2. Announced they were going to accept Bitcoin, sending the price up.
3. Sold a bunch of Bitcoin to pad out otherwise poor earnings, citing their goal of "testing liquidity of the market."
4. Announced they were going to stop accepting Bitcoin, sending the price plummeting.
As though he didn't know the environmental impact a week ago? As though he didn't check for liquidity before investing one and a half billion dollars of company money.
When Tesla announced the initial move they received a huge amount of push back for the environmental concerns. And it didn’t look good for an EV company of all things.
There is a trend I’ve seen of a company making a decison, everyone hating on them for it, then they reverse the decision, and they are still criticised.
If a company turns around and reverses a decision citing the very reasons they were criticised for making it, shouldn’t we applaud them for listening?
I mean, isn’t this exactly the behaviour we want to encourage?
>I mean, isn’t this exactly the behaviour we want to encourage?
I want to encourage 'corporate flexibility and social accountability'.
I do not want to encourage market-whale-individuals to attempt one-person pump-and-dumps on small(ish) global markets and further market opportunism & manipulation.
Personally I believe that the decision has little to do with environmental impact; I think that the btc opportunity is beginning to dwindle in various ways, so the focus shifts to other *coin markets where they can profit similarly using the same or similar tactics.
BTC specifically is made out to be the boogeyman so that the excuse doesn't disallow similar behavior with other coins in the future. I fully expect similar reasoning with DogeCoin when that opportunity dries up and they move to greener pastures for the third time -- inevitably when profit margins are greater elsewhere.
BTC maximalists argue that it’s a better store of value than gold due to portability, divisibility, durability, and scarcity. The theory is that it will be used to settle inter-bank transactions once it is widely adopted by institutions.
>The theory is that it will be used to settle inter-bank transactions once it is widely adopted by institutions.
Banks have absolutely not need of a proof of work scheme like Bitcoin, them switching to a system with the power requirements of BTC seems highly unlikely.
I use crypto (and mainly Bitcoin) to pay for three years every month now. Average fee over those years is more like $1. In comparison with $20 transaction fees my bank asks when I transact for example from EU to SouthAm, zero hassle and no paperwork when sending to countries with trade embargo, I must say, Bitcoin is golden.
How much are the fees for converting to Bitcoin, the recipient converting from Bitcoin, and the transaction costs? TransferWise is quoting me an effective all-in price[0] of £1.98 to send someone in Brazil £100 of my hard-earned Sterling. I’m struggling to believe you’re getting Bitcoin in or out of fiat for less than 2-5% a go, and transaction cost is ~$15, so ballpark this is costing $25?
0: £100 -> 729.83, where Google says it “should” be 744.61;
So it depends. For example in Argentina, they AFAIK have two conversion rates. When you use a normal bank account, you have to use government conversion rate that's 50% of black market rate between Argentinian pesos and USDs. With Bitcoin, you could try black market straight away and even if you pay 2-5%, you might end up better.
For transaction rate, Trezor says at 22sat/B., you will have your transaction confirmed in 4 hours 10 minutes for $1.85.
Even if BTC price was stable, I would still use it. But my experience is that having some BTC is usually better than just having cash.
I use Western Union and for the last 2 years it's said there's 0 transfer fee's. It's basically the same exchange rate as the bank so i don't think they skim off the top and if they do it would end up being like 50 cents in difference to the bank. ( i have no idea how WU makes money)
As of today, we know about 3.87% of the 56 billion outstanding Tethers that help define that market cap are backed by cash. During the big dump to 46K a day ago, Coinbase' bid-ask spread went to $1000-2500 depending on when you looked. That's a serious lack of liquidity. While a "trillion" is not small, its a completely illusory number.
> I do not want to encourage market-whale-individuals to attempt one-person pump-and-dumps on small(ish) global markets and further market opportunism & manipulation.
Eh, no innocent by-standers get hurt when someone 'dumps-and-pumps' bitcoin.
And if you want to teach people a lesson, the higher the profile of the 'pumper-and-dumper', the better.
No, because this makes it seem like they are not making the right decisions because they are right, but only because doing the wrong thing made them unpopular. It makes you wonder what other wrong things they do that doesn't elicit enough of a popular response to make them reconsider.
It's not like the environmental impact of Bitcoin was a subtle or obscure issue when they first made the decision. They should have known better, and it remains worrying that they did not.
Is it bad to not want to do something only because public opinion says not to?
I think if you think it is bad, then that implies a certain world view about absolute good and evil. The implication is that this is an evil thing, and only an evil person would want to do it, and so if the only reason they won’t do it is because of public opinion then that doesn’t change their inherent evilness.
But the other possibility is that the person making the decision believes it’s a good thing, or at worst a neutral thing, but are not willing to pay the cost once they find out how badly everyone reacted to it.
Maybe Musk thinks decentralised money is more important than the setback to climate change? Maybe musk thinks that crypto will become green over time and it won’t matter? Or maybe he just wanted to do a pump and dump. There are all sorts of things musk can think, who knows.
In terms of the discussion about it being a neutral thing, some points:
1. Elon Musk is afraid of AI for the reasons of the paperclip apocalypse problem. You would make something and it would consume all of the resource due to it understanding its need to self replicate and not the fact that its use of resources meant a lack of resources for everyone else and potentially the destruction of the society consuming the paperclips.
2. Elon Musk makes the worlds most famous line of environmentally friendly cars. It is believed he does this, or at least he attempts to sell them on the basis of, being environmentally friendly and saving the planet.
3. Elon Musk also then invests hugely in a decentralised currency that, by design, if it becomes popular, will use all available resources at the exclusion of any other ideology, due to it's decentralised design - including saving the climate, etc - so because energy production by and large destroys the climate, it will destroy the climate.
You can say this is a neutral choice, but mostly it just seems like a really dumb or contradictory choice. He (Elon) may well believe decentralised currencies are the future - he has also stated that as soon as a rampant unchecked production mechanism gets free, we are doomed. The apparent inability to connect the two is what I find so striking.
