Bitcoin Block 840000 | Hacker News Reader

Bitcoin Block 840000

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190 pointsgreyface-430 comments

Bitcoin's block reward halves every 210 000 blocks (210k * 10 minutes = 4 years), this block marks Bitcoin entering its 5th epoch with a block reward of 3.125 BTC down from its original of 50 BTC.

Interestingly there must have been a lot of people that wanted to get a transaction in the halving block, including fees and subsidy it resulted in a total reward of over 40 BTC for the pool that mined the block, ViaBTC.

Was the multiplier high enough for this block that it would have made sense to rent GPUs to mine it?

No, GPUs are literally millions of times less power performant than equivalent ASICs for sha256 mining. In the GPU days, mining was talked about in terms of megahashes per second, and ASIC miners these days are talked about in terms of terrahashes per second.

>In the GPU days...

Back in my earliest days, a CPU could mine bitcoin (it was just a check/enable box in the preferences).

HODL, erryday, frens.

I made my fortune by building a GPU miner in January 2011. Even by then, the best GPU for it was sold out so I bought 4 of the next best one.

I shut it down in July of that year because it was raising my electric bill by like $100/month. Possibly the biggest financial mistake of my life.

I remember when the first GPU kernels came out... exciting times!

Unrealized gains are unrealized.

I don't think so, partly because the total reward + fees was only 5-6x that of a typical block and partly because almost all blocks are now mined by pools that share block rewards among their members usually based on hash rate, so one would have to be in the pool that mined the block as well. Also the fact that GPUs are less efficient than using specific mining hardware/ASICs for most Proof of Work cryptocurrencies.

if it made sense to rent them on the chance of getting the reward, who who had them would rent them to you rather than pursuing the reward themselves?

Even if it did make more sense in straight EV terms no one is running that calculation of you're in three business of renting GPUs you'd rent them out either way unless it was a really high probability of success.

and the high probability of success is exactly the case we are talking about.

Any interest I might have in this is tempered by the fact that Bitcoin mining accounts for about 0.2% of global carbon emissions - roughly the same as the country of Greece. As long as Bitcoin is based on a proof-of-work process, I think the world would be better off without it.

https://en.wikipedia.org/wiki/Environmental_effects_of_bitco...

I do believe there are many better proof systems available at the moment, and I thought its emissions would be higher than 0.2%. Though if fossil fuels account for the majority of global carbon emissions, and banks providing the majority of fossil fuel investments, banks should surely account for a much larger portion of global emissions.

There is an argument to be made that Bitcoin could end up producing more carbon emissions if it already produces this much with a much lower transaction capacity than most banking systems. However, systems like the Lightning Network <https://wiki2.org/en/Lightning_Network> build on top of Bitcoin by settling transactions before they ever reach the blockchain, slashing fees and bundling possibly hundreds or thousands of transactions into one, so the number of payments that actually occur could be much greater than it seems.

You are wrong!

Okay, the banks might cause more carbon emission than blockchains. But, the banking system serves the whole world, providing services for 8 billion people. But Blockchain is still a niche thing.

You might say, no, Bitcoin is not niche, Blockchain is used by a lot of people! Then, you are wrong again. The media is talking about Blockchain all the time, but it is indeed a niche thing. No one is using, say Bitcoin, to buy real physical stuff, cryptocurrency is not taking part in the people's real life.

So, my point is, if Blockchain is adopted by the world and replace the banking systems, it will definitely emit much much much more carbon, I am saying orders of magnitudes more.

Ignoring banks for a moment, consider the US military which some claim protects the value of the dollar.

According to The Atlantic, the US military alone counts for 5.5% of global carbon emissions.

https://archive.is/DVWZs

Whats the total market cap of the economic value protected by the US military?

Lightning Network design is horrible, and it's literally impossible to onboard millions of users without increasing the L1 blocksize to an absurd amount.

The world will likely move onto using rollups on other chains like Ethereum instead, which scale better, and pays gas to validators to get included into the blocks.

Seems like the Bitcoin community is looking into rollups on Bitcoin, but it'll be impossible to get trustless Bitcoin on them, even with BitVM, without a hardfork.

I think you would be shocked to know how that compares to the emissions of the US military which some argue forms the security backing the US dollar. [1]

“There are no solutions, only trade offs - Thomas Sowell”

[1] https://archive.is/DVWZs

Sure, the US$ is backed by a large military-industrial complex (as well as the power to tax and the productivity of the people and companies of the US), but if we switched from the US$ to BTC as the national currency we'd still need a US military - it's not like the only utility a military has is to keep the currency afloat.

Can’t imagine we would still need 1000 bases in 80 countries around the world if we didn’t have to protect the petrodollar and reserve status.

The same goes for gold. If only used for jewelry and industrial applications we wouldn’t need to strip mine so much of it.

Could it be that they protect more than just the value of the US dollar?

Always strikes me as a weird take.

There’s nothing anyone can do about it. As long as someone somewhere in the world keeps mining it will continue to exist.

It would take the equivalent of a world war effort to, maybe, get enough people to stop mining, that a 51% attack could be successfully carried out. At which point the community would just fork and continue on.

The only realistic option is to outcompete it. Build something better, where even the most greedy bad actors want in on the new thing, not because it’s better for the environment, but because it’s better for them (and happens to also be better for the environment).

What people can do though, is try to get gas-powered leaf blowers banned in your neighborhood, and expand from there.

The problem is how energy is produced. You're offering solutions at what I think is the wrong end. Pigouvian tax things causing the problems at the point of extraction and let the free market respond to that. The negative externalities have to be realized by the market.

You’re right. But I think we’d need a world where we don’t have people who would pollute a lake to pocket a million dollars.

At some point you’re fighting human nature.

Would you be surprised to learn that a lot of people live in a neighborhood where there is not a central broker with a power to ban anything?

Yes. And I think anywhere that leaf blowers are noticeable is almost certain to have a central authority with that power.

Ugh this guy was trying to argue that only HOAs can control leaf blowers. Only an American would forget the existence of actual government when talking about central authorities who can enforce rules.

I was with you up until the last paragraph. Thinking small isn't going to help much imo.

Unless you are a person capable of bringing about systemic change, thinking small is the limit of what most individuals can contribute.

Instead, people typically dismiss the small change they could bring into reality, and take the easier route, like talking about how big change is needed, and change nothing.

And what percentages do videogames or movies add?

Or gold mining?

I suppose one could say video games are a net positive as they entertain humans.

Gold mining provides a resource that is used to build other products.

Bitcoin itself is not required for a transaction, any other form of currency could replace it. The mining provides no value, it is not a good usage of the compute power. Evening finding ET would be better than what it’s currently doing. That power could be used for all kinds of things, versus solving a block of data with trial and error.

Gold mining, which is primarily open pit strip mining, is massively more polluting than just measuring its carbon footprint.

Gold mining completely destroys large tracts of land, poisons enormous water supplies and leaves huge areas completely uninhabitable for basically ever.

Gold mining has polluted 40% of US rivers and 50% of lakes.

If Bitcoin could replace gold’s store of value use case and environmental footprint, it would be a massive win for the environment.

https://www.gao.gov/blog/gold-rush-rot-lasting-environmental...

