Exactly. I still find the „proof of work“ a total waste of computational energy. I mean I believe I understand why it’s required, but it just seems like such a waste. Someone please correct me if I talk jiberish.
PoW is not like leaving the tap on. It's a deliberate use of energy with incentives that attempt to provide a benefit. That is a censorship resistant monetary base and payment network.
When you say you find it a waste, you are either saying:
a) There is a less resource intensive way of doing bitcoin
b) That the claimed benefits are not true or you don't value it
(a) has had plenty of tries without success.
In case of (b), you don't have to participate, it's an entirely voluntary system. There are plenty of energy use cases around the world which don't benefit everyone.
c) That the environmental impact is too high. We need to stimulate people to not use Bitcoin if we want to lower the environmental impact. The amount of transactions where Bitcoin is both legal and necessary is very low.
Your argument is essentially (a) and (b) combined. That you don't find it valuable (however you choose to define "necessary") and you envision that the environmental impact could be lower and still provide the same function.
"Essentially", no. A and B are your own fabricated strawman arguments.
You say "you don't find valuable". Its not just me. People, in general, don't find cryptocurrency valuable. Nothing backs them up, and besides that you cannot widely use them in the clearnet/sneakernet.
What happened is it hasn't replaced the default currencies such as USD and EUR. Its been mainly adopted by criminals/crooks (e.g. drugs trafficking), tax evaders, people who live in banana republics (hyperinflation), speculators, and a bunch of libertarians/preppers.
So next time you say "you don't find it valuable", please realize you're talking to the vast majority of honest, casual people in the world. Of the above mentioned groups, the _only_ group I have respect for using cryptocurrency, is the people who live in banana republics (such as Venezuela).
This concern usually stems from the idea that the energy used by the Bitcoin network could be otherwise used for more productive functions. But if, like many, you believe that bitcoin can succeed in becoming a decentralized world currency, the reality is that there may be no greater, more important use of energy than to secure the integrity of a monetary network which coordinates economic activity at a global level.
I highly recommend this piece (which I'm paraphrasing here) if you're interested in the topic:
Ever since working in a finance company myself, I've realised that existing finance basically is doing proof of work. It's very hard to put my finger on it and come up with a coherent thesis, but so much of what they do is utterly pointless, yet somehow necessary. Take a walk through the City and you'll see grand buildings, but there's nothing going on in them. It's all just an illusion. The company I worked for had drones in call centres in out of town business parks in other parts of the country. The people working in the city were engaged in just completely wasting their time. We could also see into the Swiss Re building from up there. Nobody was inside. It was practically empty every day (this was before lockdown).
But yet it all seems necessary to build trust. Is it proof of work?
"... I mean I believe I understand why it’s required". if you do understand why it is required, then you must understand the game theory incentives underpinning modern economics and the disaster in wasted productivity, wasted savings, livelihoods bought on by centralised monetary systems. You can think proof of work as the cost paid to eliminate all that and save money. If you think you can solve that problem (Decentralised trust) non-trivially without proof-of-work you are welcome to try.
it is more than wishful, it is pragmatic, as all attempts before it were shut down by very powerful forces. The purpose of PoW is to create anti-fragile, unstoppable signals using opportunity costs. How society decides to dictate those costs is up to them. Very cool.
Crypto enthusiasts have been trying to create alternative to fiat currencies. Search for “digital gold”. But they all suffer from having to trust an entity which eventually leads them to be shutdown by the governments .
Building a decentralised trust mechanism which can be used over the internet has been a hard problem till POW.
What about the skyscrapers that finance companies build and the workers that burn fossil fuels to commute to them every day to spend their time doing basically nothing? Is that a waste of energy too?
