5 ms·

> Proof-of-work is simply not sustainable (energy-wise), IMO, for the foundation of a global system. Visa, MasterCard, AmEX, &c along with each individual bank

> Proof-of-work is simply not sustainable (energy-wise), IMO, for the foundation of a global system. Visa, MasterCard, AmEX, &c along with each individual bank, not to mention the intermediaries and gateways all of them use also consume a tremendous amount of power. It's not as if our current system uses a negligible amount of power, not to mention the number of steps and entities a transaction needs in order to be finalized.

root_axis 9y ago
So what? That's a totally meaningless comparison because the ubiquity of cryptocurrencies would not obviate the need for financial services. Besides, market forces incentivize businesses to use as little power as possible because it costs them money, PoW incentivizes miners to use as much power as possible because that is a necessary requirement for increasing hash output.
- jimktrains2 9y ago
  > So what? That's a totally meaningless comparison because the ubiquity of cryptocurrencies would not obviate the need for financial services. The person I replied to compalined about "wasting" power to run the bitcoin network. It's only a valid comparison when compared against current usage, as our current system also "wastes" power to run the current system. > PoW incentivizes miners to use as much power as possible because that is a necessary requirement for increasing hash output. It also incentives them to get the most performance per Watt. I'm just saying it's meaningless to complain that bitcoin uses power, it only matters how it compares to the current system.
  - root_axis 9y ago
    > It's only a valid comparison when compared against current usage, as our current system also "wastes" power to run the current system. No, even if "the current system" was an apt comparison, there is still a fundamental difference between PoW and everything else. The power consumed in the process of facilitating a bank or any type of business is incidental to the useful work being performed. Power is burned so there are lights for people to see, power is burned so computers can perform calculations so that employees can get their jobs done faster, power is burned so that people can go back home after their shift is over; all this is incidental, the power is expended to make the business process more efficient, but the business could still run (though much less efficiently) without spending power on lights, computers and transportation. On the other hand, PoW is literally a waste of work because the nature of the work itself does not matter, the only thing that matters is that the unbounded cost of wasting energy keeps everyone honest. > I'm just saying it's meaningless to complain that bitcoin uses power, it only matters how it compares to the current system. The comparison is meaningless because "the current system" continues to exist regardless of any developments in bitcoin, if anything ubiquitous bitcoin would almost certainly increase the power impact of the finance industry.
foepys 9y ago
You try to equate the current Visa, Mastercard, etc. to the current Bitcoin. This is not possible because Visa alone handles like 100,000 times the volume of Bitcoin. As soon as Bitcoin&Co. become serious currencies, the incentives for manipulation rise. When eventually no new Bitcoins will be generated, all miner incentives come from mining blocks for the transaction fees. How do you want to protect the chain? How much will a single transaction cost to pay for the power to prevent this manipulation by working faster than the "enemy"? If you raise the block size to put more transactions into a single block, you will end up with a normal banking system because nobody can carry the whole blockchain with them to pay and has to trust providers that manage wallets.
pavel_lishin 9y ago
> Visa, MasterCard, AmEX, &c along with each individual bank, not to mention the intermediaries and gateways all of them use also consume a tremendous amount of power. But is it more or less than the equivalent amount of power it would take for Bitcoin (or something like it) to scale to Visa, MC, AMEX, etc. global levels?
- jimktrains2 9y ago
  That's what I don't have good numbers on, I was just pointing out that talking about bitcoins using a lot of energy isn't a good argument unless you're comparing it against the current system, which also uses a substantial amount of power. The big question is what you're asking: How do they compare?
- srdev 9y ago
  I think that depends on how much mining hashing power scales with regard to transaction rate. From a technical point of view, there's no reason that the hash rate has to increase to process more transactions. But from an economic and game theoretical point of view, increasing transaction rate makes the network more valuable, which makes attack rewards more valuable, which necessitates a higher hash rate. I'm not sure anyone has sussed out what the relationship is between transaction rate and minimum necessary hash rate.
- mhluongo 9y ago
  The Bitcoin we have now won't be the same network we have at that scale. L2 and on-chain optimizations will get us some of the way.
random023987 9y ago
> It's not as if our current system uses a negligible amount of power Our current system does in fact use a negligible amount of power. Each $2 latte you put on a credit card uses an amount of electricity so infinitesimal that it can only be measured in the aggregate. The percentage of the power used to generate a single bitcoin block for a single transaction can power an average US household for (approximately) an entire week. To put it in perspective: If the bitcoin network scaled up to the size of the VISA network it would require 100% of all energy used for all purposes planet-wide, from transportation, manufacturing, agriculture, etc. Everything you could possibly want to buy with bitcoin would be unavailable, as 100% of all human activity would go to powering the miners.
- devrandomguy 9y ago
  What if you also include the energy consumed by the employees and facilities of Visa, including their commute-to-work energy? And the energy used to construct their facilities, improve network infrastructure, etc? Now are we getting within an order of magnitude of the energy consumption of an army of ASIC miners, and the people who farm them?
  - srdev 9y ago
    On a per-transaction basis? No. Those costs specifically end up being reified in the fee those processors charge to their customers, so we can determine an upper limit to how much is spent on energy in that way.
    - devrandomguy 9y ago
      The same is true of bitcoin transaction fees, no? Miners set the minimum fee that they will accept, and people tack a fee onto a transaction, large enough that a miner will likely process it.
      - srdev 9y ago
        No, because there is a block reward too that subsidizes the miners, so you have to account for that too. We don't really know the relationship between transaction rate and electrical usage in a mature BTC system, because mining is mainly used to prevent double-spends and the minimum required mining rate to support a given transaction rate is a game-theoretical concern and not a technical one. We can only really observe what has happened so far in the Bitcoin ecosystem.
srdev 9y ago
These companies handle orders of magnitude more traffic than Bitcoin and also provide services beyond just processing transactions. The comparison is not useful.

