One Bitcoin Transaction Now Uses As Much Energy As Your House In a Week

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11-11-2017, 03:26 PM
DamianTV

One Bitcoin Transaction Now Uses As Much Energy As Your House In a Week

https://hardware.slashdot.org/story/...ouse-in-a-week

Quote:

Bitcoin's incredible price run to break over $7,000 this year has sent its overall electricity consumption soaring, as people worldwide bring more energy-hungry computers online to mine the digital currency. An index from cryptocurrency analyst Alex de Vries, aka Digiconomist, estimates that with prices the way they are now, it would be profitable for Bitcoin miners to burn through over 24 terawatt-hours of electricity annually as they compete to solve increasingly difficult cryptographic puzzles to "mine" more Bitcoins. That's about as much as Nigeria, a country of 186 million people, uses in a year.

This averages out to a shocking 215 kilowatt-hours (KWh) of juice used by miners for each Bitcoin transaction (there are currently about 300,000 transactions per day). Since the average American household consumes 901 KWh per month, each Bitcoin transfer represents enough energy to run a comfortable house, and everything in it, for nearly a week.
11-11-2017, 03:48 PM
Danke

Ep. 1032 Bitcoin, Present and Future, with Roger Ver

http://tomwoods.com/ep-1032-bitcoin-...ith-roger-ver/
11-11-2017, 04:41 PM
Schifference

Wouldn't the electrical expense need to be bore by the entities that use bitcoin? If it costs lets say $30 to process one transaction, it would be cost prohibitive to use BTC for small everyday purchases like buying a pack of chewing gum.
11-11-2017, 05:02 PM
dannno

Quote:

Originally Posted by Schifference

Wouldn't the electrical expense need to be bore by the entities that use bitcoin? If it costs lets say $30 to process one transaction, it would be cost prohibitive to use BTC for small everyday purchases like buying a pack of chewing gum.

Correct, the article is bullshit and the OP has bitcoin derangement syndrome..

Bitcoin transaction costs are extremely low, that is why it is such a popular tool for transacting... duh.. like around a penny I think maybe more, but maybe less.. There is also the coins that get created that go to the miners as a fee, but as we know since the inflation rate is very low this is pretty minimal as well.

Pretty sure total bitcoin transaction costs well under 5 cents in electricity, maybe less than a penny.
11-11-2017, 05:09 PM
dannno

Quote:

The claim that Bitcoin was a huge waste of electricity were based on widely quoted statistics from Blockchain.info—now removed from the site but still wildly cited by commentators such as PandoDaily. These figures are simply wrong, and some simple math shows this, if anyone had bothered to check.

http://kernelmag.dailydot.com/issue-...y-bitcoin-use/
11-11-2017, 05:50 PM
timosman

Quote:

Originally Posted by dannno

Correct, the article is bullshit and the OP has bitcoin derangement syndrome..

Bitcoin transaction costs are extremely low, that is why it is such a popular tool for transacting... duh.. like around a penny I think maybe more, but maybe less.. There is also the coins that get created that go to the miners as a fee, but as we know since the inflation rate is very low this is pretty minimal as well.

Pretty sure total bitcoin transaction costs well under 5 cents in electricity, maybe less than a penny.

That is ignoring all the electricity used to mine these bitcoins. If you include those, you will get the number from OP.
11-11-2017, 07:39 PM
dannno

Quote:

Originally Posted by timosman

That is ignoring all the electricity used to mine these bitcoins. If you include those, you will get the number from OP.

The miners get paid in bitcoin, from the transaction costs and that must cover the cost of electricity (plus a little extra for profit)... the transaction cost for bitcoin is extremely low, like around a penny(ish), which covers the electricity that is used to mine the bitcoin.

Read the post I was responding to.. clearly the electricity must get paid for, and clearly it has to come from the bitcoin community. The transaction costs are almost nothing, the inflation rate is almost nothing, and combined they are both almost nothing.. which is about how much electricity it costs for a bitcoin transaction. Almost nothing.

This is bitcoin 101.. like literally the first thing you learn about it when you learn about bitcoin.. if you don't know that, you probably shouldn't be making a lot of commentary on bitcoin.
11-11-2017, 08:37 PM
ClaytonB

Some clarifications:

- Bitcoin miners are paid freshly minted bitcoins (12.5 BTC at this time) with each block they mine, called the coinbase. That's a big chunk of change with Bitcoin soaring in the $6-$7k range right now, about $75k per block. Transaction fees for an entire block, by contrast, are ~$100, order of magnitude. So, miners are competing almost entirely for the coinbase, not the fees.

