13 ms·

Elon Musk: Bitcoin's energy usage trend over the past few months is insane

cinntaile 5y ago
The estimated consumption seems to follow a similar trendline as the last few years?
- throwaway4good 5y ago
  It is a function of bitcoin's price and mining reward.
  - cinntaile 5y ago
    That sounds plausible but Musk must have known this when he made Tesla invest in BTC. So why is he now claiming that this is insane when it was expected?
    - throwaway4good 5y ago
      That is a very good question.
    - devmor 5y ago
      Because, thanks to NFTs blowing up with a very negative reaction, the social sphere has suddenly realized how bad proof-of-work crypto actually is for the environment and it's now a hot button issue. tl;dr - He's appealing to popular morals.
    - FuckButtons 5y ago
      Market manipulation.
    - MetaWhirledPeas 5y ago
      You might be giving him too much credit. I realize he's very "with it" but in truth he's probably swamped for time and can't participate in a bunch of message board debates about the pros and cons of crypto. Consequently he probably came to a premature conclusion. We like to think smart people are going to make the right decision every time, but people have their limits.
EGreg 5y ago
I warned about this a while ago. The economics are set up for Bitcoin and Ethereum to eat up most of the electricity in the world, unless their price stop going up. Unfortunately it’s a very reliable feedback loop: https://news.ycombinator.com/item?id=26220992 https://news.ycombinator.com/item?id=26220992
- rmtech 5y ago
  Ethereum is moving to proof-of-stake
  - EGreg 5y ago
    Alright, but even if they do, the original ETH token will be mined. Look at Ethereum Classic. It just recently pumped a lot. Which smart contracts run on it? That's the thing. Read my analysis... it doesn't matter if something better comes along. As long as the tokens are around they can just be more and more scarce and go up in price.
    - olouv 5y ago
      Many people in the field don’t expect that there will be a viable fork this time, basically all defi smart contracts that are now a huge part of ethereum (not the case at the time of classic) would break triggering a cascading chain of liquidations breaking the usability/viability of the chain. However the past has shown that a broken chain can somehow still be valuable due to irrational speculation so we will have to wait and see.
      - delaaxe 5y ago
        That and USDT/USDC on the PoW chain will no longer be supported
  - adhoc32 5y ago
    Proof of work = trust physics to determine what happened. Proof of stake = trust humans to determine what happened. PoW is superior.
sneak 5y ago
Reminder: bitcoin energy use is not related to transaction volume, but mining reward coupled with the price. Bitcoin mining reward halves every ~4 years, eventually falling to 0.
- codewiz 5y ago
  Transaction fees are also paid to miners, and transaction volume pushes fees up. This is entirely by design. Satoshi's original Bitcoin whitepaper reads: "Once a predetermined number of coins have entered circulation, the incentive can transition entirely to transaction fees and be completely inflation free."
  - sneak 5y ago
    Yes, but transaction volume is essentially fixed at this point.
    - codewiz 5y ago
      I misspoke: transaction demand pushes fees up.
      - sneak 5y ago
        I could be wrong, but I bet we've already seen within half an order of magnitude peak btc transaction demand. Between competition (for example, we are just scratching the surface of eth tx demand, and high throughput competitors are out now) and L2 (ifwhen it ever delivers), I just can't ever see btc block bandwidth being priced 10x its previous peaks.
    - codewiz 5y ago
      Transaction volume might also increase slightly with a number of planned improvements: https://bitcoinmagazine.com/technical/taproot-coming-what-it-and-how-it-will-benefit-bitcoin https://bitcoinmagazine.com/technical/taproot-coming-what-it... The Taproot upgrade is already in the process of being rolled out to the Bitcoin mainnet with a soft fork: https://taprootactivation.com/ https://taprootactivation.com/ Arguably, the Bitcoin scalability efforts have been progressing too slowly. Second generation blockchain designs such as Ethereum and Avalanche are going to dethrone Bitcoin at some point.
crypot 5y ago
The cost to secure the network is a function of the value of the network. So far, the more valuable the network becomes the more it costs to secure it. What technology could break this relationship so that the cost of securing the network decreases as the value of the network increases?
- tinalumfoil 5y ago
  > the more valuable the network becomes the more it costs to secure it I'm not sure you need to completely break this relationship, just make it less linear. If I want to go from securing something against amateurs to securing it against governments I might go from 128 to 1024 bit encryption - at roughly 8x the cost to secure. But if an adversary has to use some form of brute force to crack it, they have to do 2^(1024 - 128) or about 10^70 times the work, so it's a lot more than 8x the security. Obviously the above doesn't apply to Proof of Work, which seemingly require the relationship to be linear. Maybe Proof of Stake might get us in the right direction.
- tarsinge 5y ago
  Proof of stake
libertine 5y ago
I don't think this is good for Tesla, not because of BTC, or the crypto market, but because of their customers, potential customers and fans. In the end it just looks like a poorly thought idea, that in consequence made some people buy into that idea (some literally). Don't get me wrong, everyone should be responsible for themselves, and Tesla can do what ever they want to, but it does make you wonder: what kind of commitments will Tesla suddenly back from? Was this just a gag? Because it didn't look like so, in fact it sounded quite serious and seemed like a stance? Vision and mission aside, turning Tesla into a company that has erratic behavior doesn't inspire confidence to the consumer... one thing it's missing tight deadlines, other thing is product flaws due to novelty, but this is just an apparent act of randomness that they're trying to justify with something.
- MetaWhirledPeas 5y ago
  I'm thrilled at the decision. There are things I like and dislike about the Muskiverse, and the decision to promote Bitcoin was always a sketchy one for me. What this new decision reinforces, to me, is that Musk is able to admit a mistake and do a 180. That is very good.
  - libertine 5y ago
    >What this new decision reinforces, to me, is that Musk is able to admit a mistake and do a 180. That is very good. I can accept that, yet doesn't take from the fact that it was poorly thought... it lasted what, 3 months? I perceive them as the leaders of EV innovation, and I think their actions were in line with that, and I thought they promoted something other then BTC when they took the stance - Bitcoin just happened to be the "gold standard". Now they back tracked showing concern for the type of energy consumption, and are looking into other cryptos that are more energy efficient, but are not dumping BTC, because maybe if BTC goes greener it'll be cool again... are they selling EVs or are they into speculative trading?
  - heywherelogingo 5y ago
    You think Musk hadn't thought a few months ahead?
zero_deg_kevin 5y ago
Are we still pretending that EM hasn't been openly using the assets of a publicly-traded company to manipulate cryptocurrency markets?
- kordlessagain 5y ago
  Are we still pretending the richest man in the world matters?
- nopzor 5y ago
  he is doing that to make the publicy-traded company more profitable, for his shareholders. what exactly is the problem here? how is he 'manipulating' the cryto-currency markets? yes, a lot of people pay attention to what he says, but how is that manipulation?

