3 ms·

This is very wrong. It does not work that way at all. Volume or value of transactions has nothing to do with the energy expended. The energy is needed to calc

by spiorf 9y ago

This is very wrong. It does not work that way at all. Volume or value of transactions has nothing to do with the energy expended. The energy is needed to calculate a mathematic proof that makes sure your transaction cannot be reversed or tampered with. This mathematic proof on average is calculated every 10 minutes, with no correlation to the number of transactions. You make a transaction, and if the bitcoin network has expended 1TWh after you sent it, at least 2TWh are needed to reverse that transaction (and/or any other transaction). You can see how over time it becomes impossible, even with unlimited money, to reverse one.

hwillis 9y ago
The hashing is merely a way to choose a random block. It's not a proof and it doesn't do anything fancy. It just picks a random computer to say "this is how the transaction history looks". The energy increases with the volume of transactions because there will be more people calculating hashes. The more people mining, the harder they make the hash calculation so that the target is ten minutes. More transactions = more people mining because there is more demand to verify blocks.
- spiorf 9y ago
  I repeat, you got it very wrong. Transaction number is not correlated with mining energy expenditure. Mining is used to secure the ledger in a way that the same amount of energy is needed to alter it. The block hash begins with a number of zeros. Try for yourself how many tries it takes to find a string that hashes to a hash beginning with 3 zeros. Bitcoin block hashes begin with 13 or 14 zeros IIRC. This means that you need to try trillions of combinations again if you want to alter a block. And then you must keep finding other hashes with enough zeros fast enough to outcompete the whole network. But the cost of hashing is the same, with 1, 10 or 1000 transactions in a block. And the block time is on average fixed at 10 minutes. You don't hash transactions directly, you hash a block header that keeps only the merkle root hash of the transactions. The merkle root is fixed size.
  - Retric 9y ago
    Hash costs are a large fraction of overall costs, but not 100%. Network bandwidth is not free. The more transactions the more beefy the full nodes must be, worse every node pays the full costs or lose out on some transaction fees. But, it gets worse simply maintaining value takes hashing power to avoid a bad actor double spending and destroying faith in the system. Thus, even as a value store you need to pay for large scale hashing.
  - pdpi 9y ago
    > Transaction number is not correlated with mining energy expenditure. You're only kind of right. The mining algorithm cares not one bit about number of transactions, so higher tx volume has no direct effect on the mining energy expenditure. But it does have a second order effect. More transactions usually entails higher fees (as people compete for block space to put their transactions in). More fees means higher mining rewards, means higher incentive to mine, means more mining activity, and, therefore, higher energy expenditure.
    - decentralised 9y ago
      > The mining algorithm cares not one bit about number of transactions Actually it does to some extent because the transaction hashes are used to calculate the block header hash.
      - spiorf 9y ago
        Yes, but the hashing of the merkle tree to obtain the merkle root takes like 10^4 hashes for 10^3 transactions. Compared with 2^80 that is about the number of hash operations needed to find a POW block header, it it trascurable.
        decentralised 9y ago
        I'm not sure about that calculation to be honest. The merkle root is very simple to calculate and verify that's why it's so useful. The POW difficulty is in finding a hash starting with the right number of zeroes and containing the previous block header hash. Did i get this wrong?
- SimonPStevens 9y ago
  You have a very distorted view of how it works. The number of transactions is entirely unrelated to the number of people mining. There could be an increase in transactions while the number of miners falls, or vice a versa. This is why the hash difficulty adjusts, to ensure that the new block rate (and therefore the transaction rate) stays the the same regardless of the number of miners. If the number of miners dropped, energy use would drop, but transaction throughput would remain exactly the same. Also, transaction size (in value) is entirely unrelated to transaction size (in kilobytes) which is what effects the number of transactions that can happen. Most transactions that just transfer some bitcoin from one assess to another are exactly the same number of kilobytes irrespective of how many bitcoin are being transferred.
  - pdpi 9y ago
    > The number of transactions is entirely unrelated to the number of people mining I also commented elsewhere to this effect, but this is not quite true: number of transactions correlates very strongly with higher transaction fees, which further incentivises mining activity. Higher transaction volumes also usually come hand in hand with higher prices, which is another incentive for mining activity. Just because there is no direct effect (which you're absolutely right — the mining algorithm cares not one bit about the transaction volume) doesn't mean there aren't second order effects at play.
    - SimonPStevens 9y ago
      Yeah, I saw that, you are of course right, but like you say that is a 2nd order effect. The post I replied to was claiming that more transactions strictly required more miners to process them, which isn't true. Yes, more transactions might incentiveise more miners, but it doesn't require them. And it's only one part of the complex interplay of incentives that miners face. Say price dropped sharply, that could result in an increase in transactions as speculators scrambled to get their coins to an exchange to sell, while at the same time we might see a drop in miners because with lower bitcoin priced there is less payout for mining. Ultimately the sequence of incentives and disincentives that drive miners is complex. Because of course, although a drop in price might deter some miners, if others believed that the drop was only temporary may continue mining and just hold the bitcoin to sell later when the price recovers. I think it's hard to say anything totally concrete about the expected miner behaviour following any event.

