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Bitcoin Energy Consumption Index

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Re: Bitcoin Energy Consumption Index

#111

Post by tylersmith »

joeyspn wrote: post #103
kybernetikos wrote: post #90

Earlier quoted context omitted.

I get that the energy is being used for something useful and cool, but when the energy cost to secure a single transaction could power 5 households for a day, then something is wrong and needs to be fixed. Surely even fans can agree there's a level at which it just doesn't make sense any more.

> something is wrong and needs to be fixed It's already fixed with PoS... IMO the winner of the cryptocurrency-race will be a PoS-based coin.

PoS deserves research but it's far from shown itself to be viable as the dominate consensus mechanism.

Re: Bitcoin Energy Consumption Index

#112

Post by Digiconomist »

aianus wrote: post #95
etatoby wrote: post #76

Earlier quoted context omitted.

Still, there is a fixed amount of hydro power available, short of building new dams. This puts Bitcoin's toll on fossil fuel. (If Bitcoin didn't exist, the hydro power would still be there and would be used for something else, therefore less fossil fuel would have to be burned in its place.)

> If Bitcoin didn't exist, the hydro power would still be there and would be used for something else That's not a good assumption. There are many power plants in China in the middle of nowhere unconnected to much. It's completely plausible that the entire bitcoin network could run on clean energy that otherwise couldn't be used for much else because it's too remote (geothermal in Greenland or something).

I hope we're not building hydro power plants for the sole purpose of supporting the Bitcoin network. The energy may be "clean", but these projects have their own impact on the surrounding ecosystem.

Re: Bitcoin Energy Consumption Index

#113

Post by tylersmith »

jcfrei wrote: post #71
jstanley wrote: post #38

Earlier quoted context omitted.

Proof of Stake is just Proof of Work with hidden work. Miners will crank whatever handle they can crank to increase their payout, up to the point where they spend more marginal effort cranking the handle than the corresponding marginal payout is worth. In PoW (in bitcoin) that handle is SHA256. In Proof of Stake, it's more obscure, but they will find it, and they will crank it, and you'll just be back where you start…

This is a misleading argument. Yes, miners will always spend more until marginal revenue == marginal cost. The problem with the proof of work system of bitcoin (and many others) is its inefficiency that only allows for a low transactions throughput. Proof of work has no inherent value for the system, it's simply a way to cap the network throughput to about 1MB per 10 minutes because anything lower than 10 minutes wil…

The point is expend work to create signatures, creating a crytoeconomic cost to state changes.

Re: Bitcoin Energy Consumption Index

#114

Post by SilasX »

1001101 wrote: post #43
givinguflac wrote: post #3

That is an absurd amount of energy. This really changes my opinion on this being a feasible currency.

I agree. I've been racking my brain on ways to connect proof of work to something useful (like folding proteins, general purpose distributed computing, etc.)

There's primecoin, which uses a proof of work based on finding a special kind of prime number, which (they claim) has use in the outside world, at least the academic one.

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

Generally, to have a useful PoW, it needs to meet some criteria:

1) Easily verifiable

2) Necessary work on the problem is easily quantifiable and estimable

3) Problem can be programmatically generated from random data.

One model might be NP-complete problems. Users feed in problem instances they want solved, with a bounty. You find out how many guesses it should take. A valid proof of work then requires solving enough such problems, combined, to exceed the difficulty threshold. (You'd also need to solve one based on the current known transaction history.)

The problem there is that it's hard to know if a given NP complete problem instance is "one of the hard ones" and to find such instances.

Re: Bitcoin Energy Consumption Index

#115

Post by spiorf »

politician wrote: post #23

This is one of the reasons I prefer proof-of-stake schemes, despite the complexity, low power consensus is preferable given roughly equivalent tamper resistance. State collusion with mining pools is a credible threat to proof-of-work schemes.

The problem with POS is that you do not have a mathematical guarantee of immutability. It costs nothing to try to stake on different blocks, and every counter-measure relies on the fact that the network is not partitioned.

This would be fatal in case of a remote crash vulnerability, because an attacker could partition the network at will.

