Minister Donohoe publishes discussion paper on virtual currencies and blockchain technology


I agree, and in terms of adopting to clean efficient energy, bitcoin mining can adopt easily to it, unlike say the aviation industry.
 

Ok so bitcoin mining is now the same to having Christmas trees. Just because we currently waste energy isn’t an argument to waste more. God help us if that is the logic we are now using.
 
It's not 'wasting energy' - it's being used for a purpose. You disagree with that purpose and then classify it as a waste.
The analogy stands - I think we should knock off crimbo tree lights permanently but I doubt you'll get the rest of the world to agree with me.

Sunny said:
Ok so bitcoin mining is now the same to having Christmas trees. Just because we currently waste energy isn’t an argument to waste more. God help us if that is the logic we are now using.
Click to expand...
 
Sunny said:
Ok so bitcoin mining is now the same to having Christmas trees. Just because we currently waste energy isn’t an argument to waste more. God help us if that is the logic we are now using.
Click to expand...

Thats only if you think Christmas tree lights are a waste. Personally I think they add value to the festive season and im sure the traders in towns and cities see the value in lighting up shopping malls - its good for trade I would say.
 
Hello Mr. Burgess,

Thank you for posting about this, as I'd not seen it before now.

Delighted to see this paper published and will read it when time permits.
 
tecate said:
the initial failing is the assumption that the energy is being used for nothing - it's not.
Click to expand...

I don't think that's accurate. The argument I see most is that is it using many, many multiples of the energy actually required to perform the function.
 
Hi leo, i think i know the conundrum that is confusing the people that make the argument for energy waste.

Bitcoin mining is bases on game theory. The assumption ab ovo is that the participant will be selfish (selfish is good for game theory).

The system self regulates and the energy consumed by miners cannot be judged excessive or
 
Sorry trigger happy, continuing...

...excessive or too low for that matter. Bitcoin is trustless, people don’t know what the others will do and are rewarded for doing their job in their own interest (see selfish above)

The cost of the energy consumed is the result of all the miners being selfish and trying to get profit. If price goes down, less miners will mine and difficulty goes down.

It is mathematics, you can’t wake up in the morning and say “i think bitcoin uses too much energy without having any insight on how the joint peer too peer, trustless and uncensorable catachteristics of the ecosysrem regulate the quantity of energy necessary based on a mathematical formula.

Would you say that
 
Did it again sorry from mobile and from hospital bed not a great combination

... what would you say if somebody cane out and said “the hypothenuse as calculated by pythagoras theorem is eccessive, it should be less”
I bet you’d laugh, and so do i when i hear that bitcoin energy consumption is excessive. The formula is in the original nakamoto problem, it’s only 9 pages, do some due diligence please :-}

Best regards,

Gus
 
Just to add some more to the discussion. Proof of work is used by bitcoin but is not the only potential approach to resolving the reward problem. Other cryptos, for example ethereum and tezos are at advanced stage in developing Proof Of Stake that rather than utilising energy to calculate a cryptographic riddle use the skin in the game that the users have to reward them. I am ambivalent, i believe both reward system have their merits, i favour POW at the moment because it is proven as it has been working without problems for 9 years, once POS is out i will observe, analyse, probably contribute to it and i hope it will also work as well as POW and reduce the electricity input necessary

Best regards,

Gus
 
I think a little lesson is needed here for AAM contributors. The Difficulty of the brain dead hash puzzle (POW) is built into the protocol for two reasons. Firstly, and this is the only real benefit to the bitcoin community, it underpins the integrity of the blockchain. Secondly it targets the release of bitcoin to once every 10 minutes. Satoshi Nakomoto set the Difficulty at a minimum of just over 4 billion hash attempts to get a valid block. This is called a Difficulty of 1. It was fit for purpose for many years but then as mining became more lucrative it started to edge up, until last year it went into the stratosphere. The Difficulty of today's block is 3,511,060,552,899.72 times the original difficulty target. I put it to you Gus that this ginormous target is driven almost entirely by the second objective - to target the release of new bitcoin at 10 minutes. Are you trying to tell me that this is also broadly the difficulty level needed to secure the integrity of the blockchain?
 
Thanks for the good question and the well thought preamble where you explain the concept of difficulty very well.

I'll try to answer to my best but it is 21:48 in bangko k and the post op morphine is kicking my behind, I trust you will ask clarifications tomorrow if I am not clear.

first fundamental point: the difficulty cannot be examined on its own. It must be seen as part of a few elements interlaced.

First, mining is part of the reward strategy. The reward strategy is based on the assumptions that miners take decisions in their interest that means will use the minimum processing power to obtain the maximum return. This is how it works, the Nash equilibrium (beautiful mind) regulates such mechanism. Each difficulty reset is determined by the amount of power deployed by the miners, and if the miners are smart (the non smart lose money and die) they are using the minimum economically viable processing power that guarantees them the maximum reward share. The miners actually put the hashing power out and saying it is too much power means saying the miners are losing money, but as you know this is not the case at all.

This is the non scientific answer, let me know if it helps even just a bit, I am willing to take some time tomorrow and try to formulate a better answer but I would appreciate your feedback if we are going to the right direction or not. I could do the math proof but that is already on the paper so I assume it is not what you are looking for, am I right?

Thanks for the open minded convo

Best regards,

Gus
 

I understand how it works, and maintain my opinion that Bitcoin's current electricity use is far in excess of what is justifiable to run a system that can only aspire to a theoretical maximum of 7 transactions per second.
 
That’s fine i respect your opinion as your opinion.

Can you somehow mathematically demonstrate by how much the need is exceeded? Because tha math demonstration of the opposite of what you say exists, in the whitepaper.
 
Gus the point Leo and I are trying to make is that POW is currently at a difficulty level far, far, far^20 higher than is needed for its main purpose viz. to secure the blockchain. The problem is that the rewards at current prices are far, far, far^20 times higher than are needed for that purpose.

Look. I'm not an eco warrior. Miners are as entitled to use electricity as rock bands or anyone else so long as the use is not criminal and I don't think anyone is arguing that it is.

But I am sure that if Satoshi Nakomoto envisaged a bitcoin price of €7,000 s/he would have rewritten that bit of the protocol. But I am pretty convinced that SN will be proved right in the long term in that the bitcoin price will, if it survives at all, settle at around 1 Yen per bitcoin which presuming s/he is Japanese is what s/he had in mind ab ovo.
 
Leo said:
a system that can only aspire to a theoretical maximum of 7 transactions per second.
Click to expand...

False because many reasons:
1)
Solution with larger blocks => as many transactions as you want
2)
Solution with sidechains and or lightning network model => as many transactions as you want
 
Gus1970 said:
That’s fine i respect your opinion as your opinion.

Can you somehow mathematically demonstrate by how much the need is exceeded? Because tha math demonstration of the opposite of what you say exists, in the whitepaper.
Click to expand...
Okay I will take you up on your earlier promise. What are the mathematics in the White Paper that justifies the current Difficulty level?
 

Sorry can you show me a formal demonstration of why it is too much?

If you say it like this it is simply your opinion, that i respect as such, as your opinion, nothing more. Can we be slightly more scientific when exposing
Theories?

Best regards,

Gus
 
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