
New Kid on the Blockchain - drcode
http://www.nytimes.com/2016/03/28/business/dealbook/ethereum-a-virtual-currency-enables-transactions-that-rival-bitcoins.html?_r=1
======
joosters
Ethereum becomes useless as soon as it interacts with the real world. Its
brave new world of digital contracts works fine for creating simple gambling
games or 'provably fair' Ponzi schemes, but as soon as a piece of code on the
blockchain has to rely on a real world piece of data, you lose _all_ of the
benefits of the system.

You want to write something related to (say) a share price, or property
ownership? Then your code needs to trust an external system providing the
data, and the users need to trust that other people will honour the 'facts'
decided by your program on the blockchain.

You want to create even a simple system that opens a lock when someone pays
money? (The much-hyped Slock.it startup selling 'smart' locks) The blockchain
makes no promise that a physical lock will operate based on bits in the
blockchain. You have to trust that someone isn't cheating you.

And why is this need for extra trust a problem? Because once you require
trust, you are back into the real world where we already have real solutions
to these Ethereum based problems, that rely on trust (e.g. Share dealing,
property sales, etc). By moving onto the blockchain, you have gained nothing
and only complicated matters.

It's like the IoT: putting a blockchain into an existing system is just as
helpful as wiring your fridge up to the Internet. For anyone getting seriously
involved in Ethereum, sorry for your loss.

~~~
qwtel
If you are sure that the Ethereum project will fail, I'd be happy to take on
bets 1 : infinity. I pay you $1 if the project is no longer around, say 10
years from now, you pay me everything you have otherwise. It would only be
rational for you to take this bet, since I'm offering you a free dollar
according to your beliefs.

EDIT: the intent here was to expose overconfidence and vague predictions, not
pay fan service to ethereum or suggest an actual bet. if anybody is interested
in how to make proper predictions, I recommend the books by Philip Tetlock,
especially the latest called Superforecasting [1].

EDIT2: I wasn't aware my views are so controversial, so here is some more
background: If somebody was convinced something couldn't happen, he'd assign a
probability of 0 to that event. If that person wanted to act according to her
believes, taking on bets, no matter the odds, would have positive expected
utility. Since almost nobody takes on such bets, it suggests that we generally
over-exaggerate when we say things like "impossible" or "sorry for you loss",
hence we are being overconfident. The other is vagueness. By not being clear
about what exactly we are predicting, we're leaving the door open to back out
of it later. In fact, Tetlock has found that, by making vague predictions,
experts could later convince themselves (and others) that they were "close",
skewing their sense of accuracy. Unfortunately, when subject to a prediction
tournament with strict rules, they would score no better than random [2].

[1]: [http://www.amazon.com/Superforecasting-The-Art-Science-
Predi...](http://www.amazon.com/Superforecasting-The-Art-Science-
Prediction/dp/0804136696)

[2]: [http://www.amazon.com/Expert-Political-Judgment-Good-
Know/dp...](http://www.amazon.com/Expert-Political-Judgment-Good-
Know/dp/0691128715)

~~~
mootothemax
>if the project is no longer around

You're offering a nonsensical bet.

We live a world where people often delight in keeping obscure things alive.
Even [http://nyan-coin.org](http://nyan-coin.org) still has a following!

As an illustration of what I mean, I'll be incredibly surprised if bitcoin
ever truly dies, and the price ever truly tanks. I'd expect coins to remain
above $100, as a few people will flat-out refuse to sell for less, and minimal
trading will still take place. Anything in the "real" world though? naaaaah.

~~~
qwtel
Yes, I have to admit it's vague. Price below $1 or not traded at all, would be
a better condition. Maybe add some trade volume requirements as well.

~~~
mootothemax
>Price below $1 or not traded at all

All it'd take is two bored people to stop this from happening, merrily trading
just for their own delight.

As with bitcoin, I'd be really surprised if any of these coins stopped being
used entirely, thanks to tech enthusiasts keeping them alive.

~~~
qwtel
Generally, there has to be some condition on which to judge the success of a
project.

~~~
mootothemax
>Generally, there has to be some condition on which to judge the success of a
project.

So why not try offering a bet on the success of a project, rather than going
through the horror of trying to prove a negative?

