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This is almost a half decent article. And I think it's really valuable to point out we should revisit the energy usage discussion about bitcoin. The key thing

This is almost a half decent article. And I think it's really valuable to point out we should revisit the energy usage discussion about bitcoin. The key thing to understand basically is that energy usage of bitcoin has a weird distribution over time[1]. Between June 2017 and June 2018 energy consumption of Bitcoin quadrupled. So at that point it was a reasonable thing to say "Oh wow, bitcoin is using tonnes of energy this is worrying". But then the consumption stayed flat for about 3 years. Now, it's reasonable to suggest that the reason that this trend happened is that essentially the energy consumption follows the value of BTC. It's true to say that at the scale of other currencies, it looks unlikely that BTC mining will consume a large percentage of electricity consumption. It could stay in low single digit percentages even if it's used widely. But there's something else to think about. The adoption of bitcoin isn't just about the value of bitcoin, it's about using it for transactions. So let's look at the number of bitcoin transactions per day[2]. Looking at that I'm not sure I would describe bitcoin as efficient - the blockchain is handling about 300k transactions per day. Visa processes hundreds of millions. You have essentially a fixed number of transactions that is determined by the algorithm, since the block size limit is roughly 4MB and you're only going to have 1 block per 10 minutes. So in terms of actually handling transactions, Bitcoin seems ridiculously inefficient. Actually using the blockchain would result in a bidding war, and the implications of that are very messy - driving up the price would incentivize more miners which would drive up energy consumption, this looks highly likely to cause a massive speculative bubble whose side effect is massive energy consumption. But The reality is that the adoption of Bitcoin has been more about moving away from the blockchain than anything else. The vast majority of consumer activity is off-chain. Which begs the question what the hell are we doing in the first place? [1]:https://digiconomist.net/bitcoin-energy-consumption https://digiconomist.net/bitcoin-energy-consumption [2]:https://www.blockchain.com/charts/n-transactions https://www.blockchain.com/charts/n-transactions

ZPE42 5y ago
jdthedisciple 5y ago
You are making points that were directly addressed in this well-written article ... sorry to ask but did you actually read it fully?
ephbit 5y ago
> So in terms of actually handling transactions, Bitcoin seems ridiculously inefficient. Actually using the blockchain would result in a bidding war, and the implications of that are very messy - driving up the price would incentivize more miners which would drive up energy consumption, this looks highly likely to cause a massive speculative bubble whose side effect is massive energy consumption. Bitcoin itself has indeed a rather limited capacity of transactions per time unit. And people discussing/developing bitcoin have been well aware of this right from the very beginning. (You can dig up old discussions). It is everything but a new finding. So people have long been looking for solutions. And they came up with: https://en.wikipedia.org/wiki/Lightning_Network https://en.wikipedia.org/wiki/Lightning_Network AFAIK Lightning Network has yet to prove that it can be a stable and reliable system over many years. But it appears to be a promising approach that could solve the problem of bitcoin's low transaction capacity. Quoting from the OP article: > Section: Scaling By Layers and the “Cost Per Transaction” Fallacy > With Lightning, two people can open a channel with each other using a base layer transaction, and then send any number of instant transactions between each other. Days, weeks, months, or years later (whenever they want to), they can close that channel with a second base layer transaction. That means dozens, hundreds, or thousands of mini-transactions can be combined into two base layer transactions. It’s like keeping a bar tab open and settling at the end of the night, or the end of the month, except it doesn’t rely on trust but instead relies on programmed smart contracts that ensure the bar tab is settled.

ZPE42 5y ago

jdthedisciple 5y ago

You are making points that were directly addressed in this well-written article ... sorry to ask but did you actually read it fully?

ephbit 5y ago

> So in terms of actually handling transactions, Bitcoin seems ridiculously inefficient. Actually using the blockchain would result in a bidding war, and the implications of that are very messy - driving up the price would incentivize more miners which would drive up energy consumption, this looks highly likely to cause a massive speculative bubble whose side effect is massive energy consumption. Bitcoin itself has indeed a rather limited capacity of transactions per time unit. And people discussing/developing bitcoin have been well aware of this right from the very beginning. (You can dig up old discussions). It is everything but a new finding. So people have long been looking for solutions. And they came up with: https://en.wikipedia.org/wiki/Lightning_Network https://en.wikipedia.org/wiki/Lightning_Network AFAIK Lightning Network has yet to prove that it can be a stable and reliable system over many years. But it appears to be a promising approach that could solve the problem of bitcoin's low transaction capacity. Quoting from the OP article: > Section: Scaling By Layers and the “Cost Per Transaction” Fallacy > With Lightning, two people can open a channel with each other using a base layer transaction, and then send any number of instant transactions between each other. Days, weeks, months, or years later (whenever they want to), they can close that channel with a second base layer transaction. That means dozens, hundreds, or thousands of mini-transactions can be combined into two base layer transactions. It’s like keeping a bar tab open and settling at the end of the night, or the end of the month, except it doesn’t rely on trust but instead relies on programmed smart contracts that ensure the bar tab is settled.