Resources are being utterly and completely wasted on mining Bitcoins

[ranger]

Hi all, yesterday it occurred to me that we are all wasting a lot of resources on mining bitcoins, in a way that shows more than a little similarity to the prisoner's dilemma (http://en.wikipedia.org/wiki/Prisoner's_dilemma).

I wrote about it here: http://www.colorfulwolf.com/blog/2011/05/31/resources-are-being-utterly-and-completely-wasted-on-mining-bitcoins/
Would love to hear your thoughts.

[kiba]

My writer have the opposite thought: http://bitcoinweekly.com/articles/the-wasted-electricity-objection-to-bitcoin-part-i

[elewton]

In short, it's not being wasted.

If all the miners used a mining daemon that limited itself to 1%, not only would someone come along and use the full GPU to profit themselves, but it would make it easier to attack the network.

Bitcoin is designed to operate without trust.  As such, it assumes that everyone will be trying as hard as they can.

[realnowhereman]

Since there is no way to know how many failed attacks there have been on the bitcoin block chain (i.e. rogue miners trying to out-hash the honest miners) there is no way to measure how much waste there has been in computing the hashes that secure the chain.

[kwukduck]

Ever stopped to think what resources are consumed by 'normal' money?

[zaxx]

Ever stopped to think what resources are consumed by 'normal' money?

I totally agree.. I was thinking about this issue of waste. I realised that putting energy and cpu power into a defensive system is a great idea. Once you combine the concept with a distributed system it basically turns miners into a defensive crpto army that is voluntarily paid for by the transaction fee. Almost like armies defending trade routes of a traditional trade system.

I just wrote something on it

http://servanlog.blogspot.com/2011/05/infostate-and-colour-of-money.html

[barbarousrelic]

Ever stopped to think what resources are consumed by 'normal' money?

I imagine that all the energy required to produce the nation's bank vaults, from mining the iron to forging the steel to shipping them to their installation at banks, is more than the energy 'wasted' on the Bitcoin network so far.

edit: I originally said "less" when I meant to say "more." Whoops.

[lysol]

I imagine the same kind of waste of resources took place during traditional gold rushes. It's all meaningless though -- the bitcoin network isn't threatened by the bad decisions by miners because of the self regulation.

[evoorhees]

Hi all, yesterday it occurred to me that we are all wasting a lot of resources on mining bitcoins, in a way that shows more than a little similarity to the prisoner's dilemma (http://en.wikipedia.org/wiki/Prisoner's_dilemma).

I wrote about it here: http://www.colorfulwolf.com/blog/2011/05/31/resources-are-being-utterly-and-completely-wasted-on-mining-bitcoins/
Would love to hear your thoughts.

Your essay answered it's own question. Why is all this energy being "wasted?"  It's not being wasted. Large energy use makes it hard to attack the network. If we all used 1% of our computing power instead of 100%, it would be substantially easier to attack the network. Simple concept, and rather than a great prisoners' dilemma example, it's a great example of Smith's "invisible hand." All us miners, in our selfishness, compete against each other to solve more hashes and earn money. By so doing, without conscious intention, we are making the network substantially more difficult to hack.

Energy use for energy use's sake would be silly. Energy use for security's sake is valuable, and thus not a "utter and complete waste" as you claim it to be.

[MoonShadow]

Ever stopped to think what resources are consumed by 'normal' money?

I imagine that all the energy required to produce the nation's bank vaults, from mining the iron to forging the steel to shipping them to their installation at banks, is less than the energy 'wasted' on the Bitcoin network so far.

Then you have no idea how much energy it takes to just refine iron.

[MoonShadow]

Would love to hear your thoughts.

My thoughts are that you are just another newbie who comes along after hearing a little bit about Bitcoin and then jumps to the conclusion that you, and you alone, have discovered the Great Bitcoin Flaw (tm).

Perhaps there needs to be a new rule, that newbies cannot post until their account is at least a week old.  Of course, that wouldn't have helped out here, but still...

