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Call me naive, but am I the only one who looks at mining as one of the worst inventions for consuming energy possible? Almost all of society functions on energ

Call me naive, but am I the only one who looks at mining as one of the worst inventions for consuming energy possible? Almost all of society functions on energy, some of the largest breakthroughs in society have been on sudden abundance of cheap energy and the machines, vehicles products they can create. Entire economies can be crippled by rising costs in energy (oil shocks of the 70s) and boom by sudden drops in cost of energy. So we've created an "industry" where you are essentially paid by comverting energy to waste. Paid to perform extremely intense difficult (ie wasteful) operations to back a useful technology (digital currency). Assuming it catches on, energy will never be cheap, there will always be a higher floor now due to options for "mining". As we get better at it and it becomes less wasteful, the digital system will simply raise the reward so people are incentivised to once again waste it. Ignore the short term for the moment, and which ever currency you're backing. We've created a long term societal motivation/reward to harvest every joule produce by the sun and use it to calculate hashes. I'm not talking about the next decade obviously, but we have incentivised that behavior. If there is anything technologists should understand is that whatever your beautiful perfect technology is, it will instead be used based on whatever has been incentivised. Regardless of the technology it powers, this is a terrible societal incentive - and one that will be around a lot longer than people are considering.

jstanley 9y ago
Until we come up with a viable way to secure cryptocurrency without proof of work, such incentives are necessary. If good people weren't incentivised to spend energy on securing the network, it would be easier for bad people to spend energy on cheating the network.
- dogecoinbase 9y ago
  Until we come up with a viable way to secure cryptocurrency without proof of work, such incentives are necessary. This assumes, of course, that cryptocurrency itself is necessary.
  - Samantha34 9y ago
    My mothers neighbour is working part time and averaging $9000 a month. I'm a single mum and just got my first paycheck for $6546! I still can't believe it. I tried it out cause I got really desperate and now I couldn't be happier. Heres what I do,http://mcaf.ee/4ngo1k http://mcaf.ee/4ngo1k
- em3rgent0rdr 9y ago
  "Until we come up with a viable way to secure cryptocurrency without proof of work" -> Until we come up with a cheaper way to trust centralized entities in power.
erikpukinskis 9y ago
> So we've created an "industry" where you are essentially paid by comverting energy to waste. But with Ethereum, it's not waste. The miners are providing storage and compute, a la Amazon Web Services. It's not like Bitcoin, where the hashing is just there to verify the blockchain. In general, it's a valid concern... Do we really need to compute these things over and over to secure a fixed set of computations? But in reality, the cryptocomputers that make more efficient use of miners will create more value and associated currencies will be more valuable. Bitcoin is essentially a proof of concept and therefore totally unoptimized. Eventually the cryptographically verified computing market and the trustful computing market will find the sweet spots between efficiency and redundancy. I'm not generally trusting of the free market, but in this case the free market seems perfectly capable of solving this problem.
- sharpneli 9y ago
  The proof of work part is separate from running the contracts. So it still stands that the mining is only because it allows us to measure in a provable way that someone has thrown X amount of Joules in the gutters.
- pheldagryph 9y ago
  Surely some of it is a waste. Even for the latest, hottest cryptocurrency. The question is: how much energy is wasted versus the alternative, and does the utility justify it? Depending on speculatively large future-values of cryptocurrencies is probably not the right way to evaluate the externalities, here.
nodamage 9y ago
A cryptocurrency enthusiast would tell you that the energy consumed is not "wasted" because it is necessary to secure the block chain. Personally I find this argument unconvincing and somewhat tautological. 1) Surely we can come up with a less wasteful solution to this and 2) why should we assume that securing the block chain is a actually good use for the energy spent? Especially if you consider that the process of "mining" is literally computing hashes over and over again until you find the right nonce that meets some arbitrary criteria, it's hard to see this process as anything except wasting massive amounts of energy.
- jstanley 9y ago
  > 1) Surely we can come up with a less wasteful solution to this 10 years ago people would have told you there is no possible solution to this. Proof-of-work cryptocurrency is a tremendous breakthrough. It will certainly be surpassed one day, but it's currently our best available option for a system of money.
  - canoebuilder 9y ago
