Thread by @smdiehl

Today let's deconstruct the argument concerning bitcoin's absurd energy waste compared to the financial services sector, because this is a very silly bait and switch argument comparing apples and oranges. 🧵 (1/)

Last week I discussed why #Bitcoin is a conspiracy cult based on anarchist fantasies, populist resentment and the idolatry of greed. (2/)

https://twitter.com/smdiehl/status/1358860077168537610

So the common argument for the energy waste of PoW mining goes something like this:

> Bitcoin uses less power than the global financial system. Therefore we should stake our horse to the new financial system rather than the legacy one. Because bankers are bad.

(3/)

The fallacy in this argument is based on the single word "system".

Yes, an entire sector of the global economy consumes more resources. Because it does *vastly* more things for *vastly more people. (4/)

Bitcoin is a single speculative psuedo-asset and it's silly to compare that against the output and services of an entire sector which is 8% of GDP.

Simply consider all the services this sector performs. (5/)

Banking, mortgages, commercial loans, trade finance, insurance, domestic payment infrastructure, ATMs, underwriting, brokerages, market making, currency exchange, online banking, credit cards, debit cards, wire transfers, securities issuance, remittances, ... (6/)

Bitcoin is one thing:

You buy coins from a shady exchange for Euros. Then hope "number go up" so you can sell it for more Euros.

That's it. (7/)

Some people will make a hand-wavy argument that some Defi or "decentralized finance" tech can replace all existing services. This is magical thinking and abusing terminology to refer what is classically known as 'high yield investment fraud' as some form of "innovation". (8/)

Now, what is true is that people are absolutely justified in being angry at a subset of investment bankers responsible for the 2008 financial crisis. Fuck them, they should be in jail. (9/)

However the financial services sector provides is a vast amount of companies and services that sustain our personal and professional life. Painting an entire sector of millions of people with such a broad brush is wrong and simply ignorant. (10/)

Janice the branch manager at the First National Bank of Omaha wasn't trading credit default swaps, she was making loans to farmers to buy tractors. (11/)

Bill the sysadmin at Visa wasn't selling derivatives to hedge funds, he's running servers to do fraud detection so when use your credit card to buy tube socks on Amazon you don't get a decline. (12/)

What is absolutely true is there is plenty of room for reform, transparency, greater inclusively in financial services. Groups like @realbankreform are examples of effective consumer advocacy groups pushing for more regulation and protections. (13/)

The heart of this argument is the central fallacy of #Bitcoin. It really wants you to believe it's a revolutionary tech that can change the world. But when we stand back and look how it's really used all we find is gambling and speculation.
That's not worth the energy cost.
/fin