RE: What if the price of bitcoin will hit $250,000?
I have two thoughts on this.
I think mining will become much more efficient as the price of Bitcoin increases. Also the mining equipment will drop in price.
According to my understanding of economics, you seem to have contradicted yourself. You say that "Amateurs are probably going to be so inefficient in their mining that they won't have a big impact. So that will lead to centralization of hashing power." And then you say, "Because the mining markets are highly competitive, nobody can make huge profits." It doesn't seem to be a likely scenario to have both massive centralization AND major competition in the same industry at the same time. Either hashing centralizes to a few former competitors who collude to keep others out of the game, or hashing remains competitive. With cloud mining, it will still be relatively easy for amateurs to get in on the mining profits. That model will also tend to lend itself toward greater decentralization and a wider distribution of profits.
It doesn't matter how efficient hashing is. Miners will use their earnings to buy as much equipment and electricity as they are paid for.
When markets are highly competitive, there won't be much incentives for small players to join. It will be dominated by a few big players who have invested the most resources. They will build their own power plants or buy already existing plants so they can have the cheapest electricity. It's called economies of scale.
Of course some of them could be cloud mining operators, but that doesn't actually help with centralization problem because common folks who pay for cloud mining contract are just investors, they don't actually control the hashing power.
Mining will always go there where energy is the cheapest. That alone leads to a certain degree of centralisation. Small miners can easily compete (eg, via pools) as long as their energy is cheap. At some point I think solar will dissimate the environmental FUD argument.
Bitcoin could indeed be hindered by its own success. That is not something Mr Market cannot handle. If Bitcoin reaches $250,000 without changes to the protocol, that would be proof enough that scaling is not the biggest issue facing Bitcoin and that market participants would value Bitcoin for other reasons.
But how long the energy will stay cheap if it's used for Bitcoin mining? If there is cheap electricity and good enough infrastructure to set up a mining operation, it will attract as so much miners that it might very well affect the price of electricity.
Another possibility: Many countries with really cheap energy are developing countries where goverment has somehow price fixed the energy markets. If enough cheap energy will be wasted for Bitcoin, there's nothing left for people. They will suffer from lack of electricity. If they see at the same time how some people will get filthy rich by mining, there will be riots.
Producing all those solar panels will still require a lot of resources. Even if bitcoin miners will use only solar power, other people need electricity, too, and they have to use other alternatives. It means that there will be still huge demand for energy that pollutes.
I don't see that there is anything undeserved in FUD for Bitcoin's environmentally destructive design. The basic premise is that if the price of bitcoin goes too high, there will be huge environmental consequences. So far I haven't seen anybody refuting that argument.
perhaps this could be part of humanity's push to get their asses in gear to properly develop out and integrate free energy tech into the new economy...
If energy was free, it would be all used to Bitcoin mining. And then it would become scarce again.
free energy = abundant.
your logic is flawed. not sure if you're trolling or really don't get it.
"Abundant energy for humans" usually means that there is enough energy for all basic stuff that humans need to do. It doesn't mean there is totally unlimited amount of energy.
If you get something for free and you get rewarded greatly to use it, wouldn't you use it as much as possible?
If bitcoins worth of hundreds of millions of dollars are distributed every day, you can be sure that there are individuals and companies who want to take as much as they can. If energy is abundant, they will use it to generate electricity, mine minerals from the ground to get resources for hashing equipment and continue to do that until they hit some kind of limits.
My guess is that "abundant energy" won't so so abundant in that scenario. But of course, maybe the limitation will be caused something else, like lack of metals to build hashing equipment.