>Bitcoin mining is 5814% more efficient over the the last 8 years.
And, through the magic of the Bitcoin protocol, that efficiency gain does not translate at all into energy savings. The Bitcoin incentive structure means that if mining becomes 100x more efficient tomorrow, you should just mine 100x more by spending the same amount of energy.
More or less. To be pedantic about it, the block time is kept roughly constant by increasing or decreasing the required difficulty.
In effect as more efficient hashing becomes possible and comes on line, the hash rate required to win the block also increases, canceling any efficiency gains.
Right, by design we desire a fixed emission of coin, regardless of the energy input. Rather than the extra energy going into making more coins (bad thing) it goes into increasing the security of the network — making it very difficult to undo or rewind blocks, delete or reorder transactions or produce empty blocks blocking future transactions. This is a good thing. Bitcoin is the most secure money on the planet.
Efficiency is expressed as hashes/energy, not as coins/energy. As efficiency increases, security increases too.
Not really. Does Bitcoin's security increase when this mining council increases its mining power? They already have 46% so increasing it only makes it less secure. Increasing the hashes only increases energy consumption then.
Also, this formulation of "security" is very misleading. For the layperson, security means the probability of not losing my money. For the cryptographer it means the amount of random guessing you would need to break encryption. So every system that uses the same kind of encryption is equally secure.
Yes Bitcoin security increases when the mining council uses more energy! This is not a proof of stake scheme where more of a single validator decreases security.
If the honest miners put more energy in, dishonest miners must outspend them. It increases network security.
If we accepted that the Mining council miners are honest then why do we even need Proof of Waste? If we know that they are dishonest then them having 50% hashrate is very bad
I don't agree with this analysis. If mining becomes 100x more efficient, and the difficulty goes up 100x, you have not gained any security. The security comes from the amount of money spent on energy to mine the current chain, and the fact that someone seeking to mine a parallel chain to double-spend (or whatever else) would need to spend a greater amount of money to mine even faster.
So if miner's collectively spend $X on energy to mine the next block, it doesn't matter whether that buys them one hash or a trillion hashes - someone looking to mine a parallel chain would just have to spend $(X+1) at the same hashes/energy efficiency.
It's not really an argument. It's wishful thinking unsupported by actual evidence or even common sense, and it directly goes against actual evidence of Bitcoin miners starting up old fossil fuel plants. Bitcoin holders are greatly incentivized to make up theories about Bitcoin being environmentally friendly.
How is it you probably have very good context in terms of adoption curves, cost curves, and generally the ability to see the future better than the average person, but when it comes to Bitcoin/energy creation, there is no effort?
Of course mining is going to use the cheapest energy available right now. We subsidize fossil fuel industry and we don't utilize carbon taxes.
But solar power, wind power, renewables, are now the cheapest sources of energy in the world, and in all of history and will presumably only get cheaper (https://ourworldindata.org/cheap-renewables-growth).
Capacity gets built out when demand exceeds supply. Capacity is also a larger upfront cost. Low hanging fruit gets picked first.
So project 10 years, 25 years, and 50 years out from now. The first Tesla Roadster came out in 2008, 13 years ago. In 2008 people laughed at the idea of electric cars, now its abundantly clear that electric cars will be the only cars of the future. It took time for manufacturing capacity and technical improvements for the right scale to occur. You're living in 2008 saying "what evidence is there for an electric car market? That goes against the current evidence of all these ICE auto sales we currently have."
The cheapest electricity source is the one you already have: fossil.
Also, what good is the added capacity if it's being used up by bitcoin? Everything you pour into btc isn't going into an EV.
But so you think using more energy will solve our energy problems. Sorry, but that's stupid. It's like thinking using more money will solve your money issues. Or using more water will solve you water issues.
It just doesn't work like that.
You may think "but solar panels create electricity from something that comes from outside the planet, therefore it is unlimited."
And yeah, there's some truth to it.
On the other hand, if we capture that energy and turn it into heat, which is essentially what bitcoin does, we're adding heat to the planet that, as you would have pointed out, wouldn't stay here in the first place.
