Humans evolved in a context of horrendous competition. The default state for the vast majority of humans in human history was brutish, violent, very short and miserable. While Pleistocene humans lived fairly sedate lives (with skeletal evidence showing not much evidence of injury or starvation), as soon as populations started sharply increasing (at the ice melted at the end of the last ice age), there is evidence that human populations succumbed to ever increasing tribal violence.
The more humans had to compete for scarce resources, the more humans were inclined to use force to get what they needed. That led to the development of states, governments, taxation and (and yes, I’d regard that as a form of violence) organized religions. Organizational power became a way to address scarcity, generally at someone else’s expense. While violence was mainly directed outwards, to other tribes, it was also increasingly directed to the poor of the tribe.
The population growth we have seen in the last few centuries is, by any reasonable metric, insane. Nothing similar happened before on the planet and, even if humanity were to go extinct tomorrow, there would be a striking demarcation between the geological strata of Earth corresponding to before humanity and after humanity. In fact, the remains of human civilization would become the most visible fossil record on the planet. The amount of stuff that we are leaving behind doesn’t even compare to the KT boundary – humans are leaving an irreversible entropic imprint on the planet that will be visible to future (alien?) forensics for more than a billion years.
Space Colonization or Dante’s Inferno
This universe does not provide our species with any guarantee or consolation. We can argue the human predicament from a faith-based perspective, and claim that there might be a higher force “up there,” which more or less guarantees a good outcome. But there are many extinct civilizations. People in lost civilizations also had expectations and faith, but their faith was invariably squashed by harsh reality. The fact remains that lousy policies lead to collapse, and if the collapse is bad enough most people involved die.
In the past, nature may have capriciously dumped mass death randomly. These days we are actively setting the stage for mass extinctions all through our own industrial activity. And we all seem to realize that we are in for bad times, as it has become evident in the negative trend in our fictional tales. Right now Dystopian fiction is popular, arguably by crowd-sourcing decree. At least a third of the movies I watched recently (and do excuse me if you see reason to accuse me of having a lousy taste) were about a collapsed Earth where invariably young and attractive teenagers symbolize whatever hope humanity has left.
The sad fact is that even in a worst case scenario not all humans will die. It takes an incredibly implausible effort to kill all humans on the planet. In other words, the effort required to annihilate humans goes up exponentially and with diminishing returns. To kill the last hundred million humans becomes functionally (or economically) impossible. That may sound like good news until you try to visualize in what kind of world humans might have to survive. There are quite a few possible dreadful worlds that we can envision, I am sure we’ll be able to create some in a few decades. But even if we combine the most dismal projections of climate change, Fukushima-like nuclear accidents, resource depletion, global thermonuclear war, a combination of Ebola, SARS, and the black plague – we’ll see only half of humanity die.
It’s worth remembering that in a world where suddenly 90% of humans are dead, most military hardware will still be around a-plenty. Imagine a world that’s ravaged by resource depletion, diseases, wars, nuclear wars, where only half a billion humans survive, and I’ll show you a planet that is uncannily similar to the current worst of the worst places on the planet – North Korea, Afghanistan, Sudan. But even if turmoil and war do not succeed in reducing human populations permanently, even under the most gruesome conditions this planet might sustain an utterly impoverished population of billions of traumatized human beings for centuries.
What is the point of human life? What is the point of living as a human being? My first answer would be happiness and comfort. I am personally less than enthusiastic about hard work, cruelty, suffering, affliction or fear. My personal preferences entail health, happiness, security, ambition, justice, hope, culture and freedom.
So the logical conclusion is that on this planet a whole lot of things can go wrong. The upside of things going is usually that things get better again after a while. But that is where the problem lies.
The vast majority of our affluence on this planet is based on non-renewable resources, in particular non-renewable petrochemical resources. Once these are consumed, they are gone. One way to avoid the problems posed by terminal consumption of non-renewable resources is to evolve out of outdated needs. That is what we did in the last two centuries. Humans have evolved many new technologies and organizational models to avoid depleting resources, but there has never been any reasonable or plausible guarantee along the way that we would have made it this far. In essence, that things are still working means pretty much we as a species have been lucky.
All seems to indicate that our luck is running out. Never before have we had it so well, but never before has the potential for mass death and untold suffering been so high.
