just doesn't make sense to me. There are far, far more energy intensive operations that we do daily. Think about how much energy is 'wasted' playing video games, yet nobody balks at that.
Are you saying that people playing video games are more energy intensive than literal warehouses full of GPU's running 24/7 mining ethereum? Nobody talks about that because it's a horrible comparison.
Miners make a profit, otherwise they wouldn’t do it. If you can suddenly double your hash rate without changing your power consumption there’s no reason why you wouldn’t do that. You’re incentivized to maintain or grow your power consumption to make more or the same amount of crypto per kWh.
If you’re a miner, and you’re able to halve your power consumption without sacrificing any hash rate, you’re absolutely going to double your processing capacity to maintain your original power consumption, because it makes you more money.
A cab driver can’t do twice as much driving if they double their vehicle’s energy consumption.
my gut feeling is that the blockchain is more energy intensive. but i am curious how much energy is consumed by a global online multiplayer game like fortnite or similar.
Does one person playing a game on their PS5 for a few hours a day really have the same footprint as one crypto miner running a swarm of several hundred or even thousands of GPUs for the same period of time (ignoring the reality that those things are mining 24/7)?
I don't really know how you can equate the two and also say that an individual person has no incentive to keep their househould energy costs at a minimum. Especially when you consider the socioeconomic status of the average gamer or their family, compared to the average owner of a crypto mining enterprise.
One-on-one I have no idea which is bigger energy cost, but last time I tried to do a Fermi estimate, it looked like gaming collectively was similar to crypto collectively.
But I agree with you that individual gamers have the same general incentives from a need to reduce household electricity bills.
Do you think there are more GPUs running Ethereum than the total addressable market of gamers multiplied by hours played?
There are thousands of Ethereum nodes. It was as high as 12.5k earlier this year estimated [1]. Meanwhile, on November 29th, there were 27 million simultaneous people playing on Steam alone [2].
Even if you multiply the peak number of Ethereum nodes by every hour in the entire year, that still only hits ~100,000.
The comparison changes when you look at them in aggregate, so if we want to see how they stack up in terms of energy consumption, it would probably be useful to see how many gamers it would roughly take to use the same amount of energy as the person running a full scale crypto mining operation.
After that there is the subjective analysis about what we get out of those in terms of value since, externalities aside, you can't compare gaming as an activity vs. the activities that require crypto. I'm sure there are plenty out there who would claim that video games are a net loss to society the same way many folks think that about crypto.
Personally I think this is just the next in what will be a long line of trends as wealth consolidates upwards and the people attaining it keep looking for new and novel ways to spend or invest.
That's the point though. 27 million people playing on Steam alone is not comparable to 12.5k Ethereum nodes as a direct comparison.
When you think about it, it's kind of wild that a system with only 12.5k nodes (plus other chains with presumably similar sizes) is using comparable levels of energy to an activity that is satisfying (at least) 27 million people simultaneously before we even factor in other platforms like consoles. I don't think that's really a comparison crypto-propononets should be proud of.
It's a bit like if a local restaurant chain cost an obscene amount of money to run, and the owners try to play it off to their stakeholders by saying, "well, the entire global McDonald's franchise costs more to run when we look at the raw numbers."
Some rich dude spends $300k on physical security. That hires 3 guys with guns that are at his side at all times. Suddenly, due to bad business decisions, rich dude has 500 people that want to see harm come to him. Those 3 guys are not going to cut it! He need to hire 300 guys (at least!) to protect him!
Arguments against energy usage are saying "You dont need to hire 300 guys! That is a waste!". Well, no, it is actually highly rational from the perspective of rich dude.
Energy is Security. How much is enough? When you can outspend your adversary.
If you're arguing that the energy usage of cryptocurrencies are justified because they provide security, that's a different argument than that they're equivalent to the energy usage from games.
They're not, those security guards you're hiring have an outsized impact on the environment. Argue that the impact is justified if you want, but don't pretend it doesn't exist or that it's comparable to the energy output of much larger systems that service more people.
Cryptocurrencies on proof-of-work chains use a massive amount of energy; when you break down the energy-to-output, it dwarfs other systems like traditional gaming. The argument that cryptocurrency energy usage is the same as gaming usage really kind of flies out the window when you say things like "energy is security."
I mean, that's a pretty big difference between cryptocurrency and gaming. In gaming, we don't feel better about the ecosystem or more secure specifically because we're spending more energy, the energy is not security for us.
Eh, I don't think it's the same. People don't run games on warehouses of GPUs 24x7. They boot up games for a couple of hours and then turn them off.
A big reason why these comparisons fall flat is because the only way people can make gaming and crypto energy use look the same is by comparing a niche activity to a mainstream one. Gaming overall takes up a lot of energy because a lot of people do it. When we ignore that fact and only compare the global numbers then NFTs look a bit better than they should, they look like they're maybe competitive by some metrics. But that's because they're an incredibly niche product with double-digit transaction fees that people don't really spend much time interacting with.
When we break things apart into a per-person comparison, there's basically no way I've been able to find to make proof-of-work energy usage look good. Just think about it from a purely physical perspective, every transaction on the blockchain uses GPU time spread across multiple actors. Of course that uses more power than a single person's GPU running for their own personal gaming system. Distributed systems pretty much always use more power because they duplicate work.
We know this, it's the entire foundation of proof-of-work systems, they're impossible for a single actor to keep up with and that's why they have security guarantees. But the other side of that is that a distributed network of multiple GPUs that needs to be run for every chunk of transactions on the chain is of course going to be more expensive per-transaction then the equivalent "play-session" of an individual playing a game.
Maybe if everyone did their gaming on Google Stadia the comparison would be more accurate (although even there I bet Google's less-decentralized system would still probably be more efficient than a network of GPUs duplicating the same work). But that's not the case right now, most GPU work for graphics for games are happening locally, and those GPUs get powered down afterwards. There's no way someone playing a Switch for an hour is using the same amount of energy as an NFT transaction.
Transactions don't consume energy. If everyone suddenly stopped making transactions, miners would still be there, running their machines to mine empty blocks.
So thinking in terms of "energy per transaction" is wrong, you should look at total consumed energy by mining industry as a whole and compare it to other industries energy usage also as a whole.
> If everyone suddenly stopped making transactions, miners would still be there, running their machines to mine empty blocks.
That's worse, not better. What you're telling me is that a gaming "transaction" doesn't make sense as a comparison because Ethereum never stops making transactions.
In which case... yeah, a person who's invested into video games is unquestionably doing something better for the environment than someone who's invested into NFTs on a proof-of-work chain, because the person playing video games has the ability to turn their console off when they stop playing.
A system that requires miners to run their GPUs 24x7 is worse for the environment than a system that requires you to run a GPU just for an hour or two.
I was not talking about better or worse, I was pointing out the flawed way to compare crypto mining energy usage with other industries.
>In which case... yeah, a person who's invested into video games is unquestionably doing something better for the environment than someone who's invested into NFTs on a proof-of-work chain, because the person playing video games has the ability to turn their console off when they stop playing.
The issue is energy consumption, not the moral feel goods of the gamer. It doesn't matter if you can turn off the gaming console if all the consoles as a whole consume more energy than mining.
> if all the consoles as a whole consume more energy than mining.
It does matter if you're advocating for mining and chain capacity to scale to the point where it can replace a financial institution. If proof-of-work chains are putting out the same amount of energy as the total energy expenditure of gaming right now as a niche system that isn't used by most people for daily transaction or as common assets, then proof-of-work chains are not an environmentally feasible solution at scale.
If your niche product uses the same amount of energy as one of the largest global entertainment mediums on the planet, then your niche product isn't scalable or environmentally friendly. Because you're going to keep adding more miners as you scale, as new chains are built, as mining becomes more competitive, and the problem is going to keep getting worse.
Looking at total energy expenditure and ignoring the actual amount of usage that energy expenditure allows is just a flawed way of thinking about these comparisons. Use some other substitute for transactions if you don't like thinking about playtime or sessions, but any comparison that takes usage into account is going to conclude that cryptocurrency is heckin inefficient: more inefficient than other technologies like games.
>If proof-of-work chains are putting out the same amount of energy as the total energy expenditure of gaming, then proof-of-work chains are not an environmentally feasible solution at scale.
Chain capacity does not scale as new miners are added. Bitcoin/Ethereum does not consume more energy as more people use it.
>Looking at total energy expenditure and ignoring the actual amount of usage that energy expenditure allows is just a flawed way of thinking about these comparisons.
Not really, you're trying to include subjective value into the simple issue of wasting energy. From my point of view, videogames are less important than having a decentralized monetary system. Now what?
> Bitcoin/Ethereum does not consume more energy as more people use it.
Eh... you are correct that capacity is separate from the number of miners. You are incorrect that the number of miners don't increase as chains get more attention, and incorrect that miners don't increase as new chains get created.
