Well just because one thing in a space isn't great, it doesn't mean that they all are. There are plenty of alternatives to BTC for example that are much "greener". Granted, crypto is a relatively new technology and some of that stuff needs to be figured out. And whether or not its fake, is in the eye of the beholder. It has value, because we pretend it has value, but that's true for many things. Maybe not be so judgemental of other people's worldviews.
How do you think the dollar keeps its value? Do you understand that the reason it has value is because it’s backed by the US military, which provides peace and stability for industry to consume a vast amount of energy to produce goods that get shipped around using fossil fuel? Have you calculated the total energy expenditure of the entire US financial system, direct and indirect, and then compare it to proof-of-work calculations? No. No you haven’t. Don’t just parrot what the current-day zeitgeist told you to think.
Base demand for dollars is created due to taxation. As the money supply is managed via fractional reserve lending, each new dollar that enters circulation is backed by the demand for repayment of that loan. When someone borrows money from a bank, the bank enters a negative balance in its ledger and the borrower gets a positive balance in their account. This is how money is created. As the loan is repaid, the money is destroyed.
Dollars are fully backed by demand for dollars. It's really quite elegant.
> Do you understand that the reason it has value is because it’s backed by the US military, which provides peace and stability for industry to consume a vast amount of energy to produce goods that get shipped around using fossil fuel?
This is utterly irrelevant. The US military existed for hundreds of years on hard money. World wars were fought on hard money.
> Have you calculated the total energy expenditure of the entire US financial system, direct and indirect, and then compare it to proof-of-work calculations?
Sure, and as a percentage of transaction count, transaction value, or basically any other metric it utterly pales in comparison. [1]
> Don’t just parrot what the current-day zeitgeist told you to think.
I get that this is working econ theory, but is that even meaningful? Do you honestly think people hold dollars because "someone can use it to.pay taxes"?
Technically you don't go to prison. You go to prison for lying about what you owe or cheating. But if you don't pay you generally settle with the IRS and get put on a payment plan or something similar. I know people who have been through this process.
My list of big demand drivers isn’t exhaustive and applies more to the current system than to the gold standard system of the past you’re referring to. Under fiat, the top marginal tax rate was over 80-90% for much of the time.
You have to pay property taxes so yes, getting military protection by a national military for your land is worth every dollar you spend on property tax.
You’re talking about borrowing and lending money, which becomes a moot point, when a foreign country invades your country and burns everything down. That doesn’t happen because we have the military and nukes that act as deterrents. That in turn props up the dollar and allows it to have the value it does.
I don’t get it. All of that energy expenditure not only backs the dollar, but as you say also provides goods, services and a high standard of living to millions of people. The energy expenditure of Bitcoin only backs Bitcoin.
If crypto was actually adopted as a means of buying and selling real world goods, instead of just being held as a speculative asset, then it would consume much less energy and be more efficient than the entire system, namely the military, that props up the value of the dollar. And that’s just the US military. Of course, the reason why you’re able to mine in the first place is because we have peace, due to the military. So calculating becomes a little more complicated than just crypto consumption versus military consumption.
How can you possibly imagine adoption of Bitcoin would end the US army? The US army existed for hundreds of years on the gold standard. World wars were fought on the gold standard.
Exactly, step my step, please explain how adoption of bitcoin would reduce military energy consumption.
You are missing the point. When the us was on a gold standard, the army was not required to create the dollar's value. Now that the us is on a sovereign credit-based system, the might of the military is an integral part of the dollars value, both in the obvious sense that the military protects sea lanes and in the more subtle sense that government debt and the sustained credit cycle goes in no small chunk to the military.
That’s not what I said. It’s simple. Bitcoin has value because of proof-of-work which uses a ton of energy. US dollar has value because it’s propped up by the military which uses MORE energy (more so because there is no more gold standard)
The US dollar has value because the most productive economy ever to exist demands that all taxes be paid using US dollars. The army is a small part of protecting and enforcing that monopoly.
You can say that having a working economy props its currency of choice up but by that logic the dollar and other government currencies are propping up Bitcoin which is dependent on infrastructure of the economies of those nations.
That energy isn’t a fundamental requirement of the dollar as a currency though it’s a function of it but isn’t required. BTC on the other hand requires constant energy to process a fraction of the transactions.
Oh it’s not fundamental? What do you think would happen to the value of the dollar if the military didn’t exist and the US was invaded by a foreign county. Connect the dots.
If we’re going down that route, it’s more accurate to say the military impacts are actually protecting (and impacts assignable to) the economic activity itself not the particular currency it happens to take place in (because they take place in many currencies and affect the prices in a huge net that’s impossible to untangle). So the lack of military ecological costs to BTC are more of a figment of it’s place as largely a speculative asset and small slice of the economic pie, if it were to ‘win’ and become a principal currency it has all the same issues as the dollar or any other currency…
And for calling it fundamental, yes BTC requires burning lots of energy to have a transaction. Even if it goes so that day to day most transactions are lightning based you still have to burn that energy continuously to provide the security for new links in the network.
The value of the dollar depends on the land and property of the united states which is protected by the army. It takes multiple steps to get to "military props up USD".
This is an overly aggressive tone that will cause knee-jerk pushback, but there is an argument that it is exactly the thing we should expect of our government, to correct for externalities.
This is effectively not that different than a company dumping chemical in the local river rather than disposing of them properly. They are encroaching on my rights to a livable planet for their own personal financial gain.
What percentage of cryptocurrencies usage is not PoW? What are the negative environmental impacts of the other approaches? Being better than PoW doesn’t necessarily mean they stopped being wasteful.
I rephrased that first sentence to remove the reference to HN voting. I was simply remarking how the tone will cause people to object to it quicker regardless of the merit of the underlying thought.
Bitcoin is obviously the top. But Ethereum and Cardano are 2nd/3rd and ETH is moving to PoS while ATA already is. Tether is 3rd and is a stablecoin, so it is PoS or PoW depending on the backing contract.
So quite a bit actually. We are talking hundreds of billions in market cap at least.
Imagine living in a country that drops depleted uranium on civilians as part of it's programme to hegemonize its 'real' currency!
Or living in a country that continuously devalues its currency, forcing exponential consumption, thus stealing from the poor to give to the rich and destroying the environment while at it?