10 ms·

Why Can't Computing at the Heart of Bitcoin Be More Useful?

59 points by tmfi 5y ago

zMiller 5y ago
FWIW there's a lot of half baked arguments going around the space, so a few comments for anyone genuinely interested in evaluating facts: - The usage of electricity in Bitcoin is a feature not a bug. It's designed to use the most democratic and ubiquitous commodity avalible. Any nation/individual can evaluate their electrical opportunity cost and at any point make the decision to dedicate resources to towards re-balancing the network without permission. This is not possible with proof of stake. - We produce about 160,000 TWh of power, ~50,000 TWh is wasted due to inefficiencies. Bitcoin using 120 TWh (0.25% of wasted power) - A lot of Power projects get scraped due to inconsistencies in demand. Random Ex: Texas power outages during summer peak AC usage. It's infeasible to spin up and spin down extra generators to meet spikes in demand. #Bitcoin fixes this by providing excess supply a discounted demand during normal hours that can be routed away during peak needs else where. Ditto for renewables. - Bonus: SHA-256 did not get broken this week.
- _Microft 5y ago
  How low does the energy price have to be that someone could currently expect to profitably mine Bitcoin on commodity hardware? (I read "without permission" that one cannot expect to have specialized hardware available as import of mining rigs could be regulated).
  - zMiller 5y ago
    It's a question of opportunity cost of electricity, not absolute numbers: - You live in a place where the "cost" of mining = Electricity + Amortized cost of mining rig. - Someone else lives in a place where "cost" of mining = (Electricity + Amortized Blackmarket Rig Cost) - (5% Inflation per month - 30% reduction in remittance fee -etc..)
- schoen 5y ago
  The biggest trouble here is that pollution externalities of power generation are very commonly not priced into the cost of electricity, so generic incentives to consume energy also very commonly mean incentives to pollute more. > Random Ex: Texas power outages during summer peak AC usage. It's infeasible to spin up and spin down extra generators to meet spikes in demand. #Bitcoin fixes this by providing excess supply a discounted demand during normal hours that can be routed away during peak needs else where. Ditto for renewables. Could be, but are the price signals really in place to make this out work in practice in many places? How many electric utilities have so far succeeded in charging people more at all during peak demand times? (maybe other than electric customers they've identified as industrial) Edit: To be clear, I agree that there is such a thing as surplus power generation and usefully smoothing out demand, I just don't agree that we're in a scenario where cryptocurrency mining is predominantly used or predominantly incentivized to be used that way.
  - zMiller 5y ago
    > The biggest trouble here is that pollution externalities of power generation are very commonly not priced into the cost of electricity, so generic incentives to consume energy also very commonly mean incentives to pollute more. This is true and is a function of context and locale. That's the point. Opportunity cost.
- chatbot2 5y ago
  The solution for the excess supply issue is energy storage, not mining bitcoin. I've worked in clean energy for years, and no energy expert is advocating digital currency mining + increased energy production as a method for meeting demand peaks.
  - zMiller 5y ago
    - While storage is part of the infrastructure, it not the solution -> Not feasible for a large set of energy sources and often falls to the same pitfalls of bringing new power online (remoteness, capacity, etc..). - Actually Bitcoin mining is being adopted by renewable providers as very good solution to offset intermittence and wasted excess. - Further something like Natural gas flaring is something that cannot be stored but can largely routed through mining setups. Which is being adopted at scale.
- jcranmer 5y ago
  > It's designed to use the most democratic and ubiquitous commodity avalible. Which is why Bitcoin mining is only feasible in the areas that have the lowest electricity rate? > We produce about 160,000 TWh of power, ~50,000 TWh is wasted due to inefficiencies. Bitcoin using 120 TWh (0.25% of wasted power) How much of those inefficiencies are caused by Bitcoin? My understanding is that a substantial fraction of that inefficiency is things like "there's power loss in running power from a power plant 100s of miles away" or "converting from AC to DC power induces power loss." In other words, Bitcoin isn't converting electrical waste into useful work, it's just creating more electrical waste on top of the power it directly uses. > A lot of Power projects get scraped due to inconsistencies in demand. Random Ex: Texas power outages during summer peak AC usage. It's infeasible to spin up and spin down extra generators to meet spikes in demand. #Bitcoin fixes this by providing excess supply a discounted demand during normal hours that can be routed away during peak needs else where. Ditto for renewables. Are you aware that the electrical grid already manages demand in large part by telling the smelters to stop smelting for a few hours? There's no need to invent new demand to manage existing demand.
  - zMiller 5y ago
    > Which is why Bitcoin mining is only feasible in the areas that have the lowest electricity rate? Nope, not where Electricity is cheapest, but where it's opportunity cost is lowest. In developed nations with a stable currency this might be high, in others that don't have the privilege of printing the world's reserve to bail out bad decisions, different story. And that's what the market is reflecting. >My understanding is that a substantial fraction of that inefficiency is things like "there's power loss in running power from a power plant 100s of miles away" or "converting from AC to DC power induces power loss Precisely, most Bitcoin mines are remotely located right next to the power plants, partially for this reason. > There's no need to invent new demand to manage existing demand. No you need demand to bring excess supply.
yamrzou 5y ago
A relevant answer from last year by @schoen (upon which I stumbled recently): https://news.ycombinator.com/item?id=22495700 https://news.ycombinator.com/item?id=22495700
- schoen 5y ago
