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Bitcoin's vast energy use could burst its bubble

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Re: Bitcoin's vast energy use could burst its bubble

#111

Post by capableweb »

throwawayQuwcy wrote: post #28
capableweb wrote: post #15

What about if the supposed "bubble" lasts until it's unfeasible to continue mining on the same speed as now? Eventually, bitcoin will have been mined, and then there is no need for as much mining, depending on transaction fees only. By then the energy use is massively lowered as well.

Well, the security of Bitcoin == amount of transaction fees + block rewards. The cost to 51% attack the network is opportunity cost of mining valid transactions So you either get secure wasteful bitcoin, or insecure bitcoin. Not really any other options with PoW

> The cost to 51% attack the network is opportunity cost of mining valid transactions

Which, after the block rewards run out and the price of Bitcoin probably looks different, will still be difficult to attack. But, the mining will have stopped then. Although it's pretty far in the future presumably.

Tons of other solutions than PoW as well, Algorand's PPoS is just one example.

Re: Bitcoin's vast energy use could burst its bubble

#112

Post by copumpkin »

nabla9 wrote: post #107
copumpkin wrote: post #92

Earlier quoted context omitted.

The market is more liquid than it ever has been. But yeah, not as liquid as I or many others would like. But if you really think it's gonna burst, there are plenty of eager sellers who would love to sell you some put options on LedgerX :) very above board, and the only CFTC-regulated physically settled BTC options exchange out there

Where you buy and sell BTC derivatives for 1 - 5 year time span with minimal counterparty risk?

ledgerx.com is tightly regulated (all trades reported to CFTC) and physically settled with (in my opinion) very good security practices, but it's only available to US residents. Their longest expiry dates are December 2022, so about 2 years out. I haven't seen anything longer, unfortunately. Since it's physical delivery, when you sell an option, the exchange "locks" the coins or USD that would be required if it were to get exercised until the position is closed (either by expiring worthless, getting assigned, or if you trade out of it), so the counterparty risk is against the exchange only. They're aware that it makes people uncomfortable to lock up coins for a long time, so they work with BitGo to actually handle the coin custody, in separate accounts per customer. It's all reasonable enough to me that I feel comfortable sending them a decent amount of money.

Deribit is a larger derivatives exchange by trading volume, and is open to the rest of the world (explicitly not the US), but isn't physically settled so is more of a "side bet" and is riskier. That said, it's been operating successfully for a while now. I haven't used it because I'm not allowed to in the US.

Re: Bitcoin's vast energy use could burst its bubble

#113

Post by sp332 »

sumedh wrote: post #110
sp332 wrote: post #67

Earlier quoted context omitted.

It was an impressive proof of concept. There are technically better cryptocurrencies (along pretty much any dimension), but they just didn't get as much attention. Maybe these articles about how bad bitcoin is should call out some alternatives.

What are the better alternatives?

The Lightning network is an overloy network on Bitcoin that allows faster transactions and higher transactions-per-second. Due to the economics of mining, it won't decrease the overall electricity usage of the network, but will make it more "efficient" per-transaction.

Ethereum is more programmable, to the point of being quite easy to shoot oneself in the foot. (Bitcoin is intentionally not Turing-complete to avoid abuse.)

Anything with proof-of-stake instead of proof-of-work is going to be less wasteful in terms of electricity. Ethereum is trying to get there but it has been delayed a lot.

The slow pace of block creation has been a problem with Bitcoin for a long time and lots of blockchains have higher transaction-per-second capacities and quicker verification times. Ripple was promising but had some serious scandals and I don't know if it has a future. Anyway, Bitcoin is one of the slowest ones out there now.

Several have improved on the privacy/anonymity aspects. The most famous of those I think is Monero.

Re: Bitcoin's vast energy use could burst its bubble

#114

Post by sp332 »

Bluestein wrote: post #82
sp332 wrote: post #67

Earlier quoted context omitted.

It was an impressive proof of concept. There are technically better cryptocurrencies (along pretty much any dimension), but they just didn't get as much attention. Maybe these articles about how bad bitcoin is should call out some alternatives.

