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$130B wiped off crypto markets in 24 hours

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Re: $130B wiped off crypto markets in 24 hours

#301

Post by matheusmoreira »

hn_throwaway_99 wrote: post #300
matheusmoreira wrote: post #205

Earlier quoted context omitted.

> The amount of electricity needed to protect the network is directly tied to the price of BTC. Why? I keep seeing this claim and it makes no sense to me.

If the price of bitcoin rose to $1 million, but the price to mine one and associated transaction fees stayed at, say, just $20k in electricity costs, don't you think lots of other miners would beef up their rigs to mine bitcoin now? After all, that's like $980k in free money! Of course, they would beef up their rigs (spending commensurately more in electricity), and the required hash difficulty would go up to keep th…

That's a big assumption. Same assumption made in the study which provides the 0.5% world energy consumption figure that everyone is citing. No actual evidence that it is true is provided. The same study shows minimum consumption estimates which are much more reasonable.

Re: $130B wiped off crypto markets in 24 hours

#302

Post by dandare »

soared wrote: post #224
dandare wrote: post #63

Earlier quoted context omitted.

A stable crypto-currency will not attract any investment. Crypto is useless for anything but money laundering and speculation.

I’m no crypto fan but this is just incorrect. Stablecoins exist solely to be stable, look at tether.

You are right. How are they useful?

Re: $130B wiped off crypto markets in 24 hours

#303

Post by hn_throwaway_99 »

matheusmoreira wrote: post #301
hn_throwaway_99 wrote: post #300

Earlier quoted context omitted.

If the price of bitcoin rose to $1 million, but the price to mine one and associated transaction fees stayed at, say, just $20k in electricity costs, don't you think lots of other miners would beef up their rigs to mine bitcoin now? After all, that's like $980k in free money! Of course, they would beef up their rigs (spending commensurately more in electricity), and the required hash difficulty would go up to keep th…

That's a big assumption. Same assumption made in the study which provides the 0.5% world energy consumption figure that everyone is citing. No actual evidence that it is true is provided. The same study shows minimum consumption estimates which are much more reasonable.

I'm not assuming anything.

There is a guaranteed deep correlation between BTC price and amount of electricity needed to run the BTC network. That is the way proof of work is designed to function. I.e the whole way it protects against a 51% attack. There is simply no getting around this.

Re: $130B wiped off crypto markets in 24 hours

#304

Post by rjmunro »

0x0 wrote: post #202
asimpletune wrote: post #181

Earlier quoted context omitted.

I could be wrong about this, but I don't know if the energy requirements have anything to do with the price (I.e. demand) for the coin, does it? I was under the impression that the problems that you have to solve get predictably more difficult, and they're more of a function of time than price. But yes, with your point overall I agree, like in 10 years or something it doesn't seem workable without major changes. Wasn…

I guess if the price of BTC goes up, then it makes it more "worth it" to throw more energy at mounting a double-spend attack, and therefore the energy needed to protect the network against such an attack also goes up?

It's much simpler than that. If the price of BTC goes up, it's worth spending more on electricity to mine it.

If 1 coin costs $50,000, and you already own the rig, it's worth spending $49,999 on electricity to mine the next coin and you will make a profit. If you're rig can't do that, you're better off just turning it off.

Re: $130B wiped off crypto markets in 24 hours

#305

Post by matheusmoreira »

hn_throwaway_99 wrote: post #303
matheusmoreira wrote: post #301

Earlier quoted context omitted.

That's a big assumption. Same assumption made in the study which provides the 0.5% world energy consumption figure that everyone is citing. No actual evidence that it is true is provided. The same study shows minimum consumption estimates which are much more reasonable.

I'm not assuming anything. There is a guaranteed deep correlation between BTC price and amount of electricity needed to run the BTC network. That is the way proof of work is designed to function. I.e the whole way it protects against a 51% attack. There is simply no getting around this.

There is a relationship between mining difficulty and energy consumption. What I don't see is the correlation between price and mining difficulty. By this logic, mining activity should be way down right now.

Re: $130B wiped off crypto markets in 24 hours

#306

Post by smaryjerry »

tootie wrote: post #109
Hokusai wrote: post #12

That's all the point of crypto-currencies, they need to go up and down to enable speculation. Pump and make it go up. Dump and it goes down. Someone is cashing the difference. A stable crypto-currency will not attract so much speculative investment.

