But it's a necessary evil for a _distributed_ currency. It's a way to protect payment validation from being controlled by a single operator by making a "hostile take over" very expensive. IMHO criticizing Bitcoin for its "proof of work" algorithm only converys a serious lack of understanding of how crypto currencies actually work.

There is an alternative, namely, the "proof of stake" scheme that Ethereum is going to switch over to but it has other short comings that might or might not outweigh the benefits of energy savings.

> - The ever expanding blockchain is wasteful (in storage, computation, network).

Well, the blockchain's current size is 323.54 GB. That's quite a lot but can be stored easily on a $100 SSD. Using $100 worth of storage to maintain an asset market of roughly 600 billion dollars is useful trade off, I would say. Of course, I know the blockchain is being replicated all over the planet but Google's cloud storage probably dwarves its storage requirements.

> - The throughput is way too slow.

Yes, 10 minutes is not very fast. However, compare that to inter bank transactions and this number seems blazingly fast again. However, in my opionion Bitcoin is emerging as an alternative to gold that's primarily used for storing value over long times. It's primary purpose will not be to maintain payment networks. This role will be taken by Ethereum or other alternatives like Stella Lumens, Loopring or Polkadot.

Near instant bank transfers have been available in a lot of countries for many years now. Or did you mean something else?

Of course, there are special purpose banking products to accelerate transactions but they are also more expensive than Bitcoin's miner fee.

As of last year, most banks also offer instant (10 seconds) transactions for a small fee. This is planned to be made mandatory at the end of 2021. My bank is charging 0.50€ for such transactions which is significantly less than the median Bitcoin transaction cost (more than $1 in 2020 average, more than $5 currently).

Both methods are significantly cheaper (usually free) than Bitcoin transaction fees at the moment. As a concrete example, EUR withdrawals from Coinbase to a SEPA bank account are both faster and cheaper than BTC withdrawals to a wallet at this point.

If a transfer takes any more than two full business days (IIRC), one of the banks involved is out of SEPA compliance.

The only thing that _really_ slows down bank to bank transfers is when your payment gets flagged for review for security or compliance reasons, but arguably, both also benefit you (as a customer not wanting to lose money or a citizen not wanting to indirectly cover the effects of somebody else's tax evasion or money laundering). In my experience, this also happens very rarely, but performance of this can vary from bank to bank.

$2M transfer costs $1. From/to anywhere in the world.

As a comparison, my freelance fees regularly came $13 short, and the only explanation was "interbank transfer charges". Plus the sender had to pay his own fees. And then my own bank would charge me ~$15 for accepting deposits from outside EU.

I'll take Bitcoin over the traditional banking cartel any day.

You‘re probably losing out much more than $13+$15 on bad exchange rates in the process too, so you should definitely shop around for options.

Chances are that the same transaction on Bitcoin, including conversion fees between your client‘s currency X and BTC, and BTC and your country’s currency Y (which you definitely will need, if not for food, then at least for income tax) is more expensive.

Good luck paying your lunch with Bitcoin.

We’re getting mandated bank API access too, interestingly. Or we were. Dunno where that’s at now.

Other algorithms exist and further innovations are likely. I don't agree that BTC's design features are beyond criticism.

BTW: For others who have never heard of "proof of stake" and "proof of work" ...

"Proof of work" requires miners to solve a cryptographic puzzle taking the giant share of all computing time required to validate a block of transactions. This is to assure nobody gains complete control over the blockchain and, hence, keep it being a decentralized effort. On the other hand, by providing a miner fee and a reward (currently about 6 BTC) the system creates incentive for miners to keep on validating Bitcoin transactions despite the costs. It's a careful balance and probably the most difficult aspect of the Bitcoin system to grasp.

"Proof of stake" means the miner with the highest monetary stake receives the largest share of the mining fees. In this scheme a miner needs to deposit quite a lot of money to be allowed to compete in the creation of the next transaction block. So it's not computing power enabling a successful miner but his or hers prior investment in the crypto currency. I think you understand now, why such a scheme would have been impossible to implement in Bitcoin 12 years ago.

Ethereum is preparing to switch over to "proof of stake" at the same time as they're preparing to run multiple block chains at the same time. Ethereum 2.0 hopes to save a lot of cost in maintaining its block chain and at the same time to boost its transaction turn over significantly. But it's also a risky undertaking. Keep that in mind if you plan to invest in Ethereum.

https://docs.nano.org/what-is-nano/overview/#representatives...

If nano (or any other tech) achieves greater utility for transactions without using proof of work, then it is arguable that BTC's use of energy is wasteful.

However, to be specific I would defend the consumer/miner's choice to use energy in whichever way he subjectively feels brings him the most value. I'd say it is debatable whether BTC's proof of work is wasteful. Calling this claim naive appears as short sighted. Tech is a constantly evolving landscape. Increases in efficiency are arguably already here.

BTC development is RFC based, and users approve by running own nodes, and miners have to comply in between. Until a project comes along which doesn't try to swindle its user base BTC will stay dominant.

There's no swindle in my view. As a user of the technology perhaps I'm biased. Although because I approached it from purely to solve a problem and not as an investment, I don't think I am as biased as others.

XRP would be a good example of a swindle surrounded by hype and marketing. Altcoins are rightfully scrutinized, but I think in the case of Nano there's unfair generalization without actual investigation into the technology.

What is popular isn't always the best technology.

