Ethereum will use around 99.95% less energy post merge(blog.ethereum.org)
blog.ethereum.org
Ethereum will use around 99.95% less energy post merge
https://blog.ethereum.org/2021/05/18/country-power-no-more/
1,726 comments
Paxos https://en.wikipedia.org/wiki/Paxos has existed for more than 30 years. If it were easy or simple to issue a money with distributed signing, it'd have been done before Bitcoin's PoW<->Difficulty Adjustment<->Fixed Money Issuance novel art was published.
Ethereum has been "about to release PoS" for almost 6 years now and all of the initial critiques (By issuing X units of value, you incentivize ~<X units of energy to be expended) Summarized here: https://www.truthcoin.info/blog/pow-cheapest/
If the curious reader is interested in reading more about the scope of fraud that the ethereum protocol has fueled read the post here: https://web.archive.org/web/20201214170136if_/https://www.re...
Why link to the archive.org copy and not the original? Ethereum people got mod access to the subreddit and deleted everything pointing out the fraud.
Ethereum has been "about to release PoS" for almost 6 years now and all of the initial critiques (By issuing X units of value, you incentivize ~<X units of energy to be expended) Summarized here: https://www.truthcoin.info/blog/pow-cheapest/
If the curious reader is interested in reading more about the scope of fraud that the ethereum protocol has fueled read the post here: https://web.archive.org/web/20201214170136if_/https://www.re...
Why link to the archive.org copy and not the original? Ethereum people got mod access to the subreddit and deleted everything pointing out the fraud.
>https://www.truthcoin.info/blog/pow-cheapest/
By the logic of that article asymmetric cryptography doesn't, because the value equal to what's protected by the key is magically wasted somewhere. Of course, that isn't true, because it's not possible to break asymmetric cryptography by brute force with expenditure equal to whatever is protected. Same applies to PoS.
It's maliciously created nonsense, which is most visible when he slyly equates locked tokens to wasted glucose. Wasted glucose is _real_ energy, while locked tokens are inherently worthless patterns of bits. Locking them is just a _trick_ to convince people to cooperate with each other - a game theory setting where everyone finds it most beneficial to cooperate. The whole point of the economy is to manipulate real resources - various forms of matter and energy [1] and locking tokens is just a different way of social organization. "Liquidity" (of digital tokens) isn't a real resource. "Money" isn't a real resource. If there's less _real_ energy wasted, the new social organization system is more efficient. That's the objective metric underneath it all, and clearly PoS is a more efficient way of organizing massive human cooperation than PoW.
[1] theoretically matter is a different form of energy, but at the current technological level they are separate inputs to the human economy, except for nuclear power
By the logic of that article asymmetric cryptography doesn't, because the value equal to what's protected by the key is magically wasted somewhere. Of course, that isn't true, because it's not possible to break asymmetric cryptography by brute force with expenditure equal to whatever is protected. Same applies to PoS.
It's maliciously created nonsense, which is most visible when he slyly equates locked tokens to wasted glucose. Wasted glucose is _real_ energy, while locked tokens are inherently worthless patterns of bits. Locking them is just a _trick_ to convince people to cooperate with each other - a game theory setting where everyone finds it most beneficial to cooperate. The whole point of the economy is to manipulate real resources - various forms of matter and energy [1] and locking tokens is just a different way of social organization. "Liquidity" (of digital tokens) isn't a real resource. "Money" isn't a real resource. If there's less _real_ energy wasted, the new social organization system is more efficient. That's the objective metric underneath it all, and clearly PoS is a more efficient way of organizing massive human cooperation than PoW.
[1] theoretically matter is a different form of energy, but at the current technological level they are separate inputs to the human economy, except for nuclear power
> By the logic of that article asymmetric cryptography doesn't, because the value equal to what's protected by the key is magically wasted somewhere. Of course, that isn't true, because it's not possible to break asymmetric cryptography by brute force with expenditure equal to whatever is protected. Same applies to PoS.
Not quite. He's arguing that MC = MR implies that PoS is really PoW through obscure means. There's more to securing PoS than asymmetric cryptography -- namely, you have to convince everyone that your keys (and the coins attached to them) are legitimate, and not the next guy's keys and coins on a fork. Convincing people of this isn't a cost-free task, especially if there's wealth to be accumulated through convincing more and more people that your coins are legitimate, and everyone else's conflicting coins on different forks are not.
This game of convincing people that your fork is the true fork is exactly what stake-grinding is. Given a choice, and no a priori knowledge, which history of the PoS chain is the true history? What would convince you that one is legitimate, and the other is not? The article argues that the act of convincing you is, itself, a form of PoW. After all, without PoW, looking at the chainstate isn't convincing -- if you have staked coins today, you could easily create a fork of the chain history where everyone else stopped spending except for you. Without no 3rd party way to verify if that actually happened, you could go around trying to bribe people to accept that your subsequent transactions on this fork are the chain's "true" transactions. There's many tactics for doing this -- you could go on Twitter and spam everyone; you could organize events and rallies; you could even take malicious actions and disable your rivals. You and everyone trying to do the same thing would be in competition to convince everyone else that your fork is the "true" fork. But regardless of the tactics, all of them require expenditures on your part in the forms of time, energy, health, stress, etc. Hence the "PoW by obscurity" argument. But at the end of the day, you'd be unwise spend any more than you'd expect to receive in return because of MC = MR.
Here's a concrete example. The reason you can tell that there's a lot more belief that ETH is the true Ethereum fork, and not ETC, is because ETH has a much higher PoW score than ETC. Miners can choose between ETH and ETC to mine, and they mine the one whose tokens are worth more. ETH is worth more because more people value it. Therefore, PoW is a proxy measurement of the social consensus -- more people believe in ETH than ETC.
If ETH were PoS at the time of the split, it would be a lot less obvious from the chainstate which one people would choose to use. Both chains' participants would try to make it look like their chains had more users by some other means. But the point in the article is that those "other means" are not only costly actions, but also the marginal cost each fork can afford for these actions is, in equilibrium, equal to their respective marginal revenues.
Not quite. He's arguing that MC = MR implies that PoS is really PoW through obscure means. There's more to securing PoS than asymmetric cryptography -- namely, you have to convince everyone that your keys (and the coins attached to them) are legitimate, and not the next guy's keys and coins on a fork. Convincing people of this isn't a cost-free task, especially if there's wealth to be accumulated through convincing more and more people that your coins are legitimate, and everyone else's conflicting coins on different forks are not.
This game of convincing people that your fork is the true fork is exactly what stake-grinding is. Given a choice, and no a priori knowledge, which history of the PoS chain is the true history? What would convince you that one is legitimate, and the other is not? The article argues that the act of convincing you is, itself, a form of PoW. After all, without PoW, looking at the chainstate isn't convincing -- if you have staked coins today, you could easily create a fork of the chain history where everyone else stopped spending except for you. Without no 3rd party way to verify if that actually happened, you could go around trying to bribe people to accept that your subsequent transactions on this fork are the chain's "true" transactions. There's many tactics for doing this -- you could go on Twitter and spam everyone; you could organize events and rallies; you could even take malicious actions and disable your rivals. You and everyone trying to do the same thing would be in competition to convince everyone else that your fork is the "true" fork. But regardless of the tactics, all of them require expenditures on your part in the forms of time, energy, health, stress, etc. Hence the "PoW by obscurity" argument. But at the end of the day, you'd be unwise spend any more than you'd expect to receive in return because of MC = MR.
Here's a concrete example. The reason you can tell that there's a lot more belief that ETH is the true Ethereum fork, and not ETC, is because ETH has a much higher PoW score than ETC. Miners can choose between ETH and ETC to mine, and they mine the one whose tokens are worth more. ETH is worth more because more people value it. Therefore, PoW is a proxy measurement of the social consensus -- more people believe in ETH than ETC.
If ETH were PoS at the time of the split, it would be a lot less obvious from the chainstate which one people would choose to use. Both chains' participants would try to make it look like their chains had more users by some other means. But the point in the article is that those "other means" are not only costly actions, but also the marginal cost each fork can afford for these actions is, in equilibrium, equal to their respective marginal revenues.
> If ETH were PoS at the time of the split, it would be a lot less obvious from the chainstate which one people would choose to use. Both chains' participants would try to make it look like their chains had more users by some other means. But the point in the article is that those "other means" are not only costly actions, but also the marginal cost each fork can afford for these actions is, in equilibrium, equal to their respective marginal revenues.
You forget that when the ETH/ETC split happened, the hashrate fluctuated immensely after the Poloniex listed ETC (and ETCs price skyrocketed) and many miners switched to mine ETC.
Now in hindsight it is obvious but during the chaotic days, it wasn't obvious which chain would be worth more in the future. That ETH had more POW done at that moment was unimportant. You had to use other means to decide which chain to use.
You forget that when the ETH/ETC split happened, the hashrate fluctuated immensely after the Poloniex listed ETC (and ETCs price skyrocketed) and many miners switched to mine ETC.
Now in hindsight it is obvious but during the chaotic days, it wasn't obvious which chain would be worth more in the future. That ETH had more POW done at that moment was unimportant. You had to use other means to decide which chain to use.
In other words, the PoW scores on ETH and ETC after the fork ultimately were predictive of how much one token was valued versus another. You are right that there was uncertainty at first -- and it was reflected in how much PoW each chain got! -- but for someone who's just now coming into crypto with no a priori knowledge of the event, the higher PoW score on ETH is indicative of higher market demand. Which is exactly my point.
>This game of convincing people that your fork is the true fork is exactly what stake-grinding is
Stake grinding is something else, in coins like NXT the producer of the next block was set by the seed based on the previous block, so it was possible to bruteforce blocks until you were also the next generator.
>The article argues that the act of convincing you is, itself, a form of PoW.
He makes a much stronger claim that resources spent on that (+ staking) are equal to revenue. There's an additional assumption in the article: he writes about marginal cost and revenue, but what he actually assumes is a system where average cost is equal to marginal cost, as it is in PoW under perfect competition. It's even equated explicitly in "“Rent” always forces production costs (MC) to always equal sale prices (MR)". He starts from the assumption that PoS uses exactly same resources as PoW and then shows it's true based on the assumption.
>Given a choice, and no a priori knowledge, which history of the PoS chain is the true history? What would convince you that one is legitimate, and the other is not?
What does 'true' and 'legitimate' mean here? The whole point is to interact with other people, so naturally I'm going to use the same network that people I want to interact with use. Same whether it's PoW or PoS - no real difference between choosing forks from some block height vs choosing networks with completely different genesis blocks and names.
Once the network is chosen a node has to follow it. The question of 'how long it's safe to be offline to reproduce the behavior of being online all the time' has a complex answer of percentage of slashed stake if two conflicting histories exist. Currently I think it's about 16% for one month, which is about $2B.
>Without no 3rd party way to verify if that actually happened, you could go around trying to bribe people to accept that your subsequent transactions on this fork are the chain's "true" transactions.
PoW doesn't change anything here, it's an arbitrary fork like any other. People that ended up with coins from mining can receive coins on your fork too, made with a much smaller mining difficulty. Mining cost is irrelevant because that's destroyed wealth - nobody ends up with it. The reason it won't happen in reality is because of network effects - even if you have external wealth able to pay enough at once to everyone that has to be paid, no single person wants to be left alone on a new fork - they would all have to move at once.
Stake grinding is something else, in coins like NXT the producer of the next block was set by the seed based on the previous block, so it was possible to bruteforce blocks until you were also the next generator.
>The article argues that the act of convincing you is, itself, a form of PoW.
He makes a much stronger claim that resources spent on that (+ staking) are equal to revenue. There's an additional assumption in the article: he writes about marginal cost and revenue, but what he actually assumes is a system where average cost is equal to marginal cost, as it is in PoW under perfect competition. It's even equated explicitly in "“Rent” always forces production costs (MC) to always equal sale prices (MR)". He starts from the assumption that PoS uses exactly same resources as PoW and then shows it's true based on the assumption.
>Given a choice, and no a priori knowledge, which history of the PoS chain is the true history? What would convince you that one is legitimate, and the other is not?
What does 'true' and 'legitimate' mean here? The whole point is to interact with other people, so naturally I'm going to use the same network that people I want to interact with use. Same whether it's PoW or PoS - no real difference between choosing forks from some block height vs choosing networks with completely different genesis blocks and names.
Once the network is chosen a node has to follow it. The question of 'how long it's safe to be offline to reproduce the behavior of being online all the time' has a complex answer of percentage of slashed stake if two conflicting histories exist. Currently I think it's about 16% for one month, which is about $2B.
>Without no 3rd party way to verify if that actually happened, you could go around trying to bribe people to accept that your subsequent transactions on this fork are the chain's "true" transactions.
PoW doesn't change anything here, it's an arbitrary fork like any other. People that ended up with coins from mining can receive coins on your fork too, made with a much smaller mining difficulty. Mining cost is irrelevant because that's destroyed wealth - nobody ends up with it. The reason it won't happen in reality is because of network effects - even if you have external wealth able to pay enough at once to everyone that has to be paid, no single person wants to be left alone on a new fork - they would all have to move at once.
> it was possible to bruteforce blocks until you were also the next generator.
This sounds exactly like a special case of the game of convincing people that your fork is the true fork. NXT stakers each have their own preferred forks (i.e. the ones in which they get the most tokens), and are willing to spend energy to make it so their fork is accepted by the network.
> He starts from the assumption that PoS uses exactly same resources as PoW and then shows it's true based on the assumption.
Maybe it's not well-written here, but his argument is that PoS ultimately will require the same energy commitments as PoW through the act of each staker trying to convince both other stakers and newcomers (i.e. with no a priori knowledge of how the chain evolved) that their preferred fork is the fork the network accepts. A PoS chain may not take the same initial resources as a PoW chain, but it will over time.
Source: I've spoken to the author at conferences.
> What does 'true' and 'legitimate' mean here? The whole point is to interact with other people, so naturally I'm going to use the same network that people I want to interact with use.
And how do we know which fork this is, out of all the alternatives? You either have to ask people (i.e. you need a priori knowledge obtained out-of-band), or you need a way to independently but deterministically choose the fork that the economic majority of people use (which is the problem PoW solves).
> PoW doesn't change anything here, it's an arbitrary fork like any other.
Except, this is not what's happening in real life. People follow the canonical chain, and PoW helps them all determine what the canonical chain is without having to ask around.
This sounds exactly like a special case of the game of convincing people that your fork is the true fork. NXT stakers each have their own preferred forks (i.e. the ones in which they get the most tokens), and are willing to spend energy to make it so their fork is accepted by the network.
> He starts from the assumption that PoS uses exactly same resources as PoW and then shows it's true based on the assumption.
Maybe it's not well-written here, but his argument is that PoS ultimately will require the same energy commitments as PoW through the act of each staker trying to convince both other stakers and newcomers (i.e. with no a priori knowledge of how the chain evolved) that their preferred fork is the fork the network accepts. A PoS chain may not take the same initial resources as a PoW chain, but it will over time.
Source: I've spoken to the author at conferences.
> What does 'true' and 'legitimate' mean here? The whole point is to interact with other people, so naturally I'm going to use the same network that people I want to interact with use.
And how do we know which fork this is, out of all the alternatives? You either have to ask people (i.e. you need a priori knowledge obtained out-of-band), or you need a way to independently but deterministically choose the fork that the economic majority of people use (which is the problem PoW solves).
> PoW doesn't change anything here, it's an arbitrary fork like any other.
Except, this is not what's happening in real life. People follow the canonical chain, and PoW helps them all determine what the canonical chain is without having to ask around.
>You either have to ask people (i.e. you need a priori knowledge obtained out-of-band)
Again, the only reason blockchains need consensus is to allow people to interact with each other - consensus is between people. Computers are just tools to make that easier. It's a fundamental contradiction to assume you can use any blockchain to make any economic transactions without interacting with other people - because economic transactions require other economic entities.
Of course when you assume something false you can prove any absurd result, like that PoS wastes same resources as PoW.
PoW relies on social coordination in the short term, because short term attacks are cheaper, so in the case of a 51% attack people would have to organize fast. PoS is extremely safe in the short term, and only maybe falls back on social coordination in the long term (again, only in the case of an attack), which is the correct security model.
>deterministically choose the fork that the economic majority of people use (which is the problem PoW solves)
No it doesn't. Mining revenue is an insignificant part of what the real consensus in any PoW coin is. For a while BCH had biggest revenues after the fork (because of their difficulty algorithm). Ethereum has higher mining revenues than bitcoin for months now (last 24h: $49M ethereum, $31.3M bitcoin) - does that make ethereum the true bitcoin now?
Again, the only reason blockchains need consensus is to allow people to interact with each other - consensus is between people. Computers are just tools to make that easier. It's a fundamental contradiction to assume you can use any blockchain to make any economic transactions without interacting with other people - because economic transactions require other economic entities.
Of course when you assume something false you can prove any absurd result, like that PoS wastes same resources as PoW.
PoW relies on social coordination in the short term, because short term attacks are cheaper, so in the case of a 51% attack people would have to organize fast. PoS is extremely safe in the short term, and only maybe falls back on social coordination in the long term (again, only in the case of an attack), which is the correct security model.
>deterministically choose the fork that the economic majority of people use (which is the problem PoW solves)
No it doesn't. Mining revenue is an insignificant part of what the real consensus in any PoW coin is. For a while BCH had biggest revenues after the fork (because of their difficulty algorithm). Ethereum has higher mining revenues than bitcoin for months now (last 24h: $49M ethereum, $31.3M bitcoin) - does that make ethereum the true bitcoin now?
> Again, the only reason blockchains need consensus is to allow people to interact with each other - consensus is between people. Computers are just tools to make that easier. It's a fundamental contradiction to assume you can use any blockchain to make any economic transactions without interacting with other people - because economic transactions require other economic entities.
Did I say otherwise?
> Of course when you assume something false you can prove any absurd result, like that PoS wastes same resources as PoW.
Well, no widely-used PoS system exists (so we have no real-world examples to learn from), but despite this, you're insisting that no PoS system will use more than PoW from now until the last blockchain goes offline, despite these systems (in expectation) driving essentially unbound amounts of revenue. That's quite an extraordinary claim!
Let's steel-man this. Let's assume that a PoS blockchain becomes so widely successful that its token becomes a major world currency. Then what? Controlling a PoS node would be like controlling a country's reserve banks and mints. So, what keeps these nodes safe from asshats breaking into them and using them print themselves money? Like, why can't an armed band of asshats show up at my server rack and physically steal my validators' keys?
The answer of course is that the building security and law enforcement officers keep this from happening. But, where do these people come from? Who pays them? Where do they get their equipment? What do they do with the asshats they catch? How do they deal with escalations from asshats, and stay ahead of the asshats' tactics? How much energy is going into keeping these PoS nodes secure?
It appears that there is energy involved in keeping the PoS system running in the face of asshattery, and that energy is proportional to how important it is that it remains usable for the societies that rely on it. It seems, then, that the more successful PoS becomes, the more it co-opts the very infrastructure that keeps today's financial systems secure. That's a lot of energy!
So, in the event of success, I have no reason to believe that PoS will take less energy to secure than PoW, once I think about what has to go into securing a successful PoS system. At least with PoW, I can rest assured that if the asshats hijack a mining rig to print money, they'll have to continuously out-mine the rest of the world in perpetuity in order for their coins to remain realized on the canonical chain. PoS doesn't have that resiliency, which necessitates building and maintaining an extrinsic security apparatus to keep the staked coins from getting stolen in the first place. This security apparatus -- including all the laws, supply chains, manufacturing, and so on to keep it going as it becomes a more and more valuable target to asshats -- is on the MC side of the equation.
> No it doesn't. Mining revenue is an insignificant part of what the real consensus in any PoW coin is. For a while BCH had biggest revenues after the fork (because of their difficulty algorithm).
You've completely misread my comment. Miners mine on the chain that is most profitable to them, and the blockchains they mine on encode the history of their activities. Even though during a chain split it's not immediately apparent which resulting chain will attract the most miners over time, it does become apparent quickly enough. The revenues (and thus profits) come from users actually demanding the coins.
> Ethereum has higher mining revenues than bitcoin for months now (last 24h: $49M ethereum, $31.3M bitcoin) - does that make ethereum the true bitcoin now?
I thought it was widely understood that Bitcoin and Ethereum are not the same thing? If there is contention between two forks of the same blockchain, then PoW provides you a way to determine which one has more demand. PoW doesn't tell you anything about two different blockchains with two different difficulty algorithms (but it might tell you something about two different blockchains with the same difficult algorithm, such as Bitcoin vs Bitcoin Cash).
Did I say otherwise?
> Of course when you assume something false you can prove any absurd result, like that PoS wastes same resources as PoW.
Well, no widely-used PoS system exists (so we have no real-world examples to learn from), but despite this, you're insisting that no PoS system will use more than PoW from now until the last blockchain goes offline, despite these systems (in expectation) driving essentially unbound amounts of revenue. That's quite an extraordinary claim!
Let's steel-man this. Let's assume that a PoS blockchain becomes so widely successful that its token becomes a major world currency. Then what? Controlling a PoS node would be like controlling a country's reserve banks and mints. So, what keeps these nodes safe from asshats breaking into them and using them print themselves money? Like, why can't an armed band of asshats show up at my server rack and physically steal my validators' keys?
The answer of course is that the building security and law enforcement officers keep this from happening. But, where do these people come from? Who pays them? Where do they get their equipment? What do they do with the asshats they catch? How do they deal with escalations from asshats, and stay ahead of the asshats' tactics? How much energy is going into keeping these PoS nodes secure?
It appears that there is energy involved in keeping the PoS system running in the face of asshattery, and that energy is proportional to how important it is that it remains usable for the societies that rely on it. It seems, then, that the more successful PoS becomes, the more it co-opts the very infrastructure that keeps today's financial systems secure. That's a lot of energy!
So, in the event of success, I have no reason to believe that PoS will take less energy to secure than PoW, once I think about what has to go into securing a successful PoS system. At least with PoW, I can rest assured that if the asshats hijack a mining rig to print money, they'll have to continuously out-mine the rest of the world in perpetuity in order for their coins to remain realized on the canonical chain. PoS doesn't have that resiliency, which necessitates building and maintaining an extrinsic security apparatus to keep the staked coins from getting stolen in the first place. This security apparatus -- including all the laws, supply chains, manufacturing, and so on to keep it going as it becomes a more and more valuable target to asshats -- is on the MC side of the equation.
> No it doesn't. Mining revenue is an insignificant part of what the real consensus in any PoW coin is. For a while BCH had biggest revenues after the fork (because of their difficulty algorithm).
You've completely misread my comment. Miners mine on the chain that is most profitable to them, and the blockchains they mine on encode the history of their activities. Even though during a chain split it's not immediately apparent which resulting chain will attract the most miners over time, it does become apparent quickly enough. The revenues (and thus profits) come from users actually demanding the coins.
> Ethereum has higher mining revenues than bitcoin for months now (last 24h: $49M ethereum, $31.3M bitcoin) - does that make ethereum the true bitcoin now?
I thought it was widely understood that Bitcoin and Ethereum are not the same thing? If there is contention between two forks of the same blockchain, then PoW provides you a way to determine which one has more demand. PoW doesn't tell you anything about two different blockchains with two different difficulty algorithms (but it might tell you something about two different blockchains with the same difficult algorithm, such as Bitcoin vs Bitcoin Cash).
>>Except, this is not what's happening in real life. People follow the canonical chain, and PoW helps them all determine what the canonical chain is without having to ask around.
In POW you still have to ask around, to find out what the canonical consensus protocol is. Having more POW alone is not enough to have your chain accepted, as it still needs to be valid according to the other rules of the protocol.
Both POS and POW depend on some level of subjectivity/trust, even while the latter relies on it less than the former.
https://blog.ethereum.org/2014/11/25/proof-stake-learned-lov...
In POW you still have to ask around, to find out what the canonical consensus protocol is. Having more POW alone is not enough to have your chain accepted, as it still needs to be valid according to the other rules of the protocol.
Both POS and POW depend on some level of subjectivity/trust, even while the latter relies on it less than the former.
https://blog.ethereum.org/2014/11/25/proof-stake-learned-lov...
> Both POS and POW depend on some level of subjectivity/trust, even while the latter relies on it less than the former.
No one is arguing that you don't have a trusted computing base.
What is being argued is, why make the TCB bigger when it doesn't need to be? Why trust someone to tell me what the current validator set or fork tip when I boot up my node, when there exists protocols whereby the node figures this out automatically?
Some people say that the energy cost of PoS justifies this, but that's not really true in the long run. This is the point Paul Sztorc was making in his article about MC = MR -- competing PoS forks will still spend the same amount of trying to convince you that their preferred fork is the canonical fork. PoW does this as well, but it gains you an in-band way to discover this, thereby making the TCB lower than it would be in PoS.
No one is arguing that you don't have a trusted computing base.
What is being argued is, why make the TCB bigger when it doesn't need to be? Why trust someone to tell me what the current validator set or fork tip when I boot up my node, when there exists protocols whereby the node figures this out automatically?
Some people say that the energy cost of PoS justifies this, but that's not really true in the long run. This is the point Paul Sztorc was making in his article about MC = MR -- competing PoS forks will still spend the same amount of trying to convince you that their preferred fork is the canonical fork. PoW does this as well, but it gains you an in-band way to discover this, thereby making the TCB lower than it would be in PoS.
>>What is being argued is, why make the TCB bigger when it doesn't need to be?
That's the point of debate: of course PoS proponents argue you can get more security at a given economic cost than you can with PoW, and that more than makes up for the security loss from the TCB bigger.
Sztorc's argument is heavily disputed in this thread, and you can see the arguments against it in the critiques provided.
That's the point of debate: of course PoS proponents argue you can get more security at a given economic cost than you can with PoW, and that more than makes up for the security loss from the TCB bigger.
Sztorc's argument is heavily disputed in this thread, and you can see the arguments against it in the critiques provided.
Making the TCB bigger makes PoS less secure overall. If you pick the wrong validator set when you boot your node up, you're fucked -- your node will never discover the chain history which represents actual user activity [1]. PoS is the blockchain equivalent of forcing users to pick out which TLS certificates they trust when they install their OS. PoW is the blockchain equivalent to your OS having a way to discover which TLS certificates the majority of the Internet currently trusts in-band, as well as a way to upgrade them to the newly-trusted set if the majority switches.
The sad part is, PoS doesn't even gain you anything -- it's not cheaper. It's just a feel-good measure that doesn't solve the underlying problem.
> Sztorc's argument is heavily disputed in this thread, and you can see the arguments against it in the critiques provided.
Other people not understanding the argument doesn't make the argument wrong.
[1] The proof is in the appendix of this paper: https://eprint.iacr.org/2016/919.pdf. The gist is that they show that two forks are indistinguishable without a priori knowledge of which validator set is not corrupt.
The sad part is, PoS doesn't even gain you anything -- it's not cheaper. It's just a feel-good measure that doesn't solve the underlying problem.
> Sztorc's argument is heavily disputed in this thread, and you can see the arguments against it in the critiques provided.
Other people not understanding the argument doesn't make the argument wrong.
[1] The proof is in the appendix of this paper: https://eprint.iacr.org/2016/919.pdf. The gist is that they show that two forks are indistinguishable without a priori knowledge of which validator set is not corrupt.
>>Making the TCB bigger makes PoS less secure overall.
That is a debatable point. The TCB amounts to a single hash, that the global Ethereum userbase has had at least three months to converge on, with extremely obvious ways of establishing its correctness. If that can't be securely established, it's unlikely a consensus on the correct software distribution channels can be established either, meaning new users would still be completely fucked.
And there are other factors that establish the security of the network besides how much subjectivity plays a role in consensus, like the economic incentives dissuading an attack, and the difficulty of acquiring the economic assets needed to attack the chain.
That is a debatable point. The TCB amounts to a single hash, that the global Ethereum userbase has had at least three months to converge on, with extremely obvious ways of establishing its correctness. If that can't be securely established, it's unlikely a consensus on the correct software distribution channels can be established either, meaning new users would still be completely fucked.
And there are other factors that establish the security of the network besides how much subjectivity plays a role in consensus, like the economic incentives dissuading an attack, and the difficulty of acquiring the economic assets needed to attack the chain.
> That is a debatable point. The TCB amounts to a single hash, that the global Ethereum userbase has had at least three months to converge on, with extremely obvious ways of establishing its correctness. If that can't be securely established, it's unlikely a consensus on the correct software distribution channels can be established either, meaning new users would still be completely fucked.
Sure, let's use Ethereum 2.0 as an example (but note that both myself and the linked paper talk about PoS in general.). Suppose I'm a newcomer to Ethereum 2.0 well after it launches. Suppose that, sometime after the launch but before my arrival on the scene, there's another DAO-like event where there's been a contentious chain split, and lots of bad blood on both sides of the split between developers, users, and exchanges. If I'm only interested in using the chain with the most economic activity, then why should I trust you and your servers to tell me who the initial validators are, especially now that you have a financial reason to tell me your preferred fork? It's like a bank asking me to choose between multiple sets of TLS certificates for all the banks I could conceivably use without giving me a chance to vet them -- why would I ever do this? And how would I even do this reliably?
In PoS, all I have to go on is your word against the others (this is the proof the paper makes) -- there is no way around this. In PoW, I can compare the hashpower between forks and use that to determine on my own which fork has the more valuable coin (and thus the larger economy for it). This, by itself, is a strictly more resilient system design.
What Paul Sztorc is saying is that in the event of contention between competing validator sets, both validators will spend resources equivalent to PoW trying to convince all these newcomers that their validators represent the most economic activity. This includes, but is not limited to, spending energy keeping your validator nodes from getting stolen or hijacked in a bid to change the validator set without consent. So, not only are the energy savings that TFA touts expected to disappear in the long run, but also the energy spend won't even help make the protocol more resilient.
Sure, let's use Ethereum 2.0 as an example (but note that both myself and the linked paper talk about PoS in general.). Suppose I'm a newcomer to Ethereum 2.0 well after it launches. Suppose that, sometime after the launch but before my arrival on the scene, there's another DAO-like event where there's been a contentious chain split, and lots of bad blood on both sides of the split between developers, users, and exchanges. If I'm only interested in using the chain with the most economic activity, then why should I trust you and your servers to tell me who the initial validators are, especially now that you have a financial reason to tell me your preferred fork? It's like a bank asking me to choose between multiple sets of TLS certificates for all the banks I could conceivably use without giving me a chance to vet them -- why would I ever do this? And how would I even do this reliably?
In PoS, all I have to go on is your word against the others (this is the proof the paper makes) -- there is no way around this. In PoW, I can compare the hashpower between forks and use that to determine on my own which fork has the more valuable coin (and thus the larger economy for it). This, by itself, is a strictly more resilient system design.
What Paul Sztorc is saying is that in the event of contention between competing validator sets, both validators will spend resources equivalent to PoW trying to convince all these newcomers that their validators represent the most economic activity. This includes, but is not limited to, spending energy keeping your validator nodes from getting stolen or hijacked in a bid to change the validator set without consent. So, not only are the energy savings that TFA touts expected to disappear in the long run, but also the energy spend won't even help make the protocol more resilient.
By the way, I believe that ETC is the 'true' Ethereum, and ETH was forever compromised by Buterik after that DAO fiasco. Code is Contract, but only until somebody decides otherwise.
(I fully understand that this belief of mine is not shared by the majority of Ethereum users.)
(I fully understand that this belief of mine is not shared by the majority of Ethereum users.)
Paxos solves a different consensus problem than PoW or PoS.
The former is for when you control and trust all nodes in your network. The latter is for the more difficult problem of consensus when you don't trust the nodes - otherwise known as the Byzantine Generals problem in distributed systems research.
The former is for when you control and trust all nodes in your network. The latter is for the more difficult problem of consensus when you don't trust the nodes - otherwise known as the Byzantine Generals problem in distributed systems research.
Pretty sure Paxos is easily extended to the byzantine setting with digital signatures (i.e. Byzantine Paxos has also been around forever). Also PBFT has been around since the 1980s.
Only distinction is classical consensus is permissioned whereas blockchains are typically permissionless.
Only distinction is classical consensus is permissioned whereas blockchains are typically permissionless.
Exactly. And paxos is not the best algorithm at it. There is Raft which is an alternative that is easier to understand.
Best in what metric?
raft and paxos are basically the same, besides leader election, which raft's take makes it simply easier and possible even more efficient[0]. I say "possible" because that depends very much on the consensus state over time, which in most actual workloads can be pretty stable, so at least in some practice, e.g., with hypervisor-cluster like we do, they perform almost the same. The simpler approach of raft can help if you create a library for it from scratch, or for easier understanding when coming into that space, otherwise the differences does not matter too much (in practice), IMO.
[0]: https://arxiv.org/abs/2004.05074
raft and paxos are basically the same, besides leader election, which raft's take makes it simply easier and possible even more efficient[0]. I say "possible" because that depends very much on the consensus state over time, which in most actual workloads can be pretty stable, so at least in some practice, e.g., with hypervisor-cluster like we do, they perform almost the same. The simpler approach of raft can help if you create a library for it from scratch, or for easier understanding when coming into that space, otherwise the differences does not matter too much (in practice), IMO.
[0]: https://arxiv.org/abs/2004.05074
I gather OP means best because it's understandable and easier to implement. Paxos has a tough reputation and even Google fucked it up in the beginning according to their Chubby distributed lock paper.
I went through that as it was happening.
Vitalik Buterin & co. have no integrity.
Most people should be aware about how they defrauded everybody with the DAO and subsequent fork of Ethereum. But, of course, it has been conveniently sweeped under the rug.
Vitalik Buterin & co. have no integrity.
Most people should be aware about how they defrauded everybody with the DAO and subsequent fork of Ethereum. But, of course, it has been conveniently sweeped under the rug.
In a PoW chain, Vitalik Buterin can talk, propose, and make patches to an Etherum client, but it means nothing unless miners approve the changes by running the updated client. He is the most important voice in that coin's ecosystem, but miners are the ones who decided to approve the fork.
Switching consensus to a different set of rules is entirely within the scope of a PoW system, and it's based on the same mechanism that gives legitimacy to the rest of the blockchain. The original Bitcoin paper explains this perfectly, so I won't replicate it here.
Switching consensus to a different set of rules is entirely within the scope of a PoW system, and it's based on the same mechanism that gives legitimacy to the rest of the blockchain. The original Bitcoin paper explains this perfectly, so I won't replicate it here.
> In a PoW chain, Vitalik Buterin can talk, propose, and make patches to an Etherum client, but it means nothing unless miners approve the changes by running the updated client. He is the most important voice in that coin's ecosystem, but miners are the ones who decided to approve the fork.
No, it means nothing unless users use, buy, and sell the coin. The miners' are subservient to them, assuming the miners are trying to make money. Miners do not decide or approve which set of consensus rules people decide to use, though they can, at a potentially quite significant loss, disrupt the functioning of the network somewhat.
No, it means nothing unless users use, buy, and sell the coin. The miners' are subservient to them, assuming the miners are trying to make money. Miners do not decide or approve which set of consensus rules people decide to use, though they can, at a potentially quite significant loss, disrupt the functioning of the network somewhat.
> Miners do not decide or approve which set of consensus rules people decide to use, though they can, at a potentially quite significant loss, disrupt the functioning of the network somewhat.
Miners are users. If they don't mine the blocks, the system literally doesn't work. Suppose that a large majority of miners refuses to upgrade for some reason. One part of the users can upgrade and wait for new blocks for a long time, while the users that don't upgrade can actually use the system as if nothing happened. Who is going to throw in the towel first? Maybe it's the miners, maybe it's the ETH holders, you can't know.
Miners are users. If they don't mine the blocks, the system literally doesn't work. Suppose that a large majority of miners refuses to upgrade for some reason. One part of the users can upgrade and wait for new blocks for a long time, while the users that don't upgrade can actually use the system as if nothing happened. Who is going to throw in the towel first? Maybe it's the miners, maybe it's the ETH holders, you can't know.
No, other users can easily institute a new lower difficulty in the upgrade to counteract the drop in POW from the defection of miners.
The subservience of miners to users at large in the determination of the market leading fork is best exemplified in the scenario of users switching to a PoS chain. In this case the miners have no power to sabotage the upgraded chain.
The subservience of miners to users at large in the determination of the market leading fork is best exemplified in the scenario of users switching to a PoS chain. In this case the miners have no power to sabotage the upgraded chain.
> No, other users can easily institute a new lower difficulty in the upgrade to counteract the drop in POW from the defection of miners.
Sure, you can alternatively anticipate that your fork will not get miner support and give it low difficulty, leaving it vulnerable to spam instead.
It doesn't change the fact that this fork now only has a tiny share of the hashrate, no better than some random altcoin. Why should it be considered the "real" chain? Because it has Vitalik Buterin's face on it? Maybe that works for Ethereum, but it wouldn't work for Bitcoin.
> The subservience of miners to users at large in the determination of the market leading fork is best exemplified in the scenario of users switching to a PoS chain.
...which hasn't happened yet. Of course, if your users don't care about hashrate or PoW, you can transition the software to anything. Maybe that's true for Ethereum. That doesn't make miners subservient. Either they're highly influential (PoW) or they're not part of the picture at all (PoS). There's no scenario in which you can force miners to adopt some change.
Sure, you can alternatively anticipate that your fork will not get miner support and give it low difficulty, leaving it vulnerable to spam instead.
It doesn't change the fact that this fork now only has a tiny share of the hashrate, no better than some random altcoin. Why should it be considered the "real" chain? Because it has Vitalik Buterin's face on it? Maybe that works for Ethereum, but it wouldn't work for Bitcoin.
> The subservience of miners to users at large in the determination of the market leading fork is best exemplified in the scenario of users switching to a PoS chain.
...which hasn't happened yet. Of course, if your users don't care about hashrate or PoW, you can transition the software to anything. Maybe that's true for Ethereum. That doesn't make miners subservient. Either they're highly influential (PoW) or they're not part of the picture at all (PoS). There's no scenario in which you can force miners to adopt some change.
>>There's no scenario in which you can force miners to adopt some change.
Your point was that miners' cooperation is required to successfully upgrade:
>>One part of the users can upgrade and wait for new blocks for a long time, while the users that don't upgrade can actually use the system as if nothing happened
My point is that an upgrade can be implemented without any cooperation from miners. A change to PoS would be the exemplar of that.
Your point was that miners' cooperation is required to successfully upgrade:
>>One part of the users can upgrade and wait for new blocks for a long time, while the users that don't upgrade can actually use the system as if nothing happened
My point is that an upgrade can be implemented without any cooperation from miners. A change to PoS would be the exemplar of that.
> Your point was that miners' cooperation is required to successfully upgrade
I didn't say that. My point is that miners will decide which chain gets the bigger hashrate and that chain is likely to be adopted as the "real" chain by users, if it's the vast majority of the miners. Furthermore, the prospect that there is no miner support would make users reluctant to upgrade in the first place.
> My point is that an upgrade can be implemented without any cooperation from miners. A change to PoS would be the exemplar of that.
What do you mean by "upgrade" then? Bitcoin was "upgraded" to Bitcoin Cash, an arguably better blockchain. Some people even consider it the "real" Bitcoin, but that's a minority opinion.
> A change to PoS would be the exemplar of that.
You can't use an event that hasn't happened yet as evidence to support your argument. Maybe there will be a flawless transition to PoS in Ethereum, due to influence of developers and the prospect of lower transaction fees. Maybe there will be ETH2 and ETH at the end, traded as distinct assets.
I didn't say that. My point is that miners will decide which chain gets the bigger hashrate and that chain is likely to be adopted as the "real" chain by users, if it's the vast majority of the miners. Furthermore, the prospect that there is no miner support would make users reluctant to upgrade in the first place.
> My point is that an upgrade can be implemented without any cooperation from miners. A change to PoS would be the exemplar of that.
What do you mean by "upgrade" then? Bitcoin was "upgraded" to Bitcoin Cash, an arguably better blockchain. Some people even consider it the "real" Bitcoin, but that's a minority opinion.
> A change to PoS would be the exemplar of that.
You can't use an event that hasn't happened yet as evidence to support your argument. Maybe there will be a flawless transition to PoS in Ethereum, due to influence of developers and the prospect of lower transaction fees. Maybe there will be ETH2 and ETH at the end, traded as distinct assets.
>>My point is that miners will decide which chain gets the bigger hashrate and that chain is likely to be adopted as the "real" chain by users, if it's the vast majority of the miners.
If that were true, then an upgrade that switches to PoS, i.e. a hashrate of zero, couldn't succeed, and it's safe to Ethereum's upgrade will succeed.
If that were true, then an upgrade that switches to PoS, i.e. a hashrate of zero, couldn't succeed, and it's safe to Ethereum's upgrade will succeed.
It is true for Bitcoin. People who buy into Ethereum are buying into a cult of personality, so it might not be true in that particular case. We will see.
That's a pretty inflammatory and totally unsubstantiated assertion, which reveals the baselessness of your entire argument, and the biases that motivate it.
> I didn't say that. My point is that miners will decide which chain gets the bigger hashrate and that chain is likely to be adopted as the "real" chain by users, if it's the vast majority of the miners. Furthermore, the prospect that there is no miner support would make users reluctant to upgrade in the first place.
Miners follow money. Users "decide" about prices. Miners are subservient and largely irrelevant. "Don't talk to the staff".
Miners follow money. Users "decide" about prices. Miners are subservient and largely irrelevant. "Don't talk to the staff".
If miners are largely irrelevant, why is the technologically inferior blockchain called Bitcoin, the superior one called Bitcoin Cash? Why do people pay outrageous fees on the Bitcoin chain and why is a Bitcoin unit worth 20x more than Bitcoin Cash? Why does every proposal without miner majority support fail? Why is Bitcoin called the most secure blockchain?
You are conflating cause and effect. Security budget of Bitcoin is defined by block reward. Miners just compete to get a larger piece of the pie. Bitcoin price (and thus security budget) are so high because Bitcoin is the default-go-to cryptocurrency. Media talk about two CCs: Bitcoin (in serious tone) and DogeCoin (as a joke). That what explains Bitcoin domination over all other CCs - dumb money.
Unless you are saying that folks who started 'stacking sats' during last two years are a bright bunch and they are capable of reasoning about CCs security.
> Why does every proposal without miner majority support fail?
Watch miners getting owned during Ethereum's transition to PoS.
Unless you are saying that folks who started 'stacking sats' during last two years are a bright bunch and they are capable of reasoning about CCs security.
> Why does every proposal without miner majority support fail?
Watch miners getting owned during Ethereum's transition to PoS.
I don't see how switching consensus from a proof of work system to proof of stake system "is entirely within the scope of a PoW system". If the majority of the network decides to do that, I understand why that makes it valid, and this is intentionally hyperbolic/don't think proof of stake is properly viewed like this, but to me that reads like "voting in a dictatorship is entirely within the scope of a democratic system". Technically it might be true, but the moment you make that valid democratic decision a decision like that can't happen the same way again.
Creating a fork is not a fraud. That was and is always a possibility, people were free to disagree, and Ethereum Classic represents that disagreement. If you went through that, then you would have ETH and ETC, and a choice of what to use, develop, mine, etc.
If I had created the DAO and I was the one going to lose 50 million, no fork would have happened, and Buterin (and you probably) would have told me, from their high horses, "though luck pal, you see, that's the beauty of smart contracts, they're final and no one should be able to do anything about it".
If you preach a set of principles and then backtrack on them when it's convenient for you, you're a hypocrite and have no integrity. If you do this on purpose, to deceive people, and there's money involved then you arrived at the definition of fraud, +- some extra words.
If you preach a set of principles and then backtrack on them when it's convenient for you, you're a hypocrite and have no integrity. If you do this on purpose, to deceive people, and there's money involved then you arrived at the definition of fraud, +- some extra words.
That's because the $50M were owned by a large percentage of the users of Ethereum, not a single person. It represented 15% of the total ETH in circulation, back when the currency was in a very nascent state and the flagship product that ETH provided that BTC didn't, was the DAO. When the DAO break happened ETH lost 60% of its value, so not only did 15% of people have their money stolen, but everyone across the board lost 60% of their ETH value. There was simply immense demand for people to get their money back, so people much preferred the fork that kept their money than the fork where the robber stole their money.
Simple as that, it's decentralized, that's the whole point, you fundamentally can't tell people which fork to believe, people use whatever fork they want. And the people mostly wanted the fork with their money in the DAO preserved. People who wanted the unaltered chain stayed there, no big deal.
Simple as that, it's decentralized, that's the whole point, you fundamentally can't tell people which fork to believe, people use whatever fork they want. And the people mostly wanted the fork with their money in the DAO preserved. People who wanted the unaltered chain stayed there, no big deal.
Exactly. Ethereum users and miners legitimized the patched chain and that's what continued forward.
A hacker minted free Bitcoin in 2010 and the chain forked to remove that transaction. But nobody's talking about that being a scam. How is the Dao hack any different?
A hacker minted free Bitcoin in 2010 and the chain forked to remove that transaction. But nobody's talking about that being a scam. How is the Dao hack any different?
When a pretty well known main ethereum developer lost $ 250 million due to a smart-contract bug, nothing was reverted
https://news.bitcoin.com/parity-calls-for-ethereum-hard-fork...
https://news.bitcoin.com/parity-calls-for-ethereum-hard-fork...
If you had been the creator there would still be absolutely nothing you could do to prevent a fork. You could throw a hissyfit and scream all you want on Twitter, but the fork would still happen.
can you be more specific?
on blockchains, differences of opinion are always solved with forks - and users follow the chain they agree with which makes it the most valuable chain.
[deleted]
Didn’t he just donate a billion to India?
He donated a billion dollar worth of an illiquid shitcoin[0] sent to him by the scammers who created.
0. https://shibatoken.com/
0. https://shibatoken.com/
Plus millions of dollars worth of ETH
That's a very simplistic way of putting it.
> Without mining, less electricity is used in mining, and less silicon is used in mining chips. Are these resources available for extra production? Yes. However, these “non-wasted” resources are offset by other resources which are “wasted”.
This would seem to be the main argument of that second article you posted summarizing the economics around PoS. The idea is that if you’re backing your crypto with itself (like in a PoS), the value that is locked in the staking system could be doing something else. (This is a very real point in that it doesn’t help decentralization—the same people that would stake their coin could spend that money mining Bitcoin.)
But it doesn’t seem to address any points in the conversation around the ethics of using electricity as a basis for proof of work.
This would seem to be the main argument of that second article you posted summarizing the economics around PoS. The idea is that if you’re backing your crypto with itself (like in a PoS), the value that is locked in the staking system could be doing something else. (This is a very real point in that it doesn’t help decentralization—the same people that would stake their coin could spend that money mining Bitcoin.)
But it doesn’t seem to address any points in the conversation around the ethics of using electricity as a basis for proof of work.
Electricity is the best form of energy to use as the basis for Proof of Work, because there is no pre-requisite on how to generate the required electricity.
compare: electric cars vs ice cars, electric cars can also end up consuming "dirty" electricity from coal fired plants, but that's an option vs. ice cars.
compare: electric cars vs ice cars, electric cars can also end up consuming "dirty" electricity from coal fired plants, but that's an option vs. ice cars.
Could the concept of proof-of-work be extended to prove that work was done cleanly, ie: using only renewable electricity rather than that produced from fossil fuels?
Perhaps renewable electricity producers could issue some sort of signed token which is then incorporated into the blockchain as proof that renewable electricity was purchased?
Perhaps renewable electricity producers could issue some sort of signed token which is then incorporated into the blockchain as proof that renewable electricity was purchased?
A digital signature can never prove anything about the world. And this doesn’t change by putting it in a blockchain.
You've now introduced a set of trusted entities validating something for consensus. Why bother with proof of work at that point? You only need it because you can't agree on a trusted subset of participants with the rest of the network.
If we had a way to do this, why would we just limit it to crypto?
I translate PoW as Proof of Waste.
This is a great comment paul_f, keep it up. You're adding a lot of value on HN.
What is ethically wrong with using electricity? Or have you skipped a few steps in your argument?
There are serious environmental concerns being raised about the amount of electricity being used to mine Bitcoin (see, e.g.: https://news.ycombinator.com/item?id=27135776). My comment does assume that less electricity use is good, because that's the context in which Ethereum posted this.
I'm mining crypto (very small amounts) as I as I type this, so I'm definitely not going to make the case that all crypto mining is an immoral waste of electricity. But I remain very interested in transition to a PoS system, so as to reduce the strain of crypto on the environment.
I'm mining crypto (very small amounts) as I as I type this, so I'm definitely not going to make the case that all crypto mining is an immoral waste of electricity. But I remain very interested in transition to a PoS system, so as to reduce the strain of crypto on the environment.
All human economic activity that uses electricity should be judged by the same standard then. I think the unstated premise of most of these arguments is that crypto provides no meaningful economic benefit to society, and thus the use of real resources (that sometimes produces pollution as a byproduct, depending on the source) is immoral.
"about to release" nothing
We use Eth 2.0 since December. Staking is even available with insurance on coinbase.
If you keep your copy pasta up to date, your FUD will be more believable.
We use Eth 2.0 since December. Staking is even available with insurance on coinbase.
If you keep your copy pasta up to date, your FUD will be more believable.
Energy usage and price are related. Should be interesting.
If there's no other utility than speculation like is the case with BTC, then yes I agree.
Paxos requires multiple parties to vote on what’s the correct result. The killer issue there is that it doesn’t solve a sybil attack - you either need a central authority in Paxos that chooses which machines run it, or you will end up with an attacker setting up a million machines in a cloud and overvoting everyone.
I think it's hypocritical to call this fraud: this contract itself was exploited for a loophole; if you declare it valid as allowed by the protocol, then simply changing the protocol (which is what was done temporarily) is also valid and according to the working of the system. I think it was within the spirit of the system to work this way.
The same people who loudly proclaimed "Code is Law" also wrote The DAO. Therefore, any action the code takes is legitimate.
Proof of Stake is already how our current financial system works. The people with the most money make the decisions. Proof-of-Work is provably resistant to this, as evidenced by the 2017 blocksize debate where almost every large miner and bitcoin company wanted to change the protocol and it was fought off through grassroots efforts. A PoS currency will be controlled by a cabal of US financial institutions, and indirectly by the US regulatory system. Be careful what you wish for.
It's not like cryptocurrencies achieved any of their goals so far anyway. If it's about facilitating pyramid schemes and creating a worldwide casino we might as well do it efficiently and without wasting insane amounts of resources.
I'm personally very happy for PoS and hope that it'll be successful, I would be a lot less annoyed with cryptocurrency bullshit if it wasn't so wasteful. With proof-of-stakes it basically joins the ranks of essential oils and other MLM scams, I'm fine with that.
I'm personally very happy for PoS and hope that it'll be successful, I would be a lot less annoyed with cryptocurrency bullshit if it wasn't so wasteful. With proof-of-stakes it basically joins the ranks of essential oils and other MLM scams, I'm fine with that.
Funny how everyone complains it's wasteful yet I see absolutely nobody complaining that they have some sort of electricity shortage because of Bitcoin miners.
The issue is not scarcity, it's pollution.
In a sense, we could say “lack of CO2 in the atmosphere” is the scarce resource which is being depleted.
( Maybe kind of like how you can think of something which can burn by absorbing oxygen, as releasing phlogiston (which is just a lack of oxygen, in a certain sense)? )
( Maybe kind of like how you can think of something which can burn by absorbing oxygen, as releasing phlogiston (which is just a lack of oxygen, in a certain sense)? )
Well, here's a datapoint for you: I've witnessed firsthand how a big miner farm resulted in full blackout in a small-ish city (~100k population).
Because shortages aren't the issue. The issue is using more power than all of Argentina for one currency. That is a lot of CO2 emissions for something that brings questionable value.
"The issue is using more power than all of Argentina for one currency. "
It's using the power of Argentina for an MLM/Ponzi scheme that doesn't apparently create any value.
If it were a) broadly useful and b) used less power it would be another story.
'Cruise ships' at least allow people to 'cruise'.
It's using the power of Argentina for an MLM/Ponzi scheme that doesn't apparently create any value.
If it were a) broadly useful and b) used less power it would be another story.
'Cruise ships' at least allow people to 'cruise'.
Why is it “not useful” to opt out of the inflationary issuance of major government currencies?
You’re not opting out of anything. At the end of the day, everyone is trading their crypto for dollars or another government currency.
Crypto is opting out of real money is the same way buying an unstable stock is. People are buying it hoping to get rich and convincing others to do the same, hoping they’ll sell it off before the price crashes and it’s completely worthless. Nobody is buying milk and eggs with GameStop stocks or *coins, and if they did, it’d make international news and that singular event would be referenced for 5 years by supporters as an example of how “real” their currency is.
Crypto is opting out of real money is the same way buying an unstable stock is. People are buying it hoping to get rich and convincing others to do the same, hoping they’ll sell it off before the price crashes and it’s completely worthless. Nobody is buying milk and eggs with GameStop stocks or *coins, and if they did, it’d make international news and that singular event would be referenced for 5 years by supporters as an example of how “real” their currency is.
> Crypto is opting out of real money is the same way buying an unstable stock is
Cryptocurrencies are indeed traded like meme stocks — their value is 100% based on narrative. The difference is meme stocks can’t be electronically transacted sans trusted third parties, which if you recall from the 2009 Satoshi paper, is the entire point of Bitcoin.
(There are other benefits to having a global currency of fixed supply controlled by computer algorithms, e.g. transparent supply metrics.)
> hoping they’ll sell it off before the price crashes and it’s completely worthless
What are the holders of Bitcoin supposed to sell it for, exactly? USD is being inflated. The stock market is insane. Housing is insane and comes with tax and maintenance liabilities virtually everywhere. Artwork is physical and illiquid. Government debt is increasingly dubious.
It would take governments becoming fiscally responsible and a return to a gold standard for Bitcoin to become less societally relevant. And even then, gold and gold-backed government monies would suffer from transparency issues and not being able to be electronically transacted sans trusted third parties.
I’m afraid there’s really just no good news here for people who refuse to invest in Bitcoin on general principle.
Cryptocurrencies are indeed traded like meme stocks — their value is 100% based on narrative. The difference is meme stocks can’t be electronically transacted sans trusted third parties, which if you recall from the 2009 Satoshi paper, is the entire point of Bitcoin.
(There are other benefits to having a global currency of fixed supply controlled by computer algorithms, e.g. transparent supply metrics.)
> hoping they’ll sell it off before the price crashes and it’s completely worthless
What are the holders of Bitcoin supposed to sell it for, exactly? USD is being inflated. The stock market is insane. Housing is insane and comes with tax and maintenance liabilities virtually everywhere. Artwork is physical and illiquid. Government debt is increasingly dubious.
It would take governments becoming fiscally responsible and a return to a gold standard for Bitcoin to become less societally relevant. And even then, gold and gold-backed government monies would suffer from transparency issues and not being able to be electronically transacted sans trusted third parties.
I’m afraid there’s really just no good news here for people who refuse to invest in Bitcoin on general principle.
I think the point is that at present the majority of cryptocurrency usage is in investment, trading, and hoarding- speculation as opposed to actually using it as a currency for everyday transactions.
> I think the point is that at present the majority of cryptocurrency usage is in investment, trading, and hoarding- speculation as opposed to actually using it as a currency for everyday transactions.
Which is in practice really no different from meme stocks today.
Meme stocks which are only transactable via trusted third parties and are inherently trapped inside the walled gardens of various centralized brokerage firms.
Conversely, Bitcoin can be self-custodied with FOSS, and is trivially spendable via TTPs and L2 protocols. But yes, in practice people are using cryptocurrencies as speculative stores of value almost exclusively.
Which is in practice really no different from meme stocks today.
Meme stocks which are only transactable via trusted third parties and are inherently trapped inside the walled gardens of various centralized brokerage firms.
Conversely, Bitcoin can be self-custodied with FOSS, and is trivially spendable via TTPs and L2 protocols. But yes, in practice people are using cryptocurrencies as speculative stores of value almost exclusively.
> Which is in practice really no different from meme stocks today.
Which is exactly my point.
Crypto is a decentralized meme stock. Unless crypto finds a way to become just a normal currency, it'll go the way of all memes over time: dead, once everyone and their grandma is sharing it.
Which is exactly my point.
Crypto is a decentralized meme stock. Unless crypto finds a way to become just a normal currency, it'll go the way of all memes over time: dead, once everyone and their grandma is sharing it.
> Crypto is a decentralized meme stock
Yes — insofar as cryptocurrency market valuation is based entirely on narrative.
No — in terms of it being possible to spend and store bitcoin sans trusted third parties.
(E.g. a Chilean real estate project developer — a Canadian expat without Chilean residency — once explained to me he had no choice but to use bitcoin in SA because the banks there refused to process his company’s regular large wire transfers.)
Bitcoin is in fact a bearer instrument, regardless of your beliefs about its credibility. How many national currencies are bearer instruments also without credibility in your eyes, for instance, and where does Bitcoin rank on that list?
> Unless crypto finds a way to become just a normal currency, it'll go the way of all memes over time: dead, once everyone and their grandma is sharing it.
That’s a narrative no better than any other which gets fielded every day on the crypto markets, although the benefactor of it is unclear to me. Cash and cryptocurrency are incredibly liquid compared to competing PMs and real estate. The S&P is down since 1970 when measured in gold, and central banks are racing to inflate fiat currencies.
Yes — insofar as cryptocurrency market valuation is based entirely on narrative.
No — in terms of it being possible to spend and store bitcoin sans trusted third parties.
(E.g. a Chilean real estate project developer — a Canadian expat without Chilean residency — once explained to me he had no choice but to use bitcoin in SA because the banks there refused to process his company’s regular large wire transfers.)
Bitcoin is in fact a bearer instrument, regardless of your beliefs about its credibility. How many national currencies are bearer instruments also without credibility in your eyes, for instance, and where does Bitcoin rank on that list?
> Unless crypto finds a way to become just a normal currency, it'll go the way of all memes over time: dead, once everyone and their grandma is sharing it.
That’s a narrative no better than any other which gets fielded every day on the crypto markets, although the benefactor of it is unclear to me. Cash and cryptocurrency are incredibly liquid compared to competing PMs and real estate. The S&P is down since 1970 when measured in gold, and central banks are racing to inflate fiat currencies.
If you think that buying into an MLM Ponzi Scheme is a good hedge against inflation, all the power to you.
But in the long run, it's not.
There are no cryptos which effectively server as either currencies or good stores of value. There are always many better alternatives in both cases.
If you want to opt out of currency - that's rational - you can buy land, low-overhead ETFs, indexes, bonds, gold, other currencies, Gold, commodities, and all of the above.
Consider the obvious problem with your stated benefits of crypto: for every supposed benefit, there are already other, better solutions.
The only thing crypto can do, that others cannot, is make you rich, quickly, by doing nothing, by getting others in to the pyramid.
In the long run, crypto has a role, but there's no crypto on the horizon that's really useful. Some day.
But in the long run, it's not.
There are no cryptos which effectively server as either currencies or good stores of value. There are always many better alternatives in both cases.
If you want to opt out of currency - that's rational - you can buy land, low-overhead ETFs, indexes, bonds, gold, other currencies, Gold, commodities, and all of the above.
Consider the obvious problem with your stated benefits of crypto: for every supposed benefit, there are already other, better solutions.
The only thing crypto can do, that others cannot, is make you rich, quickly, by doing nothing, by getting others in to the pyramid.
In the long run, crypto has a role, but there's no crypto on the horizon that's really useful. Some day.
Meme stock drum beating over social media isn’t the same thing as MLM.
What’s the average PE ratio up to now on the S&P?
Land, where? Real estate is just as inflated as the stock market if not moreso; it also comes with a tax liability at minimum, and is far less liquid than equities, cash and cryptos.
PMs are no different from cryptocurrency in any meaningful respect, and are actively worse on many fronts — e.g. where do you custody it, how do you verify it, how do you exchange it easily, how do you prevent it from being seized or stolen.
Look, there’s a reason humans invented fiat currency. It would just be better if that currency were A) global, B) of fixed supply, and C) controlled by computer algorithms instead of political institutions.
> Consider the obvious problem with your stated benefits of crypto: for every supposed benefit, there are already other, better solutions.
That’s mostly true of non-money — read: non-bearer asset — use cases, like those epitomized by Ethereum and its many competitors.
What’s the average PE ratio up to now on the S&P?
Land, where? Real estate is just as inflated as the stock market if not moreso; it also comes with a tax liability at minimum, and is far less liquid than equities, cash and cryptos.
PMs are no different from cryptocurrency in any meaningful respect, and are actively worse on many fronts — e.g. where do you custody it, how do you verify it, how do you exchange it easily, how do you prevent it from being seized or stolen.
Look, there’s a reason humans invented fiat currency. It would just be better if that currency were A) global, B) of fixed supply, and C) controlled by computer algorithms instead of political institutions.
> Consider the obvious problem with your stated benefits of crypto: for every supposed benefit, there are already other, better solutions.
That’s mostly true of non-money — read: non-bearer asset — use cases, like those epitomized by Ethereum and its many competitors.
Now don’t you see that of all the alternatives you offered (stock, land, gold…) all require some degree of state interaction, or non-portability. Bitcoin is weightless. Easy to move. Trustless. Not dependent on any state or monetary system. It is this portability, trustlessness and independence from the state, and even lack of interaction with traditional financial organizations is what provides value.
Why is the price of BTC given in US dollars? Is it really that independent of "major government currencies"?
Because people like you wouldn't understand if I said, "I'm just giving my two sats."
You can do that by buying gold, or frankly buying any stock on the market.
The S&P is actually down since 1970 as measured in gold. Gold is strictly worse than Bitcoin on every front save for its ability to be used offline.
(But even offline, gold transactions would require a great deal of care wrt anti-counterfeiting, and this is an edge case given gold’s primary use is as a speculative store of value.)
(But even offline, gold transactions would require a great deal of care wrt anti-counterfeiting, and this is an edge case given gold’s primary use is as a speculative store of value.)
Cruise ships are hideously wasteful, but I don't see anybody complaining that they have some sort of gas shortage because of cruise ships specifically. Gas prices are what they are, and consumers complain in very general terms because they don't have good visibility into the global oil markets.
For all I know off the top of my head (where this comment is coming from), cruise ships aren't a significant driver of oil prices. I'd expect the scale of the shipping market to dwarf their effect, and I'd expect production to rise to meet their relatively steady demand, though I could be wrong about either or both. None of that (whatever the answers may be) means they aren't hideously wasteful in absolute and very meaningful terms.
For all I know off the top of my head (where this comment is coming from), cruise ships aren't a significant driver of oil prices. I'd expect the scale of the shipping market to dwarf their effect, and I'd expect production to rise to meet their relatively steady demand, though I could be wrong about either or both. None of that (whatever the answers may be) means they aren't hideously wasteful in absolute and very meaningful terms.
I mean on HN you really do see a very anti-cruise ship sentiment whenever the topic comes up. They are really really wasteful and worse than commercial ships since they pollute the very water people want to visit for its beauty.
I wouldn’t really be all that upset to see them banned but there’s no momentum for it. Crypto just happens to be really visible to a lot of people who see no personal benefit for its existence.
I wouldn’t really be all that upset to see them banned but there’s no momentum for it. Crypto just happens to be really visible to a lot of people who see no personal benefit for its existence.
> I mean on HN you really do see a very anti-cruise ship sentiment whenever the topic comes up.
For sure, and in other contexts too, but I don’t think the issue of not being able to buy gas because cruise ships exist comes up often (mostly because AFAICT it’s not real). And that’s really my point: it’s perfectly valid to complain about cruise ships being wasteful without being able to point to some incredibly obvious consumer-facing manifestation of that waste, because them being wasteful (they are, obviously) isn’t predicated on any such manifestation. Despite the vast scale of their waste, they’re a drop in the bucket that is the global economy.
For sure, and in other contexts too, but I don’t think the issue of not being able to buy gas because cruise ships exist comes up often (mostly because AFAICT it’s not real). And that’s really my point: it’s perfectly valid to complain about cruise ships being wasteful without being able to point to some incredibly obvious consumer-facing manifestation of that waste, because them being wasteful (they are, obviously) isn’t predicated on any such manifestation. Despite the vast scale of their waste, they’re a drop in the bucket that is the global economy.
I don't know what (if any) effect Bitcoin mining has had on electricity prices, but we do have a GPU shortage because of Bitcoin miners.
It's a bit ridiculous when regular stores have lotteries to grant you the privilege of purchasing one of a scarce number of GPUs... at regular retail price.
It's a bit ridiculous when regular stores have lotteries to grant you the privilege of purchasing one of a scarce number of GPUs... at regular retail price.
Bitcoin doesn't use GPUs for mining. Bitcoin mining is performed with custom ASIC hardware. GPUs cannot compete as they're not built for purpose.
The problem is with negative externalities.
Then you're probably not from Iran because crypto miners have routinely sparked power outages there.
https://observers.france24.com/en/middle-east/20210203-in-ir...
https://observers.france24.com/en/middle-east/20210203-in-ir...
It's going to happen eventually.
[deleted]
But like, what were cryptocurrency's goals again?
Originally anarchist anti-government folks needed some medium of exchange for their future plans and bitcoins could theoretically fill that niche, being trustless. We could argue that anarchy ideology is not good, but at least it was some ideology and tool fit the purpose. Now crypto is 99.99% occupied by get-rich-quick folks with zero principles.
Not anarchists, ancaps and right libertarians.
Crypto-currency has inbuilt hierarchy, as people with more hashrate have proportional power over the monetary system. This is more hierarchy than an elected chairman of the fed, for example.
Crypto-currency has inbuilt hierarchy, as people with more hashrate have proportional power over the monetary system. This is more hierarchy than an elected chairman of the fed, for example.
Serious questions... I genuinely don't know... but I assume a country could block access to the "blockchain" of any crypto currency, just like some of them do with access to Twitter, Google, Facebook, Github, etc.
Is there way to continue using your Bitcoin in this case? Or is it effectively the same as having a bank account frozen (i.e. you can't conduct any transactions if you don't have broad connectivity).
Or am I misunderstanding something fundamental? (I realize it's probably not a single domain/endpoint like other sites I referenced, but the traffic probably has other characteristics that would make it easy for a state to disable).
Is there way to continue using your Bitcoin in this case? Or is it effectively the same as having a bank account frozen (i.e. you can't conduct any transactions if you don't have broad connectivity).
Or am I misunderstanding something fundamental? (I realize it's probably not a single domain/endpoint like other sites I referenced, but the traffic probably has other characteristics that would make it easy for a state to disable).
You can receive the blockchain via satellite and send transactions over email, Signal, or whatever. https://blockstream.com/satellite/
Or you could just use Tor.
Or you could just use Tor.
Block live access? Maybe.
Block access entirely? Only if they were willing to stop all communications and travel in/out of the country. You could carry keys on paper and instructions in your head and apply them on the "free side" of the border. I don't think it's practically possible to entirely prevent such transactions. You can make them illegal; you can make them difficult; you probably can't stop them as an individual country.
Block access entirely? Only if they were willing to stop all communications and travel in/out of the country. You could carry keys on paper and instructions in your head and apply them on the "free side" of the border. I don't think it's practically possible to entirely prevent such transactions. You can make them illegal; you can make them difficult; you probably can't stop them as an individual country.
You can’t block access to a peer to peer network unless you block internet access (in which case you can access it via satellite). Blocking Twitter/Github etc access is pretty easy since they are centralized legal entities to which you can issue subpoenas, force the ISPs to block their DNS, raid their servers etc.
Blocking based on traffic analysis is easily bypassed by using a VPN/tor
Blocking based on traffic analysis is easily bypassed by using a VPN/tor
The only way to completely block access to the block chain thats remotely feasible are repeated 51% attacks and an impediment to general access.
That means raiding mining farms while limiting their number by limiting the size of Bitcoin.
Its only something the US or China could do.
Otherwise no, there is no way of completely blocking it. There are ways of making it impractical for the vast majority, though.
That means raiding mining farms while limiting their number by limiting the size of Bitcoin.
Its only something the US or China could do.
Otherwise no, there is no way of completely blocking it. There are ways of making it impractical for the vast majority, though.
> Crypto-currency has inbuilt hierarchy, as people with more hashrate have proportional power over the monetary system.
If this is the case, please illuminate us why they don't use their influence to increase block size or block rewards.
If this is the case, please illuminate us why they don't use their influence to increase block size or block rewards.
It's very simple. The price of Bitcoin converges towards the price of mining it. Making mining bitcoin easier will only lower its price in the long run. So increasing block size will only increase the amount of hashrate in the system and thus the profit per dollar invested will not change that much.
Given this information, is it worth rocking the boat while mining is still very profitable? No.
Given this information, is it worth rocking the boat while mining is still very profitable? No.
That's a shortsighted approach, in my opinion. The same pattern is observed in inflation: long-term, money printing has zero benefits. Why central banks do it anyway? Because there's a first mover advantage. Also, history has already showed us that, when given the opportunity, miners are in favor of larger rewards.
No, money printing has a serious advantage. It incentivize investment while taxing people who hold their money unproductively.
Yes, it incentivizes investing in better store of value like bitcoin (or gold, or Apple stocks).
Apple is only protected from inflation insofar as it makes real investments. Bitcoin is not a very good and significant store of value.
> The price of Bitcoin converges towards the price of mining it.
Isn't it the opposite. The cost of mining converges towards the current price of Bitcoin. Because when miners get Bitcoin as a reward they immediately sell it for profit.
Isn't it the opposite. The cost of mining converges towards the current price of Bitcoin. Because when miners get Bitcoin as a reward they immediately sell it for profit.
Well, yes, you could see it that way.
The idea that anarchists reject all hierarchies is baseless.
Just hierarchies that don’t contain themselves at the top.
They don't reject all hierarchies. They seek to minimize them and eliminate unjustified hierarchy.
Trading democratic control for oligarchical control is increasing hierarchy and there's no obvious benefit.
The core of anarchy is reticence towards hierarchy.
Trading democratic control for oligarchical control is increasing hierarchy and there's no obvious benefit.
The core of anarchy is reticence towards hierarchy.
FWIW I think some "left-wing market anarchists" like it as well. Further left probably not but they also just don't like markets.
Which ones? I know a lot of them and they really don't like it.
IME left wing market anarchists that are moderate enough to allow an exploitative hierarchy like bitcoin are also moderate enough to allow fiat currencies that are more democratic, and those that are radical enough also won't like bitcoin's hierarchy.
Check out what they say on https://c4ss.org. Maybe opinions have changed over the years though.
Looks like mixed feelings from William Gillis (who is part of c4ss):
https://twitter.com/search?q=from%3Arechelon%20bitcoin&src=t...
https://twitter.com/search?q=from%3Arechelon%20bitcoin&src=t...
Ah yes, I know about c4ss. They are a major force in left market anarchists in the anglophone world, but looking through their website a lot of of Bitcoin content is written by agorists.
C4SS style anarchists and agorists are definitely on the economic right of even free market anarchists (mainly mutualists, decentral planners that admit a free market, etc, anarcho-syndicalists, mixed-economy libsocs, Bakuninists, etc...) in that they consider the state a far greater issue than capitalism. Most anarchists that like markets (which is most of them in some way) see capitalism as an equal or greater threat than the State as at least the State may share some power with the people in some cases.
C4SS style anarchists and agorists are definitely on the economic right of even free market anarchists (mainly mutualists, decentral planners that admit a free market, etc, anarcho-syndicalists, mixed-economy libsocs, Bakuninists, etc...) in that they consider the state a far greater issue than capitalism. Most anarchists that like markets (which is most of them in some way) see capitalism as an equal or greater threat than the State as at least the State may share some power with the people in some cases.
And possibly those ideological people were also get-rich-quick people as well.
Honest question: does it matter? As with all things, the purpose of the system is what it does. And right now, for the vast majority of people, the purpose of crypto is to make numbers go up; the original principles only matter to a handful of OGs. Come crypto winter, the purpose of the system will likely shift back towards its original principles, since only the OGs will hodl on.
Originally? Freedom.
I can't find it right now, but I saw this infographic the other day showing how the ideology/goals of cryptocurrency have shifted over time. Something along going from a literal currency to replace the dollar to going toward its present definition as some mix of speculative asset and inflation hedge.
the funny thing is that cryptocurrency was fairly useful as a currency in 2014. There were a number of bitcoin ATMs in my city, and a number of businesses where you could spend it. It seems to me that the whole block-size debate proved the failure of the system, since the interests of a few ultimately triumphed over the best interests of the system as a whole.
> since the interests of a few ultimately triumphed over the best interests of the system as a whole
Is it in the best interests of "the system" (interesting choice of words... instead of "the many") to require enterprise infrastructure in order to run a node?
Is it in the best interests of "the system" (interesting choice of words... instead of "the many") to require enterprise infrastructure in order to run a node?
If those are the sacrifices you have to make then it failed completely.
Bitcoin used to be a currency, now it's nothing more than a speculative asset. Are "the many" being served by that?
Are “the many” being served by USD inflation rn?
And can you name a cryptocurrency which is anything other than a speculative store of value, and not something whose market cap is based on drum beating over social media?
And can you name a cryptocurrency which is anything other than a speculative store of value, and not something whose market cap is based on drum beating over social media?
> Are “the many” being served by USD inflation rn?
That's a nice false equivalency, but I can go to the store and buy bread with USD. Where can I do that with cryptocurrency?
> And can you name a cryptocurrency which is anything other than a speculative store of value, and not something whose market cap is based on drum beating over social media?
Yes! Bitcoin circa 2014
That's a nice false equivalency, but I can go to the store and buy bread with USD. Where can I do that with cryptocurrency?
> And can you name a cryptocurrency which is anything other than a speculative store of value, and not something whose market cap is based on drum beating over social media?
Yes! Bitcoin circa 2014
magic internet money
btw, it is a success.
If not for crypto two companies would have a global monopoly on online transactions and able to banish you from global economy on a whim
btw, it is a success.
If not for crypto two companies would have a global monopoly on online transactions and able to banish you from global economy on a whim
Make it easier to pay ransom demands when you have malware attack you. Used to have to have a pile of cash dumped in a given area, high risk for the collector. Far easier now.
The goals can be technological, cultural and macroeconomic ones. I had a presentation recently on this topic:
https://capitalgram.com/posts/history-of-cryptocurrencies/
https://capitalgram.com/posts/history-of-cryptocurrencies/
The original Bitcoin paper was published late 2008 and much of its original momentum was a direct response to the clear failures of the financial institutions at the time.
I agree with most everything you just wrote. But, note that the problem with Proof of Stake, in this thinking, is that you won't be able to buy tokens from your local energy company, when the regulators shut your blockchain down.
Monero is closest to the original cryptocurrency dream: decentralized and private currency. It's most definitely not "bullshit".
How is that different from how Shiba Inu token works? Genuinely curious
Monero also has active, on-going development. Shiba Inu, Dogecoin, and all the other meme coins that have sprung up as a result of the smell of free money in the air were created in the space of a couple of hours using Ctrl-C Ctrl-V of existing open source code, then released to the world with no care to actual function or any further effort other than pulling the rug when enough suckers have bought in.
Can you give some sources for the development progress of Monero vs the meme coins you mentioned ? AFAIK at least Shiba Inu ecosystem is under development, namely their own exchange and staking system.
Monero, which has been around since 2014, has a nice roadmap page here: https://www.getmonero.org/resources/roadmap/
and a community workgroups page here: https://www.getmonero.org/community/workgroups/
and here's a Twitter-article (ugh) from a maintainer of Monero regarding an attempted attack on Monero's privacy which refers to a number of privacy enhancements to Monero that have been implemented over the last three years: https://threadreaderapp.com/thread/1326130648491417602.html
Whether you take this as proof of legitimacy or otherwise, the IRS has a bounty of $625,000 for anyone who can crack the privacy aspect of Monero: https://securityboulevard.com/2020/09/can-you-crack-monero-i...
Skip to the conclusion of this review of Shiba Inu coin: https://www.coinbureau.com/review/shiba-inu/
and a community workgroups page here: https://www.getmonero.org/community/workgroups/
and here's a Twitter-article (ugh) from a maintainer of Monero regarding an attempted attack on Monero's privacy which refers to a number of privacy enhancements to Monero that have been implemented over the last three years: https://threadreaderapp.com/thread/1326130648491417602.html
Whether you take this as proof of legitimacy or otherwise, the IRS has a bounty of $625,000 for anyone who can crack the privacy aspect of Monero: https://securityboulevard.com/2020/09/can-you-crack-monero-i...
Skip to the conclusion of this review of Shiba Inu coin: https://www.coinbureau.com/review/shiba-inu/
Monero is an actual coin with a blockchain, mineable by normal people, low fees, good transaction speed and always on privacy features that actually work. Shib is just a meme token created to compete with dogecoin.
Fair enough :)
Monero has some super advanced tech involved. Here is an okay review https://www.youtube.com/watch?v=O58STfvxZnY
Shiba Inu is just a token on the Etherum chain.
There is no privacy and they've done some weird stuff to play the numbers.
E.g. they sent half of all SHIB to the creator of Etherum, why? Because that doubles the "circulating supply" and therefore market cap while not increasing the available supply at all.
This is a scheme to artificially increase the market cap, which mostly worked because VB burned 95% of all the SHIB he got & it got a lot of press.
There is no privacy and they've done some weird stuff to play the numbers.
E.g. they sent half of all SHIB to the creator of Etherum, why? Because that doubles the "circulating supply" and therefore market cap while not increasing the available supply at all.
This is a scheme to artificially increase the market cap, which mostly worked because VB burned 95% of all the SHIB he got & it got a lot of press.
Hm. That makes sense, I guess the lack of privacy of the Ethereum chain could be considered as a feature in terms of transparency. Good point about the market cap, do you think Shiba Inu wouldn’t have gotten as popular having VB not giving up control of the token?
Let me be clear, Shiba Inu is a shitcoin, if someone gave me any I'd sell it in a second.
It got popular before VB burned it.
It got popular before VB burned it.
What do you mean? We totally got what we wanted; we have a deflationary currency we trade for goods and services.
I'm 100% serious here; it's been working fine for quite a number of years. The fiat conversion is pretty noisy but BTC on average goes up in value in fiat terms at a fast pace. BTC is easy to turn it into stuff. No one has ever censored my transactions or asked for ID. Even if you buy something really expensive or totally illegal. It has literally already worked. It started working the day that guy bought a pizza and it hasn't stopped working.
I'm 100% serious here; it's been working fine for quite a number of years. The fiat conversion is pretty noisy but BTC on average goes up in value in fiat terms at a fast pace. BTC is easy to turn it into stuff. No one has ever censored my transactions or asked for ID. Even if you buy something really expensive or totally illegal. It has literally already worked. It started working the day that guy bought a pizza and it hasn't stopped working.
And why would you want a deflationary currency? If you see it as an investment, then of course. But for the general economy it is better when people spend their money sooner rather than later, and capital gets invested where it does something useful.
Ah, the old Keynesian argument...
Um yes? And reality consistently confirms Keynsian/demand-side modeling.
Keynsian demand-driven economy is the root of all evil, i.e. market bubbles that pop eventually. Everyone except market speculators would be much better of with supply-driven economy and small deflation.
For one it would provide incentive to save money and spend it wisely, instead of mindlessly buying all that unnecessary crap.
For one it would provide incentive to save money and spend it wisely, instead of mindlessly buying all that unnecessary crap.
> Everyone except market speculators
And debtors. The very notion of taking out a loan for something becomes nigh impossible with a deflationary currency, particularly one as deflationary as Bitcoin. Seeing as how the lower and middle class tend to take out loans for all sorts of reasons (since if they had the sort of cash lying around to buy homes and cars and appliances and such outright, they probably would be neither lower nor middle class), the direct harm such a currency would have is readily apparent.
And debtors. The very notion of taking out a loan for something becomes nigh impossible with a deflationary currency, particularly one as deflationary as Bitcoin. Seeing as how the lower and middle class tend to take out loans for all sorts of reasons (since if they had the sort of cash lying around to buy homes and cars and appliances and such outright, they probably would be neither lower nor middle class), the direct harm such a currency would have is readily apparent.
While I'm skeptical of homeownership and car ownership in particular for other reasons, absolutely a healthy capitalist economy needs easy access to credit for potentially socially useful activities.
Strange reading of Keynes. I never read him advocate for rampant wasteful consumerism. In fact many of his arguments about government intervention (investment) are derived by his observation that consumption is prone to drying up.
I also don't see how Keynes and speculative frenzies are connected, considering they existed long before his Treatise or General Theory.
I also don't see how Keynes and speculative frenzies are connected, considering they existed long before his Treatise or General Theory.
Keynes advocated for rate cuts as a remedy for crises. His reasoning being that cheap credit will stimulate demand for consumer goods. It's almost the textbook definition of "wasteful consumerism".
Indeed, and bubbles are in assets not goods to consumption, and stimulus is supposed to boost consumption in the first order, so the comparison seems even more far fetched.
> ... his observation that consumption is prone to drying up.
Now that wording has a certain ring to it (in my ears).
"Consumption prone to drying up"? As if consumption alone were of any value. As if consumption were the foundation of all well being. As if it were something that needs to be tended to like some garden with flower beds.
Sounds more like ideology to me instead of reasoning.
Now that wording has a certain ring to it (in my ears).
"Consumption prone to drying up"? As if consumption alone were of any value. As if consumption were the foundation of all well being. As if it were something that needs to be tended to like some garden with flower beds.
Sounds more like ideology to me instead of reasoning.
Keynesian isn't a value judgement on whether various sorts of consumption are good. It's firstly a description of how capitalist economies actually work, and secondarily a toolkit of policy based on that description. The focus on demand is primary because how it affects the economy writ large.
