Earlier quoted context omitted.
> They do not pretend making your money work for you by some magical scheme. No. They instead take your money, buy coal, and burn it. Nothing is left. As you say, Ponzi schemers take money for themselves and keep it. Most of what Madoff stole was recovered, for instance. Whereas virtually 100% of all money invested into crypto has been burned by miners. This is pretty easy to model. So there’s nothing left to recover…
>No. They instead take your money, buy coal, and burn it. Nothing is left. Yes, miners “take your money” but only a portion of every transaction as a service fee for processing your transaction. This is a payment for a service, the value of which is predicated on a service immediately provided rather than a promise for future value. Also “nothing is left” is also a false statement as most of the bitcoin/money process…
Everyone else can only create "value". So I can combine two widgets together to make a third widget and sell it for less than you could do it. That's "value" in a nutshell.
So on an exchange balance sheet (stockmarket, coinbase, etc), dollars aren't created or destroyed, just transferred for something of perceived value. So I trade one dollar for a fraction of AMD Stock, e.g. But the dollar goes to whoever sold me AMD. The price of AMD stock can go up and down ("value") but the total dollars created or destroyed is always zero. Same is true with BTC.
Right, makes sense? Good.
So every transaction in BTC has a "cost" associated with it, where some "value" of BTC is transferred to miners. The miners spend money burning energy which removes "value" from the economy as a whole. Basically that means we had "X" many tons of fossil fuels left on Earth, but now we have slightly less because energy was "burned" for the transaction.
If I give you a ton of coal you can burn that for heat. But that removes the coal permanently from the world. OTOH, if I want to make a cryptocurrency with 10^86 coins and if I do that a billion times over, well, I have a limitless supply of cryptocurrency.
If you look at the situation as a flow of dollars you see an equation that looks like this:
BTC bought in dollars = BTC Sold in dollars + Mining Costs in dollars.
So while dollars flow back and forth, some have to go to the miners to burn physical energy. That incurs real world costs. So "value" has to be extracted and transferred to the energy companies to "burn" energy. Even if dollars aren't exchanged in the transaction, "value" has to be extracted regardless for confirmation. That value is "burned" by consuming non-renewable energy.
You might say that's exactly what credit card transactions are, (which is not incorrect) but the burn rate of Visa per transaction is much less than BTC.
This shows the cost of 1 BTC transaction vs 100K Visa transactions.
https://www.statista.com/statistics/881541/bitcoin-energy-co...
What this means is that if you reduce the "burning" cost per transaction in BTC, you can keep the value in BTC, and I'll be less cranky about it, since you're not hurting the environment.