Surely there is a better argument to be made here. Speculative "mining" on consumer purchased hardware is hardly near the top of global wasted resources.
- Facebook ad spending is a waste; do companies actually get a ROI on all the money they give to Facebook? They don't actually know! In the grand scheme of things it's a complete waste. If Facebook didn't exist, then companies wouldn't be forced to pay it money just to stay relevant; they could focus their funds on actually improving their products instead. Not to mention the enormous amount of otherwise productive human hours that Facebook is responsible for wasting every day. That's not even counting all the other social networks.
- Gambling; $240 billion per year; the money does nothing for society. The amount of money spent on gambling every year is MORE than the total market capitalization of all cryptocurrencies added up together. So even if you think that buying a cryptocurrency is gambling, your odds are much better (and improve as you do more research). If people stopped gambling on horses and lottery and started gambling with cryptocurrencies instead, the total market cap for cryptocurrencies would be much higher than it is now.
- Sports; the sport industry makes $75 billion per year. Yes it's entertainment. So is trading cryptocurrencies.
- Tobacco industry makes $35 billion in PROFITS per year. Doesn't add anything positive to society. I think that if you were to add up all fees (profits) ever charged for transferring cryptocurrencies, you wouldn't get anything close to $35 billion.
I don't have a link for you, but just yesterday I read a headline saying bitcoin mining accounts for 5% of the UK's energy expenditure. That's not peanuts.
Now, even if that headline is wrong, here's a site that offers a Bitcoin Energy Consumption Index Chart (https://digiconomist.net/bitcoin-energy-consumption) and they say that bitcoin accounts for 0.08% of the world's electricity consumption. That seems absurdly high.
Yes they do, and yes they know. Facebook is very effective at reaching qualified leads, it's not "likes" or "engagement" what advertisers are buying.
Gambling pays for many social services through (heavy) taxation and government-run lotteries.
Sports promote fitness.
Cigarettes make me look cool (kidding).
It doesn't. That's the myth that keeps you supporting the system.
The truth is the other way around. https://medium.com/modern-money-matters/the-magic-money-tree...
Also which system are we referring to, there are an infinite number.
Sometimes this argumentation is totally valid. For example, it's utterly
stupid reasoning when one uses less water at home "to save fresh water and
environment", because households use half of the fresh water used by industry,
and agriculture uses twice as much as the two combined. Whatever inconvenience
the person trying to save the environment this way puts themselves into, the
effect is capped at about 10% of total fresh water consumption. It's an effort
applied in the wrong place.
More philosophically speaking, if there's an equation of life with all the variables and we apply it here by taking all the "saved effort thanks to not promoting water consciousness in regular households" and dumping it into whichever area we'd think is ideally efficient, it wouldn't be _too_ surprising if holistically, the result comes out less favorable of this approach vs just telling regular folks to save water. For example, consider that it might take tenfold the effort to convince an agricultural company CEO to change approach; if ninefold the effort doesn't reach the activation energy to convince such person then you're better off telling nine people to stop the waste.
In general, I have the feeling that many decisions can wrongly be made to look stupid if we recalculate it using the select few variables we care about.
Ah yes, "let's show them not to be wasteful". Ever heard of the activities of
making industries not to use child labour or improve working conditions of
factory workers? If they didn't work, why do you think this one would?
> Where would the change be coming from?
Certainly not from social movements. They rarely have enough power to make
a single company change, much less a whole industry.
I remember a couple of friends wanting to buy some powerful machines to mine bitcoins a few years ago, and they had to actually calculate their electricity bill to make sure they weren't losing money.
That's quite a ways from storing Instagram pics.
Imagine the power consumption in a place like this: https://motherboard.vice.com/en_us/article/qkvxk3/chinas-big...
I don't think it's ignored at all. It's covered in Bitcoin's FAQ because it comes up pretty often. Also some folks have tried to create coins that use something other than a PoW. Some have created coins whose PoW has independent utility (XPM: cunningham chains of primes).
