Merged: Bitcoin - Part 3

[psionl0]

Originally Posted by Pixel42

Before I do that, can you please explain to me where those "few million" would have come from? Did they just materialise out of thin air, did they use to belong to other people who are now a little (or a lot) poorer, did making them have an environmental impact?

I'd need to know what the cost of them was so I can choose the most appropriate charity to pay it back, and then calculate whether I'd done more harm than good.

How are you going to measure that? It seems to me that the only losers are the ones who bought high and sold low (or left them in a shonky exchange too long). The hodlers are doing fine thank you very much.

[ponderingturtle]

Originally Posted by psionl0

GOTO 2416.

Exactly banning things doesn't work so we shouldn't ban kiddy porn, or asbestos.

[ChrisBFRPKY]

Originally Posted by jeremyp

No. The table is right. The text is wrong. The energy consumed by the top 20 gold producers is given as 306,646 TJ. The gold produced by the top 20 gold producers is given as 30,857 koz. Divide the one figure by the other and you get approximately 8 GJ/oz. The figures only make sense if the column labels are correct.

And think about it: if the energy requirement was as high as you say it is, nobody would be able to afford to mine gold.


You do realise that trading in gold doesn't require it to be moved anywhere, don't you? It only needs to be moved when somebody wants to use it for something.


No, I would rather have stocks and shares.

And I'd rather just take a credit card with me. Credit cards just work. The conversion into local currency happens automatically and I am protected if I do get scammed.

At least you admit the page you linked to has something wrong with the data.

[ChrisBFRPKY]

Originally Posted by Pixel42

Before I do that, can you please explain to me where those "few million" would have come from? Did they just materialise out of thin air, did they use to belong to other people who are now a little (or a lot) poorer, did making them have an environmental impact?

I'd need to know what the cost of them was so I can choose the most appropriate charity to pay it back, and then calculate whether I'd done more harm than good.

Ah, I see. The morality factor. Yet with that high of a moral standard that would also mean you can't invest in anything or start a business. Think about it, when you profit from stock where did the profit come from? If you own stock in the major oil companies then you profit from hard working people who give up a good portion of their paycheck just to get back and forth from work.
If you purchase real estate and sell for a profit, you've taken money from people who are now a little poorer. You certainly can't open a market or any type of business because you may profit from those customers who shop there.

If you use that moral standard on Bitcoin, to be fair you must also apply it to everything else. Buying something for $.05 and offering it for sale at $.06 is not anything to be ashamed of. You're offering a product and if someone wishes to buy it they will, if not then you won't sell that product. That's how business and Bitcoin works.

[ChrisBFRPKY]

Originally Posted by ponderingturtle

Exactly banning things doesn't work so we shouldn't ban kiddy porn, or asbestos.

Egypt, Iraq, Qatar, Oman, Morocco, Algeria, Tunisia, Bangladesh, and China have all banned cryptocurrency. Must be working! Oh wait.

[Dr.Sid]

Originally Posted by ChrisBFRPKY

Egypt, Iraq, Qatar, Oman, Morocco, Algeria, Tunisia, Bangladesh, and China have all banned cryptocurrency. Must be working! Oh wait.

Well .. countries like that can hardly ban anything. It would work quite well in civilized countries. It would stop investors big and small. Even today you basically can't convert crypto to fiat in secret or anonymously. All exchanges are regulated and have to disclosure details in tax investigation.

[lomiller]

Originally Posted by ChrisBFRPKY

Waste not want not. 1 ounce of Gold reportedly requires 8.3 Terajoules of energy to mine. As of now that's $1,841 USD worth of Gold.
.

This seems unlikely.

1 gallon of diesel cost ~5.7USD and contains ~140MJ. 8.3TJ would translate to ~60 000 gallons of diesel costing ~360 000USD to mine 1 oz of gold so your number must be ~3 orders of magnitude too high. Higher than that if you consider that internal combustion engines only convert ~30% of their heat into usable energy.

Originally Posted by ChrisBFRPKY

10 ounces of Gold at 2,305,557 KWH 2300KWh per ounce to mine = 23,055,570 KWH (Twenty-three million, fifty-five thousand, five hundred seventy KWH.) 23 000KWh

Gold requires 23,055,570 KWH 23 000KWh and approximately the same value amount in Bitcoin requires 143,000 KWH.

