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> PoW incentivizes renewable energy development. PoW incentivizes energy development. And then proceeds to use it all up on PoW. It's a paperclip optimizer, ex

• kybernetikos 4y ago
  > The only downside of course being that it essentially hard-codes the "1% of people make 99% of the money" principle. This is only true if the only or best way to make money is through staking. This is unlikely to be the case - the ability to deposit your cash in a savings account or park it in government bonds doesn't stop people from investing in stocks. What it does instead is put a floor on acceptable rates of return from more risky options.
• AgentME 4y ago
  >The only downside of course being that it essentially hard-codes the "1% of people make 99% of the money" principle. Anyone can stake, and the more people that stake, the smaller the reward, so the result should end up being that more people join in until the expected reward is lowered to that of other widely-available investment opportunities.
  • ForHackernews 4y ago
    They've just re-invented interest.
  • Doxin 4y ago
    It creates a system where money makes money. It's hardly surprising if that leads to the richest people making the most money. The result won't be more people joining in until the expected reward is low enough, The result will be that a few rich people will join in with enough ETH to push the reward down. There's probably be a bunch of small-time investors doing it too, but again, more ETH in is more ETH out.
    • AgentME 4y ago
      If the reward is pushed down to be equal to the same reward that's available to anyone through widely available investment opportunities, then it doesn't seem like it's any more of an issue than how any other investment works.
    • viraptor 4y ago
      > It creates a system where money makes money. It preserves a system where money makes money. You need money to buy mining hardware and energy. If you had enough money you could start mining. Now if you have enough money, you can stake.
  • friendzis 4y ago
    > the more people that stake, the smaller the reward In PoW reward is proportional to normalized "work". Reward is proportional to normalized amount staked. This very directly leads to wealth concentration.
    • AgentME 4y ago
      In PoW, the "work" is just how much money the miner spends on mining hardware and electricity. Both PoW and PoS are cases where people with money invest that money and get a proportional reward. PoS just cuts out the hardware and electricity waste.
• WHATDOESIT 4y ago
  All the other people are free to buy the cheaper/more efficient solar panels for their own purposes. Why do you care that somebody uses them for Bitcoin? Do you also care that I shower with hot water a lot?
  • Jnr 4y ago
    Same as people were free to buy graphics cards for gaming in the last couple of years?
    • WHATDOESIT 4y ago
      Are you suggesting the high-end semiconductor shortage was caused by crypto? I don't think so. When you have Apple buying out the entire 5nm TSMC capacity for a year/more - in direct competition with NVidia, it's a hard proposition to make. And it's not like the GPU vendors were unhappy about the high prices and/or tried hard to get more production capacity. BTW you don't mine Bitcoin with GPUs, that's impossible for at least 5+ years now. Bitcoin is mined with ASICs that are using older production nodes (+-30nm and the like).
      • gruturo 4y ago
        The semiconductor shortage? No. The GPU shortage, and the insane prices also due to scalpers abusing the shortage? 100%. yes. Shall we pretend you replied in good faith to a post asking "Same as people were free to buy graphics cards for gaming in the last couple of years?", genuinely misunderstood the question, genuinely missing the "graphics card" and thought only of the general semiconductor shortage in your answer? 100% no. I call your bullshit.
        • WHATDOESIT 4y ago
          Well my point is, you make GPUs in the same factory where you make CPUs and networking chips. So first have a look at what happened there - e.g. a massive new client has appeared and booked out the entire capacity that usually Nvidia and AMD were getting. Are you saying this 100% surely had zero impact? And again, I was talking about Bitcoin, and you don't mine it with GPUs, and ASICs don't compete with GPU production capacity. So who replies in bad faith? I'm happy to believe the other commenter genuinely missed me talking about Bitcoin, so I mentioned it again. Then you come here with your attack...
• konschubert 4y ago
  “Money makes money” was equally true for PoW as well. You need money to set up a mining operation.
  • cburgdorf 4y ago
    Even more so because realistically you need to set it up somewhere where electricity is cheap which which is a centralizing force in itself. Also you need to have a really efficient mining rig for it to be profitable. With Ethereum PoS you can easily home stake on a Raspberry Pi which means it is much easier for regular people to participate.
