3 ms·

PoW(hatever) is a cancer as long as the "Whatever" doesn't have any value behind it, it doesn't bring value to society because it's guaranteed to take resources

PoW(hatever) is a cancer as long as the "Whatever" doesn't have any value behind it, it doesn't bring value to society because it's guaranteed to take resources without leaving anything useful behind. It incentivizes people to abuse anything at hand to obtain proof of that otherwise worthless "Whatever". Whether it's "work" or "space" or "time" then someone will always look to abuse others to obtain more proof without it creating any value. Unlike money (generically) PoWhatever cryptocurrencies aren't backed by anything anyone can define as valuable. Proof of Housing_built, Proof of Goods_transported, Proof of Music_created, Proof of Space_flights all create real value. Proof of Work where the work is without doubt useless in itself and an absolute net loss for society can't result in anything practically valuable. At best it results in a very wasteful Ponzi scheme. Imagine something as innocent as "proof of clapping hands", you may get some reward for holding a record but it's otherwise completely useless. That at least only affects you and your hands, even if a waste of time that doesn't seem to bring anything of value - joy or other practical benefits. What if someone could abuse you and force you to clap at the cost of lost productivity at work, health issues, etc. and the result of that work is... nothing?

nightski 5y ago
But at the end of the day, you can only imagine proof of clapping hands because yes that example is useless. But proof of work is not useless, hence we don't have to imagine it. Distributed consensus is useful to many people at this point.
- mirntyfirty 5y ago
  How many people? How useful? What is the distribution of that useful amongst those people? At what cost does this useful stop being useful?
- buran77 5y ago
  > you can only imagine proof of clapping hands because yes that example is useless. People do it all the time, it must have something. But no practical value. But let's not argue for the sake of arguing. It's like saying Ponzi schemes are good otherwise so many people wouldn't be into them. Or any example of things so many people do that have no value and we'd really rather they stopped. Proof of Whatever is just about gobbling up some resource (sometimes with incredibly high cost for society in general) for some artificially driven value but of no practical positive consequences to almost anyone in the world. Except for the few that are incentivized to make it look more valuable because they've invested and its actual value never changed. It's still a solution waiting for a problem. And before you argue more, the computer and internet you're using to post your opinions were created with far less waste and provide far more value. If they go away tomorrow the world will suffer a lot, society will literally regress decades. If proof of waste goes away the "investors" in the pyramid will suffer for being tricked and the rest of the world wouldn't bat an eye.
danuker 5y ago
The supposed usefulness of the work sacrificed in proof-of-work is to prevent Sybil attacks on the network. An attacker can spawn millions of virtual nodes, yet they will never hijack consensus because of the objectively-measurable resource sacrifice. While there may be too much reward for this sacrifice currently, the idea is a sound one.
- buran77 5y ago
  > The supposed usefulness of the work sacrificed in proof-of-work is to prevent Sybil attacks The usefulness of PoW is to reinforce a system that produces something. Presumably the higher the value of that something, the more you're willing to waste enabling it. If you're burning through an estimated 110TWh of electricity per year (as of last year, one Netherland's worth) enabling that system, you should be able to show one Netherland's worth of value being created. > While there may be too much reward for this sacrifice currently You probably meant it the other way around, too much sacrifice for the reward. Wouldn't the concept of creating value imply that net value was created? > the idea is a sound one. In theory many ideas are but the implementation matters. So in practice you'd be hard pressed to show the net value. And I'm not talking about showing me 1 BTC is worth $50.000 more than you can say a defunct company is worth billions because some was doing a pump and dump.
  - danuker 5y ago
    > You probably meant it the other way around, too much sacrifice for the reward. Wouldn't the concept of creating value imply that net value was created? Without the reward, there would be no sacrifice. The reward drives the sacrifice, and it is strictly higher than the sacrifice, otherwise people would not sacrifice in order to lose money and waste resources. Unfortunately, right now the value created is less than the sacrifice (and I agree with you), which is in turn less than the reward (see the next point). > So in practice you'd be hard pressed to show the net value. The Bitcoin transaction fees are higher than $300k/day [1]. So, at least that much value is provided to those transacting, otherwise they would not transact. Unfortunately, the current implementation still adds a hefty (100x larger) inflationary reward on top - so miners make upwards of $30M/day. [2] While such a ratio may have been useful in the early days, now that virtually everyone interested knows about Bitcoin, I argue (and agree with you) that this inflationary reward is excessive. In addition, I argue that the resource sacrifice is excessive because this inflationary reward is excessive. Had the creator(s) of Bitcoin predicted the meteoric rise of the price, they would have diminished this reward more quickly than the current schedule. [3] Maybe someone could fork a "Bitcoin Green" or whatnot, with the difference that the reward schedule is sped up, and hopefully it would gather a meaningful amount of hash power to prevent 51% attacks [4]. [1] - https://www.blockchain.com/charts/transaction-fees-usd https://www.blockchain.com/charts/transaction-fees-usd [2] - https://www.blockchain.com/charts/miners-revenue https://www.blockchain.com/charts/miners-revenue [3] - https://en.bitcoin.it/wiki/Controlled_supply https://en.bitcoin.it/wiki/Controlled_supply [4] - https://www.crypto51.app/ https://www.crypto51.app/

