What do you think of adding a low% of crypto allocation

[FINate]

If you really want to understand the broader Bitcoiner view, read Saifedean Amous' The Bitcoin Standard, listen to The Saylor Series (at least episodes 1-13), read Jeff Booth's The Price of Tomorrow and his Finding Signal In A Noisy World article, read Lyn Alden's Broken Money. I would expect everyone here to find them interesting even if they disagree with them. At least you'll get to properly understand where a good many Bitcoiners are coming from.
It really is about much more than 'number go up' for many people. Unfortunately, it's just not possible to condense 3 books and a 20 hour discussion into a few pithy forum posts - especially against a barrage of determined opposition.

And please feel free to recommend some material I should look at to challenge my libertarian, hard money, etc. leanings. I'm genuinely interested. I've read quite a bit but I just don't get bigGov and MMT, etc. - it seems like total bullshit - but I'm more than happy to read more. I freely acknowledge that I could be wrong.

I have a CS degree, worked in BigTech for 2 decades, have spent a fair amount of time with encryption technology generally, and have read various crypto whitepapers. Honestly, I'm not going to spent a bunch of time reading more about BTC.

If you're serious about challenging your hard money leanings, then I would suggest A Monetary History of the United States, 1867-1960. Not easy reading, took me quite some time to work through it, but it goes into granular detail on how hard money contributed to multiple economic depressions until the Federal Reserve was created and then learned how to manage the supply of money. 

[LateStarter]

Hilarious.

You're still imagining me showing up with nothing but the clothes on my back (hopefully) and a seed-phrase in my head, and no other forward-planning whatsoever.
Meanwhile, you've spent significant time and energy buying foreign real estate and arranging and funding foreign bank accounts.
It's apples and oranges through and through - and it's laughable.

And, regardless of all the above, your foreign bank accounts and foreign real estate are almost certainly more traceable than my Bitcoin, and waaaaay less mobile. If I'm screwed, we're all screwed.

Not sure what part about "This happened" (Not the I put it all in crypto part, or at least that wasn't mentioned by those in this situation.)  you don't get.  But ok.   Hilarious.

Also, Panama Papers.  Look it up.  Quite intriguing read imo.   Either way, I'll stick to what I have.  Some small percent for gambling and if I feel I need to run...  Crypto won't be my saving grace, as it's not.

What am I supposed to do with a vague reference to "This happened". It's not even clear what's supposed to have happened - it certainly wasn't supported by any context or detail or evidence, etc.

I've read several reports in recent years about people escaping from Syria and, more recently, Ukraine with Bitcoin . . . So what, it's just hearsay unless I unearth and share some good evidence.

Rest assured, I have no plans to flee anywhere. I have no expectation of needing a 'saving grace'. This is waaaaay down on my personal list of concerns and Bitcoin use cases.
I didn't initiate this discussion to champion Bitcoin as the perfect fleeing vehicle. I was simply responding to FINate's claim that Bitcoin was useless in a fleeing scenario.

I'll be honest, it's been what 4 years since all that.   I'd try to dig up the stories but, really don't care to, especially given the time passage.  Hearsay, sure.   For those more recent ones you've read, that is fleeing war, I assume, more so then tyrants. Though the difference is probably fleeting at best.   I am certain someone HAS run with btc in their stash, though I doubt it was new wallet under duress.  But I am also certain that many of them didn't do such a thing.  Who came out ahead.  Probably none of the refugees who didn't already have something set up before hand.

Either way, it IS useless more often to not in a fleeing scenario, there will always an exception, cause humanity is.... weird.  (In a good way!)

Nothing here has persuaded me AT ALL that Bitcoin is useless in a fleeing scenario.

Again, if I've got time enough to prepare by buying foreign real estate and setting up and funding foreign bank accounts, I've got PLENTY of time to find to some non-KYC Bitcoin, memorise my seed-phrase, and do some mixing or whatever and set something up at my intended destination if I thought it necessary.

And again, if time is very short, and "they" are breathing down my neck, I have virtually ZERO chance of quickly and discreetly buying foreign real estate or setting up and funding foreign bank accounts. I have at least some chance of taking my Bitcoin with me.

I guess we'll have to agree to disagree because this is going nowhere. Out.

[LateStarter]

If you really want to understand the broader Bitcoiner view, read Saifedean Amous' The Bitcoin Standard, listen to The Saylor Series (at least episodes 1-13), read Jeff Booth's The Price of Tomorrow and his Finding Signal In A Noisy World article, read Lyn Alden's Broken Money. I would expect everyone here to find them interesting even if they disagree with them. At least you'll get to properly understand where a good many Bitcoiners are coming from.
It really is about much more than 'number go up' for many people. Unfortunately, it's just not possible to condense 3 books and a 20 hour discussion into a few pithy forum posts - especially against a barrage of determined opposition.

And please feel free to recommend some material I should look at to challenge my libertarian, hard money, etc. leanings. I'm genuinely interested. I've read quite a bit but I just don't get bigGov and MMT, etc. - it seems like total bullshit - but I'm more than happy to read more. I freely acknowledge that I could be wrong.

I have a CS degree, worked in BigTech for 2 decades, have spent a fair amount of time with encryption technology generally, and have read various crypto whitepapers. Honestly, I'm not going to spent a bunch of time reading more about BTC.

Fair enough, but you'll have to excuse me if I remind of this reluctance when you next bemoan that "From my view, the only thing it's good for is speculating on the value of BTC, e.g. line goes up".

The drive and enthusiasm for the project has very little to do with CS or the intricacies of the encryption technology - it's great technology and it's very interesting in it's own right but it's not the 'point'.

If you're serious about challenging your hard money leanings, then I would suggest A Monetary History of the United States, 1867-1960. Not easy reading, took me quite some time to work through it, but it goes into granular detail on how hard money contributed to multiple economic depressions until the Federal Reserve was created and then learned how to manage the supply of money.

I am serious. Thanks, I'll add it to my giant TBR list.

[LateStarter]

Let me put if for you quite simply.  I believe bitcoin will always go on to make a greater ATH.  I believe in Bitcoin as a store of value, I don't believe there is ever going to be an ultimate 'top' for bitcoin because I believe the printed out of thin air fiat currencies we value it in will always devalue over time, this is what ultimately drives capital towards the harder asset which is Bitcoin, the only asset which humans cannot increase the supply of.  Let me say it again, there is no top for bitcoin because there is no bottom for fiat, fiat will always be printed into infinity.

Now, you can argue the timing of peoples investments all you like, yes the people who bought the last ATH are currently 'at loss', but the next ATH will come around and at that moment, nominally the amount of people 'at loss' at the next ATH will be zero.  Yes there will be another 'crash' at some stage, yes people will be at 'loss' for a year or two, but IMO the value of bitcoin will always eventually go up vs printed fiat currencies inflating away their value over time.  This is really all I have to say on the matter as all of this has been covered in the past I'm sure.

Sure, this is true; there's a limited supply of BTC. Just as there's a limited supply of gold, MTG cards, or used tissues signed by Tom Hanks.. But it doesn't follow that the value of those things will go up forever. They also need to have a utility, otherwise you're just paying for the novelty of owning something, which has a pretty limited market.

Utility is in the eye of the beholder. Don't conflate "I see no utility" or "it has no utility for me" with "it has no utility".

Ok. so what is the utility of BTC? Now? and in the future?
What problem does it solve (I assume debasing of fiat?)? How does it solve that, i.e. how will having lots of BTC help me in that situation?
Will we all at some point decide that dollar is worthless and start doing all transactions in BTC? MY boss will pay me btc, i'll buy milk in btc? Is this adopted by the state, or a barter economy? Feel free to correct and educate me here, I'm really curious.

If this is the case, the way I see it this will then come about in two ways;
- we switch suddenly; every BTC-bro instantly become wealthy as they have the only currency. The other 97% of the population have zero wealth overnight..
- there is a transition, were $ convert to BTC. Like the Euro I guess.

scenario 1 I'm already screwed. And far fetched, since any policy that toss 90% of the population into instant poverty seems rather unlikely
Scenario 2 it doesn't matter. I'll just hang onto dollars and wait.

In either case I don't see the point in hording BTC now.

I meant to reply to this but lost track of it yesterday . .

You seem to be anticipating some sort of managed switchover or managed transition. I don't see that at all.

As I wrote in a reply to FINate yesterday:

"My expectation is that it will become a very good store of value and unit of account. However, it won't be those things until it's much bigger. Also, I expect it to become a regular means of exchange for some, though probably not all in my lifetime, if ever.
Meanwhile, I am speculating that it will eventually get there (store of value / unit of account) - it will continue to get more widely adopted by individuals, institutions and maybe nations too - and yes, that the number will, consequently, continue to go up as things progress."

This is an organic growth of Bitcoin - a gradual (probably S-curve) voluntary transition, one step at a time, one person at a time, one institution at a time, 1% allocation at a time, etc. . . .

The reason to buy/hold some Bitcoin now is that the conversion rate is currently $35k = 1BTC.
If the above pans out, in 5 years, 10 years, or whatever:
   $35k will only buy a small fraction of 1BTC;
   The purchasing power of 1BTC today (a decent car) will be greatly increased (a decent house?).
   

Also note: You have repeated a common misunderstanding with "The other 97% of the population have zero wealth overnight.."

The latest latecomers to Bitcoin will lose zero purchasing power in the act of transferring their fiat to Bitcoin. Example: You have $1M in 2030, and $1M could buy a Ferrari - you transfer it to Bitcoin - your Bitcoin will buy that same Ferrari (even if $1M = just 1BTC).
You will have missed out on the purchasing power gains you could have made by buying that 1BTC today for $35k, but Bitcoin hasn't taken anything away from you. You just made a bad decision today.
Of course, I could be wrong, it could all go to zero. In which case, you made a good decision today.

If inflation/debasement continues to be a problem, your $1M (and equivalent BTC) might only buy a Prius in 2030. Again, Bitcoin hasn't taken anything away from you - the $ took it.

[GuitarStv]

Crypto will continue to have a lasting negative impact on the environment as long as it's based on wasteful (by design) proof of work.  That's what it's taking from everyone regardless of pricing whims.

[LateStarter]

Crypto will continue to have a lasting negative impact on the environment as long as it's based on wasteful (by design) proof of work.  That's what it's taking from everyone regardless of pricing whims.

Bitcoin was not designed to 'waste' energy. Whether or not Bitcoin's energy usage is 'wasteful' is just a matter of opinion.

In my opinion, the benefits of proof-of-work significantly outweigh the costs = not a waste.

Bitcoin = 0.23% of worldwide energy production. Scrap Bitcoin and save the world ? It's a rounding error.

[frugledoc]

Crypto will continue to have a lasting negative impact on the environment as long as it's based on wasteful (by design) proof of work.  That's what it's taking from everyone regardless of pricing whims.

Bitcoin was not designed to 'waste' energy. Whether or not Bitcoin's energy usage is 'wasteful' is just a matter of opinion.

In my opinion, the benefits of proof-of-work significantly outweigh the costs = not a waste.

Bitcoin = 0.23% of worldwide energy production. Scrap Bitcoin and save the world ? It's a rounding error.

It’s not a matter of opinion, it’s fact.  Bitcoin is basically a cult, it’s not too late to get out.  Go to r/Buttcoin if you need help.

