BurtW (OP)
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October 01, 2014, 11:40:17 PM |
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I too like the idea of Thorium reactors. A bit off topic though since the title of this thread is "Estimating the energy/power consumption of the Bitcoin Network"
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mestar
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October 02, 2014, 03:01:35 AM |
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The point is saying "at value x per unit bitcoin mining will try consume y of the electricity produced" is a statement designed to fuel controversy and suggest to the uninformed reader that this is a fact and not the conclusion of a highly abstract system model.
Are you trying to say that Bitcoin mining will not grow until the cost of electricity becomes the limiting factor? Lol.
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mestar
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October 02, 2014, 03:20:25 AM |
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My complaint is that that churn of technology needs to be included in the resource cost, not just electricity. It is going to be much higher than anticipated.
Not in the long term. In fact, when the price of Bitcoin is going down, it becomes a game of who turns off their miner first. The price of hardware becomes irrelevant. And when the price is going up, it is only the matter of time, but hardware will always catch up to the point where electricity becomes the limiting factor. Since the total electricity costs of the network are paid from the rewards, that amount of money must pass trough the exchanges, and this will put a constant pressure on the Bitcoin price in the downward direction. This will cause the price to always slowly slide down, so the "price going down" mode of Bitcoin will be much more probable, than "price going up". We can already see confirmations of this in the price charts. Look at the price after the first bubble.
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raid_n
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October 02, 2014, 09:42:13 AM |
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Then there's the safety side of thorium reactions. Unlike U235, thorium is not fissile.
Thorium 229 is fissile. A nuclear power plant runs on a sustained fission reaction so even a thorium reactor will have to do this. It is misleading to call thorium non-fissile if you have to breed it to be fissile U233 for a thorium reactor to work. Unless we master transmutation I do not believe in nuclear energy as a sensible approach to solving the global energy requirements. Since the total electricity costs of the network are paid from the rewards
No, the rewards pay for the entire mining industry. Miners, research, electricity, network connections, human resources, etc. That was and is my complaint about the initial model of rewards = energy consumed. For that statement to be true you need to have a stable state for technology and all other external factors. To give you an example, you said " when the price of Bitcoin is going down, it becomes a game of who turns off their miner first. " That is true to some extent. It also implies that if there is a miner that still makes a profit because it is more advanced you will switch to that miner (because eventually it will ROI and make profit, or at leas you assume so). Exactly this has happened with the transition from GPU to ASIC. The previous generation hardware eventually becomes obsolete due to changes in technology. Look at old personal computers. I am sure many people have an old machine standing around somewhere. The value of the machine has decayed over time as its usefulness shrank. These resources "used up" if you will. Some of the mining rewards will flow into hardware that eventually will be used up just like your old pc. Hence if you say rewards = energy you leave out that entire aspect of mining. Assuming a stable state for technology is nice for the model because it simplifies it. But it just does not capture reality. Have you been involved in mining? Difficulty increase is an indirect indicator for hardware investments. It can help us gauge how much new equipment is being bought. What is a difficulty increase of 10-20% for each 2016 blocks telling us? Massive investments in new hardware, some of which will make older models obsolete.The interesting part is that even with dropping prices difficulty was/is increasing. I'd say that a lower block reward in the financial sense puts more pressure on miners to switch to more efficient and advanced hardware to stay profitable. This is a vicious cycle as each improved generation puts all other miners under pressure to also switch. When the value of bitcoin is increasing this pressure is not felt as much. My complaint is that that churn of technology needs to be included in the resource cost, not just electricity. It is going to be much higher than anticipated.
Higher ? Ah OK. I thought you were saying that because of the cost of investments, the energy bill would be lower. But in fact we agree. I am trying to say that block rewards = energy consumed is a too simplified model. Block rewards = money spent on the mining industry (all resources combined) is better. We could then model different assumptions on how these resources are distributed. If bitcoin's value doubles the first thing that will happen is older inefficient miners will start coming online so you will see a spike in energy consumption that is bounded by available hardware. A massive buy of new mining hardware will follow increasing the difficulty to the point where again the most inefficient miners will stop being profitable. The energy consumption may actually temproarily go down during that phase. The process itself is forming a complex feedback loop. Now if you want to be a purist we can model the rewards in terms of energy as an abstract unit. But then you would have to compare it to the global world productivity in terms of energy rather than just the electricity generated.
