Bitcoin Forum

Is there a chart which shows estimated transaction cost in kWh?
How much bitcoin network at all (miners, nodes, lite clients) takes energy for transaction proceeding?

My calculations are too weak:
Current bitcoin difficulty hashrate is 250 000 000 GH/s
Modern asic miners do 1000 GH/s for 600 W
So, the whole network runs as 250 000 such devices
(In fact the current miners take more energy)
In an hour bitcoin network takes 150 000 kWh power and produces 3000 transactions
So, one transaction costs today at least 50 kWh (this is low estimate)

Are there more correct estimations and time-graph?
Thank you. Sorry, English is not my native language.

There is a number on blockchain.info (I can't access it right now). I believe their assumed cost of electricity is a bit on the high side.

No. There is no such chart there.
Seems to me that I know why  :'(

I haven't seen one but this is a great way to think about total processing costs. Although, this doesn't account for any CAPEX or any other OPEX but it is still interesting.


I'd assume 1kW per 1Th/s as some miners are above this and some are below.


So we'd have 250,000 kWh at 3k txns which == 83.33kW

Hosting arrangement range from $30kWm to $150kWm.

So the cost range for 83.33kW is from $3.36 to $16.8.

We are probably over secure at this point in time but the infrastructure is in place for the network to grow 10x in transaction size which existing mining infrastructure.

Good!
Would you like to compare these digits with current Visa/MasterCard/FED/whatever expenses for tx proceeding?
And tell me - who is paying for resources ;D

Sorry. My English is poor. I understand that bitcoin network does some things (most of them are casino bets as shown on bc.i)
My questions are:
a) aren't the expenses too high comparing to the other systems? (I mean centralized money systems, not other crypto-currencies)
b) who pays?

ok lets use some maths

EDIT(after writing the below maths): seems the mining community have had a discount on mining costs compared to last time i calculated it in the summer.. so read on and enjoy

numbers we know..
hashrate: 250petahash(avg for month) https://blockchain.info/charts/hash-rate
1terrahash miner: 1kwatt PSU
transactions: 486 a block(avg of month) https://blockchain.info/charts/n-transactions-per-block

so lets do this:
486tx x 6 =2919tx per hour
250,000kwatt per hour
250,000/2919=85kwatt/tx

lets say it is 20c per kwh
=$17
which does roughly correspond to: https://blockchain.info/charts/cost-per-transaction?timespan=180day ($18-$20 recently once you add on the physical cost of a rig)

Possible miscalculation
Some research will help before deriving 0.2 kwh. Work out again the maths and you can find out how low it can go.

EDIT: Rephrase the statement

Sorry. I do not want to calculate mining profits.
I only want to know - who is paying today these $17 bucks per transaction :)

OK, I know (I think that I know) who is paying.
His name is John Smith and he thinks that his transactions are low-cost and bitcoin is awesome.
He also thinks that bitcoin will cost tomorrow more than today.
He knows nothing in cryptography, math, physics and  https://en.wikipedia.org/wiki/Conservation_of_energy (https://en.wikipedia.org/wiki/Conservation_of_energy).
He thinks that he can gain infinite profits only holding some digits in his computer for infinite time.

UPD:
OK, may be one can argue with $17 per transaction.
Let us go one step back.
Who is paying [%your number][%your currency] for 83.33kWh per one transaction?

0.2cents!! seriously.. i was thinking more along the lines of 20 cents

im sorry, i should have said.. im from the UK
http://shrinkthatfootprint.com/wp-content/uploads/2013/09/electriccost1.gif

but feel free to adjust your numbers to your country.. after all i did say "lets say" which is a term of a guess/estimate rather than a rule.
enjoy your day knitpicker!

but i did edit out the cost of a BTC, as it seems this topic just wants to concentrate on transaction cost

Geez... sorry about that. didn't meant to be so mean. I just want to point out that it could be miscalculated. I'll just edit my post and rephrase it to possible miscalculation.

Meet up with u some day on some bitcoin conference  :)

Yes. Thanks a lot for editing. This clearing our minds and our discussion.
I want to calculate transaction costs in some universal resources, which do not depend on countries and other reasons.
And compare these costs with other processing systems.