[triforcelink]

The definition of 'waste' is subjective. Just because the world is not doing what one thinks the world SHOULD be doing, does not make it a bad place (well, maybe a bad place to you)

[ene]

OP has updated his blog post admitting that he was wrong, so we might as well just close this thread now.

[Quantumplation]

Ever stopped to think what resources are consumed by 'normal' money?

I imagine that all the energy required to produce the nation's bank vaults, from mining the iron to forging the steel to shipping them to their installation at banks, is less than the energy 'wasted' on the Bitcoin network so far.

Yes, because the raw coal used to fuel forges for HUNDREDS OF THOUSANDS OF BANKS ACROSS THE WORLD is less pollutionary than 1 years worth of mildly increased electricity usage.  Not to mention the pure GAS GUZZLERS that are required to carry massive amounts of steel and specialized machinery required to produce such secure bank vaults.

Quit this purely conjectural bullshit and show some actual numbers.

There is 39.3 kJ/g energy from combusting coal.  It releases 2.0 grams CO2 per gram of coal. (source
Using this graph, and finding an approximation on wolfram alpha (notice that 1*10^12, or 1 thash/s lines up at a relatively easy to judge spot on the curve, and i'm going from 0 to 85.134 where the graph is equal to 4*10^12, or 4thash/s, the estimated value right now), we find that the average value is 363.637 ghash/s over 2 years.  Using the calculation here,

31.42 billion MHashs/day * 0.024 kWh/day per MHash = 754 million kWh or 2714000000 megajoules

Considering steel requires roughly 8,000 MJ/ton of steel to produce, the entire energy used in the bitcoin network could produce 339250 tons of steel.

Considering there are a staggering number of secure vaults (In the hundred thousands across the world), each of which is several hundreds of tons, 300,000 tons of steel doesn't seem like much.  And that's not even accounting for the mining, shipping, construction, the energy used by security systems, etc.

EDIT: Dear god I spent way too much time on that.

[barbarousrelic]

Ever stopped to think what resources are consumed by 'normal' money?

I imagine that all the energy required to produce the nation's bank vaults, from mining the iron to forging the steel to shipping them to their installation at banks, is less than the energy 'wasted' on the Bitcoin network so far.

Then you have no idea how much energy it takes to just refine iron.

I mixed up my words. I meant to say "more" not "less."

[ene]

(My time is precious, if you want to make it up to me, you can point your miner at 1Mgpvj55TK6t8bSzgUabSBjUTZb6ohNVXD for half an hour or simply donate a bit and I will <3 you forever and ever )

Seeing as my miner hasn't generated any coins in the last half hour, I went back in time half an hour and changed the target address. I just changed it back right now.

Happy? 

[benjamindees]

For comparison, right now the Bitcoin network uses about the same amount of energy as the Bank of America Tower in New York.

http://en.wikipedia.org/wiki/Bank_of_America_Tower_%28New_York_City%29
http://www.solaripedia.com/13/173/1728/bank_of_america_tower_cogeneration_diagram.html

[Quantumplation]

(My time is precious, if you want to make it up to me, you can point your miner at 1Mgpvj55TK6t8bSzgUabSBjUTZb6ohNVXD for half an hour or simply donate a bit and I will <3 you forever and ever )

Seeing as my miner hasn't generated any coins in the last half hour, I went back in time half an hour and changed the target address. I just changed it back right now.

Happy? 

=(

[jimbobway]

I imagine the same kind of waste of resources took place during traditional gold rushes. It's all meaningless though -- the bitcoin network isn't threatened by the bad decisions by miners because of the self regulation.

It doesn't matter if you're moving dirt to find gold or solving puzzles.  Work is work.  Work is money.  Time is money.

[who_knew]

At the risk of getting yelled at by the experienced members...I would agree the resources are being wasted.

Would you not get the same outcome if the hashing difficultly remained fairly low but the generating of blocks was throttled by dispersing real work to miners some how? Some sort of hybrid bitcoin/folding@home project. So as more miners come on line more folding happens and the blocks keep coming in a the same rate. I would imagine someone would even pay money for such crazy processing power. Just throwing that out there without a full understanding of how this works.