Scrutable

Pros and cons, thread starts off with the cons, pros are in the comments.

It's hugely important and I don't understand both sides of the debate properly. Help please.

https://twitter.com/jackdanger/status/1 ... 9925787649

Bitcoin is a decentralized Ponzi scheme. It cannot function as a currency as its model of security derived from massive inefficiency can't support anything like a credible transaction rate. It doesn't function as a secure payment system for darknet transactions and ransomware as it is not properly anonymous. It's not actually scarce as, despite its much touted 'theoretical maximum', a powerful enough consortium of miners could overrule it if they wanted, leaving aside the fact that scarcity is only relevant if people actually want it (and who wants Bitcoin really, except to in theory sell it later to someone else?). The price of Bitcoin is easily manipulated by 'whales' as overall liquidity is so low. A company called Tether, who happen to be owned by one of the main exchanges, Bitfinex, prints what are taken to be tokens worth over a billion USD per week, without producing any evidence they are backed by anything at all, these prints mysteriously coinciding with large spikes in the price, despite no evidence of wider demand.

Essentially, Bitcoin is bad, so any energy cost in mining it is bad. The fact that this energy cost is massive is almost beside the point.

Edit: Amy Castor's blog is good for more information.

Jack Danger's twitter wrote:Because not everyone knows: If Bitcoin’s price ever reaches $1m it will output more carbon than the entire US and consume 2x the entire electrical production of the US.

Citation needed. Now while I believe the sentiment is right I don't believe Bitcoin's price is so directly tied to its carbon footprint.

My understanding is the carbon footprint of bitcoin increases exponentially as they are "mined" but the actual process of mining has been uncoupled* from the price, as the price is determined by supply and demand.

As such BTC's will eventually emit "more carbon than the entire US and consume 2x the entire electrical production of the US" whether its price is $1m or 1p. It is just that under the "1p" scenario there will be little incentive to actively mine and so it would take millennia for the remaining mining computers to reach that point.

Similarly, in theory the 3rd bitcoin out the gates could have been worth $1m even if the energy needed to unlock it wouldn't have toasted a panini.



*mostly, there will be more incentive to "mine" BTC's when their price is high and less when the price is low and this would govern whether a "mining company" would be willing to commit additional resources into "mining" but IIRC most "miners" aren't actually paying for the energy used to mine rather they are hijacking compromised computers to do the mining for them and passing the cost onto the poor bastard who's laptop is also slowed to the point of inoperability.

Little waster wrote: ↑

Mon Feb 22, 2021 10:37 am

Jack Danger's twitter wrote:Because not everyone knows: If Bitcoin’s price ever reaches $1m it will output more carbon than the entire US
...*mostly, there will be more incentive to "mine" BTC's when their price is high and less when the price is low and this would govern whether a "mining company" would be willing to commit additional resources into "mining" but IIRC most "miners" aren't actually paying for the energy used to mine rather they are hijacking compromised computers to do the mining for them and passing the cost onto the poor bastard who's laptop is also slowed to the point of inoperability.

Fyi, most of the mining is done by large industrial scale operations based in China and Russia using specialized equipment.

Edit: Source.

A decent take down of the whole blockchain b.llsh.t is Attack of the Fifty Foot Blockchain.

Little waster wrote: ↑

Mon Feb 22, 2021 10:37 am

Jack Danger's twitter wrote:Because not everyone knows: If Bitcoin’s price ever reaches $1m it will output more carbon than the entire US and consume 2x the entire electrical production of the US.

Citation needed. Now while I believe the sentiment is right I don't believe Bitcoin's price is so directly tied to its carbon footprint.

Currently, the reward for "mining" is a new bitcoin, but it's a lottery as to whether you actually get to mine the coin. So whether you make money on mining is a function of the chance of mining a coin, the price of bitcoin, and your cost to mine.

If the price of bitcoin goes up, it attracts more miners, but your chance go down, however your costs are fixed. The net effect is more miners, which means more electricity used.

Sorry, don't have time to post links but it appears that Bitcoin is useful to many people who wish to evade government controls on cross-border transfers of capital (either because they money was unlawfully acquired, or because its not lawful to move it out of the country). The currency isn't as anonymous as is often touted, but is probably anonymous enough for, say, Russians of Chinese who want to move their wealth abroad.

The implication for this is that there is an underlying rational demand for bitcoin separate from it being a bubble. This would explain why Bitcoin hasn't behaved like a bubble (which should be a rapid journey of prices from low, to high and back to low). The social good or harm comes down to how people think of the regimes whose laws are being thwarted.

Every bitcoin transaction is recorded publicly, so if someone finds out your wallet they can see everything you've done. This is by design.

It also takes hours for a transaction to go through, which limits use cases to huge wealth transfers and/or dodgy stuff.

The carbon emissions are really staggering for something fundamentally unethical.

Other crypto currencies have dealt with the speed and anonymity issues, but I think they're all pretty bad polluters. Might as well invest money in beef production. Lots of dark web drug dealers accept cows as payment.

