[HN Gopher] "Proof-of-work" proves not to work for spam preventi...
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       "Proof-of-work" proves not to work for spam prevention (2004) [pdf]
        
       Author : bravogamma
       Score  : 50 points
       Date   : 2021-11-13 16:04 UTC (6 hours ago)
        
 (HTM) web link (www.cl.cam.ac.uk)
 (TXT) w3m dump (www.cl.cam.ac.uk)
        
       | max_ wrote:
       | Alot of sentiment today thinks proof of work is a waste of
       | energy, but I assert that it can solve a lot more problems beyond
       | its use for "Nakamoto Consensus".
       | 
       | I don't think anything else can solve decentralized rate limiting
       | more effectively than proof of work.
       | 
       | I wrote a short blog post about the use of Proof of work beyond
       | crypto mining [0]
       | 
       | [0] https://as1ndu.xyz/2019/11/proof-of-work-on-layer-two/
        
         | jacoblambda wrote:
         | You may be interested in this paper:
         | 
         | https://eprint.iacr.org/2021/1379
         | 
         | It provides a Proof-of-Useful-Work algorithm that is resistant
         | to pre-computation and most other weaknesses that would
         | otherwise prevent useful work from being done while achieving
         | Nakamoto Consensus while at the same time managing to convert
         | ~50% of the computation spent into useful work. Additionally
         | the work being done is pretty generally useful and is
         | applicable to a lot of different problems.
         | 
         | I think the space is starting to reach a point of academic
         | maturity and formalisation of the tech stack such that we can
         | start meaningfully trying to solve these types of problems.
        
         | xg15 wrote:
         | The fundamental technical problem I see with PoW is that it
         | only seldomly really aligns with the "good guy/bad guy"
         | boundary.
         | 
         | I.e. the basic purpose of PoW is security: Allow desirable
         | actors in, keep malicious actors out. But this implies that
         | "ability to put in more work" is actually a working way to
         | distinguish good actors from bad actors. This is true in very
         | specific cases, like blockchains - but I believe in most cases,
         | this is actually not given, such as emails.
         | 
         | E.g., suppose we're using PoW to secure email: We do away with
         | SPIF and all that and simply require each email to contain some
         | hash that a sender had to bruteforce (just an example: use
         | whatever PoW scheme you want).
         | 
         | If the scheme has a fixed difficulty, spammers can easily
         | defeat it - they just have to rent (or capture) more machines.
         | So you have to dynamically adjust the difficulty to meet some
         | message/time unit quota. Congrats, suddenly the whole network
         | is limitited to some maximum throughput. Alternatively, you can
         | have separate difficulties for each user - but then, you need a
         | way to track individual users, compute individual difficulties,
         | etc. All of this needs some centralized entity again and agents
         | that enforce the rules. If you have all that, why not use
         | traditional rate limit and forgo the energy (or resource)
         | waste?
        
         | delusional wrote:
         | > Alot of sentiment today thinks proof of work is a waste of
         | energy, but I assert that it can solve a lot more problems
         | beyond its use for "Nakamoto Consensus".
         | 
         | When you use "but" it's customary for the following statement
         | to disprove or argue against the previous statement. How does
         | it being applicable to more stuff stop it from being a gigantic
         | waste of energy?
        
           | robbedpeter wrote:
           | It being a waste is a matter of opinion. There are negative
           | externalities in some cases, but profit and services
           | generated by the use of crypto have value to people.
           | 
           | If the problem is the pollution produced by power generation,
           | then it's disingenuous to single out crypto for criticism. We
           | really should be enforcing accountability and forcing markets
           | to price in the negative externalities. Carbon capture and
           | other technologies are surfacing to allow for that, and
           | within a decade or so we should see widespread
           | implementation. Legislation will arise out of the consensus
           | of voters and mate technology and regulation.
           | 
           | If the problem is that you think crypto is frivolous or
           | implicitly a waste of resources?
           | 
           | "Well, that's just, like, your opinion, man..."
        
