Key Post Bitcoin is a clearly identifiable economic bubble

tecate

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I don't see any benefits in causing energy consumption more than several large countries, more than Argentina, more than Finland, at a time when our planet is burning up through excessive energy consumption.
The energy mix that currently goes into bitcoin mining is significantly greener than the energy mix that facilitated your ability to post the above statement. By and large, those that complain about bitcoin energy use couldn't give a fiddlers about energy use and hold more deep seated objections to the decentralised cryptocurrency. If they did, they'd be calling for the greening of the entire grid - not taking a dictatorial view and deciding what people can and can't use energy for.
Otherwise, as per Cardano93's posts, bitcoin mining has the potential to impact electricity grids positively. It can act as a subsidy for renewable schemes that are currently unviable. It can smooth out the duck curve - helping to even out network supply/demand - making energy networks more efficient.
 

DublinHead54

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Bitcoin is not a solution to energy networks. It was not designed to make energy networks more efficient, sure there may be some novel uses of bitcoin to make energy networks more efficient, but so can other solutions such as battery energy storage systems.

Bitcoin is a consumer of energy as much as manufacturing plastic or any other consumer product is.

So there are two simplified options, replace the source of energy to green friendly sources or reduce the energy consumption of bitcoin (Proof of Work). Obviously the network that BItcoin operates within has a finite source of green energy which will compete with other manufacturing processes.

Historically Bitcoin has because of its China base has consumed large amounts of fossil fuels. However, technologies developed today have an ESG lens to them and bitcoin was not designed within a ESG framework so there are always going to be tradeoffs.

I've posted historically on this thread about the energy consumption and whilst others will post about projects that can (can being the significant point) reduce the footprint of bitcoin it remains unsolved.


Investing in BTC currently is not an environmentally friendly due its current footprint.
 

tecate

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Any industry that utilises a higher proportion of fossil fuels in its energy input can be deemed to be less environmentally friendly than bitcoin/bitcoin mining.
 

ArthurMcB

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Relying on Bitcoin/Crypto's energy consumption as a way to discredit it, as a whole, is weak. I think itll serve to push more people towards Bitcoin/Crypto having merit as they will see through the energy-consumption arguement.

It may consume a lot of energy but in that case look for a solution to that i.e use greener sources where possible etc. Dont instead say Bitcoin/Crypto is useless.
 
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CuriousGeorge11

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Facebook, Google, Microsoft etc etc etc are all investing in infrastructure related to ethereum and smart contracts

I see your all believers in the flippening happening
 

DazedInPontoon

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The year was 2024, March 8th.

Up and down streets all around the world windows shattered under the sheer combined force of the exclamations - a kind of sonic boom never seen or heard since - not the source of a single explosion but the cumulative effect of many uttering the same sound at once.

Never before had the world come to such a realisation concurrently, and now this unified shout of 'EUREKA' echoed the world over as finally the moment came where hundreds of millions of people simultaneously came to their senses. Standing among the the broken glass with the fresh realisation that despite the fact that bitcoin had worked for 15 years as decentralised money, especially for long term saving or as a hedge against fiat inflation, that they suddenly were no longer going to use it for this because they cannot make a necklace out of it.

It was the sound of Brendan being right.

March 8th has since been known as "Burgess Day" or colloquially as "rightaboutmoney" day and is also an unofficial annual holiday for glaziers.
 

tecate

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Facebook, Google, Microsoft etc etc etc are all investing in infrastructure related to ethereum and smart contracts

I see your all believers in the flippening happening
Ethereum doing quite nicely for itself. However, I don't really think of it & bitcoin in an either/or type of way. Both seek to fulfil very different use cases. On that basis, they can co-exist just fine.
 

NiallSparky

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Never before had the world come to such a realisation concurrently, and now this unified shout of 'EUREKA' echoed the world over as finally the moment came where hundreds of millions of people simultaneously came to their senses. Standing among the the broken glass with the fresh realisation that despite the fact that bitcoin had worked for 15 years as decentralised money, especially for long term saving or as a hedge against fiat inflation, that they suddenly were no longer going to use it for this because they cannot make a necklace out of it.

Bitcoin is a lot of things, but it's not money. It doesn't fit most of the criteria to be money.
 

tecate

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Bitcoin is a lot of things, but it's not money. It doesn't fit most of the criteria to be money.
I would say that it does fulfil most of the characteristics of money. However, it's going through an adoption process - and it will remain volatile until it matures. That is its main drawback when used as money today.


