Rolling Coal, tech-bro style
May 18, 2018 5:10 AM   Subscribe

Bitcoin’s energy footprint has more than doubled in six months, and it’s expected to double again by the end of the year, according to a new proof-of-work study by economist Alex de Vries (Eurekalert, Joule) out Wednesday. If that happens, bitcoin would be gobbling up 0.5 percent of the world’s electricity, about as much as the Netherlands.
posted by seanmpuckett (91 comments total) 26 users marked this as a favorite
 
This nonsense can't die quick enough.
posted by GallonOfAlan at 5:12 AM on May 18, 2018 [79 favorites]


Agreed GallonOfAlan! I was so over hearing about BitCoin YEARS ago! ENOUGH! The carbon foot-print for something not made of metal and keepable is stupid. Metal is real money. Paper money, Cheques, money orders and credit cards are a promise of real money. BitCoin is a waste of electricity for less than a promise. BitCoin is a humbug and a con.
posted by Katjusa Roquette at 5:19 AM on May 18, 2018 [3 favorites]


So, is this a scaling issue that applies to all blockchain applications? Or is this arising from something about Bitcoin particularly and maybe other cryptocurrencies?
posted by carter at 5:20 AM on May 18, 2018 [2 favorites]


“Coining Coal” maybe?
posted by nikaspark at 5:22 AM on May 18, 2018 [1 favorite]


Metal is real money

Why? Because we agreed that it is. It has no inherent value-making virtue inside, except that its physical characteristics make it convenient to use as a medium of exchange. The easiest way, I think, to see the failure of gold-standardish economic thinking is to consider that it limits the available economic value of all activity and production on Earth to the value of the amount of metal that happens to be mineable.
posted by thelonius at 5:24 AM on May 18, 2018 [6 favorites]


> “Coining Coal” maybe?

I'd say CoalCoin would be a good parody coin, but like all the other parody coins it'll get bum-rushed by speculators and become the thing it mocks in, oh, 8 to 12 hours.
posted by postcommunism at 5:24 AM on May 18, 2018 [16 favorites]


So, is this a scaling issue that applies to all blockchain applications? Or is this arising from something about Bitcoin particularly and maybe other cryptocurrencies?

It's somewhat inherent to all proof-of-work coins, by my understanding. Supposedly, proof-of-stake coins scale better, but I'm not sure how much better.
posted by tobascodagama at 5:25 AM on May 18, 2018 [11 favorites]


@katjusa roquette: you can change the maths in the way the proofs of work are calculated but I think the underlying principle of a blockchain is that you can’t escape spending gobs of ever-increasing amounts of energy to capture an ever more difficult to calculate proof of work. So maybe a new blockchain could level off the curve a touch but it seems to me that the nature of a blockchain is to be forever approaching exponentially hard.
posted by nikaspark at 5:29 AM on May 18, 2018 [9 favorites]


What a gross and wasteful phenomenon.
posted by Dip Flash at 5:34 AM on May 18, 2018 [10 favorites]


Ooooh I've got a good solution for this - making electric bills increase logarithmically, not geometrically.

Though that might make some of the more industrial level miners just invest in their own coal plant or whatever.
posted by thecjm at 5:35 AM on May 18, 2018 [13 favorites]


I'm genuinely curious: Does anyone know if there is there any overlap in the Venn diagram that has Bitcoin enthusiasts on one side and the Glenn Beck-buy-gold-before-the-coming-collapse crowd on the other? There seems like there should be even though it doesn't make any sense.

(Note: I did think about googling it just now, but I don't really want to go anywhere near that rabbit hole.)
posted by AlonzoMosleyFBI at 5:38 AM on May 18, 2018 [2 favorites]


The question is: how to actually kill it? What could even a harsh regime like China do to stop bitcoin mining? And what about North Korea, which undoubtedly is in on the action? They make their own damn laws. I can see no clear way to stop people doing it. Obviously it can't keep doubling forever but when will it even start to level off? When it uses as much electricity as Poland? Germany? Japan? Canada? Will China make it a capital crime? How could you prove someone isn't mining BTC when there's so much heating being done based on resistance? Install a space heater, and instead of heating a Nichrome wire, it mines BTC. What's the harm! Oh god it's so maddening.
posted by seanmpuckett at 5:39 AM on May 18, 2018 [2 favorites]


its physical characteristics make it convenient to use as a medium of exchange.

That’s a reductive view of money IMO. Physical money is but the “liquid end” of a huge system that has been created over thousands of years of failed trades and wars and colonization and collapse and represents the intent of our species to persist and at least try to get it better next time despite that god awful history we look back on. That said capital sucks and I hate it and IMO blockchains are not a step forward but a great leap backward.

Money and credit serving the purpose of an abstracted value of a trade being arranged needs to be insurable and reversible.

