11 ms·

What’s a digital currency without mining, and how does it differ from regular fiat money today?

gruez 6y ago
Presumably he's talking about proof of stake. It's not a prefect replacement for proof of work, but it's also less centralized than the current fiat system.
feawwefawefa 6y ago
people on HN like to whine about the environment. they love the statistic that bitcoin uses more energy than argentina. ask them 6 months ago (when bitcoin still used the same amount of energy as argentina) and they will tell you how much they love btc and decentralization.
- whoknew1122 6y ago
  It's almost as if people's thoughts can change and evolve. I honestly wonder when and how changing your mind became a bad thing. Show me someone whose thoughts or ideas don't evolve and I'll show you someone who's wasting their life.
  - virtue3 6y ago
    I suspect a lot of people didn't realize how much power was being used for bitcoin. New information should ideally get people to re-evaluate their initial opinions about something (ideally).
    - cesarb 6y ago
      > I suspect a lot of people didn't realize how much power was being used for bitcoin. And another thing which changed is that, every time the price of Bitcoin increases, it can (and will) use more power (the amount of power a Bitcoin miner uses is limited by how much power it can buy with the mining rewards, because if it used more power than that, it would be mining at a loss). There's a lot of difference between when one Bitcoin was USD 1, when it was USD 4000, and now that it's over USD 50000. Someone who was OK with how much power the Bitcoin network used back when the per-block mining reward was around USD 50, might not be OK with how much power the Bitcoin network uses now that the per-block mining reward is over USD 325000.
  - ravenstine 6y ago
    Could be that, and it can also be that people are capable of being massive hypocrites. Nobody who opposes Bitcoin on environmental grounds has anything to say about the sheer waste and pollution that most of us take part in. If Bitcoin is so bad for using as much energy as Argentina, then we should stop using energy to stream entertainment, which we are doing now more than ever.
    - whoknew1122 6y ago
      > "Nobody who opposes Bitcoin on environmental grounds has anything to say about the sheer waste and pollution that most of us take part in." [citation needed] > "If Bitcoin is so bad for using as much energy as Argentina, then we should stop using energy to stream entertainment, which we are doing now more than ever." Until we get off fossil-fuel based electricity, all environmental arguments are going to be based off marginal utility. There's a trade-off. I personally think that Bitcoin at best is an unregulated financial market and at worst fake internet money. The fact mining contributes to more energy consumption than entire countries is worrying to me. It's a problem that's only going to get worse. On the other hand, let's look at your argument about streaming entertainment. Currently plugged into my house, I have 2 TVs and 4 computer monitors. I use these to stream entertainment (among other things). Is it wasteful? Yeah, but entertainment is necessary for a balanced life and mental well-being. Are my 6 screens wasteful? To some extent, although most of that waste is a byproduct of manufacturing where the 'off' button doesn't turn my screens off; it just puts then in a sleep mode which consumes power. So all 6 screens consume some amount of electricity 24 hours a day. This is a problem which should be fixed. This is a problem with most modern appliances. It contributes to enough excess energy consumption that it even has its own name--vampire electricity. You see? People can have critiques of both at the same time. But even if you take all the vampire electricity my appliances consume, it's still a drop in the bucket compared with what it takes to mine fake internet money.
      - deleted 6y ago
        [deleted]
    - websites2323 6y ago
      Hi, I oppose bitcoin and have lots to say about the sheer waste and pollution that most of us take part in. I also put my money where my mouth is! I drive electric and charge only at my employer, which uses 100% solar. I don’t eat meat. I shop at package free groceries. I eat as much local food as possible. I don’t stream movies or music. We exist, my friend, but that’s besides the point. There are no saints in systems as complex as energy. You can only take aim at the big stuff and hope you can make an impact. Bitcoin is entirely unnecessary, unlike eating and driving. Participating is a choice. And it’s a bad choice.
- aww_dang 6y ago
  Personally, I am of the opinion that individuals should be able to use electricity however they choose, provided they pay a market rate for it. Interesting to see HN praising the CCP's policies in this regard.
  - blululu 6y ago
    Market rates for electricity do not exist in a country where the power grid is controlled by communists. Given that most countries subsidize electricity consumption the same basic issue applies. Looking beyond naive libertarianism, there is the bigger question of waste and whether people are entitled to consume a resource regardless of the application. Historically efficiency was seen as a virtue, but modern attitudes are more open to waste. It’s a fair question to ask whether this is an aberration.
    - aww_dang 6y ago
