I can't believe we keep on sending tons of CO2 in the atmosphere just to find special numbers...
And do that for the environment!
We don't need to think solely of miners - crypto-mining is just one form of monetizing computing. If we could have something like a reverse Amazon Mechanical Turk, we could put computing resources available to receive and process packaged workloads cheaper than, say, an EC2 Spot Instance could, provided the client can cope with the added latency. As for incorrect answers, it could use some consensus where you send the payload to two independent parties and, if they don't match, you send it to additional parties until your consensus is ready.
As for your second paragraph, will it ever be cheaper to do a computation twice independently than once in a trusted party? I'm sure there are a few situations where that's the case, but I struggle to think of them.
Now that we care about energy efficiency and atmospheric pollution, hopefully more people will learn that efficient electric heating takes the form of a heat pump, where you end up with more heat energy in your space than just the electricity put into the device.
A miner cannot match the heating efficiency of a heat pump because it dissipates the negative-entropy into computation instead of pumping.
In any case, the miner fans are loud.
Or when you can't afford a retrofit of your system with a heat pump.
Or when you need to target dry a small room or a pair of wet shoes.
They have plenty of other uses, the only caveat I guess is that they aren't used as the main source of heat.
That's why I proposed encasing them in a heat transfer shell and keep the thing submerged in water. They could keep the water in the boiler at around 60 Celsius.
At what temperature would a heat pump be less efficient than an electric resistance?
Soil, at a depth of only around a few meters, rarely exceeds 10C, even in summer. That gives you a 45C differential for your boiler in the worst of worst cases with a ground heat exchanger, which is more than enough for best-case efficiency, year long.
This will be less expensive than a crypto in material cost very rapidly.
That I never doubted.
There is no such temperature, with a good enough design of heat pump. A good heat pump is always more efficient at heating than electrical resistance.
The improvment is a multiplication factor, which can be quite large; it's not just a few percent. The factor is why I'd describe mining - or resistive heating - as a very inefficient use of electricity for heating.
Since we are theorising about the merits of miners, we may as well use the theoretical limit for the alternative. Wikipedia explains: "If the low-temperature reservoir is at a temperature of 270 K (−3 °C) and the interior of the building is at 280 K (7 °C) [...] only 1 joule of work [...] 28 joules of heat are added to the building interior".
In other words, a heat pump can be 28 times more efficient than running a miner or other resistive electrical heater in those conditions. But that's a high number, a theoretical limit in conditions chosen to put heat pumps in their best light.
More realistic, based on real devices: "In Europe, the standard test conditions for ground source heat pump units use 35 °C (95 °F) [...] and 0 °C (32 °F) [...] the maximum theoretical COPs would be [...] 8.8. Test results of the best systems are around 4.5. When measuring installed units over a whole season and accounting for the energy needed to pump water through the piping systems, seasonal COP's for heating are around 3.5 or less. This indicates room for further improvement."
So 3.5-4.5 times more efficient than running a miner for heating in real conditions with current heat pumps, which can be improved. That translates directly to reduced atmospheric emissions from electricity generation.
The efficiency of the heat pump reduces when the outside temperature reduces, and reduces when the inside temperature increases. Conversely, if you are heating water, the time when the heat pump is most efficient is in the summer.
Cost is distinct from efficiency. The cost of a unit of energy as electricity is higher than the same unit of energy as gas, for example, so if you are comparing an electrical heat pump to gas heating, at a low enough outdoor temperature the gas heating is cheaper. This is why some places switch between heat pump and gas modes. The same argument does not apply when comparing with electrical heating like miners, or with an electrical water boiler.
That's a key point. If your power comes from renewables, this discussion is a lot less interesting. I'm all in for efficient use of energy (and I don't think crypto mining is a good use of it), but I also know a heat pump is a lot more complicated than an electric resistance (or a hot PCB board).
Not sure I get where are you going here. There is no mechanical output of the miners, only heat.
> A miner cannot match the heating efficiency of a heat pump
My hot water comes from the heat pump in the winter, when heating kicks in, but the boiler relies on an electric resistance in summer, when the house is mostly in equilibrium with the outside.
That's the situation where a heat pump is most efficient. I think you could reduce your hot water electricity cost by a factor of 3 by using heat-pumped hot water in the summer, instead of resistive heating. I guess the reason your system doesn't do that in summer is that it would require separate equipment.
With the assumption of outdoor temperature 30°C and water 60°C, the theoretical limit is a factor of about 10.
With so many people experiencing a cost-of-energy crisis at the moment in the UK, it's disappointing that these methods are rarely seen here. I've never seen a heat pump in a home in the UK.
