Countries That Consumer More or Less Electricity Than Bitcoin in 2021
smallbusinessprices.co.uk
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To be clear, I want people to stop using Bitcoin. There are better cryptocurrencies which don't rely on energy burning to secure their networks, which have negligible fees, and which have near-instant confirmation times.
I think it's pretty naive to think that the $1T market cap is accidental, or driven by dumb money.
They said the same thing about anti-war movements, of which Bitcoin is a critical component if you understand what is written in the genesis block.
Why not say the same thing about needless wars in Syria, Iraqm Afghanistan, Yemen etc... Or the horrible state of unemployment benefit scams (in the billions) and the distribution of it which ends up putting people into homelessness due to sheer imncomptence?
You HN's are so toxic about not having made it big with opensource tech disrupting finance that it's just sad now.
It's one thing to say you don't understand it, or that it's not for you because you live in the West but to say it has no intrinsic value and yet every major bank is sending us to new ATHs trying to get shows a clear disconnect from reality.
This is not just sour grapes anymore, this is Trump-supporter levels of delusion.
Get it through your heads: fiat is the problem to most of the World's problems, be it in warfare or environmental to the very notion of the State itself and Bitcoin just solved ~1/2 of the problem.
A part of me knows this has to do more with the fact that most of your careers and perhaps existence itself are not as important as you thought they were if Bitcoin wins, and fiat get devalued into obscurity as you have no other desirable attribute going for you, but you should just hedge your bets and join us.
We have way more things to solve and not enough Human Capital, if it's money you're after than it's going to be lean for you until you can add value to the network, but it can be done. I did it and so many others have to.
And I personally didn't even know how to code when I first heard about it 2010 when it was all just programmers.
Okay, I'll bite. Why is 'fiat' the root of all the world's problems rather than corrupt institutions and human nature? I don't even know what that means blame fiat. Something about moving off the gold standard? Didn't we have wars and corruption before that too?
They enable it, and more importantly it has shown to be able to subvert a population in order to direct it's Human Capital to the most egregious of undertakings: War, genocide, mass murder, bureaucracy etc... These are only enabled because people are being compensated in something they need to acquire goods and services in a region, and since modern existence (Sumeria?) Nation-States have a monopolisitic control over this power, with no tolerance for it's 'corruption' from the outside as challenges it's core power.
My contention is: you remove the incentive for fiat and Society and Humanity (as flawed as we are) will re-organize itself for a more optimal outcome.
Unemployment concerns will be irrelevant if we as a species decide to tackle Climate Change, Regenerative Agriculture and Mars colonization (I've been involved in all 3 btw) in earnest, so why not build an economy around a tech that can function as a Multi-planetary Currency for it's Multi-Planetary economy?
> I don't even know what that means blame fiat. Something about moving off the gold standard?
This is rather meandering, but I think you're asking what does Fiat mean, right? If so, yes, it's a currency which at it's core has no intrinsic value other than that what Nation-State's have forced it's populace to accept it as, which has since been detached from it's former Precious Metal Backing. It comes from the latin word 'fiat' to mean: An arbitrary order or decree.
A little context: the average life for a currency (fiat or otherwise) is 40 years.
> Didn't we have wars and corruption before that too?
Sure, but conflict resolution and trade is more favourable outcome for man if the incentives are aligned correctly, and it should be the default for how Humanity should see itself moving forward. We have no chance of solving any of the World's problems if we continue on this path, be it environmental, warfare, political, social, Mars colonization... whatever.
Fiat had it's time, it created a level of industrialization and specilization which would have been impossible under a barter system or sparsely traded local currency model, and it was written in blood from our ancestors... but we are now at a transitionary phase which Bitcoin has proven with the test of time that we demand and now have a better alternative than what we are forced to comply to with USD/EURO/YUAN/YEN etc...
We are a single species and an ever-growing interconnected one at that, we should conduct ourselves as such rather than serve the interests of a small political elite who seem to be the only ones apt for potentially nuclear war (eg US vs China) when the rest of us just want to live our lives in peace and prosper in what could be an era of unfathomable wealth creation.
