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Author Topic: Why didn't satoshi use PoW for something else?  (Read 526 times)
cellard
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October 17, 2018, 02:03:01 PM
Merited by ETFbitcoin (1)
 #1

What I mean is, something similar to what these guys are doing in Foldincoin, Gridcoin, etc:

https://www.foldingcoin.net/
https://gridcoin.us/
http://www.trnicely.net/dense/dense1.html

There are many critics of Bitcoin that argue how "Bitcoin's PoW wastes too much energy". I can easily refute that by pointing to how it secures your bitcoins being safe. However, what if we also had hashes being solved that were relevant in other contexts (see examples provided). We could make multiple points of the hashrate usage.

Did satoshi avoid this in purpose to avoid possible game theoretical incentive problems so he made it strict bitcoin without side use cases?
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October 17, 2018, 03:09:33 PM
 #2

No one know why (unless i don't know that he state it in past), but i think reason you mentioned is likely.

If i had to guess, possible reasons are :
1. Easier implementation
2. Ensure decentralization. In FoldingCoin & GridCoin, i can't see how miners obtain required data to do scientific computation in decentralized manner. At best, i only can thought developer/foundation share hash of required data with specific starting block height (by make transaction about it) and miners obtain it through IPFS.
3. Reduce block header size
4. Faster block verification

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October 17, 2018, 04:05:03 PM
Merited by Carlton Banks (5), Foxpup (2), dbshck (2), bones261 (2), ETFbitcoin (1)
 #3

There are many critics of Bitcoin that argue how "Bitcoin's PoW wastes too much energy".

Such claims are always made by people with hidden agendas or no knowledge at all.

The whole bitcoin network is using a 'huge' amount of energy, yes. But it covers world wide money transfers.
The banking sector does consume WAY more energy. And the money is WAY less secured.

The security behind bitcoins PoW is the key element. And this argument can't be beaten.

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October 17, 2018, 04:13:12 PM
 #4

Did satoshi avoid this in purpose to avoid possible game theoretical incentive problems so he made it strict bitcoin without side use cases?

Yes. The only thing keeping Bitcoin together are properly aligned incentives.
As seen in the covert asicboost scandal, the smallest misalignment can wreck chaos.

woot?
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October 18, 2018, 08:23:39 AM
Last edit: October 18, 2018, 08:38:23 AM by odolvlobo
Merited by Foxpup (4), Carlton Banks (4), suchmoon (4), DarkStar_ (2), ETFbitcoin (1), HeRetiK (1)
 #5

What I mean is, something similar to what these guys are doing in Foldincoin, Gridcoin, etc:

https://www.foldingcoin.net/
https://gridcoin.us/
http://www.trnicely.net/dense/dense1.html

There are many critics of Bitcoin that argue how "Bitcoin's PoW wastes too much energy". I can easily refute that by pointing to how it secures your bitcoins being safe. However, what if we also had hashes being solved that were relevant in other contexts (see examples provided). We could make multiple points of the hashrate usage.

Did satoshi avoid this in purpose to avoid possible game theoretical incentive problems so he made it strict bitcoin without side use cases?

The energy used in PoW must be "wasted".

Because of the difficulty adjustment and the economic incentives, the equilibrium cost of PoW approaches the value of the block reward. Even if the result of PoW is useful, then the cost of the "wasted" PoW will still approach the value of the block reward. So, nothing is accomplished by making the PoW generate something useful.

Let me demonstrate by example:

Suppose a hash rate of 1 exahash per block costs 1 BTC in energy costs and earns 1 BTC per block on average. In this case, 1 BTC worth of energy is "wasted".

Now suppose that a use for hashes is found and 1 exahash can be sold for 0.5 BTC. We can now say that only 0.5 BTC worth of energy is "wasted". Not so fast. Mining costs 1 BTC per block, but now earns 1.5 BTC so miners will certainly increase their capacity in order to make more money.

In this scenario, miners will double their hash rate on average. Note that the difficulty will also double because the total hash rate has doubled.

Now, 2 exahash per block costs 2 BTC, but it earns 1 BTC per block plus the hashes sell for 1 BTC. As you can see, we are back where we started where 1 BTC worth of energy is "wasted", even though mining also generates something with value.

In case you were wondering, the case where hashes initially sell for more than the value of the block reward also gives the same results, assuming a normal demand curve.

