GoSeigen wrote:justfisk wrote:A positive for Bitcoin is that it is beginning to force people to ask the question of "What is money" and for us to compare it to other forms of what we have in place today. Comparing consumption rates:
Global cash and coins - 11 terawatt-hours per year
Gold mining alone - 132 terawatt-hours
Bitcoin - 8.27 terawatt-hours per year
US Data Centers alone consume over 64 terawatt-hours per year - should we shutdown the internet because of this?
With that comparison in mind, Bitcoin appears to compare quite favourably with the competition. I share here an article of interest:
https://www.bloomberg.com/view/articles ... tics-thinkthanks,
JF
Where did you get that figure of 132TWh for gold? Please link to the primary source.
Those are not the competition though. Bitcoin does nothing of any value except make a few people feel they've got rich quick. Bitcoin is only capable of c400k transactions per day. Without paying huge fees it is now taking many hours, even days to get a transaction processed. That's without mentioning the hidden energy cost of the transactions.
Traditional financial transactions cost pennies per transaction, transactions complete almost instantly, and literally hundreds of billions of transactions complete every day. So bitcoin would have to scale up a million times to get anywhere near traditional transactions.
GS
The 132TWh has been referenced on several websites and has not been disputed. While looking for primary source i came across this citation from wikipedia
"Gold extraction is also a highly energy intensive industry, extracting ore from deep mines and grinding the large quantity of ore for further chemical extraction requires nearly 25 kW·h of electricity per gram of gold produced". The wikipedia entry also cited the hazardous waste and destruction of aquatic life and the ecosystem.
https://en.wikipedia.org/wiki/Gold#PollutionBitcoin does offer something of value. It offers an open Network that is uncensoreable, Neutral, Global and open to anyone anywhere in the world - without anyone in charge. Without an Authority to decline anyone by virtue of age, race, creed or political affiliation.
You are right about the current perceived limits and challenges of Bitcoin.
The transaction limits as well as high fees are the cause of the scaling debates that are well known within the industry and in fact was the very trigger of the "civil war" that played itself out these past few years. The conflict was not over a lack of scaling options but rather one of
how best to scale which in turn decides what Bitcoin is. (Ironically, the restriction of the size of blocks to 1MB which has led to the symptoms of delays and high fees was self-imposed in 2011, years after Bitcoins creation.)
1 camp thinking the best way to scale was by removing the arbitrary restriction per block, losing out to the camp thinking that the creation of other secondary layers around the protocol was the more secure and safer way to proceed.
The thinking that the Bitcoin protocol itself should be a fast low-fee payment system lost out to the camp seeing the protocol more
as a settlement layer for the faster, light weight, more efficient channel built into the secondary layers around it. Now that the debate is resolved, the expectation is that the technology innovations that had been stalled in the past few years can proceed. (Innovations such as the
Lightening Network may be around the corner. )
The point is that with technology, it is common place to encounter scaling issues.
The internet in the 90's had similar scaling problems. People scoffed at using email on the Internet, then using images, then watching streaming video before most of the world was on dial-up modems. Scaling by building fatter Ethernet cables lost out to the revolutionary Fibreoptic Networks we have today.
The technology space would always encounter scaling problems, and it would not be silly to bet that we would always overcome scaling issues in innovative ways as we hit them. We have done it before and continue to do it on an exponential scale. In the internet age we are in today, it might be argued that Bitcoin is built for scaling better/faster than the competition.
With Bitcoin, the question was how to scale without sacrificing its fundamental trustless principles, safely and securely.
In comparison, I admit Central Banks have no scaling problems, they just print more money! Do they care about how safely and how securely they print while considering long term impact? Do they care about inflation or asset bubble creation in the long term, or just quick fixes to immediate political problems? How successful has their Central Planning been over the decades?
JF