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Comment by QuadrupleA | Hacker News Reader

Heartened to see Taleb taking a skeptical stance on Bitcoin and crypto - last time I looked into it he was a proponent due to its decentralization and existence outside the monoculture of mainstream finance.

The sooner we can move past these staggeringly inefficient environment-destroying pump-and-dump schemes the better off we'll all be.

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Something can be overvalued without being worthless. Also, the environment argument is inconclusive. Using a lot of power isn't the problem, it is how the power was generated and whether or not it was excess capacity

Even if the electricity were 100% generated by wind farms and solar panels, what a colossal waste of it - rather than helping humanity it goes to feed racks of millions of red hot machines to solve useless hash puzzles all day.

It's like feeding vast amounts of wood into an ever growing fleet of steam engines that just travel in circles all day, and once every 10 minutes one of the trains throws off a piece of gravel or a paint chip that humanity has decided has incredible value due to how hard it was to obtain.

Some whataboutism .. individual people expend energy for countless things that are useless or even harmful to many others. Most people in the west are totally egoistic when it comes to the sheer amount of energy/resources they use/consume. > "... what a colossal waste."

Compared to all this, the energy/environmental footprint of bitcoin is laughably tiny.

IMO bitcoin does indeed have the potential of solving a global problem (not easily manipulatable reserve currency) .. that'd be a political/economic benefit that would justify a non trivial expenditure of resources. We'll see in the future whether it can come true. The experiment itself appears already useful to me. More useful than many other things humans have done. Yeah, totally subjective.

In this case using a lot of power is the problem since the network's power consumption does not increase the performance or capacity of the network - using excess capacity to mine bitcoin is actually worse than doing nothing with it because it contributes to a difficulty increase which makes the entire network more expensive.

And everything that is worthless is overvalued.

Arguing that some hyped things don’t suck is not very helpful. I think it’s better to focus on particular qualities and try to move to the right price.

The best analysis I read years ago was predicting present value based on expected future transaction fees. That’s the only basis I saw that made sense and were like 1000000x past that valuation.

> Something can be overvalued without being worthless.

Nothing is worthless[1].

Everything worth something to someone at some time.

But some things will be worth much less to everyone at another time.

[1] that includes negative prices also, but that because of the externalities, i.e. deflation, storage costs, or pre-existing contractual obligations

It's also about the systems it's replacing, which all the careful studies I've seen have rated as even less efficient. It also doesn't take into account future improvements in energy efficiency, which in the case of Ethereum are near and profound.

Bitcoin and all proof of work systems can barely replace the transaction processing of a small bank, nevermind all of the other operations, while consuming more energy than many entire countries.

El Salvador is the example that proves you wrong. They are using Lightning Network on top of Bitcoin to scale to enormous transaction volume - enough to run an entire country with plenty of room to spare.

Proof of work pays for network security, not Tx volume - the most secure super-computer ever invented.

Transaction processing is a free side-benefit.

With Lightning, TX Processing scales to meet any arbitrary needs.

How many people are actually using Lightning network in El Salvador at the moment? Also, isn't using Lightning Network over Bitcoin essentially equivalent to using Visa's payment network over the traditional banking system - i.e. a completely separate system, with entriely different trust characteristics and entriely different trusted entities?

People using LN are not transacting using Bitcoin. They are denominating their transactions in Bitcoin, and trusting LN to eventually convert to Bitcoin (at the huge bitcoin transaction cost) if/when they eventually need it. Even worse, most people will not use LN directly, they will use yet another third party, one that will operate a bitcoin wallet and LN channel for them (likely the same wallet and channel for many, many different people).

> How many people are actually using Lightning network in El Salvador at the moment?

My understanding is that they are onboarding something like 20,000 new users per day through community trainings and bootcamps.

That's through Strike's app, right? I don't think that creates LN channels for everyone, LN is just an internal implementation detail for this centralized payment app.

Strike is one option but certainly not the only one. With Bitcoin as Legal tender in El Salvador and Lightning fully supported as a payment network, users are not locked in to a single approved app.

Users can participate with any Lightning wallet such as the free and open BlueWallet.io app or any other Lightning app. No one is obligated to use Strike.

That is the beauty of free, own and interoperable standards such as Bitcoin or Lightning.

El Salvador could be the example but it’s far from proven. It definitely shows that Bitcoin really doesn’t scale: getting remotely competitive speed and cost requires giving up the decentralization vision and using Lightning network companies which are banks in all but name.

> it is how the power was generated and whether or not it was excess capacity

Coal and no, because that's the marginal production mode in China.

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