Coin Carbon Cap – PoW cryptocurrencies ranked by energy efficiency
coincarboncap.com
coincarboncap.com
The main point that you should understand is that a PoW blockchain's energy usage is not proportional to its transactions.
I'll say that a different way: the transactions themselves do not use any energy in mining.
I'll say this in a third way: it takes exactly the same amount of energy to mine an empty block as it does a 1GB block of transactions, as it does a 1,000,000,000 PB block.
In reality, transactions are all hashed together in a mining pool into a single numeric hash before miners ever see them. It doesn't matter how many transactions are included in the hash. The hashpower just has to find a magic number matching that hash.
On the other hand, the #1 factor that increases a blockchain's energy usage is its price per coin. The price of a coin is how much that coin is worth to be mined, which is the incentive for miners to dump energy into mining it. In steady state, miners will dump energy into mining a coin until the cost of energy = the value of the coins coming out.
This is why you can see Bitcoin SV at the top of the list -- it's worth the least of the Bitcoins.
And it's also misleading to compute the second factor -- transactions per second -- by counting the actual transactions on the blockchain, rather than looking at the transaction capacity. Because blockchains only cost something per transaction once they reach capacity. This is misleading with Bitcoin SV, for instance, because that coin artificially creates bogus transactions on its blockchain in order to make it look popular and demonstrate the vision of large blockchains. Bitcoin Cash, on the other hand, can handle a thousands of transactions per second (on testnet) but doesn't clog its live blockchain with them.
So, in sum, if you send a transaction on Bitcoin Cash, it will cost 0 kW of electricity, even though it says 31.3 Txs/MWh (which equates to 31.9kW/Tx) in this chart. This is because transactions do not cost anything in electricity. Electricity only goes to preventing double-spends. A better metric would be "energy use per double-spend that was prevented."
Important to remember that the energy used on mining both secures current and *PAST* transactions, that's the entire point of the blockchain. I think "total value secured" captures this point.
I find it frustrating that crypto-currencies are judged by their energy usage, meanwhile traditional fiat currencies are secured by massive banking industries, governments, and militaries. The total energy required to maintain a secure and stable fiat currency is likely orders of magnitude greater than that of Bitcoin today. The problem is one is easier to calculate, so it generates easy headlines from lazy journalists.
Fundamentally energy usage isn't a worthy argument for or against a currency. It's the wrong measurement to use. It seems to be the go-to straw-man argument for those who already made up their minds about cryptocurrency before hand.
Yes, Proof-of-Stake exists, but notably it does not exist at a reasonable scale yet. If it could work as well as Proof-of-Work then it eventually would displace it. All attempts so far have not lived up to their hype.
This argument makes no sense. Bitcoin doesn't obviate the need for militaries, banks, or governments, those things would exist regardless of the type of currency being used. Furthermore, these institutions have functions that go far beyond "securing fiat currency", not to mention the fact that bitcoin's existence relies on the massive infrastructure that facilitates the power grid and internet (which are secured by governments and militaries). Beyond that, bitcoin's value is inextricably linked to the utility of government issued currencies since bitcoin is not a suitable unit of exchange in a real economy due to its miniscule transaction capacity. In a world where fiat currencies collapsed the value of bitcoin would also plummet due to the fact that bitcoin's poor throughput could not sustain the the market for staple goods such as food, water, and medicine.
The end of gold backed currencies in the 70s and replacement by fiat currencies hinged on the middle east oil states agreeing to sell oil in USD, in return for global policing by the US[1]. There is thus an intimate relationship between the current system and fossil fuels and the military, which goes beyond just ‘existing infrastructure’ arguments. This doesn’t mean we should countenance burning coal to mine bitcoin, but we shouldn’t forget history either, and as such the argument of the OP has some merit.
Second point is about transaction volume. Compared to total global money, the transaction volume of fiat is also very small. The recent money printing should make this obvious. The amount of fiat in fixed income markets and derivatives is staggering compared to what you mean by ‘transactions’[2]. Bitcoin has payment solutions in the works, it is likely that transaction volume and unit of exchange utility will increase over time. Additionally, if we take an actual example of a collapsing fiat as occurred in the hyperinflationary period in Brazil in 1994, the Government fixed the problem by inventing a new currency [3]. It is quite possible that in the current era, countries with collapsing fiats would use cryptocurrencies for this purpose, as there are some obvious advantages.
[1] https://www.lynalden.com/fraying-petrodollar-system/ [2] https://www.marketwatch.com/story/this-is-how-much-money-exi... [3] https://en.m.wikipedia.org/wiki/Hyperinflation_in_Brazil
Even granting this premise, the argument still makes no sense. Governments, banks, and militaries existed for centuries prior to the existence of even the U.S. itself, so the suggestion that these institutions are somehow a product of U.S. monetary policy in the 70s is absurd on its face. I also think it's important not to "forget history" and the history of these institutions far exceeds what that argument grants.
> Compared to total global money, the transaction volume of fiat is also very small.
This is also beside the point. Bitcoin's value is highly dependent on the utility of government issued currency so that people can obtain staple goods and services that have inherent value, bitcoin is simply not able to fill this role.
> Bitcoin has payment solutions in the works, it is likely that transaction volume and unit of exchange utility will increase over time
There is always a myriad number of solutions in the works, but they don't actually mean anything until they solve the problem.
As to long term hyper inflation, you can only get long term hyper inflation if the country prints more currency. Suppose 1 trillion USD was worth 1 apple, and the US economy was even 1% as large as today, and their was the same number of USD in circulation, and the IRS only accepted taxes paid in USD. Now suddenly a lot of people really really want USD to pay taxes as their hypothetical tax bills are larger than the amount of USD possible to acquire. Except people constantly need to pay taxes so that can’t happen. What can happen is significant shifts in USD’s vale, aka it can go up or down within a range or the US can print a lot more currency.
1. By that logic bitcoin is also supported by the military, education system, banking industries etc. It relies on a secure society that has power and internet and computers and wealth for citizens to have and use these things as a prerequisite.
2. The military etc you mention actually is the basis of alot more in society than just fiat currency. So your formula "Energy used / total value secured". If you want to include those things in "energy used" then under "total value secured" you need to include basically all value ever created by humans in western countries which is in the hundreds of trillions (if not more). Not just fiat currency. And actually if we went back to the gold standard all those institutions would still need to exist to secure society. (banks, governments, and militaries existed long before we abandoned the gold standard.)
Overall its a silly concept/argument.
