
Five myths about Bitcoin’s energy use - nvk
https://coincenter.org/entry/five-myths-about-bitcoin-s-energy-use
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spiznnx
>but that amount is substantially less than the energy it costs to keep no
fewer than three Fortune 500 financial companies running at full steam for a
few days.

Ridiculous comparison. They are working on other transactions as well.
Currently a bitcoin transaction uses 427kWh.

One thing that is interesting to think about is that once block rewards go
away, increasing the transaction capacity of the chain will probably lower
energy usage. Competition on transaction fees will dry up if more transactions
can fit on the chain per minute, reducing the total reward from fees and
making mining unprofitable until total network electricity costs go down (by
miners shutting down) until equilibrium is reached again.

But txn fees are still only 15% of the total block reward so those effects
won't really matter for a while. If satoshi had predicted this rise in value,
he would have made the block rewards drop faster than once every 4 years.
Secure network consensus is not what the mining market is getting paid by,
it's getting paid by the $140k USD created out of thin air every 10 minutes.

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dna_polymerase
Regarding the proof-of-stake part: Ethereum devs are also working on sharding
which will make scaling on the Ethereum Blockchain way easier. I really think
that Ethereum will be the No.1 cryptocurrency in the near future. Bitcoin devs
showed plenty of times, that they are not capable of keeping pace with demand
(couldn't even get the block size thing right). Bitcoin is virtually dead. No
one can really use it for real world transactions. Plus Bitcoin in reality is
a really central coin, completely in the hands of the miners. Even if the
Bitcoin devs decided to go with PoS, the miners wouldn't agree.

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westurner
Proof of Work (Bitcoin*, ...), Proof of Stake (Ethereum Casper), Proof of
Space, Proof of Research (GridCoin, CureCoin,)

Plasma (Ethereum) and Lightning Network (BitCoin (SHA256), Litecoin (scrypt),)
will likely offload a significant amount of transaction volume and thereby
reduce the kWh/transaction metrics.

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westurner
> But electricity costs matter even more to a Bitcoin miner than typical heavy
> industry. Electricity costs can be 30-70% of their total costs of operation.

> [...] If Bitcoin mining really does begin to consume vast quantities of the
> global electricity supply it will, it follows, spur massive growth in
> efficient electricity production—i.e. the green energy revolution. Moore’s
> Law was partially a story about incredible advances in materials science,
> but it was also a story about incredible demand for computing that drove
> those advances and made semiconductor research and development profitable.
> If you want to see a Moore’s-Law-like revolution in energy, then you should
> be rooting for, and not against, Bitcoin. The fact is that the Bitcoin
> network, right now, is providing a $200,000 bounty every 10 minutes (the
> mining reward) to the person who can find the cheapest energy on the planet.

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comicjk
This is ridiculous. The economy is already incentivized to find cheaper
electricity by forces far more powerful than Bitcoin. By this logic, you would
defend a craze for trying to boil the sea.

~~~
westurner
If the market had internalized the external health, environmental, and defense
costs of nonrenewable energy, we would already have cheap, plentiful renewable
energy. But we don't: the market is failing to optimize for factors other than
margin. (New Keynesian economics admits market failure, but not non-
rationality.)

So, (speculative_valuation - cost) is the margin. Whereas with a stock in a
leveraged high-frequency market with shorting, (shareholder_equity -
market_cap) is explainable in terms of the market information that is shared.

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cosarara97
Bitcoin's energy use will tend to raise to match the mining profits. As long
as both BTC's price and transaction fees keep raising, the energy miners spend
will continue to raise. BTC's price is going up due to speculation, and
transaction fees due to blocks being full.

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spiznnx
Even at current levels, BTC's built in block rewards dominate tx fees
(12.50BTC built in + 1.38 tx fees). The 12.5 built in reward is essentially a
subsidy for mining.

~~~
westurner
The block reward is an incentive for redundant distributed replica nodes.

