Bitcoin is unsustainable, according to Vice

[CuntChocula]

@johnyj:
1. Bitcoin is no more scarce than Beanies, and getting less scarce by the minute. Every ten minutes, actually. As in every ten minutes 25 more BTC mined out of thin air.

2. If "work" (turning electricity into heat, the Rube Goldberg way) is what makes BTC valuable, why would BTC value fluctuate?
If I spend days boiling water & then freezing it in my freezer (turning electricity into heat, the Rube Goldberg way), will my water become more valuable?

[franky1]

2. If "work" (turning electricity into heat, the Rube Goldberg way) is what makes BTC valuable, why would BTC value fluctuate?
If I spend days boiling water & then freezing it in my freezer (turning electricity into heat, the Rube Goldberg way), will my water become more valuable?

because bitcoin value is a combination of factors. cost of production. trust in its security and ultimate 21m cap scarcity(math) and price speculation..

[AtheistAKASaneBrain]

The first thing I have done is press ctrl+f and search for "lightning", 0 results found.
Those guys don't know jack shit, Vice is known for their sensationalist and overblown headlines, these guys are not very different from gawker and the rest of "we have satoshi everyone!" type of journalism. "According to Vice" actually made me laugh.

[CuntChocula]

@franky1:
I'm glad you're discovering colors and stuff, but your drawing makes little sense.
If it did, BBQ coin would still be worth the electricity & math that went into it (assuming BBQ is worthless & dead, haven't checked).

[Succubus]

More and more journalists trying to say something smart about bitcoin and they just have no luck!

[franky1]

@franky1:
I'm glad you're discovering colors and stuff, but your drawing makes little sense.
If it did, BBQ coin would still be worth the electricity & math that went into it (assuming BBQ is worthless & dead, haven't checked).

speculation of BBQ dropped off first not completely, but it sent people into worry that they would not be secure as the price was dropping..and so the trust dropped off.. not completely, but very low... and then desire to mine dropped. leaving only a very small amount of price of math and speculation.. but that to eventually went to 0

[CuntChocula]

@franky1:
I'm glad you're discovering colors and stuff, but your drawing makes little sense.
If it did, BBQ coin would still be worth the electricity & math that went into it (assuming BBQ is worthless & dead, haven't checked).

speculation of BBQ dropped off first not completely, but it sent people into worry that they would not be secure as the price was dropping..and so the trust dropped off.. not completely, but very low... and then desire to mine dropped. leaving only a very small amount of price of math and speculation.. but that to eventually went to 0

Which leaves me wondering what your picture means, in terms of addressing "what gives BTC value."

You've clarified that it's not the sum total of electricity which was turned into heat by miners.
Still unsure what the "math" stripe means -- how is that quantified? Did it vanish along with trust?
And still not sure why "speculation of BBQ dropped" -- can this also happen to Bitcoin?

[jonald_fyookball]

@franky1:
I'm glad you're discovering colors and stuff, but your drawing makes little sense.
If it did, BBQ coin would still be worth the electricity & math that went into it (assuming BBQ is worthless & dead, haven't checked).

speculation of BBQ dropped off first not completely, but it sent people into worry that they would not be secure as the price was dropping..and so the trust dropped off.. not completely, but very low... and then desire to mine dropped. leaving only a very small amount of price of math and speculation.. but that to eventually went to 0

Which leaves me wondering what your picture means, in terms of addressing "what gives BTC value."

You've clarified that it's not the sum total of electricity which was turned into heat by miners.
Still unsure what the "math" stripe means -- how is that quantified? Did it vanish along with trust?
And still not sure why "speculation of BBQ dropped" -- can this also happen to Bitcoin?

Math and electricity isn't literal on the graph.  Obviously "math" doesn't
"increase" over time... and electricity would be related to hash rate but wouldn't be linear.

It's just a style of demonstration.

[johnyj]

@johnyj:
1. Bitcoin is no more scarce than Beanies, and getting less scarce by the minute. Every ten minutes, actually. As in every ten minutes 25 more BTC mined out of thin air.

2. If "work" (turning electricity into heat, the Rube Goldberg way) is what makes BTC valuable, why would BTC value fluctuate?
If I spend days boiling water & then freezing it in my freezer (turning electricity into heat, the Rube Goldberg way), will my water become more valuable?

