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Over 2 percent of the US’s electricity generation now goes to bitcoin
(arstechnica.com)
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this post was submitted on 03 Feb 2024
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Whatever the motives of those that wrote it, the fact that cryptocurrency uses power wastefully to ensure validity is absurd when we want to reduce climate change.
The concept is great. The execution needs altering.
Is it? I really don't see how cryptocurrency is a good thing for humanity. The name is a problem in and on itself, since it's not currency and can not scale up to be used as one.
I mean this is exactly what the established banking system has spewed out in propaganda all of which have been thoroughly debunked. Only difference is Bitcoin is not a company and does not have a propaganda department to counteract. It relies on people educating and thinking for themselves.
This isn't propaganda and none of this has been debunked. Bitcoin can only handle a theoretical maximum of 7 transactions per second (in practice it's closer to between 3 and 5) and I'm not aware of any cryptocurrency that can handle more than 60 transactions per second. Regular financial transaction networks meanwhile handle thousands of transactions per second while consuming far less power (both in terms of electricity and computing power).
So you have not heard of the lightening network?
Bitcoin lightning solves this scaling problem by keeping transaction data off-chain but using the main chain for security. You lock up liquidity in lightning and then you can send infinite transactions through that channel between you and anybody else on the planet who uses lightning. Transactions settle in seconds and cost pennies in fees. Often less than a single penny.
Lightning adds a layer of complexity and additional failure points. It also centralizes power in the bitcoin network even further.
It doesn't actually change anything about the fact that Bitcoin isn't a currency: Despite the fact that it's claimed to be theoretically able to handle millions of transactions per second, it only handles a few million per month or about half of all Bitcoin transactions after having been around for six years (and most transactions aren't payments for goods or services). The vast majority of online commerce does not accept bitcoin nor any other cryptocurrency, which isn't surprising, given that their values fluctuate wildly. Currencies need, acceptance and stability, neither of which applies to anything crypto.
Complexity, sure, though honestly I find the UX simpler than on-chain payments due to instant confirmation times. It doesn't centralize power at all. Lightning nodes are just as easy to run as Bitcoin nodes, you don't need high-powered servers to run them. They are dependent on main chain for security, which is highly decentralized as it is. If anything, it increases decentralization as miners are no longer the only ones who can earn BTC for supporting the network. Miners must buy expensive ASICs, but you can run a lightning node off a 10 year old laptop and that isn't something that will change anytime soon. Bitcoin started with one of the most equitably distributed resources in the world: energy. And now it's adding the second most equitably distributed resource in the world: bandwidth and storage.
Hard things to get hard numbers on due to the opacity of lightning payments. The theoretical maximum is not based on some made up fantasy, it's based on decent back-of-the-napkin math on how it can scale. The base chain's scalability issues were due to limited blockspace, lightning does not have that problem, there are no real scaling limits on it as a result except "the storage and bandwidth of whatever portion of the internet participates in it" which is massive.
Determining value relative to other currencies is a single API call, that is not complicated. The reason they don't accept it is due to lack of usability for many online merchants in their integrated platform and the belief that many users would prefer not to pay in crypto. Which is weird considering 1 in 5 Americans own crypto, which is a number that continues to grow. I think a lot of them dropped support due to high on chain fees, but lightning has solved that to the point that accepting lightning it 10-1000x cheaper than credit cards for a merchant. That's a savings they can pass on partially to customers as well, which means customers can be incentivized to use Bitcoin. We are just now seeing the effects of that. At the same time, many online merchants do accept and even prefer cryptocurrency. Same with many online contractors. PayPal is a royal pain to use, and so are most other platforms for online international payments. There are some items I would refuse to sell online with PayPal due to rampant buyer fraud and chargebacks. Same reason why when you go on Facebook marketplace everybody refuses to take venmo for so many items.
How many merchants is enough until people are satisfied Bitcoin is actually useful? Idk. As far as I can tell, from Bitcoin detractors, basically all of them. Transaction volume grows, on average, over time, and that trend has not been broken yet. Fees also grow on main chain, which indicates increased demand for chain space since supply has not changed there.
You've clearly never tried to send money between countries that dont have an interconnected bank system. Or has your credit card stolen. Or has to make large transactions outside the bank system, say for a car. Or used PayPal.
The concept of sending money without requiring a third party to be trusted is great. It should not be a store of wealth.or a gambling machine. Enabling cash transfers is it's only purpose. And that concept is good. And what is cash, but government sanctioned ways of transferring currency. The name is apt.
We need to shift to demand shaping. Storing power generated during the day to be used overnight is not particularly efficient, and requires massive pumped storage facilities. We need to use power at the time it is produced. If we do not have sufficient demand at the time of peak production, energy prices will go to zero (or even below zero!) during those times, and there will be no incentive to continue rolling out solar to meet demand earlier in the day, later in the day, and on cloudy days.
We need much more solar rollout to fully meet demand during marginal or even poor conditions, but that much generation capacity is far more than we can use at that time.
We need a massive load that comes online during optimal generation conditions, but which can be shed under clouds or at low sun angles. Something that will give the power companies an incentive to keep rolling out solar even when we have excess optimal generation capacity.
Reducing wastage, increasing base load of renewables, back up storage and peak load usage and interconnected grids are all used. This suggests reduce wastage, which should not be ignored. Bitcoin wastes the energy solving problems that are computationally difficult but not useful. That's wastage.
Agreed.
The need for power is to make it extremely difficult to take over the network. If the power needed was minimal, 1 person or group could easily take over. Power is what keeps it secure and as we enter the AI and quantum computing age, blockchain tech and how they are secured is one way to protect ourselves. Centralized databases are sitting ducks as we have seen with the amount of hacks going on at an increasing pace.
No, it needs non-useful computation to make it more and more difficult to mine. This needs more and more power to do. The power wastage is not required, but is a side effect. There are other methods of securing digital currency. Bitcoin should be seen as a proof of concept at this stage, rather than a complete technology.
The problem is trying to prevent concentration of power and ensuring new good faith actors can enter the ecosystem at any time on a similar footing.
The irony is that the more widespread it is, the less likely for any one entity or group of entities to have control, yet the more total power is being consumed.
This used to be true. Mining pools have now concentrated that governance and specialized hardware has removed the ability for the everyman to mine.
2nd and 3rd generation blockchains will provide the growth in use cases and adoption.
Bitcoin's unique selling point it it's price. It is tulips2.0