[rspeer]

It doesn't make sense because it's a negative-sum game.

The only thing people are actually using Bitcoin for right now is to sell to other people for more than they bought it (or maybe to sell for less than they bought it to launder money).

The total amount made by the buyers and sellers is zero (because every buyer is buying from a seller), and there has to be a constant inflow of new buyers just to cover the cost of the hardware and power.

[fauigerzigerk]

You're right that crypto currencies are not productive assets and as such they are a negative-sum game.

But they have utility. At this point I think mostly for gamblers and criminals as you said yourself.

But they also have utility for all sorts of tinkerers, and via that route they may eventually become more useful to the rest of us.

[TeMPOraL]

Yeah, it's wrong to deny cryptocurrencies have utility. They do.

The real problem is the associated upkeep. If it were to get comparable in use with fiat, I believe Bitcoin would quite literally cook us all on this planet. The energy characteristics of crypto are unbounded from top, and this is seen as a feature - unlike normal financial systems, which try to minimize it.

[fauigerzigerk]

I agree that it does look disproportionate. But my understanding (I'm by no means an expert) is that it could theoretically become less disproportionate as more transactions are being processed.

Proof of work is not a per transaction cost. It's a per block cost that doesn't depend on the number of transactions per block or the size of the block.

But still, the way the incentives are structured in this whole game seems somewhat perverse. Otherwise we would never have gotten to a point where bitcoin mining has a country sized energy profile.

[stordoff]

It's not a per transaction cost, but as I understand it they are closely related and there is no upper bound on it. As the number of transactions per block and the value of the currency increases, it becomes more profitable to mine, thus it makes more economic sense to invent more power into it.

[nikanj]

Or, sell it after stealing it / mining it via botnet / etc.

[lrns_]

Tell that to a Venezuelan, who can provide a family with a single antminer.

It will make sense to you in 5 years.

[pjc50]

How exactly? Who is doing this? Withdrawal from exchanges into Venezuela? Who is buying bitcoins for Bolivars?

How did the family get the capital asset of an antminer in the first place? How are they paying for electricity?

How is this sustainable? Why is a random family able to compete with businesses that have real economy of scale, rather than having their margin driven to zero?

[lrns_]

https://hackernoon.com/extortion-police-raids-and-secrecy-in...

https://coin.dance/volume/localbitcoins/VEF (example of local trading)

Remittances, family abroad (easy via BTC to circumvent restrictions). Bitcoin is stable compared to a hyper inflation of +2,616%.

[rspeer]

Your feel-good story about Venezuela is unrelated to what I said.

[lrns_]

Excuse me. Was more a reaction on "The only thing people are actually using Bitcoin for right now is to sell to other people for more than they bought it (or maybe to sell for less than they bought it to launder money)."