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q_w_e_r_t_y said:
"If you think BTC could be a currency for the developing world, what happens when the population increases 50% but the amount of currency can't be increased, and the amount of transactions and therefore speed of circulation of currency is fixed"

..
There are only 21 million (21,000, 000) bitcoins in existence, (approx 19 million have already been mined).

BUT

These bitcoins are currently divisible to 8 decimal places to units called satoshis (think pounds and pence, only rather than just two decimal places, you have 8). So there are 2.1 quadrillion satoshis (2,100, 000, 000, 000, 000) in existance.

The lightening network allows you to transact in sub-satoshi units = millisatoshis which are worth 1/1000th of a satoshi. So there are 2.1 quintillion milli-satoshis (2, 100, 000, 000, 000, 000, 000)

There is really no reason why you would need any more precision than 2.1 quintillion units of currency.
Even if you did - they can still be subdivided.
Click to expand...
None of that deals with the problem raised by Tom, which relates to the need to expand the money supply (not its granularity) when an economy expands.
 
littlebabyjesus said:
It's bullshit because the thing the computers are doing - solving an ever more difficult sudoku puzzle - is literally useless.
Click to expand...
That's not entirely true. The work that these computers are doing are making the protocol secure. Any decentralised and permissionless system is at risk of determined actors undermining it. The way bitcoin works is to make it vastly more profitable to dedicate your network and processing resources to supporting the network than disrupting it. Of course you can then argue that this outcome is useless, but the work to get to that outcome is not.

This thread has been the same for years. People who didn't like bitcoin early on and fully expected it to fizzle out have been continuously frustrated by it not doing so and by going on to make some of the world's most awful people very rich. The anti carbon/energy use angle was taken up enthusiastically not because they particularly care about this pressing issue, but because it goes along with their salty narrative.

I think that bitcoin and crypto have huge problems and issues to overcome if (and it's a big if) they are to be useful. First among these are the low quality and simple lack of technical understanding of the critics.
 
The history of Bitcoin has entirely backed up my criticism of it since the beginning. It’s not money. Ten years on, still nobody is using it as a unit of account, still nobody is using it as a basis of valuation and it is still undergoing horrendously volatile swings over the course of single weeks. This has been true since the beginning and is just as true today. The reason that this has continued to be true is inherent to the whole basis of it — calling actual money “fiat” money as some kind of implied criticism is to really misunderstand what money is, what gives it its stability and what allows it to function. The whole idea that Bitcoin can ever be used as money is just alt-right extreme libertarian fetishism.

Subsequent to these criticisms I then discovered that I can’t just ignore it because it also is destroying the planet. That’s a factor none of us should ignore.
 
Dragon 24 said:
My answer to your question would be Bitcoin is not necessarily the crypto that will replace fiat. Personally I think Ethereum has a better chance long term of being a day to day usage currency and Bitcoin being more like gold as a store of value.
Click to expand...

Right, so ETH does not have a total cap but it does have a fixed supply increase, which can be changed through agreement of stakeholders.
So firstly there is nothing to stop 51% of stakeholders from creating an endless amount of new ETH - do you consider this to be an issue?
Secondly, lets assume that supply continues to increase at an amount which is lower than the takeup of the currency, what happens when the takeup of the currency is high enough that there's no longer enough ETH to manage the needs of the system it's supposed to serve?

If you could explain what is different about ETH (or another crypto) over BTC that means you think it can manage a growing economy whilst being deflationary, that would be great.


q_w_e_r_t_y said:
"If you think BTC could be a currency for the developing world, what happens when the population increases 50% but the amount of currency can't be increased, and the amount of transactions and therefore speed of circulation of currency is fixed"

..
There are only 21 million (21,000, 000) bitcoins in existence, (approx 19 million have already been mined).

BUT

These bitcoins are currently divisible to 8 decimal places to units called satoshis (think pounds and pence, only rather than just two decimal places, you have 8). So there are 2.1 quadrillion satoshis (2,100, 000, 000, 000, 000) in existance.

