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Author Topic: Transaction cost in kWh  (Read 4836 times)
amaclin
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October 01, 2014, 10:20:12 AM
 #1

Is there a chart which shows estimated transaction cost in kWh?
How much bitcoin network at all (miners, nodes, lite clients) takes energy for transaction proceeding?

My calculations are too weak:
Current bitcoin difficulty hashrate is 250 000 000 GH/s
Modern asic miners do 1000 GH/s for 600 W
So, the whole network runs as 250 000 such devices
(In fact the current miners take more energy)
In an hour bitcoin network takes 150 000 kWh power and produces 3000 transactions
So, one transaction costs today at least 50 kWh (this is low estimate)

Are there more correct estimations and time-graph?
Thank you. Sorry, English is not my native language.
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Elwar
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October 01, 2014, 10:29:40 AM
 #2

There is a number on blockchain.info (I can't access it right now). I believe their assumed cost of electricity is a bit on the high side.

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amaclin
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October 01, 2014, 10:49:57 AM
 #3

There is a number on blockchain.info (I can't access it right now). I believe their assumed cost of electricity is a bit on the high side.

No. There is no such chart there.
Seems to me that I know why  Cry
jamesg
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October 01, 2014, 11:00:49 AM
 #4

Is there a chart which shows estimated transaction cost in kWh?

I haven't seen one but this is a great way to think about total processing costs. Although, this doesn't account for any CAPEX or any other OPEX but it is still interesting.

How much bitcoin network at all (miners, nodes, lite clients) takes energy for transaction proceeding?

I'd assume 1kW per 1Th/s as some miners are above this and some are below.

Are there more correct estimations and time-graph?

So we'd have 250,000 kWh at 3k txns which == 83.33kW

Hosting arrangement range from $30kWm to $150kWm.

So the cost range for 83.33kW is from $3.36 to $16.8.

We are probably over secure at this point in time but the infrastructure is in place for the network to grow 10x in transaction size which existing mining infrastructure.
amaclin
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October 01, 2014, 11:12:03 AM
 #5

Quote
So the cost range for processing and securing one transaction(added - amaclin) 83.33kW is from $3.36 to $16.8.

Good!
Would you like to compare these digits with current Visa/MasterCard/FED/whatever expenses for tx proceeding?
And tell me - who is paying for resources Grin
amaclin
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October 01, 2014, 11:41:52 AM
 #6

Processing transactions isn't the only thing accomplished by the Bitcoin network. To keep it brief, it's censorship-proof money.

Sorry. My English is poor. I understand that bitcoin network does some things (most of them are casino bets as shown on bc.i)
My questions are:
a) aren't the expenses too high comparing to the other systems? (I mean centralized money systems, not other crypto-currencies)
b) who pays?
franky1
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October 01, 2014, 12:14:31 PM
 #7

ok lets use some maths

EDIT(after writing the below maths): seems the mining community have had a discount on mining costs compared to last time i calculated it in the summer.. so read on and enjoy

numbers we know..
hashrate: 250petahash(avg for month) https://blockchain.info/charts/hash-rate
1terrahash miner: 1kwatt PSU
transactions: 486 a block(avg of month) https://blockchain.info/charts/n-transactions-per-block

so lets do this:
486tx x 6 =2919tx per hour
250,000kwatt per hour
250,000/2919=85kwatt/tx

lets say it is 20c per kwh
=$17
which does roughly correspond to: https://blockchain.info/charts/cost-per-transaction?timespan=180day ($18-$20 recently once you add on the physical cost of a rig)

