...economics of minining ... This system simply does not make any economic sense.
I believe this quote captures the substance of your post and is the point which merits discussion.
I agree generally, that the centralization of mining is a threat, in principle, albeit not in practice to date, to the security of the ledger.
I also agree, generally, that the current energy expenditure is far in excess of the need of the design goals.
I further agree, generally, that price motivates that expenditure.
Whether it makes "economic sense" is a strange question, politically and philosophically loaded. Clearly it makes sense, because you have made sense of it, explaining features of its causal structure. I think what you mean is that the gap between energy expenditure motivated by technical needs, and energy expenditure motivated by economic factors is offensive to your sensibilities. I am somewhat sympathetic to this complaint, but the market is, as we see, without sympathy.
An argument can be made that the economic value-add of the network suffices to explain all or part of the gap which offends you, and you seem to acknowledge that implicitly, but consider it inadequate to the scale of the gap. This view would gain respect, if you were to quantify it, or to offer a reasoned case
as to why the value-add is less than the present energy cost.No "hype" is required to explain a deviation of current price from some present fundamental metric. All that is required is a rational discounting of a future price estimate (which should really be in the form of a distribution).
(Aside, I observe that this discussion is off-topic, which may annoy some who frequent the thread.)
I think (he thinks) he did: by saying that crypto only serves malicious ("drug dealers") or trivial ("Overstock.com") purposes, while tacitly assuming further that there will never be any usage cases for crypto other than the above.
I appreciate your post, by the way, even if it'll hardly convince Jorge. It runs down to the question if you can see
anything of value in a distributed value transfer & registration mechanism or not, now or in the future. Jorge doesn't (and in fact, he mainly seems to think of it as detrimental to the public good), while most in here happen to disagree. I don't see a major problem with that fundamental disagreement though - it would be rather boring if we would all agree on everything, all the time.
All throughout history, there were times were it was necessary to be "visionary", even in the face of strong opposition. Existence of opposition is of course not sufficient justification that your vision is beneficial (I'll avoid Godwin here) - some basic morality 'test' is probably necessary, something along the lines of "Does your invention/social reform/plan to change the world undeniably cause more harm than (potential) good?"
Jorge et al.'s cynicism aside, the answer in the case of Bitcoin is quite clearly: no, the harm does not outweigh the (potential) good it can do - in the worst case, the "failure" of crypto will leave the world mostly as it was before. Here's why:
The
defrauding investors argument is silly. Satoshi didn't cash out the vast majority of his coins (we know that for sure), and neither did the other original "megawhales". So, the pyramid notion can be dismissed. As to the possibility of investing, and losing, money when dealing with Bitcoin/crypto: such is the nature of investment. The dotcom bubble was a major disaster for many investors - I'd like to see the resulting claim that we should therefore abandon the entire Internet economy. Risk/reward are intrinsically linked in a market-based economy like ours, so a criticism of this aspect can only come from a broader criticism of capitalism as a whole.
The
wasted energy argument by itself is incredibly weak, and can be debunked immediately. For example, how about PC or console gaming? Scorn it as well, as "frivolous waste of energy"? How about traveling to places, for recreation?
Vast amounts of energy used for that, no benefit other than enjoying life, getting to know the world. There is no "justified" use of energy in absolute terms, otherwise, everything except hospitals, schools and heating would need to be shut down.
The
drug economy argument is minimally stronger, but not much. Currently, perhaps illegal goods make up a large chunk of the total network economy (other than the "circular" aspects of mining). There's no reason that has to stay like this however, and in absolute terms, the drug economy did mighty fine before Bitcoin (and will continue to do so in case crypto would "fail"). Airplane travel wasn't "a waste of time and human effort" just because, say, in the beginning, only the super rich could afford it.
The
political repercussions argument is perhaps only one I can consider valid: in case Bitcoin/crypto would succeed, on a large scale, it might change the way national governments work. You can be against that, on reasons of principle - as in, I don't consider every non-libertarian standpoint inconsistent automatically. That said, of all the available cryptos, the world's governments could do much worse than with Bitcoin: because of its trackable nature, in case of success, Bitcoin transactions merely represent a (in my terminology)
reversal of the rule/permission cycle , not a way to completely and universally change the laws and rules of nations as is.
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