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posted by
janrinok
on Wednesday June 27 2018, @12:22AM
from the my-bubble-is-bigger-than-yours dept.
from the my-bubble-is-bigger-than-yours dept.
As reported in the Evening Standard, the Bank of International Settlements published an annual report with four criteria to continue economic growth. However, it was rather overshadowed by a statement in the appendix (reported here, here, here, here, here and elsewhere) where cryptographic currency was described as a "combination of a bubble, a Ponzi scheme and an environmental disaster".
I agree and so does a Canadian electricity company.
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Bank of International Settlements: Bitcoin is a Bubble, a Ponzi Scheme and an Environmental Disaster
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Wow! Look!! A stray meatball!! Let's interview it!
(Score: 3, Funny) by idiot_king on Wednesday June 27 2018, @02:04AM (48 children)
Blockchain technology in general? No. This puts power in the hands of the PEOPLE, and the capipigs know it. They're squealing in panic over it.
(Score: 0) by Anonymous Coward on Wednesday June 27 2018, @02:52AM (7 children)
Not really. They are looking to get ahead of it and control it. They probably will. Those with power can subsume wealth. It is how they work. It is how mega wealth works. There will be a few new millionares. But that is something they are willing to let happen. You do not fleece people with 2 dollars. You fleece people that think they are smart and have lots of money. That is where real wealth 'creation' comes from.
(Score: 2, Insightful) by Anonymous Coward on Wednesday June 27 2018, @03:06AM (6 children)
Real wealth creation comes from loaning money that didnt previously exist to your buddies/partners/whoever. Not saying bitcoin is the solution but if you dont even understand/believe that simple fact you are going to get screwed over eventually. Of course you could luck out and outlive the ponzi though.
(Score: 2) by captain normal on Wednesday June 27 2018, @03:54AM (3 children)
That might be somewhat true. But you would need muscle to squeeze out the vigorous from the marks. Real wealth building requires acquiring and holding real estate. Nobody is making more land (except maybe Pele in Hawaii).
When life isn't going right, go left.
(Score: 0) by Anonymous Coward on Wednesday June 27 2018, @04:03AM (1 child)
What do you mean "but"? You are literally creating wealth from nothing, like alchemy.
(Score: 0) by Anonymous Coward on Wednesday June 27 2018, @04:43AM
Full faith and credit! Full faith and credit! I want to believe, but since there is no one to have faith in, and credit for bitcoin, I have neither.
This is why I only deal in Dogecoin. I know that if it comes down to it, I caen find that Japanese dog and get my money back. Dog lien. Adverse possession. Woof (or more properly) わんわん.
(Score: 2) by JoeMerchant on Thursday June 28 2018, @12:31AM
The government has your number: land is taxed. If you improve the land so that it earns money, it's taxed on a higher valuation due to your improvement.
The highly wealthy of the past owned vast tracts of land, but real-estate taxation has led to most of those large estates being sub-divided into tiny little pieces.
The only way to hold large tracts of land in Florida these days is with Ag exemption on the taxes, throw some gows on it so your tax liability is reduced by 90%.
🌻🌻 [google.com]
(Score: 2) by JoeMerchant on Wednesday June 27 2018, @12:16PM
The lucky ones are the people who exit before the ponzi is exposed, death is one solid way to exit.
🌻🌻 [google.com]
(Score: 2) by hemocyanin on Wednesday June 27 2018, @03:34PM
It can be that BOTH are bogus.
(Score: 3, Insightful) by JoeMerchant on Wednesday June 27 2018, @03:03AM (38 children)
Agreed. What really should be under attack here is proof of work, not blockchain.
Blockchain (as implemented in most crypto-currencies) is transparency, and IMO a major change for the better.
Proof of work is an environmental disaster, only works if there are a very small number of blockchains using it (as recently demonstrated on Bitcoin Gold and many other alt-coins), and is rapidly driving power and control over these networks out of the hands of "the little people" into the hands of a few rich and powerful groups.
Is it a bubble? Only if there's a mass exit from the market.
Is it a Ponzi scheme? What economic system since the beginning of history wasn't a Ponzi scheme at some level?
🌻🌻 [google.com]
(Score: 0) by Anonymous Coward on Wednesday June 27 2018, @03:08AM (11 children)
How is proof of work an environmental disaster?
