3 ms·

> Bitcoin ... is still likely much cheaper than the banking system (depending on how you measure) I've seen this argued in articles about Bitcoin's energy usag

by wodow 6y ago

> Bitcoin ... is still likely much cheaper than the banking system (depending on how you measure) I've seen this argued in articles about Bitcoin's energy usage, but not a thorough analysis (either way). Has someone written one?

lucb1e 6y ago
Well it's rather obviously false. Even if there are no miners at all (e.g. pretend the difficulty was fixed at a trivial value), the only way to know whether someone really has the coins they are paying with is to download all transactions that lead to this public key having a certain value. Even with blockchain checkpoints, you'd be hard-pressed to make this use less power than a very badly designed centralized service -- unless you use some form of centralization and defeat the purpose. Comparing transactions is one way of measuring it, but I can't fault the proponents for saying it's a bad analogy. The number of transactions is indeed quite unrelated to the current power draw. But it's not hard to see that even the transaction system without the mining is already less efficient than a few database servers per bank for each bank in the world. Now, Bitcoin doesn't have to provide power to people operating phones for customer support and other things that people expect from their bank, so in that sense you save a bit, but then there are still developers working on the bitcoin ecosystem, and there's this minor issue called miners that also use a small amount of power on top of it all.
- wodow 6y ago
  For it to be "obviously false" you seem to be assuming that the comparison in energy use should be between the Bitcoin network (miners and all) and bank infrastructure ("a few database servers per bank" plus "people operating phones ... and other things"), whereas I think that the OP (and others) believe the comparison should be between Bitcoin-the-currency (still miners and all) and USD-the-currency (many dependencies!). That's much harder to cost and argue which is why I'd like to see a serious analysis on this I realise that using the phrase "the banking system", as the quote does, makes it ambiguous.

by wodow 6y ago

lucb1e 6y ago

Well it's rather obviously false. Even if there are no miners at all (e.g. pretend the difficulty was fixed at a trivial value), the only way to know whether someone really has the coins they are paying with is to download all transactions that lead to this public key having a certain value. Even with blockchain checkpoints, you'd be hard-pressed to make this use less power than a very badly designed centralized service -- unless you use some form of centralization and defeat the purpose. Comparing transactions is one way of measuring it, but I can't fault the proponents for saying it's a bad analogy. The number of transactions is indeed quite unrelated to the current power draw. But it's not hard to see that even the transaction system without the mining is already less efficient than a few database servers per bank for each bank in the world. Now, Bitcoin doesn't have to provide power to people operating phones for customer support and other things that people expect from their bank, so in that sense you save a bit, but then there are still developers working on the bitcoin ecosystem, and there's this minor issue called miners that also use a small amount of power on top of it all.

wodow 6y ago
For it to be "obviously false" you seem to be assuming that the comparison in energy use should be between the Bitcoin network (miners and all) and bank infrastructure ("a few database servers per bank" plus "people operating phones ... and other things"), whereas I think that the OP (and others) believe the comparison should be between Bitcoin-the-currency (still miners and all) and USD-the-currency (many dependencies!). That's much harder to cost and argue which is why I'd like to see a serious analysis on this I realise that using the phrase "the banking system", as the quote does, makes it ambiguous.