Author Topic: Bitcoin is funny money  (Read 111565 times)

ChpBstrd

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Re: Bitcoin is funny money
« Reply #400 on: February 27, 2021, 09:40:42 AM »
To restate the interesting point.... A currency with built-in deflationary characteristics cannot work because it would always be to one's advantage to trade using an inflationary currency and to hoard the deflationary currency. To be more concrete, if I save 50% of my pay and spend the other 50% (in any currency), it would make sense to save in the deflationary currency and buy groceries, pay rent, and get my cavities filled using the inflationary currency. This is what literally everyone who holds crypto is doing now. They get paid in dollars, convert their savings to crypto, and cover expenses in dollars.

Combined that with the lack of supply inelasticity: isn’t this a nearly surefire environment for the long time frame chart go up in steps, but  always settle at a higher value than the step before; following some form of degressional path in the big picture?
In other words (I’m not a native speaker, please forgive): wouldn’t that mean that the btc/fiat pairs would need to always rise, but with decreasing gains possible (there will always be a fool paying more than you did, but the difference will get smaller and smaller over time); in essence making it a good idea to buy now and hodl till i need it or the gains are so marginally it isn’t worth it anymore?

I think it is more likely cryptocurrencies take the path of other collectibles, and never do become functioning currencies. The price of collectibles does not rise forever even though their supply is constrained. At some point, there are not enough people willing to trade $100 million for an Andy Warhol painting or $50,000 for a baseball card, and so the price stagnates or goes down.

onecoolcat

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Re: Bitcoin is funny money
« Reply #401 on: February 27, 2021, 10:57:01 AM »
To restate the interesting point.... A currency with built-in deflationary characteristics cannot work because it would always be to one's advantage to trade using an inflationary currency and to hoard the deflationary currency. To be more concrete, if I save 50% of my pay and spend the other 50% (in any currency), it would make sense to save in the deflationary currency and buy groceries, pay rent, and get my cavities filled using the inflationary currency. This is what literally everyone who holds crypto is doing now. They get paid in dollars, convert their savings to crypto, and cover expenses in dollars.

Combined that with the lack of supply inelasticity: isn’t this a nearly surefire environment for the long time frame chart go up in steps, but  always settle at a higher value than the step before; following some form of degressional path in the big picture?
In other words (I’m not a native speaker, please forgive): wouldn’t that mean that the btc/fiat pairs would need to always rise, but with decreasing gains possible (there will always be a fool paying more than you did, but the difference will get smaller and smaller over time); in essence making it a good idea to buy now and hodl till i need it or the gains are so marginally it isn’t worth it anymore?

I think it is more likely cryptocurrencies take the path of other collectibles, and never do become functioning currencies. The price of collectibles does not rise forever even though their supply is constrained. At some point, there are not enough people willing to trade $100 million for an Andy Warhol painting or $50,000 for a baseball card, and so the price stagnates or goes down.

That is the dumbest analogy I ever heard.

celerystalks

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Re: Bitcoin is funny money
« Reply #402 on: February 27, 2021, 11:01:33 AM »
No here is the dumbest analogy!

Time flies like an arrow, but fruit flies like a banana.

lifeanon269

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Re: Bitcoin is funny money
« Reply #403 on: February 27, 2021, 04:14:09 PM »
I think it is more likely cryptocurrencies take the path of other collectibles, and never do become functioning currencies. The price of collectibles does not rise forever even though their supply is constrained. At some point, there are not enough people willing to trade $100 million for an Andy Warhol painting or $50,000 for a baseball card, and so the price stagnates or goes down.

Collectibles don't provide a service/benefit to people in the same way a global internet censorship resistance monetary network does though. To ignore this utility I think is an incomplete analysis as to why bitcoin adoption will grow and where its base demand will come from. There is so much more analysis that can be performed to understand the market better other than just its price alone. Also, to your claim earlier where you said that volatility would hurt bitcoin's use as a currency, wouldn't then stagnation further help bitcoin's use as a currency? At the end of the day, bitcoin's volatility comes from the market size differences between the greater economy and bitcoin's and there is no supply elasticity to offset any increase in demand. If that market size difference begins to balance out, then eventually volatility decrease as well. Think about the volatility difference between a penny stock versus a Fortune 500 company. Also, bitcoin's supply halvings will continue to get less and less meaningful which means they'll be less of a shock to the market forces in the future every 4 years.

Not sure if anyone else is interested in macro economics or not, but there is a good macro econ podcast called MacroVoices and this week's guest was Lyn Alden. I think she is a brilliant macro economist and she touches on the above a little bit toward the end.

https://youtu.be/hYAg0OpsjPw

As for the market analysis I mentioned above, here are some interesting points about the current market that I think signals that we're not anywhere near the top.

Coinbase just filed for an IPO with the SEC and released their S-1 report in the process. In this report they provided a historical breakdown of who their investors have been over the years. There is a massive uptick in the number institutional traders that are buying bitcoin compared with the last bullrun. These investors are considered much more "sticky" compared to retail investors that would be much more likely to sell in a sharp downturn.



Furthermore, Coinbase filing for an IPO at $100b means that Coinbase will become one of the countries largest financial institutions. For many, one of the biggest risks in bitcoin is the uncertainty of what governments would do against it. The US having one of its largest FI's be a cryptocurrency company is a pretty big signal that bitcoin is here to stay with little risk of a full-on ban from the US. Without a full-on ban from the US, most other free democratic countries would be reluctant to do so either to avoid competitive disadvantages in that growing market.

NYDIG CEO Ross Stevens has stated that they currently have about $6 billion in bitcoin holdings for their clients and they have over $20 billion in additional demand for bitcoin on their orderbooks for the year. This is further evidence of not just growing institutional demand, but future institutional demand. NYDIG also just recently filed for a bitcoin ETF. It is only a matter of time before a bitcoin ETF is approved in the US. Canada's bitcoin ETF has seen massive demand with more on the way:

https://www.coindesk.com/canadas-first-bitcoin-etf-hits-421-8m-aum-in-two-days


As I've discussed on these forums, the bitcoin halving that takes place roughly every 4 years creates a massive supply shock to the market which means there is a large amount of price rediscovery that takes place afterward. This is generally what kickstarts each bullrun, but one metric that stands out in this bullrun compared with the previous ones is the number of bitcoins that are leaving exchanges. All this bitcoin that is leaving exchanges means that more and more liquidity is leaving the market and creating a further supply shock with increased demand.



To further illustrate this metric, this chart shows the liquid supply change in bitcoin and there is a massive shift in the amount of liquid bitcoin available throughout this bull market:



While there is certainly a lot of speculation that takes place with bitcoin, there is also a lot of usage among people that find value in bitcoin's unique properties. Compared with countries that have stable economies and financial institutions, countries that don't are seeing a surge in bitcoin usage and adoption. Since this is demand that is also considered sticky since they're using bitcoin for a crucial real world need:

https://www.statista.com/chart/18345/crypto-currency-adoption/
https://www.youtube.com/watch?v=xLYYh4aPXAM

Bitcoin's adoption rate is also growing faster than the internet's adoption rate:



When you combine some of these metrics with what is taking place in the bigger macro-economic picture (fiat money printing taking place across the globe), then it is not hard to see growing demand for a hard monetary asset like bitcoin. With a weakening US dollar, the trading pair of BTC/USD will continue to lean toward the stronger BTC side.

I could dig into bitcoin's market analysis all day, but if people are just simply looking at bitcoin's large price tag thinking it can't possibly go higher instead of looking at actual market dynamics, then I think people are missing the big picture. Bitcoin isn't going anywhere any time soon. The risk of it going to zero at this point is extremely small and there are far more indications that the market is just getting started across the world.

MustacheAndaHalf

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Re: Bitcoin is funny money
« Reply #404 on: February 27, 2021, 06:20:36 PM »
Here's my original post with bolded words showing uncertainty:
It's probably also reaching "the top is in"... not for all time, but for now.  Bitcoin goes through crashes every few years, and now seems like higher potential for a crash.  Visa and Mastercard have a combined market cap of about 800 billion, while Bitcoin is more valuable than both combined. This past year, Bitcoin ran up 5x in one year.  Those are similar conditions I saw right before another crash in Bitcoin's value price.


I then, in turn, simply took your own analysis (using past behavior to predict future outcomes), to show you how even your own stupid analysis (bitcoin running up 5x means a crash is coming) was completely bogus.
Does calling it stupid achieve something?  It's also interesting while calling it stupid, you weren't able to read it correctly.  Where did I say "means a crash is coming"? 

Your analysis being that a "5x move means a pending crash for bitcoin" (which obviously is factually incorrect as I showed with 2013 and 2017). That was the only point I was making.
Who are you quoting here?  Where did I say "a pending crash for bitcoin"?


But if it is you just plainly ignoring what is visibly written in this chat in clear-as-day English with as much chronologically correct breakdown and quotations being used as possible by myself to help you comprehend what was stated, then I don't know what else I can do. If you do understand what was stated and yet are simply trying to put words in my mouth, then shame on you.
And do you feel shame "plainly ignoring what is visibly written in this chat in clear-as-day English"?

lifeanon269

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Re: Bitcoin is funny money
« Reply #405 on: February 27, 2021, 07:14:15 PM »
Here's my original post with bolded words showing uncertainty:
It's probably also reaching "the top is in"... not for all time, but for now.  Bitcoin goes through crashes every few years, and now seems like higher potential for a crash.  Visa and Mastercard have a combined market cap of about 800 billion, while Bitcoin is more valuable than both combined. This past year, Bitcoin ran up 5x in one year.  Those are similar conditions I saw right before another crash in Bitcoin's value price.


I then, in turn, simply took your own analysis (using past behavior to predict future outcomes), to show you how even your own stupid analysis (bitcoin running up 5x means a crash is coming) was completely bogus.
Does calling it stupid achieve something?  It's also interesting while calling it stupid, you weren't able to read it correctly.  Where did I say "means a crash is coming"? 

Your analysis being that a "5x move means a pending crash for bitcoin" (which obviously is factually incorrect as I showed with 2013 and 2017). That was the only point I was making.
Who are you quoting here?  Where did I say "a pending crash for bitcoin"?

You keep going. Give it a rest. The thread has moved on from your meaningless discussions. You're even rehashing your same complaints at this point. Why the tired rehash? You already brought that misquote up and I already addressed it here and here:

You quoted something I did not say - you put words in my mouth, and haven't responded to this.

I apologize for the slight misquote. I rescind my quotes on that statement. It was not a direct quote you said and I should not have used quotes there.

I'm not misinterpreting anything. Your post was simply about the price of bitcoin and that was the extent of your analysis in that paragraph (contrast that to the analysis I just gave) and you claimed a 5x drop was indicative of a crash (regardless of certainty). Your certainty or uncertainty of that prediction wasn't what my argument to you was about. You also continue to fail to provide the example of the 5x move you were referring to as I asked from you. In the end, it is still a prediction or hunch of yours regardless of your certainty level and the conditions you presented in that paragraph were based on price alone as my questioning to you below pertained to:

Since you seem to be avoiding the substance of the debate, to get past this, let's answer some questions:

Do you agree that your assessment that you posted at February 19, 2021, 09:22:25 AM was simply based on bitcoin's current price based on its historical price and that you didn't refer to any other condition outside of that paragraph? There was nothing else in that paragraph that was anything other than a condition on bitcoin's price history. Do you agree that using price history on its own is a faulty metric for future price predictions? Do you agree that bitcoin's moves in the past in both 2013 and 2017 were much larger moves than just a 5x move?

