6 ms·

Good. Bitcoin is too wasteful when it’s at a high valuation. The amount of resources in both electricity and gpu hardware that gets locked into mining is too hi

by arijun 8y ago

Good. Bitcoin is too wasteful when it’s at a high valuation. The amount of resources in both electricity and gpu hardware that gets locked into mining is too high. It can still do it’s job as a currency with a lower valuation.

nerdponx 8y ago
It's interesting that transactions have been steadily increasing since the crash at the end of 2017, even as the price keeps falling: https://bitinfocharts.com/comparison/bitcoin-transactions.html https://bitinfocharts.com/comparison/bitcoin-transactions.ht... That to me is definitely a good sign. Less hoarding, more spending. I do wonder what happens if the network starts to get transaction-bottlenecked again. It's not like all the problems with block size suddenly went away.
dragontamer 8y ago
The problem is that all that computing power still exists. If the hashrate drops, then a 51% attack becomes possible. Remember that those mining farms still exist, even if they've temporarily turned off their mining equipment. Someone can turn all that equipment on suddenly to attack the network and start double-spending their coins. In effect: the hashrate MUST remain high if the BTC network is to remain secure. That's just how Bitcoin was designed. A big drop like this where "good" miners start to turn off and sell off their equipment puts BTC in a highly vulnerable spot. The electricity usage will remain high, OR a 51% attack will happen. The electricity usage can never drop without severe risk to the entire system.
- gregorymichael 8y ago
  That doesn't sound like a good system.
- _jal 8y ago
  > the hashrate MUST remain high if the BTC network is to remain secure Reminds me of something else that places a continually increasing demand on resources to remain stable... Building the Red Queen problem into currency is insane.
- jrp55 8y ago
  At the risk of sounding overly flippant... should we (the general non-bitcoin holding public) really care whether a 51% attack happens or not?
  - dragontamer 8y ago
    I don't believe it would affect USA's financial system. There are certainly a number of individuals who hold BTC who would get wiped out in such an event, but it seems like it'd be relatively isolated. It looks like some countries where BTC is more popular may take a bigger hit under such a doomsday scenario. In effect, a 51% attack would cause the attacker to scam a lot of money from people in a short period of time. Then everyone will notice it on the blockchain (remember: the Blockchain is public. 51% attacks would be relatively obvious to see). After that, BTC's confidence will be broken and the value will march towards zero: no point holding a coin when some unknown entity out there can double-spend their coins. That's how it happens for other Proof-of-Work coins. But at the same time, BTC is the biggest coin, so its the least likely thing to happen. Its far more likely that BTC miners understand the importance of their mission, and remain wasting electricity perpetually. Some would argue that the BTC community is too vested into Bitcoin. So even if a 51% attack were possible, the people who could do it would never torpedo the coins that the own.
    - jrp55 8y ago
      I perhaps downplayed the flippancy in my previous comment. I'm aware of the theory and impact to the cryptocurrency world of a 51% attack. I honestly believe that the electricity usage - and therefore climate-change impact - of cryptocurrencies to far outweigh the benefits they bring. I think that the "value... march towards zero" is a good thing because "wasting electricity perpetually" is a bad thing. I don't think we should care about the losses of people who willingly bought into a wild-west scheme. edited: formatting
      - SlowRobotAhead 8y ago
        I don’t know who to root for between the people who don’t care bitcoin is a massive waste in power but engage with it anyhow because I enjoy the hypocrisy and sight of their surface level convictions - or - the people who want tech to crash and people to be burned by that. I guess the latter as future techs could be made less wasteful.
- pavel_lishin 8y ago
  > The electricity usage will remain high, OR a 51% attack will happen. The electricity usage can never drop without severe risk to the entire system. Sounds like the best argument against bitcoin I've heard yet.
  - mrlala 8y ago
    Hmm... actually that is interesting, what if there was some kind of event that knocked out the majority of electronics or power temporarily (solar flare type stuff).. as things are coming back on, wouldn't people be able to take advantage of exactly that situation?
  - hndamien 8y ago
    The forking also seems to have had some unintended consequences of changing the use of hash power such that the main chain is more vulnerable.
    - asdff 8y ago
      It also ruined the concept. In its most innocent terms, bitcoin is for sending money to people. What happens when person A has all their wealth tied up in Bitcoin Cash #1 and person B has it all in bitcoin cash #2. What coin does person C who wants to send something to person D use? With every new coin, the argument for switching to bitcoin for transactions weakens.
      - pavel_lishin 8y ago
        I mean, that argument works for any currency. All my wealth is in US Dollars, all my cousin's wealth is in Russian rubles. What does Person C use to send something to Person D? Whatever Person D deems as acceptable.
        hndamien 8y ago
        Hence medium of exchange, not so much store of wealth.
- kiriakasis 8y ago
  Also, as a paper here proved a few month ago, a 51% attack only needs 30-40% if a miner grows a "local" long blockchain.
nabla9 8y ago
> It can still do it’s job as a currency with a lower valuation. This is true, but it can't do it's job with high transaction volume. Counterargument: There are ways to correct it and intermediate services between BC and users will fill the gap between verification and use.... Counter-counterargument: If you need intermediaries, Visa and MasterCard already exist and their payment system is cheaper.
SlowRobotAhead 8y ago
>It can still do it’s job as a currency with a lower valuation. If in one year it can go from $2000 to $20,000 to $4000... Isn’t it better to think of it as a crypto-commodity instead of a currency? It doesn’t seem to me to share many properties of a successful currency, number one being confidence in its value.

