BTC less efficient than Visa

[newMeat1]

Last week somebody was saying they thought bitcoin is the "most efficient" way to pay, so I crunched some numbers to find out. Summary: it is not.

Currently 262 Terahash/s=262E12 hash/s
Most efficient bitfury hardware gets 705E6 hash/J, or 1.42E-9 J/hash ==>Note I'm being as conservative as possible here, in BTC's favor

So total network power consumption is at least (1.42E-9 J/hash)*(262E12 hash/s)=372040 J/s = 372 kW. Like I said, this is the most efficient scenario, with little room to improve with new mining hardware in the future. A year ago it was far, far worse.

36944 bitcoins change hands/hour, on average.
(3600 seconds * 372040 J/s)/($100/btc*36944 btc/hour)=362 J/$ processed.

Now let's compare to Visa. Visa processes avg $6.7T/year= 6.7E12 $/y = 212456 $/second. If Visa consumed as much power as bitcoin, that would be (362 J/$)*(212456 $/s)= 76.9 MW of power.

Visa has 2 datacenters in N America, consuming about 25MW each. And that includes stuff like AC, that I didn't even consider for bitcoin. So Visa actually uses far less energy/$ than bitcoin. And bitcoin is getting less efficient every day as the hash rate grows.
http://usatoday30.usatoday.com/tech/news/story/2012-03-25/visa-data-center/53774904/1

Discuss.

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[gbl08ma]

Visa is not a currency, just a means of payment / moving currency. Visa does not issue currency. Bitcoin is a currency which happens to implement the means for its issuing and moving between "accounts" (addresses).

[Birdy]

You need to compare Bitcoins with dollars, euros or other currencies.
Visa isn't a currency, it's just using them.

[MrVivaldi]

You are assuming that the coins never will be inside a Bitcoin bank in the future. A transaction can occur off chain.

[Chalkbot]

In addition to some of the other very valid points above, your comparisson seems to be focused solely on electricity usage and only considers the 2 Visa data centers in that evaluation and ignores the millions of always-on POS equipment required to actually transmit data to those centers.

Furthermore, in that same article you linked, it is estimated that *one* of these data centers costs "hundreds of millions of dollars" to build, and at 8 acres in size, I'm sure it's staffed by many employess, who probably demand some kind of salary for working there.

Then when you consider that all of this is just to provide Visa services, which is only one aspect of the financial system, you can *maybe* start to see how you are comparing apples to dwarf stars.

[elor70]

Visa is not a currency,you cant compare...

[pedrog]

And all the plastic used in credit/debit cards...

But you have a point there, for bitcoin to compete with VISA a huge percentage of transactions must be offchain.

[EmperorBob]

The amount of energy spent on mining right now isn't a property of the transaction system.
It's just what happens when the value of the mining subsidy is huge, and the total amount of transactions is small. That means almost all of the effort in bitcoin mining is the hashing, not the block validation.
You could increase bitcoin transactions by 10x (if it weren't for the block size limit) and probably not even increase total power consumption by 10%.

No one knows what the picture looks like even 6 months from now on that front.

[Carlton Banks]

Not a direct comparison at all: the energy is not being used only to process and verify transactions. Include the energy that the whole monetary system uses to maintain itself, and then we've got something to discuss.

[kokojie]

You are assuming that the coins never will be inside a Bitcoin bank in the future. A transaction can occur off chain.

So? it only makes energy wasted per transaction worse. Bitcoin mining is not environmentally sustainable. PPCoin's proof of stake mining is ultimately the way to go.

[honky1492]

What is the power consuption of all ATM ?

[crumbs]

Visa is not a currency, just a means of payment / moving currency. Visa does not issue currency. Bitcoin is a currency which happens to implement the means for its issuing and moving between "accounts" (addresses).

Visa's underlying currency (fiat) uses *zero* energy (paper notes).

You are assuming that the coins never will be inside a Bitcoin bank in the future. A transaction can occur off chain.

You just described a cash transaction, requiring *zero* energy.

In addition to some of the other very valid points above, your comparisson seems to be focused solely on electricity usage and only considers the 2 Visa data centers in that evaluation and ignores the millions of always-on POS equipment required to actually transmit data to those centers.

The comparison is valid.  He's also not including the energy used by non-mining boxen & their monitors.  Try dealing inn bitcoin with just headless miners.
On a slightly sadder note, he's also not factoring the bitcoin POS devices 'coz ... there's only a handful of B&M business accepting bitcoin.  Or do you suppose large retailers will use their cashier's smartphones as bitcoin POS thingamajiggers?
 

