8 ms·

Bitcoin Is Digital Scarcity

61 points by once_inc 4y ago

thepangolino 4y ago
once_inc 4y ago
Der Gigi is very effluent and philosophical Bitcoin proponent, that has written lots of great articles about Bitcoin. I perceive Hacker News to be generally negative towards Bitcoin, and feel that his articles should help bridge a gap between both groups. This article is very good in denoting what I feel is Bitcoin's main value proposition (and as a bonus it references Diablo 2, which is one of my great childhood preoccupations).
- cunidev 4y ago
  As usual, without mentioning the insane ecological impact of the "creation" of such "natural" tokens. Bitcoin is no more natural than, say, an extremely power-intensive industrial process used to create a particular crystal.
  - once_inc 4y ago
    Bitcoin is rapidly turning into a net carbon negative industry because of using bitcoin miners to prevent methane release into the atmosphere. It is literally the single best solution to make prevention of methane emissions in landfills and trapped oil wells profitable.
    - Nursie 4y ago
      No it isn't. It's using hard coal in Kazakhstan, amongst other power sources. This is wishful thinking.
      - ianai 4y ago
        It’s such horrible logic. So the way to make fossil fuels green is to make them even more valuable? Ok, sure, let’s place the value so high that burning or using them in any non-sustainable/recyclable/fully contained way is infinitely costly.
    - paulgb 4y ago
      There are a number of retorts to this comment where you posted it elsewhere in the thread: https://news.ycombinator.com/item?id=33066160 https://news.ycombinator.com/item?id=33066160
      - once_inc 4y ago
        Note that most of those retorts aren't backed by any sort of sources, and that the one comment that does refers to Alex de Vries, who is basically the single source of energy FUD for the past 7 or so years. Alex de Vries also works for the Dutch central bank, and has built his entire career identity around headlines such as: "Bitcoin transactions use more than [INSERT COUNTRY NAME HERE] yearly energy", which is a much a bogus comparison if I ever saw one. If the Bitcoin camp is to be suspect of bias, so is the other side.
        paulgb 4y ago
        We can put aside bias, the reality is that the mining industry is greenwashing mining based on hypothetical scenarios and a few renewable mining sites that are overshadowed by the massive miners. E.g. the Riot Blockchain ~300MW site in Texas IIRC is natural gas (I can't find the source, but they would certainly proudly tell investors if it were renewable). The 105MW Marathon site in Montana is coal. I think the Greenridge natural gas plant in NY has (had?) a 107MW capacity. This is mining sites that we know about, because they are public companies in the US. I doubt that the stealthy, privately-owned miners in Kazakhstan are using cleaner sources.
- diablo2btc 4y ago
  I credit Diablo 2 for helping me understand crypto very early on, and now I'm basically retired. Guess all that time spent playing wasn't wasted.
- etherael 4y ago
  > effluent I dont think that is what you meant to say. You were right, though.
- shkkmo 4y ago
  This article seems less like an exercise in education and much more like pure propaganda. The article repeatedly says things that are flat out false without any attempt at qualification or justification. The first is assertion that scarcity by authority is only virtual scarcity, not real scarcity while somehow glossing over the fact that this type of scarcity is incredibly common in the real world. Simultaneously, the scarcity of cryptocurrency is somehow not due to authority because that authority is decentralized... > As history shows and this example illustrates, planning an economy—virtual or not—is an impossible task. Every interference, no matter how benign the central planners believe it to be, will have unintended consequences and side effects that will beget more interference This comment seems to categorically rules out all attempts to manage and regulate markets by throwing around the loaded term "planned economy“ and vaguely referencing "history" as a source. History actually shows us that economic planning and market regulation can have mixed results, but some of those results are clearly successes. > Linden Lab has the power to break the rules and interfere as they see fit. The "interference" that is then described is Linden Lab trying to follow the law by collecting taxes, eliminating gambling, and following banking regulations. > One of the best examples for a flourishing economy (thanks to little intervention) is Eve Online, an MMORPG space simulation. CCP (the makers of Eve Online) did have a carefully considered approach to economic interventions, but their interventions were not small. The biggest is CCP's ban on RMT (real money transactions) in an attempt limit free and bidirectional exchangeable with external economies. Any games that attempts to control RMT in such a fashion is engaged in a pretty extreme level of "economic intervention". Of course this is done to avoid going the type of legal liabilities that faced second life due to Linden Dollars becoming more like a real currency. CCP also has a high level of control over the inputs and outputs to the Eve economy and manage them to keep that economy stable(ish) and the game fun and balanced to play. For a while, CCP employed economists to help understand gow CCP's interventions would affect their economy. > It is simple, really: if a world is controlled and instantiated by a single entity, it is prone to manipulation. Sooner or later, it will cease to exist. And with it, everything that existed inside it. How many cryotocurrencies have died in the last several years? Decentralization doesn't guarantee longevity. Meanwhile, WOW and Eve have both extisted longer than bitcoin. This is yet more unsupported propagandistic drivel. I would argue the opposite. A stable economy, whether in-game or not, requires some level of central regulation and planning. > The difference between in-game money and fiat money is in scale, not in nature. Both are virtual: simulations that are untethered from reality. Wow, the tortuous argument that bitcoin is somehow "more tethered to reality" than the dollar isn't even worth recounting. This is less of a "bridge" between skeptics and hodlers and more of a piece of libertarian propaganda. If you want a bridge, find an author that acknowledges that some regulation is necessary for a functioning economy.
dvt 4y ago
> The metaphysical properties of Bitcoin are independent of the metaphysical nature of numbers. The fact that Bitcoin is “just numbers” is unimportant. What is important is the process that brings about these numbers, which is a process that can’t be faked, cheated, or simulated. We know, without a doubt, that the only way to bring a valid bitcoin block into existence is by expending real energy in the real world. I'm not a BTC maxi in any sense of that term, but I do agree that the most interesting cryptocurrency (economically-speaking) is, by far, Bitcoin. It emerged purely organically, it enforces scarcity, and it provides no "utility" other than "value." It's not like Ethereum (functioning as a distributed VM: boring, and funded by VCs: double boring) or any other blockchain (which basically is just trying to copy Ethereum). In other words, I'm not sure if Ethereum will be around 100 years from now, but I'm pretty sure Bitcoin will.
- kranke155 4y ago
  Explain to me how Bitcoin survives in a world where miner rewards collapse or cease to exist - ie after all Bitcoin are done being unlocked through PoW. Ah he idea that Ethereum was funded by VCs is a really funny one, that has very little relation to reality. The funding was actually quite small.
  - dvt 4y ago
