6 ms·

In other words, the Bitcoin network consumes about 5-6 orders of magnitude more electricity than would be required to maintain a similarly-sized ledger using mo

In other words, the Bitcoin network consumes about 5-6 orders of magnitude more electricity than would be required to maintain a similarly-sized ledger using more traditional database techniques. Yes, the feature set is a bit different, but it's difficult to see how Bitcoin can remain competitive in the long run. I guess it can help push down overheads elsewhere in the financial system, so at least that's a good thing. And it's always been a good educational experience.

deleted 10y ago
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mrb 10y ago
"it's difficult to see how Bitcoin can remain competitive" Quite the contrary, the fact Bitcoin has been successful & growing for 8 years in spite of using so much energy is proof it is a non-problem. Energy per tx is rapidly decreasing (http://blog.zorinaq.com/bitcoin-mining-is-not-wasteful/ http://blog.zorinaq.com/bitcoin-mining-is-not-wasteful/) so it will only become more and more competitive from now on.
- rspeer 10y ago
  Let's hope it doesn't! Here's a Fermi problem to show how horrifying the prospect of Bitcoin succeeding is: By this blog post's estimate, Bitcoin currently consumes about 500 MW of power. As others have estimated, Bitcoin processes about 3 transactions per second. The world currently consumes about 2.38 TW of power. If Bitcoin were a commonly-used currency -- if, for example, a billion people in the developed world each made an average of one Bitcoin transaction per day -- then Bitcoin would have to run 4,000 times faster than it currently does, consuming 2 TW of power, which is most of the power in the world.
  - mrb 10y ago
    You are incorrect. Bitcoin does not "have to" consume more energy to process more transactions. Energy and tx rate are uncorrelated. And the energy cost per transaction is falling. Again, see section 5 of http://blog.zorinaq.com/bitcoin-mining-is-not-wasteful/ http://blog.zorinaq.com/bitcoin-mining-is-not-wasteful/
    - rspeer 10y ago
      Section 5 says "thanks to the transaction rate increasing faster than the network's energy consumption". Is the transaction rate increasing? Two years ago people said it was 7 transactions per second. Now it's 3 per second. It may be that people were making unchecked exaggerations two years ago. But this doesn't look like any sort of increase. If the transaction rate is "quadrupling every 2 years"... why didn't it quadruple over 2 years? An article entitled "Bitcoin Mining is Not Wasteful" on a Bitcoin blog kind of tells you what conclusion it's going to come to. For people who aren't personally invested in Bitcoin, of course Bitcoin mining is wasteful. It is literally made of wasted computation. The fact that it benefits an economy of Bitcoin speculators is of no interest.
      - mrb 10y ago
        Yes the tx rate is increasing: https://blockchain.info/charts/n-transactions?daysAverageString=7&timespan=all https://blockchain.info/charts/n-transactions?daysAverageStr... It never was 7 tps. 7 is the theoretical maximum (assumes the tx had only 1 input.) In practice Bitcoin never achieves this because the average tx has multiple inputs. "...tells you what conclusion it's going to come to" You have to examine the presented facts, not the messenger. This blog is mine, and I think I present decent evidence that it's not wasteful. You have to look at the whole picture, ie. the Bitcoin economy lead to $1+ billion invested in 729+ companies, etc... Investing x megawatt in a system that produces investments and jobs is hardly a "waste".
        rspeer 10y ago