The risk we face is not the total extinction of humanity. The risk we now face is that humanity falls back to the viciously primitive state that we find in the worst places of the planet. In such a hellish future, we might even be able to sustain vast population numbers under gruesome conditions (and, like it or not, humans breed more when they are miserable).
The world we want is the world of Star Trek, unbridled economic growth, and advancing medical and other technologies. The world I want is a world where problems are solved, and people become happier and happier. We are now actively risking making such positive scenario’s effectively impossible.
There is one way out of this trap, and that is to quickly develop new energy sources. It seems unlikely that we can sustain a modern society with only planetary renewable and sustainable sources of energy. I think we can’t. I think we can not have consumerism and democracy and personal freedom in a world that runs only on solar, hydro and wind power. We’ll need something else, and that something else can be probably found only off-planet.
We may have a window of only a few more decades to ensure total and irreversible energy availability, and all scenarios that include unconstrained growth involve developing resources in the inner solar system. The best case scenario involves Space Based Solar, but even at this time such a project is often regarded as sheer fantasy. Too big, too “expensive,” economically nonviable, it would threaten existing monopolies – or some other flimsy pretext.
At some point, the precious window of opportunity will be closed, and we’ll be unable to get ourselves off-planet. Technological ability will deteriorate, science will become neglected and we might fall back to a more primitive condition.
The metaphor of Dante’s Inferno would apply. The world would become an unbearable pit of senseless and pointless suffering, especially since survivors will be able to view how life used to be in 2014 on the surviving media devices. We’ll all remember what we have lost, and we will all be left fighting tooth and nail to hold on to a few precious remnants of our past glory.
Images from Wikimedia Commons.
Power Consumption for Bitcoin Mining Is Now Ranked 61st in the World
Bitcoin prices have been towering in the past couple of weeks. This is cause for celebration for users who have heavily invested in the cryptocurrency; but, it appears the value of bitcoin is not the only thing that has hit the roof in 2017. Bitcoin mining energy consumption has also reached new heights.
A research study conducted by PowerCompare—a U.K.-based company for energy comparison tariff—found that the average power used to mine bitcoins this year has already gone beyond the annual energy consumption for some 159 countries. In particular, the global average power spent on bitcoin mining has far outstripped the energy consumption in Ireland and a couple of African countries.
This new study was based on data from Digiconomist, whose current estimation of power used to mine bitcoin hovers around 30.14 TWh annually. This figure is way above Ireland power consumption that currently stands at 25 TWh yearly. In fact, recent research from Dutch Bank ING found out that one bitcoin transaction consumes sufficient electricity to power an average household for a whole month.
At this rate, if bitcoin miners were a single country, it would be positioned 61st in the world based on power consumption, comparable to Slovakia and Morocco. PowerCompare has already predicted that if the trend continues, bitcoin mining will expend the entire world’s electricity by February of 2020!
Why bitcoin mining is increasing power consumption levels
What makes bitcoin mining an energy black hole?
Apparently, it is the computational requirements that process the complex cryptographic problems that miners must solve to be rewarded with the cryptocurrency. Just like other notable cryptos such as Ethereum and Litecoin, Bitcoin depends on miners to validate transactions performed in their respective blockchains.
To verify transactions, miners are required to solve complex mathematical problems, which on becomes increasingly difficult as more and more miners join the mining bandwagon. The more byzantine the cryptographic problems, the more the processing power that is needed to solve them.
In the case of bitcoin—the most popular cryptocurrency—a multitude of miners now make it absolutely necessary to use ASICs (Application-Specific Integrated Circuits) which consume considerable amounts of electricity. At present, ASICs have been designed to provide far more efficient computations, both in terms of the hash rate and power consumption when compared to CPU or GPU mining.
But the ASICs haven’t really resolved the hurdles of power consumption.
Ideally, the use of ASICs meant that the total time required to validate new blocks drastically reduces too. This hasn’t happened because of the way the bitcoin protocol was conceived. Apparently, the mining difficulty in bitcoin ensures that the total time taken for generation of new blocks must be kept constant.
As a matter of fact, the Bitcoin network automatically alters the difficulty level for bitcoin mining to ensure the discovery of new blocks every 10 minutes by miners based on two factors. First, there is the global block difficulty that forces valid blocks to have a hash value that is below the target to ensure the difficulty level is maintained.
