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ghdp
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March 18, 2014, 02:08:22 PM
Last edit: December 19, 2016, 09:57:06 PM by ghdp
 #1

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March 19, 2014, 07:26:39 PM
 #2

Thank you for this very interesting calculation. It's a nice addon to a thread I started quite a while ago that led to a fruitful discussion. See https://bitcointalk.org/index.php?topic=181759.msg1897702#msg1897702

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March 19, 2014, 07:59:59 PM
Last edit: March 19, 2014, 09:57:56 PM by Pente
 #3

I use your calculations to figure the upper boundary on electricity usage. However, I suspect the lower boundary on cost per KWH is about $0.03.

Over 50% are paying less than $.10 per KWH: https://bitcointalk.org/index.php?topic=333720.0

I remember some Indonesian miner guy that was paying $0.03 per KWH.

Cost in Iceland per KWH according to google is $0.043.

I can buy solar panels at $1000 per KW. Assuming a 5 year effective life span at 10 hours of direct sunshine per day = 365 * 5 * 10 = 18,250 KWH. Divide that into $1000 ($1000/18250) and we get $0.054 per KWH.

Personally, I would just use $0.05 per KWH. At around $600 per BTC and assuming 3600 BTC per day, we get:

$600*3600/$.05/KWHR= 43.2*10^6 KWHR for an <b>UPPER BOUND</b> on power usage.

Remember, as BTC usage goes up world wide, power usage will stay about the same. I suspect the cost of using Fiat (especially when factoring in both the hidden and apparent cost of inflation) is much much higher.


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March 19, 2014, 08:35:33 PM
 #4

Very nice "rule of thumb"!  As an "absolute lower limit" you could use $0.015 / kWh:

Price of electricity = 0.015 USD/kWh = 15 USD/MWh

So we have 3600*X = P*24*15 or P/10=X

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March 19, 2014, 09:42:05 PM
 #5

I can buy solar panels at $1000 per KWH.
first, you can only buy panels by peak power [kW], not by energy [kWh].

second: would you really invest on expensive mining gear and then run it only when the sun shines? Your gear is outdated quickly, so amortisation time is short.

Quote
Remember, as BTC usage goes up world wide, power usage will stay about the same.
This is just wrong. Power usage rises with the valuation of BTC:

GlobalEnergyConsumptionForMining ~= (MiningReward + TransactionFees) * bitcoinValueInUSD / EnergyCostInUSDperkWh

Quote
I suspect the cost of using Fiat (especially when factoring in both the hidden and apparent cost of inflation) is much much higher.
most certainly wrong.

please read my thread carefully where you will find your arguments proven wrong (see signature)


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March 19, 2014, 11:08:16 PM
 #6

Quote
Quote
I can buy solar panels at $1000 per KWH.
first, you can only buy panels by peak power [kW], not by energy [kWh].
I fixed my typo

Quote
second: would you really invest on expensive mining gear and then run it only when the sun shines? Your gear is outdated quickly, so amortisation time is short.
True, but power in Iceland is still $0.043 per KWHR

Quote
Quote
Remember, as BTC usage goes up world wide, power usage will stay about the same.
This is just wrong. Power usage rises with the valuation of BTC:

GlobalEnergyConsumptionForMining ~= (MiningReward + TransactionFees) * bitcoinValueInUSD / EnergyCostInUSDperkWh
Value of BTC may go up, but mining reward is definitely going down every 4 years.

Quote
Quote
I suspect the cost of using Fiat (especially when factoring in both the hidden and apparent cost of inflation) is much much higher.
most certainly wrong.

please read my thread carefully where you will find your arguments proven wrong (see signature)
What is the cost of using fiat? I see inflation as a hidden tax equivalent to the amount of money being printed. I lean toward Austrian economics though. If you have a different economic philosophy, we will probably never agree on the cost of using fiat. But here is my take on it: If the USA prints 10^12 dollars per year, then this would be equivalent to 10^13 KWHR (at $0.10/KWHR) per year. This is certainly more than:
Quote
equivalent energy: 1.39E12 kWh/y
from your OP statement thread in your signature.

I read part of that thread and my assuptions could actually make things worse. Mining would be done in the areas of the world where energy is the cheapest. At $0.05 per KWHR, then your 7% would become closer to 14%. But that would decrease over the years as the mining reward keeps halving. But even at 14% of world wide energy usage, it seems to me that the cost of Bitcoin would still be less than the cost of using fiat currency.

BTW, I don't think that Bitcoin (or any other cryptocurrency) will ever completely replace fiat currency. I spend a lot of time in Kenya with my youngest wife who uses M-Pesa. M-Pesa is everywhere, you can't walk a block on a business street without seeing a couple signs. She uses it to send money to her parents via text on her phone. She uses it to pay her electric bill. We were in a matatu going past the electric company main office and she was making fun of all the old people (younger than me...but beside the point  Cheesy ) queing up to pay their electric bill instead of using M-Pesa. And everyone in Kenya (even if they sleep in a cardboard box) has at least one cell phone. One day, she wanted to stop for a coke and I mentioned that I hadn't brought my wallet and she had no money. No problem she said, stopped at the next M-Pesa sign and converted some of her M-Pesa on her phone to 500 shillings. The point being is that Kenyans are already using an ecurrency for all sorts of things, but they don't use it for small transactions. Fiat currency is simply faster and easier.

What I do think that Bitcoin will do for fiat currency is force governments to stop inflating it so much. There will be a balance between slightly deflationary Bitcoin and slightly inflationary fiat currency. When a government starts inflating fiat to much, people will just use less of it (and at a much higher velocity) and switch to using cryptocurrency more. This will accelerate inflation and force the government to print less fiat(or find themselves unable to operate effectively).



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March 20, 2014, 12:02:11 AM
Last edit: March 20, 2014, 06:39:08 PM by BurtW
 #7

I spend a lot of time in Kenya with my youngest wife...
Just curious.  How many do you have?  One is more than enough for me.

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March 20, 2014, 12:24:31 AM
Last edit: March 20, 2014, 04:43:39 AM by Pente
 #8

I spend a lot of time in Kenya with my youngest wife... [/quote
Just curious.  How many do you have?  One is more than enough for me.

Just Two.

An old cougar that caught me when I was young and naive. As I got older and my SMV went up, I negotiated the right to take a second wife. All three of us lived together in Nairobi for a short time, that was a total disaster. Feminism vs. Femininity...some day I might write an article on it.

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March 20, 2014, 02:55:32 PM
 #9

Still you can create more green solution. But consumption is still not high enough to worry about

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March 20, 2014, 08:14:18 PM
 #10

Quote
Quote
I can buy solar panels at $1000 per KWH.
first, you can only buy panels by peak power [kW], not by energy [kWh].
I fixed my typo
If it was a typo, then the number is wrong. It's not done by buying a PV module. I guess Germany is a good place to look at for PV. http://www.photovoltaik-guide.de/pv-preisindex says they're at 2$ per Wp.
And it's still not done because you need some kind of power management. If you run in island mode (off-grid, to avoid paying grid fees) you need a battery to get most out of your gear, add another >2$ per Wp.

Or - of course - you let the german public pay: Feed your PV into the grid, get a subsidized price, and then buy coal power to run your rig ;-)

Quote
True, but power in Iceland is still $0.043 per KWHR
OK. But iceland cannot supply the 7% (or 14%?) of global electricity.

Quote
What is the cost of using fiat? I see inflation as a hidden tax equivalent to the amount of money being printed. I lean toward Austrian economics though. If you have a different economic philosophy, we will probably never agree on the cost of using fiat. But here is my take on it: If the USA prints 10^12 dollars per year, then this would be equivalent to 10^13 KWHR (at $0.10/KWHR) per year. This is certainly more than:
Quote
equivalent energy: 1.39E12 kWh/y
from your OP statement thread in your signature.
Well, you're right, that's not what I was talking about. I only estimated the energy used for the financial sector.
But if your point is to equal fiat with spent energy, how would bitcoin make things different?


Quote
I read part of that thread and my assuptions could actually make things worse. Mining would be done in the areas of the world where energy is the cheapest. At $0.05 per KWHR, then your 7% would become closer to 14%. But that would decrease over the years as the mining reward keeps halving.
The decrease in mining rewards will followed by increasing gains by fees. Or bitcoin security will weaken.

Quote
But even at 14% of world wide energy usage, it seems to me that the cost of Bitcoin would still be less than the cost of using fiat currency.
We can only agree to disagree on this point. Especially, because there are alternatives to PoW.


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April 03, 2014, 03:30:36 PM
 #11

The OP is nonsense. Here is why.

Risto (and all),

Where do you think we will find the 100GW of electricity that we will need in order to sustain a 100k$ bitcoin ?

1. The price of electricity would rise long before we reached 100GW, thus no problem. Price always solves the problem.

2. That article assumes the genre and capital cost of the mining equipment is irrelevant. Thus with cpu-only mining, this problem will be much improved, as the both the home electricity cost per KWH and the cost of the equipment per Watt consumed are higher than for Bitcoin's specialized ASIC mining. For example, Butterfly lab's shipping 10GH/s consumes 50W and costs $349. The Intel i7 costs $329 and consumes 87W, but to build an entire system costs about double that. Also Intel has just begun focusing on power consumption reduction so this will improve at a faster rate than ASICs will.

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April 03, 2014, 04:46:55 PM
 #12

The amount of energy consumed will be much less than the current banking system consumes which, hopefully, bitcoin will replace. Smiley This doesn't even take into account the millions of lives (and productivity) saved when nation states can no longer print money at will to finance their endless wars.

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April 04, 2014, 12:53:43 AM
Last edit: April 04, 2014, 01:05:47 AM by AnonyMint
 #13

I don't know how electricity is priced in your place of residency, but in mine, the price of electricity for home users is mostly fixed and can change once or twice a year only. It will be difficult to adjust it if we see another x100 in bitcoin price within a year or two. If the client is a company it is "worst" because a lot of them have long term contracts with fixed prices.

If price doesn't increase consumers break down the doors of the electric company and City Hall. Price will increase damn fast when people don't have electricity. I am here in Davao, Mindanao and we are having rotating brownouts. The people and businesses are ready to strangle the necks of the politicians and so yes the price has risen and the new coal powerplants are being built (200MW to come online next year and more coming).

I agree price may not rise if the damn socialists who want subsidies are in control.

I agree that a higher price (of electricity) could solve the problem in the long term (5+ years). In the short term I except that the most polluting plants will just run at maximum capacity to deliver the required power.

Man-made climate and global environmental change is the most irrational thought a person could have. Start here on the definition of the scientific method.

2. That article assumes the genre and capital cost of the mining equipment is irrelevant. Thus with cpu-only mining, this problem will be much improved (...)

Yes it is (irrelevant). No it won't (be improved). Read the OP.

I assume you are referring to this point:

Hypothesis :
1. Miners are rational actors. Therefore once they have bought a mining rig, they will not stop it unless the cost of running it is higher than the price of the mined bitcoins. However if the price drops or if the difficulty grows too high they should stop mining.

You must have flunked Economics 101 because you forgot opportunity cost.

They can sell the hardware. Factor that in and you see my point was relevant.

Obviously for ASICs you are correct, but general purpose computers you would not be. That is another reason a cpu-only coin is needed.

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April 04, 2014, 04:50:38 AM
 #14

I agree that a higher price (of electricity) could solve the problem in the long term (5+ years). In the short term I except that the most polluting plants will just run at maximum capacity to deliver the required power.

Man-made climate and global environmental change is the most irrational thought a person could have. Start here on the definition of the scientific method.

Death rate due to coal burning is mostly cancer and respiratory illness.  Mercury toxicity from coal causes neural damage, especially damaging in early development.  A survivable and humane environment is a green environment, AGW notwithstanding.  When economic development is low, you've got bigger fish to fry, but as soon as you can afford intelligent cancer-free children, you're likely to want to spend your developed income on that.

Economic incentives aside, there's really no reason why miners can't be restricted to renewable energy as available.  The network is global, and the Earth turns.  There would always be mining occurring somewhere.  It's only the compulsion to amortize the plant, and to maximize earnings, that compel miners to operate 24x7.

EDIT:  But there is a novel technique for burning coal with iron oxide that essentially eliminates fly ash, if I recall correctly.  It was a research press release, so it might be overblown, and I don't recall much detail -- it was about 2 years ago.

Give a man a fish and he eats for a day.  Give a man a Poisson distribution and he eats at random times independent of one another, at a constant known rate.
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April 04, 2014, 12:02:12 PM
 #15

The assumption that the rational actor mines whether or not they can make today's profit and only today's profit via electricity is somewhat flawed.  That would be true in a certain controlled environment and to some extent many miners do wake up and make this decision each day, but.....

In the long term a rational miner makes plans over the course of months including the price of the miner and the price of electricity in relationship to the price of bitcoin.  Excluding the price of miners from your equation would only be true if no new miners came into play ever.  That simply isn't the case.  New miners have constantly and are constantly coming into play.

A person can't just make a theory saying that electricity is the only cost that factors into the price of bitcoin.  That simply isn't the case.  Big companies take into consideration electricity prices, but small home miners are locked into their electricity supply so it is irrelevant to them.  But a large amount of miners are driven into and out of mining much more so by the price of miners, than the price of electricity.  Clever and experienced miners carefully time what miners they buy and when to maximize their advantage.  


---

otherwise I appreciate your insight and thinking this out.  it is a very cool idea

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April 04, 2014, 09:51:46 PM
 #16

The OP is nonsense. Here is why.


