How badly is cryptocurrency worsening the chip shortage?
singlelunch.com
singlelunch.com
https://ethereum.org/en/eth2/merge/
The price of (demand for) GPUs is strongly correlated with the market price of Ethereum. The Economist, June 2021:
https://www.economist.com/graphic-detail/2021/06/19/crypto-m...
Today, just like in 2018, we can see the price of Ethereum reflected in Nvidia's stock price. When Ethereum moves to proof-of-stake, mining GPUs will flood the market and demand for new GPUs will no longer be tied to the cryptocurrency bubble.
The added benefit is that my laptops get cheaper.
Don't kid yourself, it won't slip forever.
This is going to happen, soon.
Plus, I'm not convinced that the transition will go entirely smoothly. Obviously it would be in miners interest to prevent the POS transition, and if there's a bug or problems with the new chain I could totally see a fork or political pressure to delay things further (I don't think either is likely, simply possible).
I wonder how many Ethereum developers it takes to change a lightbulb...
Or maybe it's monopoly money, but critics always like to have it both ways, don't they. It's real when poor victims are losing it, but fake otherwise. It's all pretend, except when something goes wrong, then the teams running it are suddenly irresponsible.
I thought HN was supposed to be better than that. Changing the tweet length on Twitter is hardly just changing the column limit, there is so much more work behind the scenes. At least with Ethereum you could (if you're interested, doesn't seem like you are) see all the changes they had to go through in order to get that change on the network.
Either Ethereum devs are the dimmest minds in the industry or there is something seriously wrong at the foundational level of the Ethereum code itself.
Welcome to the club :)
> I worked on a project worth half a billion $
Wow!
> With a far smaller team...
There you go! Of course it's easier to change stuff when the scale is smaller. The difficulty of implementing something scales with the number of people working on it. If you're just one person (or a small team), changes are easy to work through. But if you're 100+ developers, multiple foundations and also private companies, even changes that are small will take a long time to go through the process.
> Either Ethereum devs are the dimmest minds in the industry or there is something seriously wrong at the foundational level of the Ethereum code itself.
Taking long time to change the core protocol is by design (it's a feature, not a bug), so everything is working correctly.
In that case, I hope it takes over 100 years to implement sharding, then at least the suckers who invested in Ethereum will rest in peace knowing that at least it met their decentralization needs after some other project has taken over the world.
But hey, you've already made up your mind so there seems to be little to no value of us even talking with each other.
It's pretty clear that Ethereum's team has a chronic problem with overly optimistic forecasting.
Well, from the perspective of Ethereum, they will, since Ethereum will no longer be PoW...
> Because there won't be a hard fork from miners who would rather have PoW.
There might be, or they might use Ethereum Classic. That's all fine, the second biggest network (Ethereum) will still be PoS so they can do whatever they want.
Children develop object permanence by the age of two. How long does it take for cryptobros to develop GPU permanence ? You closing your eyes doesn't make the problem go away.
Are you suggesting we should destroy the GPUs that were previously used for Eth mining?
It is safe to say that it won't come anywhere near close to where normal Ethereum is in terms of mainstream adoption.
[1] https://www.coindesk.com/markets/2020/08/29/ethereum-classic...
[2] https://coingeek.com/over-1m-double-spent-in-latest-ethereum...
Ethereum is not really a shitcoin though, unless you consider all cryptocurrencies shitcoins. Many tokens are implemented as ERC-20s (including most relevant stablecoins), other chains target EVM compatibility to drive developer adoption, majority of the NFT boom has been in ERC-721 NFTs on Ethereum, and traditional companies are now building L2s on top of Ethereum tech (PwC, Reddit).
Ethereum blockchain is pretty fundamental to much of what is happening in crypto aside from pure NumberGoUpism. Miners can hard fork ETH if they want to, but I doubt they will. All those dollars held in stablecoins will determine which chain has validity, and I doubt USDC/DAI/RAI/GUSD would go along with a miner cashgrab fork again Vitalik...
dingdingdingding! There is nothing useful done with Eth today, aside from quick money grabs.
Also when they switch to pos how do they transfer your coins over?