[Glenstache]

Crypto will continue to have a lasting negative impact on the environment as long as it's based on wasteful (by design) proof of work.  That's what it's taking from everyone regardless of pricing whims.

Bitcoin was not designed to 'waste' energy. Whether or not Bitcoin's energy usage is 'wasteful' is just a matter of opinion.

In my opinion, the benefits of proof-of-work significantly outweigh the costs = not a waste.

Bitcoin = 0.23% of worldwide energy production. Scrap Bitcoin and save the world ? It's a rounding error.

The total electricity consumptiuon of Los Angeles County in 2022 was 68.5 TWh (https://ecdms.energy.ca.gov/elecbycounty.aspx)
The estimated annual energy consumption of BTC in 2022 was 95.5 TWh (from your link)

Comparing to global energy use and having anything but a near-zero percentage indicates that the demand is huge. And total energy demand includes energy use for things not including electricity production, such as driving cars.

In this case, would we say that Los Angeles has a small electricity demand footprint? Is powering all of Los Angeles nearly 1.5x still seem small?

Wheter BTC is worth the energy consumption is subjective and maybe or maybe isn't worth it. However, it is not debateable that it does use a fuckton of electricity.

[GuitarStv]

Whether or not you think bitcoin is a waste of energy based on usefulness is one thing.

What you can't argue though, is that bitcoin was literally designed to waste energy.  That's what proof of work is.  It requires the waste of energy to generate encrypted hex numbers - solving the hash.  Proof of work requires that nodes on a network provide evidence that they have wasted energy through expended computational power in order to achieve (theoretically) decentralized consensus.

[index]

I remain skeptical the governments of the world willingly give up their ability print their own currency and would prevent the rise of an alternate currency. In 1933 the US government confiscated gold. What is to stop governments from confiscating or outlawing the transfer and possession of BTC? The dollar is backed by a lot of guns.

[Telecaster]

I remain skeptical the governments of the world willingly give up their ability print their own currency and would prevent the rise of an alternate currency. In 1933 the US government confiscated gold. What is to stop governments from confiscating or outlawing the transfer and possession of BTC? The dollar is backed by a lot of guns.

I'm skeptical too, but not for those reasons.   In the US, and all other countries as far as I know, you have to pay wages and taxes in legal tender.    That pretty much means alternate currencies can't arise in any meaningful way because you must have legal tender to pay taxes.   

Another reason is the reason why the US confiscated gold in 1933.  It was because the Federal Reserve needed to increase the money supply, but did not have enough gold reserves to do so.  The US isn't on the Bitcoin standard, so it doesn't need to do that any more than it needs to confiscate stocks or bonds. 

But if those reasons weren't enough the biggest obstacle is that for Bitcoin to become accepted as a currency in any meaningful way, it needs to function just as well or better than regular money.  And it objectively doesn't.   Even in niche applications where Bitcoin seemingly has the biggest advantages like cross-border payments and unbanked populations, Bitcoin penetration has been extremely small.   

[LateStarter]

Whether or not you think bitcoin is a waste of energy based on usefulness is one thing.

What you can't argue though, is that bitcoin was literally designed to waste energy.  That's what proof of work is.  It requires the waste of energy to generate encrypted hex numbers - solving the hash.  Proof of work requires that nodes on a network provide evidence that they have wasted energy through expended computational power in order to achieve (theoretically) decentralized consensus.

You can argue that solving the hash, in itself, provides no benefit, but that's missing the point - it's not about solving the hash per se. By doing the work required to solve the hash, the nodes build a 'wall of energy' behind which Bitcoin is secure. Building that 'wall of energy' to secure Bitcoin is the point. The energy wasn't wasted despite the fact that all the nodes did was discover some 'random' hex number.

I could argue that going out for a bike ride is a waste of energy - you start from home and you end up back home, but I'm missing the point - it's not about getting somewhere else. By doing the work required to cycle out and back again, you're burning fat and building your muscles, etc. Keeping fit and healthy is the point. The energy wasn't wasted despite the fact that all you did was ride around in a circle and got nowhere.

[LateStarter]

Crypto will continue to have a lasting negative impact on the environment as long as it's based on wasteful (by design) proof of work.  That's what it's taking from everyone regardless of pricing whims.

Bitcoin was not designed to 'waste' energy. Whether or not Bitcoin's energy usage is 'wasteful' is just a matter of opinion.

In my opinion, the benefits of proof-of-work significantly outweigh the costs = not a waste.

Bitcoin = 0.23% of worldwide energy production. Scrap Bitcoin and save the world ? It's a rounding error.

The total electricity consumptiuon of Los Angeles County in 2022 was 68.5 TWh (https://ecdms.energy.ca.gov/elecbycounty.aspx)
The estimated annual energy consumption of BTC in 2022 was 95.5 TWh (from your link)

Comparing to global energy use and having anything but a near-zero percentage indicates that the demand is huge. And total energy demand includes energy use for things not including electricity production, such as driving cars.

In this case, would we say that Los Angeles has a small electricity demand footprint? Is powering all of Los Angeles nearly 1.5x still seem small?

Wheter BTC is worth the energy consumption is subjective and maybe or maybe isn't worth it. However, it is not debateable that it does use a fuckton of electricity.

Show me where I claimed that Bitcoin doesn't use a lot of electricity.

My point was that the bleating about Bitcoin destroying the planet is often overblown - it's 0.23% of the total energy 'problem'. If saving the planet is really your goal, your attention should be on the bigger things. Seems to me that saving the planet often isn't the goal here - complaining about Bitcoin is the real goal, and any jab will do . . .

[LateStarter]

I remain skeptical the governments of the world willingly give up their ability print their own currency and would prevent the rise of an alternate currency. In 1933 the US government confiscated gold. What is to stop governments from confiscating or outlawing the transfer and possession of BTC? The dollar is backed by a lot of guns.

How would this work in practise ? Presumably, a significant% of the population would have to have a significant% of their assets in Bitcoin to warrant such drastic action. I doubt it would go down well with the populace. And, presumably, any action would have to be heavy handed to be effective.

Fuck that government - that's outright authoritarian repression. Looks like we'd better restart the fleeing scenarios discussion . . .

[LateStarter]

I remain skeptical the governments of the world willingly give up their ability print their own currency and would prevent the rise of an alternate currency. In 1933 the US government confiscated gold. What is to stop governments from confiscating or outlawing the transfer and possession of BTC? The dollar is backed by a lot of guns.

I'm skeptical too, but not for those reasons.   In the US, and all other countries as far as I know, you have to pay wages and taxes in legal tender.    That pretty much means alternate currencies can't arise in any meaningful way because you must have legal tender to pay taxes.

Wages ? That's a new one on me.
Note my many posts saying that I don't foresee the demise of the USD (or any other significant currency) for many years, if ever. Bitcoin doesn't need to replace the USD. Bitcoin and USD, etc. can co-exist for a looong time. No issues with paying taxes - use your USD/GBP/whatever.

Another reason is the reason why the US confiscated gold in 1933.  It was because the Federal Reserve needed to increase the money supply, but did not have enough gold reserves to do so.  The US isn't on the Bitcoin standard, so it doesn't need to do that any more than it needs to confiscate stocks or bonds. 

But if those reasons weren't enough the biggest obstacle is that for Bitcoin to become accepted as a currency in any meaningful way, it needs to function just as well or better than regular money.  And it objectively doesn't.   Even in niche applications where Bitcoin seemingly has the biggest advantages like cross-border payments and unbanked populations, Bitcoin penetration has been extremely small.

Still focused on 'means of exchange' ? Speculation on growth - leading to Store of Value and Unit of Account is where it's at, especially for us fortunate ones in the wealthier nations.
The 'means of exchange' will start, and is starting, in the poorer places - they need something better than their weak currencies asap. I haven't tried to track progress recently and a quick look revealed the usual vague 'crypto' references and lots of both-ways bias. Actual progress being made in this area ? I don't know.

[MustacheAndaHalf]

Whether or not you think bitcoin is a waste of energy based on usefulness is one thing.

What you can't argue though, is that bitcoin was literally designed to waste energy.  That's what proof of work is.  It requires the waste of energy to generate encrypted hex numbers - solving the hash.  Proof of work requires that nodes on a network provide evidence that they have wasted energy through expended computational power in order to achieve (theoretically) decentralized consensus.

A blockchain reward goes to the winner.  The other nodes do not "provide evidence that they have wasted energy".  They lose silently, without providing any evidence they did so.  The energy did not get thrown away, as you keep claiming with the word "waste", but rather went to securing the blockchain.  Bitcoin mining has to run at scale, at full speed, to prevent any smaller set of computers from creating a fake blockchain.

[FINate]

Whether or not you think bitcoin is a waste of energy based on usefulness is one thing.

What you can't argue though, is that bitcoin was literally designed to waste energy.  That's what proof of work is.  It requires the waste of energy to generate encrypted hex numbers - solving the hash.  Proof of work requires that nodes on a network provide evidence that they have wasted energy through expended computational power in order to achieve (theoretically) decentralized consensus.

A blockchain reward goes to the winner.  The other nodes do not "provide evidence that they have wasted energy".  They lose silently, without providing any evidence they did so.  The energy did not get thrown away, as you keep claiming with the word "waste", but rather went to securing the blockchain.  Bitcoin mining has to run at scale, at full speed, to prevent any smaller set of computers from creating a fake blockchain.

No, waste is an accurate word. Very close to 100% of the energy used by a CPU gets converted to heat. There's no physical end product coming out the end of a computer, just information. The heat generated is considered "waste heat" and it's a huge problem for data centers. A lot has gone into how to move all this waste heat, which is why large data centers are often located near bodies of cold water. Bitcoin's 95.5 TWh of energy consumption in 2022 pretty much all went up in heat. Physically speaking, it's no different than running a huge army of space heaters. Yes, it solved some math problems along the way and secured the block chain, but is that really worth the enormous energy expenditure?

[MustacheAndaHalf]

Whether or not you think bitcoin is a waste of energy based on usefulness is one thing.

What you can't argue though, is that bitcoin was literally designed to waste energy.  That's what proof of work is.  It requires the waste of energy to generate encrypted hex numbers - solving the hash.  Proof of work requires that nodes on a network provide evidence that they have wasted energy through expended computational power in order to achieve (theoretically) decentralized consensus.

A blockchain reward goes to the winner.  The other nodes do not "provide evidence that they have wasted energy".  They lose silently, without providing any evidence they did so.  The energy did not get thrown away, as you keep claiming with the word "waste", but rather went to securing the blockchain.  Bitcoin mining has to run at scale, at full speed, to prevent any smaller set of computers from creating a fake blockchain.

No, waste is an accurate word. Very close to 100% of the energy used by a CPU gets converted to heat. There's no physical end product coming out the end of a computer, just information. The heat generated is considered "waste heat" and it's a huge problem for data centers. A lot has gone into how to move all this waste heat, which is why large data centers are often located near bodies of cold water. Bitcoin's 95.5 TWh of energy consumption in 2022 pretty much all went up in heat. Physically speaking, it's no different than running a huge army of space heaters. Yes, it solved some math problems along the way and secured the block chain, but is that really worth the enormous energy expenditure?

