Bitcoin Is Digital Scarcity
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With the majority of coins hodled by early adopters, Bitcoin suffers from a wealth concentration much worse than fiat's.
While proof-of-work allows for fair distribution, the extremely front-loaded emission of Bitcoin is not that fair to late adopters, let alone later generations.
Its capped supply, while unnecessary for being hard money [1], makes it more suitable for speculation than for use as a currency.
[1] https://john-tromp.medium.com/a-case-for-using-soft-total-su...
This is a massively corrupt and unfair system. It's signficantly worse and more centralized than the way Bitcoin distributes new currency. At least with bitcoin actual humans get actual currency. In fiat actual human persons only get debt that mathematically can never be fully paid back. Unfortunately it's still the least worst way to run a "modern economy".
Sure; it will take a century to get inflation down to 1%, but that means speculative use is strongly discouraged. As a result, its price would be much lower as would its environmental impact. While use as a peer-to-peer currency, its stated goal, would be largely unaffected.
Anyway, this is all besides the point. Now that governments have figured out they can colour coins these types of projects are doomed. Once you have a poisonable ledger and powerful entities see it in their interests to poison some of the branches of the tree then there is no actual advantage of using it. Not in the long term, I mean.
Personally, I'm pleased. I do not want global, decentralized, electronic currencies.
You'll be called a shit coin. But over a long enough time horizon, someone will be right.
> but that means speculative use is strongly discouraged
Volatility is ironically a "feature". As it stands your system has no incentive for anyone to overcome the barriers of joining. You're proposing a better system from the outside, not the inside.
This is not true. You're describing the demand-deposit component of M1 [1]. Below that is M0, i.e. reserves and fiscal policy. One created by the Federal Reserve, the other by elected officials. Above it are marketable securities (M2, the most useful measure of money) and money-market fund assets (M3), a broad and de-centralised set of issuers.
Favorite LOL example: the unconsidered presumption that "centralized" is a pejorative.
Second favorite example: that contemporary national debt is worthy of a stunned "don't have."
Welcome to contemporary economic policy 101. Please find a seat close to the front so you can read the slides.
I haven't thought much before about the overlap between analytic realism a la Quine and anglo-american analytic language philosophy c. 1970,
and the libertarian foundations of the crypto woo woo, but I'm motivated now to take a closer look.
It certainly makes the halo around the smart contract and the reverential tone of formulas like "in the code" and "on the chain" a lot more intelligible.
(TLDR: in 1970 there were still philosophers who took seriously the that in some sense "truth" and in particular its assertion through language, corresponded to Things in the world, and indeed was a Thing, rather than e.g. language merely being a mechanism for agents to collaborate in information exchange through negotiated patterns... the difference being, in the real world, language is just a game played by agents who each model one another and presume intent and agency...)
The fiat currency I use on a day-to-day basis (CAD) has had much less volatility over last few decades than Bitcoin has had over the last months / years. And any changes that have occurred (even the recent ones) have been at a generally predictable rate that makes long-term planning (e.g., for retirement savings) achievable.
Maybe Bitcoin (or whatever comes after it) will be able to achieve similar results eventually, and perhaps at that point I'll start seriously looking at it.
Even the most hard-core hodler from the 2010 era will eventually start spending his/her coins, at which point the distribution evens out. Also; many of the coins from that era are lost because the keys are lost.
This is amusing. I mined eight bitcoins in the very, very early days using my standard off-the-shelf windows PC with no GPU. It was agonizingly slow, but it worked just fine. There was zero risk. It was a fun thing to do, silly even, which is why I didn't even bother backing up the disk those BTC were on, so I'm in the keys-are-lost category.
But risk? Each BTC was worth pennies, where was the risk?
The risk varies with how much you invest. If you invest sensibly, then the risk is low. If you buy on leverage, you end up bankrupt.
"Because no way am I killing my golden goose, but I might as well enjoy life"
(PSA: Pay off your loans when you can, it may occasionally look like this bull run can never end. It will always end!)
Yes, they can.
If anyone wants to use Bitcoin in transactions, since there is a finite supply of it, they have to go to someone who already has it. That person can be willing to lend them some, but will probably will ask for interest. So the rich Bitcoiner will get their original pile back and some extra.
This is similar to the gold-based economy (and monetary Gold Standard): they who have the gold make the rules. If someone doesn't want you participating in the economy, they can restrict your access to currency since they own so much of it.
