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Proof-of-work is simply not sustainable (energy-wise), IMO, for the foundation of a global system. The stability of whole ecosystems is predicated upon those ec

Proof-of-work is simply not sustainable (energy-wise), IMO, for the foundation of a global system. The stability of whole ecosystems is predicated upon those ecosystems being attractive to people who want to make money by competing to solve hard problems by brute force. That's a lot of energy going into a system that can commit a new block of transactions once every 10 minutes on average. It solves a problem in an interesting way, but it's nowhere near quick enough or efficient enough to solve 99% of engineering problems. That's why only 1% of engineers are working on it.

DINKDINK 9y ago
>Proof-of-work is simply not sustainable (energy-wise), IMO, for the foundation of a global system. What have you found that is cheaper to proof-of-work that works on a global system?[1] [1] "Nothing is Cheaper than Proof of Work" http://www.truthcoin.info/blog/pow-cheapest/ http://www.truthcoin.info/blog/pow-cheapest/
- xyzzyz 9y ago
  If there's nothing cheaper solution to cryptocurrency than proof of work, it seems to me that we just have to ban cryptocurrency altogether at the legislature level.
  - jstanley 9y ago
    If you ban it in your country, your country will fall behind. Cryptocurrency is backed entirely by free market incentives. You can fight the market if you want, but you will lose.
    - dogecoinbase 9y ago
      Countries won't ban it -- countries love it. It's perfectly traceable non-anonymous currency. What they'll do is centralize it so they get the citizen-control benefits (and, of course, the ability to create and destroy it -- imagine EO6102 where they can remotely seize your gold!) without the unsustainable energy expenditure.
  - devrandomguy 9y ago
    Or, you could fund nuclear fusion research. That has better odds of success.
- andrewstuart2 9y ago
  Centralized authority. With the obvious tradeoffs. :-/ Maybe there's a happy medium where trustworthiness of central authorities is appropriately distributed, but common operations are quicker and less wasteful.
  - DINKDINK 9y ago
    >Centralized authority. Centralized authority isn't cheaper. It trades proof of work for violence or denial of liberty.
    - meepmorp 9y ago
      >(energy-wise) Correct or not, your point is orthogonal to the issue mentioned.
  - lordnacho 9y ago
    The happy medium has been found already. Would people trust Visa and MasterCard if they allowed double spending? I'm guessing not. So by virtue of having a very large investment in their corporate brands, the old economy already came up with a solution to the trust problem. Heck, everywhere you look there's a solution to the trust problem; it's fundamental to human interactions. - There are courts. If you try to screw me, I can drag you into one. Nothing's perfect and there's probably a minimum amount I'd not bother Judge Judy for, but it's a solution a LOT of people rely on. And I can tack all sorts of things on to this like warranties and insurances. - Brands. Look, we burn all this money on getting sports stars to pose for pictures. And there's reviews of our product in papers. If we did something stupid, you'd know. Again, it ain't perfect. - Escrow. Don't trust me? Trust this guy.
    - andrewstuart2 9y ago
      True, and funny too how technology "disrupts" only to eventually repeat history. What has been will be again, what has been done will be done again; there is nothing new under the sun.
  - runeks 9y ago
- srdev 9y ago
  You're assuming that a global system must be trustless. This is not really a requirement. Heck, in most cases its not even desirable.
- jethro_tell 9y ago
  It's funny that proof of work still doesn't seem to protect from people loosing 31MM a while ago, or the Mt.Gox hack. I can't remember the last time my bank fucked up like that. That problem may be more solved then we are letting on. I know, I know, fuck the man.
jimktrains2 9y ago
> Proof-of-work is simply not sustainable (energy-wise), IMO, for the foundation of a global system. Visa, MasterCard, AmEX, &c along with each individual bank, not to mention the intermediaries and gateways all of them use also consume a tremendous amount of power. It's not as if our current system uses a negligible amount of power, not to mention the number of steps and entities a transaction needs in order to be finalized.
- root_axis 9y ago
  So what? That's a totally meaningless comparison because the ubiquity of cryptocurrencies would not obviate the need for financial services. Besides, market forces incentivize businesses to use as little power as possible because it costs them money, PoW incentivizes miners to use as much power as possible because that is a necessary requirement for increasing hash output.
  - jimktrains2 9y ago
    > So what? That's a totally meaningless comparison because the ubiquity of cryptocurrencies would not obviate the need for financial services. The person I replied to compalined about "wasting" power to run the bitcoin network. It's only a valid comparison when compared against current usage, as our current system also "wastes" power to run the current system. > PoW incentivizes miners to use as much power as possible because that is a necessary requirement for increasing hash output. It also incentives them to get the most performance per Watt. I'm just saying it's meaningless to complain that bitcoin uses power, it only matters how it compares to the current system.
    - root_axis 9y ago