Somewhat worse, we're both kind of glossing over the fact that mining cost/profit is what puts a limit on the number miners more than anything else including demand. That means that widely available cheap electricity becomes something of an impossibility under this system because as electricity gets cheaper, more mining operations get set up. As coins go up in value, the cost/benefit of mining changes, and more miners get set up.
There isn't really a version of this world where coins become tremendously valuable or renewable electricity becomes cheap and widely available, and we don't have any new miners entering the system. In fact, quite the opposite, the system relies on that not happening -- if electricity and GPUs get too cheap, the network has to scale or it becomes vulnerable to attacks from rich actors.
> videogames are less important than having a decentralized monetary system. Now what?
What's now is that you haven't got a decentralized monetary system, all of it has been a pointless waste.
Bitcoin's fees are too high for normal transactions and the transaction speed is too low, the Lightning Network hasn't really worked out the way people hoped it would and has helped re-centralize parts of the chain and make it less secure. The ecosystem is fragmented because people fork chains when they're not high-enough capacity and build new ones, and the vast majority of Bitcoin holders are treating Bitcoin as a speculative asset, not as a daily currency -- which the government has bowed to and now recognizes for the purposes of tax returns, making the 'currency' wildly complicated to use legally as a normal transaction method.
Far from being a general-purpose asset, NFTs commonly have double-digit transaction fees to work with or mint, making them unsuitable for the vast majority of artists who are interested in them. They're plagued with copyright issues and asset theft, which has demonstrated that these so-called decentralized systems actually rely a lot on traditional centralized power-structures like governments to force legal norms and to prevent scams. And half of your community is running around saying things like "energy is security", which really does not bode well for the future of blockchain or the environment.
So you've spent all of this energy and wasted all of this power and you didn't even get the subjective thing you wanted out of it. At least the rest of us can actually boot into Crysis today with our GPUs.
Bitcoin is a decentralized monetary system. Nobody controls it, nobody can print new bitcoins out of thin air, nobody can confiscate your bitcoins as they could from a bank account. The fees are quite low, considering that you can securely transact hundreds of millions of dollars of value for the cost of about $1.
And I don't understand how does LN centralize the chain. Who gets more control and what exactly can they do with that control? Can they print more bitcoin? Can they seize funds? Can they censor your transactions? No.
>Far from being a general-purpose asset, NFTs commonly have double-digit transaction fees to work with or mint, making them unsuitable for the vast majority of artists who are interested in them
So they are beneficial only to a subset of artists, not all of them. I can live with that.
upd:
>There isn't really a version of this world where coins become tremendously valuable or renewable electricity becomes cheap and widely available, and we don't have any new miners entering the system. In fact, quite the opposite, the system relies on that not happening -- if electricity and GPUs get too cheap, the network has to scale or it becomes vulnerable to attacks from rich actors.
This can be said about any industry that has to consume energy to create profit. All the actors compete for energy and try to outbid each other, eventually finding an equilibrium. The solution is to get more energy, so that there is enough both for mining and for videogames.
> And I don't understand how does LN centralize the chain.
It takes transactions temporarily off-chain making them more vulnerable to attack. Lightning Network is a system where the blockchain congestion is eased up by doing fewer things directly on the chain. It's also had a nontrivial number of privacy issues, some of them solvable but at least a few only solvable by expecting people to make lots of pools, which drives up transaction cost again, which kind of defeats the point. That decreased privacy guarantee feeds into fears about centralization and censorship.
The irony behind all of this is that systems like Lightning and even Bitcoin itself are kind of ripe for censorship. The blockchain maintains your entire transaction history immutably in public, and the only thing protecting you from having all of that leaked is if you use pseudonyms or mixers (again, increasing transaction fees and congestion) to transact on it. But then when you start reporting that stuff on taxes... it just becomes way easier than it should be to track people.
This is also something coming up a lot with NFTs, it turns out that censorship and centralization is about more than where your database gets stored, it's also about which exchanges will work with you and who will haul you into court.
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> So they are beneficial only to a subset of artists, not all of them. I can live with that.
Right, but I think the point is still that the rest of us aren't fine with y'all spending the equivalent of an entire worldwide entertainment industry's worth of power just to benefit an extremely tiny subset of the population, and that we see that as a very different outcome from decentralized finance.
You can bring up Bitcoin's benefits if you want, but it's not being used as a currency though by most people. It's not a financial system, it's a decentralized asset that people are speculating about. And maybe that is subjectively valuable to you, but it's not serving as a currency for most people, and maybe it's not good for a tiny subgroup to argue that their interests should be given equal resource budgets to activities that are accessible and useful to the majority of the world?
If the majority of the world was using Bitcoin, we might be having a different conversation, and we could potentially argue about whether the benefits of a decentralized financial system outweigh the downsides. But you don't have a dencentralized financial system, you have a set of assets that are being taxed as assets by the IRS, and that aren't really benefiting most of the world outside of some speculators.
Transactions on LN are almost as secure as regular transactions onchain. There is no centralized party involved that you have to trust, to use LN. The funds just get locked on a multisig UTXO and can be unlocked at any moment by broadcasting an onchain transaction. This is more than enough, considering that LN is only needed for small purchases.
The privacy is also better with LN, since nobody but the recipient of the funds knows that you sent them money - LN routing is similar to onion routing that is used in TOR. The node that you are connected to, knows that you're sending money, but doesn't know the recipient. The last but one node knows who is the recipient but doesn't know the sender.
Despite the public ledger, I find blockchain much better for privacy than having to trust my credit card details with actual PII to various companies.
>And maybe that is subjectively valuable to you, but it's not serving as a currency for most people, and maybe it's not good for a tiny subgroup to argue that their interests should be given equal resource budgets to activities that are accessible and useful to the majority of the world?
I don't think that it matters, but it's not a tiny subgroup of people anymore. I think it would even be comparable to the amount of PC gamers worldwide.
The fact is that crypto miners are paying for the energy that they are consuming on the free market, but for some reason, they are criticized for that, unlike other industries.
Gold is quite similar to crypto. It is used as a financial asset (Bitcoin) and as a luxury item (NFTs) which makes up most of the usage of Gold. Gold mining also consumes much more energy than Bitcoin mining, but nobody seems to be upset about it or really care.
Same goes for various entertainment industries, including videogames. Does anyone care that gamers consume X amount of energy for their entertainment? No, because that's not what people normally do. But when it comes to crypto, it's all double standards.
> Transactions on LN are almost as secure as regular transactions onchain
Almost being the key word there.
> LN routing is similar to onion routing that is used in TOR.
You should look into this more, not all routing on Lightning Network goes over Tor today, I think the highest numbers I've seen are around 50%, although maybe it's grown a bit since I last checked. And importantly, every hop in a Lightning Network transaction needs to be paid. I have heard so many people talk about Lightning Network multi-hop transactions or disposable channels like they're a silver bullet for privacy while failing to point out that all of these privacy mitigations cost extra money and there's a strong incentive for users not to pay extra for privacy.
> I find blockchain much better for privacy than having to trust my credit card details with actual PII to various companies.
I've experimented with crypto exchanges, and I had to provide them all with a frankly obscene amount of PII to set up accounts. For the mainstream average user who isn't exchanging coins in private or setting up their own exchanges, moving money into and out of the system using popular providers requires giving up a ton of data. And importantly, when you do give up that data it's then associated with a wallet that you transact with on that exchange, which the exchange can then use to track all of your coins that you associate with that wallet.
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> I think it would even be comparable to the amount of PC gamers worldwide.
I promise you this isn't the case, take a look at the average concurrent users on Steam -- not even just the number of people who have an account, the number of people actively playing games at the same time at any given moment. And that's before we ever factor in other PC storefronts, or consoles, or mobile phones, or web games. Zero chance that the number of people using cryptocurrency is the same as the number of people who play games. Zero chance that it's even the same as only the number of people who play PC games, even if we ignore the rest of the market.
And remember, if you do ignore the rest of the gaming market, the energy comparison between cryptocurrency and gaming starts to look a lot worse because PCs only make up a portion of the gaming power consumption you're trying to compare to.
> Gold mining also consumes much more energy than Bitcoin mining, but nobody seems to be upset about it or really care.
Er, no. People are upset about mining, particularly in environmental movements. No one is really giving gold a free pass. See also diamonds. This stuff gets criticized all the time, evil unethical mining is practically a media trope at this point.
> Does anyone care that gamers consume X amount of energy for their entertainment? No, because that's not what people normally do.
Okay, so first of all, people also do care about this, it's a strong motivator behind efforts to make consoles more power efficient and to work on power consumption and battery life. It also plays pretty heavily into the right to repair movement. Both Microsoft and Sony have gotten criticism over broken low-power modes in their consoles, and practically every piece of hardware in a modern gaming setup will be looking at energy standards during its production.
But second of all, it's not a double standard to say that one of the largest entertainment industries in the world is allowed to consume more power than a niche currency that isn't being used as a currency by most people -- because again, it is servicing more people. If I and 3 other people go out and start driving around in a new automobile that spits out the equivalent carbon of the entire rest of the transportation industry, we can't point at the entire rest of transportation industry and say, "see, transporting millions of people uses the same amount of energy as transporting the 4 of us, so it's just double standards to criticize us over our energy use."
