Friday, July 7th 2017

On Cryptocoins: I think I know why Satoshi Nakamoto Hides

To all you out there wondering why you can't get a GPU for gaming at a reasonable rate, or why we are using record numbers in energy usage to mint so called "toy money," depleting our planets energy in the process, I have a bit of a statement to make as a former miner and "part of the problem" so to speak.

I'm sorry, it wasn't supposed to be this way. None of it was supposed to go down like this.

That probably requires some justification, yes? I mean mining is an inherently energy expensive operation, right? Well, yes and no, respectively. Yes, it requires justification, and that's precisely because mining is NOT an inherently energy expensive operation, despite public perception. It has become that way due to human greed, and nearly everything bad to come from cryptocurrency has decidedly come from that group: humans. Cryptocurrency is not inherently responsible. The inventors, pioneers, and early miners such as myself never anticipated what was to come, and we did not intend it to be this way. Bitcoin was intended to do good, and in the end, it wasn't cryptocurrency that screwed it all up, it was humans. Human greed, particularly.
In the early days of cryptocurrency, Bitcoin was the only player in town, and supply was supposedly fixed and regulated. We (we being the early miners, and to an extent it's anonymous creator, using the pseudonym Satoshi Nakamoto) did not anticipate so many new players and the "infinite money" problem we face today. We also didn't have much of a network in terms of energy use. Mining was done largely on what I imagine to be a few hundred or thousand (I have no idea what the exact numbers were frankly, I doubt anyone does) computers around the globe. We didn't use GPUs, we used CPUs, and at least in the early iterations it was largely done on a single thread/process. When I started mining, things were already in flux. Someone had made a GPU-miner, and suddenly, the cost-to-benefit ratio went way up. You see, with CPU systems it did not make economic sense to make "farms" because with 1P consumer hardware, it took a whole system per miner, and even quad cores were still really expensive then (2P and 4P systems were around, but cost almost more than 2 cheap 1Ps). GPUs changed that. GPUs obsoleted the CPU "farm-limiting" expenses by allowing miners to strap on as many as 4-6 GPUs per system, and with the CPU irrelevant, they could make the rest of the system very cheaply. Suddenly, the only part that really cost anything was the GPU, and cost-to-benefit ratio went way up. You could mine much more way cheaper. And since it was only one part that was really needed anymore (and lots of that part), the GPU market took a huge hit, as did the energy market.

When I started mining, this impact was still not clear. I entered the market as a miner when Bitcoin was about $20.00 per coin. I began my mining adventure on the CPU of an old Pentium M notebook before quickly learning this was uneconomical, and made approximately 0.02 bitcoins over the course of a week, worth then only 40 cents. The only exchange at the time, MtGox, would not even let me withdraw such a measly amount, and so it sat in their online wallet until MtGox would collapse in the later days of Bitcoin. Interesting to note, if I still had those .02 bitcoins, they'd be worth over 40 dollars today, but ah, thus is the nature of cryptocurrency.

That's the other problem with cryptocurrency, and again, it isn't actually a problem with cryptocurrency itself, but people. People are unreliable. You give your coins over to someone random on the internet, it isn't really the fault of cryptocurrency when it vanishes. This is a very human issue. When people use cryptocurrency to buy drugs online, it too isn't cryptocurrency's fault nor was it our goal for it to be used that way. It is the users fault, the human element again is to blame.

At any rate, I won't go much more into my own mining shenanigans, except to say I got into it big before getting out entirely sometime in the next Bitcoin crash. It has let me look at things somewhat levelheaded with the latest energy figures coming back showing the true cost of the new GPU miners, and such. (ASICs on Bitcoin's part make whole systems even cheaper and more exclusive, so that doesn't help things either). But this wasn't how it was supposed to be. Bitcoin was never supposed to be cheap to mine. Mining was supposed to be a reward for supporting the network on your CPU in your downtime, like a BOINC screensaver. Nothing more, nothing less. If Bitcoin made one huge mistake, it's in trusting people to not abuse the system. It was in trusting humans, not in its goals. Its goals were good. I mean a good cheap money transport for the masses is not an inherently bad thing, right? People ruined that, not cryptocurrency.

