Learned something new. Bitcoin

[Iron369]

The intrinsic value of bitcoin is that transactions are untraceable......this is of great value to some ,and fluctuations in value for the instant the transfer takes is of no consequence..........and as you might imagine ,banks are developing their own cryptocurrency to eventually replace the SWIFT system they use now.

The intrinsic value of Bitcoin is its transparency. The fed reserve can tell you what your dollar is worth based on whatever metrics they choose to value it. Bitcoins value is what you are willing to pay for it and EVERY transaction it recorded and verified. If Congress wants to print $2.3t dollars to pay for stimulus payments, can YOU see and verify where every dollar went? Can YOU determine how much inflation will occur to your current dollars as a result of what the feds do?

[ryanmattes]

Everyone constantly mentions the energy consumed mining Bitcoin. There are FAR more wasteful institutions than mining operations. Like Vegas. Like Christmas lights. Soon like electric vehicles. I’m not saying that it’s not a problem if fossil fuels are being used to mine it, but even in China, they are building renewable power infrastructure for the mining industry.
Oh yeah... plus 18m of the 21m Bitcoin that can ever exist have already been mined. As computers become faster and more efficient, the power necessary will be reduced to coincide with the renewable energy effort globally.

But... You can't beat physics. Computation has a cost, no matter what. Even if you're doing it in your head. It's been shown that someone solving a difficult problem burns more calories powering their brain than someone who isn't. So there is a baseline energy cost to computation, whether that's $1 on your electric bill or an extra taco for dinner. Fundamentally, you can't get around that essential energy cost.

And no one is doing these computations on paper, it would take too long. So once you take care of all the inefficiencies, the heat loss, and all of that, there is still a cost. It will never be free, because physics.

The question, which is the same one Elon Musk raised recently, is does it need to cost this much? Bitcoin is more inefficient than others intentionally. It's built in to that particular currency.

I'm under no illusions about cryptocurrency; it is the future. Eventually. But not necessarily Bitcoin. There are hundreds of others, of varying cost to produce, and there will be many more in the future. At some point, banks will switch to blockchain, or something like it, and all currency will be cryptocurrency, of one sort or another. You likely won't even notice when it happens.

My layman's investing advice, if you want to get into cryptocurrency, is to buy a small amount when it's new and forget about it. Buy $20 or $50 or $100 of it, and just forget you have it. A few years later, if you hear in the news that it went up 40,000% you can cash out and thank me (I accept Paypal, money orders, and personal checks. 8-D ). But if it doesn't, you're only out $20. Over time this will shake out and become stable, and then it won't seem like such a big deal.

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[ryanmattes]

But you won’t buy it today at (less than) $40k when it’s projected to be $12.6m in 2030?

No, because it barely existed 10 years ago, no one thought it would be worth $40k today, and I have absolutely zero trust in their predictions about ten years from now.

More likely than it breaking a million is for it to be completely supplanted by something else that we haven't even thought of yet.

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[Iron369]

But... You can't beat physics. Computation has a cost, no matter what. Even if you're doing it in your head. It's been shown that someone solving a difficult problem burns more calories powering their brain than someone who isn't. So there is a baseline energy cost to computation, whether that's $1 on your electric bill or an extra taco for dinner. Fundamentally, you can't get around that essential energy cost.

And no one is doing these computations on paper, it would take too long. So once you take care of all the inefficiencies, the heat loss, and all of that, there is still a cost. It will never be free, because physics.

The question, which is the same one Elon Musk raised recently, is does it need to cost this much? Bitcoin is more inefficient than others intentionally. It's built in to that particular currency.

I'm under no illusions about cryptocurrency; it is the future. Eventually. But not necessarily Bitcoin. There are hundreds of others, of varying cost to produce, and there will be many more in the future. At some point, banks will switch to blockchain, or something like it, and all currency will be cryptocurrency, of one sort or another. You likely won't even notice when it happens.

My layman's investing advice, if you want to get into cryptocurrency, is to buy a small amount when it's new and forget about it. Buy $20 or $50 or $100 of it, and just forget you have it. A few years later, if you hear in the news that it went up 40,000% you can cash out and thank me (I accept Paypal, money orders, and personal checks. 8-D ). But if it doesn't, you're only out $20. Over time this will shake out and become stable, and then it won't seem like such a big deal.

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No understand there is a power cost associated. There’s also a power cost associated behind every credit/debit card swipe and nobody puts those figures out, because it would bring attention to the irresponsible actions of burning coal to make the energy for it. I have (honestly) worked in the super cooled warehouses to process credit cards. I’ve installed multiple services just to supply power for bank transactions. (I’m an electrician). Big banks can make sure the inefficiency light is shone on crypto because ultimately, they have the most to lose. Everyone has to be able to see we are only fed the knowledge the powerful want us to know.

