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The energy usage of a PoW scheme is in direct proportion to its usage (transaction fees), block reward and price of the underlying. As such, I don't see that B

The energy usage of a PoW scheme is in direct proportion to its usage (transaction fees), block reward and price of the underlying. As such, I don't see that Bitcoin Cash, Dash or ZCash would be fundamentally more efficient if these factors were to rival Bitcoin, even if parameters such as block size were to change. For the longest time, Ethereum transactions were far cheaper than Bitcoin transactions, but today they rival Bitcoin.

danuker 6y ago
Transaction fees are not just proportional to usage. They are a price set by demand (usage) and supply (block space). Currently Bitcoin limiting the block size to 1MB is artificially lowering supply. Recently, Bitcoin Cash has surpassed Bitcoin in transactions per day: https://bitinfocharts.com/comparison/transactions-btc-bch.html#log&1y https://bitinfocharts.com/comparison/transactions-btc-bch.ht... Their blocks are larger, so there is more room for transactions, so miners are not so well rewarded, so they can afford to waste less electricity in total. Of course, this reduced waste implies reduced security (instead of securing >$700k/h, it's "only" $8.5k/h - https://www.crypto51.app/ https://www.crypto51.app/).
- incrudible 6y ago
  What I'm trying to get at is that all of these factors matter, not just one of these factors in isolation. Ethereum also has larger block size over time, and I'm sure it processes far more transactions than Bitcoin. Suppose that Bitcoin Cash were to increase in price ten-fold, then logically it would make economic sense to burn ten times as much energy to mine it, no matter how many transactions are processed.
  - danuker 6y ago
    You are right. I suppose a fair target to tune would be the cost-of-51%-attack instead of an arbitrary block size or percent fees.
CryptoPunk 6y ago
The energy consumed per transaction to produce the PoW to earn the block subsidy decreases as the number of transactions increases, because the two are independent of each other, with rising transaction volumes not increasing the block subsidy and the associated energy consumed to earn it. Moreover, the energy consumed per transaction to produce the PoW to earn the transaction fee decreases when the transaction fee decreases. So for both of these reasons, a cryptocurrency like Bitcoin Cash, that can process thousands of times more transactions than Bitcoin, has the potential to be orders of magnitude more energy efficient.

danuker 6y ago

Transaction fees are not just proportional to usage. They are a price set by demand (usage) and supply (block space). Currently Bitcoin limiting the block size to 1MB is artificially lowering supply. Recently, Bitcoin Cash has surpassed Bitcoin in transactions per day: https://bitinfocharts.com/comparison/transactions-btc-bch.html#log&1y https://bitinfocharts.com/comparison/transactions-btc-bch.ht... Their blocks are larger, so there is more room for transactions, so miners are not so well rewarded, so they can afford to waste less electricity in total. Of course, this reduced waste implies reduced security (instead of securing >$700k/h, it's "only" $8.5k/h - https://www.crypto51.app/ https://www.crypto51.app/).

incrudible 6y ago
What I'm trying to get at is that all of these factors matter, not just one of these factors in isolation. Ethereum also has larger block size over time, and I'm sure it processes far more transactions than Bitcoin. Suppose that Bitcoin Cash were to increase in price ten-fold, then logically it would make economic sense to burn ten times as much energy to mine it, no matter how many transactions are processed.
- danuker 6y ago
  You are right. I suppose a fair target to tune would be the cost-of-51%-attack instead of an arbitrary block size or percent fees.

CryptoPunk 6y ago

The energy consumed per transaction to produce the PoW to earn the block subsidy decreases as the number of transactions increases, because the two are independent of each other, with rising transaction volumes not increasing the block subsidy and the associated energy consumed to earn it. Moreover, the energy consumed per transaction to produce the PoW to earn the transaction fee decreases when the transaction fee decreases. So for both of these reasons, a cryptocurrency like Bitcoin Cash, that can process thousands of times more transactions than Bitcoin, has the potential to be orders of magnitude more energy efficient.