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from the a-step-in-the-right-direction dept.
Submitted via IRC for Bytram
Ethereum Plans to Cut Its Absurd Energy Consumption by 99 Percent
Bitcoin soaks up most of the hype and the opprobrium heaped on cryptocurrencies, leaving its younger and smaller sibling Ethereum in the shadows. But Ethereum is anything but small. Its market capitalization was roughly US $10 billion at press time, and it has an equally whopping energy footprint.
Ethereum mining consumes a quarter to half of what Bitcoin mining does, but that still means that for most of 2018 it was using roughly as much electricity as Iceland. Indeed, the typical Ethereum transaction gobbles more power than an average U.S. household uses in a day.
"That's just a huge waste of resources, even if you don't believe that pollution and carbon dioxide are an issue. There are real consumers—real people—whose need for electricity is being displaced by this stuff," says Vitalik Buterin, the 24-year-old Russian-Canadian computer scientist who invented Ethereum when he was just 18.
Buterin plans to finally start undoing his brainchild's energy waste in 2019. This year Buterin, the Ethereum Foundation he cofounded, and the broader open-source movement advancing the cryptocurrency all plan to field-test a long-promised overhaul of Ethereum's code. If these developers are right, by the end of 2019 Ethereum's new code could complete transactions using just 1 percent of the energy consumed today.
[...] Ethereum's plan is to replace PoW with proof of stake (PoS)—an alternative mechanism for distributed consensus that was first applied to a cryptocurrency with the launch of Peercoin in 2012. Instead of millions of processors simultaneously processing the same transactions, PoS randomly picks one to do the job.
In PoS, the participants are called validators instead of miners, and the key is keeping them honest. PoS does this by requiring each validator to put up a stake—a pile of ether in Ethereum's case—as collateral. A bigger stake earns a validator proportionately more chances at a turn, but it also means that a validator caught cheating has lots to lose.
Moving to PoS will cut the energy consumed per Ethereum transaction more than a hundredfold, according to Buterin: "The PoW part is the one that's consuming these huge amounts of electricity. The blockchain transactions themselves are not super computationally intensive. It's just verifying digital signatures. It's not some kind of heavy 3D-matrix map or machine learning on gigabytes of data," he says.
(Score: 3, Interesting) by MichaelDavidCrawford on Thursday January 03 2019, @06:42AM (18 children)
My Bitmain AntMiner L3+ LiteCoin ASIC Rig costs me $50 per month in the hydropower-rich Pacific North-Left. It's 8.4 or maybe 8.6 cents per kilowatt hour.
It can mine roughly one LTC per month; at today's exchange rate of $32.64 that's a net loss of $17.64 per month. So why will I resume mining?
It's to support the continued existence of the cryptocurrency ecosystem: _every_ coin has suffered grievous losses in the last couple months. As the exchange rate steadily dropped, more and more miners removed their hashrate from the network total. For me personally this had the effect that the CoinFoundry LiteCoin Mining Pool's [coinfoundry.org] hashrate dropped from 35 TH/s to 5 TH/s.
What's particularly troubling to those who _don't_ mine is the dramatic loss of liquidity: one typically requires a six confirmation for _each_ transaction, which for some coins I expect by now could take a couple of days.
Without liquidity, trades cannot execute at the agreed-upon prices, as the exchange rate will change precipitously during the time required for those six confirmations.
This weekend or so, I'll write a Plain English Explanation [soggywizards.com] that will be accessible to most crypto traders to explain this problem and my proposed solution.
It happens that when I bought my Rig I was not yet aware that the prices of rigs closely tracks the exchange rates of the coins they mine. I bought my L3+ at the very height of the December 2017 bubble, along with an APW++ PICe power supply.
APW++: $140
L3+: $2050
Shipping: $150 (or so)
Today's price for the first two:
APW7: $95
Christ, they don't even sell the L3+ anymore, but they were having a fire sell of just $52! They even had an L3++ and some other kinds of coins that they supported, but in checking Bitmain's site they all look discontinued.
