So with PoS, we recreate a system where a few rich pool have decision over the network. Can someone enlighten me on how this is different from the current fiat system?
The difference is that with PoW you constantly have to do "stuff" (ie. buying equipment, running datacenters) or get left behind. PoS on the other hand you can just sit on your ass and wait for the $$$ to roll in.
Or you can pay someone a flat amount to do the "stuff" and experience your own unlimited percentage-based gains, like in pretty much any other market where "capital" is a thing.
There are lots of participants in the global economy who has money. The idea is that you have enough different people with competing incentives. PoW provides incentive model which separates different actors (pools, exchanges etc) and also at the same time doesn't seem to lead to monopolies.
An earn interest, right? So I could lend Coinbase some of my ether for staking and they pay me interest in return. So PoS could give us an interesting investment possibility.
Well, its not called interest, its called 'staking rewards'. You can also earn interest lending out your ETH, but that's a different process and entails counterparty risk.
Yes and no. Keeping up with the day to day details is something you delegate at some point. PoW is also "just" an investment, with extra steps to set things up.
This is not the case. In Ethereum's PoS model, you put value at risk when you sign up to be a validator. You have to lock funds up to play a part in consensus.
This means that if you start acting maliciously, or even just not fulfilling your responsibilities (e.g. you let your computer go offline), then you are punished for it (depending on the severity of your offense, obviously).
Aka, you can't just wait for the money to roll in. You have to run a node, you have to verify blocks, and you have to make sure you're acting in the best interest of the network + keeping things running smoothly.
This is something I don't understand. You lock the funds on a chain and you lose them on the chain. But what happens if two groups decide to split the chain, and both chains lock the opposing chains funds? It seems like there's no way to prevent social forks in the longer term, just a lot of hand-waving about that if the current social contract stays in place, some minority malicious group will be punished for secession.
It would seem that if some participants on the network can't abide by their national laws while running some contracts, the outcome would be inevitable. And then you would just get multiple chains running under multiple governments. This seems like a reinvention of the international banking system?
Ethereum has already proven that there's no way to prevent social forks, correct? The DAO incident comes to mind as a very controversial instance, but there are others. Ultimately, it's up to the individual nodes to decide what code they want to run and what rules they want to use to decide what the chain is. I'm not sure I understand how PoS makes this worse (although maybe there's something I'm missing)
Right, but then the model is not trustless but is instead a complex implementation of the current system of international banking. Maybe I don't understand the point of cryptocurrencies. Most applications of cryptography are trustless.
"Trustless" is relative. In this case, the protocols are still trustless—the trust lies one meta level up, where you decide which protocols to use. In this situation, there are network effects as well—you can come up with your own perfect protocol in a vacuum, but if nobody uses it, who cares?
In this case, you can think about it as one person saying "I think it's a good idea if we do this" and a few hundred other people saying "I agree with you". Obviously, they're more likely to agree with the first person if they have some sort of institutional legitimacy. But is that "trust"? That's very different from the definition of "trust" that's generally used in protocol design.
This article makes a good point about the fragility of DeFi, but it fails to demonstrate that the broader Ethereum community cares enough about DeFi to let it influence their decisions. It makes a general, hand-wavey gesture to other parts of ETH ("All websites, interfaces, block explorers, and wallets ultimately point to the majority chain. Game operators like CryptoKitties lock their D-ETH contracts so as not to confuse their users."), but it fails to justify this point—it already says "a civil war is brewing" and that individual developers (presumably including CryptoKitties) would have reason to support one or the other.
So while this article is a (good?) argument for why all DeFi operators must follow USDC, it fails to make the case for why anyone else should care about the fate of centralized stablecoins. Maybe these reasons are obvious! But I don't know them.
I think GP's point is that in the event of a fork, in a PoW fork miners have to choose to either mine for chain A or chain B, whereas with PoS stakers can choose to stake for both. This is bad, because either side can use their staking power to disrupt the other chain, by doing double spend attacks or refusing to confirm transactions. On top of that, staking is free to do, so you don't even have to expend resources to pull off such an attack, whereas with mining you have to spend real world resources to pull it off.
This is the point of slashing, to prevent the same coins from being staked on multiple chains at the same time. To stake you need to issue proofs of the stake which can be used to slash you on other chains.
Thank you, this is a good description of the issue! This does seem like a complicated problem to solve, but I'm not necessarily convinced that one set of incentives is always worse or better—aren't there some situations where you do want to import the existing set of "stakes" to gain adoption?
I don't think that helps my comprehension of this. Unless I am mistaken, it seems like a long winded essay on how cryptocurrencies are simply social constructs.
Why would you want to prevent social forks? Social forks are not only good, they are the killer feature of crypto. They are what makes crypto truly consensual and voluntaryistic (if that's a word). As for the problem of national laws, I hope that can be alleviated with better privacy, so people can safely run a node even in violation of laws.
Yeah, but obviously the "stuff" has led to a Red Queen problem, with the outcome being incredible waste of electricity and computing resources (compared to PoS or having a less competitive eth mining industry)
Except, using the same kind of pooling that POW depends on, you can still get in at just about any price level. .01 Eth can be staked just as easily as 10,000 eth. And running a validator with 32 isn't nothing - you still have to keep a machine on and online 24/7 with an uncapped connection or pay someone to host that machine.
In PoS, you are still permanently burning the time value of the money you have staked. That's unrecoverable just like the electricity spent in PoW is unrecoverable.
I find comments like yours hilarious. The idea that the ethereum foundation has spent years and years designing a PoS system, writing papers, doing tests, building proofs of correctness aaaaaand derp they just didn't think of people sitting on their asses.
It's not that hilarious when you realize that this is the same kind of thinking some cryto-boosters apply to hundreds of years of financial regulation and history.
This isn't really true. You also have to buy equipment and run specialized software to participate in PoS. It requires keeping a node connected to the internet with high uptime, and maintaining its software and hardware.
Plus, due to slashing, you are uniquely responsible for mistakes your validator makes. So, staking comes with both responsibilities and consequences for breaching them, just like any legal contract.
The fact that you can rent a turnkey cloud solution to do all this work for you and split the profits isn't really relevant to the argument IMO (I consider staking with Coinbase "renting cloud computing" in a specialized way).
No, it is very different because in practice the pools and exchanges are totally separate entities. With PoS the biggest holders will be exchanges and therefore exchanges will control the cryptocurrency. With PoS there will be clearly less decentralization compared to PoW.
In order to be a validator in PoS (at least Ethereum's implementation) you need to lock up the funds, so not sure how an exchange would be particularly well-suited for that – they need to keep most of the coins on their books liquid so that the customers who actually own them can quickly trade them.
You don't seem to understand how exchanges work. Locking the funds won't be problem to exchanges. Most of the funds just sit dormant in cold storage for long periods of times. For withdrawals you always use most recent deposits and you minimize the transfers between hot and cold wallet.
Just take a look at any of the account tables. Most of it is in exchange cold wallets. These exchanges will be staking against your interests. It has happened before, it will happen again. Just say no to PoS.
Yeah, in exchanges. Which will ignore the wishes of the actual currency owners, just like happens today.
A vast, vast majority of staking users will not have the required 32 ETH for self-staking, and will be delegating this to third parties. PoS gives power to the exchanges, which should not have this power.
The difference to PoW is that the exchanges can do the staking with very minimal effort. I would guess majority of exchanges give the staking results to customers while taking some % fee.
I don't have any problem with this in general, I don't think it is wrong to do business like that. But I personally prefer PoW because it looks like it naturally separates the mining work from exchanges, creating more decentralized economy.
For some reason China seems to concentrate more than 50% of hashing rate due to "big money" coming in and building up huge data centers while using the dirty local energy available.
How's that decentralized.
The times of home mining with CPU/GPUs are long gone
Because the only threat from a 51% attack is rewriting a couple blocks until they recognized as attackers and they get kicked off the network because bitcoin users actually validate blocks. In a PoS system there is an incentive for large stakeholders to increase block sizes. 1. It increases the usability of the network which increases the marketcap. 2. It pushes out smaller stakers who can’t afford to validate anymore because tx throughput becomes too high. If everyday people can’t validate the chain how can they fork it if they think the current block validators are acting against their interests? The ether account set will be far too large. So they’ll start from scratch.
>In a PoS system there is an incentive for large stakeholders to increase block sizes.
this doesn't work because of Ethereum's social contract, just like it wouldn't work with Bitcoin.
Just because you stake a lot of ETH doesn't mean you suddenly have unilateral power to increase block sizes. There is a thing called consensus, and the entire community needs to achieve it to implement changes. Good luck trying to convince the community that bigger blocks that make it harder for small users to validate the chain is a good idea.
Except the barrier for entry on building a stake pooling operation is relatively low, so there will be a substantial amount of competition in the space over time. Coinbase for instance is taking a 25% commission on the staking earnings, so anyone who can come in under that, or offer options in terms of liquidity on the staked funds that can be reinvested, will attract a good amount of the share of stakes. There is even a fully decentralized pooling system that is nearing release.
PoW is a lot different, as burning real world resources (energy) brings sell-pressure to miners, whereas PoS only has cost of locking the funds. This means that regardless of the size of your "operation" cost scales very flat.
PoS also does not come with the property of innovation and disruption. In a PoW (especially ASIC-based) system you will find new ways to outperform your peers and disrupt old players.
PoW incentivices cheap energy in developing countries more than anything before. It is the fix for environmental problems.
This is a spicy take, not least because the cheapest source of energy in the developing world (i.e. the one without environmental regulations) tends to be coal.
> PoW incentivices cheap energy in developing countries more than anything before. It is the fix for environmental problems.
That can only become true if and when governments decide to suddenly ban PoW, so that all that cheap energy services anything other than crypto. I don't think it works as an argument in favor of PoW, for the same reason "we're only spreading knowledge of chemistry and democratizing process engineering" doesn't work as an argument in favor of drug cartels.
Also, 'SR2Z is right - "cheap energy in developing countries" == coal.
PoS burns capital in the sense that it could be invested in something else (I was looking at staking coins but it doesn't come near the yield I get from my 401k for example, which is effectively providing unsecured debt to finance innovation.)
IMO: it's much better than PoW as long as it doesn't end up too centralized. I'm not too sure how I feel about the minimum amount required to stake though, that seems a bit odd.
While I myself stay with Bitcoin, Ethereum still has lots of advantages compared to the fiat system: it's still open source, and people can still validate the rules (although that full validation is extremely hard).
Also the current fiat system is debt based, which means that the vast majority of money is printed by banks and the money printing power is at the highest ranking sales person, and hidden.
Ethereum no, but Bitcoin sure, I'm travelling a lot, and I have a lot of payment problems (for example my bank disabled my credit card just because they said that it's not working with some types of contactless recievers, but they can't send a new one to my hotel, just to my home address). Bitcoin always works, although it's not real-time (still faster than sending money to my Revolut account, which takes days).
If a person thinks that fiat payments work well, he hasn't really travelled yet to different cultures.
I've been traveling all over the world for the last ten years. I've never had any serious problems paying for anything with good old fashioned credit/debit cards. Even getting cash in the local currency is trivial with ATMs.
I ton't mean to sound rude (really) but this sounds exactly like the argument 'I've never had any serious problems traveling around on my horse, why do I need some new-fangled carriage which does nothing better than before?'.
This is the genesis of a new crypto universe. It's hugely hyped, and a lot of it is clearly BS. But underlying the hype and hysteria there's a kernel of a new paradigm emerging.
Crypto applications promise to provide disintermediation on a scale not seen before. Direct peer to peer transactions, conducted transparently, without a need to verify trust and happening simultaneously anywhere in the world.
Not only that but smart contracts bring with them the potential to do stuff that simply is not possible right now. For example, providing instant conditional transactions (if my fave rental car is available book it, otherwise search for another solution, but only from these sources at this price) etc etc etc. We don't know what this means, but it could be a revolution. Or not. :)
ETH is so cool. But only really if you are into that kind of thing.
Smart contracts, and all the other buzz words turn regular folk away. I'm hedging my bets on the coin with a dog on it for mass adoption. Even the word "Ethereum" (and "Eth") is less user-friendly to "Doge".
For me, all this ETH stuff is just hype (very few ETH owners actually care about the currency side of things and its already gone too far into pyramid scheme territory to ever recover imo). The dog coin works just great as it is right now for the amount of users it has. Any upgrades should be manageable before they are ever necessary.
> Crypto applications promise to provide disintermediation on a scale not seen before.
They don't. All of "disentermidation" immediately turns around and restores all the institutions based on, you know, trust.
> Direct peer to peer transactions, conducted transparently, without a need to verify trust
Yup. Until you pay for something, and that something never arrives.
> (if my fave rental car is available book it, otherwise search for another solution, but only from these sources at this price)
Literally nothing prevents you from doing it right now, with existing technologies... Oh, wait. All rental car companies are closed to any integrations of any kind. Smart contracts will do literally nothing in this scenario.
Besides. If I go and rent a car from, say, Hertz, I get a contract written in plain language. It may be a little obtuse, but I can read and understand it. Smart contracts on the other hand are written in obscure esoteric programmming languages. Good luck telling people "don't worry, you won't be scammed out of your money because it has 'smart' and 'crypto' in it".
I've never had problems withdrawing cash, even in relatively repressive countries. Your credit card was probably blocked to prevent fraud because you didn't tell your bank you are planning to travel rather than your bank trying to censor your money.
> If a person thinks that fiat payments work well, he hasn't really travelled yet to different cultures.
Count me among the people who have travelled and never encountered problems. I always bring two cards in case something weird happens, but I’ve never had to use the backup.
If established banking cards aren’t working in a country, it seems unlikely that relatively recent cryptocurrency would be working any better at their banking institutions. If their banks can’t take your bank card in exchange for cash, I doubt they’re going to be set up to take your Bitcoin.
I’ve loaded up some eth into an ethereum based browser and knocked around their web. It’s interesting because the type of site where you normally have to sign in (“banking”, news, etc) you don’t have to sign in because every interaction is predicated through your wallet. It’s as if your username were identical to your public key.
However as a speculative instrument eth and Bitcoin are not my cup of tea.
Not OP, but I literally use Ethereum every day and have been for like 2 years now. I started using dapps in 2016, but in 2019 is when the network had a sufficient amount of things to do that I found myself using it daily.
You could say the decision to go to war is also ultimately under democratic control. Yes, it is, but it doesn't necessarily mean you should trust a politician or president when they want war.
Similarly, you shouldn't necessarily trust a central bank when they want to print money. (I'm not inherently opposed to it and think the pros probably outweigh the cons for some situations and intents; just saying accountability in cases like these isn't as simple as "it's the people's will".)
And these cryptocurrencies are akin to letting whatever group holds the highest stake or the most computing power decide to go to war instead. So much better. Yay.
The issuance is exponentially decreasing every 4 years. If you're a miner and have hardware investment, increasing your issuance contrary to the expectation of the market is essentially taxing the holders.
It's besides the point though, you can certainly benefit from holding power of the protocol but the reality is that there is very little of this dynamic.
Today, the dollar is the reserve currency of note across the world. That may be changing, but I imagine we can agree on that facet of today's global economy.
So, do you think that the dollar - and specifically the inflation schedule and distribution mechanisms of the dollar - can be reasonably said to be under democratic, rather than plutocratic, control?
I have no problem understanding why people in failed states might want these cryptocurrencies. They're essentially more convenient (but also more volatile) means of barter.
But let's face it: most of the hype is in well-functioning democracies. Here, I cannot fathom why anyone would wanna replace fiat currencies with this crap.
Of all the years in which you could make this argument, this year is probably the worst.
In the "well functioning democracy" U.S. You have:
- Mistrust in institutions
- An insane asset inflation bubble fueled by the biggest fiat printing spree ever
Sure, the state hasn't failed. But are you really surprised people want to expose themselves to a new paradigm with different fundamentals for money and finance, this year?
And if the US fails, don't you have quite a lot bigger problems than the currency over there?
Good luck paying for things with cryptocurrency-of-the-day without electricity. Or without authorities to call if your trading partner pulls a gun on you. But I'm sure the American solution is a diesel generator and an even bigger gun ;-)
Because despite it being very bad for the poor and middle classes, money printing is at an all-time high. Just like how neither US party is anti-war (but claims to be), neither wish to give up QE. The system is rigged for the super rich.
I had banker friends bragging me getting sex for approving low interest loans. I'm not sure what democratic control are you talking about, loans are approved by people.
Unlike with fiat, you're not forced to use any particular crypto. If the rich stakeholders of ethereum decide to muck around with the network, nobody will want to use it anymore and the value will drop.
Demanding a single currency to settle debts is a feature, not a bug. I don't wanna spend each morning researching which currency to use today. And I'm sure the local store doesn't wanna figure out which set of ten optional currencies to sell milk for.
This doesn't even begin to consider long term debt.
The justification is that contrarily to PoW, where there are economies of scale on computing power, PoS power scales linearly with your stake.
Mining has been concentrated in the hands of a few gigantic mining pools for a while, and PoS will actually make Ethereum more democratic. Again, this is based on documentation, there might be unforeseen consequences
There are no economies of scale in PoW. At least for longer term. Cost of energy rises locally the more you use it. Cheap energy is somewhat equally distributed around the globe, which ensures geographical decentralization.
This has more to do with electricity demand. It's important to understand the relationship between energy price vs. population density and standard of living. Energy is always cheapest where population density and standard of living are the lowest. That's why bitcoin mining will find it's way to remote sources of natural energy.
No, they can't enlighten you. They've bought into a cult, and if they started considering the fundamental question of how this is better than fiat currency, the cognitive dissonance would hurt.
In truth nobody knows. People hypothesize that recreating financial products on top of Ethereum (or Polkadot or Cordano) will result in competitive offerings.
But it is hard to predict what will actually happen.
It is a system where you have skin in the game, the more skin in the game you have, the more power you have. Think it like a democracy where you are voting with your wallet.
The main difference with the fiat world is that with Ethereum you have transparency, and there is no corruption. You can't just bribe a politician to enact a rule you want. Everything that happens in the network is recorded permanently, and rules are not a suggestion, but a practical reality that can't be circumvented.
There's no on-chain governance like that. Some other blockchains do it but Ethereum devs are skeptical. The upgrade process will keep working like it does now.
PoS is more equitable than endgame PoW. With PoS anyone with any amount of capital can secure the network. Even $10 can via decentralized stake pools.
With endgame PoW only the rich can acquire mining ASICs and locate them in cheap/free (stolen) electricity zones. The vast majority of the world is entirely excluded from PoW mining BTC because the cost of electricity in their region makes mining unprofitable.
So I'm more familiar with how Cardano and Polkadot do their POS rather than Ethereums. In Cardano since the entry level requirement to operate a stake pool is much smaller than it is to do something like Bitcoin mining, it creates a larger number of stake pools. There's also a soft limit on the size of the stake pool that encourages people to spread out their commitment so no one pool gets to large.So at least in the existing POS systems it seems to be working quite well. I'm going to be interested to see how it shakes out in Ethereum because they have to commit their funds. Which is in a way a burden.The more you put into the system for staking the less that you can use.
How do they prevent impersonation? There's no way a cryptosystem can prove that two different people actually have two different keys. If I want to pwn Cardano/Polkadot, don't I just need to run a bunch of different staking keys?
Looking at Cardano. There are currently 2,497 staking pools which are staking 72% percent of all Ada that is out there. Which is about 23 billion coins staked. So if you owned 12 billion cardano and set up 188 pools to hold all of it, yes you would control the majority of the network.
On the scale between a full democracy and a full oligarchy, what you're describing would be a "representative democracy."
Unfortunately, our representatives don't really represent us, so we're much closer to oligarchy than democracy.
Also, a full democracy it terrible. It's basically the equivalent of facebook... having representatives who's full time job is to be knowledgable is much better than giving everyone an equal say on everything.
I wont be having fun, as I wouldn't touch ETH. But you acknowledge this situation is bad, and could be the cause of more drama (potentially economy breaking drama)?
Having an abstract plan to distract energy FUD warriors is not the same as having a technical plan to replace engines on moving vehicles. The drama is real, but it requires putting down the hopium pipe.
People motives to get into crypto are clear. They want to subtract themselves from government policy of constantly printing money. BTC takes care of that and it's a 14 years brand which is extremely politically expensive to make illegal
On the other hand people are perfectly satisfied with their experience on Youtube, Amazon, Google, Facebook, Ebay, JPMorgan etc. which are the entities which Ethereum aims to disrupt
I think you are correct. PoS coin is worthless coin.
Imagine the tales in the future -- about the potential trillion dollar economy that was invented by some internet nerds who listened too much to people that have no idea what they are talking about, and drove it off a cliff with fancy talk of proof of stake (which was actually engineered by the existing powers to ensure their continued control of global economies).
I'm not satisfied with YouTube, amazon, Google, shitbook, eBay, etc.
I want to use a service that protects my data better and drives those dirtbags out of business.
On paper, sure. In practice, having people overworked leads to compromises you never intend to make, simply due to exhaustion and burden clouding judgement values.
Every software error? True. But essentially every software error, especially errors of significance? Untrue. The Space Shuttle control software was famous for its rigorous process control, and deliberately written in a language difficult to introduce bugs in. Over decades of development and 420,000 total lines of code, it appears that a total of 17 bugs ever made it into software used during a launch, with an average of about 1 bug at a time existing in the codebase. Processes to prevent errors from being introduced played a huge part in this, but the comprehensive verification and simulation process was also necessary to achieve such a low defect rate.
The NASA Manager’s Handbook for Software Development from 1990 is a great resource. We have better techniques for some areas now but most of it still holds up.
But I feel it fair to consider an organization like NASA as an exemption from the norm. This level of detailed error catching doesn't make sense for, say, a facebook clone startup.
That said, someone should send this comment to a Tesla engineer.
That makes sense, but the point is that it's still a compromise. Even if we're saying that people can work overtime to get things done, there's typically diminishing returns on each additional hour worked, and still no guarantee that quality hasn't been impacted.
If you ask people to work 12 hour days instead of 8 days, does each day provide 8 hours worth of work, 12 hours worth of work, or another value? Can we reliably say that any problems arising from working over 12 hour days are caught and handled at the same level as they would be if people were working 8 hour days?
> Otherwise, theoretically you can "overwork" i.e. (work more than standard 40 hour weeks or some standard of work hours) whatever without compromise
That's simply not true. Humans aren't machines. Productivity falls off a cliff after 50 hours, and after 55 you may as well not even be in the office. There are diminishing returns with "overwork"ing.
This has been the plan for a long time. But this is like Google deciding to switch to Microsoft Windows, it's not something they can just decide to do one day. There's a process. It's a massive effort and hundreds of billions of dollars are on the line.
The Ethereum protocol was designed with PoS in mind and has a built-in difficulty bomb[1] to prove it. In short, this difficulty bomb makes it exponentially harder to mine ETH over time. The goal of this feature was to encourage all participants of the ecosystem to transition to PoS as quickly as possible.
Given that, the implementation has not worked out totally as expected, as the difficulty bomb has been pushed back a few times over the years. However, to answer your question, the reason they did not move faster is because this transition is hard and plays in some uncharted territory.
> Note that in the future, it is likely that Ethereum will switch to a proof-of-stake model for security, reducing the issuance requirement to somewhere between zero and 0.05X per year.
It absolutely was, Peercoin (PPC), and even DPoS (BTS) predates ethereum too. What are they worth today? PoS is a scam -- also Diem is worse -- it is dystopia.
Overtime != overwork. You've probably programmed something, at some point, where you were excited to work on it from morning to night? Where you lose track of hours, forget to eat meals and completely in the zone? That could easily be the case with these engineers, working on such a historical project and consequential update.
I have been in that zone for two or three day stretches, but never beyond, and never in sync with a full team. I have experienced two forms of team wide over-time in my career. The first lasted (for me) about seven months, then I quit. I couldn't take in anymore and the project (large team, 150 people) was on fire. That was completely unsustainable. The second form was a periodic event that happened every two years when we released a new silicon design (chip vendor). The day that the first silicon was mounted onto boards began a cycle of ten to twelve days, 14 hours a day, lunch and dinner being one hour status briefings. All hands on deck. At the end of those ten or twelve days, either the silicon was fully validated, or all its known flaws were identified. And everybody on the team took a couple days off to breath. That was sustainable because it was infrequent, planned, and closed ended. I went through four of those cycles. They were exhausting and thrilling at the same time. And thankfully, infrequent and closed ended. There was always a light at the end of the tunnel.
This is a different dynamic than traditional organization. It's decentralized with contributors around the world. You have no idea how much others are working and many are contributing because it's something they're passionate about.
Yes, I would not read much into it. In the end, writing "We were sort of working on it at a reasonable pace, you know, work life balance is more important to our developers than finishing a month earlier" just doesn't have the same ring to it :)
Only time will be able to arbitrate this one, but we have consistently pushed out time-lines to ensure that Ethereum remains safe. Ethereum core development definitely favours partition tolerance and safety over liveness.
There will be a new PoW chain and a new PoS chain. The old chain will technically exist but mining on it will be impractical. There is no longer enough interest from miners to make the new PoW chain the majority, so the winners of this hard fork will be recognized as "Ethereum" and the other miners will be relegated to a less influential chain. https://news.ycombinator.com/item?id=26441399
That's true but to be honest they pushed back the self destruct several times in the past and will do so again if needed.
Still it's very likely that this time the switch to PoS might finally happen unless something unforseen happens.
The development was speed up by a (most likely) failed attempt / pr-stunt of miners to block an unrelated change which will reduce their profitability considerably in July.
Can someone give a brief summary of what Ethereum is? Is it a crypto that will be merging with some other crypto? How does it relate to Ethereum 2? Are they going to continue being separate cryptos?
> Ethereum is a decentralized, open-source blockchain with smart contract functionality. Ether (ETH) is the native cryptocurrency of the platform. It is the second-largest cryptocurrency by market capitalization, after Bitcoin. Ethereum is the most actively used blockchain.
It's a blockchain whose token wasn't intended as a cryptocurrency but as a medium for paying for having a program ("smart contract") stored on it run on every node of the network. In practice this can be used for all sorts of things, including bootstrapping the vast majority of other cryptocurrencies currently in existence, but under the current system it can't process transactions effectively enough to be useful in that manner.
As I understand it Ethereum 2, which is a really long term thing they've been doing for years, is meant to gobble up the original Ethereum completely once all stages of deployment are completed (any prior forks that may happen would remain independent, I guess).
It's like Bitcoin except it has vulnerabilities so will be hacked (and it already has been) or taken over by the Zuckerbergs of the world when the incentives are high enough in the future (maybe 5 or 10 years) then it will implode.
Worse, if the overall Ethereum community reaches a consensus that a malicious entity attempted to take over the network, then the devs will fork the blockchain to rollback the particular transactions with the malicious entity, and the new blockchain will keep chugging along as normal while the attacker has just lost a shitton of dollars to buy 100BB. (This is similar to what happened with the DAO previously, although the reason for it was bugs rather than a 51% attack)
This is not what happened with the DAO. This is well documented and I suggest you read up on. TLDR, the hacker tried to withdraw the funds and there was a 30 day lockup period so the contract was updated to stop this.
My understanding was that an illicit fund withdrawing was possible because of a bug in the contract code (more specifically a recursive call loophole), and the community executed a hard fork to return those funds to their original owners. I’m curious as to what I’m misunderstanding here.
You don't double your money - at that point the network is compromised and nobody wants your coins. It's a guaranteed way to destroy Ethereum's value, but the only incentive to do it is to troll. Not too many entities globally looking to spend that much for a laugh, even if they could get the necessary funds in liquid form AND manage not to drive up price with their buy orders.
Perhaps state actors who can print free money would be interested in performing these attacks. Say if a coin was owned predominantly by citizens of one country or if the countries' infrastructure was running on ETH technologies.
Like suppose the banking system was running on ETH. Or if Colonial Pipelines used ETH.
The etherium developers and community have made relatively clear that if someone were to attempt such a thing, the non-malicious members of the community would just fork at the direction of the developers to a chain that is identical except that all of the etherium staked by the attacker is redistributed among the non-malicious verifying nodes, as it would be once the consensus process concluded that an attack was being carried out in a <51% attack scenario.
I can elaborate on any point if interested, but this is covered in the parent.
1. They would drive the price up way past market price in an attempt to make such a large purchase. The cost of a large, rapid purchase is far, far from market price. Only a fraction of the market is willing to sell at current price.
2. If a country wanted to run on Ethereum, they could clone it, since they are giving up the benefits of a GLOBAL system when they take it over.
Lmk if you have any questions. Pretty interesting topic given the insane ETH valuation atm, in contrast to, say, Algorand. Network and first move effects, I guess.
You have to find some people willing to sell you that much ETH. Market depth around the current price is obviously not that deep and it would at least cost way more if you could even find that much for sale anywhere.
Once the attack goal is achieved the Ethereum value will go to zero. It does not make sense to do this by buying coins, but potentially hackers could get control of such big amount of coins by hacking exchanges, thus bringing whole system to collapse. Similar scenario as in Mr. Robot.
Furthermore it's become pretty clear from the many attacks on value tokens in Etherum & BSC DeFi that the attacker can move faster that the market and drain any liquidity pools/exchanges that have open offers into something that isn't going to collapse.
The theory early on was that the coin cratering b/c of an attack would be an extra deterrent, but the price of coins that have been successfully 51% attacked says otherwise.
Here's another cryptocurrency in the top 100 that has suffered many 51% attacks.
If I understand the post you are replying to correctly, the point is that being successfully attacked does not necessarily destroy the value of the coin.
Sometimes people argue that a nation state could "shut down" bitcoin for some amount of money -- say $10B. With that, they could buy enough mining equipment to publish empty blocks and throttle the ability to send transactions.
Part of my skepticism of this idea is that the bitcoin network is already so throttled but it does not seem to affect the value of the coin negatively. What would be hilarious would be if France decided to shut down Bitcoin, and succeeded, but the value of bitcoin then proceeded to increase 100x.
You can DDoS normal, non-validating nodes, and if they go offline, they can be unsure which chain is the true chain, because they were not around.. This means your laptop can never sleep, unlike in Bitcoin, where full nodes may go offline and catch up later.
People who control stake can refuse to include (censor) transactions, as there is no market competition for transaction inclusion like in PoW. In PoW, if 51% of network power is censoring transactions, then censored transactions can attach a higher fee, which competing miners will use to buy more equipment and mine the censored transactions.
These are the ones I know about, that I learned in an evening of research.
This is false. At least false for Ethereum's hybrid PoS.
It uses Verifiable Delay Function as an element of random number generation process. One can look into number of rounds of VDF and treat them just the way they treat proof of work today. It can be compared to determine which chain is the longer one.
Chia Coin is working on a VDF ASIC so that they can correct for it in advance (essentially selling it at a loss so everyone can own the best VDF) but I'm not sure it's the same VDF as Ether.
In addition to the replies, bear in mind that market cap is a bit of a fiction. If you go on a crazy buying spree to take over the network, you'll raise the price of each token in the price due to your own rising demand. It would be a lot more than $100B.
The market cap will also increase as you buy loads of coins. For example if I went on coinbase pro, there are people willing to sell up to 50,000 ETH at a maximum price of $6,000, or a total cost of $220,000 million. Of course Coinbase isn't the only market, but if it was and I bought that 220,000 million dollars of ETH the market cap would now be around 700B, at least temporarily.
My guess would be at some point people would realize a takeover was occurring and panic, but it seems like a 51% buyout would require an ungodly amount of money and time.
It seems like a state actor could do it without much trouble. One important factor is a state actor doesn't necessarily have the profit motive. They could just desire to destroy the ecosystem.
You don't have to buy them, you can borrow them. This opens up a certain type of attack where you promise to pay interest to get control of the stake. If you're running a stake pool, you can pay interest on top of the stake reward. It's possible to run a staking yield farm, where you pay interest in a different cryptocurrency that you can mint yourself.
These kinds of off-network incentives can disrupt the reward system. It's even possible to incentivize a lot of people to collude in a double spend attack if the rewards can be distributed to the participants.
Tail risk as I understand it is going to be fun. If your staked nodes lose connectivity (or your pool's) the network can penalize them by slashing the ETH and the stake, right? So after everyone centralizes on a few nodes in the main providers, aren't bad actors heavily incentivized to attack common infra to remove $/power/currency/voting from others and thus shrink the chain?
I don't think the network can figure out an "oops, AWS or Comcast went out; my nodes at home or in the cloud shouldn't get slashed" vs "lets sabotage an ISP or network for enough time to trigger penalties and repeat it".
You are on point. The solution is (and people do it today) don't run backup nodes, or you will risk getting slashed. Your penalty for missing your vote is very mild - basically not earning the reward for the round.
Yup and accordingly PoS devs have explicitly stated this incentivizes stakers to be spread out, and not only on infrastructure but software, as there are multiple client implementations.
The attack vectors on PoS are less logical than those of PoW.
With PoW, it's all just physics, energy, and math. With PoS it's rich peoples opinions and validation. An attack on PoS will likely be political... and politics tend to slip into war if there's not enough adults in the room.
It's even easier than that -- all you have to do is get a stake and then brute force mine for an alternate reality where your stake is the sole decision maker for the DAG.
You can't really double-spend that way, but you can get a disproportionate amount of the shard rewards. In order to defend against this, other participants will also have to mine for a "more fair" alternate reality, so you end up getting a standstill where nobody can get economic advantage as long as the total power being devoted to preventing chain-shopping is greater than the amount spent on chain-shopping.
In the end the energy expenditure would likely be unchanged from the status quo, it would just be hidden behind a facade of inexpensive proof-of-stake validations that conceal the actual work being done to ensure that this is not abused. This way everyone can feel warm and fuzzy because there's no actual way to measure how much work is being done to keep the validation from being monopolized.
For the people who criticize as to why they've taken so long in shifting to a PoS model: consensus takes time, so does developing and testing something that definitively shouldn't go wrong.
Also, there's the inherent issue with Proof-of-Stake that Proof-of-Work doesn't have: the initial distribution of the coin has to be wide enough before it could feasibly self-maintain a PoS shift without being immediately vulnerable to consensus attacks. Ethereum is definitively mature enough by now, it wasn't a few years ago.
Consensus may take time, but when you're pouring gas onto a fire, arguing that you need to dump out most of the can before you can be sure you know what you're doing isn't a defensible position.