I no longer believe in Bitcoin, but I still believe in cryptocurrency. Why? Well, let's look at where Bitcoin went wrong, first.

First off, Bitcoin's Proof of Work algorithm is too simple. It's a glorified SHA hash (which is very, very computationally cheap) done over and over, which honestly, was asking to have an ASIC made for it from day 1. The fact that it didn't become an energy pig sooner is surprising, to be frank. Human greed will always seek more than its fair share, and it was way too easy to facilitate that with Bitcoin's simplistic Proof of Work algorithm. If Bitcoin is a drug, it is both dealer and enabler.

Second, Bitcoin was too trusting. Bitcoin gives people anonymity, and then trusts people to be responsible with it. I believe people to be basically good, but there are always those who are bad and will abuse a system like this. It needs a decentralized name registry, to give people more traceability and identification on the network. I don't believe a truly anonymous cryptocoin will ever have a place here for long, at least not outside the criminal underworld.

What do we need? We need a coin that doesn't trust people. People are the weak link. We need a computationally complex coin that runs on CPUs and restores that old status quo the early bitcoin days enjoyed, that limits the impact of farming and thus, energy usage on our planet. This same coin maybe could even do something with those CPU cycles, what I don't know, but meaningless numbers has always rubbed me the wrong way. Maybe something that contributes to BOINC or similar projects, I can't say. I'm not an architect, more of a philosopher a this point if you will.

I guess what I want you to walk away from this with is the realization that despite the fact that cryptocurrency is here to stay in some form or another, it is not inherently evil. Some of the incarnations of it right now are just plain bad, and I believe Bitcoin is already dying even if it won't be apparent for years (I believe regulation from the government will finally kill it, honestly). But Bitcoin is NOT cryptocurrency in whole. Cryptocurrency is an idea, an idea to provide a cheap money transport free of swipe fees and instability to the masses. Bitcoin failed at this, failed massively on several fronts (it's not cheap as it eats tons of energy for no reason, and it's massively unstable). But I think someday, a coin will take these ideals and improve upon bitcoin, and truly make the world a better place. If only people will give it a chance, and not associate it with the great failure of Bitcoin in its original goals. Maybe it can happen. Maybe.

In closing, I'd like to say I think I know why Satoshi Nakamoto hides. I think he is ashamed of what he has created, of what his child has become. He entered it with what I honestly believe was the best of intentions to improve the world for the better, and what happened? Looking on it now, can you blame him for hiding? Would you want credit for this? I wouldn't.
Add your own comment

98 Comments on On Cryptocoins: I think I know why Satoshi Nakamoto Hides

#1
Basard
Seems like a giant pyramid scheme to me... But then so do most forms of currency.
The world is weird... as long as people accept bitcoins for goods and services then they will be around.
I don't know enough about them to even comment really.
Posted on Reply
#2
R-T-B
Basard said:
Seems like a giant pyramid scheme to me... But then so do most forms of currency.
I think if you told the early founders of Bitcoin that it would ever be worth more than 1USD, they'd probably have been thrilled.

We didn't see the hypetrain, it didn't even blow its whistle, it just ran us over. And remember people, hypetrains are bad.
Posted on Reply
#3
Basard
R-T-B said:
I think if you told the early founders of Bitcoin that it would ever be worth more than 1USD, they'd probably have been thrilled.

We didn't see the hypetrain, it didn't even blow its whistle, it just ran us over. And remember people, hypetrains are bad.
Yeah, but have any of us people (in these forums) actually made any money off of it? Cuz i know a guy who's kinda into all that, he's got little cylindrical mining computers all hooked up in his room and it's like 90 degrees in there all day lol.... Seems like one would have to always be on the cutting edge, because my friend steadily loses money with old hardware....
Posted on Reply
#4
Casecutter
It's a Wonderful Life... Greed/humans it can't/won't change.
Posted on Reply
#5
R-T-B
Basard said:
Yeah, but have any of us people (in these forums) actually made any money off of it? Cuz i know a guy who's kinda into all that, he's got little cylindrical mining computers all hooked up in his room and it's like 90 degrees in there all day lol.... Seems like one would have to always be on the cutting edge, because my friend steadily loses money with old hardware....
There are a few here making money right now.

