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Bitcoin as a Battery

nickgrossman.xyz

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Re: Bitcoin as a Battery

#91

Post by gus_massa »

SideburnsOfDoom wrote: post #71
gerbler wrote: post #21

It's more like "embodied energy" than battery

If you have embodied energy in something of no intrinsic value except as proof that you wasted some electricity, what you have is mere entropy. Burned toast.

Sometime, I think that "Proof of Work" is very similar to "Proof of Burn".

Usually in "Proof of Burn" you "burn" some cryptocoin sending it to an invalid address, and the blockchain has a proof that they are unrecoverable. (It was popular before someone notice that with an ICO you can have your cake and eat it too.)

In "Proof of Work" you "burn" a few barrels or petrol to produce electricity and then make some hash with the electricity, so if you find the correct hash it is a probabilistic proof that you burned the petrol. (You can cheat with other source of energy, like solar or wind, but they also have a cost.)

Re: Bitcoin as a Battery

#92

Post by dukeyukey »

nickez wrote: post #31
PeterBarrett wrote: post #17

This seems like a pretty flawed idea and an attempt to justify the incredible amount of electricity required by bitcoin. If bitcoin was changed to require a fraction the amount of electricity all of these ideas would suddenly fall apart. Building renewable energy sources in the middle of nowhere to power a bitcoin farm is just completely nonsensical and does noting to help with the shift to renewables.

If bitcoin would be fully powered by renewables, do you still think its energy consumption would be a problem?

Yes, because those renewables could be powering people's homes and productive equipment, or powering conventional payment systems with plenty capacity left over. It's not necessarily a deal-breaker, but plenty of crypto exists that doesn't need this much power.

Re: Bitcoin as a Battery

#93

Post by danuker »

incrudible wrote: post #79
danuker wrote: post #75

I am a cryptocurrency enthusiast (disclaimer: I even own some). But I find this article fallacious. > if we think of Bitcoin as a battery, what can we do with it? The key properties of Bitcoin’s battery are: 1) always on and permissionless (no need to find customers, just plug and go) I think it is a very wasteful transformation of the power put in. You can get it to be always on and "permissionless" without burning…

The energy usage of a PoW scheme is in direct proportion to its usage (transaction fees), block reward and price of the underlying. As such, I don't see that Bitcoin Cash, Dash or ZCash would be fundamentally more efficient if these factors were to rival Bitcoin, even if parameters such as block size were to change. For the longest time, Ethereum transactions were far cheaper than Bitcoin transactions, but today they…

Transaction fees are not just proportional to usage. They are a price set by demand (usage) and supply (block space).

Currently Bitcoin limiting the block size to 1MB is artificially lowering supply.

Recently, Bitcoin Cash has surpassed Bitcoin in transactions per day: https://bitinfocharts.com/comparison/transactions-btc-bch.ht...

Their blocks are larger, so there is more room for transactions, so miners are not so well rewarded, so they can afford to waste less electricity in total.

Of course, this reduced waste implies reduced security (instead of securing >$700k/h, it's "only" $8.5k/h - https://www.crypto51.app/).

Re: Bitcoin as a Battery

#94

Post by specialist »

danuker wrote: post #75

I am a cryptocurrency enthusiast (disclaimer: I even own some). But I find this article fallacious. > if we think of Bitcoin as a battery, what can we do with it? The key properties of Bitcoin’s battery are: 1) always on and permissionless (no need to find customers, just plug and go) I think it is a very wasteful transformation of the power put in. You can get it to be always on and "permissionless" without burning…

My metaphor:

Just like governments mint currency from bullion, miners mint bitcoin from electricity.

While I think it's weird to consume so much energy to create something so ephemeral, I'm still unclear about the externalities, eg negative ecological impact, driving electricity prices up. Is all this effort worthwhile? Maybe? It feels like a tulip bulb craze, south sea bubble. But I've been so wrong so many times, I question my own certainty.

Re: Bitcoin as a Battery

#95

Post by CryptoPunk »

incrudible wrote: post #79
danuker wrote: post #75

I am a cryptocurrency enthusiast (disclaimer: I even own some). But I find this article fallacious. > if we think of Bitcoin as a battery, what can we do with it? The key properties of Bitcoin’s battery are: 1) always on and permissionless (no need to find customers, just plug and go) I think it is a very wasteful transformation of the power put in. You can get it to be always on and "permissionless" without burning…

The energy usage of a PoW scheme is in direct proportion to its usage (transaction fees), block reward and price of the underlying. As such, I don't see that Bitcoin Cash, Dash or ZCash would be fundamentally more efficient if these factors were to rival Bitcoin, even if parameters such as block size were to change. For the longest time, Ethereum transactions were far cheaper than Bitcoin transactions, but today they…

The energy consumed per transaction to produce the PoW to earn the block subsidy decreases as the number of transactions increases, because the two are independent of each other, with rising transaction volumes not increasing the block subsidy and the associated energy consumed to earn it.