1. Payment for LN per "hop" costs about 1 sat. It's hilariously small, so no, it doesn't disencentivize anyone from using it. And best of all, the privacy doesn't depend on large anonymity sets, so you don't need everyone to use large multi hop payments to make yours private.
2. There are plenty of no KYC exchanges and there is Monero, if you care about privacy so much. I'm okay with law enforcement tracking down my transactions and requesting info from exchanges though. What I'm not okay is when I trust my CC info to companies (because there is no other option) and then that data gets leaked. Wouldn't have happened if I used crypto and all they got was some wallet address with inflows from an exchange.
3. Number of active Steam users is 120 million [0]. Number of Bitcoin owners is 106 million and total number of crypto owners is estimated to be 300+ million. 5% of Europeans own Bitcoins. [1]. Looks comparable to me.
1. This is a very incomplete picture of the Lightning Network. Node fees aren't set in stone, operators can charge whatever they want (and if you want to have a profitable node, you're going to have to charge more than the base rate). At best I can find stats online saying that the median base fee for a node is around 1 sat[0]. I can't find anything indicating anything better than that, or that fees would be locked to that amount. And again, this is all kind of a pointless debate because:
A) The Lightning Network only avoids fees by grouping transactions, and large long-lived channels that group tons of transactions tend to be discouraged by most privacy advocates I see online. It's recommended to use multiple short-lived channels at which point you are dealing with blockchain fees again. By the by, blockchain fees are not usually under $1 by any metric I can find[1]. The fees that I'm seeing here are pretty bad unless you're spending a lot of money, which... generally reflects the usage of bitcoin as an asset people sit on rather than spend.
B) Even if Lightning Network was great and good privacy and not vulnerable to closed channels or other attacks because of being off-chain, it's also tiny and unprofitable, and it's not where the majority of cryptocurrency is happening. Dig a bit further into the stats I linked above, the entire network capacity of Lightning Network is $159 million. That's... not enough for a financial system. But it's OK, because it'll scale, right? Except no, because when we dig into it deeper, it's often unprofitable to run nodes, and the network right now is being operated on some levels as a volunteer effort to keep transaction fees low.
So even if we take the premise that Lightning Network is totally private and secure, which it's not, it's still not really being used that much in comparison to other financial systems, which brings us back to the original question, by what measure is this a competitive currency with traditional fiat? It doesn't have the usage numbers or capacity to back that claim up.
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2. Lots to unpack here. Coinbase is still one of the most popular traders in this space even after multiple complaints about seizing funds, and Monero solves zero of those problems because the problem is the exchange itself, not the coin. Coinbase is still one of the most popular traders despite the fact that it's literally withheld funds and stolen people's money before, which means the one thing cryptocurrency was designed to do it's not even doing, people can still have their money seized. That other exchanges exist means very little to me if the average/median user is still interacting with a centralized exchange. Again, Monero doesn't really solve that problem.
Coinbase is not a government agency and can do whatever it wants with your data. Bear in mind that some of the biggest investors into the cryptocurrency space are people like Jack Dorsey and companies like Paypal. I find it very hard to believe that there's not going to be commercial corporate monitoring of people's transactions given the history of everything else the investors have ever created.
Finally, the "Bitcoin is more secure" argument seems very hard to back up to me. I think all you really need to do is look at the NFT space to see that scams/attacks are a lot more common than cryptocurrency advocates like to pretend. And remember that when your money gets stolen you either rely on a centralized authority to get it back, or you don't get it back. For the average user, this is a decrease in security.
I'm no fan of credit cards, but credit card transactions can be reversed as a security measure to prevent fraud. The average user wants to be able to get their money back if someone scams them, because scams/phishing/etc are just as much of a threat as anything else. Additionally, we have to go back to the point that the average user of cryptocurrenc...
The fact that other activities waste energy doesn't mean NFTs aren't wasteful. It means that there are two wasteful activities.
You cannot argue that the relative merits of two bad things makes one of them good, or even "not bad". That's not how anything works. Objectively bad things are always going to be bad no matter what else happens.
Energy usage of ETH would've been exactly the same whether those artists or anyone else created NFTs.
So the comparison with gaming is not really correct. Playing PS5 consumes energy in a direct way. Creating an ETH transaction doesn't consume much more energy than vising a website.
Money laundering, speculation, pyramid schemes and pushing terrible ideas about ownership can be achieved without crunching a bunch of numbers to find low hashes or whatever.
The kind of video gaming that has you burning 300W with your GPU is hard to achieve in a different way.
It is a weak argument though and I think it's frustrating how prominently people make it rather than the much more important "it's bad to propagate scarcity based ownership structures to a domain where scarcity need not exist".
This is the cost of decentralization (proving ownership through solving hashes).
A central authority being the source of truth will be cheaper since only one entity needs to verify. Will the cost of proving ownership through decentralization ever be cheaper than 1 single authority doing it?
Exactly, but there is a cost to find out if "blockchain decentralization" is worth the cost.
Right now, proving ownership through decentralization costs more than one single entity doing it. But if decentralization systems proliferate, then we can see if the extra cost of decentralization is worth it.
In industries where this extra cost is not worth it, decentralization probably won't exist. In industries where one single authority has too much say and power, users will be willing to pay the cost of decentralization. Payments, in my opinion, is the best example since Mastercard and Visa have such a stronghold on how you can make or take payments online. In an industry like that, users will pay a premium.
I don't think blockchains meaningfully decentralize anything, the state still has a monopoly on force and anything they enable can be achieved in other ways and ultimately is bounded by the same state. The important bit is the interface between society and blockchains, the actual properties of the blockchain tech are kinda irrelevant.
Do you honestly think that Visa and Mastercard wanna prevent people from using their services to buy porn for example? They don't give a shit, they want money, the state, the people with the monopoly on force are the ones who create the circumstances that put that pressure on Visa and whoever else. If bitcoin mattered enough it would face the same fate (and I think it's clear that's the way it's headed). Crypto isn't somehow immune to the fact that we live in a society.
Mainly blockchain tech just provides a vehicle to obfuscate financial machinations. Much of the value of blockchain tech comes from it's viability as a financial tool that's abreast of regulations to prevent abuse. Broadly it's a zero or negative sum game, the value comes from other people losing value. We shouldn't allow systems like that.
I mean, theoretically a people could overthrow its government at any moment simply by virtue of outnumbering it. Even if the military technically outguns a militia consisting of every single citizen, they are usually fairly hesitant when ordered to shoot to kill their own people[0].
The dream of crypto libertarians isn't to eliminate the monopoly of violence but to get into the position of controlling it, or at least be exempt from it. A monopoly of violence doesn't work because it's a literal monopoly, it works because it is recognized and under capitalism the recognition is largely based on money.
Crypto currencies can be regulated, sure, but the goal of web3 isn't simply to have thousands of coins to speculatively invest in. The long goal of web3 is to move all public records (and really all documents controlling ordinary people's lives) on-chain so that "smart contracts" on the chain can supersede actual law by automated enforcement. Having extreme wealth (and thus controlling a significant share of the consent) can still exempt you from the negative effects but if smart contracts can shape reality because all software obeys them, you can effectively write your own laws.
[0]: A lot of US police training involves drawing explicit conceptual distinctions between LEOs (sheep dogs), civilians (sheep) and criminals (wolves), with civilians being potential criminals or "wolves in sheep's clothing" and being prone to "mistaking sheep dogs for wolves" because they're a bit dim. Military training on the other hand usually reserves this kind of in-group/out-group dehumanization for people from different countries (with drone strikes infamously counting unidentified casualties as presumed enemy combatants if they're "of fighting age").
>> Do you honestly think that Visa and Mastercard wanna prevent people from using their services to buy porn for example? They don't give a shit, they want money, the state, the people with the monopoly on force are the ones who create the circumstances that put that pressure on Visa and whoever else.
If the government doesn't want these industries, why not just ban them? Why make businesses jump through hoops to accept payments and pay higher fees? And don't forget, if your company is big enough, Mastercard and Visa will work with you. Small business? Yeah, they don't. Who decided to make Mastercard and Visa gatekeepers and not our actual laws?
>> If bitcoin mattered enough it would face the same fate (and I think it's clear that's the way it's headed). Crypto isn't somehow immune to the fact that we live in a society.
What fate is that? Using Bitcoin and other crypto to pay for legitimate and legal items would have the government come down in storm? Can I not use cash for items deemed high-risk by Visa and MC?
>> Broadly it's a zero or negative sum game, the value comes from other people losing value. We shouldn't allow systems like that.
It might be a zero-sum game, but in the payments example, the buyer and seller win and the centralized authority loses.
It is one thing to say a car creates pollution while moving passengers for x km and another thing to say, we wasted time, money and lot of computing power that are required by lot of computers competing to update a boolean flag in a database.
