Indeed, Krugman couldn't really have been more wrong.

Ignorance is the excuse used for many environmental disasters and commercial decisions that are bad for the planet. Burning coal, stripping the rainforest, over-fishing, etc etc.

If you grow Bitcoin exponentially like the internet has, e.g. doubling every year, then even if it was a good idea we'd actually be unable to power it in 8 years - it would need 128% of our current electricity capacity.

Tesla did no such thing. There was a report as such last week from a weak source. Telsa themselves most recently reported that progress is going well.

Sounds like a legacy automaker According to Tesla's marketing machine all resources should go to increase production. In reality, they don't have the capacity to put capital to work and they need to store it.

I'm really curious at the compliance issues around Bitcoin. The US Office of Foreign Assests Control has a long list of sanctioned countries where business has to be pre-approved by OFAC. The usual suspects: Iran, North Korea, Cuba, Venezuela and others.

I guess no one cares if I buy 0.0005 bitcoin from a guy in Venezuela, but 1.5 billion? I don't know how this works, is there anyway to check if you're buying bitcoin from someone you can buy legally?

I also do not think that Elon Musk matured South African born businessman would venture into unprofitable ground. His latest move only shows that perhaps there is something into crypto currencies and the lucrative future behind them for all. Disruptive persona Cathie Woods of Ark summed it up well.

https://finance.yahoo.com/news/ark-c...000053537.html

Personally, I adopted many promising cryptocurrencies into my portfolio (barring from crazily priced XBT) and saw increase by $15k just in a month time. That’s far more than my equities portfolio of similar size can achieve in the same time frame.

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You are right and your crypto portfolio might be worth 10x that in a year but it might also be worth 10x less. Meanwhile your equities are unlikely to be worth 10x less.

Appetite for risk, I suppose.

That’s all based on speculations. No pain no gain. Depends on how “hodling” resistant one is, both with equities and other assets.

depends how you define risk and your asset allocation

since inception BTC specifically has grown 200% YoY. Sure past is no predictor of the future but still... it's not something to ignore

I hold 99% in equities, fund, cash, real estate and 1% in BTC. I sleep well at night even if I lost that 1%

It's more nuanced than that. Bitcoin electricity consumption (i.e. mining resources devoted to it) scales with price, not transactions (because until mining resources catch up with rising price, it's a money-making machine and so suffers from the Tragedy of the Commons). At a low enough difficulty (e.g. as in 2010), a single mobile phone could process that many transactions. 3 to 4 transactions per second, anyway, is pretty much the maximum that the Bitcoin base layer can achieve.

If Bitcoin became the major global currency, it would have to consume a large proportion of global energy production (really at least half). So it's unsustainable in the long term.

The thing is, Proof of Work (the thing that's sucking up all this juice) is simply a beautiful solution (from a software engineering perspective) to maintaining the integrity of the transactional blockchain. There's no way, absent of breaking SHA-256 hashing[1], to rewrite the blockchain and so achieve double spends. It's passive security - you don't need to do anything else to be secure.

There is an alternative with minimal energy requirements - Proof of Stake (PoS). This is where transaction verifiers are chosen at random from existing coin holders in proportion to their holdings. The problem here is that there are a number of practical attacks (e.g. the 'long range attack'), which have to be locked down in the software in a whack-a-mole style. This requires active security where the developers might have to issue an emergency update to fix a previously unknown attack. Still, PoS is the only real alternative and this is where Ethereum is headed.

Bitcoin could transition to PoS at some time and may have to if Governments start freaking out about the energy consumption and start cracking down on it. Ethereum's version should be running fairly smoothly by then and Bitcoin could just copy the code, but hardforking Bitcoin is not an easy thing to do from a social perspective, so expect some angst here.

[1] There's nothing on the horizon here. Even quantum computing only gives a polynomial (squared) speedup in hash searching (Grover's Algorithm).

Exactly why I refuse to buy any bitcoins, it is terrible for environment. Whereas I believe that cryptocurrencies have their future, the way bitcoin works is terrible for environment. So much of valuable resources have already been wasted for this greed.