  Thanks for your enthusiasm for my answer. :-) The arbitrarily parameterized instances part is really important. In Bitcoin this is done by feeding prior blocks as input into the hash and then getting the hash to match the adjustable difficulty value, so you can generate new problems automatically based on the history. The Stack Exchange answer that someone linked to here mentions this issue by saying that, if you just had a generic and deterministic useful problem, people could precompute solutions to relevant instances of it, which would amount to premining on the blockchain. The "doing work to verify transactions" aspect comes in when you can make the problem instances actually encode a specific version of history. It's not obvious how to do that where each and every instance would be of intrinsic interest or value to someone. Maybe there's some kind of physical simulation where this could be the case (like, each individual hash represents a particular randomly chosen chemical from a very, very large family of chemicals whose properties are being explored by simulation in some way, or something), but I'm still not sure how you could then make a successful result be easier for other people to verify without repeating the same amount of work. (I'm not familiar with a technique for proving, in an easily-checkable way, that the result of a complex physical simulation was such-and-such.)
prepend 5y ago
I think this question is important to whatever emerges as the “survivor” blockchain that emerges out of this as the one we all use (like the internet companies that survived past all the garbage of 99/2000 before the pop). People need to compute things asynchronously. And they are probably willing to pay. Being able to distribute those out as part of the the mining/validation process would make the energy less “wasted.” I’m not sure why the grid computing schemes of the 00s didn’t pan out, I suspect aws was just simpler and cheaper than trying to assemble networks of nodes using Globus or whatever.
KETpXDDzR 5y ago
In Siberia they heat using btc mining: https://archive.curbed.com/2017/11/9/16619032/bitcoin-mining-heat-homes-siberia-russia https://archive.curbed.com/2017/11/9/16619032/bitcoin-mining...
- Analemma_ 5y ago
  For about the zillionth time, space heating with Bitcoin mining is about one-quarter as energy-efficient as using an actual heat pump and so the “we can heat buildings with it!” argument does not actually excuse the massive energy use at all.
  - bobthebuilders 5y ago
    Bitcoins use an entropy increasing resistance hash function, which makes it terrible for heating and cooling. There's a reason why we should use FedCoin instead of Bitcoin or cash or gold.
    - Syonyk 5y ago
      It... what? If you put 1000W of electrical energy into a Bitcoin miner, you get 1000W of heat out the far end. It's the same efficiency as a resistive element space heater, just has done some work (useful or not, it's still work) on the way through. Same thing for a computer running BOINC or Folding@Home. Power goes in, heat comes out, but you've done something useful in the gap.
      - imtringued 5y ago
        Congratulations, you have reduced your heating bill by $x! You can now spend $x on mining and get more Bitcoin!
        Syonyk 5y ago
        I knew someone last winter, during the spike in Bitcoin prices, who had done the math and figured out that heating on some older Bitcoin miners was profitable. Not only was the value of Bitcoin produced greater than his power cost (not everyone has CA power costs), it meant he wasn't paying anything separately for heat. I think he got them for very little because they "weren't profitable to run" when they were being sold. I typically heat my office (off grid solar shed) in the winter on waste compute - I've got a few computers in here that run Folding@Home/BOINC and I just run them if I've got surplus power. I have propane backup for the really dark grey days ("generator days" if they extend past about a day - it's cheaper to run a gallon of gas through an old generator than to radically expand my battery bank), but most of my winter heat comes from running F@H/BOINC. To the point that on a clear, sunny winter day, I have my window open and fans sucking cold air in or I'll roast in here. I can hold about 1.8kW of load no problem on a clear day. Now that I have solar on the house, I've considered adding an old compute rig or two in there for winter heat. It's less efficient than our heat pump on warm days, but we also get some cold, grey, foggy days in which the heat pump likes to ice up badly. Normally, if the heat pump isn't keeping up with things, the thermostat will call for the backup coils (which are just big resistors) to aid, and they're the same efficiency at turning electricity into heat as a couple computers. Old Xeons aren't amazingly power efficient, but you can also get them for free or nearly so and throw compute at your preferred projects. One can optimize for a wide variety of things - energy spent, compute performed, Bitcoin mined, minimum cost, etc. It works better, and is a lot more efficient, if you look at everything as a system and integrate it. I don't run BOINC tasks on my homeserver when we're in air conditioning season, but I light up a couple cores of them in the winter.
rthomas6 5y ago
Isn't that the entire point of Ethereum and some others?
- eco 5y ago
  Ethereum's current energy intensive Proof of Work is not used to run the smart contracts. It just secures the blockchain, same as Bitcoin. The smart contract execution power requirements are basically non-existant compared to that.
- davesque 5y ago
  Not necessarily. The current verification algorithm doesn't have any useful side effects other than verifying that some amount of computing happened. That will even be true for whatever computation happens as part of proof of stake when it gets rolled out. In other words, and in either case, the only real effect of the computation that happens as part of the verification algorithm is the verification itself. Edit: There's no reason to downvote OP's post, folks. It's a good question that some people may not know the answer to.
ericjang 5y ago
Setting aside the advantages of Proof-of-Stake in terms of energy consumption, and setting aside the "green energy buyer of last resort" argument that the BTC maximalists often say, and setting aside the theoretical requirements for a valid PoW function, I do think it's tricky to argue which computing is inherently "valuable" or "not valuable". There is this intuition that guessing a bunch of random numbers doesn't contribute high-leverage information or "work" to society. That there are a bunch of "information processing" tasks that have more inherent value. But consider SETI@home - is decoding massive amounts of space noise valuable if nothing ever comes of it? Is the computation wasted? Consider Folding@home - there are now far superior algorithms like AlfaFold that take far less compute. Is the computation wasted? Consider all the matrices being multiplied on gigantic neural networks. Some of the resulting models will be enormously valuable to society. Most of it will be dead-on-arrival experiments - simply wasted compute. Even worse, the leverage can go the other way - a ML model can cause far more harm than the energy footprint used to train it. One of the nice properties of the BTC PoW function is that you can be sure that your hash finding algorithm is probably not that sub-optimal.