> Gold mining provides a resource that is used to build other products.

Most use of gold is speculative as a store of value, some is decorative, and a little bit is actually used to build products.

> Bitcoin itself is not required for a transaction, any other form of currency could replace it.

Of course, for transactions. But people don't want to use national currencies as a store of value. For good reasons.

If we could replace gold with bitcoin as the store of value, it'd be a net positive.

Any energy usage seems like a waste if you don't understand the benefits.

Bitcoins energy input is used to protect the monetary energy it contains from being stolen, by anyone. The value in the monetary units of fiat currencies is continuously being stolen through supply inflation which dilutes the same value across more units, halving the value every decade. This is what always happens when money is proof-of-work for most, but not for a select few who can create it effortlessly (the banking system).

https://fred.stlouisfed.org/series/M2SL

What is money if it's not proof of work?

> Abraham broadly estimates the gaming industry produced between 3 million and 15 million tons of carbon dioxide in 2020 to create video games. That includes energy bought from local grids and used to keep the lights on and computers powered as developers make games.

https://www.cnet.com/tech/gaming/features/video-games-are-fi...

Compare this to the linked wiki article:

> A 2022 non-peer-reviewed commentary published in Joule estimated that bitcoin mining resulted in annual carbon emission of 65 Mt CO2, representing 0.2% of global emissions, which is comparable to the level of emissions of Greece.

So, bitcoin mining results in CO2 emissions comparable to twice that of the entire video game and movie industries combined.

That's just the energy that goes into making them, what about the energy that goes into playing them? Has to be at least an order of magnitude greater

That's a good point, but I'm not sure it's quite as drastic as you think.

There are about 400 million current and last-gen consoles that have been sold, all-time. I'd wager most of them spend 95% or more of their time unused.

Steam shows about 20-30 million players online at any given point. Let's pretend this represents 50% of the PC gaming population (a vast underestimate of Steam's market share in the US and EU, not sure about other markets like China). What fraction of those are gaming PCs? Gaming laptops? Laptops with integrated graphics that really aren't meant for gaming?

Let's say that your typical PC gamer uses 300W when playing video games. That's probably on the low end for a gaming PC, but an overestimate for any laptop. 300W * 24 * 365 * 60 million is about 160 billion kWh. That translates to, um, 33000 tons of CO2? So like 3 orders of magnitude smaller?

I'm not even going to bother with the mobile game population because the power draw on those is like single-digit watts so even if there are 100x more players, the numbers are around the same order of magnitude.

Even if my estimates of number of PC gamers at any moment and the wattage of the typical device are both off by 10x, that's still way smaller than the estimate of how carbon-intensive it is to make games.

Maybe we can just get rid of Greece and keep bitcoin?

Computer chips do not need to use energy useful to humans, BTC and also deep learning algos just to name a few.

Sam Altman should go to Saudis and plug GPUs directly as petroleum gets out of the ground, and then transfer the trained bits to any country he likes. Blockchain mining was a favorite for Icelanders who have in excess geothermal energy.

Energy is expensive or not cheap, only on places in the world in which it is not abundant. Factories of robots (see Jeff Bezos), or computers mining numbers, or computers training statistics can be located anywhere we like.

Also BTC is a blockchain, which support less than 1.000.000 tps, so not very useful.

As soon as we want to put identities on a blockchain, thousands of identities per person or even millions, legal agreements hundreds and thousands per person every day, property transactions in the magnitude of a grain of sand, millions of property transactions per person every day, then 2 transactions per second on the whole blockchain does not cut it.

>Blockchain mining was a favorite for Icelanders who have in excess geothermal energy.

Icelander here, our main power generation is from hydroelectric not geothermal, it's a common misconception.

Also most of the mining here has moved on to easier places like Sweden and Norway. And for cooling / humidity reasons not solely electrical prices.

It was also just foreign owned companies most Icelandic folk don't like it here (I think it makes good use of our remoteness and shit latency however)

Interesting, one question i had, was hydroelectric due to mountains/hills glaciation or in the sea like the UK. I googled it, it seems like the former.

Geothermal always seemed to me, it's a pretty difficult source of energy to extract for factories n stuff. Like, a factory can melt steel, but no one wants the ground he stands on to melt as well.

Hydroelectric is a much easier source to work with. Humans have used rivers as a source of energy for thousands of years.

>Computer chips do not need to use energy useful to humans, BTC and also deep learning algos just to name a few. >Sam Altman should go to Saudis and plug GPUs directly as petroleum gets out of the ground

Hows that help carbon emissions?

It reduces it. Instead of taking a barrel of oil, moving it to a different place and burning 10% of it in the process, or even 20%, it can be easily be used right there use 20% less, and cheaper as well. No need for ships to be built, sailors to sail and so on. Less emissions, not zero but a reduction, and cheaper.

Just moving bits around seems like a lot easier, efficient and cheaper than moving physical stuff around.

Edit: bad calculation fix

but but but layer 2s!

This event does reduce the incentive to expend that compute power, which is generally good thing.

Isn't it how electricity is produced that's causing the problem you describe?

0.2% is one in five hundred. That's just not a lot.

Yes, better off without it, but it really makes no difference whatsoever...

What is money if it's not proof of work?

Could we get a title change that adds a bit more context? Something like:

Bitcoin passes reward "halvening" milestone at block 840000

You could sort of argue that the halvening concept is common-ish knowledge for tech people with passing familiarity, but hardly anyone outside the crypto space knows the significance of the number 840000.

I intentionally chose not to editorialize the title, as doing so is against HN guidelines. If a moderator wants to change it, though, I'll abide!

I think it's fine as is, comments are already in place providing the context.

adding basic context is not editorializing and nothing should be considered "common knowledge" considering how vast and complex the whole domain of technology etc

I disagree: I'd rather see people use the original title (when it's not clickbait) and leave a comment with the context that they feel is important. That places your sense of what context is important on the same footing as everyone else's and doesn't allow the submitter to shape the discussion more than is warranted.

But most people don't even get to that point because the vague title obscures anything of significance.

I always get compliments on how I can make sense of technical topics.

It's not a superpower. It's just awareness of the need to provide context like you've described.

I still don't get why I would want to hold a bitcoin for anything other than speculation. If I want some form of currency to actually use there are plenty of less volatile options.

One situation is if you live in a country with highly inflationary currency, it's a hedge against loss of value even in the short term. This argument goes for any inflationary currency, including USD, in the long term. This stems from Bitcoin's inherent design of provably predictable scarcity.

If it's possible to buy Bitcoin in such a country, I would assume it would be possible to buy dollars, bonds or stocks. But maybe not.

My guess is that inflation-protection in a 3rd world country is only a very minor reason for Bitcoin ownership, i.e. the vast majority of Bitcoins are owned for different reasons. Which has implications for its future price.

Relatives can buy btc stateside and relay it to you with pretty much no interference from local tax authorities or sanctions regimes.

There's value in this, Americans who are long America just hate admitting it.

The point isn’t whether bitcoin is legal within the country. The point is whether it is better than the official currency.

Great article on Argentina: https://www.freethink.com/hard-tech/crypto-argentina-black-m...

Lots of derivatives, particularly tether and dai and usdc, are held significantly due to 3rd world countries with capital controls.

