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Bitcoin Energy Consumption Index

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Re: Bitcoin Energy Consumption Index

#191

Post by Taek »

lttlrck wrote: post #181
Taek wrote: post #164

Earlier quoted context omitted.

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.

Why is it a bad stat? Is having to confirm all transactions in all prior blocks not a direct result of a transaction? Why is the cumulative value relevant? I can see how there is a perceived value there but if the transaction didn’t happen it wouldn’t have been needed?

If the block had zero transactions in it, it still would have cost just as much energy to create.

Similarly, if the price of the coin were 1/1000th but the block were full, it would have cost 1/1000th the price to confirm those transactions.

What determines the cost/mining reward of a block is not the transactions in it, but the value of the chain as a whole.

Re: Bitcoin Energy Consumption Index

#193

Post by shrimpx »

rainbowmverse wrote: post #11

Just another thing people went wild for without thinking about externalities. You don't need to be a genius computer scientist to realize a thing that requires a constantly rising amount of processing power just to keep pace will eventually need an unreasonable amount of power.

Humanity needs a constantly rising amount of processing power to keep pace.

Re: Bitcoin Energy Consumption Index

#194

Post by joeyspn »

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

Well, as you may know it's currently being used in some coins like bitshares [0] and it works fine, Ethereum also is migrating to PoS [1]. So the consensus for a lot of people in the ecosystem is that it works.

[0] https://bitshares.org/technology/delegated-proof-of-stake-co...

[1] https://www.coindesk.com/ethereum-casper-proof-stake-rewrite...

Re: Bitcoin Energy Consumption Index

#195

Post by Taek »

jcfrei wrote: post #184
Taek wrote: post #172

Earlier quoted context omitted.

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…

Whether it is more expensive or not is irrelevant. If a majority of the network (either in hashing power or number of tokens) decides to collude and start modifying network states for their own benefit then they will ultimately succeed. You argue that in a PoW system rewriting older blocks is more difficult than in a PoS system but that doesn't matter, because when a majority of the network becomes hostile and starts…

If you are resorting to a hardfork to manage malicious actors, you can always change the proof of work algorithm, which would damage the malicious miners to a tune of billions of dollars in bitcoin.

Rewriting a year of history in a proof of stake system takes a couple days on consumer hardware. Rewriting a year of history in Bitcoin is going to require burning a literal hundred million dollars of electricity, if not an order of magnitude more.

In a proof of stake system, typically less than 30% of participants by coin amount actually do the proof of stake. And that's for systems that don't require you to bond coins for months. Exchanges frequently control that many coins. And if an exchange abuses their power, are you going to burn the coins of every single person using the exchange?

It gets worse than that though. You don't need current coins to attack the system. You only need old keys of coins that you sold. After you sell your coins, why wouldn't you sell your keys to an attacker too? If the attacker is paying for the keys, and you sold the coins anyway, there's nothing to lose for you.

Or an exchange can rotate their coins to new addresses and use the old coins to attack the system.

Re: Bitcoin Energy Consumption Index

#196

Post by shrimpx »

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…

In addition to math and physics, you also trust the durability of infrastructure, the correctness of the software, the moral compass and cohesion of the developers, that there will be no 51%+ mining coalitions, that if there are they'll be benevolent, and probably believe in relative global peace.

You also trust totally mundane things like internet resilience against phishing attacks, web browsers and other basic tools, the https standard, dns and certificate authorities, etc. etc.

Re: Bitcoin Energy Consumption Index

#197

Post by mcv »

hwillis wrote: post #60
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 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…

If a single bitcoin transaction uses enough energy to power 5 households for a day, that certainly makes me not want to do any bitcoin transactions anymore.

I knew it was wasteful, but this article is really putting it into perspective. And because of the proof-of-work system, the wastefulness is intentional; you have to prove you've wasted enough time and energy to be allowed to mine a bitcoin.

Re: Bitcoin Energy Consumption Index

#198

Post by shrimpx »

shrimpx wrote: post #196
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…

In addition to math and physics, you also trust the durability of infrastructure, the correctness of the software, the moral compass and cohesion of the developers, that there will be no 51%+ mining coalitions, that if there are they'll be benevolent, and probably believe in relative global peace. You also trust totally mundane things like internet resilience against phishing attacks, web browsers and other basic too…

And of course you trust your own skills keeping your devices, passwords, keys, totally secured from outside access, and not making the zillion tiny userland mistakes that get your Bitcoin lost or stolen.

Re: Bitcoin Energy Consumption Index

#199

Post by codecamper »

I always thought it was purely ridiculous that bitcoin requires mining which eats energy. So freaking ugly. The genius that created bitcoin could not see that the cheapest form of energy is coal and that his idea will just spew more CO2 into the atmosphere. Or somehow this genius could not see that? OK, yes... Iceland's geothermal energy.

Re: Bitcoin Energy Consumption Index

#200

Post by codecamper »

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…

Yes. And Bitcoin, or another digital currency can do better. And will do better.
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