8 ms·

No, your cryptocurrency cannot work

105 points by zdw 5y ago

29athrowaway 5y ago
There is no harm in trying.
- frankbreetz 5y ago
  There is harm in using to much energy, when we are on the brink of climate crisis. There is harm when people get swindled out of money. There is harm with criminal organizations have ways to get huge amounts of capital.
  - shoulderfake 5y ago
    Maybe go after industrial giants polluting the earth not bitcoin miners if you wanna fix climate change.
    - burkaman 5y ago
      Why not both?
    - deleted 5y ago
      [deleted]
    - pizzazzaro 5y ago
      Perhaps we could consider the chip shortage, and say that *coin mining is a bane on human existence.
    - theshrike79 5y ago
      Industrial giants provide something of value and they have ways of making stuff more efficient and less polluting. Crypto miners produce nothing of value and the high energy consumption is a feature of the system.
      - dane-pgp 5y ago
        How do you measure "value"? A traditional measure is "What is someone willing to give up in exchange for something?". Of course, different people value things differently, but I don't know if there is an objective measure.
  - pfisch 5y ago
    "There is harm with criminal organizations have way to get huge amounts of capital." Because this isn't already the case...
    - johnyzee 5y ago
      With the criminal organizations as often as not being large investment banks...
  - meowkit 5y ago
    > There is harm in using to much energy, when we are on the brink of climate crisis. You don't fight this on the demand side. You fight it on the supply side. > There is harm when people get swindled out of money. Take responsibility for your life. The government is not your friend. > There is harm with criminal organizations have ways to get huge amounts of capital. This is happening in the current economic system, and would be easier to fight if all transactions were on transparent ledgers.
    - hakfoo 5y ago
      > You don't fight this on the demand side. You fight it on the supply side. I've actually wondered, greenhouse gasses aside, if the sheer amount of direct and incidental heat generation in a modern civilization, doesn't contribute to global warming. Even on 100% carbon-free electricity, when you run a 500-watt mining unit, it's still kicking out 499.99 watts worth of heat into the air. > Take responsibility for your life. The government is not your friend. What is the purpose of government if not to enforce laws and social standards like "don't swindle people"
      - dane-pgp 5y ago
        > Even on 100% carbon-free electricity, when you run a 500-watt mining unit, it's still kicking out 499.99 watts worth of heat into the air. To use a simplistic thought experiment, imagine that all the world's electricity production today came from photovoltaic solar. Would the world be hotter or cooler due to the electricity production? Obviously the electricity usage doesn't cause more solar energy to reach the Earth from the Sun (unless we start using energy-beaming satellites), and any processes on Earth can't turn a Joule of solar energy into more than a Joule of heat, so the heat balance stays the same. Except, of course, that by not burning fossil fuels (which are stored reserves of solar energy), we would actually reduce the amount of heat released on Earth, causing a slight cooling effect.
    - antihero 5y ago
      As the article suggests, as long as people can make money by literally just burning through energy, it doesn't matter what the supply scales to, the demand will scale with it.
  - ezekg 5y ago
    > There is harm in using to much energy, when we are on the brink of climate crisis. There are cryptocurrencies that do not use as much energy as Bitcoin. Really, none of your points are problems without solutions.
  - 29athrowaway 5y ago
    Many cryptocurrencies were created with none of those ideas in mind. Bitcoin is an energy hog, but not every cryptocurrency has to be Bitcoin. Ethereum doesn't use as much energy. Criminal organizations use regular banks too. In fact, many financial organizations are undistinguishable from criminal organizations.
  - logicalmonster 5y ago
    > There is harm in using to much energy, when we are on the brink of climate crisis. I would argue that the only climate crisis that exists is a distinct lack of imagination. Nuclear Energy has already solved all of humanity's energy needs for decades and does so in a far more environmentally friendly manner than any renewable energy solution that currently exists. > There is harm when people get swindled out of money. Fiat currencies do not protect people from inflation. In fact, they're designed to enable it and systematically rob you of your savings and purchasing power without you even seeing it. Who's swindling who? > There is harm with criminal organizations have ways to get huge amounts of capital. Do criminals sometimes use crypto? Of course. Do you know what they use far more of? Dollars, Euros, Yuan, Yen, and other fiat currencies. Criminals get a lot more mileage out of fiat currency than moving their funds around on a public ledger.
dane-pgp 5y ago
> if the currency is controlled by those who have most of it, how is this any different from government-issued currency The difference is, if a cryptocurrency is mismanaged, people can sell their holdings and buy a better-managed currency, decreasing the value for those who have the most to lose. That provides a selective pressure towards good economic governance, which doesn't exist with too-big-to-fail central banks that can require you to use their product because of legal tender laws and tax payments. Also, programmable money is inherently more valuable because of new use cases it enables, like smart contracts. That is why diversifying into cryptocurrency is better than simply diversifying into a foreign government-issued currency. Full disclaimer: I do not own, and have never owned, any cryptocurrency.
- Hamuko 5y ago
  Who wants to buy your mismanaged cryptocurrency when you're looking to dump it?
- simias 5y ago
  The problem is how you define "good economic governance". For instance a controlled amount of inflation is generally considered to be good for a currency, as it incentivizes investing your money instead of hoarding it non-productively. But if there's one thing that most cryptocurrency investors usually don't want, it's inflation. Actually, the more deflation the better. And that's the catch really, because there's nothing forcing you to use a cryptocurrency like you have to use a government-issued currency, the cryptocurrency has to reward early adopters if it wants to become popular. This in turn makes cryptocurrencies, IMO, have patently bad economic governance, since the deflationary spiral makes them unusable for anything beyond pyramid schemes. >Also, programmable money is inherently more valuable because of new use cases it enables, like smart contracts Meh, smart contracts are not so smart, and not so contractual. It's just a very inefficient scripting mechanism that doesn't really buy you all that much. Suffices to see all the modern cryptocurrency "dapp" that run on centralized, trustful chains just because they're unusably expensive to run on true decentralized blockchains. See all the stuff running on the BNB chain that's 1/ not decentralized and 2/ just a bunch of pyramid/ponzi schemes with no practical use beyond speculation.
- 5y ago
sargun 5y ago
I wonder what the authors opinion on Helium would be: https://www.helium.com/ https://www.helium.com/
- SideburnsOfDoom 5y ago
  I think there's a clue in the title.
  - 1ark 5y ago
    If you suck it in, you'll talk funny?
goldcountry 5y ago
Well apparently the people of El Salvador would beg to differ.
- frankbreetz 5y ago
