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Honest question: is it possible to make a cryptocurrency that does not rely on some real-world scarce resource (e.g. chips, electricity, drive space)? This see

Honest question: is it possible to make a cryptocurrency that does not rely on some real-world scarce resource (e.g. chips, electricity, drive space)? This seems to be a cornerstone of what makes any crypto valuable in the first place (scarcity), and as long as that scarcity has real-world consequences, it seems like it would have the same result. Chia claimed to "Save the world from proof-of-work wastage", but it would just turn a GPU crunch into a HDD crunch.

akircher 5y ago
“Work” doesn’t have to be wasteful. It could be based on the number of pieces of litter that were collected, the number of meals to the homeless that were served. It’s just easier to measure when work is something wasteful.
- _huayra_ 5y ago
  Let's hope someone comes up with a coin staked on the removal of CO2 from the atmosphere!
  - xxs 5y ago
    how would you prove that it has happened?
    - Hjfrf 5y ago
      Atmospheric data, pay an average to each person in the country.
  - nrp 5y ago
    Kim Stanley Robinson proposes this in his recent novel, The Ministry for the Future. He mostly skips the details around how it would actually work though, beyond needing an enormous amount of human labor for verification. In real life, that would break the decentralization of it.
  - mrfusion 5y ago
    Remove too much and you wipe out all life on earth by starving plants.
- FairlyInvolved 5y ago
  It does if the reward is sufficiently large. If BTC mining relied on pieces of litter being collected you'd get people spending $millions on factories to produce litter and vehicles to distribute it just so more could be collected. That sounds crazy to type out, but it's no stranger than the situation we currently find ourselves in. The most advanced tools man has ever created are being used to create chips with no practical value, but that are good for converting energy into tokens through pointless calculations. I don't believe it is possible to create a proof of work system that is not a "proof of waste" once the reward is high. Spare CPU cycles felt like a waste, that becomes dedicated processing, that becomes dedicated hardware, that eventually became designing custom hardware.
gbaygon 5y ago
It exists and it’s called “proof of stake”, see Cardano and ETH2 for example. The pros and cons are debatable but the technology is interesting. If you want to know more I recommend the Ouroboros whitepapers by IOHK.
formerly_proven 5y ago
The underlying problem is that you need to prevent sybil attacks, i.e. group X creates many peers in the network and so gets much more voting power than they "ought to" have. The only known way to do so is through attaching a real-world cost to ~votes. The way PoW does so is through equating votes and hashrate, so votes cost real money because hashrate requires real hardware. PoS works in mysterious ways, but the basic idea is that votes are equal to prior balance by essentially putting some of that balance "into escrow" in order to vote.
- dkersten 5y ago
  > so votes cost real money So it doesn't actually fix the problem, it just means only the richest have any real power, just like the financial industries outside of crypto.
  - malaya_zemlya 5y ago
    that's what being rich means - being able to control a large share of resources.
    - dkersten 5y ago
      Sure, but a lot of the pro-cryptocurrency people say (or used to, at least) that cryptocurrencies will liberate us from the existing power structures. But it doesn't really, because the people with pre-existing power can just as easily buy their way into power over cryptocurrencies too.
      - solveit 5y ago
        You're still not printing over 21 million bitcoin though. And you're still not deanonymizing transactions (for properly designed privacy coins). I think monetary policy and privacy were the two main arguments for crypto in the early days before we started funding every startup with a half-baked "XXX on The Blockchain" idea.
      - binarybanana 5y ago
xxs 5y ago
the short version is: "NO", if there is no barrier to enter/mine/plot/whatever - then it'll be abused to no end.
JackC 5y ago
Decentralized currencies rely on proof of economic waste. It's possible to imagine forms of economic waste that have different externalities, e.g. different environmental impacts. But we don't have evidence yet (that I know of?) that introducing one decentralized currency reduces waste in another one -- if you did introduce a new currency that wasted economic value in a new way, there's no evidence that crypto as a whole would waste less of the existing things, it would just start wasting that thing too. In this model crypto is like ... an emergent antipattern of networked civilization, where the network starts to waste every economic resource that it can "see" and provably waste.
- rjbwork 5y ago
  >In this model crypto is like ... an emergent antipattern of networked civilization, where the network starts to waste every economic resource that it can "see" and provably waste. Exactly. As I've said to a number of people I've discussed crypto with, I'm happy to advocate for making PoW systems illegal. They'll happily gobble up a Dyson sphere of energy and a solar system of hardware in service of running a payment system with a tiny fraction of the throughput of any credit card company or bank. They are a complete waste of resources, energy, and human endeavor and society would be better off without them. I'll reserve judgement on PoS and other non-PoW systems until they're more widespread and I actually understand them better.
  - xxs 5y ago
    Isn't PoS just limiting the amount of work done based on the share of the total 'wealth'?
    - NortySpock 5y ago
      Proof-of-Stake? I thought that PoStake still cranked out blocks at a fixed rate (say, every few minutes), and presumably the block size could be increased to increase throughput, if not latency.
    - rjbwork 5y ago
      I think that's right. Like I said I reserve judgement until they're more prevalent and I've learned more about them. I have read that Ethereum's PoS implementation will use <1% of it's current PoW energy.
bitcurious 5y ago
>Chia claimed to "Save the world from proof-of-work wastage", but it would just turn a GPU crunch into a HDD crunch. Chia actually hasn't resulted in an HDD crunch. The economics of it are such that further investing in HDD storage isn't profitable, yet already Chia is the most decentralized and resilient crypto. I say resilient because price collapsed but allocated storage hasn't.
- shadilay 5y ago
  I still can't find deals on large HDD's ever since the Chia thing started, so it's definitely had an effect.

akircher 5y ago

“Work” doesn’t have to be wasteful. It could be based on the number of pieces of litter that were collected, the number of meals to the homeless that were served. It’s just easier to measure when work is something wasteful.

