People who are interested in cryptocurrencies need to be supporting cyptos that do not use competitive proof of work. I don't want to point out any because I don't want to shill. However terms to...
People who are interested in cryptocurrencies need to be supporting cyptos that do not use competitive proof of work.
I don't want to point out any because I don't want to shill. However terms to look up include: "Proof of Stake", "Delegated Proof of Stake", and "The Tangle".
Proof of Stake and related schemes have the potential to replace Proof of Work and make cryptocurrencies environmentally-friendly and efficient, but it's important to be skeptical right now of...
Exemplary
"Proof of Stake", "Delegated Proof of Stake"
Proof of Stake and related schemes have the potential to replace Proof of Work and make cryptocurrencies environmentally-friendly and efficient, but it's important to be skeptical right now of cryptocurrencies claiming to have solved it it. Most attempts so far at Proof of Stake have been subtly flawed ("nothing at stake" problem) or actually required centralization ("checkpointing" being a common euphemism). Sometimes the cryptocurrency makes an honest try at PoS, then realizes the problems, and adds in centralization so people's balances can't get hosed. Sometimes the cryptocurrency never achieves enough mindshare for people to notice the problems in it. Sometimes the cryptocurrency from the start has the centralization baked in, and the creator obfuscates that fact and goes for the less discerning users. It's extremely easy to make something that looks like and quacks like a cryptocurrency but is actually centralized. And that's a major difference. The entire reason Bitcoin was considered innovative was because it was actually decentralized. (There may be room in the ecosystem for some slightly centralized stuff too, but it would be missing the point to think the centralized stuff could replace the actually decentralized cryptocurrencies.)
Proof of Work-based cryptocurrencies like Bitcoin are pretty easy to understand if you understand how hashes work. And it's not just the "happy path" that's easy to understand. It's very straight-forward to understand how someone would attack it, and what exactly they'd have to do to be successful. If there are multiple conflicting blocks, then the one with the chain with the most Proof of Work is considered the true one. The only way an attacker could rewrite history is to make a chain with more Proof of Work than the alternative, which requires more computing power than the rest of the network. The chain-picking algorithm isn't complicated by things like whether or not the client was connected to the network when the attacker's blockchain was proposed; someone that starts their client and syncs during the middle of an attempted attack will still pick the same blockchain as everyone else.
Proof of Stake algorithms are very complicated in comparison. The "happy path" can be explained easily, but the failure modes are much less obvious. There's a lot of game theory to think about. What exact penalty is required to stop a client from committing stake to multiple different blockchains? How do we correctly track that a client has double-staked so we can penalize them? It's disturbing that the double-stake issue looks a lot like the double-spend issue, which is the original thing that Bitcoin innovated by solving with Proof of Work. If PoS is supposed to be an alternative to PoW and solve the double-spend issue without PoW, then it should transform the double-spend issue into a simpler and solvable issue. If it just transforms double-spend into an equivalent issue, then it didn't make any progress and passed the buck in an obfuscated way. I assume that those issues aren't exactly equivalent under newer schemes, but my point is that from the thousand-foot perspective, PoS lacks the "obvious correctness" that PoW achieves so easily.
I think Proof of Stake schemes need a lot of study to be verified and done correctly. Another problem is that there's a huge incentive for people to make a new cryptocurrency that looks like PoS and claims it's solved PoS, or instead doesn't even acknowledge the problems inherent to it. (Same goes with being incentivized to have claimed to have solved transaction rates, etc. Any new cryptocurrency promising orders of magnitude greater transaction rates than Bitcoin or Ethereum should also be considered suspicious. Most of them make design decisions that would not scale up.) It can't be understated how much this muddies the water. The market is paying people to unintentionally muddy the water en-masse about this issue. I think the correct behavior is to watch how established cryptocurrencies (Bitcoin and Ethereum; the ones with the biggest developer and researcher community) investigate adopting Proof of Stake, where there isn't a financial incentive to bolster flawed schemes. Bitcoin doesn't have the same culture of change that Ethereum has, so most of the interesting research is coming from the groups behind Ethereum.
