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The price of bitcoin determines how miners get paid, which determines how much energy they can (and rationally should) spend on mining. This news appears to ha

The price of bitcoin determines how miners get paid, which determines how much energy they can (and rationally should) spend on mining. This news appears to have spiked the price of Bitcoin. Presumably, if El Salvador actually implements this policy and starts using Bitcoin that would also increase demand for Bitcoin and increase its price. Additionally, a full bitcoin block with high fees pays for more mining expenditure than an empty one. So if there is high demand for block space, that also can increase mining energy usage.

la_fayette 5y ago
As they use lightning network the reasoning that there will be high demand for block space is not a valid assumption. Theoretically, it is possible that the government of el salvador is doing a single transaction on the blockchain as channel funding and sends bitcoin via lightning to 6,4 million people from el salvador from that channel without touching the blockchain...
- rspeele 5y ago
  The main impact is still Bitcoin price. Anything that makes Bitcoin's price go up makes the mining energy usage go up too. The fees are just a bonus. But anyway: 1. A transaction creating a channel factory for 6.4 million different keyholders would be too large to fit in a block. 2. 6.4 million users on LN would be a great target for flood and loot[0]. [0]https://medium.com/blockchains-huji/flood-loot-a-systemic-attack-on-the-lightning-network-5c3dac7bba24 https://medium.com/blockchains-huji/flood-loot-a-systemic-at...
- loup-vaillant 5y ago
  Block space isn't the point. The price of a Bitcoin is. Raise the price, and mining will naturally spend more energy on it. Therefore, anything that raises the price of Bitcoin contributes to Global Warming.
  - anonporridge 5y ago
    Price of bitcoin * total block reward (new coins + fees) The total value of the miner reward does increase with price, but because of halvings every 210,000 blocks it's a slower rate than the price increases on its own. Note here, https://www.blockchain.com/charts/miners-revenue https://www.blockchain.com/charts/miners-revenue, that the current miner reward (in USD) is currently lower than it was at the peak of the 2017 bull run, despite the unit price being approximately double.

la_fayette 5y ago

As they use lightning network the reasoning that there will be high demand for block space is not a valid assumption. Theoretically, it is possible that the government of el salvador is doing a single transaction on the blockchain as channel funding and sends bitcoin via lightning to 6,4 million people from el salvador from that channel without touching the blockchain...

rspeele 5y ago
The main impact is still Bitcoin price. Anything that makes Bitcoin's price go up makes the mining energy usage go up too. The fees are just a bonus. But anyway: 1. A transaction creating a channel factory for 6.4 million different keyholders would be too large to fit in a block. 2. 6.4 million users on LN would be a great target for flood and loot[0]. [0]https://medium.com/blockchains-huji/flood-loot-a-systemic-attack-on-the-lightning-network-5c3dac7bba24 https://medium.com/blockchains-huji/flood-loot-a-systemic-at...
loup-vaillant 5y ago
Block space isn't the point. The price of a Bitcoin is. Raise the price, and mining will naturally spend more energy on it. Therefore, anything that raises the price of Bitcoin contributes to Global Warming.
- anonporridge 5y ago
  Price of bitcoin * total block reward (new coins + fees) The total value of the miner reward does increase with price, but because of halvings every 210,000 blocks it's a slower rate than the price increases on its own. Note here, https://www.blockchain.com/charts/miners-revenue https://www.blockchain.com/charts/miners-revenue, that the current miner reward (in USD) is currently lower than it was at the peak of the 2017 bull run, despite the unit price being approximately double.