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Sort of unrelated but, "According to my calculation, a single Bitcoin transaction uses roughly enough electricity to power 1.57 American households for a day."

by xigency 10y ago

Sort of unrelated but, "According to my calculation, a single Bitcoin transaction uses roughly enough electricity to power 1.57 American households for a day." http://motherboard.vice.com/read/bitcoin-is-unsustainable http://motherboard.vice.com/read/bitcoin-is-unsustainable I find this interesting thinking about Bitcoin as a currency. The first cryptographic currency example that I had read, from a cryptography book, didn't involve active power. I'm really surprised that Bitcoin has been able to gain this much popularity with its design. Does this explain how you might be able to lose a household-sized amount of money in a transaction on this network? I don't know, but I think that the blockchain idea might not be the ideal for digital currencies.

shemnon42 10y ago
Those older examples suffered from the "double spend problem" where you could spend the digital currency twice (or more). Kind of like cheque fraud. The Proof of Work part of bitcoin (the part that consumes all that electricity) creates a consensus record so that if double spends are performed, only one of them will stick. Now double spends are a "feature" called "replace by fee." Preventing double spends is worth millions to investors, so that's why it continues.
- xigency 10y ago
  Yes, and maybe that was the main obstacle to implementation. Reading some of the original literature, and glossing over the textbook, it seems like many of the issues involved with double spending and counterfeiters are _eventually_ resolved with someone going to jail, rather than being able to resolve the financial payments in order. A naïve solution - which might save some energy - what about using signed timestamps from an adequate authority? Here is the article from 1991 for those interested in the original idea: http://link.springer.com/chapter/10.1007%2F3-540-46766-1_27 http://link.springer.com/chapter/10.1007%2F3-540-46766-1_27
  - WizzleKake 10y ago
    Part of the point of bitcoin is that it is decentralized.
    - xigency 10y ago
      Yes, but that isn't the entire purpose of digital currency. It is just a part of Bitcoin.
      - Melkman 10y ago
        Almost all currencies are digital today. Bank notes are just a physical transaction mechanism. You could use Bitcoin notes if you want with the private key under a scratch layer. The big difference is exactly that Bitcoin has no central authority. If that doesn't matter to someone he'd be perfectly happy to use state endorsed currencies.
        xigency 10y ago
        Digital cash doesn't have a scratch-off layer. It has information associated with its minting and mechanisms to be used in spending and transactions. > ... perfectly happy to use state endorsed currencies. Unless what you are looking for is a digital currency. Being able to send $5,000 cash in the form of information is a separate issue from who controls the money supply. If someone wants to exchange that amount without having access to a distributed network of computers, is that more centralized? What I'm saying is, I would be happy to use an information based currency, even if it means holding a key with a central authority, if it means being able to make free, anonymous transactions easily with a completely digital, offline currency. That is not what Bitcoin provides. And it isn't possible to e-mail paper bills, either.
      - CydeWeys 10y ago
        I've been using central ledger currency systems (i.e. logging into my bank's website and issuing payments) for longer than Bitcoin has existed. Decentralization is the entire point of Bitcoin. Take that away and you aren't left with anything that wasn't already done long ago. What you're proposing is something that banks have already been doing widely for decades.
  - stale2002 10y ago
    OK, but then you have to have an authority, and that authority would have power over you and the transaction! The whole point of bitcoin is permissionless transactions. It is to make transactions even if the authorities don't want them to happen.
    - xigency 10y ago
