# Minister Donohoe publishes discussion paper on virtual currencies and blockchain technology



## Brendan Burgess (22 Mar 2018)

Thursday, 22 March 2018



*Minister Donohoe publishes discussion paper on virtual currencies and blockchain technology*

*Working Group to monitor cryptocurrency developments established within Department of Finance*



The Minister for Finance and Public Expenditure & Reform, Paschal Donohoe T.D today (Thursday) published a discussion paper prepared by his Department on virtual currencies and blockchain technology, and announced the subsequent creation of an internal working group to monitor further developments in this area.

This follows the Department’s active research into virtual currencies and the blockchain ecosystem that exists in Ireland, Europe and globally. The discussion paper comprises an overview of virtual currencies and the blockchain technology supporting them; summarises actions taken by selected countries around the world; and sets out the key risks and opportunities these technologies present.

The discussion paper concludes with a recommendation to establish an internal working group to coordinate the Department’s engagement in this area, both locally and abroad.

Minister Donohoe commented: ‘Consumers and investors should be aware that buying and exchanging virtual currencies comes with considerable risks. Virtual currencies remain an unregulated activity, and the prices at which they are traded remain highly volatile’.

“However, while investing in virtual currencies may involve risks, the blockchain technology that underpins them has the potential to be a catalyst for innovation in the financial services sector and elsewhere. One of Ireland’s strengths is its ability to innovate and adapt to emerging trends across finance and technology and I have spoken before about the importance of developing clusters in key growth areas as a way of nurturing Ireland’s knowledge economy.

“The Government’s IFS2020 vision is to be recognised as a global location of choice for specialist international financial services by building on our strengths in talent, technology, innovation and excellent client services, while focussing on capturing new opportunities in a changing marketplace and embracing the highest standards of governance. By engaging with virtual currencies and blockchain technology, Ireland, through the work undertaken by the Department of Finance, can be instrumental in creating a predictable and open blockchain ecosystem in Ireland and furthering that ambition.”

Ends


----------



## Brendan Burgess (22 Mar 2018)

That will probably lead to a big spike in the price of Bitcoin.


----------



## Sunny (22 Mar 2018)

Do you think Pascal understood a word he was saying? Trying to count the buzz words... We have 'innovate', 'clusters', 'nurturing', 'embracing', 'catalyst', 'changing', 'engaging', 'ecosystem'


----------



## Leo (22 Mar 2018)

Sunny said:


> Do you think Pascal understood a word he was saying? Trying to count the buzz words... We have 'innovate', 'clusters', 'nurturing', 'embracing', 'catalyst', 'changing', 'engaging', 'ecosystem'



He probably used other words, some spin-master then used search & replace


----------



## Firefly (22 Mar 2018)

Jobs, jobs, jobs. Oh and a new carbon tax


----------



## Sunny (22 Mar 2018)

Stand by for large jobs announcement from Tether due the Ireland having a better ecosystem than British Virgin Islands.....


----------



## Negotiator (22 Mar 2018)

So it's official.....Ireland is to become the 'Crypto Capital of the World'. Any chance you can dish out a few Bitcoin in the budget there Pascal is there?  

Seriously though it's good to see they are at least taking notice of it and exploring the possibilities. Remains to be seen what may come of it I guess!


----------



## TheBigShort (23 Mar 2018)

Firefly said:


> Jobs, jobs, jobs. Oh and a new carbon tax



You are just not getting the whole clean renewable energy thing, are you?


----------



## Firefly (23 Mar 2018)

TheBigShort said:


> You are just not getting the whole clean renewable energy thing, are you?



I'm sure some of the energy is/will come from renewable sources, but if Bitcoin currently uses more energy than that consumed by Ireland, can you show who provides this amount of renewable energy for these miners to use?


----------



## TheBigShort (23 Mar 2018)

Firefly said:


> I'm sure some of the energy is/will come from renewable sources, but if Bitcoin currently uses more energy than that consumed by Ireland, can you show who provides this amount of renewable energy for these miners to use?



