How many more anti-btc articles will we get from salty HN nocoiners who missed a massive move this week? The anti-btc attention is never on HN until the price goes up.
Youll be glad to know most btc mining comes from renewable energy and the existing financial infrastructure uses more energy. Also replacing gold would be a net win for the environment. So really there is no need to fake virtue signal.
I'm curious - how do you know most BTC mining comes from renewable energy? I'm also curious to see some research that shows the existing financial infrastructure uses more energy.
Basically they say mining is reported in areas that have certain levels of renewable energy therefore the bitcoin was mined using the renewable energy.
Finally, the report says they made no attempt to verify any of the numbers they claim so the entire thing is worthless IMHO. I won't even bother pointing out the conflict of interest of the entire report to begin with...
> It is necessary at this point to caveat that while
we do our utmost to accurately pinpoint the
location of global mining centres, the Bitcoin
mining industry remains a highly private and
secretive industry. As a result, our estimates may
be subject to significant potential uncertainty.
While we have made no attempt to formally
quantify these uncertainly levels, we intuitively
guesstimate that, e.g. our renewables
penetration figures should be taken to include a
tentative uncertainty of around ±10%.
Ok, make your own report if you're going to reject whats presented to you. Ill wait. Otherwise dont make the counter argument if you have nothing other than your opinion with no merit behind it.
I do think btc will suck the oxygen out of golds value (and arguably is right now). If the value is less, mining is less. If mining is less, land destruction and fossil fuel energy usage goes down.
You seem very emotional about this topic. Dont strain your neanderthal back hoarding rocks under your bed. JMP predicts btc will replace gold so my opinion is in better company that your nonpoint with zero explanation but a lot of temper tantrum.
What makes you think I'm emotional? The post looks very sober and well thought out to me. It's a rational men's humble confessions that reason has it's limits and he accepts them stoic.
If we take your claim at face value: the renewable energy consumed by Bitcoin is renewable energy not available to the wider market for doing work with actual value.
The future requires more energy. That will never change with or without bitcoin. The answer is to switch all or most energy to renewable instead of pointing fingers at what is using it. Do we need all this video rendering? That uses a lot of energy.
Most pieces of technology tend to become more energy-efficient as time goes on. See electric cars or even gradual improvements to the internal combustion engine like VTEC. Same with computer CPUs. Bitcoin is pretty unique in that it gets more wasteful over time.
Disclaimer: I have some Bitcoin so “you’re just jealous” isn’t a valid retort.
Of course it depends on your understanding of what a "transaction" is. I'm referring specifically to the generally accepted understanding, which considers a transaction cleared once six miners mine the block containing that transaction. 500 transactions are bundled together in a block.
Mining a block is a brute force mathematical operation. The rate of mining is kept at a constant rate by the protocol, to do that the protocol must increase the complexity of mining blocks to meet the arms race of miners competing for the block reward. This means the energy required to mine those blocks is not bounded.
Regarding the second paragraph, yes. Well, one could say some irrelevant technicalities about the “bounded”, but otherwise, yes.
Regarding the first paragraph though, I don’t think the transactions substantially contribute to the difficulty of mining the blocks. If you didn’t include as many transactions in the block, it wouldn’t make it substantially less costly to mine?
My concern is the energy cost of running the network. We can discuss that cost in terms of how much energy is used to confirm each transaction by dividing the energy cost of mining six blocks by the number of transactions in a block. Letting us communicate in terms of the energy cost to confirm a transaction allows us to compare the efficiency of Bitcoin to other payment systems.
You're right: the number of transactions in each block is not relevant to the amount of energy is used to mine that block. The network could decide to include more transactions in a block. Some Bitcoin forks tried doing exactly that, actually.
Right now it's 500, but if enough miners agree tomorrow it could be 1000. All it does is change the number in the denominator of the energy cost per transaction calculation, but it won't change the fundamental incentive structure of the network.
Renewable energy doesn't mean that there are no ecological impacts to building out these new sources of energy. The process of extracting minerals, transforming them into solar panels and wind turbines still pollutes, transporting, installing, and disposing of the panels and turbines at the end of their useful life also has an impact.
> Youll be glad to know most btc mining comes from renewable energy
Any sources? Any time I've tried to investigate this, I've found this to very much not be the case. A majority of mining pools are in places where energy is cheap, but not necessarily renewable.
> and the existing financial infrastructure uses more energy.
And you expect that's just going to... disappear once Bitcoin wins? JP Morgan & Chase are going to go "oh, guess we've been beat" and pack their bags?
The existing financial infrastructure costs a lot, but Bitcoin isn't too far behind, and Bitcoin can only do a ~3 transactions per second [0]. Visa's data center they built back in 2012 is completely renewable, and can do 2,500 transactions per second. [1]
I posted a link below. 3tps is just flat out incorrect through simple math dividing the transactions per day by seconds in a day so you're just lying. Also the chain is a settlement layer not meant for paying for coffee. If it was faster it would bloat ahead of memory advancement and become centralized. If gold value collapses yes the mining would significantly go down.
I've seen this point so many times. First, the word "most" is doing a lot of work here. And the point about existing financial infrastructure is completely irrelevant, because bitcoin doesn't replace that infrastructure. The energy use of bitcoin is on top of that other energy use.
Even if it 75% is renewable, it's not enough - the numbers to run the Bitcoin block chain vary from "a few big nuclear power plants" to "a small to medium-sized country", but regardless, the hit is massive.
If we have to burn our resources and cause the resulting pollution, at least let it be as a result of something productive.
