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Bitcoin Energy Consumption Index

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Re: Bitcoin Energy Consumption Index

#161

Post by JuicyJay »

jstanley wrote: post #73
rainbowmverse wrote: post #57

Earlier quoted context omitted.

I don't take it as a given that Bitcoin is a good solution to the problem those people solve with it. The best of the bad solutions is still bad, and Bitcoin isn't looking too good by its power consumption. It's okay to stop, really think about a problem, and find a good solution instead of charging ahead with a bad one oblivious to the brick wall ahead.

What do you think is the best way to store+exchange value across borders in a way that can't be censored or reversed by any third party and doesn't require trusting or asking permission from any third party? Personally, I think the answer is bitcoin.

Made an account just to upvote your comment. This is an incredibly powerful point that appears to be completely missed by the majority of threads I'm seeing. Maybe PoS will turn out to be effective and reduce energy costs for cryptocurrencies, but there is absolutely nothing like them. The anonymity of money is valuable for any free and open society, and Bitcoin is currently providing that to anyone willing to create a wallet.

Re: Bitcoin Energy Consumption Index

#162

Post by [deleted] »

Taek wrote: post #160
jaekwon wrote: post #142

Earlier quoted context omitted.

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. I…

[deleted]

Re: Bitcoin Energy Consumption Index

#163

Post by colordrops »

IgorPartola wrote: post #52
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…

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.

Cash and coins are not a store of value and are also a fiat currency associated with a central authority. Gold is a better analogy.

Re: Bitcoin Energy Consumption Index

#164

Post by Taek »

merkaloid wrote: post #33

>Number of U.S. households powered for 1 day by the electricity consumed for a single transaction: 5.58 The one that surprised me the most

It's a bad stat. The electricity that goes into a block doesn't just confirm the transactions in the block, it also confirms all the transactions in all blocks prior to that block, and those transactions have a cumulative value of about $70 billion.

The bleak picture painted on the article is an incomplete one by far.

Re: Bitcoin Energy Consumption Index

#165

Post by Taek »

schoen wrote: post #28
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.

There's some Wikipedia coverage. https://en.wikipedia.org/wiki/Proof-of-stake Maybe there's a better or more up-to-date introduction elsewhere.

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

Most bitcoin heavyweights who have researched proof of stake have concluded that it's not viable, and not worth further research in the context to trustless and decentralized systems.

Re: Bitcoin Energy Consumption Index

#166

Post by quinndupont »

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…

Bitcoin wants to be money, but it really isn't. It fails the traditional account (originally from Jevons); see Kubát 2015 [1]; Mandjee 2015 [2]. More obviously, it is far too volatile to function like money in a normal sense, see Golumbia 2017 [3]

[1] http://www.sciencedirect.com/science/article/pii/S2212567115... [2] https://litigation-essentials.lexisnexis.com/webcd/app?actio... [3] https://motherboard.vice.com/en_us/article/xwwv83/cryptocurr...

Re: Bitcoin Energy Consumption Index

#167

Post by [deleted] »

iaw wrote: post #14
TekMol wrote: post #4

The reward for mining a block will go down over time. In the end, all mining will be financed via the transaction fees. Then the market will figure out how much energy should be used per transaction.

Does that justify wasting enough electricity to power Dallas, Texas in the mean time?

[deleted]

Re: Bitcoin Energy Consumption Index

#168

Post by hwillis »

jstanley wrote: post #61
hwillis wrote: post #56

Earlier quoted context omitted.

Energy doesn't back bitcoin, it just stops the currency from inflating. Or it would, if mining could always produce new bitcoins, but IIRC its supposed to stop after a while. The difference being that a bitcoin does not entitle you to some unit of energy or work produced from it. The energy used to verify bitcoin transactions is just lost.

Energy backs bitcoin in the sense that "cheating" (reversing transactions or double spending) costs inordinate amounts of energy.

"backing" a currency usually refers to exchanging fiat money for a good with intrinsic value. That does not describe the relationship between bitcoin and electricity at all.

Energy ensures bitcoin's ownership, not its value (although it does impact its value indirectly).

Re: Bitcoin Energy Consumption Index

#169

Post by jcfrei »

Taek wrote: post #160
jaekwon wrote: post #142

Earlier quoted context omitted.

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. I…

PoS as well as PoW depend on the assumption that a majority (either in terms of value invested in hashing power or invested in tokens) of the network is following the rules. If you try to double spend in a PoW system you are betting your current electricity usage on a new block becoming the longest chain and in a PoS system you are betting the tokens themselves - from an economic point of view those two systems are indifferent (if your attempt doesn't succeed you have wasted either electricity or tokens). Collusion can happen in both cases. PoS systems introduce new (probably yet unsolved) problems but they aren't inferior from an economical point of view imho.

Re: Bitcoin Energy Consumption Index

#170

Post by Finnucane »

jimrandomh wrote: post #74
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…

> Gold requires hundreds of dollars per ounce and untold energy to extract. A valid comparison. Gold mining is spending resources to increase the amount of gold in existence, without delivering any other value. > U.S. dollars require the existence of a powerful economy and trillion dollar military to keep the currency secure and desirable. Not a valid comparison. Outside of a few relatively inexpensive activities at…

Gold is also not money, and arguably also mining it is largely a waste of resources and environmentally disastrous.
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