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The point about Bitcoin in particular is that it is deliberately consuming vast amounts of computing power. The mathematics behind the individual transactions

The point about Bitcoin in particular is that it is deliberately consuming vast amounts of computing power. The mathematics behind the individual transactions and ledger maintenance are relatively simple. Getting computers to do this part requires almost no effort. It's the deliberate 'find a needle in a haystack' part of the protocol (which is there to ratelimit the creation of bitcoins) that wastes all of the energy. The fact that this needle-finding task is deliberately difficult, wasteful and time-consuming is the horrific part.

celticninja 12y ago
It's only wasteful if there is a better alternative, which there isn't so it's not. If you don't understand bitcoin it is easy to make the mistake that the electricity is just used to generate bitcoins, however it is also used to secure an international low cost payment network.
- mpyne 12y ago
  > secure an international low cost payment network That's something which is actually handled fine in fiat, believe it or not. Nor is Bitcoin "low cost": Even with the price in the dumps recently a Bitcoin transaction still averages about $10 per transaction. Nor can Bitcoin feasibly handle international commerce, given that it's still capped in theory to 7 transactions per second, and in practice to 2-3 transactions per second, and this total capacity also has to support non-remittance transfers such as the normal exchange hackings (like BTER today) and SatoshiDice (which can take up about half of all Bitcoin protocol capacity on some days).
  - unabridged 12y ago
    >a Bitcoin transaction still averages about $10 per transaction. How does this make it not low cost? Transferring that $10 still only costs $.02 >capped in theory to 7 transactions per second Not 7 transactions but 7 settlements per second, which clear in under 60 minutes. You can have as many binding transactions per second as you want off the chain.
    - inoop 12y ago
      > How does this make it not low cost? Transferring that $10 still only costs $.02 Assuming max TPS rate of 3tps, a 10-minute block will contain 3 * 60 * 10 = 1800 transactions. Each block generates 25btc, which is equivalent $6125 at the current $245 price. Each transaction therefore costs $6125 / 1800 = $3.40. Of this only a small amount is paid for the by the person who creates the transaction, the rest of paid for by those who hold Bitcoin.
      - mpyne 12y ago
        > Of this only a small amount is paid for the by the person who creates the transaction, the rest of paid for by those who hold Bitcoin. I always find it ironic that the illusion of low fees per transaction in Bitcoin is subsidized by the ongoing inflation of the money supply. Apparently inflation is acceptable when it helps evangelize the product you're trying to sell, but it's not acceptable monetary policy in any other situation.
    - mpyne 12y ago
      > Not 7 transactions but 7 settlements per second, which clear in under 60 minutes. You can have as many binding transactions per second as you want off the chain. If you're willing to engage in transactions off-chain then you might as well use PayPal or other fiat. The blockchain and the protocol surrounding its maintenance is central to Bitcoin and its philosophy, it's not merely some 'nice-to-have' feature that should be jettisoned as soon as it becomes inconvenient. After all, the blockchain is the one and only authoritative Bitcoin ledger, everything else in Bitcoin is an IOU, no matter how sensible it might seem, which is why Bitcoin itself will reject a transaction if it's not included into a mined block in time. And either way, way to ignore the in-practice 2-3 transaction per second limit.
  - atom-morgan 12y ago
    > That's something which is actually handled fine in fiat, believe it or not How? Are we comparing transaction fees?
  - A_COMPUTER 12y ago
    >That's something which is actually handled fine in fiat, believe it or not. Not if you're Wikileaks. Bitcoin was (probably) built to solve the kind of problems they had getting money transferred to them. there's a cost associated with a low-trust network.
    - ufo 12y ago
      Since bitcoin has a public ledger, its possible to envision a system where the authorities punish anyone that sends bitcoin to addresses controlled by wikileaks or accepts bitcoins from them.
      - thanksgiving 12y ago
        Can the authorities force me to confirm or deny my control of any given bitcoin wallet though?
        ufo 12y ago
        They can use "rubber hose" crypto to interfere with your bitcoin usage. The point is that the lack of anonymity is a bad thing when you are facing against a powerful adversary.
- ufo 12y ago
  Its not low cost if you need to emit tons of CO2 to maintain the network though. The issue with bitcoin when it comes to cost is that unlike traditional centralized systems, cheaper energy or more efficient computers don't translate to making it cheaper to run the network. What happens is that miners get to afford more hashes per second and the overall hashrate goes up, with the mining difficulty also going up to compensate, making mining even more wasteful.
- EGreg 12y ago
  "It's only wasteful if there is a better alternative, which there isn't so it's not." The alternative is to get by without it. There are fiat currencies, proof of stake and much more. Capitalism of any kind always seeks to exploit externalities. The cost of producing electricity is currently not reflective of the true future cost of the pollution. That is the externality. Every metric in a capitalistic system is designed to reward the exploitation of externalities.
lifeformed 12y ago
But that's what makes it work. The energy is required. Just because it doesn't use the energy in some cool mechanical way doesn't mean it's being wasted. If you look at it as a black box, then it's a perfectly reasonable expense. You could look at a space heater and say: wow, it just wastes all this electricity, deliberately causing resistive elements to heat up. Well, of course, the heat is intended. With bitcoins, the extra calculations are a part of what makes everything work.
- kordless 12y ago
  Consensus can be achieved with much lower power consumption. Don't blindly accept a solution just because you agree with the outcome.

