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Comment by dbmikus | Hacker News Reader

I really agree that it's good to go in with a level head. If you highlight the extremes of either "believers" or "non-believers", both sides seem like low effort takes.

I bucketed crypto projects into two categories: (1) things that are only possible on crypto networks, and (2) things that people aren't motivated to do on other networks. For example, the US is woefully missing a banking API, especially for consumers. DeFi takes a stab at this. DeFi is still mostly closed circuit and too expensive, but if it continues to grow and integrate with non-crypto financials, that's a strong basis for a banking API.

The blockchain ecosystem has also fueled a lot of work into zero knowledge proofs and its components like homomorphic encryption, which has uses outside of blockchain. So even if the grand experiment fails (strongly doubt the whole thing fails) there will be a lot of cool technical progress that has been made alongside it.

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Any technological progress obtained from cryptocurrency research will be the most expensive progress ever purchased in human history.

The costs come from:

- Opportunity cost of having lots of smart people focusing on cryptocurrency who could have been researching medicine, clean energy, or space tech.

- Money spent on manufacturing and maintaining the cryptocurrency mining equipment. Those factories could be making other products that directly benefit peoples' lives. We currently have a shortage of electronics because of the pandemic. Cryptocurrency mining makes that shortage worse.

- Environmental pollution produced by the power plants used for cryptocurrency mining. For every $1 a miner spends on electricity, the rest of society will pay $N to remove the CO2 later. Also, emissions from coal power plants often poison people and soil nearby.

- Increased environmental destruction caused by digging up energy and building and running more power plants.

The ultimate benefit will not be worth the cost. How could it?

Many people in the world don't have access to a functioning financial system- what's the benefit in building one?

Private companies already build functioning financial systems cheaply. Many companies in developing countries have deployed electronic payments that work on cheap feature phones via SMS and WAP. They have massive adoption by the unbanked. None of these systems use cryptocurrency.

https://en.wikipedia.org/wiki/M-Pesa

https://en.wikipedia.org/wiki/Mobile_banking#Mobile_banking_...

Reductio ad absurdum, many people don't have access to computers, so what's the benefit of computers?

> Opportunity cost of having lots of smart people focusing on cryptocurrency who could have been researching medicine, clean energy, or space tech

It's doubtful many of those smart and obsessed enough to contribute to medicine, clean or space tech would be moved. What we would have seen is the same smart decentralized consensus obsessed people still working on formal proof systems, distributed consensus algorithms robust to adversaries, precursors to the vile offspring and post-capitalist or post-communist economies.

It's interesting that a lot of people lodge similar claims as you have, against crewed space missions even though you count it as having value.

> Those factories could be making other products that directly benefit peoples' lives.

Things were like this before cryptocurrencies and what you say is already possible despite cryptocurrencies but still does not happen. You might be interested in [Dives, Lazarus, and Alice](http://bactra.org/weblog/841.html).

> We currently have a shortage of electronics because of the pandemic.

Robustness sacrificed at the alter of efficiency means extra vulnerable to shocks and surprises.

> Coal Powerplants

Countries with or without PoW mining presence are still building coal fired and other CO2 generating powerplants. The world has not been smart about moving to clean tech fast enough.

It's an interesting question, but in my personal view trying to weigh the total moral value proposition of new technology is so incredibly difficult. If one could do it well, you could predict the future.

As an interesting hyperbolic comparison, is our understanding of nuclear fission and fusion worth it because two cities in Japan were bombed and thousands died? IDK

Edit: and this isn't to say we shouldn't be critical of Blockchain technology. I think the criticism of proof of work is important, and I'm glad that most chains are proof of stake or transitioning. Would we have made proof of stake if we first didn't validate the idea with a simpler proof of work implementation? Maybe. Maybe not.

thats just not the case.

firstly you objection to opportuity cost is flat wrong. those many smart people as you refer to them aren't going to just jump inot what ever the best for mankind research is because you want them to. Researchers and scienetist aren't a fungible resource, someone with a master ins mathmatics and a focus on cryptography isn't going to join a clean energy start up join a biotech firm or work on space tech. If crypto currency didn't exist they would probably work on other cryptography related fields.

the chip shortage has little to do with this as large scale mines use dedicated bespoke 'application-specific integrated circuit' or ASIC chips not used for anything else. try to run a mineing rig on CPU, and GPUs just isn't cost effective anymore. Secondly they didn't cause the chip shortage, shortsighted manufactures ending their orders both the immediate term and for years in advance that did. The chip foundries did the only logical thing and resold the slots for those canceled orders to keep the fabs running.

as for the enviromental impact crypto, cryto thrives on low cost energy as it gives the miners a higher coin/dollar spent mining. and currently building new solar and wind is cheaper than building coal. so really what we need to do is stop burning coal.

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