Bitcoin backlash as ‘miners’ stress power grids in Central Washington
seattletimes.com
seattletimes.com
- people trading 'coins' in the same way Pokemon / WWF kids trade cards.
- thinking this is actually a long-term 'investment' strategy (well its idiots trading with each other ...)
- to top it off, siphoning off electricity and giving a load of shitty excuses 'it could be like Seattle's.
I don't know where to begin with this Bitcoin crap; it's gotten crazy that so many naive people are into this plopping their hard-earned money into a well-functioning sinkhole.
I don't want to say to my kids, "in my day you could still buy a bitcoin for only $7k."
Significantly less than $7k worth.
I paid £30 for a framed print and that sits on the wall doing nothing (it's resale value is probably a fiver on ebay), I have even bought a particularly pleasant rock on more than one occasion, pet or not. I have no use for them. Some are sat on the side because I like to look at the impressions of the creatures who died in it. Some are embedded in my wife's engagement ring (a pointless piece of bent metal), I'm not sure I get any value for them any more since we are married.
Why do we ascribe value to anything? I have a piece of paper in my wallet with a picture of the queen on. It's just a piece of paper, yet if I take it to the shop they will swap it for food! If I take it to the bank they will swap it for a number in a database (woop). Yet if I have a big number in that database or a lot of those special pictures I become a Big Man in society.
Yet, through no fault of my own, if I wanted to swap those pieces of paper for pieces with dead US presidents on, I would get 20% less than I would have 2 years ago! It would be worse but the value of dead-president-paper is not as high as it was. Holding Queen-paper or Dead-president-paper sounds like a huge risk.
George Soros said it best, " All of financial history is one lie and deceit after another, your job as a speculator is to get on the lie while it is being propagated and get off before everyone finds out".
I feel like a lot of folks are going to get burned but what do I know? I could be full of shit....
Bill Gates May 2018: "I would short bitcoin if I could." <-- He can. He didn't bother to look into it though.
Elon Musk also said on stage that Bitcoin is mainly for illegal use. Based on what? https://youtu.be/7WMJs1v63C0?t=2m50s
He barely knows anything about crypto, and neither do these other guys, and they talk like they do. They DO have a horse in this race, and it's clearly in fiat USD. They're not omniscient and neither are we, so let's keep our eyes and ears open.
> I don't know where to begin with this Bitcoin crap
Begin by addressing the actual strengths of blockchain tech (I think the weaknesses are fairly stated in this thread).
So far, in its short life, it has provided:
1) A store of value that can be easily held on the person and that lives outside the state-corporate banking infrastructure
2) A way to buy psychoactive compounds and other medicines which have been wrongly (and violently) prohibited.
Although I have no problem with Pokemon, nor do I judge people's proclivity to collect them, I do think that cryptocurrency has already achieved something that Pokemon haven't.
edit: Ouch - quite a lot of downvotes with no rebuttal. I guess we're in an anti-blockchain mood this morning.
And that idea is pretty powerful (even if the manifestations thus far still seem to be pretty much the above as well).
Even so, how much wealth in this world is based in "actual, hard currency"? How many developers have unvested options? How much of Musk's wealth is in the bank as opposed to tied up in his businesses? I think you're trying to stand up a strawman.
Yes. Definitely.
In other words, most things don't last very long, but things that do last for a long time tend to stick around a lot longer than you might normally expect them to. Like people predicting the death of Facebook. Sure, something will probably eventually take it down or become the next Facebook. But it's been around for so long now, a betting man shouldn't bet on it happening anytime soon.
Now one might argue that on the day Myspace died this effect would predict that it would be around for yet another 6+ years (or whatever it ended up being). And to that I'd say that this is a guide for predicting future behavior, not a crystal ball that can accurately predict everything forever. And some would argue that the writing was on the wall for Myspace long before it actually went kaput anyway.
So Bitcoin has been around in some form or another for 9+ years, and withstood a huge laundry list of setbacks, tests of its security, and evolution of the ecosystem in the meantime. So it's probably going to stick around for awhile.
Meanwhile, XYZCoin and it's hot new ICO has been around for about five days, so there's nothing to suggest that it's going to stick around for very long and you should be a lot more careful about putting your money into it.
More info on the Lindy Effect: https://en.wikipedia.org/wiki/Lindy_effect
The opposite way to pose this is: Cryptocurrencies have been around for 9+ years, and there has been literally 0 use for it apart from conning rubes on the internet. The important thing to ask is whether it has a purpose and has it delivered on that purpose. There's really only one theoretical purpose that it's meant to serve - being free from tyrannical government. Well that kind of worked when capital fled into it from China - but there's also been crack downs. It also doesn't explain the US fascination.
I think there comes a point where 9 years in, you have to ask: What purpose does cryptocurrency serve beyond enriching people who are already invested.
The externalities. This very thread is about how Bitcoin is messing up power grids and will soon be responsible for a non-negligible percentage of Earth's entire power usage (and the attendant pollution). It's not consequence-free fun.
That's weird, I've been using it to buy stuff off amazon and aliexpress. Am I a conned rube?
Does that mean Visa is conning rubes as well?
How? Neither company seems to accept Bitcoin directly.
You've got some strong arms on you my friend, moving those goal posts so far so fast.
I pay with bitcoin. Stuff arrives in the mail. I am using bitcoin.
