

Bitcoin Miners Are Racking Up $150,000 A Day In Power Consumption - Lightning
http://techcrunch.com/2013/04/13/the-cost-of-a-bitcoin/

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modeless
It's easy to calculate a number for the waste of Bitcoin, but it's not easy to
calculate a number for the waste of the awful, archaic systems it could
replace. Transferring money is done today with mainframes, paper forms, and
middlemen galore. If Bitcoin replaced all that there's no doubt in my mind
we'd all be better off.

~~~
codeulike
Yeah, my understanding is that miners are not just mining, they're also
powering the distributed transaction engine of bitcoin. Is that correct? In
which case the power consumption needs to be compared to (per $ or whatever)
consumption for Bacs, swift, visa etc

~~~
paulhodge
They are doing a make-work exercise which only needs to be time consuming, in
order to prevent cheaters. It's mostly throw-away work. The actual computation
that _needs_ to happen is pretty trivial. I think it would be possible to fix
Bitcoin so that "proof of work" is something that doesn't consume all that
electricity, but I'm not sure what it would be.

~~~
kzrdude
If somebody could explain what the new thing Ripple means by resolving things
by consensus instead of proof-of-work, maybe that would work.

But as far as bitcon presents it, proof of work is needed to resolve the
problem of keeping a honest transaction log in an untrusted environment.

~~~
tlrobinson
As I understand it, Ripple's trust system works by selecting multiple third-
parties that are unlikely to collude against you, and checking that they agree
on a transaction before considering it "confirmed".

<https://ripple.com/wiki/Consensus>

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dustcoin
The power numbers cited by this article are very inaccurate when considering
current mining hardware and software.

"* Electricity consumption is estimated based on power consumption of 650
Watts per gigahash and electricity price of 15 cent per kilowatt hour. In
reality some miners will be more or less efficient."

Most serious miners pay less than $0.15/kWh.

An Avalon ASIC does 65Gh/s on 620W (9.5 J/Gh)

A BFL Single FPGA does 800Mh/s on 80W (100 J/Gh)

Even a dual ATI 5970 rig will do 1300Mh/s on 600W (461 J/Gh)

Currently over 1/3 of the network is ASICs (300 * 65Gh/s of Avalons + 7Th/s
from ASICMINER) and another 1/3 is probably FPGAs.

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anigbrowl
Are these ASICS going to be good for anything after mining coins? I can't help
thinking they're like a shovel that only works within a goldfield and has no
utility (other than as a doorstop) once superseded by faster technology or
obviated by the last Bitcoin being mined.

~~~
ef4
After the last Bitcoin is mined (and actually much sooner than that), the
profit from mining will have shifted away from new coins and into transaction
fees.

Mining new coins and processing transactions are the same thing. So the
hardware can remain useful as long as Bitcoin stays in use.

(Could it get obsoleted by better hardware? Of course, but that's true of
every piece of electronics.)

~~~
anigbrowl
I guess what I am confused by is that the transaction processing is much
easier than mining (ie it's not going to get more and more difficult to do do
over time) so you'd need to be processing a very large number of transactions
before you'd need an ASIC. If you're a bank or BTC exchange then it's a no-
brainer, but I wonder if more than a small number of these devices will be
able to do enough work to justify their power consumption as time goes by.

~~~
maxerickson
By easier, do you mean less competitive?

The transaction fees are won in the same fashion as the mining rewards, so
given a high enough level of paying users there should be incentive to run
nodes (the transaction fees might even overtake the mining rewards before the
last new coins are awarded, if things play out in a bitcoin friendly manner).

~~~
anigbrowl
But if you are mining, there are fewer and fewer new coins to be discovered
over time, so you have to compute more and more hashes in hopes of finding a
new one. My (possibly incorrect) understanding is that processing a
transaction 1 year from now will be no more difficult than processing one
today, whereas in the future you'll have to mine for longer to have the same
chance of getting a BTC.

In other words, doesn't the workload for processing each transaction stay the
same over time?

~~~
maxerickson
Yeah, actually adding a transaction to a block is trivial. But that block
still has to be added to the block chain, which is exactly what mining is.

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jb-
So that is about 55 million dollars a year to completely secure the network
and process all transactions. I am not entirely sure how it will scale, but I
predict that it will scale logarithmically with the number of transactions,
especially considering that mining equipment will become more efficient.

Meanwhile the United States will spend 797 million dollars [1] this year in
simply printing and transporting physical currency, not including all the
other obvious costs in maintaining a modern currency.

[1] <http://www.federalreserve.gov/foia/2013newcurrency.htm>

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bcl
Funny that they link to butterfly Labs, who still hasn't shipped, instead of
Avalon.

~~~
C1D
BFL has (edit) not been (/edit) know to ship -but I can confirm that people
have gotten their orders!- becuase It's taken some time as they've had
problems with getting ASIC's. They supposedly will start sending them out at
mid april (15th) which is tomorrow, so I'm going to wait and see what happens.
If they do ship then I'll place my order. They probably mentioned BFL because
they're currently accepting orders and also have had more media attention
because of the whole scam controversy.

~~~
epylar
They've been accepting orders for 7-8 months and almost always state they'll
ship 'any day now'.

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ngoel36
I just take my ASIC into Starbucks.

Free BTC for me...

~~~
fixxer
I keep mine at school.

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anigbrowl
...which makes a pretty case for the school to confiscate it/sue you for the
BTC generated using their power.

~~~
fixxer
Ahh, that's the HN I know and love... making the trivial a "thing" ;)

~~~
anigbrowl
It's an economic phenomenon that I am interested by:
<http://en.wikipedia.org/wiki/Coase_theorem>

~~~
fixxer
Sounded more like you were interested in slapping my wrist.

~~~
anigbrowl
I was just surprised you'd admit it in public, and thinking about what could
happen if the school found your ASIC and knew what it was. Of course, you
could make a counter-argument that you were entitled to use the school's
electricity in partial exchange for your tuition fees :)

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tlrobinson
In a perfect mining market the total amount of money spent by miners each day
(cost of electricity/bandwidth + amortized cost of hardware) will always tend
to converge on the value of the mining rewards (minus some profit margin),
which for the next 4 years is about 3600 BTC per day (25 BTC/block * 6
blocks/hour * 24 hours/day).

If the value of Bitcoins go up, so does the number of miners securing the
network, which makes sense. It's pretty ingenious.

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overgard
Interesting, but I'm curious, does anyone know how that compares to something
like SETI, or folding at home?

~~~
sehugg
Check out the BOINC combined stats, which includes SETI@Home and lots of other
volunteer computing projects:
<http://boincstats.com/en/stats/-1/project/detail/host>

It says the network has about 9 million hosts, which at about 200 watts
(ballpark, GPUs can consume a lot of power) would consume about 2 megawatts of
electricity. Bitcoin consumes 892.54 MWh/day = 37 megawatts.

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jamesaguilar
I wonder what that translates to in carbon emissions. At Palo Alto energy
prices, it looks like order 1 GWh/day, or about 41 MW.

Edit: oops, I see that some of this is stated in the linked article. My bad. I
was just working backwards from the info in the title.

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kayoone
Imo the Bitcoin Goldrush is long gone. In mid 2011 you could make a couple of
hundred $ per month with a decent Rig that had 3 decent GPUs. Todays numbers
are far from that.

~~~
wmf
Last week mining profitability was back to 2011 levels but then somebody Goxed
it up. <http://www.bitcoinx.com/charts/>

