Except it pollutes more than entire countries. And most tech stocks produce something of value. Even if that’s just funneling VC money into underpriced cab or food delivery service.
Some industries use more energy but do more useful things.
The question is what’s the minimum to do something. Bitcoin uses more energy than the alternatives.
A wood burning stove is wasteful, a heat pump, not so much. Why? Because what’s important is the difference in energy between the action taken and the most efficient action to complete a task.
Energy does not come from nothing. A large amount of it comes from polluting sources. In those cases there is a very direct relationship between the creation of energy and pollution.
Clean energy is obviously better, but suffers from a fundamental problem: energy is fungible.
If mining takes up 10 MWh of juice, anyone else who would have used that energy can’t. So they have to use other energy. Often fossil fuel based energy has to make up the difference. For all intents and purposes the mining used that fossil fuel energy.
If mining only used excess electricity produced by clean power plants, there would be no problem. But it’s not incentivized to use extra energy, it’s incentivized to use cheap energy. If energy can be generated by fossil fuels cheaper than what you can earn from mining, miners will use that energy. Producing pollution that wouldn’t have otherwise existed.
Even if mining only used spare energy generated from clean sources, using that energy means it can’t be stored to be used later, like at night. Possibly necessitating polluting generation later. (I know storage isn’t common today.)
If you can explain how mining either does or feasibly could given real incentives use only spare non-polluting energy I would love to know.
Sure, the flare gas sites that are (or arent) connected to the grid are exactly a case where bitcoin mining is taking from no other use, and actually reducing very quantifiable pollution
There are likely several gigawatts of this kind of energy in north america and the amount of energy used this way and for mining in total will continue to increase without causing more pollution
This is due completely to market forces as well, which is worth saying because more mining will migrate to this without it being some altruistic response to environmental outcry
Energy is most definitely not fungible. The availability of energy and demand for energy can vary by greatly location. For it to be fungible, energy would need to be free to transport, or demand for energy would need to be location insensitive.
Bitcoin actually does a lot of good things here because it is location insensitive. For stranded energy, say methane flare gas, there is not an economical way to use the energy of this gas because transport is too expensive and demand is too far away. In this way, the bitcoin mining is consuming energy that wouldn't actually otherwise be marketable. It is also greatly reducing greenhouse emissions without demand for the energy, the methane would be burned, which has much worse emissions than when consumed in a generator.
This discussion will go nowhere. Clearly the pro-Bitcoin crowd thinks proof of work is the most efficient way to get a permissionless, trustless, decentralised currency. And the anti-Bitcoin crowd either thinks
1. It's not the most efficient way and there's an alternative (e.g. Proof of Stake)
or
2. It may or may not be the most efficient way, but Bitcoin doesn't provide the value to justify the carbon emissions ('just tax carbon commensurate to its negative externalities and let people decide for themselves', he says helplessly)
This deserves to be the top posted comment, but will certainly never be.
Controversial Take:
There is effectively no ceiling on the value potential of Bitcoin.
If you live in a hyperinflationary environment, of which there are tons of examples in the last 100 years, the value is known. To people living with the $dollar and expecting endless monetary superiority, it is hard to recognize.
It's important to note, there is incentive for miners to use renewable energy. Vast amounts of capital have propped up renewables that languish for lack of a proper demand. Wind isn't on demand, nor is solar.
But there's never any discussion of the waste and pollution that subsidized unproductive green energy solutions produce.
Mining can utilize 100% of that supply. It acts as a reinforcing mechanism for investment in clean energy.
How is this lost on people?
Bitcoin's energy use is pollution in the strictest sense: it is quite literally wasted as part of the proof scheme. Some of that energy might come from renewable sources, but plenty of it is coming from coal and dinosaur juice.
This is true of lots of industries, but even our most wasteful (raw aluminum processing?) or grossly extractive (gold mining?) industries produce actual materials of value.
Fast Fashion is pollution then as well, and that’s absolutely horrible environmentally and in regards to factory conditions. There aren’t any BTC sweat shops as far as I know.
where can I read about that, could potentially change my view, in some circumstances I think the pollution reduction is greater and I also think dissipation is different than hydrocarbon presence
I couldn't read the article, but I think part of the significance is that bitcoin is believed by some to be a new gold standard that investors would fly to as a store of value and medium of exchange when other markets are failing. But the reality is that it performs no differently than a volatile tech investment, and in doing do negates a big part of it's putative value proposition.
I agree with everything in your comment, I just think it's worse than an energy intensive, non contributing tech stock, it also doesn't do any of the things that people talk up as reasons to buy it.
USD is fundamentally different from cryptocurrency. For one thing, there will always be demand for USD because Americans have to pay taxes in dollars. If you’re an American and you make $X in a year, you have to buy ~1/3 of that in USD to pay your taxes, no matter what.
The fact that there is forced demand does not matter because the supply is potentially infinite. Look towards any episode of hyperinflation to see this on full display. You need both limited supply and non-zero demand to guarantee scarcity and thus value.
That's no how money works, money is mostly created by demand (93 to 97% in developped countries with efficient banking system). And that money is easy to destroy too, you could destroy 93% of existing dollars by reimbursing the debt owned by household, companies and US government.
Sorry, i should have said: that's not how money works in modern economies.
I'm not ignoring hyperinflation, but clearly it has nothing to do with Zimbabwe or Venezuela. The only comparison could be the Weimar republic, as this disaster was caused too by production deficits (France invading the Ruhr valley+ loosing colonial income), but obviously similarities stop there.
So exiting a crashing fiat is like a fire extinguisher or a pistol, worthless until such a moment it is the only thing that isn't worthless.
Drugs, too, I defend the actions of the victims of the opioid epidemic in seeking drugs, they were actively tortured for most of their waking hours by a multi-level-marketing pharmaceutical scam. Those drugs weren't recreational, they were an anaesthetic in response to malpractice. Like the Sacklers are literally hard drug dealers, they literally have a monopoly on legal heroin and cocaine. Or should I say OxyContin and Adhansia. They did that through legal bribes as a cover for additional fully illegal bribes, inviting doctors to hedonistic islands to get compromat, treating the FDA like their personal lapdog, disgusting acts of philanthropy with their ill-gotten gains, medical media, and the ordinary media.
So like if they are cornering the market and intentionally cheating the patients out of antidote while increasing the doses of poison, you know what, don't tell me black is white. The legal market is shit and the illegal market is superior. And in fact the only limit to their cheating their patients out of medicine is presented by the black market, that's the resistance and why the problem wasn't even worse.
This response seems more related to the morality of drug addiction (through big pharma or dark web). I don't think you can say that the illegal market is superior. There's a lot of downside: Buying heroin and getting fentanyl is an example. My only claim is that cryptocurrencies are useful for things that are at odds with national governments (circumventing their legislation, or dealing with the fact that they're dysfunctional), since in those situations, fiat doesn't work well.
