Why exactly is Bitcoin clinging to PoW?

[Pmalek]

Let me clarify: I mentioned altcoins in the context that some of them are capable of being a tool for making Bitcoin transactions.

What exactly do you mean with this?

Regarding your statement about altcoins being better than bitcoin. As BlackHatCoiner, mentioned, it depends how you look at things and what features you consider when determining what is better. An altcoin that requires a transaction fee of a fraction of a cent is certainly better than if moving bitcoin requires 50 cents or a dollar. An altcoin with a block time of a second is better than bitcoin's 10 min average.

An altcoin whose transaction confirms in a few seconds but has no liquidity on exchanges and very little interest from the general public is not better than bitcoin. An altcoin whose value can rise 40% one day only to drop 60% the other is not better. A centralized altcoin whose transactions can be rolled back (as we saw with the Ethereum DAO hack) is not better than bitcoin because the interest of a few large investors are more important that the community. An altcoin that is quick and cheap, but has been 51% attacked with a few thousand dollars worth of investments is not better compared to bitcoin where you need millions of dollars to start and maintain the attack.   

[BlackHatCoiner]

An altcoin that requires a transaction fee of a fraction of a cent is certainly better than if moving bitcoin requires 50 cents or a dollar. An altcoin with a block time of a second is better than bitcoin's 10 min average.

Even this one requires further clarification. Will a same sized block be generated quicker? That'd mean that the block chain would then weight more and the decentralization would be harder to achieve. It'd also mean that there'd be more orphaned blocks and less network security. One second is around 0.016 minutes and thus, 6 blocks of a 10-minute interval chain would be equal with 3,750 blocks of a 1-second interval chain.

[zbig001]

Let me clarify: I mentioned altcoins in the context that some of them are capable of being a tool for making Bitcoin transactions.

What exactly do you mean with this?

Regarding your statement about altcoins being better than bitcoin. As BlackHatCoiner, mentioned, it depends how you look at things and what features you consider when determining what is better. An altcoin that requires a transaction fee of a fraction of a cent is certainly better than if moving bitcoin requires 50 cents or a dollar. An altcoin with a block time of a second is better than bitcoin's 10 min average.

An altcoin whose transaction confirms in a few seconds but has no liquidity on exchanges and very little interest from the general public is not better than bitcoin. An altcoin whose value can rise 40% one day only to drop 60% the other is not better. A centralized altcoin whose transactions can be rolled back (as we saw with the Ethereum DAO hack) is not better than bitcoin because the interest of a few large investors are more important that the community. An altcoin that is quick and cheap, but has been 51% attacked with a few thousand dollars worth of investments is not better compared to bitcoin where you need millions of dollars to start and maintain the attack.  

What a typical modern "altcoin" (designed to maximize scalability) really is?

I see a network (blockchain) which can have interesting applications, such as transactions with tokenized Bitcoin or tokenized fiat currency (stablecoins, CBDC).
But I do not see that such a network can directly constitute good money or currency.
Claims by the founders and members of the community of such projects that their product is money (finacial asset, store of value) "better" than Bitcoin, can be rejected even without getting into discussions, knowing that there is no escape from the blockchain trillemma .

For maximized scalability, they inevitably pay the price of losing decentralization or security, right?

So all the features we need from good quality money, reducing counterparty risk, are lost.

Do we understand each other well now?

[franky1]

technically. bitcoin is the most secure coin in existance from a brutforce energy requirement prospective.
all other coins cant even compete

socially:

I see a network (blockchain) which can have interesting applications, such as transactions with tokenized Bitcoin or tokenized fiat currency (stablecoins, CBDC).

they already have these pegged coins
liquid featurenetchain(allows different coins/assets):- exchange arbitrage utility
RSK sidechain
LN featurenet(allows different coins/assets):-consumer banknote utility

but yes. a bank note deemed as 'backed by gold' is still not gold. and we all know how bank note pegs of gold turned out post 1970

But I do not see that such a network can directly constitute good money or currency.
Claims by the founders and members of the community of such projects that their product is money (finacial asset, store of value) "better" than Bitcoin, can be rejected even without getting into discussions, knowing that there is no escape from the blockchain trillemma.