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October 18, 2018, 05:00:40 PM
 #6

Satoshi didn't think bitcoin mining would take up this much power.  He probably expected it to be more of a home mining thing instead of being on an industrial level.

either way we need to get serious about limiting energy usage because the Earth is in imminent danger because of climate change! We don't have much time left before humanity is doomed.
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October 18, 2018, 05:07:00 PM
 #7

I once heard Andreas Antonopoulos saying that PoW is like staking energy.

PoW is like betting energy that this block has valid transactions. So PoW, the way designed by satoshi, would work like a staking of energy, which is something that has value in the world, outside the blockchain.


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October 18, 2018, 06:11:50 PM
 #8

There are many critics of Bitcoin that argue how "Bitcoin's PoW wastes too much energy".

Such claims are always made by people with hidden agendas or no knowledge at all.

I think there is a consensus that maintaining the Bitcoin network is wasting too much energy, and such criticism comes often from people who don't have a hidden agenda and are well-disposed towards Bitcoin.
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October 19, 2018, 06:00:24 PM
 #9

Satoshi didn't think bitcoin mining would take up this much power.  He probably expected it to be more of a home mining thing instead of being on an industrial level.

I suspect he did. He predicted industrial level operations handling the jobs nodes do which I presume by extension would extend to mining - https://bitcointalk.org/index.php?topic=532.msg6306#msg6306

But I doubt if him or anyone else could've predicted how rapidly mining would develop into the beast it has become.

The energy = security thing makes sense until you calculate how much energy one transaction consumes at which point it becomes gross however you want to frame it. Yup, banking probably uses more. It also serves tens or hundreds or thousands of times more people, businesses and transactions.

Once there's a ton of users that becomes increasingly moot but for now it's not a good look IMO.





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October 20, 2018, 05:54:37 AM
 #10

I think there is a consensus that maintaining the Bitcoin network is wasting too much energy, and such criticism comes often from people who don't have a hidden agenda and are well-disposed towards Bitcoin.

No, definitely not.

The energy is not 'wasted'. It is needed to secure the whole network.

I don't understand why people think it wastes 'too much energy'. It is just a small small fraction of what the banking sector needs.

Also, how should the network be secured if the energy wouldn't be 'wasted' to secure it ?

Sure, we could easily shrink the energy consumption / hashrate to 1/10th of the current. But this would also mean that the network is 10 times less secured against an attacker.
And this also means that 10 confirmations then are worth as much as 1 confirmation is worth now..

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October 20, 2018, 10:37:57 AM
 #11

I think there is a consensus that maintaining the Bitcoin network is wasting too much energy, and such criticism comes often from people who don't have a hidden agenda and are well-disposed towards Bitcoin.

No, definitely not.

The energy is not 'wasted'. It is needed to secure the whole network.

I don't understand why people think it wastes 'too much energy'. It is just a small small fraction of what the banking sector needs.

Also, how should the network be secured if the energy wouldn't be 'wasted' to secure it ?

Sure, we could easily shrink the energy consumption / hashrate to 1/10th of the current. But this would also mean that the network is 10 times less secured against an attacker.
And this also means that 10 confirmations then are worth as much as 1 confirmation is worth now..

Climate change is very real and we need to cut our energy use wherever we can.  Bitcoin is still old technology, I'm sure new cryptos will be created in the future that are more secure and use up less energy.
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October 20, 2018, 12:08:21 PM
Last edit: October 20, 2018, 12:28:36 PM by Carlton Banks
Merited by Foxpup (2), ETFbitcoin (1)
 #12

Because of the difficulty adjustment and the economic incentives, the equilibrium cost of PoW approaches the value of the block reward. Even if the result of PoW is useful, then the cost of the "wasted" PoW will still approach the value of the block reward. So, nothing is accomplished by making the PoW generate something useful.

Right. Is using Bitcoin useful? If you agree, then mining a Bitcoin is useful. If it's useful, and uses resources (all useful things do), then you can put a price on it. It just so happens to put a price on itself, and pretty efficiently too.

If you don't understand Bitcoin's usefulness, you're not likely to appreciate how or why the network functions. If you've got criticisms, but don't understand what it's for or why it works the way it does, it's difficult to know how to help the person who feels that way.


