Hundreds of Bitcoin Wannabes Show Hallmarks of Fraud • Hacker News Board

Re: Hundreds of Bitcoin Wannabes Show Hallmarks of Fraud

#91

Post by pshin45 » Thu, May 17, 2018, 9:13 PM UTC

hudon wrote: post #6

- The space is littered with fraud. - Wallets have bugs that lose hundreds of millions of dollars - Energy consumption forecasted to hit 0.5% of the world’s electricity consumption by end of 2018 - Promoters yelling “decentralize everything” while exchanges, development teams and mining are all highly centralized - No legal use case found to date Blockchain is a parasite on society.

Re: Bitcoin's electricity consumption, I wasn't satisfied with how one-sided or incomplete a lot of the articles written about this topic are, so I tried writing my own* that (hopefully) more fully and objectively encapsulates the data and facts of the matter.

TL;DR – We all need to stop ignoring Bitcoin's rapidly-growing electricity consumption and making flawed "What about _____?"† arguments. The Bitcoin community (myself included) needs to start facing reality and be able to demonstrate four things:

1) Bitcoin’s energy usage is actually reasonable, when viewed in proper context

2) All that electricity is actually serving a useful purpose

3) Bitcoin’s growing energy needs can be brought under control

4) Over time, the electricity for Bitcoin will increasingly come from renewable sources

I personally believe that #1 and #4 are already true and will continue to trend in the right direction over time. As for #2 and #3, those can become true in the near future, but right now it's all hypothetical and Bitcoin needs to start delivering on its (unfulfilled) potential soon.

* https://medium.com/@petershin45/bitcoin-is-killing-the-plane...

† https://en.wikipedia.org/wiki/Whataboutism

Re: Hundreds of Bitcoin Wannabes Show Hallmarks of Fraud

#92

Post by paulmd » Thu, May 17, 2018, 9:29 PM UTC

paulpauper wrote: post #77

hudon wrote: post #6

- The space is littered with fraud. - Wallets have bugs that lose hundreds of millions of dollars - Energy consumption forecasted to hit 0.5% of the world’s electricity consumption by end of 2018 - Promoters yelling “decentralize everything” while exchanges, development teams and mining are all highly centralized - No legal use case found to date Blockchain is a parasite on society.

"- Energy consumption forecasted to hit 0.5% of the world’s electricity consumption by end of 2018" One can make the same argument about anything. "Look at all the fabric wasted on beanie babies that could be used for clothes" one could have argued in 1998. if Bitcoin is just a fad ,energy use will plunge due to difficulty decreasing. The energy consumed on mining represents a an input cost based on an expected retur…

> The energy consumed on mining represents a an input cost based on an expected return on investment, like energy spent on car manufacturing, for example. if the return falls, so will input costs because no one operates at a loss for long.

A significant number of operators in places like China are stealing electricity, either by tapping into wires or by making deals with corrupt local officials for reduced/free electricity. Articles such as these occur quite regularly.

http://www.scmp.com/news/china/society/article/2143758/chine...

https://www.ccn.com/chinese-police-seize-600-bitcoin-mining-...

http://www.scmp.com/news/china/society/article/2108486/four-...

https://kyc360.com/article/bitcoin-causes-electricity-crisis...

As such, there really isn't a "price floor" to crypto mining. Stolen electricity is free, they will keep mining no matter what.

Re: Hundreds of Bitcoin Wannabes Show Hallmarks of Fraud

#93

Post by [deleted] » Thu, May 17, 2018, 9:31 PM UTC

mythrwy wrote: post #44

The anti blockchain sentiment on HN is something like the anti-Trump hysteria in the period leading up to/immediately after the election. Tons of grandiose "it's SO horrible" posts, tons of downvotes. I predict it will shake out about the same way also. Blockchain and bitcoin aren't going anywhere in the near future. Some people have, and will continue to have, a use (for whatever reason). The "I hates it precious!"…

[deleted]

Re: Hundreds of Bitcoin Wannabes Show Hallmarks of Fraud

#94

Post by tdb7893 » Thu, May 17, 2018, 9:38 PM UTC

mythrwy wrote: post #44

The anti blockchain sentiment on HN is something like the anti-Trump hysteria in the period leading up to/immediately after the election. Tons of grandiose "it's SO horrible" posts, tons of downvotes. I predict it will shake out about the same way also. Blockchain and bitcoin aren't going anywhere in the near future. Some people have, and will continue to have, a use (for whatever reason). The "I hates it precious!"…

I think the negative sentiment is largely because of how much the bitcoin evangelists promise. There's a lot of hype and lofty goals tossed around but cryptocurrencies have been around for nearly a decade (If I remember bitcoin started early 2009) and they mostly seem to be used for fraud and speculation now. I'm not saying that the technology is fundamentally useless but the mismatch between delivery and retoric has made me sour on it.

A good more concrete example of this is the DAO from Ethereum. A lot of verbage was wasted beforehand saying how it was going change everything about corporations and investment but as far as I can tell little has changed.

Re: Hundreds of Bitcoin Wannabes Show Hallmarks of Fraud

#95

Post by neuromantik8086 » Thu, May 17, 2018, 9:43 PM UTC

teraflop wrote: post #72

kbody wrote: post #40

Earlier quoted context omitted.

