I understand that proof-of-work plus a block chain is one way of creating a trustworthy public ledger of transactions. But holy hell, the cost to society in terms of energy consumption is VERY high per transaction. I participate in conversations online all the time where I implicitly trust that I am seeing the full discussion and that everyone can see my input. Usenet, for example, does this in a decentralized way. Couldn't we just post our transactions to usenet save some resources?
I participate in conversations online all the time where I implicitly trust that I am seeing the full discussion
Proof-of-work is one part of what allows bitcoin to be trustless, which is a very important property for any decentralized system of value. If transactions were just posted to a forum, then what is to stop a forum admin from editing, censoring, or deleting transactions?
Creating a trustless financial network is not a trivial task, the large amount of energy being spent to secure the network is a testament to the value users see in maintaining and participating in the network.
Bitcoin’s market cap is about $200 billion. Would you bet $200 billion that you will always be able to see every message ever posted to Usenet, given that the whole world knows the kind of money at stake? Remember that all somebody has to do is delete or delay a message to be able to execute a double-spend attack successfully.
Blockchain technology doesn’t actually have anything to do with money. It just solves the problem of maintaining a decentralized immutable record, and that happens to be the key missing link in practical digital cash systems, which had been extensively studied long before Bitcoin came along.