mondoveneziano

I was explaining in layman's terms.

> required to use powerful and energy-hungry GPUs to solve a complex mathematical problem.

No mathematical problem is getting "solved".

It is much more akin to playing the lottery: Entirely random numbers are being tried out, by sending them through an energy-intensive algorithm (being energy-intensive is the algorithm's only purpose in proof-of-work), until what comes out is less than another number. That other number is chosen according to the desired "difficulty", it has no significance beyond that.

The algorithm is literally meant to spend energy, i.e. the outcome of the computation has no meaning by itself. This also means that proof-of-work cryptocurrencies actively counteract any advances to make the computation more efficient: The "difficulty" will just be adjusted up until the efficiency gain is canceled out. Proof-of-work cryptocurrencies are inefficient by design.

The statement you quoted is true, regardless of your assertion. As for addressing your assertion by itself:

Energy storage and distribution networks constantly strive to minimize unstorable excess energy. Even under the assumption that that will not happen sufficiently, or, less hypothetically, by only taking into account the currently achieved levels: What you propose cannot be enforced. By design.

Bitcoin is decentralized, and everyone with an Internet connection and energy available can participate. That includes anybody with an even mediocre Internet connection and access to precious resources that can be converted into a single Bitcoin block and a massive amount of heat, for personally enriching transaction fees and a block reward in return. One of Bitcoin's very core principles makes gapless regulation unlikely, if not impossible.

What is your proposal for guaranteeing that only non-storable, non-transmissible excess energy is used for Bitcoin, other than individual goodwill?

All energy and computing resources used on mining Bitcoin are spent and cannot be used for anything else. The concept of "backing" means that resources are available, and the entity backing them merely represents them. Stock is backed by the services and products a company provides. Fiat currency is backed by their respective part of the world economy. Resources are not depleted by backing those.

Saying Bitcoin is "backed" by the world's energy and computing resources is like saying that a wildfire is "backed" by a state's forestry reserves.

LUNA is trading at below $0.00001, that is below 1/1000th of a cent right now. For many, getting rid of it may be much harder than just ignoring it. A few weeks ago the price people were willing to pay for it hovered around $100.

I say "the price people were willing to pay" instead of "value", because now that nobody wants to speculate with LUNA, it did fall down to its intrinsic value: Practically zero. Nobody needs it for anything besides buying and selling it from and to other people, which is not happening anymore.

Cryptocurrency is gambling, plain and simple. The difficulty that fiat currency faces is inflation, which roughly means diluting the economy that backs it too much. The difficulty with cryptocurrency is that there is nothing of worth backing it. Factor in the horrifying externalities, and its worth is negative.

For Bitcoin, the most popular one, on the order of 100.000.000.000.000.000.000 of hashes get calculated to mine a single block, multiple trillion per second. Within ten minutes, only a single one of those 100.000.000.000.000.000.000 hashes is actually used, depending entirely on luck. The rest are thrown away entirely. They do not form part of the final hash or anything else, the energy spent on them is lost.

Understanding cryptography and smart contracts, what if the increasingly complicated smart contracts you describe have bugs?

> For example you could make a master key that overrides all others but requires an unlock Tx followed by an arbitrary escrow delay where funds are locked.

At what point is switching to a more classical database both worth the increase in efficiency by several orders of magnitude, and the decreased reliance on bug-free code?

git does not have a distributed consensus algorithm, however, and does not rely on proof-of-work/space/stake. Whether a rewrite of history is accepted is up to every consumer of any repository individually.

These are all plausible arguments for associating real estate ownership with a database. What are the arguments for this database being maintained by a blockchain?

If you do not trust the authorities of the locality, e.g. the courts, to properly assign ownership and, more importantly, to defend your claim of ownership through further legal action, then how do you trust the blockchain implementation with its share of elected people and override mechanisms to do the same?

> Yes, it's not ideal that someone can override the ownership [...] Yes, allowing ownership overriding isn't ideal, but I don't think allowing a group to override ownership in a transparent way completely negates all benefits [...]

The assertion already is that mutability and reversibility are necessary and desired properties under the assumption that mistakes and mis-assessments happen, whether through human error or technological failure. The question is, what benefit does a blockchain bring over a regular database under this requirement?

> Ethereum will be moving to proof of stake in a year or 2 (> $10B are locked up until this occurs, so I am very confident it will happen).