celticninja 12y ago

It's only wasteful if there is a better alternative, which there isn't so it's not. If you don't understand bitcoin it is easy to make the mistake that the electricity is just used to generate bitcoins, however it is also used to secure an international low cost payment network.

mpyne 12y ago
> secure an international low cost payment network That's something which is actually handled fine in fiat, believe it or not. Nor is Bitcoin "low cost": Even with the price in the dumps recently a Bitcoin transaction still averages about $10 per transaction. Nor can Bitcoin feasibly handle international commerce, given that it's still capped in theory to 7 transactions per second, and in practice to 2-3 transactions per second, and this total capacity also has to support non-remittance transfers such as the normal exchange hackings (like BTER today) and SatoshiDice (which can take up about half of all Bitcoin protocol capacity on some days).
- unabridged 12y ago
  >a Bitcoin transaction still averages about $10 per transaction. How does this make it not low cost? Transferring that $10 still only costs $.02 >capped in theory to 7 transactions per second Not 7 transactions but 7 settlements per second, which clear in under 60 minutes. You can have as many binding transactions per second as you want off the chain.
  - inoop 12y ago
    > How does this make it not low cost? Transferring that $10 still only costs $.02 Assuming max TPS rate of 3tps, a 10-minute block will contain 3 * 60 * 10 = 1800 transactions. Each block generates 25btc, which is equivalent $6125 at the current $245 price. Each transaction therefore costs $6125 / 1800 = $3.40. Of this only a small amount is paid for the by the person who creates the transaction, the rest of paid for by those who hold Bitcoin.
    - mpyne 12y ago
      > Of this only a small amount is paid for the by the person who creates the transaction, the rest of paid for by those who hold Bitcoin. I always find it ironic that the illusion of low fees per transaction in Bitcoin is subsidized by the ongoing inflation of the money supply. Apparently inflation is acceptable when it helps evangelize the product you're trying to sell, but it's not acceptable monetary policy in any other situation.
  - mpyne 12y ago
    > Not 7 transactions but 7 settlements per second, which clear in under 60 minutes. You can have as many binding transactions per second as you want off the chain. If you're willing to engage in transactions off-chain then you might as well use PayPal or other fiat. The blockchain and the protocol surrounding its maintenance is central to Bitcoin and its philosophy, it's not merely some 'nice-to-have' feature that should be jettisoned as soon as it becomes inconvenient. After all, the blockchain is the one and only authoritative Bitcoin ledger, everything else in Bitcoin is an IOU, no matter how sensible it might seem, which is why Bitcoin itself will reject a transaction if it's not included into a mined block in time. And either way, way to ignore the in-practice 2-3 transaction per second limit.
- atom-morgan 12y ago
  > That's something which is actually handled fine in fiat, believe it or not How? Are we comparing transaction fees?
- A_COMPUTER 12y ago
  >That's something which is actually handled fine in fiat, believe it or not. Not if you're Wikileaks. Bitcoin was (probably) built to solve the kind of problems they had getting money transferred to them. there's a cost associated with a low-trust network.
  - ufo 12y ago
    Since bitcoin has a public ledger, its possible to envision a system where the authorities punish anyone that sends bitcoin to addresses controlled by wikileaks or accepts bitcoins from them.
    - thanksgiving 12y ago
      Can the authorities force me to confirm or deny my control of any given bitcoin wallet though?
      - ufo 12y ago
        They can use "rubber hose" crypto to interfere with your bitcoin usage. The point is that the lack of anonymity is a bad thing when you are facing against a powerful adversary.
ufo 12y ago
Its not low cost if you need to emit tons of CO2 to maintain the network though. The issue with bitcoin when it comes to cost is that unlike traditional centralized systems, cheaper energy or more efficient computers don't translate to making it cheaper to run the network. What happens is that miners get to afford more hashes per second and the overall hashrate goes up, with the mining difficulty also going up to compensate, making mining even more wasteful.
EGreg 12y ago
"It's only wasteful if there is a better alternative, which there isn't so it's not." The alternative is to get by without it. There are fiat currencies, proof of stake and much more. Capitalism of any kind always seeks to exploit externalities. The cost of producing electricity is currently not reflective of the true future cost of the pollution. That is the externality. Every metric in a capitalistic system is designed to reward the exploitation of externalities.

lifeformed 12y ago

But that's what makes it work. The energy is required. Just because it doesn't use the energy in some cool mechanical way doesn't mean it's being wasted. If you look at it as a black box, then it's a perfectly reasonable expense. You could look at a space heater and say: wow, it just wastes all this electricity, deliberately causing resistive elements to heat up. Well, of course, the heat is intended. With bitcoins, the extra calculations are a part of what makes everything work.

kordless 12y ago
Consensus can be achieved with much lower power consumption. Don't blindly accept a solution just because you agree with the outcome.