Comment by FlownScepter | Hacker News Reader

Comment by FlownScepter | Hacker News Reader

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> Can't this be said about literally anything?

Not at all. Lots of businesses make money by turning materials and/or labor into products. Other businesses make money solving problems for people or other businesses. However, crypto (and most of the rest of the financial sector) burn shit tons of energy, materials, time, and human effort generating wealth; wealth expressed in either bitcoin that doesn't really exist, or money that also doesn't really exist. The only real product they consistently produce is said wealth, yes, and also huge amounts of human suffering when their given business goes sideways and tanks the economy. With that in mind, maybe we ought to add said carbon taxes. I'm extremely pro killing off businesses that do nothing but generate profit on a spreadsheet for some overpaid stuffed suit and contribute nothing to humanity, nothing to the economy, solve no problems, and in general just cause the economic equivalent of "wind drag."

Mind you, my definition of "contributing" here is purposely overbroad. Coca-cola, despite producing literal sugar water, is contributing, even if that contribution is literally just sugar water that slowly kills you. It made something you can hold in your hands that people want, even if it's horrible. Hell even tobacco companies fit this definition. In my mind, financial corps and bitcoin companies are below those: using the finite entropy of the universe and the limited resources of our world to do exactly nothing.

Crypto mining produces a service, which is maintaining a ledger of payments that works in a certain way.

This specific problem — settling transactions — is an industry amounting to billions. Think of BTC like a MasterCard or Visa competitor, albeit a unique one.

This 'service' doesn't need to exist. It didn't solve a problem that wasn't already solved, we've had ledgers since the Bronze age, and probably before that. That's not to say that the blockchain itself isn't useful, of course it is for numerous applications, including even financial ones. However, Bitcoin as it stands today is functionally useless apart from being something that our system has decided has value, because.... waves hands.

If bitcoin went away tomorrow, a bunch of financial companies would have a lot of problems, a few big holders would be out money, and that's it. For every other human, it's Thursday.

Conversely, if gasoline didn't exist tomorrow, society would collapse.

But that doesn't seem to square with your GP post in my mind. If cigarettes went away, the world will keep moving just fine. They don't need to exist.

But you posit that people choosing cigarettes provides some value, despite the negative effects. Why is there no value than in people being able to chose a money/investment vehicle they believe to be to their benefit?

> Why is there no value than in people being able to chose a money/investment vehicle they believe to be to their benefit?

Because the only thing generated is fake money on a spreadsheet. There is no product, there is only consumption of resources to generate nothing.

For all of what's involved here, you could just pull the same amount of money out of thin air, deposit it in their IRA, and nothing changes, apart from way, WAY less energy consumption.

I think when banks used to issue private money, that was a product. People need a money instrument. In that way, Bitcoin is a (maybe bad) product.

You're right that BTC has no commodity utility outside of "being money." But I think society needs money, as much as it needs an energy source.

Gold is one object that's served the money function in the past. It has properties (fungibility, durability, scarcity, etc.) that money needs. But it's "dumb" and cumbersome, as physical objects are.

Building digital objects that serve the money function is important. One solution is the centralized ACH/banking system. But this has drawbacks --- poor scarcity, high political exposure, etc. I view BTC as simply building a competitor. You get better money properties, at the cost of more energy, etc.

Is it worth it? I don't know. But that partly depends on how the future produces energy.

(Not saying I agree with the article) But that doesn't change how you do the calculus. Every good or service has some positive value to people roughly measured by price people are willing to pay for it and negative value measured roughly by the total value of the resources needed to produce. In most businesses or as an individual this is all you care about. But in addition goods and services can also have positive and negative externalities. Universal trash collection has the positive externality of reducing disease. And basically every consumer good has a negative externality of producing (some) trash.

As a whole people we should include these externalities in the value prop of services despite the fact that businesses and individuals don't because it's a cost we collectively pay.

Trash is my biggest pet-peeve example of this. As an individual I have very little power to control the amount of trash I produce because goods I buy come with so much stupid packaging that I can't give back or recycle and there is no incentive for the people in the position to affect change to do anything about it because they don't bear the cost.

In a similar fashion carbon taxes help to capture the negative externalities of energy use. And if the article is true then collecting that tax would make it so that bitcoin mining is (right now) unprofitable. This is to be expected since such a collection would be sudden increase in the cost of mining when the market has pushed margins thin. The market would adjust, transaction fees would go up, and miners would find non-carbon producing energy sources and we'd probably reach a new equilibrium that is profitable for everyone involved again.

Bitcoin currently consumes roughly the energy used to power one quarter of CANADA.

I'm optimistic that there is a better way to store a ledger as you describe. Perhaps a database?

Not better in terms of Bitcoin's goals of decentralization and censorship resistance...

We've decided to solve that problem by consuming very nearly the entire residential power consumption of Canada, a country of 38 million people.

We've done this with a network that can process 400k transactions per day (at $20/transaction in fees), as compared to visa, which does 150 million per day.

Surely, we can do better?

You're a software developer, so if you really believe that, get to hacking.

It's clearly an industry with huge potential if it is economically viable to spend money buying an Argentina's worth of power on it.

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