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Bitcoin's Enormous Energy Costs May Prove to Be Its Biggest Risk

72 points by pdog 9y ago

Retric 9y ago
This seems like a easy way to explain a Bitcoin ban, should any country wish to do so.
daggerhashimoto 9y ago
So, this is the next attack vector? Bitcoin is not green? The energy put into Proof-of-work is what makes the system immutable. People who complain about bitcoin's energy use, don't seem to grasp what makes the bitcoin Blockchain immutable. In order to change the Database, you have to go back and do the "work" which becomes practically impossible after approx. 10 blocks. You take that away and you'll make the system Tamper evident, and not Tamper Proof as it is right now. It's the only secure data base ever invented, and thats because of the energy used to secure it. I don't see these people complaining how much energy Las Vegas wastes. Or Hollywood. What about professional sports? How much energy does going to war cost? All of these are less important than the only sovereign moneys system in the history of man-kind. So, please, stop complaining about the energy use, i left my violin at home.
- jvanderbot 9y ago
  Once you tie the benefits of bitcoin to something as tangible as the "benefits" of a weekend in Vegas, people will back off the application as the problem. If grid energy is renewable, bitcoin is not a problem, and actually helps push increasing energy infrastructure. In the ideal world...
- rothbardrand 9y ago
  This is the attack vector that works on people who will never read Atlas Shrugged because they read a hit piece in Salon about Ayn Rand. This will keep them out of bitcoin, which I find kinda hilarious.
kown223 9y ago
demand and offer, I wander why the elitist hacker rank "liberal" people don't get it, the difficulty is so high because there is a lot of hash power, the network would be fine with much less, I think around 15% of the current one. On the logic of banning stuff for power saving, we should ban video games and movies.
- jvanderbot 9y ago
  Of course the network could operate with less competition. But it is designed to incentivize participation. The temptation to dominate the network / hash power inevitably produces high energy usage. Again, by design. I'm not sure that's a liberal standpoint, and admitting the reality of some people associating bitcoin mining with "wasteful" energy usage is not a flaw in logic.
- rothbardrand 9y ago
  Most of the people on this site are hard left, and not very much into hacking... there are junior developers and wannabe CEOs with MBAs here. You're not going to find cypherpunks on hacker news, generally. So, anything that fits the hard left agenda is promoted, without regard to its scientific or technical accuracy, even when it's against the startup ethos that created silicon valley in the first place.
  - jacquesm 9y ago
    Please stop your continuous stream of personal attacks and your rants against the 'left', which besides lowering the general level of discourse is factually incorrect in many ways.
  - orwin 9y ago
    You could use less spite and disdain for your comment i think. You probably already know that convincing yourself that your outgroup is dumb and unqualified is a tribal ego-boosting technique, but a reminder never hurt.
  - ben_w 9y ago
    My girlfriend self-describes as a revolutionary Marxist. Trust me when I say I have yet to see a single genuinely “hard left” comment on Hacker News.
PKop 9y ago
"So, this is the next attack vector? Bitcoin is not green? The energy put into Proof-of-work is what makes the system immutable. People who complain about bitcoin's energy use, don't seem to grasp what makes the bitcoin Blockchain immutable. In order to change the Database, you have to go back > and do the "work" which becomes practically impossible after approx. 10 blocks. You take that away and you'll make the system Tamper evident, and not Tamper Proof as it is right now. It's the only secure data base ever invented, and thats because of the energy used to secure it. I don't see these people complaining how much energy Las Vegas wastes. Or Hollywood. What about professional sports? How much energy does going to war cost? All of these are less important than the only sovereign moneys system in the history of man-kind. So, please, stop complaining about the energy use, i left my violin at home." - daggerhashimoto In addition, if Bitcoin disrupts the banking industry and a portion of wall street, we'd have to subtract their energy consumption. It's just logically lazy to not consider if the benefits outweigh the costs, and sound immutable finite hard money out of reach of central authorities brings with it enormous benefits.
- deleted 9y ago
  [deleted]
- w-ll 9y ago
  Exactly. Energy for gold mines, armourded trucks, petrol moving it all around the world, printing synthetics and chemicals, 24/7 always on ATMS all over the world. Bitcoin mining allows me to send money to my family halfway across the world, nearly instantly, without a bank.
- ihuman 9y ago
  Why did you quote a comment made 10 minutes before yours? https://news.ycombinator.com/item?id=15665273 https://news.ycombinator.com/item?id=15665273
  - PKop 9y ago
    Because it was dead when I got here, which I disagreed with but couldn't change.
- 9y ago
Asdfbla 9y ago
