It does in that you can pay your taxes with it. You can also discharge all debts with it.
The same can’t be said for bitcoin. The government doesn’t have to take it for payment of taxes, and if you owe me money, I don’t have to accept it to pay it off.
That just means it has more uses. Gold has intrinsic value but the government will not accept that either to pay your taxes.
If we have a zombie apocalypse no one will want paper money in exchange for a good because paper money has no intrinsic value.
True, but it’s not about intrinsic value, it’s about what those things represent. Dollars aren’t just backed by the full faith and credit of the US government, they’re backed by the economic output of the US economy. Bitcoin has no such wealth backing it.
Those things aren’t created out of nothing, they have the underlying wealth of the companies backing them. Boeing stock is partially backed by all the planes they own, Pfizer by the medicines the my make, Exxon by the oil they produce, and so on. All those things have intrinsic value. Bitcoin has none of that.
True, let’s leave equity out of it. Debt instruments are only worth anything if they can be paid back. Which sometimes doesn’t happen. But creating them doesn’t redirect global resources.
Sure. As I mentioned above in the quoted post, Bitcoin uses a lot of power relative to its net value to society, which I think is arguably negative. But 0.5% of power use is not going to bring the grid to its knees.
But how does the issuer of the debt get the money to pay it back? By using global resources, to produce a product, to earn money, to pay off debts. It’s not quite the A → B pattern for bitcoin, but it’s still there.
The way the protocol is written, mining does not provide just new bitcoins but also a transaction fee. If you want your transaction included in the blockchain, you are already paying a transaction fee to the miners, who also get new bitcoins as well. If the fees you are willing to pay are too low, it is unlikely a miner will include your transaction in the blockchain over other transactions. So, they don’t run those rigs just to mine bitcoin but also to get those transaction fees.
The way this is supposed to work in the future is that once there are no new coins to be mined, the transaction fees alone will be sufficient to keep mining going.
That’s why miners would, at least in theory, keep mining after the last coin is issued.
well, and you can be damn sure that ‘bitcoin’ and all other digitial currencies will also be off the table.
I’m sure there’s places in the world where mining is essentially nonexistent, or at least not on the public grid. Therefore other areas are carrying more of the load. Would countries with cheap power then see 5% of their electricity going to mining? 10%? 20%? Even if it’s just a blip on the world stage, that’s a lot for an already fragile local power grid.
If Bitcoin transactions were to be as common as just Visa card transactions…
And that is just one Bitcoin transaction compared to 100,000 Visa transactions.
So the real world power requirements of a Bitcoin system comparable to the number of other current financial transactions would be ridiculous.
Looks like Kazakhstan has a big stake in the cryptomining biz.
Oh, definitely, it could be a problem for some locations and grids. Most of the solution to that problem has to be letting the market rate for electricity rise, but that can be easier said than done in some cases.
I am kind of surprised that no one has figured out how to economically rent “Bitcoin heaters” to people who use electric heat. Found one!
The impact of mining on the power grid(s) is difficult to extrapolate over an entire nation. The relevant server farms often tend to be localized to particular municipalities or regions.
Meaning: their power consumption can have a leviathan outsized impact on particular locales.
Case in point:
Which is particularly charming after last year’s Texas winter, the horrendous (not affiliated with the rest of 'Murica’s grid system) power failures, resulting catastrophes, and Ted Cruz needing to flee to the Yucatan for … for … for … Og’s sake !
[Think of the children]
Texas begged, borrowed, and stole to get these people to do biz in their states. Now comes the bill. I’m guessing they won’t pay.
After hurricane Sally the only medium of trade was good old US cash. No power for credit cards and nobody had those paper tickets you used to sign. Some individuals took jewelry or gold in trade but at a huge discount. Bitcoin? Not even a consideration.
In Greenbacks We Trust