5 ms·

It's not a waste. Each miner is expending resources in order to get something valuable. (Bitcoin.) They will continue to do so until the value of the resources

It's not a waste. Each miner is expending resources in order to get something valuable. (Bitcoin.) They will continue to do so until the value of the resources they're expending is higher than the value of what they're receiving in return. You don't get to decide what's wasteful and what isn't; each person decides that for themselves. That's just how economics works.

asfgionio 9y ago
>That's just how economics works. I find it interesting that people who talk about how things are "simple economics" very rarely understand economics. The economic definition of "efficiency" is not just "everyone doing whatever they want."
- shitgoose 9y ago
  1. Parent is not talking about "efficiency", but about "waste". 2. Please, provide your economic definition of "waste", which contradicts parent.
- Ajedi32 9y ago
  I don't think the people claiming that Bitcoin mining as a waste are using the economic definition of "efficiency" either. They just see Bitcoin as worthless, and therefore consider Bitcoin mining to be expending energy for nothing. That's very obviously wrong though, as I've just explained. People mining Bitcoin are doing so out of their own self-interest. If Bitcoin were not valuable enough to overcome the cost of mining it, they wouldn't be mining in the first place. Whether or not there's a more "efficient" way of doing things is irrelevant to this point.
  - root_axis 9y ago
    Bitcoin is fundamentally wasteful because the energy expended to facilitate a transaction is a function of the network's size rather than the number of transactions that need to be processed, it's hard to think of a less efficient system.
    - Ajedi32 9y ago
      Again, that's irrelevant to my point. But, for the sake of argument: less efficient compared to what? Prior to Bitcoin, there weren't any other transaction mediums that offered the same capabilities and security properties that Bitcoin does. Every technology has advantages and costs associated with it. You can't consider the costs in isolation and use that to claim the entire technology is a waste.
      - root_axis 9y ago
        > Again, that's irrelevant to my point. I disagree that it's irrelevant. > They just see Bitcoin as worthless, and therefore consider Bitcoin mining to be expending energy for nothing. No, to reiterate, they see bitcoin mining as inherently wasteful because energy is burned without regard for useful work done. A centralized system can process multiple orders of magnitude more transactions than a PoW based one where more energy is only needed when more useful work (transactions) needs to be performed. > less efficient compared to what? To every other system for processing transactions that is not based on PoW, for example, the centralized banking system. Yes, I understand that those systems don't have all the same capabilities that a PoW system does, but the incumbent systems already work well without whatever added capabilities a PoW system provides and is also incidentally much more secure in practice compared to PoW based systems.
        Ajedi32 9y ago
        Apples to oranges. The existence of traditional banking systems does not negate the demand for alternative systems with properties that traditional banking is incapable of providing. You're, of course, free to ignore Bitcoin if those properties don't appeal to you. But the fact that you don't see value in them doesn't change the fact that others do, and if those people choose to expend their resources maintaining that system then that's, frankly, none of your business. If the cost of maintaining the system reaches a point where it outweighs the value it generates, then and only then will people choose to stop expending their resources to maintain it. That's why your concerns about efficiency are irrelevant to my point; no matter how inefficient _you_ might think the system is, it's obviously still generating enough value to sustain itself otherwise it would cease to exist.

asfgionio 9y ago

>That's just how economics works. I find it interesting that people who talk about how things are "simple economics" very rarely understand economics. The economic definition of "efficiency" is not just "everyone doing whatever they want."

shitgoose 9y ago
1. Parent is not talking about "efficiency", but about "waste". 2. Please, provide your economic definition of "waste", which contradicts parent.
Ajedi32 9y ago
I don't think the people claiming that Bitcoin mining as a waste are using the economic definition of "efficiency" either. They just see Bitcoin as worthless, and therefore consider Bitcoin mining to be expending energy for nothing. That's very obviously wrong though, as I've just explained. People mining Bitcoin are doing so out of their own self-interest. If Bitcoin were not valuable enough to overcome the cost of mining it, they wouldn't be mining in the first place. Whether or not there's a more "efficient" way of doing things is irrelevant to this point.
- root_axis 9y ago
  Bitcoin is fundamentally wasteful because the energy expended to facilitate a transaction is a function of the network's size rather than the number of transactions that need to be processed, it's hard to think of a less efficient system.
  - Ajedi32 9y ago
    Again, that's irrelevant to my point. But, for the sake of argument: less efficient compared to what? Prior to Bitcoin, there weren't any other transaction mediums that offered the same capabilities and security properties that Bitcoin does. Every technology has advantages and costs associated with it. You can't consider the costs in isolation and use that to claim the entire technology is a waste.
    - root_axis 9y ago
      > Again, that's irrelevant to my point. I disagree that it's irrelevant. > They just see Bitcoin as worthless, and therefore consider Bitcoin mining to be expending energy for nothing. No, to reiterate, they see bitcoin mining as inherently wasteful because energy is burned without regard for useful work done. A centralized system can process multiple orders of magnitude more transactions than a PoW based one where more energy is only needed when more useful work (transactions) needs to be performed. > less efficient compared to what? To every other system for processing transactions that is not based on PoW, for example, the centralized banking system. Yes, I understand that those systems don't have all the same capabilities that a PoW system does, but the incumbent systems already work well without whatever added capabilities a PoW system provides and is also incidentally much more secure in practice compared to PoW based systems.
      - Ajedi32 9y ago
        Apples to oranges. The existence of traditional banking systems does not negate the demand for alternative systems with properties that traditional banking is incapable of providing. You're, of course, free to ignore Bitcoin if those properties don't appeal to you. But the fact that you don't see value in them doesn't change the fact that others do, and if those people choose to expend their resources maintaining that system then that's, frankly, none of your business. If the cost of maintaining the system reaches a point where it outweighs the value it generates, then and only then will people choose to stop expending their resources to maintain it. That's why your concerns about efficiency are irrelevant to my point; no matter how inefficient _you_ might think the system is, it's obviously still generating enough value to sustain itself otherwise it would cease to exist.