There are so many better crypto-currencies. Better for the environment because they use proof-of-stake, and not proof-of-work. Better for users because transactions are confirmed in seconds, not hours, and without the ridiculous fees that Bitcoin has.
I think this shows how truly powerful the network effect, and being first to market is. Because without those things, Bitcoin would be nothing.
You know what actually bothers me the most about all crypto-currencies?
None of them are actually money, like in the paper-or-gold-coin sense. They're all ledgers.
The thing about money is that I can hand it to someone. Possession of the money is possession of the money and third parties don't need to get involved in every transaction. I can hand someone dollars and take a sandwich and walk away, transaction done.
The problem with a digital currency, of course, is that when you hand someone a sequence of bits, they don't go away from you, so you can hand that same sequence of bits to another person.
The "solution" people came up with to this problem was to not solve the problem, and instead solve a different problem, how to have a distributed ledger.
Which is like, neat and all. But also infuriating. We don't have crypto-currencies, we just have crypto-banks.
You're getting a lot of responses, because this is a pretty common complaint about crypto, and it taps into a great "WELL ACTUALLY" moment, because your concern is close enough to the "at least real money is backed by something" misconception (which, tbh, I'm sure you're aware of at this point if you weren't already).
Fundamentally, what folks are trying to get to with crypto is a trust-less system, one that can operate regardless of whether or not there are bad actors involved (including and most commonly as the central authority, aka banks). Historically, it's been a lot easier to build systems that don't account for bad actors, and it's been continually problematic for society because that assumption is so obviously and blatantly false.
Maybe crypto, as we know it, isn't the solution, and certainly proof-of-work has serious negative drawbacks. However, with the advent of automated computational devices, the possibility of evolving past our many-thousand year old system of bartering is too enticing to just ignore. We know there's a better way, and the odds we'll nail it on the first try are nearly zero, so I personally welcome any attempts that lurch us forward in the meantime, even if they're not the end destination.
A lot of people are comparing crypto to some kind of ponzi pyramid thing, ie a scam where some people will get rich but a lot will suffer. But isn’t that true about everything, ie smarter/more lucky ones will find ways to increase their wealth and those making suboptimal decisions will get broke? It looks like only when it gets obvious how the scheme works it becomes a scam.
The challenge with crypto is it is so easily manipulated/wash traded by those with large holdings. So those who are later to the game (with smaller holdings) are at a systemic disadvantage.
This is an interesting thought that crypto (or at least proof of work crypto) is backed by a sunk cost of an otherwise useless task.
But let me extend that paradigm: why is (or isn't) gold also not baked by a sunk cost? What was the point of all that expensive mining and digging if not for the sole purpose to extract that shiny metal from the earth's crust?
To some degree they are similar. The one difference is perhaps that BTC mining income is effectively guaranteed, ie if you join a mining pool and invest enough money, you will get a return of known quantity. In contrast, you could invest a virtually unlimited amount of money in a gold mining operation but not get anything back.
Turns out, virtually nil, because it's been around for 8 years and nobody is using it, because there is no real-world use case for contracts written as software.
I love how this comment amounts to "nuh-uh!" because you can't think of a single example even though you're an enthusiast.
The only people using smart-contracts are enthusiasts and proof-of-concept startups that have no traction in the market because smart contracts don't offer any advantage over any other computing system.
And what are those smart contract fees being used for?
- Speculators buying ETH to ride the bubble
- A revolving door of Proof-of-concept startups with backing from starry-eyed VCs and no viable business plans that pop up, use a bunch of compute, and then fail, every couple of months.
Ethereum mining conglomerates don't even use Smart Contracts, they just cite "a long history of successful payouts", trust, and old-fashioned promises written in vernacular English.
So you're moving the goalpost from "no users" to "no users I approve of"?
A few other use cases: DeFi (mainly crypto backed loans), NFTs (so far not too interesting to me), distributed ETH2 staking pools, distributed betting markets (the coolest one in my opinion).
No, the goal posts are standing still at "competitively successful commercial activity". The fact that somebody somewhere hammers nails with glass jars doesn't mean that glass hammers are about to take over the hardware world. Early investors getting rich off of a Ponzi scheme doesn't make the Ponzi a good businessman.
DeFi is used almost exclusively as margin for speculation. Since smart contracts have no legal force, the only way lenders can be guaranteed their money back is by demanding collateral that is greater than the value of the loan. When is the last time you needed a loan of $10,000, for which you were happy to put up $15,000 of your own dollars in escrow as collateral, other than securities gambling?
NFTs are just cryptokitties by another name, ETH2 staking pools are just private equity firms but without security because millions of dollars are stolen out of them every year, and crypto distributed betting markets are patently illegal.
Which brings us right back to where these conversations always end: the only things blockchain has or will ever be useful for are speculation and obscuring criminal activity.
> nobody is using it
> no competitively successful commercial activity
Those are two wildly different claims but I'll bite anyway:
Your argument against DeFi could be made about Schwab, or any brokerage providing margin so I don't find it very compelling. Is selling margin to gamblers not a "competitively successful commercial activity"? Your original claim was that there were no users.
> crypto distributed betting markets are patently illegal
That's like saying self driving cars are patently illegal. Of course they are (more illegal than grey market sports betting), but it's a nascent technology and it's not obvious that it will stay illegal.
Every competent English speaker knows that the phrase "nobody uses X" is never meant to be taken literally. When I say "nobody uses PowerPC", I mean that its market share is miniscule and the industry has moved on, I am not claiming that there does not exist some nerd somewhere who maintains a 20 year old imac as a hobby, and finding that nerd is not a disproof.
> margin trading
Margin accounts are not commercial activity. When you buy or trade securities, whether on margin or otherwise, no new value is being created, no workers are being paid, no commodities are being traded, no products are being consumed.
The entire market could vanish overnight and nobody would notice, because it isn't doing anything, it's just making increasingly complicated guesses at what other people will do.
> betting is like self-driving cars
Self driving cars are new technology. Online betting is not, it has been around since the beginning of the internet. Blockchain is doing nothing but helping the illegal gamblers to hide from law enforcement.
> When I say "nobody uses PowerPC", I mean that its market share is miniscule and the industry has moved on, I am not claiming that there does not exist some nerd somewhere who maintains a 20 year old imac as a hobby, and finding that nerd is not a disproof.
Well that's bad analogy, because unlike PowerPC there are more users of Ethereum than ever before, and Ethereum is generating more revenue than ever before.
> Self driving cars are new technology. Online betting is not, it has been around since the beginning of the internet. Blockchain is doing nothing but helping the illegal gamblers to hide from law enforcement.
I think you're being obtuse. Ethereum is the new technology here, that enables a distributed betting platform that was previously not possible. Self driving cars are a new technology that enable a type of transportation (existing market, like betting) that previously wasn't possible.
What do you mean by compute power? Smart contracts (which run on-chain code) pay fees for each command they execute. The most popular smart contracts are token exchanges and DeFi (ie crypto backed loans).
I think it's backed by the hope that on a couple of years it will be worth lot more (instead of looking backwards, people look forward and hope to get rich).
It's a misrepresentation, but you're on to something. Crypto is also backed in addition by all the other network participants willing to transact in crypto. which scales log with number of network participants.
I think the mindset of those people who make such arguments are those who want to delegate individual responsibilities that involve such risks to other parties. They might not understand the risk involved when such parties get big enough to dominate and decide what to do and how to do it.
Usually, we commonly agree by coming to consensus on what to do and not to. But here the consensus, sometimes, can get hijacked by the third parties which lot of people don't understand how it happens (read historical events). 2008 banks bailouts is a good example to begin with.
As Satoshi mentioned, in the OG Bitcoin paper, that cryptocurrencies will be attractive to Libertarians.
That's a fair assumption as one would start to notice a lot of activities involved in being part of cryptocurrency, atleast currently, requires lot of individual responsibilities, especially maintaining the wallet's credentials. Not to say that they can't be automated away.
Coming to terms with taking individual responsibilities in general is very hard. Most people want others (Government) to do it.
> The thing about money is that I can hand it to someone.
Honestly don’t know if you’re trolling or just old.
I used paper money once last year. To buy weed. Because the federal government has determined I am not responsible enough to use or own weed.
No one I know uses physical cash anymore. We’re moving away from physical items where possible, not toward it. I would rather have my currency on a public DLT than controlled by the government.
> Honestly don’t know if you’re trolling or just old.
No need to be ageist. It's a fair perspective. There is a quality of independence and agency that comes from being able to purchase things with cash.
Ironically, your weed transaction is a perfect example of that. I am a little confused by your argument though. Are you saying that you used cash because you couldn't pay legally with a debit/credit card or something? How come you didn't you use crypto? That aside, even with cash you were able to come to an independent accord (without the gov) and trade value for value. You could almost call it a barter, if you really consider cash to be a relic.
Despite having laws against this, society is mostly okay with some gray area around "off the books" transactions - which is why you can brag about it online and no one really cares, much like jaywalking.
More options for independent transactions don't necessarily hurt, but they do muddy the waters. The thing about cash is, since it is so commonly used, people generally understand what it is worth.
If I sell a TV for $100 on Craigslist, I take my $100 and I have a good idea of what I can buy at the grocery store with that. Offer to trade me 0.0020 BTC (~$100 right now) and I'm less likely to engage in the transaction because I don't understand its inherent value. You could even offer me 0.0022 BTC ($110) and I'd pass. How much gas can I buy with 0.0022 BTC? Do any gas stations around me take BTC? Do I need to convert it? I don't know. Add even more cryptos and it becomes even less clear...
I'm not against more options. More crypto options = more ability to barter. You and your dealer can decide to transact in Pokémon cards and no one's going care. But I do not see it being some sort of fix-all for the downsides to cash.
* If I want to get payed quickly for a quick job, cash is the preferred payment method.
* If I immigrate to a country where I am not allowed to work legally, cash would be my preferred payment method.
* If I’m buying something illegal (including labor from a person not allowed to work in my country) cash is the preferred payment method.
* I can use cash to pay for products in the farmstand across the street without any transaction fees or 3rd party apps.
* I can use cash during a week long blackout.
* I can use cash without an internet access.
Parent might not personally use cash. But for many people around the world cash is by far the most convenient payment method. And for many less privileged people cash is the only payment method.
Re. buying/selling with BTC, one other problem is stability of value. Without stability, usability as a currency becomes hard. How does one even list items' cost in BTC when the value of BTC is constantly fluctuating?
I doubt that’s true. It doesn’t seem to work out logically.
Lets say for the sake of argument that you are right, and the no. 1 use case of cash is to evade taxes. Then the people getting payed for their tax-free labor will need to use this cash somehow. The easiest (and cheapest) is simply to circulate the money while buying regular goods and services. So buying of regular goods and services would rise to be at least as popular use case of cash as tax evasion is.
Also note that there are plenty of people willing to pay tax for their transaction, but the transaction is made illegal by their government and hence they cannot. Then the reason to use cash is not tax evasion, but illegal transaction, (note that this includes paying and receiving salaries for people not allowed to work because of immigration status). Tax evasion then becomes a happy byproduct of the no. 1 reason for using cash, illegal transaction.
But I honestly doubt that either illegal transactions, nor tax evasion comes even close to why most people use cash. Convenience. Though I could be persuaded if I saw some data pointing to the opposite.
There are certainly a lot of people who use it for tax evasion, to be sure. One interesting tangible example that this problem exists is the recent removal of large bank notes by the Indian Central Bank, which was done expressly to combat tax evasion and money laundering.
The fact that lots of people in India have had serious issues because they were unbanked does seem to indicate that there's a sizable population of people using cash for everything*. I'm curious if there's any research into whether that's for tax-evasion reasons or for some other reason.
My personal belief is that the number one use is for money laundering, and that people who are using it that way would be willing to pay taxes on the money they are laundering from some other illegal activity. For instance, there are all-cash drug dealers who pay taxes on their drug money. I'm sure Al Capone wishes in retrospect that he'd paid taxes...
> My personal belief is that the number one use is for money laundering...
Have you ever experienced a natural disaster? One thing you realize quite quickly is that your debit card is useless. That doesn’t mean transactions stop, people are still buying and selling, those with cash at least. If there’s runs on banks, infrastructure outages, etc, those relying entirely on debit and other payment cards won’t be buying food!
That's a reason why you might have cash, not why you would use it. For example, you might own a gun in case society collapses. It stays locked in a hard to find place in your house. You don't walk down the street with it on your hip. Similarly, you don't pay for goods and services with cash when you're not in a crisis unless you're breaking some law, whether or not you want to figure out if you are or not.
What country are you from? I’ve only seen this kind of hate towards cash in the European countries. Last time in Sweden and ask to use cash they looked like they were about to kick me out of the store.
So logically we get rid of it since most transaction don’t happen for those reasons? Is my point invalidated in any way if a majority of cash transactions are not during a natural disaster?
You replied to, and quoted, a comment about the majority of cash transactions. Your point is entirely irrelevant to that discussion.
Also, for the record, I have been in and responded to a number of natural disasters in the "first world". With the exception of a few hours here and there, using cards was never a problem. If the infrastructure is so wrecked that cards don't work, food/water is coming from people in high-vis vests.
As you've discovered yourself once last year, the option of using cash (without permission / knowledge of a third party) is more important than actually using it.
This is the same misleading argument as when people claim that BTC is in practice equivalent to USD as most people just keep it on exchanges (same as USD in banks). Yes, but BTC/crypto also gives you one new option, i.e. not keepign money on an exchange ("being your own bank"). You're free to take that option, or not - but it exists.
I'm old and in the same boat as you, for many years now. I haven't been to a cash machine in years, because maybe once a year I get someone who wants to pay me in cash for something, so that just becomes my "bank" for the year. I use so little cash that just one person paying me for their part of a nice meal is enough for the entire year. Even the vendors on the side of the road prefer Venmo/PayPal now.
Hell, aside from recurring bills, I put everything on credit and then pay it off within the week. That way I get cashback rewards, build credit and can ensure I have the peace of mind of being able to pay for anything at the time of transaction without worrying about shifting money between accounts or where I am in the pay cycle. It also ensures that, due to building my credit score, I have ample credit at my disposal in an emergency situation. And, of course, the antifraud benefits are immeasurable.
As someone who comes from a working class background, I hate this system. Credit is something that ought to be abolished in its current form. Credit card companies and banks abuse this system to offer overpriced loans to desperate people, and they oversell the convenience to working class folks, encouraging them to buy things on credit they otherwise couldn’t afford... Now they most likely will pay their credit card bill at the end of the month, but at the cost of not having any money for the rest of the month.
Moving to America I was horrified to learn that in order to get applicable for loans (including home loans) I had to “work up my credit”, which includes maxing out on credit cards and then paying it back. As a teenager I made it my philosophy (experiencing second hand stress from the people around me) never to get a credit card. Now if I want to have a realistic opportunity to buy a house here I’m forced to abandon this philosophy and to the thing that kept my mom in constant state of stress. This credit system ought to be abolished.
From my personal perspective, credit cards are a systematic way to bamboozle the working class into over-consuming and keep them in constant state of dept. And to reward the wealthy for the same behavior, which only serves to shove it in the face of poor folks that the rich get away with everything. This system ought to be abolished.
I've never been robbed for cash. I have had my bank account emptied multiple times though, recently too.
When I hand cash over to someone, I know how much is leaving and coming back right then and there. When I fill out a payment form with my card details I'm handing over my entire balance into the ether. I could be sleeping and quietly money is leaving my bank account, which happened. So cash is king still.
Plus it's generational. If I said walkman's are the best I would guess you have a different response, more digital based I imagine.
I work in digital marketing so generally I make purchases for random ebooks, courses etc. Chrome tells me that basically every major website has been hacked or exposed.
This sounds really stupid. No bank allows it here. You get redirected to the bank's site and are asked to confirm the transaction with all the details including the amount of money, plus there's an OTP pin required. Maybe it's the damn socialism protecting it's citizens with regulations again.
You're aware that your experiences are not universal though, yes? Anecdotally, I know far more people who have been mugged than had their accounts zeroed out. I actually know more people who have been passed counterfeit money than have had their accounts zeroed as well!
It's also hard to have silverfish eat your bank account balance, or have your credit card account catch fire and disappear.
But physical cash should always be an option. You can't have a truly free society without it. Some intermediary could always have control over your transactions.
It's much easier to imagine a scenario where physical money is controlled by an outside force than crypto. Holding physical zimbabwean dollars, for example, did not ensure you held anything of value.
I think arguing that control over crypto transactions is more likely than the devaluing of physical currencies is a little far-fetched since we've seen plenty of the former without much of an example of any centralized power being able to control users actions on the internet.
Just think of all the wealth changing hands on the internet today against the will of governments.
The possibility of not getting robbed because you have $4000 cash on the till is a damn killer feature. Sure, this would just lead to an evolution in methodology. but for now its worth it.
If you both have full node bitcoin wallets it's possible, just like how it worked in the first place. But having a full node on your computer takes up >350GB of space now, so I doubt there's too many people that still do that.
Is this true? You still need connections to the rest of the network so that you know your block chain is the longest one and you get the number of confirmations that both of you feel is sufficient to remove double-spend risk. So it's not really just between the two of you, even if you both have full nodes. Right?
Save the risk of forgery, physical cash is still the only way for a seller to guarantee the dollar value of a transaction with an unknown buyer. Otherwise Paypal could block it, or your bank, or the buyer could reverse the charge, or whatever.
And that's why plenty of businesses still only take cash. Casinos want cash for chips. Peter Luger's still only takes cash. When you buy something like a dog from a breeder, it will be in cash. Any transaction where person on the other end has little recourse if your payment didn't go through will be in cash. Or if the business is popular enough to force it (in the case of Luger's).
Maybe you’re just too young but it’s still recommended to store your fancy digital cash in offline paper wallets. Maybe research what happened with Mt Gox :)
>Possession of the money is possession of the money and third parties don't need to get involved in every transaction.
That's only true if you discount the US government as the third party (at least for USD$) who are involved in every transaction, by virtue of them needing to exist for the $ to have any value or for the seller to accept the $ in the first place i.e for them to know it will still be worth something in 3 weeks when they want to spend it.
Eh, it's arguable how much the US Government is determining the worth of dollars rather than cultural consensus. I can guarantee that in the event of a zombie apocalypse where the government falls, USD would be used for a long time after.
> I can guarantee that in the event of a zombie apocalypse where the government falls, USD would be used for a long time after.
This seems like a strange guarantee, I think it's incorrect, and I would have absolutely no way in a zombie apocalypse to hold you to the guarantee. Which is, inherently, why I think it's incorrect.
A zombie apocalypse would lead to a collapse in production and thus eliminate the ability to exchange USD for physical goods and services. Currency is just a points system used to allocate resources. It's a necessary evil. If we could allocate resources in a more effective way we would do it.
What resources does Bitcoin allocate? Isn't Bitcoin merely glorifying the concept of currencies but without anything to justify its existence? Since when did we ever talk about the USD (or any other currency) as being an end in itself rather than a means to an end?
I don't think it would. In a zombie (or other type) apocalypse dollars have zero value. You can't eat them or use them as fuel. Gold may have value as a medium of exchange but it would quickly revert to barter system for food, fuel etc.
What good is selling food for dollars if you can't spend those dollars next week? Better to swap the food for another good which can be used or exchanged.
Just existing doesn't give them value. After an apocalypse event, even with some sort of US military and US government functioning dollars will lose their fungibility quickly. What could happen is an increased supply of them e.g unprotected banks/vaults could be robbed. But this would have the effect of making more dollars available, so although they exist they are not scarce, if they are not scarce then why would I swap them for 10gallons of fuel? ATMs would be easily looted and are widely located.
