For someone who is not particularly interested in bitcoin I spend an awful lot of time talking about bitcoin. In part that's because I have serious Someone Is Wrong On The Internet Syndrome, and can't help myself getting into arguments with strangers. The widely acknowledged unpleasantness of the bitcoin community actually helps here, though; it's easier to walk away from a conversation with someone whose opening gambit is "lol have fun staying poor" than it is with someone who seems actually nice and intelligent.
Excellent piece. The misalignment of incentives for energy use that you identify is a deeply troubling fundamental feature of Bitcoin. There is a small window of hope in that not all stranded energy markets are stranded by geography. Much of the intermittency problem in alternative energy sources could be considered chronologically stranded and Bitcoin mining might serve as a load balancing mechanism. That is only a partial solution to the problem though. To keep an ever more valuable Bitcoin from sucking up an ever larger portion of global energy demand, Bitcoin mining will probably be heavily regulated, perhaps even nationalized. Power to the people.
A couple of apparently underappreciated points about bitcoin.
- Rather obviously, all the electricity bills and Lambo's that have been bought on the back of bitcoin have been paid for by people putting fiat currency into bitcoin. All is fine until that stops (If it quacks like a ponzi scheme....).
- While there can only ever be 21MM bitcoins, there is no limit on the number of instances of bitcoin that can be created. It is just open source software and even someone only a little smarter than me can create a functionally identical Bitcoin2. So who will buy Bitcoin at $40k when they can buy an exact equivalent Bitcoin2 for $4? Will the prices equalize? It would be a fun experiment and might create interesting havoc. And once the prices do equalise, there are plenty more opportunities to build Bitcoin3....n.
Excellent piece.
Excellent piece. The misalignment of incentives for energy use that you identify is a deeply troubling fundamental feature of Bitcoin. There is a small window of hope in that not all stranded energy markets are stranded by geography. Much of the intermittency problem in alternative energy sources could be considered chronologically stranded and Bitcoin mining might serve as a load balancing mechanism. That is only a partial solution to the problem though. To keep an ever more valuable Bitcoin from sucking up an ever larger portion of global energy demand, Bitcoin mining will probably be heavily regulated, perhaps even nationalized. Power to the people.
I think in some years(probably a decade) they do all the mining using quantum computing. So we don't have to worry a lot.
A couple of apparently underappreciated points about bitcoin.
- Rather obviously, all the electricity bills and Lambo's that have been bought on the back of bitcoin have been paid for by people putting fiat currency into bitcoin. All is fine until that stops (If it quacks like a ponzi scheme....).
- While there can only ever be 21MM bitcoins, there is no limit on the number of instances of bitcoin that can be created. It is just open source software and even someone only a little smarter than me can create a functionally identical Bitcoin2. So who will buy Bitcoin at $40k when they can buy an exact equivalent Bitcoin2 for $4? Will the prices equalize? It would be a fun experiment and might create interesting havoc. And once the prices do equalise, there are plenty more opportunities to build Bitcoin3....n.
Do you think that Tesla, a company focused on renewable energy, just bought a billion dollars worth of an asset that's "boiling the oceans?"