Bitfinex isn't the party in question here. Unless Jump has their own coin they can mint out of thin air and convince people to buy for Ether, or are able to convince any of the other main tokens to mint for them, this scenario isn't even plausible.
None of this is remotely accurate and nobody minted Solana. They minted tokens that no longer exist ON Solana. $320 was spent in ETH - a plenty liquid asset that they have that much less of and that lowers the total value of their holdings by that much.
I'm not sure about the state of things in 2017, but in 2022 Coinbase will convert your USDT into USD and let you withdraw it. I have a lot of trouble believing the likes of Coinbase have either not done serious diligence on Tether or are willing to perpetuate what would probably be the largest ponzi scheme in world history by a long shot. Coinbase is a public company with executives that are not eager to go to prison, not a bunch of anons with frog avatars.
I always find it weird that people defend Bitcoin with hypotheticals like this. Sure, it could be, but it isn't, and it largely seems to be going in the other direction. A lot of these arguments assume that price of energy is the only input, but the availability of mining hardware is also a constraint, and once you have it, you have a strong incentive to run it 24/7.
There are a few “climate-friendly” miners making a bit of noise, but the players that dominate by hashrate are using coal and natural gas. For example, here's a thread from the other day about one of the largest US miners and the difficulties they encountered bringing an old coal plant back up to capacity: https://mobile.twitter.com/anthonyc3004/status/1479506660200...
Bitcoins price is primary moved by the cash settled futures market (CME) - like most other commodities. Its barely correlated to tether printing and anyone who actually follows crypto markets knows that.
I don’t follow crypto at all so this isn’t about Bitcoin futures but for most cash settled commodities on the CME the exchange traded futures aren’t the main driver of prices, real commodity impacts are.
The futures market are an input into the commodity prices but rarely the biggest.
cme volume is tiny, can you cite your claim? I have not heard anyone claim that before, given the majority of option volume is on cryptocurrency exchanges which are operating using usdt.
The bitcoin reward also halves every 4 year, so even if price continues to appreciate, the effect is evened out by the fact that less is created every block over time.
Lastly, bitcoin mining to could sustained solely by using stranded energy, which would otherwise be unused. Flared gas in texas, for instance, could provide more power than the network currently uses. There is no reason bitcoin mining has to take power from anyone, and it will trend this way over time because the economics are in favor of finding the cheapest power source.
> Flared gas in texas, for instance, could provide more power than the network currently uses.
While the amount of gas that is flared off is immense (25-30% of the actual consumption of the US and Europe), the problem is that it is only flared off because there are no pipelines to transport the gas away and the amount that the small oil wells produce is too low to justify the cost.
If it were for me I'd force oil well operators to either build a small secondary pipeline for flare gas alongside oil pipelines or place a small power generator to contribute to the electric grid, but unfortunately "regulation" of any kind is seen as a bad thing in wide parts of the US.
>[...] and the amount that the small oil wells produce is too low to justify the cost.
>If it were for me I'd force oil well operators to [....]
Maybe it's too costly for a reason? Building power lines or pipelines to the middle of nowhere has economic and environmental costs as well, so top down legislation forcing every single well to do it might result in worse overall outcomes. For instance, the resources it takes to construct a pipeline/power line to the nearest town might be more than the electricity/methane that can be generated from the well.
> For instance, the resources it takes to construct a pipeline/power line to the nearest town might be more than the electricity/methane that can be generated from the well.
Well, there already is a pipeline for the oil product (so the additional overhead for a small gas pipe isn't that huge) and an electric grid hookup for the pump. That can be used even for a small-scale electrical generator.
>Well, there already is a pipeline for the oil product
not every oil well is hooked up to a pipeline. Some (many? most? not sure) are only serviced by trucks, presumably because they're too remote to profitably operate a pipeline for.
Yeah, but this exposes the issue with "bitcoin takes X percent of the energy production, therefore it's evil".
If you want you can build a generator near those wells. It's just cheaper to get the energy from somewhere else, because energy is fungible. A watt is not good or evil, it's the same as any other watt. Which means crypto energy consumption can be offset just like anything else, and is exactly as evil as any other convenience - driers, for instance, or flood lights, or inefficient heating, or anything else.
Focusing on crypto in particular says more about the author than anything else.
no it's not. A watt that's in the middle of south dakota, with no power lines in sight, is worth much less than a watt in southern california and is connected to the power grid.
