This may be a radical take, but I think nations should introduce some unprecedented legislation: ban trade of proof-of-work cryptocurrencies.
Don't ban their trade because they make poor financial products, either because of rampant fraud or criminal activity. That's a different argument and requires different approaches. Ban their trade because global society shouldn't accept rampant incentives to literally burn up energy [1] to make financial products. Especially because proof-of-work simply just isn't necessary to have cryptocurrency.
Banning their trade won't categorically stop PoW cryptocurrencies. What it should do is completely tank their value and get the world to move on to less destructive coins.
I don't think there's any precedent for banning classes of financial products for environmental reasons, but it's time to create one.
[1]: In addition to environmental reasons, there's probably also economic ones. Mining burns through other scarce resources such as chip production capacity, although the true impact there is unclear.
If that's not the case, how do you propose to enforce that all use cases use less electricity, and how do you punish those who use too much?
I could see a lot of people make the argument the production of a lot of energy intensive goods is not worth-while.
On the surface this sounds like bitcoin's PoW use will simply stop. It's actually the entire opposite.
When governments ban it, they go after sizeable, identifiable organizations running these operations, that is their only choice. These operations are optimized in their energy usage, because it's only in their interest to reduce their consumption relative to the value of the coin they mine.
The moment these operations are shutdown, there is a massive sink in the hash rate, smaller operations and hobbyists will rush in to fill it. Hash rate gradually climbs back up and instead you have 10x the energy usage because you can no longer run the PoW in a scalable way.
However, some of the biggest plagues to society are rooted in central banking policies that over time devalue a nations currency through excessive money printing backed by nothing, or gambling via derivatives that when a bubble pops requires bailouts. Even worse, where we are now is done via quantitative easing which is a fancy word for more money printing to buy government debts to keep the economy afloat. If Bitcoin or other cryptocurrencies can provide all the same services banks offer (borrowing/lending/saving) and be backed by a finite number ensuring value over time then we, as a society will be less manipulated by politics and therefore experience deflation which will could close wealth gaps.
Bitcoin may have an energy problem but the problems it aims to solve are extremely important as well. “Necessity is the mother of invention.” If Bitcoin can really solve some areas maybe the conversation should be about how can get 100% of BTC energy consumption to be renewable.
With PoW the state can influence the existing miners, but cannot prevent new independent miners to pop up and counter act.
Humanity will continue to require energy as it advances and banning anything "because it uses too much energy" is a ridiculous advice. How about we ban gold mining, or set quotas on the number of children people may have, that will surely contribute to our CO2 reduction goals. It's also Orwellian and reminiscent of how the world looked like for citizens of the USSR back in 1960-1990
Videogames run GPUs at full capacity too, we should ban them too. No one NEEDS to pretend to be a cowboy for 100+ hours each across 36 million GPUs.
Actually maybe there should be a ban on computing power above mobile CPUs available to non-government bodies, if this really is so devastating to the environment we need to limit the amount of damage people can cause as individuals, why does a normal person need a GPU anyway when smart phone graphics should be enough.
There are tons of things that people do that I might deem not worth the environmental impact, like flying a hundred thousand miles a year for business, or eating beef, or driving to work every day, or having bigger houses and lawns than they need. Seems kind of arbitrary to allow most wasteful things that people do but draw a line at being able to participate in a certain kind of blockchain. The per-person impact of holding and transacting with bitcoin is not egregiously high compared to all the other things people do in their day to day life.
And based on ethereum's move here, perhaps people are starting to vote with their wallets anyway and such dramatic limiting measures aren't needed?
This is an insane take. Proof of Stake is NOT secure, the stakers can collude to reorganize the chain at almost no cost. This is like the exact system we tried to get away from, the USD system is also a Proof of Stake.
I think that at some point, PoW will become so economically unfeasible that it'll simply make more sense for miners to ditch those coins and whale up on PoS ones.
You don't necessarily need to ban the coins to fix this aspect however, just make sure they don't get integrated in the financial system too much. They're basically digital gold. Gold was ok until central banks tried to anchor to it which caused the Great Depression and maybe even WWII.
Unless you want to also ban servers or services that are using deep learning training, decoding massive videos and livestreams on storage systems that are also burning up the planet.
It's not fine to allow PoW cryptocurrencies to continue to burn the planet but collecting mass amounts of user data and using wasteful deep learning training continuously is fine to burn up the planet on GCP, AWS and Azure?
If you want to encourage other uses of electricity, subsidize them, don't just ban arbitrary forms of consumption.
If you want to target an externality of the free market, do it directly: simply tax emissions. This will guide the market towards greener energy generation and direct capital out of activities that produce emissions without generated value.
Proof of work is the only thing of value, the only distributed consensus model that is secure and the only way forward for store of value cryptocurrencies.
That is to say, it's self correcting. If the price of energy increases, there is less mining. Alternatively, the miners are also incentivized to find cheaper or develop cheaper alternatives; this spurs innovation.
If prices rise due to mining, innovation will take place and more energy will be developed.
There's nothing wrong with this mechanism, as it corrects itself. In 2050 when you can no longer mine bitcoin we will that have an abundance of cheap power. Which is the single greatest factor in reducing poverty.
Frankly, I think this comment is off base. So far there have been zero negative measurable impacts from power usage related to crypto.
All that wasted energy is paid for by the holders, and proof-of-stake is just more financially attractive.
No government intervention is required IMO.
This ban needed to be internationally, though. Pretty difficult to enforce on a global scale. And then it would only have a short term influence on the price of, say, Bitcoin, until enough “black” mining power emerges.
