165 karma · joined February 22, 2019
I haven't personally done a deep dive on Satoshi's intentions probably for the specific reason I've always failed to see why former intentions or aspirations for technologies, even by their own creators would have any relevance towards their future use cases. If Edison had said light bulbs were for heating should we then oppose them being mostly adopted and optimized for lighting?
As a very passive but very interested stakeholder at the time of the block size wars it really felt to me there was heavy politicking and various degrees of !@#$ going on from all sides. The amount of viciousness certainly didn't surprise me given the immense magnitude of the stakes involved with potentially replacing a market in the hundreds of trillions of dollars.
I'm not sure I follow your last point. Stores of value certainly don't have to be mediums of exchange to build market cap (whereas the converse is true). That's true of the great majority of monetary wealth in the world. Most of fiat currency is held in treasury bond form (not a medium of exchange), real estate is heavily monetized and stocks to a degree. The actual dominant medium of exchange today is cash mostly in bank deposit form and it's a tiny fraction of that market which mostly sits on longer term horizons in assets that perform the function of storing value better. Are you saying a government might void converting stores of value to mediums of exchange? Or cryptocurrency specifically? In essence that they would make those assets illegal altogether? If they did it's true they would become worthless, at least for that jurisdiction, but some of the market obviously disagrees with that assumption, and landmark events like the bitcoin etfs continue to point the other way.
Beyond that I don't see how it matters what something was designed to do or what early adopters personally used it for or thought it was meant to be used for. The only relevance for a technology is what it's actually adopted for over time and the total addressable market cap for a store of value being 100x + of that of a medium of exchange, it makes perfect sense to me that that's the feature the market converged to by far as reflected amongst other things by the relative prices between current btc and bch...
What amuses me a bit is how shocked it can seem to people for them to “sit” on 80 bn dollars. It’s literally what they’re supposed to be doing! And no one can imagine they’re actually doing it. I don’t know. I like to think that’s what I’d do if I said that’s what I was doing… I feel like I would. But apparently we now think when someone is entrusted with a pile of money to keep as such they’d be irrational not to risk their customer funds and yolo into mismatching risk to try and pick up some yield… when did that become the expected norm?
I don’t know what the truth is obviously for sure but this story is extremely possible and plausible. It doesn’t mean they were particularly good traders. It means if true basically they were disciplined and didn’t trade at all and are now benefitting from massive upside on their set up resulting from monetary policy and regulatory conditions driving their popularity.
As chips commoditize and energy trends towards 100% of all costs, miners will step into these situations exclusively.
As far as your claim that bitcoin is useless that's a personal judgement. My personal judgement is that reintroducing sound fixed supply censorship resistant money to the world is of enormous benefit. But that's beyond the scope here. I don't think it's constructive to make judgements about what people value and chose to expend resources towards. If you have a problem with externalities then have a debate about that. But who are we to judge if someone wants to heat their pool? If they do so through carbon emissions then consider taxing that. The sustainability of the energy production is your issue really, not the energy use.
I don't personally think you should be making moral judgements about energy use though. Let the market decide what's a good use of energy. If you have a carbon problem, tax / regulate that, PoW won't care. It will adjust through difficulty adjustments.
But if you are worried about PoW boiling the oceans if left unchecked, the numbers should comfort you it's at worst going to tap mostly into wasted energy / mostly renewable and probably not have a noticeable impact even extrapolated to a peak outcome (and probably even be a net positive).
- At current levels, bitcoin uses very roughly 0.1% of global electricity but electricity only represents 25% of fossil fuels emissions so current PoW contribution to global emissions = 0.025%, ie a rounding error. This issue is currently a total red herring. Now let's project into the future.
- bitcoin total addressable market cap if it took over the entire global monetary world (full global monetary premium): ~ 250tn or 300x from here implying a worst case outcome of 7.5% of global emissions, IF this happened TODAY and hashpower linearly tracked price. This is impossible off the bat because building out that infrastructure would take at least a decade. But more importantly it will take a decade or two for price to get there, by which time...
- The block subsidy will have gotten cut by ~ 10 (three halving cycles). Transaction fees might grow of course so let's say 5x lower which gets us back to 1.5% of global emissions.