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April 04, 2014, 10:13:30 PM
 #17

Add 50% to that price/kWh assumption:


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April 06, 2014, 03:15:21 PM
 #18

Shouldn't this be then, our long awaited intrinsic value of BTC ?

Also, is everything correct with units ? It looks like they're not cancelling right.

Your equation is (assuming rational miners / no free electricity / continuous network hash) :

N * X = P * Q

N - number of mined bitcoins per day having unit of [ BTC / day ]

X - exchange rate having unit [ $ / BTC ]

P - total network electricity consumption measured in [ MWday ]

Q - price of electricity measured in [ $ / MWday ]

So:

N = block_reward * number_of_blocks_per_day ~ 25 * 24 * 6 (because roughly 10min per block) = 3600   BTC / day

Q ~ 150 $ / MWh  = 3600   $ / MWday

So:

3600  [BTC / day]    *    X  [$ / BTC]  = P [ MWday ]  *    3600 [ $ / MWday ]

Right side units cancel to $, but left side units don't cancel to $. but to $/day ?! Is something missing ?
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April 06, 2014, 08:28:39 PM
Last edit: April 06, 2014, 09:20:38 PM by solex
 #19

A future generation of ASICs could be made with reversible gates which means that electricity use becomes far smaller as heat dissipation becomes negligible. (Note that the application suggested here is classical CMOS, not quantum computing).


http://web.cecs.pdx.edu/~mperkows/CLASS_VHDL_99/tran888/lecture003-reversible-logic.pdf
"Power dissipation of reversible circuit, under ideal physical circumstances, is zero."

http://www.ermt.net/docs/papers/Volume_2/issue_5_May2013/V2N5-129.pdf

As the Bitcoin fx rate climbs the incentive to push the envelope in chip design is ever stronger. A SHA-256 hashing circuit is far simpler than a general purpose CPU. Hopefully, Bitcoin mining will be at the forefront of reversible gate technology in a few years making the whole mining network orders of magnitude more energy efficient.

(Mentioned this elsewhere, but had no feedback on how the tech is progressing...)

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April 07, 2014, 12:13:56 PM
 #20

Price of electric is different around the world. Not to mention all kind of ways to optimize it.
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April 07, 2014, 06:41:11 PM
Last edit: April 07, 2014, 06:56:39 PM by solex
 #21

As the Bitcoin fx rate climbs the incentive to push the envelope in chip design is ever stronger. A SHA-256 hashing circuit is far simpler than a general purpose CPU. Hopefully, Bitcoin mining will be at the forefront of reversible gate technology in a few years making the whole mining network orders of magnitude more energy efficient.

The mining network of Bitcoin - and of all "proof of work" cryptos for that matter - can not be made "efficient".

At current price ($450) the difficulty should stabilize itself at of near 700 billions. (Hashrate 500 PH/s with 1 J/GH miners and electricity at $0.15/kWh).

Start selling ASICs 10 times more efficient and the difficulty will just jump to thousands of billions.

Low power devices will be run with sustainable electricity sources, such as solar cells, making the whole concern about energy consumption an academic debate.


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April 07, 2014, 07:57:10 PM
 #22

As a dane, let me just say that I am insanely jealous of the cheap electricity everyone else has. It's at $0.45 here.

Look inside yourself, and you will see that you are the bubble.
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April 07, 2014, 08:26:08 PM
Last edit: April 08, 2014, 01:08:02 AM by solex
 #23

What exactly is the incentive that will drive miners into using unreliable and expensive sources of electricity like solars cells rather than inexpensive and always available sources like coal or nuclear ?

Price.
Obviously today is as it is now, with a lot of scope for improvement. Looking some years down the road my point is that RLG tech is incredibly efficient because it recycles electricity within the circuit needing only a negligible top-up. While fossil and nuclear prices continue to rise there will be a crossing point where renewable energy sources will out-compete conventional sources.  I think for ASICs this is <10 years away.


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April 07, 2014, 08:39:47 PM
Last edit: April 07, 2014, 09:26:37 PM by Ibian
 #24

Out of curiosity, how much energy does your typical ASIC need? I'm planning to plop down a few windmills on the boat I'm buying soon, and it might be fun to have one running entirely on wind. Just as a proof of concept and bragging rights if nothing else.

Look inside yourself, and you will see that you are the bubble.
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April 09, 2014, 11:15:14 AM
 #25

Cooling is important factor. You do not only need to produce something. You also need to make sure machine won't overheat.

Interesting part is, even though we usually use electricity for it, there are other solutions.
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June 27, 2014, 10:04:47 PM
 #26

As the Bitcoin fx rate climbs the incentive to push the envelope in chip design is ever stronger. A SHA-256 hashing circuit is far simpler than a general purpose CPU. Hopefully, Bitcoin mining will be at the forefront of reversible gate technology in a few years making the whole mining network orders of magnitude more energy efficient.

The mining network of Bitcoin - and of all "proof of work" cryptos for that matter - can not be made "efficient".

At current price ($450) the difficulty should stabilize itself at of near 700 billions. (Hashrate 500 PH/s with 1 J/GH miners and electricity at $0.15/kWh).

Start selling ASICs 10 times more efficient and the difficulty will just jump to thousands of billions.

Low power devices will be run with sustainable electricity sources, such as solar cells, making the whole concern about energy consumption a moot debate.

What exactly is the incentive that will drive miners into using unreliable and expensive sources of electricity like solars cells rather than inexpensive and always available sources like coal or nuclear ?
The "startup" costs of these energy types are very high. As a result one would need to invest a lot of money in order to build a coal or a nuclear plant. It also takes many years to build these types of plants verses a week (possibly) to order, receive and setup a solar panel
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June 28, 2014, 10:54:49 PM
Last edit: June 28, 2014, 11:18:02 PM by antirack
 #27

Is it really that unlikely that a serious mining operation would run their farm from wind or hydro?

Considering what the mining devices and the infrastructure for it costs, it is not completely impossible in my opinion.

Total cost today (farm deployed):

~$820/TH = $820,000/PH
~$1370/kW = $1,370,000/MW

Annual electricity at $0.88 million at $0.10/kWh _without_ conversion cost, cooling, etc.

The costs for a utility scale wind turbine in 2012 range from about $1.3 million to $2.2 million per MW of nameplate capacity installed. This cost has come down dramatically from what it was just a few years ago.
...
Most of the commercial-scale turbines installed today are 2 MW in size and cost roughly $3-$4 million installed.

At $1.3 million for 1MW at the lower end, it would take less than 2 years to  pay back.

http://www.windustry.org/resources/how-much-do-wind-turbines-cost

If a mining operation takes business serious (= not cowboy style get rich quick mining), it could probably use local resource and government incentives to drive down costs. And after all, if the mining ever stops, the society benefits from all the new wind farms.

(admittedly, I don't know anything about setting up a wind turbine)
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June 29, 2014, 11:37:01 AM
 #28

Ok, so now you got me curious.

Here's a wind map for the US:
http://hint.fm/wind/

http://www.bneenergy.com/bne-energy-faqs.html

Wind farms are built in places with strong, steady winds to ensure that they produce as much power as possible, as much of the time as possible.  However, wind is variable depending on the time of day and time of the year.  A typical wind farm would produce electricity in the range of 25-40% of its rated capacity over the course of the year, but can produce electricity at full capacity on any given day when the wind exceeds a certain threshold amount.

So the obvious answer, build your wind turbine AND your bitcoin mine where it's windy Wink

Profit from both, Bitcoins and electricity sales.
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June 29, 2014, 12:33:26 PM
 #29

antirack:  You forgot to answer this question:

Now if you have 1000 (BTC, k€, whatever) and a possibility to get ASICs delivered to you, what will be your optimal allocation of capital ?
- 100% on ASICs and 0% of wind turbine (you will pay electricity from the grid)
- 50% on ASICs and 50% on wind turbine (you will pay the maintenance of the turbine + you will pay electricity when there is no wind)
- 0% on ASICs and 100% on wind turbine (you are now a green electricity producer, congrats).

This same question applies to solar pannels.

This same question applies to a combination of wind turbine and solar pannels.


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June 29, 2014, 12:41:03 PM
 #30

antirack:  You forgot to answer this question:

Now if you have 1000 (BTC, k€, whatever) and a possibility to get ASICs delivered to you, what will be your optimal allocation of capital ?
- 100% on ASICs and 0% of wind turbine (you will pay electricity from the grid)
- 50% on ASICs and 50% on wind turbine (you will pay the maintenance of the turbine + you will pay electricity when there is no wind)
- 0% on ASICs and 100% on wind turbine (you are now a green electricity producer, congrats).

This same question applies to solar pannels.

This same question applies to a combination of wind turbine and solar pannels.



I did not forget. My answer was:

So the obvious answer, build your wind turbine AND your bitcoin mine where it's windy Wink
Profit from both, Bitcoins and electricity sales.

So 50% on ASICS and 50% on wind turbine if both would be equal priced ($1,37MM/MW for the mine vs. 1.3MM/MW for the wind turbine).

The big question is where to find the highest mountain with the strongest wind and how to overclock the wind turbine.

 Grin
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June 29, 2014, 12:53:27 PM
 #31

No, you are wrong, you did not run the numbers.  To maximize your overall profit (assuming you can get immediate delivery of the latest miners) is to put 100% of your money into miners and forget the whole wind or solar energy production idea.  Any other mix of investing in miners/wind/solar will reduce your overall profit.

This is because wind and solar are the most expensive ways to make electricity whereas burning dirt (coal) is the cheapest.

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June 29, 2014, 01:27:22 PM
Last edit: June 29, 2014, 01:45:06 PM by antirack
 #32

No, you are wrong, you did not run the numbers.  To maximize your overall profit (assuming you can get immediate delivery of the latest miners) is to put 100% of your money into miners and forget the whole wind or solar energy production idea.  Any other mix of investing in miners/wind/solar will reduce your overall profit.

This is because wind and solar are the most expensive ways to make electricity whereas burning dirt (coal) is the cheapest.

Is that a theory or a fact?

The theoretical 1MW mine above costs $0.88 million at $0.10/kWh per year on electricity cost.

The theoretical wind turbine costs $1.3 million.

It produces theoretical free power after 1.48 years, when it paid itself back.

After that my theoretical mine mines for free.

For a while.

For every single hardware generation I deploy.

Until it breaks down.

If I would be in my home country, where electricity costs close to $0.30/kWh, we have very high mountains AND a lot of wind, how long would it take to pay the wind turbine back and mine for free? A few months.

There is something fishy about these numbers? Double or triple them, it still takes less than a year.

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June 29, 2014, 04:06:04 PM
 #33

No, you are wrong, you did not run the numbers.  To maximize your overall profit (assuming you can get immediate delivery of the latest miners) is to put 100% of your money into miners and forget the whole wind or solar energy production idea.  Any other mix of investing in miners/wind/solar will reduce your overall profit.

This is because wind and solar are the most expensive ways to make electricity whereas burning dirt (coal) is the cheapest.

Is that a theory or a fact?

The theoretical 1MW mine above costs $0.88 million at $0.10/kWh per year on electricity cost.

The theoretical wind turbine costs $1.3 million.

It produces theoretical free power after 1.48 years, when it paid itself back.

After that my theoretical mine mines for free.

For a while.

For every single hardware generation I deploy.

Until it breaks down.

If I would be in my home country, where electricity costs close to $0.30/kWh, we have very high mountains AND a lot of wind, how long would it take to pay the wind turbine back and mine for free? A few months.

There is something fishy about these numbers? Double or triple them, it still takes less than a year.


I think that wind turbine will need to receive some kind of maintenance and upkeep every so often.

You also forgot to include the fact that you need to put the turbine on land that you own/control. You would (in most countries) need to pay property taxes on both the land and the turbine. You would also have a lost opportunity cost as if you did not have the turbine on your property then you could have rented your land to someone and received some kind of rent.

This spot for rent.
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June 30, 2014, 12:24:45 AM
 #34

You might be right about that.

Found some other info in the meantime:

http://www.forbes.com/sites/christopherhelman/2012/12/21/why-its-the-end-of-the-line-for-wind-power/

According to the federal Energy Information Administration, the “levelized cost” of new wind power (including capital and operating costs) is 8.2 cents per kWh. Advanced clean-coal plants cost about 11 cents per kWh, the same as nuclear. But advanced natural gas-burning plants come in at just 6.3 cents per kWh.

And that is probably for large scale corporate installations by the energy producers, not some single miner with his own land. No word about hydro though.

Back to square one.

Hydro power available at places like Washington State is $0.02/kWh to $0.03/kWh.

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June 30, 2014, 12:46:56 AM
 #35

I know that the wholesale price of electricity for Xcel Energy in Colorado is less than $0.03/kWh because at the end of each year they have to pay me wholesale price for my yearly solar overproduction (I get dollar for dollar credit for my yearly consumption that is covered by my production).  That low price is due to all the electricity they import from older dirty coal burning generation facilities in Wyoming.

Old, dirty coal plants produce cheap electricity.  Natual gas is very cheap now due to the fracking of gas wells so gas powered plants also produce very cheap electricity.  Hydro can be cheap.  Everything else is more.

I now a guy with a huge commercial BTC mining warehouse that pays less than $0.02/kWh because he buys power in huge steady quantities.  That is the only way to make money in the mining game long term.

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June 30, 2014, 05:17:37 AM
 #36

The cheapest type energy by far is nuclear power. It is also one of the cleanest forms of energy.

