Cryptocurrency is probably one of the worst inventions in recent memory.
Keep in mind that not all Cryptocurrency use mining. Nano, for example, is zero fee, environmentally friendly coin that is incredibly fast. Bitcoin gets all the talk but there are some great and interesting tech out there. Get yourself a wallet (https://natrium.io/) and I'll send you some so you can try it out.
> Every block must also contain a small, user-generated Proof-of-Work value which is a Quality-of-Service prioritization mechanism allowing occasional, average user transactions to process quickly and consistently. The PoW computation for a transaction typically takes a few seconds on a modern desktop CPU.
Seems to me like this hasn't changed anything.
How about we stop using cryptocurrency completely. Time for the UN to get together and get this banned.
The best you can do is decide you don't like it, tell people not to use it, choose not to accept it, not to buy it, and rally your friend not to. That's all cool with me. But you can't stop crypto. If it dies it will be because something that replaces the advantages it presents comes along and people can't help but switch over to that.
> How about we stop using cryptocurrency completely.
> Time for the UN to get together and get this banned.
How about we get the developed nations to stop trading with China instead? How about we get them to stop burning fossil fuels?
They're the ones ruining this world. Cryptocurrency is merely a little raindrop compared to that ocean.
1% is huge, especially considering the trend: Bitcoin alone tripled their energy consumption during last year. Source: https://digiconomist.net/bitcoin-energy-consumption/
Why shouldn't I think that 5 years from it could become 25% or more?
> The index is built on the premise that miner income and costs are related.
> Since electricity costs are a major component of the ongoing costs, it follows that the total electricity consumption of the Bitcoin network must be related to miner income as well.
> To put it simply, the higher mining revenues, the more energy-hungry machines can be supported.
So BTC price shoots up all the way up to nearly $70k. This means miner profits will also increase proportionally since they get paid in BTC.
The problem is they try to correlate energy consumption with miner income. Profits are up so energy consumption must have risen proportionally as well? I'm not sure I buy that. When BTC prices rise, profits must be higher and therefore the costs will represent a smaller percentage of miner income, not the constant 71.44% that's apparently assumed by this study.
The way they estimate the minimum energy consumption does make lot more sense.
How is it secure if it’s not doing any wasteful mining though?
Since this is HN, you might enjoy this paper: https://arxiv.org/abs/0805.2815 originating from a project called Cardano, which has published dozens of peer reviewed papers (not only on arxiv), presented continuously at EuroCRYPT and works with great academics from “boring” fields (at least to most CS students) such as formal verification.
The main gist in pos (to which Cardano showed the first viable solution that does not have extensive unbonding periods or requires centralized coordination) is that stake pool operators (similar but different to miners in Bitcoin) are chosen randomly to validate the next block based on how much tokens are staked with them. The incentive system to keep these SPOs truthful is outlined in detail in the above mentioned paper.
You basically do not let everyone hunt one complex problem (where all but one miner waste their energy to secure the network) but build a system to chose one to then perform a validation. This decreases energy consumption of the overall network substantially.
I sent you one Nano to play with. Let me know what you think! For me, I think Nano is a great replacement to cash. You can give and receive without fees. It makes a great way to donate or pay for things.
https://www.reddit.com/r/nanocurrency/comments/7z9pwk/what_m...
The real amount of work needed to process transactions is extremely minimal. Bitcoin and other proof-of-work coins adds unneeded work that is taxing to systems and therefore, the environment.
It is not done currently only because the energy use of bitcoin is so miniscule compared to other uses, that it's not even worthy to bother yet. Down the road, it'll likely change, but currently complaints about 'massive costs to the environment' are mostly virtue signalling.
Smart heating involves heat concentration, not heat production
"Smart heating" is just one more example of where Bitcoin in theory does not match Bitcoin in reality.