      > It's only a valid comparison when compared against current usage, as our current system also "wastes" power to run the current system. No, even if "the current system" was an apt comparison, there is still a fundamental difference between PoW and everything else. The power consumed in the process of facilitating a bank or any type of business is incidental to the useful work being performed. Power is burned so there are lights for people to see, power is burned so computers can perform calculations so that employees can get their jobs done faster, power is burned so that people can go back home after their shift is over; all this is incidental, the power is expended to make the business process more efficient, but the business could still run (though much less efficiently) without spending power on lights, computers and transportation. On the other hand, PoW is literally a waste of work because the nature of the work itself does not matter, the only thing that matters is that the unbounded cost of wasting energy keeps everyone honest. > I'm just saying it's meaningless to complain that bitcoin uses power, it only matters how it compares to the current system. The comparison is meaningless because "the current system" continues to exist regardless of any developments in bitcoin, if anything ubiquitous bitcoin would almost certainly increase the power impact of the finance industry.
Retric 9y ago
IMO, the core problem is if you want a global transaction system to become popular it needs to process and store ~TB / day of new transactions. Which means you quickly get into EB territory for the full database which is not something distributed systems can really handle without scaling issues. Now if you want a system used by 0.01% of the global population then that's a very different problem, but far less useful.
- wyager 9y ago
  Look up "Lightning Network". This is a solved problem. You can build on top of bitcoin to scale basically as large as you want, trustlessly. The software is being developed as we speak.
  - devrandomguy 9y ago
    I sense incoming downvotes, it would be great if we could get a link to an existing rebuttal, or something. Stomping on someone's dream just so you don't have to risk disappointment holds us all back. What are the limits of the Lightning network?
    - runeks 9y ago
      The challenge for the Lightning Network is cheaply routing payments from consumers to merchants. LN is optimized for anyone-to-anyone payments, while in a real economy money moves from consumer to merchant to producer to worker (consumer). LN is not optimized for this circular pattern, where many consumers pay a single merchant. Also, everything is done via two-way payment channels in LN, which means that you need to lock X BTC in a channel in order to send it, which becomes very capital intensive for nodes close to merchants who need to lock millions of dollars worth of bitcoins to cover merchants’ monthly turnover (this is in addition to the BTC locked up by other nodes who participate in the transfer but are not directly connected to merchants). If you want to send 0.1 BTC through 10 nodes, each of these 10 nodes must have locked up 0.1 BTC on the blockchain, and you’ll pay blockchain fees if just a single channel/node in your path doesn’t have at least as much as you need to send. A proper payment network needs two different types of nodes: senders and receivers. Using a single type of node for both doesn’t make much sense, since merchants and consumers have completely different needs. Senders need to be able to send relatively small amounts relatively frequently (a consumer making a few purchases per day), while receivers (merchants) need to redeem relatively large amounts (e.g. one week’s worth of payments) relatively rarely for bitcoins (on the blockchain).
wyager 9y ago
Using bidirectional off-chain payment channels, you can build trustless payment networks that use Bitcoin as a backend (see "lightning network"). It's almost as good as normal bitcoin, and it's much faster and cheaper. This is perhaps what most transactions will end up using.
runeks 9y ago
> Proof-of-work is simply not sustainable (energy-wise), IMO, for the foundation of a global system. The stability of whole ecosystems is predicated upon those ecosystems being attractive to people who want to make money by competing to solve hard problems by brute force. What do you mean by this, exactly? Bitcoin miners look more than willing to earn money on brute forcing hard problems. The point of proof-of-work is that it shouldn’t matter what anyone thinks about it. It’s basically impossible to ban (anyone can do a SHA256 calculation), and the difficulty automatically adjusts. In addition to this, the block reward — currently 12.5 BTC per block — halves every ~4 years, so less and less electricity will be consumed until only transaction fees provide capital for proof-of-work[1]. [1] http://www.bitcoinnotbombs.com/wp-content/uploads/2014/06/37-expansion.png http://www.bitcoinnotbombs.com/wp-content/uploads/2014/06/37...
- andrewstuart2 9y ago
  I mean that to stay stable and grow in popularity, bitcoin must sustain ever-increasing energy demands so that nobody has a majority and can start double-spending. The whole goal with variable difficulty is to counteract the ebb/flow in popularity and ensure that the work takes ~10 minutes. This ensures that as the popularity grows, more energy is required since it will always take 10 minutes for a new block, regardless of how many contributors are involved. Furthermore, the miners are here for the direct mining rewards. I think the future transaction fees approach will be significantly less attractive, so I'll be very interested to see how that change plays out once the era of rewarded mining is over.
- rocky1138 9y ago
  The difficulty you mentioned only applies to certain currencies. Ethereum, for example, has a built-in "difficulty bomb" set for later this year to make hashing essentially unworkable.
sharemywin 9y ago
Once most of the coins are mined doesn't bitcoin basically become a global settlement network for other crypto currencies. Although ethereum might do that easier.