"The Tangle"
IOTA (the cryptocurrency that popularized that system) is a shit fractal made of hot air. Other people are sure to mention the "ternary" nonsense and its custom "curl" hash's vulnerabilities. I'd just like to emphasize how crazy of a mistake it is to make on multiple levels. Bruce Schneier, a renowned security expert, said this about the situation: "In 2017, leaving your crypto algorithm vulnerable to differential cryptanalysis is a rookie mistake. It says that no one of any calibre analyzed their system, and that the odds that their fix makes the system secure is low." The curl algorithm was vulnerable to standard mistakes taught in college courses. But why did IOTA even develop their own hash algorithm in the first place? Modern hashing algorithms are very fast and extremely studied and work in a wide variety of situations. The first rule of cryptography is "don't roll your own cryptography". If you have a new hash algorithm that addresses something that the standard hash algorithms don't, then you publish it on its own and get feedback first. You don't introduce it into the world as an afterthought in a system where it's in the critical money-handling-path. Also, there's nothing that Curl does better than standard hashing algorithms. There's no special feature of it that makes it better suited to IOTA. It's strictly worse than what a student in a good cryptography course would be expected to come up with (and then be expected to never actually use because they've learned the value in using well-studied algorithms). The fact that IOTA thought it was a good idea to attempt (regardless of how they failed at it) should cast doubt on the rest of their decisions. (And they have no shortage of other obviously bad decisions. For example, the whole concept of running a cryptocurrency on IOT devices. Or the fact they've been centralized and claim to be moving off of that.)
IOTA uses a system called "the Tangle", and I know you referred to "the Tangle" probably to also refer to the other cryptocurrencies that also use that system, but I have to say I'm super skeptical of anything that came from IOTA. It seems extraordinarily unlikely that out of all of their nonsense design choices, the one solid part was the part that supposedly supersedes both Proof of Work and Proof of Stake. Good complicated ideas aren't born from randomness, but from processes that create good ideas. (If we all had infinite time, then we could investigate every single idea on its own, but when we don't have infinite time and people are getting rich making up nonsense, then it's good to consider ideas in context like this.) (Also, I've seen some HN posts that say the Tangle fails to acknowledge that an attacker is incentivized to verify more transactions than normal users are incentivized to, which allows attackers to double-spend if it weren't for the centralization.)
Stellar has been using something similar to the tangle but they seem to have a much better grasp on the cryptography. I haven't read much about it. Otherwise this is a very solid intro/summary of...
Stellar has been using something similar to the tangle but they seem to have a much better grasp on the cryptography. I haven't read much about it.
Otherwise this is a very solid intro/summary of PoW/Tangle work.
Not sure I'd recommend people to look into that one. IOTA promises the best out of the crypto systems, but they are also one of the more dicey ones. For one thing, and this doesn't necessarily...
"The Tangle"
Not sure I'd recommend people to look into that one. IOTA promises the best out of the crypto systems, but they are also one of the more dicey ones.
For one thing, and this doesn't necessarily relate the legitimacy of the tangle but more IOTA's implementation and the authors' competency, is the just bizarre use of ternary. For all of their claimed benefits, none of them matter unless they start fabbing ternary chips and designing ternary architectures. In fact, it's just strictly worse on our binary machines.
Even worse, of course, is their attempt to write their own cryptographicly secure ternary hash. Everyone knows the #1 rule of security software: do not write your own crypto. Predictably, their hash was broken soon after.
If you read their white paper, their security guarantees are also dodgy. No adaptive PoW, and very handwavy justification for it's resistance against 51% attacks.
But perhaps the worst part of it is the coordinator. The coordinator is really an incredibly important part of the "tangle", even though the white paper just glosses over it. And it's closed source! What!?
Proof of Stake has it's own issues, but I would certainly stay away from iota.
I just asked a friend about that, since he's dabbled with it before, and the coordinator is getting removed, but apparently it's already open source. https://coordicide.iota.org/ Portmanteau of...
I just asked a friend about that, since he's dabbled with it before, and the coordinator is getting removed, but apparently it's already open source. https://coordicide.iota.org/ Portmanteau of coordinator suicide lol.
