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Author Topic: Bitcoin's environmental friendliness  (Read 676 times)
genjix
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January 15, 2012, 02:39:44 AM
 #1

+ Current monetary system is ridiculously inefficient.
+ Federated overlay networks are very efficient (bitcoin being used as a settlements system)
+ People find more efficient ways to mine using less electricity
- Difficulty goes up

Trying to calculate how many bitcoins is a KwH is kinda like trying to find angels on a pinhead.

It's in response to this article where someone said:
Quote from: Will Sterling
I have a mining rig that uses about the same ammount of energy per month as used at home by the average American family of 4. This has produced a value of about $1,000 in bitcoins over the past 6 months. I don’t think that the energy efficiency argument holds. Even if processors became more efficient, that would make mining more profitable, so the number of miners would increase, the difficulty would increase, and the net effect would be no energy savings.

He makes a good point.

Quote from: Brian
The energy cost of mining shouldn’t be ignored either. You’re right that energy efficiency is the limiting factor, since nobody is going to mine-long term if it’s NOT cost effective…and people WILL mine if it is. Which means that the energy used to solve a block will trend towards the value of solving that block. If Bitcoin was underlying the world economy, the value of solving a block would be very large and thus worth spending very large amounts of money to do.

We can use an approximate model for the future by replacing the block subsidy by a constant sum of fees. This isn't completely realistic but it works for our model.

S = subsidy (or sum of fees)
C = electricity cost

C - S -> 0 - delta

I put a negative delta there, because people make bad bets all the time.

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January 15, 2012, 05:58:02 AM
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you haven't even begun to look at this from the right standpoint.

look at the horrors associated with gold mining.  and this is for supposedly "real" money:

http://www.guardian.co.uk/lifeandstyle/2011/feb/14/fairtrade-gold

this is why i'm so much more in favor of Bitcoin becoming real money or a monetary standard vs. gold.
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January 15, 2012, 06:08:33 AM
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try this one on for size.  watch the video:

http://www.care2.com/causes/6-year-old-children-mining-gold-in-mali-video.html

"the kids get paid in dirt".
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January 15, 2012, 06:18:18 AM
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Trying to calculate how many bitcoins is a KwH is kinda like trying to find angels on a pinhead.

I do not think it is that hard to estimate.  I did this a while back when the difficulty was 1,564,057.

The average number of hashes per block is difficulty * 2^32, for example 1,564,057 * 2^32 = 6,717,573,664,079,872 = 6,717,573,664 Megahashes/Block

Using an estimate of 2.3 Megahashes/Joule (a good GPU) yields 6,717,573,664 / 2.3 = 2,920,684,201 Joules/Block

Finally 2,920,684,201 Joules/Block is 811 KWh/Block

In order to include cooling and other losses double this number and round down to make the math easy, how about 1,564 KWh/Block at a difficulty of 1,564,057

At the current difficulty of 1,250,758 I would estimate 1,250 KWh/Block.

Bitcoin must have unqualified fungibility to survive as a form of money.  We must support all efforts that protect and improve the fungible nature of Bitcoin and stand firmly against anyone or anything which threatens this essential property.
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January 15, 2012, 01:34:03 PM
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Quote from: Brian
The energy cost of mining shouldn’t be ignored either. You’re right that energy efficiency is the limiting factor, since nobody is going to mine-long term if it’s NOT cost effective…and people WILL mine if it is. Which means that the energy used to solve a block will trend towards the value of solving that block. If Bitcoin was underlying the world economy, the value of solving a block would be very large and thus worth spending very large amounts of money to do.

We can use an approximate model for the future by replacing the block subsidy by a constant sum of fees. This isn't completely realistic but it works for our model.

S = subsidy (or sum of fees)
C = electricity cost

C - S -> 0 - delta

I put a negative delta there, because people make bad bets all the time.


yeah, but how do you determine the fee for a single transaction? right now the value of a block is determined by the value of the subsidy and therefore by the value of a single bitcoin. so the enviromental cost of the network is mostly based on speculation and has nothing to do with the value as a monetary system it provides. the value of a block without subsidy depends on the number and size of the fees attached to transactions - the value of a single bitcoin doesnt matter at all. unless you assume that bitcoin mining isnt a free and fair market or there is no efficient way to determine a reasonable value for a given transaction, the cost per single transaction is likely to converge to the minimum possible cost of the transaction.
so if bitcoin doesnt run into longterm scalability problems it might be a good enough approximation of an optimal monetary system.

