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16 sats \ 7 replies \ @jp OP 15 May 2022 \ on: The problem with bitcoin miners [seen on Hacker News] bitcoin
In the event you want to bathe in the hate: https://news.ycombinator.com/item?id=31389647
yeah i remember when HN was a bastion of intelligence and curiosity
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I think HN still has an intelligent userbase, but they're smart within their own domain (software engineering); when it gets into Economics I think the community falls completely flat.
I've seen a recurring theme on HN forums, specifically related to Finance, where there is this ingrained hatred. I believe most of this stems from early-stage software engineers feeling "cheated" out of equity in companies and - in turn - think all finance is evil (when in reality they just were naive about how finance & equity actually works).
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This top comment seems like it was posted mostly in good faith and the arbitrage angle was one I haven’t thought of before. But, the conclusion seems to be that governments are going to shut down mining because it uses too much electricity? Outside of that rather aggressive measure, the arbitrage seems like a good thing, or am I missing some nuance in what he is positing?
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I think the overall posting confuses the point of "arbitrage" and "value-added enhancement".
"Arbitrage" would be taking one asset (e.g bitcoin) and transferring it from one market to another (without any modification to the bitcoin itself) to make some profit due to market inefficiency.
"Value-added Enhancement" is the work (e.g electricity, computational power) that is produced to create a sellable good (e.g bitcoin).
The author incorrectly assumes that energy costs (e.g the potential energy of a bitcoin) is equal to an actual bitcoin and improperly classifies this as "arbitrage". Given that energy != bitcoin, but rather energy + computational hashes = bitcoin means that there will always be a profit-opportunity for mining companies.
My $0.02.
P.S. - Like the original HN poster mentioned, I am also an idiot.
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That top comment also totally ignores the fact that the future of BTC is dynamic and uncertain. What's going to happen when block rewards are from tx fees only? Nobody knows. But that author seems content to extrapolate.
All in all I felt that top comment was a straw-man type of approach.
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As a fellow idiot, that was a super helpful response. Thank you.
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I gave that a try and couldn’t take much. No wonder the tech industry is a clown show of one JavaScript framework after another. It’s filled with people who think they know everything.
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