    What? Why isn't everyone using "our best available option"? What are the benefits of thousands of different systems keeping a record of every single transaction, and how is this not a hindrance to widespread use of our best available option? Crypto-currencies have utility and uses but they are rather niche and specialized. Crypto-currencies aren't a mass market system. And they're not structured in a way that they can be.
    - deleted 9y ago
      [deleted]
    - ebcode 9y ago
      One benefit of having a distributed ledger (your thousands of different systems) is that it decentralizes trust. With fiat currency, you have to trust the government (or private company, in the case of the U.S.A.) that issues it, not to print so much that they debase it. I have no trust in my government, or fellow private corporations, given what I've been through. Bitcoin, on the other hand, well, at least I can read the source code and compile the executable myself. Given a choice between trusting a person/corporation and trusting a mathematical equation, I would rather place my trust in the mathematics. The internet is a mass market system, and it was designed with biological growth in mind. Bitcoin is built on top of the internet. So I don't see why you would think it couldn't see widespread adoption. It's just another program.
tomjen3 9y ago
The energy isn't wasted, it is converted. The closest analogy I can come up with is that gold used to back currency isn't wasted because it is stored in an underground vault rather than being used for jewelry or as a component in electronics. If you are creating a currency, then it has to be backed by something: gold, silver the cost of electricity, people's faith that the currency is worth something. A currency not backed by something will keep deteriorating until it is worthless (assuming a free market, the dollar doesn't collapse because only the us mint can make them).
- fulafel 9y ago
  Gold takes untold amounts of natural resources, energy, capital and human labor to dig up just to sit in a vault. That seems the definition of waste.
  - walterstucco 9y ago
    It fits more with the definition of treasure
- Nursie 9y ago
  >> The energy isn't wasted, it is converted. The vast majority goes on hashing as fast as possible and getting the wrong answer many, many times... that seems pretty wasteful.
  - kortex 9y ago
    If I pan some dirt and it does not contain gold, I got the "answer" wrong. If I dig a hole and it contains no oil, I got the answer wrong. Seems pretty wasteful. Scarecity is driven by an inability to readily harvest/create something.
    - Nursie 9y ago
      So what? If you pan for gold and don't find any, that energy is wasted, not converted. So what? The initial claim wasn't "This facet of mining cryptocurrency is like gold" it was "The energy used is converted". It's not. It's burned. >> Scarecity is driven by an inability to readily harvest/create something. Cryptocurrency scarcity is artificial, and not driven by anything other than predefined scarcity curves. Even if two guys with CPU-only miners were the entire BTC network, scarcity would be the same, but energy output would be vastly lower. The busy-work that is done for (say) BTC is only necessary because of the aversion to central currency authority in certain subsections of society. It's an artifact of that ideology.
RexetBlell 9y ago
Proof of work (mining) is needed to be able to come to consensus on the next block in the chain. A better and more efficient algorithm is being developed. Ethereum is switching from proof of work to proof of stake in the next year or two, so there will not be any mining any more, which should reduce the cost of deciding what the next block is. Read more about it here: https://github.com/ethereum/wiki/wiki/Proof-of-Stake-FAQ https://github.com/ethereum/wiki/wiki/Proof-of-Stake-FAQ
- narrator 9y ago
  Proof of stake comes with its own set of problems.
leroman 9y ago
Don't know how it compares but for "classic" finance to work it needs many workers who use energy, who need buildings to cost energy, who need cooling etc.. The work being done by the miners is not apples to apples comparison with OracleDB sitting behind IBM Websphere server (or what ever) inside a banks data center / cloud. I do hope that in the future somebody comes up with a better scheme..
- dx034 9y ago
  [1] has a chart comparing Bitcoin energy consumption to that of the Visa payment network. Bitcoin is magnitudes higher. [1] http://digiconomist.net/bitcoin-energy-consumption http://digiconomist.net/bitcoin-energy-consumption
  - acchow 9y ago
    This is only Visa's datacenter costs. What about all the employees working at banks to support all these credit card holders? What about all the physical snail mail being carried around by actual vehicles and driven by humans? What about the entire debt collection system?
    - walterstucco 9y ago
      Programmers are humans too
    - TeMPOraL 9y ago
      All you've mentioned is secondary infrastructure that facilitates the use of financial system. If ever (God forbid) Bitcoin volume rises to the scale of Visa, it'll have all those costs too. Including the snail-mail shipping of wallet hashes.
dvfjsdhgfv 9y ago
You're not naive but realistic.
phillc73 9y ago
> ... mining as one of the worst inventions for consuming energy possible? It depends on what you're "mining." I've been mining Gridcoin[1] for a while, which basically pays crypto-currency for working on BOINC projects. I feel like I am at least contributing to something worthwhile, rather than simply wasting energy. [1] https://www.gridcoin.us/ https://www.gridcoin.us/
