Major fall in BTC price (16th Jan)

Sunny said:
It doesn't mean that there isn't a more productive use of the energy rather than having massive computers attempt to mine bitcoin....
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Outside of energy used to deliver the necessities of day-to-day living, you could argue that point about practically everything.


Sunny said:
Eh???? Just because it is renewable doesn't mean it is free to produce
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I never said it would be free to produce. Clearly I said Bitcoin mining could put the infrastructure that harnesses and delivers the energy under pressure.


Sunny said:
It doesn't mean there isn't an environmental cost to having to build wind farms and hydro electric facilities.
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True, building wind farms and hydro electric facilities may be an eye-sore, or perhaps disturb the local wildlife, or introduce some other costs. But if it can deliver energy in cleanly, and is renewable, I'm guessing the benefits to the environment will outweigh the 'costs'.
But don't take my word for it, ask the scientists, engineers, environmentalists, investors, governments etc who are pushing this stuff.
 
You can't just leap to 'mass market' use from a standing start - particularly when there's a scaling issue to be resolved. Otherwise, we've already covered that energy usage and sourcing of same is being tackled in different ways ...some of which have already come to fruition others, we can expect to be in play pretty soon.
 
Bitcoin doesn't have to rationalize/justify it's energy use to you nor anybody.
 
tecate said:
I've yet to see a fully worked calculation for traditional banking that covers ALL costs associated with same.
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Same here, but I'm sure we'll all agree that per transaction energy usage is absolutely insignificant by comparison. Just running the Visa network at those rates would require much more power than current world-wide generation capacity can produce. 35x US total generation capacity.

Mining power use doesn't include all costs associated with bitcoin either, though it is likely to be the most significant component.
 
Perhaps some naysayers will propose some sort of central "Department of Electricity-Use" so when one of those darn entrepreneurs want to startup a business they must submit their case to the Dept for approval.
 
I agree, but i think it would be almost impossible to calculate all the costs of those visa transactions.
Running and Labour costs of all those Intermediaries, specialized hardware at each till, regulation and lawyers.
It would be astronomical.
 
Sure...I don't really want to go into all of that - firstly because we don't have all the numbers. Secondly, it's probably just as well we don't!...or we'd be stuck down a rabbit-hole in terms of discussion.
The bottom line is - sure, energy useage is significant but it's being dealt with in various ways. We'll have to wait it out and see. In the meantime, if the network supports the costs of that, so be it. jman0war is right in his comparison re. christmas lights...if it's bought and paid for, then that's an end of it. Those opposed to bitcoin of course believe it to be a waste - but that then routes back to the central argument about the overall value and use of bitcoin.
 
jman0war said:
I agree, but i think it would be almost impossible to calculate all the costs of those visa transactions.
Running and Labour costs of all those Intermediaries, specialized hardware at each till, regulation and lawyers.
It would be astronomical.
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Construction of buildings, employees coming to work everyday, the infrastructure to support the energy supplies, the courts to resolve the disputes, the employees of the courts getting to and from work each day, the high-flying executives on transatlantic flights, the ancillary activities, from stationery supplies to fixtures and fittings, plus the knock-on activities of reporting in print media and its massive usage of paper...the employees of media getting to work everyday....the list is endless.
In the end, all energy use is inter-connected with all other energy use in some shape or form.
Except Bitcoin of course, the naysayers would like you to believe that Bitcoin energy use operates in its own vacuum.
 
I think the "cost per transaction" as presented, is really just capturing the tiniest tip of the iceberg within Visa's network.
Yet that same "cost per transaction" calculation comprises a huge percentage of bitcoin's network usage.

It's really comparing a snipet of a centralized, 3rd party trust-based system; with a decentralized trust-less system based on code and math.
Vastly, vastly different architectures.
 
TheBigShort, let's not forget all the attendant harvesting of identity data, that the existing banking systems perform via such networks as Visa.

That nugget itself opens a massive door of data collection businesses which are then monetized and sold off to all sorts of other companies, which then target those identies with marketing emails and physical junk mail.
It's an absolute dystopia in the US.
People end up buying services to try and stop the junk mail from arriving to their post boxes.
 
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jman0war said:
I agree, but i think it would be almost impossible to calculate all the costs of those visa transactions.
Running and Labour costs of all those Intermediaries, specialized hardware at each till, regulation and lawyers.
It would be astronomical.
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It might be difficult, but it's certainly possible and you can be sure every major financial institution has a very good handle on it. For example, credit card processing fees are higher than many other transaction fees, and it's clear that those 1-2% fees cover all downstream costs. If they didn't Visa wouldn't be reporting $6.7B net profit on $18.36B revenue.
 
jman0war said:
It's an absolutely dystopia in the US.
People end up buying services to try and stop the junk mail from arriving to their post boxes.
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It really isn't, unless you overlook the obvious 'tick this box to opt out of marketing' on credit application forms. Failing that the Direct Marketing Association registry is pretty effective, even if they're not the most popular in all circles as they charge a $2 fee for 10 years coverage. Credit card companies are required by law to make it clear what they do with any data collected.
 
