There isn't a single redeeming quality about Cryptocurrency. The sooner it dies, the better. "Using" chips for useless heat generation has no benefit at all.
Using Ethereum as an example, the code is open source. The Ethereum Virtual Machine is a cloud computer. As in, when you execute code on the EVM it is executing on someone else's computer for a per-use price. Hence, "open source cloud computing".
At least that's what I think the parent is getting at. I would agree it's a bit of an obtuse analogy and doesn't necessarily apply to all of crypto as a whole.
Due to the massive redundancy and waste involved, the entire EVM performs less useful computation than one of AWS's smallest EC2 instance types; less than a current Raspberry Pi attached to a 100 gig SSD.
In practical terms, the machine I'm writing this on is closer to cloud computing than the EVM is.
> Due to the massive redundancy and waste involved, the entire EVM performs less useful computation than one of AWS's smallest EC2 instance types; less than a current Raspberry Pi attached to a 100 gig SSD.
Ok, yes, that's fair. That doesn't totally negate the analogy, though. It just shows that it's a potentially inferior solution.
> In practical terms, the machine I'm writing this on is closer to cloud computing than the EVM is.
I think what the parent was getting at is the whole "cloud == someone else's computer" trope. Without knowing more details about the computer you're using to post on HN it's impossible to know but I think it's pretty likely you own the computer you're currently using. You wouldn't be using your employer's computer for non-work purposes, right? ;)
It's like cloud computing if any code I wanted to run ran redundantly and simultaneously on all of AWS's computers and I had to share those computers with the rest of world in a competitive bidding process.
Cryptocurrency makes it much easier to buy and sell drugs online, this is a huge redeeming quality. Even if we assume that we are ideologically opposed to drug trade, we'd be liars to claim that cryptocurrency is useless. It de facto isn't.
I agree that people tend to over-hype cryptocurrencies, but there are examples of good being done in the ecosystem. Pineapple Fund (https://en.wikipedia.org/wiki/Pineapple_Fund) is probably the first that come into my mind, distributing $86 million worth of bitcoins to various organizations. That would not have happened if it wasn't for cryptocurrencies (Bitcoin specifically)
Likewise Amway is a great company because its CEO sometimes donates to charity.
I mean seriously, is this a real argument. Bitcoin is good because one person who got rich from it happened to be philanthropic? Where do you think that money came from? The answer is other "investors" who were told Bitcoin would make them rich. If the best justification for Bitcoin's existence is the Pineapple fund, Bitcoin must be the stupidest charity fundraising effort of all time, which is saying something.
The intrinsic value which Bitcoin provides is that it is as a currency, i.e. a way to transfer and store value. But as the Bitcoin detractors in this thread point out, it's value in this role is far outweighed by its costs.
Yes, it's a real argument against "There isn't a single redeeming quality about Cryptocurrency". I agree that not everything with cryptocurrency is good. In fact, I'd argue most uses today are bad, and only a few are good.
But I haven't argued for that everything about cryptocurrencies are good.
Remember; "Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize. Assume good faith."
A rich Bitcoin owner donating money to others isn't a redeeming quality of cryptocurrency, it's a redeeming quality of a person who owns cryptocurrency. It has nothing to do with intrinsic qualities of Bitcoin, and so I don't think it redeems Bitcoin in the slightest.
it's way cheaper and more humanitarian to secure value in Bitcoin using computer chips than it is to send the US military into foreign countries to support the petro-dollar
There seems to be two camps of opinions regarding cryptocurrencies.
The first one is people who don't see any value whatsoever in cryptocurrencies. They typically say PoW is "waste" because they don't see value in the output, so there is no argument against them, as everything related to cryptocurrency is waste. It's largely a waste of time talking to these people, as they have made up their mind.
The second group are people who see maybe a bit of value or more in PoW. Since there is a hypothetical value, there is no "waste" as much as "use" of doing this hashing. They see value in having a cryptocurrency network, so even if it's wasteful, the greater good is more important for them. It's largely a waste of time talking to these people, as they also have made up their mind.
PoS is not as decentralized as PoW. With PoW, you can literally transform energy into cash. In order to be part of a PoS network, then you need to buy the token/coin first. What if you are in a country that restricts crypto? How can you participate in the network? The whole point of using blockchain is to make something truly decentralized. If you are sacrificing decentralization, then you should ask yourself whether you are using the proper data structure for the problem that you are solving.
It's not quite market price, it's miner rewards. As Bitcoin gives off less and less rewards (it halves the amount every 4 years), the amount of miners should go down, as it then becomes unprofitable for a lot of them.
This is actually a second problem of Bitcoin though - If in say 20 years it ends up being worth a lot, and gives very little mining revenue causing few people mine it, it becomes vulnerable to attack from nation states. Because the cost of a 51% attack is only a fraction of the possible rewards for a successful attack.
> As Bitcoin gives off less and less rewards (it halves the amount every 4 years), the amount of miners should go down, as it then becomes unprofitable for a lot of them.
Unfortunately, there are second order effects. The miner reward is a constant selling pressure on Bitcoin, as miners must sell some of the rewards to pay for electricity and hardware. As Bitcoin gives off less and less rewards, this selling pressure reduces, which tends to increase the Bitcoin price (less supply for the same demand).
TLDR: An angry rant about PoW schemes. Views expressed are similar to the sorts of comments you've probably already read here in HN comments on past articles. If you're looking for some new insight, it isn't here.
That's their point. The core value from cryptocurrencies is just that, you cannot trust the other party, so here is a system that allows you to transfer money between others, without trusting anyone (well, except trusting the developers and makers of the protocol that is).
Not just the protocol makers/devs. Let's pretend you are trying to buy something online with ethereum... (ridiculous of course, who uses these coins to buy real stuff?) You'll have to trust:
* The website you're using (is it a fake clone of the site you thought you were visiting)
* The people that made your crypto wallet (app or hardware, or both?)
* Your computer (lots of crypto stealing malware out there)
* The person/company you are sending money to (are they who they say they are? are they going to just disappear with your coins, since the transaction can't be cancelled)
* The smart contract you might be using (how many bugs are in it, has it got a backdoor to rip users off)
* The miners building the blockchain (it's not just that they don't have to mine your payment - some miners will front-run transactions to do whatever you are trying to do first)
* [...]
But sure, apart from that, it's completely trustless!
You seem to not really grasp the context here. When people say that cryptocurrencies (specifically Ethereum here) are trustless, they don't mean that cryptocurrencies turn the entire world trustless, they are referring to that the medium of transfer is trustless. Just like a SSL certificate doesn't mean the seller won't run away with your money without delivering anything, trustless cryptocurrency doesn't mean that either.
What is trustless is the verification of transfers. Previously, entities had to come together in meatspace and agree how a transfer happen. Now, entities that have no idea about the other entities on the network, can send money between them without having to trust the network, as the network is incentivized to behave well.
Again, all the problems you listed have nothing to do with "trustless" cryptocurrencies, but everything to do with humans. Cryptocurrencies don't try to solve those problems, and wouldn't be able to either.
> Previously, entities had to come together in meatspace and agree how a transfer happen.
I transferred money to somebody else last night despite never having met them, virtually or in meatspace or whatnot--I used a credit card to buy something.
That's sort of the issue with the trustlessness of cryptocurrency: it "solves" issues in the financial that are already practically solved for billions of people.
> I transferred money to somebody else last night despite never having met them, virtually or in meatspace or whatnot--I used a credit card to buy something.
Great! In the context of the discussion, that transfer wasn't "trustless", you have bunch of contracts setup and more to support and make sure the transfer is trusted and OKed.
> it "solves" issues in the financial that are already practically solved for billions of people.
Yes, bank transfers and credit cards works for a lot of people. But there are tons of people who cannot use those, what about those people?
Have you ever tried to send money from Nigeria to Ecuador? It's a hassle, especially when you deal with a larger amount. Your transfer is gonna get stuck in the fraud-department at some entity you never heard about, simply because the transfer is coming from Nigeria.
Instead, doing the same transfer with cryptocurrencies took about 1 minute to enter the details, and 5 seconds for finality of the transfer, and it's done.
It is not a matter of trust but one of understanding. People need to react to their motivations and incentives, and one must take that into account when interacting with other people.
Demand for GPUs for Ethereum mining goes to zero in Q1/Q2 2022, when the beacon chain merges with mainnet. Quote: "This will mark the end of proof-of-work for Ethereum, and the full transition to proof-of-stake."
Today, just like in 2018, we can see the price of Ethereum reflected in Nvidia's stock price. When Ethereum moves to proof-of-stake, mining GPUs will flood the market and demand for new GPUs will no longer be tied to the cryptocurrency bubble.
These prices are becoming the norm, not the exception, already took too long.. I am slowly giving up hope a GPU will go for MRP ever again. I also just want my GPU man
It's going to happen at some point, I agree, but I wouldn't count on it by mid-2022, which is important if you are looking to buy a GPU. The fact that my 1060 is valued at 150% it's launch price indicates that miners are also pessimistic about the speed of a full POS transition.
Plus, I'm not convinced that the transition will go entirely smoothly. Obviously it would be in miners interest to prevent the POS transition, and if there's a bug or problems with the new chain I could totally see a fork or political pressure to delay things further (I don't think either is likely, simply possible).
Have you ever sought out to see which deadlines the Ethereum Foundation has setup and met? The only ones you'd read about online would be the ones that missed the deadline. But if you look at the previous milestones (like the Berlin upgrade), they all had their deadlines met correctly.
Are you telling us that one of the most popular cryptocurrency projects on the face of the planet which has access to thousands of the so-called 'brightest engineering minds' on the planet, after over 5 years, with billions of $ of funding at its disposal, has managed to make a minuscule change to its fee system? Wow, they're truly outdone themselves. What an exceptional team.
I wonder how many Ethereum developers it takes to change a lightbulb...