Do you agree that I never claimed that crashes must follow the same path as past price crashes?

If you can't agree to answer those questions, then I'm not sure you're posting in good faith when you continue to ignore my posts and instead choose to argue semantics. It is a waste of both our time, frankly. If you would like to raise some questions you'd like clarified by myself as well just so we can move on, I'd be glad to do so. But having you ignore my posts and respond with meaningless semantic and frivolous accusations that don't have anything to do with the actual debate we were having is pointless. If you can't answer those questions, then I'm done responding to you.



But if it is you just plainly ignoring what is visibly written in this chat in clear-as-day English with as much chronologically correct breakdown and quotations being used as possible by myself to help you comprehend what was stated, then I don't know what else I can do. If you do understand what was stated and yet are simply trying to put words in my mouth, then shame on you.
And do you feel shame "plainly ignoring what is visibly written in this chat in clear-as-day English"?

When it comes down to it, at least after you post, I make an attempt at addressing your concerns that you present while also presenting my own. You, however, continue to completely ignore my questions to you while you continue to bring up and rehash the same tired and frivolous responses.

Either add something more to the debate, or just let this thread move on as it had already before your last few posts.

MustacheAndaHalf

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Re: Bitcoin is funny money
« Reply #406 on: February 27, 2021, 09:16:18 PM »
When it comes down to it, at least after you post, I make an attempt at addressing your concerns that you present while also presenting my own. You, however, continue to completely ignore my questions to you while you continue to bring up and rehash the same tired and frivolous responses.
Instead of sticking with the topic, you resort to insults, which I brought up and you made no "attempt at addressing your concerns".  I disagree that you can insult and expect that to go unanswered, and I doubt anyone would call that on topic.


And again you continue to ignore the actual debate and questions at hand while further derailing the actual thread. Great mod work.
Notice how you complain "ignore the actual debate", and then make a comment "Great mod work".  Is that insult sticking to the debate?  You want others to stick to the debate while you type things unrelated to it.

As to "mod work", replying to you is not "mod work".  So your insult is also a nonsense claim.

MustacheAndaHalf

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Re: Bitcoin is funny money
« Reply #407 on: February 27, 2021, 10:04:09 PM »
Even just going on past behavior (which obviously is a flawed approach but that you brought up), it is no where near where the previous bubbles popped (2013 and 2017 bubbles). If it follows 2013's path, then we're still more than a 10x move away from the top from here and if it follows 2017's path then we're still a 4x move away from the top from here. So far it is moving closer to 2013's path, but again past analysis is pointless.
I did not claim a "10x move away" or a "4x move away" is required, you did.  Your claim that "past analysis is pointless" is a "stupid analysis" because it's oversimplified to the point of being farcical.  Why does the exact path of 2013 and 2017 matter?


Other than that singular data point you presented, the only other evidence for "the top is in" is using past performance in past bubbles to falsely claim such (because if you did compare it to past bubbles then by that measure the top is NOT in).
Your "stupid analysis" compares 2020 to 2013 and 2017, claiming "by that measure the top is NOT in".  I'm introducing history by comparison, and you only allow it as an exact measure ("10x move away", "4x move away", "by that measure").


You were using past behavior to make claims about what it is going to do in the future. Which, as I responded is a stupid analysis. And now you're trying to make it out like I was the one making the claim. UNREAL. GTFO. I then, in turn, simply took your own analysis (using past behavior to predict future outcomes), to show you how even your own stupid analysis (bitcoin running up 5x means a crash is coming) was completely bogus.

Once I show you how stupid your narrative was, don't try and push it around and play it off like it was me making that claim while ignoring that even my original statement said it was flawed:
You have made a "stupid analysis" of my claim.  If "past analysis is pointless", why do CAPE ratios have some correlation to future stock returns?  Was Nobel laureate Robert Schiller also doing a "stupid analysis" because "past analysis is pointless"?


I am simply providing two examples that directly refute your claim that a 5x move is a condition that signals a crash is imminent. That was your original statement. You only provided the one condition as an example of your "similar conditions". So I simply provided two examples that disprove your claim. I NEVER said that it "must" follow those paths as you repeatedly claim I said and you repeatedly fail to quote me as saying.

You have yet to provide a single example of where a 5x move is a condition right before another crash you saw and I had provided 2 examples that counter that claim (as I showed, both 2013 and 2017 prices moved beyond a mere 5x move).
The words "similar conditions" mean things resemble a past event, not that "a 5x move is a condition".  Similar conditions do not mean a requirement - you are the one claiming "both 2013 and 2017 prices moved beyond a mere 5x move" "directly refute" what I said.

You say both "I NEVER said that it "must" follow those paths" and then "both 2013 and 2017 prices moved beyond a mere 5x move", and you can't connect those two sentences together.  I did not claim a requirement, but you are claiming a "mere 5x move" is "directly refuted" by "both 2013 and 2017".  Each time I explain myself, you come up with some false version of what I claimed, and like the above use insults like "stupid analysis" in your replies.

DaKini

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Re: Bitcoin is funny money
« Reply #408 on: February 28, 2021, 12:42:19 AM »
I think it is more likely cryptocurrencies take the path of other collectibles, and never do become functioning currencies. The price of collectibles does not rise forever even though their supply is constrained. At some point, there are not enough people willing to trade $100 million for an Andy Warhol painting or $50,000 for a baseball card, and so the price stagnates or goes down.

The difference, as i understood is, that btc is like a baseball card that you can cut into arbitrary pieces without the process losing their relative value - satoshis.
So probably that limit does not apply here.

lifeanon269

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Re: Bitcoin is funny money
« Reply #409 on: February 28, 2021, 06:35:32 AM »
You were using past behavior to make claims about what it is going to do in the future. Which, as I responded is a stupid analysis. And now you're trying to make it out like I was the one making the claim. UNREAL. GTFO. I then, in turn, simply took your own analysis (using past behavior to predict future outcomes), to show you how even your own stupid analysis (bitcoin running up 5x means a crash is coming) was completely bogus.

Once I show you how stupid your narrative was, don't try and push it around and play it off like it was me making that claim while ignoring that even my original statement said it was flawed:
You have made a "stupid analysis" of my claim.  If "past analysis is pointless", why do CAPE ratios have some correlation to future stock returns?  Was Nobel laureate Robert Schiller also doing a "stupid analysis" because "past analysis is pointless"?

My reference to past analysis was in reference to past price analysis on its own that you performed in your original post. It isn't that deeper past market analysis isn't useful. The entire discussion was about the past price analysis alone that you brought up. CAPE ratios are inherently more than just a price analysis (because its a ratio) that takes into account earnings as well. Had you presented a ratio for your analysis as well, that would've been a completely different analysis, but you didn't. Furthermore, Robert Schiller's work wouldn't have received the acclaim it did if there wasn't past examples that matched up with his ratio analysis.

So again, I ask you to provide some examples and deepen your analysis a little more. I'm sure I and many others here would love to hear it, but you have yet to do so. A simple clarification of your analysis and a more thorough write up of what you meant to say probably would've avoided this entire debate, but it seems like you can't/won't elaborate any further about what you meant. What was the other crash in bitcoin's history that you were referring to? Was it 2011, 2013, or 2017? If you're going to maintain your original analysis as being on price alone without any other additional metrics, then yes, I'm afraid that's a stupid analysis.

The words "similar conditions" mean things resemble a past event

Again, can you provide us with what this past crash event was that you continue to refer to?

I'm afraid I'm just going to ignore your future posts unless you address the questions that I brought up that you continued to ignore *checks notes* 5 times since it was posted:

...to get past this, let's answer some questions:

Do you agree that your assessment that you posted at February 19, 2021, 09:22:25 AM was simply based on bitcoin's current price based on its historical price and that you didn't refer to any other condition outside of that paragraph? There was nothing else in that paragraph that was anything other than a condition on bitcoin's price history. Do you agree that using price history on its own is a faulty metric for future price predictions? Do you agree that bitcoin's moves in the past in both 2013 and 2017 were much larger moves than just a 5x move?

Do you agree that I never claimed that crashes must follow the same path as past price crashes?

If you can't agree to answer those questions, then I'm not sure you're posting in good faith when you continue to ignore my posts and instead choose to argue semantics. It is a waste of both our time, frankly. If you would like to raise some questions you'd like clarified by myself as well just so we can move on, I'd be glad to do so. But having you ignore my posts and respond with meaningless semantic and frivolous accusations that don't have anything to do with the actual debate we were having is pointless. If you can't answer those questions, then I'm done responding to you.

ChpBstrd

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Re: Bitcoin is funny money
« Reply #410 on: March 01, 2021, 09:18:43 AM »
I think it is more likely cryptocurrencies take the path of other collectibles, and never do become functioning currencies. The price of collectibles does not rise forever even though their supply is constrained. At some point, there are not enough people willing to trade $100 million for an Andy Warhol painting or $50,000 for a baseball card, and so the price stagnates or goes down.

The difference, as i understood is, that btc is like a baseball card that you can cut into arbitrary pieces without the process losing their relative value - satoshis.
So probably that limit does not apply here.

Can you explain the next step in this reasoning? Does the near-infinite divisibility of precious metals mean they can increase in price forever?

If anything, the infinite divisibility of BTC (and, in theory, the ability to do splits like a stock or spin-offs like Bitcoin Cash) would seem to debunk the argument that there’s a limited supply of crypto in the world and we all better get in now or lose the chance to have money in the future. If BTC became a currency it would have to be diluted to meet its economic demand.

lifeanon269

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Re: Bitcoin is funny money
« Reply #411 on: March 01, 2021, 10:05:20 AM »
Can you explain the next step in this reasoning? Does the near-infinite divisibility of precious metals mean they can increase in price forever?

If anything, the infinite divisibility of BTC (and, in theory, the ability to do splits like a stock or spin-offs like Bitcoin Cash) would seem to debunk the argument that there’s a limited supply of crypto in the world and we all better get in now or lose the chance to have money in the future. If BTC became a currency it would have to be diluted to meet its economic demand.

Just because you have infinite divisibility doesn't mean it lessens its scarcity. It just allows it to be disbursed to more wider portions while still maintaining value. You can't delute its supply. It is like if you took 1 pizza and cut it into 8 pieces, then suddenly cut it into 16, then suddenly cut it into 32...

Just because you continue to have more pieces doesn't mean you suddenly have more pizza. It doesn't mean if people find pizza delicious that they still won't crave having a whole slice of it rather than a tiny morsel and therefore would be willing to value having a whole slice greater than a tiny morsel.