Kinda like you waking up to a brand-new bank account, with proof! The only thing stopping 51% on BitCoin is the cost of mounting one: were it a smaller crypto currency, it would be at risk. (I'm pretty sure I got that right, but I'll be corrected if I didn't!)
I'm probably speaking _way_ out of my league here, but I imagine it's somehow spoofable, kinda like how you can generate fake MACs or IPs, so why not? One terrifying/beautiful element of tech is that where there's a will there's a way!
It's spoofable in the same way that a hash collision or guessing a password is "spoofable", given infinite time and / or energy you could. But the chain would move on while you're generating your spoof, and you're limited by the constraints of the physical world and your available computing power.
A smaller currency would be at risk but the upside would also be smaller. Generally speaking there doesn't seem to be an incentive large enough to justify the enormous costs associated with a 51% attack.
> The problem with a digital currency, of course, is that when you hand someone a sequence of bits, they don't go away from you, so you can hand that same sequence of bits to another person.
> The "solution" people came up with to this problem was to not solve the problem, and instead solve a different problem, how to have a distributed ledger.
And what would be, at least intuitively, a solution to the "you can copy bits, give them away but also keep a valid copy for yourself" problem which is a problem for currency but also the default way digital information work?
If you had access to a near-perfect money printing machine, you would have just the same problem, we are just "saved" by the implementation difficulty. Just the same as with the ledger approach.
Hmm. But the ledger is the solution to that problem. You hand someone the sequence of bits, the ledger authoritatively rules that they are now the holder of those bits, and not you.
> None of them are actually money, like in the paper-or-gold-coin sense. They're all ledgers.
Many of the other comments have pointed out how money doesn't have this quality either. This comparison is a wash: buy gold if that's your goal (at least until we find/mine a gold-laden asteroid).
The other comparison is who you have to trust to insure the value of that currency. In the case of cash, it is your government/Treasury. In the case of cryptocurrency, it is mathematics. I am originally from Zimbabwe and have much to say about trusting the government with insuring the value of cash...
That's why I have a small clutch of proof-of-stake.
>I am originally from Zimbabwe and have much to say about trusting the government with insuring the value of cash...
Have you ever thought about how to boost the economy and thus the ability to exchange zimbabwean dollars for more services and goods? Because that is what is necessary to get the zimbabwean dollar back in order.
Anything whose price is going up is scare and its domestic production must be expanded.
Yes, you have to do the opposite of what the government did (printing more cash): remove money from circulation. The Zimbabwean dollar ceases to exist, regardless. They have adopted forex, usually ZAR and USD.
My main point is that fiat currency implies trust in some entity. Zimbabwean vendors have chosen to trust the South African and US governments.
You can do that with the lightning network.
The problem is double spend. With cash, it’s hard to copy. With anything electronic, it’s trivial to copy. That’s why it has to be a ledger. Notice visa requires internet connection as wel
> The thing about money is that I can hand it to someone. Possession of the money is possession of the money and third parties don't need to get involved in every transaction. I can hand someone dollars and take a sandwich and walk away, transaction done.
Fiat is also moving in this direction. Credit cards, are just exchanging bits, and in Asia, with Alipay and WeChat pay you are just scanning QR codes. At least with (good) crypto currencies is you can remove the third-party from the equation.
There still remains the problem of having your transaction broadcast to the entire network, but I think that is also a solvable problem.
With money though there's still someone who needs to make it "money". It's printed, its supply is controlled, its integrity is enforced. Otherwise it's just paper with numbers on it.
With crypto all of this is taken care of by the network, and with the truly decentralized networks (not all of them are) anyone can be part of the network. No one "owns" the ledger. In my mind this has successfully created something that is more free (as in speech) than any previous form of "money" other than gold.
There are third parties involved with exchanging cash, even though it might not be obvious. Central banks take part indirectly in these transactions, since they guarantee the value of the money.
The double spending problem is not a problem; it was solved already with BTC. You can always have your crypto on a physical drive, which kinda makes it like cash in the sense that you can have it in your hands like cash.
> None of them are actually money, like in the paper-or-gold-coin sense. They're all ledgers.
This is the same when people's net worth is discussed though. To the average individual that hears a net worth it almost feels like they think it's cash money. But it's on paper, as in sell all the shares of businesses and assets to cash it in.
Perception is the mother of all great products and marketing.
Signing the transaction does zip to block a double-spend without committing it to the ledger. The buyer could walk around town signing dozens of transactions for the same money and only the first seller to submit the transaction gets the money.
There's a similar problem with handing someone the private key to a wallet with a pre-set amount of money as an offline transaction. Besides not being able to verify the amount in the wallet without checking with the central ledger, you also don't know that the other party isn't handing out the same private key to multiple people.
Paper money or even metal money can be counterfeited, sure, but in low-counterfeiting environments individuals transacting can verify the authenticity of the script locally with reasonable confidence, without consulting a (distributed, decentralized) third-party to verify.
I'm not an export but i can print off a wallet key and give it to someone, on paper or usb. Sure i can give that same wallet to someone else but it's pretty quick to check the value of a wallet before accepting it.
Why do you even need physical cash? I can carry my countries currency around with me easily enough but i generally don't bother as i don't ever need to.
Other than literal precious metal coins - everything else is a share of existing or future value - it's a credit to acquire material possessions.
Take an example of burning $100 bill. You aren't destroying more than the piece of paper, because the destroyed value is instantly shared between every other unit of currency.
>The problem with a digital currency, of course, is that when you hand someone a sequence of bits, they don't go away from you, so you can hand that same sequence of bits to another
person.
I mean, you're not wrong, but this is where the cryptographic elements actually take place.
> The "solution" people came up with to this problem was to not solve the problem, and instead solve a different problem, how to have a distributed ledger.
“If I had asked people what they wanted, they would have said faster horses.”
Banks are what establish what is money, and taking ourselves as individuals, if one doesn't accept that reality, then one gets out of sync with society quickly.
Historically the events that caused this mode of exchange to be locked in were out of the hands of anyone but key economic players - world leaders and top advisors and the like. Some of them are still alive and have vested stake in the continuance of their own power.
The reset away from this depends on the incompetence and failure of institutions that otherwise permeate every aspect of modern civilization. Financial capitalism's fall will be a very big problem in its own right.
This is actually something that Bjarne Stroustrup addressed when talking about C++:
There are only two kinds of languages: the ones people complain about and the ones nobody uses.
In the case of cryptocurrencies, as soon as a cryptocurrency has any important percentage of use, these transactions are not confirmed in seconds anymore, and transaction fees starts to grow up. No one is really using PoS right now, so let's wait and see if this solution actually works when Ethereum officially switches.
You're spot on. The ETH fans love to wax poetic about PoS and how it's always around the corner and coming soon. It's been that way for ages.
Lightning Network is similar. It's been perpetually 6 months away for years.
Frankly, I'll be impressed if the current power structure within PoW cryptos doesn't find any way to hamstring PoS, mostly because they have a vested interest in keeping everything the way it is now.
I think the trick for PoS coins has to come from keeping their transactions flowing without censorship. PoS coins feel to me like I can call someone, and they could freeze funds somehow. I cannot prove my suspicion, but PoS coins should trend towards fewer and fewer validators which means fewer and fewer points of failure edit:(or rather, more and more single points of failure).
Well, yeah, the Beacon chain is running but shards is not live nor is the docking of Ethereum mainnet and Eth 2.0, so of course people are not really interested in building on it yet, it's barely in production. Once the two chains work together, I'm sure there will be an explosion of activity.
But until then, we can't really say that Ethereum is 100% PoS, although one pre-alpha project is.
I remember Stroustrup also saying how much he detested Bitcoin in his keynote from a few years ago, where he says it uses as much power as Switzerland and was saddened to know it had been written in C++.
I use C++ everyday and I am still shocked about how user-hostile it is. I don't buy the usual "backwards compatible" and zero-cost abstraction canned arguments. I identified a lot of missed opportunities for simplification... I wonder how much energy we wasted by trial and error while writing/compiling useless C++ programs /s
Jeezus people have short memories. Bitcoin solved a flotilla of problems that were blockers for an all-digital currency in 2008. The most severe and proven problem was the threat of government shutdown by a police raid of your servers, this is what killed E-gold and other predecessors. The blockchain solved the problem of having your central ledger being shutdown by the cops/IRS/etc. by decentralizing it and of course Bitcoin also solved a ton of other problems as well to make it an actual viable electronic cash transaction system. This is why it took off, not just because "it was the first to market". It wasn't, but it solved all of the real-world blockers that had killed all other attempts before it. Don't forget that we don't know for certain who "Satoshi" was and for good reason, he knew he'd have a target painted on his back by the government. He was incredibly smart to conceal his identity.
As a side-bar, a major role of money is to allow the government to easily collect taxes from their citizens and so governments have to be careful here as they must ensure that there are no challengers to their primary form of taxation payment. Bitcoin was very carefully crafted to survive government attack and finally the government accepted it by considering it a taxable commodity. While the early crypto-is-cash people are annoyed by this, it was the only possible outcome in a match between the government and crypto currency that doesn't end in outright warfare on crypto.
Now that digital currencies have moved from theoretical to a proven model people can move on to solving newer problems rather than just getting it off the ground. Now we have privacy coins which attempt to solve the problems of getting anonymous transactions among other desirable features. But wait there's more, now that we don't have to prove that electronic cash is a workable system we have decentralized finance coins now. If people thought the government hated bitcoin, just wait until the banking system realizes defi is coming.
They have to be careful because they won't be able to collect taxes. There are 2 types of taxes. Direct and Inflationary.
The second one is gone because control of money supply is gone and as far as the first one the govt can trace funds in your bank accounts but it's going to have a really hard time if someone holds crypto currency and is intent on not disclosing their real wealth.
>Why do they have to be careful? Are they going to magically going to have to start accepting Bitcoin instead of dollars?
There is zero chance bitcoin with it's current network is every going to be used as money. What might happen however is that more and more transactions could move towards other networks like nano or various stablecoins that are built on top of smart contract platforms.
If governments end up issuing a currency that is only useful for tax payments then they have effectively lost control of the monetary policy. And in any case banning crypto will only help towards redirecting monetary flow towards other countries. So in many ways governments' hands are tied in this.
Could anyone explain to me how proof of stake works (as opposed to proof of work), and how it is better? Has proof of stake been proven to be as robust as proof of work?
EDIT: The wikipedia article is easy to find[1]. However it is really short, looks incomplete, and has a lot of “citation needed” after each point. So I would rather ask on HN.
I'll give it a try, but I'm by no means an expert in cryptography.
Proof-of-work works (very broadly) by computers solving harder and harder math problems to create value. Eventually, these get so hard that solving one requires either joining a pool or a huge investment in electricity and mining rigs - which is where we're at now. This isn't good for the environment.
Proof-of-stake works by individuals "staking" some of their own coins to be more likely to be randomly chosen to "validate" a transaction (which earns them a reward, similar to hashing). Validating a transaction is trivial and uses very little electricity, but the rest of the network also checking the transaction keeps the validator honest.
While proof-of-work and proof-of-stake are both a kind of "the rich get richer" game, to get more coins in proof-of-stake all that's required is a greater investment into the network, as opposed to the mining rigs and large amounts of electricity that are required by proof-of-work.
I found this video to be helpful in visualizing the networking parts of proof-of-stake.
Kind of funny the goal of crypto was a total new, decentralized, democratic system, and what we end up (to solve the scale issue), is yet another class system where you can vote only in proportion to your wealth.
This is a massive and common misunderstanding. Publishing a block is NOT voting on its validity. Every node, regardless of stake accrued 'votes' (the correct word is 'chooses') independently of the validity of blocks just like in Bitcoin.
Blockchains that allow protocol changes via votes are an option, and how you quantify votes is a parameter, but PoS is not tied to being a government token, and 'votes' on forks (its really not a vote as both protocols exist after a fork) are made by large and small holders alike. It has nothing to do with amount of currency owned.
Nope, it's still distributed consensus rather than centralized. If one banker stops being nice, he'll loose all his funds. The current system either ignores people not-being-nice or ejects them, but they'll never lose what they made.
Compared to PoS where the biggest incentive is to be nice.
Assuming a simple PoS system of more stake=more blocks validated achieving a 51% attack is as capital intensive as it would be on a PoW system of the same size. So as far as the most basic notion of security is concerned there's no difference.
No, it has in fact been proven many times over in many research white papers to be fatally flawed and that's why no serious cryptocurrency would implement proof of stake.
Still asking out of desire to learn: How has it been shown to be flawed? With what kind of experiments? Which are the flaws? How to they manifest them self (e.g. how could you exploit them with PoS but not with PoW)?
One problem: You fire up your blockchain software and it reaches out over the internet to find other servers and ask them if they have a copy of the blockchain.
But how does in know which copy is the real one and not one cooked up by someone like me showing I own half the coins?
With proof of work you can choose the one with the most work in it and that's hard to fake as the real bitcoin blockchain has billions of dollars worth of computer work in.
With proof of stake it's hard. If there is no real cost, fakers can make thousands or millions of fake chains and how do you know which is the 'real' one?
There are potential solutions but it's tricky. Like if you have www.stake-coin.com point to the real one, what if someone manages to take over the domain?
You bootstrap the pos chain onto the pow one, so you have your trivially checkable first part. After that it.s not exactly trivial to fake the whole chain without holding validators private keys (remember, they had stake in pow chain).
Im kinda at a loss about what other vectors of attack possible, hard to find any digestible info, and pos protocol designs are really complex.
I am not searching down all the whitepapers for you, if you truly want to learn then you will need to dig into the myriad mathematician's white papers against Proof of Stake.
What defines a currency being "better" than another? Is it number of transactions? Is it acceptance among merchants? Is it low fees? Is it stability in purchasing power? Is it likelihood that there will be a fatal flaw in the system that causes financial loss?
Every project has its own strengths and weaknesses, but it's hard to argue that Bitcoin isn't the best on many of those measures. It's all about which of them you as an individual value most.
I'm a big fan of bitcoin and a few altcoins, including some PoS. But I feel like you are understating bitcoin's security. It has been very well tested and has a large bounty - both in its market cap and value of transactions that have not been susceptible to any double-spend attacks.
Other coins might sound good on paper -- adding new features but introducing serious design errors that have yet to be discovered because they're not a big enough target.
You're right. But security today does not guarantee security tomorrow in a landscape where mining incentivizes economies of scale. The more mining power converges (as it is already doing), the more likely for a fewer entities to collude. While it may not be in their interest given their investment in the project, who says that a government or malicious actor might not?
"Choose your own fees" still holds, but everybody has freedom around the choice of fees. You are free to propose a fee that suits you and miners are free to ignore your proposal.
I am running ETH nodes at home, on RPis. They are even participating in the (future) consensus model through PoS.
I'm a fan of Bitcoin, and I'm not sure why the random need to criticize Ethereum here. Bitcoin has enough reasons to be useful, no need to be insecure about other projects being useful too.
I was under the impression that the RPi CPU is too slow to process/sync blocks. And unless you have an SSD to store blocks, IO will limit your capacity to verify new incoming blocks every 15 seconds. This was my experience a few years ago.
Are your running a full archival ETH node on a RPI with a 3TB+ SSD attached?
Half of them are debatable and the rest is true but useless.
You gain nothing from using a system that's 12 year old over one that's 6 years old.
Also more nodes just dont add any usefulness anymore at some point, it just more not better.
Reliable is useless without comparing it to something else.
BTC had unintentional forks and many small possible double spends and all that stuff in the last 12 years. Its overall reliable, sure but at what metric. Incidents per time? incidents per Tx? Or just the fact that it didn't die in the last 12 years?
Another armchair cryptographer on HN who has no idea what they're talking about... somehow this is acceptable when it comes to Bitcoin. I feel like I'm being charitable here but what exists are other cryptocurrencies which trade-off security and/or decentralization in favor of some other properties.
In addition to technical difference between cryptocurrencies, there’s also a difference in financial properties of the token itself, e.g. liquidity. Liquidity refers to how much the price moves when buying from or selling into the market.
For example, you can sell roughly 5 million USD worth of litecoin on the Bitfinex exchange until you push down the price by 0.5%, but for Bitcoin this figure is roughly 500 million USD (~100 times greater).
The greater the liquidity of a currency the less value is lost when exchanging back and forth between it and e.g. USD.
This attitude that people who disagree with you are stupid or don't know cryptography about is part of the problem, and why people still buy into BTC when there are technologically far-superior coins out there.
So you just demonstrated the problem that the OP was talking about.
My point was that OP's point and yours, "there are technologically far-superior coins out there", is not true by any stretch of the imagination. Pardon my attitude but this is getting out of hand on HN lately. It seems the idea that you shouldn't authoritatively comment on subjects you are barely familiar with goes out of the window when it comes to Bitcoin and cryptocurrency. If you disagree, I'd invite you to cite some respected cryptographers and researchers who have made such claim.
Theres a lot of people on here who have no idea what they're talking about but make claims there is a better coin. Theres always a tradeoff they dont fully comprehend.
Fast and cheap transactions have been around since long before Bitcoin. Bitcoin's innovation was to make those possible without a trusted centralized intermediary. Therefore, decentralization and security are arguably the most important properties when evaluating cryptocurrencies. And Bitcoin is king on that front. Cryptocurrencies that promise faster, cheaper or "more energy efficient" transactions pretty much always have to compromise on that.
But as an end user, you probably wouldn't know that. That's why I'm frustrated with people who authoritatively claim things like "there are so many better crypto-currencies" while not disclosing that they're merely commenting from a "user experience" point of view.
I do think Ethereum will overtake Bitcoin eventually in usage. In some ways it already has. Ethereum's transaction fees are set to drop like a rock over the next few years, and so many useful things are built on it already.
What usage? Isn't bitcoin used only for speculation, and a bit of crime on the side? I'm not aware of any usage for bitcoin that isn't purely commodity trading (with zero actual underlying value) or scams.
Every one of those "apps" is usage on Ethereum, everything from trading (Uniswap, think of it as a Coinbase competitor), loans (Maker), to mutual fund like assets (Yearn).
It's hard to convey in a few words how much better buying a house using Maker/Eth was compared to going to a bank. Everything about the process smashes the traditional system.
Ethereum has had a few other interesting, non-black-market uses over the years. DeFi, game assets, NFTs, etc. And the technology has actually evolved. Bitcoin is just...still bitcoin.
A significant % of Bitcoin hasn't moved in years, people seem to be using it as a store of value. Crime usage is magnitude smaller than traditional currencies (source Citi's Bitcoin on the tipping point report).
The recent activation of the beacon chain (and ether staking on it) means that they're committed to proof of stake now. All currently staked ether would be stranded otherwise.
And now the PoS chain has already launched and been working great. Next step is just to move the PoW chain to it. But they are definitely going slowly and safely. And it is definitely a slow process. :(
Ethereum is already transitioning to proof-of-stake which has a number of benefits including much lower power usage. I'm so tired of people equating bitcoin with all cryptocurrencies.
Yes, Ethereum has been working towards several long-tail projects for years. I think it's more important to distinguish that nothing good or important has come of Ethereum though, and that it is NOT money, and it is not a safe currency. The blockchain is fraught with front-ran txs, the mining is very centralized, and all projects atop ETH suffer dependency on it's success. The blockchain is growing very large which leads to further centralization on very expensive customized equipment. DeFi is a buzzword that means little but "super alpha experimental money leveraging tools" and financial instruments on the cutting edge. Ethereum is Dave & Busters tokens in comparison to Bitcoin being real money.
> more important to distinguish that nothing good or important has come of Ethereum though
I mean, Ethereum has the second largest marketcap of all cryptocurrencies and it feels like 80% of the research & development either comes from Ethereum directly or close-by ecosystems.
To say that Ethereum is Dave & Busters tokens when compared to Bitcoin is funny, since every single cryptocurrency is magic internet money anyway.
