Two days ago I gave into my curiosity and decided to experiment mine Dogecoin.
Knowing that it'd be extremely unlikely for me to solve a blockchain with my old computer, I joined a mining pool (nimblecoin.us) and a GPU miner, and put my Nvidia GT 440 to work. I average 30k hashes a second. So far I've got 30 Doge.
I can't help but feel like any sort of cryptocurrency is kind of a giant waste of time and energy.
I understand the appeal. It's an escape to government issued currency which some people don't have any faith in. I get that.
However, I don't see how crypto addresses the alleged shortcomings of these currencies in any meaningful way.
All of them are tied directly to an exchange rate based on government issued currency. Wherever crypto is accepted, the pricing or amount taken is based on the current exchange rate to another currency. With that being true, the only difference I see is the medium of payment is different, as well as the verification, but otherwise it'd be the same as giving an equal amount of the government currency.
Crypto also seems to be very inaccessible for people to get into. The current largest crypto currency (and the only one I've heard as being accepted for payment) Bitcoin requires insane computational resources to even have a chance at getting any. Check out
rigs for mining Bitcoin. These are EXPENSIVE setups for the equipment alone, not even considering power demands and cooling solutions to keep them running. This makes it possible for only those already wealthy in other currency to get in, and create more wealth for themselves out of thin air.
A related problem is the system of increasing difficulty. This biases it towards those who start in the beginning. Bitcoin is over 600USD at this moment, if you nonchalantly mined some back in 2010 you could be exceptionally rich right now if you could find someone to convert it to cash.
It would also be possible for the creators of a cryptocurrency to mine before releasing it to the general public, creating significant value for themselves if their currency takes off. Although, no crypto other than Bitcoin has actually risen in value.
The hard cap on the about of issued crypto exists to create an eventual scarcity, but this also creates the problem of unavoidable loss. If a wallet key is lost, then all the crypto in that wallet is lost forever, leading to further scarcity.
There are other issued which aren't related to the concept of a currency, but are still related.
-They seem extremely volatile, with value changing by the minute, making pricing difficult.
-Most big players in crypto seem to be into it for the purpose of hoarding coins, and then dumping them when the value is high, instead of using it as an actual payment method.
-Exchanges offer no protection for users. Mt.Gox collapsed recently when it was unable to service users converting BTC to cash en masse, a virtual bank run. It also undermines the entire libertarian concepts behind a crypto currency when users who lost their money
immediately ask the big bad governments worldwide for assistance.
-This is a personal issue, but the total energy expended worldwide for digital currency is HUGE! Look at the rigs before and imagine the energy spent, heat produced, for something which may or may not have value in the future...
What are your opinions? Sorry if I sounded super serious.
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