Furthermore, in that same article you linked, it is estimated that *one* of these data centers costs "hundreds of millions of dollars" to build, and at 8 acres in size, I'm sure it's staffed by many employess, who probably demand some kind of salary for working there.

Bitcoin, with only a billion dollar market cap, has already spawned many multi-million dollar ASIC companies & commercial miners. And bitcoin is not serving a fraction of a fraction of a speck of transactions handled by Visa.  

Then when you consider that all of this is just to provide Visa services, which is only one aspect of the financial system, you can *maybe* start to see how you are comparing apples to dwarf stars.

How much bitcoin value is exchanged for goods and services daily?  And how much dollar value through Visa?  Let's not kid ourselves -- it doesn't work, we're not that stupid.

[crumbs]

What is the power consuption of all ATM ?

An irrelevant number -- there are no bitcoin atms.  Fiat worked just fine without them, they're just a convenience. Think ATMs are a waste of energy?  Don't use them, live like it's 1970.

[Birdy]

Visa's underlying currency (fiat) uses *zero* energy (paper notes).

False, quite some energy and other ressources are required for minting/printing and distribution.

[crumbs]

Not a direct comparison at all: the energy is not being used only to process and verify transactions. Include the energy that the whole monetary system uses to maintain itself, and then we've got something to discuss.

The whole monetary system serves *the whole world.*  Bitcoin network serves a fraction of a percent of the whole world.  You, who are a part of that fraction, *still use the fiat system.*  Ridiculous.

[crumbs]

Visa's underlying currency (fiat) uses *zero* energy (paper notes).

False, quite some energy and other ressources are required for minting/printing and distribution.

Childish pedantry.  How much energy do you think is used to print a hundred dollar bill?  You think the FED is doing J/$ calculations before they fire up their printing presses?
Hint:  BTC miners *do*

[wearepoor]

You are assuming that the coins never will be inside a Bitcoin bank in the future. A transaction can occur off chain.

You just described a cash transaction, requiring *zero* energy.

cash costs energy. You have to make paper and print it with pretty costly anti fraud parts, or metal for small denominations. And do it over and over becuse it have its lifetime

[mearylll]

Visa's underlying currency (fiat) uses *zero* energy (paper notes).

False, quite some energy and other ressources are required for minting/printing and distribution.

Childish pedantry.  How much energy do you think is used to print a hundred dollar bill?  You think the FED is doing J/$ calculations before they fire up their printing presses?
Hint:  BTC miners *do*

These will be pretty costy and you have to renew it. Think about it this way: if exact copy of 100 would cost only dollar, wouldnt this be profitable business for many?

[Birdy]

Visa's underlying currency (fiat) uses *zero* energy (paper notes).

False, quite some energy and other ressources are required for minting/printing and distribution.

Childish pedantry.  How much energy do you think is used to print a hundred dollar bill?  You think the FED is doing J/$ calculations before they fire up their printing presses?
Hint:  BTC miners *do*

[Probably they would be better off doing some calculations, in several countries the smallest coins are more expensive to produce than their face value.]

Do you really think printing them is all you need?
E.g. You need to distribute them, offer the possibility to replace old banknotes after their life span and you need very high security in every single step.
It doesn't end there, just think about all the cash transports from companies to banks. Okey, that's fuel and working time instead of electricity, but those are valuable ressources, too.

[crumbs]

Visa's underlying currency (fiat) uses *zero* energy (paper notes).

False, quite some energy and other ressources are required for minting/printing and distribution.

Childish pedantry.  How much energy do you think is used to print a hundred dollar bill?  You think the FED is doing J/$ calculations before they fire up their printing presses?
Hint:  BTC miners *do*

These will be pretty costy and you have to renew it. Think about it this way: if exact copy of 100 would cost only dollar, wouldnt this be profitable business for many?

An extremely profitable business.  Bitcoin miners will continue mining until it costs .99 BTC to mine one, until they waste as much energy as the value of the bitcoin they mine.  Hilarious, no?

[huadylmate]

Visa's underlying currency (fiat) uses *zero* energy (paper notes).

False, quite some energy and other ressources are required for minting/printing and distribution.

Childish pedantry.  How much energy do you think is used to print a hundred dollar bill?  You think the FED is doing J/$ calculations before they fire up their printing presses?

Why care when you can make as big debt as you like - it would be childish not spending as much as you can get away with

[crumbs]

Visa's underlying currency (fiat) uses *zero* energy (paper notes).

False, quite some energy and other ressources are required for minting/printing and distribution.

Childish pedantry.  How much energy do you think is used to print a hundred dollar bill?  You think the FED is doing J/$ calculations before they fire up their printing presses?
Hint:  BTC miners *do*

[Probably they would be better off doing some calculations, in several countries the smallest coins are more expensive to produce than their face value.]