Which is more likely: cpus use 0% energy, or you're confused?

https://forums.tomshardware.com/threads/what-is-the-average-cpu-power-effeciency.3548098/
https://en.wikipedia.org/wiki/Thermal_design_power

[FINate]

Whether or not you think bitcoin is a waste of energy based on usefulness is one thing.

What you can't argue though, is that bitcoin was literally designed to waste energy.  That's what proof of work is.  It requires the waste of energy to generate encrypted hex numbers - solving the hash.  Proof of work requires that nodes on a network provide evidence that they have wasted energy through expended computational power in order to achieve (theoretically) decentralized consensus.

A blockchain reward goes to the winner.  The other nodes do not "provide evidence that they have wasted energy".  They lose silently, without providing any evidence they did so.  The energy did not get thrown away, as you keep claiming with the word "waste", but rather went to securing the blockchain.  Bitcoin mining has to run at scale, at full speed, to prevent any smaller set of computers from creating a fake blockchain.

No, waste is an accurate word. Very close to 100% of the energy used by a CPU gets converted to heat. There's no physical end product coming out the end of a computer, just information. The heat generated is considered "waste heat" and it's a huge problem for data centers. A lot has gone into how to move all this waste heat, which is why large data centers are often located near bodies of cold water. Bitcoin's 95.5 TWh of energy consumption in 2022 pretty much all went up in heat. Physically speaking, it's no different than running a huge army of space heaters. Yes, it solved some math problems along the way and secured the block chain, but is that really worth the enormous energy expenditure?

Which is more likely: cpus use 0% energy, or you're confused?

https://forums.tomshardware.com/threads/what-is-the-average-cpu-power-effeciency.3548098/
https://en.wikipedia.org/wiki/Thermal_design_power

You do realize that the forum thread you posted proves my point, right?

CPUs are approximately 100% efficient at converting power to heat - practically every watt going under the IHS will ultimately come out as heat, though a small part of it will be dissipated by the PCB, traces and whatever is connected at the end of IO lanes.

Unless the goal of Bitcoin is to be a giant distributed resistive heater, all the "efficient" heat is waste heat.

[LateStarter]

Whether or not you think bitcoin is a waste of energy based on usefulness is one thing.

What you can't argue though, is that bitcoin was literally designed to waste energy.  That's what proof of work is.  It requires the waste of energy to generate encrypted hex numbers - solving the hash.  Proof of work requires that nodes on a network provide evidence that they have wasted energy through expended computational power in order to achieve (theoretically) decentralized consensus.

A blockchain reward goes to the winner.  The other nodes do not "provide evidence that they have wasted energy".  They lose silently, without providing any evidence they did so.  The energy did not get thrown away, as you keep claiming with the word "waste", but rather went to securing the blockchain.  Bitcoin mining has to run at scale, at full speed, to prevent any smaller set of computers from creating a fake blockchain.

No, waste is an accurate word. Very close to 100% of the energy used by a CPU gets converted to heat. There's no physical end product coming out the end of a computer, just information. The heat generated is considered "waste heat" and it's a huge problem for data centers. A lot has gone into how to move all this waste heat, which is why large data centers are often located near bodies of cold water. Bitcoin's 95.5 TWh of energy consumption in 2022 pretty much all went up in heat. Physically speaking, it's no different than running a huge army of space heaters. Yes, it solved some math problems along the way and secured the block chain, but is that really worth the enormous energy expenditure?

It's obviously true that Bitcoin mining results in some waste heat. That's true for all computing processes** - whether CPU, abacus or synapse, etc. In fact, it's true for every aspect of the entirety of human action since the dawn of time. EVERYTHING we do results in some waste energy. The point you are making is a truism, it's a non-point.

The only interesting question is whether Bitcoin nets out as 'a waste of energy', ie. whether the output is more valuable than the total energy input -  and that's a subjective question.


Also, compare:
The structure of Fort Knox is the consequence of a big expenditure of energy, and the only reason that much energy was expended was to ensure that no wannabe gold thieves could break in without a correspondingly big expenditure of energy - an amount that's generally out of reach. A simple fence would have cost far less energy to build, but it would also require far less energy to breach - an amount that's widely available. The fact that the construction of Fort Knox required a big expenditure of energy is not a problem, it's not a failing - it's the whole point. Fort Knox is a big wall of security energy that could only be breached by a big force of attack energy.

I'll go out on a limb and state a general rule that:
Only a high energy defence can reliably resist high energy attacks.



**
Electricity generation worldwide in 2022 = 30,000 TWh
Computers, data centers and networks consume 10% of the world's electricity.
3,000 TWh 'wasted' on "just information".

[FINate]

Whether or not you think bitcoin is a waste of energy based on usefulness is one thing.

What you can't argue though, is that bitcoin was literally designed to waste energy.  That's what proof of work is.  It requires the waste of energy to generate encrypted hex numbers - solving the hash.  Proof of work requires that nodes on a network provide evidence that they have wasted energy through expended computational power in order to achieve (theoretically) decentralized consensus.

A blockchain reward goes to the winner.  The other nodes do not "provide evidence that they have wasted energy".  They lose silently, without providing any evidence they did so.  The energy did not get thrown away, as you keep claiming with the word "waste", but rather went to securing the blockchain.  Bitcoin mining has to run at scale, at full speed, to prevent any smaller set of computers from creating a fake blockchain.

No, waste is an accurate word. Very close to 100% of the energy used by a CPU gets converted to heat. There's no physical end product coming out the end of a computer, just information. The heat generated is considered "waste heat" and it's a huge problem for data centers. A lot has gone into how to move all this waste heat, which is why large data centers are often located near bodies of cold water. Bitcoin's 95.5 TWh of energy consumption in 2022 pretty much all went up in heat. Physically speaking, it's no different than running a huge army of space heaters. Yes, it solved some math problems along the way and secured the block chain, but is that really worth the enormous energy expenditure?

It's obviously true that Bitcoin mining results in some waste heat. That's true for all computing processes** - whether CPU, abacus or synapse, etc. In fact, it's true for every aspect of the entirety of human action since the dawn of time. EVERYTHING we do results in some waste energy. The point you are making is a truism, it's a non-point.

The only interesting question is whether Bitcoin nets out as 'a waste of energy', ie. whether the output is more valuable than the total energy input -  and that's a subjective question.


Also, compare:
The structure of Fort Knox is the consequence of a big expenditure of energy, and the only reason that much energy was expended was to ensure that no wannabe gold thieves could break in without a correspondingly big expenditure of energy - an amount that's generally out of reach. A simple fence would have cost far less energy to build, but it would also require far less energy to breach - an amount that's widely available. The fact that the construction of Fort Knox required a big expenditure of energy is not a problem, it's not a failing - it's the whole point. Fort Knox is a big wall of security energy that could only be breached by a big force of attack energy.

I'll go out on a limb and state a general rule that:
Only a high energy defence can reliably resist high energy attacks.



**
Electricity generation worldwide in 2022 = 30,000 TWh
Computers, data centers and networks consume 10% of the world's electricity.
3,000 TWh 'wasted' on "just information".

Yes, all computing requires energy. As the number of computations increases, so does the energy consumption. None of this is in dispute.

By definition, then, Proof of Work is designed to consume energy.

Proof of work (PoW) is a form of cryptographic proof in which one party (the prover) proves to others (the verifiers) that a certain amount of a specific computational effort has been expended.

What really matters is how efficiently these computational cycles are being used. So it's sensible to compare the energy expenditure per transaction . A single BTC transaction consumes around 703 kWh, whereas 100,000 VISA transactions requires around 149 kWh (source). The efficiency difference is just astounding, with BTC transactions consuming 471,812 times the energy of a VISA transaction. Can you really tell us that you think this isn't horribly wasteful?

ETA: To help put these numbers into perspective, a dishwasher uses around 1.5 kWh per load. Which means a BTC transaction uses around 466 dishwasher loads of electricity. My household does about one load of dishes per day, so a single BTC transaction uses more electricity than my household of 4 uses doing dishes for a year. Com'on, that's grotesque.

[MustacheAndaHalf]

Whether or not you think bitcoin is a waste of energy based on usefulness is one thing.

What you can't argue though, is that bitcoin was literally designed to waste energy.  That's what proof of work is.  It requires the waste of energy to generate encrypted hex numbers - solving the hash.  Proof of work requires that nodes on a network provide evidence that they have wasted energy through expended computational power in order to achieve (theoretically) decentralized consensus.

A blockchain reward goes to the winner.  The other nodes do not "provide evidence that they have wasted energy".  They lose silently, without providing any evidence they did so.  The energy did not get thrown away, as you keep claiming with the word "waste", but rather went to securing the blockchain.  Bitcoin mining has to run at scale, at full speed, to prevent any smaller set of computers from creating a fake blockchain.

No, waste is an accurate word. Very close to 100% of the energy used by a CPU gets converted to heat. There's no physical end product coming out the end of a computer, just information. The heat generated is considered "waste heat" and it's a huge problem for data centers. A lot has gone into how to move all this waste heat, which is why large data centers are often located near bodies of cold water. Bitcoin's 95.5 TWh of energy consumption in 2022 pretty much all went up in heat. Physically speaking, it's no different than running a huge army of space heaters. Yes, it solved some math problems along the way and secured the block chain, but is that really worth the enormous energy expenditure?

Which is more likely: cpus use 0% energy, or you're confused?

https://forums.tomshardware.com/threads/what-is-the-average-cpu-power-effeciency.3548098/
https://en.wikipedia.org/wiki/Thermal_design_power

You do realize that the forum thread you posted proves my point, right?

CPUs are approximately 100% efficient at converting power to heat - practically every watt going under the IHS will ultimately come out as heat, though a small part of it will be dissipated by the PCB, traces and whatever is connected at the end of IO lanes.

Unless the goal of Bitcoin is to be a giant distributed resistive heater, all the "efficient" heat is waste heat.

You missed that poster being corrected:

You are confusing TDP with power
...
I think you are mixing up TDP (Thermal Design Power ) with power usage (Watts).
TDP is not a measure of power power consumption....even though TDP is correlated with power consumption. The more power CPU uses the higher the TDP.

Comparing the electrical and thermal energies doesn't tell you much either.
Take a FX8350, probably 100W of electrical and thermal power output.
Take an i5-3570k, probably 65W of electrical and maybe 90w of thermal power
...
Comparing Electrical to thermal power ratings just tells electrically how efficient it is great if you are looking at a heater, but it could bare no relationship to it's computational effectiveness, it's more likely to tell you how they measure TDP.

Cpus do not run on zero energy, nor do they generate free energy (65W vs 90W).  That's why I linked to the wikipedia entry for TDP, which also shows who was correct in that discussion.

[FINate]

Whether or not you think bitcoin is a waste of energy based on usefulness is one thing.

What you can't argue though, is that bitcoin was literally designed to waste energy.  That's what proof of work is.  It requires the waste of energy to generate encrypted hex numbers - solving the hash.  Proof of work requires that nodes on a network provide evidence that they have wasted energy through expended computational power in order to achieve (theoretically) decentralized consensus.

A blockchain reward goes to the winner.  The other nodes do not "provide evidence that they have wasted energy".  They lose silently, without providing any evidence they did so.  The energy did not get thrown away, as you keep claiming with the word "waste", but rather went to securing the blockchain.  Bitcoin mining has to run at scale, at full speed, to prevent any smaller set of computers from creating a fake blockchain.

