The political case for a blanket cryptocurrency ban
stephendiehl.com
stephendiehl.com
This article should be re-titled "The Political Case for a Blanket Proof of Work Ban".
Bitcoin and proof of work should totally be banned.
I agree that there seems to be a lot of interesting work going on and the ideas of decentralized finance have a lot of potential. At the moment it really is hard to cut through the noise though and from what I can find just searching for an afternoon it looks like a minefield. I'm hoping that the bad stuff will all fade away and something useful will remain.
https://vitalik.ca/general/2021/03/23/legitimacy.html (https://news.ycombinator.com/item?id=26560626) talks about the Steem/Hive split, and explains how the community democratically overrode the network owner's undemocratic decisions.
Anyway, when you have a democratic (or otherwise subject to popular influence) institution which can do things like "print more money", forfeit some part of existing money, levy taxes etc. - then indeed it's an interesting and potentially positive-in-my-opinion cooperative pooling of resources. Of course then you have the opposite problem, which is the tyranny of the majority, but "you can't grab the rope at both ends".
Not everyone wants to take down banks or destroy fiat.
The truth is that no one uses cryptocurrency for anything. Ethereum is just as much a speculative store of value as Bitcoin is, if not moreso given the numerous competitors it has to contend with — Bitcoin arguably has none.
In a way, “speculative store of value” has merely been whitelabeled under the terms “digital gold” and “defi”. The people who claim increduously they’re buying ETH to do transactions are misrepresenting the situation to an extreme degree.
> Bitcoin and proof of work should totally be banned.
Where is your disclosure statement?
I don't think it's a terribly strong case but I suppose it depends on whether you agree that crypto is gambling and if you think gambling should banned. Anyway, I think lots of people stupidly speculate on things. I cast my vote by not speculating on those things. Should I be able to stop others from speculating?
It's the same sort of hypocrisy as deplatforming Parler. While I did not weep for Parler, YouTube and Facebook are the largest platforms for alt-right/fascist propaganda. YouTube's "rabbit hole algorithm" is by far the most powerful engine of indoctrination, and while the most egregious stuff has mostly been kicked off the platform it's still full of "soft pill" fascist/racist material. I am not sure things like Qanon or the alt-right in general would even exist (to such a degree) were it not for YouTube.
A ban or tax on proof of work mining is tempting but it would just offshore that activity. I suppose you could ban PoW cryptocurrencies but there are many alternatives.
This is generally a shitty article.
Yes, I think there is a lot wrong within ‘Wall Street’. But those wrongs don’t justify the existence of cryptocurrencies in any way.
And most of all: it doesn’t absolve cryptocurrencies in any way of their terrible impact on our world.
Just the facilating of cryprolocker attacks alone are enough to justify a ban in my view.
For just one example, look at how hedge fund and foreign capital speculation in housing is making a home unaffordable for millions upon millions of people and contributing to middle class decline and homelessness.
It's a bit like making pot illegal when hard liquor and cigarettes are legal. What it really amounts to is the existing parasitic financial industry using the state to remove a competitor to its own gambling and destructive speculation operation.
Argument: X is bad because Y. Counter: But Z is also bad because Y and I don't hear you saying anything about that! Conclusion: So X isn't bad.
E.g. the typical Soviet whataboutism:
Argument: The USSR doesn't respect human rights and that's bad. Counter: A u vas negrov linchuyut (but at your place, you lynch negroes). I.e. the US doesn't respect human rights either. Conclusion: So the USSR isn't bad.
The mere presence of Z does not invalidate the argument that X is bad because of Y. It's irrelevant, which is why tu quoque is just that, a fallacy of relevance.
Inconsistency in these kinds of areas just makes a mockery of the legal system and encourages corruption.
There are tons and tons of other problems with this proposal I didn't get into, such as how cryptocurrency is defined. Are we going to start making data structures like linked lists of cryptographic hashes illegal? In-game virtual currencies? Amusement park tokens tracked in a database? Any law would be either overly broad or trivially circumventable.
Real or perceived hypocrisy doesn't absolve cryptocurrencies in any way. What they are and what they have to account for has to stand on itself, on its own.
Two wrongs don't make a right.
You also seem to be a bit disingenuous: cryptographic hashes don't boil the ocean. Amusement park tokens idem. They aren't used for ransomware.
So this attempt at some kind of slippery slope argument isn't really working, if you would ask me.
When money is at stake, logic and reason is the first to fly out of the window. Whatever necessary to make the grift going will be said.
For every one of these people who bought cryptocurrency and "made something", there is someone - for the sake of discussion, another poor sap with a dead end job - who just bought cryptocurrency and hasn't made anything. And lots more from the second group who have made a tiny minority of crypto owners rich.
"Crypto" - not the underlying tech which is potentially interesting and may have merit in some incarnation - but buying or trading "assets" grounded in the tech, is essentially a quasi-legal pump and dump scheme right now. There is a rich history of securities law that is designed to thwart predatory investment schemes, and all of that has been circumvented by allowing people to trade in these assets.
I generally agree that adults should be able to do what they want, but I don't think we have found a way to balance that with what right now is effectively one big fraud.
Games like second life and Eve did the digital currency thing way before bitcoin. How is a pretend coin you can trade for money different than a pretend game currency you can trade for money?
Because one is traded on the stock market and increasingly accepted in real world transactions?
There was and likely still is, people making livings off earning digital video game currency, selling digital assets and converting it to real money. Not to mention every person that made actual money off mmorpg marketplaces.
Seems like cryptocurrencies just remove the game part and cut right to the economic part. With games, it's the people creating the currency through their actions and time, farming gold, working in Eve, etc. With cryptocurrency it's GPUs and stuff...though I guess technically, your GPU's doing the work for the game currency too.
The concept doesn't seem to have changed, buy make-believe thing that exists only on a computer everybody agrees is worth money and the value of said make believe thing changes based on how many people have or want the make-believe thing.
It doesn't really seem very similar to cryptocurrency to me; could you explain some more about how you think it's the same?
That website appears to me to be very much like an exchange for trading EVE online ISK for USD.
The average rate seems to be between $42-$45 for 5000 ISK.
It seems to be a time based currency where its value is based on a player's willingness to spend time grinding.
DeFi kinda started as decentralized exchanges but seemingly changed into apps which allow you to leverage tokens. This is like gambling for tech geeks. Probably this will die and be replaced by gambling for non-tech savvy individuals.
The more interesting side, for me personally, is powering financial assets on the blockchain. There is still work that needs to be done here.
I’m particularly worried about how easy theft of tokens can be, but I think that is a solvable problem. Perhaps through technical means or perhaps through banks holding your assets and covering you with something similar to FDIC or insurance.
So all-in-all I don’t think it’s fair to call this one big fraud or pump-and-dump schemes. Some are yes but many aren’t. Like the dotcom bubble many will lose all invested money however the general promise and tech will deliver something world changing.
You've got it backwards. You are making health insurance profit-driven, when it should be a government service. So then there would be no "individual's health insurance money" to quibble about.
> Once the government is responsible for the well-being of its citizens, it has weird effects like banning cryptocurrency
Wow, that's one helluva strawperson argument. Governments have always been responsible for the well-being of its citizens.
This idea of blaming hypothetical "stupid people" is trotted out by libertarians who want to punish the poor for dumb behavior, but give the rich a pass for equally-or-more dumb behavior that has a 1,000x more negative impact on society, simply because rich=smart=superior in their minds.
The kind of libertarian who's excited about Bitcoin is the kind that, with Satoshi in Bitcoin's genesis block, criticizes the bailout of banks and thinks they should have been allowed to fail, because that's what would keep them in check and prevent their walking all over regular people.
And yes, your last comment is a strawman because any libertarian who believes in individual choice and consequence also believes the same for businesses and rich people. You're attacking a group of people who exist but that I wouldn't call libertarians.
At the same time, allowing extreme wealth inequality incentivizes stupid behavior on the part of capital (like wasting capital on unproductive speculation, or driving the working class foundation of the population to poverty). Welfare states put sensible checks on capital, and honestly capital should welcome policies that keep the population from doing rash things like nationalizing all their assets out of desperation.
Currency/whatever crypto is, is just a system of trust. Logic is likely to have little to do with the downfall if it comes. Scrolling through the comments the Crypto-religious right is out in full effect and tbh, I understand it. For many people they have moved up many brackets of the wealth ladder and they probably should reject anyone coming for their system with vigor.
I think the downside of the crypto religious complex is going to be, that if any of these emotional arguments (coming to kill crypto) become mainstream and compelling, the tenor of arguments is going to push the crypto and no-crypto sides apart cartoonishly (think modern dems and republicans) and the choices of resolution will have to be loud and final.
Make no mistake, crypto is much closer to a political religious sect than it is a science.
The environmental cost of this - globally decentralized - system is to put it bluntly... negligible. That doesn't matter though, as long as people can be convinced into thinking it's a major issue.
What also doesn't matter is: anyone's opinion. Hegemonic systems will do whatever they need to do to maintain power, and that includes the possibility of banning crypto - even if everyone absolutely loves it.
The only thing Crypto Evangelists should be doing is building the tech and making it ban-proof. Let the nay-sayers bemoan the loss of their crumbling infrastructure, they'll still need a way to function in the modern world.
"BuH GloBaL WaRmInG" - as if any of these people actually give a shit about the environmental impact of industry as they write their AWS Lambdas, get the newest iPhone, order plastic wrapped take out, and buy a new car to make their commutes to the office "nicer". Even if Bitcoin was considered greener than fiat (and it should be, since it's essentially an improvement in EFFICIENCY and therefore LESS WORK to operate), they'd still hate it for one reason or another.
But again, the poorly thought out narratives don't matter. What matters is the conflict between alternative tech and hegemonic tech.
The "green" issue of Crypto mining is a harder regulatory issue for our government to get involved in, though. While on the one hand, I applaud their pro action, on the other hand, the hypocrisy is on a scale almost never seen. A government which has simultaneously rolled back environmental regulation, wildlife areas and expanded oil pipelines, shale extractions, fracking and offshore drilling while continuing a war on "terrorism", which is an ideal, not an enemy. A forever war, if you will. This is a polluter much bigger than crypto miners, so you'll excuse me if I have to take the concern about the environmental impact concern from the Senate all that seriously...... sorry. Went off the track. Either way, there are larger polluters to tackle than Crypto that take less control away from people.
Now if a blockchain's exchange value goes to zero then all that's left is a very expensive data chain.
Crypto currency is backed only by collective euphoria. Not unlike 17th century tulips.
None of the people I interact with and work with are gambling. We avoid that crowd because it's not sustainable nor does it create long-term value.
Why do people look at bitcoin and claim all crypto are equal, throwing the baby out with the bathwater?
Cardano main net has been around a long time. It just doesn't support smart contracts yet.
The Mainnet has 2,289 active stake pool operators, which comes out to >99% decentralized, with 71.09% of the total ADA in circulation being actively staked on those pools ($26.83b/$37.7b). It has an incredibly active and healthy mainnet...
Nothing useful is a HUGE stretch - unless only smart contracts are 'useful'. The ecosystem is new but growing rapidly. Let's circle back to this comment in 1-2 months?
I don't see the difference between that and "The Political Case for a Blanket Cryptocurrency Ban". The outcome is the same. Etherium has not proven proof of stake can work at scale. If it does that will be great. But it's no certain thing and it'll probably mean more Eth forks like Eth classic. Most other cryptocurrencies are tied to bitcoin's ecosystem to have value at all.
I believe that all cryptocurrencies are at their heart scams.
Proof of stake doesn’t change this dynamic.
As I see it, cryptocurrencies doesn’t actually solve any real, significant problems we face as a (global) society.
And to pick one important thing: they exclusively enable crypolocker randsomeware, and we know their devastating impact.
Dollars are abused too, but the dollar gives so much back, our societies are based on it.
I see no benefit to society of cryptocurrencies and I would really like to see them go.
Nothing good has come from them. Zero.
I can put a virus on someone's computer and make them mail physical dollars or make dead-drops or whatever to remove it, ransomware is not a problem of cryptocurrency.
Your funny James Bond Scenario is just dishonest, you know this doesn’t scale and dead drops won’t protect you. The risk is too high.
While you may enjoy the benefits of a first world currency, check your privilege for just one moment and realise the world is much bigger than you would believe.
I don't like proof of stake because again, the rich get richer in this scenario, which works against the decentralized core value of cryptocurrency.
In practice this just degrades to a situation very similar to ASICs, admittedly with the benefit that the hardware has a purpose beyond mining and with multiple (uninterested) manufacturers. In that way it is perhaps more decentralized, while also open to additional vulnerabilities. All in all it’s mostly just a way to differentiate from btc on a theoretical point rather than have any real advantage.
In my opinion regulatory action against PoW is all but inevitable. Ethereum is a platform, so there are powerful incentives to make it work more efficiently and use less power. Those plans are already well under way and, whenever Ethereum 2.0 gets launched, the power consumption of the crypto sector will drop dramatically and the network will be massively more powerful, attracting subsequent adoption. In this case, miners and developers have aligned interests. That's not the case for Bitcoin. Existing miners benefit from PoW, so I don't expect Bitcoin to migrate without some regulatory arm twisting.
Internal combustion engines are already really close to their peak efficiency vs emissions output and they still contribute a huge and growing amount to overall CO2 emissions. We need to design cities to curb the need for cars, replace as many as we can with electric, and design better, more accessible public transportation. Not seek more efficient internal combustion engines and promote their use.
Crypto-currencies account for an abysmally small number of financial transactions in the world. Literally inconsequential. And they chewed up an astounding amount of energy in order to process them. To scale that up to a world where everyone buys their bread and milk and candy bars with crypto-coins is... well not feasible would be the polite way to put it if you still understand physics and the laws of thermodynamics.
I think there are plenty of other reasons to ban crypto-currencies when we get to regulation and protecting consumers.
It wouldn't take much for the governments of the world to shut the whole enterprise down and I think they should.
They launched it as a parallel chain first, but it's going so well they've accelerated the plan to move the rest of the network to it. That's a relatively simple task and should happen in early 2022 at the latest, and possibly this fall. You can judge for yourself how hard it will be: https://notes.ethereum.org/@vbuterin/B1mUf6DXO
I disagree.
The author of the article is the worst kind of statist there is, and many of his arguments fall in the "big brother ought to protect their poor defenseless citizens, whether they like it or not".
The CO2 emission argument is just the icing on the cake.
"The music video for “Despacito” set an Internet record in April 2018 when it became the first video to hit five billion views on YouTube. In the process, "Despacito" reached a less celebrated milestone: it burned as much energy as 40,000 U.S. homes use in a year."
One youtube video.
https://fortune.com/2019/09/18/internet-cloud-server-data-ce...
At the end of the day it comes down to where people want to put their energy allocations. Large scale Bitcoin and or cryptocurrency mining operations are mostly just other buildings with racks of computers.
Still, as a currency or value holder, gold is simply a metal that people think has value. Crypto too has value because people think it has value. It is "mined" like gold, though newer coins don't have this quality due to Proof of Stake, thus reducing carbon emissions drastically. And if people are willing to trade paper or metal for digital objects, is it anyone's place to ban that trade? What about digital money for digital crypto, can we ban that?
All currencies like pieces of paper, digital objects, metallic circles, seashells, beaver pelts: They all have value because humans value them.
Proof of stake is also a "mining" operation insofar as it produces a limited supply at a macro-predictable rate.
I don't see it. Doesn't seem to apply to ponzi scheme, or facilitating cyber attacks, or the environmental impact. Perhaps you could give some explicit examples.
I'm glad some cryptos are moving to proof of stake, and I wonder if bitcoin will be able to make that transition too, or if the miners have too much to lose to let that happen?
Can you quantify the environmental impact of gold mining? How does it compare to the CO2 output of a medium-sized country?
Given 3000 tons of gold mined per year, that should be roughly 70 megatons of CO2 / year.
