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There is a misconception that Bitcoin electricity usage is increasing exponentially and uncontrollable. In fact, it is limited by Bitcoin price times Bitcoin is

There is a misconception that Bitcoin electricity usage is increasing exponentially and uncontrollable. In fact, it is limited by Bitcoin price times Bitcoin issuance rate. For example, at current BTC price, electricity usage has an upper limit of $37m per day. If miners spend more than that, their operation becomes unprofitable. In fact, they spend less, because there are also other expenses. From April 2024, the new upper limit will be $18mln/day, if the price remains stable. If Bitcoin price rises in line with it's decreasing issue rate, in 12 years we'll have Bitcoin at $328,000, but the electricity costs will stay same as today. $37m per day is about $1.1B a month. If we divide this by world's population of 8 billion people, we arrive at a figure of 14 cents per month. 14 cents is what you are paying to Visa for your morning croissant in transaction fees. On top of this, you pay a lot of taxes to the government to maintain and secure the money system. Now what are we getting for 14 cents a month? We are getting money that is unforgeable, uninflatable, irreversible, uncensorable, electronic, capable of millions of transactions per second, available to anyone worldwide 24/7/365. We are getting a piece of freedom in a world that is becoming more and more centralized and controlled from above.

fragmede 5y ago
> their operation becomes unprofitable That assumes that everyone needs to spend more than they get in crypto for it to be worth their while. If I had $100, and I gave it to you, and you gave me back $80, that would be a bad deal for me, right? Except if that $100 is "dirty", and the $80 is "clean", that might be worth it to some.
- EVa5I7bHFq9mnYK 5y ago
  It is theoretically possible, but I doubt it really happens at scale. If it were, we'd already had front page articles about it.
Eddy_Viscosity2 5y ago
Did you just divide the bitcoin electric costs by the ENTIRE population of the Earth, as if all 8 billion people are currently using bitcoin???
- EVa5I7bHFq9mnYK 5y ago
  The beauty is, even if everyone started using Bitcoin today, the electricity consumption would stay the same. And it is feasible, with the already functioning Lightning Network (second level network over Bitcoin network).
  - Eddy_Viscosity2 5y ago
    How would billions of new users get bitcoin to start using it if the supply is limited? They would have to buy it from people who already have it, driving the price up and with it the the ceiling on electric costs for profitable mining -- these scale together.
    - EVa5I7bHFq9mnYK 5y ago
      Of course price would increase if everyone uses it, but, technically, high price is not necessary for everyone to use Bitcoin. For rough estimate, there are 12 billion of $20 notes in use, which is $240B, which is 6M Bitcoins. $20 bill comprises the bulk of money circulation. There are more $100 bills, but they are mostly used for savings.
  - psd1 5y ago
    I have invented food pills. They have a whole list of advantages. We'll convert the entire planet over to eating food pills. Everyone's stomachs will atrophy, as well as the practice of farming. But that's ok because the pills are just better, ok? Except that in a decade, some drawback becomes apparent. Blithe assurances are a sure sign of bullshit.
    - EVa5I7bHFq9mnYK 5y ago
      Using the word bullshit is a sure sign of bullshit.
hiq 5y ago
> electricity usage has an upper limit of $37m per day I don't see how you compute such an upper limit given that it depends on the transactions fees. You're talking about the profitability if miners don't mine any transaction, and maybe this used to be a reasonable approximation, but as the block reward halves it will become less and less accurate. The profitability limit can be just as arbitrarily high as the transaction fees. > We are getting money that is unforgeable, uninflatable, irreversible, uncensorable The article convincingly argues that it's not irreversible nor uncensorable given that it's centralized, and that any similar permissionless blockchain would tend towards such a centralization. > capable of millions of transactions per second Are you saying that the 14 cents a month would cover the transaction fees? That's not the case right now with way less transactions, I don't see how that will ever be the case if the number of transactions increase to this number.
- EVa5I7bHFq9mnYK 5y ago
  transaction fees are currently very small percentage of miner's income, and probably will be so for another ~3 halvings. By that time, protocols would evolve so that you won't need a mainnet transaction at all to create a second layer wallet. >> The article convincingly argues that it's not irreversible nor uncensorable Not convincingly at all. Not a single tx has been reverted on BTC network in 13 years (well, except of couple of early bugs that caused network split), maybe you are confusing with some other network. No one is able to prevent a tx from going out, as we just witnessed - FBI wasn't able to revert a $3.6B theft transaction without getting hold of private keys. >> Are you saying that the 14 cents a month would cover the transaction fees? I paid a tx fee once, two years ago, to fund my Satoshi Wallet, and haven't paid another satoshi in tx fees for about a hundred of purchases since then. So I don't see why everyone can't do that. As to the initial funding of the wallet for everyone, I don't see why it can't be done off chain as well in the future.
  - hiq 5y ago
    > Not a single tx has been reverted on BTC network in 13 years (well, except of couple of early bugs that caused network split) The article mentions that the networks tends towards centralization, at which point the guarantees BTC was supposed to provide no longer hold. You can say that the big miners still won't do it for $REASON, but the point stands that it's not irreversible nor uncensorable, due to this centralization. > No one is able to prevent a tx from going out, as we just witnessed - FBI wasn't able to revert a $3.6B theft transaction without getting hold of private keys. The money stolen is not relevant, the budget they were willing to spend to retrieve the funds is. I don't think this was in the billions as you implicitly state. Preventing the transaction from being mined is also completely different from reverting it several blocks after it has been mined. See also my last paragraph in this comment: https://news.ycombinator.com/item?id=30313344 https://news.ycombinator.com/item?id=30313344 > I paid a tx fee once, two years ago, to fund my Satoshi Wallet, and haven't paid another satoshi in tx fees for about a hundred of purchases since then. According to https://en.wikipedia.org/wiki/Lightning_Network#Limitations https://en.wikipedia.org/wiki/Lightning_Network#Limitations you still need a "watchtower" to ensure things won't go wrong, so if you consider everything, it's not completely free. I don't want to guess what the exact price will be because it's a futile exercise (we'll see soon enough if it gains traction), but this suffices to show that you're sweeping some costs under the rug.
daniel-grigg 5y ago
Your claim of $37M is horrifying given in slide 4 they estimate real transactions at 5/min or 7200/day. I’ll leave you to calculate the cost per month (it’s much higher than 14c).

