When Bitcoin miners take over a town (2018) | Hacker News Reader

When Bitcoin miners take over a town (2018)

politico.eu

203 pointsedward475 comments

I am beginning to wonder if energy is what will eventually doom Bitcoin. Currently, Bitcoin consumes more energy than Argentina [1].

Another article suggests the carbon footprint of Bitcoin is equivalent to New Zealand [2].

It's not just the cost of mining new coins (which will ultimately end) but the cost of maintaining the network. The more valuable the collective Bitcoins are, the more energy you need to spend defending it against 51% attacks.

To the apologists claiming there's no other good use for that energy, it's not simple. Using too much electricity can raise the price that everybody pays [3].

Miners will keep chasing cheap power but I expect, much like ArbBnB, municipalities, states and even countries will increasingly clamp down on it.

The thing is... Bitcoin solves a problem for almost nobody. It's almost entirely a speculative bubble. Citizens of stable countries are almost entirely better off with traditional currencies. Try and see ordinary people deal with a Bitcoin wallet and discover there's no recourse if a vulnerability in their computer means the contents are irreversibly stolen.

I realize there are corner cases (eg sending money to and from Venezuela). There's also a lot of illegal use cases.

Thing is, blockchains aren't really as immutable as pundits suggest. Bitcoin and Ethereum have had forks.

[1]: https://www.bbc.com/news/technology-56012952#:~:text=Cambrid....

[2]: https://www.cnbc.com/2021/02/05/bitcoin-btc-surge-renews-wor....

[3]: https://www.pbs.org/newshour/show/cheap-power-drew-bitcoin-m...

Forks don’t mutate the origin chain.

Chains are amended, not mutated. Consensus about what new blocks to accept to the chain can change at any time. For example the chain following the original Ethereum rules is now called Ethereum Classic and its market cap is less than 0.5% of the new consensus.

Unfortunately, Ethereum did infact mutate its chain. Bitcoin never mutated the chain, but once a fork was done to abandon the original chain from a few blocks back, and start mining a new chain from there, thus invalidating some transactions. However Ethereum did something which is essentially a crypto-blasphemy. They reversed a single transaction without a valid signature. Ethereum-Classic is the original chain that still contains that transaction.

The fact that they created a new chain diminishes one of the main characteristics of a blockchain. That it can't be altered.

This has always been my biggest sticking point with cryptocurrencies. It doesn't take into account that sometimes you need to fix a mistake.

Cryptos also have a usability problem. If you forget your login credentials you lose access to your account. If you forgot your credentials at a regular bank, they have multiple avenues for figuring out if you are who you say you are. Eg post etc.

Bitcoin did not break any "technicality". Technically speaking, the chain with most work is to be considered valid. What they did back then was, a bunch of miners got together and created an alternate chain with more work. So it's still technically the correct/longest chain. On the other hand, Ethereum just plain broke the sanctity by basically creating a chain that contains a transaction without a valid signature.

>Bitcoin solves a problem for almost nobody.

Same as Facebook or Twitter or Instagram. They may use less power but their negative influence is far greater.

What negative effects are those?

https://www.netflix.com/title/81254224

aah the irony lol

Is this supposed to be some reductio ad absurdum? Shut down bitcoin and social media. Humanity is better off without either.

> It's almost entirely a speculative bubble.

Just the other week an older relative asked me to help get them set up so they could buy Ethereum. Another friend asked me to help them setup an account to buy Doge. Neither have any intention of using it as anything besides a speculative store of value because they hear other people are buying it, which would be fine if it didn’t actually have such poor environmental externalities.

What a time to be alive.

Same thing happened when it peaked at 20k - the hairdressers were talking about Bitcoin and altcoins. The difference this time is big time investors started gambling with it - so who knows where it's going to go.

Silver was a big bubble at that time too. I knew the end was near when the owner of a restaurant I frequented showed me the silver statue he had made of his dog.

Once you have real ETFs the crypto mania will turn into yet another debt fielded bubble. In the meantime, enjoy the ride!

It is the bed central banks have laid for ourselves. They did and continue doing everything in their power to prevent asset price deflation, and this is the result. And I imagine that when things will get even more out of control we will get capital controls.

Given that money supplies contract during recessions, which drives deflation, I would argue that they did everything in their power to prevent both asset price deflation, in addition to actual, main-street deflation.

It will be interesting to watch silver prices in the long term (20 years),as it's supply will be getting lower,while some important industrial applications will unlikely to ne replaced quickly enough.

I think Silver is the straw that will break the camels back, it’s hard to know if it will be in 1 or 50 years but it’s fungible and affordable while also having increased industrial usage. At this point it is almost at parity for industrial consumption as it was in the 90s when silver was used to develop analog film. It’s certainly true that topological insulators may replace silver in many electron transfer applications. That being said medical uses due to the way it kills micro organisms through sulfur attraction, and it’s thermal properties, will possibly continue to expand industrial consumption.

Indeed, silver is actually useful in a huge number of ways, from electronics and technology, to making beautiful and functional items for the home, to defending against supernatural creatures, which brings us back to Bitcoin.

I'm guessing a lot of people also tried to get in on the dot com bubble, does it mean we write off the internet as a speculative bubble that's not providing any value?

> a lot of people also tried to get in on the dot com bubble

Ex ante, it is difficult to differentiate a Pets.com from an Amazon, or a dot com bubble from a beanie baby boom.

> it is difficult to differentiate a Pets.com from an Amazon

Arguably a small minority were able to differentiate and it paid off very well for them.

> a small minority were able to differentiate and it paid off very well for them

True. But from a policy perspective this punts the problem. Ex ante, identifying the president from the deluded is difficult.

> identifying the president from the deluded

I'm guessing you might have meant "prescient" there?

Then again, perhaps not.

They may feel like they were able to differentiate, but without an actual explanation of how they differentiated, we can’t determine whether they differentiated or whether they got lucky.

I mean sure, but this is sort of a straw man - of course bubbles can exist even if the underlying asset has fundamental value. The Internet, housing, and tulips are all great things with value. But it’s not entirely clear to me that Bitcoin provides more value than the energy cost it requires to sustain it.

Consider the costs, both environmental and financial, to mine, secure and transport gold.

How does it compare against Bitcoin? What intrinsic value (besides "ooh, shiny") does gold actually have?

I agree that BTC and cryptocurrencies generally are utterly wasteful, but what too many look at is the headline figure of energy consumed, and not what energy is being consumed.

Disclaimer: I think BTC is a total waste of time, and I am long BTC because I think it'll buy me a house one day too.

(EDIT: I also have gold too)

Gold can be used to make jewelry which is a big cultural thing in most of the Old World. It's still "ooh shiny" but it has value in being a tangible "shiny" good used to keep up appearances and show status.

I don't know how you can show status with Bitcoin though. Maybe show your server farm or something.

Most of the bitcoins i bought are super shiney! did you get dull ones?

Gold is used to make electronics cheaper, and it's used in medicine.

Shiny gold prevents oxidation on electrical contacts and makes your computer work. In most chips there is a bit of gold, not a lot, so there is value in that.

Isn't platinum better for that?

platinum is more electrically resistive (less conductive) and more expensive than gold

The time someone explained email to me, I was immediately hooked.

But we're well over a decade into cryptocurrencies, and there is no application for them yet except crime.

That’s hardly fair. The world is full of unbanked people, people who are simply not interesting to the regular banking system and so have no access to it. Yet they have needs. Bitcoin is probably crap for this because transaction costs, but the need is still there.

My friend, this bank the unbanked meme is a tired trope that all the cryptocurrency apologists love to push. But does anyone really want to be their own bank? Consider the following...

- You could lose your wallet and have nobody to phone in to get your information back (regular banks often can help you here)

- Conversely, you may think "Gee, I should make backups of my keys!" which isn't a bad strategy, except if any one of your backups is compromised, you lose everything, and each new backup creates an inherent new risk in getting leaked

- You could get some trojan horse with steals your cryptocurrency, and once again, you're SOL

- There's a lot of moving parts that all need to be present to make cryptocurrency even remotely viable to so-called unbanked classes (I presume you mean poor people that have little means in the first place?)... like an active internet connection to talk to said blockchain, possibly even a vendor or other party even willing to deal with cryptocurrency in the first place

- The volatility swings are absolutely ridiculous

And of course let us not forget that those that simply want to transfer to someone, then have that someone quickly convert to their home currency of choice may not necessarily be possible, due to some exchange level ban by their country's exchange controls.

I wish cryptocurrency proponents would just be honest and just say they want to make a quick buck with as little effort as possible, and leveraging the peanut gallery to get here is the best way to do it.

Sounds unethical.

I've yet to see bitcoin produce anything close to the utility of something like M-Pesa for the unbanked.

Cryptocurrency/blockchain is a valuable concept the way the internet is, but Bitcoin? Bitcoin is a nice proof of concept, but as a currency it has big problems that look like they won't be solved. Pets.com was also a good proof of concept.

It's not fine even without environmental impact: getting yourself into an asset class with zero understanding about it is a recipe for disaster. There are tons of examples of real estate investors burning their money because they lacked fundamental knowledge and etc. Even the management meetings I attended are now peppered with crypto news and how x gone by y%, even by the sound of it everyone would have been better off just buying some ETFs, instead of pouring money on random peaks or troughs.

"they lacked fundamental knowledge"... you think people should get fundamental knowledge ? on _bitcoin_ ? It is fundamentally worth $0.

The only knowledge I try to spread is correcting anyone who uses the word "invest" and recommend the proper words of buy, speculate, or gamble when it comes to cryptocurrencies. I guess I will add "fundamental" too since I think you meant technical analysis. But even that implies brains when it really is just voodoo unless you are an influencer.

USD, EUR etc are also "fundamentally worth $0". Fiat currencies and crypto currencies are just a median for representing value for real goods and services. What's unique about crypto currencies is the distributed method of transacting and therefore the inability for them to be regulated. The whole financial industry, is fundamentally a massive waste of humanity's resources. Fiat currencies are regulated, regulators are a target for bribery, deals are made etc... Cryptos are a massive waste of electricity. Decentralization is a great way to curb corruption and restore a natural economy but we need to solve the electricity problem. The electricity problem came from the mechanism chosen to "fairly" distribute the initial pool of cryptocoins based on mathematical effort.

Well USD is fundamentally worth $1. Really the most fundamental of all.

What’s $1 worth? It hasn’t represented a physical asset since Nixon.

Separate question. I was responding to a question about the value of things as measured in currency.

$1 is worth $1, tautologically. If you happen to believe $1 has no worth, just send me all your dollars. I can use them. I'll send you a loaf of bread, which you can eat to sustain life.

Nearly everyone believes $1 is worth something so it's not in my interest to give you $1, particularly with a snarky response like that. Dollars are not actually a measure of any physical thing, unlike metres or whatever. They represent what we perceive as worth. That only exists in our heads.

Currencies can be valued based on interest rate differentials.

Bitcoin is a bit underdeveloped there.

By fundamental in this cas I meant general understanding about how it works and how shady the ecosystem is,with endless pump and dump drummers,random kids selling 'tips',etc. An average person, with absolutely zero information advantage is losing the moment they buy it hoping it will bring fortunes.

Around the time of the late 1990s Internet bubble, I read someone's observation that you can identify an investment bubble when barbers and nurses and taxi drivers start investing on the assumption that prices will just keep going up. That matched my own experience of having lived through the stock and real-estate bubble in Japan in the late 1980s: I knew shopkeepers and rice farmers who borrowed money to buy stock and land and condominiums, certain that their value would continue rising. The American real-estate bubble that led up to the 2008 crash looked very similar, as does Bitcoin now. It seems certain to collapse, though I can’t predict when.

Sounds like the Ford story:

The fable about Henry Ford has rarely been as apposite as now. During an American recession, the shoeshine boy on the sidewalk gave Ford some tips on the stock market. Ford's response: "When the shoeshine boy is telling you what to buy, it's time to sell!"

For what it's worth the first hit I got searching for it was from January 2008...

Yes, the shoeshine boy! That was the story I read. Probably it was in 2008, too. Thanks for the clarification.

I’ve also heard it attributed to Joe Kennedy, who supposedly went on to short the market as the Great Depression was about to hit.

The version I heard had Joseph Kennedy.

As I understand it, Doge works on auxpow now so it's not nearly as bad as it used to be, or as bad as eth/btc is currently (and asic mining is not as profitable as daggerhashimoto for retail miners; ASIC miners will already be located in a DC where electricity is cheap/likely underutilized).

>The thing is... Bitcoin solves a problem for almost nobody. It's almost entirely a speculative bubble. Citizens of stable countries are almost entirely better off with traditional currencies.

Tell that to citizens of countries who have experienced hyperinflation and whose currencies became worthless almost overnight.

There is a reason every asset is going up right now. Real estate, stocks, commodities, and crypto. More money is being printed this year than ever before. The financial media and the fed can claim minimal inflation but the markets are exposing that claim as dubious.

> Tell that to citizens of countries who have experienced hyperinflation and whose currencies became worthless almost overnight.

Yeah, it's almost as though they had invested in Bitcoin during one of its crashes. What do you think they will say next time Bitcoin crashes back to 10% of its value?

That they were foolish for holding onto Bitcoin itself. That's not what it's being used for.

Here in the West there's basically no barriers for someone like me sending $10k or $10 million wherever, for whatever. Just ensure I pay any taxes on investment profits, and don't fund terrorists or drug cartels. Many countries are far more strict. E.g., Argentinians can only move $300 a month out of the country legally, as I understand it. If they want to purchase real estate in Canada or Australia as a hedge against inflation, for example, that can be very hard even if they have the funds.

Getting around capital controls seems to be a niche for Bitcoin. I can think of few other ways to simply send $10,000 from Argentina to Nigeria in one hour, reliably and securely. Assuming people can exchange Bitcoin for cash or similar on both ends, it can be near-ideal for certain pairings compared to the legal and traditional financial system.

> Getting around capital controls seems to be a niche for Bitcoin

Q: If you pitch up in, say, Canada or Australia, and offer to buy a chunk of expensive real estate and pay with Bitcoin, who is selling?

Q2: ... or do you have to convert to AUD/CAD first, and if so, which bank(s) can you rely on to not worry about KYC?

Q3: ... or do you have to actually travel to Canada or Australia first, in order to open a regular bank account first, in order to have somewhere to move your Bitcoin to, in order to have local currency, in order to be able to pay the local seller?

I do know that people have transacted real estate in Bitcoin in Canada before, mostly as a gimmick, but no reason you couldn't do that legally on the Canadian end. But I assume one would convert to CAD. What's the problem with KYC on the Canadian bank end? Canada has no such controls and wouldn't care that the money was laundered out of Argentina.

Even if you had to do that, laundering the funds into Canada unfortunately does not seem it would be difficult in practice, given the apparent scale of money-laundering associated with the Vancouver housing market. And you do not have to be physically present to acquire property in Canada.

> laundering the funds into Canada unfortunately does not seem it would be difficult in practice

Is this true only if you're sufficiently under the radar, or does it still hold true no matter how big/famous/wanted a criminal you are?

EDIT: see

https://www.step.org/industry-news/canadian-citizens-challen...

and

https://www.fintrac-canafe.gc.ca/guidance-directives/client-...

Of course some people get caught. (Though some of what I'm describing wouldn't be considered illegal under Canadian law in the first place. You can just buy property with BTC here if you have BTC.) Still, it's a huge problem:

https://www.cbc.ca/news/canada/british-columbia/cullen-commi...

https://globalnews.ca/news/7593419/bc-casinos-too-dangerous-...

Western Union operates all over the world, you can send money instantly and the fees are lower than Bitcoin's network fees for transactions.

Another reason why every asset is going up right now: https://fred.stlouisfed.org/series/PSAVERT

Savings rates have exploded, and those funds need to go somewhere.

Is the arrow of causality that way, though?

I'm at the traditional "first-time-homebuyer" age, and I'm personally saving a fair portion of my income primarily because assets, such as houses, are so expensive. Were housing cheaper, I'd be paying a mortgage instead of a saving account.

(And, I'd argue, sending longer doing so too due low interest rates.)

It includes home purchases, so that would not be a factor.

As per the earlier link:

> Personal saving is equal to personal income less personal outlays and personal taxes; it may generally be viewed as the portion of personal income that is used either to provide funds to capital markets or to invest in real assets such as residences.(https://www.bea.gov/national/pdf/all-chapters.pdf)

Looking at both, it looks like the gradual decline in the savings rate since the early 1980s correlates with a gradual decline in inflation from that time: https://www.macrotrends.net/countries/USA/united-states/infl...

There are other safe-havens against inflation which have existed for hundreds of years. Bitcoin didn't invent the concept of an inflation hedge, and the citizens you refer to had and still have standard alternate solutions. Which in all honesty are a lot safer than a digital collectible token with no intrinsic value that's primarily used for speculating and drug deals, which can be regulated, shut down, or taken over whenever your or another country wants to shut it down.

