This seems to be a cornerstone of what makes any crypto valuable in the first place (scarcity), and as long as that scarcity has real-world consequences, it seems like it would have the same result.
Chia claimed to "Save the world from proof-of-work wastage", but it would just turn a GPU crunch into a HDD crunch.
It's possible to imagine forms of economic waste that have different externalities, e.g. different environmental impacts.
But we don't have evidence yet (that I know of?) that introducing one decentralized currency reduces waste in another one -- if you did introduce a new currency that wasted economic value in a new way, there's no evidence that crypto as a whole would waste less of the existing things, it would just start wasting that thing too.
In this model crypto is like ... an emergent antipattern of networked civilization, where the network starts to waste every economic resource that it can "see" and provably waste.
Exactly. As I've said to a number of people I've discussed crypto with, I'm happy to advocate for making PoW systems illegal. They'll happily gobble up a Dyson sphere of energy and a solar system of hardware in service of running a payment system with a tiny fraction of the throughput of any credit card company or bank.
They are a complete waste of resources, energy, and human endeavor and society would be better off without them. I'll reserve judgement on PoS and other non-PoW systems until they're more widespread and I actually understand them better.
See also: the gold standard.
The pros and cons are debatable but the technology is interesting. If you want to know more I recommend the Ouroboros whitepapers by IOHK.
Chia actually hasn't resulted in an HDD crunch. The economics of it are such that further investing in HDD storage isn't profitable, yet already Chia is the most decentralized and resilient crypto. I say resilient because price collapsed but allocated storage hasn't.
The only known way to do so is through attaching a real-world cost to ~votes. The way PoW does so is through equating votes and hashrate, so votes cost real money because hashrate requires real hardware. PoS works in mysterious ways, but the basic idea is that votes are equal to prior balance by essentially putting some of that balance "into escrow" in order to vote.
So it doesn't actually fix the problem, it just means only the richest have any real power, just like the financial industries outside of crypto.
The worst you can do is monitor traffic and try to correlate wallets and transactions to known identities and products similar to attacks on Tor, then use good old regular meat space violence. Privacy oriented coins like Monitor make this even harder, to literally impossible, too.
I suppose you could start mandating some central registry for wallets or some such and refuse to process any transactions not originating or destined to a registered wallet, but that would require a hard fork and people to willingly go with it.
Technically you don't even need miners, computers, or electricity to exchange cryptocurrency. You can just exchange scraps of paper with a key phrase printed on it that says "wallet contains X btc". The walled could have been emptied before the exchange and that would still require verification by looking at the chain, but otherwise it's perfectly doable, and literal bitcoins do exist.
Sounds familiar?
Well, yes, of course you're right, but there's a world of difference between "technically" and what the reality is for most people.
Between what the EU seem to be doing and the prevalence of centralized exchanges, it seems like what you're describing is happening. But my point was really just that you could still buy yourself into a position of control, either by controlling the hashing power or otherwise. Nothing changes that.
Note I'm not anti-cryptocurrency, I'm just wary that much of the hype is unfounded. Maybe in theory based on correct things, but the reality isn't so clean. Personally, I'm hoping a privacy-oriented DeFi coin will take off. There are a few contenders in this space to watch.
One way is you could look to some historic list of people (like for example, everyone who had a US passport issued in 1992), and say they are the voters.
An evil actor subverting more than half of those people would be very hard.
If BTC mining relied on pieces of litter being collected you'd get people spending $millions on factories to produce litter and vehicles to distribute it just so more could be collected. That sounds crazy to type out, but it's no stranger than the situation we currently find ourselves in. The most advanced tools man has ever created are being used to create chips with no practical value, but that are good for converting energy into tokens through pointless calculations.
I don't believe it is possible to create a proof of work system that is not a "proof of waste" once the reward is high.
Spare CPU cycles felt like a waste, that becomes dedicated processing, that becomes dedicated hardware, that eventually became designing custom hardware.