      >Market rates for electricity do not exist in a country where the power grid is controlled by communists. Given that most countries subsidize electricity consumption the same basic issue applies. Yes, that's a problem in my view. Observing that it is the status quo doesn't rationalize it or further prohibitions to defend price controls. I'm not sure if you would regard it as naive, but price controls are widely regarded as inefficient distortions of a market. https://en.wikipedia.org/wiki/Price_controls#Criticism https://en.wikipedia.org/wiki/Price_controls#Criticism
      - sudosysgen 6y ago
        I live in Québec. We have state run electricty, which turns a profit and isn't subsidized. It's by far the cheapest in North America, and the essentially the cheapest unsubsidized energy in the world. The grid is also 99.9% renewable (everywhere except for some islands) So the idea that price controls and nationalization somehow causes inefficiency in this case is just a tale economists tell themselves. In the real world, all of the most successful energy grids use those tools. In other words, you're arguing against reality.
SkipperCat 6y ago
I don't think there is any difference. When the Federal Reserve purchases securities in the markets, they do it by just "creating" money. I think they literally just type in a number into a computer and use those newly created funds. You could do this in any centrally digitally managed currency too. You could probably do it with a blockchain currency too if you get enough people to agree to the change. Of course, if you don't like this, there's always the gold standard.....
- gruez 6y ago
  >I don't think there is any difference. [...] > You could probably do it with a blockchain currency too if you get enough people to agree to the change. That's a huge difference. The fed can print money whenever they want, whereas with bitcoin they need to convince a supermajority of the miners and users, otherwise they end up with a forked chain like bitcoin cash/gold/sv.
TacticalCoder 6y ago
> What’s a digital currency without mining... I take it GP meant mining without gigantic electricity consumption: so not proof-of-stake but proof-of-work > ... and how does it differ from regular fiat money today? There was a discussion here a few days ago where people were trying to determine how many swiss bills were circulating... Someone commented on the irony, in a thread hating on cryptocurrencies, that anyone at anytime can know exactly how many, say, Bitcoin or Ethereum do actually exists. There are other difference between government issued money and cryptocurrencies: for example some cryptocurrencies have a fixed, carved in stone, supply curve and so you can know beforehand exactly how many are going to be mined each year. This is quite different, for example, from Venezuela's bolivar: Maduro just announced that 1 000 0000 bolivian bills were going to be printed now.
- yardstick 6y ago
  > that anyone at anytime can know exactly how many, say, Bitcoin or Ethereum do actually exists. Isn’t there a distinction between issued/minted currency and the amount in circulation? With Bitcoin and physical cash you know how many coins are minted and notes issued etc. But how much of that is in circulation? Does lost physical currency still qualify as in circulation? What about Bitcoin wallets long lost by their owners (such as the British man who keeps wanting a rubbish dump to search for a HDD he threw out years ago, or the person who forgot his password and has 2 attempts left until the wallet self destructs). I don’t think either currency can accurately track the amount in circulation.
  - maxerickson 6y ago
    The blockchain provides a complete record of the movement of bitcoins. So for a given address, you can see how long value has been there, and the addresses that participated in the send transaction, and so on. You can't from there figure out how many coins are still available for circulation, but you can see how much has moved (or hasn't moved) over any period of time (last day, last week, last year, etc). From there you can define circulation statistics, like 'value that hasn't moved in 3 years' or whatever. For paper money, the fraction that gets destroyed is probably small enough to not matter.
analog31 6y ago
From what I've read, mining makes digital currency subject to control by governments that can subsidize or even monopolize the mining process. So a mining-free currency might be closer to the dream of a currency that is not subject to government manipulation. That's assuming a different technology doesn't just expose a different hack.
- gruez 6y ago
  >From what I've read, mining makes digital currency subject to control by governments that can subsidize or even monopolize the mining process. If governments can subsidize the mining process, can't they also subsidize the staking process?
  - analog31 6y ago
    Probably. I'm guessing that a currency that's permanently free from government interference is a pipe dream. Or perhaps more likely, a cat and mouse game like trying to keep a computer system from getting hacked. Each currency will have a honeymoon period before people figure out how to corrupt it, so the solution may be to live with a constant evolution of currencies.
dfrankow 6y ago
I think Nano just handed out a fixed amount of tokens through captchas. Now no more will ever be created, but they can still be transferred.