I would just relax. Bitcoin is not going to destroy the planet. In the long run it’s going to be a niche financial tool compared to the scale of Ethereum or other competitors (Cardano, Solana or Algorand). It’ll be the PoS enabled DeFi networks that are going to disrupt the banking business.
* Reduce trade * Reduce value * Reduce carbon use?
Is there a case ever where an illicit market found a price equilibrium which was lower than the licit one? And, if such a ban does cause the price go up, won't the same incentives cause continued mining competition?
How about continuing research and development of solutions providing cheaper, greener energy instead of sparking righteous war against something that consumes energy based on incompetent social media fart?
The loudest voices against something are typically hypocrites that happily fly on their gas guzzling private jets bitching about people driving their oh so inefficient cars to work.
That's not only radical, but a grotesque knee jerk reaction.
If you think about renewable energy, there's a problem of mismatched production with consumption and transmission. This causes wasted energy (or energy that is very low value), which makes renewable energy projects less viable.
Sure, one obvious way to address that is to add batteries to store such energy. Now, go mine (and refine) enough lithium to build utility-scale batteries. That's a huge environmental issue that no one wants to talk about, specially Tesla/Elon.
What's a competitor to energy batteries? Proof-of-work mining of bitcoin: it make renewable energy projects economically viable, because the energy of low-usage times can be used to mine bitcoin, which can pay for energy of high-usage times.
If there's an environmental/carbon cost to BTC mining, then attach a carbon tax to it (or something like that).
I don't know and personally hold only a little bit, nothing I would be very pained to lose, but it would certainly cause a lot of economic harm to a lot of people to do what you propose. The idea cannot be taken seriously without first answering my question.
Buy bitcoin.
https://web.archive.org/web/20210116135412/https://taaalk.co...
https://bitcoinist.com/bitcoin-mining-energy-consumption-us-...
Miners will move to where is is profitable and will be ultimately incentivized to find cheaper (ultimately cleaner) means to mine.
First it was 'but criminals use it'. Now it's 'think of the environment'. What's the next excuse going to be?
You end up needing to solve the same type of problem that PoW solves in order to enact a PoW ban simultaneously across all countries - how can all parties trust that every other party is being honest and will follow through (Byzantine Generals problem)?
If the government starts arbitrating on what is a judicious use of energy on environmental grounds, then you're a short step away from banning, say, beef production.
It seems kind of necessary to achieve wide distribution and avoid wealth concentration.
Ethereum will drive and that is good - but it solves different problems compared to Bitcoin.
In regards to banning PoW, sounds like the net neutrality discussions honestly... so to me that does not make sense for the same reasons.
And here is the kicker, because its permissionless, it can't be stopped.
POW is more _government_ proof than any other method. To many the threat of central bank digital currencies is justification enough for POW's energy consumption.
That might cause a financial crash of the cryptocurrency market, with the trust issues, etc. It wouldn't be wise.
Jokes aside it's really hard to decide what's reasonable energy usage from waste. Ultimately the real question is who gets to make that decision.
And overall, the idea of government getting to decide what are acceptable uses of energy and what isn't is actually terrifying
I'm a crypto-skeptic, but why would I ever hold a crpytocurrency in that scenario? If governments would ban it for environmental goals, they'll ban it for political goals, too.
The only interesting bit is cryptocurrencies would have to legitimately bring something new to the table that's actually better than the existing financial system in order to be viable.
To me this illustrates a lack of understanding of the space.
It’s all bullshit and hype — the crypto equivalent of the Chick-Fil-A cows saying “eat more chicken”.
Outside of ethereum, proof of stake is no different than a database. The ownership is so centralized that you only have 3-5 people/organizations approving everything.
The whole point of crypto was to be decentralized, proof of stake is not that. Cardano, solana, they all are pointless as a token because the whole supply is largely owned by a few people.
PoW doesn't scale. It eats up power needlessly and we're only stuck on it because the original BTC was a PoW cryptocoin. Simply banning trading of PoW coins would do mounds of good - the crypto community would be better streamlined to move toward PoS coins of the future and environmentalists wouldn't have to waste their resources lobbying to ban BTC anymore.
This doesn't fix the problem but it does fix the environmental impact.
Mining has been concentrated in the hands of a few gigantic mining pools for a while, and PoS will actually make Ethereum more democratic. Again, this is based on documentation, there might be unforeseen consequences
With endgame PoW only the rich can acquire mining ASICs and locate them in cheap/free (stolen) electricity zones. The vast majority of the world is entirely excluded from PoW mining BTC because the cost of electricity in their region makes mining unprofitable.
The main difference with the fiat world is that with Ethereum you have transparency, and there is no corruption. You can't just bribe a politician to enact a rule you want. Everything that happens in the network is recorded permanently, and rules are not a suggestion, but a practical reality that can't be circumvented.
Also the current fiat system is debt based, which means that the vast majority of money is printed by banks and the money printing power is at the highest ranking sales person, and hidden.
Obviously he's biased in favor of PoS for various reasons, but I think it's a worthy read.
The delusion that crypto is or can be the best thing humanity has ever created has to come to an end.
Let crypto just be another moderately useful system in society and let the speculation game die out.
We could bring microtransactions to the web, and replace a lot of advertising, if transaction costs were zero.
With PoS could you take over all coins by buying 51% of the existing coins? So if the market cap of ETH is 200BB spend 100BB to double your money?
