The cost of printing fiat money to BTC generation.

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Quote from: The Cryptovator on July 10, 2022, 03:08:36 PM

Fiat & cryptocurrency is a conflict with each other, both have different functions. Fiat resources don't matter since it's centralized and mandatory for lives. But cryptocurrency isn't mandatory for lives and no centralized organization backs it. Fiat needs to print without limits and Bitcoin need to mine with limits. Fiat needs a lot of resources and procedures whereas Bitcoin needs only power to mine it.

There's no doubt that fiat money requires a lot of resources and yearly printmaking and printing of new notes but I don't see a reason why fiat and cryptocurrency are in conflict with each other as you said, isn't this what the Feds believe?
According to what I once read, Bitcoin was created as alternative means for people's liberty and the mentality of the FEDs is that crypto is in conflict with fiat currency and we also make fiat to be obsolete.

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Fiat & cryptocurrency is a conflict with each other, both have different functions. Fiat resources don't matter since it's centralized and mandatory for lives. But cryptocurrency isn't mandatory for lives and no centralized organization backs it. Fiat needs to print without limits and Bitcoin need to mine with limits. Fiat needs a lot of resources and procedures whereas Bitcoin needs only power to mine it.

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Quote from: Lida93 on July 08, 2022, 07:30:44 AM

We all know it takes a lot of resources such as money, time, efforts etc to print new paper notes (Fiat money), and I strongly believe same applies to generating BTC too.
But just to clear the air, between the very two which really takes a lot of resources to generate?

Let's say for example, one Bitcoin equals to $14,000. With the equalization in value of one Bitcoin to $14,000 does it means both could consume same amount of resources since they amount to same value?

we to break your question down, it's obviously known that bitcoin is different from fiat currency in line of generation or generating precisely. Fiat currency it's a currency which is centered as centralized currency and it's officially been print according to a specified country demands via printing. While cryptocurrency and especially bitcoin, it's a decentralized currency which is been generated through mining with a powerful gadgets that consume electricity. I think you misunderstood the aspect of generating Bitcoin and fiat currency. With people insight, hopefully you will pick a cogent points.

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Quote from: BlackHatCoiner on July 10, 2022, 03:18:29 AM

Philippines don't run a federal reserve system, though.

We don't have a federal reserve but we have a Central Bank. If I remember correctly how it works, we get the value of our currency based of the capacity of our country to produce goods and services. . . and that's all I can remember. xD
May have to do a bit of a research on Economics 101.

Quote from: BlackHatCoiner on July 10, 2022, 03:18:29 AM

I suggest you to read: https://bitcointalksearch.org/topic/please-delete-5394325

I did, well not the whole thread because some of the topics and arguments they present is not for my current level.

Quote from: BlackHatCoiner on April 12, 2022, 03:10:56 PM

....
.... Most people have got a false idea of what's Bitcoin, because the media have misinformed them so. They can't understand the benefits they can gain if they do this collectively. Most don't even know how money works.

I definitely need a refresher on Economics.

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Quote from: jamyr on July 10, 2022, 03:02:30 AM

That may be the reason why the buying power of fiat, say PHP(Philippine Peso) as my local currency.

Philippines don't run a federal reserve system, though.

Quote from: jamyr on July 10, 2022, 03:02:30 AM

But it also creates job opportunities etc.,

And in the past, there were human computers who worked at NASA and other organizations, and were responsible for making difficult calculations, until something more efficient, cheap and effective was invented. Which reminds me of something. Roll Eyes

Quote from: jamyr on July 10, 2022, 03:02:30 AM

Do you have like a reference to see how much good it does compared to how much damage it makes?

I suggest you to read: https://bitcointalksearch.org/topic/please-delete-5394325

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They era of paper money is gradually fading away but comparing the cost of production of paper printing and Bitcoin mining, the cost of mining bitcoin is more expensive since it's computational power and power consumption is more because each peer in the network share information using a decentralized protocol this also poses carbon emission on the environment.

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Quote from: BlackHatCoiner on July 10, 2022, 02:55:25 AM

Quote from: pooya87 on July 10, 2022, 12:22:36 AM

For example during the early days of COVID pandemic FED printed trillions of dollars.

