Bitcoin feels a bit like the gold standard. Massive mining operations dumping huge volumes of resources and energy to acquire some thing that is only mildly useful. It seems quite wasteful.
https://drive.google.com/uc?id=0B4-bDFu_72Beelkxd3VlbXoyd0E&...
Excerpt: According to our estimates then, the whole Bitcoin network is consuming maybe 10% of a large power plant’s worth of electricity. Although this is not an insignificant amount of power, it's not yet a large amount of electricity compared to all the other things that people are using electricity for on the planet.
Any payment system requires energy and electricity. With traditional currency, lots of energy is consumed guarding and moving gold bullions around, running ATM machines, coin sorting machines, cash registers, and payment processing services, and transporting money in armored cars.
Some people say Bitcoin wastes energy because the energy expended computing SHA-256 hashes doesn’t serve any apparent purpose. But you could make this same argument for traditional currency as well — there’s a lot of energy being wasted and it doesn't serve any purpose besides maintaining the currency system. So, if we value Bitcoin as a useful currency system, then the energy required to support it is not really being wasted.
That said, we can ask if there’s a way to do better ...
Whenever the topic of bitcoin's inherent wastefulness is discussed, someone always brings up this point, but it's a fallacious comparison because most of the power consumed by the traditional financial system is spent in its capacity as a ubiquitous pillar of modern society, wherein bitcoin would be completely subsumed were it to become anything more than a technical novelty.
Even when you subtract the common denominator that represents the vast majority of the world's financial intuitions, bitcoin is still the only currency that burns resources as a function of its circulation.
Either I missed your point or it would be nice if you brought this back down to Earth. Yes, traditional ledgers help mediate economic exchanges. Bitcoin, as a ledger system, also helps mediate economic exchanges.
> ... wherein bitcoin would be completely subsumed were it to become anything more than a technical novelty.
You put this forward like we should all nod and say of course. Care to tell us about this scenario?
I forget where I read it, but when countries and banks buy and sell large amounts of gold bullion they don't usually move it around because it's expensive and inconvenient.
The ownership changes, but it's usually left where it is.
BitCoin tends to waste energy irrecoverably.
Apples-to-apples comparison is a challenging task, but the modern financial system hardly has that feature of burning more for the sake of burning more.
Bitcoin is best technical solution we have for an existing societal problem. As soon as better technical solution will be created (e.g. proof-of-stake which can be relied upon), Bitcoin will be modified to use it. And Bitcoin will continue to operate with lower costs - burning less energy.
Yes and no. If a banker is being paid $100/hour then presumably (in an efficient-markets sense) their labour is worth that much, and they could be doing something else with their time that would be creating $100 of value instead.
(all are hyperlinked)
I'm not an expert but it makes a lot of sense to me. Most real-world decentralized institutions work kind of like this.
https://medium.com/a-stellar-journey/on-worldwide-consensus-...
It's not obscene to me that a truly global currency, that is decentralized and not controlled by any government, would cost a tenth of the energy output of a modest-sized power plant.
Instead of 'proof of work' it should require actual, /useful/ work. I think it should be a mix of work /types/ to promote general purpose computing, instead of ASICs. Imagine if a comity decided, and the owners of existing coins voted on, what work was worthy of being included. Folding proteins for medical research, SETI, attacking DRM/bootloader encryption keys... things that benefit the world.
Lots of very smart people have tried this and failed. The best effort so far has been to find prime numbers, and even that turned out to not be a robust proof of work.
You are free to create that proof of work system and you can see who buys your coin.
Now, if you piggy back on something people are already doing, then you might have something.