> raw materials that go into all these GPUs
Well, thank goodness the GPUs have independent utility. If you want to be concerned about waste, the ASICs are generally much less useful after difficulty increases than GPUs.
> seriously perverse.
shrug people every day "waste" global resources on things that I think are totally worthless. You might see bitcoin and friends as similarly worthless but if absolutely nothing else it does seem like it has real utility for making remittances more affordable.
Then again it could all just be a bubble, in which case yes there will be a lot of waste but the market will correct itself. The problem is cryptocurrency has real value, it takes real computing power to process and once it's processed it's very secure (therein lies the value) so I don't think cryptocurrency is going away
Bitcoin is a transaction processing platform, the success of which is unfortunately limited by severe volatility issues. Many of these altcoins are designed to process arbitrary data, control ownership/identity, etc. Yes, there are plenty of pump and dump schemes, but you're talking out of your ass if you're trying to generally equate the usage of CPU time with "wasting energy."
It is not a waste because we extract economic & social worth from cryptocurrencies. Same thing with cars: they waste 97% of their fuel energy but we tolerate them because they provide obvious economic advantages. Also see: http://blog.zorinaq.com/bitcoin-mining-is-not-wasteful/
Or am I completely off here?
Additionally you're assuming the only motive behind mining bitcoin is the value of bitcoin, effectively ignoring realities like, e.g., that entities use it to avoid capital flight regulations.
People talk a lot about how much energy it uses, yet to see attempt at quantifying co2 emissions, they are likely quite low.
The disparity in energy use is so large that even if Bitcoin mining emitted only 1% of the CO2 per kWh that normal energy users do, it would still be far ahead.
The lightning network may address this specific concern. I.e. bitcoin may become primarily a settlement mechanism for a much less resource hungry payment handling protocol/layer.
Those people won't go away if we eliminated the whole banking system, but their carbon footprint will not have been wasted on the tracking and transfer of assets!
There is downward pressure on the transaction volume of bitcoin for bitcoin users, because each individual transaction costs so much. This is not exactly an advantage of Bitcoin, I'll admit, but there are some people who will consider Bitcoin a success if ultimately it is only used for larger settlements between payment companies (they would prefer to see Bitcoin is not involved in micro-transactions, they would raise the tx fees to make this use case impracticable.)
All I'm saying is, don't look at Bitcoin handling an average of 7 transactions per second and say "that's less efficient" because your average Bitcoin transaction is currently trending toward being significantly more complicated than your average credit card transaction.
(And even after the recent improvements and pricing hype, I'm not actually betting on Bitcoin myself.)
The BTC system, by design, is unsuitable for trustless person-to-person transactions in the form of Point-of-Sale. Every merchant who operates Bitcoin is trained to know that the transaction is not over until it's mined and in a block, and it's really much safer to wait at least a few blocks.
So if you're selling coffee, maybe you don't worry about it because absolutely nobody is waiting 30 minutes for their cup of coffee, and if someone defrauds you more than twice you'll surely remember their face. By then you're still only out ~$10, and the cost of each attack is high, and likelihood of success is non-zero but fairly low. So you can eat the loss for the cup of coffee, sure, but this is definitely not a great sales pitch for Point-of-Sale system at BestBuy or basically anywhere else.
Ethereum, on the other hand, mines a block on average every 14 seconds. You could realistically be safe and use that in a Point-of-Sale system. (And I'm not the expert, there may be even better systems than Ethereum. But don't say Visa... :-)
And I think either way, my statement that the question is based on faulty assumptions is correct. If bitcoin supplants a large portion of the financial system then the energy use will be ridiculous. If bitcoin's energy use is kept low by limiting it to large settlements between payment companies, then it won't supplant a large portion of the financial system.
Bitcoin price can drop to $1000 tomorrow and many miners will lose interest on the following day, but the difficulty is what governs how much work is required to put a block onto the end of the chain; not the number of transactions. When the difficulty drops, (yeah it will bring some miners back). In this way, it is extremely beneficial that the price drops for the viability of the network. And sure, that is scary for speculators who may or may not understand it, but this isn't a frozen banana stand, it is a brand new monetary system. There is tons of risk involved for stakeholders.