[I am pleased to report that this falls squarely in my previous estimate of 30-150 megatons / year that was based on the cost to mine gold, the cost of fuel, and the CO2 emitted by fuel.]
- so gold mining is 0.2% of global CO2 emissions!?
- Bitcoin mining energy use is at least 78TWh annually
- 480-500g of carbon dioxide produced for every kWh consumed
- So mining bitcoin produces 40 megatons of CO2 per year, which is the same order of magnitude of gold mining.
- And mining bitcoin is 0.1% of global CO2 emissions
(I would be grateful if someone would check my calculation)
References:
https://www.theguardian.com/technology/2021/mar/10/bitcoin-r...
Looks like iron & steel is 7.2%. Non-ferrous metals are listed at 0.7%, so gold is ~1/3 of the CO2 of non-ferrous metal production.
Paper ("and pulp") is 0.6%.
5.8 million tons of junk mail each year in the US. Mass of CO2 to mass of paper looks to be 10.5x for new paper and 3x for recycled, so depending on whether junk mail is primarily recycled or new, that is somewhere between 17 and 60 megatons of CO2 / year.
The US dollar is not backed by any amount of bitcoin so I don’t expect to see this happen with bitcoin.
- it's rare but not too rare
- malleable
- doesn't rust or tarnish
- non toxic
- doesn't need the tech that platinum, the only other possible choice that satisfies the rest of the list, would need for it to become money instead
Useful and scarce == valuable.
https://www.visualcapitalist.com/why-gold-is-money-a-periodi...
All currencies have value, not because "humans" value them, but because some organization of humans said "this piece of paper is legal tender". They lose their value when that political organization falters. What political organization is behind bitcoin etc.
Beaver pelts stopped being useful as a "currency" when there was no ready market for furs, it was never a currency, it was a fungible asset.
However, if a government does go down, then its currency evaporates.
Sometimes, sometimes the successor regime accepts/redeems it; I think that has been far more common when governments actually failed in the modern era.
Beaver pelts or cars wear down over time though unlike gold, and the amount of crypto one holds is hard to display ostentatiously, at least for now. BAT, Steemit or crypto.com's card colors based on staking amounts seem to be ideas heading in that direction though.
This misses the point of bitcoin entirely. People need to understand Bitcoin solves a problem: a very big problem. This problem was caused by the gov and fed defaulting on it's obligation to maintain a stable currency. As a result, cash can no longer be used as a store of value. And by artificially suppressing interest rates, the fed/gov has eliminated yet another class of investement: fixed income. So with two major asset classes eliminated: cash and fixed income, it doesn't leave much else.
The only asset classes we have remaining are equities, real estate and commodities. Real estate, there's no easy way to invest in it in a scalable way. So, what are you going to do put ALL your money in Equities? with no diversification. People desperately need a store of value, they can't just work until their 120 year old.
Bitcoin solves this problem: it's a store of value. For a lot of people, bitcoin is NOT speculation, it's a long term buy and hold asset that you hold for a long time. And the tax rules encourage such buy and hold behavior. those that are selling the moment it goes up, are going to pay dearly in capital gains taxes 30, 40, 50%+ in some states.
Which is not a super rational thing to believe about an asset whose value has no relation to anything in the real world, and nothing to prop it up but the people who believe the same thing.
Bitcoin is up something like 800% for the year. It might be up another 800% in six months! Or it might go down to $10000! Or $1000, $100, $10 -- any of these would make exactly as much sense as the ~$60K we see right now.
Taxes aside, that strikes me as a pretty volatile place to be storing your value. Not everybody has the option of USD or CHF but still... it sure does look like a speculative bubble. (For actual "mania" maybe see NFT's instead.)
After all, if it should happen to be the case for the currencies we all use right now, it would be the first time that this experiment, which has been tried often enough throughout history, hasn't ended in that particular way.
We've put all our eggs in that basket, and it's working... so far!
I'm glad there's a hedge against that outcome though. If the worst happened, and the debt balloon triggers ECB, the Fed, and their Asian cousins, to initiate hyperinflationary money printing, we'll all be grateful that there's an alternative to going back to shipping convoys protecting boats loaded up with gold and silver.
I don't even think the aforementioned hyperinflationary spiral is inevitable, or even more likely than not. But I repeat, it is irrational not to consider it a real risk, given history, and that outcome would lead to immeasurable human suffering, which cryptocurrencies cannot prevent, but can at least ameliorate.
That was the case in 2017. Not anymore, things have changed.
the fundamentals of bitcoin are based on what people believe it will be worth and this has changed drastically in mid-2020. Mid 2020 is the year WallStreet "got" bitcoin. this fundamentally changed it's future path. You have all these hedge fund managers and institutions that are willing to pour trillions of dollars into this asset to gain some exposure. And now that, that's begun it's setting off a chain reaction.
You've got to remember, the impetus for all this. It's not that bitcoin is some ideal form of investment. The driver for bitcoin and equity growth is the destruction of an existing asset class: fixed income. That 100 trillion worldwide wealth of fixed income has to go somewhere (not that all of it has to get sold). either it will go into bitcoin or equities or gold. it could go to cash but then it'll get wiped out.
I find it very intriguing that this could be the driver, but what do you base that on?
But, now that US treasury prices have reached their peak (yields can not possibly go lower), it's game over for US treasuries. this is playing out in other bond markets as well too. So, everyone is dumping bonds: see article "Why would anyone hold bonds?", it was shared on hacker news a few weeks ago.
Listen to just about any financial professional speak about bonds: they wouldn't "touch it with a 10' pole", is what you hear more often than not. Especially in the inflationary environment we're in now. Governments everywhere across the globe are up to their eyeballs in debt. the only way out is inflation - they've all realized this. you can't raise taxes, you cant decrease spending. you can only inflate your way out of the debt.
so, basically 100T worth of bonds, a very significant percentage of global assets, is being sold off. And it can't go into cash. So where's it going? Well, equities for the most part, hence the relentless rise of equity markets. but also, other places too like bitcoin because people need some diversification, which used to be served by bonds. In the past, investors recommended 60/40 equity bonds mix. in the future, maybe it's 60/40 equity/commodities/crypto.
Do speculative bubbles have cycles, has any speculative bubble grown as much, crashed as hard, then grown even larger than bitcoin has multiple times? Bubbles only pop once, and bitcoin has fell as hard as any other bubble I know you are tempted to compare it to, only to retake the ground later.
Speculative, obviously, bubble? You might be crazy for thinking so.
I don't think that a very weird year or two is sufficient.
A bubble, at least as I understand it, can pop more than once, after all we're not talking about a real physical bubble. Was there a real-estate bubble? I think there was, but prices now make it hard to remember that.
I don't see how my current opinion is at odds with Bitcoin going up util I die and it melts the ice caps, hopefully in that order. If you're asking whether I'd stop thinking it's a bubble, I don't know -- I can be crazy (to miss out on the growth) and also right (if it pops some day).
And of course you're right about "carbon copies" -- I ignored/missed/misread every crypto cycle so far. I'm not above buying some BTC at $100K but I probably won't, for reasons having nothing to do with crypto per se.
Of course there is. It's called a REIT (Real Estate Investment Trust). If you want even more diversification, you can buy ETFs and mutual funds which hold multiple REITs in multiple market segments. You don't need to physically own a property to get real estate exposure...
> So, what are you going to do put ALL your money in Equities? with no diversification. People desperately need a store of value, they can't just work until their 120 year old.
You can buy bonds specifically indexed to inflation. In the United States, these are referred to as TIPS (Treasury inflation-protected securities). There are plenty of places to get exposure to these on the secondary market, eg: via ETFs.
I find it a bit silly to claim that you're interested in a store of value while holding a highly volatile asset like Bitcoin. By definition, a store of value should have low volatility and basically track inflation. Bitcoin has behaved far more like a speculative investment: yes, it's substantially trended upwards, but it's also been highly volatile. How do you reconcile accepting Bitcoin but rejecting equities, which have historically outpaced inflation by a significant margin?
the appeal of bitcoin is there's a fixed supply as opposed to fiat which can increase exponentially.
I never said reject equities. I want to invest in as many asset classes as possible, including equities, real estate and gold.
The macro picture for equities is looking a little less rosy than it did 30 or 50 years ago. Equities are supposed to follow earnings growths, which is basically just population growth + productivity per capita increases plus dividends. if you break the 3 of those down and compare them to the last 50 years, you'll quickly see, future fundamentals are less rosy: - labor population growth has slowed to 0.5%, from 1.5% - per capita productivity growth is at all time lows - and dividends for s&p500 are now at 1.5%, down from 4.5%.
Whereas the fundamentals for past growth were (4.5+1.5+2=8% real), the future fundamentals now show: (1.5+0.5+1.5=3.5%).
Cryptocurrencies actually bring several benefits and better solutions for the problem of trust in a store-of-value or exchange contract. The world needs Bitcoin now more than ever, we are already living in a multilateral world where US and China exert pressure to force international contracts to be denominated in USD abs RMB.
That is an awful deal when both countries can print unlimited amounts and distribute to their preferences like happened during this pandemic, specially in the US.
What you rail against is a feature not a bug. So many cryptocoin advocates don’t seem to understand how societies work.
The world can do without BTC just fine. Now more than ever. It doesn’t actually solve a problem we face.
Only those who have Bitcoin seem so adamant about it. No coincidence right? Because we know it needs more ‘suckers’ to buy into the ponzi because no value is ever created.
It’s not about suckers or even wealth, it’s about whether control should be given to a greater entity who may save us, or if such a thing is too important to trust to a very human and often flawed agency.
People who are adamant about Bitcoin were already sold on it before they found it. Just as those who adamantly oppose it.
At best, this is equivalent to banning beanie babies (no real negative affects for society, but stupid and a big overreach).
At worst, it's equivalent to banning the internet (sets the country behind decades as the rest of the world adopts the new technology and profits from it).
[0] ie: all of them
Sounds unrealistic. Remember the war on drugs?
How effective the ban would be is another question, but I am mainly talking about how I think the politicians would justify the ban.
How exactly do you ban or confiscate bitcoin? New bitcoin wallets are created without touching the internet access. Internet access is only needed when sending bitcoin but not when receiving bitcoin. By the time someone sends it, it’s too late, you can’t confiscate it because they don’t have it anymore. If the government bans or starts monitoring the bitcoin network for activity, people can still send slips of paper through the mail with the private and public key to one of their wallet.
Combine that with a brain wallet and you can literally store bitcoin in your brain. Try doing that with gold.
How exactly do you ban or confiscate bitcoin? New bitcoin wallets are created without even touching the internet! It can be done from the middle of the Mojave desert without any proof of it ever happening or existing. Internet access is needed when sending bitcoin but not when receiving bitcoin. By the time someone sends it, it’s too late, you can’t confiscate it because they don’t have it anymore. If the government bans or too heavily monitors the bitcoin network for activity, people can still send slips of paper through the mail with the private and public key to one of their wallets and trade around pieces of paper instead.
Combine that with a brain wallet and you can literally store bitcoin in your brain and pass through borders carrying nothing on hand. Try doing any of that with gold, Euros, Dollars, or Chinese Yuan.
The only thing stopping bitcoin is exponentially higher transaction costs but paradoxically higher transaction costs make small bitcoin holders effectively illiquid. This reduction in supply further drives up the price infinitely until most bitcoin is rendered illiquid or until people think slow cryptocurrencies with high transaction fees are stupid.
[1] https://www.nasdaq.com/articles/inner-mongolia-to-shut-down-...
of course, in my non-expert opinion, it would be preferable for the government to focus directly on the negative externalities rather than second or third order causes thereof.
You don’t ban things you can tax with good results. Banning is for things you can’t tax. It’s a clumsy instrument.
I'm claiming it's a bad, authoritarian move that isn't in the interest of their constituents, and is not in the spirit of US laws.
The US government has the authority to regulate crypto's use as a currency and absolutely should exert that regulatory power.
I disagree that this should ever be a cause for banning something. It's not the government's job to pick and choose which technologies or products will be successful or useful.
As they will tell you a every opportunity they get, they're an "independent" agency.
[1] https://www.nytimes.com/2021/03/22/business/jerome-powell-sa...
It's also not the equivalent of banning the Internet; perhaps - similar to banning gambling through the Internet. In the sense that it may be impossible to properly enforce, but can certainly happen and in some world states:
https://www.nodeposit365.com/features/countries-that-have-ba...
Again, none of this is to say cyptocurrencies should or shouldn't be banned; or even that governments should or shouldn't ban things at all, or exist at all etc.
The interesting question about Bitcoin is whether it could ever be robust enough that they couldn't successfully regulate or control it, even if they very much wanted to and most people agreed it would be appropriate for them to do so.
Oh, I doubt that. I mean, if it were banned by most world states, then you wouldn't have reputable exchanges operating legally and openly. So established investment firms and investors would probably stay away from it. And of course, no person or business could officially accept BitCoin, and it would be risky to accept it even unofficially, since it would be admitting to a crime.
Print way too much money, run out of resources and room to pump, crash to rock bottom, start a war, then start over again is the historic cycle we are stuck on until we fix this.
When the People decides to do horrible things with money in its various ways, we see hardware manufacturers attempt to lock down hardware to prevent it (nVidia), we see the SEC collectively lose their shit, we see completely inconsistent rules from the IRS how to even handle it, and we see calls for its ban.
Rules for thee, but not for me.
That is whataboutism, to distract from - I believe - valid and substantiated criticism.
I agree that so much is wrong with Wall Street, but that is another discussion. That is a separate issue to me.
Whenever I see it, I notice people are often basically trying shut down an honest comparative analysis by another party.
The elites put together the artifact that we call the Stock Market. And when the elites play there, they have pretty much a free reign to do as they wish. Sure, there are rules... But as how they're enforced is a whole other matter. And for even the rules that are enforced - if they only have a fine component, they are only meant for the lower classes. Fines for the elites are only a cost of doing business.
And my comments weren't exclusively of bitcoin or other cryptocurrencies. I remember what happened around late February 2021 regarding shorting GME and /r/wallstreetbets . It was yet another case of a hedge fund trying to bankrupt a company in the same way that Toys-R-Us, Sears, and others have had happen to them (by the elite class, no less). And when r/WSB fought against them, corporate elite sycophants like Robinhood and others forbid the very transactions. . When the masses comes together, the elites effectively unionize into a huge bloc, but that didn't save Melvin Capital.
What you call whataboutism is what I call "inherent rigging of the market by the elites against the middle class". It just so happens that the elites didn't get into cryptocurrency until much later, so we see these kinds of one-sided articles.
I'm a huge fan of WSB. Especially because they amount to, "Oh, did the wrong people manipulate the market?" What I don't understand is how anyone confused this as socialism or communism at work. This was straight up capitalism at play. The hand of the market made a move. No rules changed for this to happen. People decided to actually play the game instead of cry. What do you know, the uncontested champions aren't that good at playing the game. Maybe there's room for a good ol' fashion capitalistic shake up. It just took a bunch of apes to go, "Hey, maybe we should stop watching our wife's boyfriend do the dirty and read up on how the markets work. Then we should work together to play the game as the rules are instead of whine like babies." Paraphrasing obviously.
I just don't understand this desperate need to burn a system when you don't even bother to learn how it works properly. And I'm not talking about youtube cartoons. I swear, if you ask someone, "Oh, how did you learn C?" "I watched a few 10 min youtube videos about it. I'm an expert now." You rightfully would be smacked in the face with a flounder... or salmon... or some other big fish. But for some reason, 30 min of youtube makes you an expert in economics, finance and politics. Oh, and I know that's the case because you throw around "elite" like it means anything. Falls under the "them" term like lizard men conspiracy whacks spout on about. Those of us actually trying to break into those ranks through legit business means call them "old money"... or "rich cunts". You probably can figure out which I prefer.
There are all kinds of rules that apply to Wall Street that cryptocurrency seeks (and for the most part, has managed) to avoid. I don’t disagree there is an entirely different system of “justice” for wealthy, white collar, Wall Street criminals but to say Wall Street is without regulation while cryptocurrency is somehow beholden to rules is patently and laughably untrue.
