And so will AC systems in local banks.
The problem is not that something consumes energy if there are people willing to pay for that energy. The problem is how we generate electricity. It's getting better, but it has nothing to do with bitcoin.
The problem is not that something consumes energy if there are people willing to pay for that energy. The problem is how we generate electricity. It's getting better, but it has nothing to do with bitcoin.
The mathematics behind the individual transactions and ledger maintenance are relatively simple. Getting computers to do this part requires almost no effort. It's the deliberate 'find a needle in a haystack' part of the protocol (which is there to ratelimit the creation of bitcoins) that wastes all of the energy.
The fact that this needle-finding task is deliberately difficult, wasteful and time-consuming is the horrific part.
That's something which is actually handled fine in fiat, believe it or not.
Nor is Bitcoin "low cost": Even with the price in the dumps recently a Bitcoin transaction still averages about $10 per transaction.
Nor can Bitcoin feasibly handle international commerce, given that it's still capped in theory to 7 transactions per second, and in practice to 2-3 transactions per second, and this total capacity also has to support non-remittance transfers such as the normal exchange hackings (like BTER today) and SatoshiDice (which can take up about half of all Bitcoin protocol capacity on some days).
Not if you're Wikileaks. Bitcoin was (probably) built to solve the kind of problems they had getting money transferred to them. there's a cost associated with a low-trust network.
How does this make it not low cost? Transferring that $10 still only costs $.02
>capped in theory to 7 transactions per second
Not 7 transactions but 7 settlements per second, which clear in under 60 minutes. You can have as many binding transactions per second as you want off the chain.
If you're willing to engage in transactions off-chain then you might as well use PayPal or other fiat. The blockchain and the protocol surrounding its maintenance is central to Bitcoin and its philosophy, it's not merely some 'nice-to-have' feature that should be jettisoned as soon as it becomes inconvenient.
After all, the blockchain is the one and only authoritative Bitcoin ledger, everything else in Bitcoin is an IOU, no matter how sensible it might seem, which is why Bitcoin itself will reject a transaction if it's not included into a mined block in time.
And either way, way to ignore the in-practice 2-3 transaction per second limit.
Assuming max TPS rate of 3tps, a 10-minute block will contain 3 * 60 * 10 = 1800 transactions. Each block generates 25btc, which is equivalent $6125 at the current $245 price.
Each transaction therefore costs $6125 / 1800 = $3.40.
Of this only a small amount is paid for the by the person who creates the transaction, the rest of paid for by those who hold Bitcoin.
I always find it ironic that the illusion of low fees per transaction in Bitcoin is subsidized by the ongoing inflation of the money supply. Apparently inflation is acceptable when it helps evangelize the product you're trying to sell, but it's not acceptable monetary policy in any other situation.
How? Are we comparing transaction fees?
The issue with bitcoin when it comes to cost is that unlike traditional centralized systems, cheaper energy or more efficient computers don't translate to making it cheaper to run the network. What happens is that miners get to afford more hashes per second and the overall hashrate goes up, with the mining difficulty also going up to compensate, making mining even more wasteful.
The alternative is to get by without it. There are fiat currencies, proof of stake and much more.
Capitalism of any kind always seeks to exploit externalities. The cost of producing electricity is currently not reflective of the true future cost of the pollution. That is the externality. Every metric in a capitalistic system is designed to reward the exploitation of externalities.
You could look at a space heater and say: wow, it just wastes all this electricity, deliberately causing resistive elements to heat up. Well, of course, the heat is intended. With bitcoins, the extra calculations are a part of what makes everything work.
It goes on and on. Most of that stuff, bitcoin doesn't have to do at all.
In essence, Bitcoin's harm to the ecosystem is almost directly proportional to Bitcoin price.
Just imagine everyone using this more efficient hardware to save money on electricity, not increasing the mining difficulty. Eventually you'll have the risk of a single entity (e.g. a government organization) just buying enough hardware to have more than 50% of the hashing power, taking over the whole blockchain.
The second argument is something that is independent from the energy problem. The danger always exists, that some entity is taking over the blockchain.
That's just the creation side. On the use side, there are broadly different costs in using and maintaining gold-based, crypto-based and fiat-based money systems. I would like to see others way in on this.
You can essentially include the entirety of operations of the bank, and the lifestyle of the people employed by the bank. There are literally millions and millions of people throughout the world who do nothing more than manage and monitor a system that moves numbers around and deals with proxy derivatives like bills and coins.
Not that bitcoin is a panacea -- personally it seems completely untenable -- but if we want to talk waste, the current regime is extraordinarily wasteful.
Its a bit pedantic, but please don't say bitcoin when you mean cryptocurrency, as bitcoin is a pretty bad one.
And that's exactly the whole point, and is the very reason it's working.
> a pyramid scheme
Then every other successful investment is a pyramid scheme. Gold is a pyramid scheme! Storing food for catastrophes is a pyramid scheme! Paintings are a pyramid scheme!
What makes bitcoin into kind of a pyramid scheme is that right now a big part of the reward for miners is the 25 bitcoin you get from mining a block. Only a very small fraction comes from the transaction fees. The only way to keep bitcoin stable is by having a constant supply of new users buying into bitcoin by acquiring those fresh bitcoins from the miners.