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You're making two mistakes. The first is that scaling Bitcoin up to the size of visa is not particularly possible. You might be able to match visa's throughput

You're making two mistakes. The first is that scaling Bitcoin up to the size of visa is not particularly possible. You might be able to match visa's throughput by greatly increasing the block interval (e.x. one block every week) but the protocol cannot reasonably scale past a couple hundred transactions per second without taking a massive hit to transaction latency. So, in this sense the question of how much energy Bitcoin would consume if you scaled it up is meaningless, it cannot be scaled up. The second mistake is that Bitcoin's energy consumption has no relationship with its scale. Say you built a hypothetical MiniBitcoin which was exactly the same except each block was so small they could fit just one transaction, MiniBitcoin would consume almost exactly the same amount of energy as Bitcoin does now. The energy usage goes up as competition between miners increases. The energy usage does not go up as more transactions are processed.

arcticbull 6y ago
> The first is that scaling Bitcoin up to the size of visa is not particularly possible. That’s no mistake, folks are suggesting that on a per transaction basis - today - Bitcoin is cheaper or more efficient if you take into account hand wavey externalities not captured in the classical transaction cost model of a payment processor like visa. What I’ve done is invalidate that argument not by scaling visa down to a single transaction (as that doesn’t capture externalities, per the argument posited) but scale BTC up as the argument is BTC captures all externalities. By then showing that it’s physically impossible I’ve disproved the thesis. You’re making a different argument about avenues for scaling and that deserves its own conversation.
- brian_cloutier 6y ago
  You haven't shown that it's physically impossible though. Scaling doesn't work that way, not even in the physical world does it work that way. As the side length of a cube increases the surface area increases with the square of the side length, and volume increases with the cube of the side length. When considering the effects of scaling a system it makes no sense to just multiply all numbers by some constant. The question of how much energy Bitcoin would consume if you scaled it up cannot be solved, even in approximation, by blindly multipling it's current energy usage by a constant.
  - arcticbull 6y ago
    You misunderstand. I’m not saying it’s physically impossible for Bitcoin to scale (which I do believe, separately), but that it’s physically impossible for Bitcoin to be more efficient on a per transaction basis as specced today even if you take into account all externalities.
    - brian_cloutier 6y ago
      Okay, I might be misunderstanding you. What is your argument though? I can't find anywhere in this thread where you showed it's impossible for bitcoin to be more efficient on a per-txn basis.
paulgb 6y ago
Energy use in equilibrium is proportional to the value of the block rewards plus transaction rewards. In a world where Bitcoin replaces gold or visa, it would be significantly worse for the environment than it is today, since the value of each unit would have to increase to satisfy the demand.
- brian_cloutier 6y ago
  > Energy use in equilibrium is proportional to the value of the block rewards plus transaction rewards. Good point, you're right, I was forgetting this. > since the value of each unit would have to increase to satisfy the demand. I didn't follow this though, what do you mean? > In a world where Bitcoin replaces gold or visa It doesn't seem very meaningful to me to talk about energy usage in this world because Bitcoin can't replace visa. To replace visa we would have to make enough changes to it that I don't have much of an idea of what the energy usage of the modified system will look like. Though let's consider Nervos' NC-Max, which gets a lot closer to replacing visa than an unmodified Bitcoin can. It works by, effectively, massively increasing the block size limit. In a NC-Max world energy usage would still be proportional to the coinbase but the coinbase might stay small because there's so much room in each block that transaction fees stay low.
  - paulgb 6y ago
    > I didn't follow this though, what do you mean? I should have worded it better, I just mean that if Bitcoin were to replace gold as the primary store of value, the price of Bitcoin would have to rise significantly to absorb the demand, since supply is inelastic. This in turn would increase the environmental externalities.
    - brian_cloutier 6y ago
      Thanks for clarifying. I'm not sure it would increase the environmental externalities. Since transaction inclusion is a marketplace and since most products we care about will continue to be denominated in local currencies I don't think transaction fees will change much as the price of bitcoin changes. As the dollar-denominated value of a 0.01btc fee increases people will become less willing to spend that 0.01btc. There might be some stickiness but I expect the kwh-denominated fees will grow much more slowly than the price of bitcoin.

arcticbull 6y ago

> The first is that scaling Bitcoin up to the size of visa is not particularly possible. That’s no mistake, folks are suggesting that on a per transaction basis - today - Bitcoin is cheaper or more efficient if you take into account hand wavey externalities not captured in the classical transaction cost model of a payment processor like visa. What I’ve done is invalidate that argument not by scaling visa down to a single transaction (as that doesn’t capture externalities, per the argument posited) but scale BTC up as the argument is BTC captures all externalities. By then showing that it’s physically impossible I’ve disproved the thesis. You’re making a different argument about avenues for scaling and that deserves its own conversation.

brian_cloutier 6y ago
You haven't shown that it's physically impossible though. Scaling doesn't work that way, not even in the physical world does it work that way. As the side length of a cube increases the surface area increases with the square of the side length, and volume increases with the cube of the side length. When considering the effects of scaling a system it makes no sense to just multiply all numbers by some constant. The question of how much energy Bitcoin would consume if you scaled it up cannot be solved, even in approximation, by blindly multipling it's current energy usage by a constant.
- arcticbull 6y ago
  You misunderstand. I’m not saying it’s physically impossible for Bitcoin to scale (which I do believe, separately), but that it’s physically impossible for Bitcoin to be more efficient on a per transaction basis as specced today even if you take into account all externalities.
  - brian_cloutier 6y ago
    Okay, I might be misunderstanding you. What is your argument though? I can't find anywhere in this thread where you showed it's impossible for bitcoin to be more efficient on a per-txn basis.

paulgb 6y ago

Energy use in equilibrium is proportional to the value of the block rewards plus transaction rewards. In a world where Bitcoin replaces gold or visa, it would be significantly worse for the environment than it is today, since the value of each unit would have to increase to satisfy the demand.

brian_cloutier 6y ago
> Energy use in equilibrium is proportional to the value of the block rewards plus transaction rewards. Good point, you're right, I was forgetting this. > since the value of each unit would have to increase to satisfy the demand. I didn't follow this though, what do you mean? > In a world where Bitcoin replaces gold or visa It doesn't seem very meaningful to me to talk about energy usage in this world because Bitcoin can't replace visa. To replace visa we would have to make enough changes to it that I don't have much of an idea of what the energy usage of the modified system will look like. Though let's consider Nervos' NC-Max, which gets a lot closer to replacing visa than an unmodified Bitcoin can. It works by, effectively, massively increasing the block size limit. In a NC-Max world energy usage would still be proportional to the coinbase but the coinbase might stay small because there's so much room in each block that transaction fees stay low.
- paulgb 6y ago
  > I didn't follow this though, what do you mean? I should have worded it better, I just mean that if Bitcoin were to replace gold as the primary store of value, the price of Bitcoin would have to rise significantly to absorb the demand, since supply is inelastic. This in turn would increase the environmental externalities.
  - brian_cloutier 6y ago
    Thanks for clarifying. I'm not sure it would increase the environmental externalities. Since transaction inclusion is a marketplace and since most products we care about will continue to be denominated in local currencies I don't think transaction fees will change much as the price of bitcoin changes. As the dollar-denominated value of a 0.01btc fee increases people will become less willing to spend that 0.01btc. There might be some stickiness but I expect the kwh-denominated fees will grow much more slowly than the price of bitcoin.