I’m still undecided on the subject (whether crypto-currency is intrinsically bad to the environment or not.) Eg what if we regulate and only allows renewable energy to perform this. The basic argument is to intercept energy which would have been turned into heat anyway (solar, geothermal, etc.) and instead directly turned into heat, perform mining first then to heat.
For others who may misunderstand, they are talking about thermodynamics. Ie the amount of heat produced can be higher than the energy you put it, because it also get some from the environment. A random article found on the subject: https://courses.lumenlearning.com/physics/chapter/15-5-appli...
Political ones have failed, since with national currencies we end up with inflation and spending the resources of the future (i.e. debt).
The decision to "suspend temporarily the convertibility of the dollar into gold" has lasted indefinitely. This means the government can print its own money with no accountability, until it acquires everything and everyone.
Have you looked into proof of stake? It is a pretty good contender, but is vulnerable to Sybil attacks in case of a network partition. With no objective way to tell legitimacy (like "work" that was wasted in proof-of-work), a network partition can not be resolved.
Inflation, nor deflation are bad. Too much of any is. The common consensus is that the scales, on average, should lean a little towards inflation. But only a little. And not always.
I think the common consensus is that any deflation is too much. What's contentious is just how much inflation is acceptable and how much is counterproductive to economic growth.
This depends on how broad you define it. We've seen deflation for the past decade now. In the sense that the buying power of your savings on a traditional savings account have shrunk, while official inflation was below zero at points. We've now bounced back to "high" inflation.
None of this is bad, as we can see clearly by how well tech has benefitted from this (cheap loans, beneficial DCF). This is even policy.
This led to a lot of economic problems with zombie businesses that were able to continue to trade only due to cheap loans and continued asset price growth sans proportionate economic growth. Any this was before we saw any significant periods of real deflation.
I suppose that's why it has grown in price in spite of its supply slowly increasing. Because it's unusable! (sarcasm)
> "problem" being solved
In essence, it takes scarcity to make scarcity. So, to get digital scarcity, you have to fork over scarce resources.
But I agree with you that the computing cost is excessive, and the reward function was not well calibrated.
On the other hand, the rate of the explosion in price could not have been foreseen.
The fact that the price is consistently increasing is what makes it an unusable currency. A deflationary currency is a useless medium of exchange as any rational actor will not spend it due to the potential future increase in price. I hold multiple crypto assets but I think you have to be kidding yourself if you think that Bitcoin and the like are usable currencies.
I am looking to buy a flat, so I will spend some of my Bitcoin.
just slightly worse (because its brand new and you keep speaking against it instead of improving it, for some reason)
and also with better security, and portability.
Rhetorical, almost flabbergasted questions for you to consider:
What problems does "money I can store on a Ti-83" solve?!
What problems does the Ethereum Virtual Machine solve, as far as turning decentralized network code into a server/computer?
What security?
> What problems does the Ethereum Virtual Machine solve, as far as turning decentralized network code into a server/computer?
Given that the eth VM uses a fraction of a single percentage of its processing power to run smart contracts (like, 0.00000001%), and the rest in redundantly verifying those transactions, it's not solving any problem of decentralised processing in a useful way.
Followed by the single most prosperous period in Human history.
> This means the government can print its own money with no accountability, until it acquires everything and everyone.
Ah yes, which is why Venezuela and Zimbabwe rule the world.
Would love for you to point me in the direction of the supporting evidence.
Millions were lifted out of poverty in the 19th century, whereas billions have been lifted out in the 20th and 21st centuries on the back of enormous credit expansion.
I'm not arguing the fiat currency and credit cannot be incredibly dangerous...they can be. But it's absurd to think that money supply should be fixed to the arbitrary quantity of a random element that we can dig out of the ground.
"Absurd" is the new normal in post-modern society.
Weimar Germany pretty much defined what it means to be "post-modern," and they printed themselves into extinction (admittedly, that's not the whole story).
There is scholarly work arguing for this. George Selgin comes to mind as someone who I believe has written about this. There's probably also scholarly work arguing the other side. I can't take the time to dig this up for you right now.
> But it's absurd to think that money supply should be fixed to the arbitrary quantity of a random element that we can dig out of the ground.
It certainly isn't absurd. There are lots of people who think this is a good idea, with good reason. Plus, it is historically precedented, and for good reason.
In what sense has the current monetary system failed in your opinion? The gold standard certainly failed, that's why it was abandoned by every single country in the world, but the current monetary system seems to be doing just fine.
To be able to save for retirement, you have to assume a lot of risk (stocks) or accept a negative real (inflation-adjusted) return (bonds). This is because inflation acts as a tax on top of income tax and social security etc.
