Sorry, didn't read the article, and I'm not exactly sure if they mean that he's actively trading BTC. Maybe he's just buying it from his phone when he sees dips. But the important point to stress is that its far harder to buy something for your country on the open market than it is if you have access to just print money and instantly debase your entire population. You can perhaps make the claim that the holdings are down 25% or more, but how much money has the US printed in the past 12 months in order to keep the ship afloat? If you ask me, he is doing it the honest way, paying what the going rate is. When you have an unlimited printer and the ability to suppress the interest rates to zero so that your money essentially costs nothing, or course you have the upper hand.
You clearly disapprove of the U.S. currency, despite the fact that a dollar today can buy you pretty close to what a dollar could buy you this time in November. Meanwhile you want to replace this horrible awful bad currency with one where one unit of currency in November has inflated such that it can buy 40% less than just 2 months ago. That's a 240% annual rate of inflation! And you advocate we should all blow up our entire economy to switch to this because what, it's "honest”? Seriously?
Remittances might not be concerned but the banking industry as a whole is suspect by the fines they have accrued, the fees that they charge and the bailouts that they received without any accountability of the 2008 sub-prime mortgage crisis. Let's not forget the libor scandal or the wrist-slap received for manipulating markets. BTC was born from that crisis as a direct response and 1 BTC is still equal to 1 BTC. There is no debasement that is occurring as it has a fixed curve of emissions/inflation until 2140. While I agree with you that the fluctuations in buying power as it is expressed in usd is volatile, 80% of it's money supply didn't get printed within the last 2 yrs. https://techstartups.com/2021/12/18/80-us-dollars-existence-printed-january-2020-october-2021/ If you really want to compare energy usage then we should include all the brick and mortar energy costs that go into legacy tradfi infrastructure and the petro-dollar endless war machine that supports it.
When I am an El Salvadoran and my entire income could buy 10 lbs of rice in November and 5.6 lbs of rice in January, your protestations that there is no debasement of the currency I'm using is going to get you a punch in the face for sheer stupidity! Your entire argument is circular, 1 USD is still equal to 1 USD between Nov and today as well, the only difference is the number of USD that could buy you 10 lbs of flour in Nov can buy you 9.95 lbs of rice today. There is absolutely no structural feature of BTC that prevents it from radically inflating or deflating, and that's the whole point of why it's structurally unsuitable for use as a reserve currency, or anything other than first world kids speculating. Longing for a world where we make no attempts to match money supply to the economic situation is suitable only for those who don't grasp the most basic of macroeconomic concepts. And please, do the math on the cost to run our current banking sector, let me know what you come up with. I'll do my part, BTC alone uses 200 TWH of electricity now, and it's market cap is roughly $800B. The world M2 is about $40T. If BTC took over M2, it would have to grow by 50X, which means it would use 10,000 TWH of electricity (its actually much worse given how the BTC algorithm difficulty increases over time). Right now the entire world uses about 23,000 TWH of electricity. So we would have to produce 50% more electricity than the entire world now uses to reach your utopia. Or another way to think about this, if your claim is correct than the world's banking sector would have to consume nearly half of all electricity used in the entire world! That's clearly absurd. And once again, 99.99% of the world doesn't think BTC is solving anything that's actually a problem, do you think they're really going to be OK with wasting that much energy on it? The whole BTC energy use is a dirty little secret that's going to absolutely tank any talk of crypto as a real reserve currency once word get's out about it, so I understand why you're concerned. But you're going to have to do a whole lot better than that feeble attempt at diversion! And let's start with El Salvador, are you really still advocating that a country that imports a good bit of their electricity and makes a good bit of the rest with imported fossil fuels squander it mining BTC, or do you now agree that was a dumb statement borne of ignorance? Perhaps you should stop making such statements until you do a little research on what you're saying, you're letting these fan bois make you look like an idiot when you spout their talking points. You're smarter than that, I can tell from your posts. A couple of other interesting tidbits about the ridiculous energy footprint of BTC
