[apr]

Why? Doing anything of value requires expending of energy and producing heat, this is unavoidable. Saying that this activity is pointless just because you are not seeing any value does not mean that it is actually pointless. In general anything that people are willing to pay money for is not pointless for someone, otherwise that money would be spent on something else. It is like saying why a farmer needs to drive that big tractor down the field using precious (for whom?) oil and polluting the air whereas I can do things manually on my pea patch just fine. If anything we should welcome higher and higher energy use because it means higher standard of living for the humankind. And just to address 'waste' here, energy is not free so 'waste' that actually wastes resources cannot go on for long lest the waster goes bankrupt.

[roryisok]

There are so many things I could argue with here but I'm tired so I'll just pick one.

> If anything we should welcome higher and higher energy use because it means higher standard of living for the humankind.

Why would it mean that? If we were talking about households using more and more it might, but it might not. My tv uses far less energy than the one I had twenty years ago but there's no chance I'm going back to that heap of CRT junk. Likewise all my other appliances, my car etc. My life has improved as my energy usage has decreased. But even if the opposite were true, it's not households, but industry that in this case is consuming more and more power. An industry that produces no goods, provides no service, does no research, improves only the lives of the direct owners of that industry. It's as if they're building enormous, energy sucking diamond factories, but with the added chance that diamonds might be worthless by the time they have them.

Even if I'm wrong, even if higher energy usage means higher standard of living, that's a short term outlook, because over a hundred year period it will mean a much, much lower standard of living for everyone who hasn't drowned or starved yet

[apr]

You are taking a very narrow view on the energy use here. In modern economy you can think of pretty much any thing as made of energy. You are comparing how much your new tv is pulling out of a socket to your old tv, but did you figure the energy cost of producing that new tv into your calculations? I'd look at an even bigger picture. Like to travel? Now compare how much more energy must be used to go in an airplane fast compared to traveling on foot slow. You mention the car, now the radical thing to do would be to ditch the car completely, but then your life quality invariable would go down. It is great that waste goes down and we can argue that the fact that your old car consumed more fuel tells us that it was wasteful compared to the new one, but note even to cut that waste required energy expenditure in the form of people working on it, computer power for sims, etc, and, of course, manufacture.

And I disagree that higher energy expenditure overall will mean lower quality of life later on. We are swimming in energy even though we currently might not know how to convert some forms of it into productive use. That'll change.

By the way, don't get me wrong, I am totally for cutting waste on the local level just because it frees some of the money (and that is proxy for resources) for other, more productive uses.

[jdietrich]

We're mostly being bitten on the arse by the Jevons paradox. Improving efficiency has a tendency to increase overall consumption.

https://en.wikipedia.org/wiki/Jevons_paradox

[roryisok]

> By the way, don't get me wrong, I am totally for cutting waste on the local level

Did you not just literally say that higher energy usage is itself a good thing?

Also on your point about production: My old tv had to be built, my old car also had to be built. It cost energy to replace them, but it does not equate to higher energy usage going forward.

I do agree with one thing you said though. We're swimming in unharnessed energy right now. If we can swap all the coal plants for fusion then maybe we can afford to waste energy on generating digital money, but right now bitcoin server farms mean more carbon in the atmosphere

[robertAngst]

Its important to stop being black and white here.

You both understand each others points.

[bigphishy]

If there are other falacious points then please give evidence for their inaccuracy, otherwise it appears like you just picked an easy point to refute, but claimed the entire argument was false.

[roryisok]

No. I've got nothing to prove to you, stranger. Arguing with people on the internet is almost as big a waste of energy as bitcoin mining. If you think I'm wrong I'm not going to convince you or that guy otherwise.

[wpietri]

That's not a very good analogy. The way to measure waste is by seeing if you can deliver the same customer value using fewer resources.

If I'm generous with the definition of "value", Bitcoin's main demonstrated value is as a speculative instrument. That is, something people gamble on. There are plenty of things for people to gamble on that consume less energy. Or none at all. For example, they could be gambling on the weather (as the degree-day markets do). There are other practical reasons -- much less common ones --people use Bitcoin, but those too can be done more efficiently.

Doing anything of value does require expending energy. But expending energy is no proof that anything of value is happening.

[SilasX]

It has also demonstrated value in being able to bypass the financial choke points that prevented people from (electronically) donating to Wikileaks.

[wpietri]

Given that Wikileaks now takes credit cards, it doesn't seem like a major use case: https://shop.wikileaks.org/donate

[SilasX]

For a while, credit card processors in the US were pressured by the government not to authorize charges, even if Wikileaks would accept them as payment. That make it effectively impossible for Americans to donate that way.

Even if that’s different now (which I’m not sure it is), there will always be the next important cause.

[robertAngst]

It avoids USD as currency.

The government will keep printing more USD and being opaque...

BTC has 21,000,000 solutions ever ever ever.

