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Bitcoin as a Battery

nickgrossman.xyz

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Re: Bitcoin as a Battery

#251

Post by lottin »

atmosx wrote: post #203
audunw wrote: post #143

What the hell is is with cryptocurrency proponents and trying to redefine words to suit their narrative? First Bitcoin was NOT fiat currency (despite being one of the most fiat currencies by definition), then it was also a store of value (despite it being a horrible store of value, a high-risk high-reward investment is more accurate). Now it's supposed to be a battery? When the energy being put into it is basically p…

I agree with the sentiment, but this part is way off: > [...] despite being one of the most fiat currencies by definition [...] FIAT currencies are by design inflationary to enhance spending. Bitcoin is deflationary _by design_. Since there's no bank or state backing Bitcoin, the only way that bitcoin makes sense was/is deflation. This quality makes BTC an asset and that's what it is, a digital asset. As a currency B…

A fiat currency is any currency that isn't backed by a commodity, i.e. it's not redeemable for a certain quantity of the commodity by the issuer, and bitcoin falls squarely into this category.

Re: Bitcoin as a Battery

#252

Post by Liron »

fsh wrote: post #18

I don't buy the argument in the article. The purpose of a battery is to store energy to be used later and potentially elsewhere. There is no way to regain the energy that was turned into heat while mining bitcoins, so bitcoin is not a battery. The comparison with aluminum production is also quite weak, since aluminum has an intrinsic economic value, whereas cryptocurrencies don't. Most of the arguments given in the a…

> There is no way to regain the energy that was turned into heat while mining bitcoins, so bitcoin is not a battery.

You can regain the energy where it’s needed by using Bitcoin to purchase it

Re: Bitcoin as a Battery

#254

Post by Liron »

tomxor wrote: post #107
fsh wrote: post #18

I don't buy the argument in the article. The purpose of a battery is to store energy to be used later and potentially elsewhere. There is no way to regain the energy that was turned into heat while mining bitcoins, so bitcoin is not a battery. The comparison with aluminum production is also quite weak, since aluminum has an intrinsic economic value, whereas cryptocurrencies don't. Most of the arguments given in the a…

Well said. Also purely from the point of view of physics: no energy is stored, you would simply be buying energy _produced_ elsewhere with the intrinsic value you created... in other words you are double spending energy!

It’s not double-spending energy. The chunk of energy you generate isn’t spent by you, it’s supplied to Bitcoin users to power their transactions. You only consume the second chunk of energy for yourself.

Re: Bitcoin as a Battery

#255

Post by Liron »

notum wrote: post #6

A bit nonsensical imho. A battery by definition has to be able to produce the same type of energy that was put into it. While correlating crypto with something random every week (Easter bunnies next Sunday?) can be marginally interesting, this instance makes no sense. We can't extract electricity from aluminum or Satoshis, we can buy it though, but that's outside of the battery scope.

Imagine that as you mine BTC, you’re instantly paying that BTC for someone to drill some oil and put it in a barrel wherever you plan to use it. The system of you and your BTC plus that other person and the oil in the earth is a battery. Ok now just delay the other person’s actions in time.

Re: Bitcoin as a Battery

#256

Post by lottin »

Sebb767 wrote: post #130
jasonlaramburu wrote: post #110

Earlier quoted context omitted.

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.

Bitcoins price is basically unrelated to the energy used. Right now, it is an independent currency at best and a speculation object at worst. Energy spent is only useful in so far as that no single entity can take over the network; for all other purposes, bitcoin could run on a single 10 year old GPU.

An entity could launch a coordinated air strike on well-known mining locations and take over the network at anytime.

Re: Bitcoin as a Battery

#257

Post by dmitriid »

Liron wrote: post #252
fsh wrote: post #18

I don't buy the argument in the article. The purpose of a battery is to store energy to be used later and potentially elsewhere. There is no way to regain the energy that was turned into heat while mining bitcoins, so bitcoin is not a battery. The comparison with aluminum production is also quite weak, since aluminum has an intrinsic economic value, whereas cryptocurrencies don't. Most of the arguments given in the a…

> There is no way to regain the energy that was turned into heat while mining bitcoins, so bitcoin is not a battery. You can regain the energy where it’s needed by using Bitcoin to purchase it

You don't regain energy this way. You're buying new energy.

That's not how batteries work.

Re: Bitcoin as a Battery

#258

Post by xiphias2 »

scotty79 wrote: post #53
xiphias2 wrote: post #42

Earlier quoted context omitted.

What about training ML models as another example? It requires a lot of energy as well (and I expect it to be more significant in the future), and the optimal power draw should depend on the price of energy. Of course it requires GPU/TPU pricing to change depending on clock speed, which is hard to sell to customers. So yeah, for now Bitcoin mining is a more scalable solution.

Sure. That's also great if you can monetize trained ML models so easily that everyone can participate. It's already being done to some very small degree by few companies that locate their ML server farms in places where energy is cheap and renewable. I hope this application will some day compete with crypto for computing power and energy and win but I don't think it will be popularized and commoditized soon enough to…

,,If you could create crypto based on ML training it would be so cool.''

That would actually be a bad thing: the real value in proof of work is that it doesn't have any extra value to the miner, which stops miners from gaining a huge edge over other possible future miners. What's behind all the controversy is that proof of work has to be totally useless work, that's what makes it valuable for the blockchain :)

Re: Bitcoin as a Battery

#259

Post by whb07 »

saalweachter wrote: post #73
whb07 wrote: post #37

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…

The same happens if people stopped caring about the yellow rock.

People stop mining gold only because it’s valueless.

People stop mining bitcoin because it’s valueless.

Re: Bitcoin as a Battery

#260

Post by bootlooped »

scotty79 wrote: post #28

I'm so happy that other people start to notice this dynamic. Why are we not yet fully running on renewables? Why don't we have trillions of dollars pouring into solar panels and wind turbines and pumped storage hydroelectricity and battery storage? The answer is there's not enough demand for excess electricity to create and keep excess electricity. I read about new pumped storage hydroelectricity installation closed…

I think the flaw in this is that crypto mining will take place regardless of whether the source of the electricity is green or not, and regardless of whether the electricity is excess capacity or not.

Crypto mining is a business; they may find it beneficial to mine during both peak and off-peak hours, and they're unlikely to care whether the electricity is coming from wind or coal, so long as it's cheap enough to turn a profit.

So as a side effect, yeah, it may make building new renewable sources more feasible, but it's a big shotgun and there's a lot of collateral damage.

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