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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

#131

Post by _ikke_ »

gus_massa wrote: post #27
rheide wrote: post #18

Earlier quoted context omitted.

The trick lies in changing the bitcoin protocol. If the majority of clients can agree on a way to use less resources, then that's what will be enforced by the network. If a new bitcoin client enforced a mandatory delay of one hour and invalidated blocks that were made before that one hour, we would effectively have added one hour of idle time to the network. This is not a solution, but it is a demonstration of how th…

The problem is that it is easy to simulate that you are waiting. 1) Save current time 2) "Precalculate" the current block 3) Wait until the 3601th second 4) Publish the block that you "calculate" in just 1 second 5) Profit??

The problem is that other people might have already found other blocks, rendering your block useless.

Re: Resources are being utterly and completely wasted on mining bitcoins

#132

Post by oelewapperke »

jncraton wrote: post #85
cynicalkane wrote: post #83

Earlier quoted context omitted.

Scarcity of money is not the most desirable end, because the supply and demand for money threatens to change the value of money . Even if all the money in the world were fixed, you would see inflation and deflation, more inflation than you've ever seen on a properly managed fiat money system. This is not mere economic theory, it's a matter of history.

> more inflation than you've ever seen on a properly managed fiat money system While this may be true, a scarce money system does produce better result than poorly managed fiat money systems. You won't see the kind of hyperinflation that we saw in Zimbabwe with the gold standard.

But the million dollar question is whether it produces better results than a well-managed fiat money system ?

In a fixed-supply system a small number of powerful people will amass all money (as the value of cash tends toward infinite over time, the only correct action is to hoard any and all money you have). Or that's what the theory says, anyway. Is it true ? History would seem to indicate that it is, but there is certainly no consensus on this matter.

In a fiat-money system with controlled inflation the value of money tends toward zero, forcing investors to do stuff with their money. All money will therefore be used for running the economy, very little money will be used for hoarding (which is exactly what you see today in America. The wealthy control very little money, and even the portion they do control is mostly invested in loans to profit-seeking companies). Of course, inflation de-facto puts money in government hands.

The theory is (but is it true ?) : in a controlled-inflation system nearly all money is used for making people do things (which tends to result in absurd levels of bureaucracy on the negative side), in a scarcity system all money is hoarded, and nobody gets off their ass.

I'm thinking I'd prefer a controlled inflation system. Now how do we restrict inflation to a fixed, predictable value ? Because bitcoin is not the answer for this.

Re: Resources are being utterly and completely wasted on mining bitcoins

#133

Post by joezydeco »

michael_dorfman wrote: post #118
palish wrote: post #69

Earlier quoted context omitted.

If the conversation points are correct, then there's nothing wrong with making them. As something like Bitcoin becomes more popular, people will naturally have questions and concerns. Should they search for the answer before asking? Maybe, but it doesn't really matter if they don't. People are free to downvote them for asking. But they don't, and the resulting conversation becomes interesting for those who haven't se…

You've been a member of HN almost as long as I have. Haven't you noticed the destructive effects meta-discussion has on articles? If so, why are you perpetuating it? Because I've also noticed the pernicious effect of waves of discussions like this that never die. Articles about Bitcoin (and other similar topics) come to dominate the front page for a while, and crowd out other, more interesting content. I don't usuall…

I count more Heroku articles on HN today than Bitcoin. I just ignore them. It all depends on where your sensitivity adjustment is set today, I guess.

Re: Resources are being utterly and completely wasted on mining bitcoins

#134

Post by joezydeco »

wccrawford wrote: post #42
weavejester wrote: post #15

Earlier quoted context omitted.

That's not quite true. Bitcoins cost virtually nothing to create, but you are only allowed to create them if you succeed at securing a block of transactions. All of the processing power used in the Bitcoin network is designed to verify the transaction chain and prevent double-spending. The bitcoins generated as a result are just a reward to compensate people for their energy and hardware costs.

I recently looked into generating bitcoins, and that's not really true. Very little power goes into generating a successful bitcoin, true... But a LOT of power is wasted by failing to generate them. That's why it takes days, weeks or months (depending on processing power) to generate a successul bitcoin, on average.

You're trying to win a lottery. With everyone racing to create a "solution" that fits the difficulty criteria there's no guarantee that you'll even win a block if you throw enough horsepower at it. A newcomer with a 900Mhz Pentium could find the correct solution on his first cycle.