>Cryptocurrencies have been around for 9+ years, and there has been literally 0 use for it apart from conning rubes on the internet.
So...
>Yes, you are using Bitcoin
Yes, I am. I don't understand why you two are so angrily and bitterly agreeing with me.
Call it gambling if you will. What is the intrinsic value of a game of blackjack? None, yet an entire industry is propped up by it.
Limited scope and obviously doesn't justify the money that is swirling in crypto right now.
However, if we want digital things to be non-fungible we're probably going to need something like a block chain. Cryptokitties(as beanie-baby-esque as they are) and the implementation of the ERC-271 token come to mind.
Again I realize cryptokittes are not really a great example other than proof of concept, but imagine with me for a second a fine art market where all the art is digital, this requires a decentralized non-fungible token, maybe digital house or car keys would be another thing where we want to limit the number of people with access to the thing, again if we don't want to trust someone like say equifax, with control over that we're going to want a decentralized non-fungible token.
I realize these aren't necessarily the best examples of non-fungible assets we might want one day. However it seems absurd to me that moving forward society won't at some point demand some digital asset that is non-fungible. If that assumption holds true then some form of cypto-currency is going to be necessary to provide such an asset.
Bitcoin has become the gold standard for crypto and many people invest on the basis that there'll be huge growth in the area of blockchain technology and tokenised digital assets in the years to come.
If Bitcoin remains the gold standard for crypto then it's value will rise accordingly.
Isn't that what Bitcoin is doing as well? Capturing people's attention as well as development resources (minds/energy) from some of the smartest people right now?
Crypto is meaningless, stock is actually owning part of a company.
The fact that bitcoin has gone 10 years, with limited use, to me signals just how amazing the technology is. Ten years is nothing for a tech that can last 1000 (or more..).
Bitcoin’s success in Venezuela is because it is a inflation hedge. It has allowed Venezuelaeans to hold on to their savings and out of reach from the government’s ability to confisticate wealth via inflation.
It is working exactly as Satoshi intended it to.
This is the problem that Buffett has with cryptocurrencies.
When you buy shares in a company you are buying claims to its future earnings at least in theory. Theory being that should the company not serve shareholder needs you can force the company to distribute the earnings/dissolve/merge etc etc. (Not going into the whole modern abomination to strip lesser shareholders of their rights to vote as Google, Facebook, Snap have done with their tiered stocks).
When you are buying Bitcoin or any other cryptocurrency and yes that means ICOs too you are buying digital tokens with no claims to anything besides being a proof of having that token. It is solely 'castles in the air' which Keynes so long ago stated regarding stock market but in the stock market it is not the sole factor.
In some ways cryptocurrency is closer to regular currency but not backed by the government's mandate to receive taxes in said currency.
In other ways cryptocurrency is closer to tulips,gold,MagicTheGathering cards in that the value is based on something that some number of people agree on(ie the market).
Except cryptocurrency has no utility besides being a token, wherein tulips, gold and MagicTheGathering cards possess some utility outside being a token of exchange.
Two: I know you said >Not going into the whole modern abomination to strip lesser shareholders of their rights to vote as Google, Facebook, Snap have done with their tiered stocks
However if you want to argue you're problems with crypto (there are many) we need to make arguments using the way things are in the real world.
Given I'm a retail investor. In one universe I place a bet on Snap for 50k. In another I took that same 50k and put it into bitcoin. In both universes my bet goes bad, both asset's price per unit goes to 0. Snap goes through the process of being liquidated. Remember I'm a retail investor, I own common stock.
Now am I better off in one universe over another? I'd argue that I'm not. However if I were Warren Buffet, I'd have been much better off bought Snap as I would have preferred shares.
Buying shares is like investing 50k in your Uncle Eddies seashell harvesting venture. In return you receive 50% share in his venture that is you get half of all future seashells harvested by Eddie.
Buying cryptocurrencies is like giving 50k USD to your Uncle Eddie and getting some seashells back but that is it! There is an active market for these seashells and price goes up and down.
However you do not get to claim any more seashells produced by Uncle Eddie.
Buying common shares implies certain rights to some enterprise while buying cryptocurrencies implies nothing.
There's a fundamental difference between buying shares of a publicly traded company on a regulated exchange and investing in bitcoin. This is quite literally comparing apples and oranges - your examples are not only different in kind, but in purpose. Also, there is a large, rather well funded government institution who aggressively works to make sure the stock market isn't subject to the sorts of abject manipulation, ponzi schemes, and other such unsavoriness that Bitcoin has been subject to. (Side note - watching the Bitcoin market is like watching the last 150 years of finance happen in 2-3 years. It's an interesting object lesson in market manipulation and why the SEC maybe isn't a bad thing).
As to Facebook/Snap being digital crap no one needs - yes. However, just because there's no physical good being created doesn't mean their value is entirely ephemeral/a financial illusion. Facebook/Snap create value by solving a problem people are willing to spend money to solve. Bitcoin creates value by...well it doesn't yet. People invest because they hope that "there'll be huge growth in the area of blockchain technology and tokenised digital assets in the years to come." That's a nice thought, but it's an assumption.
>If Bitcoin remains the gold standard for crypto then it's value will rise accordingly.
It's funny that you mention the gold standard, a standard that was dropped because of its votility, the fact that it was subject to manipulation, and the fact that it benefited some segments of the market FAR more than other.
