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China wants an orderly exit from Bitcoin mining

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Re: China wants an orderly exit from Bitcoin mining

#41

Post by astrodust »

olalonde wrote: post #14
tbabb wrote: post #6

Earlier quoted context omitted.

Agreed. Shutting down participation in the planet's largest pyramid scheme doesn't have a lot of downside.

Here is what a pyramid scheme is: https://en.wikipedia.org/wiki/Pyramid_scheme Bitcoin is a distributed database that solves the "Two Generals Problem". Please don't spread misinformation on things you do not understand.

Since it requires everyone to be connected all the time for anything to get done, that's hardly a complete solution. At best it's a hack that partially solves the problem under some very specific circumstances, like having a robust network that allows the nodes to communicate and achieve consensus for each new block on the chain.

If part of the network gets cut off from the rest they can't participate, they're instead left with an orphan blockchain that will eventually have to be reconciled, and all their changes will get rolled back. Far from ideal.

BitTorrent, by way of example, is resilient even in situations where the network has been split or damaged. If you can connect to a single seed you're good. If you lose that seed, but you can find another, you're still good, you can pick up where your transfer left off. There's no single point of failure: There's multiple trackers, multiple seeds, multiple everything and if any part of this fails, the whole thing can muddle along in a degraded but still functional state.

Please don't comment on things you don't understand.

Re: China wants an orderly exit from Bitcoin mining

#42

Post by astrodust »

olalonde wrote: post #35
bandrami wrote: post #28

Earlier quoted context omitted.

Sigh. The only sense in which it "solves" the Two Generals Problem is the sense in which it will, over the course of decades, create a rainbow table for it. None of the work being done is in any way socially useful (a crypto coin based on, say, folding proteins actually produces a social good and so could be equity based). Decentralized proof of a transaction having occurred is in principle valuable, but the token it…

> Sigh. The only sense in which it "solves" the Two Generals Problem is the sense in which it will, over the course of decades, create a rainbow table for it. None of the work being done is in any way socially useful (a crypto coin based on, say, folding proteins actually produces a social good and so could be equity based). That is by design. Doing useful work would hurt the network's security. > Decentralized proof…

> Doing useful work would hurt the network's security.

Yeah, no. Any "proof of work" system that meets simple criteria is acceptable: Hard to solve, easy to verify. Hashes are just the easiest to implement, but they're not the only one that could work here.

Factoring RSA keys of different lengths would also fit the bill. If the "difficulty" could be arbitrarily adjusted it'd be no different from SHA2 in terms of effort required.

Re: China wants an orderly exit from Bitcoin mining

#43

Post by astrodust »

bamboozled wrote: post #32
TazeTSchnitzel wrote: post #2

I am personally of the opinion that China swiftly killing off its cryptocurrency mining industry overnight would be to the great benefit of humanity. The sheer amount of electricity it wastes is an environmental disaster.

I don't get winging about mining crypto currency and "wasting power", it's not really a waste, it's proof of work. Besides, we humans waste energy on way worse things than mining Bitcoin. What about running Facebook, the tens of thousands of high end servers running globally just to figure out what useless junk to feed people, in a way that is detrimental to their health. I don't hear many people complaining about th…

Facebook buys servers to meet their needs, not to grind away on useless "proof of work" systems.

They're also interested in aggressively optimizing how that capacity is used, and where possible work to reduce power consumption, compute requirements, and other such things. They can alter how their software interfaces with their systems, how many requests it makes, what kind of data they return and how often.

Facebook can also power down systems that aren't needed at their current load.

Bitcoin is the opposite: The more work you put in, the more you stand to benefit. You must run your systems flat out, all the time, no breaks. Apart from more efficient mining hardware, there's no way to optimize how it mines, it's 100% utilization all the time.

Re: China wants an orderly exit from Bitcoin mining

#44

Post by Nursie »

bamboozled wrote: post #39
mehrdadn wrote: post #33

Earlier quoted context omitted.

> it's not really a waste, it's proof of work Every kind of waste I can think of is a proof of some kind of work. That doesn't make it a good thing.

The value provide by these systems is trust, which literally requires proof of work to establish. Facebook news feeds don't require proof of work in the same sense.

That's not a requirement for trust. It's a requirement for this particular kind of decentralised trust.

Re: China wants an orderly exit from Bitcoin mining

#45

Post by mehrdadn »

bamboozled wrote: post #39
mehrdadn wrote: post #33

Earlier quoted context omitted.

> it's not really a waste, it's proof of work Every kind of waste I can think of is a proof of some kind of work. That doesn't make it a good thing.

The value provide by these systems is trust, which literally requires proof of work to establish. Facebook news feeds don't require proof of work in the same sense.

> The value provide by these systems is trust, which literally requires proof of work to establish.

This is going to go on a tangent but I do not see why proof of work has anything to do with trust. Does your trust in me increase somehow if I give you a string whose hash ends in twenty zeros? i.e. if I subsequently told you I had found a number whose hash ended in thirty zeros but didn't give you the number, would you somehow trust me more than someone else who hadn't shown you proof of work for twenty zeros? Not really.

If anything, proof of work is not producing trust, but eliminating it (and the need for it).

Re: China wants an orderly exit from Bitcoin mining

#46

Post by Synaesthesia »

baddox wrote: post #24
isoprophlex wrote: post #11

Earlier quoted context omitted.