In fact, Keynes himself famously thought that would be working 15 hours a week by now instead of...well...wherever all the work is going, some of which I suppose is propping up the consumption you don't approve of.
In fact, Keynes himself famously thought that would be working 15 hours a week by now instead of...well...wherever all the work is going, some of which I suppose is propping up the consumption you don't approve of.
It's a pity then that supply side economy doesn't work.
Ah another free market neoliberalist. You do know that government intervention during Keynesian’s time was incredibly helpful for the macro economy - providing jobs and investment into long running avenues. Neoliberalism purports that the private sector will invest diligently but really we’re seeing companies use shortermism as a technique to just make profit.
And Keynes has empirically done very well, thank you.
Well, now that it exists, what would you as an individual rather keep your cash in compared to inflationary fiat held in an account with negative interest rate?
Genuine investments in companies, real estate, and other hard assets which actually produce cash flow rather than BTC whose value depends on the madness of crowds and the tweets of eccentric billionaires.
Investment portfolios exist. They also reduce the cost of loans, thus making it easier for companies to grow and speeding up innovation. In comparison, the only thing "investing" in cryptocurrency does, is encourage larger economies of scale for cryptocurrency (which, side note, has built in mechanisms to actively prevent it from becoming more efficient).
I don't know a single person who holds their money in 'cash'. They invest it in the market, real-estate, business development, etc.
I am one who holds cash. Not all, but not an insignificant portion either. I have a mixture of assets. Why not invest that cash? None of the investment opportunities that I see fit my risk profile. Example: I'm holding my stocks now, but I do not plan to buy more.
The average middle class (and below) person in any highly developed country has a mixture of assets, dominated by their house and cash savings in a bank. Most don't directly own financial assets -- stocks, bonds, etc. However, they are invested in a pension (national or private) that will certainly invest in financial assets.
The average middle class (and below) person in any highly developed country has a mixture of assets, dominated by their house and cash savings in a bank. Most don't directly own financial assets -- stocks, bonds, etc. However, they are invested in a pension (national or private) that will certainly invest in financial assets.
[deleted]
> we have a deflationary currency we trade for goods and services.
Such a vanishingly small percentage of cryptocurrency activity is actually used for trade (as opposed to speculation) that it is a novelty and newsworthy when it actually happens.
E.g. We all know about that guy who bought a pizza with BTC. And when Tesla decided to allow purchases via BTC (which they have since backtracked) it was a media sensation and market-moving. This is not normal.
Such a vanishingly small percentage of cryptocurrency activity is actually used for trade (as opposed to speculation) that it is a novelty and newsworthy when it actually happens.
E.g. We all know about that guy who bought a pizza with BTC. And when Tesla decided to allow purchases via BTC (which they have since backtracked) it was a media sensation and market-moving. This is not normal.
Is this really true? I buy stuff with crypto all the time.
It's how I learned about crypto in the first place- back ~2015, I ordered legitimate, had-a-prescription medication for my father from overseas using bitcoin, as it was the only way I could get it, as the even-with-insurance price in the states was beyond our means. Wound up doing so for several years, and it was much easier than dealing with the 'normal' ways of payment. A lot of the things I order from overseas in general I pay for in crypto, simply because it's cheaper & easier than doing regular currency conversions. I'm talking about regular things, like specialty foods, or everyday items I can't find in the states. Nothing even close to grey market or sketchy. Just regular financial transactions, using crypto.
I'm sure by numbers my <$100-equivalent purchases are small potatoes, but how is that not also true for regular money? There are billions of dollars of capital sloshing around in the markets, but that doesn't make my personal-level spending not useful.
It's how I learned about crypto in the first place- back ~2015, I ordered legitimate, had-a-prescription medication for my father from overseas using bitcoin, as it was the only way I could get it, as the even-with-insurance price in the states was beyond our means. Wound up doing so for several years, and it was much easier than dealing with the 'normal' ways of payment. A lot of the things I order from overseas in general I pay for in crypto, simply because it's cheaper & easier than doing regular currency conversions. I'm talking about regular things, like specialty foods, or everyday items I can't find in the states. Nothing even close to grey market or sketchy. Just regular financial transactions, using crypto.
I'm sure by numbers my <$100-equivalent purchases are small potatoes, but how is that not also true for regular money? There are billions of dollars of capital sloshing around in the markets, but that doesn't make my personal-level spending not useful.
I don't know what jurisdiction you are in, but as far as I know, crypto is treated as a capital asset in the US, not a currency, so I'm unprepared to deal with the tax consequences of using it as a currency.
If I paid for things with it then every transaction would require calculating capital gains/losses. And it's far worse than conventional assets like stocks because at least the brokers track that stuff for you.
If I paid for things with it then every transaction would require calculating capital gains/losses. And it's far worse than conventional assets like stocks because at least the brokers track that stuff for you.
You're absolutely right that the current US tax laws are a real problem for crypto-as-a-currency. I do expect better law to prevail over time.
We can have the cake and eat it too: it's called stablecoin.
1. Park your ETH/WBTC/BAT (a whole bunch of other tokens) on a smart contract as collateral so that you can withdraw a token that is pegged to the USD, or just go to a regular exchange to buy the stablecoin.
2. Use this token to make transactions online.
Tax advantages: you are not selling your volatile crypto, so you don't have to declare any sales or profits. On the other hand, if the crypto you place loses so much in value to the point where the smart contract liquidates you, you don't need to return the stable token and you can get a tax write-off.
1. Park your ETH/WBTC/BAT (a whole bunch of other tokens) on a smart contract as collateral so that you can withdraw a token that is pegged to the USD, or just go to a regular exchange to buy the stablecoin.
2. Use this token to make transactions online.
Tax advantages: you are not selling your volatile crypto, so you don't have to declare any sales or profits. On the other hand, if the crypto you place loses so much in value to the point where the smart contract liquidates you, you don't need to return the stable token and you can get a tax write-off.
This isn't how tax laws work. Exchanging one cryptocurrency for another is a taxable event. You are committing tax fraud.
It's not an exchange. It's a loan with a collateral. It's only an "exchange" if you get liquidated, which means that you were forced to sell it at a loss.
Doesn't this assume you only get liquidated below your initial purchase price?
With something as volatile as cryptocurrency it's not exactly a crazy idea that you'd buy at say $30k, take a loan at $60k and get liquidated at $50k and get stuck with a big tax bill
With something as volatile as cryptocurrency it's not exactly a crazy idea that you'd buy at say $30k, take a loan at $60k and get liquidated at $50k and get stuck with a big tax bill
Yes but in that case you did enjoy 20k of capital gains and so it makes sense* to pay tax on the 20k gain. There is no issue.
Nope. It’s called a collateralized loan, and is one of the fun tricks that show how absurd and illogical income taxation really is.
You seem certain that the IRS has never considered this possibility before.
This is exactly how tax laws (ridiculously) work, at least in the USA.
It uses the same “trick” billionaire CEOs use when they borrow against their shares to fund spending, instead of selling some shares and calling it “income”.
It uses the same “trick” billionaire CEOs use when they borrow against their shares to fund spending, instead of selling some shares and calling it “income”.
Depends on jurisdiction. In Poland the official government stance now is that only exchange into fiat is taxable. (which is absurd, but I won’t be the one to complain)
My impression is stablecoins are still taxed as property, even if they don't fluctuate as much. Going through the same hassle but not having as much fluctuation seems like solving 20% of the problem.
And if you peg your money to fiat, aren't you just ending up back where you started?
What you're describing sounds essentially like being my own brokerage back office to provide cash services to myself. That's nice for people who enjoy that sort of thing, I guess.
And if you peg your money to fiat, aren't you just ending up back where you started?
What you're describing sounds essentially like being my own brokerage back office to provide cash services to myself. That's nice for people who enjoy that sort of thing, I guess.
> And if you peg your money to fiat, aren't you just ending up back where you started?
Not if you are talking about the idea that only crypto allows you to transact without a middleman and without the risk of having your funds seized or your account canceled.
But if you are simply talking about crypto as an way to invest: I can tell where I can park USDC and DAI and get 2% returns per month - and have gotten that consistently for the last 8 months. Can you tell me any traditional bank that can offer this good of a deal?
Not if you are talking about the idea that only crypto allows you to transact without a middleman and without the risk of having your funds seized or your account canceled.
But if you are simply talking about crypto as an way to invest: I can tell where I can park USDC and DAI and get 2% returns per month - and have gotten that consistently for the last 8 months. Can you tell me any traditional bank that can offer this good of a deal?
You don't get 2% a month unless there's a significant risk of losing your money. That's just basic economics- high returns only come with high risk. In other words it's nothing like a bank and should not be compared to one.
That's under the presumption of efficient markets where there's perfect information across all market pariticipants which isn't the case currently with DeFi.
It's highly unlikely the people pushing crypto as a source of 2% monthly bank-like return have reliable information about these products and far more likely that the "risk/reward" rules of economics do in fact apply and that these accounts should be avoided due to the high risk.
The problem is compounded by the fact that people have every incentive to astro turf this technology to promote a get rich quick bubble. So the people claiming these accounts are safe may be lying. I would go so far as to say only a pyramid scheme can offer 2% monthly returns on a technology asset that produces nothing and has no inherent value.
The problem is compounded by the fact that people have every incentive to astro turf this technology to promote a get rich quick bubble. So the people claiming these accounts are safe may be lying. I would go so far as to say only a pyramid scheme can offer 2% monthly returns on a technology asset that produces nothing and has no inherent value.
> Can you tell me any traditional bank that can offer this good of a deal?
Well banks offer lower rates of interest, but they're FDIC insured, they have nice (ish) apps, they have regulations to protect consumers, etc.
I can tell you PLENTY of places i've parked my money (for the last 8 months) that have gotten much more than 2% return - but they don't have FDIC insurance (just like crypto).
Well banks offer lower rates of interest, but they're FDIC insured, they have nice (ish) apps, they have regulations to protect consumers, etc.
I can tell you PLENTY of places i've parked my money (for the last 8 months) that have gotten much more than 2% return - but they don't have FDIC insurance (just like crypto).
Everybody will tell you what you are doing is stupid without knowing the details...I had an idea which may also be stupid, but again, seems to be working recently and seems like simulated super high interest (but not not not investing advice). Thinking about crypto as "digital gold" gave me the idea.
What if you deposit your cash in a regular brokerage account and every week sell an equal amount (that is, one contract for every 100 shares you can afford to buy) of at-the-money puts on GLD? This is literally digital gold.
If the probability of gold going to zero (or GLD) is essentially nothing, and inflation is inevitably going to pick up, then this feels plausibly "risk free". The worst that can happen is you are assigned some shares, which you can sell or sell calls on. In any case, people are apparently willing to pay a surprising amount for short term volatility on it.
Even better, you can buy the cheapest longest dated out-of-the-money put to lay off some risk at minimal cost.
You may be able to do this on Robinhood, I haven't tried.
Just an idea...of course analyzing how this could hide large risks would be interesting.
What if you deposit your cash in a regular brokerage account and every week sell an equal amount (that is, one contract for every 100 shares you can afford to buy) of at-the-money puts on GLD? This is literally digital gold.
If the probability of gold going to zero (or GLD) is essentially nothing, and inflation is inevitably going to pick up, then this feels plausibly "risk free". The worst that can happen is you are assigned some shares, which you can sell or sell calls on. In any case, people are apparently willing to pay a surprising amount for short term volatility on it.
Even better, you can buy the cheapest longest dated out-of-the-money put to lay off some risk at minimal cost.
You may be able to do this on Robinhood, I haven't tried.
Just an idea...of course analyzing how this could hide large risks would be interesting.
Am I missing something? If GLD drops and your initial put was ATM and the buyer exercises, then you lose.
That can happen occasionally. But the idea is that you limit the amount so as to only lose as much as if you owned shares of it in the first place, and therefore any losses are sustainable, temporary, and not frequent. Given the conviction it has to go up in the medium term.
Can you really imagine selling insurance against gold cratering in the near term being disastrous, barring leverage which can always ruin you?
I think it's probably important, for managing risk, to have the self control to only hold as many short contracts as you have cash for assignment, and also not to get greedy when the price moves in your favor, but wait until the end of the week to swap them for a different strike.
The downside scenario is gold dropping 50%, or 100%, which just seems implausible, maybe more implausible than in living memory.
Can you really imagine selling insurance against gold cratering in the near term being disastrous, barring leverage which can always ruin you?
I think it's probably important, for managing risk, to have the self control to only hold as many short contracts as you have cash for assignment, and also not to get greedy when the price moves in your favor, but wait until the end of the week to swap them for a different strike.
The downside scenario is gold dropping 50%, or 100%, which just seems implausible, maybe more implausible than in living memory.
I don't care how many months of 2% (or 10%) interest I get if it's followed by a 100% loss. You're getting that high interest rate because you're taking on a great deal of risk. 8 months of a bull market hardly proves otherwise.
Of course there is risk, but they are not as great of a deal as you think it is. I am talking about transactions that deal with stable coins only, one of them is backed by a credible institution (Circle) and I am talking about a smart contract (Curve) that is being used already for over an year and is holding billions of dollars already.
Smart contracts are somewhat Lindy: the longer they are in place, the more of an indication they are secure. I wouldn't recommend putting your money on any new contract, but Curve is around for long enough that I don't believe that it will get hacked in the next years. Sure, it is not as "secure" as a FDIC-insured savings account, but it is not degen-type of investment either.
Smart contracts are somewhat Lindy: the longer they are in place, the more of an indication they are secure. I wouldn't recommend putting your money on any new contract, but Curve is around for long enough that I don't believe that it will get hacked in the next years. Sure, it is not as "secure" as a FDIC-insured savings account, but it is not degen-type of investment either.
In the parents defence, the tax status of crypto has nothing to do with the technical capability of using Bitcoin for trade. I think we can all agree, that if both parties are willing, I can use bitcoin to buy things.
You can do whatever if you are willing to take the risk, but US federal tax returns are now specifically asking if you own any cryptocurrency, which seems like at least a mild threat they might come after you.
Sure. If both parties are willing, you can also use pokemon cards to buy things. The main point of the comment is that it's not convenient and common to use crypto to buy goods and services yet.
The current desktop UX (today) of using cryptocurrency to order takeaway food from the market leading delivery platform in Germany is actually MORE convenient than Visa in my experience.
Visa: get card from wallet, type in number, type in CSC code.
Cryptocurrency: pull out phone, scan QR code.
Visa: get card from wallet, type in number, type in CSC code.
Cryptocurrency: pull out phone, scan QR code.
But do they give you a significant discount for crypto vs. a credit card?
In the US you can get a 2% rebate on what you spend with a credit card. In effect, you are credited back most of the merchant fees baked into transactions.
In which case cash or crypto requires a >2% discount to break even.
In the US you can get a 2% rebate on what you spend with a credit card. In effect, you are credited back most of the merchant fees baked into transactions.
In which case cash or crypto requires a >2% discount to break even.
I'm from Argentina and all you need to remember is the CCV. And sometimes not even that
Yes, I agree that it’s not common or convenient. But I think it was just a counter point that you can use Bitcoin for regular purchases and people do. And I don’t think tax law is going to stop these people.
I completely agree that the instances of use as currency is vanishingly small.
I completely agree that the instances of use as currency is vanishingly small.
Funny and true!
Which is why you use coinbase and they tell you the cost basis and then you use cointracker to import it into turbotax. It's just some extra overhead when filing taxes.
Have you heard of PayPal? Because i buy things internationally and pay with PayPal all the time. If I don't receive the order, I can contest and cancel the charge (sometimes). And there's no transaction fee that I'm aware of.
Do you buy $5 items internationally? Because the bulk of my international orders are low value items. If I have to spend more on a transaction fee than the item costs, I'm not gonna buy the item. Oh, lightning you say? You really think I should trust that more than pay pal?
Do you buy $5 items internationally? Because the bulk of my international orders are low value items. If I have to spend more on a transaction fee than the item costs, I'm not gonna buy the item. Oh, lightning you say? You really think I should trust that more than pay pal?
Have you heard of all the people arbitrarily blocked/banned/censored by PayPal? Just for one, I had my Paypal account permanently closed because I (many years prior to the block) registered it when I was still under—age. Separately, I am resident in a new country where for arbitrary reasons I don’t have all the necessary validation to open a Transferwise account registered here.
Relying on a small handful of centralized private service providers for critical infrastructure is a bad idea. My situation is not unique or strange. I could most likely illegally submit false information or register new accounts, with the risk of having payments frozen or even held at any point. Some online vendors only use PayPal, which has lifetime banned me as a person, so by extension I can not purchase from these vendors.
I do trust Lightning more than any of these. I actually regularly use for payments for stuff like you mentioned. Last time a $11 purchase yesterday, which even including amortized channel opening cost was most certainly less fees than PayPal would have been.
——
You’re happy with PayPal now, because it works fine for you, but the increasing power they have over individuals and the economy is real, concerning and dangerous.
Relying on a small handful of centralized private service providers for critical infrastructure is a bad idea. My situation is not unique or strange. I could most likely illegally submit false information or register new accounts, with the risk of having payments frozen or even held at any point. Some online vendors only use PayPal, which has lifetime banned me as a person, so by extension I can not purchase from these vendors.
I do trust Lightning more than any of these. I actually regularly use for payments for stuff like you mentioned. Last time a $11 purchase yesterday, which even including amortized channel opening cost was most certainly less fees than PayPal would have been.
——
You’re happy with PayPal now, because it works fine for you, but the increasing power they have over individuals and the economy is real, concerning and dangerous.
I'll agree with you that the monopolies (or too big to fail whatever) in finance and technology should be broken up. And I hope everyone who is into crypto banks their fiat at a local credit union.
But I think for most people using lightning means getting an account with a wallet provider. Couldn't they suspend your account for violating ToS? I guess some people could setup their own channel but I don't think that's what most people do.
Proof of Stake just means the biggest entities will have control. That doesn't sound stable to me but good luck.
But I think for most people using lightning means getting an account with a wallet provider. Couldn't they suspend your account for violating ToS? I guess some people could setup their own channel but I don't think that's what most people do.
Proof of Stake just means the biggest entities will have control. That doesn't sound stable to me but good luck.
> Couldn't they suspend your account for violating ToS? I guess some people could setup their own channel but I don't think that's what most people do.
I someone can, someone else will for you.... that's the thing. I can't make a Paypal alternative for myself, so I can't do it for anything, but if I can build an alternative on the lightning network... well... someone else can do it and take care of people that can't.
The buy guys only care about the big numbers... but open the door to the smaller guys, and you'll see, they'll take care of the smaller numbers too.
I someone can, someone else will for you.... that's the thing. I can't make a Paypal alternative for myself, so I can't do it for anything, but if I can build an alternative on the lightning network... well... someone else can do it and take care of people that can't.
The buy guys only care about the big numbers... but open the door to the smaller guys, and you'll see, they'll take care of the smaller numbers too.
https://www.paypal.com/us/webapps/mpp/paypal-fees
https://www.fool.com/the-ascent/research/average-credit-card...
There are significant international transaction fees. There are also merchant fees involved for sellers. Much like the ubiquitous credit card fees, you may not see it line-itemized on your bill, but the costs are absolutely part of the price you see at checkout.
Literally everything I buy with crypto, the crypto network fees are less than what I would have paid otherwise.
There are significant international transaction fees. There are also merchant fees involved for sellers. Much like the ubiquitous credit card fees, you may not see it line-itemized on your bill, but the costs are absolutely part of the price you see at checkout.
Literally everything I buy with crypto, the crypto network fees are less than what I would have paid otherwise.
What about how much money it cost to get whatever currency you had into a cryptocurrency? That may be vanishingly small for people that had BTC cheap and now have a bunch that cost some low initial amount to get into the system, but most people would necessarily have to convert whatever currency they normally have to a crypto currency first and then spend it. A true comparison would compare a few things, including same currency transactions using paypal, differing currency transactions using paypal, cost to use crypto to buy assuming you have none to start with, and cost to use crypto assuming you already have it as crypto at essentially zero cost. And for all those, probably run the number for buying something at $5, $10, $50, $100 and $1000.
Or don't do all that and intuit from it that the likely result is that in some cases crypto wins (when the purchase is large, when the crypto was acquired at closet to zero cost), and in others it doesn't (when the cost is small, or possibly even moderate and when you have to convert to crypto first).
Or don't do all that and intuit from it that the likely result is that in some cases crypto wins (when the purchase is large, when the crypto was acquired at closet to zero cost), and in others it doesn't (when the cost is small, or possibly even moderate and when you have to convert to crypto first).
I guess my point is that with PayPal, as a buyer, the transaction fees are seamlessly included in the price.
With crypto, it depends. Which coin? Which wallet? Which seller or marketplace? I'm curious if you care to share more about your transactions, that cost less using crypto. Now, if you're saying that you bought at $100 and it's at $1000, and you "paid less" that way, that's just this stage of the ponzi scheme's doing, not an inherent feature of the network that lowers costs.
With crypto, it depends. Which coin? Which wallet? Which seller or marketplace? I'm curious if you care to share more about your transactions, that cost less using crypto. Now, if you're saying that you bought at $100 and it's at $1000, and you "paid less" that way, that's just this stage of the ponzi scheme's doing, not an inherent feature of the network that lowers costs.
Oh, for sure, there's plenty of work to still be done on the crypto side of things.
Regarding which coins I use, it's mostly Bitcoin Cash or Doge. No funny accounting or anything. The network transaction fees are readily available:
https://bitinfocharts.com/comparison/dogecoin-transactionfee...
https://bitinfocharts.com/comparison/bitcoin%20cash-transact...
Regarding which coins I use, it's mostly Bitcoin Cash or Doge. No funny accounting or anything. The network transaction fees are readily available:
https://bitinfocharts.com/comparison/dogecoin-transactionfee...
https://bitinfocharts.com/comparison/bitcoin%20cash-transact...
You sound new to the paypal ban me for no reason game. We all play we just never know when we lose.
Like... Why? Why pay $10-25 in transaction fees for a $100 purchase? Unless it's illegal, it's far easier and cheaper to do currency conversion with a credit card.
I'm not using bitcoin. I mostly use bitcoin cash and doge, where fees are in the 50 cent - dollar or two range.
No offense, but you and the few dozens (exaggerating here for emphasis) of others around the world who use crypto as a currency regularly just don’t even matter in the context of the world’s financial systems.
Cool so just ban it without worrying about who it hurts because you’ve literally explicitly declared that they don’t matter.
Well, yes, if banning something considered harmful for the vast majority hurts a few, at some point it's worth considering. The line differs for everyone to be sure. For crypto"currency" in particular I'm not sure an outright ban is merited. It sure does seem more useful for criminal organizations and trading casinos to part unsophisticated "investors" (idealists?) from their cash than for actual people to use to conduct business, though.
No offense taken. I know I am currently in the (significant) minority.
But it's been six years, now, since using crypto has been a genuine net benefit for me, and this is completely outside of any kind of monetary speculation. That's not nothing. Is it a useful comparison, one guy that works in tech vs. the world's financial systems?
If using crypto helps me, it can help other people, too. That's enough for a real start, all on its own.
But it's been six years, now, since using crypto has been a genuine net benefit for me, and this is completely outside of any kind of monetary speculation. That's not nothing. Is it a useful comparison, one guy that works in tech vs. the world's financial systems?
If using crypto helps me, it can help other people, too. That's enough for a real start, all on its own.
What proportion of bitcoin use do you think is legitimate purchases versus crime? I suspect it's a long way on the wrong side of Blackstone's ratio.
Specifically for bitcoin- my hunch is one of the main drivers of its valuation is Chinese-owned capital trying to find its way outside of mainland China, as the ability of the average middle-class or wealthier Chinese person to have assets outside of state oversight is highly constrained.
I do think that coins with more reasonable transaction fees are actually used as normal, boring currency a lot more than crypto-naysayers think.
I also think the rampant speculation going on over coins like Doge is nuts, but it's worthwhile keeping in mind that if you're just using crypto as an exchange of value, with the purchase of the coin and its use at the same time, it doesn't really matter what the spot price is.
I do think that coins with more reasonable transaction fees are actually used as normal, boring currency a lot more than crypto-naysayers think.
I also think the rampant speculation going on over coins like Doge is nuts, but it's worthwhile keeping in mind that if you're just using crypto as an exchange of value, with the purchase of the coin and its use at the same time, it doesn't really matter what the spot price is.
> my hunch is one of the main drivers of its valuation is Chinese-owned capital trying to find its way outside of mainland China, as the ability of the average middle-class or wealthier Chinese person to have assets outside of state oversight is highly constrained.
Where by constrained you mean it's a crime, right? Obviously you can argue that in this specific instance making it easier for criminals to evade law enforcement is a morally good thing, but cryptocurrency does the same thing for any profitable crime in any country, which is why I see it as such a negative thing overall.
Where by constrained you mean it's a crime, right? Obviously you can argue that in this specific instance making it easier for criminals to evade law enforcement is a morally good thing, but cryptocurrency does the same thing for any profitable crime in any country, which is why I see it as such a negative thing overall.
>Where by constrained you mean it's a crime, right?
Not in the way you mean it, no. Otherwise industrial-scale bitcoin miners, situated near power plants, wouldn't be able to operate in the open at all, yet they do. Without making any moral judgement one way or the other, China works differently than is generally understood by the West.
//
I don't want to downplay criminal use of crypto- its use in cryptolocker-type malware is a real problem, for example.
I do think it is important to recognise that criminals already use existing monetary systems quite well, and that fully-public blockchains have an audit trail that investigators could only dream of compared to plain cash.
Not in the way you mean it, no. Otherwise industrial-scale bitcoin miners, situated near power plants, wouldn't be able to operate in the open at all, yet they do. Without making any moral judgement one way or the other, China works differently than is generally understood by the West.
//
I don't want to downplay criminal use of crypto- its use in cryptolocker-type malware is a real problem, for example.
I do think it is important to recognise that criminals already use existing monetary systems quite well, and that fully-public blockchains have an audit trail that investigators could only dream of compared to plain cash.
> Not in the way you mean it, no. Otherwise industrial-scale bitcoin miners, situated near power plants, wouldn't be able to operate in the open at all, yet they do. Without making any moral judgement one way or the other, China works differently than is generally understood by the West.
Well, the western understanding is that it's a corrupt country where the powerful and well-connected can openly flout the law for some time - until they misread a shift in power dynamics and it becomes convenient to prosecute them. I'm sure that's not the only paradigm through which these things can be understood, but it doesn't seem inaccurate either.
> I do think it is important to recognise that criminals already use existing monetary systems quite well, and that fully-public blockchains have an audit trail that investigators could only dream of compared to plain cash.
Well it's not like cash is particularly clean - if someone wants to pay or be paid in cash only, I would see that as a sign that things were probably not entirely on the level. Presumably criminals continue to use cash in parallel only use cryptocurrencies where they gain an advantage from doing so - but there are plenty of cases where cryptocurrency does offer big advantages for crime (and all of the reasons people give for using cryptocurrency - sending money internationally, avoiding reporting requirements - seem like crime-friendly things). Even the traceability you mention seems to be seen as more of a bug than a feature by crypto advocates.
Well, the western understanding is that it's a corrupt country where the powerful and well-connected can openly flout the law for some time - until they misread a shift in power dynamics and it becomes convenient to prosecute them. I'm sure that's not the only paradigm through which these things can be understood, but it doesn't seem inaccurate either.
> I do think it is important to recognise that criminals already use existing monetary systems quite well, and that fully-public blockchains have an audit trail that investigators could only dream of compared to plain cash.
Well it's not like cash is particularly clean - if someone wants to pay or be paid in cash only, I would see that as a sign that things were probably not entirely on the level. Presumably criminals continue to use cash in parallel only use cryptocurrencies where they gain an advantage from doing so - but there are plenty of cases where cryptocurrency does offer big advantages for crime (and all of the reasons people give for using cryptocurrency - sending money internationally, avoiding reporting requirements - seem like crime-friendly things). Even the traceability you mention seems to be seen as more of a bug than a feature by crypto advocates.
This notion that bitcoin is great for crimes has been thoroughly debunked in a variety of studies over the last few years. There's more crime committed using the US dollar (on a percentage basis even) than using bitcoin and the Bitcoin network's transparent nature coupled with the advance in on-chain analytics makes this easy to explain.
Citation? That sounds thoroughly implausible - consider how much flack HSBC gets for having dared to transfer money between the US and Mexico, something that bitcoin allows and encourages people to do all the time with no approval steps at all.
HSBC got flack just for transferring money between US and Mexico? I'm willing to bet there's more to it than that... so I think it fair that you should also provide a citation.
The clients they transferred it for turned out to be murderous drug cartels. But as far as I can see HSBC actually followed all the rules at the time; much has been made of the fact that they lowered the level of controls applied to those transfers for commercial reasons, but the law required them to judge the appropriate level within a particular range, and the level they applied afterwards was still within the legal range for Mexico. Yet whenever they come up on HN you'll hear people talking like they were killing people.
(They reached a settlement where they paid money and made an apology statement rather than going to court, as would most entities in their position).
(They reached a settlement where they paid money and made an apology statement rather than going to court, as would most entities in their position).
That interpretation directly contradicts Mexican authorities:
> the National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores – CNBV) which, across more than 20 volumes and some 10,000 pages, established how HSBC Mexico’s top management committed serious mistakes, such as:
> - Deliberately failing to report suspicious transactions.
> - Permitting the exponential growth of bulk dollar shipments on armored trucks bound for the US.
> - Deliberately delaying the issuance of client reports with unusual and suspicious transactions.
> - Maintaining business relationships, until the last possible moment, with people, businesses and currency exchange houses used by drug traffickers to acquire aircraft.
HSBC may not have been killing people themselves, but they unquestionably facilitated and profited from it. I'm a little surprised that someone would downplay their involvement given its scope TBH.
https://insightcrime.org/news/analysis/hsbc-dirty-money-whit...
> the National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores – CNBV) which, across more than 20 volumes and some 10,000 pages, established how HSBC Mexico’s top management committed serious mistakes, such as:
> - Deliberately failing to report suspicious transactions.
> - Permitting the exponential growth of bulk dollar shipments on armored trucks bound for the US.
> - Deliberately delaying the issuance of client reports with unusual and suspicious transactions.
> - Maintaining business relationships, until the last possible moment, with people, businesses and currency exchange houses used by drug traffickers to acquire aircraft.
HSBC may not have been killing people themselves, but they unquestionably facilitated and profited from it. I'm a little surprised that someone would downplay their involvement given its scope TBH.
https://insightcrime.org/news/analysis/hsbc-dirty-money-whit...
That's exactly the kind of take I'm talking about. All you've written is phrased to make it sound as negative as possible, but very little sounds like actual illegality. Permitting exponential growth and maintaining business relationships: what business wouldn't want to do that? Deliberately not reporting or delaying reports: sounds bad, but actually these reports are judgement calls, there can be legitimate differences of opinion. The violations of internal policy in your link sound like the same sort of thing: they're written to sound as though closing more suspicious accounts is always good and less is always bad, but actually suspicion is not proof, there can be genuine disagreement, and there's an equal and opposite story about people's accounts being closed for no good reason. 10,000 pages sounds like a lot, but it's to hide the lack of a smoking gun; all there is is a bunch of judgement calls that with the full benefit of hindsight we say were unreasonable because they lead to bad outcomes.
And compare this to Bitcoin where there is no judgement call, no KYC at all, anyone can move money anywhere. I suppose it's harder to gather 10,000 pages about how poor the judgement calls were in hindsight when no-one's making those judgements, but I would hope that HN of all places would look past the sound and fury and pay attention to the actual outcomes.
And compare this to Bitcoin where there is no judgement call, no KYC at all, anyone can move money anywhere. I suppose it's harder to gather 10,000 pages about how poor the judgement calls were in hindsight when no-one's making those judgements, but I would hope that HN of all places would look past the sound and fury and pay attention to the actual outcomes.
[deleted]
Don't all online payment systems use cryptography?
Are you being intentionally daft?
Or do you genuinely fail to realise thay there is a difference between you and small number of other people relative to the global population using cryptocurrency as money as compared to everyone on the planet doing so?
Or do you genuinely fail to realise thay there is a difference between you and small number of other people relative to the global population using cryptocurrency as money as compared to everyone on the planet doing so?
Ideas start from somewhere, and take time to spread.
And most of them never get anywhere meaningful.
I guess I don't totally know how to respond to that; I have no idea what everyone is using it for. That's rather hard to know just looking at the blockchain, or even reading message boards like this. I have no problem spending it; pretty easy to convert it to gift cards that can be spent anywhere (they give you a kick back even), there's some places that do take it directly (not restaurants, or car repair, but like electronics stuff on the internet). And of course you can just sell it for fiat on an exchange then turn around and dump the fiat for stuff (in this case, fiat is kind of the weak asset since no one really wants to hold cash for long). Plus, it can buy some stuff you can't get with fiat (e.g. overseas purchases not tied into USD, or all the dark web stuff people talk about). It feels pretty darn liquid; I've never had a problem turning BTC into stuff. And it is way more so than gold, land, even stocks and bonds; none of which can turn into stuff in under an hour much less without audit/paper-trail/control. Only fiat is more liquid, except no one wants to hold fiat; just turn it into something else actually worth having. The real problem is getting BTC. Lots of roadblocks in acquiring it and generally the people who have it would rather pay you in fiat and keep their BTC.
What’s the point of a currency where you have to convert it to another currency to spend it?
(I’ve got an idea, and I think the answer is speculation….)
Converting BTC to Fiat and then spending Fiat isn’t the same as buying things with Bitcoin. It’s buying things in Fiat with extra steps.
(I’ve got an idea, and I think the answer is speculation….)
Converting BTC to Fiat and then spending Fiat isn’t the same as buying things with Bitcoin. It’s buying things in Fiat with extra steps.
I convert my bank deposits to cash before spending it. It's not like there's cash in a vault with my name on it, I ask to withdraw cash and my checking account is debited. Doesn't seem so different than an exchange.
It’s entirely different, because you are transacting in the same currency without an exchange mechanism required.
This is important in days like today, where a coffee would cost more in BTC this evening than it would have this morning - how do I know how many BTC I have spent without referring to the current market price in USD and calculating it?
This is important in days like today, where a coffee would cost more in BTC this evening than it would have this morning - how do I know how many BTC I have spent without referring to the current market price in USD and calculating it?
If the extra step means my money doesn't lose value as government print cash like there's no tomorrow, then that step is quite valuable to me
BTC seems to be about 10 times more volatile than the dollar on a daily basis. Like, last friday, the dollar was down about 0.4% and BTC was up or down 4-5% intraday.
This seems to me kind of like the argument that the government is "just" another gang of armed bandits.
There is a huge amount of value in predictable taxation rather than random robbery. Partly because of the variance, and partly because government has more of a long term interest in the viability of the citizenry, even if it weren't especially democratic per se.
And similarly, there's a huge value in a currency that gradually loses value over time rather than being up or down 5% in a day and 30% in a few weeks.
The whole point of currency is that it's not a long term investment asset, but a tool for trade, isn't it? So why would long run inflation be relevant?
This seems to me kind of like the argument that the government is "just" another gang of armed bandits.
There is a huge amount of value in predictable taxation rather than random robbery. Partly because of the variance, and partly because government has more of a long term interest in the viability of the citizenry, even if it weren't especially democratic per se.
And similarly, there's a huge value in a currency that gradually loses value over time rather than being up or down 5% in a day and 30% in a few weeks.
The whole point of currency is that it's not a long term investment asset, but a tool for trade, isn't it? So why would long run inflation be relevant?
> BTC seems to be about 10 times more volatile than the dollar on a daily basis.
They're not talking about volatility; they're talking about the average trend over time.
They're not talking about volatility; they're talking about the average trend over time.
I know. My point was this is the wrong focus, because of what currency is by nature.
Short term volatility is a big disadvantage, while gradual loss in value doesn't matter for something that's not a long term investment.
I owe way more money than I have in cash, as does almost everyone, and my loans being in nominal currency, inflation only helps.
Short term volatility is a big disadvantage, while gradual loss in value doesn't matter for something that's not a long term investment.
I owe way more money than I have in cash, as does almost everyone, and my loans being in nominal currency, inflation only helps.
> My point was this is the wrong focus, because of what currency is by nature.
Ah, fair enough. That said:
> I owe way more money than I have in cash, as does almost everyone, and my loans being in nominal currency, inflation only helps.
This only works if you have a effective means of prohibiting (any) interest on those loans (ie anti-usury laws that actually have teeth). Otherwise the lender just bakes inflation into the interest.
Ah, fair enough. That said:
> I owe way more money than I have in cash, as does almost everyone, and my loans being in nominal currency, inflation only helps.
This only works if you have a effective means of prohibiting (any) interest on those loans (ie anti-usury laws that actually have teeth). Otherwise the lender just bakes inflation into the interest.
I don't know if you are American, but it's common here to have 30 year fixed rate mortgages. I gather that's rare most other places. So I'm supposing a typical scenario where a person borrowed or refinanced recently to lock in very low inflation expectations.
That said, there are variable rate loans, but last year some lenders were actually offering such loans at a noticeable discount to prime (albeit with a floor that is above prime for now).
That said, there are variable rate loans, but last year some lenders were actually offering such loans at a noticeable discount to prime (albeit with a floor that is above prime for now).
Yea, but I don't have a problem with volatility. I have a problem with inflation. So, as a customer of this product, you can tell me I should want a lack of volatility. But what I really want is a lack of inflation. And indeed, your note implies that you too are fleeing cash. But I don't want to park all my money in bonds (also being printed like crazy) and houses (also being printed like crazy) or even companies (also being printed like crazy). I'd like to just park it in the IOU-form I earned it in without having it's value stolen or being forced to invest in something being printed like crazy with all sorts of complexity of risks (e.g. debt filled companies, real estate I have to rent or something). Just to have my money not lose value and for me to be able to spend it without someone being able to stop me. And it does that. I'll take the volatility.
My experience of BTC is when people say “I don’t want inflation” what they really mean is “I want my money to go up in value”.
Which ultimately just ends up in people wanting speculation.
A bit of a generalisation, but I know plenty of people who hold Bitcoin and they all are buying it because it might be worth more in the future, and none are buying it to transact in Bitcoin and use it as a currency.
Which ultimately just ends up in people wanting speculation.
A bit of a generalisation, but I know plenty of people who hold Bitcoin and they all are buying it because it might be worth more in the future, and none are buying it to transact in Bitcoin and use it as a currency.
Agree
How is that different to investing in any other asset and then selling when you need to spend fiat currency, though?
It only loses value when Elon shitpost on Twitter, right?
...you do realize that most of the world's money supply exists in the form of derivatives, right? A single-digit percentage is actual cash. You're committing a strawman. They didn't say anything about how the proportionality of crypto's use breaks down - they simply stated that it has achieved the basic use it set out to. And they're 100% correct - I use crypto to buy things quite regularly (email, VPN, etc), and will continue to. Really, the only thing preventing me from doing so more often is hard-headed people refusing to support it, because it's "mostly speculative."
Here's an infographic: https://www.visualcapitalist.com/all-of-the-worlds-money-and...
Here's an infographic: https://www.visualcapitalist.com/all-of-the-worlds-money-and...
You wrote: "most of the world's money supply exists in the form of derivatives". I also looked at the infographic. So silly. Clearly, they are just summing the notional of outstanding derivatives contracts. Summing PV (present value) would be more useful. If I buy (open long) 100 WTC Oil futures contracts, then sell (open short) 100 WTC Oil futures contracts, my delta risk is zero. However, the total notional will be 200 WTC Oil futures contracts.
This article might help to explain more: https://www.investopedia.com/ask/answers/052715/how-big-deri...
This article might help to explain more: https://www.investopedia.com/ask/answers/052715/how-big-deri...
The notational value of derivatives is the whole point of derivatives. They wouldn't be traded at all if they were priced solely by the value of their underlying asset.
I disagree. For the largest derivatives markets -- a: interest rate swaps, b: FX swaps, and c: credit default swaps, they formed (and grew) because market participants wanted to express a particular view, but could not easily find enough of the required "cash product" -- a:gov't bonds, b:spot FX (or simultaneous, dual currency, short-term LIBOR lending), c:corporate bonds. For (a) and more so (c), it is difficult to short, even for large/institutional clients. Synthetic equivalents (interest rate swaps are _effectively_ synthetic gov't bonds) 1:can be created upon demand, specific to a client's needs, and 2:can be trivially shorted.
When a client is buying or selling a derivative, they don't care about the notional -- they care about the delta (or gamma/other greek). You just turn the dial for notional to achieve the target delta/gamma.
Your second sentence does not make sense with respect to single name equity options. (I pick a simple product as a counterpoint.) I doubt anyone is losing sleep in 2021 over 'rho' (interest rate sensitivity) in their options trading book for any floating currency with short term rates below 1%. Thus, everything about the underlying price (including expected future divs and its historical volatility) drives the prices of single name equity options. (If you are referring to delta one derivatives, that is a whole different discussion. And yes, they trade -- equity swaps, because you can get implied leverage through financing.)
When a client is buying or selling a derivative, they don't care about the notional -- they care about the delta (or gamma/other greek). You just turn the dial for notional to achieve the target delta/gamma.
Your second sentence does not make sense with respect to single name equity options. (I pick a simple product as a counterpoint.) I doubt anyone is losing sleep in 2021 over 'rho' (interest rate sensitivity) in their options trading book for any floating currency with short term rates below 1%. Thus, everything about the underlying price (including expected future divs and its historical volatility) drives the prices of single name equity options. (If you are referring to delta one derivatives, that is a whole different discussion. And yes, they trade -- equity swaps, because you can get implied leverage through financing.)
Someone is going to make a chart comparing crypto to the already-ridiculous crypto derivatives market, and you’ll realize your point is totally irrelevant.
Companies don’t transact in Bitcoin because nobody wants to hold it. Except for companies getting a valuation boost from retail investors.
Companies don’t transact in Bitcoin because nobody wants to hold it. Except for companies getting a valuation boost from retail investors.
No, my point isn't irrelevant, and you thinking it is means you almost certainly missed it. Most of the world's value is speculative in nature (derivatives, credit, real estate, you name it), so I couldn't care less about the crypto derivatives market, or the "normal" derivatives either. Neither are preventing me from using crypto as a store of value. At the end of the day, people speculating the value of crypto does nothing to detract from its core function as a decentralized ledger. I know this to be fact, because I have and continue to use it as money, and no amount of smug pseudo-intellectual retorts can change that. The briefest of cursory internet searches will disprove your idea that companies don't want to hold crypto - there's been massive buy in from very significant companies. Eg Sotheby's, a company that has existed since the 1700s. But they must be fools who don't know what they're doing, right?
You wrote: <<internet searches will disprove your idea that companies don't want to hold crypto - there's been massive buy in from very significant companies. Eg Sotheby's>>
I looked into this claim, and I disagree. Google search for <<sotheby's cryptocurrency>>. The first two results for me were:
https://www.sothebys.com/en/articles/cryptocurrency-payment-...
https://www.sothebys.com/en/buy-sell/cryptocurrency-faq
They are allowing partial cryptocurrency payment for a single Banksy painting.
From the FAQ:
<< Which part of the transaction is payable in cryptocurrency?
Sotheby's will accept cryptocurrency for the hammer price of the lot. The buyer’s premium and overhead premium, as well as any taxes, must be paid in USD. >>
Sotheby's is simply facilitating the transaction as an auction house. They have zero exposure to cryptocurrency. I assume the cryptocurrency will be transferred to the seller after the auction is paid-in-full. The buyer must pay all non-hammer-price costs in USD to Sotheby's. (As I understand, these fees can be significant.)
Like some other posts mentioned, the seller could agree to receive seashells instead of cryptocurrency. All said, this seems like a very good publicity stunt by Sotheby's.
I looked into this claim, and I disagree. Google search for <<sotheby's cryptocurrency>>. The first two results for me were:
https://www.sothebys.com/en/articles/cryptocurrency-payment-...
https://www.sothebys.com/en/buy-sell/cryptocurrency-faq
They are allowing partial cryptocurrency payment for a single Banksy painting.
From the FAQ:
<< Which part of the transaction is payable in cryptocurrency?
Sotheby's will accept cryptocurrency for the hammer price of the lot. The buyer’s premium and overhead premium, as well as any taxes, must be paid in USD. >>
Sotheby's is simply facilitating the transaction as an auction house. They have zero exposure to cryptocurrency. I assume the cryptocurrency will be transferred to the seller after the auction is paid-in-full. The buyer must pay all non-hammer-price costs in USD to Sotheby's. (As I understand, these fees can be significant.)
Like some other posts mentioned, the seller could agree to receive seashells instead of cryptocurrency. All said, this seems like a very good publicity stunt by Sotheby's.
> Such a vanishingly small percentage of cryptocurrency activity is actually used for trade
In reality, an overwhelmingly large percentage of tangible trade is fasciliated by one specific cryptocurrency for one particular umbrella of goods and services that may have something to do with onions.
In reality, an overwhelmingly large percentage of tangible trade is fasciliated by one specific cryptocurrency for one particular umbrella of goods and services that may have something to do with onions.
What percentage of dollars are used for trade, as opposed to investment? Does it matter?
[deleted]
You can use bitcoin as a saving mechanism, which is the primary purpose of money, as long as you can trust that it is tradeable to something else. There are hundreds of millions of people who use bitcoin in this way.
For using it as everyday currency, there are debit cards that automatically convert your bitcoin to local currency at the time of payment. There are probably millions of people who use these debit cards. Bitcoin itself isn't suitable for everyday payments yet.
For using it as everyday currency, there are debit cards that automatically convert your bitcoin to local currency at the time of payment. There are probably millions of people who use these debit cards. Bitcoin itself isn't suitable for everyday payments yet.
> And when Tesla decided to allow purchases via BTC
The main reason I don't buy things with cryptocurrency is that it would trigger a liquidation event and short term capital gains taxing.
Due to that, for US residents and citizens, it's not functional as a currency in its current form. I'm vehemently against taxing of cryptocurrency or treating it as a security by the IRS, but that's the way it is now.
The main reason I don't buy things with cryptocurrency is that it would trigger a liquidation event and short term capital gains taxing.
Due to that, for US residents and citizens, it's not functional as a currency in its current form. I'm vehemently against taxing of cryptocurrency or treating it as a security by the IRS, but that's the way it is now.
> Such a vanishingly small percentage of cryptocurrency activity is actually used for trade (as opposed to speculation) that it is a novelty and newsworthy when it actually happens.
First, that last part is definitely not true. People do accept Bitcoin and buy things with it, and it’s not newsworthy at all unless it’s a meme-driven electric car company boss doing it. But secondly, why do these percentages actually matter? At what point does my valid use of something become dismissible because another use case which you don’t like gets popular? Do we dismiss people who actually like playing the Pokémon card game because lots of people collect the cards purely for speculation now?
First, that last part is definitely not true. People do accept Bitcoin and buy things with it, and it’s not newsworthy at all unless it’s a meme-driven electric car company boss doing it. But secondly, why do these percentages actually matter? At what point does my valid use of something become dismissible because another use case which you don’t like gets popular? Do we dismiss people who actually like playing the Pokémon card game because lots of people collect the cards purely for speculation now?
It was a media sensation because it was Tesla doing it, not because of what was being done.
Tesla and Musk are attention-sponges and it's a large part of how they're still operating.
Tesla and Musk are attention-sponges and it's a large part of how they're still operating.
Yeah, I use crypto for purchases quite frequently. From hotel rooms to supplements.
Transaction fees were north of $50 a couple of weeks ago. Who's buying a pizza with that overhead? Genuinely asking, because I've a bridge to sell
Before the edit window closes... 5 workarounds and counting. Are they interoperable, or is all this a thick layer of bullshit that users need to wade through to spend their "currency"? I see the plurality of "solutions" here indicative of a problem. Yes, you can fix anything with duct tape, but then it gets sticky
Before the edit window closes... 5 workarounds and counting. Are they interoperable, or is all this a thick layer of bullshit that users need to wade through to spend their "currency"? I see the plurality of "solutions" here indicative of a problem. Yes, you can fix anything with duct tape, but then it gets sticky
You can use Lightning (a Bitcoin technology) to send BTC which is extremely cheap in comparison. Talking fractions of a cent.
How do you use the Lightning network?
Check out strike app, it is a managed lightning wallet denominated in USD that allows venmo/cashapp style pay to user transactions; and payments on the lightning network. All funded from a bank account.
Use muun or phoenix wallets, they're very usable.
Isn't that only for Bitcoin Cash?
Nope you can directly use Bitcoin Cash with subcent transaction fees without any other layers. A place near me sells Kava for BCH (supposedly, I have not been to a bar in a loooonnnnggg time).
You can use Ethereum Layer 2 tech like Loopring, zkSync, and eventually Optimism which Coinbase supports in the Coinbase Wallet. They haven't even added support for Lightning
Nobody in the real world is using any of this.
...yet, all these are fairly new. Give it another 2-5 years for implementations and integrations.
Also, it’s already used in defi, if you count that as “real world”. Reminds me of when anything on the internet wasnt “real”.
Also, it’s already used in defi, if you count that as “real world”. Reminds me of when anything on the internet wasnt “real”.
Sorry but I've been following the last decade of the crypto world. In a decade I have not seen a single "defi" product sticking around because there just doesn't seem to be real demand for these products.
Considering how many spaces in new startups developed massive traction in that span of time (social networks, other forms of digital payments and banking, online marketplaces) the fact that there are no star products in such a span of time gives me little consideration.
Considering how many spaces in new startups developed massive traction in that span of time (social networks, other forms of digital payments and banking, online marketplaces) the fact that there are no star products in such a span of time gives me little consideration.
Wait what? DeFi pretty much started booming from last summer.. it hasn't existed for a decade. Do you not know Uniswap? It's existed since around 2017. Sushiswap? even Pancakeswap?
There's $80 billion locked in DeFi right now. https://defipulse.com/
Uniswap has more transaction fees than the Bitcoin network https://cryptofees.info/history/2021-05-16
Institutions are even starting to get in https://twitter.com/stanikulechov/status/1394390461968633859
There's $80 billion locked in DeFi right now. https://defipulse.com/
Uniswap has more transaction fees than the Bitcoin network https://cryptofees.info/history/2021-05-16
Institutions are even starting to get in https://twitter.com/stanikulechov/status/1394390461968633859
I call bs. There is not $80 billion USD locked in defi -- the world has not taken $80 billion USD, bought crypto with it, and put the crypto into defi code. Like, where are the receipts?
What has happened is defi tokens have appreciated through speculation. Sites like defi pulse erroneously represent the wealth locked into defi contracts as token_price * tokens_locked, which is trivial to manipulate for shallow-market tokens. Like, I can spin up a token with 1 billion units, buy one token for $1, and put the remaining tokens into a defi contract. Voila -- defi pulse reports $81 billion locked.
EDIT: downvotes aren't receipts, and downvoting doesn't change the accounting discrepancy.
What has happened is defi tokens have appreciated through speculation. Sites like defi pulse erroneously represent the wealth locked into defi contracts as token_price * tokens_locked, which is trivial to manipulate for shallow-market tokens. Like, I can spin up a token with 1 billion units, buy one token for $1, and put the remaining tokens into a defi contract. Voila -- defi pulse reports $81 billion locked.
EDIT: downvotes aren't receipts, and downvoting doesn't change the accounting discrepancy.
An 80 billion market cap in Ponzi scheme products with no star companies that testify the usage of said products sounds like a scam.
>Give it another 2-5 years for implementations and integrations.
This is what I heard when Lightning went live.
This is what I heard when Lightning went live.
Lightning usability is horrible and requires 2 parties to be online at the same time, whereas with Ethereum scaling solutions, you can use your regular metamask wallet to deposit, and you're on L2.
And very likely just like Lighting we'll hear similar excuses as to why it doesn't work.
The early adopters will be the ones who reap the rewards.
Via the Polygon commit chain, these issues are fixed. Polygon's adoption is through the roof, saving Ethereum's butt. Hence the massive price climb.
Does Polygon stay relevant after Ethereum's PoS?
Yes. Ethereum's scaling with PoS is still fairly slow, and as the biggest network, I'm bullish on the continuing need for 2nd level solutions.
[deleted]
[deleted]
The level of delusion when it comes to cryptocurrencies - is unreal.
As a market practitioner of many decades, I must say I have never witness this level of froth and delusion before.
I'm studying it with great interest (and a touch of disdain about my fellow humans unbounded rationality/irrational exuberance about cryptos)
As a market practitioner of many decades, I must say I have never witness this level of froth and delusion before.
I'm studying it with great interest (and a touch of disdain about my fellow humans unbounded rationality/irrational exuberance about cryptos)
It's because once people put their money into a cryptocurrency they have a stake in not seeing it fail. The more they have in the cryptocurrency, the more they need it to retain value.
If your life savings were at risk of becoming worthless, you would also be defending cryptocurrencies as rabidly as these people.
If your life savings were at risk of becoming worthless, you would also be defending cryptocurrencies as rabidly as these people.
"As a market practitioner of many decades" -- I like that phrase.
In the first phase, it was purely retail speculation. However, we are now entering into a new phase. ETFs are being issued. This makes it easier for institutional money to buy. Also scary. I'm not concerned about "fast money" (hedge funds), but rather "slow money" like pension funds.
Final phase: I notice that investment banks are slowly beginning to open cryptocurrency trading desks. They may trade directly, but mostly they are interested in derivatives. That is my biggest fear. How is that any different than CDS on MBS/ABS/CDO? (Credit default swap on sub-prime mortgage bonds) In short: The underlying was junk loans. Derivs on crypto feels like the same wolf, but in a different skin!
In the first phase, it was purely retail speculation. However, we are now entering into a new phase. ETFs are being issued. This makes it easier for institutional money to buy. Also scary. I'm not concerned about "fast money" (hedge funds), but rather "slow money" like pension funds.
Final phase: I notice that investment banks are slowly beginning to open cryptocurrency trading desks. They may trade directly, but mostly they are interested in derivatives. That is my biggest fear. How is that any different than CDS on MBS/ABS/CDO? (Credit default swap on sub-prime mortgage bonds) In short: The underlying was junk loans. Derivs on crypto feels like the same wolf, but in a different skin!
Seems like cryptocurrency mania is substantially more insane then tulip mania.
Ah yes the typical HN commenter who sees hundreds of millions of people doing something and assumes that he knows better.
All crypto posts poke the hornets nest of angry engineers here at HN because (I think) crypto is now 90% a finance/economic/social phenomenon. There is little new to say from a technical perspective but people who are super smart in one field think it should generalize to a vaguely adjacent one. I’ve spent quite a lot of time on this stuff and the potential of Defi is massive compared to 99% of trad fintech startups but its impossible to even keep up with.
[deleted]
> we have a deflationary currency we trade for goods and services.
You do not, not really. Merchant adoption is microscopic. Even prominent Bitcoin fans admit it's terrible as a payment system. E.g., Fred Wilson of Union Square Ventures: https://avc.com/2017/08/store-of-value-vs-payment-system/
Or look at Overstock, one of the few large retailers that accepts it. Something like 0.1% of their business is done using it, which explains why most other merchants don't bother. Even there, they price everything in dollars, so if the Bitcoin price shifts between you purchasing something and you returning it, you'll get the dollar equivalent, not the Bitcoin you gave them: https://www.nytimes.com/2021/02/03/style/what-can-you-actual...
This is especially obvious when you contrast it with something like M-Pesa, an e-cash system that launched around the same time. It's hugely popular in the countries it operates in. (Along the way, it did a lot for banking the unbanked, one of the mirage-like goals that Bitcoin is always approaching but never arrives at.) The transaction volume is orders of magnitude higher than Bitcoin. https://en.wikipedia.org/wiki/M-Pesa
Sure, it technically works; you can probably still buy a pizza somewhere. But "technically works" is a shaky standard even for something that just launched. It's no standard at all for something that launched the same time as Android or Uber.
You do not, not really. Merchant adoption is microscopic. Even prominent Bitcoin fans admit it's terrible as a payment system. E.g., Fred Wilson of Union Square Ventures: https://avc.com/2017/08/store-of-value-vs-payment-system/
Or look at Overstock, one of the few large retailers that accepts it. Something like 0.1% of their business is done using it, which explains why most other merchants don't bother. Even there, they price everything in dollars, so if the Bitcoin price shifts between you purchasing something and you returning it, you'll get the dollar equivalent, not the Bitcoin you gave them: https://www.nytimes.com/2021/02/03/style/what-can-you-actual...
This is especially obvious when you contrast it with something like M-Pesa, an e-cash system that launched around the same time. It's hugely popular in the countries it operates in. (Along the way, it did a lot for banking the unbanked, one of the mirage-like goals that Bitcoin is always approaching but never arrives at.) The transaction volume is orders of magnitude higher than Bitcoin. https://en.wikipedia.org/wiki/M-Pesa
Sure, it technically works; you can probably still buy a pizza somewhere. But "technically works" is a shaky standard even for something that just launched. It's no standard at all for something that launched the same time as Android or Uber.
Why is illegal transactions a goal? You can hate on governments all you want, but that is the only way currently known where we can have a reasonable say into the laws made and uphold — and order is not a bad thing in my opinion. Why circumvent that, instead of voting someone in who will create reasonable laws to protect us all?
Why do you expect the government's laws to be forever reasonable, or reasonable for everyone all the time? Can you be guaranteed a vote if you've already been made a criminal? I'm skeptical of BTC as a currency, but divorcing the state from the capacity to control who can transact seems like a fantastic check on government power in a world where surveillance is becoming increasingly perfect. Think of Bitcoin in this context as digital cash, in relation to a a potentially centralized digital currency.
I mean, what’s your plan at that point? Move to the wild with a gun and hunt something for food? We can’t separate ourselves from society, and many countries have a way to reform and defend the direction their government is heading. That’s what we should strive to do.
If I'm frozen out of access to my native currency? Absolutely.
We can't separate ourselves from society, nor should we want to. But we should also ensure checks are in place so that society's capacity to control the individual is not absolute, so as to mitigate the negative side-effects that can spring from its convulsions.
Perfect and immediate enforcement of every law prevents many undesireable activities, but it removes what I consider to be necessary alack from the system. It should be enough that the ledger is transparent, and the law can be retroactively enforced when law enforcement is made aware of the violation.
We can't separate ourselves from society, nor should we want to. But we should also ensure checks are in place so that society's capacity to control the individual is not absolute, so as to mitigate the negative side-effects that can spring from its convulsions.
Perfect and immediate enforcement of every law prevents many undesireable activities, but it removes what I consider to be necessary alack from the system. It should be enough that the ledger is transparent, and the law can be retroactively enforced when law enforcement is made aware of the violation.
I cant vote in the US. In argentina, however, the government seized my bank accounts and made it illegal to trade foreign currencies.
This assumes your vote matters. Governments around the world are consumed by regulatory capture and corruption.
True, but at the point of a dictatorship, all is lost, unless you leave the country - and that’s why democracy should be protected at all cost.
I don’t see how circumventing the whole thing help the regular people, considering the potential increase due to easier availability in illegal activity like human trafficking, child porn, weapons trade, etc. We have laws against them for very good reasons.
> True, but at the point of a dictatorship, all is lost, unless you leave the country
Today's democracy is just a dictatorship in sheep's clothing, and I'm not convinced democratic governments were ever anything but.
> illegal activity like human trafficking, child porn, weapons trade, etc.
Boogiemen... Not that these things don't happen, but that they happen rarely, and the government doesn't even do a good job of stopping these things.
Worst of all good people believe the government stops these things and don't work to protect themselves and their community from them because of this belief.
Today's democracy is just a dictatorship in sheep's clothing, and I'm not convinced democratic governments were ever anything but.
> illegal activity like human trafficking, child porn, weapons trade, etc.
Boogiemen... Not that these things don't happen, but that they happen rarely, and the government doesn't even do a good job of stopping these things.
Worst of all good people believe the government stops these things and don't work to protect themselves and their community from them because of this belief.
Government has always been the principal enabler of every war, genocide, and mass abuse of human rights through history. Divorcing them from control of money is a massive human rights advancement, and most people recognize this.
> we have a deflationary currency
I've never understood why this is an explicit goal of any currency. Money is a way of keeping score of economic value produced. The economy is expected to create more value over time. That means you need more points, aka money, to represent that value.
I've never understood why this is an explicit goal of any currency. Money is a way of keeping score of economic value produced. The economy is expected to create more value over time. That means you need more points, aka money, to represent that value.
I hate it when the government sneaks around back and lowers my score all the time. It'd be nice to retire someday before I'm dead.
It's not the government doing that, though, it's the economy. The government just provides the points for keeping score.
If the economy grows by x% this year and all your money is in cash, then your relative share in the economy has declined. So of course the value of your cash has now reduced. The government was only indirectly involved insofar as it issued the currency that the value was measured in.
If you want your money to stop losing value, stop the economy from creating more value.
If the economy grows by x% this year and all your money is in cash, then your relative share in the economy has declined. So of course the value of your cash has now reduced. The government was only indirectly involved insofar as it issued the currency that the value was measured in.
If you want your money to stop losing value, stop the economy from creating more value.
This is nonsensical. There was practically no inflation in the United States during the 19th century[0], the major exception in that period being the Civil War, a period of when the government needed to generate more revenue by printing more money. Following the war, deflation brought prices lower so that price levels at the end of the century were roughly equal to those at the start of it (and it should go without saying that there was certainly economic growth between 1800 and 1900).
With economic growth, you would expect the economy to produce more items, thereby being able to buy the same things for cheaper. E.g., if we get better at producing electronics, you would expect their price to decline - and that's precisely what we've seen in the past couple of decades.
It is true that a period of economic growth could induce inflation in the short run if the growth resulted in an expansion of credit, which increases the money supply even if M1 is stable. But there's only so far you can stretch the money multiplier. And on the other hand, monetarists believe that increasing the money supply could resolve a recession, but for one, an increasing money supply clearly isn't required for economic growth (the 19th century in the US is emblematic of this, but in particular there were decades of deflation within that century with economic growth), and for another, increasing the money supply in the monetarist framework is brought about by a central bank, not caused by the growing economy.
[0]: Figure 1 of https://www.stlouisfed.org/publications/regional-economist/s...
With economic growth, you would expect the economy to produce more items, thereby being able to buy the same things for cheaper. E.g., if we get better at producing electronics, you would expect their price to decline - and that's precisely what we've seen in the past couple of decades.
It is true that a period of economic growth could induce inflation in the short run if the growth resulted in an expansion of credit, which increases the money supply even if M1 is stable. But there's only so far you can stretch the money multiplier. And on the other hand, monetarists believe that increasing the money supply could resolve a recession, but for one, an increasing money supply clearly isn't required for economic growth (the 19th century in the US is emblematic of this, but in particular there were decades of deflation within that century with economic growth), and for another, increasing the money supply in the monetarist framework is brought about by a central bank, not caused by the growing economy.
[0]: Figure 1 of https://www.stlouisfed.org/publications/regional-economist/s...
> if we get better at producing electronics, you would expect their price to decline
I would also expect the value of the electronics industry, and its profits, to rise. Where's the additional money to denote that value coming from?
> There was practically no inflation in the United States during the 19th century
I can't speak to inflation in the 19th century. I'm not an economist and expert like the writer of that article. But as a percentage of household income, basic necessities (food, clothing, transportation, entertainment, energy) have undoubtedly become cheaper since the 19th century, despite inflation. Goods and services that don't follow normal supply-demand logic (education) or have excessive regulation controlling supply (healthcare, real estate) are the exception to this.
> the major exception in that period being the Civil War, a period of when the government needed to generate more revenue by printing more money
Money printing is the proximate cause, but not the root cause. The war increased demand, leading to increased prices i.e. inflation. The government printed more money to pay for the war, but it could alternatively have taken on more debt (and maybe it did, I'm not an economist or a historian).
I would also expect the value of the electronics industry, and its profits, to rise. Where's the additional money to denote that value coming from?
> There was practically no inflation in the United States during the 19th century
I can't speak to inflation in the 19th century. I'm not an economist and expert like the writer of that article. But as a percentage of household income, basic necessities (food, clothing, transportation, entertainment, energy) have undoubtedly become cheaper since the 19th century, despite inflation. Goods and services that don't follow normal supply-demand logic (education) or have excessive regulation controlling supply (healthcare, real estate) are the exception to this.
> the major exception in that period being the Civil War, a period of when the government needed to generate more revenue by printing more money
Money printing is the proximate cause, but not the root cause. The war increased demand, leading to increased prices i.e. inflation. The government printed more money to pay for the war, but it could alternatively have taken on more debt (and maybe it did, I'm not an economist or a historian).
> I would also expect the value of the electronics industry, and its profits, to rise. Where's the additional money to denote that value coming from?
Value does not come from money. Real value comes from the goods and services actually produced. As for whether profits increase, that depends. An increase in productivity in an industry might not necessarily entail an increase in profits for those in that industry. That's the basis for cartels, restriction production in order to boost profits.
> Goods and services that don't follow normal supply-demand logic (education) or have excessive regulation controlling supply (healthcare, real estate) are the exception to this.
This is not necessarily the case, i.e., services can decline in price as well as output increases. If, for example, the money supply were fixed but there were now twice as many workers, there is half the amount of money to go around for each person (but this is not really a problem because money is only useful as far as it is used to purchase goods and services, and in this scenario there are now twice as many goods and services to go around, so it balances out). So if the money supply were completely fixed, you would expect the price of everything to decline over time. However, historically, before the Federal Reserve, prices were relatively stable over periods as long as a hundred years. This is probably because the money supply was not actually fixed - it was backed by gold, and the more the economy grew, the more gold could be mined.
> The government printed more money to pay for the war, but it could alternatively have taken on more debt
Well, this is precisely how the Federal Reserve system works (at least in theory). It doesn't simply hand the government a blank check (although these days it might as well). It lends money to the government to spend. Actually, the process is slightly more convoluted. The government borrows money by selling bonds, and then bondholders sell those bonds to the Fed.
Regardless, the end result is the same, an influx of created money entering the economy. Other forms of lending plays a central part in money creation, through what's called the money multiplier, and the Fed has traditionally targeted inflation by lowering interest rates, making it cheaper to borrow money, encouraging more borrowing, and thereby increasing the money multiplier. So in any event, the cause of inflation is an expansion of the money supply. The money printer by itself is responsible for only M0, but other actions by the government can grow or shrink the larger money supply (M2).
Value does not come from money. Real value comes from the goods and services actually produced. As for whether profits increase, that depends. An increase in productivity in an industry might not necessarily entail an increase in profits for those in that industry. That's the basis for cartels, restriction production in order to boost profits.
> Goods and services that don't follow normal supply-demand logic (education) or have excessive regulation controlling supply (healthcare, real estate) are the exception to this.
This is not necessarily the case, i.e., services can decline in price as well as output increases. If, for example, the money supply were fixed but there were now twice as many workers, there is half the amount of money to go around for each person (but this is not really a problem because money is only useful as far as it is used to purchase goods and services, and in this scenario there are now twice as many goods and services to go around, so it balances out). So if the money supply were completely fixed, you would expect the price of everything to decline over time. However, historically, before the Federal Reserve, prices were relatively stable over periods as long as a hundred years. This is probably because the money supply was not actually fixed - it was backed by gold, and the more the economy grew, the more gold could be mined.
> The government printed more money to pay for the war, but it could alternatively have taken on more debt
Well, this is precisely how the Federal Reserve system works (at least in theory). It doesn't simply hand the government a blank check (although these days it might as well). It lends money to the government to spend. Actually, the process is slightly more convoluted. The government borrows money by selling bonds, and then bondholders sell those bonds to the Fed.
Regardless, the end result is the same, an influx of created money entering the economy. Other forms of lending plays a central part in money creation, through what's called the money multiplier, and the Fed has traditionally targeted inflation by lowering interest rates, making it cheaper to borrow money, encouraging more borrowing, and thereby increasing the money multiplier. So in any event, the cause of inflation is an expansion of the money supply. The money printer by itself is responsible for only M0, but other actions by the government can grow or shrink the larger money supply (M2).
> Value does not come from money
I didn't say that. I said money measures value. Without money, value is purely subjective.
> Real value comes from the goods and services actually produced
Agreed. And making more money over time is a means of measuring "real value" creation. It's a crude approximation (patent trolls and telemarketers are strictly negative value IMO, and they still make money) but it's the best we have right now.
> An increase in productivity in an industry might not necessarily entail an increase in profits for those in that industry.
True. It can also spark price wars and a race to the bottom, which is great for consumers. However companies are required to make a profit in order to continue to survive. Otherwise they run out of money eventually. This is the current reality of balance sheets and return on capital and quarterly results. Wanting currencies to be deflationary under this reality is like wishing that time runs forward for everyone else while you keep getting younger.
> the money supply was not actually fixed - it was backed by gold
Why does anyone give a shit about gold? Why does it have any value? This whole thing is circular reasoning. "Gold standard currencies are good because they're deflationary. Deflationary currencies are good because they're backed by gold".
> the cause of inflation is an expansion of the money supply
When speaking of inflation, I feel like it's necessary to differentiate between nominal inflation (the number on your grocery receipt goes up) and real inflation (percentage of your income/assets spent at the grocery store goes up). Btw, I'm not an economist so I have no idea if these are real terms. But as a consumer, these are the only things that actually matter to me. I wouldn't care to live in the 19th century, when the price of wheat only increased by 10 cents/bushel decade-over-decade, if I couldn't afford enough food to feed my family.
Moreover, given how different everything in the 19th century was (open immigration, tons free land to settle, tons of newly discovered resources, less competition for everything, less well-developed capital markets, less global trade), I'm skeptical about how useful it is to compare prices of consumer goods back then to now.
Sure the money printer makes all the numbers go up in a scary way. But does it make people poorer in real terms? The answer to that IMO is, "it depends". If the money supply exceeds actual value produced in the economy, it does. If not, it doesn't.
I didn't say that. I said money measures value. Without money, value is purely subjective.
> Real value comes from the goods and services actually produced
Agreed. And making more money over time is a means of measuring "real value" creation. It's a crude approximation (patent trolls and telemarketers are strictly negative value IMO, and they still make money) but it's the best we have right now.
> An increase in productivity in an industry might not necessarily entail an increase in profits for those in that industry.
True. It can also spark price wars and a race to the bottom, which is great for consumers. However companies are required to make a profit in order to continue to survive. Otherwise they run out of money eventually. This is the current reality of balance sheets and return on capital and quarterly results. Wanting currencies to be deflationary under this reality is like wishing that time runs forward for everyone else while you keep getting younger.
> the money supply was not actually fixed - it was backed by gold
Why does anyone give a shit about gold? Why does it have any value? This whole thing is circular reasoning. "Gold standard currencies are good because they're deflationary. Deflationary currencies are good because they're backed by gold".
> the cause of inflation is an expansion of the money supply
When speaking of inflation, I feel like it's necessary to differentiate between nominal inflation (the number on your grocery receipt goes up) and real inflation (percentage of your income/assets spent at the grocery store goes up). Btw, I'm not an economist so I have no idea if these are real terms. But as a consumer, these are the only things that actually matter to me. I wouldn't care to live in the 19th century, when the price of wheat only increased by 10 cents/bushel decade-over-decade, if I couldn't afford enough food to feed my family.
Moreover, given how different everything in the 19th century was (open immigration, tons free land to settle, tons of newly discovered resources, less competition for everything, less well-developed capital markets, less global trade), I'm skeptical about how useful it is to compare prices of consumer goods back then to now.
Sure the money printer makes all the numbers go up in a scary way. But does it make people poorer in real terms? The answer to that IMO is, "it depends". If the money supply exceeds actual value produced in the economy, it does. If not, it doesn't.
Your negative reaction to my comment about the gold standard is misplaced. I only mentioned it to explain the historical characteristics of the money supply, namely the stability of prices during the 19th century. I'm no goldbug and do not particularly care that money has to be backed by anything.
> And making more money over time is a means of measuring "real value" creation.
This is only because that's a characteristic of how the modern money supply works. Money itself does not create value; if tomorrow the money printer turned off and from now until the end of time everyone worked with a fixed quantity of dollars, that would not stop value from being created.
> However companies are required to make a profit in order to continue to survive. Otherwise they run out of money eventually.
They could break even. Anyway, there is economic profit and normal profit. The latter refers to profit on the balance books, while economic profit accounts for the opportunity cost involved. In the pure competition model, the economic profit is driven to zero, yet companies making no economic profit will still survive. If a company can year over year make enough money to pay for its expenses and the expenses of its employees and operators, it will survive. It could make less money one year than the year before, but if its expenses declined as well, it can continue (note that this again doesn't entail less value produced, as more real products could be produced for a lower price). There's nothing fundamental about a deflationary currency that would prevent a company from making enough money to meet its costs.
> I wouldn't care to live in the 19th century, when the price of wheat only increased by 10 cents/bushel decade-over-decade, if I couldn't afford enough food to feed my family.
> Moreover, given how different everything in the 19th century was (open immigration, tons free land to settle, tons of newly discovered resources, less competition for everything, less well-developed capital markets, less global trade), I'm skeptical about how useful it is to compare prices of consumer goods back then to now.
I only spoke of the 19th century only to point out that economic growth is not the cause of inflation, as you had asserted above (with a possible exception in the short run as I mentioned above). It is caused by an expansion of the money supply.
Whether inflation or deflation are good or bad are separate arguments. I think both can lead to problems. Deflation encourages people to hoard money, as a productive investment that isn't productive enough could lose money; without deflation, even if you don't beat the opportunity cost you could have made, at least you're better off than if you had just kept your money as cash. Inflation, on the other hand, encourages risky and speculative investment. It is no coincidence that cryptocurrencies have exploded in price in the cheap money, low interest rate environment we currently have. Anyone who saves money in a bank is essentially losing money. So a good deal of money has been created, and it goes towards chasing any type of asset that is appreciating in value - stocks, land, and cryptocurrency. The S&P 500 has doubled in value in the last five years, but the economy did not even nominally grow by 20%. It is a recipe for a bubble, or worse if the Federal Reserve decides to try and keep that bubble from popping by any means necessary.
> And making more money over time is a means of measuring "real value" creation.
This is only because that's a characteristic of how the modern money supply works. Money itself does not create value; if tomorrow the money printer turned off and from now until the end of time everyone worked with a fixed quantity of dollars, that would not stop value from being created.
> However companies are required to make a profit in order to continue to survive. Otherwise they run out of money eventually.
They could break even. Anyway, there is economic profit and normal profit. The latter refers to profit on the balance books, while economic profit accounts for the opportunity cost involved. In the pure competition model, the economic profit is driven to zero, yet companies making no economic profit will still survive. If a company can year over year make enough money to pay for its expenses and the expenses of its employees and operators, it will survive. It could make less money one year than the year before, but if its expenses declined as well, it can continue (note that this again doesn't entail less value produced, as more real products could be produced for a lower price). There's nothing fundamental about a deflationary currency that would prevent a company from making enough money to meet its costs.
> I wouldn't care to live in the 19th century, when the price of wheat only increased by 10 cents/bushel decade-over-decade, if I couldn't afford enough food to feed my family.
> Moreover, given how different everything in the 19th century was (open immigration, tons free land to settle, tons of newly discovered resources, less competition for everything, less well-developed capital markets, less global trade), I'm skeptical about how useful it is to compare prices of consumer goods back then to now.
I only spoke of the 19th century only to point out that economic growth is not the cause of inflation, as you had asserted above (with a possible exception in the short run as I mentioned above). It is caused by an expansion of the money supply.
Whether inflation or deflation are good or bad are separate arguments. I think both can lead to problems. Deflation encourages people to hoard money, as a productive investment that isn't productive enough could lose money; without deflation, even if you don't beat the opportunity cost you could have made, at least you're better off than if you had just kept your money as cash. Inflation, on the other hand, encourages risky and speculative investment. It is no coincidence that cryptocurrencies have exploded in price in the cheap money, low interest rate environment we currently have. Anyone who saves money in a bank is essentially losing money. So a good deal of money has been created, and it goes towards chasing any type of asset that is appreciating in value - stocks, land, and cryptocurrency. The S&P 500 has doubled in value in the last five years, but the economy did not even nominally grow by 20%. It is a recipe for a bubble, or worse if the Federal Reserve decides to try and keep that bubble from popping by any means necessary.
It's not a currency. It doesn't even pass macro encon 101 definitional smell test of currency
Currency competition alone is a major milestone. The USD is the _legal_ tender of the US. As in other currencies are not allowed.
Because digital currency can't just be taken down, those that don't want to live under an inflationary de-facto tax, now have that option.
Because digital currency can't just be taken down, those that don't want to live under an inflationary de-facto tax, now have that option.
I can't believe this blatant denialism still exists on HN despite the fact that Ethereum has a thriving defi ecosystem. I can get a loan peer to peer today with my ETH in a stablecoin and yet you say there's no there there? Right....
Cryptos also have a thriving theft ecosystem, and illegal uses dwarf the few defi experiments.
Ya... And the internet is used for pirating media, porn, wasting time browsing, gaming and the other millions of "useless" things that it's associated with. The amount of sheer time wasted on the internet is incredible, let alone all the filthy illegal things that are happening on it.
Guess we can throw the internet into the trash bin too.
Guess we can throw the internet into the trash bin too.
Not really such a bad idea, these days
I remember the mantra well. I remember the backwards messages in rock music were blamed for brainwashing kids. They would slow a record down and play it backwards and come up with words from the noise that matched their fear message.
So does any traditional government issued currency, credit cards and banking loans and that doesn't make them useless to me.
Would I work for a crypto startup or as a crypto developer in the US if I'm not a citizen? No
Does crypto work as advertised? Yes
Social wellfare, a 401k, etc... are also "get in first get more money out if you get in late" schemes. A lot of people already cashed out their crypto to tangible assets and are set for life. A lot of other people have our pools as a risky investment and every once in a while rabalance and it puts food on the table. It's full of people with bad intentions but open your eyes, so is the world, those people are also doing pump and dumps and pyramid schemes with fiat and the stock market and putting hits on drug dealers over snail mail or dead-drops.
Would I work for a crypto startup or as a crypto developer in the US if I'm not a citizen? No
Does crypto work as advertised? Yes
Social wellfare, a 401k, etc... are also "get in first get more money out if you get in late" schemes. A lot of people already cashed out their crypto to tangible assets and are set for life. A lot of other people have our pools as a risky investment and every once in a while rabalance and it puts food on the table. It's full of people with bad intentions but open your eyes, so is the world, those people are also doing pump and dumps and pyramid schemes with fiat and the stock market and putting hits on drug dealers over snail mail or dead-drops.
Source for the last point? I’m quite certain this is not the case anymore.
That doesn't cause the positive use cases to not exist.
So does the internet. It was even worse in the early days of the web.
[deleted]
Is there any advantage over existing systems either for the lender or the debtor?
Huge advantages for both. For example, something that's only possible on a blockchain is a flashloan. This is where you can get a loan for any amount (liquidity provided) as long as you repay the full loan amount in the same block. This primitive alone allows for much higher velocities of money since value can be moved and repayed in a single block (on the order of 10 seconds).
All of the advantages of defi boil down to increases in velocity of money. For example you can deposit funds into a contract and receive a token that represents your liquidity position. You can then use this token in other applications. So now you have this composability of money which allows people to create new financial primitives.
All of the advantages of defi boil down to increases in velocity of money. For example you can deposit funds into a contract and receive a token that represents your liquidity position. You can then use this token in other applications. So now you have this composability of money which allows people to create new financial primitives.
> This is where you can get a loan for any amount (liquidity provided) as long as you repay the full loan amount in the same block.
What is the point of that?
> So now you have this composability of money which allows people to create new financial primitives.
Are there any useful for anything beyond gambling/speculation/NFT-like FOMO-powered bubbles?
What is the point of that?
> So now you have this composability of money which allows people to create new financial primitives.
Are there any useful for anything beyond gambling/speculation/NFT-like FOMO-powered bubbles?
>> This is where you can get a loan for any amount (liquidity provided) as long as you repay the full loan amount in the same block.
> What is the point of that?
Leveraging arbitrage
> What is the point of that?
Leveraging arbitrage
"This primitive alone allows for much higher velocities of money since value can be moved and repayed in a single block (on the order of 10 seconds)."
what can be usefully arbitraged in that time in way that guarantees no loss?
what can be usefully arbitraged in that time in way that guarantees no loss?
It's actually way funnier than GOP presets to be. Flashloan must be paid back in the same transaction. Since whole thing happens in the same tx, it's atomic. So you can use smart-contract logic to determine if you are actually making a profit, and if you are not - revert!
Exploiting contract bugs.
OK but why and for what purpose?
THETA->Super Hi Def video streaming
https://www.thetatoken.org/
VET-> Supply Chain Authentication for Businesses https://www.vechain.org/
Are two real world examples that are starting to see adoption. Also this articles covers it well: https://101blockchains.com/practical-blockchain-use-cases/
VET-> Supply Chain Authentication for Businesses https://www.vechain.org/
Are two real world examples that are starting to see adoption. Also this articles covers it well: https://101blockchains.com/practical-blockchain-use-cases/
I am an engineer for more than 12 years. I think I have a reasonably good idea of how a blockchain works.
I have no idea how these two projects are supposed to work. Who is supposed to use this if there isn't even a concise description of the product?
Judging by their Twitter accounts both of these companies have been around since 2017. How many active users do they have?
I have no idea how these two projects are supposed to work. Who is supposed to use this if there isn't even a concise description of the product?
Judging by their Twitter accounts both of these companies have been around since 2017. How many active users do they have?
https://www.youtube.com/watch?v=hf-Op-1peZI for less formal overview
https://www.thetatoken.org/ contains white papers if you want the technicals.
I think he's asking if anyone has found this useful in 5 years? Are there actual customers or is this just an idea?
