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Showing 7 of 7 results by kripke
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Topic
Board Economics
Re: Alright, I got 50 Bitcents here.
by
kripke
on 24/04/2011, 22:15:13 UTC
Reminds me of the prisoners dilemma.
Post
Topic
Board Mining
Re: Bitcoin mining pointless?
by
kripke
on 24/04/2011, 16:47:37 UTC

The total energy consumed by the miners on the bitcoin network is probably less than two large semi-trucks (~350 kWatt) ... is it really such a huge burden on the environment considering the millions of trucks on the roads carting useless crap around for wasteful govt. projects?

Go pick on someone who's really fucking things up.

It's not just energy that's being wasted in theory, though; it's also computing power unnecessary to the core task of Bitcoin except that it has a predictable difficulty.

It would be nice if the mining process could incidentally cause some external benefit. If we were deciding between two scarce physical stores of value (say, gold and something else), and gold requires the mining process it does today whereas the alternative requires equivalent expense and involves equivalent scarcity but happens to reduce global warming or contribute to medical research, there would be little reason to choose the former.  (The only reasons would involve the purity of the object as a store of value without any incidental worth, but there's little reason in an efficient economy to believe that that matters in the long run.)

Thanks, this is exactly what I mean!
Post
Topic
Board Mining
Re: Bitcoin mining pointless?
by
kripke
on 24/04/2011, 12:32:15 UTC
I don't know precisely what proof of work entails but if it needs to be beefed up or elongated to slow down the rate at which btc is generated then surely the 'filler' could be some computation that is of greater general use? Like folding proteins or working out further digits of some transcendental number or something! Perhaps I can't see the wood for the trees but it seems extraordinary that wastage should be intentionally built into a system. I'm not picking on bitcoin in particular, just in general the idea that it is self-imposed perplexes me.
Basically, a very simplified way of looking at it is that you have to find a particular value of n such that f ( n ) returns a desired value (you nit-pickers in the back row keep quiet! I said this is simplified). The function f is designed in such a way that changing the value of n even the tiniest bit gives a completely unpredictable result; f( 1 ) might give 33929494, and f( 2 ) might give 4. So the only way to find the value of n that solves the problem is by brute force: try each possible value of n until you find one that works. The value of n that solves the problem is called the proof of work.

The function f and the value n have an important use in Bitcoin, so the solution is not just some pretty value that gets put on the fridge for a few days then quietly gets buried in the recycling bin.

Your idea of using 'useful' calculations to maintain the rate is interesting, but I'm not that it can be worked in. The problem has to fulfill two criteria. First, it has to be something that can be dynamically adjusted to compensate for more and more computers coming online to solve it. Second, the problem must be difficult to solve but easy to verify the solution, because every client will verify the solution at least once, if not several times. And, let's face it - we're dealing with money. A lot of people will be very motivated to claim they found a solution, so we must be able to check their claim quickly and easily.

'Useful' calculations could probably meet the first criterion by varying the number of folds, or the number of digits to solve, and so on.

With the current setup, finding the solution is very hard, but checking whether the solution is correct is, comparatively speaking, trivial. If someone says "Hey, the answer is 542214675," you don't have to try all the values from 1 through 542214674 - all you have to do is plug 542214675 into f and verify that the result meets the requirements. I'm not sure the same thing can be said about folding proteins, extending a transcendental number, and so on - I suspect you would have to duplicate the entire work effort to verify its legitimacy.

Surely after a while security of the network stops becoming an influencing factor. There reaches a threshold where you can clearly say 'the system is secure'. From what I can gather this is at some point where 50% or more of the computational power of the network is not within the control of a single user? I don't know where this point is, I'm sure this figure is completely wrong, but equally I'm sure the point was passed ages ago when bitcoin was in its infancy, when security was still a legitimate concern.

By this I mean, the security of the system increases as more and more user mine bitcoin but the advantage to security of having 100 million unique miners is, in truth, of no real difference to having just 1 million.

There is a point where improving security is pointless. After this point the energy expended by the surplus bit miners can be considered to be wasted if the function of mining is to check and secure the bitcoin network.

If more a more people became interested in bitcoin mining then the wasted energy will increase exponentially, especially if as I understand it, the difficulty of mining those bitcoins increases as the number of bitcoins tends to 21 million.

I'm not sure that protein folding can be dynamically varied in difficulty but I believe that it is possible to estimate how long it will take to complete the task to some degree of accuracy. Folding@home works by distributing work units to clients who then return the units to the server along with a digital signature. I'm guessing this doesn't work for something decentralised like bitcoin.

I don't claim to have a solution of how this surplus processing power could be better utilised, but at the moment it seems a tiny bit crazy that all those processor cycles are doing nothing more than solving puzzles of no consequence. The only purpose these processors serve is to actuate the bitcoin system. Something that could be done using far less energy as security, after a point, is not a concern.

