[ceilingcorner]

When people say "Bitcoin uses so much energy, it must be shut down!" I like to remind them of a simple fact: the amount of energy and military resources used to ensure the petrodollar's global dominance. It's not even a comparison.

[imtringued]

That military protects more than the dollar. It also protects all the real resources that give the USD value.

From a practical perspective Bitcoin is effectively a virtual, self declared nation state but the only thing that exists within that nation is Bitcoin itself. Thus military expenses in the form of Bitcoin mining only cover a small subset of protection offered by conventional military.

Because of this, most Bitcoin proponents are extremely narrow minded, they think the currency equates the entire nation, therefore the USD is equivalent to the entire US and only protecting the USD is equivalent to protecting the entire nation.

Every day people run into the same problem with rent control. They believe there are no real resource constraints represented by the price, therefore they believe changing the price alone is enough to solve the problem. Yet they never realize that prices are just information used to allocate scarce real resources. If information is manipulated and no longer reflects reality then it has become a lie and therefore serves nobody except the one who told the lie.

Okay now that we have established that currencies are information that reflect the allocation of real resources, then what real resources does Bitcoin allocate? It allocates a share of real resources around the world based on the people who bought and sold it. The irony is that these real resources are being protected by their respective governments, thus the existence of the US military (and all other militaries) is an essential part of Bitcoin's current valuation.

[siwatanejo]

> The irony is that these real resources are being protected by their respective governments, thus the existence of the US military (and all other militaries) is an essential part of Bitcoin's current valuation.

Sadly this is true, but not for long. Bitcoin adoption is still very small but it will grow. Once it grows to cover the vast majority of merchants in the world, the next flip of a switch will be in people's minds: they will start valueing things in bitcoin (or bits, or satoshis), instead of USD, EUR, etc. (In pretty much the same way people switched from drachmas to euros recently...)

And once that happens, people will stop thinking of the fiat monetary value of one bitcoin (or bit, or satoshi), and then your statement will not be true anymore.

[LegitShady]

I think your scenario requires that governments not influence the monetary policy of their countries, which is far removed from reality. We already see china cracking down on it, and the subsequent reaction in the market.

No country is going to give up its control of monetary policy in exchange for cryptocurrency - there will simply be digital currencies also controlled by governments. We already see this happening. The result will be even more traceable, controllable transactions - not this anarcho currency you're envisioning.

[siwatanejo]

Actually thanks to the creation of CBDCs, the switch to bitcoin will even be faster IMO, because thanks to CBDCs people will get used to paying things with crypto, but they will see that using CBDCs instead of bitcoin is a bad decision that hinders the purchasing power of their savings. But exchanging CBDCs with bitcoin is much easier to do than exchanging fiat with bitcoin, so the switch will happen faster!

[LegitShady]

All CBDC transactions will be centralized and tracked, allowing perfect understanding of what they're used for. When the government disallows bitcoin/etc because of constant scams, changes to its structure, or just to various cryptos from manipulating monetary policy, all of the transactions will be tracked and the government will know who spent what on bitcoin.

CBDCs are literally just government currencies with a million times better tracking than the current banking scheme.

It isn't going to make bitcoin easier, it's a direct threat to every advantage bitcoin has, while still having the utility of being exchangeable for actual goods and services, something bitcoin lacks except maybe on the dark web.

CBDC are what is going to kill the wild west of crypto, the way the centralization of everything on the internet has killed much of the wild west of the internet.

Imagining that centralizing and improving tracking will somehow make the wild west come faster is not paying attention to how things have gone so far, and the actual aims of making a CBDC. It's not to give up control of monetary policy, it's to get it back.

[siwatanejo]

> When the government disallows bitcoin/etc because of constant scams,

That's a big when. Also, which government? The only ban on bitcoin that can be effective is the one in which all countries in the world collude, otherwise holders will move jurisdictions (to stop getting robbed from the government via inflation).

> all of the transactions will be tracked and the government will know who spent what on bitcoin.

Hahaha and now you tell me how? If this was easy to do, then technologies such as PayJoin or what Wasabi wallet implements would have been cancelled already. No government can stop this.

[hanniabu]

> That military protects more than the dollar. It also protects all the real resources that give the USD value.

That's really no different than bitcoin. With USD a ton of energy is used to protect what backs it, which is physical resources. With BTC a ton of energy is used to protect what backs it, which is the chain.

Military also protects against external threats (like other countries). Mining also protects against external threats (like bad actors).

[LegitShady]

I think this is far removed from reality - if you have rockets incoming would you prefer crypto or iron dome? Pretending building real world military capability is the same as crypto is a word game, not reality.

[hanniabu]

If you live in a country with hyperinflation or an oppressive government, would you prefer to succumb to that or to live beyond those means? They each serve their purpose.

[lasagnaphil]

I agree with your criticism on the current petrodollar system, but I still don't understand how Bitcoin could replace it. I've yet to see a crypto enthusiast who seems to really think about the implications about world trade purely done in Bitcoin. And the "there was the gold standard back then, it's going to be similar" argument doesn't work, it has historically ended in total disaster and countries which abandoned the system sooner has recovered from the Great Depression more quickly. Right now a Bancor system that's designed to balance imports and exports between countries seems like the more convincing route to achieve peace while continuing global trade. Any ideas?

[logicchains]

>And the "there was the gold standard back then, it's going to be similar" argument doesn't work, it has historically ended in total disaster and countries which abandoned the system sooner has recovered from the Great Depression more quickly.

Historically prior to the 1900s pretty much everywhere was on a gold or silver standard of some sort.

[strangeattractr]

Bitcoin enthusiasts often say this because they know the energy question is one that Bitcoin can never answer but that doesn't mean it's a good one.

The US has national interests economic and strategic that exist independently of the reserve status of the US dollar. The sprawling US military infrastructure does not exist to preserve the status of the dollar, it exists to protect these interests. The US doesn't operate bases in Germany and Japan for the dollar. Or do you really believe that should Bitcoin replace the dollar as the international reserve asset, these military bases around the world would be closed down?

The importance of the petrodollar is vastly overstated and the reserve status of the dollar has far more to do with the liberal attitude the US takes to foreign capital flows and the size and depth of US economy and consequently its capital markets. Mercantilist economies such as Japan and China would be unwilling to accept foreign capital flows appreciating their currencies and making their exports more expensive largely because of the domestic political issues this would cause.

[almost_usual]

All it takes is world peace, so simple to solve..