>...many people invest on the basis that there'll be huge growth in the area of blockchain technology and tokenised digital assets in the years to come.
I think this is undeniably true. However, I think the assumption that bitcoin will be the vehicle for this growth is incorrect, or more charitably, overly optimistic. Bitcoin has accrued a lot of non-technical overhead that I think will prevent it from being used to drive these solutions - things like its association with speculation, the fact that the majority of miners are on the Chinese mainland, etc. I think the growth in blockchain technology will come from companies and individuals taking the concepts of the blockchain and using them to build products with real value (as in, they solve a problem that someone is willing to pay money to have solved). Bitcoin's value (sadly) doesn't come from the technology, which is fascinating and interesting - it comes from the fact that it's created an unregulated market with no barriers to access, which has allowed rampant speculation, incessant hype about 'the technology of the future', and a continual influx of new money to create 'value' that ultimately, has no real value.
That's been the 'investment thesis' for the past 5-8 years.
And people have been bidding these things up ever higher, because any day now someone's going to figure out something actually useful to do with them...
(And in the mean time if some coiners get to skim a little cream from the irrational exuberance, I'm sure they don't mind to do so.)
But where is any coherent trend line supporting claims of huge growth in the area of blockchain technology and tokenised digital assets in the years to come.?
Seems to be wishful thinking that is completely at odds with the reality of these systems.
Am I missing something?
If you want advancement in graphics cards to come more quickly, it’s not a bad trend.
Hopefully both can be achieved.
Precedent isn’t here.
But, if you are willing to say what happened in the yesterday will happen tomorrow, I assume you’ve taken a HELOC put on your house and invested in bitcoin - rift?
People will start taking mining hardware offline. This will result in a lot of idle capacity. There will be a number of people capable of pulling off a 51% attack. And if the hash rate falls very quickly, say 50% in a week, the difficulty adjustment will be unable to keep up. This would have all sorts of nasty effects.
If the price goes to $4000 it should go to zero. That's assuming that the "investors" will behave sensibly, which is never a safe bet.
Will you short bitcoin then?
- people trading 'stocks' in the same way Pokemon / WWF kids trade cards.
- thinking this is actually a long-term 'investment' strategy (well its idiots trading with each other ...)
- to top it off, siphoning off capital and giving a load of shitty excuses 'it could be like Detroit at the beginning of the 20th century.
Many people were left holding pets.com stocks, but others were left holding Amazon stocks.
Most of the things that you point out are truisms that the people that have been in the bitcoin space for a few years also see. I would suggest you make an effort, and try to see through all the bullshit projects or outright scams, and you will see that there is real value in what bitcoin and a handful of other projects are trying to build. If you want to avoid the current noise, read what cypherpunks were writing about in 1998: http://cypherpunks.venona.com/date/1998/12/msg00203.html
Amazon and Pets.com didn’t possess truly novel tech, to a trained eye
I don’t think truly novel tech matters much to most people.
I think ease of utilitarian life is good enough
We don’t need the energy sucking monstrosity that are the data centers we have if we looked at different models of commerce
This is just getting people to be tribal over something that appears magical but will fade out
Goodhart’s Law, Buffets Institutional imperative, and similar ideas, will win out. Human quest for novelty will end bitcoin and its tribal urges for nostalgia and fetishizing their LEGO train
Humanity doesn’t care to ogle dead men’s workshops showcasing their individual brilliance for long
10 years into Bitcoin there's still no reason for someone to buy in other than speculation. It's not competitive as a currency and the current “store of value” pivot is undercut by the lack of fundamentals. One particular reason why that comparison doesn't work is that if you had, say, bought AMZN in 1997 even if the stock didn't do great you owned part of a profitable book seller which could carry on just fine even if it never saw rapid growth. Bitcoin doesn't have any value other than its current popularity so there's no floor on the losses if people switch to something else.
1. I actually sat in on some calls with Pets.com around the time one of our clients was thinking about buying them and it was quickly evident that they had no strategy beyond cashing out at the IPO.
Besides, if I lived in Venezuela or Russia, would I really want to record my black market activities in a public ledger which is hard to disavow?
>10 years into Bitcoin there's still no reason for someone to buy in other than speculation
This is simply completely wrong, perhaps you should research the subject a little bit more.
I’m not saying it can’t be used but just that there aren’t many reasons other than speculation or an ideological stance. If I was, say, the corner coffee shop what would balance out the extra fees, delays, and lack of fraud protection?
The other reason it matters is that if something is primarily used for illegal activities that'll really hold back the whole system: most businesses aren't going to offer a payment option which makes them look shady, people are going to hesitate to use have the software installed, running an exchange will be even riskier, etc.
For Bitcoin in particular, there's also the practical risk that doing something illegal in a public ledger with non-repudiation guarantees is not generally a good call.
It sounds like you are talking about credit cards and not bitcoin.
Compared to credit cards, bitcoin has extremely low fees and fast payments. The fraud protection for merchants is far superior compared to any credit card payment solution.
It seems pretty obvious that most people spreading this kind of bullshit have never actually tried to use bitcoin, and have instead built their knowledge based on forum posts by other uninformed people.
Take a look at what is happening in Venezuela with bitcoin, and you will see why your statement is wrong. The fact bitcoin, an open source project, continues to flourish with some of the brightest minds in computer science ten years after its foundation speaks to its core strength: the removal of trust.
