Bitcoin discussion and news

[SpineyNorman]

Awesome tool for money laundering.

Not that good, public ledger and you have to cash out somewhere. Blockchain analysis is being used more and more in darkweb investigations and it's getting more and more sophisticated - mixers/tumblers now offer very little if any protection. The right wing crypto mentalists are all into monero now for that reason.

 

[Idaho]

Not that good, public ledger and you have to cash out somewhere. Blockchain analysis is being used more and more in darkweb investigations and it's getting more and more sophisticated - mixers/tumblers now offer very little if any protection. The right wing crypto mentalists are all into monero now for that reason.

It's no better or worse than many other tools for money laundering. The principles of placement, layering and integration are the same. There are ways of dodging tax in all kinds of money. 99% of money laundering is done in fiat money through the conventional banking system. See the latest news about HSBC - certainly not the first from them (see Mexican cartel scandal).

 

[newbie]

This popped up on my facebook feed. Apparently, the obsessive cross-checking built into the blockchain concept has created a situation where the electricity consumption required to authenticate a single bitcoin transaction is roughly equivalent to a weeks power consumption for an average American home.

One Bitcoin Transaction Now Uses as Much Energy as Your House in a Week

that is truly shocking. Each transaction is estimated at minimum 77kWh, more likely 215kWh.

I dunno about anyone else, but our household used 55kWh last month.

This cannot be considered sustainable.

 

[bimble]

That (energy consumption of btc transactions & mining) is mad.

 

[camouflage]

It's all kool aid! Whether it be paper money, coins, gold bars, yapp island stones, cowrie shells, digits on a screen, etc.

There was a time before all of these things were even conceived as a possible marker of exchange, a time when some used them and others thought it ludicrous. And then a point at which an imperceptible shift occurred - when it no longer seemed significant whether it was sensible or ludicrous, but that it was just money.

Consensus.

 

[not-bono-ever]

lolz.utterly nuts.

 

[camouflage]

that is truly shocking. Each transaction is estimated at minimum 77kWh, more likely 215kWh.

I dunno about anyone else, but our household used 55kWh last month.

This cannot be considered sustainable.

A switch to Proof of Stake rather than Proof of Work (PoS vs PoW) could solve that, but there would be repurcussions to a revolution like that at this point. And who knows what it would do with Bitcoin's subtly balanced game-structure. Still, there's only one Earth.

https://blockgeeks.com/guides/proof-of-work-vs-proof-of-stake/

another thing to consider might be Bitcoins overall anti-consumerism. A deflationary currency really makes the saver consider their priorities when it comes to spending a form of value that increases over time. This is bound to have a cooling effect on spending habits among Bitcoin holders. Can the overall reduction on the consumption of consumer products and services in a deflationary value system be off-set from the footprint of said value system itself?

I dunno. Maybe in the future we'll live in a data-centocracy and all of society will be geared toward serving the servers. The servers must be served (performs the gesture). Maybe that's where it was all going anyway, the conversion of all the energy we can gobble up into information. And then store it.

 

[newbie]

261,743 transactions per day

that's at least a months worth of electricity for a city the size of Southampton every day... could be anything up to 3 or 4 months worth.

No amount of tinkering at the margins will enable blockchain to scale worldwide to replace billions of daily conventional electronic transactions.

edit millions

 

[camouflage]

261,743 transactions per day

that's at least a months worth of electricity for a city the size of Southampton every day... could be anything up to 3 or 4 months worth.

No amount of tinkering at the margins will enable blockchain to scale worldwide to replace billions of daily conventional electronic transactions.

A change from PoW to PoS is not an "amount of tinkering", it would be a fundamental shift in approach. Like flicking a switch to a Consensus based on "work" to a Consensus based on a balance. Previously air-miles had some sort of relation to jet-fuel to move through space with, let's switch the system so that from now on air-miles relate directly to Pina Coladas instead, or whatever you like to drink on beaches. Now there's no need to consume jet-feul anymore, you can just drink your collection of air-miles up at home. It's becomes a radically different sort of holiday at that point, the question is would it still be as fun?

 

[Poi E]

261,743 transactions per day

that's at least a months worth of electricity for a city the size of Southampton every day... could be anything up to 3 or 4 months worth.