Take a project like Brave for instance which is disrupting the online advertising model: https://brave.com/ (I am completely unaffiliated, just a fan of the project)
Can you look at this project and tell me with a straight face it is bad for the environment and should be banned by government? Because that's basically what Stephen has done when he lumped every crypto together.
They've tied anonymity, opt-in advertisements, and micropayments into one thing. I think it would actually be more difficult to do this without a cryptocurrency.
It's easy to say ban "X" when that is never going to happen. If he was really interested in a solution he would acknowledge the benefits that people are getting out of Bitcoin and provide alternative solutions.
But meanwhile people will continue to complain about Bitcoin while it's market cap will continue to rise and it will keep on growing in usage.
All major banks are now planning serious efforts in the crypto space with massive investments. This isn't going to go away with magical thinking.
How can anyone respect such person? His job is as unethical as it gets. He is a monster and a woke hypocrite.
I no longer think the environmental argument is really plausible here. Clearly crypto mining is emitting using a lot of power and some of that is CO2. But the competition is fiat; backed by fighter jets and nukes; literally. How is it that someone can't steal your money? The bank makes sure. How is it the bank can be sure? The cops protect them. How is it the cops aren't overwhelmed? The military protects them. Law and order stands on the backs of a lot of stuff and CO2. Bitcoin is an example of one little piece of this not needing all that stuff. Instead it's protected by this mining fleet. And if you want to contest ownership there's no one to invade, no one to attack; the best you can do is make a fleet and try to mine. It's a small step in the direction of getting away from all these endless wars and control. A little step away from needing to point guns at eachother to protect our pile of stuff. And this author is saying "point guns at them and make them give it up". That's crazy. Just leave them alone.
(If you need to point guns to save the environment, do that specifically. Carbon tax CO2)
I'm extremely confused by this argument that I see again and again. If you want to avoid your assets losing value to inflation that you can buy assets that are resistant to inflation, such as stocks, real estate, land, gold, inflation-adjusted bonds ...
I just don't see that cryptocurrencies are particularly useful for that. What's the deal here?
Does it? On what basis would one know that? Why should it benefit from inflation more than gold, say?
Lot's of gold is mined each year. Houses are built. Stock is issued, etc. Bitcoin has a well-established upper limit.
Aha! That brings me to my next question. In what sense does bitcoin actually have a fixed supply? Sure, a loose coalition of people agree for it to have a fixed supply at the moment, but if enough of the miners, core developers, etc. agree they can change the rules arbitrarily, viz. hard forks.
Why should we believe that bitcoin really has a fixed supply, just because everyone has roughly stuck to the rules so far?
If a proposal to raise the cap is introduced, price would react negatively, hurting miners, and making it more (relatively) expensive to mine. It's unlikely there is any scenario where it is economically feasible to try to raise the supply cap.
Therein lies your answer: if a large enough number of people place faith into something, it "takes".
The supply of gold might, technically, be "fixed" in the sense that no more of it is being created, but more of it could be discovered at any time.
Bitcoin's supply is mathematically demonstrably fixed. Nobody's ever going to discover a new vein of Bitcoin in the earth's crust, or on an asteroid.
The primary limitation as of now is ore quality, which directly dictates how much energy is required for smelting, and we have a good idea of the decline curve thereof. We know roughly when it will be economically profitable to extract the stuff from seawater, which isn't too far off. In the end, it's a question of energy. Very similar to proof-of-work tokens like BTC, in that regard.
Gold is presumably scarce. Bitcoin is provably scarce.
A lot of things are scarce. Some of those things are valued. Bitcoins may or may not be valued in the future, and if they are it is unknown at what price point they might be valued. Scarcity is only part of the equation.
But it looks like I'm actually going to need citations from you because everything I'm finding so far confirms that we do NOT know how much gold exists in the earth, or where it might be found, or whether it will become economically feasible to extract it. All we know is that discoveries are slowing down.[0][1][2][3]
I've tried to read a variety of sources, from a scientific journal to a metals dealer to a mainstream news outlet to an industry-focused site. By all means, though, if you have citations for your confident claims that you're willing to provide, I'll be happy to read them too.
[0] Earthquakes are still forming new veins: https://www.nature.com/articles/ngeo1759
[1] There may or may not be large undiscovered veins left, especially under the ocean and in Antarctica (and we don't know whether new technology will make them easier to discover and mine): https://www.providentmetals.com/knowledge-center/precious-me...
[2] New technologies are gaining adoption that could reveal veins that were undiscoverable before: https://www.bbc.com/news/business-54230737
[3] There's no reason to believe the discovery of large gold mines is nearing its end: https://www.mining.com/web/were-a-long-long-way-from-running...
If you're a cornucopian, and you're certain that new technology will unlock much more efficient smelting/separation/filtration/asteroid mining techniques, then sure, gold is virtually limitless.
If you're a realist, you understand that ore quality degrades as a function of the fact that we smelt the highest purity ores first, and that while (usually very small) new vein discoveries do occur, they occur as already understood as a statistical variance against a much much larger backdrop of averaging functions.
I'm not discounting the possibility of an extraction breakthrough - it's certainly possible. But revolutions of the kind you're assuming are certain to occur extremely infrequently.
And to that point, I'm a "very long term corncucopian", in the sense that a thousand years out, we will probably eventually realize the Minsky dream of nanobots that can act effectively as the Maxwell's Demon of elemental extraction. But I'm old enough, and have awaited the Singularity long enough, to realize that optimism doesn't make a science, and that this won't be for at least a few hundred years, at minimum. (I'll leave what 300 years of quantum computing work could do to 256 bit hash collisions as an exercise for the reader.)
And that's assuming that we even survive the coming climate and/or resource catastrophe that awaits 10 billion souls in 20 or so years.
Upvoting you because you are precisely me, 20 years ago before understanding how things actually work :)
I'm definitely not meaning to argue with you. I ask that sincerely. I wasn't particularly interested in this subject before, but any time I have a chance to ask questions of someone 20 years ahead of me in anything, I try to make the most of it!
Also harder to take.
Using your approach you'd end up saying something like Apple is experiencing inflation because its price has gone up more against housing, oil, General Electric stock. Yeah, that could be done, but it's not the way the word is being used in this conversation. We're talking about inflation of US dollars against a basket of goods as measured by the CPI as opposed to talking about an increase in housing costs relative to Apple stock.
>Inflation is the decrease in the purchasing power of a currency.
>Inflation is the decline of purchasing power of a given currency over time.
>Inflation is a persistent rise in the average level of prices over time in a given currency.
> Inflation occurs when prices rise, decreasing the purchasing power of your dollars.
Those are literally the top search results for "inflation" when I Google the term. Now certainly your Google search for that term may differ from mine and you are certainly welcome to share your findings. Until then I will rest satisfied that my first sentence expressing that inflation is almost always understood to be with respect to a currency is also true.
Furthermore I believe that investing in real estate promotes those asset owners to contribute to the neighborhoods they've invested in. When you invest in something you are participating in its growth and you're attempting to align your well being with the well being of the asset you're invested in. That's a great thing.
The downside to real estate investment is that it could prevent future people from participation. The solution to that isn't to stop treating real estate as an investment, it's to allow more opportunities for building and to incentivize people to build entirely new communities instead of pigeon holing everyone into a handful of existing mega cities.
I think this is treated differently in different cultures. In Germany, while there is a real-estate as investment market, many people don't (expect to) move much during their lifetime. They buy their home ('Eigenheim') essentially for life (sans the tail end in a nursing home). Still many put a lot of time and money into those houses they don't expect to sell. It's a quality-of-life thing (and some bragging rights). You can (and some do) spend easily a fortune on a kitchen alone. You even find more than one kind of light switch there.
So I'm not quite convinced that real-estate as investment is necessary to drive housing quality.
I am not an expert on the German real-estate market, but the first search results on Google indicate that Germany has a very active real-estate investment market and that home ownership in Germany is among the lowest in the world, the majority of Germans rent their home.
Either those people are renting from the government, or they are renting from a private landlord, either an individual or a corporation. If they are renting from a private landlord, and once again my very cursory research indicates 96.7% of housing is privately owned, then that's a big sign that the landlord owns the property for the purpose of deriving an income from it. Given that 56% of homes in Germany are rented out (one of the highest rates in the world), that indicates that at a minimum, 56% of homes in Germany satisfy the textbook definition of being investment properties.
Resistant to inflation means that the price increases roughly with the same % as inflation.
Hard assets like real estate, land, gold don't fit that bill, but each of their own tradeoffs. Right now cryptocurrencies are making gains against those hard assets so they are more attractive. An investor may wish to diversify among some or all of these options.
Stocks are coupled to the productive output of the firm the stock is issued by, which is coupled to it's real world productivity - which, again, for convenience is measured in a fiat currency.
Nitpick, but the SEC would object to that. That said, American securities regulation has a unique philosophy, i.e. every securities trade must be registered and follow a narrow book of rules unless specifically exempted.
Your broader point, of financial and real assets being proven hedges against inflation, stands.
I believe it's the other way around. It can be denominated in anything, but trading e.g. the deed to your house for some Apple stock is a no no. (Doesn't have to be U.S. dollars, though.)
B)Are stocks and bonds inflation resistant if they are priced in the inflating currency? Not just normal year over year inflation but the type of inflation that happens when you debase a currency. Regardless, I already own these, the first rule of investing is diversification.
C)gold is inflation resistant and tangible so I agree that is the best option if you are truly worried about SHTF but it’s also heavy and more expensive to secure.
Bitcoin, in my opinion, is a hedge on the hegemony of the US dollar which I see weakening going forward. The US dollar is the global reserve currency thanks to the global oil industry. That gives the US a lot of power. But between the switch away from oil, the weakening of the dollar, and the rise of China the US currency dominance looks to be coming to an end. There is no other currency that could act as a global reserve currency except China, which would essentially make China the worlds superpower. That is where Bitcoin comes in: it can be the new global currency instead of China when the US dollar loses its place. Gold and paper only has value because we imagine that they have value, I don’t see how Bitcoin is any more or less imaginary.
The parent comment said "inflation-adjusted bonds". If you don't know what that means, look it up.
As for stocks, they are priced in an inflating currency in the same way that real estate or dogecoin are priced in an inflating currency.
B) Yes, stocks are not directly affected by the currency in which they are nominally denominated! Yes, inflation-adjusted bonds are not affected by inflation in the currency in which they are denominated, assuming you believe RPI to be a good measure of inflation.
C) You can buy gold without having to store it yourself! For example SGLN or https://www.bullionvault.com/ (no connection other than being a happy customer)
> Bitcoin, in my opinion, is a hedge on the hegemony of the US dollar which I see weakening going forward
If you really wanted a hedge on the US dollar you could buy oil, gold, JPY, EUR, CHF, GBP. Buying the hugely volatile asset called bitcoin doesn't seem like a good way to hedge USD.
> Gold and paper only has value because we imagine that they have value
No, gold has value because of demand in industrial process and jewellry. "Paper" has value because governments can demand you to pay it to them in return for participating in economic activity within their borders.
If these arguments are really what bitcoin supporters believe about the value of bitcoin then the whole bitcoin enterprise is in for a big shock.
Are there REITs that don't deal with interest?
Then I doubt that inflation should be much of a concern to you. Just make sure that other income you clearly depend on is adjusted to inflation.
And I have my doubts whether Bitcoin mining is more destructive than gold mining. It's possible (it's a LOT of energy), but gold mining is also pretty nasty.
Also, as a comparison, nearly all the gold mining machinery runs on gasoline.
You might not like it, but that is definitely the reality. Other kinds of currency and investment are a few times more useful as long as you are doing legitimate business.
For example the 10000 BTC pizza was one of the early purchases. If BTC stayed at 0.1c then you could still use it and it was used.
Caveat to this is now the mining infra means that returning to 1c coins would kill Bitcoin as a secure network since no one would mine for profit - the only reason to mine is the 51% attack
Fact is that Bitcoin is used a whole lot for laundering and transferring money in illegal businesses or across borders without taxation. The "legal" part of Bitcoin transactions which aren't just for investment or speculation, like "Pizza sales" or something, are, for one thing not that practical, for another not that popular or significant.
So it does stand to reason that most of the speculation is around the use of Bitcoin for laundering money. And even those with the best intentions are helping the money launderers by keeping the network alive and secure.
But this is hypothetical anyway because with ASIC mining and dedicated power plants you can’t go back to a low price (other than zero i.e. network trust is lost!).
I would imagine even $1000 Bitcoin now would introduce issues of too much hash power. With too much has power and not enough mining incentive in USD terms you’ll just get network attacks.
U.S. dollars are backed by violence. Bitcoin is backed by math.
I don't know what you want backing your money in the world you hope to leave for future generations, but I know what I want backing mine.
If you're violent enough, nothing is going to protect me or the people I love from you, but that's regardless of whether my money is in Bitcoin or USD. There's no disadvantage for Bitcoin here.
The added difficulty of your obtaining the reward you seek actually reduces your incentive to try. The only incentive to kill me then is blind violence, and I guess you can admit to that motivation if you want, but it's protective for me against anyone less psychotically violent than that.
That's literally the entire point of proof of work.
It is reasonable to object to USA's use of the latter while enjoying the benefits of the former. Indeed I do so.
You can see my related comment below, but if you're motivated by the money, this protects me. You'll never get it if I'm dead.
If you're motivated by violence, though, nothing protects me. But the same is every bit as true if my money is in USD.
Bitcoin (like gold since the gold standard ended) is just a "check" on Fiat currencies and can act as insulation from central banks that issue too much money too quickly.
Fiats will continue to exist alongside bitcoin/cryptos, they'll just eventually have to "compete" a bit more (i.e., not be printed so readily by gov'ts) or else they'll become significantly less relevant.
Lots of good reasons to do so, if only to prevent the democratic power over market regulation becoming "much less relevant".
There's an immediate competitive advantage (in the form of increased business activity & tax revenue) to the first country to adopt clear, consistent rules regards CCs and their use. If a few big countries try to ban it, that competitive advantage becomes even stronger for any country willing to buck the trend.
It has been small enough that a single Billionaire could bail it out when it got into trouble.
Once you hit the point where it'd take > $10B's to bail out Bitcoin it is going to unwind eventually in a bank run/panic.
This time is not different, and those who fail to understand the past are doomed to repeat it.
And its driven at this point by greed and "number go up".
And the reason why people like it is that they put $10 USD fiat in one day and draw out $100 USD fiat some time down the road, and its that ability to extract fiat from it that it is tied to. It isn't any kind of alternative. Everyone watches how much it climbs in USD denominated terms. Nobody remembers "1 BTC = 1 BTC" even as a joke any more.
Bitcoin is also extremely easy for the vast majority of the population to quit. You don't need it to buy groceries, you don't need it to pay your mortgage or your taxes. When the supply of $USD in the system goes to zero and the price collapses from a large enough height, there will not be any floor to it.
Cryptocurrency is very niche tech at best, that most people will have zero use for - but it should nonetheless be available. The OP article does not account for this at all, and is thus extremely misguided.
At first glance, I find this an interesting take and it makes me rethink some things. But I don't think I find it very convincing, or at least it's too exaggerated. Fighter jets and nukes primarily protect physical property and institutions, not cash. The primary purpose of banks is to lend, i.e. to allocate resources, not to protect people's cash. And police don't spend much of their time on currency theft - it's much more about order in public space. A side effect of all these things is a stable society in which cash can thrive (backed by the idea that you can pay your taxes in it).
I'm willing to believe that bitcoin would survive certain modes of societal collapse that fiat currency wouldn't. I'm not sure that those modes are particularly likely to happen.
Typically, the concept of "military force" like fighter jets, aircraft carriers, etc in criticism about fiat currency (especially $USD) is about connecting the dots to explain the strength of that currency.
