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"burned nearly $200 million worth of Ethereum" I wouldn't say it was "wasted" - some people made a lot of money out of it.

solveit 4y ago
Also, it's not like Ethereum is a physical good that can be destroyed. It's just a bookkeeping tool and what happened is people trying to mint NFTs gave up their portion of the total supply in exchange for having their transactions go first. The "wasted" fees were in effect distributed equally to every other ETH in existence.
vkou 4y ago
Did ~$200 million dollars worth of electricity & hardware depreciation get burnt as part of this land sale? If so, I'd say that it's close to 'wasted', given that as I understand, the only thing of value that has been created is only useful for financial speculation. We're paying people to dig ditches, and then fill them. Just because the ditchdiggers got paid doesn't mean their effort isn't wasted!
- tshaddox 4y ago
  I don't think the way it works is that every blockchain transaction of value X requires an equivalent cost X (denominated in USD) of electricity usage and hardware depreciation.
  - vkou 4y ago
    ... Right. Duh. If this was simply a surprise pay-day for miners (as opposed to the real cost of running the network), you are right, in that extent. In that case, yes, from a productivity & resource usage point of view, this wasn't a waste of $200 million.
- rglullis 4y ago
  No, it didn't. The amount of electricity used doesn't increase because of network congestion, and with Ethereum's mining reward system, there is no incentive for miners to increase their hash rate just for high-congestion moments. Lastly, these reports really need to stop denominating things in USD. 64k ETH were burned, the dollar amount is not related to it.
- whimsicalism 4y ago
  Not going to comment on the specific claims here, but "speculation" is often a useful activity if we care about planning for the long-term and adequately allocating resources.
  - vkou 4y ago
    It is, if it actually results in useful, productive, real-world work to be done more efficiently. I understand why people may want to trade futures, or hedge against instability in FOREX or interest rates, and how this spawns a side-industry of derivatives traders and speculators, etc, etc. Unfortunately, the ratio of speculation to productive real-world work done by the crypto space seems to be ~0, compared to speculation in most of the real-world economy. If all of these ICOs and NFTs were producing valuable goods (food, medicine, shelter, widgets, entertainment[1]) left and right, more efficiently than the traditional economy, I wouldn't accuse the space of being purely speculative. [1] Well, it does produce some entertainment...
    - whimsicalism 4y ago
      Stablecoin adoption in the developing world seems to be of value. Compensating artists and thus incentivizing artwork seems probably good too. But I'm not very familiar with the space as I've said.
theptip 4y ago
Right, “burned” suggests it was destroyed. Instead this was paid to miners. The service the miners are providing is auctioning off time-slots in the network. This is load-shedding in action; if you don’t think your transaction is worth the fee, wait until the network is less congested. (Sure, this is probably an indictment of Ethereum-as-currency, but I don’t think that’s a use-case that is seriously contemplated by most market participants right now.) Edit: this first part may be false, fees are apparently actually burned now. Sorry. https://news.ycombinator.com/item?id=31241054#31241311 https://news.ycombinator.com/item?id=31241054#31241311
- bagacrap 4y ago
  so is it like a share buyback, incrementally increasing the value of all held etc?

solveit 4y ago

Also, it's not like Ethereum is a physical good that can be destroyed. It's just a bookkeeping tool and what happened is people trying to mint NFTs gave up their portion of the total supply in exchange for having their transactions go first. The "wasted" fees were in effect distributed equally to every other ETH in existence.

vkou 4y ago

Did ~$200 million dollars worth of electricity & hardware depreciation get burnt as part of this land sale? If so, I'd say that it's close to 'wasted', given that as I understand, the only thing of value that has been created is only useful for financial speculation. We're paying people to dig ditches, and then fill them. Just because the ditchdiggers got paid doesn't mean their effort isn't wasted!

tshaddox 4y ago
I don't think the way it works is that every blockchain transaction of value X requires an equivalent cost X (denominated in USD) of electricity usage and hardware depreciation.
- vkou 4y ago
  ... Right. Duh. If this was simply a surprise pay-day for miners (as opposed to the real cost of running the network), you are right, in that extent. In that case, yes, from a productivity & resource usage point of view, this wasn't a waste of $200 million.
rglullis 4y ago
No, it didn't. The amount of electricity used doesn't increase because of network congestion, and with Ethereum's mining reward system, there is no incentive for miners to increase their hash rate just for high-congestion moments. Lastly, these reports really need to stop denominating things in USD. 64k ETH were burned, the dollar amount is not related to it.
whimsicalism 4y ago
Not going to comment on the specific claims here, but "speculation" is often a useful activity if we care about planning for the long-term and adequately allocating resources.
- vkou 4y ago
  It is, if it actually results in useful, productive, real-world work to be done more efficiently. I understand why people may want to trade futures, or hedge against instability in FOREX or interest rates, and how this spawns a side-industry of derivatives traders and speculators, etc, etc. Unfortunately, the ratio of speculation to productive real-world work done by the crypto space seems to be ~0, compared to speculation in most of the real-world economy. If all of these ICOs and NFTs were producing valuable goods (food, medicine, shelter, widgets, entertainment[1]) left and right, more efficiently than the traditional economy, I wouldn't accuse the space of being purely speculative. [1] Well, it does produce some entertainment...
  - whimsicalism 4y ago
    Stablecoin adoption in the developing world seems to be of value. Compensating artists and thus incentivizing artwork seems probably good too. But I'm not very familiar with the space as I've said.

theptip 4y ago

Right, “burned” suggests it was destroyed. Instead this was paid to miners. The service the miners are providing is auctioning off time-slots in the network. This is load-shedding in action; if you don’t think your transaction is worth the fee, wait until the network is less congested. (Sure, this is probably an indictment of Ethereum-as-currency, but I don’t think that’s a use-case that is seriously contemplated by most market participants right now.) Edit: this first part may be false, fees are apparently actually burned now. Sorry. https://news.ycombinator.com/item?id=31241054#31241311 https://news.ycombinator.com/item?id=31241054#31241311

bagacrap 4y ago
so is it like a share buyback, incrementally increasing the value of all held etc?