It is much safer and easier to hold than a sack of dollars. Also very easy for remittances.

> it's a hedge against loss of value even in the short term

If BTC with such a volatility can be considered an inflation hedge, then anything else can be as well. There's no intrinsic guarantee that BTC will keep going up, its protocol only defines the supply and not the demand, hence not its price either.

Actually I'm not convinced that BTC is favored as an inflation hedge instead of even USD-based stablecoins for people with currencies devaluating faster than USD.

Yeah it is fair to say it depends on the choices someone has. If I can stick USD into a high interest savings account though it seems like a much safer way to keep value.

Can't be taken away from you / frozen. Which isn't a problem for most if they have multiple bank accounts, but for some controversial figures it can be essential.

> Can't be taken away from you / frozen.

Then explain why the US government has confiscated so much of it.

Because they gained physical access to the machines holding the coins? Surely you understand the difference there right?

If all of your money is being held by random companies, it's not really your money is it? Cryptocurrencies give you all the autonomy of cash, while still allowing you to send it to anyone over the internet.

> Because they gained physical access

That’s the very definition of “taken” isn’t it?

People either left the keys sitting around where the US government picked them up, or they handed it over willingly. If your key is secret, your coins cannot be taken away from you.

> If your key is secret, your coins cannot be taken away from you.

Governments have a legal monopoly on the use of force, and they have the means to employ it. If you can access your bitcoin, and a government can access you, that government can access your bitcoin.

https://xkcd.com/538/

My view is that it can never be used as a currency because it is inherently deflationary.

Gold was used as a currency for ages, and it's similar to bitcoin (limited amount with a bit of gold being mined every year)

When currency was made using gold/silver it was also deflationary, which was a fucking nightmare for everyone except the very rich.

Genuine question: why is that? Is inflation required?

If you were to choose between a little bit of inflation and a little bit of deflation, you should choose a little bit of inflation. Deflation means people have a greater incentive not to spend, so dissuades investment and thus innovation and progress. It leads to wealth hoarding and feudalism.

Not at all, but it's a dominant view for a variety of reasons. A base concept is to keep money moving into other investments and discourage saving. I suspect the ongoing inflation rates will make this view less attractive in the future.

Not required, but a deflationary asset used as currency discourages borrowing, and companies and governments love borrowing.

If you knew that inflation was going to rapidly increase, the smartest thing you could do would be to take out as many loans as you can and buy usable assets, like a car and a warehouse full of canned beans.

Imagine you take out a loan to buy a car. Tomorrow, hyperinflation happens and the currency has lost 99% of its value. You can now pay off your car with a can of beans.

Inflation is also an avenue for a government to steal the excess value produced by an economy over time. Probably just a coincidence though.

It is not deflationary, where are you even getting this from?

This post.

There's I think supposed to only ever be 21 million bitcoin. Bitcoin rewards for mining halve every ~4 years. Eventually they will stop; there will be no new bitcoin.

People will also lose bitcoin; this already happens. Famously, no one knows where ~1m bitcoin supposedly mined by Satoshi are, they are assumed to be permanently out of circulation. So not only is there a cap on maximum bitcoin, and over time less new bitcoin will be injected into circulation, existing bitcoin will also be removed from circulation over time.

This presents a strong incentive to hold bitcoin instead of spending it, since scarce assets become more valuable with increased scarcity. If a bitcoin is likely to be worth more tomorrow than it is today, you're less likely to spend it. Which has the compound effect of reducing bitcoin in circulation further.

This is why people say it's deflationary.

Hard to say why you would hold bitcoin. If I were to guess, it sounds like you live in an area that has had a safe currency for a long time and the prospects for your currency look good in the future. Otherwise, you would have a different view or at least understand why.

Yeah that is fair, it depends on the options available to someone.

This answer might not be applicable to you, but it is one of my favorites:

https://news.ycombinator.com/item?id=26238410

Spending tiny amounts using Bitcoin's Lightning Network for digital (SaaS) services is something I'm exploring. It's an interesting application when you need an international payment system for settling cross-border payments. (I'm not a fintech expert, but like I said, I'm exploring the possibilities...) When something costs only a few cents (sats in Bitcoin-speak), the variability of the full price of one Bitcoin is minimal. And when something is a few cents, the transaction fees using any other method makes the whole idea hard to imagine.

tl;dr: international payments for digital goods using the Lightning Network is (arguably) a valid use for Bitcoin that is not speculation.

For accepting crypto payments wouldn't I be better off accepting a stable coin? Most companies I saw in the past were nominally accepting crypto but going through a service that would just pay out the USD equivalent.

I guess with software margins there is a bit more room to move with price fluctuations. For ecommerce though accepting and holding a currency that moves this much could quickly erode the smaller margins.

The idea I'm looking into is for a high margin thing that can absorb price fluctuations. Re: stablecoins, I did notice that one of the YC Request for Startups was for stablecoin-focused startups, but I don't have a strong opinion about stablecoins, yet. https://www.ycombinator.com/rfs#stablecoin-finance

It's not holding but using, but remittances (or in general, money transfers between places where at least one end isn't well connected to the international banking system) are one use case.

Instead of finding a company active on both ends (which will have to be a major company like Western Union, with major fees), you can find two separate (potentially local and small, think "coner store money exchanger") entities to get fiat (regular) currency into Bitcoin on one end and out of Bitcoin on the other end. If there is no single company that does business at both your source and destination location/community, there's a good chance you're out of luck.

You have to trust those two exchangers to not defraud you, but these two don't need to trust, or even know, each other.

Of course, other cryptocurrencies, stablecoins etc. would also work for this, but network effect means Bitcoin is the coin where you're most likely to find participants on both ends.

People have always loved gambling. Crypto is nothing but a game of musical chairs. Also, smart people fall into cults like everyone else but they tell themselves they are into it for rational reasons (techology).

Do you have any criticism to offer as to why BTC isn’t viable?

I’d love to be convinced. If I hear a single convincing argument I’ll beat that drum all day alongside you.

But all you’ve given is:

- gambling exists

- “musical chairs”

- cults exist

So, hand-waving. Help me out here.

It has no underlying fundamentals. Its value is 100% speculative. Gold is somewhat similar, in that it's value is mostly speculative, but it does have some inherent utility/value.

Bitcoin has value for the same reason that vintage sneakers or Pokemon cards have value; that is there is a fetish for them and thus some belief that at some later time, someone will want to buy it for personal reasons (either due to their own beliefs or sentimentality).

Actual currency, on the other hand, derives its value from the willingness of the issuing sovereign to accept it back in payment of taxes.

Fiat doesn’t hold value because it has fundamentals or inherent utility either.

Fiat currency holds value because it is backed by a sufficiently large group with guns.

Crypto currency holds value because it is backed by a sufficiently large group with encryption.

“Actual currency, on the other hand, derives its value from the willingness of the issuing sovereign to accept it back in payment of taxes.”

And yet the purchasing power of the dollar has fallen by 99.5% since moving off the gold standard. Bitcoin claims to hedge against this steady decline in value which is caused by money printing.

If you believe they will stop printing money and diluting the value of the dollar, the argument for Bitcoin fails. If not, Bitcoin’s hard supply cap and perfectly inelastic supply when faced with changes in demand make it a compelling hedge.