Do you really think printing them is all you need?
E.g. You need to distribute them, offer the possibility to replace old banknotes after their life span and you need very high security in every single step.
It doesn't end there, just think about all the cash transports from companies to banks. Okey, that's fuel and working time instead of electricity, but those are valuable ressources, too.

See above, tell me i'm wrong

[Birdy]

See above, tell me i'm wrong

Alright. You are wrong.
There did it.

An extremely profitable business.  Bitcoin miners will continue mining until it costs .99 BTC to mine one, until they waste as much energy as the value of the bitcoin they mine.  Hilarious, no?

That's a deliberate plan, it's supposed that miners just gain enough to keep on mining.

[crumbs]

Visa's underlying currency (fiat) uses *zero* energy (paper notes).

False, quite some energy and other ressources are required for minting/printing and distribution.

Childish pedantry.  How much energy do you think is used to print a hundred dollar bill?  You think the FED is doing J/$ calculations before they fire up their printing presses?

Why care when you can make as big debt as you like - it would be childish not spending as much as you can get away with

If printing money was proportionately as costly as mining BTC, the presses would not stop 'til it costs more than a dollar to print a dollar.

[crumbs]

waste as much energy

 

[crumbs]

How much energy do you think is used to print a hundred dollar bill?

Quite a lot. Start from placing a cotton seed in fertile soil.

Err... More than $100 worth?

[ferda2mx]

What is the power consuption of all ATM ?

An irrelevant number -- there are no bitcoin atms.  Fiat worked just fine without them, they're just a convenience. Think ATMs are a waste of energy?  Don't use them, live like it's 1970.

You cant be serious - there wouldnt be Visa without ATM and POS.

And Visa is not money

[ferda2mx]

How much energy do you think is used to print a hundred dollar bill?

Quite a lot. Start from placing a cotton seed in fertile soil.

Err... More than $100 worth?

Not. Only the coins cost more to make than the value they represent - pretty effective, right?

[Birdy]

If printing money was proportionately as costly as mining BTC, the presses would not stop 'til it costs more than a dollar to print a dollar.

Welcome to the problem of inflation.
It's not like you create value by printing a bill, so you will dillute other peoples value.

Miners also process transactions while "printing" the Bitcoin. Sure the new Bitcoin will also dilute the value of the others, but this is capped.

[imamanandyou]

If printing money was proportionately as costly as mining BTC, the presses would not stop 'til it costs more than a dollar to print a dollar.

Welcome to the problem of inflation.

Because mining BTC is proportionately harder as time goes on, it only tell us Bitcoin is more and more successfull.

[crumbs]

What is the power consuption of all ATM ?

An irrelevant number -- there are no bitcoin atms.  Fiat worked just fine without them, they're just a convenience. Think ATMs are a waste of energy?  Don't use them, live like it's 1970.

You cant be serious - there wouldnt be Visa without ATM and POS.

And Visa is not money

I have a Visa CC.  Never stuck it in an ATM other than by accident.  I also use it to shop online, so when i buy a miner from an ASIC company that vanishes with my money?  Chargeback!  Try that with bitcoin
And no, Visa ain't money, but we're talking about trading in $$$ with Visa.  See topic of thread^^.

[crumbs]

If printing money was proportionately as costly as mining BTC, the presses would not stop 'til it costs more than a dollar to print a dollar.

Welcome to the problem of inflation.

Because mining BTC is proportionately harder as time goes on, it only tell us Bitcoin is more and more successfull.

No, rising difficulty only tells you the hashrate has risen, nothing about success.  Just that people spent all their bitcoins on racy new ASIC miners, so they could mine more bitcoins to buy the next racy miner.  Enjoy the hamster treadmill

[crumbs]

How much energy do you think is used to print a hundred dollar bill?

Quite a lot. Start from placing a cotton seed in fertile soil.

Err... More than $100 worth?

I don't know, email me one and I'll have the lab check it out.

First, you have to promise me an ASIC   And make it quick, 'cos that scam's just about burnt down.

[gadman2]

Bitcoin is to USD as the confirmations is to Visa. Change every word of "bitcoin" in op to "confirmations"  and it will all make sense then.

[vendetahome]

crumbs - your my hero!

[crumbs]

If printing money was proportionately as costly as mining BTC, the presses would not stop 'til it costs more than a dollar to print a dollar.

Welcome to the problem of inflation.
It's not like you create value by printing a bill, so you will dillute other peoples value.

It's not like you create value by mining a bitcoin, either.  At least the monyz smells nice.  And what's wrong with inflation?  Who told you it was a *bad* thing?

