A hard look at the wastefulness of "proof of work," the idea at the core of the blockchain

#1

Originally published at: https://boingboing.net/2018/05/23/externalities-and-bubbles.html

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#2

If only the SETI@Home, Folding@Home and similar projects had a predictable cadence for discovery, this would be useful work with which to back a cryptocurrency with. (Actually, have they discovered anything yet?)

ETA: Looks like Folding@Home has produced some useful results.

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#3

So it’s really… proof-of-wasted-work?

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#4

Doing anything useful with all that computing power would be a big step forward. Generating hashes with a certain number of zeros is asinine.

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#5

What if Bitcoin is a scam to generate the world’s largest password cracking machine for the CIA? That’d be useful work.

And terrifying.

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#6

If you were able to create such a thing you would also be able to essentially steal all the bitcoin out there.

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#7

This is the great thing about this conspiracy theory: the government doesn’t care about a paltry 129 billion dollars.

But being able to bust anyone’s password on demand is worth that much at least.

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#8

But really, what is Bitcoin?

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#9

Not to be too pedantic, but proof of work is not at all central to blockchain. It (or a close relative) is central to most if not all of the fully distributed cryptocurencies. It is a form of consensus algorithm, and there are also fiat, or cabal based consensus algorithms that don’t have the wasted power/work problems. (But they do kinda have the whole central bank problem.)

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#10

That is: proof-of-work is the only way yet found to do the Bitcoin trick. And if people want to spend money cabon emissions on it, not only is that their business and nobody else’s, but it is therefore not a waste.

It is my personal business if anyone wants to wreck the habitability of this planet.

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#11

If people find that worth paying for, the electricity has not been wasted.

It’s cute that they think economic theories of value will solve climate change…

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#12

oh wow.
and I had totally bought into “But what about the entire financial system and everyone in it?”
and he crushed that idea

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#13

The only judgment about whether this electricity has gone to waste or not lies with the consumer who pays for it.

In SoCal a while back during the more extreme drought that happened, I remember someone in Rancho Cucomonga or somewhere where there’s giant homes with sprawling lawns in the middle of the desert. The guy liked having his lawn green and, as far as he could tell, he had paid for that damned water so he was going use that damned water and, to him, it wasn’t wasteful at all. Further, that lawn, to him, represented a significant amount of value for his home.

That same argument could have been made for electricity and btc.

I don’t think consumers are the ones to trust as to whether or not something was wasteful.

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#14

Folding@home is already working with CureCoin, an Etherium-based “proof-of-useful-work” smart-contract cryptocurrency. I personally love the vision and team surrounding Render Token, which crunches CGI render jobs in exchange for Etherium. Golem promises to cover both cases, and more.

This technology already exists, in multitudes of reasonably mature coins. No one cares. If the kinds of people who invest have the choice between a higher expectation of return or a vehicle that might do the slightest bit of good (or merely less measurable ecological harm), they’re going to choose the former pretty consistently.

I’d say the cryptocurrencies of 3018 would be based around common sense and useful work, but the fact that such existing coins have gotten zero traction in 2018 suggests the species won’t be in a position to be mining digital currencies a thousand years from now.

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#15

He anticipated, but did not sufficiently counter the Lightning Network argument.

The usual excuse at this point is to say that the Lightning Network — a new low-overhead payment network being built on top of Bitcoin — will fix it all, and give us thousands of transactions for each watt-hour spent mining bitcoins.

But the Lightning Network can run on top of lots of cryptocurrencies — e.g., there’s already a Litecoin version. It doesn’t rely on its underlying cryptocurrency being Bitcoin, or even a proof-of-work coin. You could run the Lightning Network on top of a dollar-substitute token […]

Sure, lightning network is coin-agnostic, but it doesn’t change the need for blockchain immutability. In fact, the immutability of the underlying blockchain is the only reason lightning network can work. So it would make sense that one might still have a preference for the “most immutable” blockchain, even if one could use lightning network on top of it.

The up side of lightning network is that it allows the number of transactions to scale (and then scale some more). If it works (the technical stuff seems sound, but this is an if), then the math about Visa vs Bitcoin cost/transaction becomes a lot more favorable. Because while it’s definitely clear that the current bitcoin cost/transaction isn’t favorable, if bitcoin was doing exponentially more transactions on the same proof-of-work costs, I could see that beating Visa.

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#16

In general I find myself divided about these blockchain takedowns. While the operation of mega-blockchains like bitcoin are ludicrous, imaginary, and wasteful, they’re not any more so than the rest of global capitalism. The whole fucking economy is an absurd pyramid scheme designed to waste as much energy as possible just so that some value can be exchanged here and there, and some undeserving but randomly lucky assholes can be enriched.

So when it seems like people are singling out bitcoin as some weird aberration, as though it’s so much more crazy than the rest of our economy, I find myself siding with the bitcoin people (ugghh). In fact, bitcoin is exactly as reasonable as the rest of global capitalism, just on a smaller scale. If you accept our global economy, you should also accept bitcoin. And if you don’t accept global capitalism, then why are you trying to write a half-informed critique of the technical details of a blockchain? Why not talk about the economy itself? You know, the actual problem?

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#17

The difference is that modern finance evolved and Bitcoin was designed, so the problems of Bitcoin should have been easier to predict and be easier to solve. If we can’t even handle the easy stuff, what makes you think we can handle the hard stuff?

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#18

hence the interest in other ‘proof of’ blockchain algos that don’t consume a ton of energy, but with similar security… like proof of space: https://en.wikipedia.org/wiki/Proof-of-space and chia coin, from bittorrent creator Bram Cohen https://techcrunch.com/2018/03/28/chia-vs-bitcoin/

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#19

His point is that proof of work isn’t necessary for immutability, not that you can run the (theoretical) Lightning Network on a mutable system - therefore advancing it as a way of absolving the limitations of proof of work is not valid, because its (supposed) advantages are its own, and not those of the proof of work system.

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#20

But I mean, the dollar didn’t evolve. It was designed by the US Government. Sure, markets and institutions and stuff evolved around it, but the same could be claimed about bitcoin, right?

He never actually claimed anything could do a better job of guaranteeing immutability, though. Notice even in the section specifically about immutability that he never shows that POW is unnecessary for guaranteeing immutability, just repeats the arguments about it being wasteful and pointless.

If POW provides the most reliable guarantee of immutability, but is rendered useless by limitations in transaction volume, then a technology which removes constraints on transaction volume would absolutely absolve the limitations of POW. Pointing out that lightning network could be used on other types of blockchain too is irrelevant, because the only thing lightning network would change about them is their transaction volume, not their immutability.

The only exception I can think of is if he were to claim that there’s some even more immutable proof method - say Proof-of-Ponies - that has even worse transaction throughput than bitcoin, and is therefore currently unusable. By removing transaction constraints, lightning network could make Proof-of-Ponies more viable relative to POW. I’m not aware of any real proof methods like this, though.

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