As usual when this tired argument is made, you aren't considering the Lightning Network, which enables cheap and energy efficient send/receive for Bitcoin.
Even if this didn't exist, Bitcoin isn't going anywhere. Its value could be dramatically reduced by banning fiat on-ramps, but it will still be around. Cryptocurrency is a genie out of a bottle, you aren't going to put it back in and pretend it never happened.
As usual when this tired counter-argument is made, you aren't considering alternative solutions (cryptocurrencies) that are already working with Consensus algorithms like (variants of) Proof of Stake...
Forget Bitcoin, Lightning Network was announced years ago and it's still far from being used in production. Also this doesn't solve the Proof of Work problem Bitcoin has, the higher its value the more energy is used, a second layer solution isn't going to fix this issue, it's only increasing throughput.
Since developers of Bitcoin are extremely conservative and censoring, I doubt Bitcoin is going anywhere in the mid to far future. Other projects are just faster and can potentially deliver their promises.
PoS is far from being perfect and has it's own sets of issues (ex: rich gets richer, hackers that end up getting large sums of coin now also have control over the network, custodians also have large control, etc).
> Forget Bitcoin, Lightning Network was announced years ago and it's still far from being used in production.
It is being used in production with growing adoption (1ml.com) and it is what they are using in El Salvador.
> Since developers of Bitcoin are extremely conservative and censoring
It's a decentralized network where nobody controls it, developers can't push changes willy-nilly. Bitcoin isn't trying to be everything to everyone and that's ok. You can have other layers and projects which enable these fast moving ideas (most of them are going to be deprecated sooner or later because they'll turn out to be bad ideas anyways). Once these projects prove it works, Bitcoin can incorporate them. Most of these projects that are faster sacrifice decentralization to a certain extent and if we didn't care about decentralization, then why even bother with crypto, we already have Paypal/Visa/etc.
There is still active development, but https://strike.me uses the lightning network. There are several other apps built on top of the lightning network.
I use the lightning network almost every day listening to podcasts with the Breeze app https://breez.technology/
Hasn't Lightning been in the works for 4+ years? Is it actually progressing towards usability? I remember hearing about it during the 2017 speculation frenzy and block size controversies, when people raised the exact same concerns about Bitcoin transactions being slow, expensive, and carbon-intensive.
It is fully functional with growing adoption (1ml.com), you can try some of the lightning wallets available (https://lightningnetworkstores.com/wallets, personally I'd recommend Phoenix Wallet).
Does that 148 kWh also consider the energy spent on running the offices, energy spend on commute for VISA employees and all the other things that keep this system working ?
No, but neither does the 1200 kWh for Bitcoin also consider that energy. Bitcoin won't obviate the need for mortgage loan officers to decide whether or not to loan someone a million dollars(' worth of bitcoin) to buy a house, nor will it eliminate or even reduce military spending. So please stop insisting that you tally that up on the side of fiat, because that means you're no longer comparing apples and oranges.
Bitcoin is naturally deflationary. It encourages saving over spending, which suppresses frivolous consumption. I'd be curious to see how this compares to the energy consumption required to produce all the useless junk most people buy (including myself sometimes).
I unironically believe a deflationary currency is the only way to avoid climate collapse. That could be Bitcoin or something else, but what it can't be is a central authority who has the option to infinitely increase the money supply to maintain 'economic growth'.
It's not deflationary. The supply will increase for the next hundred years at least. The odds favor that this inflation, coupled with a lack of capital return, will underperform real investing.
The proper comparison for "investing" in bitcoin is investing in stocks, many of which ARE deflationary by decreasing their shares outstanding every year.
People are no more incentived to save by bitcoin than they are by real investment. To reiterate, it's been sound money mgmt to defer consumption and invest for the past few hundred years at least.
The payment to bitcoin miners comes from bitcoin holders. At current prices it is billions of USD per year, paid out by inflation to burn fossil fuels. I'd rather get paid on my investment than pay.