Compare that 50 GB/s of the M1 Max to 760 GB/s of an RTX 3080. Then check prices. Even after ridiculous scalping markups, the RTX 3080 will still be cheaper.
Ethereum was conceived to be ASIC-resistant from day one. They even considered making the coin resistant to GPU-mining but then changed their mind.
It's not that hard to be ASIC-resistant and seen that ETH GPU miners are still profitable to this date, they obviously succeeded in preventing ASICs from being economically doable to mine ETH.
> Also when they switch to pos how do they transfer your coins over?
Ethereum is already on PoS, but partially. At the moment mining is going on both chains: PoW and PoS. In a few months it's going to be PoS only. All the coins from the "old" PoW-only chain will still exist and be usable on the PoS-only chain.
This could have driven some very interesting developments in the CPU space, mostly in the memory interfaces.
It's intentionally designed to be memory-hard so that ASIC implementation is more difficult. Lots of people in the cryptocurrency world consider ASIC mining to be a misfeature, because it centralizes mining among firms that have the capital to do chip development. Litecoin's entire reason for existence is "Bitcoin, but can't be mined by ASICs".
"Also when they switch to pos how do they transfer your coins over?"
There's already a beacon chain running Ethereum proof-of-stake. Think of this like a dark launch for web tech - basically you run the new infrastructure in parallel with the old infrastructure, make sure it's stable, get everybody adopting it, and then cut over the UI to use the new infrastructure.
There's a one-way bridge that ports state over from the PoW chain to the beacon chain. Think of this as a double-write layer; all new transactions get written both to the PoW and PoS chains.
In early 2022 "The Merge" happens. This takes the form of the "difficulty bomb" - basically, Ethereum mining will get exponentially harder and eventually unprofitable until all the existing miners turn off their machines and switch to PoS, at which point there will be no point to mining Ethereum and no point to writing transactions to the PoW chain.
Will PoS lead to a run on other resources like hard drives?
It could potentially lead to a run on Ethereum. The resource used in PoS is the cryptocurrency being secured itself. Basically, you agree to lock up a certain stake when you run a validator, and forfeit it if it's found that your validator "cheats". By doing this, you make cheating unprofitable - there's a financial incentive to catch cheats, and a financial disincentive to cheat, and the cheaters eventually go bankrupt (or end up on their own isolated chain where nobody transacts with them).
The financial effect of this is that a bunch of Ethereum gets locked up and illiquid. Instead of miners receiving Ethereum which they want to sell for dollars to run their hardware, stakers lock up Ethereum and effectively receive interest. This reduces immediate supply within the market. I'm wondering if a lot of the recent price movement is in anticipation of this.
Also does eth supply increase forever or does it have a hard coin limit like btc?
Currently no hard cap on issuance, 2 ETH are minted every block, but ETH burn rate is expected to outpace issuance post-POS.
For most of its history Ethereum was inflationary. It flipped and became deflationary a couple months back, and not coincidentally the price started rising again. It's likely to be significantly deflationary under Eth 2.0 with expected transaction and staking volumes.
"with more than 99.6% probability, an adversary with 0.09% of total stake is in a position to execute a 1-reorg for any given day."
Another which could prevent the chain moving forwards indefinitely.
"an adversary controlling 15% of stake can stall PoS Ethereum"
The recently discovered attacks are pretty bad and the mitigations are band aids.
* miners don't believe the switch is happening that soon
* miners know they'll keep PoW with some other blockchain
* miners are gambling hoping that they'll still make profit
Maybe all 3?
Miners earn 2 ETH every 15 seconds.
It's pointless to discuss the value of decentralization here for the first group, so I have no argument here.
For the second group, the ones that believe that crypto is solving something, I will remark that the only reason we are using blockchain is for its decentralized nature. For several reasons, PoW nature is way more decentralized than PoS. A big argument for PoW is that literally anyone can join the network by transforming energy into cash. On the other side, with PoS, the only way you can join the network is by buying a PoS token. You can't mine it if you don't hold the token before. That can be a problem for people based in countries that restricts crypto. At the same time, the players who hold the majority of the tokens have most of the mining power in PoS.
If we are willing to sacrifice decentralization, then we shouldn't be using blockchain as a data structure.