Speculation of what?

That it'll become the main world reserve asset and suck in all the stored value in the world like a black hole? Then, you're bang on - that's the only reason I hold it.

The primary argument for holding bitcoin is as a store of purchasing power to counter every government and central banks addiction to printing money.

The economic theory is that money printing is the primary cause of inflation and bitcoin, as the first purely fungible commodity with a fixed total supply that is perfectly inelastic to demand, is an ideal hedge against inflation.

Imagine if gold went up 100x in price. New gold mines would be opened. People would come forward with their gold jewelry, etc which would increase the supply of gold.

If bitcoin goes up 100x, it’s supply cap and inflation rate would remain unchanged.

If you believe the government or central banks will stop printing money, then the argument for bitcoin collapses.

There is no other use. Bitcoin is only for gamblers and criminals.

So, Blackrock and Fidelity?

Yes. They are in essence gamblers. Or at least in business of extracting money from gamblers.

Given some weak assumptions, it can be proven that Bitcoin can't beat the performance of S&P 500 in a long enough time horizon.

The gist of it is this: Bitcoin can't perpetually grow faster than world wealth. If we assume, say, 3% inflation-adjusted growth in world wealth, it means that Bitcoin cannot perpetually make more than 3% annually. Stocks, bonds, real-estate don't have this constraint because they pay cash to investors.

At some point in the future, Bitcoin will be down over the last decade while S&P 500 will be up significantly. Bitcoin holders will start to think - wait, why am I holding Bitcoin instead of S&P 500?

Edit: Hacker News says I'm posting too fast so I can't reply to comments below.

Even if your argument were logical, “at some undetermined point in the future, this investment will underperform a different potential investment” is all you’d be proving.

I'm not sure that argument is rigorous enough to be called a proof. We have no guarantee that the S&P 500 will grow faster than world wealth. It's plausible it will, but one could reasonably purchase something like gold or BTC to hedge against scenarios where it doesn't.

Perhaps you should give an estimate of bitcoin's worth compared to world wealth. Because my guess is bitcoin is worth a lot less then world wealth, meaning btc growth could outpace average world wealth growth for some time.

Bitcoin is about 0.3% of world wealth, gold 3%. My estimate is that peak Bitcoin is anywhere between the current 0.3% and 1.5% (implied price $325k). After this peak is reached, and there's a chance it has already been reached, it won't recover for decades or forever. And my guess is that this peak Bitcoin will happen within a decade.

Is there any particular reason we should assign any weight to this guess of yours? People have been calling “peak bitcoin from which it won’t recover” for at least 5 cycles now.

You should make your own mind.

My belief is that it would be shocking if Bitcoin's market cap got close to gold, because gold has substantial fundamental value (which prevents the price fron collapsing) and a long tradition.

Another reason is that the narrative that Bitcoin's price will at least double or triple won't be believable if Bitcoin gets to 1.5% of world wealth. When hodlers realize that they will not double their money, the rationale for hodling disappears.

Given false assumptions, anything can be proven.

This doesn't really make sense. Bitcoin is deflationary but the market cap has no ceiling, it's just based on what people are currently willing to pay for a coin.

Bitcoin's market cap can't grow faster than world wealth perpetually. S&P 500 can and has consistently done so. Does it make sense now?

> perpetually

Is this a fun thought experiment, or are you immortal?

You may be shocked to learn that GDP growth can't continue perpetually either, under reasonable assumptions:

https://arxiv.org/ftp/arxiv/papers/2005/2005.05244.pdf

The market cap is just the last price multiplied by the number of the asset in existence. There is no restriction on last price for either SP500 or bitcoin.

You might want to think outside the box a little more.

Bitcoin can consume the entire value that's stored in the dollar.

Does your model hold if it does 80% of that over the next, say 50 years? The S&P will be priced in bitcoin for a start.

Isn't S&P 500 basically inflation + GDP growth at this point? I think BTC will follow similar pattern given enough adoption.

what's notable about this? has 11 upvotes at time of this comment but zero explanation for those of us who do not follow bitcoin in detail

https://www.cbsnews.com/amp/news/bitcoin-halving-cbs-news-ex...

> Bitcoin is expected to go through a "halving" within the next day or two, a preprogrammed event that could impact production of the world's largest cryptocurrency.

> A halving, which occurs about every four years, was designed by bitcoin's creator, Satoshi Nakamoto, to effectively reduce by half the reward that miners of the digital token receive. The idea is that by cutting in half the amount bitcoin miners currently make for their efforts, fewer bitcoins will enter the market, creating more scarcity of the cryptocurrency.

Does that mean Bitcoin has just doubled its energy waste?

Energy requirement is constant, reward is halved. So smaller players get out and bigger players benefiting from ASICs and economy of scale will stay.

Usually after these events the energy usage of the network decreases temporarily for ~60 days and then settles to what it was before. [0]

[0] https://www.cnbc.com/2024/04/19/bitcoin-just-completed-its-f...

How is it going to keep itself decentralized if the smaller players get out every time there's a halvening?

Assuming that miners are rational actors, the hash rate should settle at a point where the expenses to mine a block (energy, hardware depreciation, etc) equal the rewards (block reward and fees), so, if the price of BTC and the fees stay constant, halving the block reward should reduce energy waste.

Conversely, energy waste is proportional to, the BTC price.

Energy waste could also be reduced by instituting a global tax on Bitcoin mining. The cost to miners would remain the same (because it's still equal to the rewards), but a part of what would be spent on wasted energy is now spent on taxes instead. Unfortunately this is highly dependent on avoiding tax cheating.

Just BTC mining? Not all uses of energy? It makes more sense to do a fossil fuel tax, which penalizes all activity that doesn't justify its environmental cost, as opposed to playing whack-a-mole with whatever uses are least popular right now.

The energy use didn't significantly change, and the value it creates for humanity didn't significantly change, so probably not?

No, the energy expended and the value it provides to the Bitcoin network is unaffected. The only change is that the inflation of the token decreased.

Not really, it just means what it means: a block rewards 2 times less than before. What happens regarding the number of miners growing or shrinking depends on a lot of factors. If you're so sure it's gonna increase the mining power, then I suggest you invest in it right now.

Hopefully it means waste goes down as more miners become unprofitable and shutdown.

Waste is constant in this context.

Yes.

Hacker News has a fetish for these kinds of posts.

ah it's orange site, you're supposed to be aware of everything and context is frowned upon

edit: this is sarcasm if not clear but it reflects how often stuff gets posted here without an indication what is interesting about the topic (and it's poor form!)

The only way I can foresee a cryptocoin actually holding value is if spending the coin meant spending processing cycles and RAM doing things like this:

https://en.wikipedia.org/wiki/List_of_volunteer_computing_pr...

But in more general sense, less like https://boinc.berkeley.edu/ and more like AWS...

It's the only way to have value, actually holding computing power in a distributed network.

You're not the first person to think of that idea. The problem is how you can assign and reward workloads in a trustless way. Proof of work is easy to verify and you don't need to trust anyone. How would you do it for Folding@home or whatever?

You'd need multiple verifications with the same (or similar) result ... but that isn't trustless since Sybil attacks would still be possible. ... and proof of work tends to be the solution to Sybil attacks.

