Those bargain rates are possible largely because the Basin’s five dams generate around six times what the region can use locally. Much of the surplus is exported, at premium prices, to outside buyers such as Puget Sound Energy, and those outside sales subsidize local rates.
But if the utilities are selling more of their power to local Bitcoin miners, they’re exporting less power at those premium prices, which makes it harder to keep local rates low. Further, because much of the surplus is currently committed in long-term contracts, supplying miners with all the megawatts they want might require the utilities do something virtually unprecedented: buy power on the open market, at prices far above what locals have come to expect.
Solution: pass a law to charge miners export prices. It’s not as though Bitcoin mining helps the local economy, so you either return revenues to pre-mining levels, or drive the leeches out. Either outcome is equivalent.
Why is the solution to everything "pass a law"? there is an ocean of possible solutions to this problem yet people somehow always jump to "pass more laws" before other options are considered. I find that rather weird.
These are public utilities, so changing their rate structures so significantly could well require legal changes. And if the solution is outside the utility, then it definitely requires legal changes, as then we're in to the realm of business regulation, and American business regulation is generally of the style of "everything is allowed except for these specifically forbidden things that have proven to be bad".
Of course, if you'd like to propose some less intrusive solution I'm sure both we and the people of Central Washington would be all ears.
Also, unless there is a law compelling them to charge miners the same prices, a new law is not needed. The utility can just implement it as a price policy.
This is like asking why the solution to bad software is to commit more code.
It's because the way to fix a bad law is to pass another law. Otherwise you're saying we should keep the bad laws we have and work around it some other way.
Sometimes fixing the symptoms actually is better, but it's not surprising when people suggest changing the code.
Prices aren't being outright subsidized. The other states who don't have the foresight of creating enough power for their own citizens have to pay premium prices to the states that properly planned infrastructure. The situation is being taken advantage of by miners who can exploit low rates that couldn't realistically be planned for when power production infrastructure was being created.
The other states did plan ahead by getting long-term contracts for power, probably makes more sense to buy excess hydro-power than building a coal fired plant locally.
Now they find they can't supply export power and local power because their crystal ball didn't predict there would be a power hungry technology moving in.
There might be a challenge in wording the law properly. Miners might claim they are “content creators” or “scientific labs” to avoid the law, leading to protracted litigation.
A-8: Yes, when a taxpayer successfully “mines” virtual currency, the fair market value of the virtual currency as of the date of receipt is includible in gross income. (...)
A-9: If a taxpayer’s “mining” of virtual currency constitutes a trade or business, and the “mining” activity is not undertaken by the taxpayer as an employee, the net earnings from self-employment (generally, gross income derived from carrying on a trade or business less allowable deductions) resulting from those activities constitute self-employment income and are subject to the self-employment tax.
If you are going to forego energy neutrality, why stop with the bitcoin miners? Could they charge controversial businesses like adult entertainment more as well?
Since they sell excess above local prices, all local usage drives up local prices.
Energy neutrality? Every utility has differential industrial and residential and commercial pricing, and energy discounts are super common for localities to lure development. China is the extreme end, where some places actually get free power, but even here there's all kinds of discounts our special rates. What do you think Amazon is trying to get cities to grovel for? Special tax discounts, energy rates, whatever they can get.
As far as I know differential pricing is based on classes like industrial vs commercial and applied fairly. Incentives for development are super common of course, and controversial in themselves.
This would be different though, targeting a business to pay more than other commercial enterprises. That's a targeted disincentive, and if not structured generically and applied fairly it's bad policy. Seems hardly different than Comcast deliberately slowing Netflix down, not to extract revenue, but to put them out of business.
It's just the opposite of targeting a business to pay less than other enterprises, which happens all the times as development incentives. I don't think it's any worse policy than that, it's just the flipside.
In this case, due to the fact that by taking the town's total usage up, they raise the costs for everyone in the town, you could also just see as internalizing an externality.
Subsidising energy prices for local consumers based on export revenues is widely practiced but is bad policy. The utilities should charge market rates for consumption and cut local rate-payers a cheque annually using a scheme that encourages energy saving practices.
It's not necessarily bad policy it's just policy. The local residents are also the ones that generally live with the consequences and externalities of the local power generation industry.
Low-cosumption residents are then forced to live with the externalities of the generation infrastructure as well as the externalities of the behaviour induced by the electricity subsidy while benefiting the least from the subsidy - it seems like a pretty bad policy.
I wouldn't be fussy about the rebate mechanism but funding a government based on energy prices can also be a tricky business - but even a poorly managed local government subsidised by energy exports is far better than local energy consumption subsidised by energy exports.
Crypro-miners are taking advantage of the same asymmetries that the FAANG data centers enjoy. They were built in those same areas of WA/OR for the same reasons. They just don’t use as much power as mining rigs...
Transmitting power over long distances is capital-intensive. A gigawatt transmission line costs on the order of $2M / mile. So if you put your gigawatt factory 500 miles away from the generator, the utility has to spend $1B on installing wires. They price lower near the plant to reflect their costs, and encourage energy-intensive industries to locate nearby.
> But backers insist that a local mining sector, if allowed to grow, will attract other ancillary services, such as software development, and ultimately provide the Basin with some of the tech-fueled prosperity that Seattle has enjoyed.
Wow. Any municipality who falls for this crock of shit would be crazy.
It sounds good to people who don’t understand how mining works.
Since this argument has been made however, they could make local prices contingent on number of jobs. If you consume x power employing less than y local employees, pay the export rate.
In my limited understanding, that sounds like a highly unusual type of regulation by US standards. Are there any other practices/industries regulated in similar ways?
I’m not sure, though not allowing “crypto mining” specifically is also pretty unusual.
In this way, they can protect their power industry and still remain attractive to other businesses who might bring other benefits to the area without having to redefine who is and isn’t allowed.
Indeed, my first thought for how to exploit is already covered in the article:
> In other cases, utility crews responding to unusual spikes in power usage have found racks of remotely controlled servers whirring away in empty apartments.
House and apartment rental and sale prices are lower than the Seattle area as well. You could rent a 1 bedroom apartment as a "weekend getaway studio with attached server room".
One alternative that would drive their intentions is that Bitcoin miners must be Washington State businesses, registered in state and with offices in-state. There are work-arounds for this, but it's another hurdle for foreign groups to overcome.
Well, aren't there laws that regulate the usage of buildings? Where I live (EU) you definitely cannot host mining racks in living premises. Just to get the higher power links you get questions asked.
My thoughts too. In the UK you would have to apply to the local authority for 'change of use' planning consent. Even changing between different classes of commercial use requires consent. This gets posted on the gate outside and in the local press. Anyone is free to write in and make their point known. Finally an official makes a recommendation to a committee of elected representatives at an open meeting.
If approved you now have a commercially rated site and have to pay 'business rates' (local tax based on the value of the property and the use it is put to) to the local authority. Sounds like there is a lot of opportunity to charge potential miners...
I think even commercial electric rates in the UK are around £0.17 kwh, so mining is not likely to trouble us any time soon!
And that’s ridiculous. Me working on my computer in my house paying the asking rate for the electricity is really none of the business of my neighbors. It isn’t like someone is running a hair salon or a day care center where there could be traffic/disruption concerns.
You don’t think the risk of fire and/or localized grid overload from drawing much more power than designed for a residential property is of no concern to the neighbors?
What is ridiculous is reducing things to the absurd, of you can work on a computer in your house without planning permission! A remote worker can work from home. You just can't run a server farm, or have other people coming round to work there. The point is a normal home may have an office, and using that office to work is no different to using it for your household admin.
A normal home does not have a server room however.
I don’t know, but the main point of zoning laws is to prevent disturbances (like you can’t run a shop or a bar in a residential building for obvious noise and crowd concerns), but I don’t see why mining would be problematic. I’d rather have miners in the building rather than the drug-dealing kids that attract police every other week or so. Mining is very peaceful, you just install a piece of hardware and let it run (no noise, no damage, etc).
But overall a building wall is pretty effective at shielding from that kind of noise.
I’d very much prefer a quiet white noise from the racks in the above unit than someone arguing at 3am or a stupid toddler screaming. You can easily tune out “stable” noise like the one produced by fans, but you can’t for irregular noise like people talking or someone dropping heavy stuff at night.
The point of zoning laws is different depending on whom you ask. Those most strongly in favor of mixed-use urbanism might even say there's no point. But in the broadest sense, they're supposed to prevent conflicts between land uses. And crypto mining at any useful/profitable scale conflicts with an electrical infrastructure designed for lower residential loads. To allow mining safely, someone has to pay to upgrade that infrastructure. Otherwise you're looking at overloading a circuit, maybe even burning the building down.
Aren’t energy prices supposed to pay for that? In France for example, in addition to per kWh rate you also pay a subscription charge corresponding to the maximum amount of current you can draw from the grid. The miners who need more power would pay for higher current and thus pay for the upgrades to the grid.
Until you factor in the risk of fire, environmental impact, and the fact that when bitcoin goes bust which will ultimately happen (nothing lasts forever), the county will be left holding the bag in a similar fashion to other major industries of old.
Is it actually riskier than a resident living in the same place? I don’t think so.
A faulty mining installation would catch fire early on, and if that doesn’t occur then it’s mostly safe. A resident on the other hand would be using risky appliances every day (cooker, oven, heating, hair dryer, etc), which combined with the potential human error, seems like a bigger risk.
> environmental impact
How does zoning change this in any way? Whether you’re drawing tons of energy from a residential or commercial building doesn’t change the fact that energy could be damaging the environment. I’d argue that in this particular case though, the energy we’re talking about is from a hydroelectric plant and so fully renewable.
> the county will be left holding the bag
What would that “bag” be? Sure, the miners would pull out, but then the town would be back at the exact situation as before mining, albeit with an upgraded electrical and network infrastructure paid by the miners - I don’t see how this is a bad thing.
> A resident on the other hand would be using risky appliances every day (cooker, oven, heating, hair dryer, etc)
If you don’t see the difference between a household appliance that sporadically uses some electricity vs a mining ring that continually draws very high current on wire not rated for that usage, then I guess we can’t have an intellectual discussion. Especially as the source article mentions miner fires that have already happened. Heck, depending on the age of the place, it could still be aluminum wiring even which is even worse.
> How does zoning change this in any way?
You don’t think all these new infrastructure that will ultimately go to waste doesn’t have an environtal impact?
> albeit with an upgraded electrical and network infrastructure paid by the miners
You think a short (as in anything under 5+ years) lived burst in electricity sales will pay for all that infrastructure they need to build? Especially as they could make more money exporting that capacity via existing infrastructure to other areas?
Yes, if the area is zoned residential, you are not allowed to use it for commercial purposes. You'd have to convince the code enforcement board and/or potentially other relevant authorities that the use was non-residential. Even to make the "weekend getaway with attached server room" argument, you have to be in an area that is zoned for temporary housing.
Yes, In America we still have freedom... ;) So no the government will not regulate if I have 42U rack (like do right now behind me as a Homelab no mining)
Getting more power to your place is between the power company and property owner not the government, I can get as much power feeds as the power company will sell me, and generally they will only ask question related to saftey. Want 400amp service to your Garage, no problem 99.9% of the time
Why is this being downvoted? Are there people on HN that actually think the government should tell people what they can do in the privacy of their own home? What a bunch of totalitarians. Perhaps the government should be able to dictate who people can sleep with or what media they are allowed to consume. Why are there so many people comfortable with letting governments dictate freedoms when those freedoms aren’t harming anyone?
Did you read the part in the article where server racks set up in apartments not designed for the load are starting electrical fires in residential areas? Kind of a weird definition of “not harming anyone”.
Certain phrases in the parent ("own home") and grandparent ("property owner") would seem to make this comment about apartments somewhat inapplicable. But it really is as simple as that - if you own the equipment and/or can safely handle the load and/or can bear all the costs yourself of any un-safety, then you can do whatever you want. If what you do affects others, those others will object, either in the form of an ultimatum/eviction/lawsuit by your landlord, a complaint/lawsuit by your neighbor(s), an ultimatum or unpaid claim by your insurance company, or an ultimatum/discontinuation of service by the electricity provider. "In America we still have freedom" and calling people "totalitarians" are both a little off-the-hook which I think explains the downvotes.
It being "in the privacy of their own home" isn't sufficient to say that the government shouldn't regulate it -- there are good reasons for certain activities to be regulated (that's not to say the government should be able to regulate ALL activities). I can run a sewage treatment plant next door to you in the privacy of my own home, but I doubt you'd be happy with it, and the same is true here--there are externalities that affect other people, such as more electricity being consumed (potentially driving up prices, and less directly potentially causing pollution) and causing fires due to poor electrical safety.
>>I can run a sewage treatment plant next door to you in the privacy of my own home,
Aside from this hyperbolic statement being completely unfeasible and moronic on its face, provided there is not clear, articulable danger to my person or my propery you should be allowed to do anything you want on your property, including running BitCoin Miners.
if you cross into posing a direct and articulable danger to others then that can be address on a case by case basis, but the comments I was responding to were going on about "commercial use of property" and how they could not believe in the US a person was allowed to run any mining equipment in a residential home. No where did any the commenters I was replying to stated any articulable dangers they were concerned with.
Let me as you this, do you support zoning regulation on this like color of the home, if you have a garden on your front yard, the type and height of grass (or mandates that you have grass) etc etc etc etc
> provided there is not clear, articulable danger to my person or my propery you should be allowed to do anything you want on your property, including running BitCoin Miners.
Which is why I went on the clear negatives that it poses.
> do you support zoning regulation on this like color of the home, if you have a garden on your front yard, the type and height of grass (or mandates that you have grass)
No, but I was not arguing that the government _should_ be able to regulate _everything_, but that when negative effects can be identified, "it is in the privacy of my own home" is not enough to counter that -- the negative effects spread beyond your home, and detrimentally effect others (in a concrete way, not just that it is something they don't like).
how does that sort of regulation actually work? You can obviously have a personal computer. surely you can have a few computers. at what point does the government say you have too many computers?
