7 ms·

- Proof of work is inherently wasteful. - The ever expanding blockchain is wasteful (in storage, computation, network). - Having every transaction recorded fo

by stuaxo 6y ago

- Proof of work is inherently wasteful. - The ever expanding blockchain is wasteful (in storage, computation, network). - Having every transaction recorded forever is the opposite of anonymity ("pseudonymous" - come on!). - The energy usage is insane. - The throughput is way too slow. While there may be an anonymous digital currency that doesn't use a lot of energy, it probably has to be based on something other than proof of work and blockchain. The people that say this is a bit like a pyramid scheme may be onto something. Bitcoins biggest threat may be the decriminalization of drugs, as that is the only use beyond hoarding "HODL"ing right now.

nivenkos 6y ago
Yeah, the first and last points are the worst IMO. The others could be worked around maybe, but as long as it takes 3+ hours to carry out a transaction, and the resource requirements for partaking in the network are ever-increasing, I just can't see it ever scaling to be usable.
- deleted 6y ago
  [deleted]
- zulln 6y ago
  > The others could be worked around maybe, but as long as it takes 3+ hours to carry out a transaction So does bank transfers though, and we have been able to work around that for quite some time now.
  - tapland 6y ago
    The throughput in banks is orders of magnitudes greater than for Bitcoin. Transactions are carried out instantly and processed at least once daily in huge and super fast batches. You could add a layer for fast transactions to BTC but IIRC it can't handle processing nearly enough of them into the blockchain per day.
  - jpmoral 6y ago
    I keep seeing this type of comment in Bitcoin threads. Is this something people in the Bitcoin space widely believe, that bank transfers are necessarily slow and expensive? Free, near-instant bank transfers have been a thing for a few years now (a decade in the UK IIUC). Or have I completely misunderstood what you were saying?
  - martin_a 6y ago
    You really need to change banks if this happens to you. Bank transfers are done in seconds in the SEPA area. Pretty sure there's something similar outside of Europe, too.
delaaxe 6y ago
Fiat money is just as much a pyramid scheme, so the real argument becomes about monetary policy
pfortuny 6y ago
The expensiveness of bitcoin comes, in part, as a consequence of removing trust from the system. Trust (that the State will accept this paper as a measure of my rights, essentially, and that this paper that someone is giving me fulfills that property) is really really expensive and has taken centuries to be built. In that sense, a decentralized trust-less exchange system needs to replace that value (trust) with another (in this caase, proof-of-work and the huge size of the ledger). Not easy...
zhdc1 6y ago
All of these arguments also apply to precious metals and gemstones. Gold, for instance, is extremely energy intensive/wasteful to mine, heavily tracked, and (until recently) had little utilitarian/industrial value outside of jewelry.
aww_dang 6y ago
Nano addresses these concerns, excluding privacy. The node's API is also straightforward. Nano was the first cryptocurrency I landed on when I wanted to pay players microtransactions in a browser based RPG. It works as described without undue hype. Solves the payment problem without promising to do everything under the sun. Transactions are settled instantly and without fees. Rent seeking miners are taken out of the equation. Developers of services are incentivized to run nodes to have access to the network. If cryptocurrency isn't intended to be used as a currency, only traded on to others or used in some perpetually forthcoming usecase - then concerns about it simply being a finance scheme may be on target. https://en.wikipedia.org/wiki/Nano_(cryptocurrency) https://en.wikipedia.org/wiki/Nano_(cryptocurrency) https://docs.nano.org/whitepaper/english/ https://docs.nano.org/whitepaper/english/
jjcm 6y ago
Etherium 2.0's move to proof of stake will help with the ridiculous energy usage that bitcoin has, but I don't see a blockchain ever being able to handle the traffic of a major card processor like visa. Even with sharding, your latency between shards compounds to the point where the UX is degraded. What I see value in for a blockchain is store of value (which arguably is basically a pyramid scheme), smart contracts for provable logic-based transactions, niche database uses, and as you brought up: drugs (or more accurately, private/anonymous payments). Bitcoin is really a poor choice for both the smart contracts and niche databases, which leaves it with store of value and drugs. Once law enforcement legislates it to the point where it becomes impractical for drugs, at that point it is just a store of value. It holds no use except to become more valuable the more people buy into it, which is just a pyramid scheme.
- cturner 6y ago
  The definition for /pyramid scheme/ is straightforward, and Bitcoin does not match it.
deleted 6y ago
[deleted]
G3n0t 6y ago
> Proof of work is inherently wasteful. But it's a necessary evil for a _distributed_ currency. It's a way to protect payment validation from being controlled by a single operator by making a "hostile take over" very expensive. IMHO criticizing Bitcoin for its "proof of work" algorithm only converys a serious lack of understanding of how crypto currencies actually work. There is an alternative, namely, the "proof of stake" scheme that Ethereum is going to switch over to but it has other short comings that might or might not outweigh the benefits of energy savings. > - The ever expanding blockchain is wasteful (in storage, computation, network). Well, the blockchain's current size is 323.54 GB. That's quite a lot but can be stored easily on a $100 SSD. Using $100 worth of storage to maintain an asset market of roughly 600 billion dollars is useful trade off, I would say. Of course, I know the blockchain is being replicated all over the planet but Google's cloud storage probably dwarves its storage requirements. > - The throughput is way too slow. Yes, 10 minutes is not very fast. However, compare that to inter bank transactions and this number seems blazingly fast again. However, in my opionion Bitcoin is emerging as an alternative to gold that's primarily used for storing value over long times. It's primary purpose will not be to maintain payment networks. This role will be taken by Ethereum or other alternatives like Stella Lumens, Loopring or Polkadot.
