Comment by soonnow | Hacker News Reader

Comment by soonnow | Hacker News Reader

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In my opinion Cryptocurrency is going to be attacked from three directions:

- Environmental Reasons: Bitcoin alone is using as much power as a small country. "Bitcoin production is estimated to generate between 22 and 22.9 million metric tons of carbon dioxide emissions a year" (in 2019). A typical car emits 4.6 tons of Co2 per year. So immediately not using Bitcoin would save as much CO2 as 4.5 million cars of the road. The effort to remove that amount of CO2 through innovation or legislation is steep and faces backlash.

- Monetary Control: The US have fought hard to become the reserve currency of the world and they will not give this up without a fight. As well as monetary easing and restrictions are one of the few ways to control economic cycles, to flatten a boom or bust curve. No country will give up this power without a fight, as has been seen in Turkey, which already declared Bitcoin illegal.

- Crime and Money Laundering: I do not have hard numbers on this, but clearly cryptocurrency is being used in criminal activities and money laundering. It's like the perfect match for Columbian drug gangs who now can move money anonymously around the world without having to transport it in suit cases. The same is true for ransomware attacks. Those unmarked bills will be replaced with cryptocurrency for any competent criminal.

For any of these reasons I would already expect states to make certain cryptocurrency illegal. Bitcoin being the most important one here. I see the future of cryptocurrency in coins that are: - Locked to a currency (as in notated in US dollars) - Reasonably environmentally friendly - Traceable, with basically the same tracking as any banking transaction today.

I fully expect states will set these requirements at some point in law, once alternative coins exist that fulfill these conditions. I believe that Bitcoin will be illegal or irrelevant at some point and be replaced with better coins.

I might be wrong on this. I'm not invested in the cryptocurrency space at all and I'd love to hear why I'm wrong.

Disclaimer: I own some (not enough, I wish more).

I think your points were valid when cryptocurrency first started, but now it's now a bit too entrenched to be easily squashed.

1) Many miners use renewable energy. China uses a bit of coal for mining, but recent news (or FUD) has most miners scrambling for "greener" energy. Bitcoin's energy usage is talked about quite a bit, but doesn't seem to really dissuade.

2) If Bitcoin had been started by a large organization versus grassroots - this likely would have been squashed. Instead, considering now how widespread it is, and how many politicians own crypto, along with Coinbase being affluent enough to lobby against this - this scenario now seems unlikely. However, I do agree, there will be a fight for monetary control and it may be ugly, but ultimately cryptocurrency will survive in some way or another.

3) Yes - in the beginning, the vast majority of crypto in was used for illegal reasons. Monero is probably a better use case as it's untraceable. Bitcoin has a public ledger making it much easier to track. However, the percentage of overall transactions (crypto) for illegal activities has decreased over time.

USDC is probably the best bet of what you're imagining of a crypto pegged to the US Dollar. It also allows for a blacklist of addresses known in illegal activities.

With all that being said, DeFi may prove to be a larger use case, as it's now possible to create "virtual" banks that run on code and no humans, etc.

For the first point, I don't think it matters if the energy is green or not. It's still energy that is being wasted and could be used to in other ways. Just because the source is not directly burning coal, doesn't mean it doesn't have a net positive impact on emissions.

And for example Bitcoin can very much be squashed in my opinion. Enforce all transactions to be declared above a certain limit. Already the norm for banking that will likely become a necessity for cryptocurrency transfers. I just literally can see no way that this wouldn't happen. Exchanges will need to report it. I feel this would remove a lot of speculation from the market and illegal usage and leave the mature coins. Like some of those that you mentioned.

So when I was saying cryptocurrency I meant the large amount of unregulated coins, chief among them Bitcoin. I agree that there will be coins in the future especially government backed coins or coins that are linked to those coins. But I wouldn't expect Bitcoin to be relevant in a few years.

It's estimated ~39% of total Bitcoin mining uses renewable energy, as of September 2020. It might be higher now due to all the electricity usage attention in recent months, but as long as it's under 90 - 95%, there'll be a lot of criticism.

IMO it's inevitable Bitcoin will face increasing pressure to plan a transition to PoS. Especially if Ethereum's PoS transition goes well and the network is running successfully for at least a year afterwards. (And at that time, Bitcoin's total electricity usage might be much higher than it is now, also.)

But I also predict the community and devs won't even consider the idea, and that this'll manifest as mutually escalating tension and hostility between the different cryptocurrency communities, news media, social media, etc. It's already pretty polarized, but I think it could get much worse. Especially if Bitcoin's price starts to rise more slowly or drop and Ethereum's starts to grow more quickly or surpass it.

> So immediately not using Bitcoin would save as much CO2 as 4.5 million cars of the road

Which would have zero net effect on climate change (total number of cars in the world is 1.4 billion). Conversely, transition all cars to electric, renewable sources and dirty bitcoin emissions still won't be a problem (assuming they can be capped at some value instead of growing indefinitely).

In other words, current bitcoin contribution to climate change is the last of our problems- for now. But I understand that the idea of such an amazing amount of energy being wasted is something that immediately triggers an innate sense of abhorrence.

Well it's not nothing, just because it's less than the big contributors. Transitioning 1.4 billion cars to electric is going to take a long time. I don't see the majority of cars transitioned within the next 30 years. Bitcoin is, as you said just burning of energy and can be replaced with coins that are a lot more efficient, within a much shorter timeframe. It seems like it's an incredibly easily reachable goal for politicians without hurting a lot of people, which is why I assume it's gonna happen.

Many times in climate change policy decisions has symbolism been more important than actual impact otherwise all cows would've transitioned to low methane producing food a while ago. Instead big western countries are making short flights illegal. These flights are producing no significant impact and yet they are made illegal for symbolism.

Though for Bitcoin I does trigger my own sense of wastefulness. Maybe it's jealousy.

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