(Score: 5, Informative) by arslan on Wednesday June 27 2018, @04:19AM (6 children)
Its the part that takes the most compute power - i.e. mining for the next coin sequence. There's studies out there around how much electricity is used/wasted, hence the environmental disaster.
(Score: 0) by Anonymous Coward on Wednesday June 27 2018, @04:54AM
(Score: 0) by Anonymous Coward on Wednesday June 27 2018, @06:33AM (1 child)
I have a handful of spooge, which took me a half-hour to produce.
Now, all I have to do is find someone else to buy it as "proof of work".
(Score: 0) by Anonymous Coward on Wednesday June 27 2018, @05:37PM
Half an hour? My bukkakke group is totally gonna get rich off JizzCoin, we can all mine one in 30 seconds flat!
(Score: 0) by Anonymous Coward on Wednesday June 27 2018, @10:49AM (2 children)
Do those studies tell you how much energy is used for various other "wasteful" activities like driving to work instead of public transport, playing violent video games, looking at porn, drinking/partying, etc?
(Score: 0) by Anonymous Coward on Wednesday June 27 2018, @01:06PM (1 child)
It is very easy to measure the environmental effects [politico.com].
(Score: 0) by Anonymous Coward on Wednesday June 27 2018, @01:09PM
Did you read what you are responding to at all?
(Score: 4, Insightful) by Anonymous Coward on Wednesday June 27 2018, @05:05AM (3 children)
It's like opening the water faucet and having drinking water just go down the drain, then selling the water meter reading. All it does is use resources without something useful happening.
(Score: 0) by Anonymous Coward on Wednesday June 27 2018, @10:46AM
Puritans have been saying this about nearly everything people like to do for awhile. Over 99% of what people use energy for can be considered "waste". Are you really falling for it in this case?
Also, the energy used for mining s a fraction of a percent of what is just lost to fixable grid, power plant, appliance inefficiencies. Are you really falling for "here is a big number out of context, be scared"?
(Score: 2) by deimtee on Wednesday June 27 2018, @10:59AM
And how is that worse than the amount of energy and resources used by HFT, Wall Street traders, hell any financial system at all?
If we were all perfect little communists you could eliminate an awful lot of wasted resources by just having everybody work for the good of society, and take only what they need from the community resources. The wasted work you could eliminate would include every supervisor, most managers and accountants, every banker and finance wonk out there. We redirect them into productive work and we could colonise the solar system in a decade, and head out to the stars in the next one.
If you cough while drinking cheap red wine it really cleans out your sinuses.
(Score: 2) by JoeMerchant on Wednesday June 27 2018, @12:56PM
Oh, come now, it's better than that, it's more like opening a betting pool on what the last digits of a water meter that reads in nano-liters will read.
I'll argue that there is entertainment value in the speculation: people are having a great time fantasizing about how they've gotten in on the ground floor of the next big thing and they'll be 100x richer than all the other rubes out there who missed the boat. If they'd take a moment to think about it, that kind of fantasy can't possibly come true for everyone, but they don't - so the joyride continues. Just like 1849, the people who are raking in a steady income from the speculators are, on average, going to do much better than the speculators themselves.
🌻🌻 [google.com]
(Score: 3, Interesting) by coolgopher on Wednesday June 27 2018, @04:26AM (3 children)
But what to replace proof-of-work with? Proof-of-stake has rightly been attacked as yet another way of making the rich richer.
(Score: 1, Informative) by Anonymous Coward on Wednesday June 27 2018, @05:41AM (1 child)
You need just better control over central bankers. Transitioning to electronic credits will allow you to trace emission of that particular coin. Publish the numbers, and anyone will be able to detect that their coins came from an undeclared emission. Today we do not have this system; cash has numbers, but it's too difficult (and no longer needed, as cash is obsolete) to track them automatically.
But it is already clear that blockchains are not a good replacement to credits (coins). Transactions should have negligible cost. Credits must operate online and offline. Payments must be processed in thousands of threads by thousands of banks. Payments should be private (known to the payer and to the bank's computer.) Payments should be traceable and recallable, with metadata. There should be no "black holes" (wrong wallets) that eat money forever. We discovered these and other issues during the bitcoin experiment. Time to end it.