Do your homework, fuck. You can buy kits to test drugs for purity on those same black markets. It's playing with fire, use your judgment.
I would say fentanyl sounds disgusting, but OxyContin is even worse, because at least fentanyl you're not being tortured for ten hours a day. The dealer isn't gaslighting you about dosage. There are opioids that strong and there are like jeweler's scales you can use to mete them out.
So in particular I never had an interest in hard street drugs, just sounded highly unattractive. Like falling into a black hole. To feel happy? Come on.
Real assets aren't inherently more valuable than digital ones. I've spent much more on digital assets in my life than on physical assets. Cosmetics in video games are much more valuable to me than like clothes in real life. To me buying physical stuff is mostly a waste of money.
The USA army could be dissolved and the economy could switch to use something else. Of course these events have a low probability of happening but if someone wants to say something else doesn't have a floor because demand could dry up you can't say something else does have a floor even though demand could dry up just the same.
I don't quite understand what you are getting at. Could you explain a little more of what you mean? If I have a CSGO knife why would I care about anything physical?
Because CS had physical offices and servers behind that digital knife. Lacking a physical security guarantee like the army, some armed group or nation state can simply take or destroy the physical things from CS and there goes your digital possessions too.
It's hard to imagine, but basically a state does need some level of force to be able to protect property rights. Without that you can't have much of an economy period, nevermind a digital economy.
Early 20s. Physical goods are worthless to me compared to digital ones. My hardware is pretty much the only physical thing I invest into because it's the portal to the digital world for me.
I'm biased but I'll say that as you age you'll value much more the physical world - a partner, children, your house, a pet. The best things in life are offline.
It does have the natural floor that it's unlikely for your personal holdings to somehow turn into debt, at least. That's ... better than some assets you could hold.
It hasn't failed for anyone following a moderately informed buy-and-hold strategy. I bought some bitcoin in August '17 and thought 'we'll see in ten years'. It has remained greener than any of my other investments.
That's the thing though. The utility is what informs the perceived long-term value. It isn't meant to be an investment, it is meant to be a currency. Beanie Babies weren't a currency or an investment, they were a toy.
The article is written as a response to claims that Bitcoin is an asset (class) different enough from stocks to be useful to diversify a portfolio. It's pointing out that, at a correlation of 0.86, it really isn't.
Which is a reasonable point. It really follows tech stocks pretty closely.
But in my mind it’s still an unfair comparison because tech stocks generally have some kind of fundamental tangible value. It may be worth 1/500th what the market cap is, but it’s there.
I don’t see that with Bitcoin. Just insane wastes of resources and pollution creation.
Proof of work existed long before bitcoin, and I haven't seen any evidence that bitcoin is an important innovation despite it being 13 years old. Send it to zerooo
Bitcoin is very smart. When I first learned about it, I thought it was so cool how it all came together, the combination of cryptographic security, distributed trust, even a Forth-like mini language built in. I made my own coin, I played with the source code, I made my own nonstandard protocol that used a bitcoin blockchain (unfortunately I never bought any bitcoin, but at any given time it's a terrible investment, even if it's paid off retrospectively).
Anyway, I say all this because I really find it clever, and I really wanted it to be able to do something useful, but the reality is, it doesn't. It's never going to be useful, it's been adopted by scammers and mountebanks, it has no utility and will cause so much harms in the scams that it supports.
So while it seems like a cool innovation, and from a purely technological standpoint it is, in reality it's poison. In that regard, it has (sorry for the tired analogy) a lot in common with communism. Cool idea, doesn't work at all, destroys lives. We need to let it go.
>"When I first learned about it, I thought it was so cool how it all came together, the combination of cryptographic security, distributed trust, even a Forth-like mini language built in."
Interesting, could you elaborate on the Forth bit? Where does this fit in? This is the first I've heard of it but admittedly I don't know that much about Bitcoin.
See the link below. It includes a stack based scripting language (essentially a subset of Forth) for processing transactions so you can do some customization in how transactions unfold. As I understand it (and I don't know much about Ethereum) a big difference is that Eth has a Turing complete scripting language that can run code as part of transaction, while bitcoin only has a subset that doesn't include e.g. looping.
…well, even if you don’t consider naturally occurring phenomena like fire to be a human innovation, I’d argue things like “the written word” or “mathematical notation” or “formal logic” are perhaps a bit more important, and one might even say foundational to Bitcoin.
Bitcoin and PoW not really, but the core idea of cryptocurrency stuff is distributed byzantine-fault-tolerant consensus where honest behavior is economically incentivized. That sounds kind of abstract and bitcoin itself is not very useful (throughput is too low), but if it can be made to scale it’s very powerful. First of all, it allows computation that no one can control, which is most obviously applicable to finance with things like automatic market makers.
But more compelling to me is that it allows you to do what bittorrent did but in general - with bittorrent anyone can host a file and a static link can help you find those people and download the file (with no need to trust that the person serving the file hasn’t replaced it with some other file). This is possible because of cryptographic primitives like hashes that let you use a few bytes to uniquely identify the contents of any file, distributed hash tables that let you come to agreement on which IP addresses are serving which files, etc. (If you don’t think bittorrent is useful, that’s fine, but me and many others think it is.)
There’s still a lot of work to be done, but we’re approaching a point where you can “bittorrent-ize” a much broader class of services. Bittorrent works only for serving files whose hashes you already know, but doing the same for a service like HN is much more difficult. You need to allow posts from many different people and know when they were submitted, and maintain vote counts, but a distributed ledger is perfect for this. It’s not practical to do this on any decentralized cryptocurrency right now, but we’re slowly getting there.
Like I said, scaling this is a very difficult problem, for example you need to have data sharding so that not every node has to store the full ledger, but over the last few years cryptocurrency people have come up with very good data sharding systems like danksharding (which will hopefully be implemented on Ethereum in the next decade).
You also don’t want every node to have to redo all the computation, but ZK-proofs (which were basically only used in academia before cryptocurrencies came along and poured billions of dollars of funding into making them practical) make that unnecessary at the cost of some significant overhead when performing the computation. Despite that cost, we already have really good layers on top of Ethereum called ZK-rollups that lower the transaction cost to almost zero and introduce no new trust assumptions.
You also want state expiry or state rent so the network state doesn’t grow monotonically, but that’s also being developed and in the past few years we’ve also developed some really good state expiry schemes.
You also want fast finality so that you don’t have to wait 10 minutes for the contents of the ledger to stabilize, but we finally have scalable permissionless byzantine fault tolerant consensus schemes that have very fast finality (<30s), one of which is being implemented on ethereum (called casper).
There’s other cool stuff too, but I think this direction is one of the most exciting ones.
