Topic: Why didn't satoshi use PoW for something else? (Read 669 times)

What Buffet, Roubini, and all these guys are looking at, is centralized payment and money transfer services that work, securely, immediately, for thousands of times as many transactions, for drastically smaller expense than the cost of PoW.

"decentralization" and "peer to peer" are not things that add value from their perspective.  They see Bitcoin as an inefficient slow service that does what other services can do, in a way that's drastically more expensive and doesn't work as well.

Most of the people on this earth who are aware of the name bitcoin feel like it is a ponzi/pyramid scheme and it is similar to stocks. They most probably never even understand the technology behind what governs and secure the btc network and why it can be used as a very secure decentralized payment system around the world. People like Warren Buffet often says he never thought that Internet would grow as a world wide phenomenon and Giants like Amazon and Google would grow such huge occupying a percentage of world economy. The fact is that they don't literally understand what happens in the backend or they don't have the age to understand them.

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Being old isn't the only thing that most of them don't understand what btc is and think of it as a get rich quick scheme. Almost 75% of the third world population aren't really of btc/cryptocurrency and when they come to know of them, it takes time for them to completely understand the underlying Tech and to use them in real world.

Btc is a currency mostly for tech based and nerd people and for a futuristic well developed world which came out in existence a little early.

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The mining industry does generate some huge heat and if it used effectively on a larger scale they can be converted into some form of useful energy as depicted above by you.
It is to be noted that,

[1] Co2 emitted by the crypto mining industry is equivalent to around 60 million tonnes per year whereas the Co2 emitted by banks and fiat currency minting is equivalent to 370 million tonnes.

[2] Energy consumed by the Crypto mining industry is 4 million Giga Joules per year whereas Banks and Banking Systems cumulatively use an average of 2000 million Giga Joules per year.

These factors are enough to prove that Btc can overrule the fiat and can be used as a world wide currency run by the people and not by some centralized government organisations.

Try to explain someone like Warren Buffet, Roubini or all these guys how the massive ASIC hashrate isn't a big waste. They simply cannot fathom that it's part of what makes Bitcoin valuable (the fact that is backed by all that power which makes it the safest decentralized network in earth)

A lot of people will simply never get it, they are too old I guess.

Im not sure about transforming the heat generated by the ASICs into something else. I have not seen anything done in this field other than anecdotal stuff like this:

https://motherboard.vice.com/en_us/article/9k8ykp/heating-water-with-bitcoin-mining-asic-reddit

What exactly do they mean by wastage of energy? Energy is wasted only when nothing is gained from them. Generated Energy from Solar, Wind, Water and other renewable means is used in the form of providing entertainment and to fulfill our basic needs. You pay for the electricity you use and it is being used in some form or the other. Renewable resources are always replaced and would never likely end. On an average, it would cost around $3000 - $5000 to mine one bitcoin. If the miner sell them, they would get a profit of around 1.5x - 2x they have spent in the form of electricity and at the current trading price of 1 Btc.

The energy consumed by the ASIC's are used for generating money and for securing the decentralized payment system all around the world. Miners doesn't waste the energy rather they use these energy to generate money. Wasting is something which is used carelessly or for no purpose to anyone.

When mining is being done, the ASIC's generate a lot of heat. This heat energy can be re-used and can be converted into an energy. Intense Heat Generated form these ASIC's can be used for many practical applications. I have even read somewhere in the past that, Denmark and Germany paid it's citizens to use their electricity as they were high on renewable electricity production.

PoS and other energy efficient mining process apart from PoW are created to reduce the usage of energy in the process of mining the blocks. This would make the miners take little to no efforts in mining apart from staking coins. Mining a #1000 block and #100000 block will literally have the same difficulty. Some algorithms similar to PoS will favour old miners and whales rather than a miner having the potential and equipment to mine the block. This also makes some to stop trading and use their coins for staking to earn profits.

No. What would be more useful than solving the "Byzantine General's problem"? Satoshi knew he had a ground-breaking answer to the problem that past cryptographers, mathematicians, and computer scientists tried to solve.

Is donating CPU cycles in BOINC more secure than Bitcoins's POW? I believe "making mining it more useful" would be the very last thing Satoshi had in mind.


There was Primecoin.

Because it's kinda like trying to utilize the heat of your CPU to brew some coffee - you are adding new complexity and risks to the system that are simply not worth the benefit. SHA256 mining is secure and easy to reason about, other systems, especially those like boinc and folding are not. Devs are working very hard to keep Bitcoin free from bugs and attacks, and introducing some novel consensus algorithm would be against that.

OP Satoshi had a ground-breaking "distributed timestamp server implementation on a peer to peer basis" in mind, not to help donating CPU cycles.

Plus if we are talking about "wasting electricity", Bitcoin gives us the freedom to transact, the freedom to use or not to use intermediaries, the freedom to keep your wealth in a sovereign manner without coercion. I believe freedom must come at a cost, no?

Right. If you don't understand that Bitcoin just being Bitcoin is a useful result of mining, then you have stuff to learn about.

Bitcoin's PoW is easy to reason about, which makes it easier to analyze it from game-theoretic point of view. "Useful" calculations add a big amount of complexity and often require some sort of centralization. This makes them unsuitable for being used in consensus algorithms for big networks like Bitcoin, where security requirements are very tight.