- jpmoral 6y ago
  > Yes, 10 minutes is not very fast. However, compare that to inter bank transactions and this number seems blazingly fast again Near instant bank transfers have been available in a lot of countries for many years now. Or did you mean something else?
  - G3n0t 6y ago
    Well, "SWIFT" international bank transactions require up to 5 work days. Here in Germany, sending money from one bank to another still takes at least one up to three _work_ days. So in the worst case, you're wiring money to sb on Friday and he will receive it by Wednesday. Compare that to 10 minutes required by Bitcoin anywhere on the planet. Of course, there are special purpose banking products to accelerate transactions but they are also more expensive than Bitcoin's miner fee.
tromp 6y ago
Many of these properties follow from the design principles of decentralization and censorship resistance. > Proof of work is inherently wasteful This seems unavoidable for distributing new coins more fairly than just letting the creators print themselves a huge pile out of thin air, which would centralize coin ownership. > The ever expanding blockchain is wasteful (in storage, computation, network). Bandwidth costs are unavoidable for both transaction publishing (censorship resistance) and for verifying the transaction history in the Initial Block Download (decentralization requires widespread full verification), although the latter could in principle be mostly eliminated with a zero knowledge proving system. > Having every transaction recorded forever is the opposite of anonymity This is not necessitated by the design principles. Bitcoin chose to make amounts visible so that total supply could be transparently audited and because Confidential Transactions had yet to be developed (one variety of which is perfectly sound, needing no cryptographic assumptions to guard against inflation). Allowing address re-use seems like a design mistake that could have been avoided, e.g. with stealth addresses. > The energy usage is insane. This is a direct consequence of the high price of Bitcoin; i.e. needing to secure a high market map against double spending attacks. Which goes back to the top item. > The throughput is way too slow. Even with second layer solutions, we still need on-chain onramps and settlements. Low throughput is the price to pay for censorship resistance.
CyberDildonics 6y ago
The entire bitcoin blockchain is 11 years old and fits in $6 USD of hard drive space. The biggest problem is that the average transaction is now between $10 USD to $17 USD.
chemmail 6y ago
Calling something "wasteful" is merely philosophical. What exactly is wasteful? You eating anything that isn't absolutely required, maybe just some IVs, is that not wasteful? The USAs entire meat chain, is that not wasteful? Transportation when online meetings are fine, is that not wasteful? The universe itself burning out one day, is that not wasteful to existence? Wasteful is not an argument at the end of the day.
- DemocracyFTW 6y ago
  Jumping from the observation that a given term is of a philosophical nature (whatever that might mean) to the conclusion that it is "not real", hence "irrelevant" is a fallacy. Likewise, observing that not only exhibit A has property P but also exhibits C, D, and E is no proof that property P is irrelevant with respect to A. "Democracy", "freedom", "the law", "the economy"—all of these terms are in the realm of Philosophy and are subject to philosophical discussion, as they ought; none of these is not highly relevant in a universal, everyday, hands-on sense. Likewise, that meat production is wasteful doesn't mean it's a good idea to add yet another wasteful item to a place characterized by finite resources.
alwillis 6y ago
Bitcoins biggest threat may be the decriminalization of drugs, as that is the only use beyond hoarding "HODL"ing right now. This is such a tired and over used trope. How about being the best store of value humans currently have access to? The world's reserve currency--the dollar--is being inflated by trillions and trillions of dollars, with no end in sight. Savings accounts are paying essentially 0% interest; if you take inflation into account, people are losing money everyday they leave their money in these accounts. Countries in the EU have negative interest rates and it won't be too long before we have negative rates in the US. Meanwhile, bitcoin is on its way to becoming a reserve asset and is being seen as a must-own asset by the best and brightest money managers and companies. Bitcoin has been a lifeline in countries where the local currency has failed--like Syria, Venezuela, Argentina. It's allowed people to stay ahead of repressive regimes like in Hong Kong and Nigeria. And it's going to allow people in the United States who's currency is being debased and where inflation is eating away at savings and retirement to have a fighting chance at being able to support themselves in the future. You might want to understand how theft-by-inflation works [1]. Or how the dollar is gradually losing its status as the world reserve currency [2]. It's not going to be pretty. [1] "Masters and Slaves of Money"—https://breedlove22.medium.com/masters-and-slaves-of-money-255ecc93404f https://breedlove22.medium.com/masters-and-slaves-of-money-2... [2] "The Fraying of the US Global Currency Reserve System"—https://www.lynalden.com/fraying-petrodollar-system/ https://www.lynalden.com/fraying-petrodollar-system/