Having a fixed/finite amount of money in an economy is a bug, not a feature:
Similar to gold, it's always possible to acquire some, if you're living in a nation that is free market friendly.
Which exchange failures have disadvantaged the poor?
Besides, what's the point? Satoshis (sats) are 100 millionth of a bitcoin, stop just do business in sats if BTC is too large for your transaction...
So the real question is, would the dominant fork be the one that ends mining or the one that continues it? And that would likely be answered by which the the power brokers in Bitcoin-land will support ie the mining pools.
So, for your contention to be correct, we would have to believe that the mining pools would willingly give up their source of power because of Satoshi's vision.
It's not impossible for that to happen, of course. But the whole history of just about everything suggest that it's not the most likely outcome.
That's a common misconception, but the ones who matter to decide which will be the dominant fork are the so-called "economic nodes", not miners. Nowadays, the most important "economic nodes" seem to be the exchanges (after all, Bitcoin is useless unless you can convert it to something else, be it goods, services, or fiat money, and the later seems to be its most important use nowadays).
For PoW to remain secure, mining honestly must always be more profitable than mining dishonestly. In other words, the total amount paid to miners over a given period (say, 2 hours) must be greater than the potential profit from a 51% attack over that same period.
At present, through block rewards and fees miners are getting about $1.5 million every 2 hours. Due the the competitive nature of mining they are probably spending nearly that much in aggregate, on rent, hardware, and electricity. That's a fairly significant amount of spending to match, if you wanted to out-hash them and perform a 51% attack.
However, only 1-2% of that is from fees. Almost all of it is newly minted coins. If the current level of transaction fees was all that was securing Bitcoin, we would be talking about only $30,000 of hashing spend per 2 hours and a 51% attack would look pretty darn feasible.
I've heard it said that users will pay more in fees as the coinbase reward shrinks to zero, but there doesn't seem to be any reason for users to increase their fee payment to support the security of the network. Each user will spend just enough to get their transaction included in a block. As long as there is not much competition for block space, there is no need to pay more for fees, security be damned.
So far in the history of BTC halvings we have seen fees rise very slightly, but not nearly enough to replace the lost block reward. Mining revenue (in $) dropped sharply following the last halving, and what restored it was not users picking up the slack in fees, but the price of BTC increasing, making the 6.25 BTC minted reward worth more. Obviously that same effect doesn't help you when the minted reward goes to zero.
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Another way of thinking about it is that with a minted block reward, HODLers are "taxed" (in the form of dilution) to keep supporting the security of the network. In a 21M coins, no-more-minting, fees-only model HODLers expect to get their security for free, fully supported by those suckers actually transacting in Bitcoin. I'm not convinced it will work out.
Good luck herding all of those kittens into one basket. There's a smooth 30 million bitcoin wallets out there.
This is such a big issue that there exist cryptocurrencies with on-chain governance that replace hard forks with voting, such as Tezos (which I worked on, disclosure, yadda yadda).
Irrelevant for consensus. You need miners and network nodes to update their rules, not "wallets". The wallet software itself isn't concerned about the coin emitting rules.
What else do you mean? Those 30m bitcoin wallets are irrelevant consensus.
I'm not a BTC maxi in any sense of that term, but I do agree that the most interesting cryptocurrency (economically-speaking) is, by far, Bitcoin. It emerged purely organically, it enforces scarcity, and it provides no "utility" other than "value." It's not like Ethereum (functioning as a distributed VM: boring, and funded by VCs: double boring) or any other blockchain (which basically is just trying to copy Ethereum).
In other words, I'm not sure if Ethereum will be around 100 years from now, but I'm pretty sure Bitcoin will.
Bitcoin is fascinating. A kind of memetic virus feeding on vast amounts of energy via human mindshare. The thought of 100 years of proof of work is pretty scary though. I think eventually PoW may have to be regulated out of existence. It's not ideal, but with Bitcoin lacking any real governance or organisation, I don't see any other way of fixing it.
Only if it keeps its insane valuation. If its value goes down so will the hash rate.
> I think eventually PoW may have to be regulated out of existence. It's not ideal, but with Bitcoin lacking any real governance or organisation, I don't see any other way of fixing it.
It could be surpassed by another crypto currency. If that happens it will be very interesting to see if its value proposition still holds (gold is still considered valuable even though it is also only a meme asset nowadays) or if only a few enthusiasts will continue mining it.
If the latter happens the hashrate will collapse.