Bitcoin doesn't need to be diluted to meet market demand. To meet market demand it's price simply can do up ad infinitum until whatever its current unit supply is meets the economic value of the amount of people that care to own some. If the entire world wishes to own some, then bitcoin's price would simply reflect that demand. Bitcoin's denomination is just a number, so unlike the pizza analogy where a small morsel of pizza would never satiate one's appetite, the tiniest number of bitcoin can fulfill whatever demand the world needs of it. It is just an arbitrary number. The key point though is that bitcoin supply can't be diluted and that fact is one of its biggest features.

Also, spinoffs (or forks) don't have the same value as bitcoin. There are network effects that come from the market that decide this. These market effects also drive where computing power goes and thus where security lies. Because all the hash power lies with bitcoin, then storing larger amounts of money with bitcoin is much more secure. It isn't something that can be replaced by simply forking over software to a new blockchain, so therefore scarcity isn't impacted. Bitcoin, regardless whether it is around in 20 years or not, will only have a supply of 21 million and that won't change.


On another note, ARK Investments just released their Part 2 whitepaper on bitcoin and it is a decent read if anyone wishes to read it:

https://research.ark-invest.com/hubfs/1_Download_Files_ARK-Invest/White_Papers/ARKinvest_091729_Whitepaper_Bitcoin_II_An%20Investment.pdf

ice_beard

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Re: Bitcoin is funny money
« Reply #412 on: March 01, 2021, 11:17:43 PM »
I haven't followed this discussion, but I personally do think there is a role for an alternative currency at some point, bitcoin won't be it.  Its usage is purposefully inefficient and it's only real value is in its perceived scarcity. 

"This has nothing to do with monetary anything, but is a form of gambling that relies on ever more new gamblers entering the casino and bidding up the price, with more and more gamblers selling each other the bitcoin, all united in the singular purpose of driving up its price so that everyone could get rich."

The most thought provoking part of this article though is the idea that the Fed might actually step in and back up potential future losses since there are now legitimate (but now less legitimate?) institutional investors getting into this racket.

https://wolfstreet.com/2021/02/28/the-big-buy-hype-bitcoin-casino/

Somewhat un-related, but while I'm bashing on bitcoin...

I saw a really interesting fact that Tesla's bitcoin purchase required 1.5x the amount of CO2 to mine it than has been "saved" from the sale of ALL of their "eco-friendly" cars.  This article does not contain these numbers but discusses the at odds position of the purchase.

https://www.theverge.com/2021/2/9/22275243/teslas-bitcoin-purchase-clashes-climate-change-mission

lifeanon269

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Re: Bitcoin is funny money
« Reply #413 on: March 02, 2021, 06:58:12 AM »
Somewhat un-related, but while I'm bashing on bitcoin...

I saw a really interesting fact that Tesla's bitcoin purchase required 1.5x the amount of CO2 to mine it than has been "saved" from the sale of ALL of their "eco-friendly" cars.  This article does not contain these numbers but discusses the at odds position of the purchase.

https://www.theverge.com/2021/2/9/22275243/teslas-bitcoin-purchase-clashes-climate-change-mission

Probably more than any other topic, I see more misinformation about bitcoin's carbon footprint and its impact on climate change than any other. I'm going to address a few things here. I am someone who is deeply concerned about climate change. I drive an electric vehicle (2014 Nissan Leaf), I am a vegan, my wife and I have decided to have 1 child primarily because of the environmental costs of more, I live frugally and avoid frivolous purchases, and live in a 1000sqft house. But yes, I use bitcoin and I think it has become a scapegoat in environmental/emissions discussions simply because of how easy it is to calculate its energy use compared with the energy use of other things today. For example, dryers in the US alone use about as much energy as bitcoin today and there is little incentive to have dryers use greener forms of energy unlike with bitcoin (which I'll discuss later). Watching videos on Youtube or playing video games uses a lot more energy than bitcoin consumes. I think it is an ineffective game for people to play to start scapegoating the ways humans use energy that is subjective to everyone when in reality all that does is shift focus away from where the blame really lies and where the focus needs to be put: the fossil fuel industry.

Claiming that Tesla's bitcoin purchase offsets the CO2 saved from all their cars is an inaccurate statement. First, with bitcoin's supply schedule, a vast majority of bitcoin in circulation today were mined back when CPUs and GPUs were used and thus the carbon footprint of bitcoin was much lower than it is today. Claiming that Tesla's bitcoin acquisition offsets the CO2 saved from their vehicles is inherently using a flawed approach that takes the amount of bitcoin in their purchase and uses today's carbon footprint of the network.

So then it comes down to the transactions being performed today, which don't equate to how much CO2 the network releases or how much energy it uses. A transaction can consist of any number of bitcoin or any amount of value. To further complicate things, the amount of energy used doesn't equate to how many transactions were processed by the network either. This is probably the most widely spread bit of misinformation out there. I constantly see articles equating the carbon footprint of a VISA transaction compared with a bitcoin transaction and that is a flawed comparison. Bitcoin's energy use isn't equal or dependent on how many transactions it processes.

Also, a single bitcoin transaction can be settling millions of transactions within it because it is more of a settlement layer than it is a payment layer (see lightning network, liquid-btc, batched transactions, transaction pools, etc). For example, I have a small Raspberry Pi at my house than uses about 1KWh of electricity in an entire year that runs a lightning network node on it. This lightning network node of mine has processed thousands of transactions for both myself and others. It did this while only needing a handful of on-chain bitcoin transactions. So in reality, bitcoin's energy use per transaction can scale incredibly well compared with other technology that must increase their energy use in inefficient ways (large datacenters) in order to process more transactions.

As I discussed in the first paragraph, energy is used by almost everything we do and use in our daily lives. A lot of it is much more difficult to calculate than the more transparent energy costs of mining bitcoin. So it goes unnoticed or is not in the forefront of the concerned mind of people who are rightfully worried about climate change. I think arguing about what uses of energy people choose for themselves is a fatal approach to tackling climate. Michael Mann, one of my favorite climate scientists explains it well in this article he wrote back in 2019. None of us are without carbon sin:

https://time.com/5669071/lifestyle-changes-climate-change/

Pointing to those sins distracts from the bigger picture that ultimately where the sin lies is in the energy grid where the true costs of fossil fuels is externalized in the economy. Bitcoin mining isn't inherently dirty. If bitcoin mining uses clean energy, then its carbon footprint is minimal. Therefore it is imperative that our energy grid gets cleaned up. As Michael Mann explains in his article, the best way to do this is to put a price on carbon (through a carbon tax) that internalizes those once externalized costs of carbon. If this were done, then bitcoin would quickly find that mining with fossil fuels would be uneconomical.

That leads us to what type of energy is used with bitcoin and where its incentives lie. Bitcoin mining is inherently incentivized to use the cheapest electricity out there. The bitcoin mining market is also a globally competitive market, so it doesn't matter whether your energy location is relatively cheap locally, what matters is whether your energy is relatively cheap globally. So it levels the playing field in an energy market that has virtually zero arbitrage (electricity can't be transported to new markets).

The problem here then, and one of the biggest reasons why bitcoin's carbon footprint isn't lower than it is, is that China subsidizes a lot of dirty coal power. Much of the bitcoin mining that takes place in China uses cheap hydropower during the rainy season, but miners migrate back and forth between clean hydro during the wet season and dirty coal during the dry season. These miners would not be performing this costly migration if it weren't for the subsidies that are given to the dirty coal industry that makes their coal power so cheap compared with the rest of the global energy market. To further illustrate this, here is Cambridge's study on bitcoin's energy mix:

https://www.jbs.cam.ac.uk/faculty-research/centres/alternative-finance/publications/3rd-global-cryptoasset-benchmarking-study/

In it, they found that in the US, bitcoin's total energy use was made up of 63% renewables. Meanwhile, in the US renewable energy only makes up about 20% of the energy production/supply. This is direct evidence that shows in the absence of large subsidies for dirty forms of energy, bitcoin will be incentivized to use clean sources of energy and that is without requiring the use of carbon offsets that can be dangerous excuses for large industries to continue to use dirty forms of energy. In fact, with a large push for renewable power in the world, bitcoin mining would likely be one of the first industries to become powered by 100% clean renewable energy without requiring the use of offsets simply because the network is economically incentivized to use the cheapest form of electricity regardless of where it is located. It isn't inherently tied to regional grid compositions unlike the daily use of energy that makes up typical residential, commercial and industrial uses. Bitcoin mining just moves to where ever the cheapest electricity is. For anyone concerned about climate change, putting a cost on carbon should be our number one concern, not scapegoating what subjective uses people like to use the world's energy on.

To further complicate bitcoin's carbon footprint, bitcoin mining can also be used to lower emissions. Bitcoin mining is being used to cut gas flaring that emits dangerous methane into the atmosphere. By stopping gas flares/venting and instead using that stranded and wasted energy to mine bitcoin, it both helps lower emissions that would've otherwise been put into the atmosphere while at the same time creating economic value instead of waste:

https://www.coindesk.com/energy-giant-equinor-to-cut-gas-flaring-with-bitcoin-mining-tie-up-report

You must also consider the alternative in discussions like these. The petrodollar is a far dirtier money than is bitcoin when it comes to emissions. This article is a good breakdown of the true costs of the petrodollar.

https://climatemoney.substack.com/p/carbon-cost-of-dollars

The same is true of gold. The emissions cost of gold mining is far more dirty than mining bitcoin (more than twice as dirty). Yet you don't see scapegoating and harassing of those people who choose to hold gold in their portfolio. So any portion of these markets that bitcoin siphones away will be a net-win when it comes to emissions costs. The financial industry as a whole uses vastly more sums of energy than does bitcoin mining. Considering the fact that bitcoin and currency in general tend to be a zero-sum game (you can only hold value in one at any given time), then it stands to reason that whatever value bitcoin siphons away from these other far dirtier commodities and systems, then the greener as a whole we'll be.

That isn't to say there are environmental costs with bitcoin mining. E-waste, as with any digital industry is a big concern. Thankfully, the lifecycle of ASIC mining equipment has been getting longer and longer lately, but e-waste is still a big concern in this process.

In the end, almost everything we do consumes energy and I don't think it is a valuable argument to claim that some subjective uses are more valuable than others (Christmas lights anyone?). Millions around the world are finding value in bitcoin as it helps them escape strangleholds place on them by authoritarian regimes and fiat's borders. Who am I to judge differently the value in that without being in their shoes? What we should instead really be focused on is cleaning up our energy grid, getting rid of dirty subsidies, and putting a price on carbon.

mjr

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Re: Bitcoin is funny money
« Reply #414 on: March 04, 2021, 04:10:22 PM »
A segue from "bitcoin isn't inherently dirty" to "we need to decarbonise our electricity grid" is a hell of a stretch and shows ideological thinking.

Bitcoin is explicity by design very wasteful of energy that could be used on more productive uses.  End of story, there's no getting around that.  Clean energy and climate change issues don't come into it.  Someone who delights in virtue-signalling (I drive an electric vehicle (2014 Nissan Leaf), I am a vegan, my wife and I have decided to have 1 child primarily because of the environmental costs of more, I live frugally and avoid frivolous purchases, and live in a 1000sqft house) should be right onto that waste as an issue.

Comparing power requirements of bitcoin mining for the infintesmal fraction of the population that uses it to all the dryers used in the US is also nonsensical.

