One Bitcoin miner is buying 20,000 16nm wafers from TSMC per month

No. PoW is just an old name from the 199x spam fighting. The point here is planet-scale consensus, not "proof of work". One way to achieve distributed consensus in untrusted non-static environment is to randomly choose master for a given block. Imagine that everybody just throws a dice, and whoever gets 6 becomes that master. How we make sure that there is only one master for a given block, and that when you say 6 you really got 6 as i have no way of checking whether you even threw the dice at all? Satoshi's great insight was in building such a verifiable and statistically [for several minutes] single-master dice by using the good old hash based PoW.

Now, if somebody could come up with more energy efficient way to achieve that consensus at such a scale...

The energy is spent on security independent of transaction volume.

The current main incentive against cheating is that miners will lose their invested PoW (compute time + electricity) if they cheat and get their block thrown out. However, with a useful PoW, this calculus changes. Now, the PoW is no longer "wasted" when the miner cheats and gets caught as the PoW is now useful for something besides mining. This means that attacks are much cheaper and much more likely to happen.

One interesting part about this is that you can consider PoW usefulness on a sliding scale. The more useful the PoW, the more vulnerable your coin is to attack. Thus, you can probably get away with a "useful" PoW if it isn't actually very useful. This is one of the reasons why most "useful" PoW schemes focus on something which is pretty much useless (such as finding weird primes and whatnot).

It goes something like this: Imagine that you are mining Bitcoin and protein folding for a drug. Let's also imagine that if your mining rig finds the protein, it's worth $15m (as a company could commercialise a new drug with that information).

You can imagine a point where you can make more money from the results than from the mining (if they are useful, they will be worth some money after all). But the security of the Bitcoin network lies precisely in the game-theoretical aspect that it's more profitable to mine than it is to cheat. But if you can mine and make some money on the side (because it's useful), then cheating [double spending] might become more interesting. Or perhaps your "side-business" can bootstrap a 51% attack.

Finding a useful & relevant computational problem, whose monetary value is predictably low far into future and whose computation scales with a simple function ... well, it's a really difficult question. So the safest option is to go for "brainless" computation. That is trying random numbers.

I think it is not useless. It does the job: "Keeping the network secure by calculating random hashes". Useless, of course, is very subjective. I wish most video games did something useful like protein folding (I consider them and the machines powering them a waste of energy, matter, mining, time and intellectual power).

It's not that easy. You need to be able to generate tasks that have a predictable levels of difficulty.

If we really care about the environment we wouldn't be playing this game of trying to say one kind of environment destroying energy consumption is okay but another isn't. We would instead argue to directly solve the root problem, which is dirty energy polluting our environment, by making sure energy pricing covers that cost. That way the market can tell us if Logan Paul videos are more valuable to people than say Bitcoin, and we would actually do something to fix the environment rather than simply making it cheaper for one energy consumer (Youtube) to pollute at the expense of outlawing another (Bitcoin).

It's stupid while it lasts bit fortunately it won't. Bitcoin has no practical utility, neither as currency nor as a store of value, and you can't pick the blockchain apart to extract anything of value. Bitcoin is like my dad's books of completed sudokus: Proof of hard work but not of any value to anyone.

ATM Bitcoin is approaching the $10K mark from above. The press will soon be writing stories about people who lost this-and-this-much. The stupid money which fueled the bubble will dry up.

Huh, maybe the dark fibre of Bitcoin will be cheap silicon and subsidized fab research.

Neal Stephenson, if you're reading this, this would make an amazing sci-fi novel.

  For 30 years I have been wondering, what indication of its 
  existence might we expect from a true AI? Certainly not 
  any explicit revelation, which might spark a movement to 
  pull the plug. Anomalous accumulation or creation of 
  wealth might be a sign, or an unquenchable thirst for raw 
  information, storage space, and processing cycles, or a 
  concerted attempt to secure an uninterrupted, autonomous 
  power supply. But the real sign, I suspect, would be a 
  circle of cheerful, contented, intellectually and 
  physically well-nourished people surrounding the AI. There 
  wouldn't be any need for True Believers, or the 
  downloading of human brains or anything sinister like 
  that: just a gradual, gentle, pervasive and mutually 
  beneficial contact between us and a growing something 
  else. This remains a non-testable hypothesis, for now. The 
  best description comes from science fiction writer Simon 
  Ings:

  When our machines overtook us, too complex and efficient 
  for us to control, they did it so fast and so smoothly and 
  so usefully, only a fool or a prophet would have dared 
  complain."

Now I don't know what to do: sell it since Volta will be a game-changer for ML anyway, but what if when I will want to do ML again it will be impossible to buy any card?

Hard question to answer. Is it a waste? Compared to having one centralised miner plodding along at zero difficulty, yes. But it depends what new tech/ideas comes out of all this blockchain stuff. Are particle accelerators a waste?

But we are still not done with the Bitcoin bubble.

This approach gives them the latest, most energy efficient chips at a low cost since they then get sold.

Obviously, they could optimize the mine-to-sale ratio dynamically as mining-profits and chip-prices change.

http://www.tsmc.com/english/dedicatedFoundry/manufacturing/f...

It has no social value and never will.

[1] https://books.google.com/books?id=7o0rAAAAYAAJ&lpg=PA6&ots=Z...

[edited to clarify that this is the United States DoD]

Unlike a clueless average Joe at home, they're running huge businesses, as this article suggests, so they're probably smarter. Does anyone know what the math here is? I'm assuming a) they aren't cashing out too much/too regularly because they're huge and this would drop the price too much and b) they aren't stupid to make huge investments like this, just hoping all would be well.

Where am I wrong? Is the number of fresh "investors" still big enough for all of them to have a steady cashflow? Do they believe they can get out before everyone else? Are they just like all other believers, but with deeper pockets?

There are a lot of replies in this thread talking about Bitmain like they're the miner, when in reality they're the mining supply store selling miners the shovels, hard hats, and so on.

Mining itself may be profitable, or it may not. But no matter what, the supplier should come out with a fairly healthy profit if they play their cards right.

So the real lesson is be immoral, break the law, diversify and don't get married.

It's not like he is the only one who thought of selling shovels with huge markups.

What's the rumor?

Bitcoin mining no longer uses video cards. More demand for bitcoin mining does not translate into more demand for video cards.