A couple of things. First these are companies that are building up. They are not fully instituted. Second they have many partners that are helping them build out. As far as customers, yes both THETA and VET have customers....including some .gov customers.
Who is giving out 10 second loans and why would they do that?
Non custodial, trustless loans mean I can get a loan against my existing assets without ever interacting with any individual or being subject to scrutiny. A single smart contract can do the job of entire banks.
[deleted]
HN crowd are like the flat earthers of the cryptosphere. When people's self esteem relies on them being contrarian don't expect them to actually put in the effort to learn about something.
I understand crypto perfectly and I strongly believe that it's ultimately useless. The difference is that I have no financial incentive to tell everyone I know about crypto, whereas you certainly do.
I'll leave it up to the audience to decide which one of us is biased.
I'll leave it up to the audience to decide which one of us is biased.
If you understood it perfectly you wouldn't believe it to be useless.
People have broad understanding of failed products all the time. Sometimes, the people closest to the product think it has more value than it does. This is hacker news, we watch startups fail all the time because they had a great idea no one actually needed and we see people run their companies into the ground trying to pivot on a tech that has no real practical application.
I ignored crypto for several years because I put too much weight on opinions from HN. I'd probably be retired by now if I'd actually paid more attention.
we live in an age when governments are tightening controls and are spying relentlessly on their population, as a result there seems to be a significant demand for means to escape these controls at least somehow, i think crytocurrencies answer this need, so it is not just a pyramid scheme/worldwide casino.
I think you're conflating _consensus_ and _governance_; the two are quite different. It's not PoW vs PoS that allows a chain to resist a coordinated attempt by elites to force a protocol change, it's users personally verifying the chain (and so automatically rejecting chains that violate the rules even if >51% of PoW/PoS nodes support those chains). So no, PoS is not "how our current financial system works". Our current financial system doesn't give people the ability to independently verify anything at all; it's even worse than the most centralized chains in that regard.
I would actually say PoS is more resistant to cabals and regulatory systems than PoW; PoW mining requires huge and visible capital investments and electricity consumption and it's incredibly easy for governments to detect and shut down miners in their own countries (not as true for GPU mining, but GPU-friendliness is difficult to sustain long term), whereas you can be a PoS validator with the most basic computer hardware from anywhere.
I would actually say PoS is more resistant to cabals and regulatory systems than PoW; PoW mining requires huge and visible capital investments and electricity consumption and it's incredibly easy for governments to detect and shut down miners in their own countries (not as true for GPU mining, but GPU-friendliness is difficult to sustain long term), whereas you can be a PoS validator with the most basic computer hardware from anywhere.
I'm mostly talking about governance. The biggest "users" and governance decision makers of any PoS protocol will be regulated financial institutions (e.g. Coinbase) operating on behalf of end users. In theory Joe Schmoe can be a staker from his garage, but in practice the only stakers that matter will be regulated custodians (full disclosure, I am the CEO of a regulated custodian) other than a handful of independent ETH whales (like yourself).
Yes there will be a number of custodians "competing" with each other, but they will all largely operate under the same regulatory jurisdiction (or at least cooperating jurisdictions). If a PoS currency becomes mainstream, the Federal Reserve (because regulated banks will be the largest custodians) and Dept. of Treasury will have significant influence on governance debates.
The big issue here is that governance decisions in PoW systems are split between miners (geographically distributed), custodians (largely US based) and other economic actors. In PoS systems only custodians will call the shots. That has very serious implications because custodians are regulated financial institutions with significant network effects, miners do not have this centralizing force.
Lastly, to actually become a miner in a PoS system requires you to find or create a cheap source of energy and hardware and maintain this advantage in perpetuity. This is external to the system and can be done without paying off any existing Bitcoin actor. In a PoS system you, by definition, need to pay to play - you must purchase a sufficient stake of the currency from an existing insider if you want to have a seat at the table. It's the perfect insider game. Some may argue it aligns incentives, but it also centralizes control.
These systems all have different tradeoffs. Maybe some people are ok with these tradeoffs for switching to PoS, but I'm not.
Yes there will be a number of custodians "competing" with each other, but they will all largely operate under the same regulatory jurisdiction (or at least cooperating jurisdictions). If a PoS currency becomes mainstream, the Federal Reserve (because regulated banks will be the largest custodians) and Dept. of Treasury will have significant influence on governance debates.
The big issue here is that governance decisions in PoW systems are split between miners (geographically distributed), custodians (largely US based) and other economic actors. In PoS systems only custodians will call the shots. That has very serious implications because custodians are regulated financial institutions with significant network effects, miners do not have this centralizing force.
Lastly, to actually become a miner in a PoS system requires you to find or create a cheap source of energy and hardware and maintain this advantage in perpetuity. This is external to the system and can be done without paying off any existing Bitcoin actor. In a PoS system you, by definition, need to pay to play - you must purchase a sufficient stake of the currency from an existing insider if you want to have a seat at the table. It's the perfect insider game. Some may argue it aligns incentives, but it also centralizes control.
These systems all have different tradeoffs. Maybe some people are ok with these tradeoffs for switching to PoS, but I'm not.
How does this view of PoS governance explain how Ethereum protocol governance has operated in reality for the past five years?
As far as I can tell, the power held by miners has been minimal; if miners had any significant power at all then the various issuance reductions and now EIP 1559 would not have been accepted nearly so smoothly. So when miners are replaced by PoS validators, the power that PoS validators will be inheriting is not that much...
> Yes there will be a number of custodians "competing" with each other, but they will all largely operate under the same regulatory jurisdiction (or at least cooperating jurisdictions)
Even if this is true (given all the decentralized staking pools coming out, and the still really large number of solo stakers, I really doubt it!), I don't see how that state of affairs would survive any attempt by governments to actually use their jurisdictional power. It's very easy to move stake around (or at least it will be very easy post-merge), so once a single pool does anything disagreeable people can just move their ETH to other pools. And staking infrastructure can live in any country; there aren't even constraints around needing to have cheap electricity there.
> This is external to the system and can be done without paying off any existing Bitcoin actor
I've heard this argument many times, but.... why does that even matter? Making a PoW farm requires paying off a hardware provider. Hardware providers are far more centralized than cryptocurrency hodlers, of which there are millions and you just need to find one willing to sell to you. "I want to buy coins but the existing hodlers are all colluding to not let me" is not a problem that anyone in the cryptocurrency space actually worries about in real life. Specialized hardware manufacturers, on the other hand, are few enough that such a thing is at least actually plausible....
As far as I can tell, the power held by miners has been minimal; if miners had any significant power at all then the various issuance reductions and now EIP 1559 would not have been accepted nearly so smoothly. So when miners are replaced by PoS validators, the power that PoS validators will be inheriting is not that much...
> Yes there will be a number of custodians "competing" with each other, but they will all largely operate under the same regulatory jurisdiction (or at least cooperating jurisdictions)
Even if this is true (given all the decentralized staking pools coming out, and the still really large number of solo stakers, I really doubt it!), I don't see how that state of affairs would survive any attempt by governments to actually use their jurisdictional power. It's very easy to move stake around (or at least it will be very easy post-merge), so once a single pool does anything disagreeable people can just move their ETH to other pools. And staking infrastructure can live in any country; there aren't even constraints around needing to have cheap electricity there.
> This is external to the system and can be done without paying off any existing Bitcoin actor
I've heard this argument many times, but.... why does that even matter? Making a PoW farm requires paying off a hardware provider. Hardware providers are far more centralized than cryptocurrency hodlers, of which there are millions and you just need to find one willing to sell to you. "I want to buy coins but the existing hodlers are all colluding to not let me" is not a problem that anyone in the cryptocurrency space actually worries about in real life. Specialized hardware manufacturers, on the other hand, are few enough that such a thing is at least actually plausible....
> "I want to buy coins but the existing hodlers are all colluding to not let me"
This isn't the problem. The problem is, "I want to buy enough coins to stake without being diluted but existing hodlers are all colluding to not let me by charging me a price equal to the total expected returns the staked coins would produce" The emphasized parts are where PoS has trouble. The market forces governing PoS incentivize hodlers rich enough to stake to never allow more stakers to arise -- the act of selling ETH is now also the act of giving up future revenue from keeping it and staking it.
This isn't the problem. The problem is, "I want to buy enough coins to stake without being diluted but existing hodlers are all colluding to not let me by charging me a price equal to the total expected returns the staked coins would produce" The emphasized parts are where PoS has trouble. The market forces governing PoS incentivize hodlers rich enough to stake to never allow more stakers to arise -- the act of selling ETH is now also the act of giving up future revenue from keeping it and staking it.
How is selling ETH different from selling a stock that has dividends?
Two ways:
* The "stock" (token) is constantly spitting
* The "stock" grants the bearer both a continuous dividend as well as a vote on deciding what "work" (transactions) the "company" (chain) takes on.
Is there a real-world stock with these properties?
* The "stock" (token) is constantly spitting
* The "stock" grants the bearer both a continuous dividend as well as a vote on deciding what "work" (transactions) the "company" (chain) takes on.
Is there a real-world stock with these properties?
> How does this view of PoS governance explain how Ethereum protocol governance has operated in reality for the past five years? As far as I can tell, the power held by miners has been minimal.
Miners have no power because ETH governance is deliberately centralized away from them.
1. Ethereum has a founder (you), who can effectively unilaterally change the protocol. You've been clear for a long time that ETH miners are temporary participants in this project.
2. Very few ETH owners run their own node or participate in actively validating and enforcing governance decisions, so you and the dev team effectively call the shots. Miners have no choice but to follow whatever protocol update Infura and the few other node-as-a-service companies decide to support.
> I don't see how that state of affairs would survive any attempt by governments to actually use their jurisdictional power
Since the largest holders will be regulated legal entities, it will be quite trivial for governments to do this. Also my understanding is that ETH staking is not delegated, so moving funds is not trivial for institutions since this is highly regulated activity.
> so once a single pool does anything disagreeable people can just move their ETH to other pools
Deposits at financial institutions are sticky. People and institutions generally aren't going to withdraw their ETH from Coinbase because of some governance debate.
> I've heard this argument many times, but.... why does that even matter?
Because it's a decentralizing force. To build and pay for a mining operation you need to sell off your Bitcoin to (often new) buyers. A larger mining operation has larger costs and is constantly at the mercy of the energy and hardware markets. In comparison, all stakers, regardless of size, have effectively the same small fixed cost. A big institutional staker will continue to grow their wealth with no increase in cost and no competitive pressures. They just sit on their $$ and keep collecting more in perpetuity.
Miners have no power because ETH governance is deliberately centralized away from them.
1. Ethereum has a founder (you), who can effectively unilaterally change the protocol. You've been clear for a long time that ETH miners are temporary participants in this project.
2. Very few ETH owners run their own node or participate in actively validating and enforcing governance decisions, so you and the dev team effectively call the shots. Miners have no choice but to follow whatever protocol update Infura and the few other node-as-a-service companies decide to support.
> I don't see how that state of affairs would survive any attempt by governments to actually use their jurisdictional power
Since the largest holders will be regulated legal entities, it will be quite trivial for governments to do this. Also my understanding is that ETH staking is not delegated, so moving funds is not trivial for institutions since this is highly regulated activity.
> so once a single pool does anything disagreeable people can just move their ETH to other pools
Deposits at financial institutions are sticky. People and institutions generally aren't going to withdraw their ETH from Coinbase because of some governance debate.
> I've heard this argument many times, but.... why does that even matter?
Because it's a decentralizing force. To build and pay for a mining operation you need to sell off your Bitcoin to (often new) buyers. A larger mining operation has larger costs and is constantly at the mercy of the energy and hardware markets. In comparison, all stakers, regardless of size, have effectively the same small fixed cost. A big institutional staker will continue to grow their wealth with no increase in cost and no competitive pressures. They just sit on their $$ and keep collecting more in perpetuity.
Benevolent dictators can make their dictatorship feel very democratic if they aren't abusing their power. The problem is that benevolence eventually erodes when conflicted interests come to head.
Then everyone sees how truly democratic/free something is.
Then everyone sees how truly democratic/free something is.
I'd further add on to say PoS has the benefit of being able to eliminate bad actors unilaterally. You can't stop anyone from attacking a PoW chain over and over again. Attacking a PoS chain is much riskier as the attacker's stakes are held on chain and are at the mercy of the community who uses the network.
Now replace "attacker" with "somebody the largest stakers don't like" and see how dangerous this becomes.
Why does the attacker need to hold or buy any coins? All the attacker has to do to wreck havoc is prevent quorum from being reached. This can be done by knocking validators offline (which is a slashable penalty), or hacking validators and making them slash themselves, or hacking an exchange or two in order to amass control of 33% or more of the voting power.
If hacking billions of dollars of cryptocurrency was actually easy, plenty of people who are not rich right now would be very very rich. Alternatively, if PoS chains are vulnerable because you can hack exchanges and use their coins to attack, then PoW chains are vulnerable because you can hack exchanges, sell the proceeds to buy ASICs (or just buy the ASIC company), and use those ASICs to attack the PoW network.
Hacking billions of dollars of cryptocurrency is NOT easy, and it gets harder with every passing month, because validators and hodlers have billions of dollars of incentive to protect themselves.
Hacking billions of dollars of cryptocurrency is NOT easy, and it gets harder with every passing month, because validators and hodlers have billions of dollars of incentive to protect themselves.
Which is easier to pull off, once you have control of the stolen coins?
* Use them to vote for two chain histories, and thereby get the victims slashed?
* Launder the stolen coins, buy an ASIC fab, churn out ASICs, plug them into the power grid, and use them to continuously and sustainably attack a PoW chain for eternity, all while not getting caught?
In case it's not obvious, the first one can be done the second the compromise takes place. The second one takes years.
> Hacking billions of dollars of cryptocurrency is NOT easy, and it gets harder with every passing month, because validators and hodlers have billions of dollars of incentive to protect themselves.
Why should a hodler bet that over 2/3 of the chain's validators will never, ever be compromised? Money doesn't buy invulnerability, and an attacker only has to succeed once at breaking quorum to break the chain.
* Use them to vote for two chain histories, and thereby get the victims slashed?
* Launder the stolen coins, buy an ASIC fab, churn out ASICs, plug them into the power grid, and use them to continuously and sustainably attack a PoW chain for eternity, all while not getting caught?
In case it's not obvious, the first one can be done the second the compromise takes place. The second one takes years.
> Hacking billions of dollars of cryptocurrency is NOT easy, and it gets harder with every passing month, because validators and hodlers have billions of dollars of incentive to protect themselves.
Why should a hodler bet that over 2/3 of the chain's validators will never, ever be compromised? Money doesn't buy invulnerability, and an attacker only has to succeed once at breaking quorum to break the chain.
> if PoS chains are vulnerable because you can hack exchanges and use their coins to attack, then PoW chains are vulnerable because you can hack exchanges, sell the proceeds to buy ASICs (or just buy the ASIC company), and use those ASICs to attack the PoW network.
Which one is easier to do and get away with?
Which one is easier to do and get away with?
Correct me if I'm wrong, but being offline is not a slashable penalty. You would slowly lose ETH and eventually be ejected, but not slashed like a malicious validator would be.
Maybe I'm applying the term "slashing" too broadly. I've historically used it to describe the act of having your tokens taken away for bad behavior (either all at once, or incrementally). Is there a more-specific term for describing the process by which an offline validator loses their ETH over time?
The point is it mitigates the on-chain attack surface which is still prevalent on PoW. Off-chain attacks are still possible for all consensus mechanism.
What on-chain attack surface? The only way to permanently knock a PoW chain offline is to consistently out-mine everyone else. In PoS, once you lose BFT quorum (1/3 of all votes), it's game over.
> In PoS, once you lose BFT quorum (1/3 of all votes), it's game over.
This is not how the Ethereum PoS chain's LMD GHOST fork choice works. If >1/3 drop offline, you stop finalizing, but the chain keeps growing.
This is not how the Ethereum PoS chain's LMD GHOST fork choice works. If >1/3 drop offline, you stop finalizing, but the chain keeps growing.
No distributed system is guaranteed to make forward progress if over 1/3 of its voting nodes is faulty, full stop. Once an adaptive adversary controls more than 1/3 of the voting power, they can forever delay the remaining 2/3 of the voting nodes from reaching consensus. Hell, they'd even be able to delay votes from other nodes to slash their stolen stash.
From this, I can conclude at least one of the following:
* LMD GHOST is incorrect
* your understanding of it is incorrect
* LMD GHOST is not a BFT consensus algorithm
From this, I can conclude at least one of the following:
* LMD GHOST is incorrect
* your understanding of it is incorrect
* LMD GHOST is not a BFT consensus algorithm
[deleted]
If the community forks to void an attacker's coins, that creates a very bad precedent. It already happened with the dao hack (which was pretty bad to begin with), but if it keeps happening, why would you trust that blockchain.
PoS doesn't fork the chain, you just lose your stake if you stake malicious blocks: https://ethereum.org/en/developers/docs/consensus-mechanisms...
Important to note that Vitalik massively gains from Ethereum transitioning to Proof-of-Stake since he controls a large percentage of total ETH due to premining it before the project launched.
Important to note that anyone who holds ETH gains if the price goes up.
I salute you Sherlock.
I salute you Sherlock.
Vitalik in particular stands to gain from the system switching to rewarding those with more wealth in the system.
And shockingly (/s) Vitalik allocated a disproportionate stake relative to 99% of people.
It's the rich getting richer but on the blockchain <tm>.
And shockingly (/s) Vitalik allocated a disproportionate stake relative to 99% of people.
It's the rich getting richer but on the blockchain <tm>.
looks like you missed "controls a large percentage of total ETH"
Except he doesn't
How can you verify that? currently everybody just listens to what he has to say, when he decided to undo the DAO hack, the original "immutable" chain just died off because Vitalik put his vote on ETH. Sincerely, I really wish he hadn't done that.
(I'm guessing vbuterin is THE vbuterin here)
(I'm guessing vbuterin is THE vbuterin here)
Every single one of your comments up and down this thread is incorrect misinformation and it's extremely tiring.
1) His address is public (which I'm sure you're well aware and are intentionally ignoring so you can FUD): https://etherscan.io/address/0xab5801a7d398351b8be11c439e05c...
2) The blockchain wasn't mutated after the DAO hack. This has been well reported.
3) "He" didn't decide to do anything, the Ethereum community did.
Stop with the endless BTC maxi talking points and misinformation warfare.
1) His address is public (which I'm sure you're well aware and are intentionally ignoring so you can FUD): https://etherscan.io/address/0xab5801a7d398351b8be11c439e05c...
2) The blockchain wasn't mutated after the DAO hack. This has been well reported.
3) "He" didn't decide to do anything, the Ethereum community did.
Stop with the endless BTC maxi talking points and misinformation warfare.
> The blockchain wasn't mutated after the DAO hack. This has been well reported.
https://web.archive.org/web/20201214170136if_/https://www.re...
from another post: https://news.ycombinator.com/item?id=27202347
https://web.archive.org/web/20201214170136if_/https://www.re...
from another post: https://news.ycombinator.com/item?id=27202347
That's a post on Reddit spewing a lot of provenly false Bitcoin-maxi tropes. Same old tired song and game. Bitcoin relies on misinforming people in order to stay relevant. Good day to you sir.
I'm not a Bitcoin-maxi, calling someone a "bitcoin-maxi" and dismissing their argument isn't a valid way to counter. Kindly explain the tropes to us and enlighten us why that is provenly false. I'll read it, I promise.
[deleted]
Why did you edit out the actual address?
Vitalik didn't decide to undo the DAO hack, there was a community vote (http://v1.carbonvote.com/), unlike Satoshi who singlehandedly rolled back the chain in 2010 after the 184 billion BTC hack.
https://bitcointalk.org/index.php?topic=823.msg9573#msg9573
https://bitcointalk.org/index.php?topic=823.msg9573#msg9573
Satoshi fixed a bug (that reverted it back to the initial rules everyone agreed upon).
The DAO hack actually was an exploitation of the rules that everyone agreed upon in the DAO, recursively calling a function in your smart contract layer is not a bug.
This brings us to an interesting topic, bugs are common in software,
* Should you make the protocol layer so complex that it increases the probability of bugs being found, being harder to understand and potentially grind the whole system to a halt if a bug is found.
OR
* Should you break them up into layers where each layer has one responsibility (base monetary layer, a smart contract layer, a micro payments layer etc.)
The DAO hack actually was an exploitation of the rules that everyone agreed upon in the DAO, recursively calling a function in your smart contract layer is not a bug.
This brings us to an interesting topic, bugs are common in software,
* Should you make the protocol layer so complex that it increases the probability of bugs being found, being harder to understand and potentially grind the whole system to a halt if a bug is found.
OR
* Should you break them up into layers where each layer has one responsibility (base monetary layer, a smart contract layer, a micro payments layer etc.)
> Satoshi fixed a bug (that reverted it back to the initial rules everyone agreed upon).
The Bitcoin chain fork where the bug manifested wasn't reverted. Instead, a chain fork where the bug didn't manifest outgrew the one that did, and is now the canonical fork. If they wanted, miners could continue to mine the fork where the bug manifested. The point is, the Bitcoin protocol didn't change at all -- it merely presented miners and users a choice between two conflicting histories. You can start up a miner on the other fork today if you wanted.
This is not true for Ethereum. Because the undecidability of the EVM precludes miners from determining whether or not a given transaction would touch the DAO contract without first executing the transaction for less than the cost of executing them, there was really no good answer to dealing with the DAO hack. The options were:
* Let the DAO hacker keep the proceeds (this became Ethereum Classic)
* Change the network protocol to prevent the DAO code from ever running (this is Ethereum today)
* Change the EVM so it would permit miners to determine which contract(s) are reachable from a given transaction, thereby allowing them to filter out contracts that could move the DAO funds (a path not taken, because censorship)
The Bitcoin chain fork where the bug manifested wasn't reverted. Instead, a chain fork where the bug didn't manifest outgrew the one that did, and is now the canonical fork. If they wanted, miners could continue to mine the fork where the bug manifested. The point is, the Bitcoin protocol didn't change at all -- it merely presented miners and users a choice between two conflicting histories. You can start up a miner on the other fork today if you wanted.
This is not true for Ethereum. Because the undecidability of the EVM precludes miners from determining whether or not a given transaction would touch the DAO contract without first executing the transaction for less than the cost of executing them, there was really no good answer to dealing with the DAO hack. The options were:
* Let the DAO hacker keep the proceeds (this became Ethereum Classic)
* Change the network protocol to prevent the DAO code from ever running (this is Ethereum today)
* Change the EVM so it would permit miners to determine which contract(s) are reachable from a given transaction, thereby allowing them to filter out contracts that could move the DAO funds (a path not taken, because censorship)
> The Bitcoin chain fork where the bug manifested wasn't reverted. Instead, a chain fork where the bug didn't manifest outgrew the one that did, and is now the canonical fork.
That's right, thank you for adding the missing nuance.
That's right, thank you for adding the missing nuance.
I want to add to this, some additional material, anyone interested in the current state of DeFi can understand this
https://medium.com/coinmonks/demystify-the-dark-forest-on-et...
https://medium.com/coinmonks/demystify-the-dark-forest-on-et...
Coinvotes in the context of massive insider premines is completely useless. Of course a coinvote would reflect "Yes to censoring the DAO hacker" because the DAO hacker controlled more ETH than the top 3 current ETH accounts. And the insiders stand to benefit the most from proof of stake because it's a system designed to further enrich the already rich.
Vitalik, just one person, owns billions in ETH. That is the top 0.1%.
There's definitely ETH holders who have more ETH than I do, including those who did _not_ benefit from the premine.
(And there's BTC holders with more than 0.3% of all BTC)
(And there's BTC holders with more than 0.3% of all BTC)
> (And there's BTC holders with more than 0.3% of all BTC)
And yet, they can't stake their Bitcoin gain influence in the network. They're just another user in user-land
And yet, they can't stake their Bitcoin gain influence in the network. They're just another user in user-land
What kind of "influence in the network" do you gain by staking?
(Keep in mind that in present-day Ethereum, the influence that PoW miners have in protocol governance is pretty minimal)
(Keep in mind that in present-day Ethereum, the influence that PoW miners have in protocol governance is pretty minimal)
And Satoshi, just one person, owns tens of billions in BTC. That is the top 0.01%.
Satoshi is not actively working to move Bitcoin to PoS though. And for all practical purposes, his stash is as good as gone.
Satoshi mined every single one of it and anyone would have been able to do same also he never sold his coins and left the project early on to avoid having too much control. Quite the opposite with Vitalik who on the other hand premined his eth, has been selling them Ever since, and continues to have significant control over ehereum.
Satoshi did the equivalent of ninja mining.
Zuckerberg owns 30% of Facebook! And he stands to gain the most from Facebook earning profits!!! It's all a scam!!
See how ridiculous it sounds?
See how ridiculous it sounds?
That's fine as long as we agree that Ethereum is not a form of currency, otherwise it becomes terribly regressive for one person to have that much stake that continues to collect even more ether in the process.
Isn't this just saying "the Ethereum proof of stake transition benefits ETH holders"?
In Ethereum, you need 32 ETH, which is around ~$120k. That's prohibitive a normal person. After EIP1559 goes into effect, it's not out of the question that the price could rise 7x given the power laws at play. What happens when the cost to stake a node is $1M+? What happens 50 years from only the very richest .00001% can afford to run a node?
I'm concerned EIP1559 and PoS is a very short sighted implementation that will move towards centralization of the network.
There should be a floating minimum, or have no minimum at all to run a node. Not sure the exact tech solution, or I'd be submitting a pull request :).
I'm concerned EIP1559 and PoS is a very short sighted implementation that will move towards centralization of the network.
There should be a floating minimum, or have no minimum at all to run a node. Not sure the exact tech solution, or I'd be submitting a pull request :).
You can do pooled staking with smaller amounts, with little bit lost security:
https://capitalgram.com/posts/ethereum-2.0-staking-and-stake...
https://capitalgram.com/posts/ethereum-2.0-staking-and-stake...
32 ETH was set when it cost much less.
That can always be changed if the number or validators is not sufficient to decentralize the network.
That can always be changed if the number or validators is not sufficient to decentralize the network.
Genuine question: Who decides that?
When there is a prominent founder, everyone usually tends to defer to them (in this case, Vitalik, see what happened to ETC vs ETH).
That's was my point. The ability to stake shouldn't be based on an arbitrary and temporary exchange rate. What happens if USD/ETH is $0.0001? $1B? It should still work regardless of the exchange rate.
Current implementation depends on the exchange rate and creates an incentive structure towards centralization.
Current implementation depends on the exchange rate and creates an incentive structure towards centralization.
> Current implementation depends on the exchange rate
No, it does not. You are staking ETH, not USD. Essentially, you are staking a percentage of all ETH, percentage capped from below.
No, it does not. You are staking ETH, not USD. Essentially, you are staking a percentage of all ETH, percentage capped from below.
The decision to use 32 ETH was a trade off based on the exchange rate at the time, 32ETH being ~$5k, which the devs thought was enough so that it wouldn’t be cost prohibitive to get involved and hurt enough to stay honest. When the exchange rate changes dramatically, like it did and will in the future, it changes the incentive structure in staking. So, yes, the current implementation’s incentive structures do depend on the exchange rate.
32 ETH wasn't chosen randomly. There is a cost to having too many validators on the network. 32 ETH was chosen to make sure that didn't happen while still being low enough to allow for a lot of validators.
Yeah yeah, everything can always be changed in the future.
Ethereum regularly undergoes hard forks to change its parameters. There's no schelling point over protocol specifics with Ethereum like there is with, say, Bitcoin.
There are discussions to lower the ETH collateral requirements. Right now there is no validator cap so that will lead to issues. The goal is to first set a max validator cap with a rotating validator pool. However, there's still higher priority items to complete first like the merge, unlocking withdrawals, and likely also sharding. Given that, it's liking like this change would come 2 years from now unless priorities change (and assuming there's consensus for such a change).
We’ll solve that problem in 50 years, don’t you think? BTC and ETH are just pioneers in the future of financial systems.
> Our current financial system doesn't give people the ability to independently verify anything at all; it's even worse than the most centralized chains in that regard.
I'm sorry, that sounds incorrect, many people have been "verifying" things independently and sounding the alarm, but nothing happens.
I'm sorry, that sounds incorrect, many people have been "verifying" things independently and sounding the alarm, but nothing happens.
Lol. Can you personally verify what your bank is doing? No you can't. If it was on the blockchain, you could.
He's talking about the Financial System, not the Bank (akin to a node)
With PoS one can just buy _governance_, that's all. All you need to have more influence on (PoS-based) Etherium is a huge amount of money. More power to money-bags!
So “fresh” idea :)
So “fresh” idea :)
But as soon as someone bought 51% of ETH and abused their influence, their investment would go to zero. I'm not sure I get the scenario where it's worthwhile for someone to invest the amount it would take to get that significant of an ownership percentage and then do something that would just cause everyone else to leave and it to be worthless. Maybe I'm missing something here.
Why would they publish that fact? You can pretend to be as many independent validators as you like.
Apparently, 51% attacks aren't enough to put off investors, as ETC had 3 of them in one month last year.
It's more like, people who hold a large enough stake can collude on what rules the blockchain implements. Lets say an Ethereum 3.0 is proposed that benefits the blockchain at the slight expense of stakeholders, you think they'll approve that proposal?
To participate in the PoS “validation” network, you need a minimal amount of tokens (coins). It raises the bar for many people.
Can't you delegate your ETH with other people you trust? Isn't that an arbitrary decision that seems likely to change (ETH is famous for making sure that people can run a full node on an older and underpowered laptop)?
Not sure how it changes the question I had anyway. The point I was responding to suggested that people might buy a bunch of ETH to influence the network. My question was about how that could be economically viable because it would take a very large investment to get any real influence would cost more than what they could get out of it (the value of the ETH they bought to influence the network would go to zero).
Not sure how it changes the question I had anyway. The point I was responding to suggested that people might buy a bunch of ETH to influence the network. My question was about how that could be economically viable because it would take a very large investment to get any real influence would cost more than what they could get out of it (the value of the ETH they bought to influence the network would go to zero).
Why buy the ETH, when stealing it out of buggy defi contracts is so much cheaper?
Why don't we setup a panel of PhDs who will vet all new contracts? Sounds fresh.
Or, maybe we can step back from this whole discussion and consider that maybe, just maybe, tying block-production to coin-ownership in a blockchain with undecidable smart contracts and a less-than-stellar security record is an exercise in tempting fate.
It's not possible to abuse the power in this case. You either use it or not. Either for your profit or not. Vitalik made his choice, many other holders will do approximately the same.
I see your point, but you could perhaps do what they are doing to fiat currencies (and to our countries), exploit them slowly.
It shouldn't be much of a surprise to learn that Vitalik is part of the Ethereum Foundation which controls the trademark to Ethereum as well as all of the popular social media channels (r/ethereum, @ethereum twitter account, ethereum.org domain). Ethereum is the illusion of decentralization.
It shouldn't be much of a surprise to learn that the r/bitcoin sub, bitcointalk.org, and several other bitcoin communities are owned by one and the same person that have a history of censoring dissenting opinions. Just read up on the r/bitcoin history.
Bitcoin is the illusion of decentralization.
Bitcoin is the illusion of decentralization.
> It shouldn't be much of a surprise to learn that the r/bitcoin sub, bitcointalk.org, and several other bitcoin communities are owned by one and the same person that have a history of censoring dissenting opinions. Just read up on the r/bitcoin history.
Cryptocurrency discussions are notoriously filled with astroturfing. It’s a lot like what would happen if present-day nation states quite literally lived and died based on the market price of 24/7 globally traded bearer shares. The saying “well kept gardens die by pacifism” is resoundingly true here, to put it mildly.
Historically, the opponents to the now infamous “Bitcoin as digital gold” narrative were pushing things like gigablocks, nodes in datacenters, “Bitcoin as PayPal 2.0”, let’s replace all the core developers, etc based on populist appeals. There was no way to distinguish between those populist appeals and attempts to foil Bitcoin socially by all manner of biased attackers (and just plain ignorant people).
I think it’s rather telling that after these people forked to Bcash, they subsequently capped the block size of Bcash to 32MB and are now ironically scaling Bcash via sidechains — e.g. SmartBCH — against the backdrop of historically claiming BTC would never increase in price past $300 USD without a block size increase. To say their entire worldview has been invalidated would be an understatement.
Cryptocurrency discussions are notoriously filled with astroturfing. It’s a lot like what would happen if present-day nation states quite literally lived and died based on the market price of 24/7 globally traded bearer shares. The saying “well kept gardens die by pacifism” is resoundingly true here, to put it mildly.
Historically, the opponents to the now infamous “Bitcoin as digital gold” narrative were pushing things like gigablocks, nodes in datacenters, “Bitcoin as PayPal 2.0”, let’s replace all the core developers, etc based on populist appeals. There was no way to distinguish between those populist appeals and attempts to foil Bitcoin socially by all manner of biased attackers (and just plain ignorant people).
I think it’s rather telling that after these people forked to Bcash, they subsequently capped the block size of Bcash to 32MB and are now ironically scaling Bcash via sidechains — e.g. SmartBCH — against the backdrop of historically claiming BTC would never increase in price past $300 USD without a block size increase. To say their entire worldview has been invalidated would be an understatement.
Well, I’m not naive enough to expect something else. People are making money and protect their businesses. It is ok for me.
For some people (not for me) living in poor countries, mining was a chance to improve their lives. Now it's sold for the opportunity to give more money to those who have large amounts of money.
All these talks about the climate are so ridiculous in this context - nobody even tried to calculate how much of that energy was produced by the wind or sun.
For some people (not for me) living in poor countries, mining was a chance to improve their lives. Now it's sold for the opportunity to give more money to those who have large amounts of money.
All these talks about the climate are so ridiculous in this context - nobody even tried to calculate how much of that energy was produced by the wind or sun.
> nobody even tried to calculate how much of that energy was produced by the wind or sun.
I've definitely seen some analysis that does? But I don't see how it matters. There's an opportunity cost there, where using solar or wind power for something like bitcoin could be better spend on something intrinsically (rather than abstractly) productive, like heating/cooling homes or whatever.
And like, if suddenly it was decided magically somehow that "all bitcoin must be produced with renewable energy" I don't think the world would be made better by the sudden rise in price of solar panels by 10x like has happened with video cards. There's an inherent price inflationary effect involved in anything that's capable of producing 'free money'.
I've definitely seen some analysis that does? But I don't see how it matters. There's an opportunity cost there, where using solar or wind power for something like bitcoin could be better spend on something intrinsically (rather than abstractly) productive, like heating/cooling homes or whatever.
And like, if suddenly it was decided magically somehow that "all bitcoin must be produced with renewable energy" I don't think the world would be made better by the sudden rise in price of solar panels by 10x like has happened with video cards. There's an inherent price inflationary effect involved in anything that's capable of producing 'free money'.
lol, people can decide what is better for them. Every person, without mine or your opinion.
Again, until the price of things needed to build solar panels or wind farms become outrageously expensive because they're generating 10x as much value. Then yes, actually, your choices affect me and everyone else on this planet.
I am not convinced that PoW is immune to those pressures or even resistant to it. The people with capital control the mining.
At least the environmental problems are reduced with PoS
At least the environmental problems are reduced with PoS
There's a whole book written about the history of this: https://www.goodreads.com/book/show/57429394-the-blocksize-w...
"Roughly 90% of the hash power once threatened to change the rules of #Bitcoin believing the users didn’t matter in the decision. The users spun up 10s of thousands of full nodes & told them to go f*ck themselves." [1]
[1] https://twitter.com/TheCryptoconomy/status/13940065488763084...
"Roughly 90% of the hash power once threatened to change the rules of #Bitcoin believing the users didn’t matter in the decision. The users spun up 10s of thousands of full nodes & told them to go f*ck themselves." [1]
[1] https://twitter.com/TheCryptoconomy/status/13940065488763084...
Why wouldn't a similar "takeover" be possible in a PoS system? You really haven't addressed the parent's point.
[responding to the pre-edit question about PoW] I just did, you don't need any capital to run a node. The book documents an incident where there was majority hash-rate (miners) wanting to change the rules against the wishes of the users.
more info: https://www.youtube.com/watch?v=4IT4s-6T__k
more info: https://www.youtube.com/watch?v=4IT4s-6T__k
But at scale you need lots of nodes/computational power and therefore lots of money. It doesn’t really make a difference whether you buy graphics cards in a pow world or ethereum in a pos world, you need lots of capital to be influential.
Now if we could make it Proof of Human, one vote, one person, non-transferable, that would be true distributed consensus. Even then you would get people buying votes with advertising as we see today in “normal” elections.
Now if we could make it Proof of Human, one vote, one person, non-transferable, that would be true distributed consensus. Even then you would get people buying votes with advertising as we see today in “normal” elections.
> But at scale you need lots of nodes/computational power and therefore lots of money. It doesn’t really make a difference whether you buy graphics cards in a pow world or ethereum in a pos world, you need lots of capital to be influential.
You're missing the energy part of the equation (opex), that is continuously required.
You're missing the energy part of the equation (opex), that is continuously required.
> you don't need any capital to run a node
Please point me in the direction where I can find some of these free ASIC miners.....
Please point me in the direction where I can find some of these free ASIC miners.....
full node != miner
Run your own full node,
easiest option: getumbrel.com
Run your own full node,
easiest option: getumbrel.com
You can do much worse things in a PoS system since power in the system is tied to the asset (ETH). Ethereum DeFi toys are hacked on a daily basis and millions upon millions of dollars worth of ETH is stolen.
It's exactly why the DAO hacker was censored -- they controlled more ETH than any single account in the system.
It's exactly why the DAO hacker was censored -- they controlled more ETH than any single account in the system.
This is only relevant if people aren’t holding their coins on exchanges. Most users are and that concentration will increase as transaction fees are designed to do over the next decade.
I'm here to help that transition, It's already happening, many folks I know are transitioning to a hardware wallet. I've personally helped people onboard on to lightning and running their own node.
The whole process of running your own node has improved so much nowadays: getumbrel.com comes to mind.
The whole process of running your own node has improved so much nowadays: getumbrel.com comes to mind.
[deleted]
You're smart, I like your comments.
The difference is that PoW is censorship resistant. Anybody can be a miner and existing miners cannot censor new miners. Performing new work is external to the network state. In PoS, existing stakers can prevent new stakers from registering. Very important distinction.
Its not really though, if the majority of PoW miners want to omit a certain miners blocks, they can. The protocol dictates that the chain created by the majority of mining power is the canonical one.
In the event that a censored party can create a heavier chain (has >50% of the mining power) then the argument that its more censorship resistant holds, but on the PoS side, you would be betting that not a single participant in the main chain included their new stake registration in their blocks. This is different than the PoW model as non-malicious nodes in PoW can still be part of the main chain. It's definitely not that cut and dry
In the event that a censored party can create a heavier chain (has >50% of the mining power) then the argument that its more censorship resistant holds, but on the PoS side, you would be betting that not a single participant in the main chain included their new stake registration in their blocks. This is different than the PoW model as non-malicious nodes in PoW can still be part of the main chain. It's definitely not that cut and dry
There are a few distinctions:
1. In PoS you actually never know who mined a given block with certainty. You can mine anonymously making censorship pretty difficult. This is not the case in PoS.
2. In PoW miners risk losing money by not building off the block found by a miner they're trying to censor. There is a cost to losing. This isn't the case in PoS (for the most part), as long as they don't double stake.
3. Additionally, the key distinguisher is that miners and custodians (almost all US based and controlled by VC funds) are two very distinct groups in Bitcoin. In a PoS currency they are the same group. That results in a power consolidation that effectively makes a PoS currency completely controlled by a few silicon valley insiders and eventually the US government.
I think you made a typo in your point #1, as you said something is the case of PoS, and then contrasted it with PoS, saying “This is not the case in PoS”. I suspect the first PoS was meant to say PoW.
Correcting that is the main point of this comment, the rest is just a side note.
I don’t really understand your point #2, but this very well may be because I don’t understand the proposed protocol.
You say “as long as they don’t double stake”, but if a given block is expected to probably be in the consensus chain, then either they don’t endorse it or whatever, not putting their stake behind it, and therefore, I would think whatever they do put their stake behind, if the block-to-be-censored is included in the long-run consensus, then what they backed isn’t, and so they get no reward, and so they lost out on potential reward, or, if they try to support multiple things, they lose (some fraction of) their stake.
Uh, unless they can be rewarded for supporting a block that is parallel to the block-to-censor even though the block-to-censor gets in? But that doesn’t seem right. I suppose there are uncle blocks maybe (idk if that is part of Ethereum’s planned PoS system or just its current system), but those have a substantially lower reward, so deliberately producing probably-uncles would still involve giving up rewards on average.
Again I could easily be missing something here.
Correcting that is the main point of this comment, the rest is just a side note.
I don’t really understand your point #2, but this very well may be because I don’t understand the proposed protocol.
You say “as long as they don’t double stake”, but if a given block is expected to probably be in the consensus chain, then either they don’t endorse it or whatever, not putting their stake behind it, and therefore, I would think whatever they do put their stake behind, if the block-to-be-censored is included in the long-run consensus, then what they backed isn’t, and so they get no reward, and so they lost out on potential reward, or, if they try to support multiple things, they lose (some fraction of) their stake.
Uh, unless they can be rewarded for supporting a block that is parallel to the block-to-censor even though the block-to-censor gets in? But that doesn’t seem right. I suppose there are uncle blocks maybe (idk if that is part of Ethereum’s planned PoS system or just its current system), but those have a substantially lower reward, so deliberately producing probably-uncles would still involve giving up rewards on average.
Again I could easily be missing something here.
> Its not really though, if the majority of PoW miners want to omit a certain miners blocks, they can.
Censored transactions can hire/pay miners who won't censor more transaction fees, to encourage them to include the transactions in a block. In other words, since transactors pay miners, transactors are customers of miners.
There is an open market competition– any miner censoring transactions will lose higher fees from people who send censored transactions.
Censored transactions can hire/pay miners who won't censor more transaction fees, to encourage them to include the transactions in a block. In other words, since transactors pay miners, transactors are customers of miners.
There is an open market competition– any miner censoring transactions will lose higher fees from people who send censored transactions.
The network majority can enforce any rule, doesn't matter if it's PoW or PoS.
Wrong. NODEs (individual network participants) enforce the rules, not miners.
Fantasy. Nothing forces miners to accept transactions sent by nodes attempting to enforce some rule.
Its the other way round -- nothing forces nodes to accept bad blocks from miners. An honest node would simply ignore the bad data. The exchanges run nodes, so I would rather be generating or receiving transactions on a chain (or fork) that its users are engaging with. Nodes accept blocks from miners, miners don't accept blocks from nodes.
Aren’t both things true? Miners can’t force nodes to accept blocks as being valid, nodes can’t force miners to include transactions in their blocks.
These statements are not in conflict.
These statements are not in conflict.
The difference being that anyone can mine, so even if 99% of miners are censoring a transaction, it will still likely be confirmed in a block.
Nodes still work on consensus, and given that they have no incentivization to exist, they have been dropping in number over years.
Isn’t there an incentive to run a node for privacy? With your own node you are not leaking your xpub and you don’t leak your transactions by staring at them on a block explorer
Wouldn't your own node unless properly hidden be higher chance of leaking your transactions? As I would expect them to come from your own node... Ofc, tracking the ones made from other services sure it is safer.
Where do those honest blocks come from, if not from honest miners? Where do honest miners come from?
[deleted]
>Fantasy. Nothing forces miners to accept transactions sent by nodes attempting to enforce some rule.
I deleted a previous reply to you because I think I may have misunderstood what you wrote. In any case, are you saying the majority of miners have the ultimate control of the protocol rules of the cryptocurrency?
I deleted a previous reply to you because I think I may have misunderstood what you wrote. In any case, are you saying the majority of miners have the ultimate control of the protocol rules of the cryptocurrency?
Not in principle, but I do believe this to be the case for Bitcoin specifically. Network majority is distinct from minor majority, but obviously miner (or stakeholder) majority is an extremely important part of it.
>Not in principle, but I do believe this to be the case for Bitcoin specifically. Network majority is distinct from minor majority, but obviously miner (or stakeholder) majority is an extremely important part of it.
In 2017, the majority of miner hashpower wanted to change the Bitcoin protocol to increase 1MB blocksize to 2MB but the SegWit2x failed to be adopted. What's your interpretation of that event?
In 2017, the majority of miner hashpower wanted to change the Bitcoin protocol to increase 1MB blocksize to 2MB but the SegWit2x failed to be adopted. What's your interpretation of that event?
They signaled support for it, but when push came to shove, they bailed.
I'm not saying 51% of miners decide what the rules are. Suppose you had a Bitcoin fork that had 80% of the hashrate. How long would that situation need to persist until the major network participants decide to call that fork "Bitcoin"?
I'm not saying 51% of miners decide what the rules are. Suppose you had a Bitcoin fork that had 80% of the hashrate. How long would that situation need to persist until the major network participants decide to call that fork "Bitcoin"?
That's the same with PoW though, isn't it?
Existing PoW miners can fork away from any new miners that won the last block.
Existing PoW miners can fork away from any new miners that won the last block.
Thank you for bringing this up.
There's a couple of misunderstandings here.
Mining is expensive and low margin. Generally, the people who own the most Bitcoins are not the same as the people with the most mining rigs, the two parties tend to be completely divorced, and the miners tend to be strongly incentivized around not rocking the boat (for better or worse).
The other misunderstanding is that mining doesn't shape the protocol. The users shape the protocol, and can run any validation software they want. No user has to accept a block by a miner, and every block made by a miner has to conform to the protocol's rules.
Mining is expensive and low margin. Generally, the people who own the most Bitcoins are not the same as the people with the most mining rigs, the two parties tend to be completely divorced, and the miners tend to be strongly incentivized around not rocking the boat (for better or worse).
The other misunderstanding is that mining doesn't shape the protocol. The users shape the protocol, and can run any validation software they want. No user has to accept a block by a miner, and every block made by a miner has to conform to the protocol's rules.
POW is permissionless, in that you don't need anyone's permission to setup a mining rig and contribute significant work.
POS isn't permissionless -- you literally have to buy a stake from existing holders in order to participate.
POS isn't permissionless -- you literally have to buy a stake from existing holders in order to participate.
The money to build a mining rig and consume the electricity needed to run it is not even remotely permissionless. To add insult to injury, most miners ignore the externalities of that electricity use.
> The money to build a mining rig and consume the electricity needed to run it is not even remotely permissionless.
Yes it is. You can manufacture your own mining rig, with no-one else's permission, without ever needing to so much as communicate with anyone who currently holds any bitcoin.
> To add insult to injury, most miners ignore the externalities of that electricity use.
Most cryptocurrency developers ignore the externalities of all the crime they're enabling, so it's not like the miners are any worse.
Yes it is. You can manufacture your own mining rig, with no-one else's permission, without ever needing to so much as communicate with anyone who currently holds any bitcoin.
> To add insult to injury, most miners ignore the externalities of that electricity use.
Most cryptocurrency developers ignore the externalities of all the crime they're enabling, so it's not like the miners are any worse.
It costs a couple hundred bucks to setup the hardware to run a Bitcoin node. As of today's exchange rate, you need ~$130k to stake ETH.
It also costs a couple hundred bucks to run an Ethereum node. You are confusing running a validator and running a node, those are two independent things, just like mining and running a node.
Wait, to run a node (like, just keeping track of the chain), or to mine in a way that isn’t entirely ineffectual? Because the former doesn’t seem like the proper analogy to staking.
You can mine with a Raspberry Pi. It won't be profitable. But, you'll be contributing to the security of the network.
What is the impact of a miner on the security of the network, conditioned on the event that it never successfully mines a block? I would think it would be 0.
The probability that a raspi ever mines a block (like, if it were to start now, not if it was going since the network first started) is negligible.
Therefore, I consider the probability that a given raspi would contribute to the security of the network, or, I suppose equivalently, the degree to which it contributes, to be negligible.
The probability that a raspi ever mines a block (like, if it were to start now, not if it was going since the network first started) is negligible.
Therefore, I consider the probability that a given raspi would contribute to the security of the network, or, I suppose equivalently, the degree to which it contributes, to be negligible.
The way I understand it, nodes help validate transactions in real time. They keep everyone else honest. Otherwise, whoever mined the block could inject whatever they wanted. Everyone on the network is validing transactions.
Sure, that's running a node. That's not mining. That's not analogous to staking. The analogy to staking would be mining.
The analogy to running a bitcoin node would be running some variety of ethereum node, not staking.
Controlling the mining doesn't allow you to control much about how transactions work.
The network majority decides everything, including how transactions work, how many coins there are, what the block size is...
The prospect that there's only ever going to be 21 million Bitcoin is ensured by nothing except majority opinion. It's not inconceivable that this will be relaxed in the future and Bitcoin will have a "Bitcoin Classic" fork where old rules are enforced. This could happen if, for instance, transaction fees don't make up for miner majority rewards.
The prospect that there's only ever going to be 21 million Bitcoin is ensured by nothing except majority opinion. It's not inconceivable that this will be relaxed in the future and Bitcoin will have a "Bitcoin Classic" fork where old rules are enforced. This could happen if, for instance, transaction fees don't make up for miner majority rewards.
> The network majority decides everything, including how transactions work, how many coins there are, what the block size is...
The informal consensus of network full (non-mining) nodes enforce that. Full nodes are economic actors, such as people who sell goods and services, who fully verify the chain. They simply refuse accept inflated Bitcoin.
A Bitcoin full (non-mining) node only takes 5GB storage space and 128MB RAM to run.
The informal consensus of network full (non-mining) nodes enforce that. Full nodes are economic actors, such as people who sell goods and services, who fully verify the chain. They simply refuse accept inflated Bitcoin.
A Bitcoin full (non-mining) node only takes 5GB storage space and 128MB RAM to run.
> The informal consensus of network full (non-mining) nodes enforce that.
It does that now, but there is no guarantee that this consensus holds. Maybe it's quite likely that it holds, but nothing guarantees it.
> Full nodes are economic actors, such as people who sell goods and services, who fully verify the chain. They simply refuse accept inflated Bitcoin.
They can refuse to accept inflated Bitcoin, but somebody has to mine new blocks. If the vast majority of miners decide to do something, the remaining miners will have trouble mining new blocks and the entire system is heavily disrupted.
As you say, they are economic actors, so when faced with the decision of having a severe service disruption and giving in to miner demands, the choice may well be the latter. After all, why would they prefer to use a "original Bitcoin" that only has 1% of the hash rate? Because it has the original brand?
It's ironic that even modest monetary inflation is considered bad by so many Bitcoin proponents when that inflation is what pays for the Bitcoin network. Perhaps some day, transaction costs will make up for it, but that is not a given.
> A Bitcoin full (non-mining) node only takes 5GB storage space and 128MB RAM to run.
It's completely irrelevant how many non-mining nodes there are. The only thing that matters is who runs them (exchanges, merchants, actual users).
It does that now, but there is no guarantee that this consensus holds. Maybe it's quite likely that it holds, but nothing guarantees it.
> Full nodes are economic actors, such as people who sell goods and services, who fully verify the chain. They simply refuse accept inflated Bitcoin.
They can refuse to accept inflated Bitcoin, but somebody has to mine new blocks. If the vast majority of miners decide to do something, the remaining miners will have trouble mining new blocks and the entire system is heavily disrupted.
As you say, they are economic actors, so when faced with the decision of having a severe service disruption and giving in to miner demands, the choice may well be the latter. After all, why would they prefer to use a "original Bitcoin" that only has 1% of the hash rate? Because it has the original brand?
It's ironic that even modest monetary inflation is considered bad by so many Bitcoin proponents when that inflation is what pays for the Bitcoin network. Perhaps some day, transaction costs will make up for it, but that is not a given.
> A Bitcoin full (non-mining) node only takes 5GB storage space and 128MB RAM to run.
It's completely irrelevant how many non-mining nodes there are. The only thing that matters is who runs them (exchanges, merchants, actual users).
> As you say, they are economic actors, so when faced with the decision of having a severe service disruption and giving in to miner demands, the choice may well be the latter. After all, why would they prefer to use a "original Bitcoin" that only has 1% of the hash rate? Because it has the original brand?
Why would anyone mine Bitcoin that merchants don't accept?
Why would anyone mine Bitcoin that merchants don't accept?
Not quite -- the 21 million (or more accurately, 2.1 Quadrillion sat) is a hard line. Any coin not enforcing this rule is not bitcoin. There of course will be forks that dont, but they are not bitcoin.
> Any coin not enforcing this rule is not bitcoin.
That's your opinion.
> There of course will be forks that dont, but they are not bitcoin.
Again, that's your opinion.
That's your opinion.
> There of course will be forks that dont, but they are not bitcoin.
Again, that's your opinion.
That’s a definition you can use, sure. And, I do tend to value using words in a consistent way over time.
But definitions are choices. People are free to choose what definitions they think of as “the definition of <x>”. Some such choices are likely to cause more confusion when they interact with others, but this is not always sufficient to discourage/prevent some faction of people from choosing some definition that differs from that used by some other faction.
Under the definition you are using for bitcoin, such a thing would not be the thing that you currently would consider bitcoin. That’s fine.
This doesn’t mean that people wouldn’t use the name “bitcoin” for it.
Perhaps 2000 years from now, the word “bitcoin” will instead refer to apples instead, due to random linguistic drift. (Or, a fruit which resembles apples. Will they technically count as apples, according to our current notion of apples?)
But definitions are choices. People are free to choose what definitions they think of as “the definition of <x>”. Some such choices are likely to cause more confusion when they interact with others, but this is not always sufficient to discourage/prevent some faction of people from choosing some definition that differs from that used by some other faction.
Under the definition you are using for bitcoin, such a thing would not be the thing that you currently would consider bitcoin. That’s fine.
This doesn’t mean that people wouldn’t use the name “bitcoin” for it.
Perhaps 2000 years from now, the word “bitcoin” will instead refer to apples instead, due to random linguistic drift. (Or, a fruit which resembles apples. Will they technically count as apples, according to our current notion of apples?)
Agree. Crypto currency is small and has never had to deal with major financial fallouts like 2008 mortgage debacle. The idea that the number of bitcoins can never be changed for example due to the need to respond to national or international problems is silly. Ultimately any rules are but code decided by human factors. Therefore it's not impossible that there are several forks running several crypto versions at the same time depending on what people think represents the best response. A few guys buying coffee on BC or investing in BC is one thing. Running a nation on it is a much more dynamic thing. It's for some of these reasons the US Treasury controls money supply. There are also connections between national indebtedness (treasury bonds) and money supply suggesting that enforcing rules setup up X years ago may not weather the first storm.
If you control mining you do control how transactions work. You are running the code that handles transactions and you can change that code to handle transactions in any way you want. There is a history of this happening too but thus far with little effect on the entire network but worst case you could create a hardfork.
Miner Extractable Value (MEV) is a problem. They can choose which transactions to include in a block and how to order them.
https://www.coindesk.com/miners-front-running-service-theft
https://www.coindesk.com/miners-front-running-service-theft
That's a good point, though mining is also controlled by access to the cheapest costs (i.e. siphoning electricity off of a grid).
Proof of work is currently controlled by 3 companies in terms of hashpower and 1 in terms of hardware - Bitmain.
So, the absolute worst case for PoS is already pretty much the case for PoW.
So, the absolute worst case for PoS is already pretty much the case for PoW.
I don't think your example proves proof of work isn't vulnerable to the same effect. At best it proves it's not always vulnerable to that - but the same could technically happen with proof of stake.
Like it or not the Pareto principle or 80/20 rule may well be the most powerful law of the universe. It applies to everything from physical systems like stars and galaxies to social systems and individual human achievement.
I don't see why crytocurrency should be any different. Proof of work through cost of capital investment exhibits the exact same concentration of wealth and power, but at least PoS doesn't destroy the environment as a side effect.
I'm skeptical about why we need the decentralized aspect of cryto when it ends up centralizing anyway. Seems like a very inefficient way of doing things. Maybe we just want an immutable public ledger - but I could be wrong on that. It hasn't lived up to the hype yet.
Like it or not the Pareto principle or 80/20 rule may well be the most powerful law of the universe. It applies to everything from physical systems like stars and galaxies to social systems and individual human achievement.
I don't see why crytocurrency should be any different. Proof of work through cost of capital investment exhibits the exact same concentration of wealth and power, but at least PoS doesn't destroy the environment as a side effect.
I'm skeptical about why we need the decentralized aspect of cryto when it ends up centralizing anyway. Seems like a very inefficient way of doing things. Maybe we just want an immutable public ledger - but I could be wrong on that. It hasn't lived up to the hype yet.
There is a very big difference. PoS collapses governance into a single group: custodians. With PoW governance is a push and pull between miners and custodians. Additionally, PoW miners need to constantly sell Bitcoin to cover operating costs, whereas stakers in a PoS system have a small fixed cost and large stakers will always stay large. Miners on the other hand need to constantly invest and expand to stay competitive.
POW just gives the power to whoever can purchase the most computing power. It also gives control of the network to those directly benefiting from high fees.
At least POS gives the power to those that actually have an interest and stake in the currency itself.
At least POS gives the power to those that actually have an interest and stake in the currency itself.
PoS will be controlled by US-based custodians, which certainly have a tremendous incentive to siphon as much value from the currency as possible.
PoW has a much more diversified set of actors with competing interests, which makes it much more difficult to change the rules. This is a feature not a bug.
PoW has a much more diversified set of actors with competing interests, which makes it much more difficult to change the rules. This is a feature not a bug.
Yeah, I'm a big ETH holder, but this is honestly what worries me about the POS merge. I think the fact that Bitcoin miners have to sell to fund their operations is a nice feature and keeps them in a separate class from the custodians. Economic incentives that merge validators with custodians could create a feedback loop that concentrates too much power in the wrong places. That being said, ETH has a thriving DeFi ecosystem and a ton of smart people working on it, so I'm not betting against it.
> PoS will be controlled by US-based custodians...
You might as well claim that the Chinese Communist Party controls Bitcoin. Not entirely wrong, but misleading.
You might as well claim that the Chinese Communist Party controls Bitcoin. Not entirely wrong, but misleading.
No it's very different. Bitcoin consensus is achieved through a combination of mining actors and economic actors. PoS collapses this into a single group: custodians.
Bitcoin consensus is achieved through miner majority, end of story. Any other narrative is pure make-belief.
Nodes enforce the ruleset that miners must abide by, and can invalidate new blocks that miners generate. You can see examples of this in history e.g. bitcoin.com mining a block with a greater block size than consensus allowed, which caused the block to be invalidated and the cost of energy wasted.
What are nodes going to do if nobody wants to mine their preferred blocks? Somebody has to mine them, and they'll need a lot of hashrate to do so.
Yes, in pow systems, miners can only ddos the network and they can do nothing more.
I'm not just talking about denial of service or 51% attacks, I'm talking about refusal of service.
You can't just push some change that 99% of miners will refuse to mine blocks for. The remaining 1% would not be able to mine blocks for a long time with their puny hashrate. You'd have to reset difficulty and the system would be left in a highly vulnerable state. It would be a huge disruption. For that reason, nodes wouldn't attempt to enforce a change without significant miner support.
You can have reasonably clean fork only if enough miners agree on something, but that implies that the interest of miners is given a lot of consideration.
You can't just push some change that 99% of miners will refuse to mine blocks for. The remaining 1% would not be able to mine blocks for a long time with their puny hashrate. You'd have to reset difficulty and the system would be left in a highly vulnerable state. It would be a huge disruption. For that reason, nodes wouldn't attempt to enforce a change without significant miner support.
You can have reasonably clean fork only if enough miners agree on something, but that implies that the interest of miners is given a lot of consideration.
I think the refusal of service is less problematic than the attack where they keep mining empty blocks without including any transactions. The refusal of service will only extend the block time which will be resolved in the next difficulty re-adjustment. It also requires significant percentage of the miners to agree to co-operate.
With the empty blocks attack, they prevent difficulty re-adjustment and also get rewarded with new btc unlike the refusal of service where they'll just be wasting their electricity without any rewards and the small miners will be able to produce blocks albeit in a much longer time than ~10 minutes.
With the empty blocks attack, they prevent difficulty re-adjustment and also get rewarded with new btc unlike the refusal of service where they'll just be wasting their electricity without any rewards and the small miners will be able to produce blocks albeit in a much longer time than ~10 minutes.
> The refusal of service will only extend the block time which will be resolved in the next difficulty re-adjustment. It also requires significant percentage of the miners to agree to co-operate.
That's the premise: If you want to do something that strongly goes against the interest of all miners, that cooperation will form naturally. If 99% of miners agree on something, the block time would be several hours. Difficulty adjustment would have to be patched in.
In the meantime, the miners on the "rogue chain" are mining blocks and clearing transactions. Who says that this chain is not Bitcoin? Why should all the stakeholders consider a broken chain with 1% of the hash power as the "one true Bitcoin", as opposed to a failed fork?
That's the premise: If you want to do something that strongly goes against the interest of all miners, that cooperation will form naturally. If 99% of miners agree on something, the block time would be several hours. Difficulty adjustment would have to be patched in.
In the meantime, the miners on the "rogue chain" are mining blocks and clearing transactions. Who says that this chain is not Bitcoin? Why should all the stakeholders consider a broken chain with 1% of the hash power as the "one true Bitcoin", as opposed to a failed fork?
> Nodes enforce the ruleset that miners must abide by, and can invalidate new blocks that miners generate.
In practice, this means “nodes run by centralized exchanges”. Your narrative is fraught with risk.
Basically “Bitcoin” is defined as the chain with the highest cumulative hashing power¹.
¹: which investors expect will maximize returns under the banner of “Bitcoin”
Much of Satoshi’s genius was selecting values for constants, e.g. 21M max supply, conducive to the establishment of a global currency of fixed supply and generally aligning incentives of disparate entities such that the most likely outcome would be the upholding of community expectation. But none of that is technically guaranteed, rather its continuity is assured with exceedingly high likelihood due to historical choices made.
> You can see examples of this in history e.g. bitcoin.com mining a block with a greater block size than consensus allowed, which caused the block to be invalidated and the cost of energy wasted.
IIRC they weren’t a majority miner at the time. Had they been a majority miner, and had they been able to assure the community of global Bitcoin investors of the superior soundness of their choices, all bets would be off. Ultimately the block size debate was resolved with hashing power.
In practice, this means “nodes run by centralized exchanges”. Your narrative is fraught with risk.
Basically “Bitcoin” is defined as the chain with the highest cumulative hashing power¹.
¹: which investors expect will maximize returns under the banner of “Bitcoin”
Much of Satoshi’s genius was selecting values for constants, e.g. 21M max supply, conducive to the establishment of a global currency of fixed supply and generally aligning incentives of disparate entities such that the most likely outcome would be the upholding of community expectation. But none of that is technically guaranteed, rather its continuity is assured with exceedingly high likelihood due to historical choices made.
> You can see examples of this in history e.g. bitcoin.com mining a block with a greater block size than consensus allowed, which caused the block to be invalidated and the cost of energy wasted.
IIRC they weren’t a majority miner at the time. Had they been a majority miner, and had they been able to assure the community of global Bitcoin investors of the superior soundness of their choices, all bets would be off. Ultimately the block size debate was resolved with hashing power.
Non-mining nodes cannot invalidate a block. Nobody can invalidate a block. Only mining nodes can choose to not mine on top of a block.
Those who got that stake by purchasing massive compute power.
PoS just solidifies current stakeholders so that they no longer have to worry about competition from new players.
PoS just solidifies current stakeholders so that they no longer have to worry about competition from new players.
Is that actually the case? Couldn't a new player with the money to spend become a stakeholder overnight by purchasing large amounts of ETH on the open market and staking it?
Versus taking that money and taking months to invest it into mining. Purchasing compute power is harder than purchasing ETH no matter how you slice it
Versus taking that money and taking months to invest it into mining. Purchasing compute power is harder than purchasing ETH no matter how you slice it
In theory. Which is what the current stakeholders want. That was the value offer to do this in the first place.
Either way, you end up with a currency that is far more centralized than most stable paper currencies. The number of large stakeholders in Etherum is probably measured in the thousands. PoS will just further consolidate the stakeholders over time.
Ethereum isn't even reasonably transactable anymore. A single transaction costs like $40. As an actual currency, it died the same fate that Bitcoin did.
Too few people hold too many coins, and then they make rules that only benefit increasing the price.
Either way, you end up with a currency that is far more centralized than most stable paper currencies. The number of large stakeholders in Etherum is probably measured in the thousands. PoS will just further consolidate the stakeholders over time.
Ethereum isn't even reasonably transactable anymore. A single transaction costs like $40. As an actual currency, it died the same fate that Bitcoin did.
Too few people hold too many coins, and then they make rules that only benefit increasing the price.
Proof of work is no different in this regard: more capital, more mining power, more control.
Miners interests don't always align with the network's users interests (see gas fees).
Proof of work isn't more decentralized either (a few mining pool delegators control bitcoin), eth2 proof of stake is more secure because of the pseudorandom validator selection.
It is very different: The difference is that PoW is censorship resistant. Anybody can be a miner and existing miners cannot censor new miners. Performing new work is external to the network state. In PoS, existing stakers can prevent new stakers from registering. Very important distinction.
> Anybody can be a miner
This is patently false, endgame PoW centralizes mining around 3rd world coal/cheapest possible (stolen?) electricity. The overwhelming majority of the world has been priced out of BTC mining, not that they could get ahold of an ASIC anyways.
This is patently false, endgame PoW centralizes mining around 3rd world coal/cheapest possible (stolen?) electricity. The overwhelming majority of the world has been priced out of BTC mining, not that they could get ahold of an ASIC anyways.
Easy, just buy guns, steal some ASICs, steal some coal, and mine away!!!
Anybody can be a miner the same way anybody can participate in the race for Mars.
But that doesn't mean your bottle rocket will beat SpaceX there.
But that doesn't mean your bottle rocket will beat SpaceX there.
Sure. And analogous to PoS is some kind of galactic requirement that you pay some kind of space bond in order to go to space. Mess around and your space bond is slashed. I like the bottlerocket model better.
Yeah sure, let me just buy a container full of ASICs worth hundreds of thousands of $$$ and I'll start mining: https://twitter.com/SGBarbour/status/1390504269925654532
Correct, the US Federal Reserve is a Proof of Stake system. Members earn 6% dividends for the last 100 years, and this was to entice them to join the system at all. Just pointing out that the idea of an omnipotent US government is a fairly new concept, and it must incentivize and entice people to join its payment network as opposed to other private ones.
The private networks for final settlement are becoming more interesting to market participants. And they are also aiming for distributed (sharded) proof of stake.
The private networks for final settlement are becoming more interesting to market participants. And they are also aiming for distributed (sharded) proof of stake.
> Members earn 6% dividends for the last 100 years, and this was to entice them to join the system at all.
Can you tell more about this? Specially the "and this was to entice them to join the system at all." part.
Can you tell more about this? Specially the "and this was to entice them to join the system at all." part.
The Federal Reserve Act from 1913 incentivizes banks to join the Federal Reserve payments network. Let me update this to 2020s lingo: The Federal Reserve System is a decentralized autonomous organization (DAO) that pays its stakers 6% annually. It has operated for over 100 years flawlessly. The stakers gain access to a market leading depository and credit system, and have the ability to voice opinions on some variables but the shares itself are non-voting. Like many kinds of entities such as trusts and foundations, there are no owners, only trustees.
The human interface to the system is a separate public agency called the Board of Governors, which simply tells the public what the Federal Reserve has done, and also communicates any changes to the Federal Reserve's charter (any legislative updates) to the DAO.
The human interface to the system is a separate public agency called the Board of Governors, which simply tells the public what the Federal Reserve has done, and also communicates any changes to the Federal Reserve's charter (any legislative updates) to the DAO.
The federal reserve is
Decentralized?
> The Board of Governors' seven members guide the entire Fed system.
> The Board and FOMC make the Fed's decisions based on research.
https://www.thebalance.com/the-federal-reserve-system-and-it...
Decentralized?
> The Board of Governors' seven members guide the entire Fed system.
> The Board and FOMC make the Fed's decisions based on research.
https://www.thebalance.com/the-federal-reserve-system-and-it...
Pick whatever word you prefer for whatever aspect of its multi-part nature you prefer
Some of the board members come from the member banks
Some of the board members come from the member banks
There's a big difference: the Federal Reserve System lives in the real world, where node misbehavior (i.e. officers doing bad things) is punished with jail time, with ruinous downstream consequences on their families.
Wake me up when The DAO hacker is caught and put in jail, and I'll re-consider the analogy.
Wake me up when The DAO hacker is caught and put in jail, and I'll re-consider the analogy.
Haha Ill entertain this bit: there are no criminal consequences for misbehaving as a node. Participation of a reserve system shareholder is quite limited and only partially helps assist with routing and regional statistics. Partially.
There constraints on being a bank at all are not limited to federal reserve banks.
There constraints on being a bank at all are not limited to federal reserve banks.
> Why did the Federal Reserve Act initially offer such a generous dividend to member banks? It was essentially part of a marketing campaign. “At the time the Fed was not terribly popular with the banks, and they wanted to attract members,” said Allan Meltzer, professor of political economy at Carnegie Mellon University and a historian of the Federal Reserve. “They had to give up a major source of revenue, the charge they made for check clearing. Back then, if you received a check for $10, you might get back $9.50.” The dividend was seen as a way to entice banks into joining the Federal Reserve system.
from: https://newrepublic.com/article/116913/federal-reserve-divid...
from: https://newrepublic.com/article/116913/federal-reserve-divid...
Smallish groups of consolidated power already control the future of the crypto currencies; see the migration to PoS.
Crypto has made very little(perhaps zero) progress toward any solution in decentralizing power.
Crypto has made very little(perhaps zero) progress toward any solution in decentralizing power.
At least with privacy coins censoring transactions shouldn't be possible.
Also with Monero anyone can cpu mine it, and transaction participants are obfuscated.
With ARRR, miners don't know the identity of transaction participants.
Also with Monero anyone can cpu mine it, and transaction participants are obfuscated.
With ARRR, miners don't know the identity of transaction participants.
I wish we could have proof of work but the work would be something like , doing an actual workout.
Now this is my favorite new cryptocurrency idea!
I knew there was a reason I was still slogging through these comments. Well commented sir.
That's how you end up with crypto-mining sweatshops...
>as evidenced by the 2017 blocksize debate where almost every large miner and bitcoin company wanted to change the protocol and it was fought off through grassroots efforts
Literally the opposite happened, although PoW isn't very relevant here. Grassroot enthusiasts tried to fight a cabal of developers sabotaging adoption of bitcoin - and those users failed, mostly because of massive censorship on major social places. The idea was that users would instead go to a centralized network called Liquid.
The sabotage succeeded, the Liquid part didn't, users went elsewhere. Now it's 2021 and bitcoin has lost all network effects it ever had. Did you know bitcoin used to have tokens and even dexes (although poor)? Google mastercoin and counterparty.
In the long run, it turned out well, as ethereum is a way better foundation.
It's indeed possible it wouldn't have happened with PoS, as contrary to PoW stakers are long-term oriented - miners don't really care about long-term prospects and acquiesced, dooming bitcoin in the long term, but it's possible btc stakers would be afraid of going against core developers too.
Literally the opposite happened, although PoW isn't very relevant here. Grassroot enthusiasts tried to fight a cabal of developers sabotaging adoption of bitcoin - and those users failed, mostly because of massive censorship on major social places. The idea was that users would instead go to a centralized network called Liquid.
The sabotage succeeded, the Liquid part didn't, users went elsewhere. Now it's 2021 and bitcoin has lost all network effects it ever had. Did you know bitcoin used to have tokens and even dexes (although poor)? Google mastercoin and counterparty.
In the long run, it turned out well, as ethereum is a way better foundation.
It's indeed possible it wouldn't have happened with PoS, as contrary to PoW stakers are long-term oriented - miners don't really care about long-term prospects and acquiesced, dooming bitcoin in the long term, but it's possible btc stakers would be afraid of going against core developers too.
I always felt a bit to the contrary.
In a proof of work system, you can buy your way to the grown-ups table by throwing enough money at mining gear.
In contrast, a proof-of-stake system requires someone to sell you enough of a stake to be relevant.
I suppose the question is whether it's easier to get someone to sell out their community, or find a bunch of graphics cards these days.
In a proof of work system, you can buy your way to the grown-ups table by throwing enough money at mining gear.
In contrast, a proof-of-stake system requires someone to sell you enough of a stake to be relevant.
I suppose the question is whether it's easier to get someone to sell out their community, or find a bunch of graphics cards these days.
No way dude. Our current system isn’t even close to PoS. Most obviously the federal reserve controls the monetary policy. Beyond that there is no “code is law” that we can all audit and fork if we find it inadequate. If ethereum centralized you can amend the protocol and fork the blockchain. Show me how you can do that with USD.
The main value of cryptocurrencies is a provable ledger with an open API. PoS sufficiently establishes that for all economic purposes save for those wishing to make themselves feudal lords.
Currently your money is transmitted by csv copies across thousands of companies, most of whom use a semi-manual process. Moving this type of transaction to a distributed ledger will save financial institutions billions in audit costs.
Currently your money is transmitted by csv copies across thousands of companies, most of whom use a semi-manual process. Moving this type of transaction to a distributed ledger will save financial institutions billions in audit costs.
> almost every large miner and bitcoin company wanted to change the protocol
If the miners really wanted to change the protocol, they would have done that. The exchanges would have followed, as they had declared that the longest chain would win, and that would be game over.
Instead the miners gave in to the perceived authority of the Core developers, who pinky promised to later raise the block size (which they backed away from).
If the miners really wanted to change the protocol, they would have done that. The exchanges would have followed, as they had declared that the longest chain would win, and that would be game over.
Instead the miners gave in to the perceived authority of the Core developers, who pinky promised to later raise the block size (which they backed away from).
The exchanges have no reason not to support both sides of a fork, for example the BTC/BCH split. Then the owners of the tokens ultimately decide which one is more valuable by selling their tokens on the chain they don't prefer and buying tokens on the chain they do prefer.
This. There's a bunch of waffling above about how the miners vs stakers will control stuff and so on, but in reality it's the markets which define which gets used. That's what decided the block size debate, not users spinning up nodes or miners pushing in one direction in ther other. Miners follow the market, and so will those running validators on proof of stake. Those who can influence the market have the most power here (and usually that's vocal members of the community or developers).
There is a very clear bias if one chain keeps the ticker, and therefore the price, so much that in practice exchanges exchanges can decide which chain "is the original one".
people with money can buy mining factories and make decisions anyway.
Please read up on UASF and Bitcoin. People can buy tons of mining factories, but if a very large amount of nodes start rejecting blocks and therefore the rewards, miners start to rethink their stance very fast. There is no discussion here, history proves it.
and UASF are a thing in PoS as well, if some entity/entities acquire a majority of the staked coins users can simply fork the malicious actors out. It's functionally equivalent except that it's an order of magnitude more expensive to acquire the required coins as opposed to getting the equivalent in hashpower.
UASF is just "Proof of Subreddit Moderation".
See my comment to another in the thread. Existing stakers can prevent new people from staking. Existing miners can't do this in a PoW system
> Existing miners can't do this in a PoW system
Sure they can. It's easy to only mine on top of blocks from certain sources, and if most of the network does this then those are the only blocks that matter.
Sure they can. It's easy to only mine on top of blocks from certain sources, and if most of the network does this then those are the only blocks that matter.
You can mine anonymously, you can't stake anonymously.
But my comment is about whitelisting, not blacklisting. The ability to be anonymous won't stop whitelisting.
Sure but the difference with mining is that having a majority of hashrate doesn't allow you to maintain that majority in perpetuity. You have constant operating expenses that require you to sell your Bitcoin, along with constantly growing competition. Just look at the rise and fall of large Bitcoin miners. With PoS if you are the biggest on day 1 you will probably be the biggest on day 1,000.
It might mathematically keep you in charge forever, but if you can stop almost anyone from being able to profit then it's very unlikely people will invest enough to override you.
And the motivation not to do it is the same, people will get mad and stop using the grossly manipulated coin.
And the motivation not to do it is the same, people will get mad and stop using the grossly manipulated coin.
New people can still vote for their governments to affect those systems.
The distinction feels irrelevant
The distinction feels irrelevant
It's very relevant. Mining is very easy to geographically diversify. PoS coins will almost all be controlled by US based custodians subject to US regulations. PoS coins will be controlled by the US financial industry at the end of the day
This is completely false, late/end game PoW centralizes mining around the cheapest electricity. It is impossible to mine profitably in the overwhelming majority of the world now.
Your government controls which coins you are able to use.
It doesn't matter if the coin becomes run by another geographic area if it's illegal for you to trade in them
It doesn't matter if the coin becomes run by another geographic area if it's illegal for you to trade in them
>See my comment to another in the thread. Existing stakers can prevent new people from staking
There is little to no evidence of this. Completely unsupported conspiracy theory.
There is little to no evidence of this. Completely unsupported conspiracy theory.
Why do you believe a global PoS currency will be controlled by US actors? The US has a 10--20% share of global GDP.
Regardless, history has proven that the most legitimate branch of a blockchain wins, irrespective of security model. It will not be the actor with the most hash power or stake. For reference, see the Justin Sun/STEEM drama.
Vitalik Buterin has an interesting blog post on legitimacy: https://vitalik.ca/general/2021/03/23/legitimacy.html.
Regardless, history has proven that the most legitimate branch of a blockchain wins, irrespective of security model. It will not be the actor with the most hash power or stake. For reference, see the Justin Sun/STEEM drama.
Vitalik Buterin has an interesting blog post on legitimacy: https://vitalik.ca/general/2021/03/23/legitimacy.html.
Because they're all largely funded by U.S. based VC funds.
We have a bad experience with this PoS principle in France. It ended in a revolution.
The assumption that people with the most stakes will act in the interest of the community has been proven flawed in many occasions. They will act in their own interest first whatever it wight be. The weak logical link is that their own interest always coincide with the interest of the community.
If someone could explain me how this assumption will always be true, I would be very happy.
The assumption that people with the most stakes will act in the interest of the community has been proven flawed in many occasions. They will act in their own interest first whatever it wight be. The weak logical link is that their own interest always coincide with the interest of the community.
If someone could explain me how this assumption will always be true, I would be very happy.
Proof of work consumes a real world resource. Proof of stake does not, therefore proof of work exchanges REAL value for virtual value. It literally takes actual value in the world and deletes it. What’s the difference with the US financial institutions buying up all the big mining rigs and then buying up all the stakable tokens ?
Energy is not being exchanged for "virtual value", but rather "shared belief".
Wars have been fought to force shared beliefs. It's fairly common in history for "real world resources" to be permanently burned in order to create a shared belief system in order to facilitate trade. For example, the Roman Empire or any other empire.
I'd rather use electrons to create shared belief than bullets and bombs.
Wars have been fought to force shared beliefs. It's fairly common in history for "real world resources" to be permanently burned in order to create a shared belief system in order to facilitate trade. For example, the Roman Empire or any other empire.
I'd rather use electrons to create shared belief than bullets and bombs.
Virtual value/shared belief are the same thing. The fact remains we are destroying something of utilitarian value to create something that has no utility past being tradable and valuable because people follow trends
Shared beliefs absolutely have intrinsic value. Our ability to have this discussion in English over devices connected to a common communication platform is sufficient proof of that.
Unfortunately that is not a belief shared by everyone ironically
> Proof of Stake is already how our current financial system works.
This is a naive viewpoint. Ethereum (as a currency) is an "M0" token, like cash or Fed deposits. There's a lot of handwaving about bonds and whatnot, but essentially the Fed can create new money simply by changing numbers on a balance sheet, and they can make that money into folding money and change which they can issue.
The banking system is a complex system that creates IOUs on top of that base. Some of those IOUs are even better than the cash layer -- you can't buy stock, for example, for cash, you need bank IOUs to do that.
That said, then, what is PoW and PoS used for? They're essentially distributed methods of ensuring that nobody can forge money. So the equivalent in the world of dollars is not a bunch of bankers chuckling to themselves about how they're fleecing the plebes. The equivalent in the real world is a bunch of aircraft carriers and planes and bombs and people with big guns, which gives the ability to say (credibly) that it is a crime to forge dollars no matter who you are or where you live.
This is a naive viewpoint. Ethereum (as a currency) is an "M0" token, like cash or Fed deposits. There's a lot of handwaving about bonds and whatnot, but essentially the Fed can create new money simply by changing numbers on a balance sheet, and they can make that money into folding money and change which they can issue.
The banking system is a complex system that creates IOUs on top of that base. Some of those IOUs are even better than the cash layer -- you can't buy stock, for example, for cash, you need bank IOUs to do that.
That said, then, what is PoW and PoS used for? They're essentially distributed methods of ensuring that nobody can forge money. So the equivalent in the world of dollars is not a bunch of bankers chuckling to themselves about how they're fleecing the plebes. The equivalent in the real world is a bunch of aircraft carriers and planes and bombs and people with big guns, which gives the ability to say (credibly) that it is a crime to forge dollars no matter who you are or where you live.
> The equivalent in the real world is a bunch of aircraft carriers and planes and bombs and people with big guns, which gives the ability to say (credibly) that it is a crime to forge dollars no matter who you are or where you live.
And yet people complain about cryptocurrency energy usage with a straight face!
And yet people complain about cryptocurrency energy usage with a straight face!
> The equivalent in the real world is a bunch of aircraft carriers and planes and bombs and people with big guns, which gives the ability to say (credibly) that it is a crime to forge dollars no matter who you are or where you live.
Largely funded by forging dollars.
Largely funded by forging dollars.