Ridiculously slow transaction rates make bitcoin a non-starter.  Add energy use, its volatility, its complexity, its use by criminals and fraudsters and the fact that no government will let any significant part of its economy take place on a pseudonymous platform, let alone KYC/AML restrictions and one must conclude that bitcoin is just another speculative bubble that will ultimately go nowhere.

lifeanon269

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Re: Bitcoin is funny money
« Reply #415 on: March 04, 2021, 08:14:58 PM »
A segue from "bitcoin isn't inherently dirty" to "we need to decarbonise our electricity grid" is a hell of a stretch and shows ideological thinking.

It isn't ideological thinking. Those two things (bitcoin isn't inherently dirty and we need to decarbonize) are not exclusive of each other. In fact, there just facts and were simply stated as such. Not sure how facts are ideological now. If something just uses electricity, that doesn't make it inherently dirty, so long as you can source your electricity cleanly. And yes, we need to decarbonize our energy grid and by doing that, bitcoin becomes cleaner. I even shared with you Cambridge's data that plainly showed that bitcoin is incentivized to use clean renewable energy over other sources. Name another industry that can say that.

Bitcoin is explicity by design very wasteful of energy that could be used on more productive uses.  End of story, there's no getting around that.

This is purely a subjective statement spoken from privilege. There is no getting around that. There are a lot of people using bitcoin around the world where it is solving real problems for them with no other possible solutions available. A lot of things use way more energy for way less human value in this world.

https://youtu.be/xLYYh4aPXAM

Someone who delights in virtue-signalling (I drive an electric vehicle (2014 Nissan Leaf), I am a vegan, my wife and I have decided to have 1 child primarily because of the environmental costs of more, I live frugally and avoid frivolous purchases, and live in a 1000sqft house) should be right onto that waste as an issue.

It isn't virtue signaling if you're actually doing those things. Seems like someone likes to throw around buzzwords without actually understanding them:

'The term virtue signaling is often used to accuse someone of trying to win praise for showing support for a social cause without actually doing anything meaningful to advance it.'

Comparing power requirements of bitcoin mining for the infintesmal fraction of the population that uses it to all the dryers used in the US is also nonsensical.

There are over 100 million people using it in the world and growing rapidly (faster than the internet did). Also, bitcoin's power usage doesn't scale based on how many users there are.

Ridiculously slow transaction rates make bitcoin a non-starter.  Add energy use, its volatility, its complexity, its use by criminals and fraudsters and the fact that no government will let any significant part of its economy take place on a pseudonymous platform, let alone KYC/AML restrictions and one must conclude that bitcoin is just another speculative bubble that will ultimately go nowhere.

It is almost like you didn't even read the post I wrote. My Raspberry Pi can process thousands of transactions with bitcoin for a fraction of the power usage used in datacenters today. I suggest you read and understand the technology more.

Also, bitcoin isn't used for illicit activity much. 0.34% of bitcoin use in 2020 was for criminal activity:

https://www.forbes.com/sites/haileylennon/2021/01/19/the-false-narrative-of-bitcoins-role-in-illicit-activity/

Bitcoin isn't going to replace the US dollar, nor does it need to to succeed. It also isn't going to be banned by the US. In fact, quite the opposite is taking place. You have municipalities putting bitcoin on their balance sheets. You have politicians in Congress on both sides of the party promoting bitcoin now. You now have bitcoin and blockchain proponents in the SEC, the CFTC and the OCC. Bitcoin and the US dollar (and US government) will get along just fine. You say it is a speculative bubble and yet bubbles usually don't keep coming back like bitcoin has. Perhaps the market is seeing something that you aren't (it's clear you haven't researched much about it)?

SuperSecretName

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Re: Bitcoin is funny money
« Reply #416 on: March 05, 2021, 07:15:33 AM »
1)Ridiculously slow transaction rates make bitcoin a non-starter.  2)Add energy use, 3)its volatility, 4)its complexity, 5)its use by criminals and fraudsters and the fact that 6)no government will let any significant part of its economy take place on a pseudonymous platform, 7)let alone KYC/AML restrictions and one must conclude that bitcoin is just another speculative 8)bubble that will ultimately go nowhere.
Added numbers:
1 - Feature, not a bug.  It's not meant to buy a cup of coffee.  It's a reserve asset, store of value.  The market has decided it likes this, given bitcoin's dominance
2 - This is overblown.  A good amount comes from renewables or stranded energy.  But, maybe the whole world should go without AC? or washing machines?  People spend money and energy on things they find valuable.  But if this is the last and best argument against, bitcoin has won.
3 - Volatility is decreasing over time.  How else do you go from 0 to trillions of dollars.  Buy and hold and volatility doesn't matter
4 - There are simple solutions.  Buy on coinbase, paypal, square etc...  It doesn't have to be complicated if you don't want it to be.  But for those that do, this is a feature as it lets you take control.
5- Just not true anymore.  And have you heard about this thing called the US Dollar? 
6 - It doesn't have to "let".  How is it going to stop it?  It can't.  Coinbase is going to IPO at 100 billion.  Wyoming and Miami are courting the crypto crowd.  It's capitalism at it's finest.  If bitcoin is a better product then it should win.
7 - KYC/AML is fine, and directly contradicts points #6.  If you want to buy on a US exchange, you need to do KYC/AML.  Not even sure what this point is about though.
8 - It's already gotten to 1 Trillion.  There is now lending and borrowing.  Companies are spending billions.  It already is somewhere.

GuitarStv

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Re: Bitcoin is funny money
« Reply #417 on: March 05, 2021, 07:40:00 AM »
6 - It doesn't have to "let".  How is it going to stop it?  It can't.  Coinbase is going to IPO at 100 billion.  Wyoming and Miami are courting the crypto crowd.  It's capitalism at it's finest.  If bitcoin is a better product then it should win.

There has been a lot of comparison between bitcoin and gold.  Does anyone else remember when the US government made it illegal to own gold for a thirty odd year period with the Gold Reserve Act?  It seems to me that if congress decides they don't like Bitcoin, a similar law could pretty easily be passed.  This law was tested and upheld by the Supreme Court, so there's legal precedent on it's side.

SuperSecretName

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Re: Bitcoin is funny money
« Reply #418 on: March 05, 2021, 07:52:37 AM »
6 - It doesn't have to "let".  How is it going to stop it?  It can't.  Coinbase is going to IPO at 100 billion.  Wyoming and Miami are courting the crypto crowd.  It's capitalism at it's finest.  If bitcoin is a better product then it should win.

There has been a lot of comparison between bitcoin and gold.  Does anyone else remember when the US government made it illegal to own gold for a thirty odd year period with the Gold Reserve Act?  It seems to me that if congress decides they don't like Bitcoin, a similar law could pretty easily be passed.  This law was tested and upheld by the Supreme Court, so there's legal precedent on it's side.
I don't know about easily.  Congress isn't able to get much of anything done.

If that were to happen, it would mean that bitcoin was so powerful and "right" that the US tried to stop it.  Value would skyrocket.  There'd be no better use case as to prove it's point as why it was needed.  There would be a massive tech brain drain as people left the country.  That would really be the beginning of the end. 

GuitarStv

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Re: Bitcoin is funny money
« Reply #419 on: March 05, 2021, 08:10:30 AM »
6 - It doesn't have to "let".  How is it going to stop it?  It can't.  Coinbase is going to IPO at 100 billion.  Wyoming and Miami are courting the crypto crowd.  It's capitalism at it's finest.  If bitcoin is a better product then it should win.

There has been a lot of comparison between bitcoin and gold.  Does anyone else remember when the US government made it illegal to own gold for a thirty odd year period with the Gold Reserve Act?  It seems to me that if congress decides they don't like Bitcoin, a similar law could pretty easily be passed.  This law was tested and upheld by the Supreme Court, so there's legal precedent on it's side.
I don't know about easily.  Congress isn't able to get much of anything done.

If that were to happen, it would mean that bitcoin was so powerful and "right" that the US tried to stop it.  Value would skyrocket.  There'd be no better use case as to prove it's point as why it was needed.  There would be a massive tech brain drain as people left the country.  That would really be the beginning of the end.

I'm not sure that enough people in tech care about bitcoin to take the principle (and quite costly) step of abandoning their country over this.  Certainly you didn't see any kind of mass exodus when gold was made illegal to own.

I'm one of those tech workers who doesn't really care about bitcoin so doesn't have a dog in this fight.  My point was simply that yes, the government can pretty easily stop bitcoin if it became a real concern.  (It's not at the moment.)


crimp

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Re: Bitcoin is funny money
« Reply #421 on: March 05, 2021, 10:17:13 AM »
6 - It doesn't have to "let".  How is it going to stop it?  It can't.  Coinbase is going to IPO at 100 billion.  Wyoming and Miami are courting the crypto crowd.  It's capitalism at it's finest.  If bitcoin is a better product then it should win.

There has been a lot of comparison between bitcoin and gold.  Does anyone else remember when the US government made it illegal to own gold for a thirty odd year period with the Gold Reserve Act?  It seems to me that if congress decides they don't like Bitcoin, a similar law could pretty easily be passed.  This law was tested and upheld by the Supreme Court, so there's legal precedent on it's side.

I made a brief comment on this up thread, and I believe you're spot on that this is a risk. Assuming that
1) QE / MMT oversteps and leads to inflation, which isn't a foregone conclusion
2) BTC is adopted broadly and proves successful as a hedge against inflation

I wouldn't be that surprised to see the US implement similar legislation forcing BTC underground in order to push investors into poorer investment vehicles. If it were made illegal to possess BTC, and suddenly the public ledger becomes a threat to your liberty, you may start wishing you'd adopted ZCash or Monero or some other currency equipped with cryptography better designed to help you hide your transactions. Even if that doesn't happen in the US, it's certainly reasonable to expect that India and Nigeria won't be the last countries to outlaw or consider outlawing BTC.

lifeanon269

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Re: Bitcoin is funny money
« Reply #422 on: March 05, 2021, 01:04:29 PM »
Ignoring the fact that it seems like (at the moment) there are people from both sides of the aisle (I can name more than half a dozen on each the left and right) in Congress that are in support of bitcoin, I just don't see there being a major push to implement a major ban of bitcoin at any point. Bitcoin is also quickly becoming too big to ban. You have large institutions buying bitcoin as part of their treasuries. The political climate in the US skews toward inaction until further inaction is absolutely impossible. So I don't see there being any preemptive ban of bitcoin in that regard.

The most I see happening is the US taking actions to make sure it can fit nicely into our existing economy and regulatory frameworks. Much to that extent we're already there; bitcoin exchanges today already comply with most of the same KYC/AML regulations that are followed by traditional financial institutions.