Not only did they print trillions, but as of March 2020, they reduced their reserve requirement to zero, which means they can potentially inflate the system to infinity, if there's enough demand for new loans: https://www.federalreserve.gov/monetarypolicy/reservereq.htm

That may be the reason why the buying power of fiat, say PHP(Philippine Peso) as my local currency. Yes there were financial assistance given during the Pandemic, although the amount of goods that can be bought is less compared to pre-pandemic.

Quote from: BlackHatCoiner on July 10, 2022, 02:55:25 AM

The damage of printing paper notes is no near the damage of the entire financial sector, which includes buildings, cars, credit/debit cards, labor, ATMs, extravagant amounts of energy etc.

But it also creates job opportunities etc.,

Do you have like a reference to see how much good it does compared to how much damage it makes?

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Quote from: pooya87 on July 10, 2022, 12:22:36 AM

For example during the early days of COVID pandemic FED printed trillions of dollars.

Not only did they print trillions, but as of March 2020, they reduced their reserve requirement to zero, which means they can potentially inflate the system to infinity, if there's enough demand for new loans: https://www.federalreserve.gov/monetarypolicy/reservereq.htm

Quote from: jamyr on July 10, 2022, 01:40:44 AM

The greater cost is its effect to the environment. I believe all high-quality paper is made from wood pulp. Wood is made out of trees. Trees are essential to the environment.

The damage of printing paper notes is no near the damage of the entire financial sector, which includes buildings, cars, credit/debit cards, labor, ATMs, extravagant amounts of energy etc.

jamyr

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Quote from: Lida93 on July 08, 2022, 07:30:44 AM

We all know it takes a lot of resources such as money, time, efforts etc to print new paper notes (Fiat money), and I strongly believe same applies to generating BTC too.
But just to clear the air, between the very two which really takes a lot of resources to generate?

Let's say for example, one Bitcoin equals to $14,000. With the equalization in value of one Bitcoin to $14,000 does it means both could consume same amount of resources since they amount to same value?

The greater cost is its effect to the environment. I believe all high-quality paper is made from wood pulp. Wood is made out of trees. Trees are essential to the environment.

Lets plant more trees than we cut!
https://teamtrees.org/

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Quote from: suzanne5223 on July 09, 2022, 06:54:17 AM

Quote from: pooya87 on July 08, 2022, 10:07:23 PM

Nobody actually "prints" money these days, everything is digital. They just type in a bunch of stuff in the computer and they invent trillions out of thin air. That is how the fiat system works. There isn't enough paper in the world to print all the money in it!

Its understandable that the Federal Reserve board always demands for new fiat currency every year but you said something that I dont want to agree with which is "Nobody actually "prints" money these days, everything is digital."
Yes, things are going digital but the FEDs still print money. According to the US FEDs site, they budgetted $1,060M for 2022 currency operation and the order is placed with the Department Bureau of Engraving and printing.

You are right, they are still printing physical money (cash) and I should have been more clear. But the biggest part of the money they "print" is actually digital which was my point. For example during the early days of COVID pandemic FED printed trillions of dollars. There is simply no way to physically print that much cash.
There is also not even serial number on the notes to cover all that money. I believe it is less than 11 digits for US dollars which would be 99,999,999,999 or 99 billion assuming the fixed letters are digits too!

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Quote from: Lida93 on July 08, 2022, 07:30:44 AM

We all know it takes a lot of resources such as money, time, efforts etc to print new paper notes (Fiat money), and I strongly believe same applies to generating BTC too.

Sorry to say the fact there's nothing like generating btc, all its process is called mining whereby new coins are generated and given as miners reward for solving complex mathematical equations, you can as well read further about bitcoin mining for more informations.

Quote from: Lida93 on July 08, 2022, 07:30:44 AM

But just to clear the air, between the very two which really takes a lot of resources to generate?

We can't give a concluding answer to that since the two were completely different and their means as well, when you compare their difference then you could derive a concluding answer to weather a centralized currency is les cost effective than a decentralized one or not[/quote]

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Quote from: pooya87 on July 08, 2022, 10:07:23 PM

Nobody actually "prints" money these days, everything is digital. They just type in a bunch of stuff in the computer and they invent trillions out of thin air. That is how the fiat system works. There isn't enough paper in the world to print all the money in it!

Its understandable that the Federal Reserve board always demands for new fiat currency every year but you said something that I dont want to agree with which is "Nobody actually "prints" money these days, everything is digital."
Yes, things are going digital but the FEDs still print money. According to the US FEDs site, they budgetted $1,060M for 2022 currency operation and the order is placed with the Department Bureau of Engraving and printing.

