| If the economic reasoning behind this is correct... http://www.truthcoin.info/blog/pow-cheapest/ ... than fiat must according to the same line of reasoning also consume resources when it is placed in circulation. That's because if new money $X has value Y, then players in the economy will spend up to Y in resources to be first in line to get $X when it is issued. One way this may occur is via wasteful government spending (proof of waste?) since the usual path involves the purchase of government debt with newly issued currency and then its entry into circulation via government spending. Another mechanism might be complex financial shenanigans to extract small gains from the cascade of economic transactions (HFT, etc.) that occur as $X is initially lent by banks. All these activities consume vast amounts of energy. I'd like to see someone calculate the energy consumption of the entire fiat currency system including central banks, the financial industry, and government enforcement for starters. Furthermore according to the reasoning put forward in the above essay this activity must be "useless," or its usefulness would be priced into it and X more of it would be done where X is the value of its utility. How useful is high frequency trading? How useful is government spending on weapons we will never use? These activities are as useless as Bitcoin mining and may be more harmful in other ways. Warfare kills people. In other words if the reasoning in the above article is correct then money may be intrinsically expensive. Gold is issued via gold mining, etc. Tangent: if this is true then this explains the apparent political and economic impossibility of small government under current regimes. We need a monstrous, bloated government to burn the work required to issue money. |