bitcoins underlying value is truly based on the fact that it costs thousands to mine bitcoin. much like gold takes over $1k to mine gold

if bitcoin/gold could be mined for under $1. its value would not be as high and its speculative market price above that would not be as high
(mine gold for the price of a dinner spoon and a coffee filter in ur own yard $1. speculative market $5)

once the big organisations start vault managing the peg-ins-outs of these feature/sidechains. then you will see the 1970's bank note/gold games at play in the cryptosphere.vault up btc. play with their tokens withdraw/swap to scamcoin 'coz withdrawal is cheap'

which is why im staying with bitcoin onchain transactions.. thanks

[zbig001]

once the big organisations start vault managing the peg-ins-outs of these feature/sidechains. then you will see the 1970's bank note/gold games at play in the cryptosphere.vault up btc. play with their tokens withdraw/swap to scamcoin 'coz withdrawal is cheap'

which is why im staying with bitcoin onchain transactions.. thanks

Literally, ANY technology for transferring monetary value other than directly on Bitcoin's L1 introduces trust or some other form of counterparty risk.

Therefore, keeping your life savings (or your company's financial reserves) other than directly in BTC would be either outright suicidal or at least asking for problems.
Outside the Bitcoin's ledger, send or hold only those funds that "you are willing to lose", one might say ironically...

But as the BTC adoption progresses, the need for additional layers will increase, I suppose.

The subject of how Bitcoin differs from gold is interesting (for me at least), but very deep. Since this is related to the problem of how the world's financial systems can adapt to the existence of Bitcoin, if it is possible.
So it would be a complete offtop.

[zeuner]

Energy might be another factor and important as well, so a less power hungry solution might be great

The PoW algorithm adapts itself to the globally invested computing power regularly. So it is always as power hungry as people are willing to invest electricity.

on the other side it could be very healthy to the renewables industry if all miners would be forced to use only green energy, since this would generate a significant amount of money flowing into those industries. But I don't see any technical way to really enforce that.

I don't see the need to enforce this technically. People acquire electricity through the existing economy. If it is wanted to have a larger fraction of green energy, a way to do so might be to tax energy from non-renewable sources.

[NotATether]

on the other side it could be very healthy to the renewables industry if all miners would be forced to use only green energy, since this would generate a significant amount of money flowing into those industries. But I don't see any technical way to really enforce that.

I don't see the need to enforce this technically. People acquire electricity through the existing economy. If it is wanted to have a larger fraction of green energy, a way to do so might be to tax energy from non-renewable sources.

I don't think such a green-energy requirement is going to work well in practice because it will put strain on renewable energy makers (because they are not big as coal/oil/gas companies) to make enough to meet the miners' demands, and this could cause a global renewable energy shortage as a result. That's going to stir up environmentalists even more against bitcoin, except this time they'll be able to squarely blame bitcoin because of whatever merged BIP mandated this switch.

[buwaytress]

once the big organisations start vault managing the peg-ins-outs of these feature/sidechains. then you will see the 1970's bank note/gold games at play in the cryptosphere.vault up btc. play with their tokens withdraw/swap to scamcoin 'coz withdrawal is cheap'

which is why im staying with bitcoin onchain transactions.. thanks

Literally, ANY technology for transferring monetary value other than directly on Bitcoin's L1 introduces trust or some other form of counterparty risk.

Therefore, keeping your life savings (or your company's financial reserves) other than directly in BTC would be either outright suicidal or at least asking for problems.
Outside the Bitcoin's ledger, send or hold only those funds that "you are willing to lose", one might say ironically...

This vault management thing is already a thing now too, caught sight of big recent announcements from Yearn, polka, others, all jumping on board each other to use Yearn's vault solution to manage all them sidechain and wrapped tokens "securely".

The fact also that many of these, when called out to explain their counterparty risks, aren't willing or able to, says a lot.

Only a big fall for these, catching out all those bitcoiners pegging in their coins, is the only way people might finally understand why Bitcoin is "clinging to PoW".

[Dabs]

Bitcoin mining is going to renewable energy on it's own, "naturally" or organically, simply because that's the general direction miners will take if they can't have "normal" power at a price they are willing to pay. Not including the thieves that steal electricity, that's a different issue.

Small miners will set up their equipment where ever convenient for them. Big miners will set up their equipment where electricity is cheap or no one else is using them or find a way to create electricity through renewable resources. Kinda like instead of going to the city, the city will come to them? It's been mentioned a few times in other places already so ... that line of thinking is out there.

[thecodebear]

First of all. I don't agree with MarsMan and I think what he is doing is straightforward market manipulation.

But one thing is o/c right in this whole mess. Proof of Work can't be Bitcoins destination. First of all one question is if it really still fulfills its function for decentralization. Is a system truly decentralized or distributed when there is already just a handful of groups that would just need to agree on common terms?

