Since many folks are tagging me on this thread, here’s what I think about it.
1/ The argument isn’t that bitcoin is entirely useless, the argument is that cost-benefit tradeoff for it is *worse* than current systems such as banking or the Visa network
2/ Comparing bitcoin’s energy consumption with Gold mining is a false comparison.
Once gold is mined, it exists forever. If gold mining stops today, no additional energy will be consumed but gold transactions will still keep happening.
3/ If bitcoin mining stops today, no transactions can take place.
So the bitcoin mining has to keep happening forever for bitcoin transactions to occur.
4/ It’s true that bitcoin miners have incentive to seek out cheapest sources of electricity, but so does anyone who needs computation.
The point is that if we have dispensable computation and electricity, should we be spending it on bitcoin or things like protein folding?
5/ “Coins need be issued only once so it’s best to issue when electricity is cheap”
This just sounds wrong. Bitcoin derives value from resisting a 51% attack and that requires constant mining, no matter how few coins are getting minted.
2/ The key idea explored in the book is that the world has witnessed significant progress over the last few decades, but most people are unaware of that fact because they hold distorted views.
With stock markets all-time high, are we in a bubble?
The following chart suggests we might NOT be.
(a short thread explaining why)
1/ What I did to investigate this was to compare S&P 500 with M2 Money supply.
M2 is roughly representative of how many dollars are in the economy. As an economic stimulus for covid, unprecedented new money is being printed by the US Fed.
Is that causing rise of markets?
2/ If you divide S&P 500 (market index) with M2 money supply, you get the chart I attached.
Notice:
The ratio reached its peak during the 2000 dotcom bubble, and the current levels of the ratio are much below that (although they're reaching the 2008 levels)
1/ It’s common for entrepreneurs to cast a wide net early on and imagine their market to be huge.
The logic goes something like this: if the market is worth a hundred billion dollars, then even if 1% of it is captured, the company will be making a billion dollars.
2/ All this sounds good in theory but in practice, it never works this way.
Why would the market leader – the big fish in the ocean – let you take even 1% of the market?