3 ms·

The latest ASIC miners run at about 100W/TH. That means the entire hashing capacity of Bitcoin (15 EH/s) on the most efficient hardware would draw 100,000 kW.

by zaroth 9y ago

The latest ASIC miners run at about 100W/TH. That means the entire hashing capacity of Bitcoin (15 EH/s) on the most efficient hardware would draw 100,000 kW. That’s about 80,000 US households of power. Or to put it another way, ~$21 million per month in electricity. Obviously average mining power efficiency is currently much lower, so this isn’t much more than a thought exercise. But the point is there are a lot of uses for electricity. The only real problem is if the price of electricity doesn’t actually cover the cost of the externalities of generating it. In many places, you are paying not only for externalities but also infrastructure upgrades throughout the grid as well as subsidizing low income use, so in that sense Bitcoin is funding these positive programs and investments. If the electricity is being sold below real market cost, don’t blame Bitcoin (or incandescent bulbs) blame the fucking electrical pricing regulations.

xg15 9y ago
> The only real problem is if the price of electricity doesn’t actually cover the cost of the externalities of generating it. We don't even know all the externalities of generating it, let alone adding all of them to the price. E.g, nuclear waste and depleting fossil fuels are two well-known externalities which we currently consciously choose to ignore. Climate change is an externality which until about half of a century ago wasn't known at all.
- baddox 9y ago
  Sure, we don’t know all the externalities, but some of those externalities could be positive. The fact that we don’t know doesn’t mean the true public cost of electricity is even higher than the market price.
  - xg15 9y ago
    Yes, you can say that about everything. "Maybe polluting the air and driving a mass extinction event has some surprising positive consequences we just don't know yet. We should go on and see if we discover them!" There are plenty of hints that we don't correctly account even for the known negative externalities. There are also incidents of new negative externalities showing up we hadn't known about before. I don't know about hints for positive externalities in the same order of magnitude.
Robotbeat 9y ago
While I find your post informative, I don't agree with your last statement. Bitcoin is designed around the idea of burning energy (in the form of energy-expensive computation) as "proof of work." This design decision is certainly a valid point of criticism of the system.
- zaroth 9y ago
  Great point! My understanding is that proof of work is the only proven way to resist Sybil attacks in a fully distributed manner to-date. When someone invents a better mechanism they will certainly have a huge economic advantage if you can join and support the miner network without consuming so many real resources. Decentralized Sybil resistance at this point requires a hard cost to limit spam. In a fully decentralized system, this seems like a natural law that this must be true. I have ideas on how to solve Sybil without resource exhaustion, but they are just at the initial prototype phase. If the critique is that Bitcoin specifically isn’t worth the “cost” of all the electricity, it’s a moral question which is easily solved by better pricing electricity. If the critique is Bitcoin is wasteful, then point to a more efficient algorithm or it’s tilting at windmills. There are algorithms which aren’t as resource intensive but the market judged the trade-offs in centralization to not be worth the benefits. We’ve know how to store a centralized ledger for a long time, so it’s totally reasonable that steps towards centralization for efficiency sake are a non-starter.
  - Robotbeat 9y ago
    I don't think it's unreasonable to argue centralization is better because it in principle allows creation of currency without the requisite resource requirements. This is a reasonable argument to have. Especially because the economies of scale from mining power may lead to something a little like centralization anyways. It is fully reasonable to argue that the supposed benefits of decentralization via a Bitcoin-like system do not outweigh the benefits of centralization in the real world. As far as the "market deciding," well currently the market values centralized fiat currency far more than decentralized cryptocurrency, so I don't think that's a very strong argument. (Plus, "the market can stay irrational longer than you can stay solvent.")

by zaroth 9y ago

xg15 9y ago

> The only real problem is if the price of electricity doesn’t actually cover the cost of the externalities of generating it. We don't even know all the externalities of generating it, let alone adding all of them to the price. E.g, nuclear waste and depleting fossil fuels are two well-known externalities which we currently consciously choose to ignore. Climate change is an externality which until about half of a century ago wasn't known at all.

baddox 9y ago
Sure, we don’t know all the externalities, but some of those externalities could be positive. The fact that we don’t know doesn’t mean the true public cost of electricity is even higher than the market price.
- xg15 9y ago
  Yes, you can say that about everything. "Maybe polluting the air and driving a mass extinction event has some surprising positive consequences we just don't know yet. We should go on and see if we discover them!" There are plenty of hints that we don't correctly account even for the known negative externalities. There are also incidents of new negative externalities showing up we hadn't known about before. I don't know about hints for positive externalities in the same order of magnitude.

Robotbeat 9y ago

While I find your post informative, I don't agree with your last statement. Bitcoin is designed around the idea of burning energy (in the form of energy-expensive computation) as "proof of work." This design decision is certainly a valid point of criticism of the system.

zaroth 9y ago
Great point! My understanding is that proof of work is the only proven way to resist Sybil attacks in a fully distributed manner to-date. When someone invents a better mechanism they will certainly have a huge economic advantage if you can join and support the miner network without consuming so many real resources. Decentralized Sybil resistance at this point requires a hard cost to limit spam. In a fully decentralized system, this seems like a natural law that this must be true. I have ideas on how to solve Sybil without resource exhaustion, but they are just at the initial prototype phase. If the critique is that Bitcoin specifically isn’t worth the “cost” of all the electricity, it’s a moral question which is easily solved by better pricing electricity. If the critique is Bitcoin is wasteful, then point to a more efficient algorithm or it’s tilting at windmills. There are algorithms which aren’t as resource intensive but the market judged the trade-offs in centralization to not be worth the benefits. We’ve know how to store a centralized ledger for a long time, so it’s totally reasonable that steps towards centralization for efficiency sake are a non-starter.
- Robotbeat 9y ago
  I don't think it's unreasonable to argue centralization is better because it in principle allows creation of currency without the requisite resource requirements. This is a reasonable argument to have. Especially because the economies of scale from mining power may lead to something a little like centralization anyways. It is fully reasonable to argue that the supposed benefits of decentralization via a Bitcoin-like system do not outweigh the benefits of centralization in the real world. As far as the "market deciding," well currently the market values centralized fiat currency far more than decentralized cryptocurrency, so I don't think that's a very strong argument. (Plus, "the market can stay irrational longer than you can stay solvent.")