[millsdmb]

Last week somebody was saying they thought bitcoin is the "most efficient" way to pay, so I crunched some numbers to find out. Summary: it is not.

Currently 262 Terahash/s=262E12 hash/s
Most efficient bitfury hardware gets 705E6 hash/J, or 1.42E-9 J/hash ==>Note I'm being as conservative as possible here, in BTC's favor

So total network power consumption is at least (1.42E-9 J/hash)*(262E12 hash/s)=372040 J/s = 372 kW. Like I said, this is the most efficient scenario, with little room to improve with new mining hardware in the future. A year ago it was far, far worse.

36944 bitcoins change hands/hour, on average.
(3600 seconds * 372040 J/s)/($100/btc*36944 btc/hour)=362 J/$ processed.

Now let's compare to Visa. Visa processes avg $6.7T/year= 6.7E12 $/y = 212456 $/second. If Visa consumed as much power as bitcoin, that would be (362 J/$)*(212456 $/s)= 76.9 MW of power.

Visa has 2 datacenters in N America, consuming about 25MW each. And that includes stuff like AC, that I didn't even consider for bitcoin. So Visa actually uses far less energy/$ than bitcoin. And bitcoin is getting less efficient every day as the hash rate grows.
http://usatoday30.usatoday.com/tech/news/story/2012-03-25/visa-data-center/53774904/1

Discuss.

Last night I was daydreaming and wondered, how do the amount of TX compare? If BTC were to exceed all the major credit card co's in TX-- that'd be an accomplishment.

Unless it's already been accomplished.

[Birdy]

If printing money was proportionately as costly as mining BTC, the presses would not stop 'til it costs more than a dollar to print a dollar.

Welcome to the problem of inflation.
It's not like you create value by printing a bill, so you will dillute other peoples value.

It's not like you create value by mining a bitcoin, either.  At least the monyz smells nice.  And what's wrong with inflation?  Who told you it was a *bad* thing?

You do create some value as you process transaction (the same value we were debating the whole thread about, yes that what Visa does....).

Inflation is not bad for everyone, people with debt (like our states) love inflation. But it certainly is bad for me as my money buys me less stuff.
It's merely a redistribution of wealth, inflation doesn't destroy any value (the effetcs of high inflation can do that though).

[crumbs]

If printing money was proportionately as costly as mining BTC, the presses would not stop 'til it costs more than a dollar to print a dollar.

Welcome to the problem of inflation.
It's not like you create value by printing a bill, so you will dillute other peoples value.

It's not like you create value by mining a bitcoin, either.  At least the monyz smells nice.  And what's wrong with inflation?  Who told you it was a *bad* thing?

You do create some value as you process transaction (the same value we were debating the whole thread about, yes that what Visa does....).

Inflation is not bad for everyone, people with debt (like our states) love inflation. But it certainly is bad for me as my money buys me less stuff.
It's merely a redistribution of wealth, inflation doesn't destroy any value (the effetcs of high inflation can do that though).

It makes you spend your monyz instead of scroogeing  it under a mattress, thus fueling our awesome economy.  Mony's meant to be spent!  And if miners create value by processing transactions, so does Visa
Edit:  Which you have already mentioned, i can't read

[Birdy]

It makes you spend your monyz instead of scroogeing  it under a mattress, thus fueling our awesome economy.  Mony's meant to be spent!  And if miners create value by processing transactions, so does Visa

I disagree, I think this consuming pressure isn't good for our society. It is way better we buy stuff, because we want it and not because we fear our money will buy us less otherwise.


Yes, Visa does create a form of value just like the miners. The value of a service, in this case the processing of transactions.

[MoonShadow]

Last week somebody was saying they thought bitcoin is the "most efficient" way to pay, so I crunched some numbers to find out. Summary: it is not.

Discuss.

Your analysis is flawed.  The most "efficient" way to pay has nothing at all to do with the power consumption, but everything to do with the costs of using the system to the consumer doing the paying.  In this context, "efficient" means "cost effective".  There is no doubt at all that Bitcoin is orders of magnitude lower in system costs for the end user than Visa.  I don't even need to demostrate that one.  Bitcoin is also significantly lower than the same metric applied to paper currencies traded in hand, but that comparision needs a bit more explaination.

While bitcoin's total energy consumption seems high, it's also relatively easy to get a pretty reliable estimate of what the system costs to run.  The total costs of running a paper currency system are more difficult to estimate, in part, because so many of those costs are obscured from the users.  Most are paid for by inflation and/or taxes, so users don't bear those burdens anyway; some such costs include (but are not limited to) The costs of manufacturing the paper and printing the currency itself.  The costs of the beauracy required to administer the currency & regulate the banks.  The cost of enforcement of currency related crimes (i.e. counterfitting) that would otherwise be irrelevent under a cryptocurrency, plus all the associated court costs, prison costs, attorneys, and social costs of prosecution; and so on.  And to that, the costs of the people involved in the handling of said currencies (outside of the beauracy); for example, cashiers and managers who must be trusted with such funds and the labor time required to properly manage such funds for every retail store, compounded to every retail businees in the country with a cash machine.  Then there are the armored truck companies, banks and such institutuions that exist for the sole purpose of accumulating, protecting and accounting for other people's money.

And then account for the costs of heating and air conditioning the buildings all those institutions must maintain in order to comfortablely house and employ all those bankers.

And I haven't even touched on the transaction costs that consumers commonly bear directly; such as the gas and time required to travel to a bank on a regular basis to conduct their personal financial business, nor the costs and risks involved in distance commerce using paper based currencies, such as mail order scams or online scams.

There is no such thing as a free lunch, so no matter how the costs of any paper currency are officially paid for, the burden must eventually fall upon the consumers.  The finance industry in the US is now one of the largest industries recorded in the GDP, and by far the largest that does not actually produce a tangible product or offer a free market service of it's own.  If you take the slice of the GDP that is attributed to the finance industry, and that is how much the system costs overall.  

http://www.huffingtonpost.com/2011/12/15/financial-sector-economy_n_1151058.html

Divide whatever number you decide upon there by the current number of American households, and you come up with the appproximate cost of the system for each household per year.  Not exact, mind you, because some people end up bearing more of the burden than others due to the high externalities of the system (by design), but it's a pretty good number since most of the burden falls upon the middle class anyway.  Once you've done that calculation to your own satisfaction, do an estimate concerning how many individual transactions that would actually be per year per household, right down to the candy bar at the corner store for little Jimmey.  That's going to be a pretty high number; but even assuming that all such transactions remained individual, near-time fee paying transactions on the blockchain (an unlikely assumption, but the worst case scenario for our Bitcoin) and times the current minimum fee.  (what is it now, roughly half a cent, right?)  See for yourself which would be cheaper for you individually, and for society collectively.

[MoonShadow]

And all the plastic used in credit/debit cards...

But you have a point there, for bitcoin to compete with VISA a huge percentage of transactions must be offchain.

While this is true, bear in mind that this, also, is by design.  Off network transactions will occur as soon as they are cheaper than on network transactions, and can support a safe enough model that consumers can trust them for whatever it is that they are doing.  But then, such transactions don't contribute to the ongoing security of the blockchain, and thus don't contribute to the mining race.  So a market balance between on and off network transactions develop, above and beyond the market balance for the on network transaction fees.  The off-network market undercuts the demand for the high-security model of the on network transactions, and thus lowers the fee; all else being the same.

Try and get either Visa or the Federal Reserve to deliberately design a system wherein their competitors are on an immediate equal footing as themselves.

[tvbcof]

...
Discuss.

I've felt from early in my involvement with Bitcoin that it is inconvenient, expensive, and dangerous [lost/stolen data] to actually use for real world things.  Also that the risks such as loss of privacy, regulatory and legal hassles, etc, are severe.

Also, to your point, that the infrastructure is currently highly subsidized by speculative investment in hardware, increased utilization of otherwise wasted resources (especially bandwidth) and that sort of thing.  The actual cost of a transaction at todays use rates are probably vastly in excess of what the user pays in transaction fees, and probably always will be unless and until the infrastructure of the solution is monopolized by corporate interests.

I've never really felt it likely in the real world that these issues would be overcome even though it would be great in some fantasy-land.

Bitcoin was always, to me, a highly speculative bet with a big potential pay-out, and a political statement, and that remains as strong today as it ever was.  Stronger in fact.  It could be more, and could be a solid foundation of value which is sorely needed in today's political climate, but only if most participants in the ecosystem drop the fantasies about it's useful role and address the real weak links in it's real potential as a robust and defensively protected reserve value store.  This seem as unlikely as ever.  But there is still the potential to make gobs of money screwing with it as long as one is willing to undergo a hell of a lot of inconvenience and accept significant risk.

Obviously I'm prone to being on the sacrilegious end of the spectrum and my views on this have never been well received.  Oh well.  I've been saying this for years, and it's as difficult as ever to deal with Bitcoin...I'm trying to pull some fiat out now which is a nightmare...and putting me in a bad mood.

[MoonShadow]

Oh well.  I've been saying this for years, and it's as difficult as ever to deal with Bitcoin...I'm trying to pull some fiat out now which is a nightmare...and putting me in a bad mood.