    > Ah he idea that Ethereum was funded by VCs is a really funny one, that has very little relation to reality. The funding was actually quite small. Oh come on, Buterin was knighted by Thiel as some kind of boy genius. Buterin also spoke at TC Disrupt, etc. The argument that VCs played no role in Ethereum's meteoric growth is plain wrong.
    - kranke155 4y ago
      He talked about VC funding. Vitalik won the Thiel Fellowship which afaik is open to anyone. Please provide further evidence of how VC funding made Ethereum, because off the books I’ve read on its origins, yeah there was some money out in at the start but nothing too crazy.
  - 4y ago
pavlov 4y ago
Bitcoin's proof-of-work is a fascinating thought experiment, an interesting proof of concept, and an absolutely terrifying real-world energy sink in a world that's already starved for clean energy and heading for an unavoidable climate meltdown. We've heard all the whataboutist arguments about Christmas lights and bankers' data centers and whatever. Yes, we should save energy there too! But when there's a novel form of energy waste that's ballooned past a mid-size European country's annual consumption within a decade and provides a service that's largely philosophical ("digital scarcity"), then that seems like something we should address immediately.
- junofan 4y ago
  Seems like short term thinking. Our descendants are just not gonna be good stewards of an energy asceticism regime.
- once_inc 4y ago
  Please note that Bitcoin's energy consumption is nothing compared to other industries, and that it is rapidly becoming a net carbon negative industry because of the use of miners to prevent methane emissions.
  - jollybean 4y ago
    Bitcoin is not an 'industry' so it's not comparable on those terms, moreover, it provides nothing of value to anyone.
  - acdha 4y ago
    Those other industries do useful things. If the world stopped having aluminum or steel, the effects would be catastrophic. If Bitcoin stopped tomorrow, nobody other than speculators would notice it except as a funny story in the news.
    - once_inc 4y ago
      It would destroy a nascent financial system that would empower billions of people in the world. You are basically saying: a baby dying in their cradle wouldn't generate as much impact as a harvard professor dying. Well, it wouldn't, but if that child would have been the next Newton or Einstein, the world is still significantly poorer for it.
galeos 4y ago
"...most people will know by now that only 21 million will ever exist, i.e. that you can’t print more of it." This is, at the very least, debatable: https://www.onionfutures.com/essays/turning-off-bitcoins-inflation-funded-security-model https://www.onionfutures.com/essays/turning-off-bitcoins-inf...
- highwaylights 4y ago
  It is false, members of the Bitcoin core team have already said as much - that in order for the base network to continue functioning, inflation will need to take place. More than that, the supply is essentially infinite right now. You can already see this in the boom and bust cycles where AOSS (any old s*tcoin) will rise and fall in tandem - this indicates that any large moves draw speculators to those tokens they subjectively view as less or more expensive. The biggest issue with this ultimately is that for Bitcoin to succeed, civilisation has to fail. You can't tax an asset you can't see and account for transparently (pseudonymous wallets), so you can't have electricity networks, heating networks, schools, police, military, welfare, public roads, running water, sewage, public facilities like libraries/museums, bursaries, national parks, ownership by right of any physical property whatsoever (there'd be no way to enforce physical ownership without public bodies, so essentially all ownership is decided moment-to-moment at the end of a gun last-of-us-style), or Bitcoin itself (as the public infrastructure supporting the network would not be maintained).
- tromp 4y ago
  While it's true that the vanishing block subsidy will cause security issues within several decades, solutions cannot involve breaking the 21M limit that is the core essence of Bitcoin.
  - galeos 4y ago
    Why not?
    - New_California 4y ago
      Because the 21m hard cap and change resistance are the definition of Bitcoin. If these are taken away for any reason, the result would be indistinguishable from shitcoins.
tromp 4y ago
> As long as someone cares about fair, censorship-resistant money that is independent of the state, Bitcoin will exist. With the majority of coins hodled by early adopters, Bitcoin suffers from a wealth concentration much worse than fiat's. While proof-of-work allows for fair distribution, the extremely front-loaded emission of Bitcoin is not that fair to late adopters, let alone later generations. Its capped supply, while unnecessary for being hard money [1], makes it more suitable for speculation than for use as a currency. [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...
- once_inc 4y ago
  Bitcoin having an unfair wealth distribution isn't a problem beyond just that; early adopters were heavily subsidised for the risk they were taking. Unlike under a Fiat standard, that uneven distribution doesn't benefit them beyond having many Bitcoin; they can't use those Bitcoin to create more Bitcoin, increasing the gorge between rich and poor. Even the most hard-core hodler from the 2010 era will eventually start spending his/her coins, at which point the distribution evens out. Also; many of the coins from that era are lost because the keys are lost.
  - UncleMeat 4y ago
    You can’t make dollars from dollars in any way that you cannot also do with BTC.
    - once_inc 4y ago
      Perhaps you should check out the Cantillion effect, and research fractional reserve banking. Both are clear financial systems that greatly benefit the extremely rich.
      - shkkmo 4y ago
        Is the point you are trying to make that neither of those apply to cryotocurrencies? Because that is not true as the history of hard fork and failed exchanges demonstrates.
etherael 4y ago
Almost all blockchains are digital scarcity. Most of them could theoretically work at a scale larger than a local supermarket. None of them have adopted a change to their fundamental operating parameters that forces such an inability with zero justification whatsoever coupled with papering over the manufactured vulnerability by implementing the exact same centralised and controlled financial systems which the original bitcoin was designed to disintermediate. The only unique attribute of BTC amongst blockchains is its wholly manufactured failure. Of course, such a thing is extremely useful to parties that desperately do not want the promise of functional blockchains to succeed.
- olalonde 4y ago
  Is this GPT-3?
  - etherael 4y ago
    No. I predicted and wrote about exactly this outcome nearly five years ago now. https://old.reddit.com/r/btc/comments/7fsbw5/divorcing_the_settlement_and_transaction_layers/ https://old.reddit.com/r/btc/comments/7fsbw5/divorcing_the_s...
zeroclip 4y ago
Three main issues with Bitcoin: high energy cost and e-waste, fixed supply cap which incentivizes hoarding, and long-term security budget concerns.
gjvc 4y ago
it's artificial scarcity, only if people believe in that notion of scarcity and can get others to believe in in it too. This continues until people start to think that it can't go up forever and people sell their holdings, some sooner than others. Thus goes the hype cycle of such things. By contrast, holdings connected to the real economy are easier to reason about, as there is evidence all around as to how well things are doing.
- jqpabc123 4y ago
  can get others to believe in in it too. In other words, to be a real, valuable currency a *consensus* needs to be reached on it's use. Bitcoin lacks any mechanism for reaching a consensus --- on it's utility or it's value.
Nursie 4y ago