You are conflating the relative purchasing power of btc/usd pair with government debasement of currency. Debasement is when a currency supply is increased and came from governments in the past substituting more common base metals for precious metals in their coinage. In the El Salvadorian example, they can receive their usd and not participate with storing their value in btc. Yes, 1 usd is 1 usd but it's purchasing power has diminished substantially. That's currency debasement. In comparison, BTC's value has steadily increased on a long-term basis in comparison to usd. I'm sure you've seen this graphic. I grant you that a decade isn't really that long of a time especially as it applies to sound money/hard money. https://www.visualcapitalist.com/purchasing-power-of-the-u-s-dollar-over-time/ Here's a fairly recent report on energy consumption comparing btc vs banking. It's about 1/2 of tradfi and that doesn't include the war apparatus. https://www.nasdaq.com/articles/research:-bitcoin-consumes-less-than-half-the-energy-of-the-banking-or-gold-industries We're on different sides of the fence on this one. You're a pretty bright guy, articulate and well-reasoned. I'm not a fan though when you devolve the dialogue into ad hominem. Maybe someday crypto will make sense to you, maybe someday crypto will make no sense to me. Maybe it's more an "and/also" future and not so much "either/or". For me, it makes sense to question my legacy assumptions and train myself to be more agile rather than fossilize my thinking. I could very well be wrong. But rn, I've been buying all day a variety of projects during this sell-off.
As I pointed out, to the guy in El Salvador or really anyone anywhere who has the purchasing power of their currency vary by 40% in 3 months in either direction could care less about your dissertation on substitution of base metals in coinage. That kind of currency fluctuation makes any kind of business absolutely untenable. We already talked about getting 5.6 lbs of rice for the same amount of BTC as you could get 10 lbs 2 months ago. You can't ignore that in the real world, again getting punched in the face for causing that would be a good result for you. But it's just as bad in the other direction. Imagine I run a company that makes bikes and I buy enough raw material to make 50 bikes for 1 BTC today. BTC goes up 50% in the next two months while I'm building the bikes. Now I can only sell those bikes for a total of .75 BTC. I lost .25 BTC even if I ran my business perfectly. Now as a small bike shop owner I need to do daily calculations and hedging of my inventory, in-progress work, payroll.. in an exponential increase in complexity that got me what, some nebulous benefit I don't value at all? Again, a swift kick in the nuts from everyone impacted by advocating such a system would be a good outcome for the guy pushing it. 1 USD = 1 USD and it's purchasing power is very predictable and doesn't change radically from day to day, month to month, or even year to year. Long term devaluation of a few percent has pretty much zero impact on anyone in the real world if it's gradual and predictable. Again you're a solution looking for a problem that doesn't exist, and in the process creating problems that are not only far worse but that would plunge the world economy into chaos. So again you're mindlessly repeating the fan bois without stopping to actually think about what they're saying. Let's assume this source is correct, and "Bitcoin consumes 113.89 terawatt hours (TWh) per year, while the banking industry consumes 263.72 TWh per year." As I pointed out, BTC is only 1/50th the size of the rest of the money supply. That means that it's energy use would have to grow by 50X (and in reality substantially more due to the complexity setup and the number of transactions required), if it supplanted current currency. So if it currently uses 113.89 TWH it would need to use 5,650 TWH if it supplanted the banking industry. So the article you quoted is implicitly saying that Bitcoin would need to use roughly 21X more power than the banking industry if it supplanted it! Use your brain and think man, again you're better than this! False equivalency is the modern day intellectual scourge. There's simply no question that El Salvador squandered a good chunk of their foreign reserves specifically by buying BTC with it, no two sides to that. There is no question that El Salvador imports a good chunk of it's power and makes another good chunk with fossil fuel and you're advocating for them to squander it mining BTC, no two sides to that. There's no question that mining crypto is hugely energy intensive by it's fundamental design and that supplanting world currency with crypto would dramatically increase energy use with nothing to show for it, that's beyond dispute. Crypto makes sense to me, or at least blockchain does. As I've said several times, I believe even in this thread, I think it will play a useful role going forward and there are big opportunities in that. But there's no question that it's completely unsuitable for a role as a reserve currency and that it's energy use makes it completely unsuitable for worldwide adoption as a currency. El Salvador which the crypto fan bois were once crowing about as a prime example of why we should switch our currency to crypto has just aptly demonstrated that. It would be in denial to see the current debacle there as anything else.
