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Kazakhstan to restrict crypto miners amid power shortages

eurasianet.org

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Re: Kazakhstan to restrict crypto miners amid power shortages

#311

Post by mr_spothawk »

Fiahil wrote: post #93
cletus wrote: post #57

And so it begins. In the developed world in particular, we're seeing the move away from fossil-fuel power. This is good but currently relatively expensive. Crypto mining is starting to have very real impact on the ability of other people to live. It is adversely and disproportionately affecting poor people (who pay a greater share of their income for power). And at best crypto provides extremely limited utility for s…

I'm a bit of a crypto enthusiast, but I generally agree that crypto-mining suck too much power out of the grid for it's current utility level. However, your comment is a bit short-sighted and doesn't account for the switch of Proof-of-Work to Proof-of-Stake algorithms that is currently happening. PoS use A LOT less power and doesn't need extensive mining farms. See also: https://blog.ethereum.org/2021/05/18/country-p…

isn't the current virtual money system already a PoS system?

(i mean proof-of-stake, not the alternative inflammatory PoS)

Re: Kazakhstan to restrict crypto miners amid power shortages

#312

Post by oblio »

rfd4sgmk8u wrote: post #286
oblio wrote: post #199

Earlier quoted context omitted.

> Nah, I don't think it can be banned. At least not in the non-authoritarian parts of the world. Why can't it be banned? It's wasteful and closer to a Ponzi scheme than an actual currency. > Even if it is, they would need to break my fingers to prevent me running a Bitcoin node. And I will get the blocks via Satellite. If there was a credible threat, we would go somewhere it is not. That could be hard if many of the…

As someone who has been in this space a long time, I assure you I am idealistic in my positions. Hopelessly idealistic. What does Ban even mean? That it is illegal to run in places like the US? Very unlikely, and as more institutional money flows into it, it grows more unlikely. Some places are starting to put 401k/pension funds into it. Some places are raising it as legal tender. There is also that 1st amendment thi…

This discussion is worth revisiting in 10 years :-)

Re: Kazakhstan to restrict crypto miners amid power shortages

#313

Post by rfd4sgmk8u »

dlubarov wrote: post #307
cletus wrote: post #102

Earlier quoted context omitted.

This has been a popular defense for several years now. For awhile I too bought into it. But there are real questions about whether it can ever work and won't in fact be vulnerable to attack. The best evidence for this is that PoS hasn't happened despite years of talk about it.

> But there are real questions about whether it can ever work and won't in fact be vulnerable to attack. At this point PoS is quite prevalent among modern blockchains (Cosmos, Solana, NEAR, Algorand, Polygon, Cardano, ...). As far as I know, there have been no successful attacks based on PoS's theoretical weaknesses, like its reliance on weak subjectivity. Some PoS networks like NXT have been in production for nearly…

There have been several consensus failures from PoS, including the recent outage of Solana. One just needs to look at the Steem/Hive 'takeover' by Sun to see how political wars can form and threaten the security model in PoS world. Contrast with bcash incident of 2017.

A few years ago, I saw a Hybrid PoS/Work chain (a satoshi-client derivative coin) being attacked in real time, and totally hijacked. Ultimately it was a bug in the PoS logic that enabled it. I am very apprehensive about PoS even providing a fragment of the security. Chain takeovers are a real threat in PoS world. The attacker needs very little physical resources -- just know the right stakeholders. PoW need resources. PoW is trivial to verify and test. PoS advocates like to gloss over all the real world failures.

You may notice that during the China ban, Bitcoin worked pretty much as expected (with some slight block delays until difficulty adjusted). PoW works.

The other metric to observe is how many chain reorg's occur due to PoS. This is practically a non-event in large PoW chains like Bitcoin, today. In Turing complete chains like EVM chains, it might not be possible to reorder transactions with no-loss during reorgs as transactions are state dependent. PoS potentially destroys finality.

Re: Kazakhstan to restrict crypto miners amid power shortages

#314

Post by golergka »

oblio wrote: post #219
golergka wrote: post #42

Earlier quoted context omitted.

If only we had an open, decentralised mechanism to figure out what's a better use of a limited resource is. Oh wait. That's exactly what "cost" is.

Yup, I'm sure that every time we've let the market do its thing, nobody suffered. I don't really want to get into too much of what's very gross territory, but let's say that a long time ago a certain nation controlling another nation decided that the food from said controlled nation was economically most useful being sold somewhere else. The locals couldn't afford the "cost". I'll let you put 2 and 2 together for the…

> a certain nation controlling another nation decided that the food from said controlled nation was economically most useful being sold somewhere else.

> The locals couldn't afford the "cost".

That sounds like one of the many soviet famines, which happened exactly because there wasn't an open and free market for said food.

Re: Kazakhstan to restrict crypto miners amid power shortages

#315

Post by labster »

zherbert wrote: post #272
labster wrote: post #265

Earlier quoted context omitted.

Bitcoin mining uses up all of the efficiency gains from energy saving over the past decade, and more. Bitcoin incentivizes carbon production by keeping electricity demand artificially high, even dedicating entire coal power plants to a single mining location. Therefore, cryptocurrency has already guaranteed we will never have time to advance on the Kardashev scale.

That's preposterous, Bitcoin incentivizes production of whatever energy is cheapest . That does not necessarily mean fossil fuels, though it is often that those are cheaper. Hydro is a perfect example. A sizeable percentage of all Bitcoin mining is done with cheap hydro. Bitcoin will do the same for nuclear, making it cheap and plentiful.

