> a lot of energy is going to waste now.

Is it? How much does Bank of America spend in energy to keep up its servers? Backups? disaster-recovery setups? That's a significant energy cost, too.

I completely agree that Peercoin had the opportunity to become a much more efficient virtual currency, but it seems that ship has sailed. However, Peercoin as it exists now is not a fully decentralized currency and so is and was vulnerable to government intervention (during the SR era, for example).

Primecoin is not calculating anything particularly useful from a scientific or medical point of view (Cunningham chains).

That's why the eventual value of bit-coin is supposed to be the value of the energy required to maintain it (because the cost of doing a transaction will be the transaction fees, which have to cover the miner spending the energy to process the transaction, but because anyone can compete in the market supply will always place the value at the cost of energy). Honestly in the long run bitcoin may be cheaper than credit cards or even cash in a pure energy sense. No matter what we do we'll have to spend energy to maintain our financial system.

* With cash we have to print and distribute cash, and move it around, and run hardware to validate it, and image scan it, and count it, and destroy it. Etc.

* Credit cards require servers, massive backups, authentication procedures, production of specialized hardware, and the same networked infrastructure as bitcoin, as well as server ops, bank managers, customer service. Etc.

* Bitcoin can use any machine, and the same internet as any other program. As chips get faster and more efficient the energy cost goes down.

> There are alternatives to hashing proof-of-work

Not really. Peercoin's security comes from the developer of the system signing every block. It attempts to use a "Proof of Stake" system where ownership of coins controls mining, but the problem with PoS is, ironically, that there is nothing at stake.

In PoW when you attempt to mine you must expend energy and so you should only mine on a consensus which is likely to be the surviving one if you want your work to not be wasted. In PoS the same is not true, and an optimally rational PoS miner will attempt to concurrently mine all forks which he does not hate.

Originally the signed blocks in PPC were supposed to be a bootstrap mechanism until most of the mining was PoS based, but then some clever miner started mining many possible histories and finding ones where he magically got lucky and his coins were the selected stake for all the blocks.

Primecoin's work isn't scientifically useful— no one had bothered describing it as interesting before it got pulled out as a PoW, and it's far less clear that its not trapdoored (that someone knows how to mine it much faster) than the one way function based proof of work.

You can convert basically any stochastic search into a PoW, but not necessarily a good one (e.g. it might have trapdoors).

More deeply, if your mining work has independent value that that dilutes your incentive to mine on the one true best consensus, since you'll still gain that value even if you mine on a losing consensus.

And ultimately the energy is _not_ wasted: It provides security for the system which is shared by all it's users. In Bitcoin you don't mint coins (with enormous energy costs) or print notes, you don't need bank vaults, or armored cars. You don't need to incarcerate counterfitters, fly around agents, or suffer counterfeiting losses. All currencies have operating costs, if Bitcoin's costs are comparatively good is a complicated analysis which I don't think anyone's done.

It's not just proof-of-work though. It's everything. It's maintaining the entire balance sheet since the beginning of the first minted coin by Satoshi himself.

Doing a simple google search shows that counterfeiting costs the USA alone $200bn a year which is 1.2% of annual GDP. Current market cap of bitcoin is $10bn. This means that $100m would be comparative. Maybe someone can give me the numbers on mining hardware and electricity prices.

To be completely accurate, we need to include cost of minting physical dollars etc...maybe someone can do a better analysis on all this but I'm highly skeptical that bitcoin costs more to run than conventional financial systems.

> It seems that the cost of preventing counterfeiting, and other comparable attacks against the conventional financial system, is much lower than than the cost of the proof-of-work calculations done in bitcoin.

What do you base this assertion on? I have no idea what the US spends annually on preventing counterfeiting. Do you?

Securing traditional monetary systems also had to deal with the fact that we cannot trust each other (enough, in aggregate), and I think that's where most of the expense goes.

securing existing financial systems is useless so long as central banks can print money, bailout TBTF banks for brazen theft, sheer criminality, money laundering the whole lot and seize the assets of honest bank customers and investors to keep them afloat.

