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To understand why people don't find this compelling (and are sick of hearing it), you probably need to first understand that people consider Bitcoin's profitabi

To understand why people don't find this compelling (and are sick of hearing it), you probably need to first understand that people consider Bitcoin's profitability a false economy. In other words: your scenario is identical to GP's except that someone is paying you to run your AC while you aren't at home, rather than just doing it because you can. The logical question is then to ask why they're paying you to run your AC, and that is the uncompelling part: it's not clear that we should be paying people to burn energy to crack hashes.

ruined 3y ago
and this is where it comes to a point: what can you possibly change about the world to deincentivize that, and make it uninteresting? if you want a transition away from carbon, you have to solve that question.
- p1mrx 3y ago
  > what can you possibly change about the world to deincentivize that https://en.wikipedia.org/wiki/Carbon_fee_and_dividend https://en.wikipedia.org/wiki/Carbon_fee_and_dividend This would remove the incentive to mine crypto on any grid that is coincidentally emitting carbon.
  - ephbit 3y ago
    The carbon fee would lower and possibly sometimes completely remove the incentive to mine Bitcoin on a grid that is coincidentally emitting CO2, when the current electricity generation mix has a large share of fossil generation. As most (if not all) uses of electricity, Bitcoin mining is sensitive to the electricity price. Introducing a a carbon tax / carbon dividend, doesn't magically make any particular use of electricity economically unviable all of the time. It just pushes the cost equilibria to different values.
thereisnospork 3y ago
> it's not clear that we should be paying people to burn energy to crack hashes. In particular when we artificially increase the energy require to crack said hashes. If hash-cracking was, for instance, bid out on a competitive marketplace[0] instead of limited by difficulty bitcoin would need far less power to perform its 'role' as a 'currency'. [0]Want to mine a block? Bid for the mining rights (in USD or BTC).
- randomNumber7 3y ago
  The point of bitcoin is, that you would need to burn the same amount of energy to fake the blockchain. Im not saying this is good, but its the way it works...
wharvle 3y ago
People’d find it outrageous if beanie baby collectors were sacrificing 2% of US food production on altars to their beanie babies, because doing so made the beanie babies more valuable to other collectors. Even if some of the collectors were growing their own food for the purpose, et c, et c—it’d still bother a lot of people. Maybe most people.
yrral 3y ago
I'm not arguing whether the use of electricity is compelling or not. I'm arguing that the unique energy demand characteristics of bitcoin mining allow it to support building renewable energy projects and balance electricity costs and thus it has effective positive contribution to the environment. Whether it's used to mine bitcoins or cool a house is irrelevant, except that the demand for cooling a house is location and time sensitive, whereas bitcoin mining is cost sensitive. This flexible consumption gives it unique properties that support deployment of renewables. Please explain what you mean by "false economy". Is the economy for skins in a game you don't care about "false" because you don't like that game?
- woodruffw 3y ago
  > except that the demand for cooling a house is location and time sensitive Not if someone paid me to do it. That's the point. If there was money in hauling ACs around the US and running them on the cheapest electricity the local market could provide, we'd have exactly the same false economy. (Besides: the GP points out that Bitcoin appears to be sufficiently profitable on NYC electricity prices, which are not cheap. They also appear to be sufficiently profitable on "retiring coal plant" prices[1], which undermines any kind of unique incentivization of renewals argument.) [1]: https://www.indystar.com/story/news/environment/2023/12/05/crypto-mine-comes-to-indiana-and-major-polluting-coal-plant-stays-open/70992299007/ https://www.indystar.com/story/news/environment/2023/12/05/c...
  - ephbit 3y ago
    > Not if someone paid me to do it. That's the point. If there was money in hauling ACs around the US and running them on the cheapest electricity the local market could provide, we'd have exactly the same false economy. How is such a purely hypothetical scenario useful as an argument? It's like saying: "If nobody ever did physical harm to anybody, we could get rid of some part of law enforcement." Not useful because it's simply not the case and very likely never will be. > They also appear to be sufficiently profitable on "retiring coal plant" prices[1], which undermines any kind of unique incentivization of renewals argument. Bitcoin mining incentivizes any kind of generation that cannot be consumed by a more profitable process or use case. If the price of electricity on a mostly fossil powered grid is low enough, then Bitcoin mining will be profitable. Same goes for a mostly renewables powered grid. There are two ways, politics can handle this: A) Impose a high enough carbon tax on fossil generation. This will lead to higher electricity prices for the fossil grid, possibly making Bitcoin mining unprofitable. But it will also make other uses of electricity unviable. B) Regulate that Bitcoin mining is prohibited under certain conditions (location, grid generation mix, ...) B doesn't appear wise to me. Since it's highly subjective what kind of energy/electricity use one deems useful/legitimate. I personally find the use of a > 100 horsepower private car or a private jet totally illegitimate and would welcome regulation that drastically hinders these absurd uses of energy.
jonahbenton 3y ago
The why requires a few steps. Money is just another technology. As a technology it has existed in various forms over thousands of years. Technologies see continual innovation and change, with various actors and various motives influencing their use, function, reach. Governments of various forms are our current best method- govern-ance- for managing human-scale assets, resources, and technologies with collective purpose and implication. Moneys- currencies- as a technology are one of those human assets owned and managed by governments, like land, and other resources. There are over 200 distinct currencies in the world. The mechanism for this management is based on the notion of a ledger- the record of balances, of debts, of interest, and the creation- inflation- of money supply in the context of that management. Most governments are poor at this management when measured by how well their implementation of this technology that is money serves the needs of most of their populations. Governments themselves- both "democratic" and non- in their current form are fragile and vulnerable, with the powers of governments utilized against portions of theirs and other populations. BTC is a technology, a cryptographically-secured system of record- a ledger- that can be used as a money. It is not under the control of an existing government. By collective agreement of its participants, a complex balance of users playing different roles with different incentives and risks, the rate of creation of assets recorded there is managed to a low level of inflation. As such, as a technology utilized for money, it is a stable "store of value" in contrast to the moneys supplied by literally every government. The ledger, the system of record can be preserved- secured- if and only if it is too expensive for attackers to change it. The turning of energy into hash minting is the security for that system of record. That's it. Adopting a mindset where the above argument takes hold involves a kind of leap of faith. It is a belief. Sure, a religion. The game theory/mechanism design behind BTC is a true innovation, the first demonstrated solution to the Byzantine Generals problem. There is an argument- won't people stop believing in it? Maybe? I would suggest evaluating that argument against the lifespans of other innovative beliefs. Is it something that comes and goes, or is it like the eye, an invention of evolution that solves a specific problem and appears distinctly and repeatedly in different organisms once they hit certain levels of complexity. Cheers.
- lolc 3y ago
  One thing I don't get about the "store of value" belief in Bitcoin is: why specifically this chain? It has only network effects going for it. Mindshare is a fickle thing.