_huayra_ 5y ago
Let's hope someone comes up with a coin staked on the removal of CO2 from the atmosphere!
- xxs 5y ago
  how would you prove that it has happened?
  - Hjfrf 5y ago
    Atmospheric data, pay an average to each person in the country.
- nrp 5y ago
  Kim Stanley Robinson proposes this in his recent novel, The Ministry for the Future. He mostly skips the details around how it would actually work though, beyond needing an enormous amount of human labor for verification. In real life, that would break the decentralization of it.
- mrfusion 5y ago
  Remove too much and you wipe out all life on earth by starving plants.
FairlyInvolved 5y ago
It does if the reward is sufficiently large. If BTC mining relied on pieces of litter being collected you'd get people spending $millions on factories to produce litter and vehicles to distribute it just so more could be collected. That sounds crazy to type out, but it's no stranger than the situation we currently find ourselves in. The most advanced tools man has ever created are being used to create chips with no practical value, but that are good for converting energy into tokens through pointless calculations. I don't believe it is possible to create a proof of work system that is not a "proof of waste" once the reward is high. Spare CPU cycles felt like a waste, that becomes dedicated processing, that becomes dedicated hardware, that eventually became designing custom hardware.

gbaygon 5y ago

It exists and it’s called “proof of stake”, see Cardano and ETH2 for example. The pros and cons are debatable but the technology is interesting. If you want to know more I recommend the Ouroboros whitepapers by IOHK.

formerly_proven 5y ago

The underlying problem is that you need to prevent sybil attacks, i.e. group X creates many peers in the network and so gets much more voting power than they "ought to" have. The only known way to do so is through attaching a real-world cost to ~votes. The way PoW does so is through equating votes and hashrate, so votes cost real money because hashrate requires real hardware. PoS works in mysterious ways, but the basic idea is that votes are equal to prior balance by essentially putting some of that balance "into escrow" in order to vote.

dkersten 5y ago
> so votes cost real money So it doesn't actually fix the problem, it just means only the richest have any real power, just like the financial industries outside of crypto.
- malaya_zemlya 5y ago
  that's what being rich means - being able to control a large share of resources.
  - dkersten 5y ago
    Sure, but a lot of the pro-cryptocurrency people say (or used to, at least) that cryptocurrencies will liberate us from the existing power structures. But it doesn't really, because the people with pre-existing power can just as easily buy their way into power over cryptocurrencies too.
    - solveit 5y ago
      You're still not printing over 21 million bitcoin though. And you're still not deanonymizing transactions (for properly designed privacy coins). I think monetary policy and privacy were the two main arguments for crypto in the early days before we started funding every startup with a half-baked "XXX on The Blockchain" idea.
    - binarybanana 5y ago

xxs 5y ago

the short version is: "NO", if there is no barrier to enter/mine/plot/whatever - then it'll be abused to no end.

JackC 5y ago

Decentralized currencies rely on proof of economic waste. It's possible to imagine forms of economic waste that have different externalities, e.g. different environmental impacts. But we don't have evidence yet (that I know of?) that introducing one decentralized currency reduces waste in another one -- if you did introduce a new currency that wasted economic value in a new way, there's no evidence that crypto as a whole would waste less of the existing things, it would just start wasting that thing too. In this model crypto is like ... an emergent antipattern of networked civilization, where the network starts to waste every economic resource that it can "see" and provably waste.

rjbwork 5y ago
>In this model crypto is like ... an emergent antipattern of networked civilization, where the network starts to waste every economic resource that it can "see" and provably waste. Exactly. As I've said to a number of people I've discussed crypto with, I'm happy to advocate for making PoW systems illegal. They'll happily gobble up a Dyson sphere of energy and a solar system of hardware in service of running a payment system with a tiny fraction of the throughput of any credit card company or bank. They are a complete waste of resources, energy, and human endeavor and society would be better off without them. I'll reserve judgement on PoS and other non-PoW systems until they're more widespread and I actually understand them better.
- xxs 5y ago
  Isn't PoS just limiting the amount of work done based on the share of the total 'wealth'?
  - NortySpock 5y ago
    Proof-of-Stake? I thought that PoStake still cranked out blocks at a fixed rate (say, every few minutes), and presumably the block size could be increased to increase throughput, if not latency.
  - rjbwork 5y ago
    I think that's right. Like I said I reserve judgement until they're more prevalent and I've learned more about them. I have read that Ethereum's PoS implementation will use <1% of it's current PoW energy.

bitcurious 5y ago

>Chia claimed to "Save the world from proof-of-work wastage", but it would just turn a GPU crunch into a HDD crunch. Chia actually hasn't resulted in an HDD crunch. The economics of it are such that further investing in HDD storage isn't profitable, yet already Chia is the most decentralized and resilient crypto. I say resilient because price collapsed but allocated storage hasn't.

shadilay 5y ago
I still can't find deals on large HDD's ever since the Chia thing started, so it's definitely had an effect.