DINKDINK 9y ago

>Proof-of-work is simply not sustainable (energy-wise), IMO, for the foundation of a global system. What have you found that is cheaper to proof-of-work that works on a global system?[1] [1] "Nothing is Cheaper than Proof of Work" http://www.truthcoin.info/blog/pow-cheapest/ http://www.truthcoin.info/blog/pow-cheapest/

xyzzyz 9y ago
If there's nothing cheaper solution to cryptocurrency than proof of work, it seems to me that we just have to ban cryptocurrency altogether at the legislature level.
- jstanley 9y ago
  If you ban it in your country, your country will fall behind. Cryptocurrency is backed entirely by free market incentives. You can fight the market if you want, but you will lose.
  - dogecoinbase 9y ago
    Countries won't ban it -- countries love it. It's perfectly traceable non-anonymous currency. What they'll do is centralize it so they get the citizen-control benefits (and, of course, the ability to create and destroy it -- imagine EO6102 where they can remotely seize your gold!) without the unsustainable energy expenditure.
- devrandomguy 9y ago
  Or, you could fund nuclear fusion research. That has better odds of success.
andrewstuart2 9y ago
Centralized authority. With the obvious tradeoffs. :-/ Maybe there's a happy medium where trustworthiness of central authorities is appropriately distributed, but common operations are quicker and less wasteful.
- DINKDINK 9y ago
  >Centralized authority. Centralized authority isn't cheaper. It trades proof of work for violence or denial of liberty.
  - meepmorp 9y ago
    >(energy-wise) Correct or not, your point is orthogonal to the issue mentioned.
- lordnacho 9y ago
  The happy medium has been found already. Would people trust Visa and MasterCard if they allowed double spending? I'm guessing not. So by virtue of having a very large investment in their corporate brands, the old economy already came up with a solution to the trust problem. Heck, everywhere you look there's a solution to the trust problem; it's fundamental to human interactions. - There are courts. If you try to screw me, I can drag you into one. Nothing's perfect and there's probably a minimum amount I'd not bother Judge Judy for, but it's a solution a LOT of people rely on. And I can tack all sorts of things on to this like warranties and insurances. - Brands. Look, we burn all this money on getting sports stars to pose for pictures. And there's reviews of our product in papers. If we did something stupid, you'd know. Again, it ain't perfect. - Escrow. Don't trust me? Trust this guy.
  - andrewstuart2 9y ago
    True, and funny too how technology "disrupts" only to eventually repeat history. What has been will be again, what has been done will be done again; there is nothing new under the sun.
- runeks 9y ago
srdev 9y ago
You're assuming that a global system must be trustless. This is not really a requirement. Heck, in most cases its not even desirable.
jethro_tell 9y ago
It's funny that proof of work still doesn't seem to protect from people loosing 31MM a while ago, or the Mt.Gox hack. I can't remember the last time my bank fucked up like that. That problem may be more solved then we are letting on. I know, I know, fuck the man.

jimktrains2 9y ago

> Proof-of-work is simply not sustainable (energy-wise), IMO, for the foundation of a global system. Visa, MasterCard, AmEX, &c along with each individual bank, not to mention the intermediaries and gateways all of them use also consume a tremendous amount of power. It's not as if our current system uses a negligible amount of power, not to mention the number of steps and entities a transaction needs in order to be finalized.

root_axis 9y ago
So what? That's a totally meaningless comparison because the ubiquity of cryptocurrencies would not obviate the need for financial services. Besides, market forces incentivize businesses to use as little power as possible because it costs them money, PoW incentivizes miners to use as much power as possible because that is a necessary requirement for increasing hash output.
- jimktrains2 9y ago
  > So what? That's a totally meaningless comparison because the ubiquity of cryptocurrencies would not obviate the need for financial services. The person I replied to compalined about "wasting" power to run the bitcoin network. It's only a valid comparison when compared against current usage, as our current system also "wastes" power to run the current system. > PoW incentivizes miners to use as much power as possible because that is a necessary requirement for increasing hash output. It also incentives them to get the most performance per Watt. I'm just saying it's meaningless to complain that bitcoin uses power, it only matters how it compares to the current system.
  - root_axis 9y ago
    > It's only a valid comparison when compared against current usage, as our current system also "wastes" power to run the current system. No, even if "the current system" was an apt comparison, there is still a fundamental difference between PoW and everything else. The power consumed in the process of facilitating a bank or any type of business is incidental to the useful work being performed. Power is burned so there are lights for people to see, power is burned so computers can perform calculations so that employees can get their jobs done faster, power is burned so that people can go back home after their shift is over; all this is incidental, the power is expended to make the business process more efficient, but the business could still run (though much less efficiently) without spending power on lights, computers and transportation. On the other hand, PoW is literally a waste of work because the nature of the work itself does not matter, the only thing that matters is that the unbounded cost of wasting energy keeps everyone honest. > I'm just saying it's meaningless to complain that bitcoin uses power, it only matters how it compares to the current system. The comparison is meaningless because "the current system" continues to exist regardless of any developments in bitcoin, if anything ubiquitous bitcoin would almost certainly increase the power impact of the finance industry.