Presumably he's talking about proof of stake. It's not a prefect replacement for proof of work, but it's also less centralized than the current fiat system.

feawwefawefa 6y ago

people on HN like to whine about the environment. they love the statistic that bitcoin uses more energy than argentina. ask them 6 months ago (when bitcoin still used the same amount of energy as argentina) and they will tell you how much they love btc and decentralization.

whoknew1122 6y ago
It's almost as if people's thoughts can change and evolve. I honestly wonder when and how changing your mind became a bad thing. Show me someone whose thoughts or ideas don't evolve and I'll show you someone who's wasting their life.
- virtue3 6y ago
  I suspect a lot of people didn't realize how much power was being used for bitcoin. New information should ideally get people to re-evaluate their initial opinions about something (ideally).
  - cesarb 6y ago
    > I suspect a lot of people didn't realize how much power was being used for bitcoin. And another thing which changed is that, every time the price of Bitcoin increases, it can (and will) use more power (the amount of power a Bitcoin miner uses is limited by how much power it can buy with the mining rewards, because if it used more power than that, it would be mining at a loss). There's a lot of difference between when one Bitcoin was USD 1, when it was USD 4000, and now that it's over USD 50000. Someone who was OK with how much power the Bitcoin network used back when the per-block mining reward was around USD 50, might not be OK with how much power the Bitcoin network uses now that the per-block mining reward is over USD 325000.
- ravenstine 6y ago
  Could be that, and it can also be that people are capable of being massive hypocrites. Nobody who opposes Bitcoin on environmental grounds has anything to say about the sheer waste and pollution that most of us take part in. If Bitcoin is so bad for using as much energy as Argentina, then we should stop using energy to stream entertainment, which we are doing now more than ever.
  - whoknew1122 6y ago
    > "Nobody who opposes Bitcoin on environmental grounds has anything to say about the sheer waste and pollution that most of us take part in." [citation needed] > "If Bitcoin is so bad for using as much energy as Argentina, then we should stop using energy to stream entertainment, which we are doing now more than ever." Until we get off fossil-fuel based electricity, all environmental arguments are going to be based off marginal utility. There's a trade-off. I personally think that Bitcoin at best is an unregulated financial market and at worst fake internet money. The fact mining contributes to more energy consumption than entire countries is worrying to me. It's a problem that's only going to get worse. On the other hand, let's look at your argument about streaming entertainment. Currently plugged into my house, I have 2 TVs and 4 computer monitors. I use these to stream entertainment (among other things). Is it wasteful? Yeah, but entertainment is necessary for a balanced life and mental well-being. Are my 6 screens wasteful? To some extent, although most of that waste is a byproduct of manufacturing where the 'off' button doesn't turn my screens off; it just puts then in a sleep mode which consumes power. So all 6 screens consume some amount of electricity 24 hours a day. This is a problem which should be fixed. This is a problem with most modern appliances. It contributes to enough excess energy consumption that it even has its own name--vampire electricity. You see? People can have critiques of both at the same time. But even if you take all the vampire electricity my appliances consume, it's still a drop in the bucket compared with what it takes to mine fake internet money.
    - deleted 6y ago
      [deleted]
  - websites2323 6y ago
    Hi, I oppose bitcoin and have lots to say about the sheer waste and pollution that most of us take part in. I also put my money where my mouth is! I drive electric and charge only at my employer, which uses 100% solar. I don’t eat meat. I shop at package free groceries. I eat as much local food as possible. I don’t stream movies or music. We exist, my friend, but that’s besides the point. There are no saints in systems as complex as energy. You can only take aim at the big stuff and hope you can make an impact. Bitcoin is entirely unnecessary, unlike eating and driving. Participating is a choice. And it’s a bad choice.
aww_dang 6y ago
Personally, I am of the opinion that individuals should be able to use electricity however they choose, provided they pay a market rate for it. Interesting to see HN praising the CCP's policies in this regard.
- blululu 6y ago
  Market rates for electricity do not exist in a country where the power grid is controlled by communists. Given that most countries subsidize electricity consumption the same basic issue applies. Looking beyond naive libertarianism, there is the bigger question of waste and whether people are entitled to consume a resource regardless of the application. Historically efficiency was seen as a virtue, but modern attitudes are more open to waste. It’s a fair question to ask whether this is an aberration.
  - aww_dang 6y ago
    >Market rates for electricity do not exist in a country where the power grid is controlled by communists. Given that most countries subsidize electricity consumption the same basic issue applies. Yes, that's a problem in my view. Observing that it is the status quo doesn't rationalize it or further prohibitions to defend price controls. I'm not sure if you would regard it as naive, but price controls are widely regarded as inefficient distortions of a market. https://en.wikipedia.org/wiki/Price_controls#Criticism https://en.wikipedia.org/wiki/Price_controls#Criticism
    - sudosysgen 6y ago
      I live in Québec. We have state run electricty, which turns a profit and isn't subsidized. It's by far the cheapest in North America, and the essentially the cheapest unsubsidized energy in the world. The grid is also 99.9% renewable (everywhere except for some islands) So the idea that price controls and nationalization somehow causes inefficiency in this case is just a tale economists tell themselves. In the real world, all of the most successful energy grids use those tools. In other words, you're arguing against reality.

