HONG KONG, HONG KONG – NOVEMBER 9: As a visual representation of the digital Cryptocurrency, Bitcoin …
As a proof-of-work chain, and one that requires state replication across many devices around the world to come to consensus, bitcoin is computationally expensive.
Likewise, states that see some tax revenue from the transactions, but aren’t able to lean on the network operators, might see all of the value transmitted in cryptocurrencies as waste despite the value nodes, miners, and users place in it.
This argument can be as nuanced as pointing to different consensus algorithms: for example, distributed versions of proof-of-work or proof-of-stake.
And it doesn’t remove costs though may ameliorate them: though you can argue about the energy costs of mining vs.
The issue in the designation of “waste” however, seldom gets to this level of detail.
Some would say this is deliberate: after all, the strategy relied on creating an asset bubble and on rewarding those who caused the financial crisis of 2008 in the first place.
The same formula with quantitative easing past the zero-bound has been reactivated again, partially because monetary policy never went back to a pre-2009 equilibrium — benefiting those who owned assets or in other words, those who were rich already and who lived in rich states that could benefit.
Not only did the same players cause the Great Financial Crisis, because of the acquisition of fallen competitors, they have grown larger and even more well-connected politically than they were before.
More alarmingly, despite the rhetoric, China continues to build coal plants at a furious pace, belling the tradeoff of another more fundamental goal: 6 percent GDP growth rate per year.
While the United States has seen a marked decrease in carbon intensity since 2009, a large part of this amounts to natural gas usage, some state incentives for renewable energy, and a large shift from manufacturing to commercial activity, a long-haul trend since the entanglement of Chinese manufacturing with American consumption.
A reading of GDP per capita with a complete focus on carbon emissions in the same manner critics look at bitcoin would account for it as a pure cost.
Bitcoin is being unfairly compared to a financial system that produces a whole lot of consumerism for “providing liquidity” yet cannot seem to avoid large, rapturous financial crises, and which only get rewarded for always being the largest players.
Any system can benefit from reducing costs.
This shift is not only because renewable energy sources are likely to be more economical in the long run — but also because the long-form consumption and savings thinking in a deflationary asset is meant to encourage a better future.
Their economies produce “value” for them — the amount of taxation and the number of people under their control.
Carbon emissions are seen as a cost within the system, rather than as an absolute indicator of waste.
I was one of the first writers in 2014 to write about the intersection of cryptocurrencies in remittance payments and drug policy with VentureBeat and TechCrunch.