Disclosure: I’m a protocol developer for a major cryptocurrency (although not ethereum or bitcoin)
I have all the same concerns regarding pollution, but Bitcoins rise has made me think a lot about the 'value part' in other stocks.
If Bitcoin's price can get this high without the 'intrinsic value' or producing something, then this effect probably also exists for other stocks. And this made me wonder: how big of a factor is this in other tech companies.
The more I think about it, the more I feel that it must be the majority for many of them. Many companies operate at a loss and are just pumped up to push up metrics, just so someone else will pay more for it in the next round.
first dot com crash tech learned you actually need a product when the markets go south - now (second) tech is learning you need an actual good product when the markets go south --
Yeah, people have bought stocks on future expectations - specifically, future expectations of being able to sell it for more than they bought it, and for more than if they bought something else instead - for quite a long time, compared to buying just on what has already happened.
But they still use concrete financials (e.g. growth of revenue is just the derivative of revenue) to make those decisions, and are assuming that the future buyers will be looking at similar numbers that are based in the same real economic business process.
The fundamental case for bitcoin-as-an-investment[0] is much less well-defined, and differs far more depending on who you ask.
[0] bitcoin-as-currency is a different frequently-talked-about potential future state, but not as relevant to the "acting like a tech stock" discussion
> But they still use concrete financials (e.g. growth of revenue is just the derivative of revenue) to make those decisions, and are assuming that the future buyers will be looking at similar numbers that are based in the same real economic business process.
This makes sense to me, but I wonder how many VCs will pump money into a business, having a pretty good hunch that the business model will never make that much sense at a meaningful scale, but the numbers will probably look good enough for a return of investment until the pyramid collapses after the series C.
These companies are restructured for increase of perceived value, not multi-decade sustainability. Bitcoin to me is just the purest form of this culture.
I would bet money that this has happened a TON over the last decade, just as you say. Especially post-Uber where "hypergrowth" to get market dominance was all the rage even in extremely cost-heavy, lower-margin industries where scaling was always gonna be a big challenge.
If there's good news, though, it's that this appears to be slowing down. Lot of folks getting disillusioned with WeWork, Uber, etc now that those exits happened and went nowhere. I'm assuming investors are realizing they won't be able to play that trick too many more times.
How was WeWork QE-driven? It's financials were just plain bad, no? The story was that "scale + tech = magic" would happen at some point. The story didn't work. Everyone knew that it hadn't happened yet, though, as far as I recall.
You saying "I don't trust an adjusted ebidta metric" is perfectly valid, of course, but that number was there and the business processes behind it were there. A bit different from "i'm a bunch of bits stored on a computer."
QE drove investors to riskier returns and an inappropriate focus on growth companies that promise the future. This is a fundamental effect of low interest rates on valuation.
Suppose you open a spreadsheet right now, discount 100 years of cash flows, and measure each cash flow as a % contribution to the sum (aka npv). You will find that at medium to higher rates years 0-20 make up the greatest percentage of the npv by far. But as you lower them, that relationship flips and cash flows for years 20 to 100 become the lion's share of the valuation.
WeWork isn't the only 'ridiculous promise-the-future' company we saw over QE, just the first I could name off the top of my head. But through the lens I described above, all those weird 'how could investors be so stupid' situations make more sense because the valuation math was slanted to favor such situations.
In the stock market, because if everyone in the world wanted to sell all their stock in some companies, some folks would snap up the opportunity to take control of at least most of those companies. Yes, this is several levels obfuscated by the time you get to retail investors (and if you look just at news media sources targeted at retail investors, it's almost all short-term reactionary bullshit), but ultimately that's the fallback for the system that is gonna keep prices non-zero. Very recent tangible example: Elon Musk willing to pay real money to take control of Twitter.
In the crypto market... what's the ultimate backing? Hope of various sorts of a future new world financial infrastructure, reserve currency, store of value? I've heard a thousand stories, none of them are true yet though.
Sure, if you believe in one of those futures, you should invest in the appropriate crypto tokens. You'll be better off if fewer of the rest of us believe in it now when you're about to buy, after all. ;) But if your analysis of where to put your money - trying to figure out what's likely to hold or gain value vs lose it - comes down to "eh it's all the same yolo" then just recognize that it's a gamble to invest in crypto - saying "I believe that it's also a gamble to invest in stocks" doesn't really make it a better gamble.
The concrete financials are still dependent on an assumption that someone else will buy a product that the company makes. It seems inescapable that the bedrock of any definition of value is what someone else is willing to pay for something. As an example, you could assume that bitcoin should have zero value, but apply concrete financials to derive a non-zero value of a bitcoin mining company. To get the valuation of anything, you ultimately have to make an assumption about what people will value in the future.
How many? I keep hearing this question as if asking it was a valid argument in itself. (Though, to be fair, you do underline that you don't know the answer.)
Regarding your question: whatever they do, those humans will consume resources and create waste. We can't delete them if we do away with Visa :). Sure, they, in theory, would be able to work on something else, freeing up their resources, but that wouldn't decrease the resource use of humanity.
Also, people keep comparing BTC's current resource use to the bank system (I think that includes the CC companies as well). However, very few transactions are done with BTC compared to the world financial system (or even just Visa). And if adoption grows, BTC price grows and if BTC price grows (or, in other words everything devalues relative to BTC) then mining rewards grow (measured in other assets) and if mining rewards grow then new miners will join and that means using more energy.
I think I've seen a comparison between Visa and BTC measuring how much energy each used for doing a single transaction (or for moving a set amount). Visa was 10 or 100 fold more efficient. Even back then.
I actually think you give the parent argument just a tad too little credit. If crypto was useful as a currency (and, as you point out, if it is comparably as energy efficient as visa), that would be an effective refutation to the energy consumption argument; freeing up human resources to do something else would be a substantial net benefit of the system for society.
However, crypto does not behave to act effectively as a currency; it would be an awful idea to replace the global financial infrastructure with crypto thus the energy costs are here to stay.
Well, it's not enough to be useful. It should be better to justify the extra energy consumption. Especially given the climate change. Also, you forget that we actually don't yet know (no one has estimated, as far as I'm aware) the realistic consumption that we'd see with wide spread adoption. And without that, it's very hard to argue and say that it's worth it because of the usefulness. Because we don't know how much we're talking about.
So I think the energy argument fails on it's own. Also, it should come at least with strong supporting arguments claiming the actual benefits. But I do agree that cryptos are worse than the currencies we have and existing block chains (I'm aware of) don't make sense even as a distributed transaction tracking system for fiat currencies.
Removing the human factor is not just about comparing energy and resource efficiency. There is a social and political impact. Intermediaries like banks infringe on our basic freedoms to hold our own money, to have privacy, and transact with each other as we wish. Therefore there will always be value to such a system that allows us to transact directly peer-to-peer; it is unstoppable that people will seek this, regardless of anything, even legality.