He agrees about the ternary point though, and it's such a baffling decision that I can't help but wonder why they're wanting to re-invent the wheel while they're already re-inventing a different wheel.
You have to consider the difference in use though. Besides the fact than in more and more countries often the majority of transactions are done via debit or credit card systems, Bitcoin is used by...
You have to consider the difference in use though. Besides the fact than in more and more countries often the majority of transactions are done via debit or credit card systems, Bitcoin is used by barely alone. And those that use it, primarily do so as speculation object - not as currency
Personally, I've always found Bitcoin to be a ludicrous and irresponsible waste of resources. The justification for an anonymous online currency is laughable. There's no real need due to the...
Personally, I've always found Bitcoin to be a ludicrous and irresponsible waste of resources. The justification for an anonymous online currency is laughable. There's no real need due to the availability of traditional means of exchange which can be anonymized with less effort.
I'm thankful we have a choice. Some people value Bitcoin's features and are willing to pay for it, and that's great. Others who think it's ludicrous don't have to use it. Doesn't have to be one...
I'm thankful we have a choice.
Some people value Bitcoin's features and are willing to pay for it, and that's great.
Others who think it's ludicrous don't have to use it.
Choices are all well and good, until they result in deleterious externalities, such as Bitcoin's high environmental cost. You shouldn't get a choice when it comes to polluting the environment....
Choices are all well and good, until they result in deleterious externalities, such as Bitcoin's high environmental cost. You shouldn't get a choice when it comes to polluting the environment. There are alternative cryptocurrencies that don't have these downsides—anyone using cryptocurrencies has an obligation to do the best they can to abandon Bitcoin.
I fly on airplanes. Do I have an obligation to travel by sailboat to reduce my carbon footprint? I'm typing a comment into Tildes right now that consumes power that's probably not from a renewable...
I fly on airplanes. Do I have an obligation to travel by sailboat to reduce my carbon footprint?
I'm typing a comment into Tildes right now that consumes power that's probably not from a renewable source. Do I have an obligation to substitute reading a book or writing a letter?
This afternoon I used a cordless drill that both consumes electricity and uses environmentally unfriendly chemicals in its battery. Do I have an obligation to use a manual drill instead?
In each case, there is an alternative tool that doesn't work as well as the tool I selected. Sure, there are cryptocurrencies that use less power, but they don't do what Bitcoin does. I don't think I'm obligated to use an inferior tool just because it uses less energy.
If you care about the carbon footprint of a technology, you can't just multiply megawatt hours by 1000 pounds of CO2. You'd want to know how that power was generated. Coal? Natural Gas? Solar?...
If you care about the carbon footprint of a technology, you can't just multiply megawatt hours by 1000 pounds of CO2. You'd want to know how that power was generated. Coal? Natural Gas? Solar?
Miners only run when they're profitable. When they're not profitable, they stop mining. That means most mining migrates to (1) the most efficient hardware, and (2) the cheapest power.
For example, nobody is mining with CPUs or graphics cards because they can't compete with ASIC hardware. And the cheapest power comes from the excess capacity of hydroelectric and geothermal plants.
I've seen estimates that 75% to 85% of mining Bitcoin's energy comes from renewable sources like hydroelectric and geothermal. Mining doesn't happen as much from dirty sources because they are more expensive, and mining isn't profitable with more expensive power.
A single bitcoin transaction uses 215 kilowatt-hours of electricity. There is absolutely no way visa or master card use that much because the planet would have been totally destroyed at their scale.
A single bitcoin transaction uses 215 kilowatt-hours of electricity. There is absolutely no way visa or master card use that much because the planet would have been totally destroyed at their scale.
Visa can do 56,000 transactions per second, Bitcoin can do 7. This is a pretty good article on the topic: https://prestonbyrne.com/2018/10/05/bitcoin_hippo/
I've written about this before so I'll quote it here: Basically blaming something that uses electricity from an electrical grid as the cause of CO2 is indirect. Every year it becomes cheaper and...
I've written about this before so I'll quote it here:
First is that bitcoins energy consumption is likely overhyped. The article brings up that the focus should be more on how countries are still not moving to renewable energy sources but that bitcoin's true carbon footprint isn't even known. It also mentions that it could grow 100 times its size and still only use 2% of global energy. Considering that bitcoin is a global currency. It can be argued as reasonable and with countries moving to sustainable energy it can have minimal carbon impact.
