> Here's a thought experiment: Would you feel good if someone read your blog and learned something from it? Probably yes. Would you feel good if they passed along something they learned to others, likely in their own words? Probably yes. What if they couldn't recall, or didn't choose to reference where they saw it? Probably still yes, although (speaking personally) my ego would probably prefer they did credit. What if the reader who passed the learning along was the ai?
This is definitely an interesting way of looking at it. If your blog ends up in pre-training data, it will become part of the AI. Or if not, an AI might still fetch it when a user asks something specific. It reminds me of voting in a democracy, which many people consider a right and a duty - but in reality a single vote is hardly going to swing any election.
> But then I stopped because I had no return from it.
> The main reason was to get back into the habit of writing, and by extension thinking. ChatGPT has weakened my thinking capacity.
I can definitely relate, and find this true as well. While a (monetary) return has never a big focus for me. It's still hard to keep going over time with motivations around self improvement, accountability, etc.
To summarize the current Dutch personal income system: besides income from salary and income from own business (these are taxed quite high), income from investments (stocks, passive investments, real estate excluding your first home) is taxed quite low. The amount is simply a percentage based on the value (as per the start of the year) of your investments.
So in the Dutch tax system there is no difference between realized and unrealized gain. As such it doesn't matter when you buy/sell your investments. It doesn't impact your tax burden. The effect you get is that everyone's wealth just slowly erodes away, just like with inflation (unless your yield outpaces that).
It is essentially a wealth tax system. But I wouldn't call it low: currently, 6.17% fictional yield x 32% tax rate = 2% wealth tax rate - it is at the high end among countries with a wealth tax (https://en.wikipedia.org/wiki/Wealth_tax)
One important thing the article omits is that there is threshold under which you don't pay anything in box 3. If you own less than 57.000 eur (or 114k for a family) you don't pay this tax.
That seems like a reasonable approach. That's much preferable to a tax on realized gains and a tax on unrealized gains. In the US when you buy a mutual fund you're already paying a "tax", for example, Fidelity eats 0.83% if you invest in their FSLVX mutual fund [1].
That's not a tax, that's the expense ratio, which is basically describing fees captured by the fund manager. Funds accessible to Dutch investors involve similar ERs. It's not an alternative.
It can be thought of the same way, but not from the perspective that's under discussion. As such it doesn't really add anything except a new perspective. Why are you introducing it, what does it add?
Calling the expense ratio a tax is like calling the labor cost of your car repair a tax. The expense ratio is what the fund manager is charging to cover their labor and expenses. It's not a tax on the transaction going to the government.
These laws may very well be terrible, but no need to mention on an internet forum you want to help (hire?) someone to mass murder people involved in making them. Jokes and sarcasm don't always land as intended.
As to a more constructive path: bureaucracy all over EU is definitely considered a big problem (for startups, and for many others) and there are a bunch of movements aimed at addressing them at all kinds of levels. For example look at the eu acc movement.
Reminds me of MSN back in the day. When I was a kid, there was a big trend of rushing home after school to log into this chat messenger on the computer, everyone would be online for a couple of hours at least.
I've always had issues with newer versions of node not running projects written with older node without upgrading the project and hoping all dependencies can be updated.
Fortunately, a lot of the earlier struggles came down to binary libraries. At this point, a lot of externalized libraries are now using webassembly targets or built-ins. SQLite being one of the more popular exceptions.
For the most part, I haven't had too much trouble the past couple years taking an existing project and running on a newer runtime. I have seen a lot of incompatible library breaks trying to update dependencies though.
Many node packages will have incompatible api breaks across years of development. More so if your TS types have changed in incompatible ways and you're stuck re-jiggering your code. Can usually resolve in a few days. My advice is to, in general plan on one day a month to upgrade all dependencies to their latest version, which reduces the exposure a lot and makes it easier to deal with than years later. It's worse on front end projects that use node for build tooling.
Ironically, I think the worst libraries for breaking changes are actually the testing libraries themselves. Having to jump 2-3 major versions to update to latest is an exercise in extreme frustration.
I appreciate a lot of what Deno is doing in their direction, though I've felt a few breaking changes along the way there too.
Note that it i18n isn't implemented correctly by any of the browser date pickers. Date controls aren't context sensitive like humans would write dates, they're client-culture-settings sensitive. So for anybody wanting to interact with both US sites and local sites (presumably quite a few people on the planet), they'll never be able to have appropriate browser date controls - either they get to have US controls on local sites, or local controls on US sites - and both are quite confusing, especially before you open the date control. Unopened date controls just show the client-culture-localized date, so if that doesn't match the site culture... it's going to be a mess.
Definitely not, from experience. Browser widgets need to be context sensitive, not client sensitive. There are (at least!) two simple reasons to see that: firstly, non-browser site provided controls are more common, and those are context sensitive, so it's quite unusual and surprising when a date-widget suddenly is not context sensitive merely because it's using the browser default. Secondly, date controls display dates even when unopened, and in that mode - the default, initial mode upon page load - they look like plain text with some mild styling to indicate interactivity. Dates in plain text should behave like other dates in plain text - i.e. context-sensitively.
