CryptoCurrency in general - Mainly about DogeCoin

[tp4tissue]

I'll speak my mind here.
I do not mine DogeCoin for the profit. I mine it for the shear purpose of the community, while having the thought in the back of my head: "hey, I'm actually not wasting my time on this. It's possible that it'll be worth something some day, and while I'm doing it now, I'm not losing any cash".
Of course "nothing" useful is used for this, except acting as an easy way of tipping, and acting as a form of currency aswell.
Oh and by the way, people do far from ignore the fact that powerconsumption is greatly increased by mining. I believe the BitCoins trouble your mind with this. The "difficulty" as it is called, is simply too high, so there's no way you'll earn more than you spend.
As for newer cryptocurrencies, it's a whole other deal. You see, DogeCoin is actually the most "profitable" cryptocurrency right now. And yes, I actually tried it myself while measuring my kWh, and calculating the overall cost. It does make me a profit.
Remember: Don't get into mining the cryptocurrency only for profit, also do it of interest and curiosity.

 

I think you may be missing my point, which is that all that power is being used to do essentially nothing. The "difficulty" is decided by the current ability of miners to generate hashes which match the criteria. A valid encryption hash can be generated in milliseconds. There is no actually useful work done during mining, just a bunch of calculations whose results are discarded. It's a total waste of resources. Why can't the "proof of work" rather be something of real value instead?

It would be too difficult for them to combine it with folding@home I believe. They have to easily be able to adjust difficulty to adjust inflation, and folding@home is based around several entities computing the same calculations and compared against eachother to ensure validity. This would mean several people get the same coins etc. I am sure that such a currency would take of once someone is able to make it work.

"Curecoin" is attempting to get this off the ground in dialogue with folding@home developers.  Not sure how it will go, but the idea is indeed already being explored.

I'd be wary of the normative "waste of resources" argument.  For one, that's a critique that could be applied to the market system in general, or of privatized power utilities.
Is heating a multimillionaire's hottub 24/7 "useful" work if he paid for the electricity?

However, I would say there are ethically positive implications of the work being done.  I did a quick programming job for someone today and they were able to pay me instantaneously (in this case in LTC).  I bought my parents' Christmas present from Tealet using BTC, which is money that goes directly to fair trade tea producers without payment providers taking an extra cut.  I've invested in startups who view low power costs in economically-depressed areas as a business advantage, and are thus bringing new jobs to those places.

This value is directly derived from the computational work being done, but it's allowing people to connect and transact for services and resources they want in a more efficient manner than has yet been possible.

I could talk for hours about this stuff, but I'll leave it at that.

well the story is far from ending..

What you're describing is  an attempt to get rid of expensive middle men.... this is not feasible until humans evolve to be far less selfish..

The technology is already there to replace banks, middlemen, and debt based economies..

However,  HUMANS are not capable of handling such a life... 

WE are the problems... not the coins, not the machines, not the software.

[Oobly]

"Curecoin" is attempting to get this off the ground in dialogue with folding@home developers.  Not sure how it will go, but the idea is indeed already being explored.

I'd be wary of the normative "waste of resources" argument.  For one, that's a critique that could be applied to the market system in general, or of privatized power utilities.
Is heating a multimillionaire's hottub 24/7 "useful" work if he paid for the electricity?

...

This value is directly derived from the computational work being done, but it's allowing people to connect and transact for services and resources they want in a more efficient manner than has yet been possible.

I could talk for hours about this stuff, but I'll leave it at that.

Curecoin looks interesting. If I see an announcement from Stanford supporting it, it will be the one I pour some computing resources into.

You've simply proved my point that you think the computational work is creating something valuable. It isn't.

It creates a bunch of hashes. Any one of the created hashes are valid and could be used to secure the transactions being added to the chain. But they are discarded (by the billions) unless they match some arbitrarily derived "difficulty" criteria, in order to make it take a certain amount of processing as "proof of work". This just throws away billions of usable hashes for no good reason. It's using electricity and processing to do nothing in order to justify getting something from it. I don't deny the financial logic, but no matter how you view it, it is wasting real resources in order to create a virtual one that has no intrinsic value, only a speculated one.