The fact that the governments have printed more money than ever added to the current inflationary rates over the last years makes me believe that its worth spending 2-3% of the world energy on a deflationary asset that is not in control of any person or government. Having a trustable currency is one of the most important aspects of modern society.
It's POP. proof of paperclips.
Just invest in my paper clip maximizer.
It doesn’t say it directly, but it is interspersed throughout: Basically because the author is researching price manipulation in cryptocurrency, and proof of work demand is correlated to price, that chip production demand is artificially inflated.
The counterpoints are that
1) miners have a much lower cost of production than the cryptocurrency’s market price. Their selling and dilution is not enough to bring down the market price as new and recycled cryptocurrency supply becomes a lower and lower percentage of the existing supply. (Edit since rate limited: I didn't say or imply that was their selling had any point or purpose, only acknowledging it has little and decreasing effect on the market price)
2) Miners reinvest into newer hardware, and there is a predictable or computable time before they are able to. Euphoria in wanting to do this will be related to the market price but the market price isn't why they do it. It is only verrry recently that miners could attract outside capital as they became publicly traded and the crypto institutional investors got big enough to also offer lending. The crypto financing space is self grown over the last decade, with still very little buyin from outside institutions.
Only true in the short term. In the long term the arbitrage opportunity closes to zero. So while investment and production bottlenects create profitable mining opportunities, this profit leads to more mining.
Any arbitrage opportunity eventually closes over time.
> Their selling and dilution is not enough to bring down the market price
That's not the point? Miner selling is not to bring down price, it's to pay electricity and silicon costs.
That's highly surprising to me. Have they gone the Cerebras way?
The Cerebras way could be used for Ethereum PoW, at least for now - on-wafer interconnects can be insanely dense and fast.
Crypto Miners Driving High Demand for AMD CPUs with Big L3 Cache https://www.extremetech.com/computing/328908-crypto-miners-d...
:(
When humans trust each other again, Bitcoin and PoW will be obsolete.
* The website you're using (is it a fake clone of the site you thought you were visiting)
* The people that made your crypto wallet (app or hardware, or both?)
* Your computer (lots of crypto stealing malware out there)
* The person/company you are sending money to (are they who they say they are? are they going to just disappear with your coins, since the transaction can't be cancelled)
* The smart contract you might be using (how many bugs are in it, has it got a backdoor to rip users off)
* The miners building the blockchain (it's not just that they don't have to mine your payment - some miners will front-run transactions to do whatever you are trying to do first)
* [...]
What is trustless is the verification of transfers. Previously, entities had to come together in meatspace and agree how a transfer happen. Now, entities that have no idea about the other entities on the network, can send money between them without having to trust the network, as the network is incentivized to behave well.
Again, all the problems you listed have nothing to do with "trustless" cryptocurrencies, but everything to do with humans. Cryptocurrencies don't try to solve those problems, and wouldn't be able to either.
I transferred money to somebody else last night despite never having met them, virtually or in meatspace or whatnot--I used a credit card to buy something.
That's sort of the issue with the trustlessness of cryptocurrency: it "solves" issues in the financial that are already practically solved for billions of people.
Great! In the context of the discussion, that transfer wasn't "trustless", you have bunch of contracts setup and more to support and make sure the transfer is trusted and OKed.
> it "solves" issues in the financial that are already practically solved for billions of people.
Yes, bank transfers and credit cards works for a lot of people. But there are tons of people who cannot use those, what about those people?
Have you ever tried to send money from Nigeria to Ecuador? It's a hassle, especially when you deal with a larger amount. Your transfer is gonna get stuck in the fraud-department at some entity you never heard about, simply because the transfer is coming from Nigeria.
Instead, doing the same transfer with cryptocurrencies took about 1 minute to enter the details, and 5 seconds for finality of the transfer, and it's done.
when's the last time you or anyone you know handed off large chunks of cash to strangers for the purpose of delivering that money to someone else?
noteably without trust - that means no insurance and no legal contracts.
Every time you do a bank transfer that is exactly what happens
It is not a matter of trust but one of understanding. People need to react to their motivations and incentives, and one must take that into account when interacting with other people.
Breeding cows is almost 3x the % energy consumed quoted [0] (admittedly, in greenhouse gas emissions, but who's counting, no?)
