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Bitcoin Energy Consumption Index

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Re: Bitcoin Energy Consumption Index

#311

Post by sword_smith »

jacobush wrote: post #310
sword_smith wrote: post #307

Earlier quoted context omitted.

The market cap of Bitcoin is above 120bn USD, less than Apple and Facebook but more than Netflix. But that is still only about 0.1 to 1 % of its potential. So, big but in its infancy.

Besides it being completely different in other ways, the market cap is not value. You couldn't realize a tiny fraction of that without tanking the market cap.

The opposite also applies: You couldn't buy up a large proportion of Bitcoins without the price skyrocketing. Prices are determined at the margin, what the marginal seller (probably miners) will sell for and what the marginal buyer will buy for. They are the best measure of "fair value".

Re: Bitcoin Energy Consumption Index

#312

Post by xiphias2 »

paulmd wrote: post #232
zallarak wrote: post #181

Clarifications (this website perpetuates some common misconceptions): - A single bitcoin "transaction" can actually have thousands of inputs and thousands of outputs. So energy "per transaction" or "transactions per second" is not analogous to a typical monetary transaction. - Bitcoin does not compete with literal credit card transactions (although some use it like that today). I'd compare Bitcoin on-chain transactio…

Off-chain transactions effectively don't exist at all in terms of transaction volume, and the players who staked money on Lightning lost approximately 99.97% of that money. https://cryptobriefing.com/ln-nodes-lightning-network/

I think you haven't read how Lightning Network works.

People don't need to stake money, just create a multisig transaction with a peer and having a transaction signed by the other peer to get their money back when they want to close the lightning channel. They can get extra fees for enabling transactions, though not that big amount.

Re: Bitcoin Energy Consumption Index

#313

Post by Kbelicius »

cwkoss wrote: post #298
paulmd wrote: post #285

Earlier quoted context omitted.

for processing/validating transactions? couple hundred MWH. How much do you think the Nasdaq/NYSE mainframes really eat? bitcoin numbers don't include the off-chain stuff either, lol. Bitcoin energy is literally expended on a massive, inefficient mainframe that processes a couple hundred transactions a second. That's all - everything else is additional to that.

No, what is the cost of the system which enables the USG to reliably prevent the execution of erroneous trades? Tens to hundreds of thousands of highly paid bureaucrats, accountants, risk managers, regulators, legislators, clerks, lawyers, law enforcement, judges, etc. Obviously the purely digital systems consumes more compute, but I think you're discounting many of the true costs of the existing system.

The system doesn't just enable the USG to reliably prevent the execution of erroneous trades.

If you think that tens to hundreds of thousands of highly paid bureaucrats, accountants, risk managers, regulators, legislators, clerks, lawyers, law enforcement, judges are there just to prevent erroneous trades...

It seems that you are discounting a vast amount of things that the system does besides preventing the execution of erroneous trade.

Re: Bitcoin Energy Consumption Index

#314

Post by TeMPOraL »

shan224 wrote: post #218
lukev wrote: post #132

The energy consumption of Bitcoin isn't new news. What continues to disappoint me, however, is how many people immediately jump to its defense with arguments based on the value it provides, as if that offset its cost. What gets neglected is that the Bitcoin algorithm is inherently wasteful . By its very design, it results in an insane amount of duplicated, pointless computation. The question isn't whether something l…

I have yet to see any POS that doesnt devolve into centralization or obfuscated POW. You say pointless computation. I say layers on layers of security protecting the most sound monetary policy in human history

And I say it's denominating trust in watts.

Think about it from the opposite direction: trust is a ridiculously effective optimization of group dynamics, and humans come equipped with it by default. It allows us to engage in trade and cooperation without paying the cost of perfectly, mathematically, enforcing the rules. It takes a problem that would be O(n!) and reduces it to something on the order of O(nlogn), at very little loss in the optimality of the result. Taking this shortcut is a no-brainer, it would be immensely stupid not to do it.

It so happen that historically, we took that trade-off and built a civilization on it. It worked well. It works well*. And what bitcoin does is trying to make our economy run on O(n!) overhead, because some individuals think that a political ideology based on not trusting other people is somehow a good idea.

Re: Bitcoin Energy Consumption Index

#315

Post by TeMPOraL »

btcd wrote: post #223
puranjay wrote: post #160

Earlier quoted context omitted.

I don't even know what problem Bitcoin is solving anymore. I haven't seen a single website accepting Bitcoin as a payment in the last whole year.

Bitcoin's main function is store of value, with the additional benefit of being relatively easy to transfer. It is basically a more convenient form a gold. After all these years of growth, Bitcoin's market cap becomes its own unique edge. One simply cannot transfer significant amount, say tens of millions of dollars, easily in any other crypto currency. The cost of energy is minuscule compared to alternative means of…

> The cost of energy is minuscule compared to alternative means of achieving the same: vaults, guards, banks, lawyers, etc.

