> The Merge will reduce Ethereum's energy consumption by ~99.95%.
That's something Bitcoin needs ... or even better get rid of it altogether.
That's something Bitcoin needs ... or even better get rid of it altogether.
But you are free to create your own PoS cryptocurrency. If some PoS system offers the same security features as Bitcoin, people will just switch from Bitcoin to that.
Maybe that won't matter, but I hope it will.
https://www.konstantinschubert.com/2018/11/28/proof-of-stake...
People are not using Bitcoin because it's the most advanced or secure cryptocurrency, they use bitcoin because it was the first and will probably be the last to go whenever that whole flaming garbage bag of a "technology" hits the bin.
Wrong. Bitcoin has the most security because it has network effect. Most people hop onto the most secure chain, which is Bitcoin, which increases its security. That's what network effect in this context means.
- Permissionless chain. Anyone can join by just downloading software and start mining. Tbf it has moved beyond this quite a bit with ASICs but you can still validate.
- Fair launch (just filtering all cryptocurrencies on this criteria will result in ~10 or so)
- Devs, anyone can make a PR or write BIPs.
- No foundation/community/devs that extract a fee from the operation of the chain. Communities and companies operate outside of the Bitcoin network. - Hard cap on 21m coins.
Most others compromise on some of these to use less energy, be faster, enrich themselves, or all.
See also the "block size controversy" [0]
[0]: https://en.bitcoin.it/wiki/Block_size_limit_controversy
Bitcoin can and does change. Some aspects, such as the supply cap, are unlikely to change any time soon but are certainly not bounded by physics.
Without significant outside force bitcoin will not change to proof of stake, they are currently framing proof of stake as useless and insecure, IMO because of motivated reasoning from the stance that bitcoin is perfect, therefore any deviation from what bitcoin has is a mistake.
As the price keeps falling, presumably so will energy consumption. The energy consumption problem fixes itself as the bubble bursts and people lose interest and mining becomes unprofitable, without the need for regulation.
Every "bust" period for BTC comes with the risk of a 51% attack / centralization.
If the difficulty falls by 90% because 90% of miners were shut off, you only need to buy 5.6% of those thrown-away miners to cause a 51% attack on BTC.
A hypothetical 51% attacker isn't doing it for profits, they're doing it for some other reason. Whatever that reason is, the 51% attack gets cheaper-and-cheaper each time these "bust" cycles happen.
Here's a hint, randomly attacking the network in a way that loses you money eventually removes you from the playing field. The network is stronger than a motivated attacker, in principle.
Every country's financial system: ahem.
The U.S. dollar doesn't require giant energy-hungry server farms to be secure.
Doubtful
Conventional currencies (notably the US Dollar) are also backed by signifigant military (and thus electrical) power. I would posit that Fiat currencies are nessisary in some sense, but not that they are more efficient to maintain than cryptocurrencies. Cryptocurrencies tend to piggyback on the infrastructure and economy that are built on fiat (e.g. The internet).
Yes, the militatary spending is nessisary but not sufficient to sustain a currency.
The US economy is the world's largest economy in gross value, is the largest or one of the largest trade partners of much of the world, and has very limited policies on capital control or other monetary restrictions. This means that there is going to be more depth on trading pairs via USD and even small currencies than you would likely have with other countries, you would have very little counterparty risk holding USD, and much trade will end up being denominated in USD anyways. So you'd be a bloody fool not to hold USD.
Magically blinking away the US military would not change any of the above consideration one iota.
So let me flip the question around: why do you believe that the US military is essential to its role as a major reserve currency?
Let's flip the question around: what happens when oil producing countries try to sell in non-USD? US military has entered the chat
(And I include the last few because there's no evidence they even attempted to sell oil in non-US currencies.)
Are you sure about that? Iraq was selling oil for euros and was then invaded in 2003.
https://www.theguardian.com/business/2003/feb/16/iraq.theeur... (published about a month before the invasion)
> Almost all of Iraq's oil exports under the United Nations oil-for-food programme have been paid in euros since 2001. Around 26 billion euros (£17.4bn) has been paid for 3.3 billion barrels of oil into an escrow account in New York.
