Whether you like it or not, Bitcoin's current market cap is 1 trillion$ (which btw is more than the GDP of many countries), when you look at it from that perspective, the energy spent to secure it is worth it.
Bitcoin has no real intrinsic value, so no, it's not worth it.
To make this more obvious suppose all money was bitcoin. By your logic it would be worth it to make our sole economic activity 'securing' it. We'd literally all starve and die.
I believe the argument they were making was about the electricity cost of securing it if all money was in bitcoin. At the current energy requirements (which are escalating per transaction), it would take more than the entire energy production of the world to make bitcoin the sole currency.
Wrong. The number (or more specifically "weight") of the transactions that can be processed in a given time period is constant, and does not scale with the hash rate.
> it would take more than the entire energy production of the world to make bitcoin the sole currency
Let me see if I can help you. One of Bitcoin's biggest selling points is that there is a limited supply of it. For it to be the world's reserve currency, each 1 BTC would represent a stunning amount of actual wealth. You can find plenty of starry-eyed investors using this principle to explain how their price target of, say, $10M/BTC makes sense.
Sound good so far?
Next, the block reward is denominated in BTC. Currently 6.25 BTC every 10 minutes, but it'll halve again in 2024. The block reward, plus transaction fees, is what the network pays miners. It makes sense for miners in aggregate to expend about that much money on mining, because if the network is spending less than that, there is still profit available for additional miners joining in.
If that 6.25 BTC becomes valued at 10x or 100x as much as it is today, the expenditure on mining will also be 10x or 100x larger. Obviously this can't actually exceed the energy production of the world because that's impossible, but this new artificial demand for energy can soak up lots of capacity that would otherwise go to more productive, yet less profitable, endeavors. The fact that it's using 1/200th of the world's energy production already, while it's just a toy speculation vehicle, doesn't bode well.
As you correctly point out though, this additional expenditure on mining will do absolutely nothing to help the number of transactions that can be processed in any given time period.
Nobody here is impressed by you, the condescension sounds ridiculous.
> the expenditure on mining will also be 10x or 100x larger
This is correct, but the assumption that energy will continue to represent a very large part of that expenditure is faulty. There is a huge incentive for miners to mine more efficiently, especially in this hypothetical universe where Bitcoin is driving up energy prices.. That expenditure could easily be disproportionately spent on more efficient hardware / algorithms.
Alternatively Bitcoin might not be using proof of work in this hypothetical future. It's not immutable.
We've had several generations of more efficient hardware, and it just causes the hash rate to increase while energy usage stays at the energy-cost equilibrium described above.
I can't imagine an algorithmic or hardware improvement that would stop a proof of work system scaling with energy input.
Energy is still somewhat cheap relative to the value of the hardware, so there's been no incentive to optimize for energy usage. This won't change until there's mass production and the hardware is ubiquitous.
You might be right though, but like I said I don't think PoW is necessarily the final state.
Sorry, I didn't intend to sound condescending, though I see how I did. I was responding to your "I do not follow...".
I suspect mining expenditure would still be mostly spent on energy usage, not finding more efficient hardware/algorithms, since mining is an arms race -- when miner A finds a more efficient algorithm, it's only a matter of time before miner B finds it too, and then they're back on level ground competing over energy.
But even if this is not the case, I don't particularly care whether the mining expenditure is spent on energy, or developing and manufacturing new mining hardware, or sacrificing goats to a hash-finding deity. Since the amount of mining the network does is set by a price tag (the block reward), and its intent is to make 51%ing prohibitively costly, by definition it must use up some valuable resource. Whether that's energy or human ingenuity or semiconductor production is just an implementation detail but it'll always be a waste.
If Bitcoin switches away from proof of work, I'll stop criticizing it for the inefficiency of proof of work.
> That makes no sense. If all money was USD would literally everyone be in the banking industry with no market for corn?
It indeed makes no sense if you completely ignore half of the argument (and probably misunderstand it on top of that).
The argument was that it makes sense to spend currency for security equal to the amount of currency you are securing, meaning if you do that for all currency, (pretty much) the sole economic activity will be securing it.
Suppose for the moment that what is mining power to bitcoin is the US military to the USD. It makes no sense to spend all USD on just the military, so that it can secure the currency, does it?
I prefaced it with "Whether you like it or not", because what you think doesn't matter, you don't get to tell people what has value and what doesn't, the market decides and there's currently a market with billions of dollars in volume across many different exchanges that decides the value. You think it's a worthless tulip? Great, go and short it.
