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Bitcoin is wasteful because of its energy profile not because of an arbitrary value judgement regarding how energy should be used. Rendering images is useful w

Bitcoin is wasteful because of its energy profile not because of an arbitrary value judgement regarding how energy should be used. Rendering images is useful work. Processing transactions is useful work. With gaming computers, increasing energy costs means increasing detail and complexity in the images that can be processed. Bitcoin is wasteful because the increasing energy costs does not increase the total number of transactions that can be processed.

c22 8y ago
No, it increases the trust of the system. Is it the best solution? Perhaps not, but it is not without utility.
- root_axis 8y ago
  "Increasing trust" doesn't add value if the system is already sufficiently trustworthy for the task of processing transactions. Based on that reasoning the cost should ('should' meaning: it is beneficial) increase forever because an infinite amount of energy burned is infinitely trustworthy.
  - c22 8y ago
    Is bitcoin sufficiently trustworthy without proof of work? I'm not a bitcoin expert, but my understanding was that this is an integral part of the trust model. If so then we're just back to talking about inefficiencies. I can't imagine the processing being done by my computer right now is all strictly necessary to read and post these comments, and I'd wager this site is more efficient than most these days. Still I accept reality and pay these costs in order to talk with you on the internet because this is the world we live in. It looks like these nice people at MIT are working on some of the inefficiencies of cryptocurrencies, so let's rejoice.
    - root_axis 8y ago
      > Is bitcoin sufficiently trustworthy without proof of work? I'm not a bitcoin expert, but my understanding was that this is an integral part of the trust model. If so then we're just back to talking about inefficiencies. Yes, that's exactly the point. Bitcoin is insanely inefficient because PoW is insanely inefficient. Unlike other "inefficiencies" where there is a logical relationship between "energy spent" and "useful work accomplished", with PoW there is no such relationship since the energy isn't spent doing useful work (i.e. processing transactions). Yes, more power into the network makes it "more secure" by making it "more expensive" to perform a 51% attack. The increased expense is distributed across the network in the form of increased difficulty. If a 51% attack was already implausible (which most bitcoin enthusiasts would say is true), then making it even more expensive doesn't actually do anything useful.
      - sjeohp 8y ago
        Mining gold gets harder over time. If you want more gold that's the price you pay. Trust-less consensus may be the same. Nature doesn't care either way.
        ForHackernews 8y ago
        Nature has nothing to do with it. Bitcoin is a poorly-engineered human-designed, human-built system.
        sjeohp 8y ago
        Math has everything to do with nature.
        ForHackernews 8y ago
        Endlessly re-calculating SHA-256 over and over is not some beautiful mathematical principle.
        sjeohp 8y ago
    - ggggtez 8y ago
      >the processing being done by my computer right now Well it depends what you are considering. Arguably, yes, your computer finished the HTTPS connection long before you got around to reading the words on the page itself. But the scale of an idle CPU compared to a 100% CPU is not even close. Mine is sitting at 2% use while I type this. You could put that money into mining actual gold, and literally make 4x as much as mining bitcoin [0]. [0] https://www.theguardian.com/technology/2018/nov/05/energy-cost-of-mining-bitcoin-more-than-twice-that-of-copper-or-gold https://www.theguardian.com/technology/2018/nov/05/energy-co...
  - sgeisler 8y ago
    > sufficiently trustworthy Trustworthiness always depends on your use case. If you are transacting small amounts of money (less than is spent on mining a block) then waiting for 3 confirmations is probably sufficient to consider the transaction settled. But what if you send a transaction with a 100 times higher value than goes into mining a block then you will need to wait for over 100 confirmations till you can be sure it doesn't make economical sense for anyone to try to double spend your transaction by orphaning the first block your transaction was in (with a very simplified incentive model not taking into account other transactions in these blocks). Thus the money spent on mining blocks determines how much value can be transferred in one block. Allowing for higher value transactions is good thing imo, is necessary for its success as digital gold and therefore justifies the higher energy consumption (especially since there don't seem to be any alternatives with similarly good or better robustness against attacks yet, proof of stake can't work under the same assumptions bitcoin does [1]). [1] https://download.wpsoftware.net/bitcoin/new-pos.pdf https://download.wpsoftware.net/bitcoin/new-pos.pdf
    - root_axis 8y ago
      The fact that larger transactions require more power to transmit securely only demonstrates my point further. > Allowing for higher value transactions is good thing imo PoW systems are the only ones where "higher value transactions" need security proportional to their size.
    - sgeisler 8y ago
      @root_axis (since I can't reply directly): > PoW systems are the only ones where "higher value transactions" need security proportional to their size. Every other currency is either backed by men with guns and transactions are reversible (fiat) or you have to spend a roughly proportional amount of resources securing it (e.g. gold). I didn't look at the data, but judging by US military spending I'd guess that the strongest economies also have to spend the most to keep their system safe. You can still argue that the assumption of pseudonymous actors in bitcoin makes the proportion factor larger (=system less efficient) than for systems that can use identities and attribution and I'd agree with that. But that's only because it can operate with less assumptions (no identities), which I see as a feature.
- MereInterest 8y ago
