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Bitcoin Energy Consumption Index

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Re: Bitcoin Energy Consumption Index

#71

Post by jcfrei »

jstanley wrote: post #38
politician wrote: post #23

This is one of the reasons I prefer proof-of-stake schemes, despite the complexity, low power consensus is preferable given roughly equivalent tamper resistance. State collusion with mining pools is a credible threat to proof-of-work schemes.

Proof of Stake is just Proof of Work with hidden work. Miners will crank whatever handle they can crank to increase their payout, up to the point where they spend more marginal effort cranking the handle than the corresponding marginal payout is worth. In PoW (in bitcoin) that handle is SHA256. In Proof of Stake, it's more obscure, but they will find it, and they will crank it, and you'll just be back where you start…

This is a misleading argument. Yes, miners will always spend more until marginal revenue == marginal cost. The problem with the proof of work system of bitcoin (and many others) is its inefficiency that only allows for a low transactions throughput. Proof of work has no inherent value for the system, it's simply a way to cap the network throughput to about 1MB per 10 minutes because anything lower than 10 minutes will make the network increasingly vulnerable to adversarial attacks [1]. There's got to be a way to increase network throughput beyond this while maintaining censorship resistance and decentralization.

[1] C. Decker, Information Propagation in the Bitcoin Network: http://www.tik.ee.ethz.ch/file/49318d3f56c1d525aabf7fda78b23...

Re: Bitcoin Energy Consumption Index

#72

Post by GBiT »

inborn wrote: post #59
iaw wrote: post #5

Earlier quoted context omitted.

As the network hash power increases that value will only go up.

did you mean price will go up? either way it doesn't offset that high cost of use, so if humans here still value efficiency they might find it worthwhile to switch tools.

Energy usage rises if Bitcoins value grows. Miners are mining to get profit. If they will use energy and don't get profit, they will stop mining.

Re: Bitcoin Energy Consumption Index

#73

Post by jstanley »

rainbowmverse wrote: post #57
jstanley wrote: post #49

Earlier quoted context omitted.

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.

I don't take it as a given that Bitcoin is a good solution to the problem those people solve with it. The best of the bad solutions is still bad, and Bitcoin isn't looking too good by its power consumption. It's okay to stop, really think about a problem, and find a good solution instead of charging ahead with a bad one oblivious to the brick wall ahead.

What do you think is the best way to store+exchange value across borders in a way that can't be censored or reversed by any third party and doesn't require trusting or asking permission from any third party?

Personally, I think the answer is bitcoin.

Re: Bitcoin Energy Consumption Index

#74

Post by jimrandomh »

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…

> Gold requires hundreds of dollars per ounce and untold energy to extract.

A valid comparison. Gold mining is spending resources to increase the amount of gold in existence, without delivering any other value.

> U.S. dollars require the existence of a powerful economy and trillion dollar military to keep the currency secure and desirable.

Not a valid comparison. Outside of a few relatively inexpensive activities at the US Mint and inside banks, no resources are being spent specifically on increasing the money supply. The value of the dollar is the byproduct of economic activity that exists primarily to achieve other things.

Re: Bitcoin Energy Consumption Index

#75

Post by proofofstake »

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…

> compare the cost of Bitcoin to U.S. dollars or gold

All-in sustaining costs for mining an ounce of gold (worth $1,293.70) is between $1,100 and $1,200.

Re: Bitcoin Energy Consumption Index

#76

Post by etatoby »

homero wrote: post #63
hjnilsson wrote: post #27

Earlier quoted context omitted.

1/1000th of global energy production. Or the output of one nuclear power plant, or the same as all energy lost to friction for every car in the world. That really puts it into perspective.

Much of the mining is done next to hydro plants in China.

Still, there is a fixed amount of hydro power available, short of building new dams. This puts Bitcoin's toll on fossil fuel.

(If Bitcoin didn't exist, the hydro power would still be there and would be used for something else, therefore less fossil fuel would have to be burned in its place.)

Re: Bitcoin Energy Consumption Index

#77

Post by jstanley »

amelius wrote: post #68

> Electricity consumed per transaction: 165 kWh Thats about $20 in the US. If a transaction is that expensive, how can this system even work for transactions with a value of that order? Are large transactions "sponsoring" small transactions? What happens if more people use the system for small transactions? Will BTC become unusable?

Large transactions are not sponsoring small transactions. Transactions are priced by their size in bytes, so the monetary value of the transaction is totally irrelevant to the fee.

People holding bitcoin are essentially sponsoring all transactions, if you want to look at it that way, because miners are making money both from fees and from new bitcoin that is created, which dilutes the value of all existing bitcoin.

Re: Bitcoin Energy Consumption Index

#78

Post by alister »

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 read the article correctly, he's including the cost of mining Bitcoin, not merely energy cost to verify a coin (which is absolutely trivial). Once all Bitcoin is mined (yes, there's a built-in maximum), or it becomes prohibitively expensive to mine, there won't be any mining costs.

You can look at the current Bitcoin energy costs as the startup cost to establish a new gold mine or a new country with its own currency.

Re: Bitcoin Energy Consumption Index

#79

Post by hwillis »

IgorPartola wrote: post #52
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…

Compare it to cash and coins seems the most appropriate. How much energy does harvesting cotton, making into bills, and distributing it all over the place take? Don't forget those fun armoired trucks that have to cart it from place to place. Pennies famously cost more than $0.01 to produce because of the cost of metal. Metal that has to be dug out of the earth, trucked, smelted, trucked, stamped, trucked again.

According to this it costs almost 21 cents to "make" a dollar of bitcoins. According to the mint's 2015 annual report[1] they made 1,114 million dollars in circulating coins at a cost of .51 cents per dollar in coins.

However bills cost 4.9 cents/dollar for $1 bills and half a cent per dollar for $20 bills. So the vast majority of money is much, much cheaper than a bitcoin.

[1]: https://www.usmint.gov/wordpress/wp-content/uploads/2016/06/...

Re: Bitcoin Energy Consumption Index

#80

Post by etatoby »

TekMol wrote: post #39
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…

I'm hoping someone more knowledgeable about bitcoin can comment I did and was quickly voted to the bottom. bitcoin can be competitive with centralized competitors like credit cards In it's current form it can't. It's already running at max capacity. No further increase in transactions per day is possible. If there will be a cryptocurrency that can handle as many transactions as Visa, it will be something else then wh…

Iota?
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