To reiterate, there is an obvious, correct implementation here: let the site specify the content culture much like it does the language, and fall back to the user's choice when unspecified. The spec is asking for user confusion and data corruption as-is, which contributes to why usage of date controls remains fairly low.
This is missing the point to a degree that makes me think you're being intentionally obtuse, but maybe you're just ignorant so I'll bite. Banking computer errors can easily be rectified by humans, banks are regulated, your funds are at least partially guaranteed by the government (depending on where you live). The degree to which you're trusting computer programs with your finances is orders of magnitude less than with cryptocurrency where it's possible to lose any amount $ of asset value in an instant with absolutely no means of recourse.
Your bank analogy is silly and nowhere near analogous.
>CitiBank can't get the money back they accidentally transferred to another company.
Given it was an accidental early repayment of a loan, this isn't quite the slam dunk you think it is. If they had paid a company they didn't owe money to, they could get the money back through the courts.
The reason was not because of a repayment but because you wouldn't expect a respectable bank like CitiBank to do such a mistake.
> “To believe that Citibank, one of the most sophisticated financial institutions in the world, had made a mistake that had never happened before, to the tune of nearly $1 billion, would have been borderline irrational,” he wrote.
> I and OP are saying, the future will look more like crypto looks today. Not a bright future.
I don’t agree. I trust that loopholes like that will be slowly rectified with legislation if not present today.
In fact, it’s likely that crypto will (problematically?) be heading the same way. There was a recent case of a crypto buff who found a bug in some project and made off with a few $Million and I think the courts said he could be arrested and expected to return it, just as if he made off with cash. Importantly, they basically said “blockchain isn’t the source of truth to the courts” which was the guys defense. IMO a bright future for people, but not for a crypto venture.
> he could be arrested and expected to return it, just as if he made off with cash.
You have cash in your house and someone breaks in to steal everything. The insurance will _maybe_ cover your loss given that you secured it with basic security. _Maybe_ the police will investigate and arrest the burglar.
But even in this situation, you were better off putting your savings in any bank account where any fraudulent transaction can be reverted with a button.
Now, you have your crypto wallet. It gets emptied by some random bot. Well, you are as fucked than with your cash, except that nobody will cover your loss and nobody will investigate your case since the burglar is probably from another country.
By cash I meant fiat. But yea crypto adds a lot of risk to storing your monies.
You can insure the crypto you have. It’s probs expensive to the point of being not worth it.
People investigate crypto hacks though. And if the perpetrators are in a jurisdiction that you have some legal availability to you can totally use legal means. Basically any western nation will allow such a suit.
Coinbase shady stuff around listings has been an open secret in crypto, everyone knows about it. Dates all the way back to LTC listing and probably earlier.
What article is claiming is based on a misunderstanding of how Bitcoin works, this really is an odd way of thinking about it.
If half of all people stop sending bitcoin around, the amount of electricity used doesn't go down by 50%. So you sending or not sending bitcoin doesn't impact the electricity spend by miners at all.
Miners mine to secure the network, there is not a certain amount of electricity needed per transaction.
But, the only purpose of mining -- the whole purpose of the blockchain -- is to facilitate transacting.
So if the network can only do X transactions per day, and it costs $Y to run the network, it seems fair to use a "cost per transaction" to describe that inefficiency.
Kind of like how I could represent the total cost of ownership of a car (purchase price, oil changes, tire changes, big repairs, fuel) in terms of $ per mile, even though out of all those costs, only fuel is directly consumed by driving a single mile.
It is incorrect to assume that the only, or even the most important, purpose of bitcoin is for transactions. Bitcoin users primarily hold Bitcoin as a store of value or speculative savings technology, typically held over long periods of time (years) with an expectation of price appreciation at the expense of short-term volatility.
It is not, as many on HN have correctly pointed out, a viable transactional currency for most use cases due to price volatility, taxation related friction, limited real-world adoption for payments or transaction costs. The only compelling transactional use cases I know of are censorship resistant payments (e.g, Wikileaks) or high value international funds transfers outside G8 countries where wires are slow and risky.
Most Bitcoin is held by savers or speculators over long periods and transactions are infrequent. Therefore the primary purpose of Bitcoin mining is securing the network from bad actors. Bitcoin is a secure vault on the internet. Just because people put money in and take money out of a vault doesn’t mean the purpose of a vault is transactions. It is security against 51% attacks.
Therefore, the appropriate measure is not cost per transaction. It is cost per total value secured.
I didn't say the only purpose of Bitcoin was to conduct transactions, but that the only purpose of mining (and the blockchain) was to do so.
Specifically, mining exists to ensure that if you send me Bitcoin, I can be quite confident you haven't sent the same Bitcoin to somebody else. All that expenditure is there to guarantee nobody double spends. It facilitates trustworthy transactions.
Now, it's fair to say that in a way, that also protects people who are just sitting on their Bitcoin not transacting it, since their Bitcoin wouldn't be worth anything if they didn't believe that they could transact if they wished to. But the literal, direct purpose of mining is to protect people receiving Bitcoin in trade, not people sitting on it, who are protected from theft by the secrecy of their private keys.
