[Fede_V]

I'm horrendously worried about crypto gaining more marketshare as long as proof of work crypto remains mainstream. It has significantly worse externalities than just about any company I can think of (including defense contractors/vaping companies), and, if it grows larger before we have clean energy, then we virtually guarantee we won't be able to tackle global warming. We are going to bestow a world that will be significantly worse than the one we inherited to our children, and, it's not like the carbon emissions that crypto is creating are used in the service of creating valuable technology - it's literally useless proof of work.

I've worked in tech for a long time now, and I believe the stereotype about amoral techies is completely untrue - yet seeing the adoption of crypto among my peers is really depressing. I'm not sure how so many of my peers who would never ever work for a defense contractor or a vaping company are willing to work in crypto at this point. My objections are not ideological - if someone invented a cryptocurrency that was completely green and it would take over the market, I'd be totally in favor of it.

I would genuinely like someone to explain it to me, because, the kinds of essays I've read that try to argue that crypto is actually good for global warming are so shoddy that I can't believe people would take them seriously absent a huge dose of motivated reasoning.

[gonehome]

I'm skeptical of proof-of-stake, proof-of-work seems like the main innovation of cryptocurrencies that differentiates them from the standard financial industry?

If you swap out POW for POS (or worse clearing house type trust orgs like Stellar) then aren't you just putting trust into some incentive based system no different than existing financial systems? Just instead a government you're trusting some other entity. You get faster throughput and less energy waste, but you lose the mathematical guarantee that was kind of the entire point?

I think climate change is a serious issue that would lead to change (likely bad), but I'm not sure it's a true e-risk or that cryptocurrency POW changes the tide that much. Feels like an irrelevant (somewhat identity-ish/political) side debate to me? (see Matt Yglesias' comments in this: http://rationallyspeakingpodcast.org/show/episode-251-the-ca...)

Happy to think about arguments that would change my mind.

[stormbeta]

And this is exactly why I'm so skeptical of cryptocurrencies in general. There doesn't appear any viable way to make them work as currencies that doesn't either have horrendous externalities, simply replicate what existing currencies already do (often poorly and with many downsides), or often both.

I don't think it's a coincidence that even a decade plus later, the primary use cases for crypto still seem to be grey/black market deals, speculative investments, and pyramid schemes.

[abecedarius]

> way ... that doesn't either have horrendous externalities

The CO2 emission externality need have nothing to do with Bitcoin or any other proof-of-work chain. Tax carbon at whatever level makes sense and Bitcoin will adjust. (As I understand it, even currently Bitcoin mining mainly uses renewable energy, because it's cheaper; and it's trending cheaper still.)

The externality is at the power plant, not the use. Banning a use is like basing your server's security on client-side Javascript.

[jsiepkes]

> Tax carbon at whatever level makes sense and Bitcoin will adjust.

> The externality is at the power plant, not the use. Banning a use is like basing your server's security on client-side Javascript.

How would that work? Applying the same carbon tax on farming as on bitcoin? You always need to differentiate on use. Otherwise we could also just have a single income tax and be done with it. However taxing food as much as a Ferrari doesn't really make sense.

[abecedarius]

The whole purpose of taxing carbon is to reduce carbon emission to the efficient level and shift energy consumers away from uses that are not worth the cost in carbon emission.

Say you're a bitcoin miner powered by a coal plant. A carbon tax is imposed. The price of your power goes up. Your competitors, powered by solar, are unaffected. Maybe you keep going at the higher price; more likely, if the tax was set at anything like the genuine externality, you shut down. Possibly you keep going for a while, winding down your ops at this location but moving any new ones to find affordable power. Sucks to be you if you didn't anticipate the tax (which seems implausible, they won't announce it effective next Monday), but Bitcoin itself will hardly notice.

Say you're a farmer also in coal-plant-land. Aren't farmers powered more by internal-combustion engines than grid power? That should be carbon-taxed too in this world, and that's good: you want farming, where it's climatically most expensive, to shift to less-CO2-costly methods and crops. Farming spends energy on a much wider set of tasks, some of them more essential to the output than others, and some outputs more inelastically demanded than others. For some of them you adjust, for some you continue and pay the higher price. The ones you adjust were not worth the carbon cost; the ones you don't were. You have to charge your customers some amount more, depending on how essential the coal turns out to be in your case. Maybe, like the bitcoin miner, you stop farming, or shift to some sort of less-intensive organic farming; maybe you don't. Either way, it's more likely the right decision for the planet! We stopped pretending that dumping carbon is side-effect free.

You don't "differentiate on use" by politicians and bureaucrats deciding what's naughty or nice. They don't even know! It's an incredibly complicated problem! They further have no real incentive to do it even vaguely right, rather the opposite: any competent politician can look to the public like they're public-spirited while favoring concentrated interests. Was the FDA just stupid for banning the J&J vaccine the other day? No, they're fundamentally misaligned with the public interest.

Re painting cryptocurrency as a nobody-needs-it Ferrari, see https://news.ycombinator.com/item?id=26654767

[Moodles]

Not to even mention the even more useless buzzword application of blockchains to business to pump up stock prices. I'd go as far to say that cryptocurrency is the most "useful" application of blockchain to date. And even then, it appears only truly useful for dark web transactions and pyramid schemes. Why else would we use a wildly fluctuating currency that takes 20 minutes to send a payment?

[cwkoss]

Dollar hegemony has many horrendous externalities as well.

[danimal88]

While that -might- be true, the question is whether the dollar, the RMB, the CAD, and every other currency have anything like the -direct- pollution cost of bitcoin, which my understanding is that they do not

[cwkoss]

I think the dollar undoubtedly has several orders of magnitude lower direct pollution costs, but also have several orders of magnitude higher indirect costs.

It's a pretty tangly web, so hard to know what to lump in as a comparison but in the superlative case consider: the federal reserve, many bank/FI departments tasked with securing and transferring money safely, auditing (public ledger has many benefits for transparency and reporting), money transfer industry, international relations, lobbyism, US military dominance, etc.

Bitcoin has zero employees, probably only thousands of people working on Bitcoin-interfaced systems. The network uses a large amount of electricity, but that's kind of it - there are few other costs to account for. All of those industries above collectively employ millions of people - should we account for only organizational energy consumption or do we also account for salaries and thus private energy consumption of all of the individuals necessary to support dollar hegemony?

I think it would be really interesting to find a number for "for each dollar in existence, how much is spent per year preserving the dollar's position as the global reserve currency?" How does this number compare to inflation? If it is greater than inflation, does that mean that dollar hegemony is unstable and its fall is inevitable?

[meowkit]

Can you share how Bitcoin has a direct pollution cost?

Last I checked BTC primarily uses excess electricity in the cheapest regions of the world. What if BTC only ran on solar power?

[cwkoss]

Of the estimates I've read, it seems like BTC uses about 60% green energy. Which is about double the 'green-ness' of the broader energy economy, but it's still a significant amount of 'direct pollution' from carbon sources.

[gonehome]

I remain cautiously optimistic about the underlying idea and core technology (even if there's a lot of pyramid scheme snake oil surrounding it).

Interesting applications do exist: https://news.ycombinator.com/item?id=24242005

Its applications are more interesting in countries that have unreliable governments and inflationary currencies (for now).

It also does provide something new (one way 'cash' transfers across a decentralized network).

[greg7mdp]

I don't see any reason to be skeptical of proof-of-stake. The ethereum beacon network has been up and running fine for months. And POS negates the power usage objection to POW.

[cwkoss]

I don't think anyone debates that POS is more power efficient than POW. The controversy over POS is whether the game theory incentives of POS will be sufficient deterrent for bad actors at scale.

[mikkel]

The biggest argument is the other coin networks that have been running for years in production without proof of work. Nano and EOS have interesting consensus models. Nano manages to remove all inflation and transaction fees and is just a base level currency. EOS has an account fee and you have to rent resources but can do code execution on transactions (smart contracts). They both rely on accounts voting for representatives and have had similar problems with spam. Nano has been running for > 4 years and EOS for > 1 years.

