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The hashrate is an input into the difficulty calibration but not the energy consumed. Energy consumption is not an input that could be considered by the network
by wyldfire 5y ago
The hashrate is an input into the difficulty calibration but not the energy consumed. Energy consumption is not an input that could be considered by the network because it's not observed globally (or even locally, really).
EDIT: the equilibrium determining whether and how much capital to invest in hashing equipment is not related to 'difficulty' -- it's a human economic factor that considers difficulty as an input.
- mistrial9 5y ago> The hashrate is an input into the difficulty calibration but not the energy consumed my understanding is that this is correct - others are introducing "cost of electricity" in an economics statement, not the math of difficulty itself
- ouid 5y agoEnergy consumption determines the cost, whereas the benefit is determined by the value of a bitcoin, and the demand for on chain transactions. Cost will always approach benefit.
- adwn 5y agoAny increase in power efficiency will lead to lower operating costs, which will lead to a higher hashrate, which will lead to an adjustment of the mining difficulty.