Mining Bitcoin consumes 5X as much energy as gold, btw, per unit value extracted. It also requires mining gold to produce the circuit boards used for mining Bitcoin - given the popularity of the ENIG immersion gold plating process for PCB contacts.
The secondary issue is that of course each Bitcoin transaction generates 100g of e-waste which cannot be recycled and just gets buried. E-waste has a few grams of metals, but is mostly plastic and FR4 (epoxy filled fiberglass). Plastic and FR4 cannot be recycled. What little of the e-waste can be recycled is shipped to third-world countries where poor people dig through piles of scrap and dunk it in toxic chemicals.
The only meaningful way to move forward is to reduce consumption, especially consumption which achieves nothing, like literally wiring up a power plant to compute hashes of random data instead of attaching it to the grid to do useful things.
What a disaster.
Except that isn't going to work, because governments are untrustworthy and as history shows will sooner rather than later debase their currency.
All people are looking for here is a safe way to store value over time. If governments would let people keep reliable records without bringing in the inflation tax or changing the rules, things like gold and bitcoin wouldn't be anywhere near as interesting. But they are interesting, because it is normally policy to block anyone who tries to store (small-time) wealth for more than a couple of years.
Bitcoin is very very volatile and just because it went up the last x years, doesn't make it stable or trustworthy.
My money in my bank is very safe and it doesn't cost me anything.
The inflation itself is a systematic thing and should affect bitcoin equaly.
When corona came, i was looking at the stock market and was surprised how many people left it. It doesn't make much sense to distrist the stock market that much. After all alot of pension funds are existing, lots of companies or people who are self employed also have to keep their money safe. There is a lot of dependency on the share market and we are all bound to a certain degree of not being able to move it out asap.
Bitcoin can provide a way for e.g. Argentinians to get their money into other currencies when the government is actively preventing that through "standard" mechanisms. It's safe (er, safer) from that perspective.
As someone from a country which has had its currency's value slashed to half 5 years ago, I genuinely don't see how Bitcoin is safe at all. If anything, gold or real estate are safer.
Sure, if it is somehow guaranteed that I won't wake up tomorrow seeing 1 BTC = $30 000, I could see your argument. But is that guaranteed?
I would also like to add that the swings that BTC takes are unpredictable (at least for the common people who would benefit from it being a safe storage for their wealth).
Yeah, if things are that bad, it could be viable.
Civil war is another viable scenario. However, one should also assess the situation properly if his/her country is in civil war. If things go bad and you have to escape, "safe passage for x amount of gold I have on hand" is more guaranteed than "safe passage for x BTC I promise to pay".
If a government is preventing people from transferring money through standard mechanisms, it's only a matter of time until they prevent them from using crypto to do that. If the best use is circumventing the law, it isn't much of a currency at all
Not to mention, a $20 transaction fee in Argentina is devastating.
Your money is safe, your wealth is not. Taking the US as a reference, it is official government policy that if you store your wealth as money then it has a half life of 35 years.
> Bitcoin is very very volatile and just because it went up the last x years, doesn't make it stable or trustworthy.
I was sneaky in my wording - I'm a gold bug and think Bitcoin is worthless. Nevertheless, a rational person who was interested in bitcoin would probably note that whatever its bad points it is simply not subject to the sort of technical intervention that makes fiat untrustworthy.
Also, using gold as a reference, the unofficial policy half life looks more like 12 years. Using the M2, maybe 14 years.
[1] https://www.stlouisfed.org/on-the-economy/2014/september/wha...
The inflation rate is basically a proxy measure of wage growth [0]. The money printing hasn't going in to wages. It isn't appropriate to use the CPI to adjust wealth, because then you'd be mistaking asset price inflation for productive growth and putting money into things that don't earn real returns (ie, are grossly mismanaged).
[0] https://www.stlouisfed.org/on-the-economy/2015/november/rela...
People aren't owed a risk-free return on thier capital and inflation is an incentive to invest. You're looking for a merged risk-free long-term store of value and medium of exchange. There's no reason to couple those two. It's actually counter-producive as they have different objectives. Money's job is to remain stable enough for as long as you hold it and cheap to transact. A long-term store of value's job is to go up.
Money is your short-term medium of exchange and lossy store of value. Which you use to buy long-term store of value. This is how capital is productively allocated while also creating a stable financial system.
The ability to adjust the money supply is crucial to reacting to shocks, to a changing population, and a changing economy. Taking away the knobs from the Fed removes their ability to create a stable monetary system in which business and individuals can operate.
If you actually look back in time you'll see under the gold standard, an attempt at this, boom/bust cycles were worse and more exaggerated. And much harder to control. There's no such thing as a free lunch.
This whole trope about the fed "stealing" 99% of money's value over the last 100 years is voodoo fringe economics. These are the people who used to hang out with megaphones at the corder of 5th and Market. Of course it went down, they told you it would, and they told you to buy something else with it.
They are pawns, if you will, to point to as jumping off points to your average Joe and say "Look! Your favorite X,Y,Z institutional guy is into Bitcoin now!" That is all.
But I do agree that it is too hard for the average person to save in the sense of "I will need to withdraw some wealth in the future". The best option out there seems to be ETFs. The dirty secret about the stock market though is that companies don't issue new stock nearly as much as one might think, and therefore the stock market is basically counter-parties playing off each other.
