If you can read this, either the style sheet didn't load or you have an older browser that doesn't support style sheets. Try clearing your browser cache and refreshing the page.

(io9)   China expands from environmentally unsustainable coal and heavy metal mines into the modern age: environmentally unsustainable bitcoin mines   (io9.com) divider line 42
    More: Interesting, digital currency  
•       •       •

2145 clicks; posted to Main » on 14 Aug 2014 at 9:03 PM (6 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



42 Comments   (+0 »)
   
View Voting Results: Smartest and Funniest
 
2014-08-14 07:50:57 PM
i.imgur.com
 
2014-08-14 09:04:56 PM
At least bitcoins can't be contaminated with lead.
 
2014-08-14 09:11:29 PM
Collecting pretend money should come naturally to most of them at this point
 
2014-08-14 09:12:30 PM
China is going to be a boon to the GPU industry.
 
2014-08-14 09:13:23 PM
MMO goldfarmers and account hackers, bitcoin miners... I wonder how much of the Chinese economy is comprised of virtual things that neckbeards want?
 
2014-08-14 09:17:09 PM

Robin Williams' Still-Warm Body: Bitcoins are small and naturally suited to be harvested by children.


And so are organs from executed prisoners.
 
2014-08-14 09:17:36 PM

Fluid: China is going to be a boon to the GPU industry.


I'm looking at trying to save up for a slightly better gaming rig. I don't want anything screamin' fast, mind you. Just something I can run some games half-decently. But even older video cards seem to be $20-30 more than they ought to be, because cryptocurrency miners are driving up the prices.
 
2014-08-14 09:21:42 PM
"That even if someone wanted to bring down bitcoin, they'd have to outdo these guys and the dozens of other operations like this around the world.  "

The has the power to NSA read everyone's email and listen to their phone calls and Google is frigging Google. And that's only two players. If a single entity, public or private, wanted to crash bitcoin in terms of sheer computing power, I think they could probably out-do a few guys in an abandoned factory. No matter how much bigger their computer is than the one you keep in your mom's basement.
 
2014-08-14 09:22:07 PM

AlHarris31: MMO goldfarmers and account hackers, bitcoin miners....oh my

 
2014-08-14 09:23:30 PM
"The has the power to NSA read everyone's email"  = "The NSA has the power to read everyone's email"

don't know how it got so garbled... Or do I...
 
2014-08-14 09:27:15 PM
WTF are bitcoins?  They sound trendy as all hell and if I were to go all in on trying to become a bitcoinaire, I would probably find out they're worth about as much as a Zimbabwean dollar.
 
2014-08-14 09:30:21 PM
I feel as though I have no idea what a bitcoin is.

What the crap are these people doing?!

Have they figured out how to make money out of thin air?

This must be why there are million dollar bills in Idiocracy.
 
2014-08-14 09:33:43 PM

Gyrfalcon: At least bitcoins can't be contaminated with lead.


Shut the hell up! Don't give them any ideas!
 
2014-08-14 09:35:47 PM

Robin Williams' Still-Warm Body: Prey4reign: WTF are bitcoins?  They sound trendy as all hell and if I were to go all in on trying to become a bitcoinaire, I would probably find out they're worth about as much as a Zimbabwean dollar.

They're a fictional resource that exist and are mined by computer algorithms. They have no real world value except in their ability to bypass legal restrictions on currency transactions. Think of Bitcoins like gold or any other commodity, except a raw Bitcoin can't be used for any industrial use and its value is wholly irrational.


Plus the value fluctuates wildly, and it's not unheard of to have all of your bitcoins disappear for one reason or another.
 
2014-08-14 09:38:49 PM

poorjon: "That even if someone wanted to bring down bitcoin, they'd have to outdo these guys and the dozens of other operations like this around the world.  "

The has the power to NSA read everyone's email and listen to their phone calls and Google is frigging Google. And that's only two players. If a single entity, public or private, wanted to crash bitcoin in terms of sheer computing power, I think they could probably out-do a few guys in an abandoned factory. No matter how much bigger their computer is than the one you keep in your mom's basement.


