14 ms·

Does this mean no more mining and waste of electricity ?

seibelj 6y ago
Eventually yes, but mining isn’t a “waste” of electricity any more than any electricity used for any essential service is. Isn’t all electricity effectively wasted if the same service can be offered for less electricity? Ethereum (and bitcoin) provide a service, and that service is protected using electricity.
- emilsedgh 6y ago
  If there were refrigerators that could work without electricity with no the same set of capabilities, then any refrigerator still using electricity would be considered wasteful.
  - beaner 6y ago
    I'm not saying that proof-of-stake is bad, but it does change the way the network functions, because it locks capital and therefore affects the velocity of money in the network. It also changes the distribution of mined coin. Whereas currently it takes an equal mining cost to reap an equal reward, proof-of-stake rewards those who already have enough to stake. This is essentially a recreation of the inflation system we have in the fiat world, where printed money first goes to the government, who can spend it at its current value, eventually having it entropy out to other users through spending, at reduced purchasing power. This makes the rich richer, and increases inequality of savings in the network. So it's not exactly the same refrigerator, so to speak.
    - viraptor 6y ago
      > proof-of-stake rewards those who already have enough to stake As opposed to people who have money buying mining hardware to make more money that can be invested into mining hardware?
      - beaner 6y ago
        Yes, that's how most businesses work. You start with a capital investment, often times through a loan, and through smart management, make a profit on the margin, that you can choose to reinvest to stay competitive. Proof-of-stake is completely unlike this. People who "have" are not required to exchange any effort to reap new reward. They retain purchasing power while the "have-nots" lose purchasing power. I dunno if I struck a nerve with you with these points about proof of stake or something. I'm not completely against it - I think it should be tried, and Ethereum is a great network to try it with. But I also don't think it's completely perfect. I also think proof-of-work is very defensible and likely to succeed in unexpected ways.
        viraptor 6y ago
        I wouldn't say it's completely unlike. I don't think renting out some mining hardware for near-guaranteed return is any different in effort. It's about the same as putting money in an investment fund. PoW, PoS, and other investments practically end up with: until you withdraw the money you can invest your existing wealth to get returns, without real effort.
        beaner 6y ago
        Proof-of-stake requires the majority of what is mined has to be sold on the open market. This redistributes mined coin to any user anywhere, rich or poor. If you mine and do not sell, you perpetually consume and fail in short order. Proof-of-stake doesn't require this natural, market-driven redistribution. It exchanges it for an inflationary process that further separates the rich and the poor. They're fundamentally different.
        rglullis 6y ago
        You are completely ignoring second-order effects for these systems. You can quite easily turn resources obtained from a PoW system into a PoS financial system and have the worst of both worlds. Do you want an example? > If you mine and do not sell, you perpetually consume and fail in short order. With ETH you can mine ETH, lock in a MakerDAO vault and pay your operations with very low-interest DAI and use that to finance all your operational costs. As long as your profit from mining is higher than the interest from minting DAI (which is very easy to do), you can mine forever without ever giving up the original ETH. Your only limitation would be in how many people would be willing to buy all the DAI you will be minting. This is no different than a PoS system, except that it still has to bear all the PoW costs and externalities.
    - rglullis 6y ago
      > proof-of-stake rewards those who already have enough to stake. Don't forget, those that do not have enough to stake can pool their resources together. P.s: tell me where in the world you can open a bank (not a bank account, but an actual bank which can receive deposits from Central Banks) with only 10-20k USD. P.P.s: There is growing talk about existing central banks that are considering issuing their own blockchain version of their currencies, bypass large banks and have money go directly to people through controlled accounts. It would be basically be a Government-sanctioned version of Tether/USDC/EURS.
      - beaner 6y ago
        > Don't forget that do not have enough to stake can pool their resources together. That's great! And makes a lot of sense. However, it still requires locking capital. Those who do not have a lot of money, spend a much higher percentage of their money, and therefore need it to be liquid. So though pooling may reduce the effect of inflationary rich-poor inequality increases, I don't think it would eliminate it.
        rglullis 6y ago
        > I don't think it would eliminate it. Well, duh. No system will ever be perfect and there will always be costs associated with BFT systems. The question is knowing how these systems compare with one another and what kind of trade-offs are there. It is impossible to dispute that the costs of keeping a PoS-based system is overall lower than the current state-of-the-art, yet you try to knock PoS while ignoring all the analog issues with PoW? Your cognitive dissonance is showing.