        > It never was 7 tps. 7 is the theoretical maximum Wow, you mean Bitcoin fans were prone to exaggeration and unrealistic claims two years ago? I wonder if they still are. Speaking of which, this graph you're showing me definitely has not quadrupled over the last two years. What went wrong? > Investing x megawatt in a system that produces investments and jobs is hardly a "waste". It is if the jobs never produce any actual value. Moving money around is not a good in itself. In fact a lot of Bitcoin companies have moved money in ways that are distinctly bad. Would you be celebrating MtGox as part of the Bitcoin economy if they still existed? Of course whoever is currently holding the money is happy with it. Doesn't mean it's not a waste. People have profited from waste for as long as civilization has existed. (edited out an ad hominem, sorry)
  - ryanjshaw 10y ago
    Two issues. Firstly MW = 10^6 and TW = 10^12 so you're off by 1,000. Secondly, your analysis doesn't factor indirect costs of centralised systems of currency (security features, printing, physical delivery, etc.).
    - rspeer 10y ago
      In the first part of your reply, you indicate that you're bad at orders of magnitude, at least when defending Bitcoin. In the second part of your reply, you do the same thing. Let's be clear. (500 x 10^6) W x 4000 ~= 2 x 10^12 W. I will now factor in your fantasy that everyone stops using centralized currency: (500 x 10^6) W x (4000 - epsilon) ~= 2 x 10^12 W. Fermi problems require being confident in how to multiply large numbers, and disregarding non-multiplicative factors that are much smaller.
runeks 10y ago
The point of Bitcoin is to consume as much electricity, roughly, as a block is worth. Consuming this electricity, and using it to calculate a proof of the consumed electricity, means that the blockchain becomes immutable: no one can change the past, because it would require re-doing the proof-of-work. So, out of this -- seemingly meaningless -- activity of burning off energy, arises the trustless property of the Bitcoin blockchain: with digital currencies that use proof-of-stake, or an SQL backend, every participant could -- theoretically -- have mutually agreed on assigning themselves 100x as many currency units, right before you enter and buy $1000 worth. There's no way to prove that this didn't happen, as it takes little effort to change history. This is unacceptable for a digital currency, hence the need for proof-of-work, and Bitcoin.
- ben_w 10y ago
  On the one hand, if each coin is worth 1/10th its cost, nobody will mint them. On the other hand, if each coin is worth 10x as much as it cost to make, people make their own and the price collapses. That applies equally to gold coins as bitcoins. I suspect bitcoin is, in its current form, incapable of replacing a major currency, because if it become a dominant currency then someone would beg, borrow, and steal just enough bitcoin to buy just enough compute power to get half of the bitcoin computer pool, from there using their new power to double-spend their way to getting even more computer power (while blocking other transactions that might try to out-bid them), and ultimately using that power to rewrite the consensus reality of the blockchain to say they now own as much as they want to say they own. Even if the bitcoin wiki is correct to expect no rational miner will attempt this, there are plenty of irrational actors when enough money is dangled in front of them, even when it is only a mirage (citation: every lottery).
  - mrb 10y ago
    "if each coin is worth 1/10th its cost, nobody will mint them" No. What will happen is as the miners with the highest mining costs drop out of the network, the difficulty target will decrease and decrease... until people stop dropping out of the network. "people make their own and the price collapses" No, again the difficulty target would adjust to regulate the rate of coin rewards. See https://en.bitcoin.it/wiki/Difficulty https://en.bitcoin.it/wiki/Difficulty
ballenf 10y ago
Bitcoin is both the ledger and the printing/minting mechanism and the delivery mechanism (armored cars delivering new bills & coins to banks and picking up and destroying old ones). Factor in those costs and suddenly bitcoin is bargain, energy-wise.
- nhaehnle 10y ago
  An SQL database with a simple front-end could be all of those things you named, and much more cheaply than Bitcoin. The real issues lie elsewhere.

