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In defense of cryptocurrency

blog.cryptographyengineering.com

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Re: In defense of cryptocurrency

#381

Post by ninkendo »

once_inc wrote: post #371
ninkendo wrote: post #353

Earlier quoted context omitted.

The base layer is melting the planet, for one thing.

Bitcoin mining isn't melting the planet. It's not even using more energy than Christmas lights or wash dryers. The comparisons made with [insert random country here] is dumb, because any worldwide phenomenon has a large chance to use more energy than [insert same random country here]. Even if the base layer of Bitcoin is using energy, one can argue that the functionality it offers (trustless, borderless, permissionle…

But we’ve already established that we can do all that without the energy costs if we end up needing a trusted authority anyway. There’s zero need for proof of work if you’re going to trust a central authority to validate the transaction history. What’s the point of such an extremely costly base layer?

Re: In defense of cryptocurrency

#382

Post by omh »

once_inc wrote: post #371
ninkendo wrote: post #353

Earlier quoted context omitted.

The base layer is melting the planet, for one thing.

Bitcoin mining isn't melting the planet. It's not even using more energy than Christmas lights or wash dryers. The comparisons made with [insert random country here] is dumb, because any worldwide phenomenon has a large chance to use more energy than [insert same random country here]. Even if the base layer of Bitcoin is using energy, one can argue that the functionality it offers (trustless, borderless, permissionle…

> It's not even using more energy than Christmas lights or wash dryers

I can't come up with any reasonable measure by which Christmas lights use more energy than Bitcoin mining. The reports that suggest this seem to extrapolate US figures across the world, which looks unrealistic. And they're old enough that they don't account for the switch to LEDs.

Even if a billion households had 50 strings of LED lights each and kept them lit 24/7 for all of December, they'd still use less energy than the annual usage of Bitcoin.

Re: In defense of cryptocurrency

#383

Post by valw »

once_inc wrote: post #347
zoigdev wrote: post #319

I did not see any real pro crypto argument in this text. Nothing is really proven in practice and everything is in ideas. Meanwhile scammers are taking money from enthusiasts and existing blockchains are burning up a huge amount of energy.

I defense of those existing blockchains: the annual worldwide energy usage of blockchain technology is roughly equal to the annual US energy waste from machines plugged in while in standby mode. It is also significantly lower than the annual worldwide usage of Christmas lights, and wash dryers.

> the annual worldwide energy usage of blockchain technology is roughly equal to the annual US energy waste from machines plugged in while in standby mode. It is also significantly lower than the annual worldwide usage of Christmas lights, and wash dryers.

... and it benefits much, much fewer people.

That's analogous to the pro-air-travel disinformation argument: "air travel is only 2% of CO2 emissions". It is only so because air travel is only adopted by a small minority of people: that doesn't stop it from being insanely carbon-intensive.

Re: In defense of cryptocurrency

#384

Post by danuker »

AlexandrB wrote: post #46

I find the last section of this article particularly ironic considering cryptocurrency is one of the biggest steps back for technological efficiency I've seen in my lifetime. No, credit card fees have not improved in 30 years, but at least the energy required to process those transactions hasn't increased by orders of magnitude in the same time period.

So what? If the pollution is the problem, government should tax the externalities through a Pigovian tax.

In the EU we have a functioning carbon cap, and as such mining is less profitable here.

https://ec.europa.eu/clima/eu-action/eu-emissions-trading-sy...

But the US will hear none of it:

https://www.youtube.com/watch?v=MondapIjAAM

Re: In defense of cryptocurrency

#385

Post by alalv »

Volker_W wrote: post #379
evouga wrote: post #152

This article doesn’t address the main objection I have about the practical value of cryptocurrency, namely, why I can’t take such an application, replace the distributed ledger with a SQL database, and get a solution that’s better in every way. As soon as you have a trusted central authority (monitoring and reversing payment transactions, interacting with government agencies to execute real estate transaction, etc.)…

Are you aware of any project using a SQL database that allows someone to purchase legal porn or donate to legal far right organizations? Mastercard, Visa and Paypal lock such accounts. SEPA (luckily) does not. This is the only advantage of bitcoin I see.

Do Visa and Mastercard really block porn purchase in the US?