If Beanies can be send on internet anonymously, and have limited supply and have a mining cost, and free entry of production, e.g. anyone can make it, then I guess it will have some value just like any other alt-coins. But since bitcoin already occupied this market segment, the competition is hard

Fluctuation of the price is caused by speculative capital, but they also follow the fundamentals. When they anticipate a large increase of demand when they forecast the difficulty is going to rise (difficulty is a good measure for demand since mining is the lowest cost to acquire pure clean bitcoin), they will start to drive the market price to start a round of bubble

Bitcoin's major demand comes from 3 area: Secure and annoymous long term value store, anti-inflation, world-wide instant transaction. If your boiled ice block can do the same thing, I guess it will also become valuable

[Ya-ing]

Never thought about it, but in the case that there ends to be a very wide adoption, there will be lots of power compsumption and bandwith used just in updating the blockchain from a user to another. That is true.

[CuntChocula]

@johnyj:
1. Bitcoin is no more scarce than Beanies, and getting less scarce by the minute. Every ten minutes, actually. As in every ten minutes 25 more BTC mined out of thin air.

2. If "work" (turning electricity into heat, the Rube Goldberg way) is what makes BTC valuable, why would BTC value fluctuate?
If I spend days boiling water & then freezing it in my freezer (turning electricity into heat, the Rube Goldberg way), will my water become more valuable?

If Beanies can be send on internet anonymously, and have limited supply and have a mining cost, and free entry of production, e.g. anyone can make it, then I guess it will have some value just like any other alt-coins. But since bitcoin already occupied this market segment, the competition is hard

Fluctuation of the price is caused by speculative capital, but they also follow the fundamentals. When they anticipate a large increase of demand when they forecast the difficulty is going to rise (difficulty is a good measure for demand since mining is the lowest cost to acquire pure clean bitcoin), they will start to drive the market price to start a round of bubble

Bitcoin's major demand comes from 3 area: Secure and annoymous long term value store, anti-inflation, world-wide instant transaction. If your boiled ice block can do the same thing, I guess it will also become valuable

1. I can't send Beanies through the internet, though your bitcoin isn't soft and cuddly. What does this have to do with scarcity?
2. My boiled ice hasn't lost 2/3rds of its value over the past couple of years, so it most certainly beats Bitcoin as "store of value."
Again, you haven't answered my question: Is my boiled ice more valuable now that I wasted a bunch of electricity and my time put work into it?

[franky1]

Math and electricity isn't literal on the graph.  Obviously "math" doesn't
"increase" over time... and electricity would be related to hash rate but wouldn't be linear.

It's just a style of demonstration.

its the TRUST in maths that increases over time.
EG
trust that the difficulty is so high it would cost millions to attack the hashes. and that new methods of random key generation make private keys more secure
and the trust that the code isnt going to be obsolete in 1 year increases..

as for the electric.. miners obviously mine. and they dont just produce heat, they produce hashes.. and as the difficulty increases the cost of hashing increases.. and so the electricity(hashing cost) is at a steady rise..

as for speculation.. thats just pure emotion.. way above the logic of the trust in maths and costs of hashing. where anything can influence it. and miners love speculation,  and they love trust as it means they can sell at a profit

you will always see a speculation uptrend(goodnews) that has resistance points.. basically where peoples pockets finally empty or they wake up to the hype.
you will always see a speculation downtrend (bad news) that has a resistance points.. there are many. but usually main one is by people who didnt care about the bad news and speculate that bitcoin is cheap to buy in as they can see passed the temporary bit of drama. if that fails the next speculation resistance point users wont want to sell at a loss, they would rather hold. and the next resistance point is miners wont sell at a loss.. unless the coin is dead which is only after all speculation dies and all trust dies.. so speculation will always be wild and illogical at times but will always be higher than cost of creation and trust of utility of the currency.

im not even gonna bite into c*ntcholulas troll about beanie babies or BBQ coin.. as thats just meandering so far off topic that even he knows he is a lost cause seeking answers to that random crap

[CuntChocula]

...
its the TRUST in maths that increases over time.
EG
http://s29.postimg.org/dacmyloiv/huh.gif
im not even gonna bite into c*ntcholulas troll about beanie babies or BBQ coin.. as thats just meandering so far off topic that even he knows he is a lost cause seeking answers to that random crap

Nah f*nky, it ain't trust in math.
Fixed your chart so it reflects reality & makes a bit more sense

[countryfree]

Also, with better ASIC for mining ... electricity usage for bitcoin transaction will be much more efficient that now.

