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In a previous comment I referenced two North American blockchain mining companies. Based on their public finances for Q1 2022 they had expenses of at least $50 per transaction. With the average kWh price in the U.S. being something like 13 cents, and energy probably being the main expense, we should assume that 500 kWh per transaction is not an unreasonable estimate. For comparison, during January I spent 1,715 kWh total to heat up my condo (134 sq.m.), this was with an outside temperature around freezing, and before I bought energy saving thermostats, but was still less than just four bitcoin transactions. This is absolutely ridiculous! As for the article’s argument about having to look at energy mix: This is a bad argument, because if someone uses clean energy to mine bitcoins, it often just means that someone else will lack that energy, and instead get theirs from fossil fuels. We can only do transactions by adding blocks to the chain, and adding blocks to the chain is mining (see my previous comment for more details). A block is fixed in size, this is intentional because otherwise the size of the blockchain (ledger) may grow too quickly, and every single bitcoin wallet (and miner) has to repeatedly sync with the entire chain (as you need a full copy of the blockchain to validate a transaction). In an efficient market, energy consumption should somewhat follow price of bitcoin, i.e. if you can get 6.25 bitcoins to mine a block (with ~1,800 transactions) and one coin is $30,000 then you would be willing to spend just short of 6.25 × $30,000 on getting this reward = $104 per transaction or about 1,000 kWh (ignoring cost of hardware).

The blockchain is a Merkle tree, That is, a linked list of blocks with each block containing a reference to the previous block and a checksum (SHA-256 hash). The block contains new transactions and the proof of work is to calculate the checksum so that it has a certain number of leading zeroes, which can only be done by brute-force, e.g. calculate checksum, if it doesn’t have enough leading zeroes, modify the block, and try again. All miners compete about being the first to find a valid block, and on average it should take 10 minutes to produce a new block, if blocks are produced too fast or too slow, the number of leading zeroes required in the checksum is adjusted, i.e. the difficulty of the work is adjusted. A miner who adds this block will include a transaction to themselves, where they are given the current mining reward. I am curious, how do you think it actually works? And from where do you get your information? The bitcoin white paper is an easy read and probably the best source for how it works ????

Mining is adding transactions to the blockchain, and with a proof-of-work blockchain this must be expensive, as the security relies on it. I would even say that to have a secure proof-of-work blockchain, it must be more expensive to add blocks to the chain, than the value being protected (i.e. the transactions in the block added). This is not just theoretical, “smaller” blockchains (like Bitcoin Gold) have suffered majority attacks. In practice what happens is that I transfer $10M worth of crypto to an exchange, convert it to another coin, and when I have moved these coins away from the exchange, I revert the transaction to the exchange, which I can do, if I can produce blocks faster than the other miners, which comes down to how much energy does it take, to produce these blocks. The reason that making it more expensive to add transactions, than the value of these transactions, is currently working, is because new bitcoins are issued to the miners, so in theory all holders of bitcoin pay for these transactions (via inflation), and so far, this has not been a problem, since despite issuing 27,000 new bitcoins per month (paid to the miners to run the network), price was (until 6 months ago) still going up.

Like an insurance where you have paid the premium for 20 years, and now the house burns down, but they don’t pay out anything. It was a good insurance for all the years where the house didn’t burn down ????

That would be possible, yes. But that just means the number of people holding majority of the coins is even smaller. When I (not the one you replied to, but previously made a statement) talk about “the one percent [in crypto]” it is based on who actually own/control the major exchanges, stable coins (which is the lifeblood of he DeFi ecosystem), “applications”, and who provide the capital for many of the schemes and thus make a lot of the money, e.g. by getting pre-mined coins before an ICO, etc. It seems to me that a lot of the crypto proponents are completely blind to what actually goes on in the crypto ecosystem. I think they are too busy watching chart porn on YT or being dazzled by influencers and TV celeberties who talk about their new favorite coin… In a way, it is really sad, because a lot of these people feel the existing system is unfair to them, e.g. high bank fees or them hearing about “bank bailouts” a year after they heard about multi-million dollar executive bonuses, or that we “print money” that prop up equity prices that benefit the rich, because they own majority of these equities. But crypto is an unregulated negative-sum game; there will be far more losers than winners, and there is effectively no consumer protection or much action to take, if you end up losing everything e.g. to unsustainable staking schemes like Luna — let me just remind people, the founder and early investors in Luna did make millions, I think it was 23% of the coins which were sold to investors at $0.19 or so, and this coin did go above $100, so the investors probably made x100-x500 — but retail investors probably had a collective loss in the billions! This was just transfer of wealth from retail investors to Do Kwon and his investor friends, and there are lots of Do Kwons out there — Richard Heart probably being my favorite, as 5+ years ago he talked about all these scams, but then he realized, he should just create his own (HEX Coin) and is now at least a multi-millionaire, but has managed to scam people in a way where they still don’t realize it (because of his “delayed gratification” scheme).