Sounds pretty dumb. The answer is make a lot more energy through sustainable methods rather than band aid solutions. The global population is declining aside from a few undeveloped countries. You can calm down.
Also, building & maintaining power generation is not free. Building solar panels, dams, wind has environmental impact, sizable material & energy inputs. And these generation systems only have a finite lifetime. Renewables are not free power.
Further, building a bunch of mining/blockchain machines has environmental impact. Things aren't quite as bad as they were - I hope - but Silicon Valley's contaminated groundwater, Google being built atop a superfund site - strong, close-to-home for many evidence that the processes are materially & energy intensive[1] and quite toxic. Building data-centers of mining machines has impact. And like the energy use question, we must ask: what else could we being doing with this capacity?
The 'it's mostly renewables' thing keeps getting raised & it's really frustrating/exhausting. It feels like a dismissal or denial. Ultimately that is potential that could be allocated elsewhere, and even with renewables, there is an impact to this planet.
Do you have any data on the renewable energy claim? Considering that mining goes on 24/7, I would find that highly dubious (even if true, "most" could mean 51%, or 90%; 10% of the annual usage of Argentina is still a non-trivial carbon footprint).
It would matter far less if the externality of carbon were taxed properly [0], but I think it's appropriate to be horrified at PoW when other low-energy mechanisms exist (PoS, memory/storage-based). The fact that existing financial infrastructure is also inefficient and untaxed is no excuse to double-down on passing ecological debt to our grandchildren (at a usurious interest rate).
Bullshit. Energy wasted is energy wasted. It could have done something usefull, but instead it got sunk into a pow. Given miners run 24/7 and have no load following makes things worse. The existing financial infrastructure is also usable, at scale, in sharp contrast to bitcoin.
See, I like the idea of a "amazon for drugs", but bitcoins cost is just not worth it.
Disclosure: Adopted bitcoin 0.2, make money with it.
We should make you the energy czar that decides whats an important use of energy and give you a little hat and jacket. Ill take my transactional and monetary freedom.
But one paper suggests almost half of the world’s Bitcoin mining capacity is situated in southwest China, where power is cheap, less taxed and supplied by coal-fired plants as well as hydroelectricity. The Cambridge Center for Alternative Finance estimates coal accounts for 38% of miner power.
Bitcoin can be carbon neutral but it has a long way to go.
Energy usage itself is not a bad thing, it’s the energy source that can be environmentally problematic.
Currently 39% of mining power is driven by renewables [1]. It’s not much but a good start.
The simplest solution to speed this up would be to create a law requiring that all mining must use renewable sources (or at least tax those that don’t). It would drive innovation, jobs, and make locations with renewable sources competitive places to live.
Has it actually disrupted anything yet? I'm seeing a lot of people trade it amongst themselves, but it's like a market in fungible antiques. You don't use it for anything, some people just like having it.
What is bitcoin's value anchor? What happens if all the people who are afraid of regular currency collapses have spent their money on bitcoin?
Who will provide the liquidity to drive the demand that keeps the value high?
When the covid crisis is over and people want to invest their bitcoins into new opportunities, won't we see a huge crash because there is no money available for all the bitcoins that are supposed to be liquidated?
Ive been thinking about this. A good engineer doesn't necessarily make a good seer. Until there is ample evidence of institutions relying on it as a hedge, most won't accept the reality.
>At this point I think you can train a GPT-3 model to write these articles every day and they'll still get upvoted.
Only because GPT-3 could write nearly anything... Have you seen Tom Scott's most recent video? It wrote an entire, coherent video script based off of a single sentence.
you can probably say the same thing about pro-coiners who keep saying mass adoption of cryptos and blockchain in everyday life is right around the corner
What has to happen will happen. Remember the quote (wrongly attributed to Gandhi): "First they ignore you, then they laugh at you, then they fight you, then you win". Cryptocurrencies are now between the "then they laugh at you" and the "then they fight you" stage.
In the next 2 or 3 years there will be more and more noise about cryptos. And yes, a lot of the disadvantages of Bitcoin itself are going to be shown, and other Cryptocurrencies are going to displace it. There will always be people naysaying Cryptocurrencies, but at the end, they will be massively adopted.
They have been in that stage for like a decade now, with essentially no progress toward "then you win". It is useful and fun for speculators, but there's not much more to it.
The problem with bitcoin is implicit in your criticism; the only thing that is interesting about it is its price for use by speculators, and that's ... not interesting.
When articles get basic, easily verifiable facts wrong, I immediately start to doubt the quality of the whole article. Here it says:
> " By comparison, there are just under 50 billion Swiss Francs in circulation today, which are worth around $56bn USD."
There are about 90 billion Swiss Francs in circularion in cash alone. If you add to that all the Swiss Francs in accounts with the Swiss National Bank, we are at 722 billion, which is in the same ballpark as the Bitcoin market cap with about 800 billion Swiss Francs.
Um no, he isn't wrong. Yes he could word it better but circulating currency is correct. Source - Wikipedia. https://en.wikipedia.org/wiki/Swiss_franc#Circulation I think you have a misunderstanding about circulation.
"As of March 2010, the total value of released Swiss coins and banknotes was 49.6640 billion Swiss francs" Last I checked coins and banknotes don't exclusively make up the money supply.
EDIT: Crux of the issue here is that circulation is the wrong metric to use (money supply would be far more accurate).
