Green hackers around the world, let’s destroy Bitcoin
franck-leroy.medium.com
franck-leroy.medium.com
> If you’re not a green hacker, and you’re not doing it for the planet, you can also do it for the money: by speculating downward on the price of bitcoin before launching attacks.
Or the speculators make just laugh about the threats of script kiddies and the price will not change and you will loose money.
The author clearly has a very poor understanding of what value Bitcoin currently has in our current macro-economic situation, and why investors (and corporations) are choosing to allocate larger parts of their portfolios in cryptocurrencies.
Calling out the BTC network on its energetic inefficiency completely misses the point that the work put into the network is exactly the scarce digital asset, and hence the store of value.
No! No it isn't! Gah! I'm sorry but it is so frustrating to hear this nonsense repeated over and over. Bitcoin is not valuable just because you wasted shedloads of energy to make a bitcoin! It's valuable because somebody else will exchange something of value for it.
It's incredibly maddening how so many crypto-libertarians suddenly turn into believers in some Marxist "labor theory of value"[0] when you press them on bitcoin's incredibly wasteful Red Queen's race[1] of ever-escalating wasted energy.
The point of "Marxist" labor theory, is that you shouldn't pay workers less, than the value of what they produce. I don't think Bitcoin miners ever made that claim, unionized and found their class consciousness to get paid the real value...
So, in a sense its value indeed derives directly from the work put into the system. Which is not to say there aren't alternatives (I'm really curious how Proof of Stake will change the Crypto landscape), but at least for BTC, that's how it is currently.
I'm sure you don't want that though, because solar+batteries will power interplanetary civilizations somehow.
Ethereum has done it this way: First you build a stable blockchain, secured through tremendous amounts of power. Then, once your system has been widely adopted and people have "skin in the game", you switch to Proof of Stake to minimize power consumption while still maintaining security.
PoS is the better solution, environmentally speaking, but it necessarily depends on there already being value in the system that people can be held accountable with and thus kept honest. But to reach that state, people have to trust your system first, and if you're not an already trusted entity, PoW is one way of achieving that initial phase of trust building.
Point being, trust and trust-worthiness are two separate things. Most people investing in Bitcoin have not in any way confirmed for themselves that the algorithm is trust-worthy, they just trust that others are also willing to buy it so that they won't be left defrauded. Hell, people have been defrauded by the likes of Mt Gox, and the network didn't collapse entirely.
But there's also the people that invest long-term because they think crypto currencies have a lot of potential to be adopted more widely in the future, which entirely depends on their trustworthiness. Without that second group, any sufficiently negative news would cause the BTC price to collapse completely -- and to be fair, there's always the risk of that happening (Tether sends its regards), but the underlying "trust in the benefits of the system itself" at least gives a floor for its price that's above $0.
The energy isnt wasted though, the safety of the trustless transaction is proportional to the expended energy. While not the source of value, it is a necessity, not a waste.
This would be somewhat true if Bitcoin were the only mechanism for trustless transactions, but there are others that consume far less energy, such as https://en.wikipedia.org/wiki/Hawala.
And to make it difficult to forge transactions it asks you provably(!) burn some electricity.
What's also maddening is how subjective the term 'value' has on it's intended usecase that some can be so completely oblviius to make coax it into a specific farmework: cocoa beans and shells were also equally valuable to it's respective communities, but your forcing of modernity to this matter is equally marred by illogical and quite frankly lazy conclusions.
Bitcoin (lower case b, as in the token) does require a great deal of hashing power, but this model, proof of work, is what is required to ensure Bitcoin's immutability (the network capital B). And that is the cost of such a system which, if you aren't aware, is mainly operating on renewable energy [0].
That is just the cost of entry if you want to incentivize keep everyone honest and play by the rules, the fiat World is littered with countless stories of failed currencies and failed societies and cultures because man's inherit nature: greed and corruption.
0: https://bitcoinmagazine.com/articles/study-74-percent-of-bit...
Due to the sunk cost fallacy, Bitcoin has more value. I know this means I'm relying on the irrationality of humans, but why wouldn't I? It's more predictive than assuming humans will be rational with regards to this subject.
Why would that matter? The problem is the huge amount of greenhouse gases getting released because of this store of value. Whether it makes some economic sense or not is irrelevant to the discussion of whether it should be allowed to continue on environmental grounds.
Oil companies capturing the wasted natural gas, Hydro dams capturing the wasted water energy, etc. Bitcoin is a battery or energy credit where areas with abundant energy can benefit from their standing in the world and benefit the people of the region. Bitcoin has its ebbs and flows but eventually balances to where your typical american household cannot afford to mine bitcoin and profit.
The cloud computing companies and EV companies and every other company that spends large amounts of its budget on buying electricity is doing the same thing. The difference is that (at least some of) cloud computing or driving is doing useful work with the energy being consumed, whereas 100% of energy going into bitcoin mining is simply getting converted to bitcoin, a speculative asset, and heat.
And the greenhouse gases are the largest problem the civilized world has ever faced, they are not some small aside. We need to figure out ways to produce less energy while still powering the important parts of our economy (transport, production of goods, research etc). Bitcoin is doing the opposite - it is creating a need for more energy production to create and exchange money, when we already have much more efficient ways of creating and exchanging money (the whole banking infrastructure of the world consumes less electrical energy than bitcoin, while doing orders of magnitude more transactions per second than bitcoin can hande in a year).
yea is video games useful work?
youtube videos perhaps?
twitter?
It's nice that you have a sliding scale of what utility is that only you can define, you seem completely trustworthy.
But it is true and I pointed that out that there is a lot of waste going on in the cloud as well.
why?
Money is only useful in so far as it can buy the things that people need, but making those things still requires energy in addition to money. Burning energy to make money when you can literary just will money into existence is completely absurd.
> Because they bring enjoyment to people, and all that truly matters is the happiness of people.
my response was actually the politest way I knew how to respond to someone pulling argument after argument out of their backside without any introspection whatsoever.
