11 ms·

'Minting' electronic cash (1999)

60 points by noch 5y ago

_Microft 5y ago
Side note: "Minting" sounds so much nicer than "mining". Minting evokes connotations of gold and kings and craftsmen doing skilled work. Mining on the other hand is dirty. I associate digging, holes in the ground, mining waste, depths and darkness with that. Maybe crypto [0] currencies would have had it a tiny bit easier to not look like an environmentally bad idea (this is purely about the looks of it, not reality) if they had not picked such a bad word to begin with? [0] Another bad choice of words, imo
- werds 5y ago
  with your definitions in mind, i think mining is a lot more appropriate, haha
  - _Microft 5y ago
    It is! I meant that they could have whitewashed the concept by using "minting" instead of "mining".
    - politician 5y ago
      Or recycling. "We recycle electrons into coins!"
      - _Microft 5y ago
        Believe it or not but there are people who think that "Bitcoin is a battery" because it can turn energy into money (and "money is easily converted to energy again", Umm... STEM education, we need to have a word because it looks like you are not doing your job properly...). Here is an example: https://twitter.com/balajis/status/1351214402167578626 https://twitter.com/balajis/status/1351214402167578626
        arcticbull 5y ago
        Balaji's take is easily the worst, least coherent take on proof of work to date. An absolute carnival of ignorance motivated by self-interest. The lengths people will do to defend the indefensible because it'll make them rich continues to disappoint.
        heed 5y ago
        I agree it’s a bad take, but the idea in the article he shared is, in my opinion, reasonable and doesn’t talk about BTC being a battery. It talks about crypto mining as a last resort to utilizing excess energy produced by “green” sources (wind turbine), ie energy that cannot be sold to the grid or stored in batteries.
        arcticbull 5y ago
        That's not, however, what the system incentivizes. It incentivizes using the cheapest energy period. Miners are not incentivized to care even the tiniest little bit about where the energy comes from - as evidenced by them re-opening coal plants. [1] It's literally un-doing the progress we've made towards a renewable energy market. It's a fantasy that (a) there's actually tons of energy floating around out there in the wild that can't be stored in some way or transported in some way and (b) that co-locating miners there is more economical than throwing some coal onto the fire. [1] https://qz.com/1250980/an-australian-coal-power-plant-will-reopen-to-help-mine-bitcoins/ https://qz.com/1250980/an-australian-coal-power-plant-will-r...
        billytetrud 5y ago
        It just so happens that energy that otherwise would be wasted is the cheapest energy you can find. Utilizing that is unequivocally good. > It's a fantasy that It absolutely is not a "fantasy". It's called curtailment and it can be greater than 50% at certain times of day in certain areas. Ontario wind production for example curtails 25% of it's energy on average. Please do your research before speaking with so much authority. https://www.iea.org/commentaries/more-of-a-good-thing-is-surplus-renewable-electricity-an-opportunity-for-early-decarbonisation https://www.iea.org/commentaries/more-of-a-good-thing-is-sur...
- madars 5y ago
  Minting implies exercising seigniorage authority, whereas mining physical commodities is naturally distributed (no central authority). The latter term is much more appropriate to describe issuance-via-PoW.
  - Jiocus 5y ago
    Before you mint a coin, you have to mine the metal ore :)
  - bsamuels 5y ago
    Miners technically do have seigniorage authority since they can collectively decide to change the underlying cryptocurrency. Miner's de facto control of the network is a huge problem. It's why Bitcoin will never solve its energy use issue, and why Ethereum set up a "delayed difficulty bomb" to force miners to accept changes to the network.
    - kinghajj 5y ago
      > Miners technically do have seigniorage authority since they can collectively decide to change the underlying cryptocurrency. The failure of the Bitcoin2x proposal and adoption of Segwit in 2017 demonstrated that miners do not have as much control as they might like to think. If node operators don't accept their blocks, they lose money.
      - rspeele 5y ago
        I agree that miners don't have control if the social consensus goes against them I think the exchanges have the most power, given the current state of the network where very, very few businesses will directly exchange goods and services for coins and most use of Bitcoin is done by converting to fiat through an exchange. Looking back to 2017, there was the Bitcoin Cash fork. As I recall, Coinbase handled this in a fairly neutral way: if you held 1.0 BTC on the exchange, after the fork you held 1.0 BTC and 1.0 BCH, and trading was supported for both, so the market found a price for each. The only bias here is letting Bitcoin Core keep the "BTC" ticker symbol. Suppose the top 3 exchanges had done the same thing, but treated Bitcoin Cash as the "real" one that trades under the BTC symbol (and is referred to on the exchange as just "Bitcoin"), and Bitcoin Core as the "fork" with a new symbol like BCC. Maybe even call it something lame like "Bitcoin Classic". Would that have affected which one won? Maybe a bit... but enough to make a difference, I'm not