Right now it has >$5 billion staked and >100,000 validators on the PoS network. What remains is to transition the rest of the network and eliminate miners, which is a relatively simple process.
Come on - you’d say the same thing about the freeway that plowed through some wonderful neighborhoods and blights us with noise and pollution. It’s all good. Cars are going electric, Ethereum is going to become efficient - problem solved. /s
ETH wasn't designed to be a store of value, there is no max supply and the emission rate is higher than even Vitalik predicted/expected... storing your money in ETH is generally a bad idea.
They are changing the transaction fee pricing system though to a model that 'burns' (dumps to /dev/null) part of the transaction fee when there is congestion. Exactly how much will be burned is hotly debated, but it will put a damper on the inflation side from block/staking rewards.
The fact that network and first to market effects are so strong in crypto is an indication that the market doesn't actually value things like proof-of-work or faster transactions or smaller fees. Sure, there are a small number of enthusiasts and professionals who do, but they don't make a market. Most of the people involved just want to buy a worthless asset and trade it to somebody who will pay more for that worthless asset. The bitcoin brand is the most import feature for that use case.
It is an indication that in a free market, people are able to choose what works best while the forks and knockoffs prove that nobody believes in them, or that they are unsafe networks.
It's not just about a currency usage network effect but also about speculative investments and alternative ways to "store" money. Depending on this you can compare it more with stocks without a company behind the stock or gold which for arbitrary reasons can't be used in manufacturing.
Without this and usage for criminal purposes bitcoin would be worth a fraction of it's current worth and as such likely not worth mining for.
This also means IMHO that Bitcoin as currency not just already failed, but did so pretty hard.
As a non currency speculative investment/mony parking product it didn't fail. But it wasn't meant to be such a think.
Furthermore the massive environmental problems it introduce by having a high such a absurd high need of energy and other economical problems (drain of currently limited chips without producing "general" economic benefits, usage for criminal activities if combined with mixers etc.) makes it a highly flawed product.
It should be noted that this is Bitcoin specific. Other cryptocurrencies have this problem much less by neither having absurd high energy costs, nor having absurd high purely speculation/money parking based prices.
Sure there will always be some drain of energy and some drain of chips and some usage for criminal activity. It's just that for Bitcoin thinks have gotten out of balance and besides availability through the network effect there is no reason to use Bitcoins for normal (legal) payments. It's just too costly, slow and price unstable (due to speculative investments always forming a bubble) to be used for normal payments IMHO.
Exceptions can be countries with a "broken" economy, but even then other crypto currencies would be normally preferable as far as I know.
< Without this and usage for criminal purposes bitcoin would be worth a fraction of it's current worth and as such likely not worth mining for.
Is there anything definitive on this? I've heard/read that less than 3% of bitcoin was used for illegal purposes but I don't know if they include tax evasion in that.
With bitcoin, you are paying for security. I know if I send you a bitcoin transaction there is a high probability it won't be reverted in our lifetime, possibly ever. I'm not a maxi but these new projects don't have that guarantee yet; likely they never will.
Like really - did your friend owe you $200 and you wanted to make sure he couldn't pay you something over square and then call his credit company and say his card was lost?
Like are you a shop online and you wanted to make sure ALL of your customers are paying in Bitcoin so they can't claim someone stole their card?
Are you a party to a lawsuit and the judge decided to oversee the other party pay you (the fictitious plaintiff in this scenario) $50000 with a check and you're worried he's calling his bank afterward and cancel the check?
None of these scenarios would be made better with Bitcoin:
Transaction costs
Some online stores ARE scams and it's better to have a real money trail - especially the ones involving bitcoin
The last scenario is easily solved because the judge would be able to provide much harsher realities for the check canceller.
From a practicality standpoint every time someone talks about irreversible transactions I just eyeroll at the actual logistics of that working in our world of 7B people.
The fundamental purpose stated in the bitcoin whitepaper is to provide an electronic equivalent to physical cash.
The first line of the whitepaper[0] is "A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another"
In practice some "third" party (bank, paypal, square, venmo, etc) will still be involved in most transactions because of the scenarios you have described. But this would be because they are helpful and add value not because they are necessary.
Security is not usually the main use case of a service, but a necessary feature of one. Bitcoin can do many things, and its main use case right now is store of wealth, so with your examples you've demonstrated you don't understand its most basic function.
When you notice that multi billion dollar transactions of Bitcoin are made every blue moon you might not be scoffing at what its security protocol is providing it.
Do you mean to tell me you just cannot understand why some people want money with total finality to use with anonymous people across a network? I mean, at this point I have no argument with you I just can't understand your line of thinking. Cryptocurrency, or digital cash, digital money was an idea for a decade+ before Bitcoin finally solved the problem. It's an obvious money with many obvious use cases. Many thousands of folks around the world are using Bitcoin on a daily basis. It's like the phony fees story people spread about Bitcoin, while those of us using Bitcoin daily can send any amounts of money we like for payments to folks around the internet for a couple dollars.
Let me be totally blunt with you since you are acting clueless as to how people use money on the internets.
I pay people ALL THE TIME, in Bitcoin, for codebase work that they perform. I do not want banks involved, I do not want to know their real life identity, I do not want them to know my identity, etc. Therefore, do the work, I pay you. We have a Web-of-Trust (Something folks here in general just seem ENTIRELY clueless about) and we trust eachother just as far as the Web of Trust and our online chat history and trust level allows. Do people get ripped off at times with payments? Sure. You lost $50 bucks, or whatever. Maybe you'll learn not to trust that party again. It's very simple. You don't need to act clueless. It's money, and if you use it correctly it just works. It's not reversible. If I were paying someone who ran off with my cash, it's the same shit.
The only reason proof of work is working for Bitcoin is because of the amount of hashing power put into it.
Nearly every other bitcoin fork can suffer a 50% attack because the network is sufficiently small that one can rent enough hashing power to attack it (see Bitcoin Gold).
Alternate coins absolutely need some other mechanism to secure their chain that doesn't require a critical mass.
This is precisely why those other chains are only imitators with no true value. The longest chain is bitcoin, and all the forks thereof are imitations that hold no value or network effect. This will always be the case when someone tries to fork Bitcoin rather than actually do some new cryptographic work.
The reality is that consensus only requires people to agree on something. It does not require burning tons of energy or military action.
Prisoner's dilemma is only a thing if you consider finite games, ie. played for your immediate benefit. If you consider an infinite game (for example the good and survival of humanity in perpetuity), it can be clearly shown that there is better solution and it is for people to grow up and just agree on a protocol that does not require burning energy or military action.
Do you think people will cheat each other given chance? That may be true when there is good chance of not getting punished for it. But if you ever lived in a small community where people rely on each other for survival (ie. infinite game), you would notice people will not cheat each other when they know they will have to rely on the community until death.
People will ALWAYS cheat others given the chance, and especially when facing very little online repercussions. I am not sure who you were replying to here. I do live in a small community, I have relied on a few others for survival, and I have been both stolen from, and price gouged due to others who would try to make skin off my back. I assume you've got less real life experience in these matters. I live on the basis of trusting nobody else but a very select few and being very self sufficient and reliant. I grow hundreds of pounds of my own vegetables, for instance, and I would seldom ever buy vegetables from a store throughout the season. Least of all, my trust in government. Most who initially got into bitcoin very early on did so for libertarian values towards government and monetary systems. I can really assure you that most of us who got into Bitcoin in 2010 did NOT do so because we initially thought we were getting lucratively rich or having thoughts we were selling assets to folks for a higher price just to get out. No, we got into Bitcoin because we see USD fiat paper as trash cash that is ever losing value and is backed by nothing but a phony government system. Used to keep people poor, used for financial control.
Think why you decided to write you only trust "select few"? Aren't these the people you plan on interacting with for a long time like family, friends or coworkers?
That's because when you plan to work with somebody for a long time, your game changes from finite to infinite. It suddenly makes other than altruistic sense to invest actual resources into fostering the relationship and avoid damaging this relationship by cheating.
This is neither projection, nor a deflection due to myself not being trustworthy and I find it strange that one would jump first to this. No, it's situational due to life experience lived. People can and do take advantage of systems, which is more to the point of what drew libertarians to Bitcoin. Now move along.
Security perhaps (if you're sufficiently careful how you use it), but I would have thought stability was also pretty important if you're thinking in terms of lifetimes. Bitcoin doesn't show much sign of offering that.
Ethereum and Litecoin for example are far, far less secure than Bitcoin. The centralization of ETH will continue to increase, and mining hardware for Scrypt for Litecoin is nearly non existent in comparison.
Additionally, PoS attackers can have their stake slashed, so they may never attack again. However, you can't slash PoW attackers, once attacked, they will just keep on coming back (no matter how many times you change the hashing algorithm)
And you need to bootstrap your PoS system by enriching a bunch of insiders so that they can validate your transactions. PoS systems are unfit for being the decentralized digital store of value. Bitcoin has the most fair launch any cryptocurrency can ever have. There is no alternative for Bitcoin's use case.
PoS systems can be bootstraped by PoW, so no problem there.
Bitcoin did not have a fair launch either, there was a lot of information asymmetry between the project insiders and the public. Satoshi's stealth-mine of ~1 million BTC for example.
No, if Bitcoin was PoS, Mt Gox would bail themselves out and govern Bitcoin to this day. Early on, Mt Gox was responsible for over 80% of all economic activity on the Bitcoin network, and was by far the dominant holder of coins.
This isn't true. You don't understand Bitcoin. Proof of work is the only way to secure a decentralized system like Bitcoin's. Proof of stake requires trust in a group of validators. An oligopoly of sorts. A proof of stake system is unfit for a decentralized store of value. Alternatives to Bitcoin enriched a central group of people. Bitcoin's distribution was "fair". There is no replicating it.
Picture bitcoin in its final state, where central banks trade in and out of Bitcoin to weaken or strengthen their respective currencies. Bitcoin is the only solution, and other cryptocurrency is fit for the task.
Surely proof of work also requires trust in a group of miners, trusting that 51% of them don't collude?
As mining complexity grows, surely this problem is only exasperated, since you need a bigger investment to be able to mine effectively, which would presumably result in an even smaller group of more powerful miners?
Bitcoin’s excessive energy consumption is a feature, not a bug, designed to deter a 51% attack. It will only get worse as the price of BTC increases. If we reach an era of nearly free energy, the price of BTC will fall.
Unfortunately, there really aren't that many better. Full transaction privacy (addresses not visible to public + amounts not visible to public) does not exist in any of the top 10.
+ offline transactions should be possible (allowing sync with the chain whenever), but also I do not think any have that.
A good crypto-currency is like cash, with a nice physical gauge theory (allowing offline transactions) guaranteeing security + any transaction processing rate.
Every single cryptocurrency now is still a research project first.
I'm having trouble seeing how you could have offline transactions that prevent doublespending. Could you expand on "nice physical gauge theory (allowing offline transactions)?"
If you have a good idea here, it might be possible to implement as a second layer on a chain with smart contracts.
That title might be misleading; the doc is just about generating transactions without the sender and recipient needing to engage in an interactive protocol. It doesn't address double spending.
Since you asked: nano is the only _pure_ cryptocurrency using a variant of PoS called Open Representative Voting. Other projects are piling on features to chase trends (defi, smart contracts).
The inherent problem with having multiple functions, is that it inevitably takes away from the primary purpose of pure store and transfer of value. Cash for example, can only be cash and has no utility except that of being stored, or switched for a good or service, or another form of cash from another country. If cash suddenly had a "feature" (such as fees, rewards, etc), the feature in itself will suddenly take priority over cash's original purpose of being a means of exchange and store of value. Transfer and store of value can't be separated. In order for something to be a good store of value, it needs to be a good transfer of value.
Taken from a Q&A with nano's creator[1] around a question of why doesn't nano implement smart contracts:
> Smart contracts can’t cause side effects to happen. They can’t move property and they can’t negotiate unforeseen disputes. When you carefully look at it, all smart contracts take the form of a prepayment and slow release of locked-up funds. People haven’t and won’t use this for multiple reasons. Economically the opportunity cost of locked-up funds means they can’t be used elsewhere while locked up. From a practical standpoint, something simple like a rental smart contract could mean you’d have to lock up your year’s rent to slowly trickle out to your landlord. People simply don’t have this much money to lock up. Smart contracts can’t sample unforeseen circumstances, something like a judge ruling in contradiction to a smart contract means it will continue to operate incorrectly given the new situation. Oracles in smart contracts will very quickly become infeasible. Consider writing a contract about a building in a remote town, who is the person that’s going to go on location, make the determination, and feed the input into the system? How are we sure they aren’t coerced to lie?
Ethereum currently has a working proof-of-stake network. As far as I know it's the most scalable version currently live, capable of millions of nodes without any sort of delegation. Right now it has over 100,000 nodes and has run perfectly since it launched on Dec. 1.
However, so far it doesn't have users other than the stakers themselves. It's not all that hard to transition everything over, it's just that it's a live $200 billion economy and they're being really careful about it. Should happen next year though.
Tezos is interesting, upgrades happen without forks and are voted on-the-chain. It’s developer-friendly and seeing slow adoption with some governments. Allegedly France’s C3N uses it and Reno is testing it with NFTs.
Bonus points for it being overseen by a Swiss non-profit, they fund development efforts and encourage adoption.
Who knows what the end result it, but I think the ideas there make it favorable compared to BTC and ETH. Not to mention lower transaction fees :).
Don't forget, it is written in a purely functional language. So they are able to apply formal verification to the code. They adopted recently privacy-preserving smart contracts. They are able to adapt all the good stuff other chains are testing. Therefore some people say other blockchains are just their test net.
Those are not better. Bitcoin offers too many things, trading off decentralization and security for speed is not exactly a better solution.
Moreover, those "better" solutions are mostly operated and promoted by founders with questionable profit incentives, they also control the rules of those crypto-currencies.
Bitcoin shines due to its fixed Rules, unknown founder, best incentive structure.
Yeah, I think bitcoin has been completely surpassed technologically speaking. Monero in particular solved almost all of bitcoin's problems yet still can't compete with it in popularity.
Isn't litecoin also better than bitcoin on the technical side, with very few changes?
I think Monero failed at the name. Bitcoin's name is self defining to some degree which I think helped make it gain a lot of popularity. It's also impersonal, bits and coins, there's no real branding there to get twisted up with. When people first hear "bitcoin" they already have constructs in their head about bits and coins and it elicits free advertisement as the imagination tries to create a working theory on what a bitcoin is.
Monero makes me think of some kind of failed sports car nobody has ever heard of. I'm not counting it out, but if it's really better on the technical side then it needs some prominent evangelists spreading its use.
Litecoin is literally a fork of Bitcoin with the hashing algo switched to Scrypt and made by Charlie Lee (which was hardened against ASICs mining) with a 4x supply release, and which ironically became mined primarily by custom Scrypt ASICs only. Whatever in the world would make you say "Isn't Litecoin better than Bitcoin?"
XMR has the Bitcoin core devs developing for it and it has nothing technologically "surpassing" Bitcoin. Bulletproofs for Monero were written by GMaxwell. Do all people on HackerNews outside of my own bubble also constantly speak about things from a position like they know things when they clearly know nothing of the subject matter?
XMR is great but no, it does not have Bitcoin core devs developing for it. And no, nullc did not implement bulletproofs for Monero. Maybe you meant nullc designed confidential transactions. A modified variant of CT was then implemented independently in Monero by Monero devs.
I must admit to not following recent XMR development much the last couple years and last recall after Maxwell wrote bulletproofs that it was intended to be implemented. I did check and see that it had been re-written and implemented by another in a different custom-tailored way. I do pay the XMR guys respect for doing their thing and branching their way. No disrespect, I should have generally said that the Bitcoin core devs have paved work for them. No, I did not mean core devs are writing all XMR code.
Instead, it shows your lack of knowledge on safety and security of a Proof of Work blockchain with the network effect behind it, vs Proof of Stake which is flawed and insecure all in general.
Actually, isn't it the case that the first to market often fails, and it's really the second or third to market that usually has the better investment opportunity?
Because PoW is easier to implement correctly than PoS.
PoW can be as simple as checking a hash (in addition to the basic block rules). PoS has a lot more rules, for example Eth has a lot of PoS rules and includes features like slashing which improve economic securities. https://docs.ethhub.io/ethereum-roadmap/ethereum-2.0/proof-o...
Because PoS effectively means a handful of exchanges run the coin. This is far worse than a handful of mining pools, because pools depend on many more individual hash power providers.
“Bitcoin uses more electricity per transaction than any other method known to mankind, and so it’s not a great climate thing”
That's the sole actual quote attributed to Bill Gates in that article (which doesn't even link to any source). The rest is the author conflating their thoughts with Bill Gates's.
It's truly a pointless article, but that hasn't stopped tens of people from spitting out the same arguments about bitcoin that you see in every HN thread.
This is the only comment that matters. This article is merely an opinion piece with a factually fake click bate-y headline, aimed to rile people up instead of inspiring thoughtful conversation.
It's one of those article we point to when we complain about the media's lack of credibility.
The "electricity per transaction" idea they have in mind is so flawed, I don't even know where to begin. I just don't understand this burning hatred towards something like bitcoin.
People attribute "greed" to the rise of bitcoin's usage, is that supposed to be a moral high road they're taking by avoiding "greed"? People love woke-shaming people into not doing something. Isn't this problem of "greed" going to be present in every system that needs to be bootstrapped from the scratch?
I wish people would differentiate between Bitcoin and Cryptocurrencies: Yeah, Bitcoin is crappy and way inefficient in different aspects. Anyone who knows a bit about Cryptocurrencies knows about it.
At this stage, it is like in the late 90s when people said that "The internet was very unsafe" because Internet Explorer 4/5 were crappy insecure. Yeah, everybody with the least amount of computer knowledge knew how crappy Explorer was.
Bitcoin is a beautiful concept that has been bastardized by economies of scale. The mining concentration is decreasing its security over time. The centralized block structure and exorbitant fees will afflict it more and more as it grows.
Even arguments about renewable energy being used to mine BTC are moot, because they don't consider the opportunity cost of what could be done with all that energy instead.
I truly believe in a decentralized means of exchange, but Bitcoin is the Encarta equivalent. There already is a Wikipedia equivalent, all it takes is a little research. Once you find it, you will know. I won't shill here, as I don't want that to dilute the points of Bitcoin's increasingly problematic issues due to its growing scale.
That being said, the cryptoverse is drowning in sh*tcoins, and I completely understand anyone even remotely mentioning an alternative to Bitcoin being inevitably categorized as a shiller and therefore not worth listening to.
I see some ideas maybe having real usefulness. Large scale inventory/tracking/monitoring (part production, transport, etc) could lubricate a big portion of the world. A big secure unified store of tracking in a way. Am I the only one thinking this ?
There's definitely a lot of use-cases for decentralized blockchains, I agree. If implemented correctly they could fight corruption, improve accountability and traceability and whole lot of other good things. The thing is, blockchain =/= cryptocurrency and therefore blockchain =/= bitcoin. Btc is a cryptocurrency that happens to use blockchain as a decentralized way of signing and keeping track of transactions.
> Even arguments about renewable energy being used to mine BTC are moot, because they don't consider the opportunity cost of what could be done with all that energy instead.
That argument itself is not great either because it assumes the fixed pie fallacy.
A growing pie doesn't refute the opportunity cost argument. Even if you grow the energy supply, you have to consider what else that energy could be invested it, be it food, or housing construction, or transportation, or even space travel. Energy is the real currency in this world, convertible between different forms, and mining bitcoin is sort of like an unavoidable thermodynamic loss for doing any work -- a high cost one.
>Even arguments about renewable energy being used to mine BTC are moot, because they don't consider the opportunity cost of what could be done with all that energy instead.