ruined 3y ago

and this is where it comes to a point: what can you possibly change about the world to deincentivize that, and make it uninteresting? if you want a transition away from carbon, you have to solve that question.

p1mrx 3y ago
> what can you possibly change about the world to deincentivize that https://en.wikipedia.org/wiki/Carbon_fee_and_dividend https://en.wikipedia.org/wiki/Carbon_fee_and_dividend This would remove the incentive to mine crypto on any grid that is coincidentally emitting carbon.
- ephbit 3y ago
  The carbon fee would lower and possibly sometimes completely remove the incentive to mine Bitcoin on a grid that is coincidentally emitting CO2, when the current electricity generation mix has a large share of fossil generation. As most (if not all) uses of electricity, Bitcoin mining is sensitive to the electricity price. Introducing a a carbon tax / carbon dividend, doesn't magically make any particular use of electricity economically unviable all of the time. It just pushes the cost equilibria to different values.

thereisnospork 3y ago

> it's not clear that we should be paying people to burn energy to crack hashes. In particular when we artificially increase the energy require to crack said hashes. If hash-cracking was, for instance, bid out on a competitive marketplace[0] instead of limited by difficulty bitcoin would need far less power to perform its 'role' as a 'currency'. [0]Want to mine a block? Bid for the mining rights (in USD or BTC).

randomNumber7 3y ago
The point of bitcoin is, that you would need to burn the same amount of energy to fake the blockchain. Im not saying this is good, but its the way it works...

wharvle 3y ago

People’d find it outrageous if beanie baby collectors were sacrificing 2% of US food production on altars to their beanie babies, because doing so made the beanie babies more valuable to other collectors. Even if some of the collectors were growing their own food for the purpose, et c, et c—it’d still bother a lot of people. Maybe most people.

