What gets neglected is that the Bitcoin algorithm is inherently wasteful. By its very design, it results in an insane amount of duplicated, pointless computation.
The question isn't whether something like Bitcoin can provide any value. The question is whether we have better options. And the answer is: we do, by far. From proof-of-stake (like Ethereum is moving towards) or trust-based models (like Stellar), technologies exist that grant almost all the benefits of Bitcoin at tiny fraction of the environmental (and monetary!) cost.
I give Bitcoin credit for being an interesting "first answer" to an extremely hard problem. But it is in no way something that we should be doubling down on.
What you're describing is basically Libra with slightly better entities backing it. Transactions can be reversed by those "trusted entities" with no recourse by you and at no cost to them. At least with PoW and PoS (to an extent), attempting to reverse transactions has a cost.
Speaking of PoS, were the issues with PoS ever solved? Specifically the "nothing at stake" problem. The Wikipedia page's list of implementations makes it sound like it's not at parity with PoW in terms of security.
The good thing is that you don't have too! You are not forced. If I send money to a friend or familiy, I don't need a third party.
A third party could be either a bigger financial company or just a trusted third party in a specific domain both people trust (and make a 2 out of 3 multi-sig with it, and if I get delivered what I want and the other side receives the payment, the payment processor has nothing to do, but could in case there is a dispute)
Proof of stake is promising, but it hasn’t rolled out yet. It’s possible that the migration leads to unforeseen problems, or fails entirely.
The trusted models like Stellar aren’t operating at the same financial scale as Bitcoin. The question there isn’t technically whether they can handle the transactions per second, but socially whether they are as resistant to censorship as Bitcoin is.
In the end, more people want Bitcoin than want Ethereum or Stellar. And people are willing to pay a lot of money to get it, money which in large part goes indirectly to miners’ energy expenditure. Perhaps, in the long run, the more efficient consensus mechanisms will prove superior to proof-of-work. But it hasn’t happened yet.
Stellar is attractive to me precisely because it works with society, rather than against it. It uses the trust relationships already built into our social systems and institutions. It's true, I don't trust Chase individually not to screw me over. But I do trust 50 independent organizations (including government, private individuals and corporations) all checking each other's work. You get 98% of the benefit of Bitcoin with thousands of times greater efficiency.
The only scenario where this stops working is in a complete societal breakdown, and frankly that is not a contingency most reasonable people plan for.
Is hypothetical resilience in the face of an anarchist fantasy really worth millions of tonnes of real carbon being pumped into the atmosphere?
This is an accident of history more than anything.
I think the distribution will look different once the monetary cost of Proof of Work starts to impact the Bitcoin ecosystem.
Ever heard of the bullshit asymmetry principle?
Anyways, to answer your question: High cost of mining in gold is what limits the supply. High cost of mining in a cryptocurrency is not needed to limit supply.
this is a bit backwards, high cost of mining is not needed, it's a consequence of demand in higher supply
analogy does hold: there is demand for gold which causes certain amount of mining which has environmental impact. there is demand for bitcoin which causes certain amount of mining which has environmental impact.
of course no analogy is perfect, bitcoin has another aspect with feedback loops to mining and demand - security. the more mining happens, the higher ledger security and the more valuable it is.
it's still completely misguided to think that bitcoin mining is some process done for no reason - it's integral part of what makes bitcoin valuable. and the more mining - the more valuable bitcoin is.
lastly, blaming energy consumers in environmental impact is wrong too, it's producers that use environmentally damaging means for energy production who should bear the blame.
After all these years of growth, Bitcoin's market cap becomes its own unique edge. One simply cannot transfer significant amount, say tens of millions of dollars, easily in any other crypto currency.
The cost of energy is minuscule compared to alternative means of achieving the same: vaults, guards, banks, lawyers, etc.
Is it though? Gold in vaults easily outstrips the value assigned to all bitcoins and I doubt these vaults use even 1 Twh/year. Vaults are only environmentally expensive in construction. And since we have a surplus of vaults and bunkers (from digitization of stock trading and the end of the cold war, respectively), the only cost is protection. A few guards and some cameras and high security doors can protect >$10mio worth of gold, probably not using more energy than a few households. Managing a farm of ASICs for Bitcoin generating that amount is probably more labor intensive.
That's only because Bitcoin is still relatively insignificant blip in the world of trade, mostly a pastime for gamblers and scammers. It's footprint is actually absurdly huge compared to value it provides.
The real problem is scaling. Vaults, guards, banks, lawyers scale somewhere around O(n) to O(n logn) with the size of the market. Bitcoin's proof of work - the means of securing it - scales, to the best of my understanding, as O(n!) with the number of miners. That's not something you can run a global economy on.
On the contrary: the purpose of private banks is almost exclusively for billionaires to move their wealth around, while externalising costs to all of us. Many financial market interventions in the past are the society bailing out billionaires who bet irresponsibly and cannot bear reducing themselves to millionaires.
Compared to a free domestic ACH or wire?
Internationally you have to pay exchanges on the receiving end >1% fees to convert it to something you can actually spend.
I'd guess you'll lose far more than doing the same with gold, because the market slippage due to lack of liquidity far exceeds the cost of those vaults, banks, and guards.
A trade of $10M, or 1250 bitcoins, would move the market by 6%
I agree with some of the sentiment of the article, bitcoin's energy consumption is something to keep an eye on and if we can seamlessly move to an algorithm that's greener then so be it but you have to realize the tremendous amount of good that bitcoin is doing for the world and will likely continue to do as it becomes scarcer and scarcer, don't knock a technology that can single handedly lift a continent like Africa out of poverty.
*edit: Nothing like defending bitcoin on Hacker News and getting downvoted to oblivion, hey rather than downvote why don't you point out exactly what you disagree with so we can have a discussion
The Bank of Canada found that a Bitcoin based economy would have the same amount of drag as a 48% rate of inflation .
A 2% rate of inflation is trivial in the near term, and in the long term encourages productive allocation of capital. Inflation literally only matters to people sitting on cash -- and that's the point! If you invest it in anything inflation stops mattering and the constant-dollar return starts to matter.