I can’t imagine how any sane business would use bitcoin to say, contract container ships.

It’s a fun side market gee gaw and I suppose one could use it in some esoteric hedge kind of way but blockchains do not have and will never have the ability to fully enumerate and represent all the tools and systems of negotiation, arbitration and litigation that other monies and credit and banking systems provide.
posted by nikaspark at 5:44 AM on May 18, 2018 [12 favorites]


That’s a reductive view of money IMO.

That does not make any sense to me. What is being "reduced" by simply observing that metal is malleable, doesn't decay, etc, and that these things make it good to use as a medium of exchange?
posted by thelonius at 5:54 AM on May 18, 2018 [1 favorite]


If you thought I was saying that's all there is to money, you missed my point - I was saying that value is not inhreent to the physical representation of it.
posted by thelonius at 5:55 AM on May 18, 2018 [2 favorites]


If that happens, bitcoin would be gobbling up 0.5 percent of the world’s electricity, about as much as the Netherlands.

I see that Bill Gibson has ceded the present to Charlie Stross.
posted by octobersurprise at 6:02 AM on May 18, 2018 [11 favorites]


Modernity kinda worships technology and finance, so i suppose it's not a surprise that there would be some horrid, useless spawn of the two horrors that would end up wasting so many resources and lives.

You know, the 2008 crash was pretty bad, but why not eliminate the middleman?
posted by eustatic at 6:02 AM on May 18, 2018 [13 favorites]


The question is: how to actually kill it?

by regulating energy consumption?
posted by eustatic at 6:04 AM on May 18, 2018 [9 favorites]


Someday a blockchain going to be a solution to a problem rather than just being one.
posted by Artw at 6:05 AM on May 18, 2018 [8 favorites]


The question is: how to actually kill it?

by regulating energy consumption?


I am curious as to how this hasn’t made the cost for using the stuff zoom through the roof. Unless nobody is using it and they’re all just generating and hoarding it for speculation.
posted by Artw at 6:06 AM on May 18, 2018 [1 favorite]


Every explanation I've ever heard about how bitcoin and blockchain are supposedly going to improve the lives of ordinary people makes it sound like the future is going to be a never-ending nightmare where every human interaction turns into a fractally obtuse series of microtransactions that miraculously move everyone's money into rich people's pockets in ever more efficient/invisible ways.
posted by Strange Interlude at 6:12 AM on May 18, 2018 [52 favorites]


So, is this a scaling issue that applies to all blockchain applications? Or is this arising from something about Bitcoin particularly and maybe other cryptocurrencies?


Bitcoin is a competitive block chain. Whoever calculates the hash with the correct leading zeroes first wins. Every one else who was working on that block loses and also spent all that electricity for nothing at all. Hopefully they used the heat to keep warm. There’s no inherent reason for block chains to be competitive like this except it helps decentralization which is not really as important as the libertarian buttcoiner will tell you
posted by dis_integration at 6:24 AM on May 18, 2018 [17 favorites]


you missed my point -

Indeed I did and apologies for the over explaining.
posted by nikaspark at 6:25 AM on May 18, 2018


The question is: how to actually kill it?

How about a flat rate tax applied to all transfer payments into or out of any Bitcoin Exchange?
Backed up with some heavy penalties if people try to evade the tax by moving cash through a foreign bank account without declaring it.
posted by Lanark at 6:38 AM on May 18, 2018


Will the history of Bitcoin be etched in Arctic ice for future anthropologists to study? Let's hope not.
posted by SPrintF at 6:41 AM on May 18, 2018 [10 favorites]


How about a flat rate tax applied to all transfer payments into or out of any Bitcoin Exchange?

Just tax bitcoin income. You minded a thousand bitcoins and they cost (pulling a number out of the air here) $1000 each? That's $1000000 of income for you to pay tax on.
posted by Dysk at 6:47 AM on May 18, 2018 [3 favorites]


(And yes, you might not be able to identify a bitcoin wallet holder until they interact with an exchange, but at that point you can present them with a bill for all their undeclared earnings over whatever period they were anonymous for, with interest if not a criminal charge for tax evasion via undeclared income.)
posted by Dysk at 6:48 AM on May 18, 2018


The problem with taxing income is that bitcoin is so volatile, if you mine $1000000 and the value falls to $5000 a week later what do you pay the tax bill with, equally if it doubles the next month, how can you calculate the tax fairly?
Thats why I think it needs to be at the point where the money is converted to fiat because thats when it has a known fiat value.
posted by Lanark at 6:51 AM on May 18, 2018 [1 favorite]


I keep thinking about the supposedly trustless nature of cryptocurrency transactions. It seems like the peculiar fantasy of the lonely young man sitting behind his computer screen, thinking, "I TRUST NO ONE," while swimming in so much trust - of everyone from the manufacturer of every chip on his computer to the local electrical and network operators to the neighbours who don't cut his cables and the legal system that'll catch and punish them if they do to the mathematicians who've worked out the nature of hashing - that they don't feel the trust they're swimming in.

