Bitcoin's energy usage isn't a concern. My dude needs to go deeper down the rabbit hole.
Discussion
Is there a demonstrable ROI on mining…I don’t go down holes, but I do smoke out little bunnies…
Well, in so far as the energy use of video games is a concern? He is talking to the radical left that thinks people should be eating raw vegetables out of their garden and solar panels are magically created by Harry Potter.
Agreed. Bitcoin mining produces 0 emissions, just like electric cars, TVs and any other computer. We should not be even entertaining the framing that energy usage is bad, it’s not. Humans thrive when there is abundant and cheap energy.
Honest question from a non-crypto guy… "Sure, the sky isn't falling or anything, but wouldn't it be better if Bitcoin were proof-of-stake?" I mean is there any real advantage to PoW?
No. PoW is the only way to tie Bitcoin to real world value. Fiat is basically proof of stake. Those who have the most get more & set the rules. PoW demands constant competition for rewards & will actually directly drive advancements in energy production to the benefit of everyone.
Sorry - I don't really get your point… The value of ETH hasn't exactly collapsed since going PoS. In the real world how much work you put into something doesn't determine it's value. Perceived value is real value.
When ETH was created Vitalik & friends issued themselves 70% of the supply. There were very quickly miners competing to collect the mining reward & they had interests somewhat separate from those of Vitalik & friends. So whenever they wanted to make a code change they had to get miners on board or consider how miners might respond. It was still centralized enough that it wasn't a great check on power, but it was something.
The switch to proof of stake was just Vitalik & co stealing the mining reward for themselves & removing an obstacle to doing whatever they want with the code.
Having a system where people just get paid via monetary inflation for having money is naturally centralizing. There is no merit based competition that keeps people having to earn the position of collecting the block reward. And the largest holders can collectively decide that the code is whatever they want it to be. They can double the money supply tomorrow into their own wallets. And they won't allow average users to stake without handing their ETH over to a custodian.
PoS is a snake eating it's own tail. There's no grounding, it what it is because the people who have all the money say it is & they get more money because they have money.
Bitcoin rewards people who feed it energy most efficiently. It is fairly easy for the average person to run a full node (ETH calls these archival nodes) which will not allow anyone to change the monetary policy. Anyone with a computer can reject code changes in Bitcoin. No staking or mining or majority share of Bitcoin supply needed. Anyone can compete in the mining game, no massive % of the supply needed or minimum stake limit involved. You can literally mine with a $70 jade hardware wallet if you want.
Thanks for your answer. Among other things it seems to explain bitcoiners’ seemingly strange (to me) obsession with inflation. Your competitor is run by a system where there is reward for inflation, so it’s something you folks are acutely aware of).
It also gives me insight into why you guys think seem to think fiat is a Ponzi scheme, when I’ve always felt people pushing crypto as an investment had an Ponzi-like aspect to their argument. (I’m 110% in on crypto for commerce- it’s the investment angle I’m seriously skeptical of). That gives me additional points to think about…
If you need & have to work for something that others can create in unlimited amounts for free, you are a slave.
Arbitrary inflation is monetary debasement & indistinguishable from perfect counterfeiting. Counterfeiting is illegal because it's theft. Issuing new stock isn't allowed, only stock splits, because changing the supply by issuing more is theft from current stock holders.
Governments have been stealing from people this way for a long time because most people don't understand money at all. But we are a trading species. We are like fish in water & money is our economic ocean. When the water becomes polluted the fish get sick & don't know enough to understsnd why. When money is corrupt society becomes sick. The culture rot all around us is as much a monetary problem as anything.
Bitcoin is very similar to gold. China and Russia may like to buy up all the gold, but there is only so much in existence. They have to stack bars for the long game, and are doing so. Meanwhile the west think a big STICK mentality will keep them on top. Those days are numbered, and when they figure out their doom, they are suddenly going to want to buy up gold, and guess what... people stacking it are not going to give it up without a fight. The difference is that bitcoin is easier to carry than gold.
