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Bitcoin Energy Consumption Index

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Re: Bitcoin Energy Consumption Index

#211

Post by Taek »

shrimpx wrote: post #207
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…

51% coalitions can also create alternate histories in PoW by agreeing to run a modified version of the client. There is negligible thermodynamic cost to rewriting history when you control a majority of the nodes. Pow is really an incentive system to keep selfish miners flocking to one chain, by making betting on one chain more profitable than betting on lots of chains at the same time. The PoS challenge is to do the…

Running a majority of the nodes does not give you the ability to arbitrarily decide to accept an alternate history. One of the big value adds of bitcoin is that every node can decide on its own, without consulting other nodes, whether a transaction is valid or not.

There is absolutely a thermodynamic cost to reversing a transaction in bitcoin. Having the miners run an alternate client doesn't change that.

Re: Bitcoin Energy Consumption Index

#212

Post by lttlrck »

Taek wrote: post #191
lttlrck wrote: post #181

Earlier quoted context omitted.

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.

Ah got it. Thanks.

Re: Bitcoin Energy Consumption Index

#213

Post by adventured »

Taek wrote: post #210
SamBam wrote: post #206

Earlier quoted context omitted.

It's hardly justifiable to imply that the entire military defense of the United States is simply to protect "$70 billion in assets." If the entire monetary system of the US were replaced by BitCoin, do you think there would be no need for an army? Would the block ledger be "protecting" all the actual physical assets, land, and people? You can argue over whether the US should have a military, or its size, but to imply…

I meant only to imply that the US military alone is about 3.5% of our economy, and that the protection to value ratio there is about 1:30 I did not mean to imply that bitcoin could replace the entire military, only that the ratio of spending vs. assets defended is better.

The protection to value ratio is drastically beyond 1:30. Your value calculation is worthless if it only takes into account annual GDP.

The total value of the United States, all assets, private and public, is closer to $250+ trillion [1]. That's a 1:400+ ratio.

US household assets alone are near $95 - $100 trillion at this point [2]. That's a ~1:160 ratio just for household wealth.

You missed by an extreme amount in your speculation and that's just based on present value. If we were going to be rational about it, we'd want to consider that present military expenditures help to keep safe future value creation (I'll note that I'm not arguing whether those expenditures are $n too high or too low).

[1] https://en.wikipedia.org/wiki/Financial_position_of_the_Unit...

[2] http://www.reuters.com/article/us-usa-fed-households-idUSKBN...

Re: Bitcoin Energy Consumption Index

#214

Post by [deleted] »

quinndupont wrote: post #166
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_…

[deleted]

Re: Bitcoin Energy Consumption Index

#215

Post by rspeer »

Shorel wrote: post #183
rspeer wrote: post #100

Earlier quoted context omitted.

If it's so easy, please describe how.

The how is easy to explain with just the name of an implementation/fork: Bitcoin Cash. The reason it has not happened for original Bitcoin is internal politics. If the number of transactions are limited then they are more profitable.

I do not believe that Bitcoin Cash is 1000x more efficient than Bitcoin. It is an extraordinary claim and requires extraordinary evidence.

Re: Bitcoin Energy Consumption Index

#216

Post by zik »

givinguflac wrote: post #3

That is an absurd amount of energy. This really changes my opinion on this being a feasible currency.

It's only a temporary situation. There's a lot of research going on into replacing "Proof of Work" blockchains with "Proof of Stake" which doesn't require any mining. Ethereum is likely to get Proof of Stake fairly soon. Bitcoin and other cryptocurrencies will likely follow if it works out.

Re: Bitcoin Energy Consumption Index

#217

Post by zik »

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.

It's a temporary situation. Proof of Work which requires mining is likely to be replaced by Proof of Stake and other methods which don't require any mining. Ethereum is planning to try Proof of Stake in the next year or so.

Re: Bitcoin Energy Consumption Index

#218

Post by UncleMeat »

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…

Yes we all understand this. The question is is it worth it? BTC offers some clear benefits over existing money transferring systems, but is also has clear drawbacks. Simply restating some benefits doesn't close the issue.

Re: Bitcoin Energy Consumption Index

#219

Post by kobeya »

SilasX wrote: post #201
Taek wrote: post #146

Earlier quoted context omitted.

No, you are incorrect. The important aspect of proof of work is that it is very expensive to create an alternate history (maybe one where you didn't send $15,000,000 to the exchange, for example). If you are doing useful work, someone can pay for it, and you can use that payment to make an alternate history for free, defeating the security assumption of blockchains. Blockchains only work by probably wasting in order…

But "socially useful" does not imply saleable (to the bane of venture capitalists everywhere). It's possible for something to provide a social benefit but not make sense for anyone to pay for as a for-profit business because others would get the same benefit and free ride off them. (Hence the problem of public goods in economics.) So if the proof of work is only solving some general research problem, then it might no…

There are very few things that are actually useful (socially or otherwise) but don't provide economic incentive. As pointed out by others primecoin isn't really a very good example. A good application to shoot for, if there are any budding cryptographers in the audience, is a ticking timelock encryption. A set of keys known in advance, and each block solves the next key. This would let you encrypt messages into the future, where the cost to decrypt is equal to the cost of minting that many blocks.

I've seen partial schemes for this, but no complete ones that would justify implementation. If a full and workable scheme could be devised, I would bet on it replacing sha256 based proof of work, eventually.

Re: Bitcoin Energy Consumption Index

#220

Post by decentralised »

Why don't we compare Bitcoin's energy footprint with that of all the banks, remittance shops and associated infrastructure instead?

The PoW is quite expensive, but remember that mining is a subsidised activity amounting to billions of dollars worth of rewards for the miners, many of whom make extensive use of hydro-electric and solar power.

There's the question of wether we need all this hashing power to protect the billions of dollars worth of bitcoin market cap. The truth is that ASICs mining was not anticipated and neither was the "arms race" that made mining into a profession. With Proof of Stake consensus algorithms taking front stage in Ethereum, EOS and other blockchain projects, PoW is bound to be abandoned or significantly changed.

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