For profit companies don't make decisions because they're right. Right and wrong have no meaning in capitalism. Companies make decisions based on profits.
We might wish it were different, but it very clearly isn't.
The best we can hope for is that public pressure convinces companies that right and profitable overlap.
That is an absolute statement being applied to a relative world.
The idea that a company won't make a right decision ever is patently absurd. The idea that there are good companies and bad companies is likewise absurd.
Of course, a large company has to worry about money because their burn rate is so high, to imply otherwise is naive. It doesn't follow that a cash rich company won't decide to sustainably source materials or pay a fair wage for their employees.
Whether companies should ever be allowed to get that large is a different discussion.
Hold on, when did anyone introduce the idea that a company won't make a right decision ever? That's a pretty dramatic mischaracterization of my comment.
It's so easy to find something 'patently absurd' in a comment if you aren't bound by the actual content of the comment.
Maybe there was something confusing in my choice of words, given the downvotes.
I don't think HN is naive enough to think that large publicly traded companies genuinely make decisions based on moral concepts like right and wrong. If they do the right thing, they do it because they see an advantage in it. That's how they're designed to function.
>I mean, isn’t this exactly the behaviour we want to encourage?
Kind of. If I announce I'm going to start beating my wife and then say "After feedback, I've decided not to do this" then I don't expect to be voted man of the year. And yes, this is an extreme example but for the sort of people who get angry on Twitter the issue they're getting mad at is an extreme one (whatever it is).
I think reversing a bad decision is admirable when it wasn't already obvious at the time of making it that it was bad. If new information comes to light that they couldn't have reasonably known originally then of course, that's fine. But mostly the new information seems to be "We knew this would piss some people off but we thought we could get away with it."
The problem is that you can't really take a company at face value if they reverse course after having already profited from their "lapse in judgement". The parent post lined out potential motivations behind all this that IMO aren't really that outlandish. It's speculation, but it's not some outlandish crackpot theory
Sure, but a basic rule of civility is that you should "assume good faith" and give others the benefit of the doubt when the good faith explanation is plausible.
The way I understand all the responses to my comment, it seems a lot of people have the impression that the assumption of good faith makes someone naive... But that's absolutely not the case.
The assumption of good faith does not require one to "believe" that any given action is the product of good faith. The only thing it requires is that good faith be the starting point from which you evaluate someone else's (or yes, a for-profit corporation's) actions. All one needs to do is begin by first trying to understand how an action could be explained by factors other than bad faith, or could be compatible with good faith.
I think a lot of people feel that the good faith explanation isn't sufficiently plausible in this case, assuming even just the most cursory of research was done before this decision
I think you can and should assume good faith. However, the explanation about the environment seems dubious for reasons people have pointed out here. They didn't know about bitcoin's environmental impact? The people at Tesla didn't think about negative environmental impact being counter to their brand? Giving the benefit of the doubt and assuming good faith does not mean you have to be gullible.
Read enough news and your good faith for publicly traded companies of any kind will be gone quickly. Tesla may be more trendy than EA, but the motivations are always the same.
Assume good faith for a company? It’s called being naive/biased for Tesla/Musk.
Do you assume good faith when it comes to Facebook’s data handling? Or goddamn disgusting nestle doing basically anything? (Btw, can’t we just cancel nestle?)
As long as they profited from the whole thing, I don't think they should be applauded. It's like applauding someone for stealing from the cookie jar for some time and then stopping after an outcry. Sure, it's better than continuing to steal, but I'd only applaud after the cookies have been paid back.
Sure, but none of it makes any sense. I have to imagine the decision to buy Bitcoin and accept it as payment was vetted by a lot of people internally, not just Musk himself. And the environmental impacts from mining are well known. Musk isn’t stupid either - he must’ve known this would be an issue for Tesla’s image.
In my opinion Musk probably thinks/knows he's like Trump. Whatever they do, they have a bunch of hardcore defenders (like the ones who will burn this comment to the ground).
Wake me up when Musk stops selling his carbon offsets. Because for every non-pollution a Tesla car doesn't do, the sold carbon offset means there's another ICE car that's doing it.
"Musk cares for the environment". Hah, that's as bullshit as "Trump cares about the working class".
Carbon credits are doing their exact purpose. It is moving profitability into environmentally friendly sectors and out of polluting sectors. This is in order to make polluting more expensive and environmentally friendly cheaper... I’m not sure why you would think selling carbon credits is evil.
So if I'm allowed to put out 1000kg of CO2, and my neighbour as well for a total of 2000kg of CO2, hey, let me be zero emissions and emit 5kg of CO2. Hooray, it's better for the environment, the CO2 emissions are down 995kg!
Oh wait, I sold my credits to my neighbor, so total CO2 emissions are still 2000kg. Hooray, I'm saving the planet! Worship me! /s
I see why you are confused because that’s not how it works. A manufacturer is required to produce say 20% electric vehicles to reduce carbon emissions. To reach the goal, unless they pay someone who is producing electric vehicles they will be fined. This basically boosts the electric vehicle industry and hurts the gas vehicle industry. If you are in favor of the environment this should be a good thing. Companies are encouraged to go electric, and if you don’t everything is more expensive for the company and the consumer. You don’t need to worship anyone, the point is to encourage a transition to lower carbon and few companies can do it. You don’t need to worship anyone.
It all makes perfect sense if they in fact want to buy more bitcoin at the moment. There has been a whole lot of very, very ugly inflation data released over the last few days.
This would explain why they refrained from selling before making an announcement which they surely knew would (and did: -10%) tank the BTC/USD rate.
the impact from mining was well know, the PR impact was not.
It is hard these days to gauge how bad people will react, if you're lucky something else happens to get people screaming the same week and you can get away with anything.
And they would eventually find https://Nano.org, a totally green, fast and fee-less alternative to Bitcoin. (Which has seen a price jump of 60% since the announcement).
> There is a trend I’ve seen of a company making a decison, everyone hating on them for it, then they reverse the decision, and they are still criticised.