People are always quick to point out that this is just what it takes to build a trustless and decentralized currency, which is probably correct, but it's not clear whether such an extreme level of trustlessness is even necessary (if you are not a crypto-libertarian on principle). The benchmark for Bitcoin are normal financial transactions as they exist today (and work quite well, most of the time). So the question really is: Are you ready to have humanity spend the additional energy consumption of a country (or many countries if Bitcoin were to scale up) to run a system that offers only very limited throughput (relative to established systems) and hasn't even proven yet that it's even a viable alternative to fiat money from an economic perspective? Not to mention the scaling issues that come with such broadcast protocol. I don't really see the widespread use, at least as envisioned by Bitcoin proponents. If it's just the decentralized aspect and transparency that you want, you can relax your trust assumptions and implement something like a distributed ledger with known identities which doesn't need proof-of-work to prevent sybil attacks (identities which of course would have to be certified in some way, unfortunate). Oh well, it's still a very cool technology, but I hope for the planet's sake that cryptocurrencies stay in their niche of anonymous transactions for those who actually need it.
- jvanderbot 9y ago
  Agree. Bitcoin is a fun experiment / proof of concept. I'd add that I hope we will eventually tackle the energy problem, hopefully without throwing away the good parts of decentralization / distributed ledgers. It might be optimistic, but I think many early technological revolutions bring learning costs and risk environmental damage.
- nategri 9y ago
  It's all fun and games until Shor's algorithm, anyway. If Bitcoin is broken-in-the-long-term in one way why not admit it's broken in another, and iterate to a better solution.
  - andrewchambers 9y ago
    Bitcoin can change it's own code whenever it wants, its not a static thing, it can become a better solution.
jvanderbot 9y ago
Well, let's clean up the energy grid and stop blaming consumers?
- ben_w 9y ago
  At the current estimated energy consumption, if everyone on Earth performed an average of one transaction per month then Bitcoin would use more electricity than is being generated.
  - deadmetheny 9y ago
    This is good for Bitcoin.
    - ben_w 9y ago
      Howso?
  - 6nf 9y ago
    That's not how Bitcoin works. The amount of energy used to secure the blockchain is not proportional to the number of transactions.
    - ben_w 9y ago
      It doesn’t matter that it’s not supposed to be proportional, it’s a simple scaling up from current energy usage and current transaction frequency to the world population. All that tells us is that bitcoin as it currently exists, and as part of the way it interacts with the real world has a flaw — it doesn’t tell us if that flaw is an oversight in the design or if it’s a gold-rush and/or a price bubble because humans are being irrational.
kasperni 9y ago
By reading through the comments. I don't think people realise how much energy it actually uses. One bitcoin transaction already now uses as much energy as your house in 1 week. https://motherboard.vice.com/en_us/article/ywbbpm/bitcoin-mining-electricity-consumption-ethereum-energy-climate-change https://motherboard.vice.com/en_us/article/ywbbpm/bitcoin-mi... I'm sorry but I just fail to see how this can work going forward.
- VMG 9y ago
  Why measure it in energy/transaction? The energy is not used for transactions, but for securing the ledger. With second-layer scaling solutions you will have no limit of transactions per block.
  - cryptodogemoon 9y ago
    Why bother with a second layer when new blockchain designs improve upon the designs of Bitcoin? The ledger is "secured" by about 6 mining pools which might even be controlled by the same people. Second layer goes completely against Satoshi's primary design in the first sentence of the white paper - which is removing the need for third parties. The lightening network design is a siphoning power grab by Blockstream. After all, if you look at Bitcoin from a technical perspective the services Bitcoin offers are available in Litecoin, Monoero, etc.
    - AgentME 9y ago
      Payment channels and LN don't introduce trusted 3rd parties or counterparty risk. Payment channels weren't discussed in the whitepaper, but Satoshi discussed and attempted some payment channel designs[1]. He left before coming up with a secure payment channel design. Recent improvements to Bitcoin, including the transaction malleability fix included in the recent segwit upgrade a few months ago, finally make secure payment channels feasible. [1] https://en.bitcoin.it/wiki/Payment_channels#Nakamoto_high-frequency_transactions https://en.bitcoin.it/wiki/Payment_channels#Nakamoto_high-fr...
    - EthanHeilman 9y ago
endlessjoys 9y ago
Proof-of-Work is supposed to cost energy and there is no other way, see: http://nakamotoinstitute.org/mempool/proof-that-proof-of-work-is-the-only-solution-to-the-byzantine-generals-problem/ http://nakamotoinstitute.org/mempool/proof-that-proof-of-wor...
- contravariant 9y ago
  I'm hesitant to call that a proof, there are various points in the proof that might not be false, but are certainly non-obvious. Firstly, it seems to be enough for any alternative consensus to be impossible to maintain, rather than impossible to produce. Secondly, to make it practically (economically) impossible to maintain an alternative consensus should requires Proof-Of-Resources, not Proof-Of-Work. Thirdly, there's no reason to assume those resources can't be stakes in the consensus itself. Finally, if the only way to maintain consensus is by building massive expensive specialised buildings, then congratulations you've just rediscovered a bank.
wickedlogic 9y ago
