[librish]

2.3% to support so little economic activity is just insane.

This is the type of tragedy of the commons issue where regulation is needed. For any one actor they can justify spending infinity energy as long as their ROI is positive.

There are enough justifications out there that it's easy to convince oneself that you're doing the world a favor ("I'm just librating finance and fighting the good fight against the central bankers").

[bcrl]

As I posted earlier this week:

Each bitcoin mined in the US directly results in more than 264 metric tonnes of CO2. This is based on the following rough calculation:

    1.65 billion metric tonnes * 2% / (900 bitcoins per day * 38% * 365 days)

Based on 2022 CO2 emissions from https://www.eia.gov/tools/faqs/faq.php?id=74&t=11 .

[earthling8118]

The amount of economic activity it supports is somewhat of a poor measure without further information. Yes, it is a complete waste in its current form. But that doesn't strictly mean that the electricity usage will scale with the percentage of economic activity that takes place using it. I would be interested in knowing how this number would change if it supported most economic activity. Surely it would go up, but I doubt it would do so linearly.

[sgu999]

I wonder what kind of shape it could take with the current mindset of putting weak signals to steer the market (ie. carbon tax, etc.). Mining bitcoin is far from being the only example of resources waste for pure profit... I can only imagine a vague but serious threat of being accused of ecocide to have an effect.

[Drblessing]

Right? Only 2.3% to support a decentralized, permissionless, censorship-resistant currency is such a bargain!

It's almost like if it wasn't valuable to society than it wouldn't make economic sense.

And here I thought America was a market economy.

[pton_xd]

> 2.3% to support so little economic activity is just insane.

It kind of is!

But honestly that's the price we pay for not having sound monetary systems. At this point BTC is, functionally, just an alternative asset that hedges against inflation. As governments print increasingly more money, and the amount of BTC stays the same, each BTC becomes worth more. It's very simple. The demand for such an asset is apparently quite high; high enough to spend up to 2.3% of total US energy.

If the world operated on non-inflationary systems there would perhaps still be a small need for BTC, such as providing liberty in committing financial transactions, but I doubt it'd be nearly as big as it is today on that basis alone.

[JumpCrisscross]

> BTC is, functionally, just an alternative asset that hedges against inflation

Bitcoin is a terrible inflation hedge. This is quantitaitvely demonstrable over its entire existence. It's a good gambling asset, and in my opinion, should be taxed as such.

[rcxdude]

In some countries, that would decrease the taxation! (In the UK, for example, gambling income is tax-free)

[Workaccount2]

Hedging against inflation with a wildly volatile asset. Genius.

You might lose 30% of your value, but hey, you didn't lose that 3.2% to inflation!

[sak5sk]

you can't be serious, have you seen how much bitcoin is up?

[MichaelZuo]

It already exists it’s called gold. There are some hassles associated with physical storage and transport of gold but not 2.3% of total US power consumption worth of hassles.

[VikingCoder]

To people who love gold, I always want to ask what you think should happen if Elon Musk claims a meteor one of his robot ships landed on, that's got 1000 times more gold inside it than there is gold on Earth.

What do you think should happen?

[MichaelZuo]

Why should anyone respond and speculate based on a hastily written hypothetical? You need to put in some genuine writing effort for folks to take it seriously.

Offer some substantial, falsifiable, claims/arguments/etc.

[VikingCoder]

If someone wants the world economy to be based on a commodity such as the metallic ore gold, then I wonder what they think would happen to the world economy, and more importantly all of the people in it, if all of a sudden, the world supply of the metallic ore gold went up by three orders of magnitude, all owned by literally one person.

Do they think people would continue to use the metallic ore gold as their currency, and they would just accept the insane inflation? And the fact that 99.9% of the world's wealth is now concentrated in the hands of one person?

Or do they think we would rapidly switch to a different commodity as our currency?