(Score: 2) by JoeMerchant on Wednesday June 27 2018, @12:14PM
Proof of work based blockchains. If your blockchain establishes a level of credit, you can hand someone a cryptographic "promise to pay" - same as a paper check, but with a prima facie credit history included. If that credit history is "worth" $10,000 or more, the receiver of a $10 payment for lunch might accept it without a recent network check of credit, because who's going to blow $10K worth of credit just to scam on a $10 payment?
This only works if the creditor (merchant) has some prior acquaintance with the creditee (customer), either directly or through some co-signing agency like Visa, MasterCard, etc.
🌻🌻 [google.com]
(Score: 3, Insightful) by JoeMerchant on Wednesday June 27 2018, @12:06PM
How about dropping the figleaf of anonymity and standing behind transactions with some kind of identity and credit history?
🌻🌻 [google.com]
(Score: 1) by khallow on Wednesday June 27 2018, @04:48AM (20 children)
Well, there are the double spending [qz.com] attacks. Someone rich and powerful temporarily obtained 51% of the hash power and issued fraudulent transactions on Bitcoin Gold. Rich and powerful are always favored in financial schemes because there are usually very powerful economies of scale associated with them.
As to the proof of work, it's natural consequence of a distributed currency. You have to enforce scarcity of the currency or it has zero value as a medium of exchange. There's no controlling party which has an interest in preserving the scarcity of the currency, thus, it falls to computer science and physics to provide an alternative.
As to it being an "environmental disaster" that's sheer puffery. At best, you can say that it has significant negative environmental consequences. That it shares with an environmental disaster. But one gets a vast amount of utility out of that - unlike disasters. In addition to a functional global currency, we have a huge computational experiment on a scale never seen before. And the primary cost is born willingly by the people conducting the experiment. Can you imagine the researchers for the International Space Station or the Large Hadron Collider paying for it out of their own pockets? Not going to happen.
I figure that will happen sooner or later. Maybe several times.
Virtually all of them. What is the primary purpose of an economic system? It's not to give me a bunch of zeroes. It's merely a collective system for satisfying the wants of the participants given their resources. As I noted, virtually all of them do that with some level of success.
(Score: 3, Funny) by cubancigar11 on Wednesday June 27 2018, @04:55AM
If electricity company could start accepting bitcoins for payment, you would see sudden drop in price of gfx cards I am sure.
(Score: 2, Interesting) by Anonymous Coward on Wednesday June 27 2018, @05:03AM (9 children)
(Score: 3, Informative) by khallow on Wednesday June 27 2018, @05:40AM (8 children)
A peeve here. That's 32 TWh and 250 kWh. Watts are a unit of power. Watt-hours are a unit of energy. And that's just not a lot of power.
I guarantee more people are interested in the Bitcoin game than are interested in you staying alive. The mealy-mouth phrase "society doesn't gain anything" really means "It doesn't further my interests."
Sorry, Bitcoin delivered on that.
If we cut back only to activities that benefited society, we'd all be dead in a week or two. The resources of Earth, particularly, energy may be finite, but they are also vast. We can afford those speculators just fine.
(Score: 2, Interesting) by Anonymous Coward on Wednesday June 27 2018, @07:45AM (7 children)
So 1/5th of the anual energy consumption of my household per transaction is "not a lot of power"?
(Score: 0) by Anonymous Coward on Wednesday June 27 2018, @11:06AM
The average daily electric energy consumption in the developed world is about 20 kWh per day. Unless you live in some third world shit-hole, or somehow manage to use only one seventh the energy of your compatriots, you are a lying sack of shit.
(Score: 1, Disagree) by khallow on Wednesday June 27 2018, @11:12AM (5 children)
At $0.10 per kWh, it'd be $25. So yes, not a lot of power.
(Score: 4, Touché) by TheRaven on Wednesday June 27 2018, @11:59AM (1 child)
sudo mod me up
(Score: 1) by khallow on Wednesday June 27 2018, @12:23PM
(Score: 3, Informative) by Anonymous Coward on Wednesday June 27 2018, @12:05PM (2 children)
Whatever you are smoking must be some good shit; would you like to share? That is an insane amount of power to process one transaction. 250kw/h is enough to fully charge 3 electric cars! I would say in a month, I probably have 20 or so transactions. 20 * $25 = $500 / month in transaction costs. Your .10 kw/h is on the cheap side in the US. I pay more than that.