No amount of tinkering at the margins will enable blockchain to scale worldwide to replace billions of daily conventional electronic transactions.

Important to distinguish between mining for bitcoin and utilising blockchain for other purposes like smart contracts etc.

 

[newbie]

A change from PoW to PoS is not an "amount of tinkering", it would be a fundamental shift in approach.

that depends on scale. The graphic says "several thousand times more cost effective" which is presumably a proxy for energy effective.

I can't find anything properly definitive, but a commonly quoted worldwide figure is 100 billion plastic card transactions per year, around 300 million per day. We get impatient if they take more than a fraction of a second to authorise. Current blockchain transactions burn massive amounts of carbon and are too slow for contactless use.

Can PoS compete at a scale of 300 million per day and growing as we (worldwide) gradually abandon cash because of speed and convenience?

If not, doesn't it amount to yet another example of a small subset of people consuming far more than their fair share of carbon with scant regard for anyone else or their own descendants?

 

[newbie]

re-reading the above, it's a bit more confrontational than necessary- sorry. Just shocked at how energy intensive this is.

 

[camouflage]

that depends on scale. The graphic says "several thousand times more cost effective" which is presumably a proxy for energy effective.

I can't find anything properly definitive, but a commonly quoted worldwide figure is 100 billion plastic card transactions per year, around 300 million per day. We get impatient if they take more than a fraction of a second to authorise. Current blockchain transactions burn massive amounts of carbon and are too slow for contactless use.

Can PoS compete at a scale of 300 million per day and growing as we (worldwide) gradually abandon cash because of speed and convenience?

If not, doesn't it amount to yet another example of a small subset of people consuming far more than their fair share of carbon with scant regard for anyone else or their own descendants?

Well to my mind that question should include the likes of facebook or twitter or google, the internet in general really. Every person who decides they want to start a blog or use a search engine or post an update. They're all part of the server-load on the world as a whole that is the internet, and complexity carries costs. What's subtracted by PoS though is the algorithm designed for an ever increasing demand for energy. Googles algorithms don't demand more energy every time you type in a search term, they try to use as little as possible in terms of efficiency savings and shortcuts. All the other services on the internet try to be as cheap to run as possible, but only Bitcoin and similar PoW crypto are designed to gain in costs (and value) over time. With PoS a crypto currency is designed only to increase in value over time because cost is not part of its security setup in the same way (only value is). So that means the PoS crypto is just another service on an ever growing internet whos development is a wider question than just crypto or big data, and really reflects how society as a whole is developing socially and technologically (or devolving in some cases, probably). So you are at that point asking about the sustainability of our advanced society and growth itself rather than the global consensus on brute-force that is Bitcoin (eta: in its current form).

 

[Idaho]

Proof of work is currently the most secure method of managing decentralised transactions. It has to be more expensive to hack than to mine.

The second layer solutions will reduce the energy to transaction ratio. That's going to be a while though.

 

[Poi E]

Cheers folks. Great info.

Bitcoin up

 

[newbie]

Well to my mind that question should include the likes of facebook or twitter or google, the internet in general really. Every person who decides they want to start a blog or use a search engine or post an update. They're all part of the server-load on the world as a whole that is the internet, and complexity carries costs. What's subtracted by PoS though is the algorithm designed for an ever increasing demand for energy. Googles algorithms don't demand more energy every time you type in a search term, they try to use as little as possible in terms of efficiency savings and shortcuts. All the other services on the internet try to be as cheap to run as possible, but only Bitcoin and similar PoW crypto are designed to gain in costs (and value) over time. With PoS a crypto currency is designed only to increase in value over time because cost is not part of its security setup in the same way (only value is). So that means the PoS crypto is just another service on an ever growing internet whos development is a wider question than just crypto or big data, and really reflects how society as a whole is developing socially and technologically (or devolving in some cases, probably). So you are at that point asking about the sustainability of our advanced society and growth itself rather than the global consensus on brute-force that is Bitcoin.

Most internet tech either provides services that couldn't otherwise exist- like all those you mention- or creates better, more convenient and less energy consuming alternatives- eg Wikipedia -v- fully staffed, heated and lit public library. Build and they will come: far, far more look-ups on wiki than ever in the history of public libraries. So the overall energy involved in looking stuff up has increased, but only because we're all at it regularly, so there's widespread benefit despite the carbon implications.