E.g., USA gets Saudi Arabia to sell oil denominated in $USD and in exchange, Saudi Arabia monarchy gets "protection" from invasion by enemies like Iraq. This is one concept of the "petrodollar". This military protection requires fighter jets, etc. This makes $USD valuable to acquire by other foreign countries that want to buy oil. In contrast, Bitcoin doesn't need the expense of the military to decree that it's valuable; people just voluntarily agree to exchange it for value. (E.g. exchange 10000 bitcoins for 2 large pizzas.[1])
The (wasted?) energy for defending the $USD is more diffused among different institutions so it's harder to measure -- and thus harder to criticize. In any case, energy usage also includes the Treasury Dept's Secret Service anti-counterfeiting force running around the world to stop fake currency. The Bureau of Engraving that prints the sheets of paper currency. US Mint stamping coins. All the above require enormous energy expenditure as well. Then you have the energy costs of the Fed Reserve, member banks, etc all doing settlement with each other and the associated security systems to protect from hacking. Bitcoin doesn't need any of that. Does bitcoin use more or less energy than the collective sum of energy to maintain integrity of $USD? I have no idea. What's the best complete accounting of the carbon footprint for $USD?
Here's a very thought provoking article about the "dollar system": https://phenomenalworld.org/analysis/the-class-politics-of-t...
But the point is that if you want the "maximum wealth" for your export stuff and you export a lot you obviously want to settle in your domestic currency, since that would lead to you being able to stock up on enormous amounts of foreign currency reserves. Just like China did.
Because if there's demand your your currency you can just print it.
Sure, this way they are stocking up on USD, but they can't print USD.
The destabilization on the other hand is also "exported" to the US. Eg, when oil demand drops, US Treasury rates increase coupled with the economic downturn, less tax revenue, more volatility, but this increase in uncertainty leads to people flocking to stable investments, which pushes rates back down a bit, plus it seems central banking is inseparably coupled to near-zero rates going forward.
(Of course the US economy is a lot bigger, they were the main buyers of oil anyway, so it made sense to just settle in USD, and initially the extra demand for USD was seen as a good thing, as it helped finance the US public spending via keeping bond yields - interest rates - low.)
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That said, I'm not fully sold on the linked article's arguments.
Since I lacked the necessary knowledge I tried to think about how the effects work from first principles and I always came to the same conclusion. When it helps it does nothing and when it hurts the downsides are grave and a strong economy is necessary to just be able to counteract the effects of the exorbitant burden. This is compared to the misguided idea that the dollar having the global reserve "status" as some benefit that helps the USA.
Global reserve status is basically equivalent to a partial currency union similar to the eurozone. There are two potential effects. Either your currency becomes stronger than the average currency in the currency union or your currency becomes weaker. Germany is "riding" the effect of a weaker euro to export goods and thus creates a savings glut in the nations it is exporting goods to. The reserve situation is that your currency becomes stronger than it should be. You get nations like Greece or Spain that are struggling with debt because additional savings can only exist if there is a debt somewhere to balance savings and investments.
Once I started reading up on the downsides [0] of having your currency be a major global reserve currency it pretty much confirmed everything and it made the situation completely hopeless. There are no good answers here. The hands of the USA are tied and the situation is pretty dire.
The USA obviously has a stronger currency than it would usually have. This means importing products from overseas becomes the obvious choice and domestic consumption is avoided. The weak demand causes unemployment and now you are at the ultimate economic dilemma. Do you create government debt to create investments for the savings glut or do you let people become unemployed so that domestic savings go down to make room for foreign savings? The only choice is to just do endless deficit spending thanks to the "exorbitant privilege". It's not really a choice.
[0] https://carnegieendowment.org/chinafinancialmarkets/56856
Whether it is hosting videoes or simply not guarding your currency from export like a jealous dragon.
The fact that Nvidia can create chips for GPUs, and Amazon can package them up and deliver them and all your other computer parts to your front door is also subsidized by the Petrodollar. Everything is!
If the U.S. just stopped defending the Petrodollar, it's not like the $USD just goes away or ceases to be valuable. The fighter jets don't disappear or stop being made.
It's also slowly becoming outdated. The U.S. is a net exporter of energy and the shale revolution has made the Middle East just a bit less important.
Anyway - I don't think it's a great exercise to compare Bitcoin energy usage to the "energy usage" of the $USD exactly because it's so difficult to really measure. You also have to think forward a little bit - as cryptocurrencies proliferate more companies will arise around new technologies, custodianship, etc. so when we talk about some abstract number of people in an office now supporting the $USD, we have no idea what the future number of people supporting the cryptocurrency networks will be in the future - it might actually create more jobs and more energy usage.
I see one real advantage to Cryptocurrency: protection against government misuse of monetary policy.
But aside from that, it's still up in the air for me to see how things go. The $USD is a pretty good currency (mostly holds value in the short term, accepted everywhere, highly liquid), but it isn't a phenomenal store of value. All of these fiat currencies and cryptocurrencies are going to be competing in an arena and it's going to be interesting to watch.
Meanwhile you talk about the USA securing its access to oil by using a potent "weapon" called the US dollar, delivered by the US military. The dollar isn't what's being protected, what's being protected is the entire economic system of the USA that is dependent on oil. If it was really about the dollar then the USA could protect it within its own borders. The US dollar is already strong enough as it is.
Comparing these completely different things makes no sense. There is no Bitcoin nation.
The two are inextricably linked. You could not run an economy of this size without a currency to underpin trading value and denominating debt. So defending the strength of the economy is defending the strength of the currency the economy is denominated in.
This is really not the case anymore in the 21st century, especially with interest rates where they are now.
This is basically it. I don't know how bitcoin advocates expect property rights (in fact, any right) to be upheld in the absence of a coercive state. They have become so removed from reality that they don't see the most obvious things.
Errr something something blockchain?
However, it does make money laundering, speculative kiting, and paying for illegal services easier. Those are arguably the opposite or orthogonal to property rights, but they are useful to the those with money and power.
I totally admit that a State is needed to ensure safety. There’s always a boogie man. Not sure if that’s true for all rights though. What do you think?
Most of our forms of fraud protection, like identity theft, bank robbery, etc, basically boil down to the government looking at you and going "boy, that's not fair what happened to you. Even though the closest thing we have to a hard store of value's been taken from you, we're just going to literally rewrite the books and set you back to the state where you had your money." It literally treats storage of money like a database restore.
The beauty of that is they can do that without losing anything (besides slightly inflating the system) - with hard currency (whether gold or BTC), they have to actually deplete their reserve of stored value.
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The most extreme example of this historically, was the national debt crisis britain had during the south sea bubble, where most of the country got wrapped up in a giant stock-buying scheme for a company that ended up having no value. This ponzi-scheme crashed, and it briefly looked like something like half the country was going to go bankrupt.
What was amazing about it was that the government realized they had absolute executive power, and just forcibly reset the economy. They just decreed that all of the debts related to it were cancelled, and dictated that individual assets which had been collateral for the debt (like people's houses) had to be returned to them. Many instances of "stores of currency value" got wiped out, but the important thing the government provided was a floor - you might have all the money you earned on south sea speculation deleted, but they guaranteed the average person didn't end up in poverty.
Or they deliberately try to ignore the entire safety mechanism because it goes against their narrative that government control is bad, it collides with this libertarian spiel. All to keep the grift going.
When not understanding or misunderstanding things makes you more money (let’s you recruit new ‘suckers’) a honest discussion will start to become impossible.
These seemingly disparate camps -- fringe right and "anarcho"-capitalist -- share a fundamentally anti-democratic philosophy. For example, one of the seminal texts of "anarcho"-capitalism is Hans-Hermann Hoppe's _Democracy: the God that Failed_. If you look through my posting history, you'll find a quote from Tim May, an "anarcho"-capitalist and leader of the cypherpunk movement, wherein his anti-democratic sensibilities are on full display.
I'll end with a quote:
Begin quote. More than that; we can tell them that they will search the pages of history in vain to find a single instance where the common people of any land have ever declared themselves in favor of the gold standard. They can find where the holders of fixed investments have declared for a gold standard, but not where the masses have. End quote, from William Jennings Bryan's "Cross of Gold" speech.
I'm totally in favor of a cryptocurrency ban; we will not be crucified on a cross of bitcoin.
Your observation that cryptocurrencies are also embraced for nefarious - democracy undermining - purposes seems an additional aspect that justify a ban.
It’s just such a shit show, I hope the music stops soon, in order for a lot of people to lose their ‘faith’ in this ‘currency’. There is a finite supply of suckers.
Meanwhile, Bitcoin has undergone such massive speculative appreciation that everything around it has deflated in comparison. As a result, bitcoin is spectacularly less useful than it would have been. It is no longer useful as a method of transaction and really only a ledger and store of value.
this inflation argument is specious. It just isn't the problem that demanded an unregulated anonymous deflationary currency.
Deflation decreases the value of work you have already done.
Are you sure? Deflation increases the value of work you have already done and decreases the value of work you will do in the future.
Simple example: If I immediately convert my paycheck in BTC then I would have earned more BTC in 2013 than in 2021. My work in 2013 would be worth more than the work I did in 2021.
In a deflationary environment, you would naturally be paid less over time, rather than paid more. Rather than a default of losing money, you are in default of gaining money. Prices adjust lower, and by saving money you are naturally gaining wealth vs. people with lower time preference who are spending money.
But in reality, all of this is psychology. There is an amount of wealth in the world, and this is the sum total of all owned assets. We can use any unit of measurement we like to value this. If today there is $1 million total in existence, and tomorrow we double the money supply and there is $2 million, we aren't all suddenly 2x richer. Just as when the central banks print money, people aren't richer - we are redistributing wealth away from people's savings and towards the receivers of money. Wealth is only truly created when useful and productive enterprises grow.
Deflation seems good if you're sitting on wealth. You'd be happy to wait things out just buying the basics and let the economy kind of reset from necessities upwards. But lots of other people are starving by that point.
Source?
It’s great for anybody that can provide a useful service for cash. Especially farmers. Farmers suffered all through the 1920s because they mortgaged their land during WW1 to massively increase supply, and then the demand disappeared. The problem, they said was not starving people, but that food was too cheap! So the big indebted farms banded together to stop food shipments from family farms, and the government responded by giving the big farms a handout.
So no, deflation doesn’t mean starving people. I talked to a bunch of old people about this. Work was rare, but you only needed a few unskilled labor hours a week to pay for food and housing, and that was always available. They said life was pretty good if you didn’t have a mortgage.
But really we’re talking about lack of inflation here. Not deflation. Deflation only and necessarily must occur with inflation preceding it.
In order for the investment to make sense, the growth on the asset needs to be larger than the growth of the value of the money, plus risk. So in a deflationary currency, loan interest rates must be higher to be worth it. If loan interest rates are higher, then the cost of doing business increases. If the cost of doing business grows, the price of goods to increases. And when the price of goods increases, this causes the amount of goods sold to drop. This causes the income of the business to drop. Which increases the risk of investment, causing interest rates to go up.
This cycle continues until everyone is holding on to their cash, and no one is spending. The way to break the cycle is to have cash start to lose value, or inflate. Then the interest rates drop, and people start to spend their money.
Another way to think about it is:
Say it costs 1.00$ to make a loaf of bread in 2020. By 2030, there's a robot that can make a loaf of bread for 0.10$ in 2020 dollars. So because society has become more productive in those 10 years, the work you did in 2020 is now worth 0.10$ 2020 dollars. So we can think of a dollar as representing the cost of goods, at the time that you did it. So if you make 1$ worth of bread in 2020, it should be able to buy the same amount of bread in the future. So we inflate the currency 10x, so bread still costs for 1$ in 2030, but now there's 10x the amount of bread to go around, and people make 10x the salary, so for people who are currently making money, bread is 10x cheaper.
Now, you still want some inflation on top of this, since you want to push people away from sitting on money and towards putting that money to productive use. But that's the core rationale.
And how is ‘investing’ a productive use of capital? In deflationary regime, business is about cash flow. Inflationary regime investments are all speculation, and everybody has to play the game.
This Keynesian argument comes from a nihilistic disregard for social structures, the environment, and future generations. Look him up. “In the long run, we’ll all be dead” - Keynes
If you hold onto cash, it does nothing. If you invest it, either directly, or by giving it to another entity to invest on your behalf (IE, a chequeing account at a bank or mutual fund), it allows someone else to make use of it, and in exchange, you will be repaid with more cash in the future.
If we want to have something like UBI to take care of income instead of work, that still comes from tax dollars, which relies on economic activity (capital gains from investment, income tax, sales tax, etc).
In other words, less economic activity has specific impact on real world people and how much money they can get. It’s not just about investing, not just about billionaires.
>This Keynesian argument comes from a nihilistic disregard for social structures, the environment, and future generations. Look him up. “In the long run, we’ll all be dead” - Keynes
Is this supposed to be a joke? How are old people becoming rich through no work, no productive investment whatsoever supposed to help future generations? Future generations receive greater incomes than their previous generations thanks to inflation. With deflation they receive lower incomes than their previous generations.
When you own deflationary money and you do nothing with it you basically create a claim to future work in the past. By working at a simple 1800s job you have created a claim to the labor of someone working a software job even though you took no part in enabling that job to exist in the first place. Same with the bread baker robot. By holding onto the currency you never created an economic environment that enabled such an investment to be made. You just held onto the currency and once someone was foolish enough to build the robot you obtained a claim to its productivity.
There is actually no difference between inflation and deflation. For every inflationary asset basis, there is a deflationary asset basis. Flip bread/money in your own text and you see the problem.
The only difference is taxes. Tax basis could be anything. Let’s say, SHA-256 hashes. Every year, the hash value of your dollar investment account quadruples. You need to pay for half of those gains, or else you go to jail, and if you resist, you can be legally killed. The price of food and shelter is irrelevant to me. Pay me. Can’t? Okay, we’ll collect tax in Bitcoin, but we’ll have to raise the tax rate to 90%. We can go back and forth on this as much as you want. In the end, I guarantee the guy with the legal right to kill you ends up owning everything.
In conclusion: inflation and deflation are both the same thing, and they both suck.
If people's money starts losing value, the last thing they would do is to be concerned with interest rates. With less valuable money, people would simply be able to afford a smaller consumption basket and, thus, spending will stay flat & consumption will decrease.
> ... people make 10x the salary ...
Where did this come from? Just because the productivity would increase 10x / cost would decrease 10x, it does not mean that workers would receive 100% of the relevant benefits. Most likely, 90%, if not more, of those would be routed to business owners (and robots' owners, if the machines are leased instead of bought).
If your money starts losing value, do you A) put it under the mattress or B) trade it for things that you can either use now or that retain/grow their value in the future?
Now, if you're talking about erosion of wages over, that's less of an issue of inflation, and more an issue of the power dynamic between owners of capital and owners of labour.
> Where did this come from? Just because the productivity would increase 10x / cost would decrease 10x, it does not mean that workers would receive 100% of the relevant benefits. Most likely, 90%, if not more, of those would be routed to business owners (and robots' owners, if the machines are leased instead of bought).
Sorry, I understand the confusion given I used the term 'salary'. I should have said something along the lines of 'value' or 'goods'. The split between workers and owners depends on the surrounding conditions.
The point is that dollars are tokens that represent goods produced, at the time they were produced. Not how much energy or effort went into those goods.
It depends on the situation. For example, if one lives paycheck to paycheck or close to that, then I don't see how they would not put a bit "under the mattress" (emergency fund) and spend the rest on basic needs. There is only so much food one can buy to store at home for future consumption. On the other hand, if income >> costs, that's a totally different story ...
> Sorry, I understand the confusion given I used the term 'salary'. I should have said something along the lines of 'value' or 'goods'. The split between workers and owners depends on the surrounding conditions.
No problem. Re: "depends on the surrounding conditions" - it is a very diplomatic way of avoiding touching the core of the income inequality issue.
> The point is that dollars are tokens that represent goods produced, at the time they were produced. Not how much energy or effort went into those goods.