> the initial distribution of the coin has to be wide enough
I don't understand how proof of stake works to the depth I understand proof of work. But this reassures me that it's feasable that they'll accomplish the same distributed consensus.
So then, could I say that Ethereum proof of stake will allow the owners of the coins (ether) to be independent from the owners of the mining operations?
or uhmm...
is the independence between the computaional costs of the "mining" and actual minted ether?
Ethereum proof of work made it so the owners of the coins could be independent from the owners of the mining operations, even if in practice many miners end up keeping most of the block rewards themselves and only reinvesting what they need in new infrastructure and to maintain what they already have. Proof of stake makes it so the miners and holders are now the same (you stake the coins that you have, or you pool them up with others), however the cost to wreck the chain is much greater than it would have been 3-4 years ago.
The whole idea is that Ether is so spread out now, it'd be unfeasible for someone to snatch up enough of it for an attack, in a similar way to how an ever-increasing difficulty makes it harder for a hostile actor to coordinate enough of it to make such attack.
Maybe it is spread out now, but won't there be centralized aggregators of eth so some point in the future a handful of POS nodes control a disproportionate amount of power? Is it so hard to imagine that coinbase or some other exchange accumulates enough eth to sway transaction validation?
I do think there will be some centralization at the exchange level. As of April 2021, Kraken had 600,000 ETH staked for ETH2 [1].
It's not in the interest of Kraken or Coinbase to disrupt one of these PoS networks, but there is some barrier to entry for staking ETH2 or other PoS coins on your own, vs staking them on an exchange. In the case of ETH2, if your staking node goes down, you get slashed and lose some ETH. If there isn't slashing (not all PoS coins have that), I don't see what guarantee of network security or uptime there is.
I'd be curious what PoS coin experts think about this part. It seems like PoS / staking can lead to centralization. PoW has energy concerns for sure, but it has so far demonstrated decentralization pretty well.
I'm legitimately curious about this. I'd love for PoS to be feasible and am trying to understand it more.
Centralization meaning those who have more gain more? I'd love to hear about any currency that doesn't have this feature/bug. Those who gain power tend to be able to acquire more by bootstrapping from prior power; it's pretty much universal. Even PoW has its own form of centralization in that those who have more can become richer and more easily gain therefore leading to maturation (centralization) of the currency.
My understanding is those who have more coins on a PoS network have more stake / power. This can matter if there are things like on-chain governance / voting rights, depending on their stake. Those with more stake would also get more staking rewards (it's like an APR % return based on the total staked), and if they stake their rewards as well, then they'd have even more total stake on the network. There also are concerns with those having a majority of the stake in a network being able to disrupt or attack the network (things like slashing based on poor behavior can prevent bad actors from wanting to do that, as they would lose some or all of what they had staked in that case). There are also different kinds of PoS though, and I'm not an expert on it.
Yes, that's a feature or bug, however you see it, that's universal in capitalism, even communism or socialism what implementations I've read about. I guess if one isn't happy with those that have power in one system, a person should switch to another system. It's just so universal that I don't think there's any other way around it other than switch systems as none are perfect, all insofar as I can see are susceptible to the power of consensus.
We've tried to mitigate it with constitutions in the political world and it helps to some extent but many would agree that there is still an exploitable hole in that those with power can use their own to gain more or mitigate risk. And any time you mitigate that feature/bug too much you run the risk of decreasing reward for work and stake, thereby delegitimizing the system itself or in the case we speak of, your currency. So pick your poison.
>but there is some barrier to entry for staking ETH2 or other PoS coins on your own, vs staking them on an exchange
This is true, but those exchanges either charge fees or are going to charge them, making it more profitable to stake at home. Because offline penalties depend on correlation to how many other people are offline, it's actually safer to stake at home.
Eth was accumulated primarily by devs that understood its value before everyone else. Devs are in general paid well. As a result, it's nothing special for those individuals to own thousands of eth - it was even possible to buy eth below $100 as recently as in 2020. Those 600k eth on Kraken aren't that much relatively.
Right now it's very early and many people aren't staking because there are much higher returns elsewhere, and before the merge withdrawals aren't possible, so you can't even go back if something better appears. I fully intend to stake at home once extreme yields elsewhere stop - in the long run staking is likely to have the highest yield on eth.
>PoW has energy concerns for sure, but it has so far demonstrated decentralization pretty well.
Mining is extremely centralized in China. Mining has infinite economies of scale + less efficient miners are pushed out, so the most efficient entity/location is certain to control all hashpower eventually (not necessarily China).
https://www.nasdaq.com/articles/bitcoin-mining-hash-rate-dro...
I definitely do think centralization is a risk of PoS over PoW.
> It's not in the interest of Kraken or Coinbase to disrupt one of these PoS networks, but there is some barrier to entry for staking ETH2 or other PoS coins on your own, vs staking them on an exchange. In the case of ETH2, if your staking node goes down, you get slashed and lose some ETH. If there isn't slashing (not all PoS coins have that), I don't see what guarantee of network security or uptime there is.
This is actually one place where ETH has tried to incentivize independent staking - the penalty for downtime is equal to the incentive for mining. In an extreme example, if you are down for 6 months of the year, and up for 6 months, the downtime costs should cancel out the earnings from the other 6 months. One caveat to this is that there are larger penalties for correlated downtime (ex: if a large portion of the network is down). This is to de-incentivize centralization of mining.
That said, as someone fairly technical that could run his own staking node, I am seriously considering using a centralized service, or at the very least using a vps. This makes me think that the the majority are going to be independently run on a slew of hosting providers and via centralized hosting providers.
There are also some interesting "decentralized" options like Rocketpool that haven't launched yet, but will allow staking via smart contracts against a pool of random nodes.
And then at the end of the day, the choice in staking providers should allow the network to at least react to centralization risks. Say a locality forces a provider to censor transactions in some way - I imagine folks will move their funds to a provider in another country, or switch to something like Rocketpool, effectively working around the issue.
It is in their interests — remember when CZ asked if it was possible to rollback BTC before the hack? Imagine if you actually gave the exchanges this power. Nothing to stop them staking with customer funds. The exchanges do it now with other PoS shitcoins. PoS is the death of decentralization.
Yes, that's the problem with validation through concensus which is universal in currency. With enough power (nodes) you can delegitimize other stake holders.
Here are a few of the reasons that come to mind as to why this transition has been taking us so long:
* The design of the Beacon Chain is far more optimised than our initial designs for a PoS system
* There are far more crypto-economic edge cases in a PoS system when compared to PoW
* Software development is hard and time estimates are even harder
* The use of a hybrid fork choice to balance safety and liveness trade-offs
* There is a crazy amount of value being handles on Ethereum so it is necessary to be conservative with our changes (move fast and break things is not an option)
* There are 4 concurrent implementations being developed all of which need to be inter-compatible, and production ready
* As Ethereum governance is decentralised we need a shelling point for exactly what Ethereum PoS looks like, this takes time
* We have worked hard to create, encourage, and embrace standards with other chains so that the cryptocurrency community of tomorrow is more inter-compatible (eg. IETF BLS standard or libp2p networking)
* We have spent time designing around quantum-computing resistant backups for the majority of the cryptography (eg. validators all have a Lamport backup key though most don't realise it)
* New cryptography has been developed and previously abandoned schemes revitalised (eg. Verifiable Delay Functions or the Legendre PRF)
* Its a technically flawed solution that now has so much hype, abandoning the idea would lead to further FUD, tarnishing the project's future direction. So we must go through the motions to appease the energy FUD warriors.
As far as I can tell, it was a trick to remove coin from circulation, locking it away where it could not be used again. The fact that people have tokenized these beacon coins on other chains to trade show that people want their money back!
No, it really doesn't. This is akin to saying because people take out second mortgages they really want their money back that they bought their house with.
Being able to leverage a committed sum of money via collateralization is as old as financial systems themselves.
If you can find any specific reasons for your take I'm very open to hearing about them?
In the world of hard money (bitcoin), leverage is extremely dangerous, you may never be able to repay the loan. You would not want to borrow a house worth of bitcoin in a 2nd mortgage -- you could never pay it back!
In the legacy financial world, 2nd mortgages just lead to private inflation of the fiat money supply (the money is being conjured out of nothing to pay for an asset that was already paid for). Nothing is produced, except some energy is burned updating centralized databases.
Having systems where both realities exist is great.
I'm a fan of hard money. It is honest.
I understand what they wanted to achieve, and I understand that they cannot achieve this. Seems that burning absolutely enormous amounts of energy is the only secure way of doing it. I guess rather than fight the universe, we better find a way to do it cleanly!
And by far the most significant hindrance to moving away from proof of work is that there a number of significant players who have a large economic interest in PoW. Ethereum was promising this move many years ago, but it always was an extraordinarily low priority.
There are a lot of people with perverse biases. Many of the comments enthusiastically defending Bitcoin are people who are sitting on BTC and have watched it get pummelled due to its ludicrous enormous-energy-for-something-that-does-nothing-for-humanity reality (seriously -- if I see one more chart comparing the entirety of the financial industry with Bitcoin. The former powers the entire world. The latter powers some speculators, criminals, and a minuscule number of legitimate transactions).
Really? If that energy consumption problem wasn't there, what advantages does Ethereum have over Bitcoin? Would it even exist, since it offers many of the same features?
Ethereum natively supports smart contracts. Bitcoin doesn't support them natively; any attempt to add them has to be a separate layer on top.
That's why the past few years have seen a rise in fungible and non-fungible tokens (average merit of those aside for the sake of argument, since this is just answering the question "it offers many of the same features"), pretty much all of which are hosted on Ethereum or Ethereum code forks like Binance Smart Chain.
So back to the OP's point, Ethereum minus smart contracts and efficient energy use is "nothing for humanity", as if the basic features of money haven't improved our standard of living and there's nothing wrong with central banks and the powerful that benefit from them. The energy used provides immense value today. The costs need to be internalized though.
Interested to hear your thoughts on Polkadot. At the end of the first section, you stop the 'innovation train' at NPOS. Polkadot takes all the ideas presented in your article, combines them and adds a couple unique ideas such as parachains.
(Not the parent poster.) I've looked at it and think it looks interesting, but I think Ethereum may be approaching something like JavaScript's status, now. It's not necessarily technically ideal, but it has first-mover advantage, tons of network effects, and an entrenched position, so it might have already won.
I think there's a decent chance they may eventually pivot a bit and rebrand Polkadot or Substrate as an Ethereum layer 2 platform. They already seem to be leaning in that direction a bit.
I disagree about the priority, they literally didn't know what they were doing or how to do it just yet. The security demands this community wants are and were completely science fiction as there is no proof of stake network that has met the goals they are aiming for, and they are simply much closer to reality now.
There was poor governance and management that debilitated their ability to function during the 3 year bear market. And they got their act together. In the mean time, more product market fit was made apparent and upgrades to the instruction set for arbitrary execution was done to the network and continues to this day.
The Ethereum network consists of many-to-many relationships for approval transactions for ERC20 tokens to interact with other smart contracts. This wasn't even foreseeable 18 months ago, and 18 months before that the ERC20 protocol wasn't even ratified.
This is one thing I've been wondering about new projects that start with PoS. How do they have enough distribution of the coins in order for them to be resilient against attacks?
Exactly, the devil is in the details, just like how all current "scalable" blockchains are only able to do so because they sacrificed decentralization. Ethereum is dealing with growing pains right now because it's solving scalability with an approach that doesn't sacrifice decentralization or security.
AFAIK they are already at 6-8tb for their blockchain. Seems to be not very helpful with a high diversity of staking nodes. I am in doubt that their turing complete global computer can scale AND stay decentralized
That's only for an archive node which isn't that useful to the network and is generally only used by specialist. A full Ethereum node easily fits on a 1TB drive and with research ongoing into statelessness the problem of state growth won't be a problem long term.
This is a good point and I think only ethereum has sufficient distribution. The sole advantage of PoW over PoS is distribution - miners sell, dumping the price, which is also likely to make other people to sell. Even many ethereum founders sold very low - Vlad Zamfir in particular sold ~100% below $20 (he tweeted about it, can't find it now).
Ethereum had 6 years of PoW now - most likely nothing else can repeat its distribution, ever. The time of PoW is visibly over.
Another point is that ethereum was icoed when crypto was tiny, few people believed smart contracts could have value and VC stayed away. Normal people are much more likely to sell just to buy a house. Now new coins start with coins distributed to VC and they are prepared to hold for years hoping for eth-tier returns.
There's an argument that not that many people even knew about the ico - but the same is true for bitcoin mining early. It's very hard to quantify precisely but I think both have almost identical coin concentration.
Be wary of manipulative statistics that ignore the inherent differences between the utxo vs account model - like percentage of coins held by top x%. The assumed practice in an account-based model is for one user to use one address, while the current practice for utxo coins is to use one address per received transaction. Same is true for value sent per timeframe - because utxo relies on change addresses the actual transferred value is much smaller.
Thanks for pointing this out! I never thought about this. To me the biggest long term threat to btc is the shift in block rewards from mined coins to transaction fees. I am assuming a possibly much smaller security budget available for “wasting energy”. But at that point it still might be enough as there is no network effect supporting new pow chains anymore, that could threaten btc security by having more sha hashpower.
I wonder how this will impact mining? Will GPUs suddenly flood the market as it becomes much less profitable to mine? God I hope so the GPU shortages have been crazy.
I've be lurking heavily in the crypto-mining communities for a few weeks now. Most are saying they'll just "move to a new coin" which is basically all they CAN do, unless they cash out early and sell their hardware. Nvidia is releasing* "LHR" (low hash rate) cards to give gamers some relief (assuming they can't be jailbroken).
Unfortunately mining is only a small part of why GPUs have been so expensive, but hopefully this will contribute to making them cheaper in the long term. If they don't mess up again.
I get that (chip shortage, covid demand surge etc.), but there's a clear distinction of availability between GPUs that are suitable/unsuitable for mining.
Its difficult to calculate exactly the % of GPU miners that are mining Ethereum, amongst all possible choices. My estimate is 50% - 90%. (Maybe someone can reply with better data?)
When Ethereum can no longer be mined, the returns on mining the remaining 'altcoins' will fall equal to the level of new mining power that enters.
Which might very well make GPU mining uneconomical across the board.
All of the people currently mining Ethereum will switch to mining other coins.
But, the mining rewards for those other coins are typically static.
So you'll have a dramatically increased number of GPUs chasing the same number of coins - which is going to result in increased mining difficulty and reduced profits, potentially dramatically reduced.
That driver was just for the 3060 LHR. The 3080, 3070 and 3060 Ti LHR will require newer drivers. It's still possible for NVIDIA to mess up and release a newer driver without those limitations again, though.
Some of these earlier cards already have been jailbroken. Ultimately, it's a question of whether it makes sense for miners to sponsor a cracking effort vs the cost of buying the more expensive cards outright.
Maybe this is a good time and place to ask - let's say I want to buy something using Ethereum. Is it correct that when I look at, say, https://ycharts.com/indicators/ethereum_average_transaction_... , you have to pay USD 20 just as payment fees? I wrote off Bitcoin as a payment mechanism a long time ago because of this (although it seems BTC tx costs are now lower than ETH?), is this the direction tx costs for all crypto coins go?
That chart is highly misleading, as it includes all smart contracts. In ETH a basic transfer (like BTC) is often cheap (although it needs to be even less!), however interacting with a smart contract can be more expensive. If you want to interact with a highly complex smart contract that pulls a lot of state it can be 100x the cost of a basic transfer... just depends on the code.
Not sure how it all works, but I assume it's broken down for a purchase on something like Coinbase card - eg. they bundle a load of card transactions into a ETH to fiat conversion for Visa
All the Nano was invented 100% the day it was made. So its really just a shell game to pass on the worthless day 0 tokens for more than 0 after day 0 -- just like every other PoS coin ever. Contrast with PoW, where coins cost REAL money every block to produce.
It costs very little to transfer something of little value.
Costing money to produce doesn't make something inherently valuable. It would be expensive to sell iPhones crushed by previously-undriven Lamborghinis, but the product would still be worthless. Neither NANO nor Bitcoin have any inherent value. It's entirely derived from other people willing to pay for it. If people want to use a cryptocurrency, using something that doesn't require 15 GW to power could quite rationally be more valued more highly.
Ironically, that's because the value of value of Bitcoin has plummeted compared to Ehtereum. A month ago today, an Ethereum transaction would have cost $21 while a Bitcoin transaction would have cost $45.
The important take away from this comment is that nano like other “fee-less” cryptocurrency have little use so they’re clever way to achieve these goals have not been really tested. For example nano was recently DoSd for multiple days because of their clever no fee solution.
That is correct, to run an on-chain transaction is fairly expensive. There is a lot of ongoing work to address this: Layer 2 solutions like optimistic rollup, arbitrum, etc. EIP-1559 itself will address this problem on layer 1. But the ecosystem is not mature yet. If/when the scaling problem is finally solved, the legacy financial system will change rapidly.
To directly answer your question: currently, ethereum has the same fundamental scaling problems that bitcoin has (limited global throughput)
Bitcoin's attempted solution on this front is off-chain scaling via lightning network. As far as I can ascertain, this has had highly limited adoption.
Eth's attempted solution on this front is sharding. I can't claim to be an expert in this, but from my understanding after proof-of-stake is deployed, ethereum plans to deploy something like 64 separate "shards" which, from my understanding, are like extra blockchains for conducting transactions, and using some kind of complicated proof of stake system to keep it consistent. In this case, while the main-net still has limited global throughput, scaling up to add more side chains will allow scaling additional throughput. You can read more here https://ethereum.org/en/eth2/
As with lightning, we don't know how well this will actually end up going until it's deployed.
Eth has a sidechain called Polygon with orders of magnitude more usage than bitcoin's lightning network. There are a number of other promising "scaling solutions" launching in the coming weeks. Sharding is unlikely to happen in 2021.
Ethereum has set aside sharding temporarily to focus on PoS. The plan to scale in the short-term is to use technology called "rollups" which put a transaction's signature data off-chain while keeping its data on-chain, effectively "batching" a bunch of transactions into one.
Just to put an anecdote to the question, I made a withdrawal from my mining pool to my wallet 2 days ago and for an nearly instant transaction it cost me ~$2USD. Higher than I'd want in any currency, but it definitely wasn't $20USD
Strange. I made ~5 ETH transactions a few days ago (interacting with a smart contract) and paid ~$90 each. Around the same time I made a few transfers, and spent about $25 each.
I mean, yeah. I’ve seen Bitcoin-accepting shops once or twice in my life. But the parent claimed “there’s a ton”, so I was wondering where I can find those.
For a basic transfer, it's probably best to use a gas tracker like: https://etherscan.io/gastracker to check on costs. It's about $6-8 at the moment. The average tx cost is going skew much higher because of DeFi transactions. Uniswap V3 is scheduled to deploy on Optimism potentially in a few weeks which may help alleviate fee pressure (although as you can see from the linked gas tracker, Uniswap V2 is still consuming a large portion of txs). The bet is that a combination of L1 and L2 improvements will bring transaction fees back to reasonable levels in the next year or so. If it doesn't, there are a host of new competitors like Algorand or Solana that are looking to supplant Ethereum (and do currently provide much higher transaction throughput and lower costs).
In general, fees go up as the token price goes up since fees are usually charged as a function of transaction size or complexity, and also fees rise as a protocol hits its tx limits, but not always. Nano is an interesting cryptocurrency that is fee-less (although they just had to roll out an emergency update to improve spam resistance), so it's possible to design a fee-less system, but it's certainly even more experimental atm.
There are, however a number of cryptos that currently (and by intent) have <$0.01 (sometimes significantly less) fees. This includes (just going down by market cap): Ripple, Bitcoin Cash, Stellar, or Dash. For transactions, even though fees are a bit higher (about $0.06), I like Monero since it's one of the most private and widely used cryptocurrencies out there, and it's fees have actually significantly decreased due to technical improvements in transaction efficiency, dynamic blocksize, and an algorithm that can actually reduce fees as volume increases.
Yep. Not much, if anything, has improved since you wrote off Bitcoin. One of the problems is nobody really cares about having a new payment mechanism. You can explain fractional reserve banking to people, explain how the 2008 financial crisis happened, even give small scale advantages like sending money overseas, and the vast majority of people just don't care. Until people start caring, nothing will change, and crypto will remain a zero-sum pyramid scheme.
Nobody knows whether or not cryptocoins are currencies of the future but I'm certainly willing to let them innovate for the next few decades figuring out if there's a path forward.
However, I cannot abide by a money speculation mechanism which uses as much electricity to mine worldwide as the Netherlands use in total. That's absolutely asinine to me.
$20 is a little high. ETH transactions are variable cost; more complex transactions cost more. In order to get the price of a simple transfer you can take the current gas price (for example, from https://ethgasstation.info/index.php), which is 87 right now, multiply that by 21000 (cost in gas of a transfer) and divide that by 1 billion. So a transfer costs 0.001827 ETH or ~$6 if you want to happen within a few minutes.
So yes, it's currently not practical for microtransactions.
> I wrote off Bitcoin as a payment mechanism a long time ago because of this (although it seems BTC tx costs are now lower than ETH?), is this the direction tx costs for all crypto coins go?
No. There are developers who actually prioritize on-chain scaling. For instance Bitcoin Cash and Monero have very cheap fees, and they will stay cheap for the foreseeable future.
The last time I received a Bitcoin payment, it cost $0.36 in network fees. The network is currently more congested, so the fees are higher at the moment.
I feel like ETH is in very good footing to move to Proof of Space (decentralized network, good dev work, lots of distributed stake), especially in comparison to other projects that have gone with PoS. I'm sure it'll succeed in many ways, but I can't imagine moving away from Nakamoto consensus is going to be "the solution" generally for how to create a working, scalable, well distributed currency.
I know this is a pressing matter, and that has relevance for itself, but after the whole Elon Musk thing it just turns this into a reply to his tweet, where so many cryptos folks were spamming "we use less energy then bitcoin! choose us! we're open to talk!"
Which in the lights of the recent events sounds like: "pump us this time around!"
Makes you question: when would be a good time to address this, if they can't time travel to the day before Elon posted the tweet?
And I don't know the answer to that. Was this too soon? Well if they want to take the ride of Elon controversy, I don't think so. Is that a good thing? Who knows.
It is a reply but it was also well known that they were looking to improve with a proof of scope concept. This will require 100x more storage space in place of compute power.
The market is wondering what will happen next. So ether published their progress. I just want to know how realistic are they with their schedule.
I was fairly into the space in 2014-2016 but stopped paying attention the last few years. It seems like lots of theorized applications actually exist and have a proof-of-concept now.
If I’m building a marketplace business in 2021, where I want to be “crypto-first” instead of relying on PayPal and Stripe Connect, where do I start?
The marketplace sells access to resources with an off-chain ACL system. It facilitates trades between resource sellers and buyers.
I assume I want a smart contract between buyer/seller to record resource grants on chain, which the access layer checks as a source of truth.
But if I were to do this on Ethereum, the gas fees would be really expensive. I’ve heard about Polygon and “optimistic roll-up.” Is this a viable solution?
Low fees - but only once you're in the crypto ecosystem.
If you're after dollars or euros, the on-ramp and off-ramp at exchanges adds a comparable, if not higher layer of fees than existing payment mechanisms, kind of defeating the whole purpose.
> If I’m building a marketplace business in 2021, where I want to be “crypto-first” instead of relying on PayPal and Stripe Connect, where do I start?
Unless you are building a dark web market, why would you want to? It will be more convenient for the vast majority of users to pay with card or PayPal.
I believe there are some use cases. Think of a government which does not allow currency conversion to more stable currencies in a place where volatility or inflation is very high. In that situation, it might be worth adopting a crypto-first approach, no?
why does it have to be a dark-web market if blockchain payments are first class citizens? I suppose the general population isn't ready for decentralised payments yet or do you have another reason for such use-case generalization?
There are still many barriers to that "first class" status, taxes are mentioned most often.
Taxes are paid in fiat. Holding non-stablecoins would add even more of a tax headache because you'd have to track capital gain/loss as you enter/exit fiat for taxes / fees / vendors that don't accept crypto
Also the fact that general adoption has been slow so far may be a sign that there is not enough obvious value added for the average person to consider using crypto over fiat.
Polygon & "optimistic roll-ups" are generally referred to as L2. In general this part of the etherum ecosystem is just starting up and the only one that has seen much adoption so far is Polygon (which did 4M tx yesterday & still has low fees).
Using an L2 system will mean that your user will need to be using that specific L2 system as well, but the UX doesn't seem so bad (at least for ETH -> polygon, and for the cryptocurrecny space so far).
ETH 2.0 will reduce gas fees somewhat on the mainchain, but it's fairly obvious that there's huge demand, the sharding that ETH 2.0 will do is create 1 shard for execution & 63 for data only. Most L2 systems will mostly use the data shards, so we appear to be heading towards an L2 future.
In short if I were building a company in the space I'd be looking at deploying both on the mainchain (L1) and on a L2 system, but prioritize the L2 system. Unfortunately we may end up in a world where there are dozens or more L2 systems and either the users or the companies have to pay the cost to hop between them.
Realistically, you can't. Unless you want to be a very early adopter, no mainstream businesses are accepting payments in crypto. Techwise, Coinbase has a thing: https://commerce.coinbase.com/
To add my experience. I looked at rolling out Coinbase commerce a couple of years ago and then again a couple of months ago. I found their current integrations lacked support or were seemingly abandoned.
Contacting general or merchant support often took over 2 weeks to get a response, which was a deal-breaker for any service that would inevitably impact customers on our end.
I'm not even really talking about technical limitations. More that 90% of consumers don't own any crypto. And (more controversially) it has completely morphed into an investment asset class. One that is possibly in a deflationary spiral where no one wants to spend any of it. IMHO it has really failed in it's mission of actually being a currency.
This is a great solution called zk-rollup (zero knowledge rollup) https://zksync.io/
It is just as secure as the base chain (unlike polygon) and has low fees and has been live for the past few months. This is a perfect solution to simple payments.
The difference between optimistic rollups and zero knowledge rollups is that you can’t deploy arbitrary smart contracts to zk rollup, it only supports a limited set of use cases, such as simple payments for now. Read more here https://vitalik.ca/general/2021/01/05/rollup.html
If you as a reader are interested in math & crypto the stuff being done in the zero knowledge space w.r.t. cryptocurrencies is really cool regardless of your opinion on cryptocurrencies in general.
the current solutions do 'native fees' which means you pay the fee in whatever you are sending. This can't really last because I could create SPAM coin with 1B marketcap and overload the network with it.
IIRC they'll eventually create their own native token when their EVM compatible rollup is out.
ETH wont, and shouldn't migrate to PoS. PoS is a scam -- a trick, a reinvention of existing corrupt economic models.
It throws out the greatest part of decentralized cryptocurrencies -- trustless, independently verifiable, auto-adjusting to external conditions, hard to fake proof of work. It replaces it with shell games and chicanery.
I am very pro proof of work. The energy usage is a good thing. We can deal with the emissions from generation out of band, it is not the protocols problem.
Two primary concerns, technical feasibility and political strife:
I have my extreme doubts that you can move a chain like this without causing it to collapse. As yet all we have seen out of the eth camp is more broken proof of concepts -- not a viable model for a potentially trillion dollar economy. How to you replace a jet engine mid flight? (You don't. Unless you like not safely landing).
PoS coin is worthless coin. If you want to have your expensive-to-mine gas coin be worth something, you have to make it hard to acquire. My second concern is that if they do manage to 'migrate', enough folks will ignore this and keep mining. This is a problem today with more contentious PoW hard forks.
Ultimately this behavior will lead to more chain forks, which unlike in the ETC days actually is a big deal today. Whos USDT USDC etc is the real coin? The eth1 PoW 'legacy' network, or the eth2 'pos' chain, or what about the eth1-a/eth1-b fork when the first political staking challenges come up (see all world religion schisms).
PoW solves this problem. One truth, enforced by universal energy usage. Not power players arguing over interpretations of religious text.
Proof of elapsed time? The intel thing?
Only works with trusted nodes and/or permissioned blockchains; not suitable for trustless/permissionless public chains.
The only trustless consensus system we have today is proof of work. And it works well, at scale, for 14 years.
Irrelevant. Well designed networks are pretty much isolated from whims of miners. Ethereum is one of them, Bitcoin is not. I'm speaking about 2 weeks difficulty re-targeting window vs single block window.
> It replaces it with shell games and chicanery.
Why do you perceive it like that? I would love to hear details.
Ethereum will use hybrid PoS. Where random number generation (deciding who will become next block producer) is separated from deciding who is in the pool of potential producers (anty-sybil defense). First will be decided with commit-reveal scheme unbiased with the use of VDFs, second - with PoS.
Sounds like a shell game to me. You know what isn't? Burning energy, using a simple hash function to measure how much energy was burned. Simple, effective, safe. Energy usage is a good thing, actually.
There is nothing simple about hash functions :-) They rely on unproven mathematical conjecture that one-way functions exist. Their existence would imply that P!=NP :-)
Re: shell game. Are you implying that fraud or misdirection is involved? Some bitcoin scientist should be able to point where it is hidden. Or is it just a claim without evidence?
Is it possible/likely that exchanges are going to abuse their position and secretly use everyone else's ETH for proof of stake while they're holding it?
Like they do on all other PoS (worthless) coins? Yes.
This is the fundamental problem. We have seen chain takeovers from this exact scenario. See Steem / Hive for an example of how this can go very wrong.
You can buy them right now. In fact, two months ago I bought six 3090s and 15 3080s with a two phone calls and maybe twenty clicks.
The part you're missing is the price. It's my secret, but I'll share it here. You can buy a Dell R12 with one of those cards and, upon receiving it, sell the components for more than the purchase price.
Ethereum doesn't have an energy problem, energy have an Ethereum problem.
Don't get me wrong, it's great that they are working on becoming more effective but the idea that we should judge new technology purely on it's environmental impact as we see these days is counterproductive to progress. Progress from 0 to 1 will always be less effective than the optimization that follows.
We should be much more focused on how to make sure that any technologies energy usage doesn't become an issue by creating clean technologies with high energy density, which are reliable, plentiful and scaleable and doesn't require backup sources.
Every staker preserves their fraction of the (increasing) pie by staking. Those who don't stake slightly lose in their fraction of the pie, benefitting all stakers by the same percentage.
There are staking pools that allow you to stake with less than 32 ETH and pool those together to participate. We understand the requirement of 32 is high but that doesn't mean it is impossible to participate in staking with less. Rocketpool or Lido finance are examples.
It's not just about that limit though and it's not even a complaint to be clear. If eth pays me 5-10% per year for a simple cryptographic signature, great, not gonna say no.
But it inherently makes the system unfair, I have 0 pressure to sell that eth since it didn't really take me any effort to make it and I don't need it to cover life expenses, whereas for someone who has much less money, well that return on their eth (say from pools), they'll probably need to sell it to cover some other costs (rents for example). So for the wealthy, their shares grows while everyone has pressure to sell. There's also a cycle where if you're a staker and few other people sell, price will skyrocket, make it even more unaccessible.
I really hope that we avoid these scenarios in real world, but I'm a bit skeptical.
This may be a radical take, but I think nations should introduce some unprecedented legislation: ban trade of proof-of-work cryptocurrencies.
Don't ban their trade because they make poor financial products, either because of rampant fraud or criminal activity. That's a different argument and requires different approaches. Ban their trade because global society shouldn't accept rampant incentives to literally burn up energy [1] to make financial products. Especially because proof-of-work simply just isn't necessary to have cryptocurrency.
Banning their trade won't categorically stop PoW cryptocurrencies. What it should do is completely tank their value and get the world to move on to less destructive coins.
I don't think there's any precedent for banning classes of financial products for environmental reasons, but it's time to create one.
[1]: In addition to environmental reasons, there's probably also economic ones. Mining burns through other scarce resources such as chip production capacity, although the true impact there is unclear.
It's a difficult problem, but there are coins that have managed it. Stellar has piggybacked on other services to distribute – Facebook, Keybase, and Coinbase. There's an energy-efficient memecoin that distributes based on Folding@Home contributions that has become the #1 monthly F@H team.
Many industries do a lot of harm to the environment for profits. On the spectrum of those, where do cryptos fall?
I don't know and personally hold only a little bit, nothing I would be very pained to lose, but it would certainly cause a lot of economic harm to a lot of people to do what you propose. The idea cannot be taken seriously without first answering my question.
The first source does not seem particularly reliable, it makes some back of the envelope calculations based on extrapolated stats that are not even sourced.
Other sources put Google’s total energy usage (including youtube) at around 12 TWh [1]. Total datacenter usage is estimated to be around 205 TWh [2].
Youtube provides entertainment for literally billions of people
Bitcoin provides... idk a way for some people to make a lot of money and some others to lose it?...
Even if we say that BTC provides some value by transferring money etc. the amount of value per Watt is so slanted its ridiculous to even make that argument.
Because entertainment is so useful? What's your utility function to decide which one is more worthy of using electricity? Why should we use your utility function in particular?
Bitcoin is an independent financial network. It opens up economic access to literally billions of people currently shut out of the traditional financial system. I'd say that's quite valuable to the human race.
If the government wants to put a higher price on energy or carbon, it should do so. But it should not be the arbiter of what's a worthy use of energy expenditure.
I could see a lot of people make the argument the production of a lot of energy intensive goods is not worth-while.
Government is made out of people. If the people don't want the economy oriented around energy being put into finding hashes, they have the right to vote.
So why does the buck stop with government then? If enough of us agree that a law should be passed then why not just pass the law? Seems way easier to just make a rule than try to individually convince everyone.
It's an eventually sort-of-consistent system with a lot of buffering and delay.
if enough people agree that a law should be passed, and it's a high enough priority, and the opinion stays that way for a long time, then eventually enough politicians get on board by virtue of pressure from their voting base, and a law gets passed.
It's not great.
But on the other hand, near-immediate direct democracy is also not great, because it leads to knee-jerk reactions causing laws put in place. I'm thinking of stuff like the USAPATRIOT Act, except worse.
Obviously the people want to put energy towards finding hashes or they wouldn't be doing it. What you're advocating for is a minority of people who actually vote to influence the government to send people with guns to stop the actions of people who are voting with their labor.
There will come a time when people like you -- who play God over others -- are ousted from society.
"The people" who do it are less than 1% of "the people" a government represents.