[jtsiskin]

For the uninformed, what mathematical guarantees does POW have that POS doesn’t?

[jude-]

PoW is open-membership, because the means of coin production are not tied to owning coins already. All you need to contribute is computing power, and you can start earning coins at a profit.

PoS is closed-membership with a veneer of open-membership, because the means of coin production are tied to owning a coin already. What this means in practice is that no rational coin-owner is going to sell you coins at a fast enough rate that you'll be able to increase your means of coin production. Put another way, the price you'd pay for the increased means of coin production will meet or exceed the total expected revenue created by staking those coins over their lifetime. So unless you know something the seller doesn't, you won't be able to profit by buying your way into staking.

Overall, this makes PoS less resilient and less egalitarian than PoW. While both require an up-front capital expenditure, the expenditure for PoS coin-production will meet or exceed the total expected revenue of those coins at the point of sale. So, the system is only as resilient as the nodes run by the people who bought in initially, and the only way to join later is to buy coins from people who want to exit (which would only be viable if these folks believed the coins are worth less than what you're buying them for, which doesn't bode well for you as the buyer).

[CuriousCosmic]

One important difference in favour of PoS that isn't brought up often is the financial cost to pull off an attack. Pulling off an attack in most PoS protocols results in coin slashing for the attacker ("deletion" of coins used in the attack) and on top of that can (and likely will) result in coin devaluation as well. This makes a successful attack against a PoS system very very expensive. The resource is spent and actually burned.

With PoW however the GPUs or ASICs don't disappear or lose value after the attack (caveat that the ASICs can lose value if networks switch away from the algorithm it is built for). The hardware can be used to attack "competitor" networks or used again in another attack against the network or other networks in the future.

In this sense, I suspect that PoS networks are able to properly recover from successful attacks far easier as well as dissuade attacks from the offset.

[jude-]

It's far easier to break a PoS chain -- you simply knock the coin-holding nodes offline. Knock enough offline, and you can no longer reach quorum. If offline nodes' coins get slashed in order to reach quorum and restart block production, and the system permits forking, then why would offline nodes rejoin the original fork? They're incentivized to only consider forks where they're not slashed. If the system does not permit forking, then the system breaks once the attackers (1) stake a nominal amount of coins, and (2) knock enough other nodes offline such that they are the majority staker.

[CuriousCosmic]

This isn't really an attack unique to Proof of Stake. If a node goes offline they can lose rewards or even in rare cases have their coins slashed to some extent but that isn't inherent to a Proof of Stake overall. A decent number of Proof of Stake systems instead place reward penalties on pools/nodes that go offline. The idea being that it is a penalty for not maintaining sufficient infrastructure while also not being so severe that it could be leveraged in such an attack.

Most PoS algorithms I've seen instead reserve stake slashing as a penalty for malicious behaviour. Going offline isn't by any means inherently malicious. There are however plenty of actively malicious actions that can be detected and reacted against. Often for the more severe penalties it will require some level of community involvement in the recovery stage to limit opportunities for abuse.

Additionally, it shouldn't be easy to take a block producer offline and Stake Pool(or node) Operators should be preparing for these types of attacks. I've been watching some of the work being done in the Cardano Stake Pool Operator community and the various SPO guilds have decently sophisticated architectures. "Nodes"/"Pools" are broken up into Relays, Producers, and sometimes additionally Key Generators. Key Generators produce the periodically expiring KES keys and pass them to the Producers on a schedule (to minimise potential attack surfaces). The Producers actually engage in the consensus using the keys provided by the key generators and communicate through the relays. The Relays handle the throughput and communication. This allows the producers (and by extension the key generators if used) to be largely shielded from the open net. This also allows producers and relays to have a certain amount of redundancy/failover. An architecture like that may cost more (and eat into rewards a bit more) however they are far more difficult to DDoS or compromise.

Since the barrier for the hardware is so low, a 1x2x2 or 1x2x3 (keygen x producer x relay) architecture can still be more than profitable (retaining 25% to 75% of the SPO rewards as profit). Additionally this has the advantage that various other income streams can be integrated in (state channel operation, compute nodes, storage nodes, etc) over time and the operation can be scaled up without compromising security or requiring a significant re-architecture.

Proof of Stake can be just as secure as Proof of Work but it requires that the incentives be structured properly and sufficiently hedged against potential risks.

[dlubarov]

It seems like your contention is that PoS coins are priced based on discounted cash flow, correct? I think that's a reasonable model, but it's hardly unique to PoS coins, and it doesn't really seem problematic.

> the system is only as resilient as the nodes run by the people who bought in initially

This point applies to any assets that generate cash flow, like stocks, yet they seem to have plenty of trading volume. And looking at some numbers on CoinMarketCap, it doesn't seem like PoS coins have lower trading volume than PoW coins. As one example, XTZ seems to have ~double BTC's turnover in the past 24h.

> these folks believed the coins are worth less than what you're buying them for, which doesn't bode well for you as the buyer

This could be said about most assets, even ones without cash flow like PoW coins. In practice there are other reasons for selling, like wanting to offset gains/losses for tax purposes, or wanting to buy food.

[jude-]

> It seems like your contention is that PoS coins are priced based on discounted cash flow, correct? I think that's a reasonable model, but it's hardly unique to PoS coins, and it doesn't really seem problematic.

It's very problematic if the system's liveness is tied to owning a coin. If I can knock PoS nodes offline, I can not only cause a quorum failure, but also I can cause the offline nodes's coins to get slashed (which is usually how PoS chains deal with this problem). Moreover, there's no recovery from this -- the temporarily-offline nodes are forever slashed, even if they come online later. (EDIT: I'm not limited to knocking nodes offline -- if I can commandeer them through a zero-day, the effect is the same: I make your nodes commit a slashable offense).

Contrast this to PoW, where even if you manage to knock a majority of miners offline, you ultimately have to keep them offline in order to prevent them from later generating and broadcasting a better chain than the one you want to exist. Even if you can physically destroy the majority of miners, the chain still lives on, and new miners can be built and brought online elsewhere.

> This point applies to any assets that generate cash flow, like stocks, yet they seem to have plenty of trading volume

Trading volume is easily faked in crypto-land -- a whale just sends coins to themselves. I'd like to see some hard evidence that the volumes are not from wash-trading. Also, this isn't relevant at all to the system's resilience.

> In practice there are other reasons for selling, like wanting to offset gains/losses for tax purposes, or wanting to buy food.

I didn't say you don't sell coins. I said you don't sell enough of them that the buyer can use them to increase their rate of coin production.

[melolife]

Open membership is arguably a worse problem than stake requirements, as PoW participants do not have a vested interest in preserving the integrity of the chain. Ethereum 2 actually throttles validator entries and exits for exactly this reason.

As an example, any sufficiently powerful entity can temporarily and affordably commandeer computational resources with the intention of disrupting the chain.

Under PoS doing so would devalue your (presumably enormous) stake, so participants are at least incentivized to act in the interest of the chain.

[jude-]

Open membership means that the chain stays alive as long as anyone in the world wants it to. This isn't true for PoS chains -- you must to acquire tokens to keep the chain alive.

> As an example, any sufficiently powerful entity can temporarily and affordably commandeer computational resources with the intention of disrupting the chain.

A sufficiently powerful entity can DoS enough staked nodes that quorum can't be reached, and thereby force a PoS chain offline indefinitely for far less energy. If they're clever, they'll buy some PoS coins first, so that once the offline nodes all get slashed, they'll be the majority staker.

[sibeliuss]

It's worth investigating Algorand's Pure Proof-of-Stake model and seeing how it compares to other POS implementations: https://algorand.foundation/algorand-protocol/about-algorand...

[jude-]

If the means of coin production require owning coins, you have these problems that PoW does not have. Definitely true for Algorand.

[sibeliuss]

Owning coins is a means of validating the network and appending to the blockchain, not producing new coins.

[Paradigma11]

Staking rewards for new block generation is inflationary, so you are just not losing value by staking. Additional value is generated by fees and store of value.

With PoW coin you are constantly devaluing your share of the blockchain by paying some third parties operating giant gpu farms and hydroelectric dams.