If you are a miner and you get a block reward for mining a block in Ethereum, you are not forging currency; this is the structurally correct way for Ethereum to be created.
Similarly only the Fed has the ability to make new dollars; although technically the US Treasury has this ability in a narrow sense. There's a lot of mummery around how the Fed goes about doing it, but that is the structurally correct way for dollars to be created. Calling it forgery or "theft by inflation" or whatever are political talking points.
Forgery is specifically when any other party in the world decides that they can mint coins or print bills.
Other parties can create dollars in other ways, like by committing fraud or by taking advantage of the fact that certain forms of IOUs are so liquid that they are considered cash equivalents. In the US this is a little locked down (although the overnight lending market is a particularly insidious form of shadow banking) but internationally the Eurodollar market is the wild west where anything goes. Anything, that is, except actually forging coins or bills.
Similarly only the Fed has the ability to make new dollars; although technically the US Treasury has this ability in a narrow sense. There's a lot of mummery around how the Fed goes about doing it, but that is the structurally correct way for dollars to be created. Calling it forgery or "theft by inflation" or whatever are political talking points.
Forgery is specifically when any other party in the world decides that they can mint coins or print bills.
Other parties can create dollars in other ways, like by committing fraud or by taking advantage of the fact that certain forms of IOUs are so liquid that they are considered cash equivalents. In the US this is a little locked down (although the overnight lending market is a particularly insidious form of shadow banking) but internationally the Eurodollar market is the wild west where anything goes. Anything, that is, except actually forging coins or bills.
No, banks make new dollars, every time they make a loan. The amount of dollars on the books vastly exceeds the amount of currency printed, and is dominated by bank deposits. The Fed controls the money supply by regulating banks.
"Certain forms of IOUs" would include money in checking accounts, which is much more money than the total of all bills in circulation, and this is part of M1.
"Certain forms of IOUs" would include money in checking accounts, which is much more money than the total of all bills in circulation, and this is part of M1.
Banks can create dollars in the sense that they can synthesize contracts to deliver dollars. These contracts are liquid enough that they are considered equivalent to cash, and in many cases superior (as I describe above).
There is absolutely nothing stopping an institution from accepting deposits of ETH, and then lending those ETH out by crediting other account holders with more ETH in their account. And it is equally possible to imagine that some vendors might prefer to receive their ETH payments as credits to their bank accounts, and thus the IOUs represented by these deposits become "ETH" in the same sense that bank deposits become "dollars".
But here we are strictly discussing the underlying specie. If account holders in a dollar bank demand their payment in specie, the bank is exposed to that risk. This risk is small but significant for modern banks because the credit market for dollars is very liquid, so they can easily sell loans for their present value to increase their cash exposure, and thus make good on the demands for specie.
The credit market for ETH is all but nonexistent except in very specific cases (basically just margin for exchanges) so an ETH bank would be extremely exposed to the risk of a run, and given the level of volatility and general deflationary trend in ETH it would be almost impossible to set a value on future ETH.
There is absolutely nothing stopping an institution from accepting deposits of ETH, and then lending those ETH out by crediting other account holders with more ETH in their account. And it is equally possible to imagine that some vendors might prefer to receive their ETH payments as credits to their bank accounts, and thus the IOUs represented by these deposits become "ETH" in the same sense that bank deposits become "dollars".
But here we are strictly discussing the underlying specie. If account holders in a dollar bank demand their payment in specie, the bank is exposed to that risk. This risk is small but significant for modern banks because the credit market for dollars is very liquid, so they can easily sell loans for their present value to increase their cash exposure, and thus make good on the demands for specie.
The credit market for ETH is all but nonexistent except in very specific cases (basically just margin for exchanges) so an ETH bank would be extremely exposed to the risk of a run, and given the level of volatility and general deflationary trend in ETH it would be almost impossible to set a value on future ETH.
> Anything, that is, except actually forging coins or bills.
Of course none of it is forgery, but the net impact is no different. As soon as the USD loses its reserve status, the US won't be able to maintain its hegemony that is funded largely via
> Fed has the ability to make new dollars; although technically the US Treasury has this ability in a narrow sense
Of course none of it is forgery, but the net impact is no different. As soon as the USD loses its reserve status, the US won't be able to maintain its hegemony that is funded largely via
> Fed has the ability to make new dollars; although technically the US Treasury has this ability in a narrow sense
[deleted]
Eh, I gotta say that no matter the system, speculators are gonna speculate and power hungry idiots will do everything they can to control a currency. That's fine, and human, and expected. Just please try not to melt all the ice caps while ya'll have at it.
Can’t the people with most money buy the most computer power?
Yes, but they then need to maintain that edge by selling their Bitcoin and buying more computer power. They have constantly growing operating expenses and there is no force that centralizes control. PoS playbook is 1) get a stake, 2) set it and forget it.
Well I guess we’ll see if you’re right...
Cryptocurrency and the philosophical goals / ideals just don't match how they...are.
It is astonishing to me that this has to be stated explicitly like this for people to see this for what it is.
"Turkeys voting for Christmas" comes to mind.
Cryptocurrency offers the opportunity to break away from the current hegemony - only for people to hand over the power back to the powerful.
Perhaps the world is in the current state - because that's what we deserve? (because we keep voting for it?)
"Turkeys voting for Christmas" comes to mind.
Cryptocurrency offers the opportunity to break away from the current hegemony - only for people to hand over the power back to the powerful.
Perhaps the world is in the current state - because that's what we deserve? (because we keep voting for it?)
Proof of Stake is the worst form of Socialism. It is Socialism governed by the wealthiest elite
Proof of Work is brute Capitalism. It Capitalism without regard for life or health.
STX is Proof of Transfer (secured by bitcoin's hash-power and the Stacks network).
Proof of Transfer is the best of both worlds. It is community and global capitalism with community and global responsibility.
When a technology is simultaneously a store of value, & a utility, the demand for it is exponential, people will seek it in both states, but for different and individual purposes. STX earns BTC for the directed purposes of any individual and as that individual desires with minimal network effect. STX drives community demand only as demanded by the community. STX drives Network benefits only as desired by the Network.
Lets imagine a series of networked micro-communities built with sun energy using solar panels that photochemically convert the atmospheric water into liquid hydrogen. This is being done today.
That hydrogen is then stored as energy in fuel cell batteries. That energy is then used in part to mine community bitcoin.
That community bitcoin is used in part to build and maintain community infrastructure and finance community healthcare.
The community will also use a small portion of the wholesale mined bitcoin to leverage the Stacks Proof of Transfer PoX miners. The STX block reward will support the maintenance and expense of bitcoin mining. The winning PoX miner's committed bitcoin is allocated randomly to the locked Stacks token holders that are all also bitcoin miners.
The locked pools secure the stacks chain and bitcoin node operators secure the bitcoin chain.
The community through Non-fungible tokenized (NFTized) hashed identity quadratically vote on finance mechanisms using the creation of decidable language smart-contracts.
Those smart-contracts execute for community tokenized provenances or (NFT's) of decentralized communication, decentralized wealth & decentralized egalitarian and merit based commerce. And the by-product is pure H2O and clean air.
Proof of Work is brute Capitalism. It Capitalism without regard for life or health.
STX is Proof of Transfer (secured by bitcoin's hash-power and the Stacks network).
Proof of Transfer is the best of both worlds. It is community and global capitalism with community and global responsibility.
When a technology is simultaneously a store of value, & a utility, the demand for it is exponential, people will seek it in both states, but for different and individual purposes. STX earns BTC for the directed purposes of any individual and as that individual desires with minimal network effect. STX drives community demand only as demanded by the community. STX drives Network benefits only as desired by the Network.
Lets imagine a series of networked micro-communities built with sun energy using solar panels that photochemically convert the atmospheric water into liquid hydrogen. This is being done today.
That hydrogen is then stored as energy in fuel cell batteries. That energy is then used in part to mine community bitcoin.
That community bitcoin is used in part to build and maintain community infrastructure and finance community healthcare.
The community will also use a small portion of the wholesale mined bitcoin to leverage the Stacks Proof of Transfer PoX miners. The STX block reward will support the maintenance and expense of bitcoin mining. The winning PoX miner's committed bitcoin is allocated randomly to the locked Stacks token holders that are all also bitcoin miners.
The locked pools secure the stacks chain and bitcoin node operators secure the bitcoin chain.
The community through Non-fungible tokenized (NFTized) hashed identity quadratically vote on finance mechanisms using the creation of decidable language smart-contracts.
Those smart-contracts execute for community tokenized provenances or (NFT's) of decentralized communication, decentralized wealth & decentralized egalitarian and merit based commerce. And the by-product is pure H2O and clean air.
For the people who criticize as to why they've taken so long in shifting to a PoS model: consensus takes time, so does developing and testing something that definitively shouldn't go wrong.
Also, there's the inherent issue with Proof-of-Stake that Proof-of-Work doesn't have: the initial distribution of the coin has to be wide enough before it could feasibly self-maintain a PoS shift without being immediately vulnerable to consensus attacks. Ethereum is definitively mature enough by now, it wasn't a few years ago.
Also, there's the inherent issue with Proof-of-Stake that Proof-of-Work doesn't have: the initial distribution of the coin has to be wide enough before it could feasibly self-maintain a PoS shift without being immediately vulnerable to consensus attacks. Ethereum is definitively mature enough by now, it wasn't a few years ago.
Consensus may take time, but when you're pouring gas onto a fire, arguing that you need to dump out most of the can before you can be sure you know what you're doing isn't a defensible position.
I don't understand what you're trying to say.
> the initial distribution of the coin has to be wide enough
I don't understand how proof of stake works to the depth I understand proof of work. But this reassures me that it's feasable that they'll accomplish the same distributed consensus.
So then, could I say that Ethereum proof of stake will allow the owners of the coins (ether) to be independent from the owners of the mining operations?
or uhmm...
is the independence between the computaional costs of the "mining" and actual minted ether?
I don't understand how proof of stake works to the depth I understand proof of work. But this reassures me that it's feasable that they'll accomplish the same distributed consensus.
So then, could I say that Ethereum proof of stake will allow the owners of the coins (ether) to be independent from the owners of the mining operations?
or uhmm...
is the independence between the computaional costs of the "mining" and actual minted ether?
Ethereum proof of work made it so the owners of the coins could be independent from the owners of the mining operations, even if in practice many miners end up keeping most of the block rewards themselves and only reinvesting what they need in new infrastructure and to maintain what they already have. Proof of stake makes it so the miners and holders are now the same (you stake the coins that you have, or you pool them up with others), however the cost to wreck the chain is much greater than it would have been 3-4 years ago.
The whole idea is that Ether is so spread out now, it'd be unfeasible for someone to snatch up enough of it for an attack, in a similar way to how an ever-increasing difficulty makes it harder for a hostile actor to coordinate enough of it to make such attack.
The whole idea is that Ether is so spread out now, it'd be unfeasible for someone to snatch up enough of it for an attack, in a similar way to how an ever-increasing difficulty makes it harder for a hostile actor to coordinate enough of it to make such attack.
Maybe it is spread out now, but won't there be centralized aggregators of eth so some point in the future a handful of POS nodes control a disproportionate amount of power? Is it so hard to imagine that coinbase or some other exchange accumulates enough eth to sway transaction validation?
Seriously, please answer if this is wrong!
Seriously, please answer if this is wrong!
I do think there will be some centralization at the exchange level. As of April 2021, Kraken had 600,000 ETH staked for ETH2 [1].
It's not in the interest of Kraken or Coinbase to disrupt one of these PoS networks, but there is some barrier to entry for staking ETH2 or other PoS coins on your own, vs staking them on an exchange. In the case of ETH2, if your staking node goes down, you get slashed and lose some ETH. If there isn't slashing (not all PoS coins have that), I don't see what guarantee of network security or uptime there is.
I'd be curious what PoS coin experts think about this part. It seems like PoS / staking can lead to centralization. PoW has energy concerns for sure, but it has so far demonstrated decentralization pretty well.
I'm legitimately curious about this. I'd love for PoS to be feasible and am trying to understand it more.
[1] https://en.cryptonomist.ch/2021/04/20/ethereum-2-0-600-thous...
It's not in the interest of Kraken or Coinbase to disrupt one of these PoS networks, but there is some barrier to entry for staking ETH2 or other PoS coins on your own, vs staking them on an exchange. In the case of ETH2, if your staking node goes down, you get slashed and lose some ETH. If there isn't slashing (not all PoS coins have that), I don't see what guarantee of network security or uptime there is.
I'd be curious what PoS coin experts think about this part. It seems like PoS / staking can lead to centralization. PoW has energy concerns for sure, but it has so far demonstrated decentralization pretty well.
I'm legitimately curious about this. I'd love for PoS to be feasible and am trying to understand it more.
[1] https://en.cryptonomist.ch/2021/04/20/ethereum-2-0-600-thous...
I definitely do think centralization is a risk of PoS over PoW.
> It's not in the interest of Kraken or Coinbase to disrupt one of these PoS networks, but there is some barrier to entry for staking ETH2 or other PoS coins on your own, vs staking them on an exchange. In the case of ETH2, if your staking node goes down, you get slashed and lose some ETH. If there isn't slashing (not all PoS coins have that), I don't see what guarantee of network security or uptime there is.
This is actually one place where ETH has tried to incentivize independent staking - the penalty for downtime is equal to the incentive for mining. In an extreme example, if you are down for 6 months of the year, and up for 6 months, the downtime costs should cancel out the earnings from the other 6 months. One caveat to this is that there are larger penalties for correlated downtime (ex: if a large portion of the network is down). This is to de-incentivize centralization of mining.
That said, as someone fairly technical that could run his own staking node, I am seriously considering using a centralized service, or at the very least using a vps. This makes me think that the the majority are going to be independently run on a slew of hosting providers and via centralized hosting providers.
There are also some interesting "decentralized" options like Rocketpool that haven't launched yet, but will allow staking via smart contracts against a pool of random nodes.
And then at the end of the day, the choice in staking providers should allow the network to at least react to centralization risks. Say a locality forces a provider to censor transactions in some way - I imagine folks will move their funds to a provider in another country, or switch to something like Rocketpool, effectively working around the issue.
> It's not in the interest of Kraken or Coinbase to disrupt one of these PoS networks, but there is some barrier to entry for staking ETH2 or other PoS coins on your own, vs staking them on an exchange. In the case of ETH2, if your staking node goes down, you get slashed and lose some ETH. If there isn't slashing (not all PoS coins have that), I don't see what guarantee of network security or uptime there is.
This is actually one place where ETH has tried to incentivize independent staking - the penalty for downtime is equal to the incentive for mining. In an extreme example, if you are down for 6 months of the year, and up for 6 months, the downtime costs should cancel out the earnings from the other 6 months. One caveat to this is that there are larger penalties for correlated downtime (ex: if a large portion of the network is down). This is to de-incentivize centralization of mining.
That said, as someone fairly technical that could run his own staking node, I am seriously considering using a centralized service, or at the very least using a vps. This makes me think that the the majority are going to be independently run on a slew of hosting providers and via centralized hosting providers.
There are also some interesting "decentralized" options like Rocketpool that haven't launched yet, but will allow staking via smart contracts against a pool of random nodes.
And then at the end of the day, the choice in staking providers should allow the network to at least react to centralization risks. Say a locality forces a provider to censor transactions in some way - I imagine folks will move their funds to a provider in another country, or switch to something like Rocketpool, effectively working around the issue.
>but there is some barrier to entry for staking ETH2 or other PoS coins on your own, vs staking them on an exchange
This is true, but those exchanges either charge fees or are going to charge them, making it more profitable to stake at home. Because offline penalties depend on correlation to how many other people are offline, it's actually safer to stake at home. Eth was accumulated primarily by devs that understood its value before everyone else. Devs are in general paid well. As a result, it's nothing special for those individuals to own thousands of eth - it was even possible to buy eth below $100 as recently as in 2020. Those 600k eth on Kraken aren't that much relatively.
Right now it's very early and many people aren't staking because there are much higher returns elsewhere, and before the merge withdrawals aren't possible, so you can't even go back if something better appears. I fully intend to stake at home once extreme yields elsewhere stop - in the long run staking is likely to have the highest yield on eth.
>PoW has energy concerns for sure, but it has so far demonstrated decentralization pretty well.
Mining is extremely centralized in China. Mining has infinite economies of scale + less efficient miners are pushed out, so the most efficient entity/location is certain to control all hashpower eventually (not necessarily China). https://www.nasdaq.com/articles/bitcoin-mining-hash-rate-dro...
This is true, but those exchanges either charge fees or are going to charge them, making it more profitable to stake at home. Because offline penalties depend on correlation to how many other people are offline, it's actually safer to stake at home. Eth was accumulated primarily by devs that understood its value before everyone else. Devs are in general paid well. As a result, it's nothing special for those individuals to own thousands of eth - it was even possible to buy eth below $100 as recently as in 2020. Those 600k eth on Kraken aren't that much relatively.
Right now it's very early and many people aren't staking because there are much higher returns elsewhere, and before the merge withdrawals aren't possible, so you can't even go back if something better appears. I fully intend to stake at home once extreme yields elsewhere stop - in the long run staking is likely to have the highest yield on eth.
>PoW has energy concerns for sure, but it has so far demonstrated decentralization pretty well.
Mining is extremely centralized in China. Mining has infinite economies of scale + less efficient miners are pushed out, so the most efficient entity/location is certain to control all hashpower eventually (not necessarily China). https://www.nasdaq.com/articles/bitcoin-mining-hash-rate-dro...
Centralization meaning those who have more gain more? I'd love to hear about any currency that doesn't have this feature/bug. Those who gain power tend to be able to acquire more by bootstrapping from prior power; it's pretty much universal. Even PoW has its own form of centralization in that those who have more can become richer and more easily gain therefore leading to maturation (centralization) of the currency.
My understanding is those who have more coins on a PoS network have more stake / power. This can matter if there are things like on-chain governance / voting rights, depending on their stake. Those with more stake would also get more staking rewards (it's like an APR % return based on the total staked), and if they stake their rewards as well, then they'd have even more total stake on the network. There also are concerns with those having a majority of the stake in a network being able to disrupt or attack the network (things like slashing based on poor behavior can prevent bad actors from wanting to do that, as they would lose some or all of what they had staked in that case). There are also different kinds of PoS though, and I'm not an expert on it.
Yes, that's a feature or bug, however you see it, that's universal in capitalism, even communism or socialism what implementations I've read about. I guess if one isn't happy with those that have power in one system, a person should switch to another system. It's just so universal that I don't think there's any other way around it other than switch systems as none are perfect, all insofar as I can see are susceptible to the power of consensus.
We've tried to mitigate it with constitutions in the political world and it helps to some extent but many would agree that there is still an exploitable hole in that those with power can use their own to gain more or mitigate risk. And any time you mitigate that feature/bug too much you run the risk of decreasing reward for work and stake, thereby delegitimizing the system itself or in the case we speak of, your currency. So pick your poison.
We've tried to mitigate it with constitutions in the political world and it helps to some extent but many would agree that there is still an exploitable hole in that those with power can use their own to gain more or mitigate risk. And any time you mitigate that feature/bug too much you run the risk of decreasing reward for work and stake, thereby delegitimizing the system itself or in the case we speak of, your currency. So pick your poison.
It is in their interests — remember when CZ asked if it was possible to rollback BTC before the hack? Imagine if you actually gave the exchanges this power. Nothing to stop them staking with customer funds. The exchanges do it now with other PoS shitcoins. PoS is the death of decentralization.
Yes, that's the problem with validation through concensus which is universal in currency. With enough power (nodes) you can delegitimize other stake holders.
I wonder if it's already on on a testnet
Here's the testnet: https://nocturne.rayonism.io/
The PoS protocol itself has been running in production since December 1, in parallel with the old network, with over $10 billion staked so far.
What remains is to change the legacy clients to use the PoS network for choosing blocks, instead of miners. That has a working multi-client testnet.
What remains is to change the legacy clients to use the PoS network for choosing blocks, instead of miners. That has a working multi-client testnet.
Here are a few of the reasons that come to mind as to why this transition has been taking us so long:
* The design of the Beacon Chain is far more optimised than our initial designs for a PoS system
* There are far more crypto-economic edge cases in a PoS system when compared to PoW
* Software development is hard and time estimates are even harder
* The use of a hybrid fork choice to balance safety and liveness trade-offs
* There is a crazy amount of value being handles on Ethereum so it is necessary to be conservative with our changes (move fast and break things is not an option)
* There are 4 concurrent implementations being developed all of which need to be inter-compatible, and production ready
* As Ethereum governance is decentralised we need a shelling point for exactly what Ethereum PoS looks like, this takes time
* We have worked hard to create, encourage, and embrace standards with other chains so that the cryptocurrency community of tomorrow is more inter-compatible (eg. IETF BLS standard or libp2p networking)
* We have spent time designing around quantum-computing resistant backups for the majority of the cryptography (eg. validators all have a Lamport backup key though most don't realise it)
* New cryptography has been developed and previously abandoned schemes revitalised (eg. Verifiable Delay Functions or the Legendre PRF)
* The design of the Beacon Chain is far more optimised than our initial designs for a PoS system
* There are far more crypto-economic edge cases in a PoS system when compared to PoW
* Software development is hard and time estimates are even harder
* The use of a hybrid fork choice to balance safety and liveness trade-offs
* There is a crazy amount of value being handles on Ethereum so it is necessary to be conservative with our changes (move fast and break things is not an option)
* There are 4 concurrent implementations being developed all of which need to be inter-compatible, and production ready
* As Ethereum governance is decentralised we need a shelling point for exactly what Ethereum PoS looks like, this takes time
* We have worked hard to create, encourage, and embrace standards with other chains so that the cryptocurrency community of tomorrow is more inter-compatible (eg. IETF BLS standard or libp2p networking)
* We have spent time designing around quantum-computing resistant backups for the majority of the cryptography (eg. validators all have a Lamport backup key though most don't realise it)
* New cryptography has been developed and previously abandoned schemes revitalised (eg. Verifiable Delay Functions or the Legendre PRF)
* Its a technically flawed solution that now has so much hype, abandoning the idea would lead to further FUD, tarnishing the project's future direction. So we must go through the motions to appease the energy FUD warriors.
lol, Ethereum's Beacon Chain already been running since Dec 1. See https://beaconcha.in/ Please point me towards the flaws.
Point me at its purpose?
As far as I can tell, it was a trick to remove coin from circulation, locking it away where it could not be used again. The fact that people have tokenized these beacon coins on other chains to trade show that people want their money back!
As far as I can tell, it was a trick to remove coin from circulation, locking it away where it could not be used again. The fact that people have tokenized these beacon coins on other chains to trade show that people want their money back!
No, it really doesn't. This is akin to saying because people take out second mortgages they really want their money back that they bought their house with.
Being able to leverage a committed sum of money via collateralization is as old as financial systems themselves.
If you can find any specific reasons for your take I'm very open to hearing about them?
Being able to leverage a committed sum of money via collateralization is as old as financial systems themselves.
If you can find any specific reasons for your take I'm very open to hearing about them?
In the world of hard money (bitcoin), leverage is extremely dangerous, you may never be able to repay the loan. You would not want to borrow a house worth of bitcoin in a 2nd mortgage -- you could never pay it back!
In the legacy financial world, 2nd mortgages just lead to private inflation of the fiat money supply (the money is being conjured out of nothing to pay for an asset that was already paid for). Nothing is produced, except some energy is burned updating centralized databases.
Having systems where both realities exist is great. I'm a fan of hard money. It is honest.
In the legacy financial world, 2nd mortgages just lead to private inflation of the fiat money supply (the money is being conjured out of nothing to pay for an asset that was already paid for). Nothing is produced, except some energy is burned updating centralized databases.
Having systems where both realities exist is great. I'm a fan of hard money. It is honest.
To establish "good enough" distributed consensus without burning absolutely enormous amounts of energy doing throwaway math problems?
I understand what they wanted to achieve, and I understand that they cannot achieve this. Seems that burning absolutely enormous amounts of energy is the only secure way of doing it. I guess rather than fight the universe, we better find a way to do it cleanly!
> and I understand that they cannot achieve this
Gonna need some citations here for this one.
Gonna need some citations here for this one.
And by far the most significant hindrance to moving away from proof of work is that there a number of significant players who have a large economic interest in PoW. Ethereum was promising this move many years ago, but it always was an extraordinarily low priority.
There are a lot of people with perverse biases. Many of the comments enthusiastically defending Bitcoin are people who are sitting on BTC and have watched it get pummelled due to its ludicrous enormous-energy-for-something-that-does-nothing-for-humanity reality (seriously -- if I see one more chart comparing the entirety of the financial industry with Bitcoin. The former powers the entire world. The latter powers some speculators, criminals, and a minuscule number of legitimate transactions).
There are a lot of people with perverse biases. Many of the comments enthusiastically defending Bitcoin are people who are sitting on BTC and have watched it get pummelled due to its ludicrous enormous-energy-for-something-that-does-nothing-for-humanity reality (seriously -- if I see one more chart comparing the entirety of the financial industry with Bitcoin. The former powers the entire world. The latter powers some speculators, criminals, and a minuscule number of legitimate transactions).
I disagree about the priority, they literally didn't know what they were doing or how to do it just yet. The security demands this community wants are and were completely science fiction as there is no proof of stake network that has met the goals they are aiming for, and they are simply much closer to reality now.
There was poor governance and management that debilitated their ability to function during the 3 year bear market. And they got their act together. In the mean time, more product market fit was made apparent and upgrades to the instruction set for arbitrary execution was done to the network and continues to this day.
The Ethereum network consists of many-to-many relationships for approval transactions for ERC20 tokens to interact with other smart contracts. This wasn't even foreseeable 18 months ago, and 18 months before that the ERC20 protocol wasn't even ratified.
There was poor governance and management that debilitated their ability to function during the 3 year bear market. And they got their act together. In the mean time, more product market fit was made apparent and upgrades to the instruction set for arbitrary execution was done to the network and continues to this day.
The Ethereum network consists of many-to-many relationships for approval transactions for ERC20 tokens to interact with other smart contracts. This wasn't even foreseeable 18 months ago, and 18 months before that the ERC20 protocol wasn't even ratified.
> Does nothing for humanity
Really? If that energy consumption problem wasn't there, what advantages does Ethereum have over Bitcoin? Would it even exist, since it offers many of the same features?
Really? If that energy consumption problem wasn't there, what advantages does Ethereum have over Bitcoin? Would it even exist, since it offers many of the same features?
Ethereum natively supports smart contracts. Bitcoin doesn't support them natively; any attempt to add them has to be a separate layer on top.
That's why the past few years have seen a rise in fungible and non-fungible tokens (average merit of those aside for the sake of argument, since this is just answering the question "it offers many of the same features"), pretty much all of which are hosted on Ethereum or Ethereum code forks like Binance Smart Chain.
That's why the past few years have seen a rise in fungible and non-fungible tokens (average merit of those aside for the sake of argument, since this is just answering the question "it offers many of the same features"), pretty much all of which are hosted on Ethereum or Ethereum code forks like Binance Smart Chain.
For more details on advantages of Ethereum over Bitcoin, and advantages other new blockchains have over Ethereum, please see my recent presentation:
https://capitalgram.com/posts/history-of-cryptocurrencies/
https://capitalgram.com/posts/history-of-cryptocurrencies/
Interested to hear your thoughts on Polkadot. At the end of the first section, you stop the 'innovation train' at NPOS. Polkadot takes all the ideas presented in your article, combines them and adds a couple unique ideas such as parachains.
(Not the parent poster.) I've looked at it and think it looks interesting, but I think Ethereum may be approaching something like JavaScript's status, now. It's not necessarily technically ideal, but it has first-mover advantage, tons of network effects, and an entrenched position, so it might have already won.
I think there's a decent chance they may eventually pivot a bit and rebrand Polkadot or Substrate as an Ethereum layer 2 platform. They already seem to be leaning in that direction a bit.
I think there's a decent chance they may eventually pivot a bit and rebrand Polkadot or Substrate as an Ethereum layer 2 platform. They already seem to be leaning in that direction a bit.
Most of the development team of polkadot is the team that made eth.
So back to the OP's point, Ethereum minus smart contracts and efficient energy use is "nothing for humanity", as if the basic features of money haven't improved our standard of living and there's nothing wrong with central banks and the powerful that benefit from them. The energy used provides immense value today. The costs need to be internalized though.
> Ethereum minus smart contracts [...] is "nothing for humanity"
No shit, if you take away the defining feature of something, you will be left with very of value indeed.
That's like saying the web without HTTP is nothing for humanity.
No shit, if you take away the defining feature of something, you will be left with very of value indeed.
That's like saying the web without HTTP is nothing for humanity.
The “as if” part means it can only be true if the regular money aspect of these two cryptos has no value, which is laughable.
I really hope they don't rush all this merging and forking.
And also "audit the auditors". So they don't end up on a future rekt.news leaderboard.
And also "audit the auditors". So they don't end up on a future rekt.news leaderboard.
This is one thing I've been wondering about new projects that start with PoS. How do they have enough distribution of the coins in order for them to be resilient against attacks?
This is a good point and I think only ethereum has sufficient distribution. The sole advantage of PoW over PoS is distribution - miners sell, dumping the price, which is also likely to make other people to sell. Even many ethereum founders sold very low - Vlad Zamfir in particular sold ~100% below $20 (he tweeted about it, can't find it now).
Ethereum had 6 years of PoW now - most likely nothing else can repeat its distribution, ever. The time of PoW is visibly over.
Another point is that ethereum was icoed when crypto was tiny, few people believed smart contracts could have value and VC stayed away. Normal people are much more likely to sell just to buy a house. Now new coins start with coins distributed to VC and they are prepared to hold for years hoping for eth-tier returns. There's an argument that not that many people even knew about the ico - but the same is true for bitcoin mining early. It's very hard to quantify precisely but I think both have almost identical coin concentration.
Be wary of manipulative statistics that ignore the inherent differences between the utxo vs account model - like percentage of coins held by top x%. The assumed practice in an account-based model is for one user to use one address, while the current practice for utxo coins is to use one address per received transaction. Same is true for value sent per timeframe - because utxo relies on change addresses the actual transferred value is much smaller.
Ethereum had 6 years of PoW now - most likely nothing else can repeat its distribution, ever. The time of PoW is visibly over.
Another point is that ethereum was icoed when crypto was tiny, few people believed smart contracts could have value and VC stayed away. Normal people are much more likely to sell just to buy a house. Now new coins start with coins distributed to VC and they are prepared to hold for years hoping for eth-tier returns. There's an argument that not that many people even knew about the ico - but the same is true for bitcoin mining early. It's very hard to quantify precisely but I think both have almost identical coin concentration.
Be wary of manipulative statistics that ignore the inherent differences between the utxo vs account model - like percentage of coins held by top x%. The assumed practice in an account-based model is for one user to use one address, while the current practice for utxo coins is to use one address per received transaction. Same is true for value sent per timeframe - because utxo relies on change addresses the actual transferred value is much smaller.
> The time of PoW is visibly over.
Thanks for pointing this out! I never thought about this. To me the biggest long term threat to btc is the shift in block rewards from mined coins to transaction fees. I am assuming a possibly much smaller security budget available for “wasting energy”. But at that point it still might be enough as there is no network effect supporting new pow chains anymore, that could threaten btc security by having more sha hashpower.
Thanks for pointing this out! I never thought about this. To me the biggest long term threat to btc is the shift in block rewards from mined coins to transaction fees. I am assuming a possibly much smaller security budget available for “wasting energy”. But at that point it still might be enough as there is no network effect supporting new pow chains anymore, that could threaten btc security by having more sha hashpower.
Exactly, the devil is in the details, just like how all current "scalable" blockchains are only able to do so because they sacrificed decentralization. Ethereum is dealing with growing pains right now because it's solving scalability with an approach that doesn't sacrifice decentralization or security.
AFAIK they are already at 6-8tb for their blockchain. Seems to be not very helpful with a high diversity of staking nodes. I am in doubt that their turing complete global computer can scale AND stay decentralized
That's only for an archive node which isn't that useful to the network and is generally only used by specialist. A full Ethereum node easily fits on a 1TB drive and with research ongoing into statelessness the problem of state growth won't be a problem long term.
PoW was of course a naive system but this this PoS should really be called the "Oligarchy" because it takes us back to the past and very visibly separates the plebs from the aristocracy.
PoW had an implicit requirement for a global supply chain of hardware and energy which (kind of) made political and geopolitical games more difficult. With PoS, doing politics no longer requires work, which could lead to geopolicical wars. For example it might be possible to achieve wide enough consensus among stakers in Western countries to punish China (for some reason), e.g. willingly losing part of their stakes to empty major Chinese wallets. The fact that this doesn't really require physical effort but only persuasion is problematic.
ETH will be a real test about whether PoS works, as the other PoS cryptos are much smaller and less intertwined in other crypto projects. Historically, oligarchies led to wars
PoW had an implicit requirement for a global supply chain of hardware and energy which (kind of) made political and geopolitical games more difficult. With PoS, doing politics no longer requires work, which could lead to geopolicical wars. For example it might be possible to achieve wide enough consensus among stakers in Western countries to punish China (for some reason), e.g. willingly losing part of their stakes to empty major Chinese wallets. The fact that this doesn't really require physical effort but only persuasion is problematic.
ETH will be a real test about whether PoS works, as the other PoS cryptos are much smaller and less intertwined in other crypto projects. Historically, oligarchies led to wars
> it might be possible to achieve wide enough consensus among stakers in Western countries to punish China (for some reason), e.g. willingly losing part of their stakes to empty major Chinese wallets.
According to Ethereum's PoS implementation, this would require more than 33% of all staked Ethereum coordinating with modified clients in order to pull off. Then, another percentage of the stake adding up to 66% would have to be complicit in the attack, rather than actively defending against it by refusing to finalize blocks.
Compare this to PoW, where only 51% of hashrate needs to be participating/complicit to censor certain transactions, the other 49% have no way of fighting back, and the only tool the community has to fork away is to change the PoW algorithm.
Because of this, I actually believe PoS is more resistant than PoW to these kinds of attacks.
According to Ethereum's PoS implementation, this would require more than 33% of all staked Ethereum coordinating with modified clients in order to pull off. Then, another percentage of the stake adding up to 66% would have to be complicit in the attack, rather than actively defending against it by refusing to finalize blocks.
Compare this to PoW, where only 51% of hashrate needs to be participating/complicit to censor certain transactions, the other 49% have no way of fighting back, and the only tool the community has to fork away is to change the PoW algorithm.
Because of this, I actually believe PoS is more resistant than PoW to these kinds of attacks.
In practice a PoS network tends to have a participation rate of between 10% and 30%, and the 2-3 largest exchanges collectively tend to own between 10% and 50% of the total supply.
And then also in practice most of the staking is performed by a small number of outsourced staking firms, which increases the power concentration even more.
And it also makes hardforks more traumatic because your economy and your consensus builders are fundamentally intertwined. You can't fork an exchange off of the network without also disrupting every single user that parks funds on that exchange. The same concern doesn't exist with PoW mining.
And then also in practice most of the staking is performed by a small number of outsourced staking firms, which increases the power concentration even more.
And it also makes hardforks more traumatic because your economy and your consensus builders are fundamentally intertwined. You can't fork an exchange off of the network without also disrupting every single user that parks funds on that exchange. The same concern doesn't exist with PoW mining.
>You can't fork an exchange off of the network without also disrupting every single user that parks funds on that exchange.
Anyone who willingly opts into staking on a shady exchange, agreeing to a contract saying that they might be slashed, needs to be prepared to be slashed.
On the other hand, any exchange that automatically opts user deposits into staking without notifying them should be criminally liable. That's a big breach of user trust.
Anyone who willingly opts into staking on a shady exchange, agreeing to a contract saying that they might be slashed, needs to be prepared to be slashed.
On the other hand, any exchange that automatically opts user deposits into staking without notifying them should be criminally liable. That's a big breach of user trust.
> On the other hand, any exchange that automatically opts user deposits into staking without notifying them should be criminally liable.
One of the selling points of cryptocurrencies is that they make financial transactions and contracts possible without depending on a central authority.
One of the selling points of cryptocurrencies is that they make financial transactions and contracts possible without depending on a central authority.
> On the other hand, any exchange that automatically opts user deposits into staking without notifying them should be criminally liable.
I never realized this could even happen. And this is a HUGE problem for PoS if I am understanding this correctly. Because Exchanges don't even settle the transactions that often on chain, and could totally do this without user knowledge and then say they did with someone else's coins. You can't even prove it.
I never realized this could even happen. And this is a HUGE problem for PoS if I am understanding this correctly. Because Exchanges don't even settle the transactions that often on chain, and could totally do this without user knowledge and then say they did with someone else's coins. You can't even prove it.
> this is a HUGE problem for PoS
The problem of exchanges not keeping proper liquid reserves has nothing to do with PoS. If they stake customer ETH without permission, that ETH leaves their full custody and therefore they are lying to their customers about their reserves, and operating a fractional reserve scheme.
Since the cryptocurrency "big bang" in 2009, it's always been the case that you have to trust your exchange not to run away with your deposits, because they can show you whatever balance they want on your screen regardless of how many coins they actually own on the back-end.
The problem of exchanges not keeping proper liquid reserves has nothing to do with PoS. If they stake customer ETH without permission, that ETH leaves their full custody and therefore they are lying to their customers about their reserves, and operating a fractional reserve scheme.
Since the cryptocurrency "big bang" in 2009, it's always been the case that you have to trust your exchange not to run away with your deposits, because they can show you whatever balance they want on your screen regardless of how many coins they actually own on the back-end.
> Compare this to PoW, where only 51% of hashrate needs to be participating/complicit to censor certain transactions, the other 49% have no way of fighting back, and the only tool the community has to fork away is to change the PoW algorithm.
This is just such a small part of the whole equation.
1. They can't continuously attack with this, as you need to expend energy as long as you want to continue with the attack.
2. Even if you have majority hash-rate, you can't change the rules of the system (this has already happened)
This is just such a small part of the whole equation.
1. They can't continuously attack with this, as you need to expend energy as long as you want to continue with the attack.
2. Even if you have majority hash-rate, you can't change the rules of the system (this has already happened)
1. Under PoW, a 51% attacker can continuously attack profitably. All the energy they expend gets returned as mining rewards just like normal, and they can potentially even (up to) double their rewards if they censor the other 49%. The only way to stop this aside from changing the PoW algorithm is to physically locate and seize the mining rigs.
2. Majority stakers can't change the rules of the system either.
2. Majority stakers can't change the rules of the system either.
> All the energy they expend gets returned as mining rewards just like normal
Is that because the mined blocks themselves are still valid (i.e. the hashes check out), regardless of the presence of an attacker? But then how does it help the attacker in an economical sense? Doesn't the rest of the network know that the new 51% blocks are tainted, so to speak?
Is that because the mined blocks themselves are still valid (i.e. the hashes check out), regardless of the presence of an attacker? But then how does it help the attacker in an economical sense? Doesn't the rest of the network know that the new 51% blocks are tainted, so to speak?
>Is that because the mined blocks themselves are still valid (i.e. the hashes check out), regardless of the presence of an attacker?
Yes. A censorship attack is just that - it's about mining valid blocks that ignore transactions from a certain party, and/or ignoring blocks from other block producers.
> But then how does it help the attacker in an economical sense?
If an attacker has 60% and censors all other block producers (40%), those other block producers won't be able to earn any mining rewards because teh 60% can continuously orphan the blocks they produce, putting them on non-longest-chain (invalid) forks.
In writing my last reply I forgot that difficulty adjustment only happens every 14 days (I can't remember how long it is with Ethereum's PoW, but let's take Bitcoin's PoW as an example), so it's likely that the attacker wouldn't earn any more mining rewards than an honest miner at first.
When that difficulty adjustment happens though, if the miner had been censoring for a good part of the past 14 days, the network would adjust to "consider their 60% the entire hashrate of the network", thus the attacker would start earning the other 40% of rewards for themselves in addition to the rewards they are supposed to earn.
> Doesn't the rest of the network know that the new 51% blocks are tainted, so to speak?
It becomes a very messy, subjective problem. For every block, you would have to prove whether the block producer is part of the censorship attack or just has an incomplete view of the network, which is an intractable computing problem without some sort of subjective heuristic requiring multiple network viewpoints and trusted parties.
Yes. A censorship attack is just that - it's about mining valid blocks that ignore transactions from a certain party, and/or ignoring blocks from other block producers.
> But then how does it help the attacker in an economical sense?
If an attacker has 60% and censors all other block producers (40%), those other block producers won't be able to earn any mining rewards because teh 60% can continuously orphan the blocks they produce, putting them on non-longest-chain (invalid) forks.
In writing my last reply I forgot that difficulty adjustment only happens every 14 days (I can't remember how long it is with Ethereum's PoW, but let's take Bitcoin's PoW as an example), so it's likely that the attacker wouldn't earn any more mining rewards than an honest miner at first.
When that difficulty adjustment happens though, if the miner had been censoring for a good part of the past 14 days, the network would adjust to "consider their 60% the entire hashrate of the network", thus the attacker would start earning the other 40% of rewards for themselves in addition to the rewards they are supposed to earn.
> Doesn't the rest of the network know that the new 51% blocks are tainted, so to speak?
It becomes a very messy, subjective problem. For every block, you would have to prove whether the block producer is part of the censorship attack or just has an incomplete view of the network, which is an intractable computing problem without some sort of subjective heuristic requiring multiple network viewpoints and trusted parties.
I'm on the PoW side. But you should note that PoW is also oligarchic in the sense that individuals have no ability to compete in terms of mining. The rich get richer is still a thing here.
That being said, PoS is very much a human centric valuation (rich peoples opinions being the value), so yes: politics and then war seem likely.
Pretty much every fiat currency has the same issues as PoS, where eventually war becomes the cheapest way to retain value.
That being said, PoS is very much a human centric valuation (rich peoples opinions being the value), so yes: politics and then war seem likely.
Pretty much every fiat currency has the same issues as PoS, where eventually war becomes the cheapest way to retain value.
In PoW, the "rich" have to keep selling their coins to buy more dedicated mining equipment in order to stay competitive. And because PoW hasn't reached "optimum efficiency," there's still profits to be had by building better miners and cheaper power sources. Innovations here have positive downstream effects, since innovations in cheap renewable power and efficient chip fabs and designs have many applications beyond mining.
PoS, on the other hand, requires minimal extra work from the already-rich. They just sit on their butts getting richer.
PoS, on the other hand, requires minimal extra work from the already-rich. They just sit on their butts getting richer.
It still doesn't change the underlying issue you discussed. Just because there is some friction removed in PoS doesn't mean that PoW isn't weighted to favor people with large pools of capital to invest.
That "friction" is a feature, not a bug. The "friction" generates second-order benefits for society.
benefits like killing the environment.
It's a well established result in PoW that a small constant improvement in efficiency (say, one mining farm is 5% more efficient than others) turns into an exponential advantage in hashrate over time if the profits are continually re-invested into building more hardware.
Yes, exactly. It's not a case of "rich get richer," so much as it's a case of "capital is continuously and irreversibly re-invested." In equilibrium, mining breaks even.
mining is actually worse because of economies of scale. rich miners don't need pools so they don't pay fees, they get bulk deals and earlier access to the newest ASICs, they can pay personnel to optimize their operations, etc.
so over time, the rich miners get richer at a faster rate than poor miners.
whereas under PoS, everyone gets the same % return (unless you stake with a pool, but even then you don't have these economies of scale like with mining.)
so over time, the rich miners get richer at a faster rate than poor miners.
whereas under PoS, everyone gets the same % return (unless you stake with a pool, but even then you don't have these economies of scale like with mining.)
What if a government required Ethereum traders to pay taxes in Ethereum, then kept and staked it, thus increasing their Ethereum even more. Wouldn't that government eventually gain complete control of governance in Ethereum?
Then they'd quickly have a hard time collecting taxes in the future, as they would run the economy into the ground.
Also the government doesn't want to gain control of Ethereum. If the government wants to use a crypto it will roll it's own and make it law, thereby having complete control of it from the get go, with no pesky premine for the foreign developers.
Also the government doesn't want to gain control of Ethereum. If the government wants to use a crypto it will roll it's own and make it law, thereby having complete control of it from the get go, with no pesky premine for the foreign developers.
On the flip side, nearly 100% of PoW mining hardware is manufactured in China. They could easily play geopolitical games with the west in that regard.
There is also a very delicate game to play if you're trying to hack a crypto for your own benefit. If a crypto network gets hacked it is likely to lose a ton of value and reputation. That's why ETH fell by 60% after the Dao hack. So you're really shooting yourself in the foot by being a malicious actor.
There is also a very delicate game to play if you're trying to hack a crypto for your own benefit. If a crypto network gets hacked it is likely to lose a ton of value and reputation. That's why ETH fell by 60% after the Dao hack. So you're really shooting yourself in the foot by being a malicious actor.
I was fairly into the space in 2014-2016 but stopped paying attention the last few years. It seems like lots of theorized applications actually exist and have a proof-of-concept now.
If I’m building a marketplace business in 2021, where I want to be “crypto-first” instead of relying on PayPal and Stripe Connect, where do I start?
The marketplace sells access to resources with an off-chain ACL system. It facilitates trades between resource sellers and buyers.
I assume I want a smart contract between buyer/seller to record resource grants on chain, which the access layer checks as a source of truth.
But if I were to do this on Ethereum, the gas fees would be really expensive. I’ve heard about Polygon and “optimistic roll-up.” Is this a viable solution?
If I’m building a marketplace business in 2021, where I want to be “crypto-first” instead of relying on PayPal and Stripe Connect, where do I start?
The marketplace sells access to resources with an off-chain ACL system. It facilitates trades between resource sellers and buyers.
I assume I want a smart contract between buyer/seller to record resource grants on chain, which the access layer checks as a source of truth.
But if I were to do this on Ethereum, the gas fees would be really expensive. I’ve heard about Polygon and “optimistic roll-up.” Is this a viable solution?
> If I’m building a marketplace business in 2021, where I want to be “crypto-first” instead of relying on PayPal and Stripe Connect, where do I start?
Unless you are building a dark web market, why would you want to? It will be more convenient for the vast majority of users to pay with card or PayPal.
Unless you are building a dark web market, why would you want to? It will be more convenient for the vast majority of users to pay with card or PayPal.
why does it have to be a dark-web market if blockchain payments are first class citizens? I suppose the general population isn't ready for decentralised payments yet or do you have another reason for such use-case generalization?
There are still many barriers to that "first class" status, taxes are mentioned most often.
Taxes are paid in fiat. Holding non-stablecoins would add even more of a tax headache because you'd have to track capital gain/loss as you enter/exit fiat for taxes / fees / vendors that don't accept crypto
Also the fact that general adoption has been slow so far may be a sign that there is not enough obvious value added for the average person to consider using crypto over fiat.
Taxes are paid in fiat. Holding non-stablecoins would add even more of a tax headache because you'd have to track capital gain/loss as you enter/exit fiat for taxes / fees / vendors that don't accept crypto
Also the fact that general adoption has been slow so far may be a sign that there is not enough obvious value added for the average person to consider using crypto over fiat.
who would pay with non-stablecoins though? The oath seems to be cbdcs that are compatible with public smart contract blockchains
There's also the risk that stablecoins aren't actually stable but just claim to be such: https://www.coindesk.com/tether-first-reserve-composition-re...
One reason that comes to mind is trying to be the change they want to see in the world. Cards and Paypal already have heaps of adoption.
The end user won't see a change in their cards though
I believe there are some use cases. Think of a government which does not allow currency conversion to more stable currencies in a place where volatility or inflation is very high. In that situation, it might be worth adopting a crypto-first approach, no?
But doesn't crypto have very high volatility?
For example, Reserve is a stablecoin designed for markets like Venezuela where it's "illegal" to use USD or EUR.
I'm pretty sure they will make all the stablecoins illegal as well. The fact that they cant really enforce it .. thats something else.
Normal citizens won't need 3rd party stablecoins when cbdcs are available
This is a great solution called zk-rollup (zero knowledge rollup) https://zksync.io/
It is just as secure as the base chain (unlike polygon) and has low fees and has been live for the past few months. This is a perfect solution to simple payments.
The difference between optimistic rollups and zero knowledge rollups is that you can’t deploy arbitrary smart contracts to zk rollup, it only supports a limited set of use cases, such as simple payments for now. Read more here https://vitalik.ca/general/2021/01/05/rollup.html
It is just as secure as the base chain (unlike polygon) and has low fees and has been live for the past few months. This is a perfect solution to simple payments.
The difference between optimistic rollups and zero knowledge rollups is that you can’t deploy arbitrary smart contracts to zk rollup, it only supports a limited set of use cases, such as simple payments for now. Read more here https://vitalik.ca/general/2021/01/05/rollup.html
Also zkSync has general EVM compatibility coming in a few months
What coin does zk-rollup use? or just base Ethereum?
It can use any coin. You can send ETH or any token, including stable coins such as DAI or USDC.
the current solutions do 'native fees' which means you pay the fee in whatever you are sending. This can't really last because I could create SPAM coin with 1B marketcap and overload the network with it.
IIRC they'll eventually create their own native token when their EVM compatible rollup is out.
IIRC they'll eventually create their own native token when their EVM compatible rollup is out.
As a side note:
If you as a reader are interested in math & crypto the stuff being done in the zero knowledge space w.r.t. cryptocurrencies is really cool regardless of your opinion on cryptocurrencies in general.
If you as a reader are interested in math & crypto the stuff being done in the zero knowledge space w.r.t. cryptocurrencies is really cool regardless of your opinion on cryptocurrencies in general.
Polygon & "optimistic roll-ups" are generally referred to as L2. In general this part of the etherum ecosystem is just starting up and the only one that has seen much adoption so far is Polygon (which did 4M tx yesterday & still has low fees).
Using an L2 system will mean that your user will need to be using that specific L2 system as well, but the UX doesn't seem so bad (at least for ETH -> polygon, and for the cryptocurrecny space so far).
ETH 2.0 will reduce gas fees somewhat on the mainchain, but it's fairly obvious that there's huge demand, the sharding that ETH 2.0 will do is create 1 shard for execution & 63 for data only. Most L2 systems will mostly use the data shards, so we appear to be heading towards an L2 future.
In short if I were building a company in the space I'd be looking at deploying both on the mainchain (L1) and on a L2 system, but prioritize the L2 system. Unfortunately we may end up in a world where there are dozens or more L2 systems and either the users or the companies have to pay the cost to hop between them.
Using an L2 system will mean that your user will need to be using that specific L2 system as well, but the UX doesn't seem so bad (at least for ETH -> polygon, and for the cryptocurrecny space so far).
ETH 2.0 will reduce gas fees somewhat on the mainchain, but it's fairly obvious that there's huge demand, the sharding that ETH 2.0 will do is create 1 shard for execution & 63 for data only. Most L2 systems will mostly use the data shards, so we appear to be heading towards an L2 future.
In short if I were building a company in the space I'd be looking at deploying both on the mainchain (L1) and on a L2 system, but prioritize the L2 system. Unfortunately we may end up in a world where there are dozens or more L2 systems and either the users or the companies have to pay the cost to hop between them.
Realistically, you can't. Unless you want to be a very early adopter, no mainstream businesses are accepting payments in crypto. Techwise, Coinbase has a thing: https://commerce.coinbase.com/
But I've absolutely never seen it in the wild.
But I've absolutely never seen it in the wild.
Um...that's not strictly the case though? https://blog.bitgo.com/24-major-businesses-accepting-bitcoin...
(Tesla has recanted 'for now').
(Tesla has recanted 'for now').
This list seems silly. For example:
> In a 2013 video, a man appears to be paying for his meal at Subway using Bitcoin in Allentown, Pennsylvania.
And, many are only at select locations, "will be", "unveils plans", and "testing".
> In a 2013 video, a man appears to be paying for his meal at Subway using Bitcoin in Allentown, Pennsylvania.
And, many are only at select locations, "will be", "unveils plans", and "testing".
To add my experience. I looked at rolling out Coinbase commerce a couple of years ago and then again a couple of months ago. I found their current integrations lacked support or were seemingly abandoned.
Contacting general or merchant support often took over 2 weeks to get a response, which was a deal-breaker for any service that would inevitably impact customers on our end.
Contacting general or merchant support often took over 2 weeks to get a response, which was a deal-breaker for any service that would inevitably impact customers on our end.
I'm not even really talking about technical limitations. More that 90% of consumers don't own any crypto. And (more controversially) it has completely morphed into an investment asset class. One that is possibly in a deflationary spiral where no one wants to spend any of it. IMHO it has really failed in it's mission of actually being a currency.
I use coinbase to accept crypto payments for virtual property here: https://substrata.info/parcel_auction_list
If you want to use microlayments, payment processing checkout the btcpayserver and Bitcoin lightning Network.
Check out Solana if you want lower fees
Low fees - but only once you're in the crypto ecosystem.
If you're after dollars or euros, the on-ramp and off-ramp at exchanges adds a comparable, if not higher layer of fees than existing payment mechanisms, kind of defeating the whole purpose.
If you're after dollars or euros, the on-ramp and off-ramp at exchanges adds a comparable, if not higher layer of fees than existing payment mechanisms, kind of defeating the whole purpose.
Maybe this is a good time and place to ask - let's say I want to buy something using Ethereum. Is it correct that when I look at, say, https://ycharts.com/indicators/ethereum_average_transaction_... , you have to pay USD 20 just as payment fees? I wrote off Bitcoin as a payment mechanism a long time ago because of this (although it seems BTC tx costs are now lower than ETH?), is this the direction tx costs for all crypto coins go?
To directly answer your question: currently, ethereum has the same fundamental scaling problems that bitcoin has (limited global throughput)
Bitcoin's attempted solution on this front is off-chain scaling via lightning network. As far as I can ascertain, this has had highly limited adoption.
Eth's attempted solution on this front is sharding. I can't claim to be an expert in this, but from my understanding after proof-of-stake is deployed, ethereum plans to deploy something like 64 separate "shards" which, from my understanding, are like extra blockchains for conducting transactions, and using some kind of complicated proof of stake system to keep it consistent. In this case, while the main-net still has limited global throughput, scaling up to add more side chains will allow scaling additional throughput. You can read more here https://ethereum.org/en/eth2/
As with lightning, we don't know how well this will actually end up going until it's deployed.
Bitcoin's attempted solution on this front is off-chain scaling via lightning network. As far as I can ascertain, this has had highly limited adoption.
Eth's attempted solution on this front is sharding. I can't claim to be an expert in this, but from my understanding after proof-of-stake is deployed, ethereum plans to deploy something like 64 separate "shards" which, from my understanding, are like extra blockchains for conducting transactions, and using some kind of complicated proof of stake system to keep it consistent. In this case, while the main-net still has limited global throughput, scaling up to add more side chains will allow scaling additional throughput. You can read more here https://ethereum.org/en/eth2/
As with lightning, we don't know how well this will actually end up going until it's deployed.
Ethereum has set aside sharding temporarily to focus on PoS. The plan to scale in the short-term is to use technology called "rollups" which put a transaction's signature data off-chain while keeping its data on-chain, effectively "batching" a bunch of transactions into one.
https://ethereum-magicians.org/t/a-rollup-centric-ethereum-r...
https://ethereum-magicians.org/t/a-rollup-centric-ethereum-r...
Eth has a sidechain called Polygon with orders of magnitude more usage than bitcoin's lightning network. There are a number of other promising "scaling solutions" launching in the coming weeks. Sharding is unlikely to happen in 2021.
> Eth's attempted solution on this front is sharding
sharding + L2 rollups*
sharding + L2 rollups*
[deleted]
For a basic transfer, it's probably best to use a gas tracker like: https://etherscan.io/gastracker to check on costs. It's about $6-8 at the moment. The average tx cost is going skew much higher because of DeFi transactions. Uniswap V3 is scheduled to deploy on Optimism potentially in a few weeks which may help alleviate fee pressure (although as you can see from the linked gas tracker, Uniswap V2 is still consuming a large portion of txs). The bet is that a combination of L1 and L2 improvements will bring transaction fees back to reasonable levels in the next year or so. If it doesn't, there are a host of new competitors like Algorand or Solana that are looking to supplant Ethereum (and do currently provide much higher transaction throughput and lower costs).
In general, fees go up as the token price goes up since fees are usually charged as a function of transaction size or complexity, and also fees rise as a protocol hits its tx limits, but not always. Nano is an interesting cryptocurrency that is fee-less (although they just had to roll out an emergency update to improve spam resistance), so it's possible to design a fee-less system, but it's certainly even more experimental atm.
There are, however a number of cryptos that currently (and by intent) have <$0.01 (sometimes significantly less) fees. This includes (just going down by market cap): Ripple, Bitcoin Cash, Stellar, or Dash. For transactions, even though fees are a bit higher (about $0.06), I like Monero since it's one of the most private and widely used cryptocurrencies out there, and it's fees have actually significantly decreased due to technical improvements in transaction efficiency, dynamic blocksize, and an algorithm that can actually reduce fees as volume increases.
In general, fees go up as the token price goes up since fees are usually charged as a function of transaction size or complexity, and also fees rise as a protocol hits its tx limits, but not always. Nano is an interesting cryptocurrency that is fee-less (although they just had to roll out an emergency update to improve spam resistance), so it's possible to design a fee-less system, but it's certainly even more experimental atm.
There are, however a number of cryptos that currently (and by intent) have <$0.01 (sometimes significantly less) fees. This includes (just going down by market cap): Ripple, Bitcoin Cash, Stellar, or Dash. For transactions, even though fees are a bit higher (about $0.06), I like Monero since it's one of the most private and widely used cryptocurrencies out there, and it's fees have actually significantly decreased due to technical improvements in transaction efficiency, dynamic blocksize, and an algorithm that can actually reduce fees as volume increases.
That is correct, to run an on-chain transaction is fairly expensive. There is a lot of ongoing work to address this: Layer 2 solutions like optimistic rollup, arbitrum, etc. EIP-1559 itself will address this problem on layer 1. But the ecosystem is not mature yet. If/when the scaling problem is finally solved, the legacy financial system will change rapidly.
> EIP-1559 itself will address this problem on layer 1.
1559 addresses fee stability and will help reduce fee spikes. It's purpose is not to reduce fees in general.
1559 addresses fee stability and will help reduce fee spikes. It's purpose is not to reduce fees in general.
$20 is a little high. ETH transactions are variable cost; more complex transactions cost more. In order to get the price of a simple transfer you can take the current gas price (for example, from https://ethgasstation.info/index.php), which is 87 right now, multiply that by 21000 (cost in gas of a transfer) and divide that by 1 billion. So a transfer costs 0.001827 ETH or ~$6 if you want to happen within a few minutes.
So yes, it's currently not practical for microtransactions.
So yes, it's currently not practical for microtransactions.
If I want to keep my fees less than 5%, I wouldn't call $100 a "micro-transaction". People don't like paying more, for fun.
That chart is highly misleading, as it includes all smart contracts. In ETH a basic transfer (like BTC) is often cheap (although it needs to be even less!), however interacting with a smart contract can be more expensive. If you want to interact with a highly complex smart contract that pulls a lot of state it can be 100x the cost of a basic transfer... just depends on the code.
No, there are coins like Bitcoin Cash that have ridiculously low fees and are accepted in tons of physical stores across the world.
BTC refuses to scale, Lightning is permanently broken.
Ethereum will reduce the fees with sharing, but that will take time.
BTC refuses to scale, Lightning is permanently broken.
Ethereum will reduce the fees with sharing, but that will take time.
> in tons of physical stores across the world.
Compared to other crypto, or on the scale of Visa and MasterCard?
Compared to other crypto, or on the scale of Visa and MasterCard?
Is this really your question?
I mean, yeah. I’ve seen Bitcoin-accepting shops once or twice in my life. But the parent claimed “there’s a ton”, so I was wondering where I can find those.
Just to put an anecdote to the question, I made a withdrawal from my mining pool to my wallet 2 days ago and for an nearly instant transaction it cost me ~$2USD. Higher than I'd want in any currency, but it definitely wasn't $20USD
It's cost per transaction. Transactions can have multiple endpoints, so the tx fee is split up between many different users.
If you check the incoming transaction ID I'm sure you'll see it contained many many endpoint wallets.
That's how mining pools offer free withdrawals periodically. If you split it up amongst 100s of users, per user tx cost is very low.
If you check the incoming transaction ID I'm sure you'll see it contained many many endpoint wallets.
That's how mining pools offer free withdrawals periodically. If you split it up amongst 100s of users, per user tx cost is very low.
Strange. I made ~5 ETH transactions a few days ago (interacting with a smart contract) and paid ~$90 each. Around the same time I made a few transfers, and spent about $25 each.
Yeah gas fees have been all over the place, and smart contract interaction can be really $$$
Nobody knows whether or not cryptocoins are currencies of the future but I'm certainly willing to let them innovate for the next few decades figuring out if there's a path forward.
However, I cannot abide by a money speculation mechanism which uses as much electricity to mine worldwide as the Netherlands use in total. That's absolutely asinine to me.
However, I cannot abide by a money speculation mechanism which uses as much electricity to mine worldwide as the Netherlands use in total. That's absolutely asinine to me.
> I wrote off Bitcoin as a payment mechanism a long time ago because of this (although it seems BTC tx costs are now lower than ETH?), is this the direction tx costs for all crypto coins go?
No. There are developers who actually prioritize on-chain scaling. For instance Bitcoin Cash and Monero have very cheap fees, and they will stay cheap for the foreseeable future.
No. There are developers who actually prioritize on-chain scaling. For instance Bitcoin Cash and Monero have very cheap fees, and they will stay cheap for the foreseeable future.
Yep. Not much, if anything, has improved since you wrote off Bitcoin. One of the problems is nobody really cares about having a new payment mechanism. You can explain fractional reserve banking to people, explain how the 2008 financial crisis happened, even give small scale advantages like sending money overseas, and the vast majority of people just don't care. Until people start caring, nothing will change, and crypto will remain a zero-sum pyramid scheme.
Not sure how it all works, but I assume it's broken down for a purchase on something like Coinbase card - eg. they bundle a load of card transactions into a ETH to fiat conversion for Visa
https://help.coinbase.com/en/coinbase/trading-and-funding/ot...
https://help.coinbase.com/en/coinbase/trading-and-funding/ot...
An entire month's worth, in fact! In practical terms, you pay for things in fiat and then cryptocurrency is sold to cover your credit card bill.
https://mempool.space/
As of writing, a Bitcoin transaction costs $4.76.
The last time I received a Bitcoin payment, it cost $0.36 in network fees. The network is currently more congested, so the fees are higher at the moment.
As of writing, a Bitcoin transaction costs $4.76.
The last time I received a Bitcoin payment, it cost $0.36 in network fees. The network is currently more congested, so the fees are higher at the moment.
surmoi(4)
Algorand has been Proof of Stake for years (2019 MainNet launch) and it's actually carbon-negative [1]. It's a shame more people don't know about it. Its founder is a Turing-award-winning MIT professor (Silvio Micali) who solved the blockchain trilemma [2] with the Pure Proof of Stake consensus algorithm. The tech is leaps and bounds ahead of other cryptos.
[1]: https://www.algorand.com/resources/news/carbon_negative_anno...
[2]: https://www.algorand.com/resources/blog/silvio-micali-lex-fr...
[1]: https://www.algorand.com/resources/news/carbon_negative_anno...
[2]: https://www.algorand.com/resources/blog/silvio-micali-lex-fr...
That sounded interesting but I couldn't understand from the links how a blockchain can be carbon negative:
>To achieve a carbon-negative network, Algorand and ClimateTrade will implement a sustainability oracle which will notarize Algorand’s carbon footprint on-chain for each epoch (a set amount of blocks). With its advanced smart contracts, Algorand will then lock the equivalent amount of carbon credit as an ASA (Algorand Standard Asset) into a green treasury so that its protocol keeps running as carbon-negative.
I'm pretty familiar with the basics of cryptocurrency and blockchains, but the above paragraph makes almost no sense to me.
>To achieve a carbon-negative network, Algorand and ClimateTrade will implement a sustainability oracle which will notarize Algorand’s carbon footprint on-chain for each epoch (a set amount of blocks). With its advanced smart contracts, Algorand will then lock the equivalent amount of carbon credit as an ASA (Algorand Standard Asset) into a green treasury so that its protocol keeps running as carbon-negative.
I'm pretty familiar with the basics of cryptocurrency and blockchains, but the above paragraph makes almost no sense to me.
They're going to buy carbon credits to offset the carbon emissions derived from using the network, then lock them away so they can't trade them off at a later time. That is definitely some marketing lingo tied around "we buy carbon credits".
It's times like this I ask myself whether I'm slow, or whether the text in question is needlessly complex.
My pessimistic side suggests this could be purposeful obfuscation of implementation by using complex language. No one will question their solution if no one can understand it.
On the other hand, I'm a big proponent of the Algorand project and based on the general quality of their work (the tech, docs, tutorials, etc.), I'd be surprised if there were anything malignant going on.
My pessimistic side suggests this could be purposeful obfuscation of implementation by using complex language. No one will question their solution if no one can understand it.
On the other hand, I'm a big proponent of the Algorand project and based on the general quality of their work (the tech, docs, tutorials, etc.), I'd be surprised if there were anything malignant going on.
[deleted]
I just read about it. It seems highly susceptible to disruption by a minority stake, via the birthday paradox.
If only a fraction of the stake holders are validators at any given time, but the set of 1000 validators is selected randomly from token holders, then all you technically need is 1000 tokens (or more) and given enough time you will be selected as the only validator, right? You can then validate a fraudulent transaction, breaking security.
Now perhaps the amount of time it would take for this to occur would be longer than the heat death of the universe if you only have 1000 tokens, but at the very least, this substantially reduces the stake required to mount such an attack below the 51% required in a PoW system, right?
If only a fraction of the stake holders are validators at any given time, but the set of 1000 validators is selected randomly from token holders, then all you technically need is 1000 tokens (or more) and given enough time you will be selected as the only validator, right? You can then validate a fraudulent transaction, breaking security.
Now perhaps the amount of time it would take for this to occur would be longer than the heat death of the universe if you only have 1000 tokens, but at the very least, this substantially reduces the stake required to mount such an attack below the 51% required in a PoW system, right?
thats why currently the minimum stake amount is 32 eth. Also, you'd learn you were the validator for the cycle only when you are awarded eth. If you try to push through a false transaction you can get slashed (Losing some of your stake). all in all, makes it impractical at best.
The first proof-of-stake coin was PeerCoin from 2012. Also Algorand is not leaps ahead of the competiton. More in my presentation:
https://capitalgram.com/posts/history-of-cryptocurrencies/
https://capitalgram.com/posts/history-of-cryptocurrencies/
Would it be reasonable to assert pure proof of stake is less risky than delegated proof of stake? I don't claim to be an expert in crypto but from what I've read it seems like pure proof of stake is a leap ahead of other consensus algorithms in terms of security, energy usage, etc.
> It's a shame more people don't know about it
It's a shame people don't understand that there's multiple aspects. Ethereum is much more decentralized, secure, have more dev mindshare, better community, tooling, and ecosystem. Let's also not forget that Algorand is powered by and centralized around team-run nodes.
It's a shame people don't understand that there's multiple aspects. Ethereum is much more decentralized, secure, have more dev mindshare, better community, tooling, and ecosystem. Let's also not forget that Algorand is powered by and centralized around team-run nodes.
I don't think the initial "It's a shame more people..." is meant to make people forget about Ethereum. I think it's to signal that not a lot of people know about Algorand, and doesn't anything about other projects.
Since you seem to indicate that you know what you're talking about, care enough to make a proper argument? You say Ethereum is more decentralized, secure and better tooling, but you never actually make a cohesive argument, only giving a list of "reasons" without any backing. I'm mostly interested in why you think Ethereum is "more secure" than Algorand, and what threat model are you considering here even?
> Algorand is powered by and centralized around team-run nodes
Hm, I run a Algorand node but I don't work for the Algorand team. What do you mean that Algorand is run by team-run nodes really? How do you even know which node belongs to who in the first place?
Since you seem to indicate that you know what you're talking about, care enough to make a proper argument? You say Ethereum is more decentralized, secure and better tooling, but you never actually make a cohesive argument, only giving a list of "reasons" without any backing. I'm mostly interested in why you think Ethereum is "more secure" than Algorand, and what threat model are you considering here even?
> Algorand is powered by and centralized around team-run nodes
Hm, I run a Algorand node but I don't work for the Algorand team. What do you mean that Algorand is run by team-run nodes really? How do you even know which node belongs to who in the first place?
i'll check back on this coin when its tokenomics have improved. I am not interested in something with 70% of the total supply not yet in circulation.
> The tech is leaps and bounds ahead of other cryptos.
How is it “leaps and bounds” ahead of e.g. PoS Ethereum?
How is it “leaps and bounds” ahead of e.g. PoS Ethereum?
The minimum amount of Ether to be eligible to stake is 32 Coins, so it appears that last year in June, about 120k addresses would've met that criterion[0]. That probably changed by now, I'd assume the number to be higher as more people set up 'mining rigs'. That's at least a larger number than I would've guessed. I wonder how many people/entities are behind those addresses.
On a side note, I have mixed feelings about PoS. The idea behind Ethereum - that is, as I understand it, being able to deploy smart contracts using a Turing complete language -, is pretty intriguing; but the costs associated with doing so put me off. I tried to estimate how much it'd cost to deploy a fairly small smart contract a couple days ago (admittedly when 'gas costs' were high), and it would've been several hundred dollars, perhaps even surpassing a thousand. It seems like PoS would lower that, which is good, but comes at the great cost that people who aren't already in the game won't be able to acquire Ether without basically paying cash for it. That's a weird dependence on fiat currencies for a 'decentralized ledger'. (And yeah, there might be other means, but none of them are really practical for the average person.)
If there hadn't already been cryptocurrencies, nobody would've thought PoS to be a good idea. A bunch of people who hold some digital certificates that predictably multiply themselves want people to give them money to 'acquire' those? That would've sounded like a scam to me...
[0] https://decrypt.co/31646/nearly-120000-ethereum-wallets-prim...
On a side note, I have mixed feelings about PoS. The idea behind Ethereum - that is, as I understand it, being able to deploy smart contracts using a Turing complete language -, is pretty intriguing; but the costs associated with doing so put me off. I tried to estimate how much it'd cost to deploy a fairly small smart contract a couple days ago (admittedly when 'gas costs' were high), and it would've been several hundred dollars, perhaps even surpassing a thousand. It seems like PoS would lower that, which is good, but comes at the great cost that people who aren't already in the game won't be able to acquire Ether without basically paying cash for it. That's a weird dependence on fiat currencies for a 'decentralized ledger'. (And yeah, there might be other means, but none of them are really practical for the average person.)
If there hadn't already been cryptocurrencies, nobody would've thought PoS to be a good idea. A bunch of people who hold some digital certificates that predictably multiply themselves want people to give them money to 'acquire' those? That would've sounded like a scam to me...
[0] https://decrypt.co/31646/nearly-120000-ethereum-wallets-prim...
I too have been skeptical of PoS, but IMO the thinking behind it has gotten better and better and there are pretty large chains that have been running without compromise.
Thankfully with ETH 2.0 the cost of publishing data on the chain will drop dramatically (there will be ~63x increase in throughput of publishing data, not transactions) so contract creation should be cheaper.
But really if you are interested in the space it might make sense to just publish on an L2 like polygon.
Thankfully with ETH 2.0 the cost of publishing data on the chain will drop dramatically (there will be ~63x increase in throughput of publishing data, not transactions) so contract creation should be cheaper.
But really if you are interested in the space it might make sense to just publish on an L2 like polygon.
Frankly, right now anyone who isn't already in the game isn't able to acquire Ether without paying for it.
Mining at a rate necessary to get any reasonable amount of Ether is a huge investment, and is already out of reach for the average person. Setting your desktop computer to mine definitely won't pay for your small smart contract.
Mining at a rate necessary to get any reasonable amount of Ether is a huge investment, and is already out of reach for the average person. Setting your desktop computer to mine definitely won't pay for your small smart contract.
> Mining at a rate necessary to get any reasonable amount of Ether is a huge investment,
I started mining on my own PC a couple weeks ago, with the GPUs I already had (2x 1080ti) and made about 0.5 Ether so far. So it's definitely not impossible to get enough currency that enables you to interact or even deploy a smart contract on a consumer PC with a little bit of time.
I started mining on my own PC a couple weeks ago, with the GPUs I already had (2x 1080ti) and made about 0.5 Ether so far. So it's definitely not impossible to get enough currency that enables you to interact or even deploy a smart contract on a consumer PC with a little bit of time.
Same goes for staking in ETH2 as you don't need 32 ETH. You can join a stake pool.
What mining software are you using?
I just use PhoenixMiner. Anything that has the feature of reducing memory latency ('-straps 2'). Getting 47 mhash/s per 1080ti with that.
I actually had to spin up a Virtual Machine with GPU passthrough to launch Windows because I couldn't get the GPU tweaks working on Linux. Really nice how vfio is now in the Linux kernel, it's been a breeze going through the setup (compared to a couple years ago when you needed a custom kernel.)
I actually had to spin up a Virtual Machine with GPU passthrough to launch Windows because I couldn't get the GPU tweaks working on Linux. Really nice how vfio is now in the Linux kernel, it's been a breeze going through the setup (compared to a couple years ago when you needed a custom kernel.)
>but comes at the great cost that people who aren't already in the game won't be able to acquire Ether without basically paying cash for it. That's a weird dependence on fiat currencies for a 'decentralized ledger'.
PoW is just as much depending on fiat currencies. You can't get electricity without paying for it, you can't get a mining rig without paying for it, etc. This is one of the more common critiques against PoS and it just doesn't hold true at all. With the decentralized finance ecosystem, you can put any supported asset to work and earn ETH or stablecoins or anything else you want and accumulate that way.
PoW is just as much depending on fiat currencies. You can't get electricity without paying for it, you can't get a mining rig without paying for it, etc. This is one of the more common critiques against PoS and it just doesn't hold true at all. With the decentralized finance ecosystem, you can put any supported asset to work and earn ETH or stablecoins or anything else you want and accumulate that way.
>This is one of the more common critiques against PoS and it just doesn't hold true at all.
Maybe I'm an edge-case (I don't think so), but I was able to use the hardware I already owned, and the electricity already included in my utilities bill to acquire enough Ether that would allow me to deploy a smart contract. That won't be possible anymore in the future. So you're factually wrong, at least in my case.
Maybe I'm an edge-case (I don't think so), but I was able to use the hardware I already owned, and the electricity already included in my utilities bill to acquire enough Ether that would allow me to deploy a smart contract. That won't be possible anymore in the future. So you're factually wrong, at least in my case.
Globally, very few people have gaming GPUs. You're super-privileged and you're effectively arguing for locking in your privilege and making the other 90% of the world worse off. PoS puts everyone on an equal footing. You want to stake? Buy in.
PoS does not put everyone on an equal footing. PoS privileges those who got in early and had the money or hardware to acquire a large chunk of the coin.
It's ridiculous you talk about financial privilege. Who the hell do you think owns most crypto? You think it is people living on the streets in India? Children in Africa?
You sound super delusional. I can't believe it.
It's ridiculous you talk about financial privilege. Who the hell do you think owns most crypto? You think it is people living on the streets in India? Children in Africa?
You sound super delusional. I can't believe it.
You definitely are an edge case if you were already paying your utility bills in cryptocurrency. Otherwise, you spent fiat currency to bootstrap your use of Etherium.
I didn't mean that I pay my electricity bill in crypto. I meant that my small apartment has a fixed electricity rate so that I don't have to pay any extra for running 2 GPUs, and that I already owned the hardware to mine, independent of crypto. So I didn't invest anything. Sorry for being unclear.
It is a scam -- all current crypto is a scam for the same reason. One of the other things that people don't understand is that currency and government are inseparable. When you buy Eth (or any other crypto) you're buying into a new system of government.
Do you want to be a citizen of that new government? What will they do for their citizens? Do they plan to build roads or anything else?
Seigniorage should go to the people not the capital holders.
Also, if people don't think there will be validators for each wallet with 32 coins -- which are producing Co2 -- then they are wrong. It just changes the game, not the incentives.
Do you want to be a citizen of that new government? What will they do for their citizens? Do they plan to build roads or anything else?
Seigniorage should go to the people not the capital holders.
Also, if people don't think there will be validators for each wallet with 32 coins -- which are producing Co2 -- then they are wrong. It just changes the game, not the incentives.
Currency and local government can be completely divorced and I think crypto will prove this in the future. I don't think governments will begin to care one way or another as long as they get theirs and taxes are paid. If you can score currency from around the globe and bring it home to a more local domain and pay in to the system where you live, they should have no problem with it.
And the validators, PoS anyway, use very little energy even compared to traditional coin minting.
And the validators, PoS anyway, use very little energy even compared to traditional coin minting.
>but comes at the great cost that people who aren't already in the game won't be able to acquire Ether without basically paying cash for it. That's a weird dependence on fiat currencies for a 'decentralized ledger'. (And yeah, there might be other means, but none of them are really practical for the average person.)
There's no inherent weird dependency on cash, there's only a dependency on whatever currency people choose to pay each other for work, which currently happens to be cash.
If people started paying each other in Ethereum-based tokens, you could close the loop and cash would not be a dependency.
There's no inherent weird dependency on cash, there's only a dependency on whatever currency people choose to pay each other for work, which currently happens to be cash.
If people started paying each other in Ethereum-based tokens, you could close the loop and cash would not be a dependency.
You can do pooled staking with small additional risks:
https://capitalgram.com/posts/ethereum-2.0-staking-and-stake...
https://capitalgram.com/posts/ethereum-2.0-staking-and-stake...
Fully support this, as PoW protocols - from an efficient market perspective - consume as much as they are currently worth to mine, which would mean that if we believe that the value of BTC will go up (in line with past increases, for orders of magnitude) then also the consumption of power will go up just as much.
When BTC hits 250K per coin next year, expect 5x as much energy consumption to what it does use today. At 1M per coin we can expect 20x as much power consumption.
Highly unlikely that taxation can resolve this as global economy simply forces the miners to places where energy is cheap and abundant. And countries will view this as a competitive advantage as now there is a simple way to convert power directly into money. Many cases have shown that poor countries will use their environment to gain an upper hand and pull their country out of poverty. Sadly the impact to the environment is global.
When BTC hits 250K per coin next year, expect 5x as much energy consumption to what it does use today. At 1M per coin we can expect 20x as much power consumption.
Highly unlikely that taxation can resolve this as global economy simply forces the miners to places where energy is cheap and abundant. And countries will view this as a competitive advantage as now there is a simple way to convert power directly into money. Many cases have shown that poor countries will use their environment to gain an upper hand and pull their country out of poverty. Sadly the impact to the environment is global.
Consider not rabbitholing into a narrative and understanding reality:
https://bitcoinmagazine.com/business/bitcoin-uses-less-than-...
https://bitcoinmagazine.com/business/bitcoin-uses-less-than-...
Bit of a weird argument they make there. Banking keeps the world spinning.
What does bitcoin do, right now, to make this even remotely comparable?
What does bitcoin do, right now, to make this even remotely comparable?
Why is there such a strong status-quo bias among people I thought were technologists, and what do you guys defend? the banking system?? really?
Do you all remember the energy FUD that the internet got back in the late 90s [1]?
Please! lets not sleepwalk into another PoS system on the internet to replace the previous one.
[1] https://www.forbes.com/forbes/1999/0531/6311070a.html?sh=3e2...
Do you all remember the energy FUD that the internet got back in the late 90s [1]?
Please! lets not sleepwalk into another PoS system on the internet to replace the previous one.
[1] https://www.forbes.com/forbes/1999/0531/6311070a.html?sh=3e2...
It wasn’t my intention to defend the banking system. But since you posted an article where Bitcoin is compared to this banking system I’d say it’s just fair to question whether they can actually be compared.
So, can they?
What’s the current transactions per day? How low can bitcoin energy consumption realistically go compared to where it is now?
So, can they?
What’s the current transactions per day? How low can bitcoin energy consumption realistically go compared to where it is now?
No, that wasn't my gripe. Bitcoin is a decentralized technological solution that almost completely replaces the banking system, I'd prefer that over the current Banking system, and bitcoin is global to boot.
Transaction per day -> it can do as many as you want. I run a lightning node and I've shown a lot of people how quick and cheap the transactions can be, and also how EASY it is to get setup to transact in bitcoin over lightning.
Transaction per day -> it can do as many as you want. I run a lightning node and I've shown a lot of people how quick and cheap the transactions can be, and also how EASY it is to get setup to transact in bitcoin over lightning.
This. Every single article and discussion about this "problem" always uses base chain transactions as the divisor for the energy cost per transaction. The average Bitcoin transaction [0] is ~$500k right now. The protocol made a conscious decision to make layer 1 a settlement layer, and secondary layers as transaction layers. I personally make an order of magnitude more transactions on layer 2 than I do on layer 1. The company I work for fits into the same boat, and the vast vast majority of funds we receive are on a layer 2.
[0] https://blockchair.com/bitcoin/charts/average-transaction-am...
[0] https://blockchair.com/bitcoin/charts/average-transaction-am...
Don't forget the halvening every 4 years reduces the block reward for mining by half.
PoW also implies large inflation, which pays for the security of the network. With PoS you can reduce issuance greatly, while staying safe.
So with PoS, we recreate a system where a few rich pool have decision over the network. Can someone enlighten me on how this is different from the current fiat system?
PoS is more equitable than endgame PoW. With PoS anyone with any amount of capital can secure the network. Even $10 can via decentralized stake pools.
