On the Instability of Bitcoin Without the Block Reward [pdf] • Hacker News Board

Re: On the Instability of Bitcoin Without the Block Reward [pdf]

#141

Post by ajkdhcb2 » Wed, Mar 03, 2021, 4:04 PM UTC

intotheabyss wrote: post #95

ajkdhcb2 wrote: post #59

Earlier quoted context omitted.

The bitcoin community is at a general consensus that PoS is inherently insecure

The bitcoin community would be wrong.

It seems very simple to me. The network would be controlled by custodians including exchanges and banks. And under an attack the network would be over: the malicious stakers can basically pay themselves and suffer no cost to continue the attack. Conversely with PoW there is a sustained huge expense to continue to perform an attack, and the PoW can be changed by a fork. I would never consider this to be acceptable. Not that ASICs run by China aren't currently an abysmal situation either, but that is only a problem because bitcoin has no privacy

Re: On the Instability of Bitcoin Without the Block Reward [pdf]

#142

Post by thebean11 » Wed, Mar 03, 2021, 4:04 PM UTC

AaronFriel wrote: post #39

cyphertruck wrote: post #25

Earlier quoted context omitted.

Not to disagree, but to emphasize that the idea that the only way to increase bitcoin capacity is increasing the block size is in error. You didn't push that idea but others do. Nearly every release of bitcoin over past 8 years has increased capacity or efficiency, often both.

How many kWh does one transaction consume? Is that higher or lower than 8 years ago?

Number of transactions is the wrong denominator for energy usage of the network. The same number of transactions could be confirmed by a single miner.

The miners contribute to network security (double spend protection), not transaction throughput. Common misconception.

Re: On the Instability of Bitcoin Without the Block Reward [pdf]

#143

Post by moralsupply » Wed, Mar 03, 2021, 4:05 PM UTC

dragonwriter wrote: post #129

moralsupply wrote: post #127

Earlier quoted context omitted.

No they don't. Gaming is the sole demand for all consoles and GPUs produced in the world. Those devices alone consume a lot more energy than Bitcoin miners (by about an order of magnitude). Gold and Silver are extremely expensive to mine energy-wise. The banking system is amazingly expensive to run. Not only it requires lots of buildings and transportation for millions of workers, it also requires a lot of computing…

> Gaming is the sole demand for all consoles and GPUs Well, no, mining cryptocurrency is a significant source of GPU demand; GPUs also have non-gaming, non-cryptocurrency utility.

cryptocurrency mining is mostly done using ASICs

Re: On the Instability of Bitcoin Without the Block Reward [pdf]

#144

Post by rkagerer » Wed, Mar 03, 2021, 4:08 PM UTC

Paul-E wrote: post #12

One of the assumptions the authors make in this paper is that miners can turn their hardware on and off quickly, and that they will benefit financially for doing so. Mainly by paying lower electricity bills. It turns out the really big miners don't pay for electricity the same way you or I do. Big miners sign long term contracts for continuous consumption of energy, and don't save any money for turning mining hardwar…

Depending where they are and the nature of their rate contract, can't they can resell their unused, pre-purchased capacity back to the grid?

Re: On the Instability of Bitcoin Without the Block Reward [pdf]

#145

Post by Mordisquitos » Wed, Mar 03, 2021, 4:13 PM UTC

rawtxapp wrote: post #108

steve_gh wrote: post #69

Earlier quoted context omitted.

Maybe we need a heavy Carbon Tax on Proof of Work cryptocurrencies. Using the energy consumption of Argentina to verify financial transactions does not fit with moving to a Net Zero economy.

Carbon tax everything, why limit yourself to cryptocurrencies?

Exactly. To be precise, carbon tax energy, so that everything that uses energy needs to factor carbon emissions in their costs. The whole point of carbon taxes is to internalise the cost of carbon emissions into everything, to put the market to work on better alternatives. Limiting carbon taxes to any particular service or product would be a market distortion and would defeat the purpose.

If carbon taxes hurt cryptocurrency mining and their value collapses in favour of less-energy-intensive digital payment platforms, that would be great. If on the other hand cryptocurrencies innovate towards less-energy-intensive methods of mining and their value continues to soar, that would also be great.