Why?  I've been doing the majority of my bitcoin transactions on my android phone for well over a year now.  The times that I have to type in the addresses (as opposed to just using the camera as a scanner) is somewhat annoying, but I'm confident some kind of standard will emerge there as well, in time.  It's certainly no more difficult to type in an address string to buy something online at some new to me website than it is to buy something online using bitcoin; and that's also bound to get easier once browser linked wallet clients become trustworthy.  I've been on commerce sites that buying with bitcoin was almost, but not quite "one click simple".  I've scanned QR codes right off my monitor, and never even fired up my destop bitcoin client.  In fact, my desktop client is hardly even used at all, these days.  I'd be just as well to move those funds into cold storage.  I'll admit that I still do the majority of my online buying using other methods than bitcoin, but that's likely to shift significantly if Amazon ever develops a payment method compatible with bitcoin. 

[johnyj]

Although gold served as a currency for thousands of years, it finally quit the circulation because modern fiat money cost nothing to make

But, if something cost nothing to make, then it should worth nothing, this is a most simple logic that every children could understand. So, although modern fiat money served as a currency for 42 years, it might quit circulation just because they cost nothing to make

[tvbcof]

Oh well.  I've been saying this for years, and it's as difficult as ever to deal with Bitcoin...I'm trying to pull some fiat out now which is a nightmare...and putting me in a bad mood.

Why?  I've been doing the majority of my bitcoin transactions on my android phone for well over a year now.  The times that I have to type in the addresses (as opposed to just using the camera as a scanner) is somewhat annoying, but I'm confident some kind of standard will emerge there as well, in time.  It's certainly no more difficult to type in an address string to buy something online at some new to me website than it is to buy something online using bitcoin; and that's also bound to get easier once browser linked wallet clients become trustworthy.  I've been on commerce sites that buying with bitcoin was almost, but not quite "one click simple".  I've scanned QR codes right off my monitor, and never even fired up my destop bitcoin client.  In fact, my desktop client is hardly even used at all, these days.  I'd be just as well to move those funds into cold storage.  I'll admit that I still do the majority of my online buying using other methods than bitcoin, but that's likely to shift significantly if Amazon ever develops a payment method compatible with bitcoin. 

I've never had any troubles buying trinkets with fiat except for a BE-USB which (refreshingly) was only available via Bitcoin when I bought it.  So, Bitcoin is just not a compelling solution for this market space and I doubt that it ever will be.

I only run into issues when I want to buy something of significant value, and I just bought piece of construction equipement prompting an interest in my shuffling some financial assets.  Such items are simply not available in exchange for Bitcoin, and again, I doubt they ever will be.  Now I wish to replenish my fiat stash by cashing out some of my Bitcoin which has been a damn good speculative investment so far.  And that is where the trouble lies.

I have never done anything illegal and I intend to pay full capital gains taxes so I have no need to launder any money at all.  In spite of this I am rejected by Mt. Gox because my driver's license has a P.O. Box in addition to a physical address...like many people who live in my rural neighborhood.

Now this is not a Bitcoin problem per-se and is more associated with corp/government provoked hassles (or possible Mt. Gox solvency issues I suppose) but it's a reality which has been impacting Bitcoin in the past and is only getting worse.  I don't see that the situation turning around, and indeed I think that the government has a lot of room to maneuver in making things orders of magnitude worse if/when they choose to do so.  And there isn't jack-shit that the community can do about it.

Even when things are chipping along well, there is still significant fees doing damn near anything with BTC<->fiat.  That has been the case since I've been involved and here again I don't see it changing.  I am currently so far ahead that these fees will be negligible, but I'm 'lucky' compared to someone who just wants to buy Skittles or pot what-not, or convert the proceeds of their mining into something they want.

--

Oh ya...'ease of use' is not a concern for me and I vastly prefer simple command-line utilities for anything remotely sensitive.  I don't even use my Android or Window machine for e-mail any more, much less any financial and especially Bitcoin related work.  I stopped doing so even before the Snowden revelations.  I would not touch anything from Oracle (like Java) with a 10 foot pole.  The only way I'll feel truly comfortable doing any computer stuff from here forward is if/when there is a completely open-source effort to build hardware, firmware, and all operating software to make a secure platform.

[desired_username]

Although gold served as a currency for thousands of years, it finally quit the circulation because modern fiat money cost nothing to make

But, if something cost nothing to make, then it should worth nothing, this is a most simple logic that every children could understand. So, although modern fiat money served as a currency for 42 years, it might quit circulation just because they cost nothing to make

The reasons fiat took over are the following:

- Granted unlimited power to issuer

- Fiat was easier to store, transport and "divide" (compared to precious metals only)

[wiggi]

So total network power consumption is at least (1.42E-9 J/hash)*(262E12 hash/s)=372040 J/s = 372 kW. Like I said, this is the most efficient scenario, with little room to improve with new mining hardware in the future. A year ago it was far, far worse.

