Why Can't Computing at the Heart of Bitcoin Be More Useful?(spectrum.ieee.org)
spectrum.ieee.org
Why Can't Computing at the Heart of Bitcoin Be More Useful?
https://spectrum.ieee.org/energywise/computing/networks/making-blockchain-bitcoin-computing-more-useful
150 comments
This very question has been asked on stackexchange : https://bitcoin.stackexchange.com/questions/331
Summary:
1. The input need to be unpredictable. Block N is the seed for block N+1.
2. It needs to be difficult to calculate, yet trivially easy to verify.
3. Difficulty needs to be adjustable.
The only idea I've ever seen that met all three of these criteria was PrimeCoin's usage of calculating certain Cunningham twin primes (which is still of unclear/tiny value).
1. The input need to be unpredictable. Block N is the seed for block N+1.
2. It needs to be difficult to calculate, yet trivially easy to verify.
3. Difficulty needs to be adjustable.
The only idea I've ever seen that met all three of these criteria was PrimeCoin's usage of calculating certain Cunningham twin primes (which is still of unclear/tiny value).
4. You cannot make money off of the work being done because the saved money will then be spent on more mining until we hit a 100% non commercial computation equilibrium
It is useful if you consider having a non-governmental/internet native currency a useful thing.
If you don't see any value in that, it's gonna be hard to justify that computation.
If you don't see any value in that, it's gonna be hard to justify that computation.
It's not just non-governmental currency (in fact, it's rather crappy if regarded purely as e-currency), it's also basic infrastructure for decentralized trust. Currency is simply the most basic application of a fully distributed blockchain.
There are far less costly ways for the environment to achieve the same results.
This is simply unjustifiable, when thousands of people are actively running the planet to the ground to make a quick buck in an online casino.
This is simply unjustifiable, when thousands of people are actively running the planet to the ground to make a quick buck in an online casino.
Great, what's your proposal for the alternative then?
Are you talking about the stock market? Or the companies that have already more or less destroyed the planet to extract every last bit of profit?
Are you talking about the stock market? Or the companies that have already more or less destroyed the planet to extract every last bit of profit?
> There are far less costly ways for the environment to achieve the same results.
I'd love to know what your top alternative is
I'd love to know what your top alternative is
Which of the crypto currencies is a "non-governmental/internet native currency"? From my POV they all seem like proto-NFTs.
Non fungible tokens are by definition not interchangeable.
Whereas things like Bitcoin and Ether are fungible, meaning there's no difference between my 1BTC and your 1BTC.
Whereas things like Bitcoin and Ether are fungible, meaning there's no difference between my 1BTC and your 1BTC.
I said they were "proto" NFTs and one thing they have in common, again from my view point, is that you buy them and hope that someone else will pay you more for it later. Beyond that it's just entries of hope on the block chain.
In Siberia they heat using btc mining: https://archive.curbed.com/2017/11/9/16619032/bitcoin-mining...
Unfortunately it’s still way, way less efficient than other heating systems like heat pumps
This also doesn’t address the wasted materials and labor used to make the chips.
This also doesn’t address the wasted materials and labor used to make the chips.
Not really. Heat pumps can't be used in cold climates due to ice forming on heat fins which breaks the efficiency. It's why we use a lot of baseboard heaters in Canada. Bitcoin mining would be perfect for electric heating of homes here. Plus the added bonus of eliminating green house gas emissions from burning natural gas in a furnace (how my house is heated). The problem with baseboard is that gas heating is far cheaper than electric. So could Bitcoin actually be used to make the world greener?
> So could Bitcoin actually be used to make the world greener?
No. The value of a PoW coin is based on the wasted electricity.
If mining does something useful (like heating) for a large fraction of the miners the mining difficulty will go up to adapt to such change, requiring additional mining.
At the end of the amount of wasted electricity will remain the same.
No. The value of a PoW coin is based on the wasted electricity.
If mining does something useful (like heating) for a large fraction of the miners the mining difficulty will go up to adapt to such change, requiring additional mining.
At the end of the amount of wasted electricity will remain the same.
I think you need to research more. A computer is actually a heater that is 100% efficient. If you actually "waste electricity" to do useless computation, you still get 100% efficient heat output. 1000W of electricity pumped through your cpu is outputting 1000W of heat as well. Maybe imagine if your logic gates in your computer is water powered. You could still drink the water after it did it's computation.
If running a Bitcoin heater costs half as much as running a regular Bitcoin miner then you can spend the savings on twice as many miners to get more Bitcoin. If everyone does then the effect is net zero. However, your miner can't be a heat pump so in practice it would be net negative.
Yes so now 20 million people (very small amount) install these space heaters, heck install 3. Now they are at equilibrium except the mining difficulty has gone wayyy up (because 20 million ASIC miners will double the global hashrate approximately). Now mining in server racks is no longer profitable because dealing with waste heat is a major expense for them. So not only is hashing now very distributed, but also not 100% wasted.
> I think you need to research more. A computer is actually a heater that is 100% efficient.
I have a degree in EE.
The wasted electricity is in additional heat that you don't want in your home and you have to vent.
Suppose millions of people could replace resistance heaters with mining rigs that cost exactly the same and consume exactly the same amount of energy every day.
Such people would be running the miners ever if the financial gain is very close to zero, because they were already using the same amount of electricity for heating.
That means they would push the mining difficulty up. But, if the demand for coin remains the same, other people will run mining rigs that releases increasing amount of heat in the environment.
You just pushed the amount of wasted heat from one place to another.
I have a degree in EE.
The wasted electricity is in additional heat that you don't want in your home and you have to vent.
Suppose millions of people could replace resistance heaters with mining rigs that cost exactly the same and consume exactly the same amount of energy every day.
Such people would be running the miners ever if the financial gain is very close to zero, because they were already using the same amount of electricity for heating.
That means they would push the mining difficulty up. But, if the demand for coin remains the same, other people will run mining rigs that releases increasing amount of heat in the environment.
You just pushed the amount of wasted heat from one place to another.
Ah I see what you meant by "work can't be useful", apologies. But I think you did jump to some conclusions for example, increase of difficulty does not require more miners. It is a side effect of miners joining. So the profitability of existing mining infra in server racks will go down due to the difficulty increase. It would most likely incentivize them to also somehow recycle their "waste heat" for profit. My comment elsewhere is maybe devoping space heaters that do computation (maybe hashing is not that computation but I think it can work), we could use them to migrate off existing heating tech used in my country (natural gas furnaces) and net lower greenhouse gas emissions because not all electricity is generated from greenhouse gas, only some, and it also has a path forward to no green house gas emissions from electricity generation.
The value of any PoW coin is based on the sacrifice being made. Something is valuable because you are throwing away something else that was valuable. There's no way around it.
Regarding heating things with electricity, a heat pump is way more efficient than resistance/mining heating because is moving existing heat from one place to another.
Regarding heating things with electricity, a heat pump is way more efficient than resistance/mining heating because is moving existing heat from one place to another.
> Heat pumps can't be used in cold climates due to ice forming on heat fins which breaks the efficiency.
Define "cold". Mitsubishi units have 100% of capacity at 23F/-5C and 75% capacity at -13F/-25C:
* https://www.mitsubishicomfort.com/benefits/hyper-heating
They're used in Alaska:
* https://www.nrel.gov/news/features/2021/even-in-frigid-tempe...
