Comment by marcelogranja | Hacker News Reader

Comment by marcelogranja | Hacker News Reader

I disagree, although the ecosystem is filled with scams, and evangelists have financial interests in promoting their believes, there are some promising advantages.

Also the energy requirements for PoW systems are cheap compared to its gains as pointed out by Nick Szabo: "We need more socially scalable ways to securely count nodes, or to put it another way to with as much robustness against corruption as possible, assess contributions to securing the integrity of a blockchain. That is what proof-of-work and broadcast-replication are about: greatly sacrificing computational scalability in order to improve social scalability. That is Satoshi’s brilliant tradeoff. It is brilliant because humans are far more expensive than computers and that gap widens further each year. And it is brilliant because it allows one to seamlessly and securely work across human trust boundaries (e.g. national borders), in contrast to “call-the-cop” architectures like PayPal and Visa that continually depend on expensive, error-prone, and sometimes corruptible bureaucracies to function with a reasonable amount of integrity."

If electricity and environment-pollution would not cost anything this would be maybe true and since mining is done mostly in large pools and the blockchain is already quite big (regarding having the whole bc on disk) the social scalability is not really there. And the computing power you need does not really sink because of the adaption of the network so that the hash-rate is kinda stable, so it does not get cheaper.

What makes me really wonder is this talk of corruption robustness when the blockchain world is basically a wild west without laws and regulation where the only reason to behave is financial incentives which obviously brings in more scams than anything else. This would maybe work if it would not be even better to slightly misbehave, you don't need to make a 51% attack, controlling 25% of the mining power already gives you an edge to steer the whole network. [0]

You don't trust Paypal and Visa where laws apply but you trust enormous Mining-Pools in China that were already caught forming carthels?

[0](https://bitcoinmagazine.com/articles/selfish-mining-a-25-att...)

Not only is mining centralized, but the big holders are fairly centralized.

How robust is this thing really if the authoritarian government the pools run in decides to shut it down? Value would go way down and the network would be in a very weird unsecured state. It's entirely possible the network is at the whims of some bureaucrat deciding that should happen, which is one of the weird things about cryptos.

>It allows one to seamlessly and securely work across human trust boundaries

That's not really true though. The "trust boundaries" still exist when you try to convert your tokens into spendable money. Also, blockchain enthusiasts seem to forget that blockchain tokens are built on an intricate house-of-cards that can easily collapse under disaster circumstances. There is an implied trust that is always taken for granted that the government will continue to maintain internet infrastructure and allow citizens the free-use thereof. How far will bitcoin take you as a resident of puerto-rico? It is also trivial for any government to prohibit or disrupt the use of blockchain tokens (either through the legal system or through draconian internet restrictions). At the end of the day you are trusting that the federated financial systems of the world tolerate blockchain tokens.

Maybe that's the idea of crypto: that such powers don't belong into the hands of bureaucrats? Btw: everything can collapse under disaster circumstances. Why creating a startup if government can forbid startups tomorrow?

> that such powers don't belong into the hands of bureaucrats

Blockchain tokens don't solve this problem; the power is defacto in their hands and you'll either need their consent or continued ignorance to participate in the wider economy using tokens.

Yeah but... the crypto algorithm chosen for Bitcoin is about as energy intensive as they come. Other algorithms which are more equipment intensive - scrypt etc - provide the same benefits but without the same disgusting externality of power consumption.

I wish I grasped proof of stake better. I’m not yet convinced it can be made to work as well as PoW.

It seems like nobody really knows, yet. But Ethereum is about to run a $100bn experiment to find out :)

Market cap is very different from the actual money invested in the ecosystem. I don't know the exact number, but I bet it's a lot lower than $100bn.

Stupid example: I create 100bn coins. Then I sell one to myself for $1. Am I now running a $100bn experiment?

You don't need to explain the idea of paper wealth to me :)

Yes, marketcap is flawed, and examples like yours do actually pop up because of the usage of this metric, but are quickly smacked down if they're traded on markets with any liquidity. Ethereum isn't in that category. We can do a Wall St. pissing contest about what consitutes "real liquidity" but I'll stick to that statement for Bitcoin and Ethereum at the least.

It's just a matter of perspective: let's say you're invested in Google. You put in $1000 and now it's worth $100,000 on paper. Google announces they are closing their data centers and pivoting to cat food delivery: are they risking $1000 of your money, or $100k?

The investment in energy-intensive GPUs will also serve as a disincentive for any change to Bitcoin that does not require energy-intensive GPUs, which will lock us into this paradigm until something drastic happens.

EDIT: I stand corrected as to the terminology, but if you replace [GPUs] with [POW hardware], the disincentive will remain.

No one has seriously mined Bitcoin using GPUs since like 2013. By 2014, everyone was using FPGAs or ASICs. Now, only ASICs are used.

I thought there was a change to the protocol that prevented ASICs from being as effective?

Perhaps I misunderstood in the context of Bitcoin, but in the context of the investment in GPUs providing support to pricing, I think that is validated just from the news a few days ago that GPU pricing because of crypto demand was causing pricing issues in PC-gaming. And the same principle should apply to whatever "effort-based" mining technology is in use; any significant investment in hardware will be a disincentive to allowing improvements in the efficiency of said hardware.

A lot of altcoins have come up that are ASIC-resistant. A lot of these use memory as a bound, but GPUs sill have the memory bandwidth to make mining fast.

I must have mixed up some notes about ASIC-resistant altcoins with some older info about Bitcoin, its quite difficult to keep track.

Bitcoin is still using (and probably will always use) SHA-256 as the proof of work problem, which ASICs are great for since it takes negligible memory.

XMR/ETH use GPU

Maybe the more energy we consume, the more motivated we'll be to move to more efficient methods. And the available fossil fuels are projected to run out at some point, aren't they? So if we're going to use them all anyway before switching fully to 100% renewable/alternative sources, then using it up faster doesn't result in more total emissions, just more now and less later. After that, we'll be "wasting" hydro and nuclear etc., which doesn't really matter.

If I take all the pollution or greenhouses gases that we would dump in a 100 year period and dump them all today, it's possible that the impact from that would be unrecoverable.

Total emissions isn't the only important measurement.

Right, and that's why Bitcoin has lost a huge amount of marketshare in the crypto space over the past couple months[1].

1. https://coinmarketcap.com/charts/#dominance-percentage

I wouldn't suggest this as an explanation at all. Another, equally-plausible explanation, is that retail investors are looking for the next BTC before its price pops.

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