Bitcoin Miners on Track to Use More Electricity Than All of Argentina • Hacker News Board

Re: Bitcoin Miners on Track to Use More Electricity Than All of Argentina

#21

Post by lt » Mon, Jan 15, 2018, 3:36 PM UTC

masmullin wrote: post #13

creshal wrote: post #7

Proof of work was a mistake.

I have a hard time understanding proof of stake. I haven't found any discussions that make sense to me. Do you have any good easy to understand descriptions of proof of stake you could recommend to a layman like me?

In a very simplified way, proof of work is a way to roughly uniformily distribute the block generation "queue". In a network without identities how do you prevent someone creating hundreds of accounts to have a hundred times more chance to be next in line? You give them a hard problem, and now the odds of you being next in line is proportional to your computing power, which you can't multiply effortlessly.

Proof of Stake says that instead of distributing the work queue proportionally to the computing power you demonstrated to have, it does it proportionally to the amount of currency you have saved. It similarly prevents the attack where one could create infinite personalities to get in line, with different trade offs. In particular, beside the energy savings, it can be a much more scalable model, where you don't have to wait 10min in average for someone to solve the hard problem and instead you can know right away who are the next people eligible to generate the next blocks.

Re: Bitcoin Miners on Track to Use More Electricity Than All of Argentina

#22

Post by ufo » Mon, Jan 15, 2018, 3:36 PM UTC

GordonS wrote: post #18

masmullin wrote: post #13

Earlier quoted context omitted.

I have a hard time understanding proof of stake. I haven't found any discussions that make sense to me. Do you have any good easy to understand descriptions of proof of stake you could recommend to a layman like me?

Think of bank accounts that don't allow instant access to your cash, where you gave to keep it in for a year or whatever to get your interest. With PoS, the more coins you tie up, the more chance you have of 'winning'. That's my understanding anyway - someone more knowledgeable, please feel free to correct me!

The problem is in the details: how do you use this to reach consensus? How do you agree on a randomness source to picks the "winners"? How do you prevent people from mining multiple parallel histories, devolving the system into proof of work?

Re: Bitcoin Miners on Track to Use More Electricity Than All of Argentina

#23

Post by maxerickson » Mon, Jan 15, 2018, 3:36 PM UTC

cs702 wrote: post #6

The energy invested in adding transaction blocks to the Bitcoin blockchain (which requires iterating through nonces until one is found that can partially reverse a cryptographic hashing algorithm, consuming computing power) is what makes the blockchain immutable . Consider: Modifying a transaction block from, say, 3 days ago, is practically impossible, because it would require burning the same amount of energy the en…

You don't have to match the energy burn, just the hash rate (so efficiency matters).

You also don't have to do it all at once, you just have to be faster than the network (If the private blocks are calculated 10% faster it only takes ~10 days to go back in time 1 day). But of course this attack isn't practical, actually executing it would demonstrate that the public network was a farce.

Re: Bitcoin Miners on Track to Use More Electricity Than All of Argentina

#24

Post by BearGoesChirp » Mon, Jan 15, 2018, 3:40 PM UTC

jstanley wrote: post #3

nonbel wrote: post #2

Something I've been thinking about is that proof of work "coins" are basically energy credits. When energy is cheap, miners can lower their fees and keep the same return, leading to more economic activity. When it is expensive, they need to raise their fees to stay profitable, thus reducing economic activity. I think this makes sense. Wouldn't it be beneficial if economic activity scaled with energy availability? It…

> miners can lower their fees This isn't how fees work. Fees are based purely on supply and demand. The payer sets their fee level when they create the transaction, and it's up to the miners which transactions they will include. Since there is always an excess of transactions, the miners typically select transactions to maximise their payoff. If miners were to "lower their fees", they'd be accepting low-fee transacti…

When energy becomes cheaper, miners can do more mining, leading to an increase in blocks. Given that people are only willing to pay so much for a transaction to complete, there is only so much demand at a certain price point. Once the supply of blocks increases, you eventually have price points where the demand no longer matches the supply. At this point a miner would lower their fee until the demand increases back to supply.

Supply and demand drives prices, but it does so through individual actors setting prices they are willing to pay/accept (or by algorithms that have been setup by some human who set up the rules by which it will set prices).

Re: Bitcoin Miners on Track to Use More Electricity Than All of Argentina

#25

Post by masmullin » Mon, Jan 15, 2018, 3:41 PM UTC

lt wrote: post #21

masmullin wrote: post #13

Earlier quoted context omitted.

I have a hard time understanding proof of stake. I haven't found any discussions that make sense to me. Do you have any good easy to understand descriptions of proof of stake you could recommend to a layman like me?

In a very simplified way, proof of work is a way to roughly uniformily distribute the block generation "queue". In a network without identities how do you prevent someone creating hundreds of accounts to have a hundred times more chance to be next in line? You give them a hard problem, and now the odds of you being next in line is proportional to your computing power, which you can't multiply effortlessly. Proof of S…

> it does it proportionally to the amount of currency you have saved.

Doesn't this have an inherent disincentive to new people joining and using the network? Sorta like the poor stay poor, the rich get rich?

