- cross-posted to:
- technology@lemmy.world
- cross-posted to:
- technology@lemmy.world
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Such a stupid fucking idea. The idea of cryptocurrencies aside, Bitcoin’s system of mining is peak waste.
It’s great that the idea got implemented in ways that don’t have the ecological footprint Bitcoin has!
I’m glad Bitcoin brought this idea to life. But it’s about time for Bitcoin to resign.Bitcoin isn’t a good idea. It’s based on assumptions about how the world works that don’t actually exist and, the costs for finding a solution to these assumptions are so large that they make the product bad.
I think Monero has use cases (besides money laundering). And Monero is basically what people who don’t understand cryptocurrency think Bitcoin is.
Buying drugs?
You already have booze, cannabis, caffeine, sugar, and Tylenol. How shit is existence that those reliable chemicals, safe in moderation, aren’t enough? Isn’t it insane that you can just drink pop with a whiskey chaser and smoke a joint?
Yeah I am solidly on the legalization train but I am still allowed to wonder why anyone would want to try meth or cocaine or anything like those when we got already is so much better and safer.
Now if you excuse me I am going to go drink a beer and then pop an edible, both of which I bought legally from boring ass stores.
Have you done meth? It may answer your question as to why anyone would do it.
I have not, I got legal weed and have seen what meth does to people.
I dunno, sometimes people want, say, hormones to transition, but can’t get them from a doctor. Hormone blockers, stuff like that, so it’s kind of not entirely useless. Weed isn’t legal in lots of places still either, and if your government sucks, it’s always good for buying [redacted], and stuff like that, but then you’re probably just getting entrapped by feds, so that’s not always a great situation.
I’m not going to say that the idea itself is entirely without merit, but I do think it kind of got corrupted almost immediately after it was conceived, because silicon valley keeps wanting to attract venture capital to fund whatever completely unprofitable idea, before it gets shelled out and zombified for short term profits, and apparently the best way to make any money in capitalism is basically just with loaded gambling and this is a great method to enable that. It’s a pretty good minor analogue for what capitalism does generally, but also what it specifically did to a lot of this techno-libertarianism idealism that was spouting out almost constantly form the late 80’s until, I wanna say like, around the 2010’s, is when it maybe stopped being such a thing.
I don’t think I was hinting at an opinion on the LGBT with what I wrote.
Yes
I beg to partly differ.
The idea of being able to transfer digital value safely without middlemen is great and has never been available before.
The implementation is bad in the sense that it’s ecologically disastrous and economically unfit.Bitcoin was developed on the idea that no one can be trusted and that everyone will act selfishly for their own self interest. This is patently not true, while many are selfish and are not to be trusted, a truly trustless society does not and cannot exist. People do come together and work in collectives and organisations and people do defer to the expertise of others. Imagine not being able to go to the doctor without first getting a medical degree because you can’t trust what the doctor will tell you or having to learn electrical engineering before having any electrical work done in your home. That is the ideology that helps spawn the no middleman trustless system that formed bitcoin in 2009. The truth is people don’t want to do that an the easy way to demonstrate this is to simply point at the huge amount of transactions that occur off-chain through exchanges (who serve as middlemen) vs the pitiful small number of transactions that occur on chain.
Trustlessness comes with huge costs. Firstly, you have huge amounts of redundant work to prove/verify everything. That’s why bitcoin is so terribly inefficient. Rather than having some you trust approve a transaction you now need to spend huge resources solving useless puzzles to prove that your transactions is the real deal. Secondly, without a middleman there is no one to hold to account. Make a mistake on your transaction? Your money is gone. Get scammed? Same deal. Accidentally leak your private key? Ditto.
Bitcoin is also based on the ideas of Austrian economics. Basically a ridiculous field of economics that doesn’t work. There are reasons why we left the gold standard and there are reasons why so called ‘sound money’ is a terrible idea. Just to simply illustrate. Bitcoiners love to celebrate the first transaction for real world goods using bitcoin. Some guy bought two pizza’s for 10000 btc around 2010 or something. They mock now for how much ‘money’ he wasted on two pizza’s. What good is a currency if you’re too afraid to spend it because its ‘value’ might skyrocket. In no uncertain terms Austrian economics is incredibly stupid. Bitcoin is built on this ideology.
Also Bitcoin is full of middlemen. Mining pools tend to congregate into large organisations lead by a small group of individuals due to economies of scale making larger pools more efficient than smaller pools and, because bitcoin has no real economy underneath it everything has to run back to fiat currency at some point. Whether you’re a baker or a drug dealer you have bills that need to be paid in fiat at some point; therefore, you need to exchange your crypto to fiat and, this is almost unanimously controlled by large exchanges who act as middle men. A big government like the US blocks the exchanges and bitcoin and crypto in general basically dies.
So in summary, bitcoin is based on the idea that no one can be trusted, which is false, that Austrian economics is a good idea, which is wrong and finally that it’s free from middlemen which it isn’t. The assumptions that made bitcoin are wrong.
It’s not that no one can be trusted. It’s that there is enough bad people and incentive to do real damage to everyone else (even the majority of good people) and unfortunately they may need to be protected from that. If we get another Great Recession that doesn’t snap back bitcoin will have its value proven, if that doesn’t happen then it’s a waste of time and effort. It’s really more of a hedge at this point until things play out
Here’s the thing – do you trust the alternative power holders more? Sure, it’s less centralized, but at the end of the day there’s still power brokers.
No not really but at least there’s transparency
Bitcoin tracks the wider economy and as a risky ’asset’ its ‘value’ fluctuates more aggressively than safer assets. It’s basically the first thing unloaded when times look difficult. Trust me it won’t be a hedge. It never has before and will never now. Secondly, the problem with centring your entire philosophy on trustlessness is that when you introduce a little bit of trust you defeat the whole purpose of trustlessness in the first place. The moment you have a middle man that can block transactions, change transactions or interfere in transactions in other ways your trustless model collapses, and if you argue that it’s alright this actor is well vetted and trustworthy then it begs the question. Why not have all of your transactions managed by that actor and just drop the vestigial decentralised nonsense in the first place. To illustrate my point for those who don’t understand what I’m getting at. All cryptocurrencies are useless at verifying anything in the real world. Think things like supply chain verification for example. Why? Well it’s all because of something called the oracle problem. You need somebody to verify and enter the physical world’s data into the blockchain, the oracle. The problem is that there is no way to prove that the oracle is telling the truth. You have to trust the oracle; however, the oracle can lie. The oracle and feed you bad data and modify the blockchain. Your trustless model has collapsed. You might as well just find an oracle you can trust and abandon all the wasteful blockchain nonsense at this point.