I honestly think they're just trolling at this point.
Calling me a fucking moron without anything at all to add, after I took the time to reply to your 1 word comment (or to someone else's comment? I'm not clear if you're mr_woozy as well or not; I'm not leto_ii) then I have nothing else to add.
Oh, and accusing me of spewing inane generalities when the real value of art and entertainment has been called into question and vindicated throughout all of economic theory is quite rich.
This is completely circular login, if you're valuing those things as purely economic goods then you're ascribing a monetary value to them, which you could just as easily to bitcoin mining, startups and associated industries.
>and all that truly matters is the happiness of people.
This is the laziest argument I've seen on how to measure relevant value, I mean if I'm a murdered them murdering people is going to make me happy, so what does this argument even mean?
Should Bitcoin allow USD to continue? We will see.
The huge problems of the monetary system lie more in the direction of Bitcoin (the unbridled speculation of Wall Street) than fractional reserve banking and fiat money.
The attitude on this forum towards Bitcoin literally boggles my mind, at most maybe 5% truly understand it.
Each of these turns out to be a net-negative in my view:
- fixed supply means that people are incentivized to hold bitcoin instead of spending/investing
- algorithmic transactions mean that there is no way to reverse a mistaken transaction or a fraud; it also means that losing the key to your wallet is irreversible destruction of the money contained in that wallet
- pseudonimity means that it is very hard to track money laundering and other illegal financial schemes
- lack of centralized control enforces all of the others and makes it impossible to prop up the currency based on the current needs of the economy
I also understand the distrust of fractional-reserve banking and most complicated financial manipulations, and I wouldn't deny in any way that these have been misused very often at the benefit of the rich and powerful. But, at least with the current system, citizens have some amount of democratic control over their financial system, which they wouldn't in a pure Bitcoin world.
You could invent a dramatically more efficient way to calculate hashes - after a short period of readjustment, the network would go back to consuming just as much power as it does now.
You could find a way of generating power more cheaply. The network will then use much more of it.
Energy requirements continue to grow until an equilibrium is reached. That equilibrium occurs when the energy cost to mine new blocks is commensurate with the value received from doing so.
However, miners who can externalise their energy costs will generally outcompete miners who cannot. Incentives to damage the environment and avoid taking resposnibility are built into the system.
Really, you mean the huge amount of greenhouse gases we release here in Iceland where our energy is entirely from renewable sources and we mine 11% of the bitcoin network?
There are many things that people actually need which could be done with that energy, but that would probably bring less money than burning it away on Bitcoin.
And make no mistake, these things are still being done, just soemwhere else in the world with more polluting energy. The energy supply of the world is limited, so mobile use cases will often move around.
You do realize that transmitting power via cable means moving it through large bodies of salt water (the ocean) that contribute to huge losses in EMF resistance. Not to mention a power cable from Iceland to anywhere else in the world would be 2x as long as the longest power transmission ever created.
It's more scary for me to realize you actually have no productive ideas for a country that mines BTC from renewables but STILL think you're insights are correct.
Did you know what we do with the electricity here before mining was popular?
Alcoa Aluminum smelting, Ever check out the environmental impact on smelting?
I'll add that I specifically mentioned scientific data centers, supercomputers, which would be much less affected by lag than an AWS region. For the power transfer issue, I specifically said that attacking the problem would mean being at the forefront of research on the matter.
And it is not my place to have productive ideas for how a country could use its natural resources. My claim was that bitcoin mining should be stopped as soon as possible, as it is driving an overall increase in power needs for the entire world, at a time we should be looking for every possible means to reduce our energy consumption. You came and brought up the extremely singular case of Iceland, as if it disproved anything. It's not like Iceland's economy is dependent on bitcoin, it's an extremely new industry that is not making a huge dent, while consuming more energy than the whole country's housing. In the end Iceland is irrelevant in the discussion of Bitcoin's impact on the world.
[0] https://www.aljazeera.com/features/2019/4/15/iceland-is-a-bi...
[1] https://grist.org/article/bitcoin-gobbles-up-clean-energy-ju...
[2] https://www.mprnews.org/story/2018/02/14/iceland-bitcoin-ene...
As someone who lives and works here I can assure you there is absolutely no environmental group fighting the expasion of btc mining here in Iceland, we are however viciously fighting the increasingly destruction tourism influx that has been happening since 2012. It does far more damage that the dams that were built here well before btc mining even existed.
>while currently not paying much of anything to the local government[2] and hiring next to no people, like most tech industries.
This is also untrue, construction and remote hands as well as grid infrastructures resulted from them, the companies that run the facilities also incorporate here and pay corp and employee tax here.
>And it is not my place to have productive ideas for how a country could use its natural resources. My claim was that bitcoin mining should be stopped as soon as possible, as it is driving an overall increase in power needs for the entire world, at a time we should be looking for every possible means to reduce our energy consumption.
If you followed your own citations you'd see one of them linked to https://digiconomist.net/bitcoin-energy-consumption which shows est electric consumption going back as far as 2018. Notice the graph has not really changed since 2018 (since the last halving).
>You came and brought up the extremely singular case of Iceland, as if it disproved anything. In the end Iceland is irrelevant in the discussion of Bitcoin's impact on the world.
Again your OWN source has Iceland listed as one of the top mining locations in the world of course it's relevant. I've even read estimates that 40% of bitcoin mining is coming from renewable sources, most during off peak season where that electricity would be wasted otherwise.
You want to solve the energy efficiency problems of the world? Good, begin by linking the disparate energy grids amongst the world to eliminate peak usage and off peak waste, you'll save far more electricity just by that way.
Not by knee-jerk "I see no value in this so it must have no value" vague emotional appeals on the internet. All I see is you vaguely groping for why it should be treated differently than any other form of industry or innovation while insisting all the rest are somehow necessary and this not. You're not even consistent in your reasons from reply to reply.
That's no excuse for the obscene waste of resources.
What's the CO2 footprint of standing armies around the world? Have you tried cancelling that?