root_axis 9y ago

So what? That's a totally meaningless comparison because the ubiquity of cryptocurrencies would not obviate the need for financial services. Besides, market forces incentivize businesses to use as little power as possible because it costs them money, PoW incentivizes miners to use as much power as possible because that is a necessary requirement for increasing hash output.

jimktrains2 9y ago
> So what? That's a totally meaningless comparison because the ubiquity of cryptocurrencies would not obviate the need for financial services. The person I replied to compalined about "wasting" power to run the bitcoin network. It's only a valid comparison when compared against current usage, as our current system also "wastes" power to run the current system. > PoW incentivizes miners to use as much power as possible because that is a necessary requirement for increasing hash output. It also incentives them to get the most performance per Watt. I'm just saying it's meaningless to complain that bitcoin uses power, it only matters how it compares to the current system.
- root_axis 9y ago
  > It's only a valid comparison when compared against current usage, as our current system also "wastes" power to run the current system. No, even if "the current system" was an apt comparison, there is still a fundamental difference between PoW and everything else. The power consumed in the process of facilitating a bank or any type of business is incidental to the useful work being performed. Power is burned so there are lights for people to see, power is burned so computers can perform calculations so that employees can get their jobs done faster, power is burned so that people can go back home after their shift is over; all this is incidental, the power is expended to make the business process more efficient, but the business could still run (though much less efficiently) without spending power on lights, computers and transportation. On the other hand, PoW is literally a waste of work because the nature of the work itself does not matter, the only thing that matters is that the unbounded cost of wasting energy keeps everyone honest. > I'm just saying it's meaningless to complain that bitcoin uses power, it only matters how it compares to the current system. The comparison is meaningless because "the current system" continues to exist regardless of any developments in bitcoin, if anything ubiquitous bitcoin would almost certainly increase the power impact of the finance industry.

foepys 9y ago

You try to equate the current Visa, Mastercard, etc. to the current Bitcoin. This is not possible because Visa alone handles like 100,000 times the volume of Bitcoin. As soon as Bitcoin&Co. become serious currencies, the incentives for manipulation rise. When eventually no new Bitcoins will be generated, all miner incentives come from mining blocks for the transaction fees. How do you want to protect the chain? How much will a single transaction cost to pay for the power to prevent this manipulation by working faster than the "enemy"? If you raise the block size to put more transactions into a single block, you will end up with a normal banking system because nobody can carry the whole blockchain with them to pay and has to trust providers that manage wallets.

pavel_lishin 9y ago

> Visa, MasterCard, AmEX, &c along with each individual bank, not to mention the intermediaries and gateways all of them use also consume a tremendous amount of power. But is it more or less than the equivalent amount of power it would take for Bitcoin (or something like it) to scale to Visa, MC, AMEX, etc. global levels?

jimktrains2 9y ago
That's what I don't have good numbers on, I was just pointing out that talking about bitcoins using a lot of energy isn't a good argument unless you're comparing it against the current system, which also uses a substantial amount of power. The big question is what you're asking: How do they compare?
srdev 9y ago
I think that depends on how much mining hashing power scales with regard to transaction rate. From a technical point of view, there's no reason that the hash rate has to increase to process more transactions. But from an economic and game theoretical point of view, increasing transaction rate makes the network more valuable, which makes attack rewards more valuable, which necessitates a higher hash rate. I'm not sure anyone has sussed out what the relationship is between transaction rate and minimum necessary hash rate.
mhluongo 9y ago
The Bitcoin we have now won't be the same network we have at that scale. L2 and on-chain optimizations will get us some of the way.

random023987 9y ago

> It's not as if our current system uses a negligible amount of power Our current system does in fact use a negligible amount of power. Each $2 latte you put on a credit card uses an amount of electricity so infinitesimal that it can only be measured in the aggregate. The percentage of the power used to generate a single bitcoin block for a single transaction can power an average US household for (approximately) an entire week. To put it in perspective: If the bitcoin network scaled up to the size of the VISA network it would require 100% of all energy used for all purposes planet-wide, from transportation, manufacturing, agriculture, etc. Everything you could possibly want to buy with bitcoin would be unavailable, as 100% of all human activity would go to powering the miners.

devrandomguy 9y ago
What if you also include the energy consumed by the employees and facilities of Visa, including their commute-to-work energy? And the energy used to construct their facilities, improve network infrastructure, etc? Now are we getting within an order of magnitude of the energy consumption of an army of ASIC miners, and the people who farm them?
- srdev 9y ago
  On a per-transaction basis? No. Those costs specifically end up being reified in the fee those processors charge to their customers, so we can determine an upper limit to how much is spent on energy in that way.
  - devrandomguy 9y ago
    The same is true of bitcoin transaction fees, no? Miners set the minimum fee that they will accept, and people tack a fee onto a transaction, large enough that a miner will likely process it.
    - srdev 9y ago
      No, because there is a block reward too that subsidizes the miners, so you have to account for that too. We don't really know the relationship between transaction rate and electrical usage in a mature BTC system, because mining is mainly used to prevent double-spends and the minimum required mining rate to support a given transaction rate is a game-theoretical concern and not a technical one. We can only really observe what has happened so far in the Bitcoin ecosystem.

srdev 9y ago

These companies handle orders of magnitude more traffic than Bitcoin and also provide services beyond just processing transactions. The comparison is not useful.