In terms of automating away humans, aren't we building society to improve human life? You're wasting human life by requiring labor, what is more valuable than that? At least as a heuristic, looking at human history it seems obvious that automation is the best way forward when people don't want or need a personable, smiling face serving them. I need to go apply for a bank account right now and know it is going to take weeks and several meetings, I passionately hate this.
>if mining rewards grow then new miners will join and that means using more energy.
The block reward continually decreases with time, so it isn't clear that more adoption will increase energy usage. I'd say the opposite seems likely - I worry how bitcoin will incentivise miners to secure the chain in the long term.
>I think I've seen a comparison between Visa and BTC measuring how much energy each used for doing a single transaction (or for moving a set amount). Visa was 10 or 100 fold more efficient. Even back then.
One on-chain transaction can be a settlement of many off-chain lightning network transactions, so in future the efficiency should increase dramatically.
Like the other poster I don't know the quantitative answer when it comes to efficiency and expected energy usage, but I'm again pointing out that there are other factors.
"A system that allows us to transact directly, peer-to-peer" is "unstoppable that people will seek this, regardless of anything, even legality"
It's a serious indictment of this generation that they talk about useless, wasteful distributed hash functions in the way previous generations talked about things that matter(ed).
Also your essay has nothing to do with issue of the posts above.
I don't follow, but you communicated your animosity.
The topics of the thread have everything to do with each other as I read it: the value of the technology, human resources and efficiency (waste vs value).
I thought past generations valued freedom and privacy even more.
But the parent was talking about energy and resource efficiency. You're bringing in new arguments without reacting to the original train of thought. This can go on forever. (And usually does, as with any loaded topic.)
> The block reward continually decreases with time, so it isn't clear that more adoption will increase energy usage.
It's weird. You quoted the very end of the sentence that contains the explanation why I say that the rewards grow. The part that you didn't quote literally is a response to what you have just said: "And if adoption grows, BTC price grows and if BTC price grows (or, in other words everything devalues relative to BTC) then mining rewards grow (measured in other assets)"
In other words, while the block reward (denominated in BTC) does decrease, its value keeps increasing while adoption keeps growing. (Value here means either other currencies, or, if you think they will cease to exist, then the goods you can buy for the BTCs you get as a block reward.)
It's pretty obvious, this is, actually, part of the reason why people buy BTC: because they think its price will increase due to increased adoption. And it has to, because BTC is deflationary (again, yet another property that the proponents see as a selling point). You have 21M coins and those should replace who knows how many trillions of USD. (It depends on what level of adoption we're talking about.) IIUC, 90% has already been mined, but the adoption is pretty minimal, so the value of the coins will increase substantially with adoption. Halving seems to occur every ~3 years. I've checked and the earliest I could easily find a price for, happened in 2013. Then one BTC was ~16USD, the block reward went down to 25BTC, so $400. Now it's 6.25BTC, with today's rate that's $181k(!) as of now. To get back to $400, you'd need 8-9 other halvings if the BTC value (price) didn't increase. But it has to, if adoption grows, because demand will grow and supply can only grow minimally.
> In terms of automating away humans, aren't we building society to improve human life
Again, the comment I've responded to talked about the resource use. Also, you'd need a pretty strong proof that VISA (and/or the banking system) cannot be automated, made more efficient without BTC and/or crypto in general.
> so in future the efficiency should increase dramatically.
Well, maybe you should start making claims (or starting arguments) about the efficiency when you have the data. At least as an estimate, for which you'd need to know how the system will work.
> There is a social and political impact. Intermediaries like banks infringe on our basic freedoms to hold our own money,
Nope. They provide a service. You can hold your own money, of course. Competition, thanks to automation(!) should also continue driving down the price of digital banking services.
> to have privacy,
It's the state, not the banks that want to have the right to look into your transactions in well defined cases. And it is the very interest of the society. Complete, unbreakable anonymity sounds good as long as you only think about yourself. It stops being a good idea when you realize that there are criminals, tax avoiders, etc. (Unless, you are one of them, of course.)
> and transact with each other as we wish. Therefore there will always be value to such a system that allows us to transact directly peer-to-peer;
Maybe. I'm not so sure about this. There will definitely always be some demand for this. But let's face it: debit cards and digital bank accounts are a pretty reasonable user experience. It's not that expensive either. (Esp. if you go with these up and coming service providers, like Revolut, Wise, N26 - whichever makes sense for you.)
> it is unstoppable that people will seek this, regardless of anything, even legality.
Sure, there are use cases where legality doesn't matter. :) For most p...
That pollution is what protects the integrity. It's not waste. It's like a standing army patrolling a bank. In fact those miners are the number one private security of any currency or bank in the world, by orders of magnitude.
And second, every dollar blockchain companies make is a dividend of that army patrolling the bank.
Not a whole lot of counterfeit bitcoins going around, unlike some currencies I could mention. Treasuries also spend a lot of money protecting their currency, the Secret Service for instance, which works for the Treasury of USG, is mandated to stop counterfeiting. Who gets better results for the money, bitcoin or the Treasury?
“It delegitimizes the argument that Bitcoin is like gold,” said Vetle Lunde, an analyst for Arcane. “Evidence points in favor of Bitcoin just being a risk asset.”
People said that Bitcoin is like gold, an actual physical asset?
Right but it’s a social construct that’s endured across millennia and multiple different unrelated cultures.
When the Spanish discovered the “new world” they didn’t have to convince the locals that gold was valuable they’d been hoarding it too. For centuries, without any communication or contact at all.
It’s been held as a high value asset in basically every iteration of humanity that’s existed, including today’s. That’s about as close a definition of intrinsic as you’re going to get in this world.
Have you ever held 24k gold? It's actually beautiful, and I think that's why it's consistently been valued throughout history. Couple that with scarcity and I think it will always be valuable.
This is very much a tangent, but my favorite fun fact is that if you got all the gold humans have ever mined and put it in one place, its smaller then you'd think. It would be a cube about 70 feet on each side. Most metals, including gold, are infinitely recyclable. There's a good chance any gold jewelry you have has quite a past, having been melted down and reforged quite a few times.
But it’s an absolute, unmitigated scam and will collapse with the slightest pressure. As BTC declines, Tether’s backing declines as well, even as they print more Tether to pump up the price of BTC.
What failed over the last few days (and caused the big dump on the rest of the market beyond just the correlation to stocks) is a stablecoin called UST.
If you want a heavy dose of whataboutism though... look at EURO/USD.
UST's (Terra) peg is the one that is totally broken. It's an algorithmic peg, with its reserves in Bitcoin. USDT's (Tether) peg is fine right now (how much do you believe in commercial paper of unknown origin). And USDC's peg is also fine right now, and they claim to be backed by treasurys and actual cash.
