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Bitcoin Energy Consumption Index

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Re: Bitcoin Energy Consumption Index

#171

Post by Nursie »

JuicyJay wrote: post #161
jstanley wrote: post #73

Earlier quoted context omitted.

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…

Who told you bitcoin was anonymous?

Re: Bitcoin Energy Consumption Index

#172

Post by Taek »

jcfrei wrote: post #169
Taek wrote: post #160

Earlier quoted context omitted.

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 i…

No, in a proof of stake system collusion to rewrite history is essentially free.

In a proof of work system, even if you collude you still have to spend a non-trivial sum of electricity to create that alternate history. Electricity that would be making you money via the block reward if you were using it honestly.

It is provably more expensive to reconstruct history in a PoW setting, even when everyone is happily colluding.

Re: Bitcoin Energy Consumption Index

#173

Post by matt_wulfeck »

tylersmith wrote: post #98
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…

Energy consumption is in no way related to transaction volume. Whether there are thousands of txs per block or only one the energy used will be the same.

Which is part of the problem, since the max number of transactions Bitcoin can process a second is around 10.

Re: Bitcoin Energy Consumption Index

#174

Post by tylersmith »

matt_wulfeck wrote: post #173
tylersmith wrote: post #98

Earlier quoted context omitted.

Energy consumption is in no way related to transaction volume. Whether there are thousands of txs per block or only one the energy used will be the same.

Which is part of the problem, since the max number of transactions Bitcoin can process a second is around 10.

Sure, but it means it when it can handle thousands of transactions the energy usage doesn't need to increase.

Re: Bitcoin Energy Consumption Index

#175

Post by SimonPStevens »

pdpi wrote: post #150
SimonPStevens wrote: post #137

Earlier quoted context omitted.

You have a very distorted view of how it works. The number of transactions is entirely unrelated to the number of people mining. There could be an increase in transactions while the number of miners falls, or vice a versa. This is why the hash difficulty adjusts, to ensure that the new block rate (and therefore the transaction rate) stays the the same regardless of the number of miners. If the number of miners droppe…

> The number of transactions is entirely unrelated to the number of people mining I also commented elsewhere to this effect, but this is not quite true: number of transactions correlates very strongly with higher transaction fees, which further incentivises mining activity. Higher transaction volumes also usually come hand in hand with higher prices, which is another incentive for mining activity. Just because there…

Yeah, I saw that, you are of course right, but like you say that is a 2nd order effect.

The post I replied to was claiming that more transactions strictly required more miners to process them, which isn't true. Yes, more transactions might incentiveise more miners, but it doesn't require them. And it's only one part of the complex interplay of incentives that miners face.

Say price dropped sharply, that could result in an increase in transactions as speculators scrambled to get their coins to an exchange to sell, while at the same time we might see a drop in miners because with lower bitcoin priced there is less payout for mining.

Ultimately the sequence of incentives and disincentives that drive miners is complex. Because of course, although a drop in price might deter some miners, if others believed that the drop was only temporary may continue mining and just hold the bitcoin to sell later when the price recovers. I think it's hard to say anything totally concrete about the expected miner behaviour following any event.

Re: Bitcoin Energy Consumption Index

#176

Post by aqme28 »

rspeer wrote: post #106
aqme28 wrote: post #97

Earlier quoted context omitted.

I too hate seeing __ watt-hours per year. What's the point of the double time conversion? It's like saying "The movie starts in 3 kilometers per mile-per-hour"

I mean, I understand why, it's because often you want to relate it to cost, and electricity is priced in $/KWh, not in ($/sec)/watt.

There it is again though! A Watt is a Joule/sec, so you shouldn't even use Watt-seconds as a unit. You mean $/Joule.

Re: Bitcoin Energy Consumption Index

#177

Post by rdlecler1 »

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…

Yes, but you have to make new bills to replace old bills.

Re: Bitcoin Energy Consumption Index

#178

Post by IgorPartola »

colordrops wrote: post #163
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.

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.

You can't buy a pizza with gold. You can with cash. BTC is trying to do both, and is failing as a store of value right now due to volatility though that may change.

Re: Bitcoin Energy Consumption Index

#179

Post by [deleted] »

Taek wrote: post #172
jcfrei wrote: post #169

Earlier quoted context omitted.

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 i…

No, in a proof of stake system collusion to rewrite history is essentially free. In a proof of work system, even if you collude you still have to spend a non-trivial sum of electricity to create that alternate history. Electricity that would be making you money via the block reward if you were using it honestly. It is provably more expensive to reconstruct history in a PoW setting, even when everyone is happily collu…

[deleted]
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