Tesla spent $1.5B in clean car credits on Bitcoin(amycastor.com)
amycastor.com
Tesla spent $1.5B in clean car credits on Bitcoin
https://amycastor.com/2021/02/08/tesla-spent-1-5b-in-clean-car-credits-on-bitcoin-the-filthiest-asset-imaginable/
159 comments
All large enterprises keep cash reserves. Whether you agree or not, the prevailing thesis behind keeping cash reserves in BTC is not that it will turn a profit, but that it will avoid devaluation like USD.
That's a ridiculous assumption to make. Bitcoin's value comes from speculation, not from anything of value in the real world. The price could tank to $500 tomorrow, because there is no government, no trust, and nothing in the real world backing it up other than hype. In light of this USD devaluation seems like a way less risky alternative.
It is nonetheless the prevailing thesis behind BTC, and many highly-regarded fund managers are starting to allocate serious portions of their reserves to cryptocurrency.
The important thing is how probability of BTC tanking to $500 compares to probability of USD tanking in BTC terms in the next few years.
Historical data hints that we are not close to the peak of the current bubble and when BTC drops it probably won't be lower than today, or at least, not for a long time.
Of course there is also probability that the 12-year trend will crash into zero, but that probability dwindles with every year Bitcoin isn't broken and every popped bubble that lands on an even higher low.
Historical data hints that we are not close to the peak of the current bubble and when BTC drops it probably won't be lower than today, or at least, not for a long time.
Of course there is also probability that the 12-year trend will crash into zero, but that probability dwindles with every year Bitcoin isn't broken and every popped bubble that lands on an even higher low.
HN is the only place I know where users are this stubborn to keep their head in the sand about Bitcoin. It's been 12 years man. Bitcoin could not tank to $500 tomorrow. It never will. Sorry
[deleted]
> What this tells me is that Tesla has too much cash and doesn't think investing that cash in its main business would produce gains comparable to BTC
In the short term how could it?
Also, isn't a $1.5 billion investment by a big named company (Tesla & Musk of all companies/people) a self-fulfilling prophecy, in that it will assuredly pump BTC prices? A $1.5 billion punt on anything, especially BTC & considering the stock growth/capital raising recently, doesn't seem that wild to me.
In the short term how could it?
Also, isn't a $1.5 billion investment by a big named company (Tesla & Musk of all companies/people) a self-fulfilling prophecy, in that it will assuredly pump BTC prices? A $1.5 billion punt on anything, especially BTC & considering the stock growth/capital raising recently, doesn't seem that wild to me.
Here's my wild speculation on why Musk did this (and why it's brilliant)
He knows there is a large and growing community of Bitcoin speculators and enthusiasts out there. By "endorsing" Bitcoin in this way, he not only moved the market--further enriching these folks--but also signaled that he is an ally to them, significantly boosting positive sentiment toward him and increasing the likelihood that they will purchase a Tesla as their next vehicle.
In one fell swoop, he not only drove demand for his product, but also made it more affordable to his target market without lowering its cost.
He knows there is a large and growing community of Bitcoin speculators and enthusiasts out there. By "endorsing" Bitcoin in this way, he not only moved the market--further enriching these folks--but also signaled that he is an ally to them, significantly boosting positive sentiment toward him and increasing the likelihood that they will purchase a Tesla as their next vehicle.
In one fell swoop, he not only drove demand for his product, but also made it more affordable to his target market without lowering its cost.
Or he is simply front-running the trades he asked Tesla to make after he loaded up, personally.
I don't think it's just a simple stunt. Apparently, the onboard computer on the latest Teslas is capable of mining BTC profitably at the current prices (allegedly).
It would be amusing to have cars mine when idle/plugged in, or better yet have any unsold inventory mining 24/7 (since electricity can be written off as operational expenses). I wouldn't put it past Elon.
It would be amusing to have cars mine when idle/plugged in, or better yet have any unsold inventory mining 24/7 (since electricity can be written off as operational expenses). I wouldn't put it past Elon.
If by amusing you mean reducing battery life / beefing my electricity bill while giving the impression of “generating” money.
Miss me with this new kind of planned obsolescence.
Miss me with this new kind of planned obsolescence.
Mining BTC is not profitable without dedicated ASICs. Other coins might be possible, but I doubt car hardware would have significant hashrate.
it is profitable 1. at scale and 2. when you are not paying for the electricity. Tesla covers both of these
> the onboard computer on the latest Teslas is capable of mining BTC profitably
I would be interested to learn more about that. I thought the bulk of the Autopilot compute power is in dense neural network inference which wouldn't be any good for SHA hashing.
I would be interested to learn more about that. I thought the bulk of the Autopilot compute power is in dense neural network inference which wouldn't be any good for SHA hashing.
Probably referring to the gaming PC in the Plaid.
what does potential Tesla-based mining have to do with plowing a ton of cash into Bitcoin right now?
Do you seriously think that Bitcoin enthusiasts are Elon Musk's target market? Bitcoin is useless and inflexible as a currency, and the massive risk definitely won't help bring Tesla any profit. Sounds more like market moving on his part designed to get publicity. Musk is known for making controversial decisions to increase his notoriety.
There is close to $1 Trillion worth of bitcoin out there, largely held by futurist / technology enthusiast types. If that's not his target market then who is?
Well if I just made multiples of what a Tesla costs thanks to this move perhaps I practice some positive reinforcement & purchase a Tesla? Adding support for BTC payments just facilitates the transaction even more so
Genuine question: what's the end game here for Musk? He's been tweeting about dogecoin, and then Tesla invests a non insignificant amount of money in BTC. I smell something fishy.
I have no idea. Maybe it's just a pump-and-dump scheme but he's doing crypto to steer clear of the SEC this time? Maybe he's trolling? Maybe he really is going off the rails?