It is often considered more wasteful than those other things you listed because the mining algorithm is designed to be wasteful; i.e., if people design faster mining chips, it doesn't make anything more efficient or increase economic growth, it just causes the hashing difficulty to increase among all miners. That is sheer stupidity.
We probably disagree on what "tiny" means.
Now, Bitcoin is processing 4.6 transactions/second [1]. VISA alone is processing 1700 transactions/second on average, with peak transaction rates claimed in the 24000/second [2]. Mastercard is similar, as are other payment processors.
Even worse, the claimed energy usage is for the entire banking system. This easily amounts to billions of daily transactions, but also many other services that Bitcoin doesn't even come close to offering: insurance, mortgages, credits, risk evaluations, escrow and many others. All this for a mere 2x the total energy expenditure.
[0] https://cointelegraph.com/news/banking-system-consumes-two-t...
[1] https://towardsdatascience.com/the-blockchain-scalability-pr...
[2] https://news.bitcoin.com/no-visa-doesnt-handle-24000-tps-and...
Bitcoin costs $150-$300 per transaction. Unless I'm misunderstanding something?
Needless to say, nothing in the regular banking system comes anywhere near those kinds of costs.
Good one
Also, scams are only common in the smart contract networks. People create useless shitcoins and spam telegram groups in order to generate some quick hype and exit with as much money as possible. I'd certainly like to believe nobody would be dumb enough to actually invest massive amounts of capital into these scams but that's exactly what they do.
Now if the cost is worth it remains to be seen.
That's how it was supposed work. The current reality is small highly centralized group of miners maintain the blockchain.
The way to achieve true decentralization is ASIC resistant mining algorithms and some form of diminishing returns to force miners to operate at small to medium scales. We need lots and lots of small miners running on commodity hardware that people already own, not a few large scale operations running on expensive custom silicon.
Do you have a source for this fact? It might survive the 50 year old fiat dollar experiment. Until 50 years ago, there has not been a currency that wasn't backed up by something that was beyond the government
After all fractional reserve banking has existed since before currency did. And if you have fractional reserve banking you aren't "back up by something" unless you count the credit of the bank as something. Given that is the literal definition of fiat currency (backed by the full faith and credit of the United States) that means that it is way more complicated than the gold standard.
To give a modern example (the gold standard no longer exists anywhere) many countries have a fixed currency backed by the USD. Since fractional reserve banking is a thing there too it isn't like the country is holding onto $1 USD for every $1 USD equivalent of currency. However it isn't like there isn't a relationship so the source of that relationship is government exchange. You can exchange $1 USD equivalent of currency for $1 USD.
Now we get to the real wrinkle. How can countries have higher inflation than the USD if they are locked with USD? (Which they objectively have) By simply restricting the amount of currency that can be exchanged for USD. This can be hand waved around pretty easy "we have a shortage" or "it is difficult to obtain that much". Now you have a fiat currency in reality but technically it is a backed currency.
To be clear it isn't like ditching the gold standard was without downsides, this is just long enough to point out that broad statements like "backed by anything" fail to account for the reality of backed currencies in a modern financial system.
We don't even have fractional reserve banking. There is no reserve ratio, it's 0. Bernanke's own published book states it is only fractional reserve banking when it is required to keep a fractional reserve.
The answer to both of those questions was no. The actual amount of currency in circulation (including balance sheets) was certainly well in excess of what the US was holding in reserve.
You could say that by offering gold at a rate you fix the value of the currency but I already covered how that is nuanced.
The reality of course is the reason we had trades for reserves and reserve requirements were to provide faith from consumers that the currency was worth something. I don't think anyone can claim that USD isn't worth anything today.
The limitation of liability granted to the shareholders of corporations is the granddaddy of all entitlements, because it enables relatively hands off investment. Without those things, a "big business" would be on the scale of a corner grocery store, or a family owned factory.
"Monopoly on violence" is something I've heard about before. Is this theory supported by evidence? Actually I think that a monopoly on violence might be a good thing. The number of bodies that can engage in violence is either 0 or 1, or many.