There are already laws in most countries forbidding you to litter, and you would never call that "playing God" - it just happens that littering with crypto mining is a multi billion dollar industry.
That's like saying people shouldn't try to ban meth because meth cooks are working hard.
It's just not a realistic outlook on how typical people want society to function. Most people do not believe PoW cryptocurrency is important to society.
Isn't proof-of-work intrinsically wasteful though, as a proxy for costing money (e.g. instead of paying money directly for the right to mine BTC, you buy electricity and burn it)? In any context other than cryptocurrencies it seems like microtransactions would be a better choice.
Proof of Work used for decentralized consensus is maximally wasteful by design. It has to be a race to burn more resources than anyone else can. It's unfixable.
Governments already have regulations for energy efficiency, waste and pollution, and for most things it's possible to negotiate reasonable limits.
For PoW it's not possible. If you put an upper limit on its wastefulness, it'll be a limit on its security. Even if we had a Dyson Sphere, PoW would eventually eat more than half of it just to be secure.
The government is made out of people and if history has taught us anything, power corrupts those people. Income inequality has only risen since the last financial crisis. Decentralization of money is the whole point of this exercise, and many believe Proof of Work is superior to Proof of Stake because work is actually scarce. Once you make it cheap to transact, that opens up all sorts of attacks (spam, phishing) and devaluation. Since PoS can be copied very easily, many corrupt governments will do just that.
>it should not be the arbiter of what's a worthy use of energy expenditure.
I disagree. If we must cap the CO2 we can emit, we should definitely favor basic needs over luxury. Here in France, the government tried to set a carbon tax on gas (which is required for many simply to commute to work, with no affordable alternatives yet) but they refused to impose a tax on jet fuel which is known to be used by the ultra rich to fly their privates on the weekends (while they can afford high speed trains).
We should not just let money decide what's possible, when so many are still in need of basic necessities. Many could pay a 300% tax just to fly 10x a year across the globe (emitting many, many times the carbon footprint of an average household). How would that be fair, when the problem is not what people pay but how the planet is becoming inhabitable?
I'm sure jet setters consider their private jet as a basic need, too.
What's interesting, is that you can gather ~300 random citizens - including jet setters and cryptofans - and let them think about it for two years in order to decide what they considered as basic needs, on a consensus basis. And then, we can organize a vote (e.g a referendum) to make sure society finds a common ground on this (just like we do for most things, such as banning crime).
PoW is different because it's energy use for its own sake.
If carbon taxes go up, some things will no longer be worth spending energy on, but crypto mining is just competitive, so the value of mining will go up with the cost of energy and keep using as much energy as ever. The only thing that can stop it is reducing demand for the coins, which the government is not even trying to do yet.
> but crypto mining is just competitive, so the value of mining will go up with the cost of energy and keep using as much energy as ever.
That is not true. If the cost of energy increases, mining / hash rates will decrease. Miners are competing, and the limit to the price they will pay for electricity is the value of the cryptocurrency they are earning for the activity.
If carbon taxes go up, miners will be incentivized to pursue low/no-carbon alternative energy sources, thereby accelerating the shift to cleaner energy. Mining can either be viewed as creating a profit incentive where none existed before, or at least enhancing the profit incentive even further. Clean energy needs more profit incentives to really scale adoption.
I am all for carbon taxes, to shape the market towards cleaner energy. And I do think it will successfully push miners even faster towards adoption of other energy sources.
Government should arbitrate inappropriate use of any utility resource, including energy and water. In many cases such restrictions already exist for water.
I cringe every time I see such comments. Ban bitcoin or ban beef because it uses too much energy.
Humanity will continue to require energy as it advances and banning anything "because it uses too much energy" is a ridiculous advice. How about we ban gold mining, or set quotas on the number of children people may have, that will surely contribute to our CO2 reduction goals. It's also Orwellian and reminiscent of how the world looked like for citizens of the USSR back in 1960-1990
I’m sure businesses that rely on dumping arsenic into the local lake don’t like having their livelihood threatened either. Property rights matter. Right now the market is broken.
We have banned a ton of things because they are bad for the environment. It has worked and will continue to work. Things like building design and construction standards are set to a minimum environmental standard, why shouldn't cryptocurrencies.
No that isn't all YouTube does thank you very much. It's one of the greatest treasure troves of educational video content. It has helped my life, career, and those of my friends. It has probably contributed far more to humanity's advance, in efficiency alone, than most other websites of its kind.
That you only use it to watch videos that bring zero gain to your life is a You problem.
"the internet uses 10% of the total electricity consumption worldwide. How much of that is consumed by Youtube? After Netflix and embedded videos, Youtube is the third biggest global internet bandwidth eater. About 11.4% of global internet traffic is consumed by Youtube"
That figure assumes that the electricity usage of the internet is exactly related to the amount of bandwidth - so if YouTube uses 11.4% of the internet's total bandwidth, that means that YouTube uses 11.4% of the internet's total electricity consumption.
I think the difference is that a means of building green buildings and green cryptocurrencies have been proven viable. Once the same happens for the category of product YouTube falls into (which goes beyond just video distribution), the non-green way can be eliminated.
A quick google seems to turn up that this claim is from thefactsource.com based on the internet uses 10% of global power. And YouTube is 11% of internet traffic. So 1% of global power.
VS
An estimate of Bitcoin power consumption by the Cambridge Centre for Alternative Finance.
I know which one I’m more prepared to believe.
Even if this were true. I go on YouTube and can learn things: recipes, FreeCad tutorials, coffee nerdery, harmonica lessons.
But again, read what the person you are responding to wrote. YouTube provides something of value to millions. PoW is not required for cryptocurrency to function. PoW provides no value. It wastes time and energy for the sake of wasting processor cycles.
Come on... PoW provides no value? So the almost $1 trillion in Bitcoin is just, nothing? Not worth anything? I think the people invested would beg to differ.
There is no need for Bitcoin to use PoW. Bitcoin can continue to exist using a different algorithm to establish distributed trust. But since you brought up Bitcoin, yes, I would say that it provides little value to society in it's current state. It operates primarily as a speculative investment rather than a true currency.
What would you propose the Bitcoin core team should switch to? Have you looked into the other algorithms, the feasibility of migrating of the existing network, etc.? It sounds more to me like you've just written off cryptocurrency in general.
As far as I can tell PoW is the most proven consensus mechanism so far. PoS may be promising though. ETH2 successfully switching will be telling.
I haven't written off anything. PoW is inherently flawed. It does not scale and Bitcoin has proven that. Bitcoin averages ~300K transactions a day while using more energy than some countries. That is unacceptable.
Bitcoin is like gold. It’s valuable because other people say it’s valuable. But nothing useful happens when you mine crypto. Was I entertained? Did I learn something? Are they producing a widget? Even gold can be made into jewellery or used in electronics. Crypto literally just uses power.
There is no subjectivity here. We are not discussing the perceived value of cryptocurrency. We are talking about the value of the PoW algorithm. It is objectively wasteful. It is wasteful by definition. It's entire purpose is to force computational resources to spend cycles on computationally expensive problems that provide no value to society. It is an interesting an novel idea but it does not scale and that is a problem since there is a very real cost to society in expending significant amounts of the planet's resources for no gain.
That article assumes that if YouTube is 11% of total internet bandwidth then YouTube is 11% of total internet electricity usage. That's a very dubious assumption.
YouTube also promotes conspiracy theories, racism, anti-intellectualism, authoritarianism, anti-vaxxing, and so on. These things pretty severe negative externalities, to put it mildly. So let's not pretend that YouTube's existence is a net-positive for humanity; that remains to be seen.
Building construction standards are a great example of regulatory failure.
By optimizing around energy conservation at all costs, we have homes that cost 3x, held together with glue, susceptible to mold, and filled with toxic crap like vinyl.
i find views that want to ban anything for energy consumption ridiculous. also what the people advocating for this kind of thing are missing is that it’s all fun and games until something you rely gets banned because of reasons.
here are my proposals:
the entire banking system is obviously using a lot of power. how about we ban banks and go back to using paper money. that’s def more environmental friendly. /s
electric cars run on energy that’s generated with coal. that’s not cool. let’s ban electric cars and keep driving gas cars. they have been around for a long time and the technology is so good that we actually pollute less with a gas car /s
the internet in general and datacenters in particular are using a lot of power. let’s ban datacenters. guaranteed between environment afterwards /s
We have banned low efficiency vehicles (CAFE standards), we have banned refrigerants that are bad for the environment (CFCs). We have things that clearly cause massive amounts of societal harm (leaded gasoline). The market didn't solve any of those issues, the government did. I for one am extremely happy that we live in a world that is not poisoned by lead and that still has a functioning ozone layer. Its kind of silly that you are equating bitcoin with the entire modern banking system. The regulations to ban leaded gasoline didn't destroy automobiles, they just made them change. Changes to proof of stake aren't existential to BTC holders, but they are existential to the rest of us.
Also "until something you rely gets banned", what do you rely on bitcoin for besides being a store of value?
yup. it is silly to compare the banking system with bitcoin. bitcoin is obviously better. does it close at 5pm? does it close on the weekend?
my point is that you don’t get to decide what i consume. and banning bitcoin == banning any type of computing that you don’t like. do you understand how much power a modern datacenter sucks? do you also understand that some things that run in a datacenter are straight up dangerous to the fabric of our society?
"my point is that you don’t get to decide what i consume"
I am not making any decisions about your consumption. Our democratically elected government is responsible for making the best choices that balance our societal needs. Our government already regulates a lot of things around computing: Child porn/CSAM, export controls around cryptography, data privacy, the computer fraud and abuse act. This isn't novel stuff, having a computer doesn't mean you can do literally anything on it with zero consequences.
Because electricity costs money. When the cost of electricity exceeds the value of coin you mine, you will stop mining. If you make a coin that takes half as much energy to mine, miners will just mine twice as much of it. Its like y'all are just discovering capitalism for the first time.
>or set quotas on the number of children people may have
Some people consume 10x less energy than others, so blindly capping the number of children does not seem a good idea. What about capping the carbon footprint per person instead?
We track and tax revenues (not perfectly but as well as we can). We could definitely track and cap carbon emissions. Sounds good to me!
> Humanity will continue to require energy as it advances and banning anything "because it uses too much energy" is a ridiculous advice.
Not right now it's not. Not when we have constraints on how much CO2 we can pump into our atmosphere.
Right now, and I mean right now, when we're having huge problems de-carbonising the planet's energy supplies and are risking making life very uncomfortable for ourselves for decades or centuries to come, limiting energy use is actually one of the few levers we have to try to make a difference.
In this current situation, bringing online a whole new mid-sized country's worth of energy consumption for a financial instrument is ridiculous, and a huge own-goal for humanity.
Very bad. Ive got another radical take -- cypherpunks should ban proof of stake cryptocurrencies. They are bad for freedom, bad for decentralization, bad for store of value. Wall street tricks attempting to put the genie back in the bottle.
Proof of work is the only thing of value, the only distributed consensus model that is secure and the only way forward for store of value cryptocurrencies.
If you want less carbon burned, tax carbon. I'm skeptical of cryptocurrency, but the idea that regulators, already captured by banks, should aggressively ban new financial products that may one day threaten the incumbents makes me wary.
A carbon tax would filter down to the electricity consumer cost. I dont know about you, but I dont want to pay more for electricity so other people can burn electricity for virtual money.
Unless you are suggesting taxing crypto itself, in which case… sure!
That's a common take, but a well-designed carbon tax could be made revenue-neutral and non-regressive.
In other words, the amount it takes in can be given back to the average person -- in forms of tax rebates, investment in public transit, education, whatever. In an ideal world a carbon tax would have no adverse impact on lower and middle class people.
I should also add that in that world higher electricity cost due to carbon tax is a good thing -- it'll help carbon-neutral sources of energy to compete and replace the more dirty forms. Which is exactly what we want.
I have nothing against carbon taxes actually would love to see them implemented, but I am not sure how they would help prevent excessive energy use due to crypto. OP was suggesting a carbon tax instead of direct regulation, but I don’t quite get how it would dissuade crypto use without increasing electricity costs.
As others have said, a carbon tax can be designed to refund either the entire amount, or a portion of the amount back to consumers, which might also transform it into a non-regressive tax.
But perhaps more importantly, you wouldn't be taxed because others are using electricity for virtual money. You would be taxed because your carbon emissions are causing climate change, and to encourage you to reduce energy usage where possible.
All money has a cost on society. You have to do something to maintain its value. You don't think wars in the middle east -- to maintain the petrodollar -- have an environmental impact?
And when it isn't oil it'll be fights over germanium and lithium veins.
If you actually cared to do more than sit in a chair -- advocating random things you didn't research -- you'd be advocating for Thorium power. Thorium is nearly as abundant as lead -- it's all over the place -- and it's much more clean and less dangerous than even solar or wind.
Yes, because that's the negative externality, the carbon that you dump in the atmosphere by consuming electricty. Would you be willing to pay more so that videogaming is not banned as well, or would you ban that too?
Also, you can make the tax progressive so that the high consumers can pay much more.
What if we want to decide that we want to minimise carbon, but some use of energy is preferable (for instance consumer/home use) to bootstrapping new financial products?
and that's where the price signals what is preferable. The correct allocation of energy should be based on the price people are willing to pay for the energy. Like any other commodity.
> The correct allocation of energy should be based on the price people are willing to pay for the energy.
Why? Why is that 'correct'?
Why would we not want to ensure the population has affordable energy for home use, but others seeking to make a profit from it rather than use it for basic needs pay more?
You phrase your reply as some sort of moral absolute, but it's nothing of the sort.
> Why would we not want to ensure the population has affordable energy for home use, but others seeking to make a profit from it rather than use it for basic needs pay more?
Because we already have the former and we don't need the latter.
A carbon tax with a dividend doesn't make life harder for lower income people, because they already have below-average energy consumption (wealthier people have bigger houses that need more heat etc.) and as a result the dividend would be larger than what they pay in tax.
But you still want them to have good incentives. If they can use the dividend to switch to solar or buy an electric car, you want them to do this, because that's the whole point.
Meanwhile there is no reason to charge profit-seeking enterprises more than the true cost of their usage, because all that's doing is inhibiting economically productive activity. Aluminum smelting uses a tremendous amount of electricity, but what you want is to cause them to switch to non-carbon electrical generation, not to shut down operations.
Is not what was being proposed in the free-market fundamentalist post I was replying to.
> Meanwhile there is no reason to charge profit-seeking enterprises more than the true cost of their usage
But there might be if it's merely "burning energy for a new financial product", society might decide that it's not worth the carbon to have that around, regardless of tax, but that aluminium is a useful physical product.
We have differential taxes on all sorts of things, I don't see why they would be so wrong here.
But even given all that, my comment you're replying to was specifically adressing the "price should be the only indicator" assertions in the libertarian spiel above.
> Is not what was being proposed in the free-market fundamentalist post I was replying to.
A carbon tax with a dividend is the free-market fundamentalist proposal. Markets require externalities to be priced and a dividend is the most economically efficient use of the revenue so generated.
> But there might be if it's merely "burning energy for a new financial product", society might decide that it's not worth the carbon to have that around, regardless of tax, but that aluminium is a useful physical product.
The way of determining which is pricing. If society values "new financial product" more than the cost of the energy, including the carbon tax, then it gets produced. If the carbon tax increases energy costs to the point that "new financial product" isn't viable in the market, it doesn't. Or it switches to non-carbon electrical generation at which point you can't blame them for climate change anymore and they're expediting the transition to renewable energy by financing the creation of generating capacity and increasing economies of scale.
> A carbon tax with a dividend is the free-market fundamentalist proposal.
It's specifically not the one I was replying to -
"The correct allocation of energy should be based on the price people are willing to pay for the energy. Like any other commodity."
> The way of determining which is pricing.
It's not the only way, it's not even the only way that's employed right now in a lot of places, for instance we don't apply sales tax to items we deem 'essential' here in the UK, have a 5% rate for some things and 20% for 'luxuries'.
Price is not the only mechanism available, nor is it always the best one.
> "The correct allocation of energy should be based on the price people are willing to pay for the energy. Like any other commodity."
This is in no way inconsistent with the need to price externalities, which is the default assumption in free market theories. (Otherwise you have obvious problems with people dumping industrial waste into rivers etc.)
> It's not the only way, it's not even the only way that's employed right now in a lot of places, for instance we don't apply sales tax to items we deem 'essential' here in the UK, have a 5% rate for some things and 20% for 'luxuries'.
Just because somebody does something doesn't make it a good idea.
Things like that have counterintuitive economic consequences. See what subsidized student loans do to education prices. Is this what we want for "essential" goods?
If we do that, the tax rate has to be higher for non-"essential" goods in order to generate a given amount of revenue. Now you're into central planning to determine what's "essential" and what isn't. Is a laptop a luxury good? A poor person might need one. What about an electric car? Meanwhile every such decision of what to tax more is subject to lobbying and corruption.
If you want to help the poor, give them money. They know what's "essential" to them better than the bureaucracy does.
> This is in no way inconsistent with the need to price externalities, which is the default assumption in free market theories.
There's nothing in free markets that will make this happen without regulation, as evidenced by the fact that it so far hasn't happened.
> Just because somebody does something doesn't make it a good idea.
No, but it also doesn't make it impossible or something which can just be dismissed. There blatantly are mechanisms that can be used other than the ones you mentioned. You don't like them, that's not the same as them not existing.
However ridiculous you want to make the results - oh my god now you're into planning! - this already happens in quite a number of pretty successful countries, so it's clearly not some bizarre fantasy.
> There's nothing in free markets that will make this happen without regulation, as evidenced by the fact that it so far hasn't happened.
According to hardcore libertarian free market theory, polluting someone else's property without their permission is a violation of their property rights. In principle this would make it impractical to burn anything at all, because the combustion products go out into the air and spread to someone else's property without their permission. You would need the permission of everybody everywhere, for which they would want to extract payment.
Obviously that isn't how it's implemented in the US, but that's what the theory says should happen.
A carbon tax + dividend is a pragmatic alternative. The criticism of it is actually that it gives the polluters too much -- maybe someone thinks the tax isn't high enough and wants to demand more of the carbon emitters. By implementing the tax you're taking away their right to refuse to have their air polluted and hold out for higher payment from the carbon emitters.
> You don't like them, that's not the same as them not existing.
Nobody was claiming that implementations of bad ideas don't exist.
> Nobody was claiming that implementations of bad ideas don't exist.
Actually it sounded a lot like you were saying that the only way to do this was pricing.
Either way, you'd have to go a long way to convince me that the free market ideology principles are always better than what we can see working in a number of wealthy, successful countries already.
A carbon tax and dividend is certainly one way that such things could be achieved, though it's not the only way and it is a blunt instrument. It's not the only way or necessarily the best, and it doesn't allow a society to make choices with much granularity.
Your argument is basically that it is wrong to do so - I think that's a pseudo-religious belief.
> it doesn't allow a society to make choices with much granularity.
i argue that pricing carbon is the only way to allow everyone in society to make their own choice with the granularity that you propose.
After all, when has central planning ever taken everyone into account properly? How will i know that policy makers will take my interests into account when they plan policies?
And in this specific case, what about the people who _do_ want to mine crypto? Why do they get the bad end of the stick, just because some authority says so?
You're begging the question a bit there. I'm not at all convinced that the free market is the optimal method for allocating scarce resources, especially energy. Just look at how well that went in Texas earlier this year.
Indeed, or make it punishingly expensive for some uses, which is tantamount to a ban.
That's the point - it's perfectly fine for a society to decide what energy can and can't be used for, because we don't live in a time when we have infinite, environmentally neutral power available to us.
If anything the regulatory solution would be to find the ways in which demand for cryptocurrency exists because of failures in the existing financial system, and fix them so that the existing financial system can satisfy them. Allow bank accounts that work exactly like coin wallets, but rely on the banking system rather than PoW.
An obvious example is the existence of pseudonymous digital payments. Given that cryptocurrency already exists, and will continue to exist for all illicit activities even if you ban it, you might as well let people open numbered accounts at a bank.
Do this for any other advantage cryptocurrency has over the existing banking system and there is no more demand for cryptocurrency. And without demand, the price crashes and people stop burning coal to mine it.
A re-distributive carbon tax incentivizes efficiency, doesn't hit stuff like renewables and allows individuals to keep on choosing what they want to do with their life.
Just because you don't find facebook valuable doesn't mean that others feel the same way.
Forget just the environmental issues. The price of commodity hardware for AI research is astronomical right now (try getting into deep learning right now, I dare you!). Crypto is directly trading off with AI research and game development.
PoS is not just a more environmentally version of PoW. It is a lot more vulnerable to state level actors. If the state takes over / subverts / influences the limited number of stakeholders, then it is game over.
With PoW the state can influence the existing miners, but cannot prevent new independent miners to pop up and counter act.
There are 141,139 validators active in Ethereum as we speak (source: https://beaconcha.in/), corrupting that many people is very difficult. There are smaller PoS systems with eg. tens of validators which are more susceptible to state capture.
Bitcoin (the network with the most mining effort) lost 25% of their hashing power due to blackouts in Xinjiang. (Soure: https://twitter.com/nic__carter/status/1384938089748041730?s...) State capture of a majority of Bitcoin miners is comparatively easy.
In addition, independent miners have less hardware and that hardware is generally less efficient when compared to the large ASIC farms. In reality a recovery would probably require social consensus and a hard fork
Yeah, and the way they are issuing rewards means there's an incentive to split your validation across multiple nodes to increase your changes at getting rewards. Each one of these costs electricity to run both in terms of bandwidth and electricity.
And other methods introduce the possibility of stake grinding.
BOTH converge to the same energy usage as mining.
OTOH, the legacy financial system is significantly more energy intensive for a given financial network value. You don't think banks and wars in the middle east to maintain the value of the network have an environmental impact?
Correct me if I'm wrong since I've only read the brief overview of how validators work on ethereum.org, but 141k validators doesn't mean anything when every validator is independent / anonymous and someone with 32k eth staked is actually one entity taking on the role of 1000 validators.
The point is that the parent comment conflated validators with people, whereas one person or entity can control many validators. That doesn't say anything about it being better or worse than PoW, but it's disingenuous to claim that an attack needs to compromise so many individual people rather than potentially just a few entities that control vast quantities of eth.
or you can fork and remove the bad actors, burning all their coins. good luck with their next attack. in contrast, you can't burn an attackers fleet of miners
Repeating "ultrasound money" memes. That specific meme has to do with state level attackers blowing up mining farms. It has nothing to do with changing issuance. And the entire premise is that an external force comes in and tries to co-opt it.
That isn't relevant to the conversation of stakers having misaligned incentives to change the rules. The most a state level actor can do is censor transactions if they were to take over a chain.
With PoS you'd need to slash the validators stake on a fork; which isn't going to happen because the stakers run the validators everyone is using. You already saw this with the steemit takeover.
In PoW coins, the miners and validating economic nodes are two separate groups. Watch what happens when exchanges slip over to Eth2 nodes and call it Eth.
During the BCHA/BCH split the exchanges were the ones that decided the ticker. Most users have ZERO CLUE about what happened. They went on their with their lives calling the fork the exchanges chose BCH. Once exchanges are validators there is no bulwark against changes.
>With PoS you'd need to slash the validators stake on a fork; which isn't going to happen because the stakers run the validators everyone is using.
Sorry but I don't see your point here. A fork inherently requires action, it's enough to force a node to follow a different block from some height. At that point the attacker would get penalized for being offline. Outright deletion would require code modification.
It's even possible to automate a minority fork in the case of censorship, although this capability doesn't exist yet.
>You already saw this with the steemit takeover.
Steem isn't even PoS, it's dPoS. Even in this case users successfully created a fork called Hive and removed Justin Sun's coins.
The exact opposite is true. It's always possible for a state to obtain enough mining hardware - PoW is hopelessly insecure. It also has infinite economies of scale inevitably leading to absolute centralization even absent state attack. Once majority of hashrate is achieved, profits nearly double as minority can be censored. That's the inevitable end state of PoW.
PoS is resistant to state attacks because it would require buying up tokens on an impossible scale, and in the case an attack somehow succeeds a fork can be created that deletes the hostile stake. This can be repeated indefinitely. That's impossible in PoW more than once, once a gpu PoW gets attacked it's over.
PoS has no economies of scale, so contrary to PoW it can stay decentralized forever. There's no way to make existing stakers unprofitable by adding more nodes, like it's possible with mining hardware in PoW.
PoW is also vulnerable to takeover of existing miners because mining at scale requires big industrial warehouses with industrial power owned by registered companies. Impossible to hide. PoS can run on anonymous home nodes.
In every single security and decentralization aspect PoW is hopelessly inferior to PoS.
> PoS is resistant to state attacks because it would require buying up tokens on an impossible scale
You don't need to buy the tokens. You make laws which the stakers have to follow, otherwise you seize their tokens for breaking the law. You can also use electronic warfare to steal the tokens of stakers outside your juridiction. If you are doing this as a big country such as USA/China, then other stakers might be tempted not to fork because a compromised system that works with those countries might still be more valuable than an uncompromised system that has not access to a large part of the world economy.
I don't know of any PoS coins that were attacked. Contrary to PoW, PoS is used for a very general category and differences between multiple versions are great. Many don't even have slashing making them a trust-based system (like Cardano) and I don't think they should be considered proof of stake - because without slashing nothing is actually at stake.
Additionally except for eth all have the fundamental problem of extremely centralized distribution. This [1] extreme centralization is representative of new VC coins. That tiny sliver of 'Coinlist (unlocked auction) 4.3%' is the only part that was available to non-insiders.
Yes, I'd be curious what some PoS coin experts have to say about the centralization concern of PoS, and how network security and uptime is guaranteed in a PoS network that doesn't have slashing.
I'm also wondering about the resiliency of PoS. The PoW used in Bitcoin has demonstrated resiliency against attacks, and none of the attacks have been successful so far, that I know of.
>The PoW used in Bitcoin has demonstrated resiliency against attacks
Multiple PoW coins have been successfully attacked, like ETC. Because they are already on GPUs there's no fix - just hope it doesn't repeat. Those successful attacks prove that any attack on PoW is only a question of external resources (sha256 ASICs for btc).
It's also surprisingly hard to profit from a 51% attack on pure speculation coins like btc or etc because next to zero actual economic activity is happening on them, which is why such attacks were rare and small in scope. The best you can actually do is to try to double spend an exchange. If they were actually used for real commerce profit becomes much easier. It could also become a military goal - if Iran relied on a PoW-coin for its economy, blocking their coins would destroy their economy.
This is one of the reasons why ethereum absolutely must switch to PoS - PoW is extremely insecure for smart contracts because there are many more ways to profit from an attack, like censoring price updates for defi.
I'm aware of the ETC attacks. I don't think ETC can really be compared to BTC though. The ETC network is composed of the idealistic (or maybe stubborn) folks who didn't want to switch over to the new ETH chain after the DAO hack. I'm not saying ETC has no merit, but it didn't have the same network resilience due to the split.
Seems like you know a lot about PoS, would you be willing to check out my other comments on this post (https://news.ycombinator.com/threads?id=swensel)? I've covered some concerns / questions that I have about PoS that maybe you can answer in more detail.
That's only possible once - from asic PoW to a gpu/cpu PoW.
After that, if the fork becomes popular, the attacker moves and attacks it again. Are people supposed to fork once per week? At that point it's not PoW consensus anymore, because the interventions move from emergency to normal, and you're under something else.
Proof of Stake as setup gives all the power to people/companies who have large amounts of liquid assets.
Consider Amazon, they keep a rolling window of cash in-between when an item is sold and when the seller gets paid. This effectively gives them billions in interest-free capital. If this were Etherium, it would translate into huge amounts of voting power.
Likewise, if/when people deposit their etherium into banks, those banks can then leverage that "free" capital to grab huge voting stakes that wouldn't otherwise exist (because no person living paycheck to paycheck has the equivalent of 100k sitting around).
This leverage simply does not exist with proof of work.
> All that wasted energy is paid for by the holders
Could you explain me what energy is "wasted" in Proof-of-Work and also how the people currently holding the cryptocurrency is paying for that "waste"?
AFAIK, the same number of blocks are made no matter how many transactions are being made or how many holders there are (or how much each holder "holds"), so the energy consumption of Bitcoin remains more or less the same during an hour, only slowly rising as more miners get on-boarded. But the energy consumption of those brought online remains the same over the lifetime of the miner instance itself.
So burning electricity on running a cryptocurrency is not right, but burning electricity on running servers for Facebook or user tracking is all right? If that's the case, who's the arbiter of what's "too much" power for a use case?
If that's not the case, how do you propose to enforce that all use cases use less electricity, and how do you punish those who use too much?
We have such a system for appliances already, energy star. And we do restrict the manuf and sale of appliances that can't meet those goals. Same for cars.
Why would a company pay the same tax rate as a person? A company pays a tax rate of x% because that income is also taxed when they distribute it to individuals. Thus we've built a system that incentivizes them to invest it back in the company (doesn't always work - but that was the intent).
So 21% + 15% to 20% capex on individuals = a tax rate around the same.
Now, if you really want to look at the big picture, look at a company's tax rate of 21% on profits, but they also pay taxes on employees of ~21% of salary in the USA not to mention health care (which in europe would be included as taxes so maybe in Europe 46% to 50%). So if payroll is 40% of your costs that is another 8.4% of taxes added in there. And, you can probably add health care as a tax as well.
Legal tax avoidance is legal. I hate when people bitch about companies doing legal maneuvers. It is very easy to stop that, apply a tax on gross receipts for all income created in the country.
Washington State does that for example if you have a company operating in their state.
No, it's because competition between miners necessarily drives the hash rate and thus energy usage to scale up with the value of mining rewards and transaction fees.
But if there aren't more transaction (as number of transactions), what happens when the hash rate increases? They hash incomplete blocks of transactions? Or does the same block gets confirmed by a greater number of miners?
The second answer, although there is only one "winner" of each block's competition, so it's only one miner/mining pool which ends up confirming a transaction. It's controlled by a hardness parameter that's readjusted automatically in a regular fashion.
Miners tend to increase their hashrate because that's how they compete for block rewards. However, the electrical energy a miner spends on finding blocks should not be more than the value of the block rewards, otherwise they would operate at a loss. This provides a ceiling for the energy expenditure.
Therefore, if the price of Bitcoin doubles, miners can afford to burn twice as much electricity. (Roughly. This is a simplification of course.)
Because the chain of transactions with the most accumulated waste is chosen as the "correct" chain. In order to double-spend, you have to cause a different chain to be the "correct" chain, so you'll have to waste even more energy than has been wasted by everybody else, over whatever span of time you're trying to roll back. Thus the more waste, the more secure the chain.
Proof of stake is a newer way of coming to consensus on one correct chain. It took people a while to figure out how to do it securely and efficiently.
Okay, so the chain of transactions that is regarded as correct is the one that has been more expensive to create. Instead of wasting energy, the same result could be achieved by wasting other stuff, such as bitcoins themselves, for instance?
Sure. In fact, that's almost how Ethereum's proof-of-stake works, except it has a protocol that comes to consensus without wasting anything as long as people follow the rules, and only destroys stake when someone provably breaks the rules.
Bitcoin uses far less energy than the gold or banking industry, uses more and more renewable energy every day and has some significant game theory going on regarding renewable usage and research.
I'm aghast that Facebook burns that much power to run what is basically a giant BBS. I guess mining all of our personal data must take up an outrageous number of computer cycles.
However, in Facebook's defense it's per-user per-transaction energy costs are going to be much lower than Bitcoin.
> I'm aghast that Facebook burns that much power to run what is basically a giant BBS. I guess mining all of our personal data must take up an outrageous number of computer cycles.
Did Ye Olde BBS support 1:millions broadcasting, and real-time viewing of high-definition video? Uploading and viewing thousands of high-quality photos?
Calling Facebook 'basically a giant BBS' is a lot like saying 'Oh, I could build Twitter in a weekend'.
It definitely is. Either that, or it's incredibly short-sighted.
That comparison ignores the actual value add of Facebook and the fact that people are using it. Most BTC trades happen off blockchain and are powered by the servers of the market places and nobody really knows how much energy they use.
I think the proposal here is very simple. Pass a law against proof of work crypto currencies, don't let perfect be the enemy of good, and deal with the next big waste of power when it comes about by passing a law about it.
Don't address of any the things that you are proposing need addressing, because they don't need to be addressed in the same law, or really addressed right now at all.
The law doesn't need to try and anticipate the actions that occur in the future, we will still have a legislature in the future capable of addressing the future when it comes about. The law needs to address the actions of today.
They didn't do that either. It reads more like avoidance. The semblance of an answer by posting anything, rather than a plain, direct response. Which gives the original questions more weight: why were they not able to be responded to directly? Are the questions potent? Your reply here is just shifty on shifty.
You really don't understand the problem with asking questions like "well who decides?!?" To literally every proposal of legislation ever?
Because that is what always happens. Every time someone make s a general proposal, for any law at all, there are people making the same old, dumb argument, of "well who decides?!?" Every single time.
Sure you do not believe that all laws ever are wrong, right?
Because the answer to this dumb question is the same as for every law ever. That makes it valid, unless you believe that all laws ever are bad.
I don't understand. We clearly have general laws like "don't shoot people," rather than 320 million individual laws like "John Edmund Smith IV of Springfield, Ohio cannot shoot people." And we didn't start with laws targeting individuals and then broaden it later. "Don't shoot people" was the proper, general rule that addresses the problem of shootings. Laws like this seem to be pretty effective and desirable. I don't know why we wouldn't take the same approach with something like carbon emissions.
There are absolutely many laws, that are very targeted and specific. Were you unaware of this?
For a random example, there are laws that probably say something like "A truck, of this size, must follow these specific environmental regulations".
That would be a specific law, that applies to a truck, and required it to do a specific thing, like have a certain mileage efficiency, and it is not general. It is pretty specific, and it is not a general law that applies to all environmental related things.
The world is full of many specific laws, all over the place.
They answered it. The person they were responding to was trying to broaden the scope too much. Many laws purposely have narrow scopes in order to handle problems that arise without setting too much precedent.
They did not answer it. "Broaden the scope too much" - why? The question seems completely appropriate if you're actually trying to solve the climate problem. The response didn't address this, it targets crypto specifically, which makes it seem like the motivations are not climate but something else.
