If I understand correctly, you are not trusting "someone", u are trusting the network itself. Imo no different than any other operation on the network. Any operation on the network requires trust that the network will do what it agreed it will do.
Staking pools are not part of the Ethereum network protocol - they are a third party that you need to trust with your Eth. You are lending your Eth to this third party, who will then participate in the Eth network on your behalf, and who is also under no particular requirement to do what they say they will.
If I have to give my currency to a third party who will then invest it for me, then why bother with decentralised cryptos at all?
>any operation on the network requires trust that the network will do what it agreed it will do.
If I were an Eth apologist, I would explain how the code that defines the network operations is fully open and inspectable, so no trust needed.
Right, parent is overstating it, and that's fair to call out, but it's still a low barrier to entry (even without the staking pools). At the current price (where anyone can get in), it's ~$1660, so 32 ETH would be ~$53k. How many "paycheck-to-paycheck" households blew that much on a fancy new pickup truck? Or home remodel? Or extra interest charges on the lifetime of a home loan from stretching their budget?
Am I joking about the quantities of money that working families will spend on unnecessary stuff instead of investments while complaining about the inability to secure their financial futures? I am not.
Bitcoin mostly reuses wasted energy where there is no other better paying customer. Even if we would stop all Bitcoin mining on the planet, it wouldn't make any difference for this wasted energy, it wouldn't be put to other uses.
Please take the time to watch this podcast about bitcoin and electric grids and power usage:
...except that people are bringing new carbon-emitting power plants online to power their mining rigs.
Really though, this argument is utter nonsense. Solar/wind/etc. power being dumped into Bitcoin mining means carbon-emitting power is being used elsewhere instead of being shut down. Bitcoin is an environmental disaster that consumes massive amounts of energy just to process a tiny number of transactions.
That’s not how power grids work. It’s only economically viable to build many forms of green energy if you have a constant baseline consumer, so you rarely or never have to turn off the power plant, and you don’t waste money if you over-allocate enough to meet demand during low production periods (like for wind). Bitcoin is unique in that it provides a constant demand at a particular price.
Visa issues annual "Corporate Responsibility and Sustainability" reports, which include detailed accounting of Visa's energy consumption, greenhouse gas emissions, etc. Mastercard issues a similar report. So do big banks like Chase and Citi.
So...challenge accepted?
(If you actually read these reports and compare with Bitcoin, the thing that will immediately stand out is how many orders of magnitude more energy Bitcoin consumes per transactions than the mainstream electronic payments networks.)
Off chain transactions, whether thinks like lightning network or centralized exchanges, make it very difficult to actually know how much value transfer is happening. As the network scales up, these kinds of transactions will increasingly make up a greater percentage of all value transfer, while easily measurable base chain settlement transactions will be a minority.
You're right, for the same reason that articles like the op's aren't entirely accurate either. Nothing is perfect, however it is easy to consider that global finance is orders of magnitude more wasteful than bitcoin. Just imagine all the bank tellers (transaction validators) driving to work each day.
It is always interesting to me how other PoW chains are completely ignored in the general hatred. ETH mining is a massive consumer of electricity, but since that is supposed to be ending some day, nobody seems to care.
The end solution might eventually be to tokenize all btc, on top of eth.
> Just imagine all the bank tellers (transaction validators) driving to work each day.
Don't forget the Proof of Violence that secures the fiat monetary system. The US military is the largest institutional consumer of oil on the planet.
> It is always interesting to me how other PoW chains are completely ignored in the general hatred.
And simultaneously, bitcoin still gets blamed for GPU prices, even though that's Ethereum and other alts.
> The end solution might eventually be to tokenize all btc, on top of eth.
Highly unlikely. There are good arguments for why PoS will never fully replace PoW. I think it's more likely that all the altcoin use cases get rebased as second layers anchored into bitcoin's PoW.
Have you thought though that if more money goes into Solar, Wind/etc (via BTC, Eth mining and similar) that more money goes into renewable energy and thus more money can be spent by those companies improving their existing offerings or researching new tech?
A lot of the time Early adopters end up essentially funding technology that would have investment otherwise.
With Bitcoin mining, that money comes with the massive carbon emissions driven by the huge energy demand. The alternative, governments subsidizing solar/wind/etc. deployments, comes without the massive energy demand and lets grid operators shut down their carbon-emitting plants.
Like I said, the fact that people are bringing carbon-emitting power plants online to power Bitcoin rigs speaks volumes about this line of thinking.
The problem is with many with your attitude is that everything must be done perfectly now. This is the attitude of an abolitionist. It isn't perfect therefore it must be banned.
There is money to be made mining Bitcoin and people will mine it (illegally if need be). It is better that if this funds renewables (they claim to be paying for offsets according to the clip and investing in Solar) now even if it isn't perfect (The plant itself seems to be better than the Coal powered plants in China).
This is a broken windows fallacy that is often repeated on reddit and HN. It makes about as much sense as all of us buying solar panels and leaving our refrigerators open all day.
I didn't know what the broken window fallacy was. So I looked it up. It is rather dubious if what I said fits into this fallacy.
If I leave my refrigerator open all day, it is guaranteed it will produce nothing of value. In this case, it is more dubious. They are producing a good that people want to buy. You might think Bitcoin is worthless, but that is besides the point, other people think it is worth it. Since the benefit vs the energy usage is completely subjective it isn't as clear cut as you like to make out.
My point was that people spending time doing things that seem pointless at the time can sometimes benefit everyone in the future in unexpected way. You, nor I can know what the future holds.
>If I leave my refrigerator open all day, it is guaranteed it will produce nothing of value.