Of course this exudes the fact that gold has utility (industrial uses plus making pretty things) whereas bitcoin has almost none. (Keep in mind this is coming from someone who doesn't think much of gold as an investment. At best it's a proxy for the economy of India)

[psionl0]

Originally Posted by ponderingturtle

Exactly banning things doesn't work so we shouldn't ban kiddy porn, or asbestos.

GOTO 2427

[Pixel42]

Originally Posted by ChrisBFRPKY

Ah, I see. The morality factor. Yet with that high of a moral standard that would also mean you can't invest in anything or start a business. Think about it, when you profit from stock where did the profit come from? If you own stock in the major oil companies then you profit from hard working people who give up a good portion of their paycheck just to get back and forth from work.
If you purchase real estate and sell for a profit, you've taken money from people who are now a little poorer. You certainly can't open a market or any type of business because you may profit from those customers who shop there.

If you use that moral standard on Bitcoin, to be fair you must also apply it to everything else. Buying something for $.05 and offering it for sale at $.06 is not anything to be ashamed of. You're offering a product and if someone wishes to buy it they will, if not then you won't sell that product. That's how business and Bitcoin works.

Indeed, which is why many people (including me) look for the most ethical investments, avoid buying products from companies known to exploit their workers or pollute the environment etc. My very presence on this planet will inevitably impact it and my fellow citizens but there are still choices I can make which affect whether that impact is for good or ill, or at least minimise the ill.

I asked where the money I might make from buying and selling Bitcoin would come from because I genuinely don't know, the whole cryptocurrency thing is a complete mystery to me. I recently chose to invest £5000 in a community solar farm project, maybe I should indeed have used it to make millions out of Bitcoin and donated them to charity instead. So I would appreciate an answer, if you have one.

[psionl0]

Originally Posted by Pixel42

I asked where the money I might make from buying and selling Bitcoin would come from because I genuinely don't know, the whole cryptocurrency thing is a complete mystery to me.

I could understand it if you refused to get involved in bitcoin due to the excessive energy consumption devoted to mining.

However, I don't understand your interest in whether a speculator gained or lost money in bitcoin. Gamblers wanna gamble. Most of the gains or losses in bitcoin speculation are unrealized anyway.

[Dr. Keith]

There was no need to ban beanie babies or tulips, so I doubt crypto will be banned.

[lomiller]

Originally Posted by psionl0

GOTO 2427

You realty want to advertise your attempts to create Strawman arguments?

[jeremyp]

Originally Posted by psionl0

GOTO 2464.

Another false equivalence.

[jeremyp]

Originally Posted by ChrisBFRPKY

At least you admit the page you linked to has something wrong with the data.

No there's nothing wrong with the data which is in a table that comes from an external source. They have misinterpreted it, that is all.

[lomiller]

Originally Posted by ChrisBFRPKY

Yet with that high of a moral standard that would also mean you can't invest in anything or start a business. Think about it, when you profit from stock where did the profit come from?

Net present value of future earnings.

When you own shares you own a fraction of that companies future profits no matter whether they return that to you in the form of dividends or re-invest it for you in the form of retained earnings. These future earnings have an equivalent value in present day money (called net present value)which gives a company it's value. If future earnings increase so does the value of the company.

This won't translate to bitcoin, since it has no future earnings.

Originally Posted by ChrisBFRPKY

If you own stock in the major oil companies then you profit from hard working people who give up a good portion of their paycheck just to get back and forth from work.

There is utility in getting back and forth to work, and from the customer perspective there is an overall increase in utility. The problem with oil companies is that a large part of the cost of oil is socialized instead of being paid for by the company or it's customers. These socialized costs reduce economic efficiency and overall economic productivity in the long run and therefor hurt consumers, even those benefiting from artificially cheep gasoline.

Originally Posted by ChrisBFRPKY

If you purchase real estate and sell for a profit, you've taken money from people who are now a little poorer.

On the contrary there is value in meshing the needs of buyers with those of sellers so long as there is no monopoly or market manipulation involved. This added value increases the overall goods\services produced by the economy and makes everyone a little richer.