People who control stake can refuse to include (censor) transactions, as there is no market competition for transaction inclusion like in PoW. In PoW, if 51% of network power is censoring transactions, then censored transactions can attach a higher fee, which competing miners will use to buy more equipment and mine the censored transactions.
These are the ones I know about, that I learned in an evening of research.
No one would buy those from you, so at best you can burn money to burn other people's money at a premium.
My guess would be at some point people would realize a takeover was occurring and panic, but it seems like a 51% buyout would require an ungodly amount of money and time.
You can't really double-spend that way, but you can get a disproportionate amount of the shard rewards. In order to defend against this, other participants will also have to mine for a "more fair" alternate reality, so you end up getting a standstill where nobody can get economic advantage as long as the total power being devoted to preventing chain-shopping is greater than the amount spent on chain-shopping.
In the end the energy expenditure would likely be unchanged from the status quo, it would just be hidden behind a facade of inexpensive proof-of-stake validations that conceal the actual work being done to ensure that this is not abused. This way everyone can feel warm and fuzzy because there's no actual way to measure how much work is being done to keep the validation from being monopolized.
I don't think the network can figure out an "oops, AWS or Comcast went out; my nodes at home or in the cloud shouldn't get slashed" vs "lets sabotage an ISP or network for enough time to trigger penalties and repeat it".
These kinds of off-network incentives can disrupt the reward system. It's even possible to incentivize a lot of people to collude in a double spend attack if the rewards can be distributed to the participants.
With PoW, it's all just physics, energy, and math. With PoS it's rich peoples opinions and validation. An attack on PoS will likely be political... and politics tend to slip into war if there's not enough adults in the room.
I'm personally very happy for PoS and hope that it'll be successful, I would be a lot less annoyed with cryptocurrency bullshit if it wasn't so wasteful. With proof-of-stakes it basically joins the ranks of essential oils and other MLM scams, I'm fine with that.
At least the environmental problems are reduced with PoS
At least POS gives the power to those that actually have an interest and stake in the currency itself.
The private networks for final settlement are becoming more interesting to market participants. And they are also aiming for distributed (sharded) proof of stake.
Crypto has made very little(perhaps zero) progress toward any solution in decentralizing power.
If the miners really wanted to change the protocol, they would have done that. The exchanges would have followed, as they had declared that the longest chain would win, and that would be game over.
Instead the miners gave in to the perceived authority of the Core developers, who pinky promised to later raise the block size (which they backed away from).
Regardless, history has proven that the most legitimate branch of a blockchain wins, irrespective of security model. It will not be the actor with the most hash power or stake. For reference, see the Justin Sun/STEEM drama.
Vitalik Buterin has an interesting blog post on legitimacy: https://vitalik.ca/general/2021/03/23/legitimacy.html.
This is a naive viewpoint. Ethereum (as a currency) is an "M0" token, like cash or Fed deposits. There's a lot of handwaving about bonds and whatnot, but essentially the Fed can create new money simply by changing numbers on a balance sheet, and they can make that money into folding money and change which they can issue.
The banking system is a complex system that creates IOUs on top of that base. Some of those IOUs are even better than the cash layer -- you can't buy stock, for example, for cash, you need bank IOUs to do that.
That said, then, what is PoW and PoS used for? They're essentially distributed methods of ensuring that nobody can forge money. So the equivalent in the world of dollars is not a bunch of bankers chuckling to themselves about how they're fleecing the plebes. The equivalent in the real world is a bunch of aircraft carriers and planes and bombs and people with big guns, which gives the ability to say (credibly) that it is a crime to forge dollars no matter who you are or where you live.
Bitcoin's attempted solution on this front is off-chain scaling via lightning network. As far as I can ascertain, this has had highly limited adoption.
Eth's attempted solution on this front is sharding. I can't claim to be an expert in this, but from my understanding after proof-of-stake is deployed, ethereum plans to deploy something like 64 separate "shards" which, from my understanding, are like extra blockchains for conducting transactions, and using some kind of complicated proof of stake system to keep it consistent. In this case, while the main-net still has limited global throughput, scaling up to add more side chains will allow scaling additional throughput. You can read more here https://ethereum.org/en/eth2/
As with lightning, we don't know how well this will actually end up going until it's deployed.
In general, fees go up as the token price goes up since fees are usually charged as a function of transaction size or complexity, and also fees rise as a protocol hits its tx limits, but not always. Nano is an interesting cryptocurrency that is fee-less (although they just had to roll out an emergency update to improve spam resistance), so it's possible to design a fee-less system, but it's certainly even more experimental atm.
There are, however a number of cryptos that currently (and by intent) have <$0.01 (sometimes significantly less) fees. This includes (just going down by market cap): Ripple, Bitcoin Cash, Stellar, or Dash. For transactions, even though fees are a bit higher (about $0.06), I like Monero since it's one of the most private and widely used cryptocurrencies out there, and it's fees have actually significantly decreased due to technical improvements in transaction efficiency, dynamic blocksize, and an algorithm that can actually reduce fees as volume increases.
So yes, it's currently not practical for microtransactions.
BTC refuses to scale, Lightning is permanently broken.
Ethereum will reduce the fees with sharing, but that will take time.
However, I cannot abide by a money speculation mechanism which uses as much electricity to mine worldwide as the Netherlands use in total. That's absolutely asinine to me.
No. There are developers who actually prioritize on-chain scaling. For instance Bitcoin Cash and Monero have very cheap fees, and they will stay cheap for the foreseeable future.
https://help.coinbase.com/en/coinbase/trading-and-funding/ot...