>Lastly, bitcoin mining to could sustained solely by using stranded energy, which would otherwise be unused.
You can make that argument about any sort of waste of electricity, like blasting your A/C with the windows open. The problem is you can't guarantee that people are only using wasted energy. People don't mine Bitcoin to generously find a use for surplus energy. They do so for a profit. Also, people will require mining for Bitcoin transactions regardless of whether there happens to be surplus energy.
You cannot have PoW running on burning a free or cheap resource, the entire point of PoW is that the resource you are burning is costly, which pushes up the amount burned to close to the break-even point.
The amount of energy consumed now is not at its current level because of some fixed power requirement of the network. It’s there due to competition. If power was cheaper miners would run their ops using more power and the only thing that would change would be more energy would be wasted.
> ... stranded energy, which would otherwise be unused. Flared gas in Texas, for instance, could provide more power than the network currently uses.
I do like the idea of using energy that would have otherwise gone to waste. Or the concept of putting mining hardware in remote areas where there is energy to be tapped, but no customers for it. I wonder about all the steam that emits from a nuclear plant's cooling tower. It seems like such a waste to let all that energy just go up into the air.
One thing that troubles me is the various reports of theft associated with mining. I occasionally see various stories of energy and CPU-time theft. Plus there was that truck full of GPUs that was recently stolen.
I wonder what parallels could be drawn to the California gold rush. Theft was probably rampant then too.
You don't usually need to store energy for a significant period of time, just until the daily peak. Last I checked, the efficiency for charge + discharge was something like 70%, which, in any case, is much better than the 0% energy savings from using that energy to mine crypto.
However bad batteries are at storing energy long-term, I guarantee that bitcoin mining rigs are worse. It's hard for a battery to do worse than losing 100% of "stored" energy immediately to heat.
You are completely ignoring the fact that even if connected to the grid all power grids are structured to meet peak demand, and that there will always exist periods of excess power which, until bitcoin, had to go to ground.
Bitcoin makes use of energy that would otherwise be unused.
We don’t operate renewable grids in most of the world, and for most of the world renewable energy supply isn’t great enough to supply the dips without fossil supplements.
All that means is that in almost all scenarios bitcoin mining will be directly causing an increase usage of non-renewable energy. There are of course certain times and places where this doesn’t hold true and there’s a genuine surplus of renewable power that can’t be stored. But that’s an exception not the rule. Try and tell me with a straight face that the majority of power consumed by crypto is surplus renewable energy.
> Measuring energy use per transactions makes no sense
I am well aware of the difference between average and marginal energy use. This would be particularly relevant if the blocks were not full, but mined anyway, so that any additional transaction could've been included "for free". However, more often than not, that's not the case, but the mempool is non-empty, and the constraint (of max transactions per block) is binding. [1]
Thus, one can not trivially argue that the marginal cost of a transaction is zero.
Next, yes, my figures (165 TWh/a = 19 GW) from Digiconomist [2]) are at the upper end of the estimates, but other figures (eg Cambridge Bitcoin Electricity Consumption Index) estimate 100 TWh/a, with reasonable bounds of 36 to 376 TWh/a, so 12 to 28 GW, so are largely in alignment, modulo a factor of 2. (Note that your source is also within a factor of 3 of those estimates, pegging BTC at 0.2% of global electricity consumption.)
At any rate, the average cost is just preposterous, even if off by a factor of 3.
> Measuring energy use per transactions makes no sense, as mining energy consumption is not related to the number of transactions processed.
Sure, measure energy use per amount of money transferred. That's not going to be very nice either.
> Also a huge portion of the energy used by bitcoin would otherwise be wasted.
Oh, come on. Now you're just trolling. It would have been used for something else that most likely wouldn't be waste, like in factories or in hospitals and such.
It would not. Hardly anyone mines in Europe. Ironically power shortages are due to ESG initiatives that phased out power stations using fossil fuels and left unreliable power sources of wind and solar
Lightning channels are addresses owned by multiple parties where you pass around signed transactions that could be settled on chain at any time, but you choose not to because there is no need to.
When you want to settle everything, instead of submitting all the built up transactions, you can just make a single tx instead settling the final balance.
It would be like if you sent me a $5 check every day of the month, and at the end of the month I agreed to tear them all up if you just wrote me a check for $150 instead. The analogy is still poor cause a check can bounce, but theres no good way to cheat in this system.
This is all educational and I appreciate it (genuinely!) but is there any indication such solutions are actually used in this government sponsored usages?