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October 01, 2014, 12:35:26 PM
 #8

ok lets use some maths

EDIT(after writing the below maths): seems the mining community have had a discount on mining costs compared to last time i calculated it in the summer.. so read on and enjoy

numbers we know..
hashrate: 250petahash(avg for month)https://blockchain.info/charts/hash-rate
1terrahash miner: 1kwatt PSU
transactions: 486 a block(avg of month)https://blockchain.info/charts/n-transactions-per-block

so lets do this:
486tx x 6 =2919tx per hour
250,000kwatt per hour
250,000/2919=85kwatt/hour

lets say it is 20c per kwh
=$17
which does roughly correspond to: https://blockchain.info/charts/cost-per-transaction?timespan=180day ($18-$20 recently once you add on the physical cost of a rig)

now lets average cost per bitcoin
(17 x 486)/25reward= $332 per btc(my maths)
(20x 486)/25reward=$388 bc.info's high estimate for today
seems cheap to mine right now...as you can see by the link above the cost estimates were alot higher during summer

but atleast it proves one thing that i have been harping on about for the last year. that no one wants to sell below cost of mining and that this price point should be used as a resistance point.

now how to do the maths real easily.. in the future so you have our own indicaters
take the cost/tx https://blockchain.info/charts/cost-per-transaction?timespan=30days for today (far right point of graph is ALWAYS the most recent day)
take the transactions per block https://blockchain.info/charts/n-transactions-per-block?timespan=30days for today (far right point of graph is ALWAYS the most recent day)
multiply them together. then devide that by the 25btc reward per block

again today 20cost x 486tx=$9720
$9720/25=$388/btc

now you know the resistance point miners wont want to sell below as its costing them money. ill leave it to you lot to find ways of getting raw data of the numbers in API format so that you can make your 'instant' calculators of btc cost price (resistance point)






Possible miscalculation
Some research will help before deriving 0.2 kwh. Work out again the maths and you can find out how low it can go.

EDIT: Rephrase the statement

amaclin
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October 01, 2014, 12:35:37 PM
 #9

Quote
ets say it is 20c per kwh=$17

Sorry. I do not want to calculate mining profits.
I only want to know - who is paying today these $17 bucks per transaction Smiley

OK, I know (I think that I know) who is paying.
His name is John Smith and he thinks that his transactions are low-cost and bitcoin is awesome.
He also thinks that bitcoin will cost tomorrow more than today.
He knows nothing in cryptography, math, physics and  https://en.wikipedia.org/wiki/Conservation_of_energy.
He thinks that he can gain infinite profits only holding some digits in his computer for infinite time.

UPD:
OK, may be one can argue with $17 per transaction.
Let us go one step back.
Who is paying [%your number][%your currency] for 83.33kWh per one transaction?


franky1
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October 01, 2014, 12:40:28 PM
 #10

WRONG!
Conduct proper research before coming up with conclusion of 0.2c kwh. Work out again your maths and you can find out how low it can go.

0.2cents!! seriously.. i was thinking more along the lines of 20 cents

im sorry, i should have said.. im from the UK


but feel free to adjust your numbers to your country.. after all i did say "lets say" which is a term of a guess/estimate rather than a rule.
enjoy your day knitpicker!

but i did edit out the cost of a BTC, as it seems this topic just wants to concentrate on transaction cost

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Don't take any information given on this forum on face value. Please do your own due diligence & respect what is written here as both opinion & information gleaned from experience. If you wish to seek legal FACTUAL advice, then seek the guidance of a LEGAL specialist.
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October 01, 2014, 12:52:00 PM
 #11

Possible miscalculation
Conduct proper research before coming up with conclusion of 0.2c kwh. Work out again your maths and you can find out how low it can go.

0.2cents!! seriously.. i was thinking more along the lines of 20 cents

im sorry, i should have said.. im from the UK


but feel free to adjust your numbers to your country.. after all i did say "lets say" which is a term of a guess/estimate rather than a rule.
enjoy your day knitpicker!

but i did edit out the cost of a BTC, as it seems this topic just wants to concentrate on transaction cost

Geez... sorry about that. didn't meant to be so mean. I just want to point out that it could be miscalculated. I'll just edit my post and rephrase it to possible miscalculation.

Meet up with u some day on some bitcoin conference  Smiley

amaclin
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October 01, 2014, 12:54:59 PM
 #12

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but i did edit out the cost of a BTC, as it seems this topic just wants to concentrate on transaction cost
Yes. Thanks a lot for editing. This clearing our minds and our discussion.
I want to calculate transaction costs in some universal resources, which do not depend on countries and other reasons.
And compare these costs with other processing systems.

