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en:philosophy:cryptocurrencies [2024/06/13 10:47]
throgh [Generic definitions and explanations] 		en:philosophy:cryptocurrencies [2024/12/11 02:51] (current)
throgh [Economic scale]
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 </code> </code>
  
-So now with the information explained we can furthermore add another part as noted before the "digital ledger" or also the blockchain. As the data created needs to be saved and distributed for further processing. That's the common task included in the phrase as Bitcoin is per definition designed to be "currency" and blocks containing the following information:+So now with the information explained we can furthermore add another part as noted before the "digital ledger" or also the blockchain. 
 + 
 +{{ :en:philosophy:blockchain_description.png |}} 
 +(//Image is showing the process of a new entry added into the blockchain, source: Hyperbola-project//) 
 + 
 +The conclusion from the image above is clear showing that the more transactions created the bigger the whole blockchain gets consuming data to be saved and preserved. The whole mechanism is oriented to be fraud-safe, so all transactions need to be preserved. So the whole data processed gets in the whole amount of space needed bigger while also the computations needed adding more transactions get more complex.  
 + 
 +As the data created needs to be saved and distributed for further processing. That's the common task included in the phrase as Bitcoin is per definition designed to be "currency" and blocks containing the following information:
  
   * The hash of the previous block (//forming a chain of blocks//)   * The hash of the previous block (//forming a chain of blocks//)
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 Until this point we have described most only "//proof of work//". So what is about "//proof of stake//"? Is this possibly more promising? The short but clear answer is also: **No, it is not.** But for this we also need to identify another prominent word being in usage as being [[https://en.wikipedia.org/wiki/Fiat_money|fiat money]]: The phrase is mostly, poorly but also wrong used with a complete negative connotation in comparison with cryptocurrencies being described as the "even better and safe variant". Is this really the reality or just wishful thinking? Let's define that a bit more clear. Until this point we have described most only "//proof of work//". So what is about "//proof of stake//"? Is this possibly more promising? The short but clear answer is also: **No, it is not.** But for this we also need to identify another prominent word being in usage as being [[https://en.wikipedia.org/wiki/Fiat_money|fiat money]]: The phrase is mostly, poorly but also wrong used with a complete negative connotation in comparison with cryptocurrencies being described as the "even better and safe variant". Is this really the reality or just wishful thinking? Let's define that a bit more clear.
  
-  * Proof-of-work currencies derive value from the waste of valuable resources, e.g. electricity. +  * **Proof-of-work** currencies derive value from the waste of valuable resources, e.g. electricity. 
-  * Proof-of-stake currencies attribute value to the consensus of the stakeholders.+  * **Proof-of-stake** currencies attribute value to the consensus of the stakeholders.
  
-We will come back later again to the definitions especially as they are relevant for the technical scaling of fallacies included in cryptocurrencies.+More in detail: A consensus mechanism is a method for validating entries into a distributed database and keeping the database secure. In the case of cryptocurrencies, the database is called the blockchain - so the consensus mechanism secures the blockchain. "Proof-of-stake" reduces the amount of computational work needed to verify blocks and transactions. Under "proof-of-work", intense computing requirements keeps the blockchain secure. "Proof-of-stake" changes the way blocks are verified using the machines of individual coin owners, so there doesn't need to be as much computational work done. The owners offer their coins as collateral (staking) for the chance to validate blocks and earn additional "income".
  
-[TODO: Create and insert image of how the blockchain works] 
 ===== Fallacies in different scaling ===== ===== Fallacies in different scaling =====
  
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   * Using password dumps to steal login credentials for legitimate users and then leveraging their accounts for mining   * Using password dumps to steal login credentials for legitimate users and then leveraging their accounts for mining
  
-So we are not only talking about specialized hardware with high and irresponsible energy-consumption but also about essential criminal activities to harm people and infrastructure needed for free and libre projects.+So we are not only talking about specialized hardware with high and irresponsible energy-consumption but also about essential criminal activities to harm people and infrastructure needed for free and libre projects. Also not to keep that aside: Most software used by cryptocurrencies is beyond being minimalist and therefore also violating principles of Hyperbola as project. And also the whole aspect of depending on a further scaling remote infrastructure should not be ignored: The more people engage into services depending on complete network-infrastructure the lesser they are really independent per definition. The promise to act "without any bank" or "without any dependencies" is simple said not true: People are always depending there on services, even when the keyword "decentralized" is used here.
 ===== Social scale ===== ===== Social scale =====
  