Crypto currencies are different in that they challenge tech that already exists, is in constant use and is significantly cheaper/faster and has proven reliability and trust (and is more energy efficient).

sfaics (and I'm not pretending expertise) what Idaho says is correct, meaning that to win acceptance PoS based crypto has not only to prove it's fully secure but also that it's truly decentralised. There seems to be doubt on both fronts. If it can do both those and, in years to come, become 'just another service on an ever growing internet' it may have an important role to play for the world population. More so if it can achieve transactions with a lower cost/energy budget than the Visa etc systems, and timed in milliseconds rather than hours.

In any event PoW bitcoin will continue into the future, consuming huge amounts of carbon but with end user transaction costs more closely linked to transaction time than to energy consumption. So there is no particularly compelling incentive for end users to curb the number of slow transactions, each one taking a few hours but using the same electricity as a household needs for a month or more. As the price keeps rising, and the adverts on the tube and in the banners get more insistent, the number of transactions is only going to rise.

Obfuscating the payment details for an eighth of weed isn't really that beneficial for the world at large, particularly when it means that there's not that much point turning lights off or thinking about how much water is in the kettle. Most people in the world don't use crypto currency, gain no benefit from it and don't want rising sea levels. Not that their pov matters, the technology is there and isn't going to go away simply because global warming and polar bears and stuff. It can't become as obsolete as incandescent light bulbs precisely because it's decentralised, immune by design from 'state' interference, which means from any form of socialised or democratic oversight. That's a pretty bleak outcome.

 

[joustmaster]

,.,

 

[camouflage]

Most internet tech either provides services that couldn't otherwise exist- like all those you mention- or creates better, more convenient and less energy consuming alternatives- eg Wikipedia -v- fully staffed, heated and lit public library. Build and they will come: far, far more look-ups on wiki than ever in the history of public libraries. So the overall energy involved in looking stuff up has increased, but only because we're all at it regularly, so there's widespread benefit despite the carbon implications.

Crypto currencies are different in that they challenge tech that already exists, is in constant use and is significantly cheaper/faster and has proven reliability and trust (and is more energy efficient).

sfaics (and I'm not pretending expertise) what Idaho says is correct, meaning that to win acceptance PoS based crypto has not only to prove it's fully secure but also that it's truly decentralised. There seems to be doubt on both fronts. If it can do both those and, in years to come, become 'just another service on an ever growing internet' it may have an important role to play for the world population. More so if it can achieve transactions with a lower cost/energy budget than the Visa etc systems, and timed in milliseconds rather than hours.

In any event PoW bitcoin will continue into the future, consuming huge amounts of carbon but with end user transaction costs more closely linked to transaction time than to energy consumption. So there is no particularly compelling incentive for end users to curb the number of slow transactions, each one taking a few hours but using the same electricity as a household needs for a month or more. As the price keeps rising, and the adverts on the tube and in the banners get more insistent, the number of transactions is only going to rise.

Obfuscating the payment details for an eighth of weed isn't really that beneficial for the world at large, particularly when it means that there's not that much point turning lights off or thinking about how much water is in the kettle. Most people in the world don't use crypto currency, gain no benefit from it and don't want rising sea levels. Not that their pov matters, the technology is there and isn't going to go away simply because global warming and polar bears and stuff. It can't become as obsolete as incandescent light bulbs precisely because it's decentralised, immune by design from 'state' interference, which means from any form of socialised or democratic oversight. That's a pretty bleak outcome.

Read that waiting for the "but", however I couldn't really see one, it's basically what I think too though I don't think the future looks bleak as such. I'm not sure on PoW vs PoS either, I understand that there are benefits and drawbacks to either but energy consumption is a pretty significant negative point in the PoW column imo. If that is changed from PoW to PoS then I hope it's done with consensus, and not another contentious fork. It's not just about the technology or the security or the insentives-structure and how or at what rate centralization emerges, but also (dare I call it-) the crypto-politics of all that.