by stuaxo 6y ago

nivenkos 6y ago

Yeah, the first and last points are the worst IMO. The others could be worked around maybe, but as long as it takes 3+ hours to carry out a transaction, and the resource requirements for partaking in the network are ever-increasing, I just can't see it ever scaling to be usable.

deleted 6y ago
[deleted]
zulln 6y ago
> The others could be worked around maybe, but as long as it takes 3+ hours to carry out a transaction So does bank transfers though, and we have been able to work around that for quite some time now.
- tapland 6y ago
  The throughput in banks is orders of magnitudes greater than for Bitcoin. Transactions are carried out instantly and processed at least once daily in huge and super fast batches. You could add a layer for fast transactions to BTC but IIRC it can't handle processing nearly enough of them into the blockchain per day.
- jpmoral 6y ago
  I keep seeing this type of comment in Bitcoin threads. Is this something people in the Bitcoin space widely believe, that bank transfers are necessarily slow and expensive? Free, near-instant bank transfers have been a thing for a few years now (a decade in the UK IIUC). Or have I completely misunderstood what you were saying?
- martin_a 6y ago
  You really need to change banks if this happens to you. Bank transfers are done in seconds in the SEPA area. Pretty sure there's something similar outside of Europe, too.

delaaxe 6y ago

Fiat money is just as much a pyramid scheme, so the real argument becomes about monetary policy

pfortuny 6y ago

The expensiveness of bitcoin comes, in part, as a consequence of removing trust from the system. Trust (that the State will accept this paper as a measure of my rights, essentially, and that this paper that someone is giving me fulfills that property) is really really expensive and has taken centuries to be built. In that sense, a decentralized trust-less exchange system needs to replace that value (trust) with another (in this caase, proof-of-work and the huge size of the ledger). Not easy...