I really do not understand why the "green lobby" does not push nuclear power more

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June 30, 2014, 04:50:42 PM
 #37

The big question is where to find the highest mountain with the strongest wind and how to overclock the wind turbine.

 Grin


I don't know where you live, but at least in the US, the Dakotas would be a great place for wind.  I've read articles before describing them the "Saudi Arabia of wind" and that they have enough wind that if enough wind turbines were built there, they could generate enough power not just for that area, but to power the entire country.  The catch, of course, for the rest of the country is that there still aren't a ton of people in the Dakotas, excluding the boom of population that's happening now because of the oil boom.

But if you move there and plan on setting one up, I hope you like cold weather.  It gets REAL cold there.

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June 30, 2014, 06:33:19 PM
 #38

The big question is where to find the highest mountain with the strongest wind and how to overclock the wind turbine.

 Grin


I don't know where you live, but at least in the US, the Dakotas would be a great place for wind.  I've read articles before describing them the "Saudi Arabia of wind" and that they have enough wind that if enough wind turbines were built there, they could generate enough power not just for that area, but to power the entire country.  The catch, of course, for the rest of the country is that there still aren't a ton of people in the Dakotas, excluding the boom of population that's happening now because of the oil boom.

But if you move there and plan on setting one up, I hope you like cold weather.  It gets REAL cold there.
Cold weather is great for mining.  Free cooling.

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June 30, 2014, 07:07:01 PM
 #39

The cheapest type energy by far is nuclear power. It is also one of the cleanest forms of energy.

I really do not understand why the "green lobby" does not push nuclear power more

Probably just ignorance mostly. Lots of people have irrational fears of things they don't understand and associate with death instead of cleaner and more efficient energy.
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June 30, 2014, 07:16:57 PM
 #40

The cheapest type energy by far is nuclear power. It is also one of the cleanest forms of energy.

I really do not understand why the "green lobby" does not push nuclear power more

Probably just ignorance mostly. Lots of people have irrational fears of things they don't understand and associate with death instead of cleaner and more efficient energy.
I really like what I have read about Thorium reactors.  Seems like the way to go.  If the whole industry was not funded by the need for Plutonium then I think there would be a lot more reseach into things like Thorium reactors.  If you have not read about them check it out.

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June 30, 2014, 11:19:34 PM
 #41

The cheapest type energy by far is nuclear power. It is also one of the cleanest forms of energy.

I really do not understand why the "green lobby" does not push nuclear power more

Probably just ignorance mostly. Lots of people have irrational fears of things they don't understand and associate with death instead of cleaner and more efficient energy.
The green lobby seems to be "well educated" on things like global warming and the effects of other energy types

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July 01, 2014, 01:32:05 AM
 #42

The cheapest type energy by far is nuclear power. It is also one of the cleanest forms of energy.

I really do not understand why the "green lobby" does not push nuclear power more

Probably just ignorance mostly. Lots of people have irrational fears of things they don't understand and associate with death instead of cleaner and more efficient energy.
The green lobby seems to be "well educated" on things like global warming and the effects of other energy types

I'm about as much of an environmentalist as one gets, but I must admit I get rather peeved at my fellow environmentalists who hate nuclear power and wind / solar.  There's always something to object to power plants, but why are you really objecting to a solar power plant installation in the desert?  Yes, I saw this happen.  It saddens me greatly, the continual NIMBY attitude that it seems a lot of environmentalists have does nothing but ensure that we'll keep on being powered by fossil fuels. 

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July 01, 2014, 01:56:22 AM
 #43

I'm about as much of an environmentalist as one gets, but I must admit I get rather peeved at my fellow environmentalists who hate nuclear power and wind / solar.  There's always something to object to power plants, but why are you really objecting to a solar power plant installation in the desert?  Yes, I saw this happen.  It saddens me greatly, the continual NIMBY attitude that it seems a lot of environmentalists have does nothing but ensure that we'll keep on being powered by fossil fuels. 
I think water is the number one concern in the desert and PV installations do require some water.

I have a buddy who is involved with very large scale PV installations.  He told me the following story about having to solve the following string of issues:

PV system would get dust on it reducing the output. 
Solution: wash them periodically.

The water run off from the washing caused weeds to grow, when they got high enough they shaded the collectors reducing the output.
Solution:  periodically bring in goats to eat the weeds.

The goats somtimes chewed on the wires causing failures reducing output.
Solution:  they were noodling that when he talked to me.

And so it goes....

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July 01, 2014, 01:59:22 AM
 #44

The cheapest type energy by far is nuclear power. It is also one of the cleanest forms of energy.

I really do not understand why the "green lobby" does not push nuclear power more

Probably just ignorance mostly. Lots of people have irrational fears of things they don't understand and associate with death instead of cleaner and more efficient energy.
The green lobby seems to be "well educated" on things like global warming and the effects of other energy types

I'm about as much of an environmentalist as one gets, but I must admit I get rather peeved at my fellow environmentalists who hate nuclear power and wind / solar.  There's always something to object to power plants, but why are you really objecting to a solar power plant installation in the desert?  Yes, I saw this happen.  It saddens me greatly, the continual NIMBY attitude that it seems a lot of environmentalists have does nothing but ensure that we'll keep on being powered by fossil fuels. 
I think most environmental want more solar and wind power to be used. This is why they try to get regulations enacted that make it more expensive to produce "carbon" power so that wind and (especially) solar energy can better compete 

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July 01, 2014, 04:31:23 AM
 #45

This recent coindesk article on is interesting:

http://www.coindesk.com/microscope-economic-environmental-costs-bitcoin-mining/

I think the author is conservative, and the likely power consumption is way higher.


When you have projects like MegaBigPower wanting to add 50PH/s to the nethash each month, that's a new power station each year just for them.

http://www.coindesk.com/megabigpower-launches-global-franchisee-network-add-50phs-per-month-bitcoin-network/


At some point the exponential growth has to stop, if only by governments cracking down on the large scale energy wastage.


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July 01, 2014, 04:45:55 AM
 #46

This recent coindesk article on is interesting:

http://www.coindesk.com/microscope-economic-environmental-costs-bitcoin-mining/

I think the author is conservative, and the likely power consumption is way higher.


When you have projects like MegaBigPower wanting to add 50PH/s to the nethash each month, that's a new power station each year just for them.

http://www.coindesk.com/megabigpower-launches-global-franchisee-network-add-50phs-per-month-bitcoin-network/


At some point the exponential growth has to stop, if only by governments cracking down on the large scale energy wastage.

Mining uses an insane amount of energy.  I honestly hope governments do crack down on people doing this (at least those who aren't powering it with their own PV setup).  This really is the biggest problem with bitcoin in my opinion, it's a huge energy hog.  I think most of the things about bitcoin taking over would be great, but this is definitely not one of those aspects of bitcoin that are a positive.  (Yeah, I know, the fiat system also uses a tremendous amount of energy, but we really should be striving to do better than them, rather than merely not as bad.)

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July 01, 2014, 06:15:28 AM
Last edit: July 01, 2014, 06:26:04 AM by Collider
 #47

The whole "mining is a huge waste of electricity" motion is just completely wrong.

Mining currently uses between 105MW and 150MW.
However, the act of mining is the act of keeping the Bitcoin payment system alive and secure.

Do you know how much electricity all the banks in the world use for their "services" to the people?
Hint: It is most likely much more.

Regardless of the above, many miners use renewable energy sources for mining, as in most areas it is simply cheaper.

The example of WA state with 2-4ct/kWh for commercial use is just one example, but it clearly shows that unsubsidized renewable energy can be far cheaper than any coal / gas plant.

Many miners also get hosting in Iceland, having the benefit of 100% renewable energy there plus extremely good conditions for free cooling (my miner has an intake temperature of 18°C in the summer).


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July 01, 2014, 06:24:55 AM
 #48

The whole "mining is a huge waste of electricity" motion is just completely wrong.

Mining currently uses between 105MW and 150MW.
However, the act of mining is the act of keeping the Bitcoin payment system alive and secure.

Do you know how much electricity all the banks in the world use for their "services" to the people?
Hint: It is most likely much more.


Nonsense, the comparison between mining and the banking network is specious. You don't have to mine fiat the power consumption of the banking system is to provide the layer above the currency, the accounting, recording, lending, usury, and other services. Bitcoin still needs those infrastructures as well, it's just that it's not widely accepted so that part of the infrastructure is currently quite small, but growing every day. If Bitcoin becomes mainstream and adopted by banks and credit card providers, you wait and see how much total power is used then!

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July 01, 2014, 06:26:23 AM
 #49

The whole "mining is a huge waste of electricity" motion is just completely wrong.

Mining currently uses between 105MW and 150MW.
However, the act of mining is the act of keeping the Bitcoin payment system alive and secure.

Do you know how much electricity all the banks in the world use for their "services" to the people?
Hint: It is most likely much more.


Nonsense, the comparison between mining and the banking network is specious. You don't have to mine fiat the power consumption of the banking system is to provide the layer above the currency, the accounting, recording, lending and other services. Bitcoin still needs those infrastructures as well, it's just that it's not widely accepted so that part of the infrastructure is currently quite small, but growing every day. If Bitcoin becomes mainstream and adopted by banks and credit card providers, you wait and see how much total power is used then!


Mining uses a miniscule amount of energy compared to all the wasteful use of electricity in the United States alone.

How come the electricity consumption per capita is more than 2.5* that of Germany?

If everyone of the 318m US citizens would reduce power consumption by only 10% (easily achieved by switching lightbulbs...), it would save 25 700 MW of generation capacity alone.

You can do all the bitcoin mining of your hearts´content with that, and then some.
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July 01, 2014, 06:31:49 AM
Last edit: July 01, 2014, 06:59:05 AM by ernie-
 #50


Mining uses a miniscule amount of energy compared to all the wasteful use of electricity in the United States alone.

How come the electricity consumption per capita is more than 2.5* that of Germany?

If everyone of the 318m US citizens would reduce power consumption by only 10% (easily achieved by switching lightbulbs...), it would save 25 700 MW of generation capacity alone.

You can do all the bitcoin mining of your hearts´content with that, and then some.
And how long do you think it will be before the bitcoin mining network is up to many gigawatts of power consumption, with nethash growing by 60% each month?

If only MegaBigPower keeps up with their 50PH/s per mth. expansion plans, that will require a new nuclear power station every 18months.



http://www.coindesk.com/megabigpower-launches-global-franchisee-network-add-50phs-per-month-bitcoin-network/

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July 01, 2014, 06:44:57 AM
 #51


If only MegaBigPower keeps up with their expansion plans, that will require a new nuclear power station every 18months.

In a first stage they want to build 10MW of capacity until 2015 and are planning to build one up to 50MW facility.

You probably might not know this but assuming exponential difficulty growth is obviously a fallacy (aslong as there isn´t exponential price increase in Btc).

There is a very real limit to difficulty, and it is Btc price, power efficiency, power price, available hosting facilities, hardware price and some other factors.


Regardless, compared to my example, Difficulty could increase atleast 171 fold before being the same amount that can easily be saved by some energy efficient appliances in the household in the US alone.
It really is a TINY usage compared to wasteful electricity usage in the US, let alone globally.
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July 01, 2014, 09:14:10 AM
 #52

can energy be redirected to do useful things? maybe i'm speaking bullshit i know lol
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July 01, 2014, 09:20:03 AM
 #53

can energy be redirected to do useful things? maybe i'm speaking bullshit i know lol
Its mostly waste heat, so that can have uses.
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July 01, 2014, 12:27:34 PM
 #54


Mining uses a miniscule amount of energy compared to all the wasteful use of electricity in the United States alone.

How come the electricity consumption per capita is more than 2.5* that of Germany?

If everyone of the 318m US citizens would reduce power consumption by only 10% (easily achieved by switching lightbulbs...), it would save 25 700 MW of generation capacity alone.

You can do all the bitcoin mining of your hearts´content with that, and then some.
And how long do you think it will be before the bitcoin mining network is up to many gigawatts of power consumption, with nethash growing by 60% each month?

If only MegaBigPower keeps up with their 50PH/s per mth. expansion plans, that will require a new nuclear power station every 18months.



http://www.coindesk.com/megabigpower-launches-global-franchisee-network-add-50phs-per-month-bitcoin-network/



This picture is mind blowing. Wow, bitcoin mining has come a long way. It's almost ridiculous at this point. How much further are we going to see this go?
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July 01, 2014, 03:45:16 PM
Last edit: July 01, 2014, 04:00:44 PM by BurtW
 #55

There is a very real limit to difficulty, and it is Btc price, power efficiency, power price, available hosting facilities, hardware price and some other factors.

The upper limit is calculated in this thread:

https://bitcointalk.org/index.php?topic=281279.0

Based on $100 per BTC and $0.10 per kWh the electrical cost break even point is about 179.7 PH/s.

Adjusting for $600 per BTC (x6) and $0.02 per kWh (x5) would give us 179.7 * 6 * 5 = 5,391 PH/s.

The same thread assumes 0.8 J/GH so:

    5,391 PH/s = 5.391 * 1018 H/s
    0.8 J/GH = 0.8 * 10-9 J/H

    (5.391 * 1018 H/s) * (0.8 * 10-9 J/H)
 
    = ( 5.391 * 0.8 ) * ( 1018 * 10-9 )  ( H/s * J/H )

    = 4.3128 * 10(18-9)  (J/s)

    = 4.3128 GW

World power production from:

http://en.wikipedia.org/wiki/Electricity_generation

is about 2311.4 GW.

So Bitcoin would use about 0.1866 % of world electrical output in this maximum build out scenario.

