Balaji Srinivasan: evaluation

Transcript context

…But you’re reintroducing third-party involvement in some way. If you’re asking how decentralized is the system, someone has to verify who has stake or share or whatever. Right. I would say I don’t have a good answer to that other than, obviously, no exponential can go to the moon. It’s going to top out and logistic out at some point. With that said, I will offer one observation, which is that people will compare Bitcoin’s power consumption to, let’s say, PayPal’s and say, “Oh, PayPal just has a few servers and Bitcoin is using this gigantic set of server farms. Look how wasteful it is to send a transaction.” But I don’t think that’s an apposite comparison because what Bitcoin is, and then more generally Ethereum and all the blockchain stuff is, is basically a system of property rights and contract law. It’s more comparable to, let’s say, Delaware or even the US government, at least certain functions, than it is to a central server sending payments back and forth. The blockchain records who has the property. I think that’s something where, if you’d make that comparison, even all of Bitcoin’s energy consumption is cheaper than the Brink’s trucks and the US military and the police system and so on required to protect property rights in the American context. Right now, I pay financial fees to my mutual funds, to Merrill Lynch, all over. Anytime I save money, I’m paying a fee to someone. Which of those fees will go away?…

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