Oh, the purpose of the US army and nuclear arsenal is not to "enforce the USD reserve status", it is to advance America's imperial goals, which vary a lot. The status of the US dollar is a second-order consequence of America's power.
Now regarding you imply that we should worry more about the emissions from armies than bitcoin, why is that an either or question? Yes we should worry about both wastes, but they are on the same order of magnitude. Moreover there is no evidence that bitcoin does reduce military spending or emissions, so again not making this an either or question.
If BTC were somehow linked to and used to solve some of the world's most pressing problems such as modelling protein folding or some equally significant problem, then that would make it partly energy efficient. I don't know of any such crypto, and I think I've heard of only one such crypto that's somewhat like that. And as recent evidence goes, no crypto gives you respite from the law - on the contrary, it will bind you in constant avoidance of the law.
Even Monero?
First it was a revolutionary currency, which would replace fiat with a deflationary alternative. Then it was a revolutionary payment network which would displace evil incumbents (despite being fundamentally unsuited to this task). Then it was for micropayments. Then it was for selling drugs and doing things governments don't want you to do. Then there was the lightning network which would make it super fast and super distributed at the same time, solving all known problems by this time next year (in 2015). Then it was for transferring money across borders. Then it was a revolutionary technology called blockchain for building apps on top of, who cares about the currency. Then it was for tracing assets and proving ownership of every asset in the world with blockchains. Then it was for smart contracts - we're going to replace the law with the blockchain. Then it was going to the moon (in 2017), and who cares what it is used for, or even if anyone is using it, because it's going to make us all rich baby - we still appear to in that last phase because nobody seems to know or care about the value of it, only the price.
With apologies to Oscar Wilde, we currently seem to know the price of everything, but the value of nothing, and the rising price is what is driving current interest in Bitcoin, nothing else.
Bitcoin never tried to be law, that's eth and other similar centralized scam blockchains. Being as it's "only" 12 year old money, Bitcoin does evolve and adjust as its users govern it via running their own nodes. Until 2017, major companies (miners/payment processors) tried to fit all kinds of narratives on it (as you mention) but it became clear that they COULD not make bitcoin what they wanted it to do.
Meanwhile users did a soft fork with segwit and kept the blockchain as small as possible while allowing Lightning to be developed on it. This means the decentralized network wanted to keep being sound money, keep being censorship resistant, decentralized and still be scalable.
Lightning Network is a very solid success, used amongst early adopters, major exchanges joining (Bitfinex, Kraken, OKCoin), multiple VISA backed startups building rewards programs and remittance applications on it.
Unlike a typical tech startup Bitcoin does not need to trick everyone to use it and get as many investors as soon as possible and figure out something later. It is what it is. It does not force anyone to join it or spend a single thought on it unless they choose to. It's completely voluntary.
While I understand the skepticism (which just comes across as "salty" as they say) one should consider a simple web search to see how Bitcoin adds value to financially underserved people, allows politically censored organizations to take donations anywhere in the world and protect tens of millions of people from rampant inflation in most of the developing world.
Not even a little. The scarce digital asset is the slot on the distributed ledger. That you currently need a load of energy to reassign digital ledger slots is an accident of history - because it was the first way that anyone worked out how to run a secure distributed database across mutually distrusting nodes where you don't need to know the participants in advance.
The work is not the scarce asset. If you doubt this, consider: the 'work' required to mine a block (and so 'create' the block reward) changes based on how much hash power the network has, and varies quite substantially between the early blocks and now, yet the bitcoins mined then are worth the same as bitcoins mined now. If lots of miners stop mining BTC, then the amount of work required to mine the next blocks will reduce, yet the bitcoins created with the lower work requirement will be worth exactly the same as bitcoins created with higher work requirements.
Obviously, in a PoW blockchain, the work is extremely important, since a PoW blockchain can't remain secure without significantly more work being done by the network than an adversary can marshal to attack the network, but that's an entirely separate thing.
You can take a valuable painting, burn it down to ash and use the ash to make ink to do a stick figure drawing. The stick figure drawing doesn't magically become 'a store of value' because you destroyed a valuable painting to make it.
[ x ] Recommend Thing B that claims to solve the problems of Thing A. But you probably forgot to mention that you have a financial interest in Thing B succeeding.
[ x ] Finish with unclear call-to-action that requires others to take insane financial risks to support your made up "movement" (e.g shorting Bitcoin - great way to lose infinite money).
But bitcoin simply does not work as money. There is really no doubt about this. Even the biggest proponents of bitcoin right now call it a "digital gold". But we don't need a digital gold. We have gold and gold has none of the same problems as money and is a far more stable storage of wealth. Today bitcoin proponents don't understand what Satoshi was trying to do. So I'm in agreement that this is all just a monstrous waste of resources at this point.
There's some independent research there but AFAIK Bitcoin people did not stop working on confidential transactions or fungiblity.
Just explaining that the core tenet was not lost, but that it was still not researched. Bitcoin jump started a research movement that reaped all kinds of cryptocurrency variants as time went on.
https://electroneropulse.org/public/doc/Bulletproof%20RingCT...
Here's a paper whose coauthors belong to the Bitcoin team discussing efficient confidential transactions that were eventually implemented in Monero (not by the Bitcoin team).
The knowledge held by the Bitcoin team wouldn't disappear if Bitcoin was shut down. They could still contribute to other crypto projects.
There's so much stuff that still had to be researched after Bitcoin came out.
One big example that comes to mind is SegWit.
The cryptography was still not there and I do not feel that something can be lost if it's not there.
The whole waste argument is ridiculous on so many levels. I imagine these people shouting at people houses - turn off that AC! You are wasting energy for which you have paid! We could have made so many aluminum cans with that!
And if you say that sure, let's have digital gold, but not Bitcoin, let's use Foo. Then without sidechains all value in Bitcoin gets destroyed. And I assure that there will be Bar that's going to be pareto optimal to Foo. It just doesn't work. To have a currency, it needs to represent some value. If it's not coming from a government, then people must trust the value will stay there (there's almost always a lot of trust involved in our value assignments).