This question is very common, so you can find a lot of information about it if you do some digging:

https://bitcoin.stackexchange.com/questions/20879/why-cant-we-design-a-bitcoin-that-does-useful-work

https://bitcoin.stackexchange.com/questions/331/is-there-a-way-to-set-up-proof-of-work-systems-so-they-would-be-even-more-useful

http://www.truthcoin.info/blog/pow-cheapest/

Right. Is using Bitcoin useful? If you agree, then mining a Bitcoin is useful. If it's useful, and uses resources (all useful things do), then you can put a price on it. It just so happens to put a price on itself, and pretty efficiently too.

If you don't understand Bitcoin's usefulness, you're not likely to appreciate how or why the network functions. If you've got criticisms, but don't understand what it's for or why it works the way it does, it's difficult to know how to help the person who feels that way.



Climate change is real, but energy use doesn't affect climate change significantly, there's no evidence for it.



That's thoroughly idiotic.

The energy consumed to mine a block is only used to create new BTC supply, it has nothing to do with the transactions in the block. A miner uses the same amount of energy irrespective of how many transactions they include in the block. A block with 0 transactions uses the same amount of electricity as a block with 3000 transactions.

To put it another way: if energy used = amount of transactions, why is it that the more energy the Bitcoin miners use, that the maximum amount of transactions stays exactly the same? There is no relationship between transactions and energy, that's why

Climate change is very real and we need to cut our energy use wherever we can.  Bitcoin is still old technology, I'm sure new cryptos will be created in the future that are more secure and use up less energy.

No, definitely not.

The energy is not 'wasted'. It is needed to secure the whole network.

I don't understand why people think it wastes 'too much energy'. It is just a small small fraction of what the banking sector needs.

Also, how should the network be secured if the energy wouldn't be 'wasted' to secure it ?

Sure, we could easily shrink the energy consumption / hashrate to 1/10th of the current. But this would also mean that the network is 10 times less secured against an attacker.
And this also means that 10 confirmations then are worth as much as 1 confirmation is worth now..

I suspect he did. He predicted industrial level operations handling the jobs nodes do which I presume by extension would extend to mining - https://bitcointalksearch.org/topic/m.6306

But I doubt if him or anyone else could've predicted how rapidly mining would develop into the beast it has become.

The energy = security thing makes sense until you calculate how much energy one transaction consumes at which point it becomes gross however you want to frame it. Yup, banking probably uses more. It also serves tens or hundreds or thousands of times more people, businesses and transactions.

Once there's a ton of users that becomes increasingly moot but for now it's not a good look IMO.

I think there is a consensus that maintaining the Bitcoin network is wasting too much energy, and such criticism comes often from people who don't have a hidden agenda and are well-disposed towards Bitcoin.

I once heard Andreas Antonopoulos saying that PoW is like staking energy.

PoW is like betting energy that this block has valid transactions. So PoW, the way designed by satoshi, would work like a staking of energy, which is something that has value in the world, outside the blockchain.

Satoshi didn't think bitcoin mining would take up this much power.  He probably expected it to be more of a home mining thing instead of being on an industrial level.

either way we need to get serious about limiting energy usage because the Earth is in imminent danger because of climate change! We don't have much time left before humanity is doomed.

The energy used in PoW must be "wasted".

Because of the difficulty adjustment and the economic incentives, the equilibrium cost of PoW approaches the value of the block reward. Even if the result of PoW is useful, then the cost of the "wasted" PoW will still approach the value of the block reward. So, nothing is accomplished by making the PoW generate something useful.

Let me demonstrate by example:

Suppose a hash rate of 1 exahash per block costs 1 BTC in energy costs and earns 1 BTC per block on average. In this case, 1 BTC worth of energy is "wasted".

Now suppose that a use for hashes is found and 1 exahash can be sold for 0.5 BTC. We can now say that only 0.5 BTC worth of energy is "wasted". Not so fast. Mining costs 1 BTC per block, but now earns 1.5 BTC so miners will certainly increase their capacity in order to make more money.

In this scenario, miners will double their hash rate on average. Note that the difficulty will also double because the total hash rate has doubled.

Now, 2 exahash per block costs 2 BTC, but it earns 1 BTC per block plus the hashes sell for 1 BTC. As you can see, we are back where we started where 1 BTC worth of energy is "wasted", even though mining also generates something with value.

In case you were wondering, the case where hashes initially sell for more than the value of the block reward also gives the same results, assuming a normal demand curve.

Yes. The only thing keeping Bitcoin together are properly aligned incentives.
As seen in the covert asicboost scandal, the smallest misalignment can wreck chaos.

Such claims are always made by people with hidden agendas or no knowledge at all.

The whole bitcoin network is using a 'huge' amount of energy, yes. But it covers world wide money transfers.
The banking sector does consume WAY more energy. And the money is WAY less secured.

The security behind bitcoins PoW is the key element. And this argument can't be beaten.

What I mean is, something similar to what these guys are doing in Foldincoin, Gridcoin, etc:

https://www.foldingcoin.net/
https://gridcoin.us/
http://www.trnicely.net/dense/dense1.html

There are many critics of Bitcoin that argue how "Bitcoin's PoW wastes too much energy". I can easily refute that by pointing to how it secures your bitcoins being safe. However, what if we also had hashes being solved that were relevant in other contexts (see examples provided). We could make multiple points of the hashrate usage.

Did satoshi avoid this in purpose to avoid possible game theoretical incentive problems so he made it strict bitcoin without side use cases?