Second, the number of miners that are actively participating in the mining process has been soaring, meaning the difficulty level has remained constant for a while now. Also, the mining difficulty automatically adjusts after every 2016 blocks on the Bitcoin network. Depending on how many users were actively mining – together with their combined hashpower—and the time it takes to find the 2016 blocks, the difficulty can either go up or down.
As the mining difficulty increases, miners should acquire more powerful hardware to accommodate for the adjustment which again increases the computational electricity. It is also worth noting that there is no maximum mining difficulty that has been set for the Bitcoin network. There is a possibility that the mining difficulty will continue to rise until all the Bitcoins are mined have been mined by the year 2140.
This means that power consumption in Bitcoin is not likely to decrease in the near future.
Challenges of mining Bitcoins
Here are some challenges of Bitcoin mining:
#1: Environmental hazards
The massive growth of cryptos has set up an exponential demand for processing power. The inordinate amounts of power required to mine bitcoins make it an environmental hazard since much of the earth’s electricity is still generated from greenhouse-gas-generating fossil fuels. This implies that bitcoin mining could be contributing to the climate changes and global warming.
#2: Stumbling block for mass adoption
The bitcoin cryptocurrency was conceived as a decentralized, peer-to-peer and trustless currency free from regulations of government agencies and financial institutions such as banks. Unfortunately, the adoption rate is discouraging. This can partly be attributed to the high energy consumption costs.
A recent study conducted by researchers from the HINUI (Hamilton Institute at the National University of Ireland) found that the cost of Bitcoin mining on the commodity hardware at present far exceeds the price of the rewards. In fact, Bitcoin mining has now been left to the big players who have the money to buy expensive ASICs with some of them leasing their hardware to small players in the so-called cloud mining.
#3: Rise of illegal piracy
The rise of bitcoin values is a cause for celebration in the crypto universe. It means that the entire global community is beginning to appreciate the value of cryptocurrencies in the world economy. However, mining energy consumption is soaring at an alarming rate. The quicker we find mechanisms to make bitcoin and other cryptocurrency mining electricity use “greener,” the better it would be for the Blockchain technology that is often heralded as the next internet.
Featured image courtesy of Shutterstock.
Cryptokitties Made Us Realize These Biggest Industry Challenges
You may not be in the loop but Cryptokitties have just surpassed the major distributed cryptocurrency exchange such as EtherDelta to become the largest smart contract on the Ethereum network by gas consumption. As of writing this, the Cryptokitties are accounting for slightly more than 14% of the Ethereum’s transactions in over 1,500 blocks according to ETH Gas Station.
This is a staggering volume of traffic for an online game that, on the surface, appears quite bland. But the popularity of this cryptocollectible has underscored one of Ethereum biggest downsides which were never envisioned: lack of scalability. According to Etherscan, Ethereum transactions have increased six-fold since the game’s release on 28th November 2017.
Already some investors are raising concerns that this frivolous game is crowding out more genuine and serious business users in the network. But how exactly have Cryptokitties phenomenon congested the Ethereum network?
Well, in “Cryptokitties Made Us Realize These Biggest Industry Challenges” we dive deeper to explore how the Cryptokitties phenomenon has contributed to Ethereum’s scalability challenges. Let’s jump in.
Challenges of Cryptokitties
Here are some challenges the Cryptokitties phenomenon presents for the Ethereum ecosystem.
#1: Scaling challenges
While the sensations of Cryptokitties is great for Ethereum adoption, the pressure it has placed on the Ethereum blockchain means that developers have to work out a scaling solution. The traffic is making it extremely difficult for users to play the game, and many transactions such as buying and selling of cats are taking a lot of time to process with some demanding multiple attempts.
All of these intricacies are related to the Ethereum blockchain’s throughput limit that is set at roughly 15 transactions per second. Until the throughput limit is expanded, Cryptokitties have to contend with the current 15 seconds which is shared among other popular smart contracts as well. There’s no doubt that Cryptokitties has become popular within a short time and raising the bar for gas auctioning in Ethereum.
With Ethereum protocol soon hitting its capacity, research into new scaling options to help the distributed technology scale is needed soon. But this scaling issue isn’t the only problem Ethereum protocol has to contend with. Cryptokitties is just one viral game that hasn’t even spread across the tech universe. In fact, it was just launched a couple days ago (28th November)!
