Cryptocoins: who pays the huge energy?

[iNow]

1 hour ago, dimreepr said:

Who pays, is a very good question...

As I noted in my first response, the owners of the hardware pay the electricity bills, and everyone else pays the externalities.  

[martillo]

58 minutes ago, iNow said:

As I noted in my first response, the owners of the hardware pay the electricity bills, and everyone else pays the externalities.  

But they would have a return for their investment. I think dimreepr wonders now who at the end pays it all.

2 hours ago, dimreepr said:

Who pays, is a very good question...

I think the questions then would be: who is really interested in make bussiness with a cryptocoin? And: who would really buy it and deal with it?

 

Edited May 16, 2021 by martillo

[iNow]

7 hours ago, martillo said:

I think dimreepr wonders now who at the end pays it all

Correct, and that’s precisely why I mentioned externalities. 

7 hours ago, martillo said:

who is really interested in make bussiness with a cryptocoin? And: who would really buy it and deal with it?

People who are comfortable with volatility / have a higher risk tolerance and who see a higher potential for gain than loss by investing. 

[martillo]

3 hours ago, iNow said:

People who are comfortable with volatility / have a higher risk tolerance and who see a higher potential for gain than loss by investing. 

But who could be interested in buying selling things and services with such unstable money? The original aim of having virtual money for some virtual community is lost. It would have no or little value at the end. So bubble...

Edited May 17, 2021 by martillo

[iNow]

6 minutes ago, martillo said:

But who could be interested in buying selling things and services with such unstable money?

The same people who invest in stocks. Or go to Vegas / Macau … or who have enough money to burn to venture into these new financial spaces. See also: NFTs

6 minutes ago, martillo said:

The original aim of having virtual money for some virtual community is lost.

Please clarify what you think was the original aim of virtual money. I’m not at all following your point. 

Edited May 17, 2021 by iNow

[martillo]

39 minutes ago, iNow said:

The same people who invest in stocks. Or go to Vegas / Macau … or who have enough money to burn to venture into these new financial spaces. 

That is the answer.

Unfortunately may be, or may be not. May be the huge consumption of energy is just temporary and all the bubble ends in some more stable thing afterall. 

 

 

Who knows...

Edited May 17, 2021 by martillo

[wtf]

4 hours ago, martillo said:

That is the answer.

Unfortunately may be, or may be not. May be the huge consumption of energy is just temporary and all the bubble ends in some more stable thing afterall. 

 

No that's not possible. All proof-of-work based cryptocurrencies rely on the enormous expenditure of computational energy to verify the transactions. If verifying blocks is cheap, the protocol doesn't work. There are some efforts to mitigate the problem, such as green crypto mining. But one argument for the eventual failure of bitcoin is that it's out of spirit with the age. Bitcoin wastes energy extravagantly; and we live in the age of conservation.

Not endorsing this service, just a link I googled randomly to illustrate that people are thinking about the issue.

https://www.perpetualindustries.com/gem-cryptomining.html

Another alternative is proof-of-stake, which is more energy efficient than proof-of-work.

https://www.investopedia.com/terms/p/proof-stake-pos.asp

Edited May 17, 2021 by wtf

[swansont]

6 hours ago, wtf said:

If verifying blocks is cheap, the protocol doesn't work.

Why? What, specifically doesn't work? The cost of electricity should have no impact on the computational protocol.

[martillo]

This was very right then:

On 5/15/2021 at 2:03 PM, StringJunky said:

It's far too volatile to be a currency as well. It's a game for gamblers and crooks to wash their money.

 

7 hours ago, wtf said:

No that's not possible.

I was thinking in:

On 5/15/2021 at 11:14 PM, iNow said:

Technically, Bitcoin could still be used without miners, but it would also mean no more bitcoins would ever be created.

And somewhere else I saw bitcoins are near to reach their minting limit so seems sooner or later the huge mining and associated consumption of energy will have an end afterall.

Without mining the cryptocoin will become more stable, less speculative and more common people would be inclined to deal with it, 

I mean as virtual money in some more common virtual community...

