The Bitcoin Energy Argument That Nobody Makes

I'd like to take this article seriously, but it's missing a ton of punctuation which leads me to believe it never got proofread...

Isn't it possible to rate limit grid customers based on their use patterns? Couldn't sensible local policies prevent industrial miners from increasing power costs for residential users?

I think most people want to prevent emissions, but the following line of argumentation is getting old:

Green energy? Not good enough.

Stranded energy? Not good enough.

Stranded green energy? Not good enough.

I actually agree that the carbon-intensiveness of the power source is no more relevant for Bitcoin than it is for any other use of energy. We use energy to do things we think are valuable. All of us do. If the distribution of costs and benefits of using that energy is out-of-whack, then our focus should be on aligning them better. Carbon-intensive energy use in many ways does a bad job of aligning those costs and benefits, (though I think that case is generally overstated). So, at least some uses of energy produce value, and we should focus on making sure that those who derive that value also bear the cost.

The real issue with the article happens here: 'It should rather be: “Is it worth it?”. I answer this question with a clear: Hell no.' But it's anything but clear. The article treats it as an accepted truth that the benefit isn't proportional to the cost. It's not an accepted truth. Millions of people have determined that the value of what PoW blockchains do is worth using some energy to make it happen. Does the author derive a great deal of value from the Bitcoin blockchain? Clearly not. So don't use it. Just because one doesn't derive any benefit from a particular use of energy doesn't imply that nobody does or that nobody should. There are exajoules of energy used to do things that I derive 0 value from. I use energy in a manner that many would consider to be frivolous. There's no objective function to determine the utility of a particular use of energy. Should the costs be borne by the same people who derive the benefit? Absolutely. Should we treat as implicitly accepted that a particular use of energy is frivolous and should be stopped? Not if you care about your own ability to use energy to do things you think are valuable.

Isn't the root issue that money itself is an "inefficient" allocation mechanism for scarce resources?

The theoretical economics idea seems to be that it's some sort of voting system. But it's a voting system in which I have a thousand times more votes than someone else.

If a fairly well off person thinks that X is worth doing, they have an outsized say in whether we use energy on X. And probably, if X has anything to do with business or investment, this advantage accumulates.

I agree with the article in principle as a result of the above argumentation but I'm still not convinced that it leads us to a situation in which Bitcoin is somehow something special. You could make the same argument for essentially anything that has market demand.

If you're going to have some central planning actor decide that Bitcoin is a waste of energy then I don't see how you can avoid the conclusion that me taking a holiday is, that plastic fidget spinners are, etc etc.

You end up in the coronavirus 2020 "what is essential" situation really quickly.

I sometimes wonder if there's a misgiving that Bitcoin is somehow set up to eventually use "all energy". This is incorrect, because the amount of mining that will occur is governed by transaction fees. Logically a person is never going to spend 100% of their wealth on simply transferring bitcoin from one place to another.