How Monero’s proof of work works

Proof of waste. I wonder for the base price of the currency what the cost of energy and environment are to create it.

> most dollars are created not by the government, or even the Federal Reserve, but by private banks, via a mechanism which I will not pretend to fully understand

Fractional reserve banking. Basically, bankers start getting very anxious when they see the masses of people depositing mountains of cash into them. They look at the cash hoard they have suddenly amassed and think, we can't just leave this pile of cash here doing nothing, we have to efficiently allocate all of this capital. So they lend it out to people who need cash, charge interest and pay account holders their yields.

Deposit $100. Bank loans out $90, and $10 sits in its reserves. Your account still says $100, even though the bank is now leveraged against loans to third parties. Guy who took the $90 loan pays some bills, and that $90 ends up deposited right back into the same bank. So it keeps $9 and loans out $81. There is now $100 + $90 + $81 in circulation, but only that $100 is real money, the rest are all made up. They only become real when loans are repaid. So, the $81 gets spent, deposited back into the bank, and so on, and so forth, expanding the money supply like a fractal until the amounts become too infinitesimal to track. Thus $1,000 easily becomes $100,000 literally overnight. Government could run its presses 24/7 and it would not be able to outcompete the banks when it comes to inflating the money supply.

Banks are the financial call stacks of society. Better hope there aren't any exceptions (defaults), or the whole thing unwinds and comes crashing down.

It's like a society wide financial version of ISP oversubscription. The assumption is nobody is going to stress test the system by saturating the link 24/7. Everything breaks the second the invariants are violated. Banks similarly assume that not everybody will need all of their dollars immediately, which lets them "efficiently allocate" all of those dollars. Entire government systems exist just to bail out the banks where this assumption fails to be load bearing.

In terms of software that genuinely fascinates me Monero would have to be up there (along with Postgres, ZFS and OpenBSD). It's in my opinion one of the only (but probably the only) cryptos that has actually held true in terms of its principles of privacy (which was a perceived principle of crypto by users) and mass ability to mine and not be dominated by ASICs.

I've since taken to running a non-public Monero node, which will become public when I can ensure my network security as it's being run from my home.

In saying that, there is a lot of concern around the new Carrot changes. To preface, I don't understand it enough to have an opinion either way, but a good chunk of the vocal user base seems to be worried that making “optional” view keys show both incoming and outgoing transactions will force the hand of the remaining exchanges, and be a condition of adoption of new exchanges to support Monero.

I haven't really seen a dumbed down explanation from the core Monero team as to exactly what the change looks like, and what the theoretical implications could be. It would be nice if Monero had more accessible PR for non-technical users to encourage adoption and squash FUD when it arises or at least acknowledge it from a top level in a blog post or something so that the already hyper-paranoid user base doesn't unnecessarily drive a mass anti-Monero campaign.

No meaningful benefit? Tell that to the people in emerging economies who now have access to digital US dollars.

Bitso processes 10% of US-MX remittances. 12% of people in Argentina use stablecoins. The shift is happening in real time.

>held true in terms of its principles of privacy (which was a perceived principle of crypto by users)

Crypto wasnt so much straight up privacy, but like high information / low revelation. The idea was to create an economic system where you the individual could have relative anonymity while being able to go online and audit the bank in detail. Not a criticism of you enjoying monero I just think this got lost somewhere.

I think Ethereum is probably going to strike the closest balance eventually, but it depends on a lot of factors.