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Jack Dorsey claims Bluesky is 'repeating all the mistakes' he made at Twitter (www.engadget.com)
submitted 2 years ago by to c/technology@lemmy.world
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[–] 6 points 2 years ago (1 child)

You don't need to go crypto to get there though

You never do. Its only use case is a payment system for online crime. And even for that many criminals prefer gift cards because it's such a hassle to explain crypto-tokens to your victims.

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  • [–] 4 points 2 years ago (1 child)

    It's useful for anything online where cash would be useful. So paying for services, money transfers between acquaintances, donations to charity, etc. It turns out cash is useful for crime, and privacy-focused cryptocurrencies work like cash, hence are useful for crime.

    Don't buy it as an "investment" or sign up for services to earn it, but it is useful for non-criminal things.

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  • [–] -1 points 2 years ago (1 child)

    No, it's not useful as a cash substitute because of its hilarious inefficiency.

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  • [–] 2 points 2 years ago* (1 child)

    That's not necessarily a given. Ethereum, for example, transitioned to proof of stake instead of mining and seems to have reduced electricity use by 99.5%. I'm not exactly sure where that number comes from, nor do I know a good way to compare crypto to other systems (e.g. do we count all the energy used by banks?).

    But what I do know is that Bitcoin kinda sucks from an energy perspective, partially because they limit the number of blocks (e.g. buckets of transactions) per day, so mining is more valuable than on a currency with no such caps (e.g. more demand to mine each block = more miners = less efficiency per mined block).

    What seems to be true is that cryptocurrencies have a large upfront energy cost due to speculation, and that plateaus as it hits a certain carrying capacity. So crypto scales decently well, and if you do proof of stake instead of proof of work, it seems to scale even better.

    And then we get into the issue of where your energy is coming from. Since cryptocurrencies are global, they can be done anywhere energy is cheap. For example, daytime purchases can be done using excess energy in an area where it's night. For fiat, that energy use is more local, so you're more likely to process a transaction during peak energy use (afternoons), thus higher energy capacity needed. It's a really complicated topic, and I'd love for someone smarter than me to break it down.

    But since it's so hard to calculate, there's a lot of bad information, which leads to unnecessary and unfair criticism from people who don't see value in cryptocurrencies. If you ask a crypto bro, they'll point to the massive amount of power used by financial institutions, and if you ask someone who's against cryptocurrencies, they'll compare POS and minor processing use by credit card companies to an entire Bitcoin block (which has lots of transactions). I'd really like to see an updated, neutral look into it, because all the information I'm able to find has huge holes in methodology.

    But all of that is kind of irrelevant to the discussion about whether it's useful. If it's not useful, any amount of energy use is wasteful, but if it provides value, there's certainly an amount of energy we're willing to spend on it, so what exactly is that amount?

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  • [–] 2 points 2 years ago (1 child)

    Also Ethereum is extremely inefficient compared to conventional tech (like just a database). All you need is to realize that complete trustlessness is impossible to understand that a distributed ledger has no problem to solve. And that's why there is no practical application after all these years.

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  • [–] 1 point 2 years ago

    But energy use isn't as simple as measuring transaction efficiency, there's a lot more to a currency than storing who transacted with whom. There's:

    • security of transactions - fraud and whatnot
    • coordination costs - international transactions, etc
    • cyber security, websites for managing money, etc

    Or in terms you've used, someone needs to maintain that database, that database needs to be in some facility, and someone needs to audit the database. All of that is baked into cryptocurrencies. Yet the comparisons I've seen either account for way too much (e.g. bank tech support), or not enough (e.g. only POS and network costs).

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