Edited May 17, 2021 by martillo

[John Cuthber]

13 hours ago, martillo said:

But who could be interested in buying selling things and services with such unstable money?

They probably said that about paper money.

On 5/16/2021 at 3:14 AM, iNow said:

Technically, Bitcoin could still be used without miners, but it would also mean no more bitcoins would ever be created.

That is Plan A.

 

[martillo]

24 minutes ago, John Cuthber said:

They probably said that about paper money.

Coincidentally I was just thinking on the problems of  mixing paper money with virtual money...

I mean, some virtual community could be thought with people virtually earning virtual money someway but if that virtual money could be bought by real paper money things change...

That's a different thing, I know. Bitcoin is not intended to remain virtually only. It pretend to be real money but digital. The problem is that it is not achieving the goal nowadays due the problems we are discussing about.

Edited May 17, 2021 by martillo

[iNow]

1 hour ago, martillo said:

Without mining the cryptocoin will become more stable, less speculative and more common people would be inclined to deal with it, 

This suggests the volatility results from the practice of mining. That doesn’t seem correct. 

[Ghideon]

2 hours ago, swansont said:

Why? What, specifically doesn't work? The cost of electricity should have no impact on the computational protocol.

I think @wtf means proof of work in this case. Proof of work* requires that a certain amount of computational effort has been expended for some purpose. Verifiers can subsequently confirm this expenditure with minimal effort on their part. It's a way to deter denial-of-service attacks and other service abuses by requiring some work from a service requester, usually meaning processing time by a computer.

Very simplified it is a protection against a Sybil attack where the reputation system (bitcoin in this case) is subverted by creating multiple identities. If this will work in the long run for Bitcoin or other related block chain based applications I do not know.

*) Text is based on https://en.wikipedia.org/wiki/Proof_of_work
**) Paper: https://link.springer.com/chapter/10.1007%2F978-0-387-35568-9_18

Edited May 17, 2021 by Ghideon
reference

[martillo]

20 minutes ago, iNow said:

This suggests the volatility results from the practice of mining. That doesn’t seem correct. 

Elon Musk stated Tesla will not deal with bitcoin because of its energy consumption what is directly related to the mining of the cryptocoin. May be energy consumption is not the unique phenomenon contributing to volatility. Which other ones would you mention?

Edited May 17, 2021 by martillo

[iNow]

Volatility comes mostly from demand… as in supply and demand. It’s unrelated to energy consumption or mining in any direct sense. 

[martillo]

30 minutes ago, iNow said:

Volatility comes mostly from demand… as in supply and demand. It’s unrelated to energy consumption or mining in any direct sense. 

Elon Musk recently invested in bitcoin causing its rise and after stated Tesla will not deal with bitcoin because of its energy consumption causing drop. Isn't this volatility due to its current energy consumption?

Demand is strongly afeected by energy consumption nowadays.

Edited May 17, 2021 by martillo

[iNow]

1 hour ago, martillo said:

Elon Musk recently invested in bitcoin causing its rise and after stated Tesla will not deal with bitcoin because of its energy consumption causing drop. Isn't this volatility due to its current energy consumption?

No. It's volatility due to public statements by people and companies with significant holdings. For all we know, their public statement about energy consumption being their reason was a lie. How does this require explanation?

1 hour ago, martillo said:

Demand is strongly afeected by energy consumption nowadays.

I call bullshit. Feel free to back this up with a valid source. For now, I believe the source is your rectum. 

[martillo]

1 hour ago, iNow said:

I call bullshit. Feel free to back this up with a valid source. For now, I believe the source is your rectum. 

Impressive language, let me say. I suppose you are let to use it in the forum.

Do you mean you don't know that energy consumption affect the demand of many things in the market nowadays? Obvious things don't need to be backed up. 

If Elon Musk lied he did it with a well founded justification.

Edited May 17, 2021 by martillo

[wtf]

5 hours ago, swansont said:

Why? What, specifically doesn't work? The cost of electricity should have no impact on the computational protocol.