"The government" probably doesn't say it; people who are negatively impacted or forced to take on extra risk because of mining activity are the ones to say something.
For example, the electricity provider probably objects precisely when the current you're drawing exceeds the safe limits of their equipment and wiring. If they're particularly on the ball, they at least come investigate as soon as they notice an unusually high current-draw for that individual residence.
You're generally free to exceed the safety limits of the equipment and wiring within your own structure, since you pay all the costs of any resulting incident/accident. But if you're covering those costs via a homeowner's insurance policy, that policy/company might have some things to say about current loads and building codes, as prerequisites for covering you.
In a rental property your ability to run mining rigs would depend on the lease, and the landlord's degree of vigilance in monitoring unusual electrical loads. If there's an incident or fire due to current-draw nobody noticed, it probably ends up in court. If you promised (by signing a lease with a relevant clause in it) that you wouldn't engage in excessive current-drawing activities, you lose that case pretty much instantly. Otherwise it'll be up to their side to prove that your negligence caused any losses or damages to the landlord's property, not to mention other tenants' property if they also sue you.
Far as I know, the only applicable laws by which the local govt. might intervene directly would be nuisance laws (noise and such) and zoning laws (trying to separate industrial uses from residential uses). Zoning laws in particular can be as varied as the colors of the rainbow, but the relevant passage would be whichever one tries to define what an industrial land-use activity is. Sometimes it's vague enough that it ends up being decided in court.
In 2010 I decided the Puget Sound region was already too expensive and I moved to eastern Washington state. There is effectively zero software industry to speak of east of the Cascades, but if one wants to carve out a life away from Seattle / Portland / Silicon Valley, it can be done and miners certainly offer no attraction. Quite the opposite - the Port of Walla Walla is entertaining similar offers from miners seeking access to cheaper power, and I am hoping they are turned away.
This solves the rogue operator problem, but doesn't solve the bit where an operator comes in expecting to build a large mining installation. Even if they paid something close to the export premium (perhaps lower due to diminished transmission losses), the asks are larger than the utility currently provides.
This leaves the utility with a dilemma. Bitcoin miners can up and move pretty easily, but the hydro dams are stuck for life. If somewhere cheaper pops up, or if a double spend attack causes a bitocalpyse, the utility has little recourse but to pass on the costs to remaining consumers.
At what point will miners just start building there own power plants? And I wonder if environmental concerns will start forcing good and/or bad regulations of crypto mining.
Warren Buffet and other billionaires love to complain that they pay too little in taxes. They could band together and give the IRS more revenue yet they don't. If billionaires won't do the right thing, why the hell do you think small town Joe Schmoe should?
It's hard to explain the levels of stupidity in this.
- people trading 'coins' in the same way Pokemon / WWF kids trade cards.
- thinking this is actually a long-term 'investment' strategy (well its idiots trading with each other ...)
- to top it off, siphoning off electricity and giving a load of shitty excuses 'it could be like Seattle's.
I don't know where to begin with this Bitcoin crap; it's gotten crazy that so many naive people are into this plopping their hard-earned money into a well-functioning sinkhole.
I paid £30 for a framed print and that sits on the wall doing nothing (it's resale value is probably a fiver on ebay), I have even bought a particularly pleasant rock on more than one occasion, pet or not. I have no use for them. Some are sat on the side because I like to look at the impressions of the creatures who died in it. Some are embedded in my wife's engagement ring (a pointless piece of bent metal), I'm not sure I get any value for them any more since we are married.
Why do we ascribe value to anything? I have a piece of paper in my wallet with a picture of the queen on. It's just a piece of paper, yet if I take it to the shop they will swap it for food! If I take it to the bank they will swap it for a number in a database (woop). Yet if I have a big number in that database or a lot of those special pictures I become a Big Man in society.
Yet, through no fault of my own, if I wanted to swap those pieces of paper for pieces with dead US presidents on, I would get 20% less than I would have 2 years ago! It would be worse but the value of dead-president-paper is not as high as it was. Holding Queen-paper or Dead-president-paper sounds like a huge risk.
>I don't know where to begin with this Bitcoin crap; it's gotten crazy that so many naive people are into this plopping their hard-earned money into a well-functioning sinkhole.
George Soros said it best, " All of financial history is one lie and deceit after another, your job as a speculator is to get on the lie while it is being propagated and get off before everyone finds out".
I feel like a lot of folks are going to get burned but what do I know? I could be full of shit....
Is there a basis to the claim that it isn't? At this time it's anyone's guess. Bill Gates and Warren Buffet along with a handful of others seem to think it is, who am I to disagree with them. I'm indifferent since I don't have a dog in the fight.
Bill Gates Oct 2014: "Bitcoin is better than currency in that you don’t have to be physically in the same place and, of course, for large transactions, currency can get pretty inconvenient." And financial transactions will eventually “be digital, universal and almost free.” https://www.bloomberg.com/news/videos/2014-10-02/bill-gates-...
Bill Gates May 2018: "I would short bitcoin if I could." <-- He can. He didn't bother to look into it though.
He barely knows anything about crypto, and neither do these other guys, and they talk like they do. They DO have a horse in this race, and it's clearly in fiat USD. They're not omniscient and neither are we, so let's keep our eyes and ears open.
Well now you know what the market cap is for snake oil. For the first time we've gotten a clear view of the market size -- and with that kind of size there's no doubt this won't be the last one.
It's not exactly snake oil because you used to be able to buy thinks with it. It's just become snake oil. Maybe that's pedantic, but I don't think it would have become large if it hadn't initially been on a path towards being useful as a currency.
You can still buy things with it. The only thing that has really changed is way more people are speculating on it than before, and that's revealing some serious scalability problems with the blockchain and security/trust problems with the exchanges.
Everything I buy except for maybe my mortgage, I decide to buy it and expect that within moments the payment will go through. I expect it to be cash-like in ease and quickness. For a while bitcoin looked to be headed that way, but no longer.
I think bitcoin is kinda dumb too, but I do have some confidence in blockchain tech generally based on its history so far (ie, the good parts of bitcoin).
> I don't know where to begin with this Bitcoin crap
Begin by addressing the actual strengths of blockchain tech (I think the weaknesses are fairly stated in this thread).
So far, in its short life, it has provided:
1) A store of value that can be easily held on the person and that lives outside the state-corporate banking infrastructure
2) A way to buy psychoactive compounds and other medicines which have been wrongly (and violently) prohibited.
Although I have no problem with Pokemon, nor do I judge people's proclivity to collect them, I do think that cryptocurrency has already achieved something that Pokemon haven't.
edit: Ouch - quite a lot of downvotes with no rebuttal. I guess we're in an anti-blockchain mood this morning.
I realize it's easy to speak in a derogatory manner about something we don't like and hope it will go away, but I think that ignores the reality: for now, and for several years, a lot of people have made a lot of money. It may be an opportunity, or it may be a problem that needs addressing, but after 9+ years, I think there comes a point where it's no longer a sinkhole.
Don't really understand where your question is coming from. Are you implying that exchanges aren't real? That people never cash out?
Even so, how much wealth in this world is based in "actual, hard currency"? How many developers have unvested options? How much of Musk's wealth is in the bank as opposed to tied up in his businesses? I think you're trying to stand up a strawman.
Of course. Many have become rich investing in startups that added no value to the world as well. My point is the many arguments that this is a just a house of cards that will inevitably come crashing down, and I don't think that's the case. A bubble by definition has to pop. A fad has to pass. At what point does something become entrenched to the point that its continuing existence is essentially guaranteed?
The closest thing I've found for estimating how long something nonperishable (i.e. technology or an idea, not food or animals) will stick around is with a theory called The Lindy Effect. Generally speaking, the longer something has lasted, the longer you can expect it to last. So if something has lasted for X amount of time, you can expect it to last for X more amount of time. And 5 years from then, if it's still around, you can expect it to last another X+5 years.
In other words, most things don't last very long, but things that do last for a long time tend to stick around a lot longer than you might normally expect them to. Like people predicting the death of Facebook. Sure, something will probably eventually take it down or become the next Facebook. But it's been around for so long now, a betting man shouldn't bet on it happening anytime soon.
Now one might argue that on the day Myspace died this effect would predict that it would be around for yet another 6+ years (or whatever it ended up being). And to that I'd say that this is a guide for predicting future behavior, not a crystal ball that can accurately predict everything forever. And some would argue that the writing was on the wall for Myspace long before it actually went kaput anyway.
So Bitcoin has been around in some form or another for 9+ years, and withstood a huge laundry list of setbacks, tests of its security, and evolution of the ecosystem in the meantime. So it's probably going to stick around for awhile.
Meanwhile, XYZCoin and it's hot new ICO has been around for about five days, so there's nothing to suggest that it's going to stick around for very long and you should be a lot more careful about putting your money into it.
I think that is a really bad line of logic. There are lots of things that have been around for a long time and make some people plenty of money that are bad things. Pyramid schemes fit your definition - should I start buying in?
The opposite way to pose this is: Cryptocurrencies have been around for 9+ years, and there has been literally 0 use for it apart from conning rubes on the internet. The important thing to ask is whether it has a purpose and has it delivered on that purpose. There's really only one theoretical purpose that it's meant to serve - being free from tyrannical government. Well that kind of worked when capital fled into it from China - but there's also been crack downs. It also doesn't explain the US fascination.
I think there comes a point where 9 years in, you have to ask: What purpose does cryptocurrency serve beyond enriching people who are already invested.
Preparing the infrastructure for uses that it was never intended, and most people will never use, doesn't sound like a good thing to me -- it sounds like a waste of money.
> Who cares? If people want to play in Bitcoin, what difference does it make.
The externalities. This very thread is about how Bitcoin is messing up power grids and will soon be responsible for a non-negligible percentage of Earth's entire power usage (and the attendant pollution). It's not consequence-free fun.
Is Amazon accepting the Bitcoin or is that just a way to convert it into real money first? If the seller doesn't know, it doesn't count as Bitcoin usage — just another Visa transaction.
That’s as accurate as saying that Amazon accepts payments in stock if I sell some before making a purchase. The fact that you paid a different company to convert your Bitcoin into some real currency is a separate transaction. It doesn’t mean that Amazon has any exposure or investment in the Bitcoin world - just that they take credit cards like everyone else.
If I sell some gold, then use the proceeds to buy from Amazon, I haven't bought anything with gold from Amazon. Yes, you are using Bitcoin, but not to buy from Amazon--it's just another layer on top, it's just another (largely unnecessary) transaction in addition to the existing transaction.
I'm not arguing necessarily for its utility or intrinsic worth, just that it's entrenched and far from the inevitable house of cards that detractors wish for.
Call it gambling if you will. What is the intrinsic value of a game of blackjack? None, yet an entire industry is propped up by it.
>What purpose does cryptocurrency serve beyond enriching people who are already invested.
Limited scope and obviously doesn't justify the money that is swirling in crypto right now.
However, if we want digital things to be non-fungible we're probably going to need something like a block chain. Cryptokitties(as beanie-baby-esque as they are) and the implementation of the ERC-271 token come to mind.
Again I realize cryptokittes are not really a great example other than proof of concept, but imagine with me for a second a fine art market where all the art is digital, this requires a decentralized non-fungible token, maybe digital house or car keys would be another thing where we want to limit the number of people with access to the thing, again if we don't want to trust someone like say equifax, with control over that we're going to want a decentralized non-fungible token.
I realize these aren't necessarily the best examples of non-fungible assets we might want one day. However it seems absurd to me that moving forward society won't at some point demand some digital asset that is non-fungible. If that assumption holds true then some form of cypto-currency is going to be necessary to provide such an asset.
What makes an investment in 'this Bitcoin crap' any different from an investment in say Facebook shares or Snap shares? Aren't they just unnecessary digital crap too that nobody actually needs?
Bitcoin has become the gold standard for crypto and many people invest on the basis that there'll be huge growth in the area of blockchain technology and tokenised digital assets in the years to come.
If Bitcoin remains the gold standard for crypto then it's value will rise accordingly.
What is money really? Is it just people's attention? Isn't that what Facebook is capturing then selling off to advertisers?
Isn't that what Bitcoin is doing as well? Capturing people's attention as well as development resources (minds/energy) from some of the smartest people right now?
Facebook and Snap became part of most people’s lives within a few years. Bitcoin has been around for 10, and aside from trading bitcoin, has found very limited use. That’s what makes it different. Every prediction for what Bitcoin would be good for, and what would justify its price has failed to come to fruition.
I believe Venezuela proves you completely wrong. You should read up on what is going on there with Bitcoin. What Satoshi envisioned is actually happening there.
The fact that bitcoin has gone 10 years, with limited use, to me signals just how amazing the technology is. Ten years is nothing for a tech that can last 1000 (or more..).
Last I heard about Venezuela and bitcoins, people there were using the "free" electricity to mine bitcoins, contributing to the rolling blackouts. And then using the bitcoins to import overpriced stuff.
Yeah, you shouldn't give people electricity flatrates, because of stuff like this. This is why we can't have nice things, this is why socialism doesn't work etc. But the bitcoin miners are really destructive in this case and not something you should praise.
Bitcoin’s success in Venezuela is because it is a inflation hedge. It has allowed Venezuelaeans to hold on to their savings and out of reach from the government’s ability to confisticate wealth via inflation.
What's going on in Venezuela with Bitcoin? From googling, it sounds like a small fraction of the population is setting up mining operations because electricity is subsidized enough to make it profitable. But I'm not finding anything describing significant adoption of Bitcoin as a currency.
Shares give you a stake in a productive(hopefully) enterprise, cryptocurrency does not give you anything but a token.
This is the problem that Buffett has with cryptocurrencies.