I'm not sure what you mean by the 2nd paragraph, are you saying if all money was bitcoin, we'd only spend energy to secure that and we wouldn't do nothing else? That wouldn't make sense right? If all money was Bitcoin, there wouldn't be as much upside to it, because it will have already won, so you'd need to do other economic activities which will grow faster than that.
If the profit is the only measure that a lot of people here seem to consider: why not just burning the trash in the air, pouring polluted water directly in the ocean and allowing toxic material in our food chain? Do we want forbidding people to become rich doing nothing for others? These markets are bigger than several GDP of many countries, "whether you like it or not".
I mean you realize all those things you mentioned are happening right? Waters are polluted, global warming is real, oil/gold extraction destroys the environment.
If anything, this problem is not limited to Bitcoin, we should put a carbon tax on everything with externalities. Why just focus on crypto when there are far bigger polluters?
Another way to say this is that Bitcoin's value comes entirely from the sunken cost fallacy. It is a war of consumption. Whoever can waste the most resources and/or produce them the most cheaply will gain the most economic benefit.
It's just another one of the forms of mutually assured destruction that we will eventually have to confront. It's unfortunate that being very obviously horrible isn't enough to change it, but the same could be said for climate change or nuclear proliferation, and these things are still moving along, full-tilt.
Per transaction it certainly does, the proof of which being that if you were to scale the energy per transaction up to the volume of transactions in the broader economy, you end up with more energy than humans produce.
I'm not sure a comparison to banking is appropriate though; much of what banks do (loans, etc.) is not obsoleted by cryptocurrencies.
When I mentioned my concern with the energy bitcoin uses someones response was that it is less than the banking industry. It didn't pass the sniff test but I honestly didn't know once you included all the overhead real banks have. I thought it was a interesting perspective.
You're completely ignoring layer 2 and other off-chain places where you can exchange Bitcoin. For example, while a transaction on-chain might move only 1 Bitcoin, it's very much possible that that Bitcoin has changed hands millions of times in another layer.
It's a UX/UI issue, you as a (presumed) tech worker should know better and consider it a working beta, not vaporware. It's there, it works, but most people have not been onboarded.
> So it's kind of like the Year of Linux On The Desktop?
Sure you can look at it that way, or see how Linux dominated the Mobile and Sever space which then bypassed the need for desktops entirely, so too has Bitcoin done to finance and you can now easily plug into the Global economy with nothing more than a 10 year old smart phone.
Honestly, you guys make my arguments for me so well that I think you have to be trolling (as closet Bitcoin holders) being bored at your otherwise mundane jobs.
Buy the way, been there done that, it loses it's novelty fast. And you're better off learning a new skill.
Centralized exchanges, lightning network, other blockchains (ethereum), other layer 2s on ethereum, etc. A settlement on the blockchain most likely corresponds to many other transactions elsewhere.
I have to imagine traditional banking would use less energy than Bitcoin given the computational requirements of each. The current banking system also impacts a lot of other industries that Bitcoin does not, so Bitcoin is more of an optional "luxury" compared to the traditional banking system.
The person that asked me that question was proposing that the banking industry with all the overhead of Brick&Mortar banks was far more wasteful than bitcoin. Doesn't seem bitcoin makes B&M go away though.
Bitcoin is an invalid comparison and has a laundry list of cons without very many (if any) pros. Comparing dollars to bitcoins is useless. I don’t have a single bill I can pay in bitcoin and if there was, the fees would be worse than current options. I don’t want to have my salary in bitcoin as its “value” is in a quantum state. Regardless of how loud proponents keep using the same 3 arguments, bitcoin usage will never be the norm.
If you can't think of a single pro of Bitcoin, you may not understand it very well; that's ok , it's complex and new paradigms can take a while to propagate.
To be clear, I want people to stop using Bitcoin. There are better cryptocurrencies which don't rely on energy burning to secure their networks, which have negligible fees, and which have near-instant confirmation times.
What part isn't understood? What is this "complexity" that makes it all worthwhile? I have gone through the white paper and built a PoC including web-app and mobile wallets. I have masters in Math and CS and 10 years of experience in financial services. This thread isn't discussing other "better cryptocurrencies."
I guess the "pro"s I'm referring to are how bitcoin is revolutionary. It's still 1st-gen , so it's "old" tech . Sure it's been largely superceded by modern designs, but you were comparing it to the central banking system and dollars.
Agreed, this should be brought up constantly. If there’s one good thing about the internet, it’s that it is able to highlight important issues and use that attention to make changes.
