Topic: Please answer 3 technical questions (Read 6514 times)

lol, nice  

I have another comment for those that complain about energy use.

Why do you think the cost of production of money should be 0 watts?  Don't you see the incredible waste this has lead to? 

In the end it matters little how we justify it here or whether we agree or not.  The cost of production of money now is determined on an open market of public currency mining. 

Looks like mining market is more or less saturated now.

Well, not exactly, you'd at least have to solve difficulty1 blocks... Still the person who watches this single miner uses more energy per day than the computer to calculate the hashes.

You asked how much energy bitcoin requires, not how much energy miners are choosing to use.  The answer is still zero watts. 


These risks have always been tolerated in commerce.  Remember it was bitcoin that first introduced the idea of a public confirmations for a transaction, as it is the first public currency.  People survived with no public confirmations at all, so I wouldn't complain too much that getting one takes 10 minutes.  That being said, if you have an idea for improving the consensus algorithm we would all love to hear it.   

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I think you are confusing your centralization issues.  A centralized data centre is different from a centralized currency.  Pools are centralized.  Miners are not.  And by the way, fiat is centralized.  I hope you have stopped using it completely to avoid those risks you mention. 

stdset, I reposted your response at https://bitcointalk.org/index.php?topic=520977.160, it is a better place for people to discuss it.

I plugged the number corresponding to current BTC price / Mining consumption etc... your model predict 0,008% worldwide of consumption currently.
With mining power of 300,000,000 GHZ and 0,65 W/GHz (I think current mining tech), this give us consumption of 195,000 kw and in kwh/year 1,708,200,000.
Given the power prodruction stat at http://en.wikipedia.org/wiki/List_of_countries_by_electricity_production

I reach to 0,0074% of world consumption for mining when your model predict 0,008% so it seems to match very well.
I won't bet I did not make any mistake, but I was impressed to find that it match your model.

The discussion does not belong but who thought it would deviate here. Finally interesting response though.
Cross checked, your calculus is right.

I'll sleep on it tonight, thinking about if this model is economically relevant though.
A nice test is to plug the current mining data and compare the bitcoin price, to check if the model coherent. I'll plug that on excel, it bugs me. :p
Having the current market cap, and assuming miners pay 50% of their bill in electricity, we should be able to retrace the steps and see if it is coherent.
I'll do that tomorrow I think

Frankly speaking, this topic doesn't belong to this board.
However, we can estimate Bitcoin mining power consumption in 12 years, provided that Bitcoin replaced all M1 money supply in the world, what is very unrealistic, but we want to make a conservative estimate. As of 2009 M1 was about 20*10¹²USD http://dont-tread-on.me/wp-content/uploads/2011/02/SmallGlobalMoneySupply.png
In 12 years block reward will be 8 times less than now, let's assume that fees still constitute a minor part of block reward, i.e. block reward is 3.125 BTC, that means 18.75 BTC created per hour. Value of 1 BTC equals roughly 1 million USD of 2009 purchasing power (in 2027 USD doesn't exist already, since BTC completely replaced it). Let's now assume, that miners spend half of their revenue to pay for electricity (that's rather unrealistic, but we want to make a conservative estimation), so we have 9.4*10⁶ USD per hour to pay for electricity. If we take a reasonable price of 0.07 USD/kWt*h, that results in 1.3*10¹¹ Watts of total power consumption by all miners in the world. In 2007 the world produced about 20*10¹⁵ Wt*h of electric power, or 2.3*10¹² Watts on the average. We can see that under such unrealistic conditions bitcoin mining consumes less than 6% of total world electric power.
Hope I didn't make a mistake in calculations.

BTW, we can conclude that even in 12 years Bitcoin is unlikely to replace all money in the world, since 6% of total electric power produced in the world is a bit much, I'd say that bitcoin will need not less than 16 years to achieve that  

Oh come on, not this sh!t again... As has been explained to you numerous times by now, the amount of mining performance (and thus, power consumption) is NOT related to the number of transactions.

100 transactions a day require exactly as much mining power as 100 billion transactions a day.

Constructive criticism and feedback is more than welcome, but this is becoming a bit of a sad trolling attempt. Do you personally hate Bitcoin for some particular reason, or what's up with this?

I came because I thought you would show me the water.