When you buy shares in a company you are buying claims to its future earnings at least in theory.
Theory being that should the company not serve shareholder needs you can force the company to distribute the earnings/dissolve/merge etc etc.
(Not going into the whole modern abomination to strip lesser shareholders of their rights to vote as Google, Facebook, Snap have done with their tiered stocks).
When you are buying Bitcoin or any other cryptocurrency and yes that means ICOs too you are buying digital tokens with no claims to anything besides being a proof of having that token. It is solely 'castles in the air' which Keynes so long ago stated regarding stock market but in the stock market it is not the sole factor.
In some ways cryptocurrency is closer to regular currency but not backed by the government's mandate to receive taxes in said currency.
In other ways cryptocurrency is closer to tulips,gold,MagicTheGathering cards in that the value is based on something that some number of people agree on(ie the market).
Except cryptocurrency has no utility besides being a token, wherein tulips, gold and MagicTheGathering cards possess some utility outside being a token of exchange.
One: Thank you for helping rationalize that my Magic The Gathering habit isn't a problem.
Two: I know you said
>Not going into the whole modern abomination to strip lesser shareholders of their rights to vote as Google, Facebook, Snap have done with their tiered stocks
However if you want to argue you're problems with crypto (there are many) we need to make arguments using the way things are in the real world.
Given I'm a retail investor. In one universe I place a bet on Snap for 50k. In another I took that same 50k and put it into bitcoin. In both universes my bet goes bad, both asset's price per unit goes to 0. Snap goes through the process of being liquidated. Remember I'm a retail investor, I own common stock.
Now am I better off in one universe over another? I'd argue that I'm not. However if I were Warren Buffet, I'd have been much better off bought Snap as I would have preferred shares.
You might not be better off in either universe but my reply was regarding difference between buying cryptocurrencies and buying shares.
Buying shares is like investing 50k in your Uncle Eddies seashell harvesting venture. In return you receive 50% share in his venture that is you get half of all future seashells harvested by Eddie.
Buying cryptocurrencies is like giving 50k USD to your Uncle Eddie and getting some seashells back but that is it! There is an active market for these seashells and price goes up and down.
However you do not get to claim any more seashells produced by Uncle Eddie.
Buying common shares implies certain rights to some enterprise while buying cryptocurrencies implies nothing.
>What makes an investment in 'this Bitcoin crap' any different from an investment in say Facebook shares or Snap shares? Aren't they just unnecessary digital crap too that nobody actually needs?
There's a fundamental difference between buying shares of a publicly traded company on a regulated exchange and investing in bitcoin. This is quite literally comparing apples and oranges - your examples are not only different in kind, but in purpose. Also, there is a large, rather well funded government institution who aggressively works to make sure the stock market isn't subject to the sorts of abject manipulation, ponzi schemes, and other such unsavoriness that Bitcoin has been subject to. (Side note - watching the Bitcoin market is like watching the last 150 years of finance happen in 2-3 years. It's an interesting object lesson in market manipulation and why the SEC maybe isn't a bad thing).
As to Facebook/Snap being digital crap no one needs - yes. However, just because there's no physical good being created doesn't mean their value is entirely ephemeral/a financial illusion. Facebook/Snap create value by solving a problem people are willing to spend money to solve. Bitcoin creates value by...well it doesn't yet. People invest because they hope that "there'll be huge growth in the area of blockchain technology and tokenised digital assets in the years to come." That's a nice thought, but it's an assumption.
>If Bitcoin remains the gold standard for crypto then it's value will rise accordingly.
It's funny that you mention the gold standard, a standard that was dropped because of its votility, the fact that it was subject to manipulation, and the fact that it benefited some segments of the market FAR more than other.
>...many people invest on the basis that there'll be huge growth in the area of blockchain technology and tokenised digital assets in the years to come.
I think this is undeniably true. However, I think the assumption that bitcoin will be the vehicle for this growth is incorrect, or more charitably, overly optimistic. Bitcoin has accrued a lot of non-technical overhead that I think will prevent it from being used to drive these solutions - things like its association with speculation, the fact that the majority of miners are on the Chinese mainland, etc. I think the growth in blockchain technology will come from companies and individuals taking the concepts of the blockchain and using them to build products with real value (as in, they solve a problem that someone is willing to pay money to have solved). Bitcoin's value (sadly) doesn't come from the technology, which is fascinating and interesting - it comes from the fact that it's created an unregulated market with no barriers to access, which has allowed rampant speculation, incessant hype about 'the technology of the future', and a continual influx of new money to create 'value' that ultimately, has no real value.
>people invest on the basis that there'll be huge growth in the area of blockchain technology and tokenised digital assets in the years to come.
That's been the 'investment thesis' for the past 5-8 years.
And people have been bidding these things up ever higher, because any day now someone's going to figure out something actually useful to do with them...
(And in the mean time if some coiners get to skim a little cream from the irrational exuberance, I'm sure they don't mind to do so.)
But where is any coherent trend line supporting claims of huge growth in the area of blockchain technology and tokenised digital assets in the years to come.?
Seems to be wishful thinking that is completely at odds with the reality of these systems.
I find myself hoping it implodes sooner rather than later. Purely selfish on my part - but I would like to be able to buy a new graphics card some day. I'm already dreading the insane scramble when Nvidia announces their new cards (likely this summer).
However, after crypto blew up in their face last time (they ramped up production just before bitcoin gpu mining got replaced by ASICs and ended up with a load of unwanted GPUs), they haven't been so quick to ramp up production this time.
I last built a gaming rig in 2012 and just this January decided it was time to upgrade. It took me a bit to figure out why the hell a mid-range graphics card was $700 minimum.
How many times before did your mom ask you about it?
Precedent isn’t here.
But, if you are willing to say what happened in the yesterday will happen tomorrow, I assume you’ve taken a HELOC put on your house and invested in bitcoin - rift?
You comment is hard to understand but, I'm not saying the near term price is an indicator of it's long term health I'm saying it historically isn't a prediction of anything.
Bitcoin has a lot of interesting failure modes if the price falls too far.
People will start taking mining hardware offline. This will result in a lot of idle capacity. There will be a number of people capable of pulling off a 51% attack. And if the hash rate falls very quickly, say 50% in a week, the difficulty adjustment will be unable to keep up. This would have all sorts of nasty effects.
If the price goes to $4000 it should go to zero. That's assuming that the "investors" will behave sensibly, which is never a safe bet.
This comment applies to any revolutionary technology. Let's substitute cryptocurrencies with "the internet" in 1999:
- people trading 'stocks' in the same way Pokemon / WWF kids trade cards.
- thinking this is actually a long-term 'investment' strategy (well its idiots trading with each other ...)
- to top it off, siphoning off capital and giving a load of shitty excuses 'it could be like Detroit at the beginning of the 20th century.
Many people were left holding pets.com stocks, but others were left holding Amazon stocks.
Most of the things that you point out are truisms that the people that have been in the bitcoin space for a few years also see. I would suggest you make an effort, and try to see through all the bullshit projects or outright scams, and you will see that there is real value in what bitcoin and a handful of other projects are trying to build. If you want to avoid the current noise, read what cypherpunks were writing about in 1998: http://cypherpunks.venona.com/date/1998/12/msg00203.html
You’ve generalized to a point of nonsense, I’m afraid
Amazon and Pets.com didn’t possess truly novel tech, to a trained eye
I don’t think truly novel tech matters much to most people.
I think ease of utilitarian life is good enough
We don’t need the energy sucking monstrosity that are the data centers we have if we looked at different models of commerce
This is just getting people to be tribal over something that appears magical but will fade out
Goodhart’s Law, Buffets Institutional imperative, and similar ideas, will win out. Human quest for novelty will end bitcoin and its tribal urges for nostalgia and fetishizing their LEGO train
Humanity doesn’t care to ogle dead men’s workshops showcasing their individual brilliance for long
The difference is that the Internet had clear useful applications at that point and billions of dollars in real business (not just speculation) was happening annually. Yes, there were plenty VC misfires with no plausible path to profitability — my favorite was cement.com, with free shipping! — but there were tons of existing businesses finding significant value from it and new companies like Amazon, eBay, Travelocity, etc. who were making money on each sale. The daytraders were indeed chasing bad deals but anyone who paid attention to basic market fundamentals wasn't buying those stocks[1].
10 years into Bitcoin there's still no reason for someone to buy in other than speculation. It's not competitive as a currency and the current “store of value” pivot is undercut by the lack of fundamentals. One particular reason why that comparison doesn't work is that if you had, say, bought AMZN in 1997 even if the stock didn't do great you owned part of a profitable book seller which could carry on just fine even if it never saw rapid growth. Bitcoin doesn't have any value other than its current popularity so there's no floor on the losses if people switch to something else.
1. I actually sat in on some calls with Pets.com around the time one of our clients was thinking about buying them and it was quickly evident that they had no strategy beyond cashing out at the IPO.
Saying that there is no reason to buy a crypto-currency is absolutely false. You probably live in a Western country where you mostly trust the banking system and stability of your own currency. That is not the case in many other countries. You will probably say that most crypto-currencies are extremely volatile, which is true, but there are already existing and active projects that have addressed that issue, for example the DAI stablecoin. In Russia there's been a banking crisis recently, stablecoins, tokens tied to commodities and such would have directly benefited people keeping their money in these opaque and vulnerable institutions.
Countries without stable currencies tend to use things like USD which have stable values rather than wild fluctuations. That’s a product of a social system and years of practice, not hand waving about magic real-soon-now technology. In your Russian example, the value would be in the link to the commodity rather than whether it’s a printed bill, entry in a database, or record in a block. If that’s honest, any of them will work and if it’s not, none of them will.
Besides, if I lived in Venezuela or Russia, would I really want to record my black market activities in a public ledger which is hard to disavow?
Perhaps you could list a legal reason — not the marketing pitch we've all seen for the last decade but something where it makes financial sense to favor it?
I’m not saying it can’t be used but just that there aren’t many reasons other than speculation or an ideological stance. If I was, say, the corner coffee shop what would balance out the extra fees, delays, and lack of fraud protection?
What's the obsession with needing a legal reason? Why do people reject the illegal but interesting uses? Doesn't the fact that bitcoin has managed to subvert drug prohibition for many people make clear that it is capable of interesting things?
Legality matters for two reasons: one is simply that the huge predictions about market valuations and transformative social effects require more volume than people buying drugs online.
The other reason it matters is that if something is primarily used for illegal activities that'll really hold back the whole system: most businesses aren't going to offer a payment option which makes them look shady, people are going to hesitate to use have the software installed, running an exchange will be even riskier, etc.
For Bitcoin in particular, there's also the practical risk that doing something illegal in a public ledger with non-repudiation guarantees is not generally a good call.
Shops near borders often take the neighboring country's currency because it is convenient for travelers. If bitcoin was accepted more places, then those same travelers wouldn't have to worry about currency conversion. Sounds useful to me.
Okay, so continue that thought to why would that business do that — is it faster, cheaper, etc.? How many transactions are there where the cost of currency conversion is greater than the cost of the Bitcoin transaction fees and conversion into the currency the receiver needs to make most purchases?
It sounds like you are talking about credit cards and not bitcoin.
Compared to credit cards, bitcoin has extremely low fees and fast payments. The fraud protection for merchants is far superior compared to any credit card payment solution.
It seems pretty obvious that most people spreading this kind of bullshit have never actually tried to use bitcoin, and have instead built their knowledge based on forum posts by other uninformed people.
This is all wrong. Many people receive payments and pay in bitcoin. All without having to trust some centralized oracle that cannot, at the end of the day, be trusted.
Take a look at what is happening in Venezuela with bitcoin, and you will see why your statement is wrong. The fact bitcoin, an open source project, continues to flourish with some of the brightest minds in computer science ten years after its foundation speaks to its core strength: the removal of trust.
I sold an old phone through traditional fiat a few months ago, it took paypal 3 weeks to process my payment. With bitcoin, I could have been paid with in the hour.
> Take a look at what is happening in Venezuela with bitcoin
Is anybody actually using Bitcoin as a currency in Venezuela? I can only find references to people mining excessively there because the electricity is so subsidized.
Bitcoin, at this point in time (and for the last two years or so, though not really for the preceding eight) is digital gold. It's a version of gold that, with proper preparation, can be carried inside your head when you move from place to place, or transferred by voice or text message.
Most people in the west have about the same use for gold[0] and bitcoin - speculation, gamble, "investment". However, people of Venezuela, Turkey, Libya, Iran and even Russia have a lot of use for gold (and bitcoin): A store of value they can take with them if they leave. And unlike gold, bitcoin can be made confiscation proof. The official currencies of these places have more volatility and less stability than BTC.
[0] Gold does have ornamental and industrial use, but that's NOT why people buy it, and not why it is valued the way it is. The "investment" claims on gold outnumbers the industrial/ornamental claims by some 3 or 4 orders of magnitude.
Everything you say about bitcoin is equally true of a bank account in pounds in London. There’s zero reason in principle that it is any harder or easier for an oppressive government to prevent capital outflows to bitcoin than to British bank accounts. At very best there’s a temporary advantage in bitcoin’s favor as oppressive governments take time to understand and lock down the newer avenues for evading their controls.
While you are right, and this is a common practice among wealthy individuals, it's virtually impossible for most people in those countries to open bank accounts abroad.
I started with "at this point in time". At this point in time, it is easy for a person not suspected of crime (or otherwise being on the wrong side of the government) to move their british pounds from their London account to e.g. one in New York or Switzerland, convert them to USD or CHF either before or after the transfer, and generally hedge against government by betting on other things.
At this point in time, the same is certainly not true for the people of Iran or Venezuela, where there are capital controls, and the only way to get a different currency is on the black market. Effectively, compared to the west, everyone there is "on the wrong side of the government".
> There’s zero reason in principle that it is any harder or easier for an oppressive government to prevent capital outflows to bitcoin than to British bank accounts.