How does Bitcoin incentivize cheap energy? It only incentivizes energy that has a marginal cost less than the Bitcoin it can produce. As long as human speculation outpaces finite resources, it makes economic sense to burn the most expensive, dijon fuels. This is true even if externalities are factored into energy prices, which they aren’t.

Re: Kazakhstan to restrict crypto miners amid power shortages

#316

Post by oblio »

golergka wrote: post #314
oblio wrote: post #219

Earlier quoted context omitted.

Yup, I'm sure that every time we've let the market do its thing, nobody suffered. I don't really want to get into too much of what's very gross territory, but let's say that a long time ago a certain nation controlling another nation decided that the food from said controlled nation was economically most useful being sold somewhere else. The locals couldn't afford the "cost". I'll let you put 2 and 2 together for the…

> a certain nation controlling another nation decided that the food from said controlled nation was economically most useful being sold somewhere else. > The locals couldn't afford the "cost". That sounds like one of the many soviet famines, which happened exactly because there wasn't an open and free market for said food.

Ireland. It was Ireland.

Re: Kazakhstan to restrict crypto miners amid power shortages

#317

Post by u2c4m6 »

politician wrote: post #226
oblio wrote: post #211

Earlier quoted context omitted.

It's not hypocrisy. We need computers for a lot of solid, real life uses. We don't need cryptocurrencies for almost anything being peddled. They're supposed to be decentralized, but you can't really use them that way in 99% of situations. They're supposed to be currencies and instead they're vehicles for speculation. Etc. I think their slogan should be: "You don't really need cryptocurrencies for that".

PoW crypocurrencies are global communications systems that offer nonrepudiation, instant settlement, and finality; a subset additionally offer privacy. It's valuable to people who need those guarantees. There are speculators in every market.

What crypto currency offers privacy?

Re: Kazakhstan to restrict crypto miners amid power shortages

#318

Post by dlubarov »

rfd4sgmk8u wrote: post #313
dlubarov wrote: post #307

Earlier quoted context omitted.

> But there are real questions about whether it can ever work and won't in fact be vulnerable to attack. At this point PoS is quite prevalent among modern blockchains (Cosmos, Solana, NEAR, Algorand, Polygon, Cardano, ...). As far as I know, there have been no successful attacks based on PoS's theoretical weaknesses, like its reliance on weak subjectivity. Some PoS networks like NXT have been in production for nearly…

There have been several consensus failures from PoS, including the recent outage of Solana. One just needs to look at the Steem/Hive 'takeover' by Sun to see how political wars can form and threaten the security model in PoS world. Contrast with bcash incident of 2017. A few years ago, I saw a Hybrid PoS/Work chain (a satoshi-client derivative coin) being attacked in real time, and totally hijacked. Ultimately it was…

> the recent outage of Solana

Do you mean [1]? It sounds like the consensus issues there were related to Solana's unusual PoH model. Validators being "unable to process all the proposed forks" would never happen in a BFT PoS model, like Tendermint etc, since forks cannot occur (under a 2/3 honesty assumption).

> Ultimately it was a bug in the PoS logic that enabled it.

To state the obvious, PoW chains can have bugs too. It sounds like you were just looking at a niche project that didn't have high standards for engineering and audits.

> PoS advocates like to gloss over all the real world failures.

PoS and PoW chains have both had plenty of incidents, but you haven't really pointed out any PoS incidents that were caused by weaknesses inherent in the PoS security model.

> Bitcoin worked pretty much as expected

Bitcoin has been around the longest, has a relatively small feature set, and rarely changes. One would expect such a chain to be very stable regardless of PoW/PoS.

> The other metric to observe is how many chain reorg's occur due to PoS.

Reorgs can't occur in BFT PoS chains (under a 2/3 honesty assumption).

[1] https://solana.com/news/9-14-network-outage-initial-overview

Re: Kazakhstan to restrict crypto miners amid power shortages

#319

Post by ilammy »

L33tCrown wrote: post #276
rfd4sgmk8u wrote: post #109

Earlier quoted context omitted.

No, never. Bitcoin will be PoW forever. PoS is and will never have the same security properties of PoW. Its bad for decentralization, its bad for censorship resistance, and its bad for the free world.

Actually PoW accentuates the concentration of miners, while in Ethereum 2 you are limited to a few mining machine, thus distributing more equally the mining power.

Bitcoin miners per se do not control Bitcoin network. They are the backbone, but the nodes ultimately decide whether they include a mined block or not. Validating blocks is way cheaper than mining them. Expensive mining process only ensures that you can't easily flood the network with bogus blocks.

Re: Kazakhstan to restrict crypto miners amid power shortages

#320

Post by ilammy »

TomSwirly wrote: post #271
adventured wrote: post #94

Earlier quoted context omitted.

> And at best crypto provides extremely limited utility for society. Whenever you sell it, if you generated a profit on that sale, you are going to pay taxes on it (at least in the US). That's a real value for society. Can it ever be enough to offset the added squeeze on the electricity grid (which we really don't need right now, with EVs coming on and our grid in serious need of upgrade/expansion)? Someone will have…

Crypto transactions cannot create or destroy fiat currency. If you buy and hold cryptocurrency, at no time will it produce "dividends" in fiat currency, or physical objects like cell phones. So if you make money by selling some cryptocoin, that is _entirely_ because someone else purchased it at a greater price than you did. Their expectation is that someone else will later buy it at a greater price from them, and tha…

> at no time will it produce "dividends" in fiat currency, or physical objects like cell phones

Why it has to be physical? One could use cryptocurrencies to pay for virtual things on virtual internet, which are nevertheless thought to be meaningful.

Like, fiat currencies exist as a way of paying taxes to your government and also you can exchange them for goods and services.

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