Re: Resources are being utterly and completely wasted on mining bitcoins

#136

Post by pash »

weavejester wrote: post #28
rheide wrote: post #18

Earlier quoted context omitted.

The trick lies in changing the bitcoin protocol. If the majority of clients can agree on a way to use less resources, then that's what will be enforced by the network. If a new bitcoin client enforced a mandatory delay of one hour and invalidated blocks that were made before that one hour, we would effectively have added one hour of idle time to the network. This is not a solution, but it is a demonstration of how th…

The problem is what you define as "a majority". If it's just a majority of clients, then an attacker could just start up a million new client processes and outvote the existing network. If we're talking a majority of unique IP addresses, then anyone with access to a large IP address block could outvote the network. This approach also wouldn't be feasible for IPv6, where IP addresses are not a scarce resource. The Bit…

> If you can think of another way of defining "a majority" without needing a lot of CPU resources, a lot of people would be interested in hearing your solution.

Let Bitcoins equal votes.

Set up a Bitcoin account for each option in the vote; send Bitcoins to the account associated with the option you prefer. Transaction verification acts as an electoral audit.

That sort of system would give power over the money supply to those invested in the currency, which seems to be exactly what the Bitcoin community wants.

Re: Resources are being utterly and completely wasted on mining bitcoins

#137

Post by JoeAltmaier »

kragen wrote: post #95
JoeAltmaier wrote: post #8

The 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.

Based on my minimal understanding, you need about 0.99% to defect (and collude!) to win all the coins, not just one miner.

The defector(s) are using 2 orders of magnitude more CPU time to solve problems. So they win almost all of the time (all of the coins).

Re: Resources are being utterly and completely wasted on mining bitcoins

#138

Post by weavejester »

pash wrote: post #136
weavejester wrote: post #28

Earlier quoted context omitted.

The problem is what you define as "a majority". If it's just a majority of clients, then an attacker could just start up a million new client processes and outvote the existing network. If we're talking a majority of unique IP addresses, then anyone with access to a large IP address block could outvote the network. This approach also wouldn't be feasible for IPv6, where IP addresses are not a scarce resource. The Bit…

> If you can think of another way of defining "a majority" without needing a lot of CPU resources, a lot of people would be interested in hearing your solution. Let Bitcoins equal votes. Set up a Bitcoin account for each option in the vote; send Bitcoins to the account associated with the option you prefer. Transaction verification acts as an electoral audit. That sort of system would give power over the money supply…

Your solution is bootstrapping in the very literal and very impossible sense.

You can't use bitcoins as votes to verify transactions, because until you verify the transaction chain, you don't know how many bitcoins anyone has.

Re: Resources are being utterly and completely wasted on mining bitcoins

#139

Post by pash »

weavejester wrote: post #138
pash wrote: post #136

Earlier quoted context omitted.

> If you can think of another way of defining "a majority" without needing a lot of CPU resources, a lot of people would be interested in hearing your solution. Let Bitcoins equal votes. Set up a Bitcoin account for each option in the vote; send Bitcoins to the account associated with the option you prefer. Transaction verification acts as an electoral audit. That sort of system would give power over the money supply…

Your solution is bootstrapping in the very literal and very impossible sense. You can't use bitcoins as votes to verify transactions, because until you verify the transaction chain, you don't know how many bitcoins anyone has.

The question was how to allow clients to form a new consensus. I did not suggest using Bitcoins to verify transactions; rather, I suggested using verified transactions to verify the will of the Bitcoin community.

Re: Resources are being utterly and completely wasted on mining bitcoins

#140

Post by caf »

iwwr wrote: post #57
caf wrote: post #53

Earlier quoted context omitted.

No, blocks are still created in exactly the same way, the only difference is that no new bitcoins are created as a side-effect. It is necessary for new transactions to be locked into the block chain with a bruteforced hash, as it's this expenditure of processing power that makes the transactions permanent and prevents double-spending.

I just imagined that the bitcoin world post-mining (after or near the 21M BTC is reached) would just consist of the transactional interfaces and not need the specialized GPU miners.

Unfortunately, that's not how it works. The "miners" are really "transaction settlers". It's the longest block chain that represents the globally consistent view of which transactions have settled.
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