It's getting to be an expensive solution to this psychological problem.
posted by clawsoon at 6:53 AM on May 18, 2018 [29 favorites]


Bitcoin could probably be crashed by the same thing propping it up: wash trading. You'd lose money doing it, but you could probably drop it a few hundred without much trouble.
posted by phooky at 6:57 AM on May 18, 2018


Will the history of Bitcoin be etched in Arctic ice for future anthropologists to study? Let's hope not.

It will be etched into the lack of Arctic ice.
posted by Dip Flash at 6:58 AM on May 18, 2018 [19 favorites]


Someday a blockchain going to be a solution to a problem rather than just being one.

I keep waiting for the same to be true of MongoDB, but I haven't seen it yet.

And I choose the comparison deliberately, because neither NoSQL nor blockchains offer anything important compared to what you get with a plain old relational database.
posted by tobascodagama at 7:09 AM on May 18, 2018 [6 favorites]


Honestly, I miss the days when nerds were burning fossil fuels looking for aliens instead.
posted by tobascodagama at 7:17 AM on May 18, 2018 [14 favorites]


The problem with taxing income is that bitcoin is so volatile, if you mine $1000000 and the value falls to $5000 a week later what do you pay the tax bill with

Exactly. The point is to discourage bitcoin mining, not to be fair.
posted by Dysk at 7:22 AM on May 18, 2018 [13 favorites]


The question is: how to actually kill it?

According to the researcher featured in the last thread, he says it would fail from spam, because it will need to use spam filters which will make it about as reliable as spammed email I suppose. This will cost money to do, but it could play to a strategy that shorts any coin, which is now more common among trading firms. More important is the developing category of strategic downfall, which was made inevitable by the premise of hostility to central bank money. The latter was legal proof of honest gain, enforced by the printing government, which leaves hostile cryptocoins as fair game for horizontal mining (including theft or forfeiture), by methods yet to be determined.
posted by Brian B. at 7:26 AM on May 18, 2018 [2 favorites]


Doesn't difficulty scale by the number of nodes trying to solve the hash? It's about generating one block every 10 minutes no matter how much work is going on.

The way to cut the energy is to cut the number of miners. So, how do you do that? Make the Dunning-Krugerrand worthless somehow.
posted by JoeZydeco at 7:32 AM on May 18, 2018 [1 favorite]


I suppose when governments, banks, and Mastercard decide they are tired of all this nonsense, it will end.
posted by freakazoid at 7:38 AM on May 18, 2018


If you discourage mining all that happens is the supply of new coins dries up and the price rises until it reaches the point where it pays to start mining again.
If you tax every user then you could suppress demand to the point where the value of a coin is less than the cost of electricity to mine it. The miners will then voluntarily shut themselves down.
posted by Lanark at 7:39 AM on May 18, 2018


The good news is that building new transmission and power facilities takes time. The bad news is that a non-negligible percentage of new solar installs are happening to support this bubble.

Like all investments, bitcoin is a story designed to generate optimism, which in turn builds trust and consequently builds value. So it just needs enough bad news stories to make it go away. Like the seemingly sensible designer I worked with recently who was determined to invest all his savings in cryptocurrency. He lost it all ($300K) overnight, and while he's not destitute all his financial security is gone and he's back working flat out just to stay alive.
posted by scruss at 7:45 AM on May 18, 2018 [1 favorite]


Someday a blockchain going to be a solution to a problem rather than just being one.

Also, this will be the year of Linux on the desktop.
posted by rokusan at 7:48 AM on May 18, 2018 [15 favorites]


The question is: how to actually kill it?

This is a bit like trying to convince your teenager that something isn't cool and he shouldn't be doing it.

The more you squeeze, the more attractive it'll get to him.
posted by rokusan at 7:49 AM on May 18, 2018 [3 favorites]


I suppose when governments, banks, and Mastercard decide they are tired of all this nonsense, it will end.

Cryptocoins pose no threats to any of those, so they're really not motivated to act.
posted by tobascodagama at 7:50 AM on May 18, 2018 [4 favorites]


Prison. The solution is prison.
posted by hyperbolic at 7:59 AM on May 18, 2018 [1 favorite]


If you discourage mining all that happens is the supply of new coins dries up and the price rises until it reaches the point where it pays to start mining again.

Not if the discouragement mechanism is directly tied to price, such as through a fully draconian and unreasonable tax.
posted by Dysk at 8:01 AM on May 18, 2018


I don't know about the rest of you, but I'm going all in on paperclips.
posted by grumpybear69 at 8:14 AM on May 18, 2018 [8 favorites]


This is a bit like trying to convince your teenager that something isn't cool and he shouldn't be doing it.