And you'd need to be sure that the work being done wasn't some real-world scam... I see the point of how difficult it would be - I'm just saying that's tremendous value.

There have been very recent developments in homomorphic encryption - essentially doing addition and multiplication on encrypted data without revealing the inputs or outputs, and zero-knowledge proofs, thus enabling general trust-less computing.

You're talking about Gridcoin. It didn't do too great economically, for reasons that become obvious when you think about it for a while. It was a great way to fund research, but you can't actually build a global economy on BOINC tasks.

I'm talking general computing here, but also see my other reply about scams running on instances.

AKASH is doing pretty well, have you looked into them at all? https://akash.network/gpus/

More of a decentralized compute marketplace rather than a PoW/emission mechanism, but if general compute is what you're looking for, then there it is.

PoW requires that the "work" have a few special properties, which makes it really difficult for it to be something useful. I feel like we're kind of past the whole "looking for a better PoW" phase though now that most consensus runs off really mature PoS mechanics.

Try thinking of a useful problem that allows everyone in the world to endlessly generate puzzles worth solving, whose difficulty can also be ratcheted up and down to regulate block timing.

AKASH seems pretty interesting, thanks for the link!

What is the value of a non-interdictable, non-seizable without physical compromise value store?

It's value easily eroded by High-altitude Electromagnetic Pulse (HEMP) so none on times of war, whereas the Internet was created to be resilient even in war, and I see value in the "cloud" running on diffuse infrastructure instead of corporate infrastructure.

EDIT: The global Internet I mean. Assuming HEMP doesn't hit everywhere at once, just the USA, for (unfortunate) example.

You are forgetting space satellites running Bitcoin nodes and nodes running behind EMP-Shielded building.

Right, I do concede the point. I still see no value in artificial scarcity however!

What, you don't have backup nodes in a rad-hardened cabinet under your house?

Thank you @gruez, @shagie and @px43 for your invaluable insight.

Value does not work like that

Intrinsic value does

Markets measure exchange value, not intrinsic value.

While that's a fair point, I can't update the original comment anymore to make clear that I was discussing intrinsic value. I'm always on a haste to be honest.

what intrinsic value does the dollar have?

Anyone have a sense on when realistically mining becomes totally impractical for the reward? I seem to recall reading somewhere that with the current technology it would take till around 2100 to mine them all, but surely somewhere between 2030 and 2040 the reward to power consumption will get out of whack such that nobody will do it?

It will always make economical sense to mine, because difficulty automatically adjusts. The issue is when it becomes cheap enough to do a 51% attack.

It will never become cheap enough to do a 51% attack because there are multiple parties that all would be interested in doing a 51% attack competing against each other.

Furthermore, Bitcoin is "self-healing" in the sense that an attacker does not gain persistent control; they lose control if they lose 51% compute vs the rest of the planet (unlike, say, Ethereum with proof of stake).

It will never be cheap enough to 51% attack either and even if it was attacked, it wouldn't matter.

https://www.youtube.com/watch?v=ncPyMUfNyVM

https://www.crypto51.app/

Miners make money from the transaction fees as well as the block reward. If fewer people mine, then the difficulty level drops and allows people with lower computer power to get the rewards.

As the popularity of bitcoin and it's stored value increases, so will the demand for transactions against its fixed transaction rate, driving up fees.

Mining never becomes uneconomic because the difficulty adjustment makes mining easier and easier as miners drop out.

That depends on the valuation of BTC, no?

Several major variables:

  - Valuation of BTC
  - Size of block reward
  - Cost of hardware GPUs or ASICs
  - Cost of power

Well I sure feel stupid now, heh. Good point.

2140 but network fees then take over as incentives.

$2M award for the miners. Wonder how much energy that took

Presumably somewhere in the ballpark of $2M worth.

If that was correct, every miner would have to win every block to stay in business. That's clearly not the case.

> every miner would have to win every block to stay in business

To my understanding that'd be true if the energy cost was $2M per miner, but I think jpcfl was suggesting $2M total. i.e. that an individual miner would spend $100 on energy for a $100 expected return, which may be a 10% chance at $1000 or a 100% chance at $100.

Could adjust $2M up slightly for whatever portion was done by crypto-mining malware or dabblers with higher expected energy costs than return, and down for the portion done by professional miners who will be expecting a slightly positive return even after factoring in other costs.

If I spend $2M to mine $2M of gold, and the value of that gold increases by 2x over the next 10 years, then I think I could stay in business. That would actually be a pretty solid business.

The value of BTC has increased nearly ~200x in the last 10 years. I don't anticipate it will do this again, but I'm sure some of these miners think it will continue to grow at some rate (plus, they have already capitalized on the last 10yrs of growth).

That doesn't make sense. If miners are break-even only after pricing in future valuation movement, then they would just buy BTC at SPOT.

No need for all the capex, opex, uncertainty of hashing success, and time-limited acquisition of doing the work of mining.

Sorry, that isn't how proof of work mining works. The key point to understand is the effect of difficulty on mining.

Well, 2M of energy + opex at least

wrong

The average electricity used per block mined is around 3 Gwh which costs in the $200-400k ballpark collectively (I know they seek cheaper electricity, but I'm unsure how cheap or what discounts they get.)

(Approximated by Bitcoin's reported .5% share of global electricity consumption, which is around 25k Twh. A block is mined every ten minutes. Hopefully I didn't make any order-of-magnitude errors!)

ViaBTC, the winning pool, has about 13% of the global hashing power so perhaps spent $40k plus their other expenses.

Am I reading these transactions right? It can cost over $5000 to transfer less than a single dollar?

https://mempool.space/tx/2fc565c457bf3202704f3b2e61c50312c07...

That transaction appears to have an image attached: https://www.blockchain.com/explorer/transactions/btc/2fc565c... (see Ordinals Inscription)

Wow they spent $5k to put some incredibly ugly AI generated art on the blockchain. Money well spent.

But it's on a halving block, so whoever did it has bragging rights in a way. In twenty years they can point to it and say "I did that." I fear that ordinal inscriptions will start making the blockchain unwieldy, but I'm not educated enough to know if the mining cost of adding them is a good enough defense against such spam on the bitcoin chain.

Bargain compared to some stuff: https://blockgeeks.com/5-most-expensive-bored-ape-yacht-club...

Some people pay a lot of money for paper bills with interesting serial numbers, far above the bill's denomination. This is no different.

The amount of the fee is kind of up to the sender. If the fee is not high enough, miners will not include the transaction in the blocks. But there's no upper limit on how high the sender can set the fee.

Edit: Since a block has a limited amount of space for transactions, transactions with more bytes have to pay a larger fee to get picked up by miners. This one looks really large.

40btc or $2.5mm looks like 5x - 10x "current normal". 2800 txn/block and $10-$20 average fee over the last week.

https://ycharts.com/indicators/bitcoin_average_transaction_f...

Bitcoin Average Transaction Fee is at a current level of 16.50, down from 19.38 yesterday and up from 2.046 one year ago. This is a change of -14.88% from yesterday and 706.6% from one year ago.

Oh you meant for the whole block?

40? I'm seeing 0.08.

It was a dummy transaction to begin with, they just wanted into this specific block.