Bitcoin is sooo far from perfect. But you can't have crypto future without it if you think long enough about it. Also on the long run, with everything being connected to the Internet and silicon being cheap, I think many heating elements will also be doing some computation. The fact that they are not - that is a waste.
There are many ways to mitigate climate change but I don't think that telling people what should they do with electricity is the way to go. Perhaps focus more on how the energy gets produced, not how it is consumed.
If the advice is sound, maybe we should be telling people about it. For example, we could recommend to replace cheap ineffective ACs with effective but expensive heat pumps and some small percentage of people will do that. But this won't do much to mitigate CO2 production. AC energy consumption isn't a major driver of CO2 pollution, fossil-fueled transport and coal/gas power plants are.
Important actions are those that are realistic and have an impact. For example, cancelling coal/gas power plants, building more CO2-free power plants, getting rid of combustion motors in naval transport, etc. Everybody can have an AC if we have CO2-free electric energy production.
2) Yes, developing-economy per capita energy usage is going to go up while they catch up to developed-economy standards of living; that's happening in all categories. Developed economies still need to reduce their energy usage. e.g. we're not stopping our switch to electric cars just because half of India is getting their first gas-powered scooter.
Everyone can have A/C, but we need to keep our usage as low as is feasible.
We need to fix overall energy policy, make everyone pay for their consumption just amount, and keep fixing the damn production to get carbon neutral.
> I think many heating elements will also be doing some computation. The fact that they are not - that is a waste.
This is very interesting. But something doesn't seem quite right to me if everyone was passively mining Bitcoin by heating their home. This requires more thought.
The trouble with thinking about any of this too much, though, is it's all completely absurd in the end. All of this: money, gold, other elements we dig out of the ground just to store in vaults somewhere. Buying commodities we never intend to own, much less use. It's layers upon layers of absurdity just to make sure our neighbour doesn't get a larger slice of the pie than we do. Adults tell children to stop arguing and share their toys. This is surely the greatest source of hypocrisy there is.
The only way out of madness, I think, is just to accept that for whatever reason our current systems work somehow. We aren't cold or hungry. In fact, we have access to hundreds of times more than we really need. The only thing that really needs fixing is sustainability. That's the only thing! What we currently have isn't fair; some people do get bigger slices of the pie. But we all get enough. So just quit your whining, enjoy your pie, and work on sustainability. If we can make this whole thing sustainable, then you can start trying to hyper-optimise your pie allocation, but before that time you're just decorating a sinking ship.
The last point would be beautiful if it only was true. I would be somewhat ok with banks and funds stealing poor people money through FED if it was the case. But it is not. We are not cold and hungry, but many people are. Even if you are not thinking globally, just US only, just look at COVID-19 and the overall state of healthcare.
But the last point brings one valid criticism of Bitcoin that I don't see mentioned practically ever. Money is a positive feedback loop. Bringing real money to the world, one that cannot be easily taken by force, can be scary (don't xkcd wrench me, I mean scenario that's much further, there were many entities throughout human history that acquired a lot of wealth giving them a lot of power, at some point other people become fed up enough that they just took it by force. But in this case, it would not be in any physical place, not necessarily associated with specific individuals). Fiat currencies system is rigged, but the problem is that money itself is somewhat rigged. When you don't have enough of it, you just sell your time and sell it cheap and you don't have enough of it left to find how you could sell it better. With enough money, it just works like a magnet. Better lawyers, research done for you, being able to take high risk bets etc.
I'd love to have a state of world that you described in your last paragraph. I wouldn't care much about Bitcoin in such scenario.
And Bitcoin is much more useful than gold. You can easily send Bitcoin to your family at the other end of the world. With gold, not so easy. Even buying and selling gold is much more difficult. Storing gold is also much more complicated, you can not encrypt gold, so you need physical protection.
The amount of bitcoin users that are truly excited about its potential for a decentralized currency are few. When 90% of the mining power is held by chinese farms... These guys do not care about decentralization.
As much as I wish we could destroy bitcoin because of how utterly fucking useless it is, the fact is, we now have to deal with people wasting this energy, forever.
Look further: What would happen after the attacks failed, when not even the green hackers can do anything to their network ? Nobody can currently shut it down, that's also why it is valuable.
Also, using it locally has a delay of several days for being "up to date". So in practise, security for most people is dependant on 3rd parties.
what even?
Proof of stake would terminate that problem?
Proof of stake would quickly devolve into the system we have in place.
proof of stake just means the rich get to call the shots, at no expense to them. No disincentive to cheat. All previous attempts, and there were many - have failed to date.
Miners in PoW have to risk incredible amount of capital, and cheating is strongly disincentivized by that.
PoW stood the test of time.
The point at hand, is that PoW incurs energy costs which drive to cheapest which is to ignore externalities and burn brown coal in china. the problem is the ignored externalities: the CO2 pollution.
You're arguing "its the same" about the end outcome of the chain as a thing in itself. The point of my comment and I believe the article, is that PoW incurs a huge energy cost which is pointless: its make-work. It does not relate to the value of the chain.
I ask if PoS is "the same" IN THIS REGARD. Not in terms of what the end outcome as a chain is: if the energy inputs to achieve PoS are the same as PoW.
Also just for the record, minimizing driving is a good way to combat climate change.
Obviously to minimize consumption you should cut away the things that provide the least value for the highest reduction. So for example turn of lights during the night in empty buildings is much better than using renewable energy to power the lights.
No, because driving has a legitimate purpose.
Just because it exists doesn't make it a good thing in the current circumstances.
Not to the same extent. A big contributing factor is the very high price of bitcoin that results from the FOMO on its finite supply, nearly 90% of which is mined already.
If Bitcoin had no halvings, then its inflation rate would come down much slower and its price would be much more reasonable.
Sadly, very few PoW coins follow that wide distribution model.
