It does incentivize a buildup of physical disk drives. And if it becomes successful, it'll likely spur specialized datacenters and hardware (think specialized tape drives) to try to outcompete in space, so it might end up just as centralized as bitcoin mining.
But the power costs will be much lower.
There also is a proof-of-time component, that does computation, but it is designed to not be parallelizable, which means that throwing additional power at the problem doesn't help you as much. Instead, imagine that each participant must spend a deterministic length of time to compute a solution, and the person closest to the internet backbone wins. But this proof-of-time component is also smaller subsidiary role to the proof-of-space.
So overall, it's a hybrid proof. Bram didn't go into enough detail explaining the actual proof-of-time or space in his talk, so I'm not sure if it all works, but if it does, then you can expect it to use less power.
Proof-of-Stake should use even LESS power, though.
I wish I could give a further critique, but I'm not familiar enough with the subject. There have been several persuasive comments posted to HN on the brittle nature of Proof of Stake, and the lack of hard answers to basic problems. Tacking it on as "this would use even less power" is a sign that perhaps these alternate schemes (including the one in the article) should be taken with a dash of salt and pepper.
Remember, the whole point of proof of work is to make it too expensive for "bad guys" to amass enough work to force their skewed version of the ledger[1].
As long as you have the constant rate of coin production, and difficulty adjustments to ensure it, you have the exact same arms race. Miners might not use more energy[2], but they'll still take away workers, land, metal, etc. from the real economy.
[1] They can't forge transactions, but they can publish empty blocks, effectively shutting it down.
[2] Although even that's doubtful: when you throw money at a problem, you generally end up throwing a proportional amount of energy at it too.
Interesting you don't consider this real economy. Do you think banking is also not part of the 'real economy'
Resources spent on PoW are effectively an arms race (outrunning attacks on the network that other systems don't need to deal with). It's meaningful to distinguish between resources devoted to zero-sum arms races vs. positive-sum satisfaction of human desires. Resources spent on PoW take from the latter and add to the former (at the macro level).
Edit: So yes, in that categorization, I would count (at least some) banking as in the positive sum part: they identify which opportunities for investment will pay back, and help enforce the agreement, thereby increasing over capital allocation efficiency and therefore wealth.
I think you got your point across fine. Obviously it doesn't look like 'real' work since there's so much power being spent, seemingly unnecessarily. But I think it is easy to underestimate how effectively it can replace the current financial system.
Why do you think wealth can't be generated with digital currency? What part of 'positive-sum satisfaction of human desires' you think current digital system can't satisfy? And I think you're looking at the resources spent on digital currency and the current financial system in a different way. There's no need of people spending lots of time and energy to safe guard big lock rooms.
Banking can move to the digital ecosystem just fine. And it is just in its first iteration.
I didn't say that. I said that the marginal unit associated with mining can't be credited with the wealth gains of digital currency applications. The criticism was of the mining costs you need to make this work, not the stuff you can layer on top of the currency itself. For it to be a social net positive, all those benefits would have to outweigh the mining costs.
>And I think you're looking at the resources spent on digital currency and the current financial system in a different way. There's no need of people spending lots of time and energy to safe guard big lock rooms.
Of course the financial system has to pay for similar "defense", but the comparison is not favorable to Bitcoin/PoW. The costs of securing conventional centralized mechanisms (or bank vaults) ramp up much slower than Bitcoin per dollar or per unit of wealth secured.
>The costs of securing conventional centralized mechanisms (or bank vaults) ramp up much slower than Bitcoin per dollar or per unit of wealth secured.
Actually I think the costs are much less, because after a certain point, you're not working to secure the network but racing to make more bitcoin. The network can be secure with much less resources than what is currently being spent.
It is a misconception to think that effort to mine is to fight external attacks. It is more like fight between banks to transact faster.
So banks would be defined as not real economy since they are transacting in debt, savings, and other instruments that exist on balance sheets, while Bitcoin mining would be defined as real economy since it bottlenecks on an energy input.
What century was that? I think financial services fit very well into the proper functioning of the real world. I believe it does provide very 'real' value and I'm ready to disagree with the definition of 'real value'.