- The coinbase payout is steadily declining on a fixed schedule. Here's a dashboard with all the info. That 12.5 BTC payout is going to become 6.25 BTC in a couple years. Once the payout reaches zero (in 2140 or so?), miners will be competing solely for transaction fees. At that time, the costs of mining will have to be able to fit entirely inside the transaction fees or some other method of securing the blockchain besides mining will have to be discovered.

- The absolute amount of electricity consumed for mining is a function of the popularity of Bitcoin and the coinbase reward. As the coinbase reward goes down, the electricity consumption will go down proportionately, all else equal. What is actually happening is that miners are driving innovation in mining hardware to get the highest amount of hashes per kilowatt of electricity burnt at the wall-socket.

- Each block in the blockchain currently handles a few thousand transactions. At one block every ten minutes and bazillions of watts of electricity expended, that's a pretty inefficient system. However, the blockchain already has the capacity to implement Lightning Networks and other "2nd-tier" systems that will amplify the number of transactions handled by each block by dozens, hundreds or even thousands of times. In short, the blockchain is best understood as a "high-level, secure serialization mechanism", not as a hand-to-hand transaction ledger. Very few people understand this - it's a subtle point and it took me quite a while before I absorbed it (and I have no excuse, since computer engineering is my field).

- It is not impossible for the blockchain to change to a different form of hashing if the electrical demands become too high. The proof-of-work can be a hybrid of fast-hashing (e.g. SHA-256) with "memory-hard" hashing (e.g. Scrypt). Litecoin already utilizes Scrypt for its mining system and Bitcoin has frequently copied off Litecoin in the past. In short, Bitcoin has an "emergency escape hatch" if things really get that bad.
11-11-2017, 09:40 PM
timosman

Quote:

Originally Posted by ClaytonB

The absolute amount of electricity consumed for mining is a function of the popularity of Bitcoin and the coinbase reward. As the coinbase reward goes down, the electricity consumption will go down proportionately, all else equal. What is actually happening is that miners are driving innovation in mining hardware to get the highest amount of hashes per kilowatt of electricity burnt at the wall-socket.

As long as mining is profitable the electricity usage will be going up to finally get to a point where almost all electricity generated on this planet will be used for mining, unless somebody finds a way to stop this pyramid scheme.:cool:
11-12-2017, 12:22 AM
ClaytonB

Quote:

Originally Posted by timosman

As long as mining is profitable the electricity usage will be going up to finally get to a point where almost all electricity generated on this planet will be used for mining, unless somebody finds a way to stop this pyramid scheme.:cool:

Nonsense. Mining itself is just a serialization mechanism, nothing more. The difficulty can be and is adjusted by the network (once every 2,016 blocks or about every 2 weeks). As new mining power comes online, the difficulty goes up until blocks are generated about once every 10 minutes on average, and vice-versa as mining power goes offline. Miners shut off mining equipment whenever the difficulty goes high enough that running the less efficient mining equipment is not profitable, and vice-versa. So, it's a self-balancing system. Suppose Bitcoin does not lose any users or gain any users for the next few decades. As the coinbase reward decreases, so will the amount of electricity used to mine blocks. What causes the electricity utilization to increase is increased popularity of Bitcoin because this drives up the market cap which, in turn, drives up the real value of the coinbase reward.
11-12-2017, 12:28 AM
timosman

Quote:

Originally Posted by ClaytonB

Nonsense. Mining itself is just a serialization mechanism, nothing more. The difficulty can be and is adjusted by the network (once every 2,016 blocks or about every 2 weeks). As new mining power comes online, the difficulty goes up until blocks are generated about once every 10 minutes on average, and vice-versa as mining power goes offline. Miners shut off mining equipment whenever the difficulty goes high enough that running the less efficient mining equipment is not profitable, and vice-versa. So, it's a self-balancing system. Suppose Bitcoin does not lose any users or gain any users for the next few decades. As the coinbase reward decreases, so will the amount of electricity used to mine blocks. What causes the electricity utilization to increase is increased popularity of Bitcoin because this drives up the market cap which, in turn, drives up the real value of the coinbase reward.

Did you read what you just posted?:cool: