1. Transactions won't change noticeably since the gas costs won't change and the network won't have more capacity.
2. The 'demand' from mining for GPUs is over-rated. It was a brief problem years ago. You are correct that energy usage for validation will go down.
3. One difference between bitcoin and eth... ethash is a memory hard algo so it doesn't require the fastest GPU. 4-5 year old GPUs are more ROI efficient. Everything is bound in the speed of the memory controller.
4. To be seen.
5. 'staking' today is just depositing ETH into an ETH1 contract that doesn't have a withdraw function. It will require forks to add that functionality.
6. Correct.
7. Correct. Although this likely won't have an impact on price like people think.
2) The latest earning from NVIDIA and AMD showed that about 30% of their GPU were to crypto miners, so no, the shortage was not an exaggeration and certainly not from many years ago.
The shortage was due to demand from people beyond mining wanting GPUs (including a new problem... scalpers) and there not being enough production. In effect, it was a manufactured shortage. There are a ton of articles that talk about all the aspects that went into the shortage and miners are definitely not the only reason. Easy scapegoat though...
Link #1 and #3 mention crypto as one of the causes of the shortage.
Like #2 is a statement by Nvidia who has a vested interest in lying, and has lied about the exact same issue so blatantly that they got fined by the SEC for it.
I just gave some random links I googled... feel free to keep digging, there are more that back me up.
You're wrong about scalpers too. They know the market... of course they know to prey on every opportunity.
Your 'evidence' is really nothing. That's a few thousand gpus... not that many, honestly. They are also not top of the line gpus... which gamers want to buy. older rx470 polaris class gpus are more than enough for large mining farms.
full disclosure: i'm a huge gpu miner, so i definitely have some experience in this area.
Then you have a vested interest in playing down the effect that this waste of energy bubble had/is.
> They are also not top of the line gpus... which gamers want to buy. older rx470 polaris class gpus are more than enough for large mining farms.
Way off the mark there, gamers not in the 1% don't buy top of the line GPU (as reflected in the Steam survey), they buy the budget to mid range price. When miners started buying GPU left and right in pallets, NVIDEA and AMD saw it and shift the manufacturing to the top of the line GPU where they have the highest margins even if the waffer would yield a lot less, because miners would buy them ASAP anyway. This reduced the amount of lower tier GPUs in the market.
Funny you mention the RX470, a GPU famously never in stock because of this dumb piramid scheme.
> Then you have a vested interest in playing down the effect that this waste of energy bubble had/is.
Nope, not at all. My business model doesn't depend on mining forever. I'm not playing down anything. I'm just saying that mining isn't the only reason (and at most 30% the reason) that GPUs were hard to find.
> Funny you mention the RX470, a GPU famously never in stock because of this dumb piramid scheme.
It came out 5 years ago and newer models replaced it.
>Scalpers buy up GPUs. There is less supply. That creates a problem.
Those GPUs are then sold immediately to real users. Scalpers do not increase demand.
Scalpers provide a service. They have automation or a way to buy stock fast at MSRP or closer to MSRP. Then they sell it to people who are willing to pay more in order to have the product now or avoid spending time to search for stock.
Scalpers cannot exist unless demand is greater than supply.
We are going to have to agree to disagree on this one. In the second link, it is in reference to tickets. At the end of the day, tickets are all the same. If you can't get the front row of the show, you'll accept something back a bit... because you want to see the show.
GPUs are different. Miners want specific brands and models and won't / can't accept anything else.
Still the same, the more GPUs are added to the network the harder it is to mine, the harder is to mine the more GPUs are added until it is no longer profitable, all this while drawing more power.
If you have a good understanding of ETH PoS perhaps I can ask this question.
The only issue I’m still confused about is the incentive to add hardware to the network. Obviously the network needs to be resilient to attack on consensus but it also needs networking and physical hardware resilience. How is that incentivized in the PoS?
The stakers have to perform consensus network and block building actions continuously online, or they are penalised by losing value from their stake over time rather than gaining it. The penalty is reasonable so a small downtime during updates and such isn't a problem.
This incentivizes them to have reliable networking and hardware, running 24x7.
However they are heavily penalised if they are seen to do things like double-voting by accident, so they can't just put up duplicate systems and forget about it. High availability failover is something they can only do carefully.
This is different from the current proof-of-work miners. If a miner stops or screws up, they won't gain mining fees during the stop, but they don't lose anything either.
I understand all that but what I don’t understand is what encourages more physical nodes with high quality bandwidth because it seems like if me and you both want to stake for PoS then we can even be better off sharing the same hardware and buying higher quality hardware than we could individually, and this is a sub-linear incentive which I would think would result in the physical hardware footprint significantly shrinking. Am I missing something?
Now you might say well isn’t that a good thing for less resources but without an incentive to decentralize physically won’t there be a risk of centralization and potentially catastrophic outcomes for the network?
One factor fighting against this is that the validator inactivity fees spike to be larger if a lot of validators are offline at once. So if you think all the existing validators are in e.g. AWS us-west, you are taking more risk by putting your validator in AWS us-west too, because your failures are more likely to be correlated with other validator failures.
> what I don’t understand is what encourages more physical nodes with high quality bandwidth because it seems like if me and you both want to stake for PoS then we can even be better off sharing the same hardware and buying higher quality hardware than we could individually.
For the same reason that there are a number of mining companies too. But you're right, PoS doesn't 'fix' that problem.
A common approach is staking pools, which incentivize decentralization for the greater good of the network.
One of the largest ones for eth and several other chains ($7B TVL) is LIDO, of which I’m an eth mainnet and testnet validator node operator. They distribute stake over many high quality validators and have very rigorous operational guidelines to ensure high quality operators only are allowed. I’m not shilling for LIDO but they are a very professional and well ran DAO that truly cares about what’s they’re doing.
One of the cool things they do is liquid staking. In most PoS networks, your funds are locked during a given time boundary, generally referred to as an Epoch. You start staking at an epoch beginning and can not access funds until the beginning of the next epoch. Validators are rewarded for reliably and securely (no double signing!) performing their task via staking rewards. Staking rewards are quite akin to inflation in more traditional monetary systems.
The staking reward is for collateralized validators only (a small % of the network)
Overall issuance can potentially be negative due to the burn effects of eip1559 - where the base transaction fee of an eth transaction is deleted from the network forever (akin to using oil/gas/petrol & then it's gone)
Exactly, it's my opinion. What's wrong with sharing my opinion? The whole purpose of this site is sharing opinions and points of view with others. Do you think I'm looking for comments written by you and posting "negative" replies? You're crazy.
5. Staking today also means you're running a validator on the beacon chain, and accumulating a balance that will be respected by the future withdraw function.
They decided to do proof-of-stake first, putting shards off until later.
Also it started looking like zkrollups could do everything without loss of security or convenience, and with way better scaling than they ever hoped to get with the original sharding plan. So they removed execution from sharding, using it instead as just data for rollups.
Then someone came up with "danksharding" which is more like a RAID system than actual sharding.
2. The 'demand' from mining for GPUs is over-rated. It was a brief problem years ago. You are correct that energy usage for validation will go down.
3. One difference between bitcoin and eth... ethash is a memory hard algo so it doesn't require the fastest GPU. 4-5 year old GPUs are more ROI efficient. Everything is bound in the speed of the memory controller.
4. To be seen.
5. 'staking' today is just depositing ETH into an ETH1 contract that doesn't have a withdraw function. It will require forks to add that functionality.
6. Correct.
7. Correct. Although this likely won't have an impact on price like people think.
8. A fork could always change things.