No, waste is an accurate word. Very close to 100% of the energy used by a CPU gets converted to heat. There's no physical end product coming out the end of a computer, just information. The heat generated is considered "waste heat" and it's a huge problem for data centers. A lot has gone into how to move all this waste heat, which is why large data centers are often located near bodies of cold water. Bitcoin's 95.5 TWh of energy consumption in 2022 pretty much all went up in heat. Physically speaking, it's no different than running a huge army of space heaters. Yes, it solved some math problems along the way and secured the block chain, but is that really worth the enormous energy expenditure?

Which is more likely: cpus use 0% energy, or you're confused?

https://forums.tomshardware.com/threads/what-is-the-average-cpu-power-effeciency.3548098/
https://en.wikipedia.org/wiki/Thermal_design_power

You do realize that the forum thread you posted proves my point, right?

CPUs are approximately 100% efficient at converting power to heat - practically every watt going under the IHS will ultimately come out as heat, though a small part of it will be dissipated by the PCB, traces and whatever is connected at the end of IO lanes.

Unless the goal of Bitcoin is to be a giant distributed resistive heater, all the "efficient" heat is waste heat.

You missed that poster being corrected:

You are confusing TDP with power
...
I think you are mixing up TDP (Thermal Design Power ) with power usage (Watts).
TDP is not a measure of power power consumption....even though TDP is correlated with power consumption. The more power CPU uses the higher the TDP.

Comparing the electrical and thermal energies doesn't tell you much either.
Take a FX8350, probably 100W of electrical and thermal power output.
Take an i5-3570k, probably 65W of electrical and maybe 90w of thermal power
...
Comparing Electrical to thermal power ratings just tells electrically how efficient it is great if you are looking at a heater, but it could bare no relationship to it's computational effectiveness, it's more likely to tell you how they measure TDP.

Cpus do not run on zero energy, nor do they generate free energy (65W vs 90W).  That's why I linked to the wikipedia entry for TDP, which also shows who was correct in that discussion.

I did not address TDP because it's not relevant to this discussion. From the Wikipedia you linked:

The thermal design power (TDP), sometimes called thermal design point, is the maximum amount of heat generated by a computer chip or component (often a CPU, GPU or system on a chip) that the cooling system in a computer is designed to dissipate under any workload.

TDP is about the capacity of cooling systems, and the maximum amount of heat they can remove to keep the CPU from overheating. I was being nice by skipping over this, because, frankly, it shows that you don't really know what you're talking about and are just grasping at whatever you can find online.

The fact is, almost 100% of the electricity consumed by CPUs (and GPUs, most of this stuff is actually using GPU farms), ends up as waste heat.

I spent a good amount of my career building large scale distributed systems at Google. I managed a service that ran on 100k CPU cores. TDP is absolutely essential because all those CPUs consume so much energy, and that energy ends up as heat. I became friends with a guy on the Google Bus who was a Thermal Engineer, and his entire job was designing industrial heat exchangers. Why did Google hire this guy and his team? Because some of our huge data centers were cooled by river water.

So when I reference a BTC transaction consuming 703 kWh (estimates vary, so I picked on one the lower end), which you conveniently ignored, I'm talking actual power consumption by the BTC ecosystem, not the TDP. This is actual used energy per transaction, which is converted to heat and dissipated by individual cooling systems. 

[Telecaster]

Still focused on 'means of exchange' ? Speculation on growth - leading to Store of Value and Unit of Account is where it's at, especially for us fortunate ones in the wealthier nations.
The 'means of exchange' will start, and is starting, in the poorer places - they need something better than their weak currencies asap. I haven't tried to track progress recently and a quick look revealed the usual vague 'crypto' references and lots of both-ways bias. Actual progress being made in this area ? I don't know.

Thus far, Bitcoin is a story.    For Bitcoin to grow in a meaningful way, it needs to move beyond the story and provide utility <insert you idea of utility here> that's better than current alternatives.    We know objectively that Bitcoin is a worse payment system than the traditional finance system.     It is definitely not a unit of account.    Store of value is a little bit of a question mark.   It works if you time your entry points correctly.  However, most people don't have that ability.  I know I don't.   So there remains the chicken and egg problem.  For it Bitcoin to increase in value, more people need to want to own it than currently want to own it.   And beyond the story, there is no real reason for most people to own it. 

[LateStarter]

Whether or not you think bitcoin is a waste of energy based on usefulness is one thing.

What you can't argue though, is that bitcoin was literally designed to waste energy.  That's what proof of work is.  It requires the waste of energy to generate encrypted hex numbers - solving the hash.  Proof of work requires that nodes on a network provide evidence that they have wasted energy through expended computational power in order to achieve (theoretically) decentralized consensus.

A blockchain reward goes to the winner.  The other nodes do not "provide evidence that they have wasted energy".  They lose silently, without providing any evidence they did so.  The energy did not get thrown away, as you keep claiming with the word "waste", but rather went to securing the blockchain.  Bitcoin mining has to run at scale, at full speed, to prevent any smaller set of computers from creating a fake blockchain.

No, waste is an accurate word. Very close to 100% of the energy used by a CPU gets converted to heat. There's no physical end product coming out the end of a computer, just information. The heat generated is considered "waste heat" and it's a huge problem for data centers. A lot has gone into how to move all this waste heat, which is why large data centers are often located near bodies of cold water. Bitcoin's 95.5 TWh of energy consumption in 2022 pretty much all went up in heat. Physically speaking, it's no different than running a huge army of space heaters. Yes, it solved some math problems along the way and secured the block chain, but is that really worth the enormous energy expenditure?

It's obviously true that Bitcoin mining results in some waste heat. That's true for all computing processes** - whether CPU, abacus or synapse, etc. In fact, it's true for every aspect of the entirety of human action since the dawn of time. EVERYTHING we do results in some waste energy. The point you are making is a truism, it's a non-point.

The only interesting question is whether Bitcoin nets out as 'a waste of energy', ie. whether the output is more valuable than the total energy input -  and that's a subjective question.


Also, compare:
The structure of Fort Knox is the consequence of a big expenditure of energy, and the only reason that much energy was expended was to ensure that no wannabe gold thieves could break in without a correspondingly big expenditure of energy - an amount that's generally out of reach. A simple fence would have cost far less energy to build, but it would also require far less energy to breach - an amount that's widely available. The fact that the construction of Fort Knox required a big expenditure of energy is not a problem, it's not a failing - it's the whole point. Fort Knox is a big wall of security energy that could only be breached by a big force of attack energy.

I'll go out on a limb and state a general rule that:
Only a high energy defence can reliably resist high energy attacks.



**
Electricity generation worldwide in 2022 = 30,000 TWh
Computers, data centers and networks consume 10% of the world's electricity.
3,000 TWh 'wasted' on "just information".

Yes, all computing requires energy. As the number of computations increases, so does the energy consumption. None of this is in dispute.

By definition, then, Proof of Work is designed to consume energy.

Proof of work (PoW) is a form of cryptographic proof in which one party (the prover) proves to others (the verifiers) that a certain amount of a specific computational effort has been expended.

Aah, we're getting closer. At least we've progressed from 'designed to waste energy'.

However, your link text badly misquotes the source. Here's what it says (my bold): "The purpose of proof-of-work algorithms is not proving that certain work was carried out or that a computational puzzle was "solved", but deterring manipulation of data by establishing large energy and hardware-control requirements to be able to do so."

PoW was not designed to consume energy. PoW was designed to provide security - and reliable security unavoidably requires a lot of energy - just like Fort Knox as described above.

What really matters is how efficiently these computational cycles are being used. So it's sensible to compare the energy expenditure per transaction . A single BTC transaction consumes around 703 kWh, whereas 100,000 VISA transactions requires around 149 kWh (source). The efficiency difference is just astounding, with BTC transactions consuming 471,812 times the energy of a VISA transaction. Can you really tell us that you think this isn't horribly wasteful?

ETA: To help put these numbers into perspective, a dishwasher uses around 1.5 kWh per load. Which means a BTC transaction uses around 466 dishwasher loads of electricity. My household does about one load of dishes per day, so a single BTC transaction uses more electricity than my household of 4 uses doing dishes for a year. Com'on, that's grotesque.

I think you know as well as I do that the Bitcoin vs Visa comparison is a completely lame and irrelevant comparison.

A Bitcoin transaction is an all-encompassing final settlement, it's the entire story, the end.

A Visa transaction is a small part of a complete transaction - it is not final settlement. Furthermore, Visa sits on top of a multitude of other banking, currency, security, etc. systems - it is very far from 'the entire story'. Aside from the obvious additional transaction elements leading to final settlement, Visa is dependent on the legitimacy of currency which is, in turn, dependent on Gov power which is, in turn, dependent on military power, etc. etc. etc. I doubt it's possible to calculate the true cost of a Bitcoin_equivalent_fully_accounted_to_final_settlement_Visa_transaction as it's distributed far and wide in a thousand pieces.

A Lightning transaction is probably a good-enough equivalent to a Visa transaction.

[LateStarter]

Still focused on 'means of exchange' ? Speculation on growth - leading to Store of Value and Unit of Account is where it's at, especially for us fortunate ones in the wealthier nations.
The 'means of exchange' will start, and is starting, in the poorer places - they need something better than their weak currencies asap. I haven't tried to track progress recently and a quick look revealed the usual vague 'crypto' references and lots of both-ways bias. Actual progress being made in this area ? I don't know.

Thus far, Bitcoin is a story.    For Bitcoin to grow in a meaningful way, it needs to move beyond the story and provide utility <insert you idea of utility here> that's better than current alternatives.    We know objectively that Bitcoin is a worse payment system than the traditional finance system.     It is definitely not a unit of account.    Store of value is a little bit of a question mark.   It works if you time your entry points correctly.  However, most people don't have that ability.  I know I don't.   So there remains the chicken and egg problem.  For it Bitcoin to increase in value, more people need to want to own it than currently want to own it.   And beyond the story, there is no real reason for most people to own it.

Bitcoin is a worse payment system than the traditional finance system ?
Probably, for buying a coffee in the US - and will probably remain so for a long time.
Maybe not for larger amounts and/or less developed places.
And Lightning is developing quickly - watch this space.

It is definitely not a unit of account ?
Not currently for most people in any practical sense, no.
Some are using it as such but Bitcoin needs to be much larger (and hence, more stable) for wider recognition as a UoA.
Note that the USD is a pretty poor UoA too - it's hardly a stable datum.

Store of value is a little bit of a question mark. It works if you time your entry points correctly. ?
Not so. It works reliably if your timescale is appropriate. Especially, if you DCA, ie. don't try to time your entry points at all.
Some are using it as such but Bitcoin needs to be much larger (and hence, more stable) for wider recognition as a SoV.

Again, the reason (for a wealthy person in a stable country) to own Bitcoin is mainly speculation on it becoming a general SoV and general UoA and more widely used as general MoE. If Bitcoin reaches it's full potential, we will all individually decide when it becomes a SoV and UoA for us, and maybe MoE too.

The chicken and egg problem is mostly a myth imo.
No telephones without telephone lines but no telephone lines without telephones. It'll never happen. etc. etc.

