39

Proof of Stake is basically a case of having your cake and eating it, too. PoW is a simple work-around to a coordination problem that was previously thought to be unsolvable. It sort of "cheats" by providing an economic solution to a distributed systems challenge, by introducing a real cost as a disincentive to unwanted behavior as well as using a ...


19

I think there are at least four reasons: The miners are stakeholders in the bitcoin ecosystem. Mining solves a problem for them. Taking away PoW mining would make bitcoin no longer work for one of its most important group of stakeholders. Non-miners are in bitcoin because they like what bitcoin is. If they want some other consensus scheme, they know where ...


14

I think there are some very convincing theoretical arguments to be made, but there is also just a very practical consideration: Right now, a very large portion of BTC is being held in the cold wallets of popular exchange platforms. Hardcore bitcoiners will shake their heads and declare "Not your keys, not your coins!", but this apparently has not stopped ...


13

Asking how to prevent the mining industry from being centralized into places with low electricity costs is like asking how to prevent the shipping industry from being centralized into cities that are on the coast. Both industries will tend to thrive in places where the profit margins are highest...and there's no profit margin in building a port in a land-...


9

I feel that a solution will have to be found I'm not sure I agree there is a 'problem' that needs to be explicitly fixed. The article you linked explains the relationship between price and electricity usage, now remember that price is a measure of the demand (since the supply is fixed and known). So the market acts as a naturally regulating force: as ...


7

First, mining does not require a lot of bandwidth. Whatever you have is likely enough. Second, mining profits (in bitcoin, not some currency after exchange) is determined by difficulty. Difficulty is like a level number. The higher it is, the harder it is for mining computers to hash (the under-the-hood work). Calculating mining profits only needs the ...


6

One possibility among others to encourage mining decentralization is to rely on already owned/amortized hardware to mine the currency. Most people will not by ASICs to mine bitcoin, but many already have a computer, so the jump to mining is easier if that computer is somwwhat plausible as a miner. For bitcoin, ASICs are so far ahead that mining with a ...


6

On the deflationary death-spiral part: The bitcoin wiki has a good discussion of deflationary spiral, so that's a good place to get a counter point. I'd like to make some of my own (amateur) observations: Gold is currently not the most popular money used in the world not because gold is "bad" money, but because: a) Laws make it more difficult/expensive ...


6

Of course. At the current block reward of 25 BTC per block, on average 3600 BTC are mined per day which are worth over $1 million. If it were significantly much cheaper than $1M (in terms of energy costs) to mine that $1M worth of coins, more people would do so, thus the difficulty would go up, thus the energy costs would go up. By definition, the energy ...


5

If your electricity costs are high, unprofitable for you may mean profitable for someone else. Some miners may still use unprofitable ASICs either to support the network (at a smaller loss than with GPUs) or in hopes that BTC price will rise in the future (although just buying BTC in this case may be more profitable). Try to sell them. If you have no ...


5

When transactions are created they are essentially a payment promise. They are submitted as a message to the network, where every node checks that the promised money exists and then forwards the transaction. Some of these nodes collect transactions in order to create a new block. These miners are essentially participating in a giant lottery where the winner ...


4

This is my second answer, which does not cover your question directly but is rather given after the lengthy discussion. Bitcoin is the first approach to a distributed, cryptographic currency. As of now it has not been the last one however. Bitcoin layed the foundation to spawn a lot of similar currencies. This is not destructive to the idea. in fact, the ...


4

Basic Algebra 101: 100 W = 0.1 kW so 0.1 (kW) * 0.1399 (USD/kWh) = ~$0.014 (USD/hour) or 0.1 (kW) * 24 (h/Day) = 2.4 kWh/Day 2.4 (kWh/Day) * 0.1399 (USD/kWh) = $0.3358 (USD/Day)


4

As we've answered earlier today the description of what happens when 90% of the hashpower is lost is approximately accurate, although somewhat exaggerated: "A 90% loss will create 2 hour block intervals and take a year to resolve." Actually, it would be 100 minute blocks and would take less than half a year even assuming that no new hashrate were added ...


4

As more transactions are added to the block chain, does each individual transaction (ie. I send a bitcoin to a friend) get more expensive (in terms of FLOPS) to verify and commit to the chain? No, it does not get more expensive in terms of anything. It especially does not get more expensive in terms of FLOPS because there are no floating point operations in ...


