Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Bitcoin's vast energy use could burst its bubble

bbc.co.uk

Post reply on HN
Print view View original

101–109 of 109 posts

Re: Bitcoin's vast energy use could burst its bubble

#101

Post by oliwarner »

stblack wrote: post #35

The total value of Bitcoin produced and changed as fees is presently in the order of US$50M per day. Miners are competing very profitably, on aggregate, for this amount of money daily. Therefore the full-factor cost of the global Bitcoin network is under $50M per day. So whatever these people say about global energy use, it's under $50M per day.

I feel like this stretches the meaning of value into deep space. It's a speculative monetary value, based in confidence of return.

Its value evaporates with that confidence. It only takes one person or ban from one country to start a cascade sell off, and see its value go off a cliff.

> So whatever these people say about global energy use

... Is that it's destroying the planet for fun and profit. It's using a large country's power to do nothing of any tangible value. And it seems to be a bizarre thing to encourage as we cruise into a global climate disaster.

Re: Bitcoin's vast energy use could burst its bubble

#102

Post by tromp »

gus_massa wrote: post #55
jmfldn wrote: post #2

""If Bitcoin were to be adopted as a global reserve currency," he speculates, "the Bitcoin price will probably be in the millions, and those miners will have more money than the entire [US] Federal budget to spend on electricity." "We'd have to double our global energy production," he says with a laugh. "For Bitcoin." He says it also limits the number of transactions the system can process to about five per second. T…

Remember that every 4 years the amount of coins the miners get out of thin air halves, and after 2040 the miners will only get the fees.

Miner competes not only for block subsidy, but for tx fees as well. Those can be expected to dominate within 4 or 5 halvings, putting a lower bound on the energy consumption of bitcoin.

Re: Bitcoin's vast energy use could burst its bubble

#103

Post by gus_massa »

tromp wrote: post #102
gus_massa wrote: post #55

Earlier quoted context omitted.

Remember that every 4 years the amount of coins the miners get out of thin air halves, and after 2040 the miners will only get the fees.

Miner competes not only for block subsidy, but for tx fees as well. Those can be expected to dominate within 4 or 5 halvings, putting a lower bound on the energy consumption of bitcoin.

Let's imagine that overnight the price of bitcoin increase x50 to $1000000 like in the article.

In a imaginary word where miners get only the block subsidy, they get x50 more money are incentive to use like x50 more electricity.

In a imaginary word where miners get only the tx fees, they can reduce the fees x50 and get the same money. (Moreover, the size of the transactions will be x50 smaller in Bitcoins.)

In the real world where miners get both, it's something in between more complicated, but each halving makes it more similar to the second scenario.

Re: Bitcoin's vast energy use could burst its bubble

#104

Post by NikolaNovak »

frankenst1 wrote: post #93
NikolaNovak wrote: post #14

Earlier quoted context omitted.

>>"Why does Bitcoin have to justify its energy usage when the legacy financial system does not?" These questions always strike me as disingenuous / intentionally obtuse. But charitably assuming an honest question for purpose of frank discourse, my simplest answer / understanding is that in general, in the daily transactional system, participants work to reduce energy cost per transaction and over most periods of time…

The increase in hashrate can be interpreted as an increase in security, i.e. it is much more difficult/expensive for an attacker (even nation-level) to harm Bitcoin. This is mandatory for a financial network that aims to operate on global scale. Bitcoin does not consume energy per transaction but per block. How many transactions the block contains does not change the energy requirement to mine it. If the number of tr…

I appreciate the response but we may disagree as to what is the summary / "long story short".

My "long story short" question is: over time, has Bitcoin effective energy per transaction gone up or down?

Not theory, not what nebulous public policy changes should happen to justify the energy mix, not what we think may might need to happen et cetera et cetera.

Is the energy cost per transaction in real world for bitcoin going up or down? (in principle calculated by "energy used for bitcoin system in total divided by number of transactions executed per some unit of time").

Everything else is trying to muddy it up from my personal perspective.

Re: Bitcoin's vast energy use could burst its bubble

#105

Post by BobbyJo »

frankenst1 wrote: post #98
BobbyJo wrote: post #96

Earlier quoted context omitted.

Sure, but then you've dramatically reduced the scale at which it can operate, which makes it way less viable than now.

There is no reduction, you can't even distinguish a large-scale single miner from a mining pool with thousands of at home miners.

Most of the hash power is currently contributed by large scale miners. Shutting just them down would cripple thing considerably. Then they could go after the methods of organizing pools, but I suspect that wouldn't be necessary.