The environment argument is technically incorrect, and typically used by ignorant people as it is a good emotional argument.
There could be 1 or 10000000 NFTs, it makes no difference to the energy usage of the Ethereum network. The energy usage is in the production of Proof of Work blocks. These blocks could be empty or full, and this makes no difference to the amount of energy used to produce them. NFTs are dumb, a grift, etc etc.. but they themselves use no energy beyond that required to create, sign and broadcast the transaction.
It is dishonest to say "NFTs use a lot of energy". They dont. You can blame ethereum, you can blame PoW, you can blame the miners -- but the existence of the NFT contract and transactions makes no difference.
They increase the usage and attractiveness of the Ethereum network. So while they don't directly cost energy, the Ethereum network expands to use all available energy priced less than the current token price (as all Proof of Work schemes do). Anything that increases the token price of Ethereum indirectly increases the energy use of the Ethereum network.
The price of cryptocurrencies seems to have almost no relationship to stability and inflation of fiat currency. One would expect when bad inflation reports come out, and the stock market declines, cryptocurrencies would benefit from being an inflation hedge. But they don't. They often decline as well. It appears the rise and fall of cryptocurrencies correlate with the overall market's appetite for risk and speculation.
I very much disagree. I think the relationship is fairly obvious:
https://usdsat.com/
You may not be familiar with the history:
"The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust" -- SN (2009)
Literally why Bitcoin was invented. You can choose whatever you want to believe regarding reported inflation numbers. I tend to believe the metrics that show very high asset inflation in since 2009. And fact anything desirable seems to get cheaper in Bitcoin terms over time.
Why do you think cryptocurrencies are popular places with very high (reported) inflation, like Nigeria and Turkey?
> NFTs are dumb, a grift, etc etc.. but they themselves use no energy beyond that required to create, sign and broadcast the transaction.
NFTs as a system don't work without a blockchain though, no one would be interested in an NFT space that didn't have minting or trading. I think people are using "NFT" as a shorthand to talk about those transactions you bring up.
It's kind of like saying, "gaming doesn't use a lot of energy, doing math on GPU does." I mean, technically right, but gaming is the reason people are doing math on the GPU. NFTs/cryptocurrency are the reason people are doing transactions on a proof-of-work Ethereum chain.
According to this article a single Ethereum transaction takes 30 kwh of electricity. It’s disingenuous to say that is nothing compared to playing video games or other ordinary activities, which consume far less as they aren’t dictated by game theoretical escalatory mechanics. We make a big fuss about changing 60w light bulbs to 5w led equivalents when the amount of energy that saves in a month is spent on the minting of another artless NFT. And sure, maybe that power is coming from renewable sources, but that doesn’t make it free, rather as an opportunity cost that may have been spent on something almost certainly more productive.
Its also wrong, and measuring the wrong thing. A single ethereum tx costs a few watts of CPU time to generate and sign the transaction (less even), and a few watts to broadcast to the mempool via your internet connection. Maybe add a few watts extra to factor propagation of the transaction to the network. This is all done in <500ms, probably less. It's next to nothing.
It uses much less power than the LCD that renders the jpeg.
It is easy to make a fake emotional argument if you don't technically understand how systems work.
That’s like saying all it takes to win the lottery is a few dollars to buy a ticket, then you get a hundred million dollars. You’re ignoring the true costs with appeals to a clear technical process, but that fails to capture the collective behavior that the proof of work systems like Ethereum exhibit.
In any case, dismissing my argument as “fake” and “emotional” shows that you are either engaging in bad faith or have a remedial grasp on argumentation. Please do better in the future.
I mean, they are, and I agree, one is a sucker if they buy them. But I could say that same about any luxury goods. 'Patek Philippe Watches are terrible and anyone that buys one should be ashamed of themselves'.
Now, wanting a world where nobody can buy 'Patek Philippe' watches is not a world I want to live in. If you feel that your life is more complete with a $25k watch, that is your business. This doesnt stop me from wanting to make fun of someone wasting a year of after-tax earnings of the average person for some jewelry that tells the time no better than my phone.
That is my point. NFTs are just luxury items for conspicuous consumption. They exist so people can brag and show off. That is their value to the world. The new luxury brands for the nouveau riche.
As a person that very much dislikes conspicuous consumption, I feel it has no value to me. Ill be stackin' sats.
There’s some complexity to this though. Gold watches are much more conspicuous than steel watches, but steel watches are often considered far more desirable and retail at a huge premium compared to the more conspicuous gold watches.
I should be ashamed for paying a reasonable price to purchase an NFT to support a unique artist whose work I enjoy?
Sure, the NFT current scene is extremely overvalued and filled with fraudsters and low effort cash grabs, but once that implodes, I think it's great if artists will have a means to sell digital art to a wide audience.
Tech dudes with tech salaries hating on an avenue for artists to make a living should be ashamed of themselves.
Human nature. Humans like to collect things, and if you feel like you own a limited edition of something, you will be more inclined to purchase it. DVDs were a cash cow for the movie industry, in a way that streaming (including the ability to buy on digital services) is not.
I don’t necessarily think it’s logical to collect DVDs, toys, concert merchandise, or NFTs, but if humanity appears to enjoy it, and it thus creates a sizeable revenue stream for artists, what is the harm?
Your way is logical, but will in fact not have the same result.
But if you collect DVDs or toys at least you have something. The NFTs are essentially hot air tulips in comparison, as far as I can gather.
If the NFT itself contained the artists signature of the actual work, the bits in a PNG or similar, as well as the license for that work, then that would be something at least.
NFTs are something "tech dudes" created, not something artists were actually asking for. This is reflected in the amount of utility NFTs as a concept generally bring to artists: negative, because of the constant stress of having to file takedowns on fraudulent NFTs. It's unbelievable how much time artists nowadays are forced to devote to combatting NFT fraud.
I bought an NFT last night, I thought it looked cool. I have no regrets on giving an artist some money. It's also pretty cool that if I sell it, the artist gets some more money, and if that person sells it, the artist gets some more money again. It's also cool that I did it on a PoS chain, so it's not even an environmental problem.
I could have just right clicked, and saved it, and used it as a profile pic on twitter. But that seemed weird, what if the person who DID pay for it used it too. That would make me kind of a dick.
I have always followed a lot of generative artists on Twitter. Never have I see so many creatives I follow prospering at once, mostly thanks to the Tezos ecosystem.
The buyers seem happy to support the artists. The artists seem happy to receive this support. For all the cries of it being a scam/ponzi, I'm not quite sure who the victim is meant to be here - at least within this rather specific niche.
Sure, but you probably weren't trying to sell those copies to unsuspecting buyers, pretending you had the rights to do so, and giving nothing to the artist. That's the scummy part.
I've yet to see that come up as an issue within this niche - it's mostly code based work, so a certain tolerance for forking/remixing is baked in. Unsurprisingly, highly derivative work doesn't raise much interest.
I'm deep in the generative art NFT thing too, and I've seen it come up a couple of times.
In a couple of cases algorithms have been outright copied and used for new projects. Personally I believe that's wrong and people shouldn't do it. Definitely would not buy any such work.
There's also been a few cases where some code is clearly based on other code, and some artists get mad about that. For myself, this feels a lot less clear cut, and I might consider some such art if I felt it was novel enough.
I have always followed a lot of tulip growers. Never have I see so many gardeners I follow prospering at once, mostly thanks to the tulip ecosystem.
The buyers seem happy to support the growers. The growers seem happy to receive this support. For all the cries of it being a bubble, I'm not quite sure who the victim is meant to be here - at least within this rather specific niche.
Witty, but ignores the artist <-> artwork <-> fan relationship dynamic that is at play here. To me the scene feels closer to a platform like Bandcamp than it does the more speculative world of Opensea.
Sorry what's the difference between the "artist <-> artwork <-> fan relationship dynamic" and the "grower <-> tulip <-> enthusiast relationship dynamic"?
I mean, maybe the original tulip buyers were doing so as they got genuine satisfaction out of supporting the growers themselves (ie their primary reason for buying was patronage rather than speculation), but that would be quite an amendment to the standard narrative
I think most of the ire towards NFTs and the greater cryptocurrency space in general is misattributed to the technology instead of the human behavior (specifically the audacious and immoral) that influences some of how it has been used. When people think about the cryptocurrency space, nobody actually cares about developers, they care about the scams and the insufferable cryptobros and their memes which dominate every headline and every large social space related cryptocurrencies.
The real headline most of these criticisms related to is probably closer to how deplorable people will act when they are capable of separating themselves from the costs and responsibilities of their actions.
1. Lets say you own an NFT of a picture named "Foobar".
2. I go to the original artist, and buy the original picture / Foobar's copyright from them for $1 million bucks.
3. Now I sue you for illegally distributing my work.
Who wins? Frankly speaking, I'm betting on the court system / classical copyright law in winning. I hypothetically win as far as I can tell.