The gold standard failed and inflation is higher because governments like to spend more than they earned. This is unsustainable - any asset holding its value will be preferable to funding a government that is constantly losing money (i.e. bonds).
And what I get in return should not be exponentially robbed by tyrants to pay for bread and circus.
PoS is like fusion power in that it will be here soon but unlike fusion power those working PoS don't actually want it to be used it seems to me.
One of the important distinctions between Austrians and Keynsians is that the latter have noticed that money isn't a resource. It's a claim on resources.
The resources of the future that we are spending are the real resources: fuel, clean water, energy, crops, minerals, human effort, the natural environment, and the biosphere services themselves.
You can print money, but you can't print oil. If you print money faster than you exploit real resources, then yes you get inflation. However, the converse is not true. The ultimate demand of anti-inflationists is that your salary remain $X - forever, the cost of a car remains $Y - forever, and the cost of a loaf of bread remains $Z - forever. You can't achieve price stability with technological hacks.
The reason why bitcoinism is so offensive to many people is the way it takes real resources - in this case silicon wafers - and turns them into nothing but money. It's a prayer wheel to Mammon, like Arthur C Clarke's Nine Billion Names Of God.
Have you read Mises? Because based on this facepalm comment I can only assume you haven't, and that your "knowledge" of Austrian economics is derived from Paul Krugman screeds.
> The ultimate demand of anti-inflationists is that your salary remain $X - forever, the cost of a car remains $Y - forever, and the cost of a loaf of bread remains $Z - forever.
I don't want prices to stay still; that is unrealistic (and inadvisable) in a dynamic, adaptable system.
I want prices to trend downwards more than salaries. I know this is possible because it happens to computer hardware, adjusting for performance. Why does it not happen to, say, bread? fuel?
Is it not because central banks are targeting inflation? And because currency created by central banks go to private banks and the government first and not wages at large?
I would appreciate a book answering these questions.
> Is it not because central banks are targeting inflation? And because currency created by central banks go to private banks and the government first and not wages at large?
These are good questions to ask! And the answers are kind of littered around orthodox macro. As well as the real economy. Computer hardware benefits from (astonishingly huge) productivity improvements. Bread does as well, but to a much lesser extent. Fuel, now that goes all over the place, but the increasing capital cost of extracting it as the easier oil has already been extracted plays a part. As does cartelization - OPEC were largely responsible for kicking off US inflation in the 1970s by restricting supply. That's the point at which wages and profits start to diverge on that graph that everyone always circulates.
> I want prices to trend downwards more than salaries.
There have been a lot of policies aimed at keeping wages from rising; both the maintenance of a minimum level of unemployment ("NAIRU" https://www.investopedia.com/terms/n/non-accelerating-rate-u...) and the attack on unions and collective bargaining as means of increasing wages. It's policy to make sure there's always somebody ready to underbid you.
I never touched crypto so I am I wrong that it's value is even more unpredictable then putting money in the bank? Like I can buy something now and tomorrow some news about a hack or some internet drama and I just lost everything. As a dude that is not into economy theory my conclusion is that crypto would have negligible value if it wasn't used to speculate it will grow or used in illegal stuff, I won't be surprised if behind all of it is a group of obscenely rich and greedy individuals
Bitcoin is like owning some cool trading cards, they are valuable now, they might be more valuable tomorrow and some internet drama about the show/authors will make it's value negative day after tomorrow.
Yes!!!! It's called central banks and monetary policies. Seriously. We need to get back our democratic control over it, and make it work for us again. We have to stop wanting to fix our societal issues with technology: we can't fix our money with crypto-currency any more than we can't fix mass surveillance with encryption.
If anything, crypto currencies are a concentration of what is worse with our existing financial system: even less democratic control, no regulations and therefore all sorts of scams, and we can't tune it to make our economy work.
In a world ruled by crypto, our governments would have the perfect alibi for failing: it's not their fault, their hands are tied, they can't get the money for the projects that are needed. This has happened plenty of times in the past when we were using gold and such. And that's just the credit crunch problem, there are many more.
Dora the Explorer broadcasts?,
or are you referring to some other waste (y'know, to someone) of electricity/CO²?
OTOH, we may be able to use it to heat Mars into a tropical paradise.
The critique is actually spot on, because when you peel back the non sequiturs about efficiency the underlying criticism is that Bitcoin itself is pointless. Maybe so, maybe not. But that's a different argument.
because this shit isn't going back in the box.
Governments are piling in, nobody meaningful is going to ban it, because they cannot.
https://www.newsweek.com/bitcoin-mining-americas-most-misund...
https://www.coindesk.com/business/2021/03/05/the-frustrating...