World is a complex place and there are groups who have different opinions on this. Bitcoiners were cheering when Tesla started shilling BTC, now they are booing. Environmentalists are now tipping Tesla but not that much because they still remain sceptical.
> If a company turns around and reverses a decision citing the very reasons they were criticised for making it, shouldn’t we applaud them for listening?
Making a terrible mistake suggests you might have bad judgement. Fixing it doesn't erase that, it just removes the immediate impact of that bad decision. To recover fully they need to take additional action that demonstrates that actually their judgement has improved now.
Not really, since 1) Musk knew environmental impact well before; 2) it took him a lot of time to react, way too much to put it into 'oh now I understand' ; 3) they happily support dogecoin which is basically exactly the same issue
Not much respect for Musk for this one, either he is knowingly manipulating market for whatever amoral reasons or his asperger is getting somehow the worst of him
It's better than staying on a wrong course, but it would be even better if they had thought it through before announcing the plan. It's not as though the environmental impacts of bitcoin were a well kept secret that Tesla couldn't have known about.
>And it didn’t look good for an EV company of all things
Didn't a company filled with really smart people (no, I don't mean it sarcastically) not know that it'll look bad before buying a billion dollars worth bitcoin?
I’m fairly sure a company has the resources to ask a few people from the target audience before making a decision. And frankly, it was so obvious that it’s a bad decision, bitcoin is just hyped by a similar group that thinks of Elon highly for some strange reason, and for him, fame is everything.
They also wrote the customer agreement such that they would refund Bitcoin purchases in either dollars or Bitcoin[1], depending on which was more profitable. This can be used to effectively get free options on a highly volatile asset[2].
No, the alternative was to issue refunds in the currency of transaction. There's no reason they would ever offer customers the choice of refund currency.
That doesn't work. Say you purchase car for 0.5BTC today. Tommorrow BTC goes up. You ask for a refund and immediately buy the same car back for say 0.25BTC. Free discount. Who would not do it?
Core of this is that BTC (atleast right now) is a highly volatile, speculative asset. There is no way direct payments in BTC will make common "market sense" until volatility stabilizes. Until then someone has to take responsibility for bearing that volatility, either the customer or the manufacturer. In this case, it's apt that the customer bears it (as they should, it's their gamble).
> I thought that Bitcoin was particularly bad because block sizes were small, so there's a big incentive to mine and get mining fees.
No. Doesn't make sense.
Miners get rewarded for spending energy in all PoW coins. I don't think details such as block size matters. Dogecoin BTW as well has the 1MB block limit, their block time is just smaller (1 minute). However dogecoin has quite small amount of transactions compared to BTC, it is nowhere near its capacity limits yet.
KW per hashrate doesn't make much sense. At that point you're just comparing the efficiency for the available hardware for hashing function, ASICs that are designed to handle up to calculating SHA256 of up to 1MB of data versus scrypt ASICs.
Since that's the case, your statement of "of the very popular older coins only XRP is more efficient" falls apart as at the very least Litecoin would need to be at the exact same spot.
And if you are talking about per mined blocks, then you are putting the network difficulty into the picture and arguing a lower network difficulty (hence lower network hashrate) as a selling point isn't going to get you anywhere.
> Dogecoin has exactly the same energy spending incentives as Bitcoin.
While the incentives are the same, Dogecoin has roughly 7.4x lower energy requirements than Bitcoin currently, so accepting Dogecoin instead of Bitcoin is a tad less offensive.
This is like arguing we should switch from using cars currently on the road because they use energy, to cars currently standing in a garage, because we measured and clearly the parked cars use less energy than the cars on the road.
It's not even hyperbole, it's precisely equivalent and just as boneheaded as it sounds.
He should look at the one that uses 0.15% of bitcoin's while having a much more even distribution than Dogecoin (which had 20x block reward in its first year).
We don't know the price point of the BTC they bought at the time but it is likely to be somewhere around $30,000 - $40,000 and then they announced it to cause a run up close to $60,000 and then sold some of it for a >$101m profit.
Now they somehow 'stop accepting Bitcoin' causing BTC to go down 12%.
These same institutions are NOT interested in hodling. They are here to make money off of their BTC investment with only risking a small amount and cashing out 10% of it, while the retail investor hodls for their life savings at all time highs again.
Except they still own nearly all the Bitcoin they bought, so I don’t see how selling a tiny bit of it and tanking the rest could be described as “to perfection”.
No where in my sentence suggested they sold all of it.
> so I don’t see how selling a tiny bit of it could be described as “to perfection”
Telsa did not lose any money from their BTC investment and are still up >40%. At that time, they (and others on Twitter) caused a run up in the crypto markets to drive the BTC price up to new all time highs and got out a large profit even by selling a small amount and then causing it to drop 12% after the announcement, sounds like it was perfectly executed and it worked for them.
> Why is it clever to tank an asset that they own?
It's not but that doesn't mean Musk won't do it anyway. He once tanked his own company's stock by smoking cannabis in public. After something like that anything is possible.
Stock market investors don’t care, because they’re in it for the long term. It’s the stock market gamblers who bitch and moan, even though they’re the ones who actually cause these fluctuations by reacting to superficial, fleeting news stories which have no bearing on the underlying asset.
Perhaps because only that amount could be sold for a good enough price? Someone has to buy it and a sudden increase in supply will drive the price down, that amount is not a single transaction with fixed price.
None of that was an answer to any of my questions. Specifically, how did talking down Bitcoin benefit Tesla? I don't understand how that move plays into Tesla's hands.
That's still not an answer to my question. Specifically, how did talking down Bitcoin benefit Tesla? That step didn't feature in your hypothesised manipulation strategy.
I am and those who bought BTC when it fell to less than $5000 or $7000 for sometime in a while since it reached its ATH in 2017. That was the chance for new comers to buy into crypto in March 2020.
No-one who bought at those lows lost any money. Only those buying at ATHs and selling now. Thus they are forced to HODL and wait for it to go up again.