- ealexhudson 5y ago
  The PoW algorithm needs to effectively pick winners more or less at random, with a consistent number of winners (and gaps between), and the results be self-evidently correct. There are few problems which fit those criteria and are useful...
- whatever1 5y ago
  I prefer to spend resources on something of debatable value (look for aliens), rather than on something that it is indisputably of no value to humanity (proof of tedious work).
  - Syonyk 5y ago
    Why not something of more concretely useful value, like protein folding or climate simulations?
    - 5y ago
ridethebike 5y ago
Am I correct to assume that this is Bargaining stage of grief?
- anigbrowl 5y ago
  Not necessarily. I've wondered the same thing for years while never holding any.
- creata 5y ago
  Who is grieving and what are they grieving about?
  - cheph 5y ago
    32,510.30 USD/BTC
    - arthurcolle 5y ago
      2008 - 0.00 USD/BTC
      - cheph 5y ago
        Come now, you are just bargaining. Just move on and get to the final stage of acceptance and hope.
        arthurcolle 5y ago
        What am I bargaining about again? I trade bitcoin options + the volatility has been great for my own positions. ¯\_(ツ)_/¯ Did you buy the top or something?
  - trutannus 5y ago
    The idea that blockchain will change the world.
    - 5y ago
johnnyapol 5y ago
I was disappointed to not see any mentions of Gridcoin in the Proof of Stake section. It rewards people for their contributions to certain BOINC projects. There definitely is a range of "usefulness" to the projects supported. There are computations like distributed protein folding (Rosetta@Home) all the way to analysis of Minecraft phenomenon (Minecraft@Home). While the Minecraft makes for some very entertaining YouTube videos, the electricity used would probably be better spent on other projects. However, it is still a significant improvement over the computation for Bitcoin. https://gridcoin.us/ https://gridcoin.us/ https://gridcoin.us/guides/whitelist.htm https://gridcoin.us/guides/whitelist.htm
- schoen 5y ago
  Gridcoin's apparent decentralization is much less than a system that uses mining rewards because it uses a committee to maintain a list of projects that can simply assert that people have done relevant work in order to receive rewards. https://gridcoin.us/guides/whitelist.htm https://gridcoin.us/guides/whitelist.htm I haven't totally gamed it out but I think the committee could break Gridcoin by means such as refusing to approve any projects, or approving only "captive" BOINC projects that agree to distribute rewards the way the committee wants. Alternatively, BOINC itself could get shut down, or all of the currently-approved projects could have their credentials taken over by someone else and start issuing rewards in a sketchy way. As I understand it, Gridcoin basically has an identified group of oracles who together appoint and unappoint other oracles who are empowered to issue rewards. While this is clever, it's not very decentralized or permissionless. (Maybe I should pick on BOINC itself even more than the committee as the "authority" here, since I think BOINC's infrastructure is directly used by the whitelisted projects to assign tasks and announce rewards for completing them. So BOINC is really in a position to tamper with every part of the reward process.)
rafaelero 5y ago
If it's useful, it's less costly. If it's less costly, it is less secure.
- lottin 5y ago
  Costly doesn't mean that it has to waste actual resources. The chance of winning a block could be made to be proportional to the amount of bitcoin deposited into some smart contract, instead of proportional to the amount of electricity wasted. The outcome would be exactly the same, and nothing would be wasted.
  - rafaelero 5y ago
    From my short life as a tech guy, I have already realized that there is no 100% secure system. Companies try to hide information and avoid leakages; complicated systems of governance try to avoid malpractices while minimizing bad actors. In the end, it is always a dance between attackers and defenders. Bitcoin has the dumbest way of protecting itself from attackers. But by being the dumbest way, it is also the most predictable. It is like instead of coming up with sophisticated methods of protection that no one knows its weaknesses on the long run, Bitcoin only focuses on building a bigger wall. And that's why I feel more confident.
  - idiotsecant 5y ago
    Sounds like you just reinvented Ethereum proof of stake :)
- Alex3917 5y ago
  This. Bitcoin only remains secure if the amount of electricity being wasted scales with the price. (Otherwise, the payout for double spending would exceed the cost.) For it to actually be a viable store of value at global levels, it would require burning orders of magnitude more electricity than is currently even produced in a year. It mainly appeals to the kind of people who self-identify as being good at math, but who are actually too dumb to do basic arithmetic.
- toolz 5y ago
  very good point - the entire reason for PoW is to "waste" something to prove you're invested in the ecosystem. If you can do useful things with that work, you're not really proving you're invested in BTC, but you may just be invested in whatever that useful side-effect is
Hbruz0 5y ago
This very question has been asked on stackexchange : https://bitcoin.stackexchange.com/questions/331 https://bitcoin.stackexchange.com/questions/331
- koheripbal 5y ago
  Summary: 1. The input need to be unpredictable. Block N is the seed for block N+1. 2. It needs to be difficult to calculate, yet trivially easy to verify. 3. Difficulty needs to be adjustable. The only idea I've ever seen that met all three of these criteria was PrimeCoin's usage of calculating certain Cunningham twin primes (which is still of unclear/tiny value).
  - imtringued 5y ago
    4. You cannot make money off of the work being done because the saved money will then be spent on more mining until we hit a 100% non commercial computation equilibrium
mkl95 5y ago
Bitcoin is an extremely inefficient computing platform. There's no silver lining to BTC, it's simply a moderately big, potentially huge mistake in the history of modern technology.
- danlugo92 5y ago
  Then why did Elon Musk buy 1.5 billion dollars of it?
  - mkl95 5y ago
    I could name a few things I admire about Elon Musk, investing in BTC is not one of them.
  - renewedrebecca 5y ago
    Don’t confuse being rich with being ethical or wise. (This is a kind of appeal to authority, too)
    - danlugo92 5y ago
