Author Topic: Bitcoin/CryptoCurrency energy waste  (Read 699 times)

cmublitz

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Bitcoin/CryptoCurrency energy waste
« on: December 08, 2017, 05:32:58 AM »
This has probably been discussed before but: http://money.cnn.com/2017/12/07/technology/bitcoin-energy-environment/index.html?iid=hp-stack-dom popped up on my news feed and it got me a riled up.

MMM seems fairly dedicated to conserving the planet's resources.  The comparison of energy usage to Visa network's billions of transactions vs Bitcoin's thousands and the relative waste seems criminal in scale.

Do you think this will be a part of the eventual demise of Bitcoin, demise of the Earth, or will Bitcoin adapt the code before something breaks?
« Last Edit: December 08, 2017, 05:53:10 AM by cmublitz »

fattest_foot

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Re: Bitcoin/CryptoCurrency energy waste
« Reply #1 on: December 08, 2017, 08:32:20 AM »
Come on now, the demise of the Earth?


Polish_Hammer

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Re: Bitcoin/CryptoCurrency energy waste
« Reply #2 on: December 08, 2017, 08:44:02 AM »
Sounds like that article was written by banks

surfhb

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Re: Bitcoin/CryptoCurrency energy waste
« Reply #3 on: December 08, 2017, 08:48:02 AM »
In 5 years, no will even know what bitcoin was.     Kinda like Blue Chip Stamps

Syonyk

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Re: Bitcoin/CryptoCurrency energy waste
« Reply #4 on: December 08, 2017, 08:55:20 AM »
I have yet to see an estimation written by anyone who has the slightest clue about current generation mining ASICs, the difficulty curve, or anything else based on actual reality.

New hardware does not appear overnight, but that's ignored by outlets who have decided the point they wish to make and come up with rubbish to support it.

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maizeman

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Re: Bitcoin/CryptoCurrency energy waste
« Reply #5 on: December 08, 2017, 09:08:23 AM »
This article actually reflects a really really common misconception.

Quote
"As bitcoin grows, the math problems computers must solve to make more bitcoin get more and more difficult," which means more processing power is needed, Holthaus wrote.

This part isn't actually correct. The difficulty of the math problems computers need to solve to advance the blockchain change in response to how many and how powerful all the computer trying to advance the blockchain are. It doesn't change in response to either the price of bitcoin, the number of bitcoin users, or the number of bitcoin transactions.

So the statement reverses causes and effect: it's not that as the math problems because harder more processing power is needed, it is that as more processing power is used, the math problems become harder.

If 90% of the CPUs/GPUs/and ASICs currently working on the bitcoin blockchain disappeared tomorrow the exact same number of transactions could be processed as today for 1/10th as much energy, without changing the code or math of bitcoin at all.

Quote
And he made a startling forecast: Without a significant change in how transactions are processed, bitcoin could be consuming enough electricity to power the U.S. by the middle of 2019.

Six months later, that demand could equal the world's power consumption.

I would be happily to take the other side of the bet if this guy would like to wager the entire world's energy supply will be devoted to mining bitcoin in 2020.
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Syonyk

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Re: Bitcoin/CryptoCurrency energy waste
« Reply #6 on: December 08, 2017, 10:27:59 AM »
I would be happily to take the other side of the bet if this guy would like to wager the entire world's energy supply will be devoted to mining bitcoin in 2020.

Yeah... I'd take the other side too.

Sad how little knowledge it takes to get trotted out as an "expert" when you spout nonsense that people want to hear (I assume this is just a wave of sour grapes about the recent bubbly price rise and people who missed out).
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seattlecyclone

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Re: Bitcoin/CryptoCurrency energy waste
« Reply #7 on: December 08, 2017, 11:35:24 AM »
If 90% of the CPUs/GPUs/and ASICs currently working on the bitcoin blockchain disappeared tomorrow the exact same number of transactions could be processed as today for 1/10th as much energy, without changing the code or math of bitcoin at all.

Yes, if 90% of the miners stopped mining the network would continue processing transactions with 10% of the energy usage as before. However this isn't going to happen. The design of the protocol creates incentives for new miners to join the system up until the point where it becomes unprofitable to add another. Unless the bitcoin protocol shifts away from a proof-of-work model, we should always expect the energy used for mining to be well-correlated with the value of bitcoins mined.
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maizeman

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Re: Bitcoin/CryptoCurrency energy waste
« Reply #8 on: December 08, 2017, 12:01:33 PM »
Yup, that's certainly correct. It was sloppy of me to say that the price of bitcoin has no impact on the difficulty of mining, because the price does effect how much computational power is devoted to mining which in turn effects the difficulty. But there are a lot of other implications of an economic model based on the amount of hashing power in the network following the value of the bitcoins mined which aren't apparent in the incorrect "more transactions = more power use" model.

For example, in 2020, the bitcoin reward per block is scheduled to drop by 50%. This will increase the cost of production of each newly mined bitcoin by 50%, so assuming a constant value of the currency, a cost of production model would imply that the total hashing power on the network would also drop by 50%, and each bitcoin transaction would use 1/2 as much electricity as today.*

The other nice thing about the cost of production economic model is that it also lets us estimate what the price of bitcoin would need to be to support a given level of energy consumption. One recent estimate is that in order for the electricity devoted to bitcoin mining to equal total US consumption, the price would need to reach $1M/BTC (and I think that model doesn't incorporate modeling of how the price of electricity would increase with that much new worldwide demand).** Don't get me wrong. Bitcoin uses a frankly insane amount of electricity. But I think it is important for people to understand why that is, and how different people's incentives work, so we don't end up with ridiculous predictions like bitcoin mining using all available electricity worldwide by 2020.

*This hasn't happened in previous halvings of the bitcoin reward primarily because the price of bitcoins has been increasing so rapidly.

**Source: https://arstechnica.com/tech-policy/2017/12/bitcoins-insane-energy-consumption-explained/
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hoping2retire35

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Re: Bitcoin/CryptoCurrency energy waste
« Reply #9 on: December 08, 2017, 12:42:56 PM »
where will the commuting power(servers) come from once the last bitcoin has been mined?

maizeman

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Re: Bitcoin/CryptoCurrency energy waste
« Reply #10 on: December 08, 2017, 12:54:53 PM »
Transaction fees paid to prioritize some bitcoin transactions for faster confirmation than others. (These already exist but currently represent a small percentage of the total reward for mining a bitcoin block.)
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seattlecyclone

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Re: Bitcoin/CryptoCurrency energy waste
« Reply #11 on: December 08, 2017, 12:56:17 PM »
where will the commuting power(servers) come from once the last bitcoin has been mined?

Transaction fees. Miners currently get a fixed number of bitcoins per block, plus any transaction fees for transactions included in that block. In the beginning transaction fees were very minimal, so essentially all of the reward for mining came from the newly generated bitcoins. That balance is slowly shifting.
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