Crypto-currencies are also secured by those things in their present state. So long as crypto remains a small portion of the overall economy, it depends on the mainstream economy for its existence. For instance, it can't exist without an economic infrastructure that can develop and produce computer chips, telecommunications, the electric grid, and so forth.
The energy cost of Crypto is on top of the cost and externalities of the present day economic infrastructure.
That sort of argument would need some extraordinary evidence, given the sort of chaotic, crime-ridden, violent state places without governments tend to devolve into.
No way. You hear this argument all the time — that fiat currency also uses tons of energy - but I just don’t think it’s true (relative to the amount of transaction throughout, and also in absolute terms). Bitcoin mining uses something like 0.5-0.6% of global electricity consumption for a tiny, tiny fraction of (purely speculative, not economically meaningful) transactions. What % do you think fiat uses?
The fact Bitcoin could be more efficient and chooses not to isn't really an improvement over being unable to be more efficient IMHO - in fact arguably it's worse.
At the technical level BCH has showed that the network is stable in production with 20 MiB blocks, but the goal and ongoing work is to support gigabyte and eventually terabyte blocks so it would scale to worldwide usage while keeping transaction fees low. The counterargument by Bitcoin BTC is that large blocks centralize the network, as not everyone can afford to run a full node. That's a different debate that I would be happy to discuss, but I want to start by pointing out that keeping the block size low also centralizes the network, as many users will not be able to afford the increasing transaction fees (which rose to $50 at recent times). Does it make sense to restrict the network so anyone can run a $50 node but not be able to transact on it? I think decentralization is a means to an end (electronic P2P cash), not a goal in itself. In other words, blockchains should be decentralized enough that no single entity can take control of the network, but too much decentralization is inefficient, so an equilibrium must be found.
It's easy to increase the block size, but it's very unlikely it would ever be decreased again, so it makes sense to wait until there is no other option.
More on that here: https://twitter.com/DocumentingBTC/status/139399717145689293...
And you can even buy books explaining this way better than I (or twitter) can.
But as far as I know the maximal number of transactions is capped in practice.
Furthermore the security of PoW is based on it being far more expensive to mess with it then to mine it. But if you push more mommy through the same number of blocks it's at some point breaking apart.
Lastly no one says it will ever consume all energy. That works be absurd. It's about the required energy (and hardware cost) in relationship to the provided value being unhinged and for security you need steadily increasing energy costs for increased usage.
What do you mean? There are no hard technical impediments to Bitcoin being able to scale to worldwide usage with basically the same structure as today. It's a matter of optimizing software and having powerful hardware (that is available today, and will be even cheaper in the future). This article by Johannes Vermorel [1] goes over it in detail.
If you have any evidence that goes counter to this I would love to read more about it.
[1] http://blog.vermorel.com/journal/2017/12/17/terabyte-blocks-...
“The creatures outside looked from pig to man, and from man to pig, and from pig to man again; but already it was impossible to say which was which.”
Carbon footprint is a totally valid measure for anything we create or maintain, including crypto and fiat currencies.
- Bitcoin is operating at capacity and has shown unwillingness to adjust capacity, so the "kWh/tx" is valid for Bitcoin.
- Transaction fees increase the block reward, and as a consequence, the energy that can be used for mining before it becomes unprofitable. This is currently only about 10% of the total reward miners get for mining a block on the Bitcoin (BTC) blockchain, but it is something to consider. The corresponding part of the energy usage would, at a fixed fee, be proportional to transactions.
Bitcoin's layer 1 is operating at capacity - different networks make different tradeoffs. Bitcoin has gone the "less change" and "more decentralization" route by keeping layer 1 small, with the goal of moving transaction volume to layer 2.
Bitcoin introduced a number of changes like SegWit that are way more complex than adjusting a constant on layer 1, plus a huge amount of complexity on layer 2 that makes using layer 2 just as complicated as (or more complicated than) using a different cryptocurrency.
Whether it leads to "more decentralization" when everyone can run their own (L1) node but a single L1 transaction costs as much as the node hardware is quite debatable IMO. By making L1 transactions unaffordable, it encourages _centralized_ solutions where IOUs are shuffled around entirely off-chain.
Even if second layer solutions become highly centralized, the risk is significantly mitigated if you just don't keep your savings on them. If popular second layer solutions become untrustworthy then it would be easy to switch to different ones.
1) Inflation rate
2) PoW function
3) Transaction cost after blocksize limit reached
The inflation rate determines the incentive given to miners. With less incentive, the energy use will go down. This comes at the cost of increasing the ease of a double-spend, but there is already far more than enough difficulty to double-spend at the current mining rates.
The PoW function determines the capital cost required to buy the miners themselves. If you increase the capital costs (e.g. with a memory-hard PoW function, or requiring less-efficient GPUs instead of more-efficient ASICs) then miners will be able to spend less of their costs on energy. This is one way in which Eth does well by the above metric, and is a valid way to reduce energy usage in PoW.
Of course, transitioning to proof-of-stake (as eth is doing) will eliminate the energy problem entirely.
Finally, some blockchains (e.g. BTC, ETH) have reached their capacity of transactions per second, and then users can add a fee to each transaction to incentivize mining pools to include them in a block. These fees do add incentive for miners to dump energy into their blocks. However, they are a much smaller portion of the incentive than you would expect.
Reference: https://hbr.org/2021/05/how-much-energy-does-bitcoin-actuall...
You can say the same thing about ANY activity that isn't an arbitrarily defined form of altruism. Sports? Concerts? Video games? All vast wastes of time, money, and energy that could be spent fighting poverty or feeding the poor. This betrays the intention of criticizing bitcoin's energy usage because it moves the goal post of "...but but it's not using renewable energy" to "...but but that renewable energy is not being used for what I want it to be used for".
You are also assuming that only renewable energy will be used for mining in the first place. I don't think that is a given: As long as it stays profitable no matter how, miners will exploit any resource that is available to them, literally burning resources for money in their wallet. Cryptocurrencies are decentralized by design, so while the US for example can stop the use or import of inefficient stadium lighting technologies, there is no way to apply a carbon tax or stop the "import" of cryptocurrency mined through "dirty" means.
This isn't as clear cut as it sounds. The Jevons paradox: as enegry efficiency goes up, enegry demand goes up by more. Or, put another way: humans wasted less electricity 20 years ago with incandescent bulbs than we do now with LEDs. One could also say that LED efficiency is counteracted by tech improvements. But in reality, we may be using more energy, but we're also doing more, and doing things we couldn't have done 20 years ago.
I'm skeptical of assigning a value judgment to things that a lot of people find valuable. LEDs are used for bigger, brighter advertisements. If I don't personally like ads, does that mean energy efficient LEDs are a waste? Bitcoin mining is used to secure a ledger from attackers with the resources of a nation state. If I don't personally care about a secure ledger, does that mean mining is a waste?
And about profitability, this is important, and new within just the past few years: renewable energy is the cheapest energy. [1] Anyone mining with coal is behind the times and will be competed out of the market in due time. The more incentive people have to seek out the cheapest energy, the higher the demand for renewables will be, and the faster the world will get on board. I for one welcome this catalyst.
To "mine" a block, a miner attaches a random number to the content of the block (the content mostly being the actual transactions), performs a difficult calculation on the entirety (i.e. block and random number), and checks whether the result of that calculation matches a prescribed goal. The goal is to have at least a certain amount of leading zeroes in the resulting number, and it is (to everyone's best knowledge) impossible to know how many leading zeroes there will be without performing the calculation. That is the literal goal, not an analogy.
In the massively overwhelming majority of tries, this goal is not reached. The calculation was useless, and the miner tries again with a different random number attached to the block. There is no other value to the calculation than to reach the arbitrary goal. If the goal is reached, the miner has won the lottery: All participating nodes in the network accept the result (the calculation is easy to verify) and the miner may claim the rewards for themselves.
The amount of leading zeroes to achieve is directly tied to the mutually agreed upon "difficulty". If mining becomes easier and the lottery is won too quickly (say because new faster ASICs flood the market, or more miners participate), the network adjusts the difficulty up, meaning more leading zeroes, so that the overall chances of winning the lottery within a given time frame stays stable.
The cost of proof-of-work is paid by the network participants. When you transact on Bitcoin or Ethereum, you pay massive fees to proof of work miners that significantly limits the number of things you can do productively. Dozens of interesting use cases on Ethereum are made completely non-viable by fees that sometimes break $100 per transaction.
Proof of work cryptocurrencies however exist in a competitive environment with other cryptocurrencies. If a new cryptocurrency launches that can provide the same utility and security guarantees at a lower cost (either through less work, or through some other means) you will have a natural migration of users from the more expensive cryptocurrency to the cheaper cryptocurrency.
At equilibrium (which we may not be at, given all the hype currently), a proof of work cryptocurrency is only sustainable if its cost structure is competitive. There is an active incentive applied to the entire space to invent more efficient means to transact in a decentralized way, so that participants don't have to pay such high transaction fees and inflation costs to update a decentralized ledger.
> Cryptocurrencies are decentralized by design, so while the US for example can stop the use or import of inefficient stadium lighting technologies, there is no way to apply a carbon tax or stop the "import" of cryptocurrency mined through "dirty" means.
This approximately applies to all manufacturing though. What percentage of US goods are manufactured in regions that have limited regulation regarding the environment? Most of them, because if you don't use those regions, you are going to have trouble competing in the marketplace. It IS a problem for Bitcoin, but it's also a problem for all global production in general.
This seems to be purely theoretical.
In the real world, most people stick with the recognised names regardless.
The rest of your post could be read as a criticism against incomplete application of hypothetical carbon taxation regimes. It seems weird to single out PoW cryptocurrency as the one and only benefactor to a patchwork carbon taxation regime globally.
Let's say a new ASIC comes out that mines twice as efficiently, i.e. 2x less energy per calculation. Because miners can now afford to run twice the amount of ASICs on the same energy budget, this means that eventually miners are mining twice as fast.
The network however needs to keep the block rate constant (6 blocks per hour in Bitcoin), so it counteracts by adjusting the difficulty. In this case, mining a block becomes twice as difficult. In summary, everyone has now twice the amount of ASICs consuming the same amount of energy, still mining at 6 blocks per hour.
The misconception is that the "work" in "proof-of-work" is meaningful by itself. It is actually not, it is a lottery whose probability to win is adjusted exactly so that statistically, all miners in the world together will mine 6 blocks per hour on average.
As for "mining at a loss": I am not convinced there is a general principle that only allows for absolutely clean energy to make mining profitable, across the whole world and in any situation. We have already seen a coal plant being ramped up for the purpose of mining in New York, and hash rate going down when coal plants in China got flooded.
A decentralized/borderless/censorship-resistant/virtual currency is one of the most productive things we can use energy for. It might not be as apparent in the US or the developed world, but Bitcoin is a life-saver for many people in countries with crumbling currencies. We waste a lot of energy on things that are far more more useless (like christmas lights for example[1]).
We should just put carbon tax on everything with environmental side effects and let the market decides what's a productive use case vs one that isn't.
1: https://bitcoinist.com/bitcoin-mining-energy-consumption-us-...
How do you enforce carbon taxes on miners under a defunct government in a remote location of the world?
Not for a general audience. The purpose of a currency is to enable transactions. Internally, I get why people involved might fuss about the metric. But from the societal perspective it's reasonable to ask, "What does it cost per unit of value created?"
The way I like to explain it is that Bitcoin is collectively giving away about $1.5 billion a month in prize money to miners. That's the root of the problem. Miners will spend up to $1.5 billion a month on electricity (mainly) and their other expenses. Currently it's about 10x Google's electricity usage.
Total revenue is proportional to the block reward (an algorithmic parameter) and Bitcoin price. So to fix this, either they could reduce the block reward ahead of schedule (won't happen) or something could happen to crash Bitcoin's price. More transaction volume would actually be better if it were due to a fire sale.
Taxing holdings of Bitcoin would be a way to convince people and businesses to sell and discourage buying, at least for those that pay their taxes.
Or who knows, maybe threatening to do this would result in enough consensus to accelerate the block reward halving schedule?
If you implement proof of stake, for example (where the scarce resource becomes the currency of the network itself, which is a lot trickier to implement and especially quite hard to bootstrap from nothing because in the early days of a currency there's going to be only a few people owning it), then there's no need for the reward process to be a lottery (though it still can be).
You need something to be the limiting factor on the amount that you can try to win such a lottery. With proof of work, it's electricity. (assuming everyone is about as efficient as each other) Early on, they talked about it being proportional to cpu-time. That has become more abstract since.
There is already massive interest in finding more efficient ways to solve the problem. It's a difficult problem to solve (as Elon Musk will likely learn in the coming year).
The cost of proof of work is paid in two forms. The first is in the form of inflation. Merely holding onto Bitcoin means eating dilution as new Bitcoins are printed to fund the mining ecosystem. And the second cost is in terms of transaction fees. At times, it can cost $20+ to send a transaction over the Bitcoin network, and a more efficient / higher throughput system could significantly reduce these fees.
The users of Bitcoin are already themselves naturally incentivized to look for better solutions, even completely absent any care about the environment.
More enlightened self-interest would be to want to see the price go up without using more electricity, but this is secondary to the primary incentive.
To get action from enlightened self-interest, there needs to be leadership for making changes. (Ethereum seems to have this?)
This would imply the users of Bitcoin use it for anything more than speculative investment.
Something that also seems to get lost in the mix frequently is the fact that bitcoin owners themselves are the ones paying for the electricity. The security benefit comes at a cost - manifested as inflation (not just transaction fees) - and that cost is borne by all of the owners of Bitcoin. To that extent, the participants in Bitcoin are actually incentivized to use more efficient systems, because it means the inflation cost of being a participant is lower.
That they don't use cheaper systems indicates (though there are plenty of confounding factors) that they see value in paying the larger cost of holding Bitcoin.
And Bitcoin users are only paying the fraction of the cost paid for energy. But that ignores negative externalities like the pollution that's the subject of the article.
Then you have to define value. I don't think it's transactions. Any random bank can make transactions. People can transact with cash.
Cryptocurrencies create value by providing other properties such as decentralization, trustlessness, privacy. For example, Monero enables private and untraceable transactions and for privacy enthusiasts it has essentially infinite value.
With this definition of value, we can see how bitcoin isn't providing much. By now it's centralized, has no privacy, has high fees... It sucks basically. The only reason it's still the number one currency seems to be inertia. It's the most frustrating thing about this market honestly. Not only is bitcoin still king but it drags down better coins when its value plummets.
If you wanted to know how much people are willing to pay for decentralisation, trustlessness and privacy (most certainly not an infinite amount of money) you could also do that, but that's answering a different question.
Why transact via cryptocurrencies instead of other systems? Because of these other desirable properties. They're the value cryptocurrencies add to the world and the reason why people choose to them despite the inefficiency. People transact in Ethereum because they want to run smart contracts. People transact in Monero because they want privacy.
> So it absolutely makes perfect sense to measure how efficient these systems are processing transactions, and the way to measure that is by looking at how much it costs to process a transaction with each of these systems.
I don't think so. People measure this in order to compare with traditional banking systems which are centralized, require trust in institutions and affords no privacy. This is not a fair comparison.
That's an ok general rule, but it breaks down in a lot of circumstances. Look at scams, for example. People pay quite a lot for them, but at a societal level, they have strong negative value.
Interesting.
> For example, Monero enables private and untraceable transactions [...]
So so...
> Cryptocurrencies create value by providing other properties such as decentralization, trustlessness, privacy.
Let's add "a largely unregulated gambling area where people with too much money can bet their excess money on being among those who pull out before the music eventually stops" to that list, shall we?
That's also where your frustration comes from: Bitcoin is perfectly fine for this kind of "value proposition", hence it stays King of the Hill.
What I mean is people can transact via traditional systems just fine and they choose cryptocurrency because of other qualities.
> largely unregulated gambling area
The speculation is a separate thing from the coins themselves. People also speculate with fiat currencies, stocks, real estate.
> That's also where your frustration comes from: Bitcoin is perfectly fine for this kind of "value proposition", hence it stays King of the Hill.
Yes. What I don't understand is how it drags the whole market along with it no matter where it goes.
No, speculation is the primary use case for all of these coins right now.
And crypto currency has some advantages over the other speculation options you mentioned:
- more people can participate because of them being unregulated (compare: forex trading, which has much higher barriers of entry)
- it is rather easy to not pay taxes on crypto gains in many countries, especially if you're staying below certain limits
And the most important of them all: the crypto cake is still expanding and has been expanding for over ten years now. That is the crucial difference between classic forex trading and crypto - in forex, the comparative value of different currencies usually stays within a certain range. It goes up and it goes down. In crypto, the crypto just has been getting more and more valuable over the long term. It goes up, and up, and down, and further up than before again, and then some more up.
As long as this continues, any gambler betting on crypto has an edge and will win more than he loses. Of course it can't continue like this forever, but that's easy to ignore when looking at a ten year history of unbelievable gains.
That would be like saying "you need light to your math homework so we will measure how many math problems you can do per lumen of light".
The throughput of transactions is not coupled to the amount of electricity used to mine. They are two elements in the system, that doesn't mean they move proportionally in any way.
So fine, "kWh per available transaction-second" may be a more apt moniker however that's strictly what I've been talking about. Since 100% of electricity usage is attributable to mutations, this is a completely fair quantization. As blocks have been overwhelmingly full for years, the point on discrepancy is pretty much moot.
And further, the point is a dump truck is totally unsuitable for use as a school bus.
You are more than welcome to measure Wh of electricity used per math question in regards to the lighting setup. You'll find that number small and irrelevant, however. On the other hand if it requires a few thousand kWh worth of light to do a math question, you're well within your rights to ask (a) why you're doing math questions in what must be a stadium setting and (b) whether there's a more efficient lighting solution.
Which are exactly the questions we're asking here.
So, respectfully, that's exactly how logic works.
We know that. This is not an argument against cost per transaction being an adequate measure of efficiency for a transaction processing system.
Exactly, that's why if you're using this list to somehow decide coin X is more "efficient" than coin Y, then it's a foolhardy exercise.
For proof of work to actually work, the cost of the electricity has to be proportional to the total market cap of the coin. Otherwise, if the amount of work was low compared to the value of the network, it would be a strong incentive for someone to try to attack it.
That might even be a tolerable mindset if you happen to live in a cold place and the only tool available to keep you from freezing to death was electricity.
If we as a society feel like there is too much energy being consumed, we should regulate the production, and let the market come to equilibrium on a fair price for the cost of electricity. If you don't like the fact that coal plants are spewing millions of tons of CO2 into the atmosphere, regulate the coal plants, not Bitcoin. Regulation of electricity will increase the cost of electricity, which will naturally reduce the total amount of electrify that Bitcoin uses - Bitcoin's energy use is proportional to the price of energy, not to the actual quantity of energy.
For example, one could naively believe that there's absolutely no marginal emission from deciding to get on a plane. The plane is emitting basically the same amount whether there's 99 people on board or 99 + 1 (you) on board, and the plane's going to make that particular flight whether or not you get on. However, you're funding the airline industry and increasing demand (and therefore supply) for flights along that route and perhaps also indirectly helping pay for other things the airline is doing, so that could probably be considered a marginal emission contribution.
