NFTs: I don't get it.

[Worgen]

If, in fact, their scarcity is sufficient reason for a high price, then the price of electricity is unlikely to ever be a reliable deterrent to mining more. As no new 'coins' are mined, the price goes up. As the price goes up, it becomes easier to justify the electricity cost of mining another. The world cooks and the alien lizard people arrive to reveal that it was all a terraforming scheme.

Maybe but I think we reach into the realm of "we will never run out of oil because the last barrel will become so ludicrously expensive that no one would be able to use it for anything." But, its more likely that something else will replace it and its value will just vanish, or at least that would be more likely in regards to crypto if the world wasn't stupid.

 

[fOx]

Many of the artists I follow are pretty livid about it. Probably doesn't help that there seems to be a free-for-all on selling other people's stuff and burning down rainforests.

Here's a more bizarre question: I keep hearing people say that these NFT's are extremely bad for the environment. How? Aren't they just digital code, how does that impact the environment?

 

[crimson5pheonix]

Here's a more bizarre question: I keep hearing people say that these NFT's are extremely bad for the environment. How? Aren't they just digital code, how does that impact the environment?

They're blockchain based, which is very computer intensive. It's the same thought behind bitcoins, and having tons of computers do these calculations drives up energy use.

 

[Baffle]

Here's a more bizarre question: I keep hearing people say that these NFT's are extremely bad for the environment. How? Aren't they just digital code, how does that impact the environment?

Effectively because code isn't made with two wooden sticks; the hardware takes a great deal of power to run (it requires both the power to run and the power to keep it cool). And the blockchain isn't efficient -- AFAIK it runs 24/7 at maximum capacity, whether it's doing something or not (because the goal is to 'mine', not to carry out whichever function is being done on the back of 'mining').

The theory is that proof of stake is going to change a lot of that because it will mean the hardware only runs when necessary (because there's no more mining), but the obvious problem with proof of stake is that the rich get richer, while the poor (who have lower stakes) will buffer the network but never receive the payouts (because your chance of a payout is based on the size of your stake).

The network is powered by the arrogance of those who don't suffer the consequences of their own actions. And electricity.

 

[Agema]

And that's how you end up with "currencies" like dogecoin.

One cannot help but notice that the creator of a cryptocurrency can start it off and give themselves the first 10,000 wankcoins, and if takes off a few years down the line, they're a multi-millionaire. I can't help but feel there's a lot about cryptocurrencies which is about benefitting tech bro libertarian arseholes rather than society.

If, in fact, their scarcity is sufficient reason for a high price, then the price of electricity is unlikely to ever be a reliable deterrent to mining more. As no new 'coins' are mined, the price goes up. As the price goes up, it becomes easier to justify the electricity cost of mining another. The world cooks and the alien lizard people arrive to reveal that it was all a terraforming scheme.

Hence perhaps why I was suspicious about Tesla announcing they were into bitcoin. I cannot help but suspect that's got something to do with an electricity generation and storage firm deciding there is profit from driving an electricity-hungry industry.

 

[Baffle]

And that's how you end up with "currencies" like dogecoin.

And yet there's nothing inherent to the joke currencies that should make them worth any less than bitcoin. Ethereum has a bunch of other stuff running on the back of the mining (still a bad idea, but it does something), with bitcoin the mining is the end goal.

I assume when the 20 millionth bitcoin is mined we'll find out that Satoshi Nakamoto works for BP or Shell or something.

 

[Baffle]

One cannot help but notice that the creator of a cryptocurrency can start it off and give themselves the first 10,000 wankcoins, and if takes off a few years down the line, they're a multi-millionaire.

I'm pretty sure that does happen with almost all cryptos. Even with bitcoin, the creator is still believed to have one of the largest holdings.

I'd be surprised if Tesla don't release their own coin at some point, or at least Elon Musk alone. And all the dirty nerds will be, like, gobble gobble gobble, space coins! Goin' to Mars to spend my space coins than can only be mined on Tesla's propriety hardware! Gobble gobble gobble.

Edit: Bished my quote.

 

[Silvanus]

One cannot help but notice that the creator of a cryptocurrency can start it off and give themselves the first 10,000 wankcoins, and if takes off a few years down the line, they're a multi-millionaire.

While this is very true, it's also kind of true of traditional currencies.

 

[Satinavian]

Traditional currencies are backed by something when issued. So instead of the issuer getting rich by holding back some of the money until it gets valuable, the issuer is investing his own wealth to make the currency work.

So not even remotely the same.

 

[Agema]

Traditional currencies are backed by something when issued.

I would argue the values are mostly backed by the willingness of people to use and buy them. If people think the dollar is overvalued against the euro, they'll sell the dollar and buy euros. The supply of dollars goes up and demand falls, the value falls. Say they sell 100 dollars and get 80 euros. Then the dollar value falls, and they sell their 80 euros and get back 110 dollars: they've made a 10% profit. The value of bitcoin is basically the same principle. Except because bitcoin is far less integrated into the global economy and prone to massive trends (whereas national currencies are so heavily traded, and controlled by the government), it's very unstable.

