5 ms·

>> Proof of work is about consensus among mutually distrusting parties. It has approximately nothing to do with entropy. Think more abstractly - at the end of

>> Proof of work is about consensus among mutually distrusting parties. It has approximately nothing to do with entropy. Think more abstractly - at the end of the day, Energy is being consumed to compute some problem. That solution has intrinsic value precisely because it took energy to solve it. Extrinsic value is the market economy of CC, and that's where the 'proof of work' and 'consensus amongst distrusting parties' comes into play - that concept of a currency is only valuable if sufficient number of parties agree to its value. I am weeding into the underlying fabric that holds Crytocurrency together. Imagine if Energy was free, despite of 'consensus', the supply of such currency would be virtually unlimited and it would be worthless.

Armisael16 9y ago
None of that makes entropy any more relevant.
inimino 9y ago
Energy is consumed and that is why there is a cost. I'm not sure there is any such thing as "intrinsic value", but there is a cost. Because of that cost, the larger system works, because that is how the system keeps itself honest, by making it expensive to lie. But there are other ways to have an honest system that don't involve wasting energy, so there's no direct connection between the energy that's wasted and any value the system has. If energy was free, silicon would be more expensive, mining difficulty would go up, and bitcoin would still "work" just like it does today.
TeMPOraL 9y ago
> Imagine if Energy was free, despite of 'consensus', the supply of such currency would be virtually unlimited and it would be worthless. They would just ramp up the network difficulty. Soon mining would be counted in exhausted stars per second. Cryptocurrencies are the perfect example of the maxim that "just because you can, doesn't mean you should". They're funny in theory, proof of work being an interesting solution to a particular mathematical problem. In the real world, with problems determined by laws of physics and (in consequence) the structure of human minds, this is about the worst imaginable way to run the economy. The constraints of the problem solved by cryptocurrencies are not very meaningful in reality.

Armisael16 9y ago

None of that makes entropy any more relevant.

inimino 9y ago

Energy is consumed and that is why there is a cost. I'm not sure there is any such thing as "intrinsic value", but there is a cost. Because of that cost, the larger system works, because that is how the system keeps itself honest, by making it expensive to lie. But there are other ways to have an honest system that don't involve wasting energy, so there's no direct connection between the energy that's wasted and any value the system has. If energy was free, silicon would be more expensive, mining difficulty would go up, and bitcoin would still "work" just like it does today.

TeMPOraL 9y ago

> Imagine if Energy was free, despite of 'consensus', the supply of such currency would be virtually unlimited and it would be worthless. They would just ramp up the network difficulty. Soon mining would be counted in exhausted stars per second. Cryptocurrencies are the perfect example of the maxim that "just because you can, doesn't mean you should". They're funny in theory, proof of work being an interesting solution to a particular mathematical problem. In the real world, with problems determined by laws of physics and (in consequence) the structure of human minds, this is about the worst imaginable way to run the economy. The constraints of the problem solved by cryptocurrencies are not very meaningful in reality.