I sold an old phone through traditional fiat a few months ago, it took paypal 3 weeks to process my payment. With bitcoin, I could have been paid with in the hour.
Is anybody actually using Bitcoin as a currency in Venezuela? I can only find references to people mining excessively there because the electricity is so subsidized.
Most people in the west have about the same use for gold[0] and bitcoin - speculation, gamble, "investment". However, people of Venezuela, Turkey, Libya, Iran and even Russia have a lot of use for gold (and bitcoin): A store of value they can take with them if they leave. And unlike gold, bitcoin can be made confiscation proof. The official currencies of these places have more volatility and less stability than BTC.
[0] Gold does have ornamental and industrial use, but that's NOT why people buy it, and not why it is valued the way it is. The "investment" claims on gold outnumbers the industrial/ornamental claims by some 3 or 4 orders of magnitude.
At this point in time, the same is certainly not true for the people of Iran or Venezuela, where there are capital controls, and the only way to get a different currency is on the black market. Effectively, compared to the west, everyone there is "on the wrong side of the government".
> There’s zero reason in principle that it is any harder or easier for an oppressive government to prevent capital outflows to bitcoin than to British bank accounts.
In principle that's true, but that just makes bitcoin's raison d'etre more evident. At this point in time it does not seem to be needed, but it may become needed with less than a day's notice. This has happened to the people of Cyprus (a "western" European country). Even the US confiscated gold in the 1930's.
History does not repeat, but it rhymes. Bitcoin is a hedge; it's far from perfect, it has a lot of drawbacks, but at this point in time , it is more useful than gold for people who might have to flee.
The dark hints about how any government may become oppressive is a red herring. The issue isn’t that bitcoin isn’t needed because my government isn’t currently oppressive, it’s that bitcoin’s utility in the face of an oppressive government is wildly exaggerated.
You are attributing magic powers to bitcoins that they do not have. Black markets are not invulnerable to government crackdowns because they are digital. On the contrary, digital networks are in many ways easier to control centrally than distributed underground physical networks.
This especially bad for Bitcoin since unlike cash they’d get your full history and quickly deanonymize everyone you know.
Is it still as easy? Probably not, I'm not up to date. Could people who have done that get in trouble for that in the future (thanks to bitcoins long memory)? possibly, if their opsec wasn't top notch and even if it was top-notch but they were unlucky enough to use a mixer that cooperates with the chinese government.
And Erdogan's turkey is also a great example; While the "coup" was happening, it was possible, even easy, to move money out of the country using bitcoin (not so fiat money). Quite a few people left the country afterwards, and many were arrested regardless of phone app. I don't know how many of them took their wealth with them in bitcoin, but they had much easier time doing that than any other way. at the time
But if you have managed to acquire bitcoin, e.g. before a government crackdown, or some other way through help from people in other countries, it still provides the "cross border value store" function that gold cannot by virtue of being hard to move.
> There’s nothing to stop an oppressive government from preventing its people from buying bitcoin the same as they prevent them from buying pounds and wiring them to British banks.
There's also nothing to stop an oppressive government from killing its people (and some do). But oppressive is not binary, and people have used bitcoin to "smuggle" money out of (at least) Venezuela and China, despite capital controls and government crackdown, in ways that they weren't able to do with british pounds (and which would have been much harder and riskier with physical gold).
> You are attributing magic powers to bitcoins that they do not have. Black markets are not invulnerable to government crackdowns because they are digital. On the contrary, digital networks are in many ways easier to control centrally than distributed underground physical networks.
I am not attributing any magic powers. I am observing the reality as it happens now ; governments crack down on digital networks and black markets but it's much, much harder for them to shut down than bank transfers.
To stop bank transfers, all you need to do these days as a government is click the right button. To take down the Silk Road, the US government took many months and a lot of work; an oppressive regime might have done that more quickly and swiftly, but it would still have taken considerably more effort than shutting down wire transfers. The special feature cryptocurrencies have is ease of carrying across borders .
> The dark hints about how any government may become oppressive is a red herring. The issue isn’t that bitcoin isn’t needed because my government isn’t currently oppressive, it’s that bitcoins utility in the face of an oppressive government is wildly exaggerated.
Oppressive is not binary. Cypriots were (perhaps still are) subjected to very strict capital controls, with no attempt to crackdown on bitcoin.
I am not lamenting the downfall of Silk Road - I think it should have been shut down. I was pointing out that "an oppressive government can do everything" is a weak argument, because we have experience showing the limit and effort needed.
All I am saying that bitcoin has some of the same uses that gold has, albeit in an easier-to-carry-across-border and harder-to-confiscate way -- which was a response to G-G-..-G-P saying "bitcoin has found no use".
Now, "illegal" is a problematic word, because it is a technical definition that changes with time and location. It is now legal to own gold in the US, and it was legal in the 1920's but it was illegal to do so in the 1930s. Gold was confiscated, and (since USD was still denominated in gold at the time), it's value in USD was doubled overnight, or rather, the value of USD in gold was halved overnight.
It is still illegal for an unmarried couple to kiss, perhaps even hold hands in public, in the Saudi Arabia.
The technical legality of owning gold in this case is an interesting discussion, but I am interested in the properties and implications of an un-confiscatable store of value, which in some (limited) ways cryptocurrencies are. It keeps governments in check in a way that fiat currency cannot.
