Bitcoin’s climate damage is similar to beef and crude oil, says new study
theverge.com
theverge.com
(And yes, we do use our military to protect the USD: we killed two heads of state primarily because they wanted to price their oil in something other than USD. Had they succeeded that would have killed the petrodollar system.)
BTC as an asset can be used as collateral. It doesn't have to be used just for trade. Maintain your LTV and the daily swings in BTC price are less relevant over the long term, while still be an effective store of wealth.
edit to add: owning bitcoin as a hedge to inflation has not worked. for about a decade of very low inflation, bitcoin was deflating. As soon as inflation started to rise, bitcoin lost 60% of its value. great hedge.
How do you use stock as collateral? Can anyone do that without having to ask for permission?
The 'btc is backed by nothing' argument is old and weak. We're over 10 years into this and it is still 20,000x more valuable than when it started. Try a new trope.
If you want to drag the MIC into this, then also drag the rest of the world economy. Dollars are not used to only buy guns, just like bitcoin isn't just for drugs...
The entire planet hedges its currency against the USD. Obviously every financial system on Earth needs to be included in that comparison. With their own servers, people, armies etc
And that says nothing of the people using those currencies to execute transactions to buy things such as oil and gas, of course!
Clearly Bitcoin is the solution as the USD is "indirectly" the cause of literally 100% of environmental damage
This is comparable to the Bitcoin nodes and the miners.
The crypto world ends up re-creating versions of many of these entities, and their power usage should be counted if you're going to put the entirety of the financial industry's power usage on USD.
The energy use to utility ratio of bitcoin sucks now and it's unlikely to get much better with scale.
Now that Ethereum has moved to proof of stake, the part of the crypto industry that is in bed with ESG-friendly VCs and regulators has really turned on Bitcoin, as was always expected. There's an almost constant barrage of these articles now.
Some people really do want to live in a world the state gets to decide to what uses of electricity are allowed and which are not, but I am not one of those people.
That's an interesting world you're living in.
In short, if all Bitcoin mining used renewable energy sources, or if society switched to renewable energy as it should anyway, then the Bitcoin climate impact would be nil.
I don't know if you've looked at the requirements for covering our current energy sinks with renewable energy sources, but it's not looking manageable in the timeline we need to prevent climate change before we account for adding a random extra energy sink of bitcoin mining. Which, has frequently required peaker plants to cover the extra energy usage.
This statement waves away all of the difficulty of accounting for how much solar/wind we would need to account for bitcoin mining on top of what we need for everything else. It's impractical, especially for something as societally useless as bitcoin mining.
That doesn't look like an apples to apples comparison... The dollars spent on gasoline have to be at least two or three orders of magnitude above that of Bitcoin, right?
Edit: After checking, it's three orders of magnitude, 10 billion per year in USD spent on barrels [1] vs 0.09 billion in USD fees per year [2], but the article seems it look like comparable threats to our environment.
[1]: https://www.eia.gov/outlooks/steo/report/global_oil.php
[2]: https://ycharts.com/indicators/bitcoin_total_transaction_fee...
It's a "solution" to the extent that you think proof-of-stake has comparable security to proof-of-work. And the jury is very much out on that one.
For example, proof-of-stake is quite vulnerable to regulatory capture. Exchanges stake users'f funds. Exchanges are regulated at the federal level. Therefore, regulator pressure can lead to protocol changes that directly harm users. There are already strong hints that this dynamic will become a big factor.
The same dynamic does not exist in proof-of-work, where exchanges and miners are decoupled.
From the research article:
> ... POW-based cryptocurrencies are on an unsustainable path. If the industry doesn’t shift its production path away from POW, or move towards POS, then this class of digitally scarce goods may need to be regulated, and delay will likely lead to increasing global climate damages.
https://www.nature.com/articles/s41598-022-18686-8
"Regulate" what exactly? Miners? Great, what's a "miner"? Even if you can thread that needle, all the regulation will do is to force miners into different jurisdictions or to downsize their operations. Neither of these outcomes will necessarily reduce the network's hash rate, jeopardize security, or convince Bitcoin users to stop using bitcoin.
Taxing dirty electricity sources however seems to be regarded as a stupid idea.
For comparison, gasoline generated 41 cents, and beef production was responsible for 33 cents in damages."
What are the total market values of each of those things, though?
At the least you know the market cap of bitcoin right? That's easy. Market cap of commodities is also Googleable.
But it's worth noting that while people need to eat, and need to transport themselves (tougher, relatively true), they don't need to own bitcoin. Nothing in the world is driven entirely off of bitcoin.
I don't think bitcoin provides any value to the world, so trivially it doesn't provide value commensurate with its environmental costs, but I was hoping the article would give me a better idea how big a deal those environmental costs are in the larger scheme of things.
Proof of work is core to the ethos of Bitcoin.
https://coinmarketcap.com/currencies/bitcoinpos/
Bitcoin is open-source software. Anyone can fork the code and change it however they want. Just need to convince others to run a node with your code and convince the market that your new network protocol is worth something.
However the history of Bitcoin hard forks has shown that they're all almost certainly doomed for failure or irrelevancy, because one of the main value propositions of the original Bitcoin is that it's resistant to change by any single authority.
Want to replace the original Bitcoin using PoW with a new Bitcoin using PoS? You have to convince everyone running a Bitcoin PoW node (~50k globally) to switch over to the PoS client, including all the miners around the world (~6k globally).
Why did it work for Ethereum? Because it's centralised. The community will follow the lead of whatever Vitalik and the Foundation states is the path forward for the protocol. Bitcoin has no such centralised leadership and so is resistant to top-down decision making.
Dumping that will cause massive downward price pressure, reducing the total effective value. See Musk's bitcoin dump earlier this year.
Inactive addresses with large balances are watched closely. Coins moved from those are going to be noticed and followed. It will be very hard to extract meaningful value without compromising your identity. Legal authorities may not agree that your possession of a particular string of digits entitles you to the proceeds.
People follow the path of least resistance - there is much to be made via malware and scams. Soft targets are plentiful, why make life harder on yourself while also taking on greater risk?
An uncensorable store of value/currency is like an amphibious vehicle for most: pretty cool but they are never going to need one.
It's easy to see the utility of food and oil.
the problem is that bitcoin is simply video game money masquerading as “An uncensorable store of value/currency”
How does one make the argument that Bitcoin is easier to attack?
Also, since energy is turned directly into money, it then becomes money, which translates in its price being dictated by the highest bidder. Read this as: building 100 more nuclear plants per country won't solve the problem because the sudden increase in available energy will shortly be defeated by more and more of it allocated for more mining, creating in a few years a new shortage.
Also, Bitcoin miners aren't destined to grow infinitely, consuming all spare electricity. There will be an equilibrium point where Bitcoin mining computers can only get so efficient and so fast.
How efficient the computers are is completely beside the point, by protocol design.