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Bitcoin network average energy consumption per transaction compared to VISA

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Re: Bitcoin network average energy consumption per transaction compared to VISA

#71

Post by G3rn0ti »

hn_throwaway_99 wrote: post #17

I mean, I know people are commenting on whether the comparison is valid, but regardless, the BTC energy cost at at 741 kWh for a single transaction is pretty close to the average monthly household energy usage in the US of 867 kWh [1]. That seems pretty nuts on its face to me. [1] https://electricityplans.com/kwh-kilowatt-hour-can-power/

For a full picture, however, you would need to count the total number of VISA transactions and compare that to the total number of Bitcoin transactions. I would guess the absolute energy foot print of VISA is still considerably larger.

But I am not trying to defend the energy usage of PoW, here. A single Bitcoin block can only fit about 3500 transactions and all miners of the world compete for being the first in solving the emerging Block‘s cryptographic puzzle. This is where the insane energy consumption comes from.

Other cryptos work differently in that respect and, hence, are way cheaper.

Re: Bitcoin network average energy consumption per transaction compared to VISA

#72

Post by coralreef »

jasonlaramburu wrote: post #56
coralreef wrote: post #35

Not sure why Visa is a relevant comparison. I can setup a dozen nodes on AWS and build a crypto with a million times the transaction capacity of Bitcoin. Obviously the downside to this is centralization; someone can be banned or censoredfor any reason. Blockchains are first decentralized, permissionless, censorship resistant solutions.

BTC mining is highly centralized. Fiat on/off ramps (essential if one wishes to spend her BTC) are regulated by local governments and relatively easy to censor. If there really were global demand for a censorship resistant currency don’t you think there would be more merchants accepting BTC by now?

https://twitter.com/real_vijay/status/968854238095753216?lan...

1/ There are four stages that all market-based monetary goods pass through in their evolution to becoming a fully fledged money:

1. Collectible 2. Store of Value 3. Medium of exchange 4. Unit of account

Re: Bitcoin network average energy consumption per transaction compared to VISA

#73

Post by zepto »

giorgioz wrote: post #61

There is no paper/overview of how those 2 values are calculated. One questions that comes to mind is: Is the energy consumption of VISA transactions calculated based on their servers energy consumption? So now what about the energy consumption of the whole VISA company? Visa has 19,500 employees https://en.wikipedia.org/wiki/Visa_Inc . Does Bitcoin employees 19500 people full-time to work? Time is interchangeable wit…

> So now what about the energy consumption of the whole VISA company? Visa has 19,500 employees

Ok - but then you need to include all the exchanges and wallet developers etc.

https://en.wikipedia.org/wiki/Visa_Inc.

Does Bitcoin employees 19500 people full-time to work? Time is interchangeable with money and money with electricity/CO2 emissions

Maybe, when you include all the miners and the other parts of the ecosystem needed to make Bitcoin available for use.

Re: Bitcoin network average energy consumption per transaction compared to VISA

#74

Post by tracedddd »

whoooooo123 wrote: post #42
DJBunnies wrote: post #39

It’s not really directly related. Miners load hash rate to get a better chance at the next block, the transactions just go along for the ride. This would be true regardless of how much hash power is cumulative.

Um... Can you rephrase this such that people like me who aren't Bitcoin aficionados can understand it?

The energy usage of Bitcoin or similar projects like Ethereum are derived from the “mining” aspect which is not connected to transactions or transaction volume.

For example, early Bitcoin was generally, for purposes of discussion, about the same transaction throughput as we have today. But there were very few miners, so the energy costs were very low. Was Bitcoin truly many orders of magnitude more efficient back then? No.

It’s simply that there are many many more miners competing for rewards, because Bitcoin is valuable. There’s an energy lottery built into the Bitcoin protocol that emits new currency.

This lottery is directly related to the security of the network but not the number of transactions or usage. Unfortunately it’s hard to find an exact parallel but something like the military protection of the dollar would be a more valid comparison than Visa’s transaction volume.

Consider this: even if the blocks were empty, which means no transactions, the energy usage would be the same.