      Are all of these institutional investors: https://www.forbes.com/sites/michaeldelcastillo/2020/08/06/valuable-sec-data-on-20-institutional-bitcoin-investors-could-soon-disappear/ https://www.forbes.com/sites/michaeldelcastillo/2020/08/06/v... (of which the top 3 already account for more BTC than Elon) also unwise?
      - Tarsul 5y ago
        the argument went from BTC is inefficient (OP) to why did Elon buy (you) to understanding the difference between rich and ethical (last comment) to rich investors being wise or not (you again) To make it short: Just because Elon or rich investors buy doesn't mean they are unwise (for themselves) just that it's bad for the world (ecologically), so basically both can be true. Just the difference between thinking about themselves and thinking about other people as well...
      - 5y ago
soheil 5y ago
It'd be interesting if the proof of work computing at the heart of Bitcoin would do something similar to projects like SETI [0] or Folding@home [1] protein folding project that requires distributed computing. [0] https://setiathome.berkeley.edu/ https://setiathome.berkeley.edu/ [1] https://en.wikipedia.org/wiki/Folding@home https://en.wikipedia.org/wiki/Folding@home
- bastawhiz 5y ago
  They can't be used for proof of work. Hashing for say, Bitcoin, works because you're finding a hash that has certain properties (e.g., having a certain number of leading zeroes). Anyone can take the input (to the hash function) you've found and trivially test that it does indeed produce a hash with those properties. Finding the hash is hard, but testing the hash is easy. Doing SETI/Folding work doesn't work like that. Consider Folding: every unit of work produces useful output. Every input produces equally valuable output. Additionally, the cost of producing the output is high, but the cost of verifying that output is also high. With hashing-based PoW, everyone in the network can verify that a hash with the correct properties was produced. There's no way to say "yes, this one Folding@home worker found something unique". The work needs to be checked, which means a majority of nodes in the network need to verify the output, which means >50% of the network needs to compute the same thing again (you can't rely on less than a majority, or anyone could cheat).
  - soheil 5y ago
    Take SETI for example. If you find an earth like planetoid in a very precise region of sky which takes a long time to sift through pictures of the sky to find then you can just give the coordinates of that point for other nodes to verify. This could be the PoW algorithm.
    - bastawhiz 5y ago
      That's problematic, though. You have a fixed computational difficulty (difficulty can't be scaled up or down).
deleted 5y ago
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rawtxapp 5y ago
It is useful if you consider having a non-governmental/internet native currency a useful thing. If you don't see any value in that, it's gonna be hard to justify that computation.
- genghisjahn 5y ago
  Which of the crypto currencies is a "non-governmental/internet native currency"? From my POV they all seem like proto-NFTs.
  - rawtxapp 5y ago
    Non fungible tokens are by definition not interchangeable. Whereas things like Bitcoin and Ether are fungible, meaning there's no difference between my 1BTC and your 1BTC.
    - genghisjahn 5y ago
      I said they were "proto" NFTs and one thing they have in common, again from my view point, is that you buy them and hope that someone else will pay you more for it later. Beyond that it's just entries of hope on the block chain.
- axlee 5y ago
  There are far less costly ways for the environment to achieve the same results. This is simply unjustifiable, when thousands of people are actively running the planet to the ground to make a quick buck in an online casino.
  - rawtxapp 5y ago
    Great, what's your proposal for the alternative then? Are you talking about the stock market? Or the companies that have already more or less destroyed the planet to extract every last bit of profit?
  - gaara87 5y ago
ssivark 5y ago
There’s the fascinating example of “Nooshare”, which is an interesting proposal for embedding arbitrary Monte-Carlo simulations as the proof challenge! http://web.mit.edu/alex_c/www/nooshare.pdf http://web.mit.edu/alex_c/www/nooshare.pdf It’s an elegant exploitation of the design reasons why the work must involve something like random search (for an easy to validate target). On squinting, it’s kinda like a smart contract for a compute job, where the compute job itself constitutes proof of work to validate the settlement of the contract!
- koheripbal 5y ago
  This was written in 2012. It does not appear that this idea went anywhere - not sure why. It could be the fact that it's not trivially easy to verify the work completed, unlike a hash.
pelasaco 5y ago
I worked 10 years for a Bank. A lot of the mainframe batch processing were unnecessary. A lot of the mainframes running Cobol could be replaced by some smaller hardware and code written in java and C. There are a lot of people working around bad written system or bad written laws/rules, to make the things work. My point is: Wouldn't be fair to compare the amount energy to run bitcoin vs the amount of energy to run the banking system?
- 35fbe7d3d5b9 5y ago
  > Wouldn't be fair to compare the amount energy to run bitcoin vs the amount of energy to run the banking system? Hasn't this comparison been made over and over, and every time it comes out in favor of traditional banking by a mile?
  - pelasaco 5y ago
    could you provide any link or resource for further reading? I never saw anything like that and I would like to know what they are taking into account in this comparison.
    - f00zz 5y ago
      "One Bitcoin transaction would generate the CO2 equivalent to 706,765 swipes of a Visa credit card, according to Digiconomist’s closely-followed index, albeit with none of the convenience of plastic." https://www.bloomberg.com/opinion/articles/2021-01-26/is-bitcoin-mining-worth-the-environmental-cost https://www.bloomberg.com/opinion/articles/2021-01-26/is-bit...
      - pelasaco 5y ago
        Thank you for the link, but thats not the same thing. Try to transfer heavy money from Venezuela to Japan, being in Venezuela or from Ghana to Germany, being in Ghana, using your Visa credit card. Try to do it under 24 hours. The fastest way will be flying which can be easily more expensive and risky than bitcoin.
tromp 5y ago
>This approach is called Proof-of-Work and involves miners taking transaction data and feeding it into a cryptographic algorithm that generates a string of numbers called a hash. There is more to Proof-Of-Work than just hashing [1]. [1] https://cryptorials.io/beyond-hashcash-proof-work-theres-mining-hashing/ https://cryptorials.io/beyond-hashcash-proof-work-theres-min...