deleted 10y ago

[deleted]

mrb 10y ago

"it's difficult to see how Bitcoin can remain competitive" Quite the contrary, the fact Bitcoin has been successful & growing for 8 years in spite of using so much energy is proof it is a non-problem. Energy per tx is rapidly decreasing (http://blog.zorinaq.com/bitcoin-mining-is-not-wasteful/ http://blog.zorinaq.com/bitcoin-mining-is-not-wasteful/) so it will only become more and more competitive from now on.

rspeer 10y ago
Let's hope it doesn't! Here's a Fermi problem to show how horrifying the prospect of Bitcoin succeeding is: By this blog post's estimate, Bitcoin currently consumes about 500 MW of power. As others have estimated, Bitcoin processes about 3 transactions per second. The world currently consumes about 2.38 TW of power. If Bitcoin were a commonly-used currency -- if, for example, a billion people in the developed world each made an average of one Bitcoin transaction per day -- then Bitcoin would have to run 4,000 times faster than it currently does, consuming 2 TW of power, which is most of the power in the world.
- mrb 10y ago
  You are incorrect. Bitcoin does not "have to" consume more energy to process more transactions. Energy and tx rate are uncorrelated. And the energy cost per transaction is falling. Again, see section 5 of http://blog.zorinaq.com/bitcoin-mining-is-not-wasteful/ http://blog.zorinaq.com/bitcoin-mining-is-not-wasteful/
  - rspeer 10y ago
    Section 5 says "thanks to the transaction rate increasing faster than the network's energy consumption". Is the transaction rate increasing? Two years ago people said it was 7 transactions per second. Now it's 3 per second. It may be that people were making unchecked exaggerations two years ago. But this doesn't look like any sort of increase. If the transaction rate is "quadrupling every 2 years"... why didn't it quadruple over 2 years? An article entitled "Bitcoin Mining is Not Wasteful" on a Bitcoin blog kind of tells you what conclusion it's going to come to. For people who aren't personally invested in Bitcoin, of course Bitcoin mining is wasteful. It is literally made of wasted computation. The fact that it benefits an economy of Bitcoin speculators is of no interest.
    - mrb 10y ago
      Yes the tx rate is increasing: https://blockchain.info/charts/n-transactions?daysAverageString=7&timespan=all https://blockchain.info/charts/n-transactions?daysAverageStr... It never was 7 tps. 7 is the theoretical maximum (assumes the tx had only 1 input.) In practice Bitcoin never achieves this because the average tx has multiple inputs. "...tells you what conclusion it's going to come to" You have to examine the presented facts, not the messenger. This blog is mine, and I think I present decent evidence that it's not wasteful. You have to look at the whole picture, ie. the Bitcoin economy lead to $1+ billion invested in 729+ companies, etc... Investing x megawatt in a system that produces investments and jobs is hardly a "waste".
      - rspeer 10y ago
        > It never was 7 tps. 7 is the theoretical maximum Wow, you mean Bitcoin fans were prone to exaggeration and unrealistic claims two years ago? I wonder if they still are. Speaking of which, this graph you're showing me definitely has not quadrupled over the last two years. What went wrong? > Investing x megawatt in a system that produces investments and jobs is hardly a "waste". It is if the jobs never produce any actual value. Moving money around is not a good in itself. In fact a lot of Bitcoin companies have moved money in ways that are distinctly bad. Would you be celebrating MtGox as part of the Bitcoin economy if they still existed? Of course whoever is currently holding the money is happy with it. Doesn't mean it's not a waste. People have profited from waste for as long as civilization has existed. (edited out an ad hominem, sorry)
- ryanjshaw 10y ago
  Two issues. Firstly MW = 10^6 and TW = 10^12 so you're off by 1,000. Secondly, your analysis doesn't factor indirect costs of centralised systems of currency (security features, printing, physical delivery, etc.).
  - rspeer 10y ago
    In the first part of your reply, you indicate that you're bad at orders of magnitude, at least when defending Bitcoin. In the second part of your reply, you do the same thing. Let's be clear. (500 x 10^6) W x 4000 ~= 2 x 10^12 W. I will now factor in your fantasy that everyone stops using centralized currency: (500 x 10^6) W x (4000 - epsilon) ~= 2 x 10^12 W. Fermi problems require being confident in how to multiply large numbers, and disregarding non-multiplicative factors that are much smaller.

runeks 10y ago

The point of Bitcoin is to consume as much electricity, roughly, as a block is worth. Consuming this electricity, and using it to calculate a proof of the consumed electricity, means that the blockchain becomes immutable: no one can change the past, because it would require re-doing the proof-of-work. So, out of this -- seemingly meaningless -- activity of burning off energy, arises the trustless property of the Bitcoin blockchain: with digital currencies that use proof-of-stake, or an SQL backend, every participant could -- theoretically -- have mutually agreed on assigning themselves 100x as many currency units, right before you enter and buy $1000 worth. There's no way to prove that this didn't happen, as it takes little effort to change history. This is unacceptable for a digital currency, hence the need for proof-of-work, and Bitcoin.

ben_w 10y ago
On the one hand, if each coin is worth 1/10th its cost, nobody will mint them. On the other hand, if each coin is worth 10x as much as it cost to make, people make their own and the price collapses. That applies equally to gold coins as bitcoins. I suspect bitcoin is, in its current form, incapable of replacing a major currency, because if it become a dominant currency then someone would beg, borrow, and steal just enough bitcoin to buy just enough compute power to get half of the bitcoin computer pool, from there using their new power to double-spend their way to getting even more computer power (while blocking other transactions that might try to out-bid them), and ultimately using that power to rewrite the consensus reality of the blockchain to say they now own as much as they want to say they own. Even if the bitcoin wiki is correct to expect no rational miner will attempt this, there are plenty of irrational actors when enough money is dangled in front of them, even when it is only a mirage (citation: every lottery).
- mrb 10y ago
  "if each coin is worth 1/10th its cost, nobody will mint them" No. What will happen is as the miners with the highest mining costs drop out of the network, the difficulty target will decrease and decrease... until people stop dropping out of the network. "people make their own and the price collapses" No, again the difficulty target would adjust to regulate the rate of coin rewards. See https://en.bitcoin.it/wiki/Difficulty https://en.bitcoin.it/wiki/Difficulty

ballenf 10y ago

Bitcoin is both the ledger and the printing/minting mechanism and the delivery mechanism (armored cars delivering new bills & coins to banks and picking up and destroying old ones). Factor in those costs and suddenly bitcoin is bargain, energy-wise.

nhaehnle 10y ago
An SQL database with a simple front-end could be all of those things you named, and much more cheaply than Bitcoin. The real issues lie elsewhere.