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I was thinking the other day about Bitcoin using proof of work (which uses energy), which makes it an energy proxy. It therefore seems to make little sense that
by cpswan 13y ago
I was thinking the other day about Bitcoin using proof of work (which uses energy), which makes it an energy proxy. It therefore seems to make little sense that one would pay for energy to be used with energy that has been used. Or is time arbitrage of energy something really useful?
- maxerickson 13y agoThe relationship between bitcoin and energy is not an equality. The energy cost of mining should approximately match the available reward, but that is because miners are adjusting their activity. You wouldn't purchase my heating bills from me...
- fnordfnordfnord 13y agoThe relationship between bitcoin and energy is not an equality. Exactly, technology improvements can and do change the energy used.
- venomsnake 13y agoBitcoin has adaptable difficulty and it will always be very close to the most efficient way to mine them. The only way to decrease total energy is to crash the price of bitcoins or cartel. In both cases the system is already screwed anyway.
- DennisP 13y agoI don't think I'd call Bitcoin an energy proxy, since the energy is used up. A currency that can be redeemed for energy is something different. It makes sense to me, since in principle the amount of currency in circulation could naturally adjust to the size of the economy. To make that work maybe you'd need demurrage, to prevent utilities from printing up kilowatt vouchers for production in the distant future. Since a watt is a watt, you could have as many issuers as energy producers, without worrying about exchange rates, though limitations of the electric grid might force them to be somewhat local.
- sehugg 13y agoThe proof-of-work system helps to secure the blockchain against a centralized attack, so I don't think of it as an energy proxy. More like paying security guards, or like paying for the extra hardware/electricity required to support SSL.