6 ms·

Fool's Gold 2.0: The siren song of Bitcoin

71 points by thinkcomp 13y ago

beambot 13y ago
> Yet this is exactly how Bitcoin works: you are rewarded with new coins once your computer has consumed a certain amount of electricity (measured by the complexity of computing hashes of data, which takes time). Worse yet, the amount of electricity required to be wasted to earn a reward predictably increases, which means that the more Bitcoins one wants, the more one has to waste. Couldn't the same be said of gold? Mining and extraction are resource (energy) intensive and yield a result (gold) that is less than it's practical intrinsic value (eg. for industrial purposes).
- ChuckMcM 13y ago
  Of course it could. Except there aren't any industrial uses for BitCoin yet :-) Understand that Aaron has a vested interest here (the whole FastCash thing) and so any chance he gets to complain about BitCoin, he does. Nothing he says in the article is false, except that it is also not "correct." True anything can be used as a marker for value, from notched sticks in Egyptian times, to rocks on an island, to BitCoin. As long as a community exists which agree on their relative value, the marker continues to work as a marker. And the more difficult it is to counterfeit, the better marker it is. So far BitCoin meets that criteria and so it is not 'fools gold.' He also missed the part where someone cracks your 256 bit key to your wallet and steals all your BitCoin. There is an interesting cryptography problem/question which looks at the cost of mining new BitCoins in comparison to the cost of attempting to guess BitCoin wallet keys.
  - Phlarp 13y ago
    >There is an interesting cryptography problem/question which looks at the cost of mining new BitCoins in comparison to the cost of attempting to guess BitCoin wallet keys. http://directory.io/1 http://directory.io/1
  - tlrobinson 13y ago
    Except there aren't any industrial uses for BitCoin yet I like the notion that the intrinsic value of bitcoins are as entries in a global distributed ledger (or even more fundamentally, timestamps in a distributed timestamp server) A Satoshi is the small unit you can account for in that ledger, so there are actually 2,100,000,000,000,000 of them, making the intrinsic value way less than the extrinsic value, but that's true of gold as well.
- jadeddrag 13y ago
  The author is forgetting that the process of mining is not just to receive the block reward, but to support the entire bitcoin network. If there were no miners, no new transactions would get verified and bitcoin would not be secure. So it's wrong, and probably disingenuous for him to state that mining is a waste of electricity.
  - wlievens 13y ago
    Am I correct when I say you can view it as distributed banking, where the miners are the distributed bank, and the mined btc are the fee you get for supporting the system - being the bank?
    - jadeddrag 13y ago
      I think that's one correct way to think about it.
- thinkcomp 13y ago
  No. If you want to mine x gold today, which will cost you y in resources, you do not predictably have to spend 1.5y or 2y tomorrow to get the same x.
  - gw 13y ago
    This is not true. Like any resource, gold tends to cost more to extract from the earth over time. As deposits diminish, we must look elsewhere and settle for gold ore with fewer parts per million. This requires more expensive technology and newer techniques to be developed. Hence, it predictably will cost more to mine gold in the future than it does today.
- Lambdanaut 13y ago
  Yes. Also, "Waste" is a subjective term. Your computer is solving the problem of trust between humans. That's not a waste to me. It's certainly less wasteful than the energy that goes into hosting servers for popular MMORPGs.
  - thinkcomp 13y ago
    As the rest of the essay indicates, the problem of trust is hardly "solved." I'll grant that it's an attempt to solve the problem, but the end result is Ponzi-scheme-level risk of losing everything for a given holder of value in Bitcoin.