I lost money. You do indeed need to stay on top of the news to make anything. It's like any fulltime job.

Plus, it's smarter to hold than to sell immediately, if history is anything to go by.

But that's not my point. My point is, that Bitcoin has really messed up big time in it's initial altruistic goals for the world. It's way past its time to die, IMO.

Bitcoin is not the only crypto, and crypto can and should strive for something better.
Posted on Reply
#6
lemkeant
Great article! I agree with most of what you said and the looming August 1st deadline with Segwit, soft/hard fork, etc are the perfect example of people messing it all up.

Of course, if everyone does come to an agreement before August 1st, expect this all to really jump more more than it did in the past few months
Posted on Reply
#7
Steevo
So just like with every other socio-economic system corruption and human greed and degeneracy becomes the norm?

Is bitcoin worse than a $20 used to pay for a lapdance, a couple joints, alcohol, or other drug? No. The $20 is just as anonymous.

Legalization of the black market is the only and final fix for these issues. If you legalized "drugs" and had fair monitary exchange I would wager that 90% of the value of crypto currency would disappear.
Posted on Reply
#8
Rehmanpa
Why exactly is your op-ed posted under news? We get it, you don't like bitcoin. No need for your opinion to be voiced under the news feed section of TPU.
Posted on Reply
#9
R-T-B
lemkeant said:
Great article! I agree with most of what you said and the looming August 1st deadline with Segwit, soft/hard fork, etc are the perfect example of people messing it all up.

Of course, if everyone does come to an agreement before August 1st, expect this all to really jump more more than it did in the past few months
I'm not as up to date as I should be aparently. Just read up on this and I say again, I agree completely that the same problem is in play.

Rehmanpa said:
Why exactly is your op-ed posted under news? We get it, you don't like bitcoin. No need for your opinion to be voiced under the news feed section of TPU.
Because all TPU editorials are posted in news with an editorial flair. View it from the homepage rather than forums if you can't see it.



You are also wrong. I don't dislike bitcoin, I dislike what people have done to it. Bitcoin's principles are the best thing to happen in a long time currency wise. It's just failed so miserably at them I'm not sure we can recognize it anymore.

Steevo said:
If you legalized "drugs" and had fair monitary exchange I would wager that 90% of the value of crypto currency would disappear.
Not sure I buy that at all.

Bitcoin and cryptos value is in its idea of a cheap and easy payment system for the masses. The criminal element if anything hurts its value at this point, does not help or support it.
Posted on Reply
#10
Countryside
Most of us but not all will understand one day that our society will never be free until there is no currency.
Posted on Reply
#11
Steevo
Countryside said:
Most of us but not all will understand one day that our society will never be free until there is no currency.
Are we headed back to trading milk, cheese, goats, virgin daughters, and wine for things we want and cannot make? Currency makes specialization and mass agriculture possible, and mass agriculture allows for a sustainable, reliable food source for cities.

If we ever reach a time where we have no currency it will only be as we have left the earth, or we are all dead. If we leave the earth whatever we use as fuel will become currency.
Posted on Reply
#12
Countryside
Steevo said:
Are we headed back to trading milk, cheese, goats, virgin daughters, and wine for things we want and cannot make? Currency makes specialization and mass agriculture possible, and mass agriculture allows for a sustainable, reliable food source for cities.

If we ever reach a time where we have no currency it will only be as we have left the earth, or we are all dead. If we leave the earth whatever we use as fuel will become currency.
Hmm a narrow point of view which i have heard for many times and yes if we will leave Earth and for a example colonies Mars we will have a Central Bank of Mars and you will pay interest for your loan for half of your life like a hamster spinning his wheel.
Posted on Reply
#13
R-T-B
Countryside said:
Hmm a narrow point of view which i have heard for many times and yes if we will leave Earth a for a example colonies Mars we will have a Central Bank of Mars and you will pay interest for your loan for half of your life like a hamster spinning his wheel.
I'm not sure it's narrow if you can't contradict it.

The only way I can see a society without currency is if we redefine "currency" personally.