SkipperCat 6y ago

I don't think there is any difference. When the Federal Reserve purchases securities in the markets, they do it by just "creating" money. I think they literally just type in a number into a computer and use those newly created funds. You could do this in any centrally digitally managed currency too. You could probably do it with a blockchain currency too if you get enough people to agree to the change. Of course, if you don't like this, there's always the gold standard.....

gruez 6y ago
>I don't think there is any difference. [...] > You could probably do it with a blockchain currency too if you get enough people to agree to the change. That's a huge difference. The fed can print money whenever they want, whereas with bitcoin they need to convince a supermajority of the miners and users, otherwise they end up with a forked chain like bitcoin cash/gold/sv.

TacticalCoder 6y ago

> What’s a digital currency without mining... I take it GP meant mining without gigantic electricity consumption: so not proof-of-stake but proof-of-work > ... and how does it differ from regular fiat money today? There was a discussion here a few days ago where people were trying to determine how many swiss bills were circulating... Someone commented on the irony, in a thread hating on cryptocurrencies, that anyone at anytime can know exactly how many, say, Bitcoin or Ethereum do actually exists. There are other difference between government issued money and cryptocurrencies: for example some cryptocurrencies have a fixed, carved in stone, supply curve and so you can know beforehand exactly how many are going to be mined each year. This is quite different, for example, from Venezuela's bolivar: Maduro just announced that 1 000 0000 bolivian bills were going to be printed now.

yardstick 6y ago
> that anyone at anytime can know exactly how many, say, Bitcoin or Ethereum do actually exists. Isn’t there a distinction between issued/minted currency and the amount in circulation? With Bitcoin and physical cash you know how many coins are minted and notes issued etc. But how much of that is in circulation? Does lost physical currency still qualify as in circulation? What about Bitcoin wallets long lost by their owners (such as the British man who keeps wanting a rubbish dump to search for a HDD he threw out years ago, or the person who forgot his password and has 2 attempts left until the wallet self destructs). I don’t think either currency can accurately track the amount in circulation.
- maxerickson 6y ago
  The blockchain provides a complete record of the movement of bitcoins. So for a given address, you can see how long value has been there, and the addresses that participated in the send transaction, and so on. You can't from there figure out how many coins are still available for circulation, but you can see how much has moved (or hasn't moved) over any period of time (last day, last week, last year, etc). From there you can define circulation statistics, like 'value that hasn't moved in 3 years' or whatever. For paper money, the fraction that gets destroyed is probably small enough to not matter.

analog31 6y ago

From what I've read, mining makes digital currency subject to control by governments that can subsidize or even monopolize the mining process. So a mining-free currency might be closer to the dream of a currency that is not subject to government manipulation. That's assuming a different technology doesn't just expose a different hack.

gruez 6y ago
>From what I've read, mining makes digital currency subject to control by governments that can subsidize or even monopolize the mining process. If governments can subsidize the mining process, can't they also subsidize the staking process?
- analog31 6y ago
  Probably. I'm guessing that a currency that's permanently free from government interference is a pipe dream. Or perhaps more likely, a cat and mouse game like trying to keep a computer system from getting hacked. Each currency will have a honeymoon period before people figure out how to corrupt it, so the solution may be to live with a constant evolution of currencies.

dfrankow 6y ago

I think Nano just handed out a fixed amount of tokens through captchas. Now no more will ever be created, but they can still be transferred.