What happens if the price drops below what is profitable to mine? Do they scale back or stay the course because if other miners back out they’re more likely to be rewarded a block? I guess there’s a 51% attack vector there too if the price drops too much and enough miners stop mining?
In theory, the mining rate scales back accordingly. In practice, the marginal cost of continuing to mine is probably very low: miners have made the upfront investment in the hardware, and many of them are located in areas where they're receiving artificially cheap electricity (or have reopened coal plants solely to mine[1]). In other words: large mining groups probably aren't feeling anywhere near enough pain yet.
Economically, a 51% attack is unlikely: it would fundamentally compromise trust in the network, which would probably lead to selloffs and a crash.
The difficulty will adapt to the slower block minting times, and those who stick around, will become profitable again. This is all written in the protocol.
> Arcane Research assigned a numeric score between 1 and -1 to capture the pricing correlation between Bitcoin and the Nasdaq. A score of 1 indicated an exact correlation, meaning the prices moved in tandem, and a score of -1 represented an exact divergence.
> Since Jan. 1, the 30-day average of the Bitcoin-Nasdaq score has approached 1, reaching 0.82 this week, the closest it had ever been to an exact, one-to-one correlation. At the same time, Bitcoin’s price movement has diverged from fluctuations in the price of gold, the asset to which it has been most often compared.
Without context, this analysis is meaningless. What's the correlation to various tenors of US treasury over the same periods, for example? What about Nasdaq/Dow correlation? How bout the correlation with gold?
> “There was this undeniable retail belief that Bitcoin at the end of last year was an inflation hedge — it was a safe haven, it was going to replace the dollar,” said Ed Moya, a cryptocurrency analyst at the trading company OANDA. “And what happened was inflation started to become very ugly, and Bitcoin lost half of its value.”
Selective amnesia. Zoom out and you'll see a massive bull market leading up to the first signs of sustained CPI growth. Buy the rumor, sell the news could also explain it as could many other things.
I have a somewhat irrational skepticism towards cryptocurrencies, as growing up, my dad always warned me of the scams he grew up with, when people were (seemingly) convinced fiat currency was a conspiracy by “the bankers” to enslave the common folk, and then used that to hawk crap like investments in silver mines.
And Bitcoin sure seems like a new iteration of that scam and/or conspiracy theory. At least with precious metals, you’d end up with something shiny at the end of it, and not a string of numerals on your phone.
Your dad, like most people, probably doesn't understand money. And the idea that fiat is bad for average people isn't just a notion.
Fiat with inflation is designed to reduce the burden of debt (among other things). If I borrow lots of money for a long time, I want the money to be worth less as time goes on. Then, when I pay my debt, the cost to me is lower every month, even though the dollar amount is the same.
If you have capital and leverage debt, this system is fantastic.
If you are poor and cannot borrow, i.e. leverage debt, then your money supply is constantly reduced.
Most people are poor, sad fact. Most people are not benefitting from this system.
Bitcoin is designed to be free of control. Institutions have lots of control currently because they have more capital to invest and sophisticated trading techniques. They have purchased their way into a powerful position within the environment. This is irrelevant.
Those people that have experienced hyper inflation already understand the implied value of Bitcoin. In time, everyone else will as well
Well, I hate to break it to you buddy, but gold is a horrible asset. Gold is cheaper nowt than 10 years ago. Yes the trash, USD has beaten it. Yes, I know, I have $9,000,000 of wrist watches made of it. But they appreciate because of their non commodity value. Now compare to tech stocks bought 10 years ago on average.
P.S. I called the Bitcoin top roughly on the day, in 2017 and in this cycle. Happy to provide the proof if you doubt it.
This isn't surprising or complicated. In a liquidity crunch you sell whatever you've got. These assets are going to correlate because they are all interchangable: things you can get rid of to get cash.
A lot of people here seem to take the "Bitcoin has no intrinsic value and therefore is worthless" line.
I don't hold any bitcoin and I don't feel strongly either way. But this piece by Lyn Alden provides some good insights into situations where Bitcoin might be valuable and why it may well have a strong future. Particularly compared to other, less widely-held cryptocurrencies:
Because it's not itself a thing of value. Non tech stocks which are essentially buying a portion of a
business that is profitable, well run, and has physical assets that have value. Same thing for commodities, etc. Tech stocks and crypto are both in the dsme bucket of investing in ownership of a portion of something that may someday be valuable or profitable, but is not currently.
The word you are looking for is 'bubble' maybe 'scam' - ok, maybe stock is appropriate... A 'stock' that's weeks away from being forbidden to be bought/traded in Us dollar or even banned like in china
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[ 2.1 ms ] story [ 347 ms ] threadEnergy =/= pollute
Focus on the bad actors that are polluting, occasionally you’ll find a miner
The question is what’s the minimum to do something. Bitcoin uses more energy than the alternatives.
A wood burning stove is wasteful, a heat pump, not so much. Why? Because what’s important is the difference in energy between the action taken and the most efficient action to complete a task.
Typically this desire for any other use of energy to occur relies on not understanding why that wasnt occurring beforehand
Clean energy is obviously better, but suffers from a fundamental problem: energy is fungible.
If mining takes up 10 MWh of juice, anyone else who would have used that energy can’t. So they have to use other energy. Often fossil fuel based energy has to make up the difference. For all intents and purposes the mining used that fossil fuel energy.
If mining only used excess electricity produced by clean power plants, there would be no problem. But it’s not incentivized to use extra energy, it’s incentivized to use cheap energy. If energy can be generated by fossil fuels cheaper than what you can earn from mining, miners will use that energy. Producing pollution that wouldn’t have otherwise existed.
Even if mining only used spare energy generated from clean sources, using that energy means it can’t be stored to be used later, like at night. Possibly necessitating polluting generation later. (I know storage isn’t common today.)
If you can explain how mining either does or feasibly could given real incentives use only spare non-polluting energy I would love to know.
There are likely several gigawatts of this kind of energy in north america and the amount of energy used this way and for mining in total will continue to increase without causing more pollution
This is due completely to market forces as well, which is worth saying because more mining will migrate to this without it being some altruistic response to environmental outcry
Bitcoin actually does a lot of good things here because it is location insensitive. For stranded energy, say methane flare gas, there is not an economical way to use the energy of this gas because transport is too expensive and demand is too far away. In this way, the bitcoin mining is consuming energy that wouldn't actually otherwise be marketable. It is also greatly reducing greenhouse emissions without demand for the energy, the methane would be burned, which has much worse emissions than when consumed in a generator.
Energy==pollute, actually. Energy is fungible and most of it comes from fossil fuels.