As far as the comparison to gold goes, the only way the US was capable of enacting Executive Order 6102 and not have it get thrown out in courts was through a buyback. They paid all gold holders at a rate of $20.67 per troy ounce. Do you really think the US could pay bitcoin holders at a market rate to turn in their bitcoin? Also, you have to take into account the economic climate at the time. We were recovering from the Great Depression. There was a massive tightening of monetary policy just coming out of the Great Depression and the government, being tied to the gold standard, had to find a way to inflate the monetary supply. In other words, they were trying to cause inflation. The revaluation of gold that came about from this EO by pricing gold at $35 played a large role in devaluing the US dollar and increasing inflation. If bitcoin is a hedge against inflation and the US is currently in a cycle of money printing and expanding monetary policy, then a bitcoin buyback program (like EO 6102) is the exact opposite of what they would want to try and accomplish. Buying back massive amounts of bitcoin from its citizens would further exacerbate US dollar inflation by infusing the economy with more US dollars and further devaluing it. It would be direct cash infusion to US citizens that would directly result in further inflation, especially if in this scenario the US is already seeing large inflation rates. This is why the comparison to gold with the EO 6102 is in complete contradiction to what would need to happen for a similar buyback with bitcoin today.

Finally, how does the US ban bitcoin exactly? It is just information on the internet at the end of the day. In China, one of the most authoritarian nations in the world, has banned any financial institution from handling or transacting in bitcoin. This means any bitcoin activity taking place in China is strictly ad hoc peer to peer transactions. Given that, the adoption rate of bitcoin in China is currently estimated at about 7%. What is the adoption rate of bitcoin here in the US without any such strict laws like that? It sits at an estimated 6%. So if bitcoin adoption is actually at a higher rate in a country that has much stricter legal frameworks in place against bitcoin, why do we think that the US is capable of implementing some kind of ban that would have any meaningful impact on bitcoin? There are no bitcoin exchanges in China and yet they have more adoption there than in the US.

In the end, I just don't see the US being both politically motivated against bitcoin nor being politically capable of enacting a bitcoin ban. It's just not happening.

EDIT:

Just wanted to add some additional info in regards to banning bitcoin. Here is what bitcoin volume looks like in Egypt where bitcoin was "banned" in 2018:

https://twitter.com/DocumentingBTC/status/1367889933806014468?s=20


This isn't just anecdotal to Egypt or China either. If you look at adoption rates in just about any country regardless of the legality of bitcoin, you'll see increasing adoption. It is just that if bitcoin was "banned", that adoption moves to peer to peer platforms instead.

https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_country_or_territory
« Last Edit: March 05, 2021, 01:15:23 PM by lifeanon269 »

Telecaster

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Re: Bitcoin is funny money
« Reply #423 on: March 05, 2021, 05:06:08 PM »
There has been a lot of comparison between bitcoin and gold.  Does anyone else remember when the US government made it illegal to own gold for a thirty odd year period with the Gold Reserve Act?  It seems to me that if congress decides they don't like Bitcoin, a similar law could pretty easily be passed.  This law was tested and upheld by the Supreme Court, so there's legal precedent on it's side.

I would be surprised to see BTC banned.  Americans were prohibited from owning gold because the dollar backed by gold, and the Federal Reserve was running up on a hard limit on the number of dollars that could be issued.  They needed gold, in other words.   The Federal Reserve doesn't need BTC. 

Some people (not anyone specifically in this thread) suggest that BTC is a threat to the USD.  It isn't.  By law wages and taxes must be paid in USD, and most countries I'm aware have similar laws that taxes and wages must be paid in legal tender.   Even if a business was doing all of its transactions in BTC, you'd still have sell it to buy dollars.  So I don't see any issues there. 



MustacheAndaHalf

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Re: Bitcoin is funny money
« Reply #424 on: March 05, 2021, 10:37:03 PM »
You provided only one example of a condition you consider similar (a 5x move). A condition I refuted with 2 examples that directly counter your claim.
...
You're making a claim that I said bitcoin "must" follow a certain path, and yet what you just quoted me as saying doesn't have the word "must" in there anywhere. This is where you are putting words in my mouth.
...
I am simply providing two examples that directly refute your claim that a 5x move is a condition that signals a crash is imminent. That was your original statement. You only provided the one condition as an example of your "similar conditions". So I simply provided two examples that disprove your claim. I NEVER said that it "must" follow those paths as you repeatedly claim I said and you repeatedly fail to quote me as saying.
...
Also, as I bolded in the above quote, you again are claiming that I said the price "must" follow a certain path and you have yet to quote me where I said that. I said "IF" it does, then that is how large of a move it would be from today's price. Thus, that directly refutes your claim that because bitcoin moved 5x to where it is now, then that indicates a crash is coming.

"A condition I refuted with 2 examples ..."
"... providing two examples that directly refute your claim ..."
"... two examples that disprove your claim ..."
"... directly refutes your claim ..."

https://www.merriam-webster.com/dictionary/refute
To "refute" is "to prove wrong by argument or evidence"

You claim to "refute" and "disprove" my example, but when I talk about what "must" be true, you say I'm wrong to use that word.  How can you refute or disprove with optional examples?

Either your examples must be true, or mine must be true - or you can't use the word "refute" or "disprove".  You're using the wrong words repeatedly, or you're wrong to pick on my use of the word "must".

celerystalks

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Re: Bitcoin is funny money
« Reply #425 on: March 06, 2021, 06:01:58 AM »
There has been a lot of comparison between bitcoin and gold.  Does anyone else remember when the US government made it illegal to own gold for a thirty odd year period with the Gold Reserve Act?  It seems to me that if congress decides they don't like Bitcoin, a similar law could pretty easily be passed.  This law was tested and upheld by the Supreme Court, so there's legal precedent on it's side.

I would be surprised to see BTC banned.  Americans were prohibited from owning gold because the dollar backed by gold, and the Federal Reserve was running up on a hard limit on the number of dollars that could be issued.  They needed gold, in other words.   The Federal Reserve doesn't need BTC. 

Some people (not anyone specifically in this thread) suggest that BTC is a threat to the USD.  It isn't.  By law wages and taxes must be paid in USD, and most countries I'm aware have similar laws that taxes and wages must be paid in legal tender.   Even if a business was doing all of its transactions in BTC, you'd still have sell it to buy dollars.  So I don't see any issues there.

Banning bitcoin is easier to justify. Because once it is banned nothing will change economically.  It will just eliminate a large fertile field for financial crimes.

onecoolcat

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Re: Bitcoin is funny money
« Reply #426 on: March 06, 2021, 04:17:01 PM »
I could be wrong but it looks to me like Bitcoin is primed for is next big run-up.

Ockhamist

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Re: Bitcoin is funny money
« Reply #427 on: March 07, 2021, 08:30:34 AM »
There has been a lot of comparison between bitcoin and gold.  Does anyone else remember when the US government made it illegal to own gold for a thirty odd year period with the Gold Reserve Act?  It seems to me that if congress decides they don't like Bitcoin, a similar law could pretty easily be passed.  This law was tested and upheld by the Supreme Court, so there's legal precedent on it's side.

I would be surprised to see BTC banned.  Americans were prohibited from owning gold because the dollar backed by gold, and the Federal Reserve was running up on a hard limit on the number of dollars that could be issued.  They needed gold, in other words.   The Federal Reserve doesn't need BTC. 

Some people (not anyone specifically in this thread) suggest that BTC is a threat to the USD.  It isn't.  By law wages and taxes must be paid in USD, and most countries I'm aware have similar laws that taxes and wages must be paid in legal tender.   Even if a business was doing all of its transactions in BTC, you'd still have sell it to buy dollars.  So I don't see any issues there.

I also don't expect it to be banned, but I do think the whole money-laundering issue will need to be addressed.  I would expect that would be handled with something short of an actual ban though. 

It's a completely different situation than gold.  Gold backed the currency. Bitcoin doesn't. The US paid off gold owners in dollars, in large part because they wanted the gold. But there's no reason why they would have to do that if they banned bitcoin. Just give people a couple months to sell it before the ban goes into effect.

JetBlast

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Re: Bitcoin is funny money
« Reply #428 on: March 07, 2021, 11:21:31 AM »
If something just uses electricity, that doesn't make it inherently dirty, so long as you can source your electricity cleanly. And yes, we need to decarbonize our energy grid and by doing that, bitcoin becomes cleaner.
And what of the infrastructure needed to create that clean energy?  The materials needed to make wind turbines and solar panels have to come from somewhere, as do the materials for transmission infrastructure.  There's environmental impact as well from clearing large areas of land for utility scale solar or wind installation.  You seem to be completely ignoring all the environmental costs that an expanded "clean" grid to power blockchain would entail. 

lifeanon269

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Re: Bitcoin is funny money
« Reply #429 on: March 07, 2021, 02:28:29 PM »
If something just uses electricity, that doesn't make it inherently dirty, so long as you can source your electricity cleanly. And yes, we need to decarbonize our energy grid and by doing that, bitcoin becomes cleaner.
And what of the infrastructure needed to create that clean energy?  The materials needed to make wind turbines and solar panels have to come from somewhere, as do the materials for transmission infrastructure.  There's environmental impact as well from clearing large areas of land for utility scale solar or wind installation.  You seem to be completely ignoring all the environmental costs that an expanded "clean" grid to power blockchain would entail.

I'm not ignoring that at all. People rode horses while they worked on building cars. They worked by candle light while inventing the light bulb. They used iron while they developed stronger steel. I'm not ignoring the inherent costs that are required to develop a cleaner energy grid. That shouldn't stop us from developing a clean and renewable energy grid.

The part that I believe you're missing is that, for the most part, bitcoin's energy use does not compete with energy usage in our daily lives. If energy is being used in a market for our daily household, commercial, and industrial needs, that energy will cost much higher than the stranded/wasted energy around the globe. Because bitcoin's is competitive on that global scale, only the energy that is stranded/wasted is the energy that is competitive enough to be economical for bitcoin mining (due to the adjusting difficulty level). This will actually help drive larger scale renewable energy and see immediate cost benefits that wouldn't otherwise be seen until years later. You don't build power production for today's needs, you build it for tomorrow's needs. So in the meantime, bitcoin can be used to economize that energy while the market builds around it.

Think of the global energy market as a topographical map. Bitcoin fills in the deep troughs of cheap energy around the world, but it rarely overflows into markets that already have competitive energy needs simply because there is nothing else in the world that can arbitrage those energy troughs around the world.

celerystalks

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Re: Bitcoin is funny money
« Reply #430 on: March 07, 2021, 04:23:45 PM »
If something just uses electricity, that doesn't make it inherently dirty, so long as you can source your electricity cleanly. And yes, we need to decarbonize our energy grid and by doing that, bitcoin becomes cleaner.
And what of the infrastructure needed to create that clean energy?  The materials needed to make wind turbines and solar panels have to come from somewhere, as do the materials for transmission infrastructure.  There's environmental impact as well from clearing large areas of land for utility scale solar or wind installation.  You seem to be completely ignoring all the environmental costs that an expanded "clean" grid to power blockchain would entail.

I'm not ignoring that at all. People rode horses while they worked on building cars. They worked by candle light while inventing the light bulb. They used iron while they developed stronger steel. I'm not ignoring the inherent costs that are required to develop a cleaner energy grid. That shouldn't stop us from developing a clean and renewable energy grid.

The part that I believe you're missing is that, for the most part, bitcoin's energy use does not compete with energy usage in our daily lives. If energy is being used in a market for our daily household, commercial, and industrial needs, that energy will cost much higher than the stranded/wasted energy around the globe. Because bitcoin's is competitive on that global scale, only the energy that is stranded/wasted is the energy that is competitive enough to be economical for bitcoin mining (due to the adjusting difficulty level). This will actually help drive larger scale renewable energy and see immediate cost benefits that wouldn't otherwise be seen until years later. You don't build power production for today's needs, you build it for tomorrow's needs. So in the meantime, bitcoin can be used to economize that energy while the market builds around it.

