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The same could be asked of most any form of currency and of many different ways of generating wealth and value (and I'm sure many of them generate orders of mag

The same could be asked of most any form of currency and of many different ways of generating wealth and value (and I'm sure many of them generate orders of magnitudes worse pollution). Take, for example, reddit karma - people pay to power their computers and purchase hardware/software to create memes and original content that will reap positive karma. What notion or idea will be "valuable" to the reddit hive mind next is anyone's guess, so your best bet is to keep plugging away at it and generating as much original content as possible. While there's no direct translation of earned karma to a national currency (yet), it can carry a social/fame value. These people paying their internet, hardware, software, and electricity bills provide a basis for an exchange rate of <national currency> to <reddit karma>. The only differences between this and bitcoin are that people can give bitcoin to one another and that there are bitcoin to <national currency> exchanges. I stretched the analogy a bit thin with reddit karma, but I'm sure people can think of other similar electricity->money "pure technology" wealth/value generation methods (high frequency trading hardware/software, for instance).

ck2 14y ago
What you say is true but bitcoin is specifically designed to require massive amounts of computing power, which specifically equates to massive electric power consumption. In other words its purposely designed to be excessively taxing on resources. The other activities you mention have resource consumption as a side effect and not necessarily exhaustive.
- weavejester 14y ago
  A lot of electricity is used on other forms of security as well, such as SSL or password encryption. Although SSL uses up less resources, it is used by far more servers, which I suspect would exceed the amount of processing power of the Bitcoin network.
  - ck2 14y ago
    SSL is just a few extra cycles of cpu time if done in hardware (aesni). Bitcoin is full tilt, non-stop, multi-core processing, continuously.
    - weavejester 14y ago
      Individually SSL takes less CPU time, but in aggregate there is an awful lot of SSL traffic in comparison to Bitcoin. I suspect that overall the cumulative amount of CPU time spent on more conventional cryptographic security far exceeds the CPU time spent on Bitcoin's blockchain.
betterunix 14y ago
The difference is that Bitcoin creates strong incentives for people to burn through electricity. Worse still, for Bitcoin to be secure it has to be the case that no attacker can control more than half the total computing power of the entire Bitcoin network, which means that the network can only be secure if people keep devoting more and more computer power to it; doubling the attacker's work means doubling everyone's work. Compare that to Chaum's digital cash systems -- where tokens were issued at low computational cost by a bank, transactions were peer to peer and did not require connecting to a global network of any kind, and where the attacker's work was exponential while the users work was polynomial in an arbitrarily-scalable security parameter. Bitcoin is exceptionally wasteful of computing resources; if it were a mainstream currency, we would eventually have to commit half the world's total computing power to it just to keep it secure.
- DennisP 14y ago
  If the cost of electricity is more than the value of the awarded coins, miners will drop off because they're losing money, and the difficulty will decrease. Therefore the total electricity usage per ten minutes cannot sustainably be worth more than the value of the new coins generated in that ten minutes. Meanwhile the number of coins awarded each time is cut in half every four years. If, in 20 years, bitcoins are worth 32 times as much as they are right now, the total electricity usage will be the same as it is now. The amount of electricity used is surprisingly low; for details see my comment above. Edit: with further thought, I wonder whether this is a long-term security flaw. Previously I calculated that if bitcoin were to reach the market cap of the dollar in 20 years, it would consume a gigawatt of power. An attacker with a nuclear reactor could conceivably control a blockchain with over a trillion dollars of market value. Transaction fees would make it more expensive (by increasing the power usage sustainable by honest miners) but the hope is to keep fees fairly low. However, a 51% attack still doesn't allow the attacker to steal all the money, only to double spend. So the attack may not be worthwhile, unless you already have very large bitcoin holdings...in which case, you may be more interested in maintaining the soundness of the currency.
  - deleted 14y ago
    [deleted]

ck2 14y ago

What you say is true but bitcoin is specifically designed to require massive amounts of computing power, which specifically equates to massive electric power consumption. In other words its purposely designed to be excessively taxing on resources. The other activities you mention have resource consumption as a side effect and not necessarily exhaustive.

weavejester 14y ago
A lot of electricity is used on other forms of security as well, such as SSL or password encryption. Although SSL uses up less resources, it is used by far more servers, which I suspect would exceed the amount of processing power of the Bitcoin network.
- ck2 14y ago
  SSL is just a few extra cycles of cpu time if done in hardware (aesni). Bitcoin is full tilt, non-stop, multi-core processing, continuously.
  - weavejester 14y ago
    Individually SSL takes less CPU time, but in aggregate there is an awful lot of SSL traffic in comparison to Bitcoin. I suspect that overall the cumulative amount of CPU time spent on more conventional cryptographic security far exceeds the CPU time spent on Bitcoin's blockchain.

betterunix 14y ago

The difference is that Bitcoin creates strong incentives for people to burn through electricity. Worse still, for Bitcoin to be secure it has to be the case that no attacker can control more than half the total computing power of the entire Bitcoin network, which means that the network can only be secure if people keep devoting more and more computer power to it; doubling the attacker's work means doubling everyone's work. Compare that to Chaum's digital cash systems -- where tokens were issued at low computational cost by a bank, transactions were peer to peer and did not require connecting to a global network of any kind, and where the attacker's work was exponential while the users work was polynomial in an arbitrarily-scalable security parameter. Bitcoin is exceptionally wasteful of computing resources; if it were a mainstream currency, we would eventually have to commit half the world's total computing power to it just to keep it secure.

DennisP 14y ago
If the cost of electricity is more than the value of the awarded coins, miners will drop off because they're losing money, and the difficulty will decrease. Therefore the total electricity usage per ten minutes cannot sustainably be worth more than the value of the new coins generated in that ten minutes. Meanwhile the number of coins awarded each time is cut in half every four years. If, in 20 years, bitcoins are worth 32 times as much as they are right now, the total electricity usage will be the same as it is now. The amount of electricity used is surprisingly low; for details see my comment above. Edit: with further thought, I wonder whether this is a long-term security flaw. Previously I calculated that if bitcoin were to reach the market cap of the dollar in 20 years, it would consume a gigawatt of power. An attacker with a nuclear reactor could conceivably control a blockchain with over a trillion dollars of market value. Transaction fees would make it more expensive (by increasing the power usage sustainable by honest miners) but the hope is to keep fees fairly low. However, a 51% attack still doesn't allow the attacker to steal all the money, only to double spend. So the attack may not be worthwhile, unless you already have very large bitcoin holdings...in which case, you may be more interested in maintaining the soundness of the currency.
- deleted 14y ago
  [deleted]