- Add to that the following:
- 30% of CURRENT electricity production is stranded / wasted. All terminal bitcoin energy usage needs to do is tap into 5% of that to be emissions neutral. And it's heavily skewed towards tapping into that exclusively as that's the cheapest source and PoW is location neutral.
- the proof of work energy mix skews towards not only wasted / stranded but renewable which is trending towards being the cheapest form of energy.
- green power production is on an exponential adoption curve and enough sunlight hits the earth to power humanity for a year. Clean energy is there in amounts dwarfing societal needs, it's just a matter of harnessing it. This doesn't even include geothermal or nuclear.
- At an even higher level, if you got to this point, you would have replaced all the fiat systems in the world thereby: - eliminating the energy spent on maintaining the fiat system which is easily more than 1.5% of global emissions - flipping the world into a hard money world that is no longer incentivized to consume at all costs (read misallocate capital) ergo hugely reducing conspicuous consumption / GDP growth at all costs which is arguably the biggest driver of unnecessary emissions
- This final line of thought would have you conclude flipping to PoW would be emissions negative in the long run, but you don't really need to go there though, the energy numbers alone make this at best a chronically misunderstood narrative.
Or you can stay here on earth, go scuba diving and experience the exact same weightlessness... :)
I think I remember hearing a similar stat on the ken burns prohibition doc. I didn’t quite understand why it was supposed to be that much though. 9 gallons of liquor is 36 liters is roughly 100 bottles of wine equivalent per year so less than a third of a bottle of wine a day which is what 1 or 2 glasses per meal equivalent? So the question then is are people drinking liquor drinking wine on top plus cider apparently? Or is it just a lot because that’s the average and plenty of people aren’t drinking much at or at all and that makes for the right tail of the distribution to be really drinking a lot?
edit: quick google -> and here it is :)
It'd be interesting to see though if you opened a lightning channel with an exchange and transferred funds back and forth to yourself millions of times. Seems like that would create infinite spam and flood these reporting requirements.
You're describing the best medium of exchange, which you know today generally as base money of fiat currencies (cash). Acting as a medium of exchange is a property money can have but absolutely does not require to be used for its principal and only use which is to store value. Why is that its only function? Because the only way to use a medium of exchange is to find in turn someone who wants to store wealth himself. Absent that market participant your medium of exchange becomes worthless.
Acting as a medium of exchange is a transitory instant blip in the life of an asset that lives for the sole actual purpose of storing wealth.
Now if the average redemption horizon of monetary wealth was short as you seem to imply, then in effect all monetary assets would be used frequently as mediums of exchange and their capacity to preserve value over meaningful periods of time would be less of a consideration. Becoming accepted for payments everywhere would become the most important feature they could have. But this is absolutely not the case. The average redemption horizon of monetary wealth today is very long.
Some 200tn+ of monetary wealth sits today in various monetary instruments (100tn+ in fiat treasuries equivalent, real estate, 10tn in gold etc) that are absolutely never used as mediums of exchange. But they serve monetary assets' main and only role of preserving wealth through time, generally for long periods of time. Even the bulk of cash generally sits dormant as medium to long term investments by people holding onto the most liquid of reserve assets in case of crisis / emergency, very rarely to be used transactionally.
Whenever those investors need some transactional money, they simply then clip off a little bit of their monetary assets to buy whatever medium of exchange is en vogue to go about their daily spending habits. The rest sits idle to store wealth for as long as needed. And on that front, finding the hardest monetary asset you can find is your driving concern, and a digital new entrant like bitcoin with a hard cap is an extremely interesting alternative to other options available to this point which all have material drawbacks to that main goal, especially fiat currencies which get inflated by their central banks at a bare minimum of 25% per decade (but these days more like 15%+ per year).
And yeah obviously we desperately need a decent test like three months ago.
A test needs to be materially more accurate than the odds of having the disease to be worth anything.
Classic thought experiment: if 0.0001% of the population has a disease and a test is 99% effective and you test positive, what are the odds you have the disease? Answer: 1%.
Complimentary thought experiment: if an expensive preventive drug was available in limited supply (for 0.1% of the population only) and the earlier you took it the more preventive it was should you give it blindly to as many positives as you can? Probably not because 99% of that would be going to waste. And you would run out of drugs to cover the actual sick. Only 10% of the sick would end up actually getting the drugs.