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I provided this statement to some journalists who contacted me to get another viewpoint on Alex de Vries's paper: His findings are not completely accurate, but
by mrb 8y ago
I provided this statement to some journalists who contacted me to get another viewpoint on Alex de Vries's paper:
His findings are not completely accurate, but also not completely wrong either. My own formal well-documented estimate is that Bitcoin used 0.09% of the world's electricity as of January 11th, 2018 (http://blog.zorinaq.com/bitcoin-electricity-consumption/ http://blog.zorinaq.com/bitcoin-electricity-consumption/). After 4 months of growth I estimate we are around 0.15-0.20% today. Therefore reaching 0.50% by the end of 2018 is plausible; not likely but plausible. That said, overall I think Alex de Vries's figures are rather inflated because he makes two errors. Firstly, his model assumes that manufacturers sell at cost and make zero profits, which allows miners to spend more on electricity. In reality we've seen Bitmain, the largest manufacturer, make billions of dollars over the last few years. No one expects them to make zero profits by the end of 2018. Secondly, de Vries makes the mistake of assuming that all cryptocurrency mining chips produced by TSMC on behalf of Bitmain end up in Bitcoin mining machines. In reality many chips are fabricated for cryptocurrencies other than Bitcoin. This altcoin sector is rapidly growing. It wouldn't be unreasonable to assume that Bitcoin mining machines will represent less than half of Bitmain's sales by the end of 2018.
(This is a copy of my comment from yesterday's thread on the same topic https://news.ycombinator.com/item?id=17084253 https://news.ycombinator.com/item?id=17084253)
- brianberns 8y ago> In reality many chips are fabricated for cryptocurrencies other than Bitcoin. OK, so replace "Bitcoin" with "Bitcoin and other cryptocurrencies" in the title. The point remains the same: blockchain-based technologies are extremely inefficient with energy. That's the nature of "proof of work" algorithms.
- VMG 8y agoWhich algorithms are more efficient at doing what Bitcoin does?
- kennywinker 8y agoYou’re thinking efficient compared to another hashing algorithm. I think op is saying efficient compared to the value it creates. I.e. cryptocurrency is useful for some things, but it’s burning a LOT of energy to do it.
- VMG 8y agoI'm asking what is more efficient at doing what Bitcoin does: censorship-resistant transactions with sound money.
- kennywinker 8y agoCash?
- luddaite 8y agoI think the point here is that the need for such a currency is not absolute and may be outweighed by the cost of such a large energy consumption rate.
- hudon 8y agoWhatever VISA is doing is orders of magnitude more efficient.
- VMG 8y ago* not censorship resistant * issuance controlled by a monopoly Don't get me wrong, I use VISA all the time, but it's a different product.
- hudon 8y agoBitcoin is neither of those things. Mining, developers and exchanges are all centralized. All a government that cares has to do to control issuance or censor transactions is regulate those entities.
- mrb 8y ago«OK, so replace "Bitcoin" with "Bitcoin and other cryptocurrencies" in the title» Changing the title would not resolve my main critic, which is that de Vries still overestimates the true figure (because of his assumption that manufacturers will make zero profits "by the end of 2018".)