[jude-]

> block generation is inflationary > store of value.

I stopped reading at this point.

[Paradigma11]

Good to know.

[RhodoGSA]

Thanks for this little tangent, it was pretty informative. what's your opinions on nominated proof of stake?

[gonehome]

This is the best (and also approachable well-written) book on the topic that I've found: https://bitcoinbook.cs.princeton.edu/

My (possibly incorrect) understanding is that POW is computationally expensive because that large investment of computation is what creates a chain of successive blocks (the blockchain). This prevents someone from rewriting history of transactions on the public chain (which would allow them to 'double-spend' or to take their money back).

POW currencies are guaranteed to prevent this kind of abuse unless any individual entity is able to get more than 51%. There's an incentive in addition to this because corrupting the integrity of the network would also devalue the currency. Larger networks (like BTC) are harder to do a hostile take over of because it's harder to get that much compute (though mining centralization is a risk).

POS relies on some variant individuals 'staking' coins to enable transactions, this means putting them up in escrow sort of in the network (they are paid small fees for this based on how much they stake) and if abuse is attempted, the system takes those staked coins away. There are no mathematical guarantees outside of this incentive.

POS is not as standardized across different currencies so I may be missing important bits in my understanding.

[plokiju]

> POW currencies are guaranteed to prevent this kind of abuse unless any individual entity is able to get more than 51%. There's an incentive in addition to this because corrupting the integrity of the network would also devalue the currency. Larger networks (like BTC) are harder to do a hostile take over of because it's harder to get that much compute (though mining centralization is a risk).

Couldn't this be re-written as:

> POS currencies are guaranteed to prevent this kind of abuse unless any individual entity is able to get more than 51% of the staked currency. There's an incentive in addition to this because corrupting the integrity of the network would also devalue the currency. Larger networks (like ETH) are harder to do a hostile take over of because it's harder to get that much stake (though validator centralization is a risk).

My (non-expert) interpretation is that staking is just an abstraction of mining, and they are secured by the same incentive system

[gonehome]

This comment above does a better job than I did at explaining why the staking incentive is somewhat flawed: https://news.ycombinator.com/item?id=26810686

[plokiju]

> PoS is closed-membership with a veneer of open-membership, because the means of coin production are tied to owning a coin already. What this means in practice is that no rational coin-owner is going to sell you coins at a fast enough rate that you'll be able to increase your means of coin production

It seems to me like they're arguing that PoW is more egalitarian/decentralized, which may be a fair point. But using the same argument, attackers being forced to buy stake in the open market should make PoS even more secure against 51% attacks than PoW.

I think this is a good post explaining the tradeoffs: https://vitalik.ca/general/2020/11/06/pos2020.html

[SkyMarshal]

PoW is anchored in some real-world value, the cost of electricity. PoS is not. Most of PoW’s security and tamper-resistance advantages derive from that characteristic.

[yokem55]

Ultimately, proof of stake has the same property. The value of the network that the stake protects is rooted in some kind of real world value. The tokens from the network can be traded for fiat money that is worth something. So, unless the value of the network being protected falls to zero, the stakes themselves are worth something. An attack on a proof of stake network still requires the resources to procure the attacking stakes. So, you still have a direct relationship between the item being protected and the cost of the protection.

[yokem55]

I would add - by focusing on using the economic value of electricity and stacks of special semiconductors to secure your network, you actually are making the network vulnerable to folks that can effectively create arbitrage on those specific narrow resources. In contrast, proof of stake can leverage a much broader range of economic resources that have far fewer arbitrage opportunities.

[sireat]

I am surprised a workable IPv4 based POS coin has not been produced. The consensus protocols are already using IPv4

That is one IPv4 address -> one unit of vote

Difficulty adjusts based on how many IPv4 addresses participate

Sure, it gives advantage to Apple, MIT or anyone with /8 block and disadvantages citizens from some countries with very small allocations but otherwise it could be scaled to whole world while staying truly green.

I suppose the hard part is figuring out the stake when multiple people on the same IP address want to participate.

[Paradigma11]

The staking rewards for block generation are inflationary. So you are penalized by not staking and it does not matter how long how stake your tokens your share of the blockchain does not increase. You also have to pay taxes for staking rewards in most countries so you have to sell at least that much. In the context of a bc with smart contracts you are basically owning and operating a share of a cloud for financial services. Those customers pay fees which get distributed with the staking rewards.

This does sound a lot saner to me than having some cabals operating giant computer farms and hydroelectric dams to generate new blocks. Their interests are different than those of token holders and having to pay for all those gpus and electricity is just stupid.

What mathematical properties are you losing?

[fumblebee]

Couldn't agree more.

I struggle to comprehend how an energy obliterating and (relatively speaking) primitive technology like Bitcoin is the top dog in this space. Sure, first mover advantage counts for something, but come on - how has superior tech not yet left it in the rearview.

In a space that moves at such rapid pace with heavy investment and buckets of innovation, at some point the crowd surely will migrate en masse to a PoS based blockchain like (most likely but won't be fully operational until ~2022) Eth2, or (less likely but still in with a shout) Algorand, Tezos, etc.

[Nursie]

> Sure, first mover advantage counts for something, but come on - how has superior tech not yet left it in the rearview.

To me it demonstrates perfectly that this market is largely speculation based on brand recognition and number-go-up-tech rather than any use of the currency. If it was based on use and capabilities then yes, we would expect BTC to be superseded by its more capable cousins.

But it's not.

[adventured]

I largely agree. It's specifically because Bitcoin is perceived to be a place to hide capital from inflation - and the world is comically flooded with capital right now, chasing anything and everything - while all the central banks are busy vaporizing their garbage fiat. Bitcoin is not a currency. It's bizarre that people keep calling it that, years after it became obvious that it's not. If it were a currency, Bitcoin would collapse rapidly toward zero, because it's wildly impractical as a currency.

The Forbes list of world billionaires features 2755 names. They gained $5 trillion in wealth over the past year. Bitcoin is a trivial toy next to the wealth in the world today. A fun little token play thing, a place to hedge a couple of bucks, it goes in the basket.

[Nursie]

Which seems to me exactly like the sort of thing that will work out great, until it doesn't.

Best of luck.

[New_California]

Bitcoin is the only cryptocurrency that is very hard to change. This property is critical for sound money, including for the emission schedule.

Other coins are easy to change and so cannot be relied upon to preserve any properties, including emission schedule.

Vast majority of coins is also not decentralized at all and being so prone to get effectively regulated.

[rodiger]

This is just plain incorrect. Every cryptocurrency's rules can be changed via hard fork. Bitcoin doesn't have any magic property that guarantees there won't be a hard fork affecting the emission schedule.

[New_California]

Bitcoin actually has this "magic" property of being very, very hard to change. It is derived from community extremism against changes and from the huge number of players who would need to agree and then huge number of existing deployments that are very slow to upgrade.

Bitcoin is hard to change the similar way TCP/IP protocol stack is hard to change.

[rodiger]

It's easier than you think. Just five organizations command >50% of hashpower[0]. I don't think it's likely to change soon but it's not out of the realm of possibility, and it's not even the most decentralized cryptocurrency in terms of difficulty to enforce new network rules.

[0] https://news.bitcoin.com/5-mining-50-btc-hashrate/ (I fully understand this is a pro-BCH site but their sources are accurate)

[seanyesmunt]

Bitcoin's "magic property" is the faith that the miners have. It has been hardforked, but the majority of computing power has chosen to stay on Bitcoin.

[rodiger]

I fully understand that, but sentiment can change. It's disingenuous to say it won't change in the future because it hasn't yet changed.

[rawtxapp]

PoS is yet to be proven, I'm really hoping eth2 shows that it actually works, because the other ones with PoS aren't that heavily used or tested in adversarial ways.

When it comes to money and value, the utmost important thing is security, that's the tradeoff that Bitcoin makes and that's what people are buying into. Everything else is secondary.

