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This is factually incorrect. I'm not a fan at all of proof of work schemes, but it's important to criticize them correctly. Energy consumption is not fundament

This is factually incorrect. I'm not a fan at all of proof of work schemes, but it's important to criticize them correctly. Energy consumption is not fundamental in any way. Proof of work depends only in the consumption of some resource that has economic value. It doesn't have to require any energy at all. For example, Chia had a proof of work mechanism that uses disk storage instead of computation. It uses comparably very little energy and the difficulty is not substantially sensitive to energy efficiency because the cost is dominated by space rather than computation. There are other examples that attempt to use things like spatially distributed network bandwidth as a resource. I'm not a fan of most of these, but the point is that energy is not fundamental.

lisper 5y ago
> Chia had a proof of work mechanism that uses disk storage instead of computation And how do you think those disks get made? (And how do you run those disks without expending energy?)
- mgraczyk 5y ago
  They do use energy, but it's very small compared to other economic activity. For example, suppose Bitcoin consumed as much energy as a few households. Would that be acceptable? Alternatives aren't quite that efficient, but my point is that the relative energy consumption matters a lot.
  - xg15 5y ago
    > For example, suppose Bitcoin consumed as much energy as a few households. Would that be acceptable? But in this scenario, Bitcoin would consume rising amounts of some other resource, say SSDs or network capacity.
  - lisper 5y ago
    > suppose Bitcoin consumed as much energy as a few households That's not possible. The marginal cost of mining has to equal the value of the coins mined.
    - mgraczyk 5y ago
      The cost can come from things that do not consume energy, for example fabricating a complex chip that includes rare materials.
      - slavik81 5y ago
        So, proof-of-gold?
      - lisper 5y ago
        And where do you think those rare materials come from?
xg15 5y ago
> Energy consumption is not fundamental in any way. Proof of work depends only in the consumption of some resource that has economic value. Yes, or in other words: PoW has to waste something valuable. This something doesn't have to be energy, it can also be physical devices + the energy needed to produce/operate them - or whatever else someone can think up. My actual point was that the amount of cost per unit of work is unbounded - and to my knowledge this is true for all PoW schemes: Otherwise, an attacker could simply invest enough resources to produce more work units than everyone else and capture the network.
- mgraczyk 5y ago
  Your facts are true, but I disagree with your conclusion. The resource consumption is actually bounded by the economic value of the network, or the value of attacking the network. If the network generates $100 of value (in terms of market cap etc) for each $1 spent to operate it, then the resource consumption if the network is essentially bounded to 1/100 of global GDP. This is also assuming network operators capture 100% of the value of the network, which is too high by at least an order of magnitude for most networks. Networks with bigger ratios truly are more efficient, even in absurd hypotheticals in which all economic activity is devoted to operating the network. All I'm assuming here is that actors don't put in more than they get out of it.
  - xg15 5y ago
    > If the network generates $100 of value (in terms of market cap etc) for each $1 spent to operate it, then the resource consumption if the network is essentially bounded to 1/100 of global GDP. I agree with this point - but over the last few years, we have seen how wildly the perceived value of cryptocurrencies can fluctuate. There are a lot of actors who are strongly interested in driving up the value - either through legitimate means, but just as often through fraud, e.g. manipulated exchanges, wash trading, etc. So the market cap can easily reach fantasy numbers which aren't really justified by economic utility - but because this fantasy valuation represents real money for miners, energy consumption will follow it.
  - Beldin 5y ago
kaba0 5y ago
It doesn’t change the fact that they are fundamentally wasteful
- mgraczyk 5y ago
  "waste" is purely subjective. Is it wasteful that televisions exist just because I don't like watching them? What if televisions used more or less resources? Shouldn't the actual quantities matter more than our opinions about the merits of the activity?
  - xg15 5y ago
    > "waste" is purely subjective Nope.
    - can16358p 5y ago
      It depends on what you value. If you value energy efficiency, Bitcoin is extremely wasteful for sure. However if you value freedom/decentralization, it isn't. (I know about the debatable parts of decentralization and Bitcoin but you probably got the main idea)
      - xg15 5y ago
        > However if you value freedom/decentralization, it isn't. Then your passion for freedom has to grow in lockstep with the Bitcoin market cap, because this is what tracks the actual cost per unit of work with Bitcoin. Also note who has to bear the cost: PoW resource waste is something that affects everyone, even if only a small group perceives it as valuable.
        can16358p 5y ago
        Well a total economic revolution isn't going to happen overnight. It will take many more years if that's going to happen, and where it's going, even with all the scalability and PoW/waste problems, is still in the right direction given today's economic system.
spurgu 5y ago
> Energy consumption is not fundamental in any way. Isn't the opposite true though? That everything is either directly or indirectly tied to energy? Cost of disk space vs computing power is just an equation of the energy put into it (mining, manufacturing, marketing, shipping). Maybe I'm too hungover to think this through. :D > It uses comparably very little energy and the difficulty is not substantially sensitive to energy efficiency because the cost is dominated by space rather than computation. I don't see how this would equate in the end. If you want to keep the level of difficulty high enough it would have to go hand in hand with real life resources (= energy). Granted there are complex externalities in the calculation and computing continuously uses energy while disk space is more of an "expend and forget" type of scenario, but to me that would simply result in malicious actors being able to afford to put more resources into it (buying more disk space) until we're at the level of the same energy expenditure.
tromp 5y ago
Chia's Proof of Space Time is not Proof of Work. They are different forms of Proof of Resource.
inter_netuser 5y ago
Chia simply produces e-waste, instead of consuming electricity. There is no free lunch.
- mgraczyk 5y ago
  I don't think the e-waste is economically relevant. The environmental cost of Chia is much higher than the cost of cleaning up its e-waste. It's also much lower than than the cost would be if Chia were protected purely by energy. To be more specific, the dominant cost is the opportunity cost of disk space. Producing and using a drive can't be accounted for as "e-waste", otherwise you'd be forced to claim that drive efficiency doesn't matter because more efficient drives produce just as much e-waste.
  - inter_netuser 5y ago
    It literally wears out SSDs. Are you running a chia node? I wasn’t trying to be funny. chia nodes regularly wears out crappy consumer-grade SSDs, and it’s cheaper to just burn through them than buy more resilient drives.
    - mgraczyk 5y ago
      Yes you're 100% correct about that, but the cost of properly disposing of a failed drive (e-waste) is insignificant for Chia. The real cost is from buying the drives, which is not e-waste. You'd have to convince me that there are enough unrecoverable nonrenewables in disk drives for this to be a significant "environmental" cost, and I think it clearly is not.
      - inter_netuser 5y ago
        If you accept that one can produce SSDs sustainably, how is that any different from sustainably produced electricity?
        mgraczyk 5y ago