Instead we live in fear of what these people do as it could send us all back into the stone age if these sick sociopaths get their wars. Or we have to live in constant peril for the new economic downturn due to massive wealth disparity as a result of business-cycle economics that favour a select few and keep them in power.
Edit: I really don't care about your fake points, but to downvote in hopes of shutting down conversation is pathetic.
I took the time to respond and elucidate my points, you should at least challenge the argument instead of trying to make my words opaque because you don't like me or what I have said. The low level of intellectual discourse regarding Bitcoin here is appalling, and when someone tries to speak about it they get vilified or shutdown entirely, it's sad and I really can't explain how much it's dimmed my view of HN and most tech people in general.
But such is the price of successful disruption.
> War, genocide, mass murder, bureaucracy etc... These are only enabled because people are being compensated on something they need to acquire goods and services in a region,
So in a world where all fiat currency is replaced by bitcoin, aren't people still going to be compensated and then acquire goods and services? So how does bitcoin avoid that problem? If arms manufacturers are paid in bitcoin, they are still going to lobby the US government to get involved in wars to increase demand.
If your main critique is capitalism, then I at least understand the specific philosophy you're criticizing. But if that's the case, then I don't see why bitcoin is a necessary part of that solution.
I'm really not understanding how "fiat" is the root evil here. Currency has value because people have trust in it preserving that value and being recognized by others for that value, no?
Only because you don't understand the nature of money, and I want to preface I cannot solve that for you but I will try to clarify.
> So in a world where all fiat currency is replaced by bitcoin, aren't people still going to be compensated and then acquire goods and services?
I personally don't think it will just be Bitcoin, thier will be other alts. I just want make sure we make that clear.
> So how does bitcoin avoid that problem? If arms manufacturers are paid in bitcoin, they are still going to lobby the US government to get involved in wars to increase demand.
First, you're missing a critical understanding in what makes money 'valuable' and thus a currency, this has been understood since Aristotle laid it out: what you're missing is bitcoin is scarce, and thus cannot be created to fund these types of expenditures, and if they can it won't go on for very long. It's not that we just transition to a new medium of exchange, but a new value system itself which will demand that a scarce thing like Bitcoin be used rather a non-scarce thing like USD be used to bomb Syrians non-stop for matters that the CIA deems vital to it's geo-political strategy but that the soldier in Arkansas who fights these wars can acquire doing more valuable thing in Society--for example regenerative agriculture of hemp to create opioid replacement therapies.
You cannot run a deficit budget like the US or any empire before it has to fund it's militaristic pursuits with a scarce token based system--it's impossible due to the scarcity of the token to amass armaments on that level upon something we have all accepted has value and can be used for more productive ends like the 3 things I mentioned before that will serve Mankind rather than the lobbyists who promote warfare. This is economics 101, but the short thing is Warfare is an economic driver of the State, and it's affiliate Arms contractors, if you now level the playing field for what you're willing to die for why not just do the thing that promotes greater wealth creation for all than kill for Rayhtheon who does business with an entity that has created an unpayable $24+ trillion debt?
You have to understand the paradigm shift that is happening within this model, too: not just in monetary terms but in the Social Value structures that it depends on. Most people have lost confidence in their governments with COIVD, for good reason, wealth inequality has never been worse, which is why I think people are now willing to accept something like Bitcoin at all as the see how terrible all Government have conducted themselves thus far--only the smallest island nations being the exception.
> If your main critique is capitalism, then I at least understand the specific philosophy you're criticizing. But if that's the case, then I don't see why bitcoin is a necessary part of that solution.
I'm an Anarcho-Capitalist. I'm arguing we haven't had Capitalism due to a lack of open currency creation and independent systems outside the influence of the State, and the very nature of the Nation-State which creates and back fiat systems.