As solutions are implemented that make it easier to include more transactions in a single block, or to safely defer publishing the transactions into a block at all until some later date when there is less friction (SegWit does this?) the number of transactions that Bitcoin may process per second will rise, but the difficulty/hashrate are not a factor in this calculation.
The price of bitcoin is what has driven the interest in mining, and the explosion of difficulty is what follows from that based on how the protocol is designed to work. These variables are not in any way dependent on transaction volume by number or complexity of transactions, though.
You can absolutely increase or decrease the throughput of transactions handled by the network without necessarily having any dependent effect on energy usage, hashrate, or difficulty. (We could have a fine blockchain with only 5-10 people doing the mining, and it would almost certainly be able to handle just as many transactions, but there are quite a lot more people interested than that.)
VISA is capable of handling 56,000 transactions per second  while Bitcoin is capable of handing a measly 2.5 . Bitcoin would need to scale by 224,000% to match VISA, and VISA is one of my different global networks. I don't know how much energy VISA uses but as of today, the bitcoin network is estimated to be using 16TWh , that's the same as all of Jordan or Lebanon or 5.2% of the energy consumption of the United Kingdom .
Assuming no energy consumption improvements, to scale to VISA levels Bitcoin would need to consume 224,000% more energy. That's 35,840TWh, which is nearly twice as much energy as the entire planet uses (21,776TWh)!!!
So, if Bitcoin is able to become 90% more efficient, it would only require as much energy as nearly two European Unions. If Bitcoin is able to become 99% more efficient, it would only require as much energy more energy than the entire United Kingdom. If Bitcoin is able to become 99.9% more efficient, it would only require as much energy as Qatar. I can keep going but I won't. I might have made a mistake and been a factor out, but even then it doesn't even matter, that's how ridiculous the numbers are.
I don't know about you but I find it rather unlikely that Bitcoin will every be a viable replacement for the world banking system. Maybe in a universe where Nuclear fusion is easy and ASICs never wear out, and the cost of cooling them is free but unfortunately for Bitcoin we don't live in that universe.
Bitcoin and crypocurrancys are horrible inventions if you care about the planet, if you think a massive decentralised network where value is created from ever increasing difficulty proof of work could be more efficient than VISA you are frankly deluded. Granted, this is someone who does not own any Bitcoins, so maybe I just haven't drunk the kool aid.
> Bitcoin would need to consume 224,000% more energy
That's not how it works.
Doubling the quantity of Bitcoin transferred over the network does not double the network's energy use.
>if you think a massive decentralised network where value is created from ever increasing difficulty proof of work could be more efficient than VISA you are frankly deluded
nobody ever thought that. seems to a strawman to me.
The TARP was actually profitable: https://www.washingtonpost.com/business/economy/bailout-high...
And likewise if you assume values for the cost of apple seeds land, see how many apples you can grow given a certain amount of time - and the value of apples could very well go down - but for the sake of demonstration you can also calculate a very rough estimate of apple orchard profitability, no?
Assume a perfectly spherical cow, emitting milk equally in all directions...
Unless you have free/ very cheap power, is likely not worth your time.
Yes, these ethereum "altcoins" are just as tradeable as any other crypto coin. However, it would be more accurate to refer to them as "smart contracts," because you cannot "mine" them in the traditional sense of redirecting CPU cycles.
Let's define "mining" an altcoin as receiving that altcoin in exchange for services. For example, you can "mine" BTC or ETH by providing the service of compute cycles. Then how do you "mine" an altcoin that is really an ethereum smart contract? The service could literally be anything, depending on the contract. It could mean anything from leasing disk space, to freelance programming.
If you have a generic mining rig setup, you can probably redirect it to mine ETH, BTC, or any CPU based proof-of-work coin. But your CPU can't freelance for people. It can't lease disk space. It can't fulfill any arbitrary ethereum contract.