Instead, if BTC weren't worth much, people would likely just stop mining, and the transaction speed of the BTC network would grind to a halt, further driving down its value.
But the primary philosophy behind bitcoin is right-libertarian / Ayn Rand / a return to the 19th century with futuristic technology.
Go look up the Cyphernomicon for instance, where you'll find Tim May cheerleading for cryptocurrency-powered darknet murder marts. Here's a choice sample quote:
begin quote
end quote
Direct monetary incentives.
No, Ethereum is at least not using PoS for now.
Just use USD.
Nobody governs gold, seems to work just fine.
I see this call to destroy it as akin to the 1969 Apollo mission protests, when civil rights leaders argued that the space mission resources would be better used on Earth.
https://www.history.com/news/apollo-11-moon-landing-launch-p...
Better ASICs that do nothing but calculate sha256 hashes? Easier money-laundering? New venues for tax evasion?
I guess censorship-resistant online value transfer is worth something, but I'm not sure it outweighs all the negatives.
Besides, the seignorage revenue is pretty tiny in western economies..
For their wicked thirst for power, some will do anything. In our age there is an unholy alliance between the worlds greatest power ever and its military industrial complex, where the incentives for government leaders is to wage war in strange faraway lands, and to bribe the population at home with dependence on the state, in exchange for votes. This is all funded by printing money - inflating its supply. In effect, this is devaluing the salaries and savings of anyone who earns their living, and who can not do anything about it, as they are forced to trade in this currency created by fiat.
By creating Bitcoin, Satoshi took gold to the internet, and we can now trade in a currency which no one can inflate to fund wars, or to in essence steal productivity from every earner.
A sound system of ethics must contain the right to ownership of your property - you body, your money, and other possessions. Bitcoin practically gives us this in the Information Age.
> By creating Bitcoin, Satoshi took gold to the internet, and we can now trade in a currency which no one can inflate to fund wars, or to in essence steal productivity from every earner.
Utter bullshit. The power of the US government doesn't stem from its ability to print money. Rather, it's the other way around essentially: its ability to print money stems from its power. The US government controls the most successful economy and army in the world's history, by far.
If it had a reason to, the US government could, with resources it entirely owns, out-mine the entire bitcoin network and print its own bitcoin as well, in violation of the protocol. What's more, assuming it were done publicly and with a commitment to maintain it, people all over the world would use the newly printed US-bitcoin.
More realistically, it could easily lend bitcoin that don't exist yet and create a fractional-reserve system right on top of bitcoin.
The problems of today's economy stem much more from "free market" systems like the officially-sanctioned speculation happening every second on Wall Street. Workers are hurt much more by so-called "free trade" agreements that allow US companies to own other parts of the world and exploit those for cheap labor at the cost of both US workers and the foreign economy. And wars get started not because the US has money, but because the US doesn't allow enough democratic control of its workings.
HN is such a rare place on the internet. I am writing in good faith - let’s not fall so low as to speak like this.
The power over currency and the power over arms go hand in hand.
The “officially sanctioned” exploitation you speak of - who is the “official” in question? The sins you and I refer to stem from the monopolistic use of violent force by the state. “Wall steeet” is far from a free market, and so if the dollar, euro, pound, and other state currency markets
With regards to tax evasion, my opinion is that it will simply force taxation to occur in other ways like VAT. People are quite capable of evading taxes in the present system, so wide adoption of online value transfer would simply democratize access to tax evasion (and force governments to rethink how they collect taxes).
Money laundering makes me think of the dangerous flip side, where anyone can covertly accumulate and use resources without scrutiny - e.g. Ali Alexander using Bitcoin to finance the transport and lodging of groups that took part in the January 6th riot.
Change how exactly? To me bitcoin seems like this:
Expectation: the world ditches banks, dollars, euros, etc. People switch to bitcoin and everyone lives happily, paying for everyday stuff with bitcoin.
Reality: people do not use bitcoin to buy groceries. In fact, people do not use bitcoin per se - people are only interested in buying and holding (speculating).
Source? Africa has mPesa which is vastly superior than BTC
Look it up. It's real.
As a dictator, my goal is to fill my bank accounts for when I get deposed. In most cases, countries who have their resources fleeced have lawful means to go after former dictators. Bitcoin removes that.
We are still in the very early days of decentralized finance.
1. With the Apollo missions, the money being put into the project was going into research and development, so there was at least some expectation of getting new science and technology out of it. With Bitcoin,nthe money put in is going into speculation or mining, which only fuels the network. There is no reason to expect new technologies to come out of this, and certainly not any new science.
2. The Apollo project was a big consumer of money, of which there exist plenty in the world and we can create more. Bitcoin is a huge consumer of electricity, the production of which is generally accelerating global warming, the single biggest threat to our survival as a civilized society that has ever existed in history.
We already know that Bitcoin itself is not even remotely close to being a solution to the problem you're thinking about (decentralized money), even IF I agreed that this is a real problem (I don't, I believe Bitcoin is going in the wrong direction compared to fiat money). You could make a decent argument for investing in developing scalable crypto coins, maybe Ethereum or maybe something else, but proof-of-work crypocoins and Bitcoin in particular are an obvious dead end, and can be decommissioned entirely without much loss (especially if the bitcoin holders were compensated somehow).
Proof-of-stake coins are one obvious counterexample. Would proof-of-stake technologies have been developed if proof-of-work didn't come along first to incentivise development and build trust in cryptocurrencies?
Furthermore it's possible that a purely proof-of-stake currency would have never gained the widespread trust that proof-of-work did at a time when cryptocurrencies were a new idea. Or maybe not... but people did have ideas about proof-of-stake quite early on and it took much longer for those ideas to gain the same level of acceptance that proof-of-work did.
For example, I happen to believe that decentralized coins are a horrible idea in and of themselves, even without proof-of-work also helping to increase global warming. So, from my point of view, any adoption of a crypto-currency is a net-negative, and I would be happy to know that the technology exists, but is staying abandoned as long as we have no use for it other than non-centralized money.