A society without debt would be more realistic.
Posted on Reply
#14
cadaveca
My name is Dave
Steevo said:
Are we headed back to trading
Just to stir things, nope. Even the idea of "trade" needs to go. So we can all be like in Wall-E:p

I made money early in bitcoin, could have been more. The initial coin value was $25, iirc, but when you consider the resources put into it, even power-wise, then the value does kind of make sense. To me, you know, that's always how it was supposed to work. And the end power "budget" of the work done, was probably figured out already, since it really is simple math with what is pretty much a single end target. Advances in technology only make that effort more valuable, too.
Posted on Reply
#15
R-T-B
cadaveca said:
Just to stir things, nope. Even the idea of "trade" needs to go. So we can all be like in Wall-E:p

I made money early in bitcoin, could have been more. The initial coin value was $25, iirc,
I distinctly remember lower. MtGox traded back in the exciting days of "dollar parity"

Back then, I probably would've traded my 0.02 bitcoins for a goat. :P
Posted on Reply
#16
Steevo
Countryside said:
Hmm a narrow point of view which i have heard for many times and yes if we will leave Earth and for a example colonies Mars we will have a Central Bank of Mars and you will pay interest for your loan for half of your life like a hamster spinning his wheel.
I saw your video, and its shocking that a social liberal group of countries with strict laws to prevent growth and development owe trillions to other countries that then have to keep propping them up as they produce little and consume much.
Posted on Reply
#17
FordGT90Concept
"I go fast!1!11!1!"
R-T-B said:
We need a computationally complex coin that runs on CPUs and restores that old status quo the early bitcoin days enjoyed, that limits the impact of farming and thus, energy usage on our planet.
This is an oxymoron. Computational complexity translates directly to energy consumption.

R-T-B said:
This same coin maybe could even do something with those CPU cycles, what I don't know, but meaningless numbers has always rubbed me the wrong way.
About the only thing that meshes cryptography and "something" is calculating where pi ends. Lose-lose situation: if it does end, the currency can't respond to inflation; if it doesn't end, inflation is guaranteed. Besides, is having a lot of pi solved even mathematically significant? Where it's critical, just use radians. ;)

The problem with computational workloads for scientific endeavors is that they're always finite in length because the Scientific Method demands it (evaluate the test).

R-T-B said:
Maybe something that contributes to BOINC or similar projects, I can't say.
Cryptocurrency would ruin BOINC as a scientific endeavor. I would certainly quit if that came to pass.

R-T-B said:
But Bitcoin is NOT cryptocurrency.
It is a type of cryptocurrency and none of those that came after it really deviated much from its original design. Until the proverbial wheel is completely redesigned, they're pretty much all the same.
Posted on Reply
#18
R-T-B
FordGT90Concept said:
This is an oxymoron. Computational complexity translates directly to energy consumption.
But not to parallelism, which is what leads to it being cost effective to make "farms." The overall energy usage would be reduced by sheer virtue of it purely being run on basically home PCs, and thus inconvenient to use when you actually well, use them.
About the only thing that meshes cryptography and "something" is calculating where pi ends. Lose-lose situation: if it does end, the currency can't respond to inflation; if it doesn't end, inflation is guaranteed. Besides, is having a lot of pi solved even mathematically significant? Where it's critical, just use radians. ;)
Primecoin comes to mind as a counterpoint. Irrelevant largely, but existing.
The problem with computational workloads for scientific endeavors is that they're always finite in length because the Scientific Method demands it (evaluate the test).
Yes, Proof of Work evaluation would be difficult, but I am not entirely sure it is impossible.
Cryptocurrency would ruin BOINC as a scientific endeavor. I would certainly quit if that came to pass.
Why? Why would paying people for their energy usage and thus, gaining users, be a bad thing? Why would you quit if people got paid to do scientific work?

