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Sigh. > For starters, BTC is inherently deflationary. For starters, tell us why this is inherently bad. This statement also assumes that the BTC economy will

Sigh. > For starters, BTC is inherently deflationary. For starters, tell us why this is inherently bad. This statement also assumes that the BTC economy will grow forever. > Bitcoin is designed to be verifiable [...] but pretty much untraceable What would be bad about this if it were true? Paper bills work just fine, even though they are pretty much untraceable. By the way, this opinion is pretty much wrong, bitcoin is very far from being untraceable (IPs, exchanging BTC, etc.) > Libertarians love it because it pushes the same buttons as their gold fetish Ok, article is clearly emotional. How did this end up on the front page? > Mining BTC has a carbon footprint from hell https://en.bitcoin.it/wiki/FAQ#Is_it_not_a_waste_of_energy.3F https://en.bitcoin.it/wiki/FAQ#Is_it_not_a_waste_of_energy.3... > Bitcoin mining software is now being distributed as malware Surprise. Thieves steal valuable things. This wouldn't happen without BTC, right? > Bitcoin's utter lack of regulation permits really hideous markets to emerge, in commodities like assassination (and drugs and child pornography). FINCEN would like a word with you. Also, how does it hurt the USD that it is used for assassination, drugs and child pornography? It's ok that people hate bitcoin though, some people just let their emotions take control.

