So, that's an interesting pair of ideas, in that it gets me thinking that any Bitcoin-style cryptocurrency might ultimately be doomed by its own design.

Shooting from the hip:

They've go this 51% vulnerability that is well known and hypothetically cannot be truly closed. Instead, we rely on the idea that mounting such an attack would be "too expensive". But at the same time, the cost/benefit of mounting such an attack is fairly easy to estimate using public data - all you really need to know is the cost to get to 51% and stay there for a given amount of time, which you can infer by monitoring mining activity, and the current price of the currency you'd want to attack. And you have to assume that whenever the cost of mounting such an attack dips below the benefit, such a thing _will_ happen.

So then, I think that implies that the only other feature you'd need to throw into the mix to ensure a cryptocurrency is ultimately doomed is to make the rate at which new coin can be mined asymptotically approach zero. Such a feature would mean that, in the long term, miners' revenue would ultimately be dominated by transaction fees, which, this being a supremely commodity service, market forces will presumably tend to keep relatively low. That would, in turn, limit the number of miners the economy can support, which would serve to limit the cost of mounting a 51% attack.

Meanwhile, what with a money supply that can't grow being inherently deflationary, the benefit of mounting such an attack would be constantly growing, for as long as said cryptocurrency remains in use.

On the other hand, there will be people who have a vested interest in preventing such attacks. If you own a lot of BTC, a successful attack can drastically lower the value of your assets, so it makes sense to deploy some of that capital to secure the network. And of course this goes even more so for business in the crypto space that rely on BTC remaining secure.

One example of this sort of behavior is in mining. We tend to think of miners as being selfish to a fault, and to some degree, that's true. But sometimes miners have the opportunity to mine empty blocks (a form of attack), and refrain from doing so, because it would harm the ecosystem as a whole and jeopardize their long-term profitability.

Spending capital to build hash capacity to protect an existing holding in BTC is inherently deflationary. Instead of "you need to spend money to make money" aka inflation/interest/growth, you have to spend money to keep money, which always reduces your holdings over time and turns the entire network over to companies that produce hashing capacity (hardware manufacturers, power companies).

But the initial assumption was that of an efficient market for hash power, which means the cost to hash is equal to the block rewards. And so deploying some capital to secure the network is nets zero loss.

That's a great way to lose all your capital, or force someone else to. You will probably not outspend a focused attacker or nation-state.

> They've go this 51% vulnerability that is well known and hypothetically cannot be truly closed. Instead, we rely on the idea that mounting such an attack would be "too expensive". But at the same time, the cost/benefit of mounting such an attack is fairly easy to estimate using public data - all you really need to know is the cost to get to 51% and stay there for a given amount of time, which you can infer by monitoring mining activity, and the current price of the currency you'd want to attack. And you have to assume that whenever the cost of mounting such an attack dips below the benefit, such a thing _will_ happen.

Or, to turn this around, if X is the amount of money needed to sustain a 51% attack for 1 block, then you have to wait for 1 confirmation for every X amount of coins received.

Attacks can hit multiple parties simultaneously. So you need to account for that as well and make sure an attacker doing a sweeping attack that includes you is still not incentivized.

Luckily, there are deeper incentives protecting large asic mined chains such as bitcoin.

> all you really need to know is the cost to get to 51% and stay there for a given amount of time

That's actually, if anything, underestimating the likelihood of a 51% attack. It seems that the more likely path to that situation is collusion between segments of the existing mining community. For such a cartel, the "cost" is zero, it's just a matter of trust.

The cost of creating and upholding a cartel is not zero at all. It can actually be quite high.

Decred appears to have solved the PoW 51% attack via a hybrid PoW/PoS consensus mechanism. It's practically unfeasable to attack at this point.

Interesting point. The cryptocurrency energy consumption problem will never be solved, since if it is, it will be economically feasible to attack. So cryptocurrency adoption in the mainstream will require massive electricity consumption.