Basically blaming something that uses electricity from an electrical grid as the cause of CO2 is indirect. Every year it becomes cheaper and more sustainable to power the electrical grid across the planet with renewable resources.
And energy is the primary power behind bitcoin's value. Unfortunately other coins that use "proof of stake" or "the tangle" have not proven effective yet at maintaining some level of decentralization of which bitcoin has proven to some degree. Bitcoin is essentially invulnerable to 51% attacks as well, something no other crypto can truly claim yet (for those of you who don't know what a 51% attack is, it's taking over the blockchain through a coordinated brute force attack of miners). It's able to be resistant to this because of the amount of power it uses.
Standing up to politicians like Trump who deny climate change will be far more effective than having protests over using proof of work blockchains. Using electricity shouldn't be considered a sin in an age where renewables should be the expectation, not the alternative.
Let's be realistic here: For a product which has effectively zero marketshare in the public space of financial transactions (see: your grandma, the people you know on facebook), even emitting the...
Let's be realistic here: For a product which has effectively zero marketshare in the public space of financial transactions (see: your grandma, the people you know on facebook), even emitting the amount of CO2 comparable to a large city is fucking awful. And even if you scaled it 100x, it's still at effectively zero marketshare—2% of global energy consumption is absolutely nonsensical.
It's like buying a hummer and leaving it idling in the driveway doing nothing; then telling me to complain about the aviation industry instead. Yeah, sure, the aviation industry is bad, but you're still wasting gas.
In terms of the ratio of environmental friendliness to utility, Bitcoin is awful.
When you compare bitcoin to things doing "nothing" then your argument makes sense. But it is still being used and accepted worldwide. Facebook grandmas are not sensible to use as your "average"...
When you compare bitcoin to things doing "nothing" then your argument makes sense. But it is still being used and accepted worldwide. Facebook grandmas are not sensible to use as your "average" person. The reality is there's $60B - $100B worth of transactions happening in crypto per day. So that's more than nothing, and it does have benefits that make it valuable not least of which is its immutable ledger, unlike a hummer sitting in a driveway.
Why not? They go shopping & participate in everyday financial transactions all the time. In fact, I would go so far as to say that they are the perfect representation of an average person. Most of...
Facebook grandmas are not sensible to use as your "average" person.
Why not? They go shopping & participate in everyday financial transactions all the time. In fact, I would go so far as to say that they are the perfect representation of an average person.
The reality is there's $60B - $100B worth of transactions happening in crypto per day.
Most of this is fraudulent pyramidal back and forths that delivers no real value to any economy or represents anything tangible.
Okay, elderly technologically inept people are not the ones buying iphones, smart watches, ubers, airbnbs etc. Why aren't you using them to show how these technologies and ideas are useless?...
Okay, elderly technologically inept people are not the ones buying iphones, smart watches, ubers, airbnbs etc. Why aren't you using them to show how these technologies and ideas are useless?
What's disappointing to me is that you don't bring any outside sources to this conversation. This is simply just you saying bitcoin has no real value. and it's the more popular opinion to have here on tildes. I came to tildes because I wanted good discussion. You clearly know some important facts about bitcoin and crypto but you aren't giving reasons on why you're saying it has no value. I can say the American dollar has no value because it doesn't do anything, but I'm sure I wouldn't refuse a million of them if they were given to me though, so clearly there is a value. I bet the same goes if you were offered 100 bitcoin.
You are right that there are smaller exchanges, most notably OKex that inflate the volume artificially. I've also written on this topic before so I'll share that here as well:
While the 95% of false trading seems to be true, the overall market cap of bitcoin appears to be healthy at the same time. Problems with arbitrage and a lack of regulation have improved significantly. 9 of the top 10 exchanges are regulated by FinCEN and other well regarded regulatory systems. These 10 exchanges are the only exchanges that deal in real volume (over $1M real daily volume) and half of these have employed market manipulation tools to prevent it. Source
With Bitcoin coming into the world with only a place like MtGox as an exchange compared to this report Bitcoin is actually in so much a better position. With how young the cryptocurrency is and its global adoption being such a surprise, the fact is that so many exchanges are working in unity against this sort of wash trading that has been with the currency since the start. Basically, it's now harder than ever to continue to wash trade and these articles that are coming out exposing it are really one of Bitcoin's final global adoption hurdles.