Woodchopper wrote: ↑

Mon Feb 22, 2021 12:02 pm

Sorry, don't have time to post links but it appears that Bitcoin is useful to many people who wish to evade government controls on cross-border transfers of capital (either because they money was unlawfully acquired, or because its not lawful to move it out of the country). The currency isn't as anonymous as is often touted, but is probably anonymous enough for, say, Russians of Chinese who want to move their wealth abroad.

The implication for this is that there is an underlying rational demand for bitcoin separate from it being a bubble. This would explain why Bitcoin hasn't behaved like a bubble (which should be a rapid journey of prices from low, to high and back to low). The social good or harm comes down to how people think of the regimes whose laws are being thwarted.

This is true, and provides bitcoin with some value as long as people prefer btc for this rather than arguably better suited tokens, but it's also neither necessary nor sufficient to explain the price behaviour.

Bird on a Fire wrote: ↑

Tue Feb 23, 2021 1:30 am

... Lots of dark web drug dealers accept cows as payment.

Guardian reports cows not always accepted

secret squirrel wrote: ↑

Tue Feb 23, 2021 7:11 am

Woodchopper wrote: ↑

Mon Feb 22, 2021 12:02 pm

Sorry, don't have time to post links but it appears that Bitcoin is useful to many people who wish to evade government controls on cross-border transfers of capital (either because they money was unlawfully acquired, or because its not lawful to move it out of the country). The currency isn't as anonymous as is often touted, but is probably anonymous enough for, say, Russians of Chinese who want to move their wealth abroad.

The implication for this is that there is an underlying rational demand for bitcoin separate from it being a bubble. This would explain why Bitcoin hasn't behaved like a bubble (which should be a rapid journey of prices from low, to high and back to low). The social good or harm comes down to how people think of the regimes whose laws are being thwarted.

This is true, and provides bitcoin with some value as long as people prefer btc for this rather than arguably better suited tokens, but it's also neither necessary nor sufficient to explain the price behaviour.

Is it just me, or is Bitcoin just a coders attempt to revive the pointless and economically dangerous idea of the gold standard?

Something that economically illiterate libertarians repeatedly to to do.

dyqik wrote: ↑

Wed Feb 24, 2021 2:12 am

Is it just me, or is Bitcoin just a coders attempt to revive the pointless and economically dangerous idea of the gold standard?

Something that economically illiterate libertarians repeatedly to to do.

I believe the design of bitcoin was originally partly inspired by some cranky libertarian adjacent ideas about inflation being bad. However, it is it least vaguely amusing watching the crypto people rediscover the banking system as they go along.

secret squirrel wrote: ↑

Tue Feb 23, 2021 7:11 am

Woodchopper wrote: ↑

Mon Feb 22, 2021 12:02 pm

Sorry, don't have time to post links but it appears that Bitcoin is useful to many people who wish to evade government controls on cross-border transfers of capital (either because they money was unlawfully acquired, or because its not lawful to move it out of the country). The currency isn't as anonymous as is often touted, but is probably anonymous enough for, say, Russians of Chinese who want to move their wealth abroad.

The implication for this is that there is an underlying rational demand for bitcoin separate from it being a bubble. This would explain why Bitcoin hasn't behaved like a bubble (which should be a rapid journey of prices from low, to high and back to low). The social good or harm comes down to how people think of the regimes whose laws are being thwarted.

This is true, and provides bitcoin with some value as long as people prefer btc for this rather than arguably better suited tokens, but it's also neither necessary nor sufficient to explain the price behaviour.

I agree. Price fluctuations seem to be due to speculation.

Woodchopper wrote: ↑

Wed Feb 24, 2021 8:40 am

I agree. Price fluctuations seem to be due to speculation

Also probably a lot of outright manipulation. It's a very illiquid and poorly regulated market, and Tether have been injecting billions of largely fake dollars into the system. Obviously a reasonable amount of actual money has to go in to pay the miners' bills and make the enterprise worthwhile, but the price seems to not be based on that, at least in large part.

Little waster wrote: ↑

Mon Feb 22, 2021 10:37 am

Similarly, in theory the 3rd bitcoin out the gates could have been worth $1m even if the energy needed to unlock it wouldn't have toasted a panini.

Panino.

Rich Scopie wrote: ↑

Wed Feb 24, 2021 10:25 am

Little waster wrote: ↑

Mon Feb 22, 2021 10:37 am

Similarly, in theory the 3rd bitcoin out the gates could have been worth $1m even if the energy needed to unlock it wouldn't have toasted a panini.

Panino.

Panina.

Panninis.

dyqik wrote: ↑

Wed Feb 24, 2021 1:16 pm

Rich Scopie wrote: ↑

Wed Feb 24, 2021 10:25 am

Panino.

Panina.

I know about Tamino and Pamina, and Papageno and Papagena.

But don't remember any of them dealing in bitcoin.