You might even say it will ultimately require at least 51% of worldwide electricity production, to ensure no actor (including nation-states) can suddenly on-line additional capacity to seize control.

And then if that's true, one might dream of a power plant arms race, where two competing nations build additional power plants as fast as possible to prevent the other from gaining enough electrical capacity to attack the network...

Alternatively one side opting out and using Fiat instead?

Oh...

There's a great sci-fi plot here

...this is an intriguing start for a sci-fi novel.

Only if it uses proof of work.

Not necessarily, non-hashing consensus seems to be where most blockchain projects are going. So these would require a stake of assets or similar, instead of wasting computing cycles.

Creating a proof-of-stake algorithm that doesn't degenerate to proof-of-work and that doesn't require a central authority (checkpoints, etc) is still an open problem.

I'm waiting for the cardano guys on this one, testnet with PoS will start soon and they don't make bullshit hype announcements ever

Proof-of-Stake(POS) is still theoretical at this stage, there is no working solution or proof-of-concept. It is a nice(ish) idea to reduce the energy consumption of blockchains but isnt really a solution to decentralisation.

There are some working solutions now, like NEO, Dash, and NXT. Ethereum is sure to adopt it as well; a lot of details are TBD but there's little question that the community will adopt some form of PoS.

I'm not saying it's perfect -- there are some downsides like needing a cap on fork distance in order to prevent stake bleeding attacks [1] -- but it's certainly viable.

[1] https://eprint.iacr.org/2018/248.pdf

Yup, it anti-scales. If anything its scale resistant. Its a red queens race.

> Crypto currencies are worthless unless they have an enormous amount of hashing power behind them.

Why would you think an enormous amount of hashing power helps? Even with Bitcoin, the actual marginal cost of a 51% attack is quite low. The difficulty is the capital expense of actually connecting to a couple GW of power and finding enough rentable ASICs.

I think this is fundamental. In a proof-of-work scheme, if the mining rewards in whatever time frame is considered a full confirmation are less than the amount of gain available using a 51% attack, then a 51% attack is economical.

ASIC mining during boom time helps mitigate the issue a bit, since the ASICs are worth more if the currency isn’t devalued by 51% attacks, but even Bitcoin will be vulnerable of older, less efficient ASICs start flooding the market, which seems inevitable if the price of BTC stagnates enough.

You're looking at this as a static _binary_ model, while actually, the 51% attack is heavily dynamic. The profitability of the attack heavily depends on factors that are absolutely dynamic and not publicly available:

- The exchange/betting website not catching onto your scheme

- The volume of the coin being enough to mass sell it and not majorly affect the price

- How fast the community can act in unison against you

Maybe all that energy spent to secure the chain is not so bad after all.

So it's not a complete waste of natural resources because it helps secure "the chain"?

You know all that sunlight that hits the Earth that we don't convert into energy. Wasted natural resource. Loads of it.

No, it isn't. It's what lets you, and everything else, live, instead of freezing to death.

It is a good thing we don't need all of it then. A tiny fraction will suffice. https://www.businessinsider.com.au/map-shows-solar-panels-to...

I think you may be missing my point and sarcasm.

Might be. Didn't have my morning coffee yet.

Is it a complete waste of natural resources to lock a bank vault door, or run a network firewall?

Those are both activities which use up trivial quantities of those natural resources. Bitcoin uses up nontrivial quantities of electricity.

There's a hidden cost of trust there, though, which vanishes with bitcoin (or at least reduces its cost). Maybe the value of bitcoin is more apparent from the perspective of venezuela at the moment, where the risk involved with traditional banks, currency, and security is more apparent.

I am emphatically not taking a stance on which I prefer here, I might add, just pointing out that there are more variables here than you're acknowledging.

> There's a hidden cost of trust there, though, which vanishes with bitcoin

With fiat, I at least have some idea who I am trusting, and if my trust is betrayed, I have some idea who to work with others to organize to work to inflict punishment. And, the people involved are aware of that.