These pieces are starting to get pretty funny. `If it keeps growing, it'll be so expensive, it can't possibly work.` Also assumes bitcoin as we know it today is fully immutable, but that isn't the case, and neither is energy production, or technology used to run the whole thing. But you know what gets tricky, rewriting history in bitcoin's blockchain. `You'd almost have to spin up an alternate time line, and those alternate time lines are expensive, and use a lot of energy, it cant possibly work.` The value in the future of bitcoin may be that it has a long and very public chain... and that alone is probably enough to hold reasonable utility in the future. Just like silver/gold and other scares things provided utility for quite a while. Only now of course, if it gets too expensive, another slightly different public fork will persist (or several of them).
- UncleMeat 9y ago
  Isn't the immutability of BTC one of the major things that proponents point to? Wasn't this why there was such pushback against increasing block sizes by just 2x? Why should we assume that a community that is so based in political rather than technical ideals will just come up with some unnamed technical solution in the future to improve efficiency?
VMG 9y ago
How much energy and toxic waste is generated by gold mining?
adyavanapalli 9y ago
Just so this isn't forgotten, I think we have to ask _in reference to what exactly?_ Paper money and its supporting electronic banking systems cost energy and money too e.g. delivering cash to banks and other institutions, building and powering banks and ATMs, software costs in building and maintaining electronic payment systems, etc. I think it would be instructive to see how the costs compare.
asabjorn 9y ago
The problem isn't the energy cost, but the fact that the energy cost is going towards work that has no utilitarian purpose. Ethereum shows a potential way to fix that, and bitcoin can adopt a similar approach once the core problems of the approach are solved.
wyldfire 9y ago
Another perspective (from 2015): "Nothing is Cheaper than Proof of Work" [1] [1] http://www.truthcoin.info/blog/pow-cheapest/ http://www.truthcoin.info/blog/pow-cheapest/
jacobr 9y ago
What is the most energy efficient way to get rid of Bitcoins? Does it matter if I sell them all at once or if I spread it out over more transactions?
- deleted 9y ago
  [deleted]
LyndsySimon 9y ago
This doesn't even make sense. If it isn't profitable to mine, then people won't mine. Difficulty will fall, which will mean that fewer cycles (and thus, less energy) is needed to find the next block. The author literally took the "total cost of all energy in the network" and divided it by "total number of transactions". That's not how it works. There is effectively zero incremental cost in terms of energy usage for a transaction.
- nosuchthing 9y ago
  The point is to measure the system's efficiency and energy usage. Bitcoin's Proof of Work algorithm using SHA-256 and power hungry ASICs with a bottle neck on 4-7 transactions per second (average, as latency is in 10 minute intervals) or even in the case of the controversial Bitcoin-Cash with 56 transactions per second; what Bitcoin as a service does with the type of infrastructure required for the software to run can be analyzed and defined in terms of cost of operations versus alternative services which offer similar or identical functionality.
quantdev 9y ago
"Even as bitcoin flirts with $8,000, the price required for mining to be marginally profitable stands at a jaw-dropping $300,000 to $1.5 million by 2022 based on current growth trends and electricity use, according to Christopher Chapman, an analyst at Citigroup Inc. At that pace, the implied consumption would match that for the whole of Japan over the long haul." This Citi analyst either doesn't understand Bitcoin or doesn't understand economics: because the protocol has difficulty adjustment and because marginal revenue will always approximate marginal cost, the cost to mine 1 BTC will always approximate its value. Therefore, projecting the cost of mining is equivalent to predicting the price of Bitcoin. If the cost to mine 1 BTC was $1MM USD (and so $1MM/BTC), that would imply the network value of the Bitcoin ecosystem would be well over the USD M1 supply (tens of trillions, in fact). Bitcoin would have effectively replaced fiat in that world and perhaps all the cost it eliminated would be worth the mining. In any event, from what he said, I doubt this (equity) analyst understands that he can't project $1MM BTC mining cost without at least $1MM per BTC price.
- Retric 9y ago
  This assumes rational actors and a unified market. If bitcoin mining let's people get around currency controls the prices my end up significantly different.
  - colechristensen 9y ago
    So organized crime in the 21st century is algorithms replacing mobsters.
    - cwkoss 9y ago
      Seems unlikely, but that would be incredibly beneficial to society.
      - __jal 9y ago
        Really? Mobsters make mistakes, sleep, and theoretically could have pity.
platinum1 9y ago
Bram Cohen just announced Chia to address this, using storage and time as the proof-of-work. https://techcrunch.com/2017/11/08/chia-network-cryptocurrency/ https://techcrunch.com/2017/11/08/chia-network-cryptocurrenc... previous conversation here: https://news.ycombinator.com/item?id=15655840 https://news.ycombinator.com/item?id=15655840
vinniejames 9y ago
These arguments also seem to confuse energy consumption with the resulting pollution. I’d give it another 10-20 years at most until the majority of energy is coming from renewable sources, making this a non-issue as far as Bitcoin is concerned