This isn't even a hypothetical. Copyright allows me to buy the works off of artists. The most common is MPAA / RIAA and other record companies who gain ownership of music. Or Disney Corporation owns the drawings / pictures of Mickey Mouse and not the artists who make the 3d models or pictures.
Anyone who uses the "Foobar" picture reachable within my legal jurisdiction. Which would include any NFT "owners" who are trading some crazy token that has no claims over copyright.
Lets say Alice (currently the NFT owner) gets sued by me for her use of "Foobar" without my permission. Upon receipt of the documents, she sells the NFT to Bob and uses the money to pay for legal bills. Did Bob in fact buy anything useful from Alice? Bob may not even know that a legal proceeding is happening.
Later, when Bob realizes he's been conned, he sells the NFT to someone else again. But I sue Bob as well for any damages associated with using the Foobar picture without my permission. Maybe Bob keeps passing the NFT to other people, but its clear that the NFT is fully meaningless at this point (at least, to Alice and Bob). Other users may keep getting tricked, but that doesn't change the fact that the NFT affords no legal rights to this entire exercise.
I suppose this depends on whatever license the buyer and original IP owner agreed to during the original sale. Assuming the purchase included a license to distribute the NFT (share the image, resell the NFT, etc), you'd likely have to continue honoring that after purchasing the IP.
Not sure what type of licensing NFT sites like OpenSea/etc. use.
Bored Ape Yacht Club has recently flipped CryptoPunks to become the #1 NFT "avatar" project.
Why? Well, multiple factors, but I believe a huge one is because the license terms (https://boredapeyachtclub.com/#/terms) provide for broad rights to commercially exploit your NFT and create derivative works.
So yes, I think savvy buyers are very much paying attention to license terms, and as the space matures, having a clear IP license will be table stakes, and a permissive and broad IP license, a valuable element that people pay attention to.
You are right that many people have ignored this to date, but the userbase will become more savvy and the platforms will mature so that these distinctions are clearer to buyers.
I win because I am not distributing your work. You want to sue the off-chain 3rd party who is actually distributing your work. They would then be required to stop infringing, at which point my NFT becomes worthless, as it now points to a 404.
The only NFT I’ve seen used an IPFS link, so I dug around a bit and it seems IPFS.io (whatever that is) honours the DMCA. That has me mad wondering, what kind of legal safeguards are in place for IPFS content?
I'm no expert on this, but from what I've seen, most NFTs are as simple as an incremented ID field mapped to your wallet address and stored in a smart contract. You (usually) don't buy any rights to the image in the first place, and what the ID represents is not guaranteed to persist by any part of the agreement. So, if the author kept the copyright to the images I suppose they could sell it and then prevent the NFT owner from displaying the image itself. Seems like a fast way to burn your reputation as an artist or developer.
I would guess that most popular projects license their images under creative commons, and encourage people to copy and share them, so that the original authors can't just overwrite them, since there would be lots of backups and a social consensus as to what each ID represents.
1.) Increasingly, most savvy NFT projects provide, and savvy buyers demand, explicit IP rights. For example, here are the IP terms for Bored Ape Yacht Club (one of the top NFT projects in the space): https://boredapeyachtclub.com/#/terms
Note that BAYC grants the NFT holder not only a license to use and re-sell the NFT, but the right to commercially exploit and create derivatives of the image.
I would not buy any NFT that did not come with an explicit license. Note that most NFT marketplaces do provide a default license [0].
2.) To the extent that an artist created and sold an NFT of their original work, and then re-sold the copyright to a third party (you), I suspect the copyright system has a concept of an implicit license, i.e. the NFT holder cannot create derivative works or exploit the NFT commercially, but his ownership and re-sale of the NFT is likely non-infringing, so I'm betting you lose. You hopefully asked the artist for a representation that no rights had previously been granted, so you perhaps have a claim against the artist for breaching that representation, if made.
The BAYC license does not grant copyright. Note that it also doesnt say that the license that is granted is exclusive, nor does it say its irrevocable.
The actual copyright holder for the art can absolutely sell the copyright to someone who isnt the NFT holder. That person would be free to revoke or restrict the NFT license.
Buying a copyright duet let you retroactively own all previous distributions.
In your case the original nft was distributed before you bought the copyright. That distribution was it there and legal, your law suit would have no basis.
A lot of NFTs are pixel art because it's very easy to integrate with the typical NFT model: make a handful of swappable components (hair, eyes, mouths, noses, accessories), a handful of skin tones, and a handful of backgrounds, then spit out every possible combination of those as "unique" NFTs.
I can imagine the sub's moderators got fed up dealing with people posting endless nearly-identical looking images from the same set (either by the original company trying to make a quick buck, or the buyer desperately trying to flip their investment) and decided to just burn the whole thing.
That’s not really refuting it. It’s very hard to make 100 meaningfully different versions of an oil painting. With pixel art you can pretty much write a script to do it
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[ 3.5 ms ] story [ 163 ms ] thread> it's bad for the environment
just doesn't make sense to me. There are far, far more energy intensive operations that we do daily. Think about how much energy is 'wasted' playing video games, yet nobody balks at that.
No, miners are actually incentivized to minimize their energy consumption while maximizing output.
A cab driver can’t do twice as much driving if they double their vehicle’s energy consumption.
my gut feeling is that the blockchain is more energy intensive. but i am curious how much energy is consumed by a global online multiplayer game like fortnite or similar.
I don't really know how you can equate the two and also say that an individual person has no incentive to keep their househould energy costs at a minimum. Especially when you consider the socioeconomic status of the average gamer or their family, compared to the average owner of a crypto mining enterprise.
But I agree with you that individual gamers have the same general incentives from a need to reduce household electricity bills.
There are thousands of Ethereum nodes. It was as high as 12.5k earlier this year estimated [1]. Meanwhile, on November 29th, there were 27 million simultaneous people playing on Steam alone [2].
Even if you multiply the peak number of Ethereum nodes by every hour in the entire year, that still only hits ~100,000.
[1]: https://ethernodes.org/history [2]: https://www.archyde.com/steam-exceeds-27-million-simultaneou...
After that there is the subjective analysis about what we get out of those in terms of value since, externalities aside, you can't compare gaming as an activity vs. the activities that require crypto. I'm sure there are plenty out there who would claim that video games are a net loss to society the same way many folks think that about crypto.
Personally I think this is just the next in what will be a long line of trends as wealth consolidates upwards and the people attaining it keep looking for new and novel ways to spend or invest.
When you think about it, it's kind of wild that a system with only 12.5k nodes (plus other chains with presumably similar sizes) is using comparable levels of energy to an activity that is satisfying (at least) 27 million people simultaneously before we even factor in other platforms like consoles. I don't think that's really a comparison crypto-propononets should be proud of.
It's a bit like if a local restaurant chain cost an obscene amount of money to run, and the owners try to play it off to their stakeholders by saying, "well, the entire global McDonald's franchise costs more to run when we look at the raw numbers."
Some rich dude spends $300k on physical security. That hires 3 guys with guns that are at his side at all times. Suddenly, due to bad business decisions, rich dude has 500 people that want to see harm come to him. Those 3 guys are not going to cut it! He need to hire 300 guys (at least!) to protect him!
Arguments against energy usage are saying "You dont need to hire 300 guys! That is a waste!". Well, no, it is actually highly rational from the perspective of rich dude.
Energy is Security. How much is enough? When you can outspend your adversary.
They're not, those security guards you're hiring have an outsized impact on the environment. Argue that the impact is justified if you want, but don't pretend it doesn't exist or that it's comparable to the energy output of much larger systems that service more people.
Cryptocurrencies on proof-of-work chains use a massive amount of energy; when you break down the energy-to-output, it dwarfs other systems like traditional gaming. The argument that cryptocurrency energy usage is the same as gaming usage really kind of flies out the window when you say things like "energy is security."
I mean, that's a pretty big difference between cryptocurrency and gaming. In gaming, we don't feel better about the ecosystem or more secure specifically because we're spending more energy, the energy is not security for us.
A big reason why these comparisons fall flat is because the only way people can make gaming and crypto energy use look the same is by comparing a niche activity to a mainstream one. Gaming overall takes up a lot of energy because a lot of people do it. When we ignore that fact and only compare the global numbers then NFTs look a bit better than they should, they look like they're maybe competitive by some metrics. But that's because they're an incredibly niche product with double-digit transaction fees that people don't really spend much time interacting with.
When we break things apart into a per-person comparison, there's basically no way I've been able to find to make proof-of-work energy usage look good. Just think about it from a purely physical perspective, every transaction on the blockchain uses GPU time spread across multiple actors. Of course that uses more power than a single person's GPU running for their own personal gaming system. Distributed systems pretty much always use more power because they duplicate work.
We know this, it's the entire foundation of proof-of-work systems, they're impossible for a single actor to keep up with and that's why they have security guarantees. But the other side of that is that a distributed network of multiple GPUs that needs to be run for every chunk of transactions on the chain is of course going to be more expensive per-transaction then the equivalent "play-session" of an individual playing a game.