Bitcoin spiked when the latest banking crisis emerged and several US banks collapsed. This is not bitcoin tracking the wider economy. Bitcoin should track the wider economy only in a sense of cost of compute, electricity, against inflation and supply. Hypothetically if demand was to remain exactly the same for the next 10 years the price would increase.
So many words Bitcoin and so little about the idea behind it.
Are you aware that not each and every cryptocurrency that was created after Bitcoin is bad?
Although admittedly most are. Yet some took the idea further and implemented better versions of value transfer, that doesn’t rely on middlemen.The article is about bitcoin so I talked about bitcoin. But it doesn’t really matter because all cryptocurrencies are bad. They are all negative sum internet funny money that is used by and controlled by some of the people who you would least want to be able to do that.
You replied to my comment, which was broader than Bitcoin alone; you could’ve considered that.
Not all cryptocurrencies are bad in my book. Let’s agree to disagree.
So you’re basically saying that Bitcoin is the libertarian of currencies. Blech.
It’s such a great idea that a good use case for it hasn’t been invented in over a decade.
Its the same use case as cash.
If all money goes digital, you lose the ability to make unsupervised purchases.
Harr harr, yes drugs. But also condoms or plan b pills, which magically became a political target recently. Or any other previously innocuous thing that could someday shift into a political target.
That tracking also means anyone who buys that data can profile you. Card charges at the same store every work day? Someone who cares knows where you go for lunch. Maybe its a stalker, maybe just an advertiser trying to get you specific ads. Do you want either having that info? Buying the same specific goods for meals, or hobbies, on a regular basis? Ad companies love that, they can up prices on things your data says is a dependant purchase.
You dont want your entire purchase history trackable. Its not about having things to hide, its about not wanting someone to be able to pick you apart like a lab rat. Cash helps this, but lots of groups and people want a cashless society.
If cashless ever becomes a reality, you want a digital cash replacement to already be in place, if not underway. Better that the concept gets worked out now while we still have cash, than scrambling to set it up in a future where cash retires.
We already have cash, so as it stands, Bitcoin is far more complicated and energy intensive for no meaningful alternative reason. You’re effectively arguing the wrong point, and only skirt over the real concern: a lot of people and groups want a cashless society.
Is it worth it to use Bitcoin over cash, and generate emissions, to have that digital alternative to cash? What are the reasons that these people and groups want a totally cashless society, where it would be an onerous burden to just cash for drugs, condoms, plan B, etc?
Until there’s a compelling reason that is worth the energy draw and required technology, it’s going to continue to be derided.
“Governments and businesses are starting to push for retiring physical, gov backed money. Having a digital currency that cant be retired by a government is a good fallback plan to prevent getting stuck in a digital only system that doesnt have untraced currency.”
“Uh, but we already have cash? Why would I use that over cash, which I have right now? My cash buys me drugs now, why should I swap?”
I literally cannot help you if you cant address what I say.
You can’t use cash on the Internet. Has to be an account of some kind
If, if, if! But it hasn’t. So there’s still no real reason to use Bitcoin today. I’m glad the concept and ecosystem exists, it might come in handy, but there’s a shit ton of resources going to it, today so what is its social benefit today? Again I’m fine with Bitcoin existing, but if the only use case it’s being used for right now is illegal goods and market speculation, how does it warrant the insane amount of resources it sucks up today? If we end up needing it in the future we can ramp it up, but right now I think there’s way too much resources being sucked up by it for not enough societal benefit.
“Sure Ill be glad to vaccinate if I get covid. If, if, if! But I dont have it now! Theres no real reason to vaccinate now, I dont need it!”
The point of a precaution is to do it before the concerned event happens. And when multiple countries have politicians discussing cashless, and with actual businesses beginning to stop taking cash in favor of card, the advent of the retiring of physical money is an actual event that is visible on the horizon.
You will need the existence of fully finished infrastructure for digital cash before you can safely use it. We. Do. Not. Have. That. Infrastructure. If cash is killed next year? Youre fucked. We need to figure that out before we need it to be online and usable.
And while no, bitcoin specifically is likely not the answer, it is the reason why people are hunting for a better solution.
You just think that because you don’t use it lol
For a technology sub I swear most of y’all are tech illiterate
This is a news community lol. But I agree even over on the tech community the idiocy is pretty rampant.
Someone’s never bought drugs off the internet…
Just because you can buy drugs with bitcoin doesn’t mean that those two things work the same.
Did I say Bitcoin?
What a great reason to create carbon emissions.
Monero is ASIC resistant and therefore uses orders of magnitude less power than Bitcoin.
Monero is the only crypto I support
What an absolutely absurd waste of resources. There should be some sort of enforcement/restrictions of energy usage from these clowns.
Fuck stupid ass libertarian ponzi schemes
Up next: AI
That’s much more useful though.
We shall see. Meta, Google and Microsoft aren’t exactly spending billions of dollars on AI to make the world a better place…
They’re making it more efficient… to do shitty things like exploit people and steal their data
Pharmaceutical companies aren’t funding cancer research to make the world a better place either.
Should we debate whether or not a cure for cancer would be a good thing because of the profit driven motivation behind its development?
That’s a good debate topic, actually.
A subtopic should be about if pharmaceutical companies should use taxpayer dollars to research drugs that are used to make billions of tax free revenue. For better or for worse, those drugs might have the potential to save lives.
It’s a completely different topic about how AI companies are going to make their products more addictive and then use that influence to shift public perception. (Or, thet just use AI to find even more ways to shove advertisements down our throats. That is more reasonable.)
That’s a good debate topic, actually.
No, whether or not curing cancer is a good thing would be a rather poor debate topic. You are instead suggesting tangential topics around pharmaceutical research that are good discussion points, but separate from the broad question of if the things a for profit company produces are always inherently bad because of the for profit motivations.
It’s a completely different topic about how AI companies are going to make their products
This tells me you are completely disconnected from any kind of ongoing research right now, as the products being produced are actually having a pretty wild impact on research and we’re probably entering a new Renaissance because of them.
Yeah, of course Google is going to try to use AI to sell you shit. But they are also solving protein folding along the way and are producing AI that can translate the massive number of uncovered but yet untranslated historical documents in existence. Deep learning yielded a new class of antibiotics for antibiotic resistant infections just this past month.
In both the original case and the analogy we are still talking about technology that will save human lives.
And as we just saw with Musk’s Grok, sometimes the ways in which AI develops are at odds with the goals of the corporations creating them, and as Anthropic’s recent research shows, those initial inclinations are actually much more difficult to correct for than you might think.
Will corporations do their best to unethically profit off of advances? Of course.
But if you think that means the advances will be a net negative, I respectfully disagree.
This tells me you are completely disconnected from any kind of ongoing research right now, as the products being produced are actually having a pretty wild impact on research and we’re probably entering a new Renaissance because of them.