The more you squeeze, the more attractive it'll get to him.

rokusan

So you're saying we should pretend to like it too, thus making it instantly uncool?
posted by Sangermaine at 8:17 AM on May 18, 2018 [2 favorites]


Prison. The solution is prison.
posted by hyperbolic at 7:59 AM on May 18


Yes, 100% agree. But we re about ten years behind in our list of "these guys should be in prison for running the economy into the ground". there's a worrisome local trend where the top gritters never go to prison, and then become elected to be in charge of the largest armies.
posted by eustatic at 8:35 AM on May 18, 2018 [4 favorites]


Facebook has a head of blockchain now, in case you needed help deciding if either of those things were evil.
posted by Artw at 8:42 AM on May 18, 2018 [4 favorites]


But guys, guys, Bitcoin has amazing utility. It's capable of processing nearly 10 transactions a second around the whole world!
posted by Nelson at 9:01 AM on May 18, 2018 [14 favorites]


If you discourage mining all that happens is the supply of new coins dries up and the price rises until it reaches the point where it pays to start mining again.

The number of miners does not affect the price of bitcoin, ie conversion rate out to other currency (although the price of bitcoin can serve to attract new miners). The number of miners affect how difficult it is to process one transaction. Bitcoin is designed so that the percentage of total computing power in the network to process a transaction remains the same. As more miners join the network, the difficulty to process a transaction increases.

It's a trap. As each individual miner adds more power to the network, they themselves do see an increase in their yield. But all other miners' yields will decrease slightly. And so in turn other miners add more power, chasing higher returns. It's decentralized, but also an arms race that has no end.
posted by pingu at 9:13 AM on May 18, 2018 [3 favorites]


pingu: It's a trap. As each individual miner adds more power to the network, they themselves do see an increase in their yield. But all other miners' yields will decrease slightly. And so in turn other miners add more power, chasing higher returns. It's decentralized, but also an arms race that has no end.

Tragedy of the Commons as a design goal.
posted by clawsoon at 9:16 AM on May 18, 2018 [13 favorites]


I would love to see some 1 meter resolution infrared satellite shots of North Korea around their power generating stations. I would not be at all surprised to see dozens if not hundreds of long blue-roofed sheds emitting truly outrageous amounts of heat.
posted by seanmpuckett at 9:31 AM on May 18, 2018


It has no inherent value-making virtue inside

Sure it does...you can make useful, durable tools out of it, stuff like swords & plowshares.
posted by littlejohnnyjewel at 9:32 AM on May 18, 2018 [2 favorites]


What could even a harsh regime like China do to stop bitcoin mining?

They don't need to stop the mining; they need to stop the drain on real-world resources. So tax those. Increased costs for electricity use beyond what a family needs (and be generous with that estimate--assume a family is 10; don't push extra bills on high-needs families); let tiny businesses have cheap rates but big ones pay lots more.

Stop offloading/ignoring the externalities: make them pay for the environmental costs of waste equipment. Pay for pollution and heat thrown into the environment. Start taxing for hoarding equipment: buying one motherboard or video card is standard price; buying 50 at a time gets a 10% tax; buying 1000 at a time gets a 50% tax. (Numbers pulled out of air; adjust for industry needs and other features.)

Gov't collects taxes and uses them to fund infrastructure: roads, bridges, schools--or maybe gov't just buys computer equipment and distributes it to low-income families who are being squeezed by the increased cost of computer parts since mega-corporations are snapping them up.

It's not hard to curtail this kind of pointless over-production of vaporware products: you just have to get a government to recognize that they are damaging the community and throw restrictions on the parts of their actions that cause harm: Energy drain, pollution, strip-mining of resources. Ignore what they say they're doing ("mining bitcoin") and focus on what's actually causing harm.

Tell 'em "you can mine all the bitcoin you want... as long as you're not producing more than X amount of waste heat in this county."
posted by ErisLordFreedom at 9:40 AM on May 18, 2018 [10 favorites]


Couldn't governments just do 51% attacks and then inject all sorts of nonsense into the various blockchains if they wanted to?
posted by clawsoon at 9:42 AM on May 18, 2018


All those gigawatts of power to run a system that can only process a few transactions per second and has terrible latency. Bitcoin should be banned.
posted by w0mbat at 9:45 AM on May 18, 2018 [5 favorites]


Couldn't governments just do 51% attacks and then inject all sorts of nonsense into the various blockchains if they wanted to?

Yes. Satoshi addresses this in his whitepaper. He argues that any actor with sufficient resources to do this would probably find it more lucrative to just mine cooperatively and reap the standard rewards. I'm not sure I buy that, I could imagine a case where a single transaction has a high enough strategic value (for someone) that disrupting it would outweigh the benefits of standard mining.

