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Bitcoin Miners Flock to New York’s Remote Corners, but Get Chilly Reception

nytimes.com

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Re: Bitcoin Miners Flock to New York’s Remote Corners, but Get Chilly Reception

#61

Post by plankers »

eudora wrote: post #49
plankers wrote: post #27

Earlier quoted context omitted.

Bitcoin is _not_ trying to go proof of stake because proof of work is the most secure consensus algorithm that exists. Proof of stake has some lingering unsolved problems, search for "nothing at stake problem" and "long range attack." All the energy consumed by bitcoin is a feature, not a bug. The only way to defeat the immutability of the bitcoin blockchain and do naughty things would be to expend _more_ energy than…

If that's the case, I'm not into it. It's not sustainable. What an incredible waste of resources. And presumably the energy cost correlates to the usage of the currency? How can it possibly become anything like widely used if it's so pricey? (Come to think of it, one way is the lightning network. Which doesn't use the blockchain for almost everything: https://lightning.network/ )

So by your metric the global banking industry, which uses several orders of magnitude more electricity than the bitcoin network, also isn't sustainable.

A single bitcoin may be pricey, but fortunately there are eight decimal places after that first coin, enabling users to spend however much or however little they want.

You're right about the lightning network, it stands to revolutionize the bitcoin network by providing an instantaneous zero-confirmation payment layer on top of the bitcoin blockchain. Critically, though, it wouldn't work at all without the security provided by all that "wasted" electricity. Think of the lightning network like the HTTP protocol layer resting on top of the TCP/IP communication layer. HTTP wouldn't work without TCP/IP and TCP/IP wouldn't be nearly as useful without the myriad of protocol layers which it enables. This is still early times for bitcoin, and you ain't seen nothin' yet.

Re: Bitcoin Miners Flock to New York’s Remote Corners, but Get Chilly Reception

#62

Post by nil_pointer »

tjpaudio wrote: post #39

I fully understand this reaction. Crypo is delivering on none of it's promises and leaving an ugly mark on the production side. Transactions are way too slow for retail, decentralization is a joke because the largest mining pools are manipulating the supply with less transparency than national currencies, the value is too volatile to entice people to use it for anything other than speculation, and it is literally the…

If your area has cheap electricity, chances are miners are already there.

Re: Bitcoin Miners Flock to New York’s Remote Corners, but Get Chilly Reception

#63

Post by badge »

darawk wrote: post #56
Retric wrote: post #54

Earlier quoted context omitted.

Economic transactions create a tax debt which creates demand for currency to pay the government. Sell stock, car, or some Twinkies, even in a different currency, and they get a cut. Indirectly, messing with your currency risks economic harm creating a huge incentive for governments not to do that while things are going well.

> Economic transactions create a tax debt which creates demand for currency to pay the government. Sell stock, car, or some Twinkies, even in a different currency, and they get a cut. That is absolutely correct. But nowhere does it demand that you conduct these transactions in USD. USD ends up getting used because it's convenient, which is because people have to pay their tax debts at the end of the year. However, th…

  But nowhere does it demand that you conduct these 
  transactions in USD.
What alternative are you suggesting? It seems like no one's actually transacting in Cryptocoins, as evident with an ideal usecase failing; Bitcoin proved a failure among technically competent users attempting to buy digital goods though Steam [1]. Stripe also determined Bitcoin to be an unreliable method for payments [2].

  USD ends up getting used because it's 
  convenient
Exactly.

Why would anyone bother taking their money, going through all the steps to convert it into the foreign currency or software tokens that they need to buy from someone else (who's siphoning wealth from you) just to find out merchants don't even accept it due to the volatility. And what happens when the merchant turns out to be a fraud? No customer protection by design.

[1] https://steamcommunity.com/games/593110/announcements/detail...

[2] https://stripe.com/blog/ending-bitcoin-support

Re: Bitcoin Miners Flock to New York’s Remote Corners, but Get Chilly Reception

#64

Post by darawk »

badge wrote: post #63
darawk wrote: post #56

Earlier quoted context omitted.