In principle that's true, but that just makes bitcoin's raison d'etre more evident. At this point in time it does not seem to be needed, but it may become needed with less than a day's notice. This has happened to the people of Cyprus (a "western" European country). Even the US confiscated gold in the 1930's.
History does not repeat, but it rhymes. Bitcoin is a hedge; it's far from perfect, it has a lot of drawbacks, but at this point in time , it is more useful than gold for people who might have to flee.
You seemed to have missed the point. There’s nothing to stop an oppressive government from preventing its people from buying bitcoin the same as they prevent them from buying pounds and wiring them to British banks.
The dark hints about how any government may become oppressive is a red herring. The issue isn’t that bitcoin isn’t needed because my government isn’t currently oppressive, it’s that bitcoin’s utility in the face of an oppressive government is wildly exaggerated.
You are attributing magic powers to bitcoins that they do not have. Black markets are not invulnerable to government crackdowns because they are digital. On the contrary, digital networks are in many ways easier to control centrally than distributed underground physical networks.
That area of magical thinking just amazes me: look at the Chinese Great Firewall or Erdogan’s Turkey to see how this would actually work. People get arrested for visiting websites or having the wrong app on their phone and there’s no reason to believe that capacity wouldn’t be used the same way.
This especially bad for Bitcoin since unlike cash they’d get your full history and quickly deanonymize everyone you know.
This area of magical thinking just amazes me: Look at the recent two years! The big run up in bitcoin value has happened because people were moving money out of China despite capital controls put in place.
Is it still as easy? Probably not, I'm not up to date. Could people who have done that get in trouble for that in the future (thanks to bitcoins long memory)? possibly, if their opsec wasn't top notch and even if it was top-notch but they were unlucky enough to use a mixer that cooperates with the chinese government.
And Erdogan's turkey is also a great example; While the "coup" was happening, it was possible, even easy, to move money out of the country using bitcoin (not so fiat money). Quite a few people left the country afterwards, and many were arrested regardless of phone app. I don't know how many of them took their wealth with them in bitcoin, but they had much easier time doing that than any other way. at the time
That’s just telling us that it’s easier to get away with something before the authorities take it seriously. Once something grows big enough that window closes, which means it’s not much of a selling point for mainstream adoption.
You can keep moving the goal posts if you enjoy that. Yes, everything becomes harder once the authorities take note.
But if you have managed to acquire bitcoin, e.g. before a government crackdown, or some other way through help from people in other countries, it still provides the "cross border value store" function that gold cannot by virtue of being hard to move.
I am looking at what is actually happening, not hypothesizing.
> There’s nothing to stop an oppressive government from preventing its people from buying bitcoin the same as they prevent them from buying pounds and wiring them to British banks.
There's also nothing to stop an oppressive government from killing its people (and some do). But oppressive is not binary, and people have used bitcoin to "smuggle" money out of (at least) Venezuela and China, despite capital controls and government crackdown, in ways that they weren't able to do with british pounds (and which would have been much harder and riskier with physical gold).
> You are attributing magic powers to bitcoins that they do not have. Black markets are not invulnerable to government crackdowns because they are digital. On the contrary, digital networks are in many ways easier to control centrally than distributed underground physical networks.
I am not attributing any magic powers. I am observing the reality as it happens now ; governments crack down on digital networks and black markets but it's much, much harder for them to shut down than bank transfers.
To stop bank transfers, all you need to do these days as a government is click the right button. To take down the Silk Road, the US government took many months and a lot of work; an oppressive regime might have done that more quickly and swiftly, but it would still have taken considerably more effort than shutting down wire transfers. The special feature cryptocurrencies have is ease of carrying across borders .
> The dark hints about how any government may become oppressive is a red herring. The issue isn’t that bitcoin isn’t needed because my government isn’t currently oppressive, it’s that bitcoins utility in the face of an oppressive government is wildly exaggerated.
Oppressive is not binary. Cypriots were (perhaps still are) subjected to very strict capital controls, with no attempt to crackdown on bitcoin.
I am not lamenting the downfall of Silk Road - I think it should have been shut down. I was pointing out that "an oppressive government can do everything" is a weak argument, because we have experience showing the limit and effort needed.
All I am saying that bitcoin has some of the same uses that gold has, albeit in an easier-to-carry-across-border and harder-to-confiscate way -- which was a response to G-G-..-G-P saying "bitcoin has found no use".
Now, "illegal" is a problematic word, because it is a technical definition that changes with time and location. It is now legal to own gold in the US, and it was legal in the 1920's but it was illegal to do so in the 1930s. Gold was confiscated, and (since USD was still denominated in gold at the time), it's value in USD was doubled overnight, or rather, the value of USD in gold was halved overnight.
It is still illegal for an unmarried couple to kiss, perhaps even hold hands in public, in the Saudi Arabia.
The technical legality of owning gold in this case is an interesting discussion, but I am interested in the properties and implications of an un-confiscatable store of value, which in some (limited) ways cryptocurrencies are. It keeps governments in check in a way that fiat currency cannot.
Unless you believe every single government anywhere in the world is, at all times, always "just" and "right" and "good" (for whatever definitions of those adjectives), then it is a good that some "illegal" acts in some places and some times have mitigations. And at this point in time, bitcoin provides these mitigations for the people of venezuela and iran, and has provided them earlier for the people of china.
No, no and no. Sweden and Denmark are taxing bitcoin capital gains so I don’t see a single reason why a malicious government cannot confiscate them.
The beautiful story of “digital gold” is just a story.
To me it seems more like a digital crap honestly and I can’t wait for the day when it finally disappears.
Sadly it will be in any case too late given the massive amount of energy and co2 thrown away..
The Netherlands is taxing (my) Bitcoin holdings as well. The way they do that, is by depending on my honesty. The reason I'm honest is because I don't want any troubles when I'm going to buy my lambo (no, not serious).
Afaik Bitcoin is handled the same as cash: they don't really check how much you have, but they will come down hard when you start spending more than you should be able to.
> so I don’t see a single reason why a malicious government cannot confiscate them.
Technically, how can they confiscate them? They cannot.
They can tax them 100% or 150%, true. And they can imprison or kill their taxpayers if they with. true.
But if I managed to cross the border from (hypothetically) malicious Sweden to (hypothetically) benevolent Liberia, with the private key in my head, what can they do about it?
They can, and money governments in the past have, deny me passage with anything of value but my clothes - it is often the case that anything of value gets taken at the border (hell, it is likely the US will take anything above $10,000 on your person unless you are very well equipped legally). But there is no technical way for them to do that with bitcoin, and for that matter to even know that you carry the private key of a $1B wallet in your head, unless they have researched it before hand -- which, at last for now, is hard to do for the entire population.
> To me it seems more like a digital crap honestly and I can’t wait for the day when it finally disappears.
Art pieces that go for >$1M feels like analog organic crap. But the value is determined by the market, not but our feeling.
> Sadly it will be in any case too late given the massive amount of energy and co2 thrown away..
I agree bitcoin is likely wasting significant energy and co2, but ...
Have your ever seen a rough estimate of the costs (in resources / energy / co2) that our existing monetary system imposes? It is certainly not free, and e.g. in a lot of places more than 1% of real-estate / energy is consumed by financial entities, many of which have usefulness to society arguably comparable to bitcoin.
I have looked for a study as such and has not found one.
(sidenote: some estimates are that 1% of global energy use goes towards clothes drying. probably provides even less value to society than bitcoin)
> 10 years into Bitcoin there's still no reason for someone to buy in other than speculation
If you're comparing with the Internet, I'd say 10 years is still quite early into the Bitcoin and Blockchain space. You could say the Internet of 1999 was almost 15-20 years of development from the time TCP/IP was introduced on the ARPANET.
With the attention that Blockchain has received in the past year and the sheer number of smart people working in this field (yes there are plenty of scammers as well but you can't deny smart people are flocking to it right now), I'm pretty sure you'll be surprised of what it looks like in just another 3 years or so.
I don't think that does anything other than make the comparison worse for Bitcoin: while it's technically true that the Internet started well before 1989, what was popular in 1999 was the web and that really wasn't mainstream before 1993 or so when e.g. Mosaic was released but by 1995-6 it was having significant impacts around the world in most fields.
More interestingly, however, is that Internet was difficult to get and expensive throughout most of that period, not to mention the slow and expensive connection speeds of that era, all of which limited adoption substantially. Even with those barriers to adoption, however, there was plenty of demand because it was immediately useful to have email, Usenet (at least in technical fields), FTP, etc. even before the explosion of activity around the web. When the web boomed, millions of people paid (often by the minute) to surf it at 56K or less.
In contrast, Bitcoin has been available to almost anyone on the Internet for many years without anything like those barriers to adoption but most people haven't had a reason to care.
The smart people are the ones choosing an inherently unsafe language not that different from JavaScript on which to build “smart” contract for which the code is law just until the point a bug is found and they hard fork to avoid losing hundred of millions of dollars?
I’m honestly not very impressed by what I’ve seen.
They may be much smarter than me and I may be a complete idiot, but I never fucked up in a such majestic way honestly.
Oh, and so cryptocurrency programmers are the only people who "fucked up in a majestic way"? Seems to me like there are times past where automobile makers had some spectacular recalls where they had to correct unforeseen situations.
Pointing out that other revolutionary tech looked stupid to some people at first doesn't mean that things that look stupid are going to be revolutionary.
You could just as easily point out that investing in beanie babies looked stupid, or any of a number of other totally failed ideas seemed stupid.
Most things fail. Your comparison adds no meaningful information and is attempting to mislead based on fallacious reasoning.
I think you missed the point I was trying to make; I was mentioning that OP has made a too broad of a statement which could apply to any successful technology too.
I wasn't trying to make any comparisons, since these are two very different situations.
Thanks for pointing it out. Comparing the current bitcoin space to the '99 internet is a common so I should have been more clear. I think that the comparison to the 70s internet is better, but that doesn't work that well to explain current valuations.
The key difference is there is no BitInternet craze. In a funny way, there was the craze around PetSmart and other dotcom 'crap' which is very similar to the FOMO-naivety that goes on in this Bitcoin world...
The fact that you think cryptocurrencies and internet is comparable pretty much says it all.
If you had said blockchain vs internet then it might have made for a marginally plausible line of reasoning. Blockchain at least has some proven real life applications that scale.
It's irrelevant what the customer wants to use the electricity for. The increase in electric cars is already challenging how we manage our power grids. If it's in demand, charge more.
Lasing out against noise or heat I can understand, but unless electricity is being subsidized, I can't fathom the line of logic people take to justify lashing out against how someone chooses to use electricity they're pay for.
I suspect it's due to irrational hate rather than sound reasoning.
Well, we know that electricity is subsidized in many ways, see coal, petroleum or solar power for examples.
Furthermore, electricity prices do no include environmental externalities. So when you burn so much electricity for things that many people deem wasteful, those people do have reasons to get pissed and yell at you in the internet. Wellcome to modern society!
But... but, its math, and new. So it must be cool. Right? Plus when they talk about it they get to say 'crypto' which sounds hackeresque.
Humans are hilarious. Anyone here old enough to remember the dot-com boom with absurd business models, that, when questioned, got the response that you obviously just don't 'get it'.
Proof of energy consuming work as currency is a sure path to environmental catastrophe.
In regards to the 'cool hysteria' and bandwagon jumping stupidity of humans, classic solutionist mistake being made by the Australian Government: Find a problem that we can solve with Blockchain!
People trade stocks like they do Pokemon but we call them 'shares'. Does that make it less like Pokemon than calling them 'coins'? Also, you trade coins all the time. It's called coins. Fiat coins.
Yes, it does make it less like coins, because lying about the assets backing a share's value is a quick way to end up in low sec Federal prison for 5 to 20 years.
I completely agree that there are regulations that enforce a somewhat honest economy. But look at 2008. A bunch of cheaters and the only people penalized were the ones who believed in it the most, such as homebuyers at the time. Bitcoin is much more chaotic, but that has its advantages too. For example, it is not tied to a single country's government.
The technology keeps advancing and once the efficiency reaches a place that some consensus network can become
a democratized cloud (the SAFE network is a strong contender) then there will be actual value behind the tokens. For now bitcoin represents the belief in that dream.
Perhaps it isn't a stupid as you think? Perhaps people like the idea of trading computational power for social mobility?
If your computer could do your work for you, leaving you to do whatever you want in life, why would you NOT want that? The stupidity is that we are not all doing this, that we are not tearing down the halls of congress for cheaper power collection methods. What is crazy is that we never demand accountability from our traditional finance system, leaving us to trust a few tremendously wealthy individuals who have no obligation to the rest of society. With bitcoin, there is no trust, in fact this is even a key feature: remove the trust. I think this is an idea that is very powerful, and is something that people like.
If you are looking at bitcoin as an investment, then you are already looking at it all wrong. This isn't about investing, its about financial independence.
I would suggest you look into the fundamentals again.
ultimately real work that produces actual goods and services has to get done. how does computing hashes "do all your work for you, leaving you to do whatever you want in life"
Yes, the computer crunches the transactions, and you get rewarded in bitcoin. Why should Visa be the only to profit from something like this?
So this leaves me to do what I want. I can get another job, or not. Who wouldn't want this? Its a simple idea, trade computation for social mobility. There are people doing this all over Venezuela right now.
I made the similarity the other day between to crypto-commodities (i refuse to call it coin or currency) and beanie babies...
It stuck pretty hard with me. The truth about bitcoin is like beaniebabies they have no value, and despite concensus other wise could at any time be ruined by the decisions of a dozen people or so. Anyone that still believes the “it’s decentralized!!” just because the database is - nonsense has a dose of reality coming.
Do I wish I would have gotten in at $5, yea, would I have sold at $20 not $20,000 almost certainly. But it’s over, it’s a fools game now.