Many changes have been made, including a major upgrade to the fee system, with changes needing buy-in from many stakeholders. This is a network responsible for billions of dollars in value
Or maybe it's monopoly money, but critics always like to have it both ways, don't they. It's real when poor victims are losing it, but fake otherwise. It's all pretend, except when something goes wrong, then the teams running it are suddenly irresponsible.
Nothing ever goes wrong. A multi-million dollar hack is called a 'minor hiccup.' Missing a deadline by 5% of an entire lifetime is called 'a small delay' or 'a misunderstanding'. If they deliver within 10 generations, they will call it 'a resounding success, exceeding our wildest estimates.'
I think you vastly underestimate the difficulty on running a global network like that, with multiple parties who almost all have different goals and motivations.
I thought HN was supposed to be better than that. Changing the tweet length on Twitter is hardly just changing the column limit, there is so much more work behind the scenes. At least with Ethereum you could (if you're interested, doesn't seem like you are) see all the changes they had to go through in order to get that change on the network.
Total BS. I'm a blockchain developer and I worked on a project worth half a billion $ and we made far bigger changes than that in less than 2 years... With a far smaller team... Without even a single 'rock star developer'.
Either Ethereum devs are the dimmest minds in the industry or there is something seriously wrong at the foundational level of the Ethereum code itself.
There you go! Of course it's easier to change stuff when the scale is smaller. The difficulty of implementing something scales with the number of people working on it. If you're just one person (or a small team), changes are easy to work through. But if you're 100+ developers, multiple foundations and also private companies, even changes that are small will take a long time to go through the process.
> Either Ethereum devs are the dimmest minds in the industry or there is something seriously wrong at the foundational level of the Ethereum code itself.
Taking long time to change the core protocol is by design (it's a feature, not a bug), so everything is working correctly.
> Taking long time to change the core protocol is by design (it's a feature, not a bug), so everything is working correctly.
In that case, I hope it takes over 100 years to implement sharding, then at least the suckers who invested in Ethereum will rest in peace knowing that at least it met their decentralization needs after some other project has taken over the world.
Again you seem to not fully understand how things work, and you also seem to wanting to read my comments in the worst possible light. I never said it's designed to take as long time as possible to get out changes, I said it's designed to take long time.
But hey, you've already made up your mind so there seems to be little to no value of us even talking with each other.
Well yes, I have paid close attention to some of the major deadlines. That's why I was asking here, to see if there was a major deadline they met that I missed. Because everytime I look at a roadmap, dates have slipped from the last roadmap.
It's pretty clear that Ethereum's team has a chronic problem with overly optimistic forecasting.
Right. Because the miners will stop their operations when Ethereum moves to proof of stake in 2030. Because there won't be a hard fork from miners who would rather have PoW. Because the miners will just give up on their operations when Ethereum isn't the shitcoin of the day. Because they won't move on to another shitcoin that is worth mining on GPUs.
> Because the miners will stop their operations when Ethereum moves to proof of stake in 2030
Well, from the perspective of Ethereum, they will, since Ethereum will no longer be PoW...
> Because there won't be a hard fork from miners who would rather have PoW.
There might be, or they might use Ethereum Classic. That's all fine, the second biggest network (Ethereum) will still be PoS so they can do whatever they want.
> Well, from the perspective of Ethereum, they will, since Ethereum will no longer be PoW...
Children develop object permanence by the age of two. How long does it take for cryptobros to develop GPU permanence ? You closing your eyes doesn't make the problem go away.
But the GPUs already exists, what solution do you imagine that involves the said GPUs to not be used anymore? Even if you sell them to normal consumers, the GPUs will be used, one way or another.
Are you suggesting we should destroy the GPUs that were previously used for Eth mining?
I think the point is that the miners already have the GPUs, they will probably switch their operations to mining other coins/forks instead of just giving up on everything.
Ethereum Classic fell victim to multiple 51% attacks in 2020. The hacker was able to gain control of 51% of the hash power and reorg some blocks and it allowed double spending and all the catastrophes that come with a 51% attack [1][2].
It is safe to say that it won't come anywhere near close to where normal Ethereum is in terms of mainstream adoption.
Miners will find another PoW ecosystem to deploy their mining hardware in, correct.
Ethereum is not really a shitcoin though, unless you consider all cryptocurrencies shitcoins. Many tokens are implemented as ERC-20s (including most relevant stablecoins), other chains target EVM compatibility to drive developer adoption, majority of the NFT boom has been in ERC-721 NFTs on Ethereum, and traditional companies are now building L2s on top of Ethereum tech (PwC, Reddit).
Ethereum blockchain is pretty fundamental to much of what is happening in crypto aside from pure NumberGoUpism. Miners can hard fork ETH if they want to, but I doubt they will. All those dollars held in stablecoins will determine which chain has validity, and I doubt USDC/DAI/RAI/GUSD would go along with a miner cashgrab fork again Vitalik...
I'm no fan of it either, but plenty of folks would view bypassing financial regulations as a shining example. That was part of the point, was to sidestep government oversight.
