Bitcoin in a hyperbolic bubble
- Thread starter Duke of Marmalade
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Another day, another FUD article. If someone decides before considering energy usage that it doesn't achieve anything useful, then what conclusion are they going to come to? The process is necessary to secure a trillion dollar network. That's first and foremost.
The energy consumption of Christmas lights in the US equals that of the entire annual energy consumption of El Salvador. Here's a comparison with other activities ->
Now lets compare btc energy use against gaming ->
And then there's youtube - same deal.
Bitcoin mining is location independent. It can consume energy at source with no transmission loss - and access stranded and excess power. You can see from that 2nd graphic how much more progress has been made in terms of renewables than other activities. That trend will continue as miners continue the pursuit of the cheapest possible energy sources available on the planet.
This BBC journo has been spreading 'bitcoin is finished' FUD since 2013. I'd imagine that explains why his article represents one side of the energy use discussion. A global, permissionless, uncensorable, real-time final settlement system (which is what the bitcoin network is) has benefit.
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yea the earth is full of clean renewables then why in the thousands of years of human civilasation we have only been able to harness a tiny proportion of it ? because its very difficult its spread out over the surface of the earth , all of our technology is based on concentrated energy sources . Even with all the communications tech advancements, smart phones , computers etc we have barely made any inroads in energy technology. There is a reason for this, Its very very difficult, you come against the laws of physics
I ask you a question why didn't Satoshi or whatever his name is not go and develop a revolutionary new energy technology rather than bitcoin. Bitcoin is afterall only an accounting system ,clever and all as it is, financial transactional technology would not be at the forefront of societal needs and then to cap it all he writes code just to consume loads of energy . What does all this energy consumed result in ? more food, more production, more vaccines, more transport, No it results in useless pussles solved and a new accounting token, Wow
True, but as discussed in a link to YT video, the object has always been to bring the energy source to people - oil, gas from remote areas to populated areas. Its not easy for sure.
But instead of bringing the clean renewable energy source to populated areas for bitcoin mining, why not bring bitcoin mining to the energy source?
Duke of Marmalade
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Just Sunday musing.
The reward for "mining" (what a euphemism
) was originally set by Satoshi at 50 btc. At the going rate of 5,000 btc per pizza this was about 20c per block. Satoshi thought it good enough, after all I could do a bit of mining at home in the background on my laptop. Today the reward is c.$300,000 per block. (28/02/21 - I date stamp this as it will be wildy wrong within a few days).
So the nonsense consumption of electricity is driven by the price of btc. After a few halvings and the next couple of burst bubbles mining rewards will be negligible, the mining rigs will be dismantled and folk like me can earn a few transaction fees from my laptop, just as Satoshi had designed it.
On Tesla and Musk. Tesla has lost about $200bn of market cap since the announcement. Makes the bitcoin pump profits of, say, $0.5bn look totally irrelevant. Is the big reversal coincidental? If I was a Musk fan (I am not) I certainly would not be impressed by this ego trip down crypto lane.
The reward for "mining" (what a euphemism
) was originally set by Satoshi at 50 btc. At the going rate of 5,000 btc per pizza this was about 20c per block. Satoshi thought it good enough, after all I could do a bit of mining at home in the background on my laptop. Today the reward is c.$300,000 per block. (28/02/21 - I date stamp this as it will be wildy wrong within a few days).So the nonsense consumption of electricity is driven by the price of btc. After a few halvings and the next couple of burst bubbles mining rewards will be negligible, the mining rigs will be dismantled and folk like me can earn a few transaction fees from my laptop, just as Satoshi had designed it.
On Tesla and Musk. Tesla has lost about $200bn of market cap since the announcement. Makes the bitcoin pump profits of, say, $0.5bn look totally irrelevant. Is the big reversal coincidental? If I was a Musk fan (I am not) I certainly would not be impressed by this ego trip down crypto lane.
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Is this the final path? The Ultimate Destination? The coming of BOHA (although, not quite, you appear to signal bitcoin transaction fees could still be worth a few bob)?
You could be right Duke, but your track record in predicting bitcoin demise is... not great, to be polite.
You keep the faith, bitcoin will return to zero... notably you have extended the timeframe out to a 'few halvings'.
We are talking about another decade then? Of bitcoin being up front and center a disruption to asset and financial markets, before Hot Air Day Cometh!?
Duke of Marmalade
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Let's say that every time btc falls 10% I get it right. So I do get it right quite a lot but for sure at this point I am a bit behind, but I am not disheartened.
Eh, no, sorry to disagree.
Alternatively, if you want to change the parameters of BOHA forecasts to 10% corrections, then that is fine.
Welcome to the club, we have all been there. Your conversion from the darkside has begun
.Perfect. So you've identified that energy sources have never been a consideration in the establishment of population centres historically. Bitcoin mining can go to the source. They can be deployed temporarily and relocated easily in some instances. During rainy season in China, mining kit is run 5 months of the year to take advantage of surplus hydro energy and switched off outside of that timeframe. There are very few other activities that have that flexibility.
Who's to say that the global financial settlement system that he did create doesn't lead to advancements in energy technology? As it stands, if one group of miners can source cheaper energy, then the rest won't be competitive. That's why those involved in the bitcoin mining industry are scouring the planet for the cheapest of power. That is always more likely to be excess renewable energy. The activity also subsidizes renewable energy production by allowing profitable use of energy that is produced at times when there simply isn't any need for it. Therefore, renewable projects that might otherwise be borderline in terms of profitability can become viable.