sure. What if they really wanted Bitcoin Cash to win, and went a step further? What if they gave Bitcoin Cash the BTC ticker and didn't implement trading pairs for "Bitcoin Classic"? They'd still let you withdraw your forked "Bitcoin Classic" to your self-custody wallet, and you could send it from there to some other small-time exchange to try to dump it... but you couldn't trade it on Coinbase, Kraken, or Binance. What would have happened then? There's no way of knowing, but if you asked me to guess, I'd say that what we call Bitcoin Cash today would've won. Bear in mind, for those who have strong opinions about BCH vs BTC... I have no opinion about which one is better or which one should be the "real bitcoin". I'm just speculating that, if they had wanted to, two or three big exchanges could have swayed that decision the other way.
- ElvisTrout 5y ago
  I think given that one of the key aims of crypto was moving away from an inflationary model where new money can easily be created using a term other than minting was a conscious and considered move. Mining sounds harder and it is!
- wavefunction 5y ago
  Minting has been throughout its long history associated with fraud. There's a reason people used to have to weigh the minted coins they received from transactions to make sure the minter was delivering the amount of gold or silver or other backing metal in the coin's alloy. Just another perspective on minting...
- TacticalCoder 5y ago
  I'm not so sure "cryptocurrencies" is a bad word: it's basically cryptography everywhere. But transforming "crypto" to mean "cryptocurrency" is bad I agree. Ethereum seems to be very serious about moving to proof-of-stake. It is a big project and they don't seem very concerned about the papers saying that "proof of stake cannot possibly work". I don't know if PoS can work or not but it's going to be costly for attackers to try to find out (as they'll get they staked deposit slashed if they try to attack the blockchain).
  - operator-name 5y ago
    These days the phrase cryptocurrency is a misnomer, very few blockchain projects are designed to be just a currency. Ethereum is the native currency of the Ethereum blockchain but Ethereum is not only a currency but a smart contact platform. Tokens on these platforms are rarely currencies too, as an example they can represent voting power, a stake in a software project or virtual goods. Even blockchain is becoming a misnomer as most base player platforms are using more intersting techniques.
- whytaka 5y ago
  Maybe the transition to Proof of Stake is the time to change terminology. Proof of Work is really a lot like mining, digging around to see if a nugget is there, while Proof of Stake is a community of self-interested institutions sharing the same signature.
hprotagonist 5y ago
1995: https://www.electricinca.com/56/stephenson/simoleon.pdf https://www.electricinca.com/56/stephenson/simoleon.pdf
- 1e-9 5y ago
  Fun and interesting work of foresight from 26 years ago! I assume the DigiCash promotion was part of the inspiration... or maybe it was vice versa? Either way, an interesting connection to the article's authors as well.
pjc50 5y ago
Ooh, the original Chaum paper! Chaum "coins" behave a lot more like bearer instruments or "free banking" notes; they're IOUs issued by a bank that can be traded. The advantage over a database is that there's some ability to do offline transactions, although the double-spend prevention is done through the originating bank. The advantage over bitcoin is that is uses a tiny fraction of the energy. It's also naturally a "stablecoin", rather than highly volatile.
- wyager 5y ago
  The disadvantage compared to Bitcoin is that it’s hardly meaningfully different from using Paypal or something.
  - helen___keller 5y ago
    How do you figure?
    - capableweb 5y ago
      In short, the suggested method by Chaum requires a trusted 3rd party (bank). The topmost invention of Bitcoin is that it requires no trusted 3rd party.
      - 1e-9 5y ago
        > it requires no trusted 3rd party Or, at least not the same 3rd parties. Instead, it requires trusting a much larger host of other 3rd parties, many of which are anonymous, and likely none of which will provide recourse if you lose your bitcoin due to their failure or malicious intent.[1] Bitcoin represents a shifting of trust; not an elimination of trust. That's not to say there is no value. It's just that there are significant risks involving trust that are overlooked by most holders. [1] https://www.schneier.com/blog/archives/2019/02/blockchain_and_.html https://www.schneier.com/blog/archives/2019/02/blockchain_an...
        5y ago
ineedasername 5y ago
22 Years later and we still don't have a viable digital equivalent to cash for day to day transactions.
- billytetrud 5y ago
  What about the obvious one i could mention
  - kristianp 5y ago
    Dogecoin?
    - billytetrud 5y ago
      Lol
billytetrud 5y ago
The arrogant ignorance about bitcoin on hacker news is just utterly staggering. So much holier than thou hatred of one of the most significant inventions of the 21st century.
- deleted 5y ago
  [deleted]
ChuckMcM 5y ago
Ah yes, the Chaum paper. The "Hey here is a cool thing you could do and solve a billion problems. Oh by the way we've patented the shit out of it and our royalty rates are pretty extreme. Ha ha ha!" I think the last of the patents expire in 2023 which allow for an end to end zero knowledge based local transaction ledger system. That will be useful.