(and USD is a decent currency, there are countries with hyperinflation)

[bigphishy]

This is a great point thanks for making it. imho it could be worded better, but it subtaintially invalidates the arguments like "bitcoin can only be used to waste energy and buy buy drugs"

[wpietri]

There's no actual user value involved. "Avoids USD" is almost a religious statement. If one is concerned about volatility, then Bitcoin is a bad choice; it's more volatile than any major currency and most commodities. If one is concerned about the US government's future behavior, there are other major currencies. (And really, a currency is a bad place to park your wealth.) For any legitimate financial aim, there's a better solution than Bitcoin.

[bb88]

> Bitcoin's main demonstrated value is as a speculative instrument.

I think it's primary value is for money laundering and hiding money transfers from the eyes of jealous lovers / spouses / governments.

[wpietri]

Yeah, if you don't count speculation as value (and I'm happy not to), then I think light financial crime is the next biggest use case. Which is interesting in that a lot of money laundering is illegal because although it may be valuable to the launderer, the cash transfered often comes from something where systemic value is dropping. E.g. ransomware only makes the world worse, even if it makes the ransomer a profit.

[soundwave106]

Doing anything of value requires expending of energy, but the way cryptocurrency is right now seems to encourage... inefficiencies.

That farmer driving the tractor down the field using energy in the form of oil is typically massively more productive than the manual pea patch laborer or even the era where "working animals" were helping with a lot of the farm work. Sure, the tractor using energy, but the tractor farmer is overall way more efficient.

It would be interesting to see how crypto's cost per unit compares with a relatively energy inefficient way of monetizing, paper currency and coins. Due to the various costs involved in manufacturing and distributing a coin or bill, I really can't say whether it's more efficient or less (and Google's not helping me here). What I think is fairly obvious is that most electronic cash systems do not have this initial upfront massive energy requirement crypto has, so best guess is from a resource perspective crypto is quite a bit less efficient than most electronic cash systems.

[s73v3r_]

"Doing anything of value requires expending of energy and producing heat, this is unavoidable."

I think the point is that cryptocurrency mining is not valuable, at least not compared to the amount of resources required for it.

"Saying that this activity is pointless just because you are not seeing any value does not mean that it is actually pointless."

It also doesn't mean that it's not pointless.

"If anything we should welcome higher and higher energy use because it means higher standard of living for the humankind."

No. That does not logically follow.

"And just to address 'waste' here, energy is not free so 'waste' that actually wastes resources cannot go on for long lest the waster goes bankrupt."

This also does not logically follow.

[apr]

How would you value mining? What's the figure you'd assign to it? As the activity it is certainly valuable to ensure the validity of the blockchain. In my mind that's the function of the market to assign value. Of course with the technology being so new we can expect fluctuations, but I think eventually it'll settle down to some stable level that is acceptable to all market participants.

[s73v3r_]

"As the activity it is certainly valuable to ensure the validity of the blockchain."

Not at the cost that it currently takes. Personally, I ascribe far, far, far less value (if any) to any cryptocurrency mining compared to using the energy for other stuff, or not using it (and not having the mark up on graphics cards).

"but I think eventually it'll settle down to some stable level that is acceptable to all market participants."

The "market participants" would only be those mining crypto, though.

[apr]

Ah, but "personally" is the operative word here, other people obviously disagree.

> The "market participants" would only be those mining crypto, though.

Not only them. All people who would use bitcoin in some capacity and benefit from it, they all would be participants in that market. Miners could not exists without them, in the end of the day they get their pay from packing transactions into blocks, no transactions - no pay.

[s73v3r_]

Except this stuff doesn't happen in a vacuum. Them deciding to waste a whole bunch of energy on something like cryptocurrency has very real effects on everyone else.

[jacobush]

Ah, but you see their right to do what they want with what they own is holy you see. Can't touch that. That would be blasphemy, which is punishable with spending more of your tax dollars lobbying for stronger property rights and the state machinery to back it up.

[throwaway37585]

> Not at the cost that it currently takes. Personally, I ascribe...

Based on what? And if people aren't getting value from using the blockchain, why are they using it?

> far, far, far less value (if any)

Can you put a number on that, and justify it?

[lmm]

> Based on what? And if people aren't getting value from using the blockchain, why are they using it?

It creates value for individuals at a bigger cost to society - a classic negative externality. Making drug dealing easier is immensely profitable and that's where all blockchain profits eventually come from - everything else is a smokescreen of intermediaries to create just enough deniability to let respectable business participate in the drug trade. It's just like outsourcing manufacturing to countries with lower environmental standards to profit from pollution (another example of something that's negative-value overall, but positive-value for the individual engaging in it).

[throwaway37585]

> It creates value for individuals at a bigger cost to society - a classic negative externality.

In what way?

> Making drug dealing easier is immensely profitable and that's where all blockchain profits eventually come from

Do you have a source for this, or is this just what you believe?

[s73v3r_]

"Based on what? And if people aren't getting value from using the blockchain, why are they using it?"

You're assuming rationality. You're also assuming they're actually paying for the electricity. And you're forgetting that they're not paying for the negative externalities of their energy waste.

"Can you put a number on that, and justify it?"

Take the smallest number you can think of. Now, take a number smaller than that.