Also didn't the FBI seize a bunch of bitcoins when they shut down silk road? Couldn't they just dump them all and crash the market if they wanted to?
 
2014-08-14 09:39:59 PM

Prey4reign: WTF are bitcoins?  They sound trendy as all hell and if I were to go all in on trying to become a bitcoinaire, I would probably find out they're worth about as much as a Zimbabwean dollar.


They're worth about 185043  Zimbabwean dollars which is worth about 384 euro which is worth about half an ounce of gold which is worth about 200 eggs.
 
433 [TotalFark]
2014-08-14 09:44:44 PM

Robin Williams' Still-Warm Body: They're a fictional resource that exist and are mined by computer algorithms


It's that last part that confuses me.
 
2014-08-14 09:45:10 PM
How many Bitcoins does it take to change a light bulb?

Thirty.  No, wait. Now it's 70. Wait. It went back down to 17. Okay, now it's 43.25...  Wait, wait...
 
2014-08-14 09:48:05 PM

433: Robin Williams' Still-Warm Body: They're a fictional resource that exist and are mined by computer algorithms

It's that last part that confuses me.


When people trade Buttcoins with one-another, there needs to be some sort of validation for that transaction. So people donate computer resources toward decrypting those transactions to prove them valid. As they do this, they're also decrypting chunks of Buttcoins (called "blocks"). When a chunk is successfully decrypted, the users are given a chunk of Buttcoins for their time and processing power.

Of course, if anyone could ever gain control of 51 percent of the mining power, they could just say Buttcoin transactions are valid / invalid whenever they please. It'd completely ruin the cryptocurrency market. But nobody would ever do such a thing, right?
 
2014-08-14 09:50:50 PM

AlHarris31: poorjon: "That even if someone wanted to bring down bitcoin, they'd have to outdo these guys and the dozens of other operations like this around the world.  "

The has the power to NSA read everyone's email and listen to their phone calls and Google is frigging Google. And that's only two players. If a single entity, public or private, wanted to crash bitcoin in terms of sheer computing power, I think they could probably out-do a few guys in an abandoned factory. No matter how much bigger their computer is than the one you keep in your mom's basement.

Also didn't the FBI seize a bunch of bitcoins when they shut down silk road? Couldn't they just dump them all and crash the market if they wanted to?


I think the FBI got about $20 million in the seizure, but that was near the height of their value and its probably halved by now. I'm not an economist, but I doubt the seized bitcoins would make a huge difference if reintroduced to the market because they were already on the market when the FBI got them and it was never clear that they would never again re-enter circulation. It would be like someone stealing a huge quantity of gold that was already accounted for by the market vs. someone suddenly discovering a gold nugget the size of the moon under their back yard. In the former case you know how much gold there is in the world and you can make assumptions about its value accordingly, but in the latter you don't know how much gold (or bitcoins) are going to come out of this and that's when people panic and do irrational things.
 
2014-08-14 09:55:11 PM

theguyyousaw: I feel as though I have no idea what a bitcoin is.

What the crap are these people doing?!

Have they figured out how to make money out of thin air?

This must be why there are million dollar bills in Idiocracy.


This is exactly how fractional reserve banking works, you know. You take out a loan, they're not loaning out money they have in the vault, they're sitting down at a computer and typing the amount into your account and effectively creating it out of nothing.

Yes, there is a formula that ties the funds loaned out/magicked up to some vague relationship with the funds on deposit, but then you realize that the amount of funds they're allowed to loan out is based on the amount deposited -- and the deposited funds were loaned out to somebody in the same way before that.

It's all smoke and mirrors at this point. At least with cryptocurrency the mining process (which validates transactions) prevents fudging the numbers.

Million dollar bills would actually be the ultimate result of the current fiat/fractional reserve system because it creates endless inflation.  Bitcoin has a max number of 21 million coins, so would tend to have the reverse effect of making your money more valuable over time, not less.

