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Comment by gotocake | Hacker News Reader

The comments seem to honestly reflect the state of the technology, its environmental impact, the annoyance factor of its extreme adherents, the total lack of a really compelling non-ideological or criminal use case after more than a decade, and a deflating bubble. The insane gulf between the promises made by the “every day brings a new breakthrough” crowd and the reality of ICO’s and Bitcoin is vast, and hard to ignore. Blockchain is a neat idea, but presently it is used in ways that are far from compelling, and I’m yet to hear of a non-hypothetical application that could change that (apart from buying drugs, or money laundering).

It’s also hard to forget the last few years of relentless evangelism, which was equal parts annoying and ethically challenged.

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The comments reflect the (perceived) state of the technology.

One has to admit that the reputation of the entire space has been tarnished by snake oil salesmen. For some historical context it is worth looking at countless examples such as the Railway Mania[1] of the 1840s or the more recent Dot-Com bubble[2]. For more depth one can read Mackay[3].

Some of the most promising advancements in payment channels were only published as papers in 2016[4] and are understandably still being implemented. If anything the speed at which enthusiasts are willing to deploy experimental software at their own risk is breathtaking.

Regarding the environmental impact of the Bitcoin network, while being widely derided for its energy use, it is in fact using less electricity than the major credit card networks. It is also using less energy than global gold mining. There are ways to reduce consumption should a consensus accept the tradeoffs.

The term "Blockchain" as it is currently used often refers to private chains which are in vogue with corporate stakeholders. This appears to be a solution in search of a problem–I have not been able to identify a compelling use case here either.

Most ICOs are outright scams.

It is truly unfortunate that promising advancements of micropayments, smart contracts and the world's closet thing to an incorruptible currency are lumped together with so much rubbish.

[1]https://en.wikipedia.org/wiki/Railway_Mania [2]https://en.wikipedia.org/wiki/Dot-com_bubble [3]https://en.wikipedia.org/wiki/Extraordinary_Popular_Delusion... [4]https://lightning.network/lightning-network-paper.pdf

Do you have a source on the electricity use of major card networks?

Lightning is broken, sadly - not enough trust.

It was part of a talk by Anthony Towns at Scaling Bitcoin 2018 in Tokyo.

https://youtu.be/y8hJ0VTPE34

I suggest you ask him e.g. on Twitter: https://twitter.com/ajtowns

I think the jury is still out on Lightning.

> Lightning is broken, sadly - not enough trust.

Can you elaborate on this?

In short, people aren't holding enough value in their online node accounts.

Here's a short article on the phenomenon: https://thenextweb.com/hardfork/2018/06/26/lighting-network-...

" it is in fact using less electricity than the major credit card networks." - citation needed

I should have been more careful in my wording here.

What I meant by this is the total energy expenditure of current payment systems (Credit cards, PayPal, WeChat Pay, Alipay, SWIFT, ACH, SEPA) including the overhead of fraud detection, chargebacks and the cost of fees on the economy.

To be entirely fair you would also factor in the cost of QE & inflation.

Although cryptocurrency isn’t widely used as such, notarization and its associated costs could also be taken into account.

All of these factors are obviously extremely difficult to estimate properly.

I still stand by my assertion that a mature cryptocurrency would be less costly for the global economy than the current systems of regional central banking and the damaging credit & debt cycles it brings with it.

> the Bitcoin network, while being widely derided for its energy use, it is in fact using less electricity than the major credit card networks

Isn't this kind of like comparing a moped to a big rig in terms of transaction rate?

> Regarding the environmental impact of the Bitcoin network, while being widely derided for its energy use, it is in fact using less electricity than the major credit card networks. It is also using less energy than global gold mining. There are ways to reduce consumption should a consensus accept the tradeoffs.

That's not the point. The issue is with its growth trajectory.

Setting aside how little Bitcoin network can handle vs. major credit cards per unit of energy used, the "mainstream" financial system treats energy use as waste that has to be minimized. Per constant number of players, it is expected to stay stable or even decrease. Bitcoin treats energy use as a security feature, and is designed up front to grow it continuously. Per constant number of players, it'll still grow fast as the difficulty of mining is increased. Even with growing populations, mainstream system seems at worst O(n log n), and Bitcoin is definitely faster[0].

Another thing is - the mainstream financial system already works, and does its job well. Bitcoin is seen as a way for some mix of greedy and politically fringe types to make money quick, exploiting cheap electricity.