Do you see what I see?  ;D

Every holder of Bitcoin is paying, by having their coins depreciate 10% each year, perpetually, due to the cost of PoW mining. Though we have been lucky so far, since the inflow of capital far outpaces this depreciation in the past. But at some point, the inflow of capital will be unable to keep up, and we will see the depreciation,  we are possibly seeing it right now.

Isn't it a ponzi scheme?  ;D
Bitcoin transaction costs are not low! They are deferred to next levels of pyramid.
Sorry, people. You all have been goxxed  :'(
We will see the "big bitcoin fall" very soon.

You are confusing inflation with price appreciation, and your claim is based entirely on a timeframe that you selected to fit your bias.

Just as easily, you could say that Bitcoin price has appreciated by greater than 4x per year and be equally correct.

There is inflation in the money supply of Bitcoin, which was and is known (since it wasn't heavily pre-mined like other coins), math-based, predictable, and FALLING over time. Because industrial miners are profit-focused, they are selling virtually immediately to lock-in current price to pay the bills, rather than speculating about future value. This causes somewhere between 0 and 3600 BTC to be sold daily onto the market, creating natural downward pressure on price.

A year ago the hashrate was 200 times lower.
And transaction cost (calculated in kWh) was lower. Bitcoin had advantages of cheap transactions (according to the value of incoming $$).
Now the game is over.
If the miners will switch off some of their devices - the security rate will fall.
Switched off asics cost NOTHING to a potential attacker who wants to gain 51% power and create alternate chain of 1440 blocks (he pays only for electricity, hardware will cost near to zero)
Bitcoin will lose securing transaction advantages.
The end.

I do ask you again - can you plot a chart transaction cost in kWh
Do not post it to a forum! Analyze it yourself. Think.

if you simplify it down that gold is only desired as people prefer it over silver or copper because of certain features and benefits. and that the cost of mining gold is deffered onto the second level.. then you realise that what you say applies to many things.

bitcoin is not just about swapping between fiat and bitcoin. people actually have the desire to keep and use bitcoin for multiple reasons beyond swapping for fiat.

thus in the big picture of life, you can twist anything and everything to sound like a ponzi, if you simply ignore the features and benefits of the 'produce' for sale and only think about the price and the FIAT swap part.

stop being narrow mind about trying to pump and dump the price and caring about the price, and think about the features and benefits of bitcoin

It is too difficult in our world to double-spend gold or silver
It will be very easy to double-spend bitcoins if the hashrate falls x2 from the current value.  ;D
Because there will be asics switched off, ready for sell at zero-price

Yes. But these things in bitcoin will cost them much more than deals in fiat. Sorry.

Yes. But more effective ponzis live long. Less effective die. Bitcoin costs too much for community. 80 kWh per one transaction? Crazy!

I do not trade.

You are making a few assumptions that don't take into account:

1) Block size changing (amount of transactions per block increasing)
2) Asics being used for heating thus 99.9% of energy being converting into needed product and mining for BTC merely being a product that subsidizes the energy bill

You do understand that ASIC's are very cheap to manufacture once designed and tested and that we are just going through a transitional period
where the 10+ ASIC fabs are recouping initial capital investment costs right?


Potentially, but as outlined by Vitalik Buterin:

https://blog.ethereum.org/2014/06/19/mining/

There are many solutions to your proposed dilemma that can be adopted in the future. The right course of action may be doing nothing as
the laws of thermodynamics and economics will converge to automatically solve the cost issue, centralization dilemma, and environmental concerns.

This is not to say that we shouldn't be vigilant and try and promote a quicker adoption into ASIC decentralization...yes, by all means, join us and
help decentralize ASIC's.

there were not terrahash miners last year, just gigahash miners so the electric/has was more expensive.
180ghash for 1kw
1450Thash(1,449,977Ghash)
=8055kw
282 transactions
28.5kw/tx
again UK rate of electric(20c)
$5.71 per tx.

but customers do not pay $5-$20 per transaction.
think of it like gold. CUSTOMERS do not have to shave off small amounts of their hoard to pay $5-$20 in transactions.. instead the miners are given fresh gold straight from the mine. and can sell that fresh gold at the market rate.

customers however pay a spot price / (0.0001btc) which is only a few cents of shavings off of their hoard. not $5-$20

This value does not matter. Transaction rate changes very slow.
OK, what should happen to increase number of transaction twice? Do you see another China or India on our planet?
The transaction cost is too high for decentralized systems and they lose at start.
The only thing they can do - be a ponzi.

