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Bitcoin Miners Flock to New York’s Remote Corners, but Get Chilly Reception

nytimes.com

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Re: Bitcoin Miners Flock to New York’s Remote Corners, but Get Chilly Reception

#51

Post by cdiddy2 »

eudora wrote: post #49
plankers wrote: post #27

Earlier quoted context omitted.

Bitcoin is _not_ trying to go proof of stake because proof of work is the most secure consensus algorithm that exists. Proof of stake has some lingering unsolved problems, search for "nothing at stake problem" and "long range attack." All the energy consumed by bitcoin is a feature, not a bug. The only way to defeat the immutability of the bitcoin blockchain and do naughty things would be to expend _more_ energy than…

If that's the case, I'm not into it. It's not sustainable. What an incredible waste of resources. And presumably the energy cost correlates to the usage of the currency? How can it possibly become anything like widely used if it's so pricey? (Come to think of it, one way is the lightning network. Which doesn't use the blockchain for almost everything: https://lightning.network/ )

The energy cost does not correlate with the usage of the network. A block with 1 transaction in it needs the same amount of energy as a block with 3000 transactions in it.

The peak energy cost is limited by the price of bitcoin though.

Re: Bitcoin Miners Flock to New York’s Remote Corners, but Get Chilly Reception

#52

Post by cdiddy2 »

bogomipz wrote: post #45
cdiddy2 wrote: post #34

Earlier quoted context omitted.

Its doesn't have any mining at all. You put your coins in a smart contract that allows you to get randomly selected to create blocks from time to time, if you do something wrong then some of your coins are taken from you, if you do everything right you get a portion of the fees and/or a bit of inflation. There are lots of slightly different variants of it though

Interesting. Is there a practical reason limiting its' adoption?

It doesnt have the same history of security that proof of work has so its just newer and hard to get the incentives correct to create a secure network. Ethereum is working on moving to it and some others as well.

Re: Bitcoin Miners Flock to New York’s Remote Corners, but Get Chilly Reception

#53

Post by awt »

perl4ever wrote: post #40
awt wrote: post #26

Earlier quoted context omitted.

I don't understand how you can compare violation of property rights (breaking windows) to a completely voluntary system such as Bitcoin, the private production and use of which violates no property rights.

I don't think that the harm of breaking windows is solely due to violation of private property rights. Maybe the windows are on a publicly owned building. Or, even if they are private property, there is harm done to the public as a consequence of the damage. People will take steps to avoid such damage. And conversely, maybe the mining of Bitcoin harms public interests too. I think it's easy to just assume away the is…

Please provide a definition of harm that excludes the violation of property rights. We need not consider the difference between private property rights and property rights because these things are one and the same.

If you can come up with a logically consistent definition under which the creation of public property does not itself cause harm - I will be surprised.

Re: Bitcoin Miners Flock to New York’s Remote Corners, but Get Chilly Reception

#54

Post by Retric »

darawk wrote: post #24
Retric wrote: post #16

Earlier quoted context omitted.

> backed by something real Which is why USD backed up by the worlds strongest economy are used for vastly more international transactions than all cripto coins combined. Coins have nothing but belief in their value backing them up and are thus extremely unstable. At the end of the day people need to pay taxes and debts and that’s what gives nation states currency value. As long as the nation does not go on a long ter…

> Which is why USD backed up by the worlds strongest economy are used for vastly more international transactions than all cripto coins combined. In what sense do you believe USD to be 'backed' by the US economy?

Economic transactions create a tax debt which creates demand for currency to pay the government. Sell stock, car, or some Twinkies, even in a different currency, and they get a cut.

Indirectly, messing with your currency risks economic harm creating a huge incentive for governments not to do that while things are going well.

Re: Bitcoin Miners Flock to New York’s Remote Corners, but Get Chilly Reception

#55

Post by bogomipz »

cdiddy2 wrote: post #52
bogomipz wrote: post #45

Earlier quoted context omitted.

Interesting. Is there a practical reason limiting its' adoption?

It doesnt have the same history of security that proof of work has so its just newer and hard to get the incentives correct to create a secure network. Ethereum is working on moving to it and some others as well.

Thanks. I just found the following article about "proof of stake" in case anyone else is: interested:

https://hackernoon.com/what-is-proof-of-stake-8e0433018256

Re: Bitcoin Miners Flock to New York’s Remote Corners, but Get Chilly Reception

#56

Post by darawk »

Retric wrote: post #54
darawk wrote: post #24

Earlier quoted context omitted.

> Which is why USD backed up by the worlds strongest economy are used for vastly more international transactions than all cripto coins combined. In what sense do you believe USD to be 'backed' by the US economy?

Economic transactions create a tax debt which creates demand for currency to pay the government. Sell stock, car, or some Twinkies, even in a different currency, and they get a cut. Indirectly, messing with your currency risks economic harm creating a huge incentive for governments not to do that while things are going well.