[0] - I'm giving a tentative O(n^2) here, I have a feeling it might be faster, but didn't check it. I'd love if someone could list here the sources of growth of energy usage in Bitcoin network.

Yes, the expenditure of energy is a defining feature of Proof of Work security, however there is going to be a plateau.

The immutable base layer Bitcoin provides is also on a trajectory of feature completion and second layer technology will increase the amount of transactions per kWh tremendously.

Who knows what benefits micropayments or smart contracts are poised to bring to further increase the efficiency of the global economy?

If you can’t offer a concrete example of more efficient micropayments or useful smart contracts, you’re basically talking about how great the second coming of Jesus might be.

> using less electricity than the major credit card networks

I googled around for "Bitcoin vs. VISA energy consumption"; the only argument I found in favor of VISA using more is here [0]. This compares Bitcoin to the entire global banking system, including the cost of e.g. keeping the lights on at physical bank branches. It very approximately guesstimates that the entire global banking system requires ~100 TWh/year, compared to Bitcoin's ~30 TWh/year [1].

For comparison: all data centers worldwide combined use about ~400 TWh/year [2]. I very much doubt that the credit card networks account for 7% of all data center energy consumption.

[0] https://hackernoon.com/the-bitcoin-vs-visa-electricity-consu...

[1] https://arstechnica.com/tech-policy/2017/12/bitcoins-insane-...

[2] https://www.forbes.com/sites/forbestechcouncil/2017/12/15/wh...

@corv come on, even if we go with the incredibly generous hypothesis that Bitcoin alone currently uses 1/3 the energy of the entire global banking system including physical lamps at desks (!!!), it is still only providing a tiny, teeny, percentage of the value store or of transaction volume. It's not even remotely a fair comparison. It's like saying my car consumes 1/3 of the world's entire output of gasoline so it's way more efficient than the sum total of all the transportation on the planet.

I didn’t say it’s currently more efficient. I’m saying what it is designed to replace eventually, is already using more energy.

Currencies are adopted and developed on a different time scale than most other technologies we are used to.

Saying cryptocurrency has failed after being around for 10 years is shortsighted and not giving the incredible minds working on these problems enough credit.

It's designed to be actively anti-efficient. The more efficient tech is deployed the less efficient Bitcoin gets. It's already atrocious, and it's going to get more-so, on purpose. What it's designed to replace is using more energy (maybe) because it serves like 3 orders of magnitude more customers, value and transaction volume. A single BTC payment takes 826kWh of energy. Now, a MacBook Pro uses at most 85W, so for a single payment on Bitcoin network you could run your laptop for almost 10,000 hours -- or your house for a WEEK. That's stunning, and only going up (again, intentionally).

Visa OTOH is around 41Wh per transaction, or 20,000x more efficient.

You’ve ignored second-layer technologies.

There need be only one decentralized, immutable ledger to handle all transactions, the store of value and registration of assets for the entire planet.

While we’re comparing Apples and Oranges, credit cards don’t confirm payments for weeks and there are significant fees associated with accepting transactions, apart from that risk for the merchant.

Nope, I haven't. The anti-efficiency element applies to core Bitcoin no matter what you run on top of it. If you keep to the maximum 7tx/sec that's what you'll encounter. I can't imagine a world where no matter what you're running L2 that the system won't hit that incredibly low limit.

Second layer technologies, in the form of exchanges, aren't blockchain at all. They're just varying degrees of fly-by-night bookkeeping and/or settlement. They require blockchain tokens as much as they require the dollar - not at all.

There's no viable L2 technology right now that anyone is using (especially LN) yet, so it's too early to speculate. If I recall correctly it takes a traditional transaction to open a channel, and we're still capped at 7 per second. If there's 7.5 billion people on earth and we want to establish a channel for each of them, well, buckle up, we'll be here melting the Earth for 1.071 BILLION seconds, or 34 years. Just to open channels. Then another 34 years to close them. Here's a mathematical proof of the LN issues [1].

Hand-waving and pretending there's a path or some solution today means we're not even talking about objective reality anymore.

[1] https://medium.com/@jonaldfyookball/mathematical-proof-that-...

A useful metric would be energy consumption per transaction. Visa alone processes about 1700 transactions per second, Bitcoin 3 per second.

Bitcoin is essentially unused compared to the world economy, yet consumes a comparable amount of energy.