The lightening network allows you to transact in sub-satoshi units = millisatoshis which are worth 1/1000th of a satoshi. So there are 2.1 quintillion milli-satoshis (2, 100, 000, 000, 000, 000, 000)

There is really no reason why you would need any more precision than 2.1 quintillion units of currency.
Even if you did - they can still be subdivided.

This thread is depressing, embarrassing even.

This is the most amazing technology, which is going to revolutionise the C21st, and people are still on about bloody tulips.

Its not about money. You just dont see it yet, but the people who get bitcoin understand that, money is just a by-product, this is about truth and justice, governance and internationalism, energy creation and resource distribution. Bitcoin is borderless, permissionless, neutral, public and censorship resistant. I can sent it to anyone, anywhere in the world in minutes directly, and no one at all can stop me, and that transaction will forever be recorded in a public ledger that anyone can view and that can never be deleted. Dont you see how powerful that is?
Click to expand...

So how does the economy work? Because if you're telling me that over time I have to subdivide my BTC in order to sell stuff then you really need to explain what motivation anyone will have to run a business or buy anything.

Because if I buy something for 1 BTC today, I'm not going to accept 0.1BTC for it tomorrow. You can subdivide your coins all you want, but if you only have 0.9BTC you can't buy the thing I am selling for 1BTC.
From the consumer side of things, if prices are going to fall tomorrow, why would I buy today?

And the secondary question to this is that if you thinking subdividing coins creates more money, then why is it - on a practical level, thinking about BTC as a currency - different to creating more money by shifting the decimal point the other way?


There is really no reason why you would need any more precision than 2.1 quintillion units of currency
Click to expand...

What if your economy needs to handle 2.2 quintillion transactions transactions with a value of 2.2 quintillion units in the period of time that it takes those 2.1 quintillion units to circulate?
I know, you subdivide further... creating more money to handle those transactions... it's more the notion that there's no reason why you'd need more units of currency than that that I'm challenging here. There is no fixed amount of currency which is enough, not least because the speed of circulation of currency is as important as the number of units of currency that exists.
 
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Idaho said:
That's not entirely true. The work that these computers are doing are making the protocol secure. Any decentralised and permissionless system is at risk of determined actors undermining it. The way bitcoin works is to make it vastly more profitable to dedicate your network and processing resources to supporting the network than disrupting it. Of course you can then argue that this outcome is useless, but the work to get to that outcome is not.
Click to expand...
It's useful only for running itself. Hence my later comment about circularity.
 
Idaho said:
That's not entirely true. The work that these computers are doing are making the protocol secure. Any decentralised and permissionless system is at risk of determined actors undermining it. The way bitcoin works is to make it vastly more profitable to dedicate your network and processing resources to supporting the network than disrupting it. Of course you can then argue that this outcome is useless, but the work to get to that outcome is not.

This thread has been the same for years. People who didn't like bitcoin early on and fully expected it to fizzle out have been continuously frustrated by it not doing so and by going on to make some of the world's most awful people very rich. The anti carbon/energy use angle was taken up enthusiastically not because they particularly care about this pressing issue, but because it goes along with their salty narrative.

I think that bitcoin and crypto have huge problems and issues to overcome if (and it's a big if) they are to be useful. First among these are the low quality and simple lack of technical understanding of the critics.
Click to expand...

come on man, you really think people here don't care about climate change? Like kabbes said, BTCs existence was never really an issue before the power usage became apparent.
 
I don't get this obsession with deflation. You don't want a money supply that gains value over time without circulating. That would be a shit form of money. It wouldn't work. It wouldn't circulate. A level of inflation actually serves a purpose here, reflecting the entropy inherent in any of the real-world value that money represents.
 
Dragon 24 said:
And what currency doesn't use energy from non renewable source? Yes me, ME, posted that. And at least the crypto space is attempting to do something about it.

Here's a graph of energy usage for you:

View attachment 270439

View attachment 270440

You can argue all you like, but it's not going away. Paypal moving towards it, rumours are Apple is moving towards it. US banking system both private investment banks and day to day banks like Wells Fargo... the groundswell is incredible.
Click to expand...

