Thanks. Inducing people to spend exponentially greater resources and effort to create value based on redoing math problems over and over that don’t add any more to knowledge seems meaningless. At least with mining gold you end up with gold. Why not create value by solving something like a real protein folding problem or an equivalent task? It seems to me the only real thing of value now is using Blockchain technology to do meaningful record keeping for the real world.
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This has meaning for some folks.
I’m not a programmer, but I would assume that it’s because that would be a lot more complex to implement.
Pretty much this. Also Lambos.
To be fair, it’s still a relatively new concept, maybe one day they will figure out how to put that compute power towards something more “meaningful” than filling one’s pockets, but blockchain tech is so closely associated with currency that it will take some time before the cartoon dollar signs fade from people’s eyes.
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Thanks. I’ve already started to note discussion on the implementation of Blockchain technology for many things such as complex energy related or financial transactions quite apart from any crypto currency considerations. So it seems to me the real gold here ultimately is the Blockchain concept as a transaction ledger.
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Here is an example;
I’ll take a crack at it. Someone with actual experience feel free to chip in or make clarifications.
The cryptocurrency mining process is essentially validating transactions on the bitcoin network. Transactions use encryption keys as proof of authenticity; the mining network uses a big public file called the ledger to validate that a transaction inserted into it was from whoever claims to have sent it. This can be done without the originator disclosing their entire encryption key due to the nature of public key encryption. Miners are incentivized to contribute to the network because periodically a number of coins are spontaneously created by the network as part of the protocol and distributed via a lottery-like system with odds of receiving a coin proportional to the amount of work your mining pool has contributed during that period. In many currencies there is a difficulty curve baked into the protocol that effectively reduces the net reward per unit of work, which is why bitcoin went from CPUs to GPUs to ASICs for mining.
I’m pretty skeptical that the cryptocurrencies presently in existence are going to have legs for much longer. Bitcoin is famously inefficient. While the energy cost of producing a single coin might not be figures north of 200kWH as news sources were quoting late last year, it is hilariously inefficient relative to any other payment-processing system. All the features that make it a techno-libertarian fantasy (no regulation! no controlling authority! anonymity! works outside of conventional finance! John Galt!) make it a nightmare for most payment-settling uses. It’s notable that cryptocurrencies are used quite rarely for payments (I’m only personally aware of one online retailer that takes it) and are pretty much speculation-driven.
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