He's been going off the rails for a while it seems. I've come to feel the human brain isn't really well optimised for handling the type of social integration a few hundred thousand Twitter followers provide.
When you're the richest person in the world, doing it for the lolz is probably not far from the truth of it.
Musk has mentioned a few times that he is in the Wallstreet bets discord. It looks like some of his recent posts like the dogecoin one are at the request of that group.
It’s just normal internet shitposting except you have real power.
It’s just normal internet shitposting except you have real power.
I think Tesla want's to start accepting bitcoin as payment. This is my speculation, but this kind of acquisition makes sense if they also want to render payment in bitcoin.
Alternatively this is just a value storage. Musk went on record saying he thinks stock is overvalued at the beginning of 2020 and then it went on 700% rampage. This could be just that Tesla has more cash than they need and they wanted to store it in an asset sheltered from inflation.
Alternatively this is just a value storage. Musk went on record saying he thinks stock is overvalued at the beginning of 2020 and then it went on 700% rampage. This could be just that Tesla has more cash than they need and they wanted to store it in an asset sheltered from inflation.
There are so many ways protect assets from inflation.
Dogecoin was a joke...Elon has a sense of humor that most people are missing nowdays.
BTC is serious: until FED stops printing money unsustainably, companies need a better store of value.
BTC is serious: until FED stops printing money unsustainably, companies need a better store of value.
Maybe he did it as a form of charity to Bitcoin holders (who are presumably mostly tech futurists as mentioned elsewhere in this thread). If that's the case, we might see similar news about ETH or Monero tomorrow.
How would a company like Tesla "store" such a large amount of cryptocurrency? Who would hold the private key(s)? Surely not one person, and if not, how would they be distributed in a safe way that both prevented insider theft and provided redundancy to prevent lock out?
Crypto custody service, probably. At least until they can build their own management system.
https://www.gemini.com/custody
https://www.gemini.com/custody
Point of clarity:
Bitcoin transactions take negligible energy to produce and validate. It's block production that's energy-intensive, and it's the same regardless of how big or full blocks are.
Like any energy-intensive industry that could operate profitably via fossil fuel consumption, mining should be regulated to only use green energy. No different than power production and consumption today.
Bitcoin transactions take negligible energy to produce and validate. It's block production that's energy-intensive, and it's the same regardless of how big or full blocks are.
Like any energy-intensive industry that could operate profitably via fossil fuel consumption, mining should be regulated to only use green energy. No different than power production and consumption today.
You can't regulate Bitcoin mining. Bitcoin is not controllable in the same way as say, rare earth metal mining, where you can exert pressure on whoever is mining them (or whichever nation is exporting them). There's very little any government can do to pressure a mining farm in Far East Russia or Northern China to use green power for their operations.
You can do Bitcoin mining almost completely offline. Once that magical hash that satisfies the proof-of-work requirement appears, there's no tracing to where it was produced.
You can do Bitcoin mining almost completely offline. Once that magical hash that satisfies the proof-of-work requirement appears, there's no tracing to where it was produced.
That’s why a generic carbon tax should be used. There is no point punishing Bitcoin mining because bitcoin mining isn’t inherently bad, it’s the burning of fuels that is bad.
Countries should then tax imports from other countries that do not have a carbon tax.
Countries should then tax imports from other countries that do not have a carbon tax.
It's pretty hard to hide the fossil fuel-burning power plant generating your PoW. If your local government or citizens won't stop you from polluting the environment, other governments can impose retaliatory tariffs or even sanctions on your government, and citizens of other countries can boycott your country's goods and services. Make the financial penalties for tolerating fossil fuel-burning PoW steep enough, and your power plant gets shut down.
Shutting down exchanges that deal in bitcoin would nicely eliminate bitcoin. Nobody is going to mine an unprofitable coin they can't sell, and except for a tiny number of black market sellers, nobody wants to deal in BTC itself.
But the block size is limited - in effect limiting transactions per block. The difficultly of mining a block increases over time -> energy consumption of mining a block increases over time (assuming stationary hardware)
https://en.wikipedia.org/wiki/Bitcoin_scalability_problem
https://en.wikipedia.org/wiki/Bitcoin_scalability_problem
Right -- miners are selling you block space in which to store your transactions. That's the thing everyone's buying with Bitcoin, and that's the thing miners are spending all their energy on -- putting your transactions into blocks. The transactions themselves are very cheap to produce and validate.
This is a distinction without a difference. What use is a bitcoin transaction that is not included in a block?
Here's a real-world example: I sign and give you a transaction that, if you relay within the next 1000 blocks, will give you some BTC. You can choose relay it, to let it expire, or to resell it to someone else by signing another transaction that consumes my transaction's UTXO to you and grants up to the same amount to your buyer.
Does that actually happen, anywhere? How would you record the "sale" of the transaction if not on the blockchain? (If the answer is some other currency/financial system, consider what that implies for the overall utility of btc)
Bitcoin is presently estimated to consume ~10GW of power[1]. Transaction rate has climbed to & stabilized ~4 transactions/second[2] (it peaked for a day above 5 tps during the frenzy 3 years ago). Running 10GW for 1/4 a second comes to 695 kWh. One could drive a Tesla up and a good part of the way down either American coast with this much energy.
"Negligible energy" to produce a transaction is not correct. Miners are willing to sell transactions that cost enormous heaps of money to mint because the coin itself "has value".
[1] https://news.bitcoin.com/the-bitcoin-network-now-consumes-7-...
[2] https://www.blockchain.com/charts/transactions-per-second
"Negligible energy" to produce a transaction is not correct. Miners are willing to sell transactions that cost enormous heaps of money to mint because the coin itself "has value".