Unless you believe every single government anywhere in the world is, at all times, always "just" and "right" and "good" (for whatever definitions of those adjectives), then it is a good that some "illegal" acts in some places and some times have mitigations. And at this point in time, bitcoin provides these mitigations for the people of venezuela and iran, and has provided them earlier for the people of china.
Afaik Bitcoin is handled the same as cash: they don't really check how much you have, but they will come down hard when you start spending more than you should be able to.
Technically, how can they confiscate them? They cannot.
They can tax them 100% or 150%, true. And they can imprison or kill their taxpayers if they with. true.
But if I managed to cross the border from (hypothetically) malicious Sweden to (hypothetically) benevolent Liberia, with the private key in my head, what can they do about it?
They can, and money governments in the past have, deny me passage with anything of value but my clothes - it is often the case that anything of value gets taken at the border (hell, it is likely the US will take anything above $10,000 on your person unless you are very well equipped legally). But there is no technical way for them to do that with bitcoin, and for that matter to even know that you carry the private key of a $1B wallet in your head, unless they have researched it before hand -- which, at last for now, is hard to do for the entire population.
> To me it seems more like a digital crap honestly and I can’t wait for the day when it finally disappears.
Art pieces that go for >$1M feels like analog organic crap. But the value is determined by the market, not but our feeling.
> Sadly it will be in any case too late given the massive amount of energy and co2 thrown away..
I agree bitcoin is likely wasting significant energy and co2, but ...
Have your ever seen a rough estimate of the costs (in resources / energy / co2) that our existing monetary system imposes? It is certainly not free, and e.g. in a lot of places more than 1% of real-estate / energy is consumed by financial entities, many of which have usefulness to society arguably comparable to bitcoin.
I have looked for a study as such and has not found one.
(sidenote: some estimates are that 1% of global energy use goes towards clothes drying. probably provides even less value to society than bitcoin)
If you're comparing with the Internet, I'd say 10 years is still quite early into the Bitcoin and Blockchain space. You could say the Internet of 1999 was almost 15-20 years of development from the time TCP/IP was introduced on the ARPANET.
With the attention that Blockchain has received in the past year and the sheer number of smart people working in this field (yes there are plenty of scammers as well but you can't deny smart people are flocking to it right now), I'm pretty sure you'll be surprised of what it looks like in just another 3 years or so.
More interestingly, however, is that Internet was difficult to get and expensive throughout most of that period, not to mention the slow and expensive connection speeds of that era, all of which limited adoption substantially. Even with those barriers to adoption, however, there was plenty of demand because it was immediately useful to have email, Usenet (at least in technical fields), FTP, etc. even before the explosion of activity around the web. When the web boomed, millions of people paid (often by the minute) to surf it at 56K or less.
In contrast, Bitcoin has been available to almost anyone on the Internet for many years without anything like those barriers to adoption but most people haven't had a reason to care.
You could just as easily point out that investing in beanie babies looked stupid, or any of a number of other totally failed ideas seemed stupid.
Most things fail. Your comparison adds no meaningful information and is attempting to mislead based on fallacious reasoning.
I wasn't trying to make any comparisons, since these are two very different situations.
If you had said blockchain vs internet then it might have made for a marginally plausible line of reasoning. Blockchain at least has some proven real life applications that scale.
Lasing out against noise or heat I can understand, but unless electricity is being subsidized, I can't fathom the line of logic people take to justify lashing out against how someone chooses to use electricity they're pay for.
I suspect it's due to irrational hate rather than sound reasoning.
Furthermore, electricity prices do no include environmental externalities. So when you burn so much electricity for things that many people deem wasteful, those people do have reasons to get pissed and yell at you in the internet. Wellcome to modern society!
Humans are hilarious. Anyone here old enough to remember the dot-com boom with absurd business models, that, when questioned, got the response that you obviously just don't 'get it'.
Proof of energy consuming work as currency is a sure path to environmental catastrophe.
https://www.itnews.com.au/news/turnbull-directed-dta-to-stud...
“Lots of vendors were [also] coming to government and talking about blockchain.”
Not a good way to determine expenditure...
If your computer could do your work for you, leaving you to do whatever you want in life, why would you NOT want that? The stupidity is that we are not all doing this, that we are not tearing down the halls of congress for cheaper power collection methods. What is crazy is that we never demand accountability from our traditional finance system, leaving us to trust a few tremendously wealthy individuals who have no obligation to the rest of society. With bitcoin, there is no trust, in fact this is even a key feature: remove the trust. I think this is an idea that is very powerful, and is something that people like.
If you are looking at bitcoin as an investment, then you are already looking at it all wrong. This isn't about investing, its about financial independence.
I would suggest you look into the fundamentals again.
So this leaves me to do what I want. I can get another job, or not. Who wouldn't want this? Its a simple idea, trade computation for social mobility. There are people doing this all over Venezuela right now.
It stuck pretty hard with me. The truth about bitcoin is like beaniebabies they have no value, and despite concensus other wise could at any time be ruined by the decisions of a dozen people or so. Anyone that still believes the “it’s decentralized!!” just because the database is - nonsense has a dose of reality coming.
Do I wish I would have gotten in at $5, yea, would I have sold at $20 not $20,000 almost certainly. But it’s over, it’s a fools game now.