Also, there's the inherent issue with Proof-of-Stake that Proof-of-Work doesn't have: the initial distribution of the coin has to be wide enough before it could feasibly self-maintain a PoS shift without being immediately vulnerable to consensus attacks. Ethereum is definitively mature enough by now, it wasn't a few years ago.
* The design of the Beacon Chain is far more optimised than our initial designs for a PoS system
* There are far more crypto-economic edge cases in a PoS system when compared to PoW
* Software development is hard and time estimates are even harder
* The use of a hybrid fork choice to balance safety and liveness trade-offs
* There is a crazy amount of value being handles on Ethereum so it is necessary to be conservative with our changes (move fast and break things is not an option)
* There are 4 concurrent implementations being developed all of which need to be inter-compatible, and production ready
* As Ethereum governance is decentralised we need a shelling point for exactly what Ethereum PoS looks like, this takes time
* We have worked hard to create, encourage, and embrace standards with other chains so that the cryptocurrency community of tomorrow is more inter-compatible (eg. IETF BLS standard or libp2p networking)
* We have spent time designing around quantum-computing resistant backups for the majority of the cryptography (eg. validators all have a Lamport backup key though most don't realise it)
* New cryptography has been developed and previously abandoned schemes revitalised (eg. Verifiable Delay Functions or the Legendre PRF)
I don't understand how proof of stake works to the depth I understand proof of work. But this reassures me that it's feasable that they'll accomplish the same distributed consensus.
So then, could I say that Ethereum proof of stake will allow the owners of the coins (ether) to be independent from the owners of the mining operations?
or uhmm...
is the independence between the computaional costs of the "mining" and actual minted ether?
And also "audit the auditors". So they don't end up on a future rekt.news leaderboard.
If I’m building a marketplace business in 2021, where I want to be “crypto-first” instead of relying on PayPal and Stripe Connect, where do I start?
The marketplace sells access to resources with an off-chain ACL system. It facilitates trades between resource sellers and buyers.
I assume I want a smart contract between buyer/seller to record resource grants on chain, which the access layer checks as a source of truth.
But if I were to do this on Ethereum, the gas fees would be really expensive. I’ve heard about Polygon and “optimistic roll-up.” Is this a viable solution?
Unless you are building a dark web market, why would you want to? It will be more convenient for the vast majority of users to pay with card or PayPal.
It is just as secure as the base chain (unlike polygon) and has low fees and has been live for the past few months. This is a perfect solution to simple payments.
The difference between optimistic rollups and zero knowledge rollups is that you can’t deploy arbitrary smart contracts to zk rollup, it only supports a limited set of use cases, such as simple payments for now. Read more here https://vitalik.ca/general/2021/01/05/rollup.html
Using an L2 system will mean that your user will need to be using that specific L2 system as well, but the UX doesn't seem so bad (at least for ETH -> polygon, and for the cryptocurrecny space so far).
ETH 2.0 will reduce gas fees somewhat on the mainchain, but it's fairly obvious that there's huge demand, the sharding that ETH 2.0 will do is create 1 shard for execution & 63 for data only. Most L2 systems will mostly use the data shards, so we appear to be heading towards an L2 future.
In short if I were building a company in the space I'd be looking at deploying both on the mainchain (L1) and on a L2 system, but prioritize the L2 system. Unfortunately we may end up in a world where there are dozens or more L2 systems and either the users or the companies have to pay the cost to hop between them.
But I've absolutely never seen it in the wild.
Let's assume for a second that future developments in the the Ethereum protocol really unlock the widespread use of distributed apps, and herald a new technological era. As far as I understand, Ethereum optimists are betting that then people will be forced to buy Ether to participate in this Internet of distributed apps, driving the price higher.
In this (optimistic) case, wouldn't someone just start a new blockchain with the Ethereum protocol? It's open source, right? To me it seems that a new blockchain that e.g. gives every human a wallet pre-filled with the amount of Ether needed for staking (plus some extra) would appeal more to the vast majority of people than a blockchain where the early adopters are the new rubber barons of the Internet.
Re: new chain / forking. Just network effect. Ethereum currently secures huge amount of value in DeFi. Any new network will not have those funds in it. There are also stablecoins. If blockchain-native assets (BTC, ETH, DAI etc) can be "doubled" by forking (e.g. BTC to BTC+BCH) it's not possible for fiat-backed assets such as USDC, USDT, EURc etc. Issuing bank has to pick a side of the fork.
The only use of crypto is to get rich by being an early adopter. It's easy to design a new system that doesn't benefit early adopters but no one will care about it.
Sure, and many have, but they don't have the security, decentralization, dev mindshare, community, tooling, or ecosystem that Ethereum has.
That sounds awesome. If you can securely deliver a cryptographic key to every human on the planet and teach them to use it, I'd happily invest my life savings towards that ends. Unfortunately due to disparities in education, safety and access to technology, I think this is a near-impossible task in 2021.
Cardano is issuing cryptographic student IDs to 5M students in Ethiopia though! The future is bright!
With Ethereum, every time a new smart contract is added to Ethereum, the whole network becomes more useful, as each contract can communicate with each other. You can assemble new applications based on the building blocks of existing contracts.
Some like ethereum for its maturity and dev team.
Overworking your engineers will most definitely lead to compromises.
But good to see that Ethereum came to their senses and are serious about reducing the environmental impact they have.
Is it not possible there's good reasons they didn't move to proof of stake sooner? "Came to their senses" seems to imply they had no good reasons.