"If you have cash, you should gamble it by investing it in stocks or business."
but that's risking the money I earned. I don't want to risk it, I earned it, I just want to save it and not have it evaporate over the years.
We at least know the names of big corporations. Otherwise "we're forced to play the BitCoin game which just consolidates power to big anonymous holders and leaves a lot of people all over the world left behind".
85% of the BitCoins have already been mined. It's beyond the reach of people to participate in mining. What's left is pure speculation, based on the available supply. There's also a "culture" of HODL which means the actual exchange rate is determined by very few (big) sellers.
Wouldn't it be better if your money (that was BitCoin <sic>) increased 2% a year instead of decreased 2% a year?
Countries that don't have reliable forms of currency also don't have reliable power or internet access.
Yes, the causality of "create too much money -> inflation" is plausible (but note the emphasis on "too much").
However, we live in a world of endogenous money, where money is largely created by commercial banks in the form of loans to private entities. When prices increase, those loans get bigger. So there is also the causality "inflation -> create more money".
At the same time, there are other factors that can drive inflation, such as workers and companies exercising price setting power (which Econ 101 likes to pretend doesn't exist, but plays an important role in the real world).
So yeah, the causality that you're casually throwing out there hasn't actually been proven as the driving factor here.
At the same time, the widespread belief in it and similar misunderstandings causes us as a society to make extremely damaging macroeconomic policy decisions, in particular the decision to attempt to fight recessions using monetary policy instead of fiscal policy.
We had 4 years with 4x the reward, 4 years with 2x the reward, and about 3 years with the current reward, which makes for 1/(4x4+4x2+3) = 1/27 inflation.
I agree the infrastructure isn't there yet but problems with national currency is a government issue, infrastructure issues can usually be solved but governmental issues tend to be a lot harder and all countries that rely on fiat currency are subject to inflation
You can tell that Bitcoin, and its advocates, are from developed countries. No one who has lived in a developing country and seen crushing poverty would make such arguments.
The bitcoin guy is not going to accept 1 Zimbabwe dollar to 1 USD any more than your black market dealer who has USD. The real currency conversion rate is the problem, not the act of obtaining actual hard currency.
yes, there are a lot of fungible ways to transfer hard currency over the internet... once you acquire it.
again: acquiring it is the hard part, because nobody wants to trade a zimbabwe dollar for a USD.
Bitcoin does nothing to help your zimbabwe dollars be less worthless than they are in USD, therefore they don't help the currency conversion process at all.
I might order a raspberry pi from The Pi Hut and a hammock with 50% off for paying with BTC at another site.
Many server, VPS and web hosting services accept Bitcoin.
You can buy giftcards for many sellers with Bitcoin.
And there are Bitcoin-funded debit cards.
there really aren't any significant (legal) north american/european transactions that occur in BTC
You say pointless computation. I say layers on layers of security protecting the most sound monetary policy in human history
Think about it from the opposite direction: trust is a ridiculously effective optimization of group dynamics, and humans come equipped with it by default. It allows us to engage in trade and cooperation without paying the cost of perfectly, mathematically, enforcing the rules. It takes a problem that would be O(n!) and reduces it to something on the order of O(nlogn), at very little loss in the optimality of the result. Taking this shortcut is a no-brainer, it would be immensely stupid not to do it.
It so happen that historically, we took that trade-off and built a civilization on it. It worked well. It works well*. And what bitcoin does is trying to make our economy run on O(n!) overhead, because some individuals think that a political ideology based on not trusting other people is somehow a good idea.
That's a political opinion. But regardless of its validity, I'm not convinced that this justifies a single Bitcoin transaction producing as much CO2 as 700,000 Visa transactions.
A Bitcoin transaction on the blockchain is layer 1. A visa transaction is layer 3 or 4?
Lightning network is layer 2 and you could have >700,000 transactions in a lightning channel before settling on chain, so there you go Bitcoin layer 2 is more energy efficient than the common financial system layer 4.
I hope we recognize this rather sooner than later, such that we can stop wasting so much energy.
They are. How else do you think miners pay for their electricity? And so far it seems like the users are happy to pay what it costs. The fact that you don't see the benefit doesn't mean there isn't any for them.
If we assume max 7Tx/s 1 block can hold 4200 Tx
One block gets the miner 12.5 BTCs that's a 0.003 BTC "subvention" per Tx that would otherwise have to be pais as fee.
In other words the cost is paid by inflation which hurts most who holds and not who uses it.
People don't care about a little inflation because the price gains where way way over that. But in the long run this system can not work. Every halving requires the BTC price to at least double (assuming the same mining cost). Problem is mining cost goes only up the halving is finite it goes to zero blockreward. Since the price can't go to infinite it's obvious that this system has to crash at some point we just don't know when.
And mining costs have gone down before. It's when bitcoin's price falls making mining unprofitable, so some miners stop, which lowers the difficulty, which makes mining profitable again at lower level - mining costs decreased to match the price.
That true, mining cost can go down and it did but in the long run it can (must) only go up.
If we assume after block reward is gone or very low, fees pay miners less so most miners stop and difficulty is adjusted then we have a imminent 51% attack risk. Low difficultly, bankrupt miners, mark flooded with cheap mining hardware and suddenly drooping energy prices are the perfect conditions for such an attack. Once attacked the price drops pushes more miners out of business and attacks are even cheaper. A crash is inevitable.
And no, it's not word juggling, the value of money comes from the people who exchange things for money. Here they exchange either electricity, or USD for it. Miners are paying their bills by selling virtual tokens, if those tokens didn't have any value for anybody, they wouldn't be able to sell them. Whether the token comes from block reward or transaction fees doesn't change anything on the fact that somebody gave up USD to get the token.
> Bitcoin pays itself by "printing itself"
Kinda ironic now after FED printed more money in one week than the whole Bitcoin economy is worth. I'd rather have the printing controlled by math, than any person.
You don't seem to understand where the value from new minted BTCs comes from.
How they are exchanged is completely irrelevant. Mined BTCs change the supply and that changes the price of all other BTCs. Any additional BTC makes all other BTCs a little bit cheaper/less worth. And that is where the value form the new BTCs come from.
