Topic: Is Bitcoin viable, energy wise? - page 4. (Read 8868 times)

But that will happen under circumstances where the gain of these new technologies is diminishing.
It will not be very profitable to invest in developing 0.0003% more efficient mining hardware and any power you think you can excert from your position will be fragile at best.
In the end you will have a lot of people competing over less and less possible gain.
The risks of not getting back your investments from producing new minig hardware will increase.

The difficult seems to be that when bitcoin grows the potential for transactions also grows. The more people there are in the bitcoin economy the more there is to transact in the bitcoin economy.
It's related to the problems you get with interprocess communication in networked processing.
I can see that the number of transactions will rise at some exponential number compared to a linera rise in number of nodes.
So the ammounts of transactions wil grow faster than the ammounts of nodes.
If bitcoin becomes anything like important in society then you will pay for your groceries with it, you'll pay for gas with it, you'll pay for the ticket to dysneyland with it. So there will be a lot more transactions per user to be done.
And all these transactions also add up to the block chain, so everyone will need to get the blockchain which includes all the transactions of everyone else in the world.
I can easliy predict that the 6G of chain we have now will be meaningless once bitcoin represents some substantial part of the economy.
The 6Gig will be a daily download for every user at best. It won't take long before you will need to get a gig per minute to be up to date.
We all think the blockchain has been growing pretty fast lately, right?
Well, right now the size is related to about 55000 transactions daily. You need to get up to date with 55000 transactions per day.
Now imagine 1/10th of the world uses bitcoin to pay for their usual things.
We get 1/10th of 7x10^9 = 7x10^8 people participating.
Let's take an average of 5 transactions per user per day. You need to buy gas, you get an icecream, you pay the rent, etc.
(i'm just using some ballpark figures here to see where we get)
This gives us 1.4x10^9 transactions daily. 1.400.000.000 transactions per day.
That means the blockchain will grow about 25000 times faster than it does now.

Lets make an estimate of how much the blockchain grows right now.

In the last 1.2 months the blockchain grew by about a gigabyte.
On average that is about 0.0269 gigabyte per day. This gives us about 27.5 MB per day.
Ok, so now let's multiply this by our projected change in magnitude.
We get 27.5 x 25000 = 672 gigabyte per day !!

So in the situation where 1/10 of the world population does 5 bitcoin transactions per day on average everyone will need to download 672 gigabytes of new blockchain per day to keep up. If you didn't update for 2 days you'll need to download over 1TB . If you didn't touch your wallet for a month you'll be pumping 20TB to get up to date. And all this to be able to use bitcoin as a currency.
After only a year of hoarding blockchain everyone would have about 240TB of blockchain stored locally.

I think this will be problematic from an energy point of view even before the practical problems of storage become too devastating.

What long term projections?

I have yet to see one that is not wishful thinking, or a totally unrealistic "There is X total of something, lets divide that by 21,000,000 to see what we get."

And the mining incentives are built in into the system itself, and there is no need for random guesses.  Somebody calculated 2 years ago, that if the price goes to $20.000 you would need something like 60 power plants just for the energy for miners.




Those with access to the technology would always increase the capacity until it is no longer profitable to do so.  The cost of mining per BTC will always be close to one BTC. 




How in the world would you suspend market forces in an open P2P network?

According to http://blockchain.info/charts/blocks-size we're aproaching 6 gigabytes for the blockchain.
According to http://torrentfreak.com/bittorrent-and-netflix-dominate-americas-internet-traffic-111027/ Netflix is 34% of total...

I can't find numbers on exact transfer rate of the internet. But lets say ~1 exabyte per day (someone got a source to the real data?) so we're looking at netflix transfering 333,000 terabytes per day. This means that even if you had 55,500,000 bitcoiners downloading the entire blockchain every single day... you'd still be consuming less than netflix does on a daily basis.

For real numbers, number of tx * number of nodes * time = transfer rate of bitcoin network  ... feel free to include an estimation of non-current blocks being transfered to out of sync clients.

If a LONG TERM projection always indicate a rise in the exchange price due to limited supply, there will be less and less people sell bitcoin to cover their energy cost, and that trend itself will lift the bitcoin price as a result, can go on for decades

Another thing, your formula is based on that most of the people could always get their hands on the latest mining technology, thus the mining competetion will always be hard. But I foresee a future that only a handful IC companies have the access to the latest engergy efficient mining technology and many normal people with ASIC miners just can not cover their electricity cost, just like what happened after 10 years of california gold rush

This also partly answered OP's question, if the mining technology becomes more and more hidden and centralized, the actual energy cost will be less and less

The word 'green' is too political for me. I'd say i want to know the energy footprint of bitcoin.
Imagine a large part of the world is using bitcoin.
How much network traffic will it take for everybody to be up to date with everybody elses transactions?

