[brockers]

Why the obsession about energy consumption from mining bitcoin? It is because many people still consider it imaginary or non-productive? It is because, unlike many other markets, it is fairly straightforward to find upper and lower bounds for consumption?

[danmg]

Well, if this sort of system is going to be the future of finance, isn't the environmental impact of it something we should consider? Especially, when we hear about old inefficient power pants coming back on-line to fulfill the new demand created by cryptocurrencies.

Edit: Don't the mining costs basically exponentially increase as the supply of bitcoin runs out as it's an exponential decay? Being bounded by an exponential function isn't a good sign.

[TangoTrotFox]

In response to your edit, no. There is no set cost to mine a bitcoin. Energy is expended in trying to solve the problems the generate bitcoins. Once bitcoins run out, this is still true as instead of directly creating new bitcoins, miners will still be rewarded with the transaction fees connected to whatever block they main.

The difficulty of solving a problem to generate coins is dynamically and automatically adjusted such that it takes about 10 minutes. What this means is that if you had a total of 800 nuclear reactors dedicated to exclusively powering ASIC systems to mine Bitcoins it'd take, on average, just as long as it would if your total electricity consumption was the equivalent of one guy running a low power laptop using a hand crank or bike generator.

So all the electricity consumption represents is demand. As demand increases for bitcoin, so does this price. When the price goes up this means you can afford to pay more for electricity and still show a profit. When demand goes down for bitcoin you need to pay less and less for electricity to maintain profitability.

What will happen when no new coins are being generated is that the reward for each block mined will decrease. This will mean you receive less money for mining a block and thus can not afford to pay as much for energy and remain profitable. The net effect being that we'll see a decline in energy usage as miners running on thinner margins are pushed out of profitability.

The dynamic balancing is actually quite a clever design.

[sf_rob]

Minting of new coins is an exponential decay (hence the mining metaphor, gold becomes rarer to find as mining continues). There's also transaction fees which are based on supply/demand for blockchain operations.

[maxerickson]

I think people looking into it doesn't necessarily rise to the level of obsession. The incentive here was likely to publish something (rather than an emotional attachment to some aspect of bitcoin).

That Bitcoin are probably little more than coal-fired Beanie Babies likely does contribute to message board attention.

[mkirklions]

Beanie Babies can be reverse engineered and replicated.

Bitcoin cannot generate copycat coins(on the BTC blockchain). They are rare numbers.

[SlowRobotAhead]

That’s true. But like beanie babies they only have value people want to believe.

Bitcoin is not fiat, it’s a commodity. It’s not decentralized at all and there are a handful of people thus could destroy it at any time.

Sounds a lot like beanie babies the more I think about it.

[TangoTrotFox]

Everything only has value that people assign it. I think paying some thousands of dollars for a handbag that has a certain label, or paying $1000 for a phone with a certain label, or so on is completely irrational. But in a market economy, I don't get to decide - the market does. And there's no irony using dollars in that example, as once again they face the same problem. The value of a dollar changes quite regularly against other currencies and it's just a market supply:demand reaction. Should the petrodollar end, I'd expect to see the dollar plummet globally. Great for our exports if our economy doesn't go down alongside the dollar!

51% attacks in Bitcoin are not a real risk for two reasons. The first is that it'd be completely illogical. If there were a group of miners able to work together to generate the resources sufficient to obtain a 51% attack on a major coin, they'd already be printing massive amounts of money completely legitimately. If they started trying to use that to do things like double spend, that'd ruin all of this because of the second point.

Bitcoin is decentralized. And if one branch becomes broken because of something like a 51% attack, it is trivial to fork it and go. Bitcoin Cash being the obvious example of this, and that was over something that lacked a unanimous consensus - nobody is going to want to stay on a fork that's been compromised.

[mkirklions]

>It’s not decentralized at all and there are a handful of people thus could destroy it at any time.

Uh you might want to check that.

[haikuginger]

The three largest pools combined hold over 50% of the total hashing power, and all are based in China.

[mkirklions]

Thats the mining pool though. You can join those pools from anywhere.

[SlowRobotAhead]

Ok, wink, because the blockchain I’ll play along and pretend there aren’t at least 12 people that could crash the entire thing one way or another if they wanted to.

[maxerickson]

They aren't even rare numbers, they are entries in a ledger.

There's no technical limitation on how many bitcoin can be produced either, only the network consensus that a limited number will be produced. It's built into the software and unlikely to change, but it isn't fundamental, it's part of the consensus.

[mkirklions]

>There's no technical limitation on how many bitcoin can be produced either, only the network consensus that a limited number will be produced.

Yeah but then you need to start saying things like:

Well Walmart MIGHT start building tanks. Its unlikely to happen, but it isnt fundamental, its part of business.

[tgb]

No, it's not because people consider it imaginary or non-productive: it's because they consider it insufficiently productive for what it costs the globe and that the rewards are obviously localized while the costs are global.

[freeloop10]

It's quite a gimmick imo. The amount