zhdc1 6y ago

All of these arguments also apply to precious metals and gemstones. Gold, for instance, is extremely energy intensive/wasteful to mine, heavily tracked, and (until recently) had little utilitarian/industrial value outside of jewelry.

aww_dang 6y ago

Nano addresses these concerns, excluding privacy. The node's API is also straightforward. Nano was the first cryptocurrency I landed on when I wanted to pay players microtransactions in a browser based RPG. It works as described without undue hype. Solves the payment problem without promising to do everything under the sun. Transactions are settled instantly and without fees. Rent seeking miners are taken out of the equation. Developers of services are incentivized to run nodes to have access to the network. If cryptocurrency isn't intended to be used as a currency, only traded on to others or used in some perpetually forthcoming usecase - then concerns about it simply being a finance scheme may be on target. https://en.wikipedia.org/wiki/Nano_(cryptocurrency) https://en.wikipedia.org/wiki/Nano_(cryptocurrency) https://docs.nano.org/whitepaper/english/ https://docs.nano.org/whitepaper/english/

jjcm 6y ago

Etherium 2.0's move to proof of stake will help with the ridiculous energy usage that bitcoin has, but I don't see a blockchain ever being able to handle the traffic of a major card processor like visa. Even with sharding, your latency between shards compounds to the point where the UX is degraded. What I see value in for a blockchain is store of value (which arguably is basically a pyramid scheme), smart contracts for provable logic-based transactions, niche database uses, and as you brought up: drugs (or more accurately, private/anonymous payments). Bitcoin is really a poor choice for both the smart contracts and niche databases, which leaves it with store of value and drugs. Once law enforcement legislates it to the point where it becomes impractical for drugs, at that point it is just a store of value. It holds no use except to become more valuable the more people buy into it, which is just a pyramid scheme.

cturner 6y ago
The definition for /pyramid scheme/ is straightforward, and Bitcoin does not match it.

deleted 6y ago

[deleted]

G3n0t 6y ago

> Proof of work is inherently wasteful. But it's a necessary evil for a _distributed_ currency. It's a way to protect payment validation from being controlled by a single operator by making a "hostile take over" very expensive. IMHO criticizing Bitcoin for its "proof of work" algorithm only converys a serious lack of understanding of how crypto currencies actually work. There is an alternative, namely, the "proof of stake" scheme that Ethereum is going to switch over to but it has other short comings that might or might not outweigh the benefits of energy savings. > - The ever expanding blockchain is wasteful (in storage, computation, network). Well, the blockchain's current size is 323.54 GB. That's quite a lot but can be stored easily on a $100 SSD. Using $100 worth of storage to maintain an asset market of roughly 600 billion dollars is useful trade off, I would say. Of course, I know the blockchain is being replicated all over the planet but Google's cloud storage probably dwarves its storage requirements. > - The throughput is way too slow. Yes, 10 minutes is not very fast. However, compare that to inter bank transactions and this number seems blazingly fast again. However, in my opionion Bitcoin is emerging as an alternative to gold that's primarily used for storing value over long times. It's primary purpose will not be to maintain payment networks. This role will be taken by Ethereum or other alternatives like Stella Lumens, Loopring or Polkadot.

jpmoral 6y ago
> Yes, 10 minutes is not very fast. However, compare that to inter bank transactions and this number seems blazingly fast again Near instant bank transfers have been available in a lot of countries for many years now. Or did you mean something else?
- G3n0t 6y ago
  Well, "SWIFT" international bank transactions require up to 5 work days. Here in Germany, sending money from one bank to another still takes at least one up to three _work_ days. So in the worst case, you're wiring money to sb on Friday and he will receive it by Wednesday. Compare that to 10 minutes required by Bitcoin anywhere on the planet. Of course, there are special purpose banking products to accelerate transactions but they are also more expensive than Bitcoin's miner fee.