I'm all for more sustainable options but proof of stake has some centralization issues that could make switching to it obsolete. Do you have an example of a crypto that has everything it takes to...
I'm all for more sustainable options but proof of stake has some centralization issues that could make switching to it obsolete. Do you have an example of a crypto that has everything it takes to compete with the qualities of bitcoin and is more sustainable? It's easy to just talk sustainability but harder to find concrete examples in the crypto world.
I don't have an example but we are in no rush that we can't wait until a better option appears. Metal coins and dead tree did well for almost three millennia, it can definitely stay for a couple...
I don't have an example but we are in no rush that we can't wait until a better option appears. Metal coins and dead tree did well for almost three millennia, it can definitely stay for a couple other decades.
so shut down the miners everyone, cadadr says we should go back to metal coins and dead trees and we can all hold off on crypto until they've found an energy efficient form of mining? The genie...
so shut down the miners everyone, cadadr says we should go back to metal coins and dead trees and we can all hold off on crypto until they've found an energy efficient form of mining? The genie has been unleashed. It's not going back
I am just telling you my idea because you asked. We haven't really moved away from dead tree and coins anyways, except the most energy intensive pyramid scheme out there.
I am just telling you my idea because you asked. We haven't really moved away from dead tree and coins anyways, except the most energy intensive pyramid scheme out there.
The majority of fiat currency usage is expressed through digital transactions—just like bitcoin. The fact that it's backed by a physical set of convenience coins & notes is a plus, not a negative....
The majority of fiat currency usage is expressed through digital transactions—just like bitcoin. The fact that it's backed by a physical set of convenience coins & notes is a plus, not a negative. Your reductive arguments here are not helping your case.
People who are interested in cryptocurrencies need to be supporting cyptos that do not use competitive proof of work.
I don't want to point out any because I don't want to shill. However terms to look up include: "Proof of Stake", "Delegated Proof of Stake", and "The Tangle".
Proof of Stake and related schemes have the potential to replace Proof of Work and make cryptocurrencies environmentally-friendly and efficient, but it's important to be skeptical right now of cryptocurrencies claiming to have solved it it. Most attempts so far at Proof of Stake have been subtly flawed ("nothing at stake" problem) or actually required centralization ("checkpointing" being a common euphemism). Sometimes the cryptocurrency makes an honest try at PoS, then realizes the problems, and adds in centralization so people's balances can't get hosed. Sometimes the cryptocurrency never achieves enough mindshare for people to notice the problems in it. Sometimes the cryptocurrency from the start has the centralization baked in, and the creator obfuscates that fact and goes for the less discerning users. It's extremely easy to make something that looks like and quacks like a cryptocurrency but is actually centralized. And that's a major difference. The entire reason Bitcoin was considered innovative was because it was actually decentralized. (There may be room in the ecosystem for some slightly centralized stuff too, but it would be missing the point to think the centralized stuff could replace the actually decentralized cryptocurrencies.)
Proof of Work-based cryptocurrencies like Bitcoin are pretty easy to understand if you understand how hashes work. And it's not just the "happy path" that's easy to understand. It's very straight-forward to understand how someone would attack it, and what exactly they'd have to do to be successful. If there are multiple conflicting blocks, then the one with the chain with the most Proof of Work is considered the true one. The only way an attacker could rewrite history is to make a chain with more Proof of Work than the alternative, which requires more computing power than the rest of the network. The chain-picking algorithm isn't complicated by things like whether or not the client was connected to the network when the attacker's blockchain was proposed; someone that starts their client and syncs during the middle of an attempted attack will still pick the same blockchain as everyone else.
