4 ms·

What do you think all those VISA, MasterCard, Discover, and AmEX servers, not to mention all the banks, are doing?

AYBABTME 14y ago
They're not computing numbers for the sake of computing numbers. Imagine a future where Bitcoin dominates the markets. Then you'll have this whole planet dedicated to the computation of hashes for no other sake than computing hashes. Picture yourself an alien civilization, coming to meet us and seeing we spend most of the energy we produce computing numbers and giving them an arbitrary value. While I think there's a lot of arbitrary stuff going on in the financial world, it's still less arbitrary than computing numbers for the sake of computing numbers.
- richcollins 14y ago
  It doesn't just do it for the sake of "computing numbers": https://bitcointalk.org/index.php?topic=99631.0 https://bitcointalk.org/index.php?topic=99631.0
- incompatible 14y ago
  I agree with you. The idea of "mining" these numbers using an ever-increasing amount of computing power is simply absurd. They'd have done better to allocate the coins in some other way .. I don't know how, maybe distributed equally among Hacker News readers? That would be as good as anything, to get the system started.
  - brazzy 14y ago
    You misunderstand the purpose of mining (which is really a misnomer). It is necessary to do a distributed, hard-to-manipulate verification of transactions. Creating new bitcoins is just tied to it as an incentive. "Mining" will continue after there are no more new bitcoins. The incentive will change to transaction fees.
- drcross 14y ago
  Still, I think it's more moral than sending children into the earth to mine gold.
- baddox 14y ago
  The bitcoin network isn't just computing numbers for the sake of computing numbers. Proof-of-work is integral to the "decentralized network of trust" that is bitcoin. Also, even if bitcoin became the dominant global currency, I highly doubt that it would take up a noticeable portion of the world's computing resources.
  - mseebach 14y ago
    > "decentralized network of trust" That's the really interesting bit about Bitcoin - it's an attempt to create a system that will enable trust in Internet-scale groups. Currency is obviously a prime candidate for "trust", but I also think Namecoin is tremendously interesting. Next up, PKI certs? Eliminating hard-to-scale single points of trust (whether the DNS roots, VeriSign or governments) is hardly "doing nothing".
    - baddox 14y ago
      See also https://en.bitcoin.it/wiki/Smart_Property https://en.bitcoin.it/wiki/Smart_Property.
      - mseebach 14y ago
        I like it, very clever. But doesn't the block chain get unfeasibly large at some point, especially if it gets "overloaded" will all kinds of things?
        baddox 14y ago
        I haven't taken the time to fully understand it, but I gather that there are proposed ways to trim the block chain's history. For clients that don't need a long history, I imagine they could just download a snapshot for, say, Jan. 1, 2013, that simply listed all the bitcoins and their owners at the time, rather than all the transactions that happened before that point.
- iso8859-1 14y ago
  Thankfully, Bitcoin's number crunching will stop in 2021. HFT can continue indefinitely...
  - jimktrains2 14y ago
    Bitcoin will always number crunch. Transactions are processed in blocks, even if there is no or minimal reward for solving the block. Income can be gained from transaction fees.

They're not computing numbers for the sake of computing numbers. Imagine a future where Bitcoin dominates the markets. Then you'll have this whole planet dedicated to the computation of hashes for no other sake than computing hashes. Picture yourself an alien civilization, coming to meet us and seeing we spend most of the energy we produce computing numbers and giving them an arbitrary value. While I think there's a lot of arbitrary stuff going on in the financial world, it's still less arbitrary than computing numbers for the sake of computing numbers.

richcollins 14y ago
It doesn't just do it for the sake of "computing numbers": https://bitcointalk.org/index.php?topic=99631.0 https://bitcointalk.org/index.php?topic=99631.0
incompatible 14y ago
I agree with you. The idea of "mining" these numbers using an ever-increasing amount of computing power is simply absurd. They'd have done better to allocate the coins in some other way .. I don't know how, maybe distributed equally among Hacker News readers? That would be as good as anything, to get the system started.
- brazzy 14y ago
  You misunderstand the purpose of mining (which is really a misnomer). It is necessary to do a distributed, hard-to-manipulate verification of transactions. Creating new bitcoins is just tied to it as an incentive. "Mining" will continue after there are no more new bitcoins. The incentive will change to transaction fees.
drcross 14y ago
Still, I think it's more moral than sending children into the earth to mine gold.
baddox 14y ago
The bitcoin network isn't just computing numbers for the sake of computing numbers. Proof-of-work is integral to the "decentralized network of trust" that is bitcoin. Also, even if bitcoin became the dominant global currency, I highly doubt that it would take up a noticeable portion of the world's computing resources.
- mseebach 14y ago
  > "decentralized network of trust" That's the really interesting bit about Bitcoin - it's an attempt to create a system that will enable trust in Internet-scale groups. Currency is obviously a prime candidate for "trust", but I also think Namecoin is tremendously interesting. Next up, PKI certs? Eliminating hard-to-scale single points of trust (whether the DNS roots, VeriSign or governments) is hardly "doing nothing".
  - baddox 14y ago
    See also https://en.bitcoin.it/wiki/Smart_Property https://en.bitcoin.it/wiki/Smart_Property.
    - mseebach 14y ago
      I like it, very clever. But doesn't the block chain get unfeasibly large at some point, especially if it gets "overloaded" will all kinds of things?
      - baddox 14y ago
        I haven't taken the time to fully understand it, but I gather that there are proposed ways to trim the block chain's history. For clients that don't need a long history, I imagine they could just download a snapshot for, say, Jan. 1, 2013, that simply listed all the bitcoins and their owners at the time, rather than all the transactions that happened before that point.
iso8859-1 14y ago
Thankfully, Bitcoin's number crunching will stop in 2021. HFT can continue indefinitely...
- jimktrains2 14y ago
  Bitcoin will always number crunch. Transactions are processed in blocks, even if there is no or minimal reward for solving the block. Income can be gained from transaction fees.