I propose we move to a new system. Proof of Wasted Electricity
Replace any currency with any power generation you want.
In prison, its the work of smuggling that stores economic value in cigarettes. In a gold based system, its the work of mining elements out of the earth that stores economic value in base metals. In a peer to peer network, its the work of electricity(of any kind whatsoever, clean or polluting) that stores economic value on a fair distributed ledger.
Money is about storage of work, and quite frankly the weaker the money used to store energy, the more lethargic and rusted the whole economic system gets. Fiat, i.e. "proof of wasted energy" just does a lot of work and lets it evaporate in economic terms leaving the entire society that uses it in constant need of more and more fiat because that energy, that work done, keeps dissipating.
It doesn't matter what money is: seashells, carved rai stones, arrowheads, cigarettes, ramen, non-livable apartment homes sold solely for wealth storage, luxury cars, art, gold, printed paper with your uncle sam's face and "guarantee" stamped on it, centralized entry in a private database, decentralized entry on a public blockchain. Society needs money in order to achieve higher levels of cooperation. Might as well use the strongest form of money that exists. And as far as I know, it aint proof of wasted electricity, i.e. fiat.
In other words, it’s a question of “useful work,” not just “work.” And this is an especially important question in light of the fact that a lot of energy used to mine cryptocurrency is produced in environmentally harmful ways.
Since I'm not going to be giving away the answer, I want you to at least ask yourself:
Does the practice of pressing buttons and printing dollars provide value at the value the units represent?
And since your concern seems to be the environmental cost of bitcoin mining, what are the environmental costs to pressing buttons on a computer adding dollars into a digital dollar network along with running printers to create a few sheets of paper money?
Are there any environmental costs beyond the electricity that runs the printers and the computer and the trees cut down to print the money on?
If so what would those environment costs be and where would they be coming from?
If not, where is the value of that dollar coming from to begin with?
> I don't want to share the answer
I'm not here to win arguments. No. I wont be "getting to the point" because I'm going to keep it for later.
If inflation was non existent or radically less than what it is today would people be so keen to invest their money in companies or spend so much time and effort trying to hoard money for the future?
People who are into Bitcoin talk about inflation like it's a bug but I think it is a feature.
There's the question of when new money enters the world, who gets to have it? Should it be randomly distributed, or should one guy in charge of the money printer get to keep most of it for himself and all his friends, lie about having done that, and then gaslight people to say all of that was okay anyway?
Which is mostly caused by humanity using fossil energy to boost the output of the economy.
An economy that expends the energy on so many more things than just enabling people to be fed and live modestly comfortable lives. An economy that is thus harmful as it entirely neglects the urgent crisis.
Humanity is at a point where we ought to think about actually cooling down the economy to drastically reduce our emissions until industries and energy generation will slowly turn to being climate neutral.
The much decried deflation is precisely what would be the better dynamic for the economy in this situation, rather than an inflation dynamic that virtually turbo charges the system.
I'm aware that this is a bold statement, but I wouldn't be surprised if in some 50-100 years Bitcoin were to turn out as the fundamental technology that enabled humanity to overcome the crisis, despite consuming resources that right now appear to many as wasted.
To make it blunt: yes, I absolutely think that in our current situation inflation _is_ a bug. Possibly a fatal one.
As it stands our current civilisation is a ponzi scheme that relies on constant technological innovation in order to sustain itself. This constant technological innovation is partly fueled by the deterioration of value built into the money system.
When I said it was a feature not a bug I was talking about it from a nation state perspective. The problem with the Bitcoin community is that they don't acknowledge the indirect benefits of fiat that they benefit from so they are blinded to the potential benefits to the environment that Bitcoin could provide.
The same question is asked by any gold miner or oil driller. Depending on the price others are willing to pay, sometimes it's worth it and sometimes it's not. When a barrel of oil goes above $80 people want to start fracking again. When it's below that, they stop.
>Nobody is getting fed, housed, or clothed when mining cryptocurrencies, nor is it improving business productivity in some way.
This statement is just not true. Just as the mining of gold creates jobs for the miners, the equipment manufacturers, the logistics personnel, the security personnel, and allows those people to clothe house and feed their families, so it is with Bitcoin mining. Powerplants and the internet are built, operated and maintained by real people with families, you know.