60 points by noch 5y ago

Side note: "Minting" sounds so much nicer than "mining". Minting evokes connotations of gold and kings and craftsmen doing skilled work. Mining on the other hand is dirty. I associate digging, holes in the ground, mining waste, depths and darkness with that. Maybe crypto [0] currencies would have had it a tiny bit easier to not look like an environmentally bad idea (this is purely about the looks of it, not reality) if they had not picked such a bad word to begin with? [0] Another bad choice of words, imo

werds 5y ago
with your definitions in mind, i think mining is a lot more appropriate, haha
- _Microft 5y ago
  It is! I meant that they could have whitewashed the concept by using "minting" instead of "mining".
  - politician 5y ago
    Or recycling. "We recycle electrons into coins!"
    - _Microft 5y ago
      Believe it or not but there are people who think that "Bitcoin is a battery" because it can turn energy into money (and "money is easily converted to energy again", Umm... STEM education, we need to have a word because it looks like you are not doing your job properly...). Here is an example: https://twitter.com/balajis/status/1351214402167578626 https://twitter.com/balajis/status/1351214402167578626
      - arcticbull 5y ago
        Balaji's take is easily the worst, least coherent take on proof of work to date. An absolute carnival of ignorance motivated by self-interest. The lengths people will do to defend the indefensible because it'll make them rich continues to disappoint.
        heed 5y ago
        I agree it’s a bad take, but the idea in the article he shared is, in my opinion, reasonable and doesn’t talk about BTC being a battery. It talks about crypto mining as a last resort to utilizing excess energy produced by “green” sources (wind turbine), ie energy that cannot be sold to the grid or stored in batteries.
        arcticbull 5y ago
        That's not, however, what the system incentivizes. It incentivizes using the cheapest energy period. Miners are not incentivized to care even the tiniest little bit about where the energy comes from - as evidenced by them re-opening coal plants. [1] It's literally un-doing the progress we've made towards a renewable energy market. It's a fantasy that (a) there's actually tons of energy floating around out there in the wild that can't be stored in some way or transported in some way and (b) that co-locating miners there is more economical than throwing some coal onto the fire. [1] https://qz.com/1250980/an-australian-coal-power-plant-will-reopen-to-help-mine-bitcoins/ https://qz.com/1250980/an-australian-coal-power-plant-will-r...
        billytetrud 5y ago
        It just so happens that energy that otherwise would be wasted is the cheapest energy you can find. Utilizing that is unequivocally good. > It's a fantasy that It absolutely is not a "fantasy". It's called curtailment and it can be greater than 50% at certain times of day in certain areas. Ontario wind production for example curtails 25% of it's energy on average. Please do your research before speaking with so much authority. https://www.iea.org/commentaries/more-of-a-good-thing-is-surplus-renewable-electricity-an-opportunity-for-early-decarbonisation https://www.iea.org/commentaries/more-of-a-good-thing-is-sur...
madars 5y ago
Minting implies exercising seigniorage authority, whereas mining physical commodities is naturally distributed (no central authority). The latter term is much more appropriate to describe issuance-via-PoW.
- Jiocus 5y ago
  Before you mint a coin, you have to mine the metal ore :)
- bsamuels 5y ago
  Miners technically do have seigniorage authority since they can collectively decide to change the underlying cryptocurrency. Miner's de facto control of the network is a huge problem. It's why Bitcoin will never solve its energy use issue, and why Ethereum set up a "delayed difficulty bomb" to force miners to accept changes to the network.
  - kinghajj 5y ago