>while Bitcoin mining would be defined as real economy since it bottlenecks on an energy input.
Bitcoin mining isn't competing with the wealth transaction part, but the wealth creation part. The wealth transaction part was secured a long time ago and now there are efforts to make it more efficient without dealing with the race for creation - like Lightning Network.
Still a lot of implementation details to be revealed, but looks really interesting.
So for bitcoin, if miners get X on average to mine it, they will spend X-ε in electricity (in bitcoins case), where ε is a tiny profit margin (or perhaps paying back investment).
This will remain true for any other coin and its proof scheme. The amount spent on generating it will asymptotically approach the amount received. The difference is that it might be possible for the byproducts to be useful.
The electricity costs of mining are about 20% of the price of Bitcoin - now as it was in 2011. https://medium.com/modern-money-matters/the-cost-of-bitcoin-...
The value of the token is what it costs to get it. You won't let it go for any less than that.
We'll also waste money to power empty hard drives.
Or is it sort of like mining bitcoin where a gpu is wholly used for mining?
I can imagine proof of space implemented by requiring nodes to store terabytes of random bytes, and compute the hash of specific subsets of this huge blob based on the last block in the ledger.
http://primecoin.io/ and a detailed article about it https://bitcoinmagazine.com/articles/primecoin-the-cryptocur...
I really wish coins like these would catch on more than they have. Proof-of-work is, to the best of my knowledge, the only system that provably works. If we could just harness that computational power to do useful work, we'd be in a great place.
This point keeps getting brought up and is patently ridiculous. It is computing something - a hash that is not easily reproducible that prevents attackers from modifying the ledger. And there is no other known way to do this, including proof of stake.
I think people who say this are just naysayers that are implying that crypto currencies have no use or value.
It doesn’t take the entire output of a coal-fired generator to handle trillions in trade volume on traditional exchanges. Minting coins doesn’t require an entire nuclear plant dedicated to it. Even for newfangled cryptocurrency, the human race can handle a hundredish billion dollar market cap without using that much energy. It’s incredibly wasteful and destructive to our planet. How do you think the Chinese are throwing cheap electricity at all that mining gear? Provinces covered in solar panels? (For that matter, how do you think the Americans are?)
Literally the entire concept of mining is brute force through the SHA2 problem space for nothing (to create the currency of value; nobody is saying bitcoin is worthless). Imagine if, instead, you dumped that energy into storage or even useful computation (again: proof of work, not the currency, is useless computation), and what you could do with it. There needs to be acknowledgment that brute force cryptographic hashing is a pretty serious design flaw. We just happen to be working around it now that bitcoin is a Big Deal.
To drive this home, Bitfury is building out 30+ MW mining facilities that require immersion cooling in 3M Novec, because state-of-the-art datacenter CRACs aren’t capable of rejecting waste heat from that kind of power density. We are talking 150+ kW cabinet-equivalents, where anything over 15-20 kW per cabinet with CRAC is currently considered noteworthy. AIUI, they have to underclock their gear when relying on datacenter air. Two-phase immersion is a cool, efficient technology that will probably reimagine the datacenter and should be developed further, but machine learning and science workloads are barely starting to crack that nut. Bitcoin ran directly to the front of the line of “incredibly power-intensive workloads that we haven’t encountered in datacenter design before.” That’s good and bad.
Try this as a habit: If in response to something someone else has said, you find yourself thinking, "That would be ridiculous! Who would think that?", then follow up by answering your own question: "That would be ridiculous, so the person I'm responding to probably doesn't think that."
Pondering how ridiculous it would be for you to choose to believe that someone else actually believed the first ridiculous thing is an exercise you can pursue at your own option.
Yes, the end result is a secured ledger. The path to that secured ledger is entirely wasted computing. Bitcoin is wasteful solely based on this fact. How can you consider Bitcoin wasteful as I do and also claim people who point this flaw out are naysayers who don’t get it? Your argument makes no sense.
It's not doing nothing. It's searching - searching for a hash that can be used to protect the ledger from attacks.