Speed of transactions is a whole next level round of debates, settlement layer versus transaction medium or coffee vs pension? People want different things and have different priorities, in a way it reminds me of a ouji board. Dunno if you've ever tried ouijing, I have (y'know, college) what happens is a group of people sit in a circle and put their fingers on the top of an upturned class iirc, which then moves "magically" across a board of letters to spell out messages "from the other side" or whatever. So with crypto we have all these different use-cases with their fingers on the bitcoin cup and a board covered with the features of bitcoin and the way it works and nobody knows what it'll all spell out in the end, so far we got "Bitcoin is expensive-"

Your point about the impact of crypto on people who aren't benefited by it is tricky. There's no way to predict at this point what effects bitcoins use will have as it develops further, who can be said to benefit from it and who not. Bankers might be concerned for obvious reasons but what about the Saan people who live in the Kalahari? Hypothetically speaking, if bitcoin enables Botswanan people working abroad to send more money back home more easily meaning more people are able to save up and buy property or invest in local enterprises meaning towns and cities in Botswana growing that little bit faster meaning increasing the stress between the Saans hunter-gatherer culture and the environment generally and urban Botswana and its demands, who is benefiting or not benefiting from that who isn't also benefiting/not benefiting from the growth of the smart-phone market?

I'm not saying that'll happen or that remittance payments via bitcoin or cryptocurrency more generally will be significant enough to make that kind of impact, but its the kind of winding walk you can take through all sorts of connections made possible by the technology. Bitcoin could make new divisions and form new connections in ways impossible to evaluate socially at this point in my humble opinion.

 

[newbie]

if bitcoin enables Botswanan people working abroad to send more money back home more easily

I'm about to go out but a quick first thought: 'more easily', well yes, anyone can set up an account without central government approval. In 2014 62% of the world's adult population had a bank account, an increase of half a billion people over 3 years earlier. As mobile tech penetrates previously unconnected populations so will bank accounts. That's far more likely, surely, to matter to the people of Botswana than Bitcoin (or does their government preclude or tax transfers?) More useful too, at least until the likes of Amazon start taking Bitcoin.

 

[Idaho]

There are a million and one ways that humanity wastes electricity. Quite a lot of Chinese bitcoin mining is from hydroelectric I think. The existing banking system requires hundreds of millions of employees, computers, offices, computers, etc. I don't think the pre crypto sector is carbon efficient by any stretch. And more importantly, can never be. Crypto could shift to a pos when the issues of security and centralisation are met, or it could be powered by renewables.

Once the lightning network is running, we could have 1000, instant offchain transactions to each on chain transaction. That should improve efficiency dramatically.

 

[Idaho]

An interesting/odd/unexpected/ironic one from deutsche bank:

If that's the case, Reid says the fiat currency system - a term which describes any currency whose value is backed by the government that issued it, rather than by a commodity like gold or silver - could be "seriously tested" over the next decade.

Disinflationary forces
The basis of Reid's argument is that China's rapid economic emergence in the 1970s, and an explosion in the global working-age population, has allowed inflation to be controlled externally, because a boost in labour supply during a period of globalisation naturally supressed wages.

DEUTSCHE BANK: We may be looking at 'the start of the end of fiat money'

 

[newbie]

There are a million and one ways that humanity wastes electricity. Quite a lot of Chinese bitcoin mining is from hydroelectric I think. The existing banking system requires hundreds of millions of employees, computers, offices, computers, etc. I don't think the pre crypto sector is carbon efficient by any stretch. And more importantly, can never be. Crypto could shift to a pos when the issues of security and centralisation are met, or it could be powered by renewables.

Although I take your point, two wrongs != 1 right and anyway there's an element of apples and oranges. I have no love for the mainstream banking system, but recognise it covers far, far more than straightforward electronic transfers. All those customer service buildings that people campaign to keep open so they can stand in queues, all the cash processing, all the terminals in retail outlets, all the loans and overdrafts, all the murky new and inventive ways they find to relieve people of their money, and that's just retail banking. All of it can use renewables, of course. The equivalence is closer to energy consumption of the online purchase aspect of the Visa debit system (about 20% of all transactions), or perhaps Paypal.

Once the lightning network is running, we could have 1000, instant offchain transactions to each on chain transaction. That should improve efficiency dramatically.

So there is hope, but only if the lightning network can be made to work. Good, the sooner the better because the current arrangement simply has to stop.