So yeah, unlimited energy from the sun, limited capacity of the planet to soak it up before we all die.
Seriously, proof of work must die. And proof of stake... well... as far as I understand, it's no better than boring old fiat currency.
PS: oh, and if you think that merely writing on a technology forum grants you "the ability to see the future better than the average person", boy you're mistaken. Or at least I foresee a different future than you do.
> Also, what good is the added capacity if it's being used up by bitcoin?
The new capacity replaces the old capacity, which replaces fossil fuel power plants, which eliminates carbon emission output.
> On the other hand, if we capture that energy and turn it into heat, which is essentially what bitcoin does, we're adding heat to the planet that, as you would have pointed out, wouldn't stay here in the first place.
I think you need to review some physics, the sun's rays are already hitting the planet, causing "heating". This is inconsequential because it dissipates naturally. Capturing the sunlight and turning it into energy in no way introduces more energy to the planetary equilibrium. The problem is carbon emissions causing feedback mechanisms by trapping heat.
The problem is that Bitcoin can go for the cheapest source of energy available worldwide. So the best case scenario involves forcing the entire world to adopt carbon taxes and remove fuel subsidies which are extremely popular. It's not going to happen at least in the next 20 years.
At the same time when you posit a counterintuitive idea, you have to at the very least give some evidence that it actually happens in the real world. No such specific evidence is presented. No one who doesn't hold Bitcoin says that Bitcoin is good for the environment. The only people who insist such a possibility are heavily invested into Bitcoin. This is very suspicious at the very least.
The world agreeing to end fossil fuel subsidies and add carbon tax is indeed contentious, however we don't need everyone to agree, just enough major players. We've already agreed to Kyoto protocols/Paris climate accord, etc., so we know it can be done.
The evidence is first principles behavioral economics. If renewable energy is the cheapest form of energy (which is easily verifiable, and true), then it will become the majority source of energy not just for mining, but the world.
Nothing is actually "good" for the environment; human existence is inherently "bad" for the environment. But rapid infrastructure capacity change from fossil fuel power plants to renewable power plants would be a good thing. Bitcoin provides the most profitable/easiest way of monetizing energy; and so it fits that Bitcoin mining will be major buyers of renewable energy, should it be available. That improves profitability of renewable investments, lowers break even payback time, and generally supports renewable industry.
If you don't care about Bitcoin, you don't care to defend it against untrue or unbalanced criticisms, that's why you only hear these defenses from Bitcoiners, or people who actually care to take the time to study and understand. Its not suspicious, its very common sense. When was the last time you invested time in understanding and then arguing online about something you didn't care about?
The root of your argument relies on your assumption that Bitcoin is useless. Obviously, I disagree with this assessment, as a decentralized network that is permissionless to participate in, can be interacted with from anywhere in the planet, is censorship resistant, and more private, has value. Creating a digital store of value that can give stability to money and maybe even replace fiat currency is valuable to society.
> Shouldn't we be capturing co2 or warming up children in need instead?
Your suggestions on how to spend electricity (aka resources or money) are great, but whose paying for it? Are you suggesting governments commandeer the electricity/power generation market and become responsible for rationing electricity to the public?
The most wasteful is the one that is inflated to nothing by the printing press. Happened several places last year, and will happen again this year too. Bitcoin is an alternative.
"Precious"? Bitcoin is nothing more than bits on a storage and wasted energy. Just like fiat money is nothing more (nowadays anyway) than metal coins, in the best case.
I see how bitcoin can help countries with rampaging inflation, but saying it's "precious", that's overreaching.
There is also the pirate/ninja metric, which is just as sensible as tx/energy, because those are unrelated quantities.
More energy doesn’t mean more or less txs. The sensible metric is security, and we can measure it in total hash rate and extrapolate that in watts.
And, through the magic of the Bitcoin protocol, that efficiency gain does not translate at all into energy savings. The Bitcoin incentive structure means that if mining becomes 100x more efficient tomorrow, you should just mine 100x more by spending the same amount of energy.