Saying it's doing nothing is like saying Dijkstra's algorithm is doing nothing until it finally finds the shortest path. That's just plain wrong. Sorry.
wrong, bitcoin network brute forces through sha2 to find the one that secures the distributed ledger and transaction platform on top of it. the rest is irrelevant since it's based on wrong assumption.
this really comes down to question whether you think the distributed, writable by anybody ledger is useful to humanity. personally i think it absolutely is. do you?
Say I have one watt of power. I apply it to a computer for however long and it spends that energy folding a protein, simulating a gravitational system, or modeling a hurricane. I apply it to another computer and it spends that watt for however long computing a double SHA256 and throwing away the result. If, at the end of both calculations, I have worked toward proof of work on a secure ledger, which energy was better spent for humanity? That’s the difference: while the secure blockchain is a noble goal, what the computer is doing during that time is something we badly need to rethink. “The double-hash of these bytes is <foo>” isn’t even useful if we collected it. It’s meaningless computing. Yes, we ascribe meaning when blocks are made, but it’s a very irresponsible technical decision to waste energy in order to prove that work was done.
This would be fine if it were a low amount of energy, but it isn’t. We are talking gigawatts that are potentially being spent on this, which is part of the point I was trying to make. Electricity isn’t free, and it’s important to consider our planet. Bitcoin essentially puts computers in a busy loop, and it’s a very hamfisted means of achieving its goal. We have already seen alternative concepts, including this one, that illustrate there is potentially another way to achieve what we want without throwing a small star’s worth of energy at the computing infrastructure behind it.
Coming after people and assuming they’re criticizing cryptocurrency as a concept whenever a specific piece is questioned is tough to discuss against. I think cryptocurrency can do better, and there are undoubtedly better ways to come up with to secure a distributed ledger. I’m alarmed that the adoption of bitcoin has exploded our utilization of resources and that people feel that worry about this is an indictment of the whole concept; this polarization makes it difficult for all of us to improve.
So, no, it isn’t obvious what value I should see out of a computer spinning itself through SHA2 for no benefit aside from securing a ledger. In any other domain, we’d consider such a design ridiculous. There has to be another way, one where that same (intensive) calculation can benefit humanity for the power that we are throwing at it, and we still end up with a secure blockchain. I’m not smart enough to invent it. I hope we can support the people who are, and perhaps admit that bitcoin’s proof of work scheme is a mistake in the larger landscape.
I worry that given how deep we are into ASIC development, arguments against what I’m saying are only going to get louder as time goes on. We are probably long past the point of no return with bitcoin already.
1. Admit that you think that crypto currency is not worth the energy cost. Even if you believe that, it's just wasted breath on your part because they are absolutely not going to go away.
2. Propose another solution. No one else on earth has found a better solution than proof of work. Do you have something better?
Wrong question. It implies energy can only be used exclusively for single purpose. The right question is given X watts, what is the ideal distribution for Y purposes and the answer is that we dont know but we tend to value some things more than others and that will be reflected in the distribution
> no benefit aside from securing the ledger
This is the crucial point that many who raise the same objection dont get: proof of work has to be futile by design. In fact it is misnomer and the correct name should be Proof of energy spent, as the energy is the ultimate resource we’re paying for security of the ledger. If we accept that ledger security must be tied to solving some more “important” problem, and there indeed was a non futile problem space, some f(candidate) that yields two results: (candidate-ok?, problem-solved?), the incentive to search that space drops to zero because it is no longer tied to solving the “important” problem. And suddenly the ledger is useless.
If you know how to resolve this conflict - publish a paper and you will be the next Satoshi.
No. Both computers did hard work, and earned credit toward proof of work in my example. I’m rather repeatedly saying energy can be used for two purposes (securing a ledger with a difficult computation that also means something), and I have no idea how else to explain this.