Whilst largely unrelated to it's value, gold does have useful applications as it is resistant to corrosion and has high electrical conductivity. I'm not convinced Bitcoin even has some equivalent of that...
i bet it would obviate itself out of existence by associated fees being higher than alternatives (like staking, and whatever else might come along)?
Why? How about we regulate things that pollute instead, like burning coal. PoW does not pollute nor emit greenhouse gases.
This is a totally fair point. The price of carbon emissions should reflect their true cost.
> PoW does not pollute nor emit greenhouse gases.
I'm not sure whether you're saying PoW doesn't directly emit greenhouse gases, or that the carbon footprint of PoW mining is zero.
So you are okay with someone mining bitcoins if they do so using Solar energy?
Well there are two separate issues.
The first is that the price of hydrocarbons doesn't include the externalised cost of CO2 emissions, leading to market distortion. In a perfect world we would fix that, and see what shakes out.
If the combined effect of carbon taxes and high energy demand makes energy so expensive that people cannot afford the basics, then the next step is effectively one of rationing. If proof-of-waste miners are outbidding poorer people for energy they need to heat their homes (or the equipment to generate it), it might be necessary to ringfence energy production for providing a reasonable standard of living. If there is any excess then the miners and other discretionary users can compete to buy it.
All that is my understanding of how to employ market forces to most efficiently allocate energy resources to people that need it, whilst protecting the climate. But I don't know if we can get all that agreed in time, and I'll support anything that reduces unnecessary CO2 emissions quickly.
Ah he idea that Ethereum was funded by VCs is a really funny one, that has very little relation to reality. The funding was actually quite small.
Oh come on, Buterin was knighted by Thiel as some kind of boy genius. Buterin also spoke at TC Disrupt, etc. The argument that VCs played no role in Ethereum's meteoric growth is plain wrong.
Please provide further evidence of how VC funding made Ethereum, because off the books I’ve read on its origins, yeah there was some money out in at the start but nothing too crazy.
The second part of the miner reward consists of transaction fees which will compensate. Most small scale transactions will be done on second layers such as lightning, thus being unaffected, while big transactions for which the extra security is worth it will be willing to pay the high transaction fees.
To me, this looks like demand is going to cheaper blockchains instead of scaling on Bitcoin L2 solutions.
As long as there is free space in block it makes sense for miners to include any non-zero free transaction, so it is a race to bottom with only occasional surges, kinda like the ones that happen in Uber.
Almost $800k is burnt hourly. Very few people need to transfer that much, and those who do, can wait for extra confirmations.
I would like to see the block reward reduced even SOONER. Halvenings every 4 years is too slow. But I don't think it's going to happen sadly.
As for fees, they could be driven higher by limiting block size, should the community decide they need more security once the block reward becomes too small.
Point is: the algorithm is not infallible, and would have to adapt. Otherwise Bitcoin becomes brittle.
And for those purists out there Bitcoin classic will still be a thing! Sure nobody is using it and it's worth nothing...
The loss of something (in multiple hacks of various coins) is still an "investment", for those using it.
First off, there are other cryptocurrencies which function better than Bitcoin in every aspect - efficiency, speed, security. Many enforce scarcity and are non-programmatic, without being "boring".
> We know, without a doubt, that the only way to bring a valid bitcoin block into existence is by expending real energy in the real world.
That's not remotely true. Block lattice tech has been around for seven years now, utterly disproving that statement.
Bitcoin is using a huge amount of energy and it IS completely unnecessary to the enforcement of scarcity. Saying otherwise is a harmful lie - you've been duped.
> It emerged purely organically
Seriously? It "emerged" through a secretive pseudonym. No one can say whether it was even completely created by an individual, and not a secretive organization with ulterior motives.
Acting as if this so-call "organic" emergence puts it ahead of subsequent evolutions is bizarre, and I hope you can see that once it's pointed out. Would you claim the Wright brother's plane is more organic and therefore more long-lived as a design? Edison's lightbulb? How about version 1.0 of Windows? Is whale oil more organic and therefore better than fusion power?
Bitcoin will be around in a hundred years - in the museum of human folly. "People used to think the only way to enforce scarcity was by burning their planet to a fucking cinder, lol".
> other cryptocurrencies which function better than Bitcoin in every aspect
and
> Block lattice tech has been around for seven years now, utterly disproving that statement
are false statements of fact. To date, there have been no alternatives to bitcoin that are functioning better than bitcoin, because Bitcoin remains the most secure, most scarce digital asset. All other chains attempt to improve certain metrics at a cost of either decreasing decentralisation, increasing attack vectors/attack surface, or increasing the codebase complexity significantly.