lisper 5y ago

> Chia had a proof of work mechanism that uses disk storage instead of computation And how do you think those disks get made? (And how do you run those disks without expending energy?)

mgraczyk 5y ago
They do use energy, but it's very small compared to other economic activity. For example, suppose Bitcoin consumed as much energy as a few households. Would that be acceptable? Alternatives aren't quite that efficient, but my point is that the relative energy consumption matters a lot.
- xg15 5y ago
  > For example, suppose Bitcoin consumed as much energy as a few households. Would that be acceptable? But in this scenario, Bitcoin would consume rising amounts of some other resource, say SSDs or network capacity.
- lisper 5y ago
  > suppose Bitcoin consumed as much energy as a few households That's not possible. The marginal cost of mining has to equal the value of the coins mined.
  - mgraczyk 5y ago
    The cost can come from things that do not consume energy, for example fabricating a complex chip that includes rare materials.
    - slavik81 5y ago
      So, proof-of-gold?
    - lisper 5y ago
      And where do you think those rare materials come from?

xg15 5y ago

> Energy consumption is not fundamental in any way. Proof of work depends only in the consumption of some resource that has economic value. Yes, or in other words: PoW has to waste something valuable. This something doesn't have to be energy, it can also be physical devices + the energy needed to produce/operate them - or whatever else someone can think up. My actual point was that the amount of cost per unit of work is unbounded - and to my knowledge this is true for all PoW schemes: Otherwise, an attacker could simply invest enough resources to produce more work units than everyone else and capture the network.