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CoinBateman
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October 02, 2014, 10:45:35 AM |
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An interesting outcome of this, and i suspect this is similar to other coins, is that the price will tend towards the amount spent to create it.
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cbeast
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October 02, 2014, 11:02:29 AM |
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An interesting outcome of this, and i suspect this is similar to other coins, is that the price will tend towards the amount spent to create it.
IIRC that is what the Satoshi White Paper claimed.
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Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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mestar
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October 02, 2014, 10:08:20 PM |
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No, the rewards pay for the entire mining industry. Miners, research, electricity, network connections, human resources, etc.
Except when they don't. For example, for the miners that never manage to get their initial investment back. I am trying to say that block rewards = energy consumed is a too simplified model. Block rewards = money spent on the mining industry (all resources combined) is better.
I disagree. Since you obviously have to build the miner first, and at that point you indeed need your more complex model of "initial investment + running costs", and also some guessing about the future of BTC price and difficulty. But, once the hardware is there, the price of said miner becomes irrelevant. Also, if there is a single location on earth where you can mine Bitcoins profitably, say for example use 0.8 BTC of electricity to generate 1 BTC, it is only enough for one single (perpaps not very smart) miner to calculate that he will make some money in the future, that that said individual can increase the total energy usage of the whole network. That single individual thus worsens the game for everybody else, and nobody can't do anything to stop him. Also, actual silicon itself is cheap to mass produce, once you have initial research and development done. And the cost of silicon can be close to one month of how much that silicon uses in electricity in one month, you can find those calculations somewhere on the forums. This means, that even a 0.8 "saturation factor" in mining, can be sad to get paid back in just 5 months. And, also, when the price is going down, nobody is ever adding new hardware, and then why would you even look at the manufacturing price of mining hardware? Running costs became a pure indicator of when you turn it off or not. Sometimes a simpler model is even a better one.
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mestar
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October 02, 2014, 10:13:32 PM Last edit: October 02, 2014, 10:33:56 PM by mestar |
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An interesting outcome of this, and i suspect this is similar to other coins, is that the price will tend towards the amount spent to create it.
Surely you meant to say: the amount spent to create it, will tend to what the price is.
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mestar
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October 02, 2014, 10:21:11 PM |
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Exactly this has happened with the transition from GPU to ASIC. The previous generation hardware eventually becomes obsolete due to changes in technology. Look at old personal computers.
I'm sure you are aware that Moore's law is slowing down lately. For example, top Intel processor from 2014 is just 100% faster than top processor from 2008 on a single thread performance basis. Expect even slower gains in the future. Once Bitcoin chips reach the state of the art, progress will be slow. No more need to replace hardware after 6 months.