Fujitsu says -15F/-25C as well:
* https://www.fujitsugeneral.com/us/residential/technology/xlt...
Define "cold". Mitsubishi units have 100% of capacity at 23F/-5C and 75% capacity at -13F/-25C:
* https://www.mitsubishicomfort.com/benefits/hyper-heating
They're used in Alaska:
* https://www.nrel.gov/news/features/2021/even-in-frigid-tempe...
Fujitsu says -15F/-25C as well:
* https://www.fujitsugeneral.com/us/residential/technology/xlt...
I guess I was trying to say its efficiency breaks down and isn't competitive with basic electric baseboard heat at some temperature below zero celcius (not sure what the break-even point is). I didn't think people in Alaska would be using that for home heating, is that a thing? The norm here is gas heat and the odd electric baseboard home which broken down elsewhere by another commenter is approximately 10x the price of gas heating.
> I guess I was trying to say its efficiency breaks down and isn't competitive with basic electric baseboard heat at some temperature below zero celcius (not sure what the break-even point is).
At the 'break down point' an air source heat pump (HP) is no worse than a baseboard heater: in both cases the COP is basically 1.0. So you might as well go with the HP as it'll be more efficient for probably the majority of the year.
You can get gas furnaces that are 'dual fuel': they'll run the HP refrigerant through the exchange and circulate the conditioned air, and once it's "too cold" switch to gas.
If you're going to buy a only-cooling AC unit, then spending a little more on a heat-cool HP is probably a smart idea. There's a payback period, and it depends on the price of your electricity and fossil fuel (NG, propane).
At the 'break down point' an air source heat pump (HP) is no worse than a baseboard heater: in both cases the COP is basically 1.0. So you might as well go with the HP as it'll be more efficient for probably the majority of the year.
You can get gas furnaces that are 'dual fuel': they'll run the HP refrigerant through the exchange and circulate the conditioned air, and once it's "too cold" switch to gas.
If you're going to buy a only-cooling AC unit, then spending a little more on a heat-cool HP is probably a smart idea. There's a payback period, and it depends on the price of your electricity and fossil fuel (NG, propane).
And apparently Fujitsu's work better in F but the same in C. I always thought these were display-only settings.
In cold climates you bury the heat exchanger under the frost line.
That sounds really interesting but isn't that useless because at that point you may as well use geothermal. Doesn't the exchanger need air to flow over it hence the fins for it to work? I think geothermal is the biggest win environmentally however so there is that.
In most places, "geothermal" is just a "ground sourced heat pump". Circulate a liquid underground so that it keeps that 50-degree temperature, run a heat exchange with that as the source instead of the air.
(In other places and to a larger extent pop culture, "geothermal" refers to tapping into actual heat sources underground.)
(In other places and to a larger extent pop culture, "geothermal" refers to tapping into actual heat sources underground.)
Heat pumps can be used down to around -15F. This does impose a limit, but it's a lot further north and/or a lot less frequent than most people assume.
They simply periodically pump a bit of heat back out to keep the exchanger free of ice.
You'll periodically need a backup source of heat, but most of the time you'll be fine with the heat pump alone.
They simply periodically pump a bit of heat back out to keep the exchanger free of ice.
You'll periodically need a backup source of heat, but most of the time you'll be fine with the heat pump alone.
For those of us living on boats (in the UK, so nothing close to Siberia temperatures) how feasible is solar powered off grid mining, using heat for hot water/heating?
I always hear this argument that baseboard is "way more expensive" than gas, how much are we talking? 2x? 10x?
Somewhere in the 10x range.
The approximation for electrical use in heating is using heaters that can output roughly 10 watts per square foot of your house. 12-13 if your house is poorly insulated.
At full power, that means that a 1,600 sqft house requires 16 kW of electricity. At a cost of 13¢ per kWH, that's about $2.05 for that 16kW of electricity. Of course, no residential house will ever realistically have 16kW available to it, nor would heating ever require a 100% duty cycle. But this is for comparative purposes.
The equivalent amount of gas power would require about 54,000 BTUs from a gas furnace (about 3.4 BTUs per watt). One cubic foot of natural gas provides 1,032 BTUs which means that generating 54,000 BTUs of heat requires about 52 cubic feet of gas (we'll round that up to 65 to account for inefficiencies of a furnace; top end furnaces are in the 80-80% efficiency range). 100 cubic feet of natural gas costs about $0.48, so the cost for natural gas would be around 30¢
Again, neither will (nor could, nor should) run constantly, but it's a sobering comparison.
EDIT: Comparisons were hours vs. seconds; fixed.
The approximation for electrical use in heating is using heaters that can output roughly 10 watts per square foot of your house. 12-13 if your house is poorly insulated.
At full power, that means that a 1,600 sqft house requires 16 kW of electricity. At a cost of 13¢ per kWH, that's about $2.05 for that 16kW of electricity. Of course, no residential house will ever realistically have 16kW available to it, nor would heating ever require a 100% duty cycle. But this is for comparative purposes.
The equivalent amount of gas power would require about 54,000 BTUs from a gas furnace (about 3.4 BTUs per watt). One cubic foot of natural gas provides 1,032 BTUs which means that generating 54,000 BTUs of heat requires about 52 cubic feet of gas (we'll round that up to 65 to account for inefficiencies of a furnace; top end furnaces are in the 80-80% efficiency range). 100 cubic feet of natural gas costs about $0.48, so the cost for natural gas would be around 30¢
Again, neither will (nor could, nor should) run constantly, but it's a sobering comparison.
EDIT: Comparisons were hours vs. seconds; fixed.
> Unfortunately it’s still way, way less efficient than other heating systems like heat pumps
That's not necessarily always the case. There's a threshold where the delta between the outside ambient temperature and desired indoor temperature is too large, it becomes more efficient to use something like resistive heating rather than a heat-pump
That's not necessarily always the case. There's a threshold where the delta between the outside ambient temperature and desired indoor temperature is too large, it becomes more efficient to use something like resistive heating rather than a heat-pump
I dont think heat pumps work in sibearian winter of -40
The limits seems to be -25C/-15F, and I'm guessing that's because of the refrigerant that generally used in residential HVAC (R-410A?).
F or C?
/s
/s
For about the zillionth time, space heating with Bitcoin mining is about one-quarter as energy-efficient as using an actual heat pump and so the “we can heat buildings with it!” argument does not actually excuse the massive energy use at all.
I commented above but from my understanding heat pumps are worse than baseboard electric heaters when the temperature outside is below zero celsius (assume the air is exchanged outside) because the fins start to ice over due to condensation and it's why no heat pumps are used in so many countries that are cold. But I have only researched a bit would appreciate any expert opinions!
The 0C limit was true in the 80s, but isn't nearly as true now. My unit, which is far from a top of the line heat pump, holds a COP >1 down to about -15F, or -26C.
However, you're correct about coils icing up. That impacts some regions more than others. I'm in a fairly dry high desert climate, and our coils don't ice up unless we have fog (at which point, yes, they ice badly). There are defrost cycles that reverse the unit and melt the ice, but it is a problem in climates where it tends very humid in the winter.