[toolz]

cardano is completely distributed PoS 46 billion market cap (5th largest crypto) - I'm not sure what you mean by "yet to be proven"

it also theoretically supports 1MM tx/second - to put that into perspective VISA does somewhere in the ballpark of 2k tx/second (but theoretically can do much more than that I'm sure)

[CuriousCosmic]

As much as I like Cardano and as much as I have faith that it will succeed, I think you might be overstating what has been accomplished so far.

- The network is decentralised and running Proof of State.

- The network is not currently running automated peering. Block producing peers are manually selected by stake pool operators at the moment. This doesn't necessarily make the network more centralised but it exposes certain risks. A node update (and I believe a protocol update as well) will be coming out in the next 2-3 months that will transition SPOs to running automated peering.

- The network currently sits around 250-300tx/s max.

- A near term (next 6 or so months) protocol revision will be raising that limit to around 1k tx/s.

- Hydra (isomorphic state channels) allows 1k tx/s to be processed per state channel (which then periodically checkpoints against the network) and was demonstrated to maintain these performance metrics up to 1k state channels.

So the network is decentralised and it is doing very well however it is not currently capable or currently theoretically capable of handling 1MM tx/s. It can however handle an impressive amount of transactions compared to many other decentralised networks at the moment. The protocol revisions that will allow close to the stated 1MM tx/s are completed with corresponding papers (containing formal proofs and simulations to support tx rate and security claims) already accepted to or well received at cryptography conferences.

Cardano is doing very well and moving at a solid pace however overstating where the project is and what it is capable of will only serve to undermine outside perception of the project.

[New_California]

No, Cardano is still centrally coordinated, with an intention to go actual PoS some day.

[CuriousCosmic]

I'd be curious what you mean by centrally coordinated and not PoS?

There are certain ways that Cardano is not yet fully decentralised to be sure but the network is operating as a proper decentralised PoS network.

The network has been transitioning from Federated nodes to Decentralised nodes (transferring by about 2% every 5 to 10 days) for the past few months. The d parameter (marking the transfer from 100% federated(1.0) to 100% decentralised(0.0)) ticked down to 0 at the end of last month and block production is fully decentralised.

Where it is still centralised:

- Peering between block producing nodes is currently manual however automatic peering will be enabled before the end of the quarter.

- Development is largely controlled by the Cardano Foundation, IOG, and EMURGO. This isn't unusual in the decentralised software space however the plan is to transition to handling development/feature contracts via on-chain voting and treasury disbursement (and this is already being trialled through Project Catalyst as a decentralised accelerator program) within a year or so. All feature integration and HFC event mechanics however are properly decentralised.

[New_California]

Thank you for providing technical details.

[delaaxe]

Not anymore, it's fully decentralized since recently

[toolz]

no it's not, where would you even come up with the idea that it was?

[RobLach]

That's all still in the "research" phase.

[toolz]

45 billion market cap is "research phase"? Exactly what would make it move out of "research phase" then?

[monkeydust]

What would be the criteria for saying 'eth2 works' in your view ?

[deckard1]

I've often thought that, maybe, PoW crypto could be the Great Filter.

I feel like there is a good sci-fi book here. Bitcoin continues to gain speculators, continues to rise in "value", and humans are largely powerless to stop it. It ends up forcing humans to produce more and more electricity, thus heating up the planet in a horrible feedback loop. A crypto twist on the nanontech "gray goo" threat.

[nrp]

I think the sci-fi end state is an interstellar civilization that exists largely to grow an ever-expanding system of Dyson Spheres, harnessing entire stars solely to fuel proof-of-work cryptocurrencies.

[rednerrus]

Tether is how BTC stays at the top.

[rawtxapp]

Just put a carbon tax on everything that has environmental externalities, it's as simple as that, it doesn't make sense to target a specific industry, especially one that uses stranded/renewable energy.

[aeternum]

This is the simple answer. In the unlikely event Bitcoin moves to PoS, miners will just redirect their hardware to other coins

The simple solve: price the externality.

[skeeter2020]

broad-based consumption taxes are the best theoretical response, but politically no one is going to impose them at the levels needed to discourage consumption, and they almost always get perverted in their application with carve-outs and exemptions. Plus where does that money go? At best it's an inefficient recycling paradigm when what we really need is an at-source reduction in consumption in the first place.

[bhupy]

I think the idea is that it discourages certain kinds of consumption, and that's carbon-based consumption. Once upon a time, that could have been construed as a broad-based consumption tax simply because there were no non-carbon alternatives. Today, in 2021, that's not the case. Solar is already the cheapest source of electricity, and the relatively higher price of CO2 emitting energy is already a market-based "consumption tax". A carbon-tax just exacerbates and speeds up what's already happening. That's probably acceptable because time is of the essence as far as the climate goes.

[aeternum]

The goal should not be to discourage consumption, the goal should be carbon neutrality.

Any industry such as fossil fuel power plants must buy carbon offset credits/tokens from industries or companies that sequester carbon. Then let the market solve the problem. The credits/tokens may turn out to be very cheap.

[tovej]

No credible way to decouple production/consumption from emissions has been found. So no, we do need to start curbing consumption, especially among people in the top wealth quantiles (because they consume the most).

[dd36]

Cap-n-trade was a very successful program for reducing nox and sox emissions. If you create the right incentives, markets tend to find a way.

[tovej]

They still aren't decoupled from emissions. IIRC Emissions actually grow faster than GDP, so it's actually worse than a simple coupling: it's a feedback coupling.

All studies that have looked at seeming decoupling of emissions from the economy have found that they decoupling was due to outsourcing the emissions to other countries. Markets cannot solve emissions as long as value is a function of production.

[triceratops]

> we do need to start curbing consumption

You do that by increasing the cost of consumption. Everyone has, even wealthy people, have a price point beyond which something is too expensive for them.

[tovej]

I agree, and what better way than to impose a tax on consumption after X dollars. Or perhaps even a general luxury tax for goods that aren't absolutely necessary for your welfare.

Still better would be to start taxing natural resource usage, or even setting quotas with strict penalties. But it's hard to see politicians going along with it and I don't know if it can be monitored sensibly.

[dd36]

The goal should perhaps even be carbon negativity. Structure our economic systems such that removing pollution pays.

[abecedarius]

> politically no one is going to impose them at the levels needed to discourage consumption

This seems like one of those Overton-window true-if-and-only-if-the-media-say-it's-true things, like the supposed taboo against vaccine challenge trials which was recently falsified in a poll.

> where does that money go?

To the low-income people who are supposed to be the insuperable political obstacle to carbon taxes in the first place?

Politics is hard, yes, but this Overton-window kind of reasoning just drags at any real solution to anything. It's not worth any allegiance.

[jariel]

"it doesn't make sense to target a specific industry"

Normally, we wouldn't want to target one line of business over another because we want the market to figure out where the most value creation is, but it's not always the case.

In this case it makes sense to target people who are literally wasting electricity for supporting a Ponzi scheme. Even if BTC or Crypto is eventually a useful medium of exchange, there's still no reason at all to waste energy in it's proliferation.

Electricity transportation, and to some extent production - is partly socialized in most countries.

The market is not 'all knowing', it's full of asymmetries, we regulate all sorts of things for that reason.

[Tenoke]

>I'm horrendously worried about crypto gaining more marketshare as long as proof of work crypto remains mainstream.

It's not really remaining mainstream. Bitcoin is soon going to be the only big project (in terms of electricity used) with it. The industry as a whole is moving away from it quite fast at this rate, with ETH (second biggest) moving to PoS within a year, and almost every new project being a or on a non-PoW chain.

[PragmaticPulp]

The problem is that Bitcoin miners and investors have a huge incentive to keep the status quo.

Bitcoin is no longer the scrappy renegade alternative currency. It's big business now, with big institutional money behind it. The investors in these Bitcoin businesses do not want to see Bitcoin fall out of favor, and they're going to do everything in their power to keep it popular and profitable to mine.

[Tenoke]

Sure, but that's a Bitcoin problem not a crypto as a whole problem.

And let's face it - all the projects being built on crypto which can cause it to grow much further cannot be built on Bitcoin in the first place.

[randomopining]

STX - Stacks is built on top of Bitcoin and allows smart contracts through proof of transfer.