Printing controlled by math avoids hyperinflation like I said above. Printing isn't the problem, that the printing stops is the problem. Or that the whole system was self fueling in the first place.
Only suckers take positions in a rigged game, short or long.
> Kinda ironic now after FED printed more money in one week than the whole Bitcoin economy is worth. I'd rather have the printing controlled by math, than any person.
Obviously that math is defined by people, so you're just pointing at it and pretending otherwise. The Bitcoin Core team can just change the printing rate any time; their lack of action is defacto action. Rather than an elected group of economists you've got a bunch of un-accountable, un-elected people with zero experience in the economics space shooting from the hip.
I haven't checked the math, but this article says the block reward is ~$45 per transaction, vs ~$0.70 in fees:
If that is the case, it seems likely there will be a devastating crash next time the reward halves.
Price is measured in USD and USD is inflationary so its purchasing power drops and BTC needs double the purchasing power not double the USD "value number"
The reward being constant would in the long run reduce the margins used as profit but also stop the re-investing of said profit to creating new hardware (ASICs) etc. That would stop or slow down the growth of hash/energy ratio which would make 51% attacks cheaper over time if we assume all other hardware on this planet keeps getting better and more.
Also keep in mind that BTC "only" doubling ever 4 year would significantly under perform most peoples expectation so if it's even lower, interest probably goes down rapidly as well which could trigger the collapse.
With speculation on currency (it's the primary use of Bitcoin) and theft - the latter less so, given the very high centralization of hashing power, but it was and still is common for a wannabe Bitcoin millionaires to run mining software on computers and electricity they do not own or pay for.
Define “common” and provide sources for your claims please.
Energy consumption would be dramatically less if ASICs weren't a thing. In hindsight it is obvious they would be built but give me a break.
What they accomplished was a decentralized balancing of power based on economics, crypto, and distributed computing. It is beyond remarkable.
So tell me, what is the carbon footprint of FedNet and all of the banks clearing the 3,000 tx/s demands and their collective datacenters...
What, you thought what we had today was free?
Are you aware that these numbers shared are not even 1% of the worlds consumption of energy or a quarter of what the us alone uses in merely datacenter costs!
I hate these fud charged articles with no balance, basis, or actual science.
(a) whataboutism is a logical fallacy.
(b) If every Visa transaction took 625kWh, it would use 38X the entire world's power generation capacity and 3X the worlds entire rate of e-waste generation. Just Visa, not MC, UnionPay or Amex. Visa is literally 700,000X more efficient, and getting more efficient as technology does. Bitcoin becomes more wasteful as technology improves.
> I hate these fud charged articles with no balance, basis, or actual science.
A study from Cambridge University backs it up and is linked. Just because it doesn't agree with your preconceived notions doesn't make it "not science" all of a sudden. You could just be wrong.
This isn't whataboutism. There is a system being used. Contrast it with what currently exists.
> Bitcoin becomes more wasteful as technology improves.
You misunderstand hashing difficulty.
This guy is a known troll spreading FUD. Look at all of the links he has posted. It is not science.
Stop embarassing yourself and read a layer deeper into the people writing the articles.
Koomey says that de Vries’ work is “fundamentally flawed” because it backs into bitcoin’s power consumption by estimating miners’ revenues and expenses. “Any time you do that, you introduce multiple layers of error and uncertainty. It’s a completely unreliable way to do the analysis, and no credible energy analyst would ever do that.”
But of course you prefer this digiconomist spewing FUD as a hobby and winding folks up:
"Digiconomist's index has emerged as something of an authority recently. The index was developed by Alex de Vries, a 28-year-old consultant for PwC with a background in data and risk analysis who now specializes in blockchain, the technology that underpins bitcoin. He founded Digiconomist as a hobby in 2014 and acknowledges he has no previous experience in energy economics"
I thought the world would switch to proof-of-stake coins and gradually make bitcoins harder to use.
if proof of stake were implemented with the same security guarantees as proof of work, the bitcoin utxo set would be migrated over to it.
Ok bad example because the soviets weren't known for their environmentalism, but you get my point. Once a problem becomes big enough scale that it affects us all regulation is justified.
The disconnect in people's mind on this question seems to be motivated by either their ignorance or their biases.
I dunno why anyone still has faith in eth as a concept, it's a garbage programming model, it's a garbage developer, who has failed for an inordinate period of time as measured by the crypto community. he's just trying to pump up his holdings.
(many of these deficiencies would have resulted in monetary losses for the developer himself, had he not used his central authority to roll back the blockchain. Literally anti-"crypto as a philosophy". So much for "code is law" and all that.)
He's 2 years beyond his 2 year worst case scenario and he has zero progress. And in the crypto community 4 years is a ridiculous period of time to be behind schedule. It's time to state the obvious: he fixed the broken script model that Bitcoin refused to fix, but he is incapable of adding anything significantly novel.
4 years of failed promises? With at least one rollback from a central authority? time to look elsewhere.
Otherwise, the obvious question: where is the Proof of Stake that he promised literally 4 years ago? How many more years out is it right now?
(nor is the "never increase past X amount of currency" even a good model. real currencies need to match issuance the amount of demand for currency... potentially even negative at times. And someone needs to do that. Otherwise, the currency will be subject to a wild amount of inflation/deflation... just like all previous hard currencies.)
Gosh, we could call that a "central bank". And electing an unresponsive 17-year-old as central banker is just about as dumb as it gets.
He is already making central banking decisions... just ones that the majority of the community (ridiculously) agrees with (throttling the amount of currency issued) because the community is centered around deflationary gold-bugs rather than actual maximalists.
But that's just me.
Note the very, very different scale of those charts.
With proof of stake if you get out of the bunker and are presented with multiple competing chains - you can’t decide which one is genuine and which is a malicious fork. With proof of work it’s trivial and that’s where value comes from.
maybe you're fine with that, i'm not and everybody who values bitcoin aren't either. it's the kind of thing that PoW solves and PoS doesn't. every PoS system i've seen just obfuscates this glaring hole instead of admitting that there's no way around it - you can't know which chain is genuine without trusting third party. in Bitcoin you can, or at least it is trivial to detect when something malicious is happening. and i'm not talking about correctness here, correctness is trivial, you don't even need to bring it up.
