What are the opportunity costs of the airways, and the highways? I think both systems are too damaging, but they provide such utility for a just about acceptable per use cost that I use them (airflight only once or twice a year for my work). Considering what those uses cost compared to like 5 pounds of electricity, and the utility of the sorts of things you get with bitcoin, it does not seem that close to me.
What are your thoughts on BitCoin?
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Air travel and highway infrastructure have huge benefits for millions of people even if the costs a steep. Bitcoin mining has little if any benefit beyond money to the miner.
From the Guardian 2 years ago:
And for double damage, the places where electricity is cheap are the poorer nations of the world. Miner are robbing the locals of power.
The environmental damage is correlated to the price paid for Bitcoin, not to the transaction cost. It is providing price support to mine the next coin
Edit: the environmental damage scales linearly with the price of Bitcoin, but the value of the mining decreases exponentially with the number of miners.
It is very similar to gold, when gold is used as a store of value. The more valuable gold is, the greater amount of environmental damage that will be done in order to mine gold.
Edit: the environmental damage scales linearly with the price of Bitcoin, but the value of the mining decreases exponentially with the number of miners.
It is very similar to gold, when gold is used as a store of value. The more valuable gold is, the greater amount of environmental damage that will be done in order to mine gold.
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Cryptocurrency provides utility that can only be replicated with physical cash. Doing such transactions is likely to mean a drive, which could easily have an equivalent carbon footprint to the bitcoin transaction cost. I feel more uncomfortable supporting Shell in Nigeria than crypto miners there. I see no reason to believe bitcoin is worse than driving to do the same thing.
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In a world where you could only buy some things with gold, would you have refused to use it?
innonimatu
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This is entirely wrong. Bitcoin is being used as a speculative asset, it's not a currency. It lacks the stability, or at least predictability, or value that a currency requires.
The analogy to cash is the electronic payments system. And the cost of making a payment through the existing electronic payments systems are orders of magnitude smaller than making a payment with bitcoin.
Electronic payment systems are designed to be cheap to use, to use as little resources as possible for a transactions. Bitcoin and indeed all the misnamed "cryptocurrencies" are designed to have higher and higher transaction costs.
Cryptocoins are what a person trolling on the idea of electronic payments would invent!
Because of cryptocurrencies I have been able to buy things over lockdown that would have been impossible otherwise. That has made it somewhere approximating tolerable, and has been of immense utility to me.
I stated above (with evidence) that its value is driven by speculation not utility. I have pointed out before that I think such speculation is madness considering the advances of quantum computers. That does not change the fact that cryptocurrency has real utility to actual people. I not see that it is inherently environmentally worse to engage with bitcoin than cars, and orders of magnitude better than holiday flights.
The utility of bitcoin only very loosely tracks with its price. A person without access to a local currency (or who can only buy in bitcoin) doesn't care if bitcoin is 2 cents a coin or $20k a coin. The transaction itself will happen in satoshis. And the transaction will happen based on the ease of the transaction. Your successful transactions could have occurred even if one-tenth the amount of energy was spent updating the blockchain.
But, further, I don't need to use bitcoin. I'd only be buying it as a savings instrument, which I will resolve using fiat currency. On that front, its environmental damage doesn't justify the purchase.
You're comparing it to leisure spending, but that doesn't truly track. A purchased bitcoin is merely deferred leisure spending anyway. And, as I said, the damage done by the bitcoin scales linearly with its price, and is almost guaranteed to be higher than its price. Same with all Western leisure consumption, I'll grant. But leisure consumption only very rarely acts as a savings instrument, except in a handful of obvious cases.
Buying it provides price support for environmental damage. And not in any ephemeral way, but as a two-step process. Buying a bitcoin provides minimal social benefit.
I think it would be stupid to use bitcoin as a savings instrument. If you have no need to use bitcoin then do not use it. If you have no need to use a car or a plane do not use it. What I am saying is that if bitcoin has utility for you, then it is comparable to a car and much better than a plane. When I say "use bitcoin" I would not expect one to actually have any significant quantity for longer than an hour.
I am comparing it to other options that have the same function, namely driving and using physical cash. I think netflix is an interesting comparison. I do not know what percentage of the netflix bill goes to electricity, but I bet it is more than that in a bitcoin transaction. I am not really sure what a "social benefit" is, but I choose one and not the other. It is quite possible netflix would have used more electricity, can it really be any better?