Oh, I am fully aware of what is going on with AI and what is possible with AI. We haven’t even scratched the surface with its development or it’s potential uses.
One thing I am pointing out is the layers of bullshit that are attached to AI right now. When this current bubble pops, and it will, the tech can be developed to its full potential after that. Right now, the market is 99% snakeoil. Just look at LinkedIn as a clear example. Everyone is somehow an AI expert now and every company is an AI company.
What I choose not to minimize is the unethical use of this tech by companies. The reality remains that Meta, Google and Microsoft will not profit if the world’s problems are solved. Their open research projects are great, a good tax deduction and may benefit millions. Unfortunately, I can’t help but quote Obadiah from Iron Man: “Tony, come on. We built that thing to shut the hippies up.”
While I paint a picture of an “AI Doomer”, I really am not. The benefits of AI are incalculable right now. Unfortunately, the risks are just as massive. Everyone just seems to be blinded by the “new shiny” and refuses to see any negatives… again. This makes the environment ripe for scams and deception.
When this current bubble pops, and it will, the tech can be developed to its full potential after that. Right now, the market is 99% snakeoil.
It depends on what bubble one’s referring to. The tech itself isn’t going to ‘pop’ - in many cases the capabilities will probably outpace the current promises given the compounding rates of improvement. This isn’t like past tech buzz cycles which is part of why there’s a lot of questionable predictions regarding it.
Yeah, snake oil bottom feeders will gravitate to any buzz they can attach themselves to. But the barnacles don’t steer the ship. The market of snake oil will dry up as it always does, but that’s largely because their primary industry is selling snake oil, not whatever they change the label to.
The reality remains that Meta, Google and Microsoft will not profit if the world’s problems are solved.
Not really. Microsoft stands to make a killing just running these models on Azure as their sole line of business if AI ends up as successful as it may prove to be. Google divesting more from ads might prove to make them less evil. Meta would be evil in this space if not for the fact that because they started off late they’re the biggest driver of open AI development right now and arguably the biggest funder of any hope of counter-corporate AI existing.
It’s easy to regard companies as monoliths. And while it’s generally true that a corporation, especially large public companies, will end up trying to optimize around short term gains even at the cost of long term consequences or social evils, it isn’t necessarily true that public good is always at odds with capitalist self optimization in all things. So it would still be a win for Microsoft if AI allowed for the public good as long as they could ensure that AI was running on their servers and they could attempt to maximize their margins as much as the market allowed for before net gains decrease. And any corporation smart enough to focus on longer term gains is going to be one that’s going to actively try to avoid excessive public harm as your longer term revenues aren’t going to go up if your customers die or go homeless, etc.
Also, the researchers themselves have certain aims and if their parent company doesn’t align with those aims, they may take themselves and their significant value away from that company. For example, Meta was only suddenly “open AI friendly” and then a major player after literally half their AI team quit for greener pastures.
Unfortunately, the risks are just as massive. Everyone just seems to be blinded by the “new shiny” and refuses to see any negatives…
While weighing risks, it’s also important to weigh opportunity costs.
Also, I’m not sure who you are interfacing with, but in my experience it definitely seems like the majority of people are fairly bearish regarding AI (there’s a number of reasons why I think that’s the case, but it’s still a significant majority). These days positivity regarding AI that isn’t in the context of a snake oil sales channel is a rarity in most public discussions.
What a total fucking waste.
Oh I don’t know. We are providing the NSA with a mapping to the low values of SHA256 hash algorithm. That could be useful.
2% still seems really high.
It’s absurdly high.
Context: The US consumed ~4 Trillion kWh for 2022. If you take 2% of that, you get 80 Billion kWh.
oh so more then 160,000,000,000 lightbulbs.
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Whatever the motives of those that wrote it, the fact that cryptocurrency uses power wastefully to ensure validity is absurd when we want to reduce climate change.
The concept is great. The execution needs altering.
The concept is great.
Is it? I really don’t see how cryptocurrency is a good thing for humanity. The name is a problem in and on itself, since it’s not currency and can not scale up to be used as one.
I mean this is exactly what the established banking system has spewed out in propaganda all of which have been thoroughly debunked. Only difference is Bitcoin is not a company and does not have a propaganda department to counteract. It relies on people educating and thinking for themselves.
This isn’t propaganda and none of this has been debunked. Bitcoin can only handle a theoretical maximum of 7 transactions per second (in practice it’s closer to between 3 and 5) and I’m not aware of any cryptocurrency that can handle more than 60 transactions per second. Regular financial transaction networks meanwhile handle thousands of transactions per second while consuming far less power (both in terms of electricity and computing power).
So you have not heard of the lightening network?
In practice, How many transactions are done on the lightning network before returning to the main network?
Bitcoin lightning solves this scaling problem by keeping transaction data off-chain but using the main chain for security. You lock up liquidity in lightning and then you can send infinite transactions through that channel between you and anybody else on the planet who uses lightning. Transactions settle in seconds and cost pennies in fees. Often less than a single penny.
Lightning adds a layer of complexity and additional failure points. It also centralizes power in the bitcoin network even further.
It doesn’t actually change anything about the fact that Bitcoin isn’t a currency: Despite the fact that it’s claimed to be theoretically able to handle millions of transactions per second, it only handles a few million per month or about half of all Bitcoin transactions after having been around for six years (and most transactions aren’t payments for goods or services). The vast majority of online commerce does not accept bitcoin nor any other cryptocurrency, which isn’t surprising, given that their values fluctuate wildly. Currencies need, acceptance and stability, neither of which applies to anything crypto.
Lightning adds a layer of complexity and additional failure points. It also centralizes power in the bitcoin network even further.
Complexity, sure, though honestly I find the UX simpler than on-chain payments due to instant confirmation times. It doesn’t centralize power at all. Lightning nodes are just as easy to run as Bitcoin nodes, you don’t need high-powered servers to run them. They are dependent on main chain for security, which is highly decentralized as it is. If anything, it increases decentralization as miners are no longer the only ones who can earn BTC for supporting the network. Miners must buy expensive ASICs, but you can run a lightning node off a 10 year old laptop and that isn’t something that will change anytime soon. Bitcoin started with one of the most equitably distributed resources in the world: energy. And now it’s adding the second most equitably distributed resource in the world: bandwidth and storage.
It doesn’t actually change anything about the fact that Bitcoin isn’t a currency: Despite the fact that it’s claimed to be theoretically able to handle millions of transactions per second, it only handles a few million per month or about half of all Bitcoin transactions after having been around for six years (and most transactions aren’t payments for goods or services).
Hard things to get hard numbers on due to the opacity of lightning payments. The theoretical maximum is not based on some made up fantasy, it’s based on decent back-of-the-napkin math on how it can scale. The base chain’s scalability issues were due to limited blockspace, lightning does not have that problem, there are no real scaling limits on it as a result except “the storage and bandwidth of whatever portion of the internet participates in it” which is massive.
