Should-Read: Charlie Stross: Unforeseen Consequences and that 1929

Should-Read: This is nuts! When’s the crash?

Charlie Stross: Unforeseen Consequences and that 1929: “The mining process in combination with the hard upper limit…

…Per this article, Bitcoin mining is now consuming 30.23 TWh of electricity per year, or rather more electricity than Ireland; it’s outrageously… energy-intensive…. BTC is a libertarian shibboleth…. I tweeted… that we need to ban Bitcoin because it’s fucking our carbon emissions. It’s up to 0.12% of global energy consumption and rising rapidly: the implication is that it has the potential to outstrip more useful and productive computational uses of energy (like, oh, kitten jpegs) and to rival other major power-hogging industries without providing anything we actually need. And boy did I get some interesting random replies!… What I wasn’t expecting was the alt-right/neo-Nazi connection. Bitcoin isn’t just popular among libertarians, it’s popular among folks with green frog/Kek user icons and anti-semitic views. (“Are you a Jew?” asked one egg.)

One possible explanation, which looks quite reasonable as a first approximation, is that the US libertarian fringe has been assimilated by the neo-Nazis…. Weaponized media (both social media and mass media owned by the oligarchs) is used to channel the sense of grievance felt by the immiserated population into acceptable directions, via slogans like “taking back control” or “make America Great again”. Directions such as resentment towards immigrants, get-rich-quick schemes such as cryptocurrency bubbles or goldbuggery, and ritualized abusive denunciation of anyone who questions these attempts to divert attention away from the real problem—the way we’re being conditioned for exploitation by our self-proclaimed masters. So I now have two follow-on questions about BTC….

If BTC delivers what its supporters promise, then how will the oligarchs react? A working distributed cryptocurrency model is inimical to the interests of billionaire monopolists who want to get rich by imposing rent-seeking practices on the immobilized peasantry (ahem: I mean us ordinary folks). They won’t go quietly, there will be a crack-down, and we may be seeing the first signs of the shape it will take in China (which is banning bitcoin exchanges). Distributed systems, contra received wisdom, can be banned: you just have to be sufficiently ruthless….

If, as I think, BTC doesn’t deliver, then the bubble will eventually burst…. We’re going to run out of new BTC to mine…. The incentive for mining (a process essential for reconciling the public ledgers) will disappear and the currency will… what? The people most heavily invested in it will do their best to patch it up and keep it going, because what BTC most resembles (to my eye, and that of Jamie Dimon, CEO of JP Morgan Chase) is a distributed Ponzi scheme. But when a Ponzi scheme blows out, it’s the people at the bottom who lose.

The longer BTC persists, the worse the eventual blowout—and the more angry people there are going to be. Angry people who are currently being recruited and radicalized by neo-Nazis.