I generally read Techpowerup through the app which means I don't join in on discussions, however as a cryptocurrency expert I felt I really had to join in on this one. Not sure where to start so I'll just throw in some hopefully enlightening points.
First up, a quickie, all cryptocurrencies DO generally have a cost to send a transaction - at least if you ever want that transaction to complete in a reasonable time frame. Taking Bitcoin as an example, when you send a transaction to the network you choose a fee to pay to the miners. The higher the fee you give, the higher priority miners will give your transaction. Blocks are created every 10mins (on average) and can only contain 1MB of data, so can only accommodate a fixed number of transactions. If there's too many transactions to fit, miners will pick the ones with the highest fees first, and hold the remaining lower fee transactions for the next block. However, there is a mechanism whereby miners are supposed to include a few "oldest first" transactions in their blocks, this is designed to ensure that all transactions eventually do get processed. This is up to miners though, no one can force them to actually do this, it's just the default in the Core software.
So yes, whilst you can send Bitcoin to anyone in the world for free, realistically you will pay a small fee each time, though this will be MUCH smaller than standard international transfers. As the network gets more congested with more transactions however, these fees will rise. Simple supply and demand. This is the whole reason for the Bitcoin scaling debate which has been ongoing for a good while now.
Next, Ethereum! Ethereum is not a decentralised supercomputer as you might initial expect. For the execution of smart contract code on the Ethereum network, every single node runs the exact same code so it's a giant duplication of effort rather than a collaborative supercomputer one. It should be noted that the smart contract code is extremely simple code and not complex computing by any means. It's generally along the lines of "if this then do that" because the higher the complexity of the code, the more it costs the person uploading it to have it accepted by the network. For example, every new variable costs more ETH for the uploader, as does every "if" or "for loop". If you fancy a look at an example you can play around with some Solidity code online here:
https://ethereum.github.io/browser-solidity/. A good tutorial can be found here:
http://solidity.readthedocs.io/en/latest/introduction-to-smart-contracts.html
The purpose of the Ethereum network all duplicating effort is so that everyone can then compare the results to check for consistency in the calculations, much like everyone in the Bitcoin network verifying all the transactions for themselves.
Now the Ethereum mining process is separate from the smart contract functionality, and is the subject of this article and likely what most people are thinking about when they hear about "these wasteful cryptocurrencies". Mining is the process of generating new blocks to add to the blockchain, and in Ethereum this is currently done via a Proof-of-Work mechanism which does indeed consume a hell of a lot of electricity! It also provides absolutely no benefit to anyone outside of the Ethereum ecosystem, no arguments from me there. In that sense, the calculations are indeed a giant waste of resources to an outside observer, however, as pointed out by some here already, that energy goes to securing the transactions on the network and that in itself is arguably extremely useful as it vastly reduces the human interaction required to keep things synchronised and to prevent fraud/double-spending etc. You could argue this means people can get indeed get jobs in other areas of life and that could arguably be more productive for the world in general than having loads of people spending their time and effort on carrying out and checking financial transactions.
GPU Mining at home - there's a number of reasons why people might mine, the obvious one being for financial gain. Reasons might include spinning up a mining business for financial profit, or it might be an average home user who fancies earning a few $. Other motivations might be to promote the ideological use of cryptocurrencies as a way to pull currency control away from governments, or it might simply be as one person said, because it's a fun hobby for some! Personally, I'm a home user who has a single GPU mining away 24/7 primarily because I happen to find it really interesting. It doesn't hurt that it also makes a small amount of money in the meantime. I ease my concerns about wasting power and the rising power bill by reminding myself it actually helps heat my house which is a productive use of all that waste heat
.
All that said, I have mined BTC, DOGE, ETH and a couple of others, and I have invested money simply buying BTC and ETH. I have made WAY more money investing and doing some light trading (primarily for entertainment) compared to mining. If you're thinking about buying a GPU to mine with purely for financial gain, I would highly recommend just buying some cryptos and hanging onto them instead.
Finally on mining, Ethereum will soon (possibly this year, probably later as it keeps getting delayed) switch to Proof-of-Stake mining. This will prevent just anyone from joining in with mining and making money form it. the PoS mechanism will eventually require that you have to own a bunch of Ethereum in order to contribute to the mining process (without some you'll just be ignored by the rest of the network if you try). The details aren't yet concrete, they're still testing and working on what they want for the final version, but anyone anywhere being able to contribute to securing the Ethereum network and/or mining for profit will eventually come to an end. This is probably a good thing in my opinion, by that point enough people should be invested in the network that PoS can safely replace PoW and we can save a whole lot of electricity in the long run!
So from that enormous rant, you can probably guess my opinion is that cryptocurrencies are not a waste of time and effort. I honestly see a cashless future, though this will probably not be in my lifetime. Understanding the potential of cryptocurrencies requires an awful lot of economic thought which I honestly can't get my head round entirely. A form of currency with a fixed supply that absolutely cannot have its number of units increased or decreased (unless agreed by majority consensus of the miners) is not something we've ever had on a global scale before. Can economies function properly long-term like this? Many people much better versed in economic theory will be thinking about this and we'll just have to wait and see.
Well this was ridiculously over the top for a forum thread....
Edit: Forgot to talk about anonymity in blockchains. Really quickly though, everything is recorded so every transaction will always be traceable. However, who submits a transaction is extremely hard to trace, you need to see them send it because once it's propagating around the network the source cannot be determined. It's also important to remember that in the blockchain world, anyone can create a new address at any time for essentially no cost. So I can create myself 10,000 addresses and ping Bitcoin around those addresses like crazy making it much harder to track. The counter to that is that each transaction will cost me a little Bitcoin to perform. However, there are mixing (also known as tumbling) services which are effectively giant money cleaning services - not necessarily for illegal purposes (although clearly good for that). If enough people use a mixing or tumbling service, and that service doesn't keep records (a very key point) then you can have near-perfect anonymity. Other cryptocurrencies attempt a similar thing built into the way they work - Zcash and Monero being two examples.
So anyone claiming that the NSA is tracking everyone using Bitcoin should know that it is actually possible to use cryptocurrencies without being traced. The NSA can watch people who don't put much effort into being anonymous, but if you truly want to hide then it's definitely possible. Where you can catch bad people doing this is on the standard currency side of things, i.e. when someone is suddenly living above the means they can afford according to their tax returns, or has giant lump sums of money appearing in their accounts from currency exchanges etc.
