Topic: Anyone want to help me tear this to shreds? - page 2. (Read 2534 times)
Electricity price? Why would I care?
Quote from: cattimiptwax
Even if every society adopted a cryptocurrency with a mining system like bitcoin, watt-hours would essentially become a de-facto world 'currency'.
They start with a wild assertion and build from there. If you want to get at the root of their misunderstanding, ask them to defend this point.
Perhaps they are focusing on the first use of a bitcoin (as it is spent by the miner) but are ignoring later uses of the same bitcoin which require negligible energy.
Quote from: cattimiptwax
How would that even work? Watt-hours would always have to be more expensive than the amount of cryptocurrency that they could produce, otherwise a power company would be better off simply 'printing' money.
You might also ask them how their energy company paradox compares to oil companies which, bizarrely enough, sell their oil to gold mining companies rather than mining the gold themselves. How could a profitable gold mining company possibly acquire enough gold to fully compensate the oil providers?
Quote from: cattimiptwax
The more I think about this, the worse it gets. Rapidly mining currency would deflate the currency.
They've clearly made a number of false assumption about what Bitcoin is and how it works. At least this one is simple enough to dispel.
All you need is one of these:
Bicycle Powered! Free Energy!
Bicycle Powered! Free Energy!
I did some kind of roughly estimation before, with 1/10 of world's power supply to mine coins, one bitcoin will worth a bit more than one million dollars
But as D&T mentioned, the daily coin supply is getting halved every 4 years, after the coin supply approach zero, it will be only transaction fees that require power consumption. With 1MB block size, 6 coin transaction fee per block is possible
https://bitcointalksearch.org/topic/m.3048862
But as D&T mentioned, the daily coin supply is getting halved every 4 years, after the coin supply approach zero, it will be only transaction fees that require power consumption. With 1MB block size, 6 coin transaction fee per block is possible
https://bitcointalksearch.org/topic/m.3048862
How does the cattimiptwax propose that everyone transmits watt hours as payment to a web merchant? People maybe interceptses the energy and stealses it! Are we all to walk around with the latest in high-density battery technology, transferring watts for payment? It's almost as if there needs to be some kind of middleman abstraction to act as a more controlled and precisely defined form of value storage..... can't think what could possibly fit the bill though, this new insight has totally thrown me 
www.kilowattcards.com/ex.cfm
Just gonna leave this here. Imagine a forex between BTC and electricity vouchers. No one factor determines price, however, miners will only sell what they mined in exchange for enough to pay for their electricity plus X, where X is determined by whatever. I personally cannot believe these folks don't accept bitcoin yet.
Just gonna leave this here. Imagine a forex between BTC and electricity vouchers. No one factor determines price, however, miners will only sell what they mined in exchange for enough to pay for their electricity plus X, where X is determined by whatever. I personally cannot believe these folks don't accept bitcoin yet.
On a long-term logarithmic chart the bitcoin value increases roughly with difficulty. However, I think the writer quoted in the OP is wrong because the ultimate mining ASICs will use reversible gate computing technology which means that electricity consumption falls to negligible levels.
The network hashrate has quadrupled in the last month. The price of Bitcoin has remained relatively stable.
Therefore, it is proven that the Bitcoin price does not necessarily follow the hashrate, and thus the basic premise of the OP's article is wrong.
Therefore, it is proven that the Bitcoin price does not necessarily follow the hashrate, and thus the basic premise of the OP's article is wrong.
Quote from: cattimiptwax
Even if every society adopted a cryptocurrency with a mining system like bitcoin, watt-hours would essentially become a de-facto world 'currency'. How would that even work? Watt-hours would always have to be more expensive than the amount of cryptocurrency that they could produce, otherwise a power company would be better off simply 'printing' money.
edit: The more I think about this, the worse it gets. Rapidly mining currency would deflate the currency. For one, this means that the base cost of electricity will constantly be increasing. For two, as the mining gets more difficult, you need to use more electricity to mine. The cost would have to fight both the increase from mining and deflation at once. This would be a nightmare - especially for the poor.
With some more explanations:
Quote from: cattimiptwax
If everyone were using cryptocurrency, they would all be tied to how much electricity it uses to generate the currency. The value of the currency would then be directly tied to watt-hours.
The cost of electricity would be in bitcoins. The cost of electricity would always have to be more than a bitcoin is worth, or power companies would have no reason to sell the power.
The cost of electricity would be in bitcoins. The cost of electricity would always have to be more than a bitcoin is worth, or power companies would have no reason to sell the power.
It sounds like he's arguing from the "Mining determines price" point, which is wrong, since we know mining follows price, and price is just a function of supply/demand on the free market. But either I can't wrap my head around it, or I can't explain this to him correctly. Please help?
He's right that it would be more advantageous for the power company to 'print' money up to a certain point.
But he doesn't seem to understand that there's a limit of roughly 150 BTC that can be 'printed' each hour (that will halve to roughly 75 BTC in a couple years). The more people using watt-hours to get at that pool of 150 BTC, the fewer BTC you get per watt-hour. (If the number of BTC mined scaled linearly with the number of watt-hours expended, he would be completely correct, by the way.)
If it's cheaper for the power company to mine BTC than buy them, OK, they do that until the difficulty makes it no more advantageous to mine BTC than sell electricity and buy BTC with the proceeds.
Then what? Then nothing. Equilibrium is reached and everyone is happy.
If the cost of BTC was truly determined by the cost of the watt-hours producing them, then BTC is currently magically overpriced.
Quote from: cattimiptwax
The more I think about this, the worse it gets.
i can think of at least one solution to that problem
Quote from: cattimiptwax
Even if every society adopted a cryptocurrency with a mining system like bitcoin, watt-hours would essentially become a de-facto world 'currency'. How would that even work? Watt-hours would always have to be more expensive than the amount of cryptocurrency that they could produce, otherwise a power company would be better off simply 'printing' money.
edit: The more I think about this, the worse it gets. Rapidly mining currency would deflate the currency. For one, this means that the base cost of electricity will constantly be increasing. For two, as the mining gets more difficult, you need to use more electricity to mine. The cost would have to fight both the increase from mining and deflation at once. This would be a nightmare - especially for the poor.
With some more explanations:
Quote from: cattimiptwax
If everyone were using cryptocurrency, they would all be tied to how much electricity it uses to generate the currency. The value of the currency would then be directly tied to watt-hours.
The cost of electricity would be in bitcoins. The cost of electricity would always have to be more than a bitcoin is worth, or power companies would have no reason to sell the power.
The cost of electricity would be in bitcoins. The cost of electricity would always have to be more than a bitcoin is worth, or power companies would have no reason to sell the power.
It sounds like he's arguing from the "Mining determines price" point, which is wrong, since we know mining follows price, and price is just a function of supply/demand on the free market. But either I can't wrap my head around it, or I can't explain this to him correctly. Please help?
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