This. Point to the many, innovative, options.

Got some suggestions for your sibling comment by sumedh?

Re: Bitcoin's vast energy use could burst its bubble

#115

Post by nullc »

copumpkin wrote: post #112
nabla9 wrote: post #107

Earlier quoted context omitted.

Where you buy and sell BTC derivatives for 1 - 5 year time span with minimal counterparty risk?

ledgerx.com is tightly regulated (all trades reported to CFTC) and physically settled with (in my opinion) very good security practices, but it's only available to US residents. Their longest expiry dates are December 2022, so about 2 years out. I haven't seen anything longer, unfortunately. Since it's physical delivery, when you sell an option, the exchange "locks" the coins or USD that would be required if it were…

Not only isn't deribit physically settled but the "cash" is Bitcoin-- my understanding is that there is no actual USD on the platform (like how bitmex works).

While this is a convenience for those of us that like Bitcoin exposure, it's probably a major downside for people who expect Bitcoin to lose lots of value, be outlawed, or even fail completely. :)

(plus, I would be uneasy about any cash settled product not just becoming irrecoverably insolvent in the event of the kind of black swan that a contract buyer would be hoping for...)

I'd say it would be worth asking LedgerX for 5 year contracts but I doubt anyone would be willing to sell them for prices people would be willing to buy them at-- and that assumption is supported by the fairly low volumes on the Dec2022 so far.

Re: Bitcoin's vast energy use could burst its bubble

#118

Post by rootusrootus »

torgian wrote: post #106
eloff wrote: post #36

Earlier quoted context omitted.

It does, but that only establishes a low floor on the price of gold. If it had no value as a store of wealth, it would plummet in value to a tiny fraction of what it is actually worth. Bitcoin has a floor of 0 in theory. I would also guess that makes gold better as a store of wealth. But given that the price rarely ever approaches that floor means it might not matter. And bitcoin is harder to steal (at least you don'…

I wonder about the value of gold. You might buy gold, but can you actually, physically hold it and own it? As far as I know, the only way you can buy gold is if you either buy jewelry or are a jeweler to make said jewelry. Otherwise you’re just buying stocks which could theoretically be lost in the digital wind.

You can definitely buy gold coins. I have one in my desk drawer right now, even.

Re: Bitcoin's vast energy use could burst its bubble

#119

Post by nabla9 »

copumpkin wrote: post #112
nabla9 wrote: post #107

Earlier quoted context omitted.

Where you buy and sell BTC derivatives for 1 - 5 year time span with minimal counterparty risk?

ledgerx.com is tightly regulated (all trades reported to CFTC) and physically settled with (in my opinion) very good security practices, but it's only available to US residents. Their longest expiry dates are December 2022, so about 2 years out. I haven't seen anything longer, unfortunately. Since it's physical delivery, when you sell an option, the exchange "locks" the coins or USD that would be required if it were…

>Deribit ... it's been operating successfully for a while now.

Deribit operates from Panama.

Typically these markets work well until there is finally some big event in the markets. Just when when big wins and losses are actualized they have "technical difficulties" or they just disappear.

Re: Bitcoin's vast energy use could burst its bubble

#120

Post by DennisP »

Aachen wrote: post #53
throwawayQuwcy wrote: post #13

Earlier quoted context omitted.

It's already happening! There's approx 150,000 BTC locked in the Ethereum network as ERC20 tokens like WBTC and RENBTC https://wbtc.network/dashboard/order-book Ethereum is moving to proof of stake shortly. I imagine a lot more BTC will transfer over to take advantage of this & other benefits like defi interest

I've heard some skepticism regarding the PoS of eth, so I'm in "let's see it when it's there" mode, but I'm somewhat optimistic here. Can't go fast enough for my taste, I'm really curious if it'll turn out to be what it's supposed to! Hopefully this will also mean people start to move over to this better tech.

It's been running perfectly in production since Dec. 1, with over $5 billion in ETH staked so far.

Migrating the legacy stake and EVM to it still needs to be done, but that's irrelevant to the consensus algorithm. It's just changing the data it reaches consensus about.

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