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Crypto currencies are worthless unless they have an enormous amount of hashing power behind them. We could really do with a webpage with a list of crypto curre

• madeofpalk 8y ago
  there is http://arewedecentralizedyet.com http://arewedecentralizedyet.com
  • mike-cardwell 8y ago
    Whilst that's an interesting page, it lacks the most important part of my request: "and how much it would cost somebody to take over 50% of the network"
• drexlspivey 8y ago
  Maybe all that energy spent to secure the chain is not so bad after all.
  • jacquesc 8y ago
    So it's not a complete waste of natural resources because it helps secure "the chain"?
    • gowld 8y ago
      Is it a complete waste of natural resources to lock a bank vault door, or run a network firewall?
      • Smaug123 8y ago
        Those are both activities which use up trivial quantities of those natural resources. Bitcoin uses up nontrivial quantities of electricity.
        • drb91 8y ago
          There's a hidden cost of trust there, though, which vanishes with bitcoin (or at least reduces its cost). Maybe the value of bitcoin is more apparent from the perspective of venezuela at the moment, where the risk involved with traditional banks, currency, and security is more apparent. I am emphatically not taking a stance on which I prefer here, I might add, just pointing out that there are more variables here than you're acknowledging.
          • gamblor956 8y ago
            Bitcoin and other cryptocurrencies require even more trust than normal currency. With a normal currency transaction, you need only trust at most 2 other entities entities: your counterpart to the transaction and the government issuing the currency. With a blockchain, you still need to trust the counterparty, but now you also need to trust that the coders have properly designed and programmed the system, and that the miners either don't have the power to corrupt the system or aren't corrupt, and you need to trust whatever exchange you use to get into and out of the cryptocurrency. Plus, you've added in a significant amount of time--at a minimum 20x the time with Bitcoin and significant transaction fees that as a practical matter have exceeded card interchange fees by 2x or more for the past 3 years straight. Your right about their being more variables...with cryptocurrency.
            • drb91 8y ago
              I think there are fundamentally different ways we're talking about trust: you "only" need to trust a government, you "only" need to trust a bank, vs trusting a certain proportion of miners to be following the same bitcoin specs you are, as well as trusting that people will value it tomorrow. Both of bitcoin and government-issued currency requires trust, and building that trust is fundamentally difficult, depending on your needs, and comes with tradeoffs. It seems like you're only acknowledging one end of these tradeoffs. One obvious tradeoff you're not considering is that of a criminal getting its assets frozen, for instance. There are less black and white situations where you might prefer bitcoin as well, if you have a little imagination. If you could address that, I'd probably appreciate your comments more.
      • GW150914 8y ago
        If locking it or running the firewall required energy waste on the order of bitcoin they would. Fortunately both have been designed with minimizing energy use in mind, rather than wastefully maximizing it.
      • deleted 8y ago
        [deleted]
    • cachvico 8y ago
      Exactly. We should stop using the word "waste" to describe the energy consumption of the Bitcoin miners. It's not waste if it serves a purpose. The service it provides is to guarantee the integrity of the blockchain without the requirement of a central authority.
      • s73v3r_ 8y ago
        "It's not waste if it serves a purpose. " It's an open question as if it actually does serve a purpose, though.
      • tgb 8y ago
        It's wasting if it's using more than the alternatives and it is using more than the alternatives.
      • spookthesunset 8y ago
        > We should stop using the word "waste" to describe the energy consumption of the Bitcoin miners. All you bitcoin shysters can keep telling yourself that to sleep at night, but you are lying to yourself and you know it. Bitcoin consumes massive amounts of energy for a pathetically small amount of transactions per second. ON a per transaction basis, Bitcoin uses several orders of magnitude more energy than anything used by modern day financial systems. Like, embarrassingly, shamefully large amounts of electricity. Y'all should bow your heads in shame for the harm you are doing to the world. > The service it provides is to guarantee the integrity of the blockchain without the requirement of a central authority. The blockchain, whose only use case is to enable rampant speculation and amazingly large quantities of fraud. The whole "space" needs to go away.
        • aje403 8y ago
          Bbbut... the blockchain?
        • arebop 8y ago
          Your biggest mistake is comparing energy use. You need to compare the total overhead of bitcoin to the total overhead of the competitive financial system. The second mistake is comparing a per-transaction basis; this is of interest when we are comparing suitability for particular applications, but if you want to talk more generally about whether bitcoin is efficient for payments you need to look at things on a value basis (use usd, eur, cny, or gold ounces).
    • drexlspivey 8y ago
      Would you ask the same question if the world run 100% on renewables? If not, it seems that your argument should be "we should accelerate our transition to renewables" instead of "bitcoin spends too much power". Also they pay for all the energy they spend so what exactly is the problem? Do you see vegans complain for the resources spent to raise animals?