      No, I'm saying the authority would provide resources to enable transactions, not an authority that controls transactions, which is actually what the distributed network of miners does in the case of Bitcoin. In this case, the authority would provide stamps for transactions.
      - stale2002 10y ago
        Aaaand what if that authority refuses to provide resources to transactions it doesn't like? That's why bitcoin is decentralized. To prevent something like that.
        xigency 10y ago
        Well, ideally there would be a scheme where the authority facilitating transactions (with timestamps in this case) wouldn't be provided identifying information.
  - Andrew_Quentin 10y ago
    Some are working on a consensus system called proof of stake which does not use energy. It is not clear whether it will be fully secure, etc., but if you read about this stuff decades ago you might want to google and research primarily Bitcoin and Ethereum.
thescriptkiddie 10y ago
Each bitcoin block takes 25 BTC (11000 USD at time of writing) worth of electricity to mine, because that is the maximum that the sum total of miners can afford to spend and still break even. Currently it's only possible to fit somewhere around 2000 transactions in each block, because there is a hard-coded limit on the size of a block (1 MiB). So each transaction costs 11000/2000=5.5 USD, which is indeed the approximate value of 1.57 days worth of average per household energy consumption in the US. This is a big reason why it is important that the 1 MiB limit is lifted soon, the artificial restriction on transaction volume pushes the cost per transaction far too high. As a side note, when the block reward halves to 12.5 BTC in a few months, we will either see the value of bitcoin double or the hashrate (and energy consumption) halve - probably a little of both.
- aianus 10y ago
  > So each transaction costs 11000/2000=5.5 USD No, each transaction costs at most $5.50 USD. You haven't established any lower bound in your calculations. A better approach would be to calculate the average number of hashes required to mine a block and the power efficiency of the latest generation ASIC miners. Also, for what it's worth, $5 is much cheaper than a Western Union or SWIFT wire transfer so even this upper bound doesn't mean Bitcoin is uneconomical compared to modern banking.
  - xigency 10y ago
    Except environmentally, you need to look at the energy footprint of Western Union compared to the network of Bitcoin miners, not the price of electricity or amount of coins awarded.
    - Mtinie 10y ago
      Western Union's energy footprint is no doubt large. Is it larger than the Bitcoin networks? I don't know, but WU has extensive infrastructure in place all over the World, so it's not a simple case of Bitcoin being the only ecologically unsound option of the two.
    - 10y ago
wyager 10y ago
There is no known way to achieve Bitcoin's excellent Byzantine fault tolerance in a truly decentralized P2P manner without proof-of-work. The e-currency example you read probably wasn't decentralized.
aaron695 10y ago
> Sort of unrelated but, Totally unrelated and an old argument talked about in depth. Plus you are conflating the word transaction. It is not how the article used that word. The person tried to spend 5 cents on the transaction. This is not one days worth of electricity.
- xigency 10y ago
  That's true. I really wanted to talk about alternate digital currencies so I started by attacking Bitcoin's big blockchain and huge power burden. I recognize each 'transaction' holds several payments. I find the growing size of the block chain pretty astonishing as well, in an alarming way for users.
CyberDildonics 10y ago
This same article gets brought up continually by people who either want to discourage bitcoin use or just don't understand how it works. Disregarding for a moment that their calculations are ridiculous and that the article is over a year old when there was less volume, bitcoin transactions and the energy used for mining are uncorrelated. The electricity used is the level of security, the number of transactions supported are completely separate and could easily be orders of magnitude larger if the block size gets expanded (which is a whole other issue, but unique to bitcoin at this moment).