[1] https://news.bitcoin.com/the-bitcoin-network-now-consumes-7-...
[2] https://www.blockchain.com/charts/transactions-per-second
Meanwhile, my ancient laptop can generate and validate many thousands of transactions per second, using just 10s of watts. In fact, the negligible cost to validate transactions is exactly what allows you to run a node at home, on a humble Raspberry Pi.
Miners don't sell transactions. They sell block space in which to store them. That, fundamentally, is simultaneously what makes Bitcoin so expensive, and so valuable -- people wanting to get their transactions confirmed.
Miners don't sell transactions. They sell block space in which to store them. That, fundamentally, is simultaneously what makes Bitcoin so expensive, and so valuable -- people wanting to get their transactions confirmed.
What would it mean for a bitcoin transaction to exist without ever being included in a block?
Maybe its fee is too low now but some miner will add it to a block later when the fee becomes reasonable again, win the mining lottery and add it to the blockchain. Maybe next year or never.
The argument about CO2 emissions and bitcoin seems reflexive and ill-informed. The reality is, it’s very small.
Bitcoin is estimated to emit 22 million tonnes of CO2, and that is based on country level energy generation mix [1]. In reality it is probably lower due to cost benefits of renewables like hydro. Global emissions are 50 billion [2]. Pornography causes 10x as much CO2 as bitcoin [3].
[1] https://economictimes.indiatimes.com/news/science/bitcoin-us...
[2] https://ourworldindata.org/emissions-by-sector
[3] https://www.newscientist.com/article/2209569-streaming-onlin...
Bitcoin is estimated to emit 22 million tonnes of CO2, and that is based on country level energy generation mix [1]. In reality it is probably lower due to cost benefits of renewables like hydro. Global emissions are 50 billion [2]. Pornography causes 10x as much CO2 as bitcoin [3].
[1] https://economictimes.indiatimes.com/news/science/bitcoin-us...
[2] https://ourworldindata.org/emissions-by-sector
[3] https://www.newscientist.com/article/2209569-streaming-onlin...
46 TWh/y mentioned in this link comes to ~5.25 GW continuous usage. With an actual transaction rate of ~4 tps in 2021, each transaction takes ~364.6 kWh. Enough to send a top efficiency Tesla down the entire West coast.
To give some idea of the magnitude of this draw, some reference figures: the 95 nuclear power plants in the US have a net capacity of ~98 GW of power. Two reactors under construction will add ~1.25GW capacity. Even by these fairly low estimates linked, about 4-5 nuclear power plants.
The numbers on porn's power consumption are just horseshit. The methodology was to take all power consumption of data centers combined, and say that whatever % of internet traffic/throughput is porn is what % of data-center power consumption porn is responsible for. This is just abjectly insulting bad math, presented as insightful: just absolute junk worthless numbers. Porn & video in general has radically higher bandwidth-to-cpu usage ratios than many applications, sendfile() is stupid efficient, caches run hot for popular videos, and sending the bits around is just not that costly. Running cpus and gpus is what constitutes the bulk of the energy expenditure in data centers, not switches, yet porn is getting dinged as though it's traffic is the only thing that matters. Pieces like this should be rescinded & apologies should be issued.
Bitcoin is a monster & energy wastage of this class is an abomination. It should not be tolerated in a society that has it's head screwed on straight.
To give some idea of the magnitude of this draw, some reference figures: the 95 nuclear power plants in the US have a net capacity of ~98 GW of power. Two reactors under construction will add ~1.25GW capacity. Even by these fairly low estimates linked, about 4-5 nuclear power plants.
The numbers on porn's power consumption are just horseshit. The methodology was to take all power consumption of data centers combined, and say that whatever % of internet traffic/throughput is porn is what % of data-center power consumption porn is responsible for. This is just abjectly insulting bad math, presented as insightful: just absolute junk worthless numbers. Porn & video in general has radically higher bandwidth-to-cpu usage ratios than many applications, sendfile() is stupid efficient, caches run hot for popular videos, and sending the bits around is just not that costly. Running cpus and gpus is what constitutes the bulk of the energy expenditure in data centers, not switches, yet porn is getting dinged as though it's traffic is the only thing that matters. Pieces like this should be rescinded & apologies should be issued.
Bitcoin is a monster & energy wastage of this class is an abomination. It should not be tolerated in a society that has it's head screwed on straight.
That’s an upper bound on bitcoin power usage as I said, it is also a ‘horseshit’ calculation as per your classification. I’m not sure how equating it to driving down the coast is a meaningful comparison.
Although the porn calculation is not ‘accurate’ I doubt it is wrong by an order of magnitude.
Although the porn calculation is not ‘accurate’ I doubt it is wrong by an order of magnitude.
I'd wager the porn calculation is wrong by at least two orders of magnitude. It's grossly ineptly inaccurate. Data-centers do work. Sending porn/videos to people is easy, hardly work at all. sendfile() is amazing. Try it.
This article you linked is trying to re-set the numbers, argue that most other calculations are significantly high. Many calculations are well over 7.5GW. The 5.25 this article presents is a conservative number. Even if it's half that number, it's still astronomically high. And it's not going to be an order of magnitude over the reality. Unlike this no-good lying dirtbag porn estimate.
Driving down the coast is supposed to drill home what a giant flaming pile of garbage energy efficiency bitcoin has. It's supposed to try to impress what 5.25GW of power means, make real what each transaction's 1/4 of a second of that sort of power consumption can do. It's supposed to impress upon us how irresponsible it is that anyone would use this system, how desperate they would have to be to waste so much energy, to screw over humanity with such a gratuitous waste of energy supporting this deranged insane scheme, just to avoid using the monetary systems the world has. Yes. Unfortunately many people lack other means to put their wealth into into stable currencies, & that is sad, causes big hardships for them that are cruel, but for every other reason brought forth: bitcoin is a ruinous colossal waste & it's presence on this earth is an embarrassment.