mgraczyk 5y ago
Your facts are true, but I disagree with your conclusion. The resource consumption is actually bounded by the economic value of the network, or the value of attacking the network. If the network generates $100 of value (in terms of market cap etc) for each $1 spent to operate it, then the resource consumption if the network is essentially bounded to 1/100 of global GDP. This is also assuming network operators capture 100% of the value of the network, which is too high by at least an order of magnitude for most networks. Networks with bigger ratios truly are more efficient, even in absurd hypotheticals in which all economic activity is devoted to operating the network. All I'm assuming here is that actors don't put in more than they get out of it.
- xg15 5y ago
  > If the network generates $100 of value (in terms of market cap etc) for each $1 spent to operate it, then the resource consumption if the network is essentially bounded to 1/100 of global GDP. I agree with this point - but over the last few years, we have seen how wildly the perceived value of cryptocurrencies can fluctuate. There are a lot of actors who are strongly interested in driving up the value - either through legitimate means, but just as often through fraud, e.g. manipulated exchanges, wash trading, etc. So the market cap can easily reach fantasy numbers which aren't really justified by economic utility - but because this fantasy valuation represents real money for miners, energy consumption will follow it.
- Beldin 5y ago

kaba0 5y ago

It doesn’t change the fact that they are fundamentally wasteful

mgraczyk 5y ago
"waste" is purely subjective. Is it wasteful that televisions exist just because I don't like watching them? What if televisions used more or less resources? Shouldn't the actual quantities matter more than our opinions about the merits of the activity?
- xg15 5y ago
  > "waste" is purely subjective Nope.
  - can16358p 5y ago
    It depends on what you value. If you value energy efficiency, Bitcoin is extremely wasteful for sure. However if you value freedom/decentralization, it isn't. (I know about the debatable parts of decentralization and Bitcoin but you probably got the main idea)
    - xg15 5y ago
      > However if you value freedom/decentralization, it isn't. Then your passion for freedom has to grow in lockstep with the Bitcoin market cap, because this is what tracks the actual cost per unit of work with Bitcoin. Also note who has to bear the cost: PoW resource waste is something that affects everyone, even if only a small group perceives it as valuable.
      - can16358p 5y ago
        Well a total economic revolution isn't going to happen overnight. It will take many more years if that's going to happen, and where it's going, even with all the scalability and PoW/waste problems, is still in the right direction given today's economic system.

spurgu 5y ago

> Energy consumption is not fundamental in any way. Isn't the opposite true though? That everything is either directly or indirectly tied to energy? Cost of disk space vs computing power is just an equation of the energy put into it (mining, manufacturing, marketing, shipping). Maybe I'm too hungover to think this through. :D > It uses comparably very little energy and the difficulty is not substantially sensitive to energy efficiency because the cost is dominated by space rather than computation. I don't see how this would equate in the end. If you want to keep the level of difficulty high enough it would have to go hand in hand with real life resources (= energy). Granted there are complex externalities in the calculation and computing continuously uses energy while disk space is more of an "expend and forget" type of scenario, but to me that would simply result in malicious actors being able to afford to put more resources into it (buying more disk space) until we're at the level of the same energy expenditure.

tromp 5y ago

Chia's Proof of Space Time is not Proof of Work. They are different forms of Proof of Resource.

inter_netuser 5y ago

Chia simply produces e-waste, instead of consuming electricity. There is no free lunch.

mgraczyk 5y ago
I don't think the e-waste is economically relevant. The environmental cost of Chia is much higher than the cost of cleaning up its e-waste. It's also much lower than than the cost would be if Chia were protected purely by energy. To be more specific, the dominant cost is the opportunity cost of disk space. Producing and using a drive can't be accounted for as "e-waste", otherwise you'd be forced to claim that drive efficiency doesn't matter because more efficient drives produce just as much e-waste.
- inter_netuser 5y ago
  It literally wears out SSDs. Are you running a chia node? I wasn’t trying to be funny. chia nodes regularly wears out crappy consumer-grade SSDs, and it’s cheaper to just burn through them than buy more resilient drives.
  - mgraczyk 5y ago
    Yes you're 100% correct about that, but the cost of properly disposing of a failed drive (e-waste) is insignificant for Chia. The real cost is from buying the drives, which is not e-waste. You'd have to convince me that there are enough unrecoverable nonrenewables in disk drives for this to be a significant "environmental" cost, and I think it clearly is not.
    - inter_netuser 5y ago
      If you accept that one can produce SSDs sustainably, how is that any different from sustainably produced electricity?
      - mgraczyk 5y ago