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Nouriel Roubini: Bitcoin is not a hedge against tail risk

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Re: Nouriel Roubini: Bitcoin is not a hedge against tail risk

#151

Post by guenthert »

yladiz wrote: post #56

I'm very conflicted about this. On one hand, I have a little bit of Bitcoin and am happy about some of the gains I've gotten (not life changing in any sense, but more than I expected). On the other hand I hesitated for a long time to buy any because I knew of the large environmental impact that its energy use has (yes, I really did avoid buying Bitcoin for a long time because I roughly knew of the environmental/energ…

> Curious what HNers think about this - is it bad to have Bitcoin in light of how bad the environmental impact is

Having them actually has no or negligible impact. Unfortunately getting rid of them is a transaction which will incur an unreasonable cost to the environment. The best thing might be to destroy them (the media they're stored on). And no, nobody expects you to do so.

I'd would sell them before they get banned, as they must.

Re: Nouriel Roubini: Bitcoin is not a hedge against tail risk

#152

Post by bustin »

SideburnsOfDoom wrote: post #140
bustin wrote: post #136

Earlier quoted context omitted.

I could have been more specific, you're right! I believe the value of cryptocurrency is to neuter governments' abilities to inflate or devalue currency with the push of a button, and to improve our ability to transact freely with one another. I absolutely agree with you that money needs limitations, such as hard rules on supply increases. A money supply that is uncontrolled in such a way that you can make more or les…

> I believe the value of cryptocurrency is to neuter governments' abilities to inflate or devalue currency with the push of a button Central banking is necessary function of government. If government saw their ability to do it being actually "neutered" then it would get shut right down. I am not saying that it can't be mismanaged by a state, but you do not have anything better than state fiat money. > personally thin…

>I am not saying that it can't be mismanaged by a state, but you do not have anything better than state fiat money.

I agree with this! At the moment I don't see many things that are better yet. I hope to see an obvious winner someday.

EDIT: For the record, I hold no Bitcoin. While it has a lot of potential value in creating Freedom To Transact, I'm not convinced the current price per unit is anything but a Pump and Dump. If Bitcoin is a Constitution of Money, it's a pretty fucked up one.

Re: Nouriel Roubini: Bitcoin is not a hedge against tail risk

#153

Post by coralreef »

variaga wrote: post #106
coralreef wrote: post #46

Funny trend: solar and wind power are now cheaper than coal. https://ourworldindata.org/uploads/2020/11/Price-of-electric... Here's a hot take: Bitcoin subsidizes clean energy development. Miners buy cheap energy; clean energy infrastructure gets profitable return. Cost of development and manufacturing lowers further because of scale; pollution and externalities reduced; humanity wins. Bitcoin saves humanity?

Electical power is fungible and an increase in demand for any power increases the profitability of all existing sources of power including coal, reducing the rate at which fossil-fuel power sources will be replaced. The idea that consuming more power is good for the environment is not supported by the evidence. Or any evidence.

Electricity product from a coal plant vs a solar farm is the same, but its costs are not.

The cost per kwh from a coal plant has not changed in 10 years. Solar has seen massive reductions and is cheaper than coal. Consuming more solar power is gives more profit to the solar power industry. I'm ok with that.

Re: Nouriel Roubini: Bitcoin is not a hedge against tail risk

#154

Post by pcthrowaway »

ad31mar wrote: post #55

So much anti-Bitcoin sentiment on HN lately, recycling decade old strawman arguments. Does the Occam's razor apply here? Are people just salty they didn't buy a few back when they first heard about it, now trying to justify themselves?

What is the strawman here? I've had bitcoin since 2012, and this wasn't as much of a pressing issue back then. Perhaps blindly, I then believed it had the potential to serve as a global, decentralized, stateless currency. I still want those things, but bitcoin transaction fees have gotten too high for it to make sense as a currency for the majority of real-world transactions. There's no solution there. And as a store of value it poses a real threat to the planet. There are better technologies now; the only real advantage bitcoin has , is wider acceptance by people and institutions as a payment mechanism, due to its longer history. But, with the transaction fees being what they are, and the potential for innovation with Ethereum and other more sophisticated cryptocurrencies, that's bound to change over the next few years.