        beaner 6y ago
        I'd like to continue engaging in good-faith conversation, not start exchanging barbs with undertones of acrimony.
    - nickik 6y ago
      > therefore affects the velocity of money in the network That is very questionable.
  - globular-toast 6y ago
    If that happened then we'd just start using the electricity for something non-essential instead. Humanity is not interested in efficiency for the sake of reducing footprint. Humanity is only interested in more. If anything, fridges using more electricity means less electricity wasted (assuming refrigeration is essential and not a waste). This pattern seems to be everywhere. Cheaper electricity: more electricity used. Bigger roads: more miles travelled. More efficient engines: bigger, more powerful cars. Plastic recycling: more plastic used. I challenge you to find any improvement in efficiency which has led to a reduced footprint.
    - ehou 6y ago
      Light bulbs. I do not want or have “more light” in my house but do have a lower energy bill after replacing them by LED versions
      - globular-toast 6y ago
        And the money you saved will just sit in an account until you die, I presume? What's more likely is you have spent the money saved on something else.
- brazzy 6y ago
  The problem is that mining can never reduce its energy usage. Any efficiency gains are necessarily eaten by increased difficulty. And in fact, energy usage has to incease in proportion with the value of the network.
  - keymone 6y ago
    you're on to something here. what if i told you that the constant level of energy spent is the level of security bitcoin users demand by virtue of buying it at current price level? would you say constant provision of certain level of security is waste?
    - brazzy 6y ago
      > what if i told you that the constant level of energy spent is the level of security bitcoin users demand by virtue of buying it at current price level? I'd say that you're wrong because security is not the primary thing they're buying. > would you say constant provision of certain level of security is waste? I would say that doing so through a constantly increasing level of energy use is indeed a waste.
      - keymone 6y ago
        > security is not the primary thing they're buying sounds like speculation. it's a major desirability factor in bitcoin. > constantly increasing level of energy use is indeed a waste the more money you store in a vault - the more security it needs for you to sleep well. you wouldn't lock a $5000 bike with $5 lock. so difficulty increase correlates very much with amount of wealth poured into bitcoin. edit: typo
        brazzy 6y ago
        > sounds like speculation. it's a major desirability factor in bitcoin. No, that's a plain fact. Nobody ever buys security as an end unto itself. You buy security to protect the thing you really want. Which in the case of Bitcoin is by a vast majority "getting rich". > you wouldn't lock a $5000 bike with $5 lock. so difficulty increase correlates very much with amount of wealth poured into bitcoin. It correlates, but not in direct proportion. With any other kind of security, you don't need to spend 10 times as much to protect a 10 times higher value, and there is a possibility of security getting cheaper due to advances in technology.
ibz 6y ago
Said somebody typing a comment online? You can always go back and live in a cave if you think modern society is "too wasteful".
beaner 6y ago
Just to riff on this idea, despite inevitable pushback: Bitcoin's proof-of-work is basically a conversion of energy directly into money. This pushes competition towards cheaper and cheaper sources of energy. First it's finding jurisdictions that subsidize it, then it's creating your own cheaper energy sources. Proof-of-work incentivizes cheap & renewable energy investment. The penultimate phase is custom off-grid mining farms that power themselves via their own renewables. The endgame is that all energy companies will primarily be Bitcoin mining companies, feeding their excess renewable energy into the grid to power homes, etc.
- tikej 6y ago
  Cool, except so-called renewable energy sources still built using non-renewable materials. There also physical limits to efficiency of energy transformation and slightly less heat loss per unit of energy with much more energy production is not exactly what climate needs right now.
  - beaner 6y ago
    Haven't heard these points before but I'm not sure that they apply to proof-of-work specifically.
  - dane-pgp 6y ago
    "The estimated calculations presented in this work prove that the total power produced by us was 0.0414% in 2000 and 0.0577% in 2017 of the global solar power reaching the Earth’s surface"[0]. So even if Bitcoin mining were to cause global electricity production to increase by an order of magnitude, it would still be a rounding error compared to the amount of global warming caused by the Sun directly. Thinking about it thermodynamically, though, in a future where Bitcoin mining uses only excess solar and wind energy, it wouldn't be adding any heat to the planet because that energy would have become heat anyway. [0] https://www.mdpi.com/1996-1073/12/16/3069/pdf https://www.mdpi.com/1996-1073/12/16/3069/pdf
    - tikej 6y ago