- InclinedPlane 13y ago
  Not really, the vast majority of gold being mined goes to some use other than just being a store of value. 2/3 of gold mined goes into Jewelry. About 1/9th of gold mined goes to dentistry. Some of the remainder is put to industrial use.
pfraze 13y ago
He's trying to tie the value of bitcoin to the forced syncing process - "bitcoin represents spent electricity." That's just not right. In reality, bitcoin represents agreement by parties to honor debts in its ledger. Bitcoin's backing is the information system, not the resources that go into it. The value is tied to people's faith in the currency and ledger system. EDIT - other criticisms: - He criticizes energy waste, but doesn't compare it to the energy use of existing financial systems. - He points at the risk of owning wallets without recognizing that this should be a diminishing risk as better software develops.
- thinkcomp 13y ago
  I never actually wrote the phrase you have above in quotes. Regardless, tracking debts and using resources are not mutually exclusive as you suggest.
  - pfraze 13y ago
    I wasnt trying to quote directly, but to clarify, Greenspan (you?) wrote: At its core, Bitcoin is a proxy for another commodity we are all familiar with: electricity You're right that tracking debts (or, to be more correct per cpervica's comment, tracking balances) and using resources are not mutually exclusive, but I don't think that resource usage is the scarce resource that bitcoin represents, as Greenspan (you?) suggests. I think the scarce resource is a set of values contained in the bitcoin ledger, and the mining needed to change their ownership is (as the second question puts it) an externality.
    - thinkcomp 13y ago
      (I am Aaron.) I disagree.
- cperciva 13y ago
  debts in its ledger Except there are no debts, since there are no debtors. The ledger is a registry of ownership, not debts.
codex 13y ago
The author has a huge conflict of interest: FaceCash. Therefore, his opinions are nearly worthless.
- tzs 13y ago
  People with a conflict of interest are often the best to criticize something, as they have a bigger incentive to do a good and thorough job. Treating them with heightened skepticism is good, but dismissing them out of hand is bogus.
  - woah 13y ago
    Except most of what he says is opinion (not necessarily an invalid opinion, but still).
  - aric 13y ago
    ...and often the worst. Greenspan's criticism of Bitcoin is reminiscent of the same pontification he had about Facebook. It competed with his houseSYSTEM. Later, in an open letter for publicity, he advised Zuckerberg to either keep Facebook a closed network, exclusive only to students and faculty of an educational industry (.edu addresses), or to sell to Yahoo at their bid. That's interesting. Then he hawked CommonRoom. I had a level of disgust over Facebook's cavalier attitude with privacy and security that Greenspan seemed to have shared. Competition? Great. Bring on the competition. Criticism? Yes. Let's hear everything. However, the way it was presented as a whole didn't command credibility. I stopped reading his criticism of Bitcoin when it was clear he didn't understand Bitcoin. "Processing" might be a more digestible term to him, rather than "mining." There are valid criticisms of Bitcoin. This has been the case for 5 years. So too, there are valid criticisms about anything. Bitcoin was never intended to be everything to everyone. It will likely remain relegated to a subset of people. Knowing the state of security and the virus-prone systems of today, I wouldn't want the average person to use bitcoin beyond light money. It's risky. Beyond this, bitcoin's positives are entirely purposeful to enough people to trump its negatives. Being different and useful is rare. Being both and decentralized is a true marvel. Fool's Gold 2.0? Nothing is fake about bitcoin. Bitcoin never claims to be what you want it to be.