fragmede 5y ago

> their operation becomes unprofitable That assumes that everyone needs to spend more than they get in crypto for it to be worth their while. If I had $100, and I gave it to you, and you gave me back $80, that would be a bad deal for me, right? Except if that $100 is "dirty", and the $80 is "clean", that might be worth it to some.

EVa5I7bHFq9mnYK 5y ago
It is theoretically possible, but I doubt it really happens at scale. If it were, we'd already had front page articles about it.

Eddy_Viscosity2 5y ago

Did you just divide the bitcoin electric costs by the ENTIRE population of the Earth, as if all 8 billion people are currently using bitcoin???

EVa5I7bHFq9mnYK 5y ago
The beauty is, even if everyone started using Bitcoin today, the electricity consumption would stay the same. And it is feasible, with the already functioning Lightning Network (second level network over Bitcoin network).
- Eddy_Viscosity2 5y ago
  How would billions of new users get bitcoin to start using it if the supply is limited? They would have to buy it from people who already have it, driving the price up and with it the the ceiling on electric costs for profitable mining -- these scale together.
  - EVa5I7bHFq9mnYK 5y ago
    Of course price would increase if everyone uses it, but, technically, high price is not necessary for everyone to use Bitcoin. For rough estimate, there are 12 billion of $20 notes in use, which is $240B, which is 6M Bitcoins. $20 bill comprises the bulk of money circulation. There are more $100 bills, but they are mostly used for savings.
- psd1 5y ago
  I have invented food pills. They have a whole list of advantages. We'll convert the entire planet over to eating food pills. Everyone's stomachs will atrophy, as well as the practice of farming. But that's ok because the pills are just better, ok? Except that in a decade, some drawback becomes apparent. Blithe assurances are a sure sign of bullshit.
  - EVa5I7bHFq9mnYK 5y ago
    Using the word bullshit is a sure sign of bullshit.

hiq 5y ago

> electricity usage has an upper limit of $37m per day I don't see how you compute such an upper limit given that it depends on the transactions fees. You're talking about the profitability if miners don't mine any transaction, and maybe this used to be a reasonable approximation, but as the block reward halves it will become less and less accurate. The profitability limit can be just as arbitrarily high as the transaction fees. > We are getting money that is unforgeable, uninflatable, irreversible, uncensorable The article convincingly argues that it's not irreversible nor uncensorable given that it's centralized, and that any similar permissionless blockchain would tend towards such a centralization. > capable of millions of transactions per second Are you saying that the 14 cents a month would cover the transaction fees? That's not the case right now with way less transactions, I don't see how that will ever be the case if the number of transactions increase to this number.

EVa5I7bHFq9mnYK 5y ago
transaction fees are currently very small percentage of miner's income, and probably will be so for another ~3 halvings. By that time, protocols would evolve so that you won't need a mainnet transaction at all to create a second layer wallet. >> The article convincingly argues that it's not irreversible nor uncensorable Not convincingly at all. Not a single tx has been reverted on BTC network in 13 years (well, except of couple of early bugs that caused network split), maybe you are confusing with some other network. No one is able to prevent a tx from going out, as we just witnessed - FBI wasn't able to revert a $3.6B theft transaction without getting hold of private keys. >> Are you saying that the 14 cents a month would cover the transaction fees? I paid a tx fee once, two years ago, to fund my Satoshi Wallet, and haven't paid another satoshi in tx fees for about a hundred of purchases since then. So I don't see why everyone can't do that. As to the initial funding of the wallet for everyone, I don't see why it can't be done off chain as well in the future.
- hiq 5y ago
  > Not a single tx has been reverted on BTC network in 13 years (well, except of couple of early bugs that caused network split) The article mentions that the networks tends towards centralization, at which point the guarantees BTC was supposed to provide no longer hold. You can say that the big miners still won't do it for $REASON, but the point stands that it's not irreversible nor uncensorable, due to this centralization. > No one is able to prevent a tx from going out, as we just witnessed - FBI wasn't able to revert a $3.6B theft transaction without getting hold of private keys. The money stolen is not relevant, the budget they were willing to spend to retrieve the funds is. I don't think this was in the billions as you implicitly state. Preventing the transaction from being mined is also completely different from reverting it several blocks after it has been mined. See also my last paragraph in this comment: https://news.ycombinator.com/item?id=30313344 https://news.ycombinator.com/item?id=30313344 > I paid a tx fee once, two years ago, to fund my Satoshi Wallet, and haven't paid another satoshi in tx fees for about a hundred of purchases since then. According to https://en.wikipedia.org/wiki/Lightning_Network#Limitations https://en.wikipedia.org/wiki/Lightning_Network#Limitations you still need a "watchtower" to ensure things won't go wrong, so if you consider everything, it's not completely free. I don't want to guess what the exact price will be because it's a futile exercise (we'll see soon enough if it gains traction), but this suffices to show that you're sweeping some costs under the rug.

daniel-grigg 5y ago

Your claim of $37M is horrifying given in slide 4 they estimate real transactions at 5/min or 7200/day. I’ll leave you to calculate the cost per month (it’s much higher than 14c).