The vast majority of online commerce does not accept bitcoin nor any other cryptocurrency, which isn’t surprising, given that their values fluctuate wildly. Currencies need, acceptance and stability, neither of which applies to anything crypto.
Determining value relative to other currencies is a single API call, that is not complicated. The reason they don’t accept it is due to lack of usability for many online merchants in their integrated platform and the belief that many users would prefer not to pay in crypto. Which is weird considering 1 in 5 Americans own crypto, which is a number that continues to grow. I think a lot of them dropped support due to high on chain fees, but lightning has solved that to the point that accepting lightning it 10-1000x cheaper than credit cards for a merchant. That’s a savings they can pass on partially to customers as well, which means customers can be incentivized to use Bitcoin. We are just now seeing the effects of that. At the same time, many online merchants do accept and even prefer cryptocurrency. Same with many online contractors. PayPal is a royal pain to use, and so are most other platforms for online international payments. There are some items I would refuse to sell online with PayPal due to rampant buyer fraud and chargebacks. Same reason why when you go on Facebook marketplace everybody refuses to take venmo for so many items.
How many merchants is enough until people are satisfied Bitcoin is actually useful? Idk. As far as I can tell, from Bitcoin detractors, basically all of them. Transaction volume grows, on average, over time, and that trend has not been broken yet. Fees also grow on main chain, which indicates increased demand for chain space since supply has not changed there.
You’ve clearly never tried to send money between countries that dont have an interconnected bank system. Or has your credit card stolen. Or has to make large transactions outside the bank system, say for a car. Or used PayPal.
The concept of sending money without requiring a third party to be trusted is great. It should not be a store of wealth.or a gambling machine. Enabling cash transfers is it’s only purpose. And that concept is good. And what is cash, but government sanctioned ways of transferring currency. The name is apt.
We need to shift to demand shaping. Storing power generated during the day to be used overnight is not particularly efficient, and requires massive pumped storage facilities. We need to use power at the time it is produced. If we do not have sufficient demand at the time of peak production, energy prices will go to zero (or even below zero!) during those times, and there will be no incentive to continue rolling out solar to meet demand earlier in the day, later in the day, and on cloudy days.
We need much more solar rollout to fully meet demand during marginal or even poor conditions, but that much generation capacity is far more than we can use at that time.
We need a massive load that comes online during optimal generation conditions, but which can be shed under clouds or at low sun angles. Something that will give the power companies an incentive to keep rolling out solar even when we have excess optimal generation capacity.
Reducing wastage, increasing base load of renewables, back up storage and peak load usage and interconnected grids are all used. This suggests reduce wastage, which should not be ignored. Bitcoin wastes the energy solving problems that are computationally difficult but not useful. That’s wastage.
Agreed.
The need for power is to make it extremely difficult to take over the network. If the power needed was minimal, 1 person or group could easily take over. Power is what keeps it secure and as we enter the AI and quantum computing age, blockchain tech and how they are secured is one way to protect ourselves. Centralized databases are sitting ducks as we have seen with the amount of hacks going on at an increasing pace.
No, it needs non-useful computation to make it more and more difficult to mine. This needs more and more power to do. The power wastage is not required, but is a side effect. There are other methods of securing digital currency. Bitcoin should be seen as a proof of concept at this stage, rather than a complete technology.
The problem is trying to prevent concentration of power and ensuring new good faith actors can enter the ecosystem at any time on a similar footing.
The irony is that the more widespread it is, the less likely for any one entity or group of entities to have control, yet the more total power is being consumed.
The need for power is to make it extremely difficult to take over the network.
This used to be true. Mining pools have now concentrated that governance and specialized hardware has removed the ability for the everyman to mine.
2nd and 3rd generation blockchains will provide the growth in use cases and adoption.
Bitcoin’s unique selling point it it’s price. It is tulips2.0
Ummm if you follow the links to the EIA’s report, it does not show their method of calculating
The report discusses a few methodologies for estimating the electricity consumption, and if you follow the trail of references, there’s a table of sales and use of electricity by sector. And the data in that table comes from "Form EIA-861, “Annual Electric Power Industry Report.”, Form EIA-861S, “Annual Electric Power Industry Report (Short Form)” and Form EIA-923, “Power Plant Operations Report”.
So the report discusses a few possible ways to estimate the crypto consumption by using overall sales and usage data. And they give references on finding that data.
Eth has moved to staking, which is good for the environment because it doesn’t have a bunch of computers competing for transactions, unlike bitcoin - instead the network picks a computer for the transaction and takes staked coin if the computer does something nefarious to the transaction. The problem though is that staking requires coins / money. Mining requires electricity and can make money (albeit pennies depending on your setup and electricty costs). For this reason, it’s not just bitcoin that’s a problem, but a whole bevy of other mining-based coins like bitcoin cash, cudos, etc. That problem (the desire for folks to spin up new farms to mine crypto coins which they can mine using the spare CPU/GPU cycles) is likely not going to go away soon.
The benefit of PoW is that it is tied to real world physics and markets. The price of bitcoin is derived from the price of electricity, computing power and the supply. PoS is tied to the price of what the owners of the coins will sell them for and who wants them, in ethereums case there’s an unlimited money printer that could crash the price at any moment - like the usd, but the usd has a huge ass army behind it
The benefit of PoW is that it is tied to real world physics and markets.
Eh… physics in the sense that faster processing means faster processing but it’s a very wasteful process. It’s like ordering a meal from hotel room service and having 100s of people bring you what you ordered. Proof-of-work-wasted.
The price of bitcoin is derived from the price of electricity, computing power and the supply.
There’s a huge part of PoW that is left up to chance. Individual miners will spend lots of money on an expensive rig and get pennies. Some miners will join mining pools to split the wins but those generally are shared according to your computing power, so pennies. Pennies and unless you’re doing things right, huge electric bills. Hell, even death in some cases. There’s a chubbyemu video about a kid who ran too many miners in his room, which got too hot and he suffered heatstroke.
PoW was great to begin with, but it is the reason why crypto has such a large carbon footprint.
PoS is tied to the price of what the owners of the coins will sell them for and who wants them,
Can you elaborate? I think you (or maybe I) am misunderstanding how PoS is priced. From what I understood, it was loosely tied to bitcoin (because investors will diversify into both coins and bitcoin has much more volume / market cap). As I understand, all cryptos are priced at what a buyer would pay for it. It’s not like BTC miners can ask for more money because the price of electricity went up. I don’t think 1 BTC would sell for $1,000,000 USD in 2024 just because it was scheduled to do so. If a competitor to BTC came out and was better (e.g., SEI) I think that would affect BTC’s price. I don’t see how ETH would be any different.