It's not like your node would copy their validation and just agree with what they agree. Every node always enforces all the rules. So your node checks if a Tx is valid anyway and if you get invalid Tx from a node you trust it wont make your node accept that Tx. But it should make you overthink whether that node is trustable.
Trusting nodes is a "reliability rating thing" it doesn't really affect the consensus decisions because Tx are either valid or aren't.
The consensus that must be found is only about the order of Tx. If the majority of the validators say Tx X was first and therefore Tx Y is invalid (attempt to double spend) but your node got Tx Y first then its totally fine to flip the order of these two since both are valid just not at the same time.
"Voting" which nodes you trust means you trust them to be reliable/fast and not controlled by a single entity or controllable by a single entity (gov.) So with a clever trust list you help decentralize the network and help that the network runs on the most reliable nodes. You don't change the rules or allow other to change the rules. You can even make mistakes. You can choose some nodes that turn out to be not reliable/fast or even actively malicious. It has no fatal effect and can be corrected as soon as it is detected. Only if everyone would select over 20% "bad" nodes it could halt the consensus. Still would not allow a single false Tx or a single Tx reverse. It would just stop until some nodes remove the bad actors form their trust list.
As your quotes says "...run by different parties who are expected to behave honestly most of the time." The "trust" you give them is very very very limited.
because i don't want to trust anyone. XRP is not trustless or decentralized enough.
> Every node always enforces all the rules. So your node checks if a Tx is valid anyway and if you get invalid Tx from a node you trust it wont make your node accept that Tx.
as i said - validity is trivial. i asked you to not bring it up but you did anyway.
> majority of the validators say Tx X was first
"majority of validators" is not something you can reliably even define for yourself because you don't know which parties have colluded with each other. this consensus model fails on every layer.
> Only if everyone would select over 20% "bad" nodes it could halt the consensus.
i don't care how small you think this problem is. i want to never rely on having to select "correct" validators to ensure my financial future isn't at risk.
i want universally objective measure by which i can compare competing chains. if your protocol doesn't provide it without having to trust third parties - it's a failure.
And yet you trust the Internet to get packets to HN. You trust the government to administer the roads, the schools, the army, the police, the firefighters, and so on for days. The FDA to verify your drugs, Agriculture to verify your food.
You trust so many people every single day to make it through from breakfast to dinner, and yet this is where you draw the line for some reason you can't really quantify.
Yes, that’s where I draw the line today. Governments used to challenge our right to free speech and even right to live free - we don’t accept that anymore. In my opinion it’s time to untangle governments and money. You’re free to disagree of course and you’re free to entrust all sorts of strangers to make all sorts of decisions in your life, just don’t expect others to do the same.
You already do though. You're just entrusting a different set of un-elected un-accountable strangers with no economics degrees with your monetary policy -- the Bitcoin Core team. And the PRC where over 50% of the hash power is located. They could change the number of Bitcoin on issue, the rate, the block reward rate, anything, with zero recourse on your part. Your government is accountable to you, the core team, to themselves.
If you tell me they wont then you're trusting them not to unless you can point to a math equation preventing them, I guess.
You're describing a libertarian pipedream that can't exist.
no i don't. they just happen to maintain the reference implementation.
> And the PRC where over 50% of the hash power is located
no trust involved here either.
> They could change the number of Bitcoin on issue, the rate, the block reward rate, anything, with zero recourse on your part.
no they can't and the fact that you think this means you have zero understanding of how bitcoin works.
> If you tell me they wont
i'm telling you they can't. bitcoin is defined by consensus rules and releasing a binary that breaks those rules or mining blocks that break those rules doesn't change bitcoin.
You can very reliably define the "majority of validators" its defined as 80% it doesn't matter if or how many validators colluded. If Tx X was actually first but Tx Y reaches majority this simply means that either Tx X was not relayed fast enough to all the nodes OR it could mean that a lot colluded nodes voted for Tx Y.
Either way the consensus can "fail" because of technical reasons (slow relaying) or "fail" trough colluded nodes both "fails" do not lead to changed rules. No invalid Tx can happen this way. No Tx can be reversed this way. The whole situation can only ever happen if 2 Tx are valid signed but try to send the same funds (double spend attempt) and are inserted into the network nearly at the same time. Only one Tx will be processed. Enough colluded validators could effect which one but its completely irrelevant. Who cares which Tx of a double spend attempt is processed?
If you try to pay 2 persons with 100 bucks each by placing just one 100 dollar bill on the table in front of them, you don't know which one is gonna pick it up but clearly you have not fooled anyone into thinking you payed both.
>i don't care how small you think this problem is. i want to never rely on having to select "correct" validators to ensure my financial future isn't at risk.
You completely misunderstood, you don't have to choose "correct" validators to make it work correctly it can only work correctly! Bad validators don't "hurt" they just don't contribute.
Assuming 50% of all validators are bad and suddenly start censoring Txs or reordering non final Txs that would have the same effect as if these validators would just shut down. It does NOT produce a wrong output. Worst case is that the network halts and that is wanted because if 50% go offline at the same time there is probably something seriously wrong like a global internet collapse. Something humans have to fix first before resuming.
>i want universally objective measure by which i can compare competing chains.
By "universally objective measure" you mean you choose the longer chain? Fully aware that this can later change? Whats point? Having just one chain that is final doesn't need "universally objective measure" doesn't need comparing and makes final a binary option instead of "final" but better wait some more blocks to be sure.
51% attack exists for all cryptocurrencies. don't try to substitute "colluding 51% of selected validators" with "colluding 51% of global hashrate", you're being disingenious.
i don't have any trust in miners, all they do is send me block signatures and if the signature satisfies proof of work requirements i can be reasonably certain one would have to burn some amount of energy to override that.
you on the other hand have to trust third parties to know which chain is the "right" one exactly because PoS lacks this universally objective measure that is PoW.
> You can very reliably define the "majority of validators" its defined as 80% it doesn't matter if or how many validators colluded.
80% of what? 80% of the couple hundred ips that i will send you as "totally not colluding validator nodes"? you can't even know who's online at any point in time.