Or a nation/state could cut internet access.

Without real world energy, you lose byzantine fault tolerance.

Re: Bitcoin Energy Consumption Index

#116

Post by rothbardrand »

amelius wrote: post #68

> Electricity consumed per transaction: 165 kWh Thats about $20 in the US. If a transaction is that expensive, how can this system even work for transactions with a value of that order? Are large transactions "sponsoring" small transactions? What happens if more people use the system for small transactions? Will BTC become unusable?

Yeah, that's inaccurate. The major portion of that energy expenditure is keeping the bitcoins that aren't moving secure.

Put another way, this is saying it is estimated to take about $800M it keep $40B of bitcoin secure.

This is probably a bit expensive in terms of comparing to fiat currencies (But then we are probably not covering all the real costs of those currencies)... but bitcoin is still in the technology adoption life-cycle and has not yet become a currency.

When the inflation of BTC has declined and it has become fully adopted (assuming this happens) then the numbers will likely start to make a lot more sense.

Also, the vast majority of transactions in about 2 years will likely be happening off chain using lightening network and the like.

Those transaction fees will happily be covered by merchants who are currently paying %2-%5 per transaction to Visa et. al. and will be more than happy to pay %1 or less to Bitcoin to manage a lightening channel.

Really, it will be companies disrupting Visa building payment networks out of lightening channels and they will have to keep fees really low because LN is open source and anyone can compete with them.

Re: Bitcoin Energy Consumption Index

#117

Post by glenstein »

rainbowmverse wrote: post #20
mark024 wrote: post #15

demand & offer, if the energy were more expensive, fewer would mine and the difficulty would drop, I wish I could mine on my low powered laptop, but if you want to raise the pitch forks against bitcoin, on the same logic, we could stop playing computer games, watch movies/shows/tv etc, even using modern phones, the old nokias that lasted a week one one charge would do fine.

People have been raising the issue of our civilization's wastefulness for years. Where have you been?

Sure, we talk about plastic in the oceans and CO2 and electricity usage at a general level. But I think the commenter you are replying to is basically right that there isn't a sustained cultural conversation targeting the wastefulness of very particular forms of applied electricity usage.

And I don't think a one-off article changes that since you can find one-off articles about practically anything. It seems weirdly specific to talk about bitcoin's energy cost this way when we don't single out, say, Clash of Clans or facebook posts about the Ice Bucket challenge and lament their specific energy costs. And I think the reason for the difference has to do with the idiosyncratic culture surrounding bitcoin rather than bitcoin being a unique harm in terms of electricity usage.

Re: Bitcoin Energy Consumption Index

#118

Post by rothbardrand »

amelius wrote: post #86
amelius wrote: post #68

> Electricity consumed per transaction: 165 kWh Thats about $20 in the US. If a transaction is that expensive, how can this system even work for transactions with a value of that order? Are large transactions "sponsoring" small transactions? What happens if more people use the system for small transactions? Will BTC become unusable?

So, if you look just at transaction cost the system clearly cannot sustain itself. But as more people buy into BTC, the system keeps from collapsing. If you ask me, that's starting to look like a Ponzi scheme in disguise ...

Check your premises-- your transaction cost is inaccurate.

Re: Bitcoin Energy Consumption Index

#120

Post by slg »

jstanley wrote: post #104
kybernetikos wrote: post #90

Earlier quoted context omitted.

I get that the energy is being used for something useful and cool, but when the energy cost to secure a single transaction could power 5 households for a day, then something is wrong and needs to be fixed. Surely even fans can agree there's a level at which it just doesn't make sense any more.

Yes, there is a level at which it doesn't make sense any more. In a sufficiently efficient market, that is the point we are at, at any given point in time. I believe the bitcoin mining market is efficient enough already that we're more or less there.

That shows the primary failings of putting all trust in an efficient market. The "makes sense" breaking point in an efficient market is when it stops making financial sense for the miners. It relies on rational miners who don't don't succumb to the sunk cost fallacy after investing large sums upfront in mining rigs. While it also ignores the negative externalities involved in increasing global electricity usage like climate change.
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