BTW in the above scenario the difficulty would be 753,000,000,000

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July 01, 2014, 06:53:22 PM
 #56

[...]

Mining uses a miniscule amount of energy compared to all the wasteful use of electricity in the United States alone.

How come the electricity consumption per capita is more than 2.5* that of Germany?

If everyone of the 318m US citizens would reduce power consumption by only 10% (easily achieved by switching lightbulbs...), it would save 25 700 MW of generation capacity alone.

You can do all the bitcoin mining of your hearts´content with that, and then some.


This statement is just very shortsighted. Minuscule is only bitcoin's market cap compared to the world's whole economy.

[...]

    = 4.3128 GW

World power production from:

http://en.wikipedia.org/wiki/Electricity_generation

is about 2311.4 GW.

So Bitcoin would use about 0.1866 % of world electrical output in this maximum build out scenario.

BTW in the above scenario the difficulty would be 753,000,000,000

That is today, at 600$/BTC. Let's assume 6000$/BTC and you'll already be using 1.866% of the world's elecricity use but still be a minuscule economy. (directly following from the calculation above)

This by the way also means hidden cost of the bitcoin network paid by everybody because of increasing electricity prices due to increased demand.

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July 01, 2014, 07:25:52 PM
 #57

Quote
Google on Thursday shed some light on its energy consumption, which worked out to about 2.26 million megawatt hours of electricity in 2010.
(http://www.pcmag.com/article2/0,2817,2392654,00.asp) also (http://www.popsci.com/science/article/2011-09/google-releases-its-energy-consumption-numbers-revealing-260-million-watt-continuous-suck)

( 2.26 * 1012 Wh/y ) / (24*365.25 h/y) = 257 MW

Quote
Direct electricity use of the Internet is probably around 10% of total electricity consumption, said Jon Koomey Research Fellow at Stanford University but he immediately added that the number does not tell us very much.
(http://www.techthefuture.com/technology/how-much-electricity-does-the-internet-use/)

Current minimum consumption of the Bitcoin network (it is probably more than this due to AC needs and the use of less efficient older hashing units):

From https://blockchain.info/charts/hash-rate lets call it 120,000,000 GH/s

(1.2 * 1017 H/s) * (0.8 * 10-9 J/H)
 
    = ( 1.2 * 0.8 ) * ( 1017 * 10-9 )  ( H/s * J/H )

    = 0.96 * 10(17-9)  (J/s)

    = 96 MW

Let's double it.  Still less than Google at the current time.

We should surpase Google for sure.

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July 01, 2014, 08:20:52 PM
 #58

I have just updated my thread here:

https://bitcointalk.org/index.php?topic=518111.msg7626097#msg7626097

where I show what would happen if the growth in hash rate over the last one year period (23.45% per adjustment) were to continue at the same rate for one more year.

It shows that something (price or growth in hash rate) must give before the end of the year.

You can also see the current power and energy numbers and most importantly for this thread the projected energy and power consumption if the growth in hash rate were to be maintained for just one more year.  Don't worry it can't and it won't.

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July 01, 2014, 09:20:35 PM
 #59


The guy is clearly wrong, he claims the Bitcoin emission trend is decreasing. Then he quotes the nethash as 95PH/s yet it's already hit 145PH/s a week ago. Trying to compare Bitcoin mining with physical mining in the real world is obviously a stunt and an attempt to distract and uninformed reader. There is no relationship between the two processes other than they both use the word "mining'.

What he fails to grasp is the exponential growth in bitcoin mining power consumption.









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July 02, 2014, 09:11:59 AM
 #60

I think one way to slow the growth is reduce the block reward from 25 coins to just 1 coin per block, there is no way the BTC price will jump 25 fold to compensate as more then half the coins are already mined so there is no shortage of supply, and no reason for that much fiat to enter the market.
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July 02, 2014, 07:01:04 PM
 #61

[...]
The only solution I can see is :
- when there are no longer possible improvements in ASIC technologies,
- ASICs are sold at marginal cost of production (a few cents per chip),
- Difficulty is so high that a mining operation is only marginally profitable ($100 of electricity mining between $99 and $101 of bitcoins)
Then what may happen is :
- Large mining farms contract with electricity producers and accept to modulate their usage on "orders" given by the grid
- This way they would pay the real-time spot price of electricity (positive or negative)
- At night, or when there is too much wind Smiley, the farm could even be paid to burn electricity !
Your scenario is not very likely to happen.
And good luck with network security if mining power is fluctuating heavily.
Of course, if miners would be distributed equally around the globe, electricity spot prices would even out quite well and so would actual hashpower. But a heavy centralization of mining in the countries with lowest electricity prices is much more probable in your scenario.

I don't see how your suggestions could make things better. The only way out I see is a hard fork to PoS. With today's market cap that should be pretty secure. Or all of us support energy-sufficient altcoins by holding more value in a PoS altcoin than in Bitcoin!

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July 02, 2014, 07:06:15 PM
 #62

I think one way to slow the growth is reduce the block reward from 25 coins to just 1 coin per block, there is no way the BTC price will jump 25 fold to compensate as more then half the coins are already mined so there is no shortage of supply, and no reason for that much fiat to enter the market.

According to this formula:
[...]
GlobalEnergyConsumptionForMining ~= (MiningReward + TransactionFees) * bitcoinValueInUSD / EnergyCostInUSDperkWh[/i]
your suggestion might make things 25x better. But there would be a shortage of liquidity on the exchanges driving BTC price. So it's not 25x.
And it only works if people do not pay more transaction fees.

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July 02, 2014, 08:07:25 PM
 #63

I think one way to slow the growth is reduce the block reward from 25 coins to just 1 coin per block, there is no way the BTC price will jump 25 fold to compensate as more then half the coins are already mined so there is no shortage of supply, and no reason for that much fiat to enter the market.
Great minds think alike (you and Satoshi)!  In fact, the block reward will be reduced to just 0.78125000 BTC per block in about 2033. 

See entire schedule here:

Code:
       Original      BTC per
Era  start year        block
---  ----------  -----------
  0        2009  50.00000000
  1        2013  25.00000000
  2        2017  12.50000000
  3        2021   6.25000000
  4        2025   3.12500000
  5        2029   1.56250000
  6        2033   0.78125000
  7        2037   0.39062500
  8        2041   0.19531250
  9        2045   0.09765625
 10        2049   0.04882813
 11        2053   0.02441406
 12        2057   0.01220703
 13        2061   0.00610352
 14        2065   0.00305176
 15        2069   0.00152588
 16        2073   0.00076294
 17        2077   0.00038147
 18        2081   0.00019073
 19        2085   0.00009537
 20        2089   0.00004768
 21        2093   0.00002384
 22        2097   0.00001192
 23        2101   0.00000596
 24        2105   0.00000298
 25        2109   0.00000149
 26        2113   0.00000075
 27        2117   0.00000037
 28        2121   0.00000019
 29        2125   0.00000009
 30        2129   0.00000005
 31        2133   0.00000002
 32        2137   0.00000001



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July 02, 2014, 09:12:20 PM
 #64

I think one way to slow the growth is reduce the block reward from 25 coins to just 1 coin per block, there is no way the BTC price will jump 25 fold to compensate as more then half the coins are already mined so there is no shortage of supply, and no reason for that much fiat to enter the market.

According to this formula:
[...]
GlobalEnergyConsumptionForMining ~= (MiningReward + TransactionFees) * bitcoinValueInUSD / EnergyCostInUSDperkWh[/i]
your suggestion might make things 25x better. But there would be a shortage of liquidity on the exchanges driving BTC price. So it's not 25x.
And it only works if people do not pay more transaction fees.
More than half of all the 21million bitcoins that were ever designed to exist are already out there in circulation. Mining new coins is not important to liquidity, we just need to find 144 blocks each day for transactions to ride on, it no longer requires many coins in those blocks as we have enough in circulation, so it might as well just be the one coin. I don't think waiting until 2029 is the answer, the world will be struggling for oil and coal around then unless something else happens to curb world demand.






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July 02, 2014, 09:31:35 PM
 #65

I think one way to slow the growth is reduce the block reward from 25 coins to just 1 coin per block, there is no way the BTC price will jump 25 fold to compensate as more then half the coins are already mined so there is no shortage of supply, and no reason for that much fiat to enter the market.
Great minds think alike (you and Satoshi)!  In fact, the block reward will be reduced to just 0.78125000 BTC per block in about 2033. 

See entire schedule here:

Code:
       Original      BTC per
Era  start year        block
---  ----------  -----------
  0        2009  50.00000000
  1        2013  25.00000000
  2        2017  12.50000000
  3        2021   6.25000000
  4        2025   3.12500000
  5        2029   1.56250000
  6        2033   0.78125000
  7        2037   0.39062500
  8        2041   0.19531250
  9        2045   0.09765625
 10        2049   0.04882813
 11        2053   0.02441406
 12        2057   0.01220703
 13        2061   0.00610352
 14        2065   0.00305176
 15        2069   0.00152588
 16        2073   0.00076294
 17        2077   0.00038147
 18        2081   0.00019073
 19        2085   0.00009537
 20        2089   0.00004768
 21        2093   0.00002384
 22        2097   0.00001192
 23        2101   0.00000596
 24        2105   0.00000298
 25        2109   0.00000149
 26        2113   0.00000075
 27        2117   0.00000037
 28        2121   0.00000019
 29        2125   0.00000009
 30        2129   0.00000005
 31        2133   0.00000002
 32        2137   0.00000001



The theory is that there will be enough TX volume that TX fees make up for the lower block subsidies over time

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July 02, 2014, 09:34:02 PM
 #66

More than half of all the 21million bitcoins that were ever designed to exist are already out there in circulation. Mining new coins is not important to liquidity, we just need to find 144 blocks each day for transactions to ride on, it no longer requires many coins in those blocks as we have enough in circulation, so it might as well just be the one coin. I don't think waiting until 2029 is the answer, the world will be struggling for oil and coal around then unless something else happens to curb world demand.
Oh.

You are suggesting a change to the protocol.  Not just any change but a change that would cause a hard fork.  And, not just any hard fork but a hard fork that would greatly punish the miners that switch to your suggested alternate protocol (only 1 BTC/block) versus staying on the original protocol (25 BTC/block).

So, it will never happen.  And just so you know when I said never, I meant never and there is no need to try to argue for the various virtues of the proposal - unless you actually like talking to a walls or trying to move mountains.

Our family was terrorized by Homeland Security.  Read all about it here:  http://www.jmwagner.com/ and http://www.burtw.com/  Any donations to help us recover from the $300,000 in legal fees and forced donations to the Federal Asset Forfeiture slush fund are greatly appreciated!
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July 02, 2014, 09:36:07 PM
 #67

]The theory is that there will be enough TX volume that TX fees make up for the lower block subsidies over time
Yes, of course. 

BTW have you (or anyone else) seen a good technical thread that tries to estimate the fees over time.  For a project I am doing I need to combine the chart I just published with a sound estimate as to how the fees are going to grow over time.  Just wondering if anyone has spotted such a thread anywhere.

Our family was terrorized by Homeland Security.  Read all about it here:  http://www.jmwagner.com/ and http://www.burtw.com/  Any donations to help us recover from the $300,000 in legal fees and forced donations to the Federal Asset Forfeiture slush fund are greatly appreciated!
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July 03, 2014, 12:27:58 AM
 #68

More than half of all the 21million bitcoins that were ever designed to exist are already out there in circulation. Mining new coins is not important to liquidity, we just need to find 144 blocks each day for transactions to ride on, it no longer requires many coins in those blocks as we have enough in circulation, so it might as well just be the one coin. I don't think waiting until 2029 is the answer, the world will be struggling for oil and coal around then unless something else happens to curb world demand.
Oh.

You are suggesting a change to the protocol.  Not just any change but a change that would cause a hard fork.  And, not just any hard fork but a hard fork that would greatly punish the miners that switch to your suggested alternate protocol (only 1 BTC/block) versus staying on the original protocol (25 BTC/block).

So, it will never happen.  And just so you know when I said never, I meant never and there is no need to try to argue for the various virtues of the proposal - unless you actually like talking to a walls or trying to move mountains.

I am quite sure there will be more BTC hard forks with protocol changes.  I have read some of the proposals. I don't think there has been much discussion on energy saving though.
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July 03, 2014, 12:45:33 AM
 #69

I am quite sure there will be more BTC hard forks with protocol changes.  I have read some of the proposals. I don't think there has been much discussion on energy saving though.
There are dozens and dozens of theads discussing the energy consumption of the Bitcoin network and proposals on how to "fix" it - mostly by going from POW to POS but there are some others to be found with some searching.

Just search for "Bitcoin" and "POS" and you will find some hard fork proposals that might interest you but, of course, do not interest any of the miners who just bought ASICs.

Our family was terrorized by Homeland Security.  Read all about it here:  http://www.jmwagner.com/ and http://www.burtw.com/  Any donations to help us recover from the $300,000 in legal fees and forced donations to the Federal Asset Forfeiture slush fund are greatly appreciated!
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July 03, 2014, 01:57:29 AM
 #70

I am quite sure there will be more BTC hard forks with protocol changes.  I have read some of the proposals. I don't think there has been much discussion on energy saving though.
There are dozens and dozens of theads discussing the energy consumption of the Bitcoin network and proposals on how to "fix" it - mostly by going from POW to POS but there are some others to be found with some searching.