- You could say that for cash and internet as well, but I hate it too that currently the majority of the space is overrun by scammers & useless ICOs. - As for wallet bugs: if you're talking about Ethereum or low-quality software projects yes, but for Bitcoin it's been a long time since that was an issue - Regarding power: setting aside all those sensationalistic headlines. Crypto-miners are a way that enable renewabl…

> Also compare that to the multiples of power used today by gold mining, or infrastructure that Bitcoin aims to replace. Based on DoE estimates of energy cost per ton of gold mined [1] and the current annual production of roughly 3000 tons/year, it looks like gold mining consumes an average of roughly 7 GW (assuming there have been no efficiency improvements since 1975). That's roughly equal to the power consumption…

> But of course Bitcoin can't replace gold, because the majority of gold mined is used for non-monetary applications

Building Bitcoin mining ASICs, for example...

Re: Hundreds of Bitcoin Wannabes Show Hallmarks of Fraud

#96

Post by sandworm101 » Thu, May 17, 2018, 10:00 PM UTC

lawn wrote: post #74

sandworm101 wrote: post #66

Earlier quoted context omitted.

If you think taking money for products via credit cards is difficult or expensive, you've got some surprises should you try to sell via cryptocurrencies. Security is a huge deal. Want to get hacked? Tell people you accept bitcoin payments. Put an interface on your website. Remember to bolt your server down to the floor with big long bolts. And the backup server. And the other backup. And all the little thumbdrives. C…

There are drawbacks to be sure. Yet you don't refute my examples. > Nobody outside onionland handles commercially-significant crypto transactions. I've bought computers, books, clothes, games, online services and made significant donations using cryptocurrencies. I have also received several refunds (they were priced in euros and so I received a matching amount in cryptocurrencies). That's just an ignorant and wrong…

>> I've bought computers,

Ya. BOUGHT. I guarantee the people selling them to you have different stories. The retailers that do take bitcoins knowingly do so for other reasons. The are trying to be cool and, perhaps, have a jump on the competition if things change. I'd bet they operate the bitcoin division at a loss.

Re: Hundreds of Bitcoin Wannabes Show Hallmarks of Fraud

#97

Post by clarkmoody » Thu, May 17, 2018, 10:04 PM UTC

hudon wrote: post #6

- The space is littered with fraud. - Wallets have bugs that lose hundreds of millions of dollars - Energy consumption forecasted to hit 0.5% of the world’s electricity consumption by end of 2018 - Promoters yelling “decentralize everything” while exchanges, development teams and mining are all highly centralized - No legal use case found to date Blockchain is a parasite on society.

Global sound money, however, could have unimaginable long-run benefits for humanity.

99.5% of the other stuff is a scam.

Re: Hundreds of Bitcoin Wannabes Show Hallmarks of Fraud

#98

Post by mythrwy » Thu, May 17, 2018, 10:07 PM UTC

abalone wrote: post #82

whataretensors wrote: post #51

Earlier quoted context omitted.

OP is proof that intelligent people aren't always creative or future looking.

OP is an ex-Coinbase engineer, so no. That's just a lazy dismissal.

Being an ex-Coinbase engineer doesn't make that "no".

As ex-Coinbase engineer could still lack imagination and foresight, being hired at Coinbase says nothing about possessing these. (not saying OP does lack these, but original post is pretty poor for an "authority" on the subject).

But agreed on lazy dismissal and I'll throw in assumption.

Re: Hundreds of Bitcoin Wannabes Show Hallmarks of Fraud

#99

Post by neffy » Thu, May 17, 2018, 10:16 PM UTC

hdespiritu wrote: post #19

wufufufu wrote: post #10

Can someone smarter than me try to write a formal proof that you can only have 2 of the following: distributed, fast, secure?

There's decades of academic work in the form of "impossibility" results showing that handling byzantine fault tolerance in distributed consensus is alot more computationally expensive than omission/crash fault tolerance. The following (FLP impossibility result) being one of the most famous ones: https://groups.csail.mit.edu/tds/papers/Lynch/jacm85.pdf

Yes, that's the root of the problem. A deceptively simple sounding result.

Re: Hundreds of Bitcoin Wannabes Show Hallmarks of Fraud

#100

Post by tromp » Thu, May 17, 2018, 10:19 PM UTC

roenxi wrote: post #85

teraflop wrote: post #72

Earlier quoted context omitted.

> Also compare that to the multiples of power used today by gold mining, or infrastructure that Bitcoin aims to replace. Based on DoE estimates of energy cost per ton of gold mined [1] and the current annual production of roughly 3000 tons/year, it looks like gold mining consumes an average of roughly 7 GW (assuming there have been no efficiency improvements since 1975). That's roughly equal to the power consumption…

But gold is energy un-intensive once mined. It sits there. Bitcoin needs the mining network to keep consuming energy to show it is special, otherwise it is basically just a number. Eventually bitcoin creation ceases and the energy burned will be paid in the transaction costs.

The comparison is quite appropriate, since the block reward that miners compete for is mostly the fixed new emission (currently 12.5 BTC), with transaction fees making up a much smaller amount. In other words, the huge energy costs of Bitcoin should be attributed more to coin distribution than to transaction processing, although this balance will tip in the coming decades.