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> Well that’s obviously and trivially wrong so... I mean you can’t pretend away one Chile of electricity use to play multiplayer excel. It's horribly wasteful

> Well that’s obviously and trivially wrong so... I mean you can’t pretend away one Chile of electricity use to play multiplayer excel. It's horribly wasteful now. As the block reward decays it may transition to being less wasteful; it depends on how high transaction fees rise. Last time I tried to work it out the total electrical+transaction fee cost of bitcoin compared to spend volume (not including obvious change to self) was at about 1%. Almost comparable to current credit/debit network overhead, probably a lot more expensive than interbank transfer.

arcticbull 6y ago
Currently about $80 of electricity and goes into each transaction, which is socialized across all holders as inflation. It’s this incentive which keeps miners mining. Once the reward drops to zero, transaction fees will be born directly by parties to the transaction and will have to be high enough to stave off a 51% attack directly.
- paulgb 6y ago
  > Once the reward drops to zero, transaction fees will be born directly by parties to the transaction and will have to be high enough to stave off a 51% attack directly. This is something I don’t see talked about much, but the asymptotic state of Bitcoin when mining fees are zero is interesting to think about. It’s not obvious to me that the economic incentives against running a 51% attack will exist in the “terminal” stage of Bitcoin in the way that they do in the “inflationary” (positive mining reward) stage.
  - arcticbull 6y ago
    Would the economic incentives not remain unchanged as a function of unit price of BTC? It feels like in the terminal state there’s going to be a high stakes game of chicken between attackers and holders to see who’s willing to pay more for control of the whole network. This is likely exacerbated by a move to layer 2 networks to avoid the 7tx bottleneck isn’t it? I’m not sure personally this is just something I’ve been noodling on.
    - paulgb 6y ago
      Yes, I agree that the incentives to run a 51% attack are purely a function of the market value, but I mean that without the incentive to mine in excess of what transaction costs would pay for being socialized by the whole community, it seems unlikely that transaction fees will be enough to secure the network from a bad actor. Especially if, as you point out, layer 2 networks become a more desirable place to do transactions. Basically, it seems like the terminal state of this is a gigantic freeloader problem where everyone wants the network to be secure but nobody is incentivized to do it.
      - benlivengood 6y ago
        > Basically, it seems like the terminal state of this is a gigantic freeloader problem where everyone wants the network to be secure but nobody is incentivized to do it. It'll be in the interest of exchanges and payment processors to prevent double-spend at least, and they have an incentive for the blockchain to be trustworthy vs. running their own attacks and could adjust their own fees to maintain >51% control of miners across the lot of them. There's also a fallback recovery mechanism; for any attacker willing to invest $X in a 51% attack the remaining users only have to invest an additional $X*.04 to regain 51% control and make a hard fork that most miners would switch to. My guess is that faced with evidence of a double-spend most miners would switch to the hard fork to avoid losing the block rewards the attacker's chain stole from them. This relies on rapid detection of the attack and availability of a hard-fork client.
alwillis 6y ago
A nice collection of articles regarding bitcoin’s energy usage. Spoiler: it’s quite different than the narrative that’s out there: https://bitcoinmagazine.com/tags/energy-consumption https://bitcoinmagazine.com/tags/energy-consumption
- arcticbull 6y ago
  The only spoiler is that a pro Bitcoin source is going to extreme levels of mental gymnastics to justify the unjustifiable use of an entire countries worth to electricity to write 7 entries per second into the worlds slowest and least efficient database.
  - krupan 6y ago
    Bitcoin would be an utter failure if it sacrificed security in order to gain speed and efficiency. And make sure to compare how much energy (including the entire military, police forces, FBI, etc.) is used to secure US dollars.
    - arcticbull 6y ago
      > And make sure to compare how much energy (including the entire military, police forces, FBI, etc.) is used to secure US dollars. Those aren't to secure the US dollar, those are to secure the US. Switching to Bitcoin would not change the expenditure in those areas one iota. Not. One. Iota. If anything the US dollar is freeloading on the expenditure there. However, setting that aside, it's pretty trivial to disprove your argument. If you linearly scaled the energy usage of Bitcoin to the number of transactions per second currently handled by just Visa alone, Bitcoin would require more energy than the entire world generates a few times over, and generate more e-waste than the entire world generates today. 7 transactions per second is enough for a decently flea market or a Costco, not a global economy. > Bitcoin would be an utter failure if it sacrificed security in order to gain speed and efficiency. Which is why it shouldn't exist. We can do better. We are doing better already.
    - qwytw 6y ago
      There were 285,418 bitcoin transactions* in the last 24 hours, bitcoin energy consumption is estimated to be around 76.87 terawatt hours per year, which is 0.210603 twh per day. So 0.210603 / 285,418 = 0.000000737874765 which is 737.874765 kWh per transaction. Assuming a price of $0.10 and an average 475g CO2 emitted per kWh, the real cost of a single transaction is $73 and 350kg of CO2. But I suppose that's a price worth paying... *according to https://bitinfocharts.com/bitcoin/ https://bitinfocharts.com/bitcoin/

arcticbull 6y ago

Currently about $80 of electricity and goes into each transaction, which is socialized across all holders as inflation. It’s this incentive which keeps miners mining. Once the reward drops to zero, transaction fees will be born directly by parties to the transaction and will have to be high enough to stave off a 51% attack directly.