I’m not sure why your incentive would drop to zero. Say I swap in a universal simulation from the Big Bang instead of SHA2. A miner simulates a portion it chooses, which involves quintillions upon quintillions of gravitational fields. Eventually it simulates a rare event, like two black holes colliding or something. It somehow notates this as proof that it worked on the problem for a while, hashes that proof combined with the transactions, and boop, mined a block. Meanwhile, all along, we have learned science. I could think of other problems that work: SETI@home and the other BOINC apps come to mind, as does LHC analysis. Large search space, demanding algorithm, rare thing to find (SETI/Higgs candidates), and valuable science along the way. Some issues I could see are unpredictable nature of block time, verifiability being expensive, and problem spaces that move forward in time, like my first example. But I don’t see those as insurmountable.
Why would incentive drop to zero to search the space? I’m not following that claim, nor why you’re scare quoting important.
they both did work, they didn't yield any proof of it.
> Say I swap in a universal simulation from the Big Bang instead of SHA2
if you have an idea - express it in pseudocode. what is your `f(candidate)` here? what is the return value? how does return value ties in "is candidate valid" and "simulation data" in a way that prohibits modifying source code to only do "is candidate valid" part?
you're trying to handwave your way through some of the most complex questions in computing. "what if we just swap sha2 for blah, where blah is something that solves humanity's problems" - well sure, let's do this, show me the code.
> Why would incentive drop to zero to search the space?
because the axiom we're operating with is: though shalt not run ledger security code without "useful" code. as soon as the problem is solved - nobody secures the ledger anymore.
> why you’re scare quoting important
because you're forcing upon me what i should consider important problems humanity has to solve. your opinion is that distributed ledger isn't one of them. your opinion is wrong.
How many times do I have to say in a single thread that this is not, and will never be, my opinion?
- acknowledge the fact that ledger has value and therefore corresponding amount of resources are OK to be assigned to that valuable problem
- admit that no resources should be assigned to ledger problem because there are more important ones
- present your formulation of compound "important" and ledger problem such that it satisfies the conditions i mentioned above
am i missing anything?
It seems tough to argue that a 2 trillion dollar GDP doesn't merit a 2% increase in power output.
I mean, Apple is close to a 1 trillion dollar market cap. I'd argue a 1% increase in world power output simply for Apple to store its money and make transactions would be a remarkably poor use of power.
Edited: fixed mis-use of "world GDP" to GWP as per tantalor's comment below. Thanks!
If anything, my "GDP" comparison was off the mark because GDP typically represents a country's total wealth, and bitcoin can't have a GDP. But it's a useful abstraction that comes pretty close.
Those bitcoin paper millionaires are investing in startups like Pinkapp, and Pinkapp is hiring programmers. All of this is happening outside the legal system. What does that say to you about bitcoin's ability to affect the world?
No, that's not how economies work. "Bitcoin benefits all who hold it" is like saying "the USD benefits everyone who has a USD". It's a completely meaningless statement.
> But it's a useful abstraction that comes pretty close.
No, it doesn't come close at all. Bitcoin's market cap has absolutely nothing to do with the value that Bitcoin adds to society, and thus it is a completely meaningless metric to look at if you are trying to decide if it "merits" use of our resources.
>Those bitcoin paper millionaires are investing in startups like Pinkapp, and Pinkapp is hiring programmers. All of this is happening outside the legal system. What does that say to you about bitcoin's ability to affect the world?
Nothing? I don't know what you're trying to say with this. Just because people made money off of bitcoin and now can use that money to hire other people does not mean it is affecting the world any more than anything else that people make money off of.
I also have no idea what you mean when you say "All of this is happening outside the legal system." That is another completely meaningless statement. I assure you that investments in startups and hiring of programmers all happens firmly within the bounds of all applicable legal systems. But even if it wasn't, it still says nothing about bitcoin's "ability to affect the world".
You need to stop drinking the bitcoin koolaid, bro. You're spouting nonsense in an attempt to defend it.
This doesn't follow.
I also have no idea what you mean when you say "All of this is happening outside the legal system." That is another completely meaningless statement. I assure you that investments in startups and hiring of programmers all happens firmly within the bounds of all applicable legal systems.
You haven't done even the most cursory search for Pinkapp. It's outside of the legal system, i.e. criminal.
