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Modern asic farms require a lot of up-front investment in developing hardware. All it takes is for one person to think he can hurdle the cliff and he can raise a lot of money to do it if the reward is there, not unlike the first group of people to raise funds to develop ASICS for Bitcoin (which were orders of magnitude faster than the hardware available at the time). We know Bitcoin can cope with a 100x more powerful asic coming online— can these systems cope with a 100x more powerful VDF?

To me this is like arguing that something like high frequency trading is ok because it doesn’t generate c02. The reality is that hundreds of millions in wasted human capital, particularly the best mathematical minds on the planet, is extremely costly. That much human capital, if allocated correctly, could likely do a lot to offset climate change, for example, among many other positive things.

From what you’re saying it seems like an “incentive cliff” at 100x the power of whatever the competition produces is being relied upon for the security of the currency, meaning there exists a strong incentive for someone to waste human capital computing a faster VDF if he thinks he can “hurdle” the incentive cliff of 100x the power of whatever the competition produces.

Given the competition is only a ~$15m investment in a group of hobbyists, and given we’ve already seen order of magnitude improvements over and over again with proof of work in Bitcoin once the incentives are there, why is it assumed that someone won’t mount a long range attack to break the system by engineering a 100x faster VDF? Moreover, how does the system recover if that were to happen?

But it’s several million just to get it started. If the reward for pulling off an attack is the same as in proof of work systems, why wouldn’t the waste wind up equaling the reward (ie hundreds of millions in waste if it’s used to secure something like Ethereum or Bitcoin)?

If there’s a reward for computing a VDF faster than everyone else, why won’t the amount of wasted resources, in the the form of e.g. human capital dedicated to computing faster VDFs, not be equivalent to the economic waste if the verification scheme used is proof of work? The article claims that proof of work is costing Ethereum hundreds of millions of dollars per year, but this VDF competition is also wasting millions of dollars in human capital to compute a fast VDF before there’s even a running blockchain using it (ie before there’s even a real non-synthetic incentive to break the system). Given that we need millions of dollars of waste just to launch the system safely, why wouldn’t we expect the wasted human capital dedicated to computing faster vdfs to increase to hundreds of millions once an actual attackable system is out in the wild, same as proof of work.

Moreover, it seems very unclear that wasting human capital is less economically bad than wasting the same “valu” in raw energy, particularly if a lot of that energy is from renewable sources anyway.