> "People used to think the only way to enforce scarcity was by burning their planet to a fucking cinder, lol"
This is also an often debated point. The fact is that this is a multi-faceted discussion with a vast array of nuance and arguments to and fro. Yes, bitcoin is being mined on coal energy, also yes: Bitcoin is being used to reduce the amount of methane emissions.
Simply framing this as a "bitcoin uses energy" discussion and not a "bitcoin mining leads to carbon emissions" which is what the discussion actually should be is reason enough to scratch yourself on the head whether you are actively pushing biased arguments.
And yes, this discussion (Bitcoin mining leads to carbon emissions) is something most Bitcoiners have discussed and researched to a point where they can comfortably back this concept.
> [...] Many enforce scarcity and are non-programmatic, without being "boring".
The word "boring" has a very not obvious meaning here. Clearly there's nothing boring about Ethereum, since it's a high-stakes experiment involving computer science, economics and a lot of money. Ethereum is really "too interesting".
> [...] huge amount of energy [is] completely unnecessary to the enforcement of scarcity. Saying otherwise is a harmful lie - you've been duped.
Care to back that up?
To my knowledge, PoW offers an unambiguous measure of what block to bet on.
On the other hand, PoS is either subvertible (capable of being overthrown), or subjective (not objectively verifiable) when determining what block to bet on.
Maybe you are referring to a proof-of-something-else-entirely.
> Acting as if [Bitcoin's] so-call "organic" emergence puts it ahead of subsequent evolutions is bizarre
I totally agree.
Bitcoin's origin is atypical in that there weren't widely adopted cryptocurrencies before it.
Any subsequent cryptocurrency happened in the light of Bitcoin. But a hype train is a hype train, and there was one for Bitcoin. It just didn't enter with an ICO or a similar financing model delivering promises, which makes it seem less scammy.
Block Lattice crypto. It's neither PoW or PoS.
Here are the top two DDG results for "block lattice explained": https://medium.com/swlh/what-you-need-to-know-about-block-la... https://blog.metalpay.com/metalpay/understanding-block-latti...
Some hard numbers for Nano, as an example of block lattice tech:
> Nano uses 0.000112 kwh hours per transaction compared to Bitcoin’s 950 KWH
> The entire Nano network is so efficient that, operating at 7000tps, it can be powered by a single wind turbine
- https://cryptodaily.co.uk/2018/09/is-nano-really-the-most-ec...
Nano is feeless (with anti-spam mechanics), with all (minimal) costs per transaction borne by the "nodes" that keep the network running. Transactions are often confirmed in less than a second. This isn't bullshit or vaporware, it's running right now and you can try it yourself - https://www.trynano.io/
As far as security, no one has broken it in 7 years. While I'm not equipped to evaluate the maths, I hear block lattice is more "quantum resistant" than ECC.
Bitcoin outperforms Nano in sunk costs, hype / false info, and held bags. On every other objective and useful measure, it's not even remotely close.
The first link literally says: "What determines the voting power of a single representative? The amount of coins delegated to it by users.". Is this not PoS ?
While Nano uses a weighted-voting system (ORV) that can be compared to PoS, it differs from traditional PoS because:
* There is not one monolithic blockchain that requires leader selection (i.e. a staker or a miner) to extend
* Representatives do not create or produce shared blocks (groups of transactions)
* Each Nano account has its own blockchain that only the owner can modify (representatives can only modify their own blockchain)
* In Nano, a block is a single transaction (not a group of transactions). Transactions are evaluated individually and asynchronously
* Users can remotely re-delegate their voting weight to anyone at any time
* Anyone can be a representative
* No funds are staked or locked up
* Representatives do not earn transaction fees
* Representatives cannot reverse transactions that nodes have locally confirmed (due to block cementing).
Seem.
The most applicable things, those that people find useful and gain market share, will be used. How long they are used depends on other things.
Hopefully, Bitcoin will be seen for what it is in 10 or so years, an experiment gone awry, absorbing far too much time and talent, and in 100 years nobody will fathom what BTC was just as we don't remember the names of any 'spindle' manufacturers from 100 years ago.
Digital currency will surely exist.
Bitcoin is the Model T or the grey brick cellphone of crypto. On one hand, it's the proof of concept that proves the thing can work, and thus changes tech forever. But also, it won't be "the thing" because its tech is inferior to what comes next, and I think it's smarter to bet on the quality of the tech than anything else.
