Topic: . - page 8. (Read 24764 times)

I fixed my typo

True, but power in Iceland is still $0.043 per KWHR

Value of BTC may go up, but mining reward is definitely going down every 4 years.

What is the cost of using fiat? I see inflation as a hidden tax equivalent to the amount of money being printed. I lean toward Austrian economics though. If you have a different economic philosophy, we will probably never agree on the cost of using fiat. But here is my take on it: If the USA prints 10^12 dollars per year, then this would be equivalent to 10^13 KWHR (at $0.10/KWHR) per year. This is certainly more than: from your OP statement thread in your signature.

I read part of that thread and my assuptions could actually make things worse. Mining would be done in the areas of the world where energy is the cheapest. At $0.05 per KWHR, then your 7% would become closer to 14%. But that would decrease over the years as the mining reward keeps halving. But even at 14% of world wide energy usage, it seems to me that the cost of Bitcoin would still be less than the cost of using fiat currency.

BTW, I don't think that Bitcoin (or any other cryptocurrency) will ever completely replace fiat currency. I spend a lot of time in Kenya with my youngest wife who uses M-Pesa. M-Pesa is everywhere, you can't walk a block on a business street without seeing a couple signs. She uses it to send money to her parents via text on her phone. She uses it to pay her electric bill. We were in a matatu going past the electric company main office and she was making fun of all the old people (younger than me...but beside the point  ) queing up to pay their electric bill instead of using M-Pesa. And everyone in Kenya (even if they sleep in a cardboard box) has at least one cell phone. One day, she wanted to stop for a coke and I mentioned that I hadn't brought my wallet and she had no money. No problem she said, stopped at the next M-Pesa sign and converted some of her M-Pesa on her phone to 500 shillings. The point being is that Kenyans are already using an ecurrency for all sorts of things, but they don't use it for small transactions. Fiat currency is simply faster and easier.

What I do think that Bitcoin will do for fiat currency is force governments to stop inflating it so much. There will be a balance between slightly deflationary Bitcoin and slightly inflationary fiat currency. When a government starts inflating fiat to much, people will just use less of it (and at a much higher velocity) and switch to using cryptocurrency more. This will accelerate inflation and force the government to print less fiat(or find themselves unable to operate effectively).

first, you can only buy panels by peak power [kW], not by energy [kWh].

second: would you really invest on expensive mining gear and then run it only when the sun shines? Your gear is outdated quickly, so amortisation time is short.

This is just wrong. Power usage rises with the valuation of BTC:

GlobalEnergyConsumptionForMining ~= (MiningReward + TransactionFees) * bitcoinValueInUSD / EnergyCostInUSDperkWh

most certainly wrong.

please read my thread carefully where you will find your arguments proven wrong (see signature)

Very nice "rule of thumb"!  As an "absolute lower limit" you could use $0.015 / kWh:

Price of electricity = 0.015 USD/kWh = 15 USD/MWh

So we have 3600*X = P*24*15 or P/10=X

I use your calculations to figure the upper boundary on electricity usage. However, I suspect the lower boundary on cost per KWH is about $0.03.

Over 50% are paying less than $.10 per KWH: https://bitcointalksearch.org/topic/--333720

I remember some Indonesian miner guy that was paying $0.03 per KWH.

Cost in Iceland per KWH according to google is $0.043.

I can buy solar panels at $1000 per KW. Assuming a 5 year effective life span at 10 hours of direct sunshine per day = 365 * 5 * 10 = 18,250 KWH. Divide that into $1000 ($1000/18250) and we get $0.054 per KWH.

Personally, I would just use $0.05 per KWH. At around $600 per BTC and assuming 3600 BTC per day, we get:

$600*3600/$.05/KWHR= 43.2*10^6 KWHR for an UPPER BOUND on power usage.

Remember, as BTC usage goes up world wide, power usage will stay about the same. I suspect the cost of using Fiat (especially when factoring in both the hidden and apparent cost of inflation) is much much higher.

Thank you for this very interesting calculation. It's a nice addon to a thread I started quite a while ago that led to a fruitful discussion. See https://bitcointalksearch.org/topic/m.1897702

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