Maybe if everyone did their gaming on Google Stadia the comparison would be more accurate (although even there I bet Google's less-decentralized system would still probably be more efficient than a network of GPUs duplicating the same work). But that's not the case right now, most GPU work for graphics for games are happening locally, and those GPUs get powered down afterwards. There's no way someone playing a Switch for an hour is using the same amount of energy as an NFT transaction.
So thinking in terms of "energy per transaction" is wrong, you should look at total consumed energy by mining industry as a whole and compare it to other industries energy usage also as a whole.
That's worse, not better. What you're telling me is that a gaming "transaction" doesn't make sense as a comparison because Ethereum never stops making transactions.
In which case... yeah, a person who's invested into video games is unquestionably doing something better for the environment than someone who's invested into NFTs on a proof-of-work chain, because the person playing video games has the ability to turn their console off when they stop playing.
A system that requires miners to run their GPUs 24x7 is worse for the environment than a system that requires you to run a GPU just for an hour or two.
>In which case... yeah, a person who's invested into video games is unquestionably doing something better for the environment than someone who's invested into NFTs on a proof-of-work chain, because the person playing video games has the ability to turn their console off when they stop playing.
The issue is energy consumption, not the moral feel goods of the gamer. It doesn't matter if you can turn off the gaming console if all the consoles as a whole consume more energy than mining.
It does matter if you're advocating for mining and chain capacity to scale to the point where it can replace a financial institution. If proof-of-work chains are putting out the same amount of energy as the total energy expenditure of gaming right now as a niche system that isn't used by most people for daily transaction or as common assets, then proof-of-work chains are not an environmentally feasible solution at scale.
If your niche product uses the same amount of energy as one of the largest global entertainment mediums on the planet, then your niche product isn't scalable or environmentally friendly. Because you're going to keep adding more miners as you scale, as new chains are built, as mining becomes more competitive, and the problem is going to keep getting worse.
Looking at total energy expenditure and ignoring the actual amount of usage that energy expenditure allows is just a flawed way of thinking about these comparisons. Use some other substitute for transactions if you don't like thinking about playtime or sessions, but any comparison that takes usage into account is going to conclude that cryptocurrency is heckin inefficient: more inefficient than other technologies like games.
Chain capacity does not scale as new miners are added. Bitcoin/Ethereum does not consume more energy as more people use it.
>Looking at total energy expenditure and ignoring the actual amount of usage that energy expenditure allows is just a flawed way of thinking about these comparisons.
Not really, you're trying to include subjective value into the simple issue of wasting energy. From my point of view, videogames are less important than having a decentralized monetary system. Now what?
Eh... you are correct that capacity is separate from the number of miners. You are incorrect that the number of miners don't increase as chains get more attention, and incorrect that miners don't increase as new chains get created.
Somewhat worse, we're both kind of glossing over the fact that mining cost/profit is what puts a limit on the number miners more than anything else including demand. That means that widely available cheap electricity becomes something of an impossibility under this system because as electricity gets cheaper, more mining operations get set up. As coins go up in value, the cost/benefit of mining changes, and more miners get set up.
There isn't really a version of this world where coins become tremendously valuable or renewable electricity becomes cheap and widely available, and we don't have any new miners entering the system. In fact, quite the opposite, the system relies on that not happening -- if electricity and GPUs get too cheap, the network has to scale or it becomes vulnerable to attacks from rich actors.
> videogames are less important than having a decentralized monetary system. Now what?
What's now is that you haven't got a decentralized monetary system, all of it has been a pointless waste.
Bitcoin's fees are too high for normal transactions and the transaction speed is too low, the Lightning Network hasn't really worked out the way people hoped it would and has helped re-centralize parts of the chain and make it less secure. The ecosystem is fragmented because people fork chains when they're not high-enough capacity and build new ones, and the vast majority of Bitcoin holders are treating Bitcoin as a speculative asset, not as a daily currency -- which the government has bowed to and now recognizes for the purposes of tax returns, making the 'currency' wildly complicated to use legally as a normal transaction method.
Far from being a general-purpose asset, NFTs commonly have double-digit transaction fees to work with or mint, making them unsuitable for the vast majority of artists who are interested in them. They're plagued with copyright issues and asset theft, which has demonstrated that these so-called decentralized systems actually rely a lot on traditional centralized power-structures like governments to force legal norms and to prevent scams. And half of your community is running around saying things like "energy is security", which really does not bode well for the future of blockchain or the environment.
So you've spent all of this energy and wasted all of this power and you didn't even get the subjective thing you wanted out of it. At least the rest of us can actually boot into Crysis today with our GPUs.
And I don't understand how does LN centralize the chain. Who gets more control and what exactly can they do with that control? Can they print more bitcoin? Can they seize funds? Can they censor your transactions? No.
>Far from being a general-purpose asset, NFTs commonly have double-digit transaction fees to work with or mint, making them unsuitable for the vast majority of artists who are interested in them
So they are beneficial only to a subset of artists, not all of them. I can live with that.
upd:
>There isn't really a version of this world where coins become tremendously valuable or renewable electricity becomes cheap and widely available, and we don't have any new miners entering the system. In fact, quite the opposite, the system relies on that not happening -- if electricity and GPUs get too cheap, the network has to scale or it becomes vulnerable to attacks from rich actors.
This can be said about any industry that has to consume energy to create profit. All the actors compete for energy and try to outbid each other, eventually finding an equilibrium. The solution is to get more energy, so that there is enough both for mining and for videogames.
It takes transactions temporarily off-chain making them more vulnerable to attack. Lightning Network is a system where the blockchain congestion is eased up by doing fewer things directly on the chain. It's also had a nontrivial number of privacy issues, some of them solvable but at least a few only solvable by expecting people to make lots of pools, which drives up transaction cost again, which kind of defeats the point. That decreased privacy guarantee feeds into fears about centralization and censorship.
The irony behind all of this is that systems like Lightning and even Bitcoin itself are kind of ripe for censorship. The blockchain maintains your entire transaction history immutably in public, and the only thing protecting you from having all of that leaked is if you use pseudonyms or mixers (again, increasing transaction fees and congestion) to transact on it. But then when you start reporting that stuff on taxes... it just becomes way easier than it should be to track people.
This is also something coming up a lot with NFTs, it turns out that censorship and centralization is about more than where your database gets stored, it's also about which exchanges will work with you and who will haul you into court.
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> So they are beneficial only to a subset of artists, not all of them. I can live with that.
Right, but I think the point is still that the rest of us aren't fine with y'all spending the equivalent of an entire worldwide entertainment industry's worth of power just to benefit an extremely tiny subset of the population, and that we see that as a very different outcome from decentralized finance.
You can bring up Bitcoin's benefits if you want, but it's not being used as a currency though by most people. It's not a financial system, it's a decentralized asset that people are speculating about. And maybe that is subjectively valuable to you, but it's not serving as a currency for most people, and maybe it's not good for a tiny subgroup to argue that their interests should be given equal resource budgets to activities that are accessible and useful to the majority of the world?
If the majority of the world was using Bitcoin, we might be having a different conversation, and we could potentially argue about whether the benefits of a decentralized financial system outweigh the downsides. But you don't have a dencentralized financial system, you have a set of assets that are being taxed as assets by the IRS, and that aren't really benefiting most of the world outside of some speculators.
The privacy is also better with LN, since nobody but the recipient of the funds knows that you sent them money - LN routing is similar to onion routing that is used in TOR. The node that you are connected to, knows that you're sending money, but doesn't know the recipient. The last but one node knows who is the recipient but doesn't know the sender.
Despite the public ledger, I find blockchain much better for privacy than having to trust my credit card details with actual PII to various companies.
>And maybe that is subjectively valuable to you, but it's not serving as a currency for most people, and maybe it's not good for a tiny subgroup to argue that their interests should be given equal resource budgets to activities that are accessible and useful to the majority of the world?
I don't think that it matters, but it's not a tiny subgroup of people anymore. I think it would even be comparable to the amount of PC gamers worldwide.
The fact is that crypto miners are paying for the energy that they are consuming on the free market, but for some reason, they are criticized for that, unlike other industries.
Gold is quite similar to crypto. It is used as a financial asset (Bitcoin) and as a luxury item (NFTs) which makes up most of the usage of Gold. Gold mining also consumes much more energy than Bitcoin mining, but nobody seems to be upset about it or really care.
Same goes for various entertainment industries, including videogames. Does anyone care that gamers consume X amount of energy for their entertainment? No, because that's not what people normally do. But when it comes to crypto, it's all double standards.
Almost being the key word there.
> LN routing is similar to onion routing that is used in TOR.
You should look into this more, not all routing on Lightning Network goes over Tor today, I think the highest numbers I've seen are around 50%, although maybe it's grown a bit since I last checked. And importantly, every hop in a Lightning Network transaction needs to be paid. I have heard so many people talk about Lightning Network multi-hop transactions or disposable channels like they're a silver bullet for privacy while failing to point out that all of these privacy mitigations cost extra money and there's a strong incentive for users not to pay extra for privacy.