I'm not sure if Ethereum is the next thing, though it's a strong contender. I am nearly certain that bitcoin eventually will not be "the thing;" especially given that the whole point of most crypto is fungibility.
This is a gross mischaracterization of altcoins. Some try to provide the same functionality as Bitcoin but with greater simplicity, better scalability and privacy (Mimblewimble blockchains), and a fairer emission.
#notallblockchains!
The privacy-focused blockchains generally resemble Bitcoin + zero-knowledge:
UTXO-based, commitment schemes instead of a shared, public global state.
My God is this drivel what passes for "intelligent" pro-bitcoin writing? Nation states don't control the existence of electricity, nation states also don't control the existence of bitcoin, therefore bitcoin is as important and fundamental as electricity. Gotcha.
The thesis of an essay or writing should be like a power chord or ballad-it should be directly addressed early, often, and the more clearly expressed the better.
This is still true.
Artificial scarcity is artificial.
The only way to enforce artificial scarcity is through laws / legal systems and DRM.
Digital scarcity doesn't exist. If you can copy one time, it costs nothing to copy a million times more. But that breaks the entire system, so it has to be artificially blocked.
> what is the alternative to a short copyright term to motivate
Scarcity, and money, doesn't motivate anyone. People need money not because they want to get rich but because money is mandatory to buy food and pay rent. There are more than 73 million users on github (https://octoverse.github.com/). How many of them do you think went in for the money ? How many actually received any ?
Copyright is not a motivator to create, quite the contrary: it's a motivator to milk as much juice as possible from a specific content, and to prevent the creation of content too close to it in fear it might jeopardize the revenue stream. Copyright has historically prevented the dissemination of knowledge, and the absence of copyright has actually lead to a better, wider circulation of information (and arguably a better educated population): https://archive.ph/ybifz
> non taxpayer funded
Here is the issue: what is wrong with taxes ? If a private person makes money, especially off of the work of others, why is it good to not share it with the population ? What is inherently good in a system that allows those who already own to be safe, but those who don't have to rely on individualistic schemes to hope survive ? Historically, high taxes have led to a higher quality of life for most, specifically because it is better redistributed. There is no problem with taxes.
I will simply have to disagree. Obviously, I cannot prove everyone working in movie studios or newsrooms or software companies will answer that money does not motivate them, but I highly suspect people are working 18 hour days or traveling to warzones or poring through legal filings at least partially because it will help them feed/shelter themselves.
Interesting article, but not sure how that would apply in entertainment media markets.
> Here is the issue: what is wrong with taxes ?
Nothing, let us see more taxpayer funded R&D in the public domain. But I think the problems of copyright are mostly due to excessive terms. Completely getting rid of them means getting rid of big budget movies and whatnot, or funding them with taxpayer money (which I am not a proponent of).
Alternatively, a contract.
Like $100M movies or software. Or $10M+ journalism ventures. Lawyers, logistics for travel to warzones, salaries, etc.
The author's point is that Bitcoin does not require any of those.
Bitcoin's artificial scarcity only has value to those who value it.
Can a government tax you for Bitcoin-based transactions (for example: sales tax / VAT) or for newly-minted Bitcoin you mine?
If someone steals Bitcoin from you (perhaps through malware that silently redirects a transaction) or if someone steals your Bitcoin "wallet", what recourse do you have?
(Virtual security of cryptography, Bitcoin, etc. does not always hold up in the real-world: https://xkcd.com/538/ )
I disagree. Bitcoin DOES need real world legal systems built around transactions to be useful in the real world:
People have out-of-band trust relationships in real life which reduce the likelihood of malice. Bitcoin-style anonymous identities undermine trust relationships and are not needed for legitimate (not illegal) transactions.
Real life legal systems encourage good behaviors. If you have a dispute with someone, you can sue them. Bitcoin lacks these protections. If someone steals your Bitcoins, how do you get it back? How do you dispute fraudulent Bitcoin transactions?
And what do you mean by "Bitcoin lacks these protections"? Bitcoin does not somehow preclude you from using the legal system. You can still sue people or report thefts...
Widespread use by criminals does not mean that it is good for society at large. If Bitcoin is the preferred payment technology for ransoms, illegal drugs, and CSAM then maybe it needs to be regulated?
>> You can still sue people or report thefts...
How do you sue a Bitcoin address?
Without laws or DRM, there is no digital scarcity.