When you make a transaction on the Bitcoin network (and really every other cryptocurrency), you tack on a fee to the amount of coin you want to send. Miners prioritize higher fee transactions when deciding which transactions to include in the next block. Therefore, to guarantee your inclusion in the next block, you would choose to increase the fee you pay.

So, for this transaction, they chose to pay a $5000 fee to guarantee their placement in this block.

This was a historic event people paid to be a part of.

Only 4MB of data can fit in a block. To get priority for your transaction you pay more.

New protocol launch coincided with this block - in chasing becoming the first use of the protocol, users spent thousands to use it or create an asset via the protocol.

hooray bitcoin, bitcoin is dead, long live bitcoin!

Truth is Bitcoin has mostly failed as a currency, and that’s ok.

The only thing Bitcoin really buys is freedom.

Strange a decentralised money supply can be coordinated so easily for changes. Is the miners already so concentrated they can do whatever they want.

The supply halving schedule was coded into Bitcoin from day one so there's no coordination needed.

context? is there anything inherently notable about this?

once every 4 years "bitcoin mining block reward halving"

Context: Bitcoin miners have just adopted a 50% pay cut for themselves. This pay cut was baked into Bitcoin protocol at the launch of the network (mostly, see "BIP 42" [1]). The OP link gives information about the block in which this pay cut was made.

I get that HN comments tend to dismiss Bitcoin. But the fact that for the fourth time this pay cut has happened without a hitch speaks volumes to what makes Bitcoin interesting: It's a rare combination of economic incentives and technology that keeps chugging. Nobody can stop it. And it's extremely resistant to change. It requires no governmental approval. All attempts at subversion or interference have failed. There aren't many systems that come close to that kind of record.

[1] https://github.com/bitcoin/bips/blob/master/bip-0042.mediawi...

As someone who's travelled to about 30 countries in the last 2 years, I used to dismiss until I went to Turkey few months ago. It is the only country I've been to where there are BTC ATMs and signs everywhere. At the Airport there are bitcoin company logos on hangars, and in the terminal. On the streets you see the bitcoin logo everywhere.

It's very useful for Turkey as it has 100% inflation yearly and the ATM fees are 10-20% to withdraw money. Apparently (from other travellers), it's very useful for the Russians to withdraw money in Turkey as well.

>it's very useful for the Russians to withdraw money in Turkey as well.

"This product makes it easy to illegally bypass international sanctions" is not the compliment you think it is.

Those sanctions that do nothing for their alleged purpose (to make the war economically harder for the Russian government) yet disproportionately affect those people who can do absolutely nothing about them, right.

I say that a very disgruntled Russian who hasn't had a sane, predictable life since 2020.

So it seems to work then? Get the population angry enough at their leaders to cause an uprise is part of the goal I guess.

> I say that a very disgruntled Russian who hasn't had a sane, predictable life since 2020.

Seems that it is has made it politically more difficult, if not economically so.

What’s your source on the sanctions doing nothing to make the war harder for Russia?

I’m asking because how on earth can you claim that? I’m close to the ecosystem involved and the sanctions work incredibly well. They’re not sufficient and there are bypasses but that doesn’t mean they don’t work.

> Those sanctions that do nothing for their alleged purpose (to make the war economically harder for the Russian government) yet disproportionately affect those people who can do absolutely nothing about them, right.

Sanctions work by reducing growth and the economy of its target—usually a pariah state—over time by reducing growth year over year, which compounds (negatively) over time to make the target less and less influential.

> I say that a very disgruntled Russian who hasn't had a sane, predictable life since 2020.

And the alternative to economic sanctions would be… ?

>who can do absolutely nothing about them

There is a _bit_ of hope you'll do something about it.

Do you think that the world is a better place if ordinary Russians can't access their own money?

The point of sanctions is as a disincentive against bad behavior at a national level. The bad behavior here is invading a sovereign country. If the sanctions worked it would cause internal pressure and shorten the war.

Of course no one wants hardship for everyday Russians, but we should be able to say the same about everyday Ukrainians, many of whom have had their whole lives upended.

The war is continuing because of only one man on the planet, and since violent options are off the table, functioning sanctions are the next best thing.

The same ordinary Russians that voted for the person that was clearly a dictator on the raise? Or the same ones that are cheerfully sending their children to kill innocent people in Ukraine? Or the same ones that were completely apathetic to the political opposition being arrested, poisoned or killed?

I’d say yes. That’s the point of the sanctions. And somebody should be tracing that Russian money on the ledger and getting the ill gotten properties traced and arrested.

This is the entire premise of sanctions, yes.

Do you think the world is a better place if ordinary Russians are nuked along with ordinary people all over the world?

Why beat around the bush? The reason we’re playing the sanctions game, or the proxy war game, or any other bullshit games nations are playing is because the alternative is worse.

Just wait until their home banks interrogate them about how they want to spend their local currency they wish to withdraw or banks shut off withdrawals entirely due to systemic issues.

Bitcoin may not be the end all solution, but it's a great current option.

Yes, it's a much bigger compliment than the parent comment suggested. It's the sole point of cryptocurrency -- working around limits set by authorities.

The entire premise is money without a central authority. This is a feature not a bug..

"When can't shut off their money!" Would be a great Bitcoin commercial, except there's no one to make it.

> "This product makes it easy to illegally bypass international sanctions" is not the compliment you think it is.

It feels like this is a wedge across the community here at HN right now.

If the goal of the technology is to draw sovereignty from math and implement it in a way that's useful, then the capacity to trivially bypass legacy bugs (such as illubrication occurring in places where states assert their boundaries) seems like an enormous and meaningful compliment.

Maybe you think those are features and not bugs, but that's a different discussion (one I'm happy to have and about which my heart sings true).

I think it’s a problem if you have to point to a poorly functioning country and go “see? Bitcoin works!” Meanwhile the poor locals need to somehow get enough technology and understand Bitcoin. And in developed countries, no one really wants it or only buy it to speculate, not to actually make transactions.

Bitcoin ATMs used to be on the rise where I live many years ago. And I could make purchases. Now they are all gone.

Seems like the people adopting crypto don’t have many choices.

It doesn't sound like a compliment until one day you become "illegal". I don't think you'd be happy with most laws that have existed throughout history.

That was not a compliment, just reporting the way btc is used.

For a regular human in the real world they will make very rational economic decisions in their best interests.

If the ATM fees are taking 20% of my money, of course I'm going to look for alternative systems of payments. If I can't use my Russian Rubles, of course I'm going to use BTC.

"International sanctions" makes it sound like it has some legitimate worldwide weight that should be automatically respected by all people. Which works right up until you look at the exceptionally large list of things they want to sanction and you recognize that as the sole tool of "diplomacy" it can never work and might even qualify for crimes against humanity.

Which actually is a huge compliment because it means that government permission is no longer required to spend your money how you please.

Otherwise you're implicitly suggesting that Russia is somehow able to weather these sanctions only because bitcoin exists, or that bitcoin should be "reigned" in some way to make it compatible with arbitrary foreign government sanctions.

Depends on who you ask

Russian citizens aren't criminals. The sanctions are wrong.