  Run that one by me again? If tomorrow, a manufacturer announced the new Super Duper Quantum ASIC for Bitcoin that can perform hashes at 10 times less energy cost, everybody would switch over to it, and the total hashrate would increase 10x. Neither the number of miners, the proportion of mining held by each person, the distribution of mining rewards accumulated, or the total power consumption would be affected at all. Therefore, the amount of trust in the system would not be changed at all. Cryptocurrencies are not secured by the hashrate, but by the cost of exceeding the hashrate of the network.
  - c22 8y ago
    I'm probably way out of my element here (I don't own bitcoin or play video games). Are you telling me that the power consumption of the bitcoin network is constant and based solely on the most popular bitcoin mining hardware?
    - MereInterest 8y ago
      I wouldn't say that it is constant, as the energy consumption has been increasing. However, it does not depend on the efficiency of the hardware being used. Think of bitcoin mining as a raffle. You can buy as many raffle tickets as you want, and so can everybody else. Each raffle ticket costs $1, and so people buy tickets until the prizes start getting spread out too much. The next day, though, the raffle tickets are only 10 cents apiece. However, the prizes are still the same, so the break-even point is still the same when expressed in dollar value. As a result, the same amount of money is spent, just buying 10x as many raffle tickets. In this analogy, each hash performed by the miners is buying a raffle ticket. The block reward is the prize at the end of the raffle. Going from CPU mining to GPU mining to ASIC mining each increase the efficiency of performing a hash, analogous to lowering the price of a raffle ticket. Just as lowering the price of each raffle ticket results in an increase in the number of ticket sales without changing the total value of ticket sales, so decreasing the cost of each hash results in an increased number of hashes performed, without changing the total amount of electricity spent to perform those hashes.
      - 8y ago
DINKDINK 8y ago
>Bitcoin is wasteful because the increasing energy costs does not increase the total number of transactions that can be processed. Are you saying the number of transactions the market will demand of a system is independent of the trust of the system? If I need to move $250,000[1] in one hour with ~100% certainty are you saying an IOU from a bank janitor is equivalent in value to a bitcoin transaction? An increase in attack costs increases the types of transactions that can occur safely on L1. The number of L2 updates are unbounded by L1 transaction capacity, increase attack costs gives the market confidence L2 updates cannot be erased. A high cost to signal which money you're willing to use filters out fraud attempts. Which should I trust more, Malory Money who double-pinky swears to run her Malory Money servers 5 years from now but is signaling with no costs or Bobby Bitcoiner who signals by billions of dollars in single-use capex (ASICS) [1] 12.5 BTC/block * 3850 $/BTC * 6 Blocks/hour < tx.value()
- root_axis 8y ago
  > Are you saying the number of transactions the market will demand of a system is independent of the trust of the system No. I'm saying that if a 51% attack is practically impossible today, the increasing amount of energy consumed to secure the same amount of transactions is wasted. It's also a sign that the system is broken because the amount of energy consumed has no practical impact on security. Reasoning otherwise would suggest it is justified to consume infinite energy because that would be infinitely secure.
  - DINKDINK 8y ago
    >a 51% attack is practically impossible today It appears you think a 51% attack is when an external agent attempts to out hash the network. This is only one type of 51% attack. A 51% attack means there is a almost equal amount of hash rate being applied to two divergent, consensus equivalent chains. This can happen in above scenario or when existing miners attempt to reorg blocks (See ETC 51% attack) There is nothing stopping this behavior from occurring at any point in time. The only check on this behavior is the cost to rewrite history, decrease this cost, and you increase the profitability of such attacks.
hndamien 8y ago
Is the American military wasteful because it provides too much security? How much should it be reduced to provide sufficient security? This is a legitimate question/ I don't have an opinion either way - but it seems to be a fair corollary.
- ggggtez 8y ago
  Unlike bitcoin, every person in the US has an (more or less) equal vote to help decide that. Congress's job is literally to decide whether to spend more money on military, among other things. And also unlike bitcoin, when you pay the salary of 450k+ soldiers, among other jobs and such created, that's likely a lot better for the economy than random people converting electricity into crypto tokens. What does bitcoin provide in terms of add-on benefits like jobs? The ability for power companies to maximize profits by having their supply used more fully? Edit: Additionally, you can argue that the US army does not provide too much security, because it doesn't take someone more than a few seconds to look at the world and see the world is not 100% safe. There are numerous areas such that, if money was not a concern, could be made safer and more profitable by adding more security. Creating infinite trust in bitcoin would... do what exactly? Let nerds buy drugs on the internet?
  - hndamien 8y ago
    Some would argue that it fixes the economic system so that we won't have booms and busts anymore and can start seeing capitalism in action proper. That seems to be a worthwhile investment, and may even help prevent wars (which are often financed by currency debasement).
  - ric2b 8y ago
    > And also unlike bitcoin, when you pay the salary of 450k+ soldiers, among other jobs and such created, that's likely a lot better for the economy than random people converting electricity into crypto tokens. Jobs are only useful if they waste people's time? Mining is a job. Mining can also become green much faster than constantly moving around millions of tons of vehicles can. > Additionally, you can argue that the US army does not provide too much security, because it doesn't take someone more than a few seconds to look at the world and see the world is not 100% safe. I would argue it decreases security, with all the wars and disruption it caused in the last decades.