It's important to separate moral judgement from technical judgement. Even if I agreed with you on morality (which I don't on either count), addiction industries, including the legal ones like tobacco and games, have always been large and profitable, and avoiding various regulation has also been a big "meta-industry" for a long time.
This. Ethereum already forked once. Ethereum GPU could remain its own currency for all of those miners who invested a shit ton of capital into GPU acquisition.
It could, but would it be worth anything? Miners only mine because they can sell the crypto to others for more than it cost to mine it. At current levels that would require quite a lot of buyers for this new coin with no significant advantages over the main branch.
Compare that 50 GB/s of the M1 Max to 760 GB/s of an RTX 3080. Then check prices. Even after ridiculous scalping markups, the RTX 3080 will still be cheaper.
Ethereum was conceived to be ASIC-resistant from day one. They even considered making the coin resistant to GPU-mining but then changed their mind.
It's not that hard to be ASIC-resistant and seen that ETH GPU miners are still profitable to this date, they obviously succeeded in preventing ASICs from being economically doable to mine ETH.
> Also when they switch to pos how do they transfer your coins over?
Ethereum is already on PoS, but partially. At the moment mining is going on both chains: PoW and PoS. In a few months it's going to be PoS only. All the coins from the "old" PoW-only chain will still exist and be usable on the PoS-only chain.
It's intentionally designed to be memory-hard so that ASIC implementation is more difficult. Lots of people in the cryptocurrency world consider ASIC mining to be a misfeature, because it centralizes mining among firms that have the capital to do chip development. Litecoin's entire reason for existence is "Bitcoin, but can't be mined by ASICs".
"Also when they switch to pos how do they transfer your coins over?"
There's already a beacon chain running Ethereum proof-of-stake. Think of this like a dark launch for web tech - basically you run the new infrastructure in parallel with the old infrastructure, make sure it's stable, get everybody adopting it, and then cut over the UI to use the new infrastructure.
There's a one-way bridge that ports state over from the PoW chain to the beacon chain. Think of this as a double-write layer; all new transactions get written both to the PoW and PoS chains.
In early 2022 "The Merge" happens. This takes the form of the "difficulty bomb" - basically, Ethereum mining will get exponentially harder and eventually unprofitable until all the existing miners turn off their machines and switch to PoS, at which point there will be no point to mining Ethereum and no point to writing transactions to the PoW chain.
No. PoS is secured by miners (called validators in PoS) putting up collateral. It takes 32 Ether to run a validator. If they act maliciously that collateral gets burnt.
It could potentially lead to a run on Ethereum. The resource used in PoS is the cryptocurrency being secured itself. Basically, you agree to lock up a certain stake when you run a validator, and forfeit it if it's found that your validator "cheats". By doing this, you make cheating unprofitable - there's a financial incentive to catch cheats, and a financial disincentive to cheat, and the cheaters eventually go bankrupt (or end up on their own isolated chain where nobody transacts with them).
The financial effect of this is that a bunch of Ethereum gets locked up and illiquid. Instead of miners receiving Ethereum which they want to sell for dollars to run their hardware, stakers lock up Ethereum and effectively receive interest. This reduces immediate supply within the market. I'm wondering if a lot of the recent price movement is in anticipation of this.
Eth keeps getting generated forever but at the same time a portion of transaction fees gets burned, so whether coins in circulation grows depends on transaction volume and fee levels.
It's complicated, and basically comes down to Vitalik's observation that "Ethereum is a currency in service of a protocol, while Bitcoin is a protocol in service of a currency." Basically the Ethereum devs set the economics to incentivize the correct behavior from players in the ecosystem, and this can be either inflationary or deflationary depending on gas prices, network usage, amount staked, etc. It's responding to the supply & demand for computation on the network.
For most of its history Ethereum was inflationary. It flipped and became deflationary a couple months back, and not coincidentally the price started rising again. It's likely to be significantly deflationary under Eth 2.0 with expected transaction and staking volumes.
More recently Vitalik has said Ethereum PoS is at least a couple of years away, likely due to new attack vectors that require further research https://arxiv.org/abs/2110.10086, one of which enables an attack with only 0.09% of the total staked. It would have been foolish to fork knowing attacks like these are still being discovered.
"with more than 99.6% probability, an adversary with 0.09% of total stake is in
a position to execute a 1-reorg for any given day."
Another which could prevent the chain moving forwards indefinitely.
"an adversary controlling 15% of stake can stall PoS Ethereum"
I heard June-ish 2022, which is a couple quarters away, not a couple years. Could potentially be delayed further, but 3 quarters doesn't seem unreasonable.
If people believed that this is the end of PoW the prices of GPUs would already be going down, because people would know that they have at most 7 months of run (until end of Q2) and that they'd be massive selling of graphic cards. I don't see it happening which means that either:
* miners don't believe the switch is happening that soon
* miners know they'll keep PoW with some other blockchain
* miners are gambling hoping that they'll still make profit
I've heard speculation that this "news story" is a result of Rapteoreum trying to hype itself up and convince people it's the next big thing. If you look at their website, their documentation is very sparse, they are a fork of Dash, and they are giving me shitcoin vibes.