Proof of Stake algorithms are very complicated in comparison. The "happy path" can be explained easily, but the failure modes are much less obvious. There's a lot of game theory to think about. What exact penalty is required to stop a client from committing stake to multiple different blockchains? How do we correctly track that a client has double-staked so we can penalize them? It's disturbing that the double-stake issue looks a lot like the double-spend issue, which is the original thing that Bitcoin innovated by solving with Proof of Work. If PoS is supposed to be an alternative to PoW and solve the double-spend issue without PoW, then it should transform the double-spend issue into a simpler and solvable issue. If it just transforms double-spend into an equivalent issue, then it didn't make any progress and passed the buck in an obfuscated way. I assume that those issues aren't exactly equivalent under newer schemes, but my point is that from the thousand-foot perspective, PoS lacks the "obvious correctness" that PoW achieves so easily.
I think Proof of Stake schemes need a lot of study to be verified and done correctly. Another problem is that there's a huge incentive for people to make a new cryptocurrency that looks like PoS and claims it's solved PoS, or instead doesn't even acknowledge the problems inherent to it. (Same goes with being incentivized to have claimed to have solved transaction rates, etc. Any new cryptocurrency promising orders of magnitude greater transaction rates than Bitcoin or Ethereum should also be considered suspicious. Most of them make design decisions that would not scale up.) It can't be understated how much this muddies the water. The market is paying people to unintentionally muddy the water en-masse about this issue. I think the correct behavior is to watch how established cryptocurrencies (Bitcoin and Ethereum; the ones with the biggest developer and researcher community) investigate adopting Proof of Stake, where there isn't a financial incentive to bolster flawed schemes. Bitcoin doesn't have the same culture of change that Ethereum has, so most of the interesting research is coming from the groups behind Ethereum.
IOTA (the cryptocurrency that popularized that system) is a shit fractal made of hot air. Other people are sure to mention the "ternary" nonsense and its custom "curl" hash's vulnerabilities. I'd just like to emphasize how crazy of a mistake it is to make on multiple levels. Bruce Schneier, a renowned security expert, said this about the situation: "In 2017, leaving your crypto algorithm vulnerable to differential cryptanalysis is a rookie mistake. It says that no one of any calibre analyzed their system, and that the odds that their fix makes the system secure is low." The curl algorithm was vulnerable to standard mistakes taught in college courses. But why did IOTA even develop their own hash algorithm in the first place? Modern hashing algorithms are very fast and extremely studied and work in a wide variety of situations. The first rule of cryptography is "don't roll your own cryptography". If you have a new hash algorithm that addresses something that the standard hash algorithms don't, then you publish it on its own and get feedback first. You don't introduce it into the world as an afterthought in a system where it's in the critical money-handling-path. Also, there's nothing that Curl does better than standard hashing algorithms. There's no special feature of it that makes it better suited to IOTA. It's strictly worse than what a student in a good cryptography course would be expected to come up with (and then be expected to never actually use because they've learned the value in using well-studied algorithms). The fact that IOTA thought it was a good idea to attempt (regardless of how they failed at it) should cast doubt on the rest of their decisions. (And they have no shortage of other obviously bad decisions. For example, the whole concept of running a cryptocurrency on IOT devices. Or the fact they've been centralized and claim to be moving off of that.)
These HN threads have some good discussion about IOTA: https://news.ycombinator.com/item?id=15860970, https://news.ycombinator.com/item?id=15944112 (and a post by me in that thread), https://news.ycombinator.com/item?id=16257096
IOTA uses a system called "the Tangle", and I know you referred to "the Tangle" probably to also refer to the other cryptocurrencies that also use that system, but I have to say I'm super skeptical of anything that came from IOTA. It seems extraordinarily unlikely that out of all of their nonsense design choices, the one solid part was the part that supposedly supersedes both Proof of Work and Proof of Stake. Good complicated ideas aren't born from randomness, but from processes that create good ideas. (If we all had infinite time, then we could investigate every single idea on its own, but when we don't have infinite time and people are getting rich making up nonsense, then it's good to consider ideas in context like this.) (Also, I've seen some HN posts that say the Tangle fails to acknowledge that an attacker is incentivized to verify more transactions than normal users are incentivized to, which allows attackers to double-spend if it weren't for the centralization.)
