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> a minuscule percentage This is true right now considering how nascent this is, but what happens if adoption picks up? One thing I’d like to see discussed is

by bhupy 6y ago

> a minuscule percentage This is true right now considering how nascent this is, but what happens if adoption picks up? One thing I’d like to see discussed is what the marginal power cost of Bitcoin is. From where I sit, the vast majority of power consumption is fixed per block, and occurs regardless of whether you have 1 or 10,000 transactions.

tekromancr 6y ago
Almost, but because of the incentives, the greater the adoption, the more valuable each individual block reward actually is. The more valuable each individual block reward is, the more energy you can afford to spend attempting to mine it.
kybernetikos 6y ago
You can't fit 10,000 transactions in a block on BTC.
michaelscott 6y ago
The power consumption is linked to network size and has nothing to do with the block itself. If anything the marginal power cost is linked to the price of a Bitcoin, as the higher it climbs the more incentive to mine, the greater the competition and therefore the greater the mining difficulty/energy required. The only way to really lower energy consumption is to lower the price I can get for a Bitcoin but with the current economic conditions I don't see that happening anytime soon.
- sp332 6y ago
  How is power consumption related to network size? I agree that the power consumption of the network is directly related to the value of the bitcoins mined (and I supposed the transaction fee/tip size).
  - x3n0ph3n3 6y ago
    Network size increases competition to mine blocks faster, leading to demands for higher hash rate, leading to higher power consumption.
    - hollerith 6y ago
      That's not how Bitcoin mining works. A certain amount of bitcoin -- the amount determined by a schedule that was defined before the network became operational -- is given as a mining reward every 10 minutes. The incentives of the individual miners is such that the expenses of the miners (collectively) equals the mining reward -- and the major mining expense is electricity. If the mining reward is cut in half, the electricity consumption of the network is cut in half, too. In contrast, if the rate of transactions changes or the number of miners change, electricity consumption stays the same. (More precisely, the expenses of running the network equals the mining reward plus any transaction fees, and since the blocks are of fixed size, for more transactions to compete for space in the blocks increases transaction fees, but I am guessing that transaction fees are currently a small fraction of the mining reward.)
      - deleted 6y ago
        [deleted]
      - x3n0ph3n3 6y ago
        I think you are _very_ mistaken. > If the mining reward is cut in half, the electricity consumption of the network is cut in half, too. That's not true it all -- there is no difficulty adjustment when the reward is halved. There may be pressure on some miners to stop mining, but that adjustment is not immediate and can also be compensated for by change in the price of bitcoin. > In contrast, if the rate of transactions changes or the number of miners change, electricity consumption stays the same. Given the network is operating at peak transaction rate already, there's not much change here. Neither block size nor the transaction count has a meaningful affect on the computations required to "solve" a block. The merkle tree for the transactions is computed once, but most of computation is finding a nonce, that combined with the rest of the block header, produces a hash with a certain number of leading zeros. Changing the block size or transaction count doesn't meaningfully change electricity consumption.
  - kybernetikos 6y ago
    I think by 'network size' the GP is referring to the network hashrate. For proof of work networks to function securely, the network as a whole must have a much higher computation rate than an attacker. Obviously capabilities increase the whole time, so the bitcoin network needs to be able to adapt - to do this, it adjusts its 'difficulty' approximately every two weeks. The power usage corresponds directly to the difficulty level set by the network. If you add more miners, the difficulty will increase, and power consumption will go up, if miners leave, the difficulty will decrease and power consumption will go down.
Taek 6y ago
Bitcoin is valuable even if adoption never does pick up. It's a money system with certain properties that can't be found anywhere else, and it's a money system that's that's half decent. The existence of Bitcoin forces all other money systems around the world to be at least as good as Bitcoin, or citizens will flee into Bitcoin. Bitcoin adds value simply by existing, even absent serious adoption.
- nmfisher 6y ago
  How many products and services are bought every day with conventional monetary systems? How many products and services are bought every day with Bitcoin? I suspect BTC will have as much impact on conventional currencies as a fly landing on an aircraft carrier.
  - Taek 6y ago
    Bitcoin also spends about as much money as a fly landing on an aircraft carrier. Sorry Argentina, but you just don't use that much electricity in the context of the global economy. Companies like Tesla are buying Bitcoin, not because they intend to transact with Bitcoin but because it gives them protection against inflation within the US economy, and it gives them a stash of money that cannot be forcibly shut down, allowing them to do business even in jurisdictions that don't want them there. If you are looking at just the "products and services" you are missing the forest for the trees.
    - nmfisher 6y ago
      There’s so many things wrong with this comment. Until people start accepting bitcoin for bread, rent and salaries, Tesla most certainly does not have a “stash of money that cannot be forcibly shut down”. It has something that might be able to be exchanged into a local currency to buy those things. What’s more, that stash of bitcoin most certainly could be forcibly shut down at the stroke of a pen. Tesla is a public US company listed on a US stock exchange. If the USA decided tomorrow to criminalise BTC, Tesla would be left with a huge 1.5bn hole in its accounts and a huge number of very pissed off investors. Moreover, if Elbonia doesn’t want Tesla there, how in the hell are Tesla cars going to arrive at ports? How are they going to be registered? How are Tesla going to deploy charging infrastructure? BTC has exactly squat to offer in terms of dealing with jurisdictions that don’t want them there. BTC isn’t some magic wand that lets you operate in a fairy dimension where none of the rules of reality apply.

