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I don't think you understood what I wrote. PoW is wasteful in that the vast majority of the product of it's algorithm (hashes) is discarded. This means that bl

I don't think you understood what I wrote. PoW is wasteful in that the vast majority of the product of it's algorithm (hashes) is discarded. This means that block producers can be trusted because they wouldn't be spending energy / electric power to produce blocks for any reason other than gaining the block rewards, which they can only get if the block is valid. If PoW did some sort of useful work (gene folding, seti, etc) then there would be no reason to trust block producers since all of their blocks are useful and therefore they can be "mining" for reasons other than obtaining the block reward. Hope that helps.

keymone 8y ago
i don't think you understand the technology at all.. > PoW is wasteful in that the vast majority of the product of it's algorithm (hashes) is discarded do you know what "PoW" means? it's 3 words: proof, of, work. what you consider "discarded" and "waste" is the Work in PoW. miners convert energy into blockchain security and every block signature is the proof that certain amount of energy was spent to find it. if there was another "useful" activity (gene folding, seti, etc) it would have created additional "value" for miners, making mining more valuable, creating incentive for more miners to mine and subsequently raising the difficulty to mine matching the additional "value" from "useful" activity. it's trivial econ and i really do hope it helps you better understand what you're arguing about.
- decentralised 8y ago
  We might be arguing about the meaning of words here but the work in PoW is it's output and the hashimoto algorithm in PoW discards all computed hashes that fail to meet the difficulty requirement. I suppose you know how consensus algorithms work, but if you don't I'd suggest you start by reading this https://medium.com/@jpa_of_snc/consensus-casper-and-cryptoeconomics-in-15-minutes-or-less-c7ca2427bf88 https://medium.com/@jpa_of_snc/consensus-casper-and-cryptoec.... If cryptoeconomics is interesting to you I can also recommend the best list of learning resources available, here: https://github.com/jpantunes/awesome-cryptoeconomics https://github.com/jpantunes/awesome-cryptoeconomics The concept of a useful PoW algorithm has been debated a number of times and the consensus view is what I wrote earlier: If there are incentives to mining other than the block reward, the security assumption provided by hashrate majority is lost and blocks producers cannot be trusted. I'm a blockchain developer for a couple of years now, and I often write about it as you can see by the links I shared above. (edit: typos)
  - keymone 8y ago
    > arguing about the meaning of words here isn't that the most important thing? > work in PoW is it's output and the hashimoto algorithm in PoW discards all computed hashes that fail to meet the difficulty requirement you've used few specific words in your comments: "work" and "product". i agree that work in PoW is hashing and most of hashes are discarded, but product of PoW is the signature that satisfies the difficulty. if finding the signature didn't require going through lots of energy - it wouldn't have been proof of work. > If there are incentives to mining other than the block reward, the security assumption provided by hashrate majority is lost and blocks producers cannot be trusted. amazing, so you do understand this and yet you keep saying PoW is wasteful. if security is the product of PoW, then PoW is wasteful only if security is worthless.
    - root_axis 8y ago
      Waste is the security mechanism. Since the hash results are wasted it is risky to mount an attack on the network; if the hash results were not wasted then the cost of mounting an attack would be mitigated by the value inherent in useful work produced by the algorithm. Your rebuttal actually supports this conclusion because "useful work" would become the "common denominator" cost built into securing the network thus bringing us right back to where we started (i.e. a situation where wasted work is the only useful kind for securing the network)
      - keymone 8y ago
