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Bitcoin Energy Consumption Index

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Re: Bitcoin Energy Consumption Index

#121

Post by leroman »

alister wrote: post #44

You can't compare Bitcoin to Visa. Visa is merely a payment sytem -- a means of transfer of money that already exists. Visa is not money. Bitcoin however is money. As well as being a payment system. The correct comparison would be to compare the cost of Bitcoin to U.S. dollars or gold. Gold requires hundreds of dollars per ounce and untold energy to extract. U.S. dollars require the existence of a powerful economy an…

The fairer comparison would be Bitcoin vs Visa the corporation, which includes buildings, people, air-con, employee traveling for work, to begin with.

Still, let's hope Bitcoin moves away from wasting energy soon.

Re: Bitcoin Energy Consumption Index

#122

Post by IgorPartola »

hwillis wrote: post #79
IgorPartola wrote: post #52

Earlier quoted context omitted.

Compare it to cash and coins seems the most appropriate. How much energy does harvesting cotton, making into bills, and distributing it all over the place take? Don't forget those fun armoired trucks that have to cart it from place to place. Pennies famously cost more than $0.01 to produce because of the cost of metal. Metal that has to be dug out of the earth, trucked, smelted, trucked, stamped, trucked again.

According to this it costs almost 21 cents to "make" a dollar of bitcoins. According to the mint's 2015 annual report[1] they made 1,114 million dollars in circulating coins at a cost of .51 cents per dollar in coins. However bills cost 4.9 cents/dollar for $1 bills and half a cent per dollar for $20 bills. So the vast majority of money is much, much cheaper than a bitcoin. [1]: https://www.usmint.gov/wordpress/wp-co…

That's to make it. What about trucking it around, accounting for it, securing it, etc.?

Re: Bitcoin Energy Consumption Index

#123

Post by spiorf »

hwillis wrote: post #107
spiorf wrote: post #89

Earlier quoted context omitted.

This is very wrong. It does not work that way at all. Volume or value of transactions has nothing to do with the energy expended. The energy is needed to calculate a mathematic proof that makes sure your transaction cannot be reversed or tampered with. This mathematic proof on average is calculated every 10 minutes, with no correlation to the number of transactions. You make a transaction, and if the bitcoin network…

The hashing is merely a way to choose a random block. It's not a proof and it doesn't do anything fancy. It just picks a random computer to say "this is how the transaction history looks". The energy increases with the volume of transactions because there will be more people calculating hashes. The more people mining, the harder they make the hash calculation so that the target is ten minutes. More transactions = mor…

I repeat, you got it very wrong.

Transaction number is not correlated with mining energy expenditure.

Mining is used to secure the ledger in a way that the same amount of energy is needed to alter it.

The block hash begins with a number of zeros.

Try for yourself how many tries it takes to find a string that hashes to a hash beginning with 3 zeros.

Bitcoin block hashes begin with 13 or 14 zeros IIRC. This means that you need to try trillions of combinations again if you want to alter a block. And then you must keep finding other hashes with enough zeros fast enough to outcompete the whole network.

But the cost of hashing is the same, with 1, 10 or 1000 transactions in a block. And the block time is on average fixed at 10 minutes.

You don't hash transactions directly, you hash a block header that keeps only the merkle root hash of the transactions. The merkle root is fixed size.

Re: Bitcoin Energy Consumption Index

#124

Post by z3t4 »

While it's a lot of power being used, it's pretty much all automated, versus any other currency that takes a lot of manual labor. Bitcoints biggest flaw in my mind is that there is no trust built in. After each transaction it should be possible to give a rating, so that each wallet/account has a reputation, it could work like "Pagerank". Trust is essential to Bitcoin and Bitcoin markets usually has either public trust, or rating and escrow added on.

Re: Bitcoin Energy Consumption Index

#125

Post by acchow »

hwillis wrote: post #79
IgorPartola wrote: post #52

Earlier quoted context omitted.

Compare it to cash and coins seems the most appropriate. How much energy does harvesting cotton, making into bills, and distributing it all over the place take? Don't forget those fun armoired trucks that have to cart it from place to place. Pennies famously cost more than $0.01 to produce because of the cost of metal. Metal that has to be dug out of the earth, trucked, smelted, trucked, stamped, trucked again.

According to this it costs almost 21 cents to "make" a dollar of bitcoins. According to the mint's 2015 annual report[1] they made 1,114 million dollars in circulating coins at a cost of .51 cents per dollar in coins. However bills cost 4.9 cents/dollar for $1 bills and half a cent per dollar for $20 bills. So the vast majority of money is much, much cheaper than a bitcoin. [1]: https://www.usmint.gov/wordpress/wp-co…

I don't agree with the comparison to "making" coins or cash.

Coins and cash actually get consumed as they degrade and/or get lost or destroyed. You need to replenish the supply.

But you can circulate bitcoin forever.

You need to compare transactions.

How do I send you cash? You can give me an address to meet you at. We both drive our cars or take public transit there and consume some amount of energy and time to meet up. Then I give you cash.

Or you could just tell me a bitcoin address to send to.

Re: Bitcoin Energy Consumption Index

#126

Post by akvadrako »

kobeya wrote: post #48
1001101 wrote: post #43

Earlier quoted context omitted.

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.)

Do that and it would no longer be useful as proof of work. Proof of work-i-was-going-to-do-anyway is not useful for securing the ledger.

That's incorrect. All that matters is you can't game the system by taking shortcuts or deciding what the problem will be beforehand; the work cannot be even partially computable without knowing the previous block.

Re: Bitcoin Energy Consumption Index

#127

Post by spiorf »

proofofstake wrote: post #84
hwillis wrote: post #60

Earlier quoted context omitted.

>The correct comparison would be to compare the cost of Bitcoin to U.S. dollars or gold. Gold requires hundreds of dollars per ounce and untold energy to extract. U.S. dollars require the existence of a powerful economy and trillion dollar military to keep the currency secure and desirable. No it isn't- the energy cost of bitcoin is ongoing and depends on the volume of transactions. Each time money changes hands, it…

For a fair comparison we should look at "energy" in an abstract manner. Time and money is energy too. Every time gold exchanges hands, it also costs energy.

Think about the energy expended to take that gold out of earth. And to make the chemicals for extractions....

Re: Bitcoin Energy Consumption Index

#128

Post by spiorf »

Digiconomist wrote: post #47
alister wrote: post #44

You can't compare Bitcoin to Visa. Visa is merely a payment sytem -- a means of transfer of money that already exists. Visa is not money. Bitcoin however is money. As well as being a payment system. The correct comparison would be to compare the cost of Bitcoin to U.S. dollars or gold. Gold requires hundreds of dollars per ounce and untold energy to extract. U.S. dollars require the existence of a powerful economy an…

The comparison to VISA is a common one. Whether it makes sense to use BTC in a certain way ultimately depends on the user and how they're using it. But honestly, as a medium of exchange Bitcoin simply doesn't make sense in most cases.

At least until/if Ligtning networks is proved to work.

Re: Bitcoin Energy Consumption Index

#129

Post by kybernetikos »

slg wrote: post #120
jstanley wrote: post #104

Earlier quoted context omitted.

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…

Yeah, I hadn't really considered how simple economics essentially forces this to grow to exactly the point where the externalities are unsupportable based on the benefit provided.

Re: Bitcoin Energy Consumption Index

#130

Post by akvadrako »

raffomania wrote: post #8

Has anyone read up on the proof-of-stakes algorithms mentioned in this article? I didn't hear of those before.

Don't count on them ever working - it may be mathematically impossible and at the very least it's a much bigger technical challenge than PoW.
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