> By "universally objective measure" you mean you choose the longer chain? Fully aware that this can later change? Whats point?
universally objective measure is proof of work. you can't fake it without burning similar amount of energy.
> Having just one chain that is final doesn't need "universally objective measure" doesn't need comparing and makes final a binary option instead of "final" but better wait some more blocks to be sure.
who decides what's final? how much does it cost to bribe them? how much does human factor matter? how do they know they have quorum to make such decision? what if there's a network partition and two quorums have finalized two chains?
that's the thing with PoS - it's politics based currency. we've had that for thousands of years. it's not like some genius read satoshi's paper and thought "hey what if we just kind of like vote on which chain is the right one and lets name it proof of stake?", PoS was known long before PoW, it just doesn't solve the problem that bitcoin solves, that's it.
Well I call that trust. You trust miners/mining pool operators to act by the rules.
And even if they do you still could be on the wrong chain because of network problems etc.
If you only see one chain you don't even know if there is another chain. Hence the waiting for several block for confirmation.
>you on the other hand have to trust third parties to know which chain is the "right" one exactly because PoS lacks this universally objective measure that is PoW.
Consensus isn't PoS there are no chains
You don't have to trust any third party you can run your own node and validate the Tx in real time and confirm everything yourself. If the network and your node node would "fork" you would instantly know something is wrong (most likely something with your node).
>80% of what? 80% of the couple hundred ips that i will send you as "totally not colluding validator nodes"? you can't even know who's online at any point in time.
Well how about you read the documentation? Why arguing with me if literally all you arguments just show that you have never read how consensus works but you still wanna tell me why it does not work.
BTW Validators use public-key cryptography to communicate with each other and they know exactly which validators is online. That of course doesn't help at all against colluded validators. But then again like mentioned many times now, colluded validators can not trick any node into doing something wrong. No matter how many. Literally all validators could not trick your own node into accepting a Tx that isn't valid or to revers anything. It's like if suddenly all calculators except yours would calculate some things wrong. As long as you use your own to verify results you can't be tricked.
>who decides what's final? how much does it cost to bribe them? how much does human factor matter? how do they know they have quorum to make such decision? what if there's a network partition and two quorums have finalized two chains?
The answer to all these question is literally the consensus algorithm. Please just go an read how it finds consensus. I can only give some short answers but to fully understand you must read the documentation.
>who decides what's final?
In short very simplified: Everyone who wants tells everyone who wants to hear, which valid Tx they would include in the next ledger.
Everyone listens to who they want to listen to and skip the Tx that aren't suggested by at least 80%
Everyone now has a bunch of Tx that they validated and they know most others agree on.
That's it. That's final. Skipped Tx will be proposed for the next ledger.
Since everyone can say whatever they want but also everyone can just ignore what you say, colluded validators can tell sh*t all day long. You could even spin up 1000 Validators (way more thane 80%) and let them all propose wrong Tx. No one would care because no one has a reasons to include invalid Txs ever. An attacker would need to collude existing validators that others already listen to. But as soon as they propose Tx that are not valid everyone would stop listen to them.
So you would need to collude over 80% of the existing validators then you could propose a wrong Tx AND reach 80% agreement.
Problem is all other not-colluded validators would simply stop and all nodes that validate Txs them-self like the node of an exchange or a node run by a bank etc. they would all stop as well because even majority can not overwrite their code.
You end up with a network of colluded validator that make forward progress but no one listens to them anymore. All the honest player have detected that something is wrong and halted after the last correct ledger.
Technically there is now a fork. One chain is halted and one is obviously wrong. Not exactly hard to pick the right one in this case.
>how much does it cost to bribe them?
Who knows? But how much is halting the network worth? It sure could cause damage (trades stop etc.) But it will not case wrong behavior so you can't exactly make money with this like with double spending. You could short and hope the price would drop because of the halt. On the other hand surviving such a large scale attack could also push the price way up.
The XRPL never halted but the XLM ledger did (not because of an attack) a few month back for like 2h. It has no visible effect on the price.
>how do they know they have quorum to make such decision?
They don't. Consensus is reached not decided see above and documentation. They only decide if a Tx is valid and they use math to do so.
>what if there's a network partition and two quorums have finalized two chains?
That can not happen because nether partition could reach 80% agreement.
The network halts in such situation for as long as needed rather than splitting.
>that's the thing with PoS - it's politics based currency. we've had that for thousands of years. it's not like some genius read satoshi's paper and thought "hey what if we just kind of like vote on which chain is the right one and lets name it proof of stake?", PoS was known long before PoW, it just doesn't solve the problem that bitcoin solves, that's it.
It's still not PoS why are PoW supported always coming up with flaws in PoS lol I already know PoS is flawed but so Is PoW.
this is the key thing you don't understand, i don't even need to respond to the rest of your message because of it.
with PoW even if i see only one chain i can absolutely objectively detect if something cheesy is going on by observing the difficulty of that chain. no network connectivity required. no comparison with other potential chains required. until you understand how is that different from PoS there's no point in discussing benefits and tradeoffs between these systems.
Detecting if something is cheesy in the chain is not enough. The chain you see can be totally fine nothing cheesy you could "objectively detect" yet the chain you don't see is longer and everyone will switch there. Your "objectively detected" nothing is totally pointless in this case.
Or what about Tx censorship. A valid Tx with reasonable fee isn't included because miners/mining pools colluded to not process that Tx. You objectively detected nothing because everything on the chain is completely correct. You can't detect what isn't there.
You still come around with PoS lol dude I never in the whole thread compared PoW to PoS. PoS is totally irrelevant. If it would not exist PoW would still have the same flaws.
No. No it can’t. No it can’t without somebody spinning up 100%+ more hashrate. And in PoS it totally can because there is no objective truth measure attached to it.
And again, 51% attacks are not solvable in principle and all your criticisms are basically “but what if your chain gets 51% attacked?”. Well duh, 51% attacked system gets destroyed, no matter if it’s PoS or PoW, the issue is that PoS gets destroyed in many more scenarios, not just the equivalent of apocalypse.
And you did bring up PoS multiple times. If you didn’t - we would t be having this conversation at all.