- 13y ago
humbledrone 13y ago
Yet another failure to understand the purpose of mining. The energy is NOT being wasted. In fact, the energy spent mining is the exact thing that makes the Bitcoin network function. The energy is being converted into trust. The more energy that is spent on mining, the more difficult it will be for a well-capitalized entity to perform an attack on the network. Aaron Greenspan, repeat after me: Mining energy is not wasted. Mining energy is not wasted. Mining energy is not wasted. Now, it is an open question as to whether the cost of running the Bitcoin network is worthwhile. However, for the moment, it clearly is. The fact that some miners can turn even a small profit on the Bitcoins they're rewarded with demonstrates that the utility they provide has positive market value. Of course at some point it may be that it costs substantially more to mine new Bitcoins than they are worth on the market. If this happens soon, Bitcoin will likely fail. If it happens later, it's possible that transaction fees could prop up the network, but that's purely speculative. Another thing to consider when assessing the energy efficiency of the Bitcoin network is how it compares to the efficiency of existing currencies. Cash has a physical component and must be manufactured. Electronic fiat is backed by huge, complex, and expensive networks. Visa's datacenters are not free. Keep in mind that credit card transactions typically have a transaction cost of 3%, which in some way represents the cost of operating the Visa network. 3% is kind of a staggeringly huge number, and off the cuff I expect that's actually quite a bit higher than the total Bitcoin network cost to volume ratio...
- cma 13y ago
  This isn't a judgment on bitcoin, but on your logic: The fact that some farmers can turn even a small profit on the tulips they're rewarded with demonstrates that the utility they provide has positive market value.
  - humbledrone 13y ago
    Well, what other measure would you use? The markets did, rather quickly, correct themselves with regards to tulips. There was a brief window of mania, but for the last several hundred years the tulip market seems to have been pretty reasonable. It's just not possible at this time to know whether Bitcoin provides enough value to succeed in the long term. But to survive in the long term, it has to survive in the short term, and our best measure of short term utility is the market. Again, if the market crashed far below the mining costs, then I would view that as a demonstration of the lack of Bitcoin's utility. And that very well could happen! But it hasn't yet.
Estragon 13y ago
Actually, I agree with him, but it's funny how these articles always pile on when the price is crashing.
- NotOscarWilde 13y ago
  By funny, you mean intentional, right? I am fairly sure there are parties trying to upvote and/or post these articles to get BTC price up or down, whatever their need is. Currently, it's clearly "down" so they can buy again.
  - thinkcomp 13y ago
    I actually had no idea that the price was crashing until after I posted it. I've been writing it for a few days. And I have no stake one way or the other.
- fat0wl 13y ago
  man it's because when the price is not crashing its all brainwashy hype. For the record, i talk crap about Bitcoin even when it's on the upswing but you just get downvoted a ton by people who are all siked on investing. btw, did anybody else get really disappointed after clicking the link and realizing it was Aaron Greenspan not Alan? I would love for legit economic analysts to take a crack at Bitcoin but so far most have dismissed it (I saw some figure like 87% and no I am not going to bother backtracking to find my source sorry). I wish somebody with some real knowledge of world economies/currencies would drop some knowledge but they seem to either A) Not care (I suspect because even tho BTC is at the forefront of the tech world, it is a trinket to the aged eyes of those