72 points by pdog 9y ago

This seems like a easy way to explain a Bitcoin ban, should any country wish to do so.

So, this is the next attack vector? Bitcoin is not green? The energy put into Proof-of-work is what makes the system immutable. People who complain about bitcoin's energy use, don't seem to grasp what makes the bitcoin Blockchain immutable. In order to change the Database, you have to go back and do the "work" which becomes practically impossible after approx. 10 blocks. You take that away and you'll make the system Tamper evident, and not Tamper Proof as it is right now. It's the only secure data base ever invented, and thats because of the energy used to secure it. I don't see these people complaining how much energy Las Vegas wastes. Or Hollywood. What about professional sports? How much energy does going to war cost? All of these are less important than the only sovereign moneys system in the history of man-kind. So, please, stop complaining about the energy use, i left my violin at home.

jvanderbot 9y ago
Once you tie the benefits of bitcoin to something as tangible as the "benefits" of a weekend in Vegas, people will back off the application as the problem. If grid energy is renewable, bitcoin is not a problem, and actually helps push increasing energy infrastructure. In the ideal world...
rothbardrand 9y ago
This is the attack vector that works on people who will never read Atlas Shrugged because they read a hit piece in Salon about Ayn Rand. This will keep them out of bitcoin, which I find kinda hilarious.

kown223 9y ago

demand and offer, I wander why the elitist hacker rank "liberal" people don't get it, the difficulty is so high because there is a lot of hash power, the network would be fine with much less, I think around 15% of the current one. On the logic of banning stuff for power saving, we should ban video games and movies.