        > Waste is the security mechanism not really, consumption of energy is. and even if we accepted this weak statement, how does it follow that PoW is therefore wasteful? waste isn't the product of PoW, valid blocks are.
        root_axis 8y ago
        > consumption of energy is Yes. That's the "waste" part. The only product of spending the energy is a proof that the energy was spent. This is obviously wasteful because there is no relationship between the absolute energy spent and the utility of the network. The higher the difficulty the more energy wasted in order to maintain the status quo. Perhaps the most obvious sign of PoW's wasteful nature is the fact that the introduction of more efficient hardware into the network increases overall energy consumption because everyone else without cutting edge ASIC technology has to increase their energy output to compensate for the increase in hash rate.
- novaleaf 8y ago
  I think what @decentralised is arguing isn't that PoW is wasteful, but that there are certain by-design inefficiencies that outsiders consider a waste from an economics standpoint. (A high economic cost to perform PoW) Certainly you could argue that this economic cost is necessary and therefor not wasteful. Indeed I agree that it is central to the idea.
  - keymone 8y ago
    direct quote from him: "There are plenty of consensus protocols that don't waste energy" i'm not entirely sure what do you consider inefficiencies in PoW, it is by design supposed to convert energy into a proof that similar amount of energy was spent producing the proof. the only inefficiency involved is how far we are from Landauer limit. ultimately i don't think it matters which specific hashing algo is used - there will simply be more or fewer iterations per block, but for the same level of security as bitcoin provides, similar amount of electricity would be consumed. saying that PoW has high economic cost is pretty much a truism. PoW produces very real economic value, so of course it will have a similar economic cost. if the value wasn't matching the cost - there would be more/less of PoW going on and that's exactly what the hashrate chart shows over the last 8 years of price discovery.
    - decentralised 8y ago
      PoW uses energy to produce blocks in a process known as mining that consists of trial and error attempts at producing a “special” hash that meets a given difficulty target expressed in the number of leading zeroes. The difficulty target reflects the speculative work needed to produce valid blocks at regular intervals given the available hashrate. When more hashrate is added to the network the difficulty adjusts such that on average the block interval is kept around 10 minutes. The product of PoW's work is largely wasted since all hashes produced for a given block height, other than the next valid blockhash, have no value and are discarded with the winning miner being paid the full block reward for its work. This means that not only are the hashes useless but they are also expensive to create and return 100% of the reward to the winning block producer at the cost of all other block producers. Bitcoin’s hashrate is what I refer to as an “economic firewall” in that it becomes increasingly more expensive to acquire the hardware needed to control a significant portion of the network's hashrate (eg: 51% attack), or even mine a single block, the more interest there is in the block reward tokens. Having said that, there is no causality relationship between the cost of producing blocks with PoW and the token’s price which is set in open markets were no single Exchange or a “bitcoin ceo" is a counter-party. In other words, PoW keeps a blockchain safe because it’s wasteful and expensive. Only someone who can afford to run a mining rig would join and its costs are not covered unless their blocks are added to the canonical chain. If the consensus protocol performed useful work, the incentive to "mine" on this chain would not only the block reward but also include ulterior motives so attackers could try to produce invalid blocks and their effort would still be justified by the value of the work done. Hope this helps. Find me on telegram if you want to keep this discussion up, I'm always happy to discuss cryptoeconomics.