Do you see what I see?  Grin
kokojie
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October 01, 2014, 01:43:20 PM
 #13

Quote
ets say it is 20c per kwh=$17

Sorry. I do not want to calculate mining profits.
I only want to know - who is paying today these $17 bucks per transaction Smiley

OK, I know (I think that I know) who is paying.
His name is John Smith and he thinks that his transactions are low-cost and bitcoin is awesome.
He also thinks that bitcoin will cost tomorrow more than today.
He knows nothing in cryptography, math, physics and  https://en.wikipedia.org/wiki/Conservation_of_energy.
He thinks that he can gain infinite profits only holding some digits in his computer for infinite time.

UPD:
OK, may be one can argue with $17 per transaction.
Let us go one step back.
Who is paying [%your number][%your currency] for 83.33kWh per one transaction?




Every holder of Bitcoin is paying, by having their coins depreciate 10% each year, perpetually, due to the cost of PoW mining. Though we have been lucky so far, since the inflow of capital far outpaces this depreciation in the past. But at some point, the inflow of capital will be unable to keep up, and we will see the depreciation,  we are possibly seeing it right now.

btc: 15sFnThw58hiGHYXyUAasgfauifTEB1ZF6
amaclin
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October 01, 2014, 01:59:15 PM
 #14

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But at some point, the inflow of capital will be unable to keep up, and we will see the depreciation,  we are possibly seeing it right now.

Isn't it a ponzi scheme?  Grin
Bitcoin transaction costs are not low! They are deferred to next levels of pyramid.
Sorry, people. You all have been goxxed  Cry
We will see the "big bitcoin fall" very soon.
headswim
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October 01, 2014, 02:04:16 PM
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Every holder of Bitcoin is paying, by having their coins depreciate 10% each year, perpetually, due to the cost of PoW mining. Though we have been lucky so far, since the inflow of capital far outpaces this depreciation in the past. But at some point, the inflow of capital will be unable to keep up, and we will see the depreciation,  we are possibly seeing it right now.

You are confusing inflation with price appreciation, and your claim is based entirely on a timeframe that you selected to fit your bias.

Just as easily, you could say that Bitcoin price has appreciated by greater than 4x per year and be equally correct.

There is inflation in the money supply of Bitcoin, which was and is known (since it wasn't heavily pre-mined like other coins), math-based, predictable, and FALLING over time. Because industrial miners are profit-focused, they are selling virtually immediately to lock-in current price to pay the bills, rather than speculating about future value. This causes somewhere between 0 and 3600 BTC to be sold daily onto the market, creating natural downward pressure on price.
amaclin
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October 01, 2014, 02:18:56 PM
 #16

A year ago the hashrate was 200 times lower.
And transaction cost (calculated in kWh) was lower. Bitcoin had advantages of cheap transactions (according to the value of incoming $$).
Now the game is over.
If the miners will switch off some of their devices - the security rate will fall.
Switched off asics cost NOTHING to a potential attacker who wants to gain 51% power and create alternate chain of 1440 blocks (he pays only for electricity, hardware will cost near to zero)
Bitcoin will lose securing transaction advantages.
The end.

I do ask you again - can you plot a chart transaction cost in kWh
Do not post it to a forum! Analyze it yourself. Think.
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October 01, 2014, 02:23:38 PM
 #17

Quote
But at some point, the inflow of capital will be unable to keep up, and we will see the depreciation,  we are possibly seeing it right now.