Bitcoin is scarce by consensus, and not your consensus as the small-scale hodler. It is scarce by the consensus of the major players in the bitcoin ecosystem - large mining outfits and a handful of major exchanges. Such players could come to a consensus that the scarcity rules don't work for them, and may do so in future if, for instance, they decide that block rewards are too low. Sure, it would be a hard fork, but if the major players decided to go with it, the small players would be dragged along, or they could cling on to "Bitcoin classic" and see a major drop in the value of their coins. The ending line here is pure grandstanding- > (BTC) transcends all other monies that came before it, by introducing something that cannot be improved upon further, something that did not and can not exist in the physical world: absolute limitation via zero terminal inflation. BTC scarcity is not some emergent property of the universe, it is a property of a protocol. A protocol controlled by people, some of whom have disproportionate amounts of power over the system. You have exchanged trust in a government for trust in a shadowy and unnaccoutable group of loosely connected wealthy folks. Best of luck with that.
- Ekaros 4y ago
  And nothing really stops exchanges grouping together and starting to do things with fractional reserves. It is all digital anyway, so blocking the few big askers from taking their coins out with various reasons wouldn't be big thing. And average user wouldn't really care how their money works...
  - New_California 4y ago
    Fractional reserve is already a thing and will only increase from here. Bitcoin's scarcity relates to the base money supply and obviously cannot coerce the higher economic layers. That said bitcoiners are somewhat resistant to extreme fractional reserve because of the strong "not your keys, not your coins" ethos.
- New_California 4y ago
  It's much more than exchanges and miners as exemplified by the 2017 block size war, won by the users. The scenario you are describing - while possible in principle - is unlikely. Stakeholders understand that scarcity and change-resistance is Bitcoin's very definition. Take that away and there is no value left, Bitcoin becoming another malleable shitcoin.
malermeister 4y ago
I'm not sure why digital scarcity would be considered a good thing. Mankind has spent its entire existence struggling with scarcity, hoping to one day find salvation and move past scarcity. Now, thanks to all our technological advances, a post-scarcity world is finally within view, and people want to artificially reintroduce it? Why would we want to regress?
- capableweb 4y ago
  > post-scarcity world is finally within view Not against the entirely of your comment, but in what sense are we moving toward a post-scarcity world? There is a number of humans on the planet, with a limited number of resources, a limit which will be/has been reached at one point or another, as we cannot create new things from nothing. Scarcity is built-in in the fabrics of the universe, and I don't see how we could be moving towards something that doesn't have scarcity.
  - kibwen 4y ago
    For many things, scarcity will always exist. But with the rise of the digital age, many things that were once scarce are now post-scarce. Our society is still coming to grips with this notion.
    - capableweb 4y ago
      What things have humanity historically struggled with in regards to scarcity that are now moving towards "post-scarcity"?
      - malermeister 4y ago
        Information, media, knowledge, art, culture, science.
- kibwen 4y ago
  > Why would we want to regress? Because of the allegory of the cave. We animals have spent a billion years struggling to survive in the face of cruel scarcity, we've built all our systems and societies around the notion of managing scarcity and allocating scarce resources, and now that we're faced with a legitimate instance of post-scarcity our animal brains reject it.
thesuperbigfrog 4y ago
>> Digital goods aren’t naturally scarce. The marginal cost to replicate them is practically zero, as anyone who ever copy-and-pasted something can attest to. For this reason, digital scarcity used to be an oxymoron. If something is digital, it is just information, and information can be easily copied. This is still true. Artificial scarcity is artificial. The only way to enforce artificial scarcity is through laws / legal systems and DRM.
- rakoo 4y ago
  And artificial scarcity only exists because the entirety of our system is based on making money off of scarcity
  - lotsofpulp 4y ago
    Is this comment about copyright? Obviously, excessively long copyright terms are a problem, but what is the alternative to a short copyright term to motivate a non taxpayer funded entity to engage in a venture with very high initial costs and very low marginal costs to copy?
    - rakoo 4y ago
      It's about the economic and political system where things are not in abundance so to spread them among the population we give a financial value to each of those things and those who own the biggest wallet can get it. How do you get money in your wallet ? By already having money in your wallet: the more you have, the easier it is to have even more, because those who don't have enough must sell their time and energy, the only resource they have in abundance, to buy food and pay rent. Digital scarcity doesn't exist. If you can copy one time, it costs nothing to copy a million times more. But that breaks the entire system, so it has to be artificially blocked. > what is the alternative to a short copyright term to motivate Scarcity, and money, doesn't motivate anyone. People need money not because they want to get rich but because money is mandatory to buy food and pay rent. There are more than 73 million users on github (https://octoverse.github.com/ https://octoverse.github.com/). How many of them do you think went in for the money ? How many actually received any ? Copyright is not a motivator to create, quite the contrary: it's a motivator to milk as much juice as possible from a specific content, and to prevent the creation of content too close to it in fear it might jeopardize the revenue stream. Copyright has historically prevented the dissemination of knowledge, and the absence of copyright has actually lead to a better, wider circulation of information (and arguably a better educated population): https://archive.ph/ybifz https://archive.ph/ybifz > non taxpayer funded Here is the issue: what is wrong with taxes ? If a private person makes money, especially off of the work of others, why is it good to not share it with the population ? What is inherently good in a system that allows those who already own to be safe, but those who don't have to rely on individualistic schemes to hope survive ? Historically, high taxes have led to a higher quality of life for most, specifically because it is better redistributed. There is no problem with taxes.
ianai 4y ago
I miss when writers would simply write their thesis down. I looked (not exhaustively) but the thesis here seems only implicit. This seems essentially a love letter to bitcoin.
- dabedee 4y ago
  You're right. And the implicit thesis is not even clear. It also doesn't consider alternative decentralized currencies/networks to support why Bitcoin would be better. This reads like a lobby piece.
  - ianai 4y ago
    Totally! That explains why it felt I should be reading this on ultra glossy paper in some “financial business” waiting area.
- ianai 4y ago
  Leaving the thesis out makes it seem the writer is so unsure of their thesis that simply writing it would undermine the core of their message. Almost a rhetorical equivalent of a “comb over” just waiting for a strong gust of wind to betray the charade. Or outright arrogance, at worst. The thesis of an essay or writing should be like a power chord or ballad-it should be directly addressed early, often, and the more clearly expressed the better.
  - once_inc 4y ago
    Please note that this is a piece of a larger whole. The "21 lessons" by Der Gigi are the origin for this piece.
    - ianai 4y ago
      “The thesis of an essay or writing should be like a power chord or ballad-it should be directly addressed early, often, and the more clearly expressed the better.”