Lets do some math. A nuclear power plant near me outputs about 1600MW. It has 2 reactors. A typical nuclear reactor generates 800MW. 20 transactions per month is 5MW/h per month. There are about 720 hours in a month. 800 * 720 = 576,000 MW/h per month of output from a nuclear reactor. I am a card carrying tightwad, so at 5MW/h per month, a nuclear reactor powering nothing but bitcoin transactions can only support 115,200 people. The average residential customer in the US uses about 900KW/h per month. A single reactor can power 640,000 average homes. If all those homes used bitcoin for everything, they would need an additional 5 nuclear reactors! That is at tightwad spending levels! I am being conservative!
If everyone used bitcoin for everything. The US would have to generate more than 6 times the electricity we currently do!
Not a lot of power!?!?!?! Seriously!?!?!
(Score: 1) by khallow on Wednesday June 27 2018, @12:26PM (1 child)
I gather most transactions happen through secondary markets which normally don't trigger actual bitcoin transactions on the primary one. There are many problems with secondary markets (fraud, theft, etc), but they do work to massively reduce the cost of transactions.
Or conduct most transactions through secondary markets.
(Score: 0) by Anonymous Coward on Wednesday June 27 2018, @01:24PM
That 6 times thing is funny since the number of transactions per block is just a choice. JUst change the blocksize from 1 mb to 1 gb, problem solved: https://news.bitcoin.com/gigablock-testnet-researchers-mine-the-worlds-first-1gb-block/ [bitcoin.com]
The only problem is the price of memory limits who can then run the software. If memory became 1000x cheaper tomorrow this would be done immediately. In reality memory seems to get about 100x cheaper per decade: https://jcmit.net/mem2015.htm [jcmit.net]
The total ignorance about the topic of the people who are making these arguments is ridiculous.
(Score: 5, Informative) by JoeMerchant on Wednesday June 27 2018, @12:04PM (8 children)
Puffery, perhaps, but not so sheer. Just assuming the orders of magnitude are even close: Bitcoin uses as much electricity as Austria, Ethereum as much as Iceland. The recent record high Bitcoin trading volume was $550M in an hour. NASDAQ's average volume runs $100B per day, at least 10x higher by any manipulation of the numbers. More telling are the number of trades which can be handled per-unit-time. Bitcoin runs around 2000 transactions per 10 minutes, under 300,000 per day, while NASDAQ runs around 12M transactions per day, 40x higher - and NASDAQ trading volume is concentrated during a 6.5 hour period, 5 days a week - about 20% of the time, so during peak NASDAQ is processing about 200x as many transactions as Bitcoin. Visa processes ~150M transactions per day, or 2000x as many as Bitcoin, and can handle much higher peak volumes.
There are many efforts underway to reduce the power used per transaction, but they have some orders of magnitude to go before they can handle Visa levels of transactions without consuming more electricity than ALL other activities on the planet combined.
If we (the human race) are idiotic enough to spend even 10% of our energy on financial transaction verification, not even accounting, just integrity of exchanges, we deserve to have our coastal cities flooded.
🌻🌻 [google.com]
(Score: 1) by khallow on Wednesday June 27 2018, @12:36PM (7 children)
The simple solution is to simply fix the system so that transaction costs aren't so high. Bitcoin developers already have massive incentive to do that due to the present high costs of transactions.
(Score: 3, Touché) by JoeMerchant on Wednesday June 27 2018, @01:00PM (3 children)
If you think that spending as much electricity as Austria and Iceland combined is "o.k." for entertainment, then sure, we haven't had the disaster yet.
If a super-hero story "rift to another dimension" opened up outside Berlin and our crack scientists had to devote that much electrical power to keeping it from destroying the world, people would be screaming bloody murder about the disaster, how many billions of tons of CO2 are being released into the atmosphere to keep it from growing, etc.