And now it's 2021, the new ATH for BTC is $60K and as for many alt-coins thanks to Elon and the Twitter crypto hypers, all the alts are flying and NOW the new retail investors are buying into crypto today, which is a dangerous sign of a pull back later.
Might as well take some profits off the table. Just like what Tesla did and many others in the smart money.
So yes, I'm always laughing at those buying right now in all time highs when I keep hitting that sell button.
Hard to say - many were liquidated on the way down, may more sold in frustration. I'd suspect a ton of people lost a ton of money on the way down in 2017/8. They're not laughing.
If Tesla bought and sold stock in another company, they would need to announce it immediately according to detailed regulations.
With Bitcoin there is nothing that regulates. Tesla can buy it in secret, announce it and drive up the price, sell it in secret, announce it and drive the price back down.
I wonder if someday we get even more absurd. Musk wagers company money on the Chiefs to win the Super Bowl, announces this on Twitter, then hedges his bet when Vegas moved the line after a bunch of pro chiefs action. I mean, it’s not like there aren’t hedge funds that do sports gambling already.
They didn't sell all of their bitcoin, just a fraction, and this is probably another ruse to buy cheaper. There was minicrash earlier that tanked the value >> 10% but it was bought up almost immediately.
Sorry for the lack of clarity, when I said a "bunch of bitcoin" that's quantifiably 10% of their Bitcoin. It amounted to a hundred million dollar profit. Curious if they sold any after 4/1.
I can't find this youtube video of an engineer explaining why the Boring Tunnel is hyped up bullshit. It's just a slow car based subway with very low throughput due to by-design bottlenecks at the entry- and exit-points.
Can't find it. Wouldn't be surprised to learn that Google/Youtube is shadow banning it.
Absolutely. If anyone believes this bs they're just enabling and encouraging musk to continue manipulating markets as he pleases. People will now start praising his decision but make no mistake, I don't know what was the real reason behind it but sure as hell it wasn't climate change and the way musk goes about releasing information that is moving markets is contemtable
No, of course not. Most big stakeholders in cryptocurrencies want a manipulable asset to invest in. A long circuituous route was taken to building one when regulation cut off the ability to do what they are doing with their coins.
I mean, the whole transacting without borders, and providing a transaction medium that is somewhat immune to geopolitical power projection by any one nation state looks great on paper; but it's also the type of idealistic tool frequuently used to get someone to part with their money.
As much of a raging contrarian as I am when it comes to Federal regulation a d interference in markets; the type of market activity surrounding crypto is a spot on copy paste of the types of scammy behavior the SEC was meant to rein in, even if the rulemaking (whether I like how it's done or not) hasn't caught up. It's also market activity that's producing no net positive societal value as far as I've heard of measuring being done to account for it. Businesses popped up to facilitate movement of coins, and conversion to fiat; but the externalities (regulatory escape, lost funds by people when scam exchanges walk off with everyone's assets, greased anti-money laundering mechanisms, environmental costs, brain drain)...
I know my viewpoint on it probably means about as much in the long run as a gnat fart, but it's just one of those things that seems like a solution looking for a problem, picking whatever problem looks most likely to gain momentum this week, and to hell with the problems caused as a result.
Absolutely. Any mention of cryptocurrency by Musk or his companies instantly reflects on the price and there's no way in hell Musk doesn't know that. Happened with Dogecoin like a week ago (after his SNL appearance), happening again.
I'm not suggesting anything here, but it doesn't seem outrageous to think that after the SNL appearance and all the dogecoin references that Tesla/Musk may have bought substantial amounts prior to that before the obvious shilling on live television.
If that's the case, he would not have expected it to crash.
i.e. This may be desperation to fix the quarterly results after the plan backfired.
Either market manipulation or incompetence, it's one of the two.
For someone who owns Tesla and a solar company, claiming that he didn't already knew that Bitcoin is a huge energy sink seems unlikely.
Tesla is a little more high profile, but they certainly aren't the first company to implement something, or take a action, where you from the outside question the environmental impact. Only to have the company reverse the same decision a while later, claiming a huge effort to help the environment.
I mean, he had all the data in front of him when he announced end of March 2020 that Covid will be gone by April 2020 so I don't know what to think of this erratic behavior.
I think a lot of people are aware that bitcoin transactions have an energy cost but haven’t sufficiently gone down the rabbit hole of quantifying exactly what that cost is.
A company as big as as TSLA has people on payroll to figure that out. If they don’t, then it’s still on them. You think this is WSB where I see a ticker, strike and expiry and I’m in with my life savings?
I think you're a touch over-optimistic if you think that all large companies always consider every possible ramification of every decision to its fullest extent prior to acting.
Personally I think Tesla's (and Elon's, and for that matter everyone's) involvement with cryptocurrency as a serious investment is moronic, driven almost entirely by sci-fi daydreaming rather than by actual principles. But my opinion doesn't matter to anyone else, so *shrug,* I guess.
It’s a typical pump-and-dump+market manipulation decision in an unregulated market so it is legal, and highly profitable. It’s not a bad investment, only a moral failing.
Given that they haven't pumped (if anything they stand accused of deflating, not pumping) and they haven't dumped (they still hold roughly 90% of their peak position) how do you figure that they performed a "pump and dump"?
Yeah, he's just enacting retribution on the SEC for the tweetsitter they appointed due to him ... manipulating the market. ($420 funding secured, anyone?)
That is anarcho-capitalism to you. Even though I'm a libertarian leaning, I still think we should put a tax from CO2 emissions on crypto transactions. Something in range of 300$ per tonne of CO2. So with bitcoin emissions at 0.5T per transaction, it would be somewhere around 150$ per transaction. And to cash in on bitcoin you should be required to document the whole history of bitcoin you own.
What I don't get is, why people are talking about environmental impact per transaction. Transactions or not, the computers are churning constantly to solve the useless function that would produce the hash with the most 0s in it.
