The downside of driving your tesla with a case full of bills is that there's no immutable world-wide distributed record of your transaction making it irreversible.
However, the upside of driving your Tesla with a case full of bills is that there's no immutable world-wide distributed record of your transaction making it irreversible.
Bitcoin isn't digital cash, it has different tradeoffs. That implies there are upsides/downsides to all of these factors.
In the end, this situation is one of the few things humans have grown really adept at handling. We're (compared to many other things) very good at negotiating complex social situations and teasing out who are getting shafted in a situation, and we have techniques for dealing with it. (Spreading rumours and/or going to the local leader are prominent among them.)
We have set up economic systems based on trust since forever, and they generally work very well. The only times they stop working are when too large authorities get involved. But there are many responses to that that aren't cryptocurrency.
This made me laugh. It's true, but the name literally means "digital cash".
I'm off to play in the penny stock section of Yahoo... /s
If you don't want irreversible transactions, you don't want bitcoin.
My point is that claiming bitcoin is or isn't inefficient relative to other systems is nonsense. There's simply no comparable system that has the same guarantees as bitcoin, presently or throughout history.
As far as we know, the power cost of bitcoin may very well be the minimum required energy to run an irreversible proof-of-work distributed ledger. Maybe spending 1% of the world's energy to have this public infrastructure is actually a good deal? I really don't know.
Back in the world of actual use cases, we can probably put a ceiling on the value of circumventing AML laws without using a non-POW altcoin at well below BTC's current energy cost.
You brought it up as an upside.
> Maybe spending 1% of the world's energy to have this public infrastructure is actually a good deal?
That seems highly unlikely, especially at a time when we don't have negative externalities priced into that energy cost, and we know we're damaging the climate, and given that the only thing it really brings to the table is decentralisation. Which itself is firstly a bit of a sham (mining tends to centralise) and not even that important to the speculators.
What ledger has recorded this transaction? How might a dispute be resolved? What's stopping the receiver from just claiming you never dropped off the cash when you drive back home?
Turning "often" into "always" is the reason bitcoin exists, and the reason it uses so much energy.
And if they can sign a non-repudiable statement that a given address is theirs, they can just as easily sign a non-repudiable receipt when you hand over the cash.
I am simply pointing out that USD != bitcoin, so the Tesla-driving-cash example is a fundamentally different thing than a bitcoin transaction.
It's like saying "Jeez, it took THAT MUCH energy to get to the Moon? I can drive around the earth a thousand times with that much energy!"
Yes. You can do that. It might be smarter and better for you to do that. But you won't be on the Moon at the end, and there's no way for you to get there unless you take a spaceship.
In this example cars = money, and spaceships = bitcoin.
Everyone else will do whatever kind of wire transfer you do for moving a billion dollars.
edit: fixed a typo