It’s a nice idea, but that boat has long sailed. Crypto has its own set of one percenters, and while you can accuse Wall Street and company of many things, a lot of the whales in crypto have much worse track records, they are just recreating banking without the regulation. As they say, the problem with trustless finance is that it attracts all the people that you cannot trust.

But the merchant does not want $100 worth of LTC sent to some wallet, they want $100 deposited to their bank account. So how do you achieve last step? Exchanges normally won’t pay out to accounts not in your name, also, you need to include the fee for converting back to USD, so I think it is clear that Kasikorn’s 250 baht fee is preferable.

And -72.12% YTD, not sure what your point is.

No, that is a wrong summary. What I was saying is that you point to one problem you had, here it was Krungsri’s high transfer fee for international transfers, and then you use that to justify crypto. But crypto does not actually solve your problem. I.e. what does it cost you, with your funds in Thailand, to pay a $100 invoice in another country? Can you even do it? That is my point! Furthermore, there already are many cheap/free ways to move money internationally, so if you pay a high fee to do this, it is not because we need new technology, like the blockchain, because this problem is already solved. In fact, as I pointed out in a previous comment, the cost of a single bitcoin transaction is at least $50-$75. This is currently subsidized with mining rewards, but it basically proves that blockchain, in its current form, will not give us cheap international transfers, on the contrary, it is much more expensive than the system it wants to replace. And, somewhat repeating myself, but crypto is a closed system, just like PayPal is a closed system, you need on/off ramps when it comes to paying a $100 invoice abroad, so you are not solving anything by using “crypto rails” to move the money. Edit: And regarding closed system, if your answer is “but the merchant should just accept crypto” you might as well have said that they should just accept debit/credit card, PayPal, or that the payer should use a bank that does not charge $50 for a simple IBAN transfer.

To hedge against inflation and survive a real crisis I would stock up on freeze dried food and propane gas — price of this will at least follow inflation, it has very long shelve life, and I won’t need to find a broker to sell my gold when <deleted> hits the fan ????

Kasikorn charges 250 baht (for transfers below 20,000 baht). You might get it cheaper via DeeMoney, but I have no personal experience with them, just heard good things about their service and fees. This isn’t about SWIFT though, but a combination of greedy banks and the capital controls of Thailand that probably limits competition from third party money transferers. I think you have previously implied you are Russian, so with current sanctions, your options are probably more limited, but I have recently become a customer of Revolut. I absolutely love this product! I have a single IBAN that can receive most currencies, and then I will just have a balance in that currency, plus I can exchange money at spot prices. For someone who travels a lot and have income and expenses in multiple currencies, it is just phenomenal! They also have some other really nice features, for example I can send you a money request, and you can pay me with your debit/credit card or even Apple/Google Pay, and neither of us pays any fees for this.

Has it really? During the pandemic, the price of gold spiked initially but has underperformed now that inflation has actually arrived. Anything that does not get cheaper to produce, has minimal storage costs, long shelve life, and for which there will not be decreasing demand, is a good hedge against inflation. Therefore real estate would probably be my choice, if I were to hedge against inflation (via a real estate investment trust, so that my investment is easy to convert into cash). But since economic growth generally outpace inflation, I would not just want to hedge against inflation, I want to put my money in productive assets and beat inflation — maybe when I get older, I will be more conservative and happy with I Bonds ????

What a ridiculous straw-man! Domestic bank transfers are free and instant in most countries, similarly many European banks offer free and instant SEPA payments, i.e. within the Single European Payments Area. If you need to transfer cross-country outside SEPA there are many options, Wise, Revolut, WU, PayPal, etc. which are nowhere near $50. Both PayPal, Wise, and Revolut are free if you transfer to users with an account, and I think Revolut gives me 3 free international payments per month, but I have never needed them. If you pay $50 for SWIFT transfers, it’s not due to lack of cheaper options/banks. I think you will actually have to struggle, to find a bank that actually charges this much for SWIFT transfers. When I was banking with Wells Fargo ~10 years ago, international wire transfers were $20, and I am quite sure things have improved in the U.S. since then. Crypto OTOH is not free to transfer, and transfer fees can explode, just take the Ethereum gas fees earlier this month with the Bored Ape stuff, or the ConstitutionDAO which failed where people had to pay hundreds of dollars in fees, and then when they failed to buy the constitution and people wanted refunds, they had to pay fees again to get their money back, someone even ending up paying more in fees than the refunded amount. So absolutely terrible example you are giving for why crypto has advantages. Also because you can’t actually pay a $100 invoice with crypto, you need an off-ramp which again will not be free.