Power "consumption" is a feature, not an inefficiency. It allows to exchange electricity into coins.
One way only, but try this with Visa and dollars

The only inefficiency that matters is (average transaction fee / average transaction volume).

[johnyj]

Although gold served as a currency for thousands of years, it finally quit the circulation because modern fiat money cost nothing to make

But, if something cost nothing to make, then it should worth nothing, this is a most simple logic that every children could understand. So, although modern fiat money served as a currency for 42 years, it might quit circulation just because they cost nothing to make

The reasons fiat took over are the following:

- Granted unlimited power to issuer

- Fiat was easier to store, transport and "divide" (compared to precious metals only)

True, and I think there is another reason behind fiat money's take over: People have almost zero knowledge about money creation 40 years ago

Now people start to understand how this grand scheme works, they start to question the validity of its basic principle, or they just go ahead and use a system which is more transparent and credible

[jubalix]

PPC, by and large offers the solution to this question, and can be adopted by BTC

[Carlton Banks]

Now this is not a Bitcoin problem per-se and is more associated with corp/government provoked hassles (or possible Mt. Gox solvency issues I suppose) but it's a reality which has been impacting Bitcoin in the past and is only getting worse.  I don't see that the situation turning around, and indeed I think that the government has a lot of room to maneuver in making things orders of magnitude worse if/when they choose to do so.  And there isn't jack-shit that the community can do about it.

Not just corp/government, but US based examples of them. I feel your pain though, it can be tough running your life long-term is tough if you have any need for the Bitcoin ecosystem behaving reliably and predictably, you never know when the next drama will occur, or where the chips will land. The US is easily the worst place for these problems though, you've got to be committed in a religious fervour kinda way to last it out.

[crumbs]

Oh well.  I've been saying this for years, and it's as difficult as ever to deal with Bitcoin...I'm trying to pull some fiat out now which is a nightmare...and putting me in a bad mood.

Why?  I've been doing the majority of my bitcoin transactions on my android phone for well over a year now.  The times that I have to type in the addresses (as opposed to just using the camera as a scanner) is somewhat annoying, but I'm confident some kind of standard will emerge there as well, in time.  It's certainly no more difficult to type in an address string to buy something online at some new to me website than it is to buy something online using bitcoin; and that's also bound to get easier once browser linked wallet clients become trustworthy.  I've been on commerce sites that buying with bitcoin was almost, but not quite "one click simple".  I've scanned QR codes right off my monitor, and never even fired up my destop bitcoin client.  In fact, my desktop client is hardly even used at all, these days.  I'd be just as well to move those funds into cold storage.  I'll admit that I still do the majority of my online buying using other methods than bitcoin, but that's likely to shift significantly if Amazon ever develops a payment method compatible with bitcoin. 

This is the boilerplate logic on this forum:
"I have no problem with bitcoin transactions, therefore bitcoin is easy to use."  Since innuendo fails so often here, i'll spell it out:

1.  You've been using bitcoin for at least since you've joined this forum, i.e. 3 years.  No wonder you've learned to use it.  Using yourself as a yardstick is ludicrous.
2.  You continue using fiat for 99% of your transactions, that's why you don't see the pitfalls of bitcoin.  If you were forced to deal exclusively in bitcoin, you'd change your mind mighty quick.
3.  If Amazon developed a payment system relying on Unicorn Puss [UPC], UPC transactions would be quick & simple also.  It didn't, so they're not.
4.  The commerce sites you've been to, where bitcoin transactions are "one click simple," were likely to be SR, SD, exchanges or scams, if statistics teach us anything.  When Shaniqua sells you a burger for bitcoin, i'll pick up my ears.  Till that happy day...

[crumbs]

...
Power "consumption" is a feature, not an inefficiency. It allows to exchange electricity into coins.
One way only, but try this with Visa and dollars
...

Lolz, "feature" as in "this ain't a bug, it's a feature!"  If i leave a soldering iron on in a wastebasket, i'll exchange electricity for a burnt-down house.  Profit

[crumbs]

...
True, and I think there is another reason behind fiat money's take over: People have almost zero knowledge about money creation 40 years ago

You mean "stupid people."  The rest of us know.

