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Bitcoin Miners Flock to New York’s Remote Corners, but Get Chilly Reception

nytimes.com

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Re: Bitcoin Miners Flock to New York’s Remote Corners, but Get Chilly Reception

#41

Post by perl4ever »

darawk wrote: post #22
perl4ever wrote: post #21

Earlier quoted context omitted.

It is certainly true that the social utility of a company is not necessarily proportional to the number of employees, but it's not necessarily proportional to the profits either. A glass repair company that goes around breaking windows could make money without creating net utility. That is what many people see bitcoin as. Now, you can debate and argue about specifics vis-a-vis cryptocurrency, but there's a larger iss…

> Why assume that making money means you are benefiting society, in general? Because when you make money, someone is paying you for a product or service. When someone chooses to pay you for your product or service, they are expressing a preference for that product or service over the money, and vice versa (you express a preference for the money over the product/service). Which means, that when money is exchanged for…

Sure, that is a familiar explanation of the utility of trade from Econ 101. But it does involve simplifying assumptions.

What you're leaving out, is that "voluntary" transactions have effects on third parties who do not consent, and also true consent of those directly involved requires that they accurately and equally understand the consequences of their actions, which is often not true in real life.

I feel like there is a third issue that I have difficulty articulating, relating to the fact that people are bound to round small probabilities to zero, which means that there is an economy of scale to exploitative behavior.

Re: Bitcoin Miners Flock to New York’s Remote Corners, but Get Chilly Reception

#43

Post by tjpaudio »

darawk wrote: post #22
perl4ever wrote: post #21

Earlier quoted context omitted.

It is certainly true that the social utility of a company is not necessarily proportional to the number of employees, but it's not necessarily proportional to the profits either. A glass repair company that goes around breaking windows could make money without creating net utility. That is what many people see bitcoin as. Now, you can debate and argue about specifics vis-a-vis cryptocurrency, but there's a larger iss…

> Why assume that making money means you are benefiting society, in general? Because when you make money, someone is paying you for a product or service. When someone chooses to pay you for your product or service, they are expressing a preference for that product or service over the money, and vice versa (you express a preference for the money over the product/service). Which means, that when money is exchanged for…

Utility is an non-measurable unit with no connection to anything real that economics textbooks use to help people conceptualize basic theory. Capital creation versus rent seeking are concepts grounded in reality with real consequences. Creating money does not necessitate capital creation or increased well being. I suggest reading about the broken window fallacy to understand why you are wrong.

Re: Bitcoin Miners Flock to New York’s Remote Corners, but Get Chilly Reception

#44

Post by fiter »

ENGNR wrote: post #14
badge wrote: post #7

Earlier quoted context omitted.

The real irony here is that the Bitcoin/Ethereum miners are setting up hardware which runs software designed to maximize inefficiency for the sake of maintaining a system designed for money laundering and tax evasion. Rather than use their equipment for work that's useful to humanity like Folding@Home or BOINC these mining operations are running what amounts to a foundry of space heaters trying to compute a lottery n…

There’s a real need for a currency that’s actually backed by something real, given the amount of silly money sloshing around the system these days Linking a currency to wasted energy isn’t great, but what solution would you put forward? A few countries out there have tried to go back to gold or use their oil but it doesn’t end well for them

That means the price of a cryptocurrency should be tightly correlated to the hashes per second. I believe that is not the case, but I've only looked at bitcoin.

Re: Bitcoin Miners Flock to New York’s Remote Corners, but Get Chilly Reception

#45

Post by bogomipz »

cdiddy2 wrote: post #34
bogomipz wrote: post #23

Earlier quoted context omitted.

I'm not familiar with "proof of stake", how does that make mining less wasteful in terms of resources?

Its doesn't have any mining at all. You put your coins in a smart contract that allows you to get randomly selected to create blocks from time to time, if you do something wrong then some of your coins are taken from you, if you do everything right you get a portion of the fees and/or a bit of inflation. There are lots of slightly different variants of it though

Interesting. Is there a practical reason limiting its' adoption?

Re: Bitcoin Miners Flock to New York’s Remote Corners, but Get Chilly Reception

#46

Post by replies_to_all »

bobcat9 wrote: post #18
badge wrote: post #7

Earlier quoted context omitted.

The real irony here is that the Bitcoin/Ethereum miners are setting up hardware which runs software designed to maximize inefficiency for the sake of maintaining a system designed for money laundering and tax evasion. Rather than use their equipment for work that's useful to humanity like Folding@Home or BOINC these mining operations are running what amounts to a foundry of space heaters trying to compute a lottery n…

"designed for money laundering and tax evasion." That's reaching. Just because some people use it for that doesn't mean that's what it's designed for.