However, there are a lot of places where it works fine, and one can always use a dual fuel setup, where a heat pump is used down to whatever temperature it starts having problems, then switch over to something else (gas fired furnaces are the usual backing option) in the extreme cold. You still get the energy savings of the heat pump while it works well, but can keep a house warm down to quite chilly temperatures.
Of course, if it gets really cold, a ground source unit becomes worth looking at (heat exchange with the ground, either via a deep well or a bunch of coils under the yard).
However, you're correct about coils icing up. That impacts some regions more than others. I'm in a fairly dry high desert climate, and our coils don't ice up unless we have fog (at which point, yes, they ice badly). There are defrost cycles that reverse the unit and melt the ice, but it is a problem in climates where it tends very humid in the winter.
However, there are a lot of places where it works fine, and one can always use a dual fuel setup, where a heat pump is used down to whatever temperature it starts having problems, then switch over to something else (gas fired furnaces are the usual backing option) in the extreme cold. You still get the energy savings of the heat pump while it works well, but can keep a house warm down to quite chilly temperatures.
Of course, if it gets really cold, a ground source unit becomes worth looking at (heat exchange with the ground, either via a deep well or a bunch of coils under the yard).
So.. somehow the heat output of a mining computer just disappears? Oh wait that's nonsense, because your CPU is literally a heat pump.
A "heat pump" in this context is a device that uses a refrigeration cycle to extract heat from outside and move it inside. An A/C running in reverse, essentially.
And heat pumps are vastly more efficient than resistive heating (or using the heat from a microchip).
In many places, for every 1W of power a heat pump consumes, it can move 4W or more of heat into the space.
And heat pumps are vastly more efficient than resistive heating (or using the heat from a microchip).
In many places, for every 1W of power a heat pump consumes, it can move 4W or more of heat into the space.
The metric being discussed relates to how much thermal energy you get for a given electrical input.
If you put 1000W into a Bitcoin miner, computer, resistive space heater, etc, you get 1000W thermal out.
If you use that 1000W to turn the compressor in a heat pump, you get far more heat out (3-4x is a reasonable average in a lot of areas), because you're not simply generating heat from the energy - you're using the energy to move heat. A heat pump is an air conditioner in reverse - you cool the outside air and heat the inside air.
A standard CPU dissipates heat as a resistive heater would - you pump 100W into the CPU, you get 100W of heat out. I'm not sure what you're using to claim that a CPU "is literally a heat pump" here - it's not, by any standard definition of a heat pump.
If you put 1000W into a Bitcoin miner, computer, resistive space heater, etc, you get 1000W thermal out.
If you use that 1000W to turn the compressor in a heat pump, you get far more heat out (3-4x is a reasonable average in a lot of areas), because you're not simply generating heat from the energy - you're using the energy to move heat. A heat pump is an air conditioner in reverse - you cool the outside air and heat the inside air.
A standard CPU dissipates heat as a resistive heater would - you pump 100W into the CPU, you get 100W of heat out. I'm not sure what you're using to claim that a CPU "is literally a heat pump" here - it's not, by any standard definition of a heat pump.
A heat pump is a specific technology, not a generic term for something that produces heat: https://en.m.wikipedia.org/wiki/Heat_pump
No, your CPU is a resistive heater, which is less efficient than a heat pump.
A heat pump moves heat around, using energy – the opposite of a Sterling engine.
Bitcoins use an entropy increasing resistance hash function, which makes it terrible for heating and cooling. There's a reason why we should use FedCoin instead of Bitcoin or cash or gold.
It... what?
If you put 1000W of electrical energy into a Bitcoin miner, you get 1000W of heat out the far end. It's the same efficiency as a resistive element space heater, just has done some work (useful or not, it's still work) on the way through.
Same thing for a computer running BOINC or Folding@Home. Power goes in, heat comes out, but you've done something useful in the gap.
If you put 1000W of electrical energy into a Bitcoin miner, you get 1000W of heat out the far end. It's the same efficiency as a resistive element space heater, just has done some work (useful or not, it's still work) on the way through.
Same thing for a computer running BOINC or Folding@Home. Power goes in, heat comes out, but you've done something useful in the gap.
Congratulations, you have reduced your heating bill by $x! You can now spend $x on mining and get more Bitcoin!
I knew someone last winter, during the spike in Bitcoin prices, who had done the math and figured out that heating on some older Bitcoin miners was profitable. Not only was the value of Bitcoin produced greater than his power cost (not everyone has CA power costs), it meant he wasn't paying anything separately for heat. I think he got them for very little because they "weren't profitable to run" when they were being sold.
I typically heat my office (off grid solar shed) in the winter on waste compute - I've got a few computers in here that run Folding@Home/BOINC and I just run them if I've got surplus power. I have propane backup for the really dark grey days ("generator days" if they extend past about a day - it's cheaper to run a gallon of gas through an old generator than to radically expand my battery bank), but most of my winter heat comes from running F@H/BOINC. To the point that on a clear, sunny winter day, I have my window open and fans sucking cold air in or I'll roast in here. I can hold about 1.8kW of load no problem on a clear day.
Now that I have solar on the house, I've considered adding an old compute rig or two in there for winter heat. It's less efficient than our heat pump on warm days, but we also get some cold, grey, foggy days in which the heat pump likes to ice up badly. Normally, if the heat pump isn't keeping up with things, the thermostat will call for the backup coils (which are just big resistors) to aid, and they're the same efficiency at turning electricity into heat as a couple computers. Old Xeons aren't amazingly power efficient, but you can also get them for free or nearly so and throw compute at your preferred projects.
One can optimize for a wide variety of things - energy spent, compute performed, Bitcoin mined, minimum cost, etc. It works better, and is a lot more efficient, if you look at everything as a system and integrate it. I don't run BOINC tasks on my homeserver when we're in air conditioning season, but I light up a couple cores of them in the winter.
I typically heat my office (off grid solar shed) in the winter on waste compute - I've got a few computers in here that run Folding@Home/BOINC and I just run them if I've got surplus power. I have propane backup for the really dark grey days ("generator days" if they extend past about a day - it's cheaper to run a gallon of gas through an old generator than to radically expand my battery bank), but most of my winter heat comes from running F@H/BOINC. To the point that on a clear, sunny winter day, I have my window open and fans sucking cold air in or I'll roast in here. I can hold about 1.8kW of load no problem on a clear day.
Now that I have solar on the house, I've considered adding an old compute rig or two in there for winter heat. It's less efficient than our heat pump on warm days, but we also get some cold, grey, foggy days in which the heat pump likes to ice up badly. Normally, if the heat pump isn't keeping up with things, the thermostat will call for the backup coils (which are just big resistors) to aid, and they're the same efficiency at turning electricity into heat as a couple computers. Old Xeons aren't amazingly power efficient, but you can also get them for free or nearly so and throw compute at your preferred projects.
One can optimize for a wide variety of things - energy spent, compute performed, Bitcoin mined, minimum cost, etc. It works better, and is a lot more efficient, if you look at everything as a system and integrate it. I don't run BOINC tasks on my homeserver when we're in air conditioning season, but I light up a couple cores of them in the winter.
That seems only marginally better than the not-uncommon mode of heating (gas) and temperature control (windows).
It’s actually worse than gas due to the inefficiencies inherent in power generation and transmission
nonsense. it's electricity. Gas doesn't have the option of coming from carbon neutral sources.