jvanderbot 9y ago
Of course the network could operate with less competition. But it is designed to incentivize participation. The temptation to dominate the network / hash power inevitably produces high energy usage. Again, by design. I'm not sure that's a liberal standpoint, and admitting the reality of some people associating bitcoin mining with "wasteful" energy usage is not a flaw in logic.
rothbardrand 9y ago
Most of the people on this site are hard left, and not very much into hacking... there are junior developers and wannabe CEOs with MBAs here. You're not going to find cypherpunks on hacker news, generally. So, anything that fits the hard left agenda is promoted, without regard to its scientific or technical accuracy, even when it's against the startup ethos that created silicon valley in the first place.
- jacquesm 9y ago
  Please stop your continuous stream of personal attacks and your rants against the 'left', which besides lowering the general level of discourse is factually incorrect in many ways.
- orwin 9y ago
  You could use less spite and disdain for your comment i think. You probably already know that convincing yourself that your outgroup is dumb and unqualified is a tribal ego-boosting technique, but a reminder never hurt.
- ben_w 9y ago
  My girlfriend self-describes as a revolutionary Marxist. Trust me when I say I have yet to see a single genuinely “hard left” comment on Hacker News.

PKop 9y ago

"So, this is the next attack vector? Bitcoin is not green? The energy put into Proof-of-work is what makes the system immutable. People who complain about bitcoin's energy use, don't seem to grasp what makes the bitcoin Blockchain immutable. In order to change the Database, you have to go back > and do the "work" which becomes practically impossible after approx. 10 blocks. You take that away and you'll make the system Tamper evident, and not Tamper Proof as it is right now. It's the only secure data base ever invented, and thats because of the energy used to secure it. I don't see these people complaining how much energy Las Vegas wastes. Or Hollywood. What about professional sports? How much energy does going to war cost? All of these are less important than the only sovereign moneys system in the history of man-kind. So, please, stop complaining about the energy use, i left my violin at home." - daggerhashimoto In addition, if Bitcoin disrupts the banking industry and a portion of wall street, we'd have to subtract their energy consumption. It's just logically lazy to not consider if the benefits outweigh the costs, and sound immutable finite hard money out of reach of central authorities brings with it enormous benefits.

deleted 9y ago
[deleted]
w-ll 9y ago
Exactly. Energy for gold mines, armourded trucks, petrol moving it all around the world, printing synthetics and chemicals, 24/7 always on ATMS all over the world. Bitcoin mining allows me to send money to my family halfway across the world, nearly instantly, without a bank.
ihuman 9y ago
Why did you quote a comment made 10 minutes before yours? https://news.ycombinator.com/item?id=15665273 https://news.ycombinator.com/item?id=15665273
- PKop 9y ago
  Because it was dead when I got here, which I disagreed with but couldn't change.
9y ago

Asdfbla 9y ago

People are always quick to point out that this is just what it takes to build a trustless and decentralized currency, which is probably correct, but it's not clear whether such an extreme level of trustlessness is even necessary (if you are not a crypto-libertarian on principle). The benchmark for Bitcoin are normal financial transactions as they exist today (and work quite well, most of the time). So the question really is: Are you ready to have humanity spend the additional energy consumption of a country (or many countries if Bitcoin were to scale up) to run a system that offers only very limited throughput (relative to established systems) and hasn't even proven yet that it's even a viable alternative to fiat money from an economic perspective? Not to mention the scaling issues that come with such broadcast protocol. I don't really see the widespread use, at least as envisioned by Bitcoin proponents. If it's just the decentralized aspect and transparency that you want, you can relax your trust assumptions and implement something like a distributed ledger with known identities which doesn't need proof-of-work to prevent sybil attacks (identities which of course would have to be certified in some way, unfortunate). Oh well, it's still a very cool technology, but I hope for the planet's sake that cryptocurrencies stay in their niche of anonymous transactions for those who actually need it.

jvanderbot 9y ago
Agree. Bitcoin is a fun experiment / proof of concept. I'd add that I hope we will eventually tackle the energy problem, hopefully without throwing away the good parts of decentralization / distributed ledgers. It might be optimistic, but I think many early technological revolutions bring learning costs and risk environmental damage.
nategri 9y ago
It's all fun and games until Shor's algorithm, anyway. If Bitcoin is broken-in-the-long-term in one way why not admit it's broken in another, and iterate to a better solution.
- andrewchambers 9y ago
  Bitcoin can change it's own code whenever it wants, its not a static thing, it can become a better solution.

jvanderbot 9y ago

Well, let's clean up the energy grid and stop blaming consumers?