paulgb 6y ago
> Once the reward drops to zero, transaction fees will be born directly by parties to the transaction and will have to be high enough to stave off a 51% attack directly. This is something I don’t see talked about much, but the asymptotic state of Bitcoin when mining fees are zero is interesting to think about. It’s not obvious to me that the economic incentives against running a 51% attack will exist in the “terminal” stage of Bitcoin in the way that they do in the “inflationary” (positive mining reward) stage.
- arcticbull 6y ago
  Would the economic incentives not remain unchanged as a function of unit price of BTC? It feels like in the terminal state there’s going to be a high stakes game of chicken between attackers and holders to see who’s willing to pay more for control of the whole network. This is likely exacerbated by a move to layer 2 networks to avoid the 7tx bottleneck isn’t it? I’m not sure personally this is just something I’ve been noodling on.
  - paulgb 6y ago
    Yes, I agree that the incentives to run a 51% attack are purely a function of the market value, but I mean that without the incentive to mine in excess of what transaction costs would pay for being socialized by the whole community, it seems unlikely that transaction fees will be enough to secure the network from a bad actor. Especially if, as you point out, layer 2 networks become a more desirable place to do transactions. Basically, it seems like the terminal state of this is a gigantic freeloader problem where everyone wants the network to be secure but nobody is incentivized to do it.
    - benlivengood 6y ago
      > Basically, it seems like the terminal state of this is a gigantic freeloader problem where everyone wants the network to be secure but nobody is incentivized to do it. It'll be in the interest of exchanges and payment processors to prevent double-spend at least, and they have an incentive for the blockchain to be trustworthy vs. running their own attacks and could adjust their own fees to maintain >51% control of miners across the lot of them. There's also a fallback recovery mechanism; for any attacker willing to invest $X in a 51% attack the remaining users only have to invest an additional $X*.04 to regain 51% control and make a hard fork that most miners would switch to. My guess is that faced with evidence of a double-spend most miners would switch to the hard fork to avoid losing the block rewards the attacker's chain stole from them. This relies on rapid detection of the attack and availability of a hard-fork client.

alwillis 6y ago

A nice collection of articles regarding bitcoin’s energy usage. Spoiler: it’s quite different than the narrative that’s out there: https://bitcoinmagazine.com/tags/energy-consumption https://bitcoinmagazine.com/tags/energy-consumption

arcticbull 6y ago
The only spoiler is that a pro Bitcoin source is going to extreme levels of mental gymnastics to justify the unjustifiable use of an entire countries worth to electricity to write 7 entries per second into the worlds slowest and least efficient database.
- krupan 6y ago
  Bitcoin would be an utter failure if it sacrificed security in order to gain speed and efficiency. And make sure to compare how much energy (including the entire military, police forces, FBI, etc.) is used to secure US dollars.
  - arcticbull 6y ago
    > And make sure to compare how much energy (including the entire military, police forces, FBI, etc.) is used to secure US dollars. Those aren't to secure the US dollar, those are to secure the US. Switching to Bitcoin would not change the expenditure in those areas one iota. Not. One. Iota. If anything the US dollar is freeloading on the expenditure there. However, setting that aside, it's pretty trivial to disprove your argument. If you linearly scaled the energy usage of Bitcoin to the number of transactions per second currently handled by just Visa alone, Bitcoin would require more energy than the entire world generates a few times over, and generate more e-waste than the entire world generates today. 7 transactions per second is enough for a decently flea market or a Costco, not a global economy. > Bitcoin would be an utter failure if it sacrificed security in order to gain speed and efficiency. Which is why it shouldn't exist. We can do better. We are doing better already.
  - qwytw 6y ago
    There were 285,418 bitcoin transactions* in the last 24 hours, bitcoin energy consumption is estimated to be around 76.87 terawatt hours per year, which is 0.210603 twh per day. So 0.210603 / 285,418 = 0.000000737874765 which is 737.874765 kWh per transaction. Assuming a price of $0.10 and an average 475g CO2 emitted per kWh, the real cost of a single transaction is $73 and 350kg of CO2. But I suppose that's a price worth paying... *according to https://bitinfocharts.com/bitcoin/ https://bitinfocharts.com/bitcoin/