I had this passed to me earlier this week. The author is one of the early creators of decentralized consensus proof of work systems (half a decade before bitcoin) among a host of other accolades.
https://blog.dshr.org/2022/02/ee380-talk.html?m=1
Fun quotes:
With regards to e waste and bitcoin: “ That's an average of one whole MacBook Air of e-waste per "economically meaningful" transaction.”
With regards to dropping a new cryptocurrency that used proof of space (ssd and hdd in particular for this quote): "we've kind of destroyed the short-term supply chain"
With regards to immutability and crime: “ Vulnerabilities are equally inevitable, as we see with the $38M, $19M and $130M hacks of Cream Finance last year, the $115M hack of BadgerDAO, the $196M hack of BitMart, the recent $323M hack of Wormhole, and of course the $600M hack of Poly Network.”
With regards to pseudonymity and not anonymity: “ 90% of transaction volume on the Bitcoin blockchain is not tied to economically meaningful activities but is the byproduct of the Bitcoin protocol design as well as the preference of many participants for anonymity.
In other words, 90% of Bitcoin's carbon footprint is used in a partially successful attempt to compensate for its deficient anonymity.”
With regards to decentralization (and btc, eth): “ It isn't just the mining pools that are centralized. The top 10% of miners control 90% and just 0.1% (about 50 miners) control close to 50% of mining capacity.”
“ The centralization of Ethereum's mining pools and exchanges enabled Poly Network to persuade them to blacklist the addresses involved. This made it very difficult for the miscreant to escape with the loot, much of which was returned. But it also vividly demonstrated that in most blockchains it is the mining pools that decide which transactions make it into a block, and are thus executed. The small number of dominant mining pools can effectively prevent addresses from transacting, and can prioritize transactions from favored addresses. They can also allow transactions to avoid the public mempool, to prevent them being front-run by bots.”
Overall paper conclusions:
“ Although the techniques used to implement decentralization are effective in theory, at scale emergent economic effects render them ineffective. Despite this, decentralization is fundamental to the cryptocurrency ideology, making mitigation of its externalities effectively impossible. And attempts to mitigate the externalities of pseudonymous cryptocurrencies are lijkely to be self-defeating. We can conclude that:
Permissioned blockchains do not need a cryptocurrency to defend against Sybil attacks, and thus do not have significant externalities.
Permissionless blockchains require a cryptocurrency, and thus necessarily impose all the externalities I have described except the carbon footprint.
If successful, permissionless blockchains using Proof-of-Work, or any other way to waste a real resource as a Sybil defense, have unacceptable carbon footprints.
Whatever Sybil defense they use, economics forces successful permissionless blockchains to centralize; there is no justification for wasting resources in a doomed attempt at decentralization.”
Super interesting talk / blog / paper and I think worth a read if you have the 30 mins and are interested in the externalities of crypto, and how inbuilt mechanisms are causing centralization of networks that are supposed to be “decentralized” by design. Any of the folks here that are more into the crypto space think he’s heavily misrepresenting some of this stuff in his criticisms?