Topic: Transaction cost in kWh - page 3. (Read 5146 times)

But the other people vote for them? So they think that everything is quite OK?
How can I check - where is the truth? On your side or on their side?

I don't vote for politicians, that would be a waste of time and be undignified. I vote by doing actions directly whether it be charity, building something or using bitcoin.


The greater costs to tyrants and sociopaths don't concern me. What I am concerned with are the opportunity costs lost from an unfree market where business is stiffed by monopolies supported by fascistic governments . I am also concerned about the social and ethical implications of having a centralized and corrupt system.

These costs are monumental compared to the costs of ASICs and a bit of electricity.

Of course. It was only an exampleThis is yours democracy. Not mine.
If you think that the price is too high - why do you elect these people to your government? Vote for another persons who would reduce the cost which society pays. Anyway, the cost in centralised system will be lower than in decentralized

You are missing a few variables there...

Price of Fiat = price of paper + price of printing + price of printer + salary of FEDs + price of regulators + price of FBI who investigate counterfeiting + Price of Banking infrastructure  + Price of armored vehicles + Price of security guards + price of banking employees + price of military and police which enforce the value of Fiat ..... ect..... how much time do you have?

Bitcoin eliminates most of the need for physical, human, and regulatory security with efficient mathematics, cryptography, and ASICs. Go ahead and add up all the human time, electricity and resources used by those humans to keep Fiat currency running and see how that compares to Bitcoin.

Sure there are plenty of profits made with Fiat, but despite what some believe, breaking windows with bricks isn't good for society even if the glass company profits as a middleman with the inefficient act of destruction.

Why nobody counts? You should do it.
Total price = price of paper + price of printing + price of printer + salary of FEDs
You can estimate this value in kWh

You can't conflate seignorage with transaction costs.

When the Fed prints $50 billion in 1 month (which it was doing recently), nobody counts those dollars as a transaction cost on every dollar transaction.

And even if you don't buy that argument, there is a much stronger one: unlike dollar printing, Bitcoin printing was defined *in advance* for its entire future history, at the start. The market knows these 'costs'.

Are ounces of gold mined in 2014 counted as part of the transaction cost of gold transactions?

Excellent idea!

Just like you are saying, everything is on the scale. the more you make, the cheaper the unit price. But the thing is, you need to move forward to technology and develop better and better ASICs which need more investment. Nevertheless, I'm sure they are not making a loss 

Making water-cooled ASICs and connecting it to e.g. floor heating would be an interesting idea...

Correct. The initial investment costs for 22nm ASIC dev and testing is at least 5-10 million which has to be amortize across the costs of the products. The question is merely one of scale. If the costs have to be amortized over a few thousand miners than those miners will be very expensive. What if those costs are amortized over mass consumer items though? Space heaters, water heaters, ect??? We are talking about millions of units. What if you could buy a hot water heater that actually paid some of your electrical bill with transaction fees and block rewards?

Think of the price of cell phones or computers initially and how cheap they are now. You can get a burner cellphone for 20 bucks! Netbooks are being sold for 230 and dropping!

I personally would only use it for heating with a heat exchanger, not the air directly that it is blowing out. No matter how safe they are claimed to be.

The price you pay for an ASIC is just like any other high tech equipment, the actual material might be cheap, but you pay for the technology and knowledge behind the device. And as you said, YOU have to pay for THEM for investing in million $ manufacturing equipment, personnel etc. and this price is distributed in the price of ASICs.

If heat is a product instead of something thrown away and ASIC costs are amortized with block rewards and transaction fees than what is the problem?

Are you suggesting future mass ASIC manufacturing/shipping costs will be higher than campaign political costs? Bitshares would be more interesting if Daniel stuck with TaPoS instead of settling on DPoS.
There are security and future political costs with campaigning and lobbying that will need to be considered when you introduce more human involvement into securing the blockchain.

I suppose there are limits with how many things we need to heat on earth though.... but this isn't a pressing dilemma.

What I have stated is NOT a claim, it is a FACT that Bitcoin eco-system pays roughly $500 million in PoW mining expense this year, which means $500 million is transferred from the Bitcoin eco-system, to ASIC hardware vendor and electric company. This is a FACT, and since it's a fact, therefore it will be true even when Bitcoin has no inflation (ie. when coin supply run out, the PoW expense will still exist). Therefore, YOU are the one that is confusing inflation with this perpetual PoW expense. I have no problem with Bitcoin inflation, at all.

Why does he need to repost on a topic that he has studied and commented upon already?
Please read the problems and solutions discussed in the link and than refute any specifics he is wrong about.

We are waiting for specific refutations and not blanket assertions and opinions.

One solution involves no changes because it involves the economics driving the prices down:


The economics of mining is already being driven to use cheaper and more green sources of power :

http://www.coindesk.com/digitalbtcs-icelandic-mining-centre-powered-100-renewable-energy/

A likely scenario in the future is not only will the electricity be free but the equipment be heavily subsidized. Competition will drive these prices down where you cannot afford to pay for cooling, asic costs, and electricity in mining PoW when others are efficiently creating heat as a needed product and the equipment is amortized with block rewards and transaction fees.