That's only because Bitcoin is still relatively insignificant blip in the world of trade, mostly a pastime for gamblers and scammers. It's footprint is actually absurdly huge compared to value it provides.

The real problem is scaling. Vaults, guards, banks, lawyers scale somewhere around O(n) to O(n logn) with the size of the market. Bitcoin's proof of work - the means of securing it - scales, to the best of my understanding, as O(n!) with the number of miners. That's not something you can run a global economy on.

Re: Bitcoin Energy Consumption Index

#316

Post by TeMPOraL »

trickstra wrote: post #288
konschubert wrote: post #240

Earlier quoted context omitted.

I think bitcoin won’t be able to compete long term because one way or another, it’s users have to pay for the tremendous energy expense. I hope we recognize this rather sooner than later, such that we can stop wasting so much energy.

> it’s users have to pay for the tremendous energy expense. They are. How else do you think miners pay for their electricity? And so far it seems like the users are happy to pay what it costs. The fact that you don't see the benefit doesn't mean there isn't any for them.

> How else do you think miners pay for their electricity?

With speculation on currency (it's the primary use of Bitcoin) and theft - the latter less so, given the very high centralization of hashing power, but it was and still is common for a wannabe Bitcoin millionaires to run mining software on computers and electricity they do not own or pay for.

Re: Bitcoin Energy Consumption Index

#317

Post by TeMPOraL »

conception wrote: post #205
lukev wrote: post #132

The energy consumption of Bitcoin isn't new news. What continues to disappoint me, however, is how many people immediately jump to its defense with arguments based on the value it provides, as if that offset its cost. What gets neglected is that the Bitcoin algorithm is inherently wasteful . By its very design, it results in an insane amount of duplicated, pointless computation. The question isn't whether something l…

The other side is that people who mine bitcoin have to have basically “free” energy - margins are too tight. So while it’s wasteful, people aren’t burning coal or gas to produce bitcoin in the big bitcoin farms. Hydro and geothermal rule.

Where they could instead be replacing fossil fuel-based capacity.

Re: Bitcoin Energy Consumption Index

#318

Post by TeMPOraL »

donatj wrote: post #137
lukev wrote: post #132

The energy consumption of Bitcoin isn't new news. What continues to disappoint me, however, is how many people immediately jump to its defense with arguments based on the value it provides, as if that offset its cost. What gets neglected is that the Bitcoin algorithm is inherently wasteful . By its very design, it results in an insane amount of duplicated, pointless computation. The question isn't whether something l…

With energy becoming more and more renewable, does it really matter if BTC uses a lot of it?

It does, because it competes with decarbonizations of things our civilization actually needs. Once that's done, it'll still be ridiculous to try and base the economy on bitcoins, because proof of work scales so badly it'll happily eat any and all energy that's made available.

Thousands of years from now, when humanity builds its first Dyson sphere, I would like to believe the collected energy will be used for purposes like making everyone's life long and prosperous, or propelling great starships across the void - and not just to secure the Bitcoin network.

Re: Bitcoin Energy Consumption Index

#319

Post by TeMPOraL »

mrb wrote: post #263
me551ah wrote: post #193

The most powerful supercomputer in the world reaches 143 petaflops, bitcoin network in comparison reaches 80704290.84 Petaflops. Granted that a majority of this computing power is in the form of custom ASIC's, but the figure is really staggering. And all of the 80704290.84 Petaflops, consume 73.12 TWh to repeatedly calculate SHA256 ! What could be the world's most powerful network does absolutely nothing but crunch h…

It's incredible that people on HN, a technical readership, still don't understand why the energetic or computational "waste" of proof-of-work is needed. There is simply no other known way of implementing a decentralized, censorship-resistant, robust digital currency. Without PoW you lose one of these properties. Proof-of-stake doesn't work. It isn't robust. Eg. PoS cryptocurrencies can't resolved which chain is corre…

> If the social benefits of a cryptocurrency are worth the computational power, and if PoW is the only technical solution to implement it, then by definition PoW isn't wasteful.

But they aren't, and the whole exercise is comparable to trying to repeatedly solve ever-larger NP-complete problems by brute force. Something no technical person in their sane mind would consider a correct course of action.

And just like we use good enough polynomial approximations to get near-best solutions to NP-complete problems, we can do the same for running economy. Trust is not a liability. Trust is what makes economy efficient.

Re: Bitcoin Energy Consumption Index

#320

Post by Kbelicius »

heimatau wrote: post #221

The idea that bitcoin is 'wasteful' is entirely missing the solution that bitcoin is. Byzantine Generals Problem. This network is unmatched in it's provability and security. There is a turing complete machine, operating that can be trusted. Seriously, the possibilities are limitless but guess what, they do have a cost. And there are too many con-artists around. But an industry that is changing the entire monetary pol…

If PoS is rent-seeking how come PoW isn't rent-seeking?
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