  i think you mean the president of El Salvador would disagree. it is quite an unpopular policy amounst the people of El Salvador.
  - delaaxe 5y ago
    So unpopular that people are protesting in the streets https://twitter.com/Crypto_Daily/status/1432715470902284306/photo/2 https://twitter.com/Crypto_Daily/status/1432715470902284306/...
    - frankbreetz 5y ago
      This is more what I was referring to, I haven't heard of any protests. https://www.reuters.com/technology/majority-salvadorans-do-not-want-bitcoin-poll-shows-2021-09-02/ https://www.reuters.com/technology/majority-salvadorans-do-n...
- beardog 5y ago
  The gdp per capita of El Salvador is $3798 USD which is about $10.40/day.[1] To have a bitcoin transaction mined within roughly an hour on sep 6 2021 costs $11.44[2], making bitcoin unusable for many Salvadorans, especially for small transactions. Yes, lightning network and centralized payment platforms exist on top of Bitcoin, but these defeat the purpose of bitcoin and add complexity. 1 https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=SV https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?location... 2 https://bitcoinfees.co/ https://bitcoinfees.co/
  - frankenst1 5y ago
    I would assume that the ability to receive remittances at practically zero fees without any intermediaries and a monetary supply that can't be censored or controlled by the government is more valuable to the people of El Salvador than the fact that they are transferring Bitcoins over a layer 2 network (Lightning Network) instead of the much slower and more expensive layer 1 network (Bitcoin blockchain).
gfodor 5y ago
Prediction: we will see this kind of analysis being repeated verbatim (perhaps with the names changed as the scope, scale, and nature of decentralized ledger technology evolves) for the rest of human civilization, just like we have seen it repeated verbatim for the first decade of Bitcoin. Bitcoin != Cryptocurrencies != Blockchain != Sybil mitigation mechanisms != Decentralized ledgers != Distributed decentralized consensus Each of these will unfold on distinct dynamics and have various trade offs as they do.
bob229 5y ago
Bang on, crypto is useless cult nonsense
xupybd 5y ago
I keep waiting for the Crypto ponzi scheme to burst. It doesn't and I don't understand why. I'm convinced by this that I don't understand economics at all.
- Hamuko 5y ago
  I think the quote "the stock market can remain irrational longer than you can remain solvent" can be very much applied to cryptocurrency as well.
  - kace91 5y ago
    With a corollary, "the stock market can remain irrational long enough for you to profit from something valueless". It's of course risky, but cruptocurrencies can be a perfectly valid source of money, as long as you just risk spare money. You don't need to trust it to be a valid investment, you just need to trust that enough people will believe it is.
    - Hamuko 5y ago
      >You don't need to trust it to be a valid investment, you just need to trust that enough people will believe it is. This is called the greater fool theory. https://en.wikipedia.org/wiki/Greater_fool_theory https://en.wikipedia.org/wiki/Greater_fool_theory
- dboreham 5y ago
  Because if you draw the boundary around the ponzi scheme wide enough nobody realizes it's a scheme. E.g US$
  - jrockway 5y ago
    What's the scheme? You can stuff US dollars into your pocket and exchange them for goods and services pretty much anywhere in the world. That's not a ponzi scheme -- that's currency.
gbasin 5y ago
Insert midcurve meme here. This reads like massive cope. One thing I've learned the hard way in life is when something goes on for years that I don't quite understand, and yet it keeps growing and getting more popular, usually I'm the one that's wrong.
- gfodor 5y ago
  A good tell on this one for this post specifically is it is writing down a fairly obvious, oft-repeated “rebuttal”, which is largely predicated on the people being rebutted being entirely compromised by greed and/or ignorance. This person would be incapable, it seems, to steelman his/her opponent given the contempt for them, so that backstops the notion their analysis is mostly noise.
  - kevingadd 5y ago
    Does the rebuttal being "fairly obvious, oft-repeated" somehow mean that nobody actually uses it or it somehow doesn't deserve mention? If people are repeating it, they're repeating it.
    - gfodor 5y ago
      Repeating it is fine, but the longer time goes on where it’s repeated, the more the person proposing it looks like they think their opponents are just deficient not merely ignorant of the argument. The person here did us the favor of revealing their belief that their opponents are deficient, so that is helpful in reducing the weight of their post, but often this isn’t so obvious.
- deleted 5y ago
  [deleted]
- arcticbull 5y ago
  > Insert midcurve meme here. This reads like massive cope. Cope is the single worst, dumbest argument you can possibly deploy because it means nothing other than you are unable to or uninterested in refuting any points levied. It's a strongly left-curve argument to engage with your meme. While the truth is, if you'd invested in TQQQ the majority of time over the last 5 years you'd have had a better return than BTC. I could make the same exact cope argument about that, but of course, that's a worthless argument. Every single day you're missing out on an investment that performs just as well as any crypto investment. Investment opportunities are like a bus route: there's always another one coming down the pike. Let's focus on the facts instead? I'm led to believe this isn't r/Bitcoin. [edit] remember: right + broke, and wrong + wealthy are both completely valid outcomes.
frazbin 5y ago
My hope is that tokenized ledger-based distributed consensus mechanisms win, while using them as a currency loses. Like, what if the correct price for a good cryptocurrency is low?
- amin 5y ago
  What's a "tokenized ledger-based distributed consensus mechanism" in plain English?
  - frazbin 5y ago
    i was thinking of algorand, personally.. but all cryptocurrencies are 1. tokenized: we care about moving 'units' of 'value' between 'accounts' 2. ledger-based: having an immutable record of previous state changes 3. distributed: progression of state is determined by many participants who may not share a common goal 4. consensus mechanism: this is what the system gives us: a set of rules which if followed allow parties to agree on the contents of the ledger.
  - 3np 5y ago
    We tend to call this "blockchain", but it's a bit of an overloaded, abused and misunderstood term so it can help to be specific.
pfraze 5y ago
The points in this post are all legit, but I think it misses a couple things. The blockchains are all controlled by some kind of plutocracy (people with wealth) as the gist describes. However there is a relatively complex dynamic between the miners/executors, the protocol developers, and the community. A blockchain protocol is a shared contract between them and the power to change that contract requires some kind of consensus between multiple parties. At one point, Bitcoin was using signals from miners to show adoption of a protocol change, which AFAICT amounted to a weighted vote, weighted by mining power. I would argue that makes the miners similar to a legislature, and makes the protocol similar to a legal system. These are the rules for social computing networks, after all. Whether any of this is really more meaningful than the alternatives, I can't say. You could argue that PoW and PoS tie wealth too directly to the "legislature" membership and we ought to use a democratic vote to decide the miners/executors. Or we should just appoint 3 or 5 different legal entities to run the system, and put each of them under some kind of standards body, etc etc etc. It's hard to say. All of these approaches involve complex tradeoffs. My broader point is that the original framing of blockchains (that they're not controlled by anybody) was wrong, but the reality is still relatively interesting.