Can't agree more. Also I am getting pretty sick of the impact crypto trading is having on office conversations. All I hear these days are inane conversations about getting rich quick. Everyone is an expert in technical analysis these days. At best, trading these currencies is a zero-sum game where you take money from others without providing any intrinsic worth to humanity. At worst is a pyramid scheme plain and simp…

I have no problem with valid criticism of cryptocurrency, and especially of its fanatics, but I’d be curious to hear you back up your claim that at best it’s a zero-sum game. That seems to me to be clearly incorrect.

Of course it’s a zero sum game, I’d like to hear how it’s not. It’s not creating any value, any gains are at the expense of someone else.

Re: China wants an orderly exit from Bitcoin mining

#47

Post by ChiliConKanye »

olalonde wrote: post #14
tbabb wrote: post #6

Earlier quoted context omitted.

Agreed. Shutting down participation in the planet's largest pyramid scheme doesn't have a lot of downside.

Here is what a pyramid scheme is: https://en.wikipedia.org/wiki/Pyramid_scheme Bitcoin is a distributed database that solves the "Two Generals Problem". Please don't spread misinformation on things you do not understand.

Take a little of your own advice. It doesn't solve the Two Generals Problem, which is intractable. It is a solution the Byzantine Generals Problem, of which there are many.

Re: China wants an orderly exit from Bitcoin mining

#48

Post by vec »

baddox wrote: post #24
isoprophlex wrote: post #11

Earlier quoted context omitted.

Can't agree more. Also I am getting pretty sick of the impact crypto trading is having on office conversations. All I hear these days are inane conversations about getting rich quick. Everyone is an expert in technical analysis these days. At best, trading these currencies is a zero-sum game where you take money from others without providing any intrinsic worth to humanity. At worst is a pyramid scheme plain and simp…

I have no problem with valid criticism of cryptocurrency, and especially of its fanatics, but I’d be curious to hear you back up your claim that at best it’s a zero-sum game. That seems to me to be clearly incorrect.

Person A mines 1 BTC. Since a Bitcoin has no intrinsic value (as distinguished from market value), Person A has not created any value. They have created $0 worth of goods.

Person A sells their coin to Person B for $1,000. A is $1,000 richer and B is $1,000 poorer.

B sells the bitcoin to C for $2,000. A is still $1k richer, B is $1k richer, and C is $2k in the hole.

C sells to D for $3k. A, B, and C are all $1k richer, but D is out $3k.

At no point in the chain is any actual value created or destroyed; it merely changes hands. So even though the price keeps going up, the total value across all participants never goes up. The sum of the gains and losses of all participants is $0.

(Note that I'm using "$" to represent a generic indicator of value. Feel free to substitute € or ¥ or gold or shares of Facebook stock or whatever.)

===============

There are two simplifying assumptions above, both of which make Bitcoin not exactly zero sum.

Good news first. Bitcoin can and does create some value in the same way that other currencies do: by facilitating mutually beneficial exchanges of goods and services. Commercial use appears to only be a tiny fraction of all Bitcoin transactions (and an even smaller fraction that wouldn't have been facilitated anyway using some other means of exchange), but it does happen so credit where credit's due.

The bad news, though, is that all of the above requires electricity. A lot of electricity, as it turns out. Both the initial mining and every transaction thereafter require someone, somewhere to burn some amount of power in order to generate proof of work. Since proof of work is explicitly designed to be useless, all that spent power is essentially deadweight loss.

I haven't seen any good numbers on the first recently (and I would love to have my assumptions proven wrong), but given the ginormous estimates of electricity consumed by the second I have a hard time believing the network as a whole isn't substantially worse than zero sum.

Re: China wants an orderly exit from Bitcoin mining

#49

Post by LV-426 »

olalonde wrote: post #27
aaron-lebo wrote: post #23

Earlier quoted context omitted.

It's a very uncharitable definition, sure. There's no organisation, recruiting, directors, membership or promise of payments. But those definitely exist, just not via any singular organization. There very much is organization and organizations, recruiting, would be directors, unofficial membership in the club of ownership, and lots of promises of payments. When people make that comparison, what they're really saying…

> In a pyramid scheme [Bitcoin], an organization compels individuals who wish to join to make a payment [purchase Bitcoin]. In exchange, the organization promises its new members a share of the money taken from every additional member that they recruit [to the moon]. There is no such thing. In that respect, Bitcoin is no different from real estate, stock or gold investors which do tend to sometimes promote their inve…

> early adopters, which take on more risk

I don't want to get into the debate on the definition of a pyramid scheme, but what was anyone risking by mining bitcoins for essentially nothing in 2009-2010?

Re: China wants an orderly exit from Bitcoin mining

#50

Post by oxide »

BoiledCabbage wrote: post #21
llamataboot wrote: post #19

Earlier quoted context omitted.

Naysayers would point out that trading increases liquidity which ostensibly increases the ability of a market to parlay information into value. But I'd be likely to agree with you. While blockchain technology /does/ have a future and will enable forms of socio-economic organization that were previously impossible, it's not there yet, and at the moment we're mostly passing tulips off to the greater fool.

> Naysayers would point out that trading increases liquidity which ostensibly increases the ability of a market to parlay information into value. And increasing opioid supplies, increases the ability of the market to efficiently parlay money into an altered mental state. Doesn't mean it's a net positive for society. The "liquidity" argument is such a terrible and simplistic justification for so many things.

Trust me, those opioids would be just as easy to acquire with Amazon Gift Cards, Paypal, Western Union, a bank deposit, you name it pal.

If you're trying to stand on some kind of anti-opiate moral ground for why cryptocurrency is evil it's a poor hill to die on.

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