In a way, in his argument lies one of the main misconceptions about bitcoin. Bitcoin is often touted by proponents as being a more democratic system. But in fact it's almost exactly the opposite. It's explicitly controlled by whoever has the most computing power -- the owners of capital.

We may see a world where a sizable portion of the world's economic activity is done on some form of decentralized proof-of-work banking system. I hope not. Because I don't think it will be hundreds of millions of independent miners holding hands singing kumbaya. Instead it will be controlled by several large corporations with massive server farms (they might even have names like "Citibank" or "Google"). It won't be any different than it is now. Except that it will be a lot slower and use a lot more electricity.
posted by pingu at 10:01 AM on May 18, 2018 [9 favorites]



Someday a blockchain going to be a solution to a problem rather than just being one.

here's hoping.

My take on it (in fifteen words or less), certainly in the context of bitcoin etc, is that it's a rather desperate effort to impose scarcity onto a post-scarcity age. So you could say, it's a wonderful solution if you're driven by the need to keep capitalism comfortably in the 19th Century.
posted by philip-random at 10:01 AM on May 18, 2018 [7 favorites]


Presumably "Satashoi Nakamoto" didn't intend to unloose an energy hungry monster that would create huge amounts of pollution. But clearly they werne't thinking things through when they released Bitcoin into the world. Fairy typical of libertarian techbros in general really.

I'm not at all sure what can be done about the mining. As long as Bitcoin remains incredibly overpriced (though, of course, no one is actually spending it on anything, most Bitcoin is simply hoarded) people will still consider it worthwhile to blow huge quantities of electricity mining the stuff.

carter So, is this a scaling issue that applies to all blockchain applications? Or is this arising from something about Bitcoin particularly and maybe other cryptocurrencies?

Blockchain and bitcoin are different beasties entirely.

The reason for the bitcoin energy craziness is that Bitcoin was explicitly designed to require ever more processing power to produce. The theory was that this would make it a deflationary currency. There's only 21 million valid Bitcoin codes in the mathematical space defined by the Bitcoin algorithm. Once all 21 million valid codes have been found that's it. So the race is to find a new valid Bitcoin code before anyone else does, and due to the way the thing was structured it costs more and more computing power every time a new code is found.

It would be equally possible to produce a cryptocurrency with no significant computing power to produce. Presumably if governments ever get into the cryptocurrency game that would be how they'd do it. The value would come from the fact that the coin is signed with the government's private key, rather than the difficulty in "mining" the coin.

Blockchain is an open, decentralized, method of recordkeeping. Basically you make all transactions public and when you spend blockchain currency you do so by announcing to everyone that you, user 123 has just transferred .5 bitcoin to user 456. The energy cost of blockchain applications is negligible.
posted by sotonohito at 10:03 AM on May 18, 2018 [5 favorites]


So it seems like people are mad at bitcoin for drawing people into an unsustainable speculative investment bubble. I get that. And it seems that bitcoin computations are using an immense amount of energy. But is it the case that:

- this energy would otherwise be diverted to something more beneficial?
- bitcoin is raising energy prices due to its consumption?
- this is resulting in carbon emissions that would not be happening otherwise?

What seems to be happening in a lot of these bitcoin resource discussions is that people take an estimate of what bitcoin is consuming of X and then divide it by the total national or world production of X. Is that actually how this works, or are there some logical leaps here?

For instance, are bitcoin farms located near existing power plants where energy prices are low and no one else is using up that energy anyways? If so, that would erode the argument about bitcoin's social harm. But I'm interested in hearing others' perspectives on these issues, which are ones that I don't know that much about.
posted by Noisy Pink Bubbles at 10:08 AM on May 18, 2018 [2 favorites]


For instance, are bitcoin farms located near existing power plants where energy prices are low and no one else is using up that energy anyways?

Power plants generally don't have a fixed output, they scale supply to match demand. There are some exceptions, but it isn't generally the case that power otherwise gets 'wasted' if capacity goes unused.
posted by Dysk at 10:15 AM on May 18, 2018 [10 favorites]


So yes, it's resulting in carbon emissions that would otherwise not exist. Even using the "free" renewable energy in a lot of places just means there's less being exported to neighbouring countries/energy markets who are then burning more coal or gas as a result.
posted by Dysk at 10:17 AM on May 18, 2018 [9 favorites]


Noisy Pink Bubbles,

One example:

Bitcoin Mining Triggers Backlash From Electric Utilities

tl;dr Bitcoins miners are flocking to rural areas with low power costs, then gobbling up huge amounts of power output (e.g., the article cites an application by a server farm in Chelan County, Washington for up to 100 megawatts of electric power service). This serves to threaten to overwhelm the local electricity grid's capacity and drive up prices for actual residential use.
posted by Sangermaine at 10:18 AM on May 18, 2018 [16 favorites]


But is it the case that:

- this energy would otherwise be diverted to something more beneficial?
- bitcoin is raising energy prices due to its consumption?
- this is resulting in carbon emissions that would not be happening otherwise?