I have a few friends that are bigs fans and highly invested in other crypto stuff, and I tried to explain to them that all they managed to do is recreate what we already have. But it always fell on deaf ears. I gave up on trying to do this.
It's also a signal for me that I don't know enough to be convincing, so back to studying.
thank you for asking. it sounds like it would be, right? less energy usage, yay! however, that's not the case. the simple answer is that anyone with money can then make the rules by staking their funds. it's recreating all of the problems that we currently have with the financial system. and remember, just because something uses energy doesn't mean it's bad. bitcoin mining in the USA uses less energy than electric washers and refrigerators. we aren't going back to washboards and ice blocks any time soon.
Ah… I think you might have given the first solid answer!
So PoS requires fiat investment? So it favors rich people? Am I understanding you correctly?
Well, you need to obtain the capability to stake somehow, you need to token.
What does “need to token” mean? (You’re talking a foreign language to me).
If you want to participate in Proof of Stake, you have to stake the token that you own. So, this would be buying the token, ETH for example, and then staking it, which essentially means locking it up so you can't use it.
POW is the soul of ₿itcoin.
Here’s the thing, anyone can switch ₿itcoin to POS today. The code is open source. That would create a hard fork. It happens all the time. That’s where alt coins come from. You could even call it Fedcoin, if you want to.
But I won’t join it. And neither will any bitcoiner that understands what they hold.
So switching from POW to POS is a mute point. We’ve already won.
Dude fedcoin would be the ultimate meme coin 😂
Thanks. When eco-conscious people say BTC is horrible because of PoW - that’s the answer… “you don’t have to have wealthy to do PoW, but you need to be for PoS.” We “big city liberals” will understand that. It’s something we can tell our friends that sounds reasonable. And then follow up with “BTC uses less energy than video games”.
Actually… since mining rigs cost money, the financial cost may not be the best argument for PoW.
How long does PoS tie up funds?
What everyone else said. Plus this idea: we actually can do without electric clothes driers. An air drying system uses much less electricity. But it is worse for other reasons including that it costs people via time, which we care more about. Many believe that the current system including similar systems like proof of stake create big enough costs that the energy cost is well worth it.
Plus, when you dive into exactly which electricity Bitcoin uses, it becomes clear that not all electricity is the same, and bitcoin is better than anything else at using specifically the least desirable electricity. Kinda fun that that property helps a little to incentivize people to build renewable electricity generation.
Can you explain what costs PoS has they PoW doesn’t have? I honestly want to understand the downside (other than the fact that my friend’s ETH mining rig is now useless).
Here’s a good start from this thread
nostr:note1gmy5vyyy53macsd2prws8xdr5whm9jfmadds8hp5feazsuaf2n9qr6czmj
A ton has been written on the topic though. But starting here, do these ideas make sense?
To summarize, a cost is security of the blockchain
ETH says PoS is more secure, but you’re saying there’s a cost to that? Interesting…
How is it more secure though? Anyone with a lot of money can have a large stake in the network.
It might be a difference in security time frames. I think bitcoin is more secure in the short and long term. Eth PoS may temporarily win out in some medium term.
And the node situation is part of the Eth Bitcoin security comparison
So many advantages. Proof of stake is like someone handing you a photo of a house when you buy it. Proof of work is someone handing you keys and letting you walk around inside.
Sorry. I don’t follow… Are you saying ETH stopped functioning when they went PoS? That they could only “look at a picture of” their ETH?
PoW gives bitcoin an unforgeable cost. This means that for bitcoins to be created an earned by miners they have to spend electricity. So there is a real cost to create and earn bitcoin that cannot be faked. Current currencies don't have a cost, they can be created at the press of a button from thin air. Gold also has a cost, it has to be mined, work, time, machines, can't be created from nothing. Now POS to create you need 32 eth that can be faked, if you can print money from nothing you can buy 32 with no cost. For Bitcoin you can also buy with money but we are talking about the production, you can buy bitcoin miners with fake money but you still need to spend electricity, a lot of it. Same with gold you still have to put the work. So to mine bitcoin or gold you have to keep putting real energy/work, for POS you buy 32 eth and it's done, you keep earning without any work. This bitcoin and gold costs also forces the miners to sell to pay for operarion costs, that makes bitcoin more distributed among everyone. In POS you don't have costs so you don't have to sell, so the richer get richer and power concentrates in the rich, in POS the interest is paid by the users, so users get less eth and nodes get more without the need to sell.