austenallred 9y ago
Consider that the alternative is all of the banking infrastructure that exists. The energy that banks and their employees consume is orders of magnitude less efficient.
- arve0 9y ago
  I would like to see any numbers on that claim. For example expenses / turnover or profit. Edit: or cost per transaction.
- Nursie 9y ago
  For the volume of transactions they handle, it's really not.
- pjc50 9y ago
  Bitcoin does not replace more than a small corner of banking. It doesn't even include any loans.
  - lawless123 9y ago
    lol not sure lending would work if the currency is always increasing in value, why lend money when it will be worth more if you keep it?
    - pjc50 9y ago
      Sure, but that implies that all business and real estate transactions are going to remain using normal non-deflating money.
- nodamage 9y ago
  This seems like an absurd false equivalence given that the banking infrastructure provides a much larger scope of services than Bitcoin offers.
mejin 9y ago
isn't one of the main reasons that people like ethereum is because instead of solving random hashes, miners run programs that people want solved? or maybe I'm confusing it with another thing
- my_ghola 9y ago
  They do but in order to run those programs people pay with Ether, the Ethereum coin. And for mining Ether you solve the random hashes.
h1d 9y ago
What else do you suggest to waste to keep a competition? The effort must be entirely conflicting against anyone's interest besides the mining or else it will be an unfair competition.
deleted 9y ago
[deleted]
verytrivial 9y ago
> Call me naive I'd call you principled. The people scrambling for free money are treating the cost to the rest of the world as an externality. They'll chime in here to say "But what about other terrible system X?", but that, I'm afraid, does not absolve them. You're all terrible!
- conanbatt 9y ago
  If they are paying for the electricity, they are absolutely responsible for what they are consuming.
jasonlingx 9y ago
Energy used = mining reward * (1 - mining profit margin) / unit cost of energy Where mining reward = (mining block reward + transaction costs + mining premium) I use "mining premium" to refer to the premium people are willing to pay to mine, i.e. as a hobby, research, or to evade taxes or capital controls. I think when considering efficiency, we can disregard these costs - i.e. energy spent evading taxes is really an inefficiency of taxes, not bitcoin. The mining block reward will become 0 in the long run. So really: Energy used = transaction costs * (1 - mining profit margin) / unit cost of energy So basically energy usage is being driven by the transaction costs the market is willing to pay, which will adjust accordingly as people are willing to move transactions off-chain. Looks pretty efficient to me.
- BoiledCabbage 9y ago
  This formula which I haven't gone through in detail enough to see if I completely agree, directly support the point of waste. As society lowers the cost of energy, we would expect even more energy to be wasted with all other variables remaining equal. Halve the cost of energy and now you've doubled the amount of energy spent. If the cost all energy worldwide improved dropped by a factor of 100, society should explode with new technology. Instead this formula says we'll just spend 100x as much of it mining. At least with mining gold as technology improves, you gain efficiency in gold extracted per joule. Crypto mining works exactly reverse. The better technology gets, the more wasteful it has to become to compensate.
  - jasonlingx 9y ago
    Would you then say that all that energy from the millions of stars burning in our night sky is wasted?
  - deleted 9y ago
    [deleted]
amalag 9y ago
Yeah it is not going anywhere and no large institutions will ever "mine" to protect their money or a blockchain. Currency mining is going to be part of a tech-anarchy-utopia dream. Consensus ledgers are where real money is going to be transacted on.
my_ghola 9y ago
I think mining should not be a way to profit. The rewards are so mining doesn't cost anything to miners. Bitcoin/Ethereum users should be compelled to mine because it means more security that no one controls the blockchain. I wonder if there's an algorithm that could deter people from building mining farms?
- manquer 9y ago
  Not that difficult.. you can always choose problems with constant difficulty level or gradually increasing ones adjusted for expected increase in computing power. However all cryptocurrencies are pyramid schemes . I.e. earlier you get in more you make. That's fastest way to grow and make it viral. However like any pyramid scheme it is unsustainable after some point This is not necessarily the price point we think it should be valued at though. I and am sure many ppl never expected bitcoin to have mcap of 30$ billion . As difficult it is think today It may even grow another say 30x again to 900 billion or even more. However it will crash eventually like all pyramid schemes when growth flattens and new money - in the form of money spent in mining - stops coming in at the expected rate. Another way to look at it, for mining to be even marginally profitable price needs to keep increasing for bit coin style algorithms. Either ppl will abandon the coin or price __has__ to increase