Probably not, but thats not the point. Why should bitcoin mining rigs be obligated to use carbon free renewables anymore than any other energy consuming activity? 

Take the proposed Apple Data Centre for Athlone for instance. Depending on which report you read, it could increase Irelands energy use by anything between 6-20%. 
Thats just one Apple data centre in Ireland. 
Jobs, jobs, jobs for sure, but seeing as Ireland is not capable of producing 100% clean renewables, yet, then how concerned are you about the carbon footprint of Apples activities in Ireland? Which will dwarf the carbon footprint of bitcoin mining occuring in Ireland (if any).


----------



## Firefly (23 Mar 2018)

TheBigShort said:


> Probably not, but thats not the point. Why should bitcoin mining rigs be obligated to use carbon free renewables anymore than any other energy consuming activity?
> 
> Take the proposed Apple Data Centre for Athlone for instance. Depending on which report you read, it could increase Irelands energy use by anything between 6-20%.
> Thats just one Apple data centre in Ireland.
> Jobs, jobs, jobs for sure, but seeing as Ireland is not capable of producing 100% clean renewables, yet, then how concerned are you about the carbon footprint of Apples activities in Ireland? Which will dwarf the carbon footprint of bitcoin mining occuring in Ireland (if any).




Here...a nice, lefty newspaper for you...

https://www.theguardian.com/technol...electricity-usage-huge-climate-cryptocurrency


_And while marijuana farmers and data centre engineers managed to reduce their power demands, the fundamentally wasteful nature of bitcoin mining means there’s no easy technological solution coming.

*Mining computers have become more power-efficient, with the latest generation of machines able to do roughly 20% more useless calculations per MWh of electricity. But in the zero-sum game of bitcoin mining, that just means a miner can afford to run more machines at the same time, leaving their power usage roughly stable.*

In the end, there’s only one real reason why bitcoin’s energy consumption would fall, and that is if the price of the currency drops._


Be honest, if you were on the other side of this debate, you would be arguing the energy use of Bitcoin ad nauseam


----------



## TheBigShort (23 Mar 2018)

There are two debates in that article. The bitcoin has value / is worthless debate and the energy usage debate. The 'worthless' view supports the energy wastage view.
The bitcoin has 'value' view supports the energy usage view.
Clearly the writer is in the 'worthless' camp, so can support his energy wastage view. And correct, if I thought bitcoin was 'worthless' I would agree that it is a waste of energy - unless it is renewable energy, which is never wasted.
Im in the 'value' camp for bitcoin so can support the energy use.
Perhaps you can let us know which side of the debate you are on with bitcoin? Then perhaps we can take the energy use case further?
Bearing in mind, clean, renewable energies are never wasted. The only problem is the cost involved in harnessing those energies.


----------



## Sunny (23 Mar 2018)

TheBigShort said:


> There are two debates in that article. The bitcoin has value / is worthless debate and the energy usage debate. The 'worthless' view supports the energy wastage view.
> The bitcoin has 'value' view supports the energy usage view.
> Clearly the writer is in the 'worthless' camp, so can support his energy wastage view. And correct, if I thought bitcoin was 'worthless' I would agree that it is a waste of energy - unless it is renewable energy, which is never wasted.
> Im in the 'value' camp for bitcoin so can support the energy use.
> ...



You seem to be under the assumption that bitcoin miners are all environmentally conscious and using renewable energy. They are not. Check out mines in China. Even if they were, renewable energy doesn’t have a zero carbon footprint. And it gets worse if renewable energy sources are being developed simply to meet the demand of bitcoin miners which is an economically and socially useless activity. It is only done to make money on the back of speculative prices. It contributes absolutely nothing. You can defend the technology but the technology can be tested and and developed in a much more environmentally friendly way without this crazy gold rush mentality.


----------



## Leo (23 Mar 2018)

TheBigShort said:


> The bitcoin has 'value' view supports the energy usage view.