Well sure if you happen to live somewhere that has 100% carbon neutral electricity - but in that (very rare) case the electricity use for mining Bitcoin without heating your house is also not an environmental problem. In reality, the vast majority of Russian electricity comes from fossil fuels.
Turning gas into heat is very efficient. Turning gas into electricity and then into heat is not. Winter heating with renewables is problematic. You need to meet very strict insulation standards for it to be viable.
Electricity generation in Russia is about two thirds gas and coal.
There’s the fascinating example of “Nooshare”, which is an interesting proposal for embedding arbitrary Monte-Carlo simulations as the proof challenge!
http://web.mit.edu/alex_c/www/nooshare.pdf
It’s an elegant exploitation of the design reasons why the work must involve something like random search (for an easy to validate target).
On squinting, it’s kinda like a smart contract for a compute job, where the compute job itself constitutes proof of work to validate the settlement of the contract!
It’s an elegant exploitation of the design reasons why the work must involve something like random search (for an easy to validate target).
On squinting, it’s kinda like a smart contract for a compute job, where the compute job itself constitutes proof of work to validate the settlement of the contract!
This was written in 2012. It does not appear that this idea went anywhere - not sure why.
It could be the fact that it's not trivially easy to verify the work completed, unlike a hash.
It could be the fact that it's not trivially easy to verify the work completed, unlike a hash.
If it's useful, it's less costly. If it's less costly, it is less secure.
This. Bitcoin only remains secure if the amount of electricity being wasted scales with the price. (Otherwise, the payout for double spending would exceed the cost.) For it to actually be a viable store of value at global levels, it would require burning orders of magnitude more electricity than is currently even produced in a year. It mainly appeals to the kind of people who self-identify as being good at math, but who are actually too dumb to do basic arithmetic.
Costly doesn't mean that it has to waste actual resources. The chance of winning a block could be made to be proportional to the amount of bitcoin deposited into some smart contract, instead of proportional to the amount of electricity wasted. The outcome would be exactly the same, and nothing would be wasted.
From my short life as a tech guy, I have already realized that there is no 100% secure system. Companies try to hide information and avoid leakages; complicated systems of governance try to avoid malpractices while minimizing bad actors. In the end, it is always a dance between attackers and defenders. Bitcoin has the dumbest way of protecting itself from attackers. But by being the dumbest way, it is also the most predictable. It is like instead of coming up with sophisticated methods of protection that no one knows its weaknesses on the long run, Bitcoin only focuses on building a bigger wall. And that's why I feel more confident.
Sounds like you just reinvented Ethereum proof of stake :)
very good point - the entire reason for PoW is to "waste" something to prove you're invested in the ecosystem. If you can do useful things with that work, you're not really proving you're invested in BTC, but you may just be invested in whatever that useful side-effect is
A relevant answer from last year by @schoen (upon which I stumbled recently): https://news.ycombinator.com/item?id=22495700
Thanks for your enthusiasm for my answer. :-)
The arbitrarily parameterized instances part is really important. In Bitcoin this is done by feeding prior blocks as input into the hash and then getting the hash to match the adjustable difficulty value, so you can generate new problems automatically based on the history.
The Stack Exchange answer that someone linked to here mentions this issue by saying that, if you just had a generic and deterministic useful problem, people could precompute solutions to relevant instances of it, which would amount to premining on the blockchain.
The "doing work to verify transactions" aspect comes in when you can make the problem instances actually encode a specific version of history. It's not obvious how to do that where each and every instance would be of intrinsic interest or value to someone.
Maybe there's some kind of physical simulation where this could be the case (like, each individual hash represents a particular randomly chosen chemical from a very, very large family of chemicals whose properties are being explored by simulation in some way, or something), but I'm still not sure how you could then make a successful result be easier for other people to verify without repeating the same amount of work. (I'm not familiar with a technique for proving, in an easily-checkable way, that the result of a complex physical simulation was such-and-such.)
The arbitrarily parameterized instances part is really important. In Bitcoin this is done by feeding prior blocks as input into the hash and then getting the hash to match the adjustable difficulty value, so you can generate new problems automatically based on the history.
The Stack Exchange answer that someone linked to here mentions this issue by saying that, if you just had a generic and deterministic useful problem, people could precompute solutions to relevant instances of it, which would amount to premining on the blockchain.
The "doing work to verify transactions" aspect comes in when you can make the problem instances actually encode a specific version of history. It's not obvious how to do that where each and every instance would be of intrinsic interest or value to someone.
Maybe there's some kind of physical simulation where this could be the case (like, each individual hash represents a particular randomly chosen chemical from a very, very large family of chemicals whose properties are being explored by simulation in some way, or something), but I'm still not sure how you could then make a successful result be easier for other people to verify without repeating the same amount of work. (I'm not familiar with a technique for proving, in an easily-checkable way, that the result of a complex physical simulation was such-and-such.)
I was disappointed to not see any mentions of Gridcoin in the Proof of Stake section. It rewards people for their contributions to certain BOINC projects. There definitely is a range of "usefulness" to the projects supported. There are computations like distributed protein folding (Rosetta@Home) all the way to analysis of Minecraft phenomenon (Minecraft@Home). While the Minecraft makes for some very entertaining YouTube videos, the electricity used would probably be better spent on other projects. However, it is still a significant improvement over the computation for Bitcoin.
https://gridcoin.us/ https://gridcoin.us/guides/whitelist.htm
https://gridcoin.us/ https://gridcoin.us/guides/whitelist.htm
Gridcoin's apparent decentralization is much less than a system that uses mining rewards because it uses a committee to maintain a list of projects that can simply assert that people have done relevant work in order to receive rewards.
https://gridcoin.us/guides/whitelist.htm
I haven't totally gamed it out but I think the committee could break Gridcoin by means such as refusing to approve any projects, or approving only "captive" BOINC projects that agree to distribute rewards the way the committee wants. Alternatively, BOINC itself could get shut down, or all of the currently-approved projects could have their credentials taken over by someone else and start issuing rewards in a sketchy way.
As I understand it, Gridcoin basically has an identified group of oracles who together appoint and unappoint other oracles who are empowered to issue rewards. While this is clever, it's not very decentralized or permissionless.
(Maybe I should pick on BOINC itself even more than the committee as the "authority" here, since I think BOINC's infrastructure is directly used by the whitelisted projects to assign tasks and announce rewards for completing them. So BOINC is really in a position to tamper with every part of the reward process.)
https://gridcoin.us/guides/whitelist.htm
I haven't totally gamed it out but I think the committee could break Gridcoin by means such as refusing to approve any projects, or approving only "captive" BOINC projects that agree to distribute rewards the way the committee wants. Alternatively, BOINC itself could get shut down, or all of the currently-approved projects could have their credentials taken over by someone else and start issuing rewards in a sketchy way.
As I understand it, Gridcoin basically has an identified group of oracles who together appoint and unappoint other oracles who are empowered to issue rewards. While this is clever, it's not very decentralized or permissionless.
(Maybe I should pick on BOINC itself even more than the committee as the "authority" here, since I think BOINC's infrastructure is directly used by the whitelisted projects to assign tasks and announce rewards for completing them. So BOINC is really in a position to tamper with every part of the reward process.)
