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Author Topic: Suppose bitcoin does get to be $100,000. What happens to electricity costs?  (Read 5124 times)
hooliehoop
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March 22, 2013, 01:27:18 PM
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If bitcoin gets to $100,000 as people here like to think, that would mean mining would be worth $2.5 million. At that point, mining would have to stabilize at a point where $2.5 million worth of electricity is used to come up with a blockchain every few minutes. That means that a ridiculous amount of electricity would be used every day just for bitcoin mining. Wouldn't that drive up electricity costs for everyone else?
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There are several different types of Bitcoin clients. The most secure are full nodes like Bitcoin-Qt, but full nodes are more resource-heavy, and they must do a lengthy initial syncing process. As a result, lightweight clients with somewhat less security are commonly used.
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cbeast
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March 22, 2013, 01:36:15 PM
 #2

Would that mean people only mine gold just to make enough money to pay for their fuel? You also have to pay for bandwidth, equipment, insurance, maintenance, and administrative costs. Bitcoin mining will become a big business enterprise.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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March 22, 2013, 01:37:12 PM
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i dont think so. We are getting better and better cpu's/gpu's that are both faster and use less power.

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March 22, 2013, 01:41:03 PM
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i dont think so. We are getting better and better cpu's/gpu's that are both faster and use less power.
+1 nail on the head..
Technology will advance multiple times within the next few years, todays best GPU is next years bottom range..

`Kel

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March 22, 2013, 02:22:01 PM
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i dont think so. We are getting better and better cpu's/gpu's that are both faster and use less power.
+1 nail on the head..
Technology will advance multiple times within the next few years, todays best GPU is next years bottom range..

`Kel

I used to feel that major computing tech advances came mostly from military and video games...
Looks like BTC and other cryptoC's are starting to directly influence the drive to improve and develop technology in a significant way.
I see alot of talk about where BTC and it's value will be in 1,2,etc years...
but DAMN think of what kind of mining tech will be out there! 
That is my soft analysis that has me interested in BTC again... that and the price change or course.
 Smiley
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March 22, 2013, 02:32:53 PM
 #6

I hope they continue to rise over $500 - 1BTC, I put leftover of savings into it, I have roughly 10BTC in cold storage but brought in at $50+

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March 22, 2013, 03:41:20 PM
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If bitcoin gets to $100,000 as people here like to think, that would mean mining would be worth $2.5 million. At that point, mining would have to stabilize at a point where $2.5 million worth of electricity is used to come up with a blockchain every few minutes. That means that a ridiculous amount of electricity would be used every day just for bitcoin mining. Wouldn't that drive up electricity costs for everyone else?
I haven't seen anyone with realistic expectations saying that bitcoin will get to $100,000 per BTC this year.  Have you?

In 4 years the block reward will be 12.5 BTC per block.  In 8 years it will be 6.25 BTC per block, in 12 years it will be 3.125 BTC per block.  The block reward will continue to be cut in half every 4 years until it is 0.00000001 BTC (in about 132 years).  Meanwhile inflation in fiat currencies will continue to drive up the price of electricity.

So, in 20 years the blockchain may produce 0.78125 BTC every 10 minutes, and that might be worth $78,125, but $78,125 worth of electricity 20 years from now might not be much more than the amount of electricity we get today for $9,765 (assuming a fiat inflation rate of 5.5%).

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March 22, 2013, 04:32:52 PM
 #8

Quote
I haven't seen anyone with realistic expectations saying that bitcoin will get to $100,000 per BTC this year.  Have you?

Not realistic but Max Keiser with an RT audience of 550 million is telling the world 1% of global trade = $100,000 bitcoin.

If we had 1% of world trade a day wouldn't be long enough to sync the block chain and the system would fall behind on processing transactions I suspect. Already the blizzard of micro transaction from Bitcoin betting sites is enough to mess Bitcoin up. Grin

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March 22, 2013, 04:52:11 PM
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I cant help but think there will be a new and better crypto currency before that point. One that will be officially released.

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DannyHamilton
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March 22, 2013, 05:11:13 PM
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I cant help but think there will be a new and better crypto currency before that point. One that will be officially released.

