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Bitcoin mining and energy consumption

blog.bitcoin.org.hk

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Re: Bitcoin mining and energy consumption

#61

Post by roywiggins »

gtrubetskoy wrote: post #32

Another aspect that is frequently overlooked is that keeping bitcoin requires no energy at all (literally you can write the key on a piece of paper), and a transfer (not considering the mining aspect) requires very little as well (it can be an SMS message). Contrast that with the all the office buildings (e.g. Manhattan) and computer systems required by banks, ongoing. The banking industry has google-size datacenters…

Without the mining aspect transactions couldn't happen on the blockchain, so it's pretty unrealistic to neglect it.

Re: Bitcoin mining and energy consumption

#62

Post by lagadu »

drinchev wrote: post #13

I don't get why journalists are not writing about the criminal side of Bitcoins. Lots of "users" ( not investors ) interested in Bitcoins are actually .onion sites or other shady / crime organisations. They actually don't care for human life and I doubt they will care for electricity consumption.

For the same reason they don't write about the criminal side of using fiat currency. Lots of users are criminals who sell drugs or rob people and are paid in pesky, untraceable coins and banknotes and do it just to receive those.

Re: Bitcoin mining and energy consumption

#63

Post by tromp »

seanwilson wrote: post #39
Slartie wrote: post #31

Earlier quoted context omitted.

That highly depends on the hashing algorithm used. For Bitcoin this is SHA256, which is very well-suited for ASIC implementation. The algorithm of Ethereum was deliberately designed to be ASIC-resistant, but GPU-friendly, therefore GPUs (which are kind of a commodity) are the hardware of choice for Ethereum mining. Monero takes this one step further by having an algorithm that is ASIC-resistant and that can be mined…

> That highly depends on the hashing algorithm used. For Bitcoin this is SHA256, which is very well-suited for ASIC implementation. The algorithm of Ethereum was deliberately designed to be ASIC-resistant, but GPU-friendly, therefore GPUs (which are kind of a commodity) are the hardware of choice for Ethereum mining. Is it possible to create ASIC resistant algorithms? Litecoin was meant to be resistant by using scryp…

> Is it possible to create ASIC resistant algorithms? Litecoin was meant to be resistant by using scrypt but there's ASICs out for that now I believe.

Making the PoW require tons of memory to solve efficiently seems the best way to attain ASIC resistance. Monero's PoW requires only 8x more than scrypt's 128KB, but Ethereum requires over 1000x more than Monero's 2MB. None of these can be instantly verified though which is a desirable property of PoWs.

Modern asymmetric PoWs like Grin and aeternity's Cuckoo Cycle, and Zcash and Bitcoin Gold's Equihash combine large memory requirements (144MB-2.2GB) with instant verifiability.

Re: Bitcoin mining and energy consumption

#64

Post by nathan_f77 »

seanwilson wrote: post #39
Slartie wrote: post #31

Earlier quoted context omitted.

That highly depends on the hashing algorithm used. For Bitcoin this is SHA256, which is very well-suited for ASIC implementation. The algorithm of Ethereum was deliberately designed to be ASIC-resistant, but GPU-friendly, therefore GPUs (which are kind of a commodity) are the hardware of choice for Ethereum mining. Monero takes this one step further by having an algorithm that is ASIC-resistant and that can be mined…

> That highly depends on the hashing algorithm used. For Bitcoin this is SHA256, which is very well-suited for ASIC implementation. The algorithm of Ethereum was deliberately designed to be ASIC-resistant, but GPU-friendly, therefore GPUs (which are kind of a commodity) are the hardware of choice for Ethereum mining. Is it possible to create ASIC resistant algorithms? Litecoin was meant to be resistant by using scryp…

> Could you not create a protocol that constantly changes its hashing algorithm to combat ASICs?

It might be interesting to combines all of the popular hash functions in a sequence. You could probably mix in some non-cryptographic hash functions in the middle as long as you use secure functions at the beginning and end of the sequence. e.g. SHA256 => MD5 => MurmurHash => BLAKE-256

You could even write an algorithm that uses the previous block hash to determine the next order of the hash function sequence.

Re: Bitcoin mining and energy consumption

#66

Post by vog »

matt4077 wrote: post #35
vog wrote: post #17

Earlier quoted context omitted.

If I remember correctly, mining farms (and data centers in general) are usually colocated to an energy source, i.e. a plant. Some of those plants are not fully stretched, because there's almost no civilization nearby, so delivering to the next city comes with a huge loss in the energy network. So miners can get cheap energy from those plants - energy that would otherwise be unused or lost anyway. Not sure how much th…

That's a very convenient myth. It misses the fact that China didn't build power plants out where it's too far away from civilisation to be useful. Transmission losses are also nowhere near the suggested values. 1.5% per 200 miles is today's standard. Meaning you could cross all of China with a loss of: east-west axis: 2200 miles 0.985^(2200 miles / 200miles) = 0.846 = 15.4% loss (and that's from the farthest desert t…

Thanks for making this clear.