Yes. Yes. Yes.
posted by Homeboy Trouble at 10:57 AM on May 18, 2018 [10 favorites]


Couldn't governments just do 51% attacks and then inject all sorts of nonsense into the various blockchains if they wanted to?

As with the "why don't governments ban this?" question, the real answer is "why bother?" Controlling the blockchain in that way doesn't get you much.

It doesn't de-anonymize any transactions, for instance, which would be the primary motivation for a government in trying to seize control of the blockchain. (I.e., to prosecute criminals using Bitcoin to conduct illegal transactions.) Furthermore, as hard as it is to get useful currency out of Bitcoin right now, it'd be even harder to do so if people suspected that some state actor had managed to gain 51% control, so it's not like you could drain everybody's wallets and turn a profit.

Anything else a government might want to use Bitcoin for (supplying funds undercover cops/intelligence operatives... maybe?) doesn't require 51% control to accomplish.

In that respect, I think that "Satoshi", as paraphrased by pingu, is correct. Bitcoin just isn't worth attacking in that manner.
posted by tobascodagama at 11:12 AM on May 18, 2018 [2 favorites]


Years ago, one of my brothers started a company that took payment in bitcoin. He wanted me to help him test his system, so I got a little bitcoin (it was only tens of dollars at the time), signed up at his website, and promptly forgot about it.

And then just recently, another brother was visiting and we were mutually grousing about sky-high GPU prices interfering with building good ol' fashioned gaming rigs. Then he remembered. "Hey Jpfed, a few years ago he just gave me some coin to test out his site. You helped him test the site, too, right? If we had even a little more coin than we spent on testing, it could be worth something now." We promptly dropped everything and searched every hard drive on every computer looking for forgotten wallets.

And I found mine! The wallet was indeed empty. I was not going to be a thousandaire, not that day.
posted by Jpfed at 12:33 PM on May 18, 2018 [3 favorites]


One problem with Bitcoin is that it doesn't scale. There's just not enough compute capacity to handle the volume of transactions necessary to replace credit cards. If a cryptocurrency is found that can accomplish this, bitcoin will die.

I think it would be nice if a cryptocoin could be created that would actually accomplish useful work - protein-folding-coin, seti-coin, train-my-neural-network-coin. Whether that's possible I don't know - not using blockchain tech as I understand it, but maybe someone will come up with something.
posted by Ansible at 1:04 PM on May 18, 2018 [2 favorites]


Forget Proof of Work and blockchain as currency for a moment.

Something that a public distributed ledger would be good for is, oh, disappearing government financial documents. Or public funding records for PACs.

Blockchain ledgers can provide theoretically immutable and unerasable public records, and with no where near the scaling and power required for the current difficulty levels and competitive mining for any of the bitcoin variations.

This tech is already changing the world in strange ways and it's not all about e-gold mining and pyramid schemes.
posted by loquacious at 1:12 PM on May 18, 2018 [3 favorites]


I think it would be nice if a cryptocoin could be created that would actually accomplish useful work - protein-folding-coin, seti-coin, train-my-neural-network-coin.

I think that sort of exists and is indeed potentially way less stupid/destructive than bitcoin, although I don't know much about it.
posted by busted_crayons at 1:13 PM on May 18, 2018


In the distant future, archaeologists will look upon the corroded ruins of a massive bitcoin farm with the same furrowed antipathy we have for the internecine warfare and overpopulation of the Classic Mayan Collapse
posted by CynicalKnight at 1:19 PM on May 18, 2018 [3 favorites]


Something that a public distributed ledger would be good for is, oh, disappearing government financial documents. Or public funding records for PACs.

Blockchain ledgers can provide theoretically immutable and unerasable public records,


the negative (ie: malevolent) applications of this strike me as rather horrifying.
posted by philip-random at 1:36 PM on May 18, 2018 [3 favorites]


For instance, are bitcoin farms located near existing power plants where energy prices are low and no one else is using up that energy anyways?

cf. This is What Happens When Bitcoin Miners Take Over Your Town
posted by mwhybark at 1:43 PM on May 18, 2018


Just tax bitcoin income. You minded a thousand bitcoins and they cost (pulling a number out of the air here) $1000 each? That's $1000000 of income for you to pay tax on.

You could just tax them in bitcoins. You mine 1000? Pay the government 400.

Although I'd rather the government stay out of nonsense currencies.
posted by graventy at 1:50 PM on May 18, 2018


Blockchain ledgers can provide theoretically immutable and unerasable public records

So can digitally signing that data and keeping backups of it.

