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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

#111

Post by kingo55 »

ardy42 wrote: post #95
ballenf wrote: post #60

Earlier quoted context omitted.

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…

>> 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 (…

> When bitcoin gets more efficient or energy cheaper, the amount of bicoin "work" done stays constant...

Not quite. The extra work it does allows the network to secure itself better. We don't have to agree with this energy use, but it does do something.

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

#112

Post by wskinner »

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…

What is the marginal environmental impact of a company adding 1BTC to its balance sheet?

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

#113

Post by chordalkeyboard »

unethical_ban wrote: post #105
ur-whale wrote: post #72

Earlier quoted context omitted.

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…

> BTC provides no value other than being a store for value.

And exchange medium.

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

#114

Post by wrinkl3 »

my123 wrote: post #27
wmf wrote: post #14

Earlier quoted context omitted.

Gaming and computer hardware is ruthlessly optimized to be as energy-efficient as possible while Bitcoin mining is specifically designed to waste energy even though more efficient ways (PoS) exist. Cable boxes used to waste massive amounts of energy (because GI/SA don't pay your power bill) and eventually the government stepped in to force efficiency. So no, Bitcoin isn't being unfairly singled out for criticism.

Mining through aka PoW at least does redistribution. PoS means that current owners just get more and more *coin.

Not really. In PoW you convert money into electricity, then use that electricity to claim mining rewards. In PoS you lock down your money, then use it to claim minting rewards. The two are not fundamentally different, PoS just skips the "convert into electricity" part.

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

#115

Post by mrits »

3np wrote: post #51
mrits wrote: post #40

Earlier quoted context omitted.

Are you sure about that? Do you not think the mining is extremely concentrated by a handful of big players and is going to become increasing more so as the hardware needed is becoming more difficult to obtain?

This is a bit of a myth. The actual mining is very fragmented and so are the Chinese mining pools.

There is an appearance of fragmentation. If you look at the order from the supply chain it would lead you to believe this is not the case. It's not going to be even be easy for anyone in retail to get an ASIC miner for the foreseeable future.

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

#116

Post by gruez »

Guvante wrote: post #71
ArtTimeInvestor wrote: post #56

Earlier quoted context omitted.

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…

>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.

I disagree. Gold was specifically chosen to be rare and hard to counterfeit. That's why we don't use sea shells as a store of value. In that respect I don't see how awarding value to holders of a shinny yellow metal is any different than awarding value to holders of a hard to find hash.

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

#117

Post by paulgb »

gruez wrote: post #110
paulgb wrote: post #94

Earlier quoted context omitted.

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.

Yes, I think they should.

The difference between this and a tax is that it’s not done by the government, but for what it’s worth I don’t oppose that either.

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

#118

Post by dang »

The other thread (which now points to the original source) is here: https://news.ycombinator.com/item?id=26091536. There are paywall workarounds posted in the comments.

I don't know if it makes sense to merge these threads, because the point about environmental impact is mostly just a side comment in the original article.

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

#119

Post by paulgb »

kingo55 wrote: post #111
ardy42 wrote: post #95

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 (…

> When bitcoin gets more efficient or energy cheaper, the amount of bicoin "work" done stays constant... Not quite. The extra work it does allows the network to secure itself better. We don't have to agree with this energy use, but it does do something.

Do you believe the Bitcoin network would be insufficiently secure if miners were incentivized only by the transaction fees and not the block rewards?

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

#120

Post by mithr »

ur-whale wrote: post #83
hannob wrote: post #61

Earlier quoted context omitted.

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

You're right to focus on the really important issues, it is clearly Bitcoin that's going to ruin it for us all and it should be an absolute priority on every self-righteous internet user's agenda. Oh, btw, did you heat your house today? Or did you happen to drive a car? Or did you fly in a plane prior to COVID? How much fossil fuel was burned to move your 80-ish kg from point A to point B in the air? Energy consumpti…

Does you personally heating your house, or driving a car, or flying planes, for a year match the energy consumption of an entire country?

> At current rates, bitcoin mining uses the same amount of energy every year as the Netherlands did in 2019

Part of the problem is certainly in how the energy is produced. But another part of the equation is that this store of value, by itself, adds very significant amounts of consumption to that growth curve you mentioned.

Wish as we may that we could just snap our fingers and switch to clean energy, realistically that will not happen in the near future. Meanwhile, bitcoin mining will continue to consume as much energy annually as entire countries, and much of that energy will come from non-clean energy.

I'm not saying "let's burn bitcoin", or saying that I have a way out of this situation. But it's either a bit disingenuous or a bit naive to compare personal use of electricity to that of bitcoin's, in order to imply that only "self-righteous internet users" need to concern themselves with it.

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