If you’ve ever spent a lot of time doing something only to have it dismissed you’ll see the flaw in your argument
I'm not saying that just putting work/energy into something makes it valuable. Bitcoin and gold are valuable for many other reasons, I'm referring to money as this are important properties. To have an unforgeable cost is just one of them. In POS the cost is zero.
A celebrity’s signature has value with pretty much zero work. Just sayin’…
What about the work required to become a celebrity that their signature is worth something?
If that were the case we’d want the signatures of the single mom with kids working two jobs to pay the bills.
Just like how not all miners are rewarded with the block reward for work done.
Difficult to abstract the work done by a celebrity and a mother as an analogy for PoW. Not really a great example as the work done is not the same.
Sure. Even though we can say that a celebrity put some work that is recognized by others as valuable, so in the same regard my signature is worthless, the same as a fake signature. Either way you point is correct, air also has an infinite ammout of value and its free. Again I'm not saying energy/work equals high value. For money you have to have a known set of good properties. Diamonds also require a lot of work, but they are not good as money, it lacks other properties. PoW/energy is just one, it anchors bitcoin to the real physical world.
I hear a lot of folks here saying the value of fiat is fake. But “the good faith and credit” of the US is the same (more, actually) as what a celebrity does to earn fame. Yet people dis the Fed, which is a huge part of our financial stability. And I’m always shocked at the people who are OK with the US going into default over a political squabble.
I have no card on US politics, I am an EU citizen. A default of US or a any collapse of the usd or any other currency is bad for the lives of many. The problem is that the faith and credit of the issuers, Fed, ECB etc is broken due to bad decisions and/or corruption namely by debasing the currency because they can. Also the current model of constant inflation is broken like Jeff Booth explains. This is what bitcoin fixes. It changes the economic model and removes the need to thrust the issuer.
Inflation is a relatively new thing in the US and caused by fate playing the wildcard of a global pandemic. It will pass.
(And yes I’m old enough to remember the inflation in the ‘70s. I’m talking more recent history.)
Inflation is a constant part of the system. The target each year is 2% and that is the official data, which in real terms is usually higher. So over the years, and with banks not paying interest on deposits people lose the ability to save over long term. So they have to invest to keep up. This is only the beginning, US and Europe will become increasingly unstable and with sticky inflation and higher inflation spikes cycles. US and EU will have the same problems as other nations, like Argentina, they are just lagging in years. Inflation is here to stay, how do you think the major debt to gdp will be paid? They will print their way out. Check Jeff Booth recent interview in "What bitcoin did" podcast on YouTube to understand how the system is unsustainable.
That's a hilariously ignorant point of view!
Interesting word salad
No that celebrity typically did a lot of work to make their signature valuable. AND if they make lots if them, their value will drop significantly... so terrible for a money
Tying Bitcoin’s security to real world energy expenditure is what makes it robust and decentralized. PoS is an inherently insecure and fragile system. Governments can co-opt or shut down PoS chains quite easily. Not to mention they run on perverse incentives where the largest holders get to determine what transactions are valid and reward themselves with more coins. PoS or likely works well for scaling layers but base layer needs to be preserved as PoW.
Sounds like a good answer. 👍 Thanks.
One step at a time... Haha
lol I thought the exact same thing . He’s at least looking in the right direction and there is potential he sees BTC energy usage for what it really is . Kinda a lot to expect him to be a politician and knowledgeable on why BTC energy usage is a net good that isn’t using too much energy . Maybe one day he realizes Bitcoin isn’t using enough energy 🤞