Energy might be another factor and important as well, so a less power hungry solution might be great, on the other side it could be very healthy to the renewables industry if all miners would be forced to use only green energy, since this would generate a significant amount of money flowing into those industries. But I don't see any technical way to really enforce that.

I am a long term user since Bitcoins inception, but I stopped following the development for some years now and hold most of my assets I bought for a few cents years ago and just do some trading from time to time. So I might be not up to date if there are efforts to move away from PoW. Can someone give me an update on this? If Bitcoin is not considering to move and evolve, what are your takes on this and why would one cling to much to PoW, just b/c of the hard fork it requires? Or are the alternatives still not mature enough?

Not sure why you think Bitcoin is "clinging" to PoW. PoW is not a bad thing. It is a rather uninformed take to think PoW is bad and something that must be moved away from. There only needs to be one proof of work chain, and Bitcoin is it.


PoW provides Bitcoin with global-level security.

It allows Bitcoin to be highly decentralized and have its security rooted in physical reality.

It separates the minters of coins from the owners of coins (for example, PoS is a "the rich get richer" system by making the holders be the minters of new coins, not saying that is bad or good, but Bitcoin separates the two which is a nice difference).

PoW also makes Bitcoin a literal energy-to-money conversion machine, and having a system that can directly convert energy into money is a very powerful economic tool, especially over the coming decades as the world works on moving to renewables. You don't enforce renewable usage, Bitcoin naturally encourages renewable energy production because it makes the spread of renewable energy more economically viable - I should say it makes energy production in general more viable, but as the world is trying to switch to renewables this naturally favors the spread of renewables.

So, no, there are no efforts to move Bitcoin away from PoW, because there is no desire to move Bitcoin away from PoW, because there is no need to move Bitcoin away from PoW. The only people who want to move Bitcoin away from PoW are the people who don't participate in the Bitcoin network in any way - which is to say nocoiners, because they don't get what Bitcoin is all about, so they don't understand PoW.

As you can see from the Ethereum upgrade, changing consensus mechanisms is a huge complicated undertaking, and Bitcoin is much more stable and moves much more slowly than any other blockchain because it is so important, so valuable, and it's value is partially reliant on it being so stable. So there is no need to put the Bitcoin network in potential harms way in order to do a very complicated and entirely unnecessary consensus change.

PoW is not a bad thing that Bitcoin clings to against rationality. PoW is a fundamental part of Bitcoin's power, security, value, and importance to society.

[Wind_FURY]

Bitcoin mining is going to renewable energy on it's own, "naturally" or organically, simply because that's the general direction miners will take if they can't have "normal" power at a price they are willing to pay. Not including the thieves that steal electricity, that's a different issue.

The “green transition” is also not only “about Bitcoin”, but mainly about how electricity is generated. Elon Musk criticizes that Bitcoin is not “green” enough, but if not given a choice, Bitcoin will be green, like if the world is not given a choice between fossil fuels and green alternatives.

[PrimeNumber7]

PoW also makes Bitcoin a literal energy-to-money conversion machine, and having a system that can directly convert energy into money is a very powerful economic tool, especially over the coming decades as the world works on moving to renewables. You don't enforce renewable usage, Bitcoin naturally encourages renewable energy production because it makes the spread of renewable energy more economically viable - I should say it makes energy production in general more viable, but as the world is trying to switch to renewables this naturally favors the spread of renewables.

I am not in favor of moving away from PoW, but this argument is nonsense.

PoW miners need more than electricity, they also need ASIC machines that require technical expertise to design and build. ASIC machines require specialized chips that are in scarce supply.

Even "renewable" energy costs money to generate via building the medium of "capturing" the energy, such as solar panels, or windmills.

Probably most importantly, someone who has a large excess of energy, "renewable" or otherwise, can sell said energy to consumers of energy, as electric utilities do today. People are willing to pay for electricity because they need it to power things such as their stove, oven, lights, air conditioning, computers, and other devices that require electricity to work.

[thecodebear]

PoW also makes Bitcoin a literal energy-to-money conversion machine, and having a system that can directly convert energy into money is a very powerful economic tool, especially over the coming decades as the world works on moving to renewables. You don't enforce renewable usage, Bitcoin naturally encourages renewable energy production because it makes the spread of renewable energy more economically viable - I should say it makes energy production in general more viable, but as the world is trying to switch to renewables this naturally favors the spread of renewables.

I am not in favor of moving away from PoW, but this argument is nonsense.

