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Author Topic: With great power comes a great electricity bill  (Read 4037 times)
teukon
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March 24, 2015, 09:50:31 PM
 #21

Miners are required to verify new transactions; the reward was to get them started.

Having one miner actually do the work (the block winner) and all the other miners (block losers) waste their efforts is the definition of "inefficiency".

http://www.merriam-webster.com/dictionary/inefficiency

Maybe Satoshi owns a lot of stock in power companies. Shocked


This is indeed a valid definition of "inefficiency".  However, you are the one that judiciously introduced the term "waste" into your description of the mining process.  Your assertion that Bitcoin mining is inefficient is simply built upon your assertion that Bitcoin mining is wasteful.

Also, I don't understand the meaning of "actually do the work" here.  Are you suggesting, for example in the case of block #300001 appearing 19 minutes after block #300000, that the block winner did 19 minutes of actual work?  Surely all but one of the trillions of hashes performed by the block winner in this period were every bit as wasted as the unsuccessful hashes of all block losers.  Surely the block winners unsuccessful hashes were every bit as wasted as the unsuccessful hashes they performed before block #300000 (when they were themselves a block loser).
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xhomerx10
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March 24, 2015, 09:53:23 PM
 #22

 Hass McCook (MBA from University of Oxford) did a 5 part series evaluating the sustainability of the Bitcoin network against other monetary institutions for Coindesk.  The conclusions are here:  http://www.coindesk.com/microscope-conclusions-costs-bitcoin/

 I'm pretty sure the costs would scale downward with greater efficiencies in mining and upward with a higher bitcoin valuation.  Already, you can see the difference in electricity costs over less than one year.


 



Sidehack is making progress! Buy him a burger to keep his energy up - 1BURGERAXHH6Yi6LRybRJK7ybEm5m5HwTr
David Rabahy
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March 24, 2015, 09:58:26 PM
 #23

Ok, look.  Everyone stop mining except one guy (I'll volunteer) thereby minimizing/nearly eliminating the "waste"; well maybe we should have a few guys spread out for safety.  Those guys distribute the block reward and transaction fees gained in some, er, fashion to everyone that wants some.  Oh, the devil is in the details, isn't it?
worhiper_-_
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March 24, 2015, 09:59:43 PM
 #24

Some of the best miners achieve 1KW with 1TH.

The network has 354142 TH/s at the momment.


S5 =Hash Rate: 1155 GH/s ±5%
Power Consumption: 590 W (at the wall)
2 Th or so with 1kw

Oh lol, I didn't realise there are so good miners now...
Come-from-Beyond
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March 24, 2015, 10:29:52 PM
 #25

I'm sure if you bothered to search you would have found plenty of info on the topic, but I fear you have other reasons for making threads like these.

You are right, I'm trying to assess feasibility of existence of 100 billion IoT-devices utilizing blockchain tech.

PS: http://public.dhe.ibm.com/common/ssi/ecm/gb/en/gbe03620usen/GBE03620USEN.PDF
MicroGuy
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March 24, 2015, 10:56:09 PM
 #26

Satoshi has conceded in the past that Bitcoin mining does in fact "waste" power except in those cases where the computer rig is used to heat a dwelling.



https://bitcointalk.org/index.php?topic=721.msg8431#msg8431

"The Internet unshackled information, Satoshi Nakamoto unshackled money. And money makes the world go round."
Pokerrock
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March 24, 2015, 11:37:47 PM
 #27

Is there somewhere statistics on Bitcoin miners electricity consumption?

Read this ....
"At its peak, the Changcheng factory churned out 100 bitcoins a day at each of its six sites, but the group of entrepreneurs is finding that as the level of difficulty and computing power increase, the ratio is gradually changing. The process uses about 1,250 kilowatt-hours of electricity, and the group's monthly electricity bill is about $80,000. They are currently mining from 20 to 25 bitcoins a day."

Here - http://www.mining.com/inside-a-chinese-bitcoin-mine-20076/
becker
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March 25, 2015, 12:14:27 AM
 #28

I agree, but we shouldn't start with bitcoin inefficiency we should start at the big wasters.