The estimated consumption seems to follow a similar trendline as the last few years?

throwaway4good 5y ago
It is a function of bitcoin's price and mining reward.
- cinntaile 5y ago
  That sounds plausible but Musk must have known this when he made Tesla invest in BTC. So why is he now claiming that this is insane when it was expected?
  - throwaway4good 5y ago
    That is a very good question.
  - devmor 5y ago
    Because, thanks to NFTs blowing up with a very negative reaction, the social sphere has suddenly realized how bad proof-of-work crypto actually is for the environment and it's now a hot button issue. tl;dr - He's appealing to popular morals.
  - FuckButtons 5y ago
    Market manipulation.
  - MetaWhirledPeas 5y ago
    You might be giving him too much credit. I realize he's very "with it" but in truth he's probably swamped for time and can't participate in a bunch of message board debates about the pros and cons of crypto. Consequently he probably came to a premature conclusion. We like to think smart people are going to make the right decision every time, but people have their limits.

I warned about this a while ago. The economics are set up for Bitcoin and Ethereum to eat up most of the electricity in the world, unless their price stop going up. Unfortunately it’s a very reliable feedback loop: https://news.ycombinator.com/item?id=26220992 https://news.ycombinator.com/item?id=26220992

rmtech 5y ago
Ethereum is moving to proof-of-stake
- EGreg 5y ago
  Alright, but even if they do, the original ETH token will be mined. Look at Ethereum Classic. It just recently pumped a lot. Which smart contracts run on it? That's the thing. Read my analysis... it doesn't matter if something better comes along. As long as the tokens are around they can just be more and more scarce and go up in price.
  - olouv 5y ago
    Many people in the field don’t expect that there will be a viable fork this time, basically all defi smart contracts that are now a huge part of ethereum (not the case at the time of classic) would break triggering a cascading chain of liquidations breaking the usability/viability of the chain. However the past has shown that a broken chain can somehow still be valuable due to irrational speculation so we will have to wait and see.
    - delaaxe 5y ago
      That and USDT/USDC on the PoW chain will no longer be supported
- adhoc32 5y ago
  Proof of work = trust physics to determine what happened. Proof of stake = trust humans to determine what happened. PoW is superior.