Comparing bitcoin mining to posting text on a bulletin board is like comparing a four litre Range Rover to my bicycle.
I disagree - I think you're missing the point. Internet data runs through data centres that utilise vast quantities of energy - just like bitcoin mining. The comparison stands on that basis.

we're adding to the energy consumption of the planet for this.
You're confirming the crux of the issue. You're taking it upon you to decide what is or is not worthy of energy inputs. That's dictatorial. If you care about the environment, then its the grid that needs to be greened. Dirty coal should be banned universally. That would be a good starting point. Not picking and choosing what's worthy of energy use. I get that you don't see the value in a free, open, global, censorship-resistant monetary system but many of us do. If we were to choose who should or should not use energy, do you want someone round your house confiscating your car, your christmas lights or whatever else?
 

Duke of Marmalade

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And the answer won't be driven by price. It will be driven by either Bitcoin is consigned to history or we are all going around spending bitcoin in Dunnes Stores.
I don't think that is the binary. There is no way it will ever be even partially used in mass retail transactions. Many, many reasons but for one it would not be allowed by the monetary authorities and believe me they would have no difficulty banning Dunnes Stores from accepting crypto.
I think the cultists argue that it will have a future niche role. In fact I think they have given up on it being a significant player as a medium of exchange but that it will have a role as a store of value. But as John Kelleher (Investopedia resident crypto expert and enthusiast) argues it can't have a sustainable role as store of value without being a meaningful medium of exchange.
 

time to plan

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Absolutely.

Bitcoin will go to zero. There is no doubt about that.

It has taken a lot longer than I thought. I never thought so many people could be so crazy for so long. But be quite clear. It will go to zero.

Brendan
I also think it is fundamentally tulipmania. The price is only supported because a greater fool will pay more in the future.

But is is a bit daft to say that there is no doubt about it,
 

RetirementPlan

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I disagree - I think you're missing the point. Internet data runs through data centres that utilise vast quantities of energy - just like bitcoin mining. The comparison stands on that basis.
Yes, I've a pretty good idea how the internet works having spent the last 25 years of my professional career working with it. Actually, internet data doesn't 'run through data centres'. It is often stored in data centres, and runs to and from data centres, but not through them. It runs through routers, which do indeed consume energy also, but don't store or retain data.

As internet systems go, storing text posting on a bulletin board like this is probably one of the lowest energy impact. No graphics, no video, just good old fashioned text, with some formatting.

So posting on a bulletin board is not in the same ballpark as bitcoin mining.

Digital waste in general is indeed a huge issue. Gerry McGovern has been banging that drum for a couple of years. Do we really need to keep video on for the full duration for all ten people attending that 1-2 hour meeting? Do our teens really need to send a meaningless selfie with EVERY text message they send on Snapchat? There are big issues here, but beyond the scope of the bitcoin discussion.
You're confirming the crux of the issue. You're taking it upon you to decide what is or is not worthy of energy inputs. That's dictatorial. If you care about the environment, then its the grid that needs to be greened. Dirty coal should be banned universally. That would be a good starting point. Not picking and choosing what's worthy of energy use. I get that you don't see the value in a free, open, global, censorship-resistant monetary system but many of us do. If we were to choose who should or should not use energy, do you want someone round your house confiscating your car, your christmas lights or whatever else?
Yeah, it maybe a bit dictatorial, but that's where were going. Someone will be coming round to house within your and my lifetimes to tell us that we can't use our petrol or diesel car. And maybe we should be finding a way to put a different level of charges on the crazy christmas light displays or the bitcoin mining or whatever other wasteful non-productive uses people find for electricity. We really don't have time to be pussy footing around this stuff anymore.
 

DazedInPontoon

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Duke makes some factually correct statements about mining, and some valid points. But on the other hand, the original reward was 50 btc per block, due to the halvings that have happened so far we're down as *low* as 6.25 btc per block now. The argument that that the block reward will be neglibable in 10 years was made by some, well, 10 years ago, and they were incorrect as the price increased more than enough to compensate (as the design expected/hoped it would).

Another aspect is the fees, which originally were neglibable compared to the 50 btc reward, but as the reward falls and bitcoin popularity rises then fees start to matter a bit more... or do they? From https://bitcoin.clarkmoody.com/dashboard/ Mining Economics section: Avg. Fees vs. Reward 1.47% . If the reward dropped to zero right now, fees would support 1.5% of the current mining power. Would bitcoin survive right now under these conditions? I don't know but probably.