[ryanmattes]

What happens to Bitcoin if there is an EMP attack and electronics are fried? There already are cases of Bitcoin exchanges being hacked and people "losing" their Bitcoin wallet.

Interesting question. It depends on if anyone ever hit print. I'm absolutely certain that the original transaction is protected; copied, bunkered, hardened, etc. So that one ismost likely safe.

If any future transaction is still readable, say because you had it on a thumb drive in your pocket, so the emp wouldn't destroy it since it wasn't powered up when the blast went off, then the entire ledger of all transactions between the original and that one can theoretically be recovered.

Like I said, it exists, not in a computer, but in the fact that 2+2=4. It's pure, abstract math. So if you have any 2 transactions, every transaction in between is knowable, because they always "add up". Not really add up, as in just a sum, but there is only one possible set of transaction that can lead from one to the other. That's what makes it uncheatable. Cheating wouldn't add up. It also makes it recoverable between any two transactions.



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[Iron369]

No, because it barely existed 10 years ago, no one thought it would be worth $40k today, and I have absolutely zero trust in their predictions about ten years from now.

More likely than it breaking a million is for it to be completely supplanted by something else that we haven't even thought of yet.

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Maybe, maybe not. One of us is going to be right. lol. I didn’t buy Amazon 10 years ago either and wish I would have. Now I own it and it’s growth potential is greatly diminished, but I still own it because it will have a higher value in the future, probably, maybe, as long as Elon doesn’t tweet about hating Amazon. Lol

[Iron369]

Interesting question. It depends on if anyone ever hit print. I'm absolutely certain that the original transaction is protected; copied, bunkered, hardened, etc. So that one ismost likely safe.

If any future transaction is still readable, say because you had it on a thumb drive in your pocket, so the emp wouldn't destroy it since it wasn't powered up when the blast went off, then the entire ledger of all transactions between the original and that one can theoretically be recovered.

Like I said, it exists, not in a computer, but in the fact that 2+2=4. It's pure, abstract math. So if you have any 2 transactions, every transaction in between is knowable, because they always "add up". Not really add up, as in just a sum, but there is only one possible set of transaction that can lead from one to the other. That's what makes it uncheatable. Cheating wouldn't add up. It also makes it recoverable between any two transactions.



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Crypto blockchains are not stored in one central location. No bank or entity has control over it. A world wide emp destroying every digital institution would be the only way to destroy crypto assets ultimately making anything other than food,water and bullets a luxury.

[ryanmattes]

No understand there is a power cost associated. There’s also a power cost associated behind every credit/debit card swipe and nobody puts those figures out, because it would bring attention to the irresponsible actions of burning coal to make the energy for it. I have (honestly) worked in the super cooled warehouses to process credit cards. I’ve installed multiple services just to supply power for bank transactions. (I’m an electrician). Big banks can make sure the inefficiency light is shone on crypto because ultimately, they have the most to lose. Everyone has to be able to see we are only fed the knowledge the powerful want us to know.

I don't disagree. Banks are certainly covering up their current energy usage, while simultaneously villianizing cryptocurrencies for being inefficient. No argument there.

But there is a legitimate question to be asked about cryptocurrencies: do they need to be as inefficient as they are. And that's an especially important question if we're talking about the world standardizing on them, because the power needs could be enormous. Imagine 1.5 billion Chinese using it every day.

I don't subscribe to the apocalyptic fantasies of the global warming doomsayers, but it is a fact that we are using oil faster than it's being made. At some point, whether 50 or 5000 years in the future, we will have to have a better plan than dead dinosaurs (I know it's not really dead dinosaurs, but you get my point). My assumption is that we'll solve that problem before too long anyway. But for things that seem likely to eventually become global standards, it worthwhile to ask the question: could we do this better?

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[JimB..]

Texas just passed legislation making it illegal to include that, or any of Critical Race Theory, in the curriculum. No teacher can be made to reach that nonsense. Thank God.

If you mean HB3979, it did not pass. It was taken down today on a point of order, it is dead.

[ryanmattes]

Crypto blockchains are not stored in one central location. No bank or entity has control over it. A world wide emp destroying every digital institution would be the only way to destroy crypto assets ultimately making anything other than food,water and bullets a luxury.

That's actually what I'm saying. As long as *anyone* has a copy of two transactions, the whole ledger of transactions in between could be recovered. And a copy of the original transaction is absolutely in a physical location, heavily guarded, hardened against EMP, and being protected from tampering. Somewhere.