I mean really? That strikes me as a very emotionally driven move, not rational.
It is a type of cryptocurrency and none of those that came after it really deviated much from its original design. Until the proverbial wheel is completely redesigned, they're pretty much all the same.
I worded that oddly. It is indeed a type of crypto, and those that have come thus far have deviated a lot actually but nearly all rely on Proof of Work that is inherently parallelizable, and that is the key flaw. There are a few CPU coins out there but their hashrate is as I have predicted: Small and irrelevant with low power draw on the grid, and payouts barely paying the electric bill. Still, those are where I see the future, because parallelism on them via "just throw more GPUs at it" or similar is difficult.
Posted on Reply
#19
Dante Uchiha
I am baffled by the lack of knowledge of the author... -_-

Dude, there are millions of people earning money in exchanges - every day. Cryptocoins has much greater value variation than shares. for example:

I buy 10000 Neoscoin @ 0.0001 = 1 BTC
And Sell 10000 @ 0.002 = 20 BTC

Yes, that's right, over 50000 USD. Bitcoin is the future.
Posted on Reply
#20
R-T-B
Dante Uchiha said:
I am baffled by the lack of knowledge of the author... -_-

Dude, there are millions of people earning money in exchanges - every day. Cryptocoins has much greater value variation than shares. for example:

I buy 10000 Neoscoin @ 0.0001 = 1 BTC
And Sell 10000 @ 0.002 = 20 BTC

Yes, that's right, over 50000 USD. Bitcoin is the future.
I don't deny people are making money. Do you care to elaborate how that makes me lack knowledge, or why it makes Bitcoin the future in any way except for your now probably planned vacation? Sounds to me like you just made money on Neoscoin more than Bitcoin. You've basically just become a new world pennystock trader (not that there is anything wrong with that, my issue is more with how Proof of Work is dealt).

For the record, I initially made money in Bitcoin too. I frittered it away in a reinvestment, but I know it's possible. There is no denial there, and I actually know a lot more about the inner workings of bitcoin than I suspect you or anyone here does, frankly.

Crypto is the future. Bitcoin? Bitcoin will probably make it much much higher, but it will die. Mark my words.
Posted on Reply
#21
FordGT90Concept
"I go fast!1!11!1!"
R-T-B said:
Why? Why would paying people for their energy usage and thus, gaining users, be a bad thing? Why would you quit if people got paid to do scientific work?
Because where there's profit there is greed. There is no profit in BOINC, only hope and that's payment enough for most people. For those that isn't, well, probably better off without them. They can go make a business, buy their own hardware, and sell their computational product (cloud processing).

R-T-B said:
I worded that oddly. It is indeed a type of crypto, and those that have come thus far have deviated a lot actually but nearly all rely on Proof of Work that is inherently parallelizable, and that is the key flaw. There are a few CPU coins out there but their hashrate is as I have predicted: Small and irrelevant with low power draw on the grid, and payouts barely paying the electric bill. Still, those are where I see the future, because parallelism on them via "just throw more GPUs at it" or similar is difficult.
Are you forgetting Ryzen, ThreadRipper, and EPYC? The many-core race is on. Just 11 years ago, dual-cores came of age. Today, you can buy an Xbox 360 with an octo-core. Or a phone. Or Ryzen. Instead of having a GPU shortage, we'll have a CPU shortage. Where the processing occurs really doesn't matter. I mean, the only way to reasonably restrict processing right now is to make branching logic that runs like shit unless it's on a quantum processor (which there's only like a dozen of those in the world). Oh right, those machines are doing real science...

...so...you see...cryptocurrency is a solution looking for a problem...that doesn't exist...
Posted on Reply
#22
ppn
It basically has become another way of brokers to buy low and sell high and repeat until they own all crypt o currency, payed by the difference. and your pocket. Where all the money comes from, well for you to make money somebody has to lose money. you just preying on each other. It is a big giant ponzi scheme, and if you can't see that you can't be helped. How many currencies do you need, there needs to be only one such thing with fixed value.
Posted on Reply
#23
FordGT90Concept
"I go fast!1!11!1!"
Dante Uchiha said:
I buy 10000 Neoscoin @ 0.0001 = 1 BTC
And Sell 10000 @ 0.002 = 20 BTC

Yes, that's right, over 50000 USD. Bitcoin is the future.
No, that's the market trying to figure WTF is going on. It can go one of two ways: crash or stabilize. When there's no central organization capable of stabilizing it, crash is pretty much guaranteed. By that, I mean something down the lines of BTC being worth $0.000000001 USD. You may have 50000 BTC, but you won't even be able to get a cent out of it.