Thousands of years from now, when humanity builds its first Dyson sphere, I would like to believe the collected energy will be used for purposes like making everyone's life long and prosperous, or propelling great starships across the void - and not just to secure the Bitcoin network.
I mean, unless it's a dedicated power generating station, you're still using renewable power which is not used by someone else and overall we're supplementing that with coal and others.
Proof of stake doesn’t work and trust based models are the very thing bitcoin is designed to save us from.
If you have ideological bias here I won’t try to convince you, only time will.
Converted to Telsa Model S miles as per https://en.m.wikipedia.org/wiki/Tesla_Model_S
Comes out to about 2000 miles or 3200 kilometers for one Bitcoin transaction.
I have some rather left-leaning friends, vegans and all, who recently mentioned they were going to take a punt on Bitcoin.
Might have to show them this.
You cannot stop bitcoin.
Edit: You would end up burning even more if you tried to stop it.
You have to tax the clean coins too, otherwise buyers will just exchange dirtycoin for cleancoin before cashing out.
That said, it's not enough - because the market isn't some NP-complete-problem-solving magic oracle. It's just a greedy optimization algorithm. It's very prone to falling into bad local optima. We know that for a fact, that's the basis of most regulations around markets. Left unattended, the market would happily prioritize mining Bitcoin over producing food, as running Bitcoins in circles is more profitable than selling grain - up until there's an actual shortage of food and the market self-destructs.
You can of course tax the energy producers, but that does not prevent fraud on it's own - see oil tankers converting gas pollutants to water and causing even more harm.
Yes. "Clean/dirty energy" is a shorthand for clean/dirty energy sources.
> You can of course tax the energy producers, but that does not prevent fraud on it's own
Sure. Taxing emissions is a necessary but not sufficient component of a sane energy policy.
So how do you make sure you are not getting dirty energy ?
You purchase electricity with clean production guarantees.
That doesn't necessarily mean the electricity you use comes from that, or any, clean source, but that clean sources are used to contribute to grid supply equally.
If that's not actually happening then we can call that fraud, but that's a separate issue.
Are you claiming you were not aware of this?
In the spirit of Hacker News, would you mind expanding on why you believe that to be the case?
We’re generally concerned with comments being progressively more detailed as the discussion gets progressively more decisive.
> You cannot stop bitcoin.
See the way bitcoin works is anyone who wants to run a node on the network can just start without asking anyone for anything, or even letting anyone know they are starting.
There is no door you can bang on to stop new users from joining. There is no server you can bring down to prevent people from joining.
> It does not really matter if it's 2 miles or 2 million miles per bitcoin transaction.
This kind of comparison is flawed: Tesla was made for efficient mileage from electricity, but Bitcoin never aimed at transactions that require little electricity. You could compare an electric kettle to a smartphone and say that electric kettles are really bad because you could talk on the phone for 50 years instead of boiling water for some tea. ( If you don't believe me or don't get it, I don't have time to try to convince you, sorry. )
> Edit: You would end up burning even more if you tried to stop it.
Based on the above and other properties of bitcoin, it would not be cost free at all to try and stop it. I am convinced that the costs related to attempts to stop bitcoin would be much higher than the costs required to leave it be.
> We’re generally concerned with comments being progressively more detailed as the discussion gets progressively more decisive.
Yeah I'd too appreciate if the debate here was more than yeah just tax it bro, they gotta cash out bro
If you actually cared to check  you would see that this claim is coming from estimating mining revenue and then sending 60% of that revenue to mining costs.
That calculation is actually:
Mining revenue(in USD) * 0.6 / 0.05 / amount of transactions = KWh per transaction
And all of the 80704290.84 Petaflops, consume 73.12 TWh to repeatedly calculate SHA256 ! What could be the world's most powerful network does absolutely nothing but crunch hashes billions of times to discard almost all of the results anyway. Sheer waste of computing power.
There is simply no other known way of implementing a decentralized, censorship-resistant, robust digital currency. Without PoW you lose one of these properties.
Proof-of-stake doesn't work. It isn't robust. Eg. PoS cryptocurrencies can't resolved which chain is correct after a network split. There are many other unsolved problems. That's why Ethereum is years behind schedule in designing and deploying PoS.
Replacing PoW with a useful algorithm (eg. protein folding) loses decentralization (a central trusted authority must verify/sample who performs the work correctly).
Trust-based systems (Stellar, Libra) lose censorship-resistance.
A "dumb" PoW is literally the only practical solution.
If the social benefits of a cryptocurrency are worth the computational power, and if PoW is the only technical solution to implement it, then by definition PoW isn't wasteful.
It's comparable to what a single hydro dam like the Three Gorges Dam can produce. Don't fall prey to the scary comparisons BECI employs to mislead its readers.
Global warming is critical, but there are other energy wasters much, much bigger than Bitcoin miners.
Besides, as it's been said many times, miners tend to use renewables since they have become cheaper than fossil fuel power plants. A recent paper by Stoll et al. estimated CO2 emissions as being comparable to what a single city like Las Vegas emits: https://mobile.twitter.com/zorinaq/status/113943906857019392...
Which happens to be one of, if not the largest hydroelectric dam in the world.
> Besides, as it's been said many times, miners tend to use renewables since they have become cheaper than fossil fuel power plants.
Which means that this renewable energy is no longer available for other uses.
And the global warming argument is a many times debunked hoax - if anyone has better use of that electricity, they are welcome to use it, which will make mining cryptocurrency unprofitable. Except in the other cases, the benefits go to the single entity that owns the business, whereas with cryptocurrency every participant benefits from the stronger network. Global warming is caused by using fossil fuels to make electricity, mining crypto doesn't require fossil fuels. There are other ways to make electricity, let's focus on them.
I'm sorry, but you got this backwards. If bitcoin becomes a relevant part of the world economy, then it HAS to use a relevant part of the world energy, because consuming energy for PoW is the only limiting factor against a 51% attack. So, either Bitcoin is irrelevant - and thus its power usage is a literal waste - or it's relevant, and then its power usage has to become relevant in terms of global warming.
51% attack, double-spend to get free electricity.
This is useful even when it makes an apparent loss by damaging trust in the currency: If you are, say, the USA president and you’re at war with Iraq, and Iraq uses bitcoin, you can outspend on energy until they surrender.
