Assuming the share of global activity in the United States remains approximately 38%, we estimate electricity usage from Bitcoin mining based in the United States to range from 25 TWh to 91 TWh. That estimate represents 0.6% to 2.3% of all United States electricity demand in 2023, which was 3,900 TWh.13 This estimate of U.S. electricity demand supporting cryptocurrency mining would equal annual demand ranging from more than three million to more than six million homes.14 The low end of the range would equal annual electricity usage for entire states such as Utah and West Virginia, among others.15 Note that the CBECI-based estimates provided here are only based on Bitcoin and do not include other proof of work cryptocurrencies.
As to whether or not Bitcoin is “useful” or “how useful” it is, those are opinions so we both have ours and the market has its opinion and those can be different and that’s fine. The fundamental value of Bitcoin is it’s clear unyielding fiscal policy which is has kept to for fifteen years and its network effect (the ability to send/receive txes to others and the amount of people who will willingly transact in it), same as any other currency. People speculate on other currencies, instruments, and assets as well, that’s not a feature unique to Bitcoin. But I wanted to correct one notion on fees.
I wanted to correct one notion on fees: you are talking about main chain fees there. Bitcoin lightning payments are where I’m citing “cents per transaction”. Lighting is where most transactions are moving to now, it should be used for basically all scenarios except high-value transactions and long-term storage which would justify the cost of main chain fees. Lightning uses the security provided by BTC main chain, but store transaction data off-chain. You pay one on-chain fee to lock some BTC up in a lightning channel and then you can send essentially infinite transactions between you and any other partie(s) within that channel’s provided liquidity.
Bitcoin is massively decentralized, if it’s centralized, somebody at any point could have exploited that centralization by putting a gun to the heads whomever these people are who run Bitcoin and forced them to do something against Bitcoin’s protocol or even shut it down entirely. Who are these five groups you’re talking about? Mining pools? The mining pools simply relay the results of mining activity, the second one starts acting unethically all the mining power immediately switches to another pool. The pool itself doesn’t have any mining power.
Miners are accountable to the laws of physics, math, and economy, and they must follow the Bitcoin protocol. If they spend money on energy for mining, they have to sell some of their mined BTC to cover that expense. Additionally,if, for example, if they make a block with invalid transactions, it will get rejected by the rest of the network, even if that miners somehow had 100% of the network hashpower. The only real thing somebody can do with the majority of hashpower, which to date nobody has ever been able to obtain and gets more expensive and impossible every year, is a double-spend and the amount of resources required to obtain that much hashpower are so high that there’s really no way you can feasibly use that attack to gain money because anybody accepting enough money in BTC to trade for something that valuable is going to wait for a few blocks confirmation.
This very much depends on your use case. Bank wires are irreversible at a protocol level, so is cash, yet they are a popular way to send money. Irreversibility increases security for many use cases. If I sell an item on facebook marketplace, I want irreversiblity. I don’t want somebody doing a chargeback or handling a return on a $5 item, and I don’t want to pay a middleman for the cost of arbitrating those kinds of decisions, so a chargeback-free system is better for me as a buyer. If I’m buying it in person, I can inspect it and clearly see whether it works for not. Oranges from someones backyard or somebody set of weightlifting weights don’t need a 30-day return policy. If I am selling iPhones online, I can’t sell iPhones to high-fraud countries due to the risk of fraudulent chargebacks. If they pay me in BTC? No problem.
If you want disputability to be part of the transaction process, use a platform that supports it and pay the extra fees associated. You can use eBay, venmo, etc. It doesn’t have to be baked into the currency because it isn’t baked into our existing currency and that works just fine.
Theft or loss of funds due to misplacement etc is a concern regardless of which currency you’re talking about, this is ultimately a problem for the legal system to sort out. You can get robbed at gunpoint whether you have Bitcoin or USD. You can forget your wallet on the bus or lose your private key. If you are so bad at keeping track of your money that this is a recurring problem for you, have a custodian like a bank do it for you. Bitcoin can be deposited with any custodian you want. Put your BTC in a multi-sig wallet and require multiple people to sign off on every transaction. USD can’t do that natively without a third-party service. Bitcoin is better at protecting against some kinds of theft or attacks and worse than others. The kind of theft done by the banking industry and a constantly inflating currency supply where your dollar’s share of the whole decreases every year is perfectly legal, yet Bitcoin protects against it perfectly with it’s non-inflationary economic policy. How much bread or USD you can buy with your BTC may change over time, but your 1 BTC will always be 1BTC of 21 million total.