who have spent their lives watching the fluctuations of the world economy) B) Not wish to comment because it's a fun experiment to watch so why ruin your rep by seeming like an old fuddy-duddy when you could just enjoy the view When I told my father (very successful attorney guy) about the Senate hearing he was like "Of course they're interested in it. If the tech works, why wouldn't they want to use it? But yeah they probably will want to strip it and start over without the dispersements the founders put in". Seems like about the most reasonable off-hand assessment I've heard from a non-techie business type. The gov has no interest in protecting black market holdings and redistributed wealth pulled out of thin air back to your original point -- yea i think it's tough for negative press to get anyone's attention in the midst of the $$ signs soaring. It's like a NYE celebration for the speculators. it's why I believe that Bitcoin "news" isn't really "news" -- it's just some articles characterizing the current hype with a bit of random theory thrown in. But I think as Mr. Aaron Greenspan aptly points out, a sound offline (not looking at the $$ signs) theoretical analysis should prove that it's not something worth the interest regardless of how far the price climbs
mappum 13y ago
The author seems pretty hung up on the fact that mining consumes electricity, but let's look at the numbers. Miners consume an estimated 108,619 megawatt hours per day (according to https://blockchain.info/stats https://blockchain.info/stats). This is actually a very high estimate as most miners have switched to ASICs and are consuming orders of magnitude less power, but let's use it anyway. This would add up to about $16m spent per day on electricity. In 2011, the United States alone consumed 367 million gallons of gasoline daily (according to http://www.eia.gov/tools/faqs/faq.cfm?id=23&t=10 http://www.eia.gov/tools/faqs/faq.cfm?id=23&t=10). At an average gas price of $3.576 / gallon (http://www.eia.gov/dnav/pet/pet_pri_gnd_dcus_nus_a.htm http://www.eia.gov/dnav/pet/pet_pri_gnd_dcus_nus_a.htm), this would be $1.3b spent per day on gas. Pretty much everything on Earth is going to consume power, but I don't think Bitcoin mining consumes enough to worry about.
- makomk 13y ago
  Of course, if Bitcoin was widely adopted, the price would go up, meaning that far more people would mine it and far more energy would be used in mining. The only reason energy consumption from mining is that low right now is because Bitcoin is incredibly niche.
tlrobinson 13y ago
Says the guy with a potentially competing product (FaceCash) and also happens to be suing Coinbase and CoinLab, among others.
- fragsworth 13y ago
  Until recently, I have never seen such extraordinary bias in written work in my life. Almost every time you see someone writing about Bitcoin, they are one-sided to the point of absurdity. The relentlessly negative articles (like this Aaron Greenspan piece) gives me the impression that the author has a spiteful resentment of those who bought early, and wants to see it crash to $0 so he can be right in the end and tell everyone "I told you so". On the other hand, many unquestioningly positive writings (which we also see plenty of) are hugely influenced by the fact that the authors invested in Bitcoin and want to see it rise.
timberlane 13y ago
It seems that most comments posts are either pro bit-coin or anti bit-coin, but both sides seems to make wrong arguments based on a flawed thinking of mining. A fixed amount of bit coins are mined (on average) per unit time. Thus, how much work it takes to mine a coin depends solely on the number of miners. Econ 101 theory tells us that the aggregate costs of the miners will equal their aggregate rewards. So, the total cost of mining (hardware, electricity, people's time who work on it) will equal the reward. That's all that's happening with mining. No for either side to complicate it and make it seem like more is there.