ASICs used for heating are not doing PoW.

Sorry, I do not get it.
Bitcoin users community can not pay forever for miners who converts electricity to heat.
Sooner or later you should remember about physics.

They will pay. Later. Soon.

Thinking about gold is also thinking about "cost of keeping" (I do not know right English words how to explain)
You should have a safe and a guard to keep your gold piece.
Do not ever forget that someone always pays expenses.

 The costs are extremely low compared to other secure payment infrastructures but, yes, the cost per transaction is being subsidized by new investors at the moment.
The cost per transaction ultimately is determined by this formula:

(Labor+ASIC investment+Electricity) / total transactions per block = cost per transactions

The Size of the block can be changed with a few lines of code that would dramatically lower the "cost per transactions" if transaction volume spiked.




Yes, you don't understand. ASIC's doing PoW mining are 99.9% efficient at converting electricity to Heat so any appliance that needs to heat something that uses ASIC's as the heating element
are essentially subsidizing the electrical costs or benefiting the users electric bill and environment. Future applications for ASIC's PoW miners include hot water heaters, space heaters, home heaters, dehydrators , ect....

You really need to do a bit more research into the problems and solutions to PoW:

https://blog.ethereum.org/2014/06/19/mining/

One potential solution involves "doing nothing" because the laws of thermodynamics and economics will automatically solve the cost issue, centralization dilemma, and environmental concerns.

My point of view that "cost issue" will be solved at "zero point" (no transactions, no value, no safety)

Your opinion is clear. Can you coherently express why you think that is a more likely probability rather than the one of the many solutions expressed below?
https://blog.ethereum.org/2014/06/19/mining/

Bitcoin has reached a critical mass. We aren't going to let it die. We are going to make sure it succeeds and will reach consensus on the needed changes to make it happen
when they are needed.

Sorry, you are wrong. Either a device is PoW-device or device is heating/blowing/whatever-another-useful-thing-doing device.
There is no safety at all when the network consists from such multi-purpose devices.

If you pay nothing for security - you gain nothing.

https://i.imgur.com/kCMhErX.png

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

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.

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.

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.

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.

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.

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?

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.

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.

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.

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.

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!

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...

Excellent idea!

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?

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 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.

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

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.

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?

You can find the truth by investigating epistemology, philosophy and critical reasoning.

Here are some questions to ponder while you discover these answers for yourself:

Do you own yourself and the effects of your labor?
Do you believe in the Non - Aggression principle?
Why is theft wrong for an individual but right when a state government is involved(or group of people)?
Why is murder wrong for an individual but acceptable when a state government is involved(or group of people)?
Why is kidnapping wrong for an individual but just when a state government is involved(or group of people)?
Why is torture wrong for an individual but needed when a state government is involved(or group of people)?
Is it possible for governments to exist without centralized monopolies on the use of violence?

As far as I can fight for them with the somebody who has another point of view

Please, give me more concretic. Does the wolf something wrong when it catches and eats the rabbit?
Is non-aggression involves also against eating of tomatoes?

It depends on consensuns rules. In our countries societes the consensuns is that thefts are doing "wrong"
And there are no such things as "thefts", "stealing", "punishment" in bitcoin community/protocol

Because the majority is always right. It can not be wrong.

Same answer

Same

It depends of the majority opinion. I think, it is possible. But I can not give you good example. May be I am wrong.

Yes, bitcoin does have ethical and political implications. Yes, with the above set of inconsistent and relativistic morals you should fear and hate bitcoin.

You have a disturbing system of morality and it is no wonder why you hate and attack bitcoin. I don't wish harm upon you, but hope you will reconsider
why you believe it moral and just to kill, torture, kidnap, and steal when its a group effort. To me those actions are immoral for an individual or group.
Goodbye.