There are plenty of people out there with good, useful ideas and skill sets that really ought to be funded. And no, not all will generate VC like returns.
Figuring out how to link your minor excess now to your needs in the future in a way that isn't a net negative could very well be the defining problem of a generation.
On May 6, 2016, the operator of Liberty Reserve was sentenced to 20 years in US federal prison
It’s cryptocurrency, the Stellar Lumens (XLM) is trusted well enough to be in the top 15 cryptocurrencies by marketcap. It has years of history to look back at. It doesn’t have a inflation rate (0% inflation rate now + occasional coin-burns).
It uses orders of magnitude less electricity than bitcoin because it uses distributed databases instead of ASICS, transactions are sent and received in a few seconds (near-instant), and transaction fees are less than 1 cent (just high enough to disincentivized spamming the network). Compared to Bitcoin’s $250 tx fee and Ethereum’s $30 tx fee, XLM’s tx fees are very cheap.
Finally you can buy XLM on most exchanges since it’s been around so long.
Everything else in my comment still stands though and it certainly is a cryptocurrency.
[1] https://ycharts.com/indicators/bitcoin_average_transaction_f...
market cap =/= trust, especially when you consider that in the past there were outright scams that were in the top 15 (eg. IOTA).
lol, Dogecoin is #6 and XLM is #14. Are you saying your currency is less trusted than one with a dog on it?
[1] https://ycharts.com/indicators/bitcoin_average_transaction_f...
There are ways to do so that don't involve scenarios literally as absurd as _buying power plants_ to do random equations.
Perhaps some of that desire for a safe value store should be invested in that direction.
Some governments are more trustworthy than others, and lots of people trust some governments. For example many people hold USD because they consider it a better store of value than their own country's currency.
> a trusted party could run a big relational database that was basically a non-inflating currency and really cheap to run
Somewhere like Switzerland would probably be quite trusted to run this.
It's most useful for transactions or transfers that are illegal somewhere. A government can deprive a criminal of a house more easily than a password.
I suspect it was embraced by western governments because it facilitates capital flight from the developing world to the developed world - especially from China.
Looks like they, in turn used this reference [2].
[1] https://digiconomist.net/bitcoin-energy-consumption/
[2] https://www.cell.com/joule/fulltext/S2542-4351(19)30087-X
The e-waste generated this way is not an intrinsic cost of handling a transaction, since the hardware could hypothetically be reused or recycled. It seems unwise to think of it as an irreducible cost per txn, rather than a dynamic figure that would likely improve over time (especially if the carbon externality were appropriately taxed)
If you don’t think that a technology that allows you to store value in a tamper free digital ledger is useful it’s hard to argue the usefulness of PoW crypto currencies to begin with.
Comments like the above are a sad demonstration of the fact that, while Bitcoin was originally an interesting technical project... Discussion of it has now been completely taken over by shills that try to dismiss/refute/hide all of the problems with Bitcoin (or the cryptoasset du jour) to safeguard their bet
"Your argument is as invalid as..." ROTFL
Wake me up when Bitcoin moves to a PoS consensus
(Btw, I recommend whoever is reading to also steer clear of PoS coins... If you want to invest, look elsewhere)
The is made worse by the fact that there are alternatives to produce trustworthy ledgers that don't involve destroying the planet.
One of the issues with crypto currency is that we're replacing one elite with another.
As John Oliver says Cryptocurrency is everything you don't understand about finance combined with everything you don't understand about computers. That new, even eliter, elite is probably no more moral or ethical than the old.
It's not like cryptocurrency is more accessible. Maybe it will become so but I still have to fork out a lot of money to buy Bitcoin. It's just the fees get paid to different people.
Not entirely sure how it's better. It is different though, I'll give you that.
Many of whom are expressing great concern over the very thing PoW hastens.
So no, it isn't either or. It's stop jeopardizing the planet in the long term so you can do whatever you're doing now. I don't care that you're doing it, and we can talk civily about the warts of the financial system so it can be tuned to meet your use case better and cone to a compromise; but PoW has the worst set of dysfunctional societal incentives I've seen in my life.
A few guys with guns can be beaten by several other guys with guns.
>plus auditors
https://www.wsj.com/articles/wirecard-scandal-puts-spotlight...
[1] https://ag.ny.gov/sites/default/files/2021.02.17_-_settlemen...
Meanwhile Bitcoin is just a means to an end, getting rich quick. The fun doesn't happen because we have Bitcoin, but rather because we get rid of them for an unreasonable price.
I don’t know where you live in the world but where I live wages haven’t risen in line with the cost of food and shelter.
Leaving money in the bank is like working to buy a block of ice only to watch it melt away. To argue that any store of value isn’t speculative to some degree is naive.
Isn't there a difference between currency in general being speculative to some degree and cryptocurrencies specifically, whose main value proposition is speculation?
What I was referring to was stocks since they have outperformed government bonds and gold the last few years. Take Amazon for instance. I don’t think the share price is equal to total assets minus total liabilities divided by number of shares. Amazon doesn’t issue dividends so why did the shareholders pay so much for the shares?
The ETs come back once all the minerals are refined and purified and neatly stacked.