by spiorf 9y ago

hwillis 9y ago

The hashing is merely a way to choose a random block. It's not a proof and it doesn't do anything fancy. It just picks a random computer to say "this is how the transaction history looks". The energy increases with the volume of transactions because there will be more people calculating hashes. The more people mining, the harder they make the hash calculation so that the target is ten minutes. More transactions = more people mining because there is more demand to verify blocks.

spiorf 9y ago
I repeat, you got it very wrong. Transaction number is not correlated with mining energy expenditure. Mining is used to secure the ledger in a way that the same amount of energy is needed to alter it. The block hash begins with a number of zeros. Try for yourself how many tries it takes to find a string that hashes to a hash beginning with 3 zeros. Bitcoin block hashes begin with 13 or 14 zeros IIRC. This means that you need to try trillions of combinations again if you want to alter a block. And then you must keep finding other hashes with enough zeros fast enough to outcompete the whole network. But the cost of hashing is the same, with 1, 10 or 1000 transactions in a block. And the block time is on average fixed at 10 minutes. You don't hash transactions directly, you hash a block header that keeps only the merkle root hash of the transactions. The merkle root is fixed size.
- Retric 9y ago
  Hash costs are a large fraction of overall costs, but not 100%. Network bandwidth is not free. The more transactions the more beefy the full nodes must be, worse every node pays the full costs or lose out on some transaction fees. But, it gets worse simply maintaining value takes hashing power to avoid a bad actor double spending and destroying faith in the system. Thus, even as a value store you need to pay for large scale hashing.
- pdpi 9y ago
  > Transaction number is not correlated with mining energy expenditure. You're only kind of right. The mining algorithm cares not one bit about number of transactions, so higher tx volume has no direct effect on the mining energy expenditure. But it does have a second order effect. More transactions usually entails higher fees (as people compete for block space to put their transactions in). More fees means higher mining rewards, means higher incentive to mine, means more mining activity, and, therefore, higher energy expenditure.
  - decentralised 9y ago
    > The mining algorithm cares not one bit about number of transactions Actually it does to some extent because the transaction hashes are used to calculate the block header hash.
    - spiorf 9y ago
      Yes, but the hashing of the merkle tree to obtain the merkle root takes like 10^4 hashes for 10^3 transactions. Compared with 2^80 that is about the number of hash operations needed to find a POW block header, it it trascurable.
      - decentralised 9y ago
        I'm not sure about that calculation to be honest. The merkle root is very simple to calculate and verify that's why it's so useful. The POW difficulty is in finding a hash starting with the right number of zeroes and containing the previous block header hash. Did i get this wrong?
SimonPStevens 9y ago
You have a very distorted view of how it works. The number of transactions is entirely unrelated to the number of people mining. There could be an increase in transactions while the number of miners falls, or vice a versa. This is why the hash difficulty adjusts, to ensure that the new block rate (and therefore the transaction rate) stays the the same regardless of the number of miners. If the number of miners dropped, energy use would drop, but transaction throughput would remain exactly the same. Also, transaction size (in value) is entirely unrelated to transaction size (in kilobytes) which is what effects the number of transactions that can happen. Most transactions that just transfer some bitcoin from one assess to another are exactly the same number of kilobytes irrespective of how many bitcoin are being transferred.
- pdpi 9y ago
  > The number of transactions is entirely unrelated to the number of people mining I also commented elsewhere to this effect, but this is not quite true: number of transactions correlates very strongly with higher transaction fees, which further incentivises mining activity. Higher transaction volumes also usually come hand in hand with higher prices, which is another incentive for mining activity. Just because there is no direct effect (which you're absolutely right — the mining algorithm cares not one bit about the transaction volume) doesn't mean there aren't second order effects at play.
  - SimonPStevens 9y ago
    Yeah, I saw that, you are of course right, but like you say that is a 2nd order effect. The post I replied to was claiming that more transactions strictly required more miners to process them, which isn't true. Yes, more transactions might incentiveise more miners, but it doesn't require them. And it's only one part of the complex interplay of incentives that miners face. Say price dropped sharply, that could result in an increase in transactions as speculators scrambled to get their coins to an exchange to sell, while at the same time we might see a drop in miners because with lower bitcoin priced there is less payout for mining. Ultimately the sequence of incentives and disincentives that drive miners is complex. Because of course, although a drop in price might deter some miners, if others believed that the drop was only temporary may continue mining and just hold the bitcoin to sell later when the price recovers. I think it's hard to say anything totally concrete about the expected miner behaviour following any event.