I worked 10 years for a Bank. A lot of the mainframe batch processing were unnecessary. A lot of the mainframes running Cobol could be replaced by some smaller hardware and code written in java and C. There are a lot of people working around bad written system or bad written laws/rules, to make the things work. My point is: Wouldn't be fair to compare the amount energy to run bitcoin vs the amount of energy to run the banking system?
Yes, it would be fair. However, it is not a comparison that Bitcoin even comes close to winning (Bitcoin uses orders of magnitude more energy), so you instead see takes like "you forgot to account for the energy cost of aircraft carriers!" to try to make the comparison more favorable to Bitcoin.
no, but for sure you have to take in account the amount of buildings, air-conditioning, commuters, datacenters, branches, ATMs, bad written code, exchanges. Beside that, Bitcoin probably after the 21 million were mined, should drop the energy consumption (ok, ok, it will take almost 100 years to happen), but it means that in long term, bitcoin will be consuming much less energy than now. Probably impossible to compare apples x apples in that case, but we should at least try it.
> but for sure you have to take in account the amount of buildings, air-conditioning, commuters, datacenters, branches, ATMs, bad written code, exchanges.
You also have to do the same thing for Bitcoin if you want the comparison to remain fair. Bitcoin doesn't magically replace the entire financial industry, so you don't want to accidentally include the costs of the things it doesn't replace (such as the bank manager who's deciding whether or not to authorize a mortgage).
You also have to do the same thing for Bitcoin if you want the comparison to remain fair. Bitcoin doesn't magically replace the entire financial industry, so you don't want to accidentally include the costs of the things it doesn't replace (such as the bank manager who's deciding whether or not to authorize a mortgage).
you are right, but this reduction like "bitcoin is useless because it uses more energy than $COUNTRY/$CITY" is IMO just click bait.
https://cbeci.org/cbeci/comparisons/
BTC uses more annual energy than the Netherlands. What did it accomplish when compared to the economic output of the Netherlands?
BTC uses more annual energy than the Netherlands. What did it accomplish when compared to the economic output of the Netherlands?
> Wouldn't be fair to compare the amount energy to run bitcoin vs the amount of energy to run the banking system?
Hasn't this comparison been made over and over, and every time it comes out in favor of traditional banking by a mile?
Hasn't this comparison been made over and over, and every time it comes out in favor of traditional banking by a mile?
could you provide any link or resource for further reading? I never saw anything like that and I would like to know what they are taking into account in this comparison.
"One Bitcoin transaction would generate the CO2 equivalent to 706,765 swipes of a Visa credit card, according to Digiconomist’s closely-followed index, albeit with none of the convenience of plastic."
https://www.bloomberg.com/opinion/articles/2021-01-26/is-bit...
https://www.bloomberg.com/opinion/articles/2021-01-26/is-bit...
Thank you for the link, but thats not the same thing. Try to transfer heavy money from Venezuela to Japan, being in Venezuela or from Ghana to Germany, being in Ghana, using your Visa credit card. Try to do it under 24 hours. The fastest way will be flying which can be easily more expensive and risky than bitcoin.
Visa doesn't use flights to transfer money so you aren't talking about the same thing.
Other cryptocurrencies that use less energy can be used to transfer money to Venezuela so Bitcoin still loses against other cryptocurrencies for fringe use cases.
Other cryptocurrencies that use less energy can be used to transfer money to Venezuela so Bitcoin still loses against other cryptocurrencies for fringe use cases.
You have to consider that Bitcoin offers nothing beyond a ledger/a bar tab. It doesn't do lending, which is the core business of banks. Sure ETH has some smart contracts do that do lending but we are talking about Bitcoin. If Bitcoin could only grow up like his little brother nobody would complain.
Not quite a fair comparison. Consider how much real estate is used to "park money" in large cities, which in turn leads to artificially higher prices and shortages of housing? What other resources are abused as money substitutes, making corresponding markets less liquid or less predictable? When Bitcoin reaches sufficient capitalization and maturity the landscape of money is going to become simpler while the markets in stocks/real estate/commodities become more fair and efficient. This may have huge implications for overall efficiency in the economies.
[deleted]
>This approach is called Proof-of-Work and involves miners taking transaction data and feeding it into a cryptographic algorithm that generates a string of numbers called a hash.
There is more to Proof-Of-Work than just hashing [1].
[1] https://cryptorials.io/beyond-hashcash-proof-work-theres-min...
There is more to Proof-Of-Work than just hashing [1].
[1] https://cryptorials.io/beyond-hashcash-proof-work-theres-min...
I think this question is important to whatever emerges as the “survivor” blockchain that emerges out of this as the one we all use (like the internet companies that survived past all the garbage of 99/2000 before the pop).
People need to compute things asynchronously. And they are probably willing to pay. Being able to distribute those out as part of the the mining/validation process would make the energy less “wasted.”
I’m not sure why the grid computing schemes of the 00s didn’t pan out, I suspect aws was just simpler and cheaper than trying to assemble networks of nodes using Globus or whatever.
People need to compute things asynchronously. And they are probably willing to pay. Being able to distribute those out as part of the the mining/validation process would make the energy less “wasted.”
I’m not sure why the grid computing schemes of the 00s didn’t pan out, I suspect aws was just simpler and cheaper than trying to assemble networks of nodes using Globus or whatever.
It'd be interesting if the proof of work computing at the heart of Bitcoin would do something similar to projects like SETI [0] or Folding@home [1] protein folding project that requires distributed computing.
[0] https://setiathome.berkeley.edu/
[1] https://en.wikipedia.org/wiki/Folding@home
[0] https://setiathome.berkeley.edu/
[1] https://en.wikipedia.org/wiki/Folding@home
They can't be used for proof of work.
Hashing for say, Bitcoin, works because you're finding a hash that has certain properties (e.g., having a certain number of leading zeroes). Anyone can take the input (to the hash function) you've found and trivially test that it does indeed produce a hash with those properties. Finding the hash is hard, but testing the hash is easy.
Doing SETI/Folding work doesn't work like that. Consider Folding: every unit of work produces useful output. Every input produces equally valuable output. Additionally, the cost of producing the output is high, but the cost of verifying that output is also high.
With hashing-based PoW, everyone in the network can verify that a hash with the correct properties was produced. There's no way to say "yes, this one Folding@home worker found something unique". The work needs to be checked, which means a majority of nodes in the network need to verify the output, which means >50% of the network needs to compute the same thing again (you can't rely on less than a majority, or anyone could cheat).
Hashing for say, Bitcoin, works because you're finding a hash that has certain properties (e.g., having a certain number of leading zeroes). Anyone can take the input (to the hash function) you've found and trivially test that it does indeed produce a hash with those properties. Finding the hash is hard, but testing the hash is easy.
Doing SETI/Folding work doesn't work like that. Consider Folding: every unit of work produces useful output. Every input produces equally valuable output. Additionally, the cost of producing the output is high, but the cost of verifying that output is also high.
With hashing-based PoW, everyone in the network can verify that a hash with the correct properties was produced. There's no way to say "yes, this one Folding@home worker found something unique". The work needs to be checked, which means a majority of nodes in the network need to verify the output, which means >50% of the network needs to compute the same thing again (you can't rely on less than a majority, or anyone could cheat).