The question was about how to choose who is using too much and how, and the response was basically "don't think about it, we will exist in the future and can think about it then." But we exist now. And even if we were to wait, it's still a question we can answer now to have enacted later. The response provided was a bypass, a non-answer.
Bitcoin? Yes, it's a useless coin. I wouldn't mind even higher amounts of energy being spent on Monero though.
It's good that Ethereum is moving to proof of stake. Not because of some environmental impact though. Mining is just really expensive, it results in huge fees making the coin almost unusable for normal people.
Is it? Over time human energy creation and consumption has grown exponentially with technological innovation. Fire to cook meat, a wagon attached to an ox, combustion engines, air conditioning, wireless networks, data centers, etc.
Today you probably consume more energy in a few days than your ancestors whole lives.
Now, we've created distributed, immutable property, something that has never existed before. It turns electricity into value storage. What is the "correct" amount of energy for humans to spend on such a thing?
Energy consumption has nothing to do with increasing planet temperature, if Bitcoin consumed 10x the energy via solar panels, it would not have any environmental impact beyond the raw materials used in the panels.
You're equating energy usage to carbon emissions, but you should be able to distinguish the difference.
> Energy consumption has nothing to do with increasing planet temperature,
As long as we're using fossil fuels, planet temperature does in fact have something to do with energy consumption. You seem to be arguing that because renewable energy sources exists, Bitcoin has nothing to do with fossil fuel emissions. However, that is false, as 8% of Bitcoin mining happens in Inner Mongolia, which is home to many of China's large coal mines[0].
I'm arguing that China subsidizes coal[0], and that China does not utilize a carbon tax[1].
So when you call for a ban of Bitcoin in the name in environmental concerns, you've decided to be the arbiter of energy usage, on what is productive and valuable, and what is not.
You're welcome to argue your points, but it would still be far more efficient and productive to addresses the actual core problem: coal fire plants, and energy prices.
> a bunch of aircraft carriers and planes and bombs and people with big guns, which gives the ability to say (credibly) that it is a crime to forge dollars no matter who you are or where you live
Cryptocurrency offers all this and more for a fraction of the price.
> Current estimates put bitcoin’s energy requirements at around 130 terawatt-hours (TWh) annually, which would rank it in the top 30 electricity consumers worldwide if it were a country.
Not even 1%. The USA alone pollutes a ton more and is always utterly unapologetic about it. Historically I don't think they ever adhered to any global effort or treaty to reduce pollution. You have big entrenched organizations such as the oil industry doing far more damage and nobody messes with them. Not to mention the entire developed world's dependency on China for their borderline useless cheap consumer products.
This concern over the environmental impact of cryptocurrencies is utterly laughable when you figure out the real source of these problems. I guess they're just too powerful to be messed with.
Well, some environmental activists try by turning off oil valves[0], just like environmental activists are upset with Bitcoin.
> You have big entrenched organizations such as the oil industry doing far more damage.
People who criticize Bitcoin for its environmental impact don't give a pass to oil companies. The issues overlap, like in Texas where they plug Bitcoin mining rigs straight into the oil well[1].
But I hear you. All big entrenched organizations must be held accountable. Of course.
The problem isn't even bitcoin mining, it's pollution. The energy usage wouldn't matter at all if it was generated via renewable sources such as solar.
People who want to see real change need to deal with fossil fuels. Taxing mining operations will do absolutely nothing to solve the actual problems of this world.
Bitcoin does not consume fossil fuel as a raw material; it is not an ingredient required for its operation. It uses electricity which can be generated from any source, be it wind, solar, or coal.
Subsidized coal mining and untaxed carbon emissions are dangerous ideas.
"gratuitous use" is completely subjective, so the anti-economical assertion isn't provable. You're suggesting there are no trade-offs between PoS and PoW, no tradeoffs between solar+batteries vs coal or nuclear.
PoS can be easily copied and modified by the powerful. There's little cost to create the system and force adoption rather than incentivize. There's an enormous amount of investment and technology dedicated to bitcoin that makes it more resistant to devaluation and duplication. But it saves electricity. That's the trade-off.
Why not focus on the source of the electricity rather than what the electricity is used for?
I don't see how proof-of-waste makes bitcoin more resistant to devaluation and duplication. How would switching to proof-of-stake make bitcoin more prone to devaluation, for instance? As far as duplication is concerned, bitcoin is open-source software which means anyone can duplicate it and make derivative works from it. There are dozens of bitcoin clones. It doesn't seem that bitcoin is resistant to duplication at all, or that there is any reason the lack of difficulty with which it can be duplicated should be influenced by whether it uses proof-of-waste or proof-of-stake.
Any software engineer can clone Twitter. The value of it is in the network and the high cost of users switching because they can't convince the people they follow and those who follow them to switch at once. The same applies to Bitcoin, but miners have an even higher cost of switching because they have specialized hardware that can only generate revenue on the Bitcoin network. Ethereum validators have a much lower cost to switch.
> proof-of-waste
It's Proof of Work. Productive work has value and in this case, it's widely distributed censorship-resistant validation of transactions.
Electricity has higher economic value due to miners seeking to maximize profits.
This makes investments in renewable energy infrastructure more profitable and paid off sooner. A solar farm has more demand and higher margin for its products.
On the other hand, it means cheap coal energy is also financially productive.
What is anti-economical is the unfair price competition due to externalities not captured by coal energy's pricing.
> Pass a law against proof of work crypto currencies
once again, you have merely just assumed the role of arbitor. What makes this opinion better than the opposition?
What needs to be addressed isn't energy usage, but the cost of energy in the first place. Why isn't the fix be passing a law to tax carbon properly? Tax the externalities, and the rest would follow. I don't care if people burn up energy for crypto, as long as they pay for the cost properly.
> once again, you have merely just assumed the role of arbitor. What makes this opinion better than the opposition?
This is literally the role of legislators. What makes "my" opinion better, is in the event that this sort of legislation passed, the majority of the elective representatives in both houses agree we should ban proof of work crytpo currencies, nothing less, nothing more.
> [alternative proposal]
I mean, I happen to like this proposal too, but you haven't given any reason not to do both...
> What makes this opinion better than the opposition?
Nothing about the opinion is better than any other. But the only thing we have to achieve is that it is a majority opinion, which frankly doesn’t seem all that hard to me.
I think OP is suggesting that a targeted ban on proof of work crypto will be more politically feasible -- particularly in the US -- than a carbon tax. Even the state of Washington (which is far more left/democratic/liberal than the US as a whole) failed to pass two different modest carbon taxes in recent years.
So while carbon pricing would be a more ideal solution, OP is suggesting that a targeted ban on POW crypto is a good-enough bandaid that might actually pass.
> Pass a law against proof of work crypto currencies, don't let perfect be the enemy of good, and deal with the next big waste of power when it comes about by passing a law about it.
If we won't legislate it now, it's possible we won't get a chance to do it later thanks to bickering from lobbyists and fossilised laws and practices. See IPv4.
You seem to be proposing that not passing a law against proof of work cryptocurrencies somehow makes it more likely that we will quickly pass a law generally "solving the climate issues" ... I think that is highly unlikely, and in fact I think the opposite direction is more likely, that passing a law banning PoW cryptocurrencies makes us more likely to pass another law which solves climate issues in other ways.
Banning PoW cryptocurrencies is not a big enough priority for anyone that it will be a motivating factor to move past the other issues surrounding the climate debate, especially not anyone on the side of "don't do [thing] to fix the problem". I don't see any other mechanism by which it makes passing other climate legislation harder.
Banning PoW cryptocurrencies removes money that is currently on the side of "don't pass climate legislation because it will harm my PoW cryptocurrency business" from the table. That makes passing future legislation easier.
In general, trying to solve all the worlds problems at once doesn't work. It's too complex, you paralyze the decision making body with too many tradeoffs. When something is obviously bad, banning it immediately not only has the effect of meaning it's gone immediately (and doesn't hang around until you solve the whole problem), but it simplifies the remaining problem for the decision making body. This makes them more likely to come to a consensus on exactly what to do in a finite amount of time.
> Banning PoW cryptocurrencies removes money that is currently on the side of "don't pass climate legislation because it will harm my PoW cryptocurrency business" from the table. That makes passing future legislation easier.
Does it? And, do you have data that backs this up? It stands to reason to me that PoW miners only want cheap power; they don't really care too much how it gets generated. Considering that the cheapest power source you can build out today is green energy, it sounds like a win-win to me for them to put their money into "advocate for more cheap power."
It applies to laws in the sense being discussed here. Ban X which is really bad while not banning Y which is totally unrelated but happens to be bad in the same way. Why does that need to be perfectly right?
IDK in Germany it's forbidden per § 30 StVO to drive around senselessly inside settlements. You are still allowed to drive around, even if the reasons are stupid. But if they are too stupid, police can fine you. There is a youtuber in Berlin who specializes in driving around for hours and he's been stopped by police already. The original video has been made private [0], but a raw version of it still exists [1].
It's mainly to reduce emissions and to protect the local environment. The paragraph also more generally states that you have to "prevent unnecessary noise pollution and emissions", which as we learn in driving school also means shutting off your motor when sitting at a red light.
> So burning electricity on running a cryptocurrency is not right, but burning electricity on running servers for Facebook or user tracking is all right?
Spinning up cores to do intensive math for the sake of its difficulty is wasting energy by design. PoW's financial incentive is to waste power.
Facebook spends a massive amount of money on compute, and their profit is only as good as the margin they can make over that compute cost. Therefore they have a financial incentive to save power.
Facebook actively makes the world a worse place in every way -- be it be providing a captive audience for authoritarian governments to push their propaganda, for surveillance states to collect and build models to control humanity, or trying to control the flow of money and implement economic censorship on Earth via Diem.
The arbiter is "if you build something that is build to be as inefficient as possible by design that's forbidden". I can't think of anything other than PoW that matches this.
Burning gasoline to drive somewhere is fine, but (at least in my city) sitting parked with your engine running incurs a fine.
Fundamentally it's become too big a waste to ignore, like so many other things. We banned incandescent bulbs, we can ban proof-of-waste, which is basically an incandescent bulb that never illuminates anything.
Why do HN comment threads always end up as Pedantry Pageants where all ye who dare comment must address all the fucking edge cases or be called out by the immediate first child comment about failing to do so. It's SO trite, predictable, wearisome and boring. It always follows the same pattern too. "Where do you draw the line?" "Who decides what's the truth?" Always the same fucking slippery slope fallacy. Every fucking time "Regulations" of any kind come up. I think the HN audience wears Being Anal as a kind of badge of honour.
To paraphrase Alan Watts slightly, do you know of a law that set everything to right? Let's just all sit around twiddling our thumbs eh? Since you obviously didn't really offer a counter solution.
Because it's missing the forest for the trees. Look at total energy usage, across all industries. This is more an indictment of cryptocurrency than it is about actually caring about the environment. Compare it to say, eliminating all gas vehicles for electric cars. Where is the HN thread advocating for that, if the end result would be massively fewer carbon emissions versus this proposal? My criticism is this proposal is like banning plastic straws. It's patting ourselves on the back, with no real solution.
Are you joking? There are plenty of conversations on Hackernews about electric vehicles, it just so happens that replacing every single car in the world with a totally different energy system is a way harder problem than banning useless cryptocurrencies that are burning energy to fuel equity bubbles.
You may have heard of this company Tesla based in Silicon Valley, one of the largest companies by market cap in the world, just led an electric car revolution that's inspired automakers worldwide to shift off IC engines
This is not an edge case at all. Who is to decide on what to spend energy or not? This is curing the symptoms only.
The (counter) solution is not to discuss for what to burn coal, but to finally stop burning coal, oil and gas. USA and EU could do that within a few years. And then stop or tax imports from countries that still do burn coal.
But that is inconvenient for many, so they prefer discussing nerdy Bitcoin PoW instead.
I mean, thank you for offering the alternative solution! I couldn't agree more that not burning coal is the only ultimate solution. A severe, possibly overly severe, Carbon tax is maybe the way. But as the great Stephen Schneider once quoted some other great, "Don't let the perfect get in the way of the good". And he was talking about cap and trade vs carbon tax!
The real reason is twofold, first and more importantly, because you don't know the unintended consequences of proposing something like that. Who knows what else would get caught between the regulatory framework needed to prevent someone from doing math, because let's face it, that is impossible so unintended consequences will be the only consequences.
And secondly and most importantly, the government should not decide what products are allowed to be traded: Governments should lift all bans on products currently banned, all drugs, all books, all music, all banned clothing, etc.
The last sentence comes off as a rhetorical sleight of hand. You can be against censorship of books and music and still believe that the government has a role to play in regulating dangerous goods like plutonium. The trade of goods with an outsized environmental impact is regulated today, though this mostly shows up as restrictions on chemicals that are themselves direct pollutants.
Sure, you can be against anything, pro anything, and believe in anything. What I believe is what I wrote, you can believe governments should control plutonium if you want.
You do realize that while sunlight and wind are renewable, lithium-ion batteries are not, right? Nor are solar panels. Cadmium and lithium are highly toxic materials we must mine, just like coal. They have the benefit of not directly adding CO2 to the atmosphere as you use them -- but they come with their own set of issues. There is no free lunch. POW is Proof of Waste, and we shouldn't be blithely wasting any of these non-renewables.
Electricity produced in France by coal + gas + oil is around 8% (vs. 70% nuclear, 10% hydro, the rest is wind + solar + bio-energy).
It took more than "a few years" to build, though.
If you think the US and EU could completely stop burning coal, oil, and gas in a few years (less than 10?), you must know something no one else knows, or this plan involves a lot of dead people. But I'd love to hear more about it.
American SUVs and trucks come to mind. We can for now ignore the wooden, uninsulated houses built in the desert with the AC on for 6-9 months of the year.
Like lawns. We seriously use way too much water, chemicals, energy and time on a plant crop that is basically only for our visual enjoyment. We often think of the big fixes, which are needed, where there are some low hanging fruit we could pick first that would make an impact.
It's not a counter-solution, it is a suggestion that the problem isn't really a problem. PoW power usage is high in an absolute sense but lower than many other things which people would consider an obvious waste. So why does PoW power usage have so much contention compared to those other things? I would say because there's too much baggage/hype associated with cryptocurrencies, not because there's a genuine belief that increasing the energy usage of our species is a universally bad thing.
As for the carbon side of the issue, that isn't something which is specific to cryptocurrencies or any other kind of energy usage. I support carbon taxes and import taxes on CO2-producing goods/services, including cryptocurrency services, and I am certain that many cryptocurrency believers feel the same way.
So if ready alternatives didn’t exist, sure PoW is wasteful but has no alternative... but we have an alternative. If there were alternatives to running a social media platform that didn’t spend energy we should also back that option.
Assuming you are talking about PoS systems, I think they are very promising but it's still not obvious that they can achieve the same risk profile as PoW systems. I think they are worthy of further research and I am excited to see how Eth 2.0 works in practice, but I don't think we understand the economic nature of cryptocurrencies well enough to definitively say that it can completely replace Bitcoin.
There is a counter solution to advocating for regulation. It's to create an economic system where people are naturally incentivized to do what's best. Vote with your wallet. You don't want energy that produced Co2? Don't buy it and advocate for others not to buy it.
Instead what people are doing is advocating for the government to come and point guns at people who don't do what they want -- even if they happen to be wrong. And when they are wrong, there are disastrous consequences as is currently extremely apparent in California. There are all kinds of perverse incentives which have resulted in the severe homelessness and extreme government waste.
The people advocating for this neither listen to the wisdom of Murphy's law, nor do they understand that when regulation impacts the market that regulation becomes what is bought and sold. Have you never heard of regulatory capture? That has worse human-cost impacts than leaving people to their own devices.
Vote with your wallet. Don't like the environmental cost of beef? Don't buy it. This works -- you can see it playing out.
This idea doesn't apply at all for stupid speculative bubbles like proof-of-work crypocurrency.
As another good counterexample to your "market solutions for everything": I don't want rhinos driven to extinction, so I vote with my wallet by never buying powdered rhino horn or other poached products, and donating to environmental charities to protect them. However, it's very likely that rhinos will be extinct in the wild within our lifetime. Does this mean "the market" has decided to exterminate wild rhinos? Should we eliminate poaching regulations and remove red-tape to stop distorting the free-market price of rhino horn?
> Those regulations are going to create as much cost on humans as leaving it to people like yourself who care.
Humans optimise for short term gain, generally perceived gain over others, and rationalise this over large nebulous things like climate change, environmental health etc. They don't count externalities without being made to. And that's individuals. Companies are downright sociopathic and will happily defecate in their own back yard if they can make a dime out of it.
As a result we can already see what happens when people are left to choose themselves or the environment, they choose their own short term relative gain over the long term prospects of the whole species (before we even look at other species).
> Fixing the problem is up to you.
Yes, in a democracy it is, which is why I vote for political parties which will bring in regulations.
"Vote with your wallet" depends on several micro-economic assumption holding true, that don't hold true here.
One of those is the assumption of perfect competition. Electricity is far, far from being a market with perfect competition. How many electricity providers are you able to choose from at your house? I'm going to guess 1.
Another assumption that doesn't hold here is the absence of externalities. The full cost of damage to the environment is not included in the price you pay for electricity, so people are going to over-consume it.
You rail against laws and regulations but even in the second sentence of your post you assume their necessity with the phrase "create an economic system..." Laws and regulations are how you create such systems.
Regulatory capture is a real thing, but it's not a good argument against all regulation. Maybe it's an argument for relatively less regulation than we'd have otherwise. It's also an argument for doing regulation better.
The crowd of HN tends to be more philosophic. Without a moral / ethical / long-term practical view, we're just ships with torn sails floating in the waves, wandering about, making short-term decisions. Decisions often have 2nd, 3rd, 4th-order consequences that can be unpredictable and often counter to the goal we think we're working towards in the short term. It pays to think them through from a high level and apply long-term thinking principles.
We’re talking about HN. Most people here are moral relativists that think their feelings based worldview is absolute. They already are ships without a sail. How many have actual researched and applied a philosophy? I bet most here can’t even find utility in Kant.
I agree. Having used Reddit for too long, and Facebook too before I deleted it completely, my experience has been that HN is much better at talking about things, and more careful about wording. Despite the predictable slippery slope comments, there is always some good commentary in most threads. I can't think of anywhere else to go to get discussion on a multitude of complex topics like this.
That doesn't mean that threads on HN can't take a nosedive and become flame wars. But that's what good moderation is here for, and I believe HN has that.
Because banning outright is stupid, and banning a technology is even stupider. Technologies have both benefits and drawbacks. TAX (not ban) the drawbacks.
In this case, tax carbon. Then people will decide what they want to spend their (expensive) energy on.
I'm actually hopeful that crypto will bring about a carbon tax. I figure the people getting rich in crypto are a different set of people than those getting rich in traditional CO2 emitting industries. So there's a slightly better chance that politicians will enact the necessary legislation.
Because HN is full of fucking leetcoders or other specially minded folk that sees things as black or white. If any part of a statement is falsifiable that statement is False (or so it goes) so that's why we get this kind of Malcolm Gladwell-level brain candy masquerading as rigor.
Because this is a website full of engineers who write computer software for a living? And finding and solving for those edge cases is literally a core function of what most of us spend the majority of both our work and leisure time doing?
To me the big gripe is not the concern for edge cases but the immediate dismissal of a very productive first step in addressing an issue by resolving the entire conversation before it even happens.
It is very possible to bring up edge cases in a productive manner. Expand the conversation to include them. there's no need to assume the first solution idea posted is meant to be the final form
Making this change would introduce an enormously impactful precedent. Politicians might take it and run with it to places we don't even want to imagine. I'd agree with you in a world without the current style of politics and decision making, but that's not where we live - and sadly alternative to that is unknown to me too.
But is it even a productive first step? There are arguments to be made that proof-of-work mining incentivizes renewable R&D.
By banning that because it uses "too much" energy now - what are we potentially losing? What developments in renewables, energy storage, or grid development simply won't be there, which we won't know we don't have, because we banned the largest for-profit, skin-in-the-game competitive contest for low-cost energy that the world had ever seen 25 years prior?
Banning it outright is short-sighted. Thinking about it from a higher level is a way of addressing the real issue of carbon emissions while allowing a phenomenon that has the potential to massively help, not hurt, to thrive.
The desire for energy is near limitless - PoW simply bends the curve upward. As the price of BTC increases, the drive for less costly energy slackens off.
The issue is clearly a tragedy of the commons - the cost (higher air pollution/higher energy costs) is socialized, while the profits are centralized. So the maximization function is cheap >>> anything else. Why wouldn't we expect more and larger coal plants versus research into fusion reactors?
That's only true so long as the price continually rises. As soon as the price settles, everyone is operating on the margin and can only become more profitable by reducing costs.
Unsubsidized renewables are already the cheapest new source of energy generation. [0] Even if miners wouldn't be doing direct renewable research themselves, their capital investments into renewables in the name of competition and cost-savings would incentivize more efficient technologies.
In this case the immediate marginal profits from mining are centralized, and the larger benefits of more advanced renewable energy are socialized.
Plus - do you believe that the price of Bitcoin will rise forever? If it did, wouldn't that mean to you that it might be doing something important, to constantly have growth and demand for 100 years? Cuz if I thought so then I'd want to preserve it, not throw it away. Sounds important.
Bitcoin isn't the only option. We've already seen that when the price of Bitcoin dips miners flip over to whatever cryptocoin seems next to bubble, seems next most interesting. Certainly what is called Bitcoin itself (today) has "hard" "deflationary" "caps", but as soon as miners get bored with that, there's always more room for more forks and other coins.
Even if Bitcoin isn't intended to be "growing forever", the ecosystem can and will.
> The desire for energy is near limitless - PoW simply bends the curve upward. As the price of BTC increases, the drive for less costly energy slackens off.
Shameless hijacking here: at what point will the heat consumption/release rate be so great that the Earth becomes unable to support life? I've seen some back of the napkin calculations that estimate a couple hundred years, at our current acceleration.
IIRC (it has been a few years), we only need a few degrees to reach a tipping point. The decay of methane hydrates could push out 1000 GT CO2 equivalent suddenly, accelerating warming by roughly ~40-50 years.
Making renewables isn't actually useful if they're used for something we don't even need to do. We could switch to a low-energy crypto currency and do all the things we were going to do with Bitcoin.
Lighting all the oil and gas in the world on fire will also incentivize renewables. But that's not a good practice for a lot of reasons including increasing the pollution and CO2 levels.
I'm a software engineer, and I'm probably at least in the 90th percentile for ability to manage (or design not to have) edge cases. I try not to be that pedantic when criticizing coworker's designs, other than perhaps pointing out that lots of edge cases in a design is a common symptom of over-complexity.
On this particular topic, I particularly hate the amount of fossil fuels getting burned on cryptocurrency. I'm less concerned about the amount of energy getting "wasted" on data centers in general. At least in most cases, there's alignment of interests when it comes to efficiency optimization. Facebook has an incentive to make their servers more power efficient over time, and scale their capacity to the size of their customer base. With proof-of-work, there's also incentive to increase power efficiency, but also incentive to scale up to capacity limits.
I think it is possible that proof-of-work cryptocurrency algorithms could be tuned to the point of striking a sustainable balance long term, but that would require the world economy to converge on one or two of them. The issue with that I think is the speculative nature of the currency's distribution of ownership. With large portions of the currency being held by a small number of anonymous people, and no clear path for the majority of normal folk to exchange their wealth, it's just not going to happen without some sort of societal collapse. I also struggle to have faith in a system meant to disrupt the global economy when its existence depends on global scale internet infrastructure.
Why? Because that's what I bet most people come to HN for. I'd rather find out that my idea is impractical or plain stupid on a HN thread than in some other and expensive way.
Perhaps it's not idle pedantry to observe that many of those who are angry about crypto energy usage couldn't care less about the energy wasted and pollution generated by other endeavors.
It's like an uncle of mine who is outraged that mosques get tax exemptions, but he doesn't care that churches get tax exemptions.
Clearly tax policy isn't a genuine concern for him. He's angry about something else that he won't say out loud.
Fair enough. I love this orange website, but I also despise it. Flying off the handle is rarely a sensible solution.
To your point, though, I'm willing to wager that most of the people whose biggest problem with crypto is energy consumption would happily also support other harsh measures against all manner of pollution generating entities. I know I would.
A pollution tax is really the only viable solution though. Playing whack a mole against individual entities and activities will never solve the problem, and creates a lot of legislation.
So long as pollution and carbon are free or cheap, people will find wasteful ways to generate it.
Incentives work, and taxing carbon and pollution will incentive green alternatives.
a pollution tax will not work. That just becomes the price of doing business and that cost is factored into other areas of the business model. Even worse, it just gives more capital to inefficient governments
> That just becomes the price of doing business and that cost is factored into other areas of the business model.
Yah that's the point and business with less environmental impact will be more competitive. Industries/products with more of an impact will be more expensive, reflecting their true cost.
> Even worse, it just gives more capital to inefficient governments
Most pollution/carbon taxes are proposed to be revenue neutral, i.e. all the proceeds are returned to the tax base. This is also important because like other (non-luxury) consumption taxes, a carbon tax is regressive.
I have a few disagreements with the MMT crowd, but on this one point they are transparently correct: the exact level of taxation has little relationship to government ability to spend. Talk of "giving more capital" to governments shows a deep misunderstanding about the nature of fiscal constraints.
Solar is taking off not because we banned coal, but because it's cheaper than coal. If coal and natural gas were taxed according to their carbon output, solar would be even more ahead, nuclear may become more attractive as well.
Aluminum is heavily recycled not because it's green, but because it's significantly cheaper than mining new.
Incentives work. The free market responds to incentives, and works around regulations.
In the specific case of proof-of-work cryptocurrency, I don’t think a carbon tax is directly useful: If it’s unilateral then mining trivially shifts across borders; if it’s global then it’s an inflationary pressure on the coin price which offsets the reduction in mining you might otherwise expect.
> Perhaps it's not idle pedantry to observe that many of those who are angry about crypto energy usage couldn't care less about the energy wasted and pollution generated by other endeavors.
Have you observed this, or are you simply speculating?
There's a hidden subjective value judgment built into the word "excessive" that's doing a lot of the heavy lifting here. These "regulation" comments tend to have a high likelihood of boiling down "I want the government to stop things I don't like", where environmental concerns (crypto) or data collection (adtech) is a mere pretense grounded in incomplete information at best, emotion at worst.
Personally speaking I find it just as irritating of a pattern here that knee-jerk calls for "regulation" (i.e. bring in the coercive power of the state) or outright banning are so often floated as a/the solution to every problem. When legal coercion is suggested, it is entirely proper to bring up the existence of the dragons that lay down that road.
I want the government to look seriously at things that are using the energy footprint of a mid-sized country simply to spin up a new financial instrument. Particularly when there appear to be equivalent things that don't.
If cryptocurrencies didn't have the energy footprint, I would find them pretty uninteresting and/or ridiculous for various reasons, but ultimately it wouldn't bother me that people do what they do with them. When they start adding seriously to the global energy load in a time of climate crisis that makes them pretty offensive.
I don't know whether you're referring to me or some of the other replies, but I am definitely against most forms of excessive energy consumption if they can be avoided.
> Perhaps it's not idle pedantry to observe that many of those who are angry about crypto energy usage couldn't care less about the energy wasted and pollution generated by other endeavors.
I don't think that's correct. I think that it's possible to care about both, but to be dismissive of misdirecting subject changes, i.e. "whataboutism".
I wish there was a better name for an "order of magnitude fallacy" (but given Roman numerals I can understand why they probably didn't have a fun Latin name for an order of magnitude problem), because we seem to be seeing them all the time right now.
Industrial production of greenhouse gases is nearly an order of magnitude larger than consumer production, but often inordinately the "guilt" burden is pushed to the consumers: Do you have an EV? Have you changed all your light bulbs to more efficient LEDs? Are you Vegan enough?
Here too: Bitcoin alone has risen to an order (or three) of magnitude more energy consumption than Facebook could ever use/do ever use to track people. (Cumulative, the rest of cryptocurrencies only further dwarf Facebook's comparative energy costs.) We can be angry about two things, we can be angry at both, but why can't we discuss the bigger problem first without getting into the weeds of all the smaller problems?
(And of course, the two order of magnitude problems above are inextricably linked: Bitcoin is on track to make many industrial users of electricity look like chumps and dwarf them by an order of magnitude. Nearly all of the consumer-side gains from veganism, LED lightbulbs, EVs has been offset again, if not entirely dwarfed, by cryptocurrency mining.)
People are bad at reasoning things at large enough scales, have a hard time gut understanding order of magnitude problems, so the fallacies keep creeping up, and keep getting weaponized by bad agents (the consumer "green guilt", the consumer "recycling guilt", so many other "demand-side fallacies" that if consumers just bought "smarter", problems would just go away, when really it's the suppliers that are in control).
I'm not setting any line here. I'm saying that we could worry about the big problem first without immediately deciding where any "line" needs to be drawn. I'm saying it doesn't matter which side of the "line" Facebook falls on because we could start with the biggest problems first, then circle back to Facebook when it's top of the list (not a whopping log_10 of at least 2 (!) difference from the current worst offenders, such as BTC).
I don't get why anglophones are so obsessed with these "drawing lines" and "moving posts", particularly on recent years. What lines are these exactly? What posts? This is very bad heuristics, actually.
> why can't we discuss the bigger problem first without getting into the weeds of all the smaller problems?
People seem to be intentionally conflating some things. A carbon tax is nice precisely because it avoids getting into weeds and is a general approach that applies equally to everything. Some people are proposing this and others are saying "don't get caught up in the weeds." What? Makes no sense. It just reinforces the poster's point: that some people's real motivation doesn't seem to be environmental, there's a strange focus on crypto specifically that makes it seem like they want it to be reigned in for other reasons.
General solutions are great, but when there's a noticeable log_10 distinction between two examples given, why can't we start at dealing with specific solutions to the biggest problem first and worry about the general approach later? It's a 99%/1% problem: we'd potentially get a huge savings if we dealt with the 99% of cases first and worried about the 1% later.
The raw statistics already tell a story that the difference between "BTC" and "Facebook" is greatly exponential. Wanting to focus first on the (much) bigger exponent isn't necessarily a sign that people's real motivation is "conspiratorial" against crypto.
Because an outright ban is misguided anyway. PoW systems incentivize renewable R&D and investment. If you just straight-up make it illegal, you kill a major driving force of change for the better. If you restrict carbon output instead, you just further challenge the industry to find a way to work inside those bounds, allowing creativity and positive externalities to continue to develop.
There was an article just the other day of a coal plant that was entirely restarted for PoW coin mining. PoW systems are not proven to incentivize renewable energy R&D and investment. There's no proven link there. There's no proof that a PoW coin ban would "kill a major driving force of change for the better". Sure, a restriction on carbon output would be such a driving force, but there is no such restriction today and it is wishful thinking to believe that PoW miners are following anything like one in a market where such externalities continue to be unregulated.
It is orthogonal to the issue at hand that PoW is using far too much energy per transaction/per capita/per GDP/per most metrics you want to point to. Not using the energy in the first place is always going to be greener, no matter how much PoW systems invest in renewables and their R&D! I can't see that as "misguided". An outright ban would get immediate results versus a carbon output tax would incentivize eventual results, maybe. That's not misguided, that's just a different perspective, and a different preference on an ideal time window to address the situation versus wishful thinking and "golly gee, sure hope the market eventually figures it out someday".
How is comparing Bitcoin's energy usage with other endeavors an "order of magnitude fallacy"?
Gold mining uses something like 140 terawatt-hours of energy annually, and produces enormous pollution and environmental destruction in addition to that.
That's greater than Bitcoin's energy usage.
Since gold mining is so much more harmful to the environment, maybe we should outlaw that first before we work on smaller problems.
> Gold mining uses something like 140 terawatt-hours of energy annually, and produces enormous pollution and environmental destruction in addition to that.
The most apropos commentary in this entire thread yet.
> How is comparing Bitcoin's energy usage with other endeavors an "order of magnitude fallacy"?
The "other endeavors" category above was "digital endeavours" and specifically "Bitcoin versus Facebook", which is an order of magnitude difference.
You've introduced an entirely different category from the above discussion. It's maybe an interesting category [1] to discuss elsewhere, but is off topic from the fallacy we were discussing. Thanks for the non-sequitur, though.
[1] Personally, I'm not so sure it's a useful counter-comparison to Bitcoin: Gold is used in electronics and other industrial needs, beyond its service as a value store/commodity of interest to collectors. Gold is also increasingly rarely the "primary" focus of mines. Most of our Gold today comes from Copper mines and very few would argue we are mining Copper as a value store/solely for greed.
Gold mining isn't even an edge case in that specific example when the class of problem is explicitly defined as "What digital services use too much energy?" as it had been in the above conversation. Is Gold a digital service? No. Is Gold Mining wasteful? Perhaps. (Though again, as an aside, the better question with specific respect to Gold is: Is Copper Mining wasteful? Most gold is mined as a by product of copper mining.)
It's not an edge case of the "electric waste of Digital Services", because it is an entirely different problem. So not only do we have "pedantry pageants" of edge cases, but we get to address the "pedantry pageants" of all the unrelated but seemingly related problems too?
The argument stands for itself. If your uncle gave a good argument against tax exemptions, it's a good argument for tax exemptions. Just pretend somebody else gave it that doesn't have the same alterior motive.
Attacking the motive or whatever is not said out loud is responding to a weaker interpretation
While I agree with the genral thrust of your tirade, this is not slippery slope, this is hypocracy of the highest degree.
OP proposal to ban cryptocurrencies for 'damaging environment' while we have companies who's entire business model is giving their customers cancer and preying on addicts.
1. We can work on more than one thing at a time and I’d be quite surprised if the original poster didn’t want to do something about those companies, too.
2. For all their many flaws, those industries also provide something of value. If they shut down tomorrow, people would miss having cars, pesticides, fuels, medications, etc. but if every cryptocurrency suddenly halted tomorrow nobody outside of a few speculators would find their daily life any different. That doesn’t mean that those externalities aren’t real and don’t require action but they’re widespread because there is some kind of real value to society and you’d need a transition plan to avoid disrupting a lot of processes.
I'm gonna bet OP would be happy to ban hammer the hell out of the companies who's entire business model is giving their customers cancer and preying on addicts too
It's not pedantry, it's calling out issues in armchair proposals. "Why not regulate" and "Why not let the market sort itself out" are kinda intellectually lazy propositions: there are good regulations and bad regulations, and good and bad implementations.