Re: On the Instability of Bitcoin Without the Block Reward [pdf]

#146

Post by iso8859-1 » Wed, Mar 03, 2021, 4:18 PM UTC

tromp wrote: post #43

cyphertruck wrote: post #22

Earlier quoted context omitted.

The large backlog these days is mostly spam transactions with almost no fees. Bitcoin has increased capacity dramatically in the past decade.

Wrong; there is a large backlog of transactions paying over 50 sat per byte [1], which is over $10 in fees for most transactions. [1] https://jochen-hoenicke.de/queue/#BTC,24h

Why is it $10? According to https://www.buybitcoinworldwide.com/fee-calculator/

Fee rate: 51 satoshis/vbyte

SegWit transaction with 1 input, 2 outputs: ~172 vbytes

In total: ~8772 satoshis == ~4.48 USD

Re: On the Instability of Bitcoin Without the Block Reward [pdf]

#147

Post by [deleted] » Wed, Mar 03, 2021, 4:20 PM UTC

sjy wrote: post #104

drdeca wrote: post #58

Earlier quoted context omitted.

I don’t think individual transactions are meaningfully tied to an energy cost.

Why can’t you estimate the power consumption of the whole network and divide it by the number of transactions per second?

[deleted]

Re: On the Instability of Bitcoin Without the Block Reward [pdf]

#148

Post by hfsp » Wed, Mar 03, 2021, 4:21 PM UTC

SideburnsOfDoom wrote: post #87

aaron695 wrote: post #70

I haven't read the paper but I'll still be downvoted for this either way so please upvote, but Bitcoin uses a lot of energy that it shouldn't and banks work better and it is just a speculative market which means gambling, and I think it's probably racist. Please remember Bitcoin is bad. If I was smart I might ask if this paper is relevant within the next 100 year given how Bitcoin works currently, but I'm not :(

> and I think it's probably racist I know that you think you're being performatively stupid, but in a system where the benefits are captured almost entirely by a few techbros, and the pollution from the coal power plants powering it is felt mostly by ethnic minority rural poor (1) ... yes? I suggest that the burden of poof is on the other side: attempt to make a coherent case why this technology is somehow egalitaria…

This is a smug take.

Who do you think gets the benefit of the freshly printed fiat?

In the central bank cantiollionaire system, there are three classes of citizens:

1) jamie dimons, warren buffets and the like who get access to practically 0 cost lending rates 2) the ~60% of citizens with assets (e.g. stonks, real estate) that get pumped along with the money printer 3) everyone else

What do you think happens to "third class" citizens?

The rules are NOT the same for everyone under the central banking system.

The rules ARE the same for EVERYONE with BTC.

https://www.newyorkfed.org/medialibrary/media/research/staff...

Re: On the Instability of Bitcoin Without the Block Reward [pdf]

#149

Post by ximeng » Wed, Mar 03, 2021, 4:25 PM UTC

AaronFriel wrote: post #39

cyphertruck wrote: post #25

Earlier quoted context omitted.

Not to disagree, but to emphasize that the idea that the only way to increase bitcoin capacity is increasing the block size is in error. You didn't push that idea but others do. Nearly every release of bitcoin over past 8 years has increased capacity or efficiency, often both.

How many kWh does one transaction consume? Is that higher or lower than 8 years ago?

https://www.statista.com/statistics/881541/bitcoin-energy-co...

"The average energy consumption for one single Bitcoin transaction in 2020 was 741 kilowatt-hours. This was significantly more compared to the cumulative 100,000 VISA transactions with only an energy consumption of 149 kilowatt-hours."

Re: On the Instability of Bitcoin Without the Block Reward [pdf]

#150

Post by zhoujianfu » Wed, Mar 03, 2021, 4:29 PM UTC

I have a controversial view.. (more than) enough mining will still happen even if there were no block reward AND no fees.

Why would somebody mine Bitcoin in that scenario? Because they hold Bitcoin.

I imagine the average investor would be willing to spend around 2% of their holdings a year to “protect” their investment, I.e. make sure the network is functional and immune to attack.

Which comes out to about the total amount spent now on mining (1.8% annual block reward =~ 1.8% spent on mining).