If all you want to continue posting emotional comments on how much you hate bitcoin, then by all means I wont stop you. but to attempt to dismiss the currency as a toy strikes me as delusional and a bit sad. Approach this issue (and any other) with a level head. Don't let emotions take control you like this.
Add the power usage, the graphic card shortage and the illegal activities and I suspect you're two to three order of magnitude larger than legitimate uses. Sooner or later cryptocurrencies will get banned, or at least fully regulated.
If you want to continue shouting, be my guest. The rest of use will continue accepting and transacting with these currencies.
Even more idiotic is that it apparently depends on the size of your house, so if you have a larger home, you get more cheap electricity.
If they use more than their fair allocation everyone else on the grid is subsidizing them so they get charged more to prevent a subsidy. If they use less than their fair allocation they subsidize other people so they're charged less to prevent subsidy.
The electric grid and the electricity that flows over it is a public utility not a commodity.
Edit: Is unpopular42 a throwaway account that you upvote with your main?
Sure, the industrial operations are the ones getting articles and showcases and blog posts, but at the same time I've seen plenty of news articles of police busting some kid for scamming/drug charges and catching him with 100 gpus in his room.
Anecdotally i've shipped a ton of equipment to Wenatchee and every operation I've done business with has been in an industrial warehouse.
The local government could then issue out checks to everyone if they want, but more likely it would go towards general budget and benefit everyone.
See Chicago for an incredible example of this:
https://chicago.suntimes.com/news/parking-meters-garages-too...
Property owners in cities receive similar dividends all the time, in the form of rising property prices.
It's the same reason for why groceries in Alaska are more expensive then groceries in Florida.
I wonder what source they will use in response. Generators, solar, move to Quebec?
My problem with that statement is that it doesn't actually answer the question -- it smacks of journalistic supposition and no root facts.
I can run two refrigerators, two freezers and an AC unit all day and night and push myself into the top tier of energy usage, being the equivalent of a closet full of computers running 24/7, but all that would do is push myself into the top tier and cost me lots of moolah -- what's the line between authorized and unauthorized?
Unless those people are bypassing breakers I don’t see what’s the big deal. If the electrical company tells you that you can draw 20A and gives you a 20A breaker then you should be allowed to use it.
> In one instance last year, the transformer outside a bootleg miner’s home overheated and touched off a grass fire, Chelan County PUD officials say.
If a transformer is rated to supply 1000A then you should not under any circumstances allow more to be drawn from it.
However when you sign up for Services you sign up for a given Amp level of service, the Power company then has the expectation to be able to supply you with that level of current at that location
Most residential Homes have either 100 or 200amp service. 100amp service would probably be enough to run about 50 cards (assuming each card running at at 250w power draw that may be high no idea)
That's why they have a different service for business users. If they were equipped to service every home at 100% all of the time, your bill would be about 10x what it currently is.
Another solution is to make a proper “burstable” tariff with the corresponding meter that would give you a baseline current allowance plus a peak current allowance for X seconds.
As it stands however they are selling packages promising X amps and are pissed off because someone is actually using X amps. Well they definitely don’t earn any sympathy from me - this kind of behaviour reeks of scum.
Look, I dislike Bitcoin too, but what I dislike even more is companies making money promising X and then actually cutting you off should you dare to use that X. At the moment, the "miners" are paying for an energy tariff that promises them X and are using X; the fact they're using it on Bitcoin is completely irrelevant, the problem is that a company is making money on false promises and somehow the buyer is the one at fault?
We've already got this bullshit with "unlimited" data, let's not set a precedent by tolerating this for energy tariffs. If the grid can't sustain everyone using 100 amps then they shouldn't be selling 100 amp tariffs and should switch to "burstable" tariffs with a continuous allowance of let's say 50 amps and a "burst" allowance of 100 amps for X seconds.
I'm going to assume you don't live in the US, or haven't ever actually built a new house. You are absolutely not promised the full usage 100% of the time. And they're very clear about that. It's why you must hire a licensed electrician to fill out a load sheet before they'll put a shovel in the ground or a ladder in the air to run service to your premises.
I'm not sure why you keep claiming that, but there isn't a power company in the US that had EVER promised a residential Customer that they could use 100% of the rated line all the time.
The term "industrial" usually applies to scale.
> Where a portion of a dwelling is used regularly for the conduct of business or where a portion of the electricity supplied is used for other than domestic and incidental farm power, service may be supplied on this Schedule, provided the energy used is in accordance with the regulations defined in Sections 43 and 44 of the District’s Utility Service Regulations. If not, energy shall be billed on General Service Schedule 2.
https://www.chelanpud.org/docs/default-source/default-docume... (I don't believe the Section 43/44 exception applies, as it is discussing temporary service per https://www.chelanpud.org/docs/default-source/default-docume...)
For miners that have negotiated a non-residential supply, there are additional terms that apply (e.g. HIGH DENSITY LOAD Schedule 35) that the miners _may_ not be complying with.
There's a lot to chew on here. The Alcoa plant story is practically a cliche. Yet another instance of what a world overflowing with cheap stuff looks like.
The loss of the Alcoa plant means an ever bigger oversupply of electricity. Chelan County seems to have nothing to fill the gap. Why not sell the surplus to a buyer who will use the power locally?
Who decides that an aluminum manufacturer is any more or less a legitimate business than an Bitcoin miner?
That way the average person on the street doesn't lose, yet the miners are encouraged to get lost.
