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It's not fair to just say [financial institutions power consumption] vs bitcoin as financial institutions do not protect their assets. Governments with militar

by toolz 4y ago

It's not fair to just say [financial institutions power consumption] vs bitcoin as financial institutions do not protect their assets. Governments with militaries protect the fiat assets and the power consumption of a military strength necessary to stabilize a fiat currency might be substantial.

CamelCaseName 4y ago
But, governments with militaries also protect crypto assets. Like when the DOJ went after Frosties founders, or more recently, SK and Do Kwon. There's also the CFTC and the SEC fighting over who will regulate the space. Even the most charitable argument, that crypto-relieved folks are trying to get governments involved.
- toolz 4y ago
  Of course, that's why it's muddy on how you should compare the energy costs. Bitcoins energy costs are 99.9% related to protecting the asset, they are not related to the functionality of the system. Likewise financial systems have little to do with protecting fiat, banks are backed by governments businesses like paypal hold money in banks, etc. So to compare bitcoins energy consumption to an entity that spend energy in an unrelated way isn't entirely fair - there is some merit there, but not much.
  - notahacker 4y ago
    Visa and Paypal's energy use to secure their transaction records and assets from cyberattack is included in their much smaller energy use though; the fact they do so in a more energy efficient manner doesn't make the comparison unfair. Bitcoin's energy use contributes no more towards preventing armed antagonists destroying or seizing assets, harming their economic value by destroying the underlying economy or compromising the network by seizing ASIC farms than Visa's. Bitcoiners outsource that bit to governments too.
- social_quotient 4y ago
  Read his comment as Bitcoin specifically not crypto generically.
- mattwilsonn888 4y ago
  Ignore all your examples, they are completely irrelevant, centrally controlled assets that operate on a layer that gives the option of decentralized control. Bitcoin can perform without a government - the involvement desired by some people is not at all, nor is it claimed to be, or understood by anyone but you, to be necessary to the healthy functioning of Bitcoin or other sufficiently decentralized open protocols.
lottin 4y ago
What do you mean "fiat assets"?
- toolz 4y ago
  I mean that fiat is always issues by a central authority. To be a trusted/stable central authority you need power, which is usually represented by military strength (either your own or the strength of your allies). You do not get stable fiat without a trusted central authority and you do not get a trusted central authority without military power.
  - lottin 4y ago
    Do you mean that private property is enforced by violence? How else do you expect to enforce it? By the way, bitcoin is also "fiat", in the sense that it isn't backed by anything (this is what "fiat" means).
    - toolz 4y ago
      > By the way, bitcoin is also "fiat", in the sense that it isn't backed by anything (this is what "fiat" means). That's not what fiat means in any sense. It has latin origins for "let it be done" which is to say that it is a decree by an authoritative actor. But both bitcoin and fiat are backed by something - bitcoin is backed by a lot of energy consumption and fiat is backed by government authority. > Do you mean that private property is enforced by violence? How else do you expect to enforce it? I don't expect it to be enforced any other way, I didn't mean to give the impression that bitcoin was somehow free from the necessity of enforcing private property. However, bitcoin is different in that you only need to protect people and the network, with fiat you have much more to protect, such as political positions of power and physical buildings like fort knox.
      - lottin 4y ago
        No, a fiat currency is one that isn't backed by anything (as opposed to commodity money, which is itself a commodity, or fiduciary money which is redeemable for a commodity). For example: The OLG models with money attribute to fiat money two basic characteristics: (a) it is intrinsically useless – that is, it cannot be directly used in production or consumption 3 – and (b) it is inconvertible 4 – that is, the issuer does not give a commitment to redeem it into commodities. Handa, J. (2008). Monetary economics. Routledge. (p. 719) Bitcoin is a fiat currency, just like the US dollar. And you're also wrong that with bitcoin "you only have to protect people and the network". What? Bitcoin itself can't be consumed (because it's fiat, remember), therefore it's worthless unless it can be exchanged for goods and services that can be consumed, which means these goods and services also need to be protected.
candiddevmike 4y ago
That protection applies to the people and other assets, too...

