Originally published at: What Ethereum's big "merge" means for energy efficiency | Boing Boing
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How do the crypto libertarians reconcile their “open to anyone, distributed, no oversight” garbage with the fact that the merge and proof of stake is really just the people that already have ETH closing the door behind them, since you now need ETH to make ETH and those with the most ETH will have more control over the block chain?
Not saying anything bad about the merge - it does fix ETHs carbon problem, but I am wondering how the cryptobros deal with the cognitive dissonance (aside from the years of practice they already have at believing three impossible things before breakfast each morning)
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New & Improved Nothing - Now with Less Energy!!
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I don’t know about them, but I’d say it was always the plan.
Sometimes I wonder if I would be among the crypto ayn-caps if I had no morals or ethics too. I rejected cryptocurrency back when crypto still meant cryptography rather than a get rich scam. I heard one of the early crypto-bros talking about it (maybe at CCC, I can’t remember now) and everything in my brain was telling me to run far away, even back then. This was back when one bitcoin bought you a pizza (if that).
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A whole new way to be separated from your hard earned cash 
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“Hey, maybe if we get the eco-nuts off our backs we can keep this bigger-fool scam going for a while longer!”
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“Reconcile”? What gave you the idea that people who believe that cryptocurrency is worth anything tangible are even capable of suffering from cognitive dissonance?
They’ve imagined-up a lot of make believe cash. They can now spend it between themselves quietly, without people kvetching about the energy waste. But now that they’ve barricaded non-participants from their closed economy, if they want anything from someone outside of their blockchain they’re going to have to translate fake cash into real cash; and the more they exclude people from participating, the less real cash value their made-up economy has.
Their only hope now is that excluded rich people can be enticed to buy their way into $ETH, providing an injection of real cash to keep the scam running. The only way that will work is if they can price their existing desirable assets in $ETH-only. And then we’ll see how long they’re willing to play a zero-sum game.
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Great it’s more efficient - but what is it actually doing?
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I looked into it early on, and my problem was always that I could never understand one damn bit of what any of it actually was. I still don’t. I am not the smartest human on the planet, but I’m probably somewhere on the higher side of the average for a human. I have a BS and an MS in Aerospace Engineering, and I’m about to complete a JD at the age of 54. But every time I try to understand cryptocurrency and NFTs, I’m just left going, “Uhhhhh…what?” This has always made me skeptical and thinking it’s all possibly a scam, and I seem to be at least partially correct.
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to be fair, i feel the same way about capitalism and money in general.
to me, crypto reads like stocks. except the only product produced - the only thing expected to make a profit - is the coin itself. which works until it doesn’t i suppose
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As noted above, shifting power in the marketplace to those who already hold the largest amounts of the cryptocurrency. Permanently. No more pesky new entrants upsetting who’s running the racket just because they can buy more CPUs and burn more fossil fuels. The rich get richer, and the more you already have the more you get. That’s ETH proof-of-stake.
It’s better than proof of work but that’s not saying much. It’s still a pyramid scam, just with different and less environmentally disastrous conditions for remaining at the top.
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Like a single person commuting a long distance to work every day in a giant SUV that happens to run on batteries, this is “better”—for certain specialized conceptions of betterness 
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The line appears to be that “our people” have to stay in control of things or it’ll all go sideways. So, uh, a cartel. Concern for new entrants into a market sounds suspiciously like morally weak democracy talk.
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Cryptocurrency is two things: a local (not fiat) currency, and a public ledger of all transactions.
Before we were born, paper currency was invented as a convenient way for rich people to not have to carry around heavy sacks of gold. It was a piece of paper issued by a bank, and was asset backed: if the paper said “one pound sterling, issued by the Royal Bank of Scotland”, you could go to the Royal Bank of Scotland and trade it for one pound of sterling silver coins. After a while banks started agreeing to accept each other’s paper notes. Eventually governments decided to formalize the paper money, and then only official banks could issue notes. (I remember being surprised on a holiday trip in the 1990s that some English establishments still wouldn’t take money issued by the Royal Bank of Scotland.)
Later, the governments decided they could issue the notes without having them backed by hard currency. They decreed “by law these pieces of paper are worth $1 each”. Which kind of works, as long as people have faith in the governments to not issue too much paper money, and to not hand it out willy-nilly. To build confidence, the US Government has piles of regulations and programs such as the FDIC to “guarantee” the value of the paper they issue. The US dollar has been a fiat currency for about a hundred years now.
A local currency is like that, but without a government backing up any claims about its value. Common examples are casino chips, gift certificates, subway tokens, etc. They only have value within a local context - you can pay for drinks at Caesar’s Palace with their chips, but you can’t pay your taxes with them.