Bitcoin is by far the best hedge against inflation. All assets tend to zero in Bitcoin terms, long term.

This has been true for the last 12 years and will continue to be true.

This is groupthink propaganda nonsense. Bitcoin can only do 1.5KB/s of transactions and the average transaction costs $26. Any rapid decrease in price will lead to rapid decreases in mining and thus transaction throughput. Does this seem like the future of financial transactions to you?

Transaction throughput doesn't depend on network hashrate. It gets adjusted to keep fixed througput.

In the short term it does. The block difficulty adjusts but not immediately. If hash rate drops rapidly, the time between blocks will lengthen, the time to adjustment will lengthen and the throughput will drop.

Yes. Bitcoin adjust difficulty to hash rate every two weeks. So if you drop hashrate more rapidly than that you can have lower transactuon throughput for up to two weeks. One on average.

> All assets tend to zero in Bitcoin terms, long term.

Good luck with _that!_

> Tell that to citizens of countries who have experienced hyperinflation and whose currencies became worthless almost overnight

At best, this argument turns Bitcoin into a massive subsidy by stable countries of unstable ones. A subsidy paid for in the form of higher energy prices, environmental damage and opportunity cost.

A car used to cost 2BTC, then 20BTC, and presently some 1BTC. Bitcoin isn’t exactly the model currency for stability.

You achieve stability through diversification, not by buying all stable assets.

It's kind of like saying you don't want to buy an index fund because there are some really volatile stocks in there!

Remind me again, are we talking about an asset or a currency?

It depends what your argument is.

If you are arguing that bitcoin is a bad currency because of high transfer fees, very few merchants accept it and that very few people are actually buying things with it in any meaningful way, then that's wrong because it's an asset.

If you are arguing that as an asset it is purely speculative and has no fundamentals and zero return other than appreciation, then that's wrong because it's a store of value.

If you are arguing that as a store of value it's actually highly volatile and has experienced multiple serious crashes, then that's wrong because it's actually a currency.

This is the primary tactic Bitcoin seems to use to deploy to combat any criticism - if someone critiques its ability to do one thing you claim it's something else..

Depends on which problem of bitcoin they are currently defending.

Do you not view the USD (or other currency) you hold as an asset?

The US dollars' value is comparatively stable...

Currency isn’t an asset. It never has been and it’s not intended to be.

it is both and neither, it has properties of both, it also lack lack some properties of both

Bitcoin is an asset that is designed to become a currency.

> Tell that to citizens of countries who have experienced hyperinflation and whose currencies became worthless almost overnight.

I don’t think any of my family in Algeria are using Bitcoin, and same for my wife’s family in Bangladesh. In Algeria at least, generally you’ll go to a hawala money changer who gives you better rates than the banks and exchange your local currency into Euros. If you need to send money abroad you use the same old Islamic hawala system to send it to France or wherever else.

There will probably be some useful things built on top of blockchains, and I don’t think crypto has zero value, but I don’t think it’s going to reasonably fix a situation of a failing state.

How do you know the hawala systems aren’t at least partially based on Bitcoin now?

Yeah, and how many citizens of these countries buy and use BTC? Particularly with how unstable it is compared to other assets like e.g. gold.

Mind you, I speak as someone who is a citizen in a country that experienced that. Not now, but back in 2016, our currency got halved. Nobody, and I mean absolutely nobody ever thought "I should have bought crypto."

When the 2017-2018 crypto rush happened, and people started mining ETH, well-off people* here got onto it and started mining ETH.... only to immediately sell it as they mined. Nobody held onto it.

*well-off because GPUs were absurdly expensive due to the inflation, and it only got worse when the shortages hit.

EDIT: I also want to add that very, very few people here in my country actually understand what bitcoin even is (or cryptocurrency or blockchain). The people that I have seen support mining here only really view it as a way to earn some money while doing nothing.

This is quite spot on.

Cryptocurrency lately has become this techbro version of a white-savior complex, where we think this magic technology will somehow uproot the lower lesser classes from their eternal toil and discord, yet I've seen plenty of these kinds of folks either not bother to get in on this (because it's likely too difficult to comprehend) or lose their shirt because they didn't make it on the right end of a transaction and lost more money to some cryptocurrency-rich fat cat, laughing all the way to the bank.

“Techbro” “white savior complex” Do you actually talk like this or is it just the party line you spit out for virtue signaling points?

I mean yeah, technology has magically elevated the toiling masses from shitty work. When was the last time you worked in a factory for 16 hours a day? When was the last time you got scurvy as a sailor on a wooden ship? When was the last time you tilled a field with the trusty family oxen?

I'm dead serious. Your comment seeks to discredit my position, but I'm speaking my truth to what I see.

Sorry, but the bitcoin fans get condescending, acting like they can save us from those evil banks. Not a chance.

Technology that has improved society does absolutely exist though, like the world wide web, which has proven potential and has revolutionized the way we do business and commerce.

Cryptocurrency on the other hand is just an ancap wet dream. You are free to disagree with me, but bitcoin has been around for 12 years now and, yet, I see no killer application that doesn't involve some kind of grift. In the same period of 12 years, from the start of the WWW to around the early 2000s, so much innovation happened by comparison.

So the guy who uses the racist phrase “white savior complex” non ironically, who only admits technology is useful after it has undeniable global appeal, is supposed to be some barometer if a technology will be world changing? Frankly, you can’t possibly know until the dice stop rolling. Just like the internet, or the barcode (look up the guy who invented it, his story is cool.) Fact is it’s too early to tell what impact Bitcoin will have on history. Your self righteousness prognosticating just shows your ignorance of history, humility, and sound reasoning. According to you something is only useful if it has already demonstrated its use, like the web. Well duh, of course the web is useful. You’re not exactly Nostradamus with that one. Will Bitcoin be useful? Maybe, maybe not. Time will tell. Edit: s/p

Eh, can you tell me what the killer app is supposed to be? I'd like to know. Because in 12 freaking years, there has to have been something better than "lets kill our planet as quickly as possible while early adopters get rich".

You got me there. I see a lot of cool possibilities, neat ideas, but no killer app. It’s all too complicated. But how long was that the case for the web? Decades? Even circa 2009 when I last did public facing IT work, many people were still talking to their mice. I’m not saying Bitcoin will be any more than a interesting diversion, but much like the web, it is far far too early to tell if it will just be a TempleOS style wet dream, or something that utterly shifts the landscape of the how we live our lives. (I’m also fascinated with how COVID is reshaping our planet.) When was the last time something changed how all of humanity lives their lives, globally, in a short period, before COVID? The internet? Electricity? What were some other big ticket changes you guys can think of?

So to talk about the killer app we’ve got to differentiate the technology from the first use case, which is digital gold for now

Ethereum goal was to allow people to build different types of dApps by opening up the number of op codes on the virtual machine - this allowed people not only to build bitcoin on ethereum but also other types of apps - like Uniswap (Exchange), Compound (Lending) and dydx (derivatives). These are just a few. There’s a whole other world of NFT’s that is also bubbling up now. Aragon is building a DAO creator and launcher where you can build and run organisations in a digital jurisdiction.

Now as the World Wide Web decentralised the power to distribute information via a protocol, Blockchain’s can allow that for anything that requires trust - such as finance

Though the biggest limiting factor is still scalability of Blockchain’s but the Ethereum team and a bunch of other teams are solving that by being at the breeding edge of mechanism design. Ethereum realised Blockchain’s aren’t scalable and are bad for the climate long long ago - and already have plans to move away from PoW (energy intensive) to PoS (not energy intensive)

P.S - I got into bitcoin early because believe it was a hedge to inflation - realised it isn’t really a value add to society and have been dabbling with ethereum projects since 2016

I get the hate HN has for bitcoin - but deflationary assets are a use case especially when central banks believe they can pump infinite money. Nobody knows where this will end but your best bet is a deflationary asset

I love tech and finance - I believe the next decade we’ll see finance being disrupted by these protocols as ethereum moves to PoS

sumgame, I appreciate this long and detailed response, as well as your insights. That said, here's why I think cryptocurrencies (specifically the underlying blockchain concept) are mostly redundant to us. The answer might surprise you, because it's less about technology and more about human nature and social engineering.

For something like blockchains adding "trust" to finance, I have one big problem with this. Humans on both ends of the transaction still need to conduct their business honestly for this to work. Sure, the so-called smart contracts system, like the one found with Ethereum, allows you to write an immutable record to the blockchain that dictates whatever terms and commit it to what is essentially a distributed append-only database. Additionally, if you make a mistake on a smart contract, d'oh! You basically can't change an immutable record. You'd have to append over it with a fresh one, which, depending on how energy intensive this blockchain application is, contributes to unneeded waste.

Here's where my personal issue is at with all this. Say you decide to take receipt of a delivery from Timbuktu for some fine vases. You receive the items from said vendor and, despite the entry clearly describing what you were supposed to get, you in fact get scammed with a delivery full of sand. So, what do you intend to do? The ledger can be as specific about a transaction as you want, but this won't stop dishonest people from being dishonest. So then you can settle it in a court system, bring the parties to task, and... oh wait. Why did we not just simply use a regular database and time tested ERP systems that have done the job for ages?

I guess what I'm really getting at here is that blockchain isn't some magic bullet that will guarantee specific outcomes in commerce, and in fact, feels like a different way to do the exact same thing we've done forever, but we need to cater to some kind of NIH syndrome.

Back to cryptocurrencies, why do we need so many different tokens out there in existence? Aren't they all trying to generally accomplish similar tasks? That also adds a ton of confusion and consternation, with everyone claiming how their particular cryptocurrency project is truly the best and why you need to use it over INSERT PROJECT HERE.

Fintech is an interesting space to watch, but I see way more projects with less than pure intentions trying to see if they can make out like a bandit down the line.

The world wide web, by comparison, is (and by some sources... was) a truly democratic medium. I'm not sure the same thing applies with cryptocurrencies and blockchain, which all feel like solutions in search of a problem (or projects in search of money from FOMO-riddled folks with nothing better to do).

EDIT: To your point about Bitcoin being digital gold. Yeah... it's nice sounding in theory, but at least with real physical gold, it can survive till the heat death of the universe and doesn't require the constant consumption of resources to maintain it (which I find egregious and unconscionable), as well as not requiring an active internet connection. I'm not a goldbug either, but I can at least concede to gold having a handful of intrinsic properties which lends to it being a hedge in its own right, agreed on over thousands of years in human history.

Also, this statement you made.

"Ethereum goal was to allow people to build different types of dApps by opening up the number of op codes on the virtual machine"

Let me tell you, laypersons won't understand a word of this at all. :)

Edit: I’m a horrendous speller. Damn home schooling. Edit2: mobile debating is hard, on both sides of the podium.

I've only been adding content. I haven't changed any of my positions. Working on a mobile it's a bit hard when you return carriage and sometimes I post anyway.

^ I feel ya there. I’m running into the same thing

Btw read your new comment below mine. Thank you for being a good sport about all this. Please note, I will never personally attack someone I disagree with. I just get a bit heated sometimes. :)

You’re good! And I hope I did not offend. You seem like a kind and thoughtful person. Talking to you has been a lesson in going into a conversation without assumption. Thank you for that. I can be like a bull in a China shop sometimes. Well meaning... but I sure hope you didn’t have any dishes you liked

Dude you're totally fine. No offense taken.

I'm actually of the opinion that I need to be offended once in awhile.

It makes me think.

P.S I was also homeschooled myself. high fives

I loved it because I got through differential equations and had something like 7 math credits... ::looks around suspiciously:: I may have... never written an essay.. Sometimes the free wheeling “do what you want” kind of home schooling can bite you. But we’re figuring out this whole English thing pretty well between us! ::high five::

Ok so HN is a bit annoying as I can't really reply to things you said directly now... but let me break a few things down.

Firstly, did we like become best friends or something? I love how you described homeschooling haha.

Secondly, really just want to say, yes... perhaps my use of the phrase "white savior complex" is a bit cringy and social justice-y, which I'm actually not really part of that camp. I'm just applying that based on some observation of what I see. I just wish the socio-political crap would mostly go away and let the technology of blockchain/bitcoin/whatever stand on its own. Some of the proponents I mentioned earlier in the thread also just make my skin crawl a bit. There is inherent dishonesty in their gospel, I personally feel.

I'm simply trying to point out what I feel is a dangerous game they play, especially with the massive boom and bust cycles bitcoin and its ilk undergo.

I'd feel far less cynical if there wasn't some pyramid-esque (no, bitcoin itself is not a pyramid scheme, but the community and proponents surrounding it make it feel like one in many ways) action going on around it, like all the activity between BTC and tethers and other shitcoins that makes it all look like painting the tape.

I'm of the opinion that currently, this all feels like a redistribution of the wealth in a weird casino like fashion, and not a legitimate growth in real value. That's just me though. For every rich-on-paper cryptocurrency fan, there are also plenty that have lost their shirts in this experiment.

Hope this ramble made any sense. I really appreciate you chiming in, imwillofficial.

> Cryptocurrency on the other hand is just an ancap wet dream.

My exact thought upon reading the Slashdot article announcing the release of v0.3 of this thing called Bitcoin back in 2010. The last decade has only reinforced that view...

It scares me how much of a cult following Bitcoin specifically has. I just saw a post go up on /r/bitcoin about a butter who sold her house for freaking Bitcoin.

I'd hate to be her when (not if) this goes tits up.

Madness. I would hope that it's still a troll but it's not like we haven't seen people do the same thing for all kinds of get rich quick schemes past and present.

Exactly. This is basically digital Amway haha.

Aah yes, paying a $25 transaction fee to buy a $5 loaf of bread at the grocery store with bitcoin. Perfect.

Doubtful it will doom it. Bitcoin and similar crypto scale difficulty based on the amount of power spent.

So if a bunch of miners drop off due to electricity prices or such concerns, the network will simply readjust and keep on going.

BTC has a lot of issues, but nothing forces it to be ever power hungrier. It can scale down the energy consumption and keep on existing just fine.

I'm sorry, this directly contradicts the principle of ever-increasing difficulty for the proof-of-work hash.

Bitcoin and other proof-of-work (no actual useful work being done here either, opportunity wasted!) based crypto-currencies increase the proof-of-work algorithms complexity factor as a means of controlling the rate. Bitcoin cannot scale up without using an ever increasing literal waste of electricity. Want a better system? make a new crypto-currency trust basis... (proof of stake, etc.)

https://en.bitcoin.it/wiki/Proof_of_work

https://changelly.com/blog/proof-of-work/#Proof-of-Work-Draw...

I don't think you quite understand it.

Yes, BTC is proof of work. Yes, complexity increases to control the rate. But that's it.

Complexity has nothing to do with scaling. BTC doesn't scale. It's fixed at 1 block per 10 minutes, 1MB per block. No amount of horsepower is going to give it more capacity, so BTC doesn't scale up by wasting more power. It stays the same.

You can see this in forks like Bitcoin Cash, which took the exact same algorithm, and forked the exact same chain, but gained less miners. After some time it readjusted, and BCH is perfectly functional with less miners than BTC.

I agree that BTC and its ilk suck in many, many ways. But saying that power usage must increase is incorrect. It can remain static or go down without changing the functionality or the capacity of the network to process transactions, because those things don't depend in any way on the hashrate.

I agree with you of the idea that Bitcoin's doom is going to be energy. In my case, I do think Cryptocurrencies are here to stay, and other approaches like the ones used in ETH2, IOTA, Nano, etc will come to replace PoW.

I think at some point, government is going to ban PoW mining in the same way they ban gasoline based cars or plastic bags.

> The thing is... Bitcoin solves a problem for almost nobody. It's almost entirely a speculative bubble. Citizens of stable countries are almost entirely better off with traditional currencies

That's the key: citizens of stable countries are just speculating, but for people of not so stable countries (Mexico, Argentina, China, among several others) where people just do not trust their government & their banking system, Cryptocurrencies deffinitely have value.

In my case, I have part of my portfolio on Bitcoins, because there is no easy way to open a USD account in Mexico, and storing USD or gold is just not practial. And with our stupid president having 4 more years to go, the country is quickly going to a deep recesion. I don't doubt that when a recession come, the government will "lock" the banks to prevent a "cash run" as they did before (and as it has happened in other countries like Venezuela and Greece)

>but for people of not so stable countries (Mexico, Argentina, China, among several others) where people just do not trust their government & their banking system, Cryptocurrencies deffinitely have value

Fair point, but curious in how many shops in those countries you can buys groceries or how many landlords take their rent in Crypto? Because if you can't use it to feed or house yourself then what's the point of owning it other than going back to BTC's only real use cases so far: storing it for speculation, drug trafficking and ransomeware payments.