------
Taek
Proponents of Ethereum ignore the fact that Ethereum fails to address any of
the most significant problems in Bitcoin. Bitcoin's major advantage is
decentralization, and it's about the only thing that Bitcoin does better than
anything else. Bitcoin is an extremely expensive way to build a financial
system, and there's no reason to go through the trouble unless you are
utilizing the decentralization.

Bitcoin's major problems are scale, miner centralization, and developer
centralization. Ethereum is worse than Bitcoin in all three respects.
Transactions on Ethereum are heavier, develoepment is very heavily controlled
by the Ethereum foundation and by Consensys, and the block algorithm in
Ethereum more strongly favors larger miners as compared to Bitcoin (which
already favors bigger miners).

Further, the Ethereum develoepment team is under qualified. There have been
several ametuer mistakes, including allowing negative balance, leaking private
keys, and putting consensus at risk by advocating that different users should
be running different consensus codebases. Most of the highly capable
developers in the cryptocurrency ecosystem avoid Ethereum because it's not
been constructed well, nor does it's design suggest strong resistance to
adversarial environments.

Bitcoin did go through similar growing pains. Bitcoin did have many ametuer
mistakes when getting started. But those have all been fixed, and there is a
positively enormous amount of competent mindshare powering Bitcoin, and the
thoroughness of decentralization in Bitcoin is unmatched by any altcoin,
including Ethereum.

Ethereum has offered a lot of cool tricks with its turing complete scripting
language, but is standing on a house of cards. It scales less well than
Bitcoin, it's design more heavily promotes centralization, it's development is
more ametuer, and the potential applications offered by its fancy scripting
language are not actually that much stronger than what you can do with
Bitcoin. The showcase applications such as Augur and Slockit suffer from weak
cryptographic fundamentals and under-qualified developers even worse than
Ethereum does.

~~~
api
I have a hard time imagining a proof of work based distributed system that
isn't guaranteed to be monopolized after a sufficient amount of time.

Work -- any form of work -- is subject to industrial scaling effects and
economies of scale:

[https://en.wikipedia.org/wiki/Economies_of_scale](https://en.wikipedia.org/wiki/Economies_of_scale)

Meanwhile all these POW-based currencies have deflationary economics and
deflating mining revenue due to rising difficulty. That makes less efficient
mining less profitable over time, driving smaller miners out of business and
accelerating the effect. Any proof of work based system like Bitcoin or
Ethereum will in the end be monopolized by whomever has the cheapest
electricity, cooling, and hardware, and the most labor-efficient mining
operation.

This is the most powerful bearish argument on Bitcoin and other
cryptocurrencies that I have. Gold and other hard currency materials are
randomly distributed by geology and physics, helping prevent total
monopolization of mining. Paper currencies are monopolized by default, so you
know it's controlled by the Fed or some government... the devil you know. But
these things are guaranteed to be monopolized by... uhh... we don't know yet.
You could end up with a currency controlled by Kim Jong Un or Dr. Evil and his
white Persian cat. (I'll take Dr. Evil.) Serious global organizations are not
going to adopt a reserve currency whose future control is up for grabs by
whomever can build the most efficient data center and/or snow over the
development community most effectively.

That's why Chinese miners have so much power on the Bitcoin block chain. Cheap
coal and a total lack of an EPA makes power very cheap for them, and they also
have local access to very cheap labor and cheap hardware production.

In the very long term if Bitcoin or any other POW-based currency became
cumulatively worth enough, someone in a chilly place like Russia, Scandinavia,
or Canada could build a hydroelectric powered arctic circle (free cooling)
super data center full of ASICs and own the entire block chain. There are
places on Earth with unbelievably cheap power (big hydro, constant prevailing
winds, etc.) and free cooling due to a cold local climate. A coastal location
in the arctic using arctic seawater for cooling and a dam on a local river
would be ideal. Nobody would be able to compete with that.

Bitcoin has two big things going for it, at least insofar as the mainstream
market is concerned:

1) The 2008 financial crash and its terribly bungled and corrupt aftermath
destroyed peoples' long term faith in the "devils we know," creating
essentially a market niche for a competing financial system that offers better
governance and transparency. Bitcoin, Ethereum, etc. and the many companies
working in these ecosystems are trying to address that niche.

(Side note: I wish the West's leadership would wake up and realize just how
profound a loss of confidence occurred in 2008-2009. I don't think the effect
has manifested yet. It's too deep and profound a loss of faith and the
population is still processing it.)

2) Existing methods of sending cash overseas like Western Union are absolutely
freaking horrible. We've used Bitcoin to pay overseas contractors because it
amounts to only one root canal vs. Western Union's three or four tooth
extractions with pliers per payment. Bank wires requires that I physical visit
a f'ing physical bank, which is even worse.

That means though that Bitcoin's advantage would disappear if:

1) Entities like the US Federal Government and the Federal Reserve took actual
steps to reform themselves and implement a plan of action for dealing with
things like the 2008 crash that is more honest, equitable, and well thought
out than "yank money out of our arse and hand it to other Yale alumni until
the fires go out."

2) Companies like Western Union realize they are in the 21st century and act
accordingly, implementing low friction easy to use methods of wiring money
with low fees.

Bitcoin would still have a niche if those two things happened, but its niche
would be smaller and probably further outside the mainstream of commerce.

Of course if Bitcoin ends up controlled by the Chinese PLA, none of those
above advantages might matter much.