With Curecoin, the resources are at least not wasted since the calculations are not thrown away, but used for some purpose that can ultimately help humanity.

It almost makes me physically ill to see how much power is being thrown away on this, when all around the world there is a push for low CO₂ emissions, energy efficiency and power saving. A large percentage of the power used (in the US) is created from coal burning plants. This not only pours out a bunch of CO₂, but also directly contributes to the amount of heat generated inside the atmosphere. At least let the power be used for something useful.

[tp4tissue]

"Curecoin" is attempting to get this off the ground in dialogue with folding@home developers.  Not sure how it will go, but the idea is indeed already being explored.

I'd be wary of the normative "waste of resources" argument.  For one, that's a critique that could be applied to the market system in general, or of privatized power utilities.
Is heating a multimillionaire's hottub 24/7 "useful" work if he paid for the electricity?

...

This value is directly derived from the computational work being done, but it's allowing people to connect and transact for services and resources they want in a more efficient manner than has yet been possible.

I could talk for hours about this stuff, but I'll leave it at that.

Curecoin looks interesting. If I see an announcement from Stanford supporting it, it will be the one I pour some computing resources into.

You've simply proved my point that you think the computational work is creating something valuable. It isn't.

It creates a bunch of hashes. Any one of the created hashes are valid and could be used to secure the transactions being added to the chain. But they are discarded (by the billions) unless they match some arbitrarily derived "difficulty" criteria, in order to make it take a certain amount of processing as "proof of work". This just throws away billions of usable hashes for no good reason. It's using electricity and processing to do nothing in order to justify getting something from it. I don't deny the financial logic, but no matter how you view it, it is wasting real resources in order to create a virtual one that has no intrinsic value, only a speculated one.

With Curecoin, the resources are at least not wasted since the calculations are not thrown away, but used for some purpose that can ultimately help humanity.

It almost makes me physically ill to see how much power is being thrown away on this, when all around the world there is a push for low CO₂ emissions, energy efficiency and power saving. A large percentage of the power used (in the US) is created from coal burning plants. This not only pours out a bunch of CO₂, but also directly contributes to the amount of heat generated inside the atmosphere. At least let the power be used for something useful.

Your ill-perception is unwarranted..

Look at it this way...  Without the pioneering "bit-coin"...  where would crypto-currency be..

NOTHING is ever wasted...  It is the cost of transition, the cost of new ideas...


I agree with you that, going forward... we can also improve upon the system by making the power do "other work"


BUT that does not change the inherent value of bit-coins bringing crypto currency into the limelight...


My point is... The part of you that's against BC is just you being a h8er..

The rational part of you is still rational, in that, yes we can always do things 1 step better...


Separate your emotions.. and look at it objectively.. and you should cease to be so emotional..

[Oobly]

Thanks for that analysis, RoboTP.

Lots of stuff is wasted. Any system that has less than 100% efficiency is "wasting" something. This system just happens to have close to 0% efficiency.

At a rough calculation for BitCoin, the current hash rate is around 10,000 Thash/s. There are 25 BitCoins issued per day.
Hashes per BitCoin:
= (network hash rate) / (25 BTC per 10 minutes)
= (10,000 * Th / s) / (25 * BTC / (600 * s) )
= 10,000 * 600 / 25 * Th / s / BTC * s
= 240,000 Th / BTC
= 240,000,000,000,000,000 h/BTC

So 239,999,999,999,999,999 valid hashes (which meet the cryptographic requirements and can be used to secure a transaction) are calculated and discarded for every one used. That's an efficiency of 4.1666' x10^-18. Statistically and practically 0.

My point is simply that all that calculation, all those CPU and GPU cycles and all that power should be used for SOMETHING.

I'm just saying that the difficulty associated with creating the currency is artificial and could be any arbitrary "work" as long as there is some valid way of proving that the "work" was done.

It doesn't have to have anything to do with the currency itself. It could even be, heaven forbid, REAL work that people do to create some product or service, but that's a bit hard to find proof for. It's the thing that should give currency it's real value (as in, "this is what I would give you for that thing").

[TacticalCoder]

but no matter how you view it, it is wasting real resources in order to create a virtual one that has no intrinsic value, only a speculated one.