by xigency 10y ago

shemnon42 10y ago

Those older examples suffered from the "double spend problem" where you could spend the digital currency twice (or more). Kind of like cheque fraud. The Proof of Work part of bitcoin (the part that consumes all that electricity) creates a consensus record so that if double spends are performed, only one of them will stick. Now double spends are a "feature" called "replace by fee." Preventing double spends is worth millions to investors, so that's why it continues.

xigency 10y ago
Yes, and maybe that was the main obstacle to implementation. Reading some of the original literature, and glossing over the textbook, it seems like many of the issues involved with double spending and counterfeiters are _eventually_ resolved with someone going to jail, rather than being able to resolve the financial payments in order. A naïve solution - which might save some energy - what about using signed timestamps from an adequate authority? Here is the article from 1991 for those interested in the original idea: http://link.springer.com/chapter/10.1007%2F3-540-46766-1_27 http://link.springer.com/chapter/10.1007%2F3-540-46766-1_27
- WizzleKake 10y ago
  Part of the point of bitcoin is that it is decentralized.
  - xigency 10y ago
    Yes, but that isn't the entire purpose of digital currency. It is just a part of Bitcoin.
    - Melkman 10y ago
      Almost all currencies are digital today. Bank notes are just a physical transaction mechanism. You could use Bitcoin notes if you want with the private key under a scratch layer. The big difference is exactly that Bitcoin has no central authority. If that doesn't matter to someone he'd be perfectly happy to use state endorsed currencies.
      - xigency 10y ago
        Digital cash doesn't have a scratch-off layer. It has information associated with its minting and mechanisms to be used in spending and transactions. > ... perfectly happy to use state endorsed currencies. Unless what you are looking for is a digital currency. Being able to send $5,000 cash in the form of information is a separate issue from who controls the money supply. If someone wants to exchange that amount without having access to a distributed network of computers, is that more centralized? What I'm saying is, I would be happy to use an information based currency, even if it means holding a key with a central authority, if it means being able to make free, anonymous transactions easily with a completely digital, offline currency. That is not what Bitcoin provides. And it isn't possible to e-mail paper bills, either.
    - CydeWeys 10y ago
      I've been using central ledger currency systems (i.e. logging into my bank's website and issuing payments) for longer than Bitcoin has existed. Decentralization is the entire point of Bitcoin. Take that away and you aren't left with anything that wasn't already done long ago. What you're proposing is something that banks have already been doing widely for decades.
- stale2002 10y ago
  OK, but then you have to have an authority, and that authority would have power over you and the transaction! The whole point of bitcoin is permissionless transactions. It is to make transactions even if the authorities don't want them to happen.
  - xigency 10y ago
    No, I'm saying the authority would provide resources to enable transactions, not an authority that controls transactions, which is actually what the distributed network of miners does in the case of Bitcoin. In this case, the authority would provide stamps for transactions.
    - stale2002 10y ago
      Aaaand what if that authority refuses to provide resources to transactions it doesn't like? That's why bitcoin is decentralized. To prevent something like that.
      - xigency 10y ago
        Well, ideally there would be a scheme where the authority facilitating transactions (with timestamps in this case) wouldn't be provided identifying information.
- Andrew_Quentin 10y ago
  Some are working on a consensus system called proof of stake which does not use energy. It is not clear whether it will be fully secure, etc., but if you read about this stuff decades ago you might want to google and research primarily Bitcoin and Ethereum.

thescriptkiddie 10y ago

Each bitcoin block takes 25 BTC (11000 USD at time of writing) worth of electricity to mine, because that is the maximum that the sum total of miners can afford to spend and still break even. Currently it's only possible to fit somewhere around 2000 transactions in each block, because there is a hard-coded limit on the size of a block (1 MiB). So each transaction costs 11000/2000=5.5 USD, which is indeed the approximate value of 1.57 days worth of average per household energy consumption in the US. This is a big reason why it is important that the 1 MiB limit is lifted soon, the artificial restriction on transaction volume pushes the cost per transaction far too high. As a side note, when the block reward halves to 12.5 BTC in a few months, we will either see the value of bitcoin double or the hashrate (and energy consumption) halve - probably a little of both.

aianus 10y ago
> So each transaction costs 11000/2000=5.5 USD No, each transaction costs at most $5.50 USD. You haven't established any lower bound in your calculations. A better approach would be to calculate the average number of hashes required to mine a block and the power efficiency of the latest generation ASIC miners. Also, for what it's worth, $5 is much cheaper than a Western Union or SWIFT wire transfer so even this upper bound doesn't mean Bitcoin is uneconomical compared to modern banking.
- xigency 10y ago
  Except environmentally, you need to look at the energy footprint of Western Union compared to the network of Bitcoin miners, not the price of electricity or amount of coins awarded.
  - Mtinie 10y ago
    Western Union's energy footprint is no doubt large. Is it larger than the Bitcoin networks? I don't know, but WU has extensive infrastructure in place all over the World, so it's not a simple case of Bitcoin being the only ecologically unsound option of the two.
  - 10y ago

wyager 10y ago

There is no known way to achieve Bitcoin's excellent Byzantine fault tolerance in a truly decentralized P2P manner without proof-of-work. The e-currency example you read probably wasn't decentralized.

aaron695 10y ago

> Sort of unrelated but, Totally unrelated and an old argument talked about in depth. Plus you are conflating the word transaction. It is not how the article used that word. The person tried to spend 5 cents on the transaction. This is not one days worth of electricity.

xigency 10y ago
That's true. I really wanted to talk about alternate digital currencies so I started by attacking Bitcoin's big blockchain and huge power burden. I recognize each 'transaction' holds several payments. I find the growing size of the block chain pretty astonishing as well, in an alarming way for users.

CyberDildonics 10y ago

This same article gets brought up continually by people who either want to discourage bitcoin use or just don't understand how it works. Disregarding for a moment that their calculations are ridiculous and that the article is over a year old when there was less volume, bitcoin transactions and the energy used for mining are uncorrelated. The electricity used is the level of security, the number of transactions supported are completely separate and could easily be orders of magnitude larger if the block size gets expanded (which is a whole other issue, but unique to bitcoin at this moment).