Not sure I understand this point. It seems to be against one of the basic economic principles that I remember (price of goods = cost of production + margin / added value) - where cost of production implies exactly "how much energy or effort went into those goods". Perhaps, I'm dumb as rock or completely forgot Economics 101. :-) For example, if a TV model A costs $200 and model B costs $2000, it is not just because they "represent [different] goods produced", but because model B is much more expensive to produce and/or it has much more added value [real and/or perceived] than model A.
I'm looking at excess capital used for funding loans, business, etc. So I'm more focused on this case. I take you point that inflation eats up ~2% of cash savings yearly, and that it's a bigger deal the less wealthy you are.
> it is a very diplomatic way of avoiding touching the core of the income inequality issue.
I'd say that deflation is much worse for income inequality, since sitting on cash becomes profitable, so the people who can afford to do it the longest win out.
I don't think either inflation or deflation will solve income inequality. I think that's controlled by taxation of capital gains vs. income. Specifically, the lower capital gains tax, and the ability to sit on unrealized capital gains without paying taxes on them in the mean time.
> For example, if a TV model A costs $200 and model B costs $2000, it is not just because they "represent [different] goods produced", but because model B is much more expensive to produce and/or it has much more added value [real and/or perceived] than model A.
I think where we're diverging is:
- You're comparing two different goods produced at the same time. - I'm comparing two identical goods produced at different times.
So if you make a baguette in 1921 and sell it for 5$, and then try and buy a baguette in 2021, it should cost 5$, despite the fact that the amount of energy/work it takes to produce a baguette in 2021 is much lower than in 1921. The money represents the value of the end good, not the work that went into producing it. And so if the good becomes cheaper to produce over time, you'd want to inflate the cost of it to keep it level.
> And so if the good becomes cheaper to produce over time, you'd want to inflate the cost of it to keep it level.
I'm a bit confused about this part - why would you want to "keep it [the cost] level" between 1921 and 2021?
That part is specifically meant to contrast deflation with either stagflation or inflation. If you drop the nominal price over time, you're setting a Ponzi scheme. By virtue of selling something in the past and holding on to the token, you're entitled to more of it in the future, without any risk. And you're preventing the token from being spent by someone now who could use it.
And likewise, I appreciate the line of questioning, it helps me reflect and think about this. The details are a bit fuzzy, and I'll need to think more about some goods that seem deflationary (computers for example)
I disagree. Money is a store of value that is separate from society - gold is an international currency accepted organically because of its useful and intrinsic properties, with thousands of years of history in a wide variety of cultures that had no link before trade began.
There is no "debt" here. Society doesn't "owe" the holder of money anything, necessarily.
By the way, you're wrong in that money a) is only a store of value (it also functions as a medium of exchange and a unit of account) and b) is separate from society (in the modern world, in most countries, it is only government who has legal right to issue [primary] money).
This is bad for investors and producers spending money now in the hope of earning more money in future.
On the other hand, simply holding onto cash is risk free, and that cash will have increased purchasing power in future (at the expense of the producers forced into offering lower prices to get money circulating again)
An economic system which deters investment, production and consumption but rewards inactivity is not a healthy one.
Deflation doesn't discourage investment and consumption. You still need to eat, have shelter, and pursue happiness. It increases the bar at which you will part with your money, as merely holding it has a high level of return. This is a superior system to me.
Euphemistically rephrasing something is not a refutation. Inflation does not make investment decisions "mindless", but deflation does make the average risk adjusted return on an investment negative.
> It increases the bar at which you will part with your money, as merely holding it has a high level of return. This is a superior system to me.
The "high level of return" is at the expense of people who are not freeloading, who are forced to create this return for others by making more stuff for less money. Why is it superior for the monetary system to be designed to reward those who put in no effort and take no risks at the expense of those who do?
You can have an economy with a single dollar, if it can split far enough. Printing new money isn’t increasing the total amount of wealth in the world. It is redistribution.
Or you can just put your money onto a bank account that nets interest. The fact that interest rates are down is actually the sort of result of deflation. The reserve currency status puts immense deflationary pressure onto the USD. The government is forced to go into debt to cancel this pressure. If it did not do so employment would plummet.
There is not deflation happening right now. There is massive and sustained inflation, which you can see all around you in terms of high quality food prices (meat, cheese, seafood), housing, all forms of education not subsidized by the government, medicine, cars, and on and on.
The reserve currency status of the US dollar is a side effect of the US' relatively brief global hegemony which is rapidly collapsing, plus the reduced global importance of oil which has been priced almost exclusively in USD. There will be many threats to USD from other countries (China, the EU) and experimental technologies (Bitcoin, Ethereum).
Several generations of economists have bought full-on to a failed economic system. We have been seeing many problems with it over 40 years since we removed any pretense of the gold standard,[0] but we have seen it over and over and over with various crises. Anyone who thinks our current monetary system is the best humanity can do is not thinking critically.
To give a simplified example, if a farmer takes out a $50k loan, then at current prices they might be thinking that can be repaid by selling 10,000 bushels of produce at $5/bushel. However, if there is subsequently 20% deflation, then the price would fall to $4/bushel and the farmer would all of a sudden find they have to sell an additional 2500 bushels to get out of debt. If they can't, they risk losing everything to foreclosure.
The closer you are to the money printer, the more money you get. This is the cause of inequality - we have so much fresh money printed with nowhere productive to go, so it goes to inflate the value of housing, education, medicine, and any good that is widely desirable yet scarce. The rich get richer, the poor poorer.
When you consider that we cannot just produce everything we need for the next 200 years in 1800 it becomes pretty obvious that we must keep working from 1801 to 2020 to get to 2021. We can't just sit and do nothing. After all, what are you going to buy with your paper wealth, if nobody is working on the farms and the population has shrunk?
What deflation does is reduce the cost of everything. People who are ambitious and want to better their situation will still work, earning an income. People still require goods and services to survive (and thrive). In a deflationary world you reward savers, who delay their gratification, rather than an inflationary world that rewards debtors, who desire instant gratification.
Again, there is nothing inherently useful nor required about inflation. We can live in a world where prices are stable, decreasing, or increasing. I like the one where prices are decreasing.
Target inflation is specifically intended to promote consumption. Consumption, particularly in the form of atoms, not bits, is approximately 90% correlated with greenhouse gas emissions, despite all our efforts to roll out renewables.
Setting the "inflation is good" argument alongside an article decrying the climate impact of inflation-resistant currencies is . . . well, it's an interesting take.
Unless and until we are manufacturing/growing and transporting consumptive goods via renewable and sustainable means, promoting inflation is most certainly contrary to climate stability.
inflation encourages investment in renewables. the deflationary nature of bitcoin appreciation means owners of bitcoin are going to defer current investment in renewables because the future value of bitcoin is greater than the present value of clean energy.
Investors like oil & gas because has a low enough Price to EPS ratio to feel like an undervalued safe haven and it still pays dividends like nothing else.
Don’t forget: every $100 invested in bitcoin is $100 of bitcoin sold. There is always somebody on the sell-side. When they receive the money, they may also do productive (likely technology-based) work with it.
No, it's intended to erode debt. Inflation is effectively a transfer of wealth from creditor to debtor.
How does the price of BTC, which is almost infinitely divisible, affect usage?
I see comments like "We're early, price can still rise, etc". Outside of a store of value any usage / institutional use for transactions wouldn't matter right? The BTC is a proxy for the money / collateral on the sides.
If I buy a hamburger with BTC:
If it is settled in BTC then the burger price would adjust often.
If it is settled in anything else, I just adjust the sat / slice of BTC I use.
Am I missing something? Outside of a store of value.
* Who knows if this will continue
That incurs a relatively high flat fee (somewhere between $5-$50 dollars in recent times).
It doesn't make sense to pay this fee for small amounts (though is great for large amounts).
You can get around this by using exchanges and the equivalent of credit cards where multiple transactions are rolled up into one wallet to wallet transaction. This comes at the expense of volatility or if your bullish it comes at the expense of having to float a growing bitcoin reserve.
This is not an option for a lot of businesses, basically you need a 3rd party provider for it to make sense for these businesses and realistically that means they're getting cash value at time of trade and it's the provider that is taking on the volatility risk/reward of waiting to trade there bitcoin.
Also bear in mind that much of that CO2 generated by the force you’re describing, aside from the people guarding the banks directly, is amortized across all the other things that force guards. Even if fiat were replaced by Bitcoin overnight almost all of it would still need to be around.
If Bitcoin were a country, on its own, it'd be ranked 27th in the world on energy consumption. Looking at the chart there it very clearly uses as much energy as several countries (say: New Zealand, Hungary, and Peru) put together.
just 2 points:
* using crypto will not make the military stop existing
* switching to Proof Of Stake would solve almost all bitcoin problems
...but bitcoin will not even consider keeping PoW and switching to argon2, since the investment of miners in dedicated hardware is too great
So I think honestly the bitcoin community is stuck. It will not change, not even when there are options that would only improve the technology underneath. Still stuck at less than 10 transactions/sec, I see.
As a tech enthusiast, bitcoin has lost all its value to me. As an investor, the quick value fluctuations and overall value increase are a great thing.
To me, the conclusion is that bitcoin is not anymore about tech (the project is completely static at this point), it's not about anonymity (it never was anonymous), it's not about distributed stuff (dedicated hardware and search for cheaper power are concentrating mining). It's just about quick investment that gets you money. Everything else feels like a lie.
But you can't change everybody's mind like turn off a switch. Adoption takes time and change people's mind is difficult, but it doesn't make everyone else to be lying.
This will also create a very severe problem: it makes it so the means of coin production exist solely in the hands of the coin owners today. Those coin owners won't ever sell you enough coins for you to be a competitive staker. At least with PoW, I can make more coins through extrinsic means -- i.e. better mining hardware.
Example would be if you had 1 US bank account sitting on a billion, never used it, so the govt is like, well you're not using that so we'll give it to someone else lol.
I personally am against billionaires existing. So, capping a coin at 1 billion or 999 million, makes sense to me - but only if there can ever be only 1 wallet per person. There could maybe be sub-wallets, but these are more like drawers in a dresser where the dresser is the wallet, and the drawers are compartments. Maybe a compartment in the wallet is a joint compartment that you share with a spouse, child, or a business/DAO or some other form of trust...
There's a lot of things possible, that could happen... but I think PoW still makes bad sense, because we do have a global warming issue that is starting to pick up in terms of severity.
I stopped reading at this point.
2.) You have to pay taxes on staking rewards. So unless they intend to lose money they have to sell at least that much.
All of it is CO2. Let me explain.
When you burn energy for bitcoin mining, you don't just use capacity of your local energy producer, you are delaying removal of legacy power producers.
Before a particular power producer (for example burning coal) can be turned off, the capacity must be created from other sources (for example renewable). If you decide to start burning huge amount of energy, before those CO2 guzzlers can be turned off we will now have to build even more capacity -- exactly the amount you are burning to mine bitcoin, but it also means that while this is happening the CO2 is still being emitted.
This assumes that introduction of new renewable sources of energy is independent from bitcoin mining. As far as I know this is true.
Or in other words: if introduction of renewable sources of energy is independent of bitcoin mining, the energy production from these sources is the same regardless of whether the bitcoin mining exists or not. Logically what this means that what is changing is energy production from non-renewable sources and it could be explained that they are working at either higher capacity or their removal is delayed.
It is not. There are marooned renewable energy sources (dams) that have had limited usage (the dams being mainly for flood control) until miners came along. Building high capacity transmission lines to them wasn’t economical.
We are looking for at least significant portion of 130TWh the mining network currently uses. I just don't see all those old dams adding anywhere close to 1% of that value (although you have a chance to post your sources).
You see, bitcoin mining currently uses 10x the amount of capacity used by Google and 50% of what ALL DATACENTERS IN THE WORLD are using.
https://www.bbc.com/news/science-environment-56215787
Your argument doesn't hold any water (pun intended).
Increased demand for energy brings more energy supply into the market. New energy is mostly renewable energy.
Old plants are shut down when they are unprofitable. That can be because they're inherently too expensive to run, because the carbon inputs are being taxed too heavily (I think this is a good one), or because the governing body controlling the physical location of the power plant has declared them illegal (since you can't profitably sell something you're forbidden from selling).
I'm not making the "Bitcoin is good because it drives renewable energy investment" argument, which is too handwavey for my taste. I'm saying your argument is incoherent.
Reducing carbon emissions from power plants is mainly about pricing the externality they generate. Cryptocurrencies, in fact, any application for that generated power, neither harm nor help achieve that outcome. It's irrelevant special pleading, and it's a distraction from this urgent goal.
Work towards ending racism; support young girls, women, and LGBTQ+ folks around the world; support environmental protections and projects that reduce food waste and increase water security; support fiscal policies that reduce wealth inequality; and topple authoritarian dictators and fascists.
In this techno-libertarian utopia when someone defrauds you and steals your crypto-coins your only recourse is to buy the justice you can afford. Exchanges have already done this to folks who've been defrauded and sought recourse.
Regulation and protections are in place to protect consumers just as much as they are there to limit damage from bad actors.
I don't buy this notion that the world would be better off without a central banking system.
This makes the violence worse every time the Americans stumble in and think they know how to fix a country by instilling new leadership.
The reality is, as I have predicted long ago, if bitcoin becomes large portion of worlds financial flow it will just be taken over by financial institutions and perverted for their use.
These guys have much more experience at this (ie subverting financial systems) than you can imagine.
Bitcoin is not going to stop wars and bring law and order.
If bitcoin was supposed to be the safest method to move funds around then why people have higher chance of loosing their bitcoin for various reasons than almost any other kind of equity?
You are just naive.
I don't like this meme. Fiat currency is backed by an entire democracy that includes a military, but the key piece here isn't the military, it's the democracy. Despite all the problems in the US and our economic system, the folks in charge of the currency generally have the right mandate (stable employment and stable prices).
Otherwise I can for example find the top 100 largest Bitcoin miners and walk up to their door with guns and demand all their Bitcoins or I'll blow up the mines.
Bitcoin is an energy hog, and not very exciting... but don't throw the baby out with the bathwater cause there's TON of exciting research on blockchain that's way better. I think long-term bitcoin may fall out of popularity, esp as all the new things hit w/ ethereum, cardano, and their competitors and all the sub-chains on them and level-2 making it so transactions aren't nearly as costly.
Not according to the Bitcoin genesis block, without which Ethereum never would’ve existed.
https://medium.com/@simon.sarris/the-guns-of-bitcoin-1f77930...
No one except for the owners of major BTC mining operations.
If a state actor, such as China, was motivated enough to identify, capture and coerce these miners it would be pretty easy to perform a 51% attack given that China accounts for around 65% of all bitcoin mining globally.
Or they just deploy their own mining pool.
Or the just tax all of their citizens’ cryptos.
They have lots of options, since they have the power of the state behind them.
Soft and hard forks are a defensive mechanism against 51% attacks, essentially making them an always losing proposition outside of the immediate-term where the attack is occuring, because the attacker has to expend so much money, and then a simple code change could revert it, which would likely happen in consensus for the network if such a malicious attack would occur. Hence, no rational actor will likely even consider a 51% attack.
Yes, and the elephant in the room with Bitcoin is that it's only going to get easier. Despite the categorization of Bitcoin as non-inflationary, the computational power of the network is currently ~85% subsidized by block rewards that grant miners new coins (i.e., inflation). Once those are diminished through halvings, either transaction costs will have to go up about 7x to match the current incentive, or the network difficulty will come down as miners go offline. If the latter happens, not only will the hash rate go down, there will be a flood of mining hardware on the market as miners exit the game.
Oh, and if “layer two” solutions ever do take off, there will be downward pressure on transaction fees, too.
That Bitcoin is some immutable “backed by math” financial system has been a charade all along. It’s very much backed by people, and proof-of-work is a Rube Goldberg machine used to distract the tech-literate.
This is because people don't consider it likely. Once it happens, people will move to new crypto and will devalue any crypto that is too centrally mined by a single country.
