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Cryptocurrency Blockchains Don’t Need to Be Energy Intensive

spectrum.ieee.org

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Re: Cryptocurrency Blockchains Don’t Need to Be Energy Intensive

#81

Post by Slartie »

rawtxapp wrote: post #76
Slartie wrote: post #70

Earlier quoted context omitted.

> nobody can just become richer because they started rich Right. In PoW, they need access to limited semiconductor supplies and cheap electricity. Which are two things that can be bought with...what was that stuff called...? Ah, yes: money! So PoW does just the same - the rich tend to get richer - but it adds the necessity to cause unnecessary environmental pollution on the scale of an entire country to it. Oh, and a…

The profit margins of a miner is pretty slim. If the price increases, mining becomes profitable, competition increases bringing down the profitability, likewise in reverse. So yes, you need money to mine, but whatever you mine, you pretty much have to turn around and sell it right away to cover your costs and keep a small profit.

That's exactly what I meant with "all crypto holders pay for it": in the state of equilibrium of costs and rewards, the huge costs are effectively paid by devaluing existing crypto holdings and via transaction costs. Is that good for crypto holders? No way! It's also not too good for miners of course, as they are in it for profit, not for rewards equaling costs.

But fortunately for the miners, crypto mining is rarely in that state of equilibrium. In reality, mining does allow for a hefty profit margin to be reaped most of the time. Ask the miners if you don't believe me, they're not exactly used to just making "small profits". And who pays for that profit margin? Crypto holders and those making transactions with it - again!

However you want to look at it, this coin looks crappy from both sides. Unless you're a miner.

Re: Cryptocurrency Blockchains Don’t Need to Be Energy Intensive

#82

Post by tromp »

Glench wrote: post #62

Haven't seen Chia mentioned in this thread and it was only briefly mentioned in the article — Proof of Space/Time seems to have the same security guarantees as Bitcoin without any of the electricity usage. It uses extra hard drive space but a recent report confirmed that a lot of that is using underutilized existing space, not space from new drives: https://www.idc.com/getdoc.jsp?containerId=US47836321 Chia's on-chai…

> seems to have the same security guarantees as Bitcoin

It doesn't though. While the PoW in a block commits to all its transactions, POST cannot and does not. Instead the winning farmer separately commits to the transactions with a signature. Which means that a collusion of all recent winning farmers can rewrite tx history at zero cost. Which is not possible in PoW.

Re: Cryptocurrency Blockchains Don’t Need to Be Energy Intensive

#84

Post by humperdink »

rawtxapp wrote: post #77
norswap wrote: post #71

Earlier quoted context omitted.

PoW also codifies "rich gets richer" - mining begets return on invested capital in exactly the same way that PoS does. In fact, arguably PoW is worse, because it has economies of scale that PoS does not have, so the rich truly do have an edge in PoW.

A PoW miner has to spend to cover their costs, a staker doesn't have any cost to cover, providing a cryptographic signature requires no energy on an ongoing basis, just an initial investment. PoW requires constant investment or you'll be left behind.

I wish there would be more debate about the equity of a cryptocurrency amongst the tech community. Why should the least well off in society be part of a crypto-coin whose supply has been given to early adopters and insiders? Ultimately the social compact of the economy you create will involve everyone, so we should design a coin that solves hard problems, not just narrowly defined ones that conveniently benefit a narrow minority.

Re: Cryptocurrency Blockchains Don’t Need to Be Energy Intensive

#85

Post by Slartie »

rawtxapp wrote: post #77
norswap wrote: post #71

Earlier quoted context omitted.

PoW also codifies "rich gets richer" - mining begets return on invested capital in exactly the same way that PoS does. In fact, arguably PoW is worse, because it has economies of scale that PoS does not have, so the rich truly do have an edge in PoW.

A PoW miner has to spend to cover their costs, a staker doesn't have any cost to cover, providing a cryptographic signature requires no energy on an ongoing basis, just an initial investment. PoW requires constant investment or you'll be left behind.

> A PoW miner has to spend to cover their costs, a staker doesn't have any cost to cover, providing a cryptographic signature requires no energy on an ongoing basis, just an initial investment.

And that is great news for crypto holders, cause that means PoS rewards can be way smaller than PoW rewards, which means less devaluation of existing coins and lower transaction fees!

Re: Cryptocurrency Blockchains Don’t Need to Be Energy Intensive

#86

Post by woah »

Negitivefrags wrote: post #8

I'm not really convinced. Proof of Stake has a startup issue that Proof of Work doesn't have. If you want to have your coin begin as proof of stake you have to have some mechanism for how the initial coins are distributed and that method is usually going to involve the creators giving themselves a lot of coins. A lot of crypto projects have all sorts of ways of obfuscating this or claiming that the intial coins will…

Didn’t Satoshi premine a large number of coins?

Re: Cryptocurrency Blockchains Don’t Need to Be Energy Intensive

#88

Post by erdos4d »

floatboth wrote: post #39

No matter how many non-PoW shitcoins you make, the main one (BTC) is not going to change and remains the dominant one . You can't solve the problem by creating more shitcoins, only by crashing the whole field into the ground.

This is only because crypto is still a curiosity. Once a coin gains enough mass adoption to actually function as digital cash by normal people, it will leave Bitcoin in the dust. My bet is on Monero for that, but whether I am right or not, I'm 100% certain that coin won't be Bitcoin.

Re: Cryptocurrency Blockchains Don’t Need to Be Energy Intensive

#89

Post by yaa_minu »

Retric wrote: post #56
atweiden wrote: post #55

Earlier quoted context omitted.

If transactional demand were the only useful adoption metric for money, where would that leave gold? The most important factor in a particular asset’s “adoption” as currency is its propensity to act as the unit of account for international settlement between nation-states.

Gold has more transactions per day than all crypto coins combined. In terms of value it’s moving ~200 billion dollars per day in exchanges.

Exchange transactions and on-chain transactions are not the same, no?

Re: Cryptocurrency Blockchains Don’t Need to Be Energy Intensive

#90

Post by rawtxapp »

Slartie wrote: post #85
rawtxapp wrote: post #77

Earlier quoted context omitted.

A PoW miner has to spend to cover their costs, a staker doesn't have any cost to cover, providing a cryptographic signature requires no energy on an ongoing basis, just an initial investment. PoW requires constant investment or you'll be left behind.

> A PoW miner has to spend to cover their costs, a staker doesn't have any cost to cover, providing a cryptographic signature requires no energy on an ongoing basis, just an initial investment. And that is great news for crypto holders, cause that means PoS rewards can be way smaller than PoW rewards, which means less devaluation of existing coins and lower transaction fees!

It's good news for current holders with large holdings, it's bad news for new people coming into the system which is why I said it makes it exclusionary over time.
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