People have and are using bitcoin in legal transactions. Legitimate companies accept it, legitimate customers pay using it, and legitimate products are traded for it. This is reality.
If all you want to continue posting emotional comments on how much you hate bitcoin, then by all means I wont stop you. but to attempt to dismiss the currency as a toy strikes me as delusional and a bit sad. Approach this issue (and any other) with a level head. Don't let emotions take control you like this.
What is the ratio of " Legitimate companies accept it, legitimate customers pay using it, and legitimate products are traded for it." to people using it for money laundering, ransomware and other illegitimate activities. Ransomware would probably not exist if it wasn't for cryptocurrencies.
Add the power usage, the graphic card shortage and the illegal activities and I suspect you're two to three order of magnitude larger than legitimate uses. Sooner or later cryptocurrencies will get banned, or at least fully regulated.
All I'm saying is that, like it or not, cryptocurrencies are here to stay. It's far more constructive to focus on providing and improving legitimate services that accept or deal with these currencies than spending energy shouting at the clouds.
If you want to continue shouting, be my guest. The rest of use will continue accepting and transacting with these currencies.
Easy for you to say from the comfort of the first world, but there are other places in the world without the luxury of a functional banking system. Granted there are a lot of idiots trading, which is why I trade myself (easy prey) as it affords me living funds without having to be subordinate to poorly-implemented scrum processes and egotistical brogrammers.
I don't quite understand something: why are the terms "unpermitted", "unauthorized", and "bootleg" used in the article? When I signed up with Seattle Public Utilities, I didn't sign an agreement saying I wouldn't mine or run servers out of my apartment.
Keep reading after 'unpermitted', and the answer right there in the article: "...running computer servers far too large for the electrical grids of residential neighborhoods"
I read the article past that statement, but saw no reference to regulation or ToS that states this is a violation of any statute or local law -- "far too large" is what, exactly?
My problem with that statement is that it doesn't actually answer the question -- it smacks of journalistic supposition and no root facts.
I can run two refrigerators, two freezers and an AC unit all day and night and push myself into the top tier of energy usage, being the equivalent of a closet full of computers running 24/7, but all that would do is push myself into the top tier and cost me lots of moolah -- what's the line between authorized and unauthorized?
If you consume more power than what the electrical company can supply your main breaker will trip.
Unless those people are bypassing breakers I don’t see what’s the big deal. If the electrical company tells you that you can draw 20A and gives you a 20A breaker then you should be allowed to use it.
Precisely! If they are bypassing the breakers, then that's "breaking and entering" on the public utility's property -- the mining isn't the "unauthorized" part.
The only purpose of a breaker is to prevent current from heating up wires beyond a safe level. They don't indicate anything about power capacity for a given neighborhood.
Yes and no, the Service Breakers in your home panel are there for safety yes.
However when you sign up for Services you sign up for a given Amp level of service, the Power company then has the expectation to be able to supply you with that level of current at that location
Most residential Homes have either 100 or 200amp service. 100amp service would probably be enough to run about 50 cards (assuming each card running at at 250w power draw that may be high no idea)
That's not even remotely accurate. Power companies oversubscribe just like everyone else. That's why they give you a discount for hooking up a device on your air conditioner they can remotely control during peak times to even out power usage. Also why you hear of rolling outages during extremely hot summer weather when everyone has their ac on at the same time.
That's why they have a different service for business users. If they were equipped to service every home at 100% all of the time, your bill would be about 10x what it currently is.
Then maybe they shouldn’t be oversubscribing, or finally upgrade the infrastructure now that they milked out enough money from the oversubscription and the energy consumption is finally catching up.
Another solution is to make a proper “burstable” tariff with the corresponding meter that would give you a baseline current allowance plus a peak current allowance for X seconds.
As it stands however they are selling packages promising X amps and are pissed off because someone is actually using X amps. Well they definitely don’t earn any sympathy from me - this kind of behaviour reeks of scum.
Right, 100 years of service that works perfectly fine should be thrown out the window. The rest of us should all pay a 10x increase so Bitcoin miners can abuse the system. And oh, btw, when the 10x increase occurs, the Bitcoin miners won't be able to afford it, so we'll have a glut of unused power that we'll all have to eat the cost of. Brilliant idea.
Do you mean you are happy with being sold a tariff promising X amps while cutting you off when you do use those X amps?
Look, I dislike Bitcoin too, but what I dislike even more is companies making money promising X and then actually cutting you off should you dare to use that X. At the moment, the "miners" are paying for an energy tariff that promises them X and are using X; the fact they're using it on Bitcoin is completely irrelevant, the problem is that a company is making money on false promises and somehow the buyer is the one at fault?
We've already got this bullshit with "unlimited" data, let's not set a precedent by tolerating this for energy tariffs. If the grid can't sustain everyone using 100 amps then they shouldn't be selling 100 amp tariffs and should switch to "burstable" tariffs with a continuous allowance of let's say 50 amps and a "burst" allowance of 100 amps for X seconds.
>Do you mean you are happy with being sold a tariff promising X amps while cutting you off when you do use those X amps?
I'm going to assume you don't live in the US, or haven't ever actually built a new house. You are absolutely not promised the full usage 100% of the time. And they're very clear about that. It's why you must hire a licensed electrician to fill out a load sheet before they'll put a shovel in the ground or a ladder in the air to run service to your premises.
I'm not sure why you keep claiming that, but there isn't a power company in the US that had EVER promised a residential Customer that they could use 100% of the rated line all the time.
That would be between the landlord and the tenant not a government, generally when people talk as they do in the story they are talking about violation of government regulations not civil contracts
Running industrial equipment off your local residential power grid is both against the terms and conditions of every power company under the sun and also incredibly stupid to do.
If on a domestic connection, they may be referring to:
> Where a portion of a dwelling is used regularly for the conduct of business or where a portion of the electricity supplied is used for other than domestic and incidental farm power, service may be supplied on this Schedule, provided the energy used is in accordance with the regulations defined in Sections 43 and 44 of the District’s Utility Service Regulations. If not, energy shall be billed on General Service Schedule 2.
For miners that have negotiated a non-residential supply, there are additional terms that apply (e.g. HIGH DENSITY LOAD Schedule 35) that the miners _may_ not be complying with.
FWIU next gen DLT moving out of proof of work will probably change the electricity consumption profiles anyway. it would be really stupid to spend just a dime trying to meet that demand.
Another strain crypto currency creates is on GPU resources. Resources that could be going to AI projects. It’s why prices haven’t fallen as fast as they should.
> The three PUDs have been experimenting with policies that force miners to shoulder these extra costs and risks, while insulating ratepayers and the utilities themselves.
>1 .Chelan County, for example, created a special rate for miners and other so-called “high density loads,” or HDLs, back in 2015, that was effectively twice the residential rate.
> 2. Douglas County, meanwhile, began requiring miners to pay up front for any new infrastructure.
> 3. Grant County PUD is establishing special rates applied to companies “whose primary revenue stream is evolving and unproven” and whose product is “vulnerable to extreme value fluctuations.”
Hanging over May’s hearing was the fate of the Basin’s last big electrical customer: the Alcoa aluminum smelter, which employed more than 400 workers before it was idled several years ago thanks to competition from cheaper Chinese imports. Cryptocurrency mining won’t replace all those jobs — the process is heavily automated. But backers insist that a local mining sector, if allowed to grow, will attract other ancillary services, such as software development, and ultimately provide the Basin with some of the tech-fueled prosperity that Seattle has enjoyed.
There's a lot to chew on here. The Alcoa plant story is practically a cliche. Yet another instance of what a world overflowing with cheap stuff looks like.
The loss of the Alcoa plant means an ever bigger oversupply of electricity. Chelan County seems to have nothing to fill the gap. Why not sell the surplus to a buyer who will use the power locally?
Who decides that an aluminum manufacturer is any more or less a legitimate business than an Bitcoin miner?
It's just a part of our culture that speculators are looked down upon. They appear to be "predatory" and not produce anything of value. A manufacturer on the other hand, it is clear that it produces things that are valued by society at large. Similar reasons wall-street gets all the hate-er-aide.
I like how it is done by the utility in San Francisco. Depending on the size of your place, and your main method of heating (electric or not), there are tiers setup (based on average weather in each month) where the first X kWh are the cheapest and correspond to what they think a dwelling of that size should need. Then the next Y kWh are about 30% more expensive, then after that there is a final tier which is 60% more expensive. In this way by saving energy you save doubly - you pay for less kWh, and what you do pay for is on a cheaper tier. I think this seems like an easy way to handle these miners, while allowing non
"electricity-based" to continue unimpeded.
Why do you like it? To me it sounds stupid, it's the same electricity, it costs the same to produce and all other side effects effects like network load or pollution are the same too. Why first X units would cost less?
Even more idiotic is that it apparently depends on the size of your house, so if you have a larger home, you get more cheap electricity.
It does not cost the same amount to distribute different amounts of energy, as a matter of fact. If you build infrastructure capable of handling a certain amount of electricity plus some overhead, you want to disincentivise eating into that overhead before you can build better infrastructure.
If this was the case, it would make sense to charge for capacity, not for usage. Like, if you ever want to use more than X amps of electricity, you have to pay for upgraded wires and stuff. Doesn't explain charging less for first X units per month.
They are charged based on their amount used relative to their fair allocation.
If they use more than their fair allocation everyone else on the grid is subsidizing them so they get charged more to prevent a subsidy. If they use less than their fair allocation they subsidize other people so they're charged less to prevent subsidy.
The electric grid and the electricity that flows over it is a public utility not a commodity.
Edit: Is unpopular42 a throwaway account that you upvote with your main?
I disagree - charging for usage (even if most of your costs come from capacity) incentivises people to use less power, which means you need less grid capacity and reduces externalities (pollution due to generating). If I'm paying for 100A _regardless_, for the things I need to run at peak (say kettle+washing machine+hoover), there's little incentive to reduce my usage at other times (switching lights/devices off when they aren't in use); if I'm paying for usage, there's a very direct incentive to turn things off I'm not using (it's costing me money).
The majority of the demand is almost certainly from industrial sized operations in warehouses and not rouge miners overloading residential electrical circuits.
I'd say that's baseless speculation, considering the amount of people who treat bitcoin mining as a grow-op.
Sure, the industrial operations are the ones getting articles and showcases and blog posts, but at the same time I've seen plenty of news articles of police busting some kid for scamming/drug charges and catching him with 100 gpus in his room.
More like basic math and direct experience. My business sells power supplies to this industry. Say the average home or apartment has 200 Amp electrical service (24 Kilowatts). A typical miner takes about 12 Amps meaning you can run about 16 units maximum on home electric service. 16 units isn't really enough to reach the scale you would need to be long term profitable in the industry. That isn't to say there aren't a few fools who don't realize that and are running a small scale operation out of an apartment but this article is citing requests for _Megawatts_ of demand from single customers. That is unquestionably industrial scale.
Anecdotally i've shipped a ton of equipment to Wenatchee and every operation I've done business with has been in an industrial warehouse.
The problem boils down to: What is a fair electricity price to charge a company that adds very little benefit to the local economy? Two approaches would be:
1) charge the going local rate and treat them like any other business.
2) Charge the export rate to recover the lost revenue from outside electricity sales.
1) This is unfair, because it drives up local costs for everyone without providing local economic benefit.
2) I argue this is still unfair, because the export rate alone does not capture the value and revenue of the ability to provide backup power services (i.e. load shaping+ and firming generation++).
Across the northern border, BC Hydro has also been flooded with miners asking to purchase power. The province is powered ~98 % by hydro and residential electricity rates are ~0.07 – 0.09 $US/kWh. Power export services subsidize local rates. Revenue from export services (~15 %) & revenue from local rate payers are set to recover utility costs, while maximizing economic benefit to the province. The export rate (i.e. the price of electricity that physically flows across the border) represents only a fraction of the revenue from export services. Hydro exports have the ability to shape load+ and firm contracts for power++. The key is that power doesn’t necessarily flow across the border when load shaping and firming contracts are in place. But customers pay good money for the ability to call upon that power when it is needed. That ability is diminished by the additional electricity demand of miners. The value of that ability is not captured in the raw export rate.
+load shaping service: Import/export power so that the net-load a customer sees matches that customer’s contracted or self-generation.
++firming generation: Provide backup power to a customer who has agreed to provide power to a third party at a certain time. Should the generators of the customer fail, the exporter will quickly ramp up production to fill the gap.
---
To those calling for “free markets”:
Determining a fair rate to charge miners is difficult, because the economics of hydro power systems work differently than most other liberalized electricity markets. In liberalized markets, all generators bid how much electricity they are willing to supply at which cost, for the next hour or so. Then you stack all the cheapest generators until your demand is satisfied and, voila, that last dispatched generator dictates your market price for that hour. Large consumers can buy electricity at that fluctuating market rate, or choose to shut down. Here, miners would pay the marginal cost, fair enough.
Markets with large hydro power stations can’t work like that. Withholding a large dam from generating electricity gives the operator enough “market power” to be the price-setting generator every hour year round, which gives that operator the ability to dictate prices.
I’ve seen THREE cities in my state (cheap hydro power) invest money and land into “tech jobs” around cypto-commodities...
Which is a roundabout way of saying my state is giving away money to people intentionally wasting power for personal gain under the false impression this is good for the economy.
Wouldn't a sliding scale that get's more more expensive beyond typical medium household levels prevent penalizing normal household/commercial usage? For example, a simple rule like 90th percentile usage and above is charged 25% more.
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[ 3.7 ms ] story [ 242 ms ] threadBut if the utilities are selling more of their power to local Bitcoin miners, they’re exporting less power at those premium prices, which makes it harder to keep local rates low. Further, because much of the surplus is currently committed in long-term contracts, supplying miners with all the megawatts they want might require the utilities do something virtually unprecedented: buy power on the open market, at prices far above what locals have come to expect.