71 points by thinkcomp 13y ago

> Yet this is exactly how Bitcoin works: you are rewarded with new coins once your computer has consumed a certain amount of electricity (measured by the complexity of computing hashes of data, which takes time). Worse yet, the amount of electricity required to be wasted to earn a reward predictably increases, which means that the more Bitcoins one wants, the more one has to waste. Couldn't the same be said of gold? Mining and extraction are resource (energy) intensive and yield a result (gold) that is less than it's practical intrinsic value (eg. for industrial purposes).

ChuckMcM 13y ago
Of course it could. Except there aren't any industrial uses for BitCoin yet :-) Understand that Aaron has a vested interest here (the whole FastCash thing) and so any chance he gets to complain about BitCoin, he does. Nothing he says in the article is false, except that it is also not "correct." True anything can be used as a marker for value, from notched sticks in Egyptian times, to rocks on an island, to BitCoin. As long as a community exists which agree on their relative value, the marker continues to work as a marker. And the more difficult it is to counterfeit, the better marker it is. So far BitCoin meets that criteria and so it is not 'fools gold.' He also missed the part where someone cracks your 256 bit key to your wallet and steals all your BitCoin. There is an interesting cryptography problem/question which looks at the cost of mining new BitCoins in comparison to the cost of attempting to guess BitCoin wallet keys.
- Phlarp 13y ago
  >There is an interesting cryptography problem/question which looks at the cost of mining new BitCoins in comparison to the cost of attempting to guess BitCoin wallet keys. http://directory.io/1 http://directory.io/1
- tlrobinson 13y ago
  Except there aren't any industrial uses for BitCoin yet I like the notion that the intrinsic value of bitcoins are as entries in a global distributed ledger (or even more fundamentally, timestamps in a distributed timestamp server) A Satoshi is the small unit you can account for in that ledger, so there are actually 2,100,000,000,000,000 of them, making the intrinsic value way less than the extrinsic value, but that's true of gold as well.
jadeddrag 13y ago
The author is forgetting that the process of mining is not just to receive the block reward, but to support the entire bitcoin network. If there were no miners, no new transactions would get verified and bitcoin would not be secure. So it's wrong, and probably disingenuous for him to state that mining is a waste of electricity.
- wlievens 13y ago
  Am I correct when I say you can view it as distributed banking, where the miners are the distributed bank, and the mined btc are the fee you get for supporting the system - being the bank?
  - jadeddrag 13y ago
    I think that's one correct way to think about it.
thinkcomp 13y ago
No. If you want to mine x gold today, which will cost you y in resources, you do not predictably have to spend 1.5y or 2y tomorrow to get the same x.
- gw 13y ago
  This is not true. Like any resource, gold tends to cost more to extract from the earth over time. As deposits diminish, we must look elsewhere and settle for gold ore with fewer parts per million. This requires more expensive technology and newer techniques to be developed. Hence, it predictably will cost more to mine gold in the future than it does today.
Lambdanaut 13y ago
Yes. Also, "Waste" is a subjective term. Your computer is solving the problem of trust between humans. That's not a waste to me. It's certainly less wasteful than the energy that goes into hosting servers for popular MMORPGs.
- thinkcomp 13y ago
  As the rest of the essay indicates, the problem of trust is hardly "solved." I'll grant that it's an attempt to solve the problem, but the end result is Ponzi-scheme-level risk of losing everything for a given holder of value in Bitcoin.
InclinedPlane 13y ago
Not really, the vast majority of gold being mined goes to some use other than just being a store of value. 2/3 of gold mined goes into Jewelry. About 1/9th of gold mined goes to dentistry. Some of the remainder is put to industrial use.

pfraze 13y ago

He's trying to tie the value of bitcoin to the forced syncing process - "bitcoin represents spent electricity." That's just not right. In reality, bitcoin represents agreement by parties to honor debts in its ledger. Bitcoin's backing is the information system, not the resources that go into it. The value is tied to people's faith in the currency and ledger system. EDIT - other criticisms: - He criticizes energy waste, but doesn't compare it to the energy use of existing financial systems. - He points at the risk of owning wallets without recognizing that this should be a diminishing risk as better software develops.

thinkcomp 13y ago
I never actually wrote the phrase you have above in quotes. Regardless, tracking debts and using resources are not mutually exclusive as you suggest.
- pfraze 13y ago
  I wasnt trying to quote directly, but to clarify, Greenspan (you?) wrote: At its core, Bitcoin is a proxy for another commodity we are all familiar with: electricity You're right that tracking debts (or, to be more correct per cpervica's comment, tracking balances) and using resources are not mutually exclusive, but I don't think that resource usage is the scarce resource that bitcoin represents, as Greenspan (you?) suggests. I think the scarce resource is a set of values contained in the bitcoin ledger, and the mining needed to change their ownership is (as the second question puts it) an externality.
  - thinkcomp 13y ago
    (I am Aaron.) I disagree.
cperciva 13y ago
debts in its ledger Except there are no debts, since there are no debtors. The ledger is a registry of ownership, not debts.

codex 13y ago

The author has a huge conflict of interest: FaceCash. Therefore, his opinions are nearly worthless.

