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'Minting' electronic cash (1999)

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Re: 'Minting' electronic cash (1999)

#21

Post by heed »

arcticbull wrote: post #12
_Microft wrote: post #9

Earlier quoted context omitted.

Believe it or not but there are people who think that "Bitcoin is a battery" because it can turn energy into money (and "money is easily converted to energy again", Umm... STEM education, we need to have a word because it looks like you are not doing your job properly... ). Here is an example: https://twitter.com/balajis/status/1351214402167578626

Balaji's take is easily the worst, least coherent take on proof of work to date. An absolute carnival of ignorance motivated by self-interest. The lengths people will do to defend the indefensible because it'll make them rich continues to disappoint.

I agree it’s a bad take, but the idea in the article he shared is, in my opinion, reasonable and doesn’t talk about BTC being a battery.

It talks about crypto mining as a last resort to utilizing excess energy produced by “green” sources (wind turbine), ie energy that cannot be sold to the grid or stored in batteries.

Re: 'Minting' electronic cash (1999)

#22

Post by capableweb »

helen___keller wrote: post #20
wyager wrote: post #18

Earlier quoted context omitted.

The disadvantage compared to Bitcoin is that it’s hardly meaningfully different from using Paypal or something.

How do you figure?

In short, the suggested method by Chaum requires a trusted 3rd party (bank). The topmost invention of Bitcoin is that it requires no trusted 3rd party.

Re: 'Minting' electronic cash (1999)

#23

Post by ziml77 »

_Microft wrote: post #9
politician wrote: post #7

Earlier quoted context omitted.

Or recycling. "We recycle electrons into coins!"

Believe it or not but there are people who think that "Bitcoin is a battery" because it can turn energy into money (and "money is easily converted to energy again", Umm... STEM education, we need to have a word because it looks like you are not doing your job properly... ). Here is an example: https://twitter.com/balajis/status/1351214402167578626

These people will justify bitcoin in such insane ways. I see one guy doesn't agree that it's a battery but still thinks mining is a good thing

> Bitcoin let’s anyone with excess energy manufacture sound money. This is a better option than wasting the energy.

There are times where the grid is producing more energy than is being demanded but it's not like it's that difference that's being used to mine. I also don't get why that energy would need to be turned into money. Simply creating new coins isn't useful work (validating transactions is, but it's a horribly inefficient way to do that)

Re: 'Minting' electronic cash (1999)

#24

Post by 1e-9 »

capableweb wrote: post #22
helen___keller wrote: post #20

Earlier quoted context omitted.

How do you figure?

In short, the suggested method by Chaum requires a trusted 3rd party (bank). The topmost invention of Bitcoin is that it requires no trusted 3rd party.

> it requires no trusted 3rd party

Or, at least not the same 3rd parties. Instead, it requires trusting a much larger host of other 3rd parties, many of which are anonymous, and likely none of which will provide recourse if you lose your bitcoin due to their failure or malicious intent.[1]

Bitcoin represents a shifting of trust; not an elimination of trust. That's not to say there is no value. It's just that there are significant risks involving trust that are overlooked by most holders.

[1] https://www.schneier.com/blog/archives/2019/02/blockchain_an...

Re: 'Minting' electronic cash (1999)

#25

Post by shawnz »

ziml77 wrote: post #23
_Microft wrote: post #9

Earlier quoted context omitted.

Believe it or not but there are people who think that "Bitcoin is a battery" because it can turn energy into money (and "money is easily converted to energy again", Umm... STEM education, we need to have a word because it looks like you are not doing your job properly... ). Here is an example: https://twitter.com/balajis/status/1351214402167578626

These people will justify bitcoin in such insane ways. I see one guy doesn't agree that it's a battery but still thinks mining is a good thing > Bitcoin let’s anyone with excess energy manufacture sound money. This is a better option than wasting the energy. There are times where the grid is producing more energy than is being demanded but it's not like it's that difference that's being used to mine. I also don't get…

> it's a horribly inefficient way to do that

It's not "inefficient", relatively speaking, if there's no more efficient way to do it while still achieving the same risk profile.

Re: 'Minting' electronic cash (1999)

#26

Post by shawnz »

1e-9 wrote: post #24
capableweb wrote: post #22

Earlier quoted context omitted.

In short, the suggested method by Chaum requires a trusted 3rd party (bank). The topmost invention of Bitcoin is that it requires no trusted 3rd party.

> it requires no trusted 3rd party Or, at least not the same 3rd parties. Instead, it requires trusting a much larger host of other 3rd parties, many of which are anonymous, and likely none of which will provide recourse if you lose your bitcoin due to their failure or malicious intent.[1] Bitcoin represents a shifting of trust; not an elimination of trust. That's not to say there is no value. It's just that there ar…

I wouldn't say those risks are overlooked by most holders, rather that risk profile is exactly the reason why anyone would want to use cryptocurrency to begin with.