Looking at the broad trend - regardless of your dim view, Bitcoin is growing - and it's interested_audience is broadening. There's plenty of reasons to think it will continue to grow - probably at an accelerating rate as it becomes more understood and more attractive to more and more people. We're quite low on the potential S-curve.

[seattlecyclone]

Note that the USD is a pretty poor UoA too - it's hardly a stable datum.

It's way more stable than Bitcoin ever has been or shows any sign of ever being. If I promise to give you US$1,000 a year from now or a decade from now I have a pretty good sense for what I'm getting into. Due to consistent inflation I can expect I won't be giving up quite as much value as I would be giving up if I gave you US$1,000 today, but the error bars around what US$1,000 will be worth in the short to medium term aren't actually that big. Compare that to if I promise to give you 0.1 BTC in ten years. I have literally no idea what I just promised. If you're right about BTC's long-term trajectory I might owe you a car or even a house. If I'm right I might owe you a pizza.

Store of value is a little bit of a question mark. It works if you time your entry points correctly. ?
Not so. It works reliably if your timescale is appropriate.

There is far from sufficient data on this point. BTC has trended upward so far, but the track record just isn't there for most people to have any confidence it will stay that way in the long run. I have reason to expect an ounce of gold will hold its value pretty well over my lifetime because it has already done so for most of human history. BTC is a comparative blip in the timeline.

[FINate]

Whether or not you think bitcoin is a waste of energy based on usefulness is one thing.

What you can't argue though, is that bitcoin was literally designed to waste energy.  That's what proof of work is.  It requires the waste of energy to generate encrypted hex numbers - solving the hash.  Proof of work requires that nodes on a network provide evidence that they have wasted energy through expended computational power in order to achieve (theoretically) decentralized consensus.

A blockchain reward goes to the winner.  The other nodes do not "provide evidence that they have wasted energy".  They lose silently, without providing any evidence they did so.  The energy did not get thrown away, as you keep claiming with the word "waste", but rather went to securing the blockchain.  Bitcoin mining has to run at scale, at full speed, to prevent any smaller set of computers from creating a fake blockchain.

No, waste is an accurate word. Very close to 100% of the energy used by a CPU gets converted to heat. There's no physical end product coming out the end of a computer, just information. The heat generated is considered "waste heat" and it's a huge problem for data centers. A lot has gone into how to move all this waste heat, which is why large data centers are often located near bodies of cold water. Bitcoin's 95.5 TWh of energy consumption in 2022 pretty much all went up in heat. Physically speaking, it's no different than running a huge army of space heaters. Yes, it solved some math problems along the way and secured the block chain, but is that really worth the enormous energy expenditure?

It's obviously true that Bitcoin mining results in some waste heat. That's true for all computing processes** - whether CPU, abacus or synapse, etc. In fact, it's true for every aspect of the entirety of human action since the dawn of time. EVERYTHING we do results in some waste energy. The point you are making is a truism, it's a non-point.

The only interesting question is whether Bitcoin nets out as 'a waste of energy', ie. whether the output is more valuable than the total energy input -  and that's a subjective question.


Also, compare:
The structure of Fort Knox is the consequence of a big expenditure of energy, and the only reason that much energy was expended was to ensure that no wannabe gold thieves could break in without a correspondingly big expenditure of energy - an amount that's generally out of reach. A simple fence would have cost far less energy to build, but it would also require far less energy to breach - an amount that's widely available. The fact that the construction of Fort Knox required a big expenditure of energy is not a problem, it's not a failing - it's the whole point. Fort Knox is a big wall of security energy that could only be breached by a big force of attack energy.

I'll go out on a limb and state a general rule that:
Only a high energy defence can reliably resist high energy attacks.



**
Electricity generation worldwide in 2022 = 30,000 TWh
Computers, data centers and networks consume 10% of the world's electricity.
3,000 TWh 'wasted' on "just information".

Yes, all computing requires energy. As the number of computations increases, so does the energy consumption. None of this is in dispute.

By definition, then, Proof of Work is designed to consume energy.

Proof of work (PoW) is a form of cryptographic proof in which one party (the prover) proves to others (the verifiers) that a certain amount of a specific computational effort has been expended.

Aah, we're getting closer. At least we've progressed from 'designed to waste energy'.

However, your link text badly misquotes the source. Here's what it says (my bold): "The purpose of proof-of-work algorithms is not proving that certain work was carried out or that a computational puzzle was "solved", but deterring manipulation of data by establishing large energy and hardware-control requirements to be able to do so."

PoW was not designed to consume energy. PoW was designed to provide security - and reliable security unavoidably requires a lot of energy - just like Fort Knox as described above.

What really matters is how efficiently these computational cycles are being used. So it's sensible to compare the energy expenditure per transaction . A single BTC transaction consumes around 703 kWh, whereas 100,000 VISA transactions requires around 149 kWh (source). The efficiency difference is just astounding, with BTC transactions consuming 471,812 times the energy of a VISA transaction. Can you really tell us that you think this isn't horribly wasteful?

ETA: To help put these numbers into perspective, a dishwasher uses around 1.5 kWh per load. Which means a BTC transaction uses around 466 dishwasher loads of electricity. My household does about one load of dishes per day, so a single BTC transaction uses more electricity than my household of 4 uses doing dishes for a year. Com'on, that's grotesque.

I think you know as well as I do that the Bitcoin vs Visa comparison is a completely lame and irrelevant comparison.

A Bitcoin transaction is an all-encompassing final settlement, it's the entire story, the end.

A Visa transaction is a small part of a complete transaction - it is not final settlement. Furthermore, Visa sits on top of a multitude of other banking, currency, security, etc. systems - it is very far from 'the entire story'. Aside from the obvious additional transaction elements leading to final settlement, Visa is dependent on the legitimacy of currency which is, in turn, dependent on Gov power which is, in turn, dependent on military power, etc. etc. etc. I doubt it's possible to calculate the true cost of a Bitcoin_equivalent_fully_accounted_to_final_settlement_Visa_transaction as it's distributed far and wide in a thousand pieces.

A Lightning transaction is probably a good-enough equivalent to a Visa transaction.

Nope! Not letting you just make that semantic shift. What part of "certain amount of a specific computational effort has been expended" don't you understand. The reason it's called Proof of Work is that it's designed to be computationally intensive. And the competitive nature of Bitcoin mining means that around 99.99% of this computational work is discarded (source). In very real, physical terms, computational effort == work == energy consumption. It is indeed quite accurate to say Bitcoin is designed to waste energy.

And the Bitcoin vs VISA comparison is absolutely fair. We're talking about monetary transactions. I enter my CC number, and the VISA transaction completes the order. Yes, there is some other overhead associated with these transactions. But the same is true for Bitcoin. Mining operations require buildings, and server infrastructure to manage and monitor the mining.

[LateStarter]

Note that the USD is a pretty poor UoA too - it's hardly a stable datum.

It's way more stable than Bitcoin ever has been or shows any sign of ever being. If I promise to give you US$1,000 a year from now or a decade from now I have a pretty good sense for what I'm getting into. Due to consistent inflation I can expect I won't be giving up quite as much value as I would be giving up if I gave you US$1,000 today, but the error bars around what US$1,000 will be worth in the short to medium term aren't actually that big. Compare that to if I promise to give you 0.1 BTC in ten years. I have literally no idea what I just promised. If you're right about BTC's long-term trajectory I might owe you a car or even a house. If I'm right I might owe you a pizza.

Well, yeah. I didn't claim otherwise (except for "or shows any sign of ever being" which is just an opinion).

My point was simply that the USD is not a stable datum. We generally measure things against a stable datum - and the USD ain't one, not even close.

Store of value is a little bit of a question mark. It works if you time your entry points correctly. ?
Not so. It works reliably if your timescale is appropriate.

There is far from sufficient data on this point. BTC has trended upward so far, but the track record just isn't there for most people to have any confidence it will stay that way in the long run. I have reason to expect an ounce of gold will hold its value pretty well over my lifetime because it has already done so for most of human history. BTC is a comparative blip in the timeline.

That, again, is a matter of opinion. Existing history + BitcoinUnderstanding is enough for some. It's enough for me.

And I clearly said it's currently too small and volatile for most people in the sentence following where you chopped me off in your 'quote'.

If you prefer to wait for a longer time period, maybe even one equivalent to 'human history' to gather sufficient data, that's your choice. Knock yourself out.

[seattlecyclone]

Note that the USD is a pretty poor UoA too - it's hardly a stable datum.

It's way more stable than Bitcoin ever has been or shows any sign of ever being. If I promise to give you US$1,000 a year from now or a decade from now I have a pretty good sense for what I'm getting into. Due to consistent inflation I can expect I won't be giving up quite as much value as I would be giving up if I gave you US$1,000 today, but the error bars around what US$1,000 will be worth in the short to medium term aren't actually that big. Compare that to if I promise to give you 0.1 BTC in ten years. I have literally no idea what I just promised. If you're right about BTC's long-term trajectory I might owe you a car or even a house. If I'm right I might owe you a pizza.

Well, yeah. I didn't claim otherwise (except for "or shows any sign of ever being" which is just an opinion).

My point was simply that the USD is not a stable datum. We generally measure things against a stable datum - and the USD ain't one, not even close.

We use the units we have. USD is a better unit of account than BTC because even though it is not a perfectly "stable datum" it's miles closer to being one than BTC ever has been or shows any signs of being. Yes, that's an opinion, but it's an informed one. Bitcoin has been much more volatile than all major fiat currencies for its entire existence. What evidence is there that this is at all likely to change going forward?

Store of value is a little bit of a question mark. It works if you time your entry points correctly. ?
Not so. It works reliably if your timescale is appropriate.

There is far from sufficient data on this point. BTC has trended upward so far, but the track record just isn't there for most people to have any confidence it will stay that way in the long run. I have reason to expect an ounce of gold will hold its value pretty well over my lifetime because it has already done so for most of human history. BTC is a comparative blip in the timeline.

That, again, is a matter of opinion. Existing history + BitcoinUnderstanding is enough for some. It's enough for me.

And I clearly said it's currently too small and volatile for most people in the sentence following where you chopped me off in your 'quote'.

If you prefer to wait for a longer time period, maybe even one equivalent to 'human history' to gather sufficient data, that's your choice. Knock yourself out.

If I'm looking for something to serve as a store of value I will indeed base my decision on whether that thing has a reasonable history of being a store of value, yes. Thanks for your approval.

[LateStarter]

Whether or not you think bitcoin is a waste of energy based on usefulness is one thing.

What you can't argue though, is that bitcoin was literally designed to waste energy.  That's what proof of work is.  It requires the waste of energy to generate encrypted hex numbers - solving the hash.  Proof of work requires that nodes on a network provide evidence that they have wasted energy through expended computational power in order to achieve (theoretically) decentralized consensus.

A blockchain reward goes to the winner.  The other nodes do not "provide evidence that they have wasted energy".  They lose silently, without providing any evidence they did so.  The energy did not get thrown away, as you keep claiming with the word "waste", but rather went to securing the blockchain.  Bitcoin mining has to run at scale, at full speed, to prevent any smaller set of computers from creating a fake blockchain.

