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some rebuttal to bitcoin concerns....

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Avatar for ewyr
Written by   194
6 months ago

1. it uses so much electricity, so is bad for the environment

The climate solution is to move to electricity from fossil fuels. Climate action is about electrifying industry, from cars to trucks to trains to kitchens, and move away from coal, oil and gas. So bitcoin is the solution, not the problem, it is already based on electricity.... so the opposite it true.

The climate issue is not about using electricity, it is how to produce clean electricity, and fission and fusion will provide unlimited electricity with no pollution going forward. We must urgently replace all banks with bitcoin the save the environment, as we can remove all the much higher pollution and waste of the banking sector in every city in the world - full of useless buildings, and millions of people commuting in cars, planes, trains back and forth to bank and financial institutions for no reason. The thousands of huge banks buildings across the world can be converted to apartments, and all the transport for commuting replaced, from recycling and removing cars, trains, plains... to replacing roads with gardens and bicycle paths.

2. it has no value and fake (warren buffet and charlie munger arguments)

Buffet and Munger are famous for rejecting investing in tech stocks for 30 years for the same reasons...they don't understand it, so they don't invest in it. They are traditional investors who look at past performance (profits) to determine future performance...hence they laughed at Amazon producing no profits for 30 years. They are both over 80 and never used email, let alone smart phones, they don't even use or know computers. They obviously have never read the code.

Through the last 30 years Berkshire invested in US railroads while laughing at Microsoft, Amazon, Apple, Sun, Google, Facebook. But...these companies produced the largest gains in history in the shortest time over this period, becoming the largest companies in the world during that period. Berkshire completely missed out on all the gains of the past 30 years...simply due to ignorance. The same is true again for crypto. They are a little senile...Warren said he wouldn't pay $25 for all the bitcoin in the world...even though he could flip it for a trillion dollars.

Of course Buffet could not buy all bitcoin, or even a small percentage, even if he wanted too. Because unlike stocks, there is no board members to decide and override share sales, not possible for their usual tactics of hostile takeovers, no central exchange, no board share dilutions are possible, nor forced sales (like Twitter to Musk, or how Buffet can take over companies). There are only a few percent that are even purchasable (up for sale), the rest are not for sale. He could start purchasing a few, and the price would skyrocket. The price of bitcoin is just the tiny percentage of the small percentage for sale that are trading, the vast majority on exchanges are sitting well beyond the current price, as you see in order books. bitcoin is nothing like a company stock.

It is also easy to see bitcoin has value in the market. Not only does it have a clearly open and defined value on exchanges worldwide for all currencies, where you can buy and sell no problem, a large number of billion dollar companies are in the ecosystem. From Bitmain that makes ASIC mining chips (privately worth billions), to public companies like Coinbase with 8 billion in yearly revenue and nearly 4000 employees, to AMD, IBM and NVidia producing mining chips, to a huge number of other companies, data centers, and exchanges.

Bitcoin has value (obviously) because it is a network (non-human) controlled money supply backed by the energy required to produce it (as opposed to completely fictitious fiat money that is just secret keyboard entries into a secret database). It's value is directly derived from energy, and the price of energy. Generally the price of bitcoin follows the cost to produce (mine) it....which is the mining cost of equipment plus the electricity cost. The very first price of bitcoin, 1 or 2 cents per bitcoin, was directly decided based on the electricity needed to produce them at the time. Since there was no demand or market, and just a few nodes mining, it only took a few cents of electricity per block of 50 bitcoins (i.e. one standard computer running for 10 minutes producing 50 bitcoin). Obviously now it takes thousands of custom chips using a power station level of power to find a block with only 6.25 bitcoin!

The hash rate of the network, roughly proportional to electricity usage, roughly proportional to the cost of producing a block, is roughly correlated to bitcoin price (though many other factors, including such as block reward halving is involved). It makes sense, since if price goes up, more people will mine, and existing miners will expand. If price drops, miners lose profit, and drop off the network when electricity cost exceeds the return on investment (the the price of bitcoin). So mining power (hash rate) goes up and down with based on profit, which correlates to the market price. A truly a free market with no regulation - all self regulated perfectly from computer code. There is a cost to produce bitcoin, one of factors that gives it value.

On top of that, bitcoin is a complete payment gateway and system that is completely secure, replacing SWIFT, Paypal and all others. i.e. it has better properties for money and payments than gold and fiat money...which both have value. While fiat currencies collapse around the world, inflation surges all around the world including USD which affects other countries, bitcoin is stable in comparison, the crypto networks never had an issue, never change, and remain stable. Worldwide payments work non stop securely with no exchange rate fluctuation or middle persons. People in crypto can completely ignore all the worldwide currency problems, fluctuations, the currency wars going on, and exchange rate problems.

Warran Buffet struggled with understanding the 'value' of technology. It is best thought is negative value...i.e. the value proposition, or the value it can 'save'. So a new technology can replace the work of 2 people in a company earning 50k/year across 1000 companies, the technology can be valued at 100 million dollars. You can see this all across silicon valley companies with valuations in 100 million range with no profits. Bitcoin can replace billions in bank fees, escrow services, remittance fees, payment fees, and the millions of people working in these industries and banks, so it is easy to see bitcoin valued in the trillions. Early people like Roger Ver saw this when the whole bitcoin stock was valued at a few thousand dollars ~2010. Now bitcoin cap is around 1 trillion dollars, Roger Ver is a multi-millionaire (maybe billionaire). From 2009 to 2019, Berkshire A-Class stock rose 3 times (300%)....not bad for an oldie.....bitcoin rose 10,000 times (1,000,000% - 1 million percent) precisely because the value it will bring.