With crypto, I have to trust an anonymous network of people that I have only distant and indirect indications aren't, in overwhelming majority, mutually cooperating agents of a single potentially adverse party, and no idea of who to go after if my trust is betrayed. And the people involved know that, too.

> There's a hidden cost of trust there

Yes, except the trust is free. Bitcoin replaces that trust with burning electricity.

It's kind of like standing on the ground. The surface of the Earth stops you from accelerating under gravity for free. But if you want to hover just above it, you have to burn ungodly amounts of energy, because you're now replacing surface with active propulsion. This is the same relationship as Bitcoin has with trust.

And yes, flying is occasionally useful. So are trustless systems. But both the ground and trust are features that cut out a lot of unnecessary energy usage from our lives.

Bitcoin and other cryptocurrencies require even more trust than normal currency. With a normal currency transaction, you need only trust at most 2 other entities entities: your counterpart to the transaction and the government issuing the currency.

With a blockchain, you still need to trust the counterparty, but now you also need to trust that the coders have properly designed and programmed the system, and that the miners either don't have the power to corrupt the system or aren't corrupt, and you need to trust whatever exchange you use to get into and out of the cryptocurrency.

Plus, you've added in a significant amount of time--at a minimum 20x the time with Bitcoin and significant transaction fees that as a practical matter have exceeded card interchange fees by 2x or more for the past 3 years straight.

Your right about their being more variables...with cryptocurrency.

I think there are fundamentally different ways we're talking about trust: you "only" need to trust a government, you "only" need to trust a bank, vs trusting a certain proportion of miners to be following the same bitcoin specs you are, as well as trusting that people will value it tomorrow. Both of bitcoin and government-issued currency requires trust, and building that trust is fundamentally difficult, depending on your needs, and comes with tradeoffs. It seems like you're only acknowledging one end of these tradeoffs.

One obvious tradeoff you're not considering is that of a criminal getting its assets frozen, for instance. There are less black and white situations where you might prefer bitcoin as well, if you have a little imagination. If you could address that, I'd probably appreciate your comments more.

Let's not use HN as a place to enumerate cryptocoin variables? You can find plenty of that discussion elsewhere.

And you need to trust that your government won't take the currency away. There is no escaping from this one.

You forgot to calculate how much (in resources) it costed to build all those banks and vaults and how much it costs to run and maintain, globally.

It probably cost a few billion dollars to build all those banks globally. It costs a few hundred million to maintain all those banks and vaults. However, these banks and vaults can handle more than 2000x the transactions of Bitcoin in a single day (Visa on its own is 750x the capacity of Bitcoin, and Mastercard handles about twice the number of transactions as Visa), so Bitcoin would need to be at least 1/2000th the price to build and maintain the network to maintain a comparative economic advantage against just those two companies. Including the entire financial system, Bitcoin would need to be somewhere in the neighborhood of 20,000x cheaper and more efficient.

And since we're taking into account all of the underlying systemic costs going into banks, we need to do the same for Bitcoin. That means including all of the power utilities, factories, and mining facilities that went into making the hardware, plus the cost of shipping the hardware worldwide, plus the cost of the utilities and transmission lines needed to operate the network. And that's clearly not 1/20,000th the cost or resource usage of our current financial system.

> It costs a few hundred million to maintain all those banks and vaults.

There are ~8000 banks in the US alone, around 15K around the world.

According to your made up number, it costs $6K/year to run a bank. That's not even remotely close. That would pay maybe a month of the desk clerk's salary + overhead.

Fort Knox has an entire military base to secure it. That alone would use up a good chunk of your few hundred million dollar budget. I think you are vastly underestimating the cost in supporting our current financial system.

> Fort Knox has an entire military base to secure it

Fort Knox has basically nothing to do with the modern U.S. dollar financial system.

You don't consider a country's reserve assets to be a factor in their monetary system? An interesting way to see the world.

> You don't consider a country's reserve assets to be a factor in their monetary system?

