That's putting it in the best possible light. Mining gold leaves the world with physical blocks of gold, which has no continuous upkeep cost. "Mining" cryptocurrency leaves the world with an asset that requires continual upkeep (further "mining") in order to maintain that asset. Any significant drop in the network's hashrate opens it up to attacks.
The upkeep cost for Bitcoin is, and by necessity must be, proportional to the value represented by Bitcoin.
But the upkeep cost of protecting the gold is continuous in the same way as bitcoin mining. If you want to own some gold you need to protect it (usually with the state apparatus of violence, which has massive externalities).
In other words, if you just mine a physical gold block, you don't really have an asset without the state's (or your own) continual upkeep that keeps it protected from attacks.
Those same apparatus are also needed to maintain a global internet without which Bitcoin is useless. You can also just bury gold to keep people from finding it, which is one of the reasons it’s maintained value throughout history.
Upkeep of gold doesn't scale at the same rate as Bitcoin. If we suddenly had 1000 tons more gold, we could put it in existing vaults and very little increased cost.
> But the upkeep cost of protecting the gold is continuous in the same way as bitcoin mining.
This completely misses the point, which was one of magnitude:
>> The upkeep cost for Bitcoin is, and by necessity must be, PROPORTIOANAL TO THE VALUE REPRESENTED by Bitcoin.
Also, that upkeep cost is 100.00% to protect the value of existing bitcoin.
C.f., gold:
> If you want to own some gold you need to protect it (usually with the state apparatus of violence, which has massive externalities).
I don't need continuous mining of bitcoin to protect my non-bitcoin stuff.
However, I do need the "state apparatus of violence" to protect my non-gold stuff, including things like my house and my body, and oh yeah, my fucking mining rig!
If all gold disappeared tomorrow, would anything about the "state apparatus of violence" change? No, of course not. That is absurd.
I never understood the "violence" argument against government. In that sense of the word "violence", there is no alternative that does not at some level also come down to the threat of force. The "state apparatus of violence" won't look so bad after you've dismantled the state in favor of something approaching anarcho-capitalism and are then close to Hobbe's state of nature: nasty, british, and short.
>you don't really have an asset without the state's (or your own) continual upkeep that keeps it protected from attacks.
This describes Bitcoin too.
I think it's facially absurd to claim that the existing financial system (including military, police, etc) costs anywhere near what bitcoin does, but even if it does, it's irrelevant because bitcoin doesn't provide the same things. Bitcoin is a virtual bar of gold or piece of currency, not a financial system.
"Of the existing 18.5 million Bitcoin, around 20 percent — currently worth around $140 billion — appear to be in lost or otherwise stranded wallets, according to the cryptocurrency data firm Chainalysis"
"“Even sophisticated investors have been completely incapable of doing any kind of management of private keys,” said Diogo Monica, the co-founder of a start-up called Anchorage, which helps companies handle cryptocurrency security. Mr. Monica started the company in 2017 after helping a hedge fund regain access to one of its Bitcoin wallets."
"“This whole idea of being your own bank — let me put it this way, ‘Do you make your own shoes?’” he said. “The reason we have banks is that we don’t want to deal with all those things that banks do.”
And there's a great PBS spacetime video exclusively covering the creation of heavy elements, and why they no longer think it's solely the result of supernovae [0].
This comment is probably sarcasm, but just in case it was meant seriously, I just want to make it clear that expending the energy of another supernova to create a currency would be, overall, a Bad Thing at this point in time.
Unless you've got some dyson spheres lying around that you're not telling me about, I'm going to politely request that bitcoin advocates not expend more energy than we have in the entire world just so that they can diversify their investment portfolios.
Actually though, I wonder if there's an analogy that could be drawn between the real origin of gold (supernova) and bitcoin (mining a block). Both are created as dense byproducts of a large compression event (bitcoin: transactions; supernova: the rest of the star). ?
There's nothing special about gold, every other heavy element is also a by-product of supernovae. So, the analogy only works on a dully contrived poetic level, unless you also want to compare Bitcoin meaningfully with lead.
>"Any significant drop in the network's hashrate opens it up to attacks."
I was curious about this. What would "significant" be? What is it based on - the number of outstanding blocks? Is this vulnerability mentioned anywhere in the protocol spec?
Did you know that vanilla financial securities also require upkeep? Approximately 0.5% of the value of all financial assets is burned every year (and potentially an order of magnitude more, depending on what asset and packaging you're talking about).
That's a heck of a figure you're not providing a reference or explanation for at all. Or even an explanation of what you mean by financial securities and "burned".
Mutual funds, the most legible way to get an estimate of the holding cost of securities (since they are required to transact at net asset value) routinely charge between 0.2-1% fees, depending on size and asset class.
Clearinghouses, transfer agents, and cash management firms don't work for free, which is the problem that cryptocurrencies explicitly solve; neither do compliance, KYC, fraud, etc., which most cryptocurrency protocols elide altogether.
They also have an entire corpus of regulation surrounding them and coordination overhead that allows sovereign states to compare apples to apples, and ensure that these respective sovereign State's financial systems are not utilized to facilitate patterns of behavior those respective State's citizens define as criminal.
Oh wait.. You don't want that functionality, and you're still using up the energy footprint in the event you are correct. One of these delivers significantly less versatility than the other for the same energy investment.
I agree that the analogy does not extend past the surface look, but that's the point of calling it a skeumorphism: a new thing that tries to perform the function of an old thing, under a facade that mimics the old thing in a shallow way to ease transitioning.
this is correct, I think solidity doesn't even run on a gpu at all
The energy usage of ethereum comes from the proof-of-work DAG, not the solidity execution. You can easily see this by running a (non mining) ethereum node, any decent CPU will churn through the transactions in blocks in a matter of milliseconds (~200 ms per block), not the 13 seconds it takes to generate that block
It's a calculation, but not a useless one done just to simulate gold mining, unlike Bitcoin. Look deeper into what Ethereum actually is, it's not just a cryptocoin, it's also a computing platform.
They’re not really making a point that needs evidence. If you have no idea what Ethereum is, it’s not unreasonable to suggest that you take a quick look at their website before participating in an web forum discussion about it.
This is different than people blithely spouting “it’s not my job to educate you” when asked to give some support for their controversial, unsubstantiated claim.
Since we've gone meta anyways... Why do so few people value simply linking to and quoting directly from primary sources? From random internet comment #37846399, to sms chats, to user stories on a scrum board, and even news articles these days, nobody cares to drop a link to or actually quote the thing they're referring to. Docs, articles, code, journals...
Yes, it's work to back up your claims with direct links to a source. But maybe that's a reasonable minimum bar to hurdle to stand behind ones statements.
I am not the first one who made a claim in this thread - your reply would be better placed under that comment talking about gold. Surely opening the homepage is reasonable minimum before posting a negative comment.
I'm gonna steal that one, thanks. :D