There's some truth in what you write but I'll try to change your mind 

You're right that it is "using electricity". You're also right that there's lot of speculation around. But it is not for something that would have no intrinsic value.

Bitcoin allows to do several things that do each have intrisic value. I'll give a few examples.

Decentralized trusted timestamp have intrisic value. There are people putting cryptographic hashes in the blockchain, typically by using the SHA-256 of the file they want to prove existed a time t as the 256 bit integer defining the elliptic curve of their wallet (they then simply do a tiny transaction to one of the public address of that wallet). As long as we consider SHA-256 to be safe (but any other cryptographic has could be used instead), no government can ever contest that decentralized trusted timestamp: you can't seize server, you can't destroy the evidence. There are millions of copies of the blockchain in the world and should Bitcoin die tomorrow, those past timestamp would still be safe. That's the beauty of that decentralized "append-only" blockchain which has millions and millions of copies around the world.

For example:

http://www.proofofexistence.com/

Being able to send bitcoins from, say, Europe to Asia in a matter of minutes has intrisic values. Sure, it's ultra-volatile as of now due to speculation. But it doesn't change the fact that being able to send bitcoins across the whole world in a matter of minutes has intrinsic value.

Being unable to revert a transaction can pose several problems but it also has intrisic value. There are now startups out there like Bitpay and Coinbase ($25 m in VC funding) which allows merchants to accept payments in Bitcoin with much lower fees than other means of payments. Chargebacks on small transactions can kill a business. Transactions in Bitcoins are, by default, non-reversible (but of course you can still build, upon this, any scheme you want, like trusted 3rd parties holding bitcoins etc.) and I admit that this is a two-edged sword. But you can't deny that in many cases non-reversible transactions offer many benefits. Even "bank transfer", like SEPA transfers in Europe, can in some circumstances be reverted up until a few days after you got the money. This is a major problem.

By the way CoinBase / Bitpay do allow instant payments in Bitcoin but without being exposed to the risk inherent to price volatility: the merchants are paid in USD, at the USD price they want. Simply the bitcoins are immediately bought/sold at the current market rate.

You cannot say that being able to accept near-instant non-reversible payments from the entire world, directly converted in USD with much lower fees than traditional method, doesn't have lots of value. Just try the simulator here, under pricing (scrolling down a bit):

https://bitpay.com/pricing

The decentralized "append-only" blockchain may also permit other things which we haven't discovered yet.

Now regarding the ethical aspect and electricity consumption... Apparently this corresponds to powering 30 000 houses worldwide. I'd say this is not much on a planet which has, what, 8 billions people?

How do you feel about people collecting keyboards and keycaps which required oil to be produced? What about companies which are producing keycaps "just for fun" (like skulls / retro sets / etc.) and people driving to these factories? And the shipping costs and pollution associated with all the FedEx and USPS shipping of our stuff?  What's the "intrinsic value" of collecting retro keycaps sets? And the time when you're computer is on, spent on a forum about input devices when you could have your computer turned off instead and be meditating instead?

Should we begin to judge any behavior which is not strictly mandatory simply because it requires energy?

And what about the real environmental issues like the tens --if not hundreds of millions of homes-- having the air conditioning set on too low a temperature in too many rooms? Shouldn't we focus on these issues first?

I don't know how the Bitcoin experiment will end up but I see it as much more than something simply "wasting electricity".

And even if something even "more useful" comes up later, like, say, a protein folding cryptocurrency or primecoin or whatever, bitcoin will still be remembered as the one who showed the way.

[tp4tissue]

Thanks for that analysis, RoboTP.

Lots of stuff is wasted. Any system that has less than 100% efficiency is "wasting" something. This system just happens to have close to 0% efficiency.

At a rough calculation for BitCoin, the current hash rate is around 10,000 Thash/s. There are 25 BitCoins issued per day.
Hashes per BitCoin:
= (network hash rate) / (25 BTC per 10 minutes)
= (10,000 * Th / s) / (25 * BTC / (600 * s) )
= 10,000 * 600 / 25 * Th / s / BTC * s
= 240,000 Th / BTC
= 240,000,000,000,000,000 h/BTC

So 239,999,999,999,999,999 valid hashes (which meet the cryptographic requirements and can be used to secure a transaction) are calculated and discarded for every one used. That's an efficiency of 4.1666' x10^-18. Statistically and practically 0.