sneak 5y ago

Reminder: bitcoin energy use is not related to transaction volume, but mining reward coupled with the price. Bitcoin mining reward halves every ~4 years, eventually falling to 0.

codewiz 5y ago
Transaction fees are also paid to miners, and transaction volume pushes fees up. This is entirely by design. Satoshi's original Bitcoin whitepaper reads: "Once a predetermined number of coins have entered circulation, the incentive can transition entirely to transaction fees and be completely inflation free."
- sneak 5y ago
  Yes, but transaction volume is essentially fixed at this point.
  - codewiz 5y ago
    I misspoke: transaction demand pushes fees up.
    - sneak 5y ago
      I could be wrong, but I bet we've already seen within half an order of magnitude peak btc transaction demand. Between competition (for example, we are just scratching the surface of eth tx demand, and high throughput competitors are out now) and L2 (ifwhen it ever delivers), I just can't ever see btc block bandwidth being priced 10x its previous peaks.
  - codewiz 5y ago
    Transaction volume might also increase slightly with a number of planned improvements: https://bitcoinmagazine.com/technical/taproot-coming-what-it-and-how-it-will-benefit-bitcoin https://bitcoinmagazine.com/technical/taproot-coming-what-it... The Taproot upgrade is already in the process of being rolled out to the Bitcoin mainnet with a soft fork: https://taprootactivation.com/ https://taprootactivation.com/ Arguably, the Bitcoin scalability efforts have been progressing too slowly. Second generation blockchain designs such as Ethereum and Avalanche are going to dethrone Bitcoin at some point.

crypot 5y ago

The cost to secure the network is a function of the value of the network. So far, the more valuable the network becomes the more it costs to secure it. What technology could break this relationship so that the cost of securing the network decreases as the value of the network increases?

tinalumfoil 5y ago
> the more valuable the network becomes the more it costs to secure it I'm not sure you need to completely break this relationship, just make it less linear. If I want to go from securing something against amateurs to securing it against governments I might go from 128 to 1024 bit encryption - at roughly 8x the cost to secure. But if an adversary has to use some form of brute force to crack it, they have to do 2^(1024 - 128) or about 10^70 times the work, so it's a lot more than 8x the security. Obviously the above doesn't apply to Proof of Work, which seemingly require the relationship to be linear. Maybe Proof of Stake might get us in the right direction.
tarsinge 5y ago
Proof of stake

libertine 5y ago

I don't think this is good for Tesla, not because of BTC, or the crypto market, but because of their customers, potential customers and fans. In the end it just looks like a poorly thought idea, that in consequence made some people buy into that idea (some literally). Don't get me wrong, everyone should be responsible for themselves, and Tesla can do what ever they want to, but it does make you wonder: what kind of commitments will Tesla suddenly back from? Was this just a gag? Because it didn't look like so, in fact it sounded quite serious and seemed like a stance? Vision and mission aside, turning Tesla into a company that has erratic behavior doesn't inspire confidence to the consumer... one thing it's missing tight deadlines, other thing is product flaws due to novelty, but this is just an apparent act of randomness that they're trying to justify with something.

MetaWhirledPeas 5y ago
I'm thrilled at the decision. There are things I like and dislike about the Muskiverse, and the decision to promote Bitcoin was always a sketchy one for me. What this new decision reinforces, to me, is that Musk is able to admit a mistake and do a 180. That is very good.
- libertine 5y ago
  >What this new decision reinforces, to me, is that Musk is able to admit a mistake and do a 180. That is very good. I can accept that, yet doesn't take from the fact that it was poorly thought... it lasted what, 3 months? I perceive them as the leaders of EV innovation, and I think their actions were in line with that, and I thought they promoted something other then BTC when they took the stance - Bitcoin just happened to be the "gold standard". Now they back tracked showing concern for the type of energy consumption, and are looking into other cryptos that are more energy efficient, but are not dumping BTC, because maybe if BTC goes greener it'll be cool again... are they selling EVs or are they into speculative trading?
- heywherelogingo 5y ago
  You think Musk hadn't thought a few months ahead?

zero_deg_kevin 5y ago

Are we still pretending that EM hasn't been openly using the assets of a publicly-traded company to manipulate cryptocurrency markets?

kordlessagain 5y ago
Are we still pretending the richest man in the world matters?
nopzor 5y ago
he is doing that to make the publicy-traded company more profitable, for his shareholders. what exactly is the problem here? how is he 'manipulating' the cryto-currency markets? yes, a lot of people pay attention to what he says, but how is that manipulation?