Proof of Stake at the end of the day is just saying “instead of joining a mining pool and paying my electricity and hardware to do a lot of wasteful work, I’ll instead pick another entity to do the mining for me and give me a share of the profits”. Proof of Stake is still Proof of Work, it’s just sort of a curated proof-of-work where the network picks one machine at random to do the work (depending on the amount staked with / trusted in that machine and the administrator of that machine). It works well enough to provide an estimated APY in lots of cases, which isn’t something you can get from Proof of Work mining BTC.
Physics in a sense of the current limits of computing and energy generation are based on physics. If I come up with a faster computer I get paid more and I also further secure the network. It’s a way to insure against technology advancing enough to break the network. If I come up with free electricity I only have to worry about the cost of compute. And bitcoin miners can and do ask for more money if the price of electricity goes up. They do this by holding onto mined coins for longer creating a supply shortage. The big exchanges often get their liquidity pools from miners so if the miners don’t sell they have to pay a higher price set by the market. And finally if PoW is so bad why do you admit that the price of PoS is tied to it? If bitcoin went PoS its fundamentals would collapse and most of the crypto market along with it.
Physics in a sense of the current limits of computing and energy generation are based on physics.
Moore’s law, sure. The same goes for Proof-of-Stake.
If I come up with a faster computer I get paid more and I also further secure the network.
If you come up with a faster ASICs miner you get paid more, sure. I won’t knock BTC mining for aspiring electronics engineers. Get that coin, baby!
It’s a way to insure against technology advancing enough to break the network.
But you having a faster computer means you get paid more, which means you would be advancing the technology.
If I come up with free electricity I only have to worry about the cost of compute.
Electricity is not without costs. Solar panels, hydro generating equipment, the cost of copper wire and magnets, the cost to maintain the equipment, batteries, etc… But yes, if you optimize for paying a low amount of electricty you end up only needing to worry about maintaining your mining hardware.
And bitcoin miners can and do ask for more money if the price of electricity goes up.
Well, they don’t ask…
They do this by holding onto mined coins for longer creating a supply shortage.
…they HODL, right? Same thing anyone who owns coin would do if they wanted the price to go up.
The big exchanges often get their liquidity pools from miners so if the miners don’t sell they have to pay a higher price set by the market.
Supply and demand.
And finally if PoW is so bad why do you admit that the price of PoS is tied to it?
Because BTC owners swap coins between ETH (and all other eth tokens) and BTC? Because more ETH is bought with BTC than it is with fiat money? I’m no expert, I’m just making guesses here but it seems to me if a bunch of kids got rich because they mined or bought BTC early on, some of they might want to diversify into ETH and all other tokens?
Any ties between BTC and ETH are purely market related. They have no bearing on Proof of Work or Proof of Stake.
If bitcoin went PoS its fundamentals would collapse and most of the crypto market along with it.
How so?
Bitcoins price is derived from the cost of compute, energy and a finite supply. These are the fundamentals of bitcoin. Just like the price of gold is set mostly by the cost of machinery, energy and labour to pull it out of the ground and then the extra cost of maintaining or protecting the gold reserves, there’s also a finite supply. Bitcoin going PoS would be a bit like the current gold system saying we’re not going to take it out of the ground any more but instead we’re going to say who ever owns the current stockpile gets an imaginary credit for more gold. Any new gold entering into circulation will only be in the form of gold contracts.
PoW / PoS has no effect on how finite a crypto’s coins are.
I know. It’s one of the fundamentals of bitcoin though and that’s what we were talking about
Proof of Stake at the end of the day is just saying “instead of joining a mining pool and paying my electricity and hardware to do a lot of wasteful work, I’ll instead pick another entity to do the mining for me and give me a share of the profits”. Proof of Stake is still Proof of Work,
It’s literally not this. Proof-of-stake is basically saying “I’m allowed to author the next block because some math formula says a coin I hold is eligible to do this, and here’s a signature proving I own the coin”. It’s not proof-of-work, it’s proof-of-ownership.
It’s literally not this. Proof-of-stake is basically saying “I’m allowed to author the next block because some math formula says a coin I hold is eligible to do this, and here’s a signature proving I own the coin”. It’s not proof-of-work, it’s proof-of-ownership.
It’s literally this (I’m relying on the dictionary defintion of literally which also includes figuratively.
You’re right about proof of stake, in that it gives the machine the ability to write the next block. But that machine still has to do work. That work still must be proved. The only difference is because the machine was picked it doesn’t have to compete with millions of other machines doing the same work.
I’m sure you realize the work involved in Proof of Work isn’t really all that much work for your machine to do, it’s more about getting that work done faster than any other machine you are competing with. So, Proof of Work is more aptly “race to the right answer” with other machines validating that correct answer. Redundency and verification in computer systems is a good thing, but we don’t need millions of machines running the same verification.
As for which machine gets picked, that’s based on the amount of coin staked in that validator / miner / processor / machine / whatever you want to call it. So in a simplified example if 50% of the coins were staked at validator A, 25% at validator B and 25 more validators each at 1%, those percentages are a sort of weighting of the roll of a dice to favor those validators to that amount.
As a validator, you still have to do the work, possibly of other validators (redundency, etc…). If the system picks validator A to mine the next block and validators B and C to confirm validator A did it correctly, validator A earns the reward for that block. The only reason validator A got a chance to do this was because of the people who staked with validator A, so validator A rewards everyone who staked a percent of the reward based on how much each address has staked with validator A. This gives person who stakes with that validator an incentive to do so.
If on the other hand validator A submits the work and it is considered invalid by the other validators, the network (not sure of specifics, contracts I imagone) can pull from the funds from the validator which would be missing from the invalid block, hurting the validator and providing the validator an incentive to correctly validate the work.
If the systems were the same in this hypthetical example, with validator A, B and 25 more validators (a total of 27), with a hypothetical 2 validators validating the chosen validator, we have the same mechanism of action going on cryptographly, (doing the work of validating transactions and trying to write to the block chain, being stopped by other machines to cross-check that it is correct), you have 3 machines running in proof of stake vs proof of work’s 27 machines. There’s still 1 winner of that 27vs1, but the proof-of-stake system has weighed the chance of the winner at who has the most at stake, or who people have entrusted the most with their coins; whereas the proof-of-work system is largely left up to the 3 fastest machines, usually determined not by processing power but by network speed and geographic location.
Ethereum does not have an unlimited money printer. It has a specific inflation rate and network protocol controlling it. Its fiscal policy has changed over time, PoW is better, but you don’t have to make stuff up to make that point.