1. It's not the most efficient way and there's an alternative (e.g. Proof of Stake)
or
2. It may or may not be the most efficient way, but Bitcoin doesn't provide the value to justify the carbon emissions ('just tax carbon commensurate to its negative externalities and let people decide for themselves', he says helplessly)
As its not taking away from another use of energy and it’s reducing pollution, and is more likely to be the majority kind of bitcoin mining
Controversial Take:
There is effectively no ceiling on the value potential of Bitcoin.
If you live in a hyperinflationary environment, of which there are tons of examples in the last 100 years, the value is known. To people living with the $dollar and expecting endless monetary superiority, it is hard to recognize.
It's important to note, there is incentive for miners to use renewable energy. Vast amounts of capital have propped up renewables that languish for lack of a proper demand. Wind isn't on demand, nor is solar. But there's never any discussion of the waste and pollution that subsidized unproductive green energy solutions produce. Mining can utilize 100% of that supply. It acts as a reinforcing mechanism for investment in clean energy. How is this lost on people?
This is true of lots of industries, but even our most wasteful (raw aluminum processing?) or grossly extractive (gold mining?) industries produce actual materials of value.
That being said, I wouldn't rest on your "Bitcoin is free of slave labor" laurels so quickly[1].
[1]: https://qz.com/1978807/bitcoin-has-a-xinjiang-problem/
I agree with everything in your comment, I just think it's worse than an energy intensive, non contributing tech stock, it also doesn't do any of the things that people talk up as reasons to buy it.
I see no floor for crypto.
That doesn't mean there is a floor. If there is no demand for any of those assets they would be worth nothing.
USD doesn't have a floor either. One day everyone could just decide it's worthless scraps of cloth.
I'm not ignoring hyperinflation, but clearly it has nothing to do with Zimbabwe or Venezuela. The only comparison could be the Weimar republic, as this disaster was caused too by production deficits (France invading the Ruhr valley+ loosing colonial income), but obviously similarities stop there.
Drugs, remittance, ransom, exiting a crashing fiat, and a 21st century gambling experience.
Drugs, too, I defend the actions of the victims of the opioid epidemic in seeking drugs, they were actively tortured for most of their waking hours by a multi-level-marketing pharmaceutical scam. Those drugs weren't recreational, they were an anaesthetic in response to malpractice. Like the Sacklers are literally hard drug dealers, they literally have a monopoly on legal heroin and cocaine. Or should I say OxyContin and Adhansia. They did that through legal bribes as a cover for additional fully illegal bribes, inviting doctors to hedonistic islands to get compromat, treating the FDA like their personal lapdog, disgusting acts of philanthropy with their ill-gotten gains, medical media, and the ordinary media.
So like if they are cornering the market and intentionally cheating the patients out of antidote while increasing the doses of poison, you know what, don't tell me black is white. The legal market is shit and the illegal market is superior. And in fact the only limit to their cheating their patients out of medicine is presented by the black market, that's the resistance and why the problem wasn't even worse.
I would say fentanyl sounds disgusting, but OxyContin is even worse, because at least fentanyl you're not being tortured for ten hours a day. The dealer isn't gaslighting you about dosage. There are opioids that strong and there are like jeweler's scales you can use to mete them out.
So in particular I never had an interest in hard street drugs, just sounded highly unattractive. Like falling into a black hole. To feel happy? Come on.
The USA army could be dissolved and the economy could switch to use something else. Of course these events have a low probability of happening but if someone wants to say something else doesn't have a floor because demand could dry up you can't say something else does have a floor even though demand could dry up just the same.
It's hard to imagine, but basically a state does need some level of force to be able to protect property rights. Without that you can't have much of an economy period, nevermind a digital economy.
Which is ironic because every time it fails to do that people come up with a new raison d’être.
Cash replacement, ownership ledger, replacement for the existence of fiat, probably a ton more.
Pseudo-gold/store of value is just one of the more recent ones.
The headline doesn't quite convey this meaning.
But in my mind it’s still an unfair comparison because tech stocks generally have some kind of fundamental tangible value. It may be worth 1/500th what the market cap is, but it’s there.
I don’t see that with Bitcoin. Just insane wastes of resources and pollution creation.
Anyway, I say all this because I really find it clever, and I really wanted it to be able to do something useful, but the reality is, it doesn't. It's never going to be useful, it's been adopted by scammers and mountebanks, it has no utility and will cause so much harms in the scams that it supports.
So while it seems like a cool innovation, and from a purely technological standpoint it is, in reality it's poison. In that regard, it has (sorry for the tired analogy) a lot in common with communism. Cool idea, doesn't work at all, destroys lives. We need to let it go.
Interesting, could you elaborate on the Forth bit? Where does this fit in? This is the first I've heard of it but admittedly I don't know that much about Bitcoin.
https://en.bitcoin.it/wiki/Script
But more compelling to me is that it allows you to do what bittorrent did but in general - with bittorrent anyone can host a file and a static link can help you find those people and download the file (with no need to trust that the person serving the file hasn’t replaced it with some other file). This is possible because of cryptographic primitives like hashes that let you use a few bytes to uniquely identify the contents of any file, distributed hash tables that let you come to agreement on which IP addresses are serving which files, etc. (If you don’t think bittorrent is useful, that’s fine, but me and many others think it is.)
There’s still a lot of work to be done, but we’re approaching a point where you can “bittorrent-ize” a much broader class of services. Bittorrent works only for serving files whose hashes you already know, but doing the same for a service like HN is much more difficult. You need to allow posts from many different people and know when they were submitted, and maintain vote counts, but a distributed ledger is perfect for this. It’s not practical to do this on any decentralized cryptocurrency right now, but we’re slowly getting there.
Like I said, scaling this is a very difficult problem, for example you need to have data sharding so that not every node has to store the full ledger, but over the last few years cryptocurrency people have come up with very good data sharding systems like danksharding (which will hopefully be implemented on Ethereum in the next decade).
You also don’t want every node to have to redo all the computation, but ZK-proofs (which were basically only used in academia before cryptocurrencies came along and poured billions of dollars of funding into making them practical) make that unnecessary at the cost of some significant overhead when performing the computation. Despite that cost, we already have really good layers on top of Ethereum called ZK-rollups that lower the transaction cost to almost zero and introduce no new trust assumptions.
You also want state expiry or state rent so the network state doesn’t grow monotonically, but that’s also being developed and in the past few years we’ve also developed some really good state expiry schemes.
You also want fast finality so that you don’t have to wait 10 minutes for the contents of the ledger to stabilize, but we finally have scalable permissionless byzantine fault tolerant consensus schemes that have very fast finality (<30s), one of which is being implemented on ethereum (called casper).
There’s other cool stuff too, but I think this direction is one of the most exciting ones.
Disclosure: I’m a protocol developer for a major cryptocurrency (although not ethereum or bitcoin)
If Bitcoin's price can get this high without the 'intrinsic value' or producing something, then this effect probably also exists for other stocks. And this made me wonder: how big of a factor is this in other tech companies.