Indeed. The author is pointing out how Bitcoin was introduced by Satoshi as a decentralized cryptocurrency that would have lower transaction fees (enabling small transactions) and not having to depend on large intermediaries, but here we are and almost no one in the Bitcoin community considers it a good currency, transaction fees are much higher than the main alternatives (ACH or Visa—with the exception of international wire transfers which charge similar fees), and centralized online wallets and exchanges like Coinbase are where most of Bitcoin action actually happens now.
Satoshi’s paper is really good. More people should revisit it, and it’s even more interesting with hindsight today.
You are the one who is incorrect here. The incorrect figure you linked to is a ciculation metric for the forex market, not the amount of CHF in circulation.
We can certainly discuss definitions (as I understand it, GP's number is the number of bank notes in circulation plus the amount of money in checking accounts in the blue line, and bank notes alone in the red line). But Wikipedia lists the number from 2010, which is completely outdated. Counting only bank notes it's 88 bn CHF today.
You know what's a little ironic, is that the questions and uncertainty in this thread about how many Swiss Francs actually exist are trivial to answer with Bitcoin.
FWIW, it is surprisingly(?), not so trivial with many other cryptocurrencies.
One thing I've noticed with bitcoin related threads is that people who have bitcoin tend to be much more defensive when there's any anti-coin criticism, which is kind of amusing.
Another thing I wonder with bitcoin in particular is if everyone had bitcoin and no other currency, and something like COVID happened, what entity would provide liquidity in order to help those affected by a disaster?
> what entity would provide liquidity in order to help those affected by a disaster?
For most of history, countries couldn't make money appear out of thin air (outside of mining more silver or later gold, which has practical limits). In good times countries made a tax surplus that they could spend in bad times. Or they borrow money from financiers and pay it back later.
And we saw how a blind obedience to those principles prolonged the Great Depression[1]. FDR's economic reforms, including getting the world economy off the Gold Standard, propelled the recovery and allowed the US to meet the needs of the war effort.
It certainly has disadvantages. Great Britain lost their US colonies in large part because they needed to raise taxes to pay for their debts.
But the power to just print money has to be used responsibly, there's no shortage of examples of countries damaging their economy by triggering hyperinflation. And if you want a global currency there is no institution that would be trusted with that kind of responsibilty by enough countries.
Not sure how your first point is relevant. The Great Depression was in the 1930s, the US colonies declared their independence in 1776.
Of course the power to print money comes with responsibility. That isn't up for debate.
I think you will find hyperinflation more tightly correlated with economic sanctions that cut off countries from the global trade market. A currency is worthless if you can't buy goods with it.
It's a phenomena that grew out of western imperialists that levied massive debts on their former colonies in exchange for independence. Colonies that reneged on those debts were sanctioned. Physically and violently prevented from engaging in trade, ships pilfered etc. Many new governments responded by printing the money those debts were issued in - if they could.
> Another thing I wonder with bitcoin in particular is if everyone had bitcoin and no other currency, and something like COVID happened, what entity would provide liquidity in order to help those affected by a disaster?
What? It's not specific to the way you transact. Governments are providing liquidity, if the whole world used crypto they would do payouts the same way just in crypto. Perhaps I misunderstand the question.
Modern governments usually provide liquidity by simply printing money out of thin air and giving it to those who need it. This causes inflation potentially but is thought to be a fair trade for stimulus.
It's normal to be defensive, as what your net worth is put in is one of the most important decisions of your life, like a religion.
I'm sure a person who uses apartments as a store of value in San Francisco (and renting them out) would be quite defensive if the city would want to get rid of zoning regulations.
this is one of the "selling points" of most cryptos isn't it? that the # of assets in circulation is fixed and not susceptible to manipulation by a central entity
Governments made plenty of bad decisions when money was still tied to the gold standard.
And to fix those bad decisions, they resorted to drastic measures like seizing property. Gradual inflation of fiat currency is a dramatic improvement over those days.
YC's best investment to date will likely be Coinbase when the IPO lands, if the price ranges are correct.
The very first Hacker News comment on Bitcoin was jdoliner's "while this is exceptionally cute, no one is ever going to take it seriously" - perhaps it's time to admit that yes, maybe, there is something going on here.
That's not true. An earlier comment was "brilliant, this could finally end the recession!" https://news.ycombinator.com/item?id=600327. I understand the fun in scouring the past for outrageously wrong comments, but let's be fair.
You haven't quoted jdoliner accurately either: https://news.ycombinator.com/item?id=600813. What he actually wrote was not quite that flagrantly dismissive or wrong, even in hindsight. (This reminds me a bit of the famous comment that was posted in the first Dropbox thread on HN, which people love to cite in a way that I don't think is fair to the commenter. His username keeps getting repeated as an emblem of pedantic dismissal, which is not actually what he was doing. https://news.ycombinator.com/item?id=23229275)
The bigger problem is that everyone has a incentive to run their computers day and night cranking out solutions, which burns up lots of natural resources and processor time for a zero-sum result.
I appreciate the correction on the timing - I didn't check the comment ids when I discovered it initially and I've repeated the claim more than once, so mea culpa. Still, I don't think I'm outrageously wrong. Being fair, the earlier comment you cite is in the same thread.
That precursor thread is excellent history, thanks also for that.
>> The bigger problem is that everyone has a incentive to run their computers day and night cranking out solutions, which burns up lots of natural resources and processor time for a zero-sum result.
I watched bitcoin. I remember people spending 50BTC for pizzas, or whatever. I mined a couple dozen and threw that laptop away. I don't feel like I missed out.