peterevans 13y ago
You need someone to explain to you why deflation is a bad thing? Well, since you asked: http://lmgtfy.com/?q=why+is+deflation+bad%3F http://lmgtfy.com/?q=why+is+deflation+bad%3F
- nkuttler 13y ago
  Let me prove without a doubt that you are wrong: http://lmgtfy.com/?q=why+is+delfation+good http://lmgtfy.com/?q=why+is+delfation+good
  - peterevans 13y ago
    You probably could have helped your cause further had you not spelled the word "delfation." Have you actually proved me wrong? I'll leave that as an exercise for the reader.
    - baq 13y ago
      to be honest you guys both failed.
JackFr 13y ago
>> For starters, BTC is inherently deflationary. > For starters, tell us why this is inherently bad. Deflation, by providing a risk free return for sitting on currency, leads to a slowdown in the real economy by reducing both output (reduced consumption) and productivity (reduced investment).
- icebraining 13y ago
  I'm not disagreeing, but is there empirical evidence backing that? My only sources are heavily biased, but they point out that the periods of mild, predictable deflation (like Bitcoin would cause) such as The Great Deflation[1] actually experienced decent growth in real incomes and such. [1] http://en.wikipedia.org/wiki/The_Great_Deflation http://en.wikipedia.org/wiki/The_Great_Deflation
  - cma 13y ago
    Plus the price of computation has been dropping in half 18 months for the last 60 years, but people still seem to be buying rather than waiting it out.
  - djur 13y ago
    The deflation in the late 19th century wasn't caused by contraction in money supply, though. It was caused by a huge increase in productivity. It's hard to compare that with contractionary monetary policy.
    - JackFr 13y ago
      The repeal of the Silver Purchase Act was pure deflationary monetary policy.
- Tycho 13y ago
  So a deflationary currency would lead to everyone simply grinding to a halt like those people on the planet in Serenity?
- nly 13y ago
  Bitcoin is only deflationary if the supply of everything else grows forever. If you look at prices throughout the ages you'll find things haven't always been like they are now[1]. We created the current global monetary system to deal with war debt, globalisation and mind-boggling growth in western prosperity, but there's no reason to believe what we use in 100-200 years will be based on the same principles at all. And no, I'm not saying Bitcoin or a return to the Gold Standard is the future, just that it's foolish to think a currency of limited supply "just doesn't work". At one point, it was completely natural and obvious to everyone that the supply of money was and should be limited. [1] https://philebersole.wordpress.com/2010/11/17/inflation-through-the-ages/ https://philebersole.wordpress.com/2010/11/17/inflation-thro...
ToastyMallows 13y ago
Re: BTC carbon footprint From your link: "Spending energy on creating and securing a free monetary system is hardly a waste." This doesn't address any of the arguments brought up in the article Charles linked to: http://pando.com/2013/12/16/bitcoin-has-a-dark-side-its-carbon-footprint/ http://pando.com/2013/12/16/bitcoin-has-a-dark-side-its-carb...
- Permit 13y ago
  That's because the arguments are ridiculous. >At today’s value of roughly $1,000 per bitcoin, the electricity consumed by the bitcoin mining ecosystem has an estimated carbon footprint – or total greenhouse gas emissions – of 8.25 megatonnes (8,250,000 tonnes) of CO2 per year, according to research by Bitcarbon.org. That’s 0.03 percent of the world’s total greenhouse gas output, or equivalent to that of the nation of Cyprus. If bitcoin’s value reaches $100,000, that impact will reach 3 percent of the world’s total, or that of Germany. At $1 million – which seems farcical but which may not be out of the realm of possibility given the artificially limited bitcoin supply – this impact rises to 8.25 gigatonnes, or 30 percent of today’s global output, and equivalent to that of China and Japan combined. Can someone explain to me the validity of simply multiplying the value of Bitcoin against its current percentage of world's total greenhouse gas output? How is the carbon footprint of Bitcoin attached to the price of Bitcoin? I don't expect that the recent halving in price caused everyone to pack up their mining rigs and returned carbon emissions to 0.015% of global emissions. Not to mention this author somehow manages to keep a straight face when arguing that Bitcoin could possibly account for more emissions than China and Japan.
  - ToastyMallows 13y ago
    > Can someone explain to me the validity of simply multiplying the value of Bitcoin against its current percentage of world's total greenhouse gas output? I believe it comes from here: http://bitcarbon.org/faq.html http://bitcarbon.org/faq.html > The Bitcarbon Methodology says that the carbon footprint of the Bitcoin mining network will be proportional to the exchange rate of Bitcoin assuming that 90% of the dollar value of Bitcoin is spent on electricity.
  - 13y ago
Brakenshire 13y ago
> FINCEN would like a word with you. i.e. you're saying that money laundering is already difficult to trace. If I understand bitcoin correctly, it will make that almost impossible. I'm not clear why this is an argument in favour of the currency.
- krakensden 13y ago
  Stross is wrong- bitcoin is extremely traceable. There is a public record of all transactions ever.
  - Tyrannosaurs 13y ago