There needs to be a distinction between the term "altcoin" and "smart contract," because even though you can trade them both on exchanges, the process for receiving the coin in exchange for services can vary widely. It's misleading to refer to "mining BTC" and "mining <insert smart contract here>" as interchangeable ideas.
It's a bit misleading to only show coins that have appreciated in value.
It's odd the article doesn't mention the different mining algorithms. It's definitely not profitable to CPU or GPU mine any SHA256 coins, given ASICs are ~10,000 times more power efficient. Yet he suggests CPU and GPU mining, then says he's considering buying Antminers?
The electricity mining Bitcoins costs with a normal CPU/GPU though is definitely more then you're going to make. (Even if your PC is on anyway, just the added cycles.)
EDIT: This is a good place to remind everyone that most people in the original gold rush lost money, their health and years of their lifes for nothing.
Hashing Ethereum, i'm making around $2 USD per day from that card. Hashing ZCash I'm making about $1.70 USD a day from that card. (both without any real optimizations). Also that's pre-power-consumption-cost, so the "profit" is $1/day and $0.70/day respectively.
There are others which cut it even closer, but there are other people who live in areas with cheaper power that make even those worth it.
It's not the cash-cow it was in it's hayday where people were making $5-10 per card in some cases, but for me it's still a nice $200 a month in profit in my bank account from just older equipment I had laying around and about $100 in parts and stuff to run it in my garage. Accounting for the several hours I put into setting it up makes the money less worth it, but it was fun for me to do so I'm happy with it.
If I would have "invested" only the $120 that I've spent on equipment so far, i'd be significantly worse off than I am with mining. (Remember, I started this process with a handful of older/unused GPUs, so the only stuff I bought was an extra PSU, some risers, and a few odds and ends here and there).
If I factor in the selling of the unused GPUs that I had laying around that I'm using for mining, I'd still be at a bit less than I am now (assuming I got the "market rate" and sold them at a good time). Realistically I wouldn't have sold them, since I didn't already and had some of them for a few years. They would have just collected dust in my closet like they were.
If I "pretend" that I invested as much as I'm spending in electricity each month into bitcoin and sold it off in a manner similar to how I get paid mining (in other words, "buy in" a few $ per day, selling all of that back at the end of the month), i'd be slightly better off, but that's only because bitcoin went from $2700 to like $4000 in a few freakin days!
I'm okay with my lower gains for less/no risk.
> it's still a nice $200 a month
Even if you can do both concurrently, that doesn't add up (1.7*31 = 52.7, not $200).
My whole "setup" makes me about $200 in profit a month right now (down from roughly $500 in Ethereum's hayday)
Bitcoin enabled trade accross borders without going through banks, and with the possibility of evading normal money launderng proceedures.
Ethereum offered fascinating new applications like DAO, providing new ways of trading in funds and structuring companies.
Possibly there would be space for a zero knowledge alt-coin in dark pools and for mediating illegal tranasctions. But I don't think there is a market leader yet.
The huge majority of these alt coins are bucket shops. Surely that should effect the way we talk about them.
There are a lot of bucketshops these days. American gambling laws make it better to pretend to be legitimate. I wish America would just legalize online gambling.
HN is truly a hub for a great set of minds in the tech community but when it comes to crypto it just amazes me how myopic opinions can be.
I used zpool.ca for a while when Blake2s alts were highly profitable. I don't know what the best alt-coins are these days. It tends to fluctuate quite rapidly.
This ends up acting like you the "seller" of hashing power getting paid in bitcoin to hash whatever altcoin is most profitable at the moment.
They have an auto-switching GUI client for windows, and allow you to point basically any miner that they support the algorithm at their service and get paid in bitcoin at a roughly comparable rate to mining the actual coin.
Suppose there's altcoin called ALT which can be mined very quickly and is worth let's say $0.00001 per coin. Mining a block takes 5 minutes and the payout is 10000 ALT coins or whatever.
