Posted on 03/26/2021 7:34:50 AM PDT by aMorePerfectUnion
By using energy to validate transactions in a way that is independent of any existing grid or source, Bitcoin mining will save the climate.
It’s in vogue to think that Bitcoin is accelerating the climate crisis.
The common argument is that Bitcoin uses lots of energy, which must mean more carbon emissions, so as a result, it’s ruining the climate. Of course, critics also seem enraged at Bitcoin itself, believing it doesn’t do anything useful beyond facilitating a casino for Reddit memelords and “libertarian nerds” to get rich in. To these critics, Bitcoin is a totally useless, degenerate system that will end up consuming all energy on the planet in 18 months if we don’t stop it right now.
While this fatalist prediction might succeed in earning clout on Twitter, it is fortunately far from the truth. Incredibly far. In fact, if I may do some clout chasing of my own: the prediction that Bitcoin will destroy the climate is the literal opposite of what Bitcoin is likely to do.
Bitcoin will save our Earth.
By the end of this read, you will understand how Bitcoin uses energy to validate transactions, and how this is driving more efficient energy usage and lower emissions for the entire global energy grid, not just the Bitcoin system. Why Does Bitcoin Need Energy?
This is the first part that confuses many people, because Bitcoin is a novel type of monetary technology which has no analogue. Importantly, Bitcoin is not Visa or PayPal — and it uses energy for different purposes.
Bitcoin requires energy in order to secure the history of transactions. A recipient of bitcoin can reasonably trust that the bitcoin they’ve received is really theirs because miners expended energy, and therefore incurred an unavoidable real-world cost, in order to fit that transaction into a block of transactions and hitch it onto the “blockchain.” We call this strong assurance that a transaction is completed “finality.”
If you take out that energy expenditure, there is no cost associated with changing a transaction. The original sender could decide later to change their transaction so it points to another one of their wallets instead of your wallet. Poof! Now you never got paid, or maybe the money is in two places at once. That just won’t fly in a monetary or payments system. This little copy-paste problem is known in nerd circles as the “double-spend problem.” Bitcoin is the only system which solves this problem at scale without a trusted third party, and energy usage is the key component of that solution.
The more energy that Bitcoin consumes, the more cost is incurred in securing the chain. More security means an “attack” on the history of transactions is more expensive — so expensive that double spending is uneconomical or downright impossible. The more cost incurred to secure the chain after your transaction, the more “final” that transaction is.
> More energy consumption = more security.
Many critics argue that the Bitcoin energy consumption per transaction compared to a Visa payment proves the horrible inefficiency of the Bitcoin network. This plays on our assumption that a “transaction” is always something small — like buying a cup of coffee. However, a “transaction” can also be a group of these smaller transactions — a “batch” — so that one “transaction” on a payment system like Bitcoin or Fedwire can actually represent millions of coffee purchases.
Critics of Bitcoin’s energy use also miss the key point of why Bitcoin uses energy. Bitcoin is not just a payments system — it is also an entirely new form of scarce, divisible, portable commodity — aka, money.
> Bitcoin consumes energy primarily to ensure the scarcity of Bitcoins and finality of transactions without a trusted third party.
Other monetary systems, like the U.S. dollar, achieve scarcity and finality — key properties of money — through trust. You and I need to trust politicians and bankers to be good stewards of the monetary system. We entrust with them the power to literally create currency out of thin air, and they have the power to reverse or block transactions. Most of these gatekeepers are not elected officials either — they are the chairmen and employees of central banks and commercial banks. And they create new money and allocate it as they see fit, fiendishly. New money is created every time a government sells bonds to its central bank or banks extend loans — which is often. Especially in 2020.
[EXCERPT - MORE AT LINK AND WORTH FINISHING ARTICLE]
half the world does not have banks accounts.
This is why crypto, direct via mobile phones, is spreading so fast in these countries.
The half of the world that don’t have bank accounts will never get involved in crypto either. They don’t have mobiles, they don’t have $#%^. Meanwhile my statement holds as true. The other half of the world WILL STILL have bank accounts. WILL STILL take out loans. WILL STILL do EVERYTHING that’s why banks exists. Banks didn’t spring up out of whole cloth, banks happened because how humans use money needed banks. Coin money, paper money, EFT money. Doesn’t matter. Crypto will not change that.
“ The half of the world that don’t have bank accounts will never get involved in crypto either.
Too late.
They already are.
No they aren’t. And you’re studiously avoiding my point. Which tells me a lot.
Actually they are. I considered finding you an article, then I realized if you wanted to know, you'd google it yourself.
And you’re studiously avoiding my point. Which tells me a lot.
It should tell you that I have no idea what your "point" is.
I responded to your clear and specific statement.
Best.
The point is very clear. You’re just avoiding it. Banks aren’t going away if we switch to crypto. Even if you’re dubious claim that the half of the world that has no freaking money to put in banks are using crypto for their zero money is correct. There’s still the other 3.5 billion people that use banks for reasons that don’t go away if money becomes crypto. So any claim that banks will go away is simply wrong.
I’ve never said banks will disappear.
You are arguing with yourself.
I said that to those complaining about bitcoin using energy, they should compare it to the energy usage of banks.
You said this:
We might add that Bitcoin replaces the vast hoard of banking employees with technology too
That’s simply not true. The banks will still exist, which means the banking employees will still exist. Your statement was patently false.
I think what we have here is a failure to communicate.
If this topic interests you, please trace it from the beginning of the thread so you get the context of what I wrote.
If you don't have that level of interest, accept my statement that I do not expect crypto to replace the banking industry - ever.
I expect it to continue to make inroads into banking and retail and finance.
What we have here is that you’re wrong and you’re not willing to admit it.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.