For large economies, just saying it's illegal without enforcing anything at all would be massive blow, since blockchains' only current use case is speculation. If the the US government said tomorrow 'bitcoin is illegal' the price would crash to the point that mining no longer even made financial sense.

Re: Bitcoin's vast energy use could burst its bubble

#106

Post by bingbong70 »

BobbyJo wrote: post #105
frankenst1 wrote: post #98

Earlier quoted context omitted.

There is no reduction, you can't even distinguish a large-scale single miner from a mining pool with thousands of at home miners.

Most of the hash power is currently contributed by large scale miners. Shutting just them down would cripple thing considerably. Then they could go after the methods of organizing pools, but I suspect that wouldn't be necessary. For large economies, just saying it's illegal without enforcing anything at all would be massive blow, since blockchains' only current use case is speculation. If the the US government said t…

My understanding is that bitcoin trading increases when governments ban it...Streisand and a few other effects at work here.

Re: Bitcoin's vast energy use could burst its bubble

#107

Post by frankenst1 »

NikolaNovak wrote: post #104
frankenst1 wrote: post #93

Earlier quoted context omitted.

The increase in hashrate can be interpreted as an increase in security, i.e. it is much more difficult/expensive for an attacker (even nation-level) to harm Bitcoin. This is mandatory for a financial network that aims to operate on global scale. Bitcoin does not consume energy per transaction but per block. How many transactions the block contains does not change the energy requirement to mine it. If the number of tr…

I appreciate the response but we may disagree as to what is the summary / "long story short". My "long story short" question is: over time, has Bitcoin effective energy per transaction gone up or down? Not theory, not what nebulous public policy changes should happen to justify the energy mix, not what we think may might need to happen et cetera et cetera. Is the energy cost per transaction in real world for bitcoin…

> Is the energy cost per transaction in real world for bitcoin going up or down? Everything else is trying to muddy it up from my personal perspective.

Energy is expended to secure the network as a whole and not for the transfer of coins.

But if you insist on computing such a metric with only limited applicability, the answer is: Yes, the metric goes up:

Estimated power consumption per day, 2020-2021 +5%:

    01/01/2020: 0.2 TWh
    01/01/2021: 0.211 TWh
Estimated number of onchain transactions per day, 2020-2021: +6%:

    01/01/2020: 288K
    01/01/2021: 305K
And this doesn't even include all the hidden private transactions that occur off-chain on Layer 2 solutions like the Lightning Network:

Number of nodes on the Lightning Network, 2020-2021 +60%:

    01/01/2020: 5K
    01/01/2021: 8K
Capacity of the Lightning Network, 2020-2021 +430%:

    01/01/2020: $6M
    01/01/2021: $32M

Re: Bitcoin's vast energy use could burst its bubble

#108

Post by frankenst1 »

BobbyJo wrote: post #105
frankenst1 wrote: post #98

Earlier quoted context omitted.

There is no reduction, you can't even distinguish a large-scale single miner from a mining pool with thousands of at home miners.

Most of the hash power is currently contributed by large scale miners. Shutting just them down would cripple thing considerably. Then they could go after the methods of organizing pools, but I suspect that wouldn't be necessary. For large economies, just saying it's illegal without enforcing anything at all would be massive blow, since blockchains' only current use case is speculation. If the the US government said t…

> Shutting just them down would cripple thing considerably.

Not really, Bitcoin accounts for a reduction in hashrate by adjusting the mining difficulty every 2015 blocks (~2 weeks).

> Then they could go after the methods of organizing pools, but I suspect that wouldn't be necessary.

Not possible if they are organized via secured networks like TOR.

Re: Bitcoin's vast energy use could burst its bubble

#109

Post by frankenst1 »

frankenst1 wrote: post #107
NikolaNovak wrote: post #104

Earlier quoted context omitted.

I appreciate the response but we may disagree as to what is the summary / "long story short". My "long story short" question is: over time, has Bitcoin effective energy per transaction gone up or down? Not theory, not what nebulous public policy changes should happen to justify the energy mix, not what we think may might need to happen et cetera et cetera. Is the energy cost per transaction in real world for bitcoin…

> Is the energy cost per transaction in real world for bitcoin going up or down? Everything else is trying to muddy it up from my personal perspective. Energy is expended to secure the network as a whole and not for the transfer of coins. But if you insist on computing such a metric with only limited applicability, the answer is: Yes, the metric goes up: Estimated power consumption per day, 2020-2021 +5%: 01/01/2020:…

> Yes, the metric goes up:

Oops, meant to say transactions go up vs energy, so the metric energy/transaction goes actually down.

Post reply on HN