Topic: Correlation between mining costs and Bitcoin value and ecological nightmare - page 3. (Read 9141 times)

Mining would once again be extremely profitable and it might take a couple of months or so for difficulty to catch up to price.

This is assuming there isn't some technological innovation (e.g.., cheap and low power ASIC) that comes along first.

long-term, the technology used for mining does not matter, as long as it is available to everybody, thus energy will be the factor again

Sorry, I find that funny.  Surplus energy - not really.  

The idea that bitcoin mining might actually increase to the point where it significantly affects energy prices disturbs me!

The idea that bitcoin mining might actually increase to the point where it significantly affects energy prices disturbs me!

Let's assume Bitcoin becomes hugely successful and manages to displace the US dollar tomorrow. The total quantity of dollars that make up the monetary base (the most liquid money that bitcoin would replace) is on the order of 2 trillion, so if their value is substituted with  bitcoins, the 12 million bitcoins generated in the next 10 years (6 million -> 18 million) will be worth today about 1.3 trillion $. If we equate that value with the price of electricity as per the quote above we get 26 trillion KWh at current wholesale prices. That's more than the entire energy production of the world in a single year ! During the ten year period, minting bitcoins would require 70% of the electricity production of the United States !

While I agree Bitcoin will not replace the dollar, and it will certainly not do so tomorrow, using the correct scale shows just how bad a design is. A smaller Bitcoin is not less bad, just bad on a smaller scale, a local toxic spill as opposed to a full blown Exxon Valdez.

Mind you, I have ignored the hardware requirements which will likely dominate mining and that have more important impacts on the environment than the electricity consumption. In a real scenario, the electricity consumption will be lower, while the environmental impacts will be higher (manufacturing is more damaging than electricity production for a given revenue level; electricity can come from nuclear, hydro, etc. while copper can't be extracted without carving up some mountain).
I challenge anyone to reflect on how all this compares with the current financial sector, and prove how Bitcoin can be seen as an improvement.

Mining is a highly competitive market, so it will drive towards these kinds of solutions where the marginal cost of electricity is zero.

No no this is all wrong, ugh.  If Bitcoin demand rises then Bitcoin prices rise then mining demand rises then power demand rises and power prices rise and the price of
Bitcoins in dollars has nothing to do with the amount of power available anyways.

Sorry, I find that funny.  Surplus energy - not really.  Most systems use some kind of fossil fuel and they would prefer to hold it until someone places enough alue on it to consume it.  They are not likely to throw away money on mining.

Energy companies around the world could use surplus energy in times of low demand to mine Bitcoins. This would be a really efficient scenario.

No, the old kind, except consumed in times and places where it would have gone to waste before.

A new kind of electricity? 

If Bitcoin ever becomes that big, mining will be so competitive that it will use electricity that can can be used for little else but mining.

The main point I'm trying to make is that with the current setup, bitcoins going to $10,000 or taking any significant percentage of world GDP or the world black market over the next few years isn't going to happen. It's too severely limited by the power available in the world.