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Quote from: cabron on July 09, 2022, 01:13:38 AM

Printing fiat money will not cost but just the paper and the ink. If you mean the result of printing a.k.a "THE COST OF PRINTING USD" then its the inflation that American citizen are experiencing, that's the cost. Its like there is a reaction in every action.

Generating is not the same due to its halving. Every 10 minutes the miners will get some about 6BTC but the next halving will be half of it. Less supply over time which is also the reason BTC price goes up.

this is all true we cannot compare between printing money with mining bitcoin

and the cost of printing money according https://www.federalreserve.gov/faqs/currency_12771.htm

Denomination   Printing Costs
$1 and $2   7.5 cents per note
$5     12.7 cents per note
$10     12.4 cents per note
$20     13.8 cents per note

and can be paid after print is done Cheesy

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Quote from: Lida93 on July 08, 2022, 07:30:44 AM

which really takes a lot of resources to generate?

Bitcoin miners compete with each other, which means the total cost (electricity + hardware) of mining approaches the total profit (value of the Bitcoin mined). The more Bitcoin is worth, the more miners will spend searching for blocks.
Paper money is just fancy papier. Printing a $100 bill costs about the same as a $5 bill.

Quote from: pooya87 on July 08, 2022, 10:07:23 PM

But when it comes to bitcoin, although the cost of mining a new coin doesn't determine bitcoin value but it is directly related to it. Meaning if price is $1 the cost of mining is close to $1 and if it is $10 million the cost of mining is close to $10 million.

Exactly. Somehow not many people seem to realize this.

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Printing fiat money will not cost but just the paper and the ink. If you mean the result of printing a.k.a "THE COST OF PRINTING USD" then its the inflation that American citizen are experiencing, that's the cost. Its like there is a reaction in every action.

Generating is not the same due to its halving. Every 10 minutes the miners will get some about 6BTC but the next halving will be half of it. Less supply over time which is also the reason BTC price goes up.

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Quote from: Lida93 on July 08, 2022, 07:30:44 AM

Let's say for example, one Bitcoin equals to $14,000. With the equalization in value of one Bitcoin to $14,000 does it means both could consume same amount of resources since they amount to same value?

Like Bitmover said, Bitcoin can not be printed but mined, but I believe you see mining as printing since the mining also require time and money to do.
I can not say which consumes time or money more to print or mine since i am not a bitcoin miner neither am I working in a central bank that prints fiat money, but what I do know is that, $14,000 usd worth of fiat money and $14,000 worth of Bitcoin are not the same, since fiat loses value continually due to inflation, and bitcoin on the other hand is a hedge against inflation, I believe it's better to spend that time and resources to mine bitcoin rather than printing fiat money.

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Quote from: pooya87 on July 08, 2022, 10:07:23 PM

Nobody actually "prints" money these days, everything is digital. They just type in a bunch of stuff in the computer and they invent trillions out of thin air. That is how the fiat system works. There isn't enough paper in the world to print all the money in it!

Apparently as per HBR[1], 97% of USD is already digital; and this was in 2021. I'd imagine that today in 2022 the number would be close to 98-99% already.

[1] https://hbr.org/2021/10/what-if-central-banks-issued-digital-currency

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Nobody actually "prints" money these days, everything is digital. They just type in a bunch of stuff in the computer and they invent trillions out of thin air. That is how the fiat system works. There isn't enough paper in the world to print all the money in it!

Keep in mind that you can not compare the two together. Cost of printing fiat does not determine its value, in fact the definition of a bank note is that its value is so much higher than the cost.
But when it comes to bitcoin, although the cost of mining a new coin doesn't determine bitcoin value but it is directly related to it. Meaning if price is $1 the cost of mining is close to $1 and if it is $10 million the cost of mining is close to $10 million.

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It's not enough to just look at the costs, you should also look at the utility they provide to society. Bitcoin currently has less than 300,000 transactions per day, and many of them are just moving coins in/out/between exchanges. While paper money + digital payment systems are the foundation of all human economy. Even with hypothetical max capacity of Bitcoin + LN Bitcoin is still less efficient than fiat and can satisfy the whole global economy.

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Quote from: Lida93 on July 08, 2022, 07:30:44 AM

Let's say for example, one Bitcoin equals to $14,000.

