Digital currencies are fundamentally changing the way we think about money and banking. The rapid rise of cryptocurrencies like Bitcoin, along with the
Higher transaction fees: It is totally possible to send literally any amount of money around the world in a cryptocurrency for less than a penny on multiple different cryptocurrencies. You can send this amount of value from anywhere with an internet connection at any time of day or night and the receiver will have access to it very nearly instantly.
slower transaction times: Transactions on multiple ethereum layer two networks such as polygon or other layer one networks such as solana settle very nearly instantly and on bitcoin seven blocks is considered fully final with no possibility of reversal which takes 70 minutes and on Monero 10 blocks is considered final, which takes 20 minutes. A credit card transaction takes 3 days to fully settle, as does an ACH transaction.
Environmentally wasteful: How many resources does the banking sector use to build bank branches requiring mining of stone, etc. Electricity, gasoline to use armored cars, gasoline to transport employees to work, etc. Proof of work mining does indeed require a lot of electricity, but it also requires a lot of extremely cheap electricity. And a lot of extremely cheap electricity is renewable electricity such as hydro and solar. So a lot of proof of work mining uses these renewable resources. There are also other security mechanisms such as ethereum with the proof of stake method, which uses very little energy. And there are other more novel proof mechanisms such as proof of burn, etc. that also use very little energy.
Consumer protections: Any crypto commerce site worth its salt implements multi-signature escrow so that there are three parties to a transaction, the buyer, the seller, and an arbitrator if they are required. Since you can self-custody your cryptocurrency in your own wallet, you do not need to worry about protections from fraud, such as credit card theft, because it’s a push-based method and not a pull-based method. Some thought must be given to holding large amounts of what is basically cash, but that is easy enough to do through multi-signature accounts and keeping only a small amount of crypto on a mobile wallet or laptop at all times.
And for 3, pick a more environmentally friendly cryptocurrency, like Ethereum. Monero is probably also way more efficient than Bitcoin since it’s not profitable to mine, so you only get enthusiasts doing it instead of big mining operations.
It may be profitable to mine Monero, but the fact that it uses an algorithm that is strictly available on CPUs only helps keep the power usage way down because you can’t make specialized equipment and put it in a single location. That way, nobody has an advantage over anybody else except for the pure amount of CPUs they can purchase. But literally anybody that has a mobile phone or a computer of any kind can mind Monero if they wish.
Right, and all of that is why it’s unprofitable to mine Monero. So you end up with enthusiasts mining because they care about the platform, not because they’re trying to make money. Transaction costs stay low because there are a lot of enthusiasts, and energy use also stays low because mining farms aren’t really a thing, so there’s a lot less waste. I imagine a lot of people run a miner on a system that’s going to stay up 24/7 anyway (e.g. NAS or VPS that serves other data), so there isn’t really an increased amount of energy usage.
It’s nearly impossible to estimate how much energy it uses though, but I wouldn’t be surprised if it’s a blip compared to Bitcoin, even adjusted for total number of transactions processed.
Yep, that’s a totally fair point. I mine on the same machine that runs my node that I connect my mobile wallet to over tor and it runs a couple of other services for me, so I have to leave it on all the time anyway.
Yup, I’m planning on doing the same. I have a VPS that reverse proxies to my NAS, both of which run 24/7 and have very little CPU load normally. My VPS doesn’t allow crypto mining, but it probably allows running a node, or I can just pass it through to my NAS.
False, false, and mostly, if not entirely false.
Higher transaction fees: It is totally possible to send literally any amount of money around the world in a cryptocurrency for less than a penny on multiple different cryptocurrencies. You can send this amount of value from anywhere with an internet connection at any time of day or night and the receiver will have access to it very nearly instantly.
slower transaction times: Transactions on multiple ethereum layer two networks such as polygon or other layer one networks such as solana settle very nearly instantly and on bitcoin seven blocks is considered fully final with no possibility of reversal which takes 70 minutes and on Monero 10 blocks is considered final, which takes 20 minutes. A credit card transaction takes 3 days to fully settle, as does an ACH transaction.
Environmentally wasteful: How many resources does the banking sector use to build bank branches requiring mining of stone, etc. Electricity, gasoline to use armored cars, gasoline to transport employees to work, etc. Proof of work mining does indeed require a lot of electricity, but it also requires a lot of extremely cheap electricity. And a lot of extremely cheap electricity is renewable electricity such as hydro and solar. So a lot of proof of work mining uses these renewable resources. There are also other security mechanisms such as ethereum with the proof of stake method, which uses very little energy. And there are other more novel proof mechanisms such as proof of burn, etc. that also use very little energy.
Consumer protections: Any crypto commerce site worth its salt implements multi-signature escrow so that there are three parties to a transaction, the buyer, the seller, and an arbitrator if they are required. Since you can self-custody your cryptocurrency in your own wallet, you do not need to worry about protections from fraud, such as credit card theft, because it’s a push-based method and not a pull-based method. Some thought must be given to holding large amounts of what is basically cash, but that is easy enough to do through multi-signature accounts and keeping only a small amount of crypto on a mobile wallet or laptop at all times.
And for 3, pick a more environmentally friendly cryptocurrency, like Ethereum. Monero is probably also way more efficient than Bitcoin since it’s not profitable to mine, so you only get enthusiasts doing it instead of big mining operations.
It may be profitable to mine Monero, but the fact that it uses an algorithm that is strictly available on CPUs only helps keep the power usage way down because you can’t make specialized equipment and put it in a single location. That way, nobody has an advantage over anybody else except for the pure amount of CPUs they can purchase. But literally anybody that has a mobile phone or a computer of any kind can mind Monero if they wish.
Right, and all of that is why it’s unprofitable to mine Monero. So you end up with enthusiasts mining because they care about the platform, not because they’re trying to make money. Transaction costs stay low because there are a lot of enthusiasts, and energy use also stays low because mining farms aren’t really a thing, so there’s a lot less waste. I imagine a lot of people run a miner on a system that’s going to stay up 24/7 anyway (e.g. NAS or VPS that serves other data), so there isn’t really an increased amount of energy usage.
It’s nearly impossible to estimate how much energy it uses though, but I wouldn’t be surprised if it’s a blip compared to Bitcoin, even adjusted for total number of transactions processed.
Yep, that’s a totally fair point. I mine on the same machine that runs my node that I connect my mobile wallet to over tor and it runs a couple of other services for me, so I have to leave it on all the time anyway.
Yup, I’m planning on doing the same. I have a VPS that reverse proxies to my NAS, both of which run 24/7 and have very little CPU load normally. My VPS doesn’t allow crypto mining, but it probably allows running a node, or I can just pass it through to my NAS.