I have a family member who's a sociopath A sociopath pretends to be interested in a fair discussion, but all they do is waste your time, always sneaking in a snide remark, an underhanded attack, a subtle hint, a sneaky conclusion, lots of fallacies in their arguments, strawman, reductio ad absurdum and all kinds of psyops, their favorite is guilt trip as they do not feel guilt or remorse sociopaths are the evil in the world The bottom line is that they are not arguing in good faith. They just want to waste the time and effort of others The life of a sociopath has no meaning, they do not feel empathy, sympathy, compassion or love or guilt
All the alternative chains are how BTC currently scales. The future is cross-chain interaction and composability. While this current sell-off certainly gives more credibility to your perspective, my DD has yielded a different conclusion. The energy used to secure the world's money supply is arguably THE best use for energy. BTC, simply by being, creates a reference point. This reference point is what illuminates fiat debasement. In the history of currency, there has been no fiat reserve currency that has lasted longer than 100yrs. Some folks have an issue with wikipedia, but their entry on the subject covers the basics; https://en.wikipedia.org/wiki/Reserve_currency Also came across this informative site on the changes of the dollar throughout it's existence and transformations. https://www.uscurrency.gov/history As for energy use, Dan Held's thesis is the best I've come across to date;
Listen, you're talking about increasing the energy production of the entire world by 50%! I don't know how many more times or ways I have to demonstrate that massively more energy would be required by a world with crypto as the reserve currency. You can't just keep saying it's more efficient than the current financial system without any support when it just obviously and clearly isn't. Repeating false information over and over, or quoting others making the same false assertion, doesn't erase any of the facts I've laid out. If you have an issue with any of my math, I'd love to see it. If not, you need to accept it and stop this nonsense of repeating that it isn't so because you or someone else says so. That's massive, and yes, those of us who share earth with the crypto miners do have a say in if we want to increase the pollution and environmental degradation inherent in energy production, not to mention the marginal price increase that impacts all of us due to increased demand for electricity. It's not a moral judgement, it's just a policy decision. Do we make that massive increase to solve a "problem" that most of the world doesn't believe is a problem, or not? Given that at least nominally a good chunk of the world lives in a democracy, and most of the world would think what you're proposing to be utterly absurd once they understand the implications, it simply doesn't have much of a chance of success, that's all. Listen, I am in the electricity generation business, I actually would greatly benefit from increasing electricity demand by 50% But because I understand what that entails, I think it's a stupendously stupid and naive idea that has no chance of happening. And just give it up with this whole "debasement" thing. Talk about invalid moral judgements! I can tell you that in the history of the world there hasn't been a currency that inflated and deflated by 50% in a few months that led to a stable and healthy economy for the country using it. Throwing out buzzwords like "cross-chain interaction and composability" doesn't change that, how exactly would that have changed anything for an El Salvadoran using any basket or cross-chain or whatever of crypto over the last 2 months? On the contrary, a currency which is inflates, or to use your moral judgement term is "debased" by 5% per year has led to unparallel economic growth and prosperity across the world. Ironically given the quote you chose; you've assigned a moral value to moderate steady inflation and decided that it is per se bad. That's the unfounded assumption you need to address if you want to have a serious economics conversation.
By your comments it appears that you didn't take a moment to assimilate the facts and figures of Held's article. As for the El Salvador example, to repeat, they can elect to receive their payment in usd vs btc. They have a choice with every transaction. Strike uses the BTC network to reduce cost of money transfers when compared to the legacy system. I understand that to you, with you own DD have come to a different conclusion and that this is a solution in search of a non-existent problem. Never-the-less, even though I'm failing to communicate the value proposition of the BTC network to you, that's ok. You need someone to buy the BTC that you are selling, that'll be me and others who have seen satoshi's vision. Perhaps we can pivot the discussion towards the blockchain tech that does pass your DD. Are you acquainted with any projects that are worthy and that have passed your criticisms?