You need to stop drinking the bitcoin koolaid, bro. You're spouting nonsense in an attempt to defend it.
Please re-read the site guidelines:
https://news.ycombinator.com/newswelcome.html
https://news.ycombinator.com/newsguidelines.html
It's important on HN to comment civilly and substantively or not at all.
World GDP is around 100 trillion.
So by your own figures, if it were denominated in BTC or equivalent cryptocurrency, we'd require more than 100% of the world's current power output just to store and send people's money.
That's more power output than is currently required for all the world's homes, factories, hospitals, transportation networks and all the world's computing power, everything. Which also benefits everyone who uses it, and creates jobs for a few billion people
Do you now see why people don't think current crypto tech is a particularly optimal use of power?
The world's currency isn't ever going to be 100% bitcoin. It's an invalid basis to start from.
I kind of see what you're trying to hint at, but it would be helpful for discussion if you could think of a more persuasive example.
(It may be difficult though, because it seems true to say that if Bitcoin starts becoming a significant fraction of the world's GDP then it's fine if it uses a little power. Where "little" is relative to the ratio of BTC's wealth vs the world's wealth, vs BTC's power usage to the world's power usage.)
If that's your metric then bitcoin gets an F- right now. Its world power usage fraction is much much higher than its world wealth fraction.
Broadly speaking, Central banks today feed this growth by printing money (i.e. increasing the money supply), hence inflation. A deflationary currency like bitcoin would have to grow in unit value accordingly because of its cap, if it were to become the de-facto new gold standard. How much power consumption is appropriate for mining needs to be considered in relative terms vs how much mower hungry is gold mining, for example. I am not sure how power hungry is printing and managing cash (incl. security, transport...). Also, all these activities (gold mining, bitcoin mining, cash printing) also contribute to GDP. Eventually if the power source is renewable and generation capacity is kept at appropriate level (e.g no one dies of cold because power must be prioritized to mining) does it matter? Or am i missing something?
I'm not sure how true that will turn out to be, but it's an interesting attempt.
The point of the economy is to create value for humans. There is plenty of non-value-creating activity that can be denominated in dollar terms, but that doesn't make it actually valuable. For example, this season's hurricanes will cause something like $200bn in economic activity. But that doesn't mean we should have more hurricanes. [1] People bet at least tens of billions annually on sports, but getting people to double or triple that doesn't actually make anybody richer. Similarly, Bitcoin is only a true economic positive to the extent that it actually creates new value for humans.
If Bill Gates went on a Bitcoin buying spree, he could easily drive the nominal market cap way up. But we'd have no more economic value in the world. If Bitcoin enthusiasts got bored and turned off all the servers, we'd have little less economic value in the world. That's because most Bitcoin use is not economically productive. Most of it is, like gambling, just moving existing economic value around between people.
I go on at length like this because it's vital that startup people understand the difference between creating value and just shuffling who controls existing value. Only the former is sustainable.
[1] To think otherwise is the broken window fallacy: https://en.wikipedia.org/wiki/Parable_of_the_broken_window
We can have $2 trillion in GDP with paper money, too, and that uses 0% of the world's power.
I don't get it. Why won't you complain about monitor pixels, that don't display content using/wasting power or various unused/reserved bits transmitted every second (https://tools.ietf.org/html/draft-abhi-covert-00) that also waste power. Proof of work uses energy to meet some strict guarantees.
This reminds me of complaining that SSL is computationally expensive and therefore plain HTTP is better. 10 years ago of course.
A system like bitcoin but that only uses (all of) the CPU 10% of the time incentivizes a lot of cheap compute power for projects that need it. As an example. Algorithms that have similar loads to conventional software encourages more powerful general purpose computers instead of more powerful custom bitcoin ASICS.
There are much better things to incentivize.
This needs a proper source. As far as I understand currently only Proof of Work is sound enough to use in real-world scenarios. Also see: http://www.truthcoin.info/blog/pow-cheapest/#is-a-work-indep...
It seems like people would want to bend thermodynamics and require that benefit is produced without spending energy...