             | lwansbrough wrote:
             | It's not a matter of opinion. Crypto provides incredibly
             | little value to the average person vs. its energy usage. It
             | takes an entire tank of gasoline to make a single Bitcoin
             | transaction, don't insult me by telling me it's a matter of
             | opinion that that's a waste.
             | 
             | And Proof of Waste is about more than it's impact on the
             | environment through it's egregious energy use. Even in
             | places that use clean energy, Bitcoin mining is putting a
             | strain on the grid. (I suspect mining had something to do
             | with Texas' grid problems last winter.) Even if you're
             | harnessing off grid energy, you're a leech sucking value
             | out of the economy by being a major contributor to the
             | chip/GPU shortage.
             | 
             | And for what? All to contribute to a system that has
             | greater wealth inequality than the existing financial
             | system. Brilliant stuff.
        
               | vernon99 wrote:
               | Is sun radiating energy in all directions also a waste in
               | your terminology? You can call any use of energy "waste"
               | this way.
               | 
               | Would bitcoin mining be better if it would use clean
               | energy? I think you really are mixing two things here:
               | energy production (that can be "good" or "bad" from
               | ethical or evological perspective) and energy consumption
               | that cannot be bad, just inefficient in terms of the
               | return in business value (but it's for the owners or
               | customers to calculate, not bystanders to judge).
               | 
               | Imo mixing two is a massive fallacy.
               | 
               | Edit: typos.
        
               | lwansbrough wrote:
               | > Would bitcoin mining be better if it would use clean
               | energy?
               | 
               | No, Bitcoin mining should not exist. It serves no
               | demonstrable net-positive value to society.
               | 
               | > I think you really are mixing two things here
               | 
               | I'm not, you seem to be confused. Energy production is
               | produced only because it is economically viable to do so.
               | Bitcoin makes it economically viable to produce most
               | forms of energy, regardless of that specific source's
               | environmental impact. This is harmful consumption of
               | energy. Like leaving the lights on when you're not home,
               | simply because you don't care. Bitcoin is not
               | indifferent, its core function is to increase energy
               | usage. Some people would have you believe Bitcoin's core
               | value is its use as a currency. Its value is as
               | infrastructure that wastes energy for profit, and the
               | collective buy-in and infrastructure created to ensure it
               | remains a store of value.
               | 
               | You could maybe argue this is worth it, if there were
               | absolutely no other way to do it. But there is, and it
               | works much better. Central banking is strictly superior
               | to cryptocurrency for most reasons that the average
               | person cares about. If you don't agree, that's
               | irrelevant, because you're an outlier. Most people want
               | cheap transactional costs, fast transactions, and for
               | their money to have stable value. They couldn't care for
               | a second if the transaction is cryptographically secure
               | as long as it's reasonably insured.
        
               | awrence wrote:
               | This is your opinion.
        
           | nathias wrote:
           | something is a waste if it is not useful, making new uses
           | makes it less of a waste by definition
        
           | max_ wrote:
           | >How does it being applicable to more stuff stop it from
           | being a gigantic waste of energy?
           | 
           | "Applicable" means that it is useful, as it solves the
           | problems I talk about in the post.
        
           | wackro wrote:
           | It's all in the link he posted
        
           | michaelscott wrote:
           | Everything expends energy in order to solve some problem or
           | accomplish some goal. Whether the problem is worth solving or
           | the goal worth pursuing given the required energy is
           | subjective, but beside the point. If it can solve more
           | problems then the expending of energy becomes more justified.
        
             | kaba0 wrote:
             | But if something has a fundamentally monotonically
             | increasing cost in terms of energy, when will we reach the
             | point where it no longer worth the tradeoff?
             | 
             | Is taking more energy than Argentina really worthwhile for
             | the few that uses cryptos?
        
             | xg15 wrote:
             | > _Whether the problem is worth solving or the goal worth
             | pursuing given the required energy is subjective, but
             | beside the point._
             | 
             | No, it's very much not besides the point - and I'd argue
             | it's one of the core issues with PoW and the reason why
             | people are so appalled by it.
             | 
             | Yes, everything expends energy, but the special property of
             | PoW is that the energy cost is _intentional_. Therefore it
             | 's fundamentally impossible to reduce the energy cost as
             | that would defeat the whole point: If someone manages to
             | find a more efficient way to mine, this is a threat to the
             | network and has to be counteracted by raising the
             | difficulty. Conversely, the amount of energy that _can_ be
             | expended for mining a single block is potentially
             | unbounded, in contrast to other problems ehere the energy
             | actually perform useful work.
             | 
             | This leaves belief whether or not the problem is worth
             | pursuing as the only measure about the energy cost of PoW.
             | And this belief is influenced by all kinds of factors from
             | technical to financial to psychological. But it is
             | generally not influenced by the amount of energy already
             | spent.
        