I read a translation of Njal's Saga which takes place in pre-literate Iceland. The erstwhile "government" had no monopoly on violence, except to assign cash damages in lawsuits. What the saga describes is basically a continuous blood feud.
>Without the rule of law and threat of prosecution, a massive surge in usage due to theft would overwhelm systems.
I used both internet and electricity in Northern Syria circa 2015, provided by private providers, and it seemed to work just fine then. Why you think rule of law is so important to internet existing? If the dude running the cell phone towers and cell phone stand points an AK out the window when they see a crook, most people decide not to theft that. You don't need central power grid to have enough electricity to run phones and cryptocurrencies.
>Without the nuclear status quo and the threat of retaliation, NA would either be glassed or invaded.
Or cooperative militias and private individuals ally with someone with nukes or seize the ones already in existence. Not to mention invading American part of NA is hilariously foolish as there would be a "rifle behind every blade of grass."
The present state of the art is that cryptocurrency is an arbitrage that converts subsidized electricity into value that can be transported out of the country.
>that can be transported out of the country.
There's a lot of value in this though, no? The 10k limit on undeclared financial instruments held in your personal custody through customs and KYC/AML laws in banking mean crypto fits a big void that was previously much harder to fill.
Indeed, as I've said in the past, money is a technology, and different technologies can be applied to different purposes. The "major" world currencies are designed to be used as a temporary store of value, medium of exchange, and instrument of economic policy. Bitcoin could be applied towards different purposes.
>>> There's a lot of value in this though, no?
Sure, a subsidy is by definition a source of value.
No, there will just be temporary outages and prices these things (electrical grids, internet) will rise to extortionist levels as local authorities / militias take over. Just like they do in any other conflict zone in the world.
I don't think you can say there's a general "rule" like this, throughout history. If anything the cases where these powers become straight-up subjugated from the outside (absent outright military invasion) are in the minority. Counter-examples abound, e.g. the Ottoman Empire and Austria-Hungary, or Spain after the disaster of 1898.
See Russia after the fall of the USSR, but before Putin.
Post-Soviet Russia was weak for sure, but not a vassal state by any interpretation.
If so it wouldn't stop being valuable for quite a while still, in this hypothetical you would still have years of contracts in terms of USD, not all of which would be renegotiated for tons of reasons. Additionally most foreign trade that historically ran of the USD would want to change to a new world currency but would need to figure out what currency to use.
So lets flip it on its head. What if the mining reward disappeared? Would Bitcoin survive?
Crytpo will march on with or without US government, I don't see them as existential concern for BTC or other crypto.
I'm not sure if BTC will survive once there is nothing to mine, but other crypto like XMR has infinite tail emission thus mining never dies. I apologize but here I often use BTC interchangeably to mean PoW cryptos in general. I shouldn't do that.
If anything, government is a stronger backing than before
This comment is unpopular, because it hits too close to the heart of home for many of you sitting in your comfortable home wasting energy on heat and A/C while complaining about environmental consumption of bitcoin.
This isn't a cogent argument. Yes, overheating or overcooling houses is also bad. If AI training used as much electricity as Ireland I'd be critical of that too.
>This isn't a cogent argument. Yes, overheating or overcooling houses is also bad. If AI training used as much electricity as Ireland I'd be critical of that too.
It's a cogent argument to point out the hypocrisy. If you want to argue we should create a watt-police or ensure externalities of power consumption are better accounted for, that's a different argument.
Well I disagree here. It provides benefit for many people. The example I continually use for me personally is buying precious metals with <30 min clearing without paying credit card fees (and I really hate funding credit card companies anyway). But people in Argentina also using it for reasons just to have efficient way of receiving dollar for free-lance work.
I think we're in agreement we would do well to be as efficient as we can with our resources. It would be great to find a way to eliminate externalities of energy production/consumption.