Mining hash rate is correlated with value in network. It is not correlated with transaction volume. If tx volume dropped by half it would not meaningfully impact the hash rate. If Bitcoin’s price were to drop by half the hash rate would definitely fall.
For now, that's true, since miners are mostly paid with newly minted BTC. The payout for the job of mining is currently based on BTC's valuation, but the reason for the mining is to secure the transactions. That also aligns with its design.
Why else would Satoshi design Bitcoin's block reward to slowly dwindle towards zero? Apparently in his vision, the eventual steady state for Bitcoin is to be supported entirely by demand for block space (aka, transaction volume), with no correlation to "value in network".
Edit: to put a finer point on my question...
Does the transaction-fee-only mining model work?
If it does work, isn't the current block reward wasteful, funding tens of millions of dollars a day worth of mining, when the fees set by competitive demand for block space are a fraction of that? If fees alone are going to be enough to secure the network adequately, why can't Bitcoin adopt a more aggressive halving cycle and move to fee-only by, say, 2040 instead of 2140?
If it doesn't work, that means there will eventually be a problem with Bitcoin as it slowly moves toward that model. How can Bitcoin change its design to fix this, without compromising the "only 21M coins ever" promise that many of its stakeholders consider a fundamental strength?
Even in the future when mining rewards shift to tx fees, the purpose of the fees paid to miners will still be to secure the network primarily, not for the txs themselves.
> It is incorrect to assume that the only, or even the most important, purpose of bitcoin is for transactions.
Transactions may not be the only purpose of Bitcoin, but they are essential to the existence and security of Bitcoin. The block rewards for mining drop by half every few years and will eventually drop to zero. Soon, miners will be paid by transaction fees.
As Satoshi Nakamoto reportedly said: "In a few decades when the reward gets too small, the transaction fee will become the main compensation for nodes. I’m sure that in 20 years there will either be very large transaction volume or no volume."
Still, the primary purpose is most likely to be security of the network, not transactions which makes the cost to secure the network the better metric.
It's not clear whether they estimated how much of that money supply is actually still accessible (ie, how many dead wallets there are), and it's not a given that all of that money could actually be cashed out anyway (see the recent stablecoin fiascos). But lots of asset classes are vulnerable to runs, so let's assume that it's completely accurate, and Bitcoin is using all this power to meaningfully secure 2.9% of the world's money.
In order to secure that 2.9% of the money, Bitcoin generates more e-waste than a mid-sized country and uses roughly the same amount of energy as the entire country of Sweden every single year. And the problem is that even the most generous estimations of the amount of power that current financial markets use make that energy expenditure look really inefficient. Even pro-Bitcoin articles that I find online (ex. https://news.bitcoin.com/banking-system-uses-significantly-m...) are estimating that gold and banks each use in the neighborhood of 2-4x more power than Bitcoin annually. Which is a little bit embarrassing given that Investopedia above suggests that Bitcoin secures less than 10% the amount of money that gold secures. Similarly, it's tough to estimate how much money is held inside the financial sector (and of course, banks do way more than just secure value), but nobody I can find is giving estimates as low as 6-12%, instead I'm seeing some estimates as high as 25%.
I would not really classify gold as an environmentally amazing asset, but when considering gold we're still looking at a store of value that per-year is basically 2-5x more energy efficient per "dollar-secured" than Bitcoin is.
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And I feel like this should honestly be kind of intuitive to people, if anything people should be surprised that those numbers aren't worse. Bitcoin's design is such that it uses electricity proportional to the amount of profit available from mining. Until the mining rewards drop to zero, as Bitcoin rises in value the energy/hardware expenditure will also rise to match that value. If it doesn't then the value of the coin will eventually get high enough to make 51% attacks profitable.
So take a step back and think about that: a system that keeps its assets secure via a constant, massive expenditure of energy, that has to grow in energy expenditure as the price of the asset increases, and that has to be maintained in perpetuity in order to win an ever-escalating computing arms race against attackers... well, that's not a system that's exactly setting itself up to be an amazingly efficient store of value. It's not surprising that more traditional methods of running and securing databases and coordinating databases/transactions would be more efficient. It's not surprising that even a mostly physical asset would be more efficient to secure.
If we are comparing energy consumption of monetary systems I think we also need to look at the incumbent system’s costs with open eyes. The US dollar is the global reserve currency. It is no longer backed by gold. Instead it is backed by energy and military might in the form of the largest military industrial complex in the history of the world, responsible for more death and destruction of humanity and the environment than any other single entity over the last 70 years.
Unlike Bitcoin which currently consumes a greater proportion of green/renewable energy than virtually any other industry, the US military operates almost exclusively on carbon-emitting fossil fuels and has left a trail of dead and wounded, mostly innocent civilians with brown skin, whose only crimes were being born with our oil under their feet.
The US military is by far the single largest fossil fuel consumer in the world. Isn’t it curious that so little attention is focused on reducing the military’s dependence on fossil fuels? Where are the ESG proponents on the topic of the single largest contributor to global greenhouse gases?