I didn’t know that. What is the protocol? I know last bull run they dumped huge amounts of ether on the market at the two peaks
Somebody more knowledgeable than me about Eth can detail that, it’s gotten a lot more complicated in the past few years. But suffice to say a clear economic policy does exist, but it burns coins and/or mints them according to several changing variables within the eth ecosystem, for example, gas fees. But the rules are all out there, written in protocol, for anybody to follow and build around, otherwise the whole system would fail to even operate as a blockchain.
I was just answering your post to basically that Vitalik or whoever doesn’t just have a money printer they can unilaterally turn on.
ThIs Is GoOd FoR bItCoIn
And less than 0.00000001% goes to Ethereum
Don’t over-flatter Ethereum.
Ethereum transitioned from PoW to Pos.
What’s not to like about that?That those with more have more control. It’s a reinvention of fiat currency. PoW also had that problem since people with more money could afford better mining hardware, but PoS is even more direct. That’s not even getting into tether printing and other bullshit. The claim is that cryptocurrency is a move away from our existing financial system, but the reality is that it’s just another arm of it.
How would you construct a consensus in which contributors don’t have a stake in the game?
How would it work and based on what incentive?
Why would they stay honest? Because as soon as there’s any stake in play, those with money will be able to get more of it.
I’m honestly curious and interested in viable alternatives.
it is now provably not secure. Because pos is provably not objective. Making the whole thing moot. Also, it is literally a system explicitly designed around “the rich get richer”.
Security is relative - always!
Can you name one consensus scheme that isn’t?proof of work is objective. It sucks for other reasons, but I do not need to trust anyone to start participating.
Even if it is (I don’t see your reasoning explaining that) that doesn’t mean the resulting security scheme is objective.
Isn’t ethereum a centralised shit coin with a money printer attached, controlled by the owners of the “foundation?”
In what way is Ethereum centralized?
The owers of ETH contribute to the consensus.
How would the foundation control any of that?
Mybe you confuse Ethereum with IOTA?
Wut?
How much electricity goes to normal financial institutions though?
A tiny fraction by comparison, given the amount of transactions they handle per second (Visa alone handles thousands per second whereas bitcoin only does 3-7 transactions a second). Either way, I wouldn’t mind seeing the stock market and the vast amounts of effort wasted on that bullshit getting shut down.
It’s estimated the finance industry issues about 260 TWh, JUST Bitcoin alone uses 114 TWh. So Bitcoin is using a little less than half as much energy as the entire financial industry.
Bitcoin is orders of magnitude less efficient than traditional finance.
The entire “web 3.0” scam has basically been selling “databases but worse” to people who don’t know what a database is
I kind of agree. To me it seems like the only real difference is the transparency. Which shows how bullshit legacy institutions are that they do what ever they can to hold onto control and remain opaque. Just be open and crypto has no advantage what so ever. But they won’t, so they will at the least through their own inability to curb their greed, allow crypto to own a space in the financial system
Dunno but probably worth it for the amount of transactions they process.
Pay your taxes in buttcoin and I’ll tell you the answer.
Does someone feel like giving me an ELI5 why Bitcoin mining eats up so much electricity these days? Is it just because the problems the machines need to solve have gotten more complex? Do other cryptos tax the resources as bad? Is there a viable crypto that would be considered “green” at this point?
Sorry for overboarding my questions if anyone even attempts to answer this lol
All crypto is essentially designed around competition for who gets to be the one mining it. Things escalate, and that’s how you end up with these ridiculous crypto farms that use as much power as entire cities. No crypto currency is “green”. And UNLIKE cars, lights or banking, crypto serves no purpose, it’s currency that doesn’t get spent, it’s basically just there to fuel speculation for tech bros.
Crypto is a complete waste of energy, it’s not ‘big money spinning Bitcoin as negative’, it’s just objectively idiotic, don’t listen to that comment.
If you haven’t, I recommend watching Dan Olson’s documentary “Line Goes Up” on Youtube.
No currency is green. Crypto, fiat or visa etc it all burns resources to maintain
Difference is that crypto is barely even a currency, it’s basically just a vehicle for speculation. Visa is actually useful.
Price goes up, chances go down, more people/machines trying to mine, more electricity usage.
If you want to have rather green cryptos, you need to exclude those who rely on proof-of-work to secure the network.
Btw. Ethereum showed that a transition from proof-of-work to proof-of-stake is possible.
If you’re not interested in the complexities that a lot of cryptos have, because you just want to transfer value efficiently, have a look at Nano (https://nano.org)I have heard nano uses a lot less energy compared to Crypto. Though how does it compare to visa/traditional payment systems?
The problem with nano is that it makes the assumption you can just give away transaction space for free. You can’t. If you do, spammers and other low-value uses take up all the space. The more space gets taken up, the more expensive it is to run a node, and the more centralized your network becomes. So what did they do when they ran into this problem? They added a proof-of-work component. The very thing they created their coin to avoid! If you look at almost all of these non-PoW cryptos, the only reason they can get better transactions per second or low tx fees is because they are very centralized or because nobody is actually competing for that space because nobody uses them.
Bitcoin solves this scaling/fee problem with Bitcoin lightning, which is a layer on top of the main chain. The main chain provides security, while actual transactions live on the second layer. Fees on lightning measure in the pennies and confirm instantly. The scale you can take lightning to is basically infinite. That’s actually useful as a currency.
Nano has alwas has a computational part associated with transactions. It once was used to prioritize transactions. Nano has evolved to a different prioritization scheme. That computational part will be phased out.
The lightning network is a silly attempt to merge bad parts of cryptocurrencies with bad parts of traditional finance: you need the electric energy guzzling Bitcoin and middlemen just like in traditional finance - or would you care to open and close your own channels, pay watchtowers etc. or “simply” use the channels of middlemen?
And how would you have cheap transactions without those middlemen, if operating your own channels requires transactions on layer 1?Nano has alwas has a computational part associated with transactions. It once was used to prioritize transactions. Nano has evolved to a different prioritization scheme. That computational part will be phased out.
We’ll see. It had to be “phased in” in the first place for a reason. Either you limit chain space and charge for it, or your chain grows an infinite size. There is no way around that problem.
And how would you have cheap transactions without those middlemen, if operating your own channels requires transactions on layer 1?
Because once a channel is opened, you can have essentially infinite transactions within it. So there is not a 1:1 relationship between channel opening/closing costs (layer 1) and transaction relaying costs (lightning). You need the layer 1 underneath to provide the security for the lightning transactions. Without layer 1, if somebody you are transacting with doesn’t follow the rules, you have no way to enforce the rules. Incentives are setup in such a way that it’s incredible rare you ever need to to go L1 to get that enforcement, since the deck is stacked against anybody who tries to break the rules.
I stated the reason for it being phased in: prioritizing transactions.
Tell me how to keep a channel open without risking loss of funds through flood and loot attacks.
- If you have a custodial wallet: Literally nothing, the wallet handles everything. You don’t even need to know what a channel is.