tzs 13y ago
People with a conflict of interest are often the best to criticize something, as they have a bigger incentive to do a good and thorough job. Treating them with heightened skepticism is good, but dismissing them out of hand is bogus.
- woah 13y ago
  Except most of what he says is opinion (not necessarily an invalid opinion, but still).
- aric 13y ago
  ...and often the worst. Greenspan's criticism of Bitcoin is reminiscent of the same pontification he had about Facebook. It competed with his houseSYSTEM. Later, in an open letter for publicity, he advised Zuckerberg to either keep Facebook a closed network, exclusive only to students and faculty of an educational industry (.edu addresses), or to sell to Yahoo at their bid. That's interesting. Then he hawked CommonRoom. I had a level of disgust over Facebook's cavalier attitude with privacy and security that Greenspan seemed to have shared. Competition? Great. Bring on the competition. Criticism? Yes. Let's hear everything. However, the way it was presented as a whole didn't command credibility. I stopped reading his criticism of Bitcoin when it was clear he didn't understand Bitcoin. "Processing" might be a more digestible term to him, rather than "mining." There are valid criticisms of Bitcoin. This has been the case for 5 years. So too, there are valid criticisms about anything. Bitcoin was never intended to be everything to everyone. It will likely remain relegated to a subset of people. Knowing the state of security and the virus-prone systems of today, I wouldn't want the average person to use bitcoin beyond light money. It's risky. Beyond this, bitcoin's positives are entirely purposeful to enough people to trump its negatives. Being different and useful is rare. Being both and decentralized is a true marvel. Fool's Gold 2.0? Nothing is fake about bitcoin. Bitcoin never claims to be what you want it to be.
13y ago

humbledrone 13y ago

Yet another failure to understand the purpose of mining. The energy is NOT being wasted. In fact, the energy spent mining is the exact thing that makes the Bitcoin network function. The energy is being converted into trust. The more energy that is spent on mining, the more difficult it will be for a well-capitalized entity to perform an attack on the network. Aaron Greenspan, repeat after me: Mining energy is not wasted. Mining energy is not wasted. Mining energy is not wasted. Now, it is an open question as to whether the cost of running the Bitcoin network is worthwhile. However, for the moment, it clearly is. The fact that some miners can turn even a small profit on the Bitcoins they're rewarded with demonstrates that the utility they provide has positive market value. Of course at some point it may be that it costs substantially more to mine new Bitcoins than they are worth on the market. If this happens soon, Bitcoin will likely fail. If it happens later, it's possible that transaction fees could prop up the network, but that's purely speculative. Another thing to consider when assessing the energy efficiency of the Bitcoin network is how it compares to the efficiency of existing currencies. Cash has a physical component and must be manufactured. Electronic fiat is backed by huge, complex, and expensive networks. Visa's datacenters are not free. Keep in mind that credit card transactions typically have a transaction cost of 3%, which in some way represents the cost of operating the Visa network. 3% is kind of a staggeringly huge number, and off the cuff I expect that's actually quite a bit higher than the total Bitcoin network cost to volume ratio...

cma 13y ago
This isn't a judgment on bitcoin, but on your logic: The fact that some farmers can turn even a small profit on the tulips they're rewarded with demonstrates that the utility they provide has positive market value.
- humbledrone 13y ago
  Well, what other measure would you use? The markets did, rather quickly, correct themselves with regards to tulips. There was a brief window of mania, but for the last several hundred years the tulip market seems to have been pretty reasonable. It's just not possible at this time to know whether Bitcoin provides enough value to succeed in the long term. But to survive in the long term, it has to survive in the short term, and our best measure of short term utility is the market. Again, if the market crashed far below the mining costs, then I would view that as a demonstration of the lack of Bitcoin's utility. And that very well could happen! But it hasn't yet.

Estragon 13y ago

Actually, I agree with him, but it's funny how these articles always pile on when the price is crashing.