If I launch a BTC miner into space and use a star to power it, will you worry about what else could have been done with that energy?
The more remote the energy source, the higher the cost to deliver it to a centralized grid, meaning it will probably be wasted anyway if it can't easily be converted into an easier to transmit form, BTC. Rather beam internet through space than attempt to beam energy.
> If I launch a BTC miner into space and use a star to power it, will you worry about what else could have been done with that energy?
Well first of all you used a ton of energy to get it to space. But yes, I would definitely worry about it. There are a ton of other CPU intense jobs you could do with a rig like that that would be more beneficial to humanity. Medical research for example.
It doesn't matter where you do the computation, that energy could always be used to do something more meaningful.
The same is true about a lot of computation that is done now. But bitcoin is far more "wasteful" of compute than most other things.
The point is that without btc the energy wouldn’t have been captured anyway. In theory if all btc miners used only renewables, the price of renewables would drop, and become more affordable for others, and the net impact on the environment would be positive.
Renewables are infinite, we are constrained by our ability to capture them efficiently enough to beat fossil fuels.
There are probably other factors at play that prevent this from working in reality though
Renewables aren't infinite; they are constrained, just as you said, by our manufacturing and natural resources to build vehicles to collect them.
Unless BTC somehow manufactures more solar panels or provides more natural resources, then any resources consumed by BTC are resources that aren't used for other purposes.
Ultimately, we are always limited in how much we can accomplish, and devoting resources to BTC necessarily takes away resources from other uses. The only question, then, is if BTC is a better use for those resources than other things.
The idea is that economies of scale and increased incentives drive forward new innovation in technology that increase the amount of renewable energy that can be captured.
Eg if we need to manufacture 100x more solar panels than last year, the cost per solar panel will drop dramatically, and the efficiency will rise due to the volume of investment in solar panels.
We are not limited in how much we accomplish as technology provides efficiencies that allow us to grow, it’s not a zero sum game.
> In theory if all btc miners used only renewables, the price of renewables would drop, and become more affordable for others, and the net impact on the environment would be positive.
No. If demand rises, so do prices. Not the other way round.
Not if your goods are infinite. There’s an infinite amount of sunlight and wind, if demand goes up, more tools/breakthroughs in tech will be made and the costs will drop dramatically.
See battery tech and solar panels lately.
Only if we hit a hard resource and tech barrier will we not be able to move forward.
What benefit does it supply to humanity? I can think of plenty of uses for a distributed ledger, but what is the use of Bitcoin that can't be done some other way?
I would argue that bitcoin isn't money. It's an asset that has to be converted to/from money on each end to be useful. There's not a lot you can buy directly with bitcoin. Sure there is more every day, but even then the vendor is really just providing a hidden bitcoin conversation service, because I don't think there exists an entire supply chain that can be done with Bitcoin (as opposed to say USD or EUR).
Furthermore, all bitcoin transactions involve many 3rd parties. The key feature is that you don't have to trust the third parties, not that they don't exist.
Sort of, but not really in the same way that a banking ledger is maintained by a bank. You don't need to trust the other 3rd parties to maintain it properly, and you are also "maintaining" the ledger yourself.
The irony is that the exact society destabilizing grand visions of the future billionaires advocate for are some of the main drivers behind people embracing Bitcoin. If you push a "you own nothing" WEF approved dystopian tech oligarch reality don't be surprised when people adopt an asset that cannot be confiscated by the government.
> If you push a "you own nothing" WEF approved dystopian tech oligarch reality don't be surprised when people adopt an asset that cannot be confiscated by the government.
Completely agree. It's like something straight out of cyberpunk. Governments everywhere are just printing money like it's nothing and we're supposed to just accept this. Cryptocurrency doesn't systematically rob people via inflation.
I find it really cute that people think that a fully transparent public ledger, where every transaction is written for all to see, is the way to escape government control.
Remind me again what currency was used on the Silk Road for purchasing illicit goods and services. And how many of those vendors were prosecuted by the US gov?
It is silly if by "escape government control" one means avoiding taxes, buying illegal substances, etc.
But if by "escape government control" one means a currency that the government cannot interfere with to censor/stop transactions, or a currency that cannot be debased on the government's whim, the public ledger is exactly why bitcoin can do what it does.
Monero will hopefully make it hard enough that governments can't discover the information without significant effort. They'll probably still be able to target specific individuals but perhaps we can stop dragnet surveillance of everyone.
Exactly this. Bitcoin is the result of the gross power imbalances present in society. It's ironic that those on the heavier end of the scale, like Gates, are attacking Bitcoin with the cudgel of environmental policy. Rather than fix the power imbalances that are the root cause of his supposed gripe, Gates is advocating for the status quo enjoyed by him and his contemporaries.
Sure, but Bitcoin's wealth and access is also very concentrated. If you replace USD with BTC, you still have a power imbalance, just a slightly different one.
The real power imbalance is the Central Bank's power to confiscate wealth by inflating it away aka money printing, and not to forget the confiscation of physical gold by the US in 1933 (thanks FDR). There is a reason why countries decoupled from the gold standard to fund WW1. They got near infinite access to the nation's wealth. The loser of WW1 ie Germany eventually suffered hyperinflation, as have countries like Zimbabwe and Venezuela recently. Should Governments have the power over your money to the extent of making it go down to zero? That's what happened in all of these cases.
The GP's point is that even if we switch to Bitcoin completely, there will still be a hierarchy of financial players, with regular people at the bottom, just like in the current system.
There are ~150MM people working in US, so let's say that only these 150MM need to perform financial transactions (get paid, pay others, etc.). How many of these 150MM will be direct participants in Bitcoin? If not all of them are miners, there will be some necessary centralization.
Why should anyone trust the 10,000+ Bitcoin miners? Do I as a regular user have more freedom when dealing with these 10,000 miners vs the 4,000+ US banks?
The problem isn't with US banks but central banks, and it isn't with concentration of wealth but confiscation of wealth through money printing
We very well might have Coinbase, BlockFi etc. act as crypto banks, and BTC whales as the new rich. That's reward for their work and belief. What do you think is the threat vector from BTC miners? The protocol nullifies such threats.
What would be bad is if a central authority could confiscate your work output at its leisure. That's the real battle here
It certainly isn't. Hence, we will continue to have taxes and regulation.
However, the BTC mantra is "not your keys not your coin". So if you leave it on Coinbase, you are welcoming attack by nation states to confiscate your cryptocurrency. This isn't an imagined threat. The confiscation of gold by FDR was a very real event that forced citizens to sell gold to the Government at a fixed price (of USD that the state printed at a whim) https://en.wikipedia.org/wiki/Executive_Order_6102
And what stops the bitcoin miners from collectively deciding that their current bitcoin reward is too puny and changing the code to give them 1M bitcoin per block?
If BTC miners band together to cause inflation, then people migrate to ETH or <insert other crypto>. BTC loses value, and them miners have 1. not gained value even with the extra 1M BTC per block, and 2. lost value because their mining rigs generate less value per energy unit.
Miners access to change the code is the same as you and I. Bitcoin is open source and code changes are reviewed by layers and layers of developers and approvers. Take a look here: https://bitcoin.org/en/development#code-review
Not to mention, they literally have $ millions in vested interest in the success of BTC by virtue of setup and mining costs. Such a move, even hypothetically, unless it is justified somehow, will cause loss of faith in the value of BTC and the fall in the value of BTC will make them lose value in mining as they earn these in BTC as well.
> The primary goals of the [Gates] foundation are to enhance healthcare and reduce extreme poverty across the globe, and to expand educational opportunities and access to information technology in the U.S.
What are you saying? That we should take the mission statement of the Gates foundation at face value and as something that represents the motivations behind everything he does and says?
No you are not, and the Gates foundation has absolutely not done anything to address the actions of central banks or the the United States' weaponization of the current financial system. Giving out malaria nets in Africa has nothing to do with any of this.
> An asset that cannot be confiscated by the government
It might be intractable to confiscate bitcoin by attacking the math, but why wouldn't governments just put people in jail until they pay up? With adequate control over the internet, governments would be fairly able to track who's transacting.
Moreover for the vast majority of people on earth would still have basically zero money relative to the emerging bitcoin oligarchs. It would be a grossly unequal society, where there would need to be some non-math-based approach to getting money from the wealthy to redistribute to the less fortunate.
>Moreover for the vast majority of people on earth would still have basically zero money relative to the emerging bitcoin oligarchs. It would be a grossly unequal society, where there would need to be some non-math-based approach to getting money from the wealthy to redistribute to the less fortunate.
Those oligarchs won't be able to print more bitcoin or exclude (sanctions) their political enemies from conducting trade. Seems fairer than the current system.
>Those oligarchs won't be able to print more bitcoin or exclude (sanctions) their political enemies from conducting trade. Seems fairer than the current system.
Sure they would. If bitcoin continues to exist much longer, you'll likely see the larger governments define a set of rules for domestic miners, perhaps including requirements to only process transactions from registered accounts or signed by specific keys, or otherwise authenticated. Any international agreement on such a system reaching significant hash power would fork the ledger into legitimate and illegitimate versions, and generate obvious consequences
Presumably GP is talking about coercive imprisonment (e.g. contempt of court). If the court has ordered you to give something up, and you don't, they can imprison you to coerce you to obey.
At what point did Bill become an expert on everything? It's cute that he takes his little bag of books and secluded himself in his she-shed and reads. But honestly, why do we now trust him to be an expert on so many subjects when he hasn't even gotten an undergraduate degree in anything, let alone spent decades studying a field. I can't tell you how many books I have read by experts that later turned out to completely off base or wrong to a certain degree. Just because he chats with experts and reads books on subjects doesn't make him an expert, it makes him well informed but not an expert. I am an expert in what I do and have spent over a decade on it, and I am wrong or have to look things up all the time, am I missing something? Did he go back and get a doctorate that I missed? He seems to be an expert on too many subjects.
Where is this rage coming from? It doesn't take an expert to see the damage bitcoin is causing for the planet, the exernalities are pretty clearly outlined (although conspicuously ignored by crypto-evangelicals). His quote in the article is true.
I also don't understand the attacks on his academic credentials. He had been working in his field since he was 13, he's published in CS, and he was taking graduate level classes at Harvard as an undergrad before he dropped out to found Microsoft. So yes, he has spent decades studying a field. The man is unarguably a credentialed engineer, and anyone in this field should know that you don't need a B.S. in CS or a PhD in C.S. for that.
I think it's coming as a reaction to Bill Gates's status as media darling; his own fondness for the limelight; and the fact that someone somewhere thought it was a good idea to make a documentary deifying his brain.
It's coming from the fact that Bill Gates is one of the richest men in the world and has massive sway over his followers. This is dangerous. It's the same reason celebrities speaking on issues they have no idea about is dangerous. People will take his word for truth when he's no more informed than the average citizen on what's happening.
People do that for everyone. It doesn't have to be bill gates. You might believe some conspiracy theory because your uncle shared it on facebook and you trust his opinion more than some domain expert.
I'm not sure anyone is being swayed by Bill Gate's opinion. Who is pushing the idea that he is an expert, or that expertise is even required to have an opinion?
Uh the media... I mean he's everywhere being interviewed constantly on what his opinion is on everything. This obviously promotes the idea (right or wrong) that he has some idea of what he's talking about.
The media also interviews Kanye, Elon, and the cookie monster because they are celebrities but that doesn't mean we have to believe what they say.
I think it is reasonable to think that bill gates has some idea what he is talking about, especially because in this case he is essentially saying 2+2=4. Still, he is not the definitive authority on crypto.
It has nothing to do with whether WE HAVE to believe what they say. It has to do with the fact that their status gives their words more power. Whether YOU personally believe them is irrelevant. Many people DO take his words for fact just because of who is and that creates an issue. This is exactly how celebrities sway public thinking on many issues and then down the road certain politicians get voted in and then what you believe and actual facts take a backseat to the policy the majority has voted on.
If your primary point is that mainstream news isn't educational, then I agree. Most news is entertainment, pure and simple. The more people realize this and the sooner, the better.
My point was that celebrity status gives the appearance of truth. People like Bill Gates that have tons of money and are famous are able to sway more people. Whether they're experts or not doesn't matter because their fame will convince many people of what they're saying.
What's bad for the planet is how decades of individual work output in money can be confiscated (by printing and inflation, not taxation) by the Government under the pretense of doing good. What's bizarre is that the Government is not affected by market forces while the rest of us plebs are forced to be efficient lest we lose to competition. Note: when I say confiscation, I mean money printing and not taxes (which will exist in a crypto world). Money printing disproportionately hurts the poor who hold currency whereas the rich stay rich as their wealth is held in assets.
Separate money and state and you get closer to a state where the Government has to streamline its operations. We will see behavior truly good for the planet then, because the Government won't be able to spend trillions on military interventionism and research, and will have to focus inwards on streamlining its own self. Increasing taxes will cause a mass exodus leaving the Governments in a bad shape. Bitcoin can't be confiscated. Holders will just migrate to a country that is good with BTC being used as a store of value to guard against money printing.
This is a revolution against nation states. BTC Energy consumption is negligible compared to the incumbents but nobody talks of those so here we are.
Edit: I am surprised at the number of downvotes and would encourage you to comment so I can address your thoughts on the matter. Meta comment - also surprised that the HN crowd is so divided on the matter.
This argument is really hard to understand for people whose revenue is derived from the current system. Many people here fail to understand what cryptocurrencies are about because they are entrenched in these systems and these new systems endangers their perceived stability.
The reality is that the world, companies, people and nation states do not care about that. The current divide is due to the "system" being non-inclusive (only some people are in) and given that the system carry on to exclude more people while giving more privileges to the incumbents, the crypto tension will continue to rise.
Cryptocurrencies are not challenging banks. They are challenging governments, but they are too slow and bureaucratic to understand that.
Oh no we can't milk taxes of your (un)realized gains so it's bad for the planet. I like it when they load the other FUD which is: BTC is used by criminals (implying fiat isn't).
The interesting part is how the FUDers like Nouriel Roubini fire away all the negatives in the same sentence, making it sound like they have an agenda against BTC and not so much a well researched deep concern regarding one of the FUD points.
The dystopia I see in your words: government as an efficient service provider providing for and competing for the patronage of the ultra-wealthy holders of cryptocurrency: the monopoly on force is broken because wealth is forever exempt. Socialized, societal wealth of all forms - roads, healthcare, police, defense - discarded. The underclass of every nation left without recourse to the power of government to redistribute wealth, and a global oligarchy is ascendant.
Government's first calling should not be efficiency. That's a misapprehension of its purposes.
Taxation will not disappear in a crypto world, and that's how government would fund themselves. Societal wealth will continue in the form of roads, police, healthcare etc. Govt. will have to be resourceful about how it spends its tax earnings. The key difference is that Government can't go money printer brr whenever tax revenues aren't enough simply because they don't allocate resources efficiently. Tax rates in the US are high enough already. If they were increased more, people might leave. In a crypto world, there would be genuine pressure for the Government to lean up and cut back on unnecessary spending.
SF County can't print money, only the federal government can.
As far as I know California receives the least amount of federal tax benefits. They pay more then they recieve
Yes, I am aware of SF county being unable to print (only the central bank can). The point I am making is that this is an instance of wasteful expenditure that would be expensive in a world where nations lose control over currency and are operating on a tight budget that enforces skin in the game and discipline.
This is also an argument for a gold standard. What is a society to do when collective debt can help? For example: existential war, economic turmoil. Do you contend that governments should never spend on credit? I contend that printing money may sometimes be a good idea.
What society would undertake moonshots like DARPA... or going to the moon... if it could not invest with debt collateralized on a future generation's produce?
Spending on credit that you never pay is different. With a smart contract a government would have to release it's collateral. Now they can just keep the inflation up.
Ah, sure, the next generation pays, even as they generate even more debt themselves. I acknowledge it's a Ponzi scheme. But well managed, and expecting consistent growth in the productivity of our society over generations, the Ponzi scheme won't collapse.
Yep. There's a reasonable argument to be made that the decline in the Western Roman Empire's ability to raise taxes led in part to feudalism and the decline of cities and the transformation of rural peasantry into serfs. Authoritarian landholders and aristocratic armies replaced an (admittedly oppressive but also moderately concerned with some social welfare) organized state.
The state is a double-edged sword for sure. But denying its ability to raise revenues seems like a great way to hasten dystopia.
A system that can't fund itself via taxation alone is broken and needs fixing. Money printing is a proxy for taxation but targeted at the poor, as the rich aren't affected (arguably, they do better as assets go up).
> Increasing taxes will cause a mass exodus leaving the Governments in a bad shape. [..] Holders will just migrate to a [different] country
Yeah, when the US increases taxes on me, I'll just move to Korea. Oh, what's that, it takes a minimum of 5 years and learning the language to get a citizenship? And I still have to pay the IRS in USD in the meanwhile since they're still taxing me until I revoke my US citizenship (which I can't until I get a korean one in 5 years).
Not to mention I left behind my family and friends, many of whom can't emigrate due to not qualifying for a work visa or other category.
My point here is that the free market does not apply to governments as you imply it might. Consumers can vote with their wallet for things like different brands of food and other commodity goods, but people can't change citizenships easily. People can't vote on their favorite country easily due to massive social effects and how limited immigration is.
There are far more people who live in a country where they think their government is worse than another one, and yet don't move, than there are people who do change countries for such a reason.
Agreed, it isn't easy. But things are changing. Balaji Srinivasan argues that's the future. Naval Ravikant says that innovation has been found in geographic centers like the Arabic world (middle ages) -> Rome (Renaissance) -> England (1800s) -> SF Bay area (since the 60s), but the next center will be geographically distributed but on gathered on the cloud through digital nomadism. See The Sovereign Individual as a book that predicts this.
You could argue that conventional warfare was the traditional mechanism by which governments competed against one another to "consume" failed states and re-allocate resources to governments that were better capable of putting them to use.
In modern times, the global financial markets seem to be somewhat playing that same role since nuclear wars isn't a palatable option, with only a few "outcast" nations not participating in that system (Iran,Russia,NK,Myanmar,etc...).
Taxation systems, being the mechanism by which governments are able to build power bases, themselves compete against one another as individuals and companies avoid taxation by moving resources to low/no tax states within that same system.
This human system is a constantly evolving chaotic system that's changing more rapidly than most of us perceive, and crypto is just one aspect of that.
In other words: You disagree with what your government is doing. Instead of convincing your fellow citizens that it needs to do less, you take matters into your own hands like a wannabe dictator.
I wish I had the power you accuse me of wielding. I hope and wish that in a few decades from now, we will look back in bewilderment how we allowed nation states to have control over currencies to fund centralized operations at our expense.
BTC doesn't concentrate power, it tilts the balance in favor of a just system where value isn't plundered at a whim.
> BTC doesn't concentrate power, it tilts the balance in favor of a just system where value isn't plundered at a whim.
No, the value is "plundered" by a democratically elected government. You don't like it? Vote against it. Or work to fix your system of government if it's too broken for that. But don't try to make the policies you don't like impossible.
And yes, unlike BTC operates on the basis of one-person-one-vote, or somehow prevents concentration of wealth, it does not prevent concentration of power.
What part of your belief system is violated if the nation state lost power over currencies? Democracy will still prevail in the alternative I am suggesting, it will just be defanged from a certain viewpoint.
I suggest reading the history of money. The current system is an aberration. Historically, with gold as the currency/gold standard, nation states couldn't inflate money away.
> I suggest reading the history of money. The current system is an aberration. Historically, with gold as the currency/gold standard, nation states couldn't inflate money away.
I'm not a reactionary and I don't think you are either. So how is this an argument? We got rid of the gold standard for good reasons.
the poor have debt, inflation is good for them. (in fact the federal reserve target rate of inflation is good for everyone in a utilitarian sense (whereas deflation is horrible))
Inflation is good for the poor is a lie. The poor can no longer afford a house, can't pay for college, can't pay for healthcare because inflation has taken this away from them.