I invest because I want value. I want to own a part of something that generates value to the world. I invest to meet my goals (which I've already done without BTC). I invest to sleep well knowing that my money is making me money. BTC offers none of this. I challenge you to name any value BTC provides beyond moving money from one jurisdiction to another. (Which is still value, but not one I need, nor feel the need to speculate in.)
Am I bitter others got rich? Nope. Do I wish I was richer? Not really, I'm doing fine, I don't spend what I have anyway. Do I worry about BTC mania infecting others and possibly causing harm where it's not needed? Yes.
That is why BTC is a bad idea. It's pure speculation. There is no value beyond what someone else will pay you for it.
> I mined a couple dozen and threw that laptop away. I don't feel like I missed out.
> I invest because I want value.
So you want value, but you don't feel that you missed out by throwing out over a million dollars worth of assets? (couple dozen at ~50k/BTC valuation).
Sure it has no value beyond what someone else will pay you for it, but today somebody else would literally be willing to give you over a million dollars for it.
Would I have sold it before 50k? yes, yes I would.
Can I accurately predict what someone would pay me for it tomorrow? No. Can I estimate the amount it will return to me in 10 years through dividends, or earnings growth, or repurchases (or in BTC's case, lost wallets)? No. Is there regulation protecting my investment? Not really.
It is a purely speculative investment.
If you want to go find my laptop, it's in a landfill in Massachusetts somewhere. Have at it! It was an early macbook. It has a Daft Punk sticker I bought at Newbury Comics.
Value is NOT price. BTC objectively has no little to no value. Price, sure, it's all over the place.
What is the par value of a BTC? What's the earnings yield on it? ROIC? ROE? How is it providing jobs to people (beyond speculators)? It is (objectively) a drag on society and progress.
You're making my point for me. BTC has no value. To be useful, I need it to be something else.
I have made so much more in salary and investment growth than those BTC in the same time. I provide value to the world, and world has rewarded that. BTC provides nothing but speeding the heat-death of the universe and hodl memes.
Nope. I'm saying I've made more since I mined the bitcoin, apologies if that didn't make sense.
Ok, I have a proposition. Let's negotiate. How many BTC/year do you require for me to buy all of your work product, for the rest of your life? How many BTC do you want? Choose carefully.
I posit, there is no amount we can agree on to make this transaction.
If you don't want to be any richer, then why do returns, dividends, yields or earnings growth matter?
It's great that you're successful enough that throwing away over a million dollars worth of BTC isn't a big deal for you, but that's a life-changing amount of money for most folks. I'm making no claims about the features or benefits of BTC, but one million dollars worth of bitcoin is primarily useful because it can be exchanged for one million dollars, today, right now. It doesn't need any additional features, promises, guarantees or selling points.
Again, you're making the point for me. You agree that bitcoin has no value on its own, it offers nothing but what I can sell it for to another sucker.
1M is life changing, agreed. But there's no reason to have known it would be worth that. There's no reason to believe it will be worth that tomorrow. Yet someone else, possibly far less astute than I am, is on the other end of that trade. For every dollar in wealth it created for me, it destroys for someone else. Nothing else has happened but I got lucky, timing was good, and I robbed wealth from others. That 1M would be better spent on people's salary, or a dozen Teslas, or a bathroom in the bay area. But, it was given to a jerk who downloaded some program and ran it for a couple of days in 2009 (or whenever I did, it's not important).
BTC is objectively bad. It is objectively speculation. It is objectively a random number. That is all. It is a shame we place any price on it, when the money spent speculating on it could create actual wealth.
It is you who is making my point for me. I agree that the 1M would be better spent on any of those things, rather than rotting away in a refuse site somewhere in MA. My argument was never that BTC is a good investment or even that it's worth the opportunity cost. I was just arguing against the "nothing of value was lost" mentality you have at throwing away all this BTC.
Put another way - If somebody were to buy SNAP stock, it's also a purely speculative investment (no dividends, no votes, etc). I may think this is a poor use of money, but I'm still confident if somebody gave me some SNAP stock I'd convert it into USD instead of just straight up throwing it into a dump somewhere and claiming I didn't miss out on any value.
It isn't "used" by ~100 million "users", it is speculated on by ~100 million speculators. You could literally create a derivative contract unlinked to any asset, and "use" it in the same way, if you could market it. So yes, it has been a marketing success, but not a technological one.
That's a silly way to think about speculation. I'm not speculating on where the ball is going to land on some arbitrary roulette table at an arbitrary casino in Vegas; I'm just not playing the game.
The people who spend it are users, but the people who hold and trade it are just speculators. I'm not a user of the target retirement fund in my 401k, I'm just speculating that it's a well balanced way to grow retirement funds.
Regardless of where you stand as far as the ideological/financial/economic/technological goals of Bitcoin as described in Satoshi’s original paper, it’s definitely a real nerd-snipe, and before you know it, you are intellectually and financially invested in it. And then there’s no avoiding the natural human tendency to rationalize that decision. :)
Of course, rationalizing works both ways with sour grapes! But I still think greed is a stronger motivator than envy. :)
Related to this, I actually think one of the best critiques of Bitcoin is by Elon Musk. He’s rich enough to not care as much about not having bought in early and has significant experience with financial systems. Also, it’s funny because a large part of the Chattering class (which includes me because I’m on Twitter and the author of this article) seem to think he’s somehow a Bitcoin champion.
He makes solid arguments as to why Dogecoin, a joke alt-coin, has some technical features that legitimately make it an improvement on Bitcoin.
I don’t agree with him on hating fiat currency, but it’s a good critique.