by arijun 8y ago

nerdponx 8y ago

It's interesting that transactions have been steadily increasing since the crash at the end of 2017, even as the price keeps falling: https://bitinfocharts.com/comparison/bitcoin-transactions.html https://bitinfocharts.com/comparison/bitcoin-transactions.ht... That to me is definitely a good sign. Less hoarding, more spending. I do wonder what happens if the network starts to get transaction-bottlenecked again. It's not like all the problems with block size suddenly went away.

dragontamer 8y ago

The problem is that all that computing power still exists. If the hashrate drops, then a 51% attack becomes possible. Remember that those mining farms still exist, even if they've temporarily turned off their mining equipment. Someone can turn all that equipment on suddenly to attack the network and start double-spending their coins. In effect: the hashrate MUST remain high if the BTC network is to remain secure. That's just how Bitcoin was designed. A big drop like this where "good" miners start to turn off and sell off their equipment puts BTC in a highly vulnerable spot. The electricity usage will remain high, OR a 51% attack will happen. The electricity usage can never drop without severe risk to the entire system.

gregorymichael 8y ago
That doesn't sound like a good system.
_jal 8y ago
> the hashrate MUST remain high if the BTC network is to remain secure Reminds me of something else that places a continually increasing demand on resources to remain stable... Building the Red Queen problem into currency is insane.
jrp55 8y ago
At the risk of sounding overly flippant... should we (the general non-bitcoin holding public) really care whether a 51% attack happens or not?
- dragontamer 8y ago
  I don't believe it would affect USA's financial system. There are certainly a number of individuals who hold BTC who would get wiped out in such an event, but it seems like it'd be relatively isolated. It looks like some countries where BTC is more popular may take a bigger hit under such a doomsday scenario. In effect, a 51% attack would cause the attacker to scam a lot of money from people in a short period of time. Then everyone will notice it on the blockchain (remember: the Blockchain is public. 51% attacks would be relatively obvious to see). After that, BTC's confidence will be broken and the value will march towards zero: no point holding a coin when some unknown entity out there can double-spend their coins. That's how it happens for other Proof-of-Work coins. But at the same time, BTC is the biggest coin, so its the least likely thing to happen. Its far more likely that BTC miners understand the importance of their mission, and remain wasting electricity perpetually. Some would argue that the BTC community is too vested into Bitcoin. So even if a 51% attack were possible, the people who could do it would never torpedo the coins that the own.
  - jrp55 8y ago
    I perhaps downplayed the flippancy in my previous comment. I'm aware of the theory and impact to the cryptocurrency world of a 51% attack. I honestly believe that the electricity usage - and therefore climate-change impact - of cryptocurrencies to far outweigh the benefits they bring. I think that the "value... march towards zero" is a good thing because "wasting electricity perpetually" is a bad thing. I don't think we should care about the losses of people who willingly bought into a wild-west scheme. edited: formatting
    - SlowRobotAhead 8y ago
      I don’t know who to root for between the people who don’t care bitcoin is a massive waste in power but engage with it anyhow because I enjoy the hypocrisy and sight of their surface level convictions - or - the people who want tech to crash and people to be burned by that. I guess the latter as future techs could be made less wasteful.
pavel_lishin 8y ago
> The electricity usage will remain high, OR a 51% attack will happen. The electricity usage can never drop without severe risk to the entire system. Sounds like the best argument against bitcoin I've heard yet.
- mrlala 8y ago
  Hmm... actually that is interesting, what if there was some kind of event that knocked out the majority of electronics or power temporarily (solar flare type stuff).. as things are coming back on, wouldn't people be able to take advantage of exactly that situation?
- hndamien 8y ago
  The forking also seems to have had some unintended consequences of changing the use of hash power such that the main chain is more vulnerable.
  - asdff 8y ago
    It also ruined the concept. In its most innocent terms, bitcoin is for sending money to people. What happens when person A has all their wealth tied up in Bitcoin Cash #1 and person B has it all in bitcoin cash #2. What coin does person C who wants to send something to person D use? With every new coin, the argument for switching to bitcoin for transactions weakens.
    - pavel_lishin 8y ago
      I mean, that argument works for any currency. All my wealth is in US Dollars, all my cousin's wealth is in Russian rubles. What does Person C use to send something to Person D? Whatever Person D deems as acceptable.
      - hndamien 8y ago
        Hence medium of exchange, not so much store of wealth.
kiriakasis 8y ago
Also, as a paper here proved a few month ago, a 51% attack only needs 30-40% if a miner grows a "local" long blockchain.

nabla9 8y ago

> It can still do it’s job as a currency with a lower valuation. This is true, but it can't do it's job with high transaction volume. Counterargument: There are ways to correct it and intermediate services between BC and users will fill the gap between verification and use.... Counter-counterargument: If you need intermediaries, Visa and MasterCard already exist and their payment system is cheaper.

SlowRobotAhead 8y ago

>It can still do it’s job as a currency with a lower valuation. If in one year it can go from $2000 to $20,000 to $4000... Isn’t it better to think of it as a crypto-commodity instead of a currency? It doesn’t seem to me to share many properties of a successful currency, number one being confidence in its value.