    > Miners technically do have seigniorage authority since they can collectively decide to change the underlying cryptocurrency. The failure of the Bitcoin2x proposal and adoption of Segwit in 2017 demonstrated that miners do not have as much control as they might like to think. If node operators don't accept their blocks, they lose money.
    - rspeele 5y ago
      I agree that miners don't have control if the social consensus goes against them I think the exchanges have the most power, given the current state of the network where very, very few businesses will directly exchange goods and services for coins and most use of Bitcoin is done by converting to fiat through an exchange. Looking back to 2017, there was the Bitcoin Cash fork. As I recall, Coinbase handled this in a fairly neutral way: if you held 1.0 BTC on the exchange, after the fork you held 1.0 BTC and 1.0 BCH, and trading was supported for both, so the market found a price for each. The only bias here is letting Bitcoin Core keep the "BTC" ticker symbol. Suppose the top 3 exchanges had done the same thing, but treated Bitcoin Cash as the "real" one that trades under the BTC symbol (and is referred to on the exchange as just "Bitcoin"), and Bitcoin Core as the "fork" with a new symbol like BCC. Maybe even call it something lame like "Bitcoin Classic". Would that have affected which one won? Maybe a bit... but enough to make a difference, I'm not sure. What if they really wanted Bitcoin Cash to win, and went a step further? What if they gave Bitcoin Cash the BTC ticker and didn't implement trading pairs for "Bitcoin Classic"? They'd still let you withdraw your forked "Bitcoin Classic" to your self-custody wallet, and you could send it from there to some other small-time exchange to try to dump it... but you couldn't trade it on Coinbase, Kraken, or Binance. What would have happened then? There's no way of knowing, but if you asked me to guess, I'd say that what we call Bitcoin Cash today would've won. Bear in mind, for those who have strong opinions about BCH vs BTC... I have no opinion about which one is better or which one should be the "real bitcoin". I'm just speculating that, if they had wanted to, two or three big exchanges could have swayed that decision the other way.
ElvisTrout 5y ago
I think given that one of the key aims of crypto was moving away from an inflationary model where new money can easily be created using a term other than minting was a conscious and considered move. Mining sounds harder and it is!
wavefunction 5y ago
Minting has been throughout its long history associated with fraud. There's a reason people used to have to weigh the minted coins they received from transactions to make sure the minter was delivering the amount of gold or silver or other backing metal in the coin's alloy. Just another perspective on minting...
TacticalCoder 5y ago
I'm not so sure "cryptocurrencies" is a bad word: it's basically cryptography everywhere. But transforming "crypto" to mean "cryptocurrency" is bad I agree. Ethereum seems to be very serious about moving to proof-of-stake. It is a big project and they don't seem very concerned about the papers saying that "proof of stake cannot possibly work". I don't know if PoS can work or not but it's going to be costly for attackers to try to find out (as they'll get they staked deposit slashed if they try to attack the blockchain).
- operator-name 5y ago
  These days the phrase cryptocurrency is a misnomer, very few blockchain projects are designed to be just a currency. Ethereum is the native currency of the Ethereum blockchain but Ethereum is not only a currency but a smart contact platform. Tokens on these platforms are rarely currencies too, as an example they can represent voting power, a stake in a software project or virtual goods. Even blockchain is becoming a misnomer as most base player platforms are using more intersting techniques.
whytaka 5y ago
Maybe the transition to Proof of Stake is the time to change terminology. Proof of Work is really a lot like mining, digging around to see if a nugget is there, while Proof of Stake is a community of self-interested institutions sharing the same signature.