~~~
tromp
The only way I see to prevent PoW mining from becoming centralized is to make
mining unprofitable altogether.

This requires having enough miners willing to mine at a loss, just like we
have millions of people willing to play the lottery at a loss.

In fact mining should be made to resemble an ongoing lottery as much as
possible, by

1) limiting the custom hardware efficiency advantage to less than an order of
magnitude, using a memory bound PoW

2) allowing users to mine with a single click, either to install an app that
mines on their smartphone while charging overnight, or from their WebAssembly
supporting browser

~~~
api
Interesting... and I wonder if the best option would also be to concentrate
mining rewards. Mining gives you a chance to win very big. In that case it
would become equivalent to the lotto, and would result in a financial system
sustained by gambling.

You could argue this would be morally superior to one sustained by bloodshed
and political power mongering. (Fiat currency is ultimately backed by state
power, a.k.a. violence.)

------
pmorici
Ethereum boosters have really been taking advantage of the strife in the
Bitcoin community over the past two months. There was a massive private
message spam campaign on Reddit and then when classic didn't immediately win
there were a ton of "I sold all my btc and bought ETH" posts many of which
were probably spam. The Peak in ETH price was a few days ago around 14 and the
price has been tanking since. These NYT pieces will probably give it another
leg up though.

The funny thing is that there are very few exchanges where you can buy ETH for
USD directly instead you have to first buy BTC then exchange it for ETH.

------
zaroth
Wow, great publicity for Ethereum. Except, they can't ever bring themselves to
explain what it does, or what it means. We're missing the 'why'.

~~~
adrianmacneil
Vitalik explained it pretty well at a recent talk he did at Coinbase:

Ethereum is a world computer. As in, it acts like a single public computer
that can perform computations for anyone who is willing to pay for them, but
instead of this computer being run by a third party, it's run by the network
as a whole.

This is useful for any situation where you would usually need a trusted third
party to perform some computations or enforce one side of a bargain - for
example ecommerce/escrow, trading, voting, bets, issuing stock/currency, plus
other things that probably have not even been thought of yet.

I agree, it can be a pretty wishy-washy mission statement at times. But then
again, so was the idea of a global communications network where anyone could
communicate with everyone and publish their own content in the 1980s.

~~~
lololomg
The bit that I don't get is how Ethereum will communicate with the outside
world.

Example: I bet a friend that Hillary will be the next president. We create an
Ethereum app/contract/whatever and fund it with $50 (worth of 'ether') each.
When the election rolls around, we want to pay the winner automatically, but
how can you do that?

You could have a rule to check some 'official' source on the internet but that
data could easily be faked or unavailable. Then what?

If this kind of app is not suited to Etherium, then what are some good
examples of Etherium's capabilities?

