4 ms·

What do you mean “the same in the grand scheme of things”? By what metric?

by slewis 9y ago

cocktailpeanuts 9y ago
Newton's 3rd law: Proof of Work and Proof of Stake both waste tons of energy, and of course, the entire economic system both of them are trying to replace also waste tons of energy. The problem is, Proof of Work is very objective and measurable, which is why most people criticize Bitcoin for its waste of energy since it's so easy to measure. But proof of stake and the legacy economic system both lack such objective measures, which is why it's hard to compare them. The term "stake" itself is subjective and doesn't take into account the economic ripple effect it can trigger as a result. And these ripple effects DO exist, it's just that most people are not aware of them and just take for granted. Which is why I think it's crucial that you study the history of money before you can confidently say you understand "how money works". This is not to say proof of stake won't work. It's just saying that there's a high chance that there's hidden cost to proof of stake which in the long run can map to the amount of energy wasted by proof of stake, which is backed by newton's 3rd law. You can't create energy. Everything that happens on earth is simply a transfer of limited amount of energy from the sun. If this sounds all woo-woo to you, that's why I suggest studying economics. I personally think the only way to overcome energy consumption is to come up with innovation that's as different from newtonian physics to quantum physics.
- goldenkey 9y ago
  PoW requires brute force. PoS requires tied up capital. Do you really think the energy usage is the same...physically? Sounds like nonsense with no backing.
  - cocktailpeanuts 9y ago
    Where do you think "capital" comes from? Also, I didn't say they ARE the same. It COULD be the same, or maybe PoS could come up with a tradeoff scheme that's just good enough to work but essentially conserves energy much more than PoW. But the thing about energy is when it is destroyed somewhere, it gets created elsewhere. That's how it simply works. The most important fallacy in economics is that people can only observe what they can observe, not because they're idiots, but because it is spacially or temporally impossible. For example a huge global inflation can happen as a result of a very small stupid decision made by a government, but this may happen 10 years after the original decision. This is why humans make bad decisions because they make decisions based on what is possible to observe, but historically these ALWAYS came back to haunt them. 100% of the time. It MAY be the case that "this time it's different", but the more you study economics the more you become really humble. Trust me. Try it. Just need to read a couple of books.
    - goldenkey 9y ago
      "need to read a couple of books." No. Just no. You are wrong about energy. Power plants do not just burn a steady state amount of fuel. You are also wrong about capital if that is the "energy" you misnamed - capital is created all the time, not debt but actual prosperity through innovation. Please refrain from your "read a book to be like me" humdrum. I am a mathematician - I know enough economics to be quizzically annoyed by the falsities spoken
      - cocktailpeanuts 9y ago
        suit yourself :)
        goldenkey 9y ago
        The human races net work output might be fixed - but through the spawned creations and mechanics - the work one does and thus the spawn they create, can be vastly consequential. Energy consumption is not fixed. Human work is fixed but when augmented by technokogy it is wildly divergent. There is a difference between using millions of watt hours for mining versus using it to create things that have a far longer shelf life..things like crops or PCs which will continue to provide further value. Bitcoin mining is short sighted.
    - aoeusnth1 9y ago
      The capital comes out of thin air - it's created when ETH goes up in value, or destroyed when ETH goes down in value. Also, unlike electricity, PoS has no negative externalities. PoW kills people with air pollution.
- mrep 9y ago
  > The problem is, Proof of Work is very objective and measurable, which is why most people criticize Bitcoin for its waste of energy since it's so easy to measure. > But proof of stake and the legacy economic system both lack such objective measures, which is why it's hard to compare them. Bitcoin is estimated to cost $2.5 Billion dollars per year [0] to validate about 77 million transactions per year. Visa processed about 100 billion transactions in 2015 at the cost of 12 billion dollars (revenue - net income [1]). That makes Visa 270 times more economically efficient for cost per transaction [2]. Also, I get many other benefits using Visa like fraud detection whereas bitcoins 1 way transactions make them extremely susceptible to hacks. The economics seem pretty obvious to me. [0]: https://digiconomist.net/bitcoin-energy-consumption https://digiconomist.net/bitcoin-energy-consumption [1]: https://en.wikipedia.org/wiki/Visa_Inc https://en.wikipedia.org/wiki/Visa_Inc [2]: (100/12)/(.077/2.5)
  - aianus 9y ago
    Visa may well spend only $0.10 on a $1000 transaction but given that the total cost to me is $30 (either directly, in the case of a foreign ATM withdrawal, or indirectly through merchant fees), there are many use cases where crypto is currently more economical from the consumer's point of view. If banks and payment processors were more competent (like maybe processing transactions on Sunday) and less greedy, crypto would be a lot more useless.
    - mrep 9y ago
      Most of those merchant fees are passed backed to the consumer through credit card incentive programs. Granted, Visa still makes a nice 33% profit margin but they also offer tons of other benefits which cryptocurrencies provide none of.
  - cocktailpeanuts 9y ago
    There needs to be a HN bot that just copy and pastes the same old stuff to comments like mine so people don't have to waste energy doing it over and over again. The fact that you're comparing Visa with Bitcoin is exactly my point: Humans make decisions based on the things they can immediately see and neglect things they can't see. That's what you're doing when you're comparing visa to bitcoin. I can't really explain this in a single HN comment, which is why I recommended studying economics. If this was so easy that I could explain it in a page nobody would need to read books or take classes.