- kevingadd 5y ago
  I think the way mining power ended up centralized kind of undermines the legislature comparison, though in some countries like the US the legislature is certainly manipulated enough to probably function in a similar way.
- beambot 5y ago
  > You could argue that PoW and PoS tie wealth too directly to the "legislature" membership and we ought to use a democratic vote to decide the miners/executors. Hence the advent of the DAO for governance alongside the actual utility tokens.
  - Animats 5y ago
    PoW and PoS tie wealth too directly to the "legislature" membership There is that. But nobody seems to be able to make an alternative work. Etherium postponed proof of stake yet again. What was the excuse this time? Amusing potential alternatives: - Proof of Space. Nodes have to be some minimum physical distance apart, like a few kilometers, so you can't have "mines". This might be feasible via some low-orbit satellite network you can use to establish approximate location. - Proof of Hate. Nodes are run by organizations that hate each other, so they won't collude.
jimjimjim 5y ago
Thank you sincerely for posting a concise rebuttal to all of the goal post moving linguistic exercises that occur whenever anyone dares to mention anything negative about the Bitcoin/Blockchain world.
JackFr 5y ago
In general I fully agree with the author but he goes too far here: > There are no useful cryptocurrencies today, and there will not be any at any time in the near future. Clearly criminal enterprises have made good use of cryptocurrency in the past few years.
- arcticbull 5y ago
  The Mafia is a big fan of Bitcoin and Monero. [1] [1] https://protos.com/mafia-italy-bitcoin-monero-paying-colombian-cartels-cocaine/ https://protos.com/mafia-italy-bitcoin-monero-paying-colombi...
  - DamnYuppie 5y ago
    The Mafia was even bigger fans of organized labor, government contacts, real estate, construction, and cash. The only argument less persuasive and over used than that one is “think of the children!”
    - arcticbull 5y ago
      Technology designed to actively circumvent the progress we've made in curtailing illicit use is in my opinion a bad thing. This is just wataboutism. Let's stick to one topic at a time huh?
      - matheusmoreira 5y ago
        You call total surveillance progress? Why should the government have automatic access to everyone's financial data?
        arcticbull 5y ago
        Well, Bitcoin supports total surveillance by default, so I do push back that crypto has solved that problem. Really only Cash and Monero avoid this yeah? The government should have access to everyone's financial data when presenting a warrant. If the current system doesn't work that way, we should reform the system. Not throw out a useful tool for enforcement of law.
dboreham 5y ago
Depends on the definition of "work" which I don't see clearly set forth in the article. I think the author may mean "is decentralized" but then you get into the problem of what does that mean, exactly...
- matheusmoreira 5y ago
  Decentralized means there's so many nodes on the network governments can't hope to shut them all down and stop transactions from being processed. Anything else is centralized.
pfisch 5y ago
He acts like he has an energy usage argument for POS and then misleads and pivots really hard away into another direction. Makes his whole essay kind of silly since he leads with this big energy argument that then crumbles immediately and he tries to use this kind of sleight of hand misdirect instead of acknowledging that entire argument doesn't matter when discussing cryptocurrencies in general and not just Bitcoin.
- dboreham 5y ago
  He could also have argued that PoS doesn't really work (or at least is at present unproven) but instead chose to accept it as real.
  - pfisch 5y ago
    He could've made lots of arguments. But he frontloads this irrelevant energy argument and spends almost 40% of the essay on it. It really hurts his case.
literallyaduck 5y ago
What if we allowed controlled coins (no mining just simple database). Skip the Crypto and use transparent well vetted technology to keep the transactions. Don't pretend to offer anonymity. Don't inflate the supply. Publish the transactions publicly. Edit: clarification of meaning no mining
- anonymoushn 5y ago
  I think people tried this and called it Liberty Reserve and went to prison for 20 years.
  - literallyaduck 5y ago
    From what I can tell they were laundering money, something harder to do with public transactions. Operating a financial institution with permits, and identification of participants might not draw the ire of the US government. With the transparency and lack of anonymity I would imagine the usefulness to criminals would be minimal.
madradavid 5y ago
The person who created the gist has this on their website "Available payment methods include PayPal, Bitcoin, and SEPA transfers." http://cryto.net/~joepie91/ http://cryto.net/~joepie91/
- joepie91_ 5y ago
  Correct. I am one of the seemingly handful of people who actually tries to use cryptocurrencies as currencies (and have been doing so since getting involved as an early adopter). I can assure you that that has become more and more difficult and risky over the years thanks to speculative vultures and the dynamics described in the gist. If anything, this should tell you that I'm not some armchair complainer who doesn't understand how it works. I'm also not sure why you seem to be implying some sort of conflict of interest here, since I am arguing against it.
  - matheusmoreira 5y ago
    Why not accept Monero as well? Unlike bitcoin, it's actually viable to use it as a currency.
    - joepie91_ 5y ago
      Because Bitcoin is something that some people do actually use in practice. And even then it's a rounding error in the payments I handle.
latchkey 5y ago
> And in practice, almost the entire network is controlled by a small handful of large mining companies and 'mining pools'. Not very decentralized at all. This is a common misconception. Miners are not tied to a single mining pool and can switch on a whim.
bootloop 5y ago
As are a lot of other financial tools. Some are more obvious in cheating you for your money, some are not. Make the best out of it because the system is not designed in your favor.
matheusmoreira 5y ago
This is a failure of bitcoin itself. The mining algorithm lends itself well to expensive specialized hardware. Normal people were cut off from the network, centralizing it. People realized this was a mistake long ago. Monero was updated to use new algorithms to ensure CPU mining remained viable. It's easy to mine monero as a result. More people do it and as a result the network has a greater degree of decentralization. Shame that bitcoin will never be dethroned. It's a shitty coin.
chrisfosterelli 5y ago
It feels disingenuous to start with this: > Whenever the topic of Bitcoin's energy usage comes up, there's always a flood of hastily-constructed comments by people claiming that their favourite cryptocurrency isn't like Bitcoin, that their favourite cryptocurrency is energy-efficient and scalable and whatnot. > They're wrong, and are quite possibly trying to scam you. Let's look at why. And then, 20 paragraphs later, agree they are indeed not wrong: > The only redeeming feature of proof-of-stake (and many other proof schemes) over proof-of-work is that it does indeed address the energy consumption problem I think the author has a reasonable point about the centralization problem, but I'm not sure why they spend such a large amount of time discussing the energy usage just to eventually agree with the people they're criticizing. I don't know that the average person cares about the centralization problem, especially if they don't use the currency, like they do about the energy usage problem. This seems like an odd attempt to connect the two.
