Oddbean new post about | logout
▲ ▼
04ca88e9 | 1 years ago (raw) | root | parent | reply | flag 
 @7d199f28 I'm thinking more along the lines of the "traditional" transactions. At each point of interaction, power is involved. We're far from "all paper and coin" days.

I'm not putting crypto on a pedestal, but as someone who handled retail setups - there's a lot of power used behind the scenes. All people see is a register.

On a different level, I do like that old power resources are being updated and put back online. People think hydro has to be big. Not so.
▲ ▼
Fabio Manganiello | 1 years ago (raw) | root | parent | reply | flag 
 @bca3d3cb Yes, there is definitely waste involved at every step in any economic system. But there's a big difference between the waste involved in the traditional paper-and-coin (or even "traditional digital") economy and that of the crypto economy (at least for the coins still based on PoW).

Outside of the crypto world, the "waste" is a byproduct of the economic exercise that creates friction and should be minimized.

An inefficient service that sucks up a lot of CPU and RAM thrown in the middle of the banking circuit would be seen as a problem. It would result in a slower throughput for the processed transactions, overloaded systems that may require frequent maintenance, loss of service, high bills from the server farm, etc.

In the PoW crypto world, instead, it is a *feature*.

Bitcoin, as of now, can't work without nodes that spend 100% of their CPU brute-forcing hashes. That's because it relies on a delicate balance of algorithmic throughput and supply control, distributed consensus and physical time required to crack numeric puzzles in order to work.

Waste and friction are required for the system to work, the same way that an electric stove requires a big fat and electrically inefficient resistive unit that sucks up a lot of energy in order to turn in into a lot of heat.

This difference between waste-as-waste and waste-as-a-feature is important to understand which models can scale and which ones can't.