Inflation is good for the rich. I would much rather be rich and hold assets that go up with inflation, and invest on leverage because inflation makes it easy to pay back my loan. The rich hold most of their wealth in assets, the poor hardly have any assets that go up with inflation and are left behind with whatever cash they have which loses value continuously.
Taxation is a method that can theoretically target the rich more than the poor. Inflation steals from everybody equally in theory, but from the poor more than the rich in practice.
Maybe that's because no one should blindly trust a billionaire's opinion on a form of economics. Same goes for Elon Musk, who's on the opposite end of Bill Gates on BTC. It shouldn't be surprising that Bill Gates, Peter Schiff, and so forth might find BTC to be a threat to at least some of their wealth. (as an example, if cryptocurrency somehow evened the playing field for people to build up their wealth, that's not good for the <1% who won't stop collecting more money than they'll ever need)
Meanwhile, we've got many people(and many of whom I think are extremely hypocritical) piling on the BTC hate mob and using Bill Gates to feed into their viewpoint. Gates is a smart man, but I don't think it's reasonable to believe that his opinion on BTC is worth much more than someone whose net worth is a minuscule fraction of his.
He's been infamous since the slashdot/digg days because Microsoft's business practices and anti-trust suit. The latest conspiracy theories about him from the past year are...."weird" to say the least but are completely separate from why he was already disliked by the linux crowd.
Majority opinions seem to lean towards Bitcoin being a net detriment to society but HN will attract a really loud minority of Bitcoin diehards, for tech or profit.
Or so I thought, the amount of people taking offense at Bill Gates saying the uncontroversial is impressive.
I mean I'm going by precedent, there's popular HN threads every so often decrying the externalities or lack of utility of Bitcoin, the comments supporting the articles rise to the top but there's a handful of people saying that Bitcoin is still worth it somehow.
Now there's a lot of people attacking Bill Gates for lending his image to the arguments. It could be that there's a majority of Bitcoin believers here but they don't usually care for arguments and just do "he he miner goes brrr" until a celebrity billionaire appears.
What about 0 percent interest rates? How much environmentally damaging malinvestment across the globe has been caused by risk free money?
Think of how carbon intensive the concrete, steel, manufacturing, power generation industry are. Not to mention the population boom beyond our earths carrying capacity needed to perpetuate our ever increasing monetary scheme requiring never ending growth where deflation can never exist.
Thank you for pointing this out. The misallocation of capital caused by artificially low interest rates caused by central banks printing money (and the "bust" and massive unemployment that follows when lenders realize that the investments are unprofitable at the true market interest rate) is not commonly discussed.
Readers, you are discussing Bitcoin before the 4th of 32 halvenings. Things aren't so clear to most and dust has not settled. One thing is certain, it is not too late to read the whitepaper and learn what the emergence of the first new base layer money in 5000 years truly means and get your head around the significance.
Now, to the article. This is a write up response to a comment one of the world's richest men said on the app, Clubhouse. These are the articles worth discussing with this audience? Look at the final sentence of the article. Seriously? "This currency is not good for Green Planet." Yikes.
We're all on our own journey an in time all roads lead to Bitcoin. This is not a technology story, or an energy story, but a human story. The story of Bitcoin tells about people working with machines to accomplish something that seems impossible to most of us.
Bitcoin frees the slaves. Literally, not figuratively. If you have to sell your time, sweat, and blood to earn money, it is unacceptable to allow corruptible central planners to create that same money out of nothing. This is a power that no group of people should have over others, and certainly one that future generations will look back on find it laughable that a society would entrust people with control over the money supply after time and time again history has shown what happens.
Bitcoin is ending the monetary enslavement that central banks have been desperately clinging to. Issues around central banking, inflation, and money supply manipulation are not new in the story of human history. The current chapter is unfolding to see Bitcoin demonstrating an incorruptible money and it is growing up rapidly.
How much energy do you feel is appropriate to put toward abolishing central banking and freeing humanity? Personally, I feel blessed to have discovered Bitcoin while it still consumes less energy than small countries. What a time to be here!
Don't give the HN crowd any insight on what Bitcoin really is.
They have been bashing Bitcoin for a long time, and they still don't get it. They downvote and fight whoever tries to bring some different perspectives to the discussion.
HN people are the types who believe they're "saving the planet", and they're fixated on the idea that Bitcoin is evil due to its energy consumption.
Let them learn the hard way. If they get any clue on what Bitcoin is, there's the risk they may get rich and attain some power in the future, which will only make matters worse.
People hating on Bitcoin's proof of work don't understand layer 2 solutions are on the way. Ultimately Bitcoin will be used as a final settlement layer and not for recording your pizza transactions while faster, lighter blockchains work with it.
Not sure where are you looking but there are advances being made with every upgrade. On Ethereum as well as Bitcoin. With Ethereum in particular right now you have solutions like ZK and Optimistic rollups. We are taking concrete steps towards an eventual network of blockchains each talking to one another. These will both alleviate traffic and privacy concerns such as bots front running transactions on Uniswap.
Have you noticed that recently we get at least 2-3 bitcoin "energy consumption" stories reaching the homepage every week? You're not concerned with that, but you're concerned with my posts?
If I understand correctly, by design PoW gets harder with time, so it becomes ever more expensive to mine BTC. At some point, it should be economically unfeasible. Now, BTC is rewarded for transaction validation. Does this mean, that at some point in the future, it will be impossibly expensive to validate a new block, hence making it imposible to conduct a BTC transaction between two addresses?
> If I understand correctly, by design PoW gets harder with time, so it becomes ever more expensive to mine BTC.
You misunderstood (or possibly were confused with the ethash "ice age"). PoW difficulty follows daily dollar emission, which is proportional to the product of price and block reward. In Bitcoin there is a large lag (up to 2 weeks) though between changes in the latter, and changes in difficulty. Miners who can't turn a profit will stop mining Bitcoin, causing difficulty to drop. It will always be profitable for the most efficient miners.
There's a bit of a reporting bias when it comes to BTC's (or even crypto itself) environmental impact. We're only able to say "it uses as much electricity as X country" because there's a well-defined ledger of every BTC transaction.
The question is how much non-crypto "conventional" currencies cost the planet.
That being said, BTC probably isn't the "best" cryptocurrency. I'm not sure about the details because I don't know much about this space now, but other commenters have pointed out that it's more efficient for ledgers to record proof of stake rather than proof of work.
The amount of electricity used for transactions is just a lower bound on the amount of resources used overall for btc. For example, Coinbase has servers which use electricity. And, this lower bound is /very/ high. So this comment comes off as pro-crypto FUD.
Funny that you mention it. It's the opposite in my view. Depending on "to whom".
If you you have savings, of course it's better for you to have it hold value. And if you hold debt, it's better for you for that to fall over time. But we are not discussing whether "everyone is in debt" is good/bad, we are talking whether money is good/bad for the money's purposes. Also, Bitcoin flows over wires and gold does not.
Speaking of debt, if "it's good for society" for a lot of people to be in debt (because how else would ppl prefer assets to depreciate so they are stimulated to get rid of them?) then how do you avoid fewer people being creditors? In my view, more ppl with savings and fewer ppl in debt is key to a democratic/decentralized society w/o dangerous concentration of power.
We should talk about the general problem that carbon emissions are a huge cost that end up with the Commons and price that in instead of nit picking individual use cases and if we condone them or not.
The article has a one sentence quote from Gates in it, in which he shows a level of expertise anyone could reach from reading one of the hundreds of recent articles about bitcoin.
Why is this noteworthy? I don't really disagree with his assessment, but his words are being given undue importance here.
Yes. I'm so sick of Gates being the feature of endless articles. What an incredible sign that we lack respected, informed figures in this world, that we keep having to go to Mr Gates to get an opinion worth putting in print.
I'm not sure whether to think it's just lack of options, or whether this a programme by the rich to build & establish one of their own as someone to listen to. Nicely in the category of "owns a world-spanning super-empire" but generally pretty benign & non-aggressive for over a decade. Has taken some licks & no longer feels like a juggernaut.
Microsoft's success has objectively been a step backwards for computing.
Anyone who has used a NeXTstation with 32Mbytes of RAM and an 68040 CPU, which did not even have accelerated video, can certainly understand how bloated and wasteful of resources all the various Windows applications and operating systems have been over the years.
How many resources does Xbox use? It's not essential either...
If Next had survived to modern day, it's have similar modern bloat. Software grows with the hardware to run it on; which in turn encourages faster hardware which leads to more bloat.
I really wish NeXT took off back in the day. The hardware and software were ridiculously elegant. Though I guess NeXT got a new lease on life via Apple later on.
As something of an outsider (I own some crypto but know/care very little about it) I cannot fathom how anyone could defend the energy consumption associated with Bitcoin. Maybe someone can change my mind, but based on my current understanding, I would fully support outlawing that specific kind of energy waste.
Whats worse for the planet are governments, like those in Venezuela, that are causing so much human suffering that their population needs the existence of BTC to survive.
Are you suggesting they stop using Bitcoin to bypass the economic war being fought over the US dollar by their government? That would substantially lower their quality of life and access to food, land, knowledge markets...
As long as Bitcoin is there and works it will have a price that seems inflated to someone that can buy and sell anything form their chair on a first world country.
It really saddens me that a "Science Coin" didn't catch on that actually did something useful with all of those compute cycles.
My student job in college was helping to maintain a large-ish high-throughput computing cluster (https://chtc.cs.wisc.edu/), and that 1000+ node server cluster...and even all of the servers around the world connected to the Open Science Grid (https://opensciencegrid.org/), pale in comparison to the compute power that is wasting time and energy computing bitcoin hashes.
Mining gold is also a very destructive and poisonous business that is incredibly bad for the planet. So is copper mining. So is manufacturing computers.
Thank god computers and digital networks are so important that we recognize the importance to keep mining these limited resources to build and sell more computers and digital networks and places to store Office yearly subscription receipt pdfs.
That said, something like 40% of all bitcoin are in just like 1000 wallets.
If bitcoin were to suddenly fossilize into the world's currency the distribution of wealth would be even more inequitable and concentrated than now with national fiats.
Bitcoin seems like a huge Ponzi scheme, just with any other Ponzi scheme, its adopters fiercely fighting and trying to silence anyone who dares to utter anything opposing it.
Bitcoin as it stands today has potential to destroy all the gains we have made in clean energy and bringing zero carbon offsets.
Bill gates is right that it is massively inefficient in what is supposed to be doing. That is doing transactions.
Just like previous bubble runs this Bitcoin bull run again will die down, with many of same people holding this worthless bag.
Can you please point out which previous ponzi scheme / bubble / tulip mania has gone through so many cyclic wave pattern and held up it's value despite all the crashes?
You yourself has stated elsewhere in this thread that Bitcoin is literally just 12 Years old. You might also have stake in bitcoins/cryptocurrency survival. It is necessary for any success of any Ponzi scheme that people become it's fierce backer. But until unless it does deliver any tangible benefit to overall financial system (less overall transaction cost etc.) It is a ponzi scheme. There are long list of soft ponzi scheme (e.g. Amway) that have been running for decades. That does not mean they do not have Ponzi style pump and dump behavior. Bitcoin as it stands (huge waste of energy, Very high transaction cost) is failing in all of it's intended use cases.
Two google searches take as much energy as it'd take to boil one cup of water. Online porn consumes 6 million kWh [1] yearly. We ignore areas where energy cost is diffuse, which is not the case with bitcoin that is so objectively and transparently measurable. If others find value in online porn, TikTok, air travel for fun, production of processed food and subsequent health crises, long hot showers, and methane-producing cattle, regardless of how frivolous or wasteful I find them, it's not my place to question them. It's just free people choosing to pay for things they value, and all of it takes energy.
Fiat currencies and their forced entrenchment has a giant carbon footprint with its wasteful banking system, militaries and layered machinery to ensure its value is never challenged. The FX market trades about $6 trillion DAILY, with an infrastructure that doesn't produce any real goods and services. It'd be fair to compare the energy cost of bitcoin with the legacy fiat system, but how do you even begin to measure the latter. We live in an artificially over financialized world, where a big chunk of knowledge workers is not engaged productively. Bitcoin may in fact become the great definancialization that would boil the system down to essentials [2].
Nic Carter does a great job addressing the energy concerns of bitcoin [3]. Consider specially the idea of the non-fungibility of energy and how BTC miners absorb energy that'd otherwise be curtailed. I know it will sound crazy and totally non-intuitive but there is an argument that bitcoin might end up being the biggest incentivizer of clean, cheap energy, and in the end be a net positive for the environment.
It is not bitcoin, it is the human race which is cancer to this planet. This race will consume everything, destroy every other race, gobble up all resources, drink up all the water and burn down every forest. And then it will destroy itself just like cancer cells.
I know I am being hyper-cynical but this is how I feel very often. When I read about human endeavor of settling at Mars, I do commend the engineering skill but I also see the irony that the same human race couldn't protect the most suitable and hospitable planet.
Yep, that's how evolution works. It's natural selection working. We'll keep forking the planet until it becomes too costly to do it. Anyway, the will to survive while profiting from it, will become a pretty good incentive to come up with some good alternatives either here on Earth or somewhere else. Otherwise we'll hit the Big Filter.
OTOH, it's true, it's not looking good for us in the long run. It may well be that the water already started to boil and we are the frog.
In 2019, the US economy consumed 100 quadrillion BTUs[0], which works out to about 29,000 TWh. Bitcoin currently uses ~78 TWh[1]. Bitcoin isn't the problem.
At a larger scale of things given what Bitcoin just made possible and what it's trying to disrupt (decentralized, uncensored), Bitcoin is literally just 12 years old and I feel these judgements are too harsh and too soon for something which is still yet to be adopted or even understood by 95% of the population. The benefits of Bitcoin can truly be appreciated or judged once the tech has been adopted in a relatively larger segment.
Even so, let's say Bitcoin is extremely inefficient and should just be abandoned as a failure (I'm of the opposite view though obviously), what's happening with Ethereum is far more interesting. I've been in the space for a while and the kinds of innovation that's happening on one layer on top of another - ALL on a soon-to-be efficient Proof-of-stake system is absolutely amazing.
I'm actually very surprised I don't see enough discussion and threads on HN regarding the various things happening at such a fast pace (DeFi, Dexes, NFTs, Layer-2 and Sidechains, Eth2 Validation and sharding, other interesting Dapp use-cases).
Given all of these developments, it would be fair to say at least on Ethereum that such "energy inefficient" narrative is soon going to be obsolete. I would love to hear Bill Gates' thoughts on the tech then.
Bill is the one that persued Warren Buffet and tried to get him onboard with Tech companies. I'm surprised it's Bill Gates that now needs someone to get him on board with this massive new emerging field.
In today's terms, a decade of existing but somewhat mediocre results means it's time to move on. It's already proven useful; at the same time, already proven non-disruptive/revolutionary.
That's actually why I said we should zoom out a little. Disrupting global financial monetary policies or Gold itself which has a timescale of thousands of years => 12 years is a very short time (in fact the first 5 years can be counted off as extremely experimental, not-serious for-nerds only thing).
> surprised I don't see enough discussion and threads on HN
The fanboys ruined it. I think we all got sick of posts claiming blockchains will change everything. Blockchains and the things built on top of them are somewhat interesting, but unless there is something truly innovative in that space no one is going to want to repeat the same arguments we've been having here for like a decade.
To be honest, I'm curious to know about this as well! Haven't read anything on this but I wonder at times how is the core Bitcoin team looking at what's happening with PoS and deciding "Nope. This tech is good for 200 more years". I guess time will tell.
The inability to move / be more versatile is the reason why Ethereum came to be in the first place. I guess Bitcoin's main USP is "You can be sure Bitcoin will be Bitcoin as you know it for a long time".
Also there's one section of the community that thinks Bitcoin mining will actually help move to greener tech faster since it incentivizes you do so.
Bitcoin depends on a worldwide network of computers which are indeed bad for the planet. The USD depends on a worldwide network of military assets which is 10x worse for the planet.
In the past few hundred years, technological progress has been anti-correlated with environmental health. We live in an age with the most prosperity and luxury but also the most pollution. Bitcoin is no different.
As bitcoin has descended into a new culture war, I'll mention that I believe decentralized payment systems are a huge step in the right direction, but I'll also mention that I do not think this comment should be used as part of the bitcoin crusades. Take it on my word that my opinion is nuanced and that I don't own any cryptocurrencies.
This article is a culture war article itself that does not say anything appreciably new. My opinion is that once everyone knows what side of the culture war they are on, discussion about the topic becomes meaningless.
This has everything to do with our societies being powered by fossil fuels and nothing to do with bitcoin. High energy usage may be deemed wasteful, but if it was coming from solar power, it wouldn't be bad for the planet.
Silly idea maybe, and will disappear in the ocean of other comments here, but hear out my silly idea:
Since the complaint tends to be "A huge amount of energy is wasted for a single transaction", why don't we try to inflate the value of Bitcoin as much as possible, so one Bitcoin is worth $10 million or something like that, then we can fit more USD value in one transaction, and the energy impact is now lower of that transaction, I guess, when compared to the traditional financial system.
Might be a stupid idea, but eager to hear what you all think.
Bitcoin is divisible to 0.00000001, so if a bitcoin was worth $10 million, the smallest possible transaction would still be worth just 10 cents (+ transaction fees).
Actually, to see a good reason why some countries are struggling to meet their energy needs, you need only look here:
https://hindenburgresearch.com/ormat/
I'm more concerned that Mr Gates has inadvertently (accidently on purpose?) constructed a straw man that draws attention away from the rather more egregious effects of corruption on energy supply.
Blockchain is a technology in search of a problem.
Maybe as a storage of wealth it produces fewer emissions than mining gold but it's not the solution to the money problem.
Why it's still no 1 cryptocurrency? First mover advantage, a few die hard believers, many speculators and lots of FOMO.
Even I am reluctant to sell my 0.01 share of a bitcoin. What if...
When a much better solution comes people will sell it but for now the fiat-alternative market is too crowded with not much differentiation - to my best knowledge.
I agree with B. Gates and hopefully the crypto bubble will burst again with massive bank ran to sell their assets (it will happen but no-one knows when).
Good luck
BTC incentivizes miners to find cheap power. As renewables become cheaper than non-renewables, this incentivizes innovation in green energy which will benefit the planet long term. The fact the most of the mining is done in China with coal is a geopolitical detail that will change in the coming years.
Those of us who are aware of the antitrust case against Microsoft, as led at that time by Gates, will have a hard time with this. Not to invalidate what he says, but OMG the chutzpah.
This will undoubtedly feed the flames of the conspiracy theories surrounding Gates. There seems to be significant overlap between crypto enthusiasts and online conspiracy theorist cranks. I wonder if he knew this before he made the statement or just has no idea how he is viewed by some segments of the public.
Billionaire Bourgeoisieshevik who made his billions making other people have to use bad software because it was "the standard" suddenly wants to tell us about how something else being bad for society and the planet etc.
What's really bad for the planet is the rest of us have to put up with his bull.
Gates is the biggest farmer in the US (I know it sounds crazy but he is!). I wonder if he'll do something good with all that land and not be part of the problem he normally seems to advocate against. That could be interesting.
Edit: Downvoted in less than 30 seconds. That must be my new record!
“Bitcoin uses more electricity per transaction than any other method known to mankind, and so it’s not a great climate thing,” is all Bill Gates seemingly said. Even I think, less energy consumption would probably be better, and I am pro Bitcoin at this point in time.
Well, cost of doing business. So it’s not perfect, nothing is. But is it still a better store of value than your bank and pension which you may not realize, but are getting robbed by the Robinhoods you voted to power to replace the manchild?