My point is simply that all that calculation, all those CPU and GPU cycles and all that power should be used for SOMETHING.

I'm just saying that the difficulty associated with creating the currency is artificial and could be any arbitrary "work" as long as there is some valid way of proving that the "work" was done.

It doesn't have to have anything to do with the currency itself. It could even be, heaven forbid, REAL work that people do to create some product or service, but that's a bit hard to find proof for. It's the thing that should give currency it's real value (as in, "this is what I would give you for that thing").

You're stuck on making the world a better place and an equal place. that is not how the debt based economy works..

We tried it your way in the past...  it created severe stagflation..

[MsYutai]

I was curious about cryptocurrencies (mainly because the lack of AMD cards that I wanted to buy) but once I found out about Dogecoin, I knew I had to get in on it.

Was lucky enough to get a hold of a R9 290 last week and been mining like crazy now! The most annoying part about mining is finding a pool which doesn't blow (I use dogehouse).

I'm not going to spend actual dollars buying Doge, but it is fun to come home from work and see more coins in my wallet. ^_^

Mainly I just wanna hold onto my coins and see if they explode in value like the Bitcoin did.... TO THE MOON!
My BF wants to use the coins to buy more GPUs to mine more coins though... lol.

[Hak Foo]

So 239,999,999,999,999,999 valid hashes (which meet the cryptographic requirements and can be used to secure a transaction) are calculated and discarded for every one used. That's an efficiency of 4.1666' x10^-18. Statistically and practically 0.

I wonder if it would be worthwhile to cache the hashes.... the problem is then, you're using mountains of space for hashes that will likely never be used.

[Oobly]

So 239,999,999,999,999,999 valid hashes (which meet the cryptographic requirements and can be used to secure a transaction) are calculated and discarded for every one used. That's an efficiency of 4.1666' x10^-18. Statistically and practically 0.

I wonder if it would be worthwhile to cache the hashes.... the problem is then, you're using mountains of space for hashes that will likely never be used.

That'd take a lot of space:

32 Bytes per hash = 7.6 x 10¹⁸ bytes per BitCoin generated.

Thats around 7 million terabytes.... That's how much data your PC generates in order to find one 32 byte hash that will actually be used. All of those are valid hashes, though. Any one of them could be used to secure the block and add transactions. They are rejected simply because the system needs to adjust the amount of work done per BitCoin so it only gives out 25 BitCoins per day.

There is no point in keeping rejected hashes anyway, unless the network hash rate goes down enough to lower the difficulty one unit. In that case, hashes with one less leading zero than the current difficulty may be worth keeping, since they would then become acceptable.

[TacticalCoder]

They are rejected simply because the system needs to adjust the amount of work done per BitCoin so it only gives out 25 BitCoins per day.

It's not per day. It's per block. On average a block should take about 10 minutes to be mined. And it's 25 BTC per block only for blocks numbers between 210 000 and 420 000.

[Oobly]

They are rejected simply because the system needs to adjust the amount of work done per BitCoin so it only gives out 25 BitCoins per day.

It's not per day. It's per block. On average a block should take about 10 minutes to be mined. And it's 25 BTC per block only for blocks numbers between 210 000 and 420 000.

Ah, yes. Sorry, got my numbers a bit wrong there. It's currently 25BTC per 10 minutes. I had it correct in my original calculation. Anyhow, the point remains the same. The hashes are rejected based on the difficulty and the difficulty is adjusted based on the current hash generation rate. The more popular mining becomes, the more wasted cycles and power are used to generate throwaway data, since the difficulty is pushed upwards.

A good, efficient system will generate 500GH/s, at about 500W usage. It would take roughly 500,000s for this system to generate a successful hash. That's about 140 hours of continuous use at 500W, around 69kWh. And it's only going to up as it becomes more popular.

At roughly 1kg carbon produced per kWh burning coal that's 69kg per block.

