Is Bitcoin Worth $1M? | Hacker News Reader

Is Bitcoin Worth $1M?

medium.datadriveninvestor.com

There is cost for storing bitcoin in terms of security risk (thefts and disasters) and network risk (mining power, network fracture), in addition to, energy cost.

What article does not mentions is case of:

Black Friday, in U.S. history, Sept. 24, 1869, when plummeting gold prices precipitated a securities market panic. The crash was a consequence of an attempt by financier Jay Gould and railway magnate James Fisk to corner the gold market and drive up the price.

Source: https://www.britannica.com/event/Black-Friday

Question is; how bitcoin is protected against market cornering ?

I think this is pretty well reasoned. Or, at least, it lays out the assumptions in use pretty well.

TLDR:

> Given the increased adoption of Bitcoin by major fintech players (Venmo and Cash App) and hedge funds, I think reasonably there is a greater than 5% chance of it succeeding [at becoming a non-sovereign, non-fiat, store-of-value asset]. This not only makes it a positive expected value bet, but one with an asymmetric payoff skew of -1x to 100x. This is akin to purchasing a lottery ticket, that earns you money on average.

> If you think that the odds of Bitcoin successfully becoming a non-sovereign, non-fiat, store-of-value asset within the next 10 years is greater than [3% in the bull case and 19% in the bear case], you should invest in Bitcoin.

> If you have accepted that Bitcoin’s net expected value is positive for the current price, then you should enter a position. However given that Bitcoin is an extremely speculative asset, then the best way to manage risk is through bet sizing. It should occupy a small proportion of your portfolio (1–5%), and it certainly shouldn’t be bought on margin.

I believe Bitcoin is at the mercy of government regulation of energy sources. There is an underlying assumption that those who control energy distribution will continue to sell there electricity to miners. Yes, it makes sense economically but not environmentally and as long as California continues to have record breaking fires every summer and SE Asia gets slowly enveloped by rising ocean and cyclones there is a probability that economic policy will shift to align with environmental issues.

People have been looking at building data centers [1] under water because of the cooling benefits. No reason why rising oceans and cyclones would be a significant hurdle for a well financed operation. Bitcoin operators are already looking at commissioning their own power stations in order to get the juice required. Regulating the available commercial supply is fair and makes sense, it doesn't make sense to limit what people can build and operate on their own land for private use.

[1] https://news.microsoft.com/innovation-stories/project-natick...

> it doesn't make sense to limit what people can build and operate on their own land for private use.

When your "private use" of an land has direct negative impact to land outside of your ownership, it does make a lot of sense.

I'm sure there are limits to what you can get approval to build. I'd be surprised to see companies get approval to build personal nuclear reactors for example. But I can imagine there's relatively little difficulty in operating solar or wind farms or other renewables in the right places [1]

[1]https://www.networkworld.com/article/3233313/first-self-powe...

An extreme outlier here would be the Walt Disney Company, which negotiated the legal authority to construct and operate a nuclear plant in Orlando, Florida.

https://grist.org/article/disney-worlds-literal-nuclear-opti...

That's fascinating and the only example I've ever seen of a private company being given permission to own and operate their own private reactor for power generation. Cool!

Why should we devote large sums of money for renewable energy and data centers that serve to solve useless hash functions when we can instead just move to a proof-of-stake based crypto and use the money/energy elsewhere.

If people are able to see past there monetary gains from Bitcoin I am confident they would agree that while Bitcoin paved the way for mainstream cryptocurrency adoption it is highly-inefficient in a manner that is being easily solved by other cryptocurrencies

No, it is highly inefficient and incentivizes wasteful use of carbon-based fuels and renewables.

Bitcoin has been successful creating a sound system for ensuring energy has been wasted during the validation and creation of a block but is it actually decentralized when the computational power needed to mine a block requires wattage that cannot be supplied with decentralized power-sources?

This being said it seems somewhat absurd that Tesla invested so much and thereby wiped out a huge percentage of carbon they sought to offset through the use of there vehicles .

> This being said it seems somewhat absurd that Tesla invested so much and thereby wiped out a huge percentage of carbon they sought to offset through the use of there vehicles .

Is it? When BTC hit 58k this month it had brought in more in profit then thier core business did in all of 2020: car sales.

If you have any idea at what you're looking at you'll realize Tesla isn't a car company, that it's MVP for it's battery and software tech, and they will likely get into in house financing (where auto manufacturing makes most of it's revenue-profit, as most OEMs typically lose money on car deliveries/sales) because of their investments with Bitcoin and maybe even get involved in mining given their advancement in hardware and chips as they will now have an excess amount of energy with that large battery and solar project, which they maximize their large footprints in all of their gigas and super charger networks, which could make Buffalo and all other Solarcity operations profitable, instead of liability on their balance sheet--the take over was clear nepotism, but could ultimately pay dividends in the end of they play their hand right.