Because it's the final backstop that compels people to pay taxes, and taxes are essential to that role.
If you refuse to pay taxes, they send a policeman to arrest you. If you evade the policeman's arrest, they send more policemen. If you somehow evade all the policemen, they send the military.
If the US had no armed federal agents, then people wouldn't pay taxes and the government would shrivel up and die, because governments can't survive on zero revenue.
In this way, the US dollar's value is reliant on the threat of physical force - or in a broad sense, a military.
Do banks not have server farms?
Crypto mining also makes the blockchain secure. What this means is that a malicious individual cannot, say, transfer crypto from another person's wallet to his own, or alter the software algorithm that controls the creation of the cryptocurrency.
Proof of work cryptocurrencies require miners to expend an enormous quantity of energy in order to prevent problems that national currencies don't have in the first place. Cryptocurrencies have no advantage over national currencies except for anonymous online transactions.
And those closest to the money printer benefit. And hint, the average joe is furthest from the printer. The future of the average joe is stolen via currency debasement and inflation, but those closest to the printer get richer.
Forget fiat. When money was gold in a vault, that's proof of stake, not proof of work. For proof of work, you'd have to disintegrate the gold. I wouldn't put my trust in a dollar backed by the absence of gold.
edit: I think maybe bitcoin enthusiasts think that value is a sort of spirit, and that if you kill something valuable, then through a huge mass ritual you can direct that spirit into another vessel. Proof that you once had money, and further proof that no one else has that money, should be enough for people to treat you as if you currently have money.
> I think maybe bitcoin enthusiasts think that value is a sort of spirit...
Interestingly, that is actually kind of how it works. The money you use itself has no value, it's value is in the things you use it to trade. So if you start trading in other currencies, those currencies receive that value, which gets reflected in the purchasing power metric.
Both of those were open questions in 2015, but they are solved problems now.
Once again, this seems to be the case. I can see at least one trivial attack against RANDAO, as is often the case with many-party interactive RNG: you just have to be willing to lose your pledge.
What is the trivial attack, and why does it involve losing your pledge? To the best of my knowledge none of Ethereum's slashing conditions involve the RANDAO, so you've piqued my interest.
Unless by "losing pledge", you mean extra-protocol slashing by social consensus?
You would be doing me a big favor by explaining the vulnerability in this system that I generally consider to be secure.
Become a contributor to RANDAO. Put up your pledge (say 1k ETH). Set up the bet. Wait to be the last person to submit their pre-image to RANDAO. Calculate what the post-image will be. If it has a 1 at the end (and you would win 10k), continue as normal. If it would have a 0 (and you would win nothing), refuse to disclose your pre-image and lose your pledge. Now it's 50/50 you win.
50% win and keep pledge. 25% win and lose pledge. 25% lose and lose pledge.
EV (0.510k + 0.259k + 0.25*-1k)-5k = 2k.
You can submit more than 1 pledge to get your odds arbitrarily close to 100%.
Ethereum does not let you make a gamble like that on the protocol level, so it sounds like your proposed attack is against a theoretical gambling platform that naively relies on RANDAO as its sole source of randomness for resolving bets, and that naively allows a user to resolve their bet based on a user-selected RANDAO round, correct? From your previous comment, I somehow got the idea that you were going to describe an attack against Ethereum's Proof of Stake.
This section of this article does a good mathematical analysis of RANDAO biasability in the context of leader selection in Ethereum's beacon chain, in my opinion:
https://eth2book.info/altair/part2/building_blocks/randomnes...
The takeaway from the math is that while it's true the RANDAO is biasable in one-off circumstances through the last-actor pre-image withholding attack you describe, trying to use such an attack to influence network consensus is a no-go. The majority of honest actors ensure that any attempt to bias the RANDAO is ephemeral, where it's only useful for doing a bit flip attack at an unpredictable block height against improperly implemented casino software.
I have to say I am a bit disappointed. I thought you were going to describe an attack against PoS.
Yeah, thanks for reminding me. We all had out good laugh at that site at some point.