Unless the whole world uses bitcoin, but then the first few nations individually face the same problem, regardless of who else actually uses bitcoin — gotta keep the USA and China happy at the same time! (The EU isn’t integrated enough to do that sort of thing yet, but is a similar sized group).
Right now, 51% needs the cost of one very large power station from when you start until when you win — large nations, the sort with global ambitions, can spare a lot more. In the previous example, that’s close to all the power Iraq produces, but 5.4% of the USA’s output.
Then there’s the fact that most countries like being in charge of their own currencies as the ability to create or destroy units is a useful economic lever.
> The fact that miners are now mining, means it's currently most rational to do that, given what society (users, participants) are willing to pay for the services.
Or it’s speculation, like so many other things before and probably yet to come.
If you have unlimited money then yes. If you devalue your money every time you try to outspend more then no, since you're actually bleeding money.
You cannot simply throw more money at mining, the difficulty adjustment would destroy you very soon.
And 51% attack has the designed side effect that all other people stop using the currency - they may keep following the previous fork without the double-spend - as shown by ETH and ETC. You'd also need some way of forcing all participant to stay with the now corrupted currency. Otherwise the attacker who performs 51% attack will gain the ownership of a network that immediately becomes completely worthless.
That’s my point. That is literally the point. That is why it is a bad thing and why no sane nation would ever allow it to become their main currency. It is an attack surface. It is a vulnerability to your economy.
I see no benefit in a decentralised currency: gold is one (anyone can mine it) and there’s a reason we moved away from it.
I don’t buy that bitcoin is either decentralised (they who control the algorithm steering committee control the currency); trustless (why should I trust irreversible transactions? Why should I trust those who wrote my wallet? Why should I trust those that wrote my mining app?); nor robust (the domain of money is law, not logic, so always subject to government interference; the price is currently highly volatile; and apps always have bugs yet to be discovered).
And I'm sorry, I won't address your other points.
Let’s say I buy a widget. How can I trust that the widget will arrive? That it will do what widgets do? That it will not break? None of these are payment issues, but they might call for a refund. How can I get a refund? How can the refund system be resistant to abuse?
The answers we currently have are “the law”. If the law functions, I don’t need a trustless currency.
Where can I get best details on this? Which papers? Thank you!
Bitcoin processes 10 million transactions a month (300k/day) and it's generally been growing over the years: https://bitinfocharts.com/comparison/bitcoin-transactions.ht...
Then Ethernet came. Anyone remembers the dumb hubs? when a computer wanted to send a message, the hub actually broadcasted it to all computers in the network... so inefficient, and yet, it served its purpose.
Later, came the network protocols. There was this protocol used for discussion groups/news, remember NNTP? wasteful, because nodes had to download / replicate the full history of posts. But still... served its purpose for its time.
Then came a messaging protocol, SMTP, very useful for sending "electronic mail", very convenient. But people started sending binary data files on it... by converting it to text (UUEncoding anyone?) so wasteful and inefficient. But it is still being used.
So, bitcoin for me is just that early system, that early test that shows a way to do decentralized, censorship-resistant, digital currency. Humanity will find more efficient ways to do it (and maybe they won't be used, as with Email) or at some point in the distant future, the power side of the equation won't be relevant (renewable energy? nuclear? who knows). But for me, that does not change the fact that bitcoin proposition is a stepping stone for society that sooner or later will change the way people transfer value.
Zawinski's law of software envelopment (also known as Zawinski's law) comments on the phenomenon of software bloating with popular features:
Every program attempts to expand until it can read mail. Those programs which cannot so expand are replaced by ones which can.
They are not.
But they aren't, and the whole exercise is comparable to trying to repeatedly solve ever-larger NP-complete problems by brute force. Something no technical person in their sane mind would consider a correct course of action.
And just like we use good enough polynomial approximations to get near-best solutions to NP-complete problems, we can do the same for running economy. Trust is not a liability. Trust is what makes economy efficient.
The bitcoin network asics reach exactly 0 petaflops. Why? Because they cannot do any floating point operations. They can literally do just SHA256 hashes, nothing else.
The "worlds most powerful network" simply cannot do anything else than this. It's effectively just an expensive set of electrical heaters.
Just because it's a higher number, it doesn't mean it's equally useful.
Can't we all just agree that what is a valuable use of someones watts or petahashes per second is a subjective choice? That people are free to value their resources as they see fit? You personally might not value securing Bitcoin network, but many other people find it valueable and it is perfectly fine in a free country to allow them do what they please if you are similarly allowed to do what you please (no one forces you to buy Bitcoin miners)?
The problem is the impact these things have on the rest of us when we ourselves have no interest in bitcoin.
If bitcoin existed purely inside a virtual world — say, if coin miners were a virtual good that WoW players could buy which made WoW money appear in their inventory according to similar rules but without the actual hard work of computing anything beyond a lightweight O(num_players) random number generator on the server, then it stops being anyone else’s problem.
I am pretty sure that the best consensus the western world has come up with is that if there are any externalities, they can simply be taxed in like for example a carbon tax. But telling other people what they should and should not find valueable as if you have some sort of ultimate authority on knowing what is valueable, well, I hope you can already see what is wrong with that. Value is subjective. As in, other people have a right to decide for themselves.
Yes but too little to bother about. Transportation and inefficient heat management are the only common ones that matter.
> they can simply be taxed in like for example a carbon tax
On that we agree. I believe car fuel is taxed appropriately in the UK, but in general these externalities are not properly accounted for. If they were, it would be a different matter, but they’re not.
Also christmas lights do consume huge amounts of electricity comparable to energy budgets of some countries. https://www.igs.com/energy-resource-center/energy-101/how-mu...
Thank you for the link, I will now update my world model to include that data.
- A single bitcoin "transaction" can actually have thousands of inputs and thousands of outputs. So energy "per transaction" or "transactions per second" is not analogous to a typical monetary transaction.