The article itself states: "Digital goods aren’t naturally scarce. The marginal cost to replicate them is practically zero, as anyone who ever copy-and-pasted something can attest to. For this reason, digital scarcity used to be an oxymoron. If something is digital, it is just information, and information can be easily copied."
Bitcoin is neither legally mandated nor is it a universally enforceable DRM scheme unless you choose to use it as one. It only has value if you value it. If I do not use Bitcoin because I think it is bad for the environment and bad for society, it does not impose any artificial restrictions on me.
Is Bitcoin then a form of self-imposed DRM? Perhaps.
Can Bitcoin be useful for something? Yeah, maybe, I guess. Is it Digital Scarcity? Probably not.
How the accounting is done is really just an arbitrary background aspect of a functioning currency.
Don't take my word for it --- just ask any crypto scammer who doesn't know or care about the technical details of blockchain.
If the Bitcoin camp is to be suspect of bias, so is the other side.
This is mining sites that we know about, because they are public companies in the US. I doubt that the stealthy, privately-owned miners in Kazakhstan are using cleaner sources.
I dont think that is what you meant to say.
You were right, though.
The article repeatedly says things that are flat out false without any attempt at qualification or justification.
The first is assertion that scarcity by authority is only virtual scarcity, not real scarcity while somehow glossing over the fact that this type of scarcity is incredibly common in the real world. Simultaneously, the scarcity of cryptocurrency is somehow not due to authority because that authority is decentralized...
> As history shows and this example illustrates, planning an economy—virtual or not—is an impossible task. Every interference, no matter how benign the central planners believe it to be, will have unintended consequences and side effects that will beget more interference
This comment seems to categorically rules out all attempts to manage and regulate markets by throwing around the loaded term "planned economy“ and vaguely referencing "history" as a source. History actually shows us that economic planning and market regulation can have mixed results, but some of those results are clearly successes.
> Linden Lab has the power to break the rules and interfere as they see fit.
The "interference" that is then described is Linden Lab trying to follow the law by collecting taxes, eliminating gambling, and following banking regulations.
> One of the best examples for a flourishing economy (thanks to little intervention) is Eve Online, an MMORPG space simulation.
CCP (the makers of Eve Online) did have a carefully considered approach to economic interventions, but their interventions were not small. The biggest is CCP's ban on RMT (real money transactions) in an attempt limit free and bidirectional exchangeable with external economies. Any games that attempts to control RMT in such a fashion is engaged in a pretty extreme level of "economic intervention". Of course this is done to avoid going the type of legal liabilities that faced second life due to Linden Dollars becoming more like a real currency.
CCP also has a high level of control over the inputs and outputs to the Eve economy and manage them to keep that economy stable(ish) and the game fun and balanced to play. For a while, CCP employed economists to help understand gow CCP's interventions would affect their economy.
> It is simple, really: if a world is controlled and instantiated by a single entity, it is prone to manipulation. Sooner or later, it will cease to exist. And with it, everything that existed inside it.
How many cryotocurrencies have died in the last several years? Decentralization doesn't guarantee longevity. Meanwhile, WOW and Eve have both extisted longer than bitcoin. This is yet more unsupported propagandistic drivel.
I would argue the opposite. A stable economy, whether in-game or not, requires some level of central regulation and planning.
> The difference between in-game money and fiat money is in scale, not in nature. Both are virtual: simulations that are untethered from reality.
Wow, the tortuous argument that bitcoin is somehow "more tethered to reality" than the dollar isn't even worth recounting.
This is less of a "bridge" between skeptics and hodlers and more of a piece of libertarian propaganda. If you want a bridge, find an author that acknowledges that some regulation is necessary for a functioning economy.
https://www.npr.org/sections/money/2011/02/15/131430755/a-ch...
We've heard all the whataboutist arguments about Christmas lights and bankers' data centers and whatever. Yes, we should save energy there too! But when there's a novel form of energy waste that's ballooned past a mid-size European country's annual consumption within a decade and provides a service that's largely philosophical ("digital scarcity"), then that seems like something we should address immediately.
The El Salvador experiment suggests that Bitcoin’s appeal in the third world is very limited, and the use cases are better addressed by more efficient payment technologies.
(Btw I’m not going to click on your random Twitter or YouTube link. Why do crypto people assume that a reasonable debate involves dumping social media links without explanation.)
In spite of the mining industry’s half-hearted attempts at greenwashing what they do, the largest mining operations are coal and natural gas.
If Bitcoin stopped tomorrow, nobody other than speculators would notice it except as a funny story in the news.
