Bitcoin Hits New High, but Cryptocurrency's Future Is Uncertain

[EDIT]: I see this needs elaboration ... watts are already "per second". Watts per second implies some sort of acceleration of energy consumption. Just wondering if I'm missing the point.

Pretty much any kind of entertainments uses energy. Bitcoin just uses energy to perform an (arguably) useful function. Is that a more irresponsible usage of energy compared to our other reasons of using energy?

Some are better than others but Alex de Vries's numbers are the most quoted and quite questionable.

The article you linked to refers to https://www.energy.senate.gov/services/files/8A1CECD1-157C-4... which contains

"An accepted method for deriving an estimate of the energy consumption of mining is to assume that all miners use the most energy efficient mining device available on the market.(3) Commercial devices are accompanied by published specifications listing the number of hashes that can be computed per second using the device, as well as the power consumption of the device in watts. It is then straightforward to calculate how much power is required to compute 50 billion billion hashes per second using the most energy efficient devices available. I performed such a calculation and obtained an estimate of around 5 gigawatts for Bitcoin mining alone today.(4) This is slightly under 1% of world electricity consumption, or slightly more than the electricity consumption of the state of Ohio or that of the state of New York."

The footnotes in turn refer back to Alex de Vries.

The numbers rely on the assumption that the majority of mining is using hardware with efficiency similar to the published specifications upon which they made their calculations. Given the nature of the rate of development and the immediate financial benefit to higher efficiency, it is likely that any published hash-per-joule number is obsolete by the time it is read.

Nevertheless It can be accurately said that Bitcoin miners consume a _lot_ of power and as long as the value of Bitcoin increases at an average rate of about 20% per year, that consumption will stay high. On the other hand, you shouldn't expect Bitcoin to increase in value at 20% per year forever. In that respect the fix to the energy consumption problem is embedded within Bitcoin halving itself. Eventually the value will not be increasing at a rate that will keep up with halving

The thing is, it only causes inflation when that money circulates. But the Fed is just pumping it directly into the stock market. The result is sky high valuations and asset prices, but very little change in the actual day-to-day economy's monetary supply. This is why inflation is still under 2%. And sure, people could sell out and take their cash to invest elsewhere, but with 0% interest rates there's literally nowhere else to put it.

If spending is up, wouldn’t the stock market outperform Bitcoin anyway?

If we have rapid inflation, wouldn’t money go into something tangible and of value before something intangible and perhaps of value?

... until Tether explodes, and then it's musical chairs to figure out who the bagholders will be.

https://www.courtlistener.com/docket/16298999/in-re-tether-a...

(not to mention that so far there has been absolutely no broad inflation almost everywhere around the world, though this can of course change)

Then there’s the whole thing of you way overstating the impact of printing money and of stimulus on inflation. Inflation remains on track for a perfect bulls eye 2% per annum. The velocity of money is a huge factor you aren’t considering. It’s dropping and these are measures to counteract its drop. A lack of printing and stimulus would be deflationary and that would be way, way worse than inflation.

There is insatiable demand for treasury bonds and dollars, and as well dollar reserve currency status means that the govt can find buyers for its bonds without yields rising, hence tempering inflation. A strong dollar makes imports cheaper, hence also lowering inflation.

Studies show only 1/3 of the stimulus is spent on consumer goods. The rest is saved, invested, or used to pay down debts. Such deleveraging is deflationary.

The amount of money is still relatively small and infrequent compared to the vast size of the US economy and total consumer spending and other activity.

Even if inflation was to rise, you would not need to hedge, because everything would be shifted higher, such as stock prices, home prices, wages, etc. Because the US dollar is implicitly understood as the global and standard benchmark/unit of wealth (the Forbes 400 list is in dollars, not euros), it means Americans do not lose wealth if price levels rise or if the US dollar falls. Bitcoin and precious metals could be an effective hedge if you live in a country that does not have reverse currency status and you need to stave off loss of wealth relative to the US dollar due to the local currency falling against the dollar.