And banning isn't really a proper solution in the first place. It's a literal avenue for tax revenue for countries at this point. The fact that PoS coins like Cardano and L2 solutions like Polygon are bullish despite the crash in Bitcoin shows something about investor sentiment surrounding the whole energy consumption ordeal. Voting with your wallet is a real possible solution and IMHO, people are starting to take the hint.
I don’t understand why you don’t find these “where do you draw the line?” inquiries extremely relevant to this conversation. It seems like everyone here has just assumed that Bitcoin is useless and therefore the externalities from its energy usage should be unacceptable. Personally I’m not a big fan of bitcoin’s energy usage either, but it strikes me as bizarre to recommend banning arbitrary things that use energy rather than, for example, addressing the externality problem directly.
I wouldn't say OP recommended banning anything 'arbitrary'. It was very relevant to the discussion to state that the ban should be on proof-of-work currencies.
Here's my issue. There is such a thing as too-late in environmental matters. Once it's too late, it's a fire that sustains itself. Therefore, acting quickly matters. Addressing the source directly is obviously the superior solution. But I just don't see it happening at a fast enough rate. I see nuclear power in the same way. Yes, it's a little bit of trading one problem for the next, but it's a very necessary stop gap to buy us time.
This comment isn't productive. The original comment suggests states act to ban wasteful energy use. The comment you're replying to asks "who decides?" , and gives an example of energy use they find particularly wasteful.
You're presupposing this is a problem that needs a solution. I think myself and the commenter you are replying to would agree that either: A) it's not or B) it does not need to be solved by a regulatory body.
Instead of getting annoyed by people pointing out edge cases, it would be more productive to explain what criteria should be used, or admit this is a half baked solution.
Moral arguments (ones that offer only should and should not with some supporting evidence but no actual solution) are going to be dismissed more regularly because while they may offer perspective, they offer very little value beyond that. That makes them fairly non-actionable.
Choose an argument which requires you to offer a viable and compatible alternative and you'll probably get a lot more ears.
There's nothing wrong with pointing out problems with a solution and not providing a counter-solution. When one isn't provided, it can simply mean that the offered solution is actually worse than the status quo.
In this particular situation, I may not have the solution, but I know that the offered one is a short-sighted knee-jerk reaction which has terrible implications for other things
I don't know if that was their intent, but I would actually like a good answer to your parent's question to have a strong argument for backing OP's proposition, which I'd like to happen.
In my mind its not about figuring out the edge cases, its more about building a framework in which tradeoffs can be analyzed, debated, and mindfully considered before drafting legislation. In order to do this there might need to be a few conversations that some may consider pedantic.
I will say that given the text based medium of HN, it can be hard to gauge whether one wants to have a mindful discussion or if one is just trying to mindlessly ding a poster.
the thing is that 'simple' solutions are never that. and if you find that boring or whatever than maybe its time to think a bit further before making some arguments.
if a case is so easy to dismiss, it might not be a good case after all.
That’s the first time I’ve ever seen someone describe Facebook as an “edge case”.
If $900,000,000,000 of market capitalization counts as an edge case, I’d think you must be hard to please at Christmas - those are some really high standards!
> must address all the fucking edge cases or be called out by the immediate first child comment about failing to do so.
Because it is an incredibly common fallacy to ignore boundary conditions and unintentional consequences when proposing a pie-in-the-sky regulation that is supposed to just fix things.
Any regulatory mechanism is essentially a machine that will need to work with every input and minimize some class of error, be it precision or coverage or some other system level metric. Turns out the most interesting part of such a system is indeed around the edge cases, and the difficulty of handling such cases is essentially the bulk of the difficulty of building such a system to begin with.
It is like saying "why don't we build a system that punishes criminals", which sounds very agreeable and popular at that level of construal, but is incredibly complex and sophisticated at the actual implementation level; e.g. to have a process to minimize false positive convictions rather than maximize conviction rates.
> It's SO trite, predictable, wearisome and boring
Not to sound harsh but HN does not owe anyone their favorite type of entertainment and honestly criticisms on those metrics are more trite, predictable, wearisome and boring themselves than anything else. Many find intellectual stimulation and systemic thinking entertaining and thus those comments enjoyable.
Or is that you refuse to address the complexity of "Regulations"? The easy seduction of oversimplification runs high with those whose argumentation is primarily a fallacious appeal to emotion.
Maybe it's time to grow up and realize that the real world is highly complex and requires sophisticated tools, mathematics, and questions in order to better live in it?
I am not being pedantic. I am simply bringing up two points:
- There are those who are OK with high carbon emissions for various things that are a proven net-negative to the society or the planet - examples being, as I mentioned, social media, user tracking and advertising server farms, plus anything directly related to that. If these things are not a net-negative, then at the very least they could operate at the fraction of their current emissions, were they built with externalities in mind. To be OK with that but not with Bitcoin where it objectively provides some value by directly helping human lives (it is a store of value and a way to transfer money for people whose home currency is unstable or restricted by hostile governments, for instance), is hypocritical.
- Literally all legislation surrounding cryptocurrency (well, anything else too, really) by necessity has to be based on someone's opinions. Whose, is my question. Because that will shape what's allowed and what's not allowed to a great extent. Badly chosen opinion-givers lead to clusterf*cks like Disney, Sony and a few other giants effectively being in charge of worldwide copyright durations, which causes untold damage to the cultural commons.
It's not about power. Well, not electrical power. It's about control over our currency. The argument is a trojan horse for an effective ban on the entire category of currencies not controlled by central authorities.
Without Proof of work, cryptocurrency would have never been established as a novel concept. Proof of work was the only rationale way to decide who should initially own how many units of the currency.
Does it need to remain? At some point coins were composed entirely of valuable metals because that's how their value was determined, but we've moved on from that. Can't we move on from proof of work as well?
Exactly, that's how laws work: they express value judgements. Installing solar on the roof? Good, the people will help you pay for it. Earning a fortune? Bad, the people want a piece of that.
The laws set up the playing field, and the market responds to the incentives. There has never been any such thing as a "free" market, and it's a good thing too.
HN embodies this weird upper class environmentalist fascism where they proudly pick and choose what the plebes should be allowed to do with their lives based on totally logically inconsistent environmental reasons. The Musk thing was so funny for this. "No you plebes should have no recourse or experimentation against a fiat system it's bad for the environment, now don't mind me driving my Tesla around to do things like shop at expensive stores in my gated community or just kick it on the weekend doing a road trip in my TOTALLY ENVIRONMENTALLY NECESSARY electric vehicle that uses electricity from my wall socket not derived from fossil fuels at all which was not mined from not dubious sources whose environmental impact is totally not cool". I can't imagine where this ideology will land but I imagine the scope will expand greatly outside of PoW cryptocurrencies. Pretty soon commenters here will be scolding your for turning up your graphics settings in AAA games but only if you're poor and your house is in a dump that doesn't have a renewable grid.
Nah, you're right. Best not to do anything just in case we incovenience the 'plebes'. Or just in case First They Came For My PoW's And I Said Nothing. Then They Came For My AAA Games. Nevermind the burning planet, nothing should ever be done for the greater good if 100% logical consistency isn't baked into the thought.
You just proved my point. Your comment presents the idea that Bitcoin is "burning the planet" and needs to be focused on with ZERO elaboration as to why, then you use an appeal to emotion invoking the undefinable term "greater good", then you ignore logical consistency as if it doesn't matter when making an argument. Absolutely pathetic.
I think the real problem is that there is no cost associated with emitting CO2 for the emitter even though it creates tremendous costs for the society in the long term. If there was a tax associated with the act of emitting CO2 itself (purpose of which could be to invest in green technologies) then the market could be the arbiter.
I think the correct comparison is against the Bloomberg Terminal, through which the vast majority of capital flows responsible for environmental damage, occur. Not only does the terminal itself use a vast amount of power with its humongous do-it-all servers and 8-screen users, but the facilitated capital flows, commodity trading, speculation, are probably responsible for 2-3 orders of magnitude more environmental damage than proof of work.
Not everything is "Whataboutism". The parent poster wants to know how we should treat various uses of energy in the context of calls for the outright banning of specific uses. How can you expect them to talk about that topic without talking about the various uses of energy that currently exist?
Crypto is currently the only viable reason to overbuild renewables so we can expand their capacity faster than the battery technology allows us.
Just tax the carbon sources and ban building new coal power plants or reactivating defunct ones.
Instead of downvoting please give me one other example why would rational market entity build more renewables than to satisfy demand when production peeks. Because to go full renewables without batteries (and we barely have any when compared to our renewables) we need to always meet the demand even when renewable energy production is the lowest. And what should rational market entity do with the power at all other times where production is far higher than demand?
Because "mine cryptocurrencies with it" seems like the only reasonalble answer in the world where cryptocurrencies exist and people with too much money buy them enthusiastically.
It's amazing to me that the real answer on how to make renewable energy economical (while avoiding the ecological toxicity of building utility-scale batteries) are getting downvoted.
Exactly! Just because you don't think something has value doesn't make it so. Value is a matter for the market to decide.
Electricity usage has almost no negative externalities. Electricity production does. Attacking people for using their own resources on something that they find to be useful and worthwhile is foolish. Confront the actual problem, and quit harassing innocent third parties.
> If that's the case, who's the arbiter of what's "too much" power for a use case?
I see a lot of people replying with a slippery slope argument of this nature, which makes me think I should explain my argument better.
I'm not arguing that burning electricity alone is the problem. I'm arguing that burning electricity for the direct purpose of making a financial product is a problem for society, when 1) the financial product explicitly incentivizes burning up as much as you can to make more money and/or 2) burning up that energy can be alleviated by other technical solutions.
I'm not arguing that mining should be illegal. I'm saying the 'sale' of the results of that mining should be illegal. Using or making incandescent lightbulbs is not illegal, but the sale of them is banned or restricted in large portions of the world [1]. Less harmful alternatives exist, so sale is disincentivized, the world moves on.
This is not the government deciding how you spend energy resources. You can continue to mine all you want. But you shouldn't be rewarded for that.
One thing I should point out is that I recognize that an alternative solution for these incentives is to make electricity always so expensive that it costs more money in electricity spend to mine crypto than you can make money of it. Make electricity price depend on crypto price. Needless to say I don't see that working out :)
> If that's the case, who's the arbiter of what's "too much" power for a use case?
The legislature and the regulatory agencies it has created, obviously.
The exact same way literally every other environmental regulation has ever been passed.
There are entire divisions of agencies dedicated to drawing the line of "too much" in all sorts of areas, for pollution, poisons, contamination, energy usage, etc. In fact, pretty much everyone but extreme libertarians agrees this is one of the main functions of government.
So while you might not agree on the resulting policy or even the mechanisms that arrived at it, it is a solved problem. You don't need to wonder how we'd accomplish it -- that part is easy.
Last time I checked, Facebook isn’t designed to adjust its computational difficulty in order to suck up any amount of energy thrown at it to do the same (pitiful) amount of work.
> If that's the case, who's the arbiter of what's "too much" power for a use case?
The difference is that Facebook’s energy use potential is limited and gets better with improved computer tech.
There is a limit to how much analysis you can do. As you get more efficient hardware, the energy use would go down. Facebook also invests a lot of effort in optimizing their code to run more efficiently.
With proof of work crypto, the only limit is the price of crypto. Despite any efficiency gains, you can always expect the energy use to scale with the price of crypto. For example, a 10x more efficient miner, won’t cause 10x less energy use, it may actually increase energy use as more people mine with higher rate electricity.
There is a chance that we develop a situation that the most monetarily efficient thing you could do with electricity is to mine proof of work crypto. If that becomes the case, then even a carbon tax won’t help because proof-of-work crypto can easily pay the tax compared to all the other uses of electricity.
It's easier to get Facebook to be carbon neutral because they are a centralized institution, and it only takes a committed government to zero down on a corporation and force them to move to clean energy or pay a carbon tax.
With crypto it's too decentralized to implement either.
> who's the arbiter of what's "too much" power for a use case
Ultimately Mother Nature will be the arbiter. If people spend too much time arguing about politics instead of either lowering power usage or moving to clean energy, those people will be killed sooner or later.
> So burning electricity on running a cryptocurrency is not right, but burning electricity on running servers for Facebook or user tracking is all right? If that's the case, who's the arbiter of what's "too much" power for a use case?
Yep, I hate to say it, but even FB is more useful compared to BTC. No one uses BTC for actual payment but to hold a value. People holding BTC could just switch to MtG cards and saved tons of energy without losing any benefits that they are currently using.
> If that's the case, who's the arbiter of what's "too much" power for a use case?
"If there is a clear and obvious better with minimal impact."
It's just that simple.
We make choices like this all the time. Here in the US we set CARB rules to slow emissions but we don't just ban old cars even though that would be better for the environment. Grey is okay in laws if the black and white bit behind it is clear! (Reduce emissions if possible with least possible impact on people.) Otherwise you will never be able to improve anything until the harmful methods have grown too much.
This isn't exactly what you're talking about, but I keep waiting for Google's Chrome team to add an energy rating icon to the browser that gives you a rough feel for how energy intensive a given page is.
At some point the shaming would begin, web devs would respond, and then I'd generally get what I'm really after -- much faster page load times!
The difference is that Facebook is actually using electricity to provide services that somebody wants. It's just that you happen to disagree with the value of this service. Meanwhile, Bitcoin uses a country's worth of electricity just to provide a tiny amount of accounting.
Facebook used 5 TWhr in 2019 (citation: totally unverified top summary from google). Bitcoin alone is estimated to have used 110 TWhr in a year. To put that in perspective, that is sixfold the power output of the Diablo Canyon Nuclear Power Plant. The Diablo Canyon Nuclear Power Produces power on the order of magnitude of detonating two small atomic bombs per day.
The key difference is that I'm certain that Facebook makes continuous efforts to use less energy. Maybe not for environmental reasons, but they have an economic incentive to increase efficiency.
Regulating the energy consumption/efficiency is more akin to fuel efficiency standards for cars.
The elephant in the room is bitcoin literally requires the mass consumption of computation to work - the more the better. And it was designed this way. In comparison, Facebook and industrial processes work to make their processes more efficient and use less resources for their workload. Bitcoin will just gobble up any efficiency to do more mining and end up consuming the same amount of resources.
Bitcoin is an endless energy pit. The same isn't true of things like Facebook.
Burning energy to prove that you burned energy is not right. You can run cryptocurrency without requiring proof that burned electricity.
You don't need to worry about how much electricity was burned, only that it wasn't done in exchange for a plaque saying "I filled a swimming pool with gasoline, then lit it on fire"
I know something about addiction so to me Bitcoin enthusiasts sound like alcoholics who justify their drinking by saying "many people drink and doctors say a little drinking is good for you so lay off me." The fact that I couldn't even criticize Bitcoin's energy usage on HN util Elon Musk came out against it reinforces my opinion that it's an addiction. I imagine Bitcoin is a game like poker with a bluffing and holding strategy. Bitcoin as it is currently played has many addicted to it without regard to disastrous environmental consequences.
You people obsessed with reducing humanity’s energy usage are so tiresome. Anyone who actually cares about the well-being of humanity should be focused on increasing the amount of energy available. I want to climb the kardashev scale, not live in an eco-pod and eat bug burgers so I can scrounge every last joule.
Bingo! The more energy a system has available the greater capability it has. For example, if a mining community is able to generate cheap excess power it opens up possibility for local smelting and foundry industries.
I think of each community as a game of Civilization. As you progress you unlock higher rungs of the tech ladder. Exporting your raw materials to later import finished products made from them is a waste of resources and stagnates the local industries at the raw material stage.
What industries could be developed in your community if the power was available?
Bitcoin mining creates a price floor for energy. It is a buyer of last resort with infinite appetite. By pushing up the value of energy in the market, it encourages expansion of energy production.
Again with this same tired nonsense on Hacker News. Famous for censoring worthwhile comments to death while leaving up misinformed "curious" posts that mislead everyone. Bitcoin is using half of the power as banking systems. Bitcoin is using half of the power, of the gold industry. Might I suggest, if you think you can suggest banning things for using too much carbon, that you first quit working, quit driving your vehicles, and disconnect the power in your house. I don't think it's good for the environment in you doing so. In fact, your carbon consumption should be banned. Turn your computers off. Unplug your wasteful device chargers, you've had enough.
The amount of energy used is only one aspect of the matter. The other is value derived from that energy. I think it is safe to say that regular banking provides not just twice the value of Bitcoin, but in fact probably two orders of magnitude more. Pretty much everyone uses regular banking, while pretty much nobody uses Bitcoin, and not only they use banking more, they use it many times a week or even a day. The comparison is not even close.
And when the comparison is not even close, why are you the one making it? All you've stated was an old opinion and not a fact about what is more useful, or how they are used. It's totally fine for you to have just said "I don't understand either banking or Bitcoin whatsoever." Bitcoin is going to get a lot more global over the next several years in it's use cases and for savings. I hope to see you commenting later on after becoming more informed about our current times of inflation and what the people want, vs what is forced on everyone so that they have no way to save hard money. The revolution isn't going to wait for everyone who chooses to be truly ignorant about Bitcoin. And there is only Bitcoin.
The regular banking system leaks your purchasing power over time via the mechanism of inflation. The regular banking system relies on the US Dollar which is backed by proof of violence - aka the largest military industrial complex ever created. Externalities are a net negative. It's important to consider the externalities of every system. When compared with the death and destruction and burning oil fields in Iraq, Libya, Syria etc, the cost of proof of work seems trite.
Something tells me that a user named "BTCOG" is not here to provide rigorous objective analysis but okay lets attack the strawman.
The number of bitcoin addresses with a balance is 30 million. The number of bank accounts is in the billions.
As you said, BTC is two orders of magnitude less efficient than banks assuming mining provides the same value to people as ALL of the services banks provide including loans, savings, and money transfer which IT DOES NOT.
Something tells me you just like to go on tangents nobody was talking about here. Never once, have I ever said that "Bitcoin is two orders of magnitude less efficient than banks."
That's where it stops, because what you've said is nonsense.
On the surface this sounds like bitcoin's PoW use will simply stop. It's actually the entire opposite.
When governments ban it, they go after sizeable, identifiable organizations running these operations, that is their only choice. These operations are optimized in their energy usage, because it's only in their interest to reduce their consumption relative to the value of the coin they mine.
The moment these operations are shutdown, there is a massive sink in the hash rate, smaller operations and hobbyists will rush in to fill it. Hash rate gradually climbs back up and instead you have 10x the energy usage because you can no longer run the PoW in a scalable way.
But in the mean time the value is likely to have tanked, because if they can't trivially be traded for national currency, the interest in them will wither.
This is the thing that has always bugged me about cryptocurrency - people are only passionate about it because they want to make more traditional currency with it. Then they adopt this "decentralized" rhetoric. It's always felt hollow. If owning/trading bitcoin became a crime, it'd be done.
Ever since Dogecoin had a moment, there's now a million coins trying to engineer their own "moonshot".
This is on top of the security issues and of course the energy issues. Cryptocurrency is garbage.
The other choke point is conversion to and from USD. With a law, BTC loses any corporate 'investment' (eg, Tesla), and coinbase stops converting to/from USD, making it much more of a pain to work with.
I deleted my comment that was essentially saying the same. For once, USD's extra-territorial jurisdiction could definitely be put to good use. I don't understand why big political parties haven't thought of that. It's an easy win, and it would bother an insignificant portion of their voter base.
This would be like playing whack-a-mole. Other PoW cryptocurrencies are out there and it does not make sense to just shut down the mining hardware. Miners will just mine something else.
That's assuming PoW cryptos would remain attractive to smaller operations and hobbyists. I'm not sure that's a given. If no business can change your coins to fiat, and no business could accept your coins in the first place (not that they really do now, but whatever), your options for getting anything out of your coins is... what? Posting on craigslist to find people to meet up for illicit localcoin transactions?
And if you can't really do anything with your coins but have your coins, why would people rush out to break the law to mine them?
The idea was to ban trading, not mining. If Coinbase and all the other legitimate companies that facilitate crypto markets for U.S. citizens had to drop PoW coins it could tank the price significantly and set the coin mining industry back to when it wasn't such a huge problem for energy use and GPU supply. Speculation would move to PoS currencies and BTC would stay valuable, but would act more like an altcoin.
trading is only a small portion of bitcoin's market cap. most coins are outside of exchanges, in noncustodial cold storage. even without smooth trading platforms people will trade bitcoin peer-to-peer because bitcoin solves real world problems
Unlike drugs which have limited substitutes (alcohol and caffeine I guess), PoW currencies would have several functionally equivalent replacements. I doubt we'd end up ravaging underprivileged communities as they turned to black market Bitcoin.
You're only proving our point. USD is a reasonable currency for savings and/or as world-wide currency as long as it's liquid, non-volatile, backed by a big, stable and powerful economy. This could change, but not overnight.
BTC's main uses (speculation and laundering) are possible only as long as it can be exchanged into fiat. This can change tomorrow if the right strings are pulled.
Doesn't the mining difficulty decrease then though without the massive mining farms, and thus the electricity required decreases? I'm not an expert in crypto mining.
> smaller operations and hobbyists will rush in to fill it. Hash rate gradually climbs back up and instead you have 10x the energy usage because you can no longer run the PoW in a scalable way.
This is false. Miners will spend about the same amount of money they get from block reward to run their operation. Asymptotically, this money is spent to buy electricity. This is the result of competitive pressure from other miners. What you will observe instead is the same amount of electricity burned but with 10x less hash rate.
Fucking thank you. I get just as many downvotes when I suggest this but it's very obviously the right thing to do.
PoW doesn't scale. It eats up power needlessly and we're only stuck on it because the original BTC was a PoW cryptocoin. Simply banning trading of PoW coins would do mounds of good - the crypto community would be better streamlined to move toward PoS coins of the future and environmentalists wouldn't have to waste their resources lobbying to ban BTC anymore.
> Banning their trade won't categorically stop PoW cryptocurrencies. What it should do is completely tank their value and get the world to move on to less destructive coins.
This ban needed to be internationally, though. Pretty difficult to enforce on a global scale. And then it would only have a short term influence on the price of, say, Bitcoin, until enough “black” mining power emerges.
I would just relax. Bitcoin is not going to destroy the planet. In the long run it’s going to be a niche financial tool compared to the scale of Ethereum or other competitors (Cardano, Solana or Algorand). It’ll be the PoS enabled DeFi networks that are going to disrupt the banking business.
In the long run, it's going to be very green. There are Crypto Climate Accord groups working to ensure Bitcoin is carbon-neutral by 2030. What is being done currently is making leaps and bounds in using solar, hydro, wind and trapped energy for bitcoin mining. It's pushing industry to green. Not the phony narrative that's constantly pushed by people who are quite literally, spreading allowed disinformation across HackerNews for the past several years on end.
Are the people downvoting the above comment considering things like trapping excess flare gas [1]? This is energy that is literally wasted otherwise, and would be vented into the atmosphere, if not used for PoW mining (or put to some other undetermined use, but PoW is the only profitable alternative that has made sense so far vs just flaring the gas).
Maybe there need to be more guidelines around how to use excess energy instead of coal, but to totally disregard that PoW could be mined from excess energy is shortsighted. Flare gas is just one example.
> This may be a radical take, but I think nations should introduce some unprecedented legislation: ban trade of proof of work cryptocurrencies.
That's not only radical, but a grotesque knee jerk reaction.
If you think about renewable energy, there's a problem of mismatched production with consumption and transmission. This causes wasted energy (or energy that is very low value), which makes renewable energy projects less viable.
Sure, one obvious way to address that is to add batteries to store such energy. Now, go mine (and refine) enough lithium to build utility-scale batteries. That's a huge environmental issue that no one wants to talk about, specially Tesla/Elon.
What's a competitor to energy batteries? Proof-of-work mining of bitcoin: it make renewable energy projects economically viable, because the energy of low-usage times can be used to mine bitcoin, which can pay for energy of high-usage times.
If there's an environmental/carbon cost to BTC mining, then attach a carbon tax to it (or something like that).
If one thinks about tracking the carbon cost of a mined BTC (based on the energy source used to mine it) such that a carbon tax can be accurately exacted, the usage of blockchain to track carbon offsets and cost is a pretty obvious thing that comes to mind.
Yeah man, Government should point guns at people who don't comply with your ideology! Let's advocate violence against people because they do stuff we don't like!
If the government starts arbitrating on what is a judicious use of energy on environmental grounds, then you're a short step away from banning, say, beef production.
This certainly seems like an unnecessarily oppressive stance to take, all effectively at the whim of your own personal aesthetics.
There are tons of things that people do that I might deem not worth the environmental impact, like flying a hundred thousand miles a year for business, or eating beef, or driving to work every day, or having bigger houses and lawns than they need. Seems kind of arbitrary to allow most wasteful things that people do but draw a line at being able to participate in a certain kind of blockchain. The per-person impact of holding and transacting with bitcoin is not egregiously high compared to all the other things people do in their day to day life.
And based on ethereum's move here, perhaps people are starting to vote with their wallets anyway and such dramatic limiting measures aren't needed?
The economic and monetary risks of deflationary coins are potentially much greater than the environmental risks imo (Even Douglas Adams tried to warn us: https://benoitessiambre.com/specter.html ).
You don't necessarily need to ban the coins to fix this aspect however, just make sure they don't get integrated in the financial system too much. They're basically digital gold. Gold was ok until central banks tried to anchor to it which caused the Great Depression and maybe even WWII.
As a technical person, I think we should be a little more careful than to ban a technology because there's a proposal for a newer tech that could work (knowing if it works is harder than a posting on a website saying it's going great in beta). Crypto at all is risky and the tech is uncertain. Seems pretty extreme to get the guns involved on the premise someone somewhere can do it better.
How about we just make people pay for their negative externalities, and let them do whatever they want. Tonnes of things people do are wasteful, no one needs a sports car either, but for some people it is worth paying extra for it. Why should it matter what I'm using my electricity for as long as I pay for the negative effects.
If you want to encourage other uses of electricity, subsidize them, don't just ban arbitrary forms of consumption.
> How about we just make people pay for their negative externalities, and let them do whatever they want.
Well, for one, because that tends to mean "rich folks and large companies can act with impunity, everyone else not so much".
For two, we actually do discriminate quite happily between different uses of things. Maybe it's OK to keep energy prices low for households, as a compromise, but not for crypto mining?
Whats the problem with rich fold acting with impunity, so long as they pay for what they use? If someone burns enough electricity to power 1000 homes, but they pay for the environmental impact, and are charged enough for the electricity to fund building more generation capacity, that's a net win. Giving each household some amount of free or subsidized power makes sense. If they want to burn that power crypto mining that's their decision.
> If someone burns enough electricity to power 1000 homes, but they pay for the environmental impact ...
Well, firstly, are we even sure that's really possible?
> Giving each household some amount of free or subsidized power makes sense
Which is basically exactly what I was talking about - we can and do decide that some uses are better than others, and use regulation (some of which may be tax or credit) to achieve that.
We already do this. I'm not sure why people are so aghast that we might do it some more for PoW cryptocurrencies.
We're supposed to just ban uses of energy we don't like? Why not a complete and total ban on electricity consumption by the adtech industry? Surveillance capitalism does more damage to society than these little coins ever will.
This is an insane take. Proof of Stake is NOT secure, the stakers can collude to reorganize the chain at almost no cost. This is like the exact system we tried to get away from, the USD system is also a Proof of Stake.
I’ve thought through this over the last few days and I don’t think it’s viable unless all countries enact the ban at the same time. Imagine country A bans trade or mining of PoW coins - that puts the citizens of country A at a disadvantage to citizens of other countries, and encourages holders of PoW coins in country A to exfiltrate wealth and capital from country A.
You end up needing to solve the same type of problem that PoW solves in order to enact a PoW ban simultaneously across all countries - how can all parties trust that every other party is being honest and will follow through (Byzantine Generals problem)?
I'm a crypto-skeptic, but why would I ever hold a crpytocurrency in that scenario? If governments would ban it for environmental goals, they'll ban it for political goals, too.
The only interesting bit is cryptocurrencies would have to legitimately bring something new to the table that's actually better than the existing financial system in order to be viable.
We don't need to ban PoW crypto entirely, just tax the carbon emissions associated with it. If miners can switch their entire operation to geothermal in Iceland, then why should I care?
I can see that this idea comes from a place of good intentions, but I think this is a slippery slope. With this idea, PoW Ethereum is banned, but PoS Ethereum is ok; how does one even regulate that? And what of things like Chia (proof of space, i.e. "let's hog hard drives")? And what about L2 solutions? And how much is too much? Should Ethereum 2 be banned if Nano is shown to be more scalable? Where does one draw the line?
I think that at some point, PoW will become so economically unfeasible that it'll simply make more sense for miners to ditch those coins and whale up on PoS ones.
Banning a certain kind of computation is a novel idea. Was this a knee jerk reaction or have you considered all the other types of computation that should not be allowed and why? Do we have an empirical understanding of the negative impacts of these specific kinds of computation, their general threat to humanity, and the negative side effects of regulation?
How do you ban open source software that millions of people already have? It's like banning algebra or something. You can tell people they can't do it but you can only truly ban it to the extent that you can micro monitor and enforce the actions of every person interested in it.
To me this illustrates a lack of understanding of the space.
While the energy consumption of bitcoin is debatable due to the unknown usage of clean, renewable energy (some reports are at 75%) to to secure the network and prevent bad actors, even for arguments sake, we can agree the energy consumption is extremely large. We also do not know how much energy is required to maintain SWIFT, or the global ACH network and other banking services.
However, some of the biggest plagues to society are rooted in central banking policies that over time devalue a nations currency through excessive money printing backed by nothing, or gambling via derivatives that when a bubble pops requires bailouts. Even worse, where we are now is done via quantitative easing which is a fancy word for more money printing to buy government debts to keep the economy afloat. If Bitcoin or other cryptocurrencies can provide all the same services banks offer (borrowing/lending/saving) and be backed by a finite number ensuring value over time then we, as a society will be less manipulated by politics and therefore experience deflation which will could close wealth gaps.
Bitcoin may have an energy problem but the problems it aims to solve are extremely important as well. “Necessity is the mother of invention.” If Bitcoin can really solve some areas maybe the conversation should be about how can get 100% of BTC energy consumption to be renewable.
I'd much rather put kwh limits on proof of work. That would stop large farms that aren't green.
Outside of ethereum, proof of stake is no different than a database. The ownership is so centralized that you only have 3-5 people/organizations approving everything.
The whole point of crypto was to be decentralized, proof of stake is not that. Cardano, solana, they all are pointless as a token because the whole supply is largely owned by a few people.
It might be worth noting that not all Proof-of-Work is just finding hashes, newer cryptocurrencies make more economic and intelligent use of the work used for proof.
How about continuing research and development of solutions providing cheaper, greener energy instead of sparking righteous war against something that consumes energy based on incompetent social media fart?
The loudest voices against something are typically hypocrites that happily fly on their gas guzzling private jets bitching about people driving their oh so inefficient cars to work.
This is an Orwellian take to want the government to tell you how you're allowed to use electricity. Is watching TV a waste of energy? How much energy goes into steaming Netflix?
If you want to target an externality of the free market, do it directly: simply tax emissions. This will guide the market towards greener energy generation and direct capital out of activities that produce emissions without generated value.
What if you simply don't know enough to not know that you're both wrong and being lied to by the ETH marketing team? Would you be embarrassed that you believed rhetoric? Probably means you would be easily susceptible to most conspiracy theories.
Even if banning PoW were agreeable on logical grounds (ie, overcoming the arguments of the sibling comments to this one), is there any reason to believe that such a law will:
* Reduce trade
* Reduce value
* Reduce carbon use?
Is there a case ever where an illicit market found a price equilibrium which was lower than the licit one? And, if such a ban does cause the price go up, won't the same incentives cause continued mining competition?
> This may be a radical take, but I think nations should introduce some unprecedented legislation: ban trade of proof-of-work cryptocurrencies.
Unless you want to also ban servers or services that are using deep learning training, decoding massive videos and livestreams on storage systems that are also burning up the planet.
It's not fine to allow PoW cryptocurrencies to continue to burn the planet but collecting mass amounts of user data and using wasteful deep learning training continuously is fine to burn up the planet on GCP, AWS and Azure?
Bitcoins "power consumption" has two aspects - mining and processing transactions. The power consumption used for mining (or processing) is directly correlated to the relative earning potential - i.e. bitcoin price - power cost. Mining takes up the vast majority of the computation(s) and mining bitcoin should end somewhere between 2040 and 2050.
That is to say, it's self correcting. If the price of energy increases, there is less mining. Alternatively, the miners are also incentivized to find cheaper or develop cheaper alternatives; this spurs innovation.
If prices rise due to mining, innovation will take place and more energy will be developed.
There's nothing wrong with this mechanism, as it corrects itself. In 2050 when you can no longer mine bitcoin we will that have an abundance of cheap power. Which is the single greatest factor in reducing poverty.
Frankly, I think this comment is off base. So far there have been zero negative measurable impacts from power usage related to crypto.
This is a really weak argument. The better argument is we shouldn’t tell people
how to use energy they purchase and to tax consumption of it.
> innovation will take place and more energy will be developed.
This has way too many assumptions baked in. Increased demand will not guarantee a clean supply, nor does it guarantee technological progress in performance of efficiency.
Bitcoin mining uses as much energy as Christmas lights in the USA. Should we ban Christmas lights because of their energy usage? This debate is turning to madness
I'd be in favour of banning the use of fossil fuels for corporations mining proof-of-work cryptocurrencies. There is a few examples of Bitcoin miners using Coal power sources!
> Ban their trade because global society shouldn't accept rampant incentives to literally burn up energy
Videogames run GPUs at full capacity too, we should ban them too. No one NEEDS to pretend to be a cowboy for 100+ hours each across 36 million GPUs.
Actually maybe there should be a ban on computing power above mobile CPUs available to non-government bodies, if this really is so devastating to the environment we need to limit the amount of damage people can cause as individuals, why does a normal person need a GPU anyway when smart phone graphics should be enough.
They might only have one GPU each but there are a lot more of them, if even half of all people who bought RDR2 complete it that would be similar to 1.5 billion GPU hours of crypto mining (Eth for example).