> I find blockchain much better for privacy than having to trust my credit card details with actual PII to various companies.
I've experimented with crypto exchanges, and I had to provide them all with a frankly obscene amount of PII to set up accounts. For the mainstream average user who isn't exchanging coins in private or setting up their own exchanges, moving money into and out of the system using popular providers requires giving up a ton of data. And importantly, when you do give up that data it's then associated with a wallet that you transact with on that exchange, which the exchange can then use to track all of your coins that you associate with that wallet.
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> I think it would even be comparable to the amount of PC gamers worldwide.
I promise you this isn't the case, take a look at the average concurrent users on Steam -- not even just the number of people who have an account, the number of people actively playing games at the same time at any given moment. And that's before we ever factor in other PC storefronts, or consoles, or mobile phones, or web games. Zero chance that the number of people using cryptocurrency is the same as the number of people who play games. Zero chance that it's even the same as only the number of people who play PC games, even if we ignore the rest of the market.
And remember, if you do ignore the rest of the gaming market, the energy comparison between cryptocurrency and gaming starts to look a lot worse because PCs only make up a portion of the gaming power consumption you're trying to compare to.
> Gold mining also consumes much more energy than Bitcoin mining, but nobody seems to be upset about it or really care.
Er, no. People are upset about mining, particularly in environmental movements. No one is really giving gold a free pass. See also diamonds. This stuff gets criticized all the time, evil unethical mining is practically a media trope at this point.
> Does anyone care that gamers consume X amount of energy for their entertainment? No, because that's not what people normally do.
Okay, so first of all, people also do care about this, it's a strong motivator behind efforts to make consoles more power efficient and to work on power consumption and battery life. It also plays pretty heavily into the right to repair movement. Both Microsoft and Sony have gotten criticism over broken low-power modes in their consoles, and practically every piece of hardware in a modern gaming setup will be looking at energy standards during its production.
But second of all, it's not a double standard to say that one of the largest entertainment industries in the world is allowed to consume more power than a niche currency that isn't being used as a currency by most people -- because again, it is servicing more people. If I and 3 other people go out and start driving around in a new automobile that spits out the equivalent carbon of the entire rest of the transportation industry, we can't point at the entire rest of transportation industry and say, "see, transporting millions of people uses the same amount of energy as transporting the 4 of us, so it's just double standards to criticize us over our energy use."
C...
1. Payment for LN per "hop" costs about 1 sat. It's hilariously small, so no, it doesn't disencentivize anyone from using it. And best of all, the privacy doesn't depend on large anonymity sets, so you don't need everyone to use large multi hop payments to make yours private.
2. There are plenty of no KYC exchanges and there is Monero, if you care about privacy so much. I'm okay with law enforcement tracking down my transactions and requesting info from exchanges though. What I'm not okay is when I trust my CC info to companies (because there is no other option) and then that data gets leaked. Wouldn't have happened if I used crypto and all they got was some wallet address with inflows from an exchange.
3. Number of active Steam users is 120 million [0]. Number of Bitcoin owners is 106 million and total number of crypto owners is estimated to be 300+ million. 5% of Europeans own Bitcoins. [1]. Looks comparable to me.
[0] https://www.statista.com/statistics/308330/number-stream-use...
[1] https://www.buybitcoinworldwide.com/cryptocurrency-statistic...
A) The Lightning Network only avoids fees by grouping transactions, and large long-lived channels that group tons of transactions tend to be discouraged by most privacy advocates I see online. It's recommended to use multiple short-lived channels at which point you are dealing with blockchain fees again. By the by, blockchain fees are not usually under $1 by any metric I can find[1]. The fees that I'm seeing here are pretty bad unless you're spending a lot of money, which... generally reflects the usage of bitcoin as an asset people sit on rather than spend.
B) Even if Lightning Network was great and good privacy and not vulnerable to closed channels or other attacks because of being off-chain, it's also tiny and unprofitable, and it's not where the majority of cryptocurrency is happening. Dig a bit further into the stats I linked above, the entire network capacity of Lightning Network is $159 million. That's... not enough for a financial system. But it's OK, because it'll scale, right? Except no, because when we dig into it deeper, it's often unprofitable to run nodes, and the network right now is being operated on some levels as a volunteer effort to keep transaction fees low.
So even if we take the premise that Lightning Network is totally private and secure, which it's not, it's still not really being used that much in comparison to other financial systems, which brings us back to the original question, by what measure is this a competitive currency with traditional fiat? It doesn't have the usage numbers or capacity to back that claim up.
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2. Lots to unpack here. Coinbase is still one of the most popular traders in this space even after multiple complaints about seizing funds, and Monero solves zero of those problems because the problem is the exchange itself, not the coin. Coinbase is still one of the most popular traders despite the fact that it's literally withheld funds and stolen people's money before, which means the one thing cryptocurrency was designed to do it's not even doing, people can still have their money seized. That other exchanges exist means very little to me if the average/median user is still interacting with a centralized exchange. Again, Monero doesn't really solve that problem.
Coinbase is not a government agency and can do whatever it wants with your data. Bear in mind that some of the biggest investors into the cryptocurrency space are people like Jack Dorsey and companies like Paypal. I find it very hard to believe that there's not going to be commercial corporate monitoring of people's transactions given the history of everything else the investors have ever created.
Finally, the "Bitcoin is more secure" argument seems very hard to back up to me. I think all you really need to do is look at the NFT space to see that scams/attacks are a lot more common than cryptocurrency advocates like to pretend. And remember that when your money gets stolen you either rely on a centralized authority to get it back, or you don't get it back. For the average user, this is a decrease in security.
I'm no fan of credit cards, but credit card transactions can be reversed as a security measure to prevent fraud. The average user wants to be able to get their money back if someone scams them, because scams/phishing/etc are just as much of a threat as anything else. Additionally, we have to go back to the point that the average user of cryptocurrenc...
Virtually all of the things you could mention have some net benefit to society.
You cannot argue that the relative merits of two bad things makes one of them good, or even "not bad". That's not how anything works. Objectively bad things are always going to be bad no matter what else happens.
So the comparison with gaming is not really correct. Playing PS5 consumes energy in a direct way. Creating an ETH transaction doesn't consume much more energy than vising a website.
The kind of video gaming that has you burning 300W with your GPU is hard to achieve in a different way.
It is a weak argument though and I think it's frustrating how prominently people make it rather than the much more important "it's bad to propagate scarcity based ownership structures to a domain where scarcity need not exist".
A central authority being the source of truth will be cheaper since only one entity needs to verify. Will the cost of proving ownership through decentralization ever be cheaper than 1 single authority doing it?
Right now, proving ownership through decentralization costs more than one single entity doing it. But if decentralization systems proliferate, then we can see if the extra cost of decentralization is worth it.
In industries where this extra cost is not worth it, decentralization probably won't exist. In industries where one single authority has too much say and power, users will be willing to pay the cost of decentralization. Payments, in my opinion, is the best example since Mastercard and Visa have such a stronghold on how you can make or take payments online. In an industry like that, users will pay a premium.
Do you honestly think that Visa and Mastercard wanna prevent people from using their services to buy porn for example? They don't give a shit, they want money, the state, the people with the monopoly on force are the ones who create the circumstances that put that pressure on Visa and whoever else. If bitcoin mattered enough it would face the same fate (and I think it's clear that's the way it's headed). Crypto isn't somehow immune to the fact that we live in a society.
Mainly blockchain tech just provides a vehicle to obfuscate financial machinations. Much of the value of blockchain tech comes from it's viability as a financial tool that's abreast of regulations to prevent abuse. Broadly it's a zero or negative sum game, the value comes from other people losing value. We shouldn't allow systems like that.
The dream of crypto libertarians isn't to eliminate the monopoly of violence but to get into the position of controlling it, or at least be exempt from it. A monopoly of violence doesn't work because it's a literal monopoly, it works because it is recognized and under capitalism the recognition is largely based on money.
Crypto currencies can be regulated, sure, but the goal of web3 isn't simply to have thousands of coins to speculatively invest in. The long goal of web3 is to move all public records (and really all documents controlling ordinary people's lives) on-chain so that "smart contracts" on the chain can supersede actual law by automated enforcement. Having extreme wealth (and thus controlling a significant share of the consent) can still exempt you from the negative effects but if smart contracts can shape reality because all software obeys them, you can effectively write your own laws.
[0]: A lot of US police training involves drawing explicit conceptual distinctions between LEOs (sheep dogs), civilians (sheep) and criminals (wolves), with civilians being potential criminals or "wolves in sheep's clothing" and being prone to "mistaking sheep dogs for wolves" because they're a bit dim. Military training on the other hand usually reserves this kind of in-group/out-group dehumanization for people from different countries (with drone strikes infamously counting unidentified casualties as presumed enemy combatants if they're "of fighting age").