The methane emission thing is still largely theoretical. In the real world, Bitcoin is mined using particularly filthy coal in Kazakhstan, as well as natural gas in the USA - https://edition.cnn.com/2022/02/26/investing/bitcoin-mining-...
There's always an excuse or a "well just around the corner it'll be better", but the fact is it's actually terrible and this is pure distraction.
Yes, I know, if you can mine bitcoin and release CO2 instead of releasing methane directly, that's a small win in climate terms, roughly equivalent to just flaring the gas, but with a profit motive. Let me know when that accounts for even a handful of percentage points of the total hashrate, let alone the majority.
The research you referenced is sourced eventually to Alex de Vries, a person that has for years built his entire career image after "exposing Bitcoin's energy use". That fact that he works for the Dutch central bank should ring an alarm bell honestly.
Note that practically all research critical of Bitcoin's emissions are directly sourced to Alex de Vries's digiconomist website.
The thing is, I don't need to listen to him - there's tons of info out there about Bitcoin's presence in Kazakhstan from all sorts of sources. For instance here in New Scientist:
https://www.newscientist.com/article/2284222-coal-powered-bi...
Reuters reporting on energy problems in Kazakhstan due to mining there -
https://www.reuters.com/business/energy/crypto-boom-strains-...
About 20% of BTC hashrate seems to be there, and the energy there is 90% coal and gas. Then we have things like fossil fuel plants being brought out of retirement for Bitcoin mining in the US - https://www.voanews.com/a/bitcoin-mining-power-plant/6273552...
Yes, I know that stopping methane escapes is definitely a good thing. There's no indication that this is happening on any scale, and the stories all talk about "enormous potential", and possibilities and projections. I hope it does become carbon neutral, that would be one less problem with it, but it's not there yet and handwaving away problems because you have a potential solution is disingenuous.
https://www.lynalden.com/bitcoin-energy/
"For those reasons, whether Bitcoin continues to be successful or fails in terms of broader adoption, there’s no risk of the network using too much energy in the grand scheme of things. By any metric, it’s a rounding error as far as global consumption energy is concerned, with a sizeable chunk of its energy usage consisting of sustainable or otherwise wasted energy.
People focusing heavily on the environmental “E” side of ESG as it relates to Bitcoin often overlook the “SG” component- social and governance. At the end of the day, I consider Bitcoin to be one of the most ESG assets around, just not in the corporate sanitised conception that the term ESG is often used in."
You have to be kidding about SG - it's the most toxic community on the planet, its governance is absent, and the whole ecosystem is rife with fraud and crime. That's hi-fucking-larious.
> I'm not attacking Alex de Vries as a person; just showing how his position makes him suspect of bias.
That's the very definition of an ad-hominem attack, attacking the standing of the speaker, not the speech.
Such players could come to a consensus that the scarcity rules don't work for them, and may do so in future if, for instance, they decide that block rewards are too low. Sure, it would be a hard fork, but if the major players decided to go with it, the small players would be dragged along, or they could cling on to "Bitcoin classic" and see a major drop in the value of their coins.
The ending line here is pure grandstanding-
> (BTC) transcends all other monies that came before it, by introducing something that cannot be improved upon further, something that did not and can not exist in the physical world: absolute limitation via zero terminal inflation.
BTC scarcity is not some emergent property of the universe, it is a property of a protocol. A protocol controlled by people, some of whom have disproportionate amounts of power over the system. You have exchanged trust in a government for trust in a shadowy and unnaccoutable group of loosely connected wealthy folks. Best of luck with that.
The scenario you are describing - while possible in principle - is unlikely. Stakeholders understand that scarcity and change-resistance is Bitcoin's very definition. Take that away and there is no value left, Bitcoin becoming another malleable shitcoin.
Was it? Did you get to vote on that? Or was it decided by a handful of pools and large players?
> The scenario you are describing - while possible in principle - is unlikely.
Whether it's likely or not is beside the point. It's possible in theory, therefore (and this is my main point here) the digital scarcity of bitcoin is not some emergent mathematical property of the universe, it's a social phenomenon.
However unlikely, it only takes a critical mass of people to change their minds and it can be changed. The article talks about this property as if it is something akin to a hard universal property or mathematical axiom, but it's not, it's a very human property and very malleable as a result.
Correct.
> Was it? Did you get to vote on that? Or was it decided by a handful of pools and large players?
Yes, I got to vote on that with the economic full nodes I ran.