If Cryptokitties (one viral game) can slow down the entire Ethereum network, what will happen when the blockchain grows to accommodate real-world apps? Obviously, a long term solution is required. The Ethereum community can’t afford to have scaling challenges whenever a great smart contract hits the decentralized web.
#2: Divergent opinions about Ethereum growth
Just as is the case with the bitcoin scaling problem, we’re starting to see cracks in the Ethereum blockchain community as each side takes diametrically opposing sides about how to scale the network. For some time, bitcoin has been experiencing near or sometimes full blocks with transactions taking nearly 20 to 40 minutes to be validated on the blockchain.
Some Ethereum enthusiasts are already suggesting that miners should increase the so-called gas—a measure of computational effort in Ethereum—limit (just as is the case with bitcoin’s block size limit). Ideally, the gas limit determines the kind of operations such as the addition of numbers, calculation of hashes or even sending transactions that you can compute in Ethereum. Each operation has a fixed set of gas attached to it.
By setting the gas limit, we’ll be capping the maximum amount of gas which can be included in Ethereum block. With a maximum of gas in place, the block size and the speed of the network will be greatly be impaired. Ideally, this proposal is hinged on the philosophy that developers shouldn’t decide on the ideal gas limit but market actors such as the miners, the applications, and the investors.
As you are aware, the block size and speed of the network are at the core of Ethereum protocol. Altering any of them completely does away with Ethereum’s vision. Also, Ethereum miners are unlikely to agree to this proposal as it has its own undesirable effects. As of writing this, the Ethereum network uncle rate is already peaked at over 30% compared to the network DoS (Denial of Service) attacks.
This implies that at present, every third block gets orphaned. Now raising the gas limit is most likely going to make the current mining situation even worse. Without considerable enhancements on how large blocks will be processed using current implementations and decentralized in the network, increasing the gas limit isn’t feasible just yet.
While high-end systems will still be able to validate the heavy blocks within several 100 milliseconds, low-end systems are already gobbling up few seconds to validate their transactions and distribute the block.
#3: Other ICOs are at a risk
The Ethereum gas market is an unknown equation that allows users to increase gas and ensure that transactions such as the sale or breeding can take place in time. At present, Cryptokitties cautions users of keeping an eye on gas consumption, to avert high prices. An acutely high gas price would, in fact, expedite the transaction but make it flop completely.
The lackluster performance and gas speculations may make users abandon the Ethereum network completely. Bitcoin has been attracting speculative investments lately because of the unprecedented high prices that have been hovering north of $15,000. Now the presence of Cryptokitties and their network demands places hundreds of ICOs implementing their projects on Ethereum network at risk.
The specifics of the cryptographic computation may imply that smart contracts will never quite work to the levels anticipated by investors in the ICOs. This means that these ICOs are likely to fail because of the scaling challenges presented by Ethereum network.
It’s no secret that Ethereum—and its smart contracts—has literally revolutionized applications. However, the launch of Cryptokitties has raised more controversies regarding the future of Ethereum protocol. The Ethereum protocol was once viewed as a perfect replacement for Bitcoin. But at these rates of network jamming, users are becoming cynical.
While I am not a futurist, one thing is certain: there are tell-tale signs of Ethereum fracture. Amidst all the hype and uncertainties about the scaling problem, it’s only proper for you to continue speculating before investing in Cryptokitties.
Featured image courtesy of Shutterstock.
Uncertainty in Saudi Arabia as Dozens of Princes are Arrested
Just a few days back we were impressed by the steps taken by the Saudi Crown Prince Mohammed bin Salman. He played a major role in allowing women to drive and in allowing women to attend sports events from next year. He, then, announced the construction of a hi-tech city ‘NEOM’, which was a move to generate additional income for Saudi Arabia and wean the economy away from its dependency on oil.
- Crown Prince Mohammed bin Salman cracks down on corruption
- Dozens of Prince, former ministers, business executives and government officials arrested
- A move widely looked as consolidation of power
- Uncertainty has increased
- We withdraw our previous recommendation of buying the ETF KSA
We expect crude oil prices to rally in 2018, which should benefit the oil-rich Kingdom in the short-term. As both the short-term and the long-term picture started to improve, we expected Saudi Arabia to make a quick recovery. In order to benefit from this, we had recommended a long position in KSA iShares MSCI Saudi Arabia Capped ETF, which has a significant exposure to Saudi Arabia. However, the events of the last few days have forced us to reassess our call.