Just search for "Bitcoin" and "POS" and you will find some hard fork proposals that might interest you but, of course, do not interest any of the miners who just bought ASICs.
PoS has it's problems, it's currently on the prohibited changes list.  https://en.bitcoin.it/wiki/Prohibited_changes


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July 03, 2014, 04:12:35 AM
 #71

I am quite sure there will be more BTC hard forks with protocol changes.  I have read some of the proposals. I don't think there has been much discussion on energy saving though.
There are dozens and dozens of theads discussing the energy consumption of the Bitcoin network and proposals on how to "fix" it - mostly by going from POW to POS but there are some others to be found with some searching.

Just search for "Bitcoin" and "POS" and you will find some hard fork proposals that might interest you but, of course, do not interest any of the miners who just bought ASICs.
PoS has it's problems, it's currently on the prohibited changes list.  https://en.bitcoin.it/wiki/Prohibited_changes
PoS would simply make Bitcoin almost centralized since so few control so high of a percentage of all the coins

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July 03, 2014, 07:09:37 AM
 #72

PoS has it's problems, it's currently on the prohibited changes list.  https://en.bitcoin.it/wiki/Prohibited_changes
PoS would simply make Bitcoin almost centralized since so few control so high of a percentage of all the coins
[/quote]
So we don't have to discuss that as a possible option/solution.  Cool.

Our family was terrorized by Homeland Security.  Read all about it here:  http://www.jmwagner.com/ and http://www.burtw.com/  Any donations to help us recover from the $300,000 in legal fees and forced donations to the Federal Asset Forfeiture slush fund are greatly appreciated!
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July 04, 2014, 05:49:38 AM
 #73

I am quite sure there will be more BTC hard forks with protocol changes.  I have read some of the proposals. I don't think there has been much discussion on energy saving though.
There are dozens and dozens of theads discussing the energy consumption of the Bitcoin network and proposals on how to "fix" it - mostly by going from POW to POS but there are some others to be found with some searching.

Just search for "Bitcoin" and "POS" and you will find some hard fork proposals that might interest you but, of course, do not interest any of the miners who just bought ASICs.
PoS has it's problems, it's currently on the prohibited changes list.  https://en.bitcoin.it/wiki/Prohibited_changes
PoS would simply make Bitcoin almost centralized since so few control so high of a percentage of all the coins
I have the same concern with PoW mining, so I don't see the difference

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July 04, 2014, 05:58:36 AM
 #74

Technology stills evolving, more efficient mining hardware will appears, adding that not only Bitcoin has energy consumption problems, the rest of the world needs now alternative clean forms of energy that i believe are being researched so hard right now...

Besides, current prices are too low, some things would be different if Bitcoin goes to the thousand again...

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July 04, 2014, 07:02:03 AM
 #75

Technology stills evolving, more efficient mining hardware will appears, adding that not only Bitcoin has energy consumption problems, the rest of the world needs now alternative clean forms of energy that i believe are being researched so hard right now...

Besides, current prices are too low, some things would be different if Bitcoin goes to the thousand again...


The problem would be worse if the bitcoin price rises, as mega farms could afford more energy to waste.

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July 04, 2014, 11:15:05 AM
 #76

Technology stills evolving, more efficient mining hardware will appears, adding that not only Bitcoin has energy consumption problems, the rest of the world needs now alternative clean forms of energy that i believe are being researched so hard right now...

Besides, current prices are too low, some things would be different if Bitcoin goes to the thousand again...


Efficiency of mining hardware has no effect on energy consumption of the network. It only drives difficulty.

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July 05, 2014, 03:11:43 AM
 #77

Technology stills evolving, more efficient mining hardware will appears, adding that not only Bitcoin has energy consumption problems, the rest of the world needs now alternative clean forms of energy that i believe are being researched so hard right now...

Besides, current prices are too low, some things would be different if Bitcoin goes to the thousand again...


Efficiency of mining hardware has no effect on energy consumption of the network. It only drives difficulty.
This is not true. If more efficient miners are on the network then the average energy consumption per THs on the network will be lower. As the difficulty increases, less efficient miners will take their machine offline as it will be consuming more energy then the bitcoin it produces will pay for.

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July 05, 2014, 01:13:54 PM
 #78

Yes, efficiency does not matter when calculating the power consumption of the entire Bitcoin network.

Power consumption only depends on five things:  the exchange rate of BTC, the era, the average amount of fees per hour, the cost of energy, and the average gross profit margin of the miners.

Watch this:

x = exchange rate [USD/BTC]
e = era [0..32] (we are currently in era 1)
f = average fees per hour [BTC/hour]
c = cost of energy [USD/kWh]
g = average gross profit margin [unitless ratio]

From the era we can caclulate the average hourly BTC subsidy rate:

s = 6(50/2e) [BTC/hour]

And the amount of BTC all the miners in the world would make per hour:

b = s + f [BTC/hour]

From this we can calculate the amount of USD per hour all the miners in the world would make:

u = b(x) [USD/hour]

Given the worldwide average gross profit margin the amount spent worldwide on energy would be:

u(1 - g) [USD/hour]

And finally, the worldwide power consumption would be:

P = u(1 - g)/c [kW]

  = b(x)(1 - g)/c [kW]
  = (s + f)(x)(1 - g)/c [kW]
  = (6(50/2e) + f)(x)(1 - g)/c [kW]

Notice that efficiency does not enter into this equation and does not matter.

You do not need to know or estimate the average overall efficiency of the mining network unless you want to calculate the difficulty and/or hashrate.

Our family was terrorized by Homeland Security.  Read all about it here:  http://www.jmwagner.com/ and http://www.burtw.com/  Any donations to help us recover from the $300,000 in legal fees and forced donations to the Federal Asset Forfeiture slush fund are greatly appreciated!
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July 06, 2014, 04:15:29 AM
 #79

Technology stills evolving, more efficient mining hardware will appears, adding that not only Bitcoin has energy consumption problems, the rest of the world needs now alternative clean forms of energy that i believe are being researched so hard right now...

Besides, current prices are too low, some things would be different if Bitcoin goes to the thousand again...


Efficiency of mining hardware has no effect on energy consumption of the network. It only drives difficulty.
This is not true. If more efficient miners are on the network then the average energy consumption per THs on the network will be lower. As the difficulty increases, less efficient miners will take their machine offline as it will be consuming more energy then the bitcoin it produces will pay for.

Yes, and at equilibrium, the energy spent by the network has exactly the value of the minted coins.
Proof of Work = (literally) Proof of Energy Spent
There is no such thing as "efficient" mining hardware.
I would disagree with your statement about there being no such thing as "efficient" mining hardware. I would define efficient miners as machines that use less electricity per GHs then the network does as a whole.

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July 06, 2014, 05:03:41 AM
 #80


I would disagree with your statement about there being no such thing as "efficient" mining hardware. I would define efficient miners as machines that use less electricity per GHs then the network does as a whole.
Your theory doesn't match the facts. People just keep adding more mining hardware until the electricity consumption is as much as they can stand. The diff rises and they get less BTC than they were getting with the lower efficiency setup.
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July 06, 2014, 02:46:33 PM
 #81

Yes, and at equilibrium, the energy spent by the network has exactly the value of the minted coins.
Proof of Work = (literally) Proof of Energy Spent
There is no such thing as "efficient" mining hardware.
I would disagree with your statement about there being no such thing as "efficient" mining hardware. I would define efficient miners as machines that use less electricity per GHs then the network does as a whole.

Of course, mining hardware can become more efficient.  The point is that does not matter with respect to the total power and/or energy consumption of the Bitcoin network.  Look at the math above where I proved this to you.  

https://bitcointalk.org/index.php?topic=520977.msg7687843#msg7687843

Also, if that is too much to read then re-read this until you understand it:

Your theory doesn't match the facts. People just keep adding more mining hardware until the electricity consumption is as much as they can stand. The diff rises and they get less BTC than they were getting with the lower efficiency setup.

See yet?

Our family was terrorized by Homeland Security.  Read all about it here:  http://www.jmwagner.com/ and http://www.burtw.com/  Any donations to help us recover from the $300,000 in legal fees and forced donations to the Federal Asset Forfeiture slush fund are greatly appreciated!
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July 07, 2014, 12:58:21 AM
 #82

Yes, and at equilibrium, the energy spent by the network has exactly the value of the minted coins.
Proof of Work = (literally) Proof of Energy Spent
There is no such thing as "efficient" mining hardware.
I would disagree with your statement about there being no such thing as "efficient" mining hardware. I would define efficient miners as machines that use less electricity per GHs then the network does as a whole.

Of course, mining hardware can become more efficient.  The point is that does not matter with respect to the total power and/or energy consumption of the Bitcoin network.  Look at the math above where I proved this to you.  

https://bitcointalk.org/index.php?topic=520977.msg7687843#msg7687843

Also, if that is too much to read then re-read this until you understand it:

Your theory doesn't match the facts. People just keep adding more mining hardware until the electricity consumption is as much as they can stand. The diff rises and they get less BTC than they were getting with the lower efficiency setup.

See yet?
In theory, you could add a little bit of additional mining capacity (that is very efficient in terms of electric usage) to the network that would increase the difficulty a small amount, but that small amount would make it so a lot of less efficient miners no longer mine enough to earn a profit after electric costs so they are taken offline, and then subsequently replaced with more efficient miners with equal hashpower but with less overall electric consumption.   

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July 07, 2014, 03:17:03 AM
 #83

Technology stills evolving, more efficient mining hardware will appears, adding that not only Bitcoin has energy consumption problems, the rest of the world needs now alternative clean forms of energy that i believe are being researched so hard right now...

Besides, current prices are too low, some things would be different if Bitcoin goes to the thousand again...


The problem would be worse if the bitcoin price rises, as mega farms could afford more energy to waste.
Other payment methods use electricity as well. It is just that it is not as transparent as to how much electricity visa for example uses to process their payments. Visa must power their office buildings, computers for employees, computers that process transactions, banks that send money to/from visa (their employees, offices, and computers), printers that print customer statements, call centers to resolve disputes.

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July 07, 2014, 03:54:17 AM
 #84

Technology stills evolving, more efficient mining hardware will appears, adding that not only Bitcoin has energy consumption problems, the rest of the world needs now alternative clean forms of energy that i believe are being researched so hard right now...

Besides, current prices are too low, some things would be different if Bitcoin goes to the thousand again...


The problem would be worse if the bitcoin price rises, as mega farms could afford more energy to waste.
Other payment methods use electricity as well. It is just that it is not as transparent as to how much electricity visa for example uses to process their payments. Visa must power their office buildings, computers for employees, computers that process transactions, banks that send money to/from visa (their employees, offices, and computers), printers that print customer statements, call centers to resolve disputes.
Don't confuse mining crypto with payment networks, the two are not the same. Fiat doesn't need mining energy.

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July 08, 2014, 06:09:31 AM
 #85

The amount of energy used for the Bitcoin Network is tiny compared to the amount of money to print, mint, guard, secure, etc for say fiat currency.

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July 08, 2014, 06:12:58 AM
 #86

The amount of energy used for the Bitcoin Network is tiny compared to the amount of money to print, mint, guard, secure, etc for say fiat currency.

For now, perhaps.  But how big would this energy consumption be if the bitcoin network were as big as a traditional major finanical company like, say, Visa?  We should strive to do better than fiat is doing, not merely being not as bad as the traditional system.

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July 08, 2014, 07:44:03 AM
Last edit: July 14, 2014, 06:58:27 AM by ernie-
 #87

The amount of energy used for the Bitcoin Network is tiny compared to the amount of money to print, mint, guard, secure, etc for say fiat currency.

For now, perhaps.  But how big would this energy consumption be if the bitcoin network were as big as a traditional major finanical company like, say, Visa?  We should strive to do better than fiat is doing, not merely being not as bad as the traditional system.
Visa doesn't mine coins, their network has nothing to do with the creation of money, the banks do that for them. Your comparison is flawed.
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July 08, 2014, 08:34:22 AM
 #88

The amount of energy used for the Bitcoin Network is tiny compared to the amount of money to print, mint, guard, secure, etc for say fiat currency.

For now, perhaps.  But how big would this energy consumption be if the bitcoin network were as big as a traditional major finanical company like, say, Visa?  We should strive to do better than fiat is doing, not merely being not as bad as the traditional system.
Visa don't mine coins, their network has nothing to do with the creation of money, the banks do that for them. Your comparison is flawed.

If not them, then who would you compare bitcoin to?  I grant you that it's not a perfect comparison, but there is no one to one comparison between bitcoin and the traditional financial world: the bitcoin network / ledger / mining combined creates new coins, processes transactions, handles transaction fees, etc. 

I picked a major player in the traditional financial system to choose to compare.  But if you want to say that it's a flawed comparison, then you're missing the point here.  The point is if you're going to make a comparison, you have to compare bitcoin to something.  And bitcoin does what credit card companies (like Visa) do, it does what Banks do in creating money, it handles transaction fees, which traditionally would be something credit card companies do.  So...what would you compare bitcoin with?  If you want a true one to one comparison, you're shit out of luck, because there isn't any one to one comparison since the bitcoin network does what several different players of the traditional financial system do. 

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July 08, 2014, 10:35:43 AM
Last edit: July 08, 2014, 10:46:07 AM by ernie-
 #89


If not them, then who would you compare bitcoin to?  I grant you that it's not a perfect comparison, but there is no one to one comparison between bitcoin and the traditional financial world: the bitcoin network / ledger / mining combined creates new coins, processes transactions, handles transaction fees, etc.  