I would like to correct one small detail. Let's say for example that one Bitcoin is equivalent to $21,000, just for ease of calculation.
The rest of your post is in vain, because there is nothing to compare.

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The cost of printing fiat money uses less resources than bitcoin mining (unless it's $14000 in 1 cent coins, then crypto mining uses less resources).

That money spent on mining the coin though is securing the chain and does well to ensure no counterfeit bitcoin can be introduced - I'd imagine the same system added to paper money would be a lot more expensive.

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The cost of printing fiat money can be whatever the central bank wants. For example, if the central bank decides to print a $10,000 dollar bill, the cost of printing $1 lowers. If the mint decides the value of the banknotes, they decide the cost of printing a unit of it as well.

The cost of producing a bitcoin can be measured in hashes per second. The more the mining, the higher the difficulty, which means the higher the cost.

Quote from: Lida93 on July 08, 2022, 07:30:44 AM

With the equalization in value of one Bitcoin to $14,000 does it means both could consume same amount of resources since they amount to same value?

No. A car that costs $14,000 doesn't consume the same amount of resources as $14,000 in cash.

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Bitcoin has a max supply of 21 million. What's the max supply of Fiat? Lol.
Imagine being so bad at common sense that you can't even find something good to compare with Fiat.

Bitcoin is not generated from thin air, it's generated from blocks that miners mine as a reward.
Every Halving, that reward is getting less and less. Not increasing like your fiat which causes inflation.

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Quote from: Lida93 on July 08, 2022, 07:30:44 AM

We all know it takes a lot of resources such as money, time, efforts etc to print new paper notes (Fiat money), and I strongly believe same applies to generating BTC too.
But just to clear the air, between the very two which really takes a lot of resources to generate?

Let's say for example, one Bitcoin equals to $14,000. With the equalization in value of one Bitcoin to $14,000 does it means both could consume same amount of resources since they amount to same value?

You cannot compare. It's apples and oranges.

The price to mine one Bitcoin depends on various factors, but most important is the mining difficulty and that's something variable and not easy to understand. Even more, the price of bitcoin on the markets is not the mining price (nor the mining price + a known %). Halving, the increase of miners, the better and better hardware make difficulty and "mining price" be more and more expensive.

Now fiat. I don't know the official numbers and I'd guess that neither you do. Fiat money is printed multiple times. Old and partly destroyed money is replaced too. And destroying old money and re-printing is costly too, not only the printing of new banknotes.
Then, nowadays we use banks and cards. Since mining pretty much keeps almost the entire ecosystem running, it would be fair to somehow add all the fiat-relate part too. So: all the banks and their servers, then at very least VISA and Mastercard have to be added to the equation. Maybe even all the ATMs and PoS systems in shops (we can do the same for Bitcoin, but it won't change much). And it makes the numbers become significant, however, unknown.

So there are 2 numbers we don't know (maybe the numbers for Bitcoin can be guestimated). I let you compare them.

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Quote from: Lida93 on July 08, 2022, 07:30:44 AM

We all know it takes a lot of resources such as money, time, efforts etc to print new paper notes (Fiat money), and I strongly believe same applies to generating BTC too.
But just to clear the air, between the very two which really takes a lot of resources to generate?

Let's say for example, one Bitcoin equals to $14,000. With the equalization in value of one Bitcoin to $14,000 does it means both could consume same amount of resources since they amount to same value?

Bitcoin cannot be just printed, it has to be mined.

To cost to mine one bitcoin varies according to the cost of electricity. THe average cost to mine one bitcoin is around 30,000 USD, which is more than the currenct price now , according to Cointelegraph:
https://cointelegraph.com/news/30k-btc-price-has-severe-impact-on-bitcoin-miner-profits-analysis

Quote

“If depreciation and amortization charges are included then the cost basis for mining Bitcoin is at around $30K, basically at the same level as current bitcoin price.”

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We all know it takes a lot of resources such as money, time, efforts etc to print new paper notes (Fiat money), and I strongly believe same applies to generating BTC too.
But just to clear the air, between the very two which really takes a lot of resources to generate?

Let's say for example, one Bitcoin equals to $14,000. With the equalization in value of one Bitcoin to $14,000 does it means both could consume same amount of resources since they amount to same value?

Topic: The cost of printing fiat money to BTC generation. (Read 290 times)