59 points by tmfi 5y ago

FWIW there's a lot of half baked arguments going around the space, so a few comments for anyone genuinely interested in evaluating facts: - The usage of electricity in Bitcoin is a feature not a bug. It's designed to use the most democratic and ubiquitous commodity avalible. Any nation/individual can evaluate their electrical opportunity cost and at any point make the decision to dedicate resources to towards re-balancing the network without permission. This is not possible with proof of stake. - We produce about 160,000 TWh of power, ~50,000 TWh is wasted due to inefficiencies. Bitcoin using 120 TWh (0.25% of wasted power) - A lot of Power projects get scraped due to inconsistencies in demand. Random Ex: Texas power outages during summer peak AC usage. It's infeasible to spin up and spin down extra generators to meet spikes in demand. #Bitcoin fixes this by providing excess supply a discounted demand during normal hours that can be routed away during peak needs else where. Ditto for renewables. - Bonus: SHA-256 did not get broken this week.

_Microft 5y ago
How low does the energy price have to be that someone could currently expect to profitably mine Bitcoin on commodity hardware? (I read "without permission" that one cannot expect to have specialized hardware available as import of mining rigs could be regulated).
- zMiller 5y ago
  It's a question of opportunity cost of electricity, not absolute numbers: - You live in a place where the "cost" of mining = Electricity + Amortized cost of mining rig. - Someone else lives in a place where "cost" of mining = (Electricity + Amortized Blackmarket Rig Cost) - (5% Inflation per month - 30% reduction in remittance fee -etc..)
schoen 5y ago
The biggest trouble here is that pollution externalities of power generation are very commonly not priced into the cost of electricity, so generic incentives to consume energy also very commonly mean incentives to pollute more. > Random Ex: Texas power outages during summer peak AC usage. It's infeasible to spin up and spin down extra generators to meet spikes in demand. #Bitcoin fixes this by providing excess supply a discounted demand during normal hours that can be routed away during peak needs else where. Ditto for renewables. Could be, but are the price signals really in place to make this out work in practice in many places? How many electric utilities have so far succeeded in charging people more at all during peak demand times? (maybe other than electric customers they've identified as industrial) Edit: To be clear, I agree that there is such a thing as surplus power generation and usefully smoothing out demand, I just don't agree that we're in a scenario where cryptocurrency mining is predominantly used or predominantly incentivized to be used that way.
- zMiller 5y ago
  > The biggest trouble here is that pollution externalities of power generation are very commonly not priced into the cost of electricity, so generic incentives to consume energy also very commonly mean incentives to pollute more. This is true and is a function of context and locale. That's the point. Opportunity cost.
chatbot2 5y ago
The solution for the excess supply issue is energy storage, not mining bitcoin. I've worked in clean energy for years, and no energy expert is advocating digital currency mining + increased energy production as a method for meeting demand peaks.
- zMiller 5y ago
  - While storage is part of the infrastructure, it not the solution -> Not feasible for a large set of energy sources and often falls to the same pitfalls of bringing new power online (remoteness, capacity, etc..). - Actually Bitcoin mining is being adopted by renewable providers as very good solution to offset intermittence and wasted excess. - Further something like Natural gas flaring is something that cannot be stored but can largely routed through mining setups. Which is being adopted at scale.
jcranmer 5y ago
> It's designed to use the most democratic and ubiquitous commodity avalible. Which is why Bitcoin mining is only feasible in the areas that have the lowest electricity rate? > We produce about 160,000 TWh of power, ~50,000 TWh is wasted due to inefficiencies. Bitcoin using 120 TWh (0.25% of wasted power) How much of those inefficiencies are caused by Bitcoin? My understanding is that a substantial fraction of that inefficiency is things like "there's power loss in running power from a power plant 100s of miles away" or "converting from AC to DC power induces power loss." In other words, Bitcoin isn't converting electrical waste into useful work, it's just creating more electrical waste on top of the power it directly uses. > A lot of Power projects get scraped due to inconsistencies in demand. Random Ex: Texas power outages during summer peak AC usage. It's infeasible to spin up and spin down extra generators to meet spikes in demand. #Bitcoin fixes this by providing excess supply a discounted demand during normal hours that can be routed away during peak needs else where. Ditto for renewables. Are you aware that the electrical grid already manages demand in large part by telling the smelters to stop smelting for a few hours? There's no need to invent new demand to manage existing demand.
- zMiller 5y ago
  > Which is why Bitcoin mining is only feasible in the areas that have the lowest electricity rate? Nope, not where Electricity is cheapest, but where it's opportunity cost is lowest. In developed nations with a stable currency this might be high, in others that don't have the privilege of printing the world's reserve to bail out bad decisions, different story. And that's what the market is reflecting. >My understanding is that a substantial fraction of that inefficiency is things like "there's power loss in running power from a power plant 100s of miles away" or "converting from AC to DC power induces power loss Precisely, most Bitcoin mines are remotely located right next to the power plants, partially for this reason. > There's no need to invent new demand to manage existing demand. No you need demand to bring excess supply.

yamrzou 5y ago

A relevant answer from last year by @schoen (upon which I stumbled recently): https://news.ycombinator.com/item?id=22495700 https://news.ycombinator.com/item?id=22495700

schoen 5y ago
Thanks for your enthusiasm for my answer. :-) The arbitrarily parameterized instances part is really important. In Bitcoin this is done by feeding prior blocks as input into the hash and then getting the hash to match the adjustable difficulty value, so you can generate new problems automatically based on the history. The Stack Exchange answer that someone linked to here mentions this issue by saying that, if you just had a generic and deterministic useful problem, people could precompute solutions to relevant instances of it, which would amount to premining on the blockchain. The "doing work to verify transactions" aspect comes in when you can make the problem instances actually encode a specific version of history. It's not obvious how to do that where each and every instance would be of intrinsic interest or value to someone. Maybe there's some kind of physical simulation where this could be the case (like, each individual hash represents a particular randomly chosen chemical from a very, very large family of chemicals whose properties are being explored by simulation in some way, or something), but I'm still not sure how you could then make a successful result be easier for other people to verify without repeating the same amount of work. (I'm not familiar with a technique for proving, in an easily-checkable way, that the result of a complex physical simulation was such-and-such.)