It really doesn't though, as Bitcoin works as well (or poorly depending on your view) today as it did years ago on a tiny fraction of the energy use. More energy consumption does not result on Bitcoin's price rising. Current energy usage bears no relation to that required for it to function.

That's like trying to make an argument that an old inefficient fridge is more valuable than a new one as it uses more energy to perform the same function.


----------



## Negotiator (23 Mar 2018)

For me this is a difficult one because I don't think Bitcoin should be singled out for it's energy use any more than any other business or operation. However it does seem criminal that it uses so much electricity when other cryptos can use a fraction of the energy to mine that Bitcoin. 

I like the idea of the mining farms being operated from very green countries like Iceland where it's practically all clean energy but it's not realistic to think all mining will be done in this way. 

I'm not against Bitcoin mining just for the sake of the amount of energy it uses but if it can be done in a much more efficient way then I'm all for that. I think it will get there eventually too or it will simply be overtaken by other better more efficient cryptos some of which are already in the making!


----------



## TheBigShort (23 Mar 2018)

Sunny said:


> You seem to be under the assumption that bitcoin miners are all environmentally conscious and using renewable energy.



No, not at all. Im just making a nonsense of the 'bitcoin uses energy and is destroying the planet' view being proffered while simultaneously ignoring all other energy use.


----------



## TheBigShort (23 Mar 2018)

Leo said:


> It really doesn't though, as Bitcoin works as well (or poorly depending on your view) today as it did years ago on a tiny fraction of the energy use. More energy consumption does not result on Bitcoin's price rising. Current energy usage bears no relation to that required for it to function.
> 
> That's like trying to make an argument that an old inefficient fridge is more valuable than a new one as it uses more energy to perform the same function.



Im not putting that arguement at all. Im simply rubbishing the 'bitcoin uses too much energy' arguement.


----------



## TheBigShort (23 Mar 2018)

Negotiator said:


> I don't think Bitcoin should be singled out for it's energy use any more than any other business or operation.



That is my point exactly.


----------



## RETIRED2017 (23 Mar 2018)

[QUOTE="TheBigShort, Probably not, but thats not the point. Why should bitcoin mining rigs be obligated to use carbon free renewables anymore than any other energy consuming activity?

Take the proposed Apple Data Centre for Athlone for instance.

Hope you know your bitcoin as well as your know Athlone or should I say Athenry,[/QUOTE]

Please don't mix up the Marmalade coin with bitcoin,


----------



## tecate (24 Mar 2018)

On the energy usage, I did have concerns but I see things developing in the right direction.
Firstly, as others have pointed out, the initial failing is the assumption that the energy is being used for nothing - it's not.  I want ye all to leave your christmas tree lights in the attic permanently because that energy usage is pointless (all in the eye of the beholder).
Someone suggested that miners were based out of china using dirty coal based electricity - true.  However, China is turfing them out - and they're finding homes in Canada and Iceland - using cheap renewables. 
Should crypto miners be forced to use renewables only?  I have no problem with that.  That's down to municipal authorities to decide though (and some have).  Renewables are coming on generally in any event.  It may not be possible to run completely on renewables right now - but it will be possible to get quite close to that in the not too distant.  Further refinement in terms of mining will also follow with regard to energy usage.


----------



## TheBigShort (24 Mar 2018)

tecate said:


> That's down to municipal authorities to decide though (and some have). Renewables are coming on generally in any event. It may not be possible to run completely on renewables right now - but it will be possible to get quite close to that in the not too distant. Further refinement in terms of mining will also follow with regard to energy usage.



I agree, and in terms of adopting to clean efficient energy, bitcoin mining can adopt easily to it, unlike say the aviation industry.