[bko]

Bitcoin and Ethereum are two entirely different value propositions. Ethereum is a lot more controlled by a central body, moves a lot faster and is optimized for entirely different things (flexibility, scale, building apps, etc).

You can't substitute one for the other. Both will likely continue to exist indefinitely.

[randomguy5421]

Eth is always moving to POS ---> THIS YEAR.\

Believe it when I see it.

[rauljordan2020]

It is already live since December 1st, 2020 https://beaconcha.in. The next step is to perform the actual "merge" from PoW to PoS which will happen this year

[gdubs]

There’s an article in the NYTimes today on the environmental impact of NFTs and I personally find the whole thing deeply upsetting. I care a lot about the climate. It’s maybe my number one concern long-term, especially as my kids are concerned.

I saw the buzz around NFTs, and thought - “hey, cool! A new way for artists to make some money directly from their fans.” Sounds great. Minted a few NFTs to learn how it all works.

And then I read incredibly distressing figures - some comparing the cost to a years’ worth of family carbon emissions. From clicking a button and waiting a few minutes!

I haven’t been able to get a straight answer on how true these stats are. But the possibility that minting a few tokens caused that much damage frankly makes me want to cry.

You might say, well, that’s stupid — but honestly, when you care about something deeply like the climate and you take pains to reduce emissions and do things to try and help — well, it’s incredibly upsetting.

[thamer]

The article: https://www.nytimes.com/2021/04/13/climate/nft-climate-chang...

[iso1210]

The problem is those emissions aren't being properly accounted for. Those causing them aren't paying the true cost.

[JohnJamesRambo]

Proof of stake is here in Ethereum 2.0 and it works great. Invest in that because this is the last hurrah for Bitcoin. The next cycle will be the “Ethereum is the new better Bitcoin” cycle. I say that as someone with almost all my net worth in Bitcoin but it has miserable transaction speed and energy usage. History has shown us that not innovating has never worked out for any company I can think of.

[dehrmann]

If all you care about is energy usage and transaction speed, the traditional finance system still wins.

Unless people are actively trading bitcoin enough where the transaction cost because an issue, there's little reason to trade in their tulip bulbs for iris bulbs. A bet on a cryptocurrency is a bet that people will think it's worth more money, not an investment in the underlying technology.

[capableweb]

> If all you care about is energy usage and transaction speed, the traditional finance system still wins

Does it though? There are so many things to consider when talking about the "energy usage" of traditional money. All the vans moving money around, manufacturing, items to support PoS systems, sorting, protecting the money and so on.

[Nursie]

> There are so many things to consider when talking about the "energy usage" of traditional money.

Yes, so many things that BTC will never do. It's vastly less efficient and offers nothing like the range of services and products of the existing finance system.

[base698]

Any idea where I can keep my money and generate 10 - 20% passive income like you can with DeFi in the traditional system? Most savings account have negative interest rates currently.

[pcthrowaway]

It's coming, but it's not there yet; you can't buy PoS ETH on any exchange I know. May be anywhere from 1-3 more years, but hopefully sooner. There have been coordinated efforts by the ETH miners to prevent the transition which has resulted in a political clusterfuck in the Ethereum landscape.

Cardano is the top cryptocurrency currently on PoS, and while I agree that the next cycle will be the ETH cycle, I think the one after that could be the ADA cycle.

[WanderPanda]

So you are saying your money is not where your mouth is?

[Fede_V]

I've been reading a few of the white papers about this, but I'd absolutely love to go deeper in this. Do you have any suggestions?

I am especially interested in assessment about CO2 emissions from credible sources (please, no VCs with zero training in physical sciences posting thought leadership pieces, I beg you).

[BobbyJo]

Maybe I'm a huge cynic, it certainly wouldn't surpris me, but I think the people pumping up crypto this cycle aren't necessarily the kind that care about the difference. If anything they'll stay away from ETH because it lacks a long term cap.

[yokem55]

One of the changes going into the July update is a transaction fee change that burns (throws away) part of the transaction fees. That will put some deflationary pressure on total issuance, while at the same time, when they switch to the staking chain total new issuance will be drastically cut since running a validator is far more efficient then mining.

What the long term inflation rate will be then is really set by the demand for transactions and how much congestion there will be on their network, driving up transaction prices and fees burned (or not).

[qertoip]

Incorrect, Ethereum is still using PoW.

[px43]

Why are you so worried about cryptocurrencies, and seemingly not worried about energy companies who actually are the ones who are creating the carbon emissions?

Using electricity and emitting CO2 are only loosely correlated, and in the case of cryptocurrencies are even less correlated because cryptocurrencies are dis-proportionally mined with energy from hydroelectric dams.

All of these articles about the ecological impact of cryptocurrencies only exist to divert public and regulatory attention away from the energy companies that are actually doing all the damage.

Oil companies did the same thing in the 70s when there was public outcry about plastic pollution, so they funded the "reduce reuse recycle" campaigns, and the crying Indian commercial etc, all to divert responsibility from the companies manufacturing the plastics to the consumers who use them.

There is a documentary called "The Story of Plastic" which covers this strategy, and how successful it has been for them in the past.

[bko]

Bitcoin allows you to convert excess energy into money. Because it can be mined anywhere at any time, it's priced to the global low cost of energy. It doesn't make sense to use expensive energy sources.

Much of energy production is meant to meet peak demand and storage is difficult. Bitcoin mining is a great way to monetize energy that has a low market value and would likely go to waste.

If you want to price energy or put a tax, by all means. But you shouldn't discriminate against particular usages of energy. You're angry at the wrong thing

[PragmaticPulp]

"Excess energy" is a myth.

It's 2021, and transmitting energy across the power grid is easier and more efficient than ever before. No one is building hydroelectric dams in the middle of nowhere without a way to transmit that energy to somewhere else. It's still better to send the energy somewhere where they can replace coal-fired power plants than it is to burn it up mining cryptocurrency.

> Bitcoin mining is a great way to monetize energy that has a low market value and would likely go to waste.

It's exceedingly rare for energy to "go to waste".

Miners do not really care about anything other than profit. As long as the profit out of their operations is greater than the cost of electricity going in, the machines will be running.

[londons_explore]

Across most of the world there are at least brief moments when the price of electricity goes negative. It happens because some energy sources cannot quickly be shut down (eg. Nuclear), so it makes financial sense to pay to get rid of electricity for brief periods.

These negative prices don't coincide worldwide, indicating that there is not sufficient electrical transmission capacity.

[bko]

> Miners do not really care about anything other than profit. As long as the profit out of their operations is greater than the cost of electricity going in, the machines will be running.

Exactly my point. That's why they choose the global lowest cost of energy provider. And if you allow the price system to work, this would be the least valuable undesirable energy. Anything else would be uneconomical.

[enragedcacti]

or they just bribe a local official and make profit on what would otherwise be 'desirable' energy.

[barrenko]

This and - literally millions of office worker drones power a PC for MS Office/Excel whole day long for no net effective social or global benefit which the likes of Bitcoin will weed out eventually. And then one day we will replace Bitcoin with something even more effective.

[frongpik]

You imply good will of bitcoin miners. Once it becomes big enough for state actors, people in power will burn the Amazon forest or dry up entire rivers to mine bitcoin. Our civilization is all about ruthless greed and bitcoin exploits this nicely.

[skeeter2020]

this implies some sort of perfect price for energy which (regardless of the fossil fuels v. renewable angle) is a myth.

[jariel]

"Bitcoin mining is a great way to monetize energy that has a low market value and would likely go to waste."

Mining BTC is literally a waste.

There is no value creation at all.

Though some individuals may value it - it's not actually useful. The world economy does not grow one bit due to BTC or BTC mining - lives are not improved, products are not developed or made, or enabled etc..

Even if BTC were a very useful currency, it would still be wasteful to use considerable electricity to support it, because it's not necessary - it just happens to be the mechanism chosen to mine new coins.

[russdpale]

The problem is that you are solving the issue from the wrong direction. Like getting people to stop littering, the answer is to regulate the producers of the waste, not the end users doing the wasting.