      Ok, of course true that sum of heat from sun that reaches earth remains constant no matter whether we use it. However, how it’s stored/used on the earth is another matter. E.g. if it’s absorbed by plants/fungi/other life forms and stored as biomass, part of it doesn’t contribute to heating of the atmosphere/oceans, contrarily to when it’s converted to electricity (where large part is lost due to heating of the solar panels) and then used to computing, where from physics perspective it’s mostly heating (only tiny part is converted to useful work). Also what about the Manufacruring/production of devices to convert solar/wind energy to electricity and to mine bitcoins? It’s based on non-renewable elements (of course any chemical process is reversible given enough energy but Entropy still grows mercilessly) and requires a lot of extra energy. EDIT: as far as we know, thermodynamically all energy will become heat at the end (although not sure if it should be called heat, since there will be no flux). However, we as humanity are/should be quite concerned first about decades and earth’s atmosphere/oceans (and connected parts) not millennia and energetically balance Earth as whole to come. In principle energy from sun could also be stored in form of chemical bonds energy (as it’s the case for biomass) or even nuclear energy (yup, sun-powered nuclear fusion sounds unlikely but why not ;). Then biomass (less efficiently) or nuclei/atoms could be ejected from earth allowing to disperse sun’s thermal energy somewhere else.
keymone 6y ago
zero electricity is wasted on PoW cryptocurrencies. energy consumption is equivalent to constant maintenance of security at the level demanded by market.
- creddit 6y ago
  I mean I guess this depends on how one defines waste but under definitions I generally come across, if you could get the same level of security for less electricity in a new scheme, then the old scheme is wasting electricity.
  - keymone 6y ago
    sure, if you could. but the value is in the eyes of the beholder. if the market genuinely believed that to be the case - PoW currencies wouldn't be worth anything, so far that isn't the case, so claiming that PoW is wasteful is disingenuous at best. p.s. somebody really dislikes my opinions, as i'm banned from commenting on HN for the last couple hours or so :D
    - creddit 6y ago
      You write about markets like they are omnipotent, benevolent gods which they aren't. Markets fail all the time. It's a large part of what economists spend their time studying. Take an intro to game theory course and you can find all sorts of structures that lead to non-socially beneficial outcomes, the prisoner's dilemma being a classic example. There's nothing about markets nor cryptocurrencies that guarantees that they efficiently select for the currency that requires the least electricity. You completely ignore social alignment issues as well as inertia.
      - mercenario 6y ago
        It's pretty simple, if it costs you 1 dollar to mine a bitcoin and someone (the market) wants to buy that bitcoin for 2 dollars, that cost is worth it. It doesn't matter what that cost is, if it's 1 dollar in energy or 1 dollar in wages or whatever, it costs $1 and you sell by $2, you profit, the cost was worth it.
globular-toast 6y ago
Probably not. Proof of work seems to be essential for a successful currency. Go visit the City of London or the Financial District of Manhattan to check out the proof of work of the current financial industry. Millions of people busying around and spending time in huge buildings that are---quite evidently now during the pandemic---completely unnecessary. If you really want to stop waste then try to convince people to stop worrying about whether others have more stuff than they do. John Lennon wrote a well-known song about this idea. You could try imagining it too. Unfortunately you've got billions of years of evolution against you, but good luck! Alternatively, if you can figure out a way to do it without proof of work then you'll stop all of this waste while still appealing to our animalistic instincts. But, then again, who are you to talk about waste anyway? What makes your life not a waste of energy? Don't you consume food every single day?
- rcxdude 6y ago
  This is, to put it mildly, bollocks. Bitcoin uses more energy than the entire finance industry to supervise far less capital and conduct far fewer transactions (by multiple orders of magnitude). You are equivocating by equating levels of inefficiency which differ so drastically you are either deliberately misleading people or have been mislead yourself.
  - globular-toast 6y ago
    I didn't say a single thing about efficiency or bitcoin consumption vs banking industry consumption.
wildsatchmo 6y ago
Funny nobody complains about the energy consumed by actual banks and other services Bitcoin would replace, which is much higher. In those circumstances they can understand it's not a waste at all, but a cost of providing a valuable service. I don't think POS is an adequate replacement. POW was an intentional design choice because of the highly competitive environment that it creates.
- shermanmccoy 6y ago
  Do you have some modelling, or any credible reference to back up your assertion that the energy used by banks would be higher than a Bitcoin blockchain?
  - Applejinx 6y ago
    And if so, would you provide a projection for the relative energy useage of traditional banking vs. bitcoin for a linearly expanding money supply extended out indefinitely?
  - wildsatchmo 6y ago