This leaves the utility with a dilemma. Bitcoin miners can up and move pretty easily, but the hydro dams are stuck for life. If somewhere cheaper pops up, or if a double spend attack causes a bitocalpyse, the utility has little recourse but to pass on the costs to remaining consumers.
There are already solutions in the article:
> The three PUDs have been experimenting with policies that force miners to shoulder these extra costs and risks, while insulating ratepayers and the utilities themselves.
>1 .Chelan County, for example, created a special rate for miners and other so-called “high density loads,” or HDLs, back in 2015, that was effectively twice the residential rate.
> 2. Douglas County, meanwhile, began requiring miners to pay up front for any new infrastructure.
> 3. Grant County PUD is establishing special rates applied to companies “whose primary revenue stream is evolving and unproven” and whose product is “vulnerable to extreme value fluctuations.”
Which is a roundabout way of saying my state is giving away money to people intentionally wasting power for personal gain under the false impression this is good for the economy.
So that'll never happen.
"Beginning Jan. 1, 2012, Chelan County PUD moved to a flat residential rate for electricity of just 2.7 cents per kilowatt hour."[1]
"energy costs can run as low as 2.88¢ per kWh and average 4.13¢ per kWh statewide for industrial customers." [2]
[1] https://www.chelanpud.org/my-pud-services/rates-and-policies
[2] http://choosewashingtonstate.com/why-washington/our-strength...
[edit] The parent article does state a price of 3cents/kwh.
Wow. Any municipality who falls for this crock of shit would be crazy.
Since this argument has been made however, they could make local prices contingent on number of jobs. If you consume x power employing less than y local employees, pay the export rate.
In this way, they can protect their power industry and still remain attractive to other businesses who might bring other benefits to the area without having to redefine who is and isn’t allowed.
> In other cases, utility crews responding to unusual spikes in power usage have found racks of remotely controlled servers whirring away in empty apartments.
House and apartment rental and sale prices are lower than the Seattle area as well. You could rent a 1 bedroom apartment as a "weekend getaway studio with attached server room".
One alternative that would drive their intentions is that Bitcoin miners must be Washington State businesses, registered in state and with offices in-state. There are work-arounds for this, but it's another hurdle for foreign groups to overcome.
If approved you now have a commercially rated site and have to pay 'business rates' (local tax based on the value of the property and the use it is put to) to the local authority. Sounds like there is a lot of opportunity to charge potential miners...
I think even commercial electric rates in the UK are around £0.17 kwh, so mining is not likely to trouble us any time soon!
A normal home does not have a server room however.
I’d very much prefer a quiet white noise from the racks in the above unit than someone arguing at 3am or a stupid toddler screaming. You can easily tune out “stable” noise like the one produced by fans, but you can’t for irregular noise like people talking or someone dropping heavy stuff at night.
Until you factor in the risk of fire, environmental impact, and the fact that when bitcoin goes bust which will ultimately happen (nothing lasts forever), the county will be left holding the bag in a similar fashion to other major industries of old.
Is it actually riskier than a resident living in the same place? I don’t think so.
A faulty mining installation would catch fire early on, and if that doesn’t occur then it’s mostly safe. A resident on the other hand would be using risky appliances every day (cooker, oven, heating, hair dryer, etc), which combined with the potential human error, seems like a bigger risk.
> environmental impact
How does zoning change this in any way? Whether you’re drawing tons of energy from a residential or commercial building doesn’t change the fact that energy could be damaging the environment. I’d argue that in this particular case though, the energy we’re talking about is from a hydroelectric plant and so fully renewable.
> the county will be left holding the bag
What would that “bag” be? Sure, the miners would pull out, but then the town would be back at the exact situation as before mining, albeit with an upgraded electrical and network infrastructure paid by the miners - I don’t see how this is a bad thing.
If you don’t see the difference between a household appliance that sporadically uses some electricity vs a mining ring that continually draws very high current on wire not rated for that usage, then I guess we can’t have an intellectual discussion. Especially as the source article mentions miner fires that have already happened. Heck, depending on the age of the place, it could still be aluminum wiring even which is even worse.
> How does zoning change this in any way?
You don’t think all these new infrastructure that will ultimately go to waste doesn’t have an environtal impact?
> albeit with an upgraded electrical and network infrastructure paid by the miners
You think a short (as in anything under 5+ years) lived burst in electricity sales will pay for all that infrastructure they need to build? Especially as they could make more money exporting that capacity via existing infrastructure to other areas?
Getting more power to your place is between the power company and property owner not the government, I can get as much power feeds as the power company will sell me, and generally they will only ask question related to saftey. Want 400amp service to your Garage, no problem 99.9% of the time
Aside from this hyperbolic statement being completely unfeasible and moronic on its face, provided there is not clear, articulable danger to my person or my propery you should be allowed to do anything you want on your property, including running BitCoin Miners.
if you cross into posing a direct and articulable danger to others then that can be address on a case by case basis, but the comments I was responding to were going on about "commercial use of property" and how they could not believe in the US a person was allowed to run any mining equipment in a residential home. No where did any the commenters I was replying to stated any articulable dangers they were concerned with.
Let me as you this, do you support zoning regulation on this like color of the home, if you have a garden on your front yard, the type and height of grass (or mandates that you have grass) etc etc etc etc
Which is why I went on the clear negatives that it poses.