Perhaps some hype artists would claim otherwise, but they shouldn't be defining how you view the technology itself.

Re: 'Minting' electronic cash (1999)

#27

Post by rogueSkib »

1e-9 wrote: post #24
capableweb wrote: post #22

Earlier quoted context omitted.

In short, the suggested method by Chaum requires a trusted 3rd party (bank). The topmost invention of Bitcoin is that it requires no trusted 3rd party.

> it requires no trusted 3rd party Or, at least not the same 3rd parties. Instead, it requires trusting a much larger host of other 3rd parties, many of which are anonymous, and likely none of which will provide recourse if you lose your bitcoin due to their failure or malicious intent.[1] Bitcoin represents a shifting of trust; not an elimination of trust. That's not to say there is no value. It's just that there ar…

I don't believe this is accurate.

As trust is spread across the network to an increasing number of people running nodes, the trust assigned to any individual participant approaches zero.

This can be observed in the resilience of the network, as it self-heals against any attacker or alternative fork from the consensus.

Bitcoin has democratically ossified into a store-of-value with absolute scarcity, deterministic monetary policy, and a priority on decentralization. It's extremely unlikely that those attributes will be compromised.

Re: 'Minting' electronic cash (1999)

#28

Post by capableweb »

bsamuels wrote: post #13
madars wrote: post #6

Earlier quoted context omitted.

Minting implies exercising seigniorage authority, whereas mining physical commodities is naturally distributed (no central authority). The latter term is much more appropriate to describe issuance-via-PoW.

Miners technically do have seigniorage authority since they can collectively decide to change the underlying cryptocurrency. Miner's de facto control of the network is a huge problem. It's why Bitcoin will never solve its energy use issue, and why Ethereum set up a "delayed difficulty bomb" to force miners to accept changes to the network.

> Miner's de facto control of the network is a huge problem. It's why Bitcoin will never solve its energy use issue, and why Ethereum set up a "delayed difficulty bomb" to force miners to accept changes to the network.

Not sure we should go as far as stating their control to be "de facto" as there has been no major cases of miners splitting a mainstream chain and "winning". Most examples are miners going one way, then slowly dying until they move back to the main chain.

Re: 'Minting' electronic cash (1999)

#29

Post by ulrikrasmussen »

wyager wrote: post #18
pjc50 wrote: post #16

Ooh, the original Chaum paper! Chaum "coins" behave a lot more like bearer instruments or "free banking" notes; they're IOUs issued by a bank that can be traded. The advantage over a database is that there's some ability to do offline transactions, although the double-spend prevention is done through the originating bank. The advantage over bitcoin is that is uses a tiny fraction of the energy. It's also naturally a…

The disadvantage compared to Bitcoin is that it’s hardly meaningfully different from using Paypal or something.

What do you mean? It's not like PayPal because the sender is actually anonymous (assuming that exact amounts are hidden by always withdrawing fixed size coins).

Re: 'Minting' electronic cash (1999)

#30

Post by 1e-9 »

rogueSkib wrote: post #27
1e-9 wrote: post #24

Earlier quoted context omitted.

> it requires no trusted 3rd party Or, at least not the same 3rd parties. Instead, it requires trusting a much larger host of other 3rd parties, many of which are anonymous, and likely none of which will provide recourse if you lose your bitcoin due to their failure or malicious intent.[1] Bitcoin represents a shifting of trust; not an elimination of trust. That's not to say there is no value. It's just that there ar…

I don't believe this is accurate. As trust is spread across the network to an increasing number of people running nodes, the trust assigned to any individual participant approaches zero. This can be observed in the resilience of the network, as it self-heals against any attacker or alternative fork from the consensus. Bitcoin has democratically ossified into a store-of-value with absolute scarcity, deterministic mone…

> As trust is spread across the network to an increasing number of people running nodes, the trust assigned to any individual participant approaches zero.

If only we knew this was true.

An increase in the number of people running nodes does not guarantee that the maximum trust assigned to any individual participant approaches zero. What is the size of the largest Bitcoin whale? What is the size of the largest Bitcoin cartel? How do you know that the share of the largest Bitcoin whale or cartel isn’t increasing? What prevents China from deciding to eliminate the Bitcoin threat to its control by taking over the Chinese miners and launching a 51% attack?

Even if you are willing to believe that trust is well distributed across many independent entities, you still need to have greater trust in your own security and IT skills. When your wallet is hacked or you lose your credentials, there’s no number to call to recover your Bitcoin.

Bitcoin still requires significant trust, which is often overlooked.

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