Will you stay silent on the subject now that you are aware of the fully-loaded costs of supporting the USD as the world’s reserve currency?
By contrast, Bitcoin uses less energy than the world’s hair dryers to secure a considerable amount of value without the need for violence. If we consider the full extent of externalities required to secure the current monetary system, Satoshi’s invention of Nakamoto consensus starts to look like an alternative worth considering for at least some of the world’s wealth.
Without having to defend the USD as the global reserve currency, the US military would still have to exist, yes, but not nearly on the scale it does today.
Here is a US general Wesley Clarke explaining in his own words in 2000, before 9/11, how the US was already planning to invade 7 countries, all of whom had the nerve to act outside USD hegemony and some of which had the audacity to run their own central banks outside the approved system.
> and some of which had the audacity to run their own central banks outside the approved system
The US was not pushing to invade those countries in order to prop up the USD, it was pushing to invade them because of aid they were sending to other countries and to assert control over those areas. Where are you getting from that Wesley Clarke video that this was primarily about currency or that aid/funding going over Bitcoin would remove those motivations?
I mentioned elsewhere that you can buy and sell oil with Bitcoin, but it bears repeating: Bitcoin doesn't make exploitation, theft, or manipulation impossible. The United States does a lot of unethical stuff in order to secure value and control, and moving from USD to Bitcoin doesn't get rid of the concept of value. It doesn't mean that the United States would magically stop wanting to control the financial infrastructure around currency exchanges, it doesn't mean it would stop caring about raw materials and economic agreements with other countries.
There's nothing in the Bitcoin protocol that prevents it from being spent on guns, oil, or bribes. There's nothing in the Bitcoin protocol that prevents it from being funneled to dictators, or used to fund coups or tear down governments. The US didn't sabotage a bunch of countries after the Cold War because they had a different currency than us, it sabotaged them because they were Communist and the US didn't like the form of government they had chosen.
Of course, there would be benefits to a decentralized currency, and if Bitcoin was good at being a decentralized currency then there would be benefits to moving to Bitcoin. But even if Bitcoin was a good decentralized currency, moving to it would not magically get rid of any of the underlying motivations countries have for wielding geopolitical power in unethical ways. It's not that having more ways to move money around or make payments wouldn't probably be good for the world. But it wouldn't solve every problem, or even most problems.
Even with tariffs: a lot of the mechanisms the US uses for tariffs target shipping, currency exchanges, raw materials, and market access. If Bitcoin could help circumvent anything it would be tariffs, but in practice it's not even particularly amazing at circumventing them on a large scale. And I don't see much evidence that Bitcoin actually does get rid of motivations to prop up governments or artificially shape geopolitical environments around market access. That's not to say that the USD doesn't matter at all, just... not as much as you're characterizing. Cars don't run on Bitcoin, they run on cheap oil.
Please read up on the petrodollar and then take note that each of the countries General Clarke warned we would invade before 9/11 either had their own central bank not linked to the Bank of International settlements or they had the audacity to sell oil for something other than USD. The fact that the US military invaded these countries short after is not a coincidence.
> or they had the audacity to sell oil for something other than USD
This is unbelievably silly, you might as well say that they were targeted because they had the audacity to use different languages than English when they were selling oil. Their use of a currency other than USD was not the actual fundamental reason the US got mad at them, it was just a way that those countries moved their oil markets outside of US control.
The reason the US opposed those countries was because of who they were selling the oil to and to assert control over the oil market in general. Countries used other currencies other than USD in order to avoid US control. But the avoidance of US control was the part that the US was primarily mad about, not the specific currency involved. If USD went away, the US would not suddenly say, "we never cared about control in the first place, just the USD, so now you can sell oil to whoever you want and we won't pay attention to it."
The US would still oppose the countries selling oil to Bitcoin addresses that they didn't like. They would still want to target exchanges, they would still mark coins as dirty or get mad at countries who accepted coins from banned addresses or allowed dirty coins to transact, and they would still threaten countries that used techniques to try and anonymize who they were selling oil to or launder coins.
It's not about the USD, it's about the market. The USD just happens to be what the market uses right now, but the US government would still be "protective" of its market even if it used a different currency.
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I'm trying to come up with an analogy here that makes it more obvious what the error is that you're making... it's like saying that the USD is responsible for all bank heists because criminals in the US mostly target banks that are carrying primarily USD money, and if all banks switched to Bitcoin then criminals would stop trying to steal from any banks. It's like saying that most website fingerprinting happens in Javascript, and that can't be a coincidence, so if browsers used C++ for site scripting instead of Javascript then fingerprinting would go away.
But of course that would be ridiculous. Bank robbers want money, and they won't stop wanting money just because the money is in a different form. They're not targeting banks because they love USD specifically and uniquely, they're targeting banks because they want spendable money, and they would still want spendable money even if that money was Bitcoin.
And similarly, the US wants control over the oil market itself, and it will not stop wanting control over the oil market just because the oil is all being sold for a different currency. If the US switches to Bitcoin, it is still going to get mad at countries that are participating in markets outside of its control, because the USD is just a way that the US exerts control over markets, not the primary reason why it exerts control over markets.