The carbon footprint is crazy and UNNECESSARY.

[TacticalCoder]

The carbon footprint is crazy and UNNECESSARY.

It's consuming about 0.05% of the U.S. household electricity supply. So worldwide it's consuming about 0.05% of what homes in the U.S. are consuming. That's not very much. If you keep only the miners in the U.S., you're at, what, 0.01% of the U.S. household electricity consumption!?

How "crazy" is that compared to the 99.99% making the rest of household electricity consumption? (and then there are cars, industries, etc.)

[damorgue]

They are rejected simply because the system needs to adjust the amount of work done per BitCoin so it only gives out 25 BitCoins per day.

It's not per day. It's per block. On average a block should take about 10 minutes to be mined. And it's 25 BTC per block only for blocks numbers between 210 000 and 420 000.

Ah, yes. Sorry, got my numbers a bit wrong there. It's currently 25BTC per 10 minutes. I had it correct in my original calculation. Anyhow, the point remains the same. The hashes are rejected based on the difficulty and the difficulty is adjusted based on the current hash generation rate. The more popular mining becomes, the more wasted cycles and power are used to generate throwaway data, since the difficulty is pushed upwards.

A good, efficient system will generate 500GH/s, at about 500W usage. It would take roughly 500,000s for this system to generate a successful hash. That's about 140 hours of continuous use at 500W, around 69kWh. And it's only going to up as it becomes more popular.

At roughly 1kg carbon produced per kWh burning coal that's 69kg per block.

The carbon footprint is crazy and UNNECESSARY.

Do note that in colder countries, it has ZERO footprint for half of the year since every Wh the computer converts to heat is one less Wh the elements have to use to heat the house. The net extra use of electricity is none during these months. I sometimes set my computer to render dummy scenes just to heat my apartment a bit in the past.

[Oobly]

Okay guys, I didn't mean to start an argument. Just wanted to make people more aware of an aspect that most either aren't aware of or ignore.

You can't deny that all that processing could (and should) be used for something better than generating mountains of useless data.

Curecoin gets it, hopefully more will. I was hoping at least GHers would notice the inefficiency and be far-sighted enough to see that it should be implented in a way that has less negative impact.

It's like working hard all day making something and then throwing it away. Every day. But who cares if you get paid anyway, right? Imagine if you could ALSO use or sell the things you make....

@damorgue, there are more efficient ways of generating heat.

[damorgue]

@damorgue, there are more efficient ways of generating heat.

Lol, nope, you are wrong about that one. You need to read up on your thermodynamics. It is 100% efficient, the same as other sources of heat. An extremely small fraction is turned into light and vibrations, which in turn is converted into heat. The rest is turned directly into heat. Every Wh into the PC is converted into heat.

[Oobly]

@damorgue, there are more efficient ways of generating heat.

Lol, nope, you are wrong about that one. You need to read up on your thermodynamics. It is 100% efficient, the same as other sources of heat. An extremely small fraction is turned into light and vibrations, which in turn is converted into heat. The rest is turned directly into heat. Every Wh into the PC is converted into heat.

Oops, my bad. Can't believe I missed that. You are absolutely correct, sir.

[Voixdelion]

This is a fascinating discussion - the kind of discussion that first impelled me to geekhack membership.  I love this place. 

I do not however, really understand the whole concept of cryptocurrency.  I don't get how it works at all.  However I do understand the debate here about whether the computations are being used towards a productive goal rather than just as a requisite for complexity.  I think the first part of answering that issue would be to list applications which require such elaborate computational power that could be merged with this task of mining.  Other than FaH, what are some other things that even NEED such resources to accomplish something? And how could such computational chores be delegated and tracked efficiently as evidence of this "work done".  Might it be as simple as sort of a way of direct exchange for computational power rather than volunteered computational power such as with FaH?   

(That is all If I understand the whole process correctly, which I am not sure I do... I rather feel a little bit on the cusp of this whole epiphany, something that I almost understand but not quite - kinda like when you speak a little Spanish and hear some Portuguese and ALMOST can grasp what is being said as some words sound very much the same, but are just different enough to make things unclear.  Like you get the emotion of the statement but not what it is about.  I get that same experience when I look at the physics theories my Grandfather used to have laminated on huge posterboards that had something to do with modeling quarks or quantum particles or something.., Lots of formulas that look like equations, but are actually some kind of physics shorthand that uses symbols I recognize but don't quite understand.)
   