It really doesn't have anything to do with transactions(the fees are only a fraction of the profits). The energy impact would be precisely correlated to the fiat price since the miners will be paying for the energy and equipment in fiat.
total revenue: 6.75BTC, that is ~ $350K at the moment.
Each block is mined every 10min on average, so it is 2.1M per hour. So the total energy consumption is limited to $2.1M per hour or $1.5B per month at this price. It would be $150M if the price was $5k instead and $30B if the price goes to $1M per BTC. When that happens, 1 transaction will amount to the energy consumption of an American family for 1 year or more. At $1M per BTC, $360,000,000,000 worth of energy would be wasted per year on calculating a hash of a block that is functionally exactly the same with the same amount of transaction as the one calculated for $360, $3.6 or $0.03.
I'm sure I'm missing something like investors betting on price increases, infrastructure elasticity etc. but the correlation must be roughly like that.
And as such, the best thing that Tesla can do for the environment is to sell all of its PoW coins and continue to talk-down the price.
They, and we, can also petition Governments to ban the exchange of PoW coins for fiat. PoW coins serve no purpose and represent a egregious waste of our civilization's advanced manufactured goods and electricity. Taking crypto down a notch might also make ransomware attacks less likely.
If it was about the environment and not looking for a scape goat, then ban or simply tax the dirty energy sources.
It makes no difference to the environment if you burn coal to feed Bitcoin or a factory.
Higher taxes on dirty energy would make a huge difference to which power sources would be used by Bitcoin however as Bitcoin feeds on cheap energy, but why limit ourselves to Bitcoin anyway; it doesn't burn the coal.
Fossil energy sources is a necessary evil, the pollution we create results in cars, computers, food etc. You can't simply say that from now on you'll shut down the coal energy, that would be catastrophic.
Instead, the governments are incentivising the cleaner sources over the other. At least the governments that have a mandate to do that.
The problem with the energy spent on Bitcoin is that it produces a gambling marketplace and nothing else(okay, also some ransomware and illicit trade tools too but these are minuscule). Do we really need to have huge global gambling marketplace at the cost of the destruction of the environment? At the same destruction we could he better food, electronics cars etc. The same gambling marketplace infrastructure could be run for just a few kWh.
It's not a fundamental thing it's just that looking at the per-transaction energy cost really puts things in perspective. And 500kWh is hard to comprehend so I like to put it in perspective by comparing it to locomotives. An F40PH, which is a very common American passenger locomotive as seen on Caltrain, Amtrak, Metra and the MBTA puts out about 2.4MW at full blast. So, just under 5 transactions per hour, per locomotive. It's staggering.
Expressing the energy consumption in electric vehicle mileage makes the numbers more tangible. 500kWh is ~3000 kilometers of range for a mid-sized EV, or enough to move a family across the whole continent. Just to shift BTC from one pocket to another.
BTC has pivoted away from the Bitcoin whitepaper in mid 2017, decided to constrain its transactional troughput and went the "store of value" route. It can handle some 4 transactions per second.
An unconstrained version of bitcoin can handle hundreds, and with technological improvements thousands and then tens of thousands of transactions per second. I can already do this on a Raspberry Pi [0] (in controlled conditions).
Bitcoin's footprint is sadly big, but still smaller than that of the banking industry. I foresee a future where most of the mining is done with renewables, as this is what will make the most sense.
As I said, the number of transactions is irrelevant up until the block reward gets minuscule or completely ends. That is statistically not expected to happen before a few decades.
I know about the banking industry argument but the banking industry is not only about transactions and they also catch up with technology, removing staff closing down offices and branches. In fact, those related to transactions are already almost gone, the rest is about things where BTC is irrelevant anyway, things like compliance anti-fraud etc. If anything, the crypto exchanges assumed many of the banking infrastructure.
Blockchain vs a centralised database is not even a competition when it comes to efficiency, no matter how much you want o twist the argument the fundamentals are rock solid.
What blockchain solves is the trust issue but only for storing the value and not for using it. The problem is, we as humans rarely transact with people who we don't trust. Even with the ransomware and drug trade use cases of the crypto coins, the transaction depends on the trust that the seller will deliver the goods.
The only possible use case is when the society ceases to function. When that happens, BTC would be very useful but when that happens the economy would be fraction of what is now because everything beyond transactions will still need trust so that the labour can integrate vertically and do high value production.
If bitcoin had the same market cap as all of the cash in the world (around 40 trillion) the price would be higher and the ecological footprint would be significantly worse.
There was a comment that was deleted as I was writing a reply. Just not to waste it, here it is:
the comment:
"Correct me if I'm wrong but in absolute numbers Bitcoin seems to be responsible for more CO2 emissions than the whole financial industry. [1] And it's hardly in use. Indeed it seems convincing that Bitcoin together with Bitcoin Cash can be tuned to have reasonably low energy usage per transaction, e.g. by doing lots of transactions off-chain. But it's not the default, it's an option that is not really being taken advantage of. It's unfair to compare systems that are not optimized with systems that are optimized. On the other hand Bitcoin is now more than 10 years old and there was already a reasonable amount of time to optimize it. That said, I think some of the initially advertised noble goals (more stable currency, democratized access to financial tooling) are thrown away for quick profits.
[1] https://www.bbc.com/news/technology-56012952"
my reply:
On chain, off-chain doesn't matter because it's not the transactions that the miners are after.
The Bitcoin blockchain can probably be mined even on a fitness tracker, it's not that the calculation itself requiring gargantuous amount of energy. It can even be mined by hand.
The problem is, it is a competition by design which economically dictates that there's money to be made up until the price of mining matches the reward of a mined block. This is also dynamically adjusted to match the mining availability through increasing or decreasing the difficulty(which is, the adjustment of number of 0s that are needed in the hash for a block to be valid).
The current situation is by design and BTC will work fine with any amount of energy thrown at it. It will work exactly the same, on-chain, off chain, mined by a single server, mined by the complete use of humanity's energy, the energy collected by a Dyson Sphere. If will work exactly the same, only the number of zeros on the hash of a block will change.