Currency flight from China is a serious problem, and the CCP has instituted controls to make sure money doesn’t leave the country (except for some permitted amount)
I don’t think it’s unlikely that BTC gets cracked down on by the CCP if they notice that a large volume of citizens are using it to skirt capital controls.
What matters is public perception of if it could happen, not if it can happen.
Ultimately, Bitcoin is backed by node operators and widespread social consensus. Thinking China can just split and control the network is a pretty serious misunderstanding of the power dynamic in this system.. one we all had demonstrated at the conclusion of the block size wars.
Satoshi wanted it to be backed by Proof of Work, but now you’re saying Bitcoin is backed by social consensus... just like the US Dollar I guess?
Probably the article ignores it but not the governments or corporations who suddenly are worried about the environment.
Most of my friends can't afford investment in the market. So when the stock market goes up that's them losing value on their dollar and wages.
Inflation is fine for those who are part of the asset class.
I'm not sure what you mean by, "when the stock market goes up that's them losing value on their dollar and wages" -> that simply doesn't make sense
It does you just don't understand yet. Let me try and explain.
Inflation measured by the government in CPI is a bad metric. It doesn't include ownership in assets which is the ability to retire.
We already had inflation if you measure the cost of retirement in USD. With the spending package we drove a bull run.
The SP500 going up in price is equivalent to the value of USD going down for anyone who doesn't own part of the market. They have to buy in at higher and higher cost.
Younger generations have been priced out of an ability to own and in turn retire. While those who owned assets experienced a nice boost this year.
When the cost of retirement goes up the value of USD goes down just like anything else.
And frankly, it takes energy to mine, so if crypto became integral to national political and economic interests, there is not going to be any net change in energy politics. You are not unlinking the petroleum and currency in those petrodollars, you're replacing it with something that directly links to two inescapably.
> the core reason for cryptocurrencies; escaping inflation and control
Maybe in a whitepaper. In the real world, it's mostly about speculation and enabling crime.
> Law and order stands on the backs of a lot of stuff and CO2. Bitcoin is an example of one little piece of this not needing all that stuff.
Ok...? This is nonsensical.
> Instead it's protected by this mining fleet. And if you want to contest ownership there's no one to invade, no one to attack; the best you can do is make a fleet and try to mine.
Or someone can beat you up and make you give them your password. Rubber-hose decryption has a long track record and is trivial for the right actor to implement, this isn't some weird edge-case.
> It's a small step in the direction of getting away from all these endless wars and control.
Citation badly needed; how does cryptocurrency "get away from all these endless wars"?
> Carbon tax CO2
Ok, this is correct and not incoherent.
Is this about DNMs? Because last I checked their volume is tiny.
Speculation I could agree with... however,
Crime? Really? Got anything to back this up? The vast majority of crime is performed using cash.
> Iranian thinktanks have also emphasized the need for the nation’s government to use cryptocurrencies to circumvent US-led international sanctions. It now appears that the Office of President Hassan Rouhani has become more serious about using crypto. [2]
A rapidly growing percent of nuclear weapons proliferation is being funded by crypto. That's way worse for the planet than crime performed using cash.
[1] https://www.coindesk.com/doj-charges-3-north-korean-hackers-...
[2] https://www.crowdfundinsider.com/2021/03/172786-iran-is-repo...
In that basis let's get rid of nuclear power because Iran use that. I think they also have the internet so while we are at it let's get rid of that.
That’s exactly what they did.
Isn't it perversely possible that the environmental impact of another two more Iraq War scale conflicts plus end of ongoing middle east presence means that ironically Bitcoin and nuclear weapons combined could help the environment net in comparison.
Sort of the logic behind a joke "They say that nuclear weapons kept the cold war cold, they say want peace in the middle east yet when I give Palestine Iran and Palestine nuclear ICBMs suddenly I am now the bad guy here?"
https://blog.chainalysis.com/reports/darknet-markets-cryptoc...
Anecdotally: people buy lots of drugs using cryptocurrencies. Not that I would ever do such a thing…
[1] https://twitter.com/sergueyz/status/1365040381155491841
Quote: "$100 bill spans 22-23 years with about 20 operations per year, 450 operations in total, 220 for median. We need to calculate probability p that operation is not illicit. p=0.2^(1/220)=0.9927. Probability that operation is illicit is 1-p=0.0073 or 0.73%."
I was answering clearly biased twit about "only 1% of transactions using bitcoin are criminal and 70%-80% of $100 bills are used in criminal transactions". The calculation above is for worst case of 80%. For best case of 70% of transactions are illicit, the probability of single transaction being illicit drops to 0.55% (fifty five hundredths of percent).
Thus, bitcoin carries from one and a third (1.36=1/0.73) to almost twice (1.8=1/0.55) more percentage of illicit transactions than money.
That’s the same line authoritarian governments used to demonize encrypted communications.
Part of that "used for crime" shit is about things that are against the law just because nobody reported buying a car or something like that, too.
If you live in a country with a highly functional banking system and no kleptocracy, Bitcoin is probably a bit puzzling unless you have family in Cuba. But it’s not puzzling at all for those of us who live somewhere in the middle of the broad spectrum between Switzerland and Somalia, because most places have a little kleptocracy. Argentina is a stable democracy, far from being “a failed state,”† but if you want to send US$500 abroad via non-Bitcoin means it’s basically impossible, and the only broadly available savings vehicle is real estate (“ahorrar en ladrillos”). This of course grossly inflates real-estate prices, with a substantial part of the capital city occupied by empty apartments someone bought “as an investment”. Historically, Argentines have saved by buying dollars, but that’s limited to US$200 a month now, and then only if you have a non-under-the-table job (about a third of total employment is under the table):
https://www.ambito.com/finanzas/dolares/cronologia-del-cepo-...
You can see that in September 02019 when this measure was imposed the price of a dollar was AR$63.50; now it’s AR$139. So whatever savings you had in pesos in 02019 have lost 57% of their value to peso devaluation.
In 02001 a lot of Argentines had saved dollars in their dollar-denominated bank accounts. This did not preserve their savings through the financial crisis that year; the cash-strapped government limited withdrawals to a trickle, then converted dollar deposits to pesos at a one-to-one rate, then released the exchange-rate peg, at which point peso went overnight from being worth US$1 to being worth US$0.25 before settling at about US$0.31 for the next few years. The US did something similar in 01933.
Some might suggest using “alternatives to banks like credit unions where customers—as owners—hold more power,” but Credicoop depositors suffered the same two-thirds confiscation of savings as depositors in for-profit banks. And they pay the same 3% tax on bank transactions including checks. That’s more than a fast Bitcoin transaction fee of US$15 for transactions over US$500 (though see below for data on current transaction fees).
This month there's a new development: every eligible person or company in Argentina (about 12% of the population, and about 20% of the bank-account-having population) gets locked out of their bank accounts until they comply with the government's new "economic census" program. At 5 days from the deadline there were still 700'000 depositors who hadn't complied:
https://www.cronista.com/economia-politica/que-es-el-censo-n... https://archive.fo/Os91S
But we’re not a failed state. There are no gangs of bandits roving the streets in Argentine cities (though there are some pretty bad slums where you’ll get robbed if you wander in without knowing anybody). Courts, free public hospitals, and roads continue to function, though there are more potholes than a year ago. Argentine infant mortality is 10 per 1000 live births, down from almost 20 in the late 01990s and the same as the late 01980s in the US; life expectancy at birth is 77 years, worse than Switzerland’s 84, but the same as China and Hungary, and better than Saudi or Mexico. (Somalia is 54.)
Most of the world is worse off than Argentina, although not necessarily in such a statistically transparent fashion. About one fourth of the people in the world are unbanked, 51% here in Argentina; even advanced countries like Russia, Hungary, and Uruguay have roughly a quarter of the population unbanked:
https://www.gfmag.com/global-data/economic-data/worlds-most-...
And if your family lives in a country like Iran or Venezuela subject to US sanctions, and you live in the US? Good luck sending them an ACH, instant or otherwise!‡ It’s well known that Bitcoin is very popular in Venezuela, which kind of is a failed state, so one of the Venezuelan governments is trying to tax Bitcoin remittances at 15%.
Bitcoin handles a few billion dollars per year in such remittances. This might seem like a trivial amount of money to someone in a rich country, but in poor countries, it’s enough to keep several million people alive.
Even in the US, it’s common for the police to confiscate large amounts of paper currency just because they can (“civil forfeiture”); US bank accounts are probably fine for US$100K but probably somewhat risky for US$10M if the bank thinks you don’t seem like the kind of person who ought to have it. US$10M in US$100 bills fits in a box you can wheel around on a dolly, but Bitcoin is a lot more practical. (And of course US$10M in dollar bills loses about US$200k per year to inflation.)
Transaction fees are high enough that you wouldn’t want to use Bitcoin to pay for a can of Red Bull or even a restaurant dinner. But it’s extremely practical as an alternative to Western Union or US$100 bills or gold, even with the current very high transaction fees. At the moment, the break-even point where the Bitcoin transaction fee is less than the 3.4% spread you’d pay to a jeweler or black-market money changer is around US$3000, because the median Bitcoin transaction fee in the last block was 1.7 millibitcoins, which is US$100:
https://btc.com/0000000000000000000ae1cdc00169e5fb6931d10584...
A month ago it was 0.31 millibitcoins:
https://btc.com/00000000000000000000476ab57eea9be8ada36e2680...
But there were transactions that made it into the last block with a transaction fee of only 0.082 millibitcoins, or US$5:
https://btc.com/81032a76e7ced9678996446ea05c91329d028af2fbfe...
So, Bitcoin doesn’t have to be a cypherpunk utopia to be a big improvement on the status quo ante. For those of you living in stable countries where your worries are things like “instant and extremely low-fee ACHs” and “decentralized utopia”, this may be very confusing, but try to remember that most of the world lives in places with much more pressing concerns, concerns that Bitcoin helps a lot with. And you may live there too, soon—the loyal subjects of Kaiser Wilhelm in 01913 certainly didn’t expect that in 15 years they’d be in the middle of a hyperinflation episode that remains legendary a century later.
____
† We’ve remained democratic since 01983, electing presidents from three different political parties (UCR, PJ, and PRO), and there’s no serious insurgency. It’s the economy and government policy that are ruinously unstable, to a point that seems satirical to anyone accustomed to the US, but is lamentably common worldwide. Rich people sometimes say they don't know of legitimate uses of Bitcoin outside of “failed states”.
‡ Family remittances are specifically exempted from the US sanctions on Iran, but good luck finding a US bank that’s willing and able to take that risk: https://www.wiggin.com/wp-content/uploads/2019/09/26580_advi...
Correction: 54%, if we're counting from the September number I gave. The average inflation rate since 02001 has been about 19% per year, although the government statistics are faked to hide this.
So about that: https://www.crowdfundinsider.com/2018/06/134729-transferwise...
I believe in fact one of the core aspects of this critique is that cryptocurrency is often presented as the only solution to problems that are either already solved or that have obvious conventional alternatives.
That article says that TransferWise was going to offer service in Argentina. Looking at TransferWise's web site (now wise.com) they currently support converting money to Argentine pesos but not from Argentine pesos. So maybe if you're in Argentina and you have US dollars in your TransferWise account you can send them to someone else abroad.
But how do you get the dollars into the account in the first place? TransferWise doesn't seem to have a storefront in Argentina where you can walk in and deposit dollar bills. Their nearest office is in Brazil. Apparently to pay them you have to use the banking system.
But, as I've explained above, the Argentine banking system prohibits most people from buying any dollars at all, and the people who are allowed to buy dollars are limited to US$200 per month. It's easy enough to buy dollars on the black market, but there's no way to put those dollars into a bank account, and thus no way to send them to TransferWise.
So maybe that's why I know people who have successfully sent money out of Argentina with Bitcoin, and I think I know someone who has sent money into Argentina with TransferWise, but I've never heard of anybody successfully sending US$500 or more out of Argentina with TransferWise.
If it turns out that TransferWise actually does work for this at some point in the future, though, it would downgrade "sending US$500 abroad via non-Bitcoin means" from "basically impossible" to "a hundred times slower, expensive, and unavailable to the 51% of the country without a bank account". Cryptocurrency would go from being the only solution to just being the best solution.
Some of the people do have these problems, but they aren't the ones who have power.
Rich people in Argentina already have most of their money in offshore bank accounts, so these "problems" aren't problems for them†; they may even benefit from them; for example, because they can buy bigger houses and pay their servants less, and things like the rigged currency system give a lot of tools to the ruling party to reward their supporters with. When the official exchange rate is 30% below the real rate, for example, an import license is virtually a license to print money.
So, I think that providing workarounds to the people who need them, cryptocurrencies probably not only ameliorate the most immediate and pressing concerns of poor parts of the population like Venezuelan immigrants, but probably also adjust the power balance in a more liberal and democratic direction. This will improve the chance of those concerns being ameliorated by public policy over the next decades as well. But it's hard to tell what will really happen. The potential disaster scenario is that, by making most taxation impossible, cryptocurrencies destroy the modern welfare state without providing anything to replace it. So the public hospitals close, the enormous police force starts to support itself by extracting tribute, and the infrastructure decays. Pretty similar to what's happened in the US over the last 50 years, in fact, only more so.
However, at this point I think the modern welfare state is already doing a good enough job of destroying itself without any significant help from cryptocurrencies—as evidence, I can point to Maduro, Macri, Bolsonaro, Trump, and Brexit, and metonymically to the social changes they betoken. So at this point I'm more worried about cushioning the collapse than preventing it.
______
† That isn't the way I see it, because I've seen how rich people in more egalitarian societies have better lives than rich people in Argentina, but it's by and large how powerful people in Argentina see it, and that's what counts when we're trying to predict the political effects of events.
It seems to me you're implying that the colossal environmental damage inherent to a Bitcoin-driven world economy would be offset by the abolition of militaries, police, and banks, but I don't see how you make that jump. $trillions of military spending are used to secure resources and strategic assets and ensure national security, not to defend against bank robberies. A world without militaries or police is unimaginably different from our world in so many more ways than just the medium of exchange.
And if you can't point guns at people to make them give up part of their pile, how will you implement the CO2 tax?
The soldiers lining up your countrymen and shooting them in the head so they fall into a ditch become the new owners of your countrymen's USD and milk caps, but not their Bitcoin or rai stones. This kind of thing (the "pillaging" part of "raping and pillaging") is historically a major incentive for going to war.
> If tanks roll over your capital city and your countrymen are made to kneel in a row, what good is it that you can refuse to give up the private keys?
If your seed phrase is erased from your brain by a bullet, it probably doesn't do you much good. But it will completely change your life if you manage to escape: a refugee with pockets full of gold is observably different from a destitute pauper; a refugee who has memorized two seed phrases is not observably different from a refugee who has memorized only one. That's the difference between starting a new life as a homeless beggar and buying a country estate to retire on.
> the colossal environmental damage inherent to a Bitcoin-driven world economy
You seem to be begging the question here; why should we expect a Bitcoin-driven world economy to produce colossal environmental damage? Mining Bitcoin with fossil-fuel energy is unprofitable, so we should expect Bitcoin to produce a colossal shift to cheaper renewable energy, which may reverse the colossal environmental damage caused by fossil fuels. Or it may not.
Or with all the mining concentrated in China, you can, as the Chinese government, take state ownership of all those miners and don't have to spend a jet or nuke to do it.
"Fiat currency" isn't backed by violence. It's backed by production in goods and/or services. You can see this easily play out in command-control economies. The resource rich, like Venezuela back in the day, was a prosperous country for a few years. Gov controlled oil meant that's how they made money. When the price of a barrel of oil is high, they just pump that oil, increasing the need of the international community to purchase their currency, bringing up the value. When their oil wasn't needed due to diversification of supply and the drop in price, no one "wants" said currency since the country had nothing anyone wanted. Thus, the value goes down and you have hyperinflation due to high economic specialization. All the military equipment they bought and posturing, which led to a hilarious wannabe propaganda-scare video, during the good years didn't amount to shit. You really think if Bitcoin magically became the almighty currency, war would disappear? I'm serious when I say this, quit watching Sesame Street and other children's shows. Be an adult. Read a history book. No good change will come from praying to unicorns.
