Is bitcoin inefficient?

A while ago I reported here a short list of incorrect statements about coin that we unfortunately tend to repeat.  There is one that I left off the list.  Perhaps I left it off because it deserves it's own post.

"Bitcoin is Inefficient"

We are surrounded right now by such gross inefficiencies it boggles the mind.  Inefficiencies that are motherfucking insane on a stick.


Do you see all those millions of watts of electrical energy going off into space as visible and UV light?  Don't worry about it, someone elseTM pays for most of it.

This one represents one of the worst bits of news we have to inform the our children (that's you now, if you don't know about this yet) in terms of gross mismanagement of planetary resources.  If you dare, see if you can figure out what the total percentage of all burnable hydrocarbon resources available to humanity (all generations thereof) have been lost due to this inefficiency.  Probably a pretty decent chunk of that 400ppm too.

Paid for with coinbase transactions and fees.


These inefficiencies are without exception and without possible salvation unmitigated disaster.  Massive fascist buildup on borders which crisscross the planet weigh massively on all economies and produce zero gain to productivity.  What do you think, is that efficient?

You see when you're mining, there's no way to call in sick.  There's nobody there who you can sleep with to get a raise either.  There's no "Well I know somebody who works in a giant glass building we can have lunch with, he knows Mr. SHA256 personally.  He could get you the next few blocks for your project, and slip a few extra in on the side."

Lets address some arguments directly.  Do you think mining is inefficient? Then don't do it.  There's a reason this is efficient:  if you do it inefficiently you lose.  There is no minimum amount of work required, the network adjusts.  The product is delivered to market with zero transportation costs.  There are no more inefficiencies caused by hidden production because production is publicly verifiable.

Could proof-of-stake use even less power to secure a network to the same level of value per time?  Perhaps.  It hasn't happened yet though.  However if the money supply is inflating at a fixed rate forever then we need a computer online all the time staking just to break even.  That can be seen as inefficient compared to a paper wallet.


To be fair, it could be that there is not enough context to know what was meant by efficient.  Sure, your android is an inefficient miner.  Sure, woodcoin is not an efficient database.  Mining ops where someone elseTM pays are unlikely to be viewed as efficient. VISA does not provide a unit of account so there isn't much comparison there.  You might as well compare coin to a tree, which also doesn't offer a unit of account.  Yup, show me a tree, and bitcoin looks like a coal fired steam engine.  But hey we got the most efficient boat on the ocean and you are going to compare it to a dolphin?

Is gold mining efficient?  All I'm saying is, sure nothing's perfect.  But lets do an honest appraisal of the alternatives.  Bitcoin is not exactly inefficient, is it.

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