> Ignoring the ecological problems of Bitcoin won't make them go away.
They said the same thing about anti-war movements, of which Bitcoin is a critical component if you understand what is written in the genesis block.
Why not say the same thing about needless wars in Syria, Iraqm Afghanistan, Yemen etc... Or the horrible state of unemployment benefit scams (in the billions) and the distribution of it which ends up putting people into homelessness due to sheer imncomptence?
You HN's are so toxic about not having made it big with opensource tech disrupting finance that it's just sad now.
It's one thing to say you don't understand it, or that it's not for you because you live in the West but to say it has no intrinsic value and yet every major bank is sending us to new ATHs trying to get shows a clear disconnect from reality.
This is not just sour grapes anymore, this is Trump-supporter levels of delusion.
Get it through your heads: fiat is the problem to most of the World's problems, be it in warfare or environmental to the very notion of the State itself and Bitcoin just solved ~1/2 of the problem.
A part of me knows this has to do more with the fact that most of your careers and perhaps existence itself are not as important as you thought they were if Bitcoin wins, and fiat get devalued into obscurity as you have no other desirable attribute going for you, but you should just hedge your bets and join us.
We have way more things to solve and not enough Human Capital, if it's money you're after than it's going to be lean for you until you can add value to the network, but it can be done. I did it and so many others have to.
And I personally didn't even know how to code when I first heard about it 2010 when it was all just programmers.
> It's one thing to say you don't understand it...
Okay, I'll bite. Why is 'fiat' the root of all the world's problems rather than corrupt institutions and human nature? I don't even know what that means blame fiat. Something about moving off the gold standard? Didn't we have wars and corruption before that too?
> Why is 'fiat' the root of all the world's problems rather than corrupt institutions and human nature?
They enable it, and more importantly it has shown to be able to subvert a population in order to direct it's Human Capital to the most egregious of undertakings: War, genocide, mass murder, bureaucracy etc... These are only enabled because people are being compensated in something they need to acquire goods and services in a region, and since modern existence (Sumeria?) Nation-States have a monopolisitic control over this power, with no tolerance for it's 'corruption' from the outside as challenges it's core power.
My contention is: you remove the incentive for fiat and Society and Humanity (as flawed as we are) will re-organize itself for a more optimal outcome.
Unemployment concerns will be irrelevant if we as a species decide to tackle Climate Change, Regenerative Agriculture and Mars colonization (I've been involved in all 3 btw) in earnest, so why not build an economy around a tech that can function as a Multi-planetary Currency for it's Multi-Planetary economy?
> I don't even know what that means blame fiat. Something about moving off the gold standard?
This is rather meandering, but I think you're asking what does Fiat mean, right? If so, yes, it's a currency which at it's core has no intrinsic value other than that what Nation-State's have forced it's populace to accept it as, which has since been detached from it's former Precious Metal Backing. It comes from the latin word 'fiat' to mean: An arbitrary order or decree.
A little context: the average life for a currency (fiat or otherwise) is 40 years.
> Didn't we have wars and corruption before that too?
Sure, but conflict resolution and trade is more favourable outcome for man if the incentives are aligned correctly, and it should be the default for how Humanity should see itself moving forward. We have no chance of solving any of the World's problems if we continue on this path, be it environmental, warfare, political, social, Mars colonization... whatever.
Fiat had it's time, it created a level of industrialization and specilization which would have been impossible under a barter system or sparsely traded local currency model, and it was written in blood from our ancestors... but we are now at a transitionary phase which Bitcoin has proven with the test of time that we demand and now have a better alternative than what we are forced to comply to with USD/EURO/YUAN/YEN etc...
We are a single species and an ever-growing interconnected one at that, we should conduct ourselves as such rather than serve the interests of a small political elite who seem to be the only ones apt for potentially nuclear war (eg US vs China) when the rest of us just want to live our lives in peace and prosper in what could be an era of unfathomable wealth creation.
Instead we live in fear of what these people do as it could send us all back into the stone age if these sick sociopaths get their wars. Or we have to live in constant peril for the new economic downturn due to massive wealth disparity as a result of business-cycle economics that favour a select few and keep them in power.
Edit: I really don't care about your fake points, but to downvote in hopes of shutting down conversation is pathetic.
I took the time to respond and elucidate my points, you should at least challenge the argument instead of trying to make my words opaque because you don't like me or what I have said. The low level of intellectual discourse regarding Bitcoin here is appalling, and when someone tries to speak about it they get vilified or shutdown entirely, it's sad and I really can't explain how much it's dimmed my view of HN and most tech people in general.