This article you linked is trying to re-set the numbers, argue that most other calculations are significantly high. Many calculations are well over 7.5GW. The 5.25 this article presents is a conservative number. Even if it's half that number, it's still astronomically high. And it's not going to be an order of magnitude over the reality. Unlike this no-good lying dirtbag porn estimate.
Driving down the coast is supposed to drill home what a giant flaming pile of garbage energy efficiency bitcoin has. It's supposed to try to impress what 5.25GW of power means, make real what each transaction's 1/4 of a second of that sort of power consumption can do. It's supposed to impress upon us how irresponsible it is that anyone would use this system, how desperate they would have to be to waste so much energy, to screw over humanity with such a gratuitous waste of energy supporting this deranged insane scheme, just to avoid using the monetary systems the world has. Yes. Unfortunately many people lack other means to put their wealth into into stable currencies, & that is sad, causes big hardships for them that are cruel, but for every other reason brought forth: bitcoin is a ruinous colossal waste & it's presence on this earth is an embarrassment.
It’s obvious you consider bitcoin immoral, and are willing to grasp any negative aspect and distort it as much as possible. This means for example you aren’t bothering to understand the point that it is not the energy consumption estimate that is the relevant upper bound, it is the emissions of the energy sources being used. Why do you care so much about how hydroelectric power in remote China is being used anyway?
Well it seems that neither of us have intimate knowledge of the power usage required to serve video at scale (sendfile()? Give me a break..).
Well it seems that neither of us have intimate knowledge of the power usage required to serve video at scale (sendfile()? Give me a break..).
Next up, ask me how I feel about space tourism!
What a ridiculous headline. How do you spend clean car credits, exactly?
Tesla has a market cap of almost a trillion dollars.
Tesla has a market cap of almost a trillion dollars.
You sell them to other companies for money and then spend that money?
You cannot, however, spend market cap.
You cannot, however, spend market cap.
In a way, you can even spend market cap, just issue new shares and raise money for the company. This way you can generate a lot of cash, especially if your market cap is inflated.
Elon is an evil character. Since he bought his McLaren to show off and totaled it - to this day. He doesn't care about humanity and science - all he cares about is ego and money. And that's nothing new here, but let's stop idolizing him and give him more credit than he deserves. From tax credits to this abuse - all his money is thanks to the US taxpayer who doesn't drive a Tesla because they can't afford one!
Energy is the largest cost in bitcoin mining. Mining moves to the cheapest electricity locations. Renewables are already the cheapest energy source globally, and getting better. So in the mid-term bitcoin mining will move to renewable energy sources, problem solved.
If all the world's clean energy is consumed by bitcoin mining, then what energy does the rest of us use?
More clean energy. There is almost infinite energy raining down on us.
Theoretically, but not in the real actual world we live in. Few countries are on 100% renewables/nuclear.
Explain to me this. How can proof-of-work NOT result in massively expensive energy consumption, regardless of where the energy is obtained?
Suppose I wanted to conduct a 51% attack against Bitcoin. If I succeed, I stand to benefit monetarily, for example by shorting BTC on the Chicago Mercantile Exchange -- since a successful 51% would massively damage trust in bitcoin. Alternatively I could double-spend, though reaping the rewards without getting caught might be harder. Let's put the details aside and just agree that if you had the power to 51% bitcoin, you could make a lot of money off it.
What stops me from doing this is that the energy required for 51% of the mining power would be ludicrously expensive, even for just the half-hour[1] or so it would take to execute a damaging attack.
At least, it must be more expensive than the amount of money I could gain via my short position and/or double-spends. Otherwise it would be worth doing, right?
But for that to be the true, it must mean that the whole rest of the network is currently expending at least that much energy, every half hour or so, to constantly stop somebody from doing this.
So doesn't that put a dollar-amount floor on Bitcoin energy consumption, equal to [maximum amount one could stand to gain from crashing Bitcoin] repeated every [minimum duration of 51% attack to destroy confidence in bitcoin]?
Whether the mining is occurring with cheap energy in Iceland or expensive energy in California doesn't change that enough of that energy must be used to make it too expensive for an adversary (who could also be operating in Iceland or wherever) to attack.
[1]I say half-hour because 3 confirmations are considered sufficient for Coinbase to accept a BTC deposit, so I think it would make big waves if 3 blocks got reversed by a 51% attack.
Suppose I wanted to conduct a 51% attack against Bitcoin. If I succeed, I stand to benefit monetarily, for example by shorting BTC on the Chicago Mercantile Exchange -- since a successful 51% would massively damage trust in bitcoin. Alternatively I could double-spend, though reaping the rewards without getting caught might be harder. Let's put the details aside and just agree that if you had the power to 51% bitcoin, you could make a lot of money off it.
What stops me from doing this is that the energy required for 51% of the mining power would be ludicrously expensive, even for just the half-hour[1] or so it would take to execute a damaging attack.
At least, it must be more expensive than the amount of money I could gain via my short position and/or double-spends. Otherwise it would be worth doing, right?
But for that to be the true, it must mean that the whole rest of the network is currently expending at least that much energy, every half hour or so, to constantly stop somebody from doing this.
So doesn't that put a dollar-amount floor on Bitcoin energy consumption, equal to [maximum amount one could stand to gain from crashing Bitcoin] repeated every [minimum duration of 51% attack to destroy confidence in bitcoin]?
Whether the mining is occurring with cheap energy in Iceland or expensive energy in California doesn't change that enough of that energy must be used to make it too expensive for an adversary (who could also be operating in Iceland or wherever) to attack.