The only new take here is that it calls this artificial demand. Instead of just demand.
It doesn’t say it directly, but it is interspersed throughout: Basically because the author is researching price manipulation in cryptocurrency, and proof of work demand is correlated to price, that chip production demand is artificially inflated.
The counterpoints are that
1) miners have a much lower cost of production than the cryptocurrency’s market price. Their selling and dilution is not enough to bring down the market price as new and recycled cryptocurrency supply becomes a lower and lower percentage of the existing supply. (Edit since rate limited: I didn't say or imply that was their selling had any point or purpose, only acknowledging it has little and decreasing effect on the market price)
2) Miners reinvest into newer hardware, and there is a predictable or computable time before they are able to. Euphoria in wanting to do this will be related to the market price but the market price isn't why they do it. It is only verrry recently that miners could attract outside capital as they became publicly traded and the crypto institutional investors got big enough to also offer lending. The crypto financing space is self grown over the last decade, with still very little buyin from outside institutions.
>1) miners have a much lower cost of production than the cryptocurrency’s market price.
Only true in the short term. In the long term the arbitrage opportunity closes to zero. So while investment and production bottlenects create profitable mining opportunities, this profit leads to more mining.
Any arbitrage opportunity eventually closes over time.
> Their selling and dilution is not enough to bring down the market price
That's not the point? Miner selling is not to bring down price, it's to pay electricity and silicon costs.
Bla, bla... 4% of global energy use.., bla, bla.. support me on Patreon. That's what passes for an HN front-page article nowadays?
Breeding cows is almost 3x the % energy consumed quoted [0] (admittedly, in greenhouse gas emissions, but who's counting, no?)
GPU market increased 20%+ YoY [1] to what I estimate being a ±400MM unit year; that's 80M GPUs at the 1/5 share quoted; assume an average of 6 GPUs per (retail) miner, that's 13MM miners; there are 2675 Ethereum nodes as of right now [2]; I call bullshit, again.
So again, why do people post this clickbait crap here? And why does it make the front page of HN? Because crypto? There's tons of other reasons for "because crypto", and I'd love to believe we're less gullible than that over here.
(of course, please let the downvotes flow to your liking, "because crypro")
The author's nowhere close to making a mindful argument between PoW and Pos, the whole article seems to be meant to drive people to Patreon based on some %s that should drive people mad. That's my point. It's a very polarised issue and I would expect more scrutiny and spider-sense here, precisely in your down-voting vein - at least you've put some thought, and steak(?) into it!
Another misleading article regarding PoW. There are two kinds of people here. The ones that think that crypto is pure speculation and a drug/criminal related technology hence is waste in any sense, and those who believe that crypto is solving something.
It's pointless to discuss the value of decentralization here for the first group, so I have no argument here.
For the second group, the ones that believe that crypto is solving something, I will remark that the only reason we are using blockchain is for its decentralized nature. For several reasons, PoW nature is way more decentralized than PoS. A big argument for PoW is that literally anyone can join the network by transforming energy into cash. On the other side, with PoS, the only way you can join the network is by buying a PoS token. You can't mine it if you don't hold the token before. That can be a problem for people based in countries that restricts crypto. At the same time, the players who hold the majority of the tokens have most of the mining power in PoS.
If we are willing to sacrifice decentralization, then we shouldn't be using blockchain as a data structure.
The fact that the governments have printed more money than ever added to the current inflationary rates over the last years makes me believe that its worth spending 2-3% of the world energy on a deflationary asset that is not in control of any person or government. Having a trustable currency is one of the most important aspects of modern society.
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[ 2.7 ms ] story [ 191 ms ] threadAt least that's what I think the parent is getting at. I would agree it's a bit of an obtuse analogy and doesn't necessarily apply to all of crypto as a whole.
In practical terms, the machine I'm writing this on is closer to cloud computing than the EVM is.
Ok, yes, that's fair. That doesn't totally negate the analogy, though. It just shows that it's a potentially inferior solution.
> In practical terms, the machine I'm writing this on is closer to cloud computing than the EVM is.
I think what the parent was getting at is the whole "cloud == someone else's computer" trope. Without knowing more details about the computer you're using to post on HN it's impossible to know but I think it's pretty likely you own the computer you're currently using. You wouldn't be using your employer's computer for non-work purposes, right? ;)
"The son shall not suffer for the iniquity of the father, nor the father suffer for the iniquity of the son."
I mean seriously, is this a real argument. Bitcoin is good because one person who got rich from it happened to be philanthropic? Where do you think that money came from? The answer is other "investors" who were told Bitcoin would make them rich. If the best justification for Bitcoin's existence is the Pineapple fund, Bitcoin must be the stupidest charity fundraising effort of all time, which is saying something.
The intrinsic value which Bitcoin provides is that it is as a currency, i.e. a way to transfer and store value. But as the Bitcoin detractors in this thread point out, it's value in this role is far outweighed by its costs.