Sorry, I don't see how that responded to my initial question.
> War, genocide, mass murder, bureaucracy etc... These are only enabled because people are being compensated on something they need to acquire goods and services in a region,
So in a world where all fiat currency is replaced by bitcoin, aren't people still going to be compensated and then acquire goods and services? So how does bitcoin avoid that problem? If arms manufacturers are paid in bitcoin, they are still going to lobby the US government to get involved in wars to increase demand.
If your main critique is capitalism, then I at least understand the specific philosophy you're criticizing. But if that's the case, then I don't see why bitcoin is a necessary part of that solution.
I'm really not understanding how "fiat" is the root evil here. Currency has value because people have trust in it preserving that value and being recognized by others for that value, no?
> Sorry, I don't see how that responded to my initial question.
Only because you don't understand the nature of money, and I want to preface I cannot solve that for you but I will try to clarify.
> So in a world where all fiat currency is replaced by bitcoin, aren't people still going to be compensated and then acquire goods and services?
I personally don't think it will just be Bitcoin, thier will be other alts. I just want make sure we make that clear.
> So how does bitcoin avoid that problem? If arms manufacturers are paid in bitcoin, they are still going to lobby the US government to get involved in wars to increase demand.
First, you're missing a critical understanding in what makes money 'valuable' and thus a currency, this has been understood since Aristotle laid it out: what you're missing is bitcoin is scarce, and thus cannot be created to fund these types of expenditures, and if they can it won't go on for very long. It's not that we just transition to a new medium of exchange, but a new value system itself which will demand that a scarce thing like Bitcoin be used rather a non-scarce thing like USD be used to bomb Syrians non-stop for matters that the CIA deems vital to it's geo-political strategy but that the soldier in Arkansas who fights these wars can acquire doing more valuable thing in Society--for example regenerative agriculture of hemp to create opioid replacement therapies.
You cannot run a deficit budget like the US or any empire before it has to fund it's militaristic pursuits with a scarce token based system--it's impossible due to the scarcity of the token to amass armaments on that level upon something we have all accepted has value and can be used for more productive ends like the 3 things I mentioned before that will serve Mankind rather than the lobbyists who promote warfare. This is economics 101, but the short thing is Warfare is an economic driver of the State, and it's affiliate Arms contractors, if you now level the playing field for what you're willing to die for why not just do the thing that promotes greater wealth creation for all than kill for Rayhtheon who does business with an entity that has created an unpayable $24+ trillion debt?
You have to understand the paradigm shift that is happening within this model, too: not just in monetary terms but in the Social Value structures that it depends on. Most people have lost confidence in their governments with COIVD, for good reason, wealth inequality has never been worse, which is why I think people are now willing to accept something like Bitcoin at all as the see how terrible all Government have conducted themselves thus far--only the smallest island nations being the exception.
> If your main critique is capitalism, then I at least understand the specific philosophy you're criticizing. But if that's the case, then I don't see why bitcoin is a necessary part of that solution.
I'm an Anarcho-Capitalist. I'm arguing we haven't had Capitalism due to a lack of open currency creation and independent systems outside the influence of the State, and the very nature of the Nation-State which creates and back fiat systems.
Bitcoin and what it represents is the first true form of actual free market capitalism we have seen, and it revealed the litany of problems withing it too mind you; but this cronyist-capitalist system most call 'capitalism' is the problem and is just as bad as the socialist/communist doctrines as it assumes it knows better than the Market (producers and consumers) and is often just as willing to take it's perverse models to near extinction of it's users--look at the aforementioned 3 aspects and why they are so critical in modern life on Earth.
> Currency has value because people have trust in it preserving that value and being recognized by others for that value, no?
That is one of a currency's supposed properties, yes; but as I explained, Nation-Stat...
"Bitcoin will end wars" has got to be the weirdest take I've encountered, but this isn't the first time I've seen it. Does anybody really believe this?
Wars have been fought since the first time a human picked up a stick with a pointy end. They don't require fiat currency. They are often fought over hard resources like arable land, fuel, deposits of valuable minerals. They are also often fought just because people A hate people B. Bitcoin doesn't change the slightest thing about any of that.
When mining is not profitable (such as just after a halving for a miner who was already on the edge of profitability), miners leave the market and the difficulty rate adjusts until the market is once again in equilibrium. Transactions do take energy, but currently only a fraction (about 1/7) of the mining reward is paid for by transaction fees alone.
