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So my latest toot/birdsite posts might make you think I’m against the concept of cryptocurrencies in general. I’m not. For the same reason I don’t hold a grudge against Merkle trees, DAGs, or public-key cryptography.
What I am against is Proof of Work (PoW) – used in Bitcoin, Ethereum, etc. – which constitutes an unconscionable, unsustainable, and deliberate waste of energy. PoW is not a requirement for cryptocurrencies. For a more sustainable implementation, for example, see Nano.
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(That said, I still find it INCREDIBLY difficult to get excited about money beyond it being a necessity today as a means of being able to exist so you can work on things that actually matter. The latter, I might add, does not equate in my book to “things that make money.”)
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@aral good points. Just as a note, while Bitcoin will probably not change and stay as a “digital gold”, while Etherium is working on different layers to make it more efficient. PoS,sharding, etc. I am not expert in this, but Eth is constantly working on the initial idea to make a general purpose decentralized computer that everyone can build apps on top. It’s definitely not efficient yet, but it keeps getting better.
@aral I'd add another dimension, which is the democratic problem of a digital equivalent of the gold standard.
When the government cannot spend money into existence, it becomes a giant "household" with all the "how will you pay for it" included - and thus beholden to the wealthy.
With fiat money, the people can still use the money system to organize, even if the oligarchs hoard most of it.
@aral Similarly, I'm agnostic towards cryptocurrencies. There have been many white papers and some implementations, but so far I've not seen anything practical which isn't just a damaging speculation scam empowering already rich people.
A practical cryptocurrency must not waste electricity and must be useable in the real economy for directly purchasing everyday commodities, like bread, without intermediaries like banks or money exchanges.
@aral
Unfortunately you can't really do decentralized issuance without PoW.
In the case of Nano: "Nano utilized a novel CAPTCHA faucet system..." so somebody had to run that CAPTCHA server, and they're basically saying "trust me that I didn't create billions of fictitious someone-solved-the-captcha events and gave all the coins to myself".
What we're talking about here is basically a token, and tokens can be super powerful if issued by a community, but they're not decentralized.
@aral
To elaborate a little bit on that last point, suppose instead of issuing tokens to people who solve CAPTCHAS, you can issue them to people who volunteer in the local community, for example "plant 1 tree, get 1 tree-token".
In this way, a community can incentivise whatever it considers important and that's a very powerful way to make that thing happen.
But corruption is a thing, and if you've ever had the privilege of dealing with local politics then you might just prefer PoW...
@lain @aral
I don't entirely agree with this perspective. If you're not doing decentralized issuance then PoS is pretty efficient because the return you need to offer on staking is quite low because it's a guaranteed return.
Now guaranteed ROI is corrosive because it pulls investment away from the real economy AND allows proliferation of the Idle Rich.
But if that guaranteed ROI is really low then it's not a big deal.
The real problem for non-PoW systems is decentralized issuance.
> it pulls investment away from the real economy
that's the waste in PoS. If you have a good decentralized issuance, the waste will equal the PoW waste for the same chain to give the same amount of trust. (although it might look less because serverfarms heating up asics is a very physical thing and 'interest rates going up because of locked up capital' is more ethereal).
@lain @aral
It's a good idea what they're aiming for, my critique is that ETH plays a bit fast and loose with the social contract.
There's a lot of "we're not doing that anymore, now we're going to do this" and it's hard to really pin down what ETH is, if not "whatever the ETH foundation wants it to be today"...