4

I have read somewhere that every Bitcoin transaction is "equivalent to the power consumption of an average U.S. household over 22.86 days.". Is that true? Isn't that horrible? tl;dr: Most people don't value Bitcoin as a payment mechanism, and even if they were, most payments are not recorded on-chain. So calculating the energy cost of a transaction ...


4

Yes, there is a way, by creating a BIP, but an alternative to PoW would very likely not get consensus in the community, and thus its supporters would be forced (and are free to) to create a hard fork, creating a new coin altogether. It is then to be seen which coin the market will choose, but my sense is that the majority of bitcoin investors will still ...


3

This is a bad article. While it may be true that Bitcoin is difficult to change, it is much easier to shut down. This is true! While full clients will not accept invalid blocks, nothing guarantees that there will be valid blocks to confirm transactions. The largest mining firms has worked out special arrangements with the chinese government which ...


3

I'm not an expert, but as far as I understand it, Moore's Law applies to ASICs just like other chips. So, every two years you get newer ASICs which can hash more, even though the chip design is not all the different from the previous ASICs, the number of transistors that chip has on it is doubled. So, there is always going to be a cost of keeping up with ...


3

It largely depends on what machine you want to power with those solar panels. You're definitely going nowhere with GPU based mining. As PCs consume a huge lot of energy, and those who don't, are equipped with Atom and Intel graphics, meaning mining won't get you far with that equipment. However, it may be possible to run a USB ASIC miner based on a ...


3

If you can hold your hand on the Bitcoin Miner for an extended period of time without burning it, I doubt the cube is consuming 270 Watts. What does your mining software indicate the temperature is? My two cubes run at temperatures between upper 30s and low 50s Celsius. (These cubes do make nice winter hand warmers for cold typing hands:-) Once you rule ...


3

Yes, this number is the total energy consumption of mining, divided by the number of transactions confirmed. The total energy consumption has basically nothing to do with the actual number of transactions, at least not directly. There's an indirect relationship: since the total number of transactions (or rather, total size in bytes) that can be confirmed ...


3

Bitcoin should switch to BFT (Byzantine Fault Tolerant) PoS which is secure by definition. Most people that don't like PoS are thinking in "vanilla" or "chain based" PoS protocols which are certainly more insecure than PoW. Ethereum 2.0 is using Casper currently in the Beacon Chain, and other coins are also using BFT PoS protocols. I will ...


3

The people operating the mining hardware do. Mining hardware consumes electricity, so people who run the hardware receive an electricity bill from their electricity provider. They pay the bill using the proceeds from mining. Usually miners will sell some portion of the Bitcoin they earn for fiat, and pay for electricity using that fiat.


3

Who is paying for the running costs of Bitcoin? The primary costs are almost entirely paid by miners. Anyone else who runs any other sort of node (wallet etc) is likely to be also contributing by forwarding Bitcoin messages. They also pay a tiny amount of costs to sustain the network in terms of their own electricity costs, networking costs, capital assets (...


3

I would assume that the transactions fees would stay or converge to be very low levels, because every miner has always an incentive to add any transaction with a positive fee. Block space is finite, so users are bidding for their position within the next block. Miners will always choose the transactions which have the highest feerate because it makes their ...


3

I think that implementing the protocol described in this paper wouldn't do much to diminish the total energy spent mining, but it would increase network instability and the potential for malicious miners to game the network to their advantage. This protocol creates a condition where every other block actually requires that the miner to find 2 valid blocks in ...


3

Like chytrik said, the paper is light on all the interesting details. How do the rules get enforced? How are miners identified? How is the global time agreed upon? Why wouldn't miners just hop pools for the second round? What happens when miners fiddle with their block template's timestamps to get a head start on mining the second round block in case the ...


3

No, it does not seem possible to impose limitations as proposed on miners without severely impacting key properties of Bitcoin. The proposed change would at least require registering miners and instituting some sort of oversight mechanism to evaluate their participation. The likely outcome would be some mix of reduced utility and evasion of the oversight at ...


3

would there be a way to change the algorithm to limit how many transactions a given mining installation could process per day, No. Miners can submit blocks anonymously, there is no mechanism by which miners can or do 'register with the network' in order to perform their mining work. Further, energy use has nothing to do with how many transactions are ...


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