- matheusmoreira 5y ago
  > I'm not sure why they spend such a large amount of time discussing the energy usage just to eventually agree with the people they're criticizing It's an incoherent argument designed to provoke an emotional response. Cryptocurrency must represent what, 0.5% of global energy usage? It's literally nothing. Yet we have all these people using their computers manufactured in China to write about how cryptocurrency is destroying the planet.
  - chrisfosterelli 5y ago
    I agree -- I think it's trying to provoke an emotional response. For the sake of discussion, though, I do actually think the energy usage is an important problem. There's a lot of things I don't "get", but ultimately most of them don't harm anyone and have nothing to do with me. I recognize many people who see benefit in cryptocurrencies might feel the energy usage is small overall compared to the potential in the technology. For the people that don't "get" cryptocurrencies, the energy usage takes it from "has nothing to do with me" to "it's harming the planet". I think it's important to resolve this issue because it will otherwise harm adoption. Additionally, proof of stake seems viable. In a world with accelerating climate change, it seems to me increasing energy efficiency should be a moral imperative. Why do something inefficiently when more efficient means exist?
rytill 5y ago
It’s essays like this that make me realize that many detractors don’t get it yet. If users decide that a chain is too centralized, they can move to a different one, much more easily than moving to a different traditional financial system. In addition, a transparent plutocracy is better than an opaque oligarchy or dictatorship.
- civilized 5y ago
  "If users decide that Facebook is too centralized, they can move to a different social network"
  - rytill 5y ago
    That quote implies that the subject is providing some value to users that makes it worth staying on the network. Do you believe Ethereum, Bitcoin, or other networks are providing value to people? If you believe there is value, you must simply disagree with the implementation, degree of centralization, principles, etc. I'm curious which project you think has the best qualities. If not, you should have no qualms with leaving the network.
  - dane-pgp 5y ago
    I would guess that it's easier for someone with an Ethereum wallet to send money to someone with a Bitcoin wallet than it is for someone on Facebook to send a message to someone's Mastodon account. My guess may be wrong, as I don't have any of the above, but I think that your analogy overlooks the interoperabilities of the systems you are comparing. To some extent, the lack of interoperability is the only thing keeping people on Facebook.
    - civilized 5y ago
      "send money"? Which money, Bitcoin or Ethereum?
      - rytill 5y ago
        Any? Either? A USD or Euro stablecoin?
cblconfederate 5y ago
That might all well be true, but how do you explain its popularity? Someone should do a sociological analysis of the rise of cryptocurrency. Each generation picks its bubbles, for social signaling and competition. For millenials and the like, expensive houses and expensive cars etc (the old world's bubbles) are useless, and they re just baiting us to sustain them. We are increasingly aware of how pensions and social security are also unsustainable bubbles (at least here in yurop). So we bubble up the things that cater to new lifestyles, the phones, the airbnbs, some possibly unsustainable but cool bubbles like tesla. But if we really don't want to cater to the old plutocracy, we bubble up imaginary coins and thin air promises like NFTs. Why? because it's ours , not theirs and it's visibly possible that our bubbles will cause their bubbles to deflate , and we ll be free of the leashes that 90genarians are holding on the economy. So , as a signaling and generational wealth vehicle cryptocurrency can and will work, because it s a tool, and it doesnt matter if it's imperfect.
jlykins 5y ago
I don't know how this got written without including the words "double spending." I'm shocked how many people have opinions about cryptocurrency without reading Satoshi's surprisingly accessible Bitcoin whitepaper: https://bitcoin.org/bitcoin.pdf https://bitcoin.org/bitcoin.pdf Preventing double spending is the reason for all of this hullaballoo, no more, no less. It's easy to create a distributed ledger, but hard to create one where you cannot double spend, hence mining and staking. You can't double spend physical cash because you can't give someone else a physical object and have it too. You can't double spend your fiat because your bank says to your counterparty "trust us bro, he didn't double spend" and your bank is pretty trustworthy. You can't double spend your bitcoin because to do so you'd have to have more than half of the computing power in the world, which is pretty tough to do, and even if you did actually succeed at double spending it would render your investment worthless, because all transactions are public and someone might notice the double spend and the value of bitcoin would plummet. Soon, you won't be able to double spend your Ethereum because if you did, everyone would notice, point it out to everyone in the network that you double spent, and then everyone would automatically slash your Ethereum stake to zero going forward and carry on without you. That's all. It has nothing fundamentally to do with voting or economic distribution or proving ownership of scare resources or anything like that. It's about preventing double spending on a distributed ledger of transactions. If you solve double spending, then yes, your cryptocurrency will work. (reposting this from the github)
- Ekaros 5y ago
  Multi spending fiat used to be pretty easy actually. Write a check, use credit card outside credit limit with slow transactions. And so on. Only thing was that on other side you had banks who were friendly with governments.
- perl4ever 5y ago
  Focusing on "solving double spending" as though it were the one thing that represents the entire financial system seems to me kind of like imagining that the global transportation system can be replaced by some sort of algorithm with the singular function of ensuring large metal objects don't physically coincide.
Geee 5y ago
Users (who run full nodes, and everyone can run one!) actually make decisions in Bitcoin. There's no voting or democracy; everyone is free to run whatever version they want (or make their own version). When users run different versions (with different validation rules), it creates a fork in the blockchain. Miners are dumb and greedy; they just follow the most profitable fork. In practice, upgrades and forks are coordinated in order to minimize disruptions. In the end it's like any software; everyone can run whatever version they want. When open-source software is combined with monetary policy, it gets little bit more interesting. No user is willing to run a version of monetary policy that makes their money worse, thus it's guaranteed to be the best form of money, now and forever. Energy use is the cost that has to be paid for predictably sound money and global monetary network that is open to everyone. If 0.1% of world's energy goes into securing it peacefully, then it's a very low price to pay.
joel_ms 5y ago
Crypto really is the grotesque despressive clown staring our desperate civilization in the face, while futily screaming about our all consuming absurdity. Crypto works fine in a world that is not addicted to burning fossil fuels. Unfortunatly, we live in a world that is not only desperately addicted to them, but literally subsidizes the consumption of fossil fuels.