Originally Posted by ChrisBFRPKY

If you use that moral standard on Bitcoin, to be fair you must also apply it to everything else.

Bitcoin doesn't have the positive economic benefits of the other things you mention.

The lack of economic benefits to offset the high infrastructure and energy costs means the mere existence of bitcoin makes everyone a little poorer. Since those costs are socialized, the people causing the problem get to benefit financially from doing so. Regulation (AKA laws against socializing the costs of your economic activity) is a key part of limiting the damage these types of schemes do the the economy and are probably entirely appropriate with bitcoin.

[jeremyp]

Originally Posted by lomiller

This seems unlikely.

1 gallon of diesel cost ~5.7USD and contains ~140MJ. 8.3TJ would translate to ~60 000 gallons of diesel costing ~360 000USD to mine 1 oz of gold so your number must be ~3 orders of magnitude too high. Higher than that if you consider that internal combustion engines only convert ~30% of their heat into usable energy.




Of course this exudes the fact that gold has utility (industrial uses plus making pretty things) whereas bitcoin has almost none. (Keep in mind this is coming from someone who doesn't think much of gold as an investment. At best it's a proxy for the economy of India)

He's wrong by exactly three orders of magnitude. Somebody misread the units on the table in the article I linked earlier.

It should be pretty obvious really: if the energy cost of mining an ounce of gold was more than its price on the market, the miners would be making a loss on every ounce. Nobody would be mining gold.

There's anther point which is that, if nobody was mining gold, it would still be possible to speculate on its value as a commodity. The energy costs will be practically zero because when you buy gold, it isn't delivered to you (unless you are buying it to make it into something), it just sits in a bank vault and somebody in the bank just makes a note that you now own the gold, not the seller.

With Bitcoin, the energy costs are associated with each and every blockchain transaction. When they stop mining (i.e. creating new coins), the energy costs will still be there.

[psionl0]

Originally Posted by jeremyp

Another false equivalence.

Can you prove that a ban on bitcoin would be more successful than a ban on drugs?

[ChrisBFRPKY]

Originally Posted by Pixel42

Indeed, which is why many people (including me) look for the most ethical investments, avoid buying products from companies known to exploit their workers or pollute the environment etc. My very presence on this planet will inevitably impact it and my fellow citizens but there are still choices I can make which affect whether that impact is for good or ill, or at least minimise the ill.

I asked where the money I might make from buying and selling Bitcoin would come from because I genuinely don't know, the whole cryptocurrency thing is a complete mystery to me. I recently chose to invest £5000 in a community solar farm project, maybe I should indeed have used it to make millions out of Bitcoin and donated them to charity instead. So I would appreciate an answer, if you have one.

There are several strategies one can use. All it takes to get started is to open an account at a reputable cryptocurrency company. You can quite literally control your investment vehicle from the comfort of your home. Buy in, sell, get out or repeat. If you buy and sell from your account you can deposit or withdraw directly to your bank.

Some buy in, hold their crypto and simply wait for an increase in price. Others buy in and day trade when the market has some decent volatility. (So far in the past 48 hours BTC has had a $1600/coin price difference between the daily high and low. A decent trader would have likely realized $1000 per Bitcoin average profit over this past 2 day period) I've said it before and I'll say it again, it's relatively easy to make $1000 a day trading cryptocurrency. Do that 1000 times and you've made your first crypto million. Or make $2000, 500 times or $10,000 , 100 times.

Bitcoin should be considered as a commodity for trade IMO. Speculation is where the money is, again IMO.

Anyone can become a trader. Simply start small to practice buying and selling, learn how the fees work and at what price point you can sell to be in profit. Your calculator becomes your best friend. Or some choose to buy and hold. Holding is a sound strategy but may take longer to realize profits. Set yourself a magic number and if or when it arrives sell half or all of your bag. (half means you still have coin in case you missed the top)

If it sounds interesting go for it. If it's not for you at least now you know.

BTW, the community solar is usually a scam. If it's sponsored by your power company you end up paying about 3 to 4 times what the solar panels actually cost and they usually cut you off the program after 20 years, even though most panels still produce 80% of wattage as they did when new. At least that's the scam they run here in the States.

[Pixel42]

Still waiting for an answer to my question.

[ChrisBFRPKY]

Originally Posted by lomiller

Net present value of future earnings.