~~~
natrius
Gnosis is a prediction market platform that is live on Ethereum right now.
[http://groupgnosis.com/](http://groupgnosis.com/)

There are a few ways to act as the oracle who indicates what the outcome of an
event was. You can tell users to just trust you, which is what every
centralized prediction market does with few problems. You can pick a few
trusted oracles and require a majority vote. Or you can use any data that is
served over a TLS connection so the outcome can be cryptographically verified,
which is what Oraclize.it does. All of these approaches work for Gnosis
markets.

~~~
lololomg
All of this was already possible without Ethereum. I don't see what Etherium
adds to the equation here? For example with Bitcoin you can already create
escrow accounts with trusted third parties (aka oracles) being the decider.

~~~
natrius
Prediction markets are bets among arbitrary, dynamic sets of stakeholders. The
price of a bet depends on the bets that have already been made. Both of these
characteristics require state to be maintained across transactions in ways
that Bitcoin does not allow.

~~~
lololomg
I don't follow what you mean, there are loads of bitcoin prediction markets.
Adding Etherium doesn't give you anything new.

~~~
natrius
Gnosis runs on the Ethereum blockchain directly. The Gnosis team can't change
the number of shares you own, for instance. Decentralized applications are
safer for users. It was founded by the team that built Fairlay, a prediction
market site that uses Bitcoin, because they believe that prediction markets
should run directly on blockchains.

------
grapevines
Ethereum could quickly outdate itself by defining a fixed language. How will
the language adapt? Very slowly by consensus if Ethereum hopes to become a
large market player.

Bitcoin could be easily made Turing complete. If each transaction can store 80
bytes of information, then one could use 48 bytes to store code and the
remaining 32 bytes to refer to another transaction storing the next block of
code and thus chain together code. Unless I am missing something, a new
currency is simply unnecessary, and will always be at a second-mover
disadvantage.

Soon, I am sure a prototype of what I described will be released on bitcoin
thus obscuring Ethereum. A solid use-case for distributed computing would be
distributed HTTP delivery. If ethereum could offer a product for decentralized
web-hosting, then I would buy into their product, but until then the whole
situation is just vaporware to me.

~~~
adrianmacneil
> Ethereum offers nothing more than Bitcion

It offers a more powerful scripting language to define contracts.

> Ethereum could quickly outdate itself by defining a fixed language.

If offers a "bytecode" type language which can be created by compiling
contracts in >=2 languages already. Bitcoin currently lets you define
contracts in the equivalent of assembly code, with no higher level languages
available. So this statment seems to apply more to Bitcoin than Ethereum.

> Bitcoin could be easily made Turing complete.

Bitcoin developers can't even agree to a simple block size increase. What
makes you think they would be able to do something as complex as adding
turing-complete scripting capabilities?

> Unless I am missing something, a new currency is simply unnecessary.

Since bitcoin does not support 2-way pegged sidechains yet, it's not possible
to launch a new blockchain without launching a new currency to power that
blockchain. Besides, you need a way to reward the miners.

> Soon, I am sure a prototype of what I described will be released on bitcion
> thus obscuring Ethereum.

That's basically what Rootstock[0] is supposed to be. Although at present, it
seems to be vaporware.

A year ago I used to have a similar viewpoint to you, that Bitcoin had such a
massive first mover advantage and network effects that it would remain the
dominant public blockchain, and that even as new inventions appeared, they
would be backported to bitcoin. But over the past 6 months I've realized how
useless Bitcoin is without a genuine respected leader/BDFL, and now think that
without a leader it's doomed to design by committee and stalemate on key
decisions, which leaves the playing field wide open for competitors like
Ethereum.

[0] [http://www.rootstock.io/](http://www.rootstock.io/)

~~~
mike_hearn
Bitcoin's problem is not a lack of a leader, it's problem is that the leader
is Gregory Maxwell at Blockstream and he's a terrible decision maker.
Blockstream is the source of the refusal to bump the block size.

Indeed, the block size debate did not stalemate. It resulted in the small
blockists winning, due to the much more aggressive tactics they used (e.g.
hiring a bunch of developers then asserting they'd all quit forever if the
block size were changed).

~~~
bachback
Bitcoin's technical problems are that it fundamentally does not scale. If each
node has to verify all transactions that is not sustainable in the long term.
Hal Finney knew this way back:
[https://bitcointalk.org/index.php?topic=2500.msg34211#msg342...](https://bitcointalk.org/index.php?topic=2500.msg34211#msg34211)
"Bitcoin itself cannot scale to have every single financial transaction in the
world be broadcast to everyone and included in the block chain. There needs to
be a secondary level of payment systems which is lighter weight and more
efficient."

