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Comment by pc2g4d | Hacker News Reader

The difficulty of computing the hashes is the entire point of them, to enforce scarcity. It's not wasted if you belief that scarcity has worth, which in the digital world it certainly does.

The price people are willing to pay for something _is_ the value of something.

Cryptocurrencies are gambling in a similar manner to how owning risky stocks is gambling. A cryptocurrency provides various services, and the utility of those services is what ultimately drives the price. Bitcoin's services for example include borderless, permissionless value transfers. The reduction in friction is immense---if you're operating in Bitcoin. Thus one of the incentives to own Bitcoin.

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> The reduction in friction is immense---if you're operating in Bitcoin

This "friction" is 100% intentional. We don't want free flow of capitals across countries, just like we don't want free flow of people. If we wanted it, we would have signed specific treaties to that effect, and those "frictions" would have gone away. This is what they did in the EU for example, where international payments within the union are seamless.

> The difficulty of computing the hashes is the entire point of them, to enforce scarcity. It's not wasted if you belief that scarcity has worth, which in the digital world it certainly does.

A very succinct and clear indictment of the entire cryptocurrency space.

hashing has nothing to do with scarcity. mining is only hard to ensure that the canonical transaction order is set by the majority of the computing power in the network. otherwise you get double spends. hashing is an ugly, wasteful way of doing this; Proof of Stake would be another if anyone ever figures out how to make it work.

scarcity is an implementation detail.

It's also basically the only way to have a permissionless verification system that is resistant to sibyl attacks.

A sibyl attack, is where in an anonymous system, one person can easily pretend to be millions of people. If we had some magical way to prevent people from doing this, without having to verify their identity, and manually add them to a list of "trusted verifiers", we could do away with PoW.

You're saying the exact same thing. Bitcoin is created by special coinbase transaction with no predecessors, each block contains at most 1 of those, if block proposal was easy then peers would be incentivized to create money out of nothing.

Double spends are just another, smarter, subtler way to "create" money, by exploiting inconsistent versions of the same supposedly-shared state.

It all boils down to scarcity in the end, that's a necessary condition for a currency. Value is scarce, so anything representing and storing it must be so too.

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