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Bitcoin miners are buying power plants

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Re: Bitcoin miners are buying power plants

#381

Post by malka »

roenxi wrote: post #359
arcticbull wrote: post #261

Earlier quoted context omitted.

About half is used for jewelry because gold is shiny pebbles. About 10% is used for electronics. Mining Bitcoin consumes 5X as much energy as gold, btw, per unit value extracted. It also requires mining gold to produce the circuit boards used for mining Bitcoin - given the popularity of the ENIG immersion gold plating process for PCB contacts. The secondary issue is that of course each Bitcoin transaction generates 1…

There is a really easy solution for this disaster - a trusted party could run a big relational database that was basically a non-inflating currency and really cheap to run. Except that isn't going to work, because governments are untrustworthy and as history shows will sooner rather than later debase their currency. All people are looking for here is a safe way to store value over time. If governments would let peopl…

"a trusted party" does not exist at scale.

Re: Bitcoin miners are buying power plants

#382

Post by etripe »

CTDOCodebases wrote: post #304
imtringued wrote: post #279

Earlier quoted context omitted.

Jewelry is a surprisingly big chunk of global gold demand. Yes it is ultimately meaningless other than to impress other humans, however this meaningless activity is part of human nature. We derive joy from it. Meanwhile Bitcoin is just a means to an end, getting rich quick. The fun doesn't happen because we have Bitcoin, but rather because we get rid of them for an unreasonable price.

It could be argued that people are flocking to Bitcoin not to increase wealth but to preserve it over a long period of time. I don’t know where you live in the world but where I live wages haven’t risen in line with the cost of food and shelter. Leaving money in the bank is like working to buy a block of ice only to watch it melt away. To argue that any store of value isn’t speculative to some degree is naive.

> To argue that any store of value isn’t speculative to some degree is naive.

Isn't there a difference between currency in general being speculative to some degree and cryptocurrencies specifically, whose main value proposition is speculation?

Re: Bitcoin miners are buying power plants

#383

Post by ccortes »

jariel wrote: post #322
bb88 wrote: post #189

Earlier quoted context omitted.

> People mine because it is expensive, it isn't the other way around, so the real questions we should be asking in good faith are things like "Why it is profitable in the first place?" FOMO, mining lotteries, and the guise of financial innovation are typical cover stories here. But all stocks and other publicly traded investments are basically making a bet that others will buy in after you do, raising the price highe…

"Most stock owners hope this very thing, t" Stocks imply ownership of assets. Sure, in terms of 'hoping that someone willy buy' is similar to BTC, but the valuation is completely different. A stock is valued based on the performance of it's actual profit generation. BTC is just a made up number. It's what people think the crowd will buy it for. Granted, this mechanism itself can be useful in some scenarios, but BTC i…

> A stock is valued based on the performance of it's actual profit generation.

I'm not sure that's the case any more. I mean we've seen billion dollar companies that just can't reach profitability.

Re: Bitcoin miners are buying power plants

#384

Post by wayoutthere »

ayngg wrote: post #159
bransonf wrote: post #94

It’s a simple equation: So long as there is more money in mining BTC than there is cost in energy to mine it, mining will proceed. No entity in the world can control the price of crypto. But, we can and already do regulate energy production. I think we need a carbon tax, that is specifically a financial disincentive towards any means of energy production that directly pollutes the atmosphere. Seriously, what are the…

To me it seems like Bitcoin (and other pow cryptocurrencies) are almost like the climate change scapegoat for a number of social and economic issues that have seemingly come to a head recently to facilitate their rise. People mine because it is expensive, it isn't the other way around, so the real questions we should be asking in good faith are things like "Why it is profitable in the first place?" and I think it is…

I think the problem with the whole economy right now is wealth inequality. You have a lot of people really struggling, which keeps overall prices low, but the top 10% or so of earners have more money than they know what to do with. The pandemic cut my expenses by probably $1000/mo in addition to the huge bonus I got last year, I literally have money burning a hole in my pocket.

Where do I invest that cash? Equities are obviously overvalued as an asset class, and treasuries return basically zero, so people are buying up real estate and crypto instead, and using some cash on the side to gamble in the options market. But this really only exacerbates the wealth inequality problem.

Re: Bitcoin miners are buying power plants

#385

Post by drexlspivey »

ddeyar wrote: post #230

I don't know. Eth is switching to PoS. Tezos, cardano and many others are PoS. Is there any plan for bitcoin to switch to PoS? When there are a lot of more environmental friendly crypto alternatives, what should stop governments to ban bitcoin mining?