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January 16, 2012, 09:18:08 PM
 #6

+ bitcoin can't be used to deficit finance endless wars through currency devaluation. (toxic chemicals, depleted uranium, bombs, death, destruction)
+ bitcoin needs never be printed onto anything if there is no desire (currently countries try desperately to maintain some ratio of paper currency.  Hard to do when creating all that credit for wars.)
- people will think mining isn't environmentally friendly, meanwhile bitcoin is the MOST environmentally, sociologically, and economically friendly option on the planet by a country mile.

just my .02 btc
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January 17, 2012, 10:52:58 PM
 #7

The margin cost for mining a bitcoin in the long run is basically the energy cost involved, and vise versa.

Whatever you see is the stable average price of bitcoins, multiply by 50, and you should see the amount of $ roughly spent by the network in energy every 15 minutes. This of course is a lagging indicator, but over the course of a year, it should be a good approximation.

Keep in mind, this is not all waste either. I was considering at the end of this summer, buying some hardware and using servers as sort of space heaters in my house. The energy->heat conversion is the same when produced through a computer or through a space heater, except with the advantage of making bitcoins in the process. I was going to hook up a digital thermometer to control the software to turn off and on the miner to achieve the desired temperature in the house.

It would be great to figure out a way of storing the heat and using it to cook with as well.

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January 17, 2012, 11:02:42 PM
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The margin cost for mining a bitcoin in the long run is basically the energy cost involved, and vise versa.

Whatever you see is the stable average price of bitcoins, multiply by 50, and you should see the amount of $ roughly spent by the network in energy every 15 minutes. This of course is a lagging indicator, but over the course of a year, it should be a good approximation.

Keep in mind, this is not all waste either. I was considering at the end of this summer, buying some hardware and using servers as sort of space heaters in my house. The energy->heat conversion is the same when produced through a computer or through a space heater, except with the advantage of making bitcoins in the process. I was going to hook up a digital thermometer to control the software to turn off and on the miner to achieve the desired temperature in the house.

It would be great to figure out a way of storing the heat and using it to cook with as well.

You mean every 10 minutes Wink

Not as efficient as a heat pump...

Storing heat is an interesting problem addressed in the solar thermal industry.  Large tanks of hot water, large beds of stones, etc.

Bitcoin must have unqualified fungibility to survive as a form of money.  We must support all efforts that protect and improve the fungible nature of Bitcoin and stand firmly against anyone or anything which threatens this essential property.
PrintCoins
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January 17, 2012, 11:08:34 PM
 #9

The margin cost for mining a bitcoin in the long run is basically the energy cost involved, and vise versa.

Whatever you see is the stable average price of bitcoins, multiply by 50, and you should see the amount of $ roughly spent by the network in energy every 15 minutes. This of course is a lagging indicator, but over the course of a year, it should be a good approximation.

Keep in mind, this is not all waste either. I was considering at the end of this summer, buying some hardware and using servers as sort of space heaters in my house. The energy->heat conversion is the same when produced through a computer or through a space heater, except with the advantage of making bitcoins in the process. I was going to hook up a digital thermometer to control the software to turn off and on the miner to achieve the desired temperature in the house.

It would be great to figure out a way of storing the heat and using it to cook with as well.

You mean every 10 minutes Wink

Not as efficient as a heat pump...

Storing heat is an interesting problem addressed in the solar thermal industry.  Large tanks of hot water, large beds of stones, etc.

Actually it usually feels like 20 minutes, but I only notice when I have a transaction I want to go through. It is akin to watching a pot while waiting for it to boil.

Bitmessage.org: BM-2cT3oFVj68gugBD5JFvP3qmoBHWXJQ6ZkT
BTC Addr:18AA1hq6DVHn5WuK1fQhr5CdkqeG5Mj2ZL <--did you like my post? Send some encouragement here.
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