You may be able to make a lot of money off the wild swings now but as more and more of the big investors get burned, they'll cut and run sucking the demand dry.
Posted on Reply
#24
thatsrightt
I am so unbelievably sick of this Marxist ideology seeping into everything. The type of "greed" you're talking about created everything you use daily. No system on the planet today has created more wealth for countries and it's citizens than allowing people to conduct business freely. The irony is that what you propose for Bitcoin is literally the fucking reason Bitcoin was created. What's the point of having Bitcoin if governments can use it for power? It might as well be centralized. Not trying to be mean, but all you sound like is a kid who loved having it all to himself, until other people realized they like it. Now you're not cool anymore, so you've got to move onto something else to satisfy your desire to feel special. The simple fact is that cryptocurrency has done plenty of good, but let's pretend it has done nothing but evil. That literally has nothing to do with "greed." The people buying up tons of GPUs to make money aren't the ones trying to do "evil." Your entire notion against greed in the sense you use it is insane. Nothing has killed more people than envy. That's the true characteristic of evil. Not greed.
Posted on Reply
#25
R-T-B
FordGT90Concept said:
Because where there's profit there is greed. There is no profit in BOINC, only hope and that's payment enough for most people. For those that isn't, well, probably better off without them. They can go make a business, buy their own hardware, and sell their computational product (cloud processing).
CPU-coins (Bitcoin included in it's respective era) have never been profitable. The current ones aren't, either. There is a simple reason for this: 1P systems are not cheap, no matter how many cores you cram in them, it reduces everyone to a high investment to "double hashrate" so to speak. You either need another full 1P rig which spreads market demand over several parts, or a 2p righ which will likely cost even more than 2 1P rigs. I went over this in my article. In short, any kind of BOINC based coin would probably not even pay electric. It would just be something, maybe nothing more than a badge of honor with the nice benefit of being a money transport system with cheap fees while we're at it.

Again, what do you see wrong with this?
Are you forgetting Ryzen, ThreadRipper, and EPYC?
Did you seriously just ask me that? o_O
The many-core race is on. Just 11 years ago, dual-cores came of age. Today, you can buy an Xbox 360 with an octo-core.
An Xbox 360 was used to hash bitcoin back in the day. It performed worse than a single core, due to it having insane power draw and a very inefficient atomlike in-order CPU design. And that was bloody BITCOIN. It would be easy to make it harder.
Or a phone.
RISC-shit, same story (tried as well BTW).
Or Ryzen.
Now you're cooking, but it's still limited to a single machine, raising cost investment up front, and lowering profitability overall because you have to recoup a huge investment that you likely NEVER WILL MAKE BACK.
Instead of having a GPU shortage, we'll have a CPU shortage.
No, because most won't bother to build more than one rig, which they'll probably use for their everday activities mostly and not for the theortical coin.
Where the processing occurs really doesn't matter.
No, but the upfront investment does.
I mean, the only way to reasonably restrict processing right now is to make branching logic that runs like shit unless it's on a quantum processor (which there's only like a dozen of those in the world). Oh right, those machines are doing real science...
I'm guessing BOINC is not real science to you now? Why the sarcasm?
...so...you see...cryptocurrency is a solution looking for a problem...that doesn't exist...
Oh boy. Banks and swipe fees are not a problem, or don't exist? I don't know which I disagree with more, frankly...

thatsrightt said:
What's the point of having Bitcoin if governments can use it for power?
Mainly a cheap and efficient payment system. I am neither a Marxist, nor a libertarian. I'm a normie. I'm a guy who is into technology and can see benefits without becoming ideologically attached to them. I'm a boring frog that posts news and sometimes has an opinion. It does not agree with a lot of what you said, sorry.
Now you're not cool anymore, so you've got to move onto something else to satisfy your desire to feel special.
I've never been cool. I'm a fat nerdy guy. I do have a job now though. That's enough.
The simple fact is that cryptocurrency has done plenty of good, but let's pretend it has done nothing but evil.
I think you need to take a breather and reread my entire post. I'm actually a believer in general purpose cryptocurrency.

Ironically, walking this middle-ground has probably made more people hate me than anyone thinking I am "cool." :laugh:
Posted on Reply
Add your own comment