This isn't true. I can put the back of my refrigerator in my doorway and use it to cool my house. "Leaving my refrigerator open all day isn't wasteful, because it cools my house and I use green energy to do it." This is essentially the logic used in this thread; it is a complete non sequitur.
I suppose one could say that whether or not it's wasteful to cool my home with my refrigerator is subjective, but most would say that's just being obtuse.
Utilities are incredibly constrained in how much power they can generate, where they can send it to, at what times, and how quickly they can adjust these parameters. Bitcoin mining, as a reliable but highly flexible consumer at a reasonable price, actually makes operating a grid way easier and makes the use of slow-to-react (like nuclear) or unreliable (solar, wind) power generation much more feasible.
1. difficulty calculations only happen every 2 weeks - so this would result in a comically bad UX where your transactions confirm dramatically faster or slower depending on the weather
2. the network security provided from mining using electricity is directly related to the opportunity cost of using that electricity for mining. If energy was otherwise going to be thrown away, the security provided from mining using that energy is zero.
What do you think would happen? Electricity doesn't just get "vented", and grids can't generate too much above usage without serious damage. If it wasn't being used it wouldn't be generated.
51% attack resistance requires that mining be resource-intensive and have significant opportunity costs. Otherwise - if mining is not costly and wasteful- it's not costly for an attacker. If electricity prices went down to 1% of their current value tomorrow, miners would need to increase their electricity consumption by approximately 100x, or network security would suffer.
To the extent that energy or resources used for mining are free, or surplus (would otherwise be wasted)... that mining activity provides no security to the network.
This is the same reason advances in miner performance (e.g. better ASICs) don't provide more network security. Miners mine faster, but any attacker would have access to the same technology. The only thing that can actually make the network more secure is using more scarce resources - whether directly, .eg. via energy usage, or indirectly, by manufacturing ASICs, etc.
Bitcoin mining is not resource-intensive in the sense that, say, aluminum smelting is. The thing about aluminum smelting is that if there's efficiency improvements, that's good! That means more aluminum from the same limited supply of free/low-cost/surplus energy. I like aluminum! But when somebody finds a way to, say, double the hashrate-per-watt you can get mining Bitcoin... the hashrate increases, but the network-security-per-watt stays the same. It has to.
It's not resource-intensive in the sense that automobile transportation is. If cars get more gas-efficient (or energy-efficient in general), awesome! Everybody's life gets better. If Bitcoin mining gets more efficient... miners just mine more. No extra security. No actual reduction in resource usage.
Assuming that miners mine when it's profitable (+EV) and don't mine when it's not profitable, Bitcoin's difficulty adjustment system implies the following: "The sum of all transaction fees and the coinbase reward for each block equals, on average, the cost of the resources used by all miners during that block period plus a small profit."
In other words, with a 6.25BTC block reward at current prices, every Bitcoin block requires burning about $250,000 in resources- or about $1.5 million an hour.
Now, that doesn't have to be electricity. If we discover free energy tomorrow and electricity prices go to zero, the resources used would likely switch to be those used in miner ASIC manufacturing- since every ASIC made would be a literal free money printer. But you'd still need to (amortized across the ASIC's life, of course) use resources worth about $1.5 million an hour on network security - or accept that network security is weaker. And to be clear, that's "worth" including things like transportation costs- natural gas may be worth $X per BTU, but natural gas out in the middle of nowhere where it'd otherwise be flared is worth far, far less, and using it thus provides far less security.
So, Bitcoin is either insecure or wasteful on an almost unimaginable scale - and probably isn't even wasteful enough today. (And no, that's not an XOR.)
The only way I can see not to wind up at this conclusion is to argue that markets aren't even weakly efficient.
The locked up energy used for mining was never available to populated area's in the first place, it is exces energy.
It's a bit like if you compare taking a shower in the middle of the desert with standing under a water fall and telling someone not to waste water while standing there because you consume as much water as 10000 people.
If you smelt aluminium in a remote area you then have to move it to an area where it can be useful. Moving it consumes a lot of energy. If you mine a bitcoin near a power plant with excess capacity, anyone anywhere in the world with an internet connection can leverage that work for value transmission. This literally allows a computer in China to replace an armored car in Denver, Colorado.
> There are plenty of other good uses for electricity besides bitcoin or powering a city directly.
The argument "uses lots of energy = bad" is a fallacy. You have to take into account what the alternatives are. You know what uses a lot of energy? Public transit systems. But nobody is arguing that public transit systems are bad because the alternatives are a lot worse.
But if you smelt aluminium, you have valuable aluminium.
It's disingenuous to pretend (without any sourcing) that bitcoin is only mined using electricity that would otherwise have been wasted.
If this were really true, then bitcoin miners should all be getting paid to act as load banks[0] for their local electrical grid and soak up that excess power. Since they are instead paying for electricity, they are using valuable electricity, not spare/waste power.
> But if you smelt aluminium, you have valuable aluminium.
And it's useless until you spend more energy to move it to where people want it.
> It's disingenuous to pretend (without any sourcing) that bitcoin is only mined using electricity that would otherwise have been wasted.
It doesn't have to be only mined that way. You're being absolutist. Competition has resulted in bitcoin mining being very sensitive to energy costs. It stands to reason that miners--especially the ones operating at large scale--will move to places where there is cheap energy.
Several of the big mining operations mentioned there are located in places known for cheap electricity. Genesis mining relocated to Canada and Iceland specifically for cheaper power. Gigawatt is located in Washington State which has some of the cheapest electricity in the U.S. (part of the reason Google chose The Dalles, OR for one of their data centers).
If you are generating electricity where it cannot be used, then you are causing needless environmental damage and you should almost certainly stop doing that.
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