An interesting question is whether the network can stay secure if the difficulty drops to ~1/7th of what it is today, or whether something else will have to give. (For what it's worth, even at 1/7th of the energy use the network is still incredibly wasteful by design.)
Not much energy is required for a transaction, but the network of legitimate miners has to have more hash power than any attacker. Once the block reward gets tiny, the profit will come from transaction fees. So it will depend on whether the users collectively get enough benefit to pay the miners. If the attackers get more hash power, the blockchain will lose legitimacy as the source of truth and the whole thing will collapse.
Stop using MWh as some metric of environmental consequence. A MWh from a French nuclear plant or a Danish wind farm is not equivalent to a MWh from a Chinese coal power plant.
Also, it's not fair that countries who primarily use wood for fuel (Africa) get to look like they're environmentally great, even though combustion of wood causes a huge amount of pollution and global warming. Average fuelwood consumption in Africa often exceeds 1000 kg/capita annually. That's got to add up to the Chinese mining a bunch of coins, right?
Even if you don't believe in climate change, MWh is a useful metric.
Electricity is not free. Drastically increasing demand for electricity drives up the prices for everyone, in the short term, as electricity rates go up. Even once more supply is created--not an easy thing--society as a whole still bears the risk that the Bitcoin-driven demand will go away (due, e.g., to a crash in value) leaving us with an oversupply of electricity.
Either way, "Bitcoin uses more electricity than x" can be a helpful comparison to more effectively convey just what we are signing up for in adopting Bitcoin widely.
This among other less environmentally impactful factors is why I believe Bitcoin isn't sustainable in the long run. There are other cryptocurrencies which guarantee the same properties as bitcoin (immutability, no double spend, etc) without bitcoin's flaws.
For a first attempt Bitcoin killed it. But scaling isn't its virtue.
Folks may want to check out Chia, an energy-efficient blockchain by the creator of Bittorrent based on storage space not processing power: https://www.chia.net/
People are mining Chia with petabytes of storage off a single raspberry pi so the energy usage is really minimal and there's tons of over-provisionsed hard drive space out there.
Haha yeah, I wish the Chia guys would put something in the FAQ about this because it's a common criticism. I've heard them make a convincing case that, unlike CPU cycles, there's actually a lot of over-provisioned space on existing consumer and enterprise hard drives. And unlike Bitcoin, Chia can actually be mined ("farmed") by anyone with extra space on their drives because the technical requirements are so minimal (there are people mining petabytes off a Raspberry Pi, for example).
The Chia team also seems to think that if Chia actually does scale to the point of significantly altering production resources, it would be likely to just drive down the price of storage for everyone since there's no specialized hardware that makes mining Chia economically worthwhile. Plus unlike the bitcoin mining hardware, you (or corporations buying lots of drives) can use the storage space for things besides Chia. I have no idea myself if that's how the economics would work out, but it seems likely we'll find out — the network is currently at 200PB and growing: https://www.chiaexplorer.com/charts/netspace
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[ 3.6 ms ] story [ 126 ms ] threadTo make this more obvious suppose all money was bitcoin. By your logic it would be worth it to make our sole economic activity 'securing' it. We'd literally all starve and die.
Wrong. The number (or more specifically "weight") of the transactions that can be processed in a given time period is constant, and does not scale with the hash rate.
> it would take more than the entire energy production of the world to make bitcoin the sole currency
I do not follow..
Sound good so far?
Next, the block reward is denominated in BTC. Currently 6.25 BTC every 10 minutes, but it'll halve again in 2024. The block reward, plus transaction fees, is what the network pays miners. It makes sense for miners in aggregate to expend about that much money on mining, because if the network is spending less than that, there is still profit available for additional miners joining in.
If that 6.25 BTC becomes valued at 10x or 100x as much as it is today, the expenditure on mining will also be 10x or 100x larger. Obviously this can't actually exceed the energy production of the world because that's impossible, but this new artificial demand for energy can soak up lots of capacity that would otherwise go to more productive, yet less profitable, endeavors. The fact that it's using 1/200th of the world's energy production already, while it's just a toy speculation vehicle, doesn't bode well.
As you correctly point out though, this additional expenditure on mining will do absolutely nothing to help the number of transactions that can be processed in any given time period.
Nobody here is impressed by you, the condescension sounds ridiculous.
> the expenditure on mining will also be 10x or 100x larger
This is correct, but the assumption that energy will continue to represent a very large part of that expenditure is faulty. There is a huge incentive for miners to mine more efficiently, especially in this hypothetical universe where Bitcoin is driving up energy prices.. That expenditure could easily be disproportionately spent on more efficient hardware / algorithms.