Take SETI for example. If you find an earth like planetoid in a very precise region of sky which takes a long time to sift through pictures of the sky to find then you can just give the coordinates of that point for other nodes to verify. This could be the PoW algorithm.
That's problematic, though. You have a fixed computational difficulty (difficulty can't be scaled up or down).
Bitcoin is an extremely inefficient computing platform. There's no silver lining to BTC, it's simply a moderately big, potentially huge mistake in the history of modern technology.
Decentralized projects will always be less efficient than centralized ones why are we suddenly so surprised?
The value of decentralized system far outweighs the cost of maintaining it especially when it comes to money. Could bitcoin be more efficient? Absolutely, but to call it big mistake of modern technology is just silly.
The value of decentralized system far outweighs the cost of maintaining it especially when it comes to money. Could bitcoin be more efficient? Absolutely, but to call it big mistake of modern technology is just silly.
The fact that most users choose to use centralised exchanges over on-chain transactions suggests the advantages of decentralisation do not outweigh the costs in the opinion of a great majority.
We started having decent decentralized exchanges fairly recently and there have already been days where they have processed more volume than centralized ones.
It takes time to build/deploy/grow these exchanges (since they are essentially a 2 sided marketplace).
It takes time to build/deploy/grow these exchanges (since they are essentially a 2 sided marketplace).
Don't get me wrong, I'm not surprised about it. The history of computing is full of inefficient, dodgy systems.
Inefficient compared with what? Gold requires a ton more energy. As does the existing banking system.
Bitcoin uses less electricity than Christmas lights and provides a completely electric, transparent, uncensorable currency.
Bitcoin uses less electricity than Christmas lights and provides a completely electric, transparent, uncensorable currency.
> Bitcoin uses less electricity than Christmas lights
You could power Christmas lights for several Christmas if not a lifetime with the electricity used in a BTC transaction. Let that sink in.
You could power Christmas lights for several Christmas if not a lifetime with the electricity used in a BTC transaction. Let that sink in.
Your facts are wrong. The global, yearly energy use of Christmas lights is ~2x Bitcoin's energy use.
People way overestimate how much energy Bitcoin uses and way underestimate how much simple things like christmas lights, video games, hockey rinks, etc. use.
People way overestimate how much energy Bitcoin uses and way underestimate how much simple things like christmas lights, video games, hockey rinks, etc. use.
That means that Christmas lights are more popular than BTC. A BTC transaction consumes as much power as the average household in more than 3 weeks. If there were as many BTC users as Christmas lights users, the consequences wouldn't be pretty.
How so?
Mining rate and therefore energy costs are based on the blockchain mining parameters, not the number of users. If there were a ton more users, you'd likely see more transactions on the Lightning network, with Lightning nodes settling out on the main Bitcoin blockchain, but it wouldn't impact energy use substantially.
About the only thing that impacts energy use at this point is the price. One can reasonably estimate that, steady state, the value of the energy used is roughly equal to the total block rewards.
Mining rate and therefore energy costs are based on the blockchain mining parameters, not the number of users. If there were a ton more users, you'd likely see more transactions on the Lightning network, with Lightning nodes settling out on the main Bitcoin blockchain, but it wouldn't impact energy use substantially.
About the only thing that impacts energy use at this point is the price. One can reasonably estimate that, steady state, the value of the energy used is roughly equal to the total block rewards.
> If there were as many BTC users as Christmas lights users, the consequences wouldn't be pretty.
Bitcoin doesn't work that way. Energy usage doesn't scale anywhere near linear with the number of users.
Think of it this way: the Bitcoin network is buying security, not transactions, from miners.
Bitcoin doesn't work that way. Energy usage doesn't scale anywhere near linear with the number of users.
Think of it this way: the Bitcoin network is buying security, not transactions, from miners.
Gold is an chemical element very useful properties.
As for the banking system, Bitcoin is part of it now. Banks offer cryptocurrency-backed accounts, and if it becomes big, you will probably get all the stuff that banking does like loans, escrow services and fast, reversible transactions. There will be regulations and I guess a fractional reserve system will follow.
And how is it uncensorable? All it takes for a state to censor it is to declare it illegal with harsh sentences for those who get caught and embargoes on countries that don't play along.
As for Christmas lights, I think you are way off. Care to share the numbers.
As for the banking system, Bitcoin is part of it now. Banks offer cryptocurrency-backed accounts, and if it becomes big, you will probably get all the stuff that banking does like loans, escrow services and fast, reversible transactions. There will be regulations and I guess a fractional reserve system will follow.
And how is it uncensorable? All it takes for a state to censor it is to declare it illegal with harsh sentences for those who get caught and embargoes on countries that don't play along.
As for Christmas lights, I think you are way off. Care to share the numbers.
What other currency are people fanatic about HODL'ing? It's not a currency.
What other currencies or monetary goods are being developed and realized in real-time?
If gold was invented today, what would it look like, and how would it function?
If gold was invented today, what would it look like, and how would it function?
You don't go your shop with gold bars either. You store them in your bank account and use 2nd-layer currency (fiat used to be tied to gold). Same way you store bitcoin and use 2nd-layer currencies like lightning-network.
I'm not saying it works particularly well yet but the idea is sound.
I'm not saying it works particularly well yet but the idea is sound.
>Bitcoin uses less electricity than Christmas lights and provides a completely electric, transparent, uncensorable currency.
But there are literally thousands of those!
But there are literally thousands of those!
Then why did Elon Musk buy 1.5 billion dollars of it?
To sell if for 2 Billion after the jump in price? Or to drop the price and annoy some people? I mean he openly manipulated the price and exited pretty fast. Now it's even lower than before. Longterm he probably made more harm than good.
Don’t confuse being rich with being ethical or wise. (This is a kind of appeal to authority, too)
Are all of these institutional investors:
https://www.forbes.com/sites/michaeldelcastillo/2020/08/06/v...
(of which the top 3 already account for more BTC than Elon) also unwise?
https://www.forbes.com/sites/michaeldelcastillo/2020/08/06/v...
(of which the top 3 already account for more BTC than Elon) also unwise?
the argument went from
BTC is inefficient (OP) to
why did Elon buy (you) to
understanding the difference between rich and ethical (last comment) to
rich investors being wise or not (you again)
To make it short: Just because Elon or rich investors buy doesn't mean they are unwise (for themselves) just that it's bad for the world (ecologically), so basically both can be true. Just the difference between thinking about themselves and thinking about other people as well...
BTC is inefficient (OP) to
why did Elon buy (you) to
understanding the difference between rich and ethical (last comment) to
rich investors being wise or not (you again)
To make it short: Just because Elon or rich investors buy doesn't mean they are unwise (for themselves) just that it's bad for the world (ecologically), so basically both can be true. Just the difference between thinking about themselves and thinking about other people as well...
Considering the 2008 housing crisis....yes?
I could name a few things I admire about Elon Musk, investing in BTC is not one of them.
Isn't that the entire point of Ethereum and some others?
Ethereum's current energy intensive Proof of Work is not used to run the smart contracts. It just secures the blockchain, same as Bitcoin. The smart contract execution power requirements are basically non-existant compared to that.