keymone 8y ago

i don't think you understand the technology at all.. > PoW is wasteful in that the vast majority of the product of it's algorithm (hashes) is discarded do you know what "PoW" means? it's 3 words: proof, of, work. what you consider "discarded" and "waste" is the Work in PoW. miners convert energy into blockchain security and every block signature is the proof that certain amount of energy was spent to find it. if there was another "useful" activity (gene folding, seti, etc) it would have created additional "value" for miners, making mining more valuable, creating incentive for more miners to mine and subsequently raising the difficulty to mine matching the additional "value" from "useful" activity. it's trivial econ and i really do hope it helps you better understand what you're arguing about.

decentralised 8y ago
We might be arguing about the meaning of words here but the work in PoW is it's output and the hashimoto algorithm in PoW discards all computed hashes that fail to meet the difficulty requirement. I suppose you know how consensus algorithms work, but if you don't I'd suggest you start by reading this https://medium.com/@jpa_of_snc/consensus-casper-and-cryptoeconomics-in-15-minutes-or-less-c7ca2427bf88 https://medium.com/@jpa_of_snc/consensus-casper-and-cryptoec.... If cryptoeconomics is interesting to you I can also recommend the best list of learning resources available, here: https://github.com/jpantunes/awesome-cryptoeconomics https://github.com/jpantunes/awesome-cryptoeconomics The concept of a useful PoW algorithm has been debated a number of times and the consensus view is what I wrote earlier: If there are incentives to mining other than the block reward, the security assumption provided by hashrate majority is lost and blocks producers cannot be trusted. I'm a blockchain developer for a couple of years now, and I often write about it as you can see by the links I shared above. (edit: typos)
- keymone 8y ago
  > arguing about the meaning of words here isn't that the most important thing? > work in PoW is it's output and the hashimoto algorithm in PoW discards all computed hashes that fail to meet the difficulty requirement you've used few specific words in your comments: "work" and "product". i agree that work in PoW is hashing and most of hashes are discarded, but product of PoW is the signature that satisfies the difficulty. if finding the signature didn't require going through lots of energy - it wouldn't have been proof of work. > If there are incentives to mining other than the block reward, the security assumption provided by hashrate majority is lost and blocks producers cannot be trusted. amazing, so you do understand this and yet you keep saying PoW is wasteful. if security is the product of PoW, then PoW is wasteful only if security is worthless.
  - root_axis 8y ago
    Waste is the security mechanism. Since the hash results are wasted it is risky to mount an attack on the network; if the hash results were not wasted then the cost of mounting an attack would be mitigated by the value inherent in useful work produced by the algorithm. Your rebuttal actually supports this conclusion because "useful work" would become the "common denominator" cost built into securing the network thus bringing us right back to where we started (i.e. a situation where wasted work is the only useful kind for securing the network)
    - keymone 8y ago
      > Waste is the security mechanism not really, consumption of energy is. and even if we accepted this weak statement, how does it follow that PoW is therefore wasteful? waste isn't the product of PoW, valid blocks are.
      - root_axis 8y ago
        > consumption of energy is Yes. That's the "waste" part. The only product of spending the energy is a proof that the energy was spent. This is obviously wasteful because there is no relationship between the absolute energy spent and the utility of the network. The higher the difficulty the more energy wasted in order to maintain the status quo. Perhaps the most obvious sign of PoW's wasteful nature is the fact that the introduction of more efficient hardware into the network increases overall energy consumption because everyone else without cutting edge ASIC technology has to increase their energy output to compensate for the increase in hash rate.
novaleaf 8y ago
I think what @decentralised is arguing isn't that PoW is wasteful, but that there are certain by-design inefficiencies that outsiders consider a waste from an economics standpoint. (A high economic cost to perform PoW) Certainly you could argue that this economic cost is necessary and therefor not wasteful. Indeed I agree that it is central to the idea.
- keymone 8y ago
  direct quote from him: "There are plenty of consensus protocols that don't waste energy" i'm not entirely sure what do you consider inefficiencies in PoW, it is by design supposed to convert energy into a proof that similar amount of energy was spent producing the proof. the only inefficiency involved is how far we are from Landauer limit. ultimately i don't think it matters which specific hashing algo is used - there will simply be more or fewer iterations per block, but for the same level of security as bitcoin provides, similar amount of electricity would be consumed. saying that PoW has high economic cost is pretty much a truism. PoW produces very real economic value, so of course it will have a similar economic cost. if the value wasn't matching the cost - there would be more/less of PoW going on and that's exactly what the hashrate chart shows over the last 8 years of price discovery.
  - decentralised 8y ago
    PoW uses energy to produce blocks in a process known as mining that consists of trial and error attempts at producing a “special” hash that meets a given difficulty target expressed in the number of leading zeroes. The difficulty target reflects the speculative work needed to produce valid blocks at regular intervals given the available hashrate. When more hashrate is added to the network the difficulty adjusts such that on average the block interval is kept around 10 minutes. The product of PoW's work is largely wasted since all hashes produced for a given block height, other than the next valid blockhash, have no value and are discarded with the winning miner being paid the full block reward for its work. This means that not only are the hashes useless but they are also expensive to create and return 100% of the reward to the winning block producer at the cost of all other block producers. Bitcoin’s hashrate is what I refer to as an “economic firewall” in that it becomes increasingly more expensive to acquire the hardware needed to control a significant portion of the network's hashrate (eg: 51% attack), or even mine a single block, the more interest there is in the block reward tokens. Having said that, there is no causality relationship between the cost of producing blocks with PoW and the token’s price which is set in open markets were no single Exchange or a “bitcoin ceo" is a counter-party. In other words, PoW keeps a blockchain safe because it’s wasteful and expensive. Only someone who can afford to run a mining rig would join and its costs are not covered unless their blocks are added to the canonical chain. If the consensus protocol performed useful work, the incentive to "mine" on this chain would not only the block reward but also include ulterior motives so attackers could try to produce invalid blocks and their effort would still be justified by the value of the work done. Hope this helps. Find me on telegram if you want to keep this discussion up, I'm always happy to discuss cryptoeconomics.