> do you support zoning regulation on this like color of the home, if you have a garden on your front yard, the type and height of grass (or mandates that you have grass)
No, but I was not arguing that the government _should_ be able to regulate _everything_, but that when negative effects can be identified, "it is in the privacy of my own home" is not enough to counter that -- the negative effects spread beyond your home, and detrimentally effect others (in a concrete way, not just that it is something they don't like).
Yes, HN has a long history of being Authoritarian. Libertarian views are not welcome here.
For example, the electricity provider probably objects precisely when the current you're drawing exceeds the safe limits of their equipment and wiring. If they're particularly on the ball, they at least come investigate as soon as they notice an unusually high current-draw for that individual residence.
You're generally free to exceed the safety limits of the equipment and wiring within your own structure, since you pay all the costs of any resulting incident/accident. But if you're covering those costs via a homeowner's insurance policy, that policy/company might have some things to say about current loads and building codes, as prerequisites for covering you.
In a rental property your ability to run mining rigs would depend on the lease, and the landlord's degree of vigilance in monitoring unusual electrical loads. If there's an incident or fire due to current-draw nobody noticed, it probably ends up in court. If you promised (by signing a lease with a relevant clause in it) that you wouldn't engage in excessive current-drawing activities, you lose that case pretty much instantly. Otherwise it'll be up to their side to prove that your negligence caused any losses or damages to the landlord's property, not to mention other tenants' property if they also sue you.
The comment I was replying to specifically says they do...
Bitcoin is the new monorail.
https://www.trustnodes.com/2018/04/28/australias-dirtiest-co...
1) This is unfair, because it drives up local costs for everyone without providing local economic benefit.
2) I argue this is still unfair, because the export rate alone does not capture the value and revenue of the ability to provide backup power services (i.e. load shaping+ and firming generation++).
Across the northern border, BC Hydro has also been flooded with miners asking to purchase power. The province is powered ~98 % by hydro and residential electricity rates are ~0.07 – 0.09 $US/kWh. Power export services subsidize local rates. Revenue from export services (~15 %) & revenue from local rate payers are set to recover utility costs, while maximizing economic benefit to the province. The export rate (i.e. the price of electricity that physically flows across the border) represents only a fraction of the revenue from export services. Hydro exports have the ability to shape load+ and firm contracts for power++. The key is that power doesn’t necessarily flow across the border when load shaping and firming contracts are in place. But customers pay good money for the ability to call upon that power when it is needed. That ability is diminished by the additional electricity demand of miners. The value of that ability is not captured in the raw export rate.
+load shaping service: Import/export power so that the net-load a customer sees matches that customer’s contracted or self-generation.
++firming generation: Provide backup power to a customer who has agreed to provide power to a third party at a certain time. Should the generators of the customer fail, the exporter will quickly ramp up production to fill the gap.
---
To those calling for “free markets”:
Determining a fair rate to charge miners is difficult, because the economics of hydro power systems work differently than most other liberalized electricity markets. In liberalized markets, all generators bid how much electricity they are willing to supply at which cost, for the next hour or so. Then you stack all the cheapest generators until your demand is satisfied and, voila, that last dispatched generator dictates your market price for that hour. Large consumers can buy electricity at that fluctuating market rate, or choose to shut down. Here, miners would pay the marginal cost, fair enough. Markets with large hydro power stations can’t work like that. Withholding a large dam from generating electricity gives the operator enough “market power” to be the price-setting generator every hour year round, which gives that operator the ability to dictate prices.
(edits: formatting)
But if the utilities are selling more of their power to local Bitcoin miners, they’re exporting less power at those premium prices, which makes it harder to keep local rates low. Further, because much of the surplus is currently committed in long-term contracts, supplying miners with all the megawatts they want might require the utilities do something virtually unprecedented: buy power on the open market, at prices far above what locals have come to expect.
Solution: pass a law to charge miners export prices. It’s not as though Bitcoin mining helps the local economy, so you either return revenues to pre-mining levels, or drive the leeches out. Either outcome is equivalent.
Of course, if you'd like to propose some less intrusive solution I'm sure both we and the people of Central Washington would be all ears.
It's because the way to fix a bad law is to pass another law. Otherwise you're saying we should keep the bad laws we have and work around it some other way.
Sometimes fixing the symptoms actually is better, but it's not surprising when people suggest changing the code.
Now they find they can't supply export power and local power because their crystal ball didn't predict there would be a power hungry technology moving in.
But yeah, raise the prices I say.
A-8: Yes, when a taxpayer successfully “mines” virtual currency, the fair market value of the virtual currency as of the date of receipt is includible in gross income. (...)
A-9: If a taxpayer’s “mining” of virtual currency constitutes a trade or business, and the “mining” activity is not undertaken by the taxpayer as an employee, the net earnings from self-employment (generally, gross income derived from carrying on a trade or business less allowable deductions) resulting from those activities constitute self-employment income and are subject to the self-employment tax.
Since they sell excess above local prices, all local usage drives up local prices.
This would be different though, targeting a business to pay more than other commercial enterprises. That's a targeted disincentive, and if not structured generically and applied fairly it's bad policy. Seems hardly different than Comcast deliberately slowing Netflix down, not to extract revenue, but to put them out of business.
In this case, due to the fact that by taking the town's total usage up, they raise the costs for everyone in the town, you could also just see as internalizing an externality.