Can you provide any evidence that any substantial amount of miners are able to access "waste energy" and run their mining operations purely from oversupply?
Because that sounds like made up nonsense to me, at least at any scale.
Grids adjust supply to meet demand, there's lags of course but if miners start pulling on the grid, then that'll trigger peaker plants to up supply. I don't know how, on a practical level, you setup a connection which only activates when there is oversupply on the grid.

As far as the competition of mining goes, I think the pressure is the other way around - miners* are incentivised to increase their computing power and therefore energy use in the competition to win the next block. Every block that gets created is done by a single miner and every other miner's power usage is literally wasted. Compare that to a system run by eg VISA where they are incentivised to reduce power use and have maximum efficiency in terms of all of their computing power being used to process transactions because this makes them the most profit.

Your graph doesn't show what you want it to show because whilst the international banking system consumes more total energy than BTC does - about 10x by the looks of that graph - it also does orders of magnitude more transactions, more then the BTC network can handle at all. Not 10x the transactions but '000s of times. You must compare per transaction to get any meaningful number, but in any case the BTC network by design cannot handle all those transactions. Lightning network has been talked about for years, still isn't here.

*for the purposes of this conversation, miners includes mining pools as well as individual miners, it's not an important distinction.
 
BigTom said:
Can you provide any evidence that any substantial amount of miners are able to access "waste energy" and run their mining operations purely from oversupply?
Because that sounds like made up nonsense to me, at least at any scale.
Grids adjust supply to meet demand, there's lags of course but if miners start pulling on the grid, then that'll trigger peaker plants to up supply. I don't know how, on a practical level, you setup a connection which only activates when there is oversupply on the grid.

As far as the competition of mining goes, I think the pressure is the other way around - miners* are incentivised to increase their computing power and therefore energy use in the competition to win the next block. Every block that gets created is done by a single miner and every other miner's power usage is literally wasted. Compare that to a system run by eg VISA where they are incentivised to reduce power use and have maximum efficiency in terms of all of their computing power being used to process transactions because this makes them the most profit.

Your graph doesn't show what you want it to show because whilst the international banking system consumes more total energy than BTC does - about 10x by the looks of that graph - it also does orders of magnitude more transactions, more then the BTC network can handle at all. Not 10x the transactions but '000s of times. You must compare per transaction to get any meaningful number, but in any case the BTC network by design cannot handle all those transactions. Lightning network has been talked about for years, still isn't here.

*for the purposes of this conversation, miners includes mining pools as well as individual miners, it's not an important distinction.
Click to expand...
This is very well put. The bitcoin system is set up to maximise inefficiency. That's pretty much the madness in a nutshell.
 
kabbes said:
Ten years on, still nobody is using it as a unit of account, still nobody is using it as a basis of valuation and it is still undergoing horrendously volatile swings over the course of single weeks
Click to expand...
So in 10 year's time, if it is being used as a unit of account, a basis of valuation and the volatility is much less, will it be a success?
 
Idaho said:
So in 10 year's time, if it is being used as a unit of account, a basis of valuation and the volatility is much less, will it be a success?
Click to expand...
It will be a miracle, is what it will be. I fully expect that in ten years, true believers will still be insisting that we should come back in another ten years.
 
Idaho said:
So in 10 year's time, if it is being used as a unit of account, a basis of valuation and the volatility is much less, will it be a success?
Click to expand...
I don't see how that can happen. But let's say that it can and does happen. What advantages would that have? How would the world be improved by using bitcoin as a unit of account? It would be magnificent for certain rich people, I would think, and their tax dodging. But for the rest of us?
 
kabbes said:
It will be a miracle, is what it will be. I fully expect that in ten years, true believers will still be insisting that we should come back in another ten years.
Click to expand...
Side step.
littlebabyjesus said:
I don't see how that can happen. But let's say that it can and does happen. What advantages would that have? How would the world be improved by using bitcoin as a unit of account? It would be magnificent for certain rich people, I would think, and their tax dodging. But for the rest of us?
Click to expand...
Not really sure it's that good for tax dodging for the reasons I outlined earlier about it's lack of privacy.
 
