Used GPUs flood the market as Ethereum's price drops below $150 • Hacker News Board

Re: Used GPUs flood the market as Ethereum's price drops below $150

#281

Post by Consultant32452 » Mon, Jul 17, 2017, 1:27 PM UTC

angus-prune wrote: post #219

nodamage wrote: post #146

Earlier quoted context omitted.

A cryptocurrency enthusiast would tell you that the energy consumed is not "wasted" because it is necessary to secure the block chain. Personally I find this argument unconvincing and somewhat tautological. 1) Surely we can come up with a less wasteful solution to this and 2) why should we assume that securing the block chain is a actually good use for the energy spent? Especially if you consider that the process of…

It is worth comparing this against the cost of minting money. A brief search showed that the US mint used 694,462.4 gigajoules in 2011[1] (~0.2Twh). The US is ~25% of world GDP, so lets times this by 4 for a naive cost of minting across the whole world. This gives a cost of ~1Twh annually for minting the entire world's supply of money, with a total Gross world product of ~$80 trillion[2]. Bitcoin is using ~1.3Twh[3]…

US dollars are primarily created by banks using the fractional reserve system. So a better estimate, though harder to find, might be the total energy (including human calories) to create a loan.

Re: Used GPUs flood the market as Ethereum's price drops below $150

#282

Post by jasonlingx » Mon, Jul 17, 2017, 1:31 PM UTC

BoiledCabbage wrote: post #135

DanBlake wrote: post #7

Just took a quick look at this. If you are located in the 'mining valley' of Washington where power is ~2c/kwh you are still getting healthy profits. A computer with 7 GTX 1070 graphics cards should produce ~230 mh/s and draw 1 kw. This would cost approximately $30/month in power factoring in kw demand + cooling. The above setup will currently generate $385/month in ETH. So basically for miners who are in the right s…

Call me naive, but am I the only one who looks at mining as one of the worst inventions for consuming energy possible? Almost all of society functions on energy, some of the largest breakthroughs in society have been on sudden abundance of cheap energy and the machines, vehicles products they can create. Entire economies can be crippled by rising costs in energy (oil shocks of the 70s) and boom by sudden drops in cos…

Energy used = mining reward * (1 - mining profit margin) / unit cost of energy

Where mining reward = (mining block reward + transaction costs + mining premium)

I use "mining premium" to refer to the premium people are willing to pay to mine, i.e. as a hobby, research, or to evade taxes or capital controls. I think when considering efficiency, we can disregard these costs - i.e. energy spent evading taxes is really an inefficiency of taxes, not bitcoin.

The mining block reward will become 0 in the long run.

So really:

Energy used = transaction costs * (1 - mining profit margin) / unit cost of energy

So basically energy usage is being driven by the transaction costs the market is willing to pay, which will adjust accordingly as people are willing to move transactions off-chain.

Looks pretty efficient to me.

Re: Used GPUs flood the market as Ethereum's price drops below $150

#283

Post by Houshalter » Mon, Jul 17, 2017, 1:31 PM UTC

angus-prune wrote: post #219

nodamage wrote: post #146

Earlier quoted context omitted.

A cryptocurrency enthusiast would tell you that the energy consumed is not "wasted" because it is necessary to secure the block chain. Personally I find this argument unconvincing and somewhat tautological. 1) Surely we can come up with a less wasteful solution to this and 2) why should we assume that securing the block chain is a actually good use for the energy spent? Especially if you consider that the process of…

It is worth comparing this against the cost of minting money. A brief search showed that the US mint used 694,462.4 gigajoules in 2011[1] (~0.2Twh). The US is ~25% of world GDP, so lets times this by 4 for a naive cost of minting across the whole world. This gives a cost of ~1Twh annually for minting the entire world's supply of money, with a total Gross world product of ~$80 trillion[2]. Bitcoin is using ~1.3Twh[3]…

Gold might be a better comparison. A ton of energy is spent to extract relatively small amounts of gold.

Re: Used GPUs flood the market as Ethereum's price drops below $150

#284

Post by dalore » Mon, Jul 17, 2017, 1:35 PM UTC

nodamage wrote: post #146

BoiledCabbage wrote: post #135

Earlier quoted context omitted.

Call me naive, but am I the only one who looks at mining as one of the worst inventions for consuming energy possible? Almost all of society functions on energy, some of the largest breakthroughs in society have been on sudden abundance of cheap energy and the machines, vehicles products they can create. Entire economies can be crippled by rising costs in energy (oil shocks of the 70s) and boom by sudden drops in cos…

A cryptocurrency enthusiast would tell you that the energy consumed is not "wasted" because it is necessary to secure the block chain. Personally I find this argument unconvincing and somewhat tautological. 1) Surely we can come up with a less wasteful solution to this and 2) why should we assume that securing the block chain is a actually good use for the energy spent? Especially if you consider that the process of…

You could in theory create a centralised electronic currency with all the hashes computed. But then how would you distribute it? Chicken and the egg. How do you get people to use your currency if you have all of it? Do you just give it out to people? But what system. If you're giving it away it has no value. It cost you nothing to create it. etc.

Mining also solves the distribution and creation of value problem. People won't use your currency unless it has value. To have value it needs to have a market to use it. To have a market you need people using it. Mining creates an incentive to create it since it has some value. And mining means the currency is distributed to people who create value for the system.

