Cryptocurrency Blockchains Don’t Need to Be Energy Intensive • Hacker News Board

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

#211

Post by danbruc » Mon, Jul 05, 2021, 6:40 PM UTC

jl2718 wrote: post #200

danbruc wrote: post #45

The fundamental problem that needs to be solved is voting power allocation. You have a group of people that wants to use a cryptocurrency and you want to allow everyone to voice his opinion about what transaction are valid and should be recorded and which are not so that you can determine the consensus. Your first problem is to decide who gets to vote. Does everyone get to vote or do you have to participate in the sy…

> For the example of proof of work the assumption is that every human can own and dedicate about the same amount of computing power. I'm not aware of anybody proposing that bitcoin would be a democratic protocol. There were other proposals that were intended to be democratic, but this was explicitly rejected for bitcoin. You might say that bitcoin was intended to be computationally secure against democracy itself. >…

I'm not aware of anybody proposing that bitcoin would be a democratic protocol.

Bitcoin is intended to not have trusted parties. If the mining is done by relatively few parties they become trusted parties. This would not have been an issue if the mining power had remained more evenly spread across all users but it got concentrated in the hands of relatively few.

[...] but this was explicitly rejected for bitcoin.

How was this explicitly rejected? I think the original paper does not really address this but I always assumed that the original intention was to have a large fraction of Bitcoin users also be miners and the concentration that happened was an unforseen development. But maybe that is just my personal interpretation but I maintain that this is at least to some extend in conflict with Bitcoin wanting to be trustless.

Not really. It's on the basis of cost.

No, the miners already have all the hashing power. I have to trust them to include my transactions in blocks and not ignore them, I have to trust them not to undo transactions. If the Bitcoin mining power was more evenly spread among Bitcoin users this would be less of an issue than in the current situation where all the mining power is concentrated in about ten mining pools. Sure, pools are not miners but if the reported numbers are correct than there were at least in the past mining farms owning several percent of the mining power.

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

#212

Post by t4t5 » Mon, Jul 05, 2021, 6:40 PM UTC

Black101 wrote: post #108

rawtxapp wrote: post #67

Earlier quoted context omitted.

PoS is a pretty broken system imo, it essentially codefies "rich gets richer" into the protocol. The biggest holders now control both the supply on the exchanges and the protocol itself. It creates all kinds of weird issues (for example, what happens if an attacker gets a hold of a significant percentage of the coins, now they also have a great control over the network). Stakers don't have the same pressure to sell t…

> PoS is a pretty broken system imo You could have a PoS currency that would initially distribute all coins evenly across the globe (that would be a really cool experiment). But yeah I don't like PoS either.

The only way this could work would be to force people to register their wallet address using some kind of government ID to prove that they are unique. But at that point you’re back to having created a completely centralised system.

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

#213

Post by SheinhardtWigCo » Mon, Jul 05, 2021, 6:53 PM UTC

jl2718 wrote: post #202

SheinhardtWigCo wrote: post #186

Earlier quoted context omitted.

Algorand solves this by using a verifiable random function, with the output weighted according to the user's stake. It's quite elegant. Paper: https://eprint.iacr.org/2018/377

Which is ... proof of stake. Literally vote allocation by wealth.

Isn't that desirable for a cryptocurrency?

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

#214

Post by shawnz » Mon, Jul 05, 2021, 6:59 PM UTC

m3kw9 wrote: post #201

shawnz wrote: post #132

Earlier quoted context omitted.

> You equate running a complicated, deeply competitive business with highly variable yields (can even be negative) with just parking money, and call both "doing nothing"? No, what I am really saying is that PoW mining and PoS staking aren't so dramatically different in complexity like you are saying. They are actually both complicated businesses with variable yields. The only difference is that with PoW, the benchmar…

Staking takes a few clicks, mining require physical setup, maintenance, rent, buy, to me that’s orders of magnitude more steps than staking.

Staking requires all those things too. Or you could pay a service to do it for you, but that applies to PoW mining as well.

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

#215

Post by dandanua » Mon, Jul 05, 2021, 7:05 PM UTC

SheinhardtWigCo wrote: post #190

dandanua wrote: post #46

Earlier quoted context omitted.

You don't need PoW mining or any sophisticated consensus at all if you use tamper-proof hardware. Here is my proposal of using FIDO keys https://news.ycombinator.com/item?id=26214175

> tamper-proof hardware Does not exist. FIDO keys are merely tamper resistant.

There is a market of secure microchips and it's evolving. Of course, there are no 100% secure solutions, but we're heading towards practical security. There are no full-proof solutions for anything in life. Even Bitcoin is not full-proof. You just need to capture coordinators of a couple of mining pools. I believe collecting those in China will be enough to gain 51% control.

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

#216

Post by danbruc » Mon, Jul 05, 2021, 7:13 PM UTC

SheinhardtWigCo wrote: post #213

jl2718 wrote: post #202

Earlier quoted context omitted.