Again, please understand that a mechanism for exerting control over a market is not the same thing as the primary reason for exerting control over a market.
USD is in part a method to exert control over the oil industry. You are asking me to believe that if it went away, the US would throw up its arms, get rid of a substantial portion of its military, and stop trying to control the oil market. That's not a reasonable claim to make, there is no possible world where this would play out the way you're describing.
> If we are comparing energy consumption of monetary systems I think we also need to look at the incumbent system’s costs with open eyes.
This is kind of goalpost moving. It's fair to ask about the human costs of other monetary systems, but I thought we were just trying to determine whether or not Bitcoin was efficient. It's not. But whatever, I'll follow that goalpost for a little while.
In isolation I do think that criticism of government policy to value/devalue and secure traditional currencies would be a good argument... if Bitcoin was well positioned to be a replacement for traditional currency.
But by your own admission Bitcoin isn't primarily a system for transactions, it's a system for storing value (actually I would argue it's primarily a speculative asset, not a traditional value store, but whatever, it doesn't matter). Bitcoin is not in its current state trying to replace dollars, because dollars need to be good at transactions, and Bitcoin is bad at transactions: it's wildly inefficient and environmentally unfriendly, it's slow and has high fees, it requires you to essentially move off chain to get anything approaching a normal transaction experience.
> Isn’t it curious that so little attention is focused on reducing the military’s dependence on fossil fuels?
If the biggest problem with the US military complex was its environmental cost, I would sleep better at night. I think a big reason why people don't talk a lot about how much carbon the military emits is because they're too busy talking about the massive human cost.
But this is kind of silly; a lot of Bitcoin's critics do criticize the military. I'm not here as part of a conspiracy to prop up government invasions of other countries, I just think your "currency" is bad and has fundamental flaws.
> Will you stay silent on the subject now that you are aware of the fully-loaded costs of supporting the USD as the world’s reserve currency?
Bitcoin is not going to replace USD. It's technologically incapable of doing that; it only supports 7 transactions per second and the last time anybody tried to fix that problem, the community hard-forked and had a giant schism. Because of course they did, Bitcoin isn't optimizing for transaction speed or transaction fees and most of the community doesn't care about any of the high-minded goals that Bitcoin was originally sold on. They just want an asset that goes up in value, so eventually they can convert it back into USD.
This could be a longer conversation, but while Bitcoin was originally based around some ideals like democratic access to currency and reduction of reliance on military/global power, I feel like it's kind of silly now that we can look at how Bitcoin has played out to say that the whole movement is still about raising people up and democratizing finance. Bitcoin is primarily a speculative market, it's not driven by ideals at this point.
Also just as a sidenote, but even in a world without traditional finance, most countries would still probably have a military; so even just the core idea of "tanks use too much power" is a little weird to me given that the US is not going to throw away all of its tanks if it transitions off of USD. Bitcoin does not get rid of the concept of exploitation, the US can still steal another country's oil and then sell it for Bitcoin.
> Bitcoin uses less energy than the world’s hair dryers
Not sure if you intended this to sound like a small amount of power, but that is a heckin large amount of power in order to secure such a small proportion of the world's wealth that it has next to no impact on the current exploitative measures taken to secure other existing currencies.
Bitcoin does not do enough to address the exploitative nature and human cost of securities like gold in order to justify its enormous energy expenditure, and there is little reason to believe that it is capable of scaling to the point where it could address those problems, and there is a ton of reason to believe that if it did manage to scale to that point it would in the process start consuming even more energy.
Even taking everything you've said at face value and assuming that Bitcoin is actually just straight-up liberating value from a highly exploitative system (rather than in more than a few ways participating in that same system) -- no; quite frankly, it is not worth using the same amount of energy as Sweden just to liberate a measly 3% of the world's wealth. That is too inefficient, it costs way too much power to do way too little. Come up with a more efficient way to secure that wealth, preferably one that actually scales.
No moving of goalposts here. OP claimed that Bitcoin’s primary purpose was transactions. I countered that the primary purpose was network security not txs, though pointed out two transaction use cases where Bitcoin beats every other payment method or monetary system.
You compared Bitcoin’s energy use to nation states. I compared it with hair dryers and one nation’s military, while pointing out that the US military’s energy consumption was only a small portion of it’s fully loaded cost in terms of externalities (others being: death, destruction, fossil fuel usage greater than any other entity to ever exist)
Again, no moving of goalposts. Simply fair comparisons of different forms of money.
Bitcoin never claimed to replace all uses of USD or gold, but it does reduce the total external costs in many important ways while providing the world with a powerful new alternative that is peer to peer, can be self-custodied, and has a fixed low inflation rate from now to infinity making it harder money than any that has ever existed.
> Bitcoin never claimed to replace all uses of USD or gold
If Bitcoin is not going to replace USD or get rid of the externalities of USD, then it is a waste of time to argue that Bitcoin is more efficient because it doesn't have those externalities. You are propping up a currency that is less efficient than gold and USD in terms of energy usage, and does next to nothing to prevent the negative externalities of those systems.
