Non-State 2-1 (2 Mar 2018): Technological Adolescence + Bitcoin Mining

By Péter MARTON

In today's brief post I am invoking the spirit of the late scientist Carl Sagan. Citing his words, it is interesting to reflect on the implications of the ongoing bitcoin rush that may make you wonder if the bursting of the bitcoin bubble (anticipated by some) may be the worst thing that could happen.

1. You can read here from Carl Sagan, addressing the question of whether humanity should invest an effort into trying to find out about the presence or absence of alien life out there in the universe. Sagan quickly concludes that given the enormous distances in light years, interstellar monologue will in any case be more (twice as) likely than an interstellar dialogue. Even so, he ultimately comes to the conclusion that receiving a message from a superior civilisation may determine humanity's fate, for in that message one may find the answers as to how the period of "technological adolescence," with its dangers, could be survived by us. In his words:

"There are some who look on our global problems here on Earth - at our vast national antagonisms, our nuclear arsenals, our growing populations, the disparity between the poor and the affluent, shortages of food and resources, and our inadvertent alterations of the natural environment of our planet - and conclude that we live in a system which has suddenly become unstable, a system which is destined soon to collapse. There are others who believe that our problems are soluble, that humanity is still in its childhood, that one day soon we will grow up. The existence of a single message from space will show that it is possible to live through technological adolescence: the civilization transmitting the message, after all, has survived. Such knowledge, it seems to me, might be worth a great price."

Some read into this a solution of the Fermi paradox of why we haven't met any alien civilisation yet if life is not an improbable outcome in our universe. The answer being that advanced civilisations (advanced primarily in a technological sense) may have a tendency to self-destruct.

2. And then Bitcoins. Because... Bitcoins. There are all sorts of reasons for the price of Bitcoins climbing, one of them being that it may be an entirely rational investment decision for now to get them, expecting the price of a coin to mount (or the bubble to grow). But if you think back to where this started, the initial reasons may look far more ridiculous. Let's have Bitcoins coz it's new, it's the thing to do, and it's not under central control... not under the control of the System, you know, and that's really kool, coz then everyone shares control.

Well, given where the Bitcoin phenomenon grew by know, tracking changes in the blockchain (the digital register of all the transactions in the system) is certainly not available to everyone... just anyone with the resources (time, money). Cheating is perfectly possible. So bitcoin mining (read: auditing) becomes vital.

And the way all that work is rewarded:

"Once a miner has verified 1 MB (megabyte) worth of Bitcoin transactions, they are eligible to win the 12.5 BTC. (...) [To actually get the 12.5 BTC, one has to] be the first miner to come up with a 64-digit hexadecimal number (a "hash")  that is less than or equal to the target hash. It's basically guess work.The bad news: Because it's guesswork, you need a lot of computing power in order to get there first. To mine successfully, you need to have a high "hash rate," which is measured in terms of megahashes per second (MH/s), gigahashes per second (GH/s), and terahashes per second (TH/s)."

The Bitcoin story reminds me of how the whole internet evolved. Many expected a bright, democratic future with a more open public discourse. And many now live in filterbubbles and know the internet as basically Google plus Facebook.

Among the consequences, the growth of a bitcoin-mining service industry with very low employment needs and... high environmental impact. This high. The industry eats more electricity than Ireland or Hungary (and many other comparable countries). It locates to areas like Plattsburgh, N.Y. state, where hydroelectric power can be eaten on the cheap.

And it eats much of that power completely redundantly, in a non-productive way, due to the competitive basis on which it is decided whether work is paid or not. Even as the price of this selectively-paid work has gone down over the years:

"When Bitcoin was first mined in 2009, mining one block [1MB data] would earn you 50 BTC. In 2012, this was halved to 25 BTC. in 2016, this was halved to the current level of 12.5 BTC. In 2020 or so, the reward size will be halved again to 6.25 BTC."

Full disclosure: I'm not a Bitcoin user myself. I may be ignorant of certain issues related to the way the system works. In that case I am happy to be lectured about what I may have missed. But it's hard to see how the bigger picture emerging from this (that this is an enormous waste of natural resources with major negative/environmental externalities) wouldn't be concerning from the perspective of sustainable development.

In summary: I can't seem to find a place for "growing up" (as hinted at by Sagan) in my equations, unless it comes in an actually post-human era (where human beings may exist, but transformed, perhaps by technology, including biotechnology). It just doesn't follow from human nature to not do things once they become possible (such as taking part in blockchain-based decentralised monetary systems thx 2 the interwebz), or to not try to benefit individually even from things collectively harmful or destructive.