If you missed these articles
http://www.coindesk.com/author/hass-mccook/

Great!
But these articles were written in July. Bitcoin hashrate doubles since.
I think we should double the numbers in "bitcoin" rows, shouldn't we?

amaclin is missing the whole point of bitcoin
amaclin is missing the whole point of economy
amaclin is missing the whole point of deflation
amaclin is missing the whole point of many things

and thus, im bored.. moving on. you cant teach some. all you can do is leave them to figure it out for themselves

Who pays?

Holder
Miner who mine with loss
People who bought shares of mining companies

You are right, the hashrate has gone far to far. There is no alternative that this bad constellation will have no good end for the miners. They think the more the hashrate grows the higher the price will be, but currently the opposite matches. Maybe you look for more sustainable cryptocurrencies.
 
But on the other side mining has been not profitable for a long time. So miners have always paid the bill in expectation of a future rise of the price. The new thing is that they have to buy asics first to do this.

Somewhat dismayed that some have fallen for the original poster's shallow tactic of replacing one lost argument for one of a completely different construction.

If you don't believe me or don't get it, I don't have time to try to convince you, sorry.

@amaclin

I completely understand your thesis, and I have carried this view for some time.

You might receive a better reception on the "Economics" board.

At least part of the problem is that ASICs themselves were sold as part of a "ponzi" scheme,
hence anyone buying a miner was donating future mining profits to the hardware companies.

The best outcome is for mining to once again become a retail activity hence only the marginal
cost between fossil fuel heating and electrical heating gets added to the cost of transactions.

Until something changes, the flow of bitcoin from the miners has to balance the increase in the
rate of transactions. Changes to that, of course, will move the price of bitcoin up or down.

According to the ATM Industry Association there are about 3 million ATMs installed worldwide. Unfortunately I can't find the article at their site where I saw this number approximately a year ago, but there is another one that predicts the number of ATMs installed to be 3.5million by the 2017: https://www.atmia.com/clientuploads/b_newsletters/apr13/withdrawals.html

Let's say that we have 3 million ATMs, half of which is switched off for any reason (malfunction/whatever), so let it be 1.5 million.
I would not make a mistake if I assume that each ATM draws at least 100W from the wall while it just waits for the customer (but I suspect it is more than 100W), so 1.5 million  ATMs consume 150.000 kWh. This is not including expenses to maintain the rest of the infrastructure. Who does pay these expenses? You. The cost is hidden in the prices for goods and services: every merchant pays fees to the service provider, who in turn pays fees to the network.
Don't tell me that the number of transactions the Visa/MC/e.t.c. network process times bigger than the bitcoin network handling to the moment. The hashing power that maintains bitcoin network security does not depend on the number of transactions included into the blocks.

Using bitcoin and not contributing a single cent to its network security you may send a transaction with zero fees if the time to process is not important and it will be processed sooner or later. For tiny 0.0005BTC you get your transaction processed reasonable fast (anyway faster than SWIFT transfer)

Who pays for this? Geeks, enthusiasts of different kind, investors who believe the potential of the Bitcoin.

more like 300W+/ATM

All the ATMs use very old hardware (5+ years). As windows XP became EOL, there was some publicity about this but afaik ms extended the support for clients operating atms.

I intentionally took the lower numbers.

What are you talking about? there's no proof the heat can be utilized efficiently, other than heating the facility in winter, all the big mining farms do not try to utilize the heat at all. Also even if the heat is 100% efficiently utilized, that only balance out the electricity cost. The hardware cost is still there, and most likely higher because now you want to use the heat, which means additional hardware components.

There's also no proof there's political expense associated with DPoS. I'm a delegate in btsx, and I didn't spend anything to get voted in. Also, even if there is expense, as long as it stays within the eco-system, I don't see any problem with that. Unlike Bitcoin PoW, which transfers wealth out of the eco-system, into the pockets of hardware vendor and electric company.

Yes. It is basics of physics.

and this is not "work" in terms of "proof-of-work"

Perpetuum Mobile? :o Again? Oh, no!

Bullshit, the energy being there doesn't mean it can be easily 100% efficiently utilized. Try convert sunlight into electricity with 100% efficiency? or build a simple household boiler with 100% efficiency?

In terms of heating the facility, it's usually a facility that doesn't need heating, most likely it needs cooling. Also it works only in winter.