300bps 4y ago
Related explanation as to why gold was picked by many civilizations to represent money. https://www.npr.org/sections/money/2011/02/15/131430755/a-chemist-explains-why-gold-beat-out-lithium-osmium-einsteinium https://www.npr.org/sections/money/2011/02/15/131430755/a-ch...
jqpabc123 4y ago
Bitcoin is digital scarcity only if you ignore the reality of how easily it can be and has been cloned. Anyone can easily create their own fully functional variant --- even Kim Kardashian can do it. Simply being scarce doesn't make something valuable. The real facet that makes money both scarce and valuable is *consensus*. Allowing anyone to create their own is an absurd and self defeating way to reach a *consensus*.
- taolegal 4y ago
  > only if you ignore the reality of how easily it can be and has been cloned The point is that it hasn't been cloned, since cloning it is impossible. Nothing will reproduce the almost miraculous circumstances of its growth & bootstrapping from obscurity.
  - jqpabc123 4y ago
    Nothing will reproduce the almost miraculous circumstances of its growth & bootstrapping from obscurity. No? How about Ethereum? It started as a Bitcoin clone with added features and is now on track to surpass it. There are thousands of similar Bitcoin clones out there. And more are undoubtedly on the way. The most miraculous thing is the number of celebrities, politicians and corporations who have thus far resisted the urge to create and promote their own.
    - taolegal 4y ago
      That's not cloning bitcoin. It's the network & blockchain that's important & that's physically impossible to clone at this point without a time machine.
      - jqpabc123 4y ago
        The only thing that hasn't been cloned is the trademark name "Bitcoin".
dabedee 4y ago
The author seems to argue that the Bitcoin hard cap (i.e. the 21M limit) is as inalienable as a law of nature. But it's not. Even if it's in the code itself, it's made by humans who can build consensus around a change in the future. The decentralized nature of Bitcoin might help prevent or delay this, but if there are sufficient incentives for a majority of miners/contributors, changes to rules could occur.
- asah 4y ago
  Sure in theory. In practice, the kinds of people attracted to Bitcoin strongly correlate with this message, and attempts to dilute BTC would likely result in a fork instead. Besides, what's the point? Satoshis (sats) are 100 millionth of a bitcoin, stop just do business in sats if BTC is too large for your transaction...
  - lucozade 4y ago
    It may well fork under those circumstances but we've seen, multiple times, that a fork isn't terminal. You just usually end up with a dominant fork and the others tend to wither. So the real question is, would the dominant fork be the one that ends mining or the one that continues it? And that would likely be answered by which the the power brokers in Bitcoin-land will support ie the mining pools. So, for your contention to be correct, we would have to believe that the mining pools would willingly give up their source of power because of Satoshi's vision. It's not impossible for that to happen, of course. But the whole history of just about everything suggest that it's not the most likely outcome.
    - cesarb 4y ago
      > So the real question is, would the dominant fork be the one that ends mining or the one that continues it? And that would likely be answered by which the the power brokers in Bitcoin-land will support ie the mining pools. That's a common misconception, but the ones who matter to decide which will be the dominant fork are the so-called "economic nodes", not miners. Nowadays, the most important "economic nodes" seem to be the exchanges (after all, Bitcoin is useless unless you can convert it to something else, be it goods, services, or fiat money, and the later seems to be its most important use nowadays).
redeyedtreefrog 4y ago
Electricity isn’t a magical thing given to us by the high priests of the Ministry of Electrons. Take a magnet, take a copper wire, and voilà! You have electricity. Anyone can generate electricity at all times, as long as they are doing the required work. Electricity is here to stay precisely because it is not brought about by authority. It is a natural phenomenon, brought about by physical interaction. There is no central authority in charge when it comes to making it. My God is this drivel what passes for "intelligent" pro-bitcoin writing? Nation states don't control the existence of electricity, nation states also don't control the existence of bitcoin, therefore bitcoin is as important and fundamental as electricity. Gotcha.
- ashwagary 4y ago
  If so, why are many people ok with the notion of the state dictating how electricity should be used?
  - kingofheroes 4y ago
    Because the infrastructure that is needed to both generate and distribute electricity (thus making it "usable") is often partially or fully state funded. I think thats the case even in the United States; while power companies are privately owned, the cost of building new electrical infrastructure is often subsidized by city and/or state governments.
    - RestlessMind 4y ago
      So if I were to buy a few acres in a cheap place in the Southwest (AZ or NM or West TX), install solar panels to generate electricity and set up rest of the machinery (ASICs, internet fiber) to mine bitcoins, you won't have a problem with that?
      - ashwagary 4y ago
        I think so, proof of work is ideal for the development and cultivation of stranded energy.
stall84 4y ago
I love how there's a superscript-citation added to the line "Is the rapture of the nerds imminent..."
drdrek 4y ago
But why is Bitcoin or Blockchain a prerequisite to scarcity? Can you not use any other technological method? why do you need consensus validation for validating scarcity? (Spoiler, you don't) And if you want consensus validation why do you need blockchains? (Spoiler, you don't) Its always the "What" about Cryto, never the "Why". Can Bitcoin be useful for something? Yeah, maybe, I guess. Is it Digital Scarcity? Probably not.
- jqpabc123 4y ago
  Blockchain is just a novel, decentralized accounting method. Interesting --- but definitely not required. How the accounting is done is really just an arbitrary background aspect of a functioning currency. Don't take my word for it --- just ask any crypto scammer who doesn't know or care about the technical details of blockchain.
thom_ 4y ago
No it isn’t. Ok sure, there are only so many bitcoins that can be mined. But - there’s 50k alt currencies that have fallen out of the sky, most also with scarcity. Why are they worthless while bitcoin holds value?. In fact the scarcity in cryptocurrency isn’t the tokens at all rather the collective expendable income of gullible users. They’re for the most part running a net loss, and even those ahead on paper need to go through a regulated exchange for a payout with all the questions that come with that giant pile of money.
nonch0n 4y ago
The OP compares digital reality to physical reality, but digital reality exists at the behest of physical institutions that can and do limit it. There's no comparing the existence of matter and chemistry and the laws of physics with bits or bytes on our global internet infrastructure. China has successfully limited Bitcoin with its ban. Bitcoin's value (its exchange rate with other currencies) is affected by China limiting its citizens' ability to host a node and exchange or hold Bitcoin the Chinese sovereign territory. The author is correct that there isn't a centralized entity controlling Bitcoin as with a central bank and fiat currency, but in this case there's still a group of ISPs and governments that together can influence Bitcoin "printing" in many ways.
- olalonde 4y ago
  They can perhaps influence its value by reducing its utility (e.g. by declaring it illegal) but they cannot "print" more supply.