Stellar has been using something similar to the tangle but they seem to have a much better grasp on the cryptography. I haven't read much about it.
Otherwise this is a very solid intro/summary of PoW/Tangle work.
Not sure I'd recommend people to look into that one. IOTA promises the best out of the crypto systems, but they are also one of the more dicey ones.
For one thing, and this doesn't necessarily relate the legitimacy of the tangle but more IOTA's implementation and the authors' competency, is the just bizarre use of ternary. For all of their claimed benefits, none of them matter unless they start fabbing ternary chips and designing ternary architectures. In fact, it's just strictly worse on our binary machines.
Even worse, of course, is their attempt to write their own cryptographicly secure ternary hash. Everyone knows the #1 rule of security software: do not write your own crypto. Predictably, their hash was broken soon after.
If you read their white paper, their security guarantees are also dodgy. No adaptive PoW, and very handwavy justification for it's resistance against 51% attacks.
But perhaps the worst part of it is the coordinator. The coordinator is really an incredibly important part of the "tangle", even though the white paper just glosses over it. And it's closed source! What!?
Proof of Stake has it's own issues, but I would certainly stay away from iota.
I just asked a friend about that, since he's dabbled with it before, and the coordinator is getting removed, but apparently it's already open source. https://coordicide.iota.org/ Portmanteau of coordinator suicide lol.
He agrees about the ternary point though, and it's such a baffling decision that I can't help but wonder why they're wanting to re-invent the wheel while they're already re-inventing a different wheel.
While I am no supporter of Bitcoin, I wonder how does the impact of paper tender on a global scale compares to all this.
You have to consider the difference in use though. Besides the fact than in more and more countries often the majority of transactions are done via debit or credit card systems, Bitcoin is used by barely alone. And those that use it, primarily do so as speculation object - not as currency
Personally, I've always found Bitcoin to be a ludicrous and irresponsible waste of resources. The justification for an anonymous online currency is laughable. There's no real need due to the availability of traditional means of exchange which can be anonymized with less effort.
I'm thankful we have a choice.
Some people value Bitcoin's features and are willing to pay for it, and that's great.
Others who think it's ludicrous don't have to use it.
Doesn't have to be one size fits all.
Choices are all well and good, until they result in deleterious externalities, such as Bitcoin's high environmental cost. You shouldn't get a choice when it comes to polluting the environment. There are alternative cryptocurrencies that don't have these downsides—anyone using cryptocurrencies has an obligation to do the best they can to abandon Bitcoin.
I fly on airplanes. Do I have an obligation to travel by sailboat to reduce my carbon footprint?
I'm typing a comment into Tildes right now that consumes power that's probably not from a renewable source. Do I have an obligation to substitute reading a book or writing a letter?
This afternoon I used a cordless drill that both consumes electricity and uses environmentally unfriendly chemicals in its battery. Do I have an obligation to use a manual drill instead?
In each case, there is an alternative tool that doesn't work as well as the tool I selected. Sure, there are cryptocurrencies that use less power, but they don't do what Bitcoin does. I don't think I'm obligated to use an inferior tool just because it uses less energy.
If you care about the carbon footprint of a technology, you can't just multiply megawatt hours by 1000 pounds of CO2. You'd want to know how that power was generated. Coal? Natural Gas? Solar?
Miners only run when they're profitable. When they're not profitable, they stop mining. That means most mining migrates to (1) the most efficient hardware, and (2) the cheapest power.
For example, nobody is mining with CPUs or graphics cards because they can't compete with ASIC hardware. And the cheapest power comes from the excess capacity of hydroelectric and geothermal plants.
I've seen estimates that 75% to 85% of mining Bitcoin's energy comes from renewable sources like hydroelectric and geothermal. Mining doesn't happen as much from dirty sources because they are more expensive, and mining isn't profitable with more expensive power.
Always have to wonder, how much CO2 is used by VISA and Mastercard and all of the banks though.
A single bitcoin transaction uses 215 kilowatt-hours of electricity. There is absolutely no way visa or master card use that much because the planet would have been totally destroyed at their scale.
Visa can do 56,000 transactions per second, Bitcoin can do 7.