Plus, can you imagine paying a $26 transaction fee every time you buy a $0.30 loaf of bread with bitcoin?

Bitcoin is a store of value. When they need money to buy groceries or pay rent they will sell an amount of bitcoin.

Stores and landlords won’t take payment in gold or index funds either.

You're making the bold assumptions that landlords or grocery stores accept bitcoin in those countries.

Do they really? Or are you fantasizing a Cyberpunk future where they would?

Because fantasies are cheap, but food and shelter is not, and the ones who make the bread might be more into the cash in hand right now rather than waiting for your BTC transaction to clear.

> You're making the bold assumptions that landlords or grocery stores accept bitcoin in those countries.

The parent is clearly not making that statement.

Parent said ".. they will sell an amount of Bitcoin" which can be done either through exchanges or just as easily peer-to-peer through platforms like LocalBitcoin. If you have Bitcoin in a scenario like that, most definitely will not be a problem.

>If you have Bitcoin in a scenario like that, most definitely will not be a problem.

Until the regime decides to cut off access to crypto exchanges or the whole internet country wide. Good luck cashing out your bitcoins then.

If a regime is cutting off internet country wide that is a problem larger than bitcoin.

Pretty sure if you have your money tied into bitcoin, as the people above suggest as the killer use of BTC, then having your internet cut off easily becomes your biggest problem.

How else are you gonna spend your crypto to buy food or pay for shelter or pay for travel or smugglers to get you out of the country?

Crypto would be great if it could be used 100% offline, like tap your phones via NFC, and boom, coins transferred, here's your bread.

> Bitcoin is a store of value

That's what's said now because it failed as a currency.

It hasn’t failed at being anything. Bitcoin is still very new to this world. Just because at this moment it isn’t realistic to use as a currency does not mean it has failed.

It's been around for 12 years and nothing even close to a killer app has come and it's one promise of utility (as a currency) has proven to not be scalable.

It’s decentralized. Why does it need “a killer app?”

A killer app would prove utility. Something that shows that it has use outside of the ideological and invested. In other words, something that someone on the outside can use. The internet is decentralized and produced "killer apps" that did just that almost immediately. People used the internet and their use of it only increased over time.

Cryptocurrency cannot sustain that. DApps are effectively useless. Blockchains are expensive and environmentally destructive merkle trees and do nothing that git couldn't do faster and easier and cheaper. Decentralization has not proven itself to be useful at all to anyone.

A killer app doesn't even have to be complicated, it only has to be useful. Nothing about cryptocurrency is useful. It is an ouroboros of busywork and self-justification.

So I would ask, why wouldn't a new technology need to demonstrate utility?

> Bitcoin is a store of value. When they need money to buy groceries or pay rent they will sell an amount of bitcoin.

Seems like a great way to lose any stored value in transaction fees. Transaction fees are $26USD right now, which is likely more than what most pay in those countries for their groceries.

Why do people miss the substantial transaction fee when proclaiming BTC as a viable day to day currency? And in poor countries out of all places.

You are right about the price of bitcoin transactions. I misused bitcoins when referring to cryptocurrencies. I actually dont have BTC but eth and other cryptoassets more sensible for trading (my initial comment about BTC inefficiencies might give a clue).

In Cuba there are 2 coins accepted CUC and CUP . The CUC was more or less pegged to the dollar and people preferred it due to distrust of their government.

It happens. And cryptocurrencies will continue to evolve to fill up that trust less requirement.

I trade small amounts of bitcoin with my friends all the time on the lightning network.

LOL, no.

"Try and see ordinary people deal with a Bitcoin wallet and discover there's no recourse if a vulnerability in their computer means the contents are irreversibly stolen."

I lived in a period without debit and credit cards. You dropped your cash it was gone. I'm not sure not having a reversal transaction is the killer missing feature.

Anecdote - to me it is.

I know what life is like with the existing feature of getting thousands of stolen dollars back by relying on the banking (and/or legal) system. I won't willingly adopt a system without it.

Even with cash you had consumer protection laws. So you could get your cash back.

With bitcoin it's medieval ages at best.

Wouldn't the same laws apply regardless of payment? If a store defrauds you or if you know who the other person is in the exchange (regardless if it's cash or bitcoin or gold).

If you don't know the other person then cash or bitcoin it wouldn't matter.

If you drop your cash it's gone. If you drop your bitcoin wallet and you backed it up you still have your bitcoin..

Ah. It was late last night when I wrote this, so for some reason I was thinking "drop cash" as in "drop cash on some purchases" :)

Could anyone in the world hack into your phone and steal your wallet from the comfort of their homes like they can with Bitcoin?

Most Android phones stop receiving security updates after two years or less.

I haven't heard about someone hacking a bitcoin wallet. I've love to hear more details. If I knew how I would try for the genesis blocks.

Can someone hack an exchange or your bank account login/password or your bank or worse setup for an account under your name no phone needed?

> I haven't heard about someone hacking a bitcoin wallet. I've love to hear more details.

There's plenty of malware that looks for unsecured Bitcoin wallets on machines it infects, or masquerades as legitimate wallet software.

If you have root, you just need to wait until the user unlocks their wallet, or if you're lucky, their wallets don't have passwords.

Look into how miners are making use of stranded methane that is otherwise flared and contributes greatly to global warming (23:00 to 1:11:00 in video below)[1].

[1]https://youtu.be/emc83bQYiF8?t=1358

Also, consider the massive dis-incentivization of consumption that BTC will encourage. The environmental effects are ambiguous, and probably not nearly as bad as mainstream media suggests. It could even be net positive.

Bitcoin is putting a cash price on energy consumption. I see this turning into a new positive.

It is clear that you don't believe in Bitcoin ("Bitcoin solves a problem for almost nobody") and thus want to use this energy angle to take it down. Good luck. But if you are more open minded read this thread and educate yourself: https://twitter.com/yassineARK/status/1360343382556483587?s=...

Also, have fun staying po...

> It is clear that you don't believe in Bitcoin

Bo one believes in BitCoin except a few people who don't understand how the word works.

Do educate yourself: https://medium.com/@kaistinchcombe/ten-years-in-nobody-has-c... and followup: https://medium.com/@kaistinchcombe/decentralized-and-trustle...

As to your tweet, it is as ignorant and uneducated as anything coming from bitcoin apologists.

Looks like someone missed the bus

The bus of pure speculation with next to zero tangible value? Yes, I missed it.

Ohh no - someone is staying poor

Im fine, thank you. But it's good that you inadvertently confirmed the only use case for bitcoin: to try and get rich.

Isn't that the goal of all investmemts? Just admit to yourself that you lost the greatest bull of your lifetime because you weren't smart enough to take the time to understand it.

Good luck with your S&P ETF fund.

> educate yourself

With a twitter thread?

I mean, what is the application of Bitcoin, except crime?

Didn't realize you wanted books to educate yourself.

> Currently, Bitcoin consumes more energy than Argentina

How Argentina justifies using so much energy?

Argentina's economy supports the life and livelihoods of some 45 million people.

Bitcoin supports the degenerate gambling habits of some nerds.

> The more valuable the collective Bitcoins are, the more energy you need to spend defending it against 51% attacks.

I wonder how afraid one actually needs to be of 51% attacks. How would the attacker profit from a 51% attack? They might double-spend, or rewrite known history somehow, or decide to only include certain transactions in their blocks and leave other transactions stranded. In each of these cases, it would be clear to everyone that Bitcoin has been broken, and that it has lost its usefulness and the properties it became famous for. The attacker might then control a large amount of Bitcoin, but having lost everyone's trust in it, that large amount of Bitcoin would be worthless. It's not in any attacker's interest to actually break the system, since they would need a gigantic initial investment and get no return on it. (Except if it were very cheap and the attacker's motivation would really be to destroy Bitcoin.)

I don't think we need to fool ourselves that miners are in it to "protect" the network. They're in it to make money.

Now that we have ETFs one could short Bitcoin and profit from collapse.

Interesting point, thanks. I wonder how one would settle a short if the network effectively ceases to exist, or at least ceases to exist as a single, well-defined chain that everybody can agree on. If you short the New York stock exchange, then blow up the building, do you win? :-)

If you short bitcoin-based ETFs on NYSE and Bitcoin subsequently tanks the value of the ETF goes to zero and you walk away with your proceeds from the original sale and with no obligation to give the original ETF back. There is no counter-party risk in a short sale for the seller.

Keynes said "The markets can remain irrational longer than you can remain solvent". Trying to short Bitcoin seems like a great way of becoming more anecdata for this.

The capability of performing a 51% attack and sustaining a 51% attack are very different. Performing a 51% attack by mining a single gets you nowhere (at most you can revert some transactions, that block will eventually be orphaned).

Today i believe, most usage of Bitcoin is for legitimate purposes. There is always lots of illegal use cases for anything with value, if it has value, people will do illegal s** to get it and will use as payment. Human nature.

The energy used since the inception of the network is what makes the network valuable. Think of it this way: to create a cryptocurrency you need some "value" attached to it, Bitcoin does this by converting energy->work->bitcoin, you add "value" to the network in the form of energy and get bitcoin back (you get your "value" back in the form of money when you sell the mined BTC). Ethereum took a different approach (token sale + PoW) and now are moving to PoS.

Pure PoW seems the only way to launch a completely anonymous and decentralized crypto

> Today i believe, most usage of Bitcoin is for legitimate purposes.

Like what? Aside from "speculating that it will increase in value", what are these legitimate purposes?

https://blockfi.com - use your crypto for collateral and take a loan or earn interest on it.

Hedging for massive inflation of government controlled currency is a legitimate purpose. Are people that buy gold or silver doing it for illegitimate reasons ?

Except bitcoin isn't anonymous or decentralized at all...

Transaction wallet ids are public and Chinese miners control the currency.

It's not just Venezuela that is a corner case. China is another one, a one billion "corner case".

Lots of banking problems in your so called "stable" countries like your account getting blocked (try running a business on transferwise or paypal) because of some shit algortihm.

> Bitcoin solves a problem for almost nobody

This is a very Western centric view. Also, I live in the west and see Bitcoin as a good alternative store of wealth.

Bitcoin will die when it is broken and someone hovers up all them coins

I think what will doom Bitcoin is the uncertainty around the identity of Satoshi. Imagine bitcoin growing by a few orders of magnitude, now it's 10s to 100s of Trillions. Is it close to becoming a world reserve currency? At this point, just who is Satoshi becomes a matter on the level of nation states.

Bitcoin grows by a factor of 100x, Satoshi is now a Trillionaire. He has vast reserves of money he can move around anonymously. Does he still exist? Well his coins haven't moved. Will the world be okay with the mystery?

So no one knows for sure of course but many suspect that early mining by likely Satoshi owned wallets (2009 era) yielded some 1.1m BTC, worth >$50B today.

So the likely reasons someone sitting in a notional value of $50B+ who hasn't cashed in any of it include:

1. He (or she) is dead (I believe the last confirmed post was 2012?);

2. He (or she) has lost access to these coins;

3. He (or she) has cashed in some wealth from wallets not linked to Satoshi; or

3. He (or she) is sitting on this mountain of wealth and not cashing any of it in.

There's the possibility of course that Satoshi isn't one person but several.

Let's consider (4). You would need to be an incredibly committed ideologue. We have ways now of essentially laundering crypto (ie by converting it to other crypto through a pooling mechanism that makes it difficult to identify the source wallet for what comes out).

It's stated that perhaps Satoshi fears government persecution (eg the tenuous connection to Wikileaks). To me that seems... unlikely. It's not like Satoshi controls the network. Lots of people hold crypto now.

Maybe Satoshi just really likes his, her or their privacy. But given that wealth... (1) or (2) become increasingly likely as time goes on.

It's fun to speculate.

You know what else consumes more power than Argentina? Canada and Saudi Arbia[1] (among others) both countries with less population than Argentina but with higher overall consumption. Is that "good"? Is it "right"?

How much energy do all atm machines (on idle) waste compared to miners? At least miners have incentive (dependent on local regulation/costs) to find cheaper sources of energy because it directly affects their bottom line.

[1] https://en.m.wikipedia.org/wiki/List_of_countries_by_electri...

Bitcoin is just a way to funnel money from financial markets into energy production.

Since we need huge investments into renewables production, every mechanism for such capital reallocation should be welcomed. Our future is electticity. Currently we are producing a fraction of what we'll need.

You need to think beyond the initial numbers.

It’s a clean energy subsidy. Be it hydroelectric, wind, nuclear, or cold fusion - create it and the returns are yours indefinitely.

Indeed, much of mining is already hydroelectric, and much is overage that can’t be stored. This is not just sugarcoating or PR. Miners are highly incentivized to find these situations and exploit them. The more that happens, the less “bad” miners can even compete.

WARNING: BITCOIN MINING IS GOING TO EAT THE WORLD’S ELECTRICITY SUPPLY. READ WHY BELOW.

I realized something very sad this year.

I used to think that Bitcoin was a poor currency, and if someone just made one that was actually scalable and better, then this whole first-gen system would fizzle out, like Friendster or AskJeeves in the presence of better technology.

But no. You see, Satoshi had us all fooled with the title of his paper: “A peer to peer cash system.” FORGET about Bitcoin being a currency. It is a store of value. And it has all the features you’d ever need to store value and not have it be diluted. There is nothing that needs to be improved over and above those features, and that is its killer app: being a black hole of value. Constantly growing versus fiat.

You see, just like gold, Bitcoin is a store of value becaus others say it is. It has reached critical mass and mindshare for “storing value” even from companies now. From here on out, even if a better system arises, if it becomes a sidechain of bitcoin that locks up the coins, then there will be less and less “unlocked” coins, and therefore each coin will be more valuable. Also, bitcoins are constantly lost as dust or misplaced private keys or other things. And so the supply shrinks.

But bitcoin is divisible into extremely tiny pieces (satoshis) so this merely helps one bitcoin get more and more valuable. You can’t kill bitcoin by making something better because even if 1/1000th of it remains, it will actually just be more valuable. The scarcer bitcoin gets, the pricier bitcoin gets, like the Hulk.

Ok so what does it mean for electricity consumption? Here is where the sad part comes in! You see, bitcoin miners are rewarded in bitcoin, and as long as the price of bitcoin outpaces the halvings, mining rewards will grow.

Read the story again, and extrapolate. The year is 2035, and households are fighting for electricity against bitcoin miners, who are easily winning. Governments trying to ban bitcoin mining meet similar fate to Mexican governments trying to ban the drug cartels’ activity, that is to say their families are threatened and they do not have power anymore to stop it, etc. Their feeble attempts to print money fall short of the ever growing rewards.

Everything in the article about bitcoin using “only” 6% is misunderstanding the expontnential function. In 2021 those stats are outdated and the Bitcoin network consumes more electricity than half the world’s countries. We are five minutes to midnight. By the time we realize it’s consuming more than half the world combined, it will be too late to stop this activity. It will be “too sweet” and too financial lucrative.

If you think we can stop it as a society, then let’s see how we have done with killing off insects, reducing biodiversity and species, polluting the world with plastic and pumping greenhouse gases into the air. Take that last one for example — have we been able to make a reduction in the greenhouse gas emissions, or merely their rate of growth?

What exactly will change between now and 2035, or 2135 that will make bitcoing mining NOT be more economical valuable than, say, airconditioning homes?

Change my mind. Prove me wrong.

The bitcoin mining equipment have no other purpose than mining bitcoin so eventually once the block subsidy halves these miners will be sitting idle until someone need to process a contentious transaction (paying high network fee).

Didn't read the rest, btw forks of a chain like bcash doesn't have much to do with immutability.

My take on this is the following. Everything we do as a society I think should be from time to time evaluated from a point of view of benefits for society/world and then depending on this evaluation, the incentives should be updated to support things that we consider useful, and to penalize things that we do not. A few years ago Bitcoin didn't really register there, and it was okay to disregard. Now with so much energy/efforts spent there, one should ask oneselves, is it good allocation of resources? Is it good that so much cheap electricity is used for mining bitcoin? Can we think of a way of either taxing, or changing incentives, so that society benefits from this. I don't know what's the best way of changing the incentives, but it must be done in my opinion.

What if rather than taxing bitcoin, we just tax carbon usage?

I think it is probably good to tax for Co2 production as a way of addressing global warming. I just don't think we should equate bitcoin production with other CO2 producers. I.e. I personally think that the CPU-cycles used for science on HPCs are much more valuable than the bitcoin mining (that's just my opinion though).

As you noted, this is just your opinion - are we going to have a person or group that decides what forms of Co2 usage are most "worthy", and adjust taxes accordingly? And let's say we do go down that path - one could certainly make the argument that Bitcoin usage from folks fleeing oppressive regimes are much more worthy than Co2 used to search for aliens or participating in far out HPC research.