I honestly don't understand how people can continue to defend it. The only explanation I can think of is that the masses who showed up to the party late don't care if it's gotten out of hand and is now in danger of trashing the place or setting the building on fire. They just made the trip out there.

Re: Nouriel Roubini: Bitcoin is not a hedge against tail risk

#155

Post by Ecstatify »

mamon wrote: post #135
Ecstatify wrote: post #84

Earlier quoted context omitted.

Don’t agree with what he says let’s attack his intellect... “originates from the fact that it escapes his alleged ‘expertise’” “he’s basically clueless on the topic”

He says that bitcoin has "no intrinsic value" and he's wrong about that, because value of something is not decided by financial experts, but by people willing to pay for it (even if those people are criminals looking for new ways to launder their money). He has also been predicting that "Bitcoin bubble will burst" for the past few years, and he's been wrong about it so far. So yes, I would say he is clueless when it…

Fiat currencies have no intrinsic value so how is Bitcoin different?

It crashed in 2018, it lost 65% of its value.

Re: Nouriel Roubini: Bitcoin is not a hedge against tail risk

#156

Post by tspike »

Nasrudith wrote: post #95
tspike wrote: post #25

Earlier quoted context omitted.

No, but the way we measure value is so flawed that it can seem that way. Consider how we define poverty. Suppose we discover an as-yet unknown group of people who have been using traditional farming methods to sustain themselves in the same area for thousands of years. How would you classify them economically? Are they in "abject poverty", the same as a group whose traditional means of sustenance have been destroyed…

As a very low but presumably stable level of income of course. Almost certainly would be abject poverty if they still had a small population after thousands of years along with presumambly genetic issues from isolation and a population size small enough to not be detected. That classification would be vwey correct despite having first world romanticized "sustainable farming" and "traditional means of sustance". They…

I suppose the value judgment is between "very low but presumably stable income with small positive net worth" versus "very high but extremely unstable with massively negative net worth."

Re: Nouriel Roubini: Bitcoin is not a hedge against tail risk

#157

Post by bryanlarsen »

coralreef wrote: post #148
bryanlarsen wrote: post #130

Earlier quoted context omitted.

There is already massive demand for energy, and massive investments in reducing the cost of energy, especially green energy. Scaling benefits come from order of magnitude increases in demand, not single digit percentage increases in demand.

So then does that make Bitcoin a huge energy wasting problem to worry about, or an insignificant toy in the bigger picture?

A single digit percentage of a massive number is still a massive number.

Re: Nouriel Roubini: Bitcoin is not a hedge against tail risk

#158

Post by rbancroft »

coralreef wrote: post #46

Funny trend: solar and wind power are now cheaper than coal. https://ourworldindata.org/uploads/2020/11/Price-of-electric... Here's a hot take: Bitcoin subsidizes clean energy development. Miners buy cheap energy; clean energy infrastructure gets profitable return. Cost of development and manufacturing lowers further because of scale; pollution and externalities reduced; humanity wins. Bitcoin saves humanity?

I also read somewhere that the majority of the bitcoin "engine" was located close to renewable power sources that did not otherwise have good markets to sell their power.

Whether that's actually true or not, the possibility that bitcoin could find the low cost renewable sweet spots throughout the worlds power grid and make use of them is interesting and helps to address the efficiency criticism.

I think I'm still overall anti-bitcoin but I am questioning my assumptions.

Re: Nouriel Roubini: Bitcoin is not a hedge against tail risk

#160

Post by ipnon »

jonny_eh wrote: post #54
ipnon wrote: post #41

Earlier quoted context omitted.

Carbon taxes also wouldn't make Bitcoin worthless. You can easily imagine Bitcoin mines powered by solar. Many already are, in order to capitalize on the cheap energy. The article posted in the OP is specious.

Solar power isn't necessarily free of externalities though. Once you run out of roofs to install them on, you then need to use up land.

The point is that Bitcoin isn't inherently carbon positive. It's carbon positivity depends on the power source used to mine it and carbon neutral power becomes cheaper and more available every day.
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