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[ryanmattes]

If you mean HB3979, it did not pass. It was taken down today on a point of order, it is dead.

Crap. I thought it would make it through.

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[Iron369]

I don't disagree. Banks are certainly covering up their current energy usage, while simultaneously villianizing cryptocurrencies for being inefficient. No argument there.

But there is a legitimate question to be asked about cryptocurrencies: do they need to be as inefficient as they are. And that's an especially important question if we're talking about the world standardizing on them, because the power needs could be enormous. Imagine 1.5 billion Chinese using it every day.

I don't subscribe to the apocalyptic fantasies of the global warming doomsayers, but it is a fact that we are using oil faster than it's being made. At some point, whether 50 or 5000 years in the future, we will have to have a better plan than dead dinosaurs (I know it's not really dead dinosaurs, but you get my point). My assumption is that we'll solve that problem before too long anyway. But for things that seem likely to eventually become global standards, it worthwhile to ask the question: could we do this better?

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We can do it better. Bitcoin was developed in 2009. Look how much more technologically advanced cars are in 2021 than 2009. There are constantly new projects developed everyday. Bitcoin is the O.G. People still hang on to fiat even though a better,faster alternative Bitcoin is available. Eventually, Bitcoin will reach the end of its life cycle just like fiat is today, but it’ll be outside my lifetime.

[Iron369]

That's actually what I'm saying. As long as *anyone* has a copy of two transactions, the whole ledger of transactions in between could be recovered. And a copy of the original transaction is absolutely in a physical location, heavily guarded, hardened against EMP, and being protected from tampering. Somewhere.

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Not somewhere... everywhere.

[Iron369]

Crap. I thought it would make it through.

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With big cities like Austin pushing the gay agenda and EVERYONE scared of offending EVERYONE, you really thought it would pass? I’ve lived in Texas. Currently living in Kentucky. I’ve never seen the disconnect from city dwellers and country folk like there is in Texas. As long as the city population continues to rise, it’ll get more lop-sided.

[JimB..]

Crap. I thought it would make it through.

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I guess that it’s still up in the air. The Senate had made amendments, the bill was killed on a point of order when the senate version went back to the house, and that should have ended it. In a unique move the Senate decided to reconsidered the bill, stripping off all the amendments and passing the house version. If they’d passed the house version the first time it would have been routine, but passing one version and then backing up after it has been sent to the other chamber and failed has constitutional issues. No idea if it’ll be challenged, but it looks like Patrick will be sending the original house version to the Governor, we’ll see what happens.

[GhostHawk]

I looked at it years ago, back when I was buying silver at 14$ and change per oz.

That 4 exists only as long as there is power. If the power ever went out over a wide area like an EMP attack or a big solar flare.
It becomes unrecoverable. That killed it for me right there.

Stuff happens. If it is not in my hands it does not exist for all practical purposes.

[William Yanda]

"Bitcoin is a scam IMHO. You can't carry it around, you can't see it, you can't hold it, you're supposed to just believe it's there." Burnt Fingers

I don't see a lot of difference between that and "full faith and credit of the US Government".

[bakerjw]

Very good discussion and explanations.
I work for Siemens DI FA in R&D where security, encryption and certificates are of paramount importance so I follow what is happening behind the scenes. I just never got interested in the mining or transaction processing.

I especially like the discussions about how value is determined. In a collapse scenario, descent into a barter system, value is only what is accepted by the seller or the buyer. An example that I use is someone who bought silver for $30.00 an ounce. That someone comes to me to buy a chicken and expects to buy $30.00 worth of chicken. I explain that 1 chicken is worth 1 ounce of silver. BUT... "I paid $30.00 for this coin!" I'd have to explain "Ok. This chicken costs $30.00"

I have little doubt that the US dollar will collapse and we will have a world wide currency in one form or another. Most likely a crypto one and I've no doubt that it will not have the interests of the people in mind rather it will be of most benefit to the bankers, oligarchs and others in seats of power.

Myself, I believe that the best investments are plumbum related. Boolets and such.

[JimB..]

I looked at it years ago, back when I was buying silver at 14$ and change per oz.

That 4 exists only as long as there is power. If the power ever went out over a wide area like an EMP attack or a big solar flare.
It becomes unrecoverable. That killed it for me right there.

Stuff happens. If it is not in my hands it does not exist for all practical purposes.

How is this any different than your bank ledger? Physical money is such a tiny part of the money supply, and probably your wealth, that not only doesn’t it matter today but in a collapse it’ll mean nothing at all.

[Plate plinker]

https://www.google.com/amp/s/www.cnb...arm-raid-.html

And today I stumbled onto this. Just a interesting little article about the energy consumption of crypto currency.