Unfortunately, many are not immediately aware of the huge environmental impact this craze has...

Are you an active investor speakeron? Just curious

I mined a bit back in the day (BTC and ETH); most sold at it'll-surely-never-get-higher-than-this prices, but still have a modest stash. I don't really actively trade currently, but keep an eye on things - particularly Ethereum, which is much more interesting than Bitcoin due to the DeFi layer. (In the same way that stocks are more interesting than gold.)

I have no interest in Bitcoin because of its price and hype surrounding it. However, I have increased my position in Etherum for the same reason. Decentralized finance (Defi) is growing and also ERC-20 token standard has many applications.

https://finance.yahoo.com/news/intan...183950745.html

https://finance.yahoo.com/news/erc-2...125235577.html

I despise a “pumping and dumping” of any assets short term but rather believe in hodling with investors solidarity which is the way to preserve some wealth that can be used later in case world inflation hits the roof.

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I don't have the money to risk/waste on BTC but I had bought a few hundred chf a while ago just to play around .. couple of years ago maybe .. ]
It's doubled in worth just sitting there.. I means it's only a large 3 figure sum, but still ..

Maybe I should change it to ETH. :-/.

I'm about as financially clever as a shoe.

True SHA-256 isn't broken and is unlikely to be broken any time soon.

But the overall statement is false - if you control > 50% of the miners, you can write what you like into the blockchain (see https://www.investopedia.com/terms/1/51-attack.asp for a summary) - hence me highlighting that 65% of the miners are based in China, that well known country that never enforces central control and always follows global financial rules...

My statement should have included a ceteris paribus. If you control 51% you can gradually build a longer blockchain (this is why asymptotic energy use has to reach 51% of global production), but you can't write whatever you want into blocks - you can remove your own transactions so that you can double spend and also refuse to add transactions from others, but you can't spend anybody else's coins or add any coins beyond the block reward.

At this point the system dies - it would cause the equivalent of a bank run, and by design there is nobody to step in and stabilise the situation.

The thing is that people think there would be no incentive for miners to do that, but as a global attack on the financial system by a state player it isn't so clear cut.

This was endlessly discussed on bitcointalk when certain mining pools became too popular (and probably still is on r/bitcoin). A solution is to hardfork with a different mining algorithm (the Bitcoin community's famous resistance to hardforks would probably evaporate in such a situation), but I agree that it could be an existential risk and the coin might never recover.

Ethereum certainly came back from the grave when it had to do an emergency hardfork because of the race condition that gave rise to the DAO hack (undoing the hacker's transactions in the process).

There's always been a debate over who holds the power in Bitcoin - the miners who validate the blocks or the holders of Bitcoin (the users) who choose whether to accept them. The White Paper assumes its the miners, but it also assumes that every user is also a miner. This assumption went away (to Satoshi's chagrin) once mining became specialized (with graphics cards, then FPGAs, and finally ASICs).

Certainly, with the SegWit fork (this increased effective transaction space and was soft, rather than hard - which means only miners had to apply it), the users won. The miners didn't want it at all, but accepted it in the end.

In the real end, if a large nation state wants to bring Bitcoin down outside of regulating it, it can. (Unless Bitcoin reaches the global 51% energy usage stage...)

Exactly - the difference with national currencies is you choose your country of risk up front, whereas with a distributed ledger you have no control over who may step in and take over.

Well, we've already established that Bitcoin is doomed because of energy usage, but 5 orders of magnitude value increase over a decade (it was about 10 years ago that BTC managed to hit one dollar) buys a hell of a lot of risk tolerance. The future is PoS, which exposes you to a different set of risks, but a 51% attack is probably not one of them for a high-value coin (absent Elon Musk's plans to accumulate and accumulate and then be evil...).

Short term investing to ride the gain, even in something with a limited lifespan, isn't necessarily a bad idea.

But IMO based on the environment impact, Musk is already being evil - why not diversify into coal and palm oil to really get the full impact.