Retric 9y ago

IMO, the core problem is if you want a global transaction system to become popular it needs to process and store ~TB / day of new transactions. Which means you quickly get into EB territory for the full database which is not something distributed systems can really handle without scaling issues. Now if you want a system used by 0.01% of the global population then that's a very different problem, but far less useful.

wyager 9y ago
Look up "Lightning Network". This is a solved problem. You can build on top of bitcoin to scale basically as large as you want, trustlessly. The software is being developed as we speak.
- devrandomguy 9y ago
  I sense incoming downvotes, it would be great if we could get a link to an existing rebuttal, or something. Stomping on someone's dream just so you don't have to risk disappointment holds us all back. What are the limits of the Lightning network?
  - runeks 9y ago
    The challenge for the Lightning Network is cheaply routing payments from consumers to merchants. LN is optimized for anyone-to-anyone payments, while in a real economy money moves from consumer to merchant to producer to worker (consumer). LN is not optimized for this circular pattern, where many consumers pay a single merchant. Also, everything is done via two-way payment channels in LN, which means that you need to lock X BTC in a channel in order to send it, which becomes very capital intensive for nodes close to merchants who need to lock millions of dollars worth of bitcoins to cover merchants’ monthly turnover (this is in addition to the BTC locked up by other nodes who participate in the transfer but are not directly connected to merchants). If you want to send 0.1 BTC through 10 nodes, each of these 10 nodes must have locked up 0.1 BTC on the blockchain, and you’ll pay blockchain fees if just a single channel/node in your path doesn’t have at least as much as you need to send. A proper payment network needs two different types of nodes: senders and receivers. Using a single type of node for both doesn’t make much sense, since merchants and consumers have completely different needs. Senders need to be able to send relatively small amounts relatively frequently (a consumer making a few purchases per day), while receivers (merchants) need to redeem relatively large amounts (e.g. one week’s worth of payments) relatively rarely for bitcoins (on the blockchain).

wyager 9y ago

Using bidirectional off-chain payment channels, you can build trustless payment networks that use Bitcoin as a backend (see "lightning network"). It's almost as good as normal bitcoin, and it's much faster and cheaper. This is perhaps what most transactions will end up using.

runeks 9y ago

> Proof-of-work is simply not sustainable (energy-wise), IMO, for the foundation of a global system. The stability of whole ecosystems is predicated upon those ecosystems being attractive to people who want to make money by competing to solve hard problems by brute force. What do you mean by this, exactly? Bitcoin miners look more than willing to earn money on brute forcing hard problems. The point of proof-of-work is that it shouldn’t matter what anyone thinks about it. It’s basically impossible to ban (anyone can do a SHA256 calculation), and the difficulty automatically adjusts. In addition to this, the block reward — currently 12.5 BTC per block — halves every ~4 years, so less and less electricity will be consumed until only transaction fees provide capital for proof-of-work[1]. [1] http://www.bitcoinnotbombs.com/wp-content/uploads/2014/06/37-expansion.png http://www.bitcoinnotbombs.com/wp-content/uploads/2014/06/37...

andrewstuart2 9y ago
I mean that to stay stable and grow in popularity, bitcoin must sustain ever-increasing energy demands so that nobody has a majority and can start double-spending. The whole goal with variable difficulty is to counteract the ebb/flow in popularity and ensure that the work takes ~10 minutes. This ensures that as the popularity grows, more energy is required since it will always take 10 minutes for a new block, regardless of how many contributors are involved. Furthermore, the miners are here for the direct mining rewards. I think the future transaction fees approach will be significantly less attractive, so I'll be very interested to see how that change plays out once the era of rewarded mining is over.
rocky1138 9y ago
The difficulty you mentioned only applies to certain currencies. Ethereum, for example, has a built-in "difficulty bomb" set for later this year to make hashing essentially unworkable.

sharemywin 9y ago

Once most of the coins are mined doesn't bitcoin basically become a global settlement network for other crypto currencies. Although ethereum might do that easier.