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Comment by Dumblydorr | Hacker News Reader

Most of the article's arguments work if you replace the word "Gold" for the word cryptocurrency. Gold itself is just a yellow metal, it is valuable largely for the human belief that it has value, though admittedly it is somewhat pretty, a good conductor of electrons, and has historical value due to its ease of work and use in numerous ancient artifacts.

Still, as a currency or value holder, gold is simply a metal that people think has value. Crypto too has value because people think it has value. It is "mined" like gold, though newer coins don't have this quality due to Proof of Stake, thus reducing carbon emissions drastically. And if people are willing to trade paper or metal for digital objects, is it anyone's place to ban that trade? What about digital money for digital crypto, can we ban that?

All currencies like pieces of paper, digital objects, metallic circles, seashells, beaver pelts: They all have value because humans value them.

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Gold has been valuable for centuries. There is no BitGold network that, if it went under, would cause your gold to simply evaporate. Once mined and processed, gold is incredibly stable, 2000 year old gold coins can be dug up and sold as antiques.

All currencies have value, not because "humans" value them, but because some organization of humans said "this piece of paper is legal tender". They lose their value when that political organization falters. What political organization is behind bitcoin etc.

Beaver pelts stopped being useful as a "currency" when there was no ready market for furs, it was never a currency, it was a fungible asset.

> There is no BitGold network that, if it went under, would cause your gold to simply evaporate.

However, if a government does go down, then its currency evaporates.

but gold doesn't

> However, if a government does go down, then its currency evaporates.

Sometimes, sometimes the successor regime accepts/redeems it; I think that has been far more common when governments actually failed in the modern era.

> Most of the article's arguments work if you replace the word "Gold" for the word cryptocurrency

I don't see it. Doesn't seem to apply to ponzi scheme, or facilitating cyber attacks, or the environmental impact. Perhaps you could give some explicit examples.

I don't like the way bitcoin mining wastes energy, but mining gold certainly has an environmental impact. Most of the machinery is currently powered by fossil fuels, and most of the gold isn't used for useful applications AFAIK.

I'm glad some cryptos are moving to proof of stake, and I wonder if bitcoin will be able to make that transition too, or if the miners have too much to lose to let that happen?

> mining gold certainly has an environmental impact

Can you quantify the environmental impact of gold mining? How does it compare to the CO2 output of a medium-sized country?

Looks like 0.8 tonnes / troy oz? https://www.spglobal.com/marketintelligence/en/news-insights...

Given 3000 tons of gold mined per year, that should be roughly 70 megatons of CO2 / year.

[I am pleased to report that this falls squarely in my previous estimate of 30-150 megatons / year that was based on the cost to mine gold, the cost of fuel, and the CO2 emitted by fuel.]

- Fossil CO2 Emissions (2016) 35,753 megatons globally

- so gold mining is 0.2% of global CO2 emissions!?

- Bitcoin mining energy use is at least 78TWh annually

- 480-500g of carbon dioxide produced for every kWh consumed

- So mining bitcoin produces 40 megatons of CO2 per year, which is the same order of magnitude of gold mining.

- And mining bitcoin is 0.1% of global CO2 emissions

(I would be grateful if someone would check my calculation)

References:

https://www.theguardian.com/technology/2021/mar/10/bitcoin-r...

https://www.worldometers.info/co2-emissions/

Bringing this around to carbon taxes, a $20 / ton carbon tax would raise the cost of producing gold by about $16 / troy ounce, and the cost of electricity by around 1 cents / kWh. Googling says it's currently about 700 kWh / BTC transaction, which would create a "carbon surcharge" of about $7 / transaction.

> so gold mining is 0.2% of global CO2 emissions!?

Looks like iron & steel is 7.2%. Non-ferrous metals are listed at 0.7%, so gold is ~1/3 of the CO2 of non-ferrous metal production.

Paper ("and pulp") is 0.6%.

https://ourworldindata.org/emissions-by-sector

Wow so all that junk mail I get in the mail every day is dwarfing the co2 emissions of Bitcoin?

I wouldn't say dwarfed but the answer looks to be ... maybe?

5.8 million tons of junk mail each year in the US. Mass of CO2 to mass of paper looks to be 10.5x for new paper and 3x for recycled, so depending on whether junk mail is primarily recycled or new, that is somewhere between 17 and 60 megatons of CO2 / year.

This here is the problem. Gold does use a lot of CO2 yes (heavy equipment construction and operation), but that's not even the worst thing. Mining literally is poisoning water, and destroying very large ecosystems. And carbon tax won't stop that. And 90% of gold is speculative (if you include jewelry).

Gold mining is also environmentally intensive, as is transporting gold for trade.

Proof of stake is also a "mining" operation insofar as it produces a limited supply at a macro-predictable rate.

I think gold makes more sense if you think of wealth as useful largely as a status indicator in the conspicuous consumption sens or peacocking. A gold necklace displays wealth and presumably status in the same way designer clothes or a luxury car does.

Beaver pelts or cars wear down over time though unlike gold, and the amount of crypto one holds is hard to display ostentatiously, at least for now. BAT, Steemit or crypto.com's card colors based on staking amounts seem to be ideas heading in that direction though.

There is a lot more "paper" gold than physical gold in jewelry or gold bars. The overwhelming of gold and gold derivatives are not using it to signal their status.

True, though the paper gold is valuable because someone could potentially take delivery, though that valuation on it's own is likely much less than it's current price if 1934-1970 is anything to go by.

The US actually did ban possessing large amounts of gold during the Great Depression, so there’s legal and historical precedent.

But the US dollar was tied to a fixed amount of gold back then. When overseas influential creditors demanded that the US give them gold for their dollars like the US said it would, the US complied by buying it from US citizens at a fixed price 20-50% below prevailing gold market value. Once all the gold was given away, the US was able to abandon the gold standard. Once the gold standard was abandoned, the US was able to escape from the Great Depression of the early 1930s. Countries that left the gold standard sooner recovered faster from the Great Depression than countries that were slower to abandon the gold standard.

The US dollar is not backed by any amount of bitcoin so I don’t expect to see this happen with bitcoin.

Gold definitely has value:

- it's rare but not too rare

- malleable

- doesn't rust or tarnish

- non toxic

- doesn't need the tech that platinum, the only other possible choice that satisfies the rest of the list, would need for it to become money instead

Useful and scarce == valuable.

https://www.visualcapitalist.com/why-gold-is-money-a-periodi...

Also one of the best conductors found in the natural world.

The metals for best electrical conductivity are silver (1st), copper, gold, aluminum (4th).

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