Yes, it's a real argument against "There isn't a single redeeming quality about Cryptocurrency". I agree that not everything with cryptocurrency is good. In fact, I'd argue most uses today are bad, and only a few are good.
But I haven't argued for that everything about cryptocurrencies are good.
Remember; "Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize. Assume good faith."
And securing the network costs money in a proportional amount to the market price of the coin.
The network is no more or less efficient burning through 20% of the human race's energy output as it is burning 0.2% or 0.000002%.
It produces no additional transactions, no more or fewer coins. Just more waste product.
The first one is people who don't see any value whatsoever in cryptocurrencies. They typically say PoW is "waste" because they don't see value in the output, so there is no argument against them, as everything related to cryptocurrency is waste. It's largely a waste of time talking to these people, as they have made up their mind.
The second group are people who see maybe a bit of value or more in PoW. Since there is a hypothetical value, there is no "waste" as much as "use" of doing this hashing. They see value in having a cryptocurrency network, so even if it's wasteful, the greater good is more important for them. It's largely a waste of time talking to these people, as they also have made up their mind.
Seriously, even if you find value in Bitcoin, proof-of-work is unsustainable.
At current rates it's burning 0.5% of world energy. If price went to $300k it would end up burning 3% of world energy.
As the article notes, this is regardless of L2 solutions - energy use is purely a matter of market price.
This is actually a second problem of Bitcoin though - If in say 20 years it ends up being worth a lot, and gives very little mining revenue causing few people mine it, it becomes vulnerable to attack from nation states. Because the cost of a 51% attack is only a fraction of the possible rewards for a successful attack.
Unfortunately, there are second order effects. The miner reward is a constant selling pressure on Bitcoin, as miners must sell some of the rewards to pay for electricity and hardware. As Bitcoin gives off less and less rewards, this selling pressure reduces, which tends to increase the Bitcoin price (less supply for the same demand).
When humans trust each other again, Bitcoin and PoW will be obsolete.
What is trustless is the verification of transfers. Previously, entities had to come together in meatspace and agree how a transfer happen. Now, entities that have no idea about the other entities on the network, can send money between them without having to trust the network, as the network is incentivized to behave well.
Again, all the problems you listed have nothing to do with "trustless" cryptocurrencies, but everything to do with humans. Cryptocurrencies don't try to solve those problems, and wouldn't be able to either.
I transferred money to somebody else last night despite never having met them, virtually or in meatspace or whatnot--I used a credit card to buy something.
That's sort of the issue with the trustlessness of cryptocurrency: it "solves" issues in the financial that are already practically solved for billions of people.
Great! In the context of the discussion, that transfer wasn't "trustless", you have bunch of contracts setup and more to support and make sure the transfer is trusted and OKed.
> it "solves" issues in the financial that are already practically solved for billions of people.
Yes, bank transfers and credit cards works for a lot of people. But there are tons of people who cannot use those, what about those people?
Have you ever tried to send money from Nigeria to Ecuador? It's a hassle, especially when you deal with a larger amount. Your transfer is gonna get stuck in the fraud-department at some entity you never heard about, simply because the transfer is coming from Nigeria.
Instead, doing the same transfer with cryptocurrencies took about 1 minute to enter the details, and 5 seconds for finality of the transfer, and it's done.
when's the last time you or anyone you know handed off large chunks of cash to strangers for the purpose of delivering that money to someone else?
noteably without trust - that means no insurance and no legal contracts.
Every time you do a bank transfer that is exactly what happens
It is not a matter of trust but one of understanding. People need to react to their motivations and incentives, and one must take that into account when interacting with other people.
https://ethereum.org/en/eth2/merge/
The price of (demand for) GPUs is strongly correlated with the market price of Ethereum. The Economist, June 2021:
https://www.economist.com/graphic-detail/2021/06/19/crypto-m...
Today, just like in 2018, we can see the price of Ethereum reflected in Nvidia's stock price. When Ethereum moves to proof-of-stake, mining GPUs will flood the market and demand for new GPUs will no longer be tied to the cryptocurrency bubble.
The added benefit is that my laptops get cheaper.
Don't kid yourself, it won't slip forever.
This is going to happen, soon.
Plus, I'm not convinced that the transition will go entirely smoothly. Obviously it would be in miners interest to prevent the POS transition, and if there's a bug or problems with the new chain I could totally see a fork or political pressure to delay things further (I don't think either is likely, simply possible).
I wonder how many Ethereum developers it takes to change a lightbulb...
Or maybe it's monopoly money, but critics always like to have it both ways, don't they. It's real when poor victims are losing it, but fake otherwise. It's all pretend, except when something goes wrong, then the teams running it are suddenly irresponsible.
I thought HN was supposed to be better than that. Changing the tweet length on Twitter is hardly just changing the column limit, there is so much more work behind the scenes. At least with Ethereum you could (if you're interested, doesn't seem like you are) see all the changes they had to go through in order to get that change on the network.
