Bitcoin Energy Consumption Index • Hacker News Board

Re: Bitcoin Energy Consumption Index

#151

Post by DigiEconomist » Sat, Aug 26, 2017, 10:15 PM UTC

mrb wrote: post #133

BECI is flawed, I wrote a critic of it some months ago: http://blog.zorinaq.com/serious-faults-in-beci This motivated me to research and publish a more precise energy comsumption estimate, and I have been published in Bitcoin Magazine: http://blog.zorinaq.com/bitcoin-electricity-consumption https://bitcoinmagazine.com/articles/op-ed-bitcoin-miners-co... I always like to remind people that Bitcoin miners consume about…

The first piece is merely a defamation project and contains a lot of false information. You forced me to publish a statement (and release the emails we exchanged) on that here:

https://digiconomist.net/re-serious-faults-in-beci

The second piece contains a lot of cherry picking that I asked about in these emails as well, but never got a response to (instead my emails were quote mined to support those false statements).

Nothing else to say to you. Everybody else is welcome to ask questions and discuss as usual.

Re: Bitcoin Energy Consumption Index

#152

Post by hwillis » Sat, Aug 26, 2017, 10:16 PM UTC

spiorf wrote: post #123

hwillis wrote: post #107

Earlier quoted context omitted.

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 can't just scale the number of transactions in a block forever and still have a stable currency. If you have only a few miners working on massive blocks, then they confer very little confidence onto the transactions in the blocks. More transactions, more mining. The whole point of the system is to verify transactions and it stops working if it doesn't do that.

Re: Bitcoin Energy Consumption Index

#153

Post by chinathrow » Sat, Aug 26, 2017, 10:16 PM UTC

mrb wrote: post #133

BECI is flawed, I wrote a critic of it some months ago: http://blog.zorinaq.com/serious-faults-in-beci This motivated me to research and publish a more precise energy comsumption estimate, and I have been published in Bitcoin Magazine: http://blog.zorinaq.com/bitcoin-electricity-consumption https://bitcoinmagazine.com/articles/op-ed-bitcoin-miners-co... I always like to remind people that Bitcoin miners consume about…

> I always like to remind people that Bitcoin miners consume about the same amount of energy as Christmas decorative lights in the US. Kinda puts things in perspective...

https://en.m.wikipedia.org/wiki/Whataboutism

Re: Bitcoin Energy Consumption Index

#154

Post by Taek » Sat, Aug 26, 2017, 10:18 PM UTC

tylersmith wrote: post #111

joeyspn wrote: post #103

Earlier quoted context omitted.

> 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.

A lot of research was done by heavyweights for PoS in 2012 and 2013. The consensus was that it was a fruitless pursuit and that PoS could not match PoW in terms of security and decentralization.

Several papers have been written about it.

https://download.wpsoftware.net/bitcoin/pos.pdf

Re: Bitcoin Energy Consumption Index

#155

Post by egypturnash » Sat, Aug 26, 2017, 10:20 PM UTC

acchow wrote: post #125

hwillis wrote: post #79

Earlier quoted context omitted.

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…

I can also put that cash in a sufficiently opaque and uninteresting-looking envelope, put it in the mail, and the Post Office will take over. There is time and energy cost incurred, but it is a cost already being paid. Mostly by advertising, right now, since an assortment of lawmakers have decided in their infinite wisdom that it's not something our tax dollars should be supporting any more.

Re: Bitcoin Energy Consumption Index

#156

Post by avar » Sat, Aug 26, 2017, 10:20 PM UTC

jaekwon wrote: post #147

avar wrote: post #135

Earlier quoted context omitted.

A transaction here is a block. A block averages 2000 or so transfers, so that $20 becomes $0.01 for any individual transfer in the block. Electricity price in the US is also irrelevant. As the article shows just over 0% of blocks are mined in the US, or a rounding error. Bitcoin mining chases cheap electricity.

No, a transaction here is referring to a transaction. The block reward on Bitcoin is already 12.5BTC is 12.5 × $4000+. That incentives the expenditure of significantly more energy than $20 worth.

You're right. Sorry. After re-reading the article I see the entirety of my comment is wrong.

Re: Bitcoin Energy Consumption Index

#157

Post by Taek » Sat, Aug 26, 2017, 10:22 PM UTC

kybernetikos wrote: post #90

spiorf wrote: post #83

The energy expended is a guarantee of security and immutability. The fact that real world energy is expended is the thermodynamic guarantee of the irreversibility of a transaction. If you have access to the VISA database, and change something, you cannot have the cryptographic proof that it has not been tampered with. At the very best, you trust a VISA root key. With Bitcoin you trust math and physics, telling that i…

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.

That energy is not just confirming the transactions in the existing block, it is protecting all transactions in the blockchain history, adding security to each of them. That represents a history of more than $70 billion in value. Suddenly it doesn't seem so expensive anymore.

Re: Bitcoin Energy Consumption Index

#158

Post by tylersmith » Sat, Aug 26, 2017, 10:22 PM UTC

Taek wrote: post #154

tylersmith wrote: post #111

Earlier quoted context omitted.

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

A lot of research was done by heavyweights for PoS in 2012 and 2013. The consensus was that it was a fruitless pursuit and that PoS could not match PoW in terms of security and decentralization. Several papers have been written about it. https://download.wpsoftware.net/bitcoin/pos.pdf

I'm just trying to not be absolutest by stating it can't work. I'm in the camp that believes it's just obfuscated PoW.

Re: Bitcoin Energy Consumption Index

#159

Post by amelius » Sat, Aug 26, 2017, 10:26 PM UTC

rothbardrand wrote: post #118

amelius wrote: post #86

Earlier quoted context omitted.

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.

Check jaekwon's comment above.

Re: Bitcoin Energy Consumption Index

#160

Post by Taek » Sat, Aug 26, 2017, 10:27 PM UTC

jaekwon wrote: post #142

GBiT wrote: post #35

Earlier quoted context omitted.

Miners can choose to include more profitable transactions, skiping segwit ones. POS will not work. you need to back Bitcoins value with something, and its electricity. Gov backing with gold.

Incorrect. Bitcoin isn't "backed by electricity". You can't turn Bitcoin back into energy. The energy is used to secure a distributed ledger to prevent double spend attacks on ongoing transactions, in a really inefficient way, but don't call it "backing". PoS will succeed. It already has, we've set all the pieces. The thing is, you don't want to live in a world where Bitcoin and PoW dominate our financial transaction…

It takes a cryptographically provable amount of energy to reverse a Bitcoin transaction, and that amount is equal to the money spent on electricity mining blocks that confirm a transaction.

Proof of Stake systems have no equivalent. They operate by trusting the staking parties are not colluding to create an alternate history. But if they do decide to collude, there is little thermodynamic cost to rewriting history.

It's a fundamentally weaker system, and one that depends on trust. The whole value of proof of work is that it allows you to escape trust.