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Bitcoin's fundamental value is negative given its environmental impact

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Re: Bitcoin's fundamental value is negative given its environmental impact

#71

Post by Guvante »

ArtTimeInvestor wrote: post #56
paulgb wrote: post #31

Earlier quoted context omitted.

This would be a reasonable stance if Bitcoin were just another activity, but it’s unique in its energy profile. What other technology is designed so that energy efficiency improvements are absorbed and nullified (through the difficulty adjustment mechanism)?

No design needed. If the price of gold doubles, twice as much resources can be invested to dig up a ton of gold.

Gold has an intrinsic additional cost to acquiring that is unrelated to humans. There exist deposits that are harder to get to in the world and it isn't currently economically viable to extract them. This isn't mankind's doing it is just a truth of the world.

Bitcoin adds artificial scarcity that isn't intrinsic. And unfortunately society as a whole pays for that additional scarcity by increasing the resources spent mining blocks.

I am not saying this is an unacceptable trade-off all things considered. I just think the gold analogy is flawed.

Re: Bitcoin's fundamental value is negative given its environmental impact

#72

Post by ur-whale »

AlexandrB wrote: post #44

I'm a Bitcoin skeptic, but mentioning "fundamental value" when talking about currency seems incongruous. The "fundamental value" of bitcoin is whatever people think it's worth. Just like USD.

The "fundamental value" of anything is whatever people think it's worth.

I have a very hard time understanding why people can't wrap their heads around this very basic concept.

It's just a restatement of the law of supply and demand.

Re: Bitcoin's fundamental value is negative given its environmental impact

#73

Post by insert_coin »

Bitcoin or anything really should be allowed to use however much energy it is economically feasible. The real question is, why is there no better use for that electricity than to compute numbers? How our economies became so stagnant the best return for capital investment is bitcoin?

Bitcoin was designed in part as a challenge to the monetary system, but it has ended up shining a light onto a much bigger problem: the economy itself is broken, it is sick, energy usage is just one of the symptoms. Resources in most industries are being wasted so much investors see no value in generating 'real' productivity. Hence the demand for cryptocurrencies.

Re: Bitcoin's fundamental value is negative given its environmental impact

#74

Post by ur-whale »

ChuckNorris89 wrote: post #54
mrits wrote: post #38

Earlier quoted context omitted.

What do you use physical money for?

In my area of Europe: Buying things at stores and shops that don't take card payments for one. Buying weed for another. Buying/selling small things in person, think garage sales, or even buying second hand cars.

Can't buy a car in many European countries with cash these days.

The iron grip of the governments there is getting a lot tighter.

Re: Bitcoin's fundamental value is negative given its environmental impact

#75

Post by cesarb »

thebean11 wrote: post #19
wmf wrote: post #9

Earlier quoted context omitted.

Bitcoin will never change. In the future we'll probably see large amounts of BTC wrapped on Ethereum/Avalanche for DeFi trading.

Bitcoin has undergone pretty massive updates in the last few years. Proof of stake doesn't seem that far fetched honestly.

AFAIK, none of the Bitcoin updates in the last few years is a "hard fork", that is, old nodes can still process valid blocks made by new nodes (though they might accept blocks which new nodes would reject). Changing from proof of work to proof of stake would require a hard fork.

Re: Bitcoin's fundamental value is negative given its environmental impact

#76

Post by insert_coin »

jes wrote: post #63
AlexandrB wrote: post #44

I'm a Bitcoin skeptic, but mentioning "fundamental value" when talking about currency seems incongruous. The "fundamental value" of bitcoin is whatever people think it's worth. Just like USD.

I agree with your example. I think the problem, though, is with the concept of value itself. To my knowledge, the value of something is necessarily a personal assessment that individuals 1) make for themselves and 2) by a process that they do not and can not fully comprehend.

Price is what you pay but value is what you get.

As Warren Buffett (I think) once said.

Re: Bitcoin's fundamental value is negative given its environmental impact

#77

Post by johnsimer »

lai-yin wrote: post #39
stouset wrote: post #34

Earlier quoted context omitted.

Precisely. Without Bitcoin, we could be retiring coal plants with the additional solar and wind that have been coming online. Instead, every additional Watt-hour we generate is used to mine Bitcoin on top of existing demand.

That's an absurd argument. And as long as we're using solar and wind, we'll need backup from coal, gas and nuclear for when the sun isn't shining and the wind isn't blowing. If you think increasing battery capacity will solve that, read up on the supply chain of lithium.

lithium is now barely used in the latest battery tech. See Tesla

Re: Bitcoin's fundamental value is negative given its environmental impact

#78

Post by dragontamer »

legutierr wrote: post #57
dragontamer wrote: post #41

Earlier quoted context omitted.

Coal is a baseload generator. It cannot ramp up or down very easily. Nuclear is mostly baseload... not so much because its impossible to ramp-down nuclear, but because nuclear's initial-investment (site planning / engineering / regulations) are the bulk of its costs. Ongoing costs (ie: fuel) are miniscule. There's "no point" ramping down Nuclear, given its miniscule fuel costs. Might as well keep pumping electricity…

What about hydroelectric? Is it not possible to ramp up and down there?

Hydroelectric is great, but only when the geography + local water usage agrees with the construction project.

For places like California which is facing a shortage of Water, Hydroelectric is a weaker option. Ex: if you run a dam in reverse for Pumped Storage, that implies sucking up the precious water from the lower-reservoir back up to the upper side.

Realistically speaking, the near term future is Solar + Gas peakers. We should build out as much Hydro-electric as possible, but most good river sites are already built out. (IE: Rivers which have a large change in elevation to make a Dam project actually worthwhile).

Re: Bitcoin's fundamental value is negative given its environmental impact

#79

Post by insert_coin »

hannob wrote: post #61
frongpik wrote: post #43

Someone's really serious about pushing the "bitcoin is bad" narrative. Too many articles like that recently. Nevertheless, upvoting because HN should see this.

Maybe it's, you know, people caring about a livable planet. The "Big survival of humanity" lobby.

Energy is a big part of that. We need as much electricity as possible to combat the effects of climate change.

Re: Bitcoin's fundamental value is negative given its environmental impact

#80

Post by probe »

ArtTimeInvestor wrote: post #56
paulgb wrote: post #31

Earlier quoted context omitted.

This would be a reasonable stance if Bitcoin were just another activity, but it’s unique in its energy profile. What other technology is designed so that energy efficiency improvements are absorbed and nullified (through the difficulty adjustment mechanism)?

No design needed. If the price of gold doubles, twice as much resources can be invested to dig up a ton of gold.

This is also literally how oil/fracking projects work and are decided
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