               | mgraczyk wrote:
               | This is factually incorrect. I'm not a fan at all of
               | proof of work schemes, but it's important to criticize
               | them correctly.
               | 
               | Energy consumption is not fundamental in any way. Proof
               | of work depends only in the consumption of some resource
               | that has economic value. It doesn't have to require any
               | energy at all.
               | 
               | For example, Chia had a proof of work mechanism that uses
               | disk storage instead of computation. It uses comparably
               | very little energy and the difficulty is not
               | substantially sensitive to energy efficiency because the
               | cost is dominated by space rather than computation.
               | 
               | There are other examples that attempt to use things like
               | spatially distributed network bandwidth as a resource.
               | I'm not a fan of most of these, but the point is that
               | energy is not fundamental.
        
               | spurgu wrote:
               | > Energy consumption is not fundamental in any way.
               | 
               | Isn't the opposite true though? That everything is either
               | directly or indirectly tied to energy?
               | 
               | Cost of disk space vs computing power is just an equation
               | of the energy put into it (mining, manufacturing,
               | marketing, shipping).
               | 
               | Maybe I'm too hungover to think this through. :D
               | 
               | > It uses comparably very little energy and the
               | difficulty is not substantially sensitive to energy
               | efficiency because the cost is dominated by space rather
               | than computation.
               | 
               | I don't see how this would equate in the end. If you want
               | to keep the level of difficulty high enough it would have
               | to go hand in hand with real life resources (= energy).
               | 
               | Granted there are complex externalities in the
               | calculation and computing continuously uses energy while
               | disk space is more of an "expend and forget" type of
               | scenario, but to me that would simply result in malicious
               | actors being able to afford to put more resources into it
               | (buying more disk space) until we're at the level of the
               | same energy expenditure.
        
               | lisper wrote:
               | > Chia had a proof of work mechanism that uses disk
               | storage instead of computation
               | 
               | And how do you think those disks get made? (And how do
               | you run those disks without expending energy?)
        
               | mgraczyk wrote:
               | They do use energy, but it's very small compared to other
               | economic activity.
               | 
               | For example, suppose Bitcoin consumed as much energy as a
               | few households. Would that be acceptable?
               | 
               | Alternatives aren't quite that efficient, but my point is
               | that the relative energy consumption matters a lot.
        
               | lisper wrote:
               | > suppose Bitcoin consumed as much energy as a few
               | households
               | 
               | That's not possible. The marginal cost of mining has to
               | equal the value of the coins mined.
        
               | mgraczyk wrote:
               | The cost can come from things that do not consume energy,
               | for example fabricating a complex chip that includes rare
               | materials.
        
               | slavik81 wrote:
               | So, proof-of-gold?
        
               | xg15 wrote:
               | > _For example, suppose Bitcoin consumed as much energy
               | as a few households. Would that be acceptable?_
               | 
               | But in this scenario, Bitcoin would consume rising
               | amounts of some other resource, say SSDs or network
               | capacity.
        
               | kaba0 wrote:
               | It doesn't change the fact that they are fundamentally
               | wasteful
        
               | mgraczyk wrote:
               | "waste" is purely subjective. Is it wasteful that
               | televisions exist just because I don't like watching
               | them? What if televisions used more or less resources?
               | Shouldn't the actual quantities matter more than our
               | opinions about the merits of the activity?
        
               | xg15 wrote:
               | > _" waste" is purely subjective_
               | 
               | Nope.
        
               | can16358p wrote:
               | It depends on what you value. If you value energy
               | efficiency, Bitcoin is extremely wasteful for sure.
               | 
               | However if you value freedom/decentralization, it isn't.
               | (I know about the debatable parts of decentralization and
               | Bitcoin but you probably got the main idea)
        
               | xg15 wrote:
               | > _However if you value freedom /decentralization, it
               | isn't._
               | 
               | Then your passion for freedom has to grow in lockstep
               | with the Bitcoin market cap, because this is what tracks
               | the actual cost per unit of work with Bitcoin.
               | 
               | Also note who has to bear the cost: PoW resource waste is
               | something that affects everyone, even if only a small
               | group perceives it as valuable.
        