I do think it has some small benefits like transferring money where there are no other options. But the vast majority of the network's use is in purely financial use and justified by HODLers and libertarian types. Its existence is largely a downside on its own even without the huge energy costs.
Y'all told me crypto was bad and now I'm bad for dumping crypto to buy precious metals? The litecoin transaction I do uses $0.02 of electricity. $0.02. Ever left a lightbulb on longer than you should have? Spent $0.02 in gas to go to the bank to get fiat? Just can't win. I don't really like holding dollars as the government constantly inflates them, and I see them as part of a system that bombs innocent children abroad and locks up foreign nationals without even a trial. I see it as irresponsible not to store emergency wealth _somewhere_. I'm committed to not become a public charge and I wouldn't resort to begging from family unless there were no other choice and even then I'd probably rather just starve
Litecoin processes about 100k txs a day and miners make about 1M$ per day. So that comes to about 10$ in electricity per tx if we assume miners break even and ignore hardware depreciation. While this overestimates electricity costs, it's not off by orders of magnitude. This is the way that people attribute bitcoin's electricity costs to transactions.
Your $0.02 is presumably just your tx fee.
Are you gonna be there to personally bail out my whole family if we lose our jobs? Can you withstand that burden? Maybe that makes me evil. At least I don't stay awake at night wondering if I can buy more diapers and milk if I get axed at work tomorrow.
>Well, it's pretty simple really - I'm not a big fan of financialisation.
How do you see as buying precious metals with proceeds of labor being financialization? Do you think the $0.02 financial service cost from the transaction as really being larger than the financial cost of if I had went to the bank and got a big pile of cash, or if I had used a credit card? No, the "financialization" has lessened. The wikipedia article I read states it's a period where debt-to-equity ratios increase and financial services account for increasing share of national income. Explain how buying precious metals without debt is financialization. I can't even get a loan against personal custody of precious metals, if anything it _decreases_ my access to "financialization."
>bitcoin is doing anything good if it is literally just "wall street but with massive energy costs, less regulation, and full of even more scammers and financially illiterate".
I don't think that's the advantage of bitcoin, even if you describe it that way. The advantage of bitcoin is decentralization and lack of centralized trust -- packaged into electronic form.
- what real world utility is realised by the introduction of a new system?
- what real world cost is realised?
- how does it shape people's behaviour?
Note that none of these is a criticism of the individuals engaging with the system. It's about the impact of the system itself. Now from where I stand this is how bitcoin plays out:
- negative utility: high electricity and CO2 cost
- negative utility: labour does not provide material benefit (financialised)
- negative behaviour: increased cultural propagation of scamming, speculation and other results of financialisation
- mixed behaviour: cultural hub of libertarianism
- mixed utility: provides a space for unregulated financial transactions. Negative: scams, blackmail, other financial crimes. Positive: paying financially isolated and unbanked people. Mixed: purchase of contraband.
Which is to say, the ratio of positive to negative, especially weighting the impact of increased CO2 emissions (which is a potentially existential threat in the medium term and a mere catastrophic threat in the short term), is pretty shockingly bad.
And thus brings us to the reason why crypto is an ever popular debate on HN. At the end of the day even if you find crypto morally bad, there's no universal shock to the conscious for using crypto like there would be for murder/rape/theft. Some see crypto as sinner and other see it as saint. You seem to acknowledge a little of everything but weigh different factors differently than others. At the end of the day given the impossibility of banning crypto and the number of people on both sides, I just don't see it going away without a superior replacement filling the spot. For me this is a great thing, but for many it's going to be a point of contention and outrage for a long time. I will go one respecting the choice for some not to use it and hopefully others will peacefully implore us to stop if they find it wrong, but I think it's going to take violence and an oppressive enforcement mechanism to force me and many others to stop. Good luck.
