Then Bitcoin bubbled. People panicked and jumped on board without researching, Bitcoin went up a bazillion %. I wonder how the creator felt? "Oh wow... Lots of people want this!"
Then the bubble burst, price went down, people got mad, but, most importantly, Bitcoin inspired others. I wonder how the creator felt? "Oh huh... This is really changing the world..."
Now, the problems are rearing their heads. Energy consumption, 51% attacks, scalability issues, etc. I wonder how the creator feels? "Oh dear..."
[ this is, of course, assuming the creator is still alive ]
It just boggles my mind that this weird internet currency exposed something so powerful in society: The intense desire for personal wealth that one truly owns.
Not at all. It's the desire to get rich quick without lifting a finger. Also philosophically speaking, "wealth that one truly owns" as in "wealth that is not dependent on others" is not a thing. If your wealth is in Bitcoin, you are trusting in fellow Bitcoin users and your wealth is entirely dependent on their feelings about the cryptomarket. That is hardly a better safer store for your wealth.
I disagree with that. Bitcoin did not start off with get-rich-quick schemes. It started off with a core bunch of people who wanted independent options to wealth.
One of the major issues we're going through today [ in terms of tech-misinformation ] is how everyone assumes cryptocurrency & blockchain are just buzzwords that people only got interested in to make money & scam. Not true.
Bitcoin started off with a completely different ideology among the early adopters before it got to where it is today. Don't look at the current trend of youtube """educators""" [ read: hype-beast / scammers ] and think that's what drives the development.
> "wealth that is not dependent on others" is not a thing
That's actually a very good point! I wouldn't necessarily agree to your ending statement of whether it is / isn't a safer store for one's wealth, but I do agree that wealth needs dependencies. I guess I should have made my statement to be more along the lines of: "Independent wealth OPTIONS where users can control their dependencies."
Sure the Tesla makes mistakes and kills someone every now and then, but I’d take that over the brick.
The market is relatively 'dumb', but its decisions are based on human expectation and applied peacefully through voluntary transactions. The state is relatively 'dumb' too, but it's also evil most of the time, and its decisions use violence to be committed.
Also, when the market is wrong, some people may lose money (specially those that were the most wrong), but the system corrects itself. When the state is wrong, the error accumulates because the system can't self-correct.
>It’s like saying you trust a car with a brick on the accelerator over a self drive Tesla.
The market is much like a machine learning algorithm. I say the market is the Tesla AI and the state is a drunk driver.
Bitcoin is just another alternative. Yes you're not buying a loaf of bread at the corner store with it, but it's definitely useable (and is used) for other types of payments.
I'm not against BTC, and I'm not saying it's dead, I'm just pointing out the obvious crash that recently happened :^)
I'm not against BTC, I love blockchain & decentralization, I toy around with many cryptocurrencies myself. I'm not ragging on anything with my comment, just making an observation about events and attaching how I would feel if I were the creator / catalyst for said events :^)
In general I have come to treat anything that cites Alex de Vries with suspicion. Amongst other things, the repeated discussion of the number of transactions and the power expenditure. The power expenditure does not scale by number of transactions. Associating the two without mentioning one is not a factor of the other creates a misleading impression. Doing so repeatedly suggests bad faith.
Bitcoin does use a lot of power though. On the other hand, the reward halving does mitigate some of this. If you are confidant that Bitcoin won't increase on average 20% every year forever then you should be happy that the problem will fix itself.
The current problem comes from the value rise being greater than the reward halving. To sustain that it has to double in value every 4 years _forever_. The early growth has been higher than that, but to just sustain current power levels BTC would have to be worth millions in a few decades.
But in the future, the amount of energy consumed for a single transaction will tend towards exactly the fee paid for that transaction multiplied by the cheapest electricity price in the world.
So either the transaction fees will be outlandish, or for a transaction that costs $0.10 you will consume roughly 2kWh.
Trip to the shops, but fuel, some take away and a few things online when you get home and you’ve used 10-16 kWh of energy, multiple that by a population (even a small one), and even the massive investment into renewables that there is now will be quickly eclipsed.
Adding transactions that are so intensive to people’s everyday energy consumption would be a huge step backwards IMO.
Making a bitcoin transaction is like recasting gold bars - not something you want to do often with small amount of gold. This will be done only for large individual payments or for large settlement payments aggregating thousands or millions of normal payments. Everyday payments will be performed on second or higher layers (e.g. Lightning Network)
gold vs btc, at least BTC energy expenditure can be patched / limited to only renewables.