  • Doxin 4y ago
    Oh yeah for sure. Not at all denying that. PoS is just more on-the-nose about it.
• lnxg33k1 4y ago
  To me in the current age also appears crazy to think that we need incentives for energy development, as without crypto PoW we have enough energy
• barnbuilder 4y ago
  There is no reason PoW-incentivized energy development would have to be only used for PoW. PoW means there can now be a buyer of last resort no matter when and where you are generating power. Newly developed renewable based electricity can be sold at "x" price when there is residential or commercial demand, and at "y" price (y < x) to a PoW miner otherwise. In this scenario there may not have been enough demand at price "x" to finance the renewable development, but the PoW buyer of last resort makes it feasible.
  • danw1979 4y ago
    The free market hasn’t been operating and never will operate with the restrained controls on energy usage that you outline though. Besides, there’s so many more useful things to do with that cheap renewable energy at times of low demand - synfuels, desalination, etc - that we should definitely see what else the free market can come up with given negative energy prices, rather than propping prices up by running pointless hash-computers for some speculative investment scam.
    • barnbuilder 4y ago
      It's one thing to have excess power, and another to have excess power in the time and place that you want to do these things. For example excess solar energy in the middle of the country is never going to be able to be deployed to desalinate water in the ocean because you will lose it all in transmission and storage (or you will spend more than you would just generating new power near the desalinization plant). This is what makes bitcoin mining so unique as a way to make use of excess energy. First of all, securing a censorship-resistant digital monetary system is not pointless nor a scam. Second of all, energy from anyplace on earth, at any time, can be deployed for this purpose -- all you need is a mining machine and an internet connection.
  • automatic6131 4y ago
    In fact, it is precisely the reverse of that: it's not a buyer of last resort, it's an energy price FLOOR. Any energy that you could sell to a customer, must be sold above "y". And so it is with computer hardware - any top or near top wafer capacity item you may want to buy must be above "Y" (what a crypto miner would pay for it). And this is why we saw massive price hikes for consumer computer tech in the last two years. And is this way - a price floor - and not the way you describe it, because of the economic incentives of miners. They have already paid for these captial intensive mining rigs, and to best turn a profit they must be running at all times. The marginal cost of mining is important, but given the capital costs (incl depreciation of hardware!) you cannot ignore it. Basically, your explaination is a failure of first order thinking. To a first order approximation, only the marignal cost of mining matters and thus the scenario you describe is true. However, you must include the second and nth order effects of capex to truly match reality.
• DonHopkins 4y ago
  Just like burning down houses incentivizes fire station development.
  • bitL 4y ago
    If you can buy a bunch of 3090s for mining, you likely can buy a 2000Wh power station with solar panels to feed them and pay $0 variable costs.
    • gambiting 4y ago
      I don't really follow - 3090s are below £1000 each, you hit 2000W power consumption with just 4 of them, so £4000 on GPUs. 2000W panels + battery is going to be at least £15-20k at current prices. Not sure why affording one would mean being able to afford the other.
      • bitL 4y ago
        2000Wh power station can be had for <$2k and 2000W solar panels for ~$2k. 3090s don't really consume 500W, more like 350W and that assumes regular voltages; in reality for mining it's much lower. 3080Ti would be even cheaper for about the same throughput.
        • gambiting 4y ago
          Yeah but you have the rest of the system to account for. And you need more than just what the system uses to charge the battery storage for overnight use - probably 4000W of panels if not 6kW. The batteries are the most expensive part of this(unless you only want to run the system for few hours during the day, but then what's the point?). You mentioned a 2000Wh power station, but I'm not sure how that helps? That will only store enough energy for an hour of running at most. So yeah, you're looking at about £15k for the whole power system alone.
    • viraptor 4y ago
      You already occasionally have to wait for solar panel deliveries. (depending on your location) By buying them for mining you effectively make others wait and not use them for moving off fosil fuels. Additionally, both solar panels and batteries still rely on mining actual limited materials, so every one used for crypto effectively means one less for useful purposes in a long run.