by bhupy 6y ago

tekromancr 6y ago

Almost, but because of the incentives, the greater the adoption, the more valuable each individual block reward actually is. The more valuable each individual block reward is, the more energy you can afford to spend attempting to mine it.

kybernetikos 6y ago

You can't fit 10,000 transactions in a block on BTC.

michaelscott 6y ago

The power consumption is linked to network size and has nothing to do with the block itself. If anything the marginal power cost is linked to the price of a Bitcoin, as the higher it climbs the more incentive to mine, the greater the competition and therefore the greater the mining difficulty/energy required. The only way to really lower energy consumption is to lower the price I can get for a Bitcoin but with the current economic conditions I don't see that happening anytime soon.

sp332 6y ago
How is power consumption related to network size? I agree that the power consumption of the network is directly related to the value of the bitcoins mined (and I supposed the transaction fee/tip size).
- x3n0ph3n3 6y ago
  Network size increases competition to mine blocks faster, leading to demands for higher hash rate, leading to higher power consumption.
  - hollerith 6y ago
    That's not how Bitcoin mining works. A certain amount of bitcoin -- the amount determined by a schedule that was defined before the network became operational -- is given as a mining reward every 10 minutes. The incentives of the individual miners is such that the expenses of the miners (collectively) equals the mining reward -- and the major mining expense is electricity. If the mining reward is cut in half, the electricity consumption of the network is cut in half, too. In contrast, if the rate of transactions changes or the number of miners change, electricity consumption stays the same. (More precisely, the expenses of running the network equals the mining reward plus any transaction fees, and since the blocks are of fixed size, for more transactions to compete for space in the blocks increases transaction fees, but I am guessing that transaction fees are currently a small fraction of the mining reward.)
    - deleted 6y ago
      [deleted]
    - x3n0ph3n3 6y ago
      I think you are _very_ mistaken. > If the mining reward is cut in half, the electricity consumption of the network is cut in half, too. That's not true it all -- there is no difficulty adjustment when the reward is halved. There may be pressure on some miners to stop mining, but that adjustment is not immediate and can also be compensated for by change in the price of bitcoin. > In contrast, if the rate of transactions changes or the number of miners change, electricity consumption stays the same. Given the network is operating at peak transaction rate already, there's not much change here. Neither block size nor the transaction count has a meaningful affect on the computations required to "solve" a block. The merkle tree for the transactions is computed once, but most of computation is finding a nonce, that combined with the rest of the block header, produces a hash with a certain number of leading zeros. Changing the block size or transaction count doesn't meaningfully change electricity consumption.
- kybernetikos 6y ago
  I think by 'network size' the GP is referring to the network hashrate. For proof of work networks to function securely, the network as a whole must have a much higher computation rate than an attacker. Obviously capabilities increase the whole time, so the bitcoin network needs to be able to adapt - to do this, it adjusts its 'difficulty' approximately every two weeks. The power usage corresponds directly to the difficulty level set by the network. If you add more miners, the difficulty will increase, and power consumption will go up, if miners leave, the difficulty will decrease and power consumption will go down.

Taek 6y ago

Bitcoin is valuable even if adoption never does pick up. It's a money system with certain properties that can't be found anywhere else, and it's a money system that's that's half decent. The existence of Bitcoin forces all other money systems around the world to be at least as good as Bitcoin, or citizens will flee into Bitcoin. Bitcoin adds value simply by existing, even absent serious adoption.

nmfisher 6y ago
How many products and services are bought every day with conventional monetary systems? How many products and services are bought every day with Bitcoin? I suspect BTC will have as much impact on conventional currencies as a fly landing on an aircraft carrier.
- Taek 6y ago
  Bitcoin also spends about as much money as a fly landing on an aircraft carrier. Sorry Argentina, but you just don't use that much electricity in the context of the global economy. Companies like Tesla are buying Bitcoin, not because they intend to transact with Bitcoin but because it gives them protection against inflation within the US economy, and it gives them a stash of money that cannot be forcibly shut down, allowing them to do business even in jurisdictions that don't want them there. If you are looking at just the "products and services" you are missing the forest for the trees.
  - nmfisher 6y ago
    There’s so many things wrong with this comment. Until people start accepting bitcoin for bread, rent and salaries, Tesla most certainly does not have a “stash of money that cannot be forcibly shut down”. It has something that might be able to be exchanged into a local currency to buy those things. What’s more, that stash of bitcoin most certainly could be forcibly shut down at the stroke of a pen. Tesla is a public US company listed on a US stock exchange. If the USA decided tomorrow to criminalise BTC, Tesla would be left with a huge 1.5bn hole in its accounts and a huge number of very pissed off investors. Moreover, if Elbonia doesn’t want Tesla there, how in the hell are Tesla cars going to arrive at ports? How are they going to be registered? How are Tesla going to deploy charging infrastructure? BTC has exactly squat to offer in terms of dealing with jurisdictions that don’t want them there. BTC isn’t some magic wand that lets you operate in a fairy dimension where none of the rules of reality apply.