That's in the future, meanwhile we live in the internet age, when popular services snowball to alarming scales. Bitcoin is very attractive and starting to hit the mainstream, not least because the price has increased by a factor of 6 or so in the last year. In that time the number of users has doubled to 15 million, a rate of increase that's likely to continue to rise.

Every single time someone buys an eighth of weed they use the same power as their home uses in a couple of months. Madness.

Just for reference, there are 250million Paypal users, 1.5 billion debit cards. Is there enough electricity in the world if bitcoin becomes really popular?

 

[Idaho]

I had a search about and saw that a significant chunk of the core developers are working on ways to improve/reduce the carbon footprint. It is being treated as a priority, but it takes time.

 

[Idaho]

I'd really encourage everyone with an interest, to take a look at this video regarding the lightning network.

If you aren't interested in the nuts and bolts, but just the Sci fi/futurology side - skip to 17:30 for the last 10 minutes - all about streaming money.

 

[newbie]

I had a search about and saw that a significant chunk of the core developers are working on ways to improve/reduce the carbon footprint. It is being treated as a priority, but it takes time.

I appreciate it takes time, but I'm afraid I think the current situation needs shouting about. tbh I thought I'd got a reasonable, if non-specialist, clue about blockchain/crypto currencies. An outline, an appreciation of the terrain even if not a deep technical grasp. But until i read that post the other day I had no idea that carbon was such a significant factor. It's obviously been known about for a long time by those more clued up than me but hasn't been shouted about, I suspect primarily because those within the Bitcoin(etc) communities who knew and understood are more interested in promoting their shared enterprise than in highlighting the elephant blue whale on the sofa.

There's always been a whiff of evangelism, the disruptive nature of crypto currency, the anti-establishment undercurrent, the capability to evade state interference in far-off places (perhaps like Botswana as mentioned above), the dark market edge and so on have all been done to death. And the potential profits of course. And the scams. But not the humongous power thirst.

I'll watch the video.

 

[ffsear]

Utterly staggering!!

Key Network Statistics

Description Value
Bitcoin's current estimated annual electricity consumption* (TWh) 25.25
Annualized global mining revenues $6,333,471,527
Annualized estimated global mining costs $1,262,732,417
Country closest to Bitcoin in terms of electricity consumption Nigeria
Estimated electricity used over the previous day (KWh) 69,190,817
Implied Watts per GH/s 0.243
Total Network Hashrate in PH/s (1,000,000 GH/s) 11,293
Electricity consumed per transaction (KWh) 236.00
Number of U.S. households that could be powered by Bitcoin 2,338,393
Number of U.S. households powered for 1 day by the electricity consumed for a single transaction 7.99
Bitcoin's electricity consumption as a percentage of the world's electricity consumption 0.12%

 

[Idaho]

The crypto space has plenty of fools, mystics, nut jobs, etc. The most interesting aspect is the technology and the potential changes to the world of finance and money. It's hard to wade through the nonsense to find the interesting stuff.

 

[newbie]

I'd really encourage everyone with an interest, to take a look at this video regarding the lightning network.

If you aren't interested in the nuts and bolts, but just the Sci fi/futurology side - skip to 17:30 for the last 10 minutes - all about streaming money.

He posits a trade-off between fees and latency (as there is now), and a massive increase in privacy and anonymity. He doesn't mention energy usage, it remains abstracted so far in the background it's as invisible as now.

His explanation of the Lightning network implies that although the time/energy budget of each transaction is lower than now there will be perhaps 233 hops, not 1, to pay 'Alex'. He gives no concrete figures, but your post suggested 1000 times lower per transaction- did you mean per anchor/settlement pair or per promise (hop) on (what he calls) the rowt? The former may be significant, the latter less so.

He reckons the future involves micropayments, possibly streamed as realtime money. That implies a massive increase in the overall quantity of transactions. That just magnifies the problem.

 

[newbie]

Utterly staggering!!
Country closest to Bitcoin in terms of electricity consumption Nigeria

there are 186 million people in Nigeria

thanks for that

 

[Idaho]

With lightening network, the initial set up and final account will be a blockchain transaction. But once the nodes are connected within that, then you can have an unlimited number of transactions between nodes and people on those nodes without any on chain transactions.

Proof of work is ludicrous, but so far is the only provably secure method. We have to see if either an improvement or efficiency can take place, or if something else entirely is needed.