    Genuine question: If that's the case why is it seen as (and indeed seem to be) such a great currency for illegal activity?
    - krakensden 13y ago
      Because there's lots of overlap between people interested in Tor and interested in cryptocurrencies. Because they figured no one was watching.
      - Tyrannosaurs 13y ago
        So are you saying that Bitcoin is actually relatively traceable by law enforcement or the tax authorities?
        VMG 13y ago
        It is traceable in principle, but not yet in practice.
        zik 13y ago
        Yes, it is traceable. That's why when you buy bitcoin at an exchange the government requires that you prove your identity. Then it's just a matter of following the money through bitcoin's permanent public ledger. It's probably the most traceable currency ever. Even amateurs can follow the money trail.
wissler 13y ago
It's interesting how gold is getting compared to BTC, since really it's nothing like BTC. If gold goes up in relative value, then that creates a strong incentive for creating more gold mines, which then drives the price down. In principle nothing prevents us from creating technology to efficiently mine asteroids if that's what we want to do. So, the supply of gold is very much not fixed. This is of course very much unlike BTC, which has a fixed number of coins at around 21 million.
- geoka9 13y ago
  I can't predict the future any more than you do, but the creators of BTC have thought of this, it seems. > If gold goes up in relative value, then that creates a strong incentive for creating more gold mines, which then drives the price down. Currently it's the same with BTC (higher price creates an incentive for more mining). > This is of course very much unlike BTC, which has a fixed number of coins at around 21 million. The idea is that mining rigs should still be useful after the 21 million BTC mark. Unless all BTC markets freeze, the rigs will earn their upkeep in transaction fees. The size of fees is regularly adjusted to make it worth their while.
  - Nursie 13y ago
    >> Currently it's the same with BTC (higher price creates an incentive for more mining). It's not quite the same, the act of bringing more miners on board does not feed back into the supply chain, it just increases competition for BTC that were going to be mined anyway. There's a missing link there. >> The size of fees is regularly adjusted to make it worth their while. The size of the fees is voluntary for the person sending the transaction. We have already seen situations where some pools started leaving some transactions out of their calculations because it wasn't worth their while processing them. As rewards for block discovery drop this will get more common and fees may have to become more generous, or somehow formalised.
    - geoka9 13y ago
      But some clients (electrum, for example) refuse to send the transaction if you don't include a fee? There's also this: A transaction may be safely sent without fees if these conditions are met: It is smaller than 10,000 bytes. All outputs are 0.01 BTC or larger. Its priority is large enough (see the Technical Info section below) Otherwise, the reference implementation will round up the transaction size to the next thousand bytes and add a fee of 0.1 mBTC (0.0001 BTC) per thousand byte.
bonemachine 13y ago
> Mining BTC has a carbon footprint from hell https://en.bitcoin.it/wiki/FAQ#Is_it_not_a_waste_of_energy.3...* https://en.bitcoin.it/wiki/FAQ#Is_it_not_a_waste_of_energy.3... But what does the "answer" in FAQ say? Spending energy on creating and securing a free monetary system is hardly a waste. Also, services necessary for the operation of currently widespread monetary systems, such as banks and credit card companies, also spend energy, arguably more than Bitcoin would.* i.e., nothing really. Not even a back-of-the-envelope estimate of the power densities (either per putative stored value unit, or per transaction volume) of BTC v. fiat currencies. Just a flat assertions like "...is hardly a waste", or "...arguably..."
- Nursie 13y ago
  >> Spending energy on creating and securing a free monetary system is hardly a waste. Depends on your definition of waste. If you don't value BTC or agree with its crazy libertarian ideals at all then it's a waste by definition. If you can imagine secure crypto-currencies with different characteristics (centralised, controlled supply) then you can make them in a way that doesn't require all this constant make-work, and what's more you can make them support offline transactions and all sorts of other cool stuff. But that's only if you don't subscribe to libertarian ideals, which I don't.
- nkuttler 13y ago
  Thanks for your input. The problem is that the linked article (http://pando.com/2013/12/16/bitcoin-has-a-dark-side-its-carbon-footprint/ http://pando.com/2013/12/16/bitcoin-has-a-dark-side-its-carb...) starts with wrong assumptions. > At today’s value of roughly $1,000 per bitcoin, the electricity consumed by the bitcoin mining ecosystem has an estimated carbon footprint [...] [of] 0.03 percent of the world’s total greenhouse gas output [...] If bitcoin’s value reaches $100,000, that impact will reach 3 percent of the world’s total [...]. The value of bitcoin is not at all related to the network's energy consumption. It's not even related to the network's hashrate, and even if it was, mining is becoming more and more energy-efficient. It's hard to take the article seriously after this.
  - bonemachine 13y ago