The answer is to lobby governments for green energy, not rail against people doing PoW. People who fold at home are using a lot of energy also.

[mempko]

Yet the Producer of Waste here is coinbase no?

[burlesona]

Not Coinbase, the miners. The arms race dynamic makes electricity cost the only real limit on mining, and unfortunately the more a single BTC is worth the more kWh you can profitably burn to mine one.

[px43]

It's not the miners, it's the power companies.

Power companies have been burning shitty fuel to save money forever, and it's astounding that they've managed to shift the blame to consumers.

[kolinko]

PoW is on it’s way out - Ethereum is moving away from it and there is no reason for other cryptos to not follow.

The major player in PoW will remain Bitcoin, which won’t change.

But as soon as solar/wind become cheaper than coal, it will switch to green without a blink of an eye.

A random thought - I’m genuinely surprised Bitcoin folks didn’t yet crowdfund building a nuclear reactor for mining purposes ;) They crowdfunded first ASIC production lines which are 1000x cheaper, but at the time when Bitcoin was 1000x cheaper as well :)

[londons_explore]

Ethereum is quite centralised - people will follow the main developers.

Bitcoin probably wouldn't switch - there is no single person or group who could get majority support to force such a change.

[yokem55]

Ethereum's development structure is only "centralized" in the same way that linux kernel development is "centralized". There is a big process that generates consensus across the community from a lot of different parties. By the time a change get into a pending hard fork, it's been through multiple rounds of establishing buy-in. Were the developers to push a major change in that didn't enjoy the support of the broader community, it would be abundantly apparent.

[paulpauper]

it has been 5 years an ethereum is still a long way form any sort of POS adoption

[asenna]

The Beacon chain went live in December, 2020 and has been running without issues.

It now has about 4 Million ETH locked and staking which cannot be withdrawn - that's almost $8 billion worth of ETH locked until the move to PoS happens. Which means now there is some real pressure to make it happen soon enough (between 8-15 months).

The situation now with the Beaconchain live and running is very different from the past 4 years of research and planning.

https://beaconcha.in/

[delaaxe]

BTC is already mostly powered by green

[paulgb]

The study I think you’re referring to came from a crypto company. It’s the equivalent of when cigarette companies released studies saying smoking was good for your health.

[colinmhayes]

The green energy used by bitcoin miners would be used by others if bitcoin didn't exist. Instead those others use dirty electricity.

[deckard1]

It's weird seeing this argument that green energy is somehow free and infinite energy.

And yet, look at the market for Nvidia and AMD GPUs right now. The miners already know that gamers have been pushed out of the high end GPU market. Supply and demand doesn't go away. People still need electricity for doing things other than mining Bitcoin. All that happens is their electricity rates go up.

[hundreddaysoff]

Naive related question from a crypto n00b that a lazygoogle failed to answer:

I just plotted some Chia. I left my laptop open to do this. Usually I would just put the laptop in power save mode all night.

My understanding is that to actually make any Chia, I would need to wait ~1 year with my one 100GB plot with full-power mode enabled. Vs mostly with the case closed, as it is now, while I do other things.

And this doesn't even account for the rare elements etc needed to fabricate my hard disk.

So, general naive questions:

1. Vs Proof of Work, just how much better are Proof of Space/Proof of Stake/$HDOS_SUPER_AWESOME_PROOF in terms of energy consumption but also other standard measures of environmental impact?

2. How much worse, if at all, are they vs the null hypothesis of "modern" pre-crypto finance?

Has anyone run credible numbers on these things?

[colinmhayes]

Proof of stake has no mining, no datacenters. If proof of stake ends up working it would probably be almost as effective as Visa currently is. Visa is always going to be more efficient due to it's centralized nature. Currently one bitcoin transaction uses the same amount of energy as driving a tesla 2000 miles, so POS is quite an improvement.

[cwkoss]

Proof of stake still requires cryptographic validation of each block by each node, so it uses much less energy than PoW, but not none.

I think "no miners, still (distributed) datacenters" would be more accurate.

[ardme]

Proof of stake is not secure, there is no way to recover from a 51% attack. Proof of work and proof of space are much better.

[Nursie]

Proof of space/time is a bad idea and you're right, it will put incentives on manufacture and hoarding of storage space.

Proof of stake involves using staking of cryptocurrency to secure the currency. In theory it avoids the resource usage of the other types of proof. In theory.

[bob33212]

Like a lot of bubbles, there is FOMO and lack of understanding of the technology. It is easy to compare crypto to the internet. When the internet first started out a lot of people didn't invest in GOOG because it was not obvious where the revenue would come from.

People are afraid of making the same mistake here as well. "I don't know how BTC will generate cashflow outside of being a Ponzi scheme, but I assume the technology will advance and revolutionize finance" so they buy.

[api]

GOOG was a good investment because nobody invested in it. If everyone had invested in GOOG, it would not have been as good an investment since its success would already be priced in.

If the number has already gone up, you are too late. If everyone is talking about it, you are too late.

[gonehome]

I don't know what BTC will do, but this is a banality and mostly wrong in any way that's important.

"The number has gone up" for Google almost since it has gone public.

If you bought BTC at $1 and it went to $10 - is $10 too late? The number went up.

The hard part is it's hard to know the underlying value of things and a lot of value is socially determined by how others value something.

Why is gold traded as an expensive commodity? It has some tiny practical uses, but is that why the price fluctuates? People trade it because they think other people will trade it and use it as a store of value when other stuff is volatile.

Some people think BTC's scarcity guarantees provide a similar digital version of that. It's volatile now because it's still early and uncertain, but if that's true then BTC's price could be very high and it's hard to know if you're too late.

For other Non-BTC coins unlikely to get the same level of social buy-in their value is a lot more questionable imo. ETH has some real underlying applications (uniswap decentralized exchange, powering contracts, other tokens etc.). The privacy coins maybe can leverage that for a reason for people to use them. The others seem like even more fringe bets and more likely to be FOMO bubbles.

[tolbish]

That's what everyone thought about Bitcoin back when it hit the crazy high of $800.

[randomopining]

The function that BTC provides is a deflationary hedge. If you look at the big existing things for that, gold and silver etc... check out their market cap and you see btc has a ways more to go.

[yumraj]

My biggest worry with Coinbase IPO is that it will become too big to ban, as now it will impact the stock market and not just the minority few who own it.

[asenna]

Are you also worried Facebook and Google have become too big to ban?

I don't get this logic.

[unreal37]

What do you think about computers that are always on 24/7? Or TVs that never turn off (even if the screen is off)?

(ETA: 23% of household energy use is by always-on devices. The scale of this waste is MASSIVE.)

Devices in our life consume energy 24/7 when we're not even using them or needing them to be on. Energy conservation has a LONG way to go.

In fact, one could argue that the current stock market system is a huge waste of energy compared to the benefit it actually brings to "raising money for companies".

[PragmaticPulp]

Two wrongs don't make a right.

Yes, unnecessary energy waste of other devices is bad and should be reduced. Fortunately, we're making strides to reduce electronics inefficiency all of the time.

Proof-of-work cryptocurrencies are uniquely bad because they become less efficient with each additional miner. The maximum number of Bitcoin transactions was the same a decade ago as it is now, but the energy consumption is many orders of magnitude higher and continues to increase.

When someone adds an additional server to a server rack or buys a new laptop, we also get a net increase in value. The new technology is likely to be more efficient, so we get a net increase in efficiency. Proof-of-work is the only technology that gets worse and worse over time, and literally pays people to continue making it worse.

[Fede_V]

We should do a much better job of building energy efficient devices, but, the amount of energy that's "wasted" by things like TVs that never turned off is really tiny compared to the energy footprint of the crypto ecosystem.

Further, I worry that crypto will grow massively. If that happens, all bets are off. In its current state, crypto consumes more energy than several large countries - imagine a world where that's 10x or 100x and we've still not moved off of proof of work. What's global warming going to look like?

[unreal37]

"A study by the Natural Resources Defense Council found that the energy use from Always On devices across the US accounts for 23% of power consumption in the average household, or a quarter of any given electricity bill. Our own research confirms this."