This video summarizes how banking actually works:

http://www.youtube.com/watch?v=3HdmA3vPbSU

(crappy animation, but good information)
 
2014-08-14 10:07:45 PM

pseudowho: theguyyousaw: I feel as though I have no idea what a bitcoin is.

What the crap are these people doing?!

Have they figured out how to make money out of thin air?

This must be why there are million dollar bills in Idiocracy.

This is exactly how fractional reserve banking works, you know. You take out a loan, they're not loaning out money they have in the vault, they're sitting down at a computer and typing the amount into your account and effectively creating it out of nothing.

Yes, there is a formula that ties the funds loaned out/magicked up to some vague relationship with the funds on deposit, but then you realize that the amount of funds they're allowed to loan out is based on the amount deposited -- and the deposited funds were loaned out to somebody in the same way before that.

It's all smoke and mirrors at this point. At least with cryptocurrency the mining process (which validates transactions) prevents fudging the numbers.

Million dollar bills would actually be the ultimate result of the current fiat/fractional reserve system because it creates endless inflation.  Bitcoin has a max number of 21 million coins, so would tend to have the reverse effect of making your money more valuable over time, not less.

This video summarizes how banking actually works:

http://www.youtube.com/watch?v=3HdmA3vPbSU

(crappy animation, but good information)


The trick is that, in order to pay off those loans, someone has to create some kind of good or service of actual value. The "virtual" dollars that are loaned out become real money when the loan is paid back, in much the same way that virtual particles become real if there's sufficient energy in the system.

Fractional reserve banking is basically a way of having the money supply adjust dynamically to the amount of stuff worth buying. It's not perfect, and it is potentially subject to manipulation (which is why the Fed needs a hell of a lot more oversight), but it beats a central bank trying to guess how much value is going to be created and printing just that much money, or using a physical commodity that can't be adjusted to the amount of value produced at all.

To dramatize the problems of the physical-currency approach, do you know what happened to Spain's economy when the ships sailed back from the New World with a bazillion tons of gold? The economy cratered in a massive deflationary spiral because there was suddenly a lot more money around and nothing to buy it with - a scenario that's been likened to breaking into a bank and stealing the deposit slips.
 
2014-08-14 10:14:58 PM
I'd like to point out to the subby that those bitcoin mines will sadly probably be powered by coal.

pseudowho: This is exactly how fractional reserve banking works, you know. You take out a loan, they're not loaning out money they have in the vault, they're sitting down at a computer and typing the amount into your account and effectively creating it out of nothing.

Yes, there is a formula that ties the funds loaned out/magicked up to some vague relationship with the funds on deposit, but then you realize that the amount of funds they're allowed to loan out is based on the amount deposited -- and the deposited funds were loaned out to somebody in the same way before that.

It's all smoke and mirrors at this point. At least with cryptocurrency the mining process (which validates transactions) prevents fudging the numbers.

Million dollar bills would actually be the ultimate result of the current fiat/fractional reserve system because it creates endless inflation.  Bitcoin has a max number of 21 million coins, so would tend to have the reverse effect of making your money more valuable over time, not less.


The problem with bitcoin is that when you compare it to a countries fiat currency you look at what keeps them stable-

Concern for the future reputation of the currency-
Any National Currency- Yes
Bitcoin- Yes

Adjustable supply to meet demand-
Any National Currency- Yes
Bitcoin- Only marginally

A group of people concerned about the value of the currency besides holders of the currency-
Any National Currency- Yes
Bitcoin- Nope.

The fact that the currency has a top maximum amount means that it's not good at adjusting to ups and downs in the business cycle, making it inherently more prone to boom and bust cycles.

The fact that there is no large group of people who ultimately depend on the value of bitcoin means that there is less backing than a fiat currency.  In theory, a fiat currency isn't backed, but in practice countries only create run away inflation under really epically bad circumstances (like economy busting war reparations).  There are people in the country who plan on remaining in the country and it is ultimately in their best interest to vote to keep the currency stable.  (Of course, whether they are smart enough to vote in their own best interest is up for debate, but if you see, compared with the sheer number of fiat currencies out there how few experience hyperinflation, well, it's a pretty small group.)  If Bitcoin goes bust there is no group that will bail it out.

