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Comment by LeifCarrotson | Hacker News Reader

Is the energy expended in crypto currency mining less valuable than that expended by the traditional financial sector?

Of course it's much less valuable. The crypto currencies are intentionally difficult to mine, wasting vast amounts of energy. A small mining company could probably process all of Visa's transactions which outnumber transactions on bitcoin by at least an order of magnitude.

That doesn't make sense; you are comparing the creation of a currency against the usage of other. The finance sector includes the creation of cash (its paper, price of counterfeit measures); the transportation of cash (think ATMs), the materials needed for creating debit and credit cards, including their chips, the equipment to protect banks from being robbed (think big steel security safes) along many other resources to make such industry work.

This is a common knee-jerk response that doesn't make any sense. None of that stops Bitcoin from being wasteful, and most of it is still necessary if Bitcoin is used more.

Are you claiming that Bitcoin replaces physical security? How would it do that? Why doesn't someone just walk in and take your computer?

And if you're concerned about the creation of small computer chips (why would you be concerned about this), I assure you that Bitcoin is using more of them.

>None of that stops Bitcoin from being wasteful, and most of it is still necessary if Bitcoin is used more

What? If used more we wouldn't even need to transform it to any other currency, its because is _not_ used more that it is usually needed to convert it to something else.

>"How would it do that? Why doesn't someone just walk in and take your computer?"

No, someone cannot walk in because he doesn't even know where to walk in, its the same reason Satoshi is extremely rich despite the curiosity of millions to know about him, but no-one even knows his real name or anything at all; we don't even know which country he lives in; so yeah it does replace physical security; at least to a significant extent.

>And if you're concerned about the creation of small computer chips (why would you be concerned about this), I assure you that Bitcoin is using more of them.

It was just an example of the millions of resources that are wasted by the finance industry, a lot that include transportation (gasoline/ fossil fuels which is way way worse than most sources of electricity gpus are using)

Without physical security, someone can walk into the data center next to the hydro plant and take all the equipment they want.

They can also install rootkits using their physical access to their computers, so they don't even have to move the equipment.

No, you cannot replace physical security with cryptocurrency. Nor will you replace the use of gasoline or computer chips.

Data centers need security regardless of cryptocurrency, you can't say the same about money and banks; so your point is moot.

To install rootkits you need to know where the computers are or some way to get to them, and that's 100% impossible with bitcoins unless you reveal your own info some other way (e.g. a security mistake)

I certainly can say the same about money and banks. I am saying it. You want money and banks to run on cryptocurrency, right? Then you need security for it.

"Haha, you don't know which computer to steal" is the worst security-by-obscurity idea I've ever heard of.

That's like saying passwords are security-by-obscurity.

I never said I wanted banks to run on crypto.

Overall it is a bit sad your arguments reached this low quality; I was expecting some interesting counter-arguments instead of these slippery slopes, not to mention all the downvotes you poured onto me.

With general stocks though at least you're investing in companies which make products, hire people, and hopefully stimulate the overall economy. A few Chinese guys in an old apartment building wasting power and compute/GPU resources... Not so much.

How does investing in a stock benefit a company unless you are buying from that company directly?

By supporting the share price when they want to have a secondary offering.

The purpose (and only purpose) of the company is to increase shareholder value. That is done via dividend and stock price appreciation. Buying the stock of a company increases demand of that stock and hopefully share price.

Sounds like all the electricity spent on buying and selling stocks isn't doing any good for the planet either.

Honestly, it isn't. Personally, I see all of those energy spending as upkeep - some amount you have to waste in order for the system to work.

The difference between regular money and crypto money is that the upkeep of the former is mostly tied to physical reality and doesn't influence the value of money itself. In case of the latter, however, all that energy waste is a) completely arbitrary, and b) directly tied into the value of money (the more power you burn, the more you earn, and one party burning hard means other have to do as well, for the blockchain to stay secure).

Or in TL;DR: cryptocurrencies directly incentivize wasting energy. Regular money does not.

You are wrong. The cryptocurrency industry is also made of real companies hiring real people. For example as of Sep 2015 there were 729 Bitcoin companies employing thousands of people: https://venturescannerinsights.wordpress.com/2015/09/04/the-...

You can't seriously be comparing those <1000 companies to the entire rest of the world economy.

Cryptocurrency doesn't even register as a drop in the metaphorical bucket.

That's like saying any small vertical in the stock market shouldn't be compared to the wntire rest of the economy. Well no, and that's not the comparison being made.

That's not the comparison I'm making. Compare the ratio of energy spent over jobs created.

It makes sense to spend a few hundred megawatts on a system that created thousands of jobs.

Jobs created is a complete misdirection. Productive jobs created is the correct measure. I could pay thousands of people to repeatedly dig holes and fill them in, and it would be an utter waste. I don't believe that Bitcoin serves a useful purpose, and so until convinced otherwise, I consider Bitcoin jobs as less useful than the hole-digging jobs. At least the hole-diggers don't waste electricity in the process.

Bitcoin does serve a useful purpose! It is perhaps not obvious to someone like you who don't seem to be a user. Or if you can't imagine how Bitcoin can help improve the world, you are probably only considering your little bubble, and not thinking about the other 7 billion human beings who are much less fortunate than you, economically, professionally, politically, financially.

Overall, Bitcoin reduces friction, enables transactions that would not otherwise take place, and protects people from losing their cash/savings in various situations. Here are just a few examples of problems of the existing financial system that Bitcoin solves:

- Credit card being denied while in a foreign country because the system accidentally tagged it as fraudulent

- Merchants unable to sell online and accept credit cards due to their market segment encountering high CC fraud

- Person unable to quickly and cheaply send remittance to family in foreign country

- Countries confiscating savings accounts of citizens (eg. Cyprus in 2014)

- Countries running their currency to the ground (Venezuela in 2017, Zimbabwe hyperinflation, USSR collapse, etc)

- DEA stealing innocent people carrying cash thanks to civil forfeiture laws (http://www.huffingtonpost.com/2015/05/07/dea-asset-forfeitur... http://priceonomics.com/how-police-officers-seize-cash-from-...)

- Bitcoin helping Chinese bypass GFW censorship (https://www.larrysalibra.com/hop-over-the-great-firewall-wit...)

- Paypal freezing for months the account of someone asking for donations for an expensive medical treatment (quite a few news stories about similar situations)

I could go on and on.

It seems likely that crypto currencies transfer much less value per kilowatt-hour consumed.

The whole concept is underpinned by enforced, auto-scaled busywork.

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