Sure, but that is a much different argument than proof-of-stake vs proof-of-work.
With the assumption that having a successful proof-of-stake cryptocurrency is a net good, then what I am saying is maybe our usages of proof-of-work up until the future widespread adoption of proof-of-stake actually will contribute more positively to that end than negatively.
So I stand by my original point - the resources going into bitcoin are not fueling technology research.
They may be fueling PoS Ethereum adoption, but that is another argument entirely.
I'm not sure that's true. Proof-of-stake is established as a concept but there is still lots of room for technological improvements in the implementation and user experience. New proof-of-stake coins can compete more effectively because of the trust which Bitcoin established.
Simple logic.. Billions of dollars in miners are bought by speculators, Bitmain orders new 5nm chips from TSMC... TSMC uses money for R&D.
Either you're being willfully ignorant or you're trolling us.
Bitcoin is an energy currency.
Not a currency, but a digital asset that wastes enormous amounts of energy.
It's in the top 20 or so of world currencies, and it's still in its infancy (thus volatility etc).
My question, then, is how do we go about drowning Baby Bitcoin in the metaphorical bathtub?
What do I do with my profits from mining bitcoin? Send my kids to college, buy groceries, remodel my bathroom, etc. It's an entire ecosystem, speculatively mining bitcoin by consuming electricity is just as evil as driving 1.5hrs to work because you're too lazy to find something near your house for example. People expend trillions of dollars in energy "mining" fiat.
Sure, the monetary value of that energy may be getting stored, but we can't buy lower temperatures with money, unfortunately.
When you store energy by pumping water for example, you can later let that water flow to get back the energy itself (with some inevitable waste, of course). When you're converting energy to bitcoin and later require energy again, you have to use the bitcoin to buy more energy (either from the market or by building a new power plant or something), you can't just physically convert the bitcoin back to energy.
If anything, bitcoin mining is a disincentive in making a more energy efficient green economy: instead of reducing waste and reducing power production as needed, we now have a way to turn excess power production into money directly. While a carbon tax could have shut down a coal plant, now the coal plant could instead get a bitcoin mining rig and power that, as long as the carbon tax is lower than the (extremely volatile) value of bitcoin.
To avoid the most apocalyptic effects of global warming, we have to close down most fossil-fuel based energy generation today, literally. Bitcoin is actively working against that by driving up the price of electricity to fuel a speculative bubble.
I now see some holes in my Apollo analogy (also government vs individual spending). I am lucky there is always someone on HN who will make a better point :)
Bitcoin gives users a trustworthy decentralized store of value today that they could easily move to another cryptocurrency in future using some kind of decentralized exchange based on smart contracts. It provides liquidity for all future cryptocurrencies.
The Apollo argument was more compelling because it didn't require any value-judgement of the end-goal (but it was less appealing to me for the reasons I outlined). It is an argument about the process, regardless of the results (in the end, the lunar landings in themselves were a symbolic victory more than any great advancement of science - the science happened on the way).
We can go into arguments on why I think the end-goal of crypto-currency believers a la Satoshi would be a net negative, but others have covered it pretty well (deflation, fraud, money laundering, having your life savings destroyed by a hack etc).
https://twitter.com/id_aa_carmack/status/1348094702550216707
We learned about blockchain, we learned cryptocurrencies are possible. Now it's continuing to burn tons of rocket fuel for no further benefit... Saturn V served it's purpose, there is a good reason we don't continue building rockets this way. We learned a lot from Bitcoin, critically, we learned it is _not_ the solution to a sustainable decentralized digital currency.
I'm not arguing anything about the current system of doing financial transactions. But the environmental disaster that is BTC has to die.
If there is truly a need for innovation in the digital currency space, it should be replaced with something less wasteful. Too bad all the pundits and hodlers are too invested to admit this.
We need to focus on decomissioning coal/gas power plants and combustion motors for transport. That will get us at least 60%.
Bitcoin is actively working against that. By increasing the energy demand from the network, it makes it harder to simply stop producing energy. It doesn't matter if miners are directly buying only from renewable sources (as some claim), they are still likely out-bidding someone else, who then has to go to a fossil fuel plant for their electricity.
Blaming and cancelling insignificant activities leads nowhere. And it's absurd, considering the main CO2 contributors are elsewhere - it is the transport and power plants which need this attention.
If we are talking about affecting CO2 production via electric energy policies, more just way (and more effective way) to introduce "CO2 sanctions" on various activities is to factor the damage in the energy price. That way everybody feels the pain proportionally, not just few random scapegoats like BTC. I agree that price does not need to be the same for everyone. Maybe BTC activities should pay much more for electric energy than a normal (non-BTC oriented) household does.
First part: bullshit. Shutting down BTC would be highly consequential.
BTC is the perfect peak shaver to have on your grid. This is what makes it so perverse. With a mining rig, you can shave excess production peaks on any of the energy markets: long-term, cover intraday swings, or frequency stabilization where you have to react in seconds.
If BTC ceases siphoning green energy away from hydro plants, etc, the grid operators and their governments will be forced to look into storing surplus production instead of turning it into waste heat and crypto hashes.
Storage of energy was and is very small / non-existent because of large investments needed to build it, and little profit to be gained. It's not BTC's fault.
Bitcoin? I'm not so sure. Bitcoin definitely stands to change the world, but I'm not sure for the better. Bitcoin would:
* By design, have exploding deflation
* Allow insane inter-generational wealth accumulation and disparity
* Block most of the controls used by central banks to stabilize the economy
* Allow a disk failure or hacker to wipe out someone's life savings
... and so on.
I'd actually liken it to the /early/ fascist, communist, and democratic regimes, which had a lot of good ideas for how to replace monarchies, a lot of bad ideas, and perhaps a 25% hit rate. The US worked out fairly well, at least once it got past the Articles of Confederation bit. France didn't work for a long time, but eventually worked out okay. Fascism and Soviet Communism /appeared/ to work better than what came before for a few years, and then imploded into horrors. The jury is still out on where the Chinese form of government lands.