🌻🌻 [google.com]
(Score: 1, Interesting) by Anonymous Coward on Wednesday June 27 2018, @02:32PM
Have you done any research or do you just blindly consume what the media tells you? It costs about 5 kWh per GB, a movie is about 3 GB and lasts about an hr[1], so assume a streaming rate of ~3 gb/hr. One billion hours of content is streamed per week just on netflix. [2]
Here is another one claiming 24 million TB streamed by netflix in 4 months[3]:
Its claimed bitcoin mining uses ~ 71 TWh/yr [4], which is ~1/10th of that used for entertainment via netflix alone. Netflix is about 40% of total streaming viewership [4], so the total is going to be ~ 1200-2000 TWh/year. And that is just entertainment via streaming.
[1] https://aceee.org/files/proceedings/2012/data/papers/0193-000409.pdf [aceee.org]
[2] https://techcrunch.com/2017/12/11/netflix-users-collectively-watched-1-billion-hours-of-content-per-week-in-2017/ [techcrunch.com]
[3] https://www.cordcuttersnews.com/netflix-streamed-over-24021900-terabytes-of-data-in-the-4th-quarter-of-2014/ [cordcuttersnews.com]
[4] https://digiconomist.net/bitcoin-energy-consumption [digiconomist.net]
[5] https://techcrunch.com/2017/07/05/u-s-cord-cutters-watch-more-netflix-than-amazon-video-hulu-and-youtube-combined/ [techcrunch.com]
(Score: 1) by khallow on Thursday June 28 2018, @04:13AM (1 child)
As has been noted, entertainment consumes a lot more than that - which indicates the importance of entertainment.
Well, I wouldn't be one of those people complaining about the mild side effects of saving the world.
(Score: 2) by JoeMerchant on Thursday June 28 2018, @11:45AM
At the moment, Cryptocurrencies appear to be consuming perhaps one order of magnitude less energy than streaming video entertainment... but the prime difference I see there is: streaming video entertainment has more or less reached market saturation, whereas cryptocurrency transactions are 5+ orders of magnitude short of current financial transactional volumes.
There's also the "comparable alternative" view, where people sitting home streaming video are, on average, consuming less energy / emitting less CO2 than they would otherwise be if they were, for example, driving motorcars into the city for a night on the town. Here again, POW cryptocurrencies falls many orders of magnitude on the undesirable side of "comparable alternative" forms of transaction processing.
In 2013, it was a trivial thing, experimental, investigational, interesting, worth exploring. At this point it needs serious examination before it grows another order of magnitude larger, and if past performance is any indication of future growth, that might not take more than a year or two.
Freedom of choice: yes. Freedom to suffocate the biosphere because people enjoy speculation/gambling? A line needs to be drawn.
🌻🌻 [google.com]
(Score: 0) by Anonymous Coward on Wednesday June 27 2018, @01:11PM (2 children)
What the hell are you talking about [politico.com]? Maybe you're a fan of the technology, but that doesn't justify trying to hand-waive away the amount of energy it takes and sweep it under a magic "secondary transaction" carpet.
(Score: 0) by Anonymous Coward on Wednesday June 27 2018, @02:33PM
Proper secondary markets won't happen with buttcoin because of the lack of trust in the sender not to double spend, and the inability to make change.
(Score: 1) by khallow on Thursday June 28 2018, @04:23AM
What does justify it is that energy is incredibly cheap and plentiful and we have better things to do with that energy than conserve it. I really don't care that Bitcoin consumes as much as a few small countries. If energy were truly a thing of great expense and/or value, bitcoin miners would consume less of it.
Second, the secondary markets are not magic. They're just facets of the bitcoin system that have been around almost as long as Bitcoin has.
(Score: 2) by Snow on Wednesday June 27 2018, @03:06PM
A Blockchain is nothing without something to secure it. There are so many people out there that say "I don't like bitcoin, but I like the Blockchain".
There is nothing special about a blockchain. Merkle trees have been around since 1979.
What makes bitcoin special is the incentive mechanisms. Miners get paid to process transactions. If they mine invalid transactions, they lose money. Miners get paid in bitcoin, so they are incentivized to be good citizens. It is very expensive to retroactively change the blockchain (because of the PoW) and has no guarantee of success. PoW means there is a real-world cost associated with securing the chain. Being a bad actor costs real money.
Bitcoin is greater than the sum of it's parts.
(Score: 0) by Anonymous Coward on Wednesday June 27 2018, @07:45AM
Power-to-the-people = The country that subsidizes energy and heavy silicon the most.