That's exactly the case but on average the total mined coins must be distributed proportionally to the miners workload since the possibility to strike a block is correlated with the hash-rate which is correlated with energy consumption. They also do pooling to ease the distribution.
That Bitcoin mining has a disastrous energy consumption is not a new finding. Elon and Tesla knew that and decided to go for bitcoin anyways. And they made alot of profit from that.
For me that seems as if they came to the (correct) conclusion that BTC is not the future. Justifying that decision with the climate impact feels like a bad excuse.
If anything, it's good that its public now that its an energy problem. For the average person dealing with bitcoin this wasn't known (at least in my circles). Great way to get everyone's attention.
Why is is Bitcoin mining mainly happening in China, but not other compute bound tasks?
How about machine learning. Why aren't the leading data centers for ML based in China?
Or are they?
And on the energy front - if fossil fuels are the best energy source for calculating hashes, why not for other types of number crunching?
Can boycotting one type of calculations really keep the fossil fuels under the ground? If they are useful to power computations - won't they be used for some kind of computations anyhow?
Because there is tremendous risk of having data located in China. This is not the case with Bitcoin. If you put your SOTA AI/ML project there, your IP will be stolen, guaranteed. If you put your Bitcoin mining there, your only risk is the hardware.
The Bitcoin mining farms in China are not rented out to western customers. They do not sell the raw processing power. They sell the finished product: mined blocks.
They could do the same for ML. Sell the trained models.
The trained model is a guarded treasure. There's a reason why very few ML papers publish their trained models; or Deepmind/OpenAI never releasing the resulting models - it's expensive to train the network, but cheap to use it afterwards. You don't want anyone unauthorized to get their hands on it.
There are several reasons it's mostly a China-operation. Interestingly, it's a textbook example of deficiencies being the competitive advantage.
#1 - China's electricity grid is not very efficient at distributing, which leads to some areas with constant surpluses, directly translating into extremely low electricity prices in those areas
#2 - almost all computer hardware is manufactured in East Asia. Chinese miners don't buy their hardware on the open market, they snatch underhanded special deals with the manufacturers who're then deeply sorry about their "unexpected manufacturing shortfalls"
#3 - Crypto is essentially banned in China for private citizens. Chinese Communist Party is actually quite happy about the mining though - when you zoom out a bit, it's just a money pipe from the rest of the world (mainly US) to China. It also funds bootstrapping of their silicon industry
#4 - crypto in general benefits from weak rule of law. Try running a crypto mining operation in France - the tax collectors will be knocking on your door after the first mined block. Corruption and nepotism is absolutely endemic in China - "sharing" a bit of the mining profits with the local officials has a high chance of skirting the rest of the tax burden
If you take a positive spin it on, it could be heavy manipulation for the environment.
1. Buy Bitcoin to put added focus to it
2. Stop using it and cite environmental impact
3. Swap to something more environmentally acceptable in an attempt to tilt Bitcoin from the crypto throne or push them to change the amount of mining going on.
I’m not sure how beneficial it is to give him the benefit of the doubt, but it’s a view I haven’t seen it the threads before.
He is also suggests they are look at Proof of Stake cryptocurrencies with significantly lower energy use. Maybe this is just a pre-cursor to Musk launching a PoS 'Tesla EnviroCoin' down the line...
I think cryptocurrency is actually failing, not because of technical nor political reasons, but all because of the sheer stupidity of populus. You see, cryptocurrencies are absolutely vulnerable to social engineering likes this, and I believe this is not something technology can solve, never ever even in the far future.
The future of cryptocurrency now lies in the hands of governments, whose regulations are the only true solution. Good bye the days of truly decentralized and purely market-controlled digital - ahem - currency.
The explanation is obviously bullshit, everybody knew the climate impact years ago. He realized his power for market manipulation for Dogecoin and he milked the cow for real this time.
Also I wouldn't put behind well financed groups that hire PhDs to find a way to accelerate the PoW enough to gain a significant advantage (as in, ability to centralize the blockchain).
The funny thing is that even if you found some magical hardware that was 100x more efficient than the next best thing, the incentives make it so that you don't want to use 0.01X energy to produce Y hashes and mine the same proportion of coins, you'd want to use X energy to produce 100Y hashes so you mine a larger proportion of coins.
Same people calling for decentralization, unregulated practices and absolute freemarket are now calling for regulation and accusing Elon of market manipulation. This can't get any better, I'm having a lot of fun reading Reddit and Hackernews. Good job, Elon! You demonstrated once again that you are a talented businessman. It's so easy to make money when there are so many naive people around. Thanks for the lesson.
Why did Tesla saying they would accept payment in bitcoin move the price so much anyway? Surely it was only ever going to be used in a very small fraction of Tesla’s sales. And Tesla’s sales only represent a very small fraction of the total number of bitcoin transactions.
Were bitcoin speculators behaving rationally when they bought and sold on this news? And if not, don’t they deserve the majority of the blame here?
Perception...
And also, who says speculators behave rationally?
It is rational to expect that a "bad news" might take the price down because irrational speculators would sell, therefore it is rational to be irrational, and sell.
Just curious as someone out of the loop, what regulations encourage other car companies to buy regulatory credits that Tesla is granted by producing zero emission vehicles? I know its a big part of their profitability.
Are there not regulations that would encourage Tesla to buy credits to make up for their crypto-polluting sins?
Talking about the EU perspective in 2020 here: FCA (Fiat Chrysler and all of their brands) sold too few low/zero emission cars. Their fine would have been X millions of €. By paying Tesla X - 100 millions €, they save 100 million €, while being pretty pissed off that they are financing a different OEM.
Due to this reason, they already announced that in 2021 they won't need to "pool" with another OEM like they did in 2020.
This is actually a great idea. Sell carbon capture machines backed by a cryptocurrency.
Basically what Helium is doing for IoT networks, could be done for carbon capture machines aswell. Helium sells branded radio modules, "miners" provide network coverage and get paid for this in Helium(coin)
CarbonCoin (patent pending) could do the same, produce or white-label carbon capture machines, add logging modules to keep track how much CO2 is captured and pay the owners of these machines in CarbonCoin.