At this point, we don't quite know which track we're on with Bitcoin. I was optimistic at the beginning, and now I'm more pessimistic, but it's too early to tell. In either case, we've learned a lot, and we could probably design a better system without many of Bitcoin's flaws.
If we could have gone to the moon at a fraction of the cost, but people had still insisted on doing it the expensive way, just because the expensive approach came first, that would be a better analogy.
It's a basic pre-requisite without which you cannot have digital scarcity, because it would be far too easy and too cheap to forge/create new coins. It's amazing how early we still are in Bitcoin after 12 years. Almost nobody on this forum understands why proof of work exists, and yet most people here are intelligent enough and have enough technical skill to figure out why.
It is much greener than: napalm, nuclear weapons, etc. Trillions are spent every year on war to maintain the reserve currency status.
Would you really rather prefer to spend trillions on standing armies, rather than incentivize cheap fusion reactors?
Followed by a 'Have fun staying poor' to stir some social anxiety and FOMO.
Unfortunately a lot of people keep falling for such statements and the price keeps going up - I have friends buying loads of dogecoin over the past week who told me they have literally no idea what crypto or doge is - but they know for sure that the prices are going to go up over the next month so they don't really care.
Close to one _trillion_ in foregone profits at the moment.
You think this is a fad?
Nothing to do with "war exists"
I guess humans even without technology might use energy too, simply by existing, so we should probably attack and end us as well.
This is surely humanity's only sensible path to a sustainable future, and one that everyone can and must get on board with. Right?
- Bitcoin is popular in the west and the US specifically because it lacks the cutting edge financial networks rest of the world has. Citizens in China, India, Kenya etc can do transactions in a jiffy using their existing bank accounts, whereas ACH clearance takes longer time.
- The digital Gold-rush aspect, HODLing, and no regulation makes it more lucrative to players who would love to cash out big on it. Greed trumps it all.
- Most of the BTC mining has been cornered by big mining, and it's way out of reach of regular Joe. This doesn't look democratic to me.
- The hugmongous energy wastage of the network should be the biggest cause of concern, but most proponents shoo it away by buzzwords like lightning network etc.
This only applies to the US, Europe has a instant bank transfer system.
> The [humongous] energy wastage of the network should be the biggest cause of concern, but most proponents shoo it away by buzzwords like lightning network etc.
Lightning Network is a second layer payment network that is working today. Its goal is to take the transaction pressure off of the base layer (blockchain). Its design has privacy built-in, so it's not possible to generate statistics [3] on its total transaction thru-put. That's also why articles like the one on which we are commenting are so disingenuous. The source they cite makes a direct comparison of the total transaction volume of the Visa network with the Bitcoin blockchain while completely ignoring layer 2 networks built on-top of Bitcoin.
> Bitcoin is popular in the west and the US specifically because it lacks the cutting edge financial networks rest of the world has. Citizens in China, India, Kenya etc can do transactions in a jiffy using their existing bank accounts, whereas ACH clearance takes longer time.
Bitcoin is not "popular" anywhere. The total number of Bitcoin ATMs [1] and physical shops/vendors [2] transacting with Bitcoin is still quite limited. The vast majority of commerce occurs online. But what I do see is that there is slow, steady growth globally. The infrastructure is still developing to support larger volumes of users - and with more diverse levels of computer skills.
[3] https://1ml.com/
I am a casual observer and have no investment in BTC and the comments are what I feel based on the news that reaches me. For me the most critical aspect is the energy waste, and the lack of regulation. I know crypto-anarchists distrust the govt, but if I've to choose between the r/WSB like extreme evangelism (HODL!) and Fed, I would chose the later safe option.
> Bitcoin is not "popular" anywhere.
But it is quite popular in the technological discourses and it comes up often as the future of payments. That's quite a big mindshare IMO.
> The infrastructure is still developing to support larger volumes of users - and with more diverse levels of computer skills.
I would love to be proven wrong and learn something new about the sector that increases my confidence.
That's great. Having an open mind is a good thing. What areas are you specifically interested in? The industry is vast with deep niches and history - mining, exchanges (online/offline/p2p), scripting ("programmable money"), private key security (software/hardware/multi-sig), BIPs/forks/governance, ATMs, end-user apps, scams and shills, cypherpunk history and lore, and so on.
1. Energy efficiency of the transactions and the network 2. How democratic the process to mine new coins is. 3. What steps are taken to manage frauds, speculations bubbles etc. to protect malicious actors from gaming the system.
> 1. Energy efficiency of the transactions and the network
If by "transaction" you mean a single economic exchange between two agents, then the energy cost of a single transaction is impossible to measure. Many of the on-chain transactions in Bitcoin today are "batched" to reduce their total size thus saving on fees. Each of these batched on-chain transactions can easily represent dozens of individual economic exchanges. Lightning Network (LN) takes this even further with bi-directional payment channels now representing potentially tens of thousands of transactions over the lifetime of a single channel. It requires one on-chain Bitcoin transaction to "open" a bi-directional payment channel, and another transaction to "close" it. Closing is not strictly necessary and will be less so as infrastructure and tooling improves.
Bitcoin is not really one single network. It is a few different networks operating in their own niche with their own specific optimizations. Miners can operate as dumb hashing computers with no visibility or knowledge about the blockchain other than the next chunk of data to hash. Full-nodes are typically operated by the "users" that wish to carry on the mantra of "don't trust, verify"; value their personal privacy; or are a large commercial entity. The last estimates that I saw were about 10,000 publicly reachable full-nodes and another 100,000 private or non-reachable. There are also mobile wallets that can be custodial or "light clients". Then the Lightning Network (LN), which consists of public and private nodes, mobile and custodial apps, nodes backed by full-nodes and LN's version of light clients.
> 2. How democratic the process to mine new coins is.