c22 8y ago

No, it increases the trust of the system. Is it the best solution? Perhaps not, but it is not without utility.

root_axis 8y ago
"Increasing trust" doesn't add value if the system is already sufficiently trustworthy for the task of processing transactions. Based on that reasoning the cost should ('should' meaning: it is beneficial) increase forever because an infinite amount of energy burned is infinitely trustworthy.
- c22 8y ago
  Is bitcoin sufficiently trustworthy without proof of work? I'm not a bitcoin expert, but my understanding was that this is an integral part of the trust model. If so then we're just back to talking about inefficiencies. I can't imagine the processing being done by my computer right now is all strictly necessary to read and post these comments, and I'd wager this site is more efficient than most these days. Still I accept reality and pay these costs in order to talk with you on the internet because this is the world we live in. It looks like these nice people at MIT are working on some of the inefficiencies of cryptocurrencies, so let's rejoice.
  - root_axis 8y ago
    > Is bitcoin sufficiently trustworthy without proof of work? I'm not a bitcoin expert, but my understanding was that this is an integral part of the trust model. If so then we're just back to talking about inefficiencies. Yes, that's exactly the point. Bitcoin is insanely inefficient because PoW is insanely inefficient. Unlike other "inefficiencies" where there is a logical relationship between "energy spent" and "useful work accomplished", with PoW there is no such relationship since the energy isn't spent doing useful work (i.e. processing transactions). Yes, more power into the network makes it "more secure" by making it "more expensive" to perform a 51% attack. The increased expense is distributed across the network in the form of increased difficulty. If a 51% attack was already implausible (which most bitcoin enthusiasts would say is true), then making it even more expensive doesn't actually do anything useful.
    - sjeohp 8y ago
      Mining gold gets harder over time. If you want more gold that's the price you pay. Trust-less consensus may be the same. Nature doesn't care either way.
      - ForHackernews 8y ago
        Nature has nothing to do with it. Bitcoin is a poorly-engineered human-designed, human-built system.
        sjeohp 8y ago
        Math has everything to do with nature.
        ForHackernews 8y ago
        Endlessly re-calculating SHA-256 over and over is not some beautiful mathematical principle.
        sjeohp 8y ago
  - ggggtez 8y ago
    >the processing being done by my computer right now Well it depends what you are considering. Arguably, yes, your computer finished the HTTPS connection long before you got around to reading the words on the page itself. But the scale of an idle CPU compared to a 100% CPU is not even close. Mine is sitting at 2% use while I type this. You could put that money into mining actual gold, and literally make 4x as much as mining bitcoin [0]. [0] https://www.theguardian.com/technology/2018/nov/05/energy-cost-of-mining-bitcoin-more-than-twice-that-of-copper-or-gold https://www.theguardian.com/technology/2018/nov/05/energy-co...
- sgeisler 8y ago
  > sufficiently trustworthy Trustworthiness always depends on your use case. If you are transacting small amounts of money (less than is spent on mining a block) then waiting for 3 confirmations is probably sufficient to consider the transaction settled. But what if you send a transaction with a 100 times higher value than goes into mining a block then you will need to wait for over 100 confirmations till you can be sure it doesn't make economical sense for anyone to try to double spend your transaction by orphaning the first block your transaction was in (with a very simplified incentive model not taking into account