The history of fees is actually quite interesting. Look at this chart for example which charts the history of fees as a percent of reward: https://stats.buybitcoinworldwide.com/fees-percent-of-reward/ What conclusion can we draw from this?
 

Duke of Marmalade

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Duke makes some factually correct statements about mining, and some valid points. But on the other hand, the original reward was 50 btc per block, due to the halvings that have happened so far we're down as *low* as 6.25 btc per block now. The argument that that the block reward will be neglibable in 10 years was made by some, well, 10 years ago, and they were incorrect as the price increased more than enough to compensate (as the design expected/hoped it would).

Another aspect is the fees, which originally were neglibable compared to the 50 btc reward, but as the reward falls and bitcoin popularity rises then fees start to matter a bit more... or do they? From https://bitcoin.clarkmoody.com/dashboard/ Mining Economics section: Avg. Fees vs. Reward 1.47% . If the reward dropped to zero right now, fees would support 1.5% of the current mining power. Would bitcoin survive right now under these conditions? I don't know but probably.

The history of fees is actually quite interesting. Look at this chart for example which charts the history of fees as a percent of reward: https://stats.buybitcoinworldwide.com/fees-percent-of-reward/ What conclusion can we draw from this?
Not objecting to any of that except that the design of reducing reward was not in anticipation of increasing price but to give transaction fees a chance to gather momentum.
The integrity of the bitcoin platform needs miners and miners need remuneration. So long as the difficulty remains at a sufficient level the integrity of the blockchain is maintained. The difficulty when I last looked was 21 trillion times higher than originally proposed by Satoshi so I guess the remuneration of miners has a very, very, v., v,. long way to drop before it becomes unviable. Far fewer of them of course but enough to make it viable.
Anyway, I am interested in your views on @Cardano93 's waxing about "monetizing energy". Despite the denials I really think that s/he thought that bitcoin had answered Nikolai Tesla's dream of energy being transmitted wirelessly.
 
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tecate

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So posting on a bulletin board is not in the same ballpark as bitcoin mining.
The point I made was that the energy mix that has facilitated your postings here is far less green than the energy mix that goes into bitcoin mining. I could take a view that the point that you've gone on to make (they're not comparable because of the amount of energy input) is open to challenge if ALL energy input is considered but for expediency, lets not even go there. If we're moving on to consider the amount of energy, then I'd point to the likes of youtube and online gaming as examples. Youtube is very much comparable from that point of view. Online gaming far and away exceeds the total energy input of btc mining.


Digital waste in general is indeed a huge issue. Gerry McGovern has been banging that drum for a couple of years. Do we really need to keep video on for the full duration for all ten people attending that 1-2 hour meeting? Do our teens really need to send a meaningless selfie with EVERY text message they send on Snapchat? There are big issues here, but beyond the scope of the bitcoin discussion.
It's reasonable of you to highlight this. The difference is that in the btc mining energy debate, many are holding it to a higher standard than other energy intensive industries/activities.


Yeah, it maybe a bit dictatorial, but that's where were going. Someone will be coming round to house within your and my lifetimes to tell us that we can't use our petrol or diesel car. And maybe we should be finding a way to put a different level of charges on the crazy christmas light displays or the bitcoin mining or whatever other wasteful non-productive uses people find for electricity. We really don't have time to be pussy footing around this stuff anymore.

From where we stand right now, what makes the most sense is a collaboration between nations for the immediate removal of dirty coal from energy grids. It makes more sense to make greening of the energy grid as a whole the metric - not picking and choosing 'approved' uses for energy. There's a lot more friction taking the latter approach. However, if we must and if its a consideration of what's deemed to be 'non-productive' - then Christmas lights and the viewing of cat videos on youtube and online gaming comes in far and away ahead of the provision of an open, global, censorship resistant monetary network
 

ArthurMcB

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It makes more sense to make greening of the energy grid as a whole the metric - not picking and choosing 'approved' uses for energy. There's a lot more friction taking the latter approach. However, if we must and if its a consideration of what's deemed to be 'non-productive' - then Christmas lights and the viewing of cat videos on youtube and online gaming comes in far and away ahead of the provision of an open, global, censorship resistant monetary network
Here here.

Rather than Bitcoins energy consumption, shouldnt the focus be on debating whether it has a valuable use or not.

With a limited understanding of all things crypto, it would seem to me, from reading this and other threads, that there is a case for Bitcoin having some uses and therefore some value.

How much use and how much value is not clear to me and so its questionable whether its investable. But on the balance of all that I have read I conclude that it (and other cryptos) are worth a small punt.