The 10000 coins are distributed across the pool, and you determine that on your setup you should be able to mine $3 USD in terms of BTC a day on the pool. You get wind that ALT is about to get pumped hard, which means your potential earnings could reach $20 per day (or whatever).
What's the problem (ignoring exchange fees) with going "all in"?
Firstly, ALT coin may have a confirmation time of several hours or even days. You can't sell unconfirmed coins.
Secondly, the exchange has to sell these coins elsewhere (usually another exchange). Because of the low value, this other exchange may have a rule that you can only sell in batches of 1 million. So even though you've mined X amount of coins, you still have to wait for the batch to be fulfilled.
Thirdly once the batch is fulfilled, you still have to wait for it to be sold on the other exchange.
And finally, the BTC <-> ALT exchange rate may fluctuate independently of known factors.
By the time this happens, your ALT coin will almost certainly be worth a different value to what they were when you first mined them.
It could be worth more or less, but the point is you can't efficiently forecast on most alt-coins when you use exchanges like Zpool and NiceHash. This is why they usually have several values for your "earnings" - Total, Unconfirmed, Confirmed, and Sold. It's also why "profit switching" algorithms and techniques are kind of a silly idea for most alt-coins - you cannot calculate profit based on current market values.
You as a "seller" get paid in bitcoin per mhash/s (or whatever the unit is for that algorithm). so if you are hashing "DaggerHashimoto" at 26Mhash/s for 24 hours, you are getting paid x btc per mhash/s
The "buyers" are basically then paying NiceHash to say "I want x ghash/s of this algorithm and I want it going toward this mining pool and I'll pay you X bitcoin for it." So then NiceHash plays the part of the broker and matches that X bitcoin payment up with as many miners as is needed to reach the threshold of ghash/s and takes a little off the top as a fee.
It's not perfect, you may end up taking a sub-optimal algorithm and making less than you could have if you did it perfectly, but it works well enough that I make profit in bitcoin.
That's usually fine for the bigger, more established alts (since the known alts use the known algos - DaggerHashimoto, Equihash etc), but not for the alts which can potentially generate the most profit in shorter periods of time. So if a coin that uses some obscure algo gets pumped for a few days it's going to skew the chart.
The real benefit of Nicehash is that it's more accessible for people who are new to crypto mining. If you work out the numbers, mining ETH (for example) directly is almost always more profitable than using Nicehash. Nicehash is just simpler and more convenient.
But I don't want ETH, I want BTC. And while it's not a knock against ETH (It seems like a really cool technology!), I just don't want to hold my money in it and deal with it separately than I do my BTC. And I'm more than willing to pay that 4% fee to be able to hold my BTC securely with the ecosystem I have setup to sell and convert it to USD if/when I need to.
Were you speaking in hyperbole? I don't even think you can mine any of your examples but lets entertain it:
Golem has $3,000,000 in daily volume and is listed on 17 distinct exchanges (separate sources of liquidity, some of which are on the same website)
Pepecash as upwards of $40,000 in daily volume and is listed on 4 exchanges.
You are going to be making pennies to maybe a few thousand dollars daily from mining and you think there is a liquidity problem that is even applicable to your low-income class?
Volume is low, but at garden variety mining scale you can easily sell.
My independent analysis of it is that there exists merely an optimization on your mining yield by not using Minergate, but you will have to do that calculation yourself based on your mining hardware, electricity costs and throughput, and determine if the convenience makes up for the possibilities of alleged resource theft.
Mining pools pay out directly to any designated address, and so they don't store your earned funds at all. The risk of impropriety is very low, but miner's yields are also low enough that they would still complain about minor variances in mining pools.
but there are many others like that site, its just historical price data.
So to answer your question, you could potentially use your old PC to host your POS wallet and earn ETH. The amount you will earn will depend on how much you currently have and how long your are connected to the network.
So I wholeheartedly support pumping and dumping tons of cryptocurrencies. It has been free money for a while now.