Mining appears much more centralized than it is - due to the success of mining pools. Mining pool operators do not control all the hash power that congregates in their pool. Instead the owners of mining rigs/operators can point their rigs at the mining pool that offers them the best ROI. Of course sometimes other reasons override the profit motive but usually only temporarily - see the SegWit political / governance drama from a few years ago. Corporations (and governments) have already started investing in mining equipment in an effort to secure their own interests in the space. They will compete with each other here just as they have competed with each other over territory and natural resources for hundreds of years.
> 3. What steps are taken to manage frauds, speculations bubbles etc. to protect malicious actors from gaming the system.
Bitcoin is governed today by the same laws and rules as other systems. Fraud is fraud is fraud. Criminals, scammers, and fraudsters use banks and cash too. From the sound of it, you would prefer to err on the side of institutions and regulation. I disagree, and would prefer that individuals take personal responsibility for their own education and finances. The world is a messy place and there is no answer for 100% of the people 100% of the time.
Speed of transactions has nothing to do with it, the answer is elsewhere.
I am very surprised people that frequenting HN are still this misinformed about BTC.
Where are you reading that BTC is focused in US? Where are you reading that BTC is supposed to be used for fast transactions?
A government strong enough might have the ability to control Bitcoin mining over the holders, but breaking decentralization in this way will kill Bitcoin in its fundamental, and it seems that no such government is going to do this for now, especially when the reason is "environmental problems", which is generally not in high priority. Beside this idea, maybe a BIP (Bitcoin Improvement Proposal) is the best way of achieving consensus, but I can't imagine such a proposal being approved based on its limited feasibility.
What seems possible is to check what miners mined a block, and externally verify their footprint. But I don't think there is a decentralized way to do it. An entity certifying "green miners" would be a centralized authority.
Bitcoin are being traded by energy companies to subsidize their infrastructure and improve energy efficiency and capacity.
In some ways Bitcoin is a battery, because hydro dams don't idle generators as often they can sell their excess energy production and subsidize the dry season. Oil companies capture the natural gas flares and use it to power generators to mine bitcoin, etc. There really only needs to be one POW coin, and I think it's pretty obvious that Bitcoin is it.
proof of work is the only thing that maintains unforgeable costliness.
Every proof of stake system eventually centralized and failed.
And of course proof-of-work isn't necessarily immune to wealth centralization either.
As I wrote a couple weeks ago:
If you want to take a Puritanical attitude, any luxury product/service can be argued to be wasting resources that could be expended on essentials. In other words, its alleged lack of utility doesn't provide a justification for destroying or banning it. It's up to others to decide how to spend their resources.
If CO2 emission, and its negative externality, is specifically the problem, then the principled position is to advocate that production of all non-essential/luxury products/services use non-CO2 emitting energy inputs.
Unless the measure is agnostic to what category of non-essential activity it targets, you'd just be singling out cryptocurrency, because it's not a non-essential that you personally believe is worthwhile enough to pollute the environment in order to produce, unlike say gaming, and the massive amounts of energy that gaming GPUs use.
You don't need Bitcoin around to do that.
What I am saying is that perhaps proof-of-work coins actually bootstrapped proof-of-stake technologies, thus leading to more rapid development of cryptocurrency technology in general.
Bitcoin should have died a decade ago.
What would be a good 'non-shit' shitcoin?
The real waste of energy, one could argue is pornography, which hogs around 30% of the internet, with little value output.
Imagine replacing those servers for something more productive for humanity as a whole.
For the same reason Bitcoin has value, you could argue porn has value.
At the very basic level, if someone is paying for it, who are you to decide it has no value to that person?
Porn doesn't creates value storages, except dopamine hits.
And am not making a personal judgement, but just making a contrasting argument for someone who says that mining bitcoin is a waste of energy.
- south chinese sea islands
- HK annexation
- pressuring Taiwan and constructing infrastructure towards the island.
- hacking attacks
- tibet (making sure homeland security is maximal)
- the concentration camps with Uyghurs (making sure homeland security is maximal)
- the infrastructural projects in africa to gain access to resources
- the buying of as much european assets (like ports, factories, real estate) as possible.
- the state assisted development of large cyber start-ups/companies (jack ma didn't disappear for nothing)
- the state infiltration of big technology firms like huawei 5g and others.
It seems like a clear picture to me.
One of America's greatest strategical assets is the dollar being the world's reserve currency. It's basically a way to be able to print almost endless amounts of dollars without the punitive danger of inflation. Other countries will buy your excess money to make sure their reserves won't devalue.
If china wants hegemony, they would need to undermine this asset in a subtle way. If bitcoin becomes very mainstream and more stable, then this will become the new reserve currency. With the air of being unbiased. However, china controls many of the levers.
Just my three cents.
what? via hashing sha256?
what are you even talking about,nutter?
You have a clear misunderstanding of this matter and I see it as an opportunity to get other activists involved.
> This is so stingingly dumb it reads like satire
Perhaps, but its also an opportunity to settle this matter once and for all and get the aforementioned crowds into BTC.
In typical HN logic: downvoting doesn't disprove his absurd thesis, only coherent discourse does, but go ahead and downvote it because you don't want to hear your views challenged.
It's amazing how nobody on this board understands it.
Bitcoin advocates are fond of comparing BTC to WWW, but at the equivalent point in the web's development we had Yahoo, eBay, Paypal, Google, Facebook, Amazon...
The only "killer app" of bitcoin is HODL speculation.
I'm thoroughly convinced this author is a made up pseudonym. No other articles, no information on what development work they do for what project paired with a generalized emotional call-to-action while misunderstanding fundamentals.
Reducing energy use for environmental reasons is ridiculous, the sun gives plenty of power and we have fissile materials to last for many millennia. The problem isn't power use, its power production, which requires global enforcement of carbon emission laws.
Why would I want to engage in trustless transactions in the first place? All desirable social relationships are based on trust and always have been. I think a need for trustless transactions implies that one or more parties is not trustworthy, so why would I want to transact with them?
Better to build systems that assume on untrusted actors as the default start state and not regret it after.