I had a conversation with a non-techie friend the other day about cryptocurrencies and she expressed scepticism about the technology because of its immateriality or intangibility. Something about cryptocurrencies being artificially constructs doesn't sit well with some non-techies. I mean, when you think about it it's just as arbitrary that precious metals and gems have a store of value/worth above and beyond their utility. I guess we're in a transitionary period.
fiat currencies that non-techies do use are also artificial constructs. There is however the gold bars in federal reserve/national bank myth so the fiats appear as non-artificial to many people. Possibly that makes the difference. Or, more likely, people use fiat currencies since forever and don't really think about that.
I believe more "the thing that exists for ages and I'm familiar with" vs "the new thing" thing.
Anyway I'm not trying to invalidate your point, my experience with talking to non-techies about cryptos is more or less the same as yours
That said, most people who buy gold as investments these days do so through ETFs or some other paper-based method so they never even see the gold themselves, let alone get a chance to "touch and feel" it.
This is not to defend Bitcoin, but it is mind boggling how few people ask themselves "where does money come from, exactly?".
- anyone can issue Bitcoin
- if anyone accepts Bitcoin they accept it regardless of origin
With fiat money, there are additional rules to limit money laundering and theft. (e.g. paper trail audit rules and special markings on banknotes - money matching these laws is not to be accepted)
Plus you cannot just issue say Zimbabwe dollars anywhere, that's considered a forgery. Likewise you can only issue Bitcoin if you do manage to notify the decentralised ledger that you have mined it. (Which is why verification is slow.)
"The electricity used for Bitcoin produces about 22 megatons of CO2 annually, a study in the scientific journal Joule estimated. That is as much as Kansas City in the US."
Bitcoin = Kansas City
And the discussions are also same old - People criticizing bitcoin, others defending and then a small majority who feel quite smug about buying at $10.
Can we really stop upvoting stories which add zero value to what we already know?
On the other hand, the climate crisis is more urgent than ever. Is a huge waste of precious resources by something as useless as today's bitcoin really tolerable by society?
My hope is that bitcoin is soon abandoned in favor of something more eco friendly, scalable, usable and with better privacy. With a low bitcoin value there will be fewer miners and less waste of resources.
Bitcoin, realistically, uses about as much energy as a popular video game. For reasons which should be obvious.
If the former, then the Bitcoin network should find a way to reward nodes for transactions in a more environmentally-friendly manner since mining should (in my understanding) disappear or become insignificant at some point.
They're not different things. Mined blocks is how you add transactions to the chain (because bitcoin is PoW-based). The miner is rewarded as part of that process by embedding a coinbase transaction in the block, which lets them create a set number of new coins out of nowhere (as well as collecting transaction fees from the transactions they include in the block)
The problem is any solution which doesn't need a boat load of money will be get concentrated quickly because everyone and their grandmother wants in.
Plus, there's no reason why Bitcoin should survive. Another cryptocurrency that's much more energy efficient would work just as well, so people could move their money if regulation was likely. It's one of the existisitential threats that Bitcoin faces in the long term.
I wonder if it is any different with any other thing you pay for. Or if any money you pay for anything ultimately results in energy being used up.
Would BTC mining consume more or less energy then today's mainstream solutions?
Interesting data point.
You know what they say about products that polarizes people..
A wonderful case would be where biomedical research somehow had an unlimited and ongoing need for solutions to arbitrary, random simulation tasks (where it was also relatively easy to confirm the correctness of an alleged solution). This doesn't really seem to be the case, but cryptocurrencies' impact and popularity would be improved quite a bit if it were!
Also important that this is the first iteration of a technology that will eventually be replaced with Proof of Stake systems which will be replaced by X.
Is there any national currency still on the gold standard?
But it's interesting - not really a gold standard, (they're pegged to USD) but it looks like Lebanon has between 1/3 and 1/2 GDP worth of gold backing it's currency.
Did anyone come up with an estimate?
bitcoin does some ~450k transactions/day 
Switzerland has some 8.5m people 
Let’s assume bitcoin is only used in Switzerland, meaning we get some 0.05 transaction per person per day, or in other words every citizen of Switzerland may execute one transaction every 20 days. I have no numbers for how many financial transaction swiss people perform per day, but lets use a conservative estimate of one per day (think of the daily coffee paid by cc), so that there are 8.5m transactions/day handled by the swiss banks.
Now, if the total energy budget of Switzerland would be going to running their banking system (which it probably does not do) it would still be 20 times as efficient as bitcoin.