prepend 5y ago

I think this question is important to whatever emerges as the “survivor” blockchain that emerges out of this as the one we all use (like the internet companies that survived past all the garbage of 99/2000 before the pop). People need to compute things asynchronously. And they are probably willing to pay. Being able to distribute those out as part of the the mining/validation process would make the energy less “wasted.” I’m not sure why the grid computing schemes of the 00s didn’t pan out, I suspect aws was just simpler and cheaper than trying to assemble networks of nodes using Globus or whatever.

KETpXDDzR 5y ago

In Siberia they heat using btc mining: https://archive.curbed.com/2017/11/9/16619032/bitcoin-mining-heat-homes-siberia-russia https://archive.curbed.com/2017/11/9/16619032/bitcoin-mining...

Analemma_ 5y ago
For about the zillionth time, space heating with Bitcoin mining is about one-quarter as energy-efficient as using an actual heat pump and so the “we can heat buildings with it!” argument does not actually excuse the massive energy use at all.
- bobthebuilders 5y ago
  Bitcoins use an entropy increasing resistance hash function, which makes it terrible for heating and cooling. There's a reason why we should use FedCoin instead of Bitcoin or cash or gold.
  - Syonyk 5y ago
    It... what? If you put 1000W of electrical energy into a Bitcoin miner, you get 1000W of heat out the far end. It's the same efficiency as a resistive element space heater, just has done some work (useful or not, it's still work) on the way through. Same thing for a computer running BOINC or Folding@Home. Power goes in, heat comes out, but you've done something useful in the gap.
    - imtringued 5y ago
      Congratulations, you have reduced your heating bill by $x! You can now spend $x on mining and get more Bitcoin!
      - Syonyk 5y ago
        I knew someone last winter, during the spike in Bitcoin prices, who had done the math and figured out that heating on some older Bitcoin miners was profitable. Not only was the value of Bitcoin produced greater than his power cost (not everyone has CA power costs), it meant he wasn't paying anything separately for heat. I think he got them for very little because they "weren't profitable to run" when they were being sold. I typically heat my office (off grid solar shed) in the winter on waste compute - I've got a few computers in here that run Folding@Home/BOINC and I just run them if I've got surplus power. I have propane backup for the really dark grey days ("generator days" if they extend past about a day - it's cheaper to run a gallon of gas through an old generator than to radically expand my battery bank), but most of my winter heat comes from running F@H/BOINC. To the point that on a clear, sunny winter day, I have my window open and fans sucking cold air in or I'll roast in here. I can hold about 1.8kW of load no problem on a clear day. Now that I have solar on the house, I've considered adding an old compute rig or two in there for winter heat. It's less efficient than our heat pump on warm days, but we also get some cold, grey, foggy days in which the heat pump likes to ice up badly. Normally, if the heat pump isn't keeping up with things, the thermostat will call for the backup coils (which are just big resistors) to aid, and they're the same efficiency at turning electricity into heat as a couple computers. Old Xeons aren't amazingly power efficient, but you can also get them for free or nearly so and throw compute at your preferred projects. One can optimize for a wide variety of things - energy spent, compute performed, Bitcoin mined, minimum cost, etc. It works better, and is a lot more efficient, if you look at everything as a system and integrate it. I don't run BOINC tasks on my homeserver when we're in air conditioning season, but I light up a couple cores of them in the winter.

rthomas6 5y ago

Isn't that the entire point of Ethereum and some others?

eco 5y ago
Ethereum's current energy intensive Proof of Work is not used to run the smart contracts. It just secures the blockchain, same as Bitcoin. The smart contract execution power requirements are basically non-existant compared to that.
davesque 5y ago
Not necessarily. The current verification algorithm doesn't have any useful side effects other than verifying that some amount of computing happened. That will even be true for whatever computation happens as part of proof of stake when it gets rolled out. In other words, and in either case, the only real effect of the computation that happens as part of the verification algorithm is the verification itself. Edit: There's no reason to downvote OP's post, folks. It's a good question that some people may not know the answer to.

ericjang 5y ago

Setting aside the advantages of Proof-of-Stake in terms of energy consumption, and setting aside the "green energy buyer of last resort" argument that the BTC maximalists often say, and setting aside the theoretical requirements for a valid PoW function, I do think it's tricky to argue which computing is inherently "valuable" or "not valuable". There is this intuition that guessing a bunch of random numbers doesn't contribute high-leverage information or "work" to society. That there are a bunch of "information processing" tasks that have more inherent value. But consider SETI@home - is decoding massive amounts of space noise valuable if nothing ever comes of it? Is the computation wasted? Consider Folding@home - there are now far superior algorithms like AlfaFold that take far less compute. Is the computation wasted? Consider all the matrices being multiplied on gigantic neural networks. Some of the resulting models will be enormously valuable to society. Most of it will be dead-on-arrival experiments - simply wasted compute. Even worse, the leverage can go the other way - a ML model can cause far more harm than the energy footprint used to train it. One of the nice properties of the BTC PoW function is that you can be sure that your hash finding algorithm is probably not that sub-optimal.