other transactions in these blocks). Thus the money spent on mining blocks determines how much value can be transferred in one block. Allowing for higher value transactions is good thing imo, is necessary for its success as digital gold and therefore justifies the higher energy consumption (especially since there don't seem to be any alternatives with similarly good or better robustness against attacks yet, proof of stake can't work under the same assumptions bitcoin does [1]). [1] https://download.wpsoftware.net/bitcoin/new-pos.pdf https://download.wpsoftware.net/bitcoin/new-pos.pdf
  - root_axis 8y ago
    The fact that larger transactions require more power to transmit securely only demonstrates my point further. > Allowing for higher value transactions is good thing imo PoW systems are the only ones where "higher value transactions" need security proportional to their size.
  - sgeisler 8y ago
    @root_axis (since I can't reply directly): > PoW systems are the only ones where "higher value transactions" need security proportional to their size. Every other currency is either backed by men with guns and transactions are reversible (fiat) or you have to spend a roughly proportional amount of resources securing it (e.g. gold). I didn't look at the data, but judging by US military spending I'd guess that the strongest economies also have to spend the most to keep their system safe. You can still argue that the assumption of pseudonymous actors in bitcoin makes the proportion factor larger (=system less efficient) than for systems that can use identities and attribution and I'd agree with that. But that's only because it can operate with less assumptions (no identities), which I see as a feature.
MereInterest 8y ago
Run that one by me again? If tomorrow, a manufacturer announced the new Super Duper Quantum ASIC for Bitcoin that can perform hashes at 10 times less energy cost, everybody would switch over to it, and the total hashrate would increase 10x. Neither the number of miners, the proportion of mining held by each person, the distribution of mining rewards accumulated, or the total power consumption would be affected at all. Therefore, the amount of trust in the system would not be changed at all. Cryptocurrencies are not secured by the hashrate, but by the cost of exceeding the hashrate of the network.
- c22 8y ago
  I'm probably way out of my element here (I don't own bitcoin or play video games). Are you telling me that the power consumption of the bitcoin network is constant and based solely on the most popular bitcoin mining hardware?
  - MereInterest 8y ago
    I wouldn't say that it is constant, as the energy consumption has been increasing. However, it does not depend on the efficiency of the hardware being used. Think of bitcoin mining as a raffle. You can buy as many raffle tickets as you want, and so can everybody else. Each raffle ticket costs $1, and so people buy tickets until the prizes start getting spread out too much. The next day, though, the raffle tickets are only 10 cents apiece. However, the prizes are still the same, so the break-even point is still the same when expressed in dollar value. As a result, the same amount of money is spent, just buying 10x as many raffle tickets. In this analogy, each hash performed by the miners is buying a raffle ticket. The block reward is the prize at the end of the raffle. Going from CPU mining to GPU mining to ASIC mining each increase the efficiency of performing a hash, analogous to lowering the price of a raffle ticket. Just as lowering the price of each raffle ticket results in an increase in the number of ticket sales without changing the total value of ticket sales, so decreasing the cost of each hash results in an increased number of hashes performed, without changing the total amount of electricity spent to perform those hashes.
    - 8y ago