That isn't the point. They're supposed to be stable to be usable as currency. Using them as an investment class is a very off-label use that has emerged.

This sentiment is exactly why it hasn’t worked yet. Yes bitcoin is a currency hence the “coin” in its name but a lot of crypto is not. This is a failure in education in the community and also a failure by the US government to correctly classify the different types of crypto, and essentially label every blockchain as securities when only a few even approach being securities. In their desire to collect tax, they have completely mistaken one thing for another. In the same way the US hasn’t figured out that “tech” isn’t one sector of the economy but actually has 100s of new industries each of which are extremely unique. Facebook and YouTube are not two competitors just because they both are software with ads, they each exist in their own industry and monopolize their industry. You wouldn’t consider TV broadcasting and radio the same industry even though they are both forms of media. Crypto is the same, there is just so much unique software that is being miscategorized.

Re: $130B wiped off crypto markets in 24 hours

#307

Post by CryptoPunk »

soared wrote: post #216
CryptoPunk wrote: post #188

Earlier quoted context omitted.

I have no idea what future crypto prices will do, but you do realize that smart contracts allow people to bank, from their browser with nothing but a MetaMask extension, without a bank, right? There's heavy dose of speculation present in any emerging market, but crypto, especially its smart contract sector, is not just speculation.

A digital wallet that can trade isn’t banking though. Can you direct deposit, pay rent, be fdic insured, etc with that solution?

Right now, no, but in principle, yes. You can effect transactions. Everything else is just a matter of adoption.

Re: $130B wiped off crypto markets in 24 hours

#308

Post by CryptoPunk »

tomp wrote: post #254
CryptoPunk wrote: post #188

Earlier quoted context omitted.

I have no idea what future crypto prices will do, but you do realize that smart contracts allow people to bank, from their browser with nothing but a MetaMask extension, without a bank, right? There's heavy dose of speculation present in any emerging market, but crypto, especially its smart contract sector, is not just speculation.

Wasn't there an article recently, that basically revealed that "from their browser/device" basically means just using the API to access the blockchain? So you're still using "a bank", just that the bank is the API provider. A bit more modern, but not a game changer.

MetaMask allows a user to use any Ethereum node as their API endpoint, and by default uses a professional node provider, Infura, since most users don't run their own node.

But there is no lock-in with or substantial dependence on Infura, because the private keys to your assets are stored on your own computer, or hardware wallet. The data Infura provides is public, and any node, including your own, can provide it.

Re: $130B wiped off crypto markets in 24 hours

#309

Post by immibis »

asimpletune wrote: post #181
hn_throwaway_99 wrote: post #146

Earlier quoted context omitted.

The thing about Bitcoin specifically, though, is that there are only really 2 possible outcomes: 1. The world decides it's "tulips" at some point, and the value goes to 0. 2. The world decides it will be a major part of the financial system, and it goes to 500k or 1 million. Basically, anything in between is just a probability calculation of whether it will end up at one end or the other. The problem with this, thoug…

I could be wrong about this, but I don't know if the energy requirements have anything to do with the price (I.e. demand) for the coin, does it? I was under the impression that the problems that you have to solve get predictably more difficult, and they're more of a function of time than price. But yes, with your point overall I agree, like in 10 years or something it doesn't seem workable without major changes. Wasn…

If the energy demand is less than the mining reward, you can profitably mine it.

Re: $130B wiped off crypto markets in 24 hours

#310

Post by Swenrekcah »

ulzeraj wrote: post #153
dtech wrote: post #100

Earlier quoted context omitted.

Bitcoin and other cryptocurrencies have ~zero inherent value, due to their non-speculation use-cases like payment being very limited or still early development (smart contracts). Unless you count BTC in black market I guess. USD has inherent value, it's the only currency where you can pay taxes in, and if you want to do business with government or government employees - who are ever only paid in USD - you must accept…

There is no such thing as inherent value. Value is subjected to the individual who makes decisions on the margin.

Maybe there isn’t inherent value in currencies, which crypto is not.

In assets there is can of course be inherent value (food, a sturdy house, land, etc.).

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