Incentivizing stupid things (like taking on mortgage debt or over-coverage by employer health plan) is already the status quo of the tax code.

> Bitcoin usage from folks fleeing oppressive regimes

Have bitcoin people (I don't know what else to call the people who want to talk about it all the time) actually convinced themselves that this is a substantial share of bitcoin usage?

>Have bitcoin people (I don't know what else to call the people who want to talk about it all the time) actually convinced themselves that this is a substantial share of bitcoin usage?

It's not because this is literally Monero's value proposition. Why would anyone who wants to flee an oppressive regime publicly announce to their government that they bought Bitcoin in the oppressed country and sold it in a less oppressive country?

Information about Monero (don't dare to even think of buying it for speculation) https://www.monero.how/how-does-monero-work-details-in-plain...

How do I cash out monero?

>don't dare to even think of buying it for speculation

why not?

I think, yes, somebody should adjust taxes accordingly. The status quo with existing costs and taxes already effectively establishes some preferences for industries/goals, just implicitely. I think trying to explicitely express those preferences is better. (and it will never be 100% optimal that's for sure)

This is a terrible argument because the transaction fees on Bitcoin are high enough that anyone who wants to flee an oppressive regime would just buy any other cryptocurrency that isn't suffering from power consumption problems.

Fees are $3 if you are willing to wait 12 hours, otherwise $5 for 30 minutes.

I agree, taxing carbon usage is the correct way to go about this. All the ways I can think of taxing Bitcoin directly wouldn't modify the right behaviors. It seems like the options would be:

* Tax Bitcoin transactions - decreasing Bitcoin transactions wouldn't decrease energy usage

* Tax Bitcoin holdings - this is already accomplished via capital gains taxes, and again, it isn't the holding or usage of Bitcoin that causes the energy usage. It's the fact that Bitcoin has value that causes usage.

* Aggressively taxing GPU sales, with exemptions for some sectors and hard monitoring of commercial flows.

Well for 1, that won't affect Bitcoin mining since it hasn't been profitable to mine on a GPU for years, and 2 that will just force mining overseas to locales that don't have this tax (possibly to locales that have less carbon efficient energy sources).

GPUs are made in china/taiwan so good luck with that.

You tax carbon, country B now has an advantage over you. You loose!

Now all your products are produced in country B, you've changed nothing and country B is probably using coal so you're worse off from your initial goal.

You loose double!

That's why a lot of carbon tax proposals also impose those taxes on imports.

(Also, you mean to use 'lose' here, not 'loose'.)

> You tax carbon, country B now has an advantage over you. You loose!

Tariff based on carbon expenditure.

It's pretty simple, this has been thought out - and it is pretty clearly a welfare enhancing policy.

Add Country C into the mix: It doesn't produce carbon but doesn't have tariff's on Country B.

>It's pretty simple, this has been thought out

You and others alike have clearly not thought this out as the scenario i have layered out is already happening with other tariff-able commodities.

Why do people think "enforcement is impossible" is such a strong argument against taxes?

If your argument is that tariffs don't disincentivize behaviors because the government is just that bad at collecting taxes, you're not really in step with reality.

But you can't enforce your taxes in other governments.

In fact other governments in a game theory like ploy to get ahead of your country may agree to international agreements that they know they can game to their advantage.

The fundamental assumptions are wrong. You're not in this together. All countries are in direct competition, and some a more cut-throat than others. If potential disaster B is coming irregardless, country B can position themselves to come-out on top of country A when it does.

If it imports carbon from Country B then it uses carbon, so treat it as such.

Why would it be country-based? Besides the obvious thing that Country of Origin rules apply anyway.

An argument could be made if we don't apply the Carbon Tax to poor or third-world countries it will help them develop faster... but those third-world countries shouldn't be shipping us resources in the first place!

Trade blocs and economic sanctions?

You add tariffs to country B's products to make up the difference.

country B sells to country C that does the final packaging and then sells it to you.

This is happening right now if you haven't already noticed.

Country of origin rules still kick in that case. This is tour de force for rules around tariffs, know you nothing about how these work?

If it worked it wouldn't be happening, the fact that it is happening, and to well known country's proofs they don't work and is profitable for country B and C for it to continue to not work.

This not withstanding the obfuscation of country of origin that can happen If country B and C really wanted to work together.

You're describing someone evading the law, and your argument boils down to: "if laws worked, people wouldn't get away with breaking them."

We'll have to agree to disagree on that.

We're not talking about people, we're talking about governments, and other governments do not have to obey your governments tax law.

This is why you sign up for an international treaty that has teeth, ratify it, and back it up with penalties including carbon tariffs.

Name one international treaty that has ever had teeth where the benefits of non-conformance out weight the teeth.

Country B could tarrif country A in return and some countries cannot afford the cost of what that may do to them.

So you end up with an international treaty without international conformance or a treaty with no real teeth because the signee's have contributed to it what would allow "them" to game the treaty.

Banning CFCs globally via the Montreal Protocol.

To put it bluntly China still has CFC emissions.

And funnily enough, it's still lower than it would have been without the treaty. It's almost as if compliance doesn't have to be perfect to be effective, fancy that.

Nations agreed on laws for ocean and air travel. Countries that disobey them are ostracized or even subject to violence. Nations could in theory do the same for polluting the ocean and air. But that gets viewed as denying developing countries the benefits developed countries had.

While taxing carbon usage is a good idea, there is something fundamentally wrong with the idea of allocating so much resources, in servers, in power and in space, for what essentially doesn't improve people's lives.

That this craze receives so much attention and funding while we face very real existential challenges is maddening.

If the owners of the miners are actually able to turn their coins into wealth that increases their lifestyle, then the mining did improve someone's life. Just because it affects a very small number of people isn't much different than most other "traditional" financial products in exsistence.

> then the mining did improve someone's life

On net, was it welfare enhancing for our species though? If I make $1 off of emissions that cause external harm worth $2 distributed among the 7 billion people on this planet, I'm basically just laundering money through a loophole in what the law today considers to be harming someone else.

You just keep moving the goalposts by using the most extreme argument you can muster.

To be honest the sports industry uses tons of energy in lighting stadiums, streaming them, training players, it goes on and on. Entertainment could be done much more cheaply and effectively. I think society should outlaw sport - so many people are hurt in injuries, and the climate is just utterly demolished through all the energy waste. I can’t see a reason why society would allow sports. It’s ultimately beneficial to a very small amount of owners and their players (who are exploited!) that take all the cream off the top. Completely immoral honestly. The fact society wastes so much thought, effort, energy, focus, when we could instead be going to Mars or training STEM graduates is just criminal.

> You just keep moving the goalposts by using the most extreme argument you can muster.

The most extreme arguments I can muster? There are tons of industries that produce negative net value when accounting for externalities. $1 in profit for $2 in external harm is not at all that ridiculous.

> I think society should outlaw sport - so many people are hurt in injuries

My argument is that we should price carbon usage to account for externalities. I highly doubt sports turns out to be net unprofitable, even once accounting for those externalities.

Bitcoin is not advertised as entertainment, though. And if it was, gambling industries are heavily regulated. If you argue that bitcoin is essentially a new entrant in gambling, would you support similar regulation? Otherwise, there is not much besides whataboutism here.

Okay, lets say we agree that the sports industry causes externalities. The sports industry recognizes this and installs LEDs and other efficient electronics and cuts their energy consumption by 50%. If the sports industry and Bitcoin were equivalently bad the sports industry would immediately respond to the efficiency increase by doubling the number of stadiums and consume the same amount of energy in the end. Worse, they also had to construct new stadiums with concrete and therefore emitted CO2 during the construction process.

It is wealth redistribution, though, not wealth creation. These people essentially take money from newcomers to the btc ecosystem, but btcs themselves are not tied to any tangible asset or value.

More importantly, creating new bitcoins is not tied to the creation of new counterparts. Essentially, when someone mines bitcoins, they are not involved in a productive act.

> If the owners of the miners are actually able to turn their coins into wealth that increases their lifestyle, then the mining did improve someone's life

Bitcoin is between high finance and casinos. Both are highly regulated.

> While taxing carbon usage is a good idea, there is something fundamentally wrong with the idea of allocating so much resources, in servers, in power and in space, for what essentially doesn't improve people's lives.

There's something fundamentally wrong with the idea of deciding for people what might improve their lives and what isn't allowed to try, rather than letting them decide for themselves individually. People decide to allocate those resources, for something they consider worthwhile. Some of them think they'll get rich. Some of them think they're changing how the world does business or exchanges money. Perhaps some of them are right; perhaps none are right but a successor that learns from them will be; perhaps they'll solve a novel problem or perhaps they won't. The world needs room to experiment with interesting ideas.

> There's something fundamentally wrong with the idea of deciding for people what might improve their lives and what isn't allowed to try

I disagree, I don't think this at all an a priori wrong. It's helpful to consider the limit case.

If we lived in a world, for instance, where one person owned all of the food in the world and didn't want anyone else to eat it, it would be permissible for the other 7 billion people in the world to "decide for" that one that their food will be redistributed.

Permissible by whom? The one who owns the food? By the mob of 7 billion? By your own Morality?

What if you are the only one without, would the 7 billion agree the person is morally correct to steal from them?

> There's something fundamentally wrong with the idea of deciding for people what might improve their lives and what isn't allowed to try, rather than letting them decide for themselves individually

This is literally the whole point of having law.

> deciding for people what might improve their lives

I don't believe I did this. What I do, though, is measure the actual positive impact this tech has now.

> The world needs room to experiment with interesting ideas.

Bitcoin is way past the experimental phase.

> rather than letting them decide for themselves individually.

We're talking about something that has systemic impacts. Once individual actions reach such a scale that others get impacted, it's normal for society to get involved and set rules.

How do you objectively measure the actual positive impact of this tech exactly?

We don't really need to. The damage it does is so incredibly massive that positive impact would have to be gigantic to offset it, and it is blindingly obvious no such massive impact exists.

I simply hear to proponents' testimonials.

So far, the prevalent stories have been about servicing people living in countries suffering from hyperinflation, which is just as easily done with a foreign currency.

Another common point is the promotion of smart contracts. It seems to me that these tools are still anecdotal, and don't really provide a significant competitive advantage compared to standard contracts. Besides, cryptos not using pow and incorporating good tooling are much better suited for that.

The decentralized nature of the ledger is another common selling point, but proponents don't really tie it to a material benefit.

Other impacts, usually not really promoted are its support to illegal activities such as digital racketeering, money laundering, etc. For instance, the financial aspect of ransomware is usually supported by this technology.

If you feel I have missed some impacts, feel free to point them out.

You've probably missed the most important one - diversification. A lot of people (rightly or wrongly) are concerned about the U.S. Dollar after what has transpired (and is still transpiring) with this pandemic. The Fed has unleashed it's full force and we simply don't know (although many are making their best predictions) what the future holds.

There's a reason companies and major asset holders are putting 1-10% of their portfolios into Btc, and I assure you it's not only speculation.

I understand that people may be interested in finding a safe asset to diversify into, but if there is no underlying asset to anchor btc to, it's purely a social consensus.

If at some point the economy gets better and people want to invest back into actual stuff, what happens to the late leavers?

> What I do, though, is measure the actual positive impact this tech has now.

I don't think just measuring the carbon footprint is giving you an accurate measurement.

> there is something fundamentally wrong with the idea of allocating so much resources, in servers, in power and in space, for what essentially doesn't improve people's lives

The track record of “for the people’s good” juntas is poor. When they aren’t venally stripping the populace, they’re squashing any hint of innovative challenge to the incumbency.

I don't believe we have discussed before. Maybe interpreting my words as a call for the establishment of a junta isn't the best start in a constructive discussion. Do you start like that with anyone interested in ethics?

Who suggested juntas?

It improves people’s lives, just likely not yours. Just like I don’t benefit from caps on medical professionals, or police unions, or health insurance.

How? Beyond creating a few lottery winners, it has no utility for the average person.

Neither does a multi-million dollar yacht or companies / foreigners buying billions in properties for investment displacing communities.

In the real world, "utility" doesn't exist unless it benefits a select few.

Vanishingly few things have substantial utility for the average person. But clearly BTC has utility for those participating in transacting and mining it, or they wouldn’t be doing it.

It's not "clear" BTC has utility for anyone. For most people it seems like a speculative investment vehicle (i.e. a lottery ticket).

Even granting that, speculative investments have utility. That's why people participate in them.

What is their utility beyond being a lottery ticket? That was my original question. Lotto winners have mixed outcomes, so I'm not sure that its clear if those lives were improved. We may come find out they weren't.

State governments have had a monopoly on lotteries for my entire lifetime, so if we've granted that crypto is nothing beyond a lottery ticket, then there is no issue with society regulating it to whatever degree we can agree on.

Society can regulate whatever it wants. Usually it can attempt to make some sort of justification but the justification can be fairly flimsy (as the marijuana regulations have proven). So sure, society can regulate crypto, as the US Gov already has attempted to do.

For the utility of decentralized currencies, it's best you get information from more than an Internet comment. Which sources have you used already?

No, they don't.

Investments have utility, speculation does not.

Time was Bitcoin proponents would talk about the future of money (investment).

Now everyone just wants to get rich at the expense if the poor fool who comes later (speculation). We're now at the mania stage of this bubble, where crazy things happen and ordinary people invest because of the distorted prices.

The average person isn't doing any mining, specific people are. It has utility for the people doing it.

It's not just a few lottery winners. Every single person who bought and held BTC for a reasonable amount of time has made money. BTC is an extremely valuable investment vehicle that has no equivalent.

> we just tax carbon usage?

yes please, that would be the holistic approach. externalities like carbon need to be priced in. if it's in the price, then the market will adjust accordingly. a $4 [thing] will jump to $12, people will buy fewer until producers figure out ways to reduce externalities in order to bring the price down.

what's free will be overused. price it in to force efficiency and alternative seeking.

I agree with every part of that sentence except the "just". People have been trying desperately to do that for 40+ years without success, it's clearly not easy.

Can we have a solution that doesn't mean giving the government yet more money.

Yes. New business-models should not be accepted by default, especially if they are disruptive.

Reductio ad absurdum.

I think the argument they made was dumb, but I have never understood why "reductio ad absurdum" is popularly considered a 'fallacy'.

It seems like a perfectly logical argumentative technique, designed to point out when a general-statement is actually false in at least one case.

A contradiction (A ^ ~A) is the point at which reductio ad absurdum is achieved. It proves that a false assumption was made.

A counter example to a universal proposition is but one means of finding a contradiction since the universal allows you to assert the positive. A proof that no examples exist would contradict the statement that some do, just as effectively achieving reductio ad absurdum.

What you're saying is not incongruous with what I'm saying.

statement leads to contradiction -> "general-statement is actually false in at least one case", so if reductio ad absurdum is defined as achieving a contradiction, then the original statement is false in at least one case.

> I have never understood why "reductio ad absurdum" is popularly considered a 'fallacy'.

> It seems like a perfectly logical argumentative technique,

It's both. The strong form of the valid argumentative technique involves what amount to a series of valid syllogisms, where each step from the premise to the false conclusion involves a true premise and a logical (and therefore absolute) implication. The false conclusion drawn through valid implication and and a series of premises all but one of which is accepted as true thereby disproves the premise that was in doubt. There is a weaker but still valid (though not in the logical sense) form, where the steps aren't logically necessary but contingently true, with both the intermediate premises and the inferences with high enough likelihood that the conclusion is very likely true if the questioned premise is true.

The fallacy has a similar shape but involves intermediate premises that are false or at least unjustified, or intermediate steps that are unwarranted, or consists of steps that are a likely enough individually but which in aggregate are not sufficiently likely to justify the conclusion that the premise is false.

Most commonly, the fallacy form rests on what reduces to the reasoning:

1. If A, it is most likely that B 2. Most likely A. 3. Therefore, most likely B.

How many new business-models do we see, really, on a yearly basis?

Is BTC really more stupid way to burn resources than making sports cars? F1 racing? Gold mining?

There are tons of things the society could do without and be better off. Or maybe not, who decides? Surely it shouldn't be majority as then we will approach Idiocracy level of civilization in no time with Kayne designer flip-flops getting a yay and NASA or a new semi-conductor start-up getting a may.

I think there are two problems with crypto currencies:

1) Pollution and carbon emission is not taxed but should be.

2) Regulators allowing the situation where magic token is the only way to do certain kind of trades while competition faces insurmountable mountain of regulation and requirements. If it was possible to make fast money transfer system without hiring the army of lawyers in every country you want to operate then BTC would never gain any traction.

> Is BTC really more stupid way to burn resources than making sports cars? F1 racing? Gold mining?

