Energy consumption will become an issue if bitcoin really breaks through

[wrenchmonkey]

A combination of wind and sun works out pretty well too. But you're right, it's not a good idea to just jump completely "off-grid" (and nobody's suggesting that, at least I'm certainly not) since the majority of energy is consumed during the DAY for air conditioning, etc, solar can offset coal by generating surplus energy during the day, and then pulling from the grid at night (this is called net metering).

Very little energy is used by the grid at night, and gets grounded out and wasted, since they can't actually shut the plant down at night, even though demand is lower (this is why off-peak electricity costs less).

A solar system that creates a surplus during the day (when demand is high) and pulls from the grid at night (when demand is low) serves to not only supplement coal (or whatever) during the day, and ease demand (which can cause brown-outs and worse), but also serves to make coal generation more efficient, since the power isn't wasted at night.

[wrenchmonkey]

Also, your wiki article only refers to cost of generation. Not cost to consumer. If the person doing the generating is also the consumer, he's getting his energy essentially at "wholesale".

If he could buy "wholesale" coal energy, you'd be right. But he can't. So we have to compair "wholesale" Solar to retail coal. 

With net-metering, you pay wholesale solar price, even when you're pulling back out, what you previously put into the grid.

[herzmeister]

Moore's Law does apply to solar energy.

http://www.digitopoly.org/2011/11/07/moores-law-in-solar-energy/

[wrenchmonkey]

Moore's Law does apply to solar energy.

http://www.digitopoly.org/2011/11/07/moores-law-in-solar-energy/

Who said that it didn't?

[benjamindees]

It's kind of hard to prosecute wars when they can't be financed.  "It is no coincidence that the century of total war coincided with the century of central banking."

Good point. We might have to change the thread for this discussion. Still:

Why do you think bitcoin can change this? The US still dictates in what currency US citizens have to pay their taxes.
And even more: The USA are very good at evilizing what "they" don't like. Expect Bitcoiners to be treated like enemies of the state once Bitcoin really starts to weaken the States

I do expect Bitcoin to be treated as terrorism or whatnot.  Similar projects (Liberty Dollars) already are.  And I am making plans for this eventuality.

As for the influence of the US government over its citizens, in the current economic environment, after over a decade of failed wars and false flag terrorism, meh, we'll see.  It certainly isn't going up.

[amihh]

A 19th-century Member of Parliament predicted that, given the rate of growth of traffic, London would be six feet deep in horse manure by 1910.

It's hard to predict the future by extrapolation, one aspect missing in the discussion is that if bitcoin becomes more widespread and accepted and devalues the USD than maybe the calculation shouldn't be based on current electricity costs in USD.

[Matthew N. Wright]

3 words for OP: Application-specific integrated circuit.

Back in the 1970s, they would have said the same thing about computers in general, and now you hold a phone in your hand that can process more data then a server the size of a room at that time. Something tells me that energy will keep being inefficient for as long as its cheaper to follow the crowd, and technology will continue to compensate through innovative developments in and of themselves.

It will be pretty cool if they make a completely unrelated-to-bitcoin-mining breakthrough in bio-solar technology. I'd love to wear shoes that generate enough electricity when I walk to power all my devices.

[benjamindees]

Renewable energy IS CHEAP

maybe the calculation shouldn't be based on current electricity costs in USD.

This is an excellent point  Renewable energy is fairly cheap.  What is expensive is moving that renewable energy from where it is produced to where the money is printed.  Centralized, fiat currencies don't create homogenous prices.  They create price disparity that makes resources (nominally) cheap at the periphery and expensive at the center, yet (due to money printing) relatively abundant at the center and scarce at the periphery, when, without this centralization, the opposite would be true.

[wrenchmonkey]

3 words for OP: Application-specific integrated circuit.

Back in the 1970s, they would have said the same thing about computers in general...

Not relevant in the case of Bitcoin. Difficulty will adjust to a point where the miners will continue to mine as long as the profits are above the operational costs (of electricity).

It's TOTALLY relevant. If you consider what a "computer" cost 40 years ago, how HUGE and power hungry it was, and how pathetically not "powerful" it was, you could have predicted some insane power consumption trends, based on current technology.

Now consider that your cell phone is 100,000 times smaller, 1,000,000 times cheaper, and 1000 times more powerful than a university-grade computer from 1965.

That's a BILLION (with a B) fold increase processing power, cost efficiency, and reduction in size in the past 47 years... Think about it.

What would have taken 1000 university-grade computers, the size of a house to process, 47 years ago--which would have consumed MEGAWATTS of electricity and put off MASSIVE amounts of heat--can now be processed, with ease, on a mere cell phone, that consumes a few milliwatts...

My Samsung Galaxy S3 can put down about 3khash of CPU processing power on litecoin. Which is roughly half of the hashing power of a 4-year-old laptop roughly 20-times its size, with a Centrino Mobile processor in it... This was a $1000 computer 4 years ago, and it consumes 90 watts when running full-out. My phone consumes about 2-4 watts... MAAAAYBE 5 if the screen is on full brightness...