----------



## Sunny (24 Mar 2018)

tecate said:


> On the energy usage, I did have concerns but I see things developing in the right direction.
> Firstly, as others have pointed out, the initial failing is the assumption that the energy is being used for nothing - it's not.  I want ye all to leave your christmas tree lights in the attic permanently because that energy usage is pointless (all in the eye of the beholder).
> Someone suggested that miners were based out of china using dirty coal based electricity - true.  However, China is turfing them out - and they're finding homes in Canada and Iceland - using cheap renewables.
> Should crypto miners be forced to use renewables only?  I have no problem with that.  That's down to municipal authorities to decide though (and some have).  Renewables are coming on generally in any event.  It may not be possible to run completely on renewables right now - but it will be possible to get quite close to that in the not too distant.  Further refinement in terms of mining will also follow with regard to energy usage.



Ok so bitcoin mining is now the same to having Christmas trees. Just because we currently waste energy isn’t an argument to waste more. God help us if that is the logic we are now using.


----------



## tecate (24 Mar 2018)

It's not 'wasting energy' - it's being used for a purpose.  You disagree with that purpose and then classify it as a waste.
The analogy stands - I think we should knock off crimbo tree lights permanently but I doubt you'll get the rest of the world to agree with me.



Sunny said:


> Ok so bitcoin mining is now the same to having Christmas trees. Just because we currently waste energy isn’t an argument to waste more. God help us if that is the logic we are now using.


----------



## TheBigShort (24 Mar 2018)

Sunny said:


> Ok so bitcoin mining is now the same to having Christmas trees. Just because we currently waste energy isn’t an argument to waste more. God help us if that is the logic we are now using.



Thats only if you think Christmas tree lights are a waste. Personally I think they add value to the festive season and im sure the traders in towns and cities see the value in lighting up shopping malls - its good for trade I would say.


----------



## MrEarl (26 Mar 2018)

Hello Mr. Burgess,

Thank you for posting about this, as I'd not seen it before now.

Delighted to see this paper published and will read it when time permits.


----------



## Leo (27 Mar 2018)

tecate said:


> the initial failing is the assumption that the energy is being used for nothing - it's not.



I don't think that's accurate. The argument I see most is that is it using many, many multiples of the energy actually required to perform the function.


----------



## tecate (1 Apr 2018)

Leo said:


> I don't think that's accurate. The argument I see most is that is it using many, many multiples of the energy actually required to perform the function.


Well, energy usage being tackled in different ways in any event.  Latest play in that respect coming from Intel.


----------



## Gus1970 (9 Apr 2018)

Hi leo, i think i know the conundrum that is confusing the people that make the argument for energy waste.

Bitcoin mining is bases on game theory. The assumption ab ovo is that the participant will be selfish (selfish is good for game theory).

The system self regulates and the energy consumed by miners cannot be judged excessive or


----------



## Gus1970 (9 Apr 2018)

Sorry trigger happy, continuing...

...excessive or too low for that matter. Bitcoin is trustless, people don’t know what the others will do and are rewarded for doing their job in their own interest (see selfish above)

The cost of the energy consumed is the result of all the miners being selfish and trying to get profit. If price goes down, less miners will mine and difficulty goes down.

It is mathematics, you can’t wake up in the morning and say “i think bitcoin uses too much energy without having any insight on how the joint peer too peer, trustless and uncensorable catachteristics of the ecosysrem regulate the quantity of energy necessary based on a mathematical formula. 

Would you say that


----------



## Gus1970 (9 Apr 2018)

Did it again sorry from mobile and from hospital bed not a great combination 

... what would you say if somebody cane out and said “the hypothenuse as calculated by pythagoras theorem is eccessive, it should be less”
I bet you’d laugh, and so do i when i hear that bitcoin energy consumption is excessive. The formula is in the original nakamoto problem, it’s only 9 pages, do some due diligence please :-}

Best regards,

Gus


----------



## Gus1970 (9 Apr 2018)

Just to add some more to the discussion. Proof of work is used by bitcoin but is not the only potential approach to resolving the reward problem. Other cryptos, for example ethereum and tezos are at advanced stage in developing Proof Of Stake that rather than utilising energy to calculate a cryptographic riddle use the skin in the game that the users have to reward them. I am ambivalent, i believe both reward system have their merits, i favour POW at the moment because it is proven as it has been working without problems for 9 years, once POS is out i will observe, analyse, probably contribute to it and i hope it will also work as well as POW and reduce the electricity input necessary

Best regards,

Gus


----------



## Duke of Marmalade (9 Apr 2018)

Gus1970 said:


> It is mathematics, you can’t wake up in the morning and say “i think bitcoin uses too much energy without having any insight on how the joint peer too peer, trustless and uncensorable catachteristics of the ecosysrem regulate the quantity of energy necessary based on a mathematical formula.