               | can16358p wrote:
               | Well a total economic revolution isn't going to happen
               | overnight. It will take many more years if that's going
               | to happen, and where it's going, even with all the
               | scalability and PoW/waste problems, is still in the right
               | direction given today's economic system.
        
               | xg15 wrote:
               | > _Energy consumption is not fundamental in any way.
               | Proof of work depends only in the consumption of some
               | resource that has economic value._
               | 
               | Yes, or in other words: PoW has to waste _something_
               | valuable. This something doesn 't have to be energy, it
               | can also be physical devices + the energy needed to
               | produce/operate them - or whatever else someone can think
               | up.
               | 
               | My actual point was that the amount of cost per unit of
               | work is unbounded - and to my knowledge this is true for
               | all PoW schemes: Otherwise, an attacker could simply
               | invest enough resources to produce more work units than
               | everyone else and capture the network.
        
               | mgraczyk wrote:
               | Your facts are true, but I disagree with your conclusion.
               | The resource consumption is actually bounded by the
               | economic value of the network, or the value of attacking
               | the network. If the network generates $100 of value (in
               | terms of market cap etc) for each $1 spent to operate it,
               | then the resource consumption if the network is
               | essentially bounded to 1/100 of global GDP. This is also
               | assuming network operators capture 100% of the value of
               | the network, which is too high by at least an order of
               | magnitude for most networks.
               | 
               | Networks with bigger ratios truly are more efficient,
               | even in absurd hypotheticals in which all economic
               | activity is devoted to operating the network. All I'm
               | assuming here is that actors don't put in more than they
               | get out of it.
        
               | xg15 wrote:
               | > _If the network generates $100 of value (in terms of
               | market cap etc) for each $1 spent to operate it, then the
               | resource consumption if the network is essentially
               | bounded to 1 /100 of global GDP._
               | 
               | I agree with this point - but over the last few years, we
               | have seen how wildly the perceived value of
               | cryptocurrencies can fluctuate. There are a lot of actors
               | who are strongly interested in driving up the value -
               | either through legitimate means, but just as often
               | through fraud, e.g. manipulated exchanges, wash trading,
               | etc.
               | 
               | So the market cap can easily reach fantasy numbers which
               | aren't really justified by economic utility - but because
               | this fantasy valuation represents real money for miners,
               | energy consumption will follow it.
        
               | tromp wrote:
               | Chia's Proof of Space Time is not Proof of Work. They are
               | different forms of Proof of Resource.
        
         | marcosdumay wrote:
         | Well as an example, it's used in cryptographic key generator
         | functions.
         | 
         | But there aren't many things it solves well. The easiest and
         | most economical solution to "decentralizing rate limiting" is
         | usually centralizing something.
        
         | michaelsbradley wrote:
         | > I don't think anything else can solve decentralized rate
         | limiting more effectively than proof of work.
         | 
         | Have you heard of Rate Limiting Nullifiers?
         | 
         | https://github.com/vacp2p/research/blob/master/rln-research/...
        
         | jayd16 wrote:
         | I guess to some degree waste is value judgement but by
         | definition POW is never not incredibly expensive relative to
         | the value it provides.
         | 
         | It needs to always be expensive or the system is vulnerable to
         | a sudden burst of new and malicious workers.
        
         | staticassertion wrote:
         | I certainly look forward to seeing real problems solved with
         | these algorithms, but right now that work seems to be lost in
         | the noise of crypto.
         | 
         | I'd be curious to hear more about decentralized rate limiting.
         | That sounds like a reasonable problem to solve with PoW.
         | Although it also sounds like a problem I can solve pretty
         | easily today without PoW so idk.
        
           | jacoblambda wrote:
           | I posted about this elsewhere in this thread but you might be
           | interested in this paper:
           | 
           | https://eprint.iacr.org/2021/1379
           | 
           | It gets about 50% efficiency compared to the current state of
           | the art for the problem space without compromising any of the
           | security properties that make for a good PoW algorithm.
           | Generally I'm not a fan of PoW and prefer internal resource
           | based consensus algorithms but PoUW algorithms seem rather
           | interesting. I think we are reaching a point of maturity in
           | the space that'll allow these types of self-securing service
           | marketplaces (which really is what PoUW is) to reach their
           | logical conclusion.
        