 

3 hours ago, Ghideon said:

I think @wtf means proof of work in this case. Proof of work* requires that a certain amount of computational effort has been expended for some purpose. Verifiers can subsequently confirm this expenditure with minimal effort on their part. It's a way to deter denial-of-service attacks and other service abuses by requiring some work from a service requester, usually meaning processing time by a computer.

Thanks much. This is the answer to swanstont's question. If (in the extreme case, to illustrate the point) it takes no energy to verify a block, a bad actor can just verify false blocks at will and steal everyone's money.

[iNow]

15 minutes ago, martillo said:

Do you mean you don't know that energy consumption affect the demand of many things in the market nowadays? Obvious things don't need to be backed up. 

Perhaps if you said the sky is blue, you wouldn’t be required to back it up. Instead, you said “demand is very much affected by energy consumption.” That’s NOT obvious, so yes. It needs to be backed up. 

You made a claim. That claim has been challenged. You can support it, refine it, or retract it. Those are your options, but the onus is on you to do at least one. 

[martillo]

15 minutes ago, iNow said:

Perhaps if you said the sky is blue, you wouldn’t be required to back it up. Instead, you said “demand is very much affected by energy consumption.” That’s NOT obvious, so yes. It needs to be backed up. 

It is well known by everybody that the demand of many things are affected by its energy consumption. Any vehicle, cars, planes, ships. You have it also in home appliances like heaters, refrigerators, air-conditioners, etc. This does not require back up.

Edited May 17, 2021 by martillo

[iNow]

8 minutes ago, martillo said:

It is well known by everybody that the demand of many things are affected by its energy consumption. Any vehicle, cars, planes, ships. You have it also in home appliances like heaters, refrigerators, air-conditioners, etc. This does not require back up.

Bitcoin does not continue to require energy payments from the buyer once it’s been purchased.

It’s not an appliance. It’s not a vehicle. You don’t have to put gasoline into the tank to make it work once you have it. What a ridiculous comparison you’re making. 

Would you like to try again, or simply do the mature thing and retract or refine your claim?

[martillo]

When I said:

4 hours ago, martillo said:

Demand is strongly afeected by energy consumption nowadays.

it was with general applicability. It can be applied to anything spending too much energy I think.

Now, if you ask for back up it while applied specifically to bitcoin I don't have it. It is a conclusion of mine as consequence of Elon Musk comment and the conversation we are all having in this thread.

What I don't understand is the mess you are doing with such a simple thing. Please, take it easy. Does not worth to get angry with this.

The main aim of the thread is to discuss about who pays the huge energy caused by Bitcoin. Hope not everybody us.

 

Your talk about shit remembered something still remaining to answer to deemreepr:

On 5/15/2021 at 11:01 AM, dimreepr said:

If you're hungry enough; you will eat my shit...

On 5/15/2021 at 11:05 AM, martillo said:

Sure not. Surelly I would prefer dying...

On 5/15/2021 at 11:07 AM, dimreepr said:

I'm guessing you've never been hungry enough... 😉

It is known from survivors stories that different people take different decisions even at the same situation. In some very strange situations people take rare decisions. Someones prefer to do something, others prefer to just stay waiting for rescue and others prefer to not survive... 

Here in my country we have such a story. The Andes mountains tragedy. A film was made about it, "Alive".

 

Edited May 17, 2021 by martillo

[iNow]

1 hour ago, martillo said:

The main aim of the thread is to discuss about who pays the huge energy caused by Bitcoin.

The people using the electricity pay for it. The rest of us suffer externalities from their actions.

If you clarify where you’re confused about this, we can try to address that. 

1 hour ago, martillo said:

it was with general applicability. It can be applied to anything spending too much energy I think.

Now, if you ask for back up it while applied specifically to bitcoin I don't have it.

In other words, your comment was completely irrelevant to what we’ve been here discussing. Got it. 

[martillo]

4 minutes ago, iNow said:

If you clarify where you’re confused about this, we can try to address that. 

All my doubts were already clarified in this thread, thanks.