> Economic transactions create a tax debt which creates demand for currency to pay the government. Sell stock, car, or some Twinkies, even in a different currency, and they get a cut. That is absolutely correct. But nowhere does it demand that you conduct these transactions in USD. USD ends up getting used because it's convenient, which is because people have to pay their tax debts at the end of the year. However, th…

But nowhere does it demand that you conduct these transactions in USD. What alternative are you suggesting? It seems like no one's actually transacting in Cryptocoins, as evident with an ideal usecase failing; Bitcoin proved a failure among technically competent users attempting to buy digital goods though Steam [1]. Stripe also determined Bitcoin to be an unreliable method for payments [2]. USD ends up getting used…

> What alternative are you suggesting? It seems like no one's actually transacting in Cryptocoins, as evident with an ideal usecase failing; Bitcoin proved a failure among technically competent users attempting to buy digital goods though Steam [1]. Stripe also determined Bitcoin to be an unreliable method for payments [2].

I'm arguing that USD is not backed by the USG in any meaningful sense. Not that Bitcoin is a good alternative. Just that the "Bitcoin isn't backed by anything, but USD is" argument is unsound.

> Why would anyone bother taking their money, going through all the steps to convert it into the foreign currency or software tokens that they need to buy from someone else (who's siphoning wealth from you) just to find out merchants don't even accept it due to the volatility. And what happens when the merchant turns out to be a fraud? No customer protection by design.

Are you arguing that volatility is an inherent property of cryptocurrencies? Because if you're not, then I don't see why your point here is relevant. If you are, then i'd like to hear that argument spelled out.

Re: Bitcoin Miners Flock to New York’s Remote Corners, but Get Chilly Reception

#65

Post by Retric »

darawk wrote: post #59
Retric wrote: post #57

Earlier quoted context omitted.

The need to pay US taxes in USD is not a software problem it’s a risk mitigation problem. If you accept pesos/whatever for your car and the peso crashed you might owe more in taxes than you where paid and even if you do the transaction today you still need to buy some USD with pesos to put aside for taxes. So, if by ‘some’ you mean multiple trillions of dollars of demand every year then ok. But, that’s rather trivial…

> The need to pay US taxes in USD is not a software problem it’s a risk mitigation problem. If you accept pesos/whatever for your car and the peso crashed you might owe more in taxes than you where paid and even if you do the transaction today you still need to buy some USD with pesos to put aside for taxes. True, though that's simple enough to hedge. > So, if by ‘some’ you mean multiple trillions of dollars of deman…

Absolute numbers create bounds. USD can’t drop to 1/100th of it’s current value without huge shifts as people would need to pay 100x as many USD in taxes driving up demand for USD. Now, their is slack in the system, but that’s a good thing as it provides price signals and feedback loops.

Even record setting sustained inflation of say 2% per month in the middle of some horrific economic issues would still be a bastion of stability relative to many currency’s throughout history. So, as long as the economy stays steady and the USG does not do something monumentally stupid the US economy really does back the USD.

Re: Bitcoin Miners Flock to New York’s Remote Corners, but Get Chilly Reception

#66

Post by eudora »

plankers wrote: post #61
eudora wrote: post #49

Earlier quoted context omitted.

If that's the case, I'm not into it. It's not sustainable. What an incredible waste of resources. And presumably the energy cost correlates to the usage of the currency? How can it possibly become anything like widely used if it's so pricey? (Come to think of it, one way is the lightning network. Which doesn't use the blockchain for almost everything: https://lightning.network/ )

So by your metric the global banking industry, which uses several orders of magnitude more electricity than the bitcoin network, also isn't sustainable. A single bitcoin may be pricey, but fortunately there are eight decimal places after that first coin, enabling users to spend however much or however little they want. You're right about the lightning network, it stands to revolutionize the bitcoin network by providi…

The global banking system is used by drastically more people than Bitcoin.

And I expect the transactions per person of the global banking system is orders of magnitude higher.

Energy use per transaction for Bitcoin seems much, much higher, but I don't have numbers obviously.

But hopefully lightning helps.

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