There are other solutions as well if the above economics and incentives fail to work which require re-writing some lines of code. If we need to we can create a hybrid PoR/PoW or a hybrid Pos/PoW as a last resort. There is too much vested interest in Bitcoin, it isn't going away, we will make it work  and can make it work because it is a open source project that is evolving and growing.

Others who jump ship out of fear or greed will likely come back to Bitcoin in due time at much higher prices.

Miner should sell his "product" to a new bitcoin user (or old of course).
So the user pays for product which was created by miner.
And the cost is 80 kWh per one transaction.

Should we ask Vitalik Buterin to visit this thread and tell us about thermodynamics?

The reason ASICs cost so much is because of the upfront designing, tape-out, and testing costs and because they can get away with it because bitcoins are so valuable. The actual costs of making ASIC's are very cheap after the design if completed(few dollars per wafer dependent upon the quantity).

There is nothing wrong with using PCB's in heating if the right materials are used.

Economics will force either ASIC manufacturers themselves to start introducing these products or we will crowdfund the operation directly to force them to start and compete with these products.

I just looked up a random ASIC, it consumes 1350W and costs 2500$. If you would buy an electric heater, you could get one for 50$. ASICS produce heat, but are not made for heating. I get that its a "win-win" on paper.
Not only expensive, but the PCB inside can release some nasty stuff, so it is not advised to use it as heating. There is another thread discussing uses of old ASICs, most common being a doorstop in your house.

Regarding the tx "fee" of ~85 kWh/tx, its the miners (or the network if you like) who pay it. They are "wasting" 90% of the electricity to solve a puzzle with a computer and that is Bitcoin. They are compensated for the wasted electricity with the payout of 25BTC/block and hence still make a profit.

It's not the Bitcoin user who pays this fee in any way. Its a resource used by the miners to create a product.

Bitcoin uses far less resources than Fiat to secure its network and process transactions. You are just making things up and spewing FUD.



Yes, take all the time in the world. Please research these topics before you make yourself look foolish.


You bring up many great points and Bitcoin is clearly more efficient than Fiat when you crunch the numbers but Bitcoin is merely one crpyto -currency amongst other crpyto -currencies and
we also need to address competitors with PoS and DPoS schemes when they complain about the wasted costs, centralization of mining, and environmental concerns .

This may naturally be solved by market forces by ASIC's becoming decentralized and cheap utilities , but if not than we will need to make changes to Bitcoin. Luckily, there are many solutions and the community has enough incentives to make these changes if or when they are needed.

many assumptions..
firstly you keep assuming that if i had 1btc and i sold it to someone. i or the other person i sell it to is losing out on $5-$20 in transaction costs. as my last post says no one buying or selling bitcoin loses $5-$20. miners are given fresh bitcoin (adding to circulation) to compensate costs. its not coming out of peoples hoards.

the other assumption is that gold cant be double spent.. i guess you missed out on 'fractional reserve' in history class.

more assumptions are that you are basing the electric cost of transaction vs spending habits. in actual effect if you imagine a retail shop that does $5k of business a day, the manager has to spend all day in the shop, at the end of the day he hands funds to a bank security firm who drives that deposit to  bank. and then a bank teller counts it and enters the figure into the shop owners bank account.

so lets do some rough maths.
lets say its a small 7-11 store, average transaction is $10
500 transactions (1 tx every 2 minutes seems reasonable for an average 7-11)
manager / shop cashiers wage (minimum wage $7.50 for 16 hour day shift=$120)
bank costs (bank teller $7.50 + 2van drivers 1 hour round trip $9 an hour=$18 + fuel vehicle=$20=~$50)
so thats $170.. even before we work out the cost of the computer system that protects people bank accounts. even before we include the electric for the bank, even before we work out the vehicle purchase and maintenance, even before we work out the banks lease and all other costs to confirm a bank note payment to account.

http://en.wikipedia.org/wiki/Wire_transfer#Regulation_and_price
the costs of 'admin and transport of bank notes ranged from $12-$45 per transaction, but more recently banks are not charging customers because they are printing money behind the scenes to cover costs.

the difference between a bank and bitcoin is banks can print as much as they like to cover costs. but bitcoin and gold are more fixed/rare/limited in how much is added to circulation to cover costs. the end user does not see the costs!!!!

again the end user does not see the costs.
but while banks add more funds into circulation at no limit.. (inflation)
bitcoin is fixed so if 25bitcoin represented 282tx's last year (at  a tx price of $5.71/tx=$64 a bitcoin)
bitcoin is fixed so if 25bitcoin represents 486tx's this year (at a tx price of $17/tx=$330) (my maths)
bitcoin is fixed so if 25bitcoin represents 486tx's this year (at a tx price of $20/tx=$388) (blockchain.info's maths)

then that is deflationary,..
again customers do not see the fee's taken out of their pockets. but the 'mint' (new circulation) pays the fee's.

Give me some time please. Seems to me that I have read this document. I have to read it more carefully

There is very simple test for everything (except biology).
If "this thing" takes less energy than "that thing" it is progressive and revolutionary.
Otherwise it is not.

Bitcoin (and all other decentarlized cryptos) either takes too much energy comparing to centralized systems
or provide less security.

Sorry, Perpetum mobile is not real in our universe. Only temporary ponzis.

Explain why it can't be both or are you just trolling?