Regarding fiat with Fed-like policies, it’s actually a feature that those who would hoard fiat cash sort of low level hate it because they know it’s somewhat inflationary and so they look for better places to put it... The idea being that they should put it to productive use by hiring people and/or investing in efficiency-improving/labor-saving capital equipment or whatever. (Of course, plowing it into Bitcoin doesn’t really help that goal, so in some ways, Bitcoin is crowding out productive investments...)
Not really. People don't drive up the price of milk because they think it's a cool thing to have, they just want to drink it and pay what they think is a reasonable price to do so.
> What GME demonstrated was the power of the meme in the stock market, and that an asset price could increase its value by over 20x for no fundamental reason.
He has never heard of bubbles before GME?
> People point to the rising price of bitcoin as evidence of the truth in their narratives, but the reality is that bitcoin could be rising for no reason at all.
Could be? It's blindingly obvious to everyone (except the author?) that it's all speculation.
Also he failed to mention the most plausible ways that Bitcoin loses value. Governments ban it, or some other cryptocurrency comes along that solves the technical issues with Bitcoin.
Bitcoin has two incredible properties. Most critics downplay the first, and never even mention the second.
One is that amounts, tiny or astronomical can be safely transferred and settled without trusted 3rd parties, in a matter of minutes. I think people know this.
The other property is that it is completely impossible to counterfeit it. There is no possible way to fake bitcoin. You can try claiming you own bitcoin that doesn't exist, but if someone wants proof, there is no way for you to fake it. There is no way to counterfeit it with clever artistic skill, specialized machinery, nothing that can do this. This also means that if you own bitcoin (meaning you control the keys), you really own it. You don't own some promise of future bitcoin payment, an entry in a volatile database at your bank or brokerage, an IOU, or some faked certificate. You own real, trivially verifiable, bitcoin. Also, no trusted 3rd party is needed to ensure this.
Tiny amounts literally cannot be settled in minutes. To get a transaction in an hour requires a much higher transaction fee ($11 as of my writing now) than an equivalent Visa purchase (which clears faster). I can buy a $1 (fee-inclusive) candy bar with a Visa from a vending machine and the transaction costs literally pennies and is approved in seconds with no prior relationship with the owner of the vending machine.
You can argue $10-100 is “tiny,” if you like, but as Bitcoin is today, it is only really useful for large transfers. Or perhaps medium sized transfers if you live in a place like Venezuela. This is less true even for other blockchain-based cryptocurrencies for two reasons: 1) they’re less popular so less demand for transactions 2) they use a larger blocksize and/or shorter time between blocks (both of which have drawbacks and limits).
Regardless of what the Satoshi white paper said, base blockchain simply doesn’t scale well globally for small transactions. Currently still doable for medium and large transactions, but if 7 billion people used Bitcoin as it is now (limited to 7 transactions per second), they could only settle to the blockchain once every billion seconds on average (a billion seconds is over thirty years).
I do think there's a use case for zero-confirmation transactions which, although are not settled fully, have to pass a long list of acceptance rules to be fully propagated to the mempool across the network. While this doesn't have the full double spend protection that you get after 6+ confirmations— its arguably reasonable enough to use network mempool quorum for buying a cup of coffee.
Beyond that though, there are a number of solutions at layer 2 that can be used here as well, lightning network being the most widely used at this point.
Right. The solution to small transactions is to use another thing which is not Bitcoin (although I suppose if you felt like it you could denominate it in Bitcoins without settling the transaction...). And/or compromise on the decentralized trustlessness thing.
Well thats not entirely true. Lightning network _does_ use bitcoin smart contracts settled on-chain as a way to provide more liquidity for efficient payment routing. So it is bootstrapped to the same decentralization/trustlessness (mostly).
The analogy here is that its like saying: using TCP (layer 4) for transport reliability isn't giving up on IP (layer 3), its building on top of it. You still get the benefits of the basal level protocol.
"an equivalent Visa purchase (which clears faster)"
How long does it take for a Visa purchase to clear equivalently to bitcoin? I think to be equivalent to bitcoin it would have to be, I have some cash, and now someone else has that cash. Not a promise of cash. Not a balance in my bank's database. Actual cash. How long does that take using the Visa network?
EDIT: also, what are all the costs involved in that Visa transaction? Payer has to travel to an ATM, deposit cash, Payee has to set up a merchant account or use stripe or something, they have to travel to an ATM, withdraw cash, etc., etc.
> Tiny amounts literally cannot be settled in minutes.
Your right. It wouldn't be worth $1T now if that was true. It certainly wouldn't be worth $1T if the you could only do 7 bitcoin transactions per second. With the addition of the ligthning network transacting Bitcoin happens in milliseconds, with an unlimited number in parallel and the fee is well under a a cent right now.
Why Mastercard announced they were moving into Bitcoin is mystery of course. But I can't help wondering if the cost of a lightning transaction where they control the nodes compared the cost of trip a debit card takes (customer bank --> customer master card --> merchant terminal --> merchant bank) passing through the sticky fingers of two banks, was a factor.
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[ 3.0 ms ] story [ 204 ms ] threadForgive my skepticism, but this seems biased. Would they not benefit from a positive outlook on BTC?
Basically they say mining is reported in areas that have certain levels of renewable energy therefore the bitcoin was mined using the renewable energy.
Finally, the report says they made no attempt to verify any of the numbers they claim so the entire thing is worthless IMHO. I won't even bother pointing out the conflict of interest of the entire report to begin with...
Even if that's true, it's still a waste of energyhttps://www.statista.com/statistics/881541/bitcoin-energy-co....