DINKDINK 8y ago

>Bitcoin is wasteful because the increasing energy costs does not increase the total number of transactions that can be processed. Are you saying the number of transactions the market will demand of a system is independent of the trust of the system? If I need to move $250,000[1] in one hour with ~100% certainty are you saying an IOU from a bank janitor is equivalent in value to a bitcoin transaction? An increase in attack costs increases the types of transactions that can occur safely on L1. The number of L2 updates are unbounded by L1 transaction capacity, increase attack costs gives the market confidence L2 updates cannot be erased. A high cost to signal which money you're willing to use filters out fraud attempts. Which should I trust more, Malory Money who double-pinky swears to run her Malory Money servers 5 years from now but is signaling with no costs or Bobby Bitcoiner who signals by billions of dollars in single-use capex (ASICS) [1] 12.5 BTC/block * 3850 $/BTC * 6 Blocks/hour < tx.value()

root_axis 8y ago
> Are you saying the number of transactions the market will demand of a system is independent of the trust of the system No. I'm saying that if a 51% attack is practically impossible today, the increasing amount of energy consumed to secure the same amount of transactions is wasted. It's also a sign that the system is broken because the amount of energy consumed has no practical impact on security. Reasoning otherwise would suggest it is justified to consume infinite energy because that would be infinitely secure.
- DINKDINK 8y ago
  >a 51% attack is practically impossible today It appears you think a 51% attack is when an external agent attempts to out hash the network. This is only one type of 51% attack. A 51% attack means there is a almost equal amount of hash rate being applied to two divergent, consensus equivalent chains. This can happen in above scenario or when existing miners attempt to reorg blocks (See ETC 51% attack) There is nothing stopping this behavior from occurring at any point in time. The only check on this behavior is the cost to rewrite history, decrease this cost, and you increase the profitability of such attacks.

hndamien 8y ago

Is the American military wasteful because it provides too much security? How much should it be reduced to provide sufficient security? This is a legitimate question/ I don't have an opinion either way - but it seems to be a fair corollary.

ggggtez 8y ago
Unlike bitcoin, every person in the US has an (more or less) equal vote to help decide that. Congress's job is literally to decide whether to spend more money on military, among other things. And also unlike bitcoin, when you pay the salary of 450k+ soldiers, among other jobs and such created, that's likely a lot better for the economy than random people converting electricity into crypto tokens. What does bitcoin provide in terms of add-on benefits like jobs? The ability for power companies to maximize profits by having their supply used more fully? Edit: Additionally, you can argue that the US army does not provide too much security, because it doesn't take someone more than a few seconds to look at the world and see the world is not 100% safe. There are numerous areas such that, if money was not a concern, could be made safer and more profitable by adding more security. Creating infinite trust in bitcoin would... do what exactly? Let nerds buy drugs on the internet?
- hndamien 8y ago
  Some would argue that it fixes the economic system so that we won't have booms and busts anymore and can start seeing capitalism in action proper. That seems to be a worthwhile investment, and may even help prevent wars (which are often financed by currency debasement).
- ric2b 8y ago
  > And also unlike bitcoin, when you pay the salary of 450k+ soldiers, among other jobs and such created, that's likely a lot better for the economy than random people converting electricity into crypto tokens. Jobs are only useful if they waste people's time? Mining is a job. Mining can also become green much faster than constantly moving around millions of tons of vehicles can. > Additionally, you can argue that the US army does not provide too much security, because it doesn't take someone more than a few seconds to look at the world and see the world is not 100% safe. I would argue it decreases security, with all the wars and disruption it caused in the last decades.