Re: Bitcoin mining and energy consumption

#67

Post by nate_robo »

Slightly off topic but would it be an advantage to use a low energy miner such as a Raspberry Pi as a bitcoin miner, or would that just be a waste of time and yield fractions of a cent / a cent per day? Admittedly little knowledge on bitcoin mining

Re: Bitcoin mining and energy consumption

#68

Post by nathan_f77 »

moneytide1 wrote: post #5

The electricity consumption is a red flag, but perhaps it could be cheaper than the cost to build and maintain Guarda/Loomis trucks that carry physical currency, energy to melt metal to mint coins, and all the costs of building brick&mortar banks (even then, bankers provide auxiliary services like loans and advisement). We are all spending time talking about it as a collective effort to determine whether or not it sh…

> I am wary of the entire thing because we are starting to spend more time talking about money. Or making money on money.

You can also have positive discussions about money, for example: inequality, altruism, basic income.

I've been thinking about a hypothetical "altruistic" cryptocurrency that could have some rules to combat inequality. It might even be possible to provide a basic income to everyone based on a web of trust, although there's probably a million ways to cheat that kind of system.

Here's an interesting simulation that shows what happens when every person gives a dollar to another random person: https://en.yaronshemesh.com/inequality/

So the algorithm wouldn't do that. But it could have some built-in taxation rules for every transaction, and the taxes would be distributed fairly. A portion could also go towards "effective altruism", such as charities listed on givewell.org.

I just realized that taxes are actually a form of forced altruism. The money goes towards good things (schools, hospitals, roads), but you get in trouble if you don't "donate" the appropriate amount.

It's actually very possible that taxes could be enforced with a blockchain contract. It would be nice if all of humanity could somehow agree on all of our necessary shared expenses, and then encode those laws into some software that governs a blockchain. We wouldn't need the IRS anymore, and nobody would need to donate any money. It could just be implemented as a "sales tax" on any transaction. Perhaps the United Nations might be able to manage the distribution, but I actually agree with Donald Trump when he says the UN is plagued with mismanagement and bureaucracy [1]. So I don't know, maybe we need to reinvent politics at the same time. (Although I wouldn't want a democracy where every single person can vote on every issue.)

Imagine if no-one accepted any currency unless it was backed by a global blockchain. Companies could no longer hide money offshore to avoid (or evade) taxes. All of their corporate income taxes would be calculated and paid out automatically by the global network, and no-one would accept their payments if they don't follow all of the rules.

[1] http://www.scmp.com/news/world/united-states-canada/article/...

Re: Bitcoin mining and energy consumption

#69

Post by dyeje »

seanwilson wrote: post #49
jasode wrote: post #43

Earlier quoted context omitted.

>Was this predicted at the inception of Bitcoin? It was not predicted in the original Bitcoin whitepaper. Yes, it discussed the theoretical feasibility of a 50+% attack to double-spend but it didn't explicitly predict a "consolidation" to specialized hardware miners that leaves out the miners at home using regular computers. >It's interesting how economics impacts the security of the protocol like this. Every decentr…

> It was not predicted in the original Bitcoin whitepaper. > Every decentralized protocol suffers from unintended centralization caused by economics. > That's why protocols consolidate towards big players in a power law distribution. Hmm, given the amount of foresight in the original whitepaper I'm surprised the current situation wasn't predicted especially if it's common with other protocols that are intended to be…

It could have been foreseen and omitted. We still don't know who Satoshi is or what their motivations are.

Re: Bitcoin mining and energy consumption

#70

Post by Shoothe »

gtrubetskoy wrote: post #42
ethagknight wrote: post #38

Earlier quoted context omitted.

I remember reading that a key weakness to bitcoin was its susceptibility to fraud if a group of nefarious miners control a significant portion of compute power on chain, because verification is based on consensus. As such, a properly motivated bad actor can produce fraudulent results that can only be disproven by exorbitant compute resources. Obviously this would destroy the value of btc but they only need to keep it…

What we are learning is that there are far easier ways to steal bitcoin than the so-called 51% attack. Miner collusion would be so expensive to pull off and the amount of money you can steal this way is not that great - you still need the elliptic curve signatures to verify, so the only thing you can really do is "double spend" the bitcoin that you need to have in the first place.

51% attack does not allow stealing other's coin but it allows forbidding you from using them (your transactions will not be mined). See [0].

[0]: https://bitcoin.stackexchange.com/questions/658/what-can-an-...

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