Climate change is very real and we need to cut our energy use wherever we can.

Climate change is real, but energy use doesn't affect climate change significantly, there's no evidence for it.


The energy = security thing makes sense until you calculate how much energy one transaction consumes at which point it becomes gross however you want to frame it.

That's thoroughly idiotic.

The energy consumed to mine a block is only used to create new BTC supply, it has nothing to do with the transactions in the block. A miner uses the same amount of energy irrespective of how many transactions they include in the block. A block with 0 transactions uses the same amount of electricity as a block with 3000 transactions.

To put it another way: if energy used = amount of transactions, why is it that the more energy the Bitcoin miners use, that the maximum amount of transactions stays exactly the same? There is no relationship between transactions and energy, that's why

Vires in numeris
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October 20, 2018, 12:15:50 PM
 #13

What I mean is, something similar to what these guys are doing in Foldincoin, Gridcoin, etc:

https://www.foldingcoin.net/
https://gridcoin.us/
http://www.trnicely.net/dense/dense1.html

There are many critics of Bitcoin that argue how "Bitcoin's PoW wastes too much energy". I can easily refute that by pointing to how it secures your bitcoins being safe. However, what if we also had hashes being solved that were relevant in other contexts (see examples provided). We could make multiple points of the hashrate usage.

Did satoshi avoid this in purpose to avoid possible game theoretical incentive problems so he made it strict bitcoin without side use cases?

Bitcoin's PoW is easy to reason about, which makes it easier to analyze it from game-theoretic point of view. "Useful" calculations add a big amount of complexity and often require some sort of centralization. This makes them unsuitable for being used in consensus algorithms for big networks like Bitcoin, where security requirements are very tight.

This question is very common, so you can find a lot of information about it if you do some digging:

https://bitcoin.stackexchange.com/questions/20879/why-cant-we-design-a-bitcoin-that-does-useful-work

https://bitcoin.stackexchange.com/questions/331/is-there-a-way-to-set-up-proof-of-work-systems-so-they-would-be-even-more-useful

http://www.truthcoin.info/blog/pow-cheapest/

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October 20, 2018, 12:32:08 PM
 #14

Bitcoin's PoW is easy to reason about, which makes it easier to analyze it from game-theoretic point of view. "Useful" calculations add a big amount of complexity and often require some sort of centralization. This makes them unsuitable for being used in consensus algorithms for big networks like Bitcoin, where security requirements are very tight.

This question is very common, so you can find a lot of information about it if you do some digging:

https://bitcoin.stackexchange.com/questions/20879/why-cant-we-design-a-bitcoin-that-does-useful-work

https://bitcoin.stackexchange.com/questions/331/is-there-a-way-to-set-up-proof-of-work-systems-so-they-would-be-even-more-useful

http://www.truthcoin.info/blog/pow-cheapest/

Right. If you don't understand that Bitcoin just being Bitcoin is a useful result of mining, then you have stuff to learn about.

Vires in numeris
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October 22, 2018, 07:38:23 AM
 #15

OP Satoshi had a ground-breaking "distributed timestamp server implementation on a peer to peer basis" in mind, not to help donating CPU cycles.

Plus if we are talking about "wasting electricity", Bitcoin gives us the freedom to transact, the freedom to use or not to use intermediaries, the freedom to keep your wealth in a sovereign manner without coercion. I believe freedom must come at a cost, no?


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October 22, 2018, 04:49:24 PM
 #16

Is it only me or everyone miss OP's point? OP clearly knows that electricity used for PoW isn't wasted and used to secure Bitcoin network (such as block, transaction, OP_RETURN data, etc.), but to make PoW even more useful.

While complex things such as biology/chemistry fields is difficult to achieve due to required research data and slow verification, AFAIK other fields including mathematics and physics such as PI, prime numbers, pythagorean triple, etc. is possible and verification time should be far faster.
It's useful for many fields including cryptography which Bitcoin uses.

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October 22, 2018, 06:17:03 PM
Merited by ETFbitcoin (1), vit05 (1)
 #17

Is it only me or everyone miss OP's point? OP clearly knows that electricity used for PoW isn't wasted and used to secure Bitcoin network (such as block, transaction, OP_RETURN data, etc.), but to make PoW even more useful.