Yes I Have No Bananas. [gofundme.com]
(Score: 3, Informative) by coolgopher on Thursday January 03 2019, @07:39AM (2 children)
Uh, the network difficulty should adapt automatically to the available hashing power. Are there still coins out there which can't adjust down?
(Score: 1, Informative) by Anonymous Coward on Thursday January 03 2019, @09:39AM (1 child)
(Score: 2) by FatPhil on Thursday January 03 2019, @02:58PM
Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves
(Score: 0) by Anonymous Coward on Thursday January 03 2019, @09:23AM (8 children)
(Score: 2) by MichaelDavidCrawford on Thursday January 03 2019, @12:16PM (6 children)
Central Banks.
I don't clearly recall but I think it was Argentina's that dropped out of the SWIFT money transfer system then replaced it with BitCoin.
As well, there are lots of countries with highly dysfunctional currencies such as Venezuela; the locals buy crypto to prevent the loss of the values of their savings. In Greece there was a run on the banks which resulted in a daily withdrawal limit of USD $60, however one could still buy stuff online - so everyone bought bitcoin.
HOWEVER!
No one has yet answered my query as to how Cryptos will address the need to inject money into the economy in the event of recession or even depression. Consider that in 2001 at the start of the Dot-Com Crash then again in 2008 due to the Subprime Meltdown, vast quantities of Simoleons are pumped into all of G-d's Creation by the various central banks.
What Would BitCoin Do?
This will become a REAL problem and SOON, as steadily rising interest rates are biting the asses of heavily-leveraged corporations, auto and mortgage debtors with variable-rate secured loans as well as Millenials who are still living with Mom and Dad, delaying marriage, not having kids, never buying houses and with no concept as to how they might ever purchase their own homes.
Yes I Have No Bananas. [gofundme.com]
(Score: 3, Insightful) by bradley13 on Thursday January 03 2019, @12:36PM (1 child)
"No one has yet answered my query as to how Cryptos will address the need to inject money into the economy in the event of recession or even depression."
In the first place, it isn't at all clear that crypto-currencies have the responsibility for managing the economy.
More importantly, it is even less clear that "injecting money into the economy" is actually a good thing to do in the event of a recession. Governments to date have done a pretty terrible job of managing economic problems. Even after all this time, people still cannot agree on what monetary policies should have been during the Great Depression of the 1930s, nor whether the actions then taken were beneficial, harmful, or simply irrelevant.
The response since the 2008 crisis - mainly lowering interest rates and increasing deficit spending - have simply let countries to continue increasing their national debts, even though the crisis is past. Rising interest rates, which are coming to the US now, and to Europe in 2020, will massively increase the cost of debt service, which in turn will cause severe problems in the most indebted countries. So was the response to the 2008 crisis beneficial in the long term? Unlikely.
tl;dr: Injecting money into the economy is a hammer. The national banks think everything looks like a nail, because that hammer is is the only tool they have.
Everyone is somebody else's weirdo.
(Score: 2) by legont on Friday January 04 2019, @05:41AM
The alternative is not very pleasant. Money gets accumulated by very few persons and organizations and the economy halts because of deficit of money. At some point money is confiscated (usually with exterminating of the owners) and redistributed. It'd be OK, I guess, but with nuclear weapons might get real ugly.
"Wealth is the relentless enemy of understanding" - John Kenneth Galbraith.
(Score: 2, Informative) by johnlongjohnson on Thursday January 03 2019, @01:11PM
Not Bitcoin, I realize the news reports all said they dropped SWIFT in favor of Bitcoin but that wasn't accurate. It comes from the fact that for many people in latin america, Bitcoin and Cryptocurrency are synonymous in the same was that Xerox and photocopy are synonyms here.
What happened is that Santander, one of the major Latin American banks, bought the company behind Ripple and started getting banks onboard with it.
They then got legislation passed in Argentina to permit banks to dabble in crypto including XRP for the same things they would normally use SWIFT for.
If you go to any Santander ATM they already have all the hardware and software in place to handle XRP transactions. You as a customer can't use it yet, but you can see it sitting there.