So is much of modern banking and trade infrastructure, hell, some of them have entire holidays they take off where you can’t access your funds! If you have funds on main chain and your internet connection goes down, it doesn’t matter, Bitcoin doesn’t care, your funds sit on main chain and wait for you next time you come online. You can send money to people who are offline. Even if the global internet basically splits in half, as long as there is a single node to relay information between the two halves, it continues to work. If the entire globe loses electricity for a day, nothing bad happens to Bitcoin, it just turns starts up again on the next day. It is incredibly resilient to unreliable electrical and internet situations. With lightning, as long as your wallet can access the internet once every few days, you can protect against attacks which could otherwise exploit your lack of access, though they are incredibly rare in the wild.
Yes, the market decides how useful it is, and given many online platforms that once accepted crypto payments have quietly dropped such features do to a lack of actual demand, and physical retailers, transit agencies, etc haven’t seen enogh customer demand to accept such payments when the vast majority of an already small number of transactions is between speculators rather than consumers buying real world objects.
Bitcoin and Bitcoin Lightning are centralized systems, in that they are a single central way of doing things that is dictated by the majority of the people processing the transactions. These rules have changed and updated over the years, and a 2024 mining node would not be compatible with 2012 one for instance owing to the migration from BerkeleyDB to LevelDB.
Similarly, while we’re not taking about Etherium, it is a very similar in concept and up until recently consensus mechanism, and was forked to reverse a series of whale transactions back in 2016. Ya sure, Etherium classic maintained the transactions, but its also a tiny fraction of the size and relivence of the one that bowed to whale and miner pressure.
Back in BTC land, as of 2023 Antpool and Foundery together own 53.4 percent of the gobal bitcoin hashrate, which pretty directly translates to mining power. You say that if a mining pool acts unethically it will be abandoned in short order, but historical precedent seems to suggest the opposite. If a majority of miners decide on an alternate transaction history, historical precedent is that they win. This is hard to do by outright threat, but historically easy to accomplish by greed.
Yes, if you are scamming people on Facebook marketplace, elemanating all after the fact consumer protections is great. If you are honest, then it is not an typical problem because consumers are limited in how they can use chargebacks, and small claims court can deal with such matters, where as proving jurisdiction can be vary hard in crypto transactions.
The vast, vast majority of people, especially common people, are consumers, and consumers should always be inherently protected over businesses.
You should not have to pay a premium for fundemntal transaction security measures like disputability, reversibility, and hold times. An attacker which gains acess to my account should also not be able to bypass such measures, seeing as that is both the most likely and most damaging form of attack.
You suggest that no one is selling high value goods overseas in fear of fraudulent chargebacks, but actual market behavior doesn’t seem to be effected by this, likely because most international transactions use backed in fraud and holding checks instead of credit cards.
Bank transfers also have a several day going period during which they can be reversed, large transactions often have to be approved in person, and even smaller yet major ones by phone. Someone hacks into my computer and gains access to my wallet it’s empty while I have no recourse, if they do the exact same thing to my back account it’s an triviality to get it reversed if it’s even possible at all. That is why it is unheard of for anyone to be extorted, hacked, or otherwise loose acess to their bank account directly, yet people loose access to their crypt wallets every single day.
Neglecting the absurdly of claiming inflation is theft, you realize that the actual total supply of currency is completely decoupled from inflation and deflation outside of hyperinflationary and hyperdeflationary death spirals, right? One would think that this would be pretty obvious to someone with a knowledge of BTC, as what was enough coin to buy me a pizza in 2010 is now enough to buy a mansion worth nearly half a billion dollars in 2024, and yet as you say the total supply of currency has remained largely the same between thouse two dates. That is an absurdly volatile shift value on par with a small nation in complete economic collapse, not something which is posturing itself as a serious gobal one world currency.
I don’t know about what holidays there are in your part of the world when you can’t use cash, checks, debit, or credit cards, but they don’t seem to exist here in North Amarica. Massive bank transfers sure, but thouse take days anyway to ensure that all or most of my money can not be stolen, being unable to loose that much instantly is a key security feature, not a bug, and one should never be in the position where one needs to loose that much money in a day.
Cash still works when i’m offline, as do checks, debit, and some credit cards. They can all be used when both parties are offline, no internet involved. I don’t give a shit what the monitary system backend is doing during a gobal apocalypse when the gobal internet splits in half, I care about being able to by food after a hurricane or when the store’s internet is down, and my card or cash can do that while BTC by its very nature can’t be used without acces to the internet.