No, waste is an accurate word. Very close to 100% of the energy used by a CPU gets converted to heat. There's no physical end product coming out the end of a computer, just information. The heat generated is considered "waste heat" and it's a huge problem for data centers. A lot has gone into how to move all this waste heat, which is why large data centers are often located near bodies of cold water. Bitcoin's 95.5 TWh of energy consumption in 2022 pretty much all went up in heat. Physically speaking, it's no different than running a huge army of space heaters. Yes, it solved some math problems along the way and secured the block chain, but is that really worth the enormous energy expenditure?

It's obviously true that Bitcoin mining results in some waste heat. That's true for all computing processes** - whether CPU, abacus or synapse, etc. In fact, it's true for every aspect of the entirety of human action since the dawn of time. EVERYTHING we do results in some waste energy. The point you are making is a truism, it's a non-point.

The only interesting question is whether Bitcoin nets out as 'a waste of energy', ie. whether the output is more valuable than the total energy input -  and that's a subjective question.


Also, compare:
The structure of Fort Knox is the consequence of a big expenditure of energy, and the only reason that much energy was expended was to ensure that no wannabe gold thieves could break in without a correspondingly big expenditure of energy - an amount that's generally out of reach. A simple fence would have cost far less energy to build, but it would also require far less energy to breach - an amount that's widely available. The fact that the construction of Fort Knox required a big expenditure of energy is not a problem, it's not a failing - it's the whole point. Fort Knox is a big wall of security energy that could only be breached by a big force of attack energy.

I'll go out on a limb and state a general rule that:
Only a high energy defence can reliably resist high energy attacks.



**
Electricity generation worldwide in 2022 = 30,000 TWh
Computers, data centers and networks consume 10% of the world's electricity.
3,000 TWh 'wasted' on "just information".

Yes, all computing requires energy. As the number of computations increases, so does the energy consumption. None of this is in dispute.

By definition, then, Proof of Work is designed to consume energy.

Proof of work (PoW) is a form of cryptographic proof in which one party (the prover) proves to others (the verifiers) that a certain amount of a specific computational effort has been expended.

Aah, we're getting closer. At least we've progressed from 'designed to waste energy'.

However, your link text badly misquotes the source. Here's what it says (my bold): "The purpose of proof-of-work algorithms is not proving that certain work was carried out or that a computational puzzle was "solved", but deterring manipulation of data by establishing large energy and hardware-control requirements to be able to do so."

PoW was not designed to consume energy. PoW was designed to provide security - and reliable security unavoidably requires a lot of energy - just like Fort Knox as described above.

What really matters is how efficiently these computational cycles are being used. So it's sensible to compare the energy expenditure per transaction . A single BTC transaction consumes around 703 kWh, whereas 100,000 VISA transactions requires around 149 kWh (source). The efficiency difference is just astounding, with BTC transactions consuming 471,812 times the energy of a VISA transaction. Can you really tell us that you think this isn't horribly wasteful?

ETA: To help put these numbers into perspective, a dishwasher uses around 1.5 kWh per load. Which means a BTC transaction uses around 466 dishwasher loads of electricity. My household does about one load of dishes per day, so a single BTC transaction uses more electricity than my household of 4 uses doing dishes for a year. Com'on, that's grotesque.

I think you know as well as I do that the Bitcoin vs Visa comparison is a completely lame and irrelevant comparison.

A Bitcoin transaction is an all-encompassing final settlement, it's the entire story, the end.

A Visa transaction is a small part of a complete transaction - it is not final settlement. Furthermore, Visa sits on top of a multitude of other banking, currency, security, etc. systems - it is very far from 'the entire story'. Aside from the obvious additional transaction elements leading to final settlement, Visa is dependent on the legitimacy of currency which is, in turn, dependent on Gov power which is, in turn, dependent on military power, etc. etc. etc. I doubt it's possible to calculate the true cost of a Bitcoin_equivalent_fully_accounted_to_final_settlement_Visa_transaction as it's distributed far and wide in a thousand pieces.

A Lightning transaction is probably a good-enough equivalent to a Visa transaction.

Nope! Not letting you just make that semantic shift. What part of "certain amount of a specific computational effort has been expended" don't you understand. The reason it's called Proof of Work is that it's designed to be computationally intensive. And the competitive nature of Bitcoin mining means that around 99.99% of this computational work is discarded (source). In very real, physical terms, computational effort == work == energy consumption. It is indeed quite accurate to say Bitcoin is designed to waste energy.

Nope. No, it's not accurate to say Bitcoin is designed to waste energy.

Did I not make it sufficiently clear that the sentence I quoted was also directly from your linked Wikipedia source ? It's just a few sentences below the sentence you quoted.

Look more closely, the 2x sentences do not contradict each other. This is hardly surprising given that they come from the same source. The sentence you quoted describes what PoW is. The sentence I quoted clarifies the purpose of PoW, ie. what it is designed to achieve.

Yes, Bitcoin does indeed consume a lot of energy. It was NOT designed with that as it's objective. It's an unavoidable consequence of what it is trying to achieve.

And please check your sources. Your latest source mainly quotes Paul Brady from EY. Here's what Google says: "Paul Brody is Global Blockchain Leader for EY (Ernst & Young). Under his leadership, EY is established a global presence in the blockchain space with a particular focus on public blockchains, assurance, and business application development in the Ethereum ecosystem."
An Ethereum guy hating on Bitcoin / PoW ? Not exactly impartial.

And the Bitcoin vs VISA comparison is absolutely fair. We're talking about monetary transactions. I enter my CC number, and the VISA transaction completes the order. Yes, there is some other overhead associated with these transactions. But the same is true for Bitcoin. Mining operations require buildings, and server infrastructure to manage and monitor the mining.

Good grief. Is that what you really think ? LOL

[LateStarter]

Note that the USD is a pretty poor UoA too - it's hardly a stable datum.

It's way more stable than Bitcoin ever has been or shows any sign of ever being. If I promise to give you US$1,000 a year from now or a decade from now I have a pretty good sense for what I'm getting into. Due to consistent inflation I can expect I won't be giving up quite as much value as I would be giving up if I gave you US$1,000 today, but the error bars around what US$1,000 will be worth in the short to medium term aren't actually that big. Compare that to if I promise to give you 0.1 BTC in ten years. I have literally no idea what I just promised. If you're right about BTC's long-term trajectory I might owe you a car or even a house. If I'm right I might owe you a pizza.

Well, yeah. I didn't claim otherwise (except for "or shows any sign of ever being" which is just an opinion).

My point was simply that the USD is not a stable datum. We generally measure things against a stable datum - and the USD ain't one, not even close.

We use the units we have. USD is a better unit of account than BTC because even though it is not a perfectly "stable datum" it's miles closer to being one than BTC ever has been or shows any signs of being. Yes, that's an opinion, but it's an informed one. Bitcoin has been much more volatile than all major fiat currencies for its entire existence. What evidence is there that this is at all likely to change going forward?

It's entire existence ? 15 years from a niche cypherGeek project to a $700B monster. Yes, unsurprisingly, that's been pretty volatile.

Evidence? Well, in general terms, big things tend to be less volatile than small things. As Bitcoin grows it is reasonable to expect that it should also become less volatile. That said, I'm as certain as I can be that there will be more major shocks to come along the way - it won't be a smooth passage.

There's a few Bitcoin volatility charts around. Don't know how good any of them are, but this one is fairly clear and covers the full lifetime:

https://buybitcoinworldwide.com/volatility-index/

Store of value is a little bit of a question mark. It works if you time your entry points correctly. ?
Not so. It works reliably if your timescale is appropriate.

There is far from sufficient data on this point. BTC has trended upward so far, but the track record just isn't there for most people to have any confidence it will stay that way in the long run. I have reason to expect an ounce of gold will hold its value pretty well over my lifetime because it has already done so for most of human history. BTC is a comparative blip in the timeline.

That, again, is a matter of opinion. Existing history + BitcoinUnderstanding is enough for some. It's enough for me.

And I clearly said it's currently too small and volatile for most people in the sentence following where you chopped me off in your 'quote'.

If you prefer to wait for a longer time period, maybe even one equivalent to 'human history' to gather sufficient data, that's your choice. Knock yourself out.

If I'm looking for something to serve as a store of value I will indeed base my decision on whether that thing has a reasonable history of being a store of value, yes. Thanks for your approval.

You're welcome :-)

[MustacheAndaHalf]

Whether or not you think bitcoin is a waste of energy based on usefulness is one thing.

What you can't argue though, is that bitcoin was literally designed to waste energy.  That's what proof of work is.  It requires the waste of energy to generate encrypted hex numbers - solving the hash.  Proof of work requires that nodes on a network provide evidence that they have wasted energy through expended computational power in order to achieve (theoretically) decentralized consensus.

A blockchain reward goes to the winner.  The other nodes do not "provide evidence that they have wasted energy".  They lose silently, without providing any evidence they did so.  The energy did not get thrown away, as you keep claiming with the word "waste", but rather went to securing the blockchain.  Bitcoin mining has to run at scale, at full speed, to prevent any smaller set of computers from creating a fake blockchain.

No, waste is an accurate word. Very close to 100% of the energy used by a CPU gets converted to heat. There's no physical end product coming out the end of a computer, just information. The heat generated is considered "waste heat" and it's a huge problem for data centers. A lot has gone into how to move all this waste heat, which is why large data centers are often located near bodies of cold water. Bitcoin's 95.5 TWh of energy consumption in 2022 pretty much all went up in heat. Physically speaking, it's no different than running a huge army of space heaters. Yes, it solved some math problems along the way and secured the block chain, but is that really worth the enormous energy expenditure?

Which is more likely: cpus use 0% energy, or you're confused?

https://forums.tomshardware.com/threads/what-is-the-average-cpu-power-effeciency.3548098/
https://en.wikipedia.org/wiki/Thermal_design_power

You do realize that the forum thread you posted proves my point, right?

CPUs are approximately 100% efficient at converting power to heat - practically every watt going under the IHS will ultimately come out as heat, though a small part of it will be dissipated by the PCB, traces and whatever is connected at the end of IO lanes.

Unless the goal of Bitcoin is to be a giant distributed resistive heater, all the "efficient" heat is waste heat.

You missed that poster being corrected:

You are confusing TDP with power
...
I think you are mixing up TDP (Thermal Design Power ) with power usage (Watts).
TDP is not a measure of power power consumption....even though TDP is correlated with power consumption. The more power CPU uses the higher the TDP.

Comparing the electrical and thermal energies doesn't tell you much either.
Take a FX8350, probably 100W of electrical and thermal power output.
Take an i5-3570k, probably 65W of electrical and maybe 90w of thermal power
...
Comparing Electrical to thermal power ratings just tells electrically how efficient it is great if you are looking at a heater, but it could bare no relationship to it's computational effectiveness, it's more likely to tell you how they measure TDP.

Cpus do not run on zero energy, nor do they generate free energy (65W vs 90W).  That's why I linked to the wikipedia entry for TDP, which also shows who was correct in that discussion.

I did not address TDP because it's not relevant to this discussion. From the Wikipedia you linked:

The thermal design power (TDP), sometimes called thermal design point, is the maximum amount of heat generated by a computer chip or component (often a CPU, GPU or system on a chip) that the cooling system in a computer is designed to dissipate under any workload.