More efficient miners will drive less efficient miners out of the profitability realm. If you want to compete, you'll have to use more power efficient equipment, or find a way to get free electricity. This will drive the entire 'mining industry' toward power efficiency, constantly. The cheaper people CAN process, the cheaper they will. And the cheaper those people process, the more necessary it becomes for others to move to power efficiency in order to compete. Sure, there will always be a few people operating on the bleeding edge of profitability, but once that line is pushed behind them by the increase in difficulty by the more efficient people, they will be forced to either move to more efficient equipment, or abandon mining.

Nobody's going to mine at a significant financial loss. Not even speculators.

[Matthew N. Wright]

Once they will be mainstream everyone will have them and the electricity burnt will be the same.,,

..as the GPUs do now, meaning no net change? That's how I understood it anyway.

[brenzi]

It's TOTALLY relevant. If you consider what a "computer" cost 40 years ago, how HUGE and power hungry it was, and how pathetically not "powerful" it was, you could have predicted some insane power consumption trends, based on current technology.

Now consider that your cell phone is 100,000 times smaller, 1,000,000 times cheaper, and 1000 times more powerful than a university-grade computer from 1965.

That's a BILLION (with a B) fold increase processing power, cost efficiency, and reduction in size in the past 47 years... Think about it.

You didn't get the point. Your billion or whatever increase in computing efficiency will just increase mining difficulty. It will not reduce energy consumption of the bitcoin network. Variable costs of mining are dominated by electricity price. Mining gear will be run as long as those costs are not higher than the expected mining reward plus transaction fees. (Amortisation has no influence on this - it's the miner's risk)
So what follows from the above is that more efficient mining gear will of course produce more GH/s per Watt. So it will be more GH/s per $ on your electricity bill. This means that it is profitable for more people to run even more mining gear. And what's profitable will be done on a free market. If such a thing as free market really exists, Bitcoin is it.

Efficiency goes up
Difficulty goes up
Energy consumption stays exactly the same.

The Energy consumption of the Bitcoin network can be approximated by the following formula:

GlobalEnergyConsumptionForMining = (MiningReward + TransactionFees) * bitcoinValueInUSD / EnergyCostInUSDperkWh

The efficiency falls out of the equation because of how a free market works

[Etlase2]

Brenzi, the cost of the hardware will factor heavily into it, especially as electrical efficiency increases. Like I mentioned earlier with amortization. If the machine that gets 1000x mhash/joule costs 1000x, the overall resources consumed is effectively the same making the assumptions about cost being equal to resources consumed. Since electricity can be renewable but beat-to-death hardware is not very recyclable, the drain on resources probably gets worse as electrical efficiency increases.

[talnted]

My opinion is that technological developements arnt being considered here.  As technology improves energy consumption will deminish and hashing will increase.

[wrenchmonkey]

It's TOTALLY relevant. If you consider what a "computer" cost 40 years ago, how HUGE and power hungry it was, and how pathetically not "powerful" it was, you could have predicted some insane power consumption trends, based on current technology.

Now consider that your cell phone is 100,000 times smaller, 1,000,000 times cheaper, and 1000 times more powerful than a university-grade computer from 1965.

That's a BILLION (with a B) fold increase processing power, cost efficiency, and reduction in size in the past 47 years... Think about it.

You didn't get the point. Your billion or whatever increase in computing efficiency will just increase mining difficulty. It will not reduce energy consumption of the bitcoin network. Variable costs of mining are dominated by electricity price. Mining gear will be run as long as those costs are not higher than the expected mining reward plus transaction fees. (Amortisation has no influence on this - it's the miner's risk)
So what follows from the above is that more efficient mining gear will of course produce more GH/s per Watt. So it will be more GH/s per $ on your electricity bill. This means that it is profitable for more people to run even more mining gear. And what's profitable will be done on a free market. If such a thing as free market really exists, Bitcoin is it.

Efficiency goes up
Difficulty goes up
Energy consumption stays exactly the same.

The Energy consumption of the Bitcoin network can be approximated by the following formula:

GlobalEnergyConsumptionForMining = (MiningReward + TransactionFees) * bitcoinValueInUSD / EnergyCostInUSDperkWh

The efficiency falls out of the equation because of how a free market works

It's an interesting point. But it also assumes that miners are helpless victims to the current power companies. If you look at just the half of the equation, which is the equation you posted, it seems that way, but if you look at it from the perspective that energy costs can also drive people to move toward their own energy generation (Solar, Wind, Tidal, etc), in order to be competitive in that market, the total energy consumption isn't as relavent as the source of that energy being consumed.

If you think of the trilions of gigawatts of energy that are wasted by not harnessing the Sun's power... There's not a big issue with consuming a lot of energy.

The issue is with consuming a lot of energy generated with 20th century technology.

The day it becomes less cost-effective to generate energy with 20th century technology is the day it gets abandoned by bitcoin miners (and other consumers alike).

So if the issue is just what percentage of current power generation will look like when compared to future energy consumption, I don't really see it as a problem, provided that energy is coming from clean sources, who cares how much of it gets used?