nightski 5y ago

But at the end of the day, you can only imagine proof of clapping hands because yes that example is useless. But proof of work is not useless, hence we don't have to imagine it. Distributed consensus is useful to many people at this point.

mirntyfirty 5y ago
How many people? How useful? What is the distribution of that useful amongst those people? At what cost does this useful stop being useful?
buran77 5y ago
> you can only imagine proof of clapping hands because yes that example is useless. People do it all the time, it must have something. But no practical value. But let's not argue for the sake of arguing. It's like saying Ponzi schemes are good otherwise so many people wouldn't be into them. Or any example of things so many people do that have no value and we'd really rather they stopped. Proof of Whatever is just about gobbling up some resource (sometimes with incredibly high cost for society in general) for some artificially driven value but of no practical positive consequences to almost anyone in the world. Except for the few that are incentivized to make it look more valuable because they've invested and its actual value never changed. It's still a solution waiting for a problem. And before you argue more, the computer and internet you're using to post your opinions were created with far less waste and provide far more value. If they go away tomorrow the world will suffer a lot, society will literally regress decades. If proof of waste goes away the "investors" in the pyramid will suffer for being tricked and the rest of the world wouldn't bat an eye.

danuker 5y ago

The supposed usefulness of the work sacrificed in proof-of-work is to prevent Sybil attacks on the network. An attacker can spawn millions of virtual nodes, yet they will never hijack consensus because of the objectively-measurable resource sacrifice. While there may be too much reward for this sacrifice currently, the idea is a sound one.

buran77 5y ago
> The supposed usefulness of the work sacrificed in proof-of-work is to prevent Sybil attacks The usefulness of PoW is to reinforce a system that produces something. Presumably the higher the value of that something, the more you're willing to waste enabling it. If you're burning through an estimated 110TWh of electricity per year (as of last year, one Netherland's worth) enabling that system, you should be able to show one Netherland's worth of value being created. > While there may be too much reward for this sacrifice currently You probably meant it the other way around, too much sacrifice for the reward. Wouldn't the concept of creating value imply that net value was created? > the idea is a sound one. In theory many ideas are but the implementation matters. So in practice you'd be hard pressed to show the net value. And I'm not talking about showing me 1 BTC is worth $50.000 more than you can say a defunct company is worth billions because some was doing a pump and dump.
- danuker 5y ago
  > You probably meant it the other way around, too much sacrifice for the reward. Wouldn't the concept of creating value imply that net value was created? Without the reward, there would be no sacrifice. The reward drives the sacrifice, and it is strictly higher than the sacrifice, otherwise people would not sacrifice in order to lose money and waste resources. Unfortunately, right now the value created is less than the sacrifice (and I agree with you), which is in turn less than the reward (see the next point). > So in practice you'd be hard pressed to show the net value. The Bitcoin transaction fees are higher than $300k/day [1]. So, at least that much value is provided to those transacting, otherwise they would not transact. Unfortunately, the current implementation still adds a hefty (100x larger) inflationary reward on top - so miners make upwards of $30M/day. [2] While such a ratio may have been useful in the early days, now that virtually everyone interested knows about Bitcoin, I argue (and agree with you) that this inflationary reward is excessive. In addition, I argue that the resource sacrifice is excessive because this inflationary reward is excessive. Had the creator(s) of Bitcoin predicted the meteoric rise of the price, they would have diminished this reward more quickly than the current schedule. [3] Maybe someone could fork a "Bitcoin Green" or whatnot, with the difference that the reward schedule is sped up, and hopefully it would gather a meaningful amount of hash power to prevent 51% attacks [4]. [1] - https://www.blockchain.com/charts/transaction-fees-usd https://www.blockchain.com/charts/transaction-fees-usd [2] - https://www.blockchain.com/charts/miners-revenue https://www.blockchain.com/charts/miners-revenue [3] - https://en.bitcoin.it/wiki/Controlled_supply https://en.bitcoin.it/wiki/Controlled_supply [4] - https://www.crypto51.app/ https://www.crypto51.app/