       | shimonabi wrote:
       | I'm "old" enough to remember Bill Gates talking about getting rid
       | of spam with puzzles in 2004:
       | 
       | https://www.theguardian.com/technology/2004/jan/25/billgates...
        
       | jancsika wrote:
       | Ben Laurie posted a link to this paper in response to Satoshi's
       | posting his first version of Bitcoin[1], with this comment:
       | 
       | > Richard Clayton and I claim that PoW doesn't work:
       | 
       | > http://www.cl.cam.ac.uk/~rnc1/proofwork.pdf
       | 
       | It's in the context of a discussion about why PoW-based tokes are
       | a bad idea in terms of burning CPUs and their carbon footprint.
       | The generous interpretation is that he was claiming that this
       | discussion was moot because the bigger issue was that PoW
       | wouldn't actually work as a feature of Bitcoin.
       | 
       | The less generous (but probably accurate) interpretation is that
       | he posted that without reading either the Bitcoin whitepaper
       | itself or the abstract of the whitepaper. IIUC his paper is about
       | how PoW applied to email would either break a lot of the
       | desirable features or the difficulty would be too low to prevent
       | spam.
       | 
       | I'm not sure why this bothers me enough to post about it on HN--
       | I'd actually prefer it to be true and Bitcoin fanbase never to
       | have existed. Nevertheless, his paper wasn't really relevant to
       | that discussion and I'm not sure why he posted it there.
       | 
       | 1: https://www.mail-
       | archive.com/cryptography@metzdowd.com/msg10...
       | 
       | Edit: clarification
        
       | debacle wrote:
       | For everyone who is a big fan of crypto, what is the next "big
       | step" after PoS.
       | 
       | I am more than happy to use a cryptocurrency where I can take 1
       | USD and receive a coin that is worth ~1 USD, without needing the
       | promise that it will be a moonshot "investment," merely a vehicle
       | for value.
       | 
       | When is that coin coming our way?
        
         | Kranar wrote:
         | https://coinmarketcap.com/currencies/multi-collateral-dai/
        
         | intunderflow wrote:
         | Delegated Proof of Stake is pretty cool, particularly as its
         | applied in Nano (instant and feeless transactions), if someone
         | manages to combine that with the transaction privacy of Monero
         | that would be awesome in my view.
        
           | 0x64 wrote:
           | There is nothing cool about dPoS. Compared to PoS, it's an
           | objectively worse system in terms of decentralization.
        
         | rvz wrote:
         | > When is that coin coming our way?
         | 
         | Today. It is called USDC; but on the Stellar Blockchain. [0]
         | 
         | You will always know that 1 USDC will always be worth 1 USD and
         | you won't have to deal with ridiculously slow transactions or
         | incredibly high gas fees for every operation and it is not
         | using PoW. [0]
         | 
         | [0] https://stellar.org/usdc
        
         | analog31 wrote:
         | PoD = Proof of Dollar. ;-)
        
           | DaiPlusPlus wrote:
           | That's what Tether is... ostensibly
        
         | zenogais wrote:
         | What you're looking for exists today and is called a stable-
         | coin (for example, USDC).
        
         | vmception wrote:
         | MIM - Magic Internet Money, a stablecoin that just leans into
         | the meme because the space is big enough to just ignore
         | crypto/blockchain skeptics (and maxis) as you dont need buyin
         | from them anymore to attract billions of dollars for
         | validation. It competes with DAI, same system just natively
         | crosschain (via AnySwap bridging function added to the erc20
         | class) and potentially maintains better collateral choices.
         | Right now they use yield bearing collateral like liquidity pool
         | shares which earn enough to reduce loan to value ratios and
         | even pay interest on their own. In comparison, DAI was released
         | in a world without onchain distributed asset backed securities
         | and its users eventually picked completely centralized assets
         | like USDC for collateral. This limits that communities' risk
         | tolerance for raising debt limits.
         | 
         | That part of your question about stablecoins doesn't have much
         | to do with a Proof of Stake though-a consensus model.
        