      • mikeash 8y ago
        The problem is that energy is priced far below costs at the moment, due to a large proportion of the costs being externalized.
      • vkou 8y ago
        > Would you ask the same question if the world run 100% on renewables? Yes, because the resources (Material or labour) that went into building those renewable power plants could have gone into building something else that people want or need. Houses. Retaining walls. High-speed rail tracks. Electric cars. Bicycles. Video games. Rolls of sushi. I will keep asking that question until we are in a post-scarcity society.
        • eriken 8y ago
          So we all get to decide how all the resources are spent? I am concerned that the desire to deem certain energy spending as unethical can lead us down a creepy path of authoritarianism.
      • baddox 8y ago
        This is a fairly good point. Any argument about externalities in energy usage applies to all usages of energy, and the solution is to internalize them in the price of energy.
        • rspeer 8y ago
          What a great idea. All you'd need is a centralized world government to enforce it, and then you can have a responsible, decentralized currency! Wait.
    • api 8y ago
      How much energy is spent securing conventional financial systems? You have to include everything: banks, minting, enforcement, physical security, even military and intelligence action.
      • gtirloni 8y ago
        If/when cryptocurrencies reach the same size as conventional financial systems, they will require all of the same. Bitcoin is relevant for the US economy and a rogue state tries to have 51% of hashing power? Military and intelligence to the rescue. Someone is very rich in Bitcoins? Bunker services for offline storage, physical/computer security, etc. Too many scams with altcoins? Legal enforcement, more bureaucracy, education, etc. One could say that, somehow, the cryptocurrencies won't require as much of any of that, but I don't see this point being made as often (and not with any realistic estimations).
        • api 8y ago
          The 51% scenario: just install more hash power. That would be cheaper and would not risk anyone's life. Protecting cryptocurrency: there are cryptographic ways to achieve very high security that are free or very inexpensive. Physical encryption keys cost under $100. Combine those with multiple signatures and offline storage in a safe deposit box and you have several physical and cryptographic layers of security for pretty cheap. Services that do those things do not need to be very expensive. Too many scams? Point taken. We will still need police. BTW there's a reason I said cryptocurrency and not Bitcoin. Bitcoin is one of the slower cryptocurrencies. Energy spent securing the chain is per block, and its block size limit and other aspects of its design artificially boost its energy per TX. That and in the long term I expect people to find less energy intensive ways to secure block chains.
      • root_axis 8y ago
        Why is this argument repeated so often? How is that comparison not clearly absurd to you? The conventional financial system is very obviously many orders of magnitude more efficient than bitcoin.
    • hndamien 8y ago
      You know all that sunlight that hits the Earth that we don't convert into energy. Wasted natural resource. Loads of it.
      • TeMPOraL 8y ago
        No, it isn't. It's what lets you, and everything else, live, instead of freezing to death.
        • hndamien 8y ago
          It is a good thing we don't need all of it then. A tiny fraction will suffice. https://www.businessinsider.com.au/map-shows-solar-panels-to-power-the-earth-2015-9?r=US&IR=T https://www.businessinsider.com.au/map-shows-solar-panels-to... I think you may be missing my point and sarcasm.
          • TeMPOraL 8y ago
            Might be. Didn't have my morning coffee yet.
• patmcc 8y ago
  >>>Crypto currencies are worthless unless they have an enormous amount of hashing power behind them. And maybe they're worthless even then. Time will tell on that.
• ggg9990 8y ago
  Interesting point. The cryptocurrency energy consumption problem will never be solved, since if it is, it will be economically feasible to attack. So cryptocurrency adoption in the mainstream will require massive electricity consumption.
  • bennofs 8y ago
    Only if it uses proof of work.
  • gascan 8y ago
    You might even say it will ultimately require at least 51% of worldwide electricity production, to ensure no actor (including nation-states) can suddenly on-line additional capacity to seize control. And then if that's true, one might dream of a power plant arms race, where two competing nations build additional power plants as fast as possible to prevent the other from gaining enough electrical capacity to attack the network...
    • auto 8y ago
      There's a great sci-fi plot here
    • 2bitencryption 8y ago
      ...this is an intriguing start for a sci-fi novel.
    • sgt101 8y ago
      Alternatively one side opting out and using Fiat instead? Oh...
  • jsutton 8y ago
    Not necessarily, non-hashing consensus seems to be where most blockchain projects are going. So these would require a stake of assets or similar, instead of wasting computing cycles.
    • ufo 8y ago
• pilingual 8y ago
  Related: https://arewedecentralizedyet.com https://arewedecentralizedyet.com
• amluto 8y ago
  > Crypto currencies are worthless unless they have an enormous amount of hashing power behind them. Why would you think an enormous amount of hashing power helps? Even with Bitcoin, the actual marginal cost of a 51% attack is quite low. The difficulty is the capital expense of actually connecting to a couple GW of power and finding enough rentable ASICs. I think this is fundamental. In a proof-of-work scheme, if the mining rewards in whatever time frame is considered a full confirmation are less than the amount of gain available using a 51% attack, then a 51% attack is economical. ASIC mining during boom time helps mitigate the issue a bit, since the ASICs are worth more if the currency isn’t devalued by 51% attacks, but even Bitcoin will be vulnerable of older, less efficient ASICs start flooding the market, which seems inevitable if the price of BTC stagnates enough.