Even looking at the usage of graphics cards specifically, is Bitcoin an objectively worse usage of those chips than playing video games? Than running ML models at Facebook?

>is Bitcoin an objectively worse usage of those chips than playing video games?

I have done a lot of activities in video games that would require significant CO2 emissions in real life. Potentially millions of tons. So yes, it's much better. There is also a significant population of software developers that picked up programming because of video games. Economic simulation games can help you develop an intuition on how to run a company and how they work without having to risk starting a real company with the potential to fail and ruin you financially.

Meanwhile the only worthy claim that Bitcoin has is that it's a middleman for central bank money. Yes it probably funded a lot of good economic activity, but it's the job of the central bank and government to do that. If they didn't fail then Bitcoin would have literally nothing to do.

> ... but it's the job of the central bank and government to do that

says who ? the central band and governments ? The whole point of crypto is to provide an alternative to arbitrary decisions from unelected officials.

Given that bitcoin would also work without a Proof of Work, yes, it's a more stupid way to burn resources than pretty much anything else. Bitcoin without the ridiculous amount of energy consumption is possible, though I'm personally doubtful that will happen.

As an example Cardano and Tezos are two blockchain based on Proof of Stake, they both require a very low amount of energy compared to bitcoin or ethereum (no mining rigs, a node can run on a raspberry pi 4).

Proof of work needs to go to the gutter. It was a bad idea to begin with. Proof of stake makes more sense and operates like a bank deposit interest rate

Can you elaborate more? It seems to be that a lot of very smart people think the opposite and are investing huge time and money in it

The big problem with proof of stake is that it requires a centralized root of trust.

Suppose for example that I takeover the Cardano website. I could create my own root block and generate millions of 'stakers'. Staking requires ownership but since it's my own new chain, I can generate coins easily without expending any real-world resources. As a new user, how could you differentiate the 'real' Cardano chain from mine?

Isn't this basically the case with github now? i.e all the cryptos have their code public on github so if I wanted to start mining, I'd have to go there to get the code

With Bitcoin, there are quite a few completely independent clients available: https://en.bitcoin.it/wiki/Clients, but the beauty of proof-of-work is that you do not need to trust any of them.

With proof-of-work chains, one can download the blockchain even without a client and write a simple program/script to calculate the total work (hashes) embedded in the chain. This provides a completely independent measure of trust.

With PoS, you must assume you can trust the client or root of the blockchain, which really kills the primary use-case of a decentralized currency.

>Is BTC really more stupid way to burn resources than making sports cars? F1 racing? Gold mining?

Considering the array of competing cryptocurrencies that consume far less energy while providing more transactions per second and additional features like smart contracts, yes it is. For example. Ethereum has twice as many transactions per second while consuming a third of the energy.

> Is BTC really more stupid way to burn resources than making sports cars? F1 racing? Gold mining?

Or the entertainment industry as a whole, it's pointless.

> If it was possible to make fast money transfer system without hiring the army of lawyers in every country you want to operate then BTC would never gain any traction.

I don't know where you get the idea that BTC is being used primarily to transfer money fast between countries without lawyers being involved, because as far as I can tell that's mainly a hypothetical use case rather than one that happens often in reality.

You tax industrial bitcoin miners that you can detect, country A now has an advantage over you. You loose!

You actually haven't changed anything it has just moved to another country that is probably using coal. You loose!

You're making the mistaken assumption that people care about whether Bitcoin is being mined. They only care about it not being mined in their backyard because the low electricity prices are just meant to be a subsidy to local residents. The electricity is being exported to a different location for a fat profit. If that other location is mining Bitcoin you're just giving the local residents more money. It's a pure net loss for Bitcoin miners.

By that logic we should legalize slavery.

The goal however is not to prevent bitcoin mining, that can be easily achieved, the goal was to reduce. carbon emission, and now they are being emitted by the ton in another country that uses cheap coal to power the them. You've achieved a net negative from the stated goal.

You say that as if having an industry based around a speculative asset that is more volatile than OTM stock options sucking up a third of your countries energy resources is actually an advantage in some way.

Capitalism seems to be the best of the possible solutions to the resource utilization problem.

Bitcoin seems to be just the latest in a long string of events suggesting that humans are irrational, not necessarily that capitalism or markets are bad.

If Bitcoin were processing a zillion transactions at a very very low fee per transaction, I believe few people would be saying it was a waste of resources.

I do not understand this argument. The fact that bitcoin mining is profitable inherently means that society has already deemed it useful, no? Users would not pay for it if it were not useful.

> Everything we do as a society I think should be from time to time evaluated

Who should do this evaluation? If not users freely allocating their own resources on the free market, then who?

> the incentives should be updated to support things that are consider useful, and to penalize things that we do not.

Please define useful. Humans have different needs and value things differently. What is useful to one may not be useful to the other. Any system that picks winners will also pick losers.

> I do not understand this argument. The fact that bitcoin mining is profitable inherently means that society has already deemed it useful, no? Users would not pay for it if it were not useful.

Just because there is a market for something doesn't mean that "society" as a whole has decided that it is useful. There's an underground market on taking out hits on someone else, that doesn't mean that "society" has decided that murder is good.

> Who should do this evaluation? If not users freely allocating their own resources on the free market, then who?

A public body that is democratically constrained.

> Please define useful.

Welfare enhancing for humanity. Sometimes, a welfare enhancing step will involve losers and winners, you're right. For instance, if one person held $200 billion and the rest of humanity held $1, redistributing that money would almost certainly be a welfare enhancing step given diminishing marginal utility of the $.

Thanks for the reply, it helped me understand where you are coming from.

For purposes of discussing bitcoin, it is a global good, and environmental concerns are a global concern. If there is a global market for bitcoin, then taxing bitcoin mining (or other such measures) in one country would just incentivize miners to move to another country. So any such action as you describe would need to be coordinated on a global level among several or all nations.

> There's an underground market on taking out hits on someone else, that doesn't mean that "society" has decided that murder is good.

Not sure if it is fair to compare bitcoin production to murder. I agree that we need some sort of action for climate change, but I am not sure regulating bitcoin is the answer. We'd have to apply the same subject "utility" measuring stick to _any_ activity that consumes electricity and regulate that. Like others have suggested, maybe taxing certain types of energy usage directly according to their climate change impact would be more effective and would apply evenly to all goods / services without deciding on behalf of individuals what is useful and what is not.

> So any such action as you describe would need to be coordinated on a global level among several or all nations.

I was not the original person you were discussing with, so I don't think a tax specifically on bitcoin mining would be the best idea, but yes global problems require global scale coordination often.

> Not sure if it is fair to compare bitcoin production to murder.

My point is merely that the fact that a market exists for something is not sufficient to show that "society" has decided it is useful IMO.

> Like others have suggested, maybe taxing certain types of energy usage directly according to their climate change impact

Yeah, I was the one who commented that, so I definitely agree

We put far too much faith in centralized authorities to arbitrate standards of morality. How sure are you that such an authority will actually reflect the best interest of the people, and not itself?

> There's an underground market on taking out hits on someone else, that doesn't mean that "society" has decided that murder is good.

That's a great cherry-picked example, but there are far more examples of people freely purchasing what they deem to be useful, and even more examples of useless things disappearing because no one wanted them. Most failed startups we cover here are probably an example of the latter, and there's plenty of discussions of how to achieve the former on hn, too.

> Welfare enhancing for humanity.

Who gets to determine this, except the members of humanity themselves? Does some 'public body that is democratically constrained' know what's best for each individual person it's responsible for? Does it adhere to some ideology that dictates the universal moral good, whether everyone else likes it or not? How does a group of politicians living in their own little bubble know what's best for Joe Plumber in e.g. North Dakota?

What moral framework do you suggest that we inflict upon all of humanity?

> That's a great cherry-picked example

I consider it reasoning from the limit case - obviously the existence of a market is not sufficient to prove that society has decided it is good, as the counter-example of the market in murder shows. Nothing more behind that statement and I think that markets are often a powerful tool.

> What moral framework do you suggest that we inflict upon all of humanity?

You can't escape "inflicting" a moral stance on the world. In the hypothetical world where the one has $200 billion and the remainder have $1, perhaps the government is not "arbitrating standards of morality", but if they make it illegal for the 7 billion to steal from the one person who has $200 billion, they are taking an ethical stance and "inflicting" it on the rest of the world.

We're a socially cooperative species - obviously we need a way to govern the form of those interactions, even in order to have a functioning market in things.

> You can't escape "inflicting" a moral stance on the world.

Only if you start from the assumption that such things as bitcoin mining ought to be regulated in the first place. You're right - we are a 'socially cooperative species', and we're good at it. Leave us alone to cooperate and don't invoke some government authority.

I'm arguing that involving a governmental authority to arbitrate morality is a can of worms that really doesn't need to be opened here.

> Nothing more behind that statement

Fair enough, I thought you meant to take that statement farther than you did.

> You're right - we are a 'socially cooperative species', and we're good at it. Leave us alone to cooperate and don't invoke some government authority.

So it's cool if I go to someone and take their bitcoins from them at gunpoint? Or start Mafia 2.0 and create my own protection racket here in SF?

Your crime, your time.

> You're right - we are a 'socially cooperative species', and we're good at it. Leave us alone to cooperate and don't invoke some government authority.

Isn't "some government authority" exactly how we as a species go about "socially cooperating" on a larger scale?

I don’t understand - it’s like we have to repeat the same mistake over and over again. What industries have historically successfully self-regulated for the benefit of the society at large? Regulations and government involvement is why we don’t live in a slave society with a handful of militaristic barons.

I’m truly shocked by the number of people who totally fail to grok the economic logic behind a lot of the projects being built on blockchain tech. Many dismiss such work as totally worthless.

I suspect such dismissive types lack the combination of deep technical ability and profound economic intuition that made the Collison brothers wealthy. Or maybe it’s just that they don’t care to think these things through. Like PG says in his exploration of the aphorism “a word to the wise is sufficient:” “Understanding all the implications — even the inconvenient implications — of what someone tells you is a subset of resourcefulness. It's conversational resourcefulness.”

http://www.paulgraham.com/word.html

>I’m truly shocked by the number of people who totally fail to grok the economic logic behind a lot of the projects being built on blockchain tech.

If you are so shocked then please explain why Bitcoin miners refused to increase the transactions per block to a level that is suitable for Bitcoin? It's literally a configuration flag they have to change and the environmentalists and people against power waste would be happy and you could tell them to shut up. The people using Bitcoin as money would also be happy. Everyone would be happy except some puritans that insist on a specific block size.

The reality is that no amount of economic intuition and deep technical ability can explain this and it's not making any neo "Collison brothers" types wealthy. It also isn't a problem of not thinking things through. It's not a matter of groking economic logic because there is literally no economic argument in favor of restricting transactions per block. It's worthless because everyone that wanted to use Bitcoin for its intended purpose has already left and only those who are in it for the bubbling behavior have stayed.

I will even admit that after understanding the long term trend of Bitcoin (not the xth bubble that is currently occuring) I would buy it, but again, only for speculation. It's worthless, as a currency, precisely because its deflationary, expensive and slow to transact, a tax nightmare because of capital gains and the fact that nobody accepts it.

So yes, it definitively is worthless. Just because some tech dudes bet on price increases doesn't mean it isn't worthless.

I'm more shocked by the number of people who fail to grok the economic logic and still engage in correct behavior. They make the mistake of equating the power consumption as necessary to process a certain amount of transactions and they are definitively wrong, however their judgment is still right. Bitcoin wastes too much power for the little value it provides. They don't have any right to be worthy of your criticism but yet they do, if you listened to them your crappy little currency would be better off and that's why your argument is on very thin ice.

I have an absolute disdain for dishonesty. Own and admit your mistakes instead of pretending that the other side is wrong.

> If you are so shocked then please explain why Bitcoin miners refused to increase the transactions per block to a level that is suitable for Bitcoin?

I'm no Bitcoin maximalist, but this problem cannot be solved by increasing storage requirements in a linear fashion to accommodate more transactions, as then you are trading one problem for another.

Case in point Bitcoin Cash which, (if actually used) with a block size of 32MB could grow at 1.6 TB/year, prohibiting most individuals from running a node.

There's also the problem analogous to road planning where adding lanes does not decrease congestion, because the level of congestion than exists represents what people are willing to tolerate before giving up on driving.

That being said wrt your question there's also an element of greed in that there's money to be made selling level 2 solutions, but it's not as clear cut as the big block crowd would have it.

If you don't believe me or don't get it, I don't have the time to try to convince you, sorry. I don't intend to use that quote in a bad-faith way; it's just the truth.

If you'd like to open-mindedly consider the alternate position, the writing of Balaji Srinivasan might not be a horrible place to start. It seems like you disagree with all the other points I make as well. Unfortunately the same time constraints apply; I can only encourage you to mull them over.

https://balajis.com/and-what-has-the-blockchain-ever-done-fo...

> I’m truly shocked by the number of people who totally fail to grok the economic logic behind a lot of the projects being built on blockchain tech.

Literally none of them have any logic behind them other than "let's add blockchain at the end, and ask investors for money".

> Many dismiss such work as totally worthless.

It is absolutely, 100% entirely worthless with no exceptions.

> I suspect such dismissive types lack the combination of deep technical ability and profound economic intuition that made the Collison brothers wealthy.

Stripe actually does provide a useful, and a used service with a well-defined and understood economic model.

> Understanding all the implications — even the inconvenient implications — of what someone tells you is a subset of resourcefulness. It's conversational resourcefulness

Yes, And the implications of bitcoin are simple: it's a useless wasteful technology that still hasn't found any useful application, or an application that cannot be achieved faster and more securely by other means.

> The fact that bitcoin mining is profitable inherently means that society has already deemed it useful, no?

Not when that mining doesn't account for externalities

The fact that tulips are selling for 10x their prior year price inherently means that society has decided tulips are more valuable than gold. People wouldn't be investing their life savings in tulip futures if they weren't a stable store of wealth, right?

my point exactly! The only reliable indicator of whether btc is good or bad overall is time. I was of the latter opinion, but what am i compared to the Great Musk? (judging by past experience, the answer is nothing).

> Everything we do as a society I think should be from time to time evaluated from a point of view of benefits for society/world and then depending on this evaluation, the incentives should be updated to support things that we consider useful, and to penalize things that we do no

This is vague to the point of meaninglessness. On one level, it describes democracy and lawmaking. On another level, it describes communist-style state control of economic factors.

You'll be chasing your tail forever.

The problem with bitcoin, or the issue to be more honest because it is not really a problem, is that right now there is no "better" use for that electricity than bitcoin. That is the truth you must grapple with. Or as Google would say, the best option for the collection of arguably the most brilliant minds that have ever walked this planet is to work for Google, trying to get people to click more on ads. That that is true, that is your problem and everything else is noise. If you really want an environmental problem to tackle go fight the oil industry killing thousands of animals every day, destroying communities every day, destroying them literally.

But, if you insist you must "fix" something about the current crypto boom because somehow they do not adhere to your morality then you should look at everything else but bitcoin and ask yourself, why is the thing I consider moral not attractive to the market?, what can we do differently to make doing something else at least as profitable as mining bitcoin? If you just tax it or try to ban it they'll just move and you'll be a)poorer and b)left without a say.

> Why is the thing I consider moral not attractive to the market

Because markets are notoriously unable to price in externalities on their own.

I realize there is a temptation here to throw up your hands and say "well, all human activity emits carbon", especially if you are long bitcoin, but it's a false equivalency. Bitcoin is an energy consumption monster by design, and its difficulty adjustment mechanism neutralizes any attempt at making mining more efficient.

Also its limited market cap and halving schedule will probably eventually phase out the energy consumption. Provided people are not willing to pay hundreds or thousands of (current day) dollars for transactions.

Edit: And if they are willing to pay that much that should be a clear sign of the value provided by the network

Edit2: And wether this will also phase out Bitcoins security model will be very interesting to observe across the next 10-20 years (depending on when btc will hit its market cap threshold in real terms)

If only we could tax carbon...

Because Bitcoin are fungible and cost the same to transfer across the world as across the room, mining would just move to the countries without a carbon tax.

I do think a carbon tax is a good idea, because in industries like transportation and energy it’s not as easy to just move production elsewhere, but it’s not really a solution here.

You could tax at the fiat off-ramps.

Awesome response! I love that @ HN for every shortsighted person there is a longsighted one providing a non-mainstream view. What ratio do we have on other platforms or even in real life? 1 to 100?

Sorry, but the above argument is really a poor one.

Just because there’s “no better” use for that electricity (which I disagree), does not justify using it up on bitcoin mining. This is like saying it’s morally permissible to do A because if you don’t, someone else will.

Not to mention conflating “the best use of X people’s time” with “who is giving out the best compensation in a society where we need money”.

The mainstream view -is- positive of Bitcoin. Very few people are actually concerned with the environmental impact.