23% of energy used by households is by always on devices.

Not "tiny".

[mmanfrin]

Idle CPU !== full-blast GPU.

[CFA178B]

I feel the similar. There are innovations out there and things that change the world and improve the way we think and, work and develop together, and there is this world of essentially greed, where we all just want to get out of where we are - because, why? We have to sell someone else the ticket out, to get richer ourselves.

Thankfully, this is a bonafied bubble and in a few months, it'll all tank again.

[the_local_host]

Bitcoin can only be demonstrably free of government controls by continuing to operate after being made illegal. I wonder if its creators actually intended to make it a target for legal sanction by building in conspicuous environmental costs.

Could there be an equilibrium where energy efficiency is achieved because miners have avoid using a noticeable amount of electricity to avoid legal trouble?

[frongpik]

A dissenting opinion. If those in power really cared about global warming, the WH would have codified work from home into law. Right now the big corps are pulling workers back to offices, so millions of office workers are going to drive back and forth again. Obviously, the media prefers to talk about the bad bitcoin instead.

[DCKing]

Having mined cryptocurrency a long long time ago when it was still a novelty, it's really good to appreciate just how bad the externalities are for cryptocurrencies. The incentives are created for people to buy the cheapest energy possible and just burn it up for a made up financial instrument [0], even when that comes with a significant carbon footprint. Even if mining is only a tenth as bad as the University of Cambridge thinks [1]. On a much more minor note, it takes up energy generation (renewable and otherwise) and chip production resources that could be spent on actual production instead of yet another financial instrument.

I'd be in favor of banning the trade of all PoW cryptocurrencies for this reason alone. There is no proper way of banning mining in general, and neither should anyone desire to ban specific types of computation. Banning its trade to strongly disincentivize the sheer senseless resource consumption is more important and much more clear cut than any financial arguments to do it.

I realize this would utterly devastate the current cryptocurrency market, but that's the point (at least for anything that isn't proof of stake). We should get this over with before our dependency on it further increases and the environmental damage gets worse.

The zeitgeist around this has changed substantially. PoW cryptocurrencies really aren't credibly grassroots and have been captured by whales. And there really isn't any application of PoW ledger designs outside of cryptocurrencies with significant mindshare either. For all of this - proof-of-stake cryptocurrencies should be an alternative. Not a direct replacement, but able to cover most use cases.

Coinbase was founded under a different zeitgeist and I don't blame them for jumping into this market. But I think that banning PoW cryptocurrencies should be strongly advocated, and once this realization catches up at the right level, they have a significant liability on their hands.

[0]: For the record, all financial instruments are "made up". PoW cryptocurrencies are the only one that come with blatant resource consumption however.

[1]: https://techcrunch.com/2021/03/21/the-debate-about-cryptocur...

(For the record, if a ban on PoW cryptocurrencies would come into effect today I'd lose money over it.)

[supernova87a]

Does a Bitcoin (for the $ value it represents) cost more to manufacture than an equivalent US $1? After all, a $1 of US currency represents some creation of work too, doesn't it?

Capital/currency represents someone doing work, something being dug out of the ground, something being created -- because these things cannot be created out of thin air. When the Fed creates money, it is doing so in tandem with some physical output of the economy (unless they are purely inflating unbacked by actual goods/services activity).

A US $ is not without cost as well, isn't that right? Currency is based on scarcity of something. Is it possible to have scarcity limited currency without some kind of work involved?

[NaturalPhallacy]

This is a fascinating topic to me and something I've been casually studying for over a decade so bear with me if I come across as blunt or whatever... I just mean to answer your questions directly and expound a little.

>Does a Bitcoin (for the $ value it represents) cost more to manufacture than an equivalent US $1?

Yes, because it costs quote a lot of electricity. And...

>After all, a $1 of US currency represents some creation of work too, doesn't it?

Nope. Costs effectively nothing. Not at all tied to anything tangible - even electricity - whatsoever. Via fractional reserve banking - for some reason we just...let banks do this - they create it with a keystroke and it costs nothing whatsoever.

It's why we have inflation every year. Banks are constantly creating USD and then charging interest for the privilege they were given to do so.

>A US $ is not without cost as well, isn't that right?

Nope. Gets made up out of thin air every day. A bank creates a loan. How do you think we got to $14 trillion USD? The treasury has never printed that much money. Only ~10% of USD physically exists (according to the Fed itself), and that's counting $100 bills minted decades ago. And banks only have to have 10% of the money to cover their loans. The number being the same right now is just a coincidence.

>Currency is based on scarcity of something.

Currency is based on whether or not people will accept it in trade. There are countless examples that prove that that is the sole criterion. Even stupid, shitty, hard to use currencies get used if they're what's accepted. Getting initial buy in for USD was based on gold. Then silver, and then in 1971, literal faith in the US government and nothing else whatsoever:

"and the unilateral cancellation of the direct international convertibility of the United States dollar to gold." (https://en.wikipedia.org/wiki/Nixon_shock)

>Is it possible to have scarcity limited currency without some kind of work involved?

Not in my opinion. Gold requires mining. BTC requires computing. But USD isn't a scarcity limited currency.

[themariner21]

Well, I’ll tell ya, and this is just me.

But last night, I re-watched Waterworld. It was the first time in quite a while.

And I found myself thinking, “Man, that life would be pretty cool. Global warming would be pretty cool. Why haven’t the ice caps melted yet?”

Honestly, I remember they were supposed to be totally melted by 2007. And then it got pushed up to 2014. And then 2018. And now here we are in 2021 with the same thick, boring ice caps, and Dryland is still not a myth.

I don’t know about you, but I’m getting tired of our boring pre-apocalyptic world.

If Bitcoin is now what will bring about the Waterworld, then I’ll tell you what: I’m all for it.

Just call me “The Mariner.” ‘Cause I’ll be marinatin’ in BTC awaiting the end of this world, and the dawning of a far more watery one.

[cbhl]

If Coinbase gets sufficiently mainstream, I suspect it will mitigate a lot of this.

A transfer of BTC between two Coinbase users can happen off-chain, which means skipping the work necessary to mine a block including the given transaction.

[hctaw]

Doesn't that defeat the entire purpose of cryptocurrency

[Hallucinaut]

Which then negates the espoused benefits of Bitcoin, no?

[lysecret]

So..... a bank?

[New_California]

You may like this:

https://www.coindesk.com/frustrating-maddening-all-consuming...

[cslarson]

As someone quite involved in the Ethereum ecosystem - I totally agree. I also believe the Ethereum network will switch entirely to Proof of Stake this year.

[delaaxe]

2 links:

- In today’s news: https://www.zerohedge.com/crypto/critics-claim-bitcoin-threa...

- From earlier: https://pomp.substack.com/p/bitcoin-mining-is-good-for-the-e...

[kbos87]

These are two great examples of just how thin and self-serving the counter-arguments to crypto being an energy hog are. I'll save you some time...

The premise of the first article is that the carbon footprint of fiat currency needs to include the impact of an endless cycle of debt, inflation, recessions, and wars that fiat currency enables. Regardless of whether or not that cycle is true and driven by fiat currency is one thing... assuming that cycle would end if we could flip over to crypto is solidly ridiculous.

The second article talks about the fact that 75% of miners use renewable energy. Dig a level deeper into the source they cite and you see that it's 75% of miners who use renewable energy as a part of their "energy mix" (LOL) - and that it's more like 39% of the energy used in mining is renewable. They go on to talk about Great American Mining's efforts to mine using captured methane emissions from oil & gas production. It's an intriguing concept but it's literally in its infancy, and the source they are focused on looks like it accounts for less than 1/3 of methane emissions - https://www.epa.gov/ghgemissions/overview-greenhouse-gases#m...

The fact that the reasoning is so very thin in both of these examples tells me everything I need to know. People just want a headline to point to.

[svachalek]

You are right but you need to substitute "proof of work" for "crypto" when you talk about energy hogs. Proof of Stake is also crypto and does not need to guzzle power.

[raverbashing]

Interesting the mental gymnastics people are going through to defend their interests.