61 points by once_inc 4y ago

Der Gigi is very effluent and philosophical Bitcoin proponent, that has written lots of great articles about Bitcoin. I perceive Hacker News to be generally negative towards Bitcoin, and feel that his articles should help bridge a gap between both groups. This article is very good in denoting what I feel is Bitcoin's main value proposition (and as a bonus it references Diablo 2, which is one of my great childhood preoccupations).

cunidev 4y ago
As usual, without mentioning the insane ecological impact of the "creation" of such "natural" tokens. Bitcoin is no more natural than, say, an extremely power-intensive industrial process used to create a particular crystal.
- once_inc 4y ago
  Bitcoin is rapidly turning into a net carbon negative industry because of using bitcoin miners to prevent methane release into the atmosphere. It is literally the single best solution to make prevention of methane emissions in landfills and trapped oil wells profitable.
  - Nursie 4y ago
    No it isn't. It's using hard coal in Kazakhstan, amongst other power sources. This is wishful thinking.
    - ianai 4y ago
      It’s such horrible logic. So the way to make fossil fuels green is to make them even more valuable? Ok, sure, let’s place the value so high that burning or using them in any non-sustainable/recyclable/fully contained way is infinitely costly.
  - paulgb 4y ago
    There are a number of retorts to this comment where you posted it elsewhere in the thread: https://news.ycombinator.com/item?id=33066160 https://news.ycombinator.com/item?id=33066160
    - once_inc 4y ago
      Note that most of those retorts aren't backed by any sort of sources, and that the one comment that does refers to Alex de Vries, who is basically the single source of energy FUD for the past 7 or so years. Alex de Vries also works for the Dutch central bank, and has built his entire career identity around headlines such as: "Bitcoin transactions use more than [INSERT COUNTRY NAME HERE] yearly energy", which is a much a bogus comparison if I ever saw one. If the Bitcoin camp is to be suspect of bias, so is the other side.
      - paulgb 4y ago
        We can put aside bias, the reality is that the mining industry is greenwashing mining based on hypothetical scenarios and a few renewable mining sites that are overshadowed by the massive miners. E.g. the Riot Blockchain ~300MW site in Texas IIRC is natural gas (I can't find the source, but they would certainly proudly tell investors if it were renewable). The 105MW Marathon site in Montana is coal. I think the Greenridge natural gas plant in NY has (had?) a 107MW capacity. This is mining sites that we know about, because they are public companies in the US. I doubt that the stealthy, privately-owned miners in Kazakhstan are using cleaner sources.
diablo2btc 4y ago
I credit Diablo 2 for helping me understand crypto very early on, and now I'm basically retired. Guess all that time spent playing wasn't wasted.
etherael 4y ago
> effluent I dont think that is what you meant to say. You were right, though.
shkkmo 4y ago
This article seems less like an exercise in education and much more like pure propaganda. The article repeatedly says things that are flat out false without any attempt at qualification or justification. The first is assertion that scarcity by authority is only virtual scarcity, not real scarcity while somehow glossing over the fact that this type of scarcity is incredibly common in the real world. Simultaneously, the scarcity of cryptocurrency is somehow not due to authority because that authority is decentralized... > As history shows and this example illustrates, planning an economy—virtual or not—is an impossible task. Every interference, no matter how benign the central planners believe it to be, will have unintended consequences and side effects that will beget more interference This comment seems to categorically rules out all attempts to manage and regulate markets by throwing around the loaded term "planned economy“ and vaguely referencing "history" as a source. History actually shows us that economic planning and market regulation can have mixed results, but some of those results are clearly successes. > Linden Lab has the power to break the rules and interfere as they see fit. The "interference" that is then described is Linden Lab trying to follow the law by collecting taxes, eliminating gambling, and following banking regulations. > One of the best examples for a flourishing economy (thanks to little intervention) is Eve Online, an MMORPG space simulation. CCP (the makers of Eve Online) did have a carefully considered approach to economic interventions, but their interventions were not small. The biggest is CCP's ban on RMT (real money transactions) in an attempt limit free and bidirectional exchangeable with external economies. Any games that attempts to control RMT in such a fashion is engaged in a pretty extreme level of "economic intervention". Of course this is done to avoid going the type of legal liabilities that faced second life due to Linden Dollars becoming more like a real currency. CCP also has a high level of control over the inputs and outputs to the Eve economy and manage them to keep that economy stable(ish) and the game fun and balanced to play. For a while, CCP employed economists to help understand gow CCP's interventions would affect their economy. > It is simple, really: if a world is controlled and instantiated by a single entity, it is prone to manipulation. Sooner or later, it will cease to exist. And with it, everything that existed inside it. How many cryotocurrencies have died in the last several years? Decentralization doesn't guarantee longevity. Meanwhile, WOW and Eve have both extisted longer than bitcoin. This is yet more unsupported propagandistic drivel. I would argue the opposite. A stable economy, whether in-game or not, requires some level of central regulation and planning. > The difference between in-game money and fiat money is in scale, not in nature. Both are virtual: simulations that are untethered from reality. Wow, the tortuous argument that bitcoin is somehow "more tethered to reality" than the dollar isn't even worth recounting. This is less of a "bridge" between skeptics and hodlers and more of a piece of libertarian propaganda. If you want a bridge, find an author that acknowledges that some regulation is necessary for a functioning economy.

dvt 4y ago

> The metaphysical properties of Bitcoin are independent of the metaphysical nature of numbers. The fact that Bitcoin is “just numbers” is unimportant. What is important is the process that brings about these numbers, which is a process that can’t be faked, cheated, or simulated. We know, without a doubt, that the only way to bring a valid bitcoin block into existence is by expending real energy in the real world. I'm not a BTC maxi in any sense of that term, but I do agree that the most interesting cryptocurrency (economically-speaking) is, by far, Bitcoin. It emerged purely organically, it enforces scarcity, and it provides no "utility" other than "value." It's not like Ethereum (functioning as a distributed VM: boring, and funded by VCs: double boring) or any other blockchain (which basically is just trying to copy Ethereum). In other words, I'm not sure if Ethereum will be around 100 years from now, but I'm pretty sure Bitcoin will.