The U.S. dollar isn't backed by gold. The total value of the gold at Fort Knox, about $100 billion, is negligible [1] and does not appear on the Federal Reserve's balance sheet [2]. It is mostly an anachronism from the eras of the gold standard.

[1] https://en.wikipedia.org/wiki/United_States_Bullion_Deposito...

[2] https://www.federalreserve.gov/monetarypolicy/bst_fedsbalanc...

These have to do with storing something of value, they aren't inherent to gold. People are already storing Bitcoin keys in physical vaults: https://www.bloomberg.com/news/articles/2018-05-09/bunkers-f...

The global financial system is interconnected. Fast transactions can happen because counter party risk is removed by a government backstop. In effect you can't have Visa without a "risk free" store of value. Vaults such as Fort Knox are a part of that system.

In the case of bitcoin they aren't inherently necessary to the function of the system, although with the risk of hacks you can make the case for them.

That's not very relevant. It's a constant factor, and the actual problem is that conventional financial systems is something of O(n log n) with respect to energy usage, and desperately tries to minimize it (as not minimizing it means bleeding money), while cryptocurrencies are incentivizing everyone to maximize their energy usage.

If locking it or running the firewall required energy waste on the order of bitcoin they would. Fortunately both have been designed with minimizing energy use in mind, rather than wastefully maximizing it.

How much energy is spent securing conventional financial systems? You have to include everything: banks, minting, enforcement, physical security, even military and intelligence action.

If/when cryptocurrencies reach the same size as conventional financial systems, they will require all of the same.

Bitcoin is relevant for the US economy and a rogue state tries to have 51% of hashing power? Military and intelligence to the rescue.

Someone is very rich in Bitcoins? Bunker services for offline storage, physical/computer security, etc.

Too many scams with altcoins? Legal enforcement, more bureaucracy, education, etc.

One could say that, somehow, the cryptocurrencies won't require as much of any of that, but I don't see this point being made as often (and not with any realistic estimations).

The 51% scenario: just install more hash power. That would be cheaper and would not risk anyone's life.

Protecting cryptocurrency: there are cryptographic ways to achieve very high security that are free or very inexpensive. Physical encryption keys cost under $100. Combine those with multiple signatures and offline storage in a safe deposit box and you have several physical and cryptographic layers of security for pretty cheap. Services that do those things do not need to be very expensive.

Too many scams? Point taken. We will still need police.

BTW there's a reason I said cryptocurrency and not Bitcoin. Bitcoin is one of the slower cryptocurrencies. Energy spent securing the chain is per block, and its block size limit and other aspects of its design artificially boost its energy per TX. That and in the long term I expect people to find less energy intensive ways to secure block chains.

For conventional financial systems, energy spending is upkeep. Something that needs to be done (due to thermodynamics), but is best minimized, because it costs money. So banks, minting, enforcement, branches, ATMs, etc. - they all try to minimize their upkeep, per the regular ways markets optimize this. All of this also arguably represents the lower bound of what it costs to run a financial system.

Cryptocurrencies, on the other hand, have energy use as a feature, not cost. Unlike conventional financial systems, cryptocurrencies try not to minimize energy expenditure, but maximize it, as a core function ensuring their integrity.

(Also, military and intelligence action count to stability of both conventional and cryptocurrency-based systems. After all, you can't run a crypto economy without stable and secure nation states with rule of law that allow for development and availability of advanced microelectronics (for mining), electricity and the Internet. Crypto is much more dependent on that than conventional systems.)

--

A tangentially related analogy that comes to mind: cryptocurrencies are like trying to build a city on a big hovering platform, kept aloft by great fans or jets. In order to keep the whole thing airborne, you'd find yourself constantly burning fuel just to counter gravity. Now we find this idea stupid because we can just build city on the ground and not waste any fuel at all - the surface of the Earth counters gravity for free. This is cryptocurrencies' relationship with trust. Trust works 99% of the time for free. Cryptocurrencies try to replace it with burning energy.