    Even if I did provide you some report showing banks use more than Bitcoin (which is still true for now) it's only a fraction of the big picture. Although banks are a good example of this effect, Bitcoin doesn't JUST improve banking. As this plays out, mining infrastructure provides a shared resource that can be used by MILLIONS of companies, among which are banks who manage massive datacenters requiring humans and their associated energy consumption, the cost for audits, compliance, card readers, and other things that Bitcoin makes effortless. Surely unlocking efficiency offsets power consumption, and at scale the efficiency improvements can be astronomical. An accurate figure on this probably does not even exist, especially considering the lack of imagination with respect to Bitcoin use-cases. Not to mention the biggest energy consumers are also the best in the world at reducing their consumption out of competitive necessity.
- nickik 6y ago
  Bitcoin is not a replacement for banks.
koheripbal 6y ago
That is generally true of any proof-of-work cryptocurrencies.
dgrin91 6y ago
It means orders of magnitude less. The part of the blockchain that proves your transaction was valid is now (oversimplifying here) just a boolean check instead of running a hash algo over and over
- nwah1 6y ago
  I think a better way to say it is that it moves from a trustless system to a system that trusts based on some criteria. That criteria is usually how many coins one has. Since the original bitcoin concept was solving the byzantine generals problem, the entire point of all the cryptographic work was to be trustless. If you are cool with trust, you can have reversibility, lost password retrieval, anti-money laundering checks, and all the other features of the existing financial system. It would be a carbon copy of that, of course, which would raise the question of what problem this system is solving for people. But I understand that Ethereum is about distributed computing, not transactions, so the calculus may be different. The point being to replace AWS, not Western Union. I'm personally not sold on why a distributed trust algorithm would be superior to trusting AWS or Azure, given that those services can give you a refund for errors, are subject to the legal system, have a brand reputation to maintain, and so on.
  - pkulak 6y ago
    I guess I don't understand how proof of stake uses trust while proof of work doesn't. They seem very similar to me. I could argue that with Bitcoin you have to trust all of these large pools that are constantly flirting with 50% of the hashing power.
    - nwah1 6y ago
      That is a good point. Although, in principle Proof of Stake could use any number of algorithms, and thus the trust could be based on something other than who has the most resources. In general for distributed systems, trusting based on reputation is a common idea. "Circles of trust" was how the original Ripple concept was explained. The important question is not which of these ideas is better than each other, but which is better than existing infrastructure.
macawfish 6y ago
Not to mention GPUs! Can you believe how many GPUs have been cooked by this scheme? I got a water-cooled GTX 1080 almost 5 years ago on Craigslist for $500. Usually old things like that get cheaper as time goes by, but not GPUs. Nowadays those things are going for like $800. I was hoping to upgrade to an RTX2080 or something (also a few years old now) but they're like $1000! I can't help but think that cryptocurrency mining is mostly responsible. And supposedly long term mining just fries GPUs, so the used market is dubious anyway.
- zymhan 6y ago
  I was amazed that my 5 y/o GPU is still selling for half it's original price. I was considering buying a second one for Crossfire, but maybe selling it is a better idea.
- randtrain34 6y ago
  the 3070 is $499, roughly equivalent to the 2080 TI
  - pteraspidomorph 6y ago
    Out of stock around these parts. It has been for weeks. All stores, all brands. There are a few units left from dubious brands if I order them all the way from Amazon Germany.
- Forbo 6y ago
  Most serious mining operations will typically undervolt their GPUs for increased efficiency and don't experience nearly as much temperature fluctuation. Buying a used mining GPU isn't nearly as bad of an idea as it sounds on the surface.
nootropicat 6y ago
Yes. For comparison, multiplying the value of total block rewards for btc (inflation + fees) by 365, bitcoin extracts about $6.2B per year from buyers just to exist. Eth2 is going to be extremely light, and is going to run fine on a ~$600 NUC that consumes about 10W. At 20% annual amortization, $0.15/kWh and 10k different validators (people), the total cost of running eth2 is... $1.3M. That's a mind-boggling difference of 4700x. Real costs may be a bit larger as some individual stakers can be less efficient (like running on a 150W average power pc) but compared to what bitcoin consumes - still a rounding error.
llcoolv 6y ago
The electricity is used to verify transactions, which has a massive added value many times exceeding the cost of the electricity invested. Calling this a waste of electricity is the same as calling the hundreds of thousands (if not more than a million) of employess of central banks, regulation authorities, payment processors, etc waste of air. Really really naive and childish. P.S. Did anyone ever calculate the carbon footprint of all these people whose jobs are going to be taken over and compared it? I haven't done the approximation/calculation, but I am pretty sure that cryptocurrencies are going to be a massive improvement over the current system in that aspect as well.
mercenario 6y ago
Do you consider the energy spent mining gold a waste? This electricity is necessary to mine bitcoin. It is the same principle. If you have a more efficient way to mine bitcoin, just do it, you will be rich, or just tell everyone else and everybody will use it.