Proof of stake cannot be decentralized since it's permissioned by stake and not permissionless - we studied it since it first thought about in 2014.
You literally cannot get stake without someone giving you permission because it's an internally already owned resource. Permission is barrier to entry of up to infinity and another word for censorship. If control is not distributed without permission to independent parties, it cannot be called decentralized nor censorship resistant.
There is no alternative to proof of work because that uses an EXTERNAL permissionless resource available all over the universe for a reason. And it does it in a matter that's provable via a concept known as unforgeable costliness.
Not only is mining permissionless, it's costly to everyone. At equilibrium the mining costs force miners to sell virtually all coins and depend on the markets for recovering those sunk costs just to break even. That means miners are literally forced to give up control to the markets and makes the coins equally accessible without permission via mining or buying on markets forced through unforgeable costliness. The markets, and coin owners, get to price incentives that pay miners on every possible version of the chain preventing many issues including miner collusion that could render sunk costs unrecoverable.
Proof of stake is opposite - it literally forces a permission be given by every token put up for sale, something they never have to do. Staking rewards literally incentivize opposite of distributing control to others by giving you rewards in form of more coins and more control without any additional costs forever.
Proof of work is the most efficient way, the only known way, and the best known way to decentralize control. And it uses far less energy than entire countries regularly use to secure their currency, all in adversarial environment.
The biggest challenge for real decentralized cryptocurrencies is lack of education and enormous incentives to deceive and miseducate everyone for profit. This is why there's so much money these days spent marketing scams that pretend to be cryptocurrencies but are centrally premined (literally skipped permissionless mining for majority for permissioned centrally pre-mined coins) or trivially printed authority token designs like proof of stake all completely permissioned.
Polkadot/Kusama are amazing projects, but not designed to be used primarily as p2p currencies. As much as I have some issues / doubts with Cardano, I still think it's the most viable PoS cryptocurrency for mass adoption right now. ETH2 maybe also, whenever the transition actually happens.
except the fact they are literally centrally premined scams and not permissionless since you can't get stake without someone choosing for literally no forced reason to give you access
there's a reason ethereum has always been considered a scam by every developer in the space that wasn't a premine scammer
I like https://chia.net, even if hackernews was just panicking about a harddrive shortage (proof of space) I can't accept that playing bingo on terabyte drives will ever be profitable enough to buy a data center for it.
Anyway it's the programmability (chialisp) that is really interesting.
But so is proof-of-work. PoS is weighted by how much wealth you’ve got at risk in the system, PoW by how much you have currently tied up supporting the system’s infrastructure. So, they look at different uses of wealth, but both are looking at wealth.
Proof-of-X is pretty invariably “Wealth, applied to X”, especially if the system ever becomes even loosely recognized as money-like.
Exactly, proof of work is even more for rich because it's all about availability to processors and cheap energy - guess who has that? super rich and corrupt.
Proof of Stake is validation by faith in the network which is infinitely more reliable and fair. In fact it's much more alligned with bitcoins philosophy of positive-greed than proof of work is in the current day. Heads of PoS need the network healthy for their assets to be healthy - heads of PoW can rotate shitcoins every month since they mine all the same.
Chia is a puppy-stage environmental and supply chain disaster waiting to happen.
If you burn an ssd a week to make a tiny profit, you’ll have people burning racks of them and creating tonnes of eWaste. Look forward to $2k entry level laptops (see gpu prices)
> What's stopping Chia from doing the same thing to the storage space?
The gobsmacking amount of HDD supply on earth. For now people are burning SSDs to create the plots (1TB SSD can probably create a petabyte of plots to "farm"), but if you have that petabyte of storage space you're keeping online 24/7, do you suspect playing bingo to win crypto tokens is the most profitable use of that memory?
How the economics shake out remains to be seen, but I think they have a solid vision that farming can be just rewarding enough for people to use old harddrives, not profitable enough to burn NVMe sticks.
eg: I farmed 2 coins running an old thinkpad and a network drive for a month so far. Worth ~$2200 at current rate. Nice profit, but probably not buying a new thinkpad to dedicate to it.
It seems that Tesla is using the popularity of Bitcoin to prove the concept while making a lot of money and then they can switch to Dogecoin propping its price up.
Tesla didn't dump bitcoin. They only sold 10% of their holding, so any negative impact of their decision to cease acceptance of bitcoin for vehicle purchases, on the value of their bitcoin holdings, would outweigh the gains they made from pumping bitcoin and selling a portion of it.
Is there anything legally wrong with manipulating crypto courses? Or even ethically?
The supposed main advantage of cryptos is that they are independent of governments and institutions, and their rules. And in this case, that's exactly what they get.
And besides that, without 'manipulation' (which I'd say includes any kind of marketing), cryptos would inherently be worth exactly nothing.
For the exact same reasons that Jim Cramer is not in jail, CNBC staff is not in jail, Marketwatch staff is not in jail, Motley fool staff is not in jail, Ken Griffin is not in jail, etc etc.
For the same reasons the people who tried to short and manipulate Tesla (and GameStop) into bankruptcy for gains didn't go to jail.
Also for the same reasons market makers and hedge funds like Citadel can still exist while blatantly manipulating the market every second of every day and deliberately shorting healthy companies into bankruptcy for gains.
All of the above parties are doing way way way worse than Musk in broad daylight. All Musk does is arguably pump and dump. The above parties pump and dump and are constantly wash trading, influencing/buying the SEC, buying media (CNBC "Tesla is almost bankrupt, sell now", etc) for pump and dumps, pump & dumping on Twitter (Cramer), naked shorting illegally, messing with order executions, HFT DDoS attacks on exchanges for profit and so on and so forth. All at the attractive cost of meaningless tiny fines (assuming they get fined at all) and 0 jail time.
Yes. The US financial markets are completely rotten.