Governments control their currency valuation usually by holding stocks of other currencies. If they don't want their currency to go down in value, they buy it with their foreign currency reserves, and they can buy foreign currency reserves to decrease its value. They can also depreciate it by just "creating" more currency.

Some governments do hold their currencies to a value by officially fixing it: so 1 Ruritanian florin is worth 1 dollar, or 0.01g gold, or whatever. This they can alter by simply saying so. It's less used, especially by developed countries, because it can make economic policy much more inflexible and problematic. Some developing nations will prefer it because the disadvantages are outweighed by the advantages of currency stability.

 

[Silvanus]

Wait, so, NFTs apparently don't confer any legal rights over the artwork to which they're associated. They're not even inseparably connected to the item, and they don't allow any exclusive usage.

They literally confer nothing, unless other people arbitrarily choose to respect the fact you have one. Like if I wrote "I own Disney" on a post-it note.

What utter fucking nonsense. Someone, somewhere, must be in paroxysms of laughter about the fact they managed to get people to spend actual money to acquire nothing.

It's the online equivalent of a bottle of nondescript air, with the label reading "genuine air from the Great Pyramid of Giza, value: £100,000".

 

[The Rogue Wolf]

What utter fucking nonsense. Someone, somewhere, must be in paroxysms of laughter about the fact they managed to get people to spend actual money to acquire nothing.

Money, fool, latter soon parted from former, etc.

 

[Dwarvenhobble]

Bitcoin is reckoned to eat up ~40 TWh electricity annually. Assuming a cost of £50 per MWh, that's £2 billion a year.

The UK mints about 1 billion coins and 4 billion banknotes a year. The estimated cost is 5p per coin and 10p per banknote, so that's about £450 million: that should include all production costs (labour, equipment, energy, raw materials and their transportation, etc.) Let's assume energy is 20% of total cost: bear in mind the cost to get copper and nickel includes their mining and transportation costs, so including energy use. I've picked 20% semi-randomly, on the assumption at least half of production cost is paying workers, and there will be other costs. So, call it £110 million in energy. The UK has ~1% of global population, so expand that to £11 billion for the world. That's just over five times the energy expenditure of Bitcoin, despite supporting currency with a total value something like 50 times greater. And Bitcoin energy use is getting worse, and worse and worse. Normal currency energy usage is not.

I'm aware this is totally a back-of-a-beermat calculation, but it perhaps gives us a ballpark to work with.

I know there are also arguments about the use of energy to run financial systems. Aside from ATMs, however, I think this is potentially unfair, because bitcoin piggy-backs off the wider global financial system as much as anything does.

However you also have to add in the costs of every financial institutions servers to store the info and all payment processing servers for the present system too your beermat £110 Million or the UK would just be for production of coins and notes.

Yep, and the US government are going to be increasingly keen to pick people up on it. Already charged McAfee on it.

They've been after him for a while on other things too Crypto is likely just a good excuse.

Okay so Jim and the copyright lawyer brought up a phase, and I've seen it in this thread more than once, and I have to ask because I really don't know. What is a blockchain? I ask so many questions on this stuff I really should take a class.

Ok easy way to describe it is as a film series.
As one film follows on from another to an extent in a film series so does one block follow on from another.
In films to story carries on or plot points from the previous film while in the blockchain some data carries on and is encoded into the next block.

aka China, who controls about 60% of the current total hash rate.

You'd still have to convince them to all do a co-ordinated change though, which mining machines aren't designed to do they don't work like standard computers and you can just log in and program on them.

But its all just shared and agreed upon by the masses, right? Like all of bitcoin exists because the people who own bitcoin say it does, and it has a cap of 20 million because they say that it does. There's nothing stopping other people just claiming they have the real bitcoin, and everyone else has fake bitcoin, and so long as they have more people they're right. Its like digital currency by majority consent?

The gap is mostly due to the number of possible hash functions than could be used to generate Bitcoin.
Other crypto currencies are working on ideas to burn some of the supply or recycle it.

 

[Dwarvenhobble]

And yet there's nothing inherent to the joke currencies that should make them worth any less than bitcoin. Ethereum has a bunch of other stuff running on the back of the mining (still a bad idea, but it does something), with bitcoin the mining is the end goal.

I assume when the 20 millionth bitcoin is mined we'll find out that Satoshi Nakamoto works for BP or Shell or something.

I mean technically Bitcoin being tradeable for other goods or services now makes it worth more because there is an out other than just trading it for other currencies.
Only use for a lot of other crypto currencies is dark web trading for stuff e.g. Weedcoin which I don't think needs explaining what it's used for.

Traditional currencies are backed by something when issued. So instead of the issuer getting rich by holding back some of the money until it gets valuable, the issuer is investing his own wealth to make the currency work.

So not even remotely the same.

Not anymore they're not.

The US Treasury doesn't have enough gold to back all the Dollars in existence. Some with most other countries.

Wait, so, NFTs apparently don't confer any legal rights over the artwork to which they're associated. They're not even inseparably connected to the item, and they don't allow any exclusive usage.