[1]I say half-hour because 3 confirmations are considered sufficient for Coinbase to accept a BTC deposit, so I think it would make big waves if 3 blocks got reversed by a 51% attack.
Bitcoin subsidizes renewable energies because it offers a base price for excess energy at any time at any place.
The price of energy used to mine Bitcoin is very low. It does nothing to provide a real base price for excess energy in countries and areas that have robust environmental protections.
There are some niche cases that the Bitcoin crowd love to showcase where energy is truly very cheap (they tend to be saturated sources), but mostly Bitcoin is mined on illicit energy contracts in developing areas where that energy can be had for dirt cheap.
Bottom line is that it absolutely does not advance renewable energy production anywhere where that is taken seriously.
There are some niche cases that the Bitcoin crowd love to showcase where energy is truly very cheap (they tend to be saturated sources), but mostly Bitcoin is mined on illicit energy contracts in developing areas where that energy can be had for dirt cheap.
Bottom line is that it absolutely does not advance renewable energy production anywhere where that is taken seriously.
T.I.L. ransomware wouldn't exist without BTC... ::eyeroll::
Sure it could exist without it, but it makes the riskiest actual step of the grift substantially less risky.
it was around before BTC existed... by a long shot.
Yeah this narrative is played out. Yes bitcoin uses a lot of energy. Almost certainly less than the things it is competing against. And over time it has the potential to decrease that consumption drastically with other protocols, an option traditional banking doesn't possess.
Bitcoin is already the greenest form of finance and will get much cleaner in the future.
Bitcoin is already the greenest form of finance and will get much cleaner in the future.
Bitcoin is the greenest form of finance that gets greener over time?
What nonsense is this?
Already ONE transaction consumes as much power as an entire American household uses for a week.That is 215 kwh of energy for one transaction.
It's using the equivalent of 2.26 million American homes worth of energy for just 330k transactions.
A significant chunk of that is wash trading, ie people buying and selling to themselves to manipulate the price. Is that worth it?
A simple visa or mastercard transaction produces several orders of magnitude less CO2.
For 330k transact
What nonsense is this?
Already ONE transaction consumes as much power as an entire American household uses for a week.That is 215 kwh of energy for one transaction.
It's using the equivalent of 2.26 million American homes worth of energy for just 330k transactions.
A significant chunk of that is wash trading, ie people buying and selling to themselves to manipulate the price. Is that worth it?
A simple visa or mastercard transaction produces several orders of magnitude less CO2.
For 330k transact
How many skycrcapers are there in the world constructed for financial institutions. Want to go down the rabbit hole of calculating that CO2?
Also, cite your sources
Also, cite your sources
Do you think financial institutions, and skyscrapers they inhabit, would not exist in a BTC-powered world? People won't want to use their BTC to invest in companies on the stock market, trade commodities futures, or issue loans?
That's a bad example but one thing that wouldn't happen is a government manipulating its currency to finance wars.
How much war happens because of fiat currency manipulation that wouldn't happen otherwise?
Seems like humanity has engaged in war on a pretty regular basis since long before people decided to put their trust in paper money.
Seems like humanity has engaged in war on a pretty regular basis since long before people decided to put their trust in paper money.
[deleted]
Are all those ASIC miners just sitting out in fields then?
Show me a skyscraper that is even 10% filled with asics and I'll send you a bitcoin.
I'm sure Coinbase's office's are also just a barn built from sustainably sourced lumber somewhere as well.
This is such a disingenuous point: as though a world running on Bitcoin wouldn't be filled with the exact same financial institutions, doing the exact same things they do now, even though those exact things are what all the new business involving Bitcoin are generally trying to do.
This is such a disingenuous point: as though a world running on Bitcoin wouldn't be filled with the exact same financial institutions, doing the exact same things they do now, even though those exact things are what all the new business involving Bitcoin are generally trying to do.
Indeed. If bitcoin was more energy efficient, its transaction fees would be lower since the price floor is the basic cost of the inputs. Visa fees can be only a few cents, and they're raking in the profit at that price. Bitcoin fees are currently $13.50.
Bitcoin fees can be much cheaper. Even if you pay only $0.25 your transaction will probably be mined within a day.
That is 215 kwh of energy for one transaction.
Nope. The marginal cost of a transaction is next to nothing. Just take a step back and think about what you're saying: that a bitcoin transaction would cost £3.40 in the UK. Obviously nobody would be using bitcoin if that were true.
Proof of work is where the value of the coin is derived. How much energy do you think it takes to mint a physical coin? Now compare that to the amount of energy it takes to transfer it to a shop assistant.
Nope. The marginal cost of a transaction is next to nothing. Just take a step back and think about what you're saying: that a bitcoin transaction would cost £3.40 in the UK. Obviously nobody would be using bitcoin if that were true.
Proof of work is where the value of the coin is derived. How much energy do you think it takes to mint a physical coin? Now compare that to the amount of energy it takes to transfer it to a shop assistant.
> Just take a step back and think about what you're saying: that a bitcoin transaction would cost £3.40 in the UK
I hope I'm not misinterpreting your point, but bitcoin transactions cost even more than that.
https://ycharts.com/indicators/bitcoin_average_transaction_f...
Users have to bid for space on the blockchain to store transactions. Early on the space was cheap and miners got their profits from the # of bitcoins they mined. As that dries up the incentive to mine shifts toward transaction fees.
The electricity costs right now are unclear to users because of indirection. Mining dilutes the value of bitcoins each user holds but they do not see a loss in their wallet. I wonder if once confronted with even greater transaction fees over time whether users will be willing to continue to pay up to use it. One has to cross their fingers that the demand stays high enough to sustain enough mining to prevent the from being taken over with 51% attack.