- If you have a self-custody wallet: Install it on your phone and make sure you can connect to the internet once every 5 days. You don’t have to open the wallet, some background service does everything automatically. Most wallets have built-in automatic watchtowers, so you don’t ever need to connect to the internet and somebody else watches the channel for you.
The attacks you can do in lightning are very limited. Basically the only one you can do is force close a channel and broadcast an old state on-chain. But your other party in the channel can correct you by publishing the more recent state. They have several days to do this. If you tried to cheat this way, not only do you not get the coins you wanted, but there is a penalty as well. You lose money. So nobody ever does it.
There’s about 200M USD currently locked up in lightning contracts. If you think you can hack lighting, have at it. The best hackers in the world have tried, they have all failed.
Indeed it does use little energy, because its consensus is in some ways similar to PoS, so there’s no mining involved. If you want to know more about it, have a look here: https://docs.nano.org/protocol-design/orv-consensus/
I believe that the Nano network can process around 100 transactions per second; at least that’s a result from throughput tests I remember. That’s way less than VISA can do, but a lot more than most other cryptocurrencies can process.
And in difference to the vast majority of cryptocurrencies, Nano has no built-in limits of transactions per second. As soon as hardware gets more powerful (faster CPUs, faster network connection, faster SSDs), Nano gets faster!
the power is needed because trustless distribsuted ledger is mathematically impossible.
So there has to be some mechanism that actually prevents someone being able to just change anything at will. This is the mathematical impossibility part. What bitcoin does to get around it is to (artificially) make it cost resources to write into the ledger by making everyone solve a random useless puzzle. And with each block depending on the one preceding it, changing implies also changing all the subsequent ones.
This of course assumes that the chain is ever growing, otherwise the attacker just needs time to catch up. Bitcoin’s security guarantees come from ensuring the network keeps growing faster than any one single entity could write to it. The only thing that keeps anyone from writing whatever is that they just can’t do it fast enough.
This implies that the network is only (probabilistically) secure as long as there are people mining it. If people stop mining, bitcoin instantly loses all of its security.
It then follows that the security of the chain depends on its ability to keep its users wanting to mine it. This is handled by it being a currency. something that humans would have a psychological need to hoard.
This is also why any non-cryptocurrency application of blockchain simply cannot possibly work.
the power is needed because trustless distribsuted ledger is mathematically impossible.
So there has to be some mechanism that actually prevents someone being able to just change anything at will. This is the mathematical impossibility part. What bitcoin does to get around it is to (artificially) make it cost resources to write into the ledger by making everyone solve a random useless puzzle. And with each block depending on the one preceding it, changing implies also changing all the subsequent ones.
This of course assumes that the chain is ever growing, otherwise the attacker just needs time to catch up. Bitcoin’s security guarantees come from ensuring the network keeps growing faster than any one single entity could write to it. The only thing that keeps anyone from writing whatever is that they just can’t do it fast enough.
This implies that the network is only (probabilistically) secure as long as there are people mining it. If people stop mining, bitcoin instantly loses all of its security.
It then follows that the security of the chain depends on its ability to keep its users wanting to mine it. This is handled by it being a currency. something that humans would have a psychological need to hoard.
This is also why any non-cryptocurrency application of blockchain simply cannot possibly work.
It is the cost of securing the network. It is intentional as if it was low power and easy to mine, 1 person or organization could take over the network and thus it would loose its decentralization. Nothing wrong with using power as long as it is green. No one is complaining about how much energy social media uses, or electric cars, or the fiat banking systems or all the lights left on etc etc. Power usage is not the issue here, it is power generation. You best believe that big money is spinning Bitcoin as negative as possible as it is a threat to their establishment. Don’t be a sucker for the BS.
It still a problem if it’s using green power as it’s preventing that green power from replacing fossil fuels in more useful and essential parts of the economy. Therefore essentially increasing demand for fossil fuels. Additionally by increasing the nations total energy use it’s making the task of decarbonising energy just that little bit harder.
The problem with green energy is that it produces on its own schedule, divorced of when people actually want electricity. Bitcoin miners are “buyers of last resort”. They have to compete with every other miner on the planet, they don’t buy electric at peak usage hours (which is when you fire up the non-renewables to meet demand). If anybody else was there to buy that electricity, Bitcoin miners don’t. They can only afford the cheapest electricity and electricity which has nowhere else to go.
Bitcoin mining is part of the green revolution. By always having a buyer of last resort, it makes it easier to invest in renewable infrastructure knowing that somebody will always buy the power even if demand isn’t ordinarily there to meet supply. It allows you to build your grid out to be almost entirely renewables. It’s a form of energy storage. And it means when regular people buy power, it’s cheaper, because they don’t have to make up for that time period when electricity was being produced but there was nobody to buy it. Regular people don’t have to subsidize the cost of a solar panel farm that is only useful for a few hours a day when demand is at the peak and otherwise produces energy there is no use for.
Energy use is going up with or without crypto. It is a solvable problem. We just have to have the will. The focus should be on more green power, not restricting those who use it already.
Yeah, but the problem is that the green energy could have gone to powering a hospital or a factory, something actually useful. But instead it’s going to crypto. The hospital and the factory still need power and they are likely to pull it from a fossil fuel source. Essentially ’green’ crypto mining is creating demand for fossil fuels making it not actually green. Also we don’t have the time for our energy transition to be slowed down by crypto. Especially considering how utterly useless it is.
You can make this argument with anything that demands electricity. This is how we generate full stop. Anything else is a distraction that propaganda has placed in your mind.
POW has been out of date for years. POS solves these problems, but that would take an informed person to realize which seems to be in short supply.
Doesn’t proof-of-stake boil down to “if you’re hoarding a billion dollars, you’re inherently more trustworthy”?
It boils down to, “here let me hold your money and if you do anything to scam the system, I get to keep it.”
Yes… some with billions of dollars in a crypto has a billion more reasons to want the network secured.
Yes, I can’t predict any problems that might be caused in a “right by might” monetary system. /s
As opposed to a currency issued and secured by a central bank?
So you’re admitting it’s basically the same thing?
What’s the point of crypto currency if it’s just re-implementing the same system we already have?
I’ve always said cryptocurrency is just an exercise in teaching libertarians how economics work that involves wasting a lot of electricity and a lot of people losing a lot of money.
But it can’t be a real currency until people are comfortable with taking out loans denominated in it. But to accomplish that you’d need to have a slow but steady inflation so people will know they aren’t going to wind up owing more in real value than they originally borrowed. Perhaps there could be an overnight lending rate to the “biggest stakeholders” so the value of the currency can be controlled?
Its not the same thing, its just incrementally more decentralized than the current system but potentially less so then a proof of work one (and even then only in theory, in practice a lot of POS chains are more decentralized than BTC).