We have Visa, Mastercard, Discover Card, American Express, all wasting millions a month on advertise to compete for the reward of finding customers. This is HUGE waste, also they all have duplicate systems. They employ way more people than necessary to get the interest reward and find customers. I'm guessing the savings by eliminating all these competing companies to one would save BILLIONS a year worldwide.

Next Insurance companies, man there are like a 1000 insurance companies out there all competing to sell almost identical products!! Again save BILLIONS!!!! a year by streamlining all insurance companies to 1 central insurance company.

Next Retail, Target, Wal-Mart, K-mart, CVS, blah, blah, blah, all attempting to get that customer to come in their doors mostly selling the exact same shit, so inefficient. Imagine how many stores we could shutdown, how many distribution networks we could streamline, backend computer systems, redundant semi-trucks running the same routes. It's absurd! We could save 10's of Billions a year streamlining that mess.

Oh man we are getting somewhere now, this centralized control thing is great.

Next, it's so inefficient and a waste of time to have elections every 2 years, we could streamline politics by assigning 1 ruler with complete control and power. We could literally get rid of 1000's of politicians and 10000's of thousands of government workers, lawyers, etc....

This is fun, I'm fixing the world!
Tobo
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March 25, 2015, 01:49:30 PM
 #29

Off topic question: When the BTC mining period ends in many years and most of the miners leave, will the BTC network still be as secure as it is today?
johnyj
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March 25, 2015, 02:05:38 PM
 #30

Except it couldn't be called decentralised network then.

Incorrect. You don't have to mine to preserve the blockchain. The flaw is in the reward system design. It encourages waste.

The blockchain design is flawless, electricity spent is not a waste but a must. It is a twisted view from today's fiat money system created this waste debate

Money is no different than any other well traded commodities like petroleum or electricity, in order to have value, it must have demand and limited supply and eventually the cost will decide its face value

It seems that fiat money is an exception: You don't need to waste any energy to create fiat money. But that's also the reason it should worth nothing. The reason fiat money still worth somthing is because its monopole: In order to give fiat money value, you must pass a law to make it the universal transaction medium in the country, and the cost to pass that law is a war

If war is not possible, then in a market of free currency competition, the currency that cost most to produce will have the most value: The cost is an indicator of public interest and the degree of competition

In free market, if a coin costs much lower than its face value, then almost everyone will try to produce these coins and sell them, until its face value get close to the cost

You can also implement a scheme like POS, preventing late comers to crash the price. But in free market, if the scheme unfairly benefit exiting holders, no one will join the game. Bitcoin does not unfairly benefit exiting holders, since every holder are exposed to large swings of exchange rate and have to take risk, many early adopters have sold their coins during a downfall just because they entered in a much higher price during a bubble

Come-from-Beyond
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March 25, 2015, 02:21:56 PM
 #31

electricity spent is not a waste but a must.

Bold statement, care to prove?
johnyj
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March 26, 2015, 02:57:43 AM
 #32

electricity spent is not a waste but a must.

Bold statement, care to prove?

In free market, if the production cost of a coin is much lower than its exchange rate, then almost everyone will try to produce these coins and sell them, no one will buy. And true believer will not buy but mine. That is simple arbitraging, free money to take, people could constantly sink the exchange rate, and still make money on the way down. That happened during 2014

The cost consists of two parts: ASIC miners and space/electricity. Technology is cheap, material is cheap, once designed, ASIC miners can be produced in large scale with a very low cost, then the only thing that will prevent people from accumulating more and more ASIC miners is the difficulty and electricity cost

Once the mining cost is getting close to coin's market value, arbitraging will stop and more and more people will turn off their machine and buy bitcoins instead, this will increase the purchase support and decrease the sell pressure, make the exchange rate stable. So electricity cost basically decided bitcoin's exchange rate, and is also a good indicator for future bitcoin exchange rate

MicroGuy
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March 26, 2015, 03:15:18 AM
 #33

Off topic question: When the BTC mining period ends in many years and most of the miners leave, will the BTC network still be as secure as it is today?