I understand this is all opinion on both sides. I would add this opnion risks overlooking, say, Argentinian free-lancers who are paid in crypto because the system surrounding them makes it untenable to use conventional banking. Or the jewler buying precious metals with litecoin to avoid credit card fees. Escaping a failed economic system like refugees in Venezuela receiving crypto remittance definitely seems like a systemic improvement for them.
I guess you could call using it for transaction to buy precious metal speculative, but even in that system the actual crypto transaction isn't speculative as it merely acts as a unit of trade to buy an underlying "speculative" investment (personally I don't consider PMs speculative investment but rather store of value that I don't desire the volatility to appreciate or depreciate.)
>its primary cost is massive amounts of CO2
So you hate electricity? Join the Amish.
>mass murders are financially beneficial to funeral directors
But this isn't true. The people killed have to die sometime, their death is assured to the funeral directors. Them living longer just means they're more likely to reproduce and generate a new human who in turn dies someday. Funeral directors are worse off by mass murder. I think this excellent allegory points out your economic short-sightedness. Funeral directors want people to live highly reproductive lives, not short lives.
> Of course it can be individually beneficial - mass murders
Now we have entered clown world where mass murder is the example given. How many mass murders actually happened specifically and only because of the existance of crypto? The only example even close I'm aware of is Ross Ulbricht's alleged murder plot that was never even prosecuted thus we have no idea if it was true.
>advocating for something immoral because it benefits them financially
So basically anyone advocating for using dollars? I see crypto like a hammer, it's a tool that can be used morally, immorraly, or merely in a morally neutral fashion.
>Which is about all I expect from libertarians, to be fair.
Is this supposed to be some sort of ad-hominem attack?
>Which is about all I expect from libertarians
I have a hard time making sweeping generalizations about morality based on one's political choice.
I did include the unbanked and productive manufacturing (which you neglected to mention until now - are you a jeweler?) in examples of positive use, in my utility list. But you have to assess a technology based on its overall effect.
> So you hate electricity? Join the Amish.
Totally specious.
> Funeral directors want people to live highly reproductive lives, not short lives.
This is overly reductive. Clearly a short term boost in business is a financial boon for funeral directors, as it would be for any business.
> How many mass murders actually happened specifically and only because of the existance of crypto?
Uh, what? Maybe I should just give up trying to explain my point to you if a simple analogy is beyond your comprehension.
> I see crypto like a hammer, it's a tool that can be used morally, immorraly, or merely in a morally neutral fashion.
You can look at actual use to determine the effect of something. Not many people are using F15s for anything else but killing people, so it's fair to call weapons of war broadly immoral.
> Is this supposed to be some sort of ad-hominem attack?
"greed is good" and "unregulated capitalism is the ideal" are libertarian tenets, so yes, I think it's fair to say that they're selfishly self interested. So you consider yourself a libertarian?
> I have a hard time making sweeping generalizations about morality based on one's political choice.
Given that politics is an expression of values, I really don't. If somebody were to say "I don't like Jews and that's why I'm a nazi" (this is an argument from absurdity, BTW) I could reasonably call them a bad person. They also wouldn't need to say the first part because its implicit in the identification. Libertarianism is fundamentally about "fuck you got mine", which I find to be immoral.
I don't see that as true. A short term boost followed by long term bust in many scenarios is not good for business. See payday loans. Mass murder is a payday loan to funeral directors, you get a little bit early now but a big loss in the long run from drop in reproductivity rate (and ultimately, long-run death rate) of the populace.
>Totally specious.
Here's an idea, if you don't like using electricity don't use. There's no single "right" way to use electricity. Your beef again seems to be with externalities of electricity use. So you probably hate video games and AI too, albeit proportionately less on CO2 output. And you probably hate those in cold climates keeping their houses near 70 in the winter even more than bitcoin.
> So you consider yourself a libertarian?
The attribution you made suggesting my libertarianism was your statement "Which is about all I expect from libertarians, to be fair." This is your words, not mine, directly replying to me. Ad hominem doesn't require the label to actually be accurate. I've never called myself a libertarian, although I'm sure some might label me that way. I call myself an anarchist but that's really the only political label I give to myself.