If you ignore transaction fees for a moment, it seems like this logic doesn't quite work for cryptocurrency networks. It seems like a closer analogy would be something like a contrived scenario with an airline that has routes which are absolutely static and predetermined (e.g. a contrived scenario where an airline decides it's going to fly a passenger plane a certain route once per day every day at the exact same time for a year no matter what, even if no one's aboard, and also the tickets are free if assuming no transaction fees). There are still the indirect issues with supporting the network, but it seems like there's less of a marginal emission concern if you're someone who's just making transactions, or arguably even no marginal emission concern.
In reality, you are adding some marginal emissions due to transaction fees (direct incentive to mine), and the indirect incentives could maybe be broken down into something marginal as well (no one using the network = no incentive to mine since the currency would probably have no value), but basically it kind of feels like there's less of a direct marginal emission concern as an end user of the network compared to something like getting on a plane, especially if you take transaction fees out of the equation. In that sense, it feels like abstaining is somewhat more of a moral protest rather than a direct economic "vote" or boycott.
Am I wrong about any of this? I probably am; this is just a random thought. Maybe the transaction fees are the crux of it (even if the block rewards are much more lucrative), so eliminating them from the equation for the sake of argument makes the whole point moot?
But still at one point it confirmed more transactions than BTC + ETH + LTC combined without tx fees and sub-second confirmation time:
https://www.reddit.com/r/nanocurrency/comments/lxbhh5/nano_c...
The spam is becoming a too big problem, but they're trying to mitigate it in the new versions:
https://www.reddit.com/r/nanocurrency/comments/namwzf/v22_hi...
We don't need all those miners like you and mining and consuming terrawats of energy?
And at the end of the day, when i own bitcoins or take part in bitcoins in any form i have a green thumb and our planet is not additonally getting destroyed through the massive amount of energy consumed into finding the right hash?
Did you finnaly convince yourself that just because you consume water energy what you are doing is okay?
"We believe that Bitcoin and other CryptoCurrencies will play an important role in the future of finance, technology and governance. We conduct our business in a way that protects the blockchain against plurality attacks, and our planet's climate against warming."
Let me ask you a few questions to your statement:
Why do you support Bitcoin in particular and name bitcoin and don't use something like etherium which is potentially switching to PoS?
The energy you consume (apparently already 2 mega watts) how do you know that this energy couldn't have been used for something which creates direct and longlasting value?
Do you make any investments into renewable energy?
How do you feel about bitcoin using as a whole system (where you part of) a lot of energy?
How do you feel about bitcoin using a lot of dirty energy?
What is your take on how bitcoin can help global warming (and i actually mean cooling down the planet not activly heating it)?
Do you use your waste heat in any form or do you heat the environment with it?
Have you / your company invested in any form of research or change to bitcoin itself to reduce its 'energy consumption for preventing double-spend'?
Do you believe in the future of PoW or PoS? If you believe in PoS why do you support currently bitcoin?
Biden (after other countries have done this much earlier) is now back on climate change support and targets 0 emissions. How do you think the future with bitcoin and 0 emission will look like?
And at the end of the day: Based on your FAQ and the increase of power prices, will you able to consume that much energy for bitcoin in the long run?
I imagine Bitcoin would fair terribly and Monero would be the best.
Blockchains all have a bottleneck. All transactions in the world have to go through the miner. And the situation is actually worse than that because we don't know who will solve the useless Proof of Work hashcash function ahead of time, so EVERY potential transaction is gossipped to EVERY potential miner, and then the miners ALL go to town wasting electricity. How great!
Anyway, because of this architecture (preventing double-spending by literally aggregating all ambiguities into N potential histories of EVERYTHING, and then having them duke it out with PoW or PoS or any other way), we literally have a cap on how many "TPS" (Transactions Per Second) can go through.
Before Bitcoin, no one ever asked how many transactions per second an Internet protocol could support. It would be ridiculous to ask that of HTTP, or FTP or SMTP because there is no central bottleneck: the number of websites, files and emails that can be sent increases with the number of computers on the network.
With Bitcoin, Ethereum and other blockchain-based networks, this is not the case. The max number of transactions that fit inside a block is the most throughput you're going to get. The best thing to come out of these blockchains is Microsoft's Sidetree protocol championed by @csuwildcat but that's for identities, not currencies. So basically, you have a payment system which is super-secure and also super-wasteful.
It's as if BitTorrent required every computer to seed every movie, and BitTorrent maximalists called everything else that used a Kademlia DHT a ShitTorrent.
Except here, it's actually worse because you're not doing Proof of SpaceTime (like FileCoin) but you're requiring a growing number of computers to participate in a lottery proving they burn electricity and get rewarded sometimes. And this amount of computers is growing, just so we can do one operation (transfer money) 10 times a second. At least Ethereum made it into virtual machine capable of executingmore than one operation, thus enabling Turing-complete programming languages like Solidity, and smart contracts. Still, the way it's designed as a "world computer" it's basically a glorified mainframe, and gas is basically paying for time on the mainframe. It is the reason "flash loans" are even possible, they are artifacts of the idea that literally ONE transaction in the entire world can happen at any given time. Nice for atomicity guarantees, I guess, but overall not so great for almost every real world application.
Blockchains with global consensus about every transaction in the world are NOT what I would think of when I think "decentralized" in the sense of having no central bottlenecks. Actually @vbuterin wrote a great article years ago about the different senses of the word "decentralized".
Unless you buy straight from a miner, the Bitcoin you buy changed hands many times before reaching you and those transfers didn't all occur on the blockchain (could have happened on an exchange, could have happened on lightning network, could happen on another blockchain like eth).
If you look at actual transactions on the blockchain, you'll see that they have an average value of ~300-400K [1] per transaction which means it's acting as final settlement.
1: https://bitinfocharts.com/comparison/bitcoin-transactionvalu...
The amount of energy a PoW coin uses entirely depends on the cost of electricity, hardware, and profitability. When a coin spikes in value, the profitability goes up so more miners join in. A single PC would have enough processing power to run the bitcoin network. All of this power usage goes towards solving useless tasks which get more difficult the more people there are trying to solve them.
> When a coin spikes in value, the profitability goes up so more miners join in. A single PC would have enough processing power to run the bitcoin network.
well, yes, but then a single miner could and would control the entire network since 'why would any give up their compute power for free to ensure the network is not being hit by double-spend attacks, when someone else is already doing it'. The whole point of a PoW coin having huge fees and thus returns for the miners is to incentivize a decentralized ledger. I don't think Satoshi intended for it to eventually consolidate into just a few huge mining companies which theoretically could perform a double-spend attack, but it's not something that could have been protected against with a few more if statements (although, if this happened, the coin would tank in value, which is probably the inherit safeguard).
