Mining is always a rat race against the rest of the network. Although this article makes me hopeful for alternative PoW solutions like RandomX[1] that seek to combat the advantages specialized mining hardware altogether.
With POW on general purpose CPUs, anyone can rent cloud processing to mine for short bursts in a way that's just not possible for attacks on bitcoin.
1. If a cryptocurrency is dominated by specialized miners, then you have a centralization effect as the majority hash-rate can be more controlled by monopolies that can take advantage of their economies of scale. Because mining is mostly done by companies at scale, it is easier for governments to impose regulations on miners and control the type of transactions that are allowed to be verified.
2. Vendors accepting cryptocurrency can always choose their own level of risk by deciding how many blocks to wait before accepting a transaction. This allows them to "wait out" temporary attacks.
I would say that the permanent miner takeover as described #1 is an order of magnitude more threatening than the temporary attacks as you've described. But it is still quite an issue.
Specialized hardware will depreciate if it is tied to a cryptocurrency that has been attacked. So miners are incentivized not to attack, lest they devalue the resell value of their hardware. Note that this advantage doesn't really apply to GPU-mined cryptocurrencies.
The only powers they have are to censor transactions, conduct denial of service and (if they have over 50%) conduct a double spend attack.
What you are describing in #1 is a government takeover of miners.
Definitely a nit pick, but what are we here for if not for that?
And introduces even more inefficiencies into the entire system as now we have to spend that time waiting for transactions to clear
I've noticed a trend on HN where people say mining is bad for the environment, but can often poorly articulate the details. This, in my opinion, means they are just rehashing the same disinformation in articles that all point to the same sources (cambridge or digiconomist).
Quotes like "Bitcoin mining uses more energy than [country X]", "That green energy could be used for other things", and "It provides no intrinsic value" have all be waylaid years ago, but keep getting brought back up.
Some industries are more polluting than others, but we should be doing everything in our power to reduce the pollution. Bitcoin (POW) is intentionally wasteful.
I'd also like to point out that:
1. Most of the energy generated today is lost because it is unused. This is called "rejected energy". Having the option to not let so much energy get rejected is an efficiency gain for us, and should be prioritised before we shut down manufacturing and services because of energy use/emissions.
2. Mining is done at the knife's edge of margin cost. Lots of miners buy energy from suppliers at severely discounted prices (due to lack of demand) and scale up and down depending on the supply of energy. The days that you need to keep your miner online and hashing for 24/7 have passed us by years ago. These days, even an S9 miner can still be profitable if you have near-free electricity at your disposal.
3. Bitcoin mining enables the construction of renewable power plants in locations that are currently unaffordable to build.
2. No argument there, energy price is one of the main costs in a mining op.
3. This seems like a minor win. What happens to these plants when the miner moves to a new region? They’ll become unprofitable again and shutdown. Which means waste again.
I'm not sure how separation of money and state works. If you have taxes, they're not really all that separate. If you don't have taxes, you can't have much of a state, can you?
Most crypto types seem to want very low or zero taxes, it's unclear how social programs and large scale infrastructure is going to work.
The harsh judgement that it is an environmental disaster rests on these points:
1. The network does a little bookkeeping work, but around 1 billion times less efficient than necessary, just to achieve the defining characteristic of crypto, "trustlessness" or the lack of a central authority.
2. The incentive system is such that by design and ineluctably around one third or so of mining rewards will be wasted on electricity and electro waste.
Other industries work hard to minimise their energy waste, and often impressively successfully, by the way. Bitcoin mining cannot.
(Note: Bitcoin could become 99% more energy efficient overnight (plus minus two weeks), of course, if all the mining pools banded together and took 99% of their hash power offline. After the next difficulty adjustment, BTC would be exactly the same, but waste 99% less energy. If only this coordination problem could be solved, maybe with some kind of ... central authority?)
Mining specialization is against the purpose of cryptocurrency mining because it gives specialized attackers (a centralized group) power over the rest of the stakeholders (not just owners, but users).
It is common to make analogous mistakes when considering biological evolution.
The opportunity for miners to collude is completely offset by the fact that if they try to leverage their equipment somehow to delay or otherwise impact the main chain, you can just choose to mine instead to make better profits. Thus far there hasn’t been a single effective counter-play for miners that isn’t just “mine more Bitcoins and thus further secure the network” that isn’t just day trading with extra steps.
Also who are these centralized miners anymore? Pools are centralized, but I’m a nobody who can mine profitably with very little capital involved. I can submit whatever block template I want. I haven’t been invited to any meetings.