hprotagonist 5y ago

1995: https://www.electricinca.com/56/stephenson/simoleon.pdf https://www.electricinca.com/56/stephenson/simoleon.pdf

1e-9 5y ago
Fun and interesting work of foresight from 26 years ago! I assume the DigiCash promotion was part of the inspiration... or maybe it was vice versa? Either way, an interesting connection to the article's authors as well.

pjc50 5y ago

Ooh, the original Chaum paper! Chaum "coins" behave a lot more like bearer instruments or "free banking" notes; they're IOUs issued by a bank that can be traded. The advantage over a database is that there's some ability to do offline transactions, although the double-spend prevention is done through the originating bank. The advantage over bitcoin is that is uses a tiny fraction of the energy. It's also naturally a "stablecoin", rather than highly volatile.

wyager 5y ago
The disadvantage compared to Bitcoin is that it’s hardly meaningfully different from using Paypal or something.
- helen___keller 5y ago
  How do you figure?
  - capableweb 5y ago
    In short, the suggested method by Chaum requires a trusted 3rd party (bank). The topmost invention of Bitcoin is that it requires no trusted 3rd party.
    - 1e-9 5y ago
      > it requires no trusted 3rd party Or, at least not the same 3rd parties. Instead, it requires trusting a much larger host of other 3rd parties, many of which are anonymous, and likely none of which will provide recourse if you lose your bitcoin due to their failure or malicious intent.[1] Bitcoin represents a shifting of trust; not an elimination of trust. That's not to say there is no value. It's just that there are significant risks involving trust that are overlooked by most holders. [1] https://www.schneier.com/blog/archives/2019/02/blockchain_and_.html https://www.schneier.com/blog/archives/2019/02/blockchain_an...
      - 5y ago

ineedasername 5y ago

22 Years later and we still don't have a viable digital equivalent to cash for day to day transactions.

billytetrud 5y ago
What about the obvious one i could mention
- kristianp 5y ago
  Dogecoin?
  - billytetrud 5y ago
    Lol

billytetrud 5y ago

The arrogant ignorance about bitcoin on hacker news is just utterly staggering. So much holier than thou hatred of one of the most significant inventions of the 21st century.

deleted 5y ago
[deleted]

ChuckMcM 5y ago

Ah yes, the Chaum paper. The "Hey here is a cool thing you could do and solve a billion problems. Oh by the way we've patented the shit out of it and our royalty rates are pretty extreme. Ha ha ha!" I think the last of the patents expire in 2023 which allow for an end to end zero knowledge based local transaction ledger system. That will be useful.