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Comment by spiorf | Hacker News Reader

The energy expended is a guarantee of security and immutability.

The fact that real world energy is expended is the thermodynamic guarantee of the irreversibility of a transaction.

If you have access to the VISA database, and change something, you cannot have the cryptographic proof that it has not been tampered with. At the very best, you trust a VISA root key.

With Bitcoin you trust math and physics, telling that if the whole network has expended 1TWh after my transaction, at least twice that energy will be necessary to reverse it, and the only data i need to prove that, is the blockchain.

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I get that the energy is being used for something useful and cool, but when the energy cost to secure a single transaction could power 5 households for a day, then something is wrong and needs to be fixed.

Surely even fans can agree there's a level at which it just doesn't make sense any more.

> something is wrong and needs to be fixed

It's already fixed with PoS... IMO the winner of the cryptocurrency-race will be a PoS-based coin.

PoS deserves research but it's far from shown itself to be viable as the dominate consensus mechanism.

A lot of research was done by heavyweights for PoS in 2012 and 2013. The consensus was that it was a fruitless pursuit and that PoS could not match PoW in terms of security and decentralization.

Several papers have been written about it.

https://download.wpsoftware.net/bitcoin/pos.pdf

I'm just trying to not be absolutest by stating it can't work. I'm in the camp that believes it's just obfuscated PoW.

Well, as you may know it's currently being used in some coins like bitshares [0] and it works fine, Ethereum also is migrating to PoS [1]. So the consensus for a lot of people in the ecosystem is that it works.

[0] https://bitshares.org/technology/delegated-proof-of-stake-co...

[1] https://www.coindesk.com/ethereum-casper-proof-stake-rewrite...

Yes, there is a level at which it doesn't make sense any more. In a sufficiently efficient market, that is the point we are at, at any given point in time.

I believe the bitcoin mining market is efficient enough already that we're more or less there.

That shows the primary failings of putting all trust in an efficient market. The "makes sense" breaking point in an efficient market is when it stops making financial sense for the miners. It relies on rational miners who don't don't succumb to the sunk cost fallacy after investing large sums upfront in mining rigs. While it also ignores the negative externalities involved in increasing global electricity usage like climate change.

Yeah, I hadn't really considered how simple economics essentially forces this to grow to exactly the point where the externalities are unsupportable based on the benefit provided.

That energy is not just confirming the transactions in the existing block, it is protecting all transactions in the blockchain history, adding security to each of them. That represents a history of more than $70 billion in value. Suddenly it doesn't seem so expensive anymore.

That's actually revealing.

First people try to argue that all this gigantic energy expenditure "buys" security.

And then – in the fine print – you are learning that you don't actually "buy" security, you have been sold a subscription. This gigantic waste of energy doesn't do anything unless you follow up with even more energy.

So the calculations that x amount of energy "secures" y amount of economic value is flat out wrong. Because x should be x + x' + x'' ad infinitum.

Oh, and the longer you stay in, the more difficult is getting out, because "sunk cost" isn't a fallacy in this scheme, it's actually real.

Yeah, the inflation is a tax more or less. It's a tax on your holdings to pay for the security and integrity of the network, and to make sure things keep moving forward.

Bitcoin is nearing the point where most security will be paid by fees instead of inflation, but imo inflation is the more fair model to pay for security.

In addition to math and physics, you also trust the durability of infrastructure, the correctness of the software, the moral compass and cohesion of the developers, that there will be no 51%+ mining coalitions, that if there are they'll be benevolent, and probably believe in relative global peace.

You also trust totally mundane things like internet resilience against phishing attacks, web browsers and other basic tools, the https standard, dns and certificate authorities, etc. etc.

And of course you trust your own skills keeping your devices, passwords, keys, totally secured from outside access, and not making the zillion tiny userland mistakes that get your Bitcoin lost or stolen.

And this trust in the developers and the system has already been broken (for benevolent reasons, but still):

https://github.com/bitcoin/bips/blob/master/bip-0050.mediawi...

Please note "The right people were online and available in IRC or could be contacted directly."

Yes we all understand this. The question is is it worth it? BTC offers some clear benefits over existing money transferring systems, but is also has clear drawbacks. Simply restating some benefits doesn't close the issue.

*at least an equal amount of energy is needed to reverse it

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