When you own shares you own a fraction of that companies future profits no matter whether they return that to you in the form of dividends or re-invest it for you in the form of retained earnings. These future earnings have an equivalent value in present day money (called net present value)which gives a company it's value. If future earnings increase so does the value of the company.

This won't translate to bitcoin, since it has no future earnings.



There is utility in getting back and forth to work, and from the customer perspective there is an overall increase in utility. The problem with oil companies is that a large part of the cost of oil is socialized instead of being paid for by the company or it's customers. These socialized costs reduce economic efficiency and overall economic productivity in the long run and therefor hurt consumers, even those benefiting from artificially cheep gasoline.



On the contrary there is value in meshing the needs of buyers with those of sellers so long as there is no monopoly or market manipulation involved. This added value increases the overall goods\services produced by the economy and makes everyone a little richer.



Bitcoin doesn't have the positive economic benefits of the other things you mention.

The lack of economic benefits to offset the high infrastructure and energy costs means the mere existence of bitcoin makes everyone a little poorer. Since those costs are socialized, the people causing the problem get to benefit financially from doing so. Regulation (AKA laws against socializing the costs of your economic activity) is a key part of limiting the damage these types of schemes do the the economy and are probably entirely appropriate with bitcoin.

All I know is I've been retired since turning 49 a few years back, almost four years to the day after I began day trading crypto. Bitcoin and other cryptocurrencies were the vehicle that made it possible. My investments went from $300 each to over $60K each at one point. Stock doesn't do that.

[ChrisBFRPKY]

Originally Posted by Pixel42

Still waiting for an answer to my question.

Please be more specific.

[lomiller]

Originally Posted by jeremyp

There's anther point which is that, if nobody was mining gold, it would still be possible to speculate on its value as a commodity. The energy costs will be practically zero because when you buy gold, it isn't delivered to you (unless you are buying it to make it into something), it just sits in a bank vault and somebody in the bank just makes a note that you now own the gold, not the seller.

Gold is essentially a proxy for the economy of India at this point. 40% of all the gold mined worldwide in 2021 went to the Jewelry market there.


Globally about 80% of all gold production goes into Jewelry. About 10% goes to other industrial products. Most of the remaining 10% goes to speculators but some does still go into the financial system. for 90% of the gold produced there are shipping costs, but it's also going to produce very real products.

[ponderingturtle]

Originally Posted by psionl0

Can you prove that a ban on bitcoin would be more successful than a ban on drugs?

Why does it need to be? The ban on sexually assaulting children or rape in general is poorly enforced, therefor by your reasoning we shouldn't bother with criminalizing them at all.

[Pixel42]

Originally Posted by ChrisBFRPKY

Please be more specific.

I buy x amount of Bitcoin, which costs me £5000.

Some time later I sell it and, because the price has rocketed, I now have £1,000,000.

Where did that £995,000 come from?

I want to know what harm, if any, generating that £995,000 did to my fellow citizens, the environment, society in general, so I can determine whether donating that money to charity as you suggested would really make the exercise ethically acceptable.

[Pixel42]

Let's see if I can clarify what I'm asking with a couple of examples.

Suppose I buy a painting by a struggling artist for £5000 and some time later, after the artist becomes fashionable, sell it for £1,000,000. I know that £995,000 has almost certainly come from rich people who have driven the price higher in an effort to make as much profit as possible. They were never going to donate that money to charity or fund something worthwhile but with small profits. So if I donate the money to charity, that's done some net good.

Suppose I invest £5000 in a company that is making a scam product like homeopathic remedies. Some time later I sell my shares for £1,000,000. I know that money has mostly come from (or at least been enabled by) poor people who have been bamboozled into buying something worthless. Even if I donate my profits to charity, it's unlikely I've helped make the world a better place.

I'm essentially asking which of these scenarios investing in Bitcoin is closest to.

[ChrisBFRPKY]

Originally Posted by Pixel42

I buy x amount of Bitcoin, which costs me £5000.

Some time later I sell it and, because the price has rocketed, I now have £1,000,000.

Where did that £995,000 come from?

I want to know what harm, if any, generating that £995,000 did to my fellow citizens, the environment, society in general, so I can determine whether donating that money to charity as you suggested would really make the exercise ethically acceptable.

