2 ms·
Bitcoins energy consumption has no correlation with its transaction throughput. Price goes up > People turn on more miners > Difficulty goes up > Less efficien
by Mengkudulangsat 7y ago
Bitcoins energy consumption has no correlation with its transaction throughput.
Price goes up > People turn on more miners > Difficulty goes up > Less efficient miners become unprofitable > People turn off more miners > Difficulty goes down.
It's a self-correcting dynamic purely due to economics, not linked to usage.
- sk0g 7y agoSo ever since Bitcoin's creation, it has been using the exact same amount of power? Because the transaction throughput surely has changed. Do you not agree that, loosely, there is a correlation between transaction throughput/ popularity/ real world usage, and the amount of people being happy to invest time, effort, and money into mining?
- Mengkudulangsat 7y agoThe amount of power may not be the same, but the economic formula hasn't changed from the start. Inputs to that formula are solely bitcoin price / hardware price / electricity price / other miners. Miners don't care about network throughput at all. Is this market failure? I don't know... Bitcoin still works despite it.
- viraptor 7y agoThroughput increased (from 0), since people started using it. But the maximum throughput cannot increase without protocol changes. There are workarounds like lightning network, but that's off the main blockchain. There's a hard limit on how many transactions you can put in one block. More mining power doesn't change that maximum.
- realusername 7y agoI would not go as far as to say there's no correlation. The price of Bitcoin is also dependent on how many people would use it / value it, so the profitability of miners. Multiply by 100 the usage compared to now and for sure the price would go up by a lot.