I think the other reply about TX counts vs. people-hours of power convinced me that indeed cryptocurrency is much less efficient than conventional currency even if you put large error bars on that analysis. I do think it's a solvable problem.

Your reply about trust though...

Trust is massively less expensive until it's not. The trouble with trust is that when it breaks "fixing" it is immensely painful, often requiring major political upheaval or worse. In extreme cases people die when trust has to be "fixed."

I do still wonder... what happens when you amortize the cost of trust across say two hundred years time? Reminds me of the cost analysis of nuclear power. Nuclear power is cheap until Fukushima happens, and one Fukushima amortized over even 50-100 years renders nuclear power more expensive than any other energy source.

I do not think it's a coincidence that the cryptocurrency explosion happened right after the 2008 financial crisis. The level of corruption revealed by the crisis and by the nature of the state and financial sector response to the crisis (selective bailouts, bailouts only to the rich, bailouts that preserved the wealth of those responsible, etc.) showed that our trust in the financial sector and possibly in larger institutions is dangerous. People started looking for alternatives. I have doubts about whether cryptocurrency would have caught on to the level it has prior to 2008.

What cryptocurrency needs to be successful is some alternative to proof of work mining. I'm not convinced proof of stake is it since it has a lot of other problems.

What conventional economic systems need to be successful is a housecleaning and a restoration of public trust.

I've once worked out the CO2 output of Ethereum, which I think can be nicely worked over. Ethereum uses 191'000 people-equivalent CO2/year (1 PECO2 = 9 tons of CO2) or roughly 4 TWh per year (I'm using numbers from multiple sources and past comments from me, I apologize if it's not lining up perfectly)

The average state employes about 300'000 people (324'000) to be exact (about 16 million in total, which includes teachers and similar).

So already the Ethereum network uses half of an entire average US state to just secure it's network. The US state in question does a lot more and it includes education and similar.

Bitcoin uses 68 TWh anually, about 17 times as much or about 8.5 average US states. To secure 200'000 TX per day. In contrast the US employees handle the entire state affairs, including taxes, education, etc. for 54 million people every day.

Why is this argument repeated so often? How is that comparison not clearly absurd to you? The conventional financial system is very obviously many orders of magnitude more efficient than bitcoin.

How is it obvious that conventional financial transactions are orders of magnitude more efficient than bitcoin? You can't use transaction price as a metric because it reflects a lot more than just the energy consumption of the system and even if you did, conventional transactions are not orders of magnitude cheaper than bitcoin transactions.

I'm not talking about transaction price, I'm responding to

> How much energy is spent securing conventional financial systems? You have to include everything: banks, minting, enforcement, physical security, even military and intelligence action.

I really feel like I shouldn't have to explicitly point out why this reasoning is so flawed, but to start with, bitcoin does not IN ANY WAY obviate the need for banks, law enforcement, physical security, or "military and intelligence". There isn't some kind of "well, actually..." response to this, it's totally and obviously incorrect and we're living in two different fundamental realities if we can't agree on that base line.

Quibbled: conventional transactions are cheaper, but not "orders of magnitude."

Also Bitcoin is one of the slower block chain coins.

Would you ask the same question if the world run 100% on renewables? If not, it seems that your argument should be "we should accelerate our transition to renewables" instead of "bitcoin spends too much power".

Also they pay for all the energy they spend so what exactly is the problem? Do you see vegans complain for the resources spent to raise animals?

> Would you ask the same question if the world run 100% on renewables

Opportunity cost. All that 100% renewable energy could be used for something that actually adds value to society but isn't because it is being pissed away on the Rube Goldberg invention known as Satoshi's BlockChain.

> Also they pay for all the energy they spend so what exactly is the problem?

Give me a fucking break. These miners raise the price of electricity for everybody else and produce absolutely nothing of value to society at large.

Same thing these miners have done with graphics cards -- they've made graphics cards more expensive than most people can afford... you know, people who want to use those video cards for playing games instead of sucking down large quantities of non-renewable energy in a vain attempt to Get Rich Quick.

