At the risk of going on for far too long, I also think it's worth digging into the final question being raised above: what problem is Bitcoin solving and is it important enough to solve to justify the energy expenditure?

----

> And so we first need to agree on what problem bitcoin is solving, before we can determine whether it's efficient or not.

This is a great point and one that I fully agree with. But it's a good opportunity to bring up what might be the primary fatal flaw of the Bitcoin community and why I feel comfortable calling Bitcoin a speculative asset even though I know a significant portion of the community would take issue with that description.

The problem is that there is no consensus answer to this question inside the Bitcoin community. There is no answer you can give me about what problem Bitcoin is solving that everyone in the community will agree on.

On this very thread (and this is a normal occurrence on every HN thread on Bitcoin) I'm seeing different answers from Bitcoin proponents about whether Bitcoin is intended to be a currency. If I go and talk to 20 different Bitcoin proponents and really dig into their beliefs and question them about what the coin is good for or bad for, I will not find a consistent philosophical or ideological position about what Bitcoin is and what it's meant to be and meant to accomplish.

This makes these conversations very frustrating because Bitcoin proponents simultaneously say (as you have) that critics just need to do more research, while ignoring the fact that the research very often disagrees with itself and offers incompatible philosophies about the nature of the coin, and that community consensus or goals are regularly ignored in conversations about Bitcoin. As you yourself put it above, you don't really care what the original goals of the coin were or what its original proponents used to want or predict. This all leads to really cagey and vague answers about what Bitcoin proponents actually believe, and it turns out those beliefs are really flexible. I can promise you that if I bring up your points to another Bitcoin advocate in the future, if they think that dismissing you will help their argument they will in a heartbeat tell me that you're wrong and don't understand the coin. So when talking about Bitcoin, what I've found is that there's no transferring points between discussions because the community isn't in agreement about either the purpose of Bitcoin or about what Bitcoin actually is, but rather each individual faction within the community believes that they are the unique ones who actually understand what's going on.

Note that this is the case even for "experts" in the field. You're coming to me out of the school of Michael Saylor (a man who jumped into the space in 2020 after "allegedly" committing financial fraud in his previous ventures, but whatever, that's maybe a low blow for me to mention). Saylor has made a huge name for himself in the crypto space, and simplifying a bit, my best explanation of his beliefs is that he describes Bitcoin as a democratizing/"fair" financial system that can serve as a base for other systems to build on top of (lightning network for transactions, exchanges to help manage contracts, etc...). And the way he approaches Bitcoin practically in terms of his purchasing and usage is as an investment vehicle; he's proud of the fact that he holds Bitcoin as an asset rather than selling it.

And notably, his views and behavior are not universal or even necessarily mainstream within the entire Bitcoin community. So in a way, there's another question that needs to be asked alongside "what is the purpose of Bitcoin?" That question is, "according to whom?"

----

So given the above, why do I call Bitcoin a speculative asset? Because Bitcoin proponents don't agree with each other about much, but there is a small subset of points that they do mostly agree on: that Bitcoin is going up in value, that its rise is inevitable and should be assumed regardless of what the market indicates, that Bitcoin being deflationary is critically important and that the earliest adopters should be rewarded most heavily, and that FOMO should be a baseline argument for adoption and evangelism.

The philosophy that actually unites the Bitcoin community is that it's going to the moon. Everything else is secondary: agreement on whether Bitcoin should have price stability is not a necessity, agreement on whether it should be regulated is not a necessity in the community. Agreement on whether it should anonymous, on whether exchanges should exist, on whether lightning network is the right approach, the community doesn't even have completely universal consensus on PoW vs PoS -- there is disagreement on all of these issues. What's left is the speculative asset part. The beliefs that align with Bitcoin as a speculative investment are the only beliefs I can count on being present in a conversation with a Bitcoin advocate.

And honestly, it's also basically the only thing Bitcoin is actually good at. Bitcoin is terrible for transactions and has weak privacy guarantees. The rise of regulated exchanges as a chokepoint has made it less useful as a censorship-resistance engine, and it's not particularly reliable during disasters because it depends on a globally connected Internet and ready available power in order to transact. PoW tends to centralize governance; it turns out that "one CPU one vote" is not a great voting system given that both electricity and CPUs are fungible resources that can be purchased with money. It also turns out that leaving governance decisions up to miner consensus is not really the same thing as giving power to actual users. Its use as an independent value-store outside of government control is questionable, coin value appears to fluctuate with economic conditions and with stock market health. And of course as a way of avoiding financial corruption or manipulation Bitcoin has been a complete failure: the space is rife with pop-up companies and financial fraud, and has spawned whole new innovations in the field of pumping and dumping junk coins.

I'll give that it's not completely useless: for medium-value transactions with medium privacy requirements it's better than nothing and there are (proportionally to its energy expenditure) very limited minor instances where people have been able to use Bitcoin to avoid institutional censorship or to transact anonymously -- so it's not that it's literally never managed to to help with problems with fiat. But the issue is that even in those areas it has been surpassed by many other better options in the cryptocurrency space, and the Bitcoin community is actively hostile to efforts to make the coin better for those use-cases. This is part of the reason why there's been increasingly less and less adoption of Bitcoin for transactions that would heavily benefit from low-to-medium anonymity censorship-resistant payment methods like in the sex industry or with activist groups -- despite a clear market desire for additional payment options in those spaces that don't suffer from the many flaws of existing online payment systems.

But despite all of those failures, Bitcoin is and has been really stinking good at being a speculative asset. As a way of transferring money from late adopters to early adopters through a regularly repeating hype cycle that can be planned and influenced by large purchases, press, and evangelism -- Bitcoin excels and has been shown repeatedly to excel in the real world.

And to be fair, value is subjective. To a lot of people (Saylor included) a good speculative asset is probably enormously valuable no matter what the necessary costs are to maintain that asset. I have no doubt that Saylor would happily burn the entire world into dust if it meant he could sell the ashes at a profit. But for everyone else, the enormous energy expenditure is not justified by the creation of yet another speculative investment vehicle for people to gamble on.