I think a little lesson is needed here for AAM contributors.  The Difficulty of the brain dead hash puzzle (POW) is built into the protocol for two reasons.  Firstly, and this is the only real benefit to the bitcoin community, it underpins the integrity of the blockchain.  Secondly it targets the release of bitcoin to once every 10 minutes.  Satoshi Nakomoto set the Difficulty at a minimum of just over 4 billion hash attempts to get a valid block.  This is called a Difficulty of 1.  It was fit for purpose for many years but then as mining became more lucrative it started to edge up, until last year it went into the stratosphere.  The Difficulty of today's block is 3,511,060,552,899.72 times the original difficulty target.  I put it to you _Gus _that this ginormous target is driven almost entirely by the second objective - to target the release of new bitcoin at 10 minutes.  Are you trying to tell me that this is also broadly the difficulty level needed to secure the integrity of the blockchain?


----------



## Gus1970 (9 Apr 2018)

Thanks for the good question and the well thought preamble where you explain the concept of difficulty very well.

I'll try to answer to my best but it is 21:48 in bangko k and the post op morphine is kicking my behind, I trust you will ask clarifications tomorrow if I am not clear.

first fundamental point: the difficulty cannot be examined on its own. It must be seen as part of a few elements interlaced.

First, mining is part of the reward strategy. The reward strategy is based on the assumptions that miners take decisions in their interest that means will use the minimum processing power to obtain the maximum return. This is how it works, the Nash equilibrium (beautiful mind) regulates such mechanism. Each difficulty reset is determined by the amount of power deployed by the miners, and if the miners are smart (the non smart lose money and die) they are using the minimum economically viable processing power that guarantees them the maximum reward share. The miners actually put the hashing power out and saying it is too much power means saying the miners are losing money, but as you know this is not the case at all.

This is the non scientific answer, let me know if it helps even just a bit, I am willing to take some time tomorrow and try to formulate a better answer but I would appreciate your feedback if we are going to the right direction or not. I could do the math proof but that is already on the paper so I assume it is not what you are looking for, am I right?

Thanks for the open minded convo

Best regards,

Gus


----------



## Leo (9 Apr 2018)

Gus1970 said:


> It is mathematics, you can’t wake up in the morning and say “i think bitcoin uses too much energy without having any insight on how the joint peer too peer, trustless and uncensorable catachteristics of the ecosysrem regulate the quantity of energy necessary based on a mathematical formula.
> 
> Would you say that



I understand how it works, and maintain my opinion that Bitcoin's current electricity use is far in excess of what is justifiable to run a system that can only aspire to a theoretical maximum of 7 transactions per second.


----------



## Gus1970 (9 Apr 2018)

That’s fine i respect your opinion as your opinion.

Can you somehow mathematically demonstrate by how much the need is exceeded? Because tha math demonstration of the opposite of what you say exists, in the whitepaper.


----------



## Duke of Marmalade (9 Apr 2018)

_Gus _the point _Leo _and I are trying to make is that POW is currently at a difficulty level far, far, far^20 higher than is needed for its main purpose viz.  to secure the blockchain. The problem is that the rewards at current prices are far, far, far^20 times higher than are needed for that purpose.  

Look. I'm not an eco warrior.  Miners are as entitled to use electricity as rock bands or anyone else so long as the use is not criminal and I don't think anyone is arguing that it is.   

