Topic: when btc rockets, the mining wars will never stop (Read 1456 times)
Doesn't matter if BTC rocket or not, its still always a mining wars like World War Z...
If it costs $1500 to mine one $1500 BTC, why will anyone do it? For the fees?
If it costs $1499, why wouldnt you do it? Mining marginal cost will approach mining revenue. Feel free to apply some "marginal" margin, but that hardly changes the overall picture. Moreover, I would argue that today mining a btc costs a heck of al of a lot more than buying one, yet people still do it.
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Electicity costs today are not 100% of the coinbase being mined. They are maybe 10%, probably closer to 5%.
Thats true for now. THats because the hardware is still much too expensive and because of the exponential growth in hashrate, the investment has to be written off in months. It wont be like that once we approach an equilibrium. When we do, hardware cost will approach marginal production cost (at least an order of magnitude lower than today), and miners will write off their hardware investment over many years.
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To give an idea, lets assume cheap miners will pay $0.05 per KWH.
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Lets use your 10 fold scenario so BTC would be worth ~$1500
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25 BTC x $1500 x 6 blocks per hour = $225000 per hour
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225k / 0.05 = 4.5 million KW or 4500 MW
That equation says, "it will cost $1500 in electricity to mine one BTC". If it costs $1500 to mine one $1500 BTC, why will anyone do it? For the fees?
Electicity costs today are not 100% of the coinbase being mined. They are maybe 10%, probably closer to 5%. (Ignore Blockchain.info's 650W/Gh/s metric, which is 50x to 100x too high).
Using 10W/Gh/s and 3Ph/s network hash rate results in 30MW today being dedicated to mining. Increase that tenfold (for the sake of argument) and you may need 300MW of electricty worldwide to mine BTC worth $1500 each. The worldwide generation of electricity today is about 3000 GW.
BTC mining consuming 0.01% of the world's electrical power (say 0.02% of electrical energy, being 24/7 usage) doesn't sound scary to me.
The US alone will install 1.5GW of solar power in 2014, which, given solar power's 20% capacity factor, will cover BTC usage nicely, even in the 10x increase scenario.
You're forgetting the cost of the mining hardware that should be added to the electricity cost.
Im not forgetting it, but in the long run, the hardware cost will become negligible. First of all, asics are dirt cheap to produce in volume, only a fraction of what you assumed. For instance Hashfast's chip, based on die size, would cost around $35 to produce. Thats $0.09/GH. Triple that for PCB, cooling etc and you get a ballpark figure.
Secondly, as we approach equilibrium, miners will be able to write off the hardware over many years, instead of weeks or months now.
just imagine what another little 10-folder would do to mining ... 
Im actually more concerned about what it will do to the environment. Its the elephant in the room many dont want to address or brush off by just estimating todays electricity consumption. But in the long run, miners electricity cost will roughly equal total mining revenue, and the majority of that cost will be born by miners with very cheap electricity. If BTC value goes up 10 fold, so does mining revenue and thus electricity consumption.
To give an idea, lets assume cheap miners will pay $0.05 per KWH. Lets use your 10 fold scenario so BTC would be worth ~$1500
25 BTC x $1500 x 6 blocks per hour = $225000 per hour
225k / 0.05 = 4.5 million KW or 4500 MW
Thats roughly comparable to the 6 nuclear power plants at Fukushima combined output before the accident. Gee, I hope I made an error in my math somewhere.
they need to come up with some kind of radiator that also mines btc. there needs to be justification for this energy consumption...
just imagine what another little 10-folder would do to mining ...
Im actually more concerned about what it will do to the environment. Its the elephant in the room many dont want to address or brush off by just estimating todays electricity consumption. But in the long run, miners electricity cost will roughly equal total mining revenue, and the majority of that cost will be born by miners with very cheap electricity. If BTC value goes up 10 fold, so does mining revenue and thus electricity consumption.
To give an idea, lets assume cheap miners will pay $0.05 per KWH. Lets use your 10 fold scenario so BTC would be worth ~$1500
25 BTC x $1500 x 6 blocks per hour = $225000 per hour
225k / 0.05 = 4.5 million KW or 4500 MW
Thats roughly comparable to the 6 nuclear power plants at Fukushima combined output before the accident. Gee, I hope I made an error in my math somewhere.
You're forgetting the cost of the mining hardware that should be added to the electricity cost. Right now the cheapest and most efficient miners are at $3/GH and 0.6W/GH, so let's assume due to the stiff competition and rising difficulty they will be able to cut this back to $1/GH and 0.3W/GH. At your 4500 MW that would mean a total network speed of 15 million PH/s, or a total of $15 trillion worth of mining power. That's not realistic at all, the entire world population would have to buy a 2.5TH/s miner each for $2500.
just imagine what another little 10-folder would do to mining ...
Im actually more concerned about what it will do to the environment. Its the elephant in the room many dont want to address or brush off by just estimating todays electricity consumption. But in the long run, miners electricity cost will roughly equal total mining revenue, and the majority of that cost will be born by miners with very cheap electricity. If BTC value goes up 10 fold, so does mining revenue and thus electricity consumption.
To give an idea, lets assume cheap miners will pay $0.05 per KWH. Lets use your 10 fold scenario so BTC would be worth ~$1500
25 BTC x $1500 x 6 blocks per hour = $225000 per hour
225k / 0.05 = 4.5 million KW or 4500 MW
Thats roughly comparable to the 6 nuclear power plants at Fukushima combined output before the accident. Gee, I hope I made an error in my math somewhere.
Somebody smart should WAG the following:
How much would the mining companies have to pool/invest in a BTC buy on the exchanges to bump the price sufficiently to start a new miner-rush? Would it ROI for the mining companies?
How much would the mining companies have to pool/invest in a BTC buy on the exchanges to bump the price sufficiently to start a new miner-rush? Would it ROI for the mining companies?
just imagine what another little 10-folder would do to mining ...
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