[brenzi]

but if you look at it from the perspective that energy costs can also drive people to move toward their own energy generation (Solar, Wind, Tidal, etc), in order to be competitive in that market, the total energy consumption isn't as relavent as the source of that energy being consumed.

If you think of the trilions of gigawatts of energy that are wasted by not harnessing the Sun's power... There's not a big issue with consuming a lot of energy.

In the far future you might even be right. There are clever people around that think energy will be 100% renewable and almost for free in the future. But I think we should consider the status quo and not rely on utopia when judging weaknesses of today's bitcoin technology. Bitcoin value might rise a lot faster than renewable energy will progress.

In the case of Photovoltaics one should bear in mind that today PV cells are produced in china using non-renewable energy. So their embodied energy is not renewable at all.

As long as renewable energy is more expensive than fossil and nuclear energy, I consider excessive energy use as being bad because real costs are externalized.

[wrenchmonkey]

but if you look at it from the perspective that energy costs can also drive people to move toward their own energy generation (Solar, Wind, Tidal, etc), in order to be competitive in that market, the total energy consumption isn't as relavent as the source of that energy being consumed.

If you think of the trilions of gigawatts of energy that are wasted by not harnessing the Sun's power... There's not a big issue with consuming a lot of energy.

In the far future you might even be right. There are clever people around that think energy will be 100% renewable and almost for free in the future. But I think we should consider the status quo and not rely on utopia when judging weaknesses of today's bitcoin technology. Bitcoin value might rise a lot faster than renewable energy will progress.

In the case of Photovoltaics one should bear in mind that today PV cells are produced in china using non-renewable energy. So their embodied energy is not renewable at all.

As long as renewable energy is more expensive than fossil and nuclear energy, I consider excessive energy use as being bad because real costs are externalized.

I'm going to have to respectfully disagree. Basing future predictions on current status quo is just bad policy by just about ANY standard. I'm not saying that there won't be any bumps in the road, but what I am saying is that if it gets to the point that it begins to be problematic, the economic incentives will be enough to drive change (economic interests are the only TRUE driver of change anyway).

The idea that just because something is produced using another type of energy makes it not 'clean energy' is disingenuous at best. In order for that statement to be true, it would require that every cell produced consumes more 'dirty' energy in the the production process than it will produce in its working lifetime, which, if that were the case, solar energy would already make ZERO economic sense. People would never be able to come out ahead, as the solar installation would cost more in energy costs alone to produce, than would ever be recovered...

[benjamindees]

As long as renewable energy is more expensive than fossil and nuclear energy, I consider excessive energy use as being bad because real costs are externalized.

Repeat after me:  it's only more expensive in fiat.

[abigfish]

did fuel become an issue when cars broke through ? yes ... what happened well people started fighting for it and an exclusionary mechanism was introduced ...the raise in price ! )

hardly the same but I think you get my point ...

imo energy costs will translate into transaction fees which will get bigger to include a small 0.1-1% fee extra for all the juice we waste...



this is all imo however ...'

[brenzi]

imo energy costs will translate into transaction fees which will get bigger to include a small 0.1-1% fee extra for all the juice we waste...

What will cause even more juice to be wasted. Transaction fees shift the economic equilibrium towards higher energy consumption.

but the easiest version would be:
you think fiat comes cheap ? magnetic ink, special paper, ultra high tech industrial printers, shitload of employees ...a triple shitload of security for printing, designing, moving, destroying old ....etc etc

MONEY IS A LOT MORE EXPENSIVE that we think sometimes..... in most countries COINS nowadays have basically a bigger metal value than face value for example .... (doesnt mean you get rich if you start melting copper penies ...but while 1penny is 1 penny ...the copper it weights is at least 1.05 penny in value....and the work, machinery, employees would make that penny cost maybe 1.15 to create...so ..wow bitcion is a lot cheaper  plus it costs only the miner to create it ...in el ....el spent in transaction is almost 0 ...(or same as when paying online with fiat) .... while fiat costs are covered by the FED (or equivalent local bitchgroup) which is DEFINITELY financed from public monies paid by all tax registered hard working sons of bitches like all of us ....

You're talking about M0 money supply. Bills and coins. They make up for about 10% of the M2 money suppy. (http://money.howstuffworks.com/how-much-money-is-in-the-world.htm) including all money located on bank accounts and funds.
Money on bank accounts and funds is most probably less "costly" if you only count storage and transaction energy and infrastructure.

If you want to convince me, you need to do a little more research.

[brenzi]

Ok, inform us please if you'll come
to something practically useful.

I'm very tempted by the Proof-of-Stake concept: https://en.bitcoin.it/wiki/Proof_of_Stake
It certainly addresses the issue of energy consumption. I'll need to do more reading to understand the possible drawbacks. The checkpointing is a violation of decentralization, but might be acceptable. What makes me sceptical is the fact that mining can only take place with an unlocked wallet. I can already hear people whining for lost coins....

Good reads:
http://ppcoin.org/static/ppcoin-paper.pdf
http://www.links.org/files/decentralised-currencies.pdf

Just got myself a couple of PPcoins ;-)

It's funny that the developers didn't even find the time to consequently search/replace the word bitcoin by ppcoin in their software....so I guess they're at a very early stage....