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>> Every time a block is validated, a single node in the network gets a reward, and everyone else’s computing time is completely wasted. >This is a misundersta

>> Every time a block is validated, a single node in the network gets a reward, and everyone else’s computing time is completely wasted. >This is a misunderstanding of what PoW is http://www.truthcoin.info/blog/pow-cheapest/ http://www.truthcoin.info/blog/pow-cheapest/ Honest question: I tried to find the problem with that view in the link you provided, but couldn't. Can you explain it to others who may share the same belief? I think that's what the Bitcoin white paper describes, but could be mistaken.

VMG 9y ago
You need opportunity cost in order to secure the network. Without that, there is no incentive to keep the network secure. There is no cheaper solution to solve this problem, therefore there is no waste.
- alex_young 9y ago
  Are claiming that the Bitcoin solution is the ideal solution to distributed trust? I don't know that that is not the case, but it seems unlikely that the first working solution was the best one doesn't it?
  - Klathmon 9y ago
    I doubt it's the "ideal" solution, but I do feel it's the "best" we currently have. You also need to remember that bitcoin is upgradable. If in the future we find better ways of doing distributed trust, and we can prove it, that doesn't mean that bitcoin is done and gone. If the vast majority of the users of bitcoin believe a change to whatever other "distributed trust" system that is better, the network can be upgraded to take advantage of it.
- smogcutter 9y ago
  "Bitcoin is inherently wasteful, therefore it's not wasteful." What?
  - spookthesunset 9y ago
    Welcome to Bitcoin advocate logic. Clearly using more energy than a moderate sized european country in order to process 3 or 4 transactions per second isn't wasteful. Right? I mean in absolute numbers, says the bitcoin advocate, the fiat banking system has to use more, right?.... ....nevermind the fact they do something that is not driven by pure speculation and do it at thousands of times larger scales. Bitcoin -- the perfect intersection of people who don't understand finance, economics, computer science, scaling, politics, socio-economics, or math. PS: People only quote Bitcoin's energy use and often times they leave out things like air conditioning. Nobody seems to sum up the total energy required to power the entirety of the crypto "space" including Ethereum, Litecoin, etc.
    - wefwefwf2131234 9y ago
      Adam Smith warned of the division of labor creating blind, ignorant humans, in a conviction driven, not reason driven, society. Society is coasting on fumes of a generations long confirmation bias.
    - ratacat 9y ago
      Yes our financial system isn't based on speculation. Good one
  - borplk 9y ago
    Maybe people are defining waste differently (equating "high cost" with waste). What you may call waste is in a way the cost of the operation of the network (and its properties and guarantees and so on). Waste suggests that there is an easy, equivalent, much more efficient solution around the corner but no one cares and wastes resources instead when they could have been doing the same thing with fewer resources.
  - VMG 9y ago
    Waste is something that is unnecessary. Competing for PoW solution is critical. There is no waste. If you know a different way of solving the consensus problem, tell us.
- perl4ever 9y ago
  Is there a simple way to explain why trusting the developers of the software to manage the network is meaningfully different than trusting the Fed to manage the dollar? I mean, I understand (I think) that Bitcoin doesn't require a given node to trust another node. But what if there is a change to the software that trickles down to all the nodes without them realizing the consequences until it is too late? Either a bug or intentional subversion.
drdrey 9y ago
Probably not what OP meant, but mining pools are a way to address that. You team up with N other miners, and if one of them finds a solution then the reward is divided among the pool based on the work that was contributed
- Klathmon 9y ago
  Which is actually the exact same system as mining, but with a fractional difficulty. So instead of having to mine a block with a difficulty of 10 million, you are allowed to mine invalid "miniblocks" with a difficulty of 1 thousand. Then when someone in the pool happens to mine a block that is difficult enough to be valid globally, the mining pool software takes that reward and splits it proportionally among all users based on how many "miniblocks" they generated (with different pools doing different weighting).
  - alex_young 9y ago
    Isn't it a complexity optimization? In the broader system there is no coordination of attempts so multiple nodes 'waste' resources trying the same invalid solutions if I understand correctly.
    - Klathmon 9y ago
      Yes, but the number of possible "solutions" (valid or invalid) is so large that it's extremely unlikely that 2 people are getting the same invalid solutions (assuming the software is working correctly). so you don't need any coordination. And "extremely unlikely" doesn't quite get across the magnitude here. We are talking about the likelihood of 2 people generating the same SHA256 hash of what is basically an absurdly large random number. Trying to mine a block is basically just generating an SHA256 hash of (the previous block + a nonce) that has a given number of 0's on the front of it. (this is crazy oversimplified) The nubmer of zeros is basically the difficulty. So everyone starts off trying to generate a SHA256 hash of "ABCD" and a random number, that has at least 4 zeros on the front. So a mining pool is setup that says anyone that generates a SHA256 hash of the same thing with 1 or more zeros on the front gets a "share", and when anyone generates an SHA256 hash with 4 or more zeros on the front, the pool submits that share, then gives the profits to everyone that was able to generate "shares" based on how many they generated.
Franciscouzo 9y ago
No ones computing time is wasted, you don't do any progress while mining, you just have a one in 8481426187000000000 chances of finding a valid hash each time you generate a hash.
- deleted 9y ago
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- deleted 9y ago
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victorNicollet 9y ago
Everyone else's computing time is wasted, in the sense that all that electricity and processor time (both of which cost money) have not contributed even one bit to the blockchain. The point of the article (and I'm surprised that it takes them so long to explain it) is that regardless of the blockchain building process you choose, the entities responsible for adding blocks to the blockchain form a highly competitive market, and in these kinds of markets the costs grow very close to their expected income. For Bitcoin, those entities are the miners, and costs grow because if you don't buy the latest high-powered hash-nozzle, your neighbor will, and your expected revenue will drop. It's an arms race that only stops once the costs exceed the revenue, meaning that most of the revenue from each block dissipates into electricity and hardware, and the electricity and hardware that doesn't contribute to a block is waster. But even for a different blockchain model, designed to not waste anything, the same thing would happen: block-adders are incentivized to spend as much money as possible to increase their slice of the pie. In the end, the same amount of money (the revenue for a block) would still be spent in electricity, hardware, bespoke lava lamps or golf sessions with senators, anything that lets miners get one step ahead in the arms race. Of course, if you were to drive down transaction costs, the available revenue for each block would go down, and the amount of wealth that can be wasted would decrease as well.