32 million bought it, takes about 100 hours to complete runs GPU full capacity.
If we're going to say using GPU computing power is bad for the environment then we can't just stop at crypto because it's convenient. We have to look at all computing and videogames isn't something that should be considered essential either.
Government can already effectively (and is already inadvertently doing so) prevent mining by manipulating energy prices within it's jurisdiction. It does NOT mean that government can easily ban the use of PoW blockchains.
Miners will move to where is is profitable and will be ultimately incentivized to find cheaper (ultimately cleaner) means to mine.
POW guarantees distributed security better than any other currency so far. POS relies on a _relatively_ small number of nodes to run the network.
POW is more _government_ proof than any other method. To many the threat of central bank digital currencies is justification enough for POW's energy consumption.
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[ 3.0 ms ] story [ 396 ms ] threadThis doesn't fix the problem but it does fix the environmental impact.
This means that if you start acting maliciously, or even just not fulfilling your responsibilities (e.g. you let your computer go offline), then you are punished for it (depending on the severity of your offense, obviously).
Aka, you can't just wait for the money to roll in. You have to run a node, you have to verify blocks, and you have to make sure you're acting in the best interest of the network + keeping things running smoothly.
Specifically you are punished for:
- Being offline (the penalty is small, and roughly equal to the rewards earned by being online
- Running the same validator twice (huge penalty, be careful!)
It would seem that if some participants on the network can't abide by their national laws while running some contracts, the outcome would be inevitable. And then you would just get multiple chains running under multiple governments. This seems like a reinvention of the international banking system?
In this case, you can think about it as one person saying "I think it's a good idea if we do this" and a few hundred other people saying "I agree with you". Obviously, they're more likely to agree with the first person if they have some sort of institutional legitimacy. But is that "trust"? That's very different from the definition of "trust" that's generally used in protocol design.
https://haseebq.com/ethereum-is-now-unforkable-thanks-to-def...
So while this article is a (good?) argument for why all DeFi operators must follow USDC, it fails to make the case for why anyone else should care about the fate of centralized stablecoins. Maybe these reasons are obvious! But I don't know them.
Plus, due to slashing, you are uniquely responsible for mistakes your validator makes. So, staking comes with both responsibilities and consequences for breaching them, just like any legal contract.
The fact that you can rent a turnkey cloud solution to do all this work for you and split the profits isn't really relevant to the argument IMO (I consider staking with Coinbase "renting cloud computing" in a specialized way).
But as soon the switch happens, people will want to be staking their ETH in pools that will earn them money.
I don't have any problem with this in general, I don't think it is wrong to do business like that. But I personally prefer PoW because it looks like it naturally separates the mining work from exchanges, creating more decentralized economy.
How's that decentralized.
The times of home mining with CPU/GPUs are long gone
so do Ethereum users.
>In a PoS system there is an incentive for large stakeholders to increase block sizes.
this doesn't work because of Ethereum's social contract, just like it wouldn't work with Bitcoin.
Just because you stake a lot of ETH doesn't mean you suddenly have unilateral power to increase block sizes. There is a thing called consensus, and the entire community needs to achieve it to implement changes. Good luck trying to convince the community that bigger blocks that make it harder for small users to validate the chain is a good idea.
PoS also does not come with the property of innovation and disruption. In a PoW (especially ASIC-based) system you will find new ways to outperform your peers and disrupt old players.
PoW incentivices cheap energy in developing countries more than anything before. It is the fix for environmental problems.
That can only become true if and when governments decide to suddenly ban PoW, so that all that cheap energy services anything other than crypto. I don't think it works as an argument in favor of PoW, for the same reason "we're only spreading knowledge of chemistry and democratizing process engineering" doesn't work as an argument in favor of drug cartels.
Also, 'SR2Z is right - "cheap energy in developing countries" == coal.
IMO: it's much better than PoW as long as it doesn't end up too centralized. I'm not too sure how I feel about the minimum amount required to stake though, that seems a bit odd.
Also the current fiat system is debt based, which means that the vast majority of money is printed by banks and the money printing power is at the highest ranking sales person, and hidden.
If a person thinks that fiat payments work well, he hasn't really travelled yet to different cultures.
Fiat works, and works well. You're advised to keep some cash on hand, but it works multiple orders of ↑↑↑ [1] better than bitcoin
[1] https://en.wikipedia.org/wiki/Graham%27s_number
This is the genesis of a new crypto universe. It's hugely hyped, and a lot of it is clearly BS. But underlying the hype and hysteria there's a kernel of a new paradigm emerging.
Crypto applications promise to provide disintermediation on a scale not seen before. Direct peer to peer transactions, conducted transparently, without a need to verify trust and happening simultaneously anywhere in the world.
Not only that but smart contracts bring with them the potential to do stuff that simply is not possible right now. For example, providing instant conditional transactions (if my fave rental car is available book it, otherwise search for another solution, but only from these sources at this price) etc etc etc. We don't know what this means, but it could be a revolution. Or not. :)
Smart contracts, and all the other buzz words turn regular folk away. I'm hedging my bets on the coin with a dog on it for mass adoption. Even the word "Ethereum" (and "Eth") is less user-friendly to "Doge".
For me, all this ETH stuff is just hype (very few ETH owners actually care about the currency side of things and its already gone too far into pyramid scheme territory to ever recover imo). The dog coin works just great as it is right now for the amount of users it has. Any upgrades should be manageable before they are ever necessary.
They don't. All of "disentermidation" immediately turns around and restores all the institutions based on, you know, trust.
> Direct peer to peer transactions, conducted transparently, without a need to verify trust
Yup. Until you pay for something, and that something never arrives.
> (if my fave rental car is available book it, otherwise search for another solution, but only from these sources at this price)
Literally nothing prevents you from doing it right now, with existing technologies... Oh, wait. All rental car companies are closed to any integrations of any kind. Smart contracts will do literally nothing in this scenario.
Besides. If I go and rent a car from, say, Hertz, I get a contract written in plain language. It may be a little obtuse, but I can read and understand it. Smart contracts on the other hand are written in obscure esoteric programmming languages. Good luck telling people "don't worry, you won't be scammed out of your money because it has 'smart' and 'crypto' in it".
In practice it has never been more that a nuisance, as I've just gone to a different bank's ATM and it's been fine.
Count me among the people who have travelled and never encountered problems. I always bring two cards in case something weird happens, but I’ve never had to use the backup.
If established banking cards aren’t working in a country, it seems unlikely that relatively recent cryptocurrency would be working any better at their banking institutions. If their banks can’t take your bank card in exchange for cash, I doubt they’re going to be set up to take your Bitcoin.
Yes, this can be a real problem when traveling.
> Bitcoin always works …
This is obviously a completely bullshit statement. Bitcoin almost never works in places where credit cards or ‘fiat’ are accepted.
> If a person thinks that fiat payments work well, he hasn't really travelled yet to different cultures.
‘Fiat payments’ covers everything from the ATM network to cash to western union to Hawala. All aspects of fiat payments indeed have problems.
However the idea that today, Bitcoin solves these problems outside of a tiny fraction of contrived cases is a delusional fantasy.
Almost nobody in the world trades in Bitcoin. Almost everybody in the world trades in ‘fiat’.
However as a speculative instrument eth and Bitcoin are not my cup of tea.
How does that work? Is it a vanilla Eth transfer, or is a contract generated each time and you review the Solidity code before proceeding?
I have a ton of Bitcoin transactions with friends. Originally through the blockchain, now we use coinbase email for free transfers.
I don't keep my stash on there, but I keep spending money in there.
Ethereum will effectively have a cap of 120m, which will burn down to 100m over 12 years.
Similarly, you shouldn't necessarily trust a central bank when they want to print money. (I'm not inherently opposed to it and think the pros probably outweigh the cons for some situations and intents; just saying accountability in cases like these isn't as simple as "it's the people's will".)
Who has the highest amount of power in Bitcoin, and why haven't they done anything, for example increase the issuance?
How would that benefit them?
It's besides the point though, you can certainly benefit from holding power of the protocol but the reality is that there is very little of this dynamic.
Hence the impetus to try something different and more befitting the future of our species.
So, do you think that the dollar - and specifically the inflation schedule and distribution mechanisms of the dollar - can be reasonably said to be under democratic, rather than plutocratic, control?
But let's face it: most of the hype is in well-functioning democracies. Here, I cannot fathom why anyone would wanna replace fiat currencies with this crap.
In the "well functioning democracy" U.S. You have:
- Mistrust in institutions
- An insane asset inflation bubble fueled by the biggest fiat printing spree ever
Sure, the state hasn't failed. But are you really surprised people want to expose themselves to a new paradigm with different fundamentals for money and finance, this year?
Good luck paying for things with cryptocurrency-of-the-day without electricity. Or without authorities to call if your trading partner pulls a gun on you. But I'm sure the American solution is a diesel generator and an even bigger gun ;-)
This doesn't even begin to consider long term debt.
Mining has been concentrated in the hands of a few gigantic mining pools for a while, and PoS will actually make Ethereum more democratic. Again, this is based on documentation, there might be unforeseen consequences
Unforseen? This has been known before the miners eliminated the soft cap on EIP 669.
https://www.globalpetrolprices.com/electricity_prices/
Obviously he's biased in favor of PoS for various reasons, but I think it's a worthy read.
The delusion that crypto is or can be the best thing humanity has ever created has to come to an end.
Let crypto just be another moderately useful system in society and let the speculation game die out.
The main difference with the fiat world is that with Ethereum you have transparency, and there is no corruption. You can't just bribe a politician to enact a rule you want. Everything that happens in the network is recorded permanently, and rules are not a suggestion, but a practical reality that can't be circumvented.
With endgame PoW only the rich can acquire mining ASICs and locate them in cheap/free (stolen) electricity zones. The vast majority of the world is entirely excluded from PoW mining BTC because the cost of electricity in their region makes mining unprofitable.
We could bring microtransactions to the web, and replace a lot of advertising, if transaction costs were zero.
Unfortunately, our representatives don't really represent us, so we're much closer to oligarchy than democracy.
Also, a full democracy it terrible. It's basically the equivalent of facebook... having representatives who's full time job is to be knowledgable is much better than giving everyone an equal say on everything.
I just wonder what the next criticism will be
It fits the risk profile to let that team attempt to deploy and merge a proof of stake network with sharding
People motives to get into crypto are clear. They want to subtract themselves from government policy of constantly printing money. BTC takes care of that and it's a 14 years brand which is extremely politically expensive to make illegal
On the other hand people are perfectly satisfied with their experience on Youtube, Amazon, Google, Facebook, Ebay, JPMorgan etc. which are the entities which Ethereum aims to disrupt
From your lips to God's ears. If the price falls steeply there will be a glut of gpus flooding the market and I'll finally be able to build a pc.
The market signals are right there
Overworking your engineers will most definitely lead to compromises.
But good to see that Ethereum came to their senses and are serious about reducing the environmental impact they have.
I don't know the technicals of why the migration has been gradual, but the destination has never really been in doubt.
Otherwise, theoretically you can "overwork" i.e. (work more than standard 40 hour weeks or some standard of work hours) whatever without compromise
It makes things more inefficient, but it doesn't compromise final quality assuming issues are found and addressed.
It's fine for a few days, but after that it's a false economy.
https://www.fastcompany.com/28121/they-write-right-stuff
https://sw-eng.larc.nasa.gov/supporting-products/archive-of-...
But I feel it fair to consider an organization like NASA as an exemption from the norm. This level of detailed error catching doesn't make sense for, say, a facebook clone startup.
That said, someone should send this comment to a Tesla engineer.
If you ask people to work 12 hour days instead of 8 days, does each day provide 8 hours worth of work, 12 hours worth of work, or another value? Can we reliably say that any problems arising from working over 12 hour days are caught and handled at the same level as they would be if people were working 8 hour days?
That's simply not true. Humans aren't machines. Productivity falls off a cliff after 50 hours, and after 55 you may as well not even be in the office. There are diminishing returns with "overwork"ing.
[0] https://siepr.stanford.edu/research/publications/productivit...
Is it not possible there's good reasons they didn't move to proof of stake sooner? "Came to their senses" seems to imply they had no good reasons.
The Ethereum protocol was designed with PoS in mind and has a built-in difficulty bomb[1] to prove it. In short, this difficulty bomb makes it exponentially harder to mine ETH over time. The goal of this feature was to encourage all participants of the ecosystem to transition to PoS as quickly as possible.
Given that, the implementation has not worked out totally as expected, as the difficulty bomb has been pushed back a few times over the years. However, to answer your question, the reason they did not move faster is because this transition is hard and plays in some uncharted territory.
[1] https://medium.com/fullstacked/the-ice-age-is-coming-ee5ad5f...
> Note that in the future, it is likely that Ethereum will switch to a proof-of-stake model for security, reducing the issuance requirement to somewhere between zero and 0.05X per year.
Unless management is really vigilant, when people are working overtime everyone on the team feels pressure to do the same.
Ethereum has been talking about PoS for a long time, so until they actually deliver we should be looking at existing decentralized PoS coins.
Still it's very likely that this time the switch to PoS might finally happen unless something unforseen happens.
The development was speed up by a (most likely) failed attempt / pr-stunt of miners to block an unrelated change which will reduce their profitability considerably in July.
> Ethereum is a decentralized, open-source blockchain with smart contract functionality. Ether (ETH) is the native cryptocurrency of the platform. It is the second-largest cryptocurrency by market capitalization, after Bitcoin. Ethereum is the most actively used blockchain.
It's a blockchain whose token wasn't intended as a cryptocurrency but as a medium for paying for having a program ("smart contract") stored on it run on every node of the network. In practice this can be used for all sorts of things, including bootstrapping the vast majority of other cryptocurrencies currently in existence, but under the current system it can't process transactions effectively enough to be useful in that manner.
As I understand it Ethereum 2, which is a really long term thing they've been doing for years, is meant to gobble up the original Ethereum completely once all stages of deployment are completed (any prior forks that may happen would remain independent, I guess).
Update: it's been fixed
With PoS could you take over all coins by buying 51% of the existing coins? So if the market cap of ETH is 200BB spend 100BB to double your money?
Etherum classic and Bitcoin gold come to mind. They are both in the top 100 still, and both have been 51% attack multiple times.
Like suppose the banking system was running on ETH. Or if Colonial Pipelines used ETH.
1. They would drive the price up way past market price in an attempt to make such a large purchase. The cost of a large, rapid purchase is far, far from market price. Only a fraction of the market is willing to sell at current price.
2. If a country wanted to run on Ethereum, they could clone it, since they are giving up the benefits of a GLOBAL system when they take it over.
Lmk if you have any questions. Pretty interesting topic given the insane ETH valuation atm, in contrast to, say, Algorand. Network and first move effects, I guess.
In most double spent networks, people clamor for the coins so they can have the chance at double spending
In PoW networks that’s combined with renting/deploying hash power
In PoS networks its just taking over validators
Big ole party!
No one would buy those from you, so at best you can burn money to burn other people's money at a premium.
https://www.coindesk.com/crypto-51-attacks-etc
Furthermore it's become pretty clear from the many attacks on value tokens in Etherum & BSC DeFi that the attacker can move faster that the market and drain any liquidity pools/exchanges that have open offers into something that isn't going to collapse.
The theory early on was that the coin cratering b/c of an attack would be an extra deterrent, but the price of coins that have been successfully 51% attacked says otherwise.
Here's another cryptocurrency in the top 100 that has suffered many 51% attacks.
https://cointelegraph.com/news/bitcoin-gold-blockchain-hit-b...
Sometimes people argue that a nation state could "shut down" bitcoin for some amount of money -- say $10B. With that, they could buy enough mining equipment to publish empty blocks and throttle the ability to send transactions.
Part of my skepticism of this idea is that the bitcoin network is already so throttled but it does not seem to affect the value of the coin negatively. What would be hilarious would be if France decided to shut down Bitcoin, and succeeded, but the value of bitcoin then proceeded to increase 100x.
People who control stake can refuse to include (censor) transactions, as there is no market competition for transaction inclusion like in PoW. In PoW, if 51% of network power is censoring transactions, then censored transactions can attach a higher fee, which competing miners will use to buy more equipment and mine the censored transactions.
These are the ones I know about, that I learned in an evening of research.
It uses Verifiable Delay Function as an element of random number generation process. One can look into number of rounds of VDF and treat them just the way they treat proof of work today. It can be compared to determine which chain is the longer one.
My guess would be at some point people would realize a takeover was occurring and panic, but it seems like a 51% buyout would require an ungodly amount of money and time.
These kinds of off-network incentives can disrupt the reward system. It's even possible to incentivize a lot of people to collude in a double spend attack if the rewards can be distributed to the participants.
I don't think the network can figure out an "oops, AWS or Comcast went out; my nodes at home or in the cloud shouldn't get slashed" vs "lets sabotage an ISP or network for enough time to trigger penalties and repeat it".
With PoW, it's all just physics, energy, and math. With PoS it's rich peoples opinions and validation. An attack on PoS will likely be political... and politics tend to slip into war if there's not enough adults in the room.
You can't really double-spend that way, but you can get a disproportionate amount of the shard rewards. In order to defend against this, other participants will also have to mine for a "more fair" alternate reality, so you end up getting a standstill where nobody can get economic advantage as long as the total power being devoted to preventing chain-shopping is greater than the amount spent on chain-shopping.
In the end the energy expenditure would likely be unchanged from the status quo, it would just be hidden behind a facade of inexpensive proof-of-stake validations that conceal the actual work being done to ensure that this is not abused. This way everyone can feel warm and fuzzy because there's no actual way to measure how much work is being done to keep the validation from being monopolized.
Also, there's the inherent issue with Proof-of-Stake that Proof-of-Work doesn't have: the initial distribution of the coin has to be wide enough before it could feasibly self-maintain a PoS shift without being immediately vulnerable to consensus attacks. Ethereum is definitively mature enough by now, it wasn't a few years ago.
I don't understand how proof of stake works to the depth I understand proof of work. But this reassures me that it's feasable that they'll accomplish the same distributed consensus.
So then, could I say that Ethereum proof of stake will allow the owners of the coins (ether) to be independent from the owners of the mining operations?
or uhmm...
is the independence between the computaional costs of the "mining" and actual minted ether?
The whole idea is that Ether is so spread out now, it'd be unfeasible for someone to snatch up enough of it for an attack, in a similar way to how an ever-increasing difficulty makes it harder for a hostile actor to coordinate enough of it to make such attack.
Seriously, please answer if this is wrong!
It's not in the interest of Kraken or Coinbase to disrupt one of these PoS networks, but there is some barrier to entry for staking ETH2 or other PoS coins on your own, vs staking them on an exchange. In the case of ETH2, if your staking node goes down, you get slashed and lose some ETH. If there isn't slashing (not all PoS coins have that), I don't see what guarantee of network security or uptime there is.
I'd be curious what PoS coin experts think about this part. It seems like PoS / staking can lead to centralization. PoW has energy concerns for sure, but it has so far demonstrated decentralization pretty well.
I'm legitimately curious about this. I'd love for PoS to be feasible and am trying to understand it more.
[1] https://en.cryptonomist.ch/2021/04/20/ethereum-2-0-600-thous...
We've tried to mitigate it with constitutions in the political world and it helps to some extent but many would agree that there is still an exploitable hole in that those with power can use their own to gain more or mitigate risk. And any time you mitigate that feature/bug too much you run the risk of decreasing reward for work and stake, thereby delegitimizing the system itself or in the case we speak of, your currency. So pick your poison.
This is true, but those exchanges either charge fees or are going to charge them, making it more profitable to stake at home. Because offline penalties depend on correlation to how many other people are offline, it's actually safer to stake at home. Eth was accumulated primarily by devs that understood its value before everyone else. Devs are in general paid well. As a result, it's nothing special for those individuals to own thousands of eth - it was even possible to buy eth below $100 as recently as in 2020. Those 600k eth on Kraken aren't that much relatively.
Right now it's very early and many people aren't staking because there are much higher returns elsewhere, and before the merge withdrawals aren't possible, so you can't even go back if something better appears. I fully intend to stake at home once extreme yields elsewhere stop - in the long run staking is likely to have the highest yield on eth.
>PoW has energy concerns for sure, but it has so far demonstrated decentralization pretty well.
Mining is extremely centralized in China. Mining has infinite economies of scale + less efficient miners are pushed out, so the most efficient entity/location is certain to control all hashpower eventually (not necessarily China). https://www.nasdaq.com/articles/bitcoin-mining-hash-rate-dro...
> It's not in the interest of Kraken or Coinbase to disrupt one of these PoS networks, but there is some barrier to entry for staking ETH2 or other PoS coins on your own, vs staking them on an exchange. In the case of ETH2, if your staking node goes down, you get slashed and lose some ETH. If there isn't slashing (not all PoS coins have that), I don't see what guarantee of network security or uptime there is.
This is actually one place where ETH has tried to incentivize independent staking - the penalty for downtime is equal to the incentive for mining. In an extreme example, if you are down for 6 months of the year, and up for 6 months, the downtime costs should cancel out the earnings from the other 6 months. One caveat to this is that there are larger penalties for correlated downtime (ex: if a large portion of the network is down). This is to de-incentivize centralization of mining.
That said, as someone fairly technical that could run his own staking node, I am seriously considering using a centralized service, or at the very least using a vps. This makes me think that the the majority are going to be independently run on a slew of hosting providers and via centralized hosting providers.
There are also some interesting "decentralized" options like Rocketpool that haven't launched yet, but will allow staking via smart contracts against a pool of random nodes.
And then at the end of the day, the choice in staking providers should allow the network to at least react to centralization risks. Say a locality forces a provider to censor transactions in some way - I imagine folks will move their funds to a provider in another country, or switch to something like Rocketpool, effectively working around the issue.
What remains is to change the legacy clients to use the PoS network for choosing blocks, instead of miners. That has a working multi-client testnet.
* The design of the Beacon Chain is far more optimised than our initial designs for a PoS system
* There are far more crypto-economic edge cases in a PoS system when compared to PoW
* Software development is hard and time estimates are even harder
* The use of a hybrid fork choice to balance safety and liveness trade-offs
* There is a crazy amount of value being handles on Ethereum so it is necessary to be conservative with our changes (move fast and break things is not an option)
* There are 4 concurrent implementations being developed all of which need to be inter-compatible, and production ready
* As Ethereum governance is decentralised we need a shelling point for exactly what Ethereum PoS looks like, this takes time
* We have worked hard to create, encourage, and embrace standards with other chains so that the cryptocurrency community of tomorrow is more inter-compatible (eg. IETF BLS standard or libp2p networking)
* We have spent time designing around quantum-computing resistant backups for the majority of the cryptography (eg. validators all have a Lamport backup key though most don't realise it)
* New cryptography has been developed and previously abandoned schemes revitalised (eg. Verifiable Delay Functions or the Legendre PRF)
As far as I can tell, it was a trick to remove coin from circulation, locking it away where it could not be used again. The fact that people have tokenized these beacon coins on other chains to trade show that people want their money back!
Being able to leverage a committed sum of money via collateralization is as old as financial systems themselves.
If you can find any specific reasons for your take I'm very open to hearing about them?
In the legacy financial world, 2nd mortgages just lead to private inflation of the fiat money supply (the money is being conjured out of nothing to pay for an asset that was already paid for). Nothing is produced, except some energy is burned updating centralized databases.
Having systems where both realities exist is great. I'm a fan of hard money. It is honest.
Gonna need some citations here for this one.
There are a lot of people with perverse biases. Many of the comments enthusiastically defending Bitcoin are people who are sitting on BTC and have watched it get pummelled due to its ludicrous enormous-energy-for-something-that-does-nothing-for-humanity reality (seriously -- if I see one more chart comparing the entirety of the financial industry with Bitcoin. The former powers the entire world. The latter powers some speculators, criminals, and a minuscule number of legitimate transactions).
Really? If that energy consumption problem wasn't there, what advantages does Ethereum have over Bitcoin? Would it even exist, since it offers many of the same features?
That's why the past few years have seen a rise in fungible and non-fungible tokens (average merit of those aside for the sake of argument, since this is just answering the question "it offers many of the same features"), pretty much all of which are hosted on Ethereum or Ethereum code forks like Binance Smart Chain.
No shit, if you take away the defining feature of something, you will be left with very of value indeed.
That's like saying the web without HTTP is nothing for humanity.
https://capitalgram.com/posts/history-of-cryptocurrencies/
I think there's a decent chance they may eventually pivot a bit and rebrand Polkadot or Substrate as an Ethereum layer 2 platform. They already seem to be leaning in that direction a bit.
There was poor governance and management that debilitated their ability to function during the 3 year bear market. And they got their act together. In the mean time, more product market fit was made apparent and upgrades to the instruction set for arbitrary execution was done to the network and continues to this day.
The Ethereum network consists of many-to-many relationships for approval transactions for ERC20 tokens to interact with other smart contracts. This wasn't even foreseeable 18 months ago, and 18 months before that the ERC20 protocol wasn't even ratified.
And also "audit the auditors". So they don't end up on a future rekt.news leaderboard.
Ethereum had 6 years of PoW now - most likely nothing else can repeat its distribution, ever. The time of PoW is visibly over.
Another point is that ethereum was icoed when crypto was tiny, few people believed smart contracts could have value and VC stayed away. Normal people are much more likely to sell just to buy a house. Now new coins start with coins distributed to VC and they are prepared to hold for years hoping for eth-tier returns. There's an argument that not that many people even knew about the ico - but the same is true for bitcoin mining early. It's very hard to quantify precisely but I think both have almost identical coin concentration.
Be wary of manipulative statistics that ignore the inherent differences between the utxo vs account model - like percentage of coins held by top x%. The assumed practice in an account-based model is for one user to use one address, while the current practice for utxo coins is to use one address per received transaction. Same is true for value sent per timeframe - because utxo relies on change addresses the actual transferred value is much smaller.
Thanks for pointing this out! I never thought about this. To me the biggest long term threat to btc is the shift in block rewards from mined coins to transaction fees. I am assuming a possibly much smaller security budget available for “wasting energy”. But at that point it still might be enough as there is no network effect supporting new pow chains anymore, that could threaten btc security by having more sha hashpower.
*https://blogs.nvidia.com/blog/2021/05/18/lhr/
When Ethereum can no longer be mined, the returns on mining the remaining 'altcoins' will fall equal to the level of new mining power that enters.
Which might very well make GPU mining uneconomical across the board.
Can you expand on this?
But, the mining rewards for those other coins are typically static.
So you'll have a dramatically increased number of GPUs chasing the same number of coins - which is going to result in increased mining difficulty and reduced profits, potentially dramatically reduced.
https://arstechnica.com/tech-policy/2021/03/nvidia-accidenta...
https://standardcrypto.wordpress.com/2021/03/31/the-censorsh...
ETH is competing against USD, not against BTC.
Bitcoin is competing against gold.
Different races. different goals.
Different risks.
If true, this means that every argument comparing BTC to fiat is bullshit.
Given that most arguments I see in favor of BTC compare it to fiat, this doesn’t speak well to the understanding of those who hold it.
Given that BTC’s value is predicated purely on the beliefs of those who hold it, a systematic misunderstanding like this suggests problems in store.
Bitcoin will be fine.
But this is neither a fair nor an interesting competition.
Life span of fiat currencies is usually decades.
> To be clear, bitcoin is of course also competing against USD
These can’t both be true.
Eth competing against USD. Bitcoin competing against USD and Gold.
Bitcoin and Eth are also both competing against turkish lira, Tide pods, and zibwawean mortgage bonds.
But only one competes with gold.
You said:
> ETH is competing against USD, not against BTC. Bitcoin is competing against gold
You also said:
> bitcoin is of course also competing against USD
BTC and ETH can’t both be competing with USD without competing with each other.
If your statement that BTC is competing with USD is true, then your statement “ETH is competing against USD, not against BTC” is false.
ETH is competing against BTC.
Doesn't guarantee that my fingernail will win a shooting war.
If so, it seems like it’s just a circular reference to your personal belief in the strength of BTC over ETH, rather than a relevant argument.
https://help.coinbase.com/en/coinbase/trading-and-funding/ot...
Not all cryptocurrency have such insane transaction fees though. NANO is a good example of a fee-less cryptocurrency (cf. https://nano.org/)
It costs very little to transfer something of little value.
Ironically, that's because the value of value of Bitcoin has plummeted compared to Ehtereum. A month ago today, an Ethereum transaction would have cost $21 while a Bitcoin transaction would have cost $45.
Tx fee = gas * gas rate
1559 addresses fee stability and will help reduce fee spikes. It's purpose is not to reduce fees in general.
Bitcoin's attempted solution on this front is off-chain scaling via lightning network. As far as I can ascertain, this has had highly limited adoption.
Eth's attempted solution on this front is sharding. I can't claim to be an expert in this, but from my understanding after proof-of-stake is deployed, ethereum plans to deploy something like 64 separate "shards" which, from my understanding, are like extra blockchains for conducting transactions, and using some kind of complicated proof of stake system to keep it consistent. In this case, while the main-net still has limited global throughput, scaling up to add more side chains will allow scaling additional throughput. You can read more here https://ethereum.org/en/eth2/
As with lightning, we don't know how well this will actually end up going until it's deployed.
https://ethereum-magicians.org/t/a-rollup-centric-ethereum-r...
sharding + L2 rollups*
If you check the incoming transaction ID I'm sure you'll see it contained many many endpoint wallets.
That's how mining pools offer free withdrawals periodically. If you split it up amongst 100s of users, per user tx cost is very low.
BTC refuses to scale, Lightning is permanently broken.
Ethereum will reduce the fees with sharing, but that will take time.
Compared to other crypto, or on the scale of Visa and MasterCard?
In general, fees go up as the token price goes up since fees are usually charged as a function of transaction size or complexity, and also fees rise as a protocol hits its tx limits, but not always. Nano is an interesting cryptocurrency that is fee-less (although they just had to roll out an emergency update to improve spam resistance), so it's possible to design a fee-less system, but it's certainly even more experimental atm.
There are, however a number of cryptos that currently (and by intent) have <$0.01 (sometimes significantly less) fees. This includes (just going down by market cap): Ripple, Bitcoin Cash, Stellar, or Dash. For transactions, even though fees are a bit higher (about $0.06), I like Monero since it's one of the most private and widely used cryptocurrencies out there, and it's fees have actually significantly decreased due to technical improvements in transaction efficiency, dynamic blocksize, and an algorithm that can actually reduce fees as volume increases.
However, I cannot abide by a money speculation mechanism which uses as much electricity to mine worldwide as the Netherlands use in total. That's absolutely asinine to me.
So yes, it's currently not practical for microtransactions.
No. There are developers who actually prioritize on-chain scaling. For instance Bitcoin Cash and Monero have very cheap fees, and they will stay cheap for the foreseeable future.
As of writing, a Bitcoin transaction costs $4.76.
The last time I received a Bitcoin payment, it cost $0.36 in network fees. The network is currently more congested, so the fees are higher at the moment.
Which in the lights of the recent events sounds like: "pump us this time around!"
Makes you question: when would be a good time to address this, if they can't time travel to the day before Elon posted the tweet?
And I don't know the answer to that. Was this too soon? Well if they want to take the ride of Elon controversy, I don't think so. Is that a good thing? Who knows.
The market is wondering what will happen next. So ether published their progress. I just want to know how realistic are they with their schedule.
If I’m building a marketplace business in 2021, where I want to be “crypto-first” instead of relying on PayPal and Stripe Connect, where do I start?
The marketplace sells access to resources with an off-chain ACL system. It facilitates trades between resource sellers and buyers.
I assume I want a smart contract between buyer/seller to record resource grants on chain, which the access layer checks as a source of truth.
But if I were to do this on Ethereum, the gas fees would be really expensive. I’ve heard about Polygon and “optimistic roll-up.” Is this a viable solution?
If you're after dollars or euros, the on-ramp and off-ramp at exchanges adds a comparable, if not higher layer of fees than existing payment mechanisms, kind of defeating the whole purpose.
Unless you are building a dark web market, why would you want to? It will be more convenient for the vast majority of users to pay with card or PayPal.
Taxes are paid in fiat. Holding non-stablecoins would add even more of a tax headache because you'd have to track capital gain/loss as you enter/exit fiat for taxes / fees / vendors that don't accept crypto
Also the fact that general adoption has been slow so far may be a sign that there is not enough obvious value added for the average person to consider using crypto over fiat.
Using an L2 system will mean that your user will need to be using that specific L2 system as well, but the UX doesn't seem so bad (at least for ETH -> polygon, and for the cryptocurrecny space so far).
ETH 2.0 will reduce gas fees somewhat on the mainchain, but it's fairly obvious that there's huge demand, the sharding that ETH 2.0 will do is create 1 shard for execution & 63 for data only. Most L2 systems will mostly use the data shards, so we appear to be heading towards an L2 future.
In short if I were building a company in the space I'd be looking at deploying both on the mainchain (L1) and on a L2 system, but prioritize the L2 system. Unfortunately we may end up in a world where there are dozens or more L2 systems and either the users or the companies have to pay the cost to hop between them.
But I've absolutely never seen it in the wild.
(Tesla has recanted 'for now').
> In a 2013 video, a man appears to be paying for his meal at Subway using Bitcoin in Allentown, Pennsylvania.
And, many are only at select locations, "will be", "unveils plans", and "testing".
Contacting general or merchant support often took over 2 weeks to get a response, which was a deal-breaker for any service that would inevitably impact customers on our end.
It is just as secure as the base chain (unlike polygon) and has low fees and has been live for the past few months. This is a perfect solution to simple payments.
The difference between optimistic rollups and zero knowledge rollups is that you can’t deploy arbitrary smart contracts to zk rollup, it only supports a limited set of use cases, such as simple payments for now. Read more here https://vitalik.ca/general/2021/01/05/rollup.html
If you as a reader are interested in math & crypto the stuff being done in the zero knowledge space w.r.t. cryptocurrencies is really cool regardless of your opinion on cryptocurrencies in general.
IIRC they'll eventually create their own native token when their EVM compatible rollup is out.
Two primary concerns, technical feasibility and political strife:
I have my extreme doubts that you can move a chain like this without causing it to collapse. As yet all we have seen out of the eth camp is more broken proof of concepts -- not a viable model for a potentially trillion dollar economy. How to you replace a jet engine mid flight? (You don't. Unless you like not safely landing).