Can you substantiate this claim somehow? And perhaps also normalize per volume?
There is no other way to put it, your are delusional. And no, you are not a unrecognised visionary.
This is so wrong you can't even disprove it. Like you can't argue against the hobo next door who arguing sincerely he has been to Jupiter.
As above: Disclosure, very early bitcoin adopter, made money, so i have a skin in the game.
Disclaimer: I have some Bitcoin so “you’re just jealous” isn’t a valid retort.
Mining a block is a brute force mathematical operation. The rate of mining is kept at a constant rate by the protocol, to do that the protocol must increase the complexity of mining blocks to meet the arms race of miners competing for the block reward. This means the energy required to mine those blocks is not bounded.
Regarding the first paragraph though, I don’t think the transactions substantially contribute to the difficulty of mining the blocks. If you didn’t include as many transactions in the block, it wouldn’t make it substantially less costly to mine?
You're right: the number of transactions in each block is not relevant to the amount of energy is used to mine that block. The network could decide to include more transactions in a block. Some Bitcoin forks tried doing exactly that, actually.
Right now it's 500, but if enough miners agree tomorrow it could be 1000. All it does is change the number in the denominator of the energy cost per transaction calculation, but it won't change the fundamental incentive structure of the network.
Any sources? Any time I've tried to investigate this, I've found this to very much not be the case. A majority of mining pools are in places where energy is cheap, but not necessarily renewable.
> and the existing financial infrastructure uses more energy.
And you expect that's just going to... disappear once Bitcoin wins? JP Morgan & Chase are going to go "oh, guess we've been beat" and pack their bags?
The existing financial infrastructure costs a lot, but Bitcoin isn't too far behind, and Bitcoin can only do a ~3 transactions per second [0]. Visa's data center they built back in 2012 is completely renewable, and can do 2,500 transactions per second. [1]
[0] https://www.blockchain.com/charts/transactions-per-second [1] https://www.cnbc.com/id/46867832
If we have to burn our resources and cause the resulting pollution, at least let it be as a result of something productive.
You can waste energy after we have renewable energy. That we will have renewable energy later doesn't change that we don't have it now.
There's a difference between putting on a bandaid and actively pouring acid in the wound. This is the latter.
Further, building a bunch of mining/blockchain machines has environmental impact. Things aren't quite as bad as they were - I hope - but Silicon Valley's contaminated groundwater, Google being built atop a superfund site - strong, close-to-home for many evidence that the processes are materially & energy intensive[1] and quite toxic. Building data-centers of mining machines has impact. And like the energy use question, we must ask: what else could we being doing with this capacity?
The 'it's mostly renewables' thing keeps getting raised & it's really frustrating/exhausting. It feels like a dismissal or denial. Ultimately that is potential that could be allocated elsewhere, and even with renewables, there is an impact to this planet.
[1] https://news.ycombinator.com/item?id=21045573
It would matter far less if the externality of carbon were taxed properly [0], but I think it's appropriate to be horrified at PoW when other low-energy mechanisms exist (PoS, memory/storage-based). The fact that existing financial infrastructure is also inefficient and untaxed is no excuse to double-down on passing ecological debt to our grandchildren (at a usurious interest rate).
[0] https://clcouncil.org/economists-statement/
See, I like the idea of a "amazon for drugs", but bitcoins cost is just not worth it.
Disclosure: Adopted bitcoin 0.2, make money with it.
https://www.bloomberg.com/opinion/articles/2021-01-26/is-bit...
Currently 39% of mining power is driven by renewables [1]. It’s not much but a good start.
The simplest solution to speed this up would be to create a law requiring that all mining must use renewable sources (or at least tax those that don’t). It would drive innovation, jobs, and make locations with renewable sources competitive places to live.
[1] https://www.jbs.cam.ac.uk/faculty-research/centres/alternati...
If it quacks like a duck, is it already a duck?
What is bitcoin's value anchor? What happens if all the people who are afraid of regular currency collapses have spent their money on bitcoin? Who will provide the liquidity to drive the demand that keeps the value high?
When the covid crisis is over and people want to invest their bitcoins into new opportunities, won't we see a huge crash because there is no money available for all the bitcoins that are supposed to be liquidated?
- People don't transact with btc
- Uses electricity
- QPS is not enough
- Too volatile
- blah blah blah
At this point I think you can train a GPT-3 model to write these articles every day and they'll still get upvoted.
Only because GPT-3 could write nearly anything... Have you seen Tom Scott's most recent video? It wrote an entire, coherent video script based off of a single sentence.
In the next 2 or 3 years there will be more and more noise about cryptos. And yes, a lot of the disadvantages of Bitcoin itself are going to be shown, and other Cryptocurrencies are going to displace it. There will always be people naysaying Cryptocurrencies, but at the end, they will be massively adopted.
There are untold cases where this was false. Surely you can think of some.
> " By comparison, there are just under 50 billion Swiss Francs in circulation today, which are worth around $56bn USD."
There are about 90 billion Swiss Francs in circularion in cash alone. If you add to that all the Swiss Francs in accounts with the Swiss National Bank, we are at 722 billion, which is in the same ballpark as the Bitcoin market cap with about 800 billion Swiss Francs.
Source: https://data.snb.ch/de/topics/snb#!/chart/snbmobalech
EDIT: Crux of the issue here is that circulation is the wrong metric to use (money supply would be far more accurate).
Satoshi’s paper is really good. More people should revisit it, and it’s even more interesting with hindsight today.