Re: Bitcoin network average energy consumption per transaction compared to VISA

#75

Post by panarky »

Bitcoin's primary use case isn't the same as Visa's.

Visa is good at processing many small transactions.

Bitcoin is good at storing value over time, across borders, without censorship.

Since Bitcoin is useful without many transactions, it's deceptive to measure its energy usage per transaction.

It would be equally useless to cite Visa's 10-year stored value percentage gain vs. gold, because preserving value over time is not what Visa does.

Re: Bitcoin network average energy consumption per transaction compared to VISA

#76

Post by 1-more »

JumpCrisscross wrote: post #55
keypusher wrote: post #38

Earlier quoted context omitted.

How much does it cost to run the US treasury though?

> How much does it cost to run the US treasury though? Would the U.S. Treasury disappear if we switched to Bitcoin? (Hint: look at countries that don't have their own currency. They still collect taxes and spend and borrow money.)

I went looking for an example and to save anyone else some time: Ecuador no longer uses the sucre and instead has used the US dollar since 2000. They do still have a ministry of economy and finance which has a central bank. Fascinating ty!! https://en.wikipedia.org/wiki/Ministry_of_Economy_and_Financ...

Re: Bitcoin network average energy consumption per transaction compared to VISA

#77

Post by hn_throwaway_99 »

D13Fd wrote: post #64
hn_throwaway_99 wrote: post #17

I mean, I know people are commenting on whether the comparison is valid, but regardless, the BTC energy cost at at 741 kWh for a single transaction is pretty close to the average monthly household energy usage in the US of 867 kWh [1]. That seems pretty nuts on its face to me. [1] https://electricityplans.com/kwh-kilowatt-hour-can-power/

Intuitively, it seems to me that the 741 kWh number for a single transaction cannot be a marginal number (i.e., the cost of the transaction itself without factoring in overhead). That's just way too high - it would be around $100 in electricity per transaction. The difference is important because as Bitcoin adoption increases the number of transactions will increase and the cost-per-transaction will fall dramatically…

No, that number sounds like a marginal number to me. Someone else commented that miners pay an average of like 4 cents per kWh, which works out to about $30 of electricity costs to miners per transaction. Recent per-transaction miner fees are currently in the $10-20 range, but don't forget the winning miner gets a reward that's currently ~$330,475 per block.

Re: Bitcoin network average energy consumption per transaction compared to VISA

#79

Post by coralreef »

boardwaalk wrote: post #69
coralreef wrote: post #35

Not sure why Visa is a relevant comparison. I can setup a dozen nodes on AWS and build a crypto with a million times the transaction capacity of Bitcoin. Obviously the downside to this is centralization; someone can be banned or censoredfor any reason. Blockchains are first decentralized, permissionless, censorship resistant solutions.

... it's relevant because to the end user, moving money from place to place is moving money place to place. Bitcoin is the defacto main crypto currency and Visa is one of the main payment processors. A cryptocurrency not attached to anything else is useless. I'm sure you could easily beat Visa too by having a little app that "processes transactions" on some modern 5nm scale mobile device. But it wouldn't be real worl…

... it's relevant because to the end user, moving money from place to place is moving money place to place.

Yes, moving money to protect it from hyperinflation. Protecting it from being seized or appropriated by corrupt regimes.

Bitcoin moves money very well in those contexts, can Visa do those things?

Re: Bitcoin network average energy consumption per transaction compared to VISA

#80

Post by jasonlaramburu »

coralreef wrote: post #72
jasonlaramburu wrote: post #56

Earlier quoted context omitted.

BTC mining is highly centralized. Fiat on/off ramps (essential if one wishes to spend her BTC) are regulated by local governments and relatively easy to censor. If there really were global demand for a censorship resistant currency don’t you think there would be more merchants accepting BTC by now?

https://twitter.com/real_vijay/status/968854238095753216?lan... 1/ There are four stages that all market-based monetary goods pass through in their evolution to becoming a fully fledged money: 1. Collectible 2. Store of Value 3. Medium of exchange 4. Unit of account

How many examples of this exist besides gold and silver?
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