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It's a common misconception that the energy consumed by Bitcoin is proportional to the number of transactions -- it's not. Energy is proportional to price. Ha
by toomim 6y ago
It's a common misconception that the energy consumed by Bitcoin is proportional to the number of transactions -- it's not. Energy is proportional to price.
Hashpower is used to stamp a proof-of-work onto the merkle root of each block in the blockchain. That merkle root is the same size no matter how many transactions are in the block. It takes just as much hashpower to stamp an enormous block as a tiny block.
The only thing that leads to an increasing amount of energy used in mining over time is the increasing reward that miners get from mining blocks. This reward is almost entirely from the block reward created by new blocks, which is currently 6.25 Bitcoins per block, or $306,000 at today's price. Since blocks come out every 10 minutes, that equates to $1,837,000/hr spent on electricity at every hour of the day.
As the value of Bitcoin goes up, this block reward goes up, and the amount of money people spend on electricity goes up. The number of transactions processed contributes very little to the incentive, especially when using a Bitcoin fork like BCH without an arbitrary constraint on the number of transactions per second. If you increase the number of transactions the chain can handle, then you decrease the fee for each transaction, and this lowers the block reward to miners, which lowers the amount of energy that is spent on mining.
Source: myself. I'm a Bitcoin miner: https://toom.im https://toom.im
- kristjansson 6y ago> lowers the amount of energy spent on mining I don’t see how that part follows from the rest. It makes sense that electricity consumed per time overall converges on the block reward plus tx fees per time. Since the reward is so much larger, energy consumption per time scales with price. Checks out. But doesn’t the same apply to BCH? If the tx fees are even lower isn’t the block reward even more dominant, and so energy consumption should track price even more closely for that chain? Also, showing my lack of knowledge about the specifics of the protocol - is the amount of work done to compute each hash really constant in the number of transactions in the block? Or just negligibly different at current tx volumes?