With endgame PoW only the rich can acquire mining ASICs and locate them in cheap/free (stolen) electricity zones. The vast majority of the world is entirely excluded from PoW mining BTC because the cost of electricity in their region makes mining unprofitable.
With endgame PoW only the rich can acquire mining ASICs and locate them in cheap/free (stolen) electricity zones. The vast majority of the world is entirely excluded from PoW mining BTC because the cost of electricity in their region makes mining unprofitable.
No, they can't enlighten you. They've bought into a cult, and if they started considering the fundamental question of how this is better than fiat currency, the cognitive dissonance would hurt.
In truth nobody knows. People hypothesize that recreating financial products on top of Ethereum (or Polkadot or Cordano) will result in competitive offerings.
But it is hard to predict what will actually happen.
It is a system where you have skin in the game, the more skin in the game you have, the more power you have. Think it like a democracy where you are voting with your wallet.
The main difference with the fiat world is that with Ethereum you have transparency, and there is no corruption. You can't just bribe a politician to enact a rule you want. Everything that happens in the network is recorded permanently, and rules are not a suggestion, but a practical reality that can't be circumvented.
The main difference with the fiat world is that with Ethereum you have transparency, and there is no corruption. You can't just bribe a politician to enact a rule you want. Everything that happens in the network is recorded permanently, and rules are not a suggestion, but a practical reality that can't be circumvented.
That's called a plutocracy not a democracy.
What exactly do Ether holders vote on in this scenario? Changes to the protocol? Is that process highly transparent and easily accessible?
There's no on-chain governance like that. Some other blockchains do it but Ethereum devs are skeptical. The upgrade process will keep working like it does now.
While I myself stay with Bitcoin, Ethereum still has lots of advantages compared to the fiat system: it's still open source, and people can still validate the rules (although that full validation is extremely hard).
Also the current fiat system is debt based, which means that the vast majority of money is printed by banks and the money printing power is at the highest ranking sales person, and hidden.
Also the current fiat system is debt based, which means that the vast majority of money is printed by banks and the money printing power is at the highest ranking sales person, and hidden.
Banks will still loan even if fiat doesn't exist.
And the current crypto system seems to be meme based, while the fiat system is market based.
Have you ever actually used an Ethereum in real life outside of price speculation?
I’ve loaded up some eth into an ethereum based browser and knocked around their web. It’s interesting because the type of site where you normally have to sign in (“banking”, news, etc) you don’t have to sign in because every interaction is predicated through your wallet. It’s as if your username were identical to your public key.
However as a speculative instrument eth and Bitcoin are not my cup of tea.
However as a speculative instrument eth and Bitcoin are not my cup of tea.
Interesting. Sounds like Brave's BAT token then? I assume the websites you visited got paid a little bit of your Eth?
How does that work? Is it a vanilla Eth transfer, or is a contract generated each time and you review the Solidity code before proceeding?
How does that work? Is it a vanilla Eth transfer, or is a contract generated each time and you review the Solidity code before proceeding?
Not OP, but I literally use Ethereum every day and have been for like 2 years now. I started using dapps in 2016, but in 2019 is when the network had a sufficient amount of things to do that I found myself using it daily.
Ethereum no, but Bitcoin sure, I'm travelling a lot, and I have a lot of payment problems (for example my bank disabled my credit card just because they said that it's not working with some types of contactless recievers, but they can't send a new one to my hotel, just to my home address). Bitcoin always works, although it's not real-time (still faster than sending money to my Revolut account, which takes days).
If a person thinks that fiat payments work well, he hasn't really travelled yet to different cultures.
If a person thinks that fiat payments work well, he hasn't really travelled yet to different cultures.
I have traveled to different countries.
Fiat works, and works well. You're advised to keep some cash on hand, but it works multiple orders of ↑↑↑ [1] better than bitcoin
[1] https://en.wikipedia.org/wiki/Graham%27s_number
Fiat works, and works well. You're advised to keep some cash on hand, but it works multiple orders of ↑↑↑ [1] better than bitcoin
[1] https://en.wikipedia.org/wiki/Graham%27s_number
I've been traveling all over the world for the last ten years. I've never had any serious problems paying for anything with good old fashioned credit/debit cards. Even getting cash in the local currency is trivial with ATMs.
I ton't mean to sound rude (really) but this sounds exactly like the argument 'I've never had any serious problems traveling around on my horse, why do I need some new-fangled carriage which does nothing better than before?'.
This is the genesis of a new crypto universe. It's hugely hyped, and a lot of it is clearly BS. But underlying the hype and hysteria there's a kernel of a new paradigm emerging.
Crypto applications promise to provide disintermediation on a scale not seen before. Direct peer to peer transactions, conducted transparently, without a need to verify trust and happening simultaneously anywhere in the world.
Not only that but smart contracts bring with them the potential to do stuff that simply is not possible right now. For example, providing instant conditional transactions (if my fave rental car is available book it, otherwise search for another solution, but only from these sources at this price) etc etc etc. We don't know what this means, but it could be a revolution. Or not. :)
This is the genesis of a new crypto universe. It's hugely hyped, and a lot of it is clearly BS. But underlying the hype and hysteria there's a kernel of a new paradigm emerging.
Crypto applications promise to provide disintermediation on a scale not seen before. Direct peer to peer transactions, conducted transparently, without a need to verify trust and happening simultaneously anywhere in the world.
Not only that but smart contracts bring with them the potential to do stuff that simply is not possible right now. For example, providing instant conditional transactions (if my fave rental car is available book it, otherwise search for another solution, but only from these sources at this price) etc etc etc. We don't know what this means, but it could be a revolution. Or not. :)
ETH is so cool. But only really if you are into that kind of thing.
Smart contracts, and all the other buzz words turn regular folk away. I'm hedging my bets on the coin with a dog on it for mass adoption. Even the word "Ethereum" (and "Eth") is less user-friendly to "Doge".
For me, all this ETH stuff is just hype (very few ETH owners actually care about the currency side of things and its already gone too far into pyramid scheme territory to ever recover imo). The dog coin works just great as it is right now for the amount of users it has. Any upgrades should be manageable before they are ever necessary.
Smart contracts, and all the other buzz words turn regular folk away. I'm hedging my bets on the coin with a dog on it for mass adoption. Even the word "Ethereum" (and "Eth") is less user-friendly to "Doge".
For me, all this ETH stuff is just hype (very few ETH owners actually care about the currency side of things and its already gone too far into pyramid scheme territory to ever recover imo). The dog coin works just great as it is right now for the amount of users it has. Any upgrades should be manageable before they are ever necessary.
> Crypto applications promise to provide disintermediation on a scale not seen before.
They don't. All of "disentermidation" immediately turns around and restores all the institutions based on, you know, trust.
> Direct peer to peer transactions, conducted transparently, without a need to verify trust
Yup. Until you pay for something, and that something never arrives.
> (if my fave rental car is available book it, otherwise search for another solution, but only from these sources at this price)
Literally nothing prevents you from doing it right now, with existing technologies... Oh, wait. All rental car companies are closed to any integrations of any kind. Smart contracts will do literally nothing in this scenario.
Besides. If I go and rent a car from, say, Hertz, I get a contract written in plain language. It may be a little obtuse, but I can read and understand it. Smart contracts on the other hand are written in obscure esoteric programmming languages. Good luck telling people "don't worry, you won't be scammed out of your money because it has 'smart' and 'crypto' in it".
They don't. All of "disentermidation" immediately turns around and restores all the institutions based on, you know, trust.
> Direct peer to peer transactions, conducted transparently, without a need to verify trust
Yup. Until you pay for something, and that something never arrives.
> (if my fave rental car is available book it, otherwise search for another solution, but only from these sources at this price)
Literally nothing prevents you from doing it right now, with existing technologies... Oh, wait. All rental car companies are closed to any integrations of any kind. Smart contracts will do literally nothing in this scenario.
Besides. If I go and rent a car from, say, Hertz, I get a contract written in plain language. It may be a little obtuse, but I can read and understand it. Smart contracts on the other hand are written in obscure esoteric programmming languages. Good luck telling people "don't worry, you won't be scammed out of your money because it has 'smart' and 'crypto' in it".
I've never had problems withdrawing cash, even in relatively repressive countries. Your credit card was probably blocked to prevent fraud because you didn't tell your bank you are planning to travel rather than your bank trying to censor your money.
I've travelled extensively, and actually found it quite common to be unable to withdraw funds from the ATMs of some banks.
In practice it has never been more that a nuisance, as I've just gone to a different bank's ATM and it's been fine.
In practice it has never been more that a nuisance, as I've just gone to a different bank's ATM and it's been fine.
> If a person thinks that fiat payments work well, he hasn't really travelled yet to different cultures.
Count me among the people who have travelled and never encountered problems. I always bring two cards in case something weird happens, but I’ve never had to use the backup.
If established banking cards aren’t working in a country, it seems unlikely that relatively recent cryptocurrency would be working any better at their banking institutions. If their banks can’t take your bank card in exchange for cash, I doubt they’re going to be set up to take your Bitcoin.
Count me among the people who have travelled and never encountered problems. I always bring two cards in case something weird happens, but I’ve never had to use the backup.
If established banking cards aren’t working in a country, it seems unlikely that relatively recent cryptocurrency would be working any better at their banking institutions. If their banks can’t take your bank card in exchange for cash, I doubt they’re going to be set up to take your Bitcoin.
> my bank disabled my credit card just …
Yes, this can be a real problem when traveling.
> Bitcoin always works …
This is obviously a completely bullshit statement. Bitcoin almost never works in places where credit cards or ‘fiat’ are accepted.
> If a person thinks that fiat payments work well, he hasn't really travelled yet to different cultures.
‘Fiat payments’ covers everything from the ATM network to cash to western union to Hawala. All aspects of fiat payments indeed have problems.
However the idea that today, Bitcoin solves these problems outside of a tiny fraction of contrived cases is a delusional fantasy.
Almost nobody in the world trades in Bitcoin. Almost everybody in the world trades in ‘fiat’.
Yes, this can be a real problem when traveling.
> Bitcoin always works …
This is obviously a completely bullshit statement. Bitcoin almost never works in places where credit cards or ‘fiat’ are accepted.
> If a person thinks that fiat payments work well, he hasn't really travelled yet to different cultures.
‘Fiat payments’ covers everything from the ATM network to cash to western union to Hawala. All aspects of fiat payments indeed have problems.
However the idea that today, Bitcoin solves these problems outside of a tiny fraction of contrived cases is a delusional fantasy.
Almost nobody in the world trades in Bitcoin. Almost everybody in the world trades in ‘fiat’.
In a well functioning democratic society, the money printing is ultimately under democratic control. Don't lie.
You could say the decision to go to war is also ultimately under democratic control. Yes, it is, but it doesn't necessarily mean you should trust a politician or president when they want war.
Similarly, you shouldn't necessarily trust a central bank when they want to print money. (I'm not inherently opposed to it and think the pros probably outweigh the cons for some situations and intents; just saying accountability in cases like these isn't as simple as "it's the people's will".)
Similarly, you shouldn't necessarily trust a central bank when they want to print money. (I'm not inherently opposed to it and think the pros probably outweigh the cons for some situations and intents; just saying accountability in cases like these isn't as simple as "it's the people's will".)
And these cryptocurrencies are akin to letting whatever group holds the highest stake or the most computing power decide to go to war instead. So much better. Yay.
Nope. The point of consensus is that when you opt in to rules, they don't change under you.
Who has the highest amount of power in Bitcoin, and why haven't they done anything, for example increase the issuance?
Who has the highest amount of power in Bitcoin, and why haven't they done anything, for example increase the issuance?
I agree that the rules don't change. But I want the rules to be changed by a democratically elected competent government in the face of a crisis.
> Who has the highest amount of power in Bitcoin, and why haven't they done anything, for example increase the issuance?
How would that benefit them?
How would that benefit them?
The issuance is exponentially decreasing every 4 years. If you're a miner and have hardware investment, increasing your issuance contrary to the expectation of the market is essentially taxing the holders.
It's besides the point though, you can certainly benefit from holding power of the protocol but the reality is that there is very little of this dynamic.
It's besides the point though, you can certainly benefit from holding power of the protocol but the reality is that there is very little of this dynamic.
Truly, as you say, "in a well functioning democratic society", which is not the case for a not so insignificant proportion of the world.
I have no problem understanding why people in failed states might want these cryptocurrencies. They're essentially more convenient (but also more volatile) means of barter.
But let's face it: most of the hype is in well-functioning democracies. Here, I cannot fathom why anyone would wanna replace fiat currencies with this crap.
But let's face it: most of the hype is in well-functioning democracies. Here, I cannot fathom why anyone would wanna replace fiat currencies with this crap.
Of all the years in which you could make this argument, this year is probably the worst.
In the "well functioning democracy" U.S. You have:
- Mistrust in institutions
- An insane asset inflation bubble fueled by the biggest fiat printing spree ever
Sure, the state hasn't failed. But are you really surprised people want to expose themselves to a new paradigm with different fundamentals for money and finance, this year?
In the "well functioning democracy" U.S. You have:
- Mistrust in institutions
- An insane asset inflation bubble fueled by the biggest fiat printing spree ever
Sure, the state hasn't failed. But are you really surprised people want to expose themselves to a new paradigm with different fundamentals for money and finance, this year?
And if the US fails, don't you have quite a lot bigger problems than the currency over there?
Good luck paying for things with cryptocurrency-of-the-day without electricity. Or without authorities to call if your trading partner pulls a gun on you. But I'm sure the American solution is a diesel generator and an even bigger gun ;-)
Good luck paying for things with cryptocurrency-of-the-day without electricity. Or without authorities to call if your trading partner pulls a gun on you. But I'm sure the American solution is a diesel generator and an even bigger gun ;-)
In the case of a supply capped crypto, to not get burned by asset inflation.
Because despite it being very bad for the poor and middle classes, money printing is at an all-time high. Just like how neither US party is anti-war (but claims to be), neither wish to give up QE. The system is rigged for the super rich.
I had banker friends bragging me getting sex for approving low interest loans. I'm not sure what democratic control are you talking about, loans are approved by people.
Right. But surely that's someone abusing the system. It's not the system itself.
A system being open to abuse is to an extent a property of the system.
No True Scotsman.
If I understand correctly, that has never happened with fiat money ever in the history of humanity, though.
Hence the impetus to try something different and more befitting the future of our species.
Hence the impetus to try something different and more befitting the future of our species.
What? Most well-functioning democracies have tasked their central banks with inflation targets.
Today, the dollar is the reserve currency of note across the world. That may be changing, but I imagine we can agree on that facet of today's global economy.
So, do you think that the dollar - and specifically the inflation schedule and distribution mechanisms of the dollar - can be reasonably said to be under democratic, rather than plutocratic, control?
So, do you think that the dollar - and specifically the inflation schedule and distribution mechanisms of the dollar - can be reasonably said to be under democratic, rather than plutocratic, control?
There are several well-managed fiat currencies in the world that do not rely on being the world reserve! EUR, CHF, GBP, NOK, DKK, SEK, to name some.
Here's a comparison of PoS and PoW by Vitalik Buterin (creator of Ethereum): https://vitalik.ca/general/2020/11/06/pos2020.html
Obviously he's biased in favor of PoS for various reasons, but I think it's a worthy read.
Obviously he's biased in favor of PoS for various reasons, but I think it's a worthy read.
It's not that different. But the end goal isn't a revolutionary overhaul, but progress in a different direction.
The delusion that crypto is or can be the best thing humanity has ever created has to come to an end.
Let crypto just be another moderately useful system in society and let the speculation game die out.
The delusion that crypto is or can be the best thing humanity has ever created has to come to an end.
Let crypto just be another moderately useful system in society and let the speculation game die out.
So I'm more familiar with how Cardano and Polkadot do their POS rather than Ethereums. In Cardano since the entry level requirement to operate a stake pool is much smaller than it is to do something like Bitcoin mining, it creates a larger number of stake pools. There's also a soft limit on the size of the stake pool that encourages people to spread out their commitment so no one pool gets to large.So at least in the existing POS systems it seems to be working quite well. I'm going to be interested to see how it shakes out in Ethereum because they have to commit their funds. Which is in a way a burden.The more you put into the system for staking the less that you can use.
How do they prevent impersonation? There's no way a cryptosystem can prove that two different people actually have two different keys. If I want to pwn Cardano/Polkadot, don't I just need to run a bunch of different staking keys?
Binance runs about a dozen staking pools publicly so there are definitely problems with trying to keep pools decentralized.
Looking at Cardano. There are currently 2,497 staking pools which are staking 72% percent of all Ada that is out there. Which is about 23 billion coins staked. So if you owned 12 billion cardano and set up 188 pools to hold all of it, yes you would control the majority of the network.
Except with fiat system we can at least elect who the government is.
In our current system, decisions are made democratically - you vote politicians, who choose central bankers, who make the decisions.
On the scale between a full democracy and a full oligarchy, what you're describing would be a "representative democracy."
Unfortunately, our representatives don't really represent us, so we're much closer to oligarchy than democracy.
Also, a full democracy it terrible. It's basically the equivalent of facebook... having representatives who's full time job is to be knowledgable is much better than giving everyone an equal say on everything.
Unfortunately, our representatives don't really represent us, so we're much closer to oligarchy than democracy.
Also, a full democracy it terrible. It's basically the equivalent of facebook... having representatives who's full time job is to be knowledgable is much better than giving everyone an equal say on everything.
Whenever you have a system where it costs several dollars to carry out a transaction, it will always be inferior to fiat.
We could bring microtransactions to the web, and replace a lot of advertising, if transaction costs were zero.
We could bring microtransactions to the web, and replace a lot of advertising, if transaction costs were zero.
Read the pros and cons of proof of stake compared to proof of work here (written by Vitalik): https://vitalik.ca/general/2020/11/06/pos2020.html
Governments don't typically own >50% of the current money supply.
Unlike with fiat, you're not forced to use any particular crypto. If the rich stakeholders of ethereum decide to muck around with the network, nobody will want to use it anymore and the value will drop.
Demanding a single currency to settle debts is a feature, not a bug. I don't wanna spend each morning researching which currency to use today. And I'm sure the local store doesn't wanna figure out which set of ten optional currencies to sell milk for.
This doesn't even begin to consider long term debt.
This doesn't even begin to consider long term debt.
Current system is no different, as the hash power is related to how many computers you can afford to buy.
This doesn't fix the problem but it does fix the environmental impact.
This doesn't fix the problem but it does fix the environmental impact.
The difference is that with PoW you constantly have to do "stuff" (ie. buying equipment, running datacenters) or get left behind. PoS on the other hand you can just sit on your ass and wait for the $$$ to roll in.
Or you can pay someone a flat amount to do the "stuff" and experience your own unlimited percentage-based gains, like in pretty much any other market where "capital" is a thing.
Good point. But I still don't understand how it changes the premise presented by the comment, of "The one who has the money controls the network".
There are lots of participants in the global economy who has money. The idea is that you have enough different people with competing incentives. PoW provides incentive model which separates different actors (pools, exchanges etc) and also at the same time doesn't seem to lead to monopolies.
Can you explain what “sitting on your ass” means? I thought you had to maintain a validator?
Exchanges like CoinBase will stake for you. You as an individual don't have to do anything.
An earn interest, right? So I could lend Coinbase some of my ether for staking and they pay me interest in return. So PoS could give us an interesting investment possibility.
Well, its not called interest, its called 'staking rewards'. You can also earn interest lending out your ETH, but that's a different process and entails counterparty risk.
Yes and no. Keeping up with the day to day details is something you delegate at some point. PoW is also "just" an investment, with extra steps to set things up.
This is not the case. In Ethereum's PoS model, you put value at risk when you sign up to be a validator. You have to lock funds up to play a part in consensus.
This means that if you start acting maliciously, or even just not fulfilling your responsibilities (e.g. you let your computer go offline), then you are punished for it (depending on the severity of your offense, obviously).
Aka, you can't just wait for the money to roll in. You have to run a node, you have to verify blocks, and you have to make sure you're acting in the best interest of the network + keeping things running smoothly.
This means that if you start acting maliciously, or even just not fulfilling your responsibilities (e.g. you let your computer go offline), then you are punished for it (depending on the severity of your offense, obviously).
Aka, you can't just wait for the money to roll in. You have to run a node, you have to verify blocks, and you have to make sure you're acting in the best interest of the network + keeping things running smoothly.
This is something I don't understand. You lock the funds on a chain and you lose them on the chain. But what happens if two groups decide to split the chain, and both chains lock the opposing chains funds? It seems like there's no way to prevent social forks in the longer term, just a lot of hand-waving about that if the current social contract stays in place, some minority malicious group will be punished for secession.
It would seem that if some participants on the network can't abide by their national laws while running some contracts, the outcome would be inevitable. And then you would just get multiple chains running under multiple governments. This seems like a reinvention of the international banking system?
It would seem that if some participants on the network can't abide by their national laws while running some contracts, the outcome would be inevitable. And then you would just get multiple chains running under multiple governments. This seems like a reinvention of the international banking system?
Ethereum has already proven that there's no way to prevent social forks, correct? The DAO incident comes to mind as a very controversial instance, but there are others. Ultimately, it's up to the individual nodes to decide what code they want to run and what rules they want to use to decide what the chain is. I'm not sure I understand how PoS makes this worse (although maybe there's something I'm missing)
I found the following article to be helpful in understanding some of these processes
https://haseebq.com/ethereum-is-now-unforkable-thanks-to-def...
https://haseebq.com/ethereum-is-now-unforkable-thanks-to-def...
This article makes a good point about the fragility of DeFi, but it fails to demonstrate that the broader Ethereum community cares enough about DeFi to let it influence their decisions. It makes a general, hand-wavey gesture to other parts of ETH ("All websites, interfaces, block explorers, and wallets ultimately point to the majority chain. Game operators like CryptoKitties lock their D-ETH contracts so as not to confuse their users."), but it fails to justify this point—it already says "a civil war is brewing" and that individual developers (presumably including CryptoKitties) would have reason to support one or the other.
So while this article is a (good?) argument for why all DeFi operators must follow USDC, it fails to make the case for why anyone else should care about the fate of centralized stablecoins. Maybe these reasons are obvious! But I don't know them.
So while this article is a (good?) argument for why all DeFi operators must follow USDC, it fails to make the case for why anyone else should care about the fate of centralized stablecoins. Maybe these reasons are obvious! But I don't know them.
Right, but then the model is not trustless but is instead a complex implementation of the current system of international banking. Maybe I don't understand the point of cryptocurrencies. Most applications of cryptography are trustless.
"Trustless" is relative. In this case, the protocols are still trustless—the trust lies one meta level up, where you decide which protocols to use. In this situation, there are network effects as well—you can come up with your own perfect protocol in a vacuum, but if nobody uses it, who cares?
In this case, you can think about it as one person saying "I think it's a good idea if we do this" and a few hundred other people saying "I agree with you". Obviously, they're more likely to agree with the first person if they have some sort of institutional legitimacy. But is that "trust"? That's very different from the definition of "trust" that's generally used in protocol design.
In this case, you can think about it as one person saying "I think it's a good idea if we do this" and a few hundred other people saying "I agree with you". Obviously, they're more likely to agree with the first person if they have some sort of institutional legitimacy. But is that "trust"? That's very different from the definition of "trust" that's generally used in protocol design.
Why would you want to prevent social forks? Social forks are not only good, they are the killer feature of crypto. They are what makes crypto truly consensual and voluntaryistic (if that's a word). As for the problem of national laws, I hope that can be alleviated with better privacy, so people can safely run a node even in violation of laws.
Vitalik talked about splits like this, read https://vitalik.ca/general/2021/03/23/legitimacy.html
I don't think that helps my comprehension of this. Unless I am mistaken, it seems like a long winded essay on how cryptocurrencies are simply social constructs.
What stops chain forks to begin with? This isn't a flaw that's limited to PoS.
I think GP's point is that in the event of a fork, in a PoW fork miners have to choose to either mine for chain A or chain B, whereas with PoS stakers can choose to stake for both. This is bad, because either side can use their staking power to disrupt the other chain, by doing double spend attacks or refusing to confirm transactions. On top of that, staking is free to do, so you don't even have to expend resources to pull off such an attack, whereas with mining you have to spend real world resources to pull it off.
This is the point of slashing, to prevent the same coins from being staked on multiple chains at the same time. To stake you need to issue proofs of the stake which can be used to slash you on other chains.
Thank you, this is a good description of the issue! This does seem like a complicated problem to solve, but I'm not necessarily convinced that one set of incentives is always worse or better—aren't there some situations where you do want to import the existing set of "stakes" to gain adoption?
This is largely done by software. If you are not mucking around with the software, there is zero risk.
Who gets these funds? This is beginning to sound suspicious.
The other actors in the network running validators.
Specifically you are punished for:
- Being offline (the penalty is small, and roughly equal to the rewards earned by being online
- Running the same validator twice (huge penalty, be careful!)
Specifically you are punished for:
- Being offline (the penalty is small, and roughly equal to the rewards earned by being online
- Running the same validator twice (huge penalty, be careful!)
Are the funds paid in fiat or ETH?
ETH of course, this is an automated part of how the system works, not some behind-the-scenes deal based on reputation or whatever.
Yeah, but obviously the "stuff" has led to a Red Queen problem, with the outcome being incredible waste of electricity and computing resources (compared to PoS or having a less competitive eth mining industry)
Except, using the same kind of pooling that POW depends on, you can still get in at just about any price level. .01 Eth can be staked just as easily as 10,000 eth. And running a validator with 32 isn't nothing - you still have to keep a machine on and online 24/7 with an uncapped connection or pay someone to host that machine.
In PoS, you are still permanently burning the time value of the money you have staked. That's unrecoverable just like the electricity spent in PoW is unrecoverable.
I find comments like yours hilarious. The idea that the ethereum foundation has spent years and years designing a PoS system, writing papers, doing tests, building proofs of correctness aaaaaand derp they just didn't think of people sitting on their asses.
Maybe answer the question instead of scoffing at how ridiculous it is?
No, I refuse to put in effort to correct the level of confident ignorance the OP displayed.
It's not that hilarious when you realize that this is the same kind of thinking some cryto-boosters apply to hundreds of years of financial regulation and history.
This isn't really true. You also have to buy equipment and run specialized software to participate in PoS. It requires keeping a node connected to the internet with high uptime, and maintaining its software and hardware.
Plus, due to slashing, you are uniquely responsible for mistakes your validator makes. So, staking comes with both responsibilities and consequences for breaching them, just like any legal contract.
The fact that you can rent a turnkey cloud solution to do all this work for you and split the profits isn't really relevant to the argument IMO (I consider staking with Coinbase "renting cloud computing" in a specialized way).
Plus, due to slashing, you are uniquely responsible for mistakes your validator makes. So, staking comes with both responsibilities and consequences for breaching them, just like any legal contract.
The fact that you can rent a turnkey cloud solution to do all this work for you and split the profits isn't really relevant to the argument IMO (I consider staking with Coinbase "renting cloud computing" in a specialized way).
No, it is very different because in practice the pools and exchanges are totally separate entities. With PoS the biggest holders will be exchanges and therefore exchanges will control the cryptocurrency. With PoS there will be clearly less decentralization compared to PoW.
For some reason China seems to concentrate more than 50% of hashing rate due to "big money" coming in and building up huge data centers while using the dirty local energy available.
How's that decentralized.
The times of home mining with CPU/GPUs are long gone
How's that decentralized.
The times of home mining with CPU/GPUs are long gone
Because the only threat from a 51% attack is rewriting a couple blocks until they recognized as attackers and they get kicked off the network because bitcoin users actually validate blocks. In a PoS system there is an incentive for large stakeholders to increase block sizes. 1. It increases the usability of the network which increases the marketcap. 2. It pushes out smaller stakers who can’t afford to validate anymore because tx throughput becomes too high. If everyday people can’t validate the chain how can they fork it if they think the current block validators are acting against their interests? The ether account set will be far too large. So they’ll start from scratch.
>because bitcoin users actually validate blocks
so do Ethereum users.
>In a PoS system there is an incentive for large stakeholders to increase block sizes.
this doesn't work because of Ethereum's social contract, just like it wouldn't work with Bitcoin.
Just because you stake a lot of ETH doesn't mean you suddenly have unilateral power to increase block sizes. There is a thing called consensus, and the entire community needs to achieve it to implement changes. Good luck trying to convince the community that bigger blocks that make it harder for small users to validate the chain is a good idea.
so do Ethereum users.
>In a PoS system there is an incentive for large stakeholders to increase block sizes.
this doesn't work because of Ethereum's social contract, just like it wouldn't work with Bitcoin.
Just because you stake a lot of ETH doesn't mean you suddenly have unilateral power to increase block sizes. There is a thing called consensus, and the entire community needs to achieve it to implement changes. Good luck trying to convince the community that bigger blocks that make it harder for small users to validate the chain is a good idea.
Except the barrier for entry on building a stake pooling operation is relatively low, so there will be a substantial amount of competition in the space over time. Coinbase for instance is taking a 25% commission on the staking earnings, so anyone who can come in under that, or offer options in terms of liquidity on the staked funds that can be reinvested, will attract a good amount of the share of stakes. There is even a fully decentralized pooling system that is nearing release.
In order to be a validator in PoS (at least Ethereum's implementation) you need to lock up the funds, so not sure how an exchange would be particularly well-suited for that – they need to keep most of the coins on their books liquid so that the customers who actually own them can quickly trade them.
You don't seem to understand how exchanges work. Locking the funds won't be problem to exchanges. Most of the funds just sit dormant in cold storage for long periods of times. For withdrawals you always use most recent deposits and you minimize the transfers between hot and cold wallet.
I don't know anyone who keeps large amounts of ETH sitting unused on an exchange.
Just take a look at any of the account tables. Most of it is in exchange cold wallets. These exchanges will be staking against your interests. It has happened before, it will happen again. Just say no to PoS.
But that's only because Ethereum is currently on PoW, so (naive) people don't care.
But as soon the switch happens, people will want to be staking their ETH in pools that will earn them money.
But as soon the switch happens, people will want to be staking their ETH in pools that will earn them money.
Yeah, in exchanges. Which will ignore the wishes of the actual currency owners, just like happens today.
A vast, vast majority of staking users will not have the required 32 ETH for self-staking, and will be delegating this to third parties. PoS gives power to the exchanges, which should not have this power.
It only gives exchanges power if users choose to give them power, which is exactly how a decentralized democratized currency is supposed to work.
The difference to PoW is that the exchanges can do the staking with very minimal effort. I would guess majority of exchanges give the staking results to customers while taking some % fee.
I don't have any problem with this in general, I don't think it is wrong to do business like that. But I personally prefer PoW because it looks like it naturally separates the mining work from exchanges, creating more decentralized economy.
I don't have any problem with this in general, I don't think it is wrong to do business like that. But I personally prefer PoW because it looks like it naturally separates the mining work from exchanges, creating more decentralized economy.
Right.. they keep them in secure web browser wallets... (
what about DEX?
ain't it possible that CEX get outdated?
Also, pools are not miners.
PoW is a lot different, as burning real world resources (energy) brings sell-pressure to miners, whereas PoS only has cost of locking the funds. This means that regardless of the size of your "operation" cost scales very flat.
PoS also does not come with the property of innovation and disruption. In a PoW (especially ASIC-based) system you will find new ways to outperform your peers and disrupt old players.
PoW incentivices cheap energy in developing countries more than anything before. It is the fix for environmental problems.
PoS also does not come with the property of innovation and disruption. In a PoW (especially ASIC-based) system you will find new ways to outperform your peers and disrupt old players.
PoW incentivices cheap energy in developing countries more than anything before. It is the fix for environmental problems.
> PoW incentivices cheap energy in developing countries more than anything before. It is the fix for environmental problems.
That can only become true if and when governments decide to suddenly ban PoW, so that all that cheap energy services anything other than crypto. I don't think it works as an argument in favor of PoW, for the same reason "we're only spreading knowledge of chemistry and democratizing process engineering" doesn't work as an argument in favor of drug cartels.
Also, 'SR2Z is right - "cheap energy in developing countries" == coal.
That can only become true if and when governments decide to suddenly ban PoW, so that all that cheap energy services anything other than crypto. I don't think it works as an argument in favor of PoW, for the same reason "we're only spreading knowledge of chemistry and democratizing process engineering" doesn't work as an argument in favor of drug cartels.
Also, 'SR2Z is right - "cheap energy in developing countries" == coal.
This is a spicy take, not least because the cheapest source of energy in the developing world (i.e. the one without environmental regulations) tends to be coal.
PoS burns capital in the sense that it could be invested in something else (I was looking at staking coins but it doesn't come near the yield I get from my 401k for example, which is effectively providing unsecured debt to finance innovation.)
IMO: it's much better than PoW as long as it doesn't end up too centralized. I'm not too sure how I feel about the minimum amount required to stake though, that seems a bit odd.
IMO: it's much better than PoW as long as it doesn't end up too centralized. I'm not too sure how I feel about the minimum amount required to stake though, that seems a bit odd.
from what I heard the minimum ammount might change, and it was decided in a time ETH value was lower
They have an incentive to not mess around.
The justification is that contrarily to PoW, where there are economies of scale on computing power, PoS power scales linearly with your stake.
Mining has been concentrated in the hands of a few gigantic mining pools for a while, and PoS will actually make Ethereum more democratic. Again, this is based on documentation, there might be unforeseen consequences
Mining has been concentrated in the hands of a few gigantic mining pools for a while, and PoS will actually make Ethereum more democratic. Again, this is based on documentation, there might be unforeseen consequences
Anyone can mine Bitcoin, the rich are the only people in control of Ethereum transactions.
Unforseen? This has been known before the miners eliminated the soft cap on EIP 669.
Unforseen? This has been known before the miners eliminated the soft cap on EIP 669.
There are no economies of scale in PoW. At least for longer term. Cost of energy rises locally the more you use it. Cheap energy is somewhat equally distributed around the globe, which ensures geographical decentralization.
Energy prices aren't really distributed equally around the world:
https://www.globalpetrolprices.com/electricity_prices/
https://www.globalpetrolprices.com/electricity_prices/
This has more to do with electricity demand. It's important to understand the relationship between energy price vs. population density and standard of living. Energy is always cheapest where population density and standard of living are the lowest. That's why bitcoin mining will find it's way to remote sources of natural energy.
That has nothing to do with economies of scale.
Good. Very good.
This may be a radical take, but I think nations should introduce some unprecedented legislation: ban trade of proof-of-work cryptocurrencies.
Don't ban their trade because they make poor financial products, either because of rampant fraud or criminal activity. That's a different argument and requires different approaches. Ban their trade because global society shouldn't accept rampant incentives to literally burn up energy [1] to make financial products. Especially because proof-of-work simply just isn't necessary to have cryptocurrency.
Banning their trade won't categorically stop PoW cryptocurrencies. What it should do is completely tank their value and get the world to move on to less destructive coins.
I don't think there's any precedent for banning classes of financial products for environmental reasons, but it's time to create one.
[1]: In addition to environmental reasons, there's probably also economic ones. Mining burns through other scarce resources such as chip production capacity, although the true impact there is unclear.
This may be a radical take, but I think nations should introduce some unprecedented legislation: ban trade of proof-of-work cryptocurrencies.
Don't ban their trade because they make poor financial products, either because of rampant fraud or criminal activity. That's a different argument and requires different approaches. Ban their trade because global society shouldn't accept rampant incentives to literally burn up energy [1] to make financial products. Especially because proof-of-work simply just isn't necessary to have cryptocurrency.
Banning their trade won't categorically stop PoW cryptocurrencies. What it should do is completely tank their value and get the world to move on to less destructive coins.
I don't think there's any precedent for banning classes of financial products for environmental reasons, but it's time to create one.
[1]: In addition to environmental reasons, there's probably also economic ones. Mining burns through other scarce resources such as chip production capacity, although the true impact there is unclear.
On this logic we should also ban Christmas lights
way to devise a very specific way to kill the gravy train cryptobros have been riding on for so long
Would Ethereum be able to make the switch to PoS if it had never used PoW originally? How would they ensure a good distribution of ownership?
It's a difficult problem, but there are coins that have managed it. Stellar has piggybacked on other services to distribute – Facebook, Keybase, and Coinbase. There's an energy-efficient memecoin that distributes based on Folding@Home contributions that has become the #1 monthly F@H team.
Many industries do a lot of harm to the environment for profits. On the spectrum of those, where do cryptos fall?
I don't know and personally hold only a little bit, nothing I would be very pained to lose, but it would certainly cause a lot of economic harm to a lot of people to do what you propose. The idea cannot be taken seriously without first answering my question.
I don't know and personally hold only a little bit, nothing I would be very pained to lose, but it would certainly cause a lot of economic harm to a lot of people to do what you propose. The idea cannot be taken seriously without first answering my question.
Youtube alone uses 2x the amout of energy as the entire Bitcoin network, for perspective.
Source?
Youtube uses 243.6 TWh - https://thefactsource.com/how-much-electricity-does-youtube-...
Bitcoin uses ~118 TWh - https://digiconomist.net/bitcoin-energy-consumption
Youtube souce is from 2019, Bitcoin one is current.
Bitcoin uses ~118 TWh - https://digiconomist.net/bitcoin-energy-consumption
Youtube souce is from 2019, Bitcoin one is current.
The first source does not seem particularly reliable, it makes some back of the envelope calculations based on extrapolated stats that are not even sourced.
Other sources put Google’s total energy usage (including youtube) at around 12 TWh [1]. Total datacenter usage is estimated to be around 205 TWh [2].
[1] https://www.statista.com/statistics/788540/energy-consumptio...
[2] https://energyinnovation.org/2020/03/17/how-much-energy-do-d...
Other sources put Google’s total energy usage (including youtube) at around 12 TWh [1]. Total datacenter usage is estimated to be around 205 TWh [2].
[1] https://www.statista.com/statistics/788540/energy-consumptio...
[2] https://energyinnovation.org/2020/03/17/how-much-energy-do-d...
Youtube provides entertainment for literally billions of people
Bitcoin provides... idk a way for some people to make a lot of money and some others to lose it?...
Even if we say that BTC provides some value by transferring money etc. the amount of value per Watt is so slanted its ridiculous to even make that argument.
Bitcoin provides... idk a way for some people to make a lot of money and some others to lose it?...
Even if we say that BTC provides some value by transferring money etc. the amount of value per Watt is so slanted its ridiculous to even make that argument.
Because entertainment is so useful? What's your utility function to decide which one is more worthy of using electricity? Why should we use your utility function in particular?
Bitcoin is an independent financial network. It opens up economic access to literally billions of people currently shut out of the traditional financial system. I'd say that's quite valuable to the human race.
..to deliver quality video services to a billion people, instead of handling a handful of transactions for some greedy financial speculators.
But.. I pay my YouTube subscription with my Bitcoin. :(
If the government wants to put a higher price on energy or carbon, it should do so. But it should not be the arbiter of what's a worthy use of energy expenditure.
I could see a lot of people make the argument the production of a lot of energy intensive goods is not worth-while.
I could see a lot of people make the argument the production of a lot of energy intensive goods is not worth-while.
Government is made out of people. If the people don't want the economy oriented around energy being put into finding hashes, they have the right to vote.
People are made out of opinions. If they don't like the way others are voting, they have the right to convince others of theirs.
Which is to say, discussing on HN is a valid way to contribute your opinion to society. Voting is not your only voice.
Which is to say, discussing on HN is a valid way to contribute your opinion to society. Voting is not your only voice.
So why does the buck stop with government then? If enough of us agree that a law should be passed then why not just pass the law? Seems way easier to just make a rule than try to individually convince everyone.
It's an eventually sort-of-consistent system with a lot of buffering and delay.
if enough people agree that a law should be passed, and it's a high enough priority, and the opinion stays that way for a long time, then eventually enough politicians get on board by virtue of pressure from their voting base, and a law gets passed.
It's not great.
But on the other hand, near-immediate direct democracy is also not great, because it leads to knee-jerk reactions causing laws put in place. I'm thinking of stuff like the USAPATRIOT Act, except worse.
if enough people agree that a law should be passed, and it's a high enough priority, and the opinion stays that way for a long time, then eventually enough politicians get on board by virtue of pressure from their voting base, and a law gets passed.
It's not great.
But on the other hand, near-immediate direct democracy is also not great, because it leads to knee-jerk reactions causing laws put in place. I'm thinking of stuff like the USAPATRIOT Act, except worse.
Obviously the people want to put energy towards finding hashes or they wouldn't be doing it. What you're advocating for is a minority of people who actually vote to influence the government to send people with guns to stop the actions of people who are voting with their labor.
There will come a time when people like you -- who play God over others -- are ousted from society.
There will come a time when people like you -- who play God over others -- are ousted from society.
"The people" who do it are less than 1% of "the people" a government represents.
There are already laws in most countries forbidding you to litter, and you would never call that "playing God" - it just happens that littering with crypto mining is a multi billion dollar industry.
There are already laws in most countries forbidding you to litter, and you would never call that "playing God" - it just happens that littering with crypto mining is a multi billion dollar industry.
I do call it playing God. In California there are laws against littering and they are not enforced. You cannot regulate change into the hearts of men.
That's like saying people shouldn't try to ban meth because meth cooks are working hard.
It's just not a realistic outlook on how typical people want society to function. Most people do not believe PoW cryptocurrency is important to society.
It's just not a realistic outlook on how typical people want society to function. Most people do not believe PoW cryptocurrency is important to society.
So there's no bounds as to what government should be able to do, ethically or legally?
But this isn't proposed regulation to prevent an "economy oriented around energy being put into finding hashes".
It's literally regulation to stop "Proof of work". Which is a generic algorithm that can be applied to other circumstances.
It could have applications in CAPTCHA's, or anti-spam.
It could be a critical component of other decentralized technologies, not just blockchain crypto currencies.
Making this math illegal JUST to kill cyptocurrencies seems a tad much, right?
It's literally regulation to stop "Proof of work". Which is a generic algorithm that can be applied to other circumstances.
It could have applications in CAPTCHA's, or anti-spam.
It could be a critical component of other decentralized technologies, not just blockchain crypto currencies.
Making this math illegal JUST to kill cyptocurrencies seems a tad much, right?
Proof of Work used for decentralized consensus is maximally wasteful by design. It has to be a race to burn more resources than anyone else can. It's unfixable.
Governments already have regulations for energy efficiency, waste and pollution, and for most things it's possible to negotiate reasonable limits.
For PoW it's not possible. If you put an upper limit on its wastefulness, it'll be a limit on its security. Even if we had a Dyson Sphere, PoW would eventually eat more than half of it just to be secure.
Governments already have regulations for energy efficiency, waste and pollution, and for most things it's possible to negotiate reasonable limits.
For PoW it's not possible. If you put an upper limit on its wastefulness, it'll be a limit on its security. Even if we had a Dyson Sphere, PoW would eventually eat more than half of it just to be secure.
Isn't proof-of-work intrinsically wasteful though, as a proxy for costing money (e.g. instead of paying money directly for the right to mine BTC, you buy electricity and burn it)? In any context other than cryptocurrencies it seems like microtransactions would be a better choice.
The government is made out of people and if history has taught us anything, power corrupts those people. Income inequality has only risen since the last financial crisis. Decentralization of money is the whole point of this exercise, and many believe Proof of Work is superior to Proof of Stake because work is actually scarce. Once you make it cheap to transact, that opens up all sorts of attacks (spam, phishing) and devaluation. Since PoS can be copied very easily, many corrupt governments will do just that.
> Government is made out of people.
Maybe in theory but in actuality it is comprised of moneyed interests which is why it needs to be limited to preserve the freedom of the people.
Maybe in theory but in actuality it is comprised of moneyed interests which is why it needs to be limited to preserve the freedom of the people.
>it should not be the arbiter of what's a worthy use of energy expenditure.
I disagree. If we must cap the CO2 we can emit, we should definitely favor basic needs over luxury. Here in France, the government tried to set a carbon tax on gas (which is required for many simply to commute to work, with no affordable alternatives yet) but they refused to impose a tax on jet fuel which is known to be used by the ultra rich to fly their privates on the weekends (while they can afford high speed trains).
We should not just let money decide what's possible, when so many are still in need of basic necessities. Many could pay a 300% tax just to fly 10x a year across the globe (emitting many, many times the carbon footprint of an average household). How would that be fair, when the problem is not what people pay but how the planet is becoming inhabitable?
I disagree. If we must cap the CO2 we can emit, we should definitely favor basic needs over luxury. Here in France, the government tried to set a carbon tax on gas (which is required for many simply to commute to work, with no affordable alternatives yet) but they refused to impose a tax on jet fuel which is known to be used by the ultra rich to fly their privates on the weekends (while they can afford high speed trains).
We should not just let money decide what's possible, when so many are still in need of basic necessities. Many could pay a 300% tax just to fly 10x a year across the globe (emitting many, many times the carbon footprint of an average household). How would that be fair, when the problem is not what people pay but how the planet is becoming inhabitable?
my financial privacy is a basic need, and I need cryptocurrency to achieve it
I do not believe consensus mechanism other than PoW can provide enough security for a cryptocurrency
I do not believe consensus mechanism other than PoW can provide enough security for a cryptocurrency
I'm sure jet setters consider their private jet as a basic need, too.
What's interesting, is that you can gather ~300 random citizens - including jet setters and cryptofans - and let them think about it for two years in order to decide what they considered as basic needs, on a consensus basis. And then, we can organize a vote (e.g a referendum) to make sure society finds a common ground on this (just like we do for most things, such as banning crime).
See https://en.wikipedia.org/wiki/Citizens_Convention_for_Climat... for a good example.
I bet PoW would be far down the list of basic needs but it might, still. I like democracy (where people vote, not their fortune).
What's interesting, is that you can gather ~300 random citizens - including jet setters and cryptofans - and let them think about it for two years in order to decide what they considered as basic needs, on a consensus basis. And then, we can organize a vote (e.g a referendum) to make sure society finds a common ground on this (just like we do for most things, such as banning crime).
See https://en.wikipedia.org/wiki/Citizens_Convention_for_Climat... for a good example.
I bet PoW would be far down the list of basic needs but it might, still. I like democracy (where people vote, not their fortune).
my rights are not up for discussion, let alone a vote
PoW is different because it's energy use for its own sake.
If carbon taxes go up, some things will no longer be worth spending energy on, but crypto mining is just competitive, so the value of mining will go up with the cost of energy and keep using as much energy as ever. The only thing that can stop it is reducing demand for the coins, which the government is not even trying to do yet.
If carbon taxes go up, some things will no longer be worth spending energy on, but crypto mining is just competitive, so the value of mining will go up with the cost of energy and keep using as much energy as ever. The only thing that can stop it is reducing demand for the coins, which the government is not even trying to do yet.
> but crypto mining is just competitive, so the value of mining will go up with the cost of energy and keep using as much energy as ever.
That is not true. If the cost of energy increases, mining / hash rates will decrease. Miners are competing, and the limit to the price they will pay for electricity is the value of the cryptocurrency they are earning for the activity.
That is not true. If the cost of energy increases, mining / hash rates will decrease. Miners are competing, and the limit to the price they will pay for electricity is the value of the cryptocurrency they are earning for the activity.
If carbon taxes go up, miners will be incentivized to pursue low/no-carbon alternative energy sources, thereby accelerating the shift to cleaner energy. Mining can either be viewed as creating a profit incentive where none existed before, or at least enhancing the profit incentive even further. Clean energy needs more profit incentives to really scale adoption.
I am all for carbon taxes, to shape the market towards cleaner energy. And I do think it will successfully push miners even faster towards adoption of other energy sources.
I am all for carbon taxes, to shape the market towards cleaner energy. And I do think it will successfully push miners even faster towards adoption of other energy sources.
Government should arbitrate inappropriate use of any utility resource, including energy and water. In many cases such restrictions already exist for water.
I cringe every time I see such comments. Ban bitcoin or ban beef because it uses too much energy.
Humanity will continue to require energy as it advances and banning anything "because it uses too much energy" is a ridiculous advice. How about we ban gold mining, or set quotas on the number of children people may have, that will surely contribute to our CO2 reduction goals. It's also Orwellian and reminiscent of how the world looked like for citizens of the USSR back in 1960-1990
Humanity will continue to require energy as it advances and banning anything "because it uses too much energy" is a ridiculous advice. How about we ban gold mining, or set quotas on the number of children people may have, that will surely contribute to our CO2 reduction goals. It's also Orwellian and reminiscent of how the world looked like for citizens of the USSR back in 1960-1990
Communities tend to ban harmful things.
“communities”.
it’s all fun and games until I ban something you rely on for your livelihood
it’s all fun and games until I ban something you rely on for your livelihood
I’m sure businesses that rely on dumping arsenic into the local lake don’t like having their livelihood threatened either. Property rights matter. Right now the market is broken.
consuming energy (and paying for it) is not even the same species with dumping toxic chemicals
Burning coal literally dumps arsenic into the environment.
And to do so for speculative fun is ridiculous.
And to do so for speculative fun is ridiculous.
i have some bad news for you when it comes to how lot of electricity is generated.
Also, how do you decide which computing is good and which computing is bad?
Also, how do you decide which computing is good and which computing is bad?
You do, do you? I suppose it is of the variety where miners magically only use clean energy?
Kill the value of POW as a store of money and see how much of that computing still happens. Then you’ll know how useful it is.
Kill the value of POW as a store of money and see how much of that computing still happens. Then you’ll know how useful it is.
nah. the bad news is that a lot of energy is generated with coal. so you get the arsenic and other crap with our without bitcoin.
now, the question is: who decides what’s acceptable and what’s not acceptable for energy use?
now, the question is: who decides what’s acceptable and what’s not acceptable for energy use?
The government defines efficiency standards. I’d bet money some are coming for crypto soon.
We have banned a ton of things because they are bad for the environment. It has worked and will continue to work. Things like building design and construction standards are set to a minimum environmental standard, why shouldn't cryptocurrencies.
Youtube alone uses 2x’s the amount of energy of the Bitcoin network. Ban Youtube?
A quick google seems to turn up that this claim is from thefactsource.com based on the internet uses 10% of global power. And YouTube is 11% of internet traffic. So 1% of global power.
VS
An estimate of Bitcoin power consumption by the Cambridge Centre for Alternative Finance.
I know which one I’m more prepared to believe.
Even if this were true. I go on YouTube and can learn things: recipes, FreeCad tutorials, coffee nerdery, harmonica lessons.
Bitcoin literally does nothing.
VS
An estimate of Bitcoin power consumption by the Cambridge Centre for Alternative Finance.
I know which one I’m more prepared to believe.
Even if this were true. I go on YouTube and can learn things: recipes, FreeCad tutorials, coffee nerdery, harmonica lessons.
Bitcoin literally does nothing.
That article assumes that if YouTube is 11% of total internet bandwidth then YouTube is 11% of total internet electricity usage. That's a very dubious assumption.
> Bitcoin literally does nothing.
Except make those little pieces of green paper in your wallet look foolish.
Except make those little pieces of green paper in your wallet look foolish.
Remember the infrastructure is one part of the equation. The billions of devices consuming YouTube are running in electricity as well.
The virtue of energy use argument is just dumb.
The virtue of energy use argument is just dumb.
But again, read what the person you are responding to wrote. YouTube provides something of value to millions. PoW is not required for cryptocurrency to function. PoW provides no value. It wastes time and energy for the sake of wasting processor cycles.
Come on... PoW provides no value? So the almost $1 trillion in Bitcoin is just, nothing? Not worth anything? I think the people invested would beg to differ.
There is no need for Bitcoin to use PoW. Bitcoin can continue to exist using a different algorithm to establish distributed trust. But since you brought up Bitcoin, yes, I would say that it provides little value to society in it's current state. It operates primarily as a speculative investment rather than a true currency.
What would you propose the Bitcoin core team should switch to? Have you looked into the other algorithms, the feasibility of migrating of the existing network, etc.? It sounds more to me like you've just written off cryptocurrency in general.
As far as I can tell PoW is the most proven consensus mechanism so far. PoS may be promising though. ETH2 successfully switching will be telling.
As far as I can tell PoW is the most proven consensus mechanism so far. PoS may be promising though. ETH2 successfully switching will be telling.
I haven't written off anything. PoW is inherently flawed. It does not scale and Bitcoin has proven that. Bitcoin averages ~300K transactions a day while using more energy than some countries. That is unacceptable.
[deleted]
Says you.
Electricity is a commodity and a utility. Who are you or I to subjectively decide that a use is valuable or virtuous?
Is YouPorn worthy? Is MLB.tv valuable? What are the criteria that you use to determine worth?
Electricity is a commodity and a utility. Who are you or I to subjectively decide that a use is valuable or virtuous?
Is YouPorn worthy? Is MLB.tv valuable? What are the criteria that you use to determine worth?
There is no subjectivity here. We are not discussing the perceived value of cryptocurrency. We are talking about the value of the PoW algorithm. It is objectively wasteful. It is wasteful by definition. It's entire purpose is to force computational resources to spend cycles on computationally expensive problems that provide no value to society. It is an interesting an novel idea but it does not scale and that is a problem since there is a very real cost to society in expending significant amounts of the planet's resources for no gain.
Is YouPorn worthy? Is MLB.tv valuable?
Yes because people like porn and baseball.
Bitcoin is like gold. It’s valuable because other people say it’s valuable. But nothing useful happens when you mine crypto. Was I entertained? Did I learn something? Are they producing a widget? Even gold can be made into jewellery or used in electronics. Crypto literally just uses power.
Yes because people like porn and baseball.
Bitcoin is like gold. It’s valuable because other people say it’s valuable. But nothing useful happens when you mine crypto. Was I entertained? Did I learn something? Are they producing a widget? Even gold can be made into jewellery or used in electronics. Crypto literally just uses power.
YouTube also entertains hundreds of millions of people, whereas crypto benefits the average person…how exactly?
By enabling ransom ware attacks? Creating GPU shortages?
By enabling ransom ware attacks? Creating GPU shortages?
YouTube also promotes conspiracy theories, racism, anti-intellectualism, authoritarianism, anti-vaxxing, and so on. These things pretty severe negative externalities, to put it mildly. So let's not pretend that YouTube's existence is a net-positive for humanity; that remains to be seen.
I mean, all YouTube does is generate money for the ad-tech industry. I think it should be banned before PoW cryptos.
No that isn't all YouTube does thank you very much. It's one of the greatest treasure troves of educational video content. It has helped my life, career, and those of my friends. It has probably contributed far more to humanity's advance, in efficiency alone, than most other websites of its kind.
That you only use it to watch videos that bring zero gain to your life is a You problem.
That you only use it to watch videos that bring zero gain to your life is a You problem.
No it doesn't.
Yeah, it does. I posted sources in a reply to another comment. Or, you can look it up yourself.
You quoted https://thefactsource.com/how-much-electricity-does-youtube-... which says:
"the internet uses 10% of the total electricity consumption worldwide. How much of that is consumed by Youtube? After Netflix and embedded videos, Youtube is the third biggest global internet bandwidth eater. About 11.4% of global internet traffic is consumed by Youtube"
That figure assumes that the electricity usage of the internet is exactly related to the amount of bandwidth - so if YouTube uses 11.4% of the internet's total bandwidth, that means that YouTube uses 11.4% of the internet's total electricity consumption.
That is a highly dubious assumption.
"the internet uses 10% of the total electricity consumption worldwide. How much of that is consumed by Youtube? After Netflix and embedded videos, Youtube is the third biggest global internet bandwidth eater. About 11.4% of global internet traffic is consumed by Youtube"
That figure assumes that the electricity usage of the internet is exactly related to the amount of bandwidth - so if YouTube uses 11.4% of the internet's total bandwidth, that means that YouTube uses 11.4% of the internet's total electricity consumption.
That is a highly dubious assumption.
I think the difference is that a means of building green buildings and green cryptocurrencies have been proven viable. Once the same happens for the category of product YouTube falls into (which goes beyond just video distribution), the non-green way can be eliminated.
Google is claiming to be Carbon neutral though, so not a good comparison.
https://sustainability.google/commitments/
https://sustainability.google/commitments/
No? Youtube's use of compute power serves a purpose that is not quite literally wasting energy for the sake of it.
Building construction standards are a great example of regulatory failure.
By optimizing around energy conservation at all costs, we have homes that cost 3x, held together with glue, susceptible to mold, and filled with toxic crap like vinyl.
By optimizing around energy conservation at all costs, we have homes that cost 3x, held together with glue, susceptible to mold, and filled with toxic crap like vinyl.
The government hasn't banned beef, and yet there are now vegetarian and vegan products all over. People vote with their money.
You're advocating for violence against people who do things you don't like. Use your wallet and leave other people alone.
You're advocating for violence against people who do things you don't like. Use your wallet and leave other people alone.
When those same people are contributing to heat waves, drought, and sea level rise, do you not consider that violence as well?
> You're advocating for violence
Oh give over, this is ridiculous too.
When other people are causing harm that affects everyone it's perfectly reasonable to look at legislation to kerb the behaviours.
And no, that's not violence. No.
Oh give over, this is ridiculous too.
When other people are causing harm that affects everyone it's perfectly reasonable to look at legislation to kerb the behaviours.
And no, that's not violence. No.
whatever happened to the efficient market?
i find views that want to ban anything for energy consumption ridiculous. also what the people advocating for this kind of thing are missing is that it’s all fun and games until something you rely gets banned because of reasons.
here are my proposals:
the entire banking system is obviously using a lot of power. how about we ban banks and go back to using paper money. that’s def more environmental friendly. /s
electric cars run on energy that’s generated with coal. that’s not cool. let’s ban electric cars and keep driving gas cars. they have been around for a long time and the technology is so good that we actually pollute less with a gas car /s
the internet in general and datacenters in particular are using a lot of power. let’s ban datacenters. guaranteed between environment afterwards /s
i find views that want to ban anything for energy consumption ridiculous. also what the people advocating for this kind of thing are missing is that it’s all fun and games until something you rely gets banned because of reasons.
here are my proposals:
the entire banking system is obviously using a lot of power. how about we ban banks and go back to using paper money. that’s def more environmental friendly. /s
electric cars run on energy that’s generated with coal. that’s not cool. let’s ban electric cars and keep driving gas cars. they have been around for a long time and the technology is so good that we actually pollute less with a gas car /s
the internet in general and datacenters in particular are using a lot of power. let’s ban datacenters. guaranteed between environment afterwards /s
We have banned low efficiency vehicles (CAFE standards), we have banned refrigerants that are bad for the environment (CFCs). We have things that clearly cause massive amounts of societal harm (leaded gasoline). The market didn't solve any of those issues, the government did. I for one am extremely happy that we live in a world that is not poisoned by lead and that still has a functioning ozone layer. Its kind of silly that you are equating bitcoin with the entire modern banking system. The regulations to ban leaded gasoline didn't destroy automobiles, they just made them change. Changes to proof of stake aren't existential to BTC holders, but they are existential to the rest of us.
Also "until something you rely gets banned", what do you rely on bitcoin for besides being a store of value?
Also "until something you rely gets banned", what do you rely on bitcoin for besides being a store of value?
yup. it is silly to compare the banking system with bitcoin. bitcoin is obviously better. does it close at 5pm? does it close on the weekend?
my point is that you don’t get to decide what i consume. and banning bitcoin == banning any type of computing that you don’t like. do you understand how much power a modern datacenter sucks? do you also understand that some things that run in a datacenter are straight up dangerous to the fabric of our society?
my point is that you don’t get to decide what i consume. and banning bitcoin == banning any type of computing that you don’t like. do you understand how much power a modern datacenter sucks? do you also understand that some things that run in a datacenter are straight up dangerous to the fabric of our society?
"my point is that you don’t get to decide what i consume"
I am not making any decisions about your consumption. Our democratically elected government is responsible for making the best choices that balance our societal needs. Our government already regulates a lot of things around computing: Child porn/CSAM, export controls around cryptography, data privacy, the computer fraud and abuse act. This isn't novel stuff, having a computer doesn't mean you can do literally anything on it with zero consequences.
I am not making any decisions about your consumption. Our democratically elected government is responsible for making the best choices that balance our societal needs. Our government already regulates a lot of things around computing: Child porn/CSAM, export controls around cryptography, data privacy, the computer fraud and abuse act. This isn't novel stuff, having a computer doesn't mean you can do literally anything on it with zero consequences.
once you compare it to CP it’s clear you have a valid argument.
democracy? data privacy? thanks for the good laugh
democracy? data privacy? thanks for the good laugh
Wow. Where to start on this one!
Where do you see the problem in using less energy for a crypto currency? Why not make a cryptocurrency that uses even more energy?
Where do you see the problem in using less energy for a crypto currency? Why not make a cryptocurrency that uses even more energy?
those currencies already exist. people can choose to use them, while understanding the trade-offs.
Because electricity costs money. When the cost of electricity exceeds the value of coin you mine, you will stop mining. If you make a coin that takes half as much energy to mine, miners will just mine twice as much of it. Its like y'all are just discovering capitalism for the first time.
>How about we ban gold mining
Why not?
>or set quotas on the number of children people may have
Some people consume 10x less energy than others, so blindly capping the number of children does not seem a good idea. What about capping the carbon footprint per person instead?
We track and tax revenues (not perfectly but as well as we can). We could definitely track and cap carbon emissions. Sounds good to me!
Why not?
>or set quotas on the number of children people may have
Some people consume 10x less energy than others, so blindly capping the number of children does not seem a good idea. What about capping the carbon footprint per person instead?
We track and tax revenues (not perfectly but as well as we can). We could definitely track and cap carbon emissions. Sounds good to me!
yes. also let’s start capping the amount of oxygen people are allowed to breathe. I mean, without oxygen you cannot produce co2, amiright? /s
> Humanity will continue to require energy as it advances and banning anything "because it uses too much energy" is a ridiculous advice.
Not right now it's not. Not when we have constraints on how much CO2 we can pump into our atmosphere.
Right now, and I mean right now, when we're having huge problems de-carbonising the planet's energy supplies and are risking making life very uncomfortable for ourselves for decades or centuries to come, limiting energy use is actually one of the few levers we have to try to make a difference.
In this current situation, bringing online a whole new mid-sized country's worth of energy consumption for a financial instrument is ridiculous, and a huge own-goal for humanity.
Not right now it's not. Not when we have constraints on how much CO2 we can pump into our atmosphere.
Right now, and I mean right now, when we're having huge problems de-carbonising the planet's energy supplies and are risking making life very uncomfortable for ourselves for decades or centuries to come, limiting energy use is actually one of the few levers we have to try to make a difference.
In this current situation, bringing online a whole new mid-sized country's worth of energy consumption for a financial instrument is ridiculous, and a huge own-goal for humanity.
Very bad. Ive got another radical take -- cypherpunks should ban proof of stake cryptocurrencies. They are bad for freedom, bad for decentralization, bad for store of value. Wall street tricks attempting to put the genie back in the bottle.
Proof of work is the only thing of value, the only distributed consensus model that is secure and the only way forward for store of value cryptocurrencies.
Proof of work is the only thing of value, the only distributed consensus model that is secure and the only way forward for store of value cryptocurrencies.
100%
If you want less carbon burned, tax carbon. I'm skeptical of cryptocurrency, but the idea that regulators, already captured by banks, should aggressively ban new financial products that may one day threaten the incumbents makes me wary.
A carbon tax would filter down to the electricity consumer cost. I dont know about you, but I dont want to pay more for electricity so other people can burn electricity for virtual money.
Unless you are suggesting taxing crypto itself, in which case… sure!
Unless you are suggesting taxing crypto itself, in which case… sure!
That's a common take, but a well-designed carbon tax could be made revenue-neutral and non-regressive.
In other words, the amount it takes in can be given back to the average person -- in forms of tax rebates, investment in public transit, education, whatever. In an ideal world a carbon tax would have no adverse impact on lower and middle class people.
I should also add that in that world higher electricity cost due to carbon tax is a good thing -- it'll help carbon-neutral sources of energy to compete and replace the more dirty forms. Which is exactly what we want.
In other words, the amount it takes in can be given back to the average person -- in forms of tax rebates, investment in public transit, education, whatever. In an ideal world a carbon tax would have no adverse impact on lower and middle class people.
I should also add that in that world higher electricity cost due to carbon tax is a good thing -- it'll help carbon-neutral sources of energy to compete and replace the more dirty forms. Which is exactly what we want.
I have nothing against carbon taxes actually would love to see them implemented, but I am not sure how they would help prevent excessive energy use due to crypto. OP was suggesting a carbon tax instead of direct regulation, but I don’t quite get how it would dissuade crypto use without increasing electricity costs.
Consumers can make a net profit if the tax revenue is paid as a dividend to citizens. There are number of papers about this if you are interested [1].
[1] - https://citizensclimatelobby.org/carbon-pricing-studies/
[1] - https://citizensclimatelobby.org/carbon-pricing-studies/
I don’t want to pay more for fancy sports cars or houses because other people are willing to pay higher prices for those things either.
As others have said, a carbon tax can be designed to refund either the entire amount, or a portion of the amount back to consumers, which might also transform it into a non-regressive tax.
But perhaps more importantly, you wouldn't be taxed because others are using electricity for virtual money. You would be taxed because your carbon emissions are causing climate change, and to encourage you to reduce energy usage where possible.
But perhaps more importantly, you wouldn't be taxed because others are using electricity for virtual money. You would be taxed because your carbon emissions are causing climate change, and to encourage you to reduce energy usage where possible.
Why is your electricity use posting on HN more virtuous than making Bitcoin?
Crypto is already taxed.
All money has a cost on society. You have to do something to maintain its value. You don't think wars in the middle east -- to maintain the petrodollar -- have an environmental impact?
And when it isn't oil it'll be fights over germanium and lithium veins.
If you actually cared to do more than sit in a chair -- advocating random things you didn't research -- you'd be advocating for Thorium power. Thorium is nearly as abundant as lead -- it's all over the place -- and it's much more clean and less dangerous than even solar or wind.
All money has a cost on society. You have to do something to maintain its value. You don't think wars in the middle east -- to maintain the petrodollar -- have an environmental impact?
And when it isn't oil it'll be fights over germanium and lithium veins.
If you actually cared to do more than sit in a chair -- advocating random things you didn't research -- you'd be advocating for Thorium power. Thorium is nearly as abundant as lead -- it's all over the place -- and it's much more clean and less dangerous than even solar or wind.
Yes, because that's the negative externality, the carbon that you dump in the atmosphere by consuming electricty. Would you be willing to pay more so that videogaming is not banned as well, or would you ban that too?
Also, you can make the tax progressive so that the high consumers can pay much more.
Also, you can make the tax progressive so that the high consumers can pay much more.
Why should anyone pay for your consumption and values when you aren't willing to pay for others?
> If you want less carbon burned, tax carbon.
What if we want to decide that we want to minimise carbon, but some use of energy is preferable (for instance consumer/home use) to bootstrapping new financial products?
What if we want to decide that we want to minimise carbon, but some use of energy is preferable (for instance consumer/home use) to bootstrapping new financial products?
> but some use of energy is preferable
and that's where the price signals what is preferable. The correct allocation of energy should be based on the price people are willing to pay for the energy. Like any other commodity.
and that's where the price signals what is preferable. The correct allocation of energy should be based on the price people are willing to pay for the energy. Like any other commodity.
> The correct allocation of energy should be based on the price people are willing to pay for the energy.
Why? Why is that 'correct'? Why would we not want to ensure the population has affordable energy for home use, but others seeking to make a profit from it rather than use it for basic needs pay more?
You phrase your reply as some sort of moral absolute, but it's nothing of the sort.
Why? Why is that 'correct'? Why would we not want to ensure the population has affordable energy for home use, but others seeking to make a profit from it rather than use it for basic needs pay more?
You phrase your reply as some sort of moral absolute, but it's nothing of the sort.
> Why would we not want to ensure the population has affordable energy for home use, but others seeking to make a profit from it rather than use it for basic needs pay more?
Because we already have the former and we don't need the latter.
A carbon tax with a dividend doesn't make life harder for lower income people, because they already have below-average energy consumption (wealthier people have bigger houses that need more heat etc.) and as a result the dividend would be larger than what they pay in tax.
But you still want them to have good incentives. If they can use the dividend to switch to solar or buy an electric car, you want them to do this, because that's the whole point.
Meanwhile there is no reason to charge profit-seeking enterprises more than the true cost of their usage, because all that's doing is inhibiting economically productive activity. Aluminum smelting uses a tremendous amount of electricity, but what you want is to cause them to switch to non-carbon electrical generation, not to shut down operations.
Because we already have the former and we don't need the latter.
A carbon tax with a dividend doesn't make life harder for lower income people, because they already have below-average energy consumption (wealthier people have bigger houses that need more heat etc.) and as a result the dividend would be larger than what they pay in tax.
But you still want them to have good incentives. If they can use the dividend to switch to solar or buy an electric car, you want them to do this, because that's the whole point.
Meanwhile there is no reason to charge profit-seeking enterprises more than the true cost of their usage, because all that's doing is inhibiting economically productive activity. Aluminum smelting uses a tremendous amount of electricity, but what you want is to cause them to switch to non-carbon electrical generation, not to shut down operations.
> A carbon tax with a dividend
Is not what was being proposed in the free-market fundamentalist post I was replying to.
> Meanwhile there is no reason to charge profit-seeking enterprises more than the true cost of their usage
But there might be if it's merely "burning energy for a new financial product", society might decide that it's not worth the carbon to have that around, regardless of tax, but that aluminium is a useful physical product.
We have differential taxes on all sorts of things, I don't see why they would be so wrong here.
But even given all that, my comment you're replying to was specifically adressing the "price should be the only indicator" assertions in the libertarian spiel above.
Is not what was being proposed in the free-market fundamentalist post I was replying to.
> Meanwhile there is no reason to charge profit-seeking enterprises more than the true cost of their usage
But there might be if it's merely "burning energy for a new financial product", society might decide that it's not worth the carbon to have that around, regardless of tax, but that aluminium is a useful physical product.
We have differential taxes on all sorts of things, I don't see why they would be so wrong here.
But even given all that, my comment you're replying to was specifically adressing the "price should be the only indicator" assertions in the libertarian spiel above.
> Is not what was being proposed in the free-market fundamentalist post I was replying to.
A carbon tax with a dividend is the free-market fundamentalist proposal. Markets require externalities to be priced and a dividend is the most economically efficient use of the revenue so generated.
> But there might be if it's merely "burning energy for a new financial product", society might decide that it's not worth the carbon to have that around, regardless of tax, but that aluminium is a useful physical product.
The way of determining which is pricing. If society values "new financial product" more than the cost of the energy, including the carbon tax, then it gets produced. If the carbon tax increases energy costs to the point that "new financial product" isn't viable in the market, it doesn't. Or it switches to non-carbon electrical generation at which point you can't blame them for climate change anymore and they're expediting the transition to renewable energy by financing the creation of generating capacity and increasing economies of scale.
A carbon tax with a dividend is the free-market fundamentalist proposal. Markets require externalities to be priced and a dividend is the most economically efficient use of the revenue so generated.
> But there might be if it's merely "burning energy for a new financial product", society might decide that it's not worth the carbon to have that around, regardless of tax, but that aluminium is a useful physical product.
The way of determining which is pricing. If society values "new financial product" more than the cost of the energy, including the carbon tax, then it gets produced. If the carbon tax increases energy costs to the point that "new financial product" isn't viable in the market, it doesn't. Or it switches to non-carbon electrical generation at which point you can't blame them for climate change anymore and they're expediting the transition to renewable energy by financing the creation of generating capacity and increasing economies of scale.
> A carbon tax with a dividend is the free-market fundamentalist proposal.
It's specifically not the one I was replying to -
"The correct allocation of energy should be based on the price people are willing to pay for the energy. Like any other commodity."
> The way of determining which is pricing.
It's not the only way, it's not even the only way that's employed right now in a lot of places, for instance we don't apply sales tax to items we deem 'essential' here in the UK, have a 5% rate for some things and 20% for 'luxuries'.
Price is not the only mechanism available, nor is it always the best one.
It's specifically not the one I was replying to -
"The correct allocation of energy should be based on the price people are willing to pay for the energy. Like any other commodity."
> The way of determining which is pricing.
It's not the only way, it's not even the only way that's employed right now in a lot of places, for instance we don't apply sales tax to items we deem 'essential' here in the UK, have a 5% rate for some things and 20% for 'luxuries'.
Price is not the only mechanism available, nor is it always the best one.
> "The correct allocation of energy should be based on the price people are willing to pay for the energy. Like any other commodity."
This is in no way inconsistent with the need to price externalities, which is the default assumption in free market theories. (Otherwise you have obvious problems with people dumping industrial waste into rivers etc.)
> It's not the only way, it's not even the only way that's employed right now in a lot of places, for instance we don't apply sales tax to items we deem 'essential' here in the UK, have a 5% rate for some things and 20% for 'luxuries'.
Just because somebody does something doesn't make it a good idea.
Things like that have counterintuitive economic consequences. See what subsidized student loans do to education prices. Is this what we want for "essential" goods?
If we do that, the tax rate has to be higher for non-"essential" goods in order to generate a given amount of revenue. Now you're into central planning to determine what's "essential" and what isn't. Is a laptop a luxury good? A poor person might need one. What about an electric car? Meanwhile every such decision of what to tax more is subject to lobbying and corruption.
If you want to help the poor, give them money. They know what's "essential" to them better than the bureaucracy does.
This is in no way inconsistent with the need to price externalities, which is the default assumption in free market theories. (Otherwise you have obvious problems with people dumping industrial waste into rivers etc.)
> It's not the only way, it's not even the only way that's employed right now in a lot of places, for instance we don't apply sales tax to items we deem 'essential' here in the UK, have a 5% rate for some things and 20% for 'luxuries'.
Just because somebody does something doesn't make it a good idea.
Things like that have counterintuitive economic consequences. See what subsidized student loans do to education prices. Is this what we want for "essential" goods?
If we do that, the tax rate has to be higher for non-"essential" goods in order to generate a given amount of revenue. Now you're into central planning to determine what's "essential" and what isn't. Is a laptop a luxury good? A poor person might need one. What about an electric car? Meanwhile every such decision of what to tax more is subject to lobbying and corruption.
If you want to help the poor, give them money. They know what's "essential" to them better than the bureaucracy does.
> This is in no way inconsistent with the need to price externalities, which is the default assumption in free market theories.
There's nothing in free markets that will make this happen without regulation, as evidenced by the fact that it so far hasn't happened.
> Just because somebody does something doesn't make it a good idea.
No, but it also doesn't make it impossible or something which can just be dismissed. There blatantly are mechanisms that can be used other than the ones you mentioned. You don't like them, that's not the same as them not existing.
However ridiculous you want to make the results - oh my god now you're into planning! - this already happens in quite a number of pretty successful countries, so it's clearly not some bizarre fantasy.
There's nothing in free markets that will make this happen without regulation, as evidenced by the fact that it so far hasn't happened.
> Just because somebody does something doesn't make it a good idea.
No, but it also doesn't make it impossible or something which can just be dismissed. There blatantly are mechanisms that can be used other than the ones you mentioned. You don't like them, that's not the same as them not existing.
However ridiculous you want to make the results - oh my god now you're into planning! - this already happens in quite a number of pretty successful countries, so it's clearly not some bizarre fantasy.
> There's nothing in free markets that will make this happen without regulation, as evidenced by the fact that it so far hasn't happened.
According to hardcore libertarian free market theory, polluting someone else's property without their permission is a violation of their property rights. In principle this would make it impractical to burn anything at all, because the combustion products go out into the air and spread to someone else's property without their permission. You would need the permission of everybody everywhere, for which they would want to extract payment.
Obviously that isn't how it's implemented in the US, but that's what the theory says should happen.
A carbon tax + dividend is a pragmatic alternative. The criticism of it is actually that it gives the polluters too much -- maybe someone thinks the tax isn't high enough and wants to demand more of the carbon emitters. By implementing the tax you're taking away their right to refuse to have their air polluted and hold out for higher payment from the carbon emitters.
> You don't like them, that's not the same as them not existing.
Nobody was claiming that implementations of bad ideas don't exist.
According to hardcore libertarian free market theory, polluting someone else's property without their permission is a violation of their property rights. In principle this would make it impractical to burn anything at all, because the combustion products go out into the air and spread to someone else's property without their permission. You would need the permission of everybody everywhere, for which they would want to extract payment.
Obviously that isn't how it's implemented in the US, but that's what the theory says should happen.
A carbon tax + dividend is a pragmatic alternative. The criticism of it is actually that it gives the polluters too much -- maybe someone thinks the tax isn't high enough and wants to demand more of the carbon emitters. By implementing the tax you're taking away their right to refuse to have their air polluted and hold out for higher payment from the carbon emitters.
> You don't like them, that's not the same as them not existing.
Nobody was claiming that implementations of bad ideas don't exist.
You're begging the question a bit there. I'm not at all convinced that the free market is the optimal method for allocating scarce resources, especially energy. Just look at how well that went in Texas earlier this year.
Subsidize certain usages of electricity then. Or pay for the first x units of electricity for each household.
Indeed, or make it punishingly expensive for some uses, which is tantamount to a ban.
That's the point - it's perfectly fine for a society to decide what energy can and can't be used for, because we don't live in a time when we have infinite, environmentally neutral power available to us.
That's the point - it's perfectly fine for a society to decide what energy can and can't be used for, because we don't live in a time when we have infinite, environmentally neutral power available to us.
If anything the regulatory solution would be to find the ways in which demand for cryptocurrency exists because of failures in the existing financial system, and fix them so that the existing financial system can satisfy them. Allow bank accounts that work exactly like coin wallets, but rely on the banking system rather than PoW.
An obvious example is the existence of pseudonymous digital payments. Given that cryptocurrency already exists, and will continue to exist for all illicit activities even if you ban it, you might as well let people open numbered accounts at a bank.
Do this for any other advantage cryptocurrency has over the existing banking system and there is no more demand for cryptocurrency. And without demand, the price crashes and people stop burning coal to mine it.
An obvious example is the existence of pseudonymous digital payments. Given that cryptocurrency already exists, and will continue to exist for all illicit activities even if you ban it, you might as well let people open numbered accounts at a bank.
Do this for any other advantage cryptocurrency has over the existing banking system and there is no more demand for cryptocurrency. And without demand, the price crashes and people stop burning coal to mine it.
If we are passing radical legislation that cuts across borders I'd much rather see a carbon/greenhouse gas tax.
We should impose a large tax on data centers for their massive energy usage to power such "valuable" resources like Twitter, Instagram and Facebook.
Who the fuck is gonna determine what is valuable?
A re-distributive carbon tax incentivizes efficiency, doesn't hit stuff like renewables and allows individuals to keep on choosing what they want to do with their life.
Just because you don't find facebook valuable doesn't mean that others feel the same way.
A re-distributive carbon tax incentivizes efficiency, doesn't hit stuff like renewables and allows individuals to keep on choosing what they want to do with their life.
Just because you don't find facebook valuable doesn't mean that others feel the same way.
Forget just the environmental issues. The price of commodity hardware for AI research is astronomical right now (try getting into deep learning right now, I dare you!). Crypto is directly trading off with AI research and game development.
Gary Larson: School for the gifted.
PoS is not just a more environmentally version of PoW. It is a lot more vulnerable to state level actors. If the state takes over / subverts / influences the limited number of stakeholders, then it is game over.
With PoW the state can influence the existing miners, but cannot prevent new independent miners to pop up and counter act.
With PoW the state can influence the existing miners, but cannot prevent new independent miners to pop up and counter act.
There are 141,139 validators active in Ethereum as we speak (source: https://beaconcha.in/), corrupting that many people is very difficult. There are smaller PoS systems with eg. tens of validators which are more susceptible to state capture.
Bitcoin (the network with the most mining effort) lost 25% of their hashing power due to blackouts in Xinjiang. (Soure: https://twitter.com/nic__carter/status/1384938089748041730?s...) State capture of a majority of Bitcoin miners is comparatively easy.
In addition, independent miners have less hardware and that hardware is generally less efficient when compared to the large ASIC farms. In reality a recovery would probably require social consensus and a hard fork
Bitcoin (the network with the most mining effort) lost 25% of their hashing power due to blackouts in Xinjiang. (Soure: https://twitter.com/nic__carter/status/1384938089748041730?s...) State capture of a majority of Bitcoin miners is comparatively easy.
In addition, independent miners have less hardware and that hardware is generally less efficient when compared to the large ASIC farms. In reality a recovery would probably require social consensus and a hard fork
Yeah, and the way they are issuing rewards means there's an incentive to split your validation across multiple nodes to increase your changes at getting rewards. Each one of these costs electricity to run both in terms of bandwidth and electricity.
And other methods introduce the possibility of stake grinding.
BOTH converge to the same energy usage as mining.
OTOH, the legacy financial system is significantly more energy intensive for a given financial network value. You don't think banks and wars in the middle east to maintain the value of the network have an environmental impact?
And other methods introduce the possibility of stake grinding.
BOTH converge to the same energy usage as mining.
OTOH, the legacy financial system is significantly more energy intensive for a given financial network value. You don't think banks and wars in the middle east to maintain the value of the network have an environmental impact?
Correct me if I'm wrong since I've only read the brief overview of how validators work on ethereum.org, but 141k validators doesn't mean anything when every validator is independent / anonymous and someone with 32k eth staked is actually one entity taking on the role of 1000 validators.
But that doesn’t mean all of those validators will be in the same voting committee, or that any of them will be selected to propose a new block.
Many of you in this thread need to read up on how the staking is designed to work.
Many of you in this thread need to read up on how the staking is designed to work.
The point is that the parent comment conflated validators with people, whereas one person or entity can control many validators. That doesn't say anything about it being better or worse than PoW, but it's disingenuous to claim that an attack needs to compromise so many individual people rather than potentially just a few entities that control vast quantities of eth.