yrral 3y ago

I'm not arguing whether the use of electricity is compelling or not. I'm arguing that the unique energy demand characteristics of bitcoin mining allow it to support building renewable energy projects and balance electricity costs and thus it has effective positive contribution to the environment. Whether it's used to mine bitcoins or cool a house is irrelevant, except that the demand for cooling a house is location and time sensitive, whereas bitcoin mining is cost sensitive. This flexible consumption gives it unique properties that support deployment of renewables. Please explain what you mean by "false economy". Is the economy for skins in a game you don't care about "false" because you don't like that game?

woodruffw 3y ago
> except that the demand for cooling a house is location and time sensitive Not if someone paid me to do it. That's the point. If there was money in hauling ACs around the US and running them on the cheapest electricity the local market could provide, we'd have exactly the same false economy. (Besides: the GP points out that Bitcoin appears to be sufficiently profitable on NYC electricity prices, which are not cheap. They also appear to be sufficiently profitable on "retiring coal plant" prices[1], which undermines any kind of unique incentivization of renewals argument.) [1]: https://www.indystar.com/story/news/environment/2023/12/05/crypto-mine-comes-to-indiana-and-major-polluting-coal-plant-stays-open/70992299007/ https://www.indystar.com/story/news/environment/2023/12/05/c...
- ephbit 3y ago
  > Not if someone paid me to do it. That's the point. If there was money in hauling ACs around the US and running them on the cheapest electricity the local market could provide, we'd have exactly the same false economy. How is such a purely hypothetical scenario useful as an argument? It's like saying: "If nobody ever did physical harm to anybody, we could get rid of some part of law enforcement." Not useful because it's simply not the case and very likely never will be. > They also appear to be sufficiently profitable on "retiring coal plant" prices[1], which undermines any kind of unique incentivization of renewals argument. Bitcoin mining incentivizes any kind of generation that cannot be consumed by a more profitable process or use case. If the price of electricity on a mostly fossil powered grid is low enough, then Bitcoin mining will be profitable. Same goes for a mostly renewables powered grid. There are two ways, politics can handle this: A) Impose a high enough carbon tax on fossil generation. This will lead to higher electricity prices for the fossil grid, possibly making Bitcoin mining unprofitable. But it will also make other uses of electricity unviable. B) Regulate that Bitcoin mining is prohibited under certain conditions (location, grid generation mix, ...) B doesn't appear wise to me. Since it's highly subjective what kind of energy/electricity use one deems useful/legitimate. I personally find the use of a > 100 horsepower private car or a private jet totally illegitimate and would welcome regulation that drastically hinders these absurd uses of energy.

jonahbenton 3y ago

The why requires a few steps. Money is just another technology. As a technology it has existed in various forms over thousands of years. Technologies see continual innovation and change, with various actors and various motives influencing their use, function, reach. Governments of various forms are our current best method- govern-ance- for managing human-scale assets, resources, and technologies with collective purpose and implication. Moneys- currencies- as a technology are one of those human assets owned and managed by governments, like land, and other resources. There are over 200 distinct currencies in the world. The mechanism for this management is based on the notion of a ledger- the record of balances, of debts, of interest, and the creation- inflation- of money supply in the context of that management. Most governments are poor at this management when measured by how well their implementation of this technology that is money serves the needs of most of their populations. Governments themselves- both "democratic" and non- in their current form are fragile and vulnerable, with the powers of governments utilized against portions of theirs and other populations. BTC is a technology, a cryptographically-secured system of record- a ledger- that can be used as a money. It is not under the control of an existing government. By collective agreement of its participants, a complex balance of users playing different roles with different incentives and risks, the rate of creation of assets recorded there is managed to a low level of inflation. As such, as a technology utilized for money, it is a stable "store of value" in contrast to the moneys supplied by literally every government. The ledger, the system of record can be preserved- secured- if and only if it is too expensive for attackers to change it. The turning of energy into hash minting is the security for that system of record. That's it. Adopting a mindset where the above argument takes hold involves a kind of leap of faith. It is a belief. Sure, a religion. The game theory/mechanism design behind BTC is a true innovation, the first demonstrated solution to the Byzantine Generals problem. There is an argument- won't people stop believing in it? Maybe? I would suggest evaluating that argument against the lifespans of other innovative beliefs. Is it something that comes and goes, or is it like the eye, an invention of evolution that solves a specific problem and appears distinctly and repeatedly in different organisms once they hit certain levels of complexity. Cheers.

lolc 3y ago
One thing I don't get about the "store of value" belief in Bitcoin is: why specifically this chain? It has only network effects going for it. Mindshare is a fickle thing.