GPU market increased 20%+ YoY [1] to what I estimate being a ±400MM unit year; that's 80M GPUs at the 1/5 share quoted; assume an average of 6 GPUs per (retail) miner, that's 13MM miners; there are 2675 Ethereum nodes as of right now [2]; I call bullshit, again.
So again, why do people post this clickbait crap here? And why does it make the front page of HN? Because crypto? There's tons of other reasons for "because crypto", and I'd love to believe we're less gullible than that over here.
(of course, please let the downvotes flow to your liking, "because crypro")
[0] https://www.fao.org/news/story/en/item/197623/icode/
[1] https://www.businesswire.com/news/home/20211110005748/en/202...
/s
The author's nowhere close to making a mindful argument between PoW and Pos, the whole article seems to be meant to drive people to Patreon based on some %s that should drive people mad. That's my point. It's a very polarised issue and I would expect more scrutiny and spider-sense here, precisely in your down-voting vein - at least you've put some thought, and steak(?) into it!
At least that's what I think the parent is getting at. I would agree it's a bit of an obtuse analogy and doesn't necessarily apply to all of crypto as a whole.
In practical terms, the machine I'm writing this on is closer to cloud computing than the EVM is.
Ok, yes, that's fair. That doesn't totally negate the analogy, though. It just shows that it's a potentially inferior solution.
> In practical terms, the machine I'm writing this on is closer to cloud computing than the EVM is.
I think what the parent was getting at is the whole "cloud == someone else's computer" trope. Without knowing more details about the computer you're using to post on HN it's impossible to know but I think it's pretty likely you own the computer you're currently using. You wouldn't be using your employer's computer for non-work purposes, right? ;)
"The son shall not suffer for the iniquity of the father, nor the father suffer for the iniquity of the son."
I mean seriously, is this a real argument. Bitcoin is good because one person who got rich from it happened to be philanthropic? Where do you think that money came from? The answer is other "investors" who were told Bitcoin would make them rich. If the best justification for Bitcoin's existence is the Pineapple fund, Bitcoin must be the stupidest charity fundraising effort of all time, which is saying something.
The intrinsic value which Bitcoin provides is that it is as a currency, i.e. a way to transfer and store value. But as the Bitcoin detractors in this thread point out, it's value in this role is far outweighed by its costs.
Yes, it's a real argument against "There isn't a single redeeming quality about Cryptocurrency". I agree that not everything with cryptocurrency is good. In fact, I'd argue most uses today are bad, and only a few are good.
But I haven't argued for that everything about cryptocurrencies are good.
Remember; "Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize. Assume good faith."
And securing the network costs money in a proportional amount to the market price of the coin.
The network is no more or less efficient burning through 20% of the human race's energy output as it is burning 0.2% or 0.000002%.
It produces no additional transactions, no more or fewer coins. Just more waste product.
The first one is people who don't see any value whatsoever in cryptocurrencies. They typically say PoW is "waste" because they don't see value in the output, so there is no argument against them, as everything related to cryptocurrency is waste. It's largely a waste of time talking to these people, as they have made up their mind.
The second group are people who see maybe a bit of value or more in PoW. Since there is a hypothetical value, there is no "waste" as much as "use" of doing this hashing. They see value in having a cryptocurrency network, so even if it's wasteful, the greater good is more important for them. It's largely a waste of time talking to these people, as they also have made up their mind.
Seriously, even if you find value in Bitcoin, proof-of-work is unsustainable.
At current rates it's burning 0.5% of world energy. If price went to $300k it would end up burning 3% of world energy.
As the article notes, this is regardless of L2 solutions - energy use is purely a matter of market price.
This is actually a second problem of Bitcoin though - If in say 20 years it ends up being worth a lot, and gives very little mining revenue causing few people mine it, it becomes vulnerable to attack from nation states. Because the cost of a 51% attack is only a fraction of the possible rewards for a successful attack.
Unfortunately, there are second order effects. The miner reward is a constant selling pressure on Bitcoin, as miners must sell some of the rewards to pay for electricity and hardware. As Bitcoin gives off less and less rewards, this selling pressure reduces, which tends to increase the Bitcoin price (less supply for the same demand).