Bitcoin and what it represents is the first true form of actual free market capitalism we have seen, and it revealed the litany of problems withing it too mind you; but this cronyist-capitalist system most call 'capitalism' is the problem and is just as bad as the socialist/communist doctrines as it assumes it knows better than the Market (producers and consumers) and is often just as willing to take it's perverse models to near extinction of it's users--look at the aforementioned 3 aspects and why they are so critical in modern life on Earth.
> Currency has value because people have trust in it preserving that value and being recognized by others for that value, no?
That is one of a currency's supposed properties, yes; but as I explained, Nation-State based currencies (PM backed or fiat) don't have a very good track record at doing that, hence my arguments thus far.
> I'm really not understanding how "fiat" is the root evil here.
Then you are beyond my help, just as I cannot teach you the value of PgP encryption in the 90s that led to the first crypto wars and was something Zimmerman was willing to go to jail for and created work arounds to bypass the ITAR weapons and arms 'violations.'
I simply cannot give you an education in History, Politics, and Economics in this format, much less why that should matter to YOU as an individual. I don't know you, nor do I understand your ideological underpinnings that make you reluctant to see what I have explained thus far.
But just know that what I have said can all be independently verified if you apply the effort. Should you want to continue this with more research on your end and at some later time want to carry this conversation on in a more nuanced manner than just 'I don't get it,' I'm open to that possibility.
Edit: And HN has now blocked me from posting again from the down vote brigade, this is so tiring...
Wars have been fought since the first time a human picked up a stick with a pointy end. They don't require fiat currency. They are often fought over hard resources like arable land, fuel, deposits of valuable minerals. They are also often fought just because people A hate people B. Bitcoin doesn't change the slightest thing about any of that.
I'm not sure a comparison to banking is appropriate though; much of what banks do (loans, etc.) is not obsoleted by cryptocurrencies.
Sure you can look at it that way, or see how Linux dominated the Mobile and Sever space which then bypassed the need for desktops entirely, so too has Bitcoin done to finance and you can now easily plug into the Global economy with nothing more than a 10 year old smart phone.
Honestly, you guys make my arguments for me so well that I think you have to be trolling (as closet Bitcoin holders) being bored at your otherwise mundane jobs.
Buy the way, been there done that, it loses it's novelty fast. And you're better off learning a new skill.
If "another layer" means lightning network, I doubt it.
You could do the same with dollars.
People are mining Chia with petabytes of storage off a single raspberry pi so the energy usage is really minimal and there's tons of over-provisionsed hard drive space out there.
The Chia team also seems to think that if Chia actually does scale to the point of significantly altering production resources, it would be likely to just drive down the price of storage for everyone since there's no specialized hardware that makes mining Chia economically worthwhile. Plus unlike the bitcoin mining hardware, you (or corporations buying lots of drives) can use the storage space for things besides Chia. I have no idea myself if that's how the economics would work out, but it seems likely we'll find out — the network is currently at 200PB and growing: https://www.chiaexplorer.com/charts/netspace
Love your work by the way! Hope you're well.
Miners are always necessary to process transactions.
An interesting question is whether the network can stay secure if the difficulty drops to ~1/7th of what it is today, or whether something else will have to give. (For what it's worth, even at 1/7th of the energy use the network is still incredibly wasteful by design.)
For a first attempt Bitcoin killed it. But scaling isn't its virtue.
Also, it's not fair that countries who primarily use wood for fuel (Africa) get to look like they're environmentally great, even though combustion of wood causes a huge amount of pollution and global warming. Average fuelwood consumption in Africa often exceeds 1000 kg/capita annually. That's got to add up to the Chinese mining a bunch of coins, right?
Electricity is not free. Drastically increasing demand for electricity drives up the prices for everyone, in the short term, as electricity rates go up. Even once more supply is created--not an easy thing--society as a whole still bears the risk that the Bitcoin-driven demand will go away (due, e.g., to a crash in value) leaving us with an oversupply of electricity.
Either way, "Bitcoin uses more electricity than x" can be a helpful comparison to more effectively convey just what we are signing up for in adopting Bitcoin widely.