You're looking at this all wrong, with an obvious anti-bitcoin bend, but you fail to realize that Tesla will eventually follow Yamaha in its various business models and product line up. I can see them utilizing their resources and immense Human capital to start making miners given their supply chain and ties to Schenzen via Shangahi's gigafactory.

I am not commenting on the business strategy or battery technology Tesla is creating.

However , you can’t deny that despite the fact that Bitcoin mines it’s coins using an estimated 30% renewables , 60% is non -renewables and there is no incentive baked into the system to prevent massive increases of carbon emissions until 2140 when Bitcoin is estimated to be completely mined.

All I’m saying is Bitcoin is a fantastic crypto-asset for creating wealth in a quasi-decentralized fashion. So yes, if you are looking to make money it’s a great place to start. But I can’t see anyone refuting the fact that Bitcoin will continually and at an increasing rate route massive quantities of carbon into our atmosphere. And/or waste incredible amounts of renewable energy which could have been used for better purposes.

So I believe that it is logically contradictory of Tesla’s ethical branding to make that type of investment when there are plenty of Proof-of-stake based crypto’s out there with 10-100x energy-efficiency rates.

What are you talking about? And what sources do you have to back up these claims?

Here is the latest study we have from 2019 [0] that states its 74% renewable, and Jack Dorsey/Sqaure just put a $10 million bounty to make Bitcoin have an even lower carbon footprint [1], so what are you on about about lacking incentives?

> But I can’t see anyone refuting the fact that Bitcoin will continually and at an increasing rate route massive quantities of carbon into our atmosphere. And/or waste incredible amounts of renewable energy which could have been used for better purposes.

Given that Bitcoin has spurred on the creation of renewable energy sources this defies even the most basic observations, look at what Peter Theil invested in that brought more wind energy to Texas [2]. You are entirely misguided and I'm afraid your conclusions are based on non-existent and non-reality based arguments with little to no fact checking.

I'm an environmentalist, I've spent most of my adult life involved in renewable and sustainable Ag, Farm to Table kitchens, learning gardens for children and the mentally disabled, and volunteered at non-profits helping put solar on the homes of low income families (Grid Alternatives), suffice to say I'm about as green as you can get and my carbon footprint is negative, and will likely remain so for the rest of my life given my involvement/investments in the hemp Industry.

You are right that Bitcoin is very energy intensive, by design, but what you fail to understand is that it seeks to create and utilize renewable energy that otherwise would not or could not be used: Iceland is a hot spot for miners due to it cooling capacity as well as its large geo-thermal energy sources, my friend is doing his MSc in reneable and sustainable energy there and is proposing auzilary business models that are not possible due massive surplus of energy. Japan could easily be on track to do this as well, but I fear the Government may never allow this given how absurd they've been since Fukushima and now the Olympics under COVID.

China makes use of the rainy season's excess hydro electric energy that would othereise overflow the grid, the US has a lots of mining near hydro, solar and wind energy sources because it is monetarily incentivized to do so in order to achieve profitability of a large budget/outlay. I think Denmark and Chile may be future hotspots as well due to their current excess renewable sources, but I don't discount remote areas of the world with waterfalls or large amounts of cheap land and ideal orientation for massive solar arrays: think Ivanpah in the Mojave desert but 10-1000x in size.

> So I believe that it is logically contradictory of Tesla’s ethical branding to make that type of investment when there are plenty of Proof-of-stake based crypto’s out there with 10-100x energy-efficiency rates.

None of which could even have the ROI potential that 2 months in BTC has, and that's the point: we are not appealing to their ethical or moral standards, those happen regardless of our community's stance, we are appealing to their software and hardware development to improve our network in a mutually beneficial manner.

I've spent the last 3 years in or around Musk corps, I can assure you they have more than enough of Human Capital there to improve this network far beyond even our dreams, and my personal ambition to make BTC the first multi-planteary currency is all but certain now that Elon got involved and put it on Tesla's and soon SpaceX's balance sheet. Add Starlink to this equation and enabling Tesla purchases and his statement that Mars' economy will operate on a cryptocurrency this is all starts to make sense.

If you want a more through explanation, I will just say I charged corps $250/hr for my consultation on this matter, and you are no different: but rest assured if these are your concerns you have no basis for your rebuttals. I'd also recommend researching a subject before you make baseless accusations that are easily refuted under basic scrutiny.

0: https://bitcoinmagazine.com/articles/study-74-percent-of-bit...

1: https://insidebitcoins.com/news/jack-dorseys-square-launches...

2: https://marketrealist.com/p/peter-thiel-bitcoin/

> Here is the latest study we have from 2019 [0] that states its 74% renewable

I may be slightly confused here about the term "renewable penetration" in the original report cited by your article[1]. They don't define what it actually means (maybe bad practice or maybe I'm just an outsider) and to me it feels like it means how many people on the grid have access to renewable power, not how much of the actual power being used is renewable. I can put a solar panel in all homes and thus get 100% renewable penetration but if it only provides enough energy to run a toaster, its not that significant, is it?