This is a pretty well researched article, talking with both proponents, critics, and trying to “trade crypto” (on Uniswap): https://www.vox.com/the-goods/23071245/bitcoin-price-crypto-ethereum-nfts-defi-stablecoin

I would argue it has moved an enormous amount of wealth. Something crypto investors fail to understand is that profit must come from somewhere. If I buy stock in Pfizer, and they pay me $1-2 per stock in annual dividend, then that money is from the profit they made by selling medicine. If I bought the stock 3 years ago for $35 and it is now trading at $50 then that is because 3 years ago we had no idea about all the revenue Pfizer would be making from selling their Comirnaty vaccine, which in turn should increase their annual dividend / company value. Of course all that profit made on the Pfizer stock comes from people buying Pfizer products, so one could argue that here we are also just moving money. The big difference is that those who buy Pfizer products (or goods and services from any company) hopefully get something they need/want for their money.

I am just asking what it does, where the value comes from, what these use-cases are, and the response is: You just don’t understand. You think this is how scientists convinced people that the Earth was round? No, they presented a convincing model.

Here is the full context, I’m having a hard time seeing how that is different from anything skeptics have said for years now.

But they were making something. They solved problems for people, they had a business plan, and if you bought their stock (i.e. help provide the capital required to build out their business), you would be entitled to a share of future earnings, once the business was raking in money. Please tell me, if I buy a bitcoin today, what am I actually buying? There is no cashflow and there never will be. There is no ownership in anything, and there never will be. There is no business plan, just hype and FOMO makes people buy.

I see you realized stocks (ownership in companies with cashflows) are very different from crypto and is now trying with “fine art”. But comparing crypto to “fine art” is also misguided: Most people won’t even pay the museum entry fee to see a Picasso painting, so it is hardly worth millions among the broader population. Only people with far too much wealth chase these rare collectables, look at how few actually attend the auctions, we are talking about a market for the ultra rich. Nobody is trading art on margin 24/7, as we see with crypto. Crypto is closer to betting on horse racing, except most people who gamble know the odds: When we go to the horse track, we are saying WAGMI (we are all gonna make it).

And how many threads were started on this forum telling people they should invest in stocks? How many people were belittled when they said that stocks was not a guaranteed way to make money? And people who started “last two years” are “devasted”? Really? The correction started January this year. And very very few people mortgage their house to go all in on stocks, but plenty seems to do this with crypto. Also, with e.g. Luna and UST, we are talking about a 100% loss, that is why they are suicidal.

Once again, stocks are ownership in companies: Netflix is losing subscribers, Apple warned about 8bn less in revenue next quarter because of supply constraints, Coinbase had a loss last quarter because of less trading, companies in Europe are paying 2-3 times as much for energy and are seeing supply constraints, etc. All this affect company profit, so many stocks are down because a company that has lower earnings is worth less. Tell me, why is crypto down? Most other assets are up, like weed, oil, gas, steel, gold, etc.

Talk about the pot calling the kettle black. Over the last year, countless threads were created in the business section, the narrative always seemed to be the same: invest in crypto because of rising inflation, investment in the ecosystem by major banks, buy-in from TV celebrities, Thailand being crypto paradise, etc. I.e. invest now, otherwise you will miss out, basic appeal to FOMO. Skepticism was meet with “have fun staying poor, boomer!” or “you are just bitter because you missed the boat”. Yet here we are, crypto is at a 1+ year low, it has not disrupted anything, no-one is using it for anything but ponzi schemes. But still, when crypto proponents are faced with critical questions, like what are the fundamentals that give it value, we are just spreading “doom and gloom”. Make a proper case for crypto <removed>

Typically less than 2,000. Though for the energy usage, this article estimates that Marathon Digital Holdings and RIOT Blockchain use $21,000 and $31,000 per bitcoin mined. These are public (blockchain mining) companies, so their finances are public, and these numbers are from Q1 2022. Each block generates 6.25 bitcoins, let’s just be generous and say it holds 2,500 transactions, so that is $50-$75 per transaction, that is the actual cost without adding any profit to RIOT or MARA — and that assumes 2,500 transactions, looking at the average over the last 30 days, it was only 1,800. There really is no doubt: This is far too expensive to “bank the unbanked” (ignoring here the on/off ramp issues that “unbanked” people will face). Which has its own set of problems, and is why Etherium keeps postponing switching to PoS.

He was charged in THB and the merchant received THB, and it went over the traditional VISA payment rails. He brought up “paid with crypto” to imply adoption, therefore this matters. He is still charged in fiat and using “legacy” payment rail system, because actually, this is more efficient.

Even people in r/CryptoCurrency do not understand how crypto is actually useful.