> but it does reduce the total external costs in many important ways while providing the world with a powerful new alternative
Bitcoin in its current form is not an alternative to USD, it is at best a system that complements USD, and I see no evidence at all that the existence of Bitcoin has reduced military presence anywhere in the world. You don't get to act like Bitcoin can subtract the negative externalities of USD from its environmental ledger when it is not currently reducing those externalities.
> peer to peer, can be self-custodies, and has a fixed low inflation rate from now to infinity making it harder money than any that has ever existed.
I'm not going to get into it, but I disagree that Bitcoin is P2P in the way that most people actually care about P2P; Bitcoin relies on a mostly functioning Internet, there is no way to securely make payments on the blockchain without eventually connecting back to the rest of the network and reaching network consensus. This is in contrast to what people usually think of when they talk about P2P networks, where information often does not need to propagate to the rest of the network at all. The most exciting work in P2P networks are in areas where constant consensus isn't required at all.
I also think the inflation claim is ridiculous given that Bitcoin's price fluctuates wildly. And the inflation is not "to infinity", Bitcoin is set to eventually run out of coins on purpose. The inflation is set to eventually reduce to zero. Bitcoin is a deflationary asset, not an inflationary asset. This is actually one of the things that turns out to be bad for Bitcoin as a currency, Bitcoin has been a good demonstration in a lot of ways as to why a deflationary asset is inherently not particularly well suited for transactions.
And again, by your own admission, Bitcoin is primarily a store of value, not primarily a currency designed to be regularly exchanged. If you want to talk about Bitcoin like it's an alternative to USD, then I'm going to criticize the fact that its transaction rate and per-transaction environmental costs are garbage and unscalable.
> Bitcoin in its current form is not an alternative to USD, it is at best a system that complements USD, and I see no evidence at all that the existence of Bitcoin has reduced military presence anywhere in the world.
I agree with this statement to date but in the future as Bitcoin grows in importance I believe we will all see a diminishment of USD petrodollar hegonomy.
> I'm not going to get into it, but I disagree that Bitcoin is P2P in the way that most people actually care about P2P
I wish you would get into it. To my knowledge most internet based p2p networks do rely on the internet. The internet allows for p2p networks that operate between any 2 players on the internet, effectively any 2 of 7 billion people, the very definition of p2p. What am I missing?
> I also think the inflation claim is ridiculous given that Bitcoin's price fluctuates wildly.
The inflation claim is sound and is based on the proportion of Bitcoin created per block not the speculative USD value of the created supply. It is like valuing the inflation of the gold supply based on the speculative nature of gold in USD fiat, rather than the gold supply itself.
> And the inflation is not "to infinity", Bitcoin is set to eventually run out of coins on purpose. The inflation is set to eventually reduce to zero. Bitcoin is a deflationary asset, not an inflationary asset.
I agree with this statement.
> This is actually one of the things that turns out to be bad for Bitcoin as a currency, Bitcoin has been a good demonstration in a lot of ways as to why a deflationary asset is inherently not particularly well suited for transactions.
This is a statement without substance that I fundamentally disagree with. Please provide evidence or back down on such baseless accusations
> And again, by your own admission, Bitcoin is primarily a store of value, not primarily a currency designed to be regularly exchanged.
Agree, but I did provide a couple examples where Bitcoin is a superior medium of exchange today than Gold or USD.
> If you want to talk about Bitcoin like it's an alternative to USD, then I'm going to criticize the fact that its transaction rate and per-transaction environmental costs are garbage and unscalable.
If you are going to focus singularly on the transaction use case, over the store of value use-case, I will call you out as missing the point. The only guarantee of the USD is that by design it will lose 2-8+% of its value per year, every year to infinitity. If you take the lower end of that at 2%, then over a 40 year average career, an income earner loses 40% of their income to an invisible tax. This theft is what Bitcoin’s deflationary asset backed system protects against. Infinity/21 million is better than 1/infinity (exponential inflationary money supply) over the long term. The only reason you don’t understand that yet is that you haven’t sufficiently studied Bitcoin. I encourage you to do so.
> I agree with this statement to date but in the future as Bitcoin grows in importance
Bitcoin isn't scalable and part of the point I'm getting at is that its power consumption is out of control and would be even more out of control if it did rise in importance, since the price would rise and mining would increase to compensate.
You're asking me to imagine a world where Bitcoin has grown in the amount of value it's securing (which necessarily because Bitcoin is a deflationary asset requires that the price of Bitcoin increase dramatically), but you're also asking me to substitute in the current energy requirements of Bitcoin when I think about that world.
In a world where Bitcoin actually held a substantial portion of the world's value, the amount of energy required to actually secure that system against 51% attacks would be ridiculous, it would dwarf the energy requirements of any other financial system.
> To my knowledge most internet based p2p networks do rely on the internet
A lot of P2P applications are about allowing direct connections between devices even if the Internet goes down. But more importantly, when most people think about P2P they're thinking about systems where you don't need fast consensus. The blockchain is a distributed ledger that forces constant consensus. In contrast, if you look at something like (just as one example) P2P Matrix you can run rooms entirely offline, and essentially you can run rooms that don't immediately propagate their state to the entire rest of the network. They might never connect to the rest of the Matrix world.
