PoW's Negative Ecological Consequences
Confirming transactions for existing Bitcoins, and creating new Bitcoins to go into circulation, requires enormous background computing power that must operate continuously. This computing power is provided by so-called "mining rigs" operated by "miners". Bitcoin miners compete among themselves to add the next transaction block to the overall Bitcoin blockchain. This is done by "hashing" - bundling all Bitcoin transactions occurring over the past ten minutes and trying to encrypt them into a block of data that also coincidentally has a certain number of consecutive zeros in it. Most trial blocks generated by a miner's hashing effort don't have this target number of zeros, so they make a slight change and try again. A billion attempts to find this "winning" block is called a "gigahash", with a mining rig being rated by how many gigahashes it can perform in a second, denoted by "GH/sec". A winning miner who is first to generate the next needle-in-a-haystack, cryptographically-correct Bitcoin block receives a reward of 50 newly-mined Bitcoins - a reward worth, at the time of this writing, around $50,000. This competition among miners, with its hefty reward, repeats itself over and over and over every ten minutes or so - by early 2014 generating rewards of over 7000 bitcoins per day worth around $7 million dollars per day.
With so much money at stake, miners have supported a blistering arms race in mining rig technology to better their odds of winning. Originally Bitcoins were mined using the central processing unit (CPU) of a typical desktop computer. Then the specialized graphics processing unit (GPU) chips in high-end video cards were used to increase speeds. Field programmable gate array (FPGA) chips were pressed into service next, followed by mining rigs specialized application specific integrated circuits (ASIC) chips. ASIC technology is the top of the line for Bitcoin miners, but the arms race continues with various generations of ASIC chips now coming into service. The current generation of ASIC chips are the so-called 65nm units, based on the size of their microscopic transistors in nanometers. These are due to be replaced by 28nm ASICs in early-2014 and 20nm units by mid-2014. An example of an upcoming state-of-the-art mining rig would be a Butterfly Labs "Monarch" 28nm ASIC card, which is to provide 600GH/sec for an electricity consumption of 350 watts and a price of $2100. On the horizon is a card from Hashblaster slated to have three 20nm ASIC chips providing 3300 GH/sec for 1800 watts of power consumption. Most operational mining rigs will probably be upgraded to this standard of performance and efficiency by mid-2014.
The mining rig infrastructure currently in place to support ongoing Bitcoin operations is astounding. Bitcoin ASICs are idiot savants - they are able to do only the Bitcoin block calculation and nothing more, but they can do that one calculation at supercomputer speeds. In November 2013, Forbes magazine ran an article entitled, "Global Bitcoin Computing Power Now 256 Times Faster Than Top 500 Supercomputers, Combined!". In mid January 2014, statistics maintained at blockchain.info showed that ongoing support of Bitcoin operations required a continuous hash rate of around 18 million GH/sec. During an day of 86,400 seconds, this means around 1.5 trillion trial blocks were generated and rejected by Bitcoin miners looking for the magic 144 blocks that would net them $7 million. Thus around 99.99999999 % of all Bitcoin computation go not to curing cancer by modeling DNA or searching for radio signals from E.T - instead, they are totally wasted computations.
The power and cost involved in this wasteful background miner support of Bitcoin is enormous. If all Bitcoin mining rigs had "Monarch" levels of capability as described above - which they will not, until they are upgraded - they would represent a pool of 30,000 machines costing over $63 million and consuming over 10 megawatts of continuous power while running up an electricity bill of over $3.5 million per day. The real numbers are significantly higher for the current, less-efficient mining rig pool of machines actually supporting Bitcoin today. And these numbers are currently headed upward in an exponential growth curve as Bitcoin marches from its current one transaction per second to its current maximum of seven transactions per second.
There are at least 4000 network nodes at this time.
I actually used incorrect Bitcoin numbers, the current reward is 25 Bitcoins per block, not 50. So it should be :
A winning miner who is first to generate the next needle-in-a-haystack, cryptographically-correct Bitcoin block receives a reward of 25 newly-mined Bitcoins - a reward worth, at the time of this writing, around $25,000. This competition among miners, with its hefty reward, repeats itself over and over and over every ten minutes or so - by early 2014 generating rewards of over 3500 bitcoins per day worth around $3.5 million dollars per day....During an day of 86,400 seconds, this means around 750 billion trial blocks were generated and rejected by Bitcoin miners looking for the magic 144 blocks that would net them $3.5 million...
So basically the daily reward is currently roughly equal to the daily electricity cost. I think the only way Bitcoin mining is profitable is if you are somehow getting cheap/free electricity by running it on somebody else's grid without them being aware of it...
What my dad and I did to offset this was capture the heat from the mining rigs and duct it into the return of the furnace. Being able to never turn the furnace on during winter in Iowa offsets cost a lot. In the summer, we duct it out the chimney.
oops - I seem to have hit the jackpot here . With the transaction 7658158127240838574