I'm pretty sure Bill Gates has a way way bigger net positive impact on the environment than you, or almost any of us here. Just because he is rich doesn't mean he has a net negative impact. Rich people like him have the money and power to make a significant change and do more good than a 1000 of us combined possibly could.
> I'm pretty sure Bill Gates has a way way bigger net positive impact on the environment than you, or almost any of us here.
I've always found that argument presumptuous.
How do you know that someone in this comment section isn't researching a revolutionary way to generate clean electricity? How do you know that the next Elon Musk isn't lurking around here? Maybe that person will have a bigger impact than Bill Gates? Maybe that person is financing their studies thanks to Bitcoin gains? How can you possibly know all of that and just say: Only person X has a pass to be wasteful because no one else here has a net positive impact on the environment.
We hold different beliefs then :) You dont know me, but we know he has a private jet. The amount of cabon a single trip with a private jet is insane. No matter how much car you drive your whole life, you wont offset that.
>I'm pretty sure Bill Gates has a way way bigger net positive impact on the environment than you
Does his impact offset the pollution caused by the GPUs running full throttle in every one of the millions of Xboxes?
Or is GPU use only a bad thing when it makes people easy money and it suddenly becomes fine when the same processor is used to render RDR2 so someone can pretend to be a cowboy.
While bitcoin is definitely used for selling drugs or other illegal stuff (not saying I think drugs should be illegal, quite the opposite is the case), I think its use and - more than that - its value increase over the years goes way beyond that. People see it as asset, don't trust their currencies, buy it because of the hype, ... . Even when its use for selling/buying drugs vanishes (which will definitely not be the case everywhere in the world) bitcoin would't lose to much value because of that, in my opinion.
Well, we are all bad for the planet, but planet does not care. What we care about is OUR PLANET. Someone in the industry or the people struggle for better life may think that is YOUR PLANET. Why bother me to care YOUR PLANET?
The writing in this article feels like an algorithmic rewrite of content from elsewhere, hosted on an ad farming site. While the topic is interesting, I wouldn't feel bad if this sort of site was not ranked this high on HN.
for using bitcoin, I either need to mine or to buy. now lets say I choose to buy, here comes the problem.
Over the last 36 months , the lowest value of a bitcoin is $3k and highest $57k. If i had bought 1 bitcon at 57k i would have lost 7k by today, again, to buy bitcoin you need to use existing currency. Not everyone can mine and this is my first problem.
Next, how do I use this to buy anything? a $100 bill is worth $100 regardless of what, doesn't matter what I buy or where I keep or when I use, it will still be $100, can you say same about bitcoin?
this is all speculative and the exponential factor is scaring me out of bitcoin.
Does this include factoring in the difference of how much it costs to maintain a centralized banking system? Because for all we know Bitcoin is actually better for the planet.
I know, nobody really cares about facts in these Crypto flame wars, any more: It's libertarian economic liberation against greed and ecological destruction, right vs. left, democratic versus republican, the usual polarization these days. However, the truth lies somewhere in the middle.
TL;DR: While there is this "energy consumption of Argentina" number in circulation implying Bitcoin's carbon emissions equates that of a whole developed country, in reality this number is closer to that of Kansas City.
i agree i live in a 40 million country whit less energy consumption(argentina), to solve a volatility and dependency problem whit an asset which is more volatile and ASS controlled (china's bans bitcon and the buy, the jpm is bad then buy it, regulation from eu and other), and isn't anonymous, we have billion dollars companies focus on tracks bitcoin transactions, and regular stock wallets tracks u.
their OS filled with malicious stuff and who knows what kind of backdoors is when exploited by hackers, they blame it on China rather than taking responsibility of putting users at risk with vulnerable OS
i never said that, i just said it doesn't matter what these people say.
think for yourself. If you believe Bitcoin pollutes the environment, fine by me - i have no issue.
I guess I don't follow the "Look now". Every large piece of software has security vulnerabilities. If MS were refusing to patch their software I guess you'd have a point - the fact they released a patch and people who didn't apply it are getting exploited isn't really relevant to whether or not bitcoin is bad for the planet.
>their OS filled with malicious stuff and who knows what kind of backdoors is when exploited by hackers
You're going to need some citations if you're going to claim windows server has intentional "malicious stuff and backdoors". That's a bold claim to make without evidence.
I'm sorry, they lose all credibility when they call forced updates "malware".
We spent the entirety of the late-90s/early 2000s complaining that MS didn't force updates on users, so these massive worms were infecting half the internet with exploits that were patched YEARS earlier.
It took moving a mountain to get MS to enforce patching of consumer systems, to sit here now and claim that's malware is both irresponsible and ridiculously short-sighted. Without mandatory patching, I can say without exaggeration that the entire internet would be less safe. Anyone spewing that nonsense is either too young to remember how horrible things were, or too stubborn to acknowledge it was the right thing to do whether they personally agree with it or not.
it doesn't matter, at the end of the day..
do you think open-source OS that is widely used and audited is more secure than closed source OS like Windows?
most infosec community knows the answer. if you know yours well, good. I am not convincing anyone, anything.
I just meant, there is value is looking at things objectively than reading some news articles or opinions said by some bigwigs.
mission critical software that are widely used are much better off being open-source for long term security, look upon it if you've time. I kindly suggest do that if you care about security.
it's well known fact now, it was all the FUD by microsoft that this was not widely accepted previously. Do you think they have any incentive to be transparent about that? why does everyone have to pay forcefully for windows that comes with every laptop by default?
these people had fiduciary duties to make money for their investors. they've only lived in that world their entire life. It doesn't matter what they say about things. Read, learn and make your own conclusions if you will.
and as Linus Torvalds simply put it decades ago: that these people are out there to make money and not make world a better place even if they pretend .
also what Linux and Bitcoin have in common that Bill Gates always will try to ignore is open-source software.
It's inevitable, environmentalists can try killing Bitcoin - go for it. No one is stopping you.
I meant that "Linux is cancer" seems just to be purely an opinion meanwhile behind claim that "BTC is bad for planet" stands some convincing things like energy usage and stuff.
I never said ignore anything. Whatever matters to you, look into it - don't take other people's hot takes. You might be able to have better understanding in certain things that matter to you than Bill Gates or xyz.
Bitcoin doesn't have to use so much energy. The difficulty level is what causes the high levels of energy consumption. If we could get all the major mining groups to dismantle some % of their machines, we could reduce energy consumption with a very small cost to the group. This could reduce energy consumption, while also preserving the value of Bitcoin. Maybe Bill Gates can start signing checks to the miners? You get 10K for every machine you video destroying.
That requires trusting that none of the miners will deflect (e.g. have a hidden stash of hardware waiting offline until it can perform 51% attack). If you need to trust that miners are not cheating, it kinda defeats the whole point of a trust-no-one cryptocurrency.
So sadly, in a proof-of-work scheme the secure steady state is only when miners are fiercely competing, and that means maxing out their hardware and electricity usage.
> If we could get all the major mining groups to dismantle some % of their machines, we could reduce energy consumption with a very small cost to the group.
The whole point of BTC is that you cannot trust each actor. If we could coordinate a population of trusted ledger managers, there wouldn't be a use for a blockchain in the first place.
How has he not acknowledged how expensive physical settlement between banks is? A brinks truck carrying funds between banks, the bankers managing this process, all the and all of the human capital required to support the entire process?
People have done the math, and the carbon cost for a credit card transaction is several orders of magnitude lower than that of a single bitcoin transaction
Except credit card transaction isn't settlement, it's a temporary transfer until it settles, more akin to lightning network. Lightning network barely uses any energy fwiw.
Agree -- settlement still occurs every day. And credit cards charge %, versus network fees in crypto are amount agnostic (ie: 1 million transfer vs 1 dollar transfer cost the same)
Weird website. It seems almost GPT-3 generated, or translated using Google Translate. Who uses the term "Planet Energy"? Why is it capitalized? If OP wasn't an old account I would assume this post is spam.
If you want to make valid comparisons, compare the energy usage of Bitcoin (and other blockchain-based solutions) to the energy usage of the current fiat system (with all its banks and other financial services companies). Plus, it is a fact that the majority of energy used to mine Bitcoin is renewable.
Let's be honest. It is obvious that the majority of HN users are anti-Bitcoin for a few reasons:
1) They see early adopters profiting mightily and have a zero-sum, envious mindset.
2) Silicon Valley promotes centralization. People have invested their careers in organizations that promote the centralization of the internet and technology, and Bitcoin is a threat to that.
3) Silicon Valley, once teeming with innovation because of diversity of though, is now completely monolithic in thought. The powers-that-be (i.e. Bill Gates, among others) are anti-Bitcoin, as it threatens their centralized power, and so Bitcoin has become out of fashion in Silicon Valley.
4) Politics. Bitcoin is decentralized and empowers those that privately and independently own it and transact with it. This is generally a libertarian concept. Silicon Valley, being very politically on the left, realizes that the independence that Bitcoin brings goes against their ethos of governmental and bureaucratic control. You cannot "cancel" or prevent someone you don't like from using the Bitcoin network - even if you disagree with them.
HN used to be great, in my opinion, and I hope things improve. My comments are sincere.
Now, prepare for my comment to get censored by a flood of downvotes in 1, 2, 3...
That's funny how so many criticized the existence of the federal reserve, but bitcoin being an answer to this criticism, made everybody realize that money is trust, and that institutions are required to guarantee this trust, cryptography cannot solve everything.
Money is just a medium, it's an accounting tool. Civilization doesn't work without regulation or when things are too volatile. Society requires stability.
The answer to the banking crisis is not more liberalism and anarchic technologies (that allows hackers to launder money), it's regulating the banks.
Bitcoin is an almost perfect exploitation of humanities fatal flaws (greed, unwillingness to acknowledge externalities - i.e. selfishness). It's that old SF-trope that the cause of many of humanity's biggest problems is humans.
> the cause of many of humanity's biggest problems is humans
As opposed to elephants or sea urchins? How can humans not be the cause humanity's biggest problems?
The Buddha taught there are three kinds of dukkha [usually translated as “suffering”]. The first kind is physical and mental pain from the inevitable stresses of life like old age, sickness, and death. The second is the distress we feel as a result of impermanence and change, such as the pain of failing to get what we want and of losing what we hold dear. The third kind of dukkha is a kind of existential suffering, the angst of being human, of living a conditioned existence and being subject to rebirth.
> How can humans not be the cause humanity's biggest problems?
That's a pretty good indicator of a civilization's state. For an advanced one, the answer to your question would be "it's nowhere near the top worries". All human-made horrors (war, climate change, etc.) would be left far behind.
If we were as smart as we think we are, our biggest problems would be rogue asteroids, solar storms and aggressive aliens, not human geopolitical bullshit, poisoning our water, or destroying our own ecosystem.
True, but also the other way around: A less advanced civilization would have much more trouble with elephants, sea urchins, bacteria, and other natural factors than with humans.
Stepping on a sea urchin is no beuno. I remember one time snorkelling and I was being pulled by a rip tide and I was like no big deal, I can just slowly head a different direction until I started being pulled barely past sea urchins on corals and then I was freaked out. They are dastardly.
By default, nature is an aggressive and competitive environment.
It's only after we barricaded ourselves in towers protected by walls that we started to find predatory animals cute (and even made children's toys in their image)
> It's only after we barricaded ourselves in towers protected by walls that we started to find predatory animals cute
I don't think that's entirely accurate. Dogs were domesticated well over 10k years ago, possibly close to 30k years ago. I see no reason to think that people didn't find puppies cute then as well since the reasons why we think of baby animals cute seems to be related to the same pattern recognition that causes us to recognize those attributes in human infants and think they are cute. The version of animals we find "cute" are all represented with infantile portions. There is something to be said for removal of danger as a prerequisite though (I doubt most people would have been receptive to the teddy bear in the 1920's if problems with bears were still frequent).
What is nature different from the environment? Is nature not the environment? Is it truly aggressive and competitive or does it seek balance and evolution, or maybe it is and does not seek? Does applying those adjectives personify and build emotion into nature where none exists?
Again, question the premise holding in your mind’s hand a momento mori. All those things can and likely will happen. If the key advancement of human civilization was in virtue, would those things be a cause for worry or suffering?
I'm not sure I buy that. There's not any proof that a more advanced civilization exists. Even if we assume that one does exist, why does it follow that they are immune to war, oppression, power struggles etc? The only data point we have suggests otherwise.
Or maybe the aliens are all holding hands in a circle singing kumbayah?
Imagine you are an advanced civ with weapons hardly imaginable to current humans. Anti-Matter bombs, GRB strength energy weapons, etc, who even knows what is possible. With weapons like that even a run of the mill rogue political group, terrorist or whoever could probably trivially destroy an entire planet. It stands to reason that if they are able to continue to exist as some kind of multi-planetary species they have figured out a way to avoid killing themselves.
Nature often seems idyllic, when it has reached a stable equilibrium. But what it really is, is a ruthless and absolute class system, where each species "knows" its place, and has settled in to make the best of its lot.
The disruptions to equilibrium that we witness are almost always man-made. But there have been others, caused by new species, ice ages, asteriods, the Great Oxygenation Event, etc.
Alien civilization might be at equilibrium. Or, if we meet them, they may more likely be in an expansionist phase.
But I think a civilization that harnesses its conflicts - as we try to, with competing businesses, scientists, olitical parties, sporting teams - will have greater long-term success than a destructive, exploutative culture, by definition. It's not that competition is "good", but they we have aggressive aspects seeking dominance, and we are better off shaping them than having tribal warfare, raiding parties, etc which is more our natural state. And something like it is part of the nature of life itself.
As opposed to other externally-caused problems like natural disasters, beating eaten by lions, etc. I would guess that a large chunk of human history was dominated by these problems.
I would have thought the opposite would be true, hunter gatherers are generally well fed from a variety of food sources, would have lived in low densities and would have been highly mobile, so in the event one food source become scarce they could move elsewhere, or switch foods. Early agriculturalists would have been stuck in once place reliant on a single, or few, food source/s and therefore vulnerable to failed harvests for a variety of reasons, droughts, natural disasters, theft (of stores, if they are lucky enough to farm food that can be stored) etc.
> "The bones of 'domiciled' Homo sapiens compared with those of hunter-gatherers are also distinctive: they are smaller; the bones and teeth often bear the signature of nutritional distress, in particular, an iron-deficiency anemia marked above all in women of reproductive age whose diets consist increasingly of grains"
I know a couple books[1] that suggest life prior to the agricultural revolution wasn't nearly as famine-stricken as we tend to think it was. These books claim hunter gatherers were quite proficient at finding enough sustenance.
Obviously starvation was still possible and likely, but was it the primary cause of death? Is there some more evidence that humans were suffering from starvation before agriculture? Wouldn't populations thin out and stabilize accordingly if starvation was such a problem?
[1] - _Sapiens: A Brief History of Humankind_ and _Sex at Dawn_
That same book claims that the agricultural revolution was responsible for human specialization. We were able to feed larger families/tribes and develop non-food related skills. Without agriculture, those extra people would've died aka "thin out" as you mentioned.
Agriculture encourages large families since children can help out in the field. Meanwhile with a hunter gatherer lifestyle the amount of food that can be acquired is not limited by labor but rather by the local environment. The effect is that you have lots of people doing backbreaking work every day.
In could, but that's generally not what it means when applied in this way. You don't thin out a a herd (which is where I think that phrase is most often used in English) by spreading it over a larger area, but by removing a percentage of the individuals that make up the herd.
Starving to death together with the rest of your tribe - your parents, your siblings, your friends, your kids - must be mentally excruciating. Famine has been considered one of the worst curses of humanity since the dawn of written records at least.
How happy are we who have never experienced that! How would our ancestors envy us!
Truly if one was to know the excruciating pain of those who have gone before these things of today thought of as worthy of attention would fade to nothingness.
Would our ancestors envy us or be happy for the fruit of their effort? There are setbacks and frustrations about the slow state of progress sometimes for certain. Maybe they would also be sad for the material orientation of many people and the loss of spirituality that gave them much hope and fortitude.
Was it? I wasn’t aware of that? Is this also the case of non-human omnivores? If not, at which point in our evolution did this start to be the case, e.g. during Australopithecus or Homo Erectus? And is it also the case for humans that don’t live in agricultural or industrial societies today (such as tribes deep in the jungles of Papua New Guinea)?
One year into a worldwide pandemic affecting every aspect of life and you have a hard time finding examples of really bad things not caused by human? That's some committed misanthropy, I got to give you that.
The virus either originated in a human lab (unlikely) or jumped cross-species in an environment created by humans (exotic animal markets with poor hygiene controls). So...yeah this one is kinda on us.
> maybe we should have been much smarter about preventing or containing it.
That doesn't mean humans were responsible for the pandemic, though. That means humanity might bear responsibility for not as effectively containing the pandemic.
If an asteroid strikes the earth, and causes a mass casualty event that doesn't mean humans caused the asteroid strike (even if we maybe should have invested more in preventing the asteroid strike).
I think it's reasonable to expect more effective human preventative measures, without confusing the disaster for ones caused by human activity.
Is a virus a problem or is it a new challenge for humanity to take on, just as our understanding of molecular biology has become ready to address it? I respect the loss of people just as I respect the loss of all who have gone before, soldiers, explorers, pioneers, even those who did not intend risk but lived unknowingly under risk that existed nonetheless.
It's always important to remember that we live in a thin sheet of self-sustaining complexity in a cold, hostile universe, perhaps unique and if not incredibly rare. The "human" problems are a luxury when our fragile existence seems like little more than an accident.
TBH the perspective that humans will learn to control meteorites is a bit frightening.
Because I would like to believe that this capability will only ever be used to protect the Earth from them, but our history says otherwise. Anything that can be used as a weapon will ... well, at least enter the arsenals, and only fear of devastating retaliation will stop people from actually using it. Or has, so far.
The cause of most problems for any biological creature on earth is external. All animals compete fiercely for survival among the elements, among other creatures, among each other. Survival is the biggest problem for all animals.
Except humans. More humans die each year due to other humans, or due to things other humans have created (for example humans ignoring mask mandates).
Point is, we are the only specie who has become its own worst enemy.
Idk, what am I saying? I think we can improve eachother's lives quite a bit if we just kick out the assholes from power.
Evolutionists like Dawkins pose that most organisms are in fiercest competition with members of their own species. You and I compete for identical resources: mates, jobs etc.
Other species have mostly arranged not to kill one another in these competitions. E.g. vipers & komodo dragons don't bite while wrestling. Walruses get pretty ripped-up, but usually don't die.
Ganging up to kill seems to be mostly a primate thing.
Male lions will kill cubs fathered by another male without remorse. It is not the same as our primate instincts of war, but remarkably close to ethnic cleansing.
> I think we can improve eachother's lives quite a bit if we just kick out the assholes from power.
What other species creates scalable, global solutions to large scale problems? Example (not real, but realistic) - a group of scientists in India create a vaccine that a company in Germany manufactures, so that people in the US can avoid a deadly virus.
Only one I can potentially think of is Fungi, as they appear to have large scale symbiotic relationships, but nothing is comparable to humans.
>How can humans not be the cause humanity's biggest problems?
Think in simpler terms, like a technology used at work, or a tool used at home; I've been in enough changes in the former that tell me many people believe a new thing will be better than the old thing, even after going through that same process several times.
The introspection needed to understand that people will break the process if they want or need to is hard to come by.
> As opposed to elephants or sea urchins? How can humans not be the cause humanity's biggest problems?
Dinosaurs' biggest problems was asteroids. There are plenty of externalities outside of human control, or that humans are only marginally responsible for (asteroids, gamma ray bursts, volcanic eruptions, famine due to crop diseases, pandemics, etc).