I understand. As I mentioned in my post above, Bitcoin and other crypto should be considered a commodity IMO. Profit comes from speculation and trade. As far as personal morality, that's up to you.

Would any fellow citizens be harmed? Unknowable. Did trader Bob buy Bitcoin at $20K and sell it a $10K? Did trader Bob move his Bitcoin to a wallet on his PC and lose the private keys? You can theorize any number of scenarios yet you cannot know if anyone was harmed. Same with any other commodity. If you've ever purchased a product from China, was child labor used to produce it? How can you know?

Was the Environment harmed? Again, have you ever bought anything from China? Then yes. Any production or transportation of any product will harm the Environment. The nice thing about Bitcoin production is that most mining facilities use renewables, especially Solar power and the transportation costs are minimal.

Will society be harmed? This one is easy: Nope, society will not be harmed. Wealth increases standards of living, creates jobs, promotes education and growth, communities prosper.

In the end it's up to the individual to decide. What can one invest in to create wealth that does no harm or has no negative effects for each category: the Environment, people and society in general? The answer is nothing.

[dudalb]

Originally Posted by Dr. Keith

There was no need to ban beanie babies or tulips, so I doubt crypto will be banned.

At least Beanis babies might have some value on the collectables market.

[dudalb]

Crypto currency will always have true beleivers; it is a Libertarain wet dream, frankly.

[dudalb]

Originally Posted by a_unique_person

Mining gold takes a hell of a lot of energy. But I'm not a gold bug either.

It was back breaking work, if you have read any descriptions of what prospecting and mining for gold was like during the California Gold Rush.

[Dr. Keith]

Originally Posted by ChrisBFRPKY

I understand. As I mentioned in my post above, Bitcoin and other crypto should be considered a commodity IMO. Profit comes from speculation and trade. As far as personal morality, that's up to you.

Would any fellow citizens be harmed? Unknowable. Did trader Bob buy Bitcoin at $20K and sell it a $10K? Did trader Bob move his Bitcoin to a wallet on his PC and lose the private keys? You can theorize any number of scenarios yet you cannot know if anyone was harmed. Same with any other commodity. If you've ever purchased a product from China, was child labor used to produce it? How can you know?

Was the Environment harmed? Again, have you ever bought anything from China? Then yes. Any production or transportation of any product will harm the Environment. The nice thing about Bitcoin production is that most mining facilities use renewables, especially Solar power and the transportation costs are minimal.

Will society be harmed? This one is easy: Nope, society will not be harmed. Wealth increases standards of living, creates jobs, promotes education and growth, communities prosper.

In the end it's up to the individual to decide. What can one invest in to create wealth that does no harm or has no negative effects for each category: the Environment, people and society in general? The answer is nothing.

Bitcoin differs from all other commodities in that it has no intrinsic value. It’s value is purely based on the greater fool theory. One invests in the idea that a greater fool will come along who will pay more at a later date. Not because there is a greater need for the commodity just because they think there will be an even greater fool after them.

[ChrisBFRPKY]

Originally Posted by lomiller

Net present value of future earnings.

When you own shares you own a fraction of that companies future profits no matter whether they return that to you in the form of dividends or re-invest it for you in the form of retained earnings. These future earnings have an equivalent value in present day money (called net present value)which gives a company it's value. If future earnings increase so does the value of the company.

This won't translate to bitcoin, since it has no future earnings.



There is utility in getting back and forth to work, and from the customer perspective there is an overall increase in utility. The problem with oil companies is that a large part of the cost of oil is socialized instead of being paid for by the company or it's customers. These socialized costs reduce economic efficiency and overall economic productivity in the long run and therefor hurt consumers, even those benefiting from artificially cheep gasoline.



On the contrary there is value in meshing the needs of buyers with those of sellers so long as there is no monopoly or market manipulation involved. This added value increases the overall goods\services produced by the economy and makes everyone a little richer.



Bitcoin doesn't have the positive economic benefits of the other things you mention.

The lack of economic benefits to offset the high infrastructure and energy costs means the mere existence of bitcoin makes everyone a little poorer. Since those costs are socialized, the people causing the problem get to benefit financially from doing so. Regulation (AKA laws against socializing the costs of your economic activity) is a key part of limiting the damage these types of schemes do the the economy and are probably entirely appropriate with bitcoin.

