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Proof of work

Chris mentioned this six-month old thread on Hacker News.

I don’t sign off on his “rot in hell” sentiment in there, but that thread had plenty of messed up stuff.

For example, arcanon wrote:

If crypto increases energy demand and new energy capex that is most efficient is as green energy, then you are all wrong and crypto is good for the environment.

That’s not a great way to look at it. Remember that renewables doesn’t mean infinite, especially in terms of bandwidth. Särimner needs some time to regrow.

We want less fossil fuel burning. Greenhouse gasses going from lithosphere to atmosphere is the root cause of catastrophic anthropogenic global warming.

Spending energy on proof of work is not decreasing any fossil burning. It’s just not.

As an analogy, let’s say I want my students to get safe jobs instead of risking their lives as guillotine testers and tightrope dancers.

I take a quick glance at the jobs section and see that hmm, safe jobs seem to be paying better over the long run, if not in the short run.

So I take my students’ paychecks and burn the money in a big old firepit in the yard.

They’re like “Miss, miss, why’d you burn all that cash!” I’m like “If I waste all your money, I’ll increase your demand for money, and the new money capital expenditure that is most efficient is gonna be safer jobs” they’re not gonna go “thank you miss! That makes sense! We’ll start working those safe desk jobs right away so you can pour more of that money in the firepit!“

Instead, they’re gonna go “OMG we’re starving and we need cash right now and all our money got burninated, we are gonna go have to go work as dynamite jugglers!”

They’re not gonna go “Thank you for saving money on paper by flushing the groceries directly into the toilet.”

arcanon went on:

Not to mention that it directly couples energy and monetary value.

In a pretty messed up way. Here’s another analogy, let’s say I invent a machine where you pour in clean good drinking water and the machine utterly destroys the water and then spits out twenty-dollar bills. That would directly couple drinking water and monetary value, in an horrific way. That is what proof-of-work is doing.

knuthsat in that same thread wrote:

There is nothing wrong with proof of work. It is useful. People also use Bitcoin, Ethereum and other cryptocurrencies for useful things. Energy demands are nothing compared to other useful human activities.
Also, energy consumption for Bitcoin rarely has other externalities.
Livestock based diet is another collective human activity that wastes enormous amounts of energy, creates disastrous amounts of pollution (water, air, ocean...).
Proof of work, compared to that is really insignificant.

I argue against animal agriculture all the time. Easily the easiest way for humans to significantly cut emissions is to ditch the animal ag. It’s not gonna be enough but it’s a really big low hanging fruit. Please, eat plants.

That doesn’t make it correct to say that proof of work’s energy demands are “nothing compared to other useful human activities”. Look up the numbers before guessing. They are huge. That goes for both the direct use of power, and the mining for metal for the single-purpose, disposable electronics used to mine.

Listen, I get it. What the thinker thinks, the prover will prove and it’s difficult to change your track on this stuff. I thought crypto was awesome too, first I heard of it, having long been frustrated with the centralization of stuff like Flattr or Paypal. Also, we need the crypto to buy drugs. And, these protocols are interesting to think about.

No matter how much you like it, that doesn’t mean you can just try to wish away the environmental impact, which is legitimately huge.

The Bitcoin White Paper

Three years ago, Scott McCloud listed seven drawbacks of traditional money:

1. Prone to inflation and mismanagement

2. Increasingly not private

3. Too easy to hack

4. Splintered into 180 slow-to-transfer local currencies

5. Hard to divide into small increments

6. Plagued by growing transaction fees

7. Largely inaccessible to about two billion people

Proof-of-work cryptocurrency only points two and five out of those and are way worse on some of the others.

Cryptocurrency is very splintered, the transaction fees are pretty sick, and wow, talk about inaccessible.

Energy Use Compared to Banking

Nytpu writes in with an interesting comparison.

Yeah, it’s pretty bad. That’s not counting all the e-waste, either, which is an even bigger problem than the direct electricity use.

Energy use compared to Chrome tabs

There’s also the energy use compared to Chrome tabs argument.

I hope someone does do the math so we’ll know for sure. Those heavy JS pages needs criticism, for sure.

However, most people don’t participate in or benefit from the proof-of-work cryptocurrency pyramid scheme. Arguing for the widespread adoption of proof-of-work is like arguing for filling the streets with airplanes.

The Difficulty Variable

gerikson tells it straight.