Like it or not, in a democracy, all citizens bear responsability for the actions of their state. I'm not saying people are individually accountable for every little detail, but they are for the collective of their misdeeds.

Either it is a democracy and the majority of the population is on board with it - explicitly or by ineptitude - or it is a dictatorship and they are cumplicit by inaction.

If we were discussing nazi party sympathizers in 1940 you wouldn't be even giving them the benefit of the doubt; the truth is, many people got onboard with what was going on because it wasn't with them directly. They got on with the party because it was what every one was doing at the time.

Turning a blind eye to the atrocities performed by the leaders your motherland elects when you lived there just because you got out is the worst cowardice I can think of.

This has been happening for many years. There is a lot of commerce in Lebanon and Argentina conducted in crypto, usually USDT or USDC (dollar-backed stablecoins).

At this point to argue crypto has no utility with a straight face is just being willfully blind.

How does that work? It seems to make a lot of sense in Lebanon as they were freezing or only allowing $150 a month withdrawals. Do people really self custody their funds? When they need local currency they just go to the bitcoin atm’s to withdraw? Also fees would be somewhat high so do they use something Monero?

"commerce". There is a reason why its performed in cryptocurrencies

An interesting story on bitcoin in Turkey that I just read: https://www.wired.com/story/faruk-ozer-turkey-crypto-fraud/

It keeps chugging, but it's not terribly useful for a typical person. Close to $20 for a transaction that takes an hour or so to complete is kinda rough.

When was the last time you bought groceries with a bank reserve? If tradfi can have two layers above the reserve assets, why can't crypto?

It's digital currency without counterparty risk and no inflation risk. Similar to why gold is useful as a store of value. You can hide it, and if nobody knows it exists nobody can take it from you. The downside is if people know you have it you can be robbed.

If you are a normal person in a stable country it's not terribly useful. If you are a normal person in a not so stable place, it can be very useful to you.

It's odd how people say "no inflation risk" when the price of Bitcoin goes down sometimes, and it's the same thing. Inflation is a price change.

The difference, of course, is that the price of Bitcoin also goes up sometimes.

Look, I'm not talking about it as a speculative asset, I'm just stating why it can be useful. And by inflation risk I meant risk of being devalued due to artificial increases in supply.

> It's digital currency without counterparty risk and no inflation risk. Similar to why gold is useful as a store of value.

Not being able to reverse transactions is itself a risk, and a deflationary currency that is susceptible to hoarding isn't a great idea IMHO. And given gold's fluctuating value (though better than BTC's), I'm not sure I'd consider it a good store of value; it certainly isn't a good inflation hedge:

* https://www.nber.org/papers/w18706

* https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3667789

Neither in the short-term, nor the longer-term:

> Andre Sharon, head of the international research department at Drexel Burnham, Inc., notes, “the value of gold essentially derives from its capacity to preserve real capital and purchasing power.”† I select this particular quotation because of the prestige of the organization and the position of the spokesman, but statements in this vein can be found in great numbers. They can be traced back for generations and in many countries. How can this proposition so contrary to statistical fact become so widely believed and quoted? Possibly because gold has preserved capital in cataclysmic cases it is easy to infer that it can be trusted to do the same in less severe circumstances. To extrapolate from gold’s protection in singular catastrophes to its use as a strategy against cyclical infation is an example of faulty inductive reasoning.

* PDF: http://csinvesting.org/wp-content/uploads/2016/02/RoyJastram...

* https://www.pwlcapital.com/will-gold-save-the-day/

And being gold-backed does not help with price stability either:

* https://archive.is/FWKcL / https://www.theatlantic.com/business/archive/2012/08/why-the...

In fact, having a currency / monetary base that cannot be easy grown can hinder economic growth:

* https://en.wikipedia.org/wiki/Great_Bullion_Famine

The sooner countries abandoned the gold standard, the sooner they started recovering from the Great Depression:

* https://delong.typepad.com/sdj/2013/10/the-great-depression-...

I'm not arguing for the US to replace it's currency with bitcoin. I'm saying why it can be useful and it's not purely a scam. I would never advocate for someone to put all their money into bitcoin but if you reach a level of wealth in your life (that does not have to be that high) maybe you start to think about what happens if your country suddenly becomes a dictatorship and it makes sense to store a very small percentage of your wealth so that if the worst does happen your family can be protected.

Crypto "currency"

Think about this: wire transfers. It has happened many times banks hold up the transactions and skim off the top with fees.

Bitcoin has no such issue, it's completely transparent and far cheaper.

I send wire transfers via Wise for about $4. I can receive ACH payments for free. I do both with PortableApps.com. The transaction fees for Bitcoin are so high, most of our users stopped using it for donations and things.

Back in 2013, we'd get a BTC donation every week or two. Now we get one maybe every 3 months. In 2013, the average BTC transaction fee was about 3 cents. Today, the average fee was $19.76.

For a secure long term store of value thats kinda fast and cheap

It may be technologically secure, but it is still very volatile compared to more traditional options. That doesn’t seem to be a good thing.

Yeah. Way to move the goalposts from the praises that Bitcoin evangelists historically, and currently, sing though.

Define "typical person". The average person does not live in a first world country with relatively stable banking systems.

Most modern L1s have transaction fees of a fraction of a penny and confirmation times similar to tapping a credit card.

Not complaining about moderation but it’s interesting to note that something factual and easily verifiable is being downvoted. It’s very much the ‘my bags’ crypto culture.

yeah the uses will be on the l2s

And here comes the argument about the lightning network that I literally have been hearing since 2017.

For as "inevitable" as it's supporters claim it to be, it sure is taking a long time for anyone to care about it, outside of bitcoin maxi twitter influencers.

The rest of the crypto industry has moved on. It simply took to long for bitcoin to be used for anything outside of speculation. And other chains have taken up the actual transactions usecase.

oh i just meant this in general about transaction cases, i actually think bitcoin sucks compared to ethereum

They call it Lightning because it's a last-ditch attempt to Frankenstein Bitcoin back to life!

...which themselves are unique projects that might as well separate from the L1 chain entirely if they intend to actually solve the transaction bottleneck issue. Stuff like Lightning is cute on paper, but it really only stands to make you realize how horribly doomed the main currency is conceptually.

L2 chains are where I stopped being interested in crypto. It's like reading the plaque of Ozymandias and thinking to yourself "Ah, the desert. What a lovely place to build my next palace."

I mean I think that bitcoin is a dumb project, but layer 2s clearly make sense and are an inevitability - another chain has custody and keeps track of its own state and lets you do custom things there.

> It's a rare combination of economic incentives and technology that keeps chugging. Nobody can stop it.

About as rare as email spam? Or SEO content farms? There's a lot of phenomenon that are hard to control in a distributed network; Internet Protocol was designed for exactly this.

> About as rare as email spam?

This strikes me as a defective comparison: are there people who are trying to receive email spam, but are unable to do so due to international borders?

The health of the internet in resisting censorship is well-documented, as you point out - and it has ramifications both desirable and otherwise. The innovation of blockchain tech is that it adds a mechanism for transmitting value in this censorship-resistant environment.