PoW miners need more than electricity, they also need ASIC machines that require technical expertise to design and build. ASIC machines require specialized chips that are in scarce supply.

Even "renewable" energy costs money to generate via building the medium of "capturing" the energy, such as solar panels, or windmills.

Probably most importantly, someone who has a large excess of energy, "renewable" or otherwise, can sell said energy to consumers of energy, as electric utilities do today. People are willing to pay for electricity because they need it to power things such as their stove, oven, lights, air conditioning, computers, and other devices that require electricity to work.

You didn't in any way invalidate my statement that you bolded. As I said, Bitcoin is an energy-to-money conversion machine. This feature makes Bitcoin profoundly important for spreading renewable energy production around the world. Not sure what you were trying to argue in your comment, but you weren't arguing against this fact of Bitcoin. Also I don't think you realize what "excess of energy" means - it specifically means there is no one to sell the energy to, which makes that statement by you, in fact, nonsense.

Bitcoin provides an economy for that excess of energy, it also allows energy to be produced in places where there is no energy demand at all, but perhaps there will be in the future. It also allows new ways to produce energy to become economically viable when they normally wouldn't be. It not only fixes the excess energy problem, but it allows for the growth of new energy all over, and the development of new energy producing technologies. PoW is a truly powerful feature of Bitcoin.

[NotATether]

~
It also allows new ways to produce energy to become economically viable when they normally wouldn't be.

Keep in mind this only applies exactly if the energy sources are large enough to generate enough power for making a decent amount of hashrate to bother with mining Bitcoin. Since Bitcoin's difficulty is huge, smaller energy sources could power the PoW of some altcoins like Bcash, Doge and LTC.

But otherwise what you said is largely correct.

[TangentC]

Also I don't think you realize what "excess of energy" means - it specifically means there is no one to sell the energy to,

I think most bitcoiners don't realize that when heat waves or subzero temps arrive, their is NO EXCESS ENERGY!

https://news.trust.org/item/20210616152609-rkr1c

Searing heat across the U.S. Southwest and soaring electricity demand for air conditioners this week are prompting grid operators in
Texas and California to warn consumers about energy conservation to avoid outages.

Which is why Proof of Waste is so dangerous , wasting energy when a power grid is maxed out ,
at best creates rolling blackouts,
at worst crashes a power grid and destroys the transformers,
Once that happens and a major grid is down for ~2 years to repair all those blown transformers,
expect bitcoin PoW mining to be permabanned around the world.

Not a question of if, it has become a question of how soon especially for Texas.

https://www.texastribune.org/2021/02/18/texas-power-outages-ercot/

Texas was "seconds and minutes" away from catastrophic months long blackouts, officials say

https://www.nasdaq.com/articles/how-texas-is-becoming-a-mecca-for-bitcoin-miners-2021-05-04

How Texas Is Becoming A Mecca For Bitcoin Miners

[Dabs]

Also I don't think you realize what "excess of energy" means - it specifically means there is no one to sell the energy to,

I think most bitcoiners don't realize that when heat waves or subzero temps arrive, their is NO EXCESS ENERGY!

When there is a source of power far enough away that there are no people ... and no easy way to deliver that energy to the rest of the people ... I think that's what they mean. If you are talking about cities, then of course, there are people there and energy requirements and all the energy is used by that city and the price of energy will be too high for any miner so the miner will move their equipment away from the higher priced energy and go to a lower priced energy.

expect bitcoin PoW mining to be permabanned around the world.

I actually don't see that happening ever. Or maybe I am just blind and can't see it. What I see is more renewable sources of energy appear around the world whereever they are. And how does one ban mining? Oh, you mean, like China maybe? When you have a bunch of people with 1 device in their home mining ... it's going to be difficult to ban that.

[Wind_FURY]

Also I don't think you realize what "excess of energy" means - it specifically means there is no one to sell the energy to,

I think most bitcoiners don't realize that when heat waves or subzero temps arrive, their is NO EXCESS ENERGY!

https://news.trust.org/item/20210616152609-rkr1c

Searing heat across the U.S. Southwest and soaring electricity demand for air conditioners this week are prompting grid operators in
Texas and California to warn consumers about energy conservation to avoid outages.

Which is why Proof of Waste is so dangerous , wasting energy when a power grid is maxed out ,
at best creates rolling blackouts,
at worst crashes a power grid and destroys the transformers,
Once that happens and a major grid is down for ~2 years to repair all those blown transformers,
expect bitcoin PoW mining to be permabanned around the world.