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flipperfish
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October 13, 2014, 03:08:03 PM Last edit: October 13, 2014, 03:45:54 PM by flipperfish |
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I tried to invert BurtW's model to get a maximum supportable price without having miners consume more than a given percentage of world energy consumption. For energy consumption data, I used wikipedia [1] and assumed a growth rate of 2.90% [2]. I also tried to include the fact, that the halving occurs faster than in stable state, so an era would only last 3.5 years instead of 4. These are my results: Block Coins / World Energy Mining Mining Cost / Max Until Reward Year Consumption / Energy / Year Price Year Year 2013 50.00 2,628,000 143,851 TWh 36 TWh $5,394,412,500 $2,073 2017 25.00 1,314,000 158,989 TWh 40 TWh $5,962,082,272 $4,583 2020 12.50 657,000 175,720 TWh 44 TWh $6,589,489,592 $10,131 2024 6.25 328,500 194,211 TWh 49 TWh $7,282,920,815 $22,394 2027 3.13 164,250 214,649 TWh 54 TWh $8,049,323,830 $49,502 2031 1.56 82,125 237,237 TWh 59 TWh $8,896,377,670 $109,421 2034 0.78 41,063 262,202 TWh 66 TWh $9,832,569,459 $241,872 2038 0.39 20,531 289,794 TWh 72 TWh $10,867,279,442 $534,651 2041 0.20 10,266 320,290 TWh 80 TWh $12,010,874,977 $1,181,827 2045 0.10 5,133 353,995 TWh 88 TWh $13,274,814,408 $2,612,389 2048 0.05 2,566 391,247 TWh 98 TWh $14,671,761,875 $5,774,597
Annual Energy Consumption Growth Rate: 2.90% Percentage of Mining from World Energy: 0.025% Power Cost: 0.15 $/KWh Profit Margin: 0.01 Era Duration: 3.5 Years
[1] http://en.wikipedia.org/wiki/World_energy_consumption[2] http://physics.ucsd.edu/do-the-math/2012/04/economist-meets-physicist/
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raid_n
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October 13, 2014, 07:51:12 PM Last edit: October 13, 2014, 08:27:48 PM by raid_n |
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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(50/2 e) + 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 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 ...
Based on the same premise of a 100,000 USD bitcoin for this era (1): I am assuming an energy consumption of 0.5 W/GH/s and 1.5 GH/s/USD for new miners and a current hashrate of 2,65×10¹⁷ Hashes per second. 6,75×10¹⁹ ( hashrate at efficiency of 0.5W/GH/s for 135.00 GW) 6,75×10¹⁹−(2,65000000×10¹⁷) = 6,7235×10¹⁹ ( the outstanding hashrate required) 6,7235×10¹⁹÷(1,5×10⁹) = 44823333333,333333333 USD (The amount of USD needed to buy mining hardware with the above specs to actually reach that hashrate)
Does that make sense? Did I miss something? I'll look like an idiot if I've made a gross miscalculation but according to this you would need roughly 44 billion USD in current mining equipment to actually reach that energy consumption level. [edit] First mistake already! ;-) ( I used a more specific hashrate beforehand I have no idea where that number came from! Calculator memory? who knows. Apparently it wasn't insanely far off) Numbers before edit: 6,643811699×10¹⁹ outstanding hashrate in usd -> 44292077993,333333333 USD
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keystroke
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June 17, 2016, 11:19:45 AM |
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Just been thinking about this thread some more and it is possible that policies to increase the cost of electricity would come into effect if bitcoin started to use too much of the world's energy resources. These could be targeted at miners specifically. That would have a dampening effect on the above numbers.
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BurtW (OP)
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June 17, 2016, 12:29:11 PM |
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Just been thinking about this thread some more and it is possible that policies to increase the cost of electricity would come into effect if bitcoin started to use too much of the world's energy resources. These could be targeted at miners specifically. That would have a dampening effect on the above numbers.
That might happen but it would have to be a purely politically motivated punitive decision, not an economic one. I say this because normally the more energy you use the less you pay for electricity. Today, industrial consumers of electricity pay less than residential consumers for the same amount of energy and huge industrial users often negotiate an even smaller price due to their massive consumption. Now what power generation systems really hate is someone who uses huge amount of power on an intermittent basis - like an electric furnace to produce steel. This is because their peak demands affect the amount of base power generation needed and cause them to have to produce a lot of power that never gets used. Power generation can not be simply "switched on and off". Coal and especially nuclear plants have to be left running even when there is low demand and they are overproducing power. Natural gas generation has a relatively quick "warm up" cycle time so they can be switched on for higher demand seasons like summer air conditioning and turned off during lower demand. (Note that this pushes a demand cycle back into the natural gas production and delivery system that has to be taken into account there.) What power generation companies love is a consumer that uses a ton of energy at a very steady rate, someone who can say I need X MW 24/7/365 - like Bitcoin mining for example. This increases base demand 24/7 so it is a very efficient consumer. Therefore, economically speaking, very large Bitcoin mining operations should in theory be able to negotiate and receive the very best rates for their power - better than just about any other consumer.