- Bitcoin does not compete with literal credit card transactions (although some use it like that today). I'd compare Bitcoin on-chain transactions with how nation-states settle their central-bank ledgers with gold. Gold is the best comparison to Bitcoin because trading in hard gold is "final". Credit card transactions happen on a higher level in the financial stack. As does cash. As do bank transfers. All of these bubble down into interbank transfers that eventually settle on the base layer of central banks. So compared to shipping and securing gold, Bitcoin is quite cheap!
- Adding to the above point; if Bitcoin succeeds in beind "adopted", it would not mean we no longer use credit cards. Credit cards would just port their underlying mechanism on top of Bitcoin instead of fiat moneys.
I’ve been long on Bitcoin, but I am exiting my position over concerns about the environment impact. I don’t think it’s plausible that a proof-of-work based blockchain can be anywhere near as efficient as centralized ledgers are. If any of the proof-of-stake based solutions ever gain traction, maybe I’ll participate in those.
Yeah, no one ever claimed that they would be more efficient. If you have invested assuming the efficiency is the main goal, you have been misled. What they do provide is efficient decentralized ledgers, which is a whole other game completely.
I haven't heard the tagline "Bitcoin - it's cheaper than moving around gold on warships" yet. So far, Bitcoin has always been advertised as a new form of internet payment and a new decentralised currently for everyday use.
It's also the very point of cryptocurrencies that there are no intermediate agents, like central banks that could make up the lower levels of your stack.
So the usage patterns that Bitcoin was marketed with absolutely put it in competition with visa transactions.
I wish it were labelled cryptoasset instead of cryptocurrency.
In the long-term, the objective nature of Bitcoin should prevail and we'll assess its benefit by whether it is a successful store of value.
Example that leads me to believe central banks still settle gold: https://www.bullionstar.com/blogs/ronan-manly/bank-of-englan...
People don't need to stake money, just create a multisig transaction with a peer and having a transaction signed by the other peer to get their money back when they want to close the lightning channel. They can get extra fees for enabling transactions, though not that big amount.
Not to mention, a single transaction can power an infinite amount of (wash) transactions thanks to 2nd layer stuff like the lightning network. So it'd be similarly misleading to try quote in terms of that.
So the correct unit would be power usage, per block or time unit.
I get what you mean, if you decide not to make a transaction, the energy still gets spent but the more you use bitcoin the more valuable it becomes which incentivizes miners to keep mining. Also someone elses transaction will just slot in to fill the gap left since there is a very limited amount of space for transactions which is always fully utilized.
With enough people using the second layer network, each "settlement" could mean finalising hundreds of transactions for thousands of people. This second layer network acts like a caching layer, and consolidates many transactions into a single transaction (put into very simple terms).
 Combinations of inputs and outputs.
If each block takes 10 minutes, and the miner network indeed draws 73 TWh each year, then that works out to ~1.4 GWh per block.
See Ramez Naam (co-chair for energy and the environment at Singularity University) for more on this friendliness to proof-of-work. This is a good intro: https://www.preposterousuniverse.com/podcast/2019/09/16/64-r...
1. Calculate total mining revenues, across all miners in the Bitcoin network.
2. Estimate that, on average, miners spend 60% of their revenues on electricity. (I believe the origin of this number are the calculations in this paper ).
3. Find out how much miners pay per kWh on average.
4. Convert the costs into a consumption.
There is some discussion of the origin of the assumptions, and some criticism and validation here  and here  respectively.
Specifically, see the calculations using Antminer S9 in Table 2.
The amount of power used is proportional to the value of the reward for successfully mining a new block, which happens about every 10 minutes (12.5 BTC or about $100k).
If the value of BTC goes up miners will increase their spend and more power will be consumed per block mined, and if the value goes down so to will the power used.
Regardless of the power used for mining, there is a fixed transaction capacity in the network.
"Getting rich" at cost of the environment (extremely high resource consumption)? No thanks, I'd rather leave that world for future generations.
Greed creates waste in all venues.
We're talking about just keeping track of who owns what amounts of a commodity. That part is using terawatt hours per year! I am very doubtful that the "keeping track of who owns what amounts" part of the stock market is anywhere near that.
Determining who has the rights to make changes to what data, auditing changes, auditing ever-changing access control rights, systematically changing these rules to adapt to technological advancements, etc. is the function which Bitcoin accomplishes that you are discounting from your perceived cost of the traditional stock market.
Further, fiduciary duty of corporations to maximize shareholder profit has led to almost every environmentally harmful exploit of externalities. I'd argue that the stock market is fundamentally responsible for 99% of all pollution.
Bitcoin does not eliminate the idea of fiduciary duty. Bitcoin holders still expect bitcoin loanees to trade and operate in their financial interest.
What is the emission cost of the system which enables this functionality?
bitcoin numbers don't include the off-chain stuff either, lol.
Bitcoin energy is literally expended on a massive, inefficient mainframe that processes a couple hundred transactions a second. That's all - everything else is additional to that.
Tens to hundreds of thousands of highly paid bureaucrats, accountants, risk managers, regulators, legislators, clerks, lawyers, law enforcement, judges, etc.
Obviously the purely digital systems consumes more compute, but I think you're discounting many of the true costs of the existing system.
If you think that tens to hundreds of thousands of highly paid bureaucrats, accountants, risk managers, regulators, legislators, clerks, lawyers, law enforcement, judges are there just to prevent erroneous trades...
It seems that you are discounting a vast amount of things that the system does besides preventing the execution of erroneous trade.
At least with bitcoin you could theoretically throw up a pile of solar panels and directly convert that clean electricity into money.
example: if you aren't getting X Mh/s @ $Y kw/h, it isn't profitable?
In other words, you should mine if you're in China where you can get those rates
you'll never find a systematic article on it, but these aren't the first or the last incidents.
they also pay much lower hardware costs than the US does, because it all happens off the books. Chinese mining farms with internal hardware/super cheap power are nothing new.
china doesn't and never has played fairly in terms of hardware or power costs. crypto as a whole has been embraced because it's a good system to move value past chinese capital controls, you just are getting your beak wet as that money moves.
just like those 2 million dollar houses in vancouver or whatever. Sure, it's great to be trading in that current, or providing property management services, or to be holding the asset as it's pumped up by that money moving under the chinese capital controls!
I'm more worried about humanity having a future.