But the most important aspect of crypto is actually not decentralization. Decentralization is necessary but only to a point. What is more important is for the cryptocurrency to be permissionless. In that way, you are correct it is replicating a system we already have… cash. It basically taking the properties of cash and bring that into the digital realm. We lost so much when our money and other assets became digital and that it what crypto is trying to give us back. It crazy to me that people don’t want to see that happen and buy into these superficial critiques, which, even if true are just engineering problems that can be overcome.
But I am no stranger to seeing people completely sleep on radical shifts in technology. Hell the fediverse is just like that too and if you leave it for a moment you will see people trashing it in the same way. So whatever, keep your fiat. I hope the future is one where both systems an co-exist.
Blockchain is like a magicians trick where the distract you with something shiny in one hand so you don’t notice the other hand is taking something from your pocket. Blockchain may be an interesting technology and people seem to value their deep understanding of it. But what they’re neglecting is they’re sleeping on the economic side of of it. I’m no stranger to people sleeping on economic issues.
See crypto represents a fundamental misunderstanding of what money is. Money is debt. You do work and you’re owed something. The company you work for doesn’t provide things you want so bartering isn’t possible. So they give you a token that represents the value they owe you. You can redeem that token anywhere to receive the value that the company you work for owes you. Money is a token that represents what you’re owed. The transaction where you do work and receive something in equal value to that work is incomplete so long as you hold onto that money.
Incomplete transactions are an economic inefficiency. Inflation acts as an incentive to complete those transactions. Also it allows people to borrow money (which is more obvious that the money is dept) to buy things of value now and pay back that value later. So you can buy what you need to be productive (capital) and pay the debt with the increased value you’ve gained from that capital. Capitalism in a nutshell.
Crypto currency is popular with people that don’t have a firm grasp of money. People that are upset over the value of their money decreasing. Even people that have debt that exceed their bank balance will be upset over this. Wanting a gold standard (even when it’s completely not feasible). Wanting a digital version of a gold standard extends from this.
But in the end, money is simply an agreement to value some token that everyone in a society makes because we all recognize that a barter system isn’t going to work when people are in the specialized fields that civilization necessitates. Whether it’s an official looking piece of paper, a number in a database, a pretty piece of metal, or a magic number generated by a complex algorithm. It all depends on a society agreeing to value some token to represent things of real world value.
So crypto doesn’t represent any kind of improvement. In fact the opposite. You actually want small but steady inflation with real world currency. But that can’t happen in the crypto markets because people are investing in it. Crypto increases in value so long as more people invest in it. But inevitably that will stop. Even in someone’s fantasy where everyone in the world put all of their money into crypto, since money is finite, the value will stop increasing. Then what do the people that bought crypto as an investment do once there’s no longer a return on their investment? They sell.
And traditional money will still exist, it has to. People still need to take out loans and a “currency” that could potentially have double the value next year is not a thing you want to take out a loan in this year. You could end up owing double what you originally borrowed. So we have to maintain existing currencies to make loans possible. So when crypto reaches a point where it’s stable enough to consider using it for loans, it will also be the point where people buying it as an investment will sell, and they will be able to do so because traditional currency has to continue to exist until crypto is stable.
So there’s no mechanism for us to transition to cryptocurrency as a real currency without some major government intervention to accomplish that. But once you need the government to enforce this currency, what have you achieved?
So crypto is just wealthy people manipulating a market to extract money from people with an impossible dream. Given that it requires more investment to increase in value and people are buying into it as an investment, it’s just a pyramid scheme.
Cool tech tho!
Complaining about downvotes is essentially begging for them.
They arent a big deal, quit counting them. No one else cares, dont put so much stake in an internet number
To those that say this is a waste and has no good purpose, you should know that most energy used by miners is renewables because renewables (especially during off-peak hours) are the cheapest source of energy.
Bitcoin’s value to society is the ability to easily transfer money from point A to B and having a clear fiscal policy it has kept to for 15 years, 365 days a year, 24/7 without a single hour of downtime, a bank holiday, or getting hacked. There’s a reason big money like hedge funds and private banking are investing in it: it’s actually useful and has massive potential. The market cap of Bitcoin is 850 BILLION USD, that’s bigger than the GDP of Sweden or Israel or Vietnam. People use it to move over a trillion dollars of value a year. You can debate how much of that movement is trading & speculation vs use as a currency, but it’s a trillion nonetheless. I personally pay for things regularly with Bitcoin, you’d be surprised how many places you can spend it when you start looking. And it’s available to anybody with a cellphone and halfway reliable internet access, including the billions of people who are “unbanked” and lack access to stable banking infrastructure.
Transactions on Bitcoin lightning occur in under a second and cost pennies in fees. That’s to send it across the room or across the globe. Remittance services and bank wires use just as much energy and cost 10x-1000x as much. And they waste not just energy but human capital as well, we no longer need humans manually sending bank wires like it’s 1910. You just don’t see headlines about the energy impact of bank wires or western union because it’s not novel, we just accept it as a cost of our financial system.
The energy used by miners is needed to secure the Bitcoin network. Historically, we have built currencies of incredibly inequitably distributed resources: precious metals, stable governments, etc. Bitcoin was the first one to build an economy based on pure energy. This stuff literally falls from the sky. While it is not perfectly equitably distributed, it is the most equitably distributed resource on earth that can be used for this purpose.
and if bitcoin wasn’t wasting all that energy, we could be powering actually useful stuff with that renewable energy. It’s not ok that energy is being wasted. It coming from renewable sources does not make wasting it on useless hash calculations is good. That energy could be used elsewhere, for useful work.
How much energy do banks use? Or remittance services like Western Union? Notice how you never see those numbers alongside these headlines. These articles are for clicks and outrage, not for serious discussion and weighing pros vs cons.
Sending transactions from A to B is “useful stuff”.
and if bitcoin wasn’t wasting all that energy, we could be powering actually useful stuff with that renewable energy
If anybody wanted to use that energy its price would go up and bitcoin miners probably wouldn’t buy it as they need the cheapest possible energy to be competitive.
Read the article - some of the mines are deliberately near fossil fuel plants that had been tapering off production.
Those fossil fuel plants are the problem, the problem is not that somebody is willing to buy that electricity. Those fossil fuel plants probably only even still exist because of subsidies of fossil fuels. Renewables are cheaper, have been for quite some time, it’s just a matter of getting enough capital to build out their deployment in the first place and fight existing subsidies for fossil fuels.
That is a governance and policy problem, not a Bitcoin problem. Bitcoin finds the cheapest energy it can, which tends to come from renewables. So does every other energy-intensive industry on earth. Bitcoin is not unique in this aspect, but what does make it unique is the ability to rapidly turn on/off use of electricity according to current electric rates, unlike say a cement plant or factory.
