tech

U.S. steps into China's bitcoin breach

18 Comments
By Francois Picard and Joshua Melvin

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18 Comments
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All that equipment and energy just to verify transactions. It is as if someone came up with the most needlessly complicated and wasteful method imaginable to do a simple thing like verify transactions took place. Lunacy on a grand scale with absolutely no value to society. None.

4 ( +7 / -3 )

These kind of mining contribute nothing to society. Except needing large amount of electricity and create a lot of electronic waste.

3 ( +5 / -2 )

This is a waste of resources.

4 ( +6 / -2 )

Cryptocurrencies are the wave of the future, that will free man from the oppressive thumb of the banks and government.

But some people like living under the thumb of the banks and government, so they criticize cryptocurrencies.

-2 ( +3 / -5 )

The photo immediately at the top of the article immediately made me think of a scene from that old movie "Brazil".

-1 ( +1 / -2 )

So you "mine" a Bitcoin by doing a bunch of math to confirm certain transactions took place before thousands of other Bitcoin miners can do the same thing you are doing. And the creation of that Bitcoin will create the perceived need for another round of these redundant calculations by all those thousands of Bitcoin miners in another race to be first. Boy, talk about the ultimate self licking ice cream cone!

0 ( +2 / -2 )

Cryptocurrencies are the wave of the future, that will free man from the oppressive thumb of the banks and government.

Con artists and their flim-flams are as old as humanity. This is no replacement for a well managed currency.

1 ( +3 / -2 )

Con artists and their flim-flams are as old as humanity.

Eh? Cryptocurrencies are decentralized and not operated by anyone. Whom exactly is the supposed wizard of oz you're dreaming is behind this?

This is no replacement for a well managed currency.

There's no replacement for checks.

There's no replacements for cash.

There's no replacement for barter.

These are all things people claimed during the past paradigm changes, and yet here we are, with people still bartering, still using cash, still writing checks, still using credit cards and now also using cryptocurrencies. I'm not sure why'd you think this is going to somehow be different.

1 ( +2 / -1 )

So you "mine" a Bitcoin by doing a bunch of math to confirm certain transactions took place before thousands of other Bitcoin miners can do the same thing you are doing.

Not exactly, but as an approximation it works.

And the creation of that Bitcoin will create the perceived need for another round of these redundant calculations by all those thousands of Bitcoin miners in another race to be first.

Yes. It's a financial motivation. The basis of capitalism, which you as American grew up in, and if you are in Japan, still live within, so you should understand how capitalistic motivations work.

For example, think about gold miners. People go and buy a plot of land where they think there is gold, and go out there to try to find it. They may or may not find anything. But if they do, they can make a lot of money. If/when they do, other people see them and also want to go mine gold. So yes, people see gold being mined and sold, and that creates a perceived 'need' to go and potentially redundantly dig up a piece of land that has no gold in it.

Boy, talk about the ultimate self licking ice cream cone!

Most of capitalism is. Really, most of humanity is. We could all live in single family huts, hunting and growing the food only for our own family units, being purely independent. But as humanity, most of what we do is built up in support of doing the things we do. The "self-licking ice cream cone" as you say.

For some reason you're singling out Bitcoin though.

-1 ( +0 / -1 )

@Strangerland

In theory, I don't have issue with the concept of bitcoin, the implementations and mining processes are what bother me. It is intensely energy inefficient, and bitcoin transactions alone consume more energy than many small countries. In a world battling an ongoing climate crisis, it is morally indefensible to be supporting this kind of process.

Solve that, and I would have no particular objection. At least until we progress past the need for money, which won't be anytime soon.

3 ( +5 / -2 )

Cryptocurrencies are the wave of the future, that will free man from the oppressive thumb of the banks and government.

Hilarious stuff.

The U.S government could ban bitcoin in an afternoon and will do if it ever becomes obvious that its use threatens the U.S dollar. Same goes for any of these other currencies. With the sanctions sytem the U.S has in place, nobody on American soil will go near it with a ten foot pole.

-3 ( +1 / -4 )

Claiming crypo uses load of energy, and thinking that "real money" is in some way created and managed without using any energy is extremely naive. Paper and metal money? Credit card transactions? You think those things run on magic or something?