Local currencies are promises of value that are upheld only by the reputations of the issuers. If you find an old Radio Shack gift certificate, its value went to zero when they shut their doors – nobody else guaranteed them.
Stocks are a form of local currencies, but because they underpin so much actual wealth the exchanges are heavily regulated to try to reduce fraud. (Wherever there’s value, there’s fraud.)
Cryptocurrencies are an example of a degenerate local currency that’s trying to be a worldwide unregulated currency. But because they are unregulated, there’s no protection. Instead, you can only trust the cryptographic concepts are solid. (If criminals could forge bitcoins on demand, bitcoins would have no value at all.) But even if the crypto is solid, the individual implementations aren’t always trustworthy: a few years ago Mt. Gox decided to abscond with the value of their customers’ coins. But what makes crypto currencies particularly worthless is that not only are there no guarantees, there are no real assets backing up any of the value. There are some exchange traders that will trade you bitcoins for fiat currency, making it look like there’s value, but they’re just faith-based players in the game, too.
So no, you’ve missed nothing. Right now they’re in the middle of a rampant speculation run that has stopped going upward, and they’re transitioning to the “… and find out” portion of the lesson.
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It sure would be nice to pick up a spiffy new graphics card for all those games that I’ve already bought and never got around to playing.
How bad could they be, really? I would think that the fans would be the most likely components to suffer, and a fan is relatively easy to replace. I expect all the details have already been explored in depth?
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This is where “free” market fundies always end up. We joke about fascists like Thiel calling themselves “Libertarians”, but it’s long past the time we should acknowledge that the ideology is the Road to Neo-feudalism (and thus, ironically, the actual Road to Serfdom).
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There are other things that could be wrong with a card used for mining, but from what I have seen regarding testing on cards that were used for mining the Nvidia 30-- series cards all seem fine even after being used for mining. That said, prices on new cards are also plummeting, so maybe just go with those.
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Excellent summary!
One minor detail I’d tweak:
All fiat currencies are entirely faith-based. US dollars only have value because we all agree they do. There’s no asset backing them, same as crypto.
What it comes down to is whether you think the US government will make good on that $1 promise in a year, ten years, or a hundred years. Absolutely most people do. Will a skeezy bro running some website meet that same standard of faith? Uh, fuck no. Thats crypto’s main problem, IMHO.
To further answer @danimagoo ’s question from a technical perspective– I’m a computer scientist and software engineer and can tell you that the technology of cryptocurrencies is sound. The math is secure, there’s no doubt about that. The technical things people say about Blockchain are generally true and the cryptography side of it is mathematically provably secure.
The rampant security problems it has are the same ones every system has at the end of the day- the people. You can have a perfectly secure mathematically airtight means of holding tokens (as secure as a paper dollar in your pocket), but at some point you have to collect, transfer, trade, and exchange those tokens. That introduces moments of faith in other people and places for things to go wrong (which holy cow do they ever in crypto).
All money systems have these same security issues. The difference is that with a fiat currency, you have an entire democracy with courts, law enforcement, etc to resolve any problems. With crypto there is nothing. It’s the institutions that give money value. The US dollar has value because there are functioning institutions behind it (though we’ll see how long that lasts).
The thing I always say about blockchain is that it’s a really interesting solution in search of a problem. Libertarian currency is definitely not it. NFTs are definitely not it. Computer Scientists generally agree there’s something here, but nobody knows what yet.
So to the question of “is it a scam”, absolutely every current blockchain-related thing is a scam to stay the hell away from. Will it always be so? Too soon to say. Like Fox News and racists, crypto is not inherently a scam, but it’s #1 with scammers.
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I look at crypto currency as the sovereign citizens of finance.
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Blockchain is almost always a complete waste of everything. Anything that can be “done on a blockchain” can and should instead be done using certificates, digital signatures, a trusted timestamp authority, and a trustworthy PKI (which we already have.) Certificates have been around for 40 years (they were created by the telecommunications industry prior to their adoption on the internet), and a certificate can produce a signature in milliseconds without having to transfer a terabyte of blockchain every time an attestation is needed.
However, blockchain has one very specific use case: where formal PKIs cannot be trusted. Let’s use the example of free trade coffee: much of the coffee is produced in parts of the world where the governments are known to be corrupt; where you can get anything “officially” certified simply by paying the proper officials. Such an attestation of compliance is worthless, as nobody believes their signatures that suppliers are honestly paying fair wages for their coffee bean workers. What can work is a collective of people each agreeing to attest to the ethical behavior of the others. So they can create a block chain without involving their official government. With the distribution of their blockchain transactions, everyone in the world can see what’s going on.
Could a collective of scammers form their own blockchain? Sure, but then they’re on the hook together; if one turns, they all lose.
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