Moreover, the energy consumed per transaction to produce the PoW to earn the transaction fee decreases when the transaction fee decreases.

So for both of these reasons, a cryptocurrency like Bitcoin Cash, that can process thousands of times more transactions than Bitcoin, has the potential to be orders of magnitude more energy efficient.

Re: Bitcoin as a Battery

#96

Post by incrudible »

danuker wrote: post #93
incrudible wrote: post #79

Earlier quoted context omitted.

The energy usage of a PoW scheme is in direct proportion to its usage (transaction fees), block reward and price of the underlying. As such, I don't see that Bitcoin Cash, Dash or ZCash would be fundamentally more efficient if these factors were to rival Bitcoin, even if parameters such as block size were to change. For the longest time, Ethereum transactions were far cheaper than Bitcoin transactions, but today they…

Transaction fees are not just proportional to usage. They are a price set by demand (usage) and supply (block space). Currently Bitcoin limiting the block size to 1MB is artificially lowering supply. Recently, Bitcoin Cash has surpassed Bitcoin in transactions per day: https://bitinfocharts.com/comparison/transactions-btc-bch.ht... Their blocks are larger, so there is more room for transactions, so miners are not so…

What I'm trying to get at is that all of these factors matter, not just one of these factors in isolation. Ethereum also has larger block size over time, and I'm sure it processes far more transactions than Bitcoin.

Suppose that Bitcoin Cash were to increase in price ten-fold, then logically it would make economic sense to burn ten times as much energy to mine it, no matter how many transactions are processed.

Re: Bitcoin as a Battery

#97

Post by dukeyukey »

speedgoose wrote: post #47
scotty79 wrote: post #43

Earlier quoted context omitted.

It can be utilized for heating human occupied spaces. Humans need a lot of heating.

If you are going to use electricity to heat human occupied spaces, you should use a heatpump which has much better efficiency, above 100%.

But if you're using electricity to power CPUs, may as well pump that heat into human-inhabited areas to keep us toasty warm.

Re: Bitcoin as a Battery

#98

Post by ben-schaaf »

osrec wrote: post #36
fsh wrote: post #18

I don't buy the argument in the article. The purpose of a battery is to store energy to be used later and potentially elsewhere. There is no way to regain the energy that was turned into heat while mining bitcoins, so bitcoin is not a battery. The comparison with aluminum production is also quite weak, since aluminum has an intrinsic economic value, whereas cryptocurrencies don't. Most of the arguments given in the a…

How much of the energy used by a processor is dissipated as heat? If it's a significant amount, perhaps it could be recovered in some way?

In a physics sense a processor just turns current into heat, the same way a wire does. It just does so in a way that happens to be useful to us. So in that sense they're resistive heaters, so 100% efficient.

Re: Bitcoin as a Battery

#99

Post by maxerickson »

nickez wrote: post #31
PeterBarrett wrote: post #17

This seems like a pretty flawed idea and an attempt to justify the incredible amount of electricity required by bitcoin. If bitcoin was changed to require a fraction the amount of electricity all of these ideas would suddenly fall apart. Building renewable energy sources in the middle of nowhere to power a bitcoin farm is just completely nonsensical and does noting to help with the shift to renewables.

If bitcoin would be fully powered by renewables, do you still think its energy consumption would be a problem?

Proof of work will always be an expensive way to secure a ledger, with little in the way of real advantages.

"Distributed" sounds nice, but it isn't really that valuable in the end.

Re: Bitcoin as a Battery

#100

Post by danuker »

incrudible wrote: post #96
danuker wrote: post #93

Earlier quoted context omitted.

Transaction fees are not just proportional to usage. They are a price set by demand (usage) and supply (block space). Currently Bitcoin limiting the block size to 1MB is artificially lowering supply. Recently, Bitcoin Cash has surpassed Bitcoin in transactions per day: https://bitinfocharts.com/comparison/transactions-btc-bch.ht... Their blocks are larger, so there is more room for transactions, so miners are not so…

What I'm trying to get at is that all of these factors matter, not just one of these factors in isolation. Ethereum also has larger block size over time, and I'm sure it processes far more transactions than Bitcoin. Suppose that Bitcoin Cash were to increase in price ten-fold, then logically it would make economic sense to burn ten times as much energy to mine it, no matter how many transactions are processed.

You are right. I suppose a fair target to tune would be the cost-of-51%-attack instead of an arbitrary block size or percent fees.
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