105 points by zdw 5y ago

29athrowaway 5y ago

There is no harm in trying.

frankbreetz 5y ago
There is harm in using to much energy, when we are on the brink of climate crisis. There is harm when people get swindled out of money. There is harm with criminal organizations have ways to get huge amounts of capital.
- shoulderfake 5y ago
  Maybe go after industrial giants polluting the earth not bitcoin miners if you wanna fix climate change.
  - burkaman 5y ago
    Why not both?
  - deleted 5y ago
    [deleted]
  - pizzazzaro 5y ago
    Perhaps we could consider the chip shortage, and say that *coin mining is a bane on human existence.
  - theshrike79 5y ago
    Industrial giants provide something of value and they have ways of making stuff more efficient and less polluting. Crypto miners produce nothing of value and the high energy consumption is a feature of the system.
    - dane-pgp 5y ago
      How do you measure "value"? A traditional measure is "What is someone willing to give up in exchange for something?". Of course, different people value things differently, but I don't know if there is an objective measure.
- pfisch 5y ago
  "There is harm with criminal organizations have way to get huge amounts of capital." Because this isn't already the case...
  - johnyzee 5y ago
    With the criminal organizations as often as not being large investment banks...
- meowkit 5y ago
  > There is harm in using to much energy, when we are on the brink of climate crisis. You don't fight this on the demand side. You fight it on the supply side. > There is harm when people get swindled out of money. Take responsibility for your life. The government is not your friend. > There is harm with criminal organizations have ways to get huge amounts of capital. This is happening in the current economic system, and would be easier to fight if all transactions were on transparent ledgers.
  - hakfoo 5y ago
    > You don't fight this on the demand side. You fight it on the supply side. I've actually wondered, greenhouse gasses aside, if the sheer amount of direct and incidental heat generation in a modern civilization, doesn't contribute to global warming. Even on 100% carbon-free electricity, when you run a 500-watt mining unit, it's still kicking out 499.99 watts worth of heat into the air. > Take responsibility for your life. The government is not your friend. What is the purpose of government if not to enforce laws and social standards like "don't swindle people"
    - dane-pgp 5y ago
      > Even on 100% carbon-free electricity, when you run a 500-watt mining unit, it's still kicking out 499.99 watts worth of heat into the air. To use a simplistic thought experiment, imagine that all the world's electricity production today came from photovoltaic solar. Would the world be hotter or cooler due to the electricity production? Obviously the electricity usage doesn't cause more solar energy to reach the Earth from the Sun (unless we start using energy-beaming satellites), and any processes on Earth can't turn a Joule of solar energy into more than a Joule of heat, so the heat balance stays the same. Except, of course, that by not burning fossil fuels (which are stored reserves of solar energy), we would actually reduce the amount of heat released on Earth, causing a slight cooling effect.
  - antihero 5y ago
    As the article suggests, as long as people can make money by literally just burning through energy, it doesn't matter what the supply scales to, the demand will scale with it.
- ezekg 5y ago
  > There is harm in using to much energy, when we are on the brink of climate crisis. There are cryptocurrencies that do not use as much energy as Bitcoin. Really, none of your points are problems without solutions.
- 29athrowaway 5y ago
  Many cryptocurrencies were created with none of those ideas in mind. Bitcoin is an energy hog, but not every cryptocurrency has to be Bitcoin. Ethereum doesn't use as much energy. Criminal organizations use regular banks too. In fact, many financial organizations are undistinguishable from criminal organizations.
- logicalmonster 5y ago
  > There is harm in using to much energy, when we are on the brink of climate crisis. I would argue that the only climate crisis that exists is a distinct lack of imagination. Nuclear Energy has already solved all of humanity's energy needs for decades and does so in a far more environmentally friendly manner than any renewable energy solution that currently exists. > There is harm when people get swindled out of money. Fiat currencies do not protect people from inflation. In fact, they're designed to enable it and systematically rob you of your savings and purchasing power without you even seeing it. Who's swindling who? > There is harm with criminal organizations have ways to get huge amounts of capital. Do criminals sometimes use crypto? Of course. Do you know what they use far more of? Dollars, Euros, Yuan, Yen, and other fiat currencies. Criminals get a lot more mileage out of fiat currency than moving their funds around on a public ledger.

dane-pgp 5y ago

> if the currency is controlled by those who have most of it, how is this any different from government-issued currency The difference is, if a cryptocurrency is mismanaged, people can sell their holdings and buy a better-managed currency, decreasing the value for those who have the most to lose. That provides a selective pressure towards good economic governance, which doesn't exist with too-big-to-fail central banks that can require you to use their product because of legal tender laws and tax payments. Also, programmable money is inherently more valuable because of new use cases it enables, like smart contracts. That is why diversifying into cryptocurrency is better than simply diversifying into a foreign government-issued currency. Full disclaimer: I do not own, and have never owned, any cryptocurrency.

Hamuko 5y ago
Who wants to buy your mismanaged cryptocurrency when you're looking to dump it?
simias 5y ago
The problem is how you define "good economic governance". For instance a controlled amount of inflation is generally considered to be good for a currency, as it incentivizes investing your money instead of hoarding it non-productively. But if there's one thing that most cryptocurrency investors usually don't want, it's inflation. Actually, the more deflation the better. And that's the catch really, because there's nothing forcing you to use a cryptocurrency like you have to use a government-issued currency, the cryptocurrency has to reward early adopters if it wants to become popular. This in turn makes cryptocurrencies, IMO, have patently bad economic governance, since the deflationary spiral makes them unusable for anything beyond pyramid schemes. >Also, programmable money is inherently more valuable because of new use cases it enables, like smart contracts Meh, smart contracts are not so smart, and not so contractual. It's just a very inefficient scripting mechanism that doesn't really buy you all that much. Suffices to see all the modern cryptocurrency "dapp" that run on centralized, trustful chains just because they're unusably expensive to run on true decentralized blockchains. See all the stuff running on the BNB chain that's 1/ not decentralized and 2/ just a bunch of pyramid/ponzi schemes with no practical use beyond speculation.
5y ago

sargun 5y ago

I wonder what the authors opinion on Helium would be: https://www.helium.com/ https://www.helium.com/

SideburnsOfDoom 5y ago
I think there's a clue in the title.
- 1ark 5y ago
  If you suck it in, you'll talk funny?

goldcountry 5y ago

Well apparently the people of El Salvador would beg to differ.