> The mainstream view -is- positive of Bitcoin. Very few people are actually concerned with the environmental impact.

You should ask yourself why that is. I think it's because Bitcoin is providing value to people. It has an extremely low barrier to entry. You don't need good credit to use it. You don't need to go to a bank. You don't need an id.

I don't think most people are actively using it yet, but they see the democratic nature of the "interface" to the crypto system and recognize that the power is shifted in their favor a bit more than the established monetary system. They know this because they've been abused by that system their entire lives.

I find a lot of upper middle class people struggle to see the value in Bitcoin because they can't empathize with people who can't use traditional banking.

Appealing to popularity fallacy.

For anyone in the US you do need an ID to use Bitcoin in any practical manner. Exchanges require it. Avoiding this requires jumping through multiple hoops, especially if you want to convert to cash.

People don’t think about the environmental consequences because most people don’t think about that anyways. We’re also on HN, where software companies use or rent computational power with zero regard to the environmental impact. And for Bitcoin owners it’s specifically in their financial interest not to think about how Bitcoin miners are using more electricity than actual countries.

All of that said, Bitcoin is a failed experiment. People aren’t using it as an actual currency, they’re hoarding it. Partly because of the model and mostly because trying to actually spend Bitcoin sucks badly.

Bitcoin is going to be replaced by a cryptocurrency that’s actually usable and competitive with existing payment networks. And hopefully one that doesn’t use such an electricity intensive model.

You can't just call use-cases you don't like a "fallacy". Like I said, the tech is still early, but there are decentralized exchanges where you don't need an ID to use them.

> People don’t think about the environmental consequences because most people don’t think about that anyways.

They don't think about that because:

A. They're not the cause of the environmental damage (check with the military and large industry there).

B. They're concerned about paying rent, buying food...

Money is at top of mind for most people.

> All of that said, Bitcoin is a failed experiment.

If this is failure to you, I hope Bitcoin keeps failing! By any metric you look at it, Bitcoin is reaching all time highs with exponential growth.

We're willing to concede that the best minds of our generation should be in the business of manipulating others to click on ads, but god forbid if some try to liberate us from total control and tyranny placed on civilization.

This should be the top comment of this post.

I'm quite flattered that you think[1] that I am one of the best minds of our generation, but I would disagree with your assessment of what the most difficult projects at Google are.

[1] Mistakenly, in my self-assessment.

The most difficult projects at Google are tangential to Google's raison d'etre, it exists to get people to click on ads.

> "right now there is no "better" use for that electricity than bitcoin."

That's just not true. The higher the price of Bitcoin, the more incentive there is for miners to outbid other energy consumers.

Which is what I said, that is my point. That everything else is becoming so unattractive, that is the problem.

Adding lead to gasoline was an attractive innovation, and very profitable to oil companies.

It was also a known poison. Market forces alone don’t always solve these problems.

Which is exactly what the OP's point is, ie

  if the price of Bitcoin is high enough == there is no better use than to mine Bitcoin

Say profitable if you mean that, not "better".

...better use for electricity

Shuttering -- or not even building -- unnecessary power plants is a better use of electricity.

> is that right now there is no "better" use for that electricity than bitcoin [...] the best option for the collection of arguably the most brilliant minds that have ever walked this planet is to work for Google, trying to get people to click more on ads

That's more about the fact that it's not measured in terms of dollars and shareholder return.

Would it be beneficial to have this electricity being used for other things or have those engineers do other things than optimize an ad click factory? Probably, we could use this electricity to have cheaper power for lower income households, or those engineers could work on improving other things.

But the market doesn't necessarily pay for those things, and if the system is geared towards optimizing for more dollars, then the only one gets is more dollars with all the non-priced externalities dumped onto the society at large.

> If you just tax it or try to ban it they'll just move

Which is exactly what the locals would want, is it not? I mean, if I live in a place with cheap power, I don't want some outsider to come, take advantantage of that fact, and use so much power until the prices approach average power prices.

Hydroelectric plants usually require flooding huge areas of beautiful nature. People accept that because it's better than burning coal. But if people are just going to use it for something that doesn't help the local community at all, why bother destroying the local scenery?

There's more to the economy than just money; local governments often subsidize local companies if they think it's good for the locals even if it would be more profitable to move production overseas.

We don't need to find a way to make the "moral" thing more profitable. We can just make laws that prohibit the "amoral" thing. If we would let the market decide everything, why bother electing a government in the first place?

> if I live in a place with cheap power, I don't want some outsider to come, take advantantage of that fact, and use so much power until the prices approach average power prices.

There is no way someone use so much power until the prices approach average power prices, without making other changes. Maybe they offer lots of job positions? Maybe they pay lots of local Taxes?

Yes. Money is not everything, but good people can use those money to do "moral" things.

Groups of new people moving the local area is exactly what you hope your cheap electrical prices will bring. They create some jobs or support local store,increase real estate values, attract more supporting businesses.

The not in my backyard crowd are common in San Franisco but everywhere else welcoming new people raises all boats.

> welcoming new people raises all boats

No, it doesn't. Not when the new people are just interesting in exploiting local resources. They are not interested in becoming part of the local community.

Will the new people spend their money at my restaurant?

“ If you really want an environmental problem to tackle go fight the oil industry killing thousands of animals every day, destroying communities every day, destroying them literally.”

It’s not one or the other. I’m critical of Bitcoin just like I’m critical of other things affecting the environment.

“If you just tax it or try to ban it they’ll just move”

Good. Let them move. Not everything is about acquiring as much money as physically possible. Getting more money out of people is not a tenable argument for whether something is appropriate or not.

Markets are wildly inefficient and do not account for everything. The areas that had low electricity prices were doing just fine for themselves before Bitcoin miners moved in, and will do just fine afterwards. Saying we should allow things because “money” is just sickening. At least come up with a better argument.

Well then, that it sickens you is such a better argument isn't it not? You should've told us earlier!

Look, we can admit the reality of the world we live in or we can pretend, but only if we admit the real world to ourselves we can even begin to contemplate finding some kind of solution to our problems. Trying to ban everything you don't like is what is really sickening because newsflash, people can think for themselves and don't need you to decide what's moral for them.

Money is important in society, deal with it. Money is useful in society, deal with it. Money, for better or worse, arguably controls society. Deal with it.

Living in reality is different than justifying it. Saying that Bitcoin miners using up electricity means there was no better use is not derived from reality- that’s your own personal viewpoint.

I don’t need to make any argument as I’m not the one presenting anything here. All I’m saying is that “money is good, therefore actions that net money are good”, is a terrible argument and we can do better than that.

> Trying to ban everything you don't like is what is really sickening

You could make the same argument about any law.

This isn't something we "don't like" - cryptocurrencies are tremendously destructive of the world's resources and their only use so far is crime - money laundering, tax evasion and buying or selling contraband.

We should be making these things illegal in just the same way we make money laundering and other things that damage society illegal.

I see them aligning with the locals and saying perhaps you should move out if you protest too much.

>is that right now there is no "better" use for that electricity than bitcoin.

You can't abstract away the fuel for energy production. I'm sure bitcoin miners would be fine with mining every last bit of coal on the planet and using it to run their rigs if they can do it cheaply (which they probably can as coal prices drop and renewables ramp up)

Majority of bitcoin mining is run on fossil fuel power.[0]

A better 'use' is keeping it in the ground.

Here's a byproduct of bitcoin mining, basically throwing a lifeline to dying coal plant: "Bitcoin miner Marathon signs for coal-fired electricity in Montana"[1]

[0]https://decrypt.co/43848/why-bitcoin-miners-dont-use-more-re...

[1]https://www.datacenterdynamics.com/en/news/bitcoin-miner-mar...

This comment perfectly encapsulates the logic of neoliberalism and inadvertently provides insight into how it is sending us full speed on an ecological collision course.

> The best option for the collection of arguably the most brilliant minds that have ever walked this planet is to work for Google, trying to get people to click more on ads.

Ridiculous.

A counterargument from Warren Buffett:

> If I wanted to, I could hire 10,000 people to do nothing but paint my picture every day for the rest of my life. And the GDP would go up. But the utility of the product would be zilch, and I would be keeping those 10,000 people from doing AIDS research, or teaching, or nursing.

The market isn't a God - it selects silly, suboptimal things all the time, especially in the short run. It often selects things which are very bad for the many and good for the few, it has no regard for negative externalities, it's often subject to irrational speculative bubbles.

I'm not sure regulation is the answer, but bitcoin absolutely can and should be criticised as a poor use of energy.

> is that right now there is no "better" use for that electricity than bitcoin.

I've never heard of a clearer statement that our society is broken. We are literally destroying our own biosphere by generating energy, nearly all from fossil fuels, and yet we can't find anything "better" to do with that power.

It's madness.

> what can we do differently to make doing something else at least as profitable as mining bitcoin?

Not destroying our ecosystem will _never_ be profitable. We should do it because we want our grandchildren to live, not to make a buck.

A society that values immediate gain over its grandchildren's safety is, as I said, profoundly broken.

> My take on this is the following. Everything we do as a society I think should be from time to time evaluated from a point of view of benefits for society/world and then depending on this evaluation, the incentives should be updated to support things that we consider useful, and to penalize things that we do not.

Who is “we” and why to “we” get to decide instead of “they”? This approach to governing only sounds good when you’re not in the sights of those with the legislative pen.

In Iran, “we” (the government) have decided that “they” (gay people) should not be able to live openly gay.

I am not an anarchist or libertarian, so I believe in democratic governements. And I do believe it's their job to establish rules/regulations/laws that benefits society as a whole. Obviously and important point is the government must be democratically elected, to be able to control/revert things if the governement screws up.

So do you admit that to an anarchist or libertarian that Bitcoin does have value? The US military is the #1 user of energy on the planet. I definitely consider them a net negative to humanity, yet they're what's propping up the same neo-liberal democracy you think should be establishing the rules. Is that an acceptable use of energy to you?

I think Bitcoin is an excellent use of energy because it's at least a potential alternative to our current governmental systems. A small piece of the puzzle but a prerequisite to change none the less.

bitcoin is now significantly contributing to an existential threat. Its not alone of course...most things we do daily do so. However, I wish it wasn't such useless work.

Do we not realize the massive incentives Bitcoin is providing for energy production? If we could just agree to tax carbon emissions (the thing most of the world agrees is bad), then we should encourage this behavior as much as possible.

We’re creating a wonderful scenario where miners would be investing in as much cheap energy as possible. If their cost gets to close to average, then they can just leave it to the market.

It would still increase energy costs for everyone.

Not if it creates a race to the bottom on energy production. The miner that wins is the miner with the cheapest energy that can scale.

Miners are interesting in extracting the cheap energy from the market. There's literally no incentive for any of that benefit to fall to anyone else, and in fact using up low-carbon electricity for cryptocurrency PoW "mining" takes away the benefits of the low-carbon investment from everyone else.

Show me a list of what you do in a day and I’ll find questionable, selfish uses of cheap energy that don’t benefit society. That’s not a game you want to play.

People making noise about Bitcoin energy consumption seem to have little idea how much energy anything else uses kinda like how Americans only compare everything to Hitler because WW2 is all we’re really taught in school.

People suddenly act like they care about how others choose to spend their energy when it comes to Bitcoin but not anything else, like the incredible amount of land and energy it took to bring that pound of meat to your table that you only eat because it pleases your tastebuds. Or the tech gadgets you own.

Seems convenient to only turn on the ol careface when it’s something you don’t happen to indulge in, yet it makes you blind to the inconsistency of your position. There are a lot of necks on the chopping block long before you get to Bitcoin mining when you start bringing up the metrics that you think damn Bitcoin mining, probably your entire way of life.

Whataboutism at its finest. Current energy waste doesn’t justify future energy waste. Especially waste as avoidable as PoW mining.

Folks, please stop with the ‘whataboutism’ argument. We are debating the morality of energy usage so comparative arguments are perfectly fine. You don’t hear every day articles about the huge nr of gaming PCs or gaming consoles sucking energy, but you do hear about bitcoin. I have absolutely no problem with taxing dirty energy or disincentivizing high energy consumption but do it for everything. It’s hypocritical otherwise.

Gaming PCs actually improve peoples' lives in a non-zero-sum fashion. I have yet to hear an argument for how bitcoin does the same.

>I have absolutely no problem with taxing dirty energy or disincentivizing high energy consumption but do it for everything. It’s hypocritical otherwise.

Nobody sane is arguing for conditional carbon pricing (although obviously some will say that carbon pricing should be accompanied by e.g. an explicit transport subsidy for poor people), the "argument" is that while we absolutely should do it, nobody is able to get it passed into law - so while it's the best solution, we can't wait for it and we need to focus on other solutions in the mean time.

A gaming PC doesn't quadruple energy usage of an entire region

Fixing bad things in somewhat inconsistent order is absolutely a thing we want to, and need to, do.

Otherwise we'll be gridlocked by trying to be foolishly self consistent, and we won't be able to rein back developments that make things worse in new ways.

That’s my town! And it’s actually totally unnoticeable, 98% of people in town have no idea.

The real only effect it had on most citizens were the fires that got started at a few mines, from electrical overloads. Now it’s a big pain if you want a large load of power, which makes starting a high power demand business a lot harder around here.

We also have a ton of indoor pot farms, this is the best place in the country to grow indoors because power is so cheap.

Since article was written a Diamond foundry opened up, pretty cool use of tons of power, and just about as useless as Bitcoin.

Edit:spelling

Diamonds aren't quite as useless as bitcoin currently. Bitcoin - as far as I'm aware - is currently mostly used for speculation. Whereas diamonds are very useful in many industrial processes which require hard materials (think cutting/grinding tools).

One could argue that diamonds are considerably more useful than bitcoin, most of the world's diamond consumption is for industrial use rather than jewelry.

You’re right, that was aimed at the jeweler side of the market. I think the ones being made here are industrial.

> That’s my town! And it’s actually totally unnoticeable, 98% of people in town have no idea.

Do you mean that the journalist over-exaggerated the story in a very heated topic to get eyeballs. I'm, for one, very surprised. /s

Fantastic real-world viewpoint! I was beginning to wonder if all these useful / useless arguments are just exaggerated drama. In reality Bitcoin mines are extremely low-profile operations.

There is an old shipping container hidden behind our 7-11[0]. Only way to tell what it is, is by the excess venting and security. They popped up everywhere but no one knows what they are. Most are in really rundown, old, or temporary buildings.

Another one that they learned some very expensive lessons about heating and cooling is inside this big tower [1] that used to be where they made apple juice by the millions of gallons.

[0] https://goo.gl/maps/PEbm8qqVKDL5fnRf8 [1] https://goo.gl/maps/6HfgNELGKxwRJiJE6

On the one hand, we have the biggest crisis to ever face humanity, where all of our lives literally hang in the balance and daily we're seeing the effects from wildfires to cold blasts.

On the other hand we have bitcoin.

Well, one of those is more fun to endlessly ramble about on Reddit so of course Bitcoin will get the attention!

Let's face it, when it comes down to it humanity, on the whole, will always choose to burn the world for a quick buck.

On the one hand, we have the biggest crisis to ever face humanity, where all of our lives literally hang in the balance and daily we're seeing the effects from wildfires to cold blasts.

On the other hand I ate a delicious burger.

What's your point?

Haha no. You have the biggest crisis. You have a problem with wildfires. You have a problem with cold snaps.

I have Bitcoin.

Yeah, I'm not particularly helping with your problem but you never really helped with mine so it's all good.

what , you live on another planet?

No, but I have ways to survive all this. Even climate change will only lead to some billion deaths at worst. One in seven chance? Not a big deal for me. I'll take it.

I thought this was a joke, but you sounded like someone I know, so I went digging through your history. And sure enough... I particularly liked this bit: "In fact, people quite like me." Hah. It's a small World, Rene. Remember that. Not just because of the bullshit you attach to your name online, but also the bubble you think you can maintain around you in real life.

Haha, I love it, text me! We'll go for a ride and chat.

Generally this attitude, if actually held, would be described as psychopathic.

And if you think that your quality of life would be the same, even if you survive, then you are blind to the violence that must surely come when the world goes to hell.

When that many people die from starvation and dislocation, you better believe that the pitchforks will come out, and no one will give a damn if you are a BTC lord, you'll be left in a latrine by roving mobs who out-number you 100000 to 1.

We'll see. I care enough that I'm carbon negative. Most people also take the same trade as me. In truth, they do worse things: they actively kill our future by being carbon positive.

The difference is that when I kill our next generation I don't pretend I care. It is no surprise that makes the rest of you carbon positive people uncomfortable.

What you hide from yourself so that you can claim to be pure, I don't.