The more I think about it, the more I feel that it must be the majority for many of them. Many companies operate at a loss and are just pumped up to push up metrics, just so someone else will pay more for it in the next round.
first dot com crash tech learned you actually need a product when the markets go south - now (second) tech is learning you need an actual good product when the markets go south --
But they still use concrete financials (e.g. growth of revenue is just the derivative of revenue) to make those decisions, and are assuming that the future buyers will be looking at similar numbers that are based in the same real economic business process.
The fundamental case for bitcoin-as-an-investment[0] is much less well-defined, and differs far more depending on who you ask.
[0] bitcoin-as-currency is a different frequently-talked-about potential future state, but not as relevant to the "acting like a tech stock" discussion
This makes sense to me, but I wonder how many VCs will pump money into a business, having a pretty good hunch that the business model will never make that much sense at a meaningful scale, but the numbers will probably look good enough for a return of investment until the pyramid collapses after the series C.
These companies are restructured for increase of perceived value, not multi-decade sustainability. Bitcoin to me is just the purest form of this culture.
If there's good news, though, it's that this appears to be slowing down. Lot of folks getting disillusioned with WeWork, Uber, etc now that those exits happened and went nowhere. I'm assuming investors are realizing they won't be able to play that trick too many more times.
But really, I'd hardly call QE-driven financials "concrete". We Work, anyone?
You saying "I don't trust an adjusted ebidta metric" is perfectly valid, of course, but that number was there and the business processes behind it were there. A bit different from "i'm a bunch of bits stored on a computer."
Suppose you open a spreadsheet right now, discount 100 years of cash flows, and measure each cash flow as a % contribution to the sum (aka npv). You will find that at medium to higher rates years 0-20 make up the greatest percentage of the npv by far. But as you lower them, that relationship flips and cash flows for years 20 to 100 become the lion's share of the valuation.
WeWork isn't the only 'ridiculous promise-the-future' company we saw over QE, just the first I could name off the top of my head. But through the lens I described above, all those weird 'how could investors be so stupid' situations make more sense because the valuation math was slanted to favor such situations.
In the stock market, because if everyone in the world wanted to sell all their stock in some companies, some folks would snap up the opportunity to take control of at least most of those companies. Yes, this is several levels obfuscated by the time you get to retail investors (and if you look just at news media sources targeted at retail investors, it's almost all short-term reactionary bullshit), but ultimately that's the fallback for the system that is gonna keep prices non-zero. Very recent tangible example: Elon Musk willing to pay real money to take control of Twitter.
In the crypto market... what's the ultimate backing? Hope of various sorts of a future new world financial infrastructure, reserve currency, store of value? I've heard a thousand stories, none of them are true yet though.
Sure, if you believe in one of those futures, you should invest in the appropriate crypto tokens. You'll be better off if fewer of the rest of us believe in it now when you're about to buy, after all. ;) But if your analysis of where to put your money - trying to figure out what's likely to hold or gain value vs lose it - comes down to "eh it's all the same yolo" then just recognize that it's a gamble to invest in crypto - saying "I believe that it's also a gamble to invest in stocks" doesn't really make it a better gamble.
BTC at least has very few humans, and humans consume resources and create waste.
So, what does a more comprehensive measure than core time look like wrt global warming and payments?
I’m not sure the answer, but I’m also sure it is not simple.
Regarding your question: whatever they do, those humans will consume resources and create waste. We can't delete them if we do away with Visa :). Sure, they, in theory, would be able to work on something else, freeing up their resources, but that wouldn't decrease the resource use of humanity.
Also, people keep comparing BTC's current resource use to the bank system (I think that includes the CC companies as well). However, very few transactions are done with BTC compared to the world financial system (or even just Visa). And if adoption grows, BTC price grows and if BTC price grows (or, in other words everything devalues relative to BTC) then mining rewards grow (measured in other assets) and if mining rewards grow then new miners will join and that means using more energy.
I think I've seen a comparison between Visa and BTC measuring how much energy each used for doing a single transaction (or for moving a set amount). Visa was 10 or 100 fold more efficient. Even back then.
However, crypto does not behave to act effectively as a currency; it would be an awful idea to replace the global financial infrastructure with crypto thus the energy costs are here to stay.
So I think the energy argument fails on it's own. Also, it should come at least with strong supporting arguments claiming the actual benefits. But I do agree that cryptos are worse than the currencies we have and existing block chains (I'm aware of) don't make sense even as a distributed transaction tracking system for fiat currencies.
In terms of automating away humans, aren't we building society to improve human life? You're wasting human life by requiring labor, what is more valuable than that? At least as a heuristic, looking at human history it seems obvious that automation is the best way forward when people don't want or need a personable, smiling face serving them. I need to go apply for a bank account right now and know it is going to take weeks and several meetings, I passionately hate this.
>if mining rewards grow then new miners will join and that means using more energy.
The block reward continually decreases with time, so it isn't clear that more adoption will increase energy usage. I'd say the opposite seems likely - I worry how bitcoin will incentivise miners to secure the chain in the long term.
>I think I've seen a comparison between Visa and BTC measuring how much energy each used for doing a single transaction (or for moving a set amount). Visa was 10 or 100 fold more efficient. Even back then.
One on-chain transaction can be a settlement of many off-chain lightning network transactions, so in future the efficiency should increase dramatically.
Like the other poster I don't know the quantitative answer when it comes to efficiency and expected energy usage, but I'm again pointing out that there are other factors.
It's a serious indictment of this generation that they talk about useless, wasteful distributed hash functions in the way previous generations talked about things that matter(ed).
Also your essay has nothing to do with issue of the posts above.
The topics of the thread have everything to do with each other as I read it: the value of the technology, human resources and efficiency (waste vs value).
I thought past generations valued freedom and privacy even more.
> The block reward continually decreases with time, so it isn't clear that more adoption will increase energy usage.
It's weird. You quoted the very end of the sentence that contains the explanation why I say that the rewards grow. The part that you didn't quote literally is a response to what you have just said: "And if adoption grows, BTC price grows and if BTC price grows (or, in other words everything devalues relative to BTC) then mining rewards grow (measured in other assets)"
In other words, while the block reward (denominated in BTC) does decrease, its value keeps increasing while adoption keeps growing. (Value here means either other currencies, or, if you think they will cease to exist, then the goods you can buy for the BTCs you get as a block reward.)
It's pretty obvious, this is, actually, part of the reason why people buy BTC: because they think its price will increase due to increased adoption. And it has to, because BTC is deflationary (again, yet another property that the proponents see as a selling point). You have 21M coins and those should replace who knows how many trillions of USD. (It depends on what level of adoption we're talking about.) IIUC, 90% has already been mined, but the adoption is pretty minimal, so the value of the coins will increase substantially with adoption. Halving seems to occur every ~3 years. I've checked and the earliest I could easily find a price for, happened in 2013. Then one BTC was ~16USD, the block reward went down to 25BTC, so $400. Now it's 6.25BTC, with today's rate that's $181k(!) as of now. To get back to $400, you'd need 8-9 other halvings if the BTC value (price) didn't increase. But it has to, if adoption grows, because demand will grow and supply can only grow minimally.