The supply 'increases' are already growing negligible as the current supply is 18.6mil / 21mil. Yes, it will continue to offer miners rewards, but that is cut in half every few years. People also lose their keys quite frequently. It is hard to estimate, but at some point 'misplaced' crypto will surpass the amount generated by block rewards, making it deflationary in a literal sense.
Also, 'holders' are not paying miners. Miners make money from transactions, as well as block rewards.
As for your stated preference, it is your freedom to avoid cryptocurrency, just don't obstruct other people's financial freedoms.
The vast majority of miner profits come from "mining" new bitcoin, mostly using fossil fuels. These are then sold on the open market.
There's a reason that in GAAP accounting, when a company issues new shares (dilution), it is recorded as a loss to the equity stockholders in the income statement.
I see you didn't bother to respond to the point that people have always been better off saving than consuming.
Bitcoin's cost is wealth destruction. That energy could be used for something with a real payback - housing, infrastructure, healthcare, technology - but is instead burned with nothing to show for it but extra carbon emissions and some landfilled junk gear.
I didn't respond to that particular point because you are erroneously conflating saving with investing. Inflationary currencies gear economies towards 'growth' which is understood to be good but, without guidance / direction, this leads to frivolous spending, bubbles, and massive waste. How is this good for the environment?
With a somewhat deflationary currency, an 'investment' worth putting money into has to be worth more than the money is appreciating in value. This cuts the fat as you have to be more picky as an investor, and banks have to be more picky as a lender. However, right now there is virtually no reason to save in this sense, you must throw your money at assets like equities or real estate to keep your purchasing power. You must feed the machine, so to speak.
I think you'll find your argument on the wrong side of history when it comes to saving the planet from climate change. We need a drastic reduction in general consumption and waste while we work to reverse the damage we have done and find much more efficient means of production. We aren't going to get that without a total reversal of monetary policy, alongside strong fiscal incentives for climate conservation. It is far-fetched, but possible for a cryptocurrency to achieve this.
I agree to disagree, but I appreciate the measured tone and willingness to engage, which isn't what I've come to expect from from bitcoin advocates.
I'd be happy to chat about it orally sometime; email me at [email protected] if you're up for it.
I'll admit that growth, especially absent pollution pricing, is often negative for the environment. But unchecked population growth without tech-driven economic growth isn't great either, as one can see from numerous countries. To win in the marketplace, one often has to do things cheaper. Excessive profits or inefficient processes are more burdensome for the environment. It shows up in mansions, jetsetting around the world, etc. Investment in new ventures attacks this problem.
Investment funds innovation and meets real needs. Inflation which forces people to invest is good. India is country where the people are heavily overweight gold instead of real investing. I believe it has reduced their national prosperity, in the same way bitcoin will reduce global prosperity.
You can achieve this without Proof of Work, but unfortunately Bitcoin will probably stay forever with this Consensus algorithm (considering the circumstances).
Bitcoins energy consumption is disproportionate to the value for the societey it has.
How do you evaluate energy consumption vs value for society? Some see it this way: Bitcoin has a revolutionary potential to bring the global south out from under the financial thumb of the global north. We can see glimmers of this unfolding now in El Salvador as they implement Bitcoin as legal tender.
Also, given that point-of-source green energy is cheaper & more politically stable than fossil fuels, shouldn't we expect to see greener and greener Bitcoin mining? In fact, China banned Bitcoin mining in it's coal regions and then more recently throughout the country. Meanwhile, El Salvador plans to build mining facilities using geo-thermal power.
I never understood this argument. These employees are real, living people. Even if Bitcoin rules the world and VISA ceases to exist, these people will continue to go to (different) offices. So, isn't that extra energy expenditure not really tied to the banking system, it's just office work?
BTC Ledger =/= BTC consensus. If the protocol can be made pure proof of stake while maintaining the same availability and security guarantees this is no longer an issue. However, this is against the best interest of miners.
The VISA transaction is effectively how most people will transact with dollars.
If you're seriously unsure about how much more energy Bitcoin uses than cash, when I last did the math, Bitcoin mining consumed more energy than the entire US Mint by a few orders of magnitude. It's not even close.