  • Jommi 8y ago
    You're looking at this as a static _binary_ model, while actually, the 51% attack is heavily dynamic. The profitability of the attack heavily depends on factors that are absolutely dynamic and not publicly available: - The exchange/betting website not catching onto your scheme - The volume of the coin being enough to mass sell it and not majorly affect the price - How fast the community can act in unison against you
• celticninja 8y ago
  it exists https://bitinfocharts.com/comparison/bitcoin%20gold-hashrate.html https://bitinfocharts.com/comparison/bitcoin%20gold-hashrate...
  • mike-cardwell 8y ago
    That graph doesn't tell me how much it costs to launch a 50% attack. Maybe I'm just lazy, but I want a table with the name of the crypto currency in one column, and the cost in USD to launch an attack in another column.
    • dragonwriter 8y ago
      > but I want a table with the name of the crypto currency in one column, and the cost in USD to launch an attack in another column. Doesn't the cost depend on who you assume the attacker is? The required hashing power doesn't have the same acquisition and operating costs for all potential attackers.
      • sanxiyn 8y ago
        True, but even crude order-of-magnitude estimate would be useful.
      • mike-cardwell 8y ago
        Of course, you're correct, but that's just an implementation detail. Each currency would need an explanation of what resources the calculation was based on. E.g, n instances of a blah node on Google Cloud Platform running software x in config y for z hours.
    • Zalastax 8y ago
      Figuring that out sounds like a fun but non-trivial project. Since crypto currencies have different mining schemes one would need to keep track of the hash/$ ratio for each one. I guess the simplest way to do so would be to cross-reference the different mining market places that exists. Do you have other ideas for figuring out the hash/$ ratio?
• bunderbunder 8y ago
  So, that's an interesting pair of ideas, in that it gets me thinking that any Bitcoin-style cryptocurrency might ultimately be doomed by its own design. Shooting from the hip: They've go this 51% vulnerability that is well known and hypothetically cannot be truly closed. Instead, we rely on the idea that mounting such an attack would be "too expensive". But at the same time, the cost/benefit of mounting such an attack is fairly easy to estimate using public data - all you really need to know is the cost to get to 51% and stay there for a given amount of time, which you can infer by monitoring mining activity, and the current price of the currency you'd want to attack. And you have to assume that whenever the cost of mounting such an attack dips below the benefit, such a thing _will_ happen. So then, I think that implies that the only other feature you'd need to throw into the mix to ensure a cryptocurrency is ultimately doomed is to make the rate at which new coin can be mined asymptotically approach zero. Such a feature would mean that, in the long term, miners' revenue would ultimately be dominated by transaction fees, which, this being a supremely commodity service, market forces will presumably tend to keep relatively low. That would, in turn, limit the number of miners the economy can support, which would serve to limit the cost of mounting a 51% attack. Meanwhile, what with a money supply that can't grow being inherently deflationary, the benefit of mounting such an attack would be constantly growing, for as long as said cryptocurrency remains in use.
  • drexlspivey 8y ago
    > They've go this 51% vulnerability that is well known and hypothetically cannot be truly closed. Instead, we rely on the idea that mounting such an attack would be "too expensive". But at the same time, the cost/benefit of mounting such an attack is fairly easy to estimate using public data - all you really need to know is the cost to get to 51% and stay there for a given amount of time, which you can infer by monitoring mining activity, and the current price of the currency you'd want to attack. And you have to assume that whenever the cost of mounting such an attack dips below the benefit, such a thing _will_ happen. Or, to turn this around, if X is the amount of money needed to sustain a 51% attack for 1 block, then you have to wait for 1 confirmation for every X amount of coins received.
    • 8y ago
• swerveonem 8y ago
  This point should be made more often. It also supports the ethereum and EOS use case, a general purpose computing blockchain and distributed vm, it allows smaller utility coins to be backed by the same size network as the eth token and ecosystem, something they would never do on their own. The token's security is proportional to it's network size. Fragmentation of the already small subset of people capable of running blockchain nodes that actually do run nodes is great for innovation but bad for network security and confidence.
• verbatim 8y ago
  > Crypto currencies are worthless unless they have an enormous amount of hashing power behind them. I think this is only true if you assume that crypto-currencies must be based on proof-of-work algorithms. What about proof of stake systems?
  • Arbalest 8y ago
    Someone has already asked that, and the response was, such systems are still theoretical without a working proof of concept.