How do you distribute the initial coins with PoS? Like who gets the first coin? The person who gets the first one will also get all the subsequent ones since he controls all the supply until he sells? How would that even work?

Re: Bitcoin miners are buying power plants

#386

Post by ziml77 »

jstanley wrote: post #349
bransonf wrote: post #94

It’s a simple equation: So long as there is more money in mining BTC than there is cost in energy to mine it, mining will proceed. No entity in the world can control the price of crypto. But, we can and already do regulate energy production. I think we need a carbon tax, that is specifically a financial disincentive towards any means of energy production that directly pollutes the atmosphere. Seriously, what are the…

> if energy were priced correctly ... would BTC become higher in value? ... If energy were to become more expensive, the growth in supply would slow. It doesn't work like that. The consensus algorithm targets 1 block mined every 10 minutes. If the amount of energy expended goes up (i.e. blocks are mined more frequently) then the difficulty increases to counteract it. If the rate of block production decreases, then th…

And this is exactly the problem with Bitcoin. Adding more computational power to the network changes absolutely nothing in terms of the amount of mining completed per unit time. Instead it just shuffles around the chances of being the one to succeed at a block.

This is something that I'm not sure many people actually understand. Because in the physical world, increasing your energy input into mining will result in more output of the resource you're mining. Adding another excavator to your mine doesn't reduce the effectiveness of every other excavator in the world.

Re: Bitcoin miners are buying power plants

#387

Post by jariel »

ccortes wrote: post #383
jariel wrote: post #322

Earlier quoted context omitted.

"Most stock owners hope this very thing, t" Stocks imply ownership of assets. Sure, in terms of 'hoping that someone willy buy' is similar to BTC, but the valuation is completely different. A stock is valued based on the performance of it's actual profit generation. BTC is just a made up number. It's what people think the crowd will buy it for. Granted, this mechanism itself can be useful in some scenarios, but BTC i…

> A stock is valued based on the performance of it's actual profit generation. I'm not sure that's the case any more. I mean we've seen billion dollar companies that just can't reach profitability.

The stock is valued of the basis the net present value of future earnings.

The obvious difficulty there is determining the future earnings (and discount rate).

But that doesn't mean they don't exist - it's a rational premise of valuation.

Amazon is worth a lot because it's a giant machine with $350B in revenues - so investors can quibble over their earnings and 'how much that is worth' in future earnings - but it's based on those numbers.

BTC valuation is just whatever the crowd wants to pay.

A BTC is a magic number, and that's it.

Re: Bitcoin miners are buying power plants

#388

Post by [deleted] »

gverrilla wrote: post #379
jariel wrote: post #320

Earlier quoted context omitted.

No, this is really quite upside down. "People get too caught up on bitcoin because it is new and nobody understands it" We understand it quite well thank you (and it's not new!) - far far more often than not, it's the BTC proponents who don't really grasp what it is, and it's not the 'technical aspects' that are the most salient factors. Bitcoin creates no value. It's 'profitable' to an individual, but not the system…

your understanding of blockchain, nft and crypto is very superficial. do your research better

[deleted]

Re: Bitcoin miners are buying power plants

#389

Post by o-__-o »

malka wrote: post #381
roenxi wrote: post #359

Earlier quoted context omitted.

There is a really easy solution for this disaster - a trusted party could run a big relational database that was basically a non-inflating currency and really cheap to run. Except that isn't going to work, because governments are untrustworthy and as history shows will sooner rather than later debase their currency. All people are looking for here is a safe way to store value over time. If governments would let peopl…

"a trusted party" does not exist at scale.

Including with Bitcoin, since 51% ownership of hash rate is simply a function of who has the most pooled resources (read: money)

Re: Bitcoin miners are buying power plants

#390

Post by etripe »

gverrilla wrote: post #379
jariel wrote: post #320

Earlier quoted context omitted.

No, this is really quite upside down. "People get too caught up on bitcoin because it is new and nobody understands it" We understand it quite well thank you (and it's not new!) - far far more often than not, it's the BTC proponents who don't really grasp what it is, and it's not the 'technical aspects' that are the most salient factors. Bitcoin creates no value. It's 'profitable' to an individual, but not the system…

your understanding of blockchain, nft and crypto is very superficial. do your research better

As written, your comment is neither insightful nor informative. What should jariel have known about, in your opinion? How does that requisite knowledge move the needle towards blockchain or crypto being net positives to society?
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