Not true.  The total power/energy consumption of the Bitcoin mining system is independent of miner efficiency.  You do have a point concerning the number of transactions.  Larger blocks with more transactions per block will lower the ratio of Total Energy per Transaction.

There is a whole thread about it here:

https://bitcointalk.org/index.php?topic=694401.0

Basically, for a given price per BTC, a given era (BTC per block) and a given fee rate (BTC/hour) the miners together can "afford" and will spend most of the block reward + fees on energy.  This is by design.  If equipment gets more efficient then the miners will just buy more equipment until they are consuming as much energy as they can afford.

No, men are not like that. The car I'm driving today is much more fuel-efficient than the one I was driving a few years ago, and gas is cheap. So I could afford to drive much more, but I don't. Changing conditions have given me extra purchasing power, but I'm spending my money on other things. Now if I were a miner and electricity suddenly become cheaper, maybe I would just be happy that my mining has become more profitable, and I'll look for other ways to invest my growing income.

[NorrisK]

If you want to use the cost per transaction of bitcoin as a measure of bitcoin success, maybe we should also take into account what current technologies use as recources..

Do you think banks run for free? They have massive data centers as well, massive security measures and insane redundancies to make sure everything stays safe. This probably takes a similar amount of recources as bitcoin mining, but nobody seems to care about that.

[BurtW]

Now if I were a miner and electricity suddenly become cheaper [or I purchase a more efficient miner], maybe I would just be happy that my mining has become more profitable, and I'll look for other ways to invest my growing income.

That may be true for you as an individual.  But what happens to the mining system in aggregate is that if there is money to be made more people will start mining and people that are mining will add more equipment.

This will happen until your windfall profits are once again reduced.

System wide the mining network will grow until it uses the amount of power/energy it can afford.

Sure, those people with cheaper electricity and/or more efficient equipment will make above average profits.  But those people with more expensive electricity and/or less efficient equipment will make lower than average profit [some even mining at a loss].

I am talking about the entire Bitcoin mining system and calculating energy/power consumption system wide.

[AtheistAKASaneBrain]

Oh no, Bitcoin fees are so high! Really? There's no point in debating this thing anymore. Fees will be irrelevant once LN is released since they will be cheap af. Even block size was increased in order to have cheaper fees on-chain, people would still use LN nonetheless because who wants to pay extra fees for on-chain transactions unless you are buying a car or something.

[tommygunyeah]

Never thought about it, but in the case that there ends to be a very wide adoption, there will be lots of power compsumption and bandwith used just in updating the blockchain from a user to another. That is true.

Yeah, that is pretty obvious, but the question is, how does this actually impact the environment compared to other payment methods currently existing?

Think about Visa or Mastercard, and all the infra-structure they have to mantain. Distribution of machines, issuing of cards, handling frauds, etc etc etc... That is a HUGE amount of resources that this analysis is not taking into consideration.

[ajun96]

More and more journalists trying to say something smart about bitcoin and they just have no luck!

yeah many people who want to drop bitcoin, many people who do not like about bitcoin? Why ?
whether he government officials who are paid to create fear?

[johnyj]

1. I can't send Beanies through the internet, though your bitcoin isn't soft and cuddly. What does this have to do with scarcity?
2. My boiled ice hasn't lost 2/3rds of its value over the past couple of years, so it most certainly beats Bitcoin as "store of value."
Again, you haven't answered my question: Is my boiled ice more valuable now that I wasted a bunch of electricity and my time put work into it?

If you plot the exchange rate performance of bitcoin for more than 4 years (which is a reward halving cycle), you get a risk/reward ratio which no investment can beat. It is a long term value storage, although it is disrupted by short term bubbles and crashes, similar to housing

You inverted the cause and result: People spend energy to dig out gold because it has value, not because the digging action itself will generate value. Higher mining cost is a result of competition. You should ask why so many people crazily mine bitcoin even they pay more electricity than coin's exchange rate