[throwaway37585]

> You're assuming rationality.

Then explain why the people using bitcoin are being irrational. Are the miners processing transactions and receiving fees in return being irrational? Are the people using bitcoin to send and receive funds being irrational? Please enlighten us (and them, apparently).

> You're also assuming they're actually paying for the electricity.

They are.

> And you're forgetting that they're not paying for the negative externalities of their energy waste.

Classic case of moving the goalposts. The same applies to any economic activity requiring the use of electricity.

> Take the smallest number you can think of. Now, take a number smaller than that.

Dodging the question, I see.

[chris_mc]

>anything of value

Bitcoin's value (not price, mind you) is still very questionable.

[PerryCox]

Even it's price is questionable. :P

[apr]

And that is totally allright. Question it all you want, that's what the market is for.

[robertAngst]

There are 21,000,000 bitcoin ever ever ever.

If you can see that, you can begin to exclude yourself from fiat money which requires centralized control of currency.

I trust rare numbers more than I trust the United States government.

[roryisok]

> I trust rare numbers more than I trust the United States government

That's such a silly statement. Rare numbers do not control the value of bitcoin, the market does. Your rare number might be worth half what it was in December 2017, and twice what it was a year before that. Tomorrow it might be worth nothing. Or $1000. Or $1. The rareness of the number is about as relevant as the colour of the dollar

[drngdds]

I don't. Do you really want to rely on a currency whose value fluctuates as wildly as Bitcoin's? I like knowing that the $X deposited in my bank account a few days ago will have approximately the same value in a few months or years.

[throwawayqdhd]

This is pretty much the same attitude that will keep Bitcoin out of the mainstream.

Statements like that make Bitcoiners come across as digital survivalists, the internet equivalent of redneck militia.

[mikekchar]

I'm going to play devil's advocate here. I know what you are saying and in general it's hard to argue against it. However, I've personally seen an improvement in my well being at the same time as I've reduced what most people would consider my "standard of living".

I used to have a 3000 sq ft house, a car, a job I spent 3 hours a day commuting to in my car, every labour saving gadget you can think of, climate controlled everything, etc. I even drove to the laundromat frequently to pay someone to do my laundry because I was too busy to do it myself.

Now, I live in a small apartment in the country side, generally only minimally heat and do not cool my apartment (temp ranges from 5C to 35C during the year), I work from home, do not drive, eat seasonal, local food, preserve my own food, etc. Admittedly I got married and my wife does the laundry :-P. The improvement in my life is like night and day.

Like I say, I'm playing devil's advocate and I don't really imagine that everybody would be happy with my lifestyle. However, I really do think that the assumption that more insulation from the reality of nature is not necessarily a "higher standard of living". For me, especially, it's quite the opposite -- which would have been very surprising to the younger version of myself.

Even economically, the modern world is moving inexorably towards a place where "labour" refers to mental labour, not physical labour. For people who frequent HN, I think it's kind of assumed that this all right and proper. However, when I was teaching English in the rural high school in Japan where I now live, most of my students wanted to be fishermen or farmers. But they know that this is the way to eternal poverty. You can't realistically make a living doing that kind of thing. They end up working unhappily in a factory.

As we've fuelled the increased standard of living by reducing prices for necessities, we've created a world where everything needs to be a massive enterprise with high volumes and super low margins. Even the other day I was joking with my wife that I will quit my current job as a programmer and open a shop making artisanal cheese. "How many cheeses do you think you'll have to make in a year?", she asked. "Only about 20,000 I think" was my reply. Again, in my rural Japanese town, only 20 years ago you would have found a tofu maker, a miso maker, a sake brewery, 4 or 5 fruit and veg stores all drawing from the produce of the local area. And while the JA (national food distributor) is great about prioritising local food distribution, gone are the days where you can set up a shop or produce a product for just your local area.

It's the ubiquitous cheap energy that enables this increase in scale. It expands deliverability (I can mail order low temp pasturised milk from 3 prefectures over and have it delivered in a refrigerated truck o_O). It allows super efficient, mega scale operations from far away to under cut local, high labour intensive operations and reduces prices. In may ways it's amazing.

But, I'm not sure "increased standard of living" is actually the best term for it.

[lmm]

Commuting is pure misery, especially driving, and people tend to underestimate the effect of that. Avoiding a 3 hours/day commute is more than enough to explain why you'd be much happier/healthier/... even if everything else in your life had gone downhill. (A happy marriage is also a well-known source of happiness/contentment/etc.). I don't think the change in your wellbeing has anything to do with local cheeses or lack of temperature control or anything like that; if you'd switched to working from home and married but stayed in your climate-controlled big house you'd see the same improvement, maybe even a bigger one.

[roryisok]

Eliminating a 3 hour commute every day would constitute a fairly considerable drop in energy usage

[lmm]

Yeah. It's possible to use energy badly, so human value is something more subtle and detailed than energy usage. I do think it works as a crude proxy though.

[viburnum]

It is pointless.

[throwaway37585]

If it is pointless, why do people use it?