In table 7 they mention Sichuan is 90% renewable energy penetration. Sichuan is the habitat of over 80 million people, I think they managed to convert 90% of their energy use to renewables, it would be easy to find a source on it. I did a lot of searching and I can't find a single citation. (btw, in the report the source is "Morgan Stanley Research 2018", which is completely useless as that company must generate a billion public/non-public documents a year and there is no way to tell which one these people read).

[1] https://coinshares.com/assets/resources/Research/bitcoin-min...

I agree with @newswasboring , all your sources seem to have an interest in bitcoin.

My primary source for the facts given are based upon this study by Cambridge university :

https://www.jbs.cam.ac.uk/wp-content/uploads/2021/01/2021-cc...

Secondary source is here:

https://youtu.be/lNGwQhXfB88

> My primary source for the facts given are based upon this study by Cambridge university :

I need time to sit down and get into the weeds with this, which I cannot until the weekend at the earliest. But just upon a preliminary look it's not just focusing on Bitcoin, but the entire 'Cryptoasset' ecosystem, which is disingenious when you're pointing the finger solely at Bitcoin as the waste of energy you are making it out to be. What other cryptocrrencies operate on is not our responsibility be it PoW or PoS or a hybrid or whatever else exists out there now. My focus is on Bitcoin and nothing else.

> Secondary source is here:

His overview of PoW is highly biased, and the argument is moot, even if those numbers from Cambridge are correct, because even by his own admission: 39% is an impressive number that most Industries cannot match.

Fiat and all the ancillary systems to allow it to 'function' cannot even come close, and unlike Bitcoin bakks don't work after hours or on weekends, yet still relies on the same amount of energy consumption. This isn't 'what aboutism' it's comparing apples to apples and taking their figures at face value and contrasting it to the existing paradigm.

I will reiterate my point: Bitcoin (the network) does consume lots of energy, much of it renewable (the figures vary apparently), but it remains the cleanest most effective, secure and resilient network in existence.

And as I mentioned the enviormentalists amongst us are not satisfied with that figure: $10 million from Square is commendable but far too low to solve such an immense problem alone in the grand scheme of things, but us Bitcoiners are a resourceful bunch who can do great things with little to no money once we're determined, it's our real legacy. And now that we have institutional money coming in the billions on a dialy basis and the appreciation alone can and should spur on even more renewable energy sources. Tesla getting involved is a massive boon for many reasons.

Also his understanding of Bitcoin is admittedly shallow, he only focuses on layer 1's supposed 7tx/sec but negates that riht now you can use layer 2 (LN) and do order of magnitude more tx/sec in real time for little to no cost, but most are not willing to hear this as it goes against their narratives.

But, and I will admit: you need to understand that Bitcoin is not as agile as it once was now that it has matured, purposely so, and as an actual Free market it cannot force it's participants to adopt renewable energy, it can only incentivize it from competing Market forces and other market dynamics: which means this takes time. But ultimately, as I said before, I would be absolutely stunned if it doesn't break the 80% threshold; the panacea of it being 100% renewable or a failure is impossible in my opinion and no one should set that as the benchmark. But give it/us time, I personally would volunteer my services for free to set up and tie in the solar arrays for miners if given the opportunity because of what Bitcoin has given me already!

I would love the opportunity to teach what I learned to the youth as well. Try finding that level of commitment in any of the large monoliths in the fiat World. And that is the key difference, we are adopting a sort of Kaizen system not seen outside of international supply chains, much less in finance, to determine our collective course of action.

Also, Bitcoin is only ~12 years old: something to keep in mind when you make these criticisms. Go back to the creation of the original curries of the colonies which led to the first Central bank and the USD, and see how very un-credit worthy the US was after the Revolution. And that is the current super power with the World's reserve currency with it's American Century policies.

If bitcoin is worth that much, then I can't image what Tezos would be worth. Both as a store of value (due to deflation over time and staking rewards), but also due to it being a utility token with far more capabilities than ETH or Cardano

The article actually addresses that, and the answer is "much, much less: see silver". Or in the case of Tezos, I guess it's something like, "see brass".

WTF is Tezos, and how do you ascribe it's properties any where near to what Bitcoin has? Lookin at it's decription it looks like the same ICO pump and dump scam coin.

And while I'm not entirely willing to dismiss a project's coin simply base don volatility alone, as BTC has certainly has/had that throughput its History, this is the first thing that came up [0] when I looked it up.

bitcoin's (the token) function and value is from it's network (Bitcoin), the most secure network devised by man, which can execute a multitude of things on layer 1 and instant and near free txs on layer 2. What exactly does this tezor thing have that can even compare?

I'm genuinely curious but despite that I'm not bothering to look up any further than I already have, as it is I stopped listening to the ETH crowds because they don't have a real idea of what, if anything, they can build after their claim to fame with crypto kitties and their coding lang is utter garbage: Solidity.

0: https://www.fxstreet.com/cryptocurrencies/news/tezos-price-f...

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