As the parent comment correctly noted, CHF M0 Base money (ie: the amount of monetary base in circulation) is aproximately 722B : https://tradingeconomics.com/switzerland/money-supply-m0
FWIW, it is surprisingly(?), not so trivial with many other cryptocurrencies.
The simplest possible emission is 1 per second forever.
Another thing I wonder with bitcoin in particular is if everyone had bitcoin and no other currency, and something like COVID happened, what entity would provide liquidity in order to help those affected by a disaster?
disclaimer: I do not hold any crypto.
For most of history, countries couldn't make money appear out of thin air (outside of mining more silver or later gold, which has practical limits). In good times countries made a tax surplus that they could spend in bad times. Or they borrow money from financiers and pay it back later.
1. https://www.history.com/news/how-did-the-gold-standard-contr....
But the power to just print money has to be used responsibly, there's no shortage of examples of countries damaging their economy by triggering hyperinflation. And if you want a global currency there is no institution that would be trusted with that kind of responsibilty by enough countries.
Of course the power to print money comes with responsibility. That isn't up for debate.
I think you will find hyperinflation more tightly correlated with economic sanctions that cut off countries from the global trade market. A currency is worthless if you can't buy goods with it.
It's a phenomena that grew out of western imperialists that levied massive debts on their former colonies in exchange for independence. Colonies that reneged on those debts were sanctioned. Physically and violently prevented from engaging in trade, ships pilfered etc. Many new governments responded by printing the money those debts were issued in - if they could.
What? It's not specific to the way you transact. Governments are providing liquidity, if the whole world used crypto they would do payouts the same way just in crypto. Perhaps I misunderstand the question.
What "entity" would give people bitcoins?
Market making in crypto is usually done by overcollateralized liquidity pools, farming and staking.
I'm sure a person who uses apartments as a store of value in San Francisco (and renting them out) would be quite defensive if the city would want to get rid of zoning regulations.
Maybe if governments weren’t able to paper themselves out of bad decisions, they would make fewer bad decisions?
And to fix those bad decisions, they resorted to drastic measures like seizing property. Gradual inflation of fiat currency is a dramatic improvement over those days.
H
The very first Hacker News comment on Bitcoin was jdoliner's "while this is exceptionally cute, no one is ever going to take it seriously" - perhaps it's time to admit that yes, maybe, there is something going on here.
Coinbase gives people what they want, quickly and conveniently, with a price ppl are okay with. A great business
Bitcoin is not a thing ppl should want (IMO)
It’s like going in a 7-11 and buying cigarettes or scratchoffs. I still like 7-11
You haven't quoted jdoliner accurately either: https://news.ycombinator.com/item?id=600813. What he actually wrote was not quite that flagrantly dismissive or wrong, even in hindsight. (This reminds me a bit of the famous comment that was posted in the first Dropbox thread on HN, which people love to cite in a way that I don't think is fair to the commenter. His username keeps getting repeated as an emblem of pedantic dismissal, which is not actually what he was doing. https://news.ycombinator.com/item?id=23229275)
Edit: FWIW, there was at least one earlier HN thread on cryptocurrency, predating Bitcoin: https://news.ycombinator.com/item?id=253963. It was pretty good and even (in the case of https://news.ycombinator.com/item?id=253999) prescient:
The bigger problem is that everyone has a incentive to run their computers day and night cranking out solutions, which burns up lots of natural resources and processor time for a zero-sum result.
That precursor thread is excellent history, thanks also for that.
EDIT: Wait, are we not both wrong here? Isn't this the first? Which, honestly, might be funnier: https://news.ycombinator.com/item?id=599936
In 2008! That is nuts! Thanks for sharing.
Yes, I'm sure he's really savoring that one.
I invest because I want value. I want to own a part of something that generates value to the world. I invest to meet my goals (which I've already done without BTC). I invest to sleep well knowing that my money is making me money. BTC offers none of this. I challenge you to name any value BTC provides beyond moving money from one jurisdiction to another. (Which is still value, but not one I need, nor feel the need to speculate in.)
Am I bitter others got rich? Nope. Do I wish I was richer? Not really, I'm doing fine, I don't spend what I have anyway. Do I worry about BTC mania infecting others and possibly causing harm where it's not needed? Yes.
That is why BTC is a bad idea. It's pure speculation. There is no value beyond what someone else will pay you for it.
> I invest because I want value.
So you want value, but you don't feel that you missed out by throwing out over a million dollars worth of assets? (couple dozen at ~50k/BTC valuation).
Sure it has no value beyond what someone else will pay you for it, but today somebody else would literally be willing to give you over a million dollars for it.
Would I have sold it before 50k? yes, yes I would.
Can I accurately predict what someone would pay me for it tomorrow? No. Can I estimate the amount it will return to me in 10 years through dividends, or earnings growth, or repurchases (or in BTC's case, lost wallets)? No. Is there regulation protecting my investment? Not really.
It is a purely speculative investment.
If you want to go find my laptop, it's in a landfill in Massachusetts somewhere. Have at it! It was an early macbook. It has a Daft Punk sticker I bought at Newbury Comics.
Value is NOT price. BTC objectively has no little to no value. Price, sure, it's all over the place.
What is the par value of a BTC? What's the earnings yield on it? ROIC? ROE? How is it providing jobs to people (beyond speculators)? It is (objectively) a drag on society and progress.
No thank you.
I have made so much more in salary and investment growth than those BTC in the same time. I provide value to the world, and world has rewarded that. BTC provides nothing but speeding the heat-death of the universe and hodl memes.