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BurtW (OP)
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February 17, 2021, 10:58:52 PM |
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Bitcoin Network Power Consumption Estimate
First, note that Bitcoin mining efficiency does not matter when estimating the trend of the power consumption of the entire Bitcoin network.
The power consumption of the entire network depends on five things: x = the exchange rate [USD/BTC] e = the era [0..32] f = the average fees per hour [BTC/hour] c = the average cost of energy [USD/kWh] r = the average percentage of income miners spend on energy [unit less ratio]
From the era we can calculate the average hourly BTC subsidy rate: s = 6(50/2e) [BTC/hour]
And the average amount of BTC all the miners in the world 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 make: u = bx [USD/hour]
Given the worldwide average percentage of income miners spend on energy the amount spent worldwide on energy is: ur [USD/hour]
And finally, the worldwide power consumption is given by: P = ur/c [kW] = bxr/c [kW] = (s + f)xr/c [kW] = (6(50/2e) + f)xr/c [kW]
Notice that mining 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 hash rate.
Let’s put in some numbers:
x = $50,000; the exchange rate [USD/BTC] e = 3; the era [0..32] f = 5; the average fees per hour [BTC/hour] c = $0.03; the average cost of energy [USD/kWh] r = 0.8; the average percentage of income miners spend on energy [unit less ratio]
P = (6(50/2e) + f)xr/c [kW] = (6(50/23) + 5) 50000 ( 0.8 ) / 0.03 = 56,666,666 [kW] = 57 Gigawatts
World power production/consumption is about 15,000 Gigawatts.
Bitcoin mining will trend toward 57/15,000 = 0.38 % of world power production given these values.
This scales by BTC price so:
BTC at $500,000 means power consumption would trend to 3.8% of worldwide power.
BTC at $5,000,000 means power consumption would trend to 38% of worldwide power.
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marcus_of_augustus
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February 18, 2021, 09:18:43 AM |
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This scales by BTC price so:
BTC at $500,000 means power consumption would trend to 3.8% of worldwide power.
BTC at $5,000,000 means power consumption would trend to 38% of worldwide power. ... these numbers are only valid for era=3 though right? What might be interesting is to hold the ~0.37% of global energy constant (assuming a total energy cost market is willing to pay for 'bitcoin security') and use to estimate different prices for future eras.
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BurtW (OP)
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February 20, 2021, 04:26:17 PM |
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Correct. What we want is steady growth in price through the various eras such that the total energy consumption is kept to a reasonable level where "reasonable" is TBD. What you are asking for would also require us to estimate: - Exactly what will be considered "reasonable" 0.5%? 1%? 1.5%?
- The growth of power production over the eras.
- The growth in fees as the subsidy is removed.
- The growth or reduction (fusion may come on line in our lifetime) in the price of energy over time.
Seems pretty daunting to me. Maybe someone will take a stab at it.
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franky1
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April 10, 2021, 06:17:47 PM |
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lets see if there is more simply math to work out electric consumption
155exa hash in february(average)
outdated oldschool tech asics:S9 hashrate: 14th wattage:1.3kwh =11071429 asics =14,392,857kw/h
current tech asics:s19 hashrate 95th wattage:3.25kwh =1,631,579 asics =5,302,631kw/h
next gen tech asics:S19pro hashrate: 110th wattage:1.3kwh =1409091 asics =4,579,545.kw/h
seems easier math then what BurtW keeps promoting
... soo lets dollarise it -with burtW $0.03 electric cost s9: kwh*0.03 =$575,714.28 /6block/6.25coin=$15,352.38 per btc
s19: kwh*0.03=$159,078.93 /6block/6.25=$4,242.10 per btc
s19pro: kwh*0.03=$137386.35 /6block/6.25=$3,663.63 per btc
now wasnt that easy
.. these numbers are about the energy power consumption amount. .. but do not include the hardware ROI costs
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I DO NOT TRADE OR ACT AS ESCROW ON THIS FORUM EVER. Please do your own research & respect what is written here as both opinion & information gleaned from experience. many people replying with insults but no on-topic content substance, automatically are 'facepalmed' and yawned at
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