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If we make the transactions more efficient, lowering the fees, we might remove the huge incentive to mine so much. That would be great.
by andruby 8y ago
If we make the transactions more efficient, lowering the fees, we might remove the huge incentive to mine so much. That would be great.
- paulmd 8y agoThis is nonsensical and wrong. Transactions aren't what causes energy consumption in Bitcoin, you can process all the transactions in the whole Bitcoin or Ethereum network on a Raspberry Pi. It's the proof-of-work hashing that makes Bitcoin energy-inefficient, and that's purely a make-work problem, just a way to make mining arbitrarily difficult so the block times hit the expected average. The problem with scaling to larger numbers of transactions is that block sizes become bigger and it takes more disk space and bandwidth to run a node. But, the bigger we make them, the more transaction fees there are, so incentives for miners would actually go up. (very marginally so - block rewards are like 100x as high as the transaction fees, which actually leads some miners to not include transactions at all - trading off a 1% lower payout for faster propagation times and an increased chance of "winning" if they successfully mine a block at nearly the same time as another miner)
- andruby 8y agoMaybe I wasn't clear in my original message. I meant that with lower block rewards and lower transaction fees (through lightning and other advances), the total reward for mining would go down, removing the incentive for the large number of mining operations. On the large scale, I don't see mining efficiency affecting total bitcoin power usage, but I do see rewards impacting it. (higher BTC price => higher economic incentive to mine => more investments in mining operations => more power usage) I think a lower bitcoin Hashrate would actually be a good thing (for power consumption and pollution)