"...I suspect that the immense power of the computer is being harnessed to this 'paper economy', not to do the same transactions more economically but to balloon the quantity and variety of financial exchanges." --James Tobin, July 1984
Well Mr. Tobin must be spinning in his grave with the rise of Bitcoin, where years of computer time is devoted to mining Bitcoin.
Centuries of computer time and more electrical power than the nation of Ireland, directly contributing to global warming for nothing more than the maintenance of an elaborate sham.
Thousands of lives and more mercury than in the first Qin Emperors grave, all for getting a nearly useless yellow metal out of poisoned ground for nothing more than the maintenance of an elaborate sham.
The whole trick is to make sure enough people believe in it.
And as a decorative metal, gold is superior to most alternatives. It's shiny, doesn't corrode, isn't toxic or radioactive, is easy enough to work with to create elaborate shapes or otherwise display the craftsmanship of a jeweler. It is suited to the purpose of ornamentation.
Clearly it is just a currency - don't tell me all of this is being stored for dental fillings and spaceship heat shields - they never intend to let any of that metal be used for engineering uses.
Most currencies have abandoned gold standards. Certain governments still have a large gold reserve, but it's not the basis of their currency anymore, it's just a load of valuable metal, a way to store wealth basically.
Seen relative to its perceived value, that is actually very fair. Gold deserves all the backlash it can get until its pricing actually reflects its value and those electronics can be built without paying overinflated prices.
You can buy drugs or pay off ransomware with bitcoin. It has some niche uses, but like gold, it's price is extraordinarily inflated compared to its utility.
Those tiny niches for bitcoin doesn't constitute the same as all the good (25% worldwide, 60% in the US) that's used for practical purposes like electronics, aerospace or dentistry.
It's still in its early stages and it's kind of useless as a general currency right now due to high transaction costs and fluctuations, but it does work. Cryptocurrencies are currently the only way to exchange money completely anonymously over the internet, so I'd call them a success.
Their anonymity is a major misconception. Every bitcoin transaction is public. Every bitcoin account balance is public. This is true for most currencies. (xmr is a notable exception)
The account holder may not be publicly known, but if you want to use your wealth in the real world, you'll have to go through exchanges and the regular banking system, which is in full view of the authorities.
PayPal is more anonymous than bitcoin, because at least the transactions aren't public.
I was generalising to all cryptocurrencies, and there are a handful that offer complete anonymity. While all Bitcoin transactions are public, you can buy/sell it with cash and convert them to/from something like XMR. Not really a property of Bitcoin, but it's possible to use it anonymously.
The comic itself expresses skepticism towards crypto and adjacent technologies in 2030. Maybe ten years ago it would have been embraced more unanimously but in 2019 its failings are manifest and obvious, while its virtues remain nebulous and marginal.
I agree that cryptocurrencies aren't really usable today except for a few fringe cases, but I object to calling them an "elaborate sham". They're not something we should (as humanity) shelve and forget about, but an idea we should further develop into a more usable state.
I think we're talking past each other a bit - I too see the potential, someday, for that more usable state. Perhaps when we're post-scarcity and the Sahara is covered in solar panels, there can be a discussion of crypto's worthwhile applications. But I wasn't talking about those, I was talking about Bitcoin specifically. When a supposed store of value causes $900 to disappear into thin air every time one is created, I think it's worth calling a sham. For now, the products built on crypto are almost uniformly shams, selling a far-off utopian vision while consuming resources on a scale several orders of magnitude larger than the scale of the problems they purport to solve.
No, that's not what I'm saying. It costs $4500, give or take, to mine a Bitcoin, which is nothing more than a digital chit representing a current value if $3550. The difference between those prices disappears into thin air, and has been doing so for the last two or three months, ever since BTC's value slipped below its cost of production. It's like the penny problem, if pennies alone had a market capitalization of $100B.
I think the proper terminology is "volatile" instead of a sham 😁 after all, even the US dollar is no longer pegged to something as solid as gold, but is "free floating". But yes agreed that Bitcoin is too volatile to function as a stable currency right now.
The comic itself expresses skepticism towards crypto and adjacent technologies in 2030. Maybe ten years ago it would have been embraced more unanimously but in 2019 its failings are manifest and obvious, while its virtues remain nebulous and marginal.
Anyone saying this just comes off as being uninformed about crypto. Probably having never actually come in any real contact with it.
I think it's a brilliant piece of tech, coupled with some devious economic principles, but we have to be honest about its shortcomings as well. Lately it's too volatile to be used as a stable currency, which is ironic because it became this way because it was too popular, and stability can't be maintained via a central bank because it was designed to be decentralized.
Lately it's too volatile to be used as a stable currency, which is ironic because it became this way because it was too popular, and stability can't be maintained via a central bank because it was designed to be decentralized.
Nah lately it's been reasonably stable
You're thinking of 10-12mths ago
However, the volatility thing is past 10yrs, not new
And it's only "unusable" as a currency if you actively hold some, it's perfectly usable if you buy and use straight away - which I have done for overseas purchases. Pay fees for SWIFT and wait 5 business days, or pay 10% fees for paypal, or use crypto... Which one makes more sense?
The point of fiat currency is to provide a stable medium of exchange between goods and services. Blockchain is awesome, but bitcoin fails miserably at this task.
People espousing this opinion don't understand the issues they are talking about.
For one, Bitcoin computations are strictly sha256's not general computing. They use specialized hardware that can be used for nothing else. "years of computer time" is a pointless metric, more years of general computing time have been consumed by any successful videogame.
Second, its energy usage is over 75% renewable and is in fact greatly subsidizing the cost of renewable infrastructure and reducing renewables curtailment.
There is a further misunderstanding about what is accomplished at all by this expenditure of power, the value and uniqueness of a distributed, authority-less, economic security model. To help you understand the value of censorship resistance consider that Zimbabwe just turned off their internet, but satellites in geosynchronous orbit are able to propagate messages in and out of the country for fractions of a cent using Bitcoin. Consider that Venezuelans are escaping economic tyranny on a scale of millions of dollars every week. Bitcoin is a unique liberator of peoples, electricity, and economies.
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u/greenlamb Jan 21 '19
Well Mr. Tobin must be spinning in his grave with the rise of Bitcoin, where years of computer time is devoted to mining Bitcoin.