frankbreetz 5y ago
i think you mean the president of El Salvador would disagree. it is quite an unpopular policy amounst the people of El Salvador.
- delaaxe 5y ago
  So unpopular that people are protesting in the streets https://twitter.com/Crypto_Daily/status/1432715470902284306/photo/2 https://twitter.com/Crypto_Daily/status/1432715470902284306/...
  - frankbreetz 5y ago
    This is more what I was referring to, I haven't heard of any protests. https://www.reuters.com/technology/majority-salvadorans-do-not-want-bitcoin-poll-shows-2021-09-02/ https://www.reuters.com/technology/majority-salvadorans-do-n...
beardog 5y ago
The gdp per capita of El Salvador is $3798 USD which is about $10.40/day.[1] To have a bitcoin transaction mined within roughly an hour on sep 6 2021 costs $11.44[2], making bitcoin unusable for many Salvadorans, especially for small transactions. Yes, lightning network and centralized payment platforms exist on top of Bitcoin, but these defeat the purpose of bitcoin and add complexity. 1 https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=SV https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?location... 2 https://bitcoinfees.co/ https://bitcoinfees.co/
- frankenst1 5y ago
  I would assume that the ability to receive remittances at practically zero fees without any intermediaries and a monetary supply that can't be censored or controlled by the government is more valuable to the people of El Salvador than the fact that they are transferring Bitcoins over a layer 2 network (Lightning Network) instead of the much slower and more expensive layer 1 network (Bitcoin blockchain).

gfodor 5y ago

Prediction: we will see this kind of analysis being repeated verbatim (perhaps with the names changed as the scope, scale, and nature of decentralized ledger technology evolves) for the rest of human civilization, just like we have seen it repeated verbatim for the first decade of Bitcoin. Bitcoin != Cryptocurrencies != Blockchain != Sybil mitigation mechanisms != Decentralized ledgers != Distributed decentralized consensus Each of these will unfold on distinct dynamics and have various trade offs as they do.

bob229 5y ago

Bang on, crypto is useless cult nonsense

xupybd 5y ago

I keep waiting for the Crypto ponzi scheme to burst. It doesn't and I don't understand why. I'm convinced by this that I don't understand economics at all.

Hamuko 5y ago
I think the quote "the stock market can remain irrational longer than you can remain solvent" can be very much applied to cryptocurrency as well.
- kace91 5y ago
  With a corollary, "the stock market can remain irrational long enough for you to profit from something valueless". It's of course risky, but cruptocurrencies can be a perfectly valid source of money, as long as you just risk spare money. You don't need to trust it to be a valid investment, you just need to trust that enough people will believe it is.
  - Hamuko 5y ago
    >You don't need to trust it to be a valid investment, you just need to trust that enough people will believe it is. This is called the greater fool theory. https://en.wikipedia.org/wiki/Greater_fool_theory https://en.wikipedia.org/wiki/Greater_fool_theory
dboreham 5y ago
Because if you draw the boundary around the ponzi scheme wide enough nobody realizes it's a scheme. E.g US$
- jrockway 5y ago
  What's the scheme? You can stuff US dollars into your pocket and exchange them for goods and services pretty much anywhere in the world. That's not a ponzi scheme -- that's currency.

gbasin 5y ago

Insert midcurve meme here. This reads like massive cope. One thing I've learned the hard way in life is when something goes on for years that I don't quite understand, and yet it keeps growing and getting more popular, usually I'm the one that's wrong.

gfodor 5y ago
A good tell on this one for this post specifically is it is writing down a fairly obvious, oft-repeated “rebuttal”, which is largely predicated on the people being rebutted being entirely compromised by greed and/or ignorance. This person would be incapable, it seems, to steelman his/her opponent given the contempt for them, so that backstops the notion their analysis is mostly noise.
- kevingadd 5y ago
  Does the rebuttal being "fairly obvious, oft-repeated" somehow mean that nobody actually uses it or it somehow doesn't deserve mention? If people are repeating it, they're repeating it.
  - gfodor 5y ago
    Repeating it is fine, but the longer time goes on where it’s repeated, the more the person proposing it looks like they think their opponents are just deficient not merely ignorant of the argument. The person here did us the favor of revealing their belief that their opponents are deficient, so that is helpful in reducing the weight of their post, but often this isn’t so obvious.
deleted 5y ago
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arcticbull 5y ago
> Insert midcurve meme here. This reads like massive cope. Cope is the single worst, dumbest argument you can possibly deploy because it means nothing other than you are unable to or uninterested in refuting any points levied. It's a strongly left-curve argument to engage with your meme. While the truth is, if you'd invested in TQQQ the majority of time over the last 5 years you'd have had a better return than BTC. I could make the same exact cope argument about that, but of course, that's a worthless argument. Every single day you're missing out on an investment that performs just as well as any crypto investment. Investment opportunities are like a bus route: there's always another one coming down the pike. Let's focus on the facts instead? I'm led to believe this isn't r/Bitcoin. [edit] remember: right + broke, and wrong + wealthy are both completely valid outcomes.

frazbin 5y ago

My hope is that tokenized ledger-based distributed consensus mechanisms win, while using them as a currency loses. Like, what if the correct price for a good cryptocurrency is low?

amin 5y ago
What's a "tokenized ledger-based distributed consensus mechanism" in plain English?
- frazbin 5y ago
  i was thinking of algorand, personally.. but all cryptocurrencies are 1. tokenized: we care about moving 'units' of 'value' between 'accounts' 2. ledger-based: having an immutable record of previous state changes 3. distributed: progression of state is determined by many participants who may not share a common goal 4. consensus mechanism: this is what the system gives us: a set of rules which if followed allow parties to agree on the contents of the ledger.
- 3np 5y ago
  We tend to call this "blockchain", but it's a bit of an overloaded, abused and misunderstood term so it can help to be specific.

pfraze 5y ago

The points in this post are all legit, but I think it misses a couple things. The blockchains are all controlled by some kind of plutocracy (people with wealth) as the gist describes. However there is a relatively complex dynamic between the miners/executors, the protocol developers, and the community. A blockchain protocol is a shared contract between them and the power to change that contract requires some kind of consensus between multiple parties. At one point, Bitcoin was using signals from miners to show adoption of a protocol change, which AFAICT amounted to a weighted vote, weighted by mining power. I would argue that makes the miners similar to a legislature, and makes the protocol similar to a legal system. These are the rules for social computing networks, after all. Whether any of this is really more meaningful than the alternatives, I can't say. You could argue that PoW and PoS tie wealth too directly to the "legislature" membership and we ought to use a democratic vote to decide the miners/executors. Or we should just appoint 3 or 5 different legal entities to run the system, and put each of them under some kind of standards body, etc etc etc. It's hard to say. All of these approaches involve complex tradeoffs. My broader point is that the original framing of blockchains (that they're not controlled by anybody) was wrong, but the reality is still relatively interesting.

