Bitcoin needs to go away. All cryptography has a shelf life so it is not a good store of wealth and it is terrible as a transaction medium.
1 Bitcoin transaction: 1200 kWh
100k VISA transactions: 148 kWh
Avg US houshold per month: 877 kWh
1 Bitcoin transaction: 1200 kWh
100k VISA transactions: 148 kWh
Avg US houshold per month: 877 kWh
Even if this didn't exist, Bitcoin isn't going anywhere. Its value could be dramatically reduced by banning fiat on-ramps, but it will still be around. Cryptocurrency is a genie out of a bottle, you aren't going to put it back in and pretend it never happened.
Forget Bitcoin, Lightning Network was announced years ago and it's still far from being used in production. Also this doesn't solve the Proof of Work problem Bitcoin has, the higher its value the more energy is used, a second layer solution isn't going to fix this issue, it's only increasing throughput.
Since developers of Bitcoin are extremely conservative and censoring, I doubt Bitcoin is going anywhere in the mid to far future. Other projects are just faster and can potentially deliver their promises.
> Forget Bitcoin, Lightning Network was announced years ago and it's still far from being used in production.
It is being used in production with growing adoption (1ml.com) and it is what they are using in El Salvador.
> Since developers of Bitcoin are extremely conservative and censoring
It's a decentralized network where nobody controls it, developers can't push changes willy-nilly. Bitcoin isn't trying to be everything to everyone and that's ok. You can have other layers and projects which enable these fast moving ideas (most of them are going to be deprecated sooner or later because they'll turn out to be bad ideas anyways). Once these projects prove it works, Bitcoin can incorporate them. Most of these projects that are faster sacrifice decentralization to a certain extent and if we didn't care about decentralization, then why even bother with crypto, we already have Paypal/Visa/etc.
> Cryptocurrency is a genie out of a bottle
That might be true, but that doesn't mean that criticism of Bitcoin (which is only one of the crypto currencies) is not valid.
I use the lightning network almost every day listening to podcasts with the Breeze app https://breez.technology/
The number of transactions per second of Bitcoin, as it can handle many if you include lightning
I unironically believe a deflationary currency is the only way to avoid climate collapse. That could be Bitcoin or something else, but what it can't be is a central authority who has the option to infinitely increase the money supply to maintain 'economic growth'.
The proper comparison for "investing" in bitcoin is investing in stocks, many of which ARE deflationary by decreasing their shares outstanding every year.
People are no more incentived to save by bitcoin than they are by real investment. To reiterate, it's been sound money mgmt to defer consumption and invest for the past few hundred years at least.
The payment to bitcoin miners comes from bitcoin holders. At current prices it is billions of USD per year, paid out by inflation to burn fossil fuels. I'd rather get paid on my investment than pay.
The supply 'increases' are already growing negligible as the current supply is 18.6mil / 21mil. Yes, it will continue to offer miners rewards, but that is cut in half every few years. People also lose their keys quite frequently. It is hard to estimate, but at some point 'misplaced' crypto will surpass the amount generated by block rewards, making it deflationary in a literal sense.
Also, 'holders' are not paying miners. Miners make money from transactions, as well as block rewards.
As for your stated preference, it is your freedom to avoid cryptocurrency, just don't obstruct other people's financial freedoms.
There's a reason that in GAAP accounting, when a company issues new shares (dilution), it is recorded as a loss to the equity stockholders in the income statement.
I see you didn't bother to respond to the point that people have always been better off saving than consuming.
Bitcoin's cost is wealth destruction. That energy could be used for something with a real payback - housing, infrastructure, healthcare, technology - but is instead burned with nothing to show for it but extra carbon emissions and some landfilled junk gear.
Have fun destroying the planet.
With a somewhat deflationary currency, an 'investment' worth putting money into has to be worth more than the money is appreciating in value. This cuts the fat as you have to be more picky as an investor, and banks have to be more picky as a lender. However, right now there is virtually no reason to save in this sense, you must throw your money at assets like equities or real estate to keep your purchasing power. You must feed the machine, so to speak.
I think you'll find your argument on the wrong side of history when it comes to saving the planet from climate change. We need a drastic reduction in general consumption and waste while we work to reverse the damage we have done and find much more efficient means of production. We aren't going to get that without a total reversal of monetary policy, alongside strong fiscal incentives for climate conservation. It is far-fetched, but possible for a cryptocurrency to achieve this.
I'd be happy to chat about it orally sometime; email me at ben@bencreasy.com if you're up for it.
I'll admit that growth, especially absent pollution pricing, is often negative for the environment. But unchecked population growth without tech-driven economic growth isn't great either, as one can see from numerous countries. To win in the marketplace, one often has to do things cheaper. Excessive profits or inefficient processes are more burdensome for the environment. It shows up in mansions, jetsetting around the world, etc. Investment in new ventures attacks this problem.
Investment funds innovation and meets real needs. Inflation which forces people to invest is good. India is country where the people are heavily overweight gold instead of real investing. I believe it has reduced their national prosperity, in the same way bitcoin will reduce global prosperity.
Bitcoins energy consumption is disproportionate to the value for the societey it has.
Also, given that point-of-source green energy is cheaper & more politically stable than fossil fuels, shouldn't we expect to see greener and greener Bitcoin mining? In fact, China banned Bitcoin mining in it's coal regions and then more recently throughout the country. Meanwhile, El Salvador plans to build mining facilities using geo-thermal power.
If you're seriously unsure about how much more energy Bitcoin uses than cash, when I last did the math, Bitcoin mining consumed more energy than the entire US Mint by a few orders of magnitude. It's not even close.
My guess is it'll be eclipsed by the smart contract platforms - ETH, DOT and ALGO. And eventually just go away.