> In terms of automating away humans, aren't we building society to improve human life
Again, the comment I've responded to talked about the resource use. Also, you'd need a pretty strong proof that VISA (and/or the banking system) cannot be automated, made more efficient without BTC and/or crypto in general.
> so in future the efficiency should increase dramatically.
Well, maybe you should start making claims (or starting arguments) about the efficiency when you have the data. At least as an estimate, for which you'd need to know how the system will work.
> There is a social and political impact. Intermediaries like banks infringe on our basic freedoms to hold our own money,
Nope. They provide a service. You can hold your own money, of course. Competition, thanks to automation(!) should also continue driving down the price of digital banking services.
> to have privacy,
It's the state, not the banks that want to have the right to look into your transactions in well defined cases. And it is the very interest of the society. Complete, unbreakable anonymity sounds good as long as you only think about yourself. It stops being a good idea when you realize that there are criminals, tax avoiders, etc. (Unless, you are one of them, of course.)
> and transact with each other as we wish. Therefore there will always be value to such a system that allows us to transact directly peer-to-peer;
Maybe. I'm not so sure about this. There will definitely always be some demand for this. But let's face it: debit cards and digital bank accounts are a pretty reasonable user experience. It's not that expensive either. (Esp. if you go with these up and coming service providers, like Revolut, Wise, N26 - whichever makes sense for you.)
> it is unstoppable that people will seek this, regardless of anything, even legality.
Sure, there are use cases where legality doesn't matter. :) For most p...
And second, every dollar blockchain companies make is a dividend of that army patrolling the bank.
Not a whole lot of counterfeit bitcoins going around, unlike some currencies I could mention. Treasuries also spend a lot of money protecting their currency, the Secret Service for instance, which works for the Treasury of USG, is mandated to stop counterfeiting. Who gets better results for the money, bitcoin or the Treasury?
People said that Bitcoin is like gold, an actual physical asset?
If you cut the supply of gold tonight, tomorrow morning there will be lost utility in the society irreparably.
If bitcoin disappears tonight, tomorrow will be Thursday.
Look up gold’s use by mass. It is dominated by gold’s value being a social construct.
Because your wife says so. Yes jewelry in genaral is a social construct, but it is not replaceable. At least it was not for the past 5000 years.
When the Spanish discovered the “new world” they didn’t have to convince the locals that gold was valuable they’d been hoarding it too. For centuries, without any communication or contact at all.
It’s been held as a high value asset in basically every iteration of humanity that’s existed, including today’s. That’s about as close a definition of intrinsic as you’re going to get in this world.
https://youtu.be/94S3S3NTTdA?t=550
This is very much a tangent, but my favorite fun fact is that if you got all the gold humans have ever mined and put it in one place, its smaller then you'd think. It would be a cube about 70 feet on each side. Most metals, including gold, are infinitely recyclable. There's a good chance any gold jewelry you have has quite a past, having been melted down and reforged quite a few times.
gold is actually not doing very well either in this inflationary environment due to rising interest rates. Gold bugs are pissed.
Seems like it's doing it's job quite nicely.
It's not but there's definitely a difference between:
BTC: 0.5 trillion market cap
USD: ~1,000.0 trillion market cap
Also, BTC could just dissapear overnight, really, while USD is the de facto currency of the world so ...
How's that USDT dollar peg going at the moment btw...
But it’s an absolute, unmitigated scam and will collapse with the slightest pressure. As BTC declines, Tether’s backing declines as well, even as they print more Tether to pump up the price of BTC.
What failed over the last few days (and caused the big dump on the rest of the market beyond just the correlation to stocks) is a stablecoin called UST.
If you want a heavy dose of whataboutism though... look at EURO/USD.
I hope if you've got some you've read their terms and conditions.
Do you remember the 42Mil fine they paid a couple of years ago for not actually holding reserves? I'm sure they're honest now though
Edit: 98.7
https://www.afar.com/magazine/the-dollar-and-euro-are-almost...
Economically, a 51% attack is unlikely: it would fundamentally compromise trust in the network, which would probably lead to selloffs and a crash.
[1]: https://www.theguardian.com/technology/2022/feb/18/bitcoin-m...
> Since Jan. 1, the 30-day average of the Bitcoin-Nasdaq score has approached 1, reaching 0.82 this week, the closest it had ever been to an exact, one-to-one correlation. At the same time, Bitcoin’s price movement has diverged from fluctuations in the price of gold, the asset to which it has been most often compared.
Without context, this analysis is meaningless. What's the correlation to various tenors of US treasury over the same periods, for example? What about Nasdaq/Dow correlation? How bout the correlation with gold?
> “There was this undeniable retail belief that Bitcoin at the end of last year was an inflation hedge — it was a safe haven, it was going to replace the dollar,” said Ed Moya, a cryptocurrency analyst at the trading company OANDA. “And what happened was inflation started to become very ugly, and Bitcoin lost half of its value.”
Selective amnesia. Zoom out and you'll see a massive bull market leading up to the first signs of sustained CPI growth. Buy the rumor, sell the news could also explain it as could many other things.
More long-term, https://www.sciencedirect.com/science/article/abs/pii/S22146... - "near zero" between BTC and Gold.
And Bitcoin sure seems like a new iteration of that scam and/or conspiracy theory. At least with precious metals, you’d end up with something shiny at the end of it, and not a string of numerals on your phone.
Fiat with inflation is designed to reduce the burden of debt (among other things). If I borrow lots of money for a long time, I want the money to be worth less as time goes on. Then, when I pay my debt, the cost to me is lower every month, even though the dollar amount is the same.
If you have capital and leverage debt, this system is fantastic.
If you are poor and cannot borrow, i.e. leverage debt, then your money supply is constantly reduced.
Most people are poor, sad fact. Most people are not benefitting from this system.
Bitcoin is designed to be free of control. Institutions have lots of control currently because they have more capital to invest and sophisticated trading techniques. They have purchased their way into a powerful position within the environment. This is irrelevant.
Those people that have experienced hyper inflation already understand the implied value of Bitcoin. In time, everyone else will as well
so sure they still have a shiny metal that they hope retains its value, but they dont recoup anything
I don't hold any bitcoin and I don't feel strongly either way. But this piece by Lyn Alden provides some good insights into situations where Bitcoin might be valuable and why it may well have a strong future. Particularly compared to other, less widely-held cryptocurrencies:
https://www.lynalden.com/gold-and-bitcoin/