kevingadd 5y ago
I think the way mining power ended up centralized kind of undermines the legislature comparison, though in some countries like the US the legislature is certainly manipulated enough to probably function in a similar way.
beambot 5y ago
> You could argue that PoW and PoS tie wealth too directly to the "legislature" membership and we ought to use a democratic vote to decide the miners/executors. Hence the advent of the DAO for governance alongside the actual utility tokens.
- Animats 5y ago
  PoW and PoS tie wealth too directly to the "legislature" membership There is that. But nobody seems to be able to make an alternative work. Etherium postponed proof of stake yet again. What was the excuse this time? Amusing potential alternatives: - Proof of Space. Nodes have to be some minimum physical distance apart, like a few kilometers, so you can't have "mines". This might be feasible via some low-orbit satellite network you can use to establish approximate location. - Proof of Hate. Nodes are run by organizations that hate each other, so they won't collude.

jimjimjim 5y ago

Thank you sincerely for posting a concise rebuttal to all of the goal post moving linguistic exercises that occur whenever anyone dares to mention anything negative about the Bitcoin/Blockchain world.

JackFr 5y ago

In general I fully agree with the author but he goes too far here: > There are no useful cryptocurrencies today, and there will not be any at any time in the near future. Clearly criminal enterprises have made good use of cryptocurrency in the past few years.

arcticbull 5y ago
The Mafia is a big fan of Bitcoin and Monero. [1] [1] https://protos.com/mafia-italy-bitcoin-monero-paying-colombian-cartels-cocaine/ https://protos.com/mafia-italy-bitcoin-monero-paying-colombi...
- DamnYuppie 5y ago
  The Mafia was even bigger fans of organized labor, government contacts, real estate, construction, and cash. The only argument less persuasive and over used than that one is “think of the children!”
  - arcticbull 5y ago
    Technology designed to actively circumvent the progress we've made in curtailing illicit use is in my opinion a bad thing. This is just wataboutism. Let's stick to one topic at a time huh?
    - matheusmoreira 5y ago
      You call total surveillance progress? Why should the government have automatic access to everyone's financial data?
      - arcticbull 5y ago
        Well, Bitcoin supports total surveillance by default, so I do push back that crypto has solved that problem. Really only Cash and Monero avoid this yeah? The government should have access to everyone's financial data when presenting a warrant. If the current system doesn't work that way, we should reform the system. Not throw out a useful tool for enforcement of law.

dboreham 5y ago

Depends on the definition of "work" which I don't see clearly set forth in the article. I think the author may mean "is decentralized" but then you get into the problem of what does that mean, exactly...

matheusmoreira 5y ago
Decentralized means there's so many nodes on the network governments can't hope to shut them all down and stop transactions from being processed. Anything else is centralized.

pfisch 5y ago

He acts like he has an energy usage argument for POS and then misleads and pivots really hard away into another direction. Makes his whole essay kind of silly since he leads with this big energy argument that then crumbles immediately and he tries to use this kind of sleight of hand misdirect instead of acknowledging that entire argument doesn't matter when discussing cryptocurrencies in general and not just Bitcoin.

dboreham 5y ago
He could also have argued that PoS doesn't really work (or at least is at present unproven) but instead chose to accept it as real.
- pfisch 5y ago
  He could've made lots of arguments. But he frontloads this irrelevant energy argument and spends almost 40% of the essay on it. It really hurts his case.

literallyaduck 5y ago

What if we allowed controlled coins (no mining just simple database). Skip the Crypto and use transparent well vetted technology to keep the transactions. Don't pretend to offer anonymity. Don't inflate the supply. Publish the transactions publicly. Edit: clarification of meaning no mining

anonymoushn 5y ago
I think people tried this and called it Liberty Reserve and went to prison for 20 years.
- literallyaduck 5y ago
  From what I can tell they were laundering money, something harder to do with public transactions. Operating a financial institution with permits, and identification of participants might not draw the ire of the US government. With the transparency and lack of anonymity I would imagine the usefulness to criminals would be minimal.

madradavid 5y ago

The person who created the gist has this on their website "Available payment methods include PayPal, Bitcoin, and SEPA transfers." http://cryto.net/~joepie91/ http://cryto.net/~joepie91/

joepie91_ 5y ago
Correct. I am one of the seemingly handful of people who actually tries to use cryptocurrencies as currencies (and have been doing so since getting involved as an early adopter). I can assure you that that has become more and more difficult and risky over the years thanks to speculative vultures and the dynamics described in the gist. If anything, this should tell you that I'm not some armchair complainer who doesn't understand how it works. I'm also not sure why you seem to be implying some sort of conflict of interest here, since I am arguing against it.
- matheusmoreira 5y ago
  Why not accept Monero as well? Unlike bitcoin, it's actually viable to use it as a currency.
  - joepie91_ 5y ago
    Because Bitcoin is something that some people do actually use in practice. And even then it's a rounding error in the payments I handle.

latchkey 5y ago

> And in practice, almost the entire network is controlled by a small handful of large mining companies and 'mining pools'. Not very decentralized at all. This is a common misconception. Miners are not tied to a single mining pool and can switch on a whim.

bootloop 5y ago

As are a lot of other financial tools. Some are more obvious in cheating you for your money, some are not. Make the best out of it because the system is not designed in your favor.

matheusmoreira 5y ago

This is a failure of bitcoin itself. The mining algorithm lends itself well to expensive specialized hardware. Normal people were cut off from the network, centralizing it. People realized this was a mistake long ago. Monero was updated to use new algorithms to ensure CPU mining remained viable. It's easy to mine monero as a result. More people do it and as a result the network has a greater degree of decentralization. Shame that bitcoin will never be dethroned. It's a shitty coin.

chrisfosterelli 5y ago

It feels disingenuous to start with this: > Whenever the topic of Bitcoin's energy usage comes up, there's always a flood of hastily-constructed comments by people claiming that their favourite cryptocurrency isn't like Bitcoin, that their favourite cryptocurrency is energy-efficient and scalable and whatnot. > They're wrong, and are quite possibly trying to scam you. Let's look at why. And then, 20 paragraphs later, agree they are indeed not wrong: > The only redeeming feature of proof-of-stake (and many other proof schemes) over proof-of-work is that it does indeed address the energy consumption problem I think the author has a reasonable point about the centralization problem, but I'm not sure why they spend such a large amount of time discussing the energy usage just to eventually agree with the people they're criticizing. I don't know that the average person cares about the centralization problem, especially if they don't use the currency, like they do about the energy usage problem. This seems like an odd attempt to connect the two.