Think of the global energy market as a topographical map. Bitcoin fills in the deep troughs of cheap energy around the world, but it rarely overflows into markets that already have competitive energy needs simply because there is nothing else in the world that can arbitrage those energy troughs around the world.

Um. No. This is just nonsense. Bitcoin mining uses a tremendous amount of real energy. This drives up the cost of energy for everything else because it increases demand in view of a scarce supply.  It’s not just mopping up unused scraps of energy in regions where it would otherwise go to waste, so to speak. This is because there is a level of fungibility and transportability to fuel.




lifeanon269

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Re: Bitcoin is funny money
« Reply #431 on: March 07, 2021, 04:53:37 PM »
Um. No. This is just nonsense. Bitcoin mining uses a tremendous amount of real energy. This drives up the cost of energy for everything else because it increases demand in view of a scarce supply.  It’s not just mopping up unused scraps of energy in regions where it would otherwise go to waste, so to speak. This is because there is a level of fungibility and transportability to fuel.

This is exactly what is happening. Bitcoin isn't economical in areas that have other uses and competition for that energy. This is coming from someone with experience in bitcoin mining. It just isn't cost effective to mine bitcoin in a market with other energy demands (like your house). It isn't economical to mine bitcoin in areas that have competition for that energy because the competition in bitcoin mining is global while energy markets are restricted regionally. If there is electricity available that is cheap enough to mine bitcoin with, it is because there is a greater supply of electricity available than what the demand is. There is where bitcoin mining concentrates globally. It's basic economics, that's not even controversial. Bitcoin mining runs on incredibly slim margins.

Electricity is not transportable, it doesn't matter whether the fuel is or not. Why would the fungibility of fuel make any difference here? That doesn't come into play here. If you're transporting the fuel to an electricity market that has demand, then the cost of that electricity will make mining bitcoin economically prohibitive. You can't transport that electricity elsewhere. There is no market arbitrage for electricity. Furthermore, if there is an electricity market that doesn't have demand, it will be cheap and you can't transport it elsewhere and this is where bitcoin mining generally takes place.

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Re: Bitcoin is funny money
« Reply #432 on: March 07, 2021, 05:59:20 PM »
The part that I believe you're missing is that, for the most part, bitcoin's energy use does not compete with energy usage in our daily lives.

This statement is not true, at least not in Washington State and neighboring states. 

Beginning in the 1930s a number of dams were constructed in the Columbia basin by BPA and various utility districts and bonds to finance those dams were paid off decades ago.  The result is the cheapest power in the United States.  Some of the power was used locally for things like aluminum production and agriculture (refrigeration, mostly) but most of it was exported to other areas, primarily California.   Revenue from sales of surplus power have kept rates extremely cheap for local ratepayers. 

In recent years, new industries have moved into the area attracted by cheap power, notably bitcoin mining.  Public utility districts are required by law to provide service to customers in the district and the new demand has been equal to the existing demand.  Which is to say doubled.  The result has been that local utility districts have had to cancel power supply contracts to other utilities, which results in higher prices for those customers as well as less revenue for the Columbia Basin utility districts.    Additionally, a wave of bitcoin miner bankruptcies in 2019 resulted in local utility districts holding the bag for power service upgrades for miner customers who wound up not buying the agreed power that was supposed to pay for the upgrades.   Those costs also get passed along to the retail customer. 

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Re: Bitcoin is funny money
« Reply #433 on: March 07, 2021, 06:09:14 PM »
The part that I believe you're missing is that, for the most part, bitcoin's energy use does not compete with energy usage in our daily lives.

This statement is not true, at least not in Washington State and neighboring states. 

Beginning in the 1930s a number of dams were constructed in the Columbia basin by BPA and various utility districts and bonds to finance those dams were paid off decades ago.  The result is the cheapest power in the United States.  Some of the power was used locally for things like aluminum production and agriculture (refrigeration, mostly) but most of it was exported to other areas, primarily California.   Revenue from sales of surplus power have kept rates extremely cheap for local ratepayers. 

In recent years, new industries have moved into the area attracted by cheap power, notably bitcoin mining.  Public utility districts are required by law to provide service to customers in the district and the new demand has been equal to the existing demand.  Which is to say doubled.  The result has been that local utility districts have had to cancel power supply contracts to other utilities, which results in higher prices for those customers as well as less revenue for the Columbia Basin utility districts.    Additionally, a wave of bitcoin miner bankruptcies in 2019 resulted in local utility districts holding the bag for power service upgrades for miner customers who wound up not buying the agreed power that was supposed to pay for the upgrades.   Those costs also get passed along to the retail customer.

That's why I said "for the most part" when typing that sentence, I went back and specifically added "for the most part" because there were a few scenarios that I could think of where that wasn't exactly the case. For example, there is another region in upstate NY that saw their electricity prices rise with increased mining demand.

https://www.govtech.com/fs/In-Upstate-New-York-the-Bitcoin-Mining-Rush-Has-Gone-Bust.html

But these places all have one thing in common...abundant low cost electricity due to an oversupply in the region (and it is almost always renewable energy). If you don't have an oversupply of electricity in the region, you're just not going to see bitcoin mining move into the market and start driving up prices of electricity for existing consumers. That's just not how the bitcoin mining market works (because it is globally competitive). That was ultimately the point I was trying to make.

lifeanon269

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Re: Bitcoin is funny money
« Reply #434 on: March 08, 2021, 03:02:54 PM »
Norwegian billionaire Kjell Inge Røkke and conglomerate Aker ASA have set up a new unit call Seetee that will seek to mine bitcoin sustainably. They also made a purchase of $58 million in bitcoin with plans to acquire more in the future. An excerpt from their statement letter:

"See­tee will establish mining op­er­ations that trans­fer strand­ed or in­ter­mit­tent elec­tric­i­ty with­out sta­ble de­mand lo­cal­ly—wind, so­lar, hy­dro pow­er— to eco­nom­ic as­sets that can be used any­where. Bit­coin is, in our eyes, a load-bal­anc­ing eco­nom­ic bat­tery, and bat­ter­ies are es­sen­tial to the ener­gy tran­si­tion re­quired to reach the tar­gets of the Paris Agreement. Our am­bi­tion is to be a valu­able part­ner in new re­new­able projects."

...It's almost as if what I said earlier were true...

https://www.seetee.io/static/shareholder_letter-6ae7e85717c28831bf1c0eca1d632722.pdf

lifeanon269

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Re: Bitcoin is funny money
« Reply #435 on: March 09, 2021, 11:22:23 AM »
Pretty cool announcement here:

https://www.coindesk.com/bitcoin-moon-lightning-network-visa-e-commerce-merchants

You can now use bitcoin's lightning network to instantly create one-time use VISA virtual cards for making purchases anywhere VISA is accepted without any fees.

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Re: Bitcoin is funny money
« Reply #436 on: March 09, 2021, 04:44:57 PM »
^ This seems like a step backwards, doesn't it? One of the features of Bitcoin is that you don't need a third party to complete the transaction.  This introduces two third parties; Moon and Visa. 

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Re: Bitcoin is funny money
« Reply #437 on: March 09, 2021, 05:16:16 PM »
The part that I believe you're missing is that, for the most part, bitcoin's energy use does not compete with energy usage in our daily lives.

This statement is not true, at least not in Washington State and neighboring states. 

Beginning in the 1930s a number of dams were constructed in the Columbia basin by BPA and various utility districts and bonds to finance those dams were paid off decades ago.  The result is the cheapest power in the United States.  Some of the power was used locally for things like aluminum production and agriculture (refrigeration, mostly) but most of it was exported to other areas, primarily California.   Revenue from sales of surplus power have kept rates extremely cheap for local ratepayers. 

In recent years, new industries have moved into the area attracted by cheap power, notably bitcoin mining.  Public utility districts are required by law to provide service to customers in the district and the new demand has been equal to the existing demand.  Which is to say doubled.  The result has been that local utility districts have had to cancel power supply contracts to other utilities, which results in higher prices for those customers as well as less revenue for the Columbia Basin utility districts.    Additionally, a wave of bitcoin miner bankruptcies in 2019 resulted in local utility districts holding the bag for power service upgrades for miner customers who wound up not buying the agreed power that was supposed to pay for the upgrades.   Those costs also get passed along to the retail customer.

That's why I said "for the most part" when typing that sentence, I went back and specifically added "for the most part" because there were a few scenarios that I could think of where that wasn't exactly the case. For example, there is another region in upstate NY that saw their electricity prices rise with increased mining demand.

https://www.govtech.com/fs/In-Upstate-New-York-the-Bitcoin-Mining-Rush-Has-Gone-Bust.html

But these places all have one thing in common...abundant low cost electricity due to an oversupply in the region (and it is almost always renewable energy). If you don't have an oversupply of electricity in the region, you're just not going to see bitcoin mining move into the market and start driving up prices of electricity for existing consumers. That's just not how the bitcoin mining market works (because it is globally competitive). That was ultimately the point I was trying to make.

I'm still reading this thread without a fixed BTC opinion re valuation, but on the energy issue, it seems obvious that BTC mining is gobbling energy and hurting the environment. Hydropower in Washington seems like an obvious example. Isn't that power that could have been sold the US's Western grid? Doesn't using it locally at cheap prices cause more expensive, less renewable energy to therefore be generated elsewhere?

Surely, wherever local pricing anomalies exist that create artificially cheap power, some fraction of users will respond by BTC mining. In such cases where the grid extends beyond the cheap zone, more expensive power is generated as a result. Some of that power is likely emitting carbon and worsening climate change. The argument that some of the cheap power used is green and impact is lower than some anti-BTC commenters claim seems plausible. But that's only a matter of degree. To imply that little or no carbon emissions are generated seems highly fanciful.
« Last Edit: March 09, 2021, 05:21:24 PM by BicycleB »

lifeanon269

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Re: Bitcoin is funny money
« Reply #438 on: March 09, 2021, 05:21:47 PM »
^ This seems like a step backwards, doesn't it? One of the features of Bitcoin is that you don't need a third party to complete the transaction.  This introduces two third parties; Moon and Visa.

Bitcoin gives us the opportunity to transact without third-parties being involved. Bitcoin's base layer is for large settlement transactions and isn't meant for everyday purchases like what this is to be used for. Lightning network allows for scaling of instant transactions with negligible fees, but that doesn't mean there won't necessarily be commercial third-parties seeking to provide additional value for those transactions. Maybe this is just a bridge toward no third-parties some day in the future even for every day transactions, but even if it isn't that's OK. Just like the base on-chain layer allows for the opportunity to opt-out of central banking, secondary layers like the Lightning network can allow for the opportunity to opt-out of third-party transaction companies too. These opt-out opportunities provide a check against monopolistic abuses that can come from them. But if a third-party company wants to provide transaction services that help scale using bitcoin as an open network to build from in the commercial world and they provide a useful service in the free-market, then I'm all for it. Just so long as I'm not forced to do so if I wish not to. I think that's bitcoin's ultimate goal; having the freedom of choice that doesn't exist today.