On average, less than 1% of a country's population is active law enforcement in the western world. It's just a hair over 1% in the US according to Bureau of Labor numbers and that includes all the admin/support/not-arresting LE as well. Y'all need to quit looking underneath your beds and checking your closest for the blue boogey man. They do a whole hell of a lot more than just "protect the banks". That's what G4S does with their tactical muffin tops. At that, here's a good example of the difference between what a police officer can do and what a sheriff deputy can do: https://www.npr.org/sections/thetwo-way/2011/06/06/137002727... This happens more often than you think throughout the country. We don't hear about it because banks and other financial institutions swiftly put gag clauses in settlements. Banks do a fantastic job of teaching you how you can't use the justice system in your favor when in reality, you have more power than you imagine. Stop watching them youtube videos and go to the local library to learn more about local laws and procedures.
Contest ownership... yea, still a problem with Bitcoin. Just look up "Bitcoin stolen" in your search engine of choice and there's article, after article, after article of theft and a cold day in hell's chance of retrieving it. There's nothing special there on that front. It's a preferred means of trade for the black market for a good reason.
On one level, I don't care about the crypto ponzi scheme being played out. Let it happen. Madoff tricked a whole hell of a lot of people for around 20 years. Good. What ruffles my feathers, pushing a political agenda because you want to be rich in monopoly money, then use it to buy ice cream. Then throwing a fit because the cashier won't accept it. Yea, the amount of excess CO2 created by crypto mining is a valid and big problem. It's another industrial sized country on the world grid because of it. You act like this is some magic cure for "the poors", to help distribute wealth and other fantasies. Because there's a magic mechanism for a rich cat in USD to not do the same in BTC? The same way they garnered wealth in USD, GBP, JPY or EUR will do the same thing in any other new currency, making the point to the "revolution" null and void. Oh wait, Musk already started that. What's that, they found a good way for a loophole in being able to issue refunds in USD or BTC according to how they see fit depending which is cheaper? Yea, that sweet sweet "for the people" currency not going into the hands of the, what is he now, 3rd richest? 2nd richest? But I guess that makes him a fellow poor too since he's not 1st. Great step forward for that great reset. Let me tell ya'.
Don't get me wrong, crypto's price is a ponzi scheme build on fomo. Scarcity shouldn't be the only thing required to create value. But here we all are proving time and time again that psychology at scale _can_ at times be more powerful then economic theory.
Also: > With a blanket ban on cryptocurrency, the economic engine of the American system would do what it does best, a new wave of investment from the private sector would be redirected back into productive enterprises and new ventures that could strengthen US markets and the Dollar instead of undermining it.
American banking infrastructure was antiquated and rotting in its own success before bitcoin was a thing. Paying money with a phone is still considered 'innovation' in the US as far as I've heard, lagging the EU, India, and China by a decade.
> Halt all wire transfers of dollars in and out of cryptocurrency exchanges. > Halt foreign entities trading in dollar cash-equivalent crypto assets. > Add Chinese and other foreign cryptocurrency exchanges hiding in tax-havens to sanctioned entities lists. > Regulate the sale of any existing cryptocurrency assets to US persons by classifying them as securities investment contracts moving forward.
I'm not sure what the Dollar is going to be in 20 years, but if the US did this, historians would look back at this action starting a new global divide that ends in war and/or the collapse of the US dollar.
Which brings up another point that gets glossed over but should be stated at least once in this context: The status of USD as a reserve currency for every bank around the world is what allows America to print so much money. It is a national security issue and the US will use force if the position is at risk.
And in the smoldering ruins of some unnamed city, someone can trade his bitcoins to buy a can of pre-war chicken and a pack of cigarettes because bitcoin escaped inflation.
You aren't escaping inflation. You're escaping a savings glut which is the mortal enemy of inflation.
Nothing against desire to solve world problems but Bitcoin (edit: or any other example of a cryptocurrency) seems to be creating more problems than it purports to solve.
The author calls cryptocurrencies a "predatory investment scheme". In practice, is this not correct. Is it not the lack of "law and order" with respect to cryptocurrencies that allows for this to occur. Please explain. Show me how cryptocurrency is solving world problems. Evidence, not speculation.
When I was young people said that "money" itself was the root of all evil. Today, people online try to convince us that "fiat currency" is the problem. It does not feel like the same idealism.
The original Satoshi paper made his idea sound like it would be possible to implement as peer-to-peer^1 without third parties. All the implementations I have seen to date involve third parties. Doubtful a coincidence that the third parties are all profiting from that involvement.
1. The term now has multiple meanings. Here it is used in the original, Napster sense. Peer-to-peer networking, not, e.g., peer-to-peer financial. Edit: To clarify further what I mean by peer-to-peer, can person A and B, assuming each knows how to reach the other through the internet (address:port), conduct a transaction without involvement of a third party. For example, a requirement for person A or B to "sign up for an account" with anyone else in order to start using a cryptocurrency would be "involvement of a third party". If persons A or B needed to have a third party "mine" the currency before transactions between A and B could occur, this would also be "involvement of a third party".
Bitcoin sort of stopped being developed years ago and pretty much everything shifted over to Ethereum where the ethos of Bitcoin were further developed and most of the things people talked about in 2010-2013 were actually developed. For example, Uniswap is completely peer-to-peer and decentralized. Most of DeFi is. If you are at all interested in what is happening in this space it's worth taking a look at what exists and what is being developed.
That seems like a non-sequitur. Proof of work crypto generates an astonishing large amount of CO2 to little effect. Some other alternatives are bad in other ways, yes, but that doesn't make the CO2 go away.
I live in a small, peaceful, stable country with a very small military and very safe banks. If you're really trying to make some sort of argument that fiat currencies can't exist without a significant CO2 expenditure to try and enforce neoliberal orthodoxy at the barrel of a gun then that is very obviously untrue.
> Instead it's protected by this mining fleet. And if you want to contest ownership there's no one to invade
So your argument is that nobody will steal my fiat currency from my electronic wallet (aka, bank account) because of the police, but nobody will steal my crypto currency from my electronic wallet because of their respect for pure math; no need for law and order?
Respectfully, you might want to try and develop that argument a little further.
> It's a small step in the direction of getting away from all these endless wars and control.
Key driver of most wars is resources, especially energy, not money. I'm confident that we are not collectively dumb enough as a species to end up in a state where we're fighting wars to obtain energy resources to fuel blockchain mining, but that is a thing that can theoretically happen.
I think you're falling prey to the is/ought distinction. It would be nice if crypto currencies could somehow create world peace, resolve the contradictions of late stage capitalism, cure cancer, <fill in your dream here>. But they obviously can't, and I would suggest pretending otherwise is pointless.
Who do you think is keeping the infrastructure (electricity, internet, companies that produce equipment,..) on which bitcoin runs safe?
The author positioned himself as the sole source of truth. Then, as a judge, deemed all cryptocurrencies and their operators as an evil. Then, wants to use the full powers of the United States (judicial, police, regulators, diplomatic) to enforce his ruling.
It's not even clear why this author should have any authority? He doesn't have any projects, ran any companies (or any mentions of that) or did any significant academic work. His whole blog is a crypto rage: https://www.stephendiehl.com/blog.html
Indeed, and that makes it quite hard to to pay any attention to what he has to say or read to the end of the article.
Search alittle deeper and you see why he hates crypto so much.
He's CTO of Adjoint:
"Adjoint Treasury is a real-time payments and settlement platform for corporate treasury"
A.K.A, Crypto is stealing his thunder.
There are easier ways around the "energy use dilemma": carbon tax. If your energy used for mining comes from renewable resources, then there is no issue.
This isn't an academic exercise, this is an issue that renewables operators are dealing with right now. Hydro-Quebec is the state-owned corporation which handles all generation, transmission, and distribution in the province of Quebec. As the name implies, the vast majority of Quebec's generating capacity comes from large hydroelectric facilities located in the north. The company sells hydropower to the northeastern United States during times of day when demand is high. This is a mutually beneficial arrangement: the profits from the sale of hydropower in peak periods allows Hydro-Quebec to subsidize its own ratepayers who enjoy the lowest electricity rates in North America, and the Northeast US in turn doesn't have to build as many peaking power plants which are typically gas-fired facilities that produce CO2.
However, the low cost of electricity in Quebec has made it extremely popular with crypto miners, to the point where Hydro-Quebec has been forced to place miners into a 300 MW allocation block [1]. Miners who didn't manage to get into the allocation block are charged a rate that is more than double the normal rate in order to try and disincentivize their activities.
If the crypto miners weren't in Quebec, this excess energy would be sold to the northeastern US where it would displace the capacity of some CO2-generating peaker plants. But because it's being diverted to crypto mining, the energy doesn't get used for that.
2. I'm willing to bet that the economic multiplier for money spent on a gold mine is far higher than a crypto farm. Even looking at job creation alone, gold wins.
3. The literature [1] disagrees with your assertion that gold mining uses more energy than bitcoin generation.
Don't know if that's the case with the author, but from what I've been seeing in social networks and such, it looks like some people have decided crypto is an alt-right thing (not true) and we should "cancel" it. Ironic, because there's nothing more conservative that banning crypto and sticking to fiat.
Bitcoin doesn’t create value at al in any sense.
And HF trading is a different beast, you won’t hear me defending them. But pointing at others is just whataboutism, to distract from unpleasant facts.
Boiling the oceans to make a few people rich(er) is not a valid reason to exist.
Money drives people to do insane things. Governments only care about the environment insofar as to stay in power and to keep their citizens from interrupting their gravy train.
Look at the numerous examples politicians using “green” initiatives to line their own pockets.
Attacking cryptocurrency is in their best interest because they can’t control it. Full stop.
If the people care about the environment and will vote people out of office who don't take care of the environment, that seems like a system that works. If a small number people are allowed to destroy the environment, that takes away the people's right to a livable planet.
>>Look at the numerous examples politicians using “green” initiatives to line their own pockets.
One can make money and help the environment it doesn't have to be one or the other
They could, for example, pass laws that mandate backdoors, which would mean any cryptocurrency developers in the country would be thrown in jail if they didn't comply. They could also ban operating P2P nodes in the cryptocurrency's network. Due to the nature of P2P it isn't possible to hide the fact that you're running a node, unless you also close the entire network off to new users. (Case study: BitTorrent filesharing lawsuits) The government would just have to run their own nodes and connect to other users to collect information on who needs to be arrested.
I don't think people on HackerNews entirely appreciate how much their ability to do cool fun hacker stuff is a function of living in an advanced democracy where there are significant limitations on the power of government upon which the government has agreed to remain, people's innocence is presumed in criminal proceedings, and private actors trying to curtail said freedoms are looked upon with skepticism, if not outright legal condemnation.
Hundreds of thousands of computer servers running almost 24/7, hundreds of thousands of people driving to work, burning energy on their development machines. Hundreds of billions of dollars spent on making products (and wasting energy) to support this industry, which then must be transported, wasting more energy.
We must ban this scourge: entertainment!
This entertainment industry (TV shows, movies, podcasts, video games, etc. used primarily for entertainment) adds nothing and is unproductive.
/s
But not totally sarcasm. Maybe bitcoin isn't truly solving all the problems we hoped it could. Perhaps those problems will be solved by a better version, maybe Ethereum or some other cryptocurrency.
Let's not kid ourselves into thinking that energy isn't wasted in other parts of the economy. What's a "legitimate" use of energy? I think most Americans, generally protective of individual rights, would say let the market decide.
If Americans want to pay for TV shows, let the entertainment industry burn energy to give it to them.
If Americans want to buy/sell/transfer Bitcoin, whether to watch their "investment" go up and down in value, or for some other reason, let them.
Bitcoin mining currently uses 10x the amount of power used by Google and 50% of what ALL DATACENTERS IN THE WORLD are using.
https://www.bbc.com/news/science-environment-56215787
This also means that our efforts to replace non-renewable sources of energy are being wasted as we are just adding capacity to bitcoin mining network. When you are paying your taxes and subsidize "green" energy know that part of your subsidy just goes to shit.
Let's also look at something else: the US department of defense:
"...The U.S. military also produced more greenhouse gases than Morocco, Peru, Hungary, Finland, New Zealand and Norway. According to the research from Brown University, the Pentagon would be the world's 55th largest CO2 emitter if it was a country..." [0]
I think reasonable people could disagree as to whether or not all those emissions were worth it. The point is that many people think the U.S. military is by and large a complete waste of resources analogous to the waste of the Bitcoin network.
If we're going to condemn Bitcoin, let's condemn all the other resource and energy wastes out there.
[0]https://www.forbes.com/sites/niallmccarthy/2019/06/13/report...
Military is there because we don't know how to do better.
Just like democracy is a shit show of inefficiency but we just have not figured out better system of government yet.
But we know how to transfer money without burning huge amount of energy and that is the point.
>Military is there because we don't know how to do better.
This is exactly my point. Many people think we *do* know how to do better: stop spending so much of our resources and energy on militarization.
If we want to say that Bitcoin is a waste of energy, let's also point out all the other things people think are a waste of energy.
Peace is a temporary equilibrium where nobody profits from starting hostilities. Nobody profits from starting hostilities because they know it is going to cost them.
If you are not being robbed or beaten or raped that is because there is police and government that can ensure anybody doing this faces good chance of paying high price for this.
Between governments this is done with a prospect of war but that prospect only exists if there is military to back it up.
Just go and ask China or Russia to reduce their military efforts. See what comes out of it.
You need to read some history, man.
What about the entertainment industries of the world? Is it ok to spend resources on entertainment but not bitcoin?
That’s not even mentioning Proof of Stake, which will essentially solve all of these problems.
1. False equivalence, since the environmental concern is about the generation of cryptocurrency not its social implications vs a crypto-currency-free world.
2. You've expanded this question so much that it is not possible to answer. The political structure that keeps money is use is basically the political structure of almost all world states, and capitalist/money-based economies. So the cost is about 100% of all energy expenditure. What's the alternative? You would need to imagine an anti-capitalist revolution creating a non-exchange-based economy (so not USSR-style either). I happen to think that's a swell idea, but you realize there is absolutely no way you can estimate how much less energy humanity would use up in such a different reality than today's.
> 1. False equivalence
It's additionally a false equivalence because those political structures also keep in place the things you want to buy with bitcoin, such as shops, factories, and things you produce bitcoin with, such as power stations and computers.
But is it really huge? I mean, compared to BitCoin mining? Or, if you like - compared to, say, the energy consumed by people's personal computers and mobile phones? I'm not so sure. I mean, I would guess it's not all that much, but it's pure speculation on my part.
I don’t see that ever happening. I don’t think governments can (or should!) give up that much control over the financial system.
And this argument actually reaches back to prove itself: since crypto will always be used for speculation and not fill a useful role in transactions, all the energy used is effectively wasted!
Personally, I don't see much of a reason for Electricity neutrality. It's not like the power companies could use their discretion to disadvantage their competition. Nor does the contention for power lead to large barriers for entry.
And more pragmatically, banning crypto would be less politically suicidal than implementing a carbon tax
I didn't notice the difference in rates until just now, but California's cheapest off-peak rate of 14 cents per kWh is almost twice what I pay for electricity in Washington (8 cents per kWh). It currently costs me $6 to fully charge my car. If I had to pay California rates, charging would cost $11-38 depending on the time of day.
1. https://www.pge.com/en_US/residential/rate-plans/rate-plan-o...
2. https://www.forbes.com/sites/bradtempleton/2019/11/19/pge-ra...
I don't know about electricity, but this certainly exists for fossil fuels.
In some country, diesel has a completely different price if you use it in your car or use it in your tractor to plow a field.
The environmental impact should be regulated, but other than that, governments should just stay out of it and let the cryptocurrency landscape be the wild frontier its proponents want it to be. May the best obfuscated smart contract code win, until no one wants to play anymore.
