4 ms·

Care to elaborate on that?

by blangk 3y ago

cycrutchfield 3y ago
Want me to dumb it down even further?
plorg 3y ago
By analogy it must be good if I just start burning gasoline in a pit because my increased demand will cause oil producers to invest in more drilling and refinery capacity. In fact, if we were just burning gasoline in pits in the 70s we wouldn't have had an energy crisis because by burning gasoline in pits we would have created the market conditions necessary for the oil companies to build more domestic wells and refinery capacity. It's perfect, because when we actually _did_ need gasoline for cars we could have just pitched the guys burning gasoline in pits some cash, they would have stopped, and we would have had enough gasoline for everyone.
- cycrutchfield 3y ago
  “Ah!”, the Crypto-Kid exclaimed, “But here’s where you’re wrong! By burning the gasoline they created SmokeCoins, which are a Store Of Value, therefore burning gasoline in a pit is not wasteful at all!” “But what happens if they don’t burn the gasoline in the first place, don’t the same SmokeCoins just get generated somewhere else then? So what net value is created by burning the gasoline?” The Crypto-Kid’s peanut brain implodes while considering this thought.
- scotty79 3y ago
  This is an ok analogy if producing more gasoline is something good for us. Which it is not. Conversely extending power generation capacity, especially with means that have highly varying production rates that require ability to quickly vary load is exactly what humanity needs right now, and fast.
  - plorg 3y ago
    The extent to which adding any mining data center is "good", even assuming that Bitcoin is "good" is incredibly abstract. Yes, it may make that one miner more money, but it creates no new net economic value, its only value is making the blockchain more secure. Is it good to make the security of the blockchain dependent on electricity demand? There are plenty of better ways to increase demand that are more useful than burning it for fungible security. For example you can build datacenters that can shift load by time and location based on the state of the power grid. Google and Facebook already do this. You can build battery plants which address the problem directly. Electric car charging should be incredibly complementary to demand response. Posing Bitcoin as a solution to generation problems assumes that the biggest problem is finding ways to use energy, which is absolutely not the case. It's a solution in search of a problem.
    - scotty79 3y ago
      What bitcoins are good for is funneling money from people who have money and no better ideas what to do with it or incentives to do anything with it, towards people who want to build renewables even though, their output at times already has a negative price in absence of bitcoin mining. Sure, in totalitarian economy there could be a lot of smarter ways to utilize resources and opportunities, but we don't have such economy for very good reasons, so in our economy, bitcoins are the simplest possible mechanism (technologically, politically and economically) that facilitates this funneling and we are lucky it already exists. The only problem is the cost of new mining hardware, but with Moore's law dying out and fabs overbuilt because of the pandemic shortages I think new, more efficient generations of mining hardware should come out at longer intervals and mining with few years old hardware should be feasible if you are powering it with renewables at peak production times.

Care to elaborate on that?

by blangk 3y ago

Care to elaborate on that?

cycrutchfield 3y ago

Want me to dumb it down even further?

plorg 3y ago

By analogy it must be good if I just start burning gasoline in a pit because my increased demand will cause oil producers to invest in more drilling and refinery capacity. In fact, if we were just burning gasoline in pits in the 70s we wouldn't have had an energy crisis because by burning gasoline in pits we would have created the market conditions necessary for the oil companies to build more domestic wells and refinery capacity. It's perfect, because when we actually _did_ need gasoline for cars we could have just pitched the guys burning gasoline in pits some cash, they would have stopped, and we would have had enough gasoline for everyone.

cycrutchfield 3y ago
“Ah!”, the Crypto-Kid exclaimed, “But here’s where you’re wrong! By burning the gasoline they created SmokeCoins, which are a Store Of Value, therefore burning gasoline in a pit is not wasteful at all!” “But what happens if they don’t burn the gasoline in the first place, don’t the same SmokeCoins just get generated somewhere else then? So what net value is created by burning the gasoline?” The Crypto-Kid’s peanut brain implodes while considering this thought.
scotty79 3y ago
This is an ok analogy if producing more gasoline is something good for us. Which it is not. Conversely extending power generation capacity, especially with means that have highly varying production rates that require ability to quickly vary load is exactly what humanity needs right now, and fast.
- plorg 3y ago
  The extent to which adding any mining data center is "good", even assuming that Bitcoin is "good" is incredibly abstract. Yes, it may make that one miner more money, but it creates no new net economic value, its only value is making the blockchain more secure. Is it good to make the security of the blockchain dependent on electricity demand? There are plenty of better ways to increase demand that are more useful than burning it for fungible security. For example you can build datacenters that can shift load by time and location based on the state of the power grid. Google and Facebook already do this. You can build battery plants which address the problem directly. Electric car charging should be incredibly complementary to demand response. Posing Bitcoin as a solution to generation problems assumes that the biggest problem is finding ways to use energy, which is absolutely not the case. It's a solution in search of a problem.
  - scotty79 3y ago
    What bitcoins are good for is funneling money from people who have money and no better ideas what to do with it or incentives to do anything with it, towards people who want to build renewables even though, their output at times already has a negative price in absence of bitcoin mining. Sure, in totalitarian economy there could be a lot of smarter ways to utilize resources and opportunities, but we don't have such economy for very good reasons, so in our economy, bitcoins are the simplest possible mechanism (technologically, politically and economically) that facilitates this funneling and we are lucky it already exists. The only problem is the cost of new mining hardware, but with Moore's law dying out and fabs overbuilt because of the pandemic shortages I think new, more efficient generations of mining hardware should come out at longer intervals and mining with few years old hardware should be feasible if you are powering it with renewables at peak production times.