VMG 9y ago

You need opportunity cost in order to secure the network. Without that, there is no incentive to keep the network secure. There is no cheaper solution to solve this problem, therefore there is no waste.

alex_young 9y ago
Are claiming that the Bitcoin solution is the ideal solution to distributed trust? I don't know that that is not the case, but it seems unlikely that the first working solution was the best one doesn't it?
- Klathmon 9y ago
  I doubt it's the "ideal" solution, but I do feel it's the "best" we currently have. You also need to remember that bitcoin is upgradable. If in the future we find better ways of doing distributed trust, and we can prove it, that doesn't mean that bitcoin is done and gone. If the vast majority of the users of bitcoin believe a change to whatever other "distributed trust" system that is better, the network can be upgraded to take advantage of it.
smogcutter 9y ago
"Bitcoin is inherently wasteful, therefore it's not wasteful." What?
- spookthesunset 9y ago
  Welcome to Bitcoin advocate logic. Clearly using more energy than a moderate sized european country in order to process 3 or 4 transactions per second isn't wasteful. Right? I mean in absolute numbers, says the bitcoin advocate, the fiat banking system has to use more, right?.... ....nevermind the fact they do something that is not driven by pure speculation and do it at thousands of times larger scales. Bitcoin -- the perfect intersection of people who don't understand finance, economics, computer science, scaling, politics, socio-economics, or math. PS: People only quote Bitcoin's energy use and often times they leave out things like air conditioning. Nobody seems to sum up the total energy required to power the entirety of the crypto "space" including Ethereum, Litecoin, etc.
  - wefwefwf2131234 9y ago
    Adam Smith warned of the division of labor creating blind, ignorant humans, in a conviction driven, not reason driven, society. Society is coasting on fumes of a generations long confirmation bias.
  - ratacat 9y ago
    Yes our financial system isn't based on speculation. Good one
- borplk 9y ago
  Maybe people are defining waste differently (equating "high cost" with waste). What you may call waste is in a way the cost of the operation of the network (and its properties and guarantees and so on). Waste suggests that there is an easy, equivalent, much more efficient solution around the corner but no one cares and wastes resources instead when they could have been doing the same thing with fewer resources.
- VMG 9y ago
  Waste is something that is unnecessary. Competing for PoW solution is critical. There is no waste. If you know a different way of solving the consensus problem, tell us.
perl4ever 9y ago
Is there a simple way to explain why trusting the developers of the software to manage the network is meaningfully different than trusting the Fed to manage the dollar? I mean, I understand (I think) that Bitcoin doesn't require a given node to trust another node. But what if there is a change to the software that trickles down to all the nodes without them realizing the consequences until it is too late? Either a bug or intentional subversion.