Oh, I see what you're saying. I certainly don't mind people transacting in bitcoin. Well, other than the fact that I have to pay taxes to protect those contracts. So, if they're being done to avoid taxes, then it's free-riding on my society. And also, that same free-riding means that the price of bitcoin is higher than it should be, and then again with my concern about environmental damage. In Canada, we use bitcoin as a savings instrument. And I resent that.
But, using it as a barter good is fine. The transaction fees are weird and wild right now, and tracking down where all the subsidies for that transaction are super-complicated.
When it comes to simple transactions, I have bigger fish to fry. In Canada, using your credit card (vs debit) damages the local economy (and shuttles wealth upwards). So, I tilt against that.
But, using it as a barter good is fine. The transaction fees are weird and wild right now, and tracking down where all the subsidies for that transaction are super-complicated.
When it comes to simple transactions, I have bigger fish to fry. In Canada, using your credit card (vs debit) damages the local economy (and shuttles wealth upwards). So, I tilt against that.
You do not pay for cryptocurrency contract protection. It is enforced either by markets, to whom the user pays a fee, or by the combination of maths and social contract with multi signature wallets, where 2 people have to agree to take money out.
This is one of my bugbears. They made it illegal here in the UK for shops to pass on the extra fees (sold as pro-consumer move), it is one of the greatest pro-multinational laws.
Not at the consumer level. But all the bigger players that write contracts involving bitcoin expect our courts to enforce those contracts.
A major component of the value of a currency is determined by a court's ability to resolve contracts in that currency. It's one of the ways we retain sovereignty over our currency.
I do not see how that responsibility is passed to the user. My money is not coming back if something goes wrong. Sure rich people write all sorts of contracts and the state respects them with a definition of consent that would not have passed in medicine 2000 years ago, but when Mount Gox or Gerald Cotten happened that did not really help the depositors much.
Note that I was specifically talking about when bitcoin was being used to avoid taxes. (or commit crime, I guess). Then, insofar as my society is helping protect the value and stability of bitcoin, they're free-riding. Don't get too bothered, it's supremely easy to point out free-riding on nearly any criminal activity. This has little to do with the other uses of bitcoin
Moriarte
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There’s more to it than meets the eye. As a sidestep I’d like to briefly point out that bitcoin is 62.4% of the total cryptocurrency market. Then there are 7000+ other cryptos, which operate with wildly varying goals and environmental footprints. However, something else I wanted to say, one of the serious benefits: decentralised applications and decentralised organisations, which stem from them.
People in Ethereum foundation, right now, are building trust-less networks, where money can be stored within own mass, where light applications co-exist within the money flow, removing, ultimately, the need for (too many) lawyers, bureaucrats, buildings of glass and steel, and debt encumbrance, traditionally associated with currencies of the past. There is nothing even remotely as ambitious or cutting edge in the traditional payment systems business, crowned by visa and mastercard. After working with (ETH) Ethereum currency myself couple of years ago I had a shift of paradigm moment, blown away by the realisation of potential value of this network / cryptocurrency / hybrid. I highly recommend researching it, if you follow fintech.
Yes, it’s very much work in progress, but it’s ultimate benefit is being a crucial building block for decentralised world economy of the future. Ethereum is on track to become “Proof of Stake” within a year. That means no more wasting of energy running video cards hot.
Shorts summary about decentralised apps: https://blockchainhub.net/dao-decentralized-autonomous-organization/
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innonimatu
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I understand what you mean, you used it as a means of payment. Granted it can be useful. The problem with the blockchain based means of payment is that they are technically inferior in every aspect, and the energy use/environmental one is just the most obviously damaging. They're also the less private ones (unless you mine the "coin" yourself) because every transaction gets recorded in way that's accessible to every curious party. How it got promoted successfully as the tool for evading the law... it's just that the law was slow to catch up and doesn't want to have too much work following the tracks, but the tracks are there.
The payments by the standard bank transfer systems and the big networks (such as VISA) are the standard for electronic transactions, consume far less resources, still manage to be more private (not that your information doesn't get sold by every company that can sell it), and are cheaper for the parties involved. I recall blockchain being peddled as a breakthrough technology for everything. Hell, I know people who went to work as peddlers of that snake oil - and told one to his face that he ought to be ashamed. Not only was blockchain nothing new, it's pluses were known and in use before "blockchain" was a thing. The major source control system in use today, git, used the concept before minus the deliberate ever-increasing cost programmed in)
Monero solves the immediate problem of the ledger being readable, in that is is computationally very expensive to link transactions to wallets. It will be much easily readable with quantum computers, but it does provide anonymity at the moment.