kranke155 4y ago
Explain to me how Bitcoin survives in a world where miner rewards collapse or cease to exist - ie after all Bitcoin are done being unlocked through PoW. Ah he idea that Ethereum was funded by VCs is a really funny one, that has very little relation to reality. The funding was actually quite small.
- dvt 4y ago
  > Ah he idea that Ethereum was funded by VCs is a really funny one, that has very little relation to reality. The funding was actually quite small. Oh come on, Buterin was knighted by Thiel as some kind of boy genius. Buterin also spoke at TC Disrupt, etc. The argument that VCs played no role in Ethereum's meteoric growth is plain wrong.
  - kranke155 4y ago
    He talked about VC funding. Vitalik won the Thiel Fellowship which afaik is open to anyone. Please provide further evidence of how VC funding made Ethereum, because off the books I’ve read on its origins, yeah there was some money out in at the start but nothing too crazy.
- 4y ago

pavlov 4y ago

Bitcoin's proof-of-work is a fascinating thought experiment, an interesting proof of concept, and an absolutely terrifying real-world energy sink in a world that's already starved for clean energy and heading for an unavoidable climate meltdown. We've heard all the whataboutist arguments about Christmas lights and bankers' data centers and whatever. Yes, we should save energy there too! But when there's a novel form of energy waste that's ballooned past a mid-size European country's annual consumption within a decade and provides a service that's largely philosophical ("digital scarcity"), then that seems like something we should address immediately.

junofan 4y ago
Seems like short term thinking. Our descendants are just not gonna be good stewards of an energy asceticism regime.
once_inc 4y ago
Please note that Bitcoin's energy consumption is nothing compared to other industries, and that it is rapidly becoming a net carbon negative industry because of the use of miners to prevent methane emissions.
- jollybean 4y ago
  Bitcoin is not an 'industry' so it's not comparable on those terms, moreover, it provides nothing of value to anyone.
- acdha 4y ago
  Those other industries do useful things. If the world stopped having aluminum or steel, the effects would be catastrophic. If Bitcoin stopped tomorrow, nobody other than speculators would notice it except as a funny story in the news.
  - once_inc 4y ago
    It would destroy a nascent financial system that would empower billions of people in the world. You are basically saying: a baby dying in their cradle wouldn't generate as much impact as a harvard professor dying. Well, it wouldn't, but if that child would have been the next Newton or Einstein, the world is still significantly poorer for it.

galeos 4y ago

"...most people will know by now that only 21 million will ever exist, i.e. that you can’t print more of it." This is, at the very least, debatable: https://www.onionfutures.com/essays/turning-off-bitcoins-inflation-funded-security-model https://www.onionfutures.com/essays/turning-off-bitcoins-inf...

highwaylights 4y ago
It is false, members of the Bitcoin core team have already said as much - that in order for the base network to continue functioning, inflation will need to take place. More than that, the supply is essentially infinite right now. You can already see this in the boom and bust cycles where AOSS (any old s*tcoin) will rise and fall in tandem - this indicates that any large moves draw speculators to those tokens they subjectively view as less or more expensive. The biggest issue with this ultimately is that for Bitcoin to succeed, civilisation has to fail. You can't tax an asset you can't see and account for transparently (pseudonymous wallets), so you can't have electricity networks, heating networks, schools, police, military, welfare, public roads, running water, sewage, public facilities like libraries/museums, bursaries, national parks, ownership by right of any physical property whatsoever (there'd be no way to enforce physical ownership without public bodies, so essentially all ownership is decided moment-to-moment at the end of a gun last-of-us-style), or Bitcoin itself (as the public infrastructure supporting the network would not be maintained).
tromp 4y ago
While it's true that the vanishing block subsidy will cause security issues within several decades, solutions cannot involve breaking the 21M limit that is the core essence of Bitcoin.
- galeos 4y ago
  Why not?
  - New_California 4y ago
    Because the 21m hard cap and change resistance are the definition of Bitcoin. If these are taken away for any reason, the result would be indistinguishable from shitcoins.

tromp 4y ago

> As long as someone cares about fair, censorship-resistant money that is independent of the state, Bitcoin will exist. With the majority of coins hodled by early adopters, Bitcoin suffers from a wealth concentration much worse than fiat's. While proof-of-work allows for fair distribution, the extremely front-loaded emission of Bitcoin is not that fair to late adopters, let alone later generations. Its capped supply, while unnecessary for being hard money [1], makes it more suitable for speculation than for use as a currency. [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...

once_inc 4y ago
Bitcoin having an unfair wealth distribution isn't a problem beyond just that; early adopters were heavily subsidised for the risk they were taking. Unlike under a Fiat standard, that uneven distribution doesn't benefit them beyond having many Bitcoin; they can't use those Bitcoin to create more Bitcoin, increasing the gorge between rich and poor. Even the most hard-core hodler from the 2010 era will eventually start spending his/her coins, at which point the distribution evens out. Also; many of the coins from that era are lost because the keys are lost.
- UncleMeat 4y ago
  You can’t make dollars from dollars in any way that you cannot also do with BTC.
  - once_inc 4y ago
    Perhaps you should check out the Cantillion effect, and research fractional reserve banking. Both are clear financial systems that greatly benefit the extremely rich.
    - shkkmo 4y ago
      Is the point you are trying to make that neither of those apply to cryotocurrencies? Because that is not true as the history of hard fork and failed exchanges demonstrates.

etherael 4y ago

Almost all blockchains are digital scarcity. Most of them could theoretically work at a scale larger than a local supermarket. None of them have adopted a change to their fundamental operating parameters that forces such an inability with zero justification whatsoever coupled with papering over the manufactured vulnerability by implementing the exact same centralised and controlled financial systems which the original bitcoin was designed to disintermediate. The only unique attribute of BTC amongst blockchains is its wholly manufactured failure. Of course, such a thing is extremely useful to parties that desperately do not want the promise of functional blockchains to succeed.

olalonde 4y ago
Is this GPT-3?
- etherael 4y ago
  No. I predicted and wrote about exactly this outcome nearly five years ago now. https://old.reddit.com/r/btc/comments/7fsbw5/divorcing_the_settlement_and_transaction_layers/ https://old.reddit.com/r/btc/comments/7fsbw5/divorcing_the_s...

zeroclip 4y ago

Three main issues with Bitcoin: high energy cost and e-waste, fixed supply cap which incentivizes hoarding, and long-term security budget concerns.

gjvc 4y ago

it's artificial scarcity, only if people believe in that notion of scarcity and can get others to believe in in it too. This continues until people start to think that it can't go up forever and people sell their holdings, some sooner than others. Thus goes the hype cycle of such things. By contrast, holdings connected to the real economy are easier to reason about, as there is evidence all around as to how well things are doing.

jqpabc123 4y ago
can get others to believe in in it too. In other words, to be a real, valuable currency a *consensus* needs to be reached on it's use. Bitcoin lacks any mechanism for reaching a consensus --- on it's utility or it's value.