BTSX is so small that the popularity contest doesn't involve much if any campaigning right now, just like if you ran for a local council position in a small town. There isn't much competition if any and the position typically just fills in the person of the best known name. With any political enterprise, as the stakes and interests scale up so do the campaign costs. As DPoS advocates indicate themselves, they expect industry leaders and prominent people who are not anonymous to become delegates(For social and security reasons). Controlling the currency would than be an important step that would indeed be lobbied for with millions of dollars spent on elections.

Current Fiat technically is a form of inflationary PoS. I could imagine in the future that some governments will likely co-opt an inflationary DPoS as well to give the illusion that people have control of their monetary system, much akin how democratic republics give the illusion that people have control of their representatives.

 I was just extrapolating the data and playing a "what if" BTSX overtook Bitcoin scenario. Where you are correct is BTSX will likely maintain extremely efficient and low costs for the election process. The reason for this is because it will be unlikely to ever grow much larger for many reasons I previously mentioned.



Strawman much? Who ever claimed 100% efficiency? ASIC's are 99% efficient at converting electricity to heat and the initial production costs need to be amortized across all units.

Everyone worldwide needs to reheat food, dehydrate items , dry clothes, heat water year round. Most people worldwide need to heat their homes during half the year, some people need to do so most of the year.

I know You love to make up scenarios that simply doesn't exist in reality. You imagined "security holes" with PoS that doesn't exist in reality. You imagined "election costs" with DPoS that doesn't exist in reality. Now you are imagining "space heater", "water heater" that are PoW ASIC machines, that doesn't exist in reality. You know why? because they are horribly expensive, and inefficient to compete with mega mining farms, because as heaters, they can not be turned on all the time, therefore there's no way for them to ever compete with real mining farms in terms of efficiency.

Let's just keep the topic on something that does exist in reality, that is the $500 million PoW expense that is staring Bitcoin holders in the face!

None of this involves fantasy, but a recognition of current strengths and weaknesses and a discussion of future solutions.

Election costs are well known and studied. Are you assuming that interests won't compete for delegate seats like they do for normal politics?

ASIC costs and production isn't unique to Bitcoin. You realize that these are well known and documented costs and will naturally shrink with competition and scale. Why do you think you can buy a 20 dollar burner cell phone now? You do realize ASIC's exists in many cheap 10-20 dollar childrens toys, right?

How much is the campaign cost to be elected as the Secretary-general of United Nations? show me your "well known study".

per unit cost will shrink in ASIC, the total cost of PoW CAN NOT shrink, otherwise how do you secure the network against 51% attack? PoW expense will have to be more and more expensive as Bitcoin grows in scale.

The Secretary-general isn't elected but appointed:

http://www.un.org/sg/appointment.shtml

....by elected officials who do ultimately have to campaign. So the answer is either a very costly sum of the campaign costs of all those that appointed them or N/A.

Or are you insinuating DPoS in the future will have appointed positions rather than elected positions?



Yes, I do expect the hash rate to increase , and electricity usage increases. This is exactly what will force decentralization and miners to need to use ASICs as products which create useful heat energy with the side effect of free PoW which can than in turn be used to subsidize the energy costs and amortize the unit costs. I don't get why you fail to understand the economics.  

Let me add - these funds were spent most for processing and securing transactions to Satoshi Dice and other gambling.  ;D
Welcome to bitcoin!

OMG. The appointment of secretary general is an election process! with candidates (http://www.unsg.org/candidates.html)!, how much does it cost to be a winning candidates?

Again, you are questioning reality with your imagined scenario/economics. If it was indeed profitable, it would be in mass usage by now. The REALITY is that it is NOT profitable to run a ASIC as a heater, because it CAN NOT be turned on all the time, therefore the hardware cost can not be easily recouped. It has no hope to compete against a full time mining farm. But hey if you think you are smarter than everybody else, go ahead and build your ASIC heater, and let me know of your huge product success.

Yes, that is what the link I sent you described. They are appointed through an election process involving elected officials who ran popularity campaigns. This no way is akin to the general public or users electing an official directly.

Yes, if BTSX simply has small election of government and industry insiders appointing DPoS delegates the election costs are minimal. I agree. Is that what you envision of BTSX?

oh, so only general public election are considered election now? BTSX delegate is elected by a group of stakeholders, it's not a general public election. It's more like a IEEE or ICANN board election, and how much does it cost to be elected as IEEE or ICANN board member?