To make this more obvious suppose all money was bitcoin. By your logic it would be worth it to make our sole economic activity 'securing' it. We'd literally all starve and die.
Wrong. The number (or more specifically "weight") of the transactions that can be processed in a given time period is constant, and does not scale with the hash rate.
> it would take more than the entire energy production of the world to make bitcoin the sole currency
I do not follow..
Sound good so far?
Next, the block reward is denominated in BTC. Currently 6.25 BTC every 10 minutes, but it'll halve again in 2024. The block reward, plus transaction fees, is what the network pays miners. It makes sense for miners in aggregate to expend about that much money on mining, because if the network is spending less than that, there is still profit available for additional miners joining in.
If that 6.25 BTC becomes valued at 10x or 100x as much as it is today, the expenditure on mining will also be 10x or 100x larger. Obviously this can't actually exceed the energy production of the world because that's impossible, but this new artificial demand for energy can soak up lots of capacity that would otherwise go to more productive, yet less profitable, endeavors. The fact that it's using 1/200th of the world's energy production already, while it's just a toy speculation vehicle, doesn't bode well.
As you correctly point out though, this additional expenditure on mining will do absolutely nothing to help the number of transactions that can be processed in any given time period.
Nobody here is impressed by you, the condescension sounds ridiculous.
> the expenditure on mining will also be 10x or 100x larger
This is correct, but the assumption that energy will continue to represent a very large part of that expenditure is faulty. There is a huge incentive for miners to mine more efficiently, especially in this hypothetical universe where Bitcoin is driving up energy prices.. That expenditure could easily be disproportionately spent on more efficient hardware / algorithms.
Alternatively Bitcoin might not be using proof of work in this hypothetical future. It's not immutable.
I can't imagine an algorithmic or hardware improvement that would stop a proof of work system scaling with energy input.
You might be right though, but like I said I don't think PoW is necessarily the final state.
I suspect mining expenditure would still be mostly spent on energy usage, not finding more efficient hardware/algorithms, since mining is an arms race -- when miner A finds a more efficient algorithm, it's only a matter of time before miner B finds it too, and then they're back on level ground competing over energy.
But even if this is not the case, I don't particularly care whether the mining expenditure is spent on energy, or developing and manufacturing new mining hardware, or sacrificing goats to a hash-finding deity. Since the amount of mining the network does is set by a price tag (the block reward), and its intent is to make 51%ing prohibitively costly, by definition it must use up some valuable resource. Whether that's energy or human ingenuity or semiconductor production is just an implementation detail but it'll always be a waste.
If Bitcoin switches away from proof of work, I'll stop criticizing it for the inefficiency of proof of work.
It indeed makes no sense if you completely ignore half of the argument (and probably misunderstand it on top of that).
The argument was that it makes sense to spend currency for security equal to the amount of currency you are securing, meaning if you do that for all currency, (pretty much) the sole economic activity will be securing it.
Suppose for the moment that what is mining power to bitcoin is the US military to the USD. It makes no sense to spend all USD on just the military, so that it can secure the currency, does it?
You are right, I don't understand this argument at all. It only makes sense to spend the minimal amount that would keep it secure.
The incentive to mine is only the block reward, which is only transaction fees plus inflation. The incentive is not the entire pool of currency.
I'm not sure what you mean by the 2nd paragraph, are you saying if all money was bitcoin, we'd only spend energy to secure that and we wouldn't do nothing else? That wouldn't make sense right? If all money was Bitcoin, there wouldn't be as much upside to it, because it will have already won, so you'd need to do other economic activities which will grow faster than that.
According to who, the people making all the money? It's obvious that people don't find it that simple.
If anything, this problem is not limited to Bitcoin, we should put a carbon tax on everything with externalities. Why just focus on crypto when there are far bigger polluters?
It's just another one of the forms of mutually assured destruction that we will eventually have to confront. It's unfortunate that being very obviously horrible isn't enough to change it, but the same could be said for climate change or nuclear proliferation, and these things are still moving along, full-tilt.