The Rise of the Crown Prince
Prince Salman, also known as MBS was an obscure figure just a few years back. However, since his father King Salman ascended the throne, he has quickly risen in stature. In June of this year, the King named Salman as the crown prince and removed the then existing Crown Prince Mohammed bin Nayef of all his duties by a royal decree.
This move cleared the way for MBS to ascend the throne if the octogenarian King Salman abdicated his throne. With power in his hands, it was expected that the new Crown Prince will implement his Vision 2030 plan with ease. However, last week, MBS made an aggressive move to consolidate his power further.
On Saturday, the King formed a new anti-corruption committee with the Crown Prince as its head. Within hours of its formation, the committee arrested 11 princes, 4 former ministers and hundreds of high ranking officials on allegations of corruption. They are being housed at Riyadh Ritz-Carlton, which has been closed for outside public.
The Saudi Council of Ministers said that the arrests were ““based on specific evidence of criminality and acts that were intended criminal transgressions and resulted in unlawful gain.”
However, experts believe that with this move, the Crown Prince wants to purge all rivals and fire a warning shot at any other possible dissidents.
Will this move ensure that Saudi Arabia stays corruption free?
Unlikely. In Saudi Arabia, the royal clan is more or less above the law. The sources of their income are never revealed and for years they have enjoyed government patronage in various businesses.
Even the current purge is unlikely to reach the royal family members who are loyal to MBS.
In fact, in 2016, MBS had purchased a 440-foot yacht priced more than $500 million. Neither has he disclosed the source of his funds nor will be asked about it.
The recent anti-corruption drive will only shift the power from his rivals to the members who are close to the Crown Prince.
Young Saudi population in support of the anti-corruption drive
The Saudi millennials are likely to support the arrests. They have long despised the unwritten immunity extended to the royal family. The current move offers a confidence that no one is above the law and it will benefit the nation in the long-term.
Absence of opposition is not a positive development
The Crown Prince has stated that he will steer the nation towards a moderate version of Islam, unlike his predecessors who have followed the hardline. With most of his rivals arrested, decision making can become faster and will help MBS to push aggressive reforms.
However, the involvement of Saudi Arabia in Yemen, the aggressive confrontation with Iran, and the boycott of Qatar have all been inappropriate decisions taken by MBS. With no opposition in future, he may make a blunder that can be detrimental to the nation and also to the region.
Investors are Likely to Be Wary
Vision 2030 can be successful only with the support of the private sector. With some of the top businessmen like billionaire Prince Alwaleed bin Talal, chairman of investment firm Kingdom Holding; Amr al-Dabbagh, chairman of builder Red Sea International; and Nasser bin Aqeel al-Tayyar, founder of Al Tayyar Travel arrested, their businesses are likely to be affected.
Additionally, the foreign investors are unlikely to be interested in projects until this whole drama comes to an end. This can delay many existing projects.
The royal unity will be tested
For the past many decades, power has been divided among the various branches of the Saudi royal family. This has kept them together.
However, the recent purge is unlikely to go down well with the royal clan. Though voices may be silenced now out of fear, it is likely to rear its head sometime in the future. A bloody coup or power struggle can’t be ruled out.
We don’t want to invest in uncertainty
Considering the uncertainty, we would like to withdraw our recommendation to invest in the future growth of Saudi Arabia. The risks far outweigh the potential benefits. We shall keep a close eye on the developments and reassess our call if things change for the better. For now, please don’t invest in the ETF KSA.
Will the Princes park their wealth in cryptocurrencies
Thousands of bank accounts have been frozen in this anti-corruption drive. Saudi Arabia’s attorney-general Sheikh Saud Al Mojeb has said that the current exercise is only Phase one. So, we may expect more such drives in the future, especially if MBS faces any opposition to his decisions.
The combined wealth of the persons who have been arrested totals more than $33 billion. The remaining members of the royal family and wealthy businessmen are likely to remain on the edge. Considering the situation, it is reasonable to expect at least some money to find its way into cryptocurrencies.
Featured image courtesy of Shutterstock.
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