Eventually yes, but mining isn’t a “waste” of electricity any more than any electricity used for any essential service is. Isn’t all electricity effectively wasted if the same service can be offered for less electricity? Ethereum (and bitcoin) provide a service, and that service is protected using electricity.

emilsedgh 6y ago
If there were refrigerators that could work without electricity with no the same set of capabilities, then any refrigerator still using electricity would be considered wasteful.
- beaner 6y ago
  I'm not saying that proof-of-stake is bad, but it does change the way the network functions, because it locks capital and therefore affects the velocity of money in the network. It also changes the distribution of mined coin. Whereas currently it takes an equal mining cost to reap an equal reward, proof-of-stake rewards those who already have enough to stake. This is essentially a recreation of the inflation system we have in the fiat world, where printed money first goes to the government, who can spend it at its current value, eventually having it entropy out to other users through spending, at reduced purchasing power. This makes the rich richer, and increases inequality of savings in the network. So it's not exactly the same refrigerator, so to speak.
  - viraptor 6y ago
    > proof-of-stake rewards those who already have enough to stake As opposed to people who have money buying mining hardware to make more money that can be invested into mining hardware?
    - beaner 6y ago
      Yes, that's how most businesses work. You start with a capital investment, often times through a loan, and through smart management, make a profit on the margin, that you can choose to reinvest to stay competitive. Proof-of-stake is completely unlike this. People who "have" are not required to exchange any effort to reap new reward. They retain purchasing power while the "have-nots" lose purchasing power. I dunno if I struck a nerve with you with these points about proof of stake or something. I'm not completely against it - I think it should be tried, and Ethereum is a great network to try it with. But I also don't think it's completely perfect. I also think proof-of-work is very defensible and likely to succeed in unexpected ways.
      - viraptor 6y ago
        I wouldn't say it's completely unlike. I don't think renting out some mining hardware for near-guaranteed return is any different in effort. It's about the same as putting money in an investment fund. PoW, PoS, and other investments practically end up with: until you withdraw the money you can invest your existing wealth to get returns, without real effort.
        beaner 6y ago
        Proof-of-stake requires the majority of what is mined has to be sold on the open market. This redistributes mined coin to any user anywhere, rich or poor. If you mine and do not sell, you perpetually consume and fail in short order. Proof-of-stake doesn't require this natural, market-driven redistribution. It exchanges it for an inflationary process that further separates the rich and the poor. They're fundamentally different.
        rglullis 6y ago
        You are completely ignoring second-order effects for these systems. You can quite easily turn resources obtained from a PoW system into a PoS financial system and have the worst of both worlds. Do you want an example? > If you mine and do not sell, you perpetually consume and fail in short order. With ETH you can mine ETH, lock in a MakerDAO vault and pay your operations with very low-interest DAI and use that to finance all your operational costs. As long as your profit from mining is higher than the interest from minting DAI (which is very easy to do), you can mine forever without ever giving up the original ETH. Your only limitation would be in how many people would be willing to buy all the DAI you will be minting. This is no different than a PoS system, except that it still has to bear all the PoW costs and externalities.
  - rglullis 6y ago
    > proof-of-stake rewards those who already have enough to stake. Don't forget, those that do not have enough to stake can pool their resources together. P.s: tell me where in the world you can open a bank (not a bank account, but an actual bank which can receive deposits from Central Banks) with only 10-20k USD. P.P.s: There is growing talk about existing central banks that are considering issuing their own blockchain version of their currencies, bypass large banks and have money go directly to people through controlled accounts. It would be basically be a Government-sanctioned version of Tether/USDC/EURS.
    - beaner 6y ago
      > Don't forget that do not have enough to stake can pool their resources together. That's great! And makes a lot of sense. However, it still requires locking capital. Those who do not have a lot of money, spend a much higher percentage of their money, and therefore need it to be liquid. So though pooling may reduce the effect of inflationary rich-poor inequality increases, I don't think it would eliminate it.
      - rglullis 6y ago
        > I don't think it would eliminate it. Well, duh. No system will ever be perfect and there will always be costs associated with BFT systems. The question is knowing how these systems compare with one another and what kind of trade-offs are there. It is impossible to dispute that the costs of keeping a PoS-based system is overall lower than the current state-of-the-art, yet you try to knock PoS while ignoring all the analog issues with PoW? Your cognitive dissonance is showing.
        beaner 6y ago
        I'd like to continue engaging in good-faith conversation, not start exchanging barbs with undertones of acrimony.
  - nickik 6y ago
    > therefore affects the velocity of money in the network That is very questionable.
- globular-toast 6y ago
  If that happened then we'd just start using the electricity for something non-essential instead. Humanity is not interested in efficiency for the sake of reducing footprint. Humanity is only interested in more. If anything, fridges using more electricity means less electricity wasted (assuming refrigeration is essential and not a waste). This pattern seems to be everywhere. Cheaper electricity: more electricity used. Bigger roads: more miles travelled. More efficient engines: bigger, more powerful cars. Plastic recycling: more plastic used. I challenge you to find any improvement in efficiency which has led to a reduced footprint.
  - ehou 6y ago
    Light bulbs. I do not want or have “more light” in my house but do have a lower energy bill after replacing them by LED versions
    - globular-toast 6y ago
      And the money you saved will just sit in an account until you die, I presume? What's more likely is you have spent the money saved on something else.
brazzy 6y ago
The problem is that mining can never reduce its energy usage. Any efficiency gains are necessarily eaten by increased difficulty. And in fact, energy usage has to incease in proportion with the value of the network.
- keymone 6y ago
  you're on to something here. what if i told you that the constant level of energy spent is the level of security bitcoin users demand by virtue of buying it at current price level? would you say constant provision of certain level of security is waste?
  - brazzy 6y ago
    > what if i told you that the constant level of energy spent is the level of security bitcoin users demand by virtue of buying it at current price level? I'd say that you're wrong because security is not the primary thing they're buying. > would you say constant provision of certain level of security is waste? I would say that doing so through a constantly increasing level of energy use is indeed a waste.
    - keymone 6y ago
      > security is not the primary thing they're buying sounds like speculation. it's a major desirability factor in bitcoin. > constantly increasing level of energy use is indeed a waste the more money you store in a vault - the more security it needs for you to sleep well. you wouldn't lock a $5000 bike with $5 lock. so difficulty increase correlates very much with amount of wealth poured into bitcoin. edit: typo
      - brazzy 6y ago
        > sounds like speculation. it's a major desirability factor in bitcoin. No, that's a plain fact. Nobody ever buys security as an end unto itself. You buy security to protect the thing you really want. Which in the case of Bitcoin is by a vast majority "getting rich". > you wouldn't lock a $5000 bike with $5 lock. so difficulty increase correlates very much with amount of wealth poured into bitcoin. It correlates, but not in direct proportion. With any other kind of security, you don't need to spend 10 times as much to protect a 10 times higher value, and there is a possibility of security getting cheaper due to advances in technology.