I don't know the technicals of why the migration has been gradual, but the destination has never really been in doubt.
Otherwise, theoretically you can "overwork" i.e. (work more than standard 40 hour weeks or some standard of work hours) whatever without compromise
On a side note, I have mixed feelings about PoS. The idea behind Ethereum - that is, as I understand it, being able to deploy smart contracts using a Turing complete language -, is pretty intriguing; but the costs associated with doing so put me off. I tried to estimate how much it'd cost to deploy a fairly small smart contract a couple days ago (admittedly when 'gas costs' were high), and it would've been several hundred dollars, perhaps even surpassing a thousand. It seems like PoS would lower that, which is good, but comes at the great cost that people who aren't already in the game won't be able to acquire Ether without basically paying cash for it. That's a weird dependence on fiat currencies for a 'decentralized ledger'. (And yeah, there might be other means, but none of them are really practical for the average person.)
If there hadn't already been cryptocurrencies, nobody would've thought PoS to be a good idea. A bunch of people who hold some digital certificates that predictably multiply themselves want people to give them money to 'acquire' those? That would've sounded like a scam to me...
[0] https://decrypt.co/31646/nearly-120000-ethereum-wallets-prim...
PoW is just as much depending on fiat currencies. You can't get electricity without paying for it, you can't get a mining rig without paying for it, etc. This is one of the more common critiques against PoS and it just doesn't hold true at all. With the decentralized finance ecosystem, you can put any supported asset to work and earn ETH or stablecoins or anything else you want and accumulate that way.
Mining at a rate necessary to get any reasonable amount of Ether is a huge investment, and is already out of reach for the average person. Setting your desktop computer to mine definitely won't pay for your small smart contract.
Thankfully with ETH 2.0 the cost of publishing data on the chain will drop dramatically (there will be ~63x increase in throughput of publishing data, not transactions) so contract creation should be cheaper.
But really if you are interested in the space it might make sense to just publish on an L2 like polygon.
There's no inherent weird dependency on cash, there's only a dependency on whatever currency people choose to pay each other for work, which currently happens to be cash.
If people started paying each other in Ethereum-based tokens, you could close the loop and cash would not be a dependency.
Do you want to be a citizen of that new government? What will they do for their citizens? Do they plan to build roads or anything else?
Seigniorage should go to the people not the capital holders.
Also, if people don't think there will be validators for each wallet with 32 coins -- which are producing Co2 -- then they are wrong. It just changes the game, not the incentives.
People motives to get into crypto are clear. They want to subtract themselves from government policy of constantly printing money. BTC takes care of that and it's a 14 years brand which is extremely politically expensive to make illegal
On the other hand people are perfectly satisfied with their experience on Youtube, Amazon, Google, Facebook, Ebay, JPMorgan etc. which are the entities which Ethereum aims to disrupt
From your lips to God's ears. If the price falls steeply there will be a glut of gpus flooding the market and I'll finally be able to build a pc.
[1]: https://www.algorand.com/resources/news/carbon_negative_anno...
[2]: https://www.algorand.com/resources/blog/silvio-micali-lex-fr...
>To achieve a carbon-negative network, Algorand and ClimateTrade will implement a sustainability oracle which will notarize Algorand’s carbon footprint on-chain for each epoch (a set amount of blocks). With its advanced smart contracts, Algorand will then lock the equivalent amount of carbon credit as an ASA (Algorand Standard Asset) into a green treasury so that its protocol keeps running as carbon-negative.
I'm pretty familiar with the basics of cryptocurrency and blockchains, but the above paragraph makes almost no sense to me.
If only a fraction of the stake holders are validators at any given time, but the set of 1000 validators is selected randomly from token holders, then all you technically need is 1000 tokens (or more) and given enough time you will be selected as the only validator, right? You can then validate a fraudulent transaction, breaking security.
Now perhaps the amount of time it would take for this to occur would be longer than the heat death of the universe if you only have 1000 tokens, but at the very least, this substantially reduces the stake required to mount such an attack below the 51% required in a PoW system, right?
It's a shame people don't understand that there's multiple aspects. Ethereum is much more decentralized, secure, have more dev mindshare, better community, tooling, and ecosystem. Let's also not forget that Algorand is powered by and centralized around team-run nodes.
This would immediately make unproductive energy use (cough POW crypto cough) a lot less profitable, without the government having to come in and set prices and regs for every little thing.
I disagree that it would have a significant impact on PoW. PoW is already one of the cleanest energy industries in the world, and it's also entirely price insensistive. PoW is going to consume billions of dollars of electricity per year at any price. An external tax of 50% would cut energy use by nearly a third, but it wouldn't do any more than that.
And I should add, PoW would be absolutely happy with such a fee in place. It really doesn't care how much electricity costs, it only cares that an attacker would also have to pay the same price.
Consider the amount of energy wasted right now and also in similar "industries".
https://bitcoinmagazine.com/business/bitcoin-uses-less-than-...
Two primary concerns, technical feasibility and political strife:
I have my extreme doubts that you can move a chain like this without causing it to collapse. As yet all we have seen out of the eth camp is more broken proof of concepts -- not a viable model for a potentially trillion dollar economy. How to you replace a jet engine mid flight? (You don't. Unless you like not safely landing).
PoS coin is worthless coin. If you want to have your expensive-to-mine gas coin be worth something, you have to make it hard to acquire. My second concern is that if they do manage to 'migrate', enough folks will ignore this and keep mining. This is a problem today with more contentious PoW hard forks.