tromp 6y ago

Many of these properties follow from the design principles of decentralization and censorship resistance. > Proof of work is inherently wasteful This seems unavoidable for distributing new coins more fairly than just letting the creators print themselves a huge pile out of thin air, which would centralize coin ownership. > The ever expanding blockchain is wasteful (in storage, computation, network). Bandwidth costs are unavoidable for both transaction publishing (censorship resistance) and for verifying the transaction history in the Initial Block Download (decentralization requires widespread full verification), although the latter could in principle be mostly eliminated with a zero knowledge proving system. > Having every transaction recorded forever is the opposite of anonymity This is not necessitated by the design principles. Bitcoin chose to make amounts visible so that total supply could be transparently audited and because Confidential Transactions had yet to be developed (one variety of which is perfectly sound, needing no cryptographic assumptions to guard against inflation). Allowing address re-use seems like a design mistake that could have been avoided, e.g. with stealth addresses. > The energy usage is insane. This is a direct consequence of the high price of Bitcoin; i.e. needing to secure a high market map against double spending attacks. Which goes back to the top item. > The throughput is way too slow. Even with second layer solutions, we still need on-chain onramps and settlements. Low throughput is the price to pay for censorship resistance.

CyberDildonics 6y ago

The entire bitcoin blockchain is 11 years old and fits in $6 USD of hard drive space. The biggest problem is that the average transaction is now between $10 USD to $17 USD.

chemmail 6y ago

Calling something "wasteful" is merely philosophical. What exactly is wasteful? You eating anything that isn't absolutely required, maybe just some IVs, is that not wasteful? The USAs entire meat chain, is that not wasteful? Transportation when online meetings are fine, is that not wasteful? The universe itself burning out one day, is that not wasteful to existence? Wasteful is not an argument at the end of the day.

DemocracyFTW 6y ago
Jumping from the observation that a given term is of a philosophical nature (whatever that might mean) to the conclusion that it is "not real", hence "irrelevant" is a fallacy. Likewise, observing that not only exhibit A has property P but also exhibits C, D, and E is no proof that property P is irrelevant with respect to A. "Democracy", "freedom", "the law", "the economy"—all of these terms are in the realm of Philosophy and are subject to philosophical discussion, as they ought; none of these is not highly relevant in a universal, everyday, hands-on sense. Likewise, that meat production is wasteful doesn't mean it's a good idea to add yet another wasteful item to a place characterized by finite resources.

alwillis 6y ago

Bitcoins biggest threat may be the decriminalization of drugs, as that is the only use beyond hoarding "HODL"ing right now. This is such a tired and over used trope. How about being the best store of value humans currently have access to? The world's reserve currency--the dollar--is being inflated by trillions and trillions of dollars, with no end in sight. Savings accounts are paying essentially 0% interest; if you take inflation into account, people are losing money everyday they leave their money in these accounts. Countries in the EU have negative interest rates and it won't be too long before we have negative rates in the US. Meanwhile, bitcoin is on its way to becoming a reserve asset and is being seen as a must-own asset by the best and brightest money managers and companies. Bitcoin has been a lifeline in countries where the local currency has failed--like Syria, Venezuela, Argentina. It's allowed people to stay ahead of repressive regimes like in Hong Kong and Nigeria. And it's going to allow people in the United States who's currency is being debased and where inflation is eating away at savings and retirement to have a fighting chance at being able to support themselves in the future. You might want to understand how theft-by-inflation works [1]. Or how the dollar is gradually losing its status as the world reserve currency [2]. It's not going to be pretty. [1] "Masters and Slaves of Money"—https://breedlove22.medium.com/masters-and-slaves-of-money-255ecc93404f https://breedlove22.medium.com/masters-and-slaves-of-money-2... [2] "The Fraying of the US Global Currency Reserve System"—https://www.lynalden.com/fraying-petrodollar-system/ https://www.lynalden.com/fraying-petrodollar-system/