~~~
riprowan
It is a myth that Bitcoin requires every node to validate all transactions in
the long term. That's why the white paper explains the need for spv clients.

[https://bitcoin.org/bitcoin.pdf](https://bitcoin.org/bitcoin.pdf)

Moreover it a red herring to assert that Bitcoin has to scale to support every
single financial transaction in the world just like it would be a red herring
to attack the architecture of the Internet because it cannot scale today to
include every form of communication we perform today.

Red herring/ strawman / Nirvana arguments are the defense for the entire small
block position. Bitcoin, like every other information technology, does not
need to meet every need today. It simply needs

1\. Sufficient free capacity to encourage growth, and

2\. Continuous improvement

~~~
bachback
Seem like you don't see the x^n argument. It should be obvious. Satoshi/Hal
Finney were well aware of this, see the link. This has nothing to do with SPV.
Producing blocks is what's important.

~~~
riprowan
I searched the link. Satoshi did not post in that thread and there is no
mention of "x^n"

Maybe you should present the argument, since it wasn't presented where you
said I'd find it.

------
jtwaleson
Is it naive to think this NYT article will cause the ETH price to go up for
the next few days?

Suppose the article has 10M viewers, 1% decides to buy some ETH for
investment, on average $500, that means $50M of extra demand in a matter of
days. (These numbers are wild guesses.) Current daily trade volume is $25M.

~~~
wslh
It's not naive, but there is no Coinbase for Ethereum so you need some
knowledge to run the node (also, it is not just running it because sometimes
it fails to work properly). Taking into account this friction less people will
try.

~~~
DennisP
People can buy ether on Bitfinex, Kraken, and Poloniex. The first two take
dollars, the last only bitcoins.

------
drcode
(The title of the HN post is the updated title for the article, as it will
appear in Monday's NYTimes print edition - See article footer.)

------
johng
I've been into Bitcoin (and Litecoin) since the early days. Well, relatively
early. Ethereum really has me interested.

~~~
brighton36
No one needs smart contracts. And the value proposition of Ethereum will
require an inordinate need for ether in order to support the mining
requirements of the chain. This project is a scam

~~~
erikpukinskis
Personally I'd be happy to pay way over market hosting rates to host, say, my
articles of incorporation, equity trades, and accounts receivable. That seems
like one of the most exciting uses of ethereum to me. Write a plugin to
"export to IRS".

~~~
magicGLASSman
Why not just use a database? what do you think the advantage of using Ethereum
for this is?

~~~
erikpukinskis
Each party can audit the contracts and infrastructure at any time.

There's also an easy path for a dissenting quorum to reincorporate on their
own.

------
babukumaran
For anyone who wants to get into Ethereum or buy Ethers, here is some great
info on getting started: [http://www.blockgram.com](http://www.blockgram.com)

~~~
csomar
You should mention if you are affiliated with this site.

~~~
babukumaran
Yes, I wrote the tutorial. I am not associated with any of the companies
providing the services I mentioned in the blog. Thanks for pointing it.