Alternatively Bitcoin might not be using proof of work in this hypothetical future. It's not immutable.
I can't imagine an algorithmic or hardware improvement that would stop a proof of work system scaling with energy input.
You might be right though, but like I said I don't think PoW is necessarily the final state.
I suspect mining expenditure would still be mostly spent on energy usage, not finding more efficient hardware/algorithms, since mining is an arms race -- when miner A finds a more efficient algorithm, it's only a matter of time before miner B finds it too, and then they're back on level ground competing over energy.
But even if this is not the case, I don't particularly care whether the mining expenditure is spent on energy, or developing and manufacturing new mining hardware, or sacrificing goats to a hash-finding deity. Since the amount of mining the network does is set by a price tag (the block reward), and its intent is to make 51%ing prohibitively costly, by definition it must use up some valuable resource. Whether that's energy or human ingenuity or semiconductor production is just an implementation detail but it'll always be a waste.
If Bitcoin switches away from proof of work, I'll stop criticizing it for the inefficiency of proof of work.
It indeed makes no sense if you completely ignore half of the argument (and probably misunderstand it on top of that).
The argument was that it makes sense to spend currency for security equal to the amount of currency you are securing, meaning if you do that for all currency, (pretty much) the sole economic activity will be securing it.
Suppose for the moment that what is mining power to bitcoin is the US military to the USD. It makes no sense to spend all USD on just the military, so that it can secure the currency, does it?
You are right, I don't understand this argument at all. It only makes sense to spend the minimal amount that would keep it secure.
The incentive to mine is only the block reward, which is only transaction fees plus inflation. The incentive is not the entire pool of currency.
I'm not sure what you mean by the 2nd paragraph, are you saying if all money was bitcoin, we'd only spend energy to secure that and we wouldn't do nothing else? That wouldn't make sense right? If all money was Bitcoin, there wouldn't be as much upside to it, because it will have already won, so you'd need to do other economic activities which will grow faster than that.
According to who, the people making all the money? It's obvious that people don't find it that simple.
If anything, this problem is not limited to Bitcoin, we should put a carbon tax on everything with externalities. Why just focus on crypto when there are far bigger polluters?
It's just another one of the forms of mutually assured destruction that we will eventually have to confront. It's unfortunate that being very obviously horrible isn't enough to change it, but the same could be said for climate change or nuclear proliferation, and these things are still moving along, full-tilt.
I'm not sure a comparison to banking is appropriate though; much of what banks do (loans, etc.) is not obsoleted by cryptocurrencies.
Sure you can look at it that way, or see how Linux dominated the Mobile and Sever space which then bypassed the need for desktops entirely, so too has Bitcoin done to finance and you can now easily plug into the Global economy with nothing more than a 10 year old smart phone.
Honestly, you guys make my arguments for me so well that I think you have to be trolling (as closet Bitcoin holders) being bored at your otherwise mundane jobs.
Buy the way, been there done that, it loses it's novelty fast. And you're better off learning a new skill.
If "another layer" means lightning network, I doubt it.
You could do the same with dollars.
To be clear, I want people to stop using Bitcoin. There are better cryptocurrencies which don't rely on energy burning to secure their networks, which have negligible fees, and which have near-instant confirmation times.
I think it's pretty naive to think that the $1T market cap is accidental, or driven by dumb money.
They said the same thing about anti-war movements, of which Bitcoin is a critical component if you understand what is written in the genesis block.
Why not say the same thing about needless wars in Syria, Iraqm Afghanistan, Yemen etc... Or the horrible state of unemployment benefit scams (in the billions) and the distribution of it which ends up putting people into homelessness due to sheer imncomptence?
You HN's are so toxic about not having made it big with opensource tech disrupting finance that it's just sad now.
It's one thing to say you don't understand it, or that it's not for you because you live in the West but to say it has no intrinsic value and yet every major bank is sending us to new ATHs trying to get shows a clear disconnect from reality.
This is not just sour grapes anymore, this is Trump-supporter levels of delusion.
Get it through your heads: fiat is the problem to most of the World's problems, be it in warfare or environmental to the very notion of the State itself and Bitcoin just solved ~1/2 of the problem.
A part of me knows this has to do more with the fact that most of your careers and perhaps existence itself are not as important as you thought they were if Bitcoin wins, and fiat get devalued into obscurity as you have no other desirable attribute going for you, but you should just hedge your bets and join us.