Your last paragraph justifies the work because the people involved in the process get paid and therefore can feed, clothe, and house themselves. But that proves too much: there is a lot of economic activity that is arguably wasteful or immoral that people get paid for. Economic bubbles generate jobs, but once the speculation finally ends and the waste is revealed, those jobs disappear.
And gold mining is devastating to the environment, arguably much moreso than a lot of the electricity generated for bitcoin.
Since it preserved value for millennia, there is a good chance it will keep doing so. Unlike government-emitted currency, which devalues at the behest of politicians.
Central banks are relying on gold for its scarcity, especially relative to said government currency.
If you can find evidence of a single central banker saying “we need it because [some economic reason]” then that would be a significant discovery. Norway, for example, keeps zero gold in its central bank, and yet, their finance system is unquestionably healthy.
> This increase in money supply may be necessary to stave off economic turmoil but at the cost of devaluing the currency. Gold, by contrast, is a finite physical commodity whose supply can’t easily be added to. As such, it is a natural hedge against inflation.
> As gold carries no credit or counterparty risks, it serves as a source of trust in a country, and in all economic environments, making it one of the most crucial reserve assets worldwide, alongside government bonds.
> Gold’s inverse relationship with the US dollar, another major reserve asset, is an added element to its appeal. When the dollar dips in value, gold typically rises, enabling central banks to protect their reserves at times of market volatility.
https://www.reuters.com/article/sponsored/why-central-banks-...
> The signatories confirm that gold remains an important element of global monetary reserves, as it continues to provide asset diversification benefits and none of them currently has plans to sell significant amounts of gold.
https://www.ecb.europa.eu/press/pr/date/2019/html/ecb.pr1907...
This means that when the music stops, someone ends up holding a big bag of nothing, since there's no backstop.
When the music stops, your account in the global open distributed ledger is stored in hundreds of thousands of harddrives distributed evenly throughout the entire free world.
And when the music starts again, your account is still exactly where it was when it stopped, available to you wherever you want to go in the free world.
I don't see why this is a problem, but if you want to use this as an argument, then go for it.
("Actual value" in dollar terms I assume? correct me if I'm wrong)
Current iterations of crypto have a cost to produce, which makes it valuable on the upswing since it is scarce. But there is nothing to catch it on the downswing, unless it is backed by some assets, and then you have to trust the backer, much like you have to trust any government. At least you can vote out a government though.
Melting gold down would require more energy, not less and is a step in the initial mining of gold, not "getting the energy back."
Not sure what you were getting at here
Thats not new at all. We've used it for decades now it only leads to boom and bust cycles, while pushing the power of work done into the hands of people who didn't do the work.
Thats a feature not a bug. Not your keys not your coin. Neither scammers nor government can take it from you without you voluntarily giving it up.
Which makes "proof of a monopoly on the use of violence" obsolete since no amount of force can pry it from your dead body.
For example, you hold 100 bitcoins. Randall Munroe's wrench hacker holds you up for bitcoin because he knows you have some. You give him 0.1 from an address. He lets you go. You keep 99.9 of your bitcoins, but your attacker thinks he took got the whole bag.
Lack of provability means the attacker may never believe you, in which case you’re now dead as well as broke.
If someone has a monopoly on violence, they can pre-commit to massive retribution against anyone who does this. They also get to define what money is, and have a reason to want to.
If nobody has a monopoly on violence, nobody is working minimum wage at Wendy’s because there is neither a minimum wage nor a Wendy’s nor a society capable of supporting a Wendy’s.
And so are you. Doesn't matter if you don't actually have a bitcoin. Lack of provability means the attacker says you have a bitcoin so therefore you have a bitcoin.
You are pinata by decree of the assailant and nothing else. Therefore due to the
> Lack of provability means the attacker may never believe you, in which case you’re now dead as well as broke.
... regardless of whether or not you owned any bitcoin.
Which means everyone regardless of owning or hating bitcoin are now dead because gangmembers say everyone they say so has bitcoin now has bitcoin. I guess we're all dead.
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> If someone has a monopoly on violence, they can pre-commit to massive retribution against anyone who does this. They also get to define what money is, and have a reason to want to.
And they can also decree who is evil and must be purified. Wether its afghanis, or uyghurs, or jews. They can also decree users with names staring with ben need to be tickle tortured for 20 years.
