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> 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 some

> 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/

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/