[mrb]

1) No there is no other way. (An alternative, proof-of-stake, is still an active research area. Even Ethereum abandoned the idea of completely switching away from proof-of-work because they realized PoS isn't completely workable.)

2) Because a permission-less censorship-resistant decentralized financial system has the potential to truly improve society, hence worth spending energy on it.

I have presented multiple arguments why (Bitcoin) mining is not wasteful here: http://blog.zorinaq.com/bitcoin-mining-is-not-wasteful/

[dvfjsdhgfv]

I read your arguments and unfortunately most don't hold water.

> 1. Miners currently use approximately only 0.0012% of the energy consumed by the world.

This doesn't change the fact that you're using energy. The second argument is basically the same, just extrapolating into the future.

> 3. Mining would be a waste if there was another more efficient way to implement a Bitcoin-like currency without proof-of-work.

This is a logical fallacy. Mining means wasting energy regardless if there are other ways of producing digital currencies or not.

Now, this one is actually interesting:

> 4. Bitcoin is already a net benefit to the economy. Venture capitalists invested more than $1 billion into at least 729 Bitcoin companies which created thousands of jobs. You may disregard the first three arguments, but the bottom line is that spending an estimated 150 megawatt in a system that so far created thousands of jobs is a valuable economic move, not a waste.

This example is a bit special because the jobs haven't been created by BCs themselves but by VCs spending their own money into BC-related companies. I just hope most of these aren't BC mines, otherwise we'd have a vicious circle here...

>5. The energy cost per transaction is currently declining thanks to the transaction rate increasing faster than the network's energy consumption.

Again: this kind of argument is of "it's not as bad as it sounds" type, and does nothing to refute the claim that mining is wasteful.

[shoo]

> 4. Bitcoin is already a net benefit to the economy. Venture capitalists invested more than $1 billion into at least 729 Bitcoin companies which created thousands of jobs. You may disregard the first three arguments, but the bottom line is that spending an estimated 150 megawatt in a system that so far created thousands of jobs is a valuable economic move, not a waste.

We cannot decide if an activity is valuable or not based solely on if it creates jobs.

e.g. suppose the government spends $1b on some entirely useless activity, such as employing people to dig holes and fill them in again. From the metrics of job creation and GDP this program can be regarded as a success. But there is a big opportunity cost in that resources and peoples' time has been spent on something utterly pointless when they could have been focused on a less useless or indeed a genuinely useful activity.

The world still has many genuine problems that still need to be solved. The time and resources could be directed to: maintain infrastructure, better educate people, roll out family planning programs, eradicate disease vectors, draft and enforce environmental regulation, build low cost housing, refit systems to improve energy efficiency, ...

[mrb]

"We cannot decide if an activity is valuable or not based solely on if it creates jobs."

You are right. However Bitcoin is not pointless and comparable to digging holes and filling them up. The simple fact that this financial network is censorship-resistant is a huge benefit to society, already positively impacting many people.

[MereInterest]

I'd see that as a negative, rather than a positive. Being resistant to censorship means that it is also resistant to correction. With Bitcoin, there is no way to reverse a fraudulent transaction. If a debt is owed, one could not put a lien on bitcoins to prevent them from being spent, as one could with regular currency.

[CyberDildonics]

It depends on your application. You are thinking about this from the view of someone who spends money on common every day items with a credit card. Money is used for much more than that. One example is the ability to go to another country and take money out of an ATM with bitcoin. Suddenly cash and available money is more ubiquitous and you can use your money without permission.

Many people don't realize the value of these things until they experience a hiccup in their current routine.

[MereInterest]

Ubiquity and the inability to correct the record are two different properties. As it is, I already can take money out of an ATM in a different country, with my ATM card. Yes, there is a fee applied. No, I don't consider that a large downside, as currency exchanges are the price a society pays in order to avoid getting into Greece's current situation, where the currency can't be adjusted to help the economy.

[a_imho]

1. Miners currently use approximately only 0.0012% of the energy consumed by the world.

Actually if that number is accurate, is quite shocking.

[notahacker]

As a back-of-the-envelope calculation, cryptocurrencies are [over]valued with a market cap of ~$70bn (from https://coinmarketcap.com/) of which BTC itself constitutes just under half.

World broad money supply is estimated around $80 trillion (not including many other stores of wealth and financial instruments which are not money). So the first conclusion one could draw is that cryptocurrency is also a surprisingly high proportion of currencies in circulation, at around 0.1% (treating cryptocurrencies as equivalent to broad money and exchange values as accurate)

A second would be that cryptocurrencies which apparently use 1% of their capital value in energy per annum to function even at low transaction volumes are unlikely to be a viable long term solution to the problem of exchange.

[horusthecat]

My off-the-cuff response is that cryptocoins behave more like a commodity more than a currency, so their value is always relative to cash, not part of global cash reserves.

[Sholmesy]

Agreed. This is a non-trival amount of energy. Given the infancy of the technology, it is likely to grow.

Edit: non-significant -> non-trivial

[Joeboy]

> This is a non significant amount of energy.

Maybe you meant "non trivial" or just "significant"?

[Sholmesy]

Thanks, didn't have my morning coffee!

[aerique]

I assume you mean shockingly high?

[a_imho]

Indeed, though I have to admit I do not really pay attention to crypto currencies.

[mrb]

1. See last paragraph in my post's argument 1. The point I raise is that it makes no sense for people to be so outraged and vocal about miner's energy use and apparently don't care about much bigger energy users/wasters by multiple orders of magnitude... At the very least this makes critics hypocrites as they themselves waste energy and don't to care about it (eg. driving a car with low fuel efficiency.)

