4 ms·

My Early reference is in relation the the El Salvador bitcoin legal tender law, which is less than a year old. What is destructive exactly?

vesinisa 4y ago
Bitcoin's resource use, comparable to a mid-size country: https://digiconomist.net/bitcoin-energy-consumption/ https://digiconomist.net/bitcoin-energy-consumption/ Lacking viable uses outside of the criminal underworld and speculation, this is wasted energy. And it will only keep growing unless regulators step in.
- once_inc 4y ago
  There is a vast amount of legitimate use on the Bitcoin blockchain. Even companies that have a clear incentive to find criminal use of Bitcoin can only find anywhere between 1 and 4% possibly criminial transaction use. That is considerably lower than estimates for the USD or EUR. Comparing the energy usage of a single global industry to a mid-size country is dumb. All of this fud originates from digiconomist, which also has an incentive to keep spewing this garbage. You can find a vast amount of refutations on this, but the one by Nic Carter is good: https://www.coindesk.com/business/2021/03/05/the-frustrating-maddening-all-consuming-bitcoin-energy-debate/ https://www.coindesk.com/business/2021/03/05/the-frustrating...
  - vesinisa 4y ago
    Your source does not show how the numbers on Bitcoin's energy use published by Digiconomist are "garbage" and "FUD". In fact, the energy use of these blockchain networks is subject of multiple academic studies, like [1], [2] and [3] (just the top of a quick google). They all come to the same conclusion: these networks require mind-boggling amounts of electricity to operate by design. It is not garbage - it's an inherent fact of cryptocurrency. The article you linked instead makes the argument that the Bitcoin network will use less energy in the future, because there will be less coins issued for miners. This argument is easily refuted by that the risk of a 50% attack will always require defending the network with stupid large electricity use. The verifier incentives will just shift from mining proceeds to even more ridiculous transaction costs. [1]: https://ccaf.io/cbeci/index https://ccaf.io/cbeci/index [2]: https://www.sciencedirect.com/science/article/abs/pii/S2214629618301750 https://www.sciencedirect.com/science/article/abs/pii/S22146... [3]: https://www.sciencedirect.com/science/article/abs/pii/S1877343517300015 https://www.sciencedirect.com/science/article/abs/pii/S18773...
  - jfk13 4y ago
    > There is a vast amount of legitimate use on the Bitcoin blockchain What kind of legitimate use? If the answer primarily boils down to "cryptocurrency speculation, wash trading, and attempts at get-rich-quick schemes", I won't be all that impressed.
  - Cederfjard 4y ago
    > > Lacking viable uses outside of the criminal underworld and speculation You gave numbers for criminal activity, but the original claim also included speculation. If you take that into account as well, how much do you have left then? If Bitcoin remains primarily a vehicle for transferring wealth from new investors to incumbent holders by building hype, is it really a benefit to society?
    - once_inc 4y ago
      Sure, there's speculation there. Probably a significant amount. That doesn't mean Bitcoin is a vehicle for transferring wealth from new investors to incumbent investors. There are quite a few people that aren't selling. There are quite a few people using it to get out of monetary experiments by governments. There are quite a few people using it to send money without intermediaries to family in the third world. I can't give you specific numbers, because the system isn't built to provide them. This is, in my opinion, a feature.
- junofan 4y ago
  That resource use model uses miner revenue to estimate energy footprint. It’s off by at least an order of magnitude if you extrapolate from publicly available miner energy use statistics.
danuker 4y ago
I would say the wasteful proof-of-work securing upwards of $1M per hour is destructive - https://www.crypto51.app/ https://www.crypto51.app/. It can be solved through Pigovian taxes on externalities (carbon emission mainly). But it should apply to all industry fairly, and our energy-industry lobbyists will hear none of it.
- once_inc 4y ago
  Please note that Bitcoin is considerably more carbon emission friendly than most other industries. Also note that PoW is deliberately wasteful as feature.
  - danuker 4y ago
    I agree that PoW is wasteful by design. But it should be tuneable - it should somehow target securing, say, $X/hour, and not more, because it's even more wasteful. This could be implemented through an oracle that gives the current price to the protocol. https://en.wikipedia.org/wiki/Blockchain_oracle https://en.wikipedia.org/wiki/Blockchain_oracle
    - once_inc 4y ago
      Adding an oracle is adding an attack vector on the base layer for the future monetary network. Oracles are by definition trusted sources of information and wonky, untrustworthy, unreliable ones at that.
      - danuker 4y ago
        Ugh. Then it would take revising the protocol, or a hard fork, to reduce the miner reward.
  - soco 4y ago
    Most other industries produce something also without being wasteful-as-feature.