Re: Used GPUs flood the market as Ethereum's price drops below $150

#285

Post by ExcilSploft » Mon, Jul 17, 2017, 1:42 PM UTC

CyberDildonics wrote: post #277

TeMPOraL wrote: post #254

Earlier quoted context omitted.

In the words of Scott Alexander: "People are using the contingent stupidity of our current government to replace lots of human interaction with mechanisms that cannot be coordinated even in principle. I totally understand why all these things are good right now when most of what our government does is stupid and unnecessary. But there is going to come a time when – after one too many bioweapon or nanotech or nuclear…

Predicting a future of devestation. You would think we would be past buying into that ruse by now.

Is it that far fetched? Right now most disk encrypting ransomware demands bitcoin for decryption.

Re: Used GPUs flood the market as Ethereum's price drops below $150

#286

Post by dublinben » Mon, Jul 17, 2017, 1:45 PM UTC

Houshalter wrote: post #283

angus-prune wrote: post #219

Earlier quoted context omitted.

It is worth comparing this against the cost of minting money. A brief search showed that the US mint used 694,462.4 gigajoules in 2011[1] (~0.2Twh). The US is ~25% of world GDP, so lets times this by 4 for a naive cost of minting across the whole world. This gives a cost of ~1Twh annually for minting the entire world's supply of money, with a total Gross world product of ~$80 trillion[2]. Bitcoin is using ~1.3Twh[3]…

Gold might be a better comparison. A ton of energy is spent to extract relatively small amounts of gold.

But gold isn't widely used as a currency. Which actually makes it the perfect comparison for cryptocurrencies, I guess.

Re: Used GPUs flood the market as Ethereum's price drops below $150

#287

Post by maxerickson » Mon, Jul 17, 2017, 1:45 PM UTC

angus-prune wrote: post #219

nodamage wrote: post #146

Earlier quoted context omitted.

A cryptocurrency enthusiast would tell you that the energy consumed is not "wasted" because it is necessary to secure the block chain. Personally I find this argument unconvincing and somewhat tautological. 1) Surely we can come up with a less wasteful solution to this and 2) why should we assume that securing the block chain is a actually good use for the energy spent? Especially if you consider that the process of…

It is worth comparing this against the cost of minting money. A brief search showed that the US mint used 694,462.4 gigajoules in 2011[1] (~0.2Twh). The US is ~25% of world GDP, so lets times this by 4 for a naive cost of minting across the whole world. This gives a cost of ~1Twh annually for minting the entire world's supply of money, with a total Gross world product of ~$80 trillion[2]. Bitcoin is using ~1.3Twh[3]…

Doesn't bitcoin compete more with electronic money than it does with cash?

That it is person to person makes it like cash, but moving a dollar with bitcoin isn't quite as convenient as moving a dollar with cash, whereas moving $5000 with bitcoin is vaguely comparable to moving $5000 using a bank transfer (the value has to be present at the bank/in bitcoin, etc).

Re: Used GPUs flood the market as Ethereum's price drops below $150

#288

Post by amalag » Mon, Jul 17, 2017, 1:48 PM UTC

BoiledCabbage wrote: post #135

DanBlake wrote: post #7

Just took a quick look at this. If you are located in the 'mining valley' of Washington where power is ~2c/kwh you are still getting healthy profits. A computer with 7 GTX 1070 graphics cards should produce ~230 mh/s and draw 1 kw. This would cost approximately $30/month in power factoring in kw demand + cooling. The above setup will currently generate $385/month in ETH. So basically for miners who are in the right s…

Call me naive, but am I the only one who looks at mining as one of the worst inventions for consuming energy possible? Almost all of society functions on energy, some of the largest breakthroughs in society have been on sudden abundance of cheap energy and the machines, vehicles products they can create. Entire economies can be crippled by rising costs in energy (oil shocks of the 70s) and boom by sudden drops in cos…

Yeah it is not going anywhere and no large institutions will ever "mine" to protect their money or a blockchain. Currency mining is going to be part of a tech-anarchy-utopia dream.

Consensus ledgers are where real money is going to be transacted on.

Re: Used GPUs flood the market as Ethereum's price drops below $150

#289

Post by rb808 » Mon, Jul 17, 2017, 2:00 PM UTC

horusthecat wrote: post #267

Does anyone know where the money that initially went into the cryptocoins during the run-up this year came from, or where it went?

It works like a Ponzi scheme. The people who are buying now give their money to the people who got in earlier. As long as more and more people buy its great but eventually you run out of buyers - optimistically the price will level off but more realistically it'll crash.

Re: Used GPUs flood the market as Ethereum's price drops below $150

#290

Post by nugget » Mon, Jul 17, 2017, 2:04 PM UTC

ryanSrich wrote: post #41

Maybe this is an incredibly uneducated comment, but won't they have to buy those GPUs back when the price of ETH inevitability goes up again? This is all just FUD from August 1st, ICO instability, and lack of Ethereum use cases. All of these issues have resolutions planned. So one would be stupid to think Ethereum stays at $150 for even a year.

Look at Tezos - they used the success of Bitcoin (and Ethereum) against itself, by the way they funded a totally competing blockchain. You can be bullish on the future of crypto and a bear on BTC and ETH prices, if you envision a future where dozens of tier 1 blockchains compete (and interoperate).