ibz 6y ago

Said somebody typing a comment online? You can always go back and live in a cave if you think modern society is "too wasteful".

beaner 6y ago

Just to riff on this idea, despite inevitable pushback: Bitcoin's proof-of-work is basically a conversion of energy directly into money. This pushes competition towards cheaper and cheaper sources of energy. First it's finding jurisdictions that subsidize it, then it's creating your own cheaper energy sources. Proof-of-work incentivizes cheap & renewable energy investment. The penultimate phase is custom off-grid mining farms that power themselves via their own renewables. The endgame is that all energy companies will primarily be Bitcoin mining companies, feeding their excess renewable energy into the grid to power homes, etc.

tikej 6y ago
Cool, except so-called renewable energy sources still built using non-renewable materials. There also physical limits to efficiency of energy transformation and slightly less heat loss per unit of energy with much more energy production is not exactly what climate needs right now.
- beaner 6y ago
  Haven't heard these points before but I'm not sure that they apply to proof-of-work specifically.
- dane-pgp 6y ago
  "The estimated calculations presented in this work prove that the total power produced by us was 0.0414% in 2000 and 0.0577% in 2017 of the global solar power reaching the Earth’s surface"[0]. So even if Bitcoin mining were to cause global electricity production to increase by an order of magnitude, it would still be a rounding error compared to the amount of global warming caused by the Sun directly. Thinking about it thermodynamically, though, in a future where Bitcoin mining uses only excess solar and wind energy, it wouldn't be adding any heat to the planet because that energy would have become heat anyway. [0] https://www.mdpi.com/1996-1073/12/16/3069/pdf https://www.mdpi.com/1996-1073/12/16/3069/pdf
  - tikej 6y ago
    Ok, of course true that sum of heat from sun that reaches earth remains constant no matter whether we use it. However, how it’s stored/used on the earth is another matter. E.g. if it’s absorbed by plants/fungi/other life forms and stored as biomass, part of it doesn’t contribute to heating of the atmosphere/oceans, contrarily to when it’s converted to electricity (where large part is lost due to heating of the solar panels) and then used to computing, where from physics perspective it’s mostly heating (only tiny part is converted to useful work). Also what about the Manufacruring/production of devices to convert solar/wind energy to electricity and to mine bitcoins? It’s based on non-renewable elements (of course any chemical process is reversible given enough energy but Entropy still grows mercilessly) and requires a lot of extra energy. EDIT: as far as we know, thermodynamically all energy will become heat at the end (although not sure if it should be called heat, since there will be no flux). However, we as humanity are/should be quite concerned first about decades and earth’s atmosphere/oceans (and connected parts) not millennia and energetically balance Earth as whole to come. In principle energy from sun could also be stored in form of chemical bonds energy (as it’s the case for biomass) or even nuclear energy (yup, sun-powered nuclear fusion sounds unlikely but why not ;). Then biomass (less efficiently) or nuclei/atoms could be ejected from earth allowing to disperse sun’s thermal energy somewhere else.