Above comment about laundering is so ignorant I can't believe it was made in 2018.

Re: Bitcoin Miners Flock to New York’s Remote Corners, but Get Chilly Reception

#47

Post by darawk »

perl4ever wrote: post #41
darawk wrote: post #22

Earlier quoted context omitted.

> Why assume that making money means you are benefiting society, in general? Because when you make money, someone is paying you for a product or service. When someone chooses to pay you for your product or service, they are expressing a preference for that product or service over the money, and vice versa (you express a preference for the money over the product/service). Which means, that when money is exchanged for…

Sure, that is a familiar explanation of the utility of trade from Econ 101. But it does involve simplifying assumptions. What you're leaving out, is that "voluntary" transactions have effects on third parties who do not consent, and also true consent of those directly involved requires that they accurately and equally understand the consequences of their actions, which is often not true in real life. I feel like ther…

> What you're leaving out, is that "voluntary" transactions have effects on third parties who do not consent

Sure, those are called externalities. I was simply explaining where the idea that trade generates value comes from. So, given that, generally we presume that trade is beneficial, unless/until someone points out an externality. Which, I certainly wouldn't make the case that there aren't any here, there are. But the way you argue against this activity is by pointing to specific externalities.

> I feel like there is a third issue that I have difficulty articulating, relating to the fact that people are bound to round small probabilities to zero, which means that there is an economy of scale to exploitative behavior.

I don't think what you're getting at has so much to do with probability rounding as it does with 'coordination problems' (http://www.oxfordreference.com/view/10.1093/oi/authority.201...)

Re: Bitcoin Miners Flock to New York’s Remote Corners, but Get Chilly Reception

#48

Post by darawk »

tjpaudio wrote: post #43
darawk wrote: post #22

Earlier quoted context omitted.

> Why assume that making money means you are benefiting society, in general? Because when you make money, someone is paying you for a product or service. When someone chooses to pay you for your product or service, they are expressing a preference for that product or service over the money, and vice versa (you express a preference for the money over the product/service). Which means, that when money is exchanged for…

Utility is an non-measurable unit with no connection to anything real that economics textbooks use to help people conceptualize basic theory. Capital creation versus rent seeking are concepts grounded in reality with real consequences. Creating money does not necessitate capital creation or increased well being. I suggest reading about the broken window fallacy to understand why you are wrong.

I'm definitely not wrong. The description I gave is completely accurate. It, however, may not be complete. The broken window parable does not actually in any way negate what I said - the purchase of the window still makes both parties better off.

Re: Bitcoin Miners Flock to New York’s Remote Corners, but Get Chilly Reception

#49

Post by eudora »

plankers wrote: post #27
eudora wrote: post #20

Is there any work being done to make Bitcoin not consume all that energy? It's hard to support when it's so wasteful of a critical resource. Are they trying to go proof of stake?

Bitcoin is _not_ trying to go proof of stake because proof of work is the most secure consensus algorithm that exists. Proof of stake has some lingering unsolved problems, search for "nothing at stake problem" and "long range attack." All the energy consumed by bitcoin is a feature, not a bug. The only way to defeat the immutability of the bitcoin blockchain and do naughty things would be to expend _more_ energy than…

If that's the case, I'm not into it. It's not sustainable. What an incredible waste of resources.

And presumably the energy cost correlates to the usage of the currency?

How can it possibly become anything like widely used if it's so pricey?

(Come to think of it, one way is the lightning network. Which doesn't use the blockchain for almost everything: https://lightning.network/)

Re: Bitcoin Miners Flock to New York’s Remote Corners, but Get Chilly Reception

#50

Post by nradov »

ENGNR wrote: post #14
badge wrote: post #7

Earlier quoted context omitted.

The real irony here is that the Bitcoin/Ethereum miners are setting up hardware which runs software designed to maximize inefficiency for the sake of maintaining a system designed for money laundering and tax evasion. Rather than use their equipment for work that's useful to humanity like Folding@Home or BOINC these mining operations are running what amounts to a foundry of space heaters trying to compute a lottery n…

There’s a real need for a currency that’s actually backed by something real, given the amount of silly money sloshing around the system these days Linking a currency to wasted energy isn’t great, but what solution would you put forward? A few countries out there have tried to go back to gold or use their oil but it doesn’t end well for them

Where is the real need? USD and EUR seem to be working fine.
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