------
qwtel
The 'emperor has no close situation' with all blockchain technology is that
they simply don't scale to any real-world capacity. What sets ethereum apart
in that respect, is that they at least have a plan about how to solve it. It
is far from clear if it will even work and if they will be able to switch out
the engine of a running blockchain, but if they are able to pull it off, I
guess it would be a big deal.

~~~
sgt101
Blockchain technology is a big area, proof of stake vs proof of work debates
are interesting but there are simple mechanisms that provide different levels
of trust in different settings. For example a simple 2/3 membership vote
implemented in a closed system can provide substantial trust - although not
perfect. On the other hand if 60% of your proof of work capability lives
behind a firewall and may in reality belong to one actor due to that actors
track record of kidnapping anyone behind the firewall that disagrees with it
then you have an imperfect situation as well.

------
bsurmanski
One of the 'selling points' of Ethereum is the 'global computer' aspect.
Essentially Ethereum is designed so that you can put programs on the block
chain. Programs that can be called transactionally and where the result of the
program is guaranteed to be correct.

Why is this important? Well, lets imagine a dice game. If on a traditional
server, the program can cheat and give an unnatural edge to the site-owner.
With ethereum programs, you can look at the source and know that said dice
program is 'fair'. At the same time, from the perspective of the programmer,
the blockchain ensures the users can't cheat you, either.

Now this sounds cool, but I can say from first hand experience that this is
actually kinda trash. Last I looked into this (around October), programs were
limited to a _very_ low number of clock cycles before the program cancelled
out.

How long a program would be too long? Through experimentation I found that a
program more than about 30-40 lines of their C-like language would regularly
hit the limit. What happens when you hit the operations limit? the program
rolls-back without any effect, eating your transaction fee. Now, you can pay
for more operations, but there is a limit. Even with the max number of
operations you can't do too much. You can store values on the block chain, but
any write or update takes up an substantial amount of 'gas' (the unit of
currency for computation and storage).

So to imagine the limits, their 'global computer' acts like a coin-op machine
where each quarter gets you 40-50 bytes of storage OR maybe 500 clock cycles
on a virtual CPU. But, if the program tries to use more than a quarter,
everything is rolled-back and your quarter is gone. (There is (last I
checked), no way to know if your program will go over. Just trial and error).

Not only that, but (last i checked), the programs were compiled to a bytecode
and there was no dissembler. Meaning that if someone wants to verify a
program, they need the exact source code and exact compiler the dev used, and
must MD5 the results.

Beyond that, there isn't really any good testing tools. Last i checked, the
only way to run a program is to deploy it. So, you have to setup your own
private chain to test on and continuously deploy and wait and test. There was
a way to sort-of put debug prints in your program, but remember how I
mentioned that a program that fails rolls-back? Well, it won't output anything
either. And there were operations (some undocumented) that would simply crash
the program. Index-out-of-bound? Silently crash program. AND the act of debug-
printing would take up valuable storage (pushing your program over the edge of
the limit).

In summary, the 'global computer' is so limited to be practically useless and
the development process is (currently) a fate worse than hell.

/rant

~~~
natrius
(Readers who have similar developer questions should check out the Ethereum
Stack Exchange. It's really useful!
[https://ethereum.stackexchange.com/](https://ethereum.stackexchange.com/))

Blockchains have to produce new blocks regularly to be useful. Think of the
gas limit like the amount of time you have to render a new frame in graphics
applications. If you have unbounded computation in a time-dependent system
that anyone can submit instructions to, you're gonna get some DoS attacks.

> _There is (last I checked), no way to know if your program will go over.
> Just trial and error_

It's easy to check: blockchains are deterministic state machines. You can
simulate a transaction to see what would happen with the current state, and as
long as the state of your contract isn't modified by another transaction in
the meantime, you'll get the same results on the chain.

> _Last i checked, the only way to run a program is to deploy it. So, you have
> to setup your own private chain to test on and continuously deploy and wait
> and test._

Most developers use TestRPC to simulate a blockchain. It's like developing a
web app with SQLite or another in-memory database.

[https://github.com/ethereumjs/testrpc/](https://github.com/ethereumjs/testrpc/)

[https://truffle.readthedocs.org/en/latest/](https://truffle.readthedocs.org/en/latest/)

------
seymores
Just want to mention RootStalk here, make bitcoin on par with ethereum in
regards to smart contract.

------
aserafini
Although superficially 'almost' as large as Bitcoin in terms of market cap and
transaction volume, the amount of hash power securing the Ethereum network is
several orders of magnitude lower:

Bitcoin: 1.2 Exahash / second

Ethereum: 1.6 Terahash / second

~~~
onestone
Comparing the two is completely meaningless. Ethereum's hash function (Ethash)
is orders of magnitude more expensive than Bitcoin's SHA256. And also, it is
ASIC-resistant.

