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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

#101

Post by panax »

ballenf wrote: post #60
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)?

Bitcoin is far from unique in this. When gas prices fall people have been shown to drive more. And buy less efficient cars and drive them less efficiently (faster, more aggressively). When water prices are lower people water their lawns more and take more baths. When shipping ePackets from China is cheap, people buy more stuff from there. I just don’t see how Bitcoin responding to supply and demand is different from…

Yes this is known as Jevon's paradox and is not unique to these situations

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

We can't simply just rely on improvements in efficiency to solve these problems.

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

#102

Post by gegtik »

I think its wild that when the absurd energy consumption curve of bitcoin used to be brought up the defense was "you're blowing it out of proportion", whereas now it's "so what.. don't you have a fridge?"

(Same pattern I recall about climate change, ice caps melting, etc. Deny until it's impossible and then dismiss instead)

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

#103

Post by tomjen3 »

ballenf wrote: post #60
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)?

Bitcoin is far from unique in this. When gas prices fall people have been shown to drive more. And buy less efficient cars and drive them less efficiently (faster, more aggressively). When water prices are lower people water their lawns more and take more baths. When shipping ePackets from China is cheap, people buy more stuff from there. I just don’t see how Bitcoin responding to supply and demand is different from…

But when gas prices fall people either move those savings to cheaper, less efficient cars or get more satisfaction out of their driving?

Whereas there is very little change in the bitcoin mining, unless you have fetish for long zeros in hash values.

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

#104

Post by robomartin »

Me1000 wrote: post #26

My problem with these takes is that they're missing the forest through the trees. I don't believe you'll ever be able to solve climate change by shaming people based on their usage of electricity. The problem is not HOW people use electricity, it's how the electricity itself is generated. The electricity might be used to draw triangles on my screen, hash some value, keep me warm in my apartment, or make my car move;…

The problem is more fundamental than that. We cannot solve climate change by subtraction (eliminating things, usage, consumption, fuels, factories, etc.). We know this with absolute certainty through at least 800,000 years of highly accurate ice core atmospheric data.

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

#105

Post by unethical_ban »

ur-whale wrote: post #72
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.

I think there is some nuance. The fundamental value of wheat is linked to its ability to feed people. In other words, it has concrete qualitative value to human existence, with natural scarcity.

BTC's scarcity is set by algorithm and BTC provides no value other than being a store for value.

USD's scarcity is set by the printers and databases at the Federal Reserve, and its value is derived from the faith that the US economy and government will honor its value.

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

#106

Post by the_cat_kittles »

Me1000 wrote: post #81
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)?

This is both a good and a fair critique of bitcoin. But I don't understand the endgame. Should the use of bitcoin be banned or just shamed? Let's assume for a moment that I live "off the grid" and run my full BTC node using my own solar power. Is that something that should be banned? Should it be shamed? I don't know where to draw the line.

banning bitcoin would be fine with me, because i think the tradeoff is a bad one.

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

#107

Post by nemo44x »

nprz wrote: post #42

This is the 3rd story I've seen on the front page today about the environmental impact of mining BTC. Interesting.

I’m thinking a decent amount of people missed the boat on it, are currently seeing the reality of the new economy unfolding and realizing they aren’t going to be one of the winners in it. And that their power games don’t work here.

I think what scares some well connected people that could use politics to influence things is that the people who got behind this revolution don’t need them now. We chose not to play that game anymore and made a new game that doesn’t care about the rules they (the well connected in journalism, universities, think tanks, lobbies, corporations, activists, etc) corrupted.

You have to understand what a threat this is as millions of individuals will be able to more or less remove themselves from the system and just not participate in their political power game. Financial independence is a threat.

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

#108

Post by stouset »

insert_coin wrote: post #87
stouset wrote: post #28

Earlier quoted context omitted.

Even if we accept this argument at face value, every Watt-hour of hydro or solar that goes to mining Bitcoin could have been used to reduce demand for power generated from fossil fuels. Power generation isn't perfectly fungible, but it's enough so that this argument falls completely on its face. I wish people would stop making it. Bitcoin is an environmental disaster.

You are wrong. A lot of solar is being built because of bitcoin, they are not taking energy away from other enterprises but adding renewables to the pool. The good thing is all are benefiting, now solar is becoming economically feasible as an alternative to oil for example, that wouldn't have happened so soon without the demand from bitcoin.

> A lot of solar is being built because of bitcoin

A lot of solar would be built with or without Bitcoin. If the cost to build and operate solar is cheaper than the cost to operate fossil fuel plants, it will get built regardless of Bitcoin's existence.

> they are not taking energy away from other enterprises but adding renewables to the pool

Only if you assume that a virtually all of that solar wouldn't have been built without the existence of Bitcoin.

> now solar is becoming economically feasible as an alternative to oil for example, that wouldn't have happened so soon without the demand from bitcoin.

[citation needed]

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

#109

Post by legutierr »

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.

Isn't this a tautology, though? Isn't the definition of value, "whatever people think something is worth?"

It's good to be reminded that value emerges from individual decisions made by individual traders that collectively form a market. Still, there is also benefit in understanding whether there is some external objective reality that is influencing those decisions.

Sometimes, value decisions are arbitrary or irrational—but over time, value decisions tend to be rational and based on underlying fundamentals of the thing in question, do they not?

People who buy and sell things have the same mental capacity, after all, as the observers who are on the outside asking about the "fundamental" utility of the thing to which value is being assigned.

Wouldn't the people who have something at stake in a transaction have more incentive to develop a theory of underlying value than would disinterested observers? If they do develop a theory of underlying value, wouldn't that theory guide their pricing decisions when buying and selling?

And if so, how is the "fundamental value" of a thing distinct from the aggregated theories of value that buyers and sellers of that thing hold over its lifetime? Accurately assessing this "fundamental value" might not help you as a short-term trader, but it surely can improve the decision making of a long-term investor, no?

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

#110

Post by gruez »

paulgb wrote: post #94
Me1000 wrote: post #81

Earlier quoted context omitted.

This is both a good and a fair critique of bitcoin. But I don't understand the endgame. Should the use of bitcoin be banned or just shamed? Let's assume for a moment that I live "off the grid" and run my full BTC node using my own solar power. Is that something that should be banned? Should it be shamed? I don't know where to draw the line.

This is a great question and I don’t have all the answers, but I’d at least like to see CEOs who put it on their balance sheet put to task for it. E.g. putting it on your books should be penalized by ESG funds. Elon Musk shouldn’t get away with greenwashing it through Tesla’s (possibly overrated anyway) environmental halo. Nor should California taxpayers be subsidizing electric vehicles if the carbon benefits are neg…

>This is a great question and I don’t have all the answers, but I’d at least like to see CEOs who put it on their balance sheet put to task for it

Should CEOs who put gold on their balance sheets be put to task for the environmental damage that causes? Should companies that buy conflict minerals be put to task for that as well? If so, you're just describing a pollution tax.

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