Now people start to understand how this grand scheme works, they start to question the validity of its basic principle, or they just go ahead and use a system which is more transparent and credible

Jeesh, i shudder to think of the future -- when these rubes figure out where babies come from

[favdesu]

You are assuming that the coins never will be inside a Bitcoin bank in the future. A transaction can occur off chain.

this is already working between inputs.io accounts, fyi

[atomium]

You are assuming that the coins never will be inside a Bitcoin bank in the future. A transaction can occur off chain.

this is already working between inputs.io accounts, fyi

+1

[MoonShadow]

You are assuming that the coins never will be inside a Bitcoin bank in the future. A transaction can occur off chain.

this is already working between inputs.io accounts, fyi

It's also one of the driving forces of the overlay network, Stratum...

https://bitcointalk.org/index.php?topic=55842.0

[MoonShadow]

Oh well.  I've been saying this for years, and it's as difficult as ever to deal with Bitcoin...I'm trying to pull some fiat out now which is a nightmare...and putting me in a bad mood.

Why?  I've been doing the majority of my bitcoin transactions on my android phone for well over a year now.  The times that I have to type in the addresses (as opposed to just using the camera as a scanner) is somewhat annoying, but I'm confident some kind of standard will emerge there as well, in time.  It's certainly no more difficult to type in an address string to buy something online at some new to me website than it is to buy something online using bitcoin; and that's also bound to get easier once browser linked wallet clients become trustworthy.  I've been on commerce sites that buying with bitcoin was almost, but not quite "one click simple".  I've scanned QR codes right off my monitor, and never even fired up my destop bitcoin client.  In fact, my desktop client is hardly even used at all, these days.  I'd be just as well to move those funds into cold storage.  I'll admit that I still do the majority of my online buying using other methods than bitcoin, but that's likely to shift significantly if Amazon ever develops a payment method compatible with bitcoin. 

This is the boilerplate logic on this forum:
"I have no problem with bitcoin transactions, therefore bitcoin is easy to use."  Since innuendo fails so often here, i'll spell it out:

1.  You've been using bitcoin for at least since you've joined this forum, i.e. 3 years.  No wonder you've learned to use it.  Using yourself as a yardstick is ludicrous.

You have a point here, but I was talking about your claim that using bitcoins in commerce online has not become any easier.  My own experiences notwithstanding, it's provablely easier for a layman to use bitcoin today than it was when I joined this forum.

2.  You continue using fiat for 99% of your transactions, that's why you don't see the pitfalls of bitcoin.

Closer to 80%.

  If you were forced to deal exclusively in bitcoin, you'd change your mind mighty quick.

I doubt it.  I value bitcoin for what it makes possible, not for what it makes easy. It's the job of vendors to make bying from them easy.

3.  If Amazon developed a payment system relying on Unicorn Puss [UPC], UPC transactions would be quick & simple also.  It didn't, so they're not.

Sure, but Unicorn Piss doesn't have any trade value, nor does it have a decent security model that would lead to it ever haveing a trade value.  Bitcoin does, and you know that.  While it's possible that Bitcoin could still fall flat on it's face and never amount to anything, it has the potential for great things.  Moreso now that a US federal judge has declared that Bitcoin is, indeed, money just last week.  Now the Senate financial oversite committiee is rushing to get information from their usual suspects about how to 'regulate' bitcoin, an implicit admission that bitcoin isn't going to go away anytime soon.  Also, that pirate40 is likely to spend quite a while as roomies with Bernie Madoff.  I hcan honestly say that I, personally, was never a big enough sucker to be taken by his scheme.

4.  The commerce sites you've been to, where bitcoin transactions are "one click simple," were likely to be SR, SD, exchanges or scams, if statistics teach us anything.  When Shaniqua sells you a burger for bitcoin, i'll pick up my ears.  Till that happy day...

The main site that I had in mind whaen I wrote that was this one...

http://muslimagorist.com/marketplace

Is it a scam?  Not to me, I got what I ordered.  Nor do I even know what a Shaniqua is.  I'll be the first to admit that Bitcoin really won't have arrived until I can buy stuff from walmart.com and have it shipped site-to-store, or buy more bitcoins at the customerservice desk, andI actually have said this in the past.  However, I think that day will come in some fashion or another.  In my home city, there is now a points based foodie network for buying foodstuffs at 'participating' resturants.  There are now over 50 such resturants in this network.  While they don't use bicoin for this, it'd be trivial to do so, or establish a bitcoin to foodie points exchange.  The old business models are dying, new ones are emerging.  I have always had the talent to foresee the near future of these kinds of things, and it has profited me well.  I'm far from the only one with this talent on this forum, and that is why we favor Bitcoin so much.  Again, not for what it does do now, or makes easy now; but for what it makes posssible later.  However, Crumbs, I do say we needs bears like yourself to keep us all in check.  You provide a valuable service with your presence here.