           | chrisco255 wrote:
           | DAI is still an extremely important in decentralized finance.
           | It is simply easier to scale a centralized stable coin than a
           | collateralized one as the collateralized one is less capital
           | efficient. The centralized coin has different risk parameters
           | though, such as a bank run scenario or the fact that USDC
           | funds can be frozen at will by Circle.
        
             | vmception wrote:
             | I didn't write that anything was wrong with any of the
             | three assets mentioned
             | 
             | I wrote how they compete on collateral choices which lets
             | people predict their growth/issuance trajectory. MIM grows
             | faster than DAI for a variety of reasons that DAI didn't
             | have when it launched, which is not likely that DAI can
             | replicate now or at least not quickly.
        
         | 0x4d464d48 wrote:
         | "When is that coin coming our way?"
         | 
         | My guess is around the time central banks start issuing it.
        
         | [deleted]
        
         | adhoc32 wrote:
         | Proof of work is the only system where you can look at the
         | blockchain data and figure out the consensus. All other systems
         | depends on people agreeing on what is the truth. PoW is not
         | just superior, it's essential for true decentralized crypto.
        
         | 0x64 wrote:
         | On Ethereum the three most popular ones are DAI, USDC, and
         | USDT. All are pegged to $1. There are also more niche
         | stablecoinds, such as RAI.
         | 
         | https://ethereum.org/en/stablecoins
        
           | capableweb wrote:
           | Worth to keep in mind is that USDT is involved in a lot of
           | shady stuff (and run by Bitfinex), USDC is run by a
           | centralized organization (and Coinbase is involved in that
           | too) while DAI is based on algorithmic stability/stableness.
           | Which one is the best choice for the normal user is left as
           | an exercise to the reader.
        
         | PKop wrote:
         | Really? Stable-coins as a concept have existed for years, and
         | in practice have blown up in trading volume and circulation the
         | past 2 years.
         | 
         | USDC stable-coin [0]($34 Billion in circulation) is arguably
         | the most trustworthy in terms of having a 1 to 1 exchangeable
         | backing through a regulated centralized custodian
         | (Circle/Coinbase primarily but also BlockFi and other entities
         | that hold USD reserves for exchange).
         | 
         | Many of these entities (as well as "DeFi" decentralized finance
         | platforms that use Ethereum or similar smart contracts to
         | decentralize the process) allow for various forms of deposit
         | and lending accounts that provide a whole range of yields way
         | way above traditional banking deposits. On top of this, some of
         | these custodians add an additional layer of payment ability to
         | these deposit accounts. Crypto.com[1] for example has a Visa
         | debit card that ties into your USDC/stable coin deposits that
         | you can transact from, in theory avoiding needing to use fiat
         | at all. As well as "CD-like" 3-month lockups where you can get
         | 8-12% yield.
         | 
         | There are also many decentralized stable coins that have
         | various forms of over-collateralized crypto-asset reserves
         | backing the coin and algorithms to stabilize the value by
         | buying or selling from these reserves, trading off possible
         | volatility and uncertainty around peg to avoid centralization
         | and KYC and other regulations of 1:1 backed coins.[2]
         | 
         | [0] https://www.circle.com/en/usdc
         | 
         | [1] https://crypto.com/us/earn
         | 
         | [2] $MIM dollar stable-coin:
         | https://cointelegraph.com/news/magic-internet-money-races-pa...
        
         | chrisco255 wrote:
         | There is already nearly $100B worth of stable coins available
         | on the Ethereum blockchain (and other EVM chains such as
         | Polygon): https://defipulse.com/usd.
        
         | larsiusprime wrote:
         | Other than proof of stake I've heard of two validation systems:
         | 
         | 1. Proof of space and/or time: https://en.wikipedia.org/wiki/Pr
         | oof_of_space#:~:text=A%20pro....
         | 
         | 2. Proof of authority:
         | https://en.wikipedia.org/wiki/Proof_of_authority
         | 
         | Not sure either makes a huge difference
        
           | jacoblambda wrote:
           | Proof of Authority is extraordinarily useful but it's not
           | inherently complex by any means (really it's just the old
           | school consensus problems).
           | 
           | I'd argue though that Proof of Authority definitely is the
           | most useful outside of Proof of Stake and the slowly maturing
           | Proof of Useful Work consensus systems. It's simplistic but
           | it perfectly covers the needs of a lot of government systems.
        
           | skerit wrote:
           | Helium network's proof of coverage is also interesting.
        