PoS coin is worthless coin. If you want to have your expensive-to-mine gas coin be worth something, you have to make it hard to acquire. My second concern is that if they do manage to 'migrate', enough folks will ignore this and keep mining. This is a problem today with more contentious PoW hard forks.
Ultimately this behavior will lead to more chain forks, which unlike in the ETC days actually is a big deal today. Whos USDT USDC etc is the real coin? The eth1 PoW 'legacy' network, or the eth2 'pos' chain, or what about the eth1-a/eth1-b fork when the first political staking challenges come up (see all world religion schisms). PoW solves this problem. One truth, enforced by universal energy usage. Not power players arguing over interpretations of religious text.
Irrelevant. Well designed networks are pretty much isolated from whims of miners. Ethereum is one of them, Bitcoin is not. I'm speaking about 2 weeks difficulty re-targeting window vs single block window.
> It replaces it with shell games and chicanery.
Why do you perceive it like that? I would love to hear details.
Ethereum will use hybrid PoS. Where random number generation (deciding who will become next block producer) is separated from deciding who is in the pool of potential producers (anty-sybil defense). First will be decided with commit-reveal scheme unbiased with the use of VDFs, second - with PoS.
Re: shell game. Are you implying that fraud or misdirection is involved? Some bitcoin scientist should be able to point where it is hidden. Or is it just a claim without evidence?
The part you're missing is the price. It's my secret, but I'll share it here. You can buy a Dell R12 with one of those cards and, upon receiving it, sell the components for more than the purchase price.
Don't get me wrong, it's great that they are working on becoming more effective but the idea that we should judge new technology purely on it's environmental impact as we see these days is counterproductive to progress. Progress from 0 to 1 will always be less effective than the optimization that follows.
We should be much more focused on how to make sure that any technologies energy usage doesn't become an issue by creating clean technologies with high energy density, which are reliable, plentiful and scaleable and doesn't require backup sources.
Or to rephrase the question: where can I find the "POS for dummies" page?
Whatever, I'm out.
But it inherently makes the system unfair, I have 0 pressure to sell that eth since it didn't really take me any effort to make it and I don't need it to cover life expenses, whereas for someone who has much less money, well that return on their eth (say from pools), they'll probably need to sell it to cover some other costs (rents for example). So for the wealthy, their shares grows while everyone has pressure to sell. There's also a cycle where if you're a staker and few other people sell, price will skyrocket, make it even more unaccessible.
I really hope that we avoid these scenarios in real world, but I'm a bit skeptical.
This may be a radical take, but I think nations should introduce some unprecedented legislation: ban trade of proof-of-work cryptocurrencies.
Don't ban their trade because they make poor financial products, either because of rampant fraud or criminal activity. That's a different argument and requires different approaches. Ban their trade because global society shouldn't accept rampant incentives to literally burn up energy [1] to make financial products. Especially because proof-of-work simply just isn't necessary to have cryptocurrency.
Banning their trade won't categorically stop PoW cryptocurrencies. What it should do is completely tank their value and get the world to move on to less destructive coins.
I don't think there's any precedent for banning classes of financial products for environmental reasons, but it's time to create one.
[1]: In addition to environmental reasons, there's probably also economic ones. Mining burns through other scarce resources such as chip production capacity, although the true impact there is unclear.
I don't know and personally hold only a little bit, nothing I would be very pained to lose, but it would certainly cause a lot of economic harm to a lot of people to do what you propose. The idea cannot be taken seriously without first answering my question.
Bitcoin uses ~118 TWh - https://digiconomist.net/bitcoin-energy-consumption
Youtube souce is from 2019, Bitcoin one is current.
Other sources put Google’s total energy usage (including youtube) at around 12 TWh [1]. Total datacenter usage is estimated to be around 205 TWh [2].
[1] https://www.statista.com/statistics/788540/energy-consumptio...
[2] https://energyinnovation.org/2020/03/17/how-much-energy-do-d...
Bitcoin provides... idk a way for some people to make a lot of money and some others to lose it?...
Even if we say that BTC provides some value by transferring money etc. the amount of value per Watt is so slanted its ridiculous to even make that argument.
I could see a lot of people make the argument the production of a lot of energy intensive goods is not worth-while.
Which is to say, discussing on HN is a valid way to contribute your opinion to society. Voting is not your only voice.
if enough people agree that a law should be passed, and it's a high enough priority, and the opinion stays that way for a long time, then eventually enough politicians get on board by virtue of pressure from their voting base, and a law gets passed.
It's not great.
But on the other hand, near-immediate direct democracy is also not great, because it leads to knee-jerk reactions causing laws put in place. I'm thinking of stuff like the USAPATRIOT Act, except worse.
There will come a time when people like you -- who play God over others -- are ousted from society.
There are already laws in most countries forbidding you to litter, and you would never call that "playing God" - it just happens that littering with crypto mining is a multi billion dollar industry.
It's just not a realistic outlook on how typical people want society to function. Most people do not believe PoW cryptocurrency is important to society.
It's literally regulation to stop "Proof of work". Which is a generic algorithm that can be applied to other circumstances.
It could have applications in CAPTCHA's, or anti-spam.
It could be a critical component of other decentralized technologies, not just blockchain crypto currencies.
Making this math illegal JUST to kill cyptocurrencies seems a tad much, right?
Governments already have regulations for energy efficiency, waste and pollution, and for most things it's possible to negotiate reasonable limits.
For PoW it's not possible. If you put an upper limit on its wastefulness, it'll be a limit on its security. Even if we had a Dyson Sphere, PoW would eventually eat more than half of it just to be secure.
Maybe in theory but in actuality it is comprised of moneyed interests which is why it needs to be limited to preserve the freedom of the people.
I disagree. If we must cap the CO2 we can emit, we should definitely favor basic needs over luxury. Here in France, the government tried to set a carbon tax on gas (which is required for many simply to commute to work, with no affordable alternatives yet) but they refused to impose a tax on jet fuel which is known to be used by the ultra rich to fly their privates on the weekends (while they can afford high speed trains).
We should not just let money decide what's possible, when so many are still in need of basic necessities. Many could pay a 300% tax just to fly 10x a year across the globe (emitting many, many times the carbon footprint of an average household). How would that be fair, when the problem is not what people pay but how the planet is becoming inhabitable?
I do not believe consensus mechanism other than PoW can provide enough security for a cryptocurrency
What's interesting, is that you can gather ~300 random citizens - including jet setters and cryptofans - and let them think about it for two years in order to decide what they considered as basic needs, on a consensus basis. And then, we can organize a vote (e.g a referendum) to make sure society finds a common ground on this (just like we do for most things, such as banning crime).
See https://en.wikipedia.org/wiki/Citizens_Convention_for_Climat... for a good example.
I bet PoW would be far down the list of basic needs but it might, still. I like democracy (where people vote, not their fortune).
If carbon taxes go up, some things will no longer be worth spending energy on, but crypto mining is just competitive, so the value of mining will go up with the cost of energy and keep using as much energy as ever. The only thing that can stop it is reducing demand for the coins, which the government is not even trying to do yet.
That is not true. If the cost of energy increases, mining / hash rates will decrease. Miners are competing, and the limit to the price they will pay for electricity is the value of the cryptocurrency they are earning for the activity.
I am all for carbon taxes, to shape the market towards cleaner energy. And I do think it will successfully push miners even faster towards adoption of other energy sources.
Humanity will continue to require energy as it advances and banning anything "because it uses too much energy" is a ridiculous advice. How about we ban gold mining, or set quotas on the number of children people may have, that will surely contribute to our CO2 reduction goals. It's also Orwellian and reminiscent of how the world looked like for citizens of the USSR back in 1960-1990
it’s all fun and games until I ban something you rely on for your livelihood
And to do so for speculative fun is ridiculous.
Also, how do you decide which computing is good and which computing is bad?
Kill the value of POW as a store of money and see how much of that computing still happens. Then you’ll know how useful it is.
now, the question is: who decides what’s acceptable and what’s not acceptable for energy use?
That you only use it to watch videos that bring zero gain to your life is a You problem.
"the internet uses 10% of the total electricity consumption worldwide. How much of that is consumed by Youtube? After Netflix and embedded videos, Youtube is the third biggest global internet bandwidth eater. About 11.4% of global internet traffic is consumed by Youtube"
That figure assumes that the electricity usage of the internet is exactly related to the amount of bandwidth - so if YouTube uses 11.4% of the internet's total bandwidth, that means that YouTube uses 11.4% of the internet's total electricity consumption.
That is a highly dubious assumption.
VS
An estimate of Bitcoin power consumption by the Cambridge Centre for Alternative Finance.
I know which one I’m more prepared to believe.
Even if this were true. I go on YouTube and can learn things: recipes, FreeCad tutorials, coffee nerdery, harmonica lessons.
Bitcoin literally does nothing.
The virtue of energy use argument is just dumb.
As far as I can tell PoW is the most proven consensus mechanism so far. PoS may be promising though. ETH2 successfully switching will be telling.
Electricity is a commodity and a utility. Who are you or I to subjectively decide that a use is valuable or virtuous?
Is YouPorn worthy? Is MLB.tv valuable? What are the criteria that you use to determine worth?
Yes because people like porn and baseball.
Bitcoin is like gold. It’s valuable because other people say it’s valuable. But nothing useful happens when you mine crypto. Was I entertained? Did I learn something? Are they producing a widget? Even gold can be made into jewellery or used in electronics. Crypto literally just uses power.
Except make those little pieces of green paper in your wallet look foolish.
https://sustainability.google/commitments/
By enabling ransom ware attacks? Creating GPU shortages?
By optimizing around energy conservation at all costs, we have homes that cost 3x, held together with glue, susceptible to mold, and filled with toxic crap like vinyl.
You're advocating for violence against people who do things you don't like. Use your wallet and leave other people alone.
Oh give over, this is ridiculous too.
When other people are causing harm that affects everyone it's perfectly reasonable to look at legislation to kerb the behaviours.
And no, that's not violence. No.
i find views that want to ban anything for energy consumption ridiculous. also what the people advocating for this kind of thing are missing is that it’s all fun and games until something you rely gets banned because of reasons.
here are my proposals:
the entire banking system is obviously using a lot of power. how about we ban banks and go back to using paper money. that’s def more environmental friendly. /s
electric cars run on energy that’s generated with coal. that’s not cool. let’s ban electric cars and keep driving gas cars. they have been around for a long time and the technology is so good that we actually pollute less with a gas car /s
the internet in general and datacenters in particular are using a lot of power. let’s ban datacenters. guaranteed between environment afterwards /s
Also "until something you rely gets banned", what do you rely on bitcoin for besides being a store of value?
my point is that you don’t get to decide what i consume. and banning bitcoin == banning any type of computing that you don’t like. do you understand how much power a modern datacenter sucks? do you also understand that some things that run in a datacenter are straight up dangerous to the fabric of our society?
I am not making any decisions about your consumption. Our democratically elected government is responsible for making the best choices that balance our societal needs. Our government already regulates a lot of things around computing: Child porn/CSAM, export controls around cryptography, data privacy, the computer fraud and abuse act. This isn't novel stuff, having a computer doesn't mean you can do literally anything on it with zero consequences.
democracy? data privacy? thanks for the good laugh
Where do you see the problem in using less energy for a crypto currency? Why not make a cryptocurrency that uses even more energy?
Why not?
>or set quotas on the number of children people may have
Some people consume 10x less energy than others, so blindly capping the number of children does not seem a good idea. What about capping the carbon footprint per person instead?
We track and tax revenues (not perfectly but as well as we can). We could definitely track and cap carbon emissions. Sounds good to me!
Not right now it's not. Not when we have constraints on how much CO2 we can pump into our atmosphere.
Right now, and I mean right now, when we're having huge problems de-carbonising the planet's energy supplies and are risking making life very uncomfortable for ourselves for decades or centuries to come, limiting energy use is actually one of the few levers we have to try to make a difference.
In this current situation, bringing online a whole new mid-sized country's worth of energy consumption for a financial instrument is ridiculous, and a huge own-goal for humanity.
Proof of work is the only thing of value, the only distributed consensus model that is secure and the only way forward for store of value cryptocurrencies.
Unless you are suggesting taxing crypto itself, in which case… sure!
In other words, the amount it takes in can be given back to the average person -- in forms of tax rebates, investment in public transit, education, whatever. In an ideal world a carbon tax would have no adverse impact on lower and middle class people.
I should also add that in that world higher electricity cost due to carbon tax is a good thing -- it'll help carbon-neutral sources of energy to compete and replace the more dirty forms. Which is exactly what we want.
[1] - https://citizensclimatelobby.org/carbon-pricing-studies/
But perhaps more importantly, you wouldn't be taxed because others are using electricity for virtual money. You would be taxed because your carbon emissions are causing climate change, and to encourage you to reduce energy usage where possible.
All money has a cost on society. You have to do something to maintain its value. You don't think wars in the middle east -- to maintain the petrodollar -- have an environmental impact?
And when it isn't oil it'll be fights over germanium and lithium veins.
If you actually cared to do more than sit in a chair -- advocating random things you didn't research -- you'd be advocating for Thorium power. Thorium is nearly as abundant as lead -- it's all over the place -- and it's much more clean and less dangerous than even solar or wind.
Also, you can make the tax progressive so that the high consumers can pay much more.
What if we want to decide that we want to minimise carbon, but some use of energy is preferable (for instance consumer/home use) to bootstrapping new financial products?
and that's where the price signals what is preferable. The correct allocation of energy should be based on the price people are willing to pay for the energy. Like any other commodity.
Why? Why is that 'correct'? Why would we not want to ensure the population has affordable energy for home use, but others seeking to make a profit from it rather than use it for basic needs pay more?
You phrase your reply as some sort of moral absolute, but it's nothing of the sort.
Because we already have the former and we don't need the latter.
A carbon tax with a dividend doesn't make life harder for lower income people, because they already have below-average energy consumption (wealthier people have bigger houses that need more heat etc.) and as a result the dividend would be larger than what they pay in tax.
But you still want them to have good incentives. If they can use the dividend to switch to solar or buy an electric car, you want them to do this, because that's the whole point.
Meanwhile there is no reason to charge profit-seeking enterprises more than the true cost of their usage, because all that's doing is inhibiting economically productive activity. Aluminum smelting uses a tremendous amount of electricity, but what you want is to cause them to switch to non-carbon electrical generation, not to shut down operations.
Is not what was being proposed in the free-market fundamentalist post I was replying to.
> Meanwhile there is no reason to charge profit-seeking enterprises more than the true cost of their usage
But there might be if it's merely "burning energy for a new financial product", society might decide that it's not worth the carbon to have that around, regardless of tax, but that aluminium is a useful physical product.
We have differential taxes on all sorts of things, I don't see why they would be so wrong here.
But even given all that, my comment you're replying to was specifically adressing the "price should be the only indicator" assertions in the libertarian spiel above.
A carbon tax with a dividend is the free-market fundamentalist proposal. Markets require externalities to be priced and a dividend is the most economically efficient use of the revenue so generated.
> But there might be if it's merely "burning energy for a new financial product", society might decide that it's not worth the carbon to have that around, regardless of tax, but that aluminium is a useful physical product.
The way of determining which is pricing. If society values "new financial product" more than the cost of the energy, including the carbon tax, then it gets produced. If the carbon tax increases energy costs to the point that "new financial product" isn't viable in the market, it doesn't. Or it switches to non-carbon electrical generation at which point you can't blame them for climate change anymore and they're expediting the transition to renewable energy by financing the creation of generating capacity and increasing economies of scale.
It's specifically not the one I was replying to -
"The correct allocation of energy should be based on the price people are willing to pay for the energy. Like any other commodity."
> The way of determining which is pricing.
It's not the only way, it's not even the only way that's employed right now in a lot of places, for instance we don't apply sales tax to items we deem 'essential' here in the UK, have a 5% rate for some things and 20% for 'luxuries'.
Price is not the only mechanism available, nor is it always the best one.
This is in no way inconsistent with the need to price externalities, which is the default assumption in free market theories. (Otherwise you have obvious problems with people dumping industrial waste into rivers etc.)
> It's not the only way, it's not even the only way that's employed right now in a lot of places, for instance we don't apply sales tax to items we deem 'essential' here in the UK, have a 5% rate for some things and 20% for 'luxuries'.
Just because somebody does something doesn't make it a good idea.
Things like that have counterintuitive economic consequences. See what subsidized student loans do to education prices. Is this what we want for "essential" goods?
If we do that, the tax rate has to be higher for non-"essential" goods in order to generate a given amount of revenue. Now you're into central planning to determine what's "essential" and what isn't. Is a laptop a luxury good? A poor person might need one. What about an electric car? Meanwhile every such decision of what to tax more is subject to lobbying and corruption.
If you want to help the poor, give them money. They know what's "essential" to them better than the bureaucracy does.
There's nothing in free markets that will make this happen without regulation, as evidenced by the fact that it so far hasn't happened.
> Just because somebody does something doesn't make it a good idea.
No, but it also doesn't make it impossible or something which can just be dismissed. There blatantly are mechanisms that can be used other than the ones you mentioned. You don't like them, that's not the same as them not existing.
However ridiculous you want to make the results - oh my god now you're into planning! - this already happens in quite a number of pretty successful countries, so it's clearly not some bizarre fantasy.
According to hardcore libertarian free market theory, polluting someone else's property without their permission is a violation of their property rights. In principle this would make it impractical to burn anything at all, because the combustion products go out into the air and spread to someone else's property without their permission. You would need the permission of everybody everywhere, for which they would want to extract payment.
Obviously that isn't how it's implemented in the US, but that's what the theory says should happen.
A carbon tax + dividend is a pragmatic alternative. The criticism of it is actually that it gives the polluters too much -- maybe someone thinks the tax isn't high enough and wants to demand more of the carbon emitters. By implementing the tax you're taking away their right to refuse to have their air polluted and hold out for higher payment from the carbon emitters.
> You don't like them, that's not the same as them not existing.
Nobody was claiming that implementations of bad ideas don't exist.
Actually it sounded a lot like you were saying that the only way to do this was pricing.
Either way, you'd have to go a long way to convince me that the free market ideology principles are always better than what we can see working in a number of wealthy, successful countries already.
A carbon tax and dividend is certainly one way that such things could be achieved, though it's not the only way and it is a blunt instrument. It's not the only way or necessarily the best, and it doesn't allow a society to make choices with much granularity.
Your argument is basically that it is wrong to do so - I think that's a pseudo-religious belief.
i argue that pricing carbon is the only way to allow everyone in society to make their own choice with the granularity that you propose.
After all, when has central planning ever taken everyone into account properly? How will i know that policy makers will take my interests into account when they plan policies?
And in this specific case, what about the people who _do_ want to mine crypto? Why do they get the bad end of the stick, just because some authority says so?
That's the point - it's perfectly fine for a society to decide what energy can and can't be used for, because we don't live in a time when we have infinite, environmentally neutral power available to us.
An obvious example is the existence of pseudonymous digital payments. Given that cryptocurrency already exists, and will continue to exist for all illicit activities even if you ban it, you might as well let people open numbered accounts at a bank.
Do this for any other advantage cryptocurrency has over the existing banking system and there is no more demand for cryptocurrency. And without demand, the price crashes and people stop burning coal to mine it.
A re-distributive carbon tax incentivizes efficiency, doesn't hit stuff like renewables and allows individuals to keep on choosing what they want to do with their life.
Just because you don't find facebook valuable doesn't mean that others feel the same way.
With PoW the state can influence the existing miners, but cannot prevent new independent miners to pop up and counter act.
Bitcoin (the network with the most mining effort) lost 25% of their hashing power due to blackouts in Xinjiang. (Soure: https://twitter.com/nic__carter/status/1384938089748041730?s...) State capture of a majority of Bitcoin miners is comparatively easy.
In addition, independent miners have less hardware and that hardware is generally less efficient when compared to the large ASIC farms. In reality a recovery would probably require social consensus and a hard fork
And other methods introduce the possibility of stake grinding.
BOTH converge to the same energy usage as mining.
OTOH, the legacy financial system is significantly more energy intensive for a given financial network value. You don't think banks and wars in the middle east to maintain the value of the network have an environmental impact?
Many of you in this thread need to read up on how the staking is designed to work.
With PoW you can corrupt many miners, but the other superpowers can spawn new miners to counter act.
Slashing stake is significantly more arbitrary. You basically need to reset the coin's ledger in order for it to make any sense.
It's only possible once, and this move is so obviously predictable any determined attacker is going to have gpus ready.
That isn't relevant to the conversation of stakers having misaligned incentives to change the rules. The most a state level actor can do is censor transactions if they were to take over a chain.
With PoS you'd need to slash the validators stake on a fork; which isn't going to happen because the stakers run the validators everyone is using. You already saw this with the steemit takeover.
In PoW coins, the miners and validating economic nodes are two separate groups. Watch what happens when exchanges slip over to Eth2 nodes and call it Eth.
During the BCHA/BCH split the exchanges were the ones that decided the ticker. Most users have ZERO CLUE about what happened. They went on their with their lives calling the fork the exchanges chose BCH. Once exchanges are validators there is no bulwark against changes.
Which is the exact thing state level actors want to do !
What is the use of crypto if the state can ban me or my country from it ? Isn’t that exactly what decentralisation was supposed to prevent ?
Sorry but I don't see your point here. A fork inherently requires action, it's enough to force a node to follow a different block from some height. At that point the attacker would get penalized for being offline. Outright deletion would require code modification. It's even possible to automate a minority fork in the case of censorship, although this capability doesn't exist yet.
>You already saw this with the steemit takeover.
Steem isn't even PoS, it's dPoS. Even in this case users successfully created a fork called Hive and removed Justin Sun's coins.
PoS is resistant to state attacks because it would require buying up tokens on an impossible scale, and in the case an attack somehow succeeds a fork can be created that deletes the hostile stake. This can be repeated indefinitely. That's impossible in PoW more than once, once a gpu PoW gets attacked it's over.
PoS has no economies of scale, so contrary to PoW it can stay decentralized forever. There's no way to make existing stakers unprofitable by adding more nodes, like it's possible with mining hardware in PoW.
PoW is also vulnerable to takeover of existing miners because mining at scale requires big industrial warehouses with industrial power owned by registered companies. Impossible to hide. PoS can run on anonymous home nodes.
In every single security and decentralization aspect PoW is hopelessly inferior to PoS.
You don't need to buy the tokens. You make laws which the stakers have to follow, otherwise you seize their tokens for breaking the law. You can also use electronic warfare to steal the tokens of stakers outside your juridiction. If you are doing this as a big country such as USA/China, then other stakers might be tempted not to fork because a compromised system that works with those countries might still be more valuable than an uncompromised system that has not access to a large part of the world economy.
>otherwise you seize their tokens for breaking the law.
that's not possible, there's no mechanism to seize eth. What can be trivially seized, though, are physical miners.
Additionally except for eth all have the fundamental problem of extremely centralized distribution. This [1] extreme centralization is representative of new VC coins. That tiny sliver of 'Coinlist (unlocked auction) 4.3%' is the only part that was available to non-insiders.
[1] https://icodrops.com/wp-content/uploads/2018/04/Solano-token...
I'm also wondering about the resiliency of PoS. The PoW used in Bitcoin has demonstrated resiliency against attacks, and none of the attacks have been successful so far, that I know of.
Multiple PoW coins have been successfully attacked, like ETC. Because they are already on GPUs there's no fix - just hope it doesn't repeat. Those successful attacks prove that any attack on PoW is only a question of external resources (sha256 ASICs for btc).
It's also surprisingly hard to profit from a 51% attack on pure speculation coins like btc or etc because next to zero actual economic activity is happening on them, which is why such attacks were rare and small in scope. The best you can actually do is to try to double spend an exchange. If they were actually used for real commerce profit becomes much easier. It could also become a military goal - if Iran relied on a PoW-coin for its economy, blocking their coins would destroy their economy.
This is one of the reasons why ethereum absolutely must switch to PoS - PoW is extremely insecure for smart contracts because there are many more ways to profit from an attack, like censoring price updates for defi.
Seems like you know a lot about PoS, would you be willing to check out my other comments on this post (https://news.ycombinator.com/threads?id=swensel)? I've covered some concerns / questions that I have about PoS that maybe you can answer in more detail.
It's not just miners, it's also full nodes that validate.
Full nodes can disagree with miners: instant fork.
If say Putin would acquire 51% of mining hash rate people would realize (before he gets there) and would fork.
My comment is not in support or against PoW, I'm just stating the fact that PoW isn't inherently unsafer than PoS.
After that, if the fork becomes popular, the attacker moves and attacks it again. Are people supposed to fork once per week? At that point it's not PoW consensus anymore, because the interventions move from emergency to normal, and you're under something else.
Proof of Stake as setup gives all the power to people/companies who have large amounts of liquid assets.
Consider Amazon, they keep a rolling window of cash in-between when an item is sold and when the seller gets paid. This effectively gives them billions in interest-free capital. If this were Etherium, it would translate into huge amounts of voting power.
Likewise, if/when people deposit their etherium into banks, those banks can then leverage that "free" capital to grab huge voting stakes that wouldn't otherwise exist (because no person living paycheck to paycheck has the equivalent of 100k sitting around).
This leverage simply does not exist with proof of work.
All that wasted energy is paid for by the holders, and proof-of-stake is just more financially attractive.
No government intervention is required IMO.
Could you explain me what energy is "wasted" in Proof-of-Work and also how the people currently holding the cryptocurrency is paying for that "waste"?
AFAIK, the same number of blocks are made no matter how many transactions are being made or how many holders there are (or how much each holder "holds"), so the energy consumption of Bitcoin remains more or less the same during an hour, only slowly rising as more miners get on-boarded. But the energy consumption of those brought online remains the same over the lifetime of the miner instance itself.
If that's not the case, how do you propose to enforce that all use cases use less electricity, and how do you punish those who use too much?
The tax avoidance schemes in Europe are well documented for all tech companies.
And what do you mean by employment taxes? Just the employers part of the income tax?
So 21% + 15% to 20% capex on individuals = a tax rate around the same.
Now, if you really want to look at the big picture, look at a company's tax rate of 21% on profits, but they also pay taxes on employees of ~21% of salary in the USA not to mention health care (which in europe would be included as taxes so maybe in Europe 46% to 50%). So if payroll is 40% of your costs that is another 8.4% of taxes added in there. And, you can probably add health care as a tax as well.
Legal tax avoidance is legal. I hate when people bitch about companies doing legal maneuvers. It is very easy to stop that, apply a tax on gross receipts for all income created in the country.
Washington State does that for example if you have a company operating in their state.
And Bitcoin is hardly used for any transactions, and its energy usage will increase linearly with BTC price.
(If someone has a direct source that would be great. Statista is not good)
Update: seems the FB figure is correct, for 2019: https://sustainability.fb.com/report-pages/renewable-energy/
Therefore, if the price of Bitcoin doubles, miners can afford to burn twice as much electricity. (Roughly. This is a simplification of course.)
Proof of stake is a newer way of coming to consensus on one correct chain. It took people a while to figure out how to do it securely and efficiently.
However, in Facebook's defense it's per-user per-transaction energy costs are going to be much lower than Bitcoin.
Did Ye Olde BBS support 1:millions broadcasting, and real-time viewing of high-definition video? Uploading and viewing thousands of high-quality photos?
Calling Facebook 'basically a giant BBS' is a lot like saying 'Oh, I could build Twitter in a weekend'.
Especially when talking about CO2 emissions absolutely everything is included, including plane trips and whatnot.
That comparison ignores the actual value add of Facebook and the fact that people are using it. Most BTC trades happen off blockchain and are powered by the servers of the market places and nobody really knows how much energy they use.
Don't address of any the things that you are proposing need addressing, because they don't need to be addressed in the same law, or really addressed right now at all.
The law doesn't need to try and anticipate the actions that occur in the future, we will still have a legislature in the future capable of addressing the future when it comes about. The law needs to address the actions of today.
Instead, they explained why these questions are (partially) misguided.
That's also an answer.
Because that is what always happens. Every time someone make s a general proposal, for any law at all, there are people making the same old, dumb argument, of "well who decides?!?" Every single time.
Sure you do not believe that all laws ever are wrong, right?
Because the answer to this dumb question is the same as for every law ever. That makes it valid, unless you believe that all laws ever are bad.
There are absolutely many laws, that are very targeted and specific. Were you unaware of this?
For a random example, there are laws that probably say something like "A truck, of this size, must follow these specific environmental regulations".
That would be a specific law, that applies to a truck, and required it to do a specific thing, like have a certain mileage efficiency, and it is not general. It is pretty specific, and it is not a general law that applies to all environmental related things.
The world is full of many specific laws, all over the place.
The question was about how to choose who is using too much and how, and the response was basically "don't think about it, we will exist in the future and can think about it then." But we exist now. And even if we were to wait, it's still a question we can answer now to have enacted later. The response provided was a bypass, a non-answer.
That's an incredibly dangerous idea.
It's good that Ethereum is moving to proof of stake. Not because of some environmental impact though. Mining is just really expensive, it results in huge fees making the coin almost unusable for normal people.
Today you probably consume more energy in a few days than your ancestors whole lives.
Now, we've created distributed, immutable property, something that has never existed before. It turns electricity into value storage. What is the "correct" amount of energy for humans to spend on such a thing?
Perhaps the "correct" amount is less than what it would take to increase planet temperature by 4°C?
You're equating energy usage to carbon emissions, but you should be able to distinguish the difference.
As long as we're using fossil fuels, planet temperature does in fact have something to do with energy consumption. You seem to be arguing that because renewable energy sources exists, Bitcoin has nothing to do with fossil fuel emissions. However, that is false, as 8% of Bitcoin mining happens in Inner Mongolia, which is home to many of China's large coal mines[0].
[0]: https://www.independent.co.uk/life-style/gadgets-and-tech/bi...
So when you call for a ban of Bitcoin in the name in environmental concerns, you've decided to be the arbiter of energy usage, on what is productive and valuable, and what is not.
You're welcome to argue your points, but it would still be far more efficient and productive to addresses the actual core problem: coal fire plants, and energy prices.
[0]: https://www.iisd.org/gsi/faqs/china
[1]: https://www.carbontax.org/issues/what-about-china/
Even better, how much energy is wasted per page view due to inefficient frontend web frameworks?
Seems to me that code is speech, and restricting what one can and can't do with silicon that one owns is absolutely ridiculous.
> a bunch of aircraft carriers and planes and bombs and people with big guns, which gives the ability to say (credibly) that it is a crime to forge dollars no matter who you are or where you live
Cryptocurrency offers all this and more for a fraction of the price.
> Current estimates put bitcoin’s energy requirements at around 130 terawatt-hours (TWh) annually, which would rank it in the top 30 electricity consumers worldwide if it were a country.
Source: https://www.independent.co.uk/life-style/gadgets-and-tech/bi...
This concern over the environmental impact of cryptocurrencies is utterly laughable when you figure out the real source of these problems. I guess they're just too powerful to be messed with.
Well, some environmental activists try by turning off oil valves[0], just like environmental activists are upset with Bitcoin.
> You have big entrenched organizations such as the oil industry doing far more damage.
People who criticize Bitcoin for its environmental impact don't give a pass to oil companies. The issues overlap, like in Texas where they plug Bitcoin mining rigs straight into the oil well[1].
But I hear you. All big entrenched organizations must be held accountable. Of course.
[0]: https://abcnews.go.com/International/wireStory/companies-dec...
[1]: https://www.independent.co.uk/climate-change/news/bitcoin-mi...
People who want to see real change need to deal with fossil fuels. Taxing mining operations will do absolutely nothing to solve the actual problems of this world.
there's every incentive for it to keep growing forever, which is what makes it dangerous
vs. there's only so much ice cream people can eat
Subsidized coal mining and untaxed carbon emissions are dangerous ideas.
Why not focus on the source of the electricity rather than what the electricity is used for?
> proof-of-waste
It's Proof of Work. Productive work has value and in this case, it's widely distributed censorship-resistant validation of transactions.
This makes investments in renewable energy infrastructure more profitable and paid off sooner. A solar farm has more demand and higher margin for its products.
On the other hand, it means cheap coal energy is also financially productive.
What is anti-economical is the unfair price competition due to externalities not captured by coal energy's pricing.
once again, you have merely just assumed the role of arbitor. What makes this opinion better than the opposition?
What needs to be addressed isn't energy usage, but the cost of energy in the first place. Why isn't the fix be passing a law to tax carbon properly? Tax the externalities, and the rest would follow. I don't care if people burn up energy for crypto, as long as they pay for the cost properly.
This is literally the role of legislators. What makes "my" opinion better, is in the event that this sort of legislation passed, the majority of the elective representatives in both houses agree we should ban proof of work crytpo currencies, nothing less, nothing more.
> [alternative proposal]
I mean, I happen to like this proposal too, but you haven't given any reason not to do both...
Nothing about the opinion is better than any other. But the only thing we have to achieve is that it is a majority opinion, which frankly doesn’t seem all that hard to me.
So while carbon pricing would be a more ideal solution, OP is suggesting that a targeted ban on POW crypto is a good-enough bandaid that might actually pass.
If we won't legislate it now, it's possible we won't get a chance to do it later thanks to bickering from lobbyists and fossilised laws and practices. See IPv4.
Banning PoW cryptocurrencies is not a big enough priority for anyone that it will be a motivating factor to move past the other issues surrounding the climate debate, especially not anyone on the side of "don't do [thing] to fix the problem". I don't see any other mechanism by which it makes passing other climate legislation harder.
Banning PoW cryptocurrencies removes money that is currently on the side of "don't pass climate legislation because it will harm my PoW cryptocurrency business" from the table. That makes passing future legislation easier.
In general, trying to solve all the worlds problems at once doesn't work. It's too complex, you paralyze the decision making body with too many tradeoffs. When something is obviously bad, banning it immediately not only has the effect of meaning it's gone immediately (and doesn't hang around until you solve the whole problem), but it simplifies the remaining problem for the decision making body. This makes them more likely to come to a consensus on exactly what to do in a finite amount of time.
Does it? And, do you have data that backs this up? It stands to reason to me that PoW miners only want cheap power; they don't really care too much how it gets generated. Considering that the cheapest power source you can build out today is green energy, it sounds like a win-win to me for them to put their money into "advocate for more cheap power."
I don't think this applies to laws. In fact, I'd claim the opposite. Laws are something you REALLY want to get right
But that’s exactly what the law should do...