Corrupting many people is easy if you are a superpower and can make laws that affect many people.
With PoW you can corrupt many miners, but the other superpowers can spawn new miners to counter act.
With PoW you can corrupt many miners, but the other superpowers can spawn new miners to counter act.
or you can fork and remove the bad actors, burning all their coins. good luck with their next attack. in contrast, you can't burn an attackers fleet of miners
What do you think a PoW change does when the PoW is being done by ASICs?
Slashing stake is significantly more arbitrary. You basically need to reset the coin's ledger in order for it to make any sense.
Slashing stake is significantly more arbitrary. You basically need to reset the coin's ledger in order for it to make any sense.
>What do you think a PoW change does when the PoW is being done by ASICs
It's only possible once, and this move is so obviously predictable any determined attacker is going to have gpus ready.
It's only possible once, and this move is so obviously predictable any determined attacker is going to have gpus ready.
Repeating "ultrasound money" memes. That specific meme has to do with state level attackers blowing up mining farms. It has nothing to do with changing issuance. And the entire premise is that an external force comes in and tries to co-opt it.
That isn't relevant to the conversation of stakers having misaligned incentives to change the rules. The most a state level actor can do is censor transactions if they were to take over a chain.
With PoS you'd need to slash the validators stake on a fork; which isn't going to happen because the stakers run the validators everyone is using. You already saw this with the steemit takeover.
In PoW coins, the miners and validating economic nodes are two separate groups. Watch what happens when exchanges slip over to Eth2 nodes and call it Eth.
During the BCHA/BCH split the exchanges were the ones that decided the ticker. Most users have ZERO CLUE about what happened. They went on their with their lives calling the fork the exchanges chose BCH. Once exchanges are validators there is no bulwark against changes.
That isn't relevant to the conversation of stakers having misaligned incentives to change the rules. The most a state level actor can do is censor transactions if they were to take over a chain.
With PoS you'd need to slash the validators stake on a fork; which isn't going to happen because the stakers run the validators everyone is using. You already saw this with the steemit takeover.
In PoW coins, the miners and validating economic nodes are two separate groups. Watch what happens when exchanges slip over to Eth2 nodes and call it Eth.
During the BCHA/BCH split the exchanges were the ones that decided the ticker. Most users have ZERO CLUE about what happened. They went on their with their lives calling the fork the exchanges chose BCH. Once exchanges are validators there is no bulwark against changes.
>With PoS you'd need to slash the validators stake on a fork; which isn't going to happen because the stakers run the validators everyone is using.
Sorry but I don't see your point here. A fork inherently requires action, it's enough to force a node to follow a different block from some height. At that point the attacker would get penalized for being offline. Outright deletion would require code modification. It's even possible to automate a minority fork in the case of censorship, although this capability doesn't exist yet.
>You already saw this with the steemit takeover.
Steem isn't even PoS, it's dPoS. Even in this case users successfully created a fork called Hive and removed Justin Sun's coins.
Sorry but I don't see your point here. A fork inherently requires action, it's enough to force a node to follow a different block from some height. At that point the attacker would get penalized for being offline. Outright deletion would require code modification. It's even possible to automate a minority fork in the case of censorship, although this capability doesn't exist yet.
>You already saw this with the steemit takeover.
Steem isn't even PoS, it's dPoS. Even in this case users successfully created a fork called Hive and removed Justin Sun's coins.
> The most a state level actor can do is censor transactions if they were to take over a chain.
Which is the exact thing state level actors want to do !
What is the use of crypto if the state can ban me or my country from it ? Isn’t that exactly what decentralisation was supposed to prevent ?
Which is the exact thing state level actors want to do !
What is the use of crypto if the state can ban me or my country from it ? Isn’t that exactly what decentralisation was supposed to prevent ?
The exact opposite is true. It's always possible for a state to obtain enough mining hardware - PoW is hopelessly insecure. It also has infinite economies of scale inevitably leading to absolute centralization even absent state attack. Once majority of hashrate is achieved, profits nearly double as minority can be censored. That's the inevitable end state of PoW.
PoS is resistant to state attacks because it would require buying up tokens on an impossible scale, and in the case an attack somehow succeeds a fork can be created that deletes the hostile stake. This can be repeated indefinitely. That's impossible in PoW more than once, once a gpu PoW gets attacked it's over.
PoS has no economies of scale, so contrary to PoW it can stay decentralized forever. There's no way to make existing stakers unprofitable by adding more nodes, like it's possible with mining hardware in PoW.
PoW is also vulnerable to takeover of existing miners because mining at scale requires big industrial warehouses with industrial power owned by registered companies. Impossible to hide. PoS can run on anonymous home nodes.
In every single security and decentralization aspect PoW is hopelessly inferior to PoS.
PoS is resistant to state attacks because it would require buying up tokens on an impossible scale, and in the case an attack somehow succeeds a fork can be created that deletes the hostile stake. This can be repeated indefinitely. That's impossible in PoW more than once, once a gpu PoW gets attacked it's over.
PoS has no economies of scale, so contrary to PoW it can stay decentralized forever. There's no way to make existing stakers unprofitable by adding more nodes, like it's possible with mining hardware in PoW.
PoW is also vulnerable to takeover of existing miners because mining at scale requires big industrial warehouses with industrial power owned by registered companies. Impossible to hide. PoS can run on anonymous home nodes.
In every single security and decentralization aspect PoW is hopelessly inferior to PoS.
> PoS is resistant to state attacks because it would require buying up tokens on an impossible scale
You don't need to buy the tokens. You make laws which the stakers have to follow, otherwise you seize their tokens for breaking the law. You can also use electronic warfare to steal the tokens of stakers outside your juridiction. If you are doing this as a big country such as USA/China, then other stakers might be tempted not to fork because a compromised system that works with those countries might still be more valuable than an uncompromised system that has not access to a large part of the world economy.
You don't need to buy the tokens. You make laws which the stakers have to follow, otherwise you seize their tokens for breaking the law. You can also use electronic warfare to steal the tokens of stakers outside your juridiction. If you are doing this as a big country such as USA/China, then other stakers might be tempted not to fork because a compromised system that works with those countries might still be more valuable than an uncompromised system that has not access to a large part of the world economy.
This is only enforceable against miners, not stakers. Stakers can trivially hide, miners can't.
>otherwise you seize their tokens for breaking the law.
that's not possible, there's no mechanism to seize eth. What can be trivially seized, though, are physical miners.
>otherwise you seize their tokens for breaking the law.
that's not possible, there's no mechanism to seize eth. What can be trivially seized, though, are physical miners.
Are there any proven PoS coins out there yet that have demonstrated resiliency under an attack? Honest question.
I don't know of any PoS coins that were attacked. Contrary to PoW, PoS is used for a very general category and differences between multiple versions are great. Many don't even have slashing making them a trust-based system (like Cardano) and I don't think they should be considered proof of stake - because without slashing nothing is actually at stake.
Additionally except for eth all have the fundamental problem of extremely centralized distribution. This [1] extreme centralization is representative of new VC coins. That tiny sliver of 'Coinlist (unlocked auction) 4.3%' is the only part that was available to non-insiders.
[1] https://icodrops.com/wp-content/uploads/2018/04/Solano-token...
Additionally except for eth all have the fundamental problem of extremely centralized distribution. This [1] extreme centralization is representative of new VC coins. That tiny sliver of 'Coinlist (unlocked auction) 4.3%' is the only part that was available to non-insiders.
[1] https://icodrops.com/wp-content/uploads/2018/04/Solano-token...
Yes, I'd be curious what some PoS coin experts have to say about the centralization concern of PoS, and how network security and uptime is guaranteed in a PoS network that doesn't have slashing.
I'm also wondering about the resiliency of PoS. The PoW used in Bitcoin has demonstrated resiliency against attacks, and none of the attacks have been successful so far, that I know of.
I'm also wondering about the resiliency of PoS. The PoW used in Bitcoin has demonstrated resiliency against attacks, and none of the attacks have been successful so far, that I know of.
>The PoW used in Bitcoin has demonstrated resiliency against attacks
Multiple PoW coins have been successfully attacked, like ETC. Because they are already on GPUs there's no fix - just hope it doesn't repeat. Those successful attacks prove that any attack on PoW is only a question of external resources (sha256 ASICs for btc).
It's also surprisingly hard to profit from a 51% attack on pure speculation coins like btc or etc because next to zero actual economic activity is happening on them, which is why such attacks were rare and small in scope. The best you can actually do is to try to double spend an exchange. If they were actually used for real commerce profit becomes much easier. It could also become a military goal - if Iran relied on a PoW-coin for its economy, blocking their coins would destroy their economy.
This is one of the reasons why ethereum absolutely must switch to PoS - PoW is extremely insecure for smart contracts because there are many more ways to profit from an attack, like censoring price updates for defi.
Multiple PoW coins have been successfully attacked, like ETC. Because they are already on GPUs there's no fix - just hope it doesn't repeat. Those successful attacks prove that any attack on PoW is only a question of external resources (sha256 ASICs for btc).
It's also surprisingly hard to profit from a 51% attack on pure speculation coins like btc or etc because next to zero actual economic activity is happening on them, which is why such attacks were rare and small in scope. The best you can actually do is to try to double spend an exchange. If they were actually used for real commerce profit becomes much easier. It could also become a military goal - if Iran relied on a PoW-coin for its economy, blocking their coins would destroy their economy.
This is one of the reasons why ethereum absolutely must switch to PoS - PoW is extremely insecure for smart contracts because there are many more ways to profit from an attack, like censoring price updates for defi.
I'm aware of the ETC attacks. I don't think ETC can really be compared to BTC though. The ETC network is composed of the idealistic (or maybe stubborn) folks who didn't want to switch over to the new ETH chain after the DAO hack. I'm not saying ETC has no merit, but it didn't have the same network resilience due to the split.
Seems like you know a lot about PoS, would you be willing to check out my other comments on this post (https://news.ycombinator.com/threads?id=swensel)? I've covered some concerns / questions that I have about PoS that maybe you can answer in more detail.
Seems like you know a lot about PoS, would you be willing to check out my other comments on this post (https://news.ycombinator.com/threads?id=swensel)? I've covered some concerns / questions that I have about PoS that maybe you can answer in more detail.
PoW can also fork.
It's not just miners, it's also full nodes that validate.
Full nodes can disagree with miners: instant fork.
If say Putin would acquire 51% of mining hash rate people would realize (before he gets there) and would fork.
My comment is not in support or against PoW, I'm just stating the fact that PoW isn't inherently unsafer than PoS.
It's not just miners, it's also full nodes that validate.
Full nodes can disagree with miners: instant fork.
If say Putin would acquire 51% of mining hash rate people would realize (before he gets there) and would fork.
My comment is not in support or against PoW, I'm just stating the fact that PoW isn't inherently unsafer than PoS.
That's only possible once - from asic PoW to a gpu/cpu PoW.
After that, if the fork becomes popular, the attacker moves and attacks it again. Are people supposed to fork once per week? At that point it's not PoW consensus anymore, because the interventions move from emergency to normal, and you're under something else.
After that, if the fork becomes popular, the attacker moves and attacks it again. Are people supposed to fork once per week? At that point it's not PoW consensus anymore, because the interventions move from emergency to normal, and you're under something else.
Don't forget the billionaire problem either.
Proof of Stake as setup gives all the power to people/companies who have large amounts of liquid assets.
Consider Amazon, they keep a rolling window of cash in-between when an item is sold and when the seller gets paid. This effectively gives them billions in interest-free capital. If this were Etherium, it would translate into huge amounts of voting power.
Likewise, if/when people deposit their etherium into banks, those banks can then leverage that "free" capital to grab huge voting stakes that wouldn't otherwise exist (because no person living paycheck to paycheck has the equivalent of 100k sitting around).
This leverage simply does not exist with proof of work.
Proof of Stake as setup gives all the power to people/companies who have large amounts of liquid assets.
Consider Amazon, they keep a rolling window of cash in-between when an item is sold and when the seller gets paid. This effectively gives them billions in interest-free capital. If this were Etherium, it would translate into huge amounts of voting power.
Likewise, if/when people deposit their etherium into banks, those banks can then leverage that "free" capital to grab huge voting stakes that wouldn't otherwise exist (because no person living paycheck to paycheck has the equivalent of 100k sitting around).
This leverage simply does not exist with proof of work.
What about ASIC resistant PoW? Should it be banned too?
Proof-of-work cryptocurrencies are in the process of banning themselves.
All that wasted energy is paid for by the holders, and proof-of-stake is just more financially attractive.
No government intervention is required IMO.
All that wasted energy is paid for by the holders, and proof-of-stake is just more financially attractive.
No government intervention is required IMO.
> All that wasted energy is paid for by the holders
Could you explain me what energy is "wasted" in Proof-of-Work and also how the people currently holding the cryptocurrency is paying for that "waste"?
AFAIK, the same number of blocks are made no matter how many transactions are being made or how many holders there are (or how much each holder "holds"), so the energy consumption of Bitcoin remains more or less the same during an hour, only slowly rising as more miners get on-boarded. But the energy consumption of those brought online remains the same over the lifetime of the miner instance itself.
Could you explain me what energy is "wasted" in Proof-of-Work and also how the people currently holding the cryptocurrency is paying for that "waste"?
AFAIK, the same number of blocks are made no matter how many transactions are being made or how many holders there are (or how much each holder "holds"), so the energy consumption of Bitcoin remains more or less the same during an hour, only slowly rising as more miners get on-boarded. But the energy consumption of those brought online remains the same over the lifetime of the miner instance itself.
So burning electricity on running a cryptocurrency is not right, but burning electricity on running servers for Facebook or user tracking is all right? If that's the case, who's the arbiter of what's "too much" power for a use case?
If that's not the case, how do you propose to enforce that all use cases use less electricity, and how do you punish those who use too much?
If that's not the case, how do you propose to enforce that all use cases use less electricity, and how do you punish those who use too much?
We have such a system for appliances already, energy star. And we do restrict the manuf and sale of appliances that can't meet those goals. Same for cars.
The government can simply pass a law. There are far bigger injustices. Why do I pay taxes and Facebook doesn‘t?
FB pays insane amounts of taxes. Employment taxes, property taxes, etc. Not to mention taxes on any profits.
As a percentage of their profit? Let me check. Around here small businesses pay around 30%, individuals can pay up to 45%. I doubt Facebook pays that.
The tax avoidance schemes in Europe are well documented for all tech companies.
And what do you mean by employment taxes? Just the employers part of the income tax?
The tax avoidance schemes in Europe are well documented for all tech companies.
And what do you mean by employment taxes? Just the employers part of the income tax?
Why would a company pay the same tax rate as a person? A company pays a tax rate of x% because that income is also taxed when they distribute it to individuals. Thus we've built a system that incentivizes them to invest it back in the company (doesn't always work - but that was the intent).
So 21% + 15% to 20% capex on individuals = a tax rate around the same.
Now, if you really want to look at the big picture, look at a company's tax rate of 21% on profits, but they also pay taxes on employees of ~21% of salary in the USA not to mention health care (which in europe would be included as taxes so maybe in Europe 46% to 50%). So if payroll is 40% of your costs that is another 8.4% of taxes added in there. And, you can probably add health care as a tax as well.
Legal tax avoidance is legal. I hate when people bitch about companies doing legal maneuvers. It is very easy to stop that, apply a tax on gross receipts for all income created in the country.
Washington State does that for example if you have a company operating in their state.
So 21% + 15% to 20% capex on individuals = a tax rate around the same.
Now, if you really want to look at the big picture, look at a company's tax rate of 21% on profits, but they also pay taxes on employees of ~21% of salary in the USA not to mention health care (which in europe would be included as taxes so maybe in Europe 46% to 50%). So if payroll is 40% of your costs that is another 8.4% of taxes added in there. And, you can probably add health care as a tax as well.
Legal tax avoidance is legal. I hate when people bitch about companies doing legal maneuvers. It is very easy to stop that, apply a tax on gross receipts for all income created in the country.
Washington State does that for example if you have a company operating in their state.
If Statistia is to be believed, Facebook consumes 22x less energy than Bitcoin. 5 vs 110 Terawatt hours.
And Bitcoin is hardly used for any transactions, and its energy usage will increase linearly with BTC price.
(If someone has a direct source that would be great. Statista is not good)
Update: seems the FB figure is correct, for 2019: https://sustainability.fb.com/report-pages/renewable-energy/
And Bitcoin is hardly used for any transactions, and its energy usage will increase linearly with BTC price.
(If someone has a direct source that would be great. Statista is not good)
Update: seems the FB figure is correct, for 2019: https://sustainability.fb.com/report-pages/renewable-energy/
Why does the energy moves with the price? Is it because of increased number of transactions?
No, it's because competition between miners necessarily drives the hash rate and thus energy usage to scale up with the value of mining rewards and transaction fees.
But if there aren't more transaction (as number of transactions), what happens when the hash rate increases? They hash incomplete blocks of transactions? Or does the same block gets confirmed by a greater number of miners?
The second answer, although there is only one "winner" of each block's competition, so it's only one miner/mining pool which ends up confirming a transaction. It's controlled by a hardness parameter that's readjusted automatically in a regular fashion.
Miners tend to increase their hashrate because that's how they compete for block rewards. However, the electrical energy a miner spends on finding blocks should not be more than the value of the block rewards, otherwise they would operate at a loss. This provides a ceiling for the energy expenditure.
Therefore, if the price of Bitcoin doubles, miners can afford to burn twice as much electricity. (Roughly. This is a simplification of course.)
Therefore, if the price of Bitcoin doubles, miners can afford to burn twice as much electricity. (Roughly. This is a simplification of course.)
Why is proof of waste needed at all? What do you achieve by proving that you have wasted a certain amount of electricity?
Because the chain of transactions with the most accumulated waste is chosen as the "correct" chain. In order to double-spend, you have to cause a different chain to be the "correct" chain, so you'll have to waste even more energy than has been wasted by everybody else, over whatever span of time you're trying to roll back. Thus the more waste, the more secure the chain.
Proof of stake is a newer way of coming to consensus on one correct chain. It took people a while to figure out how to do it securely and efficiently.
Proof of stake is a newer way of coming to consensus on one correct chain. It took people a while to figure out how to do it securely and efficiently.
Okay, so the chain of transactions that is regarded as correct is the one that has been more expensive to create. Instead of wasting energy, the same result could be achieved by wasting other stuff, such as bitcoins themselves, for instance?
Sure. In fact, that's almost how Ethereum's proof-of-stake works, except it has a protocol that comes to consensus without wasting anything as long as people follow the rules, and only destroys stake when someone provably breaks the rules.
If this is true, PoW is simply a stupid version of PoS and should be abandoned immediately.
If one didn't need to prove they'd done something difficult, then cryptocurrency didn't be a workable idea.
Why do they have to prove that they'd done something difficult? That's what I'm trying to understand.
But maybe Bitcoin is of 1000x(+) more value for humanity in the long run?
Whatever humanity is left after the climate crisis bitcoin is significantly contributing to.
Bitcoin uses far less energy than the gold or banking industry, uses more and more renewable energy every day and has some significant game theory going on regarding renewable usage and research.
I'm aghast that Facebook burns that much power to run what is basically a giant BBS. I guess mining all of our personal data must take up an outrageous number of computer cycles.
However, in Facebook's defense it's per-user per-transaction energy costs are going to be much lower than Bitcoin.
However, in Facebook's defense it's per-user per-transaction energy costs are going to be much lower than Bitcoin.
FB is a top video streaming platform. Also they run WhatsApp, which I think is the largest global telephony system.
> I'm aghast that Facebook burns that much power to run what is basically a giant BBS. I guess mining all of our personal data must take up an outrageous number of computer cycles.
Did Ye Olde BBS support 1:millions broadcasting, and real-time viewing of high-definition video? Uploading and viewing thousands of high-quality photos?
Calling Facebook 'basically a giant BBS' is a lot like saying 'Oh, I could build Twitter in a weekend'.
Did Ye Olde BBS support 1:millions broadcasting, and real-time viewing of high-definition video? Uploading and viewing thousands of high-quality photos?
Calling Facebook 'basically a giant BBS' is a lot like saying 'Oh, I could build Twitter in a weekend'.
It depends on what is counted there. It might be the total operations of the company. Offices, AC for offices and whatnot.
Especially when talking about CO2 emissions absolutely everything is included, including plane trips and whatnot.
Especially when talking about CO2 emissions absolutely everything is included, including plane trips and whatnot.
Seems a bit disingenuous to compare that to just the kWh consumed by the ASICs that mine Bitcoin.
It definitely is. Either that, or it's incredibly short-sighted.
That comparison ignores the actual value add of Facebook and the fact that people are using it. Most BTC trades happen off blockchain and are powered by the servers of the market places and nobody really knows how much energy they use.
That comparison ignores the actual value add of Facebook and the fact that people are using it. Most BTC trades happen off blockchain and are powered by the servers of the market places and nobody really knows how much energy they use.
That's true. But in a way it just emphasizes how much energy Bitcoin wastes, so it's fine-ish.
If Facebook has a value add, then so do columbian drug lords
I think the proposal here is very simple. Pass a law against proof of work crypto currencies, don't let perfect be the enemy of good, and deal with the next big waste of power when it comes about by passing a law about it.
Don't address of any the things that you are proposing need addressing, because they don't need to be addressed in the same law, or really addressed right now at all.
The law doesn't need to try and anticipate the actions that occur in the future, we will still have a legislature in the future capable of addressing the future when it comes about. The law needs to address the actions of today.
Don't address of any the things that you are proposing need addressing, because they don't need to be addressed in the same law, or really addressed right now at all.
The law doesn't need to try and anticipate the actions that occur in the future, we will still have a legislature in the future capable of addressing the future when it comes about. The law needs to address the actions of today.
You answered literally nothing that the person you're responding to asked.
You are right.
Instead, they explained why these questions are (partially) misguided.
That's also an answer.
Instead, they explained why these questions are (partially) misguided.
That's also an answer.
They didn't do that either. It reads more like avoidance. The semblance of an answer by posting anything, rather than a plain, direct response. Which gives the original questions more weight: why were they not able to be responded to directly? Are the questions potent? Your reply here is just shifty on shifty.
You really don't understand the problem with asking questions like "well who decides?!?" To literally every proposal of legislation ever?
Because that is what always happens. Every time someone make s a general proposal, for any law at all, there are people making the same old, dumb argument, of "well who decides?!?" Every single time.
Sure you do not believe that all laws ever are wrong, right?
Because the answer to this dumb question is the same as for every law ever. That makes it valid, unless you believe that all laws ever are bad.
Because that is what always happens. Every time someone make s a general proposal, for any law at all, there are people making the same old, dumb argument, of "well who decides?!?" Every single time.
Sure you do not believe that all laws ever are wrong, right?
Because the answer to this dumb question is the same as for every law ever. That makes it valid, unless you believe that all laws ever are bad.
I don't understand. We clearly have general laws like "don't shoot people," rather than 320 million individual laws like "John Edmund Smith IV of Springfield, Ohio cannot shoot people." And we didn't start with laws targeting individuals and then broaden it later. "Don't shoot people" was the proper, general rule that addresses the problem of shootings. Laws like this seem to be pretty effective and desirable. I don't know why we wouldn't take the same approach with something like carbon emissions.
> And we didn't start with laws targeting
There are absolutely many laws, that are very targeted and specific. Were you unaware of this?
For a random example, there are laws that probably say something like "A truck, of this size, must follow these specific environmental regulations".
That would be a specific law, that applies to a truck, and required it to do a specific thing, like have a certain mileage efficiency, and it is not general. It is pretty specific, and it is not a general law that applies to all environmental related things.
The world is full of many specific laws, all over the place.
There are absolutely many laws, that are very targeted and specific. Were you unaware of this?
For a random example, there are laws that probably say something like "A truck, of this size, must follow these specific environmental regulations".
That would be a specific law, that applies to a truck, and required it to do a specific thing, like have a certain mileage efficiency, and it is not general. It is pretty specific, and it is not a general law that applies to all environmental related things.
The world is full of many specific laws, all over the place.
They answered it. The person they were responding to was trying to broaden the scope too much. Many laws purposely have narrow scopes in order to handle problems that arise without setting too much precedent.
They did not answer it. "Broaden the scope too much" - why? The question seems completely appropriate if you're actually trying to solve the climate problem. The response didn't address this, it targets crypto specifically, which makes it seem like the motivations are not climate but something else.
The question was about how to choose who is using too much and how, and the response was basically "don't think about it, we will exist in the future and can think about it then." But we exist now. And even if we were to wait, it's still a question we can answer now to have enacted later. The response provided was a bypass, a non-answer.
The question was about how to choose who is using too much and how, and the response was basically "don't think about it, we will exist in the future and can think about it then." But we exist now. And even if we were to wait, it's still a question we can answer now to have enacted later. The response provided was a bypass, a non-answer.
> The law doesn't need to try and anticipate the actions that occur in the future
That's an incredibly dangerous idea.
That's an incredibly dangerous idea.
Bitcoin is an incredibly dangerous idea because of its contributions to the climate crisis.
Bitcoin does not consume fossil fuel as a raw material; it is not an ingredient required for its operation. It uses electricity which can be generated from any source, be it wind, solar, or coal.
Subsidized coal mining and untaxed carbon emissions are dangerous ideas.
Subsidized coal mining and untaxed carbon emissions are dangerous ideas.
Gratuitous use of electricity is anti-economical regardless of the source.
Electricity has higher economic value due to miners seeking to maximize profits.
This makes investments in renewable energy infrastructure more profitable and paid off sooner. A solar farm has more demand and higher margin for its products.
On the other hand, it means cheap coal energy is also financially productive.
What is anti-economical is the unfair price competition due to externalities not captured by coal energy's pricing.
This makes investments in renewable energy infrastructure more profitable and paid off sooner. A solar farm has more demand and higher margin for its products.
On the other hand, it means cheap coal energy is also financially productive.
What is anti-economical is the unfair price competition due to externalities not captured by coal energy's pricing.
"gratuitous use" is completely subjective, so the anti-economical assertion isn't provable. You're suggesting there are no trade-offs between PoS and PoW, no tradeoffs between solar+batteries vs coal or nuclear.
Yes, I'm saying there are no trade-offs between PoS and PoW. If there's one I'd like to know what it is.
PoS can be easily copied and modified by the powerful. There's little cost to create the system and force adoption rather than incentivize. There's an enormous amount of investment and technology dedicated to bitcoin that makes it more resistant to devaluation and duplication. But it saves electricity. That's the trade-off.
Why not focus on the source of the electricity rather than what the electricity is used for?
Why not focus on the source of the electricity rather than what the electricity is used for?
I don't see how proof-of-waste makes bitcoin more resistant to devaluation and duplication. How would switching to proof-of-stake make bitcoin more prone to devaluation, for instance? As far as duplication is concerned, bitcoin is open-source software which means anyone can duplicate it and make derivative works from it. There are dozens of bitcoin clones. It doesn't seem that bitcoin is resistant to duplication at all, or that there is any reason the lack of difficulty with which it can be duplicated should be influenced by whether it uses proof-of-waste or proof-of-stake.
Any software engineer can clone Twitter. The value of it is in the network and the high cost of users switching because they can't convince the people they follow and those who follow them to switch at once. The same applies to Bitcoin, but miners have an even higher cost of switching because they have specialized hardware that can only generate revenue on the Bitcoin network. Ethereum validators have a much lower cost to switch.
> proof-of-waste
It's Proof of Work. Productive work has value and in this case, it's widely distributed censorship-resistant validation of transactions.
> proof-of-waste
It's Proof of Work. Productive work has value and in this case, it's widely distributed censorship-resistant validation of transactions.
It's not even 1% of global energy consumption. Surely there are far more dangerous things to worry about out there.
Isn't it still quite insane that around 0.5% of our global energy usage is spent on bitcoin, though?
Is it? Over time human energy creation and consumption has grown exponentially with technological innovation. Fire to cook meat, a wagon attached to an ox, combustion engines, air conditioning, wireless networks, data centers, etc.
Today you probably consume more energy in a few days than your ancestors whole lives.
Now, we've created distributed, immutable property, something that has never existed before. It turns electricity into value storage. What is the "correct" amount of energy for humans to spend on such a thing?
Today you probably consume more energy in a few days than your ancestors whole lives.
Now, we've created distributed, immutable property, something that has never existed before. It turns electricity into value storage. What is the "correct" amount of energy for humans to spend on such a thing?
> What is the "correct" amount of energy for humans to spend on such a thing?
Perhaps the "correct" amount is less than what it would take to increase planet temperature by 4°C?
Perhaps the "correct" amount is less than what it would take to increase planet temperature by 4°C?
Energy consumption has nothing to do with increasing planet temperature, if Bitcoin consumed 10x the energy via solar panels, it would not have any environmental impact beyond the raw materials used in the panels.
You're equating energy usage to carbon emissions, but you should be able to distinguish the difference.
You're equating energy usage to carbon emissions, but you should be able to distinguish the difference.
> Energy consumption has nothing to do with increasing planet temperature,
As long as we're using fossil fuels, planet temperature does in fact have something to do with energy consumption. You seem to be arguing that because renewable energy sources exists, Bitcoin has nothing to do with fossil fuel emissions. However, that is false, as 8% of Bitcoin mining happens in Inner Mongolia, which is home to many of China's large coal mines[0].
[0]: https://www.independent.co.uk/life-style/gadgets-and-tech/bi...
As long as we're using fossil fuels, planet temperature does in fact have something to do with energy consumption. You seem to be arguing that because renewable energy sources exists, Bitcoin has nothing to do with fossil fuel emissions. However, that is false, as 8% of Bitcoin mining happens in Inner Mongolia, which is home to many of China's large coal mines[0].
[0]: https://www.independent.co.uk/life-style/gadgets-and-tech/bi...
I'm arguing that China subsidizes coal[0], and that China does not utilize a carbon tax[1].
So when you call for a ban of Bitcoin in the name in environmental concerns, you've decided to be the arbiter of energy usage, on what is productive and valuable, and what is not.
You're welcome to argue your points, but it would still be far more efficient and productive to addresses the actual core problem: coal fire plants, and energy prices.
[0]: https://www.iisd.org/gsi/faqs/china
[1]: https://www.carbontax.org/issues/what-about-china/
So when you call for a ban of Bitcoin in the name in environmental concerns, you've decided to be the arbiter of energy usage, on what is productive and valuable, and what is not.
You're welcome to argue your points, but it would still be far more efficient and productive to addresses the actual core problem: coal fire plants, and energy prices.
[0]: https://www.iisd.org/gsi/faqs/china
[1]: https://www.carbontax.org/issues/what-about-china/
How much energy maintains the USD's reserve status?
According to some other comment on this thread:
> a bunch of aircraft carriers and planes and bombs and people with big guns, which gives the ability to say (credibly) that it is a crime to forge dollars no matter who you are or where you live
Cryptocurrency offers all this and more for a fraction of the price.
> a bunch of aircraft carriers and planes and bombs and people with big guns, which gives the ability to say (credibly) that it is a crime to forge dollars no matter who you are or where you live
Cryptocurrency offers all this and more for a fraction of the price.
Bitcoin? Yes, it's a useless coin. I wouldn't mind even higher amounts of energy being spent on Monero though.
It's good that Ethereum is moving to proof of stake. Not because of some environmental impact though. Mining is just really expensive, it results in huge fees making the coin almost unusable for normal people.
It's good that Ethereum is moving to proof of stake. Not because of some environmental impact though. Mining is just really expensive, it results in huge fees making the coin almost unusable for normal people.
100% Monero is amazing. 1500+tps and it's just getting started. Faster transaction speeds, privacy, just awesome!
Yeah. It's essentially a perfected version of bitcoin. It should be the number one currency.
How much of our global energy usage is spent on poorly implemented ACPI code, Windows drivers, inefficient GPU drivers, etc...
Even better, how much energy is wasted per page view due to inefficient frontend web frameworks?
Seems to me that code is speech, and restricting what one can and can't do with silicon that one owns is absolutely ridiculous.
Even better, how much energy is wasted per page view due to inefficient frontend web frameworks?
Seems to me that code is speech, and restricting what one can and can't do with silicon that one owns is absolutely ridiculous.
It's using more energy than most countries:
> Current estimates put bitcoin’s energy requirements at around 130 terawatt-hours (TWh) annually, which would rank it in the top 30 electricity consumers worldwide if it were a country.
Source: https://www.independent.co.uk/life-style/gadgets-and-tech/bi...
> Current estimates put bitcoin’s energy requirements at around 130 terawatt-hours (TWh) annually, which would rank it in the top 30 electricity consumers worldwide if it were a country.
Source: https://www.independent.co.uk/life-style/gadgets-and-tech/bi...
Not even 1%. The USA alone pollutes a ton more and is always utterly unapologetic about it. Historically I don't think they ever adhered to any global effort or treaty to reduce pollution. You have big entrenched organizations such as the oil industry doing far more damage and nobody messes with them. Not to mention the entire developed world's dependency on China for their borderline useless cheap consumer products.
This concern over the environmental impact of cryptocurrencies is utterly laughable when you figure out the real source of these problems. I guess they're just too powerful to be messed with.
This concern over the environmental impact of cryptocurrencies is utterly laughable when you figure out the real source of these problems. I guess they're just too powerful to be messed with.
> Nobody messes with them.
Well, some environmental activists try by turning off oil valves[0], just like environmental activists are upset with Bitcoin.
> You have big entrenched organizations such as the oil industry doing far more damage.
People who criticize Bitcoin for its environmental impact don't give a pass to oil companies. The issues overlap, like in Texas where they plug Bitcoin mining rigs straight into the oil well[1].
But I hear you. All big entrenched organizations must be held accountable. Of course.
[0]: https://abcnews.go.com/International/wireStory/companies-dec...
[1]: https://www.independent.co.uk/climate-change/news/bitcoin-mi...
Well, some environmental activists try by turning off oil valves[0], just like environmental activists are upset with Bitcoin.
> You have big entrenched organizations such as the oil industry doing far more damage.
People who criticize Bitcoin for its environmental impact don't give a pass to oil companies. The issues overlap, like in Texas where they plug Bitcoin mining rigs straight into the oil well[1].
But I hear you. All big entrenched organizations must be held accountable. Of course.
[0]: https://abcnews.go.com/International/wireStory/companies-dec...
[1]: https://www.independent.co.uk/climate-change/news/bitcoin-mi...
The problem isn't even bitcoin mining, it's pollution. The energy usage wouldn't matter at all if it was generated via renewable sources such as solar.
People who want to see real change need to deal with fossil fuels. Taxing mining operations will do absolutely nothing to solve the actual problems of this world.
People who want to see real change need to deal with fossil fuels. Taxing mining operations will do absolutely nothing to solve the actual problems of this world.
[deleted]
it's not 1% of energy consumption... yet
there's every incentive for it to keep growing forever, which is what makes it dangerous
vs. there's only so much ice cream people can eat
there's every incentive for it to keep growing forever, which is what makes it dangerous
vs. there's only so much ice cream people can eat
> Pass a law against proof of work crypto currencies
once again, you have merely just assumed the role of arbitor. What makes this opinion better than the opposition?
What needs to be addressed isn't energy usage, but the cost of energy in the first place. Why isn't the fix be passing a law to tax carbon properly? Tax the externalities, and the rest would follow. I don't care if people burn up energy for crypto, as long as they pay for the cost properly.
once again, you have merely just assumed the role of arbitor. What makes this opinion better than the opposition?
What needs to be addressed isn't energy usage, but the cost of energy in the first place. Why isn't the fix be passing a law to tax carbon properly? Tax the externalities, and the rest would follow. I don't care if people burn up energy for crypto, as long as they pay for the cost properly.
> once again, you have merely just assumed the role of arbitor. What makes this opinion better than the opposition?
This is literally the role of legislators. What makes "my" opinion better, is in the event that this sort of legislation passed, the majority of the elective representatives in both houses agree we should ban proof of work crytpo currencies, nothing less, nothing more.
> [alternative proposal]
I mean, I happen to like this proposal too, but you haven't given any reason not to do both...
This is literally the role of legislators. What makes "my" opinion better, is in the event that this sort of legislation passed, the majority of the elective representatives in both houses agree we should ban proof of work crytpo currencies, nothing less, nothing more.
> [alternative proposal]
I mean, I happen to like this proposal too, but you haven't given any reason not to do both...
I think OP is suggesting that a targeted ban on proof of work crypto will be more politically feasible -- particularly in the US -- than a carbon tax. Even the state of Washington (which is far more left/democratic/liberal than the US as a whole) failed to pass two different modest carbon taxes in recent years.
So while carbon pricing would be a more ideal solution, OP is suggesting that a targeted ban on POW crypto is a good-enough bandaid that might actually pass.
So while carbon pricing would be a more ideal solution, OP is suggesting that a targeted ban on POW crypto is a good-enough bandaid that might actually pass.
> What makes this opinion better than the opposition?
Nothing about the opinion is better than any other. But the only thing we have to achieve is that it is a majority opinion, which frankly doesn’t seem all that hard to me.
Nothing about the opinion is better than any other. But the only thing we have to achieve is that it is a majority opinion, which frankly doesn’t seem all that hard to me.
> Pass a law against proof of work crypto currencies, don't let perfect be the enemy of good, and deal with the next big waste of power when it comes about by passing a law about it.
If we won't legislate it now, it's possible we won't get a chance to do it later thanks to bickering from lobbyists and fossilised laws and practices. See IPv4.
If we won't legislate it now, it's possible we won't get a chance to do it later thanks to bickering from lobbyists and fossilised laws and practices. See IPv4.
You seem to be proposing that not passing a law against proof of work cryptocurrencies somehow makes it more likely that we will quickly pass a law generally "solving the climate issues" ... I think that is highly unlikely, and in fact I think the opposite direction is more likely, that passing a law banning PoW cryptocurrencies makes us more likely to pass another law which solves climate issues in other ways.
Banning PoW cryptocurrencies is not a big enough priority for anyone that it will be a motivating factor to move past the other issues surrounding the climate debate, especially not anyone on the side of "don't do [thing] to fix the problem". I don't see any other mechanism by which it makes passing other climate legislation harder.
Banning PoW cryptocurrencies removes money that is currently on the side of "don't pass climate legislation because it will harm my PoW cryptocurrency business" from the table. That makes passing future legislation easier.
In general, trying to solve all the worlds problems at once doesn't work. It's too complex, you paralyze the decision making body with too many tradeoffs. When something is obviously bad, banning it immediately not only has the effect of meaning it's gone immediately (and doesn't hang around until you solve the whole problem), but it simplifies the remaining problem for the decision making body. This makes them more likely to come to a consensus on exactly what to do in a finite amount of time.
Banning PoW cryptocurrencies is not a big enough priority for anyone that it will be a motivating factor to move past the other issues surrounding the climate debate, especially not anyone on the side of "don't do [thing] to fix the problem". I don't see any other mechanism by which it makes passing other climate legislation harder.
Banning PoW cryptocurrencies removes money that is currently on the side of "don't pass climate legislation because it will harm my PoW cryptocurrency business" from the table. That makes passing future legislation easier.
In general, trying to solve all the worlds problems at once doesn't work. It's too complex, you paralyze the decision making body with too many tradeoffs. When something is obviously bad, banning it immediately not only has the effect of meaning it's gone immediately (and doesn't hang around until you solve the whole problem), but it simplifies the remaining problem for the decision making body. This makes them more likely to come to a consensus on exactly what to do in a finite amount of time.
> Banning PoW cryptocurrencies removes money that is currently on the side of "don't pass climate legislation because it will harm my PoW cryptocurrency business" from the table. That makes passing future legislation easier.
Does it? And, do you have data that backs this up? It stands to reason to me that PoW miners only want cheap power; they don't really care too much how it gets generated. Considering that the cheapest power source you can build out today is green energy, it sounds like a win-win to me for them to put their money into "advocate for more cheap power."
Does it? And, do you have data that backs this up? It stands to reason to me that PoW miners only want cheap power; they don't really care too much how it gets generated. Considering that the cheapest power source you can build out today is green energy, it sounds like a win-win to me for them to put their money into "advocate for more cheap power."
> don't let perfect be the enemy of good
I don't think this applies to laws. In fact, I'd claim the opposite. Laws are something you REALLY want to get right
I don't think this applies to laws. In fact, I'd claim the opposite. Laws are something you REALLY want to get right
It applies to laws in the sense being discussed here. Ban X which is really bad while not banning Y which is totally unrelated but happens to be bad in the same way. Why does that need to be perfectly right?
> The law doesn't need to try and anticipate the actions that occur in the future
But that’s exactly what the law should do...
But that’s exactly what the law should do...
IDK in Germany it's forbidden per § 30 StVO to drive around senselessly inside settlements. You are still allowed to drive around, even if the reasons are stupid. But if they are too stupid, police can fine you. There is a youtuber in Berlin who specializes in driving around for hours and he's been stopped by police already. The original video has been made private [0], but a raw version of it still exists [1].
[0]: https://www.youtube.com/watch?v=ZLozreFvl24
[1]: https://www.youtube.com/watch?v=8LfccX_pBHM
[0]: https://www.youtube.com/watch?v=ZLozreFvl24
[1]: https://www.youtube.com/watch?v=8LfccX_pBHM
Is the reason for the law to reduce the number of cars on the road or is it more to reduce emissions?
I'm curious if someone driving an electric would get ticketed as well.
I'm curious if someone driving an electric would get ticketed as well.
It's mainly to reduce emissions and to protect the local environment. The paragraph also more generally states that you have to "prevent unnecessary noise pollution and emissions", which as we learn in driving school also means shutting off your motor when sitting at a red light.
So at redlights you need to turn off your car, then turn it back on when it changes to green
EDIT: Specify the part of the post that bewildered me.
EDIT: Specify the part of the post that bewildered me.
Many recent car models do this by themselves nowadays.
https://en.wikipedia.org/wiki/Start-stop_system#History
https://en.wikipedia.org/wiki/Start-stop_system#History
Huh, that is really cool. Never heard of it.
Thanks for the information.
Thanks for the information.
> So burning electricity on running a cryptocurrency is not right, but burning electricity on running servers for Facebook or user tracking is all right?
Spinning up cores to do intensive math for the sake of its difficulty is wasting energy by design. PoW's financial incentive is to waste power.
Facebook spends a massive amount of money on compute, and their profit is only as good as the margin they can make over that compute cost. Therefore they have a financial incentive to save power.
Spinning up cores to do intensive math for the sake of its difficulty is wasting energy by design. PoW's financial incentive is to waste power.
Facebook spends a massive amount of money on compute, and their profit is only as good as the margin they can make over that compute cost. Therefore they have a financial incentive to save power.
Yes. The latter has value whereas the former is just dumb as green cryptocurrencies exist.
Facebook actively makes the world a worse place in every way -- be it be providing a captive audience for authoritarian governments to push their propaganda, for surveillance states to collect and build models to control humanity, or trying to control the flow of money and implement economic censorship on Earth via Diem.
Agree to disagree
The arbiter is "if you build something that is build to be as inefficient as possible by design that's forbidden". I can't think of anything other than PoW that matches this.
Burning gasoline to drive somewhere is fine, but (at least in my city) sitting parked with your engine running incurs a fine.
Fundamentally it's become too big a waste to ignore, like so many other things. We banned incandescent bulbs, we can ban proof-of-waste, which is basically an incandescent bulb that never illuminates anything.
Fundamentally it's become too big a waste to ignore, like so many other things. We banned incandescent bulbs, we can ban proof-of-waste, which is basically an incandescent bulb that never illuminates anything.
Why do HN comment threads always end up as Pedantry Pageants where all ye who dare comment must address all the fucking edge cases or be called out by the immediate first child comment about failing to do so. It's SO trite, predictable, wearisome and boring. It always follows the same pattern too. "Where do you draw the line?" "Who decides what's the truth?" Always the same fucking slippery slope fallacy. Every fucking time "Regulations" of any kind come up. I think the HN audience wears Being Anal as a kind of badge of honour.
To paraphrase Alan Watts slightly, do you know of a law that set everything to right? Let's just all sit around twiddling our thumbs eh? Since you obviously didn't really offer a counter solution.
To paraphrase Alan Watts slightly, do you know of a law that set everything to right? Let's just all sit around twiddling our thumbs eh? Since you obviously didn't really offer a counter solution.
"Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize. Assume good faith."
https://news.ycombinator.com/newsguidelines.html
Perhaps it's not idle pedantry to observe that many of those who are angry about crypto energy usage couldn't care less about the energy wasted and pollution generated by other endeavors.
It's like an uncle of mine who is outraged that mosques get tax exemptions, but he doesn't care that churches get tax exemptions.
Clearly tax policy isn't a genuine concern for him. He's angry about something else that he won't say out loud.
https://news.ycombinator.com/newsguidelines.html
Perhaps it's not idle pedantry to observe that many of those who are angry about crypto energy usage couldn't care less about the energy wasted and pollution generated by other endeavors.
It's like an uncle of mine who is outraged that mosques get tax exemptions, but he doesn't care that churches get tax exemptions.
Clearly tax policy isn't a genuine concern for him. He's angry about something else that he won't say out loud.
I wish there was a better name for an "order of magnitude fallacy" (but given Roman numerals I can understand why they probably didn't have a fun Latin name for an order of magnitude problem), because we seem to be seeing them all the time right now.
Industrial production of greenhouse gases is nearly an order of magnitude larger than consumer production, but often inordinately the "guilt" burden is pushed to the consumers: Do you have an EV? Have you changed all your light bulbs to more efficient LEDs? Are you Vegan enough?
Here too: Bitcoin alone has risen to an order (or three) of magnitude more energy consumption than Facebook could ever use/do ever use to track people. (Cumulative, the rest of cryptocurrencies only further dwarf Facebook's comparative energy costs.) We can be angry about two things, we can be angry at both, but why can't we discuss the bigger problem first without getting into the weeds of all the smaller problems?
(And of course, the two order of magnitude problems above are inextricably linked: Bitcoin is on track to make many industrial users of electricity look like chumps and dwarf them by an order of magnitude. Nearly all of the consumer-side gains from veganism, LED lightbulbs, EVs has been offset again, if not entirely dwarfed, by cryptocurrency mining.)
People are bad at reasoning things at large enough scales, have a hard time gut understanding order of magnitude problems, so the fallacies keep creeping up, and keep getting weaponized by bad agents (the consumer "green guilt", the consumer "recycling guilt", so many other "demand-side fallacies" that if consumers just bought "smarter", problems would just go away, when really it's the suppliers that are in control).
Industrial production of greenhouse gases is nearly an order of magnitude larger than consumer production, but often inordinately the "guilt" burden is pushed to the consumers: Do you have an EV? Have you changed all your light bulbs to more efficient LEDs? Are you Vegan enough?
Here too: Bitcoin alone has risen to an order (or three) of magnitude more energy consumption than Facebook could ever use/do ever use to track people. (Cumulative, the rest of cryptocurrencies only further dwarf Facebook's comparative energy costs.) We can be angry about two things, we can be angry at both, but why can't we discuss the bigger problem first without getting into the weeds of all the smaller problems?
(And of course, the two order of magnitude problems above are inextricably linked: Bitcoin is on track to make many industrial users of electricity look like chumps and dwarf them by an order of magnitude. Nearly all of the consumer-side gains from veganism, LED lightbulbs, EVs has been offset again, if not entirely dwarfed, by cryptocurrency mining.)
People are bad at reasoning things at large enough scales, have a hard time gut understanding order of magnitude problems, so the fallacies keep creeping up, and keep getting weaponized by bad agents (the consumer "green guilt", the consumer "recycling guilt", so many other "demand-side fallacies" that if consumers just bought "smarter", problems would just go away, when really it's the suppliers that are in control).
How is comparing Bitcoin's energy usage with other endeavors an "order of magnitude fallacy"?
Gold mining uses something like 140 terawatt-hours of energy annually, and produces enormous pollution and environmental destruction in addition to that.
That's greater than Bitcoin's energy usage.
Since gold mining is so much more harmful to the environment, maybe we should outlaw that first before we work on smaller problems.
Gold mining uses something like 140 terawatt-hours of energy annually, and produces enormous pollution and environmental destruction in addition to that.
That's greater than Bitcoin's energy usage.
Since gold mining is so much more harmful to the environment, maybe we should outlaw that first before we work on smaller problems.
> That's greater than Bitcoin's energy usage.
For now. Gold's been around for centuries, Bitcoin not even for two decades. It's got a momentum that Bitcoin may or may not match in the future.
For now. Gold's been around for centuries, Bitcoin not even for two decades. It's got a momentum that Bitcoin may or may not match in the future.
> How is comparing Bitcoin's energy usage with other endeavors an "order of magnitude fallacy"?
The "other endeavors" category above was "digital endeavours" and specifically "Bitcoin versus Facebook", which is an order of magnitude difference.
You've introduced an entirely different category from the above discussion. It's maybe an interesting category [1] to discuss elsewhere, but is off topic from the fallacy we were discussing. Thanks for the non-sequitur, though.
[1] Personally, I'm not so sure it's a useful counter-comparison to Bitcoin: Gold is used in electronics and other industrial needs, beyond its service as a value store/commodity of interest to collectors. Gold is also increasingly rarely the "primary" focus of mines. Most of our Gold today comes from Copper mines and very few would argue we are mining Copper as a value store/solely for greed.
The "other endeavors" category above was "digital endeavours" and specifically "Bitcoin versus Facebook", which is an order of magnitude difference.
You've introduced an entirely different category from the above discussion. It's maybe an interesting category [1] to discuss elsewhere, but is off topic from the fallacy we were discussing. Thanks for the non-sequitur, though.
[1] Personally, I'm not so sure it's a useful counter-comparison to Bitcoin: Gold is used in electronics and other industrial needs, beyond its service as a value store/commodity of interest to collectors. Gold is also increasingly rarely the "primary" focus of mines. Most of our Gold today comes from Copper mines and very few would argue we are mining Copper as a value store/solely for greed.
> Why do HN comment threads always end up as Pedantry Pageants where all ye who dare comment must address all the fucking edge cases
Gold mining isn't a fucking edge case if it uses more energy and produces far more environmental damage.
According to the principle you described, Bitcoin is the edge case we should ignore until we solve the gold mining problem.
Gold mining isn't a fucking edge case if it uses more energy and produces far more environmental damage.
According to the principle you described, Bitcoin is the edge case we should ignore until we solve the gold mining problem.
Gold mining isn't even an edge case in that specific example when the class of problem is explicitly defined as "What digital services use too much energy?" as it had been in the above conversation. Is Gold a digital service? No. Is Gold Mining wasteful? Perhaps. (Though again, as an aside, the better question with specific respect to Gold is: Is Copper Mining wasteful? Most gold is mined as a by product of copper mining.)
It's not an edge case of the "electric waste of Digital Services", because it is an entirely different problem. So not only do we have "pedantry pageants" of edge cases, but we get to address the "pedantry pageants" of all the unrelated but seemingly related problems too?
It's not an edge case of the "electric waste of Digital Services", because it is an entirely different problem. So not only do we have "pedantry pageants" of edge cases, but we get to address the "pedantry pageants" of all the unrelated but seemingly related problems too?
> Gold mining uses something like 140 terawatt-hours of energy annually, and produces enormous pollution and environmental destruction in addition to that.
The most apropos commentary in this entire thread yet.
The most apropos commentary in this entire thread yet.
not to mention human exploitation and harsh working conditions, particularly on illegal gold mines
> why can't we discuss the bigger problem first without getting into the weeds of all the smaller problems?
People seem to be intentionally conflating some things. A carbon tax is nice precisely because it avoids getting into weeds and is a general approach that applies equally to everything. Some people are proposing this and others are saying "don't get caught up in the weeds." What? Makes no sense. It just reinforces the poster's point: that some people's real motivation doesn't seem to be environmental, there's a strange focus on crypto specifically that makes it seem like they want it to be reigned in for other reasons.
People seem to be intentionally conflating some things. A carbon tax is nice precisely because it avoids getting into weeds and is a general approach that applies equally to everything. Some people are proposing this and others are saying "don't get caught up in the weeds." What? Makes no sense. It just reinforces the poster's point: that some people's real motivation doesn't seem to be environmental, there's a strange focus on crypto specifically that makes it seem like they want it to be reigned in for other reasons.
General solutions are great, but when there's a noticeable log_10 distinction between two examples given, why can't we start at dealing with specific solutions to the biggest problem first and worry about the general approach later? It's a 99%/1% problem: we'd potentially get a huge savings if we dealt with the 99% of cases first and worried about the 1% later.
The raw statistics already tell a story that the difference between "BTC" and "Facebook" is greatly exponential. Wanting to focus first on the (much) bigger exponent isn't necessarily a sign that people's real motivation is "conspiratorial" against crypto.
The raw statistics already tell a story that the difference between "BTC" and "Facebook" is greatly exponential. Wanting to focus first on the (much) bigger exponent isn't necessarily a sign that people's real motivation is "conspiratorial" against crypto.
Because an outright ban is misguided anyway. PoW systems incentivize renewable R&D and investment. If you just straight-up make it illegal, you kill a major driving force of change for the better. If you restrict carbon output instead, you just further challenge the industry to find a way to work inside those bounds, allowing creativity and positive externalities to continue to develop.
There was an article just the other day of a coal plant that was entirely restarted for PoW coin mining. PoW systems are not proven to incentivize renewable energy R&D and investment. There's no proven link there. There's no proof that a PoW coin ban would "kill a major driving force of change for the better". Sure, a restriction on carbon output would be such a driving force, but there is no such restriction today and it is wishful thinking to believe that PoW miners are following anything like one in a market where such externalities continue to be unregulated.
It is orthogonal to the issue at hand that PoW is using far too much energy per transaction/per capita/per GDP/per most metrics you want to point to. Not using the energy in the first place is always going to be greener, no matter how much PoW systems invest in renewables and their R&D! I can't see that as "misguided". An outright ban would get immediate results versus a carbon output tax would incentivize eventual results, maybe. That's not misguided, that's just a different perspective, and a different preference on an ideal time window to address the situation versus wishful thinking and "golly gee, sure hope the market eventually figures it out someday".
It is orthogonal to the issue at hand that PoW is using far too much energy per transaction/per capita/per GDP/per most metrics you want to point to. Not using the energy in the first place is always going to be greener, no matter how much PoW systems invest in renewables and their R&D! I can't see that as "misguided". An outright ban would get immediate results versus a carbon output tax would incentivize eventual results, maybe. That's not misguided, that's just a different perspective, and a different preference on an ideal time window to address the situation versus wishful thinking and "golly gee, sure hope the market eventually figures it out someday".
https://orionmagazine.org/article/forget-shorter-showers/ << This is the seminal essay on this subject, IMHO.
What is a fair method for determining the amount of acceptable energy for a cryptocurrency or a social network to use?
It seems like you implicitly draw the 'fair' line between FB and BTC.
BTC's market cap is roughly equal to Facebooks. If a POW coin used facebook levels of energy at the same value, would you find that acceptable?
It seems like you implicitly draw the 'fair' line between FB and BTC.
BTC's market cap is roughly equal to Facebooks. If a POW coin used facebook levels of energy at the same value, would you find that acceptable?
I'm not setting any line here. I'm saying that we could worry about the big problem first without immediately deciding where any "line" needs to be drawn. I'm saying it doesn't matter which side of the "line" Facebook falls on because we could start with the biggest problems first, then circle back to Facebook when it's top of the list (not a whopping log_10 of at least 2 (!) difference from the current worst offenders, such as BTC).
I don't get why anglophones are so obsessed with these "drawing lines" and "moving posts", particularly on recent years. What lines are these exactly? What posts? This is very bad heuristics, actually.
Fair enough. I love this orange website, but I also despise it. Flying off the handle is rarely a sensible solution.
To your point, though, I'm willing to wager that most of the people whose biggest problem with crypto is energy consumption would happily also support other harsh measures against all manner of pollution generating entities. I know I would.
To your point, though, I'm willing to wager that most of the people whose biggest problem with crypto is energy consumption would happily also support other harsh measures against all manner of pollution generating entities. I know I would.
A pollution tax is really the only viable solution though. Playing whack a mole against individual entities and activities will never solve the problem, and creates a lot of legislation.
So long as pollution and carbon are free or cheap, people will find wasteful ways to generate it.
Incentives work, and taxing carbon and pollution will incentive green alternatives.
So long as pollution and carbon are free or cheap, people will find wasteful ways to generate it.
Incentives work, and taxing carbon and pollution will incentive green alternatives.
a pollution tax will not work. That just becomes the price of doing business and that cost is factored into other areas of the business model. Even worse, it just gives more capital to inefficient governments
> That just becomes the price of doing business and that cost is factored into other areas of the business model.
Yah that's the point and business with less environmental impact will be more competitive. Industries/products with more of an impact will be more expensive, reflecting their true cost.
> Even worse, it just gives more capital to inefficient governments
Most pollution/carbon taxes are proposed to be revenue neutral, i.e. all the proceeds are returned to the tax base. This is also important because like other (non-luxury) consumption taxes, a carbon tax is regressive.
Yah that's the point and business with less environmental impact will be more competitive. Industries/products with more of an impact will be more expensive, reflecting their true cost.
> Even worse, it just gives more capital to inefficient governments
Most pollution/carbon taxes are proposed to be revenue neutral, i.e. all the proceeds are returned to the tax base. This is also important because like other (non-luxury) consumption taxes, a carbon tax is regressive.
It becomes the cost of doing dirty business.
Solar is taking off not because we banned coal, but because it's cheaper than coal. If coal and natural gas were taxed according to their carbon output, solar would be even more ahead, nuclear may become more attractive as well.
Aluminum is heavily recycled not because it's green, but because it's significantly cheaper than mining new.
Incentives work. The free market responds to incentives, and works around regulations.
Solar is taking off not because we banned coal, but because it's cheaper than coal. If coal and natural gas were taxed according to their carbon output, solar would be even more ahead, nuclear may become more attractive as well.
Aluminum is heavily recycled not because it's green, but because it's significantly cheaper than mining new.
Incentives work. The free market responds to incentives, and works around regulations.
I have a few disagreements with the MMT crowd, but on this one point they are transparently correct: the exact level of taxation has little relationship to government ability to spend. Talk of "giving more capital" to governments shows a deep misunderstanding about the nature of fiscal constraints.
> other areas of the business model
And what are those? District heating?
And what are those? District heating?
In the specific case of proof-of-work cryptocurrency, I don’t think a carbon tax is directly useful: If it’s unilateral then mining trivially shifts across borders; if it’s global then it’s an inflationary pressure on the coin price which offsets the reduction in mining you might otherwise expect.
> Perhaps it's not idle pedantry to observe that many of those who are angry about crypto energy usage couldn't care less about the energy wasted and pollution generated by other endeavors.
Have you observed this, or are you simply speculating?
Have you observed this, or are you simply speculating?
Was thinking the same thing... There's no evidence I can see to suggest the parent is not also against other forms of excessive energy consumption.
There's a hidden subjective value judgment built into the word "excessive" that's doing a lot of the heavy lifting here. These "regulation" comments tend to have a high likelihood of boiling down "I want the government to stop things I don't like", where environmental concerns (crypto) or data collection (adtech) is a mere pretense grounded in incomplete information at best, emotion at worst.
Personally speaking I find it just as irritating of a pattern here that knee-jerk calls for "regulation" (i.e. bring in the coercive power of the state) or outright banning are so often floated as a/the solution to every problem. When legal coercion is suggested, it is entirely proper to bring up the existence of the dragons that lay down that road.
Personally speaking I find it just as irritating of a pattern here that knee-jerk calls for "regulation" (i.e. bring in the coercive power of the state) or outright banning are so often floated as a/the solution to every problem. When legal coercion is suggested, it is entirely proper to bring up the existence of the dragons that lay down that road.
I want the government to look seriously at things that are using the energy footprint of a mid-sized country simply to spin up a new financial instrument. Particularly when there appear to be equivalent things that don't.
If cryptocurrencies didn't have the energy footprint, I would find them pretty uninteresting and/or ridiculous for various reasons, but ultimately it wouldn't bother me that people do what they do with them. When they start adding seriously to the global energy load in a time of climate crisis that makes them pretty offensive.
If cryptocurrencies didn't have the energy footprint, I would find them pretty uninteresting and/or ridiculous for various reasons, but ultimately it wouldn't bother me that people do what they do with them. When they start adding seriously to the global energy load in a time of climate crisis that makes them pretty offensive.
it's not simply a "new financial instrument", it's a whole ecossystem
I don't know whether you're referring to me or some of the other replies, but I am definitely against most forms of excessive energy consumption if they can be avoided.
Are there any estimates of how much power crypto mining has consumed and how much running all of the Facebook/Instagram/whatever servers has consumed?
Best i found for Bitcoin was 40-100 TWh per year: https://digiconomist.net/bitcoin-energy-consumption
And for Facebook it appeared that they used 5140 GWh in 2019: https://www.statista.com/statistics/580087/energy-use-of-fac...
So essentially:
Best i found for Bitcoin was 40-100 TWh per year: https://digiconomist.net/bitcoin-energy-consumption
And for Facebook it appeared that they used 5140 GWh in 2019: https://www.statista.com/statistics/580087/energy-use-of-fac...
So essentially:
Entity Consumption (GWh)
Facebook 5 140
Bitcoin 40 000 - 100 000
The argument stands for itself. If your uncle gave a good argument against tax exemptions, it's a good argument for tax exemptions. Just pretend somebody else gave it that doesn't have the same alterior motive.
Attacking the motive or whatever is not said out loud is responding to a weaker interpretation
Attacking the motive or whatever is not said out loud is responding to a weaker interpretation
[deleted]
> Perhaps it's not idle pedantry to observe that many of those who are angry about crypto energy usage couldn't care less about the energy wasted and pollution generated by other endeavors.
I don't think that's correct. I think that it's possible to care about both, but to be dismissive of misdirecting subject changes, i.e. "whataboutism".
I don't think that's correct. I think that it's possible to care about both, but to be dismissive of misdirecting subject changes, i.e. "whataboutism".
So you answered his complaint about the use of "slippery slope fallacy" by deploying the "whatabout" fallacy and created a strawman.
Nicely done, nicely done.
Nicely done, nicely done.
This is not an edge case at all. Who is to decide on what to spend energy or not? This is curing the symptoms only.
The (counter) solution is not to discuss for what to burn coal, but to finally stop burning coal, oil and gas. USA and EU could do that within a few years. And then stop or tax imports from countries that still do burn coal.
But that is inconvenient for many, so they prefer discussing nerdy Bitcoin PoW instead.
The (counter) solution is not to discuss for what to burn coal, but to finally stop burning coal, oil and gas. USA and EU could do that within a few years. And then stop or tax imports from countries that still do burn coal.
But that is inconvenient for many, so they prefer discussing nerdy Bitcoin PoW instead.
I mean, thank you for offering the alternative solution! I couldn't agree more that not burning coal is the only ultimate solution. A severe, possibly overly severe, Carbon tax is maybe the way. But as the great Stephen Schneider once quoted some other great, "Don't let the perfect get in the way of the good". And he was talking about cap and trade vs carbon tax!
The real reason is twofold, first and more importantly, because you don't know the unintended consequences of proposing something like that. Who knows what else would get caught between the regulatory framework needed to prevent someone from doing math, because let's face it, that is impossible so unintended consequences will be the only consequences.
And secondly and most importantly, the government should not decide what products are allowed to be traded: Governments should lift all bans on products currently banned, all drugs, all books, all music, all banned clothing, etc.
And secondly and most importantly, the government should not decide what products are allowed to be traded: Governments should lift all bans on products currently banned, all drugs, all books, all music, all banned clothing, etc.
The last sentence comes off as a rhetorical sleight of hand. You can be against censorship of books and music and still believe that the government has a role to play in regulating dangerous goods like plutonium. The trade of goods with an outsized environmental impact is regulated today, though this mostly shows up as restrictions on chemicals that are themselves direct pollutants.
Sure, you can be against anything, pro anything, and believe in anything. What I believe is what I wrote, you can believe governments should control plutonium if you want.
If you think the US and EU could completely stop burning coal, oil, and gas in a few years (less than 10?), you must know something no one else knows, or this plan involves a lot of dead people. But I'd love to hear more about it.
> stop burning coal, oil and gas. USA and EU could do that within a few years.
Is there a concrete plan for how this would work documented somewhere? The ways I can think of doing this in the USA are all politically nonviable.
Is there a concrete plan for how this would work documented somewhere? The ways I can think of doing this in the USA are all politically nonviable.
Electricity produced in France by coal + gas + oil is around 8% (vs. 70% nuclear, 10% hydro, the rest is wind + solar + bio-energy).
It took more than "a few years" to build, though.
"politically nonviable"
Which makes it a self-inflicted injury. Like corruotion in Russia - it can't be adressed by anyone else.
Which makes it a self-inflicted injury. Like corruotion in Russia - it can't be adressed by anyone else.
Agree. Wasting energy on bitcoin isn't the problem, energy production causing earth to heat up is the problem.
I can think of many things equally or similarly energy wasteful as Bitcoin.
I can think of many things equally or similarly energy wasteful as Bitcoin.
Like lawns. We seriously use way too much water, chemicals, energy and time on a plant crop that is basically only for our visual enjoyment. We often think of the big fixes, which are needed, where there are some low hanging fruit we could pick first that would make an impact.
https://news.climate.columbia.edu/2010/06/04/the-problem-of-...
https://blogs.scientificamerican.com/anthropology-in-practic...
https://news.climate.columbia.edu/2010/06/04/the-problem-of-...
https://blogs.scientificamerican.com/anthropology-in-practic...
Yes. The weird thing about bitcoin is that at least mining it doesn't create additional waste products.
If you spent the same energy used to mine bitcoin on producing Legos or In-N-Out burgers, then you'd have much bigger problems.
I
If you spent the same energy used to mine bitcoin on producing Legos or In-N-Out burgers, then you'd have much bigger problems.
I
What things are similarly energy wasteful as Bitcoin?
American SUVs and trucks come to mind. We can for now ignore the wooden, uninsulated houses built in the desert with the AC on for 6-9 months of the year.
[deleted]
What is something more wasteful than Bitcoin?
It's a nondescript pollution factory from the Captain Planet cartoons.
Every other wasteful activity has just been overconsumptive, decadent, or externalized, not an actual burning of resources for no reason.
It's a nondescript pollution factory from the Captain Planet cartoons.
Every other wasteful activity has just been overconsumptive, decadent, or externalized, not an actual burning of resources for no reason.
I don't think it's useful to spin up nuclear reactors to run Bitcoin PoW either.
All energy production will have an environmental cost, not just carbon dioxide emitting ones.
All energy production will have an environmental cost, not just carbon dioxide emitting ones.
[deleted]
> so they prefer discussing nerdy Bitcoin PoW instead
Why not both?
Why not both?
You do realize that while sunlight and wind are renewable, lithium-ion batteries are not, right? Nor are solar panels. Cadmium and lithium are highly toxic materials we must mine, just like coal. They have the benefit of not directly adding CO2 to the atmosphere as you use them -- but they come with their own set of issues. There is no free lunch. POW is Proof of Waste, and we shouldn't be blithely wasting any of these non-renewables.
Because this is a website full of engineers who write computer software for a living? And finding and solving for those edge cases is literally a core function of what most of us spend the majority of both our work and leisure time doing?
To me the big gripe is not the concern for edge cases but the immediate dismissal of a very productive first step in addressing an issue by resolving the entire conversation before it even happens.
It is very possible to bring up edge cases in a productive manner. Expand the conversation to include them. there's no need to assume the first solution idea posted is meant to be the final form
It is very possible to bring up edge cases in a productive manner. Expand the conversation to include them. there's no need to assume the first solution idea posted is meant to be the final form
But is it even a productive first step? There are arguments to be made that proof-of-work mining incentivizes renewable R&D.
By banning that because it uses "too much" energy now - what are we potentially losing? What developments in renewables, energy storage, or grid development simply won't be there, which we won't know we don't have, because we banned the largest for-profit, skin-in-the-game competitive contest for low-cost energy that the world had ever seen 25 years prior?
Banning it outright is short-sighted. Thinking about it from a higher level is a way of addressing the real issue of carbon emissions while allowing a phenomenon that has the potential to massively help, not hurt, to thrive.
By banning that because it uses "too much" energy now - what are we potentially losing? What developments in renewables, energy storage, or grid development simply won't be there, which we won't know we don't have, because we banned the largest for-profit, skin-in-the-game competitive contest for low-cost energy that the world had ever seen 25 years prior?
Banning it outright is short-sighted. Thinking about it from a higher level is a way of addressing the real issue of carbon emissions while allowing a phenomenon that has the potential to massively help, not hurt, to thrive.
The desire for energy is near limitless - PoW simply bends the curve upward. As the price of BTC increases, the drive for less costly energy slackens off.
The issue is clearly a tragedy of the commons - the cost (higher air pollution/higher energy costs) is socialized, while the profits are centralized. So the maximization function is cheap >>> anything else. Why wouldn't we expect more and larger coal plants versus research into fusion reactors?
The issue is clearly a tragedy of the commons - the cost (higher air pollution/higher energy costs) is socialized, while the profits are centralized. So the maximization function is cheap >>> anything else. Why wouldn't we expect more and larger coal plants versus research into fusion reactors?
That's only true so long as the price continually rises. As soon as the price settles, everyone is operating on the margin and can only become more profitable by reducing costs.
Unsubsidized renewables are already the cheapest new source of energy generation. [0] Even if miners wouldn't be doing direct renewable research themselves, their capital investments into renewables in the name of competition and cost-savings would incentivize more efficient technologies.
In this case the immediate marginal profits from mining are centralized, and the larger benefits of more advanced renewable energy are socialized.
Plus - do you believe that the price of Bitcoin will rise forever? If it did, wouldn't that mean to you that it might be doing something important, to constantly have growth and demand for 100 years? Cuz if I thought so then I'd want to preserve it, not throw it away. Sounds important.
[0] https://www.forbes.com/sites/jamesellsmoor/2019/06/15/renewa...
Unsubsidized renewables are already the cheapest new source of energy generation. [0] Even if miners wouldn't be doing direct renewable research themselves, their capital investments into renewables in the name of competition and cost-savings would incentivize more efficient technologies.
In this case the immediate marginal profits from mining are centralized, and the larger benefits of more advanced renewable energy are socialized.
Plus - do you believe that the price of Bitcoin will rise forever? If it did, wouldn't that mean to you that it might be doing something important, to constantly have growth and demand for 100 years? Cuz if I thought so then I'd want to preserve it, not throw it away. Sounds important.
[0] https://www.forbes.com/sites/jamesellsmoor/2019/06/15/renewa...
Bitcoin isn't the only option. We've already seen that when the price of Bitcoin dips miners flip over to whatever cryptocoin seems next to bubble, seems next most interesting. Certainly what is called Bitcoin itself (today) has "hard" "deflationary" "caps", but as soon as miners get bored with that, there's always more room for more forks and other coins.
Even if Bitcoin isn't intended to be "growing forever", the ecosystem can and will.
Even if Bitcoin isn't intended to be "growing forever", the ecosystem can and will.
> The desire for energy is near limitless - PoW simply bends the curve upward. As the price of BTC increases, the drive for less costly energy slackens off.
Shameless hijacking here: at what point will the heat consumption/release rate be so great that the Earth becomes unable to support life? I've seen some back of the napkin calculations that estimate a couple hundred years, at our current acceleration.
Shameless hijacking here: at what point will the heat consumption/release rate be so great that the Earth becomes unable to support life? I've seen some back of the napkin calculations that estimate a couple hundred years, at our current acceleration.
IIRC (it has been a few years), we only need a few degrees to reach a tipping point. The decay of methane hydrates could push out 1000 GT CO2 equivalent suddenly, accelerating warming by roughly ~40-50 years.
Making renewables isn't actually useful if they're used for something we don't even need to do. We could switch to a low-energy crypto currency and do all the things we were going to do with Bitcoin.
Lighting all the oil and gas in the world on fire will also incentivize renewables. But that's not a good practice for a lot of reasons including increasing the pollution and CO2 levels.
Making this change would introduce an enormously impactful precedent. Politicians might take it and run with it to places we don't even want to imagine. I'd agree with you in a world without the current style of politics and decision making, but that's not where we live - and sadly alternative to that is unknown to me too.
I'm a software engineer, and I'm probably at least in the 90th percentile for ability to manage (or design not to have) edge cases. I try not to be that pedantic when criticizing coworker's designs, other than perhaps pointing out that lots of edge cases in a design is a common symptom of over-complexity.
On this particular topic, I particularly hate the amount of fossil fuels getting burned on cryptocurrency. I'm less concerned about the amount of energy getting "wasted" on data centers in general. At least in most cases, there's alignment of interests when it comes to efficiency optimization. Facebook has an incentive to make their servers more power efficient over time, and scale their capacity to the size of their customer base. With proof-of-work, there's also incentive to increase power efficiency, but also incentive to scale up to capacity limits.
I think it is possible that proof-of-work cryptocurrency algorithms could be tuned to the point of striking a sustainable balance long term, but that would require the world economy to converge on one or two of them. The issue with that I think is the speculative nature of the currency's distribution of ownership. With large portions of the currency being held by a small number of anonymous people, and no clear path for the majority of normal folk to exchange their wealth, it's just not going to happen without some sort of societal collapse. I also struggle to have faith in a system meant to disrupt the global economy when its existence depends on global scale internet infrastructure.
On this particular topic, I particularly hate the amount of fossil fuels getting burned on cryptocurrency. I'm less concerned about the amount of energy getting "wasted" on data centers in general. At least in most cases, there's alignment of interests when it comes to efficiency optimization. Facebook has an incentive to make their servers more power efficient over time, and scale their capacity to the size of their customer base. With proof-of-work, there's also incentive to increase power efficiency, but also incentive to scale up to capacity limits.
I think it is possible that proof-of-work cryptocurrency algorithms could be tuned to the point of striking a sustainable balance long term, but that would require the world economy to converge on one or two of them. The issue with that I think is the speculative nature of the currency's distribution of ownership. With large portions of the currency being held by a small number of anonymous people, and no clear path for the majority of normal folk to exchange their wealth, it's just not going to happen without some sort of societal collapse. I also struggle to have faith in a system meant to disrupt the global economy when its existence depends on global scale internet infrastructure.
It's not pedantry, it's calling out issues in armchair proposals. "Why not regulate" and "Why not let the market sort itself out" are kinda intellectually lazy propositions: there are good regulations and bad regulations, and good and bad implementations.
And banning isn't really a proper solution in the first place. It's a literal avenue for tax revenue for countries at this point. The fact that PoS coins like Cardano and L2 solutions like Polygon are bullish despite the crash in Bitcoin shows something about investor sentiment surrounding the whole energy consumption ordeal. Voting with your wallet is a real possible solution and IMHO, people are starting to take the hint.
And banning isn't really a proper solution in the first place. It's a literal avenue for tax revenue for countries at this point. The fact that PoS coins like Cardano and L2 solutions like Polygon are bullish despite the crash in Bitcoin shows something about investor sentiment surrounding the whole energy consumption ordeal. Voting with your wallet is a real possible solution and IMHO, people are starting to take the hint.
I don’t understand why you don’t find these “where do you draw the line?” inquiries extremely relevant to this conversation. It seems like everyone here has just assumed that Bitcoin is useless and therefore the externalities from its energy usage should be unacceptable. Personally I’m not a big fan of bitcoin’s energy usage either, but it strikes me as bizarre to recommend banning arbitrary things that use energy rather than, for example, addressing the externality problem directly.
I wouldn't say OP recommended banning anything 'arbitrary'. It was very relevant to the discussion to state that the ban should be on proof-of-work currencies.
Here's my issue. There is such a thing as too-late in environmental matters. Once it's too late, it's a fire that sustains itself. Therefore, acting quickly matters. Addressing the source directly is obviously the superior solution. But I just don't see it happening at a fast enough rate. I see nuclear power in the same way. Yes, it's a little bit of trading one problem for the next, but it's a very necessary stop gap to buy us time.
Here's my issue. There is such a thing as too-late in environmental matters. Once it's too late, it's a fire that sustains itself. Therefore, acting quickly matters. Addressing the source directly is obviously the superior solution. But I just don't see it happening at a fast enough rate. I see nuclear power in the same way. Yes, it's a little bit of trading one problem for the next, but it's a very necessary stop gap to buy us time.
Because banning outright is stupid, and banning a technology is even stupider. Technologies have both benefits and drawbacks. TAX (not ban) the drawbacks.
In this case, tax carbon. Then people will decide what they want to spend their (expensive) energy on.
In this case, tax carbon. Then people will decide what they want to spend their (expensive) energy on.
I'm actually hopeful that crypto will bring about a carbon tax. I figure the people getting rich in crypto are a different set of people than those getting rich in traditional CO2 emitting industries. So there's a slightly better chance that politicians will enact the necessary legislation.
Unless they do that outside your jurisdiction and/or get tax cuts from the powers to be.
It's not a counter-solution, it is a suggestion that the problem isn't really a problem. PoW power usage is high in an absolute sense but lower than many other things which people would consider an obvious waste. So why does PoW power usage have so much contention compared to those other things? I would say because there's too much baggage/hype associated with cryptocurrencies, not because there's a genuine belief that increasing the energy usage of our species is a universally bad thing.
As for the carbon side of the issue, that isn't something which is specific to cryptocurrencies or any other kind of energy usage. I support carbon taxes and import taxes on CO2-producing goods/services, including cryptocurrency services, and I am certain that many cryptocurrency believers feel the same way.
As for the carbon side of the issue, that isn't something which is specific to cryptocurrencies or any other kind of energy usage. I support carbon taxes and import taxes on CO2-producing goods/services, including cryptocurrency services, and I am certain that many cryptocurrency believers feel the same way.
So if ready alternatives didn’t exist, sure PoW is wasteful but has no alternative... but we have an alternative. If there were alternatives to running a social media platform that didn’t spend energy we should also back that option.
Assuming you are talking about PoS systems, I think they are very promising but it's still not obvious that they can achieve the same risk profile as PoW systems. I think they are worthy of further research and I am excited to see how Eth 2.0 works in practice, but I don't think we understand the economic nature of cryptocurrencies well enough to definitively say that it can completely replace Bitcoin.
While I agree with the genral thrust of your tirade, this is not slippery slope, this is hypocracy of the highest degree.
OP proposal to ban cryptocurrencies for 'damaging environment' while we have companies who's entire business model is giving their customers cancer and preying on addicts.
OP proposal to ban cryptocurrencies for 'damaging environment' while we have companies who's entire business model is giving their customers cancer and preying on addicts.
1. We can work on more than one thing at a time and I’d be quite surprised if the original poster didn’t want to do something about those companies, too.
2. For all their many flaws, those industries also provide something of value. If they shut down tomorrow, people would miss having cars, pesticides, fuels, medications, etc. but if every cryptocurrency suddenly halted tomorrow nobody outside of a few speculators would find their daily life any different. That doesn’t mean that those externalities aren’t real and don’t require action but they’re widespread because there is some kind of real value to society and you’d need a transition plan to avoid disrupting a lot of processes.
2. For all their many flaws, those industries also provide something of value. If they shut down tomorrow, people would miss having cars, pesticides, fuels, medications, etc. but if every cryptocurrency suddenly halted tomorrow nobody outside of a few speculators would find their daily life any different. That doesn’t mean that those externalities aren’t real and don’t require action but they’re widespread because there is some kind of real value to society and you’d need a transition plan to avoid disrupting a lot of processes.
If a heroin dealer is imprisoned, his customers could have severe withdrawal. Some might even die from it.
I'm gonna bet OP would be happy to ban hammer the hell out of the companies who's entire business model is giving their customers cancer and preying on addicts too
This is classic whataboutism. We can't do anything to improve the world because there are other bad things happening in the world too.
The crowd of HN tends to be more philosophic. Without a moral / ethical / long-term practical view, we're just ships with torn sails floating in the waves, wandering about, making short-term decisions. Decisions often have 2nd, 3rd, 4th-order consequences that can be unpredictable and often counter to the goal we think we're working towards in the short term. It pays to think them through from a high level and apply long-term thinking principles.
I agree. Having used Reddit for too long, and Facebook too before I deleted it completely, my experience has been that HN is much better at talking about things, and more careful about wording. Despite the predictable slippery slope comments, there is always some good commentary in most threads. I can't think of anywhere else to go to get discussion on a multitude of complex topics like this.
That doesn't mean that threads on HN can't take a nosedive and become flame wars. But that's what good moderation is here for, and I believe HN has that.
That doesn't mean that threads on HN can't take a nosedive and become flame wars. But that's what good moderation is here for, and I believe HN has that.
Because it's missing the forest for the trees. Look at total energy usage, across all industries. This is more an indictment of cryptocurrency than it is about actually caring about the environment. Compare it to say, eliminating all gas vehicles for electric cars. Where is the HN thread advocating for that, if the end result would be massively fewer carbon emissions versus this proposal? My criticism is this proposal is like banning plastic straws. It's patting ourselves on the back, with no real solution.
Are you joking? There are plenty of conversations on Hackernews about electric vehicles, it just so happens that replacing every single car in the world with a totally different energy system is a way harder problem than banning useless cryptocurrencies that are burning energy to fuel equity bubbles.
So instead of dolvibg the hard problem well focus on something easy and useless. SV moto in a nutshell
You may have heard of this company Tesla based in Silicon Valley, one of the largest companies by market cap in the world, just led an electric car revolution that's inspired automakers worldwide to shift off IC engines
No, it's addressing the low hanging fruit first. An efficient approach to solving a problem.
Only if you just consider how hard it is to ban, not how hard it is to replace while achieving the same utility.