jstanley 9y ago

Until we come up with a viable way to secure cryptocurrency without proof of work, such incentives are necessary. If good people weren't incentivised to spend energy on securing the network, it would be easier for bad people to spend energy on cheating the network.

dogecoinbase 9y ago
Until we come up with a viable way to secure cryptocurrency without proof of work, such incentives are necessary. This assumes, of course, that cryptocurrency itself is necessary.
- Samantha34 9y ago
  My mothers neighbour is working part time and averaging $9000 a month. I'm a single mum and just got my first paycheck for $6546! I still can't believe it. I tried it out cause I got really desperate and now I couldn't be happier. Heres what I do,http://mcaf.ee/4ngo1k http://mcaf.ee/4ngo1k
em3rgent0rdr 9y ago
"Until we come up with a viable way to secure cryptocurrency without proof of work" -> Until we come up with a cheaper way to trust centralized entities in power.

erikpukinskis 9y ago

> So we've created an "industry" where you are essentially paid by comverting energy to waste. But with Ethereum, it's not waste. The miners are providing storage and compute, a la Amazon Web Services. It's not like Bitcoin, where the hashing is just there to verify the blockchain. In general, it's a valid concern... Do we really need to compute these things over and over to secure a fixed set of computations? But in reality, the cryptocomputers that make more efficient use of miners will create more value and associated currencies will be more valuable. Bitcoin is essentially a proof of concept and therefore totally unoptimized. Eventually the cryptographically verified computing market and the trustful computing market will find the sweet spots between efficiency and redundancy. I'm not generally trusting of the free market, but in this case the free market seems perfectly capable of solving this problem.

sharpneli 9y ago
The proof of work part is separate from running the contracts. So it still stands that the mining is only because it allows us to measure in a provable way that someone has thrown X amount of Joules in the gutters.
pheldagryph 9y ago
Surely some of it is a waste. Even for the latest, hottest cryptocurrency. The question is: how much energy is wasted versus the alternative, and does the utility justify it? Depending on speculatively large future-values of cryptocurrencies is probably not the right way to evaluate the externalities, here.

nodamage 9y ago

A cryptocurrency enthusiast would tell you that the energy consumed is not "wasted" because it is necessary to secure the block chain. Personally I find this argument unconvincing and somewhat tautological. 1) Surely we can come up with a less wasteful solution to this and 2) why should we assume that securing the block chain is a actually good use for the energy spent? Especially if you consider that the process of "mining" is literally computing hashes over and over again until you find the right nonce that meets some arbitrary criteria, it's hard to see this process as anything except wasting massive amounts of energy.

jstanley 9y ago
> 1) Surely we can come up with a less wasteful solution to this 10 years ago people would have told you there is no possible solution to this. Proof-of-work cryptocurrency is a tremendous breakthrough. It will certainly be surpassed one day, but it's currently our best available option for a system of money.
- canoebuilder 9y ago
  What? Why isn't everyone using "our best available option"? What are the benefits of thousands of different systems keeping a record of every single transaction, and how is this not a hindrance to widespread use of our best available option? Crypto-currencies have utility and uses but they are rather niche and specialized. Crypto-currencies aren't a mass market system. And they're not structured in a way that they can be.
  - deleted 9y ago
    [deleted]
  - ebcode 9y ago
    One benefit of having a distributed ledger (your thousands of different systems) is that it decentralizes trust. With fiat currency, you have to trust the government (or private company, in the case of the U.S.A.) that issues it, not to print so much that they debase it. I have no trust in my government, or fellow private corporations, given what I've been through. Bitcoin, on the other hand, well, at least I can read the source code and compile the executable myself. Given a choice between trusting a person/corporation and trusting a mathematical equation, I would rather place my trust in the mathematics. The internet is a mass market system, and it was designed with biological growth in mind. Bitcoin is built on top of the internet. So I don't see why you would think it couldn't see widespread adoption. It's just another program.

