Topic: Bitcoin Mining Consumption of World’s Resources (Read 4929 times)

I agree with the "yawn PeerCoin" part.

yawn PeerCoin /thread.

650 TWh is actually 2.8% of the world's current power production.     Also some are predicting bit coin will go up much higher than $40k, if it does clearly we could start getting into serious trouble at some point.   But there isn't any way to know what will happen with the real future value of bit coin.    

Weren't your calculations based on $.08 / KWh?   Very few get power that cheaply.    I think the most likely impact in local areas where there is a lot of bitcoin mining going on it will put pressure of electricity prices.   Of course that would mean even less power used for a $40k coin, but overall the cost would be subsidized by a local population.   I don't think that is going to be well received when it happens.   Anyway the actual picture is much more complex.      

In any case the exponential growth simply can't continue.   The growth will flatten out to a more reasonable level or else bitcoin will fail because it simply became too expensive.   I think we are already starting to see the network hash rate growth slow, but that could just be noise too.  There is also the rule of large numbers.   To grow by 30% this month  is a growth of around 4000 TH/s, when it January of 2013 there wasn't even 40 TH/s.   So it is vastly harder to achieve the same rate of growth.  

As pointed out before, the growth in energy usage by miners is limited by the value of the bitcoins received by miners. At a value of $40,000, the energy consumed is around 650 TWh, which by your calculation is only 0.003% of the total. 10% implies a value of around $1,500,000 per bitcoin, which is unlikely because at $1,000,000 bitcoin will have replaced all other currencies.


Right now you can get an ASIC miner for $100. I'm not convinced that cost of entry will be too high for most people, though profitability might be difficult for small miners because of economies of scale. Also, the cost of power limits only the miners, not the users.

I am looking forward to this time of BTC crowfunded fusion nuclear plants. 

Well when I use to watch the show as I kid, I never really understood the villain's motives - they seemed to just want to pollute for the sake of polluting.  I mean, clearly there is more utility in BTC then there is pollution for pollution's sake, but, I would have to say, bad thing still.

If it costs $15 in electricity to create $800, capacity will be found.

ASIC producers had all their development costs paid for by the pre-orders, and once you can mass produce a $10 chip that uses $300 worth of electricity, nobody can stop those that can create chips to mine for themselves.

Same as the Bitcoin cost when mined, and its price on the exchanges,  the cost to produce mining hardware and the price they can sell them for, have nothing to do with each other. 

Not likely, since Bitcoin is already in a huge bubble.

The network is growing an exponential rate largely due to huge advances by moving to ASICs.  Producing more of the same ASICs will allow for more of a linear growth rate which could be sustained for a long period of time.   You don't get the same exponential jump in ability without a new technology.   That could happen, but it is unlikely to happen in the near future.   

The current ASIC companies are living high on the hog even demanding and getting pre-payment.   Most of those companies won't even have the ability to cost reduce down to the marginal cost of production.  Additionally why would they?  What manufacture sells goods without a reasonable profit?   So that would probably be another short term limiting factor.  Plus if everyone started using these miners it would have a massive impact on power consumption and probably result in higher power costs, which people wouldn't like.


That is only true from the standpoint of a current miner.   What will happen if the network keeps growing at the insane rate it is, there will be increased power costs and/or regulation to stop it.   It isn't reasonable to think that is would be allowed to grow to 10% or more of the world's electrical power.   Do you think people will be willing to live with vastly higher power bills and rolling blacks outs to support bitcoin mining?    In the CPU/GPU era you weren't using nearly as much power as in being used today. 

What is more likely is that the cost of entry will get so high that it will block most from mining at least bitcoin.   If the cost of power is truly what limits bitcoin, then bitcoin actually won't have much of a future.   Most businesses run with as high as profit margins as they can.   The micro-economics don't work the same on the marco scale and the bitcoin network is way past the micro side. 