Or older-technology equivalents--like filing away copies somewhere safe.

I'm not seeing the magic.
posted by floppyroofing at 1:50 PM on May 18, 2018 [9 favorites]


Literally my experience when anyone talks about applying blockchain to anything as a solution.

Last one was to revolutionize academic papers by replacing citations somehow? Why not just use footnotes?
posted by Artw at 1:53 PM on May 18, 2018 [5 favorites]


Ooooh I've got a good solution for this - making electric bills increase logarithmically, not geometrically.

Though that might make some of the more industrial level miners just invest in their own coal plant or whatever.
"Whatever" is more likely to be botnets.
posted by Nerd of the North at 1:54 PM on May 18, 2018 [5 favorites]


I think it's something of a category error to call Bitcoin a currency. For all that it makes a show of being a currency, it isn't. Not really.

It's a commodity, like gold. In fact, I'd argue, exactly like gold. Or at least the dream of gold held by a lot of the metal backed currency fanatics. There's only so much of it (exactly 21 million Bitcoins can ever exist). It's infinitely (well, for practical purposes anyway) divisible. It's intended to be deflationary so that the value of BTC will always go up.

And the way people treat BTC in practice is exactly the way people treat gold. They buy it, hoard it in hopes of the value increasing, and occasionally, if circumstances force them to, sell a bit for money to buy something with.

Bitcoin isn't money, it's a commodity.

And it's a damn volatile commodity. Gold is volatile too, but BTC seems to be even moreso. The big Bitcoin traders do volume deals that leave the little traders wondering where their money went, and occasionally they do something that disrupts the market so much the value of Bitcoin plummets.

I'll also note that like most other forms of commodity trading and investing, BTC attracts a number of suckers who imagine that they have found a way to get rich quick. There was a person on one of the subreddits who had an interesting, and plausible, story. No way to know if it was true, but his claim was that he'd inherited money that he was supposed to split with his sister once she turned 18, he'd decided to "invest" the money by day trading in BTC, and had lost almost all of it and was asking for advice on how to best use the remainder to really get rich quick in Bitcoin.

You don't do that with money, but you do with a commodity.

Bitcoin is not a currency.
posted by sotonohito at 2:16 PM on May 18, 2018 [12 favorites]


I think it would be nice if a cryptocoin could be created that would actually accomplish useful work - protein-folding-coin, seti-coin, train-my-neural-network-coin. Whether that's possible I don't know - not using blockchain tech as I understand it, but maybe someone will come up with something.

This absolutely could be built into a blockchain system as the proof of work, but the problem for bitcoin fanatics is that it would require a third party. You'd calculate the protein-folding simulation or whatever, submit it to some verified third party that had a private key, and they'd give you a signed hash of some kind that would be added to the blockchain and would give you the block reward. The idea with proof of work is that the calculation is hard, but the verification is easy. But with something like protein-folding or i dunno cancer-drug-generating the verification is not reflexive, only an authority can verify that it happened. The thing that gets people so excited about the blockchain as it is now is that the blockchain itself is the authority since the "work" you're doing is just calculating a hash of the blockchain.

But it turns out that having a centralized authority is a pretty useful thing for a lot of reasons, which is why we keep creating them in human societies. For example, if I hacked your system, installed a keylogger, stole your bitcoin wallet and passphrase, and transferred all your BTC to myself, the blockchain would happily certify this transaction in an irreversible way. And how else could it be? There's no 3rd party authority with the ability to reverse a transaction, and I'm certainly not going to authorize the retransfer of the coins.
posted by dis_integration at 2:18 PM on May 18, 2018 [6 favorites]


Indeed I did and apologies for the over explaining.

Thanks nikaspark, and I'm sorry I kind of got defensive
posted by thelonius at 2:28 PM on May 18, 2018 [1 favorite]


(Here's a protein-folding coin.)
posted by Jpfed at 2:31 PM on May 18, 2018 [2 favorites]


This is pretty wrong headed though.
They're not making *more* electricity to satisfy Bitcoin demand. Bitcoin isn't taking away electricity that would have been stored and used for other things. Miners are specifically locating to places where there's a surplus of electricity being generated which is cheap and using it.
posted by Damienmce at 3:01 PM on May 18, 2018


They're not making *more* electricity to satisfy Bitcoin demand. Bitcoin isn't taking away electricity that would have been stored and used for other things. Miners are specifically locating to places where there's a surplus of electricity being generated which is cheap and using it.

There's links upthread that show this isn't true.
posted by thegears at 3:04 PM on May 18, 2018 [5 favorites]


You know, the speaker in the last cryptocurrency FPP said that he could destroy BitCoin with about a million dollars. Perhaps someone could do a kickstarter and fund him. I mean, there are probably enough disgruntled gamers out there who would come out ahead if they put in $50 of their video card upgrade funds.