I picked a major player in the traditional financial system to choose to compare.  But if you want to say that it's a flawed comparison, then you're missing the point here.  The point is if you're going to make a comparison, you have to compare bitcoin to something.  And bitcoin does what credit card companies (like Visa) do, it does what Banks do in creating money, it handles transaction fees, which traditionally would be something credit card companies do.  So...what would you compare bitcoin with?  If you want a true one to one comparison, you're shit out of luck, because there isn't any one to one comparison since the bitcoin network does what several different players of the traditional financial system do.  

The comparison flawed, it's like trying to compare cars to roads, it just doesn't make sense. The Visa style payment gateways sit on top of the currencies. Visa could easily add Bitcoin as one of the supported currencies. Visa chooses to use fiat atm, but I can see it adding some crypto in the future, and it's infrastructure or energy consumption will hardly need to change as it wont be mining the crypto.

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July 08, 2014, 03:46:02 PM
 #90

I sometimes think Satoshi was pushed by Energy lobby's.

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July 09, 2014, 02:45:46 AM
 #91


If not them, then who would you compare bitcoin to?  I grant you that it's not a perfect comparison, but there is no one to one comparison between bitcoin and the traditional financial world: the bitcoin network / ledger / mining combined creates new coins, processes transactions, handles transaction fees, etc.  

I picked a major player in the traditional financial system to choose to compare.  But if you want to say that it's a flawed comparison, then you're missing the point here.  The point is if you're going to make a comparison, you have to compare bitcoin to something.  And bitcoin does what credit card companies (like Visa) do, it does what Banks do in creating money, it handles transaction fees, which traditionally would be something credit card companies do.  So...what would you compare bitcoin with?  If you want a true one to one comparison, you're shit out of luck, because there isn't any one to one comparison since the bitcoin network does what several different players of the traditional financial system do.  

The comparison flawed, it's like trying to compare cars to roads, it just doesn't make sense. The Visa style payment gateways sit on top of the currencies. Visa could easily add Bitcoin as one of the supported currencies. Visa chooses to use fiat atm, but I can see it adding some crypto in the future, and it's infrastructure or energy consumption will hardly need to change as it wont be mining the crypto.
I really don't see credit card processors using crypto currencies ever. Bitcoin was designed to make it cheaper then using something like a credit card. If someone were to use a credit card to transact with bitcoin then they would lose the advantages of using bitcoin in the first place.

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July 09, 2014, 03:38:29 AM
 #92

I really don't see credit card processors using crypto currencies ever. Bitcoin was designed to make it cheaper then using something like a credit card. If someone were to use a credit card to transact with bitcoin then they would lose the advantages of using bitcoin in the first place.

They might, if we ever get to the point (many years into the future) where fiat becomes obsolete.  The advantage of credit cards is, at least in part, for people living paycheck to paycheck, they can spend money that they don't have yet and pay the bill later when they've been paid.  But I agree with your overall point, it does seem rather counter-intuitive that someone would use both a credit card and bitcoins at the same time.  Debit cards would make more sense, though.

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July 09, 2014, 03:40:11 AM
 #93

I have to imagine energy consumption is through the roof.
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July 09, 2014, 08:16:59 AM
Last edit: July 09, 2014, 01:59:35 PM by BurtW
Merited by vapourminer (1)
 #94

That is an interesting point with respect to the dream of having 1 BTC = $100,000 (or pick your favorite high number).

Using my previously derived formula for the power consumption:

P = (6(50/2e) + f)(x)(1 - g)/c [kW]

where:

x = exchange rate [USD/BTC]
e = era [0..32] (we are currently in era 1)
f = average fees per hour [BTC/hour]
c = cost of energy [USD/kWh]
g = average gross profit margin [unitless ratio]

we can look at the power consumption in each era assuming a price of $100,000 per BTC.

In order to make it simple I will make the following assumptions:

x = $100,000 per BTC
f = fees per hour will keep the coinbase above 6 BTC/hour (1 BTC/block) in all eras
c = $0.10 per kWh
g = 0.1 miner gross profit margin

Code:
    Original target      Subsidy    Est Fees   Power
Era   starting year    BTC/block    BTC/hour      GW
--- ---------------  -----------  ----------  ------
  0            2009  50.00000000  0.00000000  270.00
  1            2013  25.00000000  0.00000000  135.00
  2            2017  12.50000000  0.00000000   67.50
  3            2021   6.25000000  0.00000000   33.75
  4            2025   3.12500000  0.00000000   16.88
  5            2029   1.56250000  0.00000000    8.44
  6            2033   0.78125000  1.31250000    5.40
  7            2037   0.39062500  3.65625000    5.40
  8            2041   0.19531250  4.82812500    5.40
  9            2045   0.09765625  5.41406250    5.40

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July 09, 2014, 01:58:36 PM
 #95

Here is my entire spreadsheet, I was too lazy to format it last night:

Code:
    Original target      Subsidy    Est Fees   Power
Era   starting year    BTC/block    BTC/hour      GW
--- ---------------  -----------  ----------  ------
  0            2009  50.00000000  0.00000000  270.00
  1            2013  25.00000000  0.00000000  135.00
  2            2017  12.50000000  0.00000000   67.50
  3            2021   6.25000000  0.00000000   33.75
  4            2025   3.12500000  0.00000000   16.88
  5            2029   1.56250000  0.00000000    8.44
  6            2033   0.78125000  1.31250000    5.40
  7            2037   0.39062500  3.65625000    5.40
  8            2041   0.19531250  4.82812500    5.40
  9            2045   0.09765625  5.41406250    5.40

Our family was terrorized by Homeland Security.  Read all about it here:  http://www.jmwagner.com/ and http://www.burtw.com/  Any donations to help us recover from the $300,000 in legal fees and forced donations to the Federal Asset Forfeiture slush fund are greatly appreciated!
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July 10, 2014, 03:00:38 AM
 #96

We may "bet" that the environment will be significantly more energy efficient than today. It is still a bet.
The quantity of electricity used by the blockchain is not a bet ; it is directly proportional to the price of one bitcoin.

Not really.  It's more proportional to the number of miners because the electrical use is pretty much all from mining.  Of course, greed being what it is, the higher the price of bitcoin goes, the more people are likely to mine, so in a correlational sense, you're probably right, but it's definitely not cause and effect.

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July 11, 2014, 02:32:12 AM
 #97

We may "bet" that the environment will be significantly more energy efficient than today. It is still a bet.
The quantity of electricity used by the blockchain is not a bet ; it is directly proportional to the price of one bitcoin.

Not really.  It's more proportional to the number of miners because the electrical use is pretty much all from mining.  Of course, greed being what it is, the higher the price of bitcoin goes, the more people are likely to mine, so in a correlational sense, you're probably right, but it's definitely not cause and effect.

Read more.

I personally think you have some flaws in your analysis.  One of them is the fairly mythical concept of the rational person.  One example of this is sunk costs, you're right that a rational minor should ignore the cost of the mining rig.  I do my best (and probably a fairly good job) of applying the concept of sunk costs to my own life.  But a lot of people don't, even people who should know better.  So I suspect that a lot of miners continue to mine even if it's unprofitable with their miner from an electricity standpoint simply because they've seen the huge runup in price and hope that this trend will continue over time.

Granted, you did point out these caveats in your own reply to your post.  I just feel that they should be more prominently in the actual analysis because I strongly suspect that a lot of miners are speculating on an increase in price so they continue to mine, whether or not it's profitable.  I can understand the idea, I'm speculating too, but I did it just by buying bitcoins rather than spending money on mining gear.  Mostly because as much as I've been tempted from time to time, I really think at this point, mining is a bit of a zero sum game by now.

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July 11, 2014, 02:45:49 AM
 #98

Quote
I did it just by buying bitcoins rather than spending money on mining gear.  Mostly because as much as I've been tempted from time to time, I really think at this point, mining is a bit of a zero sum game by now.
I think comparative advantage is applicable to that one.   It might be expensive and pointless to some but some parts of the world have much lower electricity costs.  This can be seen in aluminium processing which favours local low electric costs but many parts of the world this business is not profitable afaik.

Bitcoin has the advantage of being highly transportable work so more then anything this rules applies.    It would make sense for those stuck with old bad equipment to maybe sell it in bulk to the low cost parts of the world.

Anyhow I think moores law will reduce electric cost over time until the network consumes no more then a LED readout on any device.  On average of course and I get that difficulty must keep rising and so people assume higher electric cost but I dont think its about electric it'll be about technology cost and in the end R&D and maybe silcon production will be the networks processing cost more then other factors

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July 11, 2014, 03:33:22 AM
 #99

Quote
I did it just by buying bitcoins rather than spending money on mining gear.  Mostly because as much as I've been tempted from time to time, I really think at this point, mining is a bit of a zero sum game by now.
I think comparative advantage is applicable to that one.   It might be expensive and pointless to some but some parts of the world have much lower electricity costs.  This can be seen in aluminium processing which favours local low electric costs but many parts of the world this business is not profitable afaik.

Bitcoin has the advantage of being highly transportable work so more then anything this rules applies.    It would make sense for those stuck with old bad equipment to maybe sell it in bulk to the low cost parts of the world.

Anyhow I think moores law will reduce electric cost over time until the network consumes no more then a LED readout on any device.  On average of course and I get that difficulty must keep rising and so people assume higher electric cost but I dont think its about electric it'll be about technology cost and in the end R&D and maybe silcon production will be the networks processing cost more then other factors

You're quite right that electricity is cheaper in some places in than others.  I only hope for the environment's sake that the bitcoin miners are gravitating towards places like Iceland which has plentiful renewable power rather than places that are cheap simply because the electricity is subsidized.  I don't buy your comment about Moore's law though, bitcoin mining is an arms race for getting the best gear the fastest.  While that gear may become more efficient eventually, I'd be incredibly surprised if it ever uses that little power. 

In any case, Moore's law typically applies to processor speed, not power usage.  Also, the other reason I don't buy it is that Moore's law is treated by some like it's an immutable thing that's set in stone.  It's not, scientists very close to reaching the physical limits of how much they can cram into one chip.  So I'd be surprised if Moore's law continues into the future very long like it has in the past thirty years.

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July 11, 2014, 04:18:50 AM
 #100

I really don't see credit card processors using crypto currencies ever. Bitcoin was designed to make it cheaper then using something like a credit card. If someone were to use a credit card to transact with bitcoin then they would lose the advantages of using bitcoin in the first place.

They might, if we ever get to the point (many years into the future) where fiat becomes obsolete.  The advantage of credit cards is, at least in part, for people living paycheck to paycheck, they can spend money that they don't have yet and pay the bill later when they've been paid.  But I agree with your overall point, it does seem rather counter-intuitive that someone would use both a credit card and bitcoins at the same time.  Debit cards would make more sense, though.
Debit cards would make even less sense then credit cards as they have the same costs as credit cards but would not have your counter point as above.

I doubt that any crypto would ever be so widely used that fiat would become obsolete as it is near impossible to garnish bitcoin from someone. Today for example if you were to spend $5,000 with your credit card, then simply don't pay your credit card bill despite having the ability to do so and have say $10,000 in your bank account then the credit card company can get a judgment against you and the court can order your bank to give the credit card company the $5,000 that you owe out of your account via a garnishment. This would simply not be possible with bitcoin.

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July 11, 2014, 04:31:08 AM
 #101

All the posts about efficiency and Moore's law and power consumption per device are totally off base.   Also your comment about people who mine when it is not profitable is really off base because that behavior makes things even worse as far as the total power consumed by the network goes.

The amount of power consumed is proportional to the amount of available income in the mining process.  More efficient mining hardware just leads to more miners and a higher difficulty, it does not affect the total power consumption.

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July 12, 2014, 08:47:43 AM
 #102

I was looking for an analysis that's something like this. You helped me save hours of searching through the internet.
Back to the topic, if more and more energy efficient miners come out, then the energy consumption of the whole network would decrease. But if widespread adoption of bitcoin ever happens, then the energy consumption would again plummet up and may become an issue because it may cause the global consumption of energy to rise up too. Great analysis though, thanks for helping me understand the maths here. Cheesy

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July 12, 2014, 11:26:13 AM
 #103



Anyhow I think moores law will reduce electric cost over time until the network consumes no more then a LED readout on any device.


You are missing something fundamental about the mining here.  If bitcoin is worth X in 2020 that means miners will spend 12.5X on electricity every 10 minutes in 2020.  It will be worth it for miners to spend that much on power; that's what we mean by "worth X".  No technological improvements can change that, it is the fundamental algo of bitcoin that miners get new coins.  If coins are worth more they will spend more on power.       

 
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July 12, 2014, 12:16:02 PM
Last edit: July 12, 2014, 12:29:46 PM by BurtW
 #104

I was looking for an analysis that's something like this. You helped me save hours of searching through the internet.
Back to the topic, if more and more energy efficient miners come out, then the energy consumption of the whole network would decrease. But if widespread adoption of bitcoin ever happens, then the energy consumption would again plummet up and may become an issue because it may cause the global consumption of energy to rise up too. Great analysis though, thanks for helping me understand the maths here. Cheesy
You are welcome!

What you said here is not true:

Quote
if more and more energy efficient miners come out, then the energy consumption of the whole network would decrease.

What is true is:

If more and more energy efficient miners come out, then the energy consumption of the whole network would stay the same.  This is because people just buy more and more of these more energy efficient miners.  They will keep buying more equipment and adding to the hashrate and difficulty until they bring the power consumption back up to the maximum level allowed by profit.

