121–130 of 319 posts
It's more like "embodied energy" than battery
Earlier quoted context omitted.
The tangible hard money equivalent is gold. It is also a battery one can store value across time. Yes, the raw energy that went in to feed the miners was lost via heat etc but the brunt of it was stored.
The problem with analogizing Bitcoin mining to gold mining is that Bitcoin mining secures value in the past and gold mining secures value in the future. If you stopped mining Bitcoin, all previously mined Bitcoin would lose value due to the decreased security of the block chain. It's like if gold began to sink into the ground the moment you stopped mining it, and you had to keep mining and smelting it at a ever-more…
Earlier quoted context omitted.
If bitcoin would be fully powered by renewables, do you still think its energy consumption would be a problem?
Proof of work will always be an expensive way to secure a ledger, with little in the way of real advantages. "Distributed" sounds nice, but it isn't really that valuable in the end.
It is not a battery in the physical sense because it does not store energy. What it does is, it allows you to transfer the economic utility of cheap local energy to regions where energy is more in demand. Although, as the article itself highlights, this could also be done more efficiently with aluminum smelting, and other processes that are energy intensive but don't require much infrastructure. From a purely financi…
This seems like a pretty flawed idea and an attempt to justify the incredible amount of electricity required by bitcoin. If bitcoin was changed to require a fraction the amount of electricity all of these ideas would suddenly fall apart. Building renewable energy sources in the middle of nowhere to power a bitcoin farm is just completely nonsensical and does noting to help with the shift to renewables.
> This seems like a pretty flawed idea and an attempt to justify the incredible amount of electricity required by bitcoin. It's not "required", it's only that high because it has so much success. Bitcoin would be working with only one miner running, the first blocks were minted on a private computer.
I am a cryptocurrency enthusiast (disclaimer: I even own some). But I find this article fallacious. > if we think of Bitcoin as a battery, what can we do with it? The key properties of Bitcoin’s battery are: 1) always on and permissionless (no need to find customers, just plug and go) I think it is a very wasteful transformation of the power put in. You can get it to be always on and "permissionless" without burning…
My metaphor: Just like governments mint currency from bullion, miners mint bitcoin from electricity. While I think it's weird to consume so much energy to create something so ephemeral, I'm still unclear about the externalities, eg negative ecological impact, driving electricity prices up. Is all this effort worthwhile? Maybe? It feels like a tulip bulb craze, south sea bubble. But I've been so wrong so many times, I…
1. The true believers like labor theory of property a lot, and see having a mining rig as an extension of that(falliciously or no - there are plenty of critiques of labor theory of property itself). A bitcoin represents the "same amount" of effort relative to its value at a given moment in time.
2. As a lower margin use of energy premised on maintaining consensus, it has qualities that resemble perfect competition(in the economist's sense of that phrase) but actually go BEYOND perfect competition. While you can own a large part of the distribution or mining power, if you try to monopolize Bitcoin as a rentier you just end up forking it, as has been demonstrated by various events over the years. If people don't like your particular imposition of scarcity, they pull the rug in short order.
The second part is rather more important than the first, IMHO. Mining's meting out of energy usage as credit and the resulting price deflation is a way to get people on board with consensus and start engaging in speculative action, but there's a sense among the people interested in other cryptocurrency that that's just a starting point, and the development of distributed consensus tech itself is what makes this a "railroad" and not a "tulip".
"No rentiers" is really a pretty earthshaking concept, to the point where most of the people in the space can't see that light and look at the shadow puppets instead. But it does not seem to be refuted by anything I've encountered. While onramps and offramps to crypto are mostly controllable, this is still a huge upset to our models of what markets are or could be.
> crypto mining is driving the energy transition from fossil fuels to renewables. Why is waste a good thing if it's renewable? It's the argument I see brought up almost every time. It feels like people are conflating renewable with a infinite energy source.
This seems like a pretty flawed idea and an attempt to justify the incredible amount of electricity required by bitcoin. If bitcoin was changed to require a fraction the amount of electricity all of these ideas would suddenly fall apart. Building renewable energy sources in the middle of nowhere to power a bitcoin farm is just completely nonsensical and does noting to help with the shift to renewables.
Bitcoin’s price is backed by the sunk cost of energy used to mine it. If any critical mass of miners began using cheap or free renewable energy, the price of BTC would fall precipitously. Miners have, in the past, resisted improvements to the network that would reduce their profits so this all seems pretty unlikely as well.
This seems like a pretty flawed idea and an attempt to justify the incredible amount of electricity required by bitcoin. If bitcoin was changed to require a fraction the amount of electricity all of these ideas would suddenly fall apart. Building renewable energy sources in the middle of nowhere to power a bitcoin farm is just completely nonsensical and does noting to help with the shift to renewables.
Bitcoin’s price is backed by the sunk cost of energy used to mine it. If any critical mass of miners began using cheap or free renewable energy, the price of BTC would fall precipitously. Miners have, in the past, resisted improvements to the network that would reduce their profits so this all seems pretty unlikely as well.