1. Just like Gold has no future earnings.
2. Oil companies refine and sell a commodity. Policies that affect that commodity affect the price the consumer pays.
3. I realize Real Estate and brokering it is not an evil profession, neither is profiting from it.
4. We disagree. Bitcoin is and has been an economic benefit. Energy cost is offset more often than not by renewables. It would be a difficult argument to make that Bitcoin has not increased the installation and use of renewables. Every product or commodity reflects a cost in energy to produce and transport. It would not be out of the question to speculate that the Bitcoin mining industry uses more renewables than any other single industry.

[ChrisBFRPKY]

Originally Posted by Dr. Keith

Bitcoin differs from all other commodities in that it has no intrinsic value. It’s value is purely based on the greater fool theory. One invests in the idea that a greater fool will come along who will pay more at a later date. Not because there is a greater need for the commodity just because they think there will be an even greater fool after them.

One could also argue that Paypal has no intrinsic value. Though it does seem to be an electronic method to store and transfer wealth, although not nearly as secure as Bitcoin. The value is in blockchain technology. The World banking industry agrees. IMO the Bitcoin is the commodity produced by the blockchain. You can't have one without the other.

[Captain_Swoop]

I can use Paypal to buy something or send money to someone without worrying that the value will have changed between my clicking send and their bank receiving the money.

[Dr.Sid]

Originally Posted by Captain_Swoop

I can use Paypal to buy something or send money to someone without worrying that the value will have changed between my clicking send and their bank receiving the money.

That's the same with bitcoin too. It changes price quick, but not that quick. Worst I've seen was 10% in 20 minutes, when Elon Musk changed name of his twitter channel. But that was unprecedented, and to this time never repeated, usually it's several times slower.
The whole bitcoin trading is just bitcoin transactions .. and it has never been an issue.

[ChrisBFRPKY]

Originally Posted by Captain_Swoop

I can use Paypal to buy something or send money to someone without worrying that the value will have changed between my clicking send and their bank receiving the money.

Of course you can. Likewise, I can send a friend $100 in USDC and it will still be worth $100 USD when they receive it, and the day after. I can move mine for a much cheaper fee than Paypal, often free. I foresee most banks, if not all, will someday have their own stable coins to transact business on a routine daily basis. It's cheaper, more efficient and far more secure than moving tons of cash around the World.

[carlitos]

Originally Posted by Captain_Swoop

If mining becomes unprofitable and it all collapses, will we see cheaper graphics card?

Be careful. The last time bitcoin crashed, in 2019, people repacked their mining graphics cards into original packaging and returned them, and some of them were totally thrashed but sold as “new -open box.” This will happen again if it’s not already.

[carlitos]

Originally Posted by ChrisBFRPKY

Of course you can. Likewise, I can send a friend $100 in USDC and it will still be worth $100 USD when they receive it, and the day after. I can move mine for a much cheaper fee than Paypal, often free. I foresee most banks, if not all, will someday have their own stable coins to transact business on a routine daily basis. It's cheaper, more efficient and far more secure than moving tons of cash around the World.

Now do UST, TITAN, OUSD, Basis Cash, Digital Dollar, SafeCoin or USDN … or wait 3 months and do USDT.

[psionl0]

Originally Posted by Dr. Keith

Bitcoin differs from all other commodities in that it has no intrinsic value. It’s value is purely based on the greater fool theory. One invests in the idea that a greater fool will come along who will pay more at a later date. Not because there is a greater need for the commodity just because they think there will be an even greater fool after them.

WOW. Nobody has EVER claimed that bitcoin has "no intrinsic value" before. This is the first time this has ever been discussed.

Thank you for pointing out what nobody knew.

[The Great Zaganza]

Originally Posted by psionl0

Can you prove that a ban on bitcoin would be more successful than a ban on drugs?

if US companies would be banned from using bitcoin for transactions of any kind, it would.
we do not, actually, use drugs as currency.

[psionl0]

Originally Posted by The Great Zaganza

if US companies would be banned from using bitcoin for transactions of any kind, it would.
we do not, actually, use drugs as currency.

How well has that worked in China?