
Delaying the Inevitable: Muir Glacier and the Ethereum Difficulty Bomb - cottenio
https://blog.cotten.io/delaying-the-inevitable-muir-glacier-83331fed44e2
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derefr
> Why? Because Ethereum isn’t just a store-of-value. The Ethereum network also
> contains smart contracts that execute native code on the blockchain.

It's funny when things are presented this way. Ethereum was never intended to
be a store of value. It's a distributed computer that needs its own token
economy in order to charge "hosting costs" to the computational agents running
on it, and to allow those agents to trade work done for other agents for
transfer of "hosting costs."

Ethereum would still be doing what it's designed to do, even if the price of
ETH tanked. (In fact, dapp developers would probably _prefer_ ETH to tank,
since that'd mean transactions would be cheaper and less crowded by
speculative traders and selfish miners.)

~~~
grubles
The other funny thing is the common misconception that Bitcoin does not have
smart contracts. Bitcoin transactions are actually pretty programmable. You
can have a coin be unspendable until a certain date, or have it require n
cosigners to be spent, or have it become spendable only once a secret is
revealed which matches a hash.

Bitcoin most definitely has smart contracts.

~~~
saurik
This is true in the same sense that grep is extremely programmable, but
comparing grep to C would be strange indeed. Ethereum is a Turing complete VM,
allowing you to build extremely complex systems (we, for example, are trying
to build a more transparent and distributed directory for a Tor-like service),
while Bitcoin lets you sort of control transactions a bit with what amount to
something closer to "rules" than "programs" (due to the explicit lack of
looping control structure).

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arcticbull
> A vibrant ecosystem of banking functions, asset management, trading
> exchanges, and more have sprung from this, requiring Ethereum to quickly
> respond to external events and triggers.

That's a bit of a stretch isn't it? Other than speculation and money
laundering, I don't think any dapps have gained any traction at all, let alone
a vibrant ecosystem.

~~~
flarex
Decentralised Finance (Defi) apps are starting to gain traction on Ethereum.
Theres about half a billion in funds currently making use of them.
[https://defipulse.com](https://defipulse.com)

~~~
arcticbull
Even those are mostly exchanges (speculation), derivatives (extra speculation)
and stable coins (to enable speculation on exchanges which want to avoid AML
and KYC in the facilitation of money laundering).

~~~
woah
We use the stablecoin Dai for althea.net. There are several networks running
providing internet to people with wireless mesh nodes that pay each other with
Dai.

~~~
mirekrusin
Sounds like pied piper.

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scribu
As an outsider to the blockchain world, I would be more interested to know why
proof-of-stake is not used by Ethereum yet.

Found one article on the subject: [https://medium.com/ibbc-io/the-beautiful-
complexity-of-pos-3...](https://medium.com/ibbc-io/the-beautiful-complexity-
of-pos-338cfc340eaa)

~~~
robcohen
Because it's hard. Also technical debt moving from Eth 1 to 2 makes it harder.

My guess is another blockchain will execute PoS better because it won't have
tech debt.

~~~
exdsq
Cardano is PoS and released its testnet last month.

Tezos is another.

~~~
haasted
Cosmos is PoS and released its mainnet in March.

~~~
leppr
A Proof of Stake consensus for a public blockchain like Ethereum has different
requirements and is substantially harder to execute than for a permissioned
network.

~~~
haasted
Definitely agree, although it’s important to clarify that Cosmos is not
permissioned. Anyone can start a validator and join the validating set.

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majewsky
> [With PoS, Ethereum would lose] the baggage of wasting the electricity of a
> small city to keep itself running.

"Small city" sounds suspiciously small. Last time I checked, Bitcoin had the
same electricity consumption as the entire country of Austria. I can believe
that Ethereum has less miners, but by that over 2 magnitudes?

~~~
dcolkitt
I can't comment specifically on the details, but one consideration is that
Ethereum's mining hash is designed to be ASIC resistant.

Bitcoin is entirely mined by dedicated hardware that's incapable of doing
anything other than mining Bitcoin. Ethereum is mostly mined by GPUs that can
obviously be repurposed for other applications if need be.

If the electricity cost for Ethereum mining gets too out of control, the
miners can just point their GPUs at some other task. Whereas Bitcoin miners
are stuck with sunk cost of rapidly depreciating capital, and pretty much will
never turn even during electricity price spikes.

~~~
sp332
But the ASICs are used because they are more efficient. Forcing miners to use
less efficient hardware is going to drive up the average energy per hash
calculated.

~~~
imtringued
You're completely ignoring the difficulty mechanism in Bitcoin. When everyone
has a 1TH/s miner that consumes 1kWh and suddenly a 10TH/s miner that consumes
1kWh comes out everyone is going to switch to the new miner. Because Bitcoin
guarantees that a block is mined every 10 minutes it has to make the
calculation 10x harder than before. The end result? The energy consumption
didn't change.

What makes Bitcoin more energy intensive then? The price of Bitcoin. When the
price of Bitcoin doubles that also means the mining profit doubles. More
miners (= more energy consumption) join the blockchain until the profit margin
is back to the previous level. The price of a Bitcoin is 70x higher than the
price of Ethereum so that suggests that Bitcoin should use 70x more energy.

~~~
nybble41
Basically correct, except that it isn't the _price_ of Bitcoin or Ethereum
that matters, per se, but rather the value of the reward for each block
relative to the amount of time required to mine it. For Bitcoin, ignoring
transaction fees, the rate is 12.5 bitcoins per 10 minutes; for Ethereum it's
3 ETH per 15 seconds. If the price of 1 BTC is 70x the price of 1 ETH then you
would break even expending about 7.3x over a given interval to mine 12.5 BTC
vs. 1x to mine 120 ETH. If you spent 70x, however, you'd soon be bankrupt
despite the higher BTC price, because you don't earn 70x the value.

~~~
im3w1l
So energy usage should drop quite a bit after some difficulty increases?

~~~
nybble41
The difficulty increases or decreases to maintain the target block interval.
The only way that impacts mining revenue is if the actual block interval
deviates significantly from the target—for example, if the hash rate suddenly
increased such that blocks were being solved in five minutes instead of ten,
that would double the revenue rate (and thus the economical power consumption)
temporarily until a difficulty increase brought the interval back to ten
minutes per block.

What does cause significant changes in revenue is the periodic halving of the
block reward. Absent an opposing increase in price and/or transaction fees,
when the reward drops from 12.5 BTC/block to 6.25 BTC/block in May of this
year the energy budget for profitable mining should be cut roughly in half.

~~~
im3w1l
Sorry yeah I was mixing those up. But is it going to use not-obscene amounts
of electricity eventually?

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quotha
A number of blockchains already have proof of stake:

[https://tezos.com/](https://tezos.com/) for one is pretty cool

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starpilot
So Muir Glacier is not mentioned anywhere in the article text.

~~~
cottenio
That is hilarious and I fixed that :P

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some1else
Given that they keep postponing the transition to PoS, wouldn't it be smarter
to remove the artificial difficulty increase and make the network more
efficient?

~~~
DennisP
Fwiw the transition doesn't look that far off now. There's a working multi-
client testnet for the new (separate) proof-of-stake chain, and a recent
proposal by Vitalik to transition the old chain into it more quickly than
previously expected: [https://ethresear.ch/t/alternative-proposal-for-early-
eth1-e...](https://ethresear.ch/t/alternative-proposal-for-early-
eth1-eth2-merge/6666)