I know that if the billion could die you will kill them. Because you're doing it now. So the 1 in 7 happens anyway. So I do enough to ease my conscience and then make my peace with my role in the coming violence. 14% likelihood of death? I've beaten worse.

So many of you on here are eager to form a government committee to determine what is and isn't appropriate use of electricity. How are you going to feel when this witch hunt comes to shut down the activity that you deem useful? Maybe it'll be all the kilowatts you're drawing for an experimental ML project. Sorry, the committee just didn't see value in it! Are you really advocating to raise the barrier to experimentation and halt the pace of future technological developments? On a forum like HN nonetheless!

I can think of any number of energy uses that could be classified as wasteful, are you ready to part with them?

Turning your heat above 60 degrees in the winter

Driving more than 10 miles a day

Driving at all

Owning a videogame console

Spinning up too many cloud resources for an experimental startup

Having a house larger than you need

Having multiple cars per family

Flying internationally

Flying anywhere

Buying a new TV, phone, laptop, or other gadget

I can imagine a really horrific dystopia where an AI is given control of the Bureau of Moral Energy Use. It starts out nice enough finding low hanging fruit to reduce energy usage with minimal impact to peoples lives. And then it's a slippery slope, all the way to the final conclusion by the computer brain that the lowest energy users are DEAD HUMANS.

The only holistic solution is to tax carbon at the time of production. Really, all economic externalities (pollution, garbage, aquifer use, etc.) should priced in at the point of production. It's too easy to never price it in if you punt to deal with it further downstream.

I love reading HN, but every time Bitcoin comes up I feel like I'm hanging out with a bunch of virtue signaling luddites. You all need to stop being butt hurt that you missed the boat and look up at the revolution that's happening.

Also eating meat, buying new clothes every few weeks/months, browsing inefficient websites, using social media with huge data centers to process personal data and target ads... These could be outright banned with no harm to society.

There is such a trivial solution to this as well, set up a carbon tax or some other method that phases out all fossil fuels and charge what it costs to do this as the cost of electricity. Then at that point, who cares what you do with the power because the problem is solved.

Specific laws targeting individual causes are always a useless whack a mole exercise when you can simply decentivise problems and the causes will rearrange themselves to not be problems.

"you could buy electricity for around 2.5 cents per kilowatt." this is a typo. they meant 2.5 cents per kilowatt hour.

i think its really interesting that elon musk has changed his public stance on bitcoin. originally, and for a long time, he described bitcoin as an alternative to cash but not an alternative to centralized banking because the primary purpose of money is to act as a database or tool for resource allocation. i had never thought of it that way and it intrigued me. overall he was basically dismissive of crypto. but then recently he has endorsed bitcoin, offered to buy out dogecoin investors and other things. and he hasnt elaborated on why he turned around, and joe rogan was too stupid to ask him when he came on the podcast recently.

He commented a bit more here: https://twitter.com/elonmusk/status/1362600676174557186?s=19

wow thank you.

i think tesla stock is essentially a meme and lost it’s luster so he had to do something to get the sheen back. especially to distract from news that chinese regulators were clamping down

This should be labeled 2018

The North American crypto mining landscape and trade has evolved alot since this article, it is the most robust in the world as the hardware shifts from location to location to prevent becoming waste

In my opinion, Bitcoin's Proof of Work is the biggest downside of that cryptocurrency (mostly due to extreme power consumption of the network). Moreover, the conservative approach of its developers to new concepts means that it's quite unlikely that the situation is going to change in coming months or years. Regardless, I wonder whether there are alternatives that could significantly reduce power usage of the whole network without making it more susceptible to various attacks. I've heard of Proof of Stake (Ethereum is planning to switch to it) or alternative PoW algorithms (such as Monero's RandomX), but I'm not experienced enough to tell how would these solutions scale for a cryptocurrency as big as Bitcoin today is.

Precisely the opposite, Sir.

Employing PoW to protect against Sybil attack in anonymous network is the very invention that made Bitcoin possible.

Without PoW you must ID participants, which makes system trivial to regulate or shutdown (see Facebook Libra, or security fraud case against Ripple). And no, PoS isn't the answer, because PoS implies a handful of biggest exchanges control the coin, because they genuinly stake the most.

If Bitcoin was PoS, Mt Gox would run Bitcoin to this day!

Proof of Work and Proof of Stake are not too different in terms of what it would take in order to control the network. Stake and access to computing power are both just functions of being able to assemble sufficient resources so as to represent a sizable enough portion of control.

What's interesting is that all of the magic of crypto comes from:

- Signed transactions being broadcast onto a p2p network

- This network being visible to anyone who is interested

The much less important part of crypto is exactly how the shared ledger is assembled. So long as these transactions are put together in a relatively timely manner, and no transactions are being willfully excluded, whatever mechanism used for assembling the ledger doesn't really matter that much. Proof of work is literally just a time-gated lottery for some entity to be the one that gets to say "I am submitting the next update to the ledger." They're not providing any service to the network that a single shitty chromebook couldn't provide on its own, the time-gated proof of work is literally just to arrive at a consensus. There are so many alternatives that make more sense than this.

> The much less important part of crypto is exactly how the shared ledger is assembled

No! It is of *critical* importance how the shared ledger is assembled, because Bitcoin's threat model assumes the World's governments descending upon the shit, eventually!

The part of critical importance is ECDSA (or any public/private key DSA), and p2p networks. With that technology alone, you have the basis for a functional decentralized currency.

The blockchain assembly with proof of work, while an interesting and very creative solution, is just one of a multitude of ways you can arrive at a consensus.

Bitcoin demonstrates the importance of first-mover advantage.

It's one of the worst and most inefficient cryptocurrencies in existence but because it was the first, it's the most valuable. The world would be much better off with a Proof of Stake cryptocurrency as the dominant cryptocurrency.

The rhetoric is extremely resilient. The price of Bitcoin has nothing to do with the underlying technology, it's all about the social network and infrastructure which exists around it.

The rhetoric concerning Bitcoin only using clean energy is BS... If Bitcoin didn't use that surplus electricity, some other useful project would have had access to even cheaper electricity.

But the same can be said about most of the big tech companies in existence today. Their dominance is all about social networks, infrastructure and rhetoric.

Title should say (2018).

Good article, especially for my extended family who live in that part of WA and have been wondering what this is all about.

Does anyone know if this is still holding up? I would assume that minors are currently cashing in given the price has increased so much very recently, so new mines are only just now coming online. On the other hand we should be due for an explosion of mining difficulty.

I was talking about this with my wife just a few days ago actually. I think that one of the base risks to bitcoin is that as the power demand continues to skyrocket, nation states begin to ban bitcoin mining, or more harshly regulate it to control power demand. You could imagine mining shutting down in more and more countries, until there’s a “last man standing” somewhere with almost all the mining activity, and hence a highly centralized and highly vulnerable blockchain.

Its more likely that more nation states vie for control of bitcoin mining, causing more competition over the resource and continual decentralization, much like how Iran has put a lot of support into the industry so that they dont have to use the sanctioned state-sponsored payment rails like SWIFT

As bitcoin mining is mostly using clean energy or a sustainability solution for economic reasons, people should put their energy on making sure it stays that way, because nation states competing would be able to undermine the economics and make mining an actual environmental disaster instead of the imagined one people have assumed is happening

> As bitcoin mining is mostly using clean energy or a sustainability solution

This is misleading and Bitcoin is currently an actual environmental disaster. Electricity is fungible and Bitcoin miners using green power sources are preventing the shutdown of coal power plants that would have otherwise shut down.

> misleading

only because it's not a simple binary answer that people wish for. its a long answer with variables that have to be actively monitored. an annual dissertation really.

even your acknowledgement of bitcoin miners using green power sources runs counter to detractor's worldview, and forces people to need to understand it better than "huh thats a lot of energy must be bad"

so now we're at "wait they are green but now here is this indirect other problem when the goal post moves because I don't like how the energy is being used and I presuppose that energy is fungible"

okay, yeah sure we can move the goal post a lot further and still show that its a working economic sustainability solution which can be improved when people direct their mental energy in a more nuanced way. your position is not to improve it, its to deflect towards there being no energy use at all, and that will never get you anywhere as the people that would actually have the authority to represent your wishes would look at it and come to my conclusion

for example, not all the energy is fungible which is why it is being used by miners, and that's only in some of the variety cases, although a major case

You realize that the article is quite explicit that the power being used here would otherwise be exported? The prices of electricity in that town aren't cheap because there is some non fungible surplus of power. They are cheap because the local government sells the electricity at below market rates due to political reasons.

> The combined output of the basin’s five dams averages around 3,000 megawatts, or enough for the population of Los Angeles. Until fairly recently, perhaps 80 percent of this massive output was exported via contracts that were hugely advantageous for locals. Cryptocurrency mining has been changing all that, to a degree that is only now becoming clear.

The miners aren't consuming free or spare power: they are directly using fungible electricity that would have otherwise been exported and used to shut down coal power plants.

This isn't some minor indirect problem, the article literally points out that this is going on.

This is matches my point, although the energy that they had tapped into was being exported where possible, the local area doesnt even have substations to take advantage of it all. Correct me if I’m wrong, but other parts of the article are suggesting that 80% of what was harnessed was being exported. Which means if the town is using 200 megawatts then another 800 megawatts was being used, and another two gigawatts were not being used. Please confirm.

Also we don't know whether Seattle or Los Angeles is going to switch to coal, thats a problem you have to address in those places.

My point is that as this keeps growing they need to continually be addressed to make sure it doesnt start using unclean energy. But a reality is that this is a perfect example of miners using up to 2 gigawatts of energy, which can absolutely be more than several countries, but it all still being clean as it was not previously being utilized. The article talks about building new power stations and getting contracts for all the power immediately, which means this is still an ongoing process while the dam has been there for quite a while. All that energy all this time just not having enough demand to justify harnessing, till now.

> All that energy all this time just not having enough demand to justify harnessing, till now.

There was demand for that power. The dams were always running at full utilization. Most of that demand was simply outside the local area and the electricity was being exported. As stated by the article itself in the quote I just gave you (80% of the 3000 megawatts were exported). Those exports lead to reduced fossil fuel usage elsewhere because they allow other people to shut down fossil fuel plants. And the article directly states that now exports are going to have to be reduced now that miners are using that power. Which means in other parts of the country they are going to have to spin up new power plants (or extend the lifetime of fossil fuel plants).

The reason why you got confused over the 200 megawatts thing is because that's only one of three local utilities drawing power from the dams. Presumably all three of those added together consume ~600 megawatts, (20% of the total power available).

Thats helpful, I would say that area’s permitting system is the right approach.

Other areas need to keep investing in renewable.

There are many gigawatts of power that could be utilized.

I agree that mining power use cannot keep growing at the same rate.

How many towns were transformed when water was used to power new factories during the Industrial Revolution? Detroit and the automobile revolution? San Francisco in the Gold Rush? Houston in the Oil Boom?

Bitcoin is mostly mined using excess energy, or "cheap" energy, which improves the efficiency and costs of energy production, making it surprisingly "green".

Bitcoin requires less energy on a per-store-of-value basis than Gold and Silver.

Bitcoin requires less energy on a per-store-of-value basis than credit cards and the banking system in general.

Yet Bitcoin is frowned upon by environmentalists, as if Bitcoin was a company and they could use political power to shut it down.

Yeah people harp on and on about the amount of energy instead of the source of energy

turns out those entire countries in their favorite analogy also use a smaller amount of energy than many industries

the source is more important either way

I’m a beginner but is your energy comment in perpetuity or at current point? Specially in 2734 or whatever due to the verification of Bitcoin transactions each requiring energy, as long as the transaction cost of non-Bitcoin was lower than Bitcoin in the long run (maybe the “you’re long dead” long run run) wouldn’t coin use more energy? Sorry for n00b question

Bitcoin is not even close to a replacement of banking and debit/credit cards. If bitcoin fulfilled those roles, it would use a lot more energy than the current system because of how energy-intensive transactions are due to the required mining.

Bitcoin can't handle the amount of transactions the banking system can handle at the moment.

For it to scale to that level it requires an L2 solution (eg. Lightning), in which case energy consumption is not going to increase.

Why would L2 solutions use less energy than current banking, payment processing and transactions solutions? Or with other services related be at least in same ballpark?

L2 doesn't require mining, only channels maintained with relatively low processing capabilities

What’s the argument for using L2 networks on top of Bitcoin instead of simply using one of the other cryptocurrencies that was designed from the start to handle transaction volume?

Why do we need a separate currency for sending money around anyway?

The argument is that Bitcoin work very well as a store of value, and is proven (10+ years in operation with little-to-no incidents, despite a huge amount of attempts to attack the network). It doesn't need to be "perfect" in every front.

L2 solutions still transact the same tokens as their L1 counterparts.

Other solutions may potentially be "better" technically, but that doesn't mean they are proven in the long run, and the on-ramp, corporate, etc. infrastructure is not in place for them.

> (10+ years in operation with little-to-no incidents, despite a huge amount of attempts to attack the network).

Shame about all of those hundreds of millions of dollars worth of Bitcoin that have been stolen. Come to think of it, while I haven't crunched the statistics, it wouldn't surprise me if your money were more likely to be stolen if you kept it in Bitcoin than a boring bank account.

Is that because of the Bitcoin protocol or because people are dumb and lost their coins?

does it matter?

Why don't we use dollars

We do use dollars, the last time I checked...

If a bitcoin is functionally equivalent to a dollar you still need the entire stack of the financial industry, bitcoin doesn't in any way obviate finance

I keep hearing this repeated in threads about Bitcoin, and it's just flat out wrong. Bitcoin's energy usage does not scale based on the number of transactions. Its energy usage scales based upon the value of the block reward and the efficiency of mining operations.

It's not wrong. Bitcoin's energy usage does scale based on usage; it scales based on the value of money flowing through the system (in order to secure a certain transaction volume, you need electricity usage that corresponds to the value of those transactions). In order for Bitcoin to replace banks, it would have to consume an incredible amount of electricity.

That is simply not true. I don't think you understand how Bitcoin works.

If the electricity usage falls below a certain fraction of the value going through the network then double spending attacks become a significant risk. Bitcoin only works on the assumption that the electricity usage (and hardware usage) is too high to make double spending attacks feasible.

[citation needed]

But really, I'm interested in these arguments, please let me know where I can learn more. Especially regarding the idea that it uses less energy than the current banking system.

https://www.moneymetals.com/news/2018/01/25/gold-mining-ener...

https://www.energystar.gov/sites/default/files/tools/DataTre...

Do your calculations

That's a completely ridiculous answer and makes it clear you have no idea what you're talking about. 1) Gold has nothing to do with banking transactions, I've lived my whole life without ever touching a spec of gold. 2) Is about the energy consumption of bank branches. My bank doesn't even have branches. You're comparing apples to... tires or something.

So your bank has no offices, no people, no nothing to make it work?

Do you think that corporations don't require buildings, computing resources, transportation, etc. to exist?

As for the link about gold, read my original comment.

And you are willing and able to tot up those statistics for the people who make Bitcoin miners and other machines running nodes? And the buildings that house those, etc.? As long as you are not, it's still an improper comparison.

> Especially regarding the idea that it uses less energy than the current banking system.

I guess this one is pretty clear, OP was only comparing to gold/silver (I have no idea how it compares in practice).

To be comparable to banking, bitcoin should probably first reach the level where it can provide the same functionality (payment, fractional banking, etc.). (And then prorated as even if it were to provide the functionality, it would have to scale by several orders of magnitude to replace banking)

It's pretty unlikely that the majority of energy consumed is truly 'excess', it's just not how energy generation and distribution works.

There can certainly be periods of time where it is excess, it's just hard to believe it's typical for there to be zero dispatchable sources operating on the grids supplying the power.

Realistically, miners aren’t going to turn the equipment off as long as the ROI is positive, however narrowly. When it the ROI becomes too small to mine, they’ll sell the equipment to someone else who can run it cheaper.

The mining equipment is also diffusing into the hands of people who don’t pay their own energy bills. I’m part of an IT forum where network admins are constantly sharing stories about employees trying to hide mining equipment in the office to use the free power and cooling for pure profit. Similar situation in school dorms.

The idea of miners turning these things on only during rare times of excess grid capacity is a myth. They’re running 24/7 and they’re consuming energy that would otherwise be sent to the grid to offset fossil fuel consumption elsewhere.

Could you provide some links for these:

> Bitcoin is mostly mined using excess energy, or "cheap" energy, which improves the efficiency and costs of energy production, making it surprisingly "green".

> Bitcoin requires less energy on a per-store-of-value basis than Gold and Silver.

As for

> Bitcoin requires less energy on a per-store-of-value basis than credit cards and the banking system in general.