If the government doesn't want these industries, why not just ban them? Why make businesses jump through hoops to accept payments and pay higher fees? And don't forget, if your company is big enough, Mastercard and Visa will work with you. Small business? Yeah, they don't. Who decided to make Mastercard and Visa gatekeepers and not our actual laws?
>> If bitcoin mattered enough it would face the same fate (and I think it's clear that's the way it's headed). Crypto isn't somehow immune to the fact that we live in a society.
What fate is that? Using Bitcoin and other crypto to pay for legitimate and legal items would have the government come down in storm? Can I not use cash for items deemed high-risk by Visa and MC?
>> Broadly it's a zero or negative sum game, the value comes from other people losing value. We shouldn't allow systems like that.
It might be a zero-sum game, but in the payments example, the buyer and seller win and the centralized authority loses.
There could be 1 or 10000000 NFTs, it makes no difference to the energy usage of the Ethereum network. The energy usage is in the production of Proof of Work blocks. These blocks could be empty or full, and this makes no difference to the amount of energy used to produce them. NFTs are dumb, a grift, etc etc.. but they themselves use no energy beyond that required to create, sign and broadcast the transaction.
It is dishonest to say "NFTs use a lot of energy". They dont. You can blame ethereum, you can blame PoW, you can blame the miners -- but the existence of the NFT contract and transactions makes no difference.
Is this also to blame for the energy usage of Proof of Work? I would say it has a bigger effect on fixed emission cryptocurrencies than stupid tokens.
Cut the money printing, save the environment?
You may not be familiar with the history:
"The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust" -- SN (2009)
Literally why Bitcoin was invented. You can choose whatever you want to believe regarding reported inflation numbers. I tend to believe the metrics that show very high asset inflation in since 2009. And fact anything desirable seems to get cheaper in Bitcoin terms over time.
Why do you think cryptocurrencies are popular places with very high (reported) inflation, like Nigeria and Turkey?
The energy costs are not related to the number of tokens, how often the tokens are traded, who made the tokens or who sold them.
NFTs as a system don't work without a blockchain though, no one would be interested in an NFT space that didn't have minting or trading. I think people are using "NFT" as a shorthand to talk about those transactions you bring up.
It's kind of like saying, "gaming doesn't use a lot of energy, doing math on GPU does." I mean, technically right, but gaming is the reason people are doing math on the GPU. NFTs/cryptocurrency are the reason people are doing transactions on a proof-of-work Ethereum chain.
According to this article a single Ethereum transaction takes 30 kwh of electricity. It’s disingenuous to say that is nothing compared to playing video games or other ordinary activities, which consume far less as they aren’t dictated by game theoretical escalatory mechanics. We make a big fuss about changing 60w light bulbs to 5w led equivalents when the amount of energy that saves in a month is spent on the minting of another artless NFT. And sure, maybe that power is coming from renewable sources, but that doesn’t make it free, rather as an opportunity cost that may have been spent on something almost certainly more productive.
It uses much less power than the LCD that renders the jpeg. It is easy to make a fake emotional argument if you don't technically understand how systems work.
In any case, dismissing my argument as “fake” and “emotional” shows that you are either engaging in bad faith or have a remedial grasp on argumentation. Please do better in the future.
Now, wanting a world where nobody can buy 'Patek Philippe' watches is not a world I want to live in. If you feel that your life is more complete with a $25k watch, that is your business. This doesnt stop me from wanting to make fun of someone wasting a year of after-tax earnings of the average person for some jewelry that tells the time no better than my phone.
As a person that very much dislikes conspicuous consumption, I feel it has no value to me. Ill be stackin' sats.
Sure, the NFT current scene is extremely overvalued and filled with fraudsters and low effort cash grabs, but once that implodes, I think it's great if artists will have a means to sell digital art to a wide audience.
Tech dudes with tech salaries hating on an avenue for artists to make a living should be ashamed of themselves.
But it's rare, and usually involves actual involvement with the creator, not some scummy mass production scam like Bored Apes.
I don’t necessarily think it’s logical to collect DVDs, toys, concert merchandise, or NFTs, but if humanity appears to enjoy it, and it thus creates a sizeable revenue stream for artists, what is the harm?
Your way is logical, but will in fact not have the same result.
If the NFT itself contained the artists signature of the actual work, the bits in a PNG or similar, as well as the license for that work, then that would be something at least.
I could have just right clicked, and saved it, and used it as a profile pic on twitter. But that seemed weird, what if the person who DID pay for it used it too. That would make me kind of a dick.
/s
The buyers seem happy to support the artists. The artists seem happy to receive this support. For all the cries of it being a scam/ponzi, I'm not quite sure who the victim is meant to be here - at least within this rather specific niche.
In a couple of cases algorithms have been outright copied and used for new projects. Personally I believe that's wrong and people shouldn't do it. Definitely would not buy any such work.
There's also been a few cases where some code is clearly based on other code, and some artists get mad about that. For myself, this feels a lot less clear cut, and I might consider some such art if I felt it was novel enough.
The buyers seem happy to support the growers. The growers seem happy to receive this support. For all the cries of it being a bubble, I'm not quite sure who the victim is meant to be here - at least within this rather specific niche.
The real headline most of these criticisms related to is probably closer to how deplorable people will act when they are capable of separating themselves from the costs and responsibilities of their actions.
2. I go to the original artist, and buy the original picture / Foobar's copyright from them for $1 million bucks.
3. Now I sue you for illegally distributing my work.
Who wins? Frankly speaking, I'm betting on the court system / classical copyright law in winning. I hypothetically win as far as I can tell.
This isn't even a hypothetical. Copyright allows me to buy the works off of artists. The most common is MPAA / RIAA and other record companies who gain ownership of music. Or Disney Corporation owns the drawings / pictures of Mickey Mouse and not the artists who make the 3d models or pictures.
nfts are still largely a grift
Anyone who uses the "Foobar" picture reachable within my legal jurisdiction. Which would include any NFT "owners" who are trading some crazy token that has no claims over copyright.
Lets say Alice (currently the NFT owner) gets sued by me for her use of "Foobar" without my permission. Upon receipt of the documents, she sells the NFT to Bob and uses the money to pay for legal bills. Did Bob in fact buy anything useful from Alice? Bob may not even know that a legal proceeding is happening.
Later, when Bob realizes he's been conned, he sells the NFT to someone else again. But I sue Bob as well for any damages associated with using the Foobar picture without my permission. Maybe Bob keeps passing the NFT to other people, but its clear that the NFT is fully meaningless at this point (at least, to Alice and Bob). Other users may keep getting tricked, but that doesn't change the fact that the NFT affords no legal rights to this entire exercise.
Not sure what type of licensing NFT sites like OpenSea/etc. use.
What agreement? People are just buying NFTs without reading any contracts or signing anything.
Why? Well, multiple factors, but I believe a huge one is because the license terms (https://boredapeyachtclub.com/#/terms) provide for broad rights to commercially exploit your NFT and create derivative works.
This has led to celebrities purchasing them en masse and Universal Music Group even creating a new band based on BAYC avatars: https://nftnow.com/news/bored-ape-yacht-club-band-announced-...
So yes, I think savvy buyers are very much paying attention to license terms, and as the space matures, having a clear IP license will be table stakes, and a permissive and broad IP license, a valuable element that people pay attention to.
You are right that many people have ignored this to date, but the userbase will become more savvy and the platforms will mature so that these distinctions are clearer to buyers.
I would guess that most popular projects license their images under creative commons, and encourage people to copy and share them, so that the original authors can't just overwrite them, since there would be lots of backups and a social consensus as to what each ID represents.
1.) Increasingly, most savvy NFT projects provide, and savvy buyers demand, explicit IP rights. For example, here are the IP terms for Bored Ape Yacht Club (one of the top NFT projects in the space): https://boredapeyachtclub.com/#/terms
Note that BAYC grants the NFT holder not only a license to use and re-sell the NFT, but the right to commercially exploit and create derivatives of the image.
I would not buy any NFT that did not come with an explicit license. Note that most NFT marketplaces do provide a default license [0].
2.) To the extent that an artist created and sold an NFT of their original work, and then re-sold the copyright to a third party (you), I suspect the copyright system has a concept of an implicit license, i.e. the NFT holder cannot create derivative works or exploit the NFT commercially, but his ownership and re-sale of the NFT is likely non-infringing, so I'm betting you lose. You hopefully asked the artist for a representation that no rights had previously been granted, so you perhaps have a claim against the artist for breaching that representation, if made.
[0] https://www.natlawreview.com/article/nft-license-breakdown-e...
The actual copyright holder for the art can absolutely sell the copyright to someone who isnt the NFT holder. That person would be free to revoke or restrict the NFT license.
I can imagine the sub's moderators got fed up dealing with people posting endless nearly-identical looking images from the same set (either by the original company trying to make a quick buck, or the buyer desperately trying to flip their investment) and decided to just burn the whole thing.
NFTs are about maximizing profits out of nothing
scammers won't trade with real art pieces