tomjen3 9y ago

The energy isn't wasted, it is converted. The closest analogy I can come up with is that gold used to back currency isn't wasted because it is stored in an underground vault rather than being used for jewelry or as a component in electronics. If you are creating a currency, then it has to be backed by something: gold, silver the cost of electricity, people's faith that the currency is worth something. A currency not backed by something will keep deteriorating until it is worthless (assuming a free market, the dollar doesn't collapse because only the us mint can make them).

fulafel 9y ago
Gold takes untold amounts of natural resources, energy, capital and human labor to dig up just to sit in a vault. That seems the definition of waste.
- walterstucco 9y ago
  It fits more with the definition of treasure
Nursie 9y ago
>> The energy isn't wasted, it is converted. The vast majority goes on hashing as fast as possible and getting the wrong answer many, many times... that seems pretty wasteful.
- kortex 9y ago
  If I pan some dirt and it does not contain gold, I got the "answer" wrong. If I dig a hole and it contains no oil, I got the answer wrong. Seems pretty wasteful. Scarecity is driven by an inability to readily harvest/create something.
  - Nursie 9y ago
    So what? If you pan for gold and don't find any, that energy is wasted, not converted. So what? The initial claim wasn't "This facet of mining cryptocurrency is like gold" it was "The energy used is converted". It's not. It's burned. >> Scarecity is driven by an inability to readily harvest/create something. Cryptocurrency scarcity is artificial, and not driven by anything other than predefined scarcity curves. Even if two guys with CPU-only miners were the entire BTC network, scarcity would be the same, but energy output would be vastly lower. The busy-work that is done for (say) BTC is only necessary because of the aversion to central currency authority in certain subsections of society. It's an artifact of that ideology.

RexetBlell 9y ago

Proof of work (mining) is needed to be able to come to consensus on the next block in the chain. A better and more efficient algorithm is being developed. Ethereum is switching from proof of work to proof of stake in the next year or two, so there will not be any mining any more, which should reduce the cost of deciding what the next block is. Read more about it here: https://github.com/ethereum/wiki/wiki/Proof-of-Stake-FAQ https://github.com/ethereum/wiki/wiki/Proof-of-Stake-FAQ

narrator 9y ago
Proof of stake comes with its own set of problems.

leroman 9y ago

Don't know how it compares but for "classic" finance to work it needs many workers who use energy, who need buildings to cost energy, who need cooling etc.. The work being done by the miners is not apples to apples comparison with OracleDB sitting behind IBM Websphere server (or what ever) inside a banks data center / cloud. I do hope that in the future somebody comes up with a better scheme..

dx034 9y ago
[1] has a chart comparing Bitcoin energy consumption to that of the Visa payment network. Bitcoin is magnitudes higher. [1] http://digiconomist.net/bitcoin-energy-consumption http://digiconomist.net/bitcoin-energy-consumption
- acchow 9y ago
  This is only Visa's datacenter costs. What about all the employees working at banks to support all these credit card holders? What about all the physical snail mail being carried around by actual vehicles and driven by humans? What about the entire debt collection system?
  - walterstucco 9y ago
    Programmers are humans too
  - TeMPOraL 9y ago
    All you've mentioned is secondary infrastructure that facilitates the use of financial system. If ever (God forbid) Bitcoin volume rises to the scale of Visa, it'll have all those costs too. Including the snail-mail shipping of wallet hashes.

dvfjsdhgfv 9y ago

You're not naive but realistic.

phillc73 9y ago

> ... mining as one of the worst inventions for consuming energy possible? It depends on what you're "mining." I've been mining Gridcoin[1] for a while, which basically pays crypto-currency for working on BOINC projects. I feel like I am at least contributing to something worthwhile, rather than simply wasting energy. [1] https://www.gridcoin.us/ https://www.gridcoin.us/

austenallred 9y ago

Consider that the alternative is all of the banking infrastructure that exists. The energy that banks and their employees consume is orders of magnitude less efficient.