Another thing that shouldn't be understated here and might be missed is that the Lightning Network is an open network. That means that any other product or service that is built on this same open network immediately becomes a part of a growing network effect. Every new service built on the Lightning Network can thus interact with every other product and service built on the same. Unlike fragmented products and services like Venmo, CashApp, or PayPal that all have their own competing network effects, the Lightning Network will continue to add to its network effect and it is a service that any individual or company can build on. For example, Jack Mallers who founded LN_Strike (the service used by NFLers to get paid their salary in bitcoin), talks here about how LN_Strike's service, by being built on the Lightning Network, can now immediately also interact with Moon's announced service today:

https://twitter.com/JackMallers/status/1369434546291306497?s=20

This network effect will become more and more apparent as more services build and integrate on the open network that is the Lightning Network. It will become an open network that competing companies will want to integrate with as more commerce takes place there. It is an open and global monetary network that truly scales with instant settlement. As Jack Mallers said and as has been shown in history, open networks win.

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Re: Bitcoin is funny money
« Reply #439 on: March 09, 2021, 05:32:29 PM »
The part that I believe you're missing is that, for the most part, bitcoin's energy use does not compete with energy usage in our daily lives.

This statement is not true, at least not in Washington State and neighboring states. 

Beginning in the 1930s a number of dams were constructed in the Columbia basin by BPA and various utility districts and bonds to finance those dams were paid off decades ago.  The result is the cheapest power in the United States.  Some of the power was used locally for things like aluminum production and agriculture (refrigeration, mostly) but most of it was exported to other areas, primarily California.   Revenue from sales of surplus power have kept rates extremely cheap for local ratepayers. 

In recent years, new industries have moved into the area attracted by cheap power, notably bitcoin mining.  Public utility districts are required by law to provide service to customers in the district and the new demand has been equal to the existing demand.  Which is to say doubled.  The result has been that local utility districts have had to cancel power supply contracts to other utilities, which results in higher prices for those customers as well as less revenue for the Columbia Basin utility districts.    Additionally, a wave of bitcoin miner bankruptcies in 2019 resulted in local utility districts holding the bag for power service upgrades for miner customers who wound up not buying the agreed power that was supposed to pay for the upgrades.   Those costs also get passed along to the retail customer.

That's why I said "for the most part" when typing that sentence, I went back and specifically added "for the most part" because there were a few scenarios that I could think of where that wasn't exactly the case. For example, there is another region in upstate NY that saw their electricity prices rise with increased mining demand.

https://www.govtech.com/fs/In-Upstate-New-York-the-Bitcoin-Mining-Rush-Has-Gone-Bust.html

But these places all have one thing in common...abundant low cost electricity due to an oversupply in the region (and it is almost always renewable energy). If you don't have an oversupply of electricity in the region, you're just not going to see bitcoin mining move into the market and start driving up prices of electricity for existing consumers. That's just not how the bitcoin mining market works (because it is globally competitive). That was ultimately the point I was trying to make.

I'm still reading this thread without a fixed BTC opinion re valuation, but on the energy issue, it seems obvious that BTC mining is gobbling energy and hurting the environment. Hydropower in Washington seems like an obvious example. Isn't that power that could have been sold the US's Western grid? Doesn't using it locally at cheap prices cause more expensive, less renewable energy to therefore be generated elsewhere?

Surely, wherever local pricing anomalies exist that create artificially cheap power, some fraction of users will respond by BTC mining. In such cases where the grid extends beyond the cheap zone, more expensive power is generated as a result. Some of that power is likely emitting carbon and worsening climate change. The argument that some of the cheap power used is green and impact is lower than some anti-BTC commenters claim seems plausible. But that's only a matter of degree. To imply that little or no carbon emissions are generated seems highly fanciful.

Absolutely agree. And what am I really getting out of all that energy expenditure?
The ability to do transactions which I already do.

lifeanon269

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Re: Bitcoin is funny money
« Reply #440 on: March 09, 2021, 05:50:42 PM »
Isn't that power that could have been sold the US's Western grid? Doesn't using it locally at cheap prices cause more expensive, less renewable energy to therefore be generated elsewhere?

Not really. The entire reason why it is cheap is because there is more production of electricity than there is demand for it. If it could be "exported" to other areas where there is more demand for it, then the price wouldn't be so cheap. Because electricity can't be transported or stored easily, there is very little arbitrage that takes place in electricity markets. If the electricity is cheap, there is an oversupply in the area and thus mining bitcoin becomes one of the few means of taking that electricity and turning it into economic value that can be used in the economy elsewhere.

Surely, wherever local pricing anomalies exist that create artificially cheap power, some fraction of users will respond by BTC mining. In such cases where the grid extends beyond the cheap zone, more expensive power is generated as a result. Some of that power is likely emitting carbon and worsening climate change. The argument that some of the cheap power used is green and impact is lower than some anti-BTC commenters claim seems plausible. But that's only a matter of degree. To imply that little or no carbon emissions are generated seems highly fanciful.

I'm not sure what you mean by "the grid extends beyond the cheap zone". Electricity can only be transported so far over transmission lines before you start to receive significant loss and the power being delivered thus costs much greater. I tried to make it clear that there is a desperate need to clean our electric grid of fossil fuel production and get rid of especially dirty forms of generation such as coal. I never made the point that bitcoin's energy consumption has little to no impact on carbon emissions. That was not the point I was making. I was simply stating that pointing the finger and bitcoin when the finger should really be pointed at fossil fuels instead is a mistake (a mistake fossil fuel companies love to see). Nobody is without carbon sin and almost everything we do consume energy in some form. Scapegoating our uses of energy based on each own's personal subjectivity is a futile effort and not productive in the fight against a warming planet. For example, gold has a much higher carbon footprint and yet you never heard people saying don't invest in gold on these forums like you do about bitcoin now that it exists.

As I showed with the Cambridge study, 63% percent of bitcoin's energy consumption in the US comes from renewable sources even though the total renewable production percentage overall in the US is only 20%. That clearly shows an incentive for bitcoin to utilize greener energy. There aren't really any other industries that can make a claim of such powerful incentives to use renewable energy like that. As we continue to green our energy grid, bitcoin will continue to advance its usage of renewable power at a far greater pace than other industries without the use of offsets (that can often simply be an excuse to delay shifts to greener energy).

I'll end with the following excerpt from the Norwegian conglomerate Aker's whitepaper that was just released and it really sums it up nicely:

"If it's a bubble, it dies and it consumes nothing. If it's digital gold, it's more efficient and will emit much less than the asset it disrupts. And if it's really successful, it's because of demand from truly value creating applications that define our future and should be worth the electricity."

BicycleB

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Re: Bitcoin is funny money
« Reply #441 on: March 09, 2021, 08:32:53 PM »

Surely, wherever local pricing anomalies exist that create artificially cheap power, some fraction of users will respond by BTC mining. In such cases where the grid extends beyond the cheap zone, more expensive power is generated as a result. Some of that power is likely emitting carbon and worsening climate change. The argument that some of the cheap power used is green and impact is lower than some anti-BTC commenters claim seems plausible. But that's only a matter of degree. To imply that little or no carbon emissions are generated seems highly fanciful.

I'm not sure what you mean by "the grid extends beyond the cheap zone". Electricity can only be transported so far over transmission lines before you start to receive significant loss and the power being delivered thus costs much greater.

In most of the US, power is generated in one location and moved to another. It can be moved for load balancing reasons to assure physical stability, or for financial reasons within the physical contraints. There's a sort of layered grid connecting local power regions to a larger network (you can find many details reading about ISOs and RTOs https://en.wikipedia.org/wiki/Regional_transmission_organization_(North_America) ). Despite the power loss you describe, connections exist for shipping the power around, and a complex system of establishing payment for the power exists. Every decade or two financial scandals emerge from pricing oddities.

It can happen and apparently does that a local producer, for reasons that may involve political or regulatory approval, chooses to set a lower price for local users than they would charge to sell the power elsewhere, over and above the price difference which is caused by transmission losses and the many many other factors affecting the price at which power is sold onto the larger grid. The Washington example was described as doing exactly that - offering a locally preferential lowered price by some sort of preset rule rather than a purely market based system - if I read it correctly. In simple terms, it's a cheap zone, but it's not an island. If extra power is used locally, the rest of the grid doesn't have the extra power available, and thus must generate more power to fill customer needs.

It's possible that there are times when they have little extra power, times when they have lots of extra power, and their lowered prices pertain to the periods when there is so much extra power that it's difficult to sell. In that case, the point that such moments are a better time to mine BTC than other times is supported by the system. Perhaps that's part of what creates the statistic that 63% of BTC energy use renewable instead of the national 20%. Yet it's also possible that once low prices lured miners to the area, they often use renewable energy that would otherwise have been shipped elsewhere, forcing other locations to generate power using fossil fuels. In which case some of the power used in the 63% statistic wouldn't be renewable if viewed at the grid level.

Regardless of detail, even if 63% were renewable, doesn't that mean 37% is still heating the planet?
« Last Edit: March 09, 2021, 08:53:09 PM by BicycleB »

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Re: Bitcoin is funny money
« Reply #442 on: March 10, 2021, 12:46:39 AM »
Isn't that power that could have been sold the US's Western grid? Doesn't using it locally at cheap prices cause more expensive, less renewable energy to therefore be generated elsewhere?

Not really. The entire reason why it is cheap is because there is more production of electricity than there is demand for it. If it could be "exported" to other areas where there is more demand for it, then the price wouldn't be so cheap. Because electricity can't be transported or stored easily, there is very little arbitrage that takes place in electricity markets. If the electricity is cheap, there is an oversupply in the area and thus mining bitcoin becomes one of the few means of taking that electricity and turning it into economic value that can be used in the economy elsewhere.

You're ignoring the fact that cheap power is a really nice thing for residents of the area where it's available. There's economic value to being able to run my lights and computers and water heater cheaply because my city's hydroelectric dams provide an abundance of cheap energy. If our electric utility has more capacity than they need to serve the city, they can sell some at wholesale rates to other cities and states, paying part of the fixed cost of maintaining hydroelectric dams and thereby keeping retail rates low within the city. If Bitcoin miners swoop in to use up all the excess capacity and force the price upward, that's not a great outcome for the other electric customers in the area. Here in Seattle our electric rates have basically doubled in the past decade.

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Re: Bitcoin is funny money
« Reply #443 on: March 10, 2021, 01:38:02 AM »
You can now use bitcoin's lightning network to instantly create one-time use VISA virtual cards for making purchases anywhere VISA is accepted without any fees.
Time to buy VISA?

lifeanon269

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Re: Bitcoin is funny money
« Reply #444 on: March 10, 2021, 05:59:38 AM »
It seems like you both (seattlecyclone and BicycleB) are getting causality mixed up simply for the purpose of scapegoating bitcoin. The electricity markets exist in equilibrium long before bitcoin ever arrives. It doesn't matter whether energy is stranded because of physical transmission constraints or legal/regulatory constraints. That part is irrelevant. The point being is that electricity in a given market is cheap simply because there is an oversupply in the region. Saying that the electricity could be sold off elsewhere had it not been for bitcoin completely ignores the reality that bitcoin didn't exist in that market while those conditions still existed. If any supply can be sold off and therefore the electricity rates are no longer cheap in the area, then bitcoin mining would never be attracted to the area to begin with. Furthermore, electricity rates must continue to be cheap for the duration of mining (otherwise it becomes cost prohibitive).