Ironically, I feel that the crypto markets are much fairer. At least you can buy a real token directly and sell that real token for money on an exchange of your chosing. At least it's clear that Musk is pumping and dumping (as opposed to Jim Cramer on CNBC, who does exactly the same for hedge funds under the veil of "trustworthy media").
As a comparison: ever tried to get your hands on stock certificates for stock you own? Good luck with that. Can you point me to a broker where you can directly own a share? You can't. They don't exist. Can you point me to a broker that doesn't lend out the shares which YOU "own" to hedge funds? I know of some in Europe, but they are very rare. Can you point me to a broker that allows you to route your orders to the exchange of your choice? I can only name 1: IBKR. The vast majority of brokers get paid to route your orders to the exchange that is worst for you and best for whoever is paying off your broker. And then there's "cheap" brokers who offer "payment for order flow" where traders essentially pay a "trade fee" to whoever is paying for order flow (to give you worse execution than themselves).
I could go on and on and on.
PS: to be sure, I don't mean to turn this into whataboutism and to argue that Musk's pump & dumps are ethically OK because others are doing worse. The point I'm trying to make is that the US markets are essentially rigged and unfair. And claiming that Musk should be in jail for pump-n-dumping is fine, but then many others should be jail too. Preferably for longer and with way higher priority.
Elon is still promoting Dogecoin which is also proof of work. Lots of people will be harmed when it crashes. Nearly all cryptocurrencies crash 85% every once in a while.
>Why HEX is a Ponzi and not a solid investment (Part 2): Richard Heart
>Legal and questionable events from Richard J Schueler:
>2002: Sued and won by Peacefire.org for violating Washingtons anti-spam laws, he was known at that time as the 'spam king' and made a lot of money off it - source. The Methuselah Foundation, for which Heart volunteered at that time, was committed to extending the human lifespan and “making 90 the new 50”.
>Questionable events in Panama: Several of Heart’s alleged aliases (James Hart, J. Richard, Richard Schueler) were named in connection with a Panamanian criminal network. Heart, called "CharityLover' at that time supposed cohorts included robbers, blackmailers and corrupt lawyers and judges, according to posts stemming from the now defunct Panama-Guide website . Miguel Antonio Bernal (Panama lawyer) described the process by which American criminals flooded Panama to “rob, cheat and blackmail local businessmen using Panama’s weak legal system'' in the linked post under ''Panama".
You're the same "Richard Heart" who won the "Golden Pump Award" for "Best New Scam" for "HEX", correct?
Humor: So I'm sure your explanation of why somebody hasn't already successfully implemented practical proof of stake before is totally credible and unbiased! ;)
Not Humor: If somebody will work on it for free, do you promise to pay them in your own cryptocurrency? "Will work for stake!"
People have successfully implemented proof of stake cryptos. Solana, cardano, avax,algorand just to name a few are all faster and cheaper than BTC or ETH (some vastly so), and don’t have the horrifying resource usage that comes with proof of work.
As far as I can tell, the fact that bitcoin/eth weren’t phased out for better alternatives tells me that:
* a significant usage of crypto is pure speculation/investment
* peoples identity gets tied to particular coins
* people care more about existing network than usability (eth vs solana, for example)
I have respect for the people in this space who are trying to do meaningfully new or interesting things, although its overshadowed by the wealth of blatant Ponzi schemes, memecoins, or copycats/scams just trying to make a quick buck.
You don't have to destroy the environment to maintain a database. There's other ways to achieve censorship resistance than waste. Blockchains are are all social consensus anyway.
Edit: [You spoiled the joke by retroactively editing your post and removing your amusing disclaimer that you had a financial stake in shilling POS, and your hilarious call for programmers to help you develop your new cryptocurrency! "Dodge, dodge." That's what makes you so funny! The "Glooty" character parody is spot on.]
I see your joke and raise you one joke https://paywithexposure.com/ Also, you should actually watch the interview on the page you just linked. It's amazing.
>During the interview at ANON, Richard confirmed that he was one of the first people in the world to be sued for online spam, back in 2002. This shows us Richard has experience abusing unregulated markets, as he is doing with crypto these days.
Is this an accurate quote of your own words?
>When I pressed the matter and asked for a simple “yes” or “no” as to whether he, as the FOUNDER of HEX, knows who benefits from the funds sent to the “Origin Address” he flat-out said “I’m dodging your question.” Dodging the question! He proceeds to repeat “Dodge, dodge.”
The same argument people made against Tesla saying why electric cars weren't really better than combustion engine cars. They said Tesla cars use a lot of energy, much of which comes from coal and other dirty sources. What a joke that Elon is making this argument.
There's a big difference. Even if people using EVs now effectively burn coal to do it, they replaced an ICE and can migrate to greener sources over time. On the other hand, crypto mining exists purely on top of existing energy usage. These are not really comparable situations.
Sorry, I am not sure I completely understand your argument. You expect the energy used for Tesla cars to more easily migrate to greener energy? Bitcoin mining is completely location independent and is able to migrate to cheaper (which as renewable energy tech improves will equal greener) energy much easier than an individual tesla owner can.
Assuming EV purchases on average replace existing cars not add new ones. (They do in a long run)
Energy usage:
Before buying an EV: X with Y convertible to green. After buying an EV: X with Y+d convertible to green.
Before a new miner starting: X with Y convertible to green. After: X+d with Y+d convertible to green.
It doesn't matter if the new miner is running 100% green, because they still use energy which could instead replace some amount of fossil fuels. We're not really isolated in this context - all of us suffer from not removing the reliance on burning coal.
How about mass transit, bicycles, running, walking. Lets stop using airplanes and use blimps instead. Maybe there are benefits to using energy? Energy usage is how society and technology advances.
This is only true if you don't think Bitcoin is solving an important problem. For me, I think it is solving arguably the most important problem. That being said, even if I think clothes dryers (which use more energy than bitcoin) aren't solving a very important problem, I don't try and tell people they are bad or immoral or destroying the environment because they use clothes dryers.