If you think that, then you've misunderstood the entire proposition. It's akin to suggesting that this internet thing, it's hardly at the forefront of societal needs. As for the energy use, it serves two purposes:joe sod said:
1. It's the energy standard that Henry Ford attempted to launch 100 years ago.
2. It provides for the most secure network that exists on the planet.
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There it is. The 21st century gold-rush.
That electricity consumption provides for the electricity standard that Henry Ford tried to get off the ground 100 years ago and the most secure monetary network that exists on the planet.
As regards 'as Satoshi had designed it' - no fundamental change has been made in the codebase relative to the way bitcoin is mined. The guy was exceptionally clever as he knew that there would be market cycles - and designed it so as the difficulty rate adjusts accordingly.
At the time of writing this post, Tesla/Musk is up 27% on its btc investment. Bear in mind we're talking about a very short timeframe.
Duke of Marmalade
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This is absolute nonsense
The following quote explains what electricity backed currency is.It was intended to be a guarantee from the central government that your currency could buy a fixed amount of electricity rather than a fixed amount of gold. Clearly Henry was convinced that a currency needed intrinsic backing.Wiki said:
A bitcoin is a "guarantee" that you have burnt up gazillions of energy not that you are guaranteed access to that wasted electricity.
But my dear @tecate you didn't come up with this brainwave on your own. It is straight out of the cult's handbook as they embrace their own Old testament prophet, Henry Ford.
Anyway, can you make up your mind? In in #342 you seem to be talking down the significance of the electricity consumption of bitcoin whilst you now hail it as having almost biblical prophetic meaning.
The landing place for bitcoin, if it doesn't crash and burn before hand, will be that the only remuneration of the "miners" will be transaction fees. So the economics of mining will be transformed. The centralised mining rigs would no longer be viable and the maintenance of the blockchain would become decentralised at much lower energy consumption as the good Satoshi planned it.
I disagree.This is absolute nonsense
Here you refer to central government - Ford wanted to take that out of the hands of central banks and central governments. They frustrated him in his efforts and he had to abandon his plan. That's because the manner in which his plan was structured meant that he needed their approval - it was a sitting duck. Bitcoin mining isn't a sitting duck - it can't be suppressed as that suppression would turn into a game of whack-a-mole.Duke of Marmalade said:
Henry was convinced that gold was being manipulated by central banks and central governments - facilitating governments and kings in funding wars and vanity projects that were not in the interests of the average citizen.Duke of Marmalade said:
The irony - this from the guy who has unquestioning support for government issued money - when the preeminent fiat currency in the world features the words 'In God We Trust' on its notes!Duke of Marmalade said:
Where is the confusion? I've clearly stated that along the same lines of what Henry Ford wanted to achieve, bitcoin is that updated energy standard. The difference is that it converts surplus energy directly into hard money. That energy increasingly comes from renewable sources - and furthermore, it is surplus. Bitcoin miners can locate themselves at source - even if that is in the back of beyond. They don't compete with other energy users as they are the buyers of last resort.Duke of Marmalade said:
I've never heard anyone ever suggest that Satoshi didn't plan this - you're the first to do so. However, that excludes this last part where you suggest that it's going back to home mining rigs. That's not going to happen. The reason it's not going to happen is that year on year, bitcoin's network effect continues to expand. Over the course of these discussions here, that's what has been happening.Duke of Marmalade said:
Duke of Marmalade
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@tecate it is just beyond belief that you or anybody else would believe that the consumption of energy in mining bitcoin is the fulfillment of Henry Ford's vision of a currency backed by an entitlement to as yet unused energy. Frankly I don't think you could possibly believe that but in time worn fashion you will never backtrack from a clearly untenable position.
For avoidance of doubt I am not one of the knockers of bitcoin on the grounds of the enormous amounts of electricity it uses but I am with Yellen that it is an unbelievably inefficient way to verify a ledger, notwithstanding that decentralisation is inherently inefficient. But, as I say, when the totally artificial rewards for mining new bitcoin vanish for one reason or another and the only revenue for the keepers of the ledger are transaction fees then the electricity consumption will fall from that of the Netherlands to, say, that of Kinnegad. The fate of the planet is not in the hands of bitcoin.
For avoidance of doubt I am not one of the knockers of bitcoin on the grounds of the enormous amounts of electricity it uses but I am with Yellen that it is an unbelievably inefficient way to verify a ledger, notwithstanding that decentralisation is inherently inefficient. But, as I say, when the totally artificial rewards for mining new bitcoin vanish for one reason or another and the only revenue for the keepers of the ledger are transaction fees then the electricity consumption will fall from that of the Netherlands to, say, that of Kinnegad. The fate of the planet is not in the hands of bitcoin.
Just to dispel that notion, this is very much my thinking. There's nothing 'untenable' about my position. Bitcoin converts (increasingly surplus renewable...) energy into hard money directly. It doesn't exist without that input.
It's a position within which - over 4 years - has acknowledged a whole host of shortcomings as related to bitcoin - and an acknowledgement that bitcoin could potentially fail. I don't have a fixed position on that - it's something that I think should be under continual review. However, the current outlook suggests bitcoin's continued growth and maturation is becoming increasingly likely.
Different discussion topic. I believe Yellen to be behind the curve in her assessment of bitcoin.
Duke of Marmalade said:
The fate of the planet was never in the hands of bitcoin - that's a completely false narrative - just like Nouriel's Tether/Bitfinex claim (that Tether would bring down bitcoin) was a false narrative.
Maybe, but its the most efficient way to verify a trustless ledger. All other ledgers, 'verified', still require a large dollop of trust.
Me too, that's why I call her out to give bitcoin her endorsement at some point. But not before she reveals her own skin in the game. Others think she will never convert her views, but can she be trusted?
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