Either Ethereum devs are the dimmest minds in the industry or there is something seriously wrong at the foundational level of the Ethereum code itself.
Welcome to the club :)
> I worked on a project worth half a billion $
Wow!
> With a far smaller team...
There you go! Of course it's easier to change stuff when the scale is smaller. The difficulty of implementing something scales with the number of people working on it. If you're just one person (or a small team), changes are easy to work through. But if you're 100+ developers, multiple foundations and also private companies, even changes that are small will take a long time to go through the process.
> Either Ethereum devs are the dimmest minds in the industry or there is something seriously wrong at the foundational level of the Ethereum code itself.
Taking long time to change the core protocol is by design (it's a feature, not a bug), so everything is working correctly.
In that case, I hope it takes over 100 years to implement sharding, then at least the suckers who invested in Ethereum will rest in peace knowing that at least it met their decentralization needs after some other project has taken over the world.
But hey, you've already made up your mind so there seems to be little to no value of us even talking with each other.
It's pretty clear that Ethereum's team has a chronic problem with overly optimistic forecasting.
Well, from the perspective of Ethereum, they will, since Ethereum will no longer be PoW...
> Because there won't be a hard fork from miners who would rather have PoW.
There might be, or they might use Ethereum Classic. That's all fine, the second biggest network (Ethereum) will still be PoS so they can do whatever they want.
Children develop object permanence by the age of two. How long does it take for cryptobros to develop GPU permanence ? You closing your eyes doesn't make the problem go away.
Are you suggesting we should destroy the GPUs that were previously used for Eth mining?
It is safe to say that it won't come anywhere near close to where normal Ethereum is in terms of mainstream adoption.
[1] https://www.coindesk.com/markets/2020/08/29/ethereum-classic...
[2] https://coingeek.com/over-1m-double-spent-in-latest-ethereum...
Ethereum is not really a shitcoin though, unless you consider all cryptocurrencies shitcoins. Many tokens are implemented as ERC-20s (including most relevant stablecoins), other chains target EVM compatibility to drive developer adoption, majority of the NFT boom has been in ERC-721 NFTs on Ethereum, and traditional companies are now building L2s on top of Ethereum tech (PwC, Reddit).
Ethereum blockchain is pretty fundamental to much of what is happening in crypto aside from pure NumberGoUpism. Miners can hard fork ETH if they want to, but I doubt they will. All those dollars held in stablecoins will determine which chain has validity, and I doubt USDC/DAI/RAI/GUSD would go along with a miner cashgrab fork again Vitalik...
dingdingdingding! There is nothing useful done with Eth today, aside from quick money grabs.
Also when they switch to pos how do they transfer your coins over?
Compare that 50 GB/s of the M1 Max to 760 GB/s of an RTX 3080. Then check prices. Even after ridiculous scalping markups, the RTX 3080 will still be cheaper.
Ethereum was conceived to be ASIC-resistant from day one. They even considered making the coin resistant to GPU-mining but then changed their mind.
It's not that hard to be ASIC-resistant and seen that ETH GPU miners are still profitable to this date, they obviously succeeded in preventing ASICs from being economically doable to mine ETH.
> Also when they switch to pos how do they transfer your coins over?
Ethereum is already on PoS, but partially. At the moment mining is going on both chains: PoW and PoS. In a few months it's going to be PoS only. All the coins from the "old" PoW-only chain will still exist and be usable on the PoS-only chain.
This could have driven some very interesting developments in the CPU space, mostly in the memory interfaces.
It's intentionally designed to be memory-hard so that ASIC implementation is more difficult. Lots of people in the cryptocurrency world consider ASIC mining to be a misfeature, because it centralizes mining among firms that have the capital to do chip development. Litecoin's entire reason for existence is "Bitcoin, but can't be mined by ASICs".
"Also when they switch to pos how do they transfer your coins over?"
There's already a beacon chain running Ethereum proof-of-stake. Think of this like a dark launch for web tech - basically you run the new infrastructure in parallel with the old infrastructure, make sure it's stable, get everybody adopting it, and then cut over the UI to use the new infrastructure.
There's a one-way bridge that ports state over from the PoW chain to the beacon chain. Think of this as a double-write layer; all new transactions get written both to the PoW and PoS chains.
In early 2022 "The Merge" happens. This takes the form of the "difficulty bomb" - basically, Ethereum mining will get exponentially harder and eventually unprofitable until all the existing miners turn off their machines and switch to PoS, at which point there will be no point to mining Ethereum and no point to writing transactions to the PoW chain.
Will PoS lead to a run on other resources like hard drives?
It could potentially lead to a run on Ethereum. The resource used in PoS is the cryptocurrency being secured itself. Basically, you agree to lock up a certain stake when you run a validator, and forfeit it if it's found that your validator "cheats". By doing this, you make cheating unprofitable - there's a financial incentive to catch cheats, and a financial disincentive to cheat, and the cheaters eventually go bankrupt (or end up on their own isolated chain where nobody transacts with them).
