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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: 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