keymone 6y ago

zero electricity is wasted on PoW cryptocurrencies. energy consumption is equivalent to constant maintenance of security at the level demanded by market.

creddit 6y ago
I mean I guess this depends on how one defines waste but under definitions I generally come across, if you could get the same level of security for less electricity in a new scheme, then the old scheme is wasting electricity.
- keymone 6y ago
  sure, if you could. but the value is in the eyes of the beholder. if the market genuinely believed that to be the case - PoW currencies wouldn't be worth anything, so far that isn't the case, so claiming that PoW is wasteful is disingenuous at best. p.s. somebody really dislikes my opinions, as i'm banned from commenting on HN for the last couple hours or so :D
  - creddit 6y ago
    You write about markets like they are omnipotent, benevolent gods which they aren't. Markets fail all the time. It's a large part of what economists spend their time studying. Take an intro to game theory course and you can find all sorts of structures that lead to non-socially beneficial outcomes, the prisoner's dilemma being a classic example. There's nothing about markets nor cryptocurrencies that guarantees that they efficiently select for the currency that requires the least electricity. You completely ignore social alignment issues as well as inertia.
    - mercenario 6y ago
      It's pretty simple, if it costs you 1 dollar to mine a bitcoin and someone (the market) wants to buy that bitcoin for 2 dollars, that cost is worth it. It doesn't matter what that cost is, if it's 1 dollar in energy or 1 dollar in wages or whatever, it costs $1 and you sell by $2, you profit, the cost was worth it.

globular-toast 6y ago

Probably not. Proof of work seems to be essential for a successful currency. Go visit the City of London or the Financial District of Manhattan to check out the proof of work of the current financial industry. Millions of people busying around and spending time in huge buildings that are---quite evidently now during the pandemic---completely unnecessary. If you really want to stop waste then try to convince people to stop worrying about whether others have more stuff than they do. John Lennon wrote a well-known song about this idea. You could try imagining it too. Unfortunately you've got billions of years of evolution against you, but good luck! Alternatively, if you can figure out a way to do it without proof of work then you'll stop all of this waste while still appealing to our animalistic instincts. But, then again, who are you to talk about waste anyway? What makes your life not a waste of energy? Don't you consume food every single day?

rcxdude 6y ago
This is, to put it mildly, bollocks. Bitcoin uses more energy than the entire finance industry to supervise far less capital and conduct far fewer transactions (by multiple orders of magnitude). You are equivocating by equating levels of inefficiency which differ so drastically you are either deliberately misleading people or have been mislead yourself.
- globular-toast 6y ago
  I didn't say a single thing about efficiency or bitcoin consumption vs banking industry consumption.

wildsatchmo 6y ago

Funny nobody complains about the energy consumed by actual banks and other services Bitcoin would replace, which is much higher. In those circumstances they can understand it's not a waste at all, but a cost of providing a valuable service. I don't think POS is an adequate replacement. POW was an intentional design choice because of the highly competitive environment that it creates.

shermanmccoy 6y ago
Do you have some modelling, or any credible reference to back up your assertion that the energy used by banks would be higher than a Bitcoin blockchain?
- Applejinx 6y ago
  And if so, would you provide a projection for the relative energy useage of traditional banking vs. bitcoin for a linearly expanding money supply extended out indefinitely?
- wildsatchmo 6y ago
  Even if I did provide you some report showing banks use more than Bitcoin (which is still true for now) it's only a fraction of the big picture. Although banks are a good example of this effect, Bitcoin doesn't JUST improve banking. As this plays out, mining infrastructure provides a shared resource that can be used by MILLIONS of companies, among which are banks who manage massive datacenters requiring humans and their associated energy consumption, the cost for audits, compliance, card readers, and other things that Bitcoin makes effortless. Surely unlocking efficiency offsets power consumption, and at scale the efficiency improvements can be astronomical. An accurate figure on this probably does not even exist, especially considering the lack of imagination with respect to Bitcoin use-cases. Not to mention the biggest energy consumers are also the best in the world at reducing their consumption out of competitive necessity.
nickik 6y ago
Bitcoin is not a replacement for banks.