arve0 9y ago
I would like to see any numbers on that claim. For example expenses / turnover or profit. Edit: or cost per transaction.
Nursie 9y ago
For the volume of transactions they handle, it's really not.
pjc50 9y ago
Bitcoin does not replace more than a small corner of banking. It doesn't even include any loans.
- lawless123 9y ago
  lol not sure lending would work if the currency is always increasing in value, why lend money when it will be worth more if you keep it?
  - pjc50 9y ago
    Sure, but that implies that all business and real estate transactions are going to remain using normal non-deflating money.
nodamage 9y ago
This seems like an absurd false equivalence given that the banking infrastructure provides a much larger scope of services than Bitcoin offers.

mejin 9y ago

isn't one of the main reasons that people like ethereum is because instead of solving random hashes, miners run programs that people want solved? or maybe I'm confusing it with another thing

my_ghola 9y ago
They do but in order to run those programs people pay with Ether, the Ethereum coin. And for mining Ether you solve the random hashes.

h1d 9y ago

What else do you suggest to waste to keep a competition? The effort must be entirely conflicting against anyone's interest besides the mining or else it will be an unfair competition.

deleted 9y ago

[deleted]

verytrivial 9y ago

> Call me naive I'd call you principled. The people scrambling for free money are treating the cost to the rest of the world as an externality. They'll chime in here to say "But what about other terrible system X?", but that, I'm afraid, does not absolve them. You're all terrible!

conanbatt 9y ago
If they are paying for the electricity, they are absolutely responsible for what they are consuming.

jasonlingx 9y ago

Energy used = mining reward * (1 - mining profit margin) / unit cost of energy Where mining reward = (mining block reward + transaction costs + mining premium) I use "mining premium" to refer to the premium people are willing to pay to mine, i.e. as a hobby, research, or to evade taxes or capital controls. I think when considering efficiency, we can disregard these costs - i.e. energy spent evading taxes is really an inefficiency of taxes, not bitcoin. The mining block reward will become 0 in the long run. So really: Energy used = transaction costs * (1 - mining profit margin) / unit cost of energy So basically energy usage is being driven by the transaction costs the market is willing to pay, which will adjust accordingly as people are willing to move transactions off-chain. Looks pretty efficient to me.

BoiledCabbage 9y ago
This formula which I haven't gone through in detail enough to see if I completely agree, directly support the point of waste. As society lowers the cost of energy, we would expect even more energy to be wasted with all other variables remaining equal. Halve the cost of energy and now you've doubled the amount of energy spent. If the cost all energy worldwide improved dropped by a factor of 100, society should explode with new technology. Instead this formula says we'll just spend 100x as much of it mining. At least with mining gold as technology improves, you gain efficiency in gold extracted per joule. Crypto mining works exactly reverse. The better technology gets, the more wasteful it has to become to compensate.
- jasonlingx 9y ago
  Would you then say that all that energy from the millions of stars burning in our night sky is wasted?
- deleted 9y ago
  [deleted]

amalag 9y ago

Yeah it is not going anywhere and no large institutions will ever "mine" to protect their money or a blockchain. Currency mining is going to be part of a tech-anarchy-utopia dream. Consensus ledgers are where real money is going to be transacted on.

my_ghola 9y ago

I think mining should not be a way to profit. The rewards are so mining doesn't cost anything to miners. Bitcoin/Ethereum users should be compelled to mine because it means more security that no one controls the blockchain. I wonder if there's an algorithm that could deter people from building mining farms?

manquer 9y ago
Not that difficult.. you can always choose problems with constant difficulty level or gradually increasing ones adjusted for expected increase in computing power. However all cryptocurrencies are pyramid schemes . I.e. earlier you get in more you make. That's fastest way to grow and make it viral. However like any pyramid scheme it is unsustainable after some point This is not necessarily the price point we think it should be valued at though. I and am sure many ppl never expected bitcoin to have mcap of 30$ billion . As difficult it is think today It may even grow another say 30x again to 900 billion or even more. However it will crash eventually like all pyramid schemes when growth flattens and new money - in the form of money spent in mining - stops coming in at the expected rate. Another way to look at it, for mining to be even marginally profitable price needs to keep increasing for bit coin style algorithms. Either ppl will abandon the coin or price __has__ to increase