One of the big advantages of P2P is the idea that you don't need to have access to the entire network. But Bitcoin fails that test, if you don't have at least indirect access to the entire network and you can't get your changes onto the chain in time, then it's too late.
This is part of what people mean when they say that Bitcoin is kind of like a decentralized way of running a centralized service. Bitcoin relies on a having a nearly always up-to-date shared consensus of everyone's transactions. It gets at the shared consensus in a decentralized way, but there is still one centralized "state" that everyone is relying on. The really interesting work in P2P networks does not rely on constant consensus or on having one singular state at all. A true P2P cryptocurrency in the way that most people understand P2P networks today (or at least the good P2P networks) wouldn't have the blockchain. It wouldn't require a single unified ledger that contained every block.
> It is like valuing the inflation of the gold supply based on the speculative nature of gold in USD fiat, rather than the gold supply itself.
Okay, but that's a ridiculous thing to do because if you think about inflation only in those terms then your inflation numbers don't really indicate how much value the asset is actually worth. But if you believe otherwise, I might have some Beanie Babies somewhere to sell you.
> This is a statement without substance that I fundamentally disagree with. Please provide evidence or back down on such baseless accusations
:) Crud, my evidence is the entire heckin history of Bitcoin, the fact that it is not being used primarily for transactions today even though a lot of the early proponents were arguing that it would be. My evidence is the "all" view on this price chart (https://www.coinbase.com/price/bitcoin). That is not the chart of a functioning currency.
The question of whether a deflationary asset was good as a currency got brought up a lot during early Bitcoin talks, and the answer that was often given was that other forces would come into play and people wouldn't just sit on their Bitcoin and treat it the same way they treat stocks. But it didn't happen, people do basically just sit on their Bitcoin the same way they sit on stocks. It turns out that when an asset experiences rapid growth, that's bad for its use-case as a currency.
Which, I mean... obviously. You're not on here arguing that Bitcoin is primarily about transactions, are you? You're arguing that it should be thought of like a bank vault. Early Bitcoin proponents back when I first entered the space were arguing differently. They turned out to be wrong. Bitcoin today is the evidence that deflationary assets are inherently poorly suited for currencies.
> Agree, but I did provide a couple examples where Bitcoin is a superior medium of exchange today than Gold or USD.
I'm not entirely unreasonable, there are some very minor things that Bitcoin does well. Most of them are done better by other cryptocurrencies, and it says something that the community continues to focus on a cryptocurrency that has been technologically obsoleted by other coins multiple times over, but even so, there are some things the coin does well.
But there aren't very many things, and my point is that the energy costs are too high to justify with those minor improvements. Bitcoin is not meaningfully changing the game on censorship for most people (even though that's what Bitcoin does best). It is not reducing military presence in the world. It isn't really democratizing finance in the way its proponents claim. And it introduces huge environmental costs and tons of negative externalities in exchange for such tiny, insignificant gains.
> If you are going to focus singularly on the transaction use case, over the store of value use-case, I will call you out as missing the point.
Cool, Bitcoin is garbage at both transactions and as a store of value. Mathematically, it's worse than the other systems we have at both of those tasks. Now, you are telling me to ignore that math because the existing systems also have a ton of separate externalities, and I actually agree with you that the existing systems have a ton of externalities.
But if you are arguing that Bitcoin is going to do anything about those externalities, then it needs to get a whole lot more usable and whole lot more efficient at being both a store of value and a method of transactions. Otherwise, I don't really care about the carbon emissions of the military in regards to Bitcoin because Bitcoin isn't going to do anything to reduce them.
Pointing out that existing systems are bad does not make Bitcoin magically good. Bitcoin is an ineffective way of addressing systemic problems with existing currencies, and yet it still imposes large environmental and social costs of its own.
I'm supposed to ignore the massive environmental costs of transactions and the lack of scaling, and yet somehow believe that Bitcoin will be able to meaningfully compete with any other currency. It won't, not unless it gets better at transactions. I'm supposed to ignore that Bitcoin's energy cost to secure money is out of control, but I'm also supposed to believe that it will outcompete gold in any meaningful way. It won't because it's bad at storing value. It can't address the negative externalities of gold because it's mathematically worse than gold at the primary purpose of storing value, and the other negative externalities of gold are not going to help Bitcoin compete with gold.
It's not enough to realize that gold and fiat money have problems, the alternative that you propose still has to actually work better than them.
> Infinity/21 million is better than 1/infinity (exponential inflationary money supply) over the long term.
Not if you're building a currency :)
> The only reason you don’t understand that yet is that you haven’t sufficiently studied Bitcoin. I encourage you to do so.
Oh please, I've been in this space for ages, I've gone to the talks, I've read the papers, I've learned the algorithms. I know the early economic theories that Bitcoin proponents were proposing back when it first started to break out of extreme niche circles, because I one-on-one talked to early proponents about how they thought this was going to work out and asked them questions about how they thought a deflationary asset would work as a currency. It was an interesting idea, and I was hoping that they would be correct. But they turned out to be wrong and their predictions about usage and human behavior on the network didn't actually come true. That's all there is to it.