So as I have said before many times efficiency does not enter into this equation:

P = (6(50/2e) + f)(x)(1 - g)/c [kW]

only the following parameters:

x = exchange rate [USD/BTC]
e = era [0..32] (we are currently in era 1)
f = average fees per hour [BTC/hour]
c = cost of energy [USD/kWh]
g = average gross profit margin [unitless ratio]
 
Notice that price (the exchange rate x) does enter into the equation so what you said here:

Quote
if widespread adoption of bitcoin ever happens, then the energy consumption would again plummet up and may become an issue because it may cause the global consumption of energy to [would] rise

This is because widespread adoption would drive the price higher and price does enter into the global energy consumption equation.

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July 13, 2014, 08:30:31 AM
 #105

Interesting discussion...

RE: Solar and Wind - For every megawatt of solar or wind power added to an ISO there must be a megawatt of NG, coal or nuclear power deployed in order to maintain stability of the grid. ISOs such as ERCOT must have the ability to maintain stable supply / frequency which means if a wind farm is feeding the grid then ERCOT must have adequate firm fixed generation capacity such as NG fired spinning reserves to ramp up as the wind stops blowing.

The only way to avoid the need to provide an equal amount of traditional generation to pair with your wind or solar is if you have the energy storage capacity to create an adequate reserve. Batteries are still cost prohibitive as are most other methods. The other option would be to curtail operations as the wind and sun stop blowing or shining.

RE: Huge Opportunity That Bitcoin Is Perfectly Suited For - When you start to look beyond the traditional constraints of the existing grid and fuel transportation networks you will find that Bitcoin is perhaps one of the best suited technologies to leverage abundant energy resources that are hiding in plain site. Rather than spoil it by elaborating too soon I am curious to know if any of you smart people know what I am referring to. Anyone?


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July 13, 2014, 01:04:22 PM
 #106

Interesting discussion...

RE: Solar and Wind - For every megawatt of solar or wind power added to an ISO there must be a megawatt of NG, coal or nuclear power deployed in order to maintain stability of the grid. ISOs such as ERCOT must have the ability to maintain stable supply / frequency which means if a wind farm is feeding the grid then ERCOT must have adequate firm fixed generation capacity such as NG fired spinning reserves to ramp up as the wind stops blowing.

The only way to avoid the need to provide an equal amount of traditional generation to pair with your wind or solar is if you have the energy storage capacity to create an adequate reserve. Batteries are still cost prohibitive as are most other methods. The other option would be to curtail operations as the wind and sun stop blowing or shining.

RE: Huge Opportunity That Bitcoin Is Perfectly Suited For - When you start to look beyond the traditional constraints of the existing grid and fuel transportation networks you will find that Bitcoin is perhaps one of the best suited technologies to leverage abundant energy resources that are hiding in plain site. Rather than spoil it by elaborating too soon I am curious to know if any of you smart people know what I am referring to. Anyone?


The world could be completely solar, just make an array that circles the globe and it will have sun 24/7 no need for other power generation tech.


There is no way to transmit the power needed from the sunny side to the dark side.  Sorry.

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July 13, 2014, 01:06:49 PM
 #107

Interesting discussion...

RE: Solar and Wind - For every megawatt of solar or wind power added to an ISO there must be a megawatt of NG, coal or nuclear power deployed in order to maintain stability of the grid. ISOs such as ERCOT must have the ability to maintain stable supply / frequency which means if a wind farm is feeding the grid then ERCOT must have adequate firm fixed generation capacity such as NG fired spinning reserves to ramp up as the wind stops blowing.

The only way to avoid the need to provide an equal amount of traditional generation to pair with your wind or solar is if you have the energy storage capacity to create an adequate reserve. Batteries are still cost prohibitive as are most other methods. The other option would be to curtail operations as the wind and sun stop blowing or shining.

RE: Huge Opportunity That Bitcoin Is Perfectly Suited For - When you start to look beyond the traditional constraints of the existing grid and fuel transportation networks you will find that Bitcoin is perhaps one of the best suited technologies to leverage abundant energy resources that are hiding in plain site. Rather than spoil it by elaborating too soon I am curious to know if any of you smart people know what I am referring to. Anyone?


RE: Solar and Wind very interesting point that the solar/wind people fail to realize or fail to mention when they push build out of these technologies.

RE: Huge Opportunity That Bitcoin Is Perfectly Suited For sorry, not smart enough to guess.

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July 13, 2014, 05:44:43 PM
 #108

RE: Huge Opportunity That Bitcoin Is Perfectly Suited For - When you start to look beyond the traditional constraints of the existing grid and fuel transportation networks you will find that Bitcoin is perhaps one of the best suited technologies to leverage abundant energy resources that are hiding in plain site. Rather than spoil it by elaborating too soon I am curious to know if any of you smart people know what I am referring to. Anyone?
This may or may not be what you are looking for, but one option would be to take advantage of variable electric prices that are present in some places of the country. For example, the price of electricity is cheaper at night when people are sleeping as this is generally an off peak period for electric usage. You could only run your miners during this time if it would be unprofitable to run it during the day.

Another potential option would likely not be something that an individual could do, but rather a public policy that an individual could attempt to change - to try to get more nuclear energy to be provided to the electric grid.
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July 13, 2014, 09:35:58 PM
 #109

RE: Huge Opportunity That Bitcoin Is Perfectly Suited For - When you start to look beyond the traditional constraints of the existing grid and fuel transportation networks you will find that Bitcoin is perhaps one of the best suited technologies to leverage abundant energy resources that are hiding in plain site. Rather than spoil it by elaborating too soon I am curious to know if any of you smart people know what I am referring to. Anyone?

An easier option than these super advanced solar beaming technology would be to have people in the Dakotas build wind turbines and host miners on behalf of other people.  The Dakotas have been described as the Saudi Arabia of wind and have the potential to generate enough power to power the entire United States.  The catch is, of course, that being ridiculously cold much of the year, almost no one lives there and much of the power generated would likely be lost to power line inefficiencies.  But the turbine powered miner technique wouldn't have this problem as the product being sent elsewhere would be bitcoins, not power, which wouldn't require the creation of a whole new system of power lines.

It's definitely a potential market for anyone who lives in this area.  They could even use the miner as a space heater during the winter months. 

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July 14, 2014, 01:36:54 AM
 #110

Energy storage would still be important even in an ideal system as there will always be variable loads but generators gets the highest efficiencies at a consistent load. That's why I mentioned the hilltop land, if there's a competitive market for electricity then even without the erratic output of renewables there's still a market for energy arbitrage, buying at low load times and selling back at peak load times.

As to fossil fuel becoming unaffordable, it could happen very soon if some of the regulatory changes I'm seeing are anything to go by, a lot of european states are opening the doors to anyone and everyone that can come up with renewable systems. Energy company lobbying put a huge tax on Chinese made solar panels in europe but that's about the only place they've forced out competition lately.
By the time the generation born today reaches adulthood, China will have used up most of it's coal reserves making electricity, and many other countries will have run out altogether. The world will be a different place energy wise.

There is little evidence that nuclear is going to save the day, that leaves solar, wind, an a bit of hydro depending on the country, fresh water which kind of competes with hydro electricity is a growing problem.
Why would nuclear energy not be able to replace other, dirtier forms of electricity? Nuclear energy is near unlimited, very cheap, reliable and clean.

Your other "green" energy sources are unlimited, however are expensive, and unreliable.

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July 14, 2014, 03:19:17 AM
 #111


Hydrogen can also be very cheaply transported if we ever get over the hangups from the Hindenburg.



Hindenburg fireball isn't caused hydrogen.  Its the coating or paint on the outer skin that burned
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July 14, 2014, 04:54:55 AM
 #112


Why would nuclear energy not be able to replace other, dirtier forms of electricity? Nuclear energy is near unlimited, very cheap, reliable and clean.

I didn't say nuclear couldn't replace other forms of energy I said "There is little evidence that nuclear is going to save the day" with the exception of China, the nuclear industry seems to be contracting.



China is putting more GE Gen5 reactors online and India is starting phase 3 of it's thorium based long term plan. I think the rest of the world has pretty much given nuclear a kick in the pants.  The US hasn't even approved construction of a single new reactor since the 70s.
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July 14, 2014, 06:27:59 AM
 #113

All off topic.  This thread is about energy consumption of the Bitcoin Network.  You should go start your own thread discussing how you think energy should or should not be produced.

Thanks.

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July 14, 2014, 06:53:17 AM
 #114

All off topic.  This thread is about energy consumption of the Bitcoin Network.  You should go start your own thread discussing how you think energy should or should not be produced.

Thanks.
No worries, we can just let this thread die then.

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July 14, 2014, 06:56:40 AM
 #115

All off topic.  This thread is about energy consumption of the Bitcoin Network.  You should go start your own thread discussing how you think energy should or should not be produced.

Thanks.
No worries, we can just let this thread die then.


Sounds good.  We will start another thread about estimating the energy consumption of the Bitcoin network and you can start another thread to discuss energy production.

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July 14, 2014, 04:37:35 PM
 #116

There's some off topic there but I wouldn't consider the energy production methods to be off topic, we've been discussing alternative use cases for remote areas with easily accessible renewable energy and so far Bitcoin mining is the ideal transportation method.
You can have this thread.

A new thread specifically discussing estimating the power consumption of the Bitcoin network is here:

https://bitcointalk.org/index.php?topic=694401.0

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July 19, 2014, 11:56:45 PM
Last edit: July 20, 2014, 12:24:29 AM by antirack
 #117

Here is an article from end of last year on the this topic:

The Power Consumption of the Bitcoin Network:
Are we destroying the planet?
https://docs.google.com/document/d/1Lb_iLMmH5sIiYfGeHr9tCTnaoWjK25zDlvO0nXXgEng/edit

6 Months old and already totally outdated though ;-)

Original thread is here (the author is Xyver):
https://bitcointalk.org/index.php?topic=381518.0
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July 20, 2014, 01:44:04 AM
 #118

Bitcoin is completely totally useless if you intend to use it to transport electricity. You can burn as much electricity as you want where it is cheap, it will not give you a single milliwatt where it is needed.



That seems correct but work has been done.     Cotton notes are not able to save or give energy either but they can convey work.   That work can be used in exchange for energy elsewhere and btc will do this also.


The second argument is btc work useful or not, its describing secure and unique hash codes.  The world has found some use for btc in security and so energy spent is useful and can be used in one place and then elsewhere the btc can be reused to pay for energy just like notes are.  
Im not saying btc has to be valued by all and Im not sure any energy company takes btc as direct payment, probably not but in effect btc is conveying energy or if you prefer, work

Places like lakes in the Himalayas have massive amounts of free power available for relatively low investment costs but its too hard to transmit the power to anywhere useful. In those cases bitcoin mining is one of the best ways to make use of that power but the hashrate would need to stabilise first, the risk is too high for that kind of investment while its rising exponentially.

It does seem viable that places with excess energy will be connected to the internet more easily then they can transport large amounts of electricity ?   If that is the case, btc is being useful to convey work/energy usage ?

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|ROULETTE
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July 26, 2014, 06:15:58 AM
 #119

I think one way to slow the growth is reduce the block reward from 25 coins to just 1 coin per block, there is no way the BTC price will jump 25 fold to compensate as more then half the coins are already mined so there is no shortage of supply, and no reason for that much fiat to enter the market.
The block subsidy will be reduced to under 1BTC.  Great minds, yours and Satoshis, do think alike. 

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September 10, 2014, 07:08:52 AM
 #120

I was just wondering how much power the bitcoin network was consuming and ran some numbers myself:

Let's assume everyone mining bitcoin was running Antminer S3s or at least a equally efficient rig(which we all know isn't the case) and just to make things a little easier well say the S3 runs at 500Ghs and consumes 350W

Right now were up to 214PHs on bitcoin so thats 428000 of these S3s consuming 350W each so 149,800,000 Watts

Now I found this:  http://www.eia.gov/tools/faqs/faq.cfm?id=104&t=3

"The Palo Verde plant in Arizona has three reactors with the largest combined generating capacity1 of about 3,937 megawatts (MW)."

Which I assume comes out to 3,937,000 Watts

So you would need 38 of these high output Nuclear Power Plants to power the Bitcoin network.  That is fucking mind boggling! 

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September 10, 2014, 12:13:49 PM
 #121

So you would need 0.038 of these high output Nuclear Power Plants to power the Bitcoin network.  That is fucking mind boggling!  
One more fix needed I think Wink

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December 03, 2014, 05:27:09 PM
 #122

Soooo ...

For the first time since the beginning of the ASIC era the difficulty has dropped today.
It is not a large drop, the network has lost "only" something like 2,000,000 GH/s since the last adjustment. It may not look impressive today but you have to remember that it was the whole network hashrate as of october 2013, a bit more that one year ago, just before the beginning of the last "bubble".

It also means that more miners have left than miners have join the network. The only reason a miner leaves the network is that he thinks the coins he gets are worth less than the money he spends to get them.


But that just happened last two weeks. It will keep on rising in the (near) future.
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December 03, 2014, 05:49:50 PM
 #123

We can look at the (necessity of building more) nuclear plants as positive externality of Bitcoin. Smiley
Might even stimulate Fusion research.
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December 03, 2014, 06:27:50 PM
 #124

If only we could conduct the heat generated by big ass miners into tubes that would deliver free calefaction for people, bitcoin would be something even greater.
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December 13, 2014, 05:41:21 AM
 #125

Here's my take.