The value is providing the ownership of a digital scarce fixed-supply item that can be transferred and traded.
That's the product. And the market gives it a price.
Also, it has everything to do with monetary policy.
There are 8000+ cryptocurrencies, some (or a lot?) of them are bitcoin clones. Most of them issue millions and billions of those digital items. It's not scarce at all.
There is a difference between short term utilitarian value and long term utilitarian value.
BTC might have no short term utilitarian value, but in the long term the utilitarian value is to create a globalized monetary policy.
1. BTC is speculative because it may not actually achieve the goal of a single globalized monetary policy. Some other crypto might become the defacto denationalized currency instead, or maybe nothing changes.
2. A single globalized monetary policy may not be useful. However, no one really knows. People investing in any crypto seem to believe that a denationalized monetary policy will be better functioning.
Speculation alone doesn't imply no long-term utilitarian value exists.
Great question, but I'll answer a slightly different question.
> If and when we have a globalized monetary policy, how do we run it without burning more energy than entire countries?
1. You could get all entities governing the market / governing the globalized monetary policy to perfectly trust each other. Seems impossible given the Prisoner's Dilemma is exponentially more difficult to solve as the number of actors grows.
2. It is outside my domain of expertise to know how we can make a trust-less ledger efficient to run. The engineers behind ETH and Nano seem to believe it is possible.
However, given 1. is an impossible problem, and every unique entity that governs the globalized monetary policy will be competing with each other for control. They will all compete in an arms race to control as many crypto nodes as possible (i.e. a war of energy production).
It seems like the amount of energy needed will always be larger than most countries use because otherwise any one country can spin up a 51% attack very easily.
This doesn't mean crypto energy consumption will spiral to infinite as the world's super powers compete. Because, the world's super powers already have to worry about "mutually assured destruction" and as such can "trust" each other not to trigger a 51% attack because that would be treated as a global signal to launch nukes[0].
And like nuclear de-armament, there will likely be a push for the super powers to consume less energy while protecting against a 51% attack. There will be some interesting equilibrium. My guess is the equilibrium will probably be around the energy consumption of the p99 country sorted by energy consumption.
[0] I've never thought about this before, but a 51% attack could be an automated signal to launch nukes. I hope no country removes the humans from the launch process.
> Could we do this without burning more energy than entire countries?
Based on my (arguably poor) ability to predict the future the answer seems to be a "No, crypto energy consumption will always be more than most countries".
Other people like the ETH and Nano developers seem to believe the answer is "Yes it is possible to be more efficient with crypto mining". However, I don't know their stance on "Will the energy consumption still be more than most countries?"
Nobody accepts it as payment, because its value is too volatile, speculation-driven, and nobody wants to spend it, because it is deflationary.
And that's not even considering the fact that it can only be transferred at around 6 transactions per second, less than 1/10,000th of the transaction volume of Visa.
> Bitcoin is an almost perfect exploitation of humanities fatal flaws (greed, unwillingness to acknowledge externalities - i.e. selfishness).
Presuming Satoshi did this out pure altruism, I wouldn't say perfect. However, if Satoshi still has 10% of the Bitcoin supply, then I couldn't agree more. Given the fact that most of us don't know, we're simply projecting whatever believe we have on that particular matter, which definitely votes for "an almost perfect exploitation of humanities fatal flaws"
Thought question here. What if we hyped up bitcoin to 10X its current value? Wouldn't that mean that per real-world transaction / per unit dollar value it would use 1/10th of its current amount of energy? For example something that would normally cost 0.1 BTC would now cost 0.01 BTC.
The block rewards issued to miners would be worth 10x as much, so more equipment would be pressed into use for mining, until the expenses of mining roughly equal the current value of the block rewards (plus transaction fees, for the nit pickers out there).
10x price increase equals 10x mining expenditure, mostly on energy.
Agree. It would not be easy to know which has wasted more GW-hrs, but my bet would be on Windows. Remembering decades of overnight flying toasters.
As recently as 2012 I was going around the office, before leaving, turning off the monitors left on because Windows did not default to doing that itself. On CRTs it was even worse.
But it is not a competition. Bitcoin and Windows together are clearly much worse than either alone.
Fun and joy in and of themselves are worthy pursuits. That's completely aside from considering video games as an artistic medium that can be used to learn and share about the human experience.
Bitcoin does none of that. At its very very best it's a way to buy hallucinogens on the internet with massive external consequences.
I think understanding bitcoin from a systems point of view is of great value. Although proof of work is problematic, the idea and manifestation of a censorship resisten electronic monetary system is just amazing. Bitcoin is actually working for more than 10 years... There are alternatives to PoW, e.g. ethereum 2.0, let's see if this works and than judge again...
I feel sorry for anyone that expects bitcoin to actually be anonymous. Given that we can use statistics and timing to determine the memory contents and instructions run on different cores in a CPU, anyone that uses a currency that keeps public global transaction log and thinks they can anonymize themselves by just mixing their money in a pool is in for a rude awakening at some point. For any useful amount of usage, my guess is they're just kicking the de-anonymization can down the road a few years.
I haven't, but I'll take a look. My completely green suspicion knowing nothing about it at this point is that it's probably just a step up in an arms race, to which more advanced statistical techniques could be developed and applied to eventually, which means past transactions using old methods are vulnerable to being traced. I'd be happy to be proven wrong though, so I'll take a look.
The only reason satoshi hasn't been found is exactly because he/she/they haven't spent any of those bitcoins.
(Also, the slightest movement in those coins would likely cause a massive drop in the value of bitcoin, as rational people realized a huge cache of previously assumed out of play coins might start being sold and everyone using it as an investment rushed to exit ASAP to avoid beat that).
Yes, you can buy some items online with BTC, but almost no household daily essentials. Show me a grocery store, gas station or pharmacy that accepts crypto. There are plenty of companies selling Crypto payment gateway software, so it’s clearly not a technology limitation.
The reality is there is no consumer demand for crypto as a means to purchase things.
Its an alternative finance system bringing inflation resistant digitally accessible and transferable assets to an unbanked and inflation exposed populace. Many are ignorant of the challenges that face people in contries that don't the most sophisticated financial system on the planet with a local currency that acts as the worlds reserve currency. It takes up way too much power, but I am not going to let this key opportunity to much of the worlds less fortunate, be under appreciated.
At best its an alternative finance system that works around the captured, corrupted, and rent seeking finance systems of the world.
The amount of energy required to rescue a single princess does not increase exponentially over time. In fact it pretty much stays constant. Furthermore, gaming energy expenditures are probably minor compared to the amount spent on Bitcoin these days (last I heard it had an energy footprint equivalent to the Netherlands.)
There are also other cryptocurrencies that don't have the same problem as Bitcoin with being increasingly energy intensive to produce over time.
75twh/year only PC gaming and that was year 2015! And PC gaming is smaller market. Now add the whole industry or creating them and the servers running the online parts. And add consoles. And creating all the hardware, mining minerals for them, transportation.
The industry is growing like crazy as well.
Bitcoin was 122 twh/year I believe.
Both gaming and bitcoin kill the planet and are not necessary until global warming under control.
I didn't downvote you, but I suspect the reason people did is that for gaming, energy usage is a cost and for bitcoin energy usage is the point. They are completely different systems. Bitcoin's energy usage expands more and more as Bitcoin gets more valuable and/or energy gets cheaper.
If game consoles/PCs get more efficient, they use less power for the entertainment value delivered to the world. Or, if renewable tech makes energy cheaper, the fixed amount of energy gaming uses becomes less of a big deal.
If ASIC miners get more efficient, difficulty and hashrate goes up, and they use the same amount of power for the same amount of security delivered to the blockchain. Or, if renewable tech makes energy cheaper, miners will use more of it.
The "W" in PoW means work but it could equally mean "waste". The whole reason it's secure is that you look at the total hashrate of the network and go "wow, that is so expensive, nobody would ever burn so much energy just to double-spend some bitcoin". No matter how good hardware gets or how freely available energy gets, it must always be incredibly costly to operate the network, because that's the premise its security is built on.
Yeah I'm well aware. Despite not being a fan of bitcoin I'm sure many can claim entertainment value from it as well. Either tech or gambling.
So I guess its a matter of taste and for me they are both useless industries.
Fiat currencies are an almost perfect exploitation of humanities fatal flaws (greed, unwillingness to acknowledge externalities - i.e. selfishness).
Fractional reserve lending are an almost perfect exploitation of humanities fatal flaws (greed, unwillingness to acknowledge externalities - i.e. selfishness).
Deflationary currency is useless currency. There is a reason that every deflationary period in modern monetary history was immediately followed by a catastrophic depression.
Contrary to the dollar-sign-eyed bitcoin hacks, the purpose of money is to be exchanged for goods and services, not to sit in an account forever while you watch numbers go up.
As a person holding a certain amount of currency, the last thing you want is the govt to print more. That is essentially the govt putting a hand in your pocket and taking away cash by diluting what you already have.
Is land a bad thing to buy because they are not making more of it?
I'm sure you know you can exchange those numbers for other numbers that show up in your bank if you're inclined..
As a person who makes goods/provides services, what you want is for the government to ensure there is enough money for others to buy/hire your good/service.
As a person who wants to buy a house but doesn't have the full purchase price in liquid dollars, the thing you want is for the government to give lenders access to low-cost money so they can then lend it to you at low rates so you can afford the principal+interest on your loan.
As a person with savings to invest, you want to know that the bonds you're buying will be paid back with some interest to balance the risk of higher-yield stocks/bonds.
Sure, you have a valid point. However, a tangential argument can be made that, exactly due to banks lending money to buy houses, houses have essentially been priced out for regular people..
If you see educational costs, at one point in the 70s I think, the govt decided to offer loans so that students wouldn't need to do a job on the side to fund their education. Now it's ballooned to become such a mess..
They have absolutely not, with the noted exception of a few popular urban areas which house a relatively small minority of the population, been priced out for regular people.
The home ownership rate in the United States is 65.8%. San Francisco. Is. Not. Normal.
You don't understand Bitcoin. It is a system to remove human greed from the equation. However, currently we are in the monetization stage. People will get rich. Greed will prevail and it jump starts the system.
The beauty of Bitcoin is that no human can increase supply to address short-term interests, like central banks can. The energy is not wasted. To the contrary, it is used to ensure that the supply is distributed in the prescribed manner and that it is capped. There is no other way of creating a decentralized system that has this feature.
If you want a resource that's limited and can't be created by central banks, why not use something like Gold/Silver like we used to? While not going trying to debate on whether we should
or should not use a limited resource as currency, but if we did Bitcoin seems like a wasteful thing to use.
Not a bitcoin fanboy, but that's a bit strong a statement. What is "greed" versus motivation for innovation? Is innovation rewarded with (taxed, regulated) wealth greed, and if so, is that "bad"? And if it creates Teslas and rockets that land, and robots on Mars that last a year or more analyzing samples, is it a fatal flaw?
Some more questions... So let's say BTC is greed - the many financial instruments out there, derivatives, credit default swaps, funds of funds, the crazy options stuff going on ... and you drew the line at BTC?
"It's that old SF-trope that the cause of many of humanity's biggest problems is humans."
Fitting for a city known today for its vast outdoor tent cities of homelessness.
I feel that comments like this are a disservice to HN, for while the comment attempts to sound erudite and logical, it is simply moral relativism in disguise.
"Greed" is neither good nor bad, but instead it is a pathological optimization. Optimizing for profit, by definition, is an "unwillingness to acknowledge externalities", as stated by the GP. Optimizing for profit resulted in many bad situations for Americans (see the Love Canal and the Cuyahoga River) and it was the reason the United States created the Environmental Protection Agency (EPA), so that negative externalities could be converted into dollars.
To bring into the discussion "Teslas" and "rockets that land" changes the argument from the demonstrable "bitcoin is bad for the planet" to a morally relative argument of "yeah, but it got us rockets and Teslas", which does nothing other than prove GPs point: to say that that Teslas and landing rockets are worth the price of Bitcoin is to ignore or disregard the externalities!
And it's hard to imagine that the GP "drew the line" at Bitcoin; to take that as the position is making a straw-man argument. Instead, an interpretation that would lead to valuable discussion should be adopted, like the position that Bitcoin both demonstrates the flaws of greed and that it does so in a way that is simple to understand and demonstrate, especially when it comes to externalities. Financial instruments are complex and opaque on purpose, designed to confuse and obfuscate greed. Bitcoin, on the other hand, has a much simpler equation: money versus power consumed versus pollutants produced.
Finally, a suggestion to all: avoid acronyms, or at least spell them out on first use. It's highly likely that "SF" meant "Science Fiction" and not "San Fransisco". Knowing the correct definition of an acronym can help avoid embarrassing situations.
Your response and charges of moral relativism are longer than the comment you're replying to. It's as if you're liberally reading into motivations and even psychology, in order to make your point about externalities.
Don't tell people what their motivations are. The original comment talked about greed, my comment questions our definitions of greed.
Edit: Can't you just reply and make a point about externalities instead of being essentially passive-aggressive?
> Finally, a suggestion to all: avoid acronyms, or at least spell them out on first use. It's highly likely that "SF" meant "Science Fiction" and not "San Fransisco". Knowing the correct definition of an acronym can help avoid embarrassing situations.
Wowzers. How about you design the guidelines for conversations, and we can defer to you if there's ever any ambiguity.
Bitcoin innovated through a blockchain years ago and the world has already adopted that. But the current state of bitcoin makes it bad at its other 'innovation', digital currency.
Bitcoin is far too volatile to be a widespread, standard currency which seems to be the "reason" people say it's worth as much as it is. But it will never be a widespread currency until it has stability. So it's a chicken/egg situation, one of the two has to come first for the other, and both ideas rely on each other.
Most people that hold bitcoin today are doing so because they think it will increase in value, NOT because they care about the stability or viability of currency. That's pretty selfish insofar there are plenty of developing nations that would benefit greatly from a stable currency. Bitcoin might still be more stable than some countries, but that doesn't negate the issues.
So, because many people look at bitcoin as a wealth generator that produces tons of heat and waste, and it starts to look like a perfect marriage of shitty human behaviors.
How do you explain banks and hedge funds putting their money into it? Your explanation is that they want a digital currency, which you're saying is impossible. But it seems like the BTC advocates aren't arguing that, but instead that it's a store of value as a hedge against inflation?
No, I would argue hedge funds and banks are treating BTC like any other investment; They believe it will make money.
Banks and hedge funds don't inherently care about currencies. They care about the currency that governs their lives but beyond that everything is an investment. Banks don't provide mortgages because homes provide a stable economy or a stable currency. They do so because they will make money back on what they lend through interest. The fact that you store your dollars there is just one way for them to collect tons of assets for lending (among other things). This doesn't means banks care much about the volatility or exchange rate of the currency itself.
Hedge funds would only care about currencies insofar that it's an investment vehicle and investing in currencies can be a good investment. Bonds or other currency investments can increase over time without the volatility of BTC. A hedge fund is literally just an investment group, so it's pretty obvious they don't NEED to care about BTC stability or any stability at all.
Now, the question could be why would banks and hedge funds be willing to invest into such a volatile currency when they are usually risk adverse (banks more than hedge funds). And that would be a good question, except BTC has kept going up and now crypto as a whole is just another ETF market. So there are plenty of safe ways to hedge your bets on BTC or crypto generically without actually believing in the underlying philosophical justifications.
EDIT: Also, I don't think that it's impossible to have a crypto currency that is viable and stable. I think Ethereum has a fairly logical approach to their core issues that could solve the issues down the road. We'll see. I do think it'll be hard for BTC to become a viable currency because of how pumped up it is, and people treat it like an infinite money machine. Until the systemic issues of the BTC ethos are solved, I don't see a promising future for BTC as a widespread currency. But, it might have value in setting up the infra that the future crypto that IS viable will use.
I wonder if more mainstream investors waited a while to make sure BTC is liquid. I don't know the details of this - I guess there must be reliable enough exchanges now to serve customers of that caliber.
>What is "greed" versus motivation for innovation?
I don't have exact data, but my gut feeling tells me that 99.99% of the people buying cryptocurrencies today are driven by greed instead of innovation.
> and you drew the line at BTC?
Not really, if you look at the perspective that we already have enough instruments for financial manipulation and greed, why introduce another one that consumes so much energy?
>Fitting for a city known today for its vast outdoor tent cities of homelessness.
I mean...you know that's a completely man-made problem right?
I don't have any but I get the feeling that a lot of people here are just salty that they were thinking of buying and didn't. Just venting that regret..
> many financial instruments out there, derivatives, credit default swaps, funds of funds, the crazy options stuff going on ... and you drew the line at BTC?
That seems like you are putting words into the GP’s mouth.
Nobody is saying these other instruments aren’t also ‘greed’, just that Bitcoin is no better.
That’s relevant because one part of the Bitcoin narrative is that it is actually better in some way, and not just another speculative instrument.
Again, I'm not a BTC fanboy, I don't even own any. But obviously it solves SOME problems - like how to transfer some sort of store of value across borders without using a bank. That's one of them.
It's not tulips and 100% useless. A digital currency is interesting to explore. It's interesting enough that institutions are stuffing their cash into it because they are fearing inflation, and the old school explanations of why we won't get inflation are now being questioned.
Don't ask me to forcefully argue for or against, there are many other people on this thread to argue both positions. But you can't say it has NO utility.
Hi, thanks for the reply, makes sense what you said. I am not looking for strong stances or arguing; I just want to expand my understanding. I get from you that institutions pour real money into it and they rely on bitcoin's scarcity to overcome inflation. Makes sense. However, I want to understand why using banks or FinTech companies for money transfer is so bad? Nowadays there are low fees, way lower than what Bitcoin offers today. And that is just one aspect. It's just an opinion but I feel that money transfer problems caused by banks are exaggerated, especially in developed countries. Can you explain why I might be wrong about it? I also do not own Bitcoin, my employer is not a bank and I do not have any involvement or desire to promote the banking or payments industry.
> However, I want to understand why using banks or FinTech companies for money transfer is so bad?
I've never done it, but when I lived abroad and I had to transfer money, I got fleeced by banks and then (a few years ago) there weren't really any alternatives. I don't have any skin in the game with Bitcoin, but I guess that left a foul taste in my mouth.
There've been other comments about Bitcoin that are a bit more nuanced and interesting, in one case there was a gentleman from Argentina making an impassioned case for the use over and against the polices of his government.
I think there's an element of institutional mistrust that Bitcoin claims - maybe wrongly, given how centralized it is - to solve.
Certainly the most important value proposition from the companies behind the established cryptocurrencies is the decentralized network for value transfers. No more "brokerage" firms. Getting rid of these feels like an emotional fulfillment; and today this beats pragmatism. Thanks for writing.
This is silly. Consensus (probably, I am doubtful of PoS) isn't free. You get a choice between bitcoin mining and military force. Which do you find less harmful?
Edit: I should clarify. I am saying that the status of the USD as a reserve currency has led to lots of US military action.
No one here is arguing for replacement of military force, your brain got stuck by a common fallacy it seems.
Notice how displacing some military force usage by changing the motivation or capability for intervention (for example to maintain a currency advantage) might be in itself a Good Thing (tm) and how it does not require replacing armed forces entirely.
Not sure what you are going for here. Indeed, reading a single sentence without considering context typically leads one to faulty conclusions. Note that the previous sentence in the parent post is "Consensus (probably, I am doubtful of PoS) isn't free."
Military force and law enforcement provide solutions for consensus across great many domains, so they're marginally near-free to use for consensus in any single area of interest. You could say, they are consensus factored out and made incarnate.
Conversely, if all money suddenly become Bitcoin, military force and police would still be needed, in mostly the same amount they are today.