Stellar and ripple aren't even cryptocurrencies, so what are you talking about?

It would not be ideal if mining was all done by Amazon,
but they are not the only big data center company.
Centralizing of mining may be an issue, and something
to keep an eye on, but I don't think it is any kind
of fatal flaw.

Any more questions?

Best of luck with your business.

You can bring a horse to water...

My job here is done.

I personally does not care. Since it can't last. Moreover, whatever power they get, they can't rewrite the past. I am scared that a fork happen for technical reason, but miners are the least of my worries.

Sure educate me, but you did not gave me convincing arguments yet.


What is your calculus ?

We almost reached the critical 51%. Are you saying it could never happen again?

Look, I love Bitcoin. It's great. I wouldn't be here without it. But it's time to move on. Open your mind and investigate for yourself what's happening.

What is your calculus to reach the conclusion ?

I reach my own conclusion by educating myself on a wide range of domain. I don't really care about who said it. If you want to change my mind, just give me a better explanation about the origin of money.

Why would it happen ? Miners suffers directly from Bitcoin crashes, big one takes the biggest hit.
And if it happen, why would it last when it is not profitable to do so ?
As in POS, miners have something to loose to screw up with Bitcoin.

At the rate we're going, we'd need a power plant in every village (10bn people doing 10 transactions a day) to power the financial system. We could pay all the power station workers in Bitcoin, eh?

That's right. You know better than the senior cryptographers at Stellar, NXT, Ripple, etc.

How would you feel if mining was further centralized and all mining was done by Amazon in their data centres?

What is obscene and why should we care ? no rhetoric just want to know why it bother you.

I argue that without proof of work, we can't have a currency according to the regression principle of Mises. https://bitcointalksearch.org/topic/proof-of-stake-from-an-austrian-school-perspective-928324

What risk ? The biggest miners are loosing more than the small one (suffering tons of unused hardware), so I'd say it is good for decentralization.
Why should a user care at all that miners are closing ?

Free. Stop the sophistry and just admit that Bitcoin's energy usage is obscene.

Why tolerate these risks when we have the know-how to resolve these issues?


Miners are switching off. Miners are now more likely to be in a centralized data centre than under your desk. That brings risks.

I think Bitcoin is a wonderful advancement. We would not be here where we are today without Bitcoin. She's like a big old steam engine that everyone has fond memories of.

But this bitcointalk.org blind loyalty to a crypto with underlying cracks (yes, cracks that have been filled in - some filled in better than others) is moving into Luddite territory.

Because this is wrong if you consider non local exchanges, which is the case of all internet services and the norm for many country.
Let's say you want to buy a movie on demand, you can always try to send your dollar bill to netflix... maybe next month you'll be able to see it.

For local exchange, yes, a bitcoin transaction is reversible. So is credit card and check, but are merchant refusing them ?

But it is a lack of perspective thinking that a BTC can't be represented in paper money. In that it would be very interesting to see banks act on such service.
Nothing prevent the creation of a paper denominated in BTC to fix to the problem. You'll can redeem x Bits against a bill to a trusted bank, as much as you could redeem gold for dollars in the past.

Such paper money would not fall in the same pitfall than the dollar, because paper BTC would be marginal for commerce.
People would use them only for local exchange, but the majority of money flows are digital nowadays, so the great majority of BTC exchanged will stay "real". There is not a lots of room for such paper to take over btc and become a fiat (ie, backed by nothing).

I believe that since such paper money would be less portable and less divisible than real BTC, there is no risk that history repeat itself, but still be very useful for hand to hand exchanges. (specially in poorly connected area)
The origin of the apparition of fiat is because it was easier to transact with fiat and credit money than shipping gold.
Which can't be the case with BTC.

Also, people originally  accepted piece of paper because they thought it was the equivalent to the amount of gold. (well, thanks to proof of reserve, there is no belief to have anymore, only proof)

1)  Zero watts.  There is no energy requirement for bitcoin mining.  Competition drives the energy use. 

2)  Zero confirmations are nearly instant.  This is what are used by all in person POS shops which I have used (including restaurants, coffee, groceries).  There is a risk of finney attack double-spend but that risk is less than the risk these shops have previously taken to accept credit cards (chargebacks are much easier).   

3)  No.