Ultimately this behavior will lead to more chain forks, which unlike in the ETC days actually is a big deal today. Whos USDT USDC etc is the real coin? The eth1 PoW 'legacy' network, or the eth2 'pos' chain, or what about the eth1-a/eth1-b fork when the first political staking challenges come up (see all world religion schisms). PoW solves this problem. One truth, enforced by universal energy usage. Not power players arguing over interpretations of religious text.
Irrelevant. Well designed networks are pretty much isolated from whims of miners. Ethereum is one of them, Bitcoin is not. I'm speaking about 2 weeks difficulty re-targeting window vs single block window.
> It replaces it with shell games and chicanery.
Why do you perceive it like that? I would love to hear details.
Ethereum will use hybrid PoS. Where random number generation (deciding who will become next block producer) is separated from deciding who is in the pool of potential producers (anty-sybil defense). First will be decided with commit-reveal scheme unbiased with the use of VDFs, second - with PoS.
Energy use will always meet demand for coins. This is true even in USD. Bitcoin is actually more efficient than existing financial systems. Bitcoin removes all the labor and expense that goes into running ATMs, Bank buildings, tellers, and so forth. Eth also does this.
The real way to address energy use is to introduce seignorage into the system. (https://en.wikipedia.org/wiki/Seigniorage) in order to do this, you must give some of the new issuance to people who are not part of the system of validation.
Eth2 might work for awhile, and it might make people rich as people put up more and more stake in order to obtain rewards. (The block reward is effectively a risk-free rate of return). However, long term, you end up with a larger and larger percentage of the economy controlled by very few people.
Systems like this dis-incentivize the creation of real value through investment in real-world goods and services. Long term, people will opt out of this nonsense as it produce coins which are not useful in real business transactions due to the deflationary nature of the tokens.
How can you say this in good faith when BTC doesn't do the same things existing financial systems do?
I think you are wrong. Staker pays in "time-cost of money", which is proportional to the stake size and in energy cost, which is pretty much constant (few watts). Your argument implies that there will be greater amount of stakers. That would be plausible if not for 32ETH minimal stake.
But in PoS there is no mining. More and more people will stake, but will do so with a small single VM, with no GPUs or ASICS mining and using power.
So a PoS system will never ever use as much energy as BTC mining, by many many orders of magnitude.
PoW had an implicit requirement for a global supply chain of hardware and energy which (kind of) made political and geopolitical games more difficult. With PoS, doing politics no longer requires work, which could lead to geopolicical wars. For example it might be possible to achieve wide enough consensus among stakers in Western countries to punish China (for some reason), e.g. willingly losing part of their stakes to empty major Chinese wallets. The fact that this doesn't really require physical effort but only persuasion is problematic.
ETH will be a real test about whether PoS works, as the other PoS cryptos are much smaller and less intertwined in other crypto projects. Historically, oligarchies led to wars
According to Ethereum's PoS implementation, this would require more than 33% of all staked Ethereum coordinating with modified clients in order to pull off. Then, another percentage of the stake adding up to 66% would have to be complicit in the attack, rather than actively defending against it by refusing to finalize blocks.
Compare this to PoW, where only 51% of hashrate needs to be participating/complicit to censor certain transactions, the other 49% have no way of fighting back, and the only tool the community has to fork away is to change the PoW algorithm.
Because of this, I actually believe PoS is more resistant than PoW to these kinds of attacks.
That being said, PoS is very much a human centric valuation (rich peoples opinions being the value), so yes: politics and then war seem likely.
Pretty much every fiat currency has the same issues as PoS, where eventually war becomes the cheapest way to retain value.
When BTC hits 250K per coin next year, expect 5x as much energy consumption to what it does use today. At 1M per coin we can expect 20x as much power consumption.
Highly unlikely that taxation can resolve this as global economy simply forces the miners to places where energy is cheap and abundant. And countries will view this as a competitive advantage as now there is a simple way to convert power directly into money. Many cases have shown that poor countries will use their environment to gain an upper hand and pull their country out of poverty. Sadly the impact to the environment is global.
https://bitcoinmagazine.com/business/bitcoin-uses-less-than-...
Or to rephrase the question: where can I find the "POS for dummies" page?
> I do not feel I can trust the majority to be correct every minute or every day forever.
With weak subjectivity, you only have to trust them to be correct on a timeframe of every few months. If consensus is actually broken somehow over such a long period of time, there will be big headlines about it and you'll be able to configure your node accordingly.
Further reading:
https://blog.ethereum.org/2014/11/25/proof-stake-learned-lov...
VDFs used in Ethereum's hybrid PoS replicate this property to large-enough extent. In case of PoW the resource you MUST spent to replicate the chain is electric energy, lots of it. In case of VDF it's mostly time. So one can imagine launching multiple "fake" chains using stolen/bought private keys, but such chain will get banned via software upgrade immediately after detection. Very hard to pull off, impossible to pull of multiple times.
EDIT: my bad, stolen keys will get banned by the network immediately and automatically. They break "equivocation" rule.
I just wonder what the next criticism will be
However, if it does successfully transfer to proof of stake, we're in for a long and exciting ride.
Trust is a valuable commodity these days.
I don't think miners can do anything about this. In the worst case, they coordinate to stop mining on N-1 block. But this requires an amazing level of coordination, plus network can directly bribe/reward next block producer by paying to `coinbase` address (real `coinbase`, not Armstrong's coinbase).