Not necessarily. The current verification algorithm doesn't have any useful side effects other than verifying that some amount of computing happened. That will even be true for whatever computation happens as part of proof of stake when it gets rolled out. In other words, and in either case, the only real effect of the computation that happens as part of the verification algorithm is the verification itself.
Edit: There's no reason to downvote OP's post, folks. It's a good question that some people may not know the answer to.
Edit: There's no reason to downvote OP's post, folks. It's a good question that some people may not know the answer to.
Am I correct to assume that this is Bargaining stage of grief?
"Don't be snarky."
"Please don't post shallow dismissals, especially of other people's work. A good critical comment teaches us something."
https://news.ycombinator.com/newsguidelines.html
"Please don't post shallow dismissals, especially of other people's work. A good critical comment teaches us something."
https://news.ycombinator.com/newsguidelines.html
I actually do hugely appreciate and am amazed by technical side of Bitcoin.
Yet what Bitcoin became as a whole appalls me.
e.g. one can be amazed by nuclear physics yet dislike nuclear weapons. Or appreciate chemistry by hate meth cooks.
e.g. one can be amazed by nuclear physics yet dislike nuclear weapons. Or appreciate chemistry by hate meth cooks.
Sirer is either disingenuous or quoted entirely out of context. I'm leaning more towards the latter.
This reads more like a shallow shill-piece for the people in the article. It's odd to see it at IEEE.
None of the presented angles would work for something like Bitcoin. Without another native currency, how do you assign value or determine usefulness of, say, models? No matter how you slice it, if you're going to make it into a viable PoW-replacement you will need some kind of fundamental theoretical breakthrough that none of these have. TEEs are definitely not it. The status quo is otherwise that it is an intractable proposal (which other commentors have covered already)
I have a feeling that the author doesn't fully understand what they're writing about and are acting as a useful idiot so some guys can get free PR.
This reads more like a shallow shill-piece for the people in the article. It's odd to see it at IEEE.
None of the presented angles would work for something like Bitcoin. Without another native currency, how do you assign value or determine usefulness of, say, models? No matter how you slice it, if you're going to make it into a viable PoW-replacement you will need some kind of fundamental theoretical breakthrough that none of these have. TEEs are definitely not it. The status quo is otherwise that it is an intractable proposal (which other commentors have covered already)
I have a feeling that the author doesn't fully understand what they're writing about and are acting as a useful idiot so some guys can get free PR.
Who is grieving and what are they grieving about?
The idea that blockchain will change the world.
Every week, every month, every year, crypto is alleged to be dead and dying. And still the adoption, usage, and price goes up.
It gets hyped, it falters, people stop talking for a while, and the cycle repeats itself.
It gets hyped, it falters, people stop talking for a while, and the cycle repeats itself.
Sounds like a classic hype cycle to me, however without the stabilization of effective large scale adoption.
[deleted]
Yes, you can say the same thing about any ponzi scheme, until it finally crashes.
So blockchains aren't fundamentally decentralized, permissionless, censorship resistant networks, and you've found a secret issue that will cause an unraveling of the protocol?
If not, then maybe just step back and observe the chain grow block by block, day by day, unfettered, for the rest of your life.
If not, then maybe just step back and observe the chain grow block by block, day by day, unfettered, for the rest of your life.
Blockchain != cryptocurrencies
32,510.30 USD/BTC
2008 - 0.00 USD/BTC
Come now, you are just bargaining. Just move on and get to the final stage of acceptance and hope.
What am I bargaining about again? I trade bitcoin options + the volatility has been great for my own positions. ¯\_(ツ)_/¯
Did you buy the top or something?
Did you buy the top or something?
Not necessarily. I've wondered the same thing for years while never holding any.
FWIW there's a lot of half baked arguments going around the space, so a few comments for anyone genuinely interested in evaluating facts:
- The usage of electricity in Bitcoin is a feature not a bug. It's designed to use the most democratic and ubiquitous commodity avalible. Any nation/individual can evaluate their electrical opportunity cost and at any point make the decision to dedicate resources to towards re-balancing the network without permission. This is not possible with proof of stake.
- We produce about 160,000 TWh of power, ~50,000 TWh is wasted due to inefficiencies. Bitcoin using 120 TWh (0.25% of wasted power)
- A lot of Power projects get scraped due to inconsistencies in demand. Random Ex: Texas power outages during summer peak AC usage. It's infeasible to spin up and spin down extra generators to meet spikes in demand. #Bitcoin fixes this by providing excess supply a discounted demand during normal hours that can be routed away during peak needs else where. Ditto for renewables.
- Bonus: SHA-256 did not get broken this week.
- The usage of electricity in Bitcoin is a feature not a bug. It's designed to use the most democratic and ubiquitous commodity avalible. Any nation/individual can evaluate their electrical opportunity cost and at any point make the decision to dedicate resources to towards re-balancing the network without permission. This is not possible with proof of stake.
- We produce about 160,000 TWh of power, ~50,000 TWh is wasted due to inefficiencies. Bitcoin using 120 TWh (0.25% of wasted power)
- A lot of Power projects get scraped due to inconsistencies in demand. Random Ex: Texas power outages during summer peak AC usage. It's infeasible to spin up and spin down extra generators to meet spikes in demand. #Bitcoin fixes this by providing excess supply a discounted demand during normal hours that can be routed away during peak needs else where. Ditto for renewables.
- Bonus: SHA-256 did not get broken this week.
> It's designed to use the most democratic and ubiquitous commodity avalible.
Which is why Bitcoin mining is only feasible in the areas that have the lowest electricity rate?
> We produce about 160,000 TWh of power, ~50,000 TWh is wasted due to inefficiencies. Bitcoin using 120 TWh (0.25% of wasted power)
How much of those inefficiencies are caused by Bitcoin? My understanding is that a substantial fraction of that inefficiency is things like "there's power loss in running power from a power plant 100s of miles away" or "converting from AC to DC power induces power loss." In other words, Bitcoin isn't converting electrical waste into useful work, it's just creating more electrical waste on top of the power it directly uses.
> A lot of Power projects get scraped due to inconsistencies in demand. Random Ex: Texas power outages during summer peak AC usage. It's infeasible to spin up and spin down extra generators to meet spikes in demand. #Bitcoin fixes this by providing excess supply a discounted demand during normal hours that can be routed away during peak needs else where. Ditto for renewables.
Are you aware that the electrical grid already manages demand in large part by telling the smelters to stop smelting for a few hours? There's no need to invent new demand to manage existing demand.
Which is why Bitcoin mining is only feasible in the areas that have the lowest electricity rate?
> We produce about 160,000 TWh of power, ~50,000 TWh is wasted due to inefficiencies. Bitcoin using 120 TWh (0.25% of wasted power)
How much of those inefficiencies are caused by Bitcoin? My understanding is that a substantial fraction of that inefficiency is things like "there's power loss in running power from a power plant 100s of miles away" or "converting from AC to DC power induces power loss." In other words, Bitcoin isn't converting electrical waste into useful work, it's just creating more electrical waste on top of the power it directly uses.
> A lot of Power projects get scraped due to inconsistencies in demand. Random Ex: Texas power outages during summer peak AC usage. It's infeasible to spin up and spin down extra generators to meet spikes in demand. #Bitcoin fixes this by providing excess supply a discounted demand during normal hours that can be routed away during peak needs else where. Ditto for renewables.