TDP is about the capacity of cooling systems, and the maximum amount of heat they can remove to keep the CPU from overheating. I was being nice by skipping over this, because, frankly, it shows that you don't really know what you're talking about and are just grasping at whatever you can find online.

The fact is, almost 100% of the electricity consumed by CPUs (and GPUs, most of this stuff is actually using GPU farms), ends up as waste heat.

I spent a good amount of my career building large scale distributed systems at Google. I managed a service that ran on 100k CPU cores. TDP is absolutely essential because all those CPUs consume so much energy, and that energy ends up as heat. I became friends with a guy on the Google Bus who was a Thermal Engineer, and his entire job was designing industrial heat exchangers. Why did Google hire this guy and his team? Because some of our huge data centers were cooled by river water.

So when I reference a BTC transaction consuming 703 kWh (estimates vary, so I picked on one the lower end), which you conveniently ignored, I'm talking actual power consumption by the BTC ecosystem, not the TDP. This is actual used energy per transaction, which is converted to heat and dissipated by individual cooling systems.

Your anecdotal experience suggests you're more familiar with cpus and heat than I am, so do you have a high quality source stating that nearly 100% of electrical energy used by cpus is turned into heat?

This thread began with GuitarStv's post and my reply, and was focused on the use of the word "waste" in reference to heat vs energy usage.  You did not "reference a BTC transaction consuming 703 kWh" in this series of replies.

If your sole concern is proof of work and wasted energy, do you like Ethereum and dislike Bitcoin?

[GuitarStv]

If your sole concern is proof of work and wasted energy, do you like Ethereum and dislike Bitcoin?

PoS should be much less wasteful than PoW, which is designed to be wasteful.  It's a step in the right direction.

[Juan Ponce de León]

If your sole concern is proof of work and wasted energy, do you like Ethereum and dislike Bitcoin?

PoS should be much less wasteful than PoW, which is designed to be wasteful.  It's a step in the right direction.

I'll chime in here.  PoS are the actual scams, where you are purely exit liquidity for 'founders' who created the coin out of thin air at no cost to themselves, then pay a yield to the largest holders ie/ themselves.   Proof of work is what gives Bitcoin it's decentralization and value.  The largest holders are not the beneficiaries of the supply issue, those who do the work are.

IMO energy usage for bitcoin is not 'wasted' energy, it is the goal of just about any industry to take input energy and turn it into economic value.  Bitcoin mining is driving forward cleaner and cheaper energy adoption and monetizing it.  Small countries with natural resources to develop like hydro and volcanic thermal energy will be able to use Bitcoin mining income to help pay for developing these energy sources for the benefit of their societies.  Making electricity in remote places is very inefficient, to get the electricity to where it's needed.  Think of Bitcoin as like a giant battery, you can turn energy into hard currency and then later use that currency as you see fit.  It's like finding oil or gold.

[GuitarStv]

Think of Bitcoin as like a giant battery, you can turn energy into hard currency and then later use that currency as you see fit.  It's like finding oil or gold.

What the actual fuck?

Bitcoin is nothing like a giant battery.  The wasted energy from bitcoin is never recovered or available to do real work.  Assuming bitcoin even has value in the future the best you can hope for is to use it to pay someone to generate more energy in the future.

[Juan Ponce de León]

Think of Bitcoin as like a giant battery, you can turn energy into hard currency and then later use that currency as you see fit.  It's like finding oil or gold.

What the actual fuck?

Bitcoin is nothing like a giant battery.  The wasted energy from bitcoin is never recovered or available to do real work.  Assuming bitcoin even has value in the future the best you can hope for is to use it to pay someone to generate more energy in the future.

Yep about the kind of response I figured I would get.  I'll be leaving now LMAO

[FINate]

Your anecdotal experience suggests you're more familiar with cpus and heat than I am, so do you have a high quality source stating that nearly 100% of electrical energy used by cpus is turned into heat?

How about the Laws of Physics, specifically the First Law of Thermodynamics and the conservation of energy. Energy can be converted to mass, and vice versa, but mass and energy as a whole cannot be created or destroyed. That is, energy and mass are conserved.

A CPU has no moving parts (no kinetic energy). Nor does it store up energy for later use* (potential energy). It produces no sound (sound waves are really another kind of kinetic energy), nor does it produce any physical byproduct (mass).

For the sake of simplicity, consider a computer with no fans or hard disk drives (the last vestiges of moving parts in modern computers). Install a Watt meter to measure energy consumption and run a computationally intensive task such as Bitcoin mining or benchmark test or whatever you prefer, and observe the Watt meter spike. Where did this energy go, since (as mentioned above) there are no moving parts, no battery, energy isn't somehow being recycled back to the grid, and no physical product is being produced, then it has to be asked... how is energy and mass conserved? The answer is waste heat.

Or, as Scientific American puts it (https://blogs.scientificamerican.com/observations/why-do-computers-use-so-much-energy/):

There are several reasons, but one of the most important is that it is far cheaper to keep computer servers cool when they’re on the seafloor. This cooling is not a trivial expense. Precise estimates vary, but currently about 5 percent of all energy consumption in the U.S. goes just to running computers—a huge cost to the economy as whole. Moreover, all that energy used by those computers ultimately gets converted into heat. This results in a second cost: that of keeping the computers from melting.

*While there may be some small capacitors and CMOS batteries, these have very little capacity and aren't storing up for later use.

[LateStarter]

Think of Bitcoin as like a giant battery, you can turn energy into hard currency and then later use that currency as you see fit.  It's like finding oil or gold.

What the actual fuck?

Bitcoin is nothing like a giant battery.  The wasted energy from bitcoin is never recovered or available to do real work.  Assuming bitcoin even has value in the future the best you can hope for is to use it to pay someone to generate more energy in the future.

Yep about the kind of response I figured I would get.  I'll be leaving now LMAO

TBH, I'm struggling a bit with the battery analogy.

I agree with the benefit Bitcoin can bring to electricity generation in remote places. Bitcoin in this context is a Store of Value, and I think everyone here understands the concept of Store of Value - no analogy required.

Maybe, to a less financially savvy audience, the analogy of a 'value battery' (as opposed to a conventional 'energy battery') might be helpful. Here on MMM, I think it confuses more than it clarifies - and invites (wilful?) misinterpretation.

[Telecaster]

Small countries with natural resources to develop like hydro and volcanic thermal energy will be able to use Bitcoin mining income to help pay for developing these energy sources for the benefit of their societies.  Making electricity in remote places is very inefficient, to get the electricity to where it's needed.  Think of Bitcoin as like a giant battery, you can turn energy into hard currency and then later use that currency as you see fit.  It's like finding oil or gold.

The thing about Bitcoin is that it is always going to do something great...someday.   If this is a good idea, how come no one has done it?  And before you can say "El Salvador" they've only talked about doing it someday.

I suspect the reason is that Bitcoin mining is a shit business.   US-based Bitcoin miners have lost epic amounts of money the last few years.   I'm not aware of any publicly traded US Bitcoin miners who are profitable.   Maybe the recent runup in prices will change that.   Regardless, it is at best a marginal business.   In the meantime, the miners are locked in a global arms race trying up their hashrates or be eliminated by somebody else who does.   All the while starting down the barrel of the halving.   

[Glenstache]

Small countries with natural resources to develop like hydro and volcanic thermal energy will be able to use Bitcoin mining income to help pay for developing these energy sources for the benefit of their societies.  Making electricity in remote places is very inefficient, to get the electricity to where it's needed.  Think of Bitcoin as like a giant battery, you can turn energy into hard currency and then later use that currency as you see fit.  It's like finding oil or gold.

A less generous interpretation of the quote is that small countries can be exploited for BTC mining. Would they spend the money for excess energy or enough to support the mining CPUs? This is only castable as a public good once the energy is diverted from the BTC mining and assuming that the energy generation is constructed such that it does not cause other harms. How many people were displaced to build the hypothetical hydroelectric plant? What were the environmental controls on the drilling program and massive water use associated with the volcanic geothermal plant? I feel like we have heard this script before from the East India Company.

[LateStarter]

Small countries with natural resources to develop like hydro and volcanic thermal energy will be able to use Bitcoin mining income to help pay for developing these energy sources for the benefit of their societies.  Making electricity in remote places is very inefficient, to get the electricity to where it's needed.  Think of Bitcoin as like a giant battery, you can turn energy into hard currency and then later use that currency as you see fit.  It's like finding oil or gold.

The thing about Bitcoin is that it is always going to do something great...someday.   If this is a good idea, how come no one has done it?  And before you can say "El Salvador" they've only talked about doing it someday.

I suspect the reason is that Bitcoin mining is a shit business.   US-based Bitcoin miners have lost epic amounts of money the last few years.   I'm not aware of any publicly traded US Bitcoin miners who are profitable.   Maybe the recent runup in prices will change that.   Regardless, it is at best a marginal business.   In the meantime, the miners are locked in a global arms race trying up their hashrates or be eliminated by somebody else who does.   All the while starting down the barrel of the halving.

It's, at least, started :  https://www.coindesk.com/consensus-magazine/2023/04/17/gridless-mining-extends-power-in-africa/

But I guess, like everything else new, these things take time.


As for general Bitcoin Mining: what you're describing is a free market, ie. a tough world where only the best, fittest and most efficient survive. That's a good thing - right ?

[LateStarter]

Small countries with natural resources to develop like hydro and volcanic thermal energy will be able to use Bitcoin mining income to help pay for developing these energy sources for the benefit of their societies.  Making electricity in remote places is very inefficient, to get the electricity to where it's needed.  Think of Bitcoin as like a giant battery, you can turn energy into hard currency and then later use that currency as you see fit.  It's like finding oil or gold.

A less generous interpretation of the quote is that small countries can be exploited for BTC mining. Would they spend the money for excess energy or enough to support the mining CPUs? This is only castable as a public good once the energy is diverted from the BTC mining and assuming that the energy generation is constructed such that it does not cause other harms. How many people were displaced to build the hypothetical hydroelectric plant? What were the environmental controls on the drilling program and massive water use associated with the volcanic geothermal plant? I feel like we have heard this script before from the East India Company.

A more generous interpretation of the quote is that small countries could benefit massively and experience immediate and everlasting prosperity, but groundless speculation has little value imo.

Alternatively, we could look at what's actually proposed and is starting to happen - albeit in a small way to date.  https://www.coindesk.com/consensus-magazine/2023/04/17/gridless-mining-extends-power-in-africa/

[Scandium]

The latest latecomers to Bitcoin will lose zero purchasing power in the act of transferring their fiat to Bitcoin. Example: You have $1M in 2030, and $1M could buy a Ferrari - you transfer it to Bitcoin - your Bitcoin will buy that same Ferrari (even if $1M = just 1BTC).
You will have missed out on the purchasing power gains you could have made by buying that 1BTC today for $35k, but Bitcoin hasn't taken anything away from you. You just made a bad decision today.
Of course, I could be wrong, it could all go to zero. In which case, you made a good decision today.

If inflation/debasement continues to be a problem, your $1M (and equivalent BTC) might only buy a Prius in 2030. Again, Bitcoin hasn't taken anything away from you - the $ took it.