Bitcoin and all the others in the crypto "space" add absolutely zero value to society.

Pretty weak line of reasoning.

How much energy do you and everyone else waste doing things that don't add value to my life or society?

Using your own comparison, why is it a big deal if little Jimmy can't afford a graphics card to play some Counter-Strike? Is gaming a better use for energy?

Seems weird to pick on cryptocurrencies if you actually believe your premise, which I don't think you do.

> Pretty weak line of reasoning.

Hardly. What, exactly, does bitcoin add to our world? Near as I can tell it's only use case is Making Money Fast (for the folks at the top of the pyramid, anyway) and scamming the bejesus out of all the rubes who fall for the con.

> How much energy do you and everyone else waste doing things that don't add value to my life or society?

Bitcoin is estimated to consume more than 0.5% of all the worlds energy. Many nations use less power than bitcoin consumes. Bitcoin can process a mere 4 transactions per second. Please go on and explain to me why this is even a remotely acceptable thing.

The whole space is a deplorable shame and people like you should be absolutely ashamed of yourselves. You are a drain on the planet's limited resources.

Funny you are arguing about the lack of value of security in a thread of a coin that just had its security broken.

It's a perfect place to argue about it, because it only shows that pissing away all that electricity still doesn't help, because someone else can piss away more of it to take your money.

To be fair BTG was pissing it away, BTC seems to be using it for security.

> Would you ask the same question if the world run 100% on renewables?

Yes, because the resources (Material or labour) that went into building those renewable power plants could have gone into building something else that people want or need. Houses. Retaining walls. High-speed rail tracks. Electric cars. Bicycles. Video games. Rolls of sushi.

I will keep asking that question until we are in a post-scarcity society.

So we all get to decide how all the resources are spent? I am concerned that the desire to deem certain energy spending as unethical can lead us down a creepy path of authoritarianism.

The problem is that energy is priced far below costs at the moment, due to a large proportion of the costs being externalized.

This is a fairly good point. Any argument about externalities in energy usage applies to all usages of energy, and the solution is to internalize them in the price of energy.

What a great idea. All you'd need is a centralized world government to enforce it, and then you can have a responsible, decentralized currency! Wait.

Exactly. We should stop using the word "waste" to describe the energy consumption of the Bitcoin miners. It's not waste if it serves a purpose. The service it provides is to guarantee the integrity of the blockchain without the requirement of a central authority.

> We should stop using the word "waste" to describe the energy consumption of the Bitcoin miners.

All you bitcoin shysters can keep telling yourself that to sleep at night, but you are lying to yourself and you know it.

Bitcoin consumes massive amounts of energy for a pathetically small amount of transactions per second. ON a per transaction basis, Bitcoin uses several orders of magnitude more energy than anything used by modern day financial systems.

Like, embarrassingly, shamefully large amounts of electricity. Y'all should bow your heads in shame for the harm you are doing to the world.

> The service it provides is to guarantee the integrity of the blockchain without the requirement of a central authority.

The blockchain, whose only use case is to enable rampant speculation and amazingly large quantities of fraud.

The whole "space" needs to go away.

Your biggest mistake is comparing energy use. You need to compare the total overhead of bitcoin to the total overhead of the competitive financial system. The second mistake is comparing a per-transaction basis; this is of interest when we are comparing suitability for particular applications, but if you want to talk more generally about whether bitcoin is efficient for payments you need to look at things on a value basis (use usd, eur, cny, or gold ounces).

Why? Why does a new system need to be just as bad as the old one?

It doesn't.

But if the new system is better than the old one, why would comparing it to the old one imply that anyone using the new one should be ashamed of doing so?

It wouldn't.

But it turns out that the new system is significantly worse than the old one, for little to no practical benefit. That's why people are comparing and complaining.

it is a waste. Bitcoin is an unqualified environmental catastrophe that is literally erasing any progress we've made to combat climate change. Burning away the future, turning useful energy purely and directly into waste and profit by shouting numbers into the void, not even leaving any artifact of value in its wake.