The only threat that Bitcoin theoretically does better against is the country disappearing.  No one is going to invade Bitlandia.  Bitlandia isn't going to have a civil war.  Probably.  Maybe.  Of course, the chance of anyone invading the U.S. is pretty slim too.

On the flip side, compared to real gold, aside from being more portable Bitcoin doesn't have any advantages (except it's more price volatile which, if you manage to buy low is good) and has the distinct disadvantage of not being useful for anything other than buying other things.  There are lots of reputable places to buy and sell gold as a commodity though, and unless you are trying to stay under the tax radar those places are a better bet than Bitcoin, and if you are trying to stay under the radar, good luck with that.
 
2014-08-14 10:16:58 PM
Or what Mithiwithi said better.
 
2014-08-14 10:20:37 PM

HoratioGates: No one is going to invade Bitlandia.


Or not.
 
433 [TotalFark]
2014-08-14 10:22:17 PM

GreenAdder: When people trade Buttcoins with one-another, there needs to be some sort of validation for that transaction. So people donate computer resources toward decrypting those transactions to prove them valid. As they do this, they're also decrypting chunks of Buttcoins (called "blocks"). When a chunk is successfully decrypted, the users are given a chunk of Buttcoins for their time and processing power.


Thank you.  It still makes little sense to me, but I can at least understand the structure.  I appreciate the time you took to diagram it out in text.
 
2014-08-14 10:30:22 PM
I'd like to retract the bit of my previous comment about pointing out to the subby that Bitmining is probably using coal to power the machines.  After rereading the headline I notice they did, in fact, call it environmentally unsustainable.  My bad.

GreenAdder, yeah, that highlights another fundamental insecurity with bitcoin- since there is no 'there there' as it were, it's essentially a game that has created it's own rules and if someone can beat the system by gaming the rules it's basically over.  In the case of a national currency you still have the financial barrier of having to bribe all the public officials to collect your winnings!

Think about it, inequity in the U.S. ain't a great situation, but if someone stole all the money all at once there would be a mass uprising to take it back.  Well, maybe not a mass uprising, but someone would sure occupy something.  If someone games the bitcoin system, who do you rise up against?
 
2014-08-14 10:48:02 PM

HoratioGates: I'd like to retract the bit of my previous comment about pointing out to the subby that Bitmining is probably using coal to power the machines.  After rereading the headline I notice they did, in fact, call it environmentally unsustainable.  My bad.

GreenAdder, yeah, that highlights another fundamental insecurity with bitcoin- since there is no 'there there' as it were, it's essentially a game that has created it's own rules and if someone can beat the system by gaming the rules it's basically over.  In the case of a national currency you still have the financial barrier of having to bribe all the public officials to collect your winnings!

Think about it, inequity in the U.S. ain't a great situation, but if someone stole all the money all at once there would be a mass uprising to take it back.  Well, maybe not a mass uprising, but someone would sure occupy something.  If someone games the bitcoin system, who do you rise up against?


i.imgur.com
Apparently you go to Japan, wear layers and open your laptop. That'll show 'em!
 
2014-08-14 10:49:18 PM

Fluid: China is going to be a boon to the GPU industry.


Bitcoin miners gave up on GPUs a long time ago. It's all dedicated ASICs now, and even then you have to keep adding more computational power if you want to have a reasonable chance of finding blocks (since the Bitcoin algorithm dynamically ramps up the difficulty in order to maintain a constant rate of block discovery).
i.imgur.com
 
2014-08-14 10:49:26 PM
What would happen if you put a bitcoin in a Schrodinger's box?

/i know, But that's how my mind works. It's pretty distressing sometimes.
 
2014-08-14 10:59:48 PM
In case there's anyone here who actually wants to know why the invention of cryptocurrencies such as Bitcoin is interesting, it boils down to this. It solves the double-spend problem previously thought to be inherent in decentralized digital currency.