I doubt it.
I would guess that they are very good at off-loading those costs to others.
 
Visa is probably very adept at navigating the world of international finance with a view toward minimizing it's exposure to taxes, as well as reporting requirements.
According to wikipedia it doesn't sound like the cost of visa transactions would be captured in their profit and revenue statistics:

It facilitates electronic funds transfers throughout the world, most commonly through Visa-branded credit cards, gift cards, and debit cards.[4] Visa does not issue cards, extend credit or set rates and fees for consumers; rather, Visa provides financial institutions with Visa-branded payment products that they then use to offer credit, debit, prepaid and cash-access programs to their customers.
 
jman0war said:
According to wikipedia it doesn't sound like the cost of visa transactions would be captured in their profit and revenue statistics
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Which is why I said that they are covered in the transaction charge. To suggest otherwise would imply Visa or the downstream processing institutions are running the service at a loss. I don't believe any of these institutions are so charitably inclined.

The company I work for aren't publicly traded, so accounts aren't as scrutinised as would be the case for those, but we know the per transaction cost of running every application and service, right down to electricity costs per core. That data drives business decisions like where we relocated a significant data center in part to avail of lower electricity costs.
 
Imagine someone today proposed a new point-of-sale payment system and terminal, that would require specialized hardware at a cost of $200 per machine, to be installed at every single til in every shop,newsagent,pub,grocer,hotel etc across 120 countries.

How much would that total?
Hundreds of millions?
A billion?

Not included is the required dedicated phone line rental.
Costs to be paid by merchant.
 
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A lot of card machines actually cost more than that at the moment, many companies will lease these (~€20 a month, but varies depending on scale). So I'm sure many people would love to see these cheaper machines, so long of course that these machines don't stop them processing hundreds or even thousands of transactions per day within seconds.

jman0war said:
How much would that total?
Hundreds of millions?
A billion?
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It'd have to be less than 2% per transaction to have any hopes of competing.

jman0war said:
Not included is the required dedicated phone line rental.
Costs to be paid by merchant.
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Modern POS system have moved away from dedicated phones lines since the days of dial-up!
Obviously, as with all current POS equipment and related expenses, all costs are paid for by the consumer. The same is the case with crypto, which is why it's vital that transaction costs are addressed for widespread adoption to become a possibility.
 
Leo said:
Modern POS system have moved away from dedicated phones lines since the days of dial-up!
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Are you sure about that? I'm guessing that dedicated analogue phone line connections are probably more common than it's assumed.

All of the models of the swipe card machines on this supplier offer Dial-up as a connection media.
https://www.merchantequip.com/processing-equipment/credit-card-terminals/

From their FAQ:
Can I process over my IP connection?
Many merchants have broadband connections for their business and would like to utilize this connection for their credit card processing. The terminals that we offer for use with this type of connection are the Omni 3740 and the Omni 3750 with the ethernet adapter. PC Charge can also be used through a broadband connection, in conjunction with a PC card swiper. Either of these options will provide a lightning fast method for processing your electronic transactions.
Currently there aren't any terminals that can process through any type of connection other than an analog phone line, except the Omni 3740 and Omni 3750.
https://www.merchantequip.com/information-center/processing-faq/process-over-ip/

Obviously, as with all current POS equipment and related expenses, all costs are paid for by the consumer. The same is the case with crypto, which is why it's vital that transaction costs are addressed for widespread adoption to become a possibility.
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But yes i agree overall that the cost per transaction will have to be improved in crypto.
Which is why Layer2 solutions like Lightning Network are under development.
 
http://smallbusiness.chron.com/kind-phone-lines-needed-credit-card-machines-34484.html

I don't know, maybe wireless terminals are more common today than phone lines, but i worked at a Bank during the crisis and they had a lot of legacy hardware in production environments. Would not surprise me to find that the analogue phone lines are still the most common transfer method for credit card processing.
 
No busy retail outlet will want to be on the older dial terminals as transactions take up to 7-8 seconds longer than IP. Some vendors are offering 3/4G terminals now. With some of the terminals you can see on the user screen if it's doing a dial-up.

Ah, it's going back a few years now but I was involved in a project for one of the main Irish banks replacing a customer facing system. This shiny new app was screen scraping 3270 terminals for the back-end data
 
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