People circumvent currency controls and financial regulation over the internet with gift cards, airline miles, WoW gold farms, and more. Bitcoin's notable quality is not technology; it's the social psychology which drew enough speculation that it covered for laundering black market financial transactions at unprecedented scale. Some of that illegal volume might be sympathetic oppressed citizens; my guess is the vast majority is old fashioned crime and terrorism.

Notably, there is nothing technically notable about Bitcoin's censorship resistance. It's no more resistant than the internet itself. What's notable is the scale and efficiency at which it attracts clean money to wash dirty money, and none of that is about Proof of Work or Merkle DAGs.

The argument I was responding to falls apart when you notice that The Pirate Bay, Libgen, and Scihub are all extremely resilient despite lacking all the Game Theory gobbledygook which BTC adds.

Oddly enough if email had adopted proof of work (spam was the original incentive for PoW, originally called ‘hashcash’) spam would be less of a problem

The notion of PoW predates hashcash. Hashcash is just the simplest PoW algorithm. There are PoW that work entirely differently from Hashcash, such as finding fixed length cycles in random bipartite graphs.

> Nobody can stop it.

Hypothetically, government can with severe enough punishment. Governments will do anything to squeeze tax from things, and as long as any digital transfer is not being taxed, it will find way to stop it or squeeze tax out of it.

I think many governments could buy enough compute to mine most blocks and not have any transactions in them. If they wanted to. And isn't GenAI attentional deep networks the currently more interesting way to use excess compute now?

Nope. https://www.youtube.com/watch?v=ncPyMUfNyVM

There are tons of countries with severe capital controls where crypto is thriving.

There's also an endless stream of very surprised crypenthusiasts who owe large tax bills. The tax department may not get you on any given year, but they will eventually get you.

There are countries that can mount credible attacks by partitioning the largest mining operations and shutting down the largest on/off ramps, and there are countries with severe capital controls where crypto is thriving.

The test doesn't enter hard mode until the venn diagram grows an intersection.

"tons"...which?

> Nobody can stop it.

Simple answer: yes, they can. For example a state actor or a crazy billionare could spend enough money to launch a 51% attack. Indeed the theoretical attack requires only around 20% of mining power.

Also, the next generation of people could choose another blockchain, Bitcoin turns irrelevant because another blockchain surpasses it in the audience.

It would now requires more like a trillion and they would also have to KEEP spending or everyone could just switch chains at point.

Delusional, The cost of energy to carry out 51% attack is a few millions / minute.

Even if you had the money, there's not enough hardware for sale to get 20% of mining power. Not even 2%. High-end mining hardware (most efficient) is almost always sold out.

State actors could build those ASICs or use proxies.

> speaks volumes to what makes Bitcoin interesting:

Yes It is interesting

It is not useful

It is a huge waste

Governments, Big Corps can easily co-ordinate a 51% attack on any proof-of-work networks.

If BTC's marketcap is $1T and it'll only take $5B for a 51% attack, there can be some arbitrage opportunity for a large hedge fund determined enough.

The only thing preventing this is the attacker must execute this flawlessly including attacking all the forks that may happen.

The problem is the government has to acquire the hardware. There isn’t 51% of the hash power in spare mining equipment lying around. It’s all decentralized.

You're assuming you dont have state sponsors heavily invested in it already - and have been for years. Which is actually kind of hilarious, as it also assumes the blockchain is safe from other threat models. I wouldn't be surprised if a significant chunk of bitcoin movements were state sponsored; its the next logical move - first you build a brivate internet, then you build a private currency.

Ummm really?, is that your counter-argument for governments that have Trillions in their budget?

There's also a legal risk for private entities, as the conviction of Avraham Eisenberg showed recently, and I think a strong possibility that a successful attack would crash the valuation of BTC and make it impossible to recoup costs.

That’s not what a 51% attack can do. It doesn’t allow you to “steal” money

It allows you to double spend, which is pretty much stealing from the first recipient...

> Context: Bitcoin miners have just adopted a 50% pay cut for themselves.

I fully understand what "the havening" is, and this statement is grossly misleading. Yes, the mining rewards for each block were cut in half. That does not mean "miners have just adopted a 50% pay cut for themselves". A lower block reward means some combination of (a) transaction fees will go up, (b) mining competition goes down because it doesn't make as much sense to spend electricity on a smaller reward and (c) the overall deflationary economics built into Bitcoin mean while the rewards are nominally less, they are worth more.

What happens when the last coin is mined and there's no incentive for people to run the network of computers that validates transactions? It seems like at that point the value would go to zero.

Miners would still collect transaction fees.

This is the inevitable outcome.

And yet it is (extremely) improbable that individuals will pay many many billions of dollars/year to move money around (which is what it takes to secure the network).

The only way the network's security does not collapse is if bitcoin's value goes up faster than it declines over time (50% every four years (the halving)).

No one does the basic napkin math on this and it drives me nuts. Unless the code changes, Bitcoin inevitably fails.

Presumably at that point the network would be entirely funded by transaction fees.

  > Context: Bitcoin miners have just adopted a 50% pay cut for themselves.

Miners don't decide the consensus rules. The nodes validate blocks, and the miners generate them.

The halvening timing was coded a long time ago, and in order to change it, the nodes would need to adopt the new code by installing updated clients, and at that point, you have a hard fork, because there will be nodes on the old rules, either accidentally through not updating or intentionally through using a modified core distro, and you have the new rules' valid blocks is a disjoint set from the old rules'.

The new rules' block set being a subset of the old rules' is a strictening of the consensus rules. A strictening consensus scheme is a soft fork and can keep the network in one piece.

So, there is no real way for the miners to avoid the halvening without a hardfork and a great risk to the network.

> It's a rare combination of economic incentives and technology that keeps chugging.

The "economic incentive" is a deflationary currency that rewards hoarding.

But it's unusable in a warlike scenario. During war there is no internet...

Bitcoin doesn't require internet, the blockstream satellites broadcast the block chain as well.

https://blockstream.com/satellite/

Approximately nobody will have that during wartime either.

No Internet required - just a $500 "Blockstream" Satellite receiver device!

Stocks and bonds and commodities and 401ks and CDs aren't useful in that scenario either, but it doesn't stop people from putting most of their money into those.

But they are backed up by SIPC/FDIC which is effectively backed up by the world's most powerful military.

The US's financial power is strongly linked with their ability to project military power.

Yes but techno-anarchist fetishists don’t line up to spout the immovable perfection of government-controlled fiat currency.

Bitcoin transactions work via satellite, ham radio, or cellphone. If there is any form of working communication you can send or receive Bitcoin.

If comms are temporarily disabled, your Bitcoin is still safe on tens of thousands of nodes.

Would you mind sharing any examples of somebody accepting transactions on behalf of the Bitcoin network over HAM radio?

Obviously it's possible, if you can make a TCP connection over carrier pigeon, you can make it over anything. I'm curious to see a working example however.

BTC to 100k as a 'base case' by the end of the year, but an inevitable climb towards 1 million per coin, say a barrage of influencers, YouTube personalities who used to run hedge funds, and other assorted media outlets.

I trade BTC for swings, and have a vague belief in its future. It seems like more is happening with other coins in terms of platform development and r and d.

But the shills are grating on me more than ever in this cycle.

Folks have taken issue with calling out rampant shilling of the price to retail investors?

If btc was successful it would always be measured relative to the dollar.

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