The Math: (extract from an internal report)

• First difficult y drop seen in 2 years occurred 2 Dec 2014
• Over the next 85 weeks (21 months) a total of 2.1 million Bitcoins will be mined
• USD $735 million at $350/BTC, $1 billion at $500/BTC, >$2 billion at $1000/BTC
• 280 MW estimated Bitcoin network size today (compared to Google's estimated 260 MW, Facebook 78 MW)
• Block reward halving ETA July 2016 (85 weeks, 5 days as of today)
• Bitcoin output from 25 BTC to 12.5 BTC per block (next halving estimated 2020)


Historical Bitcoin Network Data:

Nov/Dec 2014 (today):

Hashrate:                     290 PH/s    (+35%)
Total Megawatt:                 280 MW   (home mining almost gone)
Megawatt Industrial/Data Center:    270 MW   (+35% 0.85W/GH new capacity)

August 2014:

Hashrate:                     214 PH/s    (+375% or 94%/month)
Total Megawatt:                 214 MW
Megawatt Industrial/Data Center:    200 MW    (>1000-2000%)

April 2014:
Hashrate:                     57 PH/s
Total Megawatt:           250-500 MW    (mostly at home miners)
Megawatt Industrial/Data Center:    10-20 MW


If only we could conduct the heat generated by big ass miners into tubes that would deliver free calefaction for people, bitcoin would be something even greater.

Bitcoiners are in fact the first ones to heat complete greenhouses.
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December 13, 2014, 07:06:46 AM
 #126

AsicMiner testing an 0.25 W/GH board.

https://bitcointalk.org/index.php?topic=888260.msg9794133#msg9794133


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December 15, 2014, 12:51:32 PM
 #127


If it is implemented in miner, that would be interesting.
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December 15, 2014, 01:40:51 PM
 #128

We can look at the (necessity of building more) nuclear plants as positive externality of Bitcoin. Smiley
Might even stimulate Fusion research.

This is a good alternative energy that can be used to support the massive electricity consumption

Here's my take.

The Math: (extract from an internal report)

• First difficult y drop seen in 2 years occurred 2 Dec 2014
• Over the next 85 weeks (21 months) a total of 2.1 million Bitcoins will be mined
• USD $735 million at $350/BTC, $1 billion at $500/BTC, >$2 billion at $1000/BTC
• 280 MW estimated Bitcoin network size today (compared to Google's estimated 260 MW, Facebook 78 MW)
• Block reward halving ETA July 2016 (85 weeks, 5 days as of today)
• Bitcoin output from 25 BTC to 12.5 BTC per block (next halving estimated 2020)


Historical Bitcoin Network Data:

Nov/Dec 2014 (today):

Hashrate:                     290 PH/s    (+35%)
Total Megawatt:                 280 MW   (home mining almost gone)
Megawatt Industrial/Data Center:    270 MW   (+35% 0.85W/GH new capacity)

August 2014:

Hashrate:                     214 PH/s    (+375% or 94%/month)
Total Megawatt:                 214 MW
Megawatt Industrial/Data Center:    200 MW    (>1000-2000%)

April 2014:
Hashrate:                     57 PH/s
Total Megawatt:           250-500 MW    (mostly at home miners)
Megawatt Industrial/Data Center:    10-20 MW


What a great information here, gonna note this !
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December 24, 2014, 02:34:37 PM
 #129

Interesting. Note taken.  Wink

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December 24, 2014, 03:46:02 PM
 #130


If it is implemented in miner, that would be interesting.

they would rise the price of it, until it won't roi for sure, just like they did with their previous stuff

but it's cool to see something x3-4 more efficient
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December 25, 2014, 10:59:57 AM
 #131

This appears to still be in the very early testing phase and will probably not be available for some time. Also more efficient miners will only result in overall higher hashrate on the network which means a higher difficulty, not a lower amount of electricity used

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January 15, 2015, 03:37:21 PM
 #132

Many megawatts I have personal knowledge of (air cooled) have been switched off recently. If this will be "compensated" by newer hardware coming online (hardware that was already in the pipeline) remains to be seen short term.
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January 15, 2015, 03:57:39 PM
 #133

If my theory is correct, and the price stays where it is now ($200) the difficulty should drop A LOT at the next adjustment.
We will see.

Probably not (although difficulty may decline some).   What is more likely is a rotation.  Older obsolete hardware getting scrapped and higher electrical cost miners being replaced by lower electrical cost miners.   The boom prices lead to some pretty weak miners.  There were miners setting up shop in UK with $0.25+ per kWh.  The OP talks about an average price of $0.15 but I think the upper end is going to be closer to $0.10 and the average somewhere around $0.05 per kWh.
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January 15, 2015, 04:41:40 PM
 #134

why they can't redicrect the energy dissipated, to something more useful, right cure the cancer or something
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January 15, 2015, 05:13:20 PM
 #135

why they can't redicrect the energy dissipated, to something more useful, right cure the cancer or something

Why can't a bank guard also cure cancer at the same time?   Not to be snarky but POW has certain important properties:
1) it needs to be cryptographically related to the current and prior blocks (which is why we hash the blockheader)
2) it needs to be a probabilistic process (any hash can solve a block but on average it will take a huge number to do so)
3) the difficulty of the solution needs to be adjustable
4) the solution on average needs to take a large amount of work to solve but take a very small amount of work to verify
5) a potential solution should be reached by any person with only access to the blockchain and memory pool (no central authority)

This is a very difficult set of requirements which is why POW is the "magic" that made Bitcoin possible.   ecurrency is various forms existed prior to Bitcoin but they required a central authority as the idea of there was no solution on how to achieve a distributed consensus among untrusted peers.

Still the heat can be used for additional work.   I think as ASICs become more commodity based (i.e. when I can buy a reel of them for immediate shipping at digikey) and energy costs dominate we will see integration of ASICs into systems that heat a house or hot water tank with the waste heat.
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January 23, 2015, 02:44:11 PM
Last edit: January 23, 2015, 02:55:11 PM by Nicolas Dorier
 #136

I repost what stdset replied on https://bitcointalk.org/index.php?topic=920007.60

Quote
Frankly speaking, this topic doesn't belong to this board.
However, we can estimate Bitcoin mining power consumption in 12 years, provided that Bitcoin replaced all M1 money supply in the world, what is very unrealistic, but we want to make a conservative estimate. As of 2009 M1 was about 20*1012USD http://dont-tread-on.me/wp-content/uploads/2011/02/SmallGlobalMoneySupply.png
In 12 years block reward will be 8 times less than now, let's assume that fees still constitute a minor part of block reward, i.e. block reward is 3.125 BTC, that means 18.75 BTC created per hour. Value of 1 BTC equals roughly 1 million USD of 2009 purchasing power (in 2027 USD doesn't exist already, since BTC completely replaced it). Let's now assume, that miners spend half of their revenue to pay for electricity (that's rather unrealistic, but we want to make a conservative estimation), so we have 9.4*106 USD per hour to pay for electricity. If we take a reasonable price of 0.07 USD/kWt*h, that results in 1.3*1011 Watts of total power consumption by all miners in the world. In 2007 the world produced about 20*1015 Wt*h of electric power, or 2.3*1012 Watts on the average. We can see that under such unrealistic conditions bitcoin mining consumes less than 6% of total world electric power.
Hope I didn't make a mistake in calculations.

BTW, we can conclude that even in 12 years Bitcoin is unlikely to replace all money in the world, since 6% of total electric power produced in the world is a bit much, I'd say that bitcoin will need not less than 16 years to achieve that  Smiley

I have checked his model with today's input, and it match with reality. I have not seen any flaw in his reasoning.
My question was : why do you think POW energy consumption to be unsustainable ? It was a very good response I think.
However, we won't reach the problem until bitcoin cost 1 Million $ in 12 years Wink
Even if "6% of total electric power is a bit much" is highly subjective depending on the utility of bitcoin. Also the heat can be reused.

The input he took are conservatives, making them more realistic cost more energy.

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January 26, 2015, 08:25:07 PM
 #137

I seriously doubt that "reusing heat from miners" has any sound foundation, I think that cooling miners is just an extra cost. Heat extraction and concentration may well be uneconomical in most cases, Also converting ac to dc adds to inefficiency.
It could well be that having solar powered miners in sahara even with the added cooling costs may be preferable than expending electricity in say norway and tapping into byproducted heat
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January 26, 2015, 10:23:08 PM
 #138

I seriously doubt that "reusing heat from miners" has any sound foundation, I think that cooling miners is just an extra cost. Heat extraction and concentration may well be uneconomical in most cases, Also converting ac to dc adds to inefficiency.
It could well be that having solar powered miners in sahara even with the added cooling costs may be preferable than expending electricity in say norway and tapping into byproducted heat

Heat recovery is used in some power plants to get efficiencies over 90%, usually providing heating for towns, not many of them and circumstances have to be ideal for those kind of figures though. Maybe something like that could work though, many large offices are using heat storage and biomass burners for heating to offset carbon charges and mining could integrate well with that both in heating and biomass drying (drying wood chip, etc. has high costs).

Makes more sense to locate where there's an abundance of renewable power though, solar, hydro, geothermal, all better than loading up the grid.
Well, if we agree on the fact that if bitcoin rises to 1million USD in 12 years, it will consume 6% of power (according to the model I posted from stdset), the question becomes : will this provoke an incitation to move to POS cryptos ?
I am not sure about that, because if it rises to 1million, the cost of migrating to something else are astronomical and might outweigh the cost of energy.
However, if the price of Bitcoin would make some business model impossible, I would expect migration to happen.

We can slow down the process with energy reuse, but it does not solve the question, only post bone it.

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January 27, 2015, 07:54:15 AM
 #139

Last century:  Cost of production of money: 0 watts.   Massive waste of all resources results.

This century:  Cost of production of money: determined by public currency mining market.  Efficient use of resources results. 


 
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January 27, 2015, 11:00:12 AM
 #140

This thread is about the energy consumption of the Bitcoin network, not about new ways to produce electricity which may or may not be more renewable and/or less expensive than the standard ones. So please don't start this discussion again, unless you have a new answer to this simple question : https://bitcointalk.org/index.php?topic=520977.msg7578061#msg7578061

What question? My post above already answers the vague "See?" in the bottom of that post and you may notice I didn't mention wind in that and stuck to relatively stable methods that allow consistent operation.

One for you in turn, why is it you attack any mention of renewable energy usage? Its starting to sound like you have some sort of agenda with this, that was a reply to a direct question on a relatively dead thread that's on-topic with the threads title. Minings energy consumption is considered a problem and every problem can be seen as an opportunity.

Yep. Considering the OP still contains this major factual error.

.. that the network consumes something like 600MW. That is one third of the electric capacity of the plant of Fessenheim that made the news today (in France)

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January 27, 2015, 03:02:47 PM
 #141


The question was "If you have 1000 (BTC, k€, whatever) and a possibility to get ASICs delivered to you, what will be your optimal allocation of capital ?"

And the only sensible answer is "100% on ASICs".

Mining Bitcoin is a job. You can be good at it and earn money.
Producing electricity is a job. You can be good at it and earn money.

Mining Bitcoin AND producing electricity at the same time is TWO jobs. You can't be good at both. You will lose money


Not so
It is not 2jobs it is vertical integration
And quite safe as investment as you diversify and get flexible as to what to produce bitcoins or electricity depending on where you get more value.
Iwould first deploy solar panels and on a second phase the miners and iterate reinvestment on around robin fashion.

A note on heat extraction : powerplants can reuse heat because they produce highly concentrated heat, miners produce heat of low value.
A note on green energy, best use energy sources that provide dc so as to skip conversion and related loses, solars are the best type imho to drive circuitry
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January 28, 2015, 12:05:45 AM
 #142

Last century:  Cost of production of money: 0 watts.   Massive waste of all resources results.

This century:  Cost of production of money: determined by public currency mining market.  Efficient use of resources results. 


Thiss so hard. The amount of effort put into generating Bitcoin is justified, we are talking being backed by math there boys. The result will be an harmonic one, and not a catastrophe (fiat).
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January 28, 2015, 09:37:52 AM
 #143

Last century:  Cost of production of money: 0 watts.   Massive waste of all resources results.

This century:  Cost of production of money: determined by public currency mining market.  Efficient use of resources results.  


Cost of production of money is 0, but the money transmission is huge due to the cost involved in running the banks and data centres.
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January 29, 2015, 05:32:12 PM
 #144

Last century:  Cost of production of money: 0 watts.   Massive waste of all resources results.

This century:  Cost of production of money: determined by public currency mining market.  Efficient use of resources results.  


Cost of production of money is 0, but the money transmission is huge due to the cost involved in running the banks and data centres.


If something costs 0, you have right there a big reason to think it's a scam.
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January 30, 2015, 04:35:25 PM
 #145


Well, if we agree on the fact that if bitcoin rises to 1million USD in 12 years, it will consume 6% of power (according to the model I posted from stdset), the question becomes : will this provoke an incitation to move to POS cryptos ?
I am not sure about that, because if it rises to 1million, the cost of migrating to something else are astronomical and might outweigh the cost of energy.
However, if the price of Bitcoin would make some business model impossible, I would expect migration to happen.

We can slow down the process with energy reuse, but it does not solve the question, only post bone it.

The cost of mining is equal to the fees incurred. When the value rises, the percentage of fee will drop. I agree the total cost of mining will rises but not linear to the value of BTC. The above comments does not apply to the initial mining period when new coins are issued.
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February 03, 2015, 05:06:05 PM
 #146

The above comments does not apply to the initial mining period when new coins are issued.

Well since the subsidy will not go to zero for another 120-130 years most discussions about costs, energy, and sustainability deal with the period from now until ~2140.   Even after the next couple halvings the subsidy will play a major impact in the cost of the network.
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