Bye-bye, Bitcoin: It's time to ban cryptocurrencies

This is certainly not universally the case at the moment. It is probably offsetting in the majority of cases currently. But I bet there are a non-zero number of renewable energy products that were able to get greenlit purely because crypto mining can function as a buyer of last resort, and this number will continue increasing.

Bitcoin mining uses a higher proportion of green energy than most other industries though, so I think this energy use criticism is pretty shallow. Some people just don't like Bitcoin and so are enthusiastic to have a reason to complain about it that doesn't require any critical thinking about energy markets. These people believe Bitcoin is entirely worthless, so they'd complain about any level of energy usage, because there is no upside in their calculus.

It's absurdly and ignorantly early to declare "crypto has no utility."

It lets me transact value online without sacrificing my privacy.

In developing nations where the residents do not have access to regulated and "safe" investment vehicles like stock exchanges, where can they invest their saves? Physical bullion that can get stolen or damaged? Cash (and then real estate)?

Are you asking about Bitcoin or Crypto? Bitcoin doesn't do much atm, but Ethereum does stuff, and Bitcoin Cash is pretty practical as a currency at the moment. There's plenty that can be done, but the market will have to decide what to converge on.

I know you said no loans, but I can't skip mentioning DeFi which enables anybody to borrow their own money from themselves, anytime, fully electronically and without centralization.

Then you have smart contracts, which are like a computer, but on everybody's computer at the same time. You can write full programs with complexity nearing that of FizzBuzz and run them worldwide for only hundreds of dollars.

Just imagine a world without crypto. It would be like a world without hackysack, or a world without mail order swords on the shopping channel. Unrecognizable and primitive.

If governments simply allowed cryptocurrencies to exist outside of any regulation except the obligation to pay taxes on transactions and gains, eventually participation would decline as users of the currencies lost their money to scams or mismanagement, in the absence of a state interest in protecting participants.

If the system is designed to resist state intervention, maybe letting it run as designed, and suffer the consequences, is the best approach. There's no need to regulate it out of existence just because it serves no apparent purpose. This is one case where the market will sort that out if we let it.

I think with the amount of activity on AAVE and yearn, plus the growth these projects have received have killed that argument. Very 2017 argument that no longer makes any sense and is presented by luddites.

Most the bottlenecks right now to why you don't have day-to-day apps deployed on ecosystems like ethereum is because of the gas prices. You have hundreds of very intelligent developers working to decrease this to fractions of a cent.

There are legit architectural changes like proof-of-staking and L2-proposed changes that will for sure reduce the price of a function invocation in ethereum.

But you probably don't care about this, because you'd rather hang your nose high and pretend that you're much smarter than a whole ecosystem of extremely talented developers (including some award winners). Enjoy that feeling mate, it's not going to last long and it's all entirely ego-based.

FYI, China kicked out crypto miners, which is why hash rates tanked in the last few months:

https://www.blockchain.com/charts/hash-rate

So we don't know what percentage of mining is even left in China.

Also, dirty energy is a regulatory issue. Externalities should be captured in the price with taxation, and coal mining should not be subsidized by a nation state. When you do those things, energy consumers won't want to use dirty energy, they'll flock to renewables.

The blockchain is just a platform. You have to build projects on top of the platform. Asking what does it do doesn't make any sense. It's like asking what does a piece of paper do.

The real question to ask is not what does it do but whether the trade offs of using decentralised tokenised platform for building real world apps is useful or scalable. The answers to which are still being discovered.

90% of Bitcoin mining in the PRC got shut down permanently last month with little warning, dropping the hashrate by half: https://www.globaltimes.cn/page/202106/1226598.shtml. Presumably it will nose back up over the next few months once deals have been signed and the mining hardware has been installed in new places with cheap unsubsidized electricity—necessarily from renewable sources.

I agree with your skepticism about non-currency uses of blockchains. Some people do seem to be using ENS now, and I think smart contracts might become usable eventually, but I'm not confident blockchains will be part of smart contracts as they actually get deployed.

As for the 12-years-into-the-internet thing, well.

The ARPANET started running in 01969. The first version of the FTP protocol we use today (USER, PASS, SOCK, TYPE, BYE) was standardized in RFC 354 in 01972. The "Internet Transmission Control Program" (TCP), featuring SYN/ACK/FIN bits, but 20-bit host numbers (divided into a 4-bit network ID and a 16-bit "TCP address") and 24-bit port numbers, is specified in RFC675 in 01974, and experimental deployments started in 01975. Version 2 of TCP is IEN 2 from 01977. Version 3 of TCP, with a separate IP layer so you could use it for voice over IP, is from 01978. 12 years after the ARPANET's launch was 01981, which is when the Internet Protocol was finally standardized (in RFC 791, IEN 128, replacing the 01980 RFC 760) as a future replacement for NCP. The switchover from NCP to TCP/IP was January 1, 01983.