While complex things such as biology/chemistry fields is difficult to achieve due to required research data and slow verification, AFAIK other fields including mathematics and physics such as PI, prime numbers, pythagorean triple, etc. is possible and verification time should be far faster.
It's useful for many fields including cryptography which Bitcoin uses.

Because it's kinda like trying to utilize the heat of your CPU to brew some coffee - you are adding new complexity and risks to the system that are simply not worth the benefit. SHA256 mining is secure and easy to reason about, other systems, especially those like boinc and folding are not. Devs are working very hard to keep Bitcoin free from bugs and attacks, and introducing some novel consensus algorithm would be against that.

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October 23, 2018, 07:31:43 AM
 #18

Is it only me or everyone miss OP's point? OP clearly knows that electricity used for PoW isn't wasted and used to secure Bitcoin network (such as block, transaction, OP_RETURN data, etc.), but to make PoW even more useful.

No. What would be more useful than solving the "Byzantine General's problem"? Satoshi knew he had a ground-breaking answer to the problem that past cryptographers, mathematicians, and computer scientists tried to solve.

Is donating CPU cycles in BOINC more secure than Bitcoins's POW? I believe "making mining it more useful" would be the very last thing Satoshi had in mind.

Quote
While complex things such as biology/chemistry fields is difficult to achieve due to required research data and slow verification, AFAIK other fields including mathematics and physics such as PI, prime numbers, pythagorean triple, etc. is possible and verification time should be far faster.
It's useful for many fields including cryptography which Bitcoin uses.

There was Primecoin.


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October 23, 2018, 07:35:47 AM
Merited by bones261 (2)
 #19

There are many critics of Bitcoin that argue how "Bitcoin's PoW wastes too much energy".
What exactly do they mean by wastage of energy? Energy is wasted only when nothing is gained from them. Generated Energy from Solar, Wind, Water and other renewable means is used in the form of providing entertainment and to fulfill our basic needs. You pay for the electricity you use and it is being used in some form or the other. Renewable resources are always replaced and would never likely end. On an average, it would cost around $3000 - $5000 to mine one bitcoin. If the miner sell them, they would get a profit of around 1.5x - 2x they have spent in the form of electricity and at the current trading price of 1 Btc.

The energy consumed by the ASIC's are used for generating money and for securing the decentralized payment system all around the world. Miners doesn't waste the energy rather they use these energy to generate money. Wasting is something which is used carelessly or for no purpose to anyone.

When mining is being done, the ASIC's generate a lot of heat. This heat energy can be re-used and can be converted into an energy. Intense Heat Generated form these ASIC's can be used for many practical applications. I have even read somewhere in the past that, Denmark and Germany paid it's citizens to use their electricity as they were high on renewable electricity production.

Quote
Why didn't satoshi use PoS or other energy efficient mining algorithms?
PoS and other energy efficient mining process apart from PoW are created to reduce the usage of energy in the process of mining the blocks. This would make the miners take little to no efforts in mining apart from staking coins. Mining a #1000 block and #100000 block will literally have the same difficulty. Some algorithms similar to PoS will favour old miners and whales rather than a miner having the potential and equipment to mine the block. This also makes some to stop trading and use their coins for staking to earn profits.

 
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October 23, 2018, 09:32:31 AM
Last edit: October 23, 2018, 09:43:41 AM by ETFbitcoin
 #20

Because it's kinda like trying to utilize the heat of your CPU to brew some coffee - you are adding new complexity and risks to the system that are simply not worth the benefit. SHA256 mining is secure and easy to reason about, other systems, especially those like boinc and folding are not. Devs are working very hard to keep Bitcoin free from bugs and attacks, and introducing some novel consensus algorithm would be against that.

I can't argue against that, less complexity which leads to less bug/attack vector is more valuable than generate research data, but risk the network.

Is donating CPU cycles in BOINC more secure than Bitcoins's POW? I believe "making mining it more useful" would be the very last thing Satoshi had in mind.

No and i already mention it. But my point is, there must be way to achieve it without much security trade-off.

Quote
While complex things such as biology/chemistry fields is difficult to achieve due to required research data and slow verification, AFAIK other fields including mathematics and physics such as PI, prime numbers, pythagorean triple, etc. is possible and verification time should be far faster.
It's useful for many fields including cryptography which Bitcoin uses.

There was Primecoin.

Gonna check that later

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