matheusmoreira 5y ago
> I'm not sure why they spend such a large amount of time discussing the energy usage just to eventually agree with the people they're criticizing It's an incoherent argument designed to provoke an emotional response. Cryptocurrency must represent what, 0.5% of global energy usage? It's literally nothing. Yet we have all these people using their computers manufactured in China to write about how cryptocurrency is destroying the planet.
- chrisfosterelli 5y ago
  I agree -- I think it's trying to provoke an emotional response. For the sake of discussion, though, I do actually think the energy usage is an important problem. There's a lot of things I don't "get", but ultimately most of them don't harm anyone and have nothing to do with me. I recognize many people who see benefit in cryptocurrencies might feel the energy usage is small overall compared to the potential in the technology. For the people that don't "get" cryptocurrencies, the energy usage takes it from "has nothing to do with me" to "it's harming the planet". I think it's important to resolve this issue because it will otherwise harm adoption. Additionally, proof of stake seems viable. In a world with accelerating climate change, it seems to me increasing energy efficiency should be a moral imperative. Why do something inefficiently when more efficient means exist?

rytill 5y ago

It’s essays like this that make me realize that many detractors don’t get it yet. If users decide that a chain is too centralized, they can move to a different one, much more easily than moving to a different traditional financial system. In addition, a transparent plutocracy is better than an opaque oligarchy or dictatorship.

civilized 5y ago
"If users decide that Facebook is too centralized, they can move to a different social network"
- rytill 5y ago
  That quote implies that the subject is providing some value to users that makes it worth staying on the network. Do you believe Ethereum, Bitcoin, or other networks are providing value to people? If you believe there is value, you must simply disagree with the implementation, degree of centralization, principles, etc. I'm curious which project you think has the best qualities. If not, you should have no qualms with leaving the network.
- dane-pgp 5y ago
  I would guess that it's easier for someone with an Ethereum wallet to send money to someone with a Bitcoin wallet than it is for someone on Facebook to send a message to someone's Mastodon account. My guess may be wrong, as I don't have any of the above, but I think that your analogy overlooks the interoperabilities of the systems you are comparing. To some extent, the lack of interoperability is the only thing keeping people on Facebook.
  - civilized 5y ago
    "send money"? Which money, Bitcoin or Ethereum?
    - rytill 5y ago
      Any? Either? A USD or Euro stablecoin?

cblconfederate 5y ago

That might all well be true, but how do you explain its popularity? Someone should do a sociological analysis of the rise of cryptocurrency. Each generation picks its bubbles, for social signaling and competition. For millenials and the like, expensive houses and expensive cars etc (the old world's bubbles) are useless, and they re just baiting us to sustain them. We are increasingly aware of how pensions and social security are also unsustainable bubbles (at least here in yurop). So we bubble up the things that cater to new lifestyles, the phones, the airbnbs, some possibly unsustainable but cool bubbles like tesla. But if we really don't want to cater to the old plutocracy, we bubble up imaginary coins and thin air promises like NFTs. Why? because it's ours , not theirs and it's visibly possible that our bubbles will cause their bubbles to deflate , and we ll be free of the leashes that 90genarians are holding on the economy. So , as a signaling and generational wealth vehicle cryptocurrency can and will work, because it s a tool, and it doesnt matter if it's imperfect.

jlykins 5y ago

I don't know how this got written without including the words "double spending." I'm shocked how many people have opinions about cryptocurrency without reading Satoshi's surprisingly accessible Bitcoin whitepaper: https://bitcoin.org/bitcoin.pdf https://bitcoin.org/bitcoin.pdf Preventing double spending is the reason for all of this hullaballoo, no more, no less. It's easy to create a distributed ledger, but hard to create one where you cannot double spend, hence mining and staking. You can't double spend physical cash because you can't give someone else a physical object and have it too. You can't double spend your fiat because your bank says to your counterparty "trust us bro, he didn't double spend" and your bank is pretty trustworthy. You can't double spend your bitcoin because to do so you'd have to have more than half of the computing power in the world, which is pretty tough to do, and even if you did actually succeed at double spending it would render your investment worthless, because all transactions are public and someone might notice the double spend and the value of bitcoin would plummet. Soon, you won't be able to double spend your Ethereum because if you did, everyone would notice, point it out to everyone in the network that you double spent, and then everyone would automatically slash your Ethereum stake to zero going forward and carry on without you. That's all. It has nothing fundamentally to do with voting or economic distribution or proving ownership of scare resources or anything like that. It's about preventing double spending on a distributed ledger of transactions. If you solve double spending, then yes, your cryptocurrency will work. (reposting this from the github)

Ekaros 5y ago
Multi spending fiat used to be pretty easy actually. Write a check, use credit card outside credit limit with slow transactions. And so on. Only thing was that on other side you had banks who were friendly with governments.
perl4ever 5y ago
Focusing on "solving double spending" as though it were the one thing that represents the entire financial system seems to me kind of like imagining that the global transportation system can be replaced by some sort of algorithm with the singular function of ensuring large metal objects don't physically coincide.

Geee 5y ago

Users (who run full nodes, and everyone can run one!) actually make decisions in Bitcoin. There's no voting or democracy; everyone is free to run whatever version they want (or make their own version). When users run different versions (with different validation rules), it creates a fork in the blockchain. Miners are dumb and greedy; they just follow the most profitable fork. In practice, upgrades and forks are coordinated in order to minimize disruptions. In the end it's like any software; everyone can run whatever version they want. When open-source software is combined with monetary policy, it gets little bit more interesting. No user is willing to run a version of monetary policy that makes their money worse, thus it's guaranteed to be the best form of money, now and forever. Energy use is the cost that has to be paid for predictably sound money and global monetary network that is open to everyone. If 0.1% of world's energy goes into securing it peacefully, then it's a very low price to pay.

joel_ms 5y ago

Crypto really is the grotesque despressive clown staring our desperate civilization in the face, while futily screaming about our all consuming absurdity. Crypto works fine in a world that is not addicted to burning fossil fuels. Unfortunatly, we live in a world that is not only desperately addicted to them, but literally subsidizes the consumption of fossil fuels.