Nouriel Roubini: Bitcoin is not a hedge against tail risk • Hacker News Board

Re: Nouriel Roubini: Bitcoin is not a hedge against tail risk

#161

Post by Taek » Wed, Feb 10, 2021, 6:55 PM UTC

PragmaticPulp wrote: post #125

Taek wrote: post #74

Earlier quoted context omitted.

I'm of the mind that the government shouldn't be regulating how resources are used. It makes sense to me to regulate the manufacturing of resources - for example regulating pollution levels, dumping, etc. - but once you have a resource the market should decide how that resource should be put to use. If we've decided that we're happy producing X much electricity as a society using nuclear, wind, solar, coal, etc, we s…

Bitcoin is unique in that anyone with a power outlet and internet connection can plug hardware in and start converting energy to Bitcoin. Bitcoin mining was a problem in college dorms for a while because students used their “free” electricity and cooling to pay for new video cards. Many landlords had to abandon “utilities included” rents when they were hit with the first $500 electric bill. IT administrators have sto…

But it is true, about 75% of all electricity used in bitcoin mining is sourced from renewables. And the vast majority of bitcoin mining is large professional farms, not people using free electricity in their dorms. Bitcoin has been dominated by professionals since 2014.

https://www.vox.com/2019/6/18/18642645/bitcoin-energy-price-...

Re: Nouriel Roubini: Bitcoin is not a hedge against tail risk

#162

Post by fileeditview » Wed, Feb 10, 2021, 6:57 PM UTC

rybosworld wrote: post #30

fileeditview wrote: post #18

Earlier quoted context omitted.

But is it better to see your crypto devalued by some big dump? Would probably be easy for a nation state to do this if it wanted to.. All this independence from states seems totally overrated to me. They can tax your crypto. They can participate in the crypto market.. many possibilities.

People have been making some variation of this claim since bitcoin was $0.01. There haven't yet been any successful attempts at destroying it, which I think is what you're implying. Not to say it can't happen, but then if we prepared for every single possible scenario we'd all be quite exhausted.

I guess the reason it didn't happen is that there is no need for it. Probably they laughing their ass off by profiting from it. Not sure how it works in the US but e.g. in Germany you have to pay taxes on crypto earnings. Sure you can just hold forever but what does it help you then?

Re: Nouriel Roubini: Bitcoin is not a hedge against tail risk

#163

Post by Closi » Wed, Feb 10, 2021, 6:57 PM UTC

darthrupert wrote: post #47

Closi wrote: post #6

Earlier quoted context omitted.

I don’t think that’s fair, cash is easy to spend unlike bitcoin.

How do you spend cash farther than you can throw it?

Maybe any of the established global banking and payment providers that allow me to pay for things online significantly quicker and with much lower fees than Bitcoin, without the huge cost to the environment?

Or pigeon. Sorry I meant pigeon.

Re: Nouriel Roubini: Bitcoin is not a hedge against tail risk

#164

Post by wwarner » Wed, Feb 10, 2021, 7:03 PM UTC

coralreef wrote: post #116

PragmaticPulp wrote: post #90

Earlier quoted context omitted.

Cost of wind and solar was going down already. Bitcoin alone isn’t the driver. Bitcoin is, however, consuming some of that new energy generation with a new consumption: Doing useless calculations to mine Bitcoin. Bitcoin increases energy demand which also drives an increase in supply . We can’t take old power plants offline if the new hydro power is taken up by new mining operations. It’s silly that we’re going to su…

Costs go down with scale; scale comes from demand. Energy on earth is not a finite, limited resource. Fossil fuels are finite, but energy is not. The earth is bombarded with more potential energy every day then we could ever spend, aka solar energy.

The amount of sunlight reaching the earth is 1.365 kilo watts per square meter [0]. Fossil fuels are stored solar energy; wind, hydroelectric and of course solar is derived from sunlight. Nuclear doesn't have this limit.

[0] https://en.wikipedia.org/wiki/Sunlight#Total_solar_irradianc...

Re: Nouriel Roubini: Bitcoin is not a hedge against tail risk

#165

Post by iso1631 » Wed, Feb 10, 2021, 7:19 PM UTC

Closi wrote: post #6

iso1631 wrote: post #4

Bitcoin is a way of converting externalities into cash with no byproduct.

I don’t think that’s fair, cash is easy to spend unlike bitcoin.

You generate externalities you don't pay the full price for (namely co2), others pay the price

You take those generated bitcoins and sell them for cold hard cash

You spend cash

Re: Nouriel Roubini: Bitcoin is not a hedge against tail risk

#166

Post by tromp » Wed, Feb 10, 2021, 7:37 PM UTC

anythingdude321 wrote: post #93

PragmaticPulp wrote: post #39

Earlier quoted context omitted.