Since computer files almost by definition can be copied, if you pay me with data from your computer, how do I know you don't plan to keep a copy for yourself, and "spend" it again elsewhere?  If we agree to a central authority such as Paypal or a bank, that authority ensures there is no double spend. The cryptocurrency invention solves the problem without requiring any form of central authority.

It certainly remains to be seen whether Bitcoin will ultimately succeed, but it would seem that in one form or another, cryptocurrencies are here to stay for a while.
 
2014-08-14 11:08:22 PM

theguyyousaw: I feel as though I have no idea what a bitcoin is.

What the crap are these people doing?!

Have they figured out how to make money out of thin air?

This must be why there are million dollar bills in Idiocracy.


Do you remember Beanie Babies?
 
2014-08-14 11:29:27 PM

Belias: In case there's anyone here who actually wants to know why the invention of cryptocurrencies such as Bitcoin is interesting, it boils down to this. It solves the double-spend problem previously thought to be inherent in decentralized digital currency.

Since computer files almost by definition can be copied, if you pay me with data from your computer, how do I know you don't plan to keep a copy for yourself, and "spend" it again elsewhere?  If we agree to a central authority such as Paypal or a bank, that authority ensures there is no double spend. The cryptocurrency invention solves the problem without requiring any form of central authority.

It certainly remains to be seen whether Bitcoin will ultimately succeed, but it would seem that in one form or another, cryptocurrencies are here to stay for a while.



Cryptocurrencies are grossly inefficient.  Any attempt to scale them up will quickly reveal this.  Eventually they will all be abandoned, when this becomes understood.

Quick explanation of this: in order for the network to be decentralized, every single sever on the network must process every transaction.  This pointless duplication of effort makes them terribly inefficient.  In addition, and also in order for the network to be decentralized, every single server on the network must spend almost all of it's processing power doing the pointless hashing that is needed to outcompete all the other miners and win the block reward.  Which also makes the network terribly inefficient.

The only solution to the above is to change to a centralized network, which means it's no longer cryptocurrency.
 
2014-08-14 11:37:43 PM

HoratioGates: There are lots of reputable places to buy and sell gold as a commodity though, and unless you are trying to stay under the tax radar those places are a better bet than Bitcoin, and if you are trying to stay under the radar, good luck with that.


i141.photobucket.com
 
2014-08-15 12:09:31 AM
I felt this was necessary:

i.imgur.com
 
2014-08-15 12:16:09 AM
Huh... neat.
I guess.
So

....what happens when the power goes out?
Or when the interest fades?
What else can this computer do?
 
2014-08-15 12:53:39 AM
If the description in the article is accurate, wouldn't all those ASICs and fans use a crapload of electricity? Would they be able to mine bitcoins quickly and efficiently enough to offset the money spent on power, or are they leaching it off someone else somehow? And I thought I recall that bitcoins get harder and hard to mine as time goes on, so it certainly wouldn't remain sustainable forever even if it was at the moment.
 
2014-08-15 03:32:40 AM

2chris2: Belias: In case there's anyone here who actually wants to know why the invention of cryptocurrencies such as Bitcoin is interesting, it boils down to this. It solves the double-spend problem previously thought to be inherent in decentralized digital currency.

Since computer files almost by definition can be copied, if you pay me with data from your computer, how do I know you don't plan to keep a copy for yourself, and "spend" it again elsewhere?  If we agree to a central authority such as Paypal or a bank, that authority ensures there is no double spend. The cryptocurrency invention solves the problem without requiring any form of central authority.

It certainly remains to be seen whether Bitcoin will ultimately succeed, but it would seem that in one form or another, cryptocurrencies are here to stay for a while.


Cryptocurrencies are grossly inefficient.  Any attempt to scale them up will quickly reveal this.  Eventually they will all be abandoned, when this becomes understood.

Quick explanation of this: in order for the network to be decentralized, every single sever on the network must process every transaction.  This pointless duplication of effort makes them terribly inefficient.  In addition, and also in order for the network to be decentralized, every single server on the network must spend almost all of it's processing power doing the pointless hashing that is needed to outcompete all the other miners and win the block reward.  Which also makes the network terribly inefficient.