This is unknown and depends on many variables (future btc price, transaction volume, code changes, etc.)

The biggest threat to bitcoin (at the moment) is Satoshi's 10% stash and the centralized super-powers of the core developer(s). If these problems can be addressed, then the bitcoin network might be even "more secure" after the block rewards cease to exist.

"The Internet unshackled information, Satoshi Nakamoto unshackled money. And money makes the world go round."
ShetKid
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March 27, 2015, 05:16:31 PM
 #34

Progress typically requires an expenditure of some kind of energy. I'm sure if you bothered to search you would have found plenty of info on the topic, but I fear you have other reasons for making threads like these.
Want to go in depth on that a bit? You think there is an alternative motive? Maybe trying to push a POS coin or push the Bitcoin should POS debate?
Bitcoin should already be made POS by now. I still don't understand the need to spend so many resources on just mining bitcoin.

Come-from-Beyond
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March 27, 2015, 05:39:14 PM
 #35

I still don't understand the need to spend so many resources on just mining bitcoin.

Guys who shape future of Bitcoin invested too much money into ASICs.
bgibso01
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March 28, 2015, 12:18:46 AM
 #36

All of this is done just with greed.  The network could be secured with just x number of people (20,000) running one usb stick each.  The diff would be low and the electricity use would be low, but no one would make money except those 20,000.
teukon
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March 28, 2015, 01:56:49 AM
 #37

The biggest threat to bitcoin (at the moment) is Satoshi's 10% stash and the centralized super-powers of the core developer(s). If these problems can be addressed, then the bitcoin network might be even "more secure" after the block rewards cease to exist.

Interesting that you consider Satoshi's 10% stash a threat even in the long term.  Tell me:  Do you think Bitcoin would be more valuable today if Satoshi had dumped almost all of his coins in 2012?  Do you think that Bitcoin would be more successful today if, all else equal, this "threat" had been nullified sufficiently many years ago?
MicroGuy
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March 28, 2015, 02:23:52 AM
 #38

The biggest threat to bitcoin (at the moment) is Satoshi's 10% stash and the centralized super-powers of the core developer(s). If these problems can be addressed, then the bitcoin network might be even "more secure" after the block rewards cease to exist.

Interesting that you consider Satoshi's 10% stash a threat even in the long term.  Tell me:  Do you think Bitcoin would be more valuable today if Satoshi had dumped almost all of his coins in 2012?  Do you think that Bitcoin would be more successful today if, all else equal, this "threat" had been nullified sufficiently many years ago?

This has got me thinking.

Maybe it's the combination of the large stash of coins he mined (while monopolizing the network), in conjunction with the possibility that he could decide to resurface with those coins and return to "power". He would be crowned the king after-all.

I can see in my mind a few scenarios where he could threaten the stability and security of the network if he decided to play his hand a certain way. Not a very likely possibility, but one that should probably not be ignored.

"The Internet unshackled information, Satoshi Nakamoto unshackled money. And money makes the world go round."
alh
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March 30, 2015, 03:58:48 AM
 #39

All of this is done just with greed.  The network could be secured with just x number of people (20,000) running one usb stick each.  The diff would be low and the electricity use would be low, but no one would make money except those 20,000.

I wonder if this what it looks like after a few more halvings and the Bitcoin reward per block is down to 1 BTC or less. Either the BTC price will have to "astronomical", or there will have to be a great deal hardware shed to keep the costs down if miners need to subsist on transaction fees.
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March 30, 2015, 08:33:00 AM
 #40

Satoshi has conceded in the past that Bitcoin mining does in fact "waste" power except in those cases where the computer rig is used to heat a dwelling.



https://bitcointalk.org/index.php?topic=721.msg8431#msg8431

I think the last paragraph says it best.... In the beginning everyone will mine and later only the people with the cheapest electricity in the coldest places will be left.

We have to appreciate Satoshi's vision and what he predicted will happen in the future.

Is it a waste..? Nope... not if you use it wisely. {Heating}  Wink

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