Which is ... proof of stake. Literally vote allocation by wealth.

Isn't that desirable for a cryptocurrency?

As long as you want the wealthy to make the decisions while getting more wealthy in the process, sure.

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

#217

Post by fleddr » Mon, Jul 05, 2021, 7:17 PM UTC

lisper wrote: post #146

fleddr wrote: post #125

Earlier quoted context omitted.

Because the protocol is software and only dictates rules inside its sphere of influence. It's a good rule that owning lots of coins does not automatically give you even more coins.

That rule does you no good if the net effect of the interplay of the rules with the rest of reality is that having more coins gives you more coins. This will be the case as long as coins can be used to purchase the means of production.

Having more coins as in Bitcoin does not give you more Bitcoin, but you're obviously right it buys more non-Bitcoin goods and services.

Bitcoin's premise is scarcity and software-enforced rules that are equal to all. It isn't going to "fairly" distribute existing capital, that should go without saying.

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

#218

Post by fleddr » Mon, Jul 05, 2021, 7:27 PM UTC

sktrdie wrote: post #134

fleddr wrote: post #93

Earlier quoted context omitted.

No, they are far from the same. It's true that BTC mining is capital intensive, yet it is highly competitive and risky, and most miners get a decent profit, yet need to sell the vast majority of mined coins to run their operation. Miners can never move on some parabolic increase of wealth as the very protocol itself prevents this. Rather, we should look at holders. Bitcoin is fair in the sense that it does not have r…

But with 1,000 BTC you can get more coins from within the system by buying lots of rigs with those 1,000 coins & hence mine more coins. So PoS and PoW are quite similar in that regard. I think the problem with PoS is not "rich get richer" but the lack of fair redestribution. In PoW miners are economically forced to sell their mined coins to pay for energy bills. This redistribution is fair as it happens on the free m…

I wouldn't call that similar. Mining new Bitcoin is a very competitive, risky and intense business practice. Price swings greatly affect operations and there's always regulation around the corner.

Whereas staking is more like bringing fiat to the bank and collecting interest for doing nothing at all.

Still, you do have a point in the sense that if you're as wealthy as having 1,000 BTC, you have ample ways to further grow wealth. You could sell all BTC, go into real estate, take profit and buy back BTC cheaper. There's a million ways to grow your portfolio.

It's just that Bitcoin doesn't give you more Bitcoin based on wealth. Most Bitcoin held is not held by miners.

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

#219

Post by mattwilsonn888 » Mon, Jul 05, 2021, 8:10 PM UTC

nootropicat wrote: post #159

rawtxapp wrote: post #67

Earlier quoted context omitted.

PoS is a pretty broken system imo, it essentially codefies "rich gets richer" into the protocol. The biggest holders now control both the supply on the exchanges and the protocol itself. It creates all kinds of weird issues (for example, what happens if an attacker gets a hold of a significant percentage of the coins, now they also have a great control over the network). Stakers don't have the same pressure to sell t…

PoW empirically isn't secure. Attacks already happened, most notably on ethereum classic. If it was possible to rent enough hashpower all PoW blockchains would already be attacked because daily mining rewards are trivial compared to potential gains. The actual security relies on obfuscated proof of stake - how hard it is to attain enough mining hardware. Even so, attacking bitcoin is relatively cheap - even starting…

You are myopic in your comparison. "Most of the stake isn't for sale." Well if we are fantasizing about huge pools of capital shelling out the money necessary to get enough mining equipment for a majority hash rate, there is no reason the same pool of capital can't purchase stake at a premium. Do you think every holder is going avoid selling out to a high premium due to loyalty for the underlying protocl? No, especially when selling means they are no longer exposed to the risk they create by doing so; rational actors will sell to the highest bidder, who may be anonymous. It's exactly the same issue.

Further more you're quip about Bitcoin being unable to scale its security past use as a speculation asset, which as I point out above applies to any PoS asset (perhaps even more so), is also context deficient. Bitcoin's value will increase when mining is more decentralized (which is heuristically determinable enough to take the risk), which will increase mining decentralization. Many large mining setups today could have 51% attacked Bitcoin through most of its history, but they weren't around then. Bitcoin's mining grows just as the price grows, when people are willing to believe in its market value.

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

#220

Post by mattwilsonn888 » Mon, Jul 05, 2021, 8:19 PM UTC

Yizahi wrote: post #20

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…

This is actually quite fun to say out loud - "here is a revolutionary trustless system of currency, but you must trust a group of anonymous developers in the non-extradition offshore not to screw you with premine"

Have you never used a block explorer, or do you just not understand how blockchain works? I fully agree there are weird insider deals based on allocations and premines - but that's all fully auditable, and if it isn't, that says all you need to know. You are applying the flaws of the worst examples across the whole technology AKA a strawman. Maybe you're just salty you could never take the risk required to make money on new tech and don't want to think of yourself as a Luddite.