> It's patting ourselves on the back, with no real solution.
modern politics in a nutshell
modern politics in a nutshell
This comment isn't productive. The original comment suggests states act to ban wasteful energy use. The comment you're replying to asks "who decides?" , and gives an example of energy use they find particularly wasteful.
You're presupposing this is a problem that needs a solution. I think myself and the commenter you are replying to would agree that either: A) it's not or B) it does not need to be solved by a regulatory body.
Instead of getting annoyed by people pointing out edge cases, it would be more productive to explain what criteria should be used, or admit this is a half baked solution.
You're presupposing this is a problem that needs a solution. I think myself and the commenter you are replying to would agree that either: A) it's not or B) it does not need to be solved by a regulatory body.
Instead of getting annoyed by people pointing out edge cases, it would be more productive to explain what criteria should be used, or admit this is a half baked solution.
> Every fucking time "Regulations" of any kind come up.
unless of course those regulations are about regulating "big tech" for "censorship".
unless of course those regulations are about regulating "big tech" for "censorship".
I am not being pedantic. I am simply bringing up two points:
- There are those who are OK with high carbon emissions for various things that are a proven net-negative to the society or the planet - examples being, as I mentioned, social media, user tracking and advertising server farms, plus anything directly related to that. If these things are not a net-negative, then at the very least they could operate at the fraction of their current emissions, were they built with externalities in mind. To be OK with that but not with Bitcoin where it objectively provides some value by directly helping human lives (it is a store of value and a way to transfer money for people whose home currency is unstable or restricted by hostile governments, for instance), is hypocritical.
- Literally all legislation surrounding cryptocurrency (well, anything else too, really) by necessity has to be based on someone's opinions. Whose, is my question. Because that will shape what's allowed and what's not allowed to a great extent. Badly chosen opinion-givers lead to clusterf*cks like Disney, Sony and a few other giants effectively being in charge of worldwide copyright durations, which causes untold damage to the cultural commons.
- There are those who are OK with high carbon emissions for various things that are a proven net-negative to the society or the planet - examples being, as I mentioned, social media, user tracking and advertising server farms, plus anything directly related to that. If these things are not a net-negative, then at the very least they could operate at the fraction of their current emissions, were they built with externalities in mind. To be OK with that but not with Bitcoin where it objectively provides some value by directly helping human lives (it is a store of value and a way to transfer money for people whose home currency is unstable or restricted by hostile governments, for instance), is hypocritical.
- Literally all legislation surrounding cryptocurrency (well, anything else too, really) by necessity has to be based on someone's opinions. Whose, is my question. Because that will shape what's allowed and what's not allowed to a great extent. Badly chosen opinion-givers lead to clusterf*cks like Disney, Sony and a few other giants effectively being in charge of worldwide copyright durations, which causes untold damage to the cultural commons.
There's nothing wrong with pointing out problems with a solution and not providing a counter-solution. When one isn't provided, it can simply mean that the offered solution is actually worse than the status quo.
In this particular situation, I may not have the solution, but I know that the offered one is a short-sighted knee-jerk reaction which has terrible implications for other things
In this particular situation, I may not have the solution, but I know that the offered one is a short-sighted knee-jerk reaction which has terrible implications for other things
Why? Because that's what I bet most people come to HN for. I'd rather find out that my idea is impractical or plain stupid on a HN thread than in some other and expensive way.
> must address all the fucking edge cases or be called out by the immediate first child comment about failing to do so.
Because it is an incredibly common fallacy to ignore boundary conditions and unintentional consequences when proposing a pie-in-the-sky regulation that is supposed to just fix things.
Any regulatory mechanism is essentially a machine that will need to work with every input and minimize some class of error, be it precision or coverage or some other system level metric. Turns out the most interesting part of such a system is indeed around the edge cases, and the difficulty of handling such cases is essentially the bulk of the difficulty of building such a system to begin with.
It is like saying "why don't we build a system that punishes criminals", which sounds very agreeable and popular at that level of construal, but is incredibly complex and sophisticated at the actual implementation level; e.g. to have a process to minimize false positive convictions rather than maximize conviction rates.
> It's SO trite, predictable, wearisome and boring
Not to sound harsh but HN does not owe anyone their favorite type of entertainment and honestly criticisms on those metrics are more trite, predictable, wearisome and boring themselves than anything else. Many find intellectual stimulation and systemic thinking entertaining and thus those comments enjoyable.
Because it is an incredibly common fallacy to ignore boundary conditions and unintentional consequences when proposing a pie-in-the-sky regulation that is supposed to just fix things.
Any regulatory mechanism is essentially a machine that will need to work with every input and minimize some class of error, be it precision or coverage or some other system level metric. Turns out the most interesting part of such a system is indeed around the edge cases, and the difficulty of handling such cases is essentially the bulk of the difficulty of building such a system to begin with.
It is like saying "why don't we build a system that punishes criminals", which sounds very agreeable and popular at that level of construal, but is incredibly complex and sophisticated at the actual implementation level; e.g. to have a process to minimize false positive convictions rather than maximize conviction rates.
> It's SO trite, predictable, wearisome and boring
Not to sound harsh but HN does not owe anyone their favorite type of entertainment and honestly criticisms on those metrics are more trite, predictable, wearisome and boring themselves than anything else. Many find intellectual stimulation and systemic thinking entertaining and thus those comments enjoyable.
In my mind its not about figuring out the edge cases, its more about building a framework in which tradeoffs can be analyzed, debated, and mindfully considered before drafting legislation. In order to do this there might need to be a few conversations that some may consider pedantic.
I will say that given the text based medium of HN, it can be hard to gauge whether one wants to have a mindful discussion or if one is just trying to mindlessly ding a poster.
I will say that given the text based medium of HN, it can be hard to gauge whether one wants to have a mindful discussion or if one is just trying to mindlessly ding a poster.
I don't know if that was their intent, but I would actually like a good answer to your parent's question to have a strong argument for backing OP's proposition, which I'd like to happen.
Moral arguments (ones that offer only should and should not with some supporting evidence but no actual solution) are going to be dismissed more regularly because while they may offer perspective, they offer very little value beyond that. That makes them fairly non-actionable.
Choose an argument which requires you to offer a viable and compatible alternative and you'll probably get a lot more ears.
Choose an argument which requires you to offer a viable and compatible alternative and you'll probably get a lot more ears.
How is that an edge case? The OP said ban all POW crypto and the reply questions whether that is really a wise suggestion.
https://news.ycombinator.com/newsguidelines.html
Be kind. Don't be snarky.
Comments should get more thoughtful and substantive, not less, as a topic gets more divisive.
When disagreeing, please reply to the argument instead of calling names.
Please don't post shallow dismissals
Be kind. Don't be snarky.
Comments should get more thoughtful and substantive, not less, as a topic gets more divisive.
When disagreeing, please reply to the argument instead of calling names.
Please don't post shallow dismissals
Yes. In fact perhaps we could automate these, with GPT-3! Unless, err, that's already happened
the thing is that 'simple' solutions are never that. and if you find that boring or whatever than maybe its time to think a bit further before making some arguments.
if a case is so easy to dismiss, it might not be a good case after all.
A more apt comparison might be burning fuel to mine copper, nickel and zinc out of the ground for coinage.
That comparison would fit even better if we acquired Cu/Ni/Zn at the same rate no matter how much energy we spent on mining it.
just because you lack an understanding to rebuttal coherently doesn't render the argument useless.
> edge cases
That’s the first time I’ve ever seen someone describe Facebook as an “edge case”.
If $900,000,000,000 of market capitalization counts as an edge case, I’d think you must be hard to please at Christmas - those are some really high standards!
That’s the first time I’ve ever seen someone describe Facebook as an “edge case”.
If $900,000,000,000 of market capitalization counts as an edge case, I’d think you must be hard to please at Christmas - those are some really high standards!
It violates principle of equality to target only one
Just can't escape this mentality.
I literally LOL'd. Thank you and never stop being this way
Or is that you refuse to address the complexity of "Regulations"? The easy seduction of oversimplification runs high with those whose argumentation is primarily a fallacious appeal to emotion.
Maybe it's time to grow up and realize that the real world is highly complex and requires sophisticated tools, mathematics, and questions in order to better live in it?
Maybe it's time to grow up and realize that the real world is highly complex and requires sophisticated tools, mathematics, and questions in order to better live in it?
There is a counter solution to advocating for regulation. It's to create an economic system where people are naturally incentivized to do what's best. Vote with your wallet. You don't want energy that produced Co2? Don't buy it and advocate for others not to buy it.
Instead what people are doing is advocating for the government to come and point guns at people who don't do what they want -- even if they happen to be wrong. And when they are wrong, there are disastrous consequences as is currently extremely apparent in California. There are all kinds of perverse incentives which have resulted in the severe homelessness and extreme government waste.
The people advocating for this neither listen to the wisdom of Murphy's law, nor do they understand that when regulation impacts the market that regulation becomes what is bought and sold. Have you never heard of regulatory capture? That has worse human-cost impacts than leaving people to their own devices.
Vote with your wallet. Don't like the environmental cost of beef? Don't buy it. This works -- you can see it playing out.
https://ichef.bbci.co.uk/news/976/cpsprodpb/BA65/production/...
Instead what people are doing is advocating for the government to come and point guns at people who don't do what they want -- even if they happen to be wrong. And when they are wrong, there are disastrous consequences as is currently extremely apparent in California. There are all kinds of perverse incentives which have resulted in the severe homelessness and extreme government waste.
The people advocating for this neither listen to the wisdom of Murphy's law, nor do they understand that when regulation impacts the market that regulation becomes what is bought and sold. Have you never heard of regulatory capture? That has worse human-cost impacts than leaving people to their own devices.
Vote with your wallet. Don't like the environmental cost of beef? Don't buy it. This works -- you can see it playing out.
https://ichef.bbci.co.uk/news/976/cpsprodpb/BA65/production/...
"Vote with your wallet" depends on several micro-economic assumption holding true, that don't hold true here.
One of those is the assumption of perfect competition. Electricity is far, far from being a market with perfect competition. How many electricity providers are you able to choose from at your house? I'm going to guess 1.
Another assumption that doesn't hold here is the absence of externalities. The full cost of damage to the environment is not included in the price you pay for electricity, so people are going to over-consume it.
You rail against laws and regulations but even in the second sentence of your post you assume their necessity with the phrase "create an economic system..." Laws and regulations are how you create such systems.
Regulatory capture is a real thing, but it's not a good argument against all regulation. Maybe it's an argument for relatively less regulation than we'd have otherwise. It's also an argument for doing regulation better.
One of those is the assumption of perfect competition. Electricity is far, far from being a market with perfect competition. How many electricity providers are you able to choose from at your house? I'm going to guess 1.
Another assumption that doesn't hold here is the absence of externalities. The full cost of damage to the environment is not included in the price you pay for electricity, so people are going to over-consume it.
You rail against laws and regulations but even in the second sentence of your post you assume their necessity with the phrase "create an economic system..." Laws and regulations are how you create such systems.
Regulatory capture is a real thing, but it's not a good argument against all regulation. Maybe it's an argument for relatively less regulation than we'd have otherwise. It's also an argument for doing regulation better.
This is not a solution in a world in which we have catastrophic global climate instability on the horizon.
Sorry, sometimes there are great reasons for regulation.
Sorry, sometimes there are great reasons for regulation.
Those regulations are going to create as much cost on humans as leaving it to people like yourself who care.
Fixing the problem is up to you.
~"The reason things things never change is that those who stand to lose by change are the ones who hold all the power" -- Machiavelli
Fixing the problem is up to you.
~"The reason things things never change is that those who stand to lose by change are the ones who hold all the power" -- Machiavelli
> Those regulations are going to create as much cost on humans as leaving it to people like yourself who care.
Humans optimise for short term gain, generally perceived gain over others, and rationalise this over large nebulous things like climate change, environmental health etc. They don't count externalities without being made to. And that's individuals. Companies are downright sociopathic and will happily defecate in their own back yard if they can make a dime out of it.
As a result we can already see what happens when people are left to choose themselves or the environment, they choose their own short term relative gain over the long term prospects of the whole species (before we even look at other species).
> Fixing the problem is up to you.
Yes, in a democracy it is, which is why I vote for political parties which will bring in regulations.
Humans optimise for short term gain, generally perceived gain over others, and rationalise this over large nebulous things like climate change, environmental health etc. They don't count externalities without being made to. And that's individuals. Companies are downright sociopathic and will happily defecate in their own back yard if they can make a dime out of it.
As a result we can already see what happens when people are left to choose themselves or the environment, they choose their own short term relative gain over the long term prospects of the whole species (before we even look at other species).
> Fixing the problem is up to you.
Yes, in a democracy it is, which is why I vote for political parties which will bring in regulations.
"Fixing the problem is up to you."
Huh? Great newa! I can pollute and create oilspills and its all someone else's problem!
Huh? Great newa! I can pollute and create oilspills and its all someone else's problem!
This idea doesn't apply at all for stupid speculative bubbles like proof-of-work crypocurrency.
As another good counterexample to your "market solutions for everything": I don't want rhinos driven to extinction, so I vote with my wallet by never buying powdered rhino horn or other poached products, and donating to environmental charities to protect them. However, it's very likely that rhinos will be extinct in the wild within our lifetime. Does this mean "the market" has decided to exterminate wild rhinos? Should we eliminate poaching regulations and remove red-tape to stop distorting the free-market price of rhino horn?
As another good counterexample to your "market solutions for everything": I don't want rhinos driven to extinction, so I vote with my wallet by never buying powdered rhino horn or other poached products, and donating to environmental charities to protect them. However, it's very likely that rhinos will be extinct in the wild within our lifetime. Does this mean "the market" has decided to exterminate wild rhinos? Should we eliminate poaching regulations and remove red-tape to stop distorting the free-market price of rhino horn?
Rhinos are heritage of mankind abd are woth countless trilions to future generations. Just like forests and climate.
Current 'free market' is just fancy name for barbaric ransaking
Current 'free market' is just fancy name for barbaric ransaking
Create your own nature reserve for rhinos if you think it's so important. There are huge swaths of the US dedicated to nature reserves.
Infact create your own planet with its own climate if you think it's so importsnt
It's not about power. Well, not electrical power. It's about control over our currency. The argument is a trojan horse for an effective ban on the entire category of currencies not controlled by central authorities.
Without Proof of work, cryptocurrency would have never been established as a novel concept. Proof of work was the only rationale way to decide who should initially own how many units of the currency.
Without Proof of work, cryptocurrency would have never been established as a novel concept. Proof of work was the only rationale way to decide who should initially own how many units of the currency.
Does it need to remain? At some point coins were composed entirely of valuable metals because that's how their value was determined, but we've moved on from that. Can't we move on from proof of work as well?
Exactly, that's how laws work: they express value judgements. Installing solar on the roof? Good, the people will help you pay for it. Earning a fortune? Bad, the people want a piece of that.
The laws set up the playing field, and the market responds to the incentives. There has never been any such thing as a "free" market, and it's a good thing too.
The laws set up the playing field, and the market responds to the incentives. There has never been any such thing as a "free" market, and it's a good thing too.
HN embodies this weird upper class environmentalist fascism where they proudly pick and choose what the plebes should be allowed to do with their lives based on totally logically inconsistent environmental reasons. The Musk thing was so funny for this. "No you plebes should have no recourse or experimentation against a fiat system it's bad for the environment, now don't mind me driving my Tesla around to do things like shop at expensive stores in my gated community or just kick it on the weekend doing a road trip in my TOTALLY ENVIRONMENTALLY NECESSARY electric vehicle that uses electricity from my wall socket not derived from fossil fuels at all which was not mined from not dubious sources whose environmental impact is totally not cool". I can't imagine where this ideology will land but I imagine the scope will expand greatly outside of PoW cryptocurrencies. Pretty soon commenters here will be scolding your for turning up your graphics settings in AAA games but only if you're poor and your house is in a dump that doesn't have a renewable grid.
Nah, you're right. Best not to do anything just in case we incovenience the 'plebes'. Or just in case First They Came For My PoW's And I Said Nothing. Then They Came For My AAA Games. Nevermind the burning planet, nothing should ever be done for the greater good if 100% logical consistency isn't baked into the thought.
Always the same fucking slippery slope!
Always the same fucking slippery slope!
You just proved my point. Your comment presents the idea that Bitcoin is "burning the planet" and needs to be focused on with ZERO elaboration as to why, then you use an appeal to emotion invoking the undefinable term "greater good", then you ignore logical consistency as if it doesn't matter when making an argument. Absolutely pathetic.
Don't worry. There are many here who agree with everything you are saying.
I think the real problem is that there is no cost associated with emitting CO2 for the emitter even though it creates tremendous costs for the society in the long term. If there was a tax associated with the act of emitting CO2 itself (purpose of which could be to invest in green technologies) then the market could be the arbiter.
I think the correct comparison is against the Bloomberg Terminal, through which the vast majority of capital flows responsible for environmental damage, occur. Not only does the terminal itself use a vast amount of power with its humongous do-it-all servers and 8-screen users, but the facilitated capital flows, commodity trading, speculation, are probably responsible for 2-3 orders of magnitude more environmental damage than proof of work.
Yes, what about that other thing? Look over there! Is there literally any response that isn't this mere Whataboutism?
https://en.wikipedia.org/wiki/Whataboutism
https://en.wikipedia.org/wiki/Whataboutism
Not everything is "Whataboutism". The parent poster wants to know how we should treat various uses of energy in the context of calls for the outright banning of specific uses. How can you expect them to talk about that topic without talking about the various uses of energy that currently exist?
Crypto is currently the only viable reason to overbuild renewables so we can expand their capacity faster than the battery technology allows us.
Just tax the carbon sources and ban building new coal power plants or reactivating defunct ones.
Instead of downvoting please give me one other example why would rational market entity build more renewables than to satisfy demand when production peeks. Because to go full renewables without batteries (and we barely have any when compared to our renewables) we need to always meet the demand even when renewable energy production is the lowest. And what should rational market entity do with the power at all other times where production is far higher than demand?
Because "mine cryptocurrencies with it" seems like the only reasonalble answer in the world where cryptocurrencies exist and people with too much money buy them enthusiastically.
Just tax the carbon sources and ban building new coal power plants or reactivating defunct ones.
Instead of downvoting please give me one other example why would rational market entity build more renewables than to satisfy demand when production peeks. Because to go full renewables without batteries (and we barely have any when compared to our renewables) we need to always meet the demand even when renewable energy production is the lowest. And what should rational market entity do with the power at all other times where production is far higher than demand?
Because "mine cryptocurrencies with it" seems like the only reasonalble answer in the world where cryptocurrencies exist and people with too much money buy them enthusiastically.
It's amazing to me that the real answer on how to make renewable energy economical (while avoiding the ecological toxicity of building utility-scale batteries) are getting downvoted.
[deleted]
Exactly! Just because you don't think something has value doesn't make it so. Value is a matter for the market to decide.
Electricity usage has almost no negative externalities. Electricity production does. Attacking people for using their own resources on something that they find to be useful and worthwhile is foolish. Confront the actual problem, and quit harassing innocent third parties.
Electricity usage has almost no negative externalities. Electricity production does. Attacking people for using their own resources on something that they find to be useful and worthwhile is foolish. Confront the actual problem, and quit harassing innocent third parties.
> If that's the case, who's the arbiter of what's "too much" power for a use case?
I see a lot of people replying with a slippery slope argument of this nature, which makes me think I should explain my argument better.
I'm not arguing that burning electricity alone is the problem. I'm arguing that burning electricity for the direct purpose of making a financial product is a problem for society, when 1) the financial product explicitly incentivizes burning up as much as you can to make more money and/or 2) burning up that energy can be alleviated by other technical solutions.
I'm not arguing that mining should be illegal. I'm saying the 'sale' of the results of that mining should be illegal. Using or making incandescent lightbulbs is not illegal, but the sale of them is banned or restricted in large portions of the world [1]. Less harmful alternatives exist, so sale is disincentivized, the world moves on.
This is not the government deciding how you spend energy resources. You can continue to mine all you want. But you shouldn't be rewarded for that.
One thing I should point out is that I recognize that an alternative solution for these incentives is to make electricity always so expensive that it costs more money in electricity spend to mine crypto than you can make money of it. Make electricity price depend on crypto price. Needless to say I don't see that working out :)
[1]: https://en.wikipedia.org/wiki/Phase-out_of_incandescent_ligh...
I see a lot of people replying with a slippery slope argument of this nature, which makes me think I should explain my argument better.
I'm not arguing that burning electricity alone is the problem. I'm arguing that burning electricity for the direct purpose of making a financial product is a problem for society, when 1) the financial product explicitly incentivizes burning up as much as you can to make more money and/or 2) burning up that energy can be alleviated by other technical solutions.
I'm not arguing that mining should be illegal. I'm saying the 'sale' of the results of that mining should be illegal. Using or making incandescent lightbulbs is not illegal, but the sale of them is banned or restricted in large portions of the world [1]. Less harmful alternatives exist, so sale is disincentivized, the world moves on.
This is not the government deciding how you spend energy resources. You can continue to mine all you want. But you shouldn't be rewarded for that.
One thing I should point out is that I recognize that an alternative solution for these incentives is to make electricity always so expensive that it costs more money in electricity spend to mine crypto than you can make money of it. Make electricity price depend on crypto price. Needless to say I don't see that working out :)
[1]: https://en.wikipedia.org/wiki/Phase-out_of_incandescent_ligh...
> who's the arbiter of what's "too much" power for a use case?
Congress, courts, Department of Energy.
Congress, courts, Department of Energy.
> If that's the case, who's the arbiter of what's "too much" power for a use case?
The legislature and the regulatory agencies it has created, obviously.
The exact same way literally every other environmental regulation has ever been passed.
There are entire divisions of agencies dedicated to drawing the line of "too much" in all sorts of areas, for pollution, poisons, contamination, energy usage, etc. In fact, pretty much everyone but extreme libertarians agrees this is one of the main functions of government.
So while you might not agree on the resulting policy or even the mechanisms that arrived at it, it is a solved problem. You don't need to wonder how we'd accomplish it -- that part is easy.
The legislature and the regulatory agencies it has created, obviously.
The exact same way literally every other environmental regulation has ever been passed.
There are entire divisions of agencies dedicated to drawing the line of "too much" in all sorts of areas, for pollution, poisons, contamination, energy usage, etc. In fact, pretty much everyone but extreme libertarians agrees this is one of the main functions of government.
So while you might not agree on the resulting policy or even the mechanisms that arrived at it, it is a solved problem. You don't need to wonder how we'd accomplish it -- that part is easy.
The arbiter of what's "too much" power for a use case is the fact that proof of work systems are literally designed to waste resources / power.
Last time I checked, Facebook isn’t designed to adjust its computational difficulty in order to suck up any amount of energy thrown at it to do the same (pitiful) amount of work.
> If that's the case, who's the arbiter of what's "too much" power for a use case?
The difference is that Facebook’s energy use potential is limited and gets better with improved computer tech.
There is a limit to how much analysis you can do. As you get more efficient hardware, the energy use would go down. Facebook also invests a lot of effort in optimizing their code to run more efficiently.
With proof of work crypto, the only limit is the price of crypto. Despite any efficiency gains, you can always expect the energy use to scale with the price of crypto. For example, a 10x more efficient miner, won’t cause 10x less energy use, it may actually increase energy use as more people mine with higher rate electricity.
There is a chance that we develop a situation that the most monetarily efficient thing you could do with electricity is to mine proof of work crypto. If that becomes the case, then even a carbon tax won’t help because proof-of-work crypto can easily pay the tax compared to all the other uses of electricity.
The difference is that Facebook’s energy use potential is limited and gets better with improved computer tech.
There is a limit to how much analysis you can do. As you get more efficient hardware, the energy use would go down. Facebook also invests a lot of effort in optimizing their code to run more efficiently.
With proof of work crypto, the only limit is the price of crypto. Despite any efficiency gains, you can always expect the energy use to scale with the price of crypto. For example, a 10x more efficient miner, won’t cause 10x less energy use, it may actually increase energy use as more people mine with higher rate electricity.
There is a chance that we develop a situation that the most monetarily efficient thing you could do with electricity is to mine proof of work crypto. If that becomes the case, then even a carbon tax won’t help because proof-of-work crypto can easily pay the tax compared to all the other uses of electricity.
It's easier to get Facebook to be carbon neutral because they are a centralized institution, and it only takes a committed government to zero down on a corporation and force them to move to clean energy or pay a carbon tax.
With crypto it's too decentralized to implement either.
> who's the arbiter of what's "too much" power for a use case
Ultimately Mother Nature will be the arbiter. If people spend too much time arguing about politics instead of either lowering power usage or moving to clean energy, those people will be killed sooner or later.
With crypto it's too decentralized to implement either.
> who's the arbiter of what's "too much" power for a use case
Ultimately Mother Nature will be the arbiter. If people spend too much time arguing about politics instead of either lowering power usage or moving to clean energy, those people will be killed sooner or later.
> So burning electricity on running a cryptocurrency is not right, but burning electricity on running servers for Facebook or user tracking is all right? If that's the case, who's the arbiter of what's "too much" power for a use case?
Yep, I hate to say it, but even FB is more useful compared to BTC. No one uses BTC for actual payment but to hold a value. People holding BTC could just switch to MtG cards and saved tons of energy without losing any benefits that they are currently using.
Yep, I hate to say it, but even FB is more useful compared to BTC. No one uses BTC for actual payment but to hold a value. People holding BTC could just switch to MtG cards and saved tons of energy without losing any benefits that they are currently using.
We gotta optimize the bottleneck (and future bottlenecks).
Facebook is net-zero emissions.
> If that's the case, who's the arbiter of what's "too much" power for a use case?
"If there is a clear and obvious better with minimal impact." It's just that simple.
We make choices like this all the time. Here in the US we set CARB rules to slow emissions but we don't just ban old cars even though that would be better for the environment. Grey is okay in laws if the black and white bit behind it is clear! (Reduce emissions if possible with least possible impact on people.) Otherwise you will never be able to improve anything until the harmful methods have grown too much.
"If there is a clear and obvious better with minimal impact." It's just that simple.
We make choices like this all the time. Here in the US we set CARB rules to slow emissions but we don't just ban old cars even though that would be better for the environment. Grey is okay in laws if the black and white bit behind it is clear! (Reduce emissions if possible with least possible impact on people.) Otherwise you will never be able to improve anything until the harmful methods have grown too much.
> who's the arbiter of what's "too much" power for a use case?
The king. The digital crypto king.
The king. The digital crypto king.
I'm not a user of Facebook, but is their electrical use near bitcoin levels?
The quick google says facebook uses 5 while bitcoin uses 143 terawatt-hours
The quick google says facebook uses 5 while bitcoin uses 143 terawatt-hours
This isn't exactly what you're talking about, but I keep waiting for Google's Chrome team to add an energy rating icon to the browser that gives you a rough feel for how energy intensive a given page is.
At some point the shaming would begin, web devs would respond, and then I'd generally get what I'm really after -- much faster page load times!
At some point the shaming would begin, web devs would respond, and then I'd generally get what I'm really after -- much faster page load times!
The difference is that Facebook is actually using electricity to provide services that somebody wants. It's just that you happen to disagree with the value of this service. Meanwhile, Bitcoin uses a country's worth of electricity just to provide a tiny amount of accounting.
Facebook used 5 TWhr in 2019 (citation: totally unverified top summary from google). Bitcoin alone is estimated to have used 110 TWhr in a year. To put that in perspective, that is sixfold the power output of the Diablo Canyon Nuclear Power Plant. The Diablo Canyon Nuclear Power Produces power on the order of magnitude of detonating two small atomic bombs per day.
The key difference is that I'm certain that Facebook makes continuous efforts to use less energy. Maybe not for environmental reasons, but they have an economic incentive to increase efficiency.
Regulating the energy consumption/efficiency is more akin to fuel efficiency standards for cars.
Regulating the energy consumption/efficiency is more akin to fuel efficiency standards for cars.
The elephant in the room is bitcoin literally requires the mass consumption of computation to work - the more the better. And it was designed this way. In comparison, Facebook and industrial processes work to make their processes more efficient and use less resources for their workload. Bitcoin will just gobble up any efficiency to do more mining and end up consuming the same amount of resources.
Bitcoin is an endless energy pit. The same isn't true of things like Facebook.
Bitcoin is an endless energy pit. The same isn't true of things like Facebook.
Burning energy to prove that you burned energy is not right. You can run cryptocurrency without requiring proof that burned electricity.
You don't need to worry about how much electricity was burned, only that it wasn't done in exchange for a plaque saying "I filled a swimming pool with gasoline, then lit it on fire"
You don't need to worry about how much electricity was burned, only that it wasn't done in exchange for a plaque saying "I filled a swimming pool with gasoline, then lit it on fire"
I know something about addiction so to me Bitcoin enthusiasts sound like alcoholics who justify their drinking by saying "many people drink and doctors say a little drinking is good for you so lay off me." The fact that I couldn't even criticize Bitcoin's energy usage on HN util Elon Musk came out against it reinforces my opinion that it's an addiction. I imagine Bitcoin is a game like poker with a bluffing and holding strategy. Bitcoin as it is currently played has many addicted to it without regard to disastrous environmental consequences.
> and how do you punish those who use too much?
CO2 taxes
CO2 taxes
You people obsessed with reducing humanity’s energy usage are so tiresome. Anyone who actually cares about the well-being of humanity should be focused on increasing the amount of energy available. I want to climb the kardashev scale, not live in an eco-pod and eat bug burgers so I can scrounge every last joule.
What you want and the realities of our current world are two very, very different things.
The reality of the current world is that a lot of people feel exactly like that, so you're unlikely to convince them to change their behaviour.
Rather than deny that reality, you're better off working with it to produce more, but cleaner, energy.
Rather than deny that reality, you're better off working with it to produce more, but cleaner, energy.
Necessity is the mother of invention.
[edit] - downvotes because I used the word "mother" maybe? I don't understand this community.
[edit] - downvotes because I used the word "mother" maybe? I don't understand this community.
We all want luxury, but at some point the changes that come from energy usage will be very unluxurious, no?
Yeah, maybe when we’ve exhausted the sun’s net output.
Bingo! The more energy a system has available the greater capability it has. For example, if a mining community is able to generate cheap excess power it opens up possibility for local smelting and foundry industries.
I think of each community as a game of Civilization. As you progress you unlock higher rungs of the tech ladder. Exporting your raw materials to later import finished products made from them is a waste of resources and stagnates the local industries at the raw material stage.
What industries could be developed in your community if the power was available?
I think of each community as a game of Civilization. As you progress you unlock higher rungs of the tech ladder. Exporting your raw materials to later import finished products made from them is a waste of resources and stagnates the local industries at the raw material stage.
What industries could be developed in your community if the power was available?
Again with this same tired nonsense on Hacker News. Famous for censoring worthwhile comments to death while leaving up misinformed "curious" posts that mislead everyone. Bitcoin is using half of the power as banking systems. Bitcoin is using half of the power, of the gold industry. Might I suggest, if you think you can suggest banning things for using too much carbon, that you first quit working, quit driving your vehicles, and disconnect the power in your house. I don't think it's good for the environment in you doing so. In fact, your carbon consumption should be banned. Turn your computers off. Unplug your wasteful device chargers, you've had enough.
The amount of energy used is only one aspect of the matter. The other is value derived from that energy. I think it is safe to say that regular banking provides not just twice the value of Bitcoin, but in fact probably two orders of magnitude more. Pretty much everyone uses regular banking, while pretty much nobody uses Bitcoin, and not only they use banking more, they use it many times a week or even a day. The comparison is not even close.
And when the comparison is not even close, why are you the one making it? All you've stated was an old opinion and not a fact about what is more useful, or how they are used. It's totally fine for you to have just said "I don't understand either banking or Bitcoin whatsoever." Bitcoin is going to get a lot more global over the next several years in it's use cases and for savings. I hope to see you commenting later on after becoming more informed about our current times of inflation and what the people want, vs what is forced on everyone so that they have no way to save hard money. The revolution isn't going to wait for everyone who chooses to be truly ignorant about Bitcoin. And there is only Bitcoin.
The regular banking system leaks your purchasing power over time via the mechanism of inflation. The regular banking system relies on the US Dollar which is backed by proof of violence - aka the largest military industrial complex ever created. Externalities are a net negative. It's important to consider the externalities of every system. When compared with the death and destruction and burning oil fields in Iraq, Libya, Syria etc, the cost of proof of work seems trite.
Something tells me that a user named "BTCOG" is not here to provide rigorous objective analysis but okay lets attack the strawman.
The number of bitcoin addresses with a balance is 30 million. The number of bank accounts is in the billions.
As you said, BTC is two orders of magnitude less efficient than banks assuming mining provides the same value to people as ALL of the services banks provide including loans, savings, and money transfer which IT DOES NOT.
The number of bitcoin addresses with a balance is 30 million. The number of bank accounts is in the billions.
As you said, BTC is two orders of magnitude less efficient than banks assuming mining provides the same value to people as ALL of the services banks provide including loans, savings, and money transfer which IT DOES NOT.
This is one of those "Freakonomics" type ideas.
On the surface this sounds like bitcoin's PoW use will simply stop. It's actually the entire opposite.
When governments ban it, they go after sizeable, identifiable organizations running these operations, that is their only choice. These operations are optimized in their energy usage, because it's only in their interest to reduce their consumption relative to the value of the coin they mine.
The moment these operations are shutdown, there is a massive sink in the hash rate, smaller operations and hobbyists will rush in to fill it. Hash rate gradually climbs back up and instead you have 10x the energy usage because you can no longer run the PoW in a scalable way.
On the surface this sounds like bitcoin's PoW use will simply stop. It's actually the entire opposite.
When governments ban it, they go after sizeable, identifiable organizations running these operations, that is their only choice. These operations are optimized in their energy usage, because it's only in their interest to reduce their consumption relative to the value of the coin they mine.
The moment these operations are shutdown, there is a massive sink in the hash rate, smaller operations and hobbyists will rush in to fill it. Hash rate gradually climbs back up and instead you have 10x the energy usage because you can no longer run the PoW in a scalable way.
I think you're probably right. Money always finds a way.
The proposal is to stop Bitcoin/PoW being money. Other forms of money will find a way.
But in the mean time the value is likely to have tanked, because if they can't trivially be traded for national currency, the interest in them will wither.
This is the thing that has always bugged me about cryptocurrency - people are only passionate about it because they want to make more traditional currency with it. Then they adopt this "decentralized" rhetoric. It's always felt hollow. If owning/trading bitcoin became a crime, it'd be done.
Ever since Dogecoin had a moment, there's now a million coins trying to engineer their own "moonshot".
This is on top of the security issues and of course the energy issues. Cryptocurrency is garbage.
Ever since Dogecoin had a moment, there's now a million coins trying to engineer their own "moonshot".
This is on top of the security issues and of course the energy issues. Cryptocurrency is garbage.
The other choke point is conversion to and from USD. With a law, BTC loses any corporate 'investment' (eg, Tesla), and coinbase stops converting to/from USD, making it much more of a pain to work with.
I deleted my comment that was essentially saying the same. For once, USD's extra-territorial jurisdiction could definitely be put to good use. I don't understand why big political parties haven't thought of that. It's an easy win, and it would bother an insignificant portion of their voter base.
This would be like playing whack-a-mole. Other PoW cryptocurrencies are out there and it does not make sense to just shut down the mining hardware. Miners will just mine something else.
The only answer that works is a carbon tax.
The only answer that works is a carbon tax.
> On the surface this sounds like bitcoin's PoW use will simply stop. It's actually the entire opposite.
Not really. It wouldn’t stop, but it would decline substantially.
Smaller operations and hobbyists only participate because it’s worth money to do so.
Making Bitcoin illegal would kill the argument that it will eventually displace fiat, and relegate it to being used only for illegal purposes.
The incentive to mine a currency that can only be used for crime as a hobbyist would end up being low.
Not really. It wouldn’t stop, but it would decline substantially.
Smaller operations and hobbyists only participate because it’s worth money to do so.
Making Bitcoin illegal would kill the argument that it will eventually displace fiat, and relegate it to being used only for illegal purposes.
The incentive to mine a currency that can only be used for crime as a hobbyist would end up being low.
That's assuming PoW cryptos would remain attractive to smaller operations and hobbyists. I'm not sure that's a given. If no business can change your coins to fiat, and no business could accept your coins in the first place (not that they really do now, but whatever), your options for getting anything out of your coins is... what? Posting on craigslist to find people to meet up for illicit localcoin transactions?
And if you can't really do anything with your coins but have your coins, why would people rush out to break the law to mine them?
And if you can't really do anything with your coins but have your coins, why would people rush out to break the law to mine them?
The idea was to ban trading, not mining. If Coinbase and all the other legitimate companies that facilitate crypto markets for U.S. citizens had to drop PoW coins it could tank the price significantly and set the coin mining industry back to when it wasn't such a huge problem for energy use and GPU supply. Speculation would move to PoS currencies and BTC would stay valuable, but would act more like an altcoin.
Currently the trade of illegal drugs is banned. Have a look how that goes.
Unlike drugs which have limited substitutes (alcohol and caffeine I guess), PoW currencies would have several functionally equivalent replacements. I doubt we'd end up ravaging underprivileged communities as they turned to black market Bitcoin.
The USD and the Zimbabwe dollar are functionally equivalent, yet, I'm sure you're not saving in ZD.
You're only proving our point. USD is a reasonable currency for savings and/or as world-wide currency as long as it's liquid, non-volatile, backed by a big, stable and powerful economy. This could change, but not overnight.
BTC's main uses (speculation and laundering) are possible only as long as it can be exchanged into fiat. This can change tomorrow if the right strings are pulled.
BTC's main uses (speculation and laundering) are possible only as long as it can be exchanged into fiat. This can change tomorrow if the right strings are pulled.
[deleted]
If you can't speculate online and in a convenient, legal way, the value of BTC and friends will certainly tank.
Let people trade cryptocurrency to fiat in person all they want, it's completely insignificant.
Let people trade cryptocurrency to fiat in person all they want, it's completely insignificant.
trading is only a small portion of bitcoin's market cap. most coins are outside of exchanges, in noncustodial cold storage. even without smooth trading platforms people will trade bitcoin peer-to-peer because bitcoin solves real world problems
This is a terrible analogy. Drugs are inherently desirable. There is nothing inherently desirable about crypto coins
[deleted]
You can't have proof of stake drugs. (or other better analogies for really really near substitutes)
It turns out laws do sometimes have effects.
It turns out laws do sometimes have effects.
[deleted]
https://bisq.network/ exists, you can trade bitcoin p2p already.
[deleted]
[deleted]
https://www.americanscientist.org/article/freakonomics-what-...
We will see, the trouble with Freakanomics, is that it had quite a few avoidable errors in it, so maybe it's not the best example.
We will see, the trouble with Freakanomics, is that it had quite a few avoidable errors in it, so maybe it's not the best example.
Doesn't the mining difficulty decrease then though without the massive mining farms, and thus the electricity required decreases? I'm not an expert in crypto mining.
> smaller operations and hobbyists will rush in to fill it. Hash rate gradually climbs back up and instead you have 10x the energy usage because you can no longer run the PoW in a scalable way.
This is false. Miners will spend about the same amount of money they get from block reward to run their operation. Asymptotically, this money is spent to buy electricity. This is the result of competitive pressure from other miners. What you will observe instead is the same amount of electricity burned but with 10x less hash rate.
This is false. Miners will spend about the same amount of money they get from block reward to run their operation. Asymptotically, this money is spent to buy electricity. This is the result of competitive pressure from other miners. What you will observe instead is the same amount of electricity burned but with 10x less hash rate.
Fucking thank you. I get just as many downvotes when I suggest this but it's very obviously the right thing to do.
PoW doesn't scale. It eats up power needlessly and we're only stuck on it because the original BTC was a PoW cryptocoin. Simply banning trading of PoW coins would do mounds of good - the crypto community would be better streamlined to move toward PoS coins of the future and environmentalists wouldn't have to waste their resources lobbying to ban BTC anymore.
PoW doesn't scale. It eats up power needlessly and we're only stuck on it because the original BTC was a PoW cryptocoin. Simply banning trading of PoW coins would do mounds of good - the crypto community would be better streamlined to move toward PoS coins of the future and environmentalists wouldn't have to waste their resources lobbying to ban BTC anymore.
> Banning their trade won't categorically stop PoW cryptocurrencies. What it should do is completely tank their value and get the world to move on to less destructive coins.
This ban needed to be internationally, though. Pretty difficult to enforce on a global scale. And then it would only have a short term influence on the price of, say, Bitcoin, until enough “black” mining power emerges.
I would just relax. Bitcoin is not going to destroy the planet. In the long run it’s going to be a niche financial tool compared to the scale of Ethereum or other competitors (Cardano, Solana or Algorand). It’ll be the PoS enabled DeFi networks that are going to disrupt the banking business.
This ban needed to be internationally, though. Pretty difficult to enforce on a global scale. And then it would only have a short term influence on the price of, say, Bitcoin, until enough “black” mining power emerges.
I would just relax. Bitcoin is not going to destroy the planet. In the long run it’s going to be a niche financial tool compared to the scale of Ethereum or other competitors (Cardano, Solana or Algorand). It’ll be the PoS enabled DeFi networks that are going to disrupt the banking business.
In the long run, it's going to be very green. There are Crypto Climate Accord groups working to ensure Bitcoin is carbon-neutral by 2030. What is being done currently is making leaps and bounds in using solar, hydro, wind and trapped energy for bitcoin mining. It's pushing industry to green. Not the phony narrative that's constantly pushed by people who are quite literally, spreading allowed disinformation across HackerNews for the past several years on end.
Are the people downvoting the above comment considering things like trapping excess flare gas [1]? This is energy that is literally wasted otherwise, and would be vented into the atmosphere, if not used for PoW mining (or put to some other undetermined use, but PoW is the only profitable alternative that has made sense so far vs just flaring the gas).
Maybe there need to be more guidelines around how to use excess energy instead of coal, but to totally disregard that PoW could be mined from excess energy is shortsighted. Flare gas is just one example.
[1] https://oilmanmagazine.com/how-and-why-natural-gas-flaring-i...
Maybe there need to be more guidelines around how to use excess energy instead of coal, but to totally disregard that PoW could be mined from excess energy is shortsighted. Flare gas is just one example.
[1] https://oilmanmagazine.com/how-and-why-natural-gas-flaring-i...
> This may be a radical take, but I think nations should introduce some unprecedented legislation: ban trade of proof of work cryptocurrencies.
That's not only radical, but a grotesque knee jerk reaction.
If you think about renewable energy, there's a problem of mismatched production with consumption and transmission. This causes wasted energy (or energy that is very low value), which makes renewable energy projects less viable.
Sure, one obvious way to address that is to add batteries to store such energy. Now, go mine (and refine) enough lithium to build utility-scale batteries. That's a huge environmental issue that no one wants to talk about, specially Tesla/Elon.
What's a competitor to energy batteries? Proof-of-work mining of bitcoin: it make renewable energy projects economically viable, because the energy of low-usage times can be used to mine bitcoin, which can pay for energy of high-usage times.
If there's an environmental/carbon cost to BTC mining, then attach a carbon tax to it (or something like that).
That's not only radical, but a grotesque knee jerk reaction.
If you think about renewable energy, there's a problem of mismatched production with consumption and transmission. This causes wasted energy (or energy that is very low value), which makes renewable energy projects less viable.
Sure, one obvious way to address that is to add batteries to store such energy. Now, go mine (and refine) enough lithium to build utility-scale batteries. That's a huge environmental issue that no one wants to talk about, specially Tesla/Elon.
What's a competitor to energy batteries? Proof-of-work mining of bitcoin: it make renewable energy projects economically viable, because the energy of low-usage times can be used to mine bitcoin, which can pay for energy of high-usage times.
If there's an environmental/carbon cost to BTC mining, then attach a carbon tax to it (or something like that).
By the way.
If one thinks about tracking the carbon cost of a mined BTC (based on the energy source used to mine it) such that a carbon tax can be accurately exacted, the usage of blockchain to track carbon offsets and cost is a pretty obvious thing that comes to mind.
If one thinks about tracking the carbon cost of a mined BTC (based on the energy source used to mine it) such that a carbon tax can be accurately exacted, the usage of blockchain to track carbon offsets and cost is a pretty obvious thing that comes to mind.
i'd prefer you ban cars
Yeah man, Government should point guns at people who don't comply with your ideology! Let's advocate violence against people because they do stuff we don't like!
I’m sure the recent, existential hand-wringing over Bitcoin energy consumption has nothing at all to do with upcoming ethereum changes.
It’s all bullshit and hype — the crypto equivalent of the Chick-Fil-A cows saying “eat more chicken”.
It’s all bullshit and hype — the crypto equivalent of the Chick-Fil-A cows saying “eat more chicken”.
That's a slippery slope of an argument.
If the government starts arbitrating on what is a judicious use of energy on environmental grounds, then you're a short step away from banning, say, beef production.
If the government starts arbitrating on what is a judicious use of energy on environmental grounds, then you're a short step away from banning, say, beef production.
This certainly seems like an unnecessarily oppressive stance to take, all effectively at the whim of your own personal aesthetics.
There are tons of things that people do that I might deem not worth the environmental impact, like flying a hundred thousand miles a year for business, or eating beef, or driving to work every day, or having bigger houses and lawns than they need. Seems kind of arbitrary to allow most wasteful things that people do but draw a line at being able to participate in a certain kind of blockchain. The per-person impact of holding and transacting with bitcoin is not egregiously high compared to all the other things people do in their day to day life.
And based on ethereum's move here, perhaps people are starting to vote with their wallets anyway and such dramatic limiting measures aren't needed?
There are tons of things that people do that I might deem not worth the environmental impact, like flying a hundred thousand miles a year for business, or eating beef, or driving to work every day, or having bigger houses and lawns than they need. Seems kind of arbitrary to allow most wasteful things that people do but draw a line at being able to participate in a certain kind of blockchain. The per-person impact of holding and transacting with bitcoin is not egregiously high compared to all the other things people do in their day to day life.
And based on ethereum's move here, perhaps people are starting to vote with their wallets anyway and such dramatic limiting measures aren't needed?
>people are starting to vote with their wallets anyway
Did you mean "the rich"?
Did you mean "the rich"?
"The Big Scary Scare Quotes Rich That We Should Be Eating"? No, that's not exclusively who I mean.
The economic and monetary risks of deflationary coins are potentially much greater than the environmental risks imo (Even Douglas Adams tried to warn us: https://benoitessiambre.com/specter.html ).
You don't necessarily need to ban the coins to fix this aspect however, just make sure they don't get integrated in the financial system too much. They're basically digital gold. Gold was ok until central banks tried to anchor to it which caused the Great Depression and maybe even WWII.
You don't necessarily need to ban the coins to fix this aspect however, just make sure they don't get integrated in the financial system too much. They're basically digital gold. Gold was ok until central banks tried to anchor to it which caused the Great Depression and maybe even WWII.
As a technical person, I think we should be a little more careful than to ban a technology because there's a proposal for a newer tech that could work (knowing if it works is harder than a posting on a website saying it's going great in beta). Crypto at all is risky and the tech is uncertain. Seems pretty extreme to get the guns involved on the premise someone somewhere can do it better.
You want air conditioning?
You want to eat steak?
You want some microprocessors with that guided missile?
Buy bitcoin.
https://web.archive.org/web/20210116135412/https://taaalk.co...
Buy bitcoin.
https://web.archive.org/web/20210116135412/https://taaalk.co...
How about we just make people pay for their negative externalities, and let them do whatever they want. Tonnes of things people do are wasteful, no one needs a sports car either, but for some people it is worth paying extra for it. Why should it matter what I'm using my electricity for as long as I pay for the negative effects.
If you want to encourage other uses of electricity, subsidize them, don't just ban arbitrary forms of consumption.
If you want to encourage other uses of electricity, subsidize them, don't just ban arbitrary forms of consumption.
> How about we just make people pay for their negative externalities, and let them do whatever they want.
Well, for one, because that tends to mean "rich folks and large companies can act with impunity, everyone else not so much".
For two, we actually do discriminate quite happily between different uses of things. Maybe it's OK to keep energy prices low for households, as a compromise, but not for crypto mining?
Well, for one, because that tends to mean "rich folks and large companies can act with impunity, everyone else not so much".
For two, we actually do discriminate quite happily between different uses of things. Maybe it's OK to keep energy prices low for households, as a compromise, but not for crypto mining?
Whats the problem with rich fold acting with impunity, so long as they pay for what they use? If someone burns enough electricity to power 1000 homes, but they pay for the environmental impact, and are charged enough for the electricity to fund building more generation capacity, that's a net win. Giving each household some amount of free or subsidized power makes sense. If they want to burn that power crypto mining that's their decision.
> If someone burns enough electricity to power 1000 homes, but they pay for the environmental impact ...
Well, firstly, are we even sure that's really possible?
> Giving each household some amount of free or subsidized power makes sense
Which is basically exactly what I was talking about - we can and do decide that some uses are better than others, and use regulation (some of which may be tax or credit) to achieve that.
We already do this. I'm not sure why people are so aghast that we might do it some more for PoW cryptocurrencies.
Well, firstly, are we even sure that's really possible?
> Giving each household some amount of free or subsidized power makes sense
Which is basically exactly what I was talking about - we can and do decide that some uses are better than others, and use regulation (some of which may be tax or credit) to achieve that.
We already do this. I'm not sure why people are so aghast that we might do it some more for PoW cryptocurrencies.
We're supposed to just ban uses of energy we don't like? Why not a complete and total ban on electricity consumption by the adtech industry? Surveillance capitalism does more damage to society than these little coins ever will.
I agree that this is good - the world probably only needs one blockchain that is secured by PoW for the most fundamental use cases.
Ethereum will drive and that is good - but it solves different problems compared to Bitcoin.
In regards to banning PoW, sounds like the net neutrality discussions honestly... so to me that does not make sense for the same reasons.
And here is the kicker, because its permissionless, it can't be stopped.
Ethereum will drive and that is good - but it solves different problems compared to Bitcoin.
In regards to banning PoW, sounds like the net neutrality discussions honestly... so to me that does not make sense for the same reasons.
And here is the kicker, because its permissionless, it can't be stopped.
> ban trade of PoW cryptocurrencies
That might cause a financial crash of the cryptocurrency market, with the trust issues, etc. It wouldn't be wise.
That might cause a financial crash of the cryptocurrency market, with the trust issues, etc. It wouldn't be wise.
would be funny to look at the internet for a few days though
Holy shit, lol.
This is an insane take. Proof of Stake is NOT secure, the stakers can collude to reorganize the chain at almost no cost. This is like the exact system we tried to get away from, the USD system is also a Proof of Stake.
This is an insane take. Proof of Stake is NOT secure, the stakers can collude to reorganize the chain at almost no cost. This is like the exact system we tried to get away from, the USD system is also a Proof of Stake.
There is no place for a PoS protocol layer on the internet, I'm willing to die on this hill.
I’ve thought through this over the last few days and I don’t think it’s viable unless all countries enact the ban at the same time. Imagine country A bans trade or mining of PoW coins - that puts the citizens of country A at a disadvantage to citizens of other countries, and encourages holders of PoW coins in country A to exfiltrate wealth and capital from country A.
You end up needing to solve the same type of problem that PoW solves in order to enact a PoW ban simultaneously across all countries - how can all parties trust that every other party is being honest and will follow through (Byzantine Generals problem)?
You end up needing to solve the same type of problem that PoW solves in order to enact a PoW ban simultaneously across all countries - how can all parties trust that every other party is being honest and will follow through (Byzantine Generals problem)?
Sure, ban away all PoW crypto, but don't you dare touch my YouTube cat videos and Netflix series ! (that likely use a TON of bandwidth)
Jokes aside it's really hard to decide what's reasonable energy usage from waste. Ultimately the real question is who gets to make that decision.
And overall, the idea of government getting to decide what are acceptable uses of energy and what isn't is actually terrifying
Jokes aside it's really hard to decide what's reasonable energy usage from waste. Ultimately the real question is who gets to make that decision.
And overall, the idea of government getting to decide what are acceptable uses of energy and what isn't is actually terrifying
> ban trade of proof of work cryptocurrencies.
I'm a crypto-skeptic, but why would I ever hold a crpytocurrency in that scenario? If governments would ban it for environmental goals, they'll ban it for political goals, too.
The only interesting bit is cryptocurrencies would have to legitimately bring something new to the table that's actually better than the existing financial system in order to be viable.
I'm a crypto-skeptic, but why would I ever hold a crpytocurrency in that scenario? If governments would ban it for environmental goals, they'll ban it for political goals, too.
The only interesting bit is cryptocurrencies would have to legitimately bring something new to the table that's actually better than the existing financial system in order to be viable.
We don't need to ban PoW crypto entirely, just tax the carbon emissions associated with it. If miners can switch their entire operation to geothermal in Iceland, then why should I care?
I can see that this idea comes from a place of good intentions, but I think this is a slippery slope. With this idea, PoW Ethereum is banned, but PoS Ethereum is ok; how does one even regulate that? And what of things like Chia (proof of space, i.e. "let's hog hard drives")? And what about L2 solutions? And how much is too much? Should Ethereum 2 be banned if Nano is shown to be more scalable? Where does one draw the line?
I think that at some point, PoW will become so economically unfeasible that it'll simply make more sense for miners to ditch those coins and whale up on PoS ones.
I think that at some point, PoW will become so economically unfeasible that it'll simply make more sense for miners to ditch those coins and whale up on PoS ones.
Banning a certain kind of computation is a novel idea. Was this a knee jerk reaction or have you considered all the other types of computation that should not be allowed and why? Do we have an empirical understanding of the negative impacts of these specific kinds of computation, their general threat to humanity, and the negative side effects of regulation?
How do you ban open source software that millions of people already have? It's like banning algebra or something. You can tell people they can't do it but you can only truly ban it to the extent that you can micro monitor and enforce the actions of every person interested in it.
To me this illustrates a lack of understanding of the space.
To me this illustrates a lack of understanding of the space.
While the energy consumption of bitcoin is debatable due to the unknown usage of clean, renewable energy (some reports are at 75%) to to secure the network and prevent bad actors, even for arguments sake, we can agree the energy consumption is extremely large. We also do not know how much energy is required to maintain SWIFT, or the global ACH network and other banking services.
However, some of the biggest plagues to society are rooted in central banking policies that over time devalue a nations currency through excessive money printing backed by nothing, or gambling via derivatives that when a bubble pops requires bailouts. Even worse, where we are now is done via quantitative easing which is a fancy word for more money printing to buy government debts to keep the economy afloat. If Bitcoin or other cryptocurrencies can provide all the same services banks offer (borrowing/lending/saving) and be backed by a finite number ensuring value over time then we, as a society will be less manipulated by politics and therefore experience deflation which will could close wealth gaps.
Bitcoin may have an energy problem but the problems it aims to solve are extremely important as well. “Necessity is the mother of invention.” If Bitcoin can really solve some areas maybe the conversation should be about how can get 100% of BTC energy consumption to be renewable.
However, some of the biggest plagues to society are rooted in central banking policies that over time devalue a nations currency through excessive money printing backed by nothing, or gambling via derivatives that when a bubble pops requires bailouts. Even worse, where we are now is done via quantitative easing which is a fancy word for more money printing to buy government debts to keep the economy afloat. If Bitcoin or other cryptocurrencies can provide all the same services banks offer (borrowing/lending/saving) and be backed by a finite number ensuring value over time then we, as a society will be less manipulated by politics and therefore experience deflation which will could close wealth gaps.
Bitcoin may have an energy problem but the problems it aims to solve are extremely important as well. “Necessity is the mother of invention.” If Bitcoin can really solve some areas maybe the conversation should be about how can get 100% of BTC energy consumption to be renewable.
I'd much rather put kwh limits on proof of work. That would stop large farms that aren't green.
Outside of ethereum, proof of stake is no different than a database. The ownership is so centralized that you only have 3-5 people/organizations approving everything.
The whole point of crypto was to be decentralized, proof of stake is not that. Cardano, solana, they all are pointless as a token because the whole supply is largely owned by a few people.
Outside of ethereum, proof of stake is no different than a database. The ownership is so centralized that you only have 3-5 people/organizations approving everything.
The whole point of crypto was to be decentralized, proof of stake is not that. Cardano, solana, they all are pointless as a token because the whole supply is largely owned by a few people.
Who decides what is a good use of energy and what isn't?
It might be worth noting that not all Proof-of-Work is just finding hashes, newer cryptocurrencies make more economic and intelligent use of the work used for proof.
> proof-of-work simply just isn't necessary to have cryptocurrency.
It seems kind of necessary to achieve wide distribution and avoid wealth concentration.
It seems kind of necessary to achieve wide distribution and avoid wealth concentration.
By banning them, don't you increase their value by creating scarcity?
Think about it from the other side.
How about continuing research and development of solutions providing cheaper, greener energy instead of sparking righteous war against something that consumes energy based on incompetent social media fart?
The loudest voices against something are typically hypocrites that happily fly on their gas guzzling private jets bitching about people driving their oh so inefficient cars to work.
How about continuing research and development of solutions providing cheaper, greener energy instead of sparking righteous war against something that consumes energy based on incompetent social media fart?
The loudest voices against something are typically hypocrites that happily fly on their gas guzzling private jets bitching about people driving their oh so inefficient cars to work.
This is an Orwellian take to want the government to tell you how you're allowed to use electricity. Is watching TV a waste of energy? How much energy goes into steaming Netflix?
If you want to target an externality of the free market, do it directly: simply tax emissions. This will guide the market towards greener energy generation and direct capital out of activities that produce emissions without generated value.
If you want to target an externality of the free market, do it directly: simply tax emissions. This will guide the market towards greener energy generation and direct capital out of activities that produce emissions without generated value.
What if you simply don't know enough to not know that you're both wrong and being lied to by the ETH marketing team? Would you be embarrassed that you believed rhetoric? Probably means you would be easily susceptible to most conspiracy theories.
Even if banning PoW were agreeable on logical grounds (ie, overcoming the arguments of the sibling comments to this one), is there any reason to believe that such a law will:
* Reduce trade * Reduce value * Reduce carbon use?
Is there a case ever where an illicit market found a price equilibrium which was lower than the licit one? And, if such a ban does cause the price go up, won't the same incentives cause continued mining competition?
* Reduce trade * Reduce value * Reduce carbon use?
Is there a case ever where an illicit market found a price equilibrium which was lower than the licit one? And, if such a ban does cause the price go up, won't the same incentives cause continued mining competition?
> This may be a radical take, but I think nations should introduce some unprecedented legislation: ban trade of proof-of-work cryptocurrencies.
Unless you want to also ban servers or services that are using deep learning training, decoding massive videos and livestreams on storage systems that are also burning up the planet.
It's not fine to allow PoW cryptocurrencies to continue to burn the planet but collecting mass amounts of user data and using wasteful deep learning training continuously is fine to burn up the planet on GCP, AWS and Azure?
Unless you want to also ban servers or services that are using deep learning training, decoding massive videos and livestreams on storage systems that are also burning up the planet.
It's not fine to allow PoW cryptocurrencies to continue to burn the planet but collecting mass amounts of user data and using wasteful deep learning training continuously is fine to burn up the planet on GCP, AWS and Azure?
Bitcoins "power consumption" has two aspects - mining and processing transactions. The power consumption used for mining (or processing) is directly correlated to the relative earning potential - i.e. bitcoin price - power cost. Mining takes up the vast majority of the computation(s) and mining bitcoin should end somewhere between 2040 and 2050.
That is to say, it's self correcting. If the price of energy increases, there is less mining. Alternatively, the miners are also incentivized to find cheaper or develop cheaper alternatives; this spurs innovation.
If prices rise due to mining, innovation will take place and more energy will be developed.
There's nothing wrong with this mechanism, as it corrects itself. In 2050 when you can no longer mine bitcoin we will that have an abundance of cheap power. Which is the single greatest factor in reducing poverty.
Frankly, I think this comment is off base. So far there have been zero negative measurable impacts from power usage related to crypto.
That is to say, it's self correcting. If the price of energy increases, there is less mining. Alternatively, the miners are also incentivized to find cheaper or develop cheaper alternatives; this spurs innovation.
If prices rise due to mining, innovation will take place and more energy will be developed.
There's nothing wrong with this mechanism, as it corrects itself. In 2050 when you can no longer mine bitcoin we will that have an abundance of cheap power. Which is the single greatest factor in reducing poverty.
Frankly, I think this comment is off base. So far there have been zero negative measurable impacts from power usage related to crypto.
This is a really weak argument. The better argument is we shouldn’t tell people
how to use energy they purchase and to tax consumption of it.
> innovation will take place and more energy will be developed.
This has way too many assumptions baked in. Increased demand will not guarantee a clean supply, nor does it guarantee technological progress in performance of efficiency.
> innovation will take place and more energy will be developed.
This has way too many assumptions baked in. Increased demand will not guarantee a clean supply, nor does it guarantee technological progress in performance of efficiency.
Bitcoin mining uses as much energy as Christmas lights in the USA. Should we ban Christmas lights because of their energy usage? This debate is turning to madness
https://bitcoinist.com/bitcoin-mining-energy-consumption-us-...
https://bitcoinist.com/bitcoin-mining-energy-consumption-us-...
I'd be in favour of banning the use of fossil fuels for corporations mining proof-of-work cryptocurrencies. There is a few examples of Bitcoin miners using Coal power sources!
> Ban their trade because global society shouldn't accept rampant incentives to literally burn up energy
Videogames run GPUs at full capacity too, we should ban them too. No one NEEDS to pretend to be a cowboy for 100+ hours each across 36 million GPUs.
Actually maybe there should be a ban on computing power above mobile CPUs available to non-government bodies, if this really is so devastating to the environment we need to limit the amount of damage people can cause as individuals, why does a normal person need a GPU anyway when smart phone graphics should be enough.
Videogames run GPUs at full capacity too, we should ban them too. No one NEEDS to pretend to be a cowboy for 100+ hours each across 36 million GPUs.
Actually maybe there should be a ban on computing power above mobile CPUs available to non-government bodies, if this really is so devastating to the environment we need to limit the amount of damage people can cause as individuals, why does a normal person need a GPU anyway when smart phone graphics should be enough.
But gamers aren't buying up dozens of GPUs each to pretend to be a cowboy, and they don't pretend to be a cowboy 24/7.
They might only have one GPU each but there are a lot more of them, if even half of all people who bought RDR2 complete it that would be similar to 1.5 billion GPU hours of crypto mining (Eth for example).
32 million bought it, takes about 100 hours to complete runs GPU full capacity.
If we're going to say using GPU computing power is bad for the environment then we can't just stop at crypto because it's convenient. We have to look at all computing and videogames isn't something that should be considered essential either.
32 million bought it, takes about 100 hours to complete runs GPU full capacity.
If we're going to say using GPU computing power is bad for the environment then we can't just stop at crypto because it's convenient. We have to look at all computing and videogames isn't something that should be considered essential either.
Government can already effectively (and is already inadvertently doing so) prevent mining by manipulating energy prices within it's jurisdiction. It does NOT mean that government can easily ban the use of PoW blockchains.
Miners will move to where is is profitable and will be ultimately incentivized to find cheaper (ultimately cleaner) means to mine.
Miners will move to where is is profitable and will be ultimately incentivized to find cheaper (ultimately cleaner) means to mine.
This just sounds like an excuse to ban something that governments (read: the US) are trying to bring under control.
First it was 'but criminals use it'. Now it's 'think of the environment'. What's the next excuse going to be?
First it was 'but criminals use it'. Now it's 'think of the environment'. What's the next excuse going to be?
POW guarantees distributed security better than any other currency so far. POS relies on a _relatively_ small number of nodes to run the network.
POW is more _government_ proof than any other method. To many the threat of central bank digital currencies is justification enough for POW's energy consumption.
POW is more _government_ proof than any other method. To many the threat of central bank digital currencies is justification enough for POW's energy consumption.
What are the attack vectors on PoS. With PoW you need 51% of the mining power to take over the system, which is very labor intensive to set up.
With PoS could you take over all coins by buying 51% of the existing coins? So if the market cap of ETH is 200BB spend 100BB to double your money?
With PoS could you take over all coins by buying 51% of the existing coins? So if the market cap of ETH is 200BB spend 100BB to double your money?
Once the attack goal is achieved the Ethereum value will go to zero. It does not make sense to do this by buying coins, but potentially hackers could get control of such big amount of coins by hacking exchanges, thus bringing whole system to collapse. Similar scenario as in Mr. Robot.
ETC has been 51% attacked 4 times and it's still the 17th largest cryptocurrency.
https://www.coindesk.com/crypto-51-attacks-etc
Furthermore it's become pretty clear from the many attacks on value tokens in Etherum & BSC DeFi that the attacker can move faster that the market and drain any liquidity pools/exchanges that have open offers into something that isn't going to collapse.
The theory early on was that the coin cratering b/c of an attack would be an extra deterrent, but the price of coins that have been successfully 51% attacked says otherwise.
Here's another cryptocurrency in the top 100 that has suffered many 51% attacks.
https://cointelegraph.com/news/bitcoin-gold-blockchain-hit-b...
https://www.coindesk.com/crypto-51-attacks-etc
Furthermore it's become pretty clear from the many attacks on value tokens in Etherum & BSC DeFi that the attacker can move faster that the market and drain any liquidity pools/exchanges that have open offers into something that isn't going to collapse.
The theory early on was that the coin cratering b/c of an attack would be an extra deterrent, but the price of coins that have been successfully 51% attacked says otherwise.
Here's another cryptocurrency in the top 100 that has suffered many 51% attacks.
https://cointelegraph.com/news/bitcoin-gold-blockchain-hit-b...
ETC is PoW, it's a different dynamic than PoS which was the topic of discussion
If I understand the post you are replying to correctly, the point is that being successfully attacked does not necessarily destroy the value of the coin.
Sometimes people argue that a nation state could "shut down" bitcoin for some amount of money -- say $10B. With that, they could buy enough mining equipment to publish empty blocks and throttle the ability to send transactions.
Part of my skepticism of this idea is that the bitcoin network is already so throttled but it does not seem to affect the value of the coin negatively. What would be hilarious would be if France decided to shut down Bitcoin, and succeeded, but the value of bitcoin then proceeded to increase 100x.
Sometimes people argue that a nation state could "shut down" bitcoin for some amount of money -- say $10B. With that, they could buy enough mining equipment to publish empty blocks and throttle the ability to send transactions.
Part of my skepticism of this idea is that the bitcoin network is already so throttled but it does not seem to affect the value of the coin negatively. What would be hilarious would be if France decided to shut down Bitcoin, and succeeded, but the value of bitcoin then proceeded to increase 100x.
Yes and no. If you spend 100BB to buy 51% and then take over the network, eth will have zero value and you loosed 100BB.
Worse, if the overall Ethereum community reaches a consensus that a malicious entity attempted to take over the network, then the devs will fork the blockchain to rollback the particular transactions with the malicious entity, and the new blockchain will keep chugging along as normal while the attacker has just lost a shitton of dollars to buy 100BB. (This is similar to what happened with the DAO previously, although the reason for it was bugs rather than a 51% attack)
This is not what happened with the DAO. This is well documented and I suggest you read up on. TLDR, the hacker tried to withdraw the funds and there was a 30 day lockup period so the contract was updated to stop this.
My understanding was that an illicit fund withdrawing was possible because of a bug in the contract code (more specifically a recursive call loophole), and the community executed a hard fork to return those funds to their original owners. I’m curious as to what I’m misunderstanding here.
There have been multiple examples of 51% attacks happening and the cryptocurrency it happened to not going to zero.
Etherum classic and Bitcoin gold come to mind. They are both in the top 100 still, and both have been 51% attack multiple times.
Etherum classic and Bitcoin gold come to mind. They are both in the top 100 still, and both have been 51% attack multiple times.
You can DDoS normal, non-validating nodes, and if they go offline, they can be unsure which chain is the true chain, because they were not around.. This means your laptop can never sleep, unlike in Bitcoin, where full nodes may go offline and catch up later.
People who control stake can refuse to include (censor) transactions, as there is no market competition for transaction inclusion like in PoW. In PoW, if 51% of network power is censoring transactions, then censored transactions can attach a higher fee, which competing miners will use to buy more equipment and mine the censored transactions.
These are the ones I know about, that I learned in an evening of research.
People who control stake can refuse to include (censor) transactions, as there is no market competition for transaction inclusion like in PoW. In PoW, if 51% of network power is censoring transactions, then censored transactions can attach a higher fee, which competing miners will use to buy more equipment and mine the censored transactions.
These are the ones I know about, that I learned in an evening of research.
This is false. At least false for Ethereum's hybrid PoS.
It uses Verifiable Delay Function as an element of random number generation process. One can look into number of rounds of VDF and treat them just the way they treat proof of work today. It can be compared to determine which chain is the longer one.
It uses Verifiable Delay Function as an element of random number generation process. One can look into number of rounds of VDF and treat them just the way they treat proof of work today. It can be compared to determine which chain is the longer one.
How long till we have a VDF ASIC that lets block producers fuck with this?
Chia Coin is working on a VDF ASIC so that they can correct for it in advance (essentially selling it at a loss so everyone can own the best VDF) but I'm not sure it's the same VDF as Ether.
>So if the market cap of ETH is 200BB spend 100BB to double your money?
No one would buy those from you, so at best you can burn money to burn other people's money at a premium.
No one would buy those from you, so at best you can burn money to burn other people's money at a premium.
The https://en.wikipedia.org/wiki/Goldfinger_(film) strategy, way less efficiently.
The market cap will also increase as you buy loads of coins. For example if I went on coinbase pro, there are people willing to sell up to 50,000 ETH at a maximum price of $6,000, or a total cost of $220,000 million. Of course Coinbase isn't the only market, but if it was and I bought that 220,000 million dollars of ETH the market cap would now be around 700B, at least temporarily.
My guess would be at some point people would realize a takeover was occurring and panic, but it seems like a 51% buyout would require an ungodly amount of money and time.
My guess would be at some point people would realize a takeover was occurring and panic, but it seems like a 51% buyout would require an ungodly amount of money and time.
It seems like a state actor could do it without much trouble. One important factor is a state actor doesn't necessarily have the profit motive. They could just desire to destroy the ecosystem.
You don't need to buy, you can just get a coalition of people who already own 51% and ask them to do the attack.
It's even easier than that -- all you have to do is get a stake and then brute force mine for an alternate reality where your stake is the sole decision maker for the DAG.
You can't really double-spend that way, but you can get a disproportionate amount of the shard rewards. In order to defend against this, other participants will also have to mine for a "more fair" alternate reality, so you end up getting a standstill where nobody can get economic advantage as long as the total power being devoted to preventing chain-shopping is greater than the amount spent on chain-shopping.
In the end the energy expenditure would likely be unchanged from the status quo, it would just be hidden behind a facade of inexpensive proof-of-stake validations that conceal the actual work being done to ensure that this is not abused. This way everyone can feel warm and fuzzy because there's no actual way to measure how much work is being done to keep the validation from being monopolized.
You can't really double-spend that way, but you can get a disproportionate amount of the shard rewards. In order to defend against this, other participants will also have to mine for a "more fair" alternate reality, so you end up getting a standstill where nobody can get economic advantage as long as the total power being devoted to preventing chain-shopping is greater than the amount spent on chain-shopping.
In the end the energy expenditure would likely be unchanged from the status quo, it would just be hidden behind a facade of inexpensive proof-of-stake validations that conceal the actual work being done to ensure that this is not abused. This way everyone can feel warm and fuzzy because there's no actual way to measure how much work is being done to keep the validation from being monopolized.
In addition to the replies, bear in mind that market cap is a bit of a fiction. If you go on a crazy buying spree to take over the network, you'll raise the price of each token in the price due to your own rising demand. It would be a lot more than $100B.
Most of these PoS protocols use pBFT consensus (instead of nakamoto consensus) which means it would only require 1/3 instead of 1/2
Tail risk as I understand it is going to be fun. If your staked nodes lose connectivity (or your pool's) the network can penalize them by slashing the ETH and the stake, right? So after everyone centralizes on a few nodes in the main providers, aren't bad actors heavily incentivized to attack common infra to remove $/power/currency/voting from others and thus shrink the chain?
I don't think the network can figure out an "oops, AWS or Comcast went out; my nodes at home or in the cloud shouldn't get slashed" vs "lets sabotage an ISP or network for enough time to trigger penalties and repeat it".
I don't think the network can figure out an "oops, AWS or Comcast went out; my nodes at home or in the cloud shouldn't get slashed" vs "lets sabotage an ISP or network for enough time to trigger penalties and repeat it".
You are on point. The solution is (and people do it today) don't run backup nodes, or you will risk getting slashed. Your penalty for missing your vote is very mild - basically not earning the reward for the round.
Yup and accordingly PoS devs have explicitly stated this incentivizes stakers to be spread out, and not only on infrastructure but software, as there are multiple client implementations.
You don't have to buy them, you can borrow them. This opens up a certain type of attack where you promise to pay interest to get control of the stake. If you're running a stake pool, you can pay interest on top of the stake reward. It's possible to run a staking yield farm, where you pay interest in a different cryptocurrency that you can mint yourself.
These kinds of off-network incentives can disrupt the reward system. It's even possible to incentivize a lot of people to collude in a double spend attack if the rewards can be distributed to the participants.
These kinds of off-network incentives can disrupt the reward system. It's even possible to incentivize a lot of people to collude in a double spend attack if the rewards can be distributed to the participants.
True, but a double-spend attack would destroy the stake of all the participants.
Zack (of https://amoveo.io) has a good write up of some attacks here: https://github.com/zack-bitcoin/amoveo-docs/blob/master//oth....
You don't double your money - at that point the network is compromised and nobody wants your coins. It's a guaranteed way to destroy Ethereum's value, but the only incentive to do it is to troll. Not too many entities globally looking to spend that much for a laugh, even if they could get the necessary funds in liquid form AND manage not to drive up price with their buy orders.
Perhaps state actors who can print free money would be interested in performing these attacks. Say if a coin was owned predominantly by citizens of one country or if the countries' infrastructure was running on ETH technologies.
Like suppose the banking system was running on ETH. Or if Colonial Pipelines used ETH.
Like suppose the banking system was running on ETH. Or if Colonial Pipelines used ETH.
I can elaborate on any point if interested, but this is covered in the parent.
1. They would drive the price up way past market price in an attempt to make such a large purchase. The cost of a large, rapid purchase is far, far from market price. Only a fraction of the market is willing to sell at current price.
2. If a country wanted to run on Ethereum, they could clone it, since they are giving up the benefits of a GLOBAL system when they take it over.
Lmk if you have any questions. Pretty interesting topic given the insane ETH valuation atm, in contrast to, say, Algorand. Network and first move effects, I guess.
1. They would drive the price up way past market price in an attempt to make such a large purchase. The cost of a large, rapid purchase is far, far from market price. Only a fraction of the market is willing to sell at current price.
2. If a country wanted to run on Ethereum, they could clone it, since they are giving up the benefits of a GLOBAL system when they take it over.
Lmk if you have any questions. Pretty interesting topic given the insane ETH valuation atm, in contrast to, say, Algorand. Network and first move effects, I guess.
The etherium developers and community have made relatively clear that if someone were to attempt such a thing, the non-malicious members of the community would just fork at the direction of the developers to a chain that is identical except that all of the etherium staked by the attacker is redistributed among the non-malicious verifying nodes, as it would be once the consensus process concluded that an attack was being carried out in a <51% attack scenario.
You have to find some people willing to sell you that much ETH. Market depth around the current price is obviously not that deep and it would at least cost way more if you could even find that much for sale anywhere.
[deleted]
[deleted]
Presumably, if someone took that kind of control over Ethereum, its value would rapidly become zero.
In practice, different people have utility in the network
In most double spent networks, people clamor for the coins so they can have the chance at double spending
In PoW networks that’s combined with renting/deploying hash power
In PoS networks its just taking over validators
Big ole party!
In most double spent networks, people clamor for the coins so they can have the chance at double spending
In PoW networks that’s combined with renting/deploying hash power
In PoS networks its just taking over validators
Big ole party!
The attack vectors on PoS are less logical than those of PoW.
With PoW, it's all just physics, energy, and math. With PoS it's rich peoples opinions and validation. An attack on PoS will likely be political... and politics tend to slip into war if there's not enough adults in the room.
With PoW, it's all just physics, energy, and math. With PoS it's rich peoples opinions and validation. An attack on PoS will likely be political... and politics tend to slip into war if there's not enough adults in the room.
I might be jumping the shark here, but I think the Ethereum "elite community" are probably going to get into a situation of "be careful what you wish for".
There is a reason why most of mining is happening in China, Iran, Libya and other "poor" countries. These countries have big players in mining but not in trading/legislation (except for China).
By creating a PoW crypto, you are able to do something really cool: You can move value (energy) out of a country, without having a connection with any institution either inside or outside. This happens in a permission-less, indirect manner.
There is a reason why most of mining is happening in China, Iran, Libya and other "poor" countries. These countries have big players in mining but not in trading/legislation (except for China).
By creating a PoW crypto, you are able to do something really cool: You can move value (energy) out of a country, without having a connection with any institution either inside or outside. This happens in a permission-less, indirect manner.
The title suggests PoS for ETH is 100x more efficient than PoW whereas the article actually estimates PoW to be 2000x more efficient.
To clarify further: the HN title says 100x whereas the article title says 2000x
Update: it's been fixed
Update: it's been fixed
I wonder how this will impact mining? Will GPUs suddenly flood the market as it becomes much less profitable to mine? God I hope so the GPU shortages have been crazy.
I've be lurking heavily in the crypto-mining communities for a few weeks now. Most are saying they'll just "move to a new coin" which is basically all they CAN do, unless they cash out early and sell their hardware. Nvidia is releasing* "LHR" (low hash rate) cards to give gamers some relief (assuming they can't be jailbroken).
*https://blogs.nvidia.com/blog/2021/05/18/lhr/
*https://blogs.nvidia.com/blog/2021/05/18/lhr/
Unfortunately mining is only a small part of why GPUs have been so expensive, but hopefully this will contribute to making them cheaper in the long term. If they don't mess up again.
I get that (chip shortage, covid demand surge etc.), but there's a clear distinction of availability between GPUs that are suitable/unsuitable for mining.
Its difficult to calculate exactly the % of GPU miners that are mining Ethereum, amongst all possible choices. My estimate is 50% - 90%. (Maybe someone can reply with better data?)
When Ethereum can no longer be mined, the returns on mining the remaining 'altcoins' will fall equal to the level of new mining power that enters.
Which might very well make GPU mining uneconomical across the board.
When Ethereum can no longer be mined, the returns on mining the remaining 'altcoins' will fall equal to the level of new mining power that enters.
Which might very well make GPU mining uneconomical across the board.
> the returns on mining the remaining 'altcoins' will fall equal to the level of new mining power that enters.
Can you expand on this?
Can you expand on this?
All of the people currently mining Ethereum will switch to mining other coins.
But, the mining rewards for those other coins are typically static.
So you'll have a dramatically increased number of GPUs chasing the same number of coins - which is going to result in increased mining difficulty and reduced profits, potentially dramatically reduced.
But, the mining rewards for those other coins are typically static.
So you'll have a dramatically increased number of GPUs chasing the same number of coins - which is going to result in increased mining difficulty and reduced profits, potentially dramatically reduced.
Unfortunately, NVIDIA already accidentally leaked a driver with without those limitations within days of releasing those cards.
https://arstechnica.com/tech-policy/2021/03/nvidia-accidenta...
https://arstechnica.com/tech-policy/2021/03/nvidia-accidenta...
That driver was just for the 3060 LHR. The 3080, 3070 and 3060 Ti LHR will require newer drivers. It's still possible for NVIDIA to mess up and release a newer driver without those limitations again, though.
Some of these earlier cards already have been jailbroken. Ultimately, it's a question of whether it makes sense for miners to sponsor a cracking effort vs the cost of buying the more expensive cards outright.
Honestly this change might actually be the one that makes me finally buy some crypto. The energy burden and overall wastefullness of these coins has vastly outweighed any potential benefit they may provide. A big coin making such a good (at least in my books) change should be rewarded. Since crypto for better or worse seems here to stay, I hope that energy concious decisions continue to be made, and that the market responds positively.
I know this is a pressing matter, and that has relevance for itself, but after the whole Elon Musk thing it just turns this into a reply to his tweet, where so many cryptos folks were spamming "we use less energy then bitcoin! choose us! we're open to talk!"
Which in the lights of the recent events sounds like: "pump us this time around!"
Makes you question: when would be a good time to address this, if they can't time travel to the day before Elon posted the tweet?
And I don't know the answer to that. Was this too soon? Well if they want to take the ride of Elon controversy, I don't think so. Is that a good thing? Who knows.
Which in the lights of the recent events sounds like: "pump us this time around!"
Makes you question: when would be a good time to address this, if they can't time travel to the day before Elon posted the tweet?
And I don't know the answer to that. Was this too soon? Well if they want to take the ride of Elon controversy, I don't think so. Is that a good thing? Who knows.
It is a reply but it was also well known that they were looking to improve with a proof of scope concept. This will require 100x more storage space in place of compute power.
The market is wondering what will happen next. So ether published their progress. I just want to know how realistic are they with their schedule.
The market is wondering what will happen next. So ether published their progress. I just want to know how realistic are they with their schedule.
Many people are talking about PoW vs PoS here.
Nobody tends to mention that in PoS a hostile takeover by a majority stake can just have its staked coins 'forked' out by the community. The goal of PoS is to have actors held responsible for their actions.
In my mind this is much more powerful than PoW because surely hostile majority mining power can't simply be forked away (sure you could change the hashing algorithm but even then the attacker could just move on to a different chain with no real consequences of their actions no?).
