I thought this was going to be another crypto slander piece, parroting incorrect propaganda about how it's only used for illicit activity. But what do you know, it's about bank activity! Funny how that all works....
Internalize the cost of carbon pollution and let the market price out wasteful usage. Demonizing specific energy usage is a waste of time and mindshare. It's little more than moral masturbation.
Obviously this is approximately the opposite of AML, but everybody keeps demonstrating that AML doesn't work. So we're better off to just give it up and take the advantage of a formal financial system with the properties that people will be able to get from cryptocurrency regardless, without the energy waste of Bitcoin et al.
Because then people will use the official financial system, cryptocurrency will be less valuable, and less energy will be wasted mining it. Which is more than we're getting from privacy-invasive and ineffective AML rules.
It's odd to make these claims simultaneously. That one, AML doesn't work. But that two, crypto's value statement is in circumventing AML. Which, per the first claim, doesn't work.
I get that the needle can be threaded by holding that an ineffective AML system can still be annoying. But if it's circumventable, that's just a cost. Which means we're comparing transaction costs versus fundamental aspects of differentiation.
At the end of the day, most people aren't money laundering. Having everyone who is money laundering self identify on a public ledger might be the solution the problem is looking for.
The trouble is that the baseline level of inconvenience doesn't phase a criminal enterprise, because to even exist it already has to incur the cost of operating unlawfully and risk being shut down and compensate employees for the risk of being charged with a crime, regardless of AML.
But the AML rules don't only inconvenience people who are really doing something wrong. There are obvious privacy problems with associating every purchase anyone makes with their name, and chilling effects for what people are willing to buy. It creates friction in things that aren't illegal. And since legal activity is so much more common than illegal activity, a little bit of inconvenience multiplied by the entire population is a lot, whereas a little bit of inconvenience multiplied by a couple of outliers is not. So the cost is more than the benefit.
Operating an illegal enterprise in such a manner that cash can make it past AML measures and eventually be spent by the enterprise's owners, and the concomitant problem of structuring the enterprise's bookkeeping and tax reporting so it has enough plausibility to avoid prosecution, is more than an inconvenience. It's the central business problem the owners of those enterprises face. Talking about their business costs and risks "regardless of AML" doesn't really make a lot of sense.
> But the AML rules don't only inconvenience people who are really doing something wrong. There are obvious privacy problems with associating every purchase anyone makes with their name, and chilling effects for what people are willing to buy. It creates friction in things that aren't illegal.
This problem, the effects of which you're wildly overstating, has little or nothing to do with AML measures. (You mentioned a chilling effect on things that aren't illegal - are we just talking about stuff that people don't want their spouses to see on the credit card bill?) It's true that every purchase you make without cash will have a lot of detail associated with it, stored electronically and held by the banks and credit cards processors. This all predates modern AML rules by decades.
You would have to do something very unusual for one of your transactions to "create friction" with your bank under the guise of AML rules. If it has ever happened to you, I'm super curious about the circumstances. Insofar as AML and other more modern, security-related rules might inconvenience ordinary people, they tend to affect people when opening an account, not when transacting.
Before 9/11 it was possible for a foreigner to open a bank account in the US. It's now been 20 years since it is required to physically travel to the us to open a bank account.
Do you think that increases crypto demand or decreases it?
One, why does a non-American non-resident need an American bank account? Foreign banks can hold dollars. And two, plenty of American banks open accounts for overseas non-Americans.
> Do you think that increases crypto demand or decreases it?
Why is this a bad thing? An edge case is being addressed through a novel product. Win win.
HackerNews "its just rsync" level comment
> And two, plenty of American banks open accounts for overseas non-Americans
Literally 0 without physical presence. But I'm very much welcome to be proven wrong here, can you give me a bank that opens accounts for non american non residents?
Youtube could be considered more wasteful than crypto (depending who you ask) and it is never mentioned when people talk about "wasteful electricity usage".
The conspiratorial part of me wonders why that would be? Is it because it is actually a threat to large payment processors that if crypto were to succeed would make them obsolete in the future?
I think that there is a lot of problems with the current crypto market, the electricity usage while concerning isn't the biggest issue with these electronic currencies.
I'm honestly surprised that literally every comment that is defending Bitcoin mining energy is always pulling out the same poorly though out argument as if knowing that electricity is being wasted is a recreational activity in its own right.
Please come up with better rebuttals. Here is a freebie:
The block reward goes down over time and thus the economic incentive to waste energy. The transaction fee goes up to compensate and the transaction fee is directly paid by users who derive value from the platform, otherwise they wouldn't pay the fee in the first place.
No. I never said that. When did I say that. I never said that? I get very bored by people that try to put words in my mouth. Hackernews (this isn't my first account here) is like this. It is horrifically boring.
> Please come up with better rebuttals. Here is a freebie:
It is a perfectly fine rebuttal. At the moment the only reason anyone is buying crypto is because they think it is going to be worth more in the future. Most aren't buying it for transactions at the moment. If you can somehow so that is false, please do so otherwise don't be an asshat.
God I hate this site. It is little better than reddit these days.
Going further, all data centres in the world use an estimated 200 TWh per year, and data transmission networks are estimated at 250 TWh per year [4], for a total of 3.2 times Bitcoin's energy use. Maybe it's just me, but the value provided by the internet is more than 3.2 times higher than that of Bitcoin.
[1] https://s22.q4cdn.com/959853165/files/doc_downloads/2021/03/...
[2] https://www.iea.org/commentaries/the-carbon-footprint-of-str...
[4] https://www.iea.org/reports/data-centres-and-data-transmissi...
Value is subjective. What you call actual value has zero value to others.
The energy consumed by Bitcoin is the entire value. Find a way to reduce the energy cost and everyone will mine more and consume more. If they don't the trust in the network decreases and the value of Bitcoin decreases. It is not possible to get a popular situation where bitcoin is valuable and does not consume a lot of energy. The valu of Bitcoin is strictly tied to the amount of electricity people are willing to waste for it.
Mining bitcoin is comparable to the US army? LOL.
How delusional are you, is that correlated with the amount of BTC you own?
Secondly, crypto is not wasteful. It is broadly breaking down the global walls put up by 1st world countries like the US and EU that have plagued every day people in 3rd world countries for decades.
It feels wasteful to us since most people near us have unrestricted access to banking and finance. Most of us are not journalists or activists who have to fear one phone call to Chase bank ending our entire operation. Despite recent events, the USG is not about to topple into a third world dictatorship that we would feel the need to flee from.
Crypto gives refugees a means of escaping with some of their family wealth. It allows journalists and activist insulation from governments and corporations trying to squeeze them out financially. And finally, it gives every day people across the globe the ability to start investing their money outside their own countries and begin accruing wealth.
Here is one example of the usefulness crypto can provide. https://www.reddit.com/r/MakerDAO/comments/de0sys/kyc_is_abs...
That electricity is being put to far better use than Youtube or Netflix.