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Bitcoin Energy Consumption Index

digiconomist.net

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Re: Bitcoin Energy Consumption Index

#41

Post by csomar »

schwabacher wrote: post #18

The statistic that stands out to me from this article is that 1 bitcoin transaction uses enough energy to power 5.58 us households for a day. I'm hoping someone more knowledgeable about bitcoin can comment - is it likely that this will continue as the mining reward decreases? How expensive will transactions be after that happens? And if smaller rewards reduce total mining and power consumption, how vulnerable does th…

Well, transaction costs are already super high. I made a transaction yesterday for $5 and it was single input/output. But it was urgent, so I paid generously.

As the network grows, the demand for transaction grows too. The fees will not increase because the reward decreases. Simply miners will stop mining as it is no longer profitable. But this will happen in 2090-2140. So it is very far.

I think in the future, lightning networks and centralized wallets will be the way to go. The blockchain will be used by only a few big guys and transaction costs will be over $100/tx.

Re: Bitcoin Energy Consumption Index

#42

Post by jstanley »

politician wrote: post #37
GBiT wrote: post #25

Earlier quoted context omitted.

Energy is whats backing Bitcoins value. You need a lot of energy to create this valuable document - block

That's a good point -- in earlier times slaves worked the mines to extract gold from raw earth. Gold was a good store of value because of its scarcity. Likewise, Bitcoin mines the electrical grid.

Are you arguing that using the electricity you paid for is immoral, or are you arguing that using slaves is not immoral as long as you use them for something good?

I don't see how your analogy applies.

Re: Bitcoin Energy Consumption Index

#44

Post by alister »

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 and trillion dollar military to keep the currency secure and desirable.

Re: Bitcoin Energy Consumption Index

#45

Post by Digiconomist »

schwabacher wrote: post #18

The statistic that stands out to me from this article is that 1 bitcoin transaction uses enough energy to power 5.58 us households for a day. I'm hoping someone more knowledgeable about bitcoin can comment - is it likely that this will continue as the mining reward decreases? How expensive will transactions be after that happens? And if smaller rewards reduce total mining and power consumption, how vulnerable does th…

So, the block reward is indeed increasing, but two other things are increasing very fast. First is the price per Bitcoin, and second is the number of fees per block. Just the day before yesterday miners received 1800 coins from mining and an additional 500 from fees. That's already over 20% of the total daily reward. This two things are more than compensating the loss of block rewards (in BTC terms). Things aren't expected to improve based on this.

It's kind of insane if you compare to other payment services (if that's how you use BTC). Not only do you pay $5-$10 per transactions, but that transaction also consumes 20,000-30,000 times more energy.

Re: Bitcoin Energy Consumption Index

#46

Post by rainbowmverse »

jstanley wrote: post #29
iaw wrote: post #14

Earlier quoted context omitted.

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

It's not "wasted". The miners wouldn't spend the energy if they weren't getting a good return on their investment. Just because you don't like bitcoin doesn't make it a "waste" of energy, any more than mining gold is a "waste" of energy if you don't like gold.

You're thinking of waste too narrowly. That power wasn't available for other things, so more had to be produced to cover Bitcoin and the other things, which meant more of all the negatives that come with energy production. Does Bitcoin provide something valuable enough to human civilization to account for that? Could that value have come from a more efficient source?

Failing to account for externalities is how we get rapid ecosystem destruction (before even bringing in climate change). Those Bitcoins aren't innocent little bits on drives. They have a cost to the planet they're produced on and the life that inhabits it.

Re: Bitcoin Energy Consumption Index

#47

Post by Digiconomist »

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 comparison to VISA is a common one. Whether it makes sense to use BTC in a certain way ultimately depends on the user and how they're using it. But honestly, as a medium of exchange Bitcoin simply doesn't make sense in most cases.

Re: Bitcoin Energy Consumption Index

#48

Post by kobeya »

1001101 wrote: post #43
givinguflac wrote: post #3

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

I agree. I've been racking my brain on ways to connect proof of work to something useful (like folding proteins, general purpose distributed computing, etc.)

Do that and it would no longer be useful as proof of work. Proof of work-i-was-going-to-do-anyway is not useful for securing the ledger.

Re: Bitcoin Energy Consumption Index

#49

Post by jstanley »

rainbowmverse wrote: post #46
jstanley wrote: post #29

Earlier quoted context omitted.

It's not "wasted". The miners wouldn't spend the energy if they weren't getting a good return on their investment. Just because you don't like bitcoin doesn't make it a "waste" of energy, any more than mining gold is a "waste" of energy if you don't like gold.

You're thinking of waste too narrowly. That power wasn't available for other things, so more had to be produced to cover Bitcoin and the other things, which meant more of all the negatives that come with energy production. Does Bitcoin provide something valuable enough to human civilization to account for that? Could that value have come from a more efficient source? Failing to account for externalities is how we get…

If you think you can replace bitcoin with something more efficient, please do so. The millions of people who use bitcoin every day would gladly switch to a cheaper version if it was truly just as good.

Re: Bitcoin Energy Consumption Index

#50

Post by iaw »

TekMol wrote: post #21
iaw wrote: post #14

Earlier quoted context omitted.

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

Obviously it generates enough value for some people that they are willing to pay for it. Watching television probably uses up even more energy. And I would argue it has a negative impact on life quality. But who am I to decide what people should value?

Watching television does not use up more energy than mining bitcoin, that's the point of the linked article.
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