Solution: pass a law to charge miners export prices. It’s not as though Bitcoin mining helps the local economy, so you either return revenues to pre-mining levels, or drive the leeches out. Either outcome is equivalent.
Of course, if you'd like to propose some less intrusive solution I'm sure both we and the people of Central Washington would be all ears.
It's because the way to fix a bad law is to pass another law. Otherwise you're saying we should keep the bad laws we have and work around it some other way.
Sometimes fixing the symptoms actually is better, but it's not surprising when people suggest changing the code.
Now they find they can't supply export power and local power because their crystal ball didn't predict there would be a power hungry technology moving in.
But yeah, raise the prices I say.
A-8: Yes, when a taxpayer successfully “mines” virtual currency, the fair market value of the virtual currency as of the date of receipt is includible in gross income. (...)
A-9: If a taxpayer’s “mining” of virtual currency constitutes a trade or business, and the “mining” activity is not undertaken by the taxpayer as an employee, the net earnings from self-employment (generally, gross income derived from carrying on a trade or business less allowable deductions) resulting from those activities constitute self-employment income and are subject to the self-employment tax.
Since they sell excess above local prices, all local usage drives up local prices.
This would be different though, targeting a business to pay more than other commercial enterprises. That's a targeted disincentive, and if not structured generically and applied fairly it's bad policy. Seems hardly different than Comcast deliberately slowing Netflix down, not to extract revenue, but to put them out of business.
In this case, due to the fact that by taking the town's total usage up, they raise the costs for everyone in the town, you could also just see as internalizing an externality.
The local government could then issue out checks to everyone if they want, but more likely it would go towards general budget and benefit everyone.
See Chicago for an incredible example of this:
https://chicago.suntimes.com/news/parking-meters-garages-too...
Property owners in cities receive similar dividends all the time, in the form of rising property prices.
It's the same reason for why groceries in Alaska are more expensive then groceries in Florida.
Wow. Any municipality who falls for this crock of shit would be crazy.
Since this argument has been made however, they could make local prices contingent on number of jobs. If you consume x power employing less than y local employees, pay the export rate.
In this way, they can protect their power industry and still remain attractive to other businesses who might bring other benefits to the area without having to redefine who is and isn’t allowed.
> In other cases, utility crews responding to unusual spikes in power usage have found racks of remotely controlled servers whirring away in empty apartments.
House and apartment rental and sale prices are lower than the Seattle area as well. You could rent a 1 bedroom apartment as a "weekend getaway studio with attached server room".
One alternative that would drive their intentions is that Bitcoin miners must be Washington State businesses, registered in state and with offices in-state. There are work-arounds for this, but it's another hurdle for foreign groups to overcome.
If approved you now have a commercially rated site and have to pay 'business rates' (local tax based on the value of the property and the use it is put to) to the local authority. Sounds like there is a lot of opportunity to charge potential miners...
I think even commercial electric rates in the UK are around £0.17 kwh, so mining is not likely to trouble us any time soon!
A normal home does not have a server room however.
I’d very much prefer a quiet white noise from the racks in the above unit than someone arguing at 3am or a stupid toddler screaming. You can easily tune out “stable” noise like the one produced by fans, but you can’t for irregular noise like people talking or someone dropping heavy stuff at night.
Until you factor in the risk of fire, environmental impact, and the fact that when bitcoin goes bust which will ultimately happen (nothing lasts forever), the county will be left holding the bag in a similar fashion to other major industries of old.
Is it actually riskier than a resident living in the same place? I don’t think so.
A faulty mining installation would catch fire early on, and if that doesn’t occur then it’s mostly safe. A resident on the other hand would be using risky appliances every day (cooker, oven, heating, hair dryer, etc), which combined with the potential human error, seems like a bigger risk.
> environmental impact
How does zoning change this in any way? Whether you’re drawing tons of energy from a residential or commercial building doesn’t change the fact that energy could be damaging the environment. I’d argue that in this particular case though, the energy we’re talking about is from a hydroelectric plant and so fully renewable.
> the county will be left holding the bag
What would that “bag” be? Sure, the miners would pull out, but then the town would be back at the exact situation as before mining, albeit with an upgraded electrical and network infrastructure paid by the miners - I don’t see how this is a bad thing.
If you don’t see the difference between a household appliance that sporadically uses some electricity vs a mining ring that continually draws very high current on wire not rated for that usage, then I guess we can’t have an intellectual discussion. Especially as the source article mentions miner fires that have already happened. Heck, depending on the age of the place, it could still be aluminum wiring even which is even worse.
> How does zoning change this in any way?
You don’t think all these new infrastructure that will ultimately go to waste doesn’t have an environtal impact?
> albeit with an upgraded electrical and network infrastructure paid by the miners
You think a short (as in anything under 5+ years) lived burst in electricity sales will pay for all that infrastructure they need to build? Especially as they could make more money exporting that capacity via existing infrastructure to other areas?
Getting more power to your place is between the power company and property owner not the government, I can get as much power feeds as the power company will sell me, and generally they will only ask question related to saftey. Want 400amp service to your Garage, no problem 99.9% of the time
Aside from this hyperbolic statement being completely unfeasible and moronic on its face, provided there is not clear, articulable danger to my person or my propery you should be allowed to do anything you want on your property, including running BitCoin Miners.
if you cross into posing a direct and articulable danger to others then that can be address on a case by case basis, but the comments I was responding to were going on about "commercial use of property" and how they could not believe in the US a person was allowed to run any mining equipment in a residential home. No where did any the commenters I was replying to stated any articulable dangers they were concerned with.
Let me as you this, do you support zoning regulation on this like color of the home, if you have a garden on your front yard, the type and height of grass (or mandates that you have grass) etc etc etc etc
Which is why I went on the clear negatives that it poses.
> do you support zoning regulation on this like color of the home, if you have a garden on your front yard, the type and height of grass (or mandates that you have grass)
No, but I was not arguing that the government _should_ be able to regulate _everything_, but that when negative effects can be identified, "it is in the privacy of my own home" is not enough to counter that -- the negative effects spread beyond your home, and detrimentally effect others (in a concrete way, not just that it is something they don't like).
Yes, HN has a long history of being Authoritarian. Libertarian views are not welcome here.
For example, the electricity provider probably objects precisely when the current you're drawing exceeds the safe limits of their equipment and wiring. If they're particularly on the ball, they at least come investigate as soon as they notice an unusually high current-draw for that individual residence.
You're generally free to exceed the safety limits of the equipment and wiring within your own structure, since you pay all the costs of any resulting incident/accident. But if you're covering those costs via a homeowner's insurance policy, that policy/company might have some things to say about current loads and building codes, as prerequisites for covering you.
In a rental property your ability to run mining rigs would depend on the lease, and the landlord's degree of vigilance in monitoring unusual electrical loads. If there's an incident or fire due to current-draw nobody noticed, it probably ends up in court. If you promised (by signing a lease with a relevant clause in it) that you wouldn't engage in excessive current-drawing activities, you lose that case pretty much instantly. Otherwise it'll be up to their side to prove that your negligence caused any losses or damages to the landlord's property, not to mention other tenants' property if they also sue you.
The comment I was replying to specifically says they do...
Bitcoin is the new monorail.
That way the average person on the street doesn't lose, yet the miners are encouraged to get lost.
This leaves the utility with a dilemma. Bitcoin miners can up and move pretty easily, but the hydro dams are stuck for life. If somewhere cheaper pops up, or if a double spend attack causes a bitocalpyse, the utility has little recourse but to pass on the costs to remaining consumers.
https://www.trustnodes.com/2018/04/28/australias-dirtiest-co...
So that'll never happen.
- people trading 'coins' in the same way Pokemon / WWF kids trade cards.
- thinking this is actually a long-term 'investment' strategy (well its idiots trading with each other ...)
- to top it off, siphoning off electricity and giving a load of shitty excuses 'it could be like Seattle's.
I don't know where to begin with this Bitcoin crap; it's gotten crazy that so many naive people are into this plopping their hard-earned money into a well-functioning sinkhole.
I don't want to say to my kids, "in my day you could still buy a bitcoin for only $7k."
Significantly less than $7k worth.
I paid £30 for a framed print and that sits on the wall doing nothing (it's resale value is probably a fiver on ebay), I have even bought a particularly pleasant rock on more than one occasion, pet or not. I have no use for them. Some are sat on the side because I like to look at the impressions of the creatures who died in it. Some are embedded in my wife's engagement ring (a pointless piece of bent metal), I'm not sure I get any value for them any more since we are married.
Why do we ascribe value to anything? I have a piece of paper in my wallet with a picture of the queen on. It's just a piece of paper, yet if I take it to the shop they will swap it for food! If I take it to the bank they will swap it for a number in a database (woop). Yet if I have a big number in that database or a lot of those special pictures I become a Big Man in society.
Yet, through no fault of my own, if I wanted to swap those pieces of paper for pieces with dead US presidents on, I would get 20% less than I would have 2 years ago! It would be worse but the value of dead-president-paper is not as high as it was. Holding Queen-paper or Dead-president-paper sounds like a huge risk.
George Soros said it best, " All of financial history is one lie and deceit after another, your job as a speculator is to get on the lie while it is being propagated and get off before everyone finds out".
I feel like a lot of folks are going to get burned but what do I know? I could be full of shit....
Bill Gates May 2018: "I would short bitcoin if I could." <-- He can. He didn't bother to look into it though.
Elon Musk also said on stage that Bitcoin is mainly for illegal use. Based on what? https://youtu.be/7WMJs1v63C0?t=2m50s
He barely knows anything about crypto, and neither do these other guys, and they talk like they do. They DO have a horse in this race, and it's clearly in fiat USD. They're not omniscient and neither are we, so let's keep our eyes and ears open.
> I don't know where to begin with this Bitcoin crap
Begin by addressing the actual strengths of blockchain tech (I think the weaknesses are fairly stated in this thread).
So far, in its short life, it has provided:
1) A store of value that can be easily held on the person and that lives outside the state-corporate banking infrastructure
2) A way to buy psychoactive compounds and other medicines which have been wrongly (and violently) prohibited.
Although I have no problem with Pokemon, nor do I judge people's proclivity to collect them, I do think that cryptocurrency has already achieved something that Pokemon haven't.
edit: Ouch - quite a lot of downvotes with no rebuttal. I guess we're in an anti-blockchain mood this morning.
And that idea is pretty powerful (even if the manifestations thus far still seem to be pretty much the above as well).
Even so, how much wealth in this world is based in "actual, hard currency"? How many developers have unvested options? How much of Musk's wealth is in the bank as opposed to tied up in his businesses? I think you're trying to stand up a strawman.
Yes. Definitely.
In other words, most things don't last very long, but things that do last for a long time tend to stick around a lot longer than you might normally expect them to. Like people predicting the death of Facebook. Sure, something will probably eventually take it down or become the next Facebook. But it's been around for so long now, a betting man shouldn't bet on it happening anytime soon.
Now one might argue that on the day Myspace died this effect would predict that it would be around for yet another 6+ years (or whatever it ended up being). And to that I'd say that this is a guide for predicting future behavior, not a crystal ball that can accurately predict everything forever. And some would argue that the writing was on the wall for Myspace long before it actually went kaput anyway.
So Bitcoin has been around in some form or another for 9+ years, and withstood a huge laundry list of setbacks, tests of its security, and evolution of the ecosystem in the meantime. So it's probably going to stick around for awhile.
Meanwhile, XYZCoin and it's hot new ICO has been around for about five days, so there's nothing to suggest that it's going to stick around for very long and you should be a lot more careful about putting your money into it.
More info on the Lindy Effect: https://en.wikipedia.org/wiki/Lindy_effect
The opposite way to pose this is: Cryptocurrencies have been around for 9+ years, and there has been literally 0 use for it apart from conning rubes on the internet. The important thing to ask is whether it has a purpose and has it delivered on that purpose. There's really only one theoretical purpose that it's meant to serve - being free from tyrannical government. Well that kind of worked when capital fled into it from China - but there's also been crack downs. It also doesn't explain the US fascination.
I think there comes a point where 9 years in, you have to ask: What purpose does cryptocurrency serve beyond enriching people who are already invested.
The externalities. This very thread is about how Bitcoin is messing up power grids and will soon be responsible for a non-negligible percentage of Earth's entire power usage (and the attendant pollution). It's not consequence-free fun.
That's weird, I've been using it to buy stuff off amazon and aliexpress. Am I a conned rube?
Does that mean Visa is conning rubes as well?
How? Neither company seems to accept Bitcoin directly.
You've got some strong arms on you my friend, moving those goal posts so far so fast.
I pay with bitcoin. Stuff arrives in the mail. I am using bitcoin.
>Cryptocurrencies have been around for 9+ years, and there has been literally 0 use for it apart from conning rubes on the internet.
So...
>Yes, you are using Bitcoin
Yes, I am. I don't understand why you two are so angrily and bitterly agreeing with me.
Call it gambling if you will. What is the intrinsic value of a game of blackjack? None, yet an entire industry is propped up by it.
Limited scope and obviously doesn't justify the money that is swirling in crypto right now.
However, if we want digital things to be non-fungible we're probably going to need something like a block chain. Cryptokitties(as beanie-baby-esque as they are) and the implementation of the ERC-271 token come to mind.
Again I realize cryptokittes are not really a great example other than proof of concept, but imagine with me for a second a fine art market where all the art is digital, this requires a decentralized non-fungible token, maybe digital house or car keys would be another thing where we want to limit the number of people with access to the thing, again if we don't want to trust someone like say equifax, with control over that we're going to want a decentralized non-fungible token.
I realize these aren't necessarily the best examples of non-fungible assets we might want one day. However it seems absurd to me that moving forward society won't at some point demand some digital asset that is non-fungible. If that assumption holds true then some form of cypto-currency is going to be necessary to provide such an asset.