(Score: 2, Insightful) by khallow on Thursday January 03 2019, @02:12PM (2 children)
That's a feature not a bug. There's no need to inject money into the economy. People holding money will eventually do it because they can buy so much with their money and the corrective deflation stops. If people had known ahead of time that "vast quantities of Simoleons" wouldn't be made available, I doubt they would have allowed either crash to get as far as it did before they started bailing.
(Score: 0) by Anonymous Coward on Thursday January 03 2019, @06:26PM (1 child)
> There's no need to inject money into the economy. People holding money will eventually do it ...
<sarcasm>Because this worked so well to smooth out the various currency crises in the robber baron (unregulated) era around 1900.</sarcasm>
(Score: 1) by khallow on Friday January 04 2019, @02:04AM
(Score: 2) by FatPhil on Thursday January 03 2019, @03:00PM
Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves
(Score: 0) by Anonymous Coward on Thursday January 03 2019, @10:31AM (2 children)
you don't have a responsibility to maintain the "cryptocurrency ecosystem". if it's so useful, someone else will pay for it.
Richard Stallman does not have a responsibility to maintain the EFF. I find it useful, I give money to EFF. Others like me do the same. Therefore EFF survives, because of us who believe it adds value to the world.
this cryptocurency shit? it only adds value to those who already have it. you can certainly make secure transactions without wasting electricity. hell, just associate credits to packages computed for folding@home, and you immediately get an objective measure of work, and the work is also useful.
(Score: 3, Insightful) by MichaelDavidCrawford on Thursday January 03 2019, @12:40PM
It's because cryptocurrency enables the disenfranchised to participate in the modern economy.
First let me point out that "CAN I HAZ BLOCKCHAYNZ?" as practiced by the traditional financial community is smoke-and-mirrors if not outright fraud:
Cryptocurrency as insightfully explained a while back on Medium "is an asset class that enables censorship-resistant applications". If there is a "Trusted Node" that must approve or reject transactions then such censorship-resistance is not enabled.
I should also point out that for one to have a duty does not even remotely imply that whatever one is trying to facilitate is worth anyone's money, time or even mindshare. How much did the Civil War cost? Surely if it were worthwhile to have freed the slaves, they could have just purchased them at the usual slave markets, followed by emancipating them.
No, that did not happen and what's more according to this page [wikipedia.org], the US Civil War took about 665,000 lives, of which about 450,000 were _not_ caused by combat - likely disease, malnutrition, exposure and the like.
But SURELY someone could have just _purchased_ the north's victory and spared all those wasted lives?
Yes I Have No Bananas. [gofundme.com]
(Score: 2) by mhajicek on Thursday January 03 2019, @03:24PM
That's called CureCoin.
The spacelike surfaces of time foliations can have a cusp at the surface of discontinuity. - P. Hajicek
(Score: 3, Interesting) by SunTzuWarmaster on Thursday January 03 2019, @03:41PM (1 child)
Viability is determined by your electric costs and value of heat.
I live in USA-FL, with solar panels. All heat produced in Florida is waste heat ;). I am grid-tied, so I pump into the grid and withdraw from the grid at will. That said, grid-pumped energy is only good for 12 months - any excess electricity in a 12 month period is considered to be "donated" to the power company.
At 11c/kWh with "all heat is waste heat", mining is foolish.
At "the power company considers the energy a donation", anything non-0 is profit ;).
A friend of mine lives in the frozen north, where "all heat is good heat" (heat produced by computer is heat that a heating system doesn't have to provide). For him, anything non-0 is profit for 9+ months of the year.
(Note that it is dramatically more cost effective to live in FL, as electric costs are in the $200 range before solar power kicks in, year round. A friend of mine in upstate NY has heating bills of $400.)
(Score: 2) by FatPhil on Saturday January 05 2019, @10:31AM
Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves
(Score: 0) by Anonymous Coward on Thursday January 03 2019, @03:43PM
We told you not to waste your money on that thing.