drdrey 9y ago

Probably not what OP meant, but mining pools are a way to address that. You team up with N other miners, and if one of them finds a solution then the reward is divided among the pool based on the work that was contributed

Klathmon 9y ago
Which is actually the exact same system as mining, but with a fractional difficulty. So instead of having to mine a block with a difficulty of 10 million, you are allowed to mine invalid "miniblocks" with a difficulty of 1 thousand. Then when someone in the pool happens to mine a block that is difficult enough to be valid globally, the mining pool software takes that reward and splits it proportionally among all users based on how many "miniblocks" they generated (with different pools doing different weighting).
- alex_young 9y ago
  Isn't it a complexity optimization? In the broader system there is no coordination of attempts so multiple nodes 'waste' resources trying the same invalid solutions if I understand correctly.
  - Klathmon 9y ago
    Yes, but the number of possible "solutions" (valid or invalid) is so large that it's extremely unlikely that 2 people are getting the same invalid solutions (assuming the software is working correctly). so you don't need any coordination. And "extremely unlikely" doesn't quite get across the magnitude here. We are talking about the likelihood of 2 people generating the same SHA256 hash of what is basically an absurdly large random number. Trying to mine a block is basically just generating an SHA256 hash of (the previous block + a nonce) that has a given number of 0's on the front of it. (this is crazy oversimplified) The nubmer of zeros is basically the difficulty. So everyone starts off trying to generate a SHA256 hash of "ABCD" and a random number, that has at least 4 zeros on the front. So a mining pool is setup that says anyone that generates a SHA256 hash of the same thing with 1 or more zeros on the front gets a "share", and when anyone generates an SHA256 hash with 4 or more zeros on the front, the pool submits that share, then gives the profits to everyone that was able to generate "shares" based on how many they generated.

Franciscouzo 9y ago

No ones computing time is wasted, you don't do any progress while mining, you just have a one in 8481426187000000000 chances of finding a valid hash each time you generate a hash.

deleted 9y ago
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deleted 9y ago
[deleted]

victorNicollet 9y ago

Everyone else's computing time is wasted, in the sense that all that electricity and processor time (both of which cost money) have not contributed even one bit to the blockchain. The point of the article (and I'm surprised that it takes them so long to explain it) is that regardless of the blockchain building process you choose, the entities responsible for adding blocks to the blockchain form a highly competitive market, and in these kinds of markets the costs grow very close to their expected income. For Bitcoin, those entities are the miners, and costs grow because if you don't buy the latest high-powered hash-nozzle, your neighbor will, and your expected revenue will drop. It's an arms race that only stops once the costs exceed the revenue, meaning that most of the revenue from each block dissipates into electricity and hardware, and the electricity and hardware that doesn't contribute to a block is waster. But even for a different blockchain model, designed to not waste anything, the same thing would happen: block-adders are incentivized to spend as much money as possible to increase their slice of the pie. In the end, the same amount of money (the revenue for a block) would still be spent in electricity, hardware, bespoke lava lamps or golf sessions with senators, anything that lets miners get one step ahead in the arms race. Of course, if you were to drive down transaction costs, the available revenue for each block would go down, and the amount of wealth that can be wasted would decrease as well.