Nursie 4y ago

Bitcoin is scarce by consensus, and not your consensus as the small-scale hodler. It is scarce by the consensus of the major players in the bitcoin ecosystem - large mining outfits and a handful of major exchanges. Such players could come to a consensus that the scarcity rules don't work for them, and may do so in future if, for instance, they decide that block rewards are too low. Sure, it would be a hard fork, but if the major players decided to go with it, the small players would be dragged along, or they could cling on to "Bitcoin classic" and see a major drop in the value of their coins. The ending line here is pure grandstanding- > (BTC) transcends all other monies that came before it, by introducing something that cannot be improved upon further, something that did not and can not exist in the physical world: absolute limitation via zero terminal inflation. BTC scarcity is not some emergent property of the universe, it is a property of a protocol. A protocol controlled by people, some of whom have disproportionate amounts of power over the system. You have exchanged trust in a government for trust in a shadowy and unnaccoutable group of loosely connected wealthy folks. Best of luck with that.

Ekaros 4y ago
And nothing really stops exchanges grouping together and starting to do things with fractional reserves. It is all digital anyway, so blocking the few big askers from taking their coins out with various reasons wouldn't be big thing. And average user wouldn't really care how their money works...
- New_California 4y ago
  Fractional reserve is already a thing and will only increase from here. Bitcoin's scarcity relates to the base money supply and obviously cannot coerce the higher economic layers. That said bitcoiners are somewhat resistant to extreme fractional reserve because of the strong "not your keys, not your coins" ethos.
New_California 4y ago
It's much more than exchanges and miners as exemplified by the 2017 block size war, won by the users. The scenario you are describing - while possible in principle - is unlikely. Stakeholders understand that scarcity and change-resistance is Bitcoin's very definition. Take that away and there is no value left, Bitcoin becoming another malleable shitcoin.

malermeister 4y ago

I'm not sure why digital scarcity would be considered a good thing. Mankind has spent its entire existence struggling with scarcity, hoping to one day find salvation and move past scarcity. Now, thanks to all our technological advances, a post-scarcity world is finally within view, and people want to artificially reintroduce it? Why would we want to regress?

capableweb 4y ago
> post-scarcity world is finally within view Not against the entirely of your comment, but in what sense are we moving toward a post-scarcity world? There is a number of humans on the planet, with a limited number of resources, a limit which will be/has been reached at one point or another, as we cannot create new things from nothing. Scarcity is built-in in the fabrics of the universe, and I don't see how we could be moving towards something that doesn't have scarcity.
- kibwen 4y ago
  For many things, scarcity will always exist. But with the rise of the digital age, many things that were once scarce are now post-scarce. Our society is still coming to grips with this notion.
  - capableweb 4y ago
    What things have humanity historically struggled with in regards to scarcity that are now moving towards "post-scarcity"?
    - malermeister 4y ago
      Information, media, knowledge, art, culture, science.
kibwen 4y ago
> Why would we want to regress? Because of the allegory of the cave. We animals have spent a billion years struggling to survive in the face of cruel scarcity, we've built all our systems and societies around the notion of managing scarcity and allocating scarce resources, and now that we're faced with a legitimate instance of post-scarcity our animal brains reject it.

thesuperbigfrog 4y ago

>> Digital goods aren’t naturally scarce. The marginal cost to replicate them is practically zero, as anyone who ever copy-and-pasted something can attest to. For this reason, digital scarcity used to be an oxymoron. If something is digital, it is just information, and information can be easily copied. This is still true. Artificial scarcity is artificial. The only way to enforce artificial scarcity is through laws / legal systems and DRM.

rakoo 4y ago
And artificial scarcity only exists because the entirety of our system is based on making money off of scarcity
- lotsofpulp 4y ago
  Is this comment about copyright? Obviously, excessively long copyright terms are a problem, but what is the alternative to a short copyright term to motivate a non taxpayer funded entity to engage in a venture with very high initial costs and very low marginal costs to copy?
  - rakoo 4y ago
    It's about the economic and political system where things are not in abundance so to spread them among the population we give a financial value to each of those things and those who own the biggest wallet can get it. How do you get money in your wallet ? By already having money in your wallet: the more you have, the easier it is to have even more, because those who don't have enough must sell their time and energy, the only resource they have in abundance, to buy food and pay rent. Digital scarcity doesn't exist. If you can copy one time, it costs nothing to copy a million times more. But that breaks the entire system, so it has to be artificially blocked. > what is the alternative to a short copyright term to motivate Scarcity, and money, doesn't motivate anyone. People need money not because they want to get rich but because money is mandatory to buy food and pay rent. There are more than 73 million users on github (https://octoverse.github.com/ https://octoverse.github.com/). How many of them do you think went in for the money ? How many actually received any ? Copyright is not a motivator to create, quite the contrary: it's a motivator to milk as much juice as possible from a specific content, and to prevent the creation of content too close to it in fear it might jeopardize the revenue stream. Copyright has historically prevented the dissemination of knowledge, and the absence of copyright has actually lead to a better, wider circulation of information (and arguably a better educated population): https://archive.ph/ybifz https://archive.ph/ybifz > non taxpayer funded Here is the issue: what is wrong with taxes ? If a private person makes money, especially off of the work of others, why is it good to not share it with the population ? What is inherently good in a system that allows those who already own to be safe, but those who don't have to rely on individualistic schemes to hope survive ? Historically, high taxes have led to a higher quality of life for most, specifically because it is better redistributed. There is no problem with taxes.

ianai 4y ago

I miss when writers would simply write their thesis down. I looked (not exhaustively) but the thesis here seems only implicit. This seems essentially a love letter to bitcoin.

dabedee 4y ago
You're right. And the implicit thesis is not even clear. It also doesn't consider alternative decentralized currencies/networks to support why Bitcoin would be better. This reads like a lobby piece.
- ianai 4y ago
  Totally! That explains why it felt I should be reading this on ultra glossy paper in some “financial business” waiting area.
ianai 4y ago
Leaving the thesis out makes it seem the writer is so unsure of their thesis that simply writing it would undermine the core of their message. Almost a rhetorical equivalent of a “comb over” just waiting for a strong gust of wind to betray the charade. Or outright arrogance, at worst. The thesis of an essay or writing should be like a power chord or ballad-it should be directly addressed early, often, and the more clearly expressed the better.
- once_inc 4y ago
  Please note that this is a piece of a larger whole. The "21 lessons" by Der Gigi are the origin for this piece.
  - ianai 4y ago
    “The thesis of an essay or writing should be like a power chord or ballad-it should be directly addressed early, often, and the more clearly expressed the better.”