But I am sure that if Satoshi Nakomoto envisaged a bitcoin price of €7,000 s/he would have rewritten that bit of the protocol.  But I am pretty convinced that SN will be proved right in the long term in that the bitcoin price will, if it survives at all, settle at around 1 Yen per bitcoin which presuming s/he is Japanese is what s/he had in mind ab ovo.


----------



## Gus1970 (9 Apr 2018)

Leo said:


> a system that can only aspire to a theoretical maximum of 7 transactions per second.



False because many reasons:
1)
Solution with larger blocks => as many transactions as you want
2) 
Solution with sidechains and or lightning network model => as many transactions as you want


----------



## Gus1970 (9 Apr 2018)

BTW the first solution was already mentioned by satoshi in 2010...


----------



## Duke of Marmalade (9 Apr 2018)

Gus1970 said:


> That’s fine i respect your opinion as your opinion.
> 
> Can you somehow mathematically demonstrate by how much the need is exceeded? Because tha math demonstration of the opposite of what you say exists, in the whitepaper.


Okay I will take you up on your earlier promise.  What are the mathematics in the White Paper that justifies the current Difficulty level?


----------



## Gus1970 (9 Apr 2018)

Duke of Marmalade said:


> _Gus _the point _Leo _and I are trying to make is that POW is currently at a difficulty level far, far, far^20 higher than is needed for its main purpose viz. to secure the blockchain. The problem is that the rewards at current prices are far, far, far^20 times higher than are needed for that purpose.



Sorry can you show me a formal demonstration of why it is too much?

If you say it like this it is simply your opinion, that i respect as such, as your opinion, nothing more. Can we be slightly more scientific when exposing 
Theories?

Best regards,

Gus


----------



## Gus1970 (9 Apr 2018)

Read the whitepaper it is all there


----------



## Gus1970 (9 Apr 2018)

Specifically here https://bitcoin.org/bitcoin.pdf


----------



## Duke of Marmalade (9 Apr 2018)

Gus1970 said:


> Sorry can you show me a formal demonstration of why it is too much?
> 
> If you say it like this it is simply your opinion, that i respect as such, as your opinion, nothing more. Can we be slightly more scientific when exposing
> Theories?
> ...


Yes it is purely my opinion that a Difficulty 3,511,060,552,899.72 times greater than was originally adequate is too much. I see no math in the White Paper which would justify this number.  Since you are the one who are trumpeting the mathematical purity of the protocol I suggest that the burden of mathematical proof that a Difficulty of this level is necessary to secure the blockchain falls to yourself.


----------



## Gus1970 (10 Apr 2018)

Duke of Marmalade said:


> I see no math in the White Paper which would justify this number.



The math is ALL in the paper, read it.
Based on that math the difficulty is what it is now.

Your argument could be  “i believe an alternate formula could generate a better ecosystem and the formula is: ....”

Otherwise it is only your opinion against satoshi’s and the hundreds of developers that have contributed to the project since 09. Still a respectable opinion but lacking any evidence

Best regards,

Gus


----------



## Duke of Marmalade (10 Apr 2018)

Gus1970 said:


> The math is ALL in the paper, read it.
> Based on that math the difficulty is what it is now.


Well that is certainly irrefutable.  The number is what it is because the program says so.  You are not going to answer whether in your opinion you think it is ridiculously too high for purpose in the common sense of that assertion, fair enough.

I like you am a lover of math but clearly in a completely different way.  I like such things as, say, the proof that e is transcendental.  You get your pleasure from computers doing quintillions of trial and error hash attempts.  Math is a broad church for sure.


----------



## Gus1970 (10 Apr 2018)

Duke of Marmalade said:


> ell that is certainly irrefutable. The number is what it is because the program says so. You are not going to answer whether in your opinion you think it is ridiculously too high for purpose in the common sense of that assertion, fair enough.



You are not listening to me or you have not read the paper. It is not a program that decides the difficulty on its own. 

There are miners that decide to invest in X amount of mining equipment that will consume Y amount of energy to obtain Z amount in reward in bitcoin. The miners for their interest will minimise their costs and try to maximise the reward received hence the mining equipment X and the electricity used Y will be the MINIMUM necessary to obtain the reward.