The financial effect of this is that a bunch of Ethereum gets locked up and illiquid. Instead of miners receiving Ethereum which they want to sell for dollars to run their hardware, stakers lock up Ethereum and effectively receive interest. This reduces immediate supply within the market. I'm wondering if a lot of the recent price movement is in anticipation of this.
Also does eth supply increase forever or does it have a hard coin limit like btc?
Currently no hard cap on issuance, 2 ETH are minted every block, but ETH burn rate is expected to outpace issuance post-POS.
For most of its history Ethereum was inflationary. It flipped and became deflationary a couple months back, and not coincidentally the price started rising again. It's likely to be significantly deflationary under Eth 2.0 with expected transaction and staking volumes.
"with more than 99.6% probability, an adversary with 0.09% of total stake is in a position to execute a 1-reorg for any given day."
Another which could prevent the chain moving forwards indefinitely.
"an adversary controlling 15% of stake can stall PoS Ethereum"
https://eips.ethereum.org/EIPS/eip-4345
The recently discovered attacks are pretty bad and the mitigations are band aids.
* miners don't believe the switch is happening that soon
* miners know they'll keep PoW with some other blockchain
* miners are gambling hoping that they'll still make profit
Maybe all 3?
Miners earn 2 ETH every 15 seconds.
Crypto Miners Driving High Demand for AMD CPUs with Big L3 Cache https://www.extremetech.com/computing/328908-crypto-miners-d...
:(
It doesn’t say it directly, but it is interspersed throughout: Basically because the author is researching price manipulation in cryptocurrency, and proof of work demand is correlated to price, that chip production demand is artificially inflated.
The counterpoints are that
1) miners have a much lower cost of production than the cryptocurrency’s market price. Their selling and dilution is not enough to bring down the market price as new and recycled cryptocurrency supply becomes a lower and lower percentage of the existing supply. (Edit since rate limited: I didn't say or imply that was their selling had any point or purpose, only acknowledging it has little and decreasing effect on the market price)
2) Miners reinvest into newer hardware, and there is a predictable or computable time before they are able to. Euphoria in wanting to do this will be related to the market price but the market price isn't why they do it. It is only verrry recently that miners could attract outside capital as they became publicly traded and the crypto institutional investors got big enough to also offer lending. The crypto financing space is self grown over the last decade, with still very little buyin from outside institutions.
Only true in the short term. In the long term the arbitrage opportunity closes to zero. So while investment and production bottlenects create profitable mining opportunities, this profit leads to more mining.
Any arbitrage opportunity eventually closes over time.
> Their selling and dilution is not enough to bring down the market price
That's not the point? Miner selling is not to bring down price, it's to pay electricity and silicon costs.
Breeding cows is almost 3x the % energy consumed quoted [0] (admittedly, in greenhouse gas emissions, but who's counting, no?)
GPU market increased 20%+ YoY [1] to what I estimate being a ±400MM unit year; that's 80M GPUs at the 1/5 share quoted; assume an average of 6 GPUs per (retail) miner, that's 13MM miners; there are 2675 Ethereum nodes as of right now [2]; I call bullshit, again.
So again, why do people post this clickbait crap here? And why does it make the front page of HN? Because crypto? There's tons of other reasons for "because crypto", and I'd love to believe we're less gullible than that over here.
(of course, please let the downvotes flow to your liking, "because crypro")
[0] https://www.fao.org/news/story/en/item/197623/icode/
[1] https://www.businesswire.com/news/home/20211110005748/en/202...
[2] https://ethernodes.org
/s
The author's nowhere close to making a mindful argument between PoW and Pos, the whole article seems to be meant to drive people to Patreon based on some %s that should drive people mad. That's my point. It's a very polarised issue and I would expect more scrutiny and spider-sense here, precisely in your down-voting vein - at least you've put some thought, and steak(?) into it!
It's POP. proof of paperclips.
Just invest in my paper clip maximizer.
https://www.lesswrong.com/tag/paperclip-maximizer
That's highly surprising to me. Have they gone the Cerebras way?
The Cerebras way could be used for Ethereum PoW, at least for now - on-wafer interconnects can be insanely dense and fast.
It's pointless to discuss the value of decentralization here for the first group, so I have no argument here.
For the second group, the ones that believe that crypto is solving something, I will remark that the only reason we are using blockchain is for its decentralized nature. For several reasons, PoW nature is way more decentralized than PoS. A big argument for PoW is that literally anyone can join the network by transforming energy into cash. On the other side, with PoS, the only way you can join the network is by buying a PoS token. You can't mine it if you don't hold the token before. That can be a problem for people based in countries that restricts crypto. At the same time, the players who hold the majority of the tokens have most of the mining power in PoS.
If we are willing to sacrifice decentralization, then we shouldn't be using blockchain as a data structure.
The fact that the governments have printed more money than ever added to the current inflationary rates over the last years makes me believe that its worth spending 2-3% of the world energy on a deflationary asset that is not in control of any person or government. Having a trustable currency is one of the most important aspects of modern society.