by toolz 4y ago

CamelCaseName 4y ago

But, governments with militaries also protect crypto assets. Like when the DOJ went after Frosties founders, or more recently, SK and Do Kwon. There's also the CFTC and the SEC fighting over who will regulate the space. Even the most charitable argument, that crypto-relieved folks are trying to get governments involved.

toolz 4y ago
Of course, that's why it's muddy on how you should compare the energy costs. Bitcoins energy costs are 99.9% related to protecting the asset, they are not related to the functionality of the system. Likewise financial systems have little to do with protecting fiat, banks are backed by governments businesses like paypal hold money in banks, etc. So to compare bitcoins energy consumption to an entity that spend energy in an unrelated way isn't entirely fair - there is some merit there, but not much.
- notahacker 4y ago
  Visa and Paypal's energy use to secure their transaction records and assets from cyberattack is included in their much smaller energy use though; the fact they do so in a more energy efficient manner doesn't make the comparison unfair. Bitcoin's energy use contributes no more towards preventing armed antagonists destroying or seizing assets, harming their economic value by destroying the underlying economy or compromising the network by seizing ASIC farms than Visa's. Bitcoiners outsource that bit to governments too.
social_quotient 4y ago
Read his comment as Bitcoin specifically not crypto generically.
mattwilsonn888 4y ago
Ignore all your examples, they are completely irrelevant, centrally controlled assets that operate on a layer that gives the option of decentralized control. Bitcoin can perform without a government - the involvement desired by some people is not at all, nor is it claimed to be, or understood by anyone but you, to be necessary to the healthy functioning of Bitcoin or other sufficiently decentralized open protocols.

lottin 4y ago

What do you mean "fiat assets"?

toolz 4y ago
I mean that fiat is always issues by a central authority. To be a trusted/stable central authority you need power, which is usually represented by military strength (either your own or the strength of your allies). You do not get stable fiat without a trusted central authority and you do not get a trusted central authority without military power.
- lottin 4y ago
  Do you mean that private property is enforced by violence? How else do you expect to enforce it? By the way, bitcoin is also "fiat", in the sense that it isn't backed by anything (this is what "fiat" means).
  - toolz 4y ago
    > By the way, bitcoin is also "fiat", in the sense that it isn't backed by anything (this is what "fiat" means). That's not what fiat means in any sense. It has latin origins for "let it be done" which is to say that it is a decree by an authoritative actor. But both bitcoin and fiat are backed by something - bitcoin is backed by a lot of energy consumption and fiat is backed by government authority. > Do you mean that private property is enforced by violence? How else do you expect to enforce it? I don't expect it to be enforced any other way, I didn't mean to give the impression that bitcoin was somehow free from the necessity of enforcing private property. However, bitcoin is different in that you only need to protect people and the network, with fiat you have much more to protect, such as political positions of power and physical buildings like fort knox.
    - lottin 4y ago
      No, a fiat currency is one that isn't backed by anything (as opposed to commodity money, which is itself a commodity, or fiduciary money which is redeemable for a commodity). For example: The OLG models with money attribute to fiat money two basic characteristics: (a) it is intrinsically useless – that is, it cannot be directly used in production or consumption 3 – and (b) it is inconvertible 4 – that is, the issuer does not give a commitment to redeem it into commodities. Handa, J. (2008). Monetary economics. Routledge. (p. 719) Bitcoin is a fiat currency, just like the US dollar. And you're also wrong that with bitcoin "you only have to protect people and the network". What? Bitcoin itself can't be consumed (because it's fiat, remember), therefore it's worthless unless it can be exchanged for goods and services that can be consumed, which means these goods and services also need to be protected.

candiddevmike 4y ago

That protection applies to the people and other assets, too...