Re: In defense of cryptocurrency

#386

Post by hiq »

To rephrase what has already been pointed out in other comments: this post focuses on 1) drawbacks of cryptocurrencies as solvable problems that could disappear thanks to X and Y, instead of what 2) essential benefits they supposedly (could) offer.

1) is much easier to address (at least in vague and aspirational terms) but rather uninteresting in the absence of clear examples of 2).

Re: In defense of cryptocurrency

#387

Post by dmitriid »

pcthrowaway wrote: post #370
lbriner wrote: post #322

Earlier quoted context omitted.

I'm not an expert but I think this is what the original letter authors objected to. If you build these mechanisms on top of a blockchain which is inherently baked in stone, then there is no point in having the blockchain be so strict. In other words, if you allow an organisation to change things like refund you, then they might as well just manage their own leger like they do at the minute.

There's a benefit to building it on the blockchain. I can look at the USDC contracts and see that privileged users have the ability to freeze the USDC in my account. I can look at the DAI contracts and see that they do not. Good luck getting visibility into the back-end processes of web2 applications. Even if they publish the source on github, there's no way to verify what they're running

> Good luck getting visibility into the back-end processes of web2 applications

"Smart" "contract" are as invisible to the average user as the backends of web2 applications (or any other applications for that matter). The authors of these "contracts" routinely create buggy contracts because the code is complex [1]

But sure. You can definitely look at impenetrable code written in an esoteric language for an equally esoteric VM and see exactly what it does.

[1] just an example, https://web3isgoinggreat.com/?id=akudreams-earns-34-million-...

Re: In defense of cryptocurrency

#388

Post by dmitriid »

cy_overlord wrote: post #342
evouga wrote: post #152

This article doesn’t address the main objection I have about the practical value of cryptocurrency, namely, why I can’t take such an application, replace the distributed ledger with a SQL database, and get a solution that’s better in every way. As soon as you have a trusted central authority (monitoring and reversing payment transactions, interacting with government agencies to execute real estate transaction, etc.)…

"I suspect that legacy industry and regulators have smothered two generations of technological improvement, largely (I suspect) by building a (mostly) closed and permissioned financial system." It's technically possible to replace any blockchain with a database but where are you going to host it and who is the trusted central authority? Blockchain might not the solution but it shows us an alternative to trusting some…

> instead we trust code that is emotionless, non-judgemental and consistent.

Yes. Because that code just appeared out of nowhere, and it's perfect, and devoid of issues.

Re: In defense of cryptocurrency

#389

Post by LightG »

once_inc wrote: post #349
JackC wrote: post #98

"transaction reversibility is not about the ledger, but rather about the transaction rules that a currency uses. A reversible currency requires that someone anoint this trusted party (or trusted parties) and that they use their powers to freeze/burn/transact currency in ways that are at odds with the recorded owners’ intentions. And indeed, this is a capability that many tokens now possess" I think this is arguing th…

Bitcoin is a base-layer solution. Do you not want to transact on the base layer because of lack of reversibility or fees? Move to a higher layer solution that sacrifices some characteristic of Bitcoin to enable something new. Want to do lots of (micro)transactions? Use LN where this is made possible by sacrificing the ability to be secure offline. Do you want to use DeFi-like solutions with smart contracts? Use RSK.…

Maybe the problems is that I cannot see myself trusting anything more than the base layer.

So, the only use case for Bitcoin is as an optional gold alternative.

Re: In defense of cryptocurrency

#390

Post by lumannnn »

DebtDeflation wrote: post #359
astoor wrote: post #287

Earlier quoted context omitted.

Transaction irreversability is the whole point of the "peer to peer electronic cash system": "Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments... cutting off the possibility for small casual transactions ... What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two…

>It is now used primarily for large transactions No it's not. It's now used primarily as a vehicle for speculation.

You probably should look at different numbers than just the dollar price.

Number of nodes is rising, number of wallets is rising, number of hash-power is rising.

Also, please look into the "Lightning Network". It's the second layer on top of Bitcoin and that's where the whole ecosystem scales (in terms of numbers of transactions per second). Cheap, scalable and fast transactions.

Adoption is happening in many places.

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