NotOscarWilde 13y ago
By funny, you mean intentional, right? I am fairly sure there are parties trying to upvote and/or post these articles to get BTC price up or down, whatever their need is. Currently, it's clearly "down" so they can buy again.
- thinkcomp 13y ago
  I actually had no idea that the price was crashing until after I posted it. I've been writing it for a few days. And I have no stake one way or the other.
fat0wl 13y ago
man it's because when the price is not crashing its all brainwashy hype. For the record, i talk crap about Bitcoin even when it's on the upswing but you just get downvoted a ton by people who are all siked on investing. btw, did anybody else get really disappointed after clicking the link and realizing it was Aaron Greenspan not Alan? I would love for legit economic analysts to take a crack at Bitcoin but so far most have dismissed it (I saw some figure like 87% and no I am not going to bother backtracking to find my source sorry). I wish somebody with some real knowledge of world economies/currencies would drop some knowledge but they seem to either A) Not care (I suspect because even tho BTC is at the forefront of the tech world, it is a trinket to the aged eyes of those who have spent their lives watching the fluctuations of the world economy) B) Not wish to comment because it's a fun experiment to watch so why ruin your rep by seeming like an old fuddy-duddy when you could just enjoy the view When I told my father (very successful attorney guy) about the Senate hearing he was like "Of course they're interested in it. If the tech works, why wouldn't they want to use it? But yeah they probably will want to strip it and start over without the dispersements the founders put in". Seems like about the most reasonable off-hand assessment I've heard from a non-techie business type. The gov has no interest in protecting black market holdings and redistributed wealth pulled out of thin air back to your original point -- yea i think it's tough for negative press to get anyone's attention in the midst of the $$ signs soaring. It's like a NYE celebration for the speculators. it's why I believe that Bitcoin "news" isn't really "news" -- it's just some articles characterizing the current hype with a bit of random theory thrown in. But I think as Mr. Aaron Greenspan aptly points out, a sound offline (not looking at the $$ signs) theoretical analysis should prove that it's not something worth the interest regardless of how far the price climbs

mappum 13y ago

The author seems pretty hung up on the fact that mining consumes electricity, but let's look at the numbers. Miners consume an estimated 108,619 megawatt hours per day (according to https://blockchain.info/stats https://blockchain.info/stats). This is actually a very high estimate as most miners have switched to ASICs and are consuming orders of magnitude less power, but let's use it anyway. This would add up to about $16m spent per day on electricity. In 2011, the United States alone consumed 367 million gallons of gasoline daily (according to http://www.eia.gov/tools/faqs/faq.cfm?id=23&t=10 http://www.eia.gov/tools/faqs/faq.cfm?id=23&t=10). At an average gas price of $3.576 / gallon (http://www.eia.gov/dnav/pet/pet_pri_gnd_dcus_nus_a.htm http://www.eia.gov/dnav/pet/pet_pri_gnd_dcus_nus_a.htm), this would be $1.3b spent per day on gas. Pretty much everything on Earth is going to consume power, but I don't think Bitcoin mining consumes enough to worry about.

makomk 13y ago
Of course, if Bitcoin was widely adopted, the price would go up, meaning that far more people would mine it and far more energy would be used in mining. The only reason energy consumption from mining is that low right now is because Bitcoin is incredibly niche.

tlrobinson 13y ago

Says the guy with a potentially competing product (FaceCash) and also happens to be suing Coinbase and CoinLab, among others.

fragsworth 13y ago
Until recently, I have never seen such extraordinary bias in written work in my life. Almost every time you see someone writing about Bitcoin, they are one-sided to the point of absurdity. The relentlessly negative articles (like this Aaron Greenspan piece) gives me the impression that the author has a spiteful resentment of those who bought early, and wants to see it crash to $0 so he can be right in the end and tell everyone "I told you so". On the other hand, many unquestioningly positive writings (which we also see plenty of) are hugely influenced by the fact that the authors invested in Bitcoin and want to see it rise.

timberlane 13y ago

It seems that most comments posts are either pro bit-coin or anti bit-coin, but both sides seems to make wrong arguments based on a flawed thinking of mining. A fixed amount of bit coins are mined (on average) per unit time. Thus, how much work it takes to mine a coin depends solely on the number of miners. Econ 101 theory tells us that the aggregate costs of the miners will equal their aggregate rewards. So, the total cost of mining (hardware, electricity, people's time who work on it) will equal the reward. That's all that's happening with mining. No for either side to complicate it and make it seem like more is there.