Not a question of if, it has become a question of how soon especially for Texas.

https://www.texastribune.org/2021/02/18/texas-power-outages-ercot/

Texas was "seconds and minutes" away from catastrophic months long blackouts, officials say

https://www.nasdaq.com/articles/how-texas-is-becoming-a-mecca-for-bitcoin-miners-2021-05-04

How Texas Is Becoming A Mecca For Bitcoin Miners

Genuine question, wouldn’t large mining farms avoid regions where electricity is in high demand, and therefore have higher electricity rates, making it unprofitable for mining? Plus electricity generated is only “wasted” if there’s a surplus and the surplus isn’t used.

[TangentC]

Genuine question, wouldn’t large mining farms avoid regions where electricity is in high demand, and therefore have higher electricity rates, making it unprofitable for mining? Plus electricity generated is only “wasted” if there’s a surplus and the surplus isn’t used.

Excess Energy is never wasted, that is a myth.
Texas energy rate prices are lower than average, which is why miners are flocking there.

Most Power Grids are interconnected, they have to maintain a % of power to keep their grid stable,
when their usage is lower, they sell the so called excess energy to the other grids. (Their is No wasted energy.)
So their is no massive amount of excess energy in the grid system.

[PrimeNumber7]

PoW also makes Bitcoin a literal energy-to-money conversion machine, and having a system that can directly convert energy into money is a very powerful economic tool, especially over the coming decades as the world works on moving to renewables. You don't enforce renewable usage, Bitcoin naturally encourages renewable energy production because it makes the spread of renewable energy more economically viable - I should say it makes energy production in general more viable, but as the world is trying to switch to renewables this naturally favors the spread of renewables.

I am not in favor of moving away from PoW, but this argument is nonsense.

PoW miners need more than electricity, they also need ASIC machines that require technical expertise to design and build. ASIC machines require specialized chips that are in scarce supply.

Even "renewable" energy costs money to generate via building the medium of "capturing" the energy, such as solar panels, or windmills.

Probably most importantly, someone who has a large excess of energy, "renewable" or otherwise, can sell said energy to consumers of energy, as electric utilities do today. People are willing to pay for electricity because they need it to power things such as their stove, oven, lights, air conditioning, computers, and other devices that require electricity to work.

You didn't in any way invalidate my statement that you bolded. As I said, Bitcoin is an energy-to-money conversion machine. This feature makes Bitcoin profoundly important for spreading renewable energy production around the world. Not sure what you were trying to argue in your comment, but you weren't arguing against this fact of Bitcoin. Also I don't think you realize what "excess of energy" means - it specifically means there is no one to sell the energy to, which makes that statement by you, in fact, nonsense.

Bitcoin is about as much an "energy-to-money" machine as a toaster is a "energy-to-toast" machine.

Someone who is mining bitcoin is not going to wait and only use "excess" electricity, they are going to do their best to get "priority" access to electricity. As bitcoin miners become more efficient, current ASICs will generate less revenue, so it is important for miners to have as close to 100% uptime as they can.

Bitcoin provides an economy for that excess of energy, it also allows energy to be produced in places where there is no energy demand at all, but perhaps there will be in the future. It also allows new ways to produce energy to become economically viable when they normally wouldn't be. It not only fixes the excess energy problem, but it allows for the growth of new energy all over, and the development of new energy producing technologies. PoW is a truly powerful feature of Bitcoin.

There is already a source of near-unlimited, cheap electricity available. It is called nuclear power.

PoW is going to consume cheap electricity today. If there is a means to produce electricity that is expensive today, but might be cheap tomorrow, PoW is not going to consume that electricity until it is cheap.

[Wind_FURY]

Genuine question, wouldn’t large mining farms avoid regions where electricity is in high demand, and therefore have higher electricity rates, making it unprofitable for mining? Plus electricity generated is only “wasted” if there’s a surplus and the surplus isn’t used.

Excess Energy is never wasted, that is a myth.
Texas energy rate prices are lower than average, which is why miners are flocking there.

Most Power Grids are interconnected, they have to maintain a % of power to keep their grid stable,
when their usage is lower, they sell the so called excess energy to the other grids. (Their is No wasted energy.)
So their is no massive amount of excess energy in the grid system.

But in regions with low demand for electricity, don’t the power stations regulate the output themselves, which could lower profit? Wouldn’t industrial POW miners be welcome consumers for those power stations because it makes them generate the output to their capacity? I don’t know why some people believe this is bad. It’s simply commerce.