If you’re so sure the miners out there are ifiots and waste electricity you have a massive economic incentive to start mining using less electricity and get more rewards, you’ll be a millionaire in no time.

On the maths. I think we are misunderstanding what we mean by maths. You talk about the cr


----------



## Gus1970 (10 Apr 2018)

Mobile ringing caused posting precox

You talk about the brute force hashing, i talk about the echo-system
The calculation of the hash is the least interesting math in the whole bitcoin, look into the game theory side of it that is much more fascinating and actually regulates how non collaborative systems can create a trustless economy


----------



## Duke of Marmalade (10 Apr 2018)

Game theory is not math, it is psychology.  The Law of Supply and Demand is not math either but it does lead to the calculus of the market price.  

As a professional mathematician I would have expected your position to be "I appreciate the game theory psychology of the bitcoin protocol despite it spawning the ugliest math known to Man".  Instead it comes across that you are using the math aspect to glorify the protocol.


----------



## Gus1970 (10 Apr 2018)

Duke of Marmalade said:


> Game theory is not math, it is psychology. The Law of Supply and Demand is not math either but it does lead to the calculus of the market price.



LOL you are joking, right?


----------



## Leo (10 Apr 2018)

Gus1970 said:


> False because many reasons:
> 1)
> Solution with larger blocks => as many transactions as you want
> 2)
> Solution with sidechains and or lightning network model => as many transactions as you want



We're talking about Bitcoin as it stands today, with the power it consumes today. So the current limitations stand until such time as any changes are implemented. 

The suggestion of increased block sizes are nothing new, I'm not sure there will ever be the consensus required to increase them to the scale that would facilitate the hundreds of thousands of transactions per second needed to take on the credit card processors.

Layer 2 solutions such as Lightning, will facilitate higher transaction volumes, but they're off-blockchain and do nothing to address the underlying energy use in supporting the blockchain.


----------



## tecate (10 Apr 2018)

Leo said:


> We're talking about Bitcoin as it stands today, with the power it consumes today. So the current limitations stand until such time as any changes are implemented.


Change has been implemented by way of the launch of Lightning Network.  It will just take time for it to develop.



Leo said:


> Layer 2 solutions such as Lightning, will facilitate higher transaction volumes, but they're off-blockchain and do nothing to address the underlying energy use in supporting the blockchain.


Doesn't Lightning offer the potential to bring down the average energy consumption of each transaction?


----------



## Leo (10 Apr 2018)

tecate said:


> Doesn't Lightning offer the potential to bring down the average energy consumption of each transaction?



Yes, but technically, a lightning transaction isn't a bitcoin transaction, as it occurs off-blockchain, and never gets recorded onto it. You can look at lightning as a secondary payments system where the funding originates from Bitcoin.  

It will be interesting to see how it develops, I think its greatest challenge will be the likelihood that people won't want to leave too much liquidity in LN due to the higher risks involved, and without that, users are more likely to need to establish direct payment channels to whoever they want to make payment to, with each channel requiring two bitcoin transactions to establish.


----------



## tecate (10 Apr 2018)

Leo said:


> Yes, but technically, a lightning transaction isn't a bitcoin transaction, as it occurs off-blockchain, and never gets recorded onto it. You can look at lightning as a secondary payments system where the funding originates from Bitcoin.


Agree completely...but at the end of the day, the average energy consumption per transaction between on-chain and off-chain will reduce (along with transaction time and transaction cost).


----------



## Gus1970 (10 Apr 2018)

For whoever is interested in learning more about the branch of maths called "game theory" I recommend this for an easy introduction ask questions if you need, if I have time i can help with assignments

https://www.coursera.org/learn/game-theory-1

Best regards,

Gus


----------



## Duke of Marmalade (10 Apr 2018)

Game theory is not a branch of math.  It is a branch of psychology that leads to mathematical analysis of human behavior.  In the case of bitcoin it leads to a math of brain numbing banality.