I hope I'm not misinterpreting your point, but bitcoin transactions cost even more than that.
https://ycharts.com/indicators/bitcoin_average_transaction_f...
Users have to bid for space on the blockchain to store transactions. Early on the space was cheap and miners got their profits from the # of bitcoins they mined. As that dries up the incentive to mine shifts toward transaction fees.
The electricity costs right now are unclear to users because of indirection. Mining dilutes the value of bitcoins each user holds but they do not see a loss in their wallet. I wonder if once confronted with even greater transaction fees over time whether users will be willing to continue to pay up to use it. One has to cross their fingers that the demand stays high enough to sustain enough mining to prevent the from being taken over with 51% attack.
Exactly. Ensuring that no party can unilaterally issue new coins is the value proposition of Bitcoin.
Bitcoin transactions are not equivalent to payment card transactions - they are settled. Layer 1 will not be where payment card type transactions will be made in a Bitcoin based financial system.
I pay 3% on every visa transaction, which goes to pay humans who then use energy and pollute.
Paying a few bucks for a Bitcoin blockchain transaction or a few milli-cents for a lightning transaction seems efficient in comparison.
Paying a few bucks for a Bitcoin blockchain transaction or a few milli-cents for a lightning transaction seems efficient in comparison.
i have to be on the news and talked about by everybody. i say this !
Did Antonio J. Gracias on the board sign off on this ???.
https://ark-invest.com/analyst-research/bitcoin-myths/
<TL;DR>
Claim: Bitcoin wastes too much energy.
Counter-Claim: Bitcoin’s energy consumption is more efficient than that of gold and traditional banks.
<TL;DR>
Claim: Bitcoin wastes too much energy.
Counter-Claim: Bitcoin’s energy consumption is more efficient than that of gold and traditional banks.
Counter-counter-claim: The existence of Bitcoin doesn’t reduce the energy use of traditional banks - in fact, it increases it. Bitcoin is not just responsible for the energy used in mining, but also the energy used in its voluminous interactions with traditional finance.
There is no effort to bring these to the same base. The global banking system is massive. The article is factoring retail banking, stock & bonds, finance, derivatives, payment processing and a lot more in to "Global Banking". Even if bitcoin was to replace the dollar and gold all at once, much of that infrastructure would still be needed.
Add to this bitcoin does an infinitesimally small number of transactions compared to the global financial system and I am doubtful that on a per value or per transaction basis that it would be within an order of magnitude. A lot of this is inherent to the design, and while it may be able to be evolved or an alternative crypto may not have the caveats, Bitcoin as it stands now is VERY power inefficient.
Add to this bitcoin does an infinitesimally small number of transactions compared to the global financial system and I am doubtful that on a per value or per transaction basis that it would be within an order of magnitude. A lot of this is inherent to the design, and while it may be able to be evolved or an alternative crypto may not have the caveats, Bitcoin as it stands now is VERY power inefficient.
Do you really think a startup running on Bitcoin can't be do a better job than the legacy banking system? And by startup I mean a group of people that write software in a competitive environment.
Those already exist (Lightning Labs) and there's so much more to do with a secure programmable distributed database.
Those already exist (Lightning Labs) and there's so much more to do with a secure programmable distributed database.
At retail banking... No I don't think they can more effectively manage my grandmothers retirement account.
This requires people, and locations. Software isn't going to solve this problem. The only way I think this will be solved is by becoming very similar to what already exists.
This requires people, and locations. Software isn't going to solve this problem. The only way I think this will be solved is by becoming very similar to what already exists.
Maybe not strictly software, although it's clear that the range of what's possible to do in software is only getting wider. It still doesn't preclude from involving people, and improving the quality of service.
Yeah, but that is the point, The figure for global banking is factoring in those Customer service, credit risk, trading and many other back office people. If you have to hire the same kinds of people then that isn't a massive saving. Your likely to get to a similar size to offer the same services. Bitcoin alone doesn't help that.
Yes you could create a more energy efficient bank, but that is orthogonal to that bank using bitcoin. Many people have tried, but most have failed. Those that succeed are generally acquired and the bigger banks tend to (albeit slowly) integrate those efficiencies.
The post I was replying to originally was citing an article claiming that the energy costs of holding dollars and gold was higher then bitcoin. I was showing how tallying the total energy used by global banks was a false equivalency as much of what a bank does has no direct equivalent in the numbers given for Bitcoin.
Yes you could create a more energy efficient bank, but that is orthogonal to that bank using bitcoin. Many people have tried, but most have failed. Those that succeed are generally acquired and the bigger banks tend to (albeit slowly) integrate those efficiencies.
The post I was replying to originally was citing an article claiming that the energy costs of holding dollars and gold was higher then bitcoin. I was showing how tallying the total energy used by global banks was a false equivalency as much of what a bank does has no direct equivalent in the numbers given for Bitcoin.
Counter claim: Pretty much nobody uses the gold standard anymore.
Just for clarification: How many watts does gold need?
I always wondered what will happen when the environmentalists find out about the energy consumption requirements of Bitcoin.
The counterargument is always that at some point in future the energy consumption problem will be solved, but isn't the rate of computation a or the main factor against 50%+ attacks? Else the solutions proposed seemed to relay on centralized services that don't actually play on the blockchain to reduce the actual amount of transactions and load, also then avoiding the delays - but then re-adding the supposed main issue of having a "trustless" blockchain.
You can't "solve" the energy consumption of Bitcoin - deliberate waste is built into the Proof-of-work protocol by design.
Makes me wonder if someone can create a cryptocurrency where the mining is for distributed computing research for achieving nuclear fusion power. Crypto-mining that does SETI@home/BOINC work.
