When water prices are lower people water their lawns more and take more baths.
When shipping ePackets from China is cheap, people buy more stuff from there.
I just don’t see how Bitcoin responding to supply and demand is different from any other consumable.
It feels like the argument makes the unstated presumption that Bitcoin has no utility, which is a separate debate. Bitcoin advocates would say that more and more miners arguably provide greater security assurances making the currency itself more valuable.
This is human behavior responding to incentives. Yes, more energy is burned, but more people get places.
What I’m talking about is like if a car responded to the price of gas decreasing by 50% by revving in neutral until the total cost per mile was the same.
When the mining efficiency is increased, that isn't translated into more bitcoins being mined or more people benefiting from bitcoin. The matching mining difficulty increase ensures that all that extra efficiency will be turned into waste heat.
> Bitcoin is far from unique in this. When gas prices fall people have been shown to drive more. And buy less efficient cars and drive them less efficiently (faster, more aggressively).
I don't think that's true, or it's only true if you look at it from a consumption perspective that ignores important parts of the picture.
When gas prices fall, more energy is used, but travel miles increase. More work gets done per dollar.
When bitcoin mining gets more efficient or energy cheaper, the amount of bicoin "work" done stays constant, because the difficulty changes to compensate. It's like if roads got longer the cheaper gas gets.
Not quite. The extra work it does allows the network to secure itself better. We don't have to agree with this energy use, but it does do something.
Q: How do we imagine central banks would 'attack' a cryptocurrency, and how is a cryptocurrency (or its users/owners/proponents) going to defend against whatever form such attacks might take?
Bitcoin mining should soon be seen as national security threat for countries that have the most bitcoins, that's why having so much hashing power in China is dangerous.
(This is a genuine question, I'm not nearly as well-read on this as I should be) What would this achieve, and whom would benefit?
My naïve assumption would be that coordinated, deliberate (over-)regulating of cryptocurrencies and/or attempting to manipulate prices lower might be a) much cheaper, and b) much more effective.
If you bring enough political pressure to bear on any particular international financial flow, it takes quite a lot of (political!) effort to stand up to that.
Look at what happened between the US and Iran re: the reintroduction of sanctions; then look at the response from France, the United Kingdom, and Germany.[0][1]
Can Bitcoin and its backers (yet?) muster sufficient political muscle to respond if there's a coordinated political attack?
[0] https://www.europarl.europa.eu/thinktank/en/document.html?re... [1] https://ecfr.eu/article/commentary_trading_with_iran_special...
What you suggest is more similar to banning gold, which happened 100 years ago in US. Where do you think gold price went after that?
Where the gold price when after 1933 isn't that relevant to all those who were forced to sell their gold to the Federal Reserve at that time.[0]
Thought experiment: were your national government to pass a law forcing you to sell your Bitcoin to them at a price they pick, you would appear to have precisely two options: 1) sell, or 2) be prosecuted
There's plenty of precedent for 2) [1], so I'm guessing most people would end up opting to sell. That would appear to be the end of that... (?)
For clarity: no, I don't think this is right. It might happen anyway.
[0] https://en.wikipedia.org/wiki/Executive_Order_6102 [1] https://en.wikipedia.org/wiki/Executive_Order_6102#Prosecuti...
Turn off electricity to half of residents because you have this crazy idea that doesn't help them? Buy miners just to get nothing out of it at the end?
Also what do you think other billionaires with Bitcoin holdings do? Sell it all, or counteract by buying even more miner equipments?
It would be a political disaster unless all natiom states work together to take over all miners...which is a possibility.
https://en.wikipedia.org/wiki/Jevons_paradox
We can't simply just rely on improvements in efficiency to solve these problems.
Whereas there is very little change in the bitcoin mining, unless you have fetish for long zeros in hash values.
Without Bitcoin, we could be retiring coal plants with the additional solar and wind that have been coming online. Instead, every additional Watt-hour we generate is used to mine Bitcoin on top of existing demand.
Nuclear is mostly baseload... not so much because its impossible to ramp-down nuclear, but because nuclear's initial-investment (site planning / engineering / regulations) are the bulk of its costs. Ongoing costs (ie: fuel) are miniscule.
There's "no point" ramping down Nuclear, given its miniscule fuel costs. Might as well keep pumping electricity as long as the price of electricity is non-negative.
So only gas ramps up-and-down.
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As such, Solar / Wind + Gas Peaker combinations are very good for ramping down Coal production. Because the bulk of electricity is needed in the daytime (due to the hot sun making AC work harder), Solar/Wind + Gas Peakers will use less fossil fuels than a Coal baseload generator over the same period.
For places like California which is facing a shortage of Water, Hydroelectric is a weaker option. Ex: if you run a dam in reverse for Pumped Storage, that implies sucking up the precious water from the lower-reservoir back up to the upper side.
Realistically speaking, the near term future is Solar + Gas peakers. We should build out as much Hydro-electric as possible, but most good river sites are already built out. (IE: Rivers which have a large change in elevation to make a Dam project actually worthwhile).
Maybe hydroelectric isn't an option for California, but in the east, there might be much more of an opportunity.
Its not like the East needs more hydro / energy storage. They've already got GW-hrs of energy storage. That's the "problem" about geography-based solutions: the places where Hydro already makes sense are already built up 50 years ago.
Not that that makes Hydro a "bad idea" or anything. If anything, it proves how Hydro has been tested for decades and is effective. It does mean that the East can build up more Solar Panels, since there's plenty of energy storage available.
Coal plants tend to be quite low on this list due to their poor scaling and obvious environmental impact - in fact for a while (I'm not certain if this is still accurate - it's about a decade out of date) one of the last entries on that list was a rarely activated coal power plant in downtown boston that had an extremely inefficient conversion ratio and was deemed exceptionally dangerous due to being located in a population center - still, in times of extreme demand it was standing ready to be activated.
Let's assume for a moment that I live "off the grid" and run my full BTC node using my own solar power. Is that something that should be banned? Should it be shamed?
I don't know where to draw the line.
Should CEOs who put gold on their balance sheets be put to task for the environmental damage that causes? Should companies that buy conflict minerals be put to task for that as well? If so, you're just describing a pollution tax.
The difference between this and a tax is that it’s not done by the government, but for what it’s worth I don’t oppose that either.
They very frequently are.
Buying increases the market price, which increases the market value of the block reward, which increases the amount of energy miners are willing to use to earn the block reward.
But the comment I'm replying to seems to imply that it doesn't matter where the electricity comes from, that bitcoin is bad regardless of how the electricity is generated.
A global carbon tax would be great if it were enforceable but it’s not. Just look at how we treat our oceans. It’s especially a problem with Bitcoin since production will naturally shift to the cheapest location, and since it’s fungible and non-physical this can’t be accounted for with trade law/sanctions the same way it could with manufacturing.
it does, kind of. as we use up the easy to find deposits, the remaining deposits are harder to mine/refine, so essentially it does get harder.
Bitcoin adds artificial scarcity that isn't intrinsic. And unfortunately society as a whole pays for that additional scarcity by increasing the resources spent mining blocks.
I am not saying this is an unacceptable trade-off all things considered. I just think the gold analogy is flawed.
I disagree. Gold was specifically chosen to be rare and hard to counterfeit. That's why we don't use sea shells as a store of value. In that respect I don't see how awarding value to holders of a shinny yellow metal is any different than awarding value to holders of a hard to find hash.
(But yeah, gold hoarding is pretty wasteful in multiple ways too)
Isn't most hoarding wasteful?