[api]

I'm on the fence about whether this is correct or not. The question in my mind is: do you include military spending in the cost of maintaining a fiat currency and if so to what extent?

Fiat currencies are backed in part by the power of the governments that issue them, so is defense spending a form of "proof of work" for them? If the US government disbanded its military would the USD hold any value for very long? Same goes for any other fiat... e.g. if the PRC disbanded the Chinese military would the Yuan retain much value?

If fiat currencies require a constant demonstration of credible military (and police) capability, that's a rather enormous cost and brings with it quite a bit of resource use and pollution.

(I would guesstimate that Bitcoin would still be less efficient than USD but that the margin would be smaller.)

[XorNot]

Do you think that the international links, data centres and facilities full of ASIC miners are not dependent on military protection?

[z77dj3kl]

Do you honestly think that the value of Bitcoin would not tank if the value of the US Dollar tanked?

[api]

We're talking about the relative efficiency of Bitcoin vs. conventional finance in an energy or other cost per transaction sense. I'm asking whether some amount of military spending should be counted in the cost of maintaining a fiat monetary system.

If people were using Bitcoin as currency directly its value would remain equal to whatever people were willing to trade for it. Obviously if all people were willing to trade it for was USD it would become worthless, but that's not the point in this thread.

Bitcoin has other problems as a currency but that's not the topic of discussion here. Some other cryptocurrencies try to solve these, such as it being too deflationary or lacking functionality.