3. It's not a fallacy. If X is worthwhile to society, and if the only one way to obtain X is to spend energy doing Y, and if alternative uses of this energy are not clearly superior (for example doing Z), then Y is not an energy waste. X = permission-less censorship-resistant decentralized financial network. Y = mining. Z = for example building desalination plants to provide clean water to third-world countries.

4. You seem to recognize the validity of this argument :) See the reference I give in the post: https://venturescannerinsights.wordpress.com/2015/09/04/the-... these are not mining companies.

5. This argument shows that even if you are unconvinced by arguments 1-4 and holds the view that mining is wasteful, you should at least recognize that it is becoming less and less wasteful over time.

[Jabanga]

>Even Ethereum abandoned the idea of completely switching away from proof-of-work because they realized PoS isn't completely workable

No it didn't. I follow Ethereum development closely and I know for a fact that's absolutely untrue. I'm not sure why you're misleading people about this.

[mrb]

You are right, I should have said "temporarily" not "completely". They abandoned the idea of switching to 100% PoS right away, and instead are trying to work on a hybrid PoS/PoW. Source: https://twitter.com/vitalikbuterin/status/851503370250661889 (100% PoS remains the ideal goal, but they have been unable to work it out yet)

[gus_massa]

I think they didn't abandon the idea, but until they have a working prototype it's just a idea. Nobody is sure if it's possible to use in the real word, were many people will try to steal a few million dollars if they can.

[fghtr]

But you both did not give any links...

[ckastner]

> 2) Because a permission-less censorship-resistant decentralized financial system has the potential to truly improve society, hence worth spending energy on it.

The other side of the coin: a permission-less censorship-resistant decentralized financial system also re-introduces a substantial set of significant problems that societies have already long solved for themselves.

[TeMPOraL]

In the words of Scott Alexander:

"People are using the contingent stupidity of our current government to replace lots of human interaction with mechanisms that cannot be coordinated even in principle. I totally understand why all these things are good right now when most of what our government does is stupid and unnecessary. But there is going to come a time when – after one too many bioweapon or nanotech or nuclear incidents – we, as a civilization, are going to wish we hadn’t established untraceable and unstoppable ways of selling products."

http://slatestarcodex.com/2014/07/30/meditations-on-moloch/

[CyberDildonics]

Predicting a future of devestation. You would think we would be past buying into that ruse by now.

[ExcilSploft]

Is it that far fetched? Right now most disk encrypting ransomware demands bitcoin for decryption.

[CyberDildonics]

Are biological weapons being used to mass murder people a natural extrapolation of ransomware?

[ExcilSploft]

No and I take your point, but I guess the extrapolation is the anonymous nature of blockchain cryptocurrencies enable a class of crime that would be much more difficult with traditional currencies.

[TeMPOraL]

We're not that far yet, but the potential is there. The closest thing are the current bitcoin-powered dark markets, where people buy various kinds of drugs (of various levels of harm and legality), including custom-made chemicals.

[lightedman]

You haven't done your research, because ETH did not abandon PoS, and permission-less distributed databases have existed since the 70s and failed then for the same reason all these will fail now - you simply cannot scale and keep it distributed, it all ends up getting centralized to a few key points because of the cost to maintain the exponentially-growing distributed infrastructure.

[legulere]

How are bitcoin and ethereum censorship-less and permission-less? Most cubans for instance don't have access to the internet without a permission. China could shut down the bitcoin easily by simply blocking bitcoin traffic.

[CyberDildonics]

Is a USB drive really plug and play if it doesn't even work on my 20 year old flip phone?

Why would you conflate two separate systems like that?

[walterstucco]

> a permission-less censorship-resistant decentralized financial system has the potential to truly improve society

It is dependent on a huge amount of cheap energy

I wouldn't call it censorship resistant yet

Raise the cost of the energy and only the ones with deep pockets can decide what is true

[chillingeffect]

This comment led me to compare crypto mining with the American Gold Rush in the 1800s.

An intriguing difference might at least some miners struck it big due after finding huge geographical deposits of gold. In cryptocoins, though, the flatter distribution of the space means people tend to get out what they put in.

[trophycase]

They most definitely have not abandoned Proof of Stake

[Nursie]

>> No there is no other way.

There are various other ways, however many of them ditch the decentralised-trust nature of cryptocurrency. If this is not something important to you (which it isn't to that many people) then crypto-currency represents a huge waste of power for no appreciable gain.

[DiThi]

PoS is perfectly workable, but one wouldn't switch overnight for a myriad of reasons. Ethereum will eventually be PoS for sure.

There's also systems without "mining" like iota, which has every sender verify other two transactions, so it's very scalable and has no fees. The drawback is that having no mining, all tokens were created on genesis.

[dvfjsdhgfv]

It would be true in an ideal world, but in practice governments of different countries can and do regulate what can and cannot be done with bitcoins. Most of this is based on fear of losing control.

[TeMPOraL]

> in practice governments of different countries can and do regulate what can and cannot be done with bitcoins. Most of this is based on fear of losing control.

Most of the time people seem to say as if that was a bad thing. But consider what happens when government does ultimately lose control. You get Somalia.

As it is today, it seems governments worldwide agree cryptocurrencies are overhyped. They all seem to be saying basically: "it's cool you're having fun with new Internet points; just don't forget to fill in your tax form".