3. proof of work is bad for the environment

Proof of work is the necessary cost to run the network. This provides the security of the network by requiring independent work (completely peer to peer) that needs to be 'spent' to 'find' a block, and hence this creates the block time duration. Proof of work is the very definition of the consensus and security protocol, because it is this 'work', automatically re-calibrated constantly to take 10 minutes, which provides the 10 minutes block timing, and hence the ability for the chain to recover from mining attacks (forks) assuming that 'most' nodes (51%) are honest on average most of the time. You can't have this consenses and security without proof of work...hence why bitcoin never existed until proof of work consensus was invented by Satoshi.

It is also this consensus protocol that allows completely independent nodes to come and go and participate at any time as equals (purely peer to peer). i.e. a node can join from Africa in 2022 and can mine exactly the same amount of coins as a node run by Satoshi running since 2009. Proof of stake is different, it does not allow anyone at any time to join the network and be a completely equal participant for sharing in the new distributed of newly minted coins.

This is the design of bitcoin, and the electricity use is required and good. The use of electricity is an honest and good use, and electricity is the best energy source to back the network on. Electricity will move to be clean and abundant over time thanks to fission, fusion, solar, hydro and wind... and crypto will help phase out all oil, gas, coal as it only requires electricity and a network, no humans, cars, offices, etc.

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Avatar for ewyr
Written by   194
6 months ago
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Comments

When we look at the first section, you have written about climate change, and I believe I and everyone else agree with you. What are the thousands of banks around the world good for if we can use bitcoin in a more convenient and alternative way than those banks? We can avoid going back and forth to specific banks just to invest or deposit our money, and there is also the concern that only 1 or 2 percent is earned when you hold your money there for a year. It's a waste of time, and you can't get the best and most feature that gives.

$ 2.00
6 months ago

yes, banks are private, for profit corporations that are predatory, and of course fiat money is printed, sent to banks, then loaned out to people....it is all designed to slowly take wealth from the population. you can see plainly the median real wealth reduce from 1971 onwards. Yes of course interest rates the bank gives are always well below the inflation of new money, and well below the rate they get from loaning your money out... banks need to make billions in profits for their shareholders. Bitcoin can be thought of as a non-profit gift from satoshi, with no patents, no shareholders, and runs perfectly 24/7 without any humans needed.

$ 0.00
6 months ago

Thank you for your generosity in upvoting my comment to you, since I was only expressing my thoughts on your topic as best I could. I agree with you because those banks take our money that we deposit with them and utilize it to make loans to those in need at a high interest rate while only compensating us a small amount. They are just the ones who gain from the money of others.

$ 0.00
6 months ago

Everything in this world has a bad side in my opinion. Almost everything that we do has an effect to the environment. It is just that we should not abuse it.

$ 0.00
6 months ago

This is really helpful and you will really open the eyes of many that didn't know how will crypto will worked for the future

$ 0.00
6 months ago

My friend, you said interesting and new information in this article about Bitcoin that I didn't know. It is great that Bitcoin could eliminate the banking system, the banks, and consequently all the facilities, useless buildings, and the pollution from the banking system, and instead create gardens and apartments, and instead of transport system roads with bike paths. Being able to bring clean air is something that is most needed these days. To be able to eliminate oil, gas, coal and fossil fuels, and use less harmful electricity and network instead, without humans, cars and offices. Perhaps such Bitcoin-based projects could save the declining world in the future.

$ 0.00
6 months ago

Crypto can really make environment free from climate change and global warming.

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6 months ago

wow I can't believe crypto conquered it all.. I'm speechless by this new information for me..

$ 0.00
6 months ago

I mean, the advantages overlaps all the disadvantages clearly!!!!

$ 0.00
6 months ago

Crypto is so powerful yet not all are in adoption to it, but what you write is good of all the nations on the earth use crypto rather than the local fiat, less pollutions like paper, noise and other more

$ 0.00
6 months ago

We need to protect the earth, it has been reported that the earth is only 3 to 5 years and will be completely destroyed

$ 0.00
6 months ago

Diamond mission with the concept of understanding the logic of good support for the development and change of environmental governance, now is the right time to make changes to avoid pollution that continues to threaten human life, electricity supply as a developer and bitcoin's role to reduce thick smoke from hydrogen gas and combustion coal. I agree this friend is very useful if this mission is done.

$ 0.00
6 months ago

How sad that our mother earth really struggling because of the people who really wants to gain more wealth rather to save our own environment.

Lots of things been affected because of the war also of Russia/Ukraine that even the value of our very own crypto also affected. Oil price also always increasing.

$ 0.00
6 months ago

Nice write up ,we human need to protect our earth .Anyways,thank you so much for tip ,stay safe and God bless you always 🥰

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6 months ago

Producing a good, cleaned and quality electricity prevent our ozone layer on deterioration. It's not the issues about climate change it's how can humanity makes a disciplinary actions, great content dear thanks for sharing 💗 😊

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6 months ago