Ok, I have a proposition. Let's negotiate. How many BTC/year do you require for me to buy all of your work product, for the rest of your life? How many BTC do you want? Choose carefully.
I posit, there is no amount we can agree on to make this transaction.
It's great that you're successful enough that throwing away over a million dollars worth of BTC isn't a big deal for you, but that's a life-changing amount of money for most folks. I'm making no claims about the features or benefits of BTC, but one million dollars worth of bitcoin is primarily useful because it can be exchanged for one million dollars, today, right now. It doesn't need any additional features, promises, guarantees or selling points.
1M is life changing, agreed. But there's no reason to have known it would be worth that. There's no reason to believe it will be worth that tomorrow. Yet someone else, possibly far less astute than I am, is on the other end of that trade. For every dollar in wealth it created for me, it destroys for someone else. Nothing else has happened but I got lucky, timing was good, and I robbed wealth from others. That 1M would be better spent on people's salary, or a dozen Teslas, or a bathroom in the bay area. But, it was given to a jerk who downloaded some program and ran it for a couple of days in 2009 (or whenever I did, it's not important).
BTC is objectively bad. It is objectively speculation. It is objectively a random number. That is all. It is a shame we place any price on it, when the money spent speculating on it could create actual wealth.
Put another way - If somebody were to buy SNAP stock, it's also a purely speculative investment (no dividends, no votes, etc). I may think this is a poor use of money, but I'm still confident if somebody gave me some SNAP stock I'd convert it into USD instead of just straight up throwing it into a dump somewhere and claiming I didn't miss out on any value.
The people who spend it are users, but the people who hold and trade it are just speculators. I'm not a user of the target retirement fund in my 401k, I'm just speculating that it's a well balanced way to grow retirement funds.
Of course, rationalizing works both ways with sour grapes! But I still think greed is a stronger motivator than envy. :)
He makes solid arguments as to why Dogecoin, a joke alt-coin, has some technical features that legitimately make it an improvement on Bitcoin.
I don’t agree with him on hating fiat currency, but it’s a good critique.
Regarding fiat with Fed-like policies, it’s actually a feature that those who would hoard fiat cash sort of low level hate it because they know it’s somewhat inflationary and so they look for better places to put it... The idea being that they should put it to productive use by hiring people and/or investing in efficiency-improving/labor-saving capital equipment or whatever. (Of course, plowing it into Bitcoin doesn’t really help that goal, so in some ways, Bitcoin is crowding out productive investments...)
He has never heard of bubbles before GME?
> People point to the rising price of bitcoin as evidence of the truth in their narratives, but the reality is that bitcoin could be rising for no reason at all.
Could be? It's blindingly obvious to everyone (except the author?) that it's all speculation.
Also he failed to mention the most plausible ways that Bitcoin loses value. Governments ban it, or some other cryptocurrency comes along that solves the technical issues with Bitcoin.
One is that amounts, tiny or astronomical can be safely transferred and settled without trusted 3rd parties, in a matter of minutes. I think people know this.
The other property is that it is completely impossible to counterfeit it. There is no possible way to fake bitcoin. You can try claiming you own bitcoin that doesn't exist, but if someone wants proof, there is no way for you to fake it. There is no way to counterfeit it with clever artistic skill, specialized machinery, nothing that can do this. This also means that if you own bitcoin (meaning you control the keys), you really own it. You don't own some promise of future bitcoin payment, an entry in a volatile database at your bank or brokerage, an IOU, or some faked certificate. You own real, trivially verifiable, bitcoin. Also, no trusted 3rd party is needed to ensure this.
That is the value of bitcoin.
You can argue $10-100 is “tiny,” if you like, but as Bitcoin is today, it is only really useful for large transfers. Or perhaps medium sized transfers if you live in a place like Venezuela. This is less true even for other blockchain-based cryptocurrencies for two reasons: 1) they’re less popular so less demand for transactions 2) they use a larger blocksize and/or shorter time between blocks (both of which have drawbacks and limits).
Regardless of what the Satoshi white paper said, base blockchain simply doesn’t scale well globally for small transactions. Currently still doable for medium and large transactions, but if 7 billion people used Bitcoin as it is now (limited to 7 transactions per second), they could only settle to the blockchain once every billion seconds on average (a billion seconds is over thirty years).
Beyond that though, there are a number of solutions at layer 2 that can be used here as well, lightning network being the most widely used at this point.
The analogy here is that its like saying: using TCP (layer 4) for transport reliability isn't giving up on IP (layer 3), its building on top of it. You still get the benefits of the basal level protocol.
How long does it take for a Visa purchase to clear equivalently to bitcoin? I think to be equivalent to bitcoin it would have to be, I have some cash, and now someone else has that cash. Not a promise of cash. Not a balance in my bank's database. Actual cash. How long does that take using the Visa network?
EDIT: also, what are all the costs involved in that Visa transaction? Payer has to travel to an ATM, deposit cash, Payee has to set up a merchant account or use stripe or something, they have to travel to an ATM, withdraw cash, etc., etc.
Your right. It wouldn't be worth $1T now if that was true. It certainly wouldn't be worth $1T if the you could only do 7 bitcoin transactions per second. With the addition of the ligthning network transacting Bitcoin happens in milliseconds, with an unlimited number in parallel and the fee is well under a a cent right now.
Why Mastercard announced they were moving into Bitcoin is mystery of course. But I can't help wondering if the cost of a lightning transaction where they control the nodes compared the cost of trip a debit card takes (customer bank --> customer master card --> merchant terminal --> merchant bank) passing through the sticky fingers of two banks, was a factor.