Is bitcoin in a bubble? Who knows? It looks to me like its an ever rising price with many ups and downs but trajectory is rising over time. I dont really understand why its rising or what causes its current value.
 
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RetirementPlan

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The point I made was that the energy mix that has facilitated your postings here is far less green than the energy mix that goes into bitcoin mining. I could take a view that the point that you've gone on to make (they're not comparable because of the amount of energy input) is open to challenge if ALL energy input is considered but for expediency, lets not even go there. If we're moving on to consider the amount of energy, then I'd point to the likes of youtube and online gaming as examples. Youtube is very much comparable from that point of view. Online gaming far and away exceeds the total energy input of btc mining.



It's reasonable of you to highlight this. The difference is that in the btc mining energy debate, many are holding it to a higher standard than other energy intensive industries/activities.




From where we stand right now, what makes the most sense is a collaboration between nations for the immediate removal of dirty coal from energy grids. It makes more sense to make greening of the energy grid as a whole the metric - not picking and choosing 'approved' uses for energy. There's a lot more friction taking the latter approach. However, if we must and if its a consideration of what's deemed to be 'non-productive' - then Christmas lights and the viewing of cat videos on youtube and online gaming comes in far and away ahead of the provision of an open, global, censorship resistant monetary network
Not sure that 'energy mix' is the key issue here at all. When bitcoin mining consumes green energy, it makes that green energy unavailable for more routine household usage. A number of Irish providers are proving 100% green energy at this stage too.

You have a point about YouTube and gaming. They would probably consume more broadband than bitcoin mining but less processing power, so I don't think they would be up there in terms of energy consumption concerns. I do have a concern about 'free' services like YouTube, Gmail, Facebook, Snapchat and more. They seem to work against the 'polluter pays' principle as they encourage more and more consumption, to allow the operators to exploit your activity for advertising services.

I really DO think we need to start being picky about uses of energy. Vancouver is cut off from the rest of Canada this week due to a weather event. We are destroying our planet, and we don't have much time to fix it.
Here here.

Rather than Bitcoins energy consumption, shouldnt the focus be on debating whether it has a valuable use or not.

With a limited understanding of all things crypto, it would seem to me, from reading this and other threads, that there is a case for Bitcoin having some uses and therefore some value.

How much use and how much value is not clear to me and so its questionable whether its investable. But on the balance of all that I have read I conclude that it (and other cryptos) are worth a small punt.

Is bitcoin in a bubble? Who knows? It looks to me like its an ever rising price with many ups and downs but trajectory is rising over time. I dont really understand why its rising or what causes its current value.
 

tecate

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Not sure that 'energy mix' is the key issue here at all. When bitcoin mining consumes green energy, it makes that green energy unavailable for more routine household usage. A number of Irish providers are proving 100% green energy at this stage too.
I believe it to be important. At the end of the day, if some folks are singling out bitcoin mining for criticism on the basis of energy use whilst totally ignoring OR not equally being critical of other energy intensive industries, that's double standards. As a gauge to benchmark how one industry is progressing in terms of a shift to renewables, then comparison of energy mix is relevant. It currently demonstrates that bitcoin mining is far more progressive in that respect than other industries.
With regard to the idea that bitcoin mining deprives others of renewable energy - for the most part, that's not likely to be the case on two counts;
1. By the very nature of bitcoin mining, miners have to source the cheapest energy on the planet. If they don't, they're not competitive and they're toast. That means that they are the energy consumers of last resort. Theirs is the first and last bid on energy - they're not going to be bidding up the price as that would make them uncompetitive.
2. Bitcoin mining is unique in that it can consume energy at source. There is no need for it to be close to a population centre - as is the case for many other energy users. Therefore, bitcoin mining can be carried out in remote areas where there is no other user of said energy.

This is all before we consider the potential that bitcoin mining has in terms of acting as a subsidy for renewable schemes that otherwise are not economically viable. It's before we consider that it can utilise energy that is otherwise unused at power plants around the world - and in doing so, it can smooth out the supply/demand mismatch that proves to be a major headache for energy producers.


You have a point about YouTube and gaming. They would probably consume more broadband than bitcoin mining but less processing power, so I don't think they would be up there in terms of energy consumption concerns.
If memory serves me, youtube energy input isn't far off total bitcoin mining energy input. In the case of online gaming, that activity exceeds total bitcoin energy input.