ben_w 9y ago
At the current estimated energy consumption, if everyone on Earth performed an average of one transaction per month then Bitcoin would use more electricity than is being generated.
- deadmetheny 9y ago
  This is good for Bitcoin.
  - ben_w 9y ago
    Howso?
- 6nf 9y ago
  That's not how Bitcoin works. The amount of energy used to secure the blockchain is not proportional to the number of transactions.
  - ben_w 9y ago
    It doesn’t matter that it’s not supposed to be proportional, it’s a simple scaling up from current energy usage and current transaction frequency to the world population. All that tells us is that bitcoin as it currently exists, and as part of the way it interacts with the real world has a flaw — it doesn’t tell us if that flaw is an oversight in the design or if it’s a gold-rush and/or a price bubble because humans are being irrational.

kasperni 9y ago

By reading through the comments. I don't think people realise how much energy it actually uses. One bitcoin transaction already now uses as much energy as your house in 1 week. https://motherboard.vice.com/en_us/article/ywbbpm/bitcoin-mining-electricity-consumption-ethereum-energy-climate-change https://motherboard.vice.com/en_us/article/ywbbpm/bitcoin-mi... I'm sorry but I just fail to see how this can work going forward.

VMG 9y ago
Why measure it in energy/transaction? The energy is not used for transactions, but for securing the ledger. With second-layer scaling solutions you will have no limit of transactions per block.
- cryptodogemoon 9y ago
  Why bother with a second layer when new blockchain designs improve upon the designs of Bitcoin? The ledger is "secured" by about 6 mining pools which might even be controlled by the same people. Second layer goes completely against Satoshi's primary design in the first sentence of the white paper - which is removing the need for third parties. The lightening network design is a siphoning power grab by Blockstream. After all, if you look at Bitcoin from a technical perspective the services Bitcoin offers are available in Litecoin, Monoero, etc.
  - AgentME 9y ago
    Payment channels and LN don't introduce trusted 3rd parties or counterparty risk. Payment channels weren't discussed in the whitepaper, but Satoshi discussed and attempted some payment channel designs[1]. He left before coming up with a secure payment channel design. Recent improvements to Bitcoin, including the transaction malleability fix included in the recent segwit upgrade a few months ago, finally make secure payment channels feasible. [1] https://en.bitcoin.it/wiki/Payment_channels#Nakamoto_high-frequency_transactions https://en.bitcoin.it/wiki/Payment_channels#Nakamoto_high-fr...
  - EthanHeilman 9y ago

endlessjoys 9y ago

Proof-of-Work is supposed to cost energy and there is no other way, see: http://nakamotoinstitute.org/mempool/proof-that-proof-of-work-is-the-only-solution-to-the-byzantine-generals-problem/ http://nakamotoinstitute.org/mempool/proof-that-proof-of-wor...

contravariant 9y ago
I'm hesitant to call that a proof, there are various points in the proof that might not be false, but are certainly non-obvious. Firstly, it seems to be enough for any alternative consensus to be impossible to maintain, rather than impossible to produce. Secondly, to make it practically (economically) impossible to maintain an alternative consensus should requires Proof-Of-Resources, not Proof-Of-Work. Thirdly, there's no reason to assume those resources can't be stakes in the consensus itself. Finally, if the only way to maintain consensus is by building massive expensive specialised buildings, then congratulations you've just rediscovered a bank.

wickedlogic 9y ago

These pieces are starting to get pretty funny. `If it keeps growing, it'll be so expensive, it can't possibly work.` Also assumes bitcoin as we know it today is fully immutable, but that isn't the case, and neither is energy production, or technology used to run the whole thing. But you know what gets tricky, rewriting history in bitcoin's blockchain. `You'd almost have to spin up an alternate time line, and those alternate time lines are expensive, and use a lot of energy, it cant possibly work.` The value in the future of bitcoin may be that it has a long and very public chain... and that alone is probably enough to hold reasonable utility in the future. Just like silver/gold and other scares things provided utility for quite a while. Only now of course, if it gets too expensive, another slightly different public fork will persist (or several of them).

