Re: [wbs] response to 'Call for Review: Decentralized Identifiers (DIDs) v1.0 is a W3C Proposed Recommendation'

The energy usage argument regarding proof-of-work for DIDs simply does not
hold merit.

First, there is the simple fact that Proof of Work is the *only *viable
mechansim for decentralized state.

The apparent alternatives (at least the popular ones) are Proof of Stake,
and Proof of Capacity.

Proof of Stake, by its very design, centralizes over time. In a Proof of
Stake system, money directly, literally translates to power over the
network. There is virtually zero risk to mining, and there is zero overhead
cost. As such, the centralization of Proof of Stake is inevtiable: coin
staked begets coin, which begets more coin.

Proof of Stake also removes the cost of presenting alternate histories, yet
it relies on punishment mechanisms which can be applied only to a single
history. Proof of Stake's punishment mechanisms also provide myriad attack
vectors for miners tricking their competition into publishing invalid
state, resulting in their competitions' coin being burned, removing that
competition.

When Proof of Stake *inevitably *centralizes, there is *zero *cost to
maintaining this centralization. In fact, over time, this
centralization is *guaranteed
*to worsen.

Proof of Stake is *not *a viable mechanism for decentralized state.

Proof of Capacity has the same zero cost of maintaining an attack; the cost
of attacking a Proof of Capacity chain is *entirely *up-front cost. Once
this cost has been met, because pre-calculated work is indefinitely valid
(this is the entire point of Proof of Capacity, and the only apparent
environmental benefit it provides over Proof of Work), the chain can remain
centralized with near-zero additional expenditure.

And despite this, Proof of Capacity misses one important point: miners will
use as much energy as is profitable. As such, Proof of Capacity miners, on
a chain with a comparable userbase to any Proof of Work chain, will use *just
as much *energy.

Proof of Capacity offers worse security than Proof of Work, for zero
environmental benefit. In fact, Proof of Capacity is worse for the
environment, too!

While CPUs, GPUs and ASICs do not degrade significantly over time so long
as they are kept within safe operating temperatures, hard drives fail
quickly and catastrophically within *normal *usage parameters. This means
Proof of Capacity introduces a large manufacturing, shipping, setup and
e-waste environmental cost which *cannot *be mitigated.

Speaking of mitigation, Bitcoin, by far the largest Proof of Work chain,
and the chain Microsoft have chosed to use for their DID platform, uses
energy which skews *dramatically *renewable. More so than any other
industry, the global average, and the vast majority of country-level
averages too.

In fact, the *only* significant environmental cost of Proof of Work is
energy usage, which can come with a *positive *enviornmental impact: there
are two ways to build a renewable energy grid: either you use batteries, or
you build excess generation capactity.

Batteries are expensive, inefficient, degrade over time under even ideal
operating conditions, and their manufacture and disposal is environmentally
harmful.

Building excess capacity is the only truly green option.

Yet building excess energy generation capacity, by its very definition,
means building energy generation capacity which, most of the time, will not
be used, and will not be sold.

Proof of Work offers a baseload energy usage, guaranteeing a minimum income
for *all *energy generation projects, and making a fully renewable
electricity grid not only possible, but cost effective.

And frankly, Bitcoin does *not *use that much energy. Stand-by devices in
the USA alone use more than twice as much energy as does all Bitcoin
mining, where the *vast *majority of BItcoin's energy usage comes from. The
video tag in the HTML spec is directly responsible for an order of
magnitude (and more) more energy usage than all Bitcoin mining, for less
benefit (entertainment vs securing the base layer for decentralized global
state does not *begin *to compare).

And *still*, Bitcoin's energy usage is almost totally independent of chain
utilization. Processing more transactions does not increase energy usage.
Processing fewer transactions does not reduce energy usage. Bitcoin miners
use as much energy as is profitable, with some nuance around accumulating
and holding Bitcoin long-term speculatively. The chain is very
intentionally limited in its throughput, and the energy used by Bitcoin
miners *will *be used whether the DID spec is approved and adopted widely,
or whether it dies now.

Bitcoin utilizes secondary layers to scale, and these layers can settle
virtually instantaneously, can be *literally *free, and use drastically
less energy than does a main-chain transaction (though in reality, the
energy usage of an on-chain transaction is illusory as described above).

It may be there are legitimate arguments against the DID spec, but the
energy usage of Proof of Work is simply *not *an arugment. I challenge
anybody to suggest a better mechanism for decentralized state, and then to
explain why it couldn't be adoped by Bitcoin once validated and implemented.