Re: Bitcoin Miners on Track to Use More Electricity Than All of Argentina

#26

Post by jcranmer » Mon, Jan 15, 2018, 3:44 PM UTC

clashmoore wrote: post #9

Has there been articles or research done on how much energy is used to coin, print, distribute, and utilize fiat currencies?

The Bureau of Printing and Engraving budgeted $14.35 million in FY2017 for "Communication, utilities, and misc. charges." If we assume that 100% of that is electricity costs, and that electricity costs 12¢/kWh, then we get somewhere in the region of 120 million kWh in FY2017 to produce USD. That is 0.1% the annual electricity consumption of Argentina.

Re: Bitcoin Miners on Track to Use More Electricity Than All of Argentina

#27

Post by cs702 » Mon, Jan 15, 2018, 3:48 PM UTC

maxerickson wrote: post #23

cs702 wrote: post #6

The energy invested in adding transaction blocks to the Bitcoin blockchain (which requires iterating through nonces until one is found that can partially reverse a cryptographic hashing algorithm, consuming computing power) is what makes the blockchain immutable . Consider: Modifying a transaction block from, say, 3 days ago, is practically impossible, because it would require burning the same amount of energy the en…

You don't have to match the energy burn, just the hash rate (so efficiency matters). You also don't have to do it all at once, you just have to be faster than the network (If the private blocks are calculated 10% faster it only takes ~10 days to go back in time 1 day). But of course this attack isn't practical, actually executing it would demonstrate that the public network was a farce.

> You don't have to match the energy burn, just the hash rate (so efficiency matters).

Of course, but I don't know how anyone could be a lot more efficient that current miners, who are in a rat race to increase the efficiency of their mining operations. They probably think about energy consumption every waking hour of the day.

> You also don't have to do it all at once, you just have to be faster than the network (If the private blocks are calculated 10% faster it only takes ~10 days to go back in time 1 day)...

Of course, but by then the Bitcoin network would have invested ~10 more days of energy into the network, and now instead of being one day behind, one would be ~10 days behind. One would have a different, forked blockchain far behind the original one, with no hope of catching up.

If one wants to modify a transaction from a day ago over time, one must burn at least one day's worth of Bitcoin network energy consumption much faster than the network, in order to keep up with the network. If one wants to modify a transaction from a day ago right now, one must burn at least one day's worth of Bitcoin network energy consumption in an instant.

PS. Note that I mean without forking. SORRY if that wasn't clear in my earlier comments!

Re: Bitcoin Miners on Track to Use More Electricity Than All of Argentina

#28

Post by tomjen3 » Mon, Jan 15, 2018, 3:48 PM UTC

Retric wrote: post #14

AJ007 wrote: post #5

If we had as of precise data on both energy & resource consumption as we have on Bitcoin mining we could remove all taxes and create a consumption/VAT tax based on how much resources and energy something used. That could go a long way in shifting costs that are socialized back in to their consumers and producers.

Energy taxes are even more regressive than sales taxes. All it would do is increase the vast wealth subsidy.

That depends on how you look at it. If you look at it as a change from the current system it would likely be mostly a benefit to the rich.

If you see it as an alternative to paying nothing (we wipe the slate clean and then consider each system by comparing it to that) the rich will still pay by far the most.

If you are concerned with a minimum form of income, you can always give a certain amount of credits to each person at no cost to them.

Re: Bitcoin Miners on Track to Use More Electricity Than All of Argentina

#29

Post by tomjen3 » Mon, Jan 15, 2018, 3:53 PM UTC

masmullin wrote: post #25

lt wrote: post #21

Earlier quoted context omitted.

In a very simplified way, proof of work is a way to roughly uniformily distribute the block generation "queue". In a network without identities how do you prevent someone creating hundreds of accounts to have a hundred times more chance to be next in line? You give them a hard problem, and now the odds of you being next in line is proportional to your computing power, which you can't multiply effortlessly. Proof of S…

> it does it proportionally to the amount of currency you have saved. Doesn't this have an inherent disincentive to new people joining and using the network? Sorta like the poor stay poor, the rich get rich?

If it works as described, yes, but no more so than any other investment - and if the interest/profit on those coins are higher it will draw capital from other places, which will decrease the interest/profit on the coins.

Re: Bitcoin Miners on Track to Use More Electricity Than All of Argentina

#30

Post by greiskul » Mon, Jan 15, 2018, 3:53 PM UTC

masmullin wrote: post #25

lt wrote: post #21

Earlier quoted context omitted.

In a very simplified way, proof of work is a way to roughly uniformily distribute the block generation "queue". In a network without identities how do you prevent someone creating hundreds of accounts to have a hundred times more chance to be next in line? You give them a hard problem, and now the odds of you being next in line is proportional to your computing power, which you can't multiply effortlessly. Proof of S…

> it does it proportionally to the amount of currency you have saved. Doesn't this have an inherent disincentive to new people joining and using the network? Sorta like the poor stay poor, the rich get rich?

Not anymore then proof of work has I think. Want to join bitcoin mining? You need to invest in mining hardware, and have access to cheap electricity.