoin as well. Otherwise we’re just playing with blue-sky hypotheticals.

a-priori 5y ago

The factors I came up with, 1200x and 3500x, leave plenty of margin for including more actors if that's the comparison you want to make, while still ending up with more or less the same result.

dragontamer 5y ago

Bitcoin dwarfs the electricity usage from the US Mint, the literal money printers. The US Bureau of Engraving and Printing has a $1 Billion budget for manufacturing. https://home.treasury.gov/system/files/266/24.-BEP-FY-2022-BIB.pdf https://home.treasury.gov/system/files/266/24.-BEP-FY-2022-B... How far down the rabbit hole do you want to go? No matter how you look at it, Bitcoin is horribly inefficient. Compared to the US Dollar (the literal physical dollar), credit cards, banks, or other institutions. -------- Mind you: Coinbase is _NOT_ part of the bitcoin mining network, despite being a "bank" or "exchange" that processes a huge number of bitcoin transactions. Even when we ignore the electricity costs of Coinbase (and other servers), the BTC electricity usage is colossal.

naraga 5y ago
There's US MINT, then there is Canadian MINT, then there is China MINT, ... Bitcoin is fully autonomous system serving all layers (from settlement to Lightning payments) without thousands of expensive shiny buildings and state armies to protect it.
- dragontamer 5y ago
  We're comparing transactions per second, are we not? The US Dollar has far more transactions per second than the measly 7 transactions per second.
  - naraga 5y ago
    on which layer? Bitcoin base layer has 7 TPS for which is able to guarantee its security properties. if you want to have fair comparison than maybe interbank settlements is close to what we are talking about. once we are talking about VISAs and Venmos we should pull Lightning network into discussion for which base layer provides security anchor.
    - dragontamer 5y ago
      Any and all layers. Bitcoin is miniscule, far smaller than the US Dollar. Do whatever you want to make BTC as big as possible. Artificially inflate the value and scope of BTC as much as you wish. It won't be anything close to the US Dollar. And yet, the electricity usage of BTC is absolutely colossal.

nullsmack 5y ago

If the other credit cards were several orders of magnitude more expensive to process transactions they wouldn't be in business.