Bitcoin Sees Wall Street Warm to Trading Virtual Currency

The point is that the free market and algorithm finds an efficient equilibrium between what the users value it at (which is a reflection of its utility to them), what it costs to secure the network in relation to the reward paid for it. In these costs are electricity costs, for which miners will find the most efficient means such that they are profitable. The energy prices are determined by the economic actors producing it. The will charge what the market will bear such that they are profitable and competitive. All this is a wonderfully efficient system except for the fact that the externality you are worried about (pollution from energy production) is not accounted for anywhere in the system. In fact, it is almost incentivised, since it is likely that I can produce dirty power cheaper than I can clean power (although this is changing). If you did account for this, dirty power would become more expensive, miner using it would disappear or choose clean energy.

Hence, the problem is not "It uses too much energy! So wasteful!!!!" The problem is "We don't account for externalities!!!! So bad!!!"

If there's a total internet && computer && electricity apocalypse, a physical barter exchange with gold is more trustless than bitcoin. You can still transact bitcoin but there's trust involved.

Advantages of Bitcoin over gold:

No trusted third party (If you're moving sizable sums of gold, you're doing it with a trusted third party[TTP))

99.99226%[1] transaction uptime (Your TTP keep business hours)

No countries win the gold-geography lottery (Your country that has no gold reserves can still accumulate)

Instantly assay the value (gold takes time)

You can use latent renewable energy to mine bitcoin (the way that miners remain profitable is by using cheap hydro power that would be wasted if not consumed) No need to blow up mountains to sift for gold.

Bitcoin is programmable value (People in places without functioning judicial/commercial systems can create contracts with each other)

You cannot practically bring more bitcoin to market if the price increases (The price of gold dictates which gold fields are profitable to produce)

Most importantly, it separates money that citizens use and the onus of financial obligations that the oligopoly (Banker's bailout 2008) and political class (Endless war) place on citizens.

[1]http://bitcoinuptime.com/

For what that's worth.

Alex of Digiconomist is very good at writing long verbose paragraphs that "seem" to support his model, but when we look at his actual data and logic, it's full of holes, flaws, and poor assumptions.

One of the things we both agree on is that in the future (1 year? 10 years?) the ratio will tend toward 40 to 60%. But that doesn't say anything about the ratio as of today.

It's not free to manufacture hard drives, in terms of materials, energy, CO2 etc. Proof of space and time merely shifts the pressure away from compute power to storage.

It has the potential to do for the storage market what PoW as done for the graphics card market - pump up prices and move useful tech out of the reach of most consumers.

i don't really see its electricity use as a big issue since market forces will inevitably reduce cost or increase supply.

part of the reason though people will put a lot into an experiment like this is that the network effect is important to its success. needs to be very liquid.

for me personally having a fungible electronic currency that cannot be taken away by law or inflation is itself valuable

Deflation seems bad from our current mindset of growth at all costs, and especially bad if you're one of the upper class who's investments return more than inflation, ensuring you'll keep your status.

But this could possibly bring a brighter future for humanity, where we tame the viral nature of capitalism and the rich getting richer at a far faster rate than the rest of society.

I never assumed that, nor that it won't (like you just did). I just said "supposed to replace".

Here is an example. Someone came up with the number 1700 TWh per year for data centers, wifi, computers, phones, tvs, etc. I have no idea, so just use that for now: https://www.researchgate.net/publication/320225452_Total_Con...

Anyone familiar with whats on tv or the internet knows that 99% of all that is unnecessary, even unwanted, crap. That gives 1683 TWh being wasted each year on crap, yet people are only concerned about this 5%. I just want consistency so I don't feel like I'm being concern trolled.

EDIT:

Looking at the visa estimate I see right away it is underestimated by 40%:

>"In calendar year 2016, we used an estimated 674,922 gigajoules (GJ) of energy from Scope 1 and 2 sources [...] Of our total emissions, only 7% were from Scope 1 sources, with 54% from Scope 2 (primarily purchased electricity) and 39% from Scope 3 (mainly employee commercial air travel)."

https://usa.visa.com/dam/VCOM/download/corporate-responsibil...

So Visa alone is about 0.25 TWh per year.

Credit suisse/UBS main operations are in London.

That's quite a statement. Did you mean without beneficial use cases that you personally know of? Example I posted somewhere in this thread: https://www.forbes.com/sites/ktorpey/2017/12/31/bitpesa-ceo-...

How do you expect to propagate and store 1GB blocks (hell, even 100MB blocks) every 10 minutes for the foreseeable future. I understand that the cost of storage and bandwidth has been falling for some time however if you want this system to gain 'mainstream' adaption it cannot everyone's coffee purchases for the rest of time. How do you keep a system like that decentralised if you aren't even paying people to run these nodes? There certainly wouldn't be as many as there are currently.

In a world of 1GB blocks and ultra cheap transactions it means people can simply use it as online storage. You could upload your movie collection and have it propagated to all of the nodes on the network.

The internet would not have scaled if we still broadcasted every single packet to all of the nodes on the network, it had to be split up and routed and the very same will happen to Bitcoin.

This is completely untrue. The person who is sending you coins can open up a channel to you and load it with the money they're sending you. Sometimes they won't even need to open a channel because you already have one open, but just with no funds on your end of it. Eventually, exchanges will support loading up channels directly this way such that users never actually need to touch the base Bitcoin layer directly, and will deal purely in LN transactions except when they need to settle disputes.

I also used Kraken in the past but now I actively avoid any exchange which deals in Tether, as they've repeatedly failed to produce an audit to show that the money actually exists.