Bitcoin mining requires cheap electricity and it determines what is and isn't cheap based on a global market for electricity, not a regional one. You're not going to see bitcoin move into an area of cheap electricity and drive up electricity prices to the point where they're not cheap any more because then that would defeat the purpose of mining bitcoin in that location. That's not to say that bitcoin mining won't increase prices in any given area where there are larger mining operations taking place. But to say that it is going to raise costs to the point where electricity isn't considered cheap anymore is a gross exaggeration and a misunderstanding of the economics of bitcoin mining.

Furthermore, bitcoin mining's energy use really only skyrocketed in 2017, going from about 8 TWh in mid-2017 to about 73 TWh in mid-2018. It has since plateaued with a peak in that time of no more than 77 TWh/yr with some significant dips here and there. Bitcoin's energy usage only spiked in 2017-2018, so even though bitcoin has been around for 12 years now, it's only been in the last 3-4 that energy use has grown. The claim that bitcoin mining will begin to consume all electricity (as some hyperbolic articles have claimed) is another misunderstanding of bitcoin mining economics. All bitcoin does is level out the costs of electricity in the electricity markets across the globe. If an area of once abundant electricity begins to see large amounts of population growth, that population growth (and thus demand for electricity) will drive out bitcoin mining naturally. In areas without additional demand, bitcoin mining will take place there, but only to a point where electricity costs are still cheap from a global standpoint. You're not ever going to see bitcoin push an electricity market to prices that would be considered expensive (or even average) from a global standpoint. If a location like Seattle has seen it's electricity prices double in 10 years, perhaps the finger should be pointed elsewhere... *cough*Amazon*cough*  Seems like you still have pretty dirt cheap prices though if you ask me.

https://www.eia.gov/electricity/monthly/epm_table_grapher.php?t=epmt_5_6_a

And yes, the portion of bitcoin mining that does use fossil fuels is heating the planet. That same goes for everything that uses electricity though. That's why we need a price on carbon and doing so would immediately push bitcoin mining to even more renewable power much faster than any other industry. What we can't have is governments continuing to give out subsidies for fossil fuels. Governments worldwide give out $4.5 trillion in fossil fuel subsidies each year. That's inexcusable in a world trying to fight climate change. But that's not a bitcoin problem and bitcoin shouldn't be scapegoated for it either. At the end of the day, it is the energy grid that needs to be cleaned, not bitcoin.

When it comes down to it, the reason why you guys are scapegoating bitcoin for its use of electricity (even though it is clearly incentivized to use renewables) is because you guys don't see value in bitcoin (see video I've posted numerous times from the HRF). It all really boils down to a subjectivity argument on what one believes is a valid use of electricity and what isn't. But from our place of privilege it can be easy to forget that while some are using cloths dryers in the arid western US to dry their cloths as opposed to hanging them up outside, there are many that are legitimately using bitcoin because they don't have an alternative. I'll leave again with this quote that says it succinctly:

"If it's a bubble, it dies and it consumes nothing. If it's digital gold, it's more efficient and will emit much less than the asset it disrupts. And if it's really successful, it's because of demand from truly value creating applications that define our future and should be worth the electricity."

Peaksandvalleys

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Re: Bitcoin is funny money
« Reply #445 on: March 10, 2021, 08:39:06 AM »
It seems like you both (seattlecyclone and BicycleB) are getting causality mixed up simply for the purpose of scapegoating bitcoin. The electricity markets exist in equilibrium long before bitcoin ever arrives. It doesn't matter whether energy is stranded because of physical transmission constraints or legal/regulatory constraints. That part is irrelevant. The point being is that electricity in a given market is cheap simply because there is an oversupply in the region. Saying that the electricity could be sold off elsewhere had it not been for bitcoin completely ignores the reality that bitcoin didn't exist in that market while those conditions still existed. If any supply can be sold off and therefore the electricity rates are no longer cheap in the area, then bitcoin mining would never be attracted to the area to begin with. Furthermore, electricity rates must continue to be cheap for the duration of mining (otherwise it becomes cost prohibitive).

Bitcoin mining requires cheap electricity and it determines what is and isn't cheap based on a global market for electricity, not a regional one. You're not going to see bitcoin move into an area of cheap electricity and drive up electricity prices to the point where they're not cheap any more because then that would defeat the purpose of mining bitcoin in that location. That's not to say that bitcoin mining won't increase prices in any given area where there are larger mining operations taking place. But to say that it is going to raise costs to the point where electricity isn't considered cheap anymore is a gross exaggeration and a misunderstanding of the economics of bitcoin mining.

Furthermore, bitcoin mining's energy use really only skyrocketed in 2017, going from about 8 TWh in mid-2017 to about 73 TWh in mid-2018. It has since plateaued with a peak in that time of no more than 77 TWh/yr with some significant dips here and there. Bitcoin's energy usage only spiked in 2017-2018, so even though bitcoin has been around for 12 years now, it's only been in the last 3-4 that energy use has grown. The claim that bitcoin mining will begin to consume all electricity (as some hyperbolic articles have claimed) is another misunderstanding of bitcoin mining economics. All bitcoin does is level out the costs of electricity in the electricity markets across the globe. If an area of once abundant electricity begins to see large amounts of population growth, that population growth (and thus demand for electricity) will drive out bitcoin mining naturally. In areas without additional demand, bitcoin mining will take place there, but only to a point where electricity costs are still cheap from a global standpoint. You're not ever going to see bitcoin push an electricity market to prices that would be considered expensive (or even average) from a global standpoint. If a location like Seattle has seen it's electricity prices double in 10 years, perhaps the finger should be pointed elsewhere... *cough*Amazon*cough*  Seems like you still have pretty dirt cheap prices though if you ask me.

https://www.eia.gov/electricity/monthly/epm_table_grapher.php?t=epmt_5_6_a

And yes, the portion of bitcoin mining that does use fossil fuels is heating the planet. That same goes for everything that uses electricity though. That's why we need a price on carbon and doing so would immediately push bitcoin mining to even more renewable power much faster than any other industry. What we can't have is governments continuing to give out subsidies for fossil fuels. Governments worldwide give out $4.5 trillion in fossil fuel subsidies each year. That's inexcusable in a world trying to fight climate change. But that's not a bitcoin problem and bitcoin shouldn't be scapegoated for it either. At the end of the day, it is the energy grid that needs to be cleaned, not bitcoin.

When it comes down to it, the reason why you guys are scapegoating bitcoin for its use of electricity (even though it is clearly incentivized to use renewables) is because you guys don't see value in bitcoin (see video I've posted numerous times from the HRF). It all really boils down to a subjectivity argument on what one believes is a valid use of electricity and what isn't. But from our place of privilege it can be easy to forget that while some are using cloths dryers in the arid western US to dry their cloths as opposed to hanging them up outside, there are many that are legitimately using bitcoin because they don't have an alternative. I'll leave again with this quote that says it succinctly:

"If it's a bubble, it dies and it consumes nothing. If it's digital gold, it's more efficient and will emit much less than the asset it disrupts. And if it's really successful, it's because of demand from truly value creating applications that define our future and should be worth the electricity."

The reason people care about the power use is because it is outrageous.
I'll repeat, what am I really getting out of all that energy expenditure?
The ability to do transactions which I already do. The ability to speculate. Yes I know, "no middle man" blah blah blah.
The majority of people involved in the cryptocurrency industry just want to get rich quick. You are NAIVE to believe otherwise. It is a greed driven sector just like many others. Im not going to applaud you for your willingness to look the other way regardless of your internal justification

lifeanon269

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Re: Bitcoin is funny money
« Reply #446 on: March 10, 2021, 08:59:45 AM »
The reason people care about the power use is because it is outrageous.
I'll repeat, what am I really getting out of all that energy expenditure?
The ability to do transactions which I already do. The ability to speculate. Yes I know, "no middle man" blah blah blah.
The majority of people involved in the cryptocurrency industry just want to get rich quick. You are NAIVE to believe otherwise. It is a greed driven sector just like many others. Im not going to applaud you for your willingness to look the other way regardless of your internal justification

So then where is your outrage over gold who's carbon footprint is a magnitude higher than what bitcoin's is? You're statements are spoken from a position of privilege living in a country that allows you access to services to conduct transactions as you wish. 53% percentage of the human population live under authoritarian rule. Having a global currency with no borders is worth the price of admission.

https://www.washingtonpost.com/news/democracy-post/wp/2017/02/13/why-the-rise-of-authoritarianism-is-a-global-catastrophe/

https://www.youtube.com/watch?v=xLYYh4aPXAM

No one is saying that speculation isn't taking place, so there is no naivety there. It's naive to think that a completely decentralized monetary network that was organically bootstrapped from nothing wouldn't have speculation involved. It is inherent to the system at this stage. But ignoring the good that can come from such a system that clearly people are valuing it for beyond just speculation is showing your privilege simply because the system you happened to be born into is working just fine for you. In this regard, its energy use isn't outrageous as I can name off countless energy expenditures around the world that make bitcoin's energy use look pale in comparison and don't provide humanity any benefit whatsoever. For example, always-on but inactive home devices in the USA alone consume almost twice as much electricity as bitcoin does globally. Bitcoin's energy use is criticized mostly because it is overt and fairly easily calculated.

Again, if bitcoin has no value, it will bust and thus no longer consumes anything. If it is merely a digital gold and siphons any portion of gold's market, then it is a net improvement as far as climate change is concerned. If it ends being successful beyond just a store of value then it becomes something truly valuable to humanity and its energy usage is indeed justified.

celerystalks

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Re: Bitcoin is funny money
« Reply #447 on: March 10, 2021, 10:03:37 AM »
Why is it that bitcoin needs an army of bullshit artists to give such a sales pitch all the time?

For that reason alone, people should avoid it.




Trevor Reznik

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Re: Bitcoin is funny money
« Reply #448 on: March 10, 2021, 10:15:03 AM »
Why is it that bitcoin needs an army of bullshit artists to give such a sales pitch all the time?

For that reason alone, people should avoid it.

Why is it that people that don't like bitcoin can never shut up about it?  Go and do something else LMAO.

celerystalks

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Re: Bitcoin is funny money
« Reply #449 on: March 10, 2021, 10:23:28 AM »
Why is it that bitcoin needs an army of bullshit artists to give such a sales pitch all the time?

For that reason alone, people should avoid it.

Why is it that people that don't like bitcoin can never shut up about it?  Go and do something else LMAO.

Why should I? The title of this thread is “Bitcoin is funny money”. I’m on topic. I am correct. No one has been able to satisfactorily answer my questions (because there are none. Bitcoin is worthless). So, I refuse to cede the ground.

If bitcoin proponents want to have a jircle cerk, why don’t they go somewhere else and  do it.