This has been wondered for years, usually by people who don't know the purpose of hashing functions. If nuclear fusion models + protein folding were easily verifiable, then there would be no point in leveraging distributed computing for them - we'd have the same level of understanding for them as we do for contrived hashing functions. If they somehow also ended up with the difficulty directionality intentionally designed for in cryptography, then that would be fine. But that is pretty unlikely, and in that event your currency is totally hacked and useless.
It's still nice to dream of all this distributed computing activity going towards tangible real world benefits.
Like a global realtime financial network that grants participants complete freedom to do as they please with their own money? Yeah.
Every single word of that description is intangible.
So is "free energy" and "cancer cure". Of course Bitcoin's intangibility has tangible benefits this very second, those others do not.
Nuclear reactions and chemical formulas are technically tangible.
uh huh, but their tangibility has as much to do with randomly modeling them as a proof of work in a crypto currency - as every potential tangible thing you can spend the currency on. That is to say: none.
Physics is more tangible than mathematics.
It exists, it's called GridCoin. It's a proof of stake currency that is distributed based on work units completed in BOINC. https://gridcoin.us/
Or PoS Ethereum or other PoS crypto currencies can take the place of exponentially energy-hungry PoW. They explicitly deal with the 50%+ attacks in their governance too.
How so - by central authority changes?
For certain cases of attacks, yes with minority forks, and by destroying the attackers stake in other cases, see the section titled "Attacks are much easier to recover from in proof of stake" here: https://vitalik.ca/general/2020/11/06/pos2020.html
So why not just have a trusted centralized authority(ies), arguably democratically elected who control the system(s), and where there isn't a transfer of wealth weighted from late adopters towards earlier adopters?
That's another alternative, which doesn't exist yet. Ethereum PoS could be here sooner and doesn't use energy like PoW does, along with other helpful features.
[deleted]
The counterargument has been the same for years: the present financial system consumes for more energy, to the point where people complaining about it look like they're either trying to deceive others, or they've just put so little thought into it that they should be ignored.
They will be super angry and look at all the details, including the past profits, then calmly decide to look the other way because they need a retirement account after all :)
They'll complain and then we'll show them the energy consumption of the finance industry.
Controlling for transaction volume the energy consumption of bitcoin is orders of magnitude higher than the rest of the finance industry.
Right, but the transaction volume is just awfully bad with Bitcoin, so much so that it's a big limitation of the whole system.
It's been clear for a long time that Bitcoin is not suited for small transactions.
It's been clear for a long time that Bitcoin is not suited for small transactions.
How much energy does the rest of the finance industry use?
No; every dollar you give to visa (or whatever payment processor) will eventually go to a human who will use energy, pollute, etc.
That's just as true for bitcoin, and outside what I would consider the actual cost of running the financial system.
It’s not just as true for bitcoin; bitcoin doesn’t have an army of employees to make your transactions go through.
I misunderstood what you meant, but this argument still seems specious.
The people currently employed by the financial industry would not cease to exist if the financial industry did not need as many employees, they would find jobs elsewhere. The downstream effects of what people spend their wages on isn't part of the the actual impact of the industry they work for.
The people currently employed by the financial industry would not cease to exist if the financial industry did not need as many employees, they would find jobs elsewhere. The downstream effects of what people spend their wages on isn't part of the the actual impact of the industry they work for.
Yes, they would find jobs elsewhere, and their energy consumption and pollution would no longer go to support the finance industry. If you want to make a fair equilibrium comparison, compare the current state of affairs with a future state of affairs where the population is smaller by the amount of people who currently work for payment processors.
I'm really not understanding your argument here. We should decrease the worlds population by the number of people who currently work for financial institutions?
I’m not proposing we literally do that; I’m explaining how to fairly compare the resource consumption of Bitcoin to the resource consumption of the payment industry, factoring in opportunity costs.
I'm on the fence about whether this is correct or not. The question in my mind is: do you include military spending in the cost of maintaining a fiat currency and if so to what extent?
Fiat currencies are backed in part by the power of the governments that issue them, so is defense spending a form of "proof of work" for them? If the US government disbanded its military would the USD hold any value for very long? Same goes for any other fiat... e.g. if the PRC disbanded the Chinese military would the Yuan retain much value?
If fiat currencies require a constant demonstration of credible military (and police) capability, that's a rather enormous cost and brings with it quite a bit of resource use and pollution.
(I would guesstimate that Bitcoin would still be less efficient than USD but that the margin would be smaller.)
Fiat currencies are backed in part by the power of the governments that issue them, so is defense spending a form of "proof of work" for them? If the US government disbanded its military would the USD hold any value for very long? Same goes for any other fiat... e.g. if the PRC disbanded the Chinese military would the Yuan retain much value?
If fiat currencies require a constant demonstration of credible military (and police) capability, that's a rather enormous cost and brings with it quite a bit of resource use and pollution.
(I would guesstimate that Bitcoin would still be less efficient than USD but that the margin would be smaller.)
Do you think that the international links, data centres and facilities full of ASIC miners are not dependent on military protection?
Do you honestly think that the value of Bitcoin would not tank if the value of the US Dollar tanked?
We're talking about the relative efficiency of Bitcoin vs. conventional finance in an energy or other cost per transaction sense. I'm asking whether some amount of military spending should be counted in the cost of maintaining a fiat monetary system.
If people were using Bitcoin as currency directly its value would remain equal to whatever people were willing to trade for it. Obviously if all people were willing to trade it for was USD it would become worthless, but that's not the point in this thread.
Bitcoin has other problems as a currency but that's not the topic of discussion here. Some other cryptocurrencies try to solve these, such as it being too deflationary or lacking functionality.