(Yes, I realize that Etherium is the big driver for GPU prices, but I fully expect the end of BitCoin to at the very least drive down the prices of the other Dunning-Krugerrands as well.)
posted by suetanvil at 3:20 PM on May 18, 2018 [3 favorites]


blockchain needs to decide on being libertarian or socialist. It can't be both at the same time.
posted by nikaspark at 3:24 PM on May 18, 2018 [2 favorites]


The idea with proof of work is that the calculation is hard, but the verification is easy. But with something like protein-folding or i dunno cancer-drug-generating the verification is not reflexive, only an authority can verify that it happened.

Actually I don't think this is necessarily true. My understanding is that protein-folding falls exactly into this category of problem: finding the solution is hard, but checking it is easy.

It seems to me that the absurd energy usage devoted to Bitcoin mining is a symptom of a deeper problem, and addressing that problem directly is the better solution. The deeper problem is that the costs of fossil fuel usage are extremely heavily subsidized, primarily through the usage of the atmosphere as a free dumping ground for waste carbon. Large-scale Bitcoin mining is profitable because the miners don't pay the full cost of their electricity generation, which should include carbon capture or other expensive steps to eliminate all waste carbon emissions into the atmosphere. They also don't pay the full cost of their impact on local electrical grids. If some Bitcoin mining operation was able to support itself entirely on off-the-grid solar power and still be profitable, well, I'm not sure I really see a problem with that.

Solve the fundamental problem by internalizing the currently external costs of fossil fuel usage. I believe this is best done by targeting the point of production: oil drilling, coal mining, and natural gas extraction operations that are taking high-energy-state carbon that was buried millions of years ago and reintroducing it into carbon cycle. If the true per-ton cost of re-burying CO2 were to be imposed on anyone extracting fossil fuel carbon from the ground, the price of electricity would reflect its true cost. If this price turns out to be unacceptably high for certain uses we believe to be critical, such as heating homes, then provide subsidies for those uses to make them affordable. Then people can heat their homes in the winter, but Bitcoin miners can only mine Bitcoin if they can still turn a profit after paying their electricity bill.
posted by biogeo at 6:27 PM on May 18, 2018 [4 favorites]


thelonius: "Why? Because we agreed that it is. It has no inherent value-making virtue inside, except that its physical characteristics make it convenient to use as a medium of exchange"

I think there is a difference between a metal having value mostly for speculative purposes and a metal having value related to cost of extraction. IE: Gold vs Aluminum.

Currently around 3% of world wide electrical usage is put towards aluminum production. Bitcoin Miners could increase supply ~15% instead which would have an actual benefit to humanity.
posted by Mitheral at 8:15 PM on May 18, 2018


I like sotonohito's commodity explanation. Nothing is going to kill cryptocurrency. I think the limiting factor is sunlight, though. What's the actual likely time-averaged return on investment, once you factor in cost of production, risk of fraud, theft, etc.? It seems more like an insurance actuarial problem than a banking one.

It probably turns out that just like commodity trading, it is possible to make money. It is probably not going to be you that makes money. If you do make money, the amount of effort is more like a job than a get-rich-quick scheme, considering the loss/win balance (also like being a professional gambler in this sense.)

It's going to be as hard to stamp out as the lottery. Best bet is to figure out how to make it cost what it's consuming in resources, and I don't know how to do that without killing legitimate users of energy. I mean, should Amazon AWS data farms have to pay the same punitive energy rates as bitcoin miners?
posted by ctmf at 11:13 AM on May 19, 2018


Install a space heater, and instead of heating a Nichrome wire, it mines BTC. What's the harm!

Eventually all the 1s and 0s bouncing around an ASIC end up as waste heat, no? So there is no difference in efficiency, all other things being equal. You might as well use it as a heater, maybe grow some, errr, produce. In a perfect world, repurposing old/obsolete miners as heat sources would be a less-bad application of the tech (of course, this is not a perfect world otherwise this would be commonplace)
posted by RobotVoodooPower at 5:43 PM on May 19, 2018 [1 favorite]


It's pretty hilarious, no? Like, all these electric water heaters. What if these millions of 4kw or 6kw heating elements were calculating something. (Something useful, not bitcoin garbage.) Protein folding or whatever. It's just ... kind of intriguing.
posted by seanmpuckett at 7:26 PM on May 19, 2018


seanmpuckett: Like, all these electric water heaters. What if these millions of 4kw or 6kw heating elements were calculating something.

Given security practises for the typical Internet of Things device, I'd predict that no matter what they were original set up to calculate they'll soon be either sending out spam or hashing cryptocurrencies.
posted by clawsoon at 5:35 AM on May 20, 2018 [3 favorites]




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