[damorgue]

I do not however, really understand the whole concept of cryptocurrency.  I don't get how it works at all.  However I do understand the debate here about whether the computations are being used towards a productive goal rather than just as a requisite for complexity.  I think the first part of answering that issue would be to list applications which require such elaborate computational power that could be merged with this task of mining.  Other than FaH, what are some other things that even NEED such resources to accomplish something? And how could such computational chores be delegated and tracked efficiently as evidence of this "work done".  Might it be as simple as sort of a way of direct exchange for computational power rather than volunteered computational power such as with FaH?   

Although I would wholeheartedly support any attempts at using the computational power for anything useful, I don't think it is feasible. An entity has something which they can generate a hash from, and then everyone else attempt to generate that same hash but without having the original source of the hash, the nounce. Cryptocurrency is based on being able to verify the answer easily and someone has to be able to have the answers. If you intend to use the computations for something, you likely don't already know the answer. You'd have to know it for it to be useful for cryptocurrency, and then the computational power wouldn't useful any longer. In the case of F@H, they send the same calculation to several people and if a majority reaches a particular answer, then that is accepted as correct. I just don't see how the two systems could be made compatible with one another.

[Puddsy]

So as it would turn out, a buddy of mine traded all his dogecoin for hobo nickels. Why? Because if he's not gonna use it, he wants it to collect interest.

He traded 2.5 million doge for hobo nickels.

I'd like to see where this goes.

[Oobly]

I do not however, really understand the whole concept of cryptocurrency.  I don't get how it works at all.  However I do understand the debate here about whether the computations are being used towards a productive goal rather than just as a requisite for complexity.  I think the first part of answering that issue would be to list applications which require such elaborate computational power that could be merged with this task of mining.  Other than FaH, what are some other things that even NEED such resources to accomplish something? And how could such computational chores be delegated and tracked efficiently as evidence of this "work done".  Might it be as simple as sort of a way of direct exchange for computational power rather than volunteered computational power such as with FaH?   

Although I would wholeheartedly support any attempts at using the computational power for anything useful, I don't think it is feasible. An entity has something which they can generate a hash from, and then everyone else attempt to generate that same hash but without having the original source of the hash, the nounce. Cryptocurrency is based on being able to verify the answer easily and someone has to be able to have the answers. If you intend to use the computations for something, you likely don't already know the answer. You'd have to know it for it to be useful for cryptocurrency, and then the computational power wouldn't useful any longer. In the case of F@H, they send the same calculation to several people and if a majority reaches a particular answer, then that is accepted as correct. I just don't see how the two systems could be made compatible with one another.

At least with Bitcoin, that's not how it works.

You calculate a hash which meets the complexity criteria and then it gets verified as a valid hash. Validating a hash is far simpler than generating it (and generating valid hashes are very fast already). The complexity is adjusted to balance the number of valid hashes generated and accepted per day. In Bitcoin's case the complexity is governed by the required number of leading zeros in a calculated hash. The more leading zeros, the more difficult it is to calculate. All the hashes generated (irrespective of how many leading zeros they have) are valid from a cryptography point of view. The complexity is simply a way to control the coin generation rate.

Using F@H simply offloads the complexity from "having to generate a sufficiently complex hash with proof of work done" to a certain number of F@H blocks calculated. F@H has proof of work built in. All you need to do is add a single hash to the end of the calculations for encrypting the transaction block (which is trivial).

The "work" itself can be anything verifiable.

[paicrai]

I don't get this, regular money has worked just fine since like forever. After it was invented, that is.

[damorgue]

I don't get this, regular money has worked just fine since like forever. After it was invented, that is.

Trading livestock for tools worked just fine before then as well...

[paicrai]

I don't get this, regular money has worked just fine since like forever. After it was invented, that is.

Trading livestock for tools worked just fine before then as well...

It did. And when the world became more connected and **** they got what we consider normal money, which works just fine and probably will for ages.