This is a pretty good article on the topic: https://prestonbyrne.com/2018/10/05/bitcoin_hippo/
I've written about this before so I'll quote it here:
Basically blaming something that uses electricity from an electrical grid as the cause of CO2 is indirect. Every year it becomes cheaper and more sustainable to power the electrical grid across the planet with renewable resources.
And energy is the primary power behind bitcoin's value. Unfortunately other coins that use "proof of stake" or "the tangle" have not proven effective yet at maintaining some level of decentralization of which bitcoin has proven to some degree. Bitcoin is essentially invulnerable to 51% attacks as well, something no other crypto can truly claim yet (for those of you who don't know what a 51% attack is, it's taking over the blockchain through a coordinated brute force attack of miners). It's able to be resistant to this because of the amount of power it uses.
Standing up to politicians like Trump who deny climate change will be far more effective than having protests over using proof of work blockchains. Using electricity shouldn't be considered a sin in an age where renewables should be the expectation, not the alternative.
Let's be realistic here: For a product which has effectively zero marketshare in the public space of financial transactions (see: your grandma, the people you know on facebook), even emitting the amount of CO2 comparable to a large city is fucking awful. And even if you scaled it 100x, it's still at effectively zero marketshare—2% of global energy consumption is absolutely nonsensical.
It's like buying a hummer and leaving it idling in the driveway doing nothing; then telling me to complain about the aviation industry instead. Yeah, sure, the aviation industry is bad, but you're still wasting gas.
In terms of the ratio of environmental friendliness to utility, Bitcoin is awful.
When you compare bitcoin to things doing "nothing" then your argument makes sense. But it is still being used and accepted worldwide. Facebook grandmas are not sensible to use as your "average" person. The reality is there's $60B - $100B worth of transactions happening in crypto per day. So that's more than nothing, and it does have benefits that make it valuable not least of which is its immutable ledger, unlike a hummer sitting in a driveway.
How much of that $60B is just coin mixers bouncing transactions around to stop people tracking down illegal transactions?
this is a good point and I addressed it with the original respondent
Why not? They go shopping & participate in everyday financial transactions all the time. In fact, I would go so far as to say that they are the perfect representation of an average person.
Most of this is fraudulent pyramidal back and forths that delivers no real value to any economy or represents anything tangible.
Okay, elderly technologically inept people are not the ones buying iphones, smart watches, ubers, airbnbs etc. Why aren't you using them to show how these technologies and ideas are useless?
What's disappointing to me is that you don't bring any outside sources to this conversation. This is simply just you saying bitcoin has no real value. and it's the more popular opinion to have here on tildes. I came to tildes because I wanted good discussion. You clearly know some important facts about bitcoin and crypto but you aren't giving reasons on why you're saying it has no value. I can say the American dollar has no value because it doesn't do anything, but I'm sure I wouldn't refuse a million of them if they were given to me though, so clearly there is a value. I bet the same goes if you were offered 100 bitcoin.
You are right that there are smaller exchanges, most notably OKex that inflate the volume artificially. I've also written on this topic before so I'll share that here as well:
Why not both? We could ditch inefficient tech and ask for environment friendly legislation.
I'm all for more sustainable options but proof of stake has some centralization issues that could make switching to it obsolete. Do you have an example of a crypto that has everything it takes to compete with the qualities of bitcoin and is more sustainable? It's easy to just talk sustainability but harder to find concrete examples in the crypto world.
I don't have an example but we are in no rush that we can't wait until a better option appears. Metal coins and dead tree did well for almost three millennia, it can definitely stay for a couple other decades.
so shut down the miners everyone, cadadr says we should go back to metal coins and dead trees and we can all hold off on crypto until they've found an energy efficient form of mining? The genie has been unleashed. It's not going back
I am just telling you my idea because you asked. We haven't really moved away from dead tree and coins anyways, except the most energy intensive pyramid scheme out there.
The majority of fiat currency usage is expressed through digital transactions—just like bitcoin. The fact that it's backed by a physical set of convenience coins & notes is a plus, not a negative. Your reductive arguments here are not helping your case.
but hey, money is money.
I'm just kidding, this sucks.