> "The Merge" will introduce catastrophic bugs, 0-days will appear.
This is why you have testnets.
> we're in for a long and exciting ride.
Definitely!
Also, merge testnet is up already, making sure there are no significant issues.
Ethereum has been talking about PoS for a long time, so until they actually deliver we should be looking at existing decentralized PoS coins.
> Ethereum is a decentralized, open-source blockchain with smart contract functionality. Ether (ETH) is the native cryptocurrency of the platform. It is the second-largest cryptocurrency by market capitalization, after Bitcoin. Ethereum is the most actively used blockchain.
It's a blockchain whose token wasn't intended as a cryptocurrency but as a medium for paying for having a program ("smart contract") stored on it run on every node of the network. In practice this can be used for all sorts of things, including bootstrapping the vast majority of other cryptocurrencies currently in existence, but under the current system it can't process transactions effectively enough to be useful in that manner.
As I understand it Ethereum 2, which is a really long term thing they've been doing for years, is meant to gobble up the original Ethereum completely once all stages of deployment are completed (any prior forks that may happen would remain independent, I guess).
Update: it's been fixed
Which in the lights of the recent events sounds like: "pump us this time around!"
Makes you question: when would be a good time to address this, if they can't time travel to the day before Elon posted the tweet?
And I don't know the answer to that. Was this too soon? Well if they want to take the ride of Elon controversy, I don't think so. Is that a good thing? Who knows.
The market is wondering what will happen next. So ether published their progress. I just want to know how realistic are they with their schedule.
however, once the value of those tokens is established (as is true for most of the big cryptocurrencies today), there is really no compelling reason not to emulate the proof of work block lottery with a proof of stake block lottery. there is absolutely no reason why people can't lock up digital currency funds long term in exchange for share in a 10 minute lottery rather than lock up funds in hardware mining investments and associated power supplies for them.
i've been watching ethereum's progress on this with interest, and fully expect with time that bitcoin will follow.
The improved energy consumption is still a lot. For reference, a 2019 16" MacBook Pro has a 100 Wh battery. In other words, 3ish transactions would fully drain such a laptop's battery.
I realize that is the text from the article, but what they really meant is "will use at most 99% less energy". The reduction will be at least 99%. The future value will be at most 1% of the current value.
In other words if PoS is conceptually sound why don't all cryptocurrencies switch over to it?
As a payment network? Layer 2 solutions will be in production by the end of this summer which will enable payments that costs 3 cents, regardless of demand or amount transferred. Working alongside with smart contracts. Lookup zkSync 2.0 / zkPorter.
Proof of STAKE is where you dedicate your cryptocurrency and are rewarded based on that. Since owning cryptocurrency doesn't take any physical resource, the only expenditure is keeping your staking node (a computer) online so that it can participate in validation.
The part you're missing is the price. It's my secret, but I'll share it here. You can buy a Dell R12 with one of those cards and, upon receiving it, sell the components for more than the purchase price.
This does not follow. Security level is independent of miner reward value under PoS.
A lot of the debate seems to be around whether or not it's as secure or viable, or whether the existing Ethereum miners will try to stage a coup or something.
Disclaimer: I don't hold cryptocurrency and I think proof-of-work cryptocurrencies are a tragic waste.
This is true regardless of the environmental impacts of the specific energy source, and while solar and wind are decreasing in price, it is unlikely costs will drop so much to make this issue negligible.
(X) technical ( ) legislative (X) market-based ( ) vigilante
approach to solving the double-spend problem in a decentralized cryptocurrency. Your idea will not work. Here is why it won't work. (One or more of the following may apply to your particular idea, and it may have other flaws which used to vary from state to state before a bad federal law was passed.)
(X) Scammers can easily use it to defraud users
(X) Smart contracts and other legitimate cryptocurrency uses would be affected
( ) No one will be able to find the guy or collect the money
(X) It is defenseless against network-level attacks
( ) It will stop scams for two weeks and then we'll be stuck with it
( ) Users of cryptocurrencies will not put up with it
( ) Microsoft will not put up with it
(X) The police will not put up with it
(X) Requires too much cooperation from exchanges
( ) Requires immediate total cooperation from everybody at once
( ) Many cryptocurrency users cannot afford to lose business or alienate potential employers
( ) Scammers don't care about invalid addresses in their lists
(X) Anyone could anonymously destroy anyone else's career or business
(X) Replicated state machines do not scale
Specifically, your plan fails to account for
( ) Laws expressly prohibiting it
( ) Lack of centrally controlling authority for cryptocurrencies
( ) Open relays in foreign countries
( ) Ease of searching tiny alphanumeric address space of all private keys
(X) Asshats
( ) Jurisdictional problems
(X) Unpopularity of weird new taxes
(X) Public reluctance to accept weird new forms of money
(X) Huge existing software investment in PoW
(X) Huge existing software investment in composable smart contracts
(X) Susceptibility of protocols other than PoW to cheap fork creation
(X) Willingness of users to install OS patches received by email
(X) Armies of worm riddled broadband-connected Windows boxes
(X) Eternal arms race involved in all network-healing approaches
(X) Extreme profitability of scams
( ) Joe jobs and/or identity theft
(X) Technically illiterate politicians
(X) Extreme stupidity on the part of people who do business with scammers
( ) Dishonesty on the part of scammers themselves
(X) Bandwidth costs that are unaffected by client filtering
(X) Bitcoin already exists
(X) Error states that require manual intervention to fix
and the following philosophical objections may also apply:
(X) Ideas similar to yours are easy to come up with, yet none have ever been shown practical
( ) Any scheme based on opt-out is unacceptable
( ) Block headers should not be the subject of legislation
( ) Blacklists suck
( ) Whitelists suck
( ) Countermeasures should not involve wire fraud or credit card fraud
(X) Countermeasures should not involve sabotage of public networks
(X) Countermeasures must work if phased in gradually
( ) Sending transactions should be free
(X) Why should we have to trust you and your servers?