That is what I mean about inefficiency as being a self-imposed feature of the way bitcoin is designed.
Post
Topic
Board Mining
Re: Bitcoin mining pointless?
by
kripke
on 24/04/2011, 03:59:47 UTC
and about inefficiency and wasted energy:

what amount of energy is wasted to produce the so called 'real money' ?
what amount of energy is wasted by all those security- and computer-systems that watch over the so called 'real money' and keep track of and allow transactions?
what amount of energy is wasted producing and driving around thousands of big armored trucks with armed guards to transport that so called 'real money' from Alice to Bob?

nothing real is produced by that huge amount of energy.
besides that you even pay your bank and government to waste it, how silly is that? Cheesy


the small amount of energy needed to keep the bitcoin-network going doesnt even get close to a fraction of that.

That is precisely the thing though, you would expect a great deal of energy to be wasted in the protection transfer etc of 'real money' but it does not follow or seem immediately obvious that the same should be the case for virtual money.

I definitely agree that the energy required by the bitcoin network is a fraction of that expended by banks etc and everything that involves. What I think is interesting however is whether the amount used by bitcoin is necessary. If bitcoin takes off and becomes more mainstream (which I think it definitely has the potential to do) this issue may become more relevant. As the number of bitcoins generated tends to 21m (or however much it is) and the difficulty increases (compounded by a larger, crowded user base of miners), who is to say what the global energy expenditure on bitcoin mining will be? C/GPU time - thus energy - appears essentially wasted when the computer is completing the task of 'hashing' or what not that has been made more difficult to complete as a method of curbing the production rate of btc.

I don't know precisely what proof of work entails but if it needs to be beefed up or elongated to slow down the rate at which btc is generated then surely the 'filler' could be some computation that is of greater general use? Like folding proteins or working out further digits of some transcendental number or something! Perhaps I can't see the wood for the trees but it seems extraordinary that wastage should be intentionally built into a system. I'm not picking on bitcoin in particular, just in general the idea that it is self-imposed perplexes me.

I'm no genius and have no answer as to how to complete the same task more efficiently, but supposing that raising the difficulty is necessary to stem the rate of btc generation then perhaps the 'filler' or whatever that makes the task more difficult could be replaced or interspersed with genome sequencing or protein folding or something?
Post
Topic
Board Mining
Re: Bitcoin mining pointless?
by
kripke
on 24/04/2011, 03:25:24 UTC
Pointless? Mining makes money...
Or are you trying to ask how do the coins themselves have worth, like how/where do the people you pay in coins get paid in cash?

No.
The correct answer is that the whole btc network relies on the proof of work made by all the participants, including the miners.
No mining, no bitcoin network.

So what of the difficulty of the task that the miners have to complete? This is artificially inflated for a particular reason fundamental to how the btc network works?

Difficulty is self adjusted by the network, to keep the block generation (and therefore the btc generation) at a regular pace.
But, as total hashrate capacity is bigger, the whole network is more secure, and less likely to be attacked.

So there is is an inefficiency then in that the difficulty is self-adjusted to restrain the rate of block generation? I can understand that proof of work and proof of time is necessary for the whole btc network to work but it seems that making the tasks of proof of work and time more difficult than the ought to be introduces a lot of potentially unnecessarily wasted energy.

If more and more people start mining and btc generation is to be kept constant then say the few dozen mega watts used presently to generate the bitcoins could multiply very rapidly. What I find hard to accept is that this is all self-imposed. Unlike gold mining where extracting ore is necessarily difficult, the generation of BTC is just contingently difficult.

You and BitcoinBonus have eloquently explained why btc network requires proof of work and time but I'm not sure if the way things are set up at the moment is the most efficient method of ensuring a consistent generation of bitcoins and fulfilling the role that mining has.
Post
Topic
Board Mining
Re: Bitcoin mining pointless?
by
kripke
on 24/04/2011, 03:01:47 UTC
Pointless? Mining makes money...
Or are you trying to ask how do the coins themselves have worth, like how/where do the people you pay in coins get paid in cash?

No.
The correct answer is that the whole btc network relies on the proof of work made by all the participants, including the miners.
No mining, no bitcoin network.

So what of the difficulty of the task that the miners have to complete? This is artificially inflated for a particular reason fundamental to how the btc network works?
Post
Topic
Board Mining
Bitcoin mining pointless?
by
kripke
on 24/04/2011, 02:49:34 UTC
I'm ill-informed and completely new to this so please forgive my impertinence.

From my very limited understanding of what Bitcoin mining involves my first impression is that it seems a colossal waste of energy.

My understanding is that a computer mines bitcoins by solving mathematical puzzles whose difficulty increases as time goes on. These puzzles are pointless in that they do not pertain to anything in the real world. Completing these puzzles does not achieve anything unlike something like Folding@Home or SETI.

Electricity is used to power computers to complete these puzzles. All of the overheads (energy, hardware, time, effort etc) are less than the price fetched by the resultant bitcoins so for some people it makes sense to devote their computer or server farm's time to mining them. This much is crystal clear.

It seems to me though that this is very strange exercise. Nothing real is being produced by the huge amount of electricity used to mine these bitcoins. Something virtual, certainly, but it seems odd that something virtual should have to have so much real tangible energy spent on it to imbue it with value.

I understand that there has to be some sort of labour process (machine rather than human in this case) for the Bitcoin to have any intrinsic value, but this does seem to be quite an energy inefficient way to go about it.

I think I have probably misunderstood something quite fundamental. I'm not trying to criticise this community but rather just understand exactly how this Bitcoin mining works and see what I've failed to understand.