> the reputation of the entire space has been tarnished by snake oil salesmen

The market for snake oil wasn't much without the salespeople in the end though, was it?

This "I don't see a use-case for my very limited life/experience/work" is very toxic.

I use Bitcoin to get paid and to pay. That is legitimate. I know a lot of people that uses it for the same reason. There is also a whole lot people using it to evade capital controls; which is modern day repression on freedoms.

Also what is wrong about buying "drugs"? Would you say the same about an encrypted messaging platform that operates in China. That the user should not use it since China did not approve that?

The compelling usecase is censorship resistant financial transactions.

The fact that you have never been subject to financial censorship puts you in a priviledged position that you are fortunate to be in.

I am similarly priviledged in that I have never needed to use TOR, but I still recognize the extreme value of something like TOR brings for the billions of people in the world who live under oppressive, censoring governments.

I simply dont like the idea that the government will print more money.

Mainstream 'economics' might not like a deflationary currency, but since the last economic collapse was 10 years ago, I don't exactly trust 'economics'.

There are 21,000,000 BTC ever ever ever.

I have 2 problems with this line of argument that I haven't really heard anyone address in a useful way.

1)While abundance certainly reduces value (by creating oversupply), scarcity can't in and of itself create value if there isn't demand. Say there is only 1 original Sean Hunter painting in the entire world. Since there are 34 Vermeers, it should be worth more than a Vermeer, right? Well no. Vermeer was much much better at art than I will ever be, so noone is ever going to want to own anything I paint.

2)While there is a finite supply of BTC, there is a limitless supply of alternative altcoins, and no barrier whatsoever to entry, so people can keep creating them. Since these can be made functionally identical to BTC, why should BTC retain value through scarcity? It's not doing anything that can't easily be done via another altcoin.

I think you might like this because it addresses both of your points.

>Vermeer was much much better at art

BTC is a 'much better coin' than alt coins. Its currently used worldwide. No other coin is used worldwide.

Its not just scarce, but its also highly demanded. Consider that people don't care about other coins, AND this is scarce. Its very difficult to become a rockstar, but once you do, your signature is very valuable.

BTC has broken into rockstar status. It has already happened. Alt coins have not.

> No other coin is used worldwide.

This isn't even remotely accurate.

What altcoin?

Of the altcoins that are actually functional, you'd have a harder time finding one that didn't have "users" around the world than one thar did.

Let's just use Litecoin as an example here, or even dogecoin for that matter. Are you seriously claiming those don't have global reach?

BTC can't extinguish debts and taxes in any nation-state on Earth.

Taxation is in fact continually reducing the value of Bitcoin when it's applied - you can't pay your taxes in BTC, so you have to sell some of them to gain USD to cover your taxes (easy enough: you do it when you trade). But the person you sell them to has the same requirement - they will have to sell some BTC and trade out into local currency to extinguish tax obligations. The long term trend is everyone eventually must trade out of BTC to cover their taxes.

The trajectory of BTC is inexorably down - the current market is irrational.

It can extinguish debts. However, many people want to be paid in local currencies.

Nations want their taxes to be paid in local currencies.

Not sure why some situations requiring a different payment method has you hung up.

This post is nonsense.

Lots of people hold gold. These people musy sell their gold to pay taxes.

This does not drive the price of gold down to 0, because that's not it works.

Bitcoin is exactly the same as any other commodity.

> It's not doing anything that can't easily be done via another altcoin.

You can't pay to a Bitcoin wallet with an altcoin. It's a different currency.

I could start printing jstanley dollars but that won't impact the scarcity of actual dollars. Even though a jstanley dollar is still just a piece of paper that can do exactly the same things as a USD piece of paper.

I think that it's much harder to think of valid use cases in the US and other developed countries (not that they don't exist)

But, for the most part, our financial systems work. In countries like Venezuela, it doesn't, and blockchain is much more revolutionary.

>I’m yet to hear of a non-hypothetical application that could change that

shared accounting systems between collaborates. complete replacement of ap/ar and every company in a consortium not needing to keep their own, isolated, audit requiring, double entry books. the amount of duplication reduction potential is staggering.

"money laundering" is a feature, not a bug. To bucket all forms of monetary subversion as a bad is like saying all drugs are bad. There is too much control exerted by various authorities and companies over transactions and Bitcoin creates a much needed outlet.

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