----------



## Gus1970 (11 Apr 2018)

Goodbye. I understand this forum is not for me.

I see that what motivates people here is not learning and sharing knowledge but getting one over somebody else, even if this means blatantly lying

I am not interested in this type of conversation hence i will not partecipate to this forum any longer

So long,

Gus


----------



## Duke of Marmalade (11 Apr 2018)

Gus1970 said:


> Goodbye. I understand this forum is not for me.
> 
> I see that what motivates people here is not learning and sharing knowledge but getting one over somebody else, even if this means blatantly lying
> 
> ...


Arrivederci


----------



## TheBigShort (11 Apr 2018)

Gus1970 said:


> Goodbye. I understand this forum is not for me.
> 
> I see that what motivates people here is not learning and sharing knowledge but getting one over somebody else, even if this means blatantly lying
> 
> ...



That's regrettable Gus, but understandable, I have to say. I think it's obvious to anyone interested in Bitcoin that you have a valuable contribution to make to the understanding of Bitcoin.


----------



## Duke of Marmalade (11 Apr 2018)

TheBigShort said:


> That's regrettable Gus, but understandable, I have to say. I think it's obvious to anyone interested in Bitcoin that you have a valuable contribution to make to the understanding of Bitcoin.


I agree B/S.  All the same his refusal to concede that a Difficulty level of 3,511,060,552,899.72 just might be a tad OTT showed him to be just as obstinate as the rest of us.


----------



## TheBigShort (11 Apr 2018)

Duke of Marmalade said:


> I agree B/S.  All the same his refusal to concede that a Difficulty level of 3,511,060,552,899.72 just might be a tad OTT showed him to be just as obstinate as the rest of us.



Perhaps, perhaps not. I did think the question of what the alternative difficulty level should be set at to be a reasonable question.
As for your counter that the proof of why it is set at where it is lies with the developers, also a reasonable question. 

So to try a bit of 'game theory' of my own;

Here is Oxford English Dictionary of 'game theory';

*"noun*
_mass noun_

_The branch of mathematics concerned with the analysis of strategies for dealing with competitive situations where the outcome of a participant's choice of action depends critically on the actions of other participants. Game theory has been applied to contexts in war, business, and biology." _
Perhaps if all the participants could signal if they agree with this definition then this forum could resume?


----------



## Duke of Marmalade (11 Apr 2018)

TheBigShort said:


> Perhaps, perhaps not. I did think the question of what the alternative difficulty level should be set at to be a reasonable question.
> As for your counter that the proof of why it is set at where it is lies with the developers, also a reasonable question.
> 
> So to try a bit of 'game theory' of my own;
> ...


Ok, Oxford Dictionary good enuff for me


----------



## MrEarl (11 Apr 2018)

Being obstinate can be a quality in one's character, but also a flaw...

I'm as guilty of being obstinate on occasion as the next person here.

There's an important lesson here for all of us, if we want to see this website continue to grow, attract new people willing to exchange information and engage in healthy debate. 

I used to really like U2's music and regularly went to their Irish concerts. However, as the years went on, I got so sick and tired of listenting to Bono preaching to me, rather than singing and entertaining me, that I stopped going to U2 concerts and have since stopped buying their music.  It's fair to say that both U2 and I have lost out as a result of this.

Perhaps it's time we all reflect on ourselves a little, and ask ourselves if we need to be a little more open minded, or at least willing to accept that we can't always convert others to our way of thinking ?

Seeing someone who engaged in detailed discussion elect to leave AAM is not a good thing.  Hopefully Gus will have a change of heart after allowing a little time to pass.


.


----------



## Leo (11 Apr 2018)

Gus1970 said:


> I see that what motivates people here is not learning and sharing knowledge but getting one over somebody else, even if this means blatantly lying



Understandable, posts like this one do nothing to promote a productive discussion and learning:



Gus1970 said:


> LOL you are joking, right?


----------