ealexhudson 5y ago
The PoW algorithm needs to effectively pick winners more or less at random, with a consistent number of winners (and gaps between), and the results be self-evidently correct. There are few problems which fit those criteria and are useful...
whatever1 5y ago
I prefer to spend resources on something of debatable value (look for aliens), rather than on something that it is indisputably of no value to humanity (proof of tedious work).
- Syonyk 5y ago
  Why not something of more concretely useful value, like protein folding or climate simulations?
  - 5y ago

ridethebike 5y ago

Am I correct to assume that this is Bargaining stage of grief?

anigbrowl 5y ago
Not necessarily. I've wondered the same thing for years while never holding any.
creata 5y ago
Who is grieving and what are they grieving about?
- cheph 5y ago
  32,510.30 USD/BTC
  - arthurcolle 5y ago
    2008 - 0.00 USD/BTC
    - cheph 5y ago
      Come now, you are just bargaining. Just move on and get to the final stage of acceptance and hope.
      - arthurcolle 5y ago
        What am I bargaining about again? I trade bitcoin options + the volatility has been great for my own positions. ¯\_(ツ)_/¯ Did you buy the top or something?
- trutannus 5y ago
  The idea that blockchain will change the world.
  - 5y ago

johnnyapol 5y ago

I was disappointed to not see any mentions of Gridcoin in the Proof of Stake section. It rewards people for their contributions to certain BOINC projects. There definitely is a range of "usefulness" to the projects supported. There are computations like distributed protein folding (Rosetta@Home) all the way to analysis of Minecraft phenomenon (Minecraft@Home). While the Minecraft makes for some very entertaining YouTube videos, the electricity used would probably be better spent on other projects. However, it is still a significant improvement over the computation for Bitcoin. https://gridcoin.us/ https://gridcoin.us/ https://gridcoin.us/guides/whitelist.htm https://gridcoin.us/guides/whitelist.htm

schoen 5y ago
Gridcoin's apparent decentralization is much less than a system that uses mining rewards because it uses a committee to maintain a list of projects that can simply assert that people have done relevant work in order to receive rewards. https://gridcoin.us/guides/whitelist.htm https://gridcoin.us/guides/whitelist.htm I haven't totally gamed it out but I think the committee could break Gridcoin by means such as refusing to approve any projects, or approving only "captive" BOINC projects that agree to distribute rewards the way the committee wants. Alternatively, BOINC itself could get shut down, or all of the currently-approved projects could have their credentials taken over by someone else and start issuing rewards in a sketchy way. As I understand it, Gridcoin basically has an identified group of oracles who together appoint and unappoint other oracles who are empowered to issue rewards. While this is clever, it's not very decentralized or permissionless. (Maybe I should pick on BOINC itself even more than the committee as the "authority" here, since I think BOINC's infrastructure is directly used by the whitelisted projects to assign tasks and announce rewards for completing them. So BOINC is really in a position to tamper with every part of the reward process.)

rafaelero 5y ago

If it's useful, it's less costly. If it's less costly, it is less secure.

lottin 5y ago
Costly doesn't mean that it has to waste actual resources. The chance of winning a block could be made to be proportional to the amount of bitcoin deposited into some smart contract, instead of proportional to the amount of electricity wasted. The outcome would be exactly the same, and nothing would be wasted.
- rafaelero 5y ago
  From my short life as a tech guy, I have already realized that there is no 100% secure system. Companies try to hide information and avoid leakages; complicated systems of governance try to avoid malpractices while minimizing bad actors. In the end, it is always a dance between attackers and defenders. Bitcoin has the dumbest way of protecting itself from attackers. But by being the dumbest way, it is also the most predictable. It is like instead of coming up with sophisticated methods of protection that no one knows its weaknesses on the long run, Bitcoin only focuses on building a bigger wall. And that's why I feel more confident.
- idiotsecant 5y ago
  Sounds like you just reinvented Ethereum proof of stake :)
Alex3917 5y ago
This. Bitcoin only remains secure if the amount of electricity being wasted scales with the price. (Otherwise, the payout for double spending would exceed the cost.) For it to actually be a viable store of value at global levels, it would require burning orders of magnitude more electricity than is currently even produced in a year. It mainly appeals to the kind of people who self-identify as being good at math, but who are actually too dumb to do basic arithmetic.
toolz 5y ago
very good point - the entire reason for PoW is to "waste" something to prove you're invested in the ecosystem. If you can do useful things with that work, you're not really proving you're invested in BTC, but you may just be invested in whatever that useful side-effect is

Hbruz0 5y ago

This very question has been asked on stackexchange : https://bitcoin.stackexchange.com/questions/331 https://bitcoin.stackexchange.com/questions/331

koheripbal 5y ago
Summary: 1. The input need to be unpredictable. Block N is the seed for block N+1. 2. It needs to be difficult to calculate, yet trivially easy to verify. 3. Difficulty needs to be adjustable. The only idea I've ever seen that met all three of these criteria was PrimeCoin's usage of calculating certain Cunningham twin primes (which is still of unclear/tiny value).
- imtringued 5y ago
  4. You cannot make money off of the work being done because the saved money will then be spent on more mining until we hit a 100% non commercial computation equilibrium

mkl95 5y ago

Bitcoin is an extremely inefficient computing platform. There's no silver lining to BTC, it's simply a moderately big, potentially huge mistake in the history of modern technology.