We have way more things to solve and not enough Human Capital, if it's money you're after than it's going to be lean for you until you can add value to the network, but it can be done. I did it and so many others have to.
And I personally didn't even know how to code when I first heard about it 2010 when it was all just programmers.
Okay, I'll bite. Why is 'fiat' the root of all the world's problems rather than corrupt institutions and human nature? I don't even know what that means blame fiat. Something about moving off the gold standard? Didn't we have wars and corruption before that too?
They enable it, and more importantly it has shown to be able to subvert a population in order to direct it's Human Capital to the most egregious of undertakings: War, genocide, mass murder, bureaucracy etc... These are only enabled because people are being compensated in something they need to acquire goods and services in a region, and since modern existence (Sumeria?) Nation-States have a monopolisitic control over this power, with no tolerance for it's 'corruption' from the outside as challenges it's core power.
My contention is: you remove the incentive for fiat and Society and Humanity (as flawed as we are) will re-organize itself for a more optimal outcome.
Unemployment concerns will be irrelevant if we as a species decide to tackle Climate Change, Regenerative Agriculture and Mars colonization (I've been involved in all 3 btw) in earnest, so why not build an economy around a tech that can function as a Multi-planetary Currency for it's Multi-Planetary economy?
> I don't even know what that means blame fiat. Something about moving off the gold standard?
This is rather meandering, but I think you're asking what does Fiat mean, right? If so, yes, it's a currency which at it's core has no intrinsic value other than that what Nation-State's have forced it's populace to accept it as, which has since been detached from it's former Precious Metal Backing. It comes from the latin word 'fiat' to mean: An arbitrary order or decree.
A little context: the average life for a currency (fiat or otherwise) is 40 years.
> Didn't we have wars and corruption before that too?
Sure, but conflict resolution and trade is more favourable outcome for man if the incentives are aligned correctly, and it should be the default for how Humanity should see itself moving forward. We have no chance of solving any of the World's problems if we continue on this path, be it environmental, warfare, political, social, Mars colonization... whatever.
Fiat had it's time, it created a level of industrialization and specilization which would have been impossible under a barter system or sparsely traded local currency model, and it was written in blood from our ancestors... but we are now at a transitionary phase which Bitcoin has proven with the test of time that we demand and now have a better alternative than what we are forced to comply to with USD/EURO/YUAN/YEN etc...
We are a single species and an ever-growing interconnected one at that, we should conduct ourselves as such rather than serve the interests of a small political elite who seem to be the only ones apt for potentially nuclear war (eg US vs China) when the rest of us just want to live our lives in peace and prosper in what could be an era of unfathomable wealth creation.
Instead we live in fear of what these people do as it could send us all back into the stone age if these sick sociopaths get their wars. Or we have to live in constant peril for the new economic downturn due to massive wealth disparity as a result of business-cycle economics that favour a select few and keep them in power.
Edit: I really don't care about your fake points, but to downvote in hopes of shutting down conversation is pathetic.
I took the time to respond and elucidate my points, you should at least challenge the argument instead of trying to make my words opaque because you don't like me or what I have said. The low level of intellectual discourse regarding Bitcoin here is appalling, and when someone tries to speak about it they get vilified or shutdown entirely, it's sad and I really can't explain how much it's dimmed my view of HN and most tech people in general.
But such is the price of successful disruption.
> War, genocide, mass murder, bureaucracy etc... These are only enabled because people are being compensated on something they need to acquire goods and services in a region,
So in a world where all fiat currency is replaced by bitcoin, aren't people still going to be compensated and then acquire goods and services? So how does bitcoin avoid that problem? If arms manufacturers are paid in bitcoin, they are still going to lobby the US government to get involved in wars to increase demand.
If your main critique is capitalism, then I at least understand the specific philosophy you're criticizing. But if that's the case, then I don't see why bitcoin is a necessary part of that solution.
I'm really not understanding how "fiat" is the root evil here. Currency has value because people have trust in it preserving that value and being recognized by others for that value, no?
Only because you don't understand the nature of money, and I want to preface I cannot solve that for you but I will try to clarify.
> So in a world where all fiat currency is replaced by bitcoin, aren't people still going to be compensated and then acquire goods and services?
I personally don't think it will just be Bitcoin, thier will be other alts. I just want make sure we make that clear.
> So how does bitcoin avoid that problem? If arms manufacturers are paid in bitcoin, they are still going to lobby the US government to get involved in wars to increase demand.