There's not anything wrong with having a central monetary authority. There's not anything wrong with having institutional trust.

It could be argued that the trust could still be misplaced, but the idea that we can't trust governments for currency is barking up the wrong tree.

The fundamental problems of inequality don't stem from Treasury, but rather from the game theory concept of the https://en.wikipedia.org/wiki/Gambler%27s_ruin making barriers to entry for new players always higher than the incumbents. You can take this all the way down to the bottom, in the example of having no car to be a delivery driver, and to get a loan for a car is a tremendous risk.

Sort of. It does create an opportunity cost, in diverting electricity away from other, arguably more useful causes. The whole matter there is complicated by economies of scale and baseload demand etc though. It could also be seen in terms of finiteness of the source of energy.

The measure of usefulness is determined by how much money people are willing to allocate towards it. Given that the money is allocated there, it indicates that for those actors, they see some utility regardless of what other people think. Hence, the only way to modify the unwanted behaviour is to correctly account for those producing the externalities, such that this market signal reverberates all the way through the economic chain.

I agree with all of that except the definition of usefulness. As you eluded to with your use of regardless, rationality is not assured. It is expected (or more likely, hope) usefulness, aka speculation. Even funding the status quo is still speculation, because something could suddenly become not useful in the future. I suppose only time will tell what was actually useful, and I'm betting bitcoin is not among them. Maybe if proof of stake comes along, I'll consider that as more potentially useful.

Obviously capital allocation of individuals is not a perfect measure of utility, but it is the best/ fairest metric we have. Conveniently it provides a clear mechanism to sort out this mess. Price carbon pollution at the source and see the rest of the actors seeking profit fall in line. Miners will chose green energy, green energy will get more demand, their economies of scale will increase, pollution will decrease. Bitcoin energy use is no longer a problem and can provide whatever utility it is valued at without externalities.

If you had a mechanism to price externalities, and it wasn't government, then sure ok. But while we have no effective externality accounting and enforcement, this notion of wastage still exists fairly. If we could price in externalities with a government, then perhaps they would be more worthy of trust for currency too?

In terms of my original statement, I was effectively stating that the problem of decentralising currency doesn't really give back power to the people, because of the nature of wealth accumulation and propagation. Sure, it reduces the capacity for regulatory capture, but people with capital in whatever form still exercise a capacity to better maintain their capital base.

With regards to waste again, it becomes a moral issue. If we know that our externalities will cause problems, then by letting people continue to capitalise on them, we knowingly undermine the wider system we operate in. We have ethics committees for science and medical experiments, but when it comes to finance, experimentation occurs unimpeded. This leads to socio-economic outcomes which, while not fully understood, are also not complete unknowns.

It does not follow that if we can trust a Government to price carbon emissions then we should be able to trust them to not print money. We are basically guaranteed that they will, despite being able to effective disincentive things like smoking with an excise tax.

It is trivial for Governments to implement a carbon tax which would improve environmental conditions for all energy intensive production.

With regards to giving power to people, this is not done through wealth redistribution (although you get a little bit of that). The mechanism is tgrough the constraint that the currency can not be debased. A rising tide lifts all boats, especially when there are not holes in them.

Built in deflation you say? That once again, favours the incumbents. Those starting out will be at a disadvantage even more than they are now, for not having held any tokens of value. It also means that anyone who does attempt to do anything which requires money up front, whether that be starting a business, or starting a family, are at an even greater disadvantage. A rising tide lifts all boats, unless the boats haven't been built yet. Then it just becomes very difficult as more and more of the land is covered by the ever increasing tide.

You seem to be ignoring the status quo. I only need to prove it better than the current system, you need to prove that the current system is better. Those families and businesses that start from nothing still need money. Just that currently the money they do get is going to be worth less in the future.