UncleMeat 9y ago
Isn't the immutability of BTC one of the major things that proponents point to? Wasn't this why there was such pushback against increasing block sizes by just 2x? Why should we assume that a community that is so based in political rather than technical ideals will just come up with some unnamed technical solution in the future to improve efficiency?

VMG 9y ago

How much energy and toxic waste is generated by gold mining?

adyavanapalli 9y ago

Just so this isn't forgotten, I think we have to ask _in reference to what exactly?_ Paper money and its supporting electronic banking systems cost energy and money too e.g. delivering cash to banks and other institutions, building and powering banks and ATMs, software costs in building and maintaining electronic payment systems, etc. I think it would be instructive to see how the costs compare.

asabjorn 9y ago

The problem isn't the energy cost, but the fact that the energy cost is going towards work that has no utilitarian purpose. Ethereum shows a potential way to fix that, and bitcoin can adopt a similar approach once the core problems of the approach are solved.

wyldfire 9y ago

Another perspective (from 2015): "Nothing is Cheaper than Proof of Work" [1] [1] http://www.truthcoin.info/blog/pow-cheapest/ http://www.truthcoin.info/blog/pow-cheapest/

jacobr 9y ago

What is the most energy efficient way to get rid of Bitcoins? Does it matter if I sell them all at once or if I spread it out over more transactions?

deleted 9y ago
[deleted]

LyndsySimon 9y ago

This doesn't even make sense. If it isn't profitable to mine, then people won't mine. Difficulty will fall, which will mean that fewer cycles (and thus, less energy) is needed to find the next block. The author literally took the "total cost of all energy in the network" and divided it by "total number of transactions". That's not how it works. There is effectively zero incremental cost in terms of energy usage for a transaction.

nosuchthing 9y ago
The point is to measure the system's efficiency and energy usage. Bitcoin's Proof of Work algorithm using SHA-256 and power hungry ASICs with a bottle neck on 4-7 transactions per second (average, as latency is in 10 minute intervals) or even in the case of the controversial Bitcoin-Cash with 56 transactions per second; what Bitcoin as a service does with the type of infrastructure required for the software to run can be analyzed and defined in terms of cost of operations versus alternative services which offer similar or identical functionality.

quantdev 9y ago

"Even as bitcoin flirts with $8,000, the price required for mining to be marginally profitable stands at a jaw-dropping $300,000 to $1.5 million by 2022 based on current growth trends and electricity use, according to Christopher Chapman, an analyst at Citigroup Inc. At that pace, the implied consumption would match that for the whole of Japan over the long haul." This Citi analyst either doesn't understand Bitcoin or doesn't understand economics: because the protocol has difficulty adjustment and because marginal revenue will always approximate marginal cost, the cost to mine 1 BTC will always approximate its value. Therefore, projecting the cost of mining is equivalent to predicting the price of Bitcoin. If the cost to mine 1 BTC was $1MM USD (and so $1MM/BTC), that would imply the network value of the Bitcoin ecosystem would be well over the USD M1 supply (tens of trillions, in fact). Bitcoin would have effectively replaced fiat in that world and perhaps all the cost it eliminated would be worth the mining. In any event, from what he said, I doubt this (equity) analyst understands that he can't project $1MM BTC mining cost without at least $1MM per BTC price.

Retric 9y ago
This assumes rational actors and a unified market. If bitcoin mining let's people get around currency controls the prices my end up significantly different.
- colechristensen 9y ago
  So organized crime in the 21st century is algorithms replacing mobsters.
  - cwkoss 9y ago
    Seems unlikely, but that would be incredibly beneficial to society.
    - __jal 9y ago
      Really? Mobsters make mistakes, sleep, and theoretically could have pity.

platinum1 9y ago

Bram Cohen just announced Chia to address this, using storage and time as the proof-of-work. https://techcrunch.com/2017/11/08/chia-network-cryptocurrency/ https://techcrunch.com/2017/11/08/chia-network-cryptocurrenc... previous conversation here: https://news.ycombinator.com/item?id=15655840 https://news.ycombinator.com/item?id=15655840

vinniejames 9y ago

These arguments also seem to confuse energy consumption with the resulting pollution. I’d give it another 10-20 years at most until the majority of energy is coming from renewable sources, making this a non-issue as far as Bitcoin is concerned