By the way mining is already used to heat houses in Siberia: https://qz.com/1117836/bitcoin-mining-heats-homes-for-free-i...
If a bitcoin costs $6000 people will spend physical resources worth $6000 (in theory) to obtain it through mining.
Let's assume you are a miner in siberia and have a heating bill of $100 every month and spend $1000 of electricity to get $1100 worth of bitcoin. You now only pay $900 to get $1100 bitcoin. You will spend the excess savings of $100 on more electricity for mining. Now suddenly everyone starts heating their houses with bitcoin mining to save $100 until difficulty rises to account for the saved money.
Every dollar you spend on the most efficient mining setup will only give you one dollar worth of bitcoin plus a small profit.
> Every dollar you spend on the most efficient mining setup will only give you one dollar worth of bitcoin plus a small profit.
That sounds just like any other investment, or am I missing something?
Increasing the amount of money in the world does not increase the amount of goods and services in the world. Thus turning energy into bitcoins will increase any other goods and services but instead results in more money chasing the same amount of goods and services.
Just as one gets apparent economic benefits from paying people to dig holes and fill them, one can get some appearance of benefit from resources being diverted to bitcoin mining. This is OK as long as we imagine an unlimited external resource world we exploit however we want but once you get to a world we have finite atmosphere, finite biosphere etc and pumping enough C02 into these can kill all of us, this sort of approach is becoming untenable.
- pixels are being optimised, with displays going closer and closer to true-off all the time
- pixels: even whitespace is important next to information
- RFC: we're wasting a few bits as a tradeoff for less complicated hardware and less processing power. Not sure if applicable anymore, but reserved fields and consistent parsing saved us some power/materials historically.
- SSL provides security and privacy in your communication at a cost reasonable for the outcome.
It's only logical they if we don't need to spend the energy to mine coins, we should stop doing that sooner then later.
And protecting money is not important?
> - RFC: we're wasting a few bits as a tradeoff for less complicated hardware and less processing power. Not sure if applicable anymore, but reserved fields and consistent parsing saved us some power/materials historically.
Well so the RFC reserved bits are waste but also a benefit? Maybe the same is true w.r.t Bitcoin mining?
> - SSL provides security and privacy in your communication at a cost reasonable for the outcome.
The cost is reasonable in SSL case but unreasonable in Bitcoin case based on what criteria exactly? Remember that SSL relies on PKI that has a lot weaker security guarantees (see Symantec, DigiNotar and your favourite Chinese CA in your OS's trust store).
Next to nonexistent cost per connection in standard case of SSL. We can saturate gigabit links using modern hardware with AES-NI. Outside of special deployment cases, the cost is a rounding error. We can't provide this capability in a cheaper way at the moment (or we would do that)
On the other hand, we've got Bitcoin which chugs energy/money by design, while other solutions like proof of stake / space / ... exist and are much more energy efficient. People concisely decide to burn money to keep this system running - that's why it's unreasonable.
They are only proposed solutions, not implemented in any existing systems so it's not fair to compare them. Proof of stake for example has numerous drawbacks: https://en.wikipedia.org/wiki/Proof-of-stake#Criticism
And Bitcoin does not provide service that is valuable to all parties?
> Bitcoin mining is done by people who want to get rich by not doing anything.
Calculating SHA256 is hardly anything because we wouldn't be arguing about that, right?
> What if Bitcoin were to fail for some reason?
You're not concerned about SSL failing for some reason? Heartbleed?
> What if Bitcoin were to fail for some reason?
That's highly speculative. Besides Ethereum has several failures already and it's still doing fine because there are serveral mechanisms that can be used to resolve such problem (e.g. hardforks).
That is a totally different use case. A display is supposed to always be on, while a cpu should turn off while not in use. When a cpu has no work it slows down to conserve power and reduce heat output. What happens when a monitor has no input data? It goes to sleep. It doesn't just display the last thing and continue processing a stream of data from it's input.
or the Sun, what a waste of energy that is
With the proof of chia being used in storage, does that imply a lower power cost? I'm not sure what proof of time is either...
Does anyone know more about this and can clarify things?