Also, why should anyone respond? Because they think the topic is interesting. I thought that would be clear. If you cannot imagine the nightmare scenario and you need "genuine writing effort" for you to imagine it, then it sounds like you don't think the topic is interesting. Maybe just let other people hash it out.

[MichaelZuo]

You might as well ask folks to speculate what if a pulsar by happenstance sends out a gamma ray burst that ends all life on Earth, what then?, etc...

It doesn't add any value to the discussion to speculate on such remote possibilities far into the future.

[ben_w]

This kind of thing is why we stopped using the gold standard.

On the other hand, BTC prices changes are so wild that it makes gold seem like a constant-value asset.

[FireBeyond]

> But honestly that's the price we pay for not having sound monetary systems.

Are you implying that BTC is a "sound monetary system"? Because many people will argue with that.

[pton_xd]

Not at all, I'm saying BTC is an asset that hedges against unsound monetary systems.

[lottin]

No, the international monetary system is perfectly functional, as evidenced by the fact that it supports the global economy just fine.

Bitcoin is neither an alternative to the international monetary system, nor a hedge. It's a joke. A gambling instrument for financially illiterate people.

[t0bia_s]

It's not. Fiat money drives inflation.

The adoption of fiat currency by many countries, from the 18th century onwards, made much larger variations in the supply of money possible. Since then, huge increases in the supply of paper money have occurred in a number of countries, producing hyperinflations – episodes of extreme inflation rates much greater than those observed during earlier periods of commodity money.

https://en.m.wikipedia.org/wiki/Fiat_money

[lottin]

Hyperinflation is extremely uncommon, especially in developed countries, and when it occurs it's always caused by incompetent or corrupt governments, not by the currency itself.

[pton_xd]

> No, the international monetary system is perfectly functional, as evidenced by the fact that it supports the global economy just fine.

Obviously it is functional, I never said it wasn't!

Inflationary systems have a lot of benefits -- they encourage consumption, erode the value of debt over time, etc. But there are downsides, too. Savings and purchasing power are destroyed over time. They encourage investment in hard assets like real estate and BTC to protect wealth. And so you get some waste, too. There is no free lunch.

[lottin]

The international monetary system isn't a deflationary system per se. It can accommodate a variety of monetary policies, including deflationary policies.

As far as bitcoin being a hard asset, this isn't entirely correct either. Not only does bitcoin not generate income, but it consumes income. You see, the bitcoin network is extremely expensive to maintain, and the owners of bitcoins are the ones who bear the cost. Either they pay with fees -unlikely-, or they'll pay by losing value in their investment -most likely. There's no way around it.

[teachrdan]

> At this point BTC is, functionally, just an alternative asset that hedges against inflation

You are completely ignorant. I'm not saying that in a mean way, I mean it in the purest sense possible: You have no idea what you are talking about.

According to the graph below, BTC goes up when inflation goes down. That is the opposite of a hedge! It proves that Bitcoin is not valuable due to "not having sound monetary systems."

Bitcoin is obviously a speculative asset whose value goes up when inflation is low and people have money to spend on speculative assets. The fact that we use 2.3% of our nation's electricity on it is unjustifiable.

https://charts.woobull.com/bitcoin-inflation/

[pton_xd]

> According to the graph below, BTC goes up when inflation goes down. That is the opposite of a hedge! It proves that Bitcoin is not valuable due to "not having sound monetary systems."

> https://charts.woobull.com/bitcoin-inflation/

That graph is charting BTC price to BTC supply inflation, not general economic inflation (which is what I'm talking about).

[teachrdan]

I apologize, I think you may be correct there.

Could you please refer me to a graph showing the relationship between BTC and inflation? Because inflation over the last 12 months is relatively low, at 3.4%, while BTC is very high, at $47,621. Then again, BTC hit a high of $65,000 back in November of 2021, when inflation rates were indeed high at 6.8%.

This seems to suggest a weak relationship at best between BTC and inflation rates.