Isn't it a ponzi scheme?  Grin
Bitcoin transaction costs are not low! They are deferred to next levels of pyramid.
Sorry, people. You all have been goxxed  Cry
We will see the "big bitcoin fall" very soon.

if you simplify it down that gold is only desired as people prefer it over silver or copper because of certain features and benefits. and that the cost of mining gold is deffered onto the second level.. then you realise that what you say applies to many things.

bitcoin is not just about swapping between fiat and bitcoin. people actually have the desire to keep and use bitcoin for multiple reasons beyond swapping for fiat.

thus in the big picture of life, you can twist anything and everything to sound like a ponzi, if you simply ignore the features and benefits of the 'produce' for sale and only think about the price and the FIAT swap part.

stop being narrow mind about trying to pump and dump the price and caring about the price, and think about the features and benefits of bitcoin

I DO NOT TRADE OR ACT AS ESCROW ON THIS FORUM EVER.
Don't take any information given on this forum on face value. Please do your own due diligence & respect what is written here as both opinion & information gleaned from experience. If you wish to seek legal FACTUAL advice, then seek the guidance of a LEGAL specialist.
amaclin
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October 01, 2014, 02:31:05 PM
 #18

Quote
if you simplify it down that gold is only desired as people prefer it over silver or copper because of certain features and benefits.
It is too difficult in our world to double-spend gold or silver
It will be very easy to double-spend bitcoins if the hashrate falls x2 from the current value.  Grin
Because there will be asics switched off, ready for sell at zero-price

Quote
bitcoin is not just about swapping between fiat and bitcoin. people actually have the desire to keep and use bitcoin for multiple reasons beyond swapping for fiat.
Yes. But these things in bitcoin will cost them much more than deals in fiat. Sorry.

Quote
thus in the big picture of life, you can twist anything and everything to sound like a ponzi
Yes. But more effective ponzis live long. Less effective die. Bitcoin costs too much for community. 80 kWh per one transaction? Crazy!

Quote
stop being narrow mind about trying to pump and dump the price and caring about the price, and think about the features and benefits of bitcoin
I do not trade.
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October 01, 2014, 02:38:49 PM
 #19

We will see the "big bitcoin fall" very soon.

You are making a few assumptions that don't take into account:

1) Block size changing (amount of transactions per block increasing)
2) Asics being used for heating thus 99.9% of energy being converting into needed product and mining for BTC merely being a product that subsidizes the energy bill

You do understand that ASIC's are very cheap to manufacture once designed and tested and that we are just going through a transitional period
where the 10+ ASIC fabs are recouping initial capital investment costs right?

But at some point, the inflow of capital will be unable to keep up, and we will see the depreciation,  we are possibly seeing it right now.

Potentially, but as outlined by Vitalik Buterin:

https://blog.ethereum.org/2014/06/19/mining/

There are many solutions to your proposed dilemma that can be adopted in the future. The right course of action may be doing nothing as
the laws of thermodynamics and economics will converge to automatically solve the cost issue, centralization dilemma, and environmental concerns.

This is not to say that we shouldn't be vigilant and try and promote a quicker adoption into ASIC decentralization...yes, by all means, join us and
help decentralize ASIC's.


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October 01, 2014, 02:46:25 PM
 #20

A year ago the hashrate was 200 times lower.
And transaction cost (calculated in kWh) was lower. Bitcoin had advantages of cheap transactions (according to the value of incoming $$).

I do ask you again - can you plot a chart transaction cost in kWh
Do not post it to a forum! Analyze it yourself. Think.

there were not terrahash miners last year, just gigahash miners so the electric/has was more expensive.
180ghash for 1kw
1450Thash(1,449,977Ghash)
=8055kw
282 transactions
28.5kw/tx
again UK rate of electric(20c)
$5.71 per tx.

but customers do not pay $5-$20 per transaction.
think of it like gold. CUSTOMERS do not have to shave off small amounts of their hoard to pay $5-$20 in transactions.. instead the miners are given fresh gold straight from the mine. and can sell that fresh gold at the market rate.

customers however pay a spot price / (0.0001btc) which is only a few cents of shavings off of their hoard. not $5-$20


I DO NOT TRADE OR ACT AS ESCROW ON THIS FORUM EVER.
Don't take any information given on this forum on face value. Please do your own due diligence & respect what is written here as both opinion & information gleaned from experience. If you wish to seek legal FACTUAL advice, then seek the guidance of a LEGAL specialist.
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