-6 ( +1 / -7 )

@Mat

Obviously not, but it's a matter of scale. Printing paper money does not consume even close to the staggering amount of energy of bitcoin. The total annualized energy consumption of Bitcoin is roughly equivalent to the entirety of Poland. To compare it to traditional currencies it looks even worse, a single bitcoin transaction has the carbon footprint the equal of almost two million visa credit card transactions.

and hell, that is only of a single type of cryptocurrency, albeit the most prominent. There is no way you can argue that traditional currencies are even close to bitcoin in terms of environmental impact.

1 ( +3 / -2 )

For example, think about gold miners. People go and buy a plot of land where they think there is gold, and go out there to try to find it. They may or may not find anything. But if they do, they can make a lot of money. If/when they do, other people see them and also want to go mine gold. So yes, people see gold being mined and sold, and that creates a perceived 'need' to go and potentially redundantly dig up a piece of land that has no gold in it.

There is a huge gold mine a few miles from where I live that is closed because the price of gold is too low to support the cost to extract and refine it from ore. If you really understood money, you would understand why no nation on Earth has a specie based currency. Every nation that tried, and a lot of them did, was forced to give it up eventually simply because you could not create new gold/silver/sea shells or whatever fast enough to support loans to grow new businesses and in the process grow your economy. This did not become such a problem until the industrial revolution. UK tried it and gave up. Netherlands tried it and gave up. The US was on a gold standard for ages but effectively ignored it as banks lent money without restraint as there was either no Federal Reserve or it was so timid there was effectively no central bank guiding monetary policy. Read a book by John Kenneth Galbraith titled "Money, Whence it Came, Where it Went" and learn the truth instead of clinging to all the lies on the internet.

-1 ( +0 / -1 )

BitCoin is not a digital currency. It is an artificial digital resource. It's value depends upon supply and demand, like rare-earth metals - supply from mining and demand from crypto investors.

Digital currencies are much simpler, have no impact upon the environment and can be linked to national currencies. Their great benefit is that they can be global, so people in nations with badly run economies can secure their savings pegged to USD or JPY.

It would be a terrible idea to regulate digital currencies in response to BitCoin. It would be like regulating the design of EVs in response to steam engines.

-1 ( +0 / -1 )

BitCoin is not a digital currency. It is an artificial digital resource. It's value depends upon supply and demand, like rare-earth metals - supply from mining and demand from crypto investors.

Bitcoin suffers the same fatal flaw that gold and silver suffer. The value varies up and down dramatically and the total amount is limited by the ability to "mine" it. Businesses like mine what a currency who's value is not subject to wild swings. Businesses and households need a currency with a value that is stable over the long term to permit planning, saving and to allow borrowing to be affordable. As a business person you do not want the value of your currency to decline because when that happens, prices fall and consumers hold off buying thinking if they wait, the price will drop further. The sudden reduction in demand combined with a falling value of the commodity used for your currency can set of a chain reaction that leads to a deflationary death spiral. No, something like Bitcoin is not going to replace a well managed national currency for the same reasons both gold and silver were abandoned as currencies.

0 ( +1 / -1 )

Bitcoin suffers the same fatal flaw that gold and silver suffer.

Um, what? Gold and silver have held their value for centuries, and if society ever crashes, they're the ones who will hold their value, not any FIAT currency.

And you call them fatally flawed? Um...

-1 ( +0 / -1 )

Um, what? Gold and silver have held their value for centuries, and if society ever crashes, they're the ones who will hold their value, not any FIAT currency.

And you call them fatally flawed? Um...

Growing a modern economy requires the ability of banks to loan money. if your currency is a commodity that must be mined, like gold, silver or Bitcoin, there is never enough to support the loans necessary to grow the economy of a great nation with a large economy. Tying a nation to a specie currency means loans sufficient to grow an economy are not possible. What happens in practice is that banks make loans anyway, loans not tied to specie and the resulting money in the loan is effectively equivalent to paper currency. Over time the amount of paper currency, really not actual paper but entries in spreadsheets and data bases are so vast in comparison to the stock of specie or now Bitcoin that the gold, silver or Bitcoin standard becomes effectively null. This is the fatal flaw of all physical commodity based currencies and why they have been abandoned in every case. That same fatal flaw affects Bitcoin. And like gold and silver, the price in trade varies widely over time, making it an unreliable store of value over time. Another interesting problem with gold and silver is that since both have uses in industry, when their value in industry exceeds their value as a currency, they are immediately melted and used for their industrial purposes. Read Galbraith's "Money, Whence it Came, Where it Went" and learn.

0 ( +0 / -0 )

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