It's odd to me that people think Bitcoin can be free of "force" long term. Bad guys can point a gun at your head and demand you login into Coinbase to transfer coins to them. What happens if the government makes Microsoft give them admin accounts to the Bitcoin repo? What happens if there is a fork and China doesn't like it and prohibits miners from adopting it? BTC is way more susceptible to traditional military and government might then people make it out to be.
I don't think it will eliminate the need for the military or police force entirely. I have seen a lot of bold bitcoin claims but I don't think anyone really does.
My post was referring to how the US has killed lots of people to keep strong dollar. I think its feasible that a true global currency (possibly bitcoin) could prevent violence like this.
Exactly. Fossil fuels and rare earth metals are already considered to be a national security risks. Depending on a currency with huge energy requirements only multiplies this risk, which further incentivizes war.
Energy scarcity is a thing of the past for anyone who wants it to be. Between solar and nuclear, it's a helluva lot easier to get basically unlimited renewable energy than it is to go to war. Malthus hasn't been right about the way the world works in 200 years
I doubt they would just roll over yeah. If you consider the dollar as a weapon/tool for US hegemony, bitcoin functions as almost like a terrorist entity. Not clear what to do with this information
It's just a risk that the value of it drops to near zero if it's outlawed.
Or it could become highly regulated and be much less useful for trade due to onerous compliance requirements. For example, how do you prove that wallet X that one is sending money to isn't going to someone who's in an embargoed country?
It's a big risk. But, to answer your second question, its a public ledger. Its significantly more conducive to surveillance than cash. Just punish people if they send money to an unverified address.
I think that's a gross possibility, and I hope no governments take this measure, but I don't think it would be difficult.
I don't disagree with you, I just don't personally believe that it will become a major instrument of trade due to it removing a major component of economic policy. I believe that most countries would rather have their citizens use their national currency as opposed to a foreign or electronic one, since that allows them a lot more control on inflation.
From that perspective, it seems to follow that most governments would want to regulate cryptocurrencies, and probably not in the way that Bitcoin bulls would like it to be.
I could definitely be wrong on this though. I thought in the past that the ad model of Facebook and Google would go nowhere, and look where they're at now.
I don't really know either. Maybe you're right, but as a (maybe ridiculous) counterpoint, what benefit does it give a government to have their own currency? I think the main benefit is not having to rely on another government to keep it stable... or to avoid the subservience that follows from having to rely on acquiring said currency from another government. For most countries now practically I think this means 'not giving the US complete control over our politics and not having to buy USD from them'.
Are there any other benefits? If not, wouldn't adopting bitcoin be an easy solution to monetary policy while avoiding this issue? Or am I missing something?
This would be a pretty long topic to discuss, but in general monetary policy is something that governments really do want to control. If a national economy is not doing well or there is little demand for their goods or currency, the value of their currency is lower, making their exports cheaper and allowing them to participate in the global markets.
One example of having monetary policy out of a country's control is the EU, which has both strong economies (eg. Germany) and weaker ones (eg. Greece). A strong Euro works well for Germany, since they get more effective purchasing power out of their trade surplus. For Greece, a strong Euro means that their exports are probably not competitive price wise.
If these countries had their own currency, the Deutsche Mark would be a strong currency (making their exports relatively more expensive) and the Greek Drachma a weaker currency (making their exports relatively less expensive), giving them a push towards a more even trade balance. As citizens tend to transact in local currency, this also encourages Greek citizens to seek more local goods (eg. Greek tomatoes grown on Greek soil with Greek labor) as foreign goods are more expensive, hence further stimulating their economy.
I grant the other points, but if the government took over the bitcoin repo and changed it, why wouldn't people just keep using the old version of the software?
How so? Seems correct to me. Just this morning I had the choice of paying for groceries either with Bitcoin or by launching a violent invasion of the store.
/u/nindalf this honestly made me laugh out loud and spill my drink. The next time I am trying to explain the concept of a false dichotomy, I am absolutely using this example. XD
If surveillance is increased a bit more, the government won't need to use force to get your money.. they'll just use some rootkit chip on whatever device to get your private key.
I am also doubtful of PoS but perhaps there's a way to make a greener coin using some amount of trust and regulation?
Well, technically you only need the threat of violence. Potential-but-unrealized violence is arguably much better for humanity than proof-of-ever-escalating wasted energy.
Maybe true depending on the energy source. I've heard it argued also that bitcoin will become the 'purchaser of last resort' for energy. For example, fracking companies often just burn off natural gas they find while looking for oil... instead, this gas could be used to mine btc. Also well documented that a lot of bitcoin operations in china are fueled by hydroelectric sources.
The promise of violence is free until realized though.
Hydroelectric sources that could be best used on homes, businesses, etc. Anything but Bitcoin, really.
Did everyone forget that the best goal we can achieve with power usage is by reducing consumption outright? Just because some of the mining is done on greener solutions doesn't mean it's a net positive.
Global warming isn't exactly going away if we keep this experiment up.
Yeah but good luck convincing people to move next to sources of energy so cheap it would be wasted otherwise (rural west texas, rural china). If bitcoin becomes the dominant global financial system, securing it will be a worthy use of energy.
I really hope you're wrong about that. Bitcoin becoming something like a world reserve currency will only make the problems infinitely worse. Be careful what you wish for, because future generations are going to be left holding the bag.
Electricity per transaction is an extremely poor way to communicate anything useful. It says nothing about the actual harm of Bitcoin and only leaves readers (and bloggers) drawing their own conclusions.
why is it a poor way to communicate anything useful?
if sending someone a dollar through venmo costs $0.0000001 worth of electricity and sending someone a dollar through the bitcoin network costs $1 doesn't that communicate everything you need to know?
Probably because twice the amount of transactions do require as much energy as half of the amount of transactions or as much energy as no transactions at all, i.e. Bitcoin's energy usage depends on the difficulty of mining a block which is not affected by the number of transactions in a block.
> i.e. Bitcoin's energy usage depends on the difficulty of mining a block which is not affected by the number of transactions in a block.
Only if the transactions do not have any fee. If they have a transaction fee, this indirectly increases the difficulty of mining future blocks (since the miners get more Bitcoin per block, they can use more energy per block before their expected net return is negative, and they are incentivized to do so through competition with other miners; the Bitcoin difficulty adjustment then notices the increase in hash rate and increases the difficulty).
In your example, you are giving concrete numbers. Concrete numbers are extremely useful. If you make a comparison without concrete numbers, it can often be misleading. It goes without saying that concrete numbers can be misleading on their own. It can be quite difficult to nail down rules for honest communication.
There are a lot of terrible things that we use or were using. I don't want to sound mean, but Windows 1.0, 2.0 and 3.0 were not that great. Not to mention Windows Millennium Edition.
Think of all that electricity wasted because people could not get their work done, they had to stay longer in the office wasting water, electricity, getting frustrated, etc.
And that's all because Bill's mom was working in IBM management.
But, how to estimate the waste of traditional currency? US dollar is based on Capitalism and the weapons. Should we count the price to maintain these two factors? Capitalism is almost built on the balance of wasting resource and incoming. Should we count the waste in market? Developed countries keep QE to spread the debt into global market. Should we count the side effect of QE? As citizen of developed countries, we take the benefits of traditional money and we control it. It is good for us as government or corporation, but may not be good for individual.
The idea here seems to be that Gates cannot be trusted on BTC because BTC would somehow harm him and he has a large interest in the failure of BTC. But this seems to make no sense to me.
BTC won't change the structure of wealth, even if it is wildly
successful.
A single Bitcoin represents 100,000,000 satoshi. Bitcoin is not scarce. We could stop mining today, and do a X:1 split every few years to keep inflation in check.
Because this rich tech billionaire brought about humanity-changing innovations so maybe what he says deserves some attention? Why does _your_ opinion matter?
His status as rich tech billionaire doesn't make a difference unless he is making arguments that are new or interesting. And he isn't. We've all been hearing the environment argument for years now.
Plus, there is obviously an argument to be made that he has had a negative overall influence on the world & therefore shouldn't be trusted.
I don't want to hash them out, plenty of arguments from the leftists or linux people for example. Free software, exploitation of workers. Whatever. The argument itself is arbitrary, I'm just saying that he's a controversial figure
No, just because he's a billionaire doesn't mean any of those things.
It's just that Bill Gates is legendary for the amounts he reads and his recall ability, and his contributions to many topics outside of just managing MS (state of the art algorithms, erradictinc malaria, nuclear energy etc). I thought everyone knew this, but apparently not. So you can see how funny it is when a random guy on HN says "just because he's a billionaire" :D
Fair enough. But for every bill gates we can find a mark cuban, michael saylor etc who are extremely excited about bitcoin. So I still think it is uninteresting.
First you said "Just because Bill Gates is a billionaire, doesn't mean he knows what he's talking about"
Now that you've learned that most likely he DOES know what he's talking about, you changed your argument to "Other people think other things, so it's uninteresting" (What? WE're not talking about random people here.)
Lets just say it: you already arrived at the conclusion you want, now you're grasping for arguments to support it.
I conceded the point that he hasn't looked into it with 'fair enough' lol. Regardless, informed is relative. I don't think Bill Gates knows more on bitcoin than I do. His status as an authority figure is uninteresting, because we can find many authority figures that disagree with him.
according to my bitcoin friends, Mr. Gates is just jealous of the bitcoin billionaires.
in all seriousness - i'm actually very bullish on crypto - but I don't see any reason bitcoin will be the winner for all of entirety. to me I think all major countries will eventually invent their own digital currencies and a new coin will arrive which is simply a fixed price tied to the prices of all digital currencies.
what? no they're not. just because transactions are done digitally doesn't mean the currency is digital. the dollar, for example is not a digital currency, but we in the USA are exploring it.
If you're reading this 10 years from now look how clueless everyone in this thread is. Everyone here still thinks BTC is not even the best crypto let alone the best asset in the world. If 50k isn't enough to convince them, nothing will. Hope you're enjoying $1M+ BTC prices in 2031.
So let's see, at $1M/BTC, three halvings, 6 blocks per hour, that's 9.3BTC/hr in rewards, call it at least $10M/hr because transaction fees. Electricity at 5 cents/kWh means that buys 200GW, but say miner cost is half hardware. So we'd be consuming about 100GW of energy to send seven transactions per second.
It will be securing $20T in terms of market cap. Energy consumption metrics aren't useful without considering the source of energy. BTC gives us the potential to harness natural sources of untapped energy far from cities, convert it into money, and instantly transport it anywhere. The transaction limit is a non issue for me because final settlement is still faster than traditional methods.
He's not wrong, but so is any power utilization that doesn't come from green (or geothermal, or nuclear, etc.) sources which don't produce tons of carbon as a byproduct
I feel like it's a matter of time until the central banks release a coin (gold backed?) and kick Bitcoin and all other crypto's out. Keeps them in power, uses the advantages of crypto.
Central banks will never truly produce a blockchain based crypto, they won't be able to control it and they will also never make it gold backed, they can't control it.
Blockchain =/= decentralized, read: Tether. Most popular stablecoin, yet one guy holds the power to create, alter or delete wallets/coins. Something that runs on the blockchain can be controlled by a singular entity.
I disagree. While it would do a lot of damage, the advantage of a properly scalable and functioning decentralized cryptocurrency (not implying BTC is the right one) is that it cannot be controlled by any central bank, or anyone else. That is the inherent elegance of such a solution. While in the Western world there is little need for a parallel monetary system except for the black market, other countries are not as fortunate and do not trust their central banks with anything (classic example is Venezuela).
You could argue Gold is still a good alternative, but owning, transferring gold is problematic unless you actually store it yourself. Any "title" to gold somewhere else can inevitably be seized by a government (or your house raided). Encryption keys are much harder to seize if taken care of properly.
Venezuela, please. Bitcoin is never going to replace the ability of a sovereign state from issuing its own obligations. And as always it is the credibility of that sovereign state that will determine the value of those obligations.
Digital currencies for central banks (CBDC) do not require a blockchain to exist. They are two different things, I don't think they will compete with each others.
You might even argue that they require a blockchain not to exist. A coin that's designed to be centralized needs blockchain (as opposed to something simpler like a hash chain) like a fish needs a snorkel.
I know this is controversial to some, but IMO if it keeps them in power and is backed by a physical asset, it's just an overengineered database, and not a true cryptocurrency because it misses the point which is about control.
And yes, I'm well aware of many such meaningless """cryptocurrencies""".
I think countries are going to get their own digital currency and ban crypto. I saw some news on India that they are looking to ban all crypto and just looking to push indian digital currency.
China is developing digital yuan so i am not sure what will happen to bitcoin that you own if the country deems it illegal.
If you want to bash Crypto please offer an alternative to the issues around fiat. If the USD were tied to gold again I would sell all my Bitcoin and I'd say most other would too. Bitcoin is just an escape hatch from mismanaged monetary policy.
Bill has said a lot of things over the years. Watch him at all things digital next to jobs, the only reason for his success was his cut-throat practices. Not a visionary.
Bitcoin itself is not bad for the Planet. The current implementation differs somewhat from the Satoshi vision and has not scaled well in terms of fossil-fuel based electricity consumption. Solar or wind powered Bitcoin would have little impact, and in the right areas be cheaper for the miners. This is a trend I expect to see take off.
Also, I suspect Bitcoin at some point will migrate to Proof of Stake once aspects of that set of algorithms are addressed:
* Problems with bonding and checkpoints
* Problems with being fuzzily forgiving about slashing
* More rigor needed by doing rigorous proofs somewhere, in some way
* Some systems introduce a central party that rubberstamps the latest block (e.g. Peercoin)
* Existence of such a coordinating party costs the system its censorship resistance
* Since stakers have to hold funds in the system to author blocks, it's difficulty to have a fair launch of a PoS system. Many PoS systems get either started as airdrops, ICOs, or a proof of burn auction
* Staking requires some representation of the private key to be online at all times, which may mean that it is easier to redirect some of the staking power (in early PoS systems it had to be the actual private key, so not only staking power but actual funds could get stolen)
* Some systems require coins to have a certain amount of confirmations before being allowed to be used for staking, so spending funds interrupts your staking revenue
* Some people expect that staking revenue will be taxed differently than mining revenue
* Some PoS systems can be gamed for profit by trying a vast number of block candidates to cause the staker to get blocks more often than their stake should qualify them for. Such an incentive may turn such PoS systems just into PoW schemes under the hood
* Some researchers argue that "by depending only on resources within the system, proof of stake cannot be used to form a distributed consensus, since it depends on the very history it is trying to form to enforce loss of value".
These are not problems I came up with, they are from various sources, such as Bram Cohen.
For full disclosure: I have Bitcoin, Cardano, and Ethereum, in that order of holdings.
Welcome to Hacker News, where anything critical of Silicon Valley's religions (climate activism and veganism), no matter how well-reasoned and factual, gets downvoted to death.
Bill Gates' decades long history of shady business practices and embrace, extend, extinguish are not a "conspiracy". There's no reason to listen to Gates on this topic (he's not an expert), and it's very likely that he has financial reasons for saying what he's saying.
“Bitcoin uses more electricity per transaction than any other method known to mankind, and so it’s not a great climate thing"
The article doesn't compare electricity usage of other transaction methods and their relative qualities on balance to energy consumption. This makes it difficult to evaluate Gate's claim. Maybe he said more in Clubhouse but as it stands its an assertion without evidence.
For example, my assumption is that paper checks would have relatively high overall energy consumption and that society has thought the costs worth it.
In the larger picture, the article and Gates apparently see electrical utilization as waste, which seems short-sighted. For example, computations performed with geothermal energy available in Iceland can support people around the world. Or similar to a co-generation plant bitcoin mining could be performed to soak up base load that must be used during off hours.
Mr. Bill Gates has a great ego, and money to make almost anything happen. Hope he takes up flying! into the ground at high speeds.
Why would I trust this sweater wearing phoney opinions on how to fix the world, given how terrible windows is. When his vaccine truck pulls up to a school, little black kids in Africa run. They know...
Bitcoin is bad for the environment, for now. There is no way to value Bitcoin. It has no intrinsic value. Its valuation is a narrative. The higher the price goes, the more energy we'd spend on mining it. I call this the Bitcoin Price Paradox [1]. But it's not all hopeless. We can find a way to ground Bitcoin to reality by develop non-speculative use-cases. Then we can develop a valuation model. I believe the key to solving this paradox is to have an inflationary crypto. It can drive payment adoption. I'm involved with Bitflate, a crypto with 7% inflation [2]. Once we have payment adoption, we can create valuation models and control energy spend on mining.
Still no valid usecase found for Bitcoin, aside from being a number-is-green-and-goes-up currency. Lightning is unused. TX fees are stupidly high. We're dedicating ASICs powered by entire coal plants to mining bitcoin.
And before you, commenter to this post, say anything, no, your Eth/Doge/Xrp/Monero/Tether/scam-ipo-of-the-day is not more valuable. NFTs are worthless. No, being distributed does not make your favorite token useful. No, mining contributing to the chain's security is not useful, because there is nothing useful on said blockchain. No, you're not more free with your coin when nobody wants it. No, you're not free of central banks when you all decide to dump it all in Coinbase and Kraken anyways.
Just ban these worthless wastes of energy and time.
No it does not. Especially not with bitcoin. Nobody is paying anything with bitcoin. Are you going to pay for your groceries in your store that doesn't take bitcoin, by adding 30 dollars of fees and having it clear in three days ?
If people want to gamble with their money and get something out of it, that is their right.
I just wish people with money had a little shame and didn't spread this fairytale of these crypto currencies being anything other than a lottery ticket. The question 'how much is enough' from the movie Wall Street often comes to mind every time I see some rich scumbag like Chamath promoting bitcoin on TV. Haven't you got enough fucking money? Apparently not and so it goes.
I say Bill Gates is bad for the Planet.
The reality is PoW is the only consensus mechanism that is secure today. PoS is not secure. It will never be secure. It takes energy to secure money, it is that simple.
We will spend as much energy as is needed to secure the bitcoin monetary supply - the economic prosperity of the planet is at risk!
For all those folks out there begging for PoS bitcoin, it will never happen. Your misinformed opinions of environment/energy and your demand that I choose to spend energy in a way you approve of is oppression by the ignorant.
PoS coins are worthless rubbish. There is only bitcoin.
I think it's clear that the electrical use of proof of work will become a serious issue if Bitcoin (or similar blockchain) becomes widely adopted. Do you have a suggestion on how to address that issue, or do you believe it's a non-issue entirely?
It is entirely an non-issue. Nobody has the right to say how others use energy.
One can make an argument about transmission efficiency, and generation materials (and how renewable sources are more efficient), thus profitable for both the planet and the miner.
But the actual use of energy?
Get out of here. Tired arguments that I thought died years ago.
You can believe that.
I believe that existing, inferior stores of value like the USD and EURO will be destroyed by the alternative (Bitcoin).
Energy usage is its biggest strength.
Argument:
PoW is a security model that depends on energy usage and mathematics.
PoS is a security model that depends on human behavior.
I trust physics over human behavior any day. Human psychology is the weak link in any system.
In the next year, we will see a further consolidation of funds towards traditional finance (they have the capital to acquire the floating btc). We do not want tradfi in charge of coin emission. Proof of Stake is reinventing existing power structures. Bitcoin as PoW prevents this hostile takeover by legacy forces.
If tradfi and governments want a say in how coins are transacted/emitted, they better get mining!
I will myself be a validator as well. Anyone can be one (even if you don't have 32 ethers, you can join a pool). You are either purposefully or ignorantly telling lies.
How so?
I have no doubt that anyone can stake their ether.
What I doubt is the security model of having large ether stakers in control of emission/tx inclusion.
If large stakeholders, like the largest banks in the world, have a say in how this works, the value of a decentralized, antifragile peer to peer money fails.
I think this shows how truly powerful the network effect, and being first to market is. Because without those things, Bitcoin would be nothing.