[gritzko]

No, no, no.

The amount of power wasted by BitCoin indirectly depends on the monetary turnover of the system. Because if somebody can spend $1mln to perform 51% attack and move around $1bln, that will likely be done. Hence, the power wasted is proportional to the turnover of the system. Otherwise, it does not work.

Also, when a bank charges me 1% for a wire transfer, they pay salaries from that money and some people buy food. The power burnt by BitCoin is actually literally immediately irrecoverably physically wasted.

[ikeboy]

No, it's proportional to the value of the coins used as reward. If there's high turnover, that might lead to bitcoin's price increasing and therefore higher energy costs. Also, high turnover may lead to higher fees, increasing the reward.

If the high turnover is done between trusted parties, or with settlement time, then it doesn't matter to security. It needs to be people accepting large amounts from strangers/untrusted counter-parties and giving stuff for it immediately. But usually, if I send someone $1000, they can wait 3 hours for security.

>Also, when a bank charges me 1% for a wire transfer, they pay salaries from that money and some people buy food.

When a bank has lights on, burns fuel to send an armored truck around, etc, that's also wasted.

[raducu]

Sorry, but the bitcoin "wasted power" is just a NON-ISSUE right now.

World wide standby power waste must be 1000 times more than what bitcoin uses - world wide power usage ~17TWH, 1% standby power waste => 170GWH.

I'm pretty sure that all the power dedicated by the banks to perform the same opperations as bitcoin (people driving to work, office building power, air conditioning, datacenters power, and so on) is signifficantly more than 40MWH.

So, just the global standby power waste is orders of magnitude greater than what bitcoin uses, and banks probably use a lot more power to perform the same opperations as bitcoin does.

If you pay a 1$ fee to a bank or a bitcoin fee, that 1$ will recirculate back into the economy. The difference is the banks are a lot more inefficient and are such human resources hogs because of their exclusive right to create money out of thin air.

[CyberDildonics]

You seem adamant about something that you clearly do not understand.

> Because if somebody can spend $1mln to perform 51% attack and move around $1bln, that will likely be done.

Then why hasn't it been done? The answer is that bitcoin doesn't even remotely work like this. You would have to sign a transaction, then double spend it to yourself, then BY CHANCE mine enough blocks to satisfy the person giving you whatever you are buying before they see the double spend.

That is not going to happen. Someone receiving a million dollars will not give over a briefcase of cash the second they see the transaction, and that's the only way something like this would work. If you are taking money out of an exchange, the exchange would never even credit your account, let alone send you money. They would see the double spend transaction and if by some chance (0.015625%) you managed to mine the next 6 blocks or so, they would just wait longer since there is a double spend out there. By the time they might actually send you money, the chances of you mining all the blocks up until that time is practically zero. So you would then be gambling your million dollars against enormous odds.

You might not want to believe that bitcoin works, and it might seem counter intuitive that the proof of work is important and useful, but this isn't about how you wish the world works, it is about how the world ACTUALLY works, and that is why bitcoin actually works.

[gritzko]

You are focusing on a single scenario of an individual double-spender. Why don't you consider some other scenario, e.g. a hacker getting control of a major BitCoin mining facility to disrupt things just for a laugh? I've seen a lot of that happening. There are tens of possible scenarios. Mining capacity is highly centralized these days and that trend will likely develop further (see the subj). The mental model of "one malicious node against all the honest nodes" is totally bogus.

So far, my observation is that BitCoin can't run cheaply on the reasons already mentioned. I will only buy your argument if you'll show me a graph of power consumption vs turnover and it will happen to be sub-linear.

[CyberDildonics]

If a miner gets hacked, then their blocks will go to the attacker, or they won't be mining. Blocks will be mined more slowly and transactions may take longer for the same number of confirmations until the miner comes back. If a bank gets hacked, people steal money enormous amounts of money by directly changing their ledgers. I don't see this as some sort of a loss for cryptocurrencies.

I'm not sure what you mean by turnover although you might want to learn more about bitcoin before you rail so hard against it.

[gritzko]

Turnover: the amount of business transacted during a given period of time. How much BitCoins change hands in a month, for example. Actually, plotting that in dollars is even more correct, as electricity costs are not paid with BitCoins.

Ultimately, that is a graph of dollars moved vs dollars wasted. (I explained the difference of "spent" and "wasted" in a different comment.)

[exo762]

> Because if somebody can spend $1mln to perform 51% attack and move around $1bln, that will likely be done.

This attack allows double spending and censorship. It does not allow to directly steal someone's BTC.

> Also, when a bank charges me 1% for a wire transfer, they pay salaries from that money and some people buy food.

And horses are pissed at cars.

> The power burnt by BitCoin is actually literally immediately irrecoverably physically wasted.

No, it is not. It buys security in a way which traditional banking is not capable of providing.

[BlackFly]

Actually that 1% normally will go to paying the electricity bills for the bank back end systems and the fraud analysis algorithms. On top of that they need to pay for fraud insurance. The power spent on bitcoin is not analogous to these costs, it is equivalent. The question is, is bitcoin more cost effective at preventing specific types of fraud?

[davidgerard]

Evidently not the types that actually happen in the Bitcoin space, all of which have as their root cause "no chargebacks": if someone picks your pocket from the other side of the planet, you have no recourse.

[CyberDildonics]

Like the president of Moldova who laundered a billion dollars out of the country?

[scotty79]

> Also, when a bank charges me 1% for a wire transfer, they pay salaries from that money and some people buy food.

So basically they are paying bunch of people to live and consume without doing anything useful. How much power wasted is that? How do you know how much wasted day of human life costs?

[gritzko]

I just had some issues with my Dutch bank because they totally switch to the model of "mobile client + internet + paper letter once a year". They deprecate walk-in procedures. They close branches. I did not visit them for 5 years and I would not visit them for another 5, but something happened, so I had to.

My Russian bank is mobile+internet from day 1. They have no branches. They don't even have their own ATMs.

I am not sure what is the current trend in US, but my personal experience certainly contradicts your thesis.

[scotty79]

My thesis was "if the banks use 1% to pay salaries to their employees doesn't mean it's not a loss"

Maybe you meant the thesis I was responding to that banks use 1% to pay salaries.

[gritzko]

My point is: banks are not driving around trucks full of gold bars (like some other commenter suggested). These days, it is mostly electrons moving. They also minimize the number of people involved. I believe, the remaining people are doing something useful. Like answering my calls and investigating incidents, for example.