The growth of Bitcoin is nothing but a symptom of the lack of faith most of the world have in the policies of the US Govt, the Fed, their politicians and other Central banks in general. They have proven that they simply can't be trusted.

The fact that Bitcoin transactions are broadcast to the entire network should tell you that you are way off. Think of all the work that goes into processing a VISA transaction, and then imagine if tens of thousands of other payment processors had to do the same work.

To do that the chip would have to be designed to have that feature already. Otherwise it's like looking at a bicycle and wishing you could repurpose it into being a plane. The structure is just not there to do that sort of modification.

Well, the GPUs and FPGAs are (and have been) easily reconfigured after decommission. ASICs, however, are inherently specific-use (Application-Specific Integrated Circuit). So because of the requirements of the Bitcoin computation mentioned in my comment [0], repurposing of ASICs is not possible.

0. https://news.ycombinator.com/item?id=6796189

Yes, but how many general purpose chips have been made that aren't useful for anything any more - 386, Pentium, etc. After their useful life has ended they just end up on the scrap heap anyway.

What's your range for determining whether somebodies resources should be diverted into task A or B?

No, it's not misplaced at all. At least in America, Food makers & their exec buddies and all kinds of other social-economic factors make it difficult to choose otherwise. I've already had this debate before... https://news.ycombinator.com/item?id=6604104

Also, watch Food Inc. http://www.takepart.com/foodinc

The excuse that "Well, nobody forced them. It was their choice." is an elaborate illusion that needs to be done away with. There have been a couple of articles this year about how being poor causes bad decisions, not necessarily vice-versa. I'm glad those articles are being written because it shows at least a few people are starting to realize how the system traps people and others can be convinced it was they're own fault.

"Poor people, generally, make bad decisions—bad in the sense of their long-term physical, mental and financial welfare. But their bad decisions aren't the reason for their poverty. They're caused by it."

@http://killermartinis.kinja.com/why-i-make-terrible-decision...

Growing up poor is bad for your brain

@http://motherboard.vice.com/blog/growing-up-poor-is-bad-for-...

I don't believe this is fair. I walk into the supermarket and consciously attempt not to eat the first crap I come across, and it costs me vastly more than if I just went and bought a 10KB tub of mayo and ate it with a soup ladle.

Are you suggesting that there is _nothing_ the time you spent writing that message might better be used for? :)

DOTDIW, I guess.

But then again, my phone's GPU is infinitely more powerful at 3D rasterization than the entire Bitcoin network (because the Bitcoin network can't do 3D rasterization).

My analogy might be a bit convoluted, but my point is that - as you mention - that we're comparing oranges to apples. We're comparing a general-purpose computer to doing a SHA256 hash.

"ghetto monkey"? Really?

Someone should make a coin whose proof of work involves solving difficult (but verifiable) problems that are in NP, that are frequently used in commerce.

This would provide a more direct incentive for researchers to make these algorithms faster, and would therefore provide a tangible benefit to society.

And that's based on Gromacs and several other software packages. It still doesn't address the issue of where does the data come from and will the outcome of mining it be fair and trustworthy?

So, you're saying that none the of innovation or money funneled into finding Bitcoins will lead to zero reusable innovation? It will not create more profitable companies that produce ASICs? It won't possibly lead to even lower power ASICs? Better manufacturing techniques?

Doesn't the fact that money is being redistributed to technology companies good for technology, by definition?

Oh, I've no illusion that it's easy. It's just one of the few possible "building something for bitcoin miners" developments that is likely (if it happens) to have significant positive benefits (other than through bitcoin) long term. I wish anyone attempting it substantial luck, as well!

Are these most recent machines really incrementing the nonce? Is there an advantage over randomly picking them?

No, they can't crack passwords. They increment a nonce at the end of a supplied string and only return if the nonce results in a low hash. They're not a generic "fast SHA" device like you're thinking.