Bitcoin (BTC): Three Acceptable FUDs

Three types of FUD are legit about bitcoin…

Bitcoin does not consume enough energy

Proof-of-Work makes it possible to secure a store of value behind an encrypted energy wall. We’ll find out soon enough why Ethereum’s switch to PoS was a big mistake. In the meantime, FUD’s truce on the PoW.

Admittedly, the hashrate is already more than enough to prevent any takeover of the Bitcoin network. It is also true that climate change and energy scarcity must encourage us to be parsimony.

That being said, BTC mining, thanks to its geographical agnosticism, can be installed on oil sites and consume methane that would otherwise be released into the atmosphere.

Daniel Batten estimates that it would be enough to connect 2254 MW to methane flares to fully offset the CO2 emissions of the Bitcoin network.

That’s about 20% of the power of the entire bitcoin network which consumes 60% renewable energy.

In addition, the Bitcoin network offers a floor price to energy companies who really need money to finance the energy transition.

Finally, the appreciation of bitcoin will not automatically translate into the arrival of legions of mining machines. For two reasons :

  • The BTC reward given to miners is halved every four years.
  • Semiconductors consume less and less energy. Mining machines will use 1.4 nm chips by 2027, compared to 5 nm today.

So it will probably take the price of BTC to be multiplied by 24 over the next eight years for energy consumption to increase significantly.

So much for the gossips who refuse to admit that BTC mining can be beneficial if installed in the right place.

Bitcoin doesn’t have enough nodes

Nodes are the heart of the Bitcoin network. We could almost say they ARE bitcoin.

You can think of them as “gatekeepers” making sure each satoshi is where it belongs. Their main task is to verify that the Bitcoin protocol is fully respected.

The nodes ensure, for example, that the reward granted to minors is 6.25 BTC per block, no more, no less.

The Bitcoin protocol is called “Bitcoin core”. This is the name of the program to verify the “Blockchain” and to signal to its peers that everything is in order.

An elite of developers evolves the code by proposing BIPs (Bitcoin Improvement Proposals). Nevertheless, it is up to each node to update, or not.

For example, you will find it difficult to accept a BIP suggesting increasing the limit from 21 million BTC to 42 million… The bitcoin code also has a tendency to “ossify”. Most BIPs are falling into disuse.

In short, there is no definitive method for counting existing Bitcoin nodes. The reason being that many nodes verify transactions without propagating their vote to the rest of the nodes.

A popular estimate hosted by Luke Dashjr claims that there are currently more than 45,000 nodes. Unfortunately, the trend has been downward since peaking at 200,000 nodes in 2018. See you here to learn how to mount your own node. Or here to buy it ready made.

Most BTC is purchased through KYC exchanges

KYC for “Know your customer”. A “KYCized” exchange is an exchange that ensures the identity of its customers. This is usually the ID.

In France, the exchanges are even obliged to ask for proof of residence… One wonders why, if not to discourage the youngest who, very often, do not have invoices in their name since they rent.

All major exchanges, Binance, KuCoin, OKX, Coinbase, FTX, etc., are “KYCized”. This contrasts with the pseudonymous, permissionless, P2P, non-trusted third party money system developed by Satoshi Nakamoto.

Removing trusted third parties (banks) is the raison d’être of Bitcoin, which requires no personal information to participate. Everyone can maintain their privacy by simply keeping their public keys anonymous.

All you have to do is never have your main wallet interact with a KYCized service. Prefer to go through an ATM to buy your bitcoins.

In addition, KYCized exchanges are necessarily “honey pots” of information about their users. Ledger, for example, leaked a million e-mail addresses (often containing first and last names, etc.).

More recently, Celsius had the amounts held by its customers completely hacked! This is very dangerous since 90% of BTCs are owned. Big Celsius customers could now attract burglars looking for seeds…

Worse, fascists could take over, make bitcoin illegal, and use exchange databases to shut down all bitcoiners.

Receive a digest of news in the world of cryptocurrencies by subscribing to our new service of newsletter daily and weekly so you don’t miss any of the essential!

Similar Posts