I do have a concern about 'free' services like YouTube, Gmail, Facebook, Snapchat and more. They seem to work against the 'polluter pays' principle as they encourage more and more consumption, to allow the operators to exploit your activity for advertising services.
Indeed - but it doesn't stop at just the FAANGS. Our current economic model encourages consumption in the constant pursuit of 'growth'. For that, people are encouraged to be up to their gills in debt in many western countries and they're encouraged to buy random crap to feed the economy. They're further encouraged to spend because if we don't then savings will wither away via inflation. If people are looking for the real culprit re. climate change and fossil fuel use, its the rampant consumerism that's facilitated and encouraged to feed this Keynesian economic model.

I really DO think we need to start being picky about uses of energy. Vancouver is cut off from the rest of Canada this week due to a weather event. We are destroying our planet, and we don't have much time to fix it.
That countries can't sit down and agree to stop using coal is pathetic.
 
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RetirementPlan

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I believe it to be important. At the end of the day, if some folks are singling out bitcoin mining for criticism on the basis of energy use whilst totally ignoring OR not equally being critical of other energy intensive industries, that's double standards. As a gauge to benchmark how one industry is progressing in terms of a shift to renewables, then comparison of energy mix is relevant. It currently demonstrates that bitcoin mining is far more progressive in that respect than other industries.
With regard to the idea that bitcoin mining deprives others of renewable energy - for the most part, that's not likely to be the case on two counts;
1. By the very nature of bitcoin mining, miners have to source the cheapest energy on the planet. If they don't, they're not competitive and they're toast. That means that they are the energy consumers of last resort. Theirs is the first and last bid on energy - they're not going to be bidding up the price as that would make them uncompetitive.
2. Bitcoin mining is unique in that it can consume energy at source. There is no need for it to be close to a population centre - as is the case for many other energy users. Therefore, bitcoin mining can be carried out in remote areas where there is no other user of said energy.

This is all before we consider the potential that bitcoin mining has in terms of acting as a subsidy for renewable schemes that otherwise are not economically viable. It's before we consider that it can utilise energy that is otherwise unused at power plants around the world - and in doing so, it can smooth out the supply/demand mismatch that proves to be a major headache for energy producers.



If memory serves me, youtube energy input isn't far off total bitcoin mining energy input. In the case of online gaming, that activity exceeds total bitcoin energy input.



Indeed - but it doesn't stop at just the FAANGS. Our current economic model encourages consumption in the constant pursuit of 'growth'. For that, people are encouraged to be up to their gills in debt in many western countries and they're encouraged to buy random crap to feed the economy. They're further encouraged to spend because if we don't then savings will wither away via inflation. If people are looking for the real culprit re. climate change and fossil fuel use, its the rampant consumerism that's facilitated and encouraged to feed this Keynesian economic model.


That countries can't sit down and agree to stop using coal is pathetic.
I've no argument about the other energy usage issues you mention, but it's not an either/or scenario. Bitcoin doesn't get a free pass on energy usage because of other energy issues. It is STILL consuming vast amounts of energy, and for what?
 

tecate

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Bitcoin doesn't get a free pass on energy usage because of other energy issues.
Bitcoin has been badly maligned on the subject so there has been no question thus far of it getting a free pass. The point is that it's entirely the opposite. It's not reasonable for anyone to hold bitcoin to a higher standard whilst not saying a word about all the other major consumers of energy and not acknowledging that they burn a higher proportion of fossil fuels comparatively.
I see plenty of kerfuffle re. bitcoin's energy use. Where's the moral outrage when it comes to the mega energy use of Google, Youtube, Netflix, Facebook, online gaming, household dryers, private jets, the gold mining industry, etc?


It is STILL consuming vast amounts of energy
Nobody ever suggested that it doesn't - maybe not as much as online gaming or the conventional banking system (when all energy inputs are considered ) - but sure, it utilises a lot of energy...no question.


and for what?
And now we arrive at the real issue. The consideration of whether there is utility in bitcoin and the Bitcoin network. Whenever its pointed out that some of bitcoin's energy use is via stranded and curtailed energy use, there's never a response from detractors that they would be ok with bitcoin/bitcoin mining if there was more such use. By and large, they've been opposed to the notion of it before they even considered its energy use - and that's the issue.
What is it for? It contributes towards the security of an open, decentralised, censorship-resistant global borderless monetary network - that anyone on the planet can access should they choose to do so. It seems others don't see the value in that - they're entitled to their own opinions. But putting intensive energy use via folks gaming online, watching cat videos on youtube or watching mindless crap on netflix before the provision of such a network doesn't seem reasonable to me. Each to their own.
 
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