Bitcoin has become the gold standard for crypto and many people invest on the basis that there'll be huge growth in the area of blockchain technology and tokenised digital assets in the years to come.
If Bitcoin remains the gold standard for crypto then it's value will rise accordingly.
Isn't that what Bitcoin is doing as well? Capturing people's attention as well as development resources (minds/energy) from some of the smartest people right now?
Crypto is meaningless, stock is actually owning part of a company.
The fact that bitcoin has gone 10 years, with limited use, to me signals just how amazing the technology is. Ten years is nothing for a tech that can last 1000 (or more..).
Bitcoin’s success in Venezuela is because it is a inflation hedge. It has allowed Venezuelaeans to hold on to their savings and out of reach from the government’s ability to confisticate wealth via inflation.
It is working exactly as Satoshi intended it to.
This is the problem that Buffett has with cryptocurrencies.
When you buy shares in a company you are buying claims to its future earnings at least in theory. Theory being that should the company not serve shareholder needs you can force the company to distribute the earnings/dissolve/merge etc etc. (Not going into the whole modern abomination to strip lesser shareholders of their rights to vote as Google, Facebook, Snap have done with their tiered stocks).
When you are buying Bitcoin or any other cryptocurrency and yes that means ICOs too you are buying digital tokens with no claims to anything besides being a proof of having that token. It is solely 'castles in the air' which Keynes so long ago stated regarding stock market but in the stock market it is not the sole factor.
In some ways cryptocurrency is closer to regular currency but not backed by the government's mandate to receive taxes in said currency.
In other ways cryptocurrency is closer to tulips,gold,MagicTheGathering cards in that the value is based on something that some number of people agree on(ie the market).
Except cryptocurrency has no utility besides being a token, wherein tulips, gold and MagicTheGathering cards possess some utility outside being a token of exchange.
Two: I know you said >Not going into the whole modern abomination to strip lesser shareholders of their rights to vote as Google, Facebook, Snap have done with their tiered stocks
However if you want to argue you're problems with crypto (there are many) we need to make arguments using the way things are in the real world.
Given I'm a retail investor. In one universe I place a bet on Snap for 50k. In another I took that same 50k and put it into bitcoin. In both universes my bet goes bad, both asset's price per unit goes to 0. Snap goes through the process of being liquidated. Remember I'm a retail investor, I own common stock.
Now am I better off in one universe over another? I'd argue that I'm not. However if I were Warren Buffet, I'd have been much better off bought Snap as I would have preferred shares.
Buying shares is like investing 50k in your Uncle Eddies seashell harvesting venture. In return you receive 50% share in his venture that is you get half of all future seashells harvested by Eddie.
Buying cryptocurrencies is like giving 50k USD to your Uncle Eddie and getting some seashells back but that is it! There is an active market for these seashells and price goes up and down.
However you do not get to claim any more seashells produced by Uncle Eddie.
Buying common shares implies certain rights to some enterprise while buying cryptocurrencies implies nothing.
There's a fundamental difference between buying shares of a publicly traded company on a regulated exchange and investing in bitcoin. This is quite literally comparing apples and oranges - your examples are not only different in kind, but in purpose. Also, there is a large, rather well funded government institution who aggressively works to make sure the stock market isn't subject to the sorts of abject manipulation, ponzi schemes, and other such unsavoriness that Bitcoin has been subject to. (Side note - watching the Bitcoin market is like watching the last 150 years of finance happen in 2-3 years. It's an interesting object lesson in market manipulation and why the SEC maybe isn't a bad thing).
As to Facebook/Snap being digital crap no one needs - yes. However, just because there's no physical good being created doesn't mean their value is entirely ephemeral/a financial illusion. Facebook/Snap create value by solving a problem people are willing to spend money to solve. Bitcoin creates value by...well it doesn't yet. People invest because they hope that "there'll be huge growth in the area of blockchain technology and tokenised digital assets in the years to come." That's a nice thought, but it's an assumption.
>If Bitcoin remains the gold standard for crypto then it's value will rise accordingly.
It's funny that you mention the gold standard, a standard that was dropped because of its votility, the fact that it was subject to manipulation, and the fact that it benefited some segments of the market FAR more than other.
>...many people invest on the basis that there'll be huge growth in the area of blockchain technology and tokenised digital assets in the years to come.
I think this is undeniably true. However, I think the assumption that bitcoin will be the vehicle for this growth is incorrect, or more charitably, overly optimistic. Bitcoin has accrued a lot of non-technical overhead that I think will prevent it from being used to drive these solutions - things like its association with speculation, the fact that the majority of miners are on the Chinese mainland, etc. I think the growth in blockchain technology will come from companies and individuals taking the concepts of the blockchain and using them to build products with real value (as in, they solve a problem that someone is willing to pay money to have solved). Bitcoin's value (sadly) doesn't come from the technology, which is fascinating and interesting - it comes from the fact that it's created an unregulated market with no barriers to access, which has allowed rampant speculation, incessant hype about 'the technology of the future', and a continual influx of new money to create 'value' that ultimately, has no real value.
That's been the 'investment thesis' for the past 5-8 years.
And people have been bidding these things up ever higher, because any day now someone's going to figure out something actually useful to do with them...
(And in the mean time if some coiners get to skim a little cream from the irrational exuberance, I'm sure they don't mind to do so.)
But where is any coherent trend line supporting claims of huge growth in the area of blockchain technology and tokenised digital assets in the years to come.?
Seems to be wishful thinking that is completely at odds with the reality of these systems.
Am I missing something?
If you want advancement in graphics cards to come more quickly, it’s not a bad trend.
Hopefully both can be achieved.
Precedent isn’t here.
But, if you are willing to say what happened in the yesterday will happen tomorrow, I assume you’ve taken a HELOC put on your house and invested in bitcoin - rift?
People will start taking mining hardware offline. This will result in a lot of idle capacity. There will be a number of people capable of pulling off a 51% attack. And if the hash rate falls very quickly, say 50% in a week, the difficulty adjustment will be unable to keep up. This would have all sorts of nasty effects.
If the price goes to $4000 it should go to zero. That's assuming that the "investors" will behave sensibly, which is never a safe bet.
Will you short bitcoin then?
- people trading 'stocks' in the same way Pokemon / WWF kids trade cards.
- thinking this is actually a long-term 'investment' strategy (well its idiots trading with each other ...)
- to top it off, siphoning off capital and giving a load of shitty excuses 'it could be like Detroit at the beginning of the 20th century.
Many people were left holding pets.com stocks, but others were left holding Amazon stocks.
Most of the things that you point out are truisms that the people that have been in the bitcoin space for a few years also see. I would suggest you make an effort, and try to see through all the bullshit projects or outright scams, and you will see that there is real value in what bitcoin and a handful of other projects are trying to build. If you want to avoid the current noise, read what cypherpunks were writing about in 1998: http://cypherpunks.venona.com/date/1998/12/msg00203.html
Amazon and Pets.com didn’t possess truly novel tech, to a trained eye
I don’t think truly novel tech matters much to most people.
I think ease of utilitarian life is good enough
We don’t need the energy sucking monstrosity that are the data centers we have if we looked at different models of commerce
This is just getting people to be tribal over something that appears magical but will fade out
Goodhart’s Law, Buffets Institutional imperative, and similar ideas, will win out. Human quest for novelty will end bitcoin and its tribal urges for nostalgia and fetishizing their LEGO train
Humanity doesn’t care to ogle dead men’s workshops showcasing their individual brilliance for long
10 years into Bitcoin there's still no reason for someone to buy in other than speculation. It's not competitive as a currency and the current “store of value” pivot is undercut by the lack of fundamentals. One particular reason why that comparison doesn't work is that if you had, say, bought AMZN in 1997 even if the stock didn't do great you owned part of a profitable book seller which could carry on just fine even if it never saw rapid growth. Bitcoin doesn't have any value other than its current popularity so there's no floor on the losses if people switch to something else.
1. I actually sat in on some calls with Pets.com around the time one of our clients was thinking about buying them and it was quickly evident that they had no strategy beyond cashing out at the IPO.
Besides, if I lived in Venezuela or Russia, would I really want to record my black market activities in a public ledger which is hard to disavow?
>10 years into Bitcoin there's still no reason for someone to buy in other than speculation
This is simply completely wrong, perhaps you should research the subject a little bit more.
I’m not saying it can’t be used but just that there aren’t many reasons other than speculation or an ideological stance. If I was, say, the corner coffee shop what would balance out the extra fees, delays, and lack of fraud protection?
The other reason it matters is that if something is primarily used for illegal activities that'll really hold back the whole system: most businesses aren't going to offer a payment option which makes them look shady, people are going to hesitate to use have the software installed, running an exchange will be even riskier, etc.
For Bitcoin in particular, there's also the practical risk that doing something illegal in a public ledger with non-repudiation guarantees is not generally a good call.
It sounds like you are talking about credit cards and not bitcoin.
Compared to credit cards, bitcoin has extremely low fees and fast payments. The fraud protection for merchants is far superior compared to any credit card payment solution.
It seems pretty obvious that most people spreading this kind of bullshit have never actually tried to use bitcoin, and have instead built their knowledge based on forum posts by other uninformed people.
Take a look at what is happening in Venezuela with bitcoin, and you will see why your statement is wrong. The fact bitcoin, an open source project, continues to flourish with some of the brightest minds in computer science ten years after its foundation speaks to its core strength: the removal of trust.
I sold an old phone through traditional fiat a few months ago, it took paypal 3 weeks to process my payment. With bitcoin, I could have been paid with in the hour.
Is anybody actually using Bitcoin as a currency in Venezuela? I can only find references to people mining excessively there because the electricity is so subsidized.
Most people in the west have about the same use for gold[0] and bitcoin - speculation, gamble, "investment". However, people of Venezuela, Turkey, Libya, Iran and even Russia have a lot of use for gold (and bitcoin): A store of value they can take with them if they leave. And unlike gold, bitcoin can be made confiscation proof. The official currencies of these places have more volatility and less stability than BTC.
[0] Gold does have ornamental and industrial use, but that's NOT why people buy it, and not why it is valued the way it is. The "investment" claims on gold outnumbers the industrial/ornamental claims by some 3 or 4 orders of magnitude.
At this point in time, the same is certainly not true for the people of Iran or Venezuela, where there are capital controls, and the only way to get a different currency is on the black market. Effectively, compared to the west, everyone there is "on the wrong side of the government".
> There’s zero reason in principle that it is any harder or easier for an oppressive government to prevent capital outflows to bitcoin than to British bank accounts.
In principle that's true, but that just makes bitcoin's raison d'etre more evident. At this point in time it does not seem to be needed, but it may become needed with less than a day's notice. This has happened to the people of Cyprus (a "western" European country). Even the US confiscated gold in the 1930's.
History does not repeat, but it rhymes. Bitcoin is a hedge; it's far from perfect, it has a lot of drawbacks, but at this point in time , it is more useful than gold for people who might have to flee.
The dark hints about how any government may become oppressive is a red herring. The issue isn’t that bitcoin isn’t needed because my government isn’t currently oppressive, it’s that bitcoin’s utility in the face of an oppressive government is wildly exaggerated.
You are attributing magic powers to bitcoins that they do not have. Black markets are not invulnerable to government crackdowns because they are digital. On the contrary, digital networks are in many ways easier to control centrally than distributed underground physical networks.
This especially bad for Bitcoin since unlike cash they’d get your full history and quickly deanonymize everyone you know.
Is it still as easy? Probably not, I'm not up to date. Could people who have done that get in trouble for that in the future (thanks to bitcoins long memory)? possibly, if their opsec wasn't top notch and even if it was top-notch but they were unlucky enough to use a mixer that cooperates with the chinese government.
And Erdogan's turkey is also a great example; While the "coup" was happening, it was possible, even easy, to move money out of the country using bitcoin (not so fiat money). Quite a few people left the country afterwards, and many were arrested regardless of phone app. I don't know how many of them took their wealth with them in bitcoin, but they had much easier time doing that than any other way. at the time
But if you have managed to acquire bitcoin, e.g. before a government crackdown, or some other way through help from people in other countries, it still provides the "cross border value store" function that gold cannot by virtue of being hard to move.
> There’s nothing to stop an oppressive government from preventing its people from buying bitcoin the same as they prevent them from buying pounds and wiring them to British banks.
There's also nothing to stop an oppressive government from killing its people (and some do). But oppressive is not binary, and people have used bitcoin to "smuggle" money out of (at least) Venezuela and China, despite capital controls and government crackdown, in ways that they weren't able to do with british pounds (and which would have been much harder and riskier with physical gold).
> You are attributing magic powers to bitcoins that they do not have. Black markets are not invulnerable to government crackdowns because they are digital. On the contrary, digital networks are in many ways easier to control centrally than distributed underground physical networks.
I am not attributing any magic powers. I am observing the reality as it happens now ; governments crack down on digital networks and black markets but it's much, much harder for them to shut down than bank transfers.
To stop bank transfers, all you need to do these days as a government is click the right button. To take down the Silk Road, the US government took many months and a lot of work; an oppressive regime might have done that more quickly and swiftly, but it would still have taken considerably more effort than shutting down wire transfers. The special feature cryptocurrencies have is ease of carrying across borders .
> The dark hints about how any government may become oppressive is a red herring. The issue isn’t that bitcoin isn’t needed because my government isn’t currently oppressive, it’s that bitcoins utility in the face of an oppressive government is wildly exaggerated.
Oppressive is not binary. Cypriots were (perhaps still are) subjected to very strict capital controls, with no attempt to crackdown on bitcoin.
I am not lamenting the downfall of Silk Road - I think it should have been shut down. I was pointing out that "an oppressive government can do everything" is a weak argument, because we have experience showing the limit and effort needed.
All I am saying that bitcoin has some of the same uses that gold has, albeit in an easier-to-carry-across-border and harder-to-confiscate way -- which was a response to G-G-..-G-P saying "bitcoin has found no use".