The cryptofolks are trying for gaslighting and Firehose of Falsehoods to cover up for their energy wastage projects.

[qwertox]

I wouldn't be too worried. The industrial revolution brought us many things which were just as disastrous, for example certain chemicals, but these things can get regulated. DDT is no longer used like it was used in the 70s.

Let Bitcoin be Bitcoin, let the G7 (or whoever finds himself responsible) quickly regulate the power consumption issue, then PoW will likely disappear for mainstream applications. Luckily there are alternatives.

[regimeld]

It's a false equivalence (energy consumption, therefore bad). What if Bitcoin is solving a true market need (that is, preserving wealth in a truly decentralized way)? Would that make it worth the energy consumption?

You only need to look at what the current monetary system is based on -- the petro-dollar. Backed by the might of the US military, consuming crazy amounts of energy. What if Bitcoin eliminates the need for this?

[thesausageking]

Bitcoin mining uses less energy than video gaming. And because mining can happen anywhere, it tends to use clean energy or energy trapped at power plants that would otherwise go to waste, so it's CO2 footprint is much, much less than video gaming.

Other things that contribute more to global warming than Bitcoin include: the meat industry, Christmas lights, and the mining and supply chain around gold.

[gt565k]

Cardano is PoS and has been live for a while now.

It's slowly chipping away at Ethereum's use case and with smart contracts coming soon that are backwards compatible with Ethereum solidity code, it will overtake Ethereum over time.

There's other PoS blockchains that work and solve the concerns you have outlined.

[christkv]

I’m more worried about a hostile state actor like China using its dominance in Bitcoin and other crypto coins weaponizing it against our economies. Say crash the coins wiping out big actors causing domino effects in the markets.

[eloff]

I think we've given this proof-of-work experiment plenty of room to run, and it's time to end it as a failure through governments making it illegal.

The algorithm sort of worked, but the costs are too high. In the end those high costs led to efficiencies of scale leading to a few large miners controlling the whole blockchain. So it never lived up to the decentralized dream anyway.

Now it mostly serves to fuel rampant speculation and crime. It enabled a whole new category of crime through cyberlocker attacks (well not new, but made it so, so much more successful.)

The harm well outweighs the good. If it continues unabated proof-of-work crypto could double the energy requirements of the planet in just a few decades. It's not worth that. Kill it now before the consequences get worse.

[loceng]

And I still have yet to understand why should the rest of society who hasn't bought into Bitcoin shoulder higher energy costs because Bitcoin are driving up demand?

[sleepygardener]

This could be said about any commodity. Like because of gold hoarding banks/individuals driving up the demand rest of the society has to pay high price of gold for jewelry.

[loceng]

You're right, that's a moot point: it all boils down to unnecessarily, unreasonably transferring wealth from later adopters to earlier supporters (left holding the bag) in what amounts to very unsophisticated "investing" - whereby buying a stock of a company or say gold is buying for something very specific, contextualized, with annual reports and laws in place to attempt to lead to integrity within those organizations; not an apple to apple comparison that people consistently try to make.

[splithalf]

Agree and I can’t support companies that are putting their weight behind it (Tsla, sq). It incentivizes global warming, as a feature not a bug. Insane.

[baby]

> if it grows larger before we have clean energy, then we virtually guarantee we won't be able to tackle global warming

I stopped reading here.

[RazTeve]

did you dismiss this one already? https://www.yahoo.com/entertainment/could-bitcoin-solve-oil-...

[tim333]

I was thinking of trying to make a coin/token that would fight global warming to help counter that stuff. Basically if you buy it the money goes into a fund some of which goes to carbon capture / anti warming causes, some is retained for buying back coins for liquidity. Anyone think that's a good idea?

[praveenperera]

People always complain about Bitcoin's environmental effects.

What about Gold's, the current financial system's?

https://www.zerohedge.com/crypto/critics-claim-bitcoin-threa...

[dd36]

Bitcoin is already terrible and it’s structured to get ever more terrible.

[losteric]

1. whataboutism

2. Most currencies are fiat, not gold-backed

[praveenperera]

1. No it isn't, not if bitcoin can be a replacement for gold.

2. You didn't read my link

[amznthrwaway]

BTC wastes more power as it becomes more valuable.

This is the opposite of other major currencies.

BTC is an environmental travesty.

[paulpauper]

the problem will fix itself after the bubble bursts. Bitcoin doesn't provide anything of much value. It is just a speculative instrument.

[base698]

If you haven't seen the DeFi space you are missing out. 10-20% interest on crypto holdings. If you know where to get interest rates like that...

[RazTeve]

Worse externalities than the fiat standard which brought us genocides, nuclear war, and mass murder? Bitcoin could eradicate democide.

[yrral]

You never explicitly stated, but is your argument that the energy consumption of bitcoin is the negative externality?

First of all energy is not fungible, not in time and not in space. There are times where consuming electricity is actually beneficial for renewables and the environment. I think the main mental block people have is that are trained to "save electricity" and that "all energy usage is negative." I would argue that using electricity during periods of wind or solar oversupply is actually positive for the environment. Because of this non-fungibility of energy, proof of work mining can be a positive sum game for the environment. Let me explain:

Back in the days where all our electricity came from fossil fuels, I completely agree that marginal electricity usage was bad for the environment. However I think that thought has persisted with us even though it is no longer true 100% of the time. With renewables sometimes the marginal cost of electricity to our environment is near 0 or even negative (eg, during periods of higher winds and lower demand)

I predict that in the future as bitcoin mining becomes more and more of an efficiency game that you will see bitcoin mining be kind of a load balancer for the grid, effectively turning off during peak demand (or low supply) times and contributing to the base load during regular times. Of course this would be distributed across the globe, and you would see more plants running midday (with solar oversupply) and overnight (with wind oversupply) than you would during early morning and evening peak hours.

For example, it may even help the economics of building new wind plants. Eg, currently it may not be profitable to build a new wind plant because base load is too low that the excess power generated would need to be sold off at 0 or even negative prices. However if bitcoin mining could be turned on during these times and off during periods of high demand, there will need to be fewer peaker plants in operation and it would positively affect the economics of opening a new wind plant.

Bitcoin mining only cares about the cost of electricity at a given time, it is not like most other electricity demands that are very time based. With the large variance of electricity generation by renewables, I think bitcoin can in the future help smooth demand according to the real supply/demand curve.

It's kind of like a different implementation of the Tesla utility grid batteries. Instead of deploying power, you force the grid to build more renewable capacity (that the miners are paying for) that you use except in peak periods, where you turn off and effectively provide the grid with more power.

Here are 2 articles of a bitcoin mining company doing just this: https://www.bloomberg.com/news/articles/2020-09-01/bitcoin-m... https://www.forbes.com/sites/christopherhelman/2020/05/21/ho...

[throwastrike]

A green crypto will not work unless it’s tied to BTC. BTC is basically a ponzi scheme built on top of ponzi schemes on top of ponzi schemes. I too was optimistic about cryptocurrencies back in 2013-14. I thought we’d eventually have a global currency that’s beneficial for all parties involved. But no. There’s simply no interest in doing that. Everyone is just in it for the money.

[ipaddr]

Your dream and Mr Robots dream died along the way.

When all debt was erased everyone filled with panic flocked to the evilcorp coin.

The system exists today for a reason. Discover and elimate each reason to change the system.

[RazTeve]

Money has always been a tool for trading time

[spicyramen]

I would be worried more about living in a country with high inflation and been able to use cryptos. Can you share your specific concerns about environmental impact?

[knuthsat]

Complaining about externalities of PoW cryptocurrencies is like complaining about the fastest function that exists in your code and is magnitudes more efficient than anything else.

Externalities that pollute the ocean, air, rivers and cities are not present in crypto at all in the amounts that other industries and human activities produce.

There will be more people jumping on carnivorous and meat heavy diets than there will be people using electricity powered cryptocurrencies. Keto is trending more than cryptocurrencies.

The amount of destruction that factory farming will inflict on this world and is inflicting will never be reached by cryptocurrencies. There will be no deforestation, no waste mismanagement, no fertilizer drain, nothing.