vesinisa 4y ago

Bitcoin's resource use, comparable to a mid-size country: https://digiconomist.net/bitcoin-energy-consumption/ https://digiconomist.net/bitcoin-energy-consumption/ Lacking viable uses outside of the criminal underworld and speculation, this is wasted energy. And it will only keep growing unless regulators step in.

once_inc 4y ago
There is a vast amount of legitimate use on the Bitcoin blockchain. Even companies that have a clear incentive to find criminal use of Bitcoin can only find anywhere between 1 and 4% possibly criminial transaction use. That is considerably lower than estimates for the USD or EUR. Comparing the energy usage of a single global industry to a mid-size country is dumb. All of this fud originates from digiconomist, which also has an incentive to keep spewing this garbage. You can find a vast amount of refutations on this, but the one by Nic Carter is good: https://www.coindesk.com/business/2021/03/05/the-frustrating-maddening-all-consuming-bitcoin-energy-debate/ https://www.coindesk.com/business/2021/03/05/the-frustrating...
- vesinisa 4y ago
  Your source does not show how the numbers on Bitcoin's energy use published by Digiconomist are "garbage" and "FUD". In fact, the energy use of these blockchain networks is subject of multiple academic studies, like [1], [2] and [3] (just the top of a quick google). They all come to the same conclusion: these networks require mind-boggling amounts of electricity to operate by design. It is not garbage - it's an inherent fact of cryptocurrency. The article you linked instead makes the argument that the Bitcoin network will use less energy in the future, because there will be less coins issued for miners. This argument is easily refuted by that the risk of a 50% attack will always require defending the network with stupid large electricity use. The verifier incentives will just shift from mining proceeds to even more ridiculous transaction costs. [1]: https://ccaf.io/cbeci/index https://ccaf.io/cbeci/index [2]: https://www.sciencedirect.com/science/article/abs/pii/S2214629618301750 https://www.sciencedirect.com/science/article/abs/pii/S22146... [3]: https://www.sciencedirect.com/science/article/abs/pii/S1877343517300015 https://www.sciencedirect.com/science/article/abs/pii/S18773...
- jfk13 4y ago
  > There is a vast amount of legitimate use on the Bitcoin blockchain What kind of legitimate use? If the answer primarily boils down to "cryptocurrency speculation, wash trading, and attempts at get-rich-quick schemes", I won't be all that impressed.
- Cederfjard 4y ago
  > > Lacking viable uses outside of the criminal underworld and speculation You gave numbers for criminal activity, but the original claim also included speculation. If you take that into account as well, how much do you have left then? If Bitcoin remains primarily a vehicle for transferring wealth from new investors to incumbent holders by building hype, is it really a benefit to society?
  - once_inc 4y ago
    Sure, there's speculation there. Probably a significant amount. That doesn't mean Bitcoin is a vehicle for transferring wealth from new investors to incumbent investors. There are quite a few people that aren't selling. There are quite a few people using it to get out of monetary experiments by governments. There are quite a few people using it to send money without intermediaries to family in the third world. I can't give you specific numbers, because the system isn't built to provide them. This is, in my opinion, a feature.
junofan 4y ago
That resource use model uses miner revenue to estimate energy footprint. It’s off by at least an order of magnitude if you extrapolate from publicly available miner energy use statistics.

danuker 4y ago

I would say the wasteful proof-of-work securing upwards of $1M per hour is destructive - https://www.crypto51.app/ https://www.crypto51.app/. It can be solved through Pigovian taxes on externalities (carbon emission mainly). But it should apply to all industry fairly, and our energy-industry lobbyists will hear none of it.

once_inc 4y ago
Please note that Bitcoin is considerably more carbon emission friendly than most other industries. Also note that PoW is deliberately wasteful as feature.
- danuker 4y ago
  I agree that PoW is wasteful by design. But it should be tuneable - it should somehow target securing, say, $X/hour, and not more, because it's even more wasteful. This could be implemented through an oracle that gives the current price to the protocol. https://en.wikipedia.org/wiki/Blockchain_oracle https://en.wikipedia.org/wiki/Blockchain_oracle
  - once_inc 4y ago
    Adding an oracle is adding an attack vector on the base layer for the future monetary network. Oracles are by definition trusted sources of information and wonky, untrustworthy, unreliable ones at that.
    - danuker 4y ago
      Ugh. Then it would take revising the protocol, or a hard fork, to reduce the miner reward.
- soco 4y ago
  Most other industries produce something also without being wasteful-as-feature.