Sure that would be a major jump but it would only take you so far.   I think what might happen is that power rates where there is excessive mining will increase.   The network growth will switch to a sustainable level because of economics or regulation or maybe even wars.   

The amazing thing to me is the extreme growth rate isn't good for anyone but the suppliers right now.   Yet so many don't seem to accept that it can't continue with such an extreme growth rate.   It is common for extreme growth to flatten out to sustainable levels.   The same will happen the bitcoin network.   When it does it will be a good thing for everyone except the suppliers.   But at least they got the rapid money up front.   

Thanks for the clarification of your statement.   I can see what you are driving at.   Thankfully, the actual cost is much more complex than just power, but I have to agree that the demand for profit will drive up the network hash rate until it approaches the current value of bitcoin.

This is a very strong argument for just buying and holding bitcoins.

As I pointed out before, the cost of mining will approach the value of the mined bitcoins.

At $800 per bitcoin, that is currently about $1 billion per year and about 13 TWh per year (at $0.08/kWh). As the block reward drops, the amount of energy used would also decrease (unless energy gets much cheaper), except that the price of bitcoin will probably rise much more quickly.

If the price reaches $40,000 this year then the energy usage could be as high as 650 TWh, assuming there are no other limits.

With a great deal of help from the community here, we ended up with numbers that likely reasonable.   While technology will probably improve the power consumption some from my current conservative estimate of 600W per 1 TH/s, it probably won't improve by a factor of 10.   

Most of the world's electrical power is used for basic needs.   Almost 3 years ago Tokyo lost about 10% of it's power due to the problems at Fukushima after the tsunami.  There were rolling "planned" blackouts in parts of the city for months, elevators, escalators and fountains had to be shutdown, trains were put on slower schedules and everywhere you would see signs that we shut this down to conserve power.   Tokyo is probably one of the few cities in the world that could handle an impact like that.   Now almost everything is back to normal because people have managed to conserve the power that was lost.

As was pointed out the global network can't keep growing at this rate, although from the aspect of power we might have more than a year of really rapid expansion.   The power limit is much closer than I though it was at first, but it approaching fast.   This is interesting.   

That is actually my point, but everyone seems to assume that it will.   Your correction ... makes the case even more clear.   

Now the simple answer to your post:

You said "2013 was a year where the network hash rate grew over 40,000%." and then assumed this rate of growth would continue.

It will not.

OK now that you got that fixed we can work on the rest of the mistakes in your post:

Hash rate is measured in "hashes per second" = H/s or "terahashes per second" TH/s not THs.

Fixing your units the network hash rate is 16,271 TH/s (terahashes per second)

You are using 600 W per TH/s so: 16,271 TH/s times 600 W per TH/s

This equals 16,371 * 600 = 9,762,600 Watts

Ok you rounded up to 10 MW, fair enough.

That is POWER.

To get units of ENERGY so you can compare it to an annual ENERGY production of 22,500 TWh you need the number of hours in a year:

   24 hours/day * 365.24 days/year = 8765.76 hours per year.

Annual ENERGY consumption of the Bitcoin hashing would be:

   9,762,600 Watts * 8765.76 hours per year = 85,576,608,576 Wh = 85.6 GWh

so 85.6 GWh / 22,500,000 GWh = 0.00038 %

So you are saying it is the goal of bitcoin to consume most of the world's power?

As we keep telling you "TWh" is terawatt hours it is NOT terawatts per hour!  Terawatts per hour is WRONG.

Got it now?

Now, go fix your darn OP.

I realize that, I'm only using "units" that people commonly see when they try to look up the information.   "TWh" is being used all over the web to talk about energy production and consumption.   The notation is just to make comparisons simple for people and when you are talking in terms of the total amount of the world's electrical production consumed, the units all cancel out.    

The cost of producing a bitcoin tends to approach the value of a bitcoin because if it costs less than a bitcoin then more people will mine, raising the difficulty and thus the cost. If it costs more than a bitcoin then less people will mine, wihich will lower the difficulty and thus the cost.