koheripbal 6y ago

That is generally true of any proof-of-work cryptocurrencies.

dgrin91 6y ago

It means orders of magnitude less. The part of the blockchain that proves your transaction was valid is now (oversimplifying here) just a boolean check instead of running a hash algo over and over

nwah1 6y ago
I think a better way to say it is that it moves from a trustless system to a system that trusts based on some criteria. That criteria is usually how many coins one has. Since the original bitcoin concept was solving the byzantine generals problem, the entire point of all the cryptographic work was to be trustless. If you are cool with trust, you can have reversibility, lost password retrieval, anti-money laundering checks, and all the other features of the existing financial system. It would be a carbon copy of that, of course, which would raise the question of what problem this system is solving for people. But I understand that Ethereum is about distributed computing, not transactions, so the calculus may be different. The point being to replace AWS, not Western Union. I'm personally not sold on why a distributed trust algorithm would be superior to trusting AWS or Azure, given that those services can give you a refund for errors, are subject to the legal system, have a brand reputation to maintain, and so on.
- pkulak 6y ago
  I guess I don't understand how proof of stake uses trust while proof of work doesn't. They seem very similar to me. I could argue that with Bitcoin you have to trust all of these large pools that are constantly flirting with 50% of the hashing power.
  - nwah1 6y ago
    That is a good point. Although, in principle Proof of Stake could use any number of algorithms, and thus the trust could be based on something other than who has the most resources. In general for distributed systems, trusting based on reputation is a common idea. "Circles of trust" was how the original Ripple concept was explained. The important question is not which of these ideas is better than each other, but which is better than existing infrastructure.

macawfish 6y ago

Not to mention GPUs! Can you believe how many GPUs have been cooked by this scheme? I got a water-cooled GTX 1080 almost 5 years ago on Craigslist for $500. Usually old things like that get cheaper as time goes by, but not GPUs. Nowadays those things are going for like $800. I was hoping to upgrade to an RTX2080 or something (also a few years old now) but they're like $1000! I can't help but think that cryptocurrency mining is mostly responsible. And supposedly long term mining just fries GPUs, so the used market is dubious anyway.

zymhan 6y ago
I was amazed that my 5 y/o GPU is still selling for half it's original price. I was considering buying a second one for Crossfire, but maybe selling it is a better idea.
randtrain34 6y ago
the 3070 is $499, roughly equivalent to the 2080 TI
- pteraspidomorph 6y ago
  Out of stock around these parts. It has been for weeks. All stores, all brands. There are a few units left from dubious brands if I order them all the way from Amazon Germany.
Forbo 6y ago
Most serious mining operations will typically undervolt their GPUs for increased efficiency and don't experience nearly as much temperature fluctuation. Buying a used mining GPU isn't nearly as bad of an idea as it sounds on the surface.

nootropicat 6y ago

Yes. For comparison, multiplying the value of total block rewards for btc (inflation + fees) by 365, bitcoin extracts about $6.2B per year from buyers just to exist. Eth2 is going to be extremely light, and is going to run fine on a ~$600 NUC that consumes about 10W. At 20% annual amortization, $0.15/kWh and 10k different validators (people), the total cost of running eth2 is... $1.3M. That's a mind-boggling difference of 4700x. Real costs may be a bit larger as some individual stakers can be less efficient (like running on a 150W average power pc) but compared to what bitcoin consumes - still a rounding error.

llcoolv 6y ago

The electricity is used to verify transactions, which has a massive added value many times exceeding the cost of the electricity invested. Calling this a waste of electricity is the same as calling the hundreds of thousands (if not more than a million) of employess of central banks, regulation authorities, payment processors, etc waste of air. Really really naive and childish. P.S. Did anyone ever calculate the carbon footprint of all these people whose jobs are going to be taken over and compared it? I haven't done the approximation/calculation, but I am pretty sure that cryptocurrencies are going to be a massive improvement over the current system in that aspect as well.

mercenario 6y ago

Do you consider the energy spent mining gold a waste? This electricity is necessary to mine bitcoin. It is the same principle. If you have a more efficient way to mine bitcoin, just do it, you will be rich, or just tell everyone else and everybody will use it.