You need the same infrastructure for any electronic payment system.
What you don’t need for anything is crypto “mining”, which is almost pure overhead. That’s what the article is about.
Comment on Over 2 percent of the US’s electricity generation now goes to bitcoin
Mango@lemmy.world 9 months ago
Hope much goes to the dollar?
General_Effort@lemmy.world 9 months ago
Mango@lemmy.world 9 months ago
It’s not pure overhead. It’s the means of initial distribution and also mining is the backend for handling transactions. Not that I think it’s efficient by any means. It’s just that it was necessary for Bitcoin to ever become something that mattered.
Sanyanov@lemmy.world 9 months ago
Mining is barely transactional in nature. Pretty much all of it is calculating hashes, which, on one hand, is super important as part of Proof-of-Work consensus, the most decentralized one we have, but on the other we have other reasonably secure options that waste two orders of magnitude less power.
General_Effort@lemmy.world 9 months ago
It’s not necessary to perform any of the functions of crypto, including money laundering. That makes it pure overhead; pure waste. There are offshore banks that facilitate tax fraud and other criminal activity. Crypto, somehow, allows exchanges to escape the scrutiny that falls on these banks. Objectively, there is no good reason why all this waste should let you avoid scrutiny of regulators or police.
TypicalHog@lemm.ee 9 months ago
This doesn’t mean we can’t do better than both.
Mango@lemmy.world 9 months ago
We can do better than capitalism entirely. It’s just that we can’t. Gotta get rid of the mentality behind it first.
TypicalHog@lemm.ee 9 months ago
What about capitalism but ADA instead of USD? Cardano uses like 10k times less energy than Bitcoin.
Sanyanov@lemmy.world 9 months ago
Crypto capitalism is super bad idea exactly because it’s uncontrollable, i.e. all the bad stuff of capitalist economy, uncaged.
It encourages money hoarding, which cripples the capitalist economy, it does not allow to control emission, which is actually bad because it’s essential to driving economy out of crises, it does not allow to block criminals’ access to money and transactions, it severely complicates taxation and other important economic actions.
Crypto capitalism has the potential to exacerbate inequality, and cause a giant slew of problems sending modern economy into chaos. But yes, your 500 ADA salary will be truly yours.
I’m pro-crypto, by the way. While posing new risks, crypto can be super helpful as means of unsanctioned money transfer, breaching artificial limitations, keeping governments in check by always being able to support protesters, etc. But making it the world go-to currency is a bad idea.
matjoeman@lemmy.world 9 months ago
All that energy for bitcoin only supports 7 tx/s. Digital dollar payments do tens if not hundres of thousands per second.
makeasnek@lemmy.ml 9 months ago
On main chain. Via lightning you can support all the capacity of Visa/Mastercard/banks and then some.
General_Effort@lemmy.world 9 months ago
Are you paid to post that nonsense?
For those in blissful ignorance: This uses so-called channels between participants. Opening a lightning channel means, basically, putting bitcoin in “escrow” on the blockchain. This requires multiple transactions on the blockchain. Bitcoin doesn’t even have enough capacity to open a channel for each baby being born.
The amount that both sides put in “escrow” is the max payment imbalance that a channel can accept. Say, you want to use a channel to buy a car for $20k, then you need a channel that both you and the other guy have put in $20k in bitcoin.
If some calamity happens, these funds are lost in nirvana.
Sanyanov@lemmy.world 9 months ago
While Lightning doesn’t need you to open a channel for every new recipient and has smart routing through other participants, I still think it’s an inconvenient solution we don’t have to take.
We have Solana, a 300.000+ TPS Layer-1. We have much smarter Ethereum Layer-2’s that don’t require this bullshit. We have many ways to tackle this problem, it’s the hyperfocus on Bitcoin that, in my opinion, makes people to go for Lightning network anyway.
makeasnek@lemmy.ml 9 months ago
It literally requires one to open and one to close, so like $1 most of the time in fees. If you have a custodial wallet, it requires zero. You can keep a channel open forever. Within that channel, you can have essentially infinite transactions between you and any other party and you can use the channel to route payments to anybody on lightning network. All those transactions settle within a second and have fees measured in pennies. A channel doesn’t need to be opened for every baby being born, there are additional improvements coming down the pipe (like channel factories) which enable you to use one on-chain tx to make hundreds of channels. People do not understand the scale lightning works at.
All of this is abstracted away for you as a user, you don’t have to worry about it, especially for custodial wallets. Most people earn and spend roughly the same amount each month, so liquidity isn’t anything they ever need to think about. There are also automated ways to rent inbound liquidity which are incredibly cheap, that can be done with self-custody wallets.
Wrong. If you want to buy a car for $20k, you have to put $20k into lightning. Then you send that 20k to the guy with the car. Now you can receive up to 20k in payments.
Calamity doesn’t happen, funds don’t get lost. Custodial wallets literally never encounter this, it’s all handled by your custodian. Non-custodial wallets also rarely encounter this, all the incentives are lined up to make “force closes” (which is what I assume you are referring to) rare. And of those force closes, the only risk is that your counterparty publishes an old version of the channel. You have like five days to correct and publish your more recent version to claim your funds. And if they tried to cheat you out of your funds, you get your funds and they pay a penalty. Given that watchtowers are basically automated, this never happens. Your funds from one of your channels might be stuck on-chain for a few days at worst, this is not a nightmare scenario. Banks and traditional payment processors have random holds all the time, especially when dealing with anything international. The difference is, the funds in lightning are always yours because you have the key. There is no scenario where when properly used, you lose funds in lightning.
Mango@lemmy.world 9 months ago
tx/s?
Sanyanov@lemmy.world 9 months ago
Transactions per second
WaterWaiver@aussie.zone 9 months ago
Transactions per second
makeasnek@lemmy.ml 9 months ago
Expensive is relative. It’s expensive to send a $5 transaction and pay $1 in fees. However, you can move a million dollars in value and pay that same $1 in fees. That $1 in fees can also open a lightning channel which can contain essentially infinite transactions within it. For small transactions, Lightning transactions settle in under a second for fees measured in pennies.
Compared to a bank wire, western union, or other remittance services, $1 is an absolute steal.