Resources are being utterly and completely wasted on mining bitcoins
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Re: Resources are being utterly and completely wasted on mining bitcoins
#2Excellent article.
I would only add that we're using a LOT of energy to create a fake (read: virtual) resource. The best part about virtual resources is that they don't use many real resources, but this one is the opposite.
Granted, it's a 1-time cost, but as the article notes, it could be created with a much lower 1-time cost.
Re: Resources are being utterly and completely wasted on mining bitcoins
#3Don't the miners provide network services as well? Like how real mines don't just take from the ground, they also co-exist with civilian infrastructure built to keep the miners alive and functioning, and in bitcoin's case, the mining rigs dually enable transactions?
Re: Resources are being utterly and completely wasted on mining bitcoins
#4This is just a "prisoner's dilemma". The alternative is that we trust everyone not to use their full ability to generate blocks. Obviously this would completely defeat the point of bitcoins.
Re: Resources are being utterly and completely wasted on mining bitcoins
#5My magazine have a two part series that argue the opposite that bitcoin mining is not wasteful:
1. http://bitcoinweekly.com/articles/the-wasted-electricity-obj...
2. http://bitcoinweekly.com/articles/the-wasted-electricity-obj...
Re: Resources are being utterly and completely wasted on mining bitcoins
#6Any system of checks and balances will have its price. Look at what we do with gold: we dig it from a hole in Africa, we transport it in other countries, we dug holes or build vaults and throw it there. Like Warren Buffett said, it has no utility, if Martians were to look at the process they would scratch their heads.
Except for the guarantee of uniqueness. Which is one of the most powerful invariants against corruption and government-sponsored inflation, goals which are worth these effort.
Re: Resources are being utterly and completely wasted on mining bitcoins
#7This is just a "prisoner's dilemma". The alternative is that we trust everyone not to use their full ability to generate blocks. Obviously this would completely defeat the point of bitcoins. http://en.wikipedia.org/wiki/Prisoners_dilemma
Yeah, that's why the only thing I could think of that would 'fix' this, is to release new miners that use less processing power, and a new client that only allows input from those miners. Even so, such a thing would be equally as difficult to introduce as, for example, a rule that would hand out 200BTC instead of 50BTC.
Re: Resources are being utterly and completely wasted on mining bitcoins
#8The hypothetical solution is flawed: it would take not 50% of miners to adopt a 1% implementation; it would take 100%, since if only 1 defects, that one wins all the coins and all the cooperative 'prisoners' lose.
Re: Resources are being utterly and completely wasted on mining bitcoins
#9> There is a solution to this problem. If someone releases a new Bitcoin client (and miners) that run on only 1% of the available processing power, and gets more than 50% of the network to adopt this new client, then total electricity costs drop would drop hugely
No, because you can't cryptographically enforce that all compatiable clients use only 1% of their available processing power.
If such a client took over the bitcoin network, somebody would use a patched version of that client that pretended to use only 1% of the computing power, but actually used all of it. There's no way the other clients could know, so the whole spiral would start anew.
Re: Resources are being utterly and completely wasted on mining bitcoins
#10The author misses the point. The security of the Bitcoin network (at least in terms of double-spending) is tied to the level of work required to generate a block. If everyone decided to use only 1% of their computing power, they'd use less electricity, but the Bitcoin network would then be 100 times less secure.
When people talk about "wasting resources", it's an indication they don't understand how Bitcoin works. One might as well complain about wasting resources on SSL when you could just send data in plaintext.