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   * Disruption of the global electronics supply chain   * Disruption of the global electronics supply chain
  
-Bitcoin alone as one famous cryptocurrency produces 30.7 kT of electronic waste per year, similar to the Netherlands. Included within are 272g of waste per transaction on average ([[https://www.sciencedirect.com/science/article/abs/pii/S0921344921005103|Source]]).+Bitcoin alone as one famous cryptocurrency produces 30.7 kT of electronic waste per year, similar to the Netherlands. Included within are 272g of waste per transaction on average ([[https://web.archive.org/web/20240510143055/https://www.sciencedirect.com/science/article/abs/pii/S0921344921005103|Source]]).
  
 Proof-of-work cryptocurrencies directly monetize the use of electricty. It fundamentally derives value from of energy waste. Traditional financial systems use energy to maintain the ledger, but the ledger itself is an abstraction for value that exists independently of the energy use. This is inherently a much more efficient design. Proof-of-work cryptocurrencies directly monetize the use of electricty. It fundamentally derives value from of energy waste. Traditional financial systems use energy to maintain the ledger, but the ledger itself is an abstraction for value that exists independently of the energy use. This is inherently a much more efficient design.
 +
 +Nobody has further imagined what kind of infrastructure would be needed if all mankind would use cryptocurrencies: Do we have the technical requirements generating such amount of energy needed? And can we accomplish the growing requirements for the hardware with every new reached level of complexity to be computed? What happens with the discarded hardware? Those appliances are very specialized and not for common usage. All those questions were not answered until today and endanger our environment on-going with the purest form of ignorance and arrogance ([[https://web.archive.org/web/20240620100142/https://www.interface-eu.org/publications/chip-productions-ecological-footprint|publication of the ecological footprint of chip productions]]).
 ===== Perspectives and outcome ===== ===== Perspectives and outcome =====
  
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 We as project have no interest supporting false claims, clear lies and illusions, so people believe further into these. Yes, other projects and systems include software and libraries, but this does not approve anything more than those projects do not take any further stance protecting their users and people in general. Yes, this maybe look alike Hyperbola is trying to patronize or treat individuals nearly not fair, but those accusations and allegations are only more of the same paraphrased tools to keep the status quo working. If you think this is wrong, please stop a moment further and think about many other comparable situations were not questioned and just accepted in the past because of informal fallacies and misguiding arguments. That’s what cryptocurrency is all about: not novel technology, not empowerment, but making money, exploiting people and environment at the same time. We as project have no interest supporting false claims, clear lies and illusions, so people believe further into these. Yes, other projects and systems include software and libraries, but this does not approve anything more than those projects do not take any further stance protecting their users and people in general. Yes, this maybe look alike Hyperbola is trying to patronize or treat individuals nearly not fair, but those accusations and allegations are only more of the same paraphrased tools to keep the status quo working. If you think this is wrong, please stop a moment further and think about many other comparable situations were not questioned and just accepted in the past because of informal fallacies and misguiding arguments. That’s what cryptocurrency is all about: not novel technology, not empowerment, but making money, exploiting people and environment at the same time.
 +
 +Furthermore this article shows that people associate wrong promises with cryptocurrencies: In depth the whole topic is wide complex and hard to understand in all technical aspects and details. So the majority is going not into the details but on the often mentioned illusions and defend those even beyond with more false arguments and accusations against critics. It is beyond realistic that there will be any further change and to engage further into cryptocurrencies is the same senseless as to await from until today not invented technologies saving our environment. This does not mean there should be no research, but to think "cryptocurrencies" could be adapted for all human beings is not working at any point and only making our situation more worse! In this current case a good-meant concept was left for people to take over, the results speak for their own and telling only the common wrong points: Some early adopting persons search for more people participating so they can also adapt more income. Without new participants the whole illusion would fail.