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Comment by nodesocket | Hacker News Reader

With general stocks though at least you're investing in companies which make products, hire people, and hopefully stimulate the overall economy. A few Chinese guys in an old apartment building wasting power and compute/GPU resources... Not so much.

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You are wrong. The cryptocurrency industry is also made of real companies hiring real people. For example as of Sep 2015 there were 729 Bitcoin companies employing thousands of people: https://venturescannerinsights.wordpress.com/2015/09/04/the-...

You can't seriously be comparing those <1000 companies to the entire rest of the world economy.

Cryptocurrency doesn't even register as a drop in the metaphorical bucket.

That's like saying any small vertical in the stock market shouldn't be compared to the wntire rest of the economy. Well no, and that's not the comparison being made.

That's not the comparison I'm making. Compare the ratio of energy spent over jobs created.

It makes sense to spend a few hundred megawatts on a system that created thousands of jobs.

Jobs created is a complete misdirection. Productive jobs created is the correct measure. I could pay thousands of people to repeatedly dig holes and fill them in, and it would be an utter waste. I don't believe that Bitcoin serves a useful purpose, and so until convinced otherwise, I consider Bitcoin jobs as less useful than the hole-digging jobs. At least the hole-diggers don't waste electricity in the process.

Bitcoin does serve a useful purpose! It is perhaps not obvious to someone like you who don't seem to be a user. Or if you can't imagine how Bitcoin can help improve the world, you are probably only considering your little bubble, and not thinking about the other 7 billion human beings who are much less fortunate than you, economically, professionally, politically, financially.

Overall, Bitcoin reduces friction, enables transactions that would not otherwise take place, and protects people from losing their cash/savings in various situations. Here are just a few examples of problems of the existing financial system that Bitcoin solves:

- Credit card being denied while in a foreign country because the system accidentally tagged it as fraudulent

- Merchants unable to sell online and accept credit cards due to their market segment encountering high CC fraud

- Person unable to quickly and cheaply send remittance to family in foreign country

- Countries confiscating savings accounts of citizens (eg. Cyprus in 2014)

- Countries running their currency to the ground (Venezuela in 2017, Zimbabwe hyperinflation, USSR collapse, etc)

- DEA stealing innocent people carrying cash thanks to civil forfeiture laws (http://www.huffingtonpost.com/2015/05/07/dea-asset-forfeitur... http://priceonomics.com/how-police-officers-seize-cash-from-...)

- Bitcoin helping Chinese bypass GFW censorship (https://www.larrysalibra.com/hop-over-the-great-firewall-wit...)

- Paypal freezing for months the account of someone asking for donations for an expensive medical treatment (quite a few news stories about similar situations)

I could go on and on.

How does investing in a stock benefit a company unless you are buying from that company directly?

By supporting the share price when they want to have a secondary offering.

The purpose (and only purpose) of the company is to increase shareholder value. That is done via dividend and stock price appreciation. Buying the stock of a company increases demand of that stock and hopefully share price.

Sounds like all the electricity spent on buying and selling stocks isn't doing any good for the planet either.

Honestly, it isn't. Personally, I see all of those energy spending as upkeep - some amount you have to waste in order for the system to work.

The difference between regular money and crypto money is that the upkeep of the former is mostly tied to physical reality and doesn't influence the value of money itself. In case of the latter, however, all that energy waste is a) completely arbitrary, and b) directly tied into the value of money (the more power you burn, the more you earn, and one party burning hard means other have to do as well, for the blockchain to stay secure).

Or in TL;DR: cryptocurrencies directly incentivize wasting energy. Regular money does not.

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