~~~
aserafini
Good point, a better way to compare would be the Watts consumed by each
network: that gives you the minimum energy costs required for a 51% attack.
Unfortunately I can't seem to find any typical "hashes per joule" numbers for
Ethereum mining rigs that would allow us to extrapolate this. I still
speculate it would be orders of magnitude more expensive to launch such an
attack on the Bitcoin network.

~~~
tromp
The mining reward itself is a good estimator of the energy cost (an over-
estimate in fact since the reward has to cover both energy costs as well as
hardware investment/depreciation, but the former dominates the latter).

So attacking bitcoin costs roughly 150BTC per hour, while attacking Ethereum
costs roughly 1200ETH (worth about 30BTC currently) per hour.

This suggests Bitcoin is 5 times more "secure".

~~~
aserafini
Mining reward and exchange rate gives us a strict upper bound on the cost of
energy it's economical to spend on mining but I'm not sure it provides a good
estimate of the actual energy being used. If energy_used = mining_reward *
exchange_rate, an increase in hash power would be correlated positively with
exchange rate.

In reality, Bitcoin hashrate has increased over 30x in the last 2 years and
the exchange rate in USD has actually decreased in the same period. That
suggests we aren't using anywhere near the upper bound of energy that remains
economical.

Given that Bitcoin network performs 1 million x as many hashes per second than
Ethereum, the energy cost per Ethash must be somewhere like 200,000x more
expensive than SHA256 to compute if we are to assume Bitcoin is only 5x as
'secure'. I have't fired up an Ether mining rig to test whether that is the
case or not, but it seems highly unlikely so I'm still maintaining a 51%
attack against Bitcoin is orders of magnitude more costly to perform than the
equivalent attack on Ether.

Realistic 'energy use per hash' for SHA256 versus Ethash would be good numbers
to have that either refure or back that up.

UPDATE: found some numbers from mining rig data. We can use 'hashes per joule'
numbers for the most efficient Bitcoin mining rig and Ethereum mining rig.

Top Bitcoin mining rig performs 4000 Mhash/J according to [1]

Top Ether mining rig performs 0.08 Mhash/J according to [2]

So if every miner achieves those numbers, the Bitcoin network is currently
running around 300,000,000W versus 20,000,000W on Ethereum network (15x).

So, perhaps not orders of magnitude more secure, but probably at least one!
(for the time being).

[1]
[https://en.bitcoin.it/wiki/Mining_hardware_comparison](https://en.bitcoin.it/wiki/Mining_hardware_comparison)
[2] [http://www.vmxlabs.com/](http://www.vmxlabs.com/)

------
theworstshill
Ethereum is a distrubuted JVM basically? Guess its alright if you wanna run a
casino that can't get taken down, otherwise I dont know what kind of uses you
can find for this thing.

~~~
nix_said
Except much much more limited and every line of code costs way more money to
run on one computer while only acting as if it was ran on a single computer in
practice.

~~~
theworstshill
Thats exactly why I mentioned an application such as a casino - the vm will
provide guarantee of a payout. People will pay for that, but they won't pay
for you to run 3D games on the thing.

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test6435341
Corporate handling bitcoin... Interesting.

~~~
qwtel
I'd say this is corporate handling bitcoin:
[http://chain.com/](http://chain.com/)

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aminorex
Great. More fools for the fire.

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tdkl
Being honest sometimes results in being a jerk. No big deal, an emotionally
mature adult can handle it.

~~~
ska
Your last statement is true, but your first one couldn't be more wrong.

Being honest never requires being a jerk. That is always a choice you make.

~~~
randomnumber314
If I tell a fat person that they're fat, and they are, they can perceive that
I'm being a jerk, but they're still fat, and my statement is still objectively
true. The perception of the truth being spoken by me as negative comes from
the receiver--it's their issue with the statement that attaches emotion, not
mine.

Remove context from his statement and surrogate anything we have objective
knowledge of (e.g. housing market 2009) and the statement morphs from
"arrogant prediction and condescension" to an appropriate comment on reality.

~~~
ska
Remove the context from a statement and it is no longer communication.

There are very few contexts I can think of where "telling a fat person they
are fat" is useful information for that person.

"Being honest" isn't a valid defense against being an asshat.

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Kiro
So is it time to invest in ETH?

~~~
defgeneric
yes

------
known
You cease to exist as an Independent Nation if you can't print your own
currency