They literally confer nothing, unless other people arbitrarily choose to respect the fact you have one. Like if I wrote "I own Disney" on a post-it note.

What utter fucking nonsense. Someone, somewhere, must be in paroxysms of laughter about the fact they managed to get people to spend actual money to acquire nothing.

It's the online equivalent of a bottle of nondescript air, with the label reading "genuine air from the Great Pyramid of Giza, value: £100,000".

Yeh they're basically as I said a collectors edition sticker put onto a film box alongside all the other film boxes exactly the same as it with the same content but without that collectors edition sticker.

 

[TheMysteriousGX]

And all in all I wouldn't actually care about tech bros hyped on their own farts being scammed in really obvious ways, but they're also building coal power plants entirely to run the scam

 

[Satinavian]

Not anymore they're not.

The US Treasury doesn't have enough gold to back all the Dollars in existence. Some with most other countries.

All fiat currencies started with some kind of backing and only supplemented it with trust to the issuer. That is why they are usually only made by counties. BtW declaring them official currency and force certain transactions to be done with them does count as backing as well.

There is no fiat currency that was issued and the issuer stashed half of the printed money to get rich, which was Silvanus claim. Starting and supporting a fiat currency does not make you rich, it makes you poor. For a country it still would pay off because those profit heavily from having a working currency supporting their economy which also provides them with influence over said economy.

 

[Agema]

However you also have to add in the costs of every financial institutions servers to store the info and all payment processing servers for the present system too your beermat £110 Million or the UK would just be for production of coins and notes.

No. I compared bitcoin against the total value of physical money in circulation - coins and banknotes - which is somewhere around 50 times more value than bitcoin globally, about $40 trillion (it's hard to be precise given how unstable bitcoin's value is). But only a fraction of the total amount of money is in the form of physical currency. If you want to sum up the entire amount of money on a narrow definition - physical currency plus numbers of abstract dollars, pounds, yen, in bank accounts but not including assets, shares, loans etc. - it's estimated ~$100 trillion. If you include various financial products, gold, cryptocurrencies, etc. it's into the quadrillions.

If we take the narrower definition of money ($100 trillion) and assume it had bitcoin's energy efficiency, it would be using the 10-30% of the world's annual electricity supply (or equivalent) just to create and store money. This is somewhere between unlikely and beyond credibility.

There is also of course the power required to run the wider financial markets and transactions, not just basic creation and storage of money. Take a wider figure of $1 quadrillion in money, and it really looks absurd at bitcoin energy efficiency levels - 100-300% of global electricity supply. Although, of course, bitcoin also depends on the wider financial markets anyway and derives much its utility from them: after all, if bitcoin were not conversible with conventional currency, it would be borderline useless.

 

[Baffle]

I mean technically Bitcoin being tradeable for other goods or services now makes it worth more because there is an out other than just trading it for other currencies.
Only use for a lot of other crypto currencies is dark web trading for stuff e.g. Weedcoin which I don't think needs explaining what it's used for.

But it's catch 22 inasmuch as Bitcoin is only tradeable for goods and services because of it's value (much of which is still Darkweb based). Who knows, maybe we'll be buying Teslas with Weedcoin soon.

 

[Dwarvenhobble]

No. I compared bitcoin against the total value of physical money in circulation - coins and banknotes - which is somewhere around 50 times more value than bitcoin globally, about $40 trillion (it's hard to be precise given how unstable bitcoin's value is). But only a fraction of the total amount of money is in the form of physical currency. If you want to sum up the entire amount of money on a narrow definition - physical currency plus numbers of abstract dollars, pounds, yen, in bank accounts but not including assets, shares, loans etc. - it's estimated ~$100 trillion. If you include various financial products, gold, cryptocurrencies, etc. it's into the quadrillions.

If we take the narrower definition of money ($100 trillion) and assume it had bitcoin's energy efficiency, it would be using the 10-30% of the world's annual electricity supply (or equivalent) just to create and store money. This is somewhere between unlikely and beyond credibility.

There is also of course the power required to run the wider financial markets and transactions, not just basic creation and storage of money. Take a wider figure of $1 quadrillion in money, and it really looks absurd at bitcoin energy efficiency levels - 100-300% of global electricity supply. Although, of course, bitcoin also depends on the wider financial markets anyway and derives much its utility from them: after all, if bitcoin were not conversible with conventional currency, it would be borderline useless.

Depends on if it was accepted in trade as such as it's own value commodity.

But it's catch 22 inasmuch as Bitcoin is only tradeable for goods and services because of it's value (much of which is still Darkweb based). Who knows, maybe we'll be buying Teslas with Weedcoin soon.

Well as soon as you can buy and sell stuff with it then it does get a value as such which yeh that's what it has now as such.
All money is just in essence and acceptable middle group between goods which allows a more set easy to work with exchange rate rather than how many rabbits to a chicken and how many cows you must trade for a house.

 

[Agema]

Depends on if it was accepted in trade as such as it's own value commodity.

Doesn't really matter. The bottom line is that bitcoin's energy usage appears to be wildly inefficient.