I suspect that a politician who thinks the crypto market is going to crash will wait for that to happen before implementing a ban. At that point you will not need to pay compensation and there will be political support for it.
In the meantime the government's best option is probably tight regulation and prosecution of any outright fraudulent operations.
It would raise some money you could use to mitigate environmental impact, but I'm not sure that a reasonable tax level would actually disuade anyone from putting their money in so less helpful from that point of view.
I agree it would be hard to get the tax in because of vested interests and yeah people will still buy it but if the money is used to properly offset carbon it might be worth it. But I’m a dreamer!
Note that the author of the post is based in London, UK: https://www.stephendiehl.com/
But clearly positions himself as as USian.
No, some people think scarcity and trustlessness make it a good store of value. This is not even addressed in the article.
> Cryptocurrencies disproportionately victimize vulnerable people and those in marginalized communities without access to traditional investments or financial advisory.
I don't see any good evidence for this, the goal of many DeFi projects is to increase access.
Overall an unfair and needlessly inflammatory evaluation. The idea that all cryptocurrency is a scam that "masses of dumb money investors" buy into is overbearingly pretentious, and a non-starter for legitimate criticism IMO.
Also, if you're going to bring ecology into it, then instead of advocating for the ban of cryptocurrencies, it makes much more sense to put your energy into banning the economic system which systematically incentivizes externalities (of which carbon pollution is one).
Granted it's a small sample set, but this rings _very_ true with respect to many people I "know" (acquaintances I'm connected to on various social media platforms) who've jumped onto the "crypto" bandwagon in recent times.
* Implement a universal carbon tax. Make CO2-based mining unprofitable.
* Require KYC/AML checks and tax reporting from all exchanges, and prosecute/block those that don't.
Wholesale banning cryptocurrency is a fool's errand without a massive restriction on general-purpose computing and Internet usage. So, let's attack the problems they create instead, since we already have the tools and legal precedent for doing so.
Fiats will continue to exist alongside bitcoin/cryptos, they'll just eventually have to "compete" a bit more (i.e., not be printed so readily by gov'ts) or else they'll become significantly less relevant.
Am I the only one who thinks this is a 2 way street and our governments are actively doing the same to our adversaries?
Or the other case could be that they feel they've lost out on investment, due to the fact that openness and decentralization is leading the charge in blockchain/cryptocurrency technologies, while he's trying to come up with a privatized solution... and why accept private when there's better and more established open alternatives already leaving their marks, no pun intended.
Instead of banning Bitcoin completely, just make it illegal for individuals to run cryptocurrency nodes or perform mining operations. In it's place, each government can then run their own cluster of nodes for the general public to use as a cryptocurrency.
This way, the general population has access to cryptocurrency, but government can monitor and control all of the transactions that take place to ensure that no illegal activity arises. In addition, governments could also control the issuance of private and public keys, which means that funds can be easily confiscated in the event of fraudulent behaviour.
Of course, the main issue with this setup is that the nodes will be centralized, and therefore are at a greater risk of physical attack. This can be solved through physical force, which will consume energy in itself, but will be far more efficient than using a globally distributed proof-of-work mechanism for protecting the transaction history of the currency.
Furthermore, in the event that a nation state scale attack takes place to try and undermine the transaction history of the government-run nodes, the force required to protect these ledgers can be scaled up to match it (e.g. war). However, I believe this to be an unlikely scenario, and so the overall cost involved with protecting the cryptocurrency would be less than what is currently consumed by proof-of-work.
In short; instead of using electrical energy to protect the integrity of the currency, we use physical force instead (which will be far more energy-efficient).
To me, this quite clearly solves the energy consumption, without having to perform an outright ban on the technology. This way, everyone benefits.
I don't mean any disrespect when I say this, but when I read comments like, after the initial shock subsides, there is always a realization that we all have such widely varying and disconnected worldviews that I simply don't understand how mass governance could every work without eventually succumbing to violent conflict... Not trying to make any comment on the underlying merit of either worldview, just that it's like we live in completely different realities... It's very depressing, to be completely honest.
There are a large complicated set of reasons why it isn't going to happen but the proof of this is that many governments have many reasons theyd love to ban crypto but they don't because in the end they perceive it to be either an economic or political loss and can't make it happen.
Anyway, this isn't keeping me up at night.
This is either false or unknowable, there are plenty of reasons why bitcoin speculation is happening, and it's because it has been a very long time since there has been a new desirable commodity.
>The largest elephant in the room is the environmental damage done by bitcoin mining.
This is very true, i don't think it's the largest elephant though.
>Cryptocurrencies disproportionately victimize vulnerable people and those in marginalized communities without access to traditional investments or financial advisory.
This is nonsense. Desperately marginalized communities have no access to safe economic vehicles, which bitcoin does, theoretically, provide.
>Cryptocurrency is, by design, the single greatest enabling factor in the rise of exponential explosion in ransomware extortion attacks. A network which is designed to evade sanctions...
This i believe is the best argument for banning it. There is no better tool for extortion in the world than an anonymous, unrestricted asset. We should expect to see a dramatic rise in kidnappings worldwide in the future as bitcoin becomes more accepted.
The author leaves out what I believe is the main reason I've stayed away from bitcoin, and it's another reason to ban it.
It's easy to steal.
It only takes one 0-day wipe you out, irreversibly, and completely. My bank could get hacked, but we, as a society, can just decide that I still have the assets I had before, the paper stocks and coupons are in a drawer somewhere. The loan contracts are in a filing cabinet (or they should be). I get my bank statements every month. There's some cash and some gold in a vault. A breach is, at least theoretically, reversible. That's not true with bitcoin.
Alright well that means it could also be true...
>It only takes one 0-day wipe you out, irreversibly, and completely. My bank could get hacked, but we, as a society, can just decide that I still have the assets I had before, the paper stocks and coupons are in a drawer somewhere. The loan contracts are in a filing cabinet (or they should be). I get my bank statements every month. There's some cash and some gold in a vault. A breach is, at least theoretically, reversible. That's not true with bitcoin.
Isn't this more just an argument that cryptocurrency's are just riskier because unlike tradition financial institutions/investments they are unregulated and lack protections such as insurance etc. Maybe I am just getting caught up in semantics but a 0-day wiping out the value of Bitcoin/Crypto with no vehicle in place to restore that value to its owners if something were to happen just makes it extremely risky/highly speculative investment not necessarily easy to steal
n = How many 0-days are out the there that could topple the systems in control of the BTC I own.
p = The probability that said exploit is used on me and my wallet and not someone else.
n * p = my risk of losing everything
p is very small, but n is very, VERY... big
With tradition assets, they are backed with contracts that can make potential thefts unwound or made whole in some other way. With crypto, every ocean's 11-style cat-burglar in the world has access to every bank in the world... and that can't be unwound.
I think this misunderstands how bitcoin holders become wealthy. It works a bit like Van Gogh paintings - some guy produced something kind of cool but not worth much money at the start and then the reputation of the paintings increased and the price got bid up and now you'd say someone owning a $100m Van Gogh is wealthy. Similar with bitcoin - not worth much at the start, kinda cool, now worth a lot, you'd say someone with $100m in bitcoin was wealthy. Against that it needs 'greater fool' type buyers to buy your painting or coins but Van Goghs have held up well and I doubt in a century people will have forgotten cryptocurrencies or will see nothing special about having the original one.
"Halt all wire transfers of dollars in and out of cryptocurrency exchanges.
Halt foreign entities trading in dollar cash-equivalent crypto assets.
Add Chinese and other foreign cryptocurrency exchanges hiding in tax-havens to sanctioned entities lists.
Regulate the sale of any existing cryptocurrency assets to US persons by classifying them as securities investment contracts moving forward."
IMHO the problem is not cryptocoins themselves as is suggested here, but just proof of work.
A total ban would barely work anyway, as the system is completely decentralized, and to fully ban it we would need basically all countries to agree on the ban.
It’s quickly going to become impossible for governments to control cryptocurrency, unless they shut down the Internet. With ring signatures, stealth addresses, and shielded amounts, there’s no telling who has what cryptocurrency, who they paid, or how much was paid. Proof of stake and federated voting consensus are coming to privacy coins, so there’s no mining farms to shut down.
After this blanket ban, let's just move to a one-party democratic system too, like North Korea.
Unfortunately the price indicates a common belief that politicians’ ideas for the economy are worse.
So here we are...
That's wholly unacceptable.
True of: - Stocks - Housing - Commodities (precious or otherwise)
A few points: There are some interesting and somewhat out there justifications for the energy use, and there are a couple very simple ones: 1. Bitcoin emits less carbon than gold mining, and does the job of gold (as a store of value) to a much higher standard. 2. Proof of Stake could replace proof of work, eliminating any carbon emissions worth mentioning.
Bitcoin offers sound, secure, reliable money / store of value. The author elects not to even directly mention this because there is no good argument or replacement for this. If you say gold, read above.
The author believes he can just straw man serious bitcoiners (not the gamblers) into idealistic yet flawed cultists or something, when in reality the technology has no replacement, is greener than its competitor, and offers to the world, the service, and asset, of sound money.
The article appears in such bad faith (I’m willing to hear criticisms of crypto currencies, but only from those who demonstrate their ability to play with its basic mission statement and functionality; this article is pop-sci parroting) that I almost believe this is some kind of paid hit piece.
Should be:
>> no good argument against, or replacement for this
He's basically raising the "evil that is crypto" to levels that would make you believe that a large number people's lives are being actively ruined by Bitcoin.
I wonder how someone can get so angry with something that abstract ... I wouldn't be surprised if his agenda wasn't motivated by something less than noble.
>Halt foreign entities trading in dollar cash-equivalent crypto assets.
>Add Chinese and other foreign cryptocurrency exchanges hiding in tax-havens to sanctioned entities lists.
Lunacy! The author is effectively arguing for American global economic dominion! These are the exact steps you would want to take to ensure international isolation.
Isn’t the real aspirational promise of cryptocurrency really just a container that will retain the purchasing power of your savings with low friction?
The article supports that with a paywalled link to Financial Times. Here's the full-text archive: https://archive.is/yMsep
If you read it, you'll see that it says no such thing, and in fact mentions a number of major ICO projects that delivered. Their first example is Filecoin, whose purpose was to create an economy of peer-to-peer data storage. It's live now with over an exabyte of capacity.
Various smaller ICO projects not mentioned in the article have also delivered. Two I'm familiar with: Funfair, which does regulated gambling on Ethereum, and Monolith, which puts tokens on VISA cards for spending, without having to take custody of them.
When has the United States not been this way? The first explorers came over here hoping to find a trove of far East spices or gold, and make a killing. The Spanish did make a killing on gold for quite some years, even as they destroyed entire civilizations. Some American pioneers just wanted a piece of land on which to raise a family and support themselves away from tyranny. But many others were looking for gold or other quick riches. The history of our stock exchanges has been one pump-and-dump after another.
Diehl's other criticism, that crypto mining is environmentally destructive, has some merit, but is that a reason to ban an entire industry? What about people fortunate enough to be near hydroelectric plants, or people with solar electric or nuclear? Building extra coal-fired plants in China to power crypto operations does sound bad, but even China is moving away from polluting sources; they have a desperate need to clean up their environment and they are working hard on nuclear and solar alternatives, not to mention that they are developing cheap, affordable electric vehicles.
Every currency system is built on trust. The U.S. dollar, which is the world's reference currency, is increasingly shaky; last year the Treasury created more dollars in a single year than in all years previously. A lot of people are very worried that a currency collapse from excessive debt and a weak economy is coming in the not-too-distant future.
Crypto currency is an interesting and powerful new technology that may actually save us from monetary collapse; I wouldn't dismiss it as a dangerous boondoggle just yet.
At any rate, I don't see how Mr. Diehl's prescription for banning crypto could possibly be implemented; private companies have the right to create products for sale or trade as long as they are not dangerous. Even tobacco and guns, both known to potentially kill people, are still huge profitable industries albeit highly regulated.
Here's some use cases I've used in the last month:
I secured an instant loan based off collateral with faxing or calling my bank. Doing this at schwabb took weeks.
Another one, "thegraph" a distributed super computer to make public blockchain data indexed and queryable.
Another, Bitclout, a social network build on the blockchain.
Now the data of my social network is trustless distributed, verified and forkable.
I can build a business on top of it and I don't have to worry about getting the firehouse shut down like I did with Twitter.
Bitcoin was horse that drove the consensus making technical progress of distributed computing. The coins are less interesting than the distributed computing revolution.
IMO, currency is a belief system backed by Joules.
That is a very insightful definition ...
A blanket ban is a good idea. This cancer deserves no place in the economy.
As if that was different for the stock market or the rest of the economy... The entire economy is propped up by the money printers at this stage. Bitcoin and crypto are just better at getting hold of that freshly printed money for obvious reasons. If the government bans crypto, they will have to ban the stock market too.
The SEC can't regulate Bitcoin out of existence. A government can make using Bitcoin for payment purposes, even mining, to some extent, illegal. That wouldn't extinguish any cryptocurrency, but it could squeeze them to a fraction of their former value or relevance.
But the article only makes sweeping statements without much depth. .
"Cryptocurrencies disproportionately victimize vulnerable people and those in marginalized communities without access to traditional investments or financial advisory"
The same could be said about large segments of the traditional finance and banking industry. Yet nobody wants a blanket ban of this sector.
It is a very low effort article, that has a very clear bias.
An overview of counter-argumebtd to the main bitcoin criticisms: https://www.lynalden.com/misconceptions-about-bitcoin/
Regarding energy usage some arguments are: using stranded energy (exists very much), stabilizing energy nets (especially with renewables), incentivizing renewable research.
On the one hand, yes, I'm sad that I didn't buy $100 of bitcoin ten years ago and hold until now. Who wouldn't be? But on the other hand, how does this even bear resemblance to an argument?
> "The political case for a ban on fossil fuels"
So sad that you didn't buy some Exxon huh?
> "The political case for a ban on tobacco"
So sad that you didn't buy some Philip Morris huh?
> "The political case for a ban on energy trading"
So sad that you didn't buy some Enron huh?
"So sad that you didn't buy some bitcoin huh?" is like the opposite of the sour grapes fable: "I was able to reach the grapes so they must be sweet".
Or wait... actually I was told it's not too late! Bitcoin is only just getting started! If you don't buy now, you'll miss out on more future gains! Right!?
Well, it's becoming less of a compelling argument, when to even 2x your input, BTC would have to hit a mind boggling $118k USD per coin as of this very post. In essence, we are finding a diminishing point of returns already. You can do better than that much more easily and quicker on the stock market right now, by comparison.
It's like coiners want to play both sides of fence. They want to ridicule and taunt those that they say didn't see the light in 2009 or thereabouts, but at the same time, gain new recruits, so they can continue to fatten their holdings all the same.
Bitcoin is objective, hard, honest money. Many view that as a very good thing, myself included.
Governments steal inordinate amounts of energy from the populace with their money printing.
The Pharaohs built the pyramids using slave labor. This was a monstrous, immoral waste of human energy.
Modern governments accomplish the same thing with money printing.
That is the system Stephen Diehl supports.
Yes, definitely makes sense when the main usage of it is money laundering and mindless speculation
"We find that approximately one-quarter of bitcoin users are involved in illegal activity. We estimate that around $76 billion of illegal activity per year involve bitcoin (46% of bitcoin transactions), which is close to the scale of the U.S. and European markets for illegal drugs."
I would love if you could point me towards a current use of Bitcoin that isn't as a currency for illegal goods, or as an investment vehicle -- I'm genuinely curious why you think what I said isn't the case.
I don't think that is the same as "mindless speculation," which is what you said before.
Michael Saylor, who is the CEO of an S&P 600 company, makes a good case for bitcoin as a store of wealth. You can google him and see his arguments if you want.
Also, BTW, money laundering != illegal drug activity. Those are two different crimes.
> https://en.cryptonomist.ch/2021/01/20/chainalysis-crypto-ill...