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Don't refer to the Digiconomist BECI for electricity consumption figures. The author makes fundamentally flawed assumptions, causing him to overestimate the con
by mrb 8y ago
Don't refer to the Digiconomist BECI for electricity consumption figures. The author makes fundamentally flawed assumptions, causing him to overestimate the consumption by 1.5× to 2.8×, and likely by 2.2×.
BECI starts with calculating average mining revenues based on a 439-day (variable) moving average of the Bitcoin and Bitcoin Cash prices. Then BECI assumes a fixed 60% share of these revenues are spent on electricity costing $0.05/kWh. That is it. There is nothing sophisticated about his model. His first error is that 60% is not representative of current hardware; real-world data shows the lifetime average percentage is between 6.3% and 38.6%. His second error is that the averaging period is excessively variable and poorly justified: it has increased from 60 and 439 days and changed by twofold his electricity consumption figures.
For more info, see: http://blog.zorinaq.com/serious-faults-in-beci/ http://blog.zorinaq.com/serious-faults-in-beci/
In reality, Bitcoin's consumption is only a third of the power generated by the Three Gorges Dam as of 4 months ago: http://blog.zorinaq.com/bitcoin-electricity-consumption/ http://blog.zorinaq.com/bitcoin-electricity-consumption/
- hudon 8y agoHe seems to support his 60% figure with a lot of evidence [0][1] and you have agreed in the past that if anything 60% is the number your model converges to as well... Anyway, the discussion is a good one and I'm glad at least 2 people are concerned about this. This is exactly the kind of thing we should be truth-seeking on, as well as finding use cases... not if Wall Street is finally allowing people who don't know any better to keep fueling the beast. [0] https://digiconomist.net/bitcoin-energy-consumption#validation https://digiconomist.net/bitcoin-energy-consumption#validati... [1] https://digiconomist.net/re-serious-faults-in-beci https://digiconomist.net/re-serious-faults-in-beci
- mrb 8y ago[0] and [1] present zero evidence for supporting 60% as a current valid estimate. [0] even misrepresents the Morgan Stanley report (which actually supports my numbers, not his): http://blog.zorinaq.com/serious-faults-in-beci/#critic-6-author-misrepresents-morgan-stanleys-reports http://blog.zorinaq.com/serious-faults-in-beci/#critic-6-aut... Alex of Digiconomist is very good at writing long verbose paragraphs that "seem" to support his model, but when we look at his actual data and logic, it's full of holes, flaws, and poor assumptions. One of the things we both agree on is that in the future (1 year? 10 years?) the ratio will tend toward 40 to 60%. But that doesn't say anything about the ratio as of today.
- Fomite 8y agoThat's a really big "only" even if we accept all those assumptions.
- TeMPOraL 8y agoEven if he's overestimating by 2.8x, it's still within the same order of magnitude. So the conclusion of Bitcoin using up country-scale amounts of electricity is a valid one.
- ianai 8y agoIt’s also not like there’s any requirement for reporting energy figures by miners. 2.8x seems, to me, a very good estimate for something with large errors inherently.
- mrb 8y agoMy beef with claiming Bitcoin consumes "as much as a country" is that it is uninformative, highly misleading. Countries span multiple orders of magnitude so it is like saying a vehicle weights "as much as a rock" when a rock could be 1 kg or 10 tons.
- zby 8y agoHow the cost is divided between burned electricity, hardware and human labour does not make any difference. It is all value burned on 7 transactions per second.