Officially?

erschiessen
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March 22, 2013, 05:44:49 PM
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If bitcoin gets to $100,000 as people here like to think, that would mean mining would be worth $2.5 million. At that point, mining would have to stabilize at a point where $2.5 million worth of electricity is used to come up with a blockchain every few minutes. That means that a ridiculous amount of electricity would be used every day just for bitcoin mining. Wouldn't that drive up electricity costs for everyone else?
I don't see the correlation between BTC/USD and Electricity costs to 'mine' blocks.

Can someone tell me?

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March 22, 2013, 05:54:19 PM
 #12

I cant help but think there will be a new and better crypto currency before that point. One that will be officially released.

Officially?

Government bitcoin! Now centralized, with inflation! Grin

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March 22, 2013, 05:56:07 PM
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I cant help but think there will be a new and better crypto currency before that point. One that will be officially released.

Officially?

I think what he means is one controlled by the government.  Which even if it did happen will still not be used as much as Bitcoin.
DannyHamilton
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March 22, 2013, 05:58:05 PM
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Quote
I haven't seen anyone with realistic expectations saying that bitcoin will get to $100,000 per BTC this year.  Have you?

Not realistic but Max Keiser with an RT audience of 550 million is telling the world 1% of global trade = $100,000 bitcoin.
- snip -

And he's saying that 1% of global trade will occur over bitcoin this year?

erik777
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March 22, 2013, 06:02:24 PM
 #15

i dont think so. We are getting better and better cpu's/gpu's that are both faster and use less power.

Very true.  Intel has actually been very in-efficient over the years, and has recently come up with some good research to fight back so they can have a place in the tablet/phone market. In other words, mobility has created a high demand for efficiency that will likely yield to improvement for years to come. 

Also, it's worth noting that if you live in a cold climate, computers can be used to help heat the home.  Smiley  That's what my i7s do. 

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DannyHamilton
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March 22, 2013, 06:09:43 PM
 #16

- snip -
I don't see the correlation between BTC/USD and Electricity costs to 'mine' blocks.

Can someone tell me?

Revenue from mining is determined by the value of the bitcoin that is mined.

The most significant costs in mining are the acquisition of the mining hardware, and the ongoing cost of energy necessary to run and cool the mining equipment.

If it is profitable to mine, more mining equipment is purchased and put into use in an attempt to increase those profits.  As more mining equipment is brought online, the network self-adjusts the difficulty so that the total amount of new bitcoins created per day does not significantly increase.  This means that miners are spending more money (in energy costs) to attempt to acquire a larger percentage of the 3,600 BTC per day that are produced.

Eventually the cost of running that equipment begins to approach the value of the bitcoins that can be acquired with the equipment.  At that point, there is no longer an economimc incentive to bring more mining equipment online.  So, an increase in the exchange rate (or value) of the bitcoin causes an increase in the amount of mining equipment that is brought online and therefore an increase in total energy used to mine blocks.

The opposite is also true.

If the exchange rate (or value) of bitcoin were to drop significantly, the energy cost of running the equipment would exceed the value of the mined bitcoins.  Those miners with the highest energy costs would begin to shut down their equipment since they are now spending more on energy than the value they are getting from the mined bitcoins.  The network would self-adjust the difficulty so that the total amount of new bitcoins created per day does not significantly decrease. Eventually an equilibrium is reached again where the remaining miners with access to cheaper energy (or cheaper cooling costs) receive slightly more value in bitcoins than their mining expenses allowing them to once again turn a profit.

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March 22, 2013, 06:20:11 PM
 #17

If anything this relationship goes the other way around.

btc mining represents a tiny fraction of overall electricity use.
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March 22, 2013, 07:56:55 PM
 #18

you should invest in solar panels too. or alternatives of that.
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March 22, 2013, 09:37:03 PM
 #19

I cant help but think there will be a new and better crypto currency before that point. One that will be officially released.

Officially?

Now I'm starting to understand why there is a "newbie" section and some users are jailed inside  Grin

First PC game is using Bitcoin as the currency: Fallout 2
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