There are new PoW cryptocurrencies such as Grin (https://grin.mw)
- #2 ethereum is moving to PoS
- #3 binance is PoS (tendermint)
- #4 cardano is PoS (ouroboros)
- #6 tether is a token
- #7 XRP is BFT-based (I think PoA?)
- etc.
Basically there's only Bitcoin, Dogecoin (lol), and Bitcoin Cash in the top 10 that are still proof of work. If you look at the top 50 it's even more biased towards non-proof of work.
"Any day now" for the last several years.
Interesting to see how much of an outlier Bitcoin is.
The middle tier currencies in this list (USDC, USDT, etc) are built on Ethereum, so once Ethereum finishes its switch over to proof-of-stake, both they and Ethereum will drop down to almost nothing in terms of power used per transaction.
Isn't there a lot of uncertainty as to how well proof-of-stake will work?
It seems like Python 2 is still pretty prevalent, with over 40% of new downloads taking place as of last year. And people forget Python 3 was originally introduced in 2008. So the transition is taking decades, not years.
The last place I worked was still using Python 2 as of last year, and they were a startup without all the bureaucracy of a big company. They also had plenty of money and engineers. Python 2 is still the default for everybody I know.
But there's no political reason to believe that they won't just push it out again. It's just a ceremony at this point.
I mean if you don't touch your code it will continue to work but if you have to maintain it, you quickly realize that a lot of your dependencies will refuse to work.
It might be easy to fix them to work again, but with time it will be more and more work to do.
Proof-of-stake is vulnerable to various miner collusion attacks that Bitcoin is not vulnerable to. The gist of it is that casting multiple conflicting votes (sometimes way after you cast your original vote) doesn't require any additional resources in a proof-of-stake system, whereas casting additional votes in a proof-of-work system is very expensive.
It's a hard thing to get right.
Each node picks a random value, and publishes the hash of it to the blockchain, then, when the network has reached finality on what all the hashes are, the nodes publish the random values themselves, and the network takes the XOR of all of them.
I think Ethereum's approach is interesting, because after 6 years of Proof-of-Work and several up and down markets, the distribution is widespread at this point. For example, even the co-founder Vitalik, only has about 300K of 115M circulating supply. So now I feel like they can migrate to proof-of-stake and it will not lead to excessive centralization.
Anything resembling an ICO is a non-starter if it were to survive, especially with a shifting regulatory landscape. I was among the opponents to Ethereum's initial distribution (premine) but to wit, ETH has no supply cap so Vitalik's slice has shrunk over the years.
You essentially airdrop a proof of stake coin to every existing BTC, BCH, bsv, etc address, in a ratio of the current market prices.
Call it Bitcoin one, or BONE. Different from onecoin.
Censorship resistance, plausible neutrality, decentralization, antifragility, uptime, and security are features of layer 1 blockchain systems like Bitcoin and Ethereum.
If a dev team starts off with 80% of supply they aren't going to ever achieve any of the above.
I'm not sure how you got from A to B. What stops an ICO from auctioning off almost all of the supply?
I completely agree, all the the above must come before throughput in an L1 blockchain. So many of the so called ETH killers sacrifice on some or all of the items you listed. Do you think anything else ticks all the boxes and can stand alongside BTC and ETH as a legitimate L1?
So PoW doesn't have this problem? It costs money to run mining hardware and supply electricity. The more valuable a PoW coin is, the greater incentive there is to run more hardware. With Bitcoin specifically the block rate is limited via the difficult adjustment. With this in mind it sounds like whoever is mining will get richer faster and centralize the competition.
PoS just abstracts all of this into the code itself. I don't buy the quoted argument.
It's only innovation into how to extract more profit from that specific pow function. Why would we care about it? (Or why call that innovation?)
> In POW you always have to invest to be competitive and have the most competing hardware.
I struggle up find a positive impact of this. There's been a number of negative side effects though.
What useful innovation has come out of mining? Mostly I see very innovative ways to cheat energy markets and create ewaste.
You don’t have to be rich to mine physical bitcoins, you just won’t mine very many of them. Same as it works in PoS — join a mining pool.
Or buy mining equities, e.g. Blockstream’s BMN token (not an investor).
It’s funny how much flak PoW networks take from PoS investors, and it’s pretty blatantly due to investors investing in things which aren’t PoW. None of the PoW criticisms in play today save for the environmental ones — and even those are subject to considerable astroturfing [1] — are supported by fact. In spite of what PoS investors commonly tout, PoS as a technology is neither theoretically sound, nor practically proven in any sense [2].
With PoW, miners can't really hold on to the coins for very long, so they have to dump it to cover electricity and hardware costs which always creates supply whereas with PoS, a staker can just hold on to the coins they get forever at no cost and their share of the pie keeps getting larger and larger forever.
To be clear, I'm not complaining, if eth decides to pay me 5-10% per year based on my holdings for a simple cryptographic signature, I'm not gonna say no, but it definitely creates a weird dynamic where new entrants will have to buy at the price the stakers decide to sell, which could be sky high since we have no pressure to sell.
Unless you're entering a pool, you need 32 ETH to stake.
I remember when that wasn't a lot.
I have some bad news for you about the dominant economic system.
In PoW, energy is used to mine more coins. Thus, total value of the currency grows.
There's a difference between inflation from thin air, and inflation from added energy / work.
To me, it looks like it is saying that Bitcoin uses 830kWh and Ethereum uses almost 38 times that.
Considering >1% of the world's energy is used by Bitcoin - it seems virtually impossible for Ethereum to use 38x more energy...
So Bitcoin SV is a fork of BTC (or BCH, can't remember), and what that means is a large part of the supply is untapped, because most BTCers (or BCHers) haven't even interacted with the chain. Their BTC (or BCH) balance is still there in the fork, based on whatever they held in their wallets prior to the fork. But maybe they don't even know the esoteric fork exists. So a large part of the supply is locked up due to ignorance alone, or due to relative lack of liquidity on exchanges.
At any rate, if you really want to know what people are using, when it comes to crypto, look at how much they're spending to use the chain or application: http://cryptofees.info/
USDC is likewise a multichain stablecoin (Ethereum, Stellar, Algorand, and Solana) but I couldn't find information on how much is on each chain.
A big chunk of USDC and USDT floating around on smaller PoS networks have been bridged from ERC20, so would appear to be idling on ERC20 but could actually be exchanging hands on a completely separate network.
Anyone serious about this topic needs to think beyond blockchain into fundamentally different technologies, like Nano, or things which forego decentralization entirely.
Most importantly, A “transaction” on a blockchain is not a “transaction” in the colloquial sense.
The real issue is the interest Musk created when Tesla bought bitcoin a few months ago and how he grew a conscious suspiciously fast.