Are you aware that the electrical grid already manages demand in large part by telling the smelters to stop smelting for a few hours? There's no need to invent new demand to manage existing demand.
> Which is why Bitcoin mining is only feasible in the areas that have the lowest electricity rate?
Nope, not where Electricity is cheapest, but where it's opportunity cost is lowest. In developed nations with a stable currency this might be high, in others that don't have the privilege of printing the world's reserve to bail out bad decisions, different story. And that's what the market is reflecting.
>My understanding is that a substantial fraction of that inefficiency is things like "there's power loss in running power from a power plant 100s of miles away" or "converting from AC to DC power induces power loss
Precisely, most Bitcoin mines are remotely located right next to the power plants, partially for this reason.
> There's no need to invent new demand to manage existing demand.
No you need demand to bring excess supply.
Nope, not where Electricity is cheapest, but where it's opportunity cost is lowest. In developed nations with a stable currency this might be high, in others that don't have the privilege of printing the world's reserve to bail out bad decisions, different story. And that's what the market is reflecting.
>My understanding is that a substantial fraction of that inefficiency is things like "there's power loss in running power from a power plant 100s of miles away" or "converting from AC to DC power induces power loss
Precisely, most Bitcoin mines are remotely located right next to the power plants, partially for this reason.
> There's no need to invent new demand to manage existing demand.
No you need demand to bring excess supply.
The biggest trouble here is that pollution externalities of power generation are very commonly not priced into the cost of electricity, so generic incentives to consume energy also very commonly mean incentives to pollute more.
> Random Ex: Texas power outages during summer peak AC usage. It's infeasible to spin up and spin down extra generators to meet spikes in demand. #Bitcoin fixes this by providing excess supply a discounted demand during normal hours that can be routed away during peak needs else where. Ditto for renewables.
Could be, but are the price signals really in place to make this out work in practice in many places? How many electric utilities have so far succeeded in charging people more at all during peak demand times? (maybe other than electric customers they've identified as industrial)
Edit: To be clear, I agree that there is such a thing as surplus power generation and usefully smoothing out demand, I just don't agree that we're in a scenario where cryptocurrency mining is predominantly used or predominantly incentivized to be used that way.
> Random Ex: Texas power outages during summer peak AC usage. It's infeasible to spin up and spin down extra generators to meet spikes in demand. #Bitcoin fixes this by providing excess supply a discounted demand during normal hours that can be routed away during peak needs else where. Ditto for renewables.
Could be, but are the price signals really in place to make this out work in practice in many places? How many electric utilities have so far succeeded in charging people more at all during peak demand times? (maybe other than electric customers they've identified as industrial)
Edit: To be clear, I agree that there is such a thing as surplus power generation and usefully smoothing out demand, I just don't agree that we're in a scenario where cryptocurrency mining is predominantly used or predominantly incentivized to be used that way.
> The biggest trouble here is that pollution externalities of power generation are very commonly not priced into the cost of electricity, so generic incentives to consume energy also very commonly mean incentives to pollute more.
This is true and is a function of context and locale. That's the point. Opportunity cost.
This is true and is a function of context and locale. That's the point. Opportunity cost.
How low does the energy price have to be that someone could currently expect to profitably mine Bitcoin on commodity hardware? (I read "without permission" that one cannot expect to have specialized hardware available as import of mining rigs could be regulated).
It's a question of opportunity cost of electricity, not absolute numbers:
- You live in a place where the "cost" of mining = Electricity + Amortized cost of mining rig.
- Someone else lives in a place where "cost" of mining = (Electricity + Amortized Blackmarket Rig Cost) - (5% Inflation per month - 30% reduction in remittance fee -etc..)
- You live in a place where the "cost" of mining = Electricity + Amortized cost of mining rig.
- Someone else lives in a place where "cost" of mining = (Electricity + Amortized Blackmarket Rig Cost) - (5% Inflation per month - 30% reduction in remittance fee -etc..)
The solution for the excess supply issue is energy storage, not mining bitcoin. I've worked in clean energy for years, and no energy expert is advocating digital currency mining + increased energy production as a method for meeting demand peaks.
- While storage is part of the infrastructure, it not the solution -> Not feasible for a large set of energy sources and often falls to the same pitfalls of bringing new power online (remoteness, capacity, etc..).
- Actually Bitcoin mining is being adopted by renewable providers as very good solution to offset intermittence and wasted excess.
- Further something like Natural gas flaring is something that cannot be stored but can largely routed through mining setups. Which is being adopted at scale.
- Actually Bitcoin mining is being adopted by renewable providers as very good solution to offset intermittence and wasted excess.
- Further something like Natural gas flaring is something that cannot be stored but can largely routed through mining setups. Which is being adopted at scale.
Setting aside the advantages of Proof-of-Stake in terms of energy consumption, and setting aside the "green energy buyer of last resort" argument that the BTC maximalists often say, and setting aside the theoretical requirements for a valid PoW function, I do think it's tricky to argue which computing is inherently "valuable" or "not valuable".
There is this intuition that guessing a bunch of random numbers doesn't contribute high-leverage information or "work" to society. That there are a bunch of "information processing" tasks that have more inherent value.
But consider SETI@home - is decoding massive amounts of space noise valuable if nothing ever comes of it? Is the computation wasted?
Consider Folding@home - there are now far superior algorithms like AlfaFold that take far less compute. Is the computation wasted?
Consider all the matrices being multiplied on gigantic neural networks. Some of the resulting models will be enormously valuable to society. Most of it will be dead-on-arrival experiments - simply wasted compute. Even worse, the leverage can go the other way - a ML model can cause far more harm than the energy footprint used to train it.
One of the nice properties of the BTC PoW function is that you can be sure that your hash finding algorithm is probably not that sub-optimal.
There is this intuition that guessing a bunch of random numbers doesn't contribute high-leverage information or "work" to society. That there are a bunch of "information processing" tasks that have more inherent value.
But consider SETI@home - is decoding massive amounts of space noise valuable if nothing ever comes of it? Is the computation wasted?
Consider Folding@home - there are now far superior algorithms like AlfaFold that take far less compute. Is the computation wasted?
Consider all the matrices being multiplied on gigantic neural networks. Some of the resulting models will be enormously valuable to society. Most of it will be dead-on-arrival experiments - simply wasted compute. Even worse, the leverage can go the other way - a ML model can cause far more harm than the energy footprint used to train it.
One of the nice properties of the BTC PoW function is that you can be sure that your hash finding algorithm is probably not that sub-optimal.
The PoW algorithm needs to effectively pick winners more or less at random, with a consistent number of winners (and gaps between), and the results be self-evidently correct. There are few problems which fit those criteria and are useful...
I prefer to spend resources on something of debatable value (look for aliens), rather than on something that it is indisputably of no value to humanity (proof of tedious work).
No, it's not "tricky" to argue which computing is inherently "valuable" or "not valuable" when the examples are research that will benefit for all mankind, and PoW is so incredibly wasteful for the benefit enriching so few. Even those NN are no where near as wasteful for the benefit of having pre-trained weights anyone can use and build on forever.
We need to stop thinking that tech inherently neutral and without moral or ethical implications when there are clear benefactors and externalities.
We need to stop thinking that tech inherently neutral and without moral or ethical implications when there are clear benefactors and externalities.