         | ChrisClark wrote:
         | DAI has remained stable, even when ETH crashed 90%, Maker
         | worked perfectly and DAI remained $1 USD.
        
           | bradwood wrote:
           | funny how everyone refers to coins which are pegged to a
           | massively inflationary fiat currency as "stable"...
        
             | ogogmad wrote:
             | The "stable" refers to the absence of massive short-term
             | volatility. The purpose of stablecoins is "banking the
             | unbanked" - in other words, allowing people to spend money
             | who don't have bank accounts. At least I _think_ that 's
             | what they're for. It allows people to use USD in the wild,
             | wild west.
        
           | ogogmad wrote:
           | This is an honest question, and I'm not trying to pour cold
           | water on DAI. What would happen if DAI had a single
           | centralised source of truth which could be mirrored as needed
           | if people lost faith in the central entity? This is a bit
           | like what Wikipedia has, which is a fully open database that
           | can be mirrored ad infinitum -- but still remains the central
           | source of truth as long as people respect the organisation
           | that runs it. More broadly, does DAI _really_ need to be on a
           | blockchain*? Are there efficient non-blockchain ways to make
           | verifiable stablecoins?
           | 
           | I ask this question because a lot of things that are run on
           | blockchains seem like they're losing more than they're
           | gaining. It makes me suspicious of even DAI.
           | 
           | When I say "fully open database", you might object that this
           | compromises a person's privacy in order to make the database
           | mirror-able. But then again, all blockchains are fully open
           | and public, so there's nothing more to be lost there.
           | 
           | * - By which I mean the Ethereum blockchain, which is
           | inefficient like all blockchains currently are.
        
             | cvdub wrote:
             | The US government could make a centralized digital currency
             | without a blockchain. That makes way more sense to me than
             | dealing with all the overhead associated with a trustless
             | decentralized ledger.
        
               | zie wrote:
               | They are working on it. they call it a "digital dollar".
        
             | shawnz wrote:
             | I suspect if such a service was _not_ hosted on a
             | blockchain, it would be quickly shut down by regulators
        
               | ogogmad wrote:
               | Does mirroring deal with this? Somebody downloads the
               | database and hosts it somewhere else, a bit like TPB or
               | Sci-hub. I suggested this in my original post. Which host
               | gets "elevated" to be the official source of truth is
               | decided by community concensus.
        
               | shawnz wrote:
               | Then you run into the problem of deciding who is running
               | the authoritative mirror when the existing one goes down.
               | If there's no single authoritative mirror then you could
               | potentially double-spend your money by spending it in
               | different places on different mirrors.
        
               | terafo wrote:
               | Mirroring doesn't deal with this because there's always a
               | single target, elimination of which disrupts the whole
               | system, since some time will pass until yet another
               | person puts a target on his back, and there is the
               | problem of finding out which one is legitimate in case if
               | there are few successors.
        
             | DennisP wrote:
             | Ethereum is going to stop being so inefficient in about six
             | months. The proof-of-stake migration will reduce its energy
             | usage by about 99.95%. So that will make it an efficient
             | way to make verifiable stablecoins.
             | 
             | https://blog.ethereum.org/2021/05/18/country-power-no-more/
        
         | jazzyjackson wrote:
         | the moonshot premise is the growth hack - a reason for people
         | to want the coin. anything stable is unlikely to find
         | widespread adoption, unless it's introduced by central banks,
         | in which case it's called Central Bank Digital Currency (CBDC)
        
       | larsiusprime wrote:
       | For context, Bitcoin launched in 2008, and this paper, concerning
       | proof-of-work as an anti-spam prevention measure, launched in
       | 2004.
       | 
       | Question: has any email system attempted proof of work? Did it
       | run into the problems this paper predicted?
        
         | surajs wrote:
         | Ouch, I guess there's a bureaucracy behind the ontology of any
         | proof of work, although spam/email was a good use case but
         | perhaps crypto is a finer expression, so the paper's main
         | thesis is partially right but it's still used as a spam filter
         | so I guess there's a utility there.
        
         | max_ wrote:
         | > Has any email system attempted proof of work?
         | 
         | You might want to have a look at hashcash[0]
         | 
         | [0] https://en.wikipedia.org/wiki/Hashcash
        
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