Also, BSV and BCH are totally insecure so it's not really fair to compare them to secure cryptocurrencies.
Furthermore it's not obvious that increased transaction rates are necessary yet in most cryptocurrencies and so it might not make sense to optimize for that yet. There is no point encouraging frivolous data to be added to the blockchain permanently if the demand to make useful transactions isn't there yet.
Also, BCH and BSV aren't "totally insecure" as that's far too black and white. If they were, then they would've been attacked and destroyed long ago and no exchanges would touch them.
On top of that, larger blocks also means that home users, or small businesses can no longer run their own fully verifying nodes, meaning that we have to move to relying on larger businesses to take care of attacks on the network, and not to collude to change the ruleset.
In reality, Bitcoin Cash and Bitcoin SV have not taken off in popularity, due to these issues as well as serious character flaws in their most vocal proponents, meaning that for now their blocks remain small, and the possibility of these attacks isn't actually realized. But if they were to become more popular it would not last long.
I truly do not see Bitcoin sustaining much longer as the top coin.
"Florida perjury Craig Wright"
Like the number of GPUS hoarded up by a non-ASIC PoW coin, or even the manufacturing of specialized miners.
This is false. See Algorand, Cardano, Mina, etc.
Proof-of-work is very much a technology of the past. It's the fossil fuel of cryptocurrencies.
[1]: https://www.algorand.com/resources/news/carbon_negative_anno...
Who manages the list of relay nodes? What about decentralization?
> Currently, the Algorand Foundation manages the official list of relay nodes...
> We are working on a model where the decisions on relay nodes will be done in a more decentralized way.
As for the centralized domain, you can look it up in the source code but essentially it gets the list of relays from a SRV record on the algorand.network domain:
_algobootstrap._tcp.mainnet.algorand.network
- everyone downloads the client/code of a cryptocurrency from the same place
- that client also hardcodes a list of peers that you first connect to in order to discover more peers
The first issue is more problematic, and the second issue usually matters less.
My guess is that algorand rely on relay nodes because they are targeting a high throughput, and thus need quick communication between nodes.
Could that information be somehow used to cracking encryption that relies on cryptographic hashes?
https://www.reddit.com/r/Stellar/comments/nbqfey/since_co2_e...
Visa/MC has a cost of like $.25+some percent so I suppose represents the cost of having a trusted oracle with fraud, review, etc.
This seems like it should be the standard to beat for whether a currency can actually be used for anything normal and necessary to get wide uptake.
In fact it's being used in several projects where people send each other micropayments of just a couple cents, like twetch.app
If one had Bitcoin in an exchange instead of an offline wallet, does that mean that when forks occur, the exchange does not give you coins in the fork?
Also, what about PoS coins? Aren't those vastly more efficient than any of these?
In most cases you do get new coins post-fork. Exchange will announce whether they support the fork or not before it happens, so you can react.
It's not really clear who is behind this site and if there's some hidden agenda. Let's assume not (but with crypto you can never be sure) and that they will properly consider PoS blockchains if they are as decentralized (or more) as the listed PoW chains.
The notion of centralization has its roots in a different concept: permissioned vs. permissionless blockchains. Ethereum (1 and 2) and Bitcoin are both permissionless in the sense that anyone can become a node in the network and start earning gas. Ethereum 2.0 does not change that. You can still join and earn gas on it.
Permissioned blockchains such as Stellar, Ripple and a few other networks are more closed. You can join the network but you don't have the same status as the core nodes in the network that are explicitly configured to trust each other. This makes e.g. 50% attacks from the outside impossible. E.g. Stellar works this way. You can become a stellar validator but nodes have to specify which other nodes they trust and that gives the first nodes a lot of power.
In the case of Stellar there are only a few dozen validators run by organizations working with the Stellar foundation. Stellar has indicated that they want to gradually open up and eventually become permissionless. But as of yet they are too small to make that work and are relying a lot on a small set of validators run by just a handful of companies. There's a list of active nodes here: https://stellarbeat.io/nodes
Such permissioned networks are great for e.g. banks that need to make sure they aren't doing transactions via some dodgy nodes in North Korea, Iran, etc. Technically, blockchains like this are not that different from public blockchains. There's nothing stopping these from opening up except that they choose not to. For a lot of businesses, that's a feature not a bug.
This is really shakey ground to prop up an argument in favor of cryptocurrency: AFAICT no cryptocurrency ever dies until people stop trading it, which virtually never happens.
I’m reminded of the saga of “stable coins” — stable coins of the non-IOU sort. Every major example of one has imploded at least once during times of high market volatility, no exceptions. Including as recently as 2020. You’d think after enough of these implosions the concept would be disproven on a fundamental level, but no.
(Many have considered these unstable stablecoins theoretically unsound ever since the concept’s inception — bitUSD IIRC — with clear parallels to PoS.)
Developers and VCs have been deeply invested in PoS consensus for many years now, mostly because they were attractive financial bets to make. There’s no use in my even opining on the theoretical flaws of PoS, because implosions of cryptocurrencies seem to not even matter to investors.
Anyway, at some point, the people funding and developing these PoS systems evidently shifted into abject promotion mode for obvious financially motivated reasons based on really nothing aside from investor expectations. Nothing has ever been proven about PoS aside from the fact traders are willing to hold speculative positions in these coins — no different from the reasons they’ve held any other cryptocurrency. And even if PoS were a fundamentally discredited concept disproven as many times over as “unstable stablecoins” have been, it would change absolutely nothing about investor behaviour.
In think your point of view is a bit comparable to late stage skeptics arguing against dot com companies 20 years ago. They were mostly right and yet the FANG companies booted (or rebooted) straight out of that. So clearly they were also wrong. Very wrong. Because those companies are now worth trillions. Looking at what came out of that bubble, it is hard to argue that there was nothing there. Of course there was. But of course there were many failures as well and lots of investors backing the wrong companies for all the wrong reasons. But the technology from that era bootstrapped a multi trillion dollar industry.
The blockchain space is very similar. Lots of obvious scams, naive companies, poorly thought through business ideas, half-assed technology, etc. And lots of investors getting rich on being there early and losing other people's money (which, lets face it, is how that greed fueled behavior works). It's a symbiotic relation ship between mediocre investors and mediocre entrepreneurs. That hasn't changed in the last 20 years. That bubble is going to pop at some point. But that does not mean it will drag all blockchains with it.