> If nobody has a monopoly on violence, nobody is working minimum wage at Wendy’s because there is neither a minimum wage nor a Wendy’s nor a society capable of supporting a Wendy’s.
You're getting into economic theory here, which theorists have written volumes of books about, but the short of this is that you're reaching for conclusions without any supporting arguments.
Keep in mind, no one knows if this rock prints money or if that other rock prints money. One of the rocks you've been told can print money but you dont know which one. How many rocks are you going to whack? or maybe its just easier to drive an uber and make money.
Keeping your crypto holdings secret would appear to be basic OpSec, just as one would do if you had to carry significant cash, precious metals, gemstones...
Hard to brag about your holdings on social media if you're not allowed to tell anyone, though.
What exactly do you think a scam is?
That’s a very short list.
What do you call it when someone offers goods or services, but does not deliver them? Or delivers less than advertised? Or sends official-looking demands for payment of parking/speeding fines without due authority? Or sends a fake invoice, based on a real invoice, at the time a customer is expecting and for the amount expected, but with a different receiver?
I would call each of things “scams”.
All of them have happened.
A good system needs a way to make people whole when they have been wronged.
Also the Ethereum DAO debacle proves that crypto needed less than ten years for "too big to fail" (preferential treatment for the sufficiently influential) to materialize and essentially undermine all promises of cryptocurrency. You can get your money back when you're scammed or hacked, provided you have enough influential friends.
No there isn't, because you don't know how much I have. I can always give up some and claim I gave up everything. To do what you claim you literally need to be omniscient. And if you are, then at that point you wouldn't be prying it from me.
See my comment to someone else posting https://xkcd.com/538/.
For the vast majority of people, it's not too hard to make an educated guess about their wealth based on their house, their car, the area they live, their lifestyle, their age, their job, etc. For most people, this information isn't hard to find. If you're torturing them to give you access to their crypto wallets, and they give up less than you expected, you just keep torturing. You may argue that people should be protective of this information, but they aren't and will probably never be.
(As an aside, I don't actually believe torture is a viable large-scale threat to cryptocurrency. Pointlessness is though.)
Which means gang members are suddenly going to torture anyone who lives in Beverly Hills because they must have a bitcoin.
Assuming you are on tech worker salary, you should be buying guns to protect yourself from these gang members who are coming after the bitcoin they assert you have which they know you do because they said so.
Also keep in mind, some of the poorest people are the ones that yolo invest in crypto and post instagrams of lambos they rent. Gang members are gonna have one heck of a time trying to get those people's bitcoin before realizing the upside down toothless crypto guru actually controls nothing and is actually deep in the red. Which is to say, public appearances are not indicative of true wealth.
So here's the question, what metrics are you looking for as a torturer looking for torture acquired bitcoin? Lambos on instagram? Three story homes in beverly hills? Jpegs of a monkey on a twitter profile?
The reason I say that trying to pry bitcoin out of someone that has it properly guarded is like walking around the earth tapping rocks hoping to find one that turns into gold is because it requires mind reading technology that hasn't been invented. Its a losing game that puts the assailant at legal risk for close to little chance of winning anything at all. Huge downside, practically zero upside.
I'll admit to one thing though. We are going to see more and more and more of these torturers or scammers or crypto criminals and they are going to try harder and harder and harder. But again, properly defended means huge downsides and practically zero upside for them. But its not gonna stop them from trying, and its not gonna stop the hordes of scammers and torturers and crypto criminals from coming.
Pretty much.
Or you could hire some people to do the security for you. Naturally they will want some money.
But now you’re scaring all the people around you because the security answers to you alone, and you’re scared yourself because the people richer than you have more and better security, and people without enough to hire any security keep disappearing — some dead, some just leave because it’s unsafe — and so you all decide to hire them collectively and pay collectively and oh look you’ve invented taxation and a police force and now you don’t need a trustless payment system but you do need an accountant.
100 people in a room. All of them might have bitcoin. None might have bitcoin. One might have bitcoin. Five might have bitcoin. 99 might have bitcoin. Two might have bitcoin. One guy might have heard of bitcoin.
Good luck rubber hosing their bitcoin.
> Thats a feature not a bug.
This is a hilarious admission that cryptocurrency is designed for malicious actors. Anyone altruistic would consider lack of recourse for scam victims to be at least an unfortunate consequence of the system design. But a “feature”? Only the scammer or their associate would view it like that