I don't really know why you'd want to try and quantify this. Are you attempting to evaluate how 'green' bitcoin may or may not become? Bitcoin is such a small amount of traffic on the network relative to everything else that's going on there that I can't imagine it ever being an issue. Even if we imagined away all other currency and assumed all those trades were done using bitcoin instead... and scaled up the network accordingly.  it would still be so very minor compared to the bandwidth used by say facebook, google or netflix.

I guess you're right, but they do behave differently in this respect.
Bitcoin is supposed to become a currency and so i'd expect it to be transfered around a lot.
With bitcoin the energy expenditure does not depend on the amount transfered.
So even the smallest transactions will use up this energy.
I wonder if this will grow out of proportions and if not, where it will balance out.

But i can indeed see a more stable role for bitcoin as a sort of bulk transaction medium.
Then again, wouldn't that ultimately create bucketshop economies in front of it?

No, its actually a big part of what i'm interested in because all the networking consumes energy too.

But it might matter to society as a whole.

No. But you can make a reasonable assumption that the processing fees will be 100x lower.

OP - I think the premise of your original question is invalid.

The 'energy cost' of bitcoin network does not matter to the network and it never will. Precisely because miners are the ones providing that energy. Miners have already proven that the network hash rate will continue to increase (and thus the total energy expended in the act of mining) until it isn't profitable to increase it.

The goal of 'adoption' is to generate transactions fees that amount to greater than the block reward. There's no way for force an increase except by transaction size and this is completely fair to each user.

Assuming bitcoin is in general (global?) use the network hash rate will grow to any size that it needs to in order to process the volume of these transactions. Once this happens there won't be any disincentive to mining.

So energy is covered...


Now bandwidth, that's a different discussion... and may at some point become an issue... but I'd imagine we'll be able to develop some sort of supernode system or some bitcoin specific protocol to deal with this once it becomes a real concern.

~

Another thing to consider if we assume adoption... some of the big boys (aka other payment processing services) will eventually convert or at least support bitcoin. Once Amazon or Paypal take them directly they'll be contributing to the network as well (at least some fast nodes so they can send payments directly without using another service).

Let's compare two cases:

1.
There are only 100 miners which have ASIC mining farm and each of their farm have a hashing speed of 10Th/s, the total network hashing speed is 1PH

2.
There are 1,000,000 miners which have GPU mining rig, average each of their mining rig have a hashing speed of 1Gh/s, the total network hashing speed is also 1PH

In such a case, the difficulty and hash rate is the same, the energy usage could be 100X difference, but is there any reason that the bitcoin value in the first case will be 100 times cheaper than the second case?

Satoshi makes a comparison to gold here.
One oversight he makes IMO is to forget that, unlike gold, once in circulation bitcoin still requires energy in various ways.

No, but apparently you do. The article says nothing about processing. It says that someone made a large transaction back in November 2010, and many transactions since have been "related" (ie, used those coins). That doesn't even mean much, since of course those coins are going to be involved in a lot of transactions, they were a large portion of the economy at the time. Nearly every US dollar bill has cocaine on it. Does that mean everyone with a dollar in their pocket is a drug dealer?

Transactions are processed by miners. I could install a program on my PC, that, in a few minutes, could have me mining bitcoins using my graphics card. Just like that, I'm processing bitcoin transactions. That's decentralized.

And indeed, you can trade your Bitcoins for USD and back again in just seconds on Gox or any number of other exchanges - decentralized again - but you might have some problems getting the USD out of the exchange and into your pockets, though that's thanks to banking regulations. Back in the day, it was dead easy - if a little slow - bank transfers take so damn long.

That they need fees. If they charge too much, there will be no transactions. No transactions means no transaction fees. They'll charge what they can get, and not a satoshi more. That's the way the Market works.

Heya, thanks!

https://bitcointalksearch.org/topic/m.8114

https://bitcointalksearch.org/topic/concern-for-bitcoin-and-the-environment-6459 concern for bitcoin and the environment
https://bitcointalksearch.org/topic/correlation-between-mining-costs-and-bitcoin-value-and-ecological-nightmare-23360 Correlation between mining costs and Bitcoin value and ecological nightmare

I seem to remember I read something Satoshi said about this issue. Like he had to design the system in a way that would have a significant impact on world energy consumption. Can't find it now, though.

As I wrote in the first post: few entities own and process all. The article shows it for a fact. Or do you have a difficulty reading it an understanding it?


Right, the latter is totally irrelevant. Why would you ever want to do that, and fast?
Oh yes, I am going to rush and buy 300 hard drives and 70 LCD screens when the price moves not to my liking?
Ever heard of Forex, where you can buy Euro and sell it in USD account in a microsecond?


I know that I am happier with Visa than any Bitcoin service of which 90% are scam and 5% are incompetent.
What is great revelation about Bitcoin mining that makes you know what transaction fees they will be charging when it is the only source of income?
I am listening.

What's your point?


And it only takes 10 minutes to get your coins out of Gox, too.

The fast processing is for bitcoin payments. Not for getting money into or out of bitcoin.

Do you even know how much Visa charges? Or how bitcoin mining actually works?