What do you mean “the same in the grand scheme of things”? By what metric?

by slewis 9y ago

What do you mean “the same in the grand scheme of things”? By what metric?

Newton's 3rd law: Proof of Work and Proof of Stake both waste tons of energy, and of course, the entire economic system both of them are trying to replace also waste tons of energy. The problem is, Proof of Work is very objective and measurable, which is why most people criticize Bitcoin for its waste of energy since it's so easy to measure. But proof of stake and the legacy economic system both lack such objective measures, which is why it's hard to compare them. The term "stake" itself is subjective and doesn't take into account the economic ripple effect it can trigger as a result. And these ripple effects DO exist, it's just that most people are not aware of them and just take for granted. Which is why I think it's crucial that you study the history of money before you can confidently say you understand "how money works". This is not to say proof of stake won't work. It's just saying that there's a high chance that there's hidden cost to proof of stake which in the long run can map to the amount of energy wasted by proof of stake, which is backed by newton's 3rd law. You can't create energy. Everything that happens on earth is simply a transfer of limited amount of energy from the sun. If this sounds all woo-woo to you, that's why I suggest studying economics. I personally think the only way to overcome energy consumption is to come up with innovation that's as different from newtonian physics to quantum physics.

goldenkey 9y ago
PoW requires brute force. PoS requires tied up capital. Do you really think the energy usage is the same...physically? Sounds like nonsense with no backing.
- cocktailpeanuts 9y ago
  Where do you think "capital" comes from? Also, I didn't say they ARE the same. It COULD be the same, or maybe PoS could come up with a tradeoff scheme that's just good enough to work but essentially conserves energy much more than PoW. But the thing about energy is when it is destroyed somewhere, it gets created elsewhere. That's how it simply works. The most important fallacy in economics is that people can only observe what they can observe, not because they're idiots, but because it is spacially or temporally impossible. For example a huge global inflation can happen as a result of a very small stupid decision made by a government, but this may happen 10 years after the original decision. This is why humans make bad decisions because they make decisions based on what is possible to observe, but historically these ALWAYS came back to haunt them. 100% of the time. It MAY be the case that "this time it's different", but the more you study economics the more you become really humble. Trust me. Try it. Just need to read a couple of books.
  - goldenkey 9y ago
    "need to read a couple of books." No. Just no. You are wrong about energy. Power plants do not just burn a steady state amount of fuel. You are also wrong about capital if that is the "energy" you misnamed - capital is created all the time, not debt but actual prosperity through innovation. Please refrain from your "read a book to be like me" humdrum. I am a mathematician - I know enough economics to be quizzically annoyed by the falsities spoken
    - cocktailpeanuts 9y ago
      suit yourself :)
      - goldenkey 9y ago
        The human races net work output might be fixed - but through the spawned creations and mechanics - the work one does and thus the spawn they create, can be vastly consequential. Energy consumption is not fixed. Human work is fixed but when augmented by technokogy it is wildly divergent. There is a difference between using millions of watt hours for mining versus using it to create things that have a far longer shelf life..things like crops or PCs which will continue to provide further value. Bitcoin mining is short sighted.
  - aoeusnth1 9y ago
    The capital comes out of thin air - it's created when ETH goes up in value, or destroyed when ETH goes down in value. Also, unlike electricity, PoS has no negative externalities. PoW kills people with air pollution.
mrep 9y ago
> The problem is, Proof of Work is very objective and measurable, which is why most people criticize Bitcoin for its waste of energy since it's so easy to measure. > But proof of stake and the legacy economic system both lack such objective measures, which is why it's hard to compare them. Bitcoin is estimated to cost $2.5 Billion dollars per year [0] to validate about 77 million transactions per year. Visa processed about 100 billion transactions in 2015 at the cost of 12 billion dollars (revenue - net income [1]). That makes Visa 270 times more economically efficient for cost per transaction [2]. Also, I get many other benefits using Visa like fraud detection whereas bitcoins 1 way transactions make them extremely susceptible to hacks. The economics seem pretty obvious to me. [0]: https://digiconomist.net/bitcoin-energy-consumption https://digiconomist.net/bitcoin-energy-consumption [1]: https://en.wikipedia.org/wiki/Visa_Inc https://en.wikipedia.org/wiki/Visa_Inc [2]: (100/12)/(.077/2.5)
- aianus 9y ago
  Visa may well spend only $0.10 on a $1000 transaction but given that the total cost to me is $30 (either directly, in the case of a foreign ATM withdrawal, or indirectly through merchant fees), there are many use cases where crypto is currently more economical from the consumer's point of view. If banks and payment processors were more competent (like maybe processing transactions on Sunday) and less greedy, crypto would be a lot more useless.
  - mrep 9y ago
    Most of those merchant fees are passed backed to the consumer through credit card incentive programs. Granted, Visa still makes a nice 33% profit margin but they also offer tons of other benefits which cryptocurrencies provide none of.
- cocktailpeanuts 9y ago
  There needs to be a HN bot that just copy and pastes the same old stuff to comments like mine so people don't have to waste energy doing it over and over again. The fact that you're comparing Visa with Bitcoin is exactly my point: Humans make decisions based on the things they can immediately see and neglect things they can't see. That's what you're doing when you're comparing visa to bitcoin. I can't really explain this in a single HN comment, which is why I recommended studying economics. If this was so easy that I could explain it in a page nobody would need to read books or take classes.