danlugo92 5y ago
Then why did Elon Musk buy 1.5 billion dollars of it?
- mkl95 5y ago
  I could name a few things I admire about Elon Musk, investing in BTC is not one of them.
- renewedrebecca 5y ago
  Don’t confuse being rich with being ethical or wise. (This is a kind of appeal to authority, too)
  - danlugo92 5y ago
    Are all of these institutional investors: https://www.forbes.com/sites/michaeldelcastillo/2020/08/06/valuable-sec-data-on-20-institutional-bitcoin-investors-could-soon-disappear/ https://www.forbes.com/sites/michaeldelcastillo/2020/08/06/v... (of which the top 3 already account for more BTC than Elon) also unwise?
    - Tarsul 5y ago
      the argument went from BTC is inefficient (OP) to why did Elon buy (you) to understanding the difference between rich and ethical (last comment) to rich investors being wise or not (you again) To make it short: Just because Elon or rich investors buy doesn't mean they are unwise (for themselves) just that it's bad for the world (ecologically), so basically both can be true. Just the difference between thinking about themselves and thinking about other people as well...
    - 5y ago

soheil 5y ago

It'd be interesting if the proof of work computing at the heart of Bitcoin would do something similar to projects like SETI [0] or Folding@home [1] protein folding project that requires distributed computing. [0] https://setiathome.berkeley.edu/ https://setiathome.berkeley.edu/ [1] https://en.wikipedia.org/wiki/Folding@home https://en.wikipedia.org/wiki/Folding@home

bastawhiz 5y ago
They can't be used for proof of work. Hashing for say, Bitcoin, works because you're finding a hash that has certain properties (e.g., having a certain number of leading zeroes). Anyone can take the input (to the hash function) you've found and trivially test that it does indeed produce a hash with those properties. Finding the hash is hard, but testing the hash is easy. Doing SETI/Folding work doesn't work like that. Consider Folding: every unit of work produces useful output. Every input produces equally valuable output. Additionally, the cost of producing the output is high, but the cost of verifying that output is also high. With hashing-based PoW, everyone in the network can verify that a hash with the correct properties was produced. There's no way to say "yes, this one Folding@home worker found something unique". The work needs to be checked, which means a majority of nodes in the network need to verify the output, which means >50% of the network needs to compute the same thing again (you can't rely on less than a majority, or anyone could cheat).
- soheil 5y ago
  Take SETI for example. If you find an earth like planetoid in a very precise region of sky which takes a long time to sift through pictures of the sky to find then you can just give the coordinates of that point for other nodes to verify. This could be the PoW algorithm.
  - bastawhiz 5y ago
    That's problematic, though. You have a fixed computational difficulty (difficulty can't be scaled up or down).

deleted 5y ago

[deleted]

rawtxapp 5y ago

It is useful if you consider having a non-governmental/internet native currency a useful thing. If you don't see any value in that, it's gonna be hard to justify that computation.

genghisjahn 5y ago
Which of the crypto currencies is a "non-governmental/internet native currency"? From my POV they all seem like proto-NFTs.
- rawtxapp 5y ago
  Non fungible tokens are by definition not interchangeable. Whereas things like Bitcoin and Ether are fungible, meaning there's no difference between my 1BTC and your 1BTC.
  - genghisjahn 5y ago
    I said they were "proto" NFTs and one thing they have in common, again from my view point, is that you buy them and hope that someone else will pay you more for it later. Beyond that it's just entries of hope on the block chain.
axlee 5y ago
There are far less costly ways for the environment to achieve the same results. This is simply unjustifiable, when thousands of people are actively running the planet to the ground to make a quick buck in an online casino.
- rawtxapp 5y ago
  Great, what's your proposal for the alternative then? Are you talking about the stock market? Or the companies that have already more or less destroyed the planet to extract every last bit of profit?
- gaara87 5y ago

ssivark 5y ago

There’s the fascinating example of “Nooshare”, which is an interesting proposal for embedding arbitrary Monte-Carlo simulations as the proof challenge! http://web.mit.edu/alex_c/www/nooshare.pdf http://web.mit.edu/alex_c/www/nooshare.pdf It’s an elegant exploitation of the design reasons why the work must involve something like random search (for an easy to validate target). On squinting, it’s kinda like a smart contract for a compute job, where the compute job itself constitutes proof of work to validate the settlement of the contract!

koheripbal 5y ago
This was written in 2012. It does not appear that this idea went anywhere - not sure why. It could be the fact that it's not trivially easy to verify the work completed, unlike a hash.

pelasaco 5y ago

I worked 10 years for a Bank. A lot of the mainframe batch processing were unnecessary. A lot of the mainframes running Cobol could be replaced by some smaller hardware and code written in java and C. There are a lot of people working around bad written system or bad written laws/rules, to make the things work. My point is: Wouldn't be fair to compare the amount energy to run bitcoin vs the amount of energy to run the banking system?

35fbe7d3d5b9 5y ago
> Wouldn't be fair to compare the amount energy to run bitcoin vs the amount of energy to run the banking system? Hasn't this comparison been made over and over, and every time it comes out in favor of traditional banking by a mile?
- pelasaco 5y ago
  could you provide any link or resource for further reading? I never saw anything like that and I would like to know what they are taking into account in this comparison.
  - f00zz 5y ago
    "One Bitcoin transaction would generate the CO2 equivalent to 706,765 swipes of a Visa credit card, according to Digiconomist’s closely-followed index, albeit with none of the convenience of plastic." https://www.bloomberg.com/opinion/articles/2021-01-26/is-bitcoin-mining-worth-the-environmental-cost https://www.bloomberg.com/opinion/articles/2021-01-26/is-bit...
    - pelasaco 5y ago
      Thank you for the link, but thats not the same thing. Try to transfer heavy money from Venezuela to Japan, being in Venezuela or from Ghana to Germany, being in Ghana, using your Visa credit card. Try to do it under 24 hours. The fastest way will be flying which can be easily more expensive and risky than bitcoin.

tromp 5y ago

>This approach is called Proof-of-Work and involves miners taking transaction data and feeding it into a cryptographic algorithm that generates a string of numbers called a hash. There is more to Proof-Of-Work than just hashing [1]. [1] https://cryptorials.io/beyond-hashcash-proof-work-theres-mining-hashing/ https://cryptorials.io/beyond-hashcash-proof-work-theres-min...