First, you're missing a critical understanding in what makes money 'valuable' and thus a currency, this has been understood since Aristotle laid it out: what you're missing is bitcoin is scarce, and thus cannot be created to fund these types of expenditures, and if they can it won't go on for very long. It's not that we just transition to a new medium of exchange, but a new value system itself which will demand that a scarce thing like Bitcoin be used rather a non-scarce thing like USD be used to bomb Syrians non-stop for matters that the CIA deems vital to it's geo-political strategy but that the soldier in Arkansas who fights these wars can acquire doing more valuable thing in Society--for example regenerative agriculture of hemp to create opioid replacement therapies.
You cannot run a deficit budget like the US or any empire before it has to fund it's militaristic pursuits with a scarce token based system--it's impossible due to the scarcity of the token to amass armaments on that level upon something we have all accepted has value and can be used for more productive ends like the 3 things I mentioned before that will serve Mankind rather than the lobbyists who promote warfare. This is economics 101, but the short thing is Warfare is an economic driver of the State, and it's affiliate Arms contractors, if you now level the playing field for what you're willing to die for why not just do the thing that promotes greater wealth creation for all than kill for Rayhtheon who does business with an entity that has created an unpayable $24+ trillion debt?
You have to understand the paradigm shift that is happening within this model, too: not just in monetary terms but in the Social Value structures that it depends on. Most people have lost confidence in their governments with COIVD, for good reason, wealth inequality has never been worse, which is why I think people are now willing to accept something like Bitcoin at all as the see how terrible all Government have conducted themselves thus far--only the smallest island nations being the exception.
> If your main critique is capitalism, then I at least understand the specific philosophy you're criticizing. But if that's the case, then I don't see why bitcoin is a necessary part of that solution.
I'm an Anarcho-Capitalist. I'm arguing we haven't had Capitalism due to a lack of open currency creation and independent systems outside the influence of the State, and the very nature of the Nation-State which creates and back fiat systems.
Bitcoin and what it represents is the first true form of actual free market capitalism we have seen, and it revealed the litany of problems withing it too mind you; but this cronyist-capitalist system most call 'capitalism' is the problem and is just as bad as the socialist/communist doctrines as it assumes it knows better than the Market (producers and consumers) and is often just as willing to take it's perverse models to near extinction of it's users--look at the aforementioned 3 aspects and why they are so critical in modern life on Earth.
> Currency has value because people have trust in it preserving that value and being recognized by others for that value, no?
That is one of a currency's supposed properties, yes; but as I explained, Nation-Stat...
Wars have been fought since the first time a human picked up a stick with a pointy end. They don't require fiat currency. They are often fought over hard resources like arable land, fuel, deposits of valuable minerals. They are also often fought just because people A hate people B. Bitcoin doesn't change the slightest thing about any of that.
Miners are always necessary to process transactions.
An interesting question is whether the network can stay secure if the difficulty drops to ~1/7th of what it is today, or whether something else will have to give. (For what it's worth, even at 1/7th of the energy use the network is still incredibly wasteful by design.)
Also, it's not fair that countries who primarily use wood for fuel (Africa) get to look like they're environmentally great, even though combustion of wood causes a huge amount of pollution and global warming. Average fuelwood consumption in Africa often exceeds 1000 kg/capita annually. That's got to add up to the Chinese mining a bunch of coins, right?
Electricity is not free. Drastically increasing demand for electricity drives up the prices for everyone, in the short term, as electricity rates go up. Even once more supply is created--not an easy thing--society as a whole still bears the risk that the Bitcoin-driven demand will go away (due, e.g., to a crash in value) leaving us with an oversupply of electricity.
Either way, "Bitcoin uses more electricity than x" can be a helpful comparison to more effectively convey just what we are signing up for in adopting Bitcoin widely.
For a first attempt Bitcoin killed it. But scaling isn't its virtue.
People are mining Chia with petabytes of storage off a single raspberry pi so the energy usage is really minimal and there's tons of over-provisionsed hard drive space out there.
The Chia team also seems to think that if Chia actually does scale to the point of significantly altering production resources, it would be likely to just drive down the price of storage for everyone since there's no specialized hardware that makes mining Chia economically worthwhile. Plus unlike the bitcoin mining hardware, you (or corporations buying lots of drives) can use the storage space for things besides Chia. I have no idea myself if that's how the economics would work out, but it seems likely we'll find out — the network is currently at 200PB and growing: https://www.chiaexplorer.com/charts/netspace
Love your work by the way! Hope you're well.