Bitcoin in a hyperbolic bubble

[WolfeTone]

My question was why would BTC miners have to follow that ban?

Because it would be cost prohibitive not to follow the ban, put them out of business and ultimately make no economic sense to try continue relying on non-existent fossil fuel energy sources when there is cheaper alternative sources available.

It's not really that hard to understand.

 

[tecate]

Unless there is 100% consensus of every nation state on the planet to ban bitcoin mining without exception, no existential threat exists to the bitcoin network. Nations have banned bitcoin. Some have changed their mind and then banned it again. They've done similar with bitcoin mining. And yet the bitcoin network is stronger than ever.

 

[DublinHead54]

Because it would be cost prohibitive not to follow the ban, put them out of business and ultimately make no economic sense to try continue relying on non-existent fossil fuel energy sources when there is cheaper alternative sources available.

It's not really that hard to understand.

So just for clarification you do agree that BTC can be controlled by a government per the example you provided and therefore agree it is not completely decentralised therefore?

 

[tecate]

@Wolfie: Say you're rolling out a network and your choices are to have just one point/location from which to run that network or you can spread that over a gazillion sites distributed over 195 countries.

The first option is easiest so you run with that. A week later, the government come and close it down. Your network is now done for, yer not a happy camper and you hit the drink for a week.

You pick yerself up a week later and decide to try again and run with option 2. You now have network points in 194 countries yet users from all 195 countries access your network.

You'd be well pleased with your decentralised network right?

 

[WolfeTone]

So just for clarification you do agree that BTC can be controlled by a government per the example you provided and therefore agree it is not completely decentralised therefore?

How would a decision by government to ban, or make cost prohibitive, the use of, or resourcing of, fossil fuels amount to BTC under control of a government and therefore meaning it is not 'completely decentralised'?

Am I missing something here? I acknowledge your aforementioned direct involvement in the crypto space but I find this line of thinking, bizarre, quite frankly.
To clarify, inherent in my example of government(s) banning the use of fossil fuels is the underlying assumption that it will happen when their is ample infrastructure to provide alternative clean, renewable energy to supply society, industry and commerce.

 

[DublinHead54]

How would a decision by government to ban, or make cost prohibitive, the use of, or resourcing of, fossil fuels amount to BTC under control of a government and therefore meaning it is not 'completely decentralised'?

Am I missing something here? I acknowledge your aforementioned direct involvement in the crypto space but I find this line of thinking, bizarre, quite frankly.
To clarify, inherent in my example of government(s) banning the use of fossil fuels is the underlying assumption that it will happen when their is ample infrastructure to provide alternative clean, renewable energy to supply society, industry and commerce.

You haven't clarified your example, you just changed it. I'll give you the benefit of the doubt and accept that's what you originally meant when you said an immediate ban and resulting in either changing or dying.

If you can't see that problem then I don't know what to say.

 

[WolfeTone]

If you can't see that problem then I don't know what to say.

No, I can't see that problem and I am fine if you don't know what to say.

 

[WolfeTone]

So on its official Twitter account the ECB posted this 'cryptic' ryhme for Valentines day.

"Roses are Red
Violets are Blue
We'll keep financing conditions favourable
Until the crisis is through"

So romantic. It looks like they have announced that they do indeed have a magic money tree, and are turned on about the prospect of possibly entering a hyperinflationery period.

 

[tecate]

It's far more romantic than 'money printer go brrrrr!'

 

[tecate]

Just in case anyone is still in doubt about the nature of bitcoin mining, here's a current example of that relentless pursuit of wasted, renewable energy:

'Massive 70 MW Bitcoin Mining Rig Shipped to Russia'

This is one of a number of operations which are exploiting the estimated 5GW of surplus hydropower produced in the remote Siberian region.

Additionally, here is a thoughtful piece on the misconceptions surrounding bitcoin's energy use.

 

[Duke of Marmalade]

A target of $300,000 to $500,000 is credible and reasonable.

This figure seems to derive from applying the John Bowe technique to the value of the world's $10trn gold. What has that got to do with it. I suppose we should be thankful that he didn't use the world's real estate value of $228trn. But then I suppose a prediction of btc of $10m might not seem credible.
I am familiar with the life assurance sector. There are very strict regulations and guidance about how they describe the potential for their products. The time has surely come when the consumer protection people at the central bank should move to stop the irresponsible hype around bitcoin.

 

[tecate]

This figure seems to derive from applying the John Bowe technique to the value of the world's $10trn gold. What has that got to do with it. I suppose we should be thankful that he didn't use the world's real estate value of $228trn. But then I suppose a prediction of btc of $10m might not seem credible.
I am familiar with the life assurance sector. There are very strict regulations and guidance about how they describe the potential for their products. The time has surely come when the consumer protection people at the central bank should move to stop the irresponsible hype around bitcoin.

Correct me if I'm wrong Dukey, but this guy works for a digital assets SaaS / industry infrastructure company. Unless there's something we don't know, there's no indicator that Metaco benefit from bitcoin at 300k-500k anymore than if it was at $50-100k?. It would be different if it was a hedgefund. It would seem that this is simply his opinion.

However, you did refer to a Wall Street guy a couple of weeks back (Scott Minerd). It originally came to light that his fund (Guggenheim Partners) had filed paperwork with the SEC to gain the necessary permission for the fund to buy digital assets. When first interviewed on the subject, he said that, he expected bitcoin to eventually reach a price of $400,000. In the days leading up to their approval being granted to buy, he said that he expected no further upside for bitcoin in 2020 and that it would fall back below $20,000. Some days after approval, he was back on again (presumably having had orders filled), this time predicting a price of $600,000.