But really this is all your self aggrandization about your moral superiority to libertarians, because in reality tons of people, even liberals or socialists and even authoritarians (North Korea government) use crypto. Crypto isn't exclusive to a subset of libertarians.
>You can look at actual use to determine the effect of something. Not many people are using F15s for anything else but killing people, so it's fair to call weapons of war broadly immoral.
Nah, 'weapons of war' aren't immoral. They're tools. Used to defend, or to aggress. Or maybe in my case, to put some holes in paper for enjoyment. Ever shot an SKS or an AK? Good fun. Even shot one at ISIS once, never felt bad about it but every once in awhile have a laugh at the fact I survived. They can be used for good or bad.
Yes I look at the F15 and see it like a hammer too. If aggressive fighter enters and bombs innocent people, I see it as fair game for that fighter getting blown out of the sky. The F15 isn't immoral, its use on the innocent is. Killing in self defense isn't immoral. Although sure the government and individuals in it have used the F15 immorally. Actually it's probably easier to use an F15 in a moral fashion than a larger bomber not as well suited for defensive fighting, although neither are immoral at face value.
>"greed is good" and "unregulated capitalism is the ideal" are libertarian tenets
Was selfishness the subject at hand? I don't see selfishness as bad, I see coercive selfishness as bad. Selfishly building a farm so you can make money with the effect others around you are fed is at least neutral and probably good. Using coercion to rob your neighbor is bad.
>I did include the unbanked and productive manufacturing (which you neglected to mention until now - are you a jeweler?)
I mentioned it because that's a large percentage of use of gold (going off memory here, but I think it's like 40%), for instance. Were you not aware of this? You know people use precious metals for different purposes right? For instance most platinum / palladium buyers are actually industrial rather than those perhaps seeking to hold on to it until manufacturers need it more and thus yielding a profit and providing market liquidity.
> But you have to assess a technology based on its overall effect
And your assessment is 'totally specious.'
> If somebody were to say "I don't like Jews and that's why I'm a nazi"
Not a fan of Nazis, but if someone simply calls themselves a Nazi and doesn't hurt any Jews or aggress on anyone then I call them a whacko not a bad person.
>Libertarianism is fundamentally about "fuck you got mine", which I find to be immoral.
This encompasses so much stupidity and naivety I don't know where to start. But I think you know more about libertarians than you give off, and you understand if we're (we're as in you an me, not we as in aforementioned libertarians) dumbing things down to your level socialism or democracy can be about "fuck you got mine" by those who vote to redistribute funds from the others to themselves, telling those who pay the tax "fuck you, got mine from the tax you paid."
On the other hand, Bitcoin provides no meaningful benefit to society compared to other currency. The only real benefits of Bitcoin are that it makes ransomware easier to accomplish (which is bad for most people) and that it has made some people a lot of money due to its pyramid scheme qualities (again, bad for most people).
One big one to me is buying precious metals online with <30 minute clearing time without paying credit card fees. Literally nothing else I can find accomplishes that; I didn't even set out to use crypto for that purpose it just happened to be the best way to do it in my circumstance.
>lives are meaningfully improved by increasing the temperature to closer to 70-72.
Well I could say "nuh uh" and then you could say about bitcoin "nuh uh" but then we'd both merely be saying the other's use of energy consumption is bad. If you have an issue with making sure every bit of electricity is only used for necessities, why don't you go out and say that or explain how you want to make sure externalities are paid for by power consumers. Singling out bitcoin by people living near room temperature with aid of heating/cooling is just hypocrisy.
That is unfortunately not the world we live in though, and probably never will be due to political reasons.
Decentralization and censorship resistance does not exist in the fiat world. Ask some greek people if Bitcoin was useful to buy food.
Because it's easy for you to open a bank account and have you money secured, it doesn't mean that other people have this luxury.