Some heaters are on all the time, but lets assume that we have intermittent Asics competing with full time Asics for a moment.

Option A-
ASIC hot water heater running 20% of the time cost efficiency = (amortized costs of design, testing, build, and shipping / millions of units) - 20% normal rate of transaction fees and block rewards compared to standalone miners

Option B-
ASIC Standalone miner running 100% of the time cost efficiency = (amortized costs of design, testing, build, and shipping / thousands of units) + electricity costs + possible costs for cooling


Do the math . What is more efficient?

P.S... remember in option A electricity isn't included because its a needed product already consumed.

Where can the general public vote for an IEEE  or ICANN official? Are there polling booths?

Yes, I repeatedly claim that BTSX will likely have cheap and efficient election costs. This is because the stake holders will remain relatively small in numbers. If those stake holders increase to lets say 380 million than you should expect the costs to increase as well if they all can vote.

They can not be on all the time, why would you have them on when the temperature is above 76F? Waterheater can not be on all the time neither, they run in cycles, otherwise you are just wasting water/energy.

The problem is when you can't have them on near100% of the time, you could never recoup your hardware cost, because like you said, new ASIC will be come cheaper and more efficient, therefore driving up the difficulty, and your old hardware, when not on 100% of the time, will never recoup the cost. Which makes your ASIC part of the investment a loss when competing against a real mining farm. So you basically bought a very expensive space heater/water heater, when you could have gotten a regular one cheaper, even considering the total cost of ownership.

Again, like I told you weeks ago, when your imagined scenario doesn't exist in reality, you need to first question your scenario, not question reality. Also again, if you truly believe in your scenario, then build the product, and let me know of your huge success.

In the equation above the ASIC hot water heater are on 20% of the time, silly. The transaction rewards and block rewards merely subsidize the electricity or amortize the unit cost. They don't need to pay 100% of the unit costs or electrical costs as that is just a bonus. People need hot water regardless, and some  ;) people like hot water when its overcast or in the morning or at night.

Do the math. What is more efficient?

They don't need to pay 100% of the unit cost, but they do need to pay 100% of the ASIC component cost, otherwise you are just buying a more expensive heater for no reason. The problem is, with 20% up time, there is no hope of ever paying back the 100% ASIC cost, even with the electricity cost savings. Therefore, you are indeed just buying a more expensive heater(that requires constant on internet) for no reason.

Ahh... you are making the mistake assuming ASICs cost a lot to manufacture once the initial investment is amortized. It is merely a matter of scale.

10-20 dollar children's toy ASIC doesn't consume 1200W electricity. If you are going to use them as heaters, you need a ton of ASIC in there. These ASIC will make the heater cost extremely expensive compared to a regular heater.

Just wanted to make the point that transaction cost isn't measured in kWh, it's measured in plain kW since there is a finite amount of time it takes a transaction to be mined.

Exactly, and more asics = more hashing power =  more payback. That 10-20 dollar toy cost is mainly due to marketing, distribution, and profits.... not for the "expensive" asic inside.

I'm going to leave off this conversation here as we will let history be the decider.

What is the conclusion?
Is BTC's cost per transaction high?

This is the exact reason why it is measured in kWh (energy) and not kW (power).

It takes an amount of Energy to mine a block, not Power. Power is not descriptive as you could have 1kW running for 10 minutes or 10kW running for 1 minute and you would have the same result.

How could Power (kW) be used to measure the transaction fee? Could you explain what you meant?

Ignore me, I'm talking rubbish in this case. Yes, you are correct, kWh is the right unit. :)

its obvious that the transaction cost is swallowed up by the miner who is actually paying the elecy bill for doing the mining. so this transaction cost is actually simply converted from elecy $ to BTC as a reward. its just conversion of wealth. buyer/seller of bitcoins dont lose anything. ether way - think of all the banks, printing machines, infrastructure that is out there to support fiat currencies. crypto wins in any case.

Correct.
In no way is this to be confused with the Transaction fee that a user may pay for sending Bitcoins.

The problem is, we can rapidly pass 10x and goto 100x or 1000x before the network is ready