Bitcoin is an equity based currency. If you have some Bitcoin you "own" it much like you would own a physical thing, like a lump of gold. And indeed, you are right, to implement a permissionless equity based currency, you probably need something like proof of work to ensure that there is an objective ordering of transactions.

However....! You can also build a credit based currency, whereby anyone can issue IOUs which are agreements between a debtor and a creditor. In this regard you don't "own" an IOU but you are a participant in an agreement which is an IOU. That might be pedantic but it's a difference from an equity based money system. For a credit based system you don't need proof of work or an objective ordering of transactions as any transaction is just a bilateral agreement between two parties. You could make the IOUs bearer instruments by introducing some blockchain elements (unilateral ledger updates) but ultimately there isn't much point in this because you have to trust the issuer. The difficulty with this type of system is that it's tough to bootstrap it - how do you measure reputation in such a system? How do you determine who's credit is good and who's credit is bad?

I think it would be exciting to see more research into distributed credit based monetary systems. Interestingly, our current monetary system is basically a pure credit system and that in this system we can view different types of credit as having a position in a money hierarchy. At the top you have central bank credit, next bank credit, next company credit, next credit issued by individuals. When an issuer's credit can be trusted enough such that people can use it as a medium of exchange (it can be endorsed from one party to another) then it _becomes_ money. That's quite cool. You can build a whole distributed monetary system from an endogenous money supply!

Gold, for instance, is extremely energy intensive/wasteful to mine, heavily tracked, and (until recently) had little utilitarian/industrial value outside of jewelry.

"Democracy", "freedom", "the law", "the economy"—all of these terms are in the realm of Philosophy and are subject to philosophical discussion, as they ought; none of these is not highly relevant in a universal, everyday, hands-on sense. Likewise, that meat production is wasteful doesn't mean it's a good idea to add yet another wasteful item to a place characterized by finite resources.

In that sense, a decentralized trust-less exchange system needs to replace that value (trust) with another (in this caase, proof-of-work and the huge size of the ledger).

Not easy...

So does bank transfers though, and we have been able to work around that for quite some time now.

Or have I completely misunderstood what you were saying?

You could add a layer for fast transactions to BTC but IIRC it can't handle processing nearly enough of them into the blockchain per day.

> Proof of work is inherently wasteful

This seems unavoidable for distributing new coins more fairly than just letting the creators print themselves a huge pile out of thin air, which would centralize coin ownership.

> The ever expanding blockchain is wasteful (in storage, computation, network).

Bandwidth costs are unavoidable for both transaction publishing (censorship resistance) and for verifying the transaction history in the Initial Block Download (decentralization requires widespread full verification), although the latter could in principle be mostly eliminated with a zero knowledge proving system.

> Having every transaction recorded forever is the opposite of anonymity

This is not necessitated by the design principles. Bitcoin chose to make amounts visible so that total supply could be transparently audited and because Confidential Transactions had yet to be developed (one variety of which is perfectly sound, needing no cryptographic assumptions to guard against inflation). Allowing address re-use seems like a design mistake that could have been avoided, e.g. with stealth addresses.

> The energy usage is insane.

This is a direct consequence of the high price of Bitcoin; i.e. needing to secure a high market map against double spending attacks. Which goes back to the top item.

> The throughput is way too slow.

Even with second layer solutions, we still need on-chain onramps and settlements. Low throughput is the price to pay for censorship resistance.

Transactions are settled instantly and without fees. Rent seeking miners are taken out of the equation. Developers of services are incentivized to run nodes to have access to the network.

If cryptocurrency isn't intended to be used as a currency, only traded on to others or used in some perpetually forthcoming usecase - then concerns about it simply being a finance scheme may be on target.

https://en.wikipedia.org/wiki/Nano_(cryptocurrency) https://docs.nano.org/whitepaper/english/

This is such a tired and over used trope.

How about being the best store of value humans currently have access to?

The world's reserve currency--the dollar--is being inflated by trillions and trillions of dollars, with no end in sight.

Savings accounts are paying essentially 0% interest; if you take inflation into account, people are losing money everyday they leave their money in these accounts. Countries in the EU have negative interest rates and it won't be too long before we have negative rates in the US.

Meanwhile, bitcoin is on its way to becoming a reserve asset and is being seen as a must-own asset by the best and brightest money managers and companies.

Bitcoin has been a lifeline in countries where the local currency has failed--like Syria, Venezuela, Argentina. It's allowed people to stay ahead of repressive regimes like in Hong Kong and Nigeria.

And it's going to allow people in the United States who's currency is being debased and where inflation is eating away at savings and retirement to have a fighting chance at being able to support themselves in the future.

You might want to understand how theft-by-inflation works [1].

Or how the dollar is gradually losing its status as the world reserve currency [2]. It's not going to be pretty.

[1] "Masters and Slaves of Money"—https://breedlove22.medium.com/masters-and-slaves-of-money-2...

[2] "The Fraying of the US Global Currency Reserve System"—https://www.lynalden.com/fraying-petrodollar-system/

What I see value in for a blockchain is store of value (which arguably is basically a pyramid scheme), smart contracts for provable logic-based transactions, niche database uses, and as you brought up: drugs (or more accurately, private/anonymous payments). Bitcoin is really a poor choice for both the smart contracts and niche databases, which leaves it with store of value and drugs. Once law enforcement legislates it to the point where it becomes impractical for drugs, at that point it is just a store of value. It holds no use except to become more valuable the more people buy into it, which is just a pyramid scheme.