peterevans 13y ago

You need someone to explain to you why deflation is a bad thing? Well, since you asked: http://lmgtfy.com/?q=why+is+deflation+bad%3F http://lmgtfy.com/?q=why+is+deflation+bad%3F

nkuttler 13y ago
Let me prove without a doubt that you are wrong: http://lmgtfy.com/?q=why+is+delfation+good http://lmgtfy.com/?q=why+is+delfation+good
- peterevans 13y ago
  You probably could have helped your cause further had you not spelled the word "delfation." Have you actually proved me wrong? I'll leave that as an exercise for the reader.
  - baq 13y ago
    to be honest you guys both failed.

JackFr 13y ago

>> For starters, BTC is inherently deflationary. > For starters, tell us why this is inherently bad. Deflation, by providing a risk free return for sitting on currency, leads to a slowdown in the real economy by reducing both output (reduced consumption) and productivity (reduced investment).

icebraining 13y ago
I'm not disagreeing, but is there empirical evidence backing that? My only sources are heavily biased, but they point out that the periods of mild, predictable deflation (like Bitcoin would cause) such as The Great Deflation[1] actually experienced decent growth in real incomes and such. [1] http://en.wikipedia.org/wiki/The_Great_Deflation http://en.wikipedia.org/wiki/The_Great_Deflation
- cma 13y ago
  Plus the price of computation has been dropping in half 18 months for the last 60 years, but people still seem to be buying rather than waiting it out.
- djur 13y ago
  The deflation in the late 19th century wasn't caused by contraction in money supply, though. It was caused by a huge increase in productivity. It's hard to compare that with contractionary monetary policy.
  - JackFr 13y ago
    The repeal of the Silver Purchase Act was pure deflationary monetary policy.
Tycho 13y ago
So a deflationary currency would lead to everyone simply grinding to a halt like those people on the planet in Serenity?
nly 13y ago
Bitcoin is only deflationary if the supply of everything else grows forever. If you look at prices throughout the ages you'll find things haven't always been like they are now[1]. We created the current global monetary system to deal with war debt, globalisation and mind-boggling growth in western prosperity, but there's no reason to believe what we use in 100-200 years will be based on the same principles at all. And no, I'm not saying Bitcoin or a return to the Gold Standard is the future, just that it's foolish to think a currency of limited supply "just doesn't work". At one point, it was completely natural and obvious to everyone that the supply of money was and should be limited. [1] https://philebersole.wordpress.com/2010/11/17/inflation-through-the-ages/ https://philebersole.wordpress.com/2010/11/17/inflation-thro...

ToastyMallows 13y ago

Re: BTC carbon footprint From your link: "Spending energy on creating and securing a free monetary system is hardly a waste." This doesn't address any of the arguments brought up in the article Charles linked to: http://pando.com/2013/12/16/bitcoin-has-a-dark-side-its-carbon-footprint/ http://pando.com/2013/12/16/bitcoin-has-a-dark-side-its-carb...

Permit 13y ago
That's because the arguments are ridiculous. >At today’s value of roughly $1,000 per bitcoin, the electricity consumed by the bitcoin mining ecosystem has an estimated carbon footprint – or total greenhouse gas emissions – of 8.25 megatonnes (8,250,000 tonnes) of CO2 per year, according to research by Bitcarbon.org. That’s 0.03 percent of the world’s total greenhouse gas output, or equivalent to that of the nation of Cyprus. If bitcoin’s value reaches $100,000, that impact will reach 3 percent of the world’s total, or that of Germany. At $1 million – which seems farcical but which may not be out of the realm of possibility given the artificially limited bitcoin supply – this impact rises to 8.25 gigatonnes, or 30 percent of today’s global output, and equivalent to that of China and Japan combined. Can someone explain to me the validity of simply multiplying the value of Bitcoin against its current percentage of world's total greenhouse gas output? How is the carbon footprint of Bitcoin attached to the price of Bitcoin? I don't expect that the recent halving in price caused everyone to pack up their mining rigs and returned carbon emissions to 0.015% of global emissions. Not to mention this author somehow manages to keep a straight face when arguing that Bitcoin could possibly account for more emissions than China and Japan.
- ToastyMallows 13y ago
  > Can someone explain to me the validity of simply multiplying the value of Bitcoin against its current percentage of world's total greenhouse gas output? I believe it comes from here: http://bitcarbon.org/faq.html http://bitcarbon.org/faq.html > The Bitcarbon Methodology says that the carbon footprint of the Bitcoin mining network will be proportional to the exchange rate of Bitcoin assuming that 90% of the dollar value of Bitcoin is spent on electricity.
- 13y ago

Brakenshire 13y ago

> FINCEN would like a word with you. i.e. you're saying that money laundering is already difficult to trace. If I understand bitcoin correctly, it will make that almost impossible. I'm not clear why this is an argument in favour of the currency.

krakensden 13y ago
Stross is wrong- bitcoin is extremely traceable. There is a public record of all transactions ever.
- Tyrannosaurs 13y ago
  Genuine question: If that's the case why is it seen as (and indeed seem to be) such a great currency for illegal activity?
  - krakensden 13y ago
    Because there's lots of overlap between people interested in Tor and interested in cryptocurrencies. Because they figured no one was watching.
    - Tyrannosaurs 13y ago
      So are you saying that Bitcoin is actually relatively traceable by law enforcement or the tax authorities?
      - VMG 13y ago
        It is traceable in principle, but not yet in practice.
      - zik 13y ago
        Yes, it is traceable. That's why when you buy bitcoin at an exchange the government requires that you prove your identity. Then it's just a matter of following the money through bitcoin's permanent public ledger. It's probably the most traceable currency ever. Even amateurs can follow the money trail.