And yes, this implicitly makes Bitcoin a bad idea, as well as blockchain in general.
For example, on Linux the true HEAD is where Linus says it is. Everyone else is wrong. That's a consensus of everyone working on Linux.
In more distributed projects, HEAD is where everyone agrees HEAD should be.
Human consensus is a valid form of blockchain consensus.
No, Linus is a form of an oracle here. Linus says the head is X therefore it is.
(oracles are fine! we could also just call them "authorities"! having an authority at the head of a project is fine! but it's not really blockchain.)
Not if you want a trustless system. Otherwise, why waste time/energy? A bank can currently perform the "human consensus" part already (ala credit cards and fiat money).
Price goes up > People turn on more miners > Difficulty goes up > Less efficient miners become unprofitable > People turn off more miners > Difficulty goes down.
It's a self-correcting dynamic purely due to economics, not linked to usage.
Do you not agree that, loosely, there is a correlation between transaction throughput/ popularity/ real world usage, and the amount of people being happy to invest time, effort, and money into mining?
Is this market failure? I don't know... Bitcoin still works despite it.
I recently had a discussion with a friend about the viability of a distributed/ blockchain alternative to YouTube. Extrapolating BTC inefficiency to a distributed CDN processing TBs and PBs of traffic...
There's about 6 orders of magnitude difference in transaction cost. Mastercard/Visa would use ~2W.h per transaction, Bitcoin about 1MW.h.
As more people adopt it, they will probably be less afraid of it / against it.
The net benefit of Bitcoin existing outweighs the energy consumption. If we really care about the planet and all of that, then let's start by cutting down our use of internal combustion engines first.
Says who? The laughable number of transactions and the huge energy required per transaction are saying quite the opposite.
So awesome, I have to make an account to see the dead comment. Way to go HN mods.
Sweden may hypothetically purchase miners 2x more efficient than the average miner and therefore need only half their countries power output.
In addition I would be surprised if Sweden can't source power from other countries ( prove me wrong I'm not sure on this one)
They absolutely can, though I think they've been mostly net exporters for the last ~10 years.
According to https://www.svk.se/siteassets/drift-av-stamnatet/bilder/map-..., Sweden has 7 HVDC (Denmark x2, Germany x1, Poland x1, Lithuania x1, Finland x2) plus 2x 400kV to Denmark, 2x to Finland and 4x to Norway (plus a 220kV).
Of course, until now that effect has been more than compensated by the increase in the Bitcoin price. But that certainly can't continue forever either, and so the electricity usage and carbon footprint of Bitcoin will inevitably fall in the future.
I'm not sure what you mean by this. If a certain percentage of energy is used by PoW, less is available for other purposes, and thus prices will rise for all energy users.
Fees are denominated in satoshis though, and even today the average USD amount of fees is around $8,000 per block (around 6% of the total reward). A 10x increase of the BTC price will make that amount around the same as the current total reward.
Of course today usage of the network is somewhat correlated with price, but it's not directly proportional and the correlation will weaken in the future.
"Bitcoin creates a global energy arbitrage market for the first time" -- There are existing energy arbitrage technologies, such as aluminum smelting. The requirement is low capital cost with high energy cost, so you can have plants that are idle most of the time, waiting for low marginal-cost energy. Bitcoin mining isn't actually very good for this: the capital costs of rapidly depreciating mining chips are quite high.
"Incentivizing cheap green energy" -- every consumer of energy does this. Consumers that run mainly during the day are much better at incentivizing wind and solar.
"Mining for ambient heating" -- also suffers from the problem that mining chips are too valuable to leave idle, so you can't place them in homes and only run them when it's cold.
In this case, the Moses Saunders dam  used to get a nice steady stream of draw (necessary to keep the equipment operational) from the Alcoa plant, but when it shut down that draw went away. Throwing a bitcoin mining operation into the old facility is a great way of keeping things running smoothly.
This makes sense only in two cases: you're using energy from power sources which can't regulate output, or you're adjusting usage immediately based on feedback from the source. Otherwise the generation side just raises, accounting for your usage. Does that actually happen anywhere?
> Energy can't be transported long distance
Of course it can be. I expect you're quite far from a power plant right now. On the extreme we've got high voltage lines going over 2000km.
I'm pretty sure miners don't pick and choose when they mine, to coincide when there's going to be 'wasted surplus energy' otherwise. They just add on to the demand on the grid, around the clock.
They almost sound like Buddhist monks re: meat eating, from the way you phrase things!