That guy is from the conventional Wall Street set - and that is what they do and have always done. There's no need for anyone to single out crypto for market manipulation and bad practice. It's pervasive across traditional finance. I remember watching an emotional Bill Ackman on CNBC last March - predicting the end of the world!

 

[Duke of Marmalade]

Correct me if I'm wrong Dukey, but this guy works for a digital assets SaaS / industry infrastructure company. Unless there's something we don't know, there's no indicator that Metaco benefit from bitcoin at 300k-500k anymore than if it was at $50-100k?. It would be different if it was a hedgefund. It would seem that this is simply his opinion.

Maybe (maybe) this guy is indifferent to the prospects for btc. But the person quoting him has a definite interest in hyping btc.

 

[WolfeTone]

The time has surely come when the consumer protection people at the central bank should move to stop the irresponsible hype around bitcoin.

I assume you mean ECB? I can't imagine the Irish central bank making much in-roads in stopping bitcoin?

But then again, the ECB is hardly a model of responsibility in its own right, is it?

Whatever happened to their mandate to maintain a stable monetary system with an inflation target of around 2%?
Nowadays its "whatever it takes" - Draghi, or "we can never run out of money" - LaGarde.

The euro is finished. Great idea in theory, but in practice it's descended into a shambles.

Get out now while you can.

 

[Duke of Marmalade]

I assume you mean ECB? I can't imagine the Irish central bank making much in-roads in stopping bitcoin?

But then again, the ECB is hardly a model of responsibility in its own right, is it?

Whatever happened to their mandate to maintain a stable monetary system with an inflation target of around 2%?
Nowadays its "whatever it takes" - Draghi, or "we can never run out of money" - LaGarde.

The euro is finished. Great idea in theory, but in practice it's descended into a shambles.

Get out now while you can.

I was talking about consumer protection. Dangling prospects of a 10 fold return would be banned in any regulated activity.

 

[WolfeTone]

Im not familiar with the proponents of the aforementioned price predictions of $300-$600k, but on the flip side their is ample commentators touting a price of $0, or next to, also. Isn't this as equally irresponsible?
If such commentators are short bitcoin isn't this effectively the same thing? Where do AAM Bitcoin price prediction games sit with all of this?

 

[DublinHead54]

Just in case anyone is still in doubt about the nature of bitcoin mining, here's a current example of that relentless pursuit of wasted, renewable energy:

'Massive 70 MW Bitcoin Mining Rig Shipped to Russia'

This is one of a number of operations which are exploiting the estimated 5GW of surplus hydropower produced in the remote Siberian region.

Additionally, here is a thoughtful piece on the misconceptions surrounding bitcoin's energy use.

I don't see the reference to '5GW of surplus' in the article, just that a rig was shipped? However, 5GW is small in terms of energy usage/surplus, as an example, 5GW/Hr is 0.0005% of Russia annual usage. Given that Bitcoins annual energy consumption is an estimated 45 Terra Watts, initiatives like this whilst offering potential are a drop in the ocean, and are not evidence that there should be no concern over BTCs energy usage.

If the BTC Network could be operated entirely from 'surplus' energy from established energy sources do you think the Chinese miners would let go given the economic incentives they have? Regarding energy more general, I am unaware that science has yet to develop an energy source that has no wastage?

I actually believe that all power systems have to run a surplus in order to protect the power network because no industrial power source can just be 'switched on' instantly as needed.

The coindesk article offers some good insights but overall it lacked depth. I thought the argument that 88% of coins are already mined therefore energy consumption will be lower was weak. There was no analysis to show energy consumption as mining becomes infinitely harder, even a rough estimate given that 88% of coins have been mined in 10 years but the remaining 12% won't be mined for another ~20 years. Regardless of whether the energy source is renewable or not.

I agree you can't compare BTC to Visa as the latter is much more established with greater volume. However, if the conversation on carbon footprints is to include the ancillary connections (reference to US military in the article) then the ancillary services of BTC need to be brought into the conversation.

 

[Duke of Marmalade]

I think the economics of the miners is central to how much they will spend on electricity. So the massive price increases are the main driver. When new bitcoin becomes a negligible part of the miners'revenue and they depend only on transaction fees, their revenue seems destined to collapse and so I agree that this will lead to a big reduction in hash power and thus electricity usage.
But the linking of the US military expenditure to the protection of Visa is silly.

 

[EmmDee]

I'm not going to get into the philisophical question of whether Bitcoin is real or a "tulip bubble" - I'm undecided. The infrastructure is definitely real and being used by the mainstream banking industry already.

I'm unconvinced on the "store of wealth" argument at this point. A highly volatile asset isn't a good store of wealth. If the price can vary significantly on the back of one news announcement, the potential for loss of wealth is a counter balance to the independence question. A reversal of that announcement could drop the value just as much. And that volatility has a similar impact to hyper-inflation. However, possibly over time that volatility evens out - at which time I'd be more swayed by the store of wealth question. That doesn't preclude the benefit of having some Bitcoin in an investment portfolio.

The energy question is not irrelevant. A single transaction on Bitcoin has the same eneergy usage as 32 or 33 thousand over the Visa infrastructure for example. However, if that is a concern for people, I believe the energy usage by devices left on standby globally exceeds Bitcoin. My point being, whether using renewables or other methods, Bitcoin energy usage while problematic isn't the killer criticism to my mind

 

[DazedInPontoon]

When new bitcoin becomes a negligible part of the miners'revenue and they depend only on transaction fees, their revenue seems destined to collapse and so I agree that this will lead to a big reduction in hash power and thus electricity usage.

Back when the reward was 50 btc per block, people were predicting that by the time the reward had reduced by over 85% percent that this would have already happened, and yet here we are at 6.25 btc per block, and record high hashrate.

They made a very common error when predicting the future of bitcoin.