The only solution to the above is to change to a centralized network, which means it's no longer cryptocurrency.



You're correct in principle, but I'd like to suggest a few points. First, it's not resource intensive for a single computer (or even hundreds of thousands of computers) to verify transactions; that can all be done very easily, and only takes a handful of CPU cycles. Even with a million computers and a million transactions per day, the cost of verifying would be quite low. The really wasteful part is the mining, where each mining computer (and there are thousands of mining computers) will waste billions of cycles on invalid blocks.
There is quite a bit of data and bandwidth wastage that is done by sending all the transactions through the network, but that's an inherit part of the redundancy, and bandwidth wastage is quite a bit different than processor wastage.

The best solution to the problem of mining wastage. thus far, is the Proof Of Ownership altcoins, which don't really require mining IIRC - I've not studied their code, so I am by no means a decent source on those.

The wastage of mining will decrease over time as the block reward decreases, thus there will be less incentive to mine. No one expected the price of bitcoin to rise as fast as it did, and the mining wastage is an artifact of that rapid rise.
 
2014-08-15 03:41:18 AM

GreenAdder: Fluid: China is going to be a boon to the GPU industry.

I'm looking at trying to save up for a slightly better gaming rig. I don't want anything screamin' fast, mind you. Just something I can run some games half-decently. But even older video cards seem to be $20-30 more than they ought to be, because cryptocurrency miners are driving up the prices.


I got this bare bones ThinkServer back when it was $30 more at $280 and it was still a good deal. Stuck in an old Radeon HD at first but recently upped it to an R7 for $130.

So that plus $20 for a 24 to 14 pin PSU adapter plus $50 for a decent PSU came to $480 not including hard drive. For a machine that runs Bioshock Infinite, Arkham City, and Rome Total War 2 for example at 1080p at full detail. Can't speak to anything newer yet. There's deals to be had. Getting Prime at Student rates helps.

And I can always add a Haswell I-7 Chip later and chuck out the 4 Gigs of included ECC RAM for 16 of regular and add an SSD.
 
2014-08-15 05:27:10 AM
blogs-images.forbes.com
Dogecoin is worth 10's of millions. According to the internet. It's closer to 100 million than 20 million.
 
2014-08-15 08:46:01 AM

70Ford: [blogs-images.forbes.com image 640x394]
Dogecoin is worth 10's of millions. According to the internet. It's closer to 100 million than 20 million.


looks.... trustworthy.
 
2014-08-15 09:17:55 AM

2chris2: Cryptocurrencies are grossly inefficient.  Any attempt to scale them up will quickly reveal this.  Eventually they will all be abandoned, when this becomes understood.

Quick explanation of this: in order for the network to be decentralized, every single sever on the network must process every transaction.  This pointless duplication of effort makes them terribly inefficient.  In addition, and also in order for the network to be decentralized, every single server on the network must spend almost all of it's processing power doing the pointless hashing that is needed to outcompete all the other miners and win the block reward.  Which also makes the network terribly inefficient.

The only solution to the above is to change to a centralized network, which means it's no longer cryptocurrency.


Not all cryptocurrencies use hashing.  However, many do, so I will for now grant that they use an inordinate amount of processing power. There are better solutions and this is one reason that Bitcoin may not ultimately survive the test of time.  One minor point "every single server on the network must spend almost all of it's processing power doing the pointless hashing" is incorrect. Only miners do hashing. The vast majority of servers on the Bitcoin network do no mining whatsoever.

The issue of scale is largely irrelevant.  Scale won't be an issue for some time, unless we see a broad acceptance occur in the near future. In any event, the problem is well understood and several solutions are in the works.  The final solution (if one is ever needed) will likely be a mix of these. Potential methods to handle scale are in fact discussed in the original Bitcoin whitepaper.  Believe it or not, there are a bunch of incredibly smart folks working on Bitcoin.
 
Displayed 42 of 42 comments

View Voting Results: Smartest and Funniest


This thread is closed to new comments.

Continue Farking
Submit a Link »






Report