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Comment by hn_throwaway_99 | Hacker News Reader

OK, of all the comments I've seen trying to refute what I've written, yours is the only one I've seen that at least makes sense.

Yes, I totally agree, the crux of my argument is really just "in a proof-of-work system, it is undeniable that electricity spend is proportional to total network market cap", so if the market cap doesn't change, then things can certainly putter along.

That said, if the idea is that more and more of the world's economy will be represented by BTC transactions, which these days is pretty much what every person who owns BTC believes, then the market cap can't stay static. I also have a very difficult time believing that if the market cap did stay static for 10 years or so that people wouldn't start to realize "the jig is up".

But yes, I totally concede, if the market cap doesn't rise, current electricity spend doesn't need to rise either.

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What jig would be up? Mining as profiteering? For sure, and the end of mining is an inevitability. Bitcoin as currency could continue though, no?

The end of mining is the end of bitcoin. If there are no miners contributing to create the network consensus, then anyone can come in with a 51% attack and destroy the integrity of the block chain.

By "the jig is up" I mean that the vast majority of reason people invest in Bitcoin is as a speculative investment. If it stays flat for 10 years, it loses its appeal as a speculative investment, and then would collapse.

The other reason some "true believers" (or, as I refer to them, insane cultists) invest in Bitcoin is because they believe it will be "the world's currency", i.e. that it will replace major currencies like the dollar. But, were that to occur, it's market cap would skyrocket, at which point it would require a planet-and-a-half's worth of energy to stay secure, which is also not happening.

> at which point it would require a planet-and-a-half's worth of energy to stay secure

Ehm, either that or the price of energy increases or the percentage of reward per block mined to mcap decreases.

No, total dollar amount of electricity expenses spent on mining does not depend on the price of electricity.

Today, miners are getting paid about $1.5 billion per month. If they like money, they will keep adding new miners and run them until they all in total spend less than, but close to that amount.

So, $1.5 billion per month of fresh money needed to offset this pressure on Bitcoin price.

There goes the argument that Bitcoin is a good "store of value."

> total dollar amount of electricity expenses spent on mining does not depend on the price of electricity

I agree. As far as I understood the issue was not with the money spent on energy but with the energy spent, no?

> So, $1.5 billion per month of fresh money needed to offset this pressure on Bitcoin price.

If I understand correctly, you're saying that BTC inflation is a problem and I believe this is true, both in the economic and ecological sense.

But there was no way in 2009 to foresee the optimal inflation rate (halving every 4 years isn't too bad actually) and modifying it now defeats the founding principles of BTC, so it'd be a big no no. So it was kind of a trade off and will continue to be, every 4 years a bit less though unless we hit hyperbitcoinization.

From an economic point of view the investment into bitcoin is only ever relative to other assets and most of them inflate far more (relative to their mcap).

With a price collapse, the energy consumption would also collapse, no?

> require a planet-and-a-half's worth of energy to stay secure, which is also not happening

But what are the implications if it does?

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