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Comment by lisper | Hacker News Reader

It is ironic that at the bottom of this post on cryptocurrency scams there is this teaser:

"For years bitcoin has offered a reliable and inexpensive way to transfer value around the globe."

Bitcoin is not inexpensive. The cost of mining is actually quite substantial just in terms of the electricity bill. And this is inherent in the design: bitcoin's security depends on mining being expensive. If it were cheap, anyone could mount a 51% attack.

Also, Bitcoin is currently teetering on the brink of a community split which could lead to a hard-fork of the blockchain, though very few people outside the community seem to be aware of this. As the old adage goes, past reliability is no guarantee of future reliability.

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Except BTC has been "teetering" on the "brink" for 3+ years on the block size issue. When everyone's value is in the consensus, nobody is going to break it, no matter how much they complain about it. You can't rock the boat too much or you lose all your money.

That also means bitcoin is never going to get better, so it is pretty much destined to always be cryptogold. Which isn't even a bad thing, it just isn't competing to be a real money. But it has never been valued for any potential monetary use - it has always been valued as cryptogold.

"For years bitcoin has offered a reliable and inexpensive WAY TO TRANSFER value around the globe."

the quote is not referring to the intrinsic value of BTC, is referring to the cost of TRANSFERRING value which is low with bitcoin.

> Bitcoin is not inexpensive. The cost of mining is actually quite substantial just in terms of the electricity bill.

As you point out, this is on purpose. And the cost of mining bears almost no relation whatsoever to the cost of using Bitcoin.

It probably does. I mean, we pay miners 12.5 BTC to verify ~1800 transactions. It's not like that BTC is free. When new BTC are created, it devalues existing BTC.

Put another way, the miners will sell that 12.5 BTC on the market. Selling on the market puts a downward pressure on the price.

Another way still: If the market cap for Bitcoin remained constant, then it's obvious to see that for every block reward generated, the price per bitcoin goes down.

I don't think it's unreasonable to think that that means we're paying miners $16.5k USD per block, which would be about $9.22/transaction. Plus transaction fees. It's probably just hard to see that because the market cap for Bitcoin keeps increasing faster than Bitcoin's natural inflation. Basically, investors in Bitcoin are paying the transaction cost right now.

I think we're confusing 2 different costs here.

My parent was talking about Bitcoin costing a lot of money (overall) because of the amount "wasted" on mining. While this is true, it doesn't affect the costs for sending transactions. Causality actually runs in the other direction here: as transaction fees increase, more mining revenue is available, so more is spent on mining.

High transaction cost leads to high mining cost, not the other way around.

You point out that much of the value that is given to miners comes through devaluing everybody else's coins. That's true too, but also doesn't affect the cost of sending a transaction. This cost is borne in proportion to the amount of BTC you hold, rather than the amount of transactions you send.

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