[0]: https://www.youtube.com/watch?v=ZLozreFvl24
[1]: https://www.youtube.com/watch?v=8LfccX_pBHM
I'm curious if someone driving an electric would get ticketed as well.
EDIT: Specify the part of the post that bewildered me.
https://en.wikipedia.org/wiki/Start-stop_system#History
Thanks for the information.
Spinning up cores to do intensive math for the sake of its difficulty is wasting energy by design. PoW's financial incentive is to waste power.
Facebook spends a massive amount of money on compute, and their profit is only as good as the margin they can make over that compute cost. Therefore they have a financial incentive to save power.
Fundamentally it's become too big a waste to ignore, like so many other things. We banned incandescent bulbs, we can ban proof-of-waste, which is basically an incandescent bulb that never illuminates anything.
To paraphrase Alan Watts slightly, do you know of a law that set everything to right? Let's just all sit around twiddling our thumbs eh? Since you obviously didn't really offer a counter solution.
modern politics in a nutshell
unless of course those regulations are about regulating "big tech" for "censorship".
The (counter) solution is not to discuss for what to burn coal, but to finally stop burning coal, oil and gas. USA and EU could do that within a few years. And then stop or tax imports from countries that still do burn coal.
But that is inconvenient for many, so they prefer discussing nerdy Bitcoin PoW instead.
And secondly and most importantly, the government should not decide what products are allowed to be traded: Governments should lift all bans on products currently banned, all drugs, all books, all music, all banned clothing, etc.
Is there a concrete plan for how this would work documented somewhere? The ways I can think of doing this in the USA are all politically nonviable.
Which makes it a self-inflicted injury. Like corruotion in Russia - it can't be adressed by anyone else.
I can think of many things equally or similarly energy wasteful as Bitcoin.
It's a nondescript pollution factory from the Captain Planet cartoons.
Every other wasteful activity has just been overconsumptive, decadent, or externalized, not an actual burning of resources for no reason.
If you spent the same energy used to mine bitcoin on producing Legos or In-N-Out burgers, then you'd have much bigger problems.
I
https://news.climate.columbia.edu/2010/06/04/the-problem-of-...
https://blogs.scientificamerican.com/anthropology-in-practic...
Why not both?
All energy production will have an environmental cost, not just carbon dioxide emitting ones.
As for the carbon side of the issue, that isn't something which is specific to cryptocurrencies or any other kind of energy usage. I support carbon taxes and import taxes on CO2-producing goods/services, including cryptocurrency services, and I am certain that many cryptocurrency believers feel the same way.
Instead what people are doing is advocating for the government to come and point guns at people who don't do what they want -- even if they happen to be wrong. And when they are wrong, there are disastrous consequences as is currently extremely apparent in California. There are all kinds of perverse incentives which have resulted in the severe homelessness and extreme government waste.
The people advocating for this neither listen to the wisdom of Murphy's law, nor do they understand that when regulation impacts the market that regulation becomes what is bought and sold. Have you never heard of regulatory capture? That has worse human-cost impacts than leaving people to their own devices.
Vote with your wallet. Don't like the environmental cost of beef? Don't buy it. This works -- you can see it playing out.
https://ichef.bbci.co.uk/news/976/cpsprodpb/BA65/production/...
As another good counterexample to your "market solutions for everything": I don't want rhinos driven to extinction, so I vote with my wallet by never buying powdered rhino horn or other poached products, and donating to environmental charities to protect them. However, it's very likely that rhinos will be extinct in the wild within our lifetime. Does this mean "the market" has decided to exterminate wild rhinos? Should we eliminate poaching regulations and remove red-tape to stop distorting the free-market price of rhino horn?
Current 'free market' is just fancy name for barbaric ransaking
Sorry, sometimes there are great reasons for regulation.
Fixing the problem is up to you.
~"The reason things things never change is that those who stand to lose by change are the ones who hold all the power" -- Machiavelli
Humans optimise for short term gain, generally perceived gain over others, and rationalise this over large nebulous things like climate change, environmental health etc. They don't count externalities without being made to. And that's individuals. Companies are downright sociopathic and will happily defecate in their own back yard if they can make a dime out of it.
As a result we can already see what happens when people are left to choose themselves or the environment, they choose their own short term relative gain over the long term prospects of the whole species (before we even look at other species).
> Fixing the problem is up to you.
Yes, in a democracy it is, which is why I vote for political parties which will bring in regulations.
Huh? Great newa! I can pollute and create oilspills and its all someone else's problem!
One of those is the assumption of perfect competition. Electricity is far, far from being a market with perfect competition. How many electricity providers are you able to choose from at your house? I'm going to guess 1.
Another assumption that doesn't hold here is the absence of externalities. The full cost of damage to the environment is not included in the price you pay for electricity, so people are going to over-consume it.
You rail against laws and regulations but even in the second sentence of your post you assume their necessity with the phrase "create an economic system..." Laws and regulations are how you create such systems.
Regulatory capture is a real thing, but it's not a good argument against all regulation. Maybe it's an argument for relatively less regulation than we'd have otherwise. It's also an argument for doing regulation better.
That doesn't mean that threads on HN can't take a nosedive and become flame wars. But that's what good moderation is here for, and I believe HN has that.
In this case, tax carbon. Then people will decide what they want to spend their (expensive) energy on.
It is very possible to bring up edge cases in a productive manner. Expand the conversation to include them. there's no need to assume the first solution idea posted is meant to be the final form
By banning that because it uses "too much" energy now - what are we potentially losing? What developments in renewables, energy storage, or grid development simply won't be there, which we won't know we don't have, because we banned the largest for-profit, skin-in-the-game competitive contest for low-cost energy that the world had ever seen 25 years prior?
Banning it outright is short-sighted. Thinking about it from a higher level is a way of addressing the real issue of carbon emissions while allowing a phenomenon that has the potential to massively help, not hurt, to thrive.
The issue is clearly a tragedy of the commons - the cost (higher air pollution/higher energy costs) is socialized, while the profits are centralized. So the maximization function is cheap >>> anything else. Why wouldn't we expect more and larger coal plants versus research into fusion reactors?
Unsubsidized renewables are already the cheapest new source of energy generation. [0] Even if miners wouldn't be doing direct renewable research themselves, their capital investments into renewables in the name of competition and cost-savings would incentivize more efficient technologies.
In this case the immediate marginal profits from mining are centralized, and the larger benefits of more advanced renewable energy are socialized.
Plus - do you believe that the price of Bitcoin will rise forever? If it did, wouldn't that mean to you that it might be doing something important, to constantly have growth and demand for 100 years? Cuz if I thought so then I'd want to preserve it, not throw it away. Sounds important.
[0] https://www.forbes.com/sites/jamesellsmoor/2019/06/15/renewa...
Even if Bitcoin isn't intended to be "growing forever", the ecosystem can and will.
Shameless hijacking here: at what point will the heat consumption/release rate be so great that the Earth becomes unable to support life? I've seen some back of the napkin calculations that estimate a couple hundred years, at our current acceleration.
Don't just sit around making the same useless attacks against other people's arguments.
Instead, offer a different proposal and explain why it is better.
On this particular topic, I particularly hate the amount of fossil fuels getting burned on cryptocurrency. I'm less concerned about the amount of energy getting "wasted" on data centers in general. At least in most cases, there's alignment of interests when it comes to efficiency optimization. Facebook has an incentive to make their servers more power efficient over time, and scale their capacity to the size of their customer base. With proof-of-work, there's also incentive to increase power efficiency, but also incentive to scale up to capacity limits.
I think it is possible that proof-of-work cryptocurrency algorithms could be tuned to the point of striking a sustainable balance long term, but that would require the world economy to converge on one or two of them. The issue with that I think is the speculative nature of the currency's distribution of ownership. With large portions of the currency being held by a small number of anonymous people, and no clear path for the majority of normal folk to exchange their wealth, it's just not going to happen without some sort of societal collapse. I also struggle to have faith in a system meant to disrupt the global economy when its existence depends on global scale internet infrastructure.
https://news.ycombinator.com/newsguidelines.html
Perhaps it's not idle pedantry to observe that many of those who are angry about crypto energy usage couldn't care less about the energy wasted and pollution generated by other endeavors.
It's like an uncle of mine who is outraged that mosques get tax exemptions, but he doesn't care that churches get tax exemptions.
Clearly tax policy isn't a genuine concern for him. He's angry about something else that he won't say out loud.
To your point, though, I'm willing to wager that most of the people whose biggest problem with crypto is energy consumption would happily also support other harsh measures against all manner of pollution generating entities. I know I would.
So long as pollution and carbon are free or cheap, people will find wasteful ways to generate it.
Incentives work, and taxing carbon and pollution will incentive green alternatives.
Yah that's the point and business with less environmental impact will be more competitive. Industries/products with more of an impact will be more expensive, reflecting their true cost.
> Even worse, it just gives more capital to inefficient governments
Most pollution/carbon taxes are proposed to be revenue neutral, i.e. all the proceeds are returned to the tax base. This is also important because like other (non-luxury) consumption taxes, a carbon tax is regressive.
And what are those? District heating?
Solar is taking off not because we banned coal, but because it's cheaper than coal. If coal and natural gas were taxed according to their carbon output, solar would be even more ahead, nuclear may become more attractive as well.
Aluminum is heavily recycled not because it's green, but because it's significantly cheaper than mining new.
Incentives work. The free market responds to incentives, and works around regulations.
Have you observed this, or are you simply speculating?
Personally speaking I find it just as irritating of a pattern here that knee-jerk calls for "regulation" (i.e. bring in the coercive power of the state) or outright banning are so often floated as a/the solution to every problem. When legal coercion is suggested, it is entirely proper to bring up the existence of the dragons that lay down that road.
If cryptocurrencies didn't have the energy footprint, I would find them pretty uninteresting and/or ridiculous for various reasons, but ultimately it wouldn't bother me that people do what they do with them. When they start adding seriously to the global energy load in a time of climate crisis that makes them pretty offensive.
I don't think that's correct. I think that it's possible to care about both, but to be dismissive of misdirecting subject changes, i.e. "whataboutism".
Nicely done, nicely done.
Industrial production of greenhouse gases is nearly an order of magnitude larger than consumer production, but often inordinately the "guilt" burden is pushed to the consumers: Do you have an EV? Have you changed all your light bulbs to more efficient LEDs? Are you Vegan enough?
Here too: Bitcoin alone has risen to an order (or three) of magnitude more energy consumption than Facebook could ever use/do ever use to track people. (Cumulative, the rest of cryptocurrencies only further dwarf Facebook's comparative energy costs.) We can be angry about two things, we can be angry at both, but why can't we discuss the bigger problem first without getting into the weeds of all the smaller problems?
(And of course, the two order of magnitude problems above are inextricably linked: Bitcoin is on track to make many industrial users of electricity look like chumps and dwarf them by an order of magnitude. Nearly all of the consumer-side gains from veganism, LED lightbulbs, EVs has been offset again, if not entirely dwarfed, by cryptocurrency mining.)
People are bad at reasoning things at large enough scales, have a hard time gut understanding order of magnitude problems, so the fallacies keep creeping up, and keep getting weaponized by bad agents (the consumer "green guilt", the consumer "recycling guilt", so many other "demand-side fallacies" that if consumers just bought "smarter", problems would just go away, when really it's the suppliers that are in control).
It seems like you implicitly draw the 'fair' line between FB and BTC.
BTC's market cap is roughly equal to Facebooks. If a POW coin used facebook levels of energy at the same value, would you find that acceptable?
People seem to be intentionally conflating some things. A carbon tax is nice precisely because it avoids getting into weeds and is a general approach that applies equally to everything. Some people are proposing this and others are saying "don't get caught up in the weeds." What? Makes no sense. It just reinforces the poster's point: that some people's real motivation doesn't seem to be environmental, there's a strange focus on crypto specifically that makes it seem like they want it to be reigned in for other reasons.
The raw statistics already tell a story that the difference between "BTC" and "Facebook" is greatly exponential. Wanting to focus first on the (much) bigger exponent isn't necessarily a sign that people's real motivation is "conspiratorial" against crypto.
It is orthogonal to the issue at hand that PoW is using far too much energy per transaction/per capita/per GDP/per most metrics you want to point to. Not using the energy in the first place is always going to be greener, no matter how much PoW systems invest in renewables and their R&D! I can't see that as "misguided". An outright ban would get immediate results versus a carbon output tax would incentivize eventual results, maybe. That's not misguided, that's just a different perspective, and a different preference on an ideal time window to address the situation versus wishful thinking and "golly gee, sure hope the market eventually figures it out someday".
Gold mining uses something like 140 terawatt-hours of energy annually, and produces enormous pollution and environmental destruction in addition to that.
That's greater than Bitcoin's energy usage.
Since gold mining is so much more harmful to the environment, maybe we should outlaw that first before we work on smaller problems.
The most apropos commentary in this entire thread yet.
For now. Gold's been around for centuries, Bitcoin not even for two decades. It's got a momentum that Bitcoin may or may not match in the future.
The "other endeavors" category above was "digital endeavours" and specifically "Bitcoin versus Facebook", which is an order of magnitude difference.
You've introduced an entirely different category from the above discussion. It's maybe an interesting category [1] to discuss elsewhere, but is off topic from the fallacy we were discussing. Thanks for the non-sequitur, though.
[1] Personally, I'm not so sure it's a useful counter-comparison to Bitcoin: Gold is used in electronics and other industrial needs, beyond its service as a value store/commodity of interest to collectors. Gold is also increasingly rarely the "primary" focus of mines. Most of our Gold today comes from Copper mines and very few would argue we are mining Copper as a value store/solely for greed.
Gold mining isn't a fucking edge case if it uses more energy and produces far more environmental damage.
According to the principle you described, Bitcoin is the edge case we should ignore until we solve the gold mining problem.
It's not an edge case of the "electric waste of Digital Services", because it is an entirely different problem. So not only do we have "pedantry pageants" of edge cases, but we get to address the "pedantry pageants" of all the unrelated but seemingly related problems too?
Best i found for Bitcoin was 40-100 TWh per year: https://digiconomist.net/bitcoin-energy-consumption
And for Facebook it appeared that they used 5140 GWh in 2019: https://www.statista.com/statistics/580087/energy-use-of-fac...
So essentially:
I wouldn't have expected Facebook to consume comparatively so little energy, if i'm doing conversions right.Attacking the motive or whatever is not said out loud is responding to a weaker interpretation
OP proposal to ban cryptocurrencies for 'damaging environment' while we have companies who's entire business model is giving their customers cancer and preying on addicts.
2. For all their many flaws, those industries also provide something of value. If they shut down tomorrow, people would miss having cars, pesticides, fuels, medications, etc. but if every cryptocurrency suddenly halted tomorrow nobody outside of a few speculators would find their daily life any different. That doesn’t mean that those externalities aren’t real and don’t require action but they’re widespread because there is some kind of real value to society and you’d need a transition plan to avoid disrupting a lot of processes.
And banning isn't really a proper solution in the first place. It's a literal avenue for tax revenue for countries at this point. The fact that PoS coins like Cardano and L2 solutions like Polygon are bullish despite the crash in Bitcoin shows something about investor sentiment surrounding the whole energy consumption ordeal. Voting with your wallet is a real possible solution and IMHO, people are starting to take the hint.
Here's my issue. There is such a thing as too-late in environmental matters. Once it's too late, it's a fire that sustains itself. Therefore, acting quickly matters. Addressing the source directly is obviously the superior solution. But I just don't see it happening at a fast enough rate. I see nuclear power in the same way. Yes, it's a little bit of trading one problem for the next, but it's a very necessary stop gap to buy us time.
You're presupposing this is a problem that needs a solution. I think myself and the commenter you are replying to would agree that either: A) it's not or B) it does not need to be solved by a regulatory body.
Instead of getting annoyed by people pointing out edge cases, it would be more productive to explain what criteria should be used, or admit this is a half baked solution.
Choose an argument which requires you to offer a viable and compatible alternative and you'll probably get a lot more ears.
In this particular situation, I may not have the solution, but I know that the offered one is a short-sighted knee-jerk reaction which has terrible implications for other things
I will say that given the text based medium of HN, it can be hard to gauge whether one wants to have a mindful discussion or if one is just trying to mindlessly ding a poster.
Be kind. Don't be snarky.
Comments should get more thoughtful and substantive, not less, as a topic gets more divisive.
When disagreeing, please reply to the argument instead of calling names.
Please don't post shallow dismissals
That’s the first time I’ve ever seen someone describe Facebook as an “edge case”.
If $900,000,000,000 of market capitalization counts as an edge case, I’d think you must be hard to please at Christmas - those are some really high standards!
Because it is an incredibly common fallacy to ignore boundary conditions and unintentional consequences when proposing a pie-in-the-sky regulation that is supposed to just fix things.
Any regulatory mechanism is essentially a machine that will need to work with every input and minimize some class of error, be it precision or coverage or some other system level metric. Turns out the most interesting part of such a system is indeed around the edge cases, and the difficulty of handling such cases is essentially the bulk of the difficulty of building such a system to begin with.
It is like saying "why don't we build a system that punishes criminals", which sounds very agreeable and popular at that level of construal, but is incredibly complex and sophisticated at the actual implementation level; e.g. to have a process to minimize false positive convictions rather than maximize conviction rates.
> It's SO trite, predictable, wearisome and boring
Not to sound harsh but HN does not owe anyone their favorite type of entertainment and honestly criticisms on those metrics are more trite, predictable, wearisome and boring themselves than anything else. Many find intellectual stimulation and systemic thinking entertaining and thus those comments enjoyable.
Maybe it's time to grow up and realize that the real world is highly complex and requires sophisticated tools, mathematics, and questions in order to better live in it?
- There are those who are OK with high carbon emissions for various things that are a proven net-negative to the society or the planet - examples being, as I mentioned, social media, user tracking and advertising server farms, plus anything directly related to that. If these things are not a net-negative, then at the very least they could operate at the fraction of their current emissions, were they built with externalities in mind. To be OK with that but not with Bitcoin where it objectively provides some value by directly helping human lives (it is a store of value and a way to transfer money for people whose home currency is unstable or restricted by hostile governments, for instance), is hypocritical.
- Literally all legislation surrounding cryptocurrency (well, anything else too, really) by necessity has to be based on someone's opinions. Whose, is my question. Because that will shape what's allowed and what's not allowed to a great extent. Badly chosen opinion-givers lead to clusterf*cks like Disney, Sony and a few other giants effectively being in charge of worldwide copyright durations, which causes untold damage to the cultural commons.
Without Proof of work, cryptocurrency would have never been established as a novel concept. Proof of work was the only rationale way to decide who should initially own how many units of the currency.
The laws set up the playing field, and the market responds to the incentives. There has never been any such thing as a "free" market, and it's a good thing too.
Always the same fucking slippery slope!
https://en.wikipedia.org/wiki/Whataboutism
Just tax the carbon sources and ban building new coal power plants or reactivating defunct ones.
Instead of downvoting please give me one other example why would rational market entity build more renewables than to satisfy demand when production peeks. Because to go full renewables without batteries (and we barely have any when compared to our renewables) we need to always meet the demand even when renewable energy production is the lowest. And what should rational market entity do with the power at all other times where production is far higher than demand?
Because "mine cryptocurrencies with it" seems like the only reasonalble answer in the world where cryptocurrencies exist and people with too much money buy them enthusiastically.
Electricity usage has almost no negative externalities. Electricity production does. Attacking people for using their own resources on something that they find to be useful and worthwhile is foolish. Confront the actual problem, and quit harassing innocent third parties.
I see a lot of people replying with a slippery slope argument of this nature, which makes me think I should explain my argument better.
I'm not arguing that burning electricity alone is the problem. I'm arguing that burning electricity for the direct purpose of making a financial product is a problem for society, when 1) the financial product explicitly incentivizes burning up as much as you can to make more money and/or 2) burning up that energy can be alleviated by other technical solutions.
I'm not arguing that mining should be illegal. I'm saying the 'sale' of the results of that mining should be illegal. Using or making incandescent lightbulbs is not illegal, but the sale of them is banned or restricted in large portions of the world [1]. Less harmful alternatives exist, so sale is disincentivized, the world moves on.
This is not the government deciding how you spend energy resources. You can continue to mine all you want. But you shouldn't be rewarded for that.
One thing I should point out is that I recognize that an alternative solution for these incentives is to make electricity always so expensive that it costs more money in electricity spend to mine crypto than you can make money of it. Make electricity price depend on crypto price. Needless to say I don't see that working out :)
[1]: https://en.wikipedia.org/wiki/Phase-out_of_incandescent_ligh...
Congress, courts, Department of Energy.
The legislature and the regulatory agencies it has created, obviously.
The exact same way literally every other environmental regulation has ever been passed.
There are entire divisions of agencies dedicated to drawing the line of "too much" in all sorts of areas, for pollution, poisons, contamination, energy usage, etc. In fact, pretty much everyone but extreme libertarians agrees this is one of the main functions of government.
So while you might not agree on the resulting policy or even the mechanisms that arrived at it, it is a solved problem. You don't need to wonder how we'd accomplish it -- that part is easy.
The difference is that Facebook’s energy use potential is limited and gets better with improved computer tech.
There is a limit to how much analysis you can do. As you get more efficient hardware, the energy use would go down. Facebook also invests a lot of effort in optimizing their code to run more efficiently.
With proof of work crypto, the only limit is the price of crypto. Despite any efficiency gains, you can always expect the energy use to scale with the price of crypto. For example, a 10x more efficient miner, won’t cause 10x less energy use, it may actually increase energy use as more people mine with higher rate electricity.
There is a chance that we develop a situation that the most monetarily efficient thing you could do with electricity is to mine proof of work crypto. If that becomes the case, then even a carbon tax won’t help because proof-of-work crypto can easily pay the tax compared to all the other uses of electricity.
With crypto it's too decentralized to implement either.
> who's the arbiter of what's "too much" power for a use case
Ultimately Mother Nature will be the arbiter. If people spend too much time arguing about politics instead of either lowering power usage or moving to clean energy, those people will be killed sooner or later.
Yep, I hate to say it, but even FB is more useful compared to BTC. No one uses BTC for actual payment but to hold a value. People holding BTC could just switch to MtG cards and saved tons of energy without losing any benefits that they are currently using.
"If there is a clear and obvious better with minimal impact." It's just that simple.
We make choices like this all the time. Here in the US we set CARB rules to slow emissions but we don't just ban old cars even though that would be better for the environment. Grey is okay in laws if the black and white bit behind it is clear! (Reduce emissions if possible with least possible impact on people.) Otherwise you will never be able to improve anything until the harmful methods have grown too much.
The king. The digital crypto king.
The quick google says facebook uses 5 while bitcoin uses 143 terawatt-hours
At some point the shaming would begin, web devs would respond, and then I'd generally get what I'm really after -- much faster page load times!
Regulating the energy consumption/efficiency is more akin to fuel efficiency standards for cars.
Bitcoin is an endless energy pit. The same isn't true of things like Facebook.
You don't need to worry about how much electricity was burned, only that it wasn't done in exchange for a plaque saying "I filled a swimming pool with gasoline, then lit it on fire"
CO2 taxes
Just ban people doing bad things, like all of them.
Problem solved
All problems solved
Rather than deny that reality, you're better off working with it to produce more, but cleaner, energy.
[edit] - downvotes because I used the word "mother" maybe? I don't understand this community.
I think of each community as a game of Civilization. As you progress you unlock higher rungs of the tech ladder. Exporting your raw materials to later import finished products made from them is a waste of resources and stagnates the local industries at the raw material stage.
What industries could be developed in your community if the power was available?
Bitcoin mining creates a price floor for energy. It is a buyer of last resort with infinite appetite. By pushing up the value of energy in the market, it encourages expansion of energy production.
The number of bitcoin addresses with a balance is 30 million. The number of bank accounts is in the billions.
As you said, BTC is two orders of magnitude less efficient than banks assuming mining provides the same value to people as ALL of the services banks provide including loans, savings, and money transfer which IT DOES NOT.
That's where it stops, because what you've said is nonsense.
On the surface this sounds like bitcoin's PoW use will simply stop. It's actually the entire opposite.
When governments ban it, they go after sizeable, identifiable organizations running these operations, that is their only choice. These operations are optimized in their energy usage, because it's only in their interest to reduce their consumption relative to the value of the coin they mine.
The moment these operations are shutdown, there is a massive sink in the hash rate, smaller operations and hobbyists will rush in to fill it. Hash rate gradually climbs back up and instead you have 10x the energy usage because you can no longer run the PoW in a scalable way.
Ever since Dogecoin had a moment, there's now a million coins trying to engineer their own "moonshot".
This is on top of the security issues and of course the energy issues. Cryptocurrency is garbage.
The only answer that works is a carbon tax.
Not really. It wouldn’t stop, but it would decline substantially.
Smaller operations and hobbyists only participate because it’s worth money to do so.
Making Bitcoin illegal would kill the argument that it will eventually displace fiat, and relegate it to being used only for illegal purposes.
The incentive to mine a currency that can only be used for crime as a hobbyist would end up being low.
And if you can't really do anything with your coins but have your coins, why would people rush out to break the law to mine them?
Let people trade cryptocurrency to fiat in person all they want, it's completely insignificant.
BTC's main uses (speculation and laundering) are possible only as long as it can be exchanged into fiat. This can change tomorrow if the right strings are pulled.
It turns out laws do sometimes have effects.
We will see, the trouble with Freakanomics, is that it had quite a few avoidable errors in it, so maybe it's not the best example.
This is false. Miners will spend about the same amount of money they get from block reward to run their operation. Asymptotically, this money is spent to buy electricity. This is the result of competitive pressure from other miners. What you will observe instead is the same amount of electricity burned but with 10x less hash rate.
PoW doesn't scale. It eats up power needlessly and we're only stuck on it because the original BTC was a PoW cryptocoin. Simply banning trading of PoW coins would do mounds of good - the crypto community would be better streamlined to move toward PoS coins of the future and environmentalists wouldn't have to waste their resources lobbying to ban BTC anymore.
This ban needed to be internationally, though. Pretty difficult to enforce on a global scale. And then it would only have a short term influence on the price of, say, Bitcoin, until enough “black” mining power emerges.
I would just relax. Bitcoin is not going to destroy the planet. In the long run it’s going to be a niche financial tool compared to the scale of Ethereum or other competitors (Cardano, Solana or Algorand). It’ll be the PoS enabled DeFi networks that are going to disrupt the banking business.
Maybe there need to be more guidelines around how to use excess energy instead of coal, but to totally disregard that PoW could be mined from excess energy is shortsighted. Flare gas is just one example.
[1] https://oilmanmagazine.com/how-and-why-natural-gas-flaring-i...
That's not only radical, but a grotesque knee jerk reaction.
If you think about renewable energy, there's a problem of mismatched production with consumption and transmission. This causes wasted energy (or energy that is very low value), which makes renewable energy projects less viable.
Sure, one obvious way to address that is to add batteries to store such energy. Now, go mine (and refine) enough lithium to build utility-scale batteries. That's a huge environmental issue that no one wants to talk about, specially Tesla/Elon.
What's a competitor to energy batteries? Proof-of-work mining of bitcoin: it make renewable energy projects economically viable, because the energy of low-usage times can be used to mine bitcoin, which can pay for energy of high-usage times.
If there's an environmental/carbon cost to BTC mining, then attach a carbon tax to it (or something like that).
If one thinks about tracking the carbon cost of a mined BTC (based on the energy source used to mine it) such that a carbon tax can be accurately exacted, the usage of blockchain to track carbon offsets and cost is a pretty obvious thing that comes to mind.
It’s all bullshit and hype — the crypto equivalent of the Chick-Fil-A cows saying “eat more chicken”.
If the government starts arbitrating on what is a judicious use of energy on environmental grounds, then you're a short step away from banning, say, beef production.
There are tons of things that people do that I might deem not worth the environmental impact, like flying a hundred thousand miles a year for business, or eating beef, or driving to work every day, or having bigger houses and lawns than they need. Seems kind of arbitrary to allow most wasteful things that people do but draw a line at being able to participate in a certain kind of blockchain. The per-person impact of holding and transacting with bitcoin is not egregiously high compared to all the other things people do in their day to day life.
And based on ethereum's move here, perhaps people are starting to vote with their wallets anyway and such dramatic limiting measures aren't needed?
Did you mean "the rich"?
You don't necessarily need to ban the coins to fix this aspect however, just make sure they don't get integrated in the financial system too much. They're basically digital gold. Gold was ok until central banks tried to anchor to it which caused the Great Depression and maybe even WWII.
Buy bitcoin.
https://web.archive.org/web/20210116135412/https://taaalk.co...
If you want to encourage other uses of electricity, subsidize them, don't just ban arbitrary forms of consumption.
Well, for one, because that tends to mean "rich folks and large companies can act with impunity, everyone else not so much".
For two, we actually do discriminate quite happily between different uses of things. Maybe it's OK to keep energy prices low for households, as a compromise, but not for crypto mining?
Well, firstly, are we even sure that's really possible?
> Giving each household some amount of free or subsidized power makes sense
Which is basically exactly what I was talking about - we can and do decide that some uses are better than others, and use regulation (some of which may be tax or credit) to achieve that.
We already do this. I'm not sure why people are so aghast that we might do it some more for PoW cryptocurrencies.
Ethereum will drive and that is good - but it solves different problems compared to Bitcoin.
In regards to banning PoW, sounds like the net neutrality discussions honestly... so to me that does not make sense for the same reasons.
And here is the kicker, because its permissionless, it can't be stopped.
That might cause a financial crash of the cryptocurrency market, with the trust issues, etc. It wouldn't be wise.
This is an insane take. Proof of Stake is NOT secure, the stakers can collude to reorganize the chain at almost no cost. This is like the exact system we tried to get away from, the USD system is also a Proof of Stake.
You end up needing to solve the same type of problem that PoW solves in order to enact a PoW ban simultaneously across all countries - how can all parties trust that every other party is being honest and will follow through (Byzantine Generals problem)?
democracy! f yeah!
Jokes aside it's really hard to decide what's reasonable energy usage from waste. Ultimately the real question is who gets to make that decision.
And overall, the idea of government getting to decide what are acceptable uses of energy and what isn't is actually terrifying
I'm a crypto-skeptic, but why would I ever hold a crpytocurrency in that scenario? If governments would ban it for environmental goals, they'll ban it for political goals, too.
The only interesting bit is cryptocurrencies would have to legitimately bring something new to the table that's actually better than the existing financial system in order to be viable.
I think that at some point, PoW will become so economically unfeasible that it'll simply make more sense for miners to ditch those coins and whale up on PoS ones.
To me this illustrates a lack of understanding of the space.
However, some of the biggest plagues to society are rooted in central banking policies that over time devalue a nations currency through excessive money printing backed by nothing, or gambling via derivatives that when a bubble pops requires bailouts. Even worse, where we are now is done via quantitative easing which is a fancy word for more money printing to buy government debts to keep the economy afloat. If Bitcoin or other cryptocurrencies can provide all the same services banks offer (borrowing/lending/saving) and be backed by a finite number ensuring value over time then we, as a society will be less manipulated by politics and therefore experience deflation which will could close wealth gaps.
Bitcoin may have an energy problem but the problems it aims to solve are extremely important as well. “Necessity is the mother of invention.” If Bitcoin can really solve some areas maybe the conversation should be about how can get 100% of BTC energy consumption to be renewable.
Outside of ethereum, proof of stake is no different than a database. The ownership is so centralized that you only have 3-5 people/organizations approving everything.
The whole point of crypto was to be decentralized, proof of stake is not that. Cardano, solana, they all are pointless as a token because the whole supply is largely owned by a few people.
It seems kind of necessary to achieve wide distribution and avoid wealth concentration.
How about continuing research and development of solutions providing cheaper, greener energy instead of sparking righteous war against something that consumes energy based on incompetent social media fart?
The loudest voices against something are typically hypocrites that happily fly on their gas guzzling private jets bitching about people driving their oh so inefficient cars to work.
If you want to target an externality of the free market, do it directly: simply tax emissions. This will guide the market towards greener energy generation and direct capital out of activities that produce emissions without generated value.
* Reduce trade * Reduce value * Reduce carbon use?
Is there a case ever where an illicit market found a price equilibrium which was lower than the licit one? And, if such a ban does cause the price go up, won't the same incentives cause continued mining competition?
Unless you want to also ban servers or services that are using deep learning training, decoding massive videos and livestreams on storage systems that are also burning up the planet.
It's not fine to allow PoW cryptocurrencies to continue to burn the planet but collecting mass amounts of user data and using wasteful deep learning training continuously is fine to burn up the planet on GCP, AWS and Azure?
That is to say, it's self correcting. If the price of energy increases, there is less mining. Alternatively, the miners are also incentivized to find cheaper or develop cheaper alternatives; this spurs innovation.
If prices rise due to mining, innovation will take place and more energy will be developed.
There's nothing wrong with this mechanism, as it corrects itself. In 2050 when you can no longer mine bitcoin we will that have an abundance of cheap power. Which is the single greatest factor in reducing poverty.
Frankly, I think this comment is off base. So far there have been zero negative measurable impacts from power usage related to crypto.
> innovation will take place and more energy will be developed.
This has way too many assumptions baked in. Increased demand will not guarantee a clean supply, nor does it guarantee technological progress in performance of efficiency.
https://bitcoinist.com/bitcoin-mining-energy-consumption-us-...
Videogames run GPUs at full capacity too, we should ban them too. No one NEEDS to pretend to be a cowboy for 100+ hours each across 36 million GPUs.
Actually maybe there should be a ban on computing power above mobile CPUs available to non-government bodies, if this really is so devastating to the environment we need to limit the amount of damage people can cause as individuals, why does a normal person need a GPU anyway when smart phone graphics should be enough.
32 million bought it, takes about 100 hours to complete runs GPU full capacity.
If we're going to say using GPU computing power is bad for the environment then we can't just stop at crypto because it's convenient. We have to look at all computing and videogames isn't something that should be considered essential either.
Miners will move to where is is profitable and will be ultimately incentivized to find cheaper (ultimately cleaner) means to mine.
First it was 'but criminals use it'. Now it's 'think of the environment'. What's the next excuse going to be?
POW is more _government_ proof than any other method. To many the threat of central bank digital currencies is justification enough for POW's energy consumption.