Interested to hear what other people think.
Nobody tends to mention that in PoS a hostile takeover by a majority stake can just have its staked coins 'forked' out by the community. The goal of PoS is to have actors held responsible for their actions.
In my mind this is much more powerful than PoW because surely hostile majority mining power can't simply be forked away (sure you could change the hashing algorithm but even then the attacker could just move on to a different chain with no real consequences of their actions no?).
Interested to hear what other people think.
proof of work is a massive waste, it's true, but it does serve a one time valuable purpose: it bootstraps the value of the tokens by having people make real investments with existing currency and hardware in their creation. beyond that, it's literally insane, it only works when there's a very competitive race to burn as much energy as possible.
however, once the value of those tokens is established (as is true for most of the big cryptocurrencies today), there is really no compelling reason not to emulate the proof of work block lottery with a proof of stake block lottery. there is absolutely no reason why people can't lock up digital currency funds long term in exchange for share in a 10 minute lottery rather than lock up funds in hardware mining investments and associated power supplies for them.
i've been watching ethereum's progress on this with interest, and fully expect with time that bitcoin will follow.
however, once the value of those tokens is established (as is true for most of the big cryptocurrencies today), there is really no compelling reason not to emulate the proof of work block lottery with a proof of stake block lottery. there is absolutely no reason why people can't lock up digital currency funds long term in exchange for share in a 10 minute lottery rather than lock up funds in hardware mining investments and associated power supplies for them.
i've been watching ethereum's progress on this with interest, and fully expect with time that bitcoin will follow.
Doesn't POS incentivize oligarchal collusion?
According to https://www.statista.com/statistics/1200477/bitcoin-mining-b..., 65% of BTC mining already happens within one country.
no more than PoW. they're both essentially lotteries that hand out share/influence based on capital investment.
PoS, done right, simply emulates PoW.
what does PoS done right look like?
"miners" lock up funds for 1-2 years. the amount of funds they lock up determines how likely they are to win the block lottery. the block lottery, and locking up funds for entries within it, remain decentralized.
the challenge is running a decentralized lottery with distributed consensus. this is hard, but i don't think impossible.
PoS, done right, simply emulates PoW.
what does PoS done right look like?
"miners" lock up funds for 1-2 years. the amount of funds they lock up determines how likely they are to win the block lottery. the block lottery, and locking up funds for entries within it, remain decentralized.
the challenge is running a decentralized lottery with distributed consensus. this is hard, but i don't think impossible.
People interested in POS should look at Nano [1].
In Ethereum only "validators" validate transactions - those with more than 32 Eth in their own wallet.
In Nano "representatives" validate transactions - but individual users vote a representative to represent them (with their wallet balance as a weighting).
The difference is that you can have 0.00001 Nano and still have a say over the network. It also removes the need for "stake pools" where lots of people lend Eth to one person to make up 32 Eth together (with the hope you will get your money back).
[1]: https://nano.org
In Ethereum only "validators" validate transactions - those with more than 32 Eth in their own wallet.
In Nano "representatives" validate transactions - but individual users vote a representative to represent them (with their wallet balance as a weighting).
The difference is that you can have 0.00001 Nano and still have a say over the network. It also removes the need for "stake pools" where lots of people lend Eth to one person to make up 32 Eth together (with the hope you will get your money back).
[1]: https://nano.org
> you can have 0.00001 Nano and still have a say over the network.
Isn’t that susceptible to sybil (flooding) attacks?
Isn’t that susceptible to sybil (flooding) attacks?
Your voting power is weighted by your balance, so those with higher balances have more voting power, and the representatives with the highest amount voted onto them have the highest amount of control over the network.
Ethereum 2.0 isn’t expected to be released until 2022, 2023, or 2024*
If you’re looking for something that works now, you can take a look at the 3rd most popular cryptocurrency on Coinbase, Stellar Lumens (XLM). It sure is energy efficient.
More details here: https://www.reddit.com/r/Stellar/comments/nbqfey/since_co2_e...
Sources: *Coinbase, Stakewise
If you’re looking for something that works now, you can take a look at the 3rd most popular cryptocurrency on Coinbase, Stellar Lumens (XLM). It sure is energy efficient.
More details here: https://www.reddit.com/r/Stellar/comments/nbqfey/since_co2_e...
Sources: *Coinbase, Stakewise
False. PoS Beaconchain is already running, since December 2020, and the merge is expected to happen Q3 2021 or Q1 2022. Sharding is not immediately necessary for Eth2 to scale - we have rollups in the meantime for that.
“Ethereum 2.0 is an upcoming set of upgrades to Ethereum that's intended to make it significantly faster, less expensive, and more scalable. As part of the upgrade, participants may stake ETH tokens to help secure the network. In exchange for staking, participants then receive rewards on their staked ETH. Staked ETH (and rewards) can't be unstaked until Ethereum 2.0 fully launches, which most experts estimate will happen between 2022 and 2024.”
-Coinbase
The merge is expected to happen Q3 2021 or Q1 2022, and the withdrawal/unstake functionality will be implemented afterwards, so most likely 2022.
> If energy consumption per-transaction is more your speed, that’s ~35Wh/tx
The improved energy consumption is still a lot. For reference, a 2019 16" MacBook Pro has a 100 Wh battery. In other words, 3ish transactions would fully drain such a laptop's battery.
The improved energy consumption is still a lot. For reference, a 2019 16" MacBook Pro has a 100 Wh battery. In other words, 3ish transactions would fully drain such a laptop's battery.
It's an average for the network, not an actual expense you pay to run a transaction. Stakers are the ones mainly using that energy. If you're just a regular user and send a transaction, you just spend the tiny bit of energy needed to make a cryptographic signature and transmit it.
I think the issue here is that 35Wh per transaction is still a million times less efficient than traditional databases. The MacBook example is just meant to give a frame of reference for how much 35Wh is.
Sure, no argument there. I'm really glad proof-of-stake is close. It's just that GP made it sound like issuing three transactions would actually drain your battery, so I wanted to clarify that.
I hope I'm not being lazy, but does POS not just mean the more you have, the more you get? Wouldn't it converge to 1 wallet controlling everything?
Or to rephrase the question: where can I find the "POS for dummies" page?
Or to rephrase the question: where can I find the "POS for dummies" page?
Every staker preserves their fraction of the (increasing) pie by staking. Those who don't stake slightly lose in their fraction of the pie, benefitting all stakers by the same percentage.
Yep, it literally codefies "rich gets richer" down to the core of the protocol.
Just saw that you need 32 ethereums to be able to stake. That's more than 60k.
Whatever, I'm out.
Whatever, I'm out.
There are staking pools that allow you to stake with less than 32 ETH and pool those together to participate. We understand the requirement of 32 is high but that doesn't mean it is impossible to participate in staking with less. Rocketpool or Lido finance are examples.
It's not just about that limit though and it's not even a complaint to be clear. If eth pays me 5-10% per year for a simple cryptographic signature, great, not gonna say no.
But it inherently makes the system unfair, I have 0 pressure to sell that eth since it didn't really take me any effort to make it and I don't need it to cover life expenses, whereas for someone who has much less money, well that return on their eth (say from pools), they'll probably need to sell it to cover some other costs (rents for example). So for the wealthy, their shares grows while everyone has pressure to sell. There's also a cycle where if you're a staker and few other people sell, price will skyrocket, make it even more unaccessible.
I really hope that we avoid these scenarios in real world, but I'm a bit skeptical.
But it inherently makes the system unfair, I have 0 pressure to sell that eth since it didn't really take me any effort to make it and I don't need it to cover life expenses, whereas for someone who has much less money, well that return on their eth (say from pools), they'll probably need to sell it to cover some other costs (rents for example). So for the wealthy, their shares grows while everyone has pressure to sell. There's also a cycle where if you're a staker and few other people sell, price will skyrocket, make it even more unaccessible.
I really hope that we avoid these scenarios in real world, but I'm a bit skeptical.
Could somebody help me understand the valuation of Ether?
Let's assume for a second that future developments in the the Ethereum protocol really unlock the widespread use of distributed apps, and herald a new technological era. As far as I understand, Ethereum optimists are betting that then people will be forced to buy Ether to participate in this Internet of distributed apps, driving the price higher.
In this (optimistic) case, wouldn't someone just start a new blockchain with the Ethereum protocol? It's open source, right? To me it seems that a new blockchain that e.g. gives every human a wallet pre-filled with the amount of Ether needed for staking (plus some extra) would appeal more to the vast majority of people than a blockchain where the early adopters are the new rubber barons of the Internet.
Let's assume for a second that future developments in the the Ethereum protocol really unlock the widespread use of distributed apps, and herald a new technological era. As far as I understand, Ethereum optimists are betting that then people will be forced to buy Ether to participate in this Internet of distributed apps, driving the price higher.
In this (optimistic) case, wouldn't someone just start a new blockchain with the Ethereum protocol? It's open source, right? To me it seems that a new blockchain that e.g. gives every human a wallet pre-filled with the amount of Ether needed for staking (plus some extra) would appeal more to the vast majority of people than a blockchain where the early adopters are the new rubber barons of the Internet.
Re: valuation. The biggest contributing factor is speculation. I think it dwarfs every other possible factor. The second biggest one - fees are paid in ETH, and fees will continue to be paid in ETH. More, EIP-1559 will actively decrease amount of ETH in circulation by requiring miners to burn ETH to include transactions via base-fee mechanism.
Re: new chain / forking. Just network effect. Ethereum currently secures huge amount of value in DeFi. Any new network will not have those funds in it. There are also stablecoins. If blockchain-native assets (BTC, ETH, DAI etc) can be "doubled" by forking (e.g. BTC to BTC+BCH) it's not possible for fiat-backed assets such as USDC, USDT, EURc etc. Issuing bank has to pick a side of the fork.
Re: new chain / forking. Just network effect. Ethereum currently secures huge amount of value in DeFi. Any new network will not have those funds in it. There are also stablecoins. If blockchain-native assets (BTC, ETH, DAI etc) can be "doubled" by forking (e.g. BTC to BTC+BCH) it's not possible for fiat-backed assets such as USDC, USDT, EURc etc. Issuing bank has to pick a side of the fork.
There are already new Ethereum-compatible blockchains like Avalanche but they're missing out on the network effects that exist on the original Ethereum chain.
The only use of crypto is to get rich by being an early adopter. It's easy to design a new system that doesn't benefit early adopters but no one will care about it.
The only use of crypto is to get rich by being an early adopter. It's easy to design a new system that doesn't benefit early adopters but no one will care about it.
I'm interested to know more about a system that doesn't benefit early adopters... Do you have any sources? Thanks :)
Basically either stablecoins or some kind of volatility dampening which would increase emission in sync with adoption. Nobody wants this so there's not much work being done on it.
> wouldn't someone just start a new blockchain with the Ethereum protocol?
Sure, and many have, but they don't have the security, decentralization, dev mindshare, community, tooling, or ecosystem that Ethereum has.
Sure, and many have, but they don't have the security, decentralization, dev mindshare, community, tooling, or ecosystem that Ethereum has.
> To me it seems that a new blockchain that e.g. gives every human a wallet pre-filled with the amount of Ether needed for staking (plus some extra) would appeal more to the vast majority of people than a blockchain where the early adopters are the new rubber barons of the Internet.
That sounds awesome. If you can securely deliver a cryptographic key to every human on the planet and teach them to use it, I'd happily invest my life savings towards that ends. Unfortunately due to disparities in education, safety and access to technology, I think this is a near-impossible task in 2021.
Cardano is issuing cryptographic student IDs to 5M students in Ethiopia though! The future is bright!
That sounds awesome. If you can securely deliver a cryptographic key to every human on the planet and teach them to use it, I'd happily invest my life savings towards that ends. Unfortunately due to disparities in education, safety and access to technology, I think this is a near-impossible task in 2021.
Cardano is issuing cryptographic student IDs to 5M students in Ethiopia though! The future is bright!
In the internet, the more websites and APIs exist, the greater the utility of the internet as a whole - the sum of its parts is worth more than each individually.
With Ethereum, every time a new smart contract is added to Ethereum, the whole network becomes more useful, as each contract can communicate with each other. You can assemble new applications based on the building blocks of existing contracts.
With Ethereum, every time a new smart contract is added to Ethereum, the whole network becomes more useful, as each contract can communicate with each other. You can assemble new applications based on the building blocks of existing contracts.
People are buying it now to run apps making money off of defi. Binance has their own network thats growing similarly. Both do have a huge amount of speculators. There are other up and coming complements to the market aswell including Polkadot.
Some like ethereum for its maturity and dev team.
Some like ethereum for its maturity and dev team.
> People are buying it now to run apps making money off of defi.
Serious question - what does this actually mean? What defi apps are people running to make money besides minting other coins?
Serious question - what does this actually mean? What defi apps are people running to make money besides minting other coins?
One of the significant and first ones is compound.
https://compound.finance/
Uniswap being another
https://uniswap.org/
A more comprehensive lost of ether based defi apps
https://www.blocksocial.com/ethereum-defi-platforms/
There are also other blockchain ecosystems with their own defi projects.
In general, you have some cryto assets, you loan those to someone or some decentralized system that uses those assets to make money(like banks, financial institutions, and market makers).
https://compound.finance/
Uniswap being another
https://uniswap.org/
A more comprehensive lost of ether based defi apps
https://www.blocksocial.com/ethereum-defi-platforms/
There are also other blockchain ecosystems with their own defi projects.
In general, you have some cryto assets, you loan those to someone or some decentralized system that uses those assets to make money(like banks, financial institutions, and market makers).
> Ethereum will use at least 99% less energy post merge
I realize that is the text from the article, but what they really meant is "will use at most 99% less energy". The reduction will be at least 99%. The future value will be at most 1% of the current value.
I realize that is the text from the article, but what they really meant is "will use at most 99% less energy". The reduction will be at least 99%. The future value will be at most 1% of the current value.
This reduces security considerably. Fundamentally, the proof of work system locks in longer chains because of all the work that was done historically. If there is just one honest node out there you will be able to tell the difference between the honest one and a majority of fakes. With proof of stake there is nothing beyond the will of the current majority to lock in what is right. If you feel the majority is always right, and you'd be comfortable with the majority being able to re-write all of the history of the ownership of your currency, that is fine. I do not feel I can trust the majority to be correct every minute or every day forever.
> Fundamentally, the proof of work system locks in longer chains because of all the work that was done historically.
VDFs used in Ethereum's hybrid PoS replicate this property to large-enough extent. In case of PoW the resource you MUST spent to replicate the chain is electric energy, lots of it. In case of VDF it's mostly time. So one can imagine launching multiple "fake" chains using stolen/bought private keys, but such chain will get banned via software upgrade immediately after detection. Very hard to pull off, impossible to pull of multiple times.
EDIT: my bad, stolen keys will get banned by the network immediately and automatically. They break "equivocation" rule.
VDFs used in Ethereum's hybrid PoS replicate this property to large-enough extent. In case of PoW the resource you MUST spent to replicate the chain is electric energy, lots of it. In case of VDF it's mostly time. So one can imagine launching multiple "fake" chains using stolen/bought private keys, but such chain will get banned via software upgrade immediately after detection. Very hard to pull off, impossible to pull of multiple times.
EDIT: my bad, stolen keys will get banned by the network immediately and automatically. They break "equivocation" rule.
This property is called Weak Subjectivity and is indeed a compromise that PoS makes over PoW. However, in practice, the trust assumptions aren't much higher than when you, say, download node software from a source that you trust.
> I do not feel I can trust the majority to be correct every minute or every day forever.
With weak subjectivity, you only have to trust them to be correct on a timeframe of every few months. If consensus is actually broken somehow over such a long period of time, there will be big headlines about it and you'll be able to configure your node accordingly.
Further reading:
https://blog.ethereum.org/2014/11/25/proof-stake-learned-lov...
> I do not feel I can trust the majority to be correct every minute or every day forever.
With weak subjectivity, you only have to trust them to be correct on a timeframe of every few months. If consensus is actually broken somehow over such a long period of time, there will be big headlines about it and you'll be able to configure your node accordingly.
Further reading:
https://blog.ethereum.org/2014/11/25/proof-stake-learned-lov...
How do you know who to trust under Weak Subjectivity? It amounts to saying "I'm pretty sure we'll be able to google it and figure it out". But that then relies on these 3rd party systems to be able to identify who to trust. How can you really know who to trust for a protocol that's supposed to be distributed and ownerless. If the US turned into Russia-level of corruption, we essentially have to trust the owners of ETH to successfully flee to somewhere that we can protect them. What if they die or go bankrupt and no one agrees on who owns ETH?
If the answer is 'we'll trust the majority of users'. How do you know who that majority users are? Is that literally people the hold a lot of the ETH gas? So I know who has ETH based on what software I download and I download software based on who has ETH? And I know I'm in the right cycle of that form because I googled it and found an 'authority'? Risky.
If the answer is 'we'll trust the majority of users'. How do you know who that majority users are? Is that literally people the hold a lot of the ETH gas? So I know who has ETH based on what software I download and I download software based on who has ETH? And I know I'm in the right cycle of that form because I googled it and found an 'authority'? Risky.
I think you're jumping to the "risky" conclusion a bit prematurely.
> What if they die or go bankrupt and no one agrees on who owns ETH?
By "owner", do you mean the core developers who own the protocol repositories on github, or do you mean the client software teams who own the software repositories, or the individuals and exchanges who run the nodes and economic services, or the stakers producing blocks, or someone else?
If two reputable factions have a simultaneous claim to be the protocol stewards of the "real ETH", the ETH currency will fork and market forces will decide who the "true" owners are by valuing each side of the fork properly. We've already seen something similar to this with Ethereum vs Ethereum Classic, and with Bitcoin vs Bitcoin Cash.
So we don't need to trust any majority of users like you said, you get to personally choose what fork of the software you want to transact on, based on what version of the client software you personally see as legitimate, and download and run.
> So I know who has ETH based on what software I download and I download software based on who has ETH? And I know I'm in the right cycle of that form because I googled it and found an 'authority'? Risky.
Every cryptocurrency has a cycle of that form, even PoW cryptocurrencies. You could take "the chain with the most accumulated work", but that's not enough, because what you really need is the chain with the most accumulated work that also follows the protocol rules, with the protocol rules being based on which software you choose to download. You always need to trust someone to give you the software, unless you download the source code, personally audit every line of it to understand how it affects the behavior of the protocol's consensus, and compile it yourself.
> What if they die or go bankrupt and no one agrees on who owns ETH?
By "owner", do you mean the core developers who own the protocol repositories on github, or do you mean the client software teams who own the software repositories, or the individuals and exchanges who run the nodes and economic services, or the stakers producing blocks, or someone else?
If two reputable factions have a simultaneous claim to be the protocol stewards of the "real ETH", the ETH currency will fork and market forces will decide who the "true" owners are by valuing each side of the fork properly. We've already seen something similar to this with Ethereum vs Ethereum Classic, and with Bitcoin vs Bitcoin Cash.
So we don't need to trust any majority of users like you said, you get to personally choose what fork of the software you want to transact on, based on what version of the client software you personally see as legitimate, and download and run.
> So I know who has ETH based on what software I download and I download software based on who has ETH? And I know I'm in the right cycle of that form because I googled it and found an 'authority'? Risky.
Every cryptocurrency has a cycle of that form, even PoW cryptocurrencies. You could take "the chain with the most accumulated work", but that's not enough, because what you really need is the chain with the most accumulated work that also follows the protocol rules, with the protocol rules being based on which software you choose to download. You always need to trust someone to give you the software, unless you download the source code, personally audit every line of it to understand how it affects the behavior of the protocol's consensus, and compile it yourself.
Whether or not it remains successful, ethereum is moving the ball forward. Congratulations to contributors. Inspiring.
I really wish the UN could get together and implement a global treaty on a revenue neutral carbon tax. The only reason energy is as cheap as it is right now is because we're not properly pricing in the externalities of environmental damage.
This would immediately make unproductive energy use (cough POW crypto cough) a lot less profitable, without the government having to come in and set prices and regs for every little thing.
This would immediately make unproductive energy use (cough POW crypto cough) a lot less profitable, without the government having to come in and set prices and regs for every little thing.
The UN doesn't actually have any power though. Even if all the UN members agree to sanction countries that don't implement the tax there are countries like North Korea and Iran that are already fully sanctioned. These countries would immediately take full advantage of the comparative advantage given to them. PoW mining for example would end up being completely centralized in these countries.
I agree that we should try to implement global fines/taxes/fees/whatever on the externalities of society (be it electricity, manufacturing, dumping, litter, etc).
I disagree that it would have a significant impact on PoW. PoW is already one of the cleanest energy industries in the world, and it's also entirely price insensistive. PoW is going to consume billions of dollars of electricity per year at any price. An external tax of 50% would cut energy use by nearly a third, but it wouldn't do any more than that.
And I should add, PoW would be absolutely happy with such a fee in place. It really doesn't care how much electricity costs, it only cares that an attacker would also have to pay the same price.
I disagree that it would have a significant impact on PoW. PoW is already one of the cleanest energy industries in the world, and it's also entirely price insensistive. PoW is going to consume billions of dollars of electricity per year at any price. An external tax of 50% would cut energy use by nearly a third, but it wouldn't do any more than that.
And I should add, PoW would be absolutely happy with such a fee in place. It really doesn't care how much electricity costs, it only cares that an attacker would also have to pay the same price.
Yeah, nope.
Consider the amount of energy wasted right now and also in similar "industries".
https://bitcoinmagazine.com/business/bitcoin-uses-less-than-...
Consider the amount of energy wasted right now and also in similar "industries".
https://bitcoinmagazine.com/business/bitcoin-uses-less-than-...
To me, this says those other "similar 'industries'" should *also* be regulated in this way. We shouldn't excuse bitcoin just because there's other worse offenders, we should address the entire sector. I'll phrase it this way: do high-frequency-trading and coin-mining contribute positively to the world as a whole? Are they producing goods that improve the standard of living on a global scale, tangible or otherwise? Are those good worth the negative environment and social impact their production causes?
Assuming HFT/coin mining do indeed contribute in these ways, are there less energy-intensive solutions that could produce the same or a similar effect?
I think it's completely reasonable for there to be regulations that limit the global impact of activities (e.g. emissions, global warming, chip shortage) for the good of the general population, especially in relation to how much tangible good they produce. That's the whole point of governments and regulations to begin with; see also, things like leaded fuels, or asbestos, or trust-busting.
Assuming HFT/coin mining do indeed contribute in these ways, are there less energy-intensive solutions that could produce the same or a similar effect?
I think it's completely reasonable for there to be regulations that limit the global impact of activities (e.g. emissions, global warming, chip shortage) for the good of the general population, especially in relation to how much tangible good they produce. That's the whole point of governments and regulations to begin with; see also, things like leaded fuels, or asbestos, or trust-busting.
Sorry, it was more for your "opinion" on PoW, not the carbon tax.
> This would immediately make unproductive energy use (cough POW crypto cough) a lot less profitable,
You seem to have just one target in mind that would get hit. Clearly you haven't analyzed the full extent of a "carbon tax" and your following statement seemed very naive. That said, I'm all FOR carbon taxes, it is actually good for Bitcoin and the world.
I don't think there will be a LOT of PoW cryptos, there will be one (or two at most) winner and the others will use a variation of Proof of Proof (by saving state on a PoW chain). I also think that the energy usage curve will plateau soon-ish and energy usage will be somewhat constant or start trending down gradually (as the rewards are tapering off too).
> This would immediately make unproductive energy use (cough POW crypto cough) a lot less profitable,
You seem to have just one target in mind that would get hit. Clearly you haven't analyzed the full extent of a "carbon tax" and your following statement seemed very naive. That said, I'm all FOR carbon taxes, it is actually good for Bitcoin and the world.
I don't think there will be a LOT of PoW cryptos, there will be one (or two at most) winner and the others will use a variation of Proof of Proof (by saving state on a PoW chain). I also think that the energy usage curve will plateau soon-ish and energy usage will be somewhat constant or start trending down gradually (as the rewards are tapering off too).
You replied to the wrong guy, but I got you :^)
I have no problem with all carbon intensive industries paying for their pollution. I think it would be silly for governments to go around mandating and regulating every little thing that uses energy. Simply tax at the source.
Will that make my power bill go up? Yeah. Will that mean it costs more to fill my tank? Yeah. Whatever. I'm totally fine with that. If it's revenue neutral I'll be getting most of it back on my income taxes anyway. Bonus, this now lets me reduce my carbon footprint and pay less taxes.
TLDR: Want less carbon? Tax carbon!
I have no problem with all carbon intensive industries paying for their pollution. I think it would be silly for governments to go around mandating and regulating every little thing that uses energy. Simply tax at the source.
Will that make my power bill go up? Yeah. Will that mean it costs more to fill my tank? Yeah. Whatever. I'm totally fine with that. If it's revenue neutral I'll be getting most of it back on my income taxes anyway. Bonus, this now lets me reduce my carbon footprint and pay less taxes.
TLDR: Want less carbon? Tax carbon!
Thanks,
A carbon tax will be a boon for stranded/wasted energy as well, I wouldn't see why a bitcoin mining operation can't use better sources of energy to mine and be more profitable. It's based on consuming electricity for starters (not natural gas), unlike say ICE vehicles which can't switch to another source of energy.
The world financial and banking systems moves literal quadrillions of dollars around the world on an annual basis.
You're somehow implying that bitcoin can't do that, how'd you come to that conclusion.
Bitcoin already uses a very high percentage of the total energy that the global financial services industry does, and it moves a very small amount of money around to show for it. If the bitcoin network were to move quadrillions of dollars per year, it would probably have to use more energy than we are capable of producing.
And bitcoin cannot offer insurance, or retirement and estate planning, it cannot take my company public or help me raise money on the bond market. It cannot facilitate a repo transaction on my real estate portfolio, and it cannot offer me a mortgage to purchase a home.
And bitcoin cannot offer insurance, or retirement and estate planning, it cannot take my company public or help me raise money on the bond market. It cannot facilitate a repo transaction on my real estate portfolio, and it cannot offer me a mortgage to purchase a home.
> Bitcoin already uses a very high percentage of the total energy that the global financial services industry does, and it moves a very small amount of money around to show for it.
Citation needed.
Citation that counters that perception: https://bitcoinmagazine.com/business/bitcoin-uses-less-than-...
> If the bitcoin network were to move quadrillions of dollars per year, it would probably have to use more energy than we are capable of producing
Sigh, this gets spouted like it's the truth by people who don't understand the simple fact that the energy usage in bitcoin is NOT used on transactions! and it DOES NOT scale with the number of transactions!. [1]
> And bitcoin cannot offer insurance, or retirement and estate planning, it cannot take my company public or help me raise money on the bond market. It cannot facilitate a repo transaction on my real estate portfolio, and it cannot offer me a mortgage to purchase a home.
These are the usecases for subsequent layers, and there are services popping up for these already! bitcoin is a relatively young system that is purely community driven.
[1]: https://www.coindesk.com/frustrating-maddening-all-consuming...
Citation needed.
Citation that counters that perception: https://bitcoinmagazine.com/business/bitcoin-uses-less-than-...
> If the bitcoin network were to move quadrillions of dollars per year, it would probably have to use more energy than we are capable of producing
Sigh, this gets spouted like it's the truth by people who don't understand the simple fact that the energy usage in bitcoin is NOT used on transactions! and it DOES NOT scale with the number of transactions!. [1]
> And bitcoin cannot offer insurance, or retirement and estate planning, it cannot take my company public or help me raise money on the bond market. It cannot facilitate a repo transaction on my real estate portfolio, and it cannot offer me a mortgage to purchase a home.
These are the usecases for subsequent layers, and there are services popping up for these already! bitcoin is a relatively young system that is purely community driven.
[1]: https://www.coindesk.com/frustrating-maddening-all-consuming...
While true, this also gives jobs to millions of people, unlike crypto, which is comparatively less.
Is it possible/likely that exchanges are going to abuse their position and secretly use everyone else's ETH for proof of stake while they're holding it?
Like they do on all other PoS (worthless) coins? Yes.
This is the fundamental problem. We have seen chain takeovers from this exact scenario. See Steem / Hive for an example of how this can go very wrong.
> Several teams of engineers are working overtime to ensure that The Merge arrives as soon as possible, and without compromising on safety.
Overworking your engineers will most definitely lead to compromises.
But good to see that Ethereum came to their senses and are serious about reducing the environmental impact they have.
Overworking your engineers will most definitely lead to compromises.
But good to see that Ethereum came to their senses and are serious about reducing the environmental impact they have.
I think they're being hyperbolic. "we're working really hard to make it happen"
Yes, I would not read much into it. In the end, writing "We were sort of working on it at a reasonable pace, you know, work life balance is more important to our developers than finishing a month earlier" just doesn't have the same ring to it :)
> But good to see that Ethereum came to their senses and are serious about reducing the environmental impact they have.
Is it not possible there's good reasons they didn't move to proof of stake sooner? "Came to their senses" seems to imply they had no good reasons.
Is it not possible there's good reasons they didn't move to proof of stake sooner? "Came to their senses" seems to imply they had no good reasons.
It has been the goal since day one.
The Ethereum protocol was designed with PoS in mind and has a built-in difficulty bomb[1] to prove it. In short, this difficulty bomb makes it exponentially harder to mine ETH over time. The goal of this feature was to encourage all participants of the ecosystem to transition to PoS as quickly as possible.
Given that, the implementation has not worked out totally as expected, as the difficulty bomb has been pushed back a few times over the years. However, to answer your question, the reason they did not move faster is because this transition is hard and plays in some uncharted territory.
[1] https://medium.com/fullstacked/the-ice-age-is-coming-ee5ad5f...
The Ethereum protocol was designed with PoS in mind and has a built-in difficulty bomb[1] to prove it. In short, this difficulty bomb makes it exponentially harder to mine ETH over time. The goal of this feature was to encourage all participants of the ecosystem to transition to PoS as quickly as possible.
Given that, the implementation has not worked out totally as expected, as the difficulty bomb has been pushed back a few times over the years. However, to answer your question, the reason they did not move faster is because this transition is hard and plays in some uncharted territory.
[1] https://medium.com/fullstacked/the-ice-age-is-coming-ee5ad5f...
I don’t think PoS was a thing when Ethereum was invented.
It's mentioned in the whitepaper - https://ethereum.org/en/whitepaper/
> Note that in the future, it is likely that Ethereum will switch to a proof-of-stake model for security, reducing the issuance requirement to somewhere between zero and 0.05X per year.
> Note that in the future, it is likely that Ethereum will switch to a proof-of-stake model for security, reducing the issuance requirement to somewhere between zero and 0.05X per year.
Interesting, in any case I don’t think any decision was made to ease the transition at the time.
It absolutely was, Peercoin (PPC), and even DPoS (BTS) predates ethereum too. What are they worth today? PoS is a scam -- also Diem is worse -- it is dystopia.
Mkay
This has been the plan for a long time. But this is like Google deciding to switch to Microsoft Windows, it's not something they can just decide to do one day. There's a process. It's a massive effort and hundreds of billions of dollars are on the line.
Kinda what I figured. Thanks for the response.
Only time will be able to arbitrate this one, but we have consistently pushed out time-lines to ensure that Ethereum remains safe. Ethereum core development definitely favours partition tolerance and safety over liveness.
Overtime != overwork. You've probably programmed something, at some point, where you were excited to work on it from morning to night? Where you lose track of hours, forget to eat meals and completely in the zone? That could easily be the case with these engineers, working on such a historical project and consequential update.
I have. My whole team at once? Not really.
Unless management is really vigilant, when people are working overtime everyone on the team feels pressure to do the same.
Unless management is really vigilant, when people are working overtime everyone on the team feels pressure to do the same.
I have been in that zone for two or three day stretches, but never beyond, and never in sync with a full team. I have experienced two forms of team wide over-time in my career. The first lasted (for me) about seven months, then I quit. I couldn't take in anymore and the project (large team, 150 people) was on fire. That was completely unsustainable. The second form was a periodic event that happened every two years when we released a new silicon design (chip vendor). The day that the first silicon was mounted onto boards began a cycle of ten to twelve days, 14 hours a day, lunch and dinner being one hour status briefings. All hands on deck. At the end of those ten or twelve days, either the silicon was fully validated, or all its known flaws were identified. And everybody on the team took a couple days off to breath. That was sustainable because it was infrequent, planned, and closed ended. I went through four of those cycles. They were exhausting and thrilling at the same time. And thankfully, infrequent and closed ended. There was always a light at the end of the tunnel.
This is a different dynamic than traditional organization. It's decentralized with contributors around the world. You have no idea how much others are working and many are contributing because it's something they're passionate about.
PoS has been the goal of Ethereum for a long, long time.
I don't know the technicals of why the migration has been gradual, but the destination has never really been in doubt.
I don't know the technicals of why the migration has been gradual, but the destination has never really been in doubt.
Are you serious? This was proposed in the initial white paper. It's not something that suddenly came to mind. This stuff takes time
No it doesnt. Having hard time/budget/whatever constraints does.
Otherwise, theoretically you can "overwork" i.e. (work more than standard 40 hour weeks or some standard of work hours) whatever without compromise
Otherwise, theoretically you can "overwork" i.e. (work more than standard 40 hour weeks or some standard of work hours) whatever without compromise
> Otherwise, theoretically you can "overwork" i.e. (work more than standard 40 hour weeks or some standard of work hours) whatever without compromise
That's simply not true. Humans aren't machines. Productivity falls off a cliff after 50 hours, and after 55 you may as well not even be in the office. There are diminishing returns with "overwork"ing.
[0] https://siepr.stanford.edu/research/publications/productivit...
That's simply not true. Humans aren't machines. Productivity falls off a cliff after 50 hours, and after 55 you may as well not even be in the office. There are diminishing returns with "overwork"ing.
[0] https://siepr.stanford.edu/research/publications/productivit...
On paper, sure. In practice, having people overworked leads to compromises you never intend to make, simply due to exhaustion and burden clouding judgement values.
Thats a problem of process where errors are caught.
It makes things more inefficient, but it doesn't compromise final quality assuming issues are found and addressed.
It makes things more inefficient, but it doesn't compromise final quality assuming issues are found and addressed.
No quality control process can reliably catch software errors. That's why it's generally better to prevent errors rather than catching and fixing.
Every software error? True. But essentially every software error, especially errors of significance? Untrue. The Space Shuttle control software was famous for its rigorous process control, and deliberately written in a language difficult to introduce bugs in. Over decades of development and 420,000 total lines of code, it appears that a total of 17 bugs ever made it into software used during a launch, with an average of about 1 bug at a time existing in the codebase. Processes to prevent errors from being introduced played a huge part in this, but the comprehensive verification and simulation process was also necessary to achieve such a low defect rate.
https://www.fastcompany.com/28121/they-write-right-stuff
https://www.fastcompany.com/28121/they-write-right-stuff
The NASA Manager’s Handbook for Software Development from 1990 is a great resource. We have better techniques for some areas now but most of it still holds up.
https://sw-eng.larc.nasa.gov/supporting-products/archive-of-...
https://sw-eng.larc.nasa.gov/supporting-products/archive-of-...
That's amazing work and dedication.
But I feel it fair to consider an organization like NASA as an exemption from the norm. This level of detailed error catching doesn't make sense for, say, a facebook clone startup.
That said, someone should send this comment to a Tesla engineer.
But I feel it fair to consider an organization like NASA as an exemption from the norm. This level of detailed error catching doesn't make sense for, say, a facebook clone startup.
That said, someone should send this comment to a Tesla engineer.
Why does "normal working hours" solve the "reliably catch software errors" issue.
so the solution to overwork is more work?
yes? That was literally my point, its less efficient, but can be okay in terms of final output.
Not sure that holds up to scrutiny, as often when people are tired and overworked their output can dip negative.
It's fine for a few days, but after that it's a false economy.
It's fine for a few days, but after that it's a false economy.
So now you have to do extra work to catch errors, which is a compromise in its own right.
hence the inefficiency comment?
That makes sense, but the point is that it's still a compromise. Even if we're saying that people can work overtime to get things done, there's typically diminishing returns on each additional hour worked, and still no guarantee that quality hasn't been impacted.
If you ask people to work 12 hour days instead of 8 days, does each day provide 8 hours worth of work, 12 hours worth of work, or another value? Can we reliably say that any problems arising from working over 12 hour days are caught and handled at the same level as they would be if people were working 8 hour days?
If you ask people to work 12 hour days instead of 8 days, does each day provide 8 hours worth of work, 12 hours worth of work, or another value? Can we reliably say that any problems arising from working over 12 hour days are caught and handled at the same level as they would be if people were working 8 hour days?
Wasn’t Casper going to do this like four years ago? They have been talking about moving to PoS forever now. It still hasn’t happened.
it did happen (https://beaconcha.in/) and the merge will happen either Q4 or Q1 next year.
I like how these kinds of quips will evaporate
I just wonder what the next criticism will be
I just wonder what the next criticism will be
"Ooops, maybe PoS was a bad idea, sorry about the billions!"
Have fun with Ethereum Classic or future PoW fork with the current state of Ethereum 1.x
I wont be having fun, as I wouldn't touch ETH. But you acknowledge this situation is bad, and could be the cause of more drama (potentially economy breaking drama)?
Eventually switching to PoS has been the established plan for Etherium for years. Any drama about it is manufactured.
Having an abstract plan to distract energy FUD warriors is not the same as having a technical plan to replace engines on moving vehicles. The drama is real, but it requires putting down the hopium pipe.
One of my companies has been running an Eth2 node for 6 months
It fits the risk profile to let that team attempt to deploy and merge a proof of stake network with sharding
It fits the risk profile to let that team attempt to deploy and merge a proof of stake network with sharding
Wouldn’t it be nice if energy were free, and caused no environmental damage? Well, how about cheaper and cleaner. Whether you think spending energy on coin mining is worthwhile or not, energy is required to do any work (by definition), so to feed our innovations, easy energy is important (and not evil). We will need to work on that.
Any easy to follow tutorials on how this Pos system will work?
Everything in this universe is analogous to Proof of Work, it's the most natural system out there. If there is a base monetary layer for the internet, it should be Proof of Work based (and Bitcoin, because it's got the most work done to improve the technology + network effects).
And Stake is derived from Work. Some of you assume PoS exists within its own ecosystem. Even in PoW, the work is derived from previous works, ie, the work required to buy and build the hardware and pay for electricity, etc.
Yeah, now you are proposing a system that is going to be secured purely on that stake everyone acquired, THAT's the issue.
It doesn't exist within its own ecosystem, as I mentioned. Stake is derived from work and work itself is a security, ie, your work is secured by prior works. Everything that built it needed prior work and everything to secure it needs prior security, up the ladder you'd have yourself to secure and work for the currency, your community along with its own governance to state level and on and on up the ladder. PoW and PoS both exist within the same ecosystem.
Except, most people chose to move their stake from one system (USD) to another (ETH) and now, you are a powerful person in this new system. If you owned more stake in the Bitcoin network, you are still a user.
Could you elaborate a bit? Why do you think that?
The crux of it is that you can't rewrite history trivially, you have to expend a lot energy to change history, and energy can't be created nor destroyed.
For something specific to bitcoin/blockchain: https://www.youtube.com/watch?v=qrwgYDAoZV0
For something specific to bitcoin/blockchain: https://www.youtube.com/watch?v=qrwgYDAoZV0
Can you give an example? Struggling with analogy
I have fond memories of Solidity. Not the prettiest language but I built some fun toy projects ("sports prediction" AKA gambling) with it circa 2017/18. However the whole energy thing discouraged me from building anything bigger. I may give it a shot after this merge.
IF it merges. That's a big "if"
The ethereum Miners will rebel, "The Merge" will introduce catastrophic bugs, 0-days will appear.
However, if it does successfully transfer to proof of stake, we're in for a long and exciting ride.
Trust is a valuable commodity these days.
However, if it does successfully transfer to proof of stake, we're in for a long and exciting ride.
Trust is a valuable commodity these days.
> The ethereum Miners will rebel
I don't think miners can do anything about this. In the worst case, they coordinate to stop mining on N-1 block. But this requires an amazing level of coordination, plus network can directly bribe/reward next block producer by paying to `coinbase` address (real `coinbase`, not Armstrong's coinbase).
> "The Merge" will introduce catastrophic bugs, 0-days will appear.
This is why you have testnets.
> we're in for a long and exciting ride.
Definitely!
I don't think miners can do anything about this. In the worst case, they coordinate to stop mining on N-1 block. But this requires an amazing level of coordination, plus network can directly bribe/reward next block producer by paying to `coinbase` address (real `coinbase`, not Armstrong's coinbase).
> "The Merge" will introduce catastrophic bugs, 0-days will appear.
This is why you have testnets.
> we're in for a long and exciting ride.
Definitely!
testnets are great, but cannot approximate the economic impact of technical decisions as they have zero value.
Just because it works on a testnet is not a good justification that it would work at scale on a chain worth billions.
I agree. Ropsten is the proof. Still, I'm fine with Ethereum moving fast and breaking things.
Ropsten coins are worthless, and cannot approximate or prove anything cryptoecomically.
Moving fast and breaking things is great for things of no consequence, but for decentralized money -- I'm not a fan of this philosophy! I like slow, methodical, well tested, well reasoned code from the best minds in the space -- aka Bitcoin.
Moving fast and breaking things is great for things of no consequence, but for decentralized money -- I'm not a fan of this philosophy! I like slow, methodical, well tested, well reasoned code from the best minds in the space -- aka Bitcoin.
> Ropsten coins are worthless, and cannot approximate or prove anything cryptoecomically.
We agree on that. You misread my comment.
My risk tolerance is just different than yours. I've sold all of my BTC for ETH long time ago. Everyone is building on top of Ethereum, not Bitcoin. Bitcoin's meme about "every worthy usecase will get implemented on top of Bitcoin"... it's short-lived. Flippening is nigh, why would people re-implement something which exist on dominant chain on a chain that is subpar in every possible way?
And I disagree about best minds. Bitcoin hasn't produced anything of interest for a long long time. Most patient? Surely. Best? Not even close. Maxwell has missed zero-knowledge proofs in 2013.
We agree on that. You misread my comment.
My risk tolerance is just different than yours. I've sold all of my BTC for ETH long time ago. Everyone is building on top of Ethereum, not Bitcoin. Bitcoin's meme about "every worthy usecase will get implemented on top of Bitcoin"... it's short-lived. Flippening is nigh, why would people re-implement something which exist on dominant chain on a chain that is subpar in every possible way?
And I disagree about best minds. Bitcoin hasn't produced anything of interest for a long long time. Most patient? Surely. Best? Not even close. Maxwell has missed zero-knowledge proofs in 2013.
Lets revisit this in 5 years. Everybody regrets selling their bitcoin for magic beans eventually.
It's not up to the miners to decide, it's up to the nodes to decide.
Also, merge testnet is up already, making sure there are no significant issues.
Also, merge testnet is up already, making sure there are no significant issues.
Crypto is dumb, although I will try to ride the wave.
PoW -- wasteful electrical mining, only big entities can build efficient asic farms. And only in low cost of electricity spots.
PoS -- will incentive oligarchal collusion. Basically same as our current financial system.
PoW -- wasteful electrical mining, only big entities can build efficient asic farms. And only in low cost of electricity spots.
PoS -- will incentive oligarchal collusion. Basically same as our current financial system.
> Ethereum’s power-hungry days are numbered, and I hope that’s true for the rest of the industry too.
Ethereum has been talking about PoS for a long time, so until they actually deliver we should be looking at existing decentralized PoS coins.
Ethereum has been talking about PoS for a long time, so until they actually deliver we should be looking at existing decentralized PoS coins.
There is actual, visible progress, plus a built-in self-destruct that will make continuing on the current chain basically impossible.
They've moved the self-destruct deadline multiple times.
There will be a new PoW chain and a new PoS chain. The old chain will technically exist but mining on it will be impractical. There is no longer enough interest from miners to make the new PoW chain the majority, so the winners of this hard fork will be recognized as "Ethereum" and the other miners will be relegated to a less influential chain. https://news.ycombinator.com/item?id=26441399
That's true but to be honest they pushed back the self destruct several times in the past and will do so again if needed.
Still it's very likely that this time the switch to PoS might finally happen unless something unforseen happens.
The development was speed up by a (most likely) failed attempt / pr-stunt of miners to block an unrelated change which will reduce their profitability considerably in July.
Still it's very likely that this time the switch to PoS might finally happen unless something unforseen happens.
The development was speed up by a (most likely) failed attempt / pr-stunt of miners to block an unrelated change which will reduce their profitability considerably in July.
It already exists https://beaconcha.in/
Does someone have a deeper understanding into Proof Of Stake? For what I remember it never had the same security promises that Proof Of Work had.
In other words if PoS is conceptually sound why don't all cryptocurrencies switch over to it?
In other words if PoS is conceptually sound why don't all cryptocurrencies switch over to it?
They actually are. Most new projects have chosen PoS for sybil resistance, and once Ethereum switches as well, we should have a large enough honey pot in order to gain confidence regarding its security.
The "Cantillion Effect"
https://www.adamsmith.org/blog/the-cantillion-effect
Ethereum is already a system where those who are closest to the money printers benefit the most. At first it was oligarchic just because of its pre-mine and air drops, but PoS just takes that to a new level. You get paid to be rich.
The reason this uses so much less energy is because it's so much closer to a centralized fiat currency. The only value implied by PoS is that some rich people are backing it... a lot like the dollar.
https://www.adamsmith.org/blog/the-cantillion-effect
Ethereum is already a system where those who are closest to the money printers benefit the most. At first it was oligarchic just because of its pre-mine and air drops, but PoS just takes that to a new level. You get paid to be rich.
The reason this uses so much less energy is because it's so much closer to a centralized fiat currency. The only value implied by PoS is that some rich people are backing it... a lot like the dollar.
Also see Ethereum is green: https://our.status.im/ethereum-is-green/
This article obscures the truth, which will be obvious soon, that Ethereum will remain multiple orders of magnitude less efficient than traditional banks.
> Ethereum will remain multiple orders of magnitude less efficient than traditional banks.
As a payment network? Layer 2 solutions will be in production by the end of this summer which will enable payments that costs 3 cents, regardless of demand or amount transferred. Working alongside with smart contracts. Lookup zkSync 2.0 / zkPorter.
As a payment network? Layer 2 solutions will be in production by the end of this summer which will enable payments that costs 3 cents, regardless of demand or amount transferred. Working alongside with smart contracts. Lookup zkSync 2.0 / zkPorter.
Am I right that majority of video card miners are mining Eth? Does it mean that when merge happens, we ca expect video cards be available to buy again?
Reading the discussion here, I think most people don't have a problem with PoS, but the transition from PoW to PoS. If you compare PoS with the dominant client-server model, it's significantly better! In the worst case, PoS can become a "client-server". PoS is transparent and you know that your smart contract will run exactly how it suppose to be executed. No FAANG types of problems.
I did not read through every posts but I have seen a lot of ignorant comments regarding PoS and dPoS. Also I am very surprised that Tendermint (dPoS consensus), Cosmos (decentralized network using Tendermint) and Cosmos SDK (used by many projects, e.g. BNB) do not seem to be mentioned anywhere. I would suggest anyone interested in this topic to have a look at it.
Their graphs show a huge increase in energy consumption for both Bitcoin and Ethereum since January 2021. Why? What happened recently?
Price increase.
The Bitcoin hash rate graph didn't go up like that in 2021.[1] The Etherium hash rate did.[2] Where are they getting their data?
[1] https://bitinfocharts.com/comparison/bitcoin-hashrate.html#3...
[2] https://bitinfocharts.com/comparison/ethereum-hashrate.html
[1] https://bitinfocharts.com/comparison/bitcoin-hashrate.html#3...
[2] https://bitinfocharts.com/comparison/ethereum-hashrate.html
I think price went waaay up for both, thus mining increased substantially. That was about a time I started looking for a graphics card to potentially drive an 8k display under Linux with open-source drivers (so, AMD), and the price for RX5700XT locally has gone from 600€ (I wasn't going to "overpay", ha) to 1000€: not that 5700XT would have done the work I need it for, but GPU prices locally mirror the ethereum demand and likely electricity usage too.
Oh, I fear that this might be on the route to Ethereum-Classic-V2.
Vitalik and core team wake up sulked and there we go..
Vitalik and core team wake up sulked and there we go..
As per https://news.ycombinator.com/item?id=26943408 encouraging folks to state their stake in the comments.
I understand that proof of stake requires an incredible amount of storage. This will make it a steep buy in. It will also raise production of SSDs and drives. How will this shift technically drive technology?
You may be thinking of proof-of-SPACE cryptocurrency, where the more hard drive space you dedicate, the more rewards you get.
Proof of STAKE is where you dedicate your cryptocurrency and are rewarded based on that. Since owning cryptocurrency doesn't take any physical resource, the only expenditure is keeping your staking node (a computer) online so that it can participate in validation.
Proof of STAKE is where you dedicate your cryptocurrency and are rewarded based on that. Since owning cryptocurrency doesn't take any physical resource, the only expenditure is keeping your staking node (a computer) online so that it can participate in validation.
Does anyone know of an estimate of how many individuals actually hold ETH?
The transaction fees are absolutely ludicrous. I can’t imagine the dispersion is actually as high as some people seem to think it is.
The transaction fees are absolutely ludicrous. I can’t imagine the dispersion is actually as high as some people seem to think it is.
Bitcoin layer-2 massively reduces the amount of energy used per transaction. For every on-chain Bitcoin transaction, potentially millions upon millions of Lightning transactions can occur.
It should always be clear that bitcoin doesn't have an energy use per transaction. The energy use of the network doesn't increase with the number of transactions conducted.
It's absolutely true that the layers built on top of bitcoin do and will continue to present scale, allowing for more and faster tx per second.
It's absolutely true that the layers built on top of bitcoin do and will continue to present scale, allowing for more and faster tx per second.
Ethereum doesn't have an energy problem, energy have an Ethereum problem.
Don't get me wrong, it's great that they are working on becoming more effective but the idea that we should judge new technology purely on it's environmental impact as we see these days is counterproductive to progress. Progress from 0 to 1 will always be less effective than the optimization that follows.
We should be much more focused on how to make sure that any technologies energy usage doesn't become an issue by creating clean technologies with high energy density, which are reliable, plentiful and scaleable and doesn't require backup sources.
Don't get me wrong, it's great that they are working on becoming more effective but the idea that we should judge new technology purely on it's environmental impact as we see these days is counterproductive to progress. Progress from 0 to 1 will always be less effective than the optimization that follows.
We should be much more focused on how to make sure that any technologies energy usage doesn't become an issue by creating clean technologies with high energy density, which are reliable, plentiful and scaleable and doesn't require backup sources.
A more energy efficient pyramid Ponzi scheme. Congratulations.
I hope this means i will be able to buy a graphics card soon.
You can buy them right now. In fact, two months ago I bought six 3090s and 15 3080s with a two phone calls and maybe twenty clicks.
The part you're missing is the price. It's my secret, but I'll share it here. You can buy a Dell R12 with one of those cards and, upon receiving it, sell the components for more than the purchase price.
The part you're missing is the price. It's my secret, but I'll share it here. You can buy a Dell R12 with one of those cards and, upon receiving it, sell the components for more than the purchase price.
> Under Proof-of-Stake, when the price of ETH increases, the security of the network does too
This does not follow. Security level is independent of miner reward value under PoS.
This does not follow. Security level is independent of miner reward value under PoS.
As price of Ether rises, it becomes even more difficult to acquire the 32 ETH required to become a validator.
One neat trick reduces cryptocurrency energy usage by 100%
Question from someone relatively clueless: Does that mean that NFTs also will use negligible amount of electricity once that's completely gone through?
Basically. Also, it's already possible to do NFTs with negligible amount using Immutable X layer 2 scaling solution on Ethereum - it's just that they seem to be doing it only for Gods Unchained right now. There will be even more other NFT scaling solutions.
Yes. Any action performed in the network will consume 99.95% less energy after this change has gone through.
Can someone point out what exactly changed at low level code to achieve this optimization in energy consumption or they altered the algorithm altogether ?
Ethereum is winning every crypto/blockchain narrative. This is super impressive and proves, once again, that real value is where devs are.
Given that the main use of cryptocurrency is to increase fiat, and the main reason it increases fiat is based on the fundamentally poor design of guessing at random numbers with increasing difficulty, I predict that if Etherium becomes more efficient, the price will drop and interest in the coin will implode. I'm genuinely curious if I'm wrong, why I'll be wrong. No one cares about BCH, for example, even though it's more efficient than BTC.
I disagree. The initial investments in these big currencies were from people thinking that they could become a practical currency with real-world use due to its lack of regulation and name-attached government tracking. The bulk of fiat driving up the price since then has been somewhat blind speculation. None of these change with PoS; instead, holders are now rewarded for verifying transactions.
I feel like ETH is in very good footing to move to Proof of Space (decentralized network, good dev work, lots of distributed stake), especially in comparison to other projects that have gone with PoS. I'm sure it'll succeed in many ways, but I can't imagine moving away from Nakamoto consensus is going to be "the solution" generally for how to create a working, scalable, well distributed currency.
"Supermarket Monopoly scratchers now printed on 80% post-consumer recycled paper using organic soy ink."
Details at 11.
Details at 11.
This article comes from the Ethereum blog, can anyone verify the numbers or provide an unbiased view?
The numbers that they are providing are pretty reasonable and nobody is really disputing that removing the mining requirement and just staking your Ethereum is enormously more efficient. Even if you assume each staker is running 1 server, then 140k computers NOT running at full tilt all the time is still a tiny consumer of electricity compared to the current situation.
A lot of the debate seems to be around whether or not it's as secure or viable, or whether the existing Ethereum miners will try to stage a coup or something.
Disclaimer: I don't hold cryptocurrency and I think proof-of-work cryptocurrencies are a tragic waste.
A lot of the debate seems to be around whether or not it's as secure or viable, or whether the existing Ethereum miners will try to stage a coup or something.
Disclaimer: I don't hold cryptocurrency and I think proof-of-work cryptocurrencies are a tragic waste.
So... how much money will someone make from mining post merge? Will people be able to make money?
If there was a way to verify the power source is green I think PoW would be the ideal way to move forward. For example if electrons generated by photoelectric cells somehow were different than other electrons (quantum spin, parity, etc.) then maybe an algorithm could check for that and only accept blocks mined using these electrons and not others.
Any crypto system that has an energy problem also has an economic problem. When a transaction requires the same amount of electricity as an average household uses in a month, then each transaction will cost someone a full months electric bill. That will either have to be paid with extremely high transaction fees or "absorbed" by the value of the currency in ways that make it unsuitable as an actual currency.
This is true regardless of the environmental impacts of the specific energy source, and while solar and wind are decreasing in price, it is unlikely costs will drop so much to make this issue negligible.
This is true regardless of the environmental impacts of the specific energy source, and while solar and wind are decreasing in price, it is unlikely costs will drop so much to make this issue negligible.
Currently transaction fees are so high because of bitcoin block subsidies once the subsidy asymptotically approaches zero there will be much lower transaction fees because miners only incentive will come from the fees.
There are far too many blocks being mined not because of volume of transactions that need to be included in them, but because of new block subsidies.
There are far too many blocks being mined not because of volume of transactions that need to be included in them, but because of new block subsidies.
The fact that this has 1000+ comments should give pause to anyone thinking crypto is a gimmick
Sure, and become permanently controlled by the founders, who control 60% of the outstanding supply. Proof of Stake enables any party who at any point controls more than ⅓ of funds to rewrite the chain from that point forward, so this is an objectively terrible idea from an engineering perspective.
Ironically, lowering the cost of mining may also lower the value of the asset.
I struggle to understand how you came to this conclusion.
Dunno. The cost of mining approaches market price. The hypothesis is: will the inverse be true?
Will this reduce fees? I've heard it was a big problem with eth.
ITT: massive amounts of contradiction. This is just ridiculous: no one seems to know how this all works, or even agree on something that is happening right in front of us. This is a big red flag.
EDIT: Instead of down-voting, maybe prove me wrong?
EDIT: Instead of down-voting, maybe prove me wrong?
How do existing Pow coins get transferred to this?
Whole chain is changing the rules. For block N-1 and earlier blocks - fork choice rule inspects amount of work. For block N and later, fork choice rule is one of https://beaconcha.in/
currently, one single bitcoin transaction "costs" 132 kg of CO2.
A well timed article. Glad I invested early
Good one.
Dang keeps saying that he doesn't like obvious comments but he keeps posting comments like this: https://i.imgur.com/jdNHIy0.png ... and pagination has been an issue for a long time.... not sure what it brings.
Just search for "(Posts like this will go away once we turn off pagination.)" is you want to find other occurrences.
Just put the pagination link at the top too if you think that it is an issue instead of sticking your post to the top every time pagination is used? Or just fix the website... how expensive can it be to display 1000 comments with no images.
Just search for "(Posts like this will go away once we turn off pagination.)" is you want to find other occurrences.
Just put the pagination link at the top too if you think that it is an issue instead of sticking your post to the top every time pagination is used? Or just fix the website... how expensive can it be to display 1000 comments with no images.
I think the final outcome of this is that people will go to the next hot PoW coin and the eth "elites" will be left alone playing oligarch
So if you have more ETH, you will get more ETH?
Carbon phobia is a mental disorder.
Its price will also tumble 99% .
People motives to get into crypto are clear. They want to subtract themselves from government policy of constantly printing money. BTC takes care of that and it's a 14 years brand which is extremely politically expensive to make illegal
On the other hand people are perfectly satisfied with their experience on Youtube, Amazon, Google, Facebook, Ebay, JPMorgan etc. which are the entities which Ethereum aims to disrupt
People motives to get into crypto are clear. They want to subtract themselves from government policy of constantly printing money. BTC takes care of that and it's a 14 years brand which is extremely politically expensive to make illegal
On the other hand people are perfectly satisfied with their experience on Youtube, Amazon, Google, Facebook, Ebay, JPMorgan etc. which are the entities which Ethereum aims to disrupt
Let's hope this will happen. It's time this blockchain hype ends.
I think you are correct. PoS coin is worthless coin.
Imagine the tales in the future -- about the potential trillion dollar economy that was invented by some internet nerds who listened too much to people that have no idea what they are talking about, and drove it off a cliff with fancy talk of proof of stake (which was actually engineered by the existing powers to ensure their continued control of global economies).
Why do you say that? What makes PoW so much more meritorious than PoS in your eyes?
>Its price will also tumble 99%
From your lips to God's ears. If the price falls steeply there will be a glut of gpus flooding the market and I'll finally be able to build a pc.
From your lips to God's ears. If the price falls steeply there will be a glut of gpus flooding the market and I'll finally be able to build a pc.
Or you can do what the market is telling you to do and you’ll be able to afford a pc whenever you want
The market signals are right there
The market signals are right there
I'd like to see both if possible. Actually I would like to see BCH replace USD (or a bigger block BTC).
Your post advocates a
(X) technical ( ) legislative (X) market-based ( ) vigilante
approach to solving the double-spend problem in a decentralized cryptocurrency. Your idea will not work. Here is why it won't work. (One or more of the following may apply to your particular idea, and it may have other flaws which used to vary from state to state before a bad federal law was passed.)
(X) Scammers can easily use it to defraud users
(X) Smart contracts and other legitimate cryptocurrency uses would be affected
( ) No one will be able to find the guy or collect the money
(X) It is defenseless against network-level attacks
( ) It will stop scams for two weeks and then we'll be stuck with it
( ) Users of cryptocurrencies will not put up with it
( ) Microsoft will not put up with it
(X) The police will not put up with it
(X) Requires too much cooperation from exchanges
( ) Requires immediate total cooperation from everybody at once
( ) Many cryptocurrency users cannot afford to lose business or alienate potential employers
( ) Scammers don't care about invalid addresses in their lists
(X) Anyone could anonymously destroy anyone else's career or business
(X) Replicated state machines do not scale
Specifically, your plan fails to account for
( ) Laws expressly prohibiting it
( ) Lack of centrally controlling authority for cryptocurrencies
( ) Open relays in foreign countries
( ) Ease of searching tiny alphanumeric address space of all private keys
(X) Asshats
( ) Jurisdictional problems
(X) Unpopularity of weird new taxes
(X) Public reluctance to accept weird new forms of money
(X) Huge existing software investment in PoW
(X) Huge existing software investment in composable smart contracts
(X) Susceptibility of protocols other than PoW to cheap fork creation
(X) Willingness of users to install OS patches received by email
(X) Armies of worm riddled broadband-connected Windows boxes
(X) Eternal arms race involved in all network-healing approaches
(X) Extreme profitability of scams
( ) Joe jobs and/or identity theft
(X) Technically illiterate politicians
(X) Extreme stupidity on the part of people who do business with scammers
( ) Dishonesty on the part of scammers themselves
(X) Bandwidth costs that are unaffected by client filtering
(X) Bitcoin already exists
(X) Error states that require manual intervention to fix
and the following philosophical objections may also apply:
(X) Ideas similar to yours are easy to come up with, yet none have ever been shown practical
( ) Any scheme based on opt-out is unacceptable
( ) Block headers should not be the subject of legislation
( ) Blacklists suck
( ) Whitelists suck
( ) Countermeasures should not involve wire fraud or credit card fraud
(X) Countermeasures should not involve sabotage of public networks
(X) Countermeasures must work if phased in gradually
( ) Sending transactions should be free
(X) Why should we have to trust you and your servers?
( ) Incompatiblity with open source or open source licenses
(X) Feel-good measures do nothing to solve the problem
( ) Temporary/one-time addresses are cumbersome
( ) I don't want the government reading my cryptocurrency transactions
( ) Killing them that way is not slow and painful enough
(X) The rich should not get richer
(X) Money and finance are legal constructs, and should not be replaced by undemocratic systems
Furthermore, this is what I think about you:
(X) Sorry dude, but I don't think it would work.
( ) This is a stupid idea, and you're a stupid person for suggesting it.
( ) Nice try, assh0le! I'm going to find out where you live and burn your house down!
(X) technical ( ) legislative (X) market-based ( ) vigilante
approach to solving the double-spend problem in a decentralized cryptocurrency. Your idea will not work. Here is why it won't work. (One or more of the following may apply to your particular idea, and it may have other flaws which used to vary from state to state before a bad federal law was passed.)
(X) Scammers can easily use it to defraud users
(X) Smart contracts and other legitimate cryptocurrency uses would be affected
( ) No one will be able to find the guy or collect the money
(X) It is defenseless against network-level attacks
( ) It will stop scams for two weeks and then we'll be stuck with it
( ) Users of cryptocurrencies will not put up with it
( ) Microsoft will not put up with it
(X) The police will not put up with it
(X) Requires too much cooperation from exchanges
( ) Requires immediate total cooperation from everybody at once
( ) Many cryptocurrency users cannot afford to lose business or alienate potential employers
( ) Scammers don't care about invalid addresses in their lists
(X) Anyone could anonymously destroy anyone else's career or business
(X) Replicated state machines do not scale
Specifically, your plan fails to account for
( ) Laws expressly prohibiting it
( ) Lack of centrally controlling authority for cryptocurrencies
( ) Open relays in foreign countries
( ) Ease of searching tiny alphanumeric address space of all private keys
(X) Asshats
( ) Jurisdictional problems
(X) Unpopularity of weird new taxes
(X) Public reluctance to accept weird new forms of money
(X) Huge existing software investment in PoW
(X) Huge existing software investment in composable smart contracts
(X) Susceptibility of protocols other than PoW to cheap fork creation
(X) Willingness of users to install OS patches received by email
(X) Armies of worm riddled broadband-connected Windows boxes
(X) Eternal arms race involved in all network-healing approaches
(X) Extreme profitability of scams
( ) Joe jobs and/or identity theft
(X) Technically illiterate politicians
(X) Extreme stupidity on the part of people who do business with scammers
( ) Dishonesty on the part of scammers themselves
(X) Bandwidth costs that are unaffected by client filtering
(X) Bitcoin already exists
(X) Error states that require manual intervention to fix
and the following philosophical objections may also apply:
(X) Ideas similar to yours are easy to come up with, yet none have ever been shown practical
( ) Any scheme based on opt-out is unacceptable
( ) Block headers should not be the subject of legislation
( ) Blacklists suck
( ) Whitelists suck
( ) Countermeasures should not involve wire fraud or credit card fraud
(X) Countermeasures should not involve sabotage of public networks
(X) Countermeasures must work if phased in gradually
( ) Sending transactions should be free
(X) Why should we have to trust you and your servers?
( ) Incompatiblity with open source or open source licenses
(X) Feel-good measures do nothing to solve the problem
( ) Temporary/one-time addresses are cumbersome
( ) I don't want the government reading my cryptocurrency transactions
( ) Killing them that way is not slow and painful enough
(X) The rich should not get richer
(X) Money and finance are legal constructs, and should not be replaced by undemocratic systems
Furthermore, this is what I think about you:
(X) Sorry dude, but I don't think it would work.
( ) This is a stupid idea, and you're a stupid person for suggesting it.
( ) Nice try, assh0le! I'm going to find out where you live and burn your house down!
I love this! I know the original text, did you write this variant?
Ha, yeah, I based it on Cory Doctorow's anti-spam form: https://craphound.com/spamsolutions.txt
[deleted]
The HN narrative engine is so biased towards ETH that some are even asking for advice on where to buy ETH. This is ridiculous, just think through the consequences of a PoS system, you all are smart folks, I presume.
It seems like you’re insinuating that there are negative consequences to the PoS system, but leave it up to the reader to think really deep and understand what those consequences are.
I’m not well versed into PoS systems, but just took a look at ethereum’s explanation and it sounded reasonable, but I’m not familiar with the details and trade-offs that are being made.
Care to enlighten me what you’re referring to?
I’m not well versed into PoS systems, but just took a look at ethereum’s explanation and it sounded reasonable, but I’m not familiar with the details and trade-offs that are being made.
Care to enlighten me what you’re referring to?
The negative consequences were mentioned in another comment:
You should first get "well versed into PoS systems", The stakers (and their adjoints) can collude and decide to reorg the chain for a different outcome. This can be done indefinitely at no additional cost.
In a PoW system, you not only have to expend capex for mining equipment, you hare further discouraged by the huge CONTINUED opex (energy) cost. The energy required to change the state of the chain is similar (or greater) than the energy it took to make the first version.
You should first get "well versed into PoS systems", The stakers (and their adjoints) can collude and decide to reorg the chain for a different outcome. This can be done indefinitely at no additional cost.
In a PoW system, you not only have to expend capex for mining equipment, you hare further discouraged by the huge CONTINUED opex (energy) cost. The energy required to change the state of the chain is similar (or greater) than the energy it took to make the first version.
> The stakers (and their adjoints) can collude and decide to reorg the chain for a different outcome. This can be done indefinitely at no additional cost.
No, they can't. As a part of the attack they will have to produce a two different signatures for the same decision (block N has hash X). This is where slashing comes in - anyone can submit those signatures to the chain to slash signers.
No, they can't. As a part of the attack they will have to produce a two different signatures for the same decision (block N has hash X). This is where slashing comes in - anyone can submit those signatures to the chain to slash signers.
Sir, this has been discussed extensively whenever it comes up. Who will slash the slashers??
Just THINK about the complexity you're introducing, you're just obfuscating the system more and more to just avoid some loopholes, while not eliminating it either.
Just THINK about the complexity you're introducing, you're just obfuscating the system more and more to just avoid some loopholes, while not eliminating it either.
> Who will slash the slashers??
Anyone who can produce a block with the proof inside. Attack you are describing depends on attackers having not 51% of the stake, but 100% of the stake.
> while not eliminating it either.
You would have to show this, not just claim.
Anyone who can produce a block with the proof inside. Attack you are describing depends on attackers having not 51% of the stake, but 100% of the stake.
> while not eliminating it either.
You would have to show this, not just claim.
Not to mention the cavalier attitude towards their tokenomics (quite literally monetary policy now), how often they can change it. It simply doesn't inspire confidence. A monetary layer should be immutable once a good set of rules have been found to be working well.
Just think about it, if a protocol layer on the internet changes its protocol parameters based on some trends, is it a good idea? Bitcoin is like another protocol layer on the internet protocol stack, you build other layers on top of the base monetary layer. You reduce the possibility of bugs in a layer disrupting the whole ecosystem and make the layer more maintainable.
Just think about it, if a protocol layer on the internet changes its protocol parameters based on some trends, is it a good idea? Bitcoin is like another protocol layer on the internet protocol stack, you build other layers on top of the base monetary layer. You reduce the possibility of bugs in a layer disrupting the whole ecosystem and make the layer more maintainable.
I'm not saying 99.95% of energy was completely wasted...
I'm saying the last 0.05% was too
I'm saying the last 0.05% was too
Can someone give a brief summary of what Ethereum is? Is it a crypto that will be merging with some other crypto? How does it relate to Ethereum 2? Are they going to continue being separate cryptos?
To quote wikipedia:
> Ethereum is a decentralized, open-source blockchain with smart contract functionality. Ether (ETH) is the native cryptocurrency of the platform. It is the second-largest cryptocurrency by market capitalization, after Bitcoin. Ethereum is the most actively used blockchain.
It's a blockchain whose token wasn't intended as a cryptocurrency but as a medium for paying for having a program ("smart contract") stored on it run on every node of the network. In practice this can be used for all sorts of things, including bootstrapping the vast majority of other cryptocurrencies currently in existence, but under the current system it can't process transactions effectively enough to be useful in that manner.
As I understand it Ethereum 2, which is a really long term thing they've been doing for years, is meant to gobble up the original Ethereum completely once all stages of deployment are completed (any prior forks that may happen would remain independent, I guess).
> Ethereum is a decentralized, open-source blockchain with smart contract functionality. Ether (ETH) is the native cryptocurrency of the platform. It is the second-largest cryptocurrency by market capitalization, after Bitcoin. Ethereum is the most actively used blockchain.
It's a blockchain whose token wasn't intended as a cryptocurrency but as a medium for paying for having a program ("smart contract") stored on it run on every node of the network. In practice this can be used for all sorts of things, including bootstrapping the vast majority of other cryptocurrencies currently in existence, but under the current system it can't process transactions effectively enough to be useful in that manner.
As I understand it Ethereum 2, which is a really long term thing they've been doing for years, is meant to gobble up the original Ethereum completely once all stages of deployment are completed (any prior forks that may happen would remain independent, I guess).
thanks for the explanation. interesting read; don't really get it, but worth looking into more.
It's like Bitcoin except it has vulnerabilities so will be hacked (and it already has been) or taken over by the Zuckerbergs of the world when the incentives are high enough in the future (maybe 5 or 10 years) then it will implode.
https://github.com/libbitcoin/libbitcoin-system/wiki/Proof-o...
https://standardcrypto.wordpress.com/2021/03/31/the-censorsh...
ETH is competing against USD, not against BTC.
Bitcoin is competing against gold.
Different races. different goals.
Different risks.
https://standardcrypto.wordpress.com/2021/03/31/the-censorsh...
ETH is competing against USD, not against BTC.
Bitcoin is competing against gold.
Different races. different goals.
Different risks.
> ETH is competing against USD, not against BTC. Bitcoin is competing against gold.
If true, this means that every argument comparing BTC to fiat is bullshit.
Given that most arguments I see in favor of BTC compare it to fiat, this doesn’t speak well to the understanding of those who hold it.
Given that BTC’s value is predicated purely on the beliefs of those who hold it, a systematic misunderstanding like this suggests problems in store.
If true, this means that every argument comparing BTC to fiat is bullshit.
Given that most arguments I see in favor of BTC compare it to fiat, this doesn’t speak well to the understanding of those who hold it.
Given that BTC’s value is predicated purely on the beliefs of those who hold it, a systematic misunderstanding like this suggests problems in store.
https://web.archive.org/web/20210116135412/https://taaalk.co...
Bitcoin will be fine.
Bitcoin will be fine.
To be clear, bitcoin is of course also competing against USD.
But this is neither a fair nor an interesting competition.
Life span of fiat currencies is usually decades.
But this is neither a fair nor an interesting competition.
Life span of fiat currencies is usually decades.
> ETH is competing against USD, not against BTC. Bitcoin is competing against gold.
> To be clear, bitcoin is of course also competing against USD
These can’t both be true.
> To be clear, bitcoin is of course also competing against USD
These can’t both be true.
Yes they can.
Eth competing against USD. Bitcoin competing against USD and Gold.
Bitcoin and Eth are also both competing against turkish lira, Tide pods, and zibwawean mortgage bonds.
But only one competes with gold.
Eth competing against USD. Bitcoin competing against USD and Gold.
Bitcoin and Eth are also both competing against turkish lira, Tide pods, and zibwawean mortgage bonds.
But only one competes with gold.
Sorry, no.
You said:
> ETH is competing against USD, not against BTC. Bitcoin is competing against gold
You also said:
> bitcoin is of course also competing against USD
BTC and ETH can’t both be competing with USD without competing with each other.
If your statement that BTC is competing with USD is true, then your statement “ETH is competing against USD, not against BTC” is false.
ETH is competing against BTC.
You said:
> ETH is competing against USD, not against BTC. Bitcoin is competing against gold
You also said:
> bitcoin is of course also competing against USD
BTC and ETH can’t both be competing with USD without competing with each other.
If your statement that BTC is competing with USD is true, then your statement “ETH is competing against USD, not against BTC” is false.
ETH is competing against BTC.
Technically, my py pinky fingernail is competing with our latest nuclear powered aircraft carriers.
Doesn't guarantee that my fingernail will win a shooting war.
Doesn't guarantee that my fingernail will win a shooting war.
Is this meant as an analogy for ETH and BTC?
If so, it seems like it’s just a circular reference to your personal belief in the strength of BTC over ETH, rather than a relevant argument.
If so, it seems like it’s just a circular reference to your personal belief in the strength of BTC over ETH, rather than a relevant argument.
ETH wont, and shouldn't migrate to PoS. PoS is a scam -- a trick, a reinvention of existing corrupt economic models.
It throws out the greatest part of decentralized cryptocurrencies -- trustless, independently verifiable, auto-adjusting to external conditions, hard to fake proof of work. It replaces it with shell games and chicanery.
I am very pro proof of work. The energy usage is a good thing. We can deal with the emissions from generation out of band, it is not the protocols problem.
Two primary concerns, technical feasibility and political strife:
I have my extreme doubts that you can move a chain like this without causing it to collapse. As yet all we have seen out of the eth camp is more broken proof of concepts -- not a viable model for a potentially trillion dollar economy. How to you replace a jet engine mid flight? (You don't. Unless you like not safely landing).
PoS coin is worthless coin. If you want to have your expensive-to-mine gas coin be worth something, you have to make it hard to acquire. My second concern is that if they do manage to 'migrate', enough folks will ignore this and keep mining. This is a problem today with more contentious PoW hard forks.
Ultimately this behavior will lead to more chain forks, which unlike in the ETC days actually is a big deal today. Whos USDT USDC etc is the real coin? The eth1 PoW 'legacy' network, or the eth2 'pos' chain, or what about the eth1-a/eth1-b fork when the first political staking challenges come up (see all world religion schisms). PoW solves this problem. One truth, enforced by universal energy usage. Not power players arguing over interpretations of religious text.
Two primary concerns, technical feasibility and political strife:
I have my extreme doubts that you can move a chain like this without causing it to collapse. As yet all we have seen out of the eth camp is more broken proof of concepts -- not a viable model for a potentially trillion dollar economy. How to you replace a jet engine mid flight? (You don't. Unless you like not safely landing).
PoS coin is worthless coin. If you want to have your expensive-to-mine gas coin be worth something, you have to make it hard to acquire. My second concern is that if they do manage to 'migrate', enough folks will ignore this and keep mining. This is a problem today with more contentious PoW hard forks.
Ultimately this behavior will lead to more chain forks, which unlike in the ETC days actually is a big deal today. Whos USDT USDC etc is the real coin? The eth1 PoW 'legacy' network, or the eth2 'pos' chain, or what about the eth1-a/eth1-b fork when the first political staking challenges come up (see all world religion schisms). PoW solves this problem. One truth, enforced by universal energy usage. Not power players arguing over interpretations of religious text.
> enough folks will ignore this and keep mining
Irrelevant. Well designed networks are pretty much isolated from whims of miners. Ethereum is one of them, Bitcoin is not. I'm speaking about 2 weeks difficulty re-targeting window vs single block window.
> It replaces it with shell games and chicanery.
Why do you perceive it like that? I would love to hear details.
Ethereum will use hybrid PoS. Where random number generation (deciding who will become next block producer) is separated from deciding who is in the pool of potential producers (anty-sybil defense). First will be decided with commit-reveal scheme unbiased with the use of VDFs, second - with PoS.
Irrelevant. Well designed networks are pretty much isolated from whims of miners. Ethereum is one of them, Bitcoin is not. I'm speaking about 2 weeks difficulty re-targeting window vs single block window.
> It replaces it with shell games and chicanery.
Why do you perceive it like that? I would love to hear details.
Ethereum will use hybrid PoS. Where random number generation (deciding who will become next block producer) is separated from deciding who is in the pool of potential producers (anty-sybil defense). First will be decided with commit-reveal scheme unbiased with the use of VDFs, second - with PoS.
Sounds like a shell game to me. You know what isn't? Burning energy, using a simple hash function to measure how much energy was burned. Simple, effective, safe. Energy usage is a good thing, actually.
There is nothing simple about hash functions :-) They rely on unproven mathematical conjecture that one-way functions exist. Their existence would imply that P!=NP :-)
Re: shell game. Are you implying that fraud or misdirection is involved? Some bitcoin scientist should be able to point where it is hidden. Or is it just a claim without evidence?
Re: shell game. Are you implying that fraud or misdirection is involved? Some bitcoin scientist should be able to point where it is hidden. Or is it just a claim without evidence?
What are your thoughts on PoET systems?
Proof of elapsed time? The intel thing?
Only works with trusted nodes and/or permissioned blockchains; not suitable for trustless/permissionless public chains.
The only trustless consensus system we have today is proof of work. And it works well, at scale, for 14 years.
rothschilds
People seem to forget that this energy use is a consequence of miners wanting coins because of the subjective value of the reward. Even stakers can expend more money for a better chance at receiving the eth2 staking rewards. This will result in just as much energy use for a given reward value as Bitcoin. The question is if you can account for it. Eth2 propagandists are being very -- unintentionally -- dishonest about this.
Energy use will always meet demand for coins. This is true even in USD. Bitcoin is actually more efficient than existing financial systems. Bitcoin removes all the labor and expense that goes into running ATMs, Bank buildings, tellers, and so forth. Eth also does this.
The real way to address energy use is to introduce seignorage into the system. (https://en.wikipedia.org/wiki/Seigniorage) in order to do this, you must give some of the new issuance to people who are not part of the system of validation.
Eth2 might work for awhile, and it might make people rich as people put up more and more stake in order to obtain rewards. (The block reward is effectively a risk-free rate of return). However, long term, you end up with a larger and larger percentage of the economy controlled by very few people.
Systems like this dis-incentivize the creation of real value through investment in real-world goods and services. Long term, people will opt out of this nonsense as it produce coins which are not useful in real business transactions due to the deflationary nature of the tokens.
Energy use will always meet demand for coins. This is true even in USD. Bitcoin is actually more efficient than existing financial systems. Bitcoin removes all the labor and expense that goes into running ATMs, Bank buildings, tellers, and so forth. Eth also does this.
The real way to address energy use is to introduce seignorage into the system. (https://en.wikipedia.org/wiki/Seigniorage) in order to do this, you must give some of the new issuance to people who are not part of the system of validation.
Eth2 might work for awhile, and it might make people rich as people put up more and more stake in order to obtain rewards. (The block reward is effectively a risk-free rate of return). However, long term, you end up with a larger and larger percentage of the economy controlled by very few people.
Systems like this dis-incentivize the creation of real value through investment in real-world goods and services. Long term, people will opt out of this nonsense as it produce coins which are not useful in real business transactions due to the deflationary nature of the tokens.
> Energy use will always meet demand for coins. This is true even in USD. Bitcoin is actually more efficient than existing financial systems. Bitcoin removes all the labor and expense that goes into running ATMs, Bank buildings, tellers, and so forth. Eth also does this.
How can you say this in good faith when BTC doesn't do the same things existing financial systems do?
How can you say this in good faith when BTC doesn't do the same things existing financial systems do?
Your entire argument is base on the fact that more people mine because when the rewards are better, higher price.
But in PoS there is no mining. More and more people will stake, but will do so with a small single VM, with no GPUs or ASICS mining and using power.
So a PoS system will never ever use as much energy as BTC mining, by many many orders of magnitude.
But in PoS there is no mining. More and more people will stake, but will do so with a small single VM, with no GPUs or ASICS mining and using power.
So a PoS system will never ever use as much energy as BTC mining, by many many orders of magnitude.
> Even stakers can expend more money for a better chance at receiving the eth2 staking rewards. This will result in just as much energy use for a given reward value as Bitcoin.
I think you are wrong. Staker pays in "time-cost of money", which is proportional to the stake size and in energy cost, which is pretty much constant (few watts). Your argument implies that there will be greater amount of stakers. That would be plausible if not for 32ETH minimal stake.
I think you are wrong. Staker pays in "time-cost of money", which is proportional to the stake size and in energy cost, which is pretty much constant (few watts). Your argument implies that there will be greater amount of stakers. That would be plausible if not for 32ETH minimal stake.
https://news.ycombinator.com/item?id=27194586&p=2
https://news.ycombinator.com/item?id=27194586&p=3
https://news.ycombinator.com/item?id=27194586&p=4
https://news.ycombinator.com/item?id=27194586&p=5
(Posts like this will go away once we turn off pagination.)