The thing with Ethereum is that is mostly not directly dependent on VC cash. And that's one of it's strong points. The wider ecosystem is of course. But people like Vitalik Butarik and his friends are not reporting to anyone financed by a VC because they are already financially independent. That's also the reason they have been moving slowly and carefully with Ethereum 2 for years rather than rushing it to market in a few months. They've been talking about proof of stake and sharding for years already. Before the first bitcoin bubble even (four years ago or so).
Blockchains are as strong as those running them. Ethereum 2 right now looks like it is happening and has staying power and will have quite a bit staked among quite a few users. I'd argue most of the Ethereum 1 value is actually based on that future potential.
Even in cases like stablecoins where investors are provably losing millions of dollars on repeat oweing to fundamental design faults of the underlying protocol, the coins continue being traded nonetheless. The coins are still worth money despite the many instances of clear technical failures — “being worth money” appears to be the sole arbiter of “validity”.
How can the underlying tech really be disproven? Cryptocurrency is an effectively unfalsifiable technology. You could be selling a one-wheeled tricycle, and investors would still trade it based on one narrative or another. That is more or less the case with PoS.
That influences the global market a tiny amount. Your power bill likewise is affected, presuming your provider has any petro in its supply mix, which it likely does (even if only as a backup).
The impact is tiny to nonexistent at a scale of 1, but for numbers greater than 1 the impact likewise increases.
Petro energy- natural gas, diesel plus coal- don't really concern themselves with CO2 and can use existing transportation to get to remote areas, so the energy produced is very much more fungible on a global scale.
https://www.hydroquebec.com/data/documents-donnees/pdf/compa...
Not sure about economic effect though, I'm not a electrical economic engineer haha
Also, this doesn't take off-chain transactions into account. There's way more actual financial transactions on Bitcoin when every L2 transaction is counted. Lightning network scales to billions of transactions per second, without adding PoW energy consumption.
>What about Ripple/IOTA/...?
>As with Proof of Stake we are aware of no existing, alternative protocol that has solved the problem of distributed consensus. Usually these approaches have resulted in some form of centralized authority becoming an important factor in the security model.
>Of course a centralized systems can achieve a far greater energy efficiency. Here we want to compare only distributed systems and their properties.
----------
Everyone should know by now that Ripple is a company not a blockchain. And the XRPL is fully decentral with no authority at all.
See XRPL.org
The XRPL is the "blockchain" and its NOT controlled by Ripple. They maintain the open source code that does not give any control over the running network at all.
>Ripple-sanctioned set of transactions
Thats a made up thing. There is not a single Tx that has ever been "sanctioned" on the XRPL Its also simply not possible. You are completely misinformed or intentionally spreading FUD. The time when Ripple ran the whole network is long gone.
https://cryptobriefing.com/is-xrp-decentralized-ripples-invo...
Could the system still be decentralized in practice? Sure. But the fact that the Ripple CTO claimed XRP might be more decentralized than BTC or ETH makes me take the rest of their claims with huge buckets of salt.
https://xrpl.org/technical-faq.html#what-are-unique-node-lis...
>Ripple CTO claimed XRP might be more decentralized than BTC
Hows that relevant he can assume whatever he wants ryt? We can not measure decentralization in a meaningful way. His guess is as good as yours. BTW hes a Bitcoin developer.
Also I assume what he meant to say with that is that China could gain control over 50+% of the mining power. On the XRPL no country could seize control or more accurately they could but it would not have any effect. Double spends are not possible by gaining control over 50+%. You could only trick the nodes you control which is literally as useless as it sounds.
And ofc all other nodes would simply ignore any node that is assumed to be compromised or malfunctioning. The BTC network cant "ignore miners". If it would be know that someone has 50+% hash power there would be no solution.
doesn't using your own UNL basically equate to a hard fork in the event that the nodes don't agree?
Short answer: No, if one or a few dont agree they are just ignored. If the majority (>50%) does then it halts and if a quorum is reached (>80%) it could fork.
long answer: Its complicated. Under normal conditions nothing happens but in edge cases (large node outages/physical disconnection/like if and undersea cable is cut) it could fragment.
This can be avoided if the core of the nodes mostly has each other on the UNL. But since we cant and most importantly should not enforce that its encourages to create and publish an UNL if you think the existing UNLs are not good. Its also encourages to use an UNL with large overlap to other UNLs This leads to the assumption that almost everyone uses one of the published UNLs with minor changes (mostly additions) else if you had mayor changes you would publish an UNL to convince other to also drop/add specific nodes (after all if you have a reason you probably want to tell everyone)
Since the UNLs overlap the real nodes UNLs should too and forking is not possible with large overlap. On a high overlap it could only halt if too many nodes are separated/offline which is the wanted behavior rather than making uncertain progress.
There is a amendment coming (most likely) for negative UNL where nodes can signal that they lost contact to a node and temporary remove it form the UNL. This would reduce the risk of halting if large percentage of nodes are temporary lost. Instead of 20% it would tolerate more nodes to go offline before the network would halt. It basically adjust the 80% quorum requirement down with every node that goes offline but has a minimum of 60% of the original 100%. 60% is the minimum to prevent forking/fragmenting again. only 51% would be needed if the UNLs would had perfect 100% overlap, so its a bit higher to compensate for the fact that UNLs dont have 100% overlap.
Average Joe has a manual labor, his physical energy is converted into labor, which converts to fiat currency. The food that Joe ate also require some amount of energy to grow and become Joe's food.
PoW mining converts raw electric energy into a digitally transmissible currency
Producing fiat currency through manual labor uses a mix of renewable resources, and value is provided. You can't just dig in the ground and get paid for it. You have to do something that improves someone's business or life.
Producing crypto is just turning coal (or whatever) into numbers. There is no intrinsic value created in that chain.
If the crypto loses value, you may have even destroyed resources in the world for no reason. It's a net-negative.
Producing crypto keeps a secure ledger, claiming it's just producing useless numbers is the same as claiming that a TLS session is just playing around with numbers.
The value of fiat always goes to 0, resources have been destroyed in the world for no reason
If I convert the same amount of energy into crypto, I have nothing with intrinsic value.
And before you say that fiat has no intrinsic value, consider that most people have fiat debt (loans, taxes, wages, etc.) that they can pay off with it. Currently very few people have any crypto debt.
If you convert energy into crypto, you have crypto, may not have intrinsic value for you. right now it's worth 42k usd for somebody
which of those have/don't have intrinsic value: - gold, silver and other precious metals - stocks - options - house - car - fiat - cryptos
>re-used bitcoins early work
All forks share the same blockchain up until certain block.
BSV has essentially free transactions and not a high market cap, and so has a (suspiciously?) high txn count to price ratio.
(But BSV scales in an unhealthy manner.)