Right, which means it is worth being spent. If spending is not worth it, then spending by and large dries up, resulting in a reduction of income to others, reducing the multiplier effect, and reducing the amount of actual trade that occurs. People continue to save as income opportunities dry up, and those with no income get royally screwed. With no risk taking occurring, things go back to bare essentials, which we are already very efficient at. Maintenance places are the only places which will maintain any expertise.

To be fair, I think there is already a risk of this, in any situation where capital becomes severely unequal. However, by making the monetary token itself an item of (appreciating) value, rather than only as means by which trade is mediated independently and in arbitrary small parts between multiple parties, is a sure way to speed that process up.

THIs is a wonderful story that doesn’t make any sense. You are suggesting that there are two sets of people, those with BTC that is increasing in value and those without. Those with are spending nothing and getting fabulously wealthy not spending their appreciating asset. Meanwhile, on the outside the no-coiners suffer from the lack of trade and become destitute and the economy drives to a halt.

This makes no sense for several reasons. The no-coiners could just buy a tiny fraction of a BTC with whatever fiat they have and become fabulously wealthy. When they do this they would be setting the market price even higher for all the rich Bitcoiners. All the of these fabulously wealthy holders think against deploying any capital to either enrich their life or increase their rate of return over asset appreciation.

It is absurd to think that as an entire population becomes wealthier that was risk taking occurs, when it it people that are mired in debt that often take less risk.

Before you respond remember these facts, the market price is set by buyers and sellers (trading). Bitcoin is infinitely divisible despite a capped supply. Gresham’s Law dictates that people will spend bad money first. Your no-coiner set has at least the ability to provide a service to begin wealth accumulation.

Should Read “less” risk taking.

By that flawed reasoning, BitConnect must have been extremely useful...

I imagine it was for a few. Now not so much, and not taking any energy.

It's wasting if it's using more than the alternatives and it is using more than the alternatives.

"It's not waste if it serves a purpose. "

It's an open question as if it actually does serve a purpose, though.

Related: https://arewedecentralizedyet.com

This point should be made more often. It also supports the ethereum and EOS use case, a general purpose computing blockchain and distributed vm, it allows smaller utility coins to be backed by the same size network as the eth token and ecosystem, something they would never do on their own. The token's security is proportional to it's network size. Fragmentation of the already small subset of people capable of running blockchain nodes that actually do run nodes is great for innovation but bad for network security and confidence.

>>>Crypto currencies are worthless unless they have an enormous amount of hashing power behind them.

And maybe they're worthless even then. Time will tell on that.

there is http://arewedecentralizedyet.com

Whilst that's an interesting page, it lacks the most important part of my request: "and how much it would cost somebody to take over 50% of the network"

> Crypto currencies are worthless unless they have an enormous amount of hashing power behind them.

I think this is only true if you assume that crypto-currencies must be based on proof-of-work algorithms.

What about proof of stake systems?

Someone has already asked that, and the response was, such systems are still theoretical without a working proof of concept.

it exists

https://bitinfocharts.com/comparison/bitcoin%20gold-hashrate...

That graph doesn't tell me how much it costs to launch a 50% attack. Maybe I'm just lazy, but I want a table with the name of the crypto currency in one column, and the cost in USD to launch an attack in another column.

Figuring that out sounds like a fun but non-trivial project. Since crypto currencies have different mining schemes one would need to keep track of the hash/$ ratio for each one. I guess the simplest way to do so would be to cross-reference the different mining market places that exists. Do you have other ideas for figuring out the hash/$ ratio?

Yes. It would require a bunch of up-front and on-going work to keep this website up to date. I guess that's why it doesn't exist.

> but I want a table with the name of the crypto currency in one column, and the cost in USD to launch an attack in another column.

Doesn't the cost depend on who you assume the attacker is? The required hashing power doesn't have the same acquisition and operating costs for all potential attackers.

Of course, you're correct, but that's just an implementation detail.

Each currency would need an explanation of what resources the calculation was based on. E.g, n instances of a blah node on Google Cloud Platform running software x in config y for z hours.

True, but even crude order-of-magnitude estimate would be useful.