I know proof-of-work down to the very detail, I have not yet looked at proof-of-stake. If proof-of-stake exists, and does not share the same problem of massive inefficiency (directly or indirectly), then I still think that a classical database solves these problems more easily, but I cease to care what solutions stakeholders choose. Proof-of-work, on the other hand, makes me and everyone else an unwilling participant in this scheme through unnecessary, and growing, consumption of energy and resources.

If the company in your example can be contacted to overturn ownership, essentially degenerating the immutability and irreversibility of the ledger to levels comparable of existing solutions, then what is the actual advantage of this not only inefficient, but inefficient by design method of bookkeeping?

I find it hard to reconcile "99.9% of transfers very cheap" with the property that at least proof-of-work and proof-of-space actively rely on literally counteracting any effort at becoming more efficient.

"Classical" distributed ledgers in databases are not already more efficient by several orders of magnitude, they are made more efficient through advancements of technology, and those efficiency gains are actively sought out by participants, given that they usually directly translate into profit through reduction of overhead.

Let's ignore space, where currently the highly elevated risk is well known to the few participants. If we could undo car and plane crashes, we would do it. We cannot, and my question is whether we want to force the same property on accidents that we currently can safely undo.

Another example: Let's assume ownership of a house is defined by a blockchain. Through a mistake, ownership of your house has been transferred to someone else, or lost to an address with no existing private key. Alternatively, you were in the process of buying a house when the same happened.

Would you be happy with the outcome of this simple mistake being irreversible?

If not, and if you think litigation should retransfer ownership to you, what is the value of an immutable ledger, if the house went to a malicious party who does not intend to perform the transfer on said ledger, or to an address without private key, making transfer not possible in the first place?

> The actual last thing in the world home users want is an authentication system where credential loss is literally irrevocable.

This is generally a concern I have about blockchain technology. What if it succeeds in its goal to play a major role in some sector, and something immensely important becomes attached to it.

Mistakes happen. Both by humans and by computers. Software having bugs, hardware failing, bits randomly changing in RAM, are all obvious and commonplace. Mitigations exist (ECC, signatures...), but never along the whole chain. For example, BTC addresses might have checksums, but if the wrong row in a database deciding the address is selected in the first place, through human, software, or hardware error, that will not matter.

Do we want to attach extremely important things to a system that is by design irreversible?

I have looked into proof-of-work in meticulous detail, I have not looked into proof-of-stake. If proof-of-stake exists and eschews the problems I have stated, then what I said here about the problems it creates does not apply anymore.

I have many other doubts against the usefulness and sensibility of blockchains in general, e.g. I have doubts how smart contracts actually succeed to reach their goals in a reality where humans make mistakes and courts are used to settle disputes and ambiguities. But these concerns then only affect the viability of technologies that I and others are not forced to participate in.

Proof-of-work on the other hand, as long as it continues to exist, affects everyone in that in incentivizes burning resources directly for money without regulation, no matter how dirty or wasteful.

The Internet provided solutions to technical problems, regardless of any societal/political considerations. They may have resulted, but as a secondary effect.

When theorizing about societal/political benefits, take into account the societal/political problems cryptocurrencies created by inventing a machine that allows converting resources directly into money of miners' digital wallets without regulation.

Your sending any amount of money, actual practicality and realizability aside, comes at the cost of a lottery, where miners perform literally 100.000.000.000.000.000.000 computations per second whose outcome is completely thrown away, unless they are lucky enough to be one of the 6 computations per hour that win. This cannot be made more efficient: If computing one hash costs less energy, the difficulty will be adjusted to require more calculations to keep the target of 6 hashes per hour.

By the decentralized property of cryptocurrencies, it is by design not possible to regulate where the energy for this lottery is coming from.

In the case of the Internet, people were doing either new things, or existing things more efficiently (e.g. sending emails vs. postal mail and fax, or transferring files vs. swapping disk media or printouts). As the Internet progressed, efficiency increased.

In the case of cryptocurrencies, people are doing existing things that can already be done quickly and efficiently vastly less efficiently, in a system that is purposely designed to be less efficient, where efficiency is in fact actively counteracted. Databases and online money transactions were possible before, at a fraction of the total cost inherent to the system and at vastly higher performance.