( ) Incompatiblity with open source or open source licenses
(X) Feel-good measures do nothing to solve the problem
( ) Temporary/one-time addresses are cumbersome
( ) I don't want the government reading my cryptocurrency transactions
( ) Killing them that way is not slow and painful enough
(X) The rich should not get richer
(X) Money and finance are legal constructs, and should not be replaced by undemocratic systems
Furthermore, this is what I think about you:
(X) Sorry dude, but I don't think it would work.
( ) This is a stupid idea, and you're a stupid person for suggesting it.
( ) Nice try, assh0le! I'm going to find out where you live and burn your house down!
I’m not well versed into PoS systems, but just took a look at ethereum’s explanation and it sounded reasonable, but I’m not familiar with the details and trade-offs that are being made.
Care to enlighten me what you’re referring to?
https://standardcrypto.wordpress.com/2021/03/31/the-censorsh...
ETH is competing against USD, not against BTC.
Bitcoin is competing against gold.
Different races. different goals.
Different risks.
If true, this means that every argument comparing BTC to fiat is bullshit.
Given that most arguments I see in favor of BTC compare it to fiat, this doesn’t speak well to the understanding of those who hold it.
Given that BTC’s value is predicated purely on the beliefs of those who hold it, a systematic misunderstanding like this suggests problems in store.
https://news.ycombinator.com/item?id=27194586&p=2
https://news.ycombinator.com/item?id=27194586&p=3
https://news.ycombinator.com/item?id=27194586&p=4
https://news.ycombinator.com/item?id=27194586&p=5
(Posts like this will go away once we turn off pagination.)
Ethereum has been "about to release PoS" for almost 6 years now and all of the initial critiques (By issuing X units of value, you incentivize ~<X units of energy to be expended) Summarized here: https://www.truthcoin.info/blog/pow-cheapest/
If the curious reader is interested in reading more about the scope of fraud that the ethereum protocol has fueled read the post here: https://web.archive.org/web/20201214170136if_/https://www.re...
Why link to the archive.org copy and not the original? Ethereum people got mod access to the subreddit and deleted everything pointing out the fraud.
There is a reason why most of mining is happening in China, Iran, Libya and other "poor" countries. These countries have big players in mining but not in trading/legislation (except for China).
By creating a PoW crypto, you are able to do something really cool: You can move value (energy) out of a country, without having a connection with any institution either inside or outside. This happens in a permission-less, indirect manner.
Nobody tends to mention that in PoS a hostile takeover by a majority stake can just have its staked coins 'forked' out by the community. The goal of PoS is to have actors held responsible for their actions.
In my mind this is much more powerful than PoW because surely hostile majority mining power can't simply be forked away (sure you could change the hashing algorithm but even then the attacker could just move on to a different chain with no real consequences of their actions no?).
Interested to hear what other people think.
In Ethereum only "validators" validate transactions - those with more than 32 Eth in their own wallet.
In Nano "representatives" validate transactions - but individual users vote a representative to represent them (with their wallet balance as a weighting).
The difference is that you can have 0.00001 Nano and still have a say over the network. It also removes the need for "stake pools" where lots of people lend Eth to one person to make up 32 Eth together (with the hope you will get your money back).
[1]: https://nano.org
If you’re looking for something that works now, you can take a look at the 3rd most popular cryptocurrency on Coinbase, Stellar Lumens (XLM). It sure is energy efficient.
More details here: https://www.reddit.com/r/Stellar/comments/nbqfey/since_co2_e...
Sources: *Coinbase, Stakewise
PoW -- wasteful electrical mining, only big entities can build efficient asic farms. And only in low cost of electricity spots.
PoS -- will incentive oligarchal collusion. Basically same as our current financial system.
https://www.adamsmith.org/blog/the-cantillion-effect
Ethereum is already a system where those who are closest to the money printers benefit the most. At first it was oligarchic just because of its pre-mine and air drops, but PoS just takes that to a new level. You get paid to be rich.
The reason this uses so much less energy is because it's so much closer to a centralized fiat currency. The only value implied by PoS is that some rich people are backing it... a lot like the dollar.
Vitalik and core team wake up sulked and there we go..
The transaction fees are absolutely ludicrous. I can’t imagine the dispersion is actually as high as some people seem to think it is.
Don't get me wrong, it's great that they are working on becoming more effective but the idea that we should judge new technology purely on it's environmental impact as we see these days is counterproductive to progress. Progress from 0 to 1 will always be less effective than the optimization that follows.
We should be much more focused on how to make sure that any technologies energy usage doesn't become an issue by creating clean technologies with high energy density, which are reliable, plentiful and scaleable and doesn't require backup sources.
Details at 11.
EDIT: Instead of down-voting, maybe prove me wrong?
Just search for "(Posts like this will go away once we turn off pagination.)" is you want to find other occurrences.
Just put the pagination link at the top too if you think that it is an issue instead of sticking your post to the top every time pagination is used? Or just fix the website... how expensive can it be to display 1000 comments with no images.
I'm saying the last 0.05% was too