This came out on Friday:
This, and the google one last year, are not really useful solutions to real problems. As I understand it, it is concocting a problem describing a quantum probability distribution, and then making a machine that is able to sample a quantum distribution that matches that in the problem. This is a very long way from something useful, like finding the prime factors of big numbers. However, the constant developing tech has to be the death knell of current cryptocurrencies. What I imagine it that the whales all have mathematicians and quantum scientists reviewing the literature all the time, and will at some point make the decision that the tech is getting close enough that they sell. Once that process starts, those holding coin and not able to respond in minutes (or seconds) will end up with nothing.
Boffins from China push quantum computing envelope for 'supremacy' in emerging photon field
Boffins from China say that they have managed to detect as many as 76 photons using a quantum computer, a result said to be the second demonstration of "quantum supremacy" or "quantum primacy" – solving a problem that a quantum computer can do far better than a classical computer.
Physicists from Shanghai's University of Science and Technology of China (USTC), led by Chao-Yang Lu and Jian-Wei Pan, reported their results in a paper published Thursday in the journal Science.
The researchers conducted a Gaussian Boson Sampling test, a variation on the Boson Sampling technique proposed in 2010 by Scott Aaronson, professor of computer science at the University of Texas at Austin, and Alex Arkhipov, at the time a doctoral student.
The experiment involves sending photons through a beam splitting system and measuring their distribution – a task that a quantum computer turns out to be far better at doing than a traditional supercomputer.
El Reg PaperBoffins from China say that they have managed to detect as many as 76 photons using a quantum computer, a result said to be the second demonstration of "quantum supremacy" or "quantum primacy" – solving a problem that a quantum computer can do far better than a classical computer.
Physicists from Shanghai's University of Science and Technology of China (USTC), led by Chao-Yang Lu and Jian-Wei Pan, reported their results in a paper published Thursday in the journal Science.
The researchers conducted a Gaussian Boson Sampling test, a variation on the Boson Sampling technique proposed in 2010 by Scott Aaronson, professor of computer science at the University of Texas at Austin, and Alex Arkhipov, at the time a doctoral student.
The experiment involves sending photons through a beam splitting system and measuring their distribution – a task that a quantum computer turns out to be far better at doing than a traditional supercomputer.
This, and the google one last year, are not really useful solutions to real problems. As I understand it, it is concocting a problem describing a quantum probability distribution, and then making a machine that is able to sample a quantum distribution that matches that in the problem. This is a very long way from something useful, like finding the prime factors of big numbers. However, the constant developing tech has to be the death knell of current cryptocurrencies. What I imagine it that the whales all have mathematicians and quantum scientists reviewing the literature all the time, and will at some point make the decision that the tech is getting close enough that they sell. Once that process starts, those holding coin and not able to respond in minutes (or seconds) will end up with nothing.
Spoiler I think this shows what is going on, but I have no idea what it means :
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innonimatu
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Afaik faster calculations only mean that someone would "take over the blockchain" by surprise. But its alterations to it would be easy to throw out if the takeover was done with malicious purpose: as simple as reverting to an earlier copy before the attack.
What this exposes is the weakness, and frankly silly idea, of having it decentralized and "mathematically guaranteed". It's a useless feature. A centralized database works. Trade itself depends on a legal framework that is centralized in government bodies. Without it bitcoin or any of its copycats is useless and unusable. The proof of that is in the fact that whet you use it now you do not hold a copy of the blockchain but deal with it through intermediaries: you depend on the centralized, state-managed court systems to enforce those contracts, not on the blockchain.
Hence the "decentralized" aspect used to sell the idea of the cryptocurrencies has already been thrown out. It just doesn't work for practical use, can't scale.
The problem is more fundamental that a speed up. A problem that quantum computers are likely to be very good at is finding the prime factors of large numbers. Most modern encryption schemes, including those used to authorise transactions on the blockchain rely on people not being able to find these factors. If you can find the prime factors of a wallets key you can spend the money, and the whole system of trust falls apart.
No, you really do not. Intermediaries really help for exchange, but multi sig wallets do solve the problem if you have a small amount of trust. Most crypto transactions have no recourse to the courts, or they would not be using crypto.
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