wissler 13y ago

It's interesting how gold is getting compared to BTC, since really it's nothing like BTC. If gold goes up in relative value, then that creates a strong incentive for creating more gold mines, which then drives the price down. In principle nothing prevents us from creating technology to efficiently mine asteroids if that's what we want to do. So, the supply of gold is very much not fixed. This is of course very much unlike BTC, which has a fixed number of coins at around 21 million.

geoka9 13y ago
I can't predict the future any more than you do, but the creators of BTC have thought of this, it seems. > If gold goes up in relative value, then that creates a strong incentive for creating more gold mines, which then drives the price down. Currently it's the same with BTC (higher price creates an incentive for more mining). > This is of course very much unlike BTC, which has a fixed number of coins at around 21 million. The idea is that mining rigs should still be useful after the 21 million BTC mark. Unless all BTC markets freeze, the rigs will earn their upkeep in transaction fees. The size of fees is regularly adjusted to make it worth their while.
- Nursie 13y ago
  >> Currently it's the same with BTC (higher price creates an incentive for more mining). It's not quite the same, the act of bringing more miners on board does not feed back into the supply chain, it just increases competition for BTC that were going to be mined anyway. There's a missing link there. >> The size of fees is regularly adjusted to make it worth their while. The size of the fees is voluntary for the person sending the transaction. We have already seen situations where some pools started leaving some transactions out of their calculations because it wasn't worth their while processing them. As rewards for block discovery drop this will get more common and fees may have to become more generous, or somehow formalised.
  - geoka9 13y ago
    But some clients (electrum, for example) refuse to send the transaction if you don't include a fee? There's also this: A transaction may be safely sent without fees if these conditions are met: It is smaller than 10,000 bytes. All outputs are 0.01 BTC or larger. Its priority is large enough (see the Technical Info section below) Otherwise, the reference implementation will round up the transaction size to the next thousand bytes and add a fee of 0.1 mBTC (0.0001 BTC) per thousand byte.

bonemachine 13y ago

> Mining BTC has a carbon footprint from hell https://en.bitcoin.it/wiki/FAQ#Is_it_not_a_waste_of_energy.3...* https://en.bitcoin.it/wiki/FAQ#Is_it_not_a_waste_of_energy.3... But what does the "answer" in FAQ say? Spending energy on creating and securing a free monetary system is hardly a waste. Also, services necessary for the operation of currently widespread monetary systems, such as banks and credit card companies, also spend energy, arguably more than Bitcoin would.* i.e., nothing really. Not even a back-of-the-envelope estimate of the power densities (either per putative stored value unit, or per transaction volume) of BTC v. fiat currencies. Just a flat assertions like "...is hardly a waste", or "...arguably..."

Nursie 13y ago
>> Spending energy on creating and securing a free monetary system is hardly a waste. Depends on your definition of waste. If you don't value BTC or agree with its crazy libertarian ideals at all then it's a waste by definition. If you can imagine secure crypto-currencies with different characteristics (centralised, controlled supply) then you can make them in a way that doesn't require all this constant make-work, and what's more you can make them support offline transactions and all sorts of other cool stuff. But that's only if you don't subscribe to libertarian ideals, which I don't.
nkuttler 13y ago
Thanks for your input. The problem is that the linked article (http://pando.com/2013/12/16/bitcoin-has-a-dark-side-its-carbon-footprint/ http://pando.com/2013/12/16/bitcoin-has-a-dark-side-its-carb...) starts with wrong assumptions. > At today’s value of roughly $1,000 per bitcoin, the electricity consumed by the bitcoin mining ecosystem has an estimated carbon footprint [...] [of] 0.03 percent of the world’s total greenhouse gas output [...] If bitcoin’s value reaches $100,000, that impact will reach 3 percent of the world’s total [...]. The value of bitcoin is not at all related to the network's energy consumption. It's not even related to the network's hashrate, and even if it was, mining is becoming more and more energy-efficient. It's hard to take the article seriously after this.
- bonemachine 13y ago