Now, "illegal" is a problematic word, because it is a technical definition that changes with time and location. It is now legal to own gold in the US, and it was legal in the 1920's but it was illegal to do so in the 1930s. Gold was confiscated, and (since USD was still denominated in gold at the time), it's value in USD was doubled overnight, or rather, the value of USD in gold was halved overnight.
It is still illegal for an unmarried couple to kiss, perhaps even hold hands in public, in the Saudi Arabia.
The technical legality of owning gold in this case is an interesting discussion, but I am interested in the properties and implications of an un-confiscatable store of value, which in some (limited) ways cryptocurrencies are. It keeps governments in check in a way that fiat currency cannot.
Unless you believe every single government anywhere in the world is, at all times, always "just" and "right" and "good" (for whatever definitions of those adjectives), then it is a good that some "illegal" acts in some places and some times have mitigations. And at this point in time, bitcoin provides these mitigations for the people of venezuela and iran, and has provided them earlier for the people of china.
Afaik Bitcoin is handled the same as cash: they don't really check how much you have, but they will come down hard when you start spending more than you should be able to.
Technically, how can they confiscate them? They cannot.
They can tax them 100% or 150%, true. And they can imprison or kill their taxpayers if they with. true.
But if I managed to cross the border from (hypothetically) malicious Sweden to (hypothetically) benevolent Liberia, with the private key in my head, what can they do about it?
They can, and money governments in the past have, deny me passage with anything of value but my clothes - it is often the case that anything of value gets taken at the border (hell, it is likely the US will take anything above $10,000 on your person unless you are very well equipped legally). But there is no technical way for them to do that with bitcoin, and for that matter to even know that you carry the private key of a $1B wallet in your head, unless they have researched it before hand -- which, at last for now, is hard to do for the entire population.
> To me it seems more like a digital crap honestly and I can’t wait for the day when it finally disappears.
Art pieces that go for >$1M feels like analog organic crap. But the value is determined by the market, not but our feeling.
> Sadly it will be in any case too late given the massive amount of energy and co2 thrown away..
I agree bitcoin is likely wasting significant energy and co2, but ...
Have your ever seen a rough estimate of the costs (in resources / energy / co2) that our existing monetary system imposes? It is certainly not free, and e.g. in a lot of places more than 1% of real-estate / energy is consumed by financial entities, many of which have usefulness to society arguably comparable to bitcoin.
I have looked for a study as such and has not found one.
(sidenote: some estimates are that 1% of global energy use goes towards clothes drying. probably provides even less value to society than bitcoin)
If you're comparing with the Internet, I'd say 10 years is still quite early into the Bitcoin and Blockchain space. You could say the Internet of 1999 was almost 15-20 years of development from the time TCP/IP was introduced on the ARPANET.
With the attention that Blockchain has received in the past year and the sheer number of smart people working in this field (yes there are plenty of scammers as well but you can't deny smart people are flocking to it right now), I'm pretty sure you'll be surprised of what it looks like in just another 3 years or so.
More interestingly, however, is that Internet was difficult to get and expensive throughout most of that period, not to mention the slow and expensive connection speeds of that era, all of which limited adoption substantially. Even with those barriers to adoption, however, there was plenty of demand because it was immediately useful to have email, Usenet (at least in technical fields), FTP, etc. even before the explosion of activity around the web. When the web boomed, millions of people paid (often by the minute) to surf it at 56K or less.
In contrast, Bitcoin has been available to almost anyone on the Internet for many years without anything like those barriers to adoption but most people haven't had a reason to care.
You could just as easily point out that investing in beanie babies looked stupid, or any of a number of other totally failed ideas seemed stupid.
Most things fail. Your comparison adds no meaningful information and is attempting to mislead based on fallacious reasoning.
I wasn't trying to make any comparisons, since these are two very different situations.
If you had said blockchain vs internet then it might have made for a marginally plausible line of reasoning. Blockchain at least has some proven real life applications that scale.
Lasing out against noise or heat I can understand, but unless electricity is being subsidized, I can't fathom the line of logic people take to justify lashing out against how someone chooses to use electricity they're pay for.
I suspect it's due to irrational hate rather than sound reasoning.
Furthermore, electricity prices do no include environmental externalities. So when you burn so much electricity for things that many people deem wasteful, those people do have reasons to get pissed and yell at you in the internet. Wellcome to modern society!
Humans are hilarious. Anyone here old enough to remember the dot-com boom with absurd business models, that, when questioned, got the response that you obviously just don't 'get it'.
Proof of energy consuming work as currency is a sure path to environmental catastrophe.
It's just on a larger scale of stupidity.
https://www.itnews.com.au/news/turnbull-directed-dta-to-stud...
“Lots of vendors were [also] coming to government and talking about blockchain.”
Not a good way to determine expenditure...
If your computer could do your work for you, leaving you to do whatever you want in life, why would you NOT want that? The stupidity is that we are not all doing this, that we are not tearing down the halls of congress for cheaper power collection methods. What is crazy is that we never demand accountability from our traditional finance system, leaving us to trust a few tremendously wealthy individuals who have no obligation to the rest of society. With bitcoin, there is no trust, in fact this is even a key feature: remove the trust. I think this is an idea that is very powerful, and is something that people like.
If you are looking at bitcoin as an investment, then you are already looking at it all wrong. This isn't about investing, its about financial independence.
I would suggest you look into the fundamentals again.
So this leaves me to do what I want. I can get another job, or not. Who wouldn't want this? Its a simple idea, trade computation for social mobility. There are people doing this all over Venezuela right now.
It stuck pretty hard with me. The truth about bitcoin is like beaniebabies they have no value, and despite concensus other wise could at any time be ruined by the decisions of a dozen people or so. Anyone that still believes the “it’s decentralized!!” just because the database is - nonsense has a dose of reality coming.
Do I wish I would have gotten in at $5, yea, would I have sold at $20 not $20,000 almost certainly. But it’s over, it’s a fools game now.
If all you want to continue posting emotional comments on how much you hate bitcoin, then by all means I wont stop you. but to attempt to dismiss the currency as a toy strikes me as delusional and a bit sad. Approach this issue (and any other) with a level head. Don't let emotions take control you like this.
Add the power usage, the graphic card shortage and the illegal activities and I suspect you're two to three order of magnitude larger than legitimate uses. Sooner or later cryptocurrencies will get banned, or at least fully regulated.
If you want to continue shouting, be my guest. The rest of use will continue accepting and transacting with these currencies.
I wonder what source they will use in response. Generators, solar, move to Quebec?
My problem with that statement is that it doesn't actually answer the question -- it smacks of journalistic supposition and no root facts.
I can run two refrigerators, two freezers and an AC unit all day and night and push myself into the top tier of energy usage, being the equivalent of a closet full of computers running 24/7, but all that would do is push myself into the top tier and cost me lots of moolah -- what's the line between authorized and unauthorized?
Unless those people are bypassing breakers I don’t see what’s the big deal. If the electrical company tells you that you can draw 20A and gives you a 20A breaker then you should be allowed to use it.
> In one instance last year, the transformer outside a bootleg miner’s home overheated and touched off a grass fire, Chelan County PUD officials say.
If a transformer is rated to supply 1000A then you should not under any circumstances allow more to be drawn from it.
However when you sign up for Services you sign up for a given Amp level of service, the Power company then has the expectation to be able to supply you with that level of current at that location
Most residential Homes have either 100 or 200amp service. 100amp service would probably be enough to run about 50 cards (assuming each card running at at 250w power draw that may be high no idea)
That's why they have a different service for business users. If they were equipped to service every home at 100% all of the time, your bill would be about 10x what it currently is.
Another solution is to make a proper “burstable” tariff with the corresponding meter that would give you a baseline current allowance plus a peak current allowance for X seconds.
As it stands however they are selling packages promising X amps and are pissed off because someone is actually using X amps. Well they definitely don’t earn any sympathy from me - this kind of behaviour reeks of scum.
Look, I dislike Bitcoin too, but what I dislike even more is companies making money promising X and then actually cutting you off should you dare to use that X. At the moment, the "miners" are paying for an energy tariff that promises them X and are using X; the fact they're using it on Bitcoin is completely irrelevant, the problem is that a company is making money on false promises and somehow the buyer is the one at fault?
We've already got this bullshit with "unlimited" data, let's not set a precedent by tolerating this for energy tariffs. If the grid can't sustain everyone using 100 amps then they shouldn't be selling 100 amp tariffs and should switch to "burstable" tariffs with a continuous allowance of let's say 50 amps and a "burst" allowance of 100 amps for X seconds.
I'm going to assume you don't live in the US, or haven't ever actually built a new house. You are absolutely not promised the full usage 100% of the time. And they're very clear about that. It's why you must hire a licensed electrician to fill out a load sheet before they'll put a shovel in the ground or a ladder in the air to run service to your premises.
I'm not sure why you keep claiming that, but there isn't a power company in the US that had EVER promised a residential Customer that they could use 100% of the rated line all the time.
The term "industrial" usually applies to scale.
> Where a portion of a dwelling is used regularly for the conduct of business or where a portion of the electricity supplied is used for other than domestic and incidental farm power, service may be supplied on this Schedule, provided the energy used is in accordance with the regulations defined in Sections 43 and 44 of the District’s Utility Service Regulations. If not, energy shall be billed on General Service Schedule 2.
https://www.chelanpud.org/docs/default-source/default-docume... (I don't believe the Section 43/44 exception applies, as it is discussing temporary service per https://www.chelanpud.org/docs/default-source/default-docume...)
For miners that have negotiated a non-residential supply, there are additional terms that apply (e.g. HIGH DENSITY LOAD Schedule 35) that the miners _may_ not be complying with.
"Beginning Jan. 1, 2012, Chelan County PUD moved to a flat residential rate for electricity of just 2.7 cents per kilowatt hour."[1]
"energy costs can run as low as 2.88¢ per kWh and average 4.13¢ per kWh statewide for industrial customers." [2]
[1] https://www.chelanpud.org/my-pud-services/rates-and-policies
[2] http://choosewashingtonstate.com/why-washington/our-strength...
[edit] The parent article does state a price of 3cents/kwh.
There are already solutions in the article:
> The three PUDs have been experimenting with policies that force miners to shoulder these extra costs and risks, while insulating ratepayers and the utilities themselves.
>1 .Chelan County, for example, created a special rate for miners and other so-called “high density loads,” or HDLs, back in 2015, that was effectively twice the residential rate.
> 2. Douglas County, meanwhile, began requiring miners to pay up front for any new infrastructure.
> 3. Grant County PUD is establishing special rates applied to companies “whose primary revenue stream is evolving and unproven” and whose product is “vulnerable to extreme value fluctuations.”
There's a lot to chew on here. The Alcoa plant story is practically a cliche. Yet another instance of what a world overflowing with cheap stuff looks like.
The loss of the Alcoa plant means an ever bigger oversupply of electricity. Chelan County seems to have nothing to fill the gap. Why not sell the surplus to a buyer who will use the power locally?
Who decides that an aluminum manufacturer is any more or less a legitimate business than an Bitcoin miner?
Even more idiotic is that it apparently depends on the size of your house, so if you have a larger home, you get more cheap electricity.
If they use more than their fair allocation everyone else on the grid is subsidizing them so they get charged more to prevent a subsidy. If they use less than their fair allocation they subsidize other people so they're charged less to prevent subsidy.
The electric grid and the electricity that flows over it is a public utility not a commodity.
Edit: Is unpopular42 a throwaway account that you upvote with your main?
Sure, the industrial operations are the ones getting articles and showcases and blog posts, but at the same time I've seen plenty of news articles of police busting some kid for scamming/drug charges and catching him with 100 gpus in his room.
Anecdotally i've shipped a ton of equipment to Wenatchee and every operation I've done business with has been in an industrial warehouse.
1) This is unfair, because it drives up local costs for everyone without providing local economic benefit.
2) I argue this is still unfair, because the export rate alone does not capture the value and revenue of the ability to provide backup power services (i.e. load shaping+ and firming generation++).
Across the northern border, BC Hydro has also been flooded with miners asking to purchase power. The province is powered ~98 % by hydro and residential electricity rates are ~0.07 – 0.09 $US/kWh. Power export services subsidize local rates. Revenue from export services (~15 %) & revenue from local rate payers are set to recover utility costs, while maximizing economic benefit to the province. The export rate (i.e. the price of electricity that physically flows across the border) represents only a fraction of the revenue from export services. Hydro exports have the ability to shape load+ and firm contracts for power++. The key is that power doesn’t necessarily flow across the border when load shaping and firming contracts are in place. But customers pay good money for the ability to call upon that power when it is needed. That ability is diminished by the additional electricity demand of miners. The value of that ability is not captured in the raw export rate.
+load shaping service: Import/export power so that the net-load a customer sees matches that customer’s contracted or self-generation.
++firming generation: Provide backup power to a customer who has agreed to provide power to a third party at a certain time. Should the generators of the customer fail, the exporter will quickly ramp up production to fill the gap.
---
To those calling for “free markets”:
Determining a fair rate to charge miners is difficult, because the economics of hydro power systems work differently than most other liberalized electricity markets. In liberalized markets, all generators bid how much electricity they are willing to supply at which cost, for the next hour or so. Then you stack all the cheapest generators until your demand is satisfied and, voila, that last dispatched generator dictates your market price for that hour. Large consumers can buy electricity at that fluctuating market rate, or choose to shut down. Here, miners would pay the marginal cost, fair enough. Markets with large hydro power stations can’t work like that. Withholding a large dam from generating electricity gives the operator enough “market power” to be the price-setting generator every hour year round, which gives that operator the ability to dictate prices.
(edits: formatting)
Which is a roundabout way of saying my state is giving away money to people intentionally wasting power for personal gain under the false impression this is good for the economy.