Part of the reason I'm cynical about Bitcoin is because I'm not coming into Bitcoin discussions through the lens of revisionist history, and I'm not coming into Bitcoin discussions from a perspective that the technology must just magically have some way of dealing with scalability or efficiency problems. I've spent enough time studying both the technology and the economic theories, and I've spent enough time just sitting back and watching the space evolve, that I now know behind the complexity there are fundamental assumptions being made about how currencies work that are just... incorrect.
I wish they were correct, a decentralized currency would be great. But I'm not sticking my head in the sand and pretending that Bitcoin is capable of being that currency.
First I want to thank you for your engagement. It is rare to find some one so deeply engaged in the topic with such a well considered point of view. Secondly I want to point out the areas where we agree.
For example I would like to agree with your perspective on bitcoin, p2p and the internet.
I fundamentally agree that Bitcoin was born of the internet and if the internet were to go down then Bitcoin would likely go down with it. I view Bitcoin as the native currency of the internet and it would be nothing without the internet. I don’t believe the internet is going to fail for many reasons but I do agree that Bitcoin would likely fail without the internet.
Where we disagree is:
1/ Bitcoin is bad as a transactional currency today.
2/ Bitcoin is a bad store of value today.
3/ Bitcoin’s energy usage is out of control and bad for the environment.
Let me elaborate:
1/ Bitcoin is the best transactional currency for any transfer outside the G8 countries for any value between $100USD and 10 billion USD, where the one of the parties exists outside of the G8. This represents over 70% of the global population. It is convenient for most on HN to ignore this fact but 70+% of the global population exists outside your bubble. For these transactions, Botcoin allows for perfect censorship resistant p2p transactions between two parties with zero compLexity.
2/ The gov and taxation policy has convinced you that 1+ years is the definition of a long-term investment but this is not the case. In Bitcoin terms, long-term means 3 years +. If you look at 3+ years as a timeframe, Bitcoin has returned an average of over 200% APR on average, handsomely beating any reasonable investment over a period of 13 years since inception.
3/ Bitcoin’s energy consumption is designed to consume only the lowest marginal cost of energy. It consumes the lowest cost energy sources which over the long term coincide with renewable energy sources for whom there is no other consumer. If there were then other consumers it would push them out at a higher marginal cost. By contrast, gold can only consume fossil fuels and rape the planet through strip mining while USD can only rape the planet through fossil fuels or through military violence.
If 50% of Bitcoin users went away tomorrow or stopped transacting, almost certainly the amount of electricity used would decrease, because the value of the coin would decrease.
This is like saying that if the US banned gold that gold mines wouldn't be impacted at all. Demand (and thus profitability of the asset) fuels mining.
People mine because mining is profitable, not to secure the network. Securing the network is a side effect.
True, but the network serves a purpose. Without transactions, would there be a network to begin with?
Therefore, you can model a per transaction cost within certain bounds.
It's incorrect, but absent Bitcoin having an actual plan to increase transaction volume it's a reasonable way to imagine what a world where Bitcoin actually functioned as a currency might look like. It's possible that the bitcoin design is fundamentally flawed and cannot scale, but in some ways, OP has a very charitable way of imagining what it would look like if Bitcoin could actually function as a global currency.
It's not so odd. Those people are willing to transact in Bitcoin because it's sufficiently secure against a 51% attack. So in a sense they're consuming the benefit of the overall network hashrate, even though the cost they pay is heavily subsidized.
They are ultimately humans, not machines, so they mine for the mining reward, not as a public service of securing the network.
Transactions are the only service provided by Bitcoin (what else is a currency for other than transactions?), so it's totally fair to consider it's energy cost per transaction, especially since the banking system is evaluated in the same way.
> there is not a certain amount of electricity needed per transaction.
Not yet. But that will be increasingly the case in the coming decades as the block subsidy gets repeatedly halved into insignificance. Then the brunt of Bitcoin's security (protection against 51% attacks) will have to be borne by transaction fees.
How saturated is Bitcoin currently? I stopped following the details years ago but I guess Bitcoin could not handle a ten fold transaction rate increase today, right? Which means at best - if you completely saturate the network - you could get the costs per transaction down to 10% of the given number.
The price of Bitcoin is not supported by the amount of fresh money coming in. It’s based on the lowest price a current Bitcoin holder is willing to sell for.
If all Bitcoin holders decide tomorrow that it’s worth $200k per coin, then that’s the price, even if there are very few buyers at that price.
It’s like the price of a stock: it’s not dependent on trading volume.
It’s so frustrating having these discussions about energy consumption.
If you make a statement about the absolute energy consumption of a PoW blockchain, the first response usually is “But this other thing consumes way more energy!!!!”
In order to compare the consumption of the network to anything you will need to calculate it by some unit of utility. Transactions is the only metric that makes sense.
This is definitely an interesting way of looking at it. If your blog ends up in pre-training data, it will become part of the AI. Or if not, an AI might still fetch it when a user asks something specific. It reminds me of voting in a democracy, which many people consider a right and a duty - but in reality a single vote is hardly going to swing any election.