[stormbeta]

And this is exactly why I'm so skeptical of cryptocurrencies in general. There doesn't appear any viable way to make them work as currencies that doesn't either have horrendous externalities, simply replicate what existing currencies already do (often poorly and with many downsides), or often both.

I don't think it's a coincidence that even a decade plus later, the primary use cases for crypto still seem to be grey/black market deals, speculative investments, and pyramid schemes.

[abecedarius]

> way ... that doesn't either have horrendous externalities

The CO2 emission externality need have nothing to do with Bitcoin or any other proof-of-work chain. Tax carbon at whatever level makes sense and Bitcoin will adjust. (As I understand it, even currently Bitcoin mining mainly uses renewable energy, because it's cheaper; and it's trending cheaper still.)

The externality is at the power plant, not the use. Banning a use is like basing your server's security on client-side Javascript.

[jsiepkes]

> Tax carbon at whatever level makes sense and Bitcoin will adjust.

> The externality is at the power plant, not the use. Banning a use is like basing your server's security on client-side Javascript.

How would that work? Applying the same carbon tax on farming as on bitcoin? You always need to differentiate on use. Otherwise we could also just have a single income tax and be done with it. However taxing food as much as a Ferrari doesn't really make sense.

[abecedarius]

The whole purpose of taxing carbon is to reduce carbon emission to the efficient level and shift energy consumers away from uses that are not worth the cost in carbon emission.

Say you're a bitcoin miner powered by a coal plant. A carbon tax is imposed. The price of your power goes up. Your competitors, powered by solar, are unaffected. Maybe you keep going at the higher price; more likely, if the tax was set at anything like the genuine externality, you shut down. Possibly you keep going for a while, winding down your ops at this location but moving any new ones to find affordable power. Sucks to be you if you didn't anticipate the tax (which seems implausible, they won't announce it effective next Monday), but Bitcoin itself will hardly notice.

Say you're a farmer also in coal-plant-land. Aren't farmers powered more by internal-combustion engines than grid power? That should be carbon-taxed too in this world, and that's good: you want farming, where it's climatically most expensive, to shift to less-CO2-costly methods and crops. Farming spends energy on a much wider set of tasks, some of them more essential to the output than others, and some outputs more inelastically demanded than others. For some of them you adjust, for some you continue and pay the higher price. The ones you adjust were not worth the carbon cost; the ones you don't were. You have to charge your customers some amount more, depending on how essential the coal turns out to be in your case. Maybe, like the bitcoin miner, you stop farming, or shift to some sort of less-intensive organic farming; maybe you don't. Either way, it's more likely the right decision for the planet! We stopped pretending that dumping carbon is side-effect free.

You don't "differentiate on use" by politicians and bureaucrats deciding what's naughty or nice. They don't even know! It's an incredibly complicated problem! They further have no real incentive to do it even vaguely right, rather the opposite: any competent politician can look to the public like they're public-spirited while favoring concentrated interests. Was the FDA just stupid for banning the J&J vaccine the other day? No, they're fundamentally misaligned with the public interest.

Re painting cryptocurrency as a nobody-needs-it Ferrari, see https://news.ycombinator.com/item?id=26654767

[Moodles]

Not to even mention the even more useless buzzword application of blockchains to business to pump up stock prices. I'd go as far to say that cryptocurrency is the most "useful" application of blockchain to date. And even then, it appears only truly useful for dark web transactions and pyramid schemes. Why else would we use a wildly fluctuating currency that takes 20 minutes to send a payment?

[cwkoss]

Dollar hegemony has many horrendous externalities as well.

[danimal88]

While that -might- be true, the question is whether the dollar, the RMB, the CAD, and every other currency have anything like the -direct- pollution cost of bitcoin, which my understanding is that they do not

[cwkoss]

I think the dollar undoubtedly has several orders of magnitude lower direct pollution costs, but also have several orders of magnitude higher indirect costs.

It's a pretty tangly web, so hard to know what to lump in as a comparison but in the superlative case consider: the federal reserve, many bank/FI departments tasked with securing and transferring money safely, auditing (public ledger has many benefits for transparency and reporting), money transfer industry, international relations, lobbyism, US military dominance, etc.

Bitcoin has zero employees, probably only thousands of people working on Bitcoin-interfaced systems. The network uses a large amount of electricity, but that's kind of it - there are few other costs to account for. All of those industries above collectively employ millions of people - should we account for only organizational energy consumption or do we also account for salaries and thus private energy consumption of all of the individuals necessary to support dollar hegemony?

I think it would be really interesting to find a number for "for each dollar in existence, how much is spent per year preserving the dollar's position as the global reserve currency?" How does this number compare to inflation? If it is greater than inflation, does that mean that dollar hegemony is unstable and its fall is inevitable?

[meowkit]

Can you share how Bitcoin has a direct pollution cost?

Last I checked BTC primarily uses excess electricity in the cheapest regions of the world. What if BTC only ran on solar power?

[cwkoss]

Of the estimates I've read, it seems like BTC uses about 60% green energy. Which is about double the 'green-ness' of the broader energy economy, but it's still a significant amount of 'direct pollution' from carbon sources.

[gonehome]

I remain cautiously optimistic about the underlying idea and core technology (even if there's a lot of pyramid scheme snake oil surrounding it).

Interesting applications do exist: https://news.ycombinator.com/item?id=24242005

Its applications are more interesting in countries that have unreliable governments and inflationary currencies (for now).

It also does provide something new (one way 'cash' transfers across a decentralized network).