So it's basically just a bet that this will happen, in this specific way, and you'd end up astronomically wealthy. While everyone else who do nothing just see no significant change, just switch to BTC when it happens. Well, then the worst case scenario doesn't really sound that bad to me. I think i'll take my chances (mostly because I think this is completely idiotic and will never happen, but even if it does; "eh, whatever").

And more important; I obviously don't keep all my wealth in "debased fiat"! Duh, that's why we all here have stocks; the value will grow faster than inflation (what you call debasing..). So like your example I might have 1BTC worth today in stocks, and in the future when that 1BTC buy a ferrari, I might be able to sell the same number of stocks and buy the same ferrari. So what did I loose?! I don't see that being any less likely than the same trajectory for BTC (ok, I see it as more likely obvi, or I'd buy BTC as well..). So comparing BTC vs cash in the mattress is disingenuous; nobody is saying that won't loose value. Even the most finance illiterate person knows inflation exists (and then they buy gold..).

You're saying: BTC value will grow faster than inflation, faster then the market, "everyone" will switch to crypto in the future (even though it's a huge PIA), AND; that crypto will be exactly the one you've put your value into, rather than the gazillion other shitcoins out there! Sorry, that seems like a really far-fetched bet, especially when as we discussed, worst case is you end up about the same as I would have anyway! There is extremally little reason to hoard BTC now! What about ether? or any of the others??

[LateStarter]

The latest latecomers to Bitcoin will lose zero purchasing power in the act of transferring their fiat to Bitcoin. Example: You have $1M in 2030, and $1M could buy a Ferrari - you transfer it to Bitcoin - your Bitcoin will buy that same Ferrari (even if $1M = just 1BTC).
You will have missed out on the purchasing power gains you could have made by buying that 1BTC today for $35k, but Bitcoin hasn't taken anything away from you. You just made a bad decision today.
Of course, I could be wrong, it could all go to zero. In which case, you made a good decision today.

If inflation/debasement continues to be a problem, your $1M (and equivalent BTC) might only buy a Prius in 2030. Again, Bitcoin hasn't taken anything away from you - the $ took it.

So it's basically just a bet that this will happen, in this specific way, and you'd end up astronomically wealthy. While everyone else who do nothing just see no significant change, just switch to BTC when it happens. Well, then the worst case scenario doesn't really sound that bad to me. I think i'll take my chances (mostly because I think this is completely idiotic and will never happen, but even if it does; "eh, whatever").

The first sentence, pretty much, yes. I should clarify that 'astronomical wealth' is not my main nor only objective. I believe that Bitcoin is a force for good, and fairness, and honesty - and I'm happy that every £GBP I transfer to BTC is pushing it forward a little more.

I don't know why you say "everyone else" will "switch" "when it happens". I clearly described my expectation as a gradual transition, people gradually get on board, gradually allocate a little more to BTC, etc. I made no mention of "everyone" or a "switch" and I have no concept of a time "when it happens" -  it's been happening for years, it's happening now and I expect it to continue to happen for some considerable time.

And more important; I obviously don't keep all my wealth in "debased fiat"! Duh, that's why we all here have stocks; the value will grow faster than inflation (what you call debasing..). So like your example I might have 1BTC worth today in stocks, and in the future when that 1BTC buy a ferrari, I might be able to sell the same number of stocks and buy the same ferrari. So what did I loose?! I don't see that being any less likely than the same trajectory for BTC (ok, I see it as more likely obvi, or I'd buy BTC as well..). So comparing BTC vs cash in the mattress is disingenuous; nobody is saying that won't loose value. Even the most finance illiterate person knows inflation exists (and then they buy gold..).

Well yes, I get that of course - I was trying to be concise. The point was just that if the $ has less purchasing power in 2030, the value was lost to the $, and not lost to Bitcoin.
I hope your confidence that stock values will grow faster than inflation comes good for you (and me).

I refer to 'debasing' as that is the problem that Bitcoin addresses. Inflation isn't the root problem - it's a symptom. Also, inflation has other causes, eg. supply shortages, that Bitcoin does not address.

You're saying: BTC value will grow faster than inflation, faster then the market, "everyone" will switch to crypto in the future (even though it's a huge PIA), AND; that crypto will be exactly the one you've put your value into, rather than the gazillion other shitcoins out there! Sorry, that seems like a really far-fetched bet, especially when as we discussed, worst case is you end up about the same as I would have anyway! There is extremally little reason to hoard BTC now! What about ether? or any of the others??

My expectation is that Bitcoin will grow waaaay more than inflation and the market.
No, again, I didn't say "everyone" and I don't know why you keep insisting on a "switch". See above.
Bitcoin is very different. The briefest, generalised, approximate description of the difference = decentralised and network effect.
"worst case is you end up about the same as I would have anyway!" ?  I don't know what this means.

[MustacheAndaHalf]

If your sole concern is proof of work and wasted energy, do you like Ethereum and dislike Bitcoin?

PoS should be much less wasteful than PoW, which is designed to be wasteful.  It's a step in the right direction.

I'll chime in here.  PoS are the actual scams, where you are purely exit liquidity for 'founders' who created the coin out of thin air at no cost to themselves, then pay a yield to the largest holders ie/ themselves.   Proof of work is what gives Bitcoin it's decentralization and value.  The largest holders are not the beneficiaries of the supply issue, those who do the work are.

Is Ethereum a scam because it uses proof of stake?

[Scandium]

No, again, I didn't say "everyone" and I don't know why you keep insisting on a "switch". See above.
Bitcoin is very different. The briefest, generalised, approximate description of the difference = decentralised and network effect.
"worst case is you end up about the same as I would have anyway!" ?  I don't know what this means.

I keep saying "everyone" because BTC will only increase (significantly) in value if enough/large number of people adopt it as means of exchange. I don't know what the number of people, or percentage is. And clearly BTC can incase in "value" to stupid levels despite this. But right now that is only a greater fool game, to have real value BTC has to be useful for something. Right now only being useful to buy heroin and receive ransomware extortion is not very applicable to the general populace.

Agree my last sentence was poorly phrased. I think I meant worst case I end up about the same level of wealth I would have with stocks, I don't see that as a very high risk. Not enough to gamble on BTC.

[Juan Ponce de León]

If your sole concern is proof of work and wasted energy, do you like Ethereum and dislike Bitcoin?

PoS should be much less wasteful than PoW, which is designed to be wasteful.  It's a step in the right direction.

I'll chime in here.  PoS are the actual scams, where you are purely exit liquidity for 'founders' who created the coin out of thin air at no cost to themselves, then pay a yield to the largest holders ie/ themselves.   Proof of work is what gives Bitcoin it's decentralization and value.  The largest holders are not the beneficiaries of the supply issue, those who do the work are.

Is Ethereum a scam because it uses proof of stake?

Absolutely.  I think like ~70% was premined for Vitalik and his mates and now they changed it so the large holders get the lions share of the yield (ie/ themselves) instead of PoW miners.  And they get to do this under the guise of 'saving energy' LMAO.  Bitcoin is the only real asset IMO, apart from a select few other PoW projects the rest are fairly obvious grifts/scams created out of thin air to dump on retail for huge profit when the bull market comes around.

Ethereum and all the other 'defi' chains like it are also the enabler coins that enable all the more obvious scams.  99% of defi I would say is ponzi schemes and scams for founders to dump on retail or rug pull them.  That said I have made a lot of money in defi the last few years LMAO.

[MustacheAndaHalf]

Your anecdotal experience suggests you're more familiar with cpus and heat than I am, so do you have a high quality source stating that nearly 100% of electrical energy used by cpus is turned into heat?

How about the Laws of Physics, specifically the First Law of Thermodynamics and the conservation of energy. Energy can be converted to mass, and vice versa, but mass and energy as a whole cannot be created or destroyed. That is, energy and mass are conserved.

A CPU has no moving parts (no kinetic energy). Nor does it store up energy for later use* (potential energy). It produces no sound (sound waves are really another kind of kinetic energy), nor does it produce any physical byproduct (mass).

For the sake of simplicity, consider a computer with no fans or hard disk drives (the last vestiges of moving parts in modern computers). Install a Watt meter to measure energy consumption and run a computationally intensive task such as Bitcoin mining or benchmark test or whatever you prefer, and observe the Watt meter spike. Where did this energy go, since (as mentioned above) there are no moving parts, no battery, energy isn't somehow being recycled back to the grid, and no physical product is being produced, then it has to be asked... how is energy and mass conserved? The answer is waste heat.

A user named "FINate" on this forum isn't a "high quality source" for me.

Or, as Scientific American puts it (https://blogs.scientificamerican.com/observations/why-do-computers-use-so-much-energy/):

There are several reasons, but one of the most important is that it is far cheaper to keep computer servers cool when they’re on the seafloor. This cooling is not a trivial expense. Precise estimates vary, but currently about 5 percent of all energy consumption in the U.S. goes just to running computers—a huge cost to the economy as whole. Moreover, all that energy used by those computers ultimately gets converted into heat. This results in a second cost: that of keeping the computers from melting.

*While there may be some small capacitors and CMOS batteries, these have very little capacity and aren't storing up for later use.

A random article from Scientific American might not be high quality source, but the author of that article is a subject expert.  I'm not sure why he needed to use the qualifier "ultimately" in that sentence, but he stated that the electrical energy all comes out as waste heat.  So you are right to say all energy from computers is emitted as heat - waste heat.

"David Wolpert is resident faculty at the Santa Fe Institute where he uses nonequilibrium statistical physics to analyze the thermodynamics of computing systems."
https://www.scientificamerican.com/author/david-wolpert/

[MustacheAndaHalf]

Is Ethereum a scam because it uses proof of stake?

Absolutely.  I think like ~70% was premined for Vitalik and his mates and now they changed it so the large holders get the lions share of the yield (ie/ themselves) instead of PoW miners.  And they get to do this under the guise of 'saving energy' LMAO.  Bitcoin is the only real asset IMO, apart from a select few other PoW projects the rest are fairly obvious grifts/scams created out of thin air to dump on retail for huge profit when the bull market comes around.

Ethereum and all the other 'defi' chains like it are also the enabler coins that enable all the more obvious scams.  99% of defi I would say is ponzi schemes and scams for founders to dump on retail or rug pull them.  That said I have made a lot of money in defi the last few years LMAO.

You need to be more specific.  Vitalik owns 0.2% of circulating Ethereum (0.284M out of 120.251M ETH), which I would not call "the lion's share" of anything, and you haven't specified who these "mates" are.
https://coinpaper.com/2255/vitalik-buterin-net-worth-the-complete-breakdown-of-ethereum-founder-s-on-chain-holdings

"guise of saving energy. LMAO" doesn't convince me of anything.  It's your opinion, not evidence of a scam.

Do you blame the fake coin scammers, or the Ethereum blockchain they used?  By the same "token" (ha!), Bitcoin is responsible for ransomware attacks.  That said, I would agree with you Ethereum bears some responsibility for providing a platform on which other crypto currencies can be built.  But on the flip side, that also fosters innovation.

I think crypto needs to be weighed on "market cap", the number of coins times their price (on publicly traded markets).  Some of the large successes of tokens based on Ethereum (like Axie Infinity) outweigh the tiny market caps of the many scam coins.
https://www.coindesk.com/learn/which-crypto-projects-are-based-on-ethereum/