> Economic transactions create a tax debt which creates demand for currency to pay the government. Sell stock, car, or some Twinkies, even in a different currency, and they get a cut.

That is absolutely correct. But nowhere does it demand that you conduct these transactions in USD. USD ends up getting used because it's convenient, which is because people have to pay their tax debts at the end of the year. However, that is a problem that can be trivially solved by software now, especially as society becomes more and more cashless.

As long as the US government accepts payment for taxes in USD, there will always be some demand for it. However, there is nothing actually stopping people from using other currencies for their normal transactions, which would substantially decrease demand for USD, and thereby reduce its value.

There is no sense in which the US government 'backs' dollars, except insofar as they are incentivized not to do anything to actively destroy them.

Re: Bitcoin Miners Flock to New York’s Remote Corners, but Get Chilly Reception

#57

Post by Retric »

darawk wrote: post #56
Retric wrote: post #54

Earlier quoted context omitted.

Economic transactions create a tax debt which creates demand for currency to pay the government. Sell stock, car, or some Twinkies, even in a different currency, and they get a cut. Indirectly, messing with your currency risks economic harm creating a huge incentive for governments not to do that while things are going well.

> Economic transactions create a tax debt which creates demand for currency to pay the government. Sell stock, car, or some Twinkies, even in a different currency, and they get a cut. That is absolutely correct. But nowhere does it demand that you conduct these transactions in USD. USD ends up getting used because it's convenient, which is because people have to pay their tax debts at the end of the year. However, th…

The need to pay US taxes in USD is not a software problem it’s a risk mitigation problem. If you accept pesos/whatever for your car and the peso crashed you might owe more in taxes than you where paid and even if you do the transaction today you still need to buy some USD with pesos to put aside for taxes.

So, if by ‘some’ you mean multiple trillions of dollars of demand every year then ok. But, that’s rather trivializes what a trillion dollars means.

Which is why I am saying the economy backs the USD not the government.

Re: Bitcoin Miners Flock to New York’s Remote Corners, but Get Chilly Reception

#58

Post by gwbas1c »

eudora wrote: post #20

Is there any work being done to make Bitcoin not consume all that energy? It's hard to support when it's so wasteful of a critical resource. Are they trying to go proof of stake?

That's what the altcoins are for.

Bitcoin isn't like your average software where some party releases an update that magically downloads from some app store. It's a protocol where everyone has to mutually agree to update.

The best example of an "update" is Bitcoin cash, where the creator just gave all bitcoin owners free btc.

Ultimately, the real problem is that most people involved either don't understand economics, or are preying on people who don't understand economics. Until there's real commerce with a cryprocurrency, they have no value. Thus anyone hoarding them is basically gambling in a zero sum game.

Re: Bitcoin Miners Flock to New York’s Remote Corners, but Get Chilly Reception

#59

Post by darawk »

Retric wrote: post #57
darawk wrote: post #56

Earlier quoted context omitted.

> Economic transactions create a tax debt which creates demand for currency to pay the government. Sell stock, car, or some Twinkies, even in a different currency, and they get a cut. That is absolutely correct. But nowhere does it demand that you conduct these transactions in USD. USD ends up getting used because it's convenient, which is because people have to pay their tax debts at the end of the year. However, th…

The need to pay US taxes in USD is not a software problem it’s a risk mitigation problem. If you accept pesos/whatever for your car and the peso crashed you might owe more in taxes than you where paid and even if you do the transaction today you still need to buy some USD with pesos to put aside for taxes. So, if by ‘some’ you mean multiple trillions of dollars of demand every year then ok. But, that’s rather trivial…

> The need to pay US taxes in USD is not a software problem it’s a risk mitigation problem. If you accept pesos/whatever for your car and the peso crashed you might owe more in taxes than you where paid and even if you do the transaction today you still need to buy some USD with pesos to put aside for taxes.

True, though that's simple enough to hedge.

> So, if by ‘some’ you mean multiple trillions of dollars of demand every year then ok. But, that’s rather trivializes what a trillion dollars means.

Absolute numbers don't matter, relative ones do. The demand may go to trillions, but that would be down from tens of trillions.

Re: Bitcoin Miners Flock to New York’s Remote Corners, but Get Chilly Reception

#60

Post by plankers »

eli wrote: post #29
plankers wrote: post #28

Love watching people cry about bitcoin miners increasing the overall efficacy of electricity use. If you didn't want people moving in and using your cheap electricity, you shouldn't have made it so cheap! Price stabilization in action.

If you walked into Starbucks every day and took most of the sugar packets so that they're aren't enough for all the other customers, proclaiming "they should've charged $0.10 each!" when caught would probably not earn you much sympathy from the regular customers.

That would be a good analogy if there were government price controls on sugar packets at Starbucks. Or if electricity was free. As it stands, it's a pretty poor analogy.
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