If people were using Bitcoin as currency directly its value would remain equal to whatever people were willing to trade for it. Obviously if all people were willing to trade it for was USD it would become worthless, but that's not the point in this thread.
Bitcoin has other problems as a currency but that's not the topic of discussion here. Some other cryptocurrencies try to solve these, such as it being too deflationary or lacking functionality.
They're probably not big fans of finance, either.
Bit of an aside, but it's so wild that we label people as "environmentalists" and that anyone would place themselves NOT in that group.
It seems like 100% of people should want air which is non-toxic, water which is non-toxic and food which is non-toxic.
But of course, being an "abolitionist" was a political group in the 1800s but now it's just assumed that 100% of people are anti-slavery, so maybe the optimistic take is that "environmentalist" will undergo the same transformation as "abolitionist".
It seems like 100% of people should want air which is non-toxic, water which is non-toxic and food which is non-toxic.
But of course, being an "abolitionist" was a political group in the 1800s but now it's just assumed that 100% of people are anti-slavery, so maybe the optimistic take is that "environmentalist" will undergo the same transformation as "abolitionist".
This black-and-white thinking ignores the spectrum of what constitutes non-toxic. There are those that accept nothing short of perfect purity in air, water and food, a condition which has never existed in a million years of human history. Others are less concerned about humans and more about ecology. Still others value the morals of human-animal relations above issues of nature.
So no, we are not all 'ecologists', not in the same sense anyway. And not to the same degree.
So no, we are not all 'ecologists', not in the same sense anyway. And not to the same degree.
There's as wide a gulf between our enviroment[1] and 'complete purity' as there is between slavery and 'complete freedom'.
[1](complete ecosystem collapse, widespread poisoning of populations worldwide, etc)
[1](complete ecosystem collapse, widespread poisoning of populations worldwide, etc)
One assumes that air and water purity was fairly better pre-Industrial Revolution.
I'm not so sure. No water systems at all. Lack of covered drains. Firewood for heat in any population center. Tuberculosis and cholera. Unrefrigerated meat.
Sure, but on the other hand no large-scale industrial by-products, no islands of plastic in the sea, the mountains of trash were less durable and closer to being biodegradable.
The spectrum lies in what the proposed solution to any man-made ecological problem should be. Typically solutions to these proposed problems require increased cost burden on either individuals or businesses, sacrifices in lifestyle, increased regulation, etc. With anything like this politics comes into play almost immediately.
The way I see it, your 'environmentalist' label generally applies to those who thing we should spend/sacrifice a lot. And the 'climate denier'/'anti-environmentalist' label applies to those at the opposite end of the spectrum who don't think we should sacrifice or spend anything.
Also re: slavery, more people are enslaved now in the world than at any point in history. More black men are enslaved by the prison system in the USA than there were at the height of North American slavery. So things are never so boolean.
The way I see it, your 'environmentalist' label generally applies to those who thing we should spend/sacrifice a lot. And the 'climate denier'/'anti-environmentalist' label applies to those at the opposite end of the spectrum who don't think we should sacrifice or spend anything.
Also re: slavery, more people are enslaved now in the world than at any point in history. More black men are enslaved by the prison system in the USA than there were at the height of North American slavery. So things are never so boolean.
>It seems like 100% of people should want air which is non-toxic, water which is non-toxic and food which is non-toxic.
This is a really low bar for what it means to be an environmentalist.
This is a really low bar for what it means to be an environmentalist.
This is akin to saying that socialism is about promoting justice, and who isn't for justice? So how can there be people who say they aren't socialists?
People may agree in principle on what the end goal is, but disagree about the method to get there. Today the "environmentalist" is a political label like "liberal", "feminist" etc. It has a simple surface meaning but also comes with a lot of connotations and baggage, so that not everyone is comfortable pinning it on themselves.
People may agree in principle on what the end goal is, but disagree about the method to get there. Today the "environmentalist" is a political label like "liberal", "feminist" etc. It has a simple surface meaning but also comes with a lot of connotations and baggage, so that not everyone is comfortable pinning it on themselves.
So true.
[deleted]
Hopefully everyone with move to Ethereum and other Proof of Stake coins.
(Both for the environment, and my wallet since I'm already deep in Eth)
(Both for the environment, and my wallet since I'm already deep in Eth)
Proof of stake is not secure in the same way as proof of work. Miner collusion attacks are free in PoS, expensive in PoW.
It's only "free" if you get a substantial fraction of the coin's total wealth backing your attack.
And it's not really "free", because you'd instantly devalue the currency itself (and thus your own stake).
And it's not really "free", because you'd instantly devalue the currency itself (and thus your own stake).
When Starlink is going to be fully deployed the internet would be impossible to censor and the bitcoin will be way more valuable.
The Internet is already damn hard to censor if you're tech-savvy, and Bitcoin isn't really censored very many places.
"It is difficult to get a man to understand something, when his salary depends on his not understanding it."
This article is a joke written by the co-founder of Coin Metrics, a blockchain analytics startup. How he is not biased?
Explaining that we are lucky to have bitcoin because China is wasting unused electricity...
Explaining that we are lucky to have bitcoin because China is wasting unused electricity...
I'm sorry, I had to stop reading at "Second, metrics like the “per-transaction energy cost” are misleading because transactions themselves do not cost energy".
Yes, this is technically 100% accurate. However it's also 100% missing the point, since for the transaction to be globally accepted, a hash needs to be mined.
To paraphrase a few memes, "they're technically right, but they're being an asshole about it."
Yes, this is technically 100% accurate. However it's also 100% missing the point, since for the transaction to be globally accepted, a hash needs to be mined.
To paraphrase a few memes, "they're technically right, but they're being an asshole about it."
Sure, maybe they want to diversify but that's a hell of a lot of money to throw at such a volatile commodity.