So 12 years after the internet's launch was, depending on where you count from, either 01981, 01987, or January 1, 01995. Even on January 1, 01995, most of the US still had no for-profit ISPs; the closest thing most people could get was AOL over dialup (probably 14400 bps), which had three million users (1.5% of the US population) and wouldn't let you browse the WWW. AOL added an email gateway to the internet in 01992, Usenet access in September 01994, and web browsing later in 01995, all paid by the hour. At some later point AOL started providing actual internet access (so you could, for example, use telnet and ssh and upload files via FTP).

It was clear to me what the internet's utility was as soon as I got on it in 01992, 23 years after it started. But in 01995 Bill Gates's The Road Ahead dismissed the internet as a primitive precursor to the "information highway" he imagined, so it wasn't obvious to everyone, even 12 years after the switchover of the ARPANET to TCP/IP.

Similarly, the utility of Bitcoin is obvious to me, too, and to millions of other people. I've written about it here before, for example in https://news.ycombinator.com/item?id=27448744.

It does exactly what it set out to do in the first sentence of the original white paper.

"A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution."[0]

[0] https://bitcoin.org/bitcoin.pdf

I'm not making these estimates, so you can call bullshit but I'm just saying the numbers that have been reported.

It doooooes a lot actually. There are a lot of financial transaction tools, which are not reasonable to throw away. Ethereum alone is on pace to settle trillions this year in transactions. NFT's are a substantial market, and are more than just selling a jpeg (which is a massive business in and of itself). They're the more abstract idea of introducing uniqueness through scarcity into a system that is fault tolerant, distributed, and secure (without having to build that system).

Some of the best use cases I've seen are from Vechain (I invested in this project). Vechain does supply chain tracking, which you also threw away for no good reason, and they're currently live in the real world working with real companies. You can go into a Walmart in China and interact with their food supply chain tracking system today. They also just launched a covid vaccine passport for the San Marino government. There are video games being built on their ecosystem, just like there are on many other cryptocurrencies.

Comparing incremental advancements in technology to the fundamental creation of the internet and ecommerce isn't a valid argument for saying crypto isn't useful. Electric vehicles are junk because it's not a personal spaceship.

No one is saying we'll find a use case eventually. People were saying that 5 years ago, there are already use cases and people are building billion dollar companies in those spaces faster than Amazon grew to a billion dollars. You clearly have not been keeping up with this field, and throwing out anything that didn't fit into your narrative. You should try to revisit it with an open mind.

I definitely won’t say crypto isn’t used effectively for ransomware payments, it’s obviously the current go to. My issue is the article seems to reduce it down to ceteris paribus, hacking wouldn’t be a problem. When many of the bad actors here are nation states, that is not a valid argument.

Beyond just Vechain, Cardano is working with Ethiopia to give five million students a blockchain-based ID that will allow the government to track their academic performance. There are more examples like these, though admittedly many of them have been announced in the past year or so. Ethereum, which is a bit older than these projects, is on path to clear $1-2 Trillion this year.

I know the argument that this is early days isn't very compelling, but I think it makes more sense to look at generation 3 cryptos as the start of crypto's focus being fully blockchain projects instead of currency replacements.

Motivating wealth production through destruction of the environment is irresponsible.

Green Energy production is an environmental boon

Motivating wealth production through green energy utilization is responsible.

Edit: They do become a very valid replacement for a store of wealth in less stable economies however. Venezuela has seen a lot of utility from Bitcoin since their currency is even more volatile than Bitcoin is. You could imagine the quantity of countries that applies to grows as Bitcoin (or another coin) gets more adoption and it's price becomes less volatile. Particularly things like stable coins, which are pinned to the US dollar (1 stable coin effectively always equals $1).

Here's a brilliant idea: what if you did the leg work to lobby your politicians to push for a power grid that did what you wanted without having to limit innovation...instead of complaining online?

With regards to the cash outs, I think there's probably an argument to be made about web 1.0 and 2.0 companies that were highly unprofitable with no way to ever become profitable. There were investors propping up companies with bad fundamentals, IPO'ing, cashing out, and in the end the tech bubble pops and takes down the market and retail investors with it. Crypto definitely does it more quickly and violently, but it's not a crypto specific phenomenon.

You are arguing that trusting issuers has been societal valuable, which sure - historically it has been for the fiat currencies that still exist (if you ignore survivorship bias).

Not sure what handwaving "society is valuable and that value is what backs fiat currencies" even means in concrete terms. The government has the power to print as much fiat currency as they want (and they frequently do with intentional inflation targets). There is nothing that stops governments from printing more money except fear that it will damage trust in their currency, leading to devaluation.

Imagine what happens when some agency loses their wallet key...