Re:Proof of work is temporarily illegal in New York
by BoppreH on Thursday November 24, 2022 @11:48AM
(#33733380)
The comparison to a lottery is too kind.
In a lottery the ticket fees go to the organizer, who wastes a little in administrative fees, takes a percentage for themselves, and returns the rest as prizes. Bad for income distribution, but not especially wasteful.
In a PoW blockchain the "ticket fee" — the electricity and depreciating hardware — is completely used up. The reward doesn't come from the other miners, but from transaction fees and new coins (diluting the value).
It's like a lottery that uses all the income from tickets to pay for marketing, and the actual prizes are paid by government subsidy.
In a lottery the ticket fees go to the organizer, who wastes a little in administrative fees, takes a percentage for themselves, and returns the rest as prizes. Bad for income distribution, but not especially wasteful.
In a PoW blockchain the "ticket fee" — the electricity and depreciating hardware — is completely used up. The reward doesn't come from the other miners, but from transaction fees and new coins (diluting the value).
It's like a lottery that uses all the income from tickets to pay for marketing, and the actual prizes are paid by government subsidy.