.

[brenzi]

[...]
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 , 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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[brenzi]

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.

[BurtW]

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

[ernie-]

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.

[DannyElfman]

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

[BurtW]

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.

[BurtW]

]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.

[ernie-]

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.

[BurtW]

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.

[ernie-]

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

[DannyElfman]

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

[BurtW]

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.

[brenzi]

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

[Skele]

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...

[ernie-]

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.

[brenzi]

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.

[InwardContour]

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.

[BurtW]

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(50/2^e) [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(50/2^e) + 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.

[InwardContour]

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.

[ernie-]

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.