Athos said:
Is pseudonymous; easiest thing in the world for someone to hide the identity of a wallet-holder, by using an exchange without KYC requirements.
Click to expand...
That's probably more hassle and more risky than just doing the normal thing of getting accountants and banks to set up offshore front companies and transferring assets to them. 99% of tax dodging is done this way. Crypto is irrelevant in this regard.
 
To expand on the above, I guess I should repeat what I have said multiple times in the last ten years.

Money is not just an exchange token for barter. It represents a system and it represents the power and stability of that system. People and companies don’t exist as context-free, isolated free agents. They are only able to perform their economic tasks through the mediation of a system. A power system, a transport system, an eduction system and so on. When you spend £1, you aren’t just exchanging a token, you are reflecting the exercise of the resources that the system that produced the £1 has given you.

The practical implementation of the mediation of economic activity through a system is that people have to pay in order to be part of the system. If you want to run a corporation in the UK, you need to produce UK accounts and pay UK taxes on the basis of those accounts. If you want to live in the UK, you have to do the equivalent in terms of tax returns and income tax. Your property will be subject to tax, your gains will be subject to tax. All this tax is collected by reference to the accounting of things in £.

This is what is meant by a unit of account — what units must people use to account for their activity. People in the UK don’t use £ for this because it looks nice. They do it because the state requires them to do it. That process is what has taken the abstract concepts of the system and turned it into a concrete form. It gives the £ stability. It also means that people value things in £ because ultimately they will need to account for it in £.

You can see what happens when the worth and hence power of the system gets threatened. At the time of Brexit, £ fell. This wasn’t a matter of immediate economic activity, which remained the same. It was because there was a threat to the value of the system’s structures to provide worth. Of course, even this massive systemic threat led to a movement in the £ FX rate that would be considered a normal week for Bitcoin.

When people dismiss “fiat” currencies then what they are actually doing is failing to recognise that it is these systemic power-based structures that create what money is. They fall into pre-17th century understandings of money as nothing more than exchange of goods. But that’s not how society works any more. It now works by specialisation of labour that provides efficiencies of production, with the whole thing critically dependent on everything else in the system. As that system expands, money itself expands. And with it all depending on the power underlying the system providing ongoing access to that system, money becomes the practical exercise of that power.

So what does Bitcoin have? Does it have anyone with power insisting that accounts are kept in it in order to provide ongoing access to their systems? No. Does it have people needing to price in it in order to be consistent with that accounting? No. If I use Bitcoin, can I pay my taxes in Bitcoin? No. It makes no more sense for me to deal in Bitcoin whilst living in the UK than it would make sense for me to do so in US$. Less, in fact, because at least the US$ has stability.
 
kabbes said:
If I use Bitcoin, can I pay my taxes in Bitcoin?
Click to expand...
In Switzerland and some US states you can.
People in the UK don’t use £ for this because it looks nice. They do it because the state requires them to do it. That process is what has taken the abstract concepts of the system and turned it into a concrete form. It gives the £ stability. It also means that people value things in £ because ultimately they will need to account for it in £.
Click to expand...
But the pound is not some eternal state of nature. It was created and has had a volatile history. The first few decades of the bank of England and paper money were not a certain thing.
 
kabbes said:
Can you please provide the regulations that allow for this? I’m not inclined to take a generic statement about that.
Click to expand...
You want me to quote Swiss tax law?!

Just searched and it's the canton of Zug that allows tax payments in bitcoin.
 
Idaho said:
Lol - dyor
Click to expand...
Not sure why you're lolling. You brought it up as your example. I have done my own reading which has revealed that Zug is a tiny, massively corrupt place that is used by tax-dodgers from around the world. If it does accept bitcoin under certain circumstances, that doesn't exactly strengthen your case.
 
littlebabyjesus said:
Not sure why you're lolling. You brought it up as your example. I have done my own reading which has revealed that Zug is a tiny, massively corrupt place that is used by tax-dodgers from around the world. If it does accept bitcoin under certain circumstances, that doesn't exactly strengthen your case.
Click to expand...
My case? What? What case?
 
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