Bitcoin supports at many orders of magnitude less transactions on the ledger than the banking systems [1] and needs 10 minutes to add a new block to the ledger [2] and ETH about 10-15 seconds[2]. In contrast, according to this [3], in 2019 there were on average 100M visa transactions in the US alone, per day, so around 5 orders of magnitude more transactions in just the States, excluding MasterCard, paypal and every other system.

Now, there are better alternatives, ETH uses proof of stake, there are also papers on proof of space [4]. Personally I'd like to move to something decentralised and away from the banks as much as possible.

[1] https://charts.bitcoin.com/btc/chart/transactions-per-block#...

[2] https://www.investopedia.com/terms/b/block-time-cryptocurren...

[3] https://www.cardrates.com/advice/number-of-credit-card-trans...

[4] https://en.wikipedia.org/wiki/Proof_of_space

> ETH uses proof of stake

AFAIK they have pledged to move to proof of stake for quite some time now, without delivering so far.

The idea of cheap, “excess” energy that keeps Bitcoin mining operations running 24/7 is a myth.

Bitcoin is, and always will be, additive on top of the world’s energy consumption. Every Terawatt of energy that goes into Bitcoin is a Terawatt of energy that isn’t being put into the grid to send to homes or industries or other users. No one is choosing to build power plants in the middle of nowhere without a way to send that energy into the grid.

The grid is not perfectly efficient, but it’s still better to transfer that energy through the grid than to keep a coal plant running somewhere else because Bitcoin is (hypothetically) consuming the new renewable energy sources coming online.

The key is to remember that no one is waking up and wondering if they should run their Bitcoin miner or charge their Tesla. Both happen independently, and it’s not hard to see that miners run 24/7 regardless of energy demand fluctuations elsewhere.

This idea of unused, surplus energy that somehow can’t be connected to the grid is a myth perpetuated to whitewash the absolutely massive (country-scale) energy consumption of Bitcoin.

Not to mention, none of us can buy video cards right now because they’re all being consumed to mine other cryptocurrencies. Discussion forums are full of people swapping tips for mining with their GPUs to offset the cost.

There is no angle on this in which we can ignore the 120,000 Gigawatt energy consumption of Bitcoin and the additional energy consumption of all the other crypto currencies popping up in its wake.

Frankly, at this point it’s depressing to see this trope repeated so often on HN, where usually the users would have enough intellectual curiosity and engineering sense to read up on the basics of power transmission and marginal energy costs before repeating such an obviously flawed argument. I’m afraid everyone’s personal financial investment in cryptocurrency is clouding judgment on the topic when all of the facts are right in front of us.

>Every Terawatt of energy that goes into Bitcoin is a Terawatt of energy that isn’t being put into the grid to send to homes or industries or other users.

Not really. Electricity is tough to transport over distances and interconnects are expensive and have limited capacity. That's why new hampshire's retail cost for electricity is 17 cents/kWh[1] but quebec only pays 5.8 cent/kWh

[1] https://www.eia.gov/electricity/state/

[2] https://www.energyhub.org/electricity-prices/ (7.3¢/kWh converted to USD)

Transmission costs are not the only reason why people in different regions pay different prices for retail energy. Retail prices include far more than the pure generation and transmission costs. You can’t use those numbers to assume transmission is the primary driver of cost.

The actual cost of sending power across the grid is relatively low.

The Wikipedia page on power transmission is a good place to get an introduction: https://en.m.wikipedia.org/wiki/Electric_power_transmission

Specifically:

> The cost of high voltage electricity transmission (as opposed to the costs of electric power distribution) is comparatively low, compared to all other costs arising in a consumer's electricity bill. In the UK, transmission costs are about 0.2 p per kWh compared to a delivered domestic price of around 10 p per kWh.

> Transmission costs are not the only reason why people in different regions pay different prices for retail energy. Retail prices include far more than the pure generation and transmission costs. You can’t use those numbers to assume transmission is the primary driver of cost.

You're right, although an alternate source shows that the same difference exists for residential to large power (50,000 kW+) customers. Presumably for large power customers the cost of electricity becomes a bigger factor compared to other expenses.

https://www.hydroquebec.com/data/documents-donnees/pdf/compa...

>> The cost of high voltage electricity transmission (as opposed to the costs of electric power distribution) is comparatively low, compared to all other costs arising in a consumer's electricity bill. In the UK, transmission costs are about 0.2 p per kWh compared to a delivered domestic price of around 10 p per kWh.

There's selection bias going on here. Power is expensive to transmit over long distances, so power authorities opt to build local power plants, so that the expensive long transmission lines aren't built and therefore aren't being factored in.

China manages to transfer 10+GW of power over 3000km with losses of ~3%/1000km just fine. [0]

It is the infrastructure we are going to need anyways to geographically balance varying supply and demand with increasing amounts of (intermittent) renewable energy on the grid.

[0] https://en.wikipedia.org/wiki/High-voltage_direct_current

> China manages to transfer 10+GW of power over 3000km with losses of ~3%/1000km just fine. [0]

Against how much power usage? California has 10GW[1] of north/south transmission capacity against 80GW[2] of installed capacity.

[1] https://news.ycombinator.com/item?id=26187166

[2] https://en.wikipedia.org/wiki/Energy_in_California

The bottom line is that their transmission lines were built in conjunction with power plants.

They weren’t building power plants in the middle of nowhere without any plan to get that energy back into the grid, to where it needs to be. There wasn’t an excess of power plants sitting idle with no way to send their power into the grid until Bitcoin came along to consume it.

Mining is, however, negating any potential environmental offset of those plants by consuming the energy before it can be sent to other locations that are still dependent on fossil fuels.

Are there interesting technical challenges related to Bitcoin mining which induce competition and innovation? I ask because I see Bitcoin mining dismissed in the same way high frequency trading is (if you have enough starting capital/connections, you get to print money). However I know enough about HFT to realise that characterisation is very unfair (plenty of firms go bust, they capture a lot less value than the people they replaced, innovation is rife), is there anything similar going on with cryptocurrency mining, or are the surface level dismissals fair?

There's definitely plenty of engineering around making the chips, miner boxes, and data centers as efficient as possible. Much of that engineering may not be transferable to other fields like cloud computing though.

There are two aspects. One is the hardware. Coin production is held nearly constant by adjusting the difficulty. Hardware evolves such that hardware from a few years ago is drastically less effective than current hardware, and the difficulty is similarly higher. This means it takes new hardware to mine effectively. With jumps in prices comes jumps in prices of the hardware. And difficulty acquiring it.

Also, the economics change with the price of btc (obviously). When btc is $50k, you can mine very profitably with $.12 kw/h domestic electricity (ie your house). When btc was $10k, you'd break even or lose money.

So if you can get the hardware, and get access to cheap power, yes you can print money. Neither of those are easy. That's the challenge and why it's so easily dismissed as you observe.

The really provocative question is imo, how high will the price of btc go? A lot of people speculate $100-300k. That kind of price justifies a lot of capital expenditure.

I would be much happier if there were no innovation. Instead of just wasting electricity, we are wasting lives and minds. We have teams designing custom silicon to print Bitcoin. At least it's better than them working for Google, I suppose.

A "mine" is just a big warehouse full of jerry-rigged infrastructure. It will employ maybe two people and will pack up shop in an afternoon if the owners find cheaper electricity elsewhere. It doesn't provide any value to the local economy.

A lot has been said about fossil fuel producers not bearing the full costs of the externalities of the products they produce.

I think the same now has to be said of cryptocurrency mining. Is this activity, and the vast amount of energy and resources it consumes, really something which is a net positive for society?

Even if you disregard the massive ecological harm it does, bitcoin is still a big negative for society, due to the immense amount of crime it enables - ransomware, money laundering, scams and fraud.

I guess by your logic the US dollar USD is also a big negative for society then.

There is absolutely no comparison to be made there. The percentage of Bitcoin usage that is criminal is just massively, MASSIVELY bigger than the same for USD.

Side note - we've done a lot of work in Wenatchee on their conversion to electric transit buses, which also benefit from the low cost electricity from hydro. Great little town

Hi Calabroa,

I would like to ask a couple of questions related to the work done in Wenatchee. I couldn't get your contact info in your profile. Would you send me an email to eren@countingcarbons.co ?

thanks

That's from 2018. Apparently there was a crash around 2019.[1] A boom might be starting again.

[1] https://www.seattletimes.com/business/technology/sunday-buzz...

How about hooking up that excess energy to a federal grid and make that growth both permanent and sustainable? What will happen when BTC goes back into the dumpster for a couple years (if not forever)?

All those tons of Carbon that could have been turned off had that hydro replaced Coal should be laid at the feet of crypto and fundie “anti-state” nutjobs

It's on the grid (the article discusses the power being sold into California). Presumably the local miner operations are able to pay the producing utilities more than grid buyers are willing to pay.

Oh, umm. I admit to not having read so far into the article... :(

Where this article is about, Wenatchee, they were for the longest time paying below wholesale, that is changing rapidly.

It was even partially subsidized, the power company used to cover the costs of upgraded utilities to your site, with no contact in usage. then they realized these mines closed as fast as they opened, it cost the local power company millions. Nowadays if you want load, you gotta pay for everything and it takes years to justify, explain and build. Only new data center going in anytime soon will be a massive MSFT DC.

if it costs $1 go buy then it is worth spending $0.99 on mining it. the more expensive it becomes the more it consumes. its basically a paperclip maximiser.

I am pro digital currencies in general, but we can do much better than bitcoin.

That said we should avoid moral panic, it only brings division. Ultimately we are all on the same side.

>the more expensive it becomes the more it consumes. its basically a paperclip maximiser.

this is partly counter-balanced by the block subsidy halving every 4 years.

You mention nothing about externalities. Sure the $ books balance out but what other effects are being selected?

We are all on the same side but benefits and costs are not evenly allocated.

So I grew up in Wenatchee, right across the river from East Wenatchee. I remember when this started in about 2016. I can't speak for east wenatchee but the downtown got a lot nicer, and people generally gut wealthier in Wenatchee. It could also be the more serious etablishment of the wine industry in the columbia river valley. Maybe it was the expansion of tourism? Or perhaps it was just that the economy of the united states at large was improving.

Also all the energy in that town is hydro so if we're going to spend all this energy on bitcoin it may as well be non-emissions energy.

Perhaps Bitcoin is a decentralized consciousness: https://news.ycombinator.com/item?id=26217834

the way i see it is like this: bitcoin is an administrative tool to help facilitate the transfer of products more efficiently. Society invests a lot of energy in developing and maintaining such tools, for example currency and tax accountants. This is because the faster wealth can be exchanged, the faster new wealth can be created. This makes investing huge resources into inherently worthless services -like banks- worthwhile. They don't create any wealth but instead help people save time. This time is used to extract wealth from the earth and thus increase the overall quality of life. IF bitcoin helps to extract more raw products than was invested in the process of maintaining it, then it can't be criticised for waste more than the banks, for example. Edit: I am NOT merely finger pointing. A knee-jerk reaction would be to condemn btc as being entirely wasteful and therefore bad, but the reality is more nuanced.

The enormous efficiency gains from transferring Bitcoins should never be underestimated!

https://bitinfocharts.com/comparison/bitcoin-transactionfees...

At just $25.97 USD per transaction, the banks should just close up shop because they'll never be able to compete again.

Thats a lot of words to say "The wrong people are making money."

(2018). It would be interesting to see an updated version of this article.

Wow what a waste, at least use the waste energy to heat Texan homes.

If only energy was that easy to transport.

As it turns out, virtually all electric heating is equally efficient (in terms of electricity used per unit of heat outputted). The only difference is that with electric heating, the desired output is the heat itself. While as with computers, the desired output is some kind of audio/visual signal with heat being a generally undesired byproduct.

So during college, I repurposed my desktop PC to mine crypto instead of turning on the (electric) heat in the apartment. I ended up making ~$60 worth of crypto in about 1-2 months before I stopped mining crypto because the fan noise was unbearable.

the issue with btc is that it lacks any stabilising element. Mainstream services invests in other products as well. This means that even if their product fails, the entirety of their energy investment wont be lost. The flipside is that if btc turns out to be a success (i'm not saying it's even possible), it should be more efficient at being a currency.

why is hacker news so anti crypto

The newer proof of stake coins solve this in a much more sane way. Proof of work is going to kill the planet

(2018)

So now we are using the climate as an excuse to attack bitcoin? Weak propaganda.

It's not a new development, people have been pointing out the large amount of energy consumed for quite some time.

The article is from March 2018. It is indeed not a new development.

This attack will become more and more common

It uses a shocking amount of energy. Is it wrong to point this ou?

Aluminum production and datacenter operations also use a shocking amount of energy. Apparently Argentina uses a lot of electricity. People complain about bitcoin specifically because they don't recognize any value and they're frustrated that other people disagree. If they were genuinely worried about environmental impact, they'd look at the externalities of electricity production & distribution in a more general way (cap & trade? carbon tax?) rather than arguing that one particularly visible use of electricity is immoral.

We get something useful from aluminium production.

Subjectively. Clearly bitcoin users get something useful or they wouldn’t use it, no?

we clearly get something useful from bitcoin

Alcoa owns 24-26% of a very large hydroelectric dam in Wenatchee Washington. It’s more profitable to sell their power shares then to run their plant, so the largest(also one of the best paying) employer in town shuttered their plant to sell power instead.

There are also economic impacts not just ecological.

Some people might choose to focus on that issue, but the article is about a lot more than that

Bitcoin uses the same amount of energy as Argentina. I think is fair to raise the issue.

It is true that the climate is used frequently as a convenient weapon against things people don't like politically, but this is a real issue.

I'm a huge proponent of crypto currencies. I rail against the abuses from central banks like the Fed, and the evils of using a currency to engineer control over free people. I point this out so you know I think crypto currencies like Bitcoin are super important.

But if we destroy our climate/environment, crypto currencies aren't going to feel like a big deal. We have to care about it.

There are alternative models. One of the reasons I got into Eth was the work on proof-of-stake over proof-of-work they were undertaking.

As proponents of bitcoin I think we do ourselves (and bitcoin) a disservice by dismissing climate-based criticisms. Sure the messenger may not be sincere and with the best of intentions, but lets take the argument seriously regardless. If there are problems with the argument, let's address those rather than question the credibility of the messenger.

Bitcoin = snake oil - it cures what ails ya. Miners may be making money now, but let's face it, it's an intangible asset made of 1s and 0s and wholly dependent on the presence of electricity. What could possibly go wrong...

That definition works for major potion of USD in circulation as well. So what's your point?

See the founder of Coinbase fail to name a single specific way that bitcoin makes anyone better off: https://www.youtube.com/watch?t=1073&v=Iiny6KBekSc.

Spot the error in this sentence:

"By the end of 2018, according to some estimates, miners here could account for anywhere from 15 to 30 percent of all bitcoin mining in the world, and impressive shares of other cryptocurrencies, such as Ethereum and Ripple. "

Even if the electricity argument succeeds in harming bitcoin, luckily there are many Proof of Stake coins such as Polkadot and (soon) Ethereum that will use a fraction of the electricity. So no-coiners will have to use a different argument. They have definitely started pushing this one hard even though IMO it’s disingenuous given most BTC is mined through carbon-neutral sources like hydro and geothermal.

It is really interesting to see the crypto topic become so polarized. Either you think it is this amazing revolution that will be the future or you are a "No-Coiner" and you are against crypto.

During the DOT COM bubble things were not this divided. There were certainly plenty of people pointing out that giving a company 100M just because they own a domain name may not end well, but it wasn't this heated.

I assume this is because of social media. A lot more people have voices to point out flaws in the other side's arguments and then everyone gets echo chambered into one of two sides with the arguments that best support their side.

Social media might be an amplifier, but the vehemence with which proponents of crypto defend its legitimacy reminds me of the people who defend MLMs. If you say "hey, isn't this a pyramid scheme?" to folks who have managed to slip into a profitable tier of the... well.. pyramid, they immediately lash out with circular claims like "obviously this isn't a pyramid scheme, because those are illegal!"

So yeah, everyone defending crypto is trying to bootstrap the illusion of its value as anything while simultaneously trying to un-map it from comparisons to recognizable scams. They have more dollars than they should tied to both of these dreams.

This is what I'm talking about. You are assuming the worst intentions or at least singling out the worst actors.

Because of this polarization I'm having a really hard time gauging how many people are actually scammers vs the type of person who really thought in 1999 that shoes.com would have a monopoly on shoe sales in the future.

> You are assuming the worst intentions

I'm not assuming anyone's intentions.

> singling out the worst actors

I might be doing this unknowingly. I only have my own perceptions to draw on. Those perceptions, as you rightly observe, may be distorted by what bubbles up out of social media and HN commentaries.

It’s not carbon-neutral as long as it interferes with renewables displacing carbon. I’m totally fine and will jump in crypto with both feet the day it stops pissing so much energy in the wind

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