Fear, uncertainty and doubt around Bitcoin

History shows it is not possible to insulate yourself from the consequences of others holding money that is harder than yours — Saifedean Ammous.

There are some fallacies that spread FUD around Bitcoin.

The 3 most repeated ones nowadays are discussed below:

 

1) Energy FUD: "Bitcoin consumes a lot of non-renewable energy for something useless"

 

Bitcoin requires so much computing activity that it eats up more energy than entire countries. One of the easiest and least disruptive things we can do to fight the climate crisis is to crack down on environmentally wasteful cryptocurrencies. — Elizabeth Warren (U.S. Senator) on June 2021.

 

Non-renewable energy?

Bitcoin uses electricity to secure the network through a computing process referred as mining.

Electricity is generally obtained from other forms of energy that can be either renewable or non-renewable.

Bitcoin increases the renewable energy profitability, so it incentivizes its adoption. 

Renewable energies like wind or solar are intermittent and tend to have load congestion at peak times.

Besides, they are difficulty distributed if they are in isolated places non-connected to a large electrical grid infrastructure.

Bitcoin miners are unique energy buyers in that they offer highly flexible interruptible load while being able to locate anywhere, so they have the ability to use excess energy that would otherwise have been wasted.

The easy accessibility that Bitcoin mining offers causes that, in the long run, only surplus energy will be used. 

It is true that when price of bitcoin increases drastically, many energy sources become profitable for that purpose, but profitability decreases over time as competition increases.

Useless tool?

 

Bitcoin is a superior form of money that enables financial inclusivity and freedom.

 

Electricity is the only known way to digitize real world value without a central trusted party — Willy Woo.

Bitcoin technology uses electricity to avoid consuming human resources. 

When we can secure a financial network by computer science rather than by accountants, regulators, investigators, police, and lawyers, we go from a system that is manual, local, and of inconsistent security to one that is automated, global, and much more secure Nick Szabo.

The use of energy to satisfy necessities and save human time is progress.

Gold historically has also been the subject of fallacious arguments that do not take benefits into account:


If one looks at the catastrophic consequences of the great paper money inflations, one must admit that the expensiveness of gold production is the minor evil.  Ludwig Von Mises.

Gold mining is a waste, but that waste is far less than the utility of having gold available as a money. I think the case will be the same for Bitcoin. Not having Bitcoin would be the net waste. — Satoshi Nakamoto.

2) Ban FUD: "Most governments don’t like it, so they will shut it down or will ban it"

 

If several states did not want to ban Bitcoin, Bitcoin would not be interesting.

 

Bitcoin isn’t going to embrace the subjective requirements of any person, organization, or government.

A ban on Bitcoin can not be implemented in a practical way. 

There has to be regulation. This has to be applied and agreed upon... at a global level because if there is an escape that escape will be used. — Christine Lagarde (European Central Bank president) referring to Bitcoin in January 2021.

 

Bitcoin is indeed an escape to the lifeboat of financial hope.

Future is not bright for those that oppose innovation.

3) Quantum computing FUD"Quantum Computing will break Bitcoin"

Quantum Computing is nowhere near capable of breaking Elliptic Curve cryptography, and unclear if it ever will. When that time comes, Bitcoin will softfork to add post-Quantum signatures schemes, and eventually remove Elliptic Curve based outputs when we become too worried about their breaking. — Pieter Wuille.

"With Quantum Computing somebody will be able to access to all coins that are lost"

 

There is a theoretical and highly hypothetical solution that would consist of invalidating Elliptic Curve-based spending methods (invalidating coins), except when the spending includes a post-Quantum zero-knowledge proof that the key was derived from a known BIP32 seed. Such approach would likely keep most coins movable, while removing the risk for theft by Quantum Computing. 

The obvious path to solving this is:

1.Research post-Quantum cryptography.

2. When that is done, propose an improvement to Bitcoin that enables post-Quantum Computing outputs.

3. People start moving their coins over time to these post-Quantum Computing outputs.

4. Decades later, when the threat for a sufficiently powerful Quantum Computing becomes real, disable spending from old Elliptic Curve-based outputs— Pieter Wuille.