300bps 4y ago

Related explanation as to why gold was picked by many civilizations to represent money. https://www.npr.org/sections/money/2011/02/15/131430755/a-chemist-explains-why-gold-beat-out-lithium-osmium-einsteinium https://www.npr.org/sections/money/2011/02/15/131430755/a-ch...

jqpabc123 4y ago

Bitcoin is digital scarcity only if you ignore the reality of how easily it can be and has been cloned. Anyone can easily create their own fully functional variant --- even Kim Kardashian can do it. Simply being scarce doesn't make something valuable. The real facet that makes money both scarce and valuable is *consensus*. Allowing anyone to create their own is an absurd and self defeating way to reach a *consensus*.

taolegal 4y ago
> only if you ignore the reality of how easily it can be and has been cloned The point is that it hasn't been cloned, since cloning it is impossible. Nothing will reproduce the almost miraculous circumstances of its growth & bootstrapping from obscurity.
- jqpabc123 4y ago
  Nothing will reproduce the almost miraculous circumstances of its growth & bootstrapping from obscurity. No? How about Ethereum? It started as a Bitcoin clone with added features and is now on track to surpass it. There are thousands of similar Bitcoin clones out there. And more are undoubtedly on the way. The most miraculous thing is the number of celebrities, politicians and corporations who have thus far resisted the urge to create and promote their own.
  - taolegal 4y ago
    That's not cloning bitcoin. It's the network & blockchain that's important & that's physically impossible to clone at this point without a time machine.
    - jqpabc123 4y ago
      The only thing that hasn't been cloned is the trademark name "Bitcoin".

dabedee 4y ago

The author seems to argue that the Bitcoin hard cap (i.e. the 21M limit) is as inalienable as a law of nature. But it's not. Even if it's in the code itself, it's made by humans who can build consensus around a change in the future. The decentralized nature of Bitcoin might help prevent or delay this, but if there are sufficient incentives for a majority of miners/contributors, changes to rules could occur.

asah 4y ago
Sure in theory. In practice, the kinds of people attracted to Bitcoin strongly correlate with this message, and attempts to dilute BTC would likely result in a fork instead. Besides, what's the point? Satoshis (sats) are 100 millionth of a bitcoin, stop just do business in sats if BTC is too large for your transaction...
- lucozade 4y ago
  It may well fork under those circumstances but we've seen, multiple times, that a fork isn't terminal. You just usually end up with a dominant fork and the others tend to wither. So the real question is, would the dominant fork be the one that ends mining or the one that continues it? And that would likely be answered by which the the power brokers in Bitcoin-land will support ie the mining pools. So, for your contention to be correct, we would have to believe that the mining pools would willingly give up their source of power because of Satoshi's vision. It's not impossible for that to happen, of course. But the whole history of just about everything suggest that it's not the most likely outcome.
  - cesarb 4y ago
    > So the real question is, would the dominant fork be the one that ends mining or the one that continues it? And that would likely be answered by which the the power brokers in Bitcoin-land will support ie the mining pools. That's a common misconception, but the ones who matter to decide which will be the dominant fork are the so-called "economic nodes", not miners. Nowadays, the most important "economic nodes" seem to be the exchanges (after all, Bitcoin is useless unless you can convert it to something else, be it goods, services, or fiat money, and the later seems to be its most important use nowadays).

redeyedtreefrog 4y ago

Electricity isn’t a magical thing given to us by the high priests of the Ministry of Electrons. Take a magnet, take a copper wire, and voilà! You have electricity. Anyone can generate electricity at all times, as long as they are doing the required work. Electricity is here to stay precisely because it is not brought about by authority. It is a natural phenomenon, brought about by physical interaction. There is no central authority in charge when it comes to making it. My God is this drivel what passes for "intelligent" pro-bitcoin writing? Nation states don't control the existence of electricity, nation states also don't control the existence of bitcoin, therefore bitcoin is as important and fundamental as electricity. Gotcha.

ashwagary 4y ago
If so, why are many people ok with the notion of the state dictating how electricity should be used?
- kingofheroes 4y ago
  Because the infrastructure that is needed to both generate and distribute electricity (thus making it "usable") is often partially or fully state funded. I think thats the case even in the United States; while power companies are privately owned, the cost of building new electrical infrastructure is often subsidized by city and/or state governments.
  - RestlessMind 4y ago
    So if I were to buy a few acres in a cheap place in the Southwest (AZ or NM or West TX), install solar panels to generate electricity and set up rest of the machinery (ASICs, internet fiber) to mine bitcoins, you won't have a problem with that?
    - ashwagary 4y ago
      I think so, proof of work is ideal for the development and cultivation of stranded energy.

stall84 4y ago

I love how there's a superscript-citation added to the line "Is the rapture of the nerds imminent..."

drdrek 4y ago

But why is Bitcoin or Blockchain a prerequisite to scarcity? Can you not use any other technological method? why do you need consensus validation for validating scarcity? (Spoiler, you don't) And if you want consensus validation why do you need blockchains? (Spoiler, you don't) Its always the "What" about Cryto, never the "Why". Can Bitcoin be useful for something? Yeah, maybe, I guess. Is it Digital Scarcity? Probably not.

jqpabc123 4y ago
Blockchain is just a novel, decentralized accounting method. Interesting --- but definitely not required. How the accounting is done is really just an arbitrary background aspect of a functioning currency. Don't take my word for it --- just ask any crypto scammer who doesn't know or care about the technical details of blockchain.

thom_ 4y ago

No it isn’t. Ok sure, there are only so many bitcoins that can be mined. But - there’s 50k alt currencies that have fallen out of the sky, most also with scarcity. Why are they worthless while bitcoin holds value?. In fact the scarcity in cryptocurrency isn’t the tokens at all rather the collective expendable income of gullible users. They’re for the most part running a net loss, and even those ahead on paper need to go through a regulated exchange for a payout with all the questions that come with that giant pile of money.

nonch0n 4y ago

The OP compares digital reality to physical reality, but digital reality exists at the behest of physical institutions that can and do limit it. There's no comparing the existence of matter and chemistry and the laws of physics with bits or bytes on our global internet infrastructure. China has successfully limited Bitcoin with its ban. Bitcoin's value (its exchange rate with other currencies) is affected by China limiting its citizens' ability to host a node and exchange or hold Bitcoin the Chinese sovereign territory. The author is correct that there isn't a centralized entity controlling Bitcoin as with a central bank and fiat currency, but in this case there's still a group of ISPs and governments that together can influence Bitcoin "printing" in many ways.

olalonde 4y ago
They can perhaps influence its value by reducing its utility (e.g. by declaring it illegal) but they cannot "print" more supply.