> A lot of the early adopters have either permanently lost their coins or sold it If the balance of a Bitcoin economy relies on the assumption that certain people have lost their money, something is seriously wrong. Regardless, a hypothetical Bitcoin economy would require much further buy-in from here, making current holders the early adopters. > It's like saying by the time a company IPOs, early VCs have benefited t…

There is no alternative for the monetization of an asset. Gold was the same. Some people believed in it, many didn't, and as it monetized over time those that believed in it early benefited most. The same is the case with anything valuable that might become money, including the USD, if you consider that it was originally distributed in a manner that was pegged to gold and that gold was monetized in the same way as de…

Gold did not emit half of all supply in the first 4 years. Bitcoin's emission is nothing like Gold's.

Re: Nouriel Roubini: Bitcoin is not a hedge against tail risk

#167

Post by bustin » Wed, Feb 10, 2021, 8:00 PM UTC

PragmaticPulp wrote: post #19

bustin wrote: post #5

How does someone measure the potential value of "being a pain in the ass to those who seek to control the supply of money"

It’s amazing that the popular narrative is that the average person will somehow benefit if we switch to a currency that is majority owned by a small handful of early adopters. I’m not a fan of the current inflationary economic policy, but in no way would a Bitcoin economy be a win for the average person. Early adopters and Bitcoin whales would love it because they hold the vast majority of Bitcoin. They want nothing…

I can't disagree.

I'm not convinced that your average tax paying American will benefit from this - if anything the difficulty in taxing wealth and loss of ability to print/control money granted to Americans by American guns could lead to a noticeable decrease in quality of life for them.

That being said, there is a tremendous demand from people in many countries to defend their wealth from less stable environments that seek to control their ability to freely transact/store wealth.

No idea how it ends, or even if these cryptos deliver on their potential. Any idiot can see there are many roadblocks, and I personally think that Bitcoin's price is wildly manipulated (and most likely a ponzi).

However, as someone who has 2nd hand experience with poorly run govs stripping peoples' wealth for political reasons, I'm very excited by these possibilities in spite of some of the negatives.

For the record I have no Bitcoin, but I do run a node for another crypto I find interesting.

Re: Nouriel Roubini: Bitcoin is not a hedge against tail risk

#168

Post by djschnei » Wed, Feb 10, 2021, 8:05 PM UTC

guenthert wrote: post #59

djschnei wrote: post #40

Just in, gold also worthless https://www.brilliantearth.com/gold-mining-environment/

Nonsense. Gold has many uses other then used as currency or for speculation.

I wonder if gold being useful in semiconductor design influenced the Greeks in adopting it as a currency. Maybe they just used it because it was portable, fungible, and scarce?

Re: Nouriel Roubini: Bitcoin is not a hedge against tail risk

#169

Post by coralreef » Wed, Feb 10, 2021, 8:18 PM UTC

georgyo wrote: post #109

coralreef wrote: post #46

Funny trend: solar and wind power are now cheaper than coal. https://ourworldindata.org/uploads/2020/11/Price-of-electric... Here's a hot take: Bitcoin subsidizes clean energy development. Miners buy cheap energy; clean energy infrastructure gets profitable return. Cost of development and manufacturing lowers further because of scale; pollution and externalities reduced; humanity wins. Bitcoin saves humanity?

If we take it a few steps out, it sounds like wasting energy can save the world. The more energy we waste the more energy we need, the more profitable cheap energy sources are! Of course the more profitable wasting energy becomes, the more coal and oil will be burned to make money as well.

One problem with "waste of energy" argument is that it assumes Bitcoin the network provides no value. People compare it to centralized, closed systems and say, "See how inefficient that is?".

But what they're not calculating is the cost and suffering caused by maintaining the underlying system (fiat currency, petrodollars, geopolitics). Calculate for me the economic and human damage done if the US falls into hyperinflation and obliterates the world's reserve currency. It won't just be 350m people suffering, it will be billions.

Decentralized, permissionless, censorship resistant systems suddenly seem very valuable to me.

Re: Nouriel Roubini: Bitcoin is not a hedge against tail risk

#170

Post by dnautics » Wed, Feb 10, 2021, 8:31 PM UTC

abraxas wrote: post #64

dnautics wrote: post #52

Earlier quoted context omitted.

so is capitalism, so is socialism, so is biology, etc...

Not at all. In the aggregate living organisms don't evolve to homogenize their output while vacuuming resources from more interesting pursuits. As for social/economic systems such as capitalism that's neither here nor there. Apples and oranges so to speak.

There is an inherent bias in looking at paperclips like that. I'm sure that if you spend some time in the paperclip community you will find that they value their individuality; each paperclip has slightly different characteristics (one might be bent a few arcseconds more than the next one).