That said bitcoiners are somewhat resistant to extreme fractional reserve because of the strong "not your keys, not your coins" ethos.
Anyone can easily create their own fully functional variant --- even Kim Kardashian can do it.
Simply being scarce doesn't make something valuable. The real facet that makes money both scarce and valuable is *consensus*. Allowing anyone to create their own is an absurd and self defeating way to reach a *consensus*.
The point is that it hasn't been cloned, since cloning it is impossible. Nothing will reproduce the almost miraculous circumstances of its growth & bootstrapping from obscurity.
No? How about Ethereum? It started as a Bitcoin clone with added features and is now on track to surpass it.
There are thousands of similar Bitcoin clones out there. And more are undoubtedly on the way.
The most miraculous thing is the number of celebrities, politicians and corporations who have thus far resisted the urge to create and promote their own.
China has successfully limited Bitcoin with its ban. Bitcoin's value (its exchange rate with other currencies) is affected by China limiting its citizens' ability to host a node and exchange or hold Bitcoin the Chinese sovereign territory.
The author is correct that there isn't a centralized entity controlling Bitcoin as with a central bank and fiat currency, but in this case there's still a group of ISPs and governments that together can influence Bitcoin "printing" in many ways.
Mankind has spent its entire existence struggling with scarcity, hoping to one day find salvation and move past scarcity.
Now, thanks to all our technological advances, a post-scarcity world is finally within view, and people want to artificially reintroduce it?
Why would we want to regress?
Not against the entirely of your comment, but in what sense are we moving toward a post-scarcity world? There is a number of humans on the planet, with a limited number of resources, a limit which will be/has been reached at one point or another, as we cannot create new things from nothing.
Scarcity is built-in in the fabrics of the universe, and I don't see how we could be moving towards something that doesn't have scarcity.
just take the hexagonal twitter NFT profile pictures on twitter. Are hexagons in short supply? Pictures of monkeys? So why can't everyone have one? Because the entire value proposition is other people not having one for no rational reason.
It does seem like the only explanation that makes sense is ideological fervor.
I'd prefer if our post-scarcity future didn't get messed up thanks to ideologues.
Because of the allegory of the cave. We animals have spent a billion years struggling to survive in the face of cruel scarcity, we've built all our systems and societies around the notion of managing scarcity and allocating scarce resources, and now that we're faced with a legitimate instance of post-scarcity our animal brains reject it.
The only unique attribute of BTC amongst blockchains is its wholly manufactured failure. Of course, such a thing is extremely useful to parties that desperately do not want the promise of functional blockchains to succeed.
https://old.reddit.com/r/btc/comments/7fsbw5/divorcing_the_s...
By contrast, holdings connected to the real economy are easier to reason about, as there is evidence all around as to how well things are doing.
In other words, to be a real, valuable currency a *consensus* needs to be reached on it's use. Bitcoin lacks any mechanism for reaching a consensus --- on it's utility or it's value.
This is, at the very least, debatable: https://www.onionfutures.com/essays/turning-off-bitcoins-inf...
More than that, the supply is essentially infinite right now. You can already see this in the boom and bust cycles where AOSS (any old s*tcoin) will rise and fall in tandem - this indicates that any large moves draw speculators to those tokens they subjectively view as less or more expensive.
The biggest issue with this ultimately is that for Bitcoin to succeed, civilisation has to fail. You can't tax an asset you can't see and account for transparently (pseudonymous wallets), so you can't have electricity networks, heating networks, schools, police, military, welfare, public roads, running water, sewage, public facilities like libraries/museums, bursaries, national parks, ownership by right of any physical property whatsoever (there'd be no way to enforce physical ownership without public bodies, so essentially all ownership is decided moment-to-moment at the end of a gun last-of-us-style), or Bitcoin itself (as the public infrastructure supporting the network would not be maintained).
If these are taken away for any reason, the result would be indistinguishable from shitcoins.
If network security cannot be maintained without sufficient inflation, then it surely it doesn't matter how philosophically wedded some users are to the 21m cap. It would lead to a hard fork, with two resulting coins:
1. An unchanged 'Capped-supply Bitcoin' 2. A new 'Permanent-subsidy Bitcoin'
Given a total breakdown in network security of the 'Capped-supply Bitcoin' (and its associated collapse in value), we would expect users to deem the, still secure and therefore higher value, 'Permanent-subsidy Bitcoin' to be the 'true' Bitcoin going forward, no?
A fork is possible if fees become an issue, participants will then vote with hash power, nodes, and value.