[stale2002]

This person is effectively arguing that all of Bitcoins problems would be solved by just using a centralized system.

This is correct, but it misses the point.

The whole point of crytocurrencies is to order transactions WITHOUT a centralized system.

There are many centralized systems already. If you want the benefits and tradeoffs of those, just go use one of them.

The people who do NOT like those tradeoffs will stay with crytocurrencies.

[xg15]

He also argues that those lofty ambitions come with a hefty bit of externalized cost - insanely high energy consumption - that is currently conveniently ignored but is harmful in the long run - for everyone, no matter if they use cryptocurrencies or not.

[stale2002]

It's not externalized costs though. It's just regular costs.

People aren't stealing that energy (well, MOST miners aren't) . They are paying real money for it.

How is spending money to buy something and then using that thing (energy in this case) an externality?

Is me leaving the lights on at my house an externality? I don't think so. Im the one paying the costs.

If you don't want to pay for crytocurrencies, you don't have to buy them.

[techsupporter]

In many parts of the world (and particularly the United States), electrical power is generated through ways that are rather unfriendly to the environment, especially when load is unexpectedly higher. Causing higher demand and, thus, more pollution, is a negative externality that the miner is pushing off onto the rest of the public.

(Yes, some exceptions apply, like buying power from system operators that are primarily based around hydro or wind power.)

[stale2002]

> especially when load is unexpectedly higher

Interestingly, this is actually the opposite situation for bitcoin mining.

Bitcoin miners are usually located right next to massive solar power plants, or hydro generators.

This way, the bitcoin miners use the excess energy, that nobody else was going to use, and they use this "free/excess" energy because it is cheaper.

There is no reason at all to run your bitcoin miner during peak capacity, when electricity prices are high. You just shut off the miners, and start them back up again during the night or something.

Bitcoin mining could even be considered a POSITIVE externality, in some situations, such as when power production is so high, that the power plants sell it for negative dollars (ie, the extra power disrupts the grid, so they need to get rid of it.).

[rothbardrand]

Please define "insane"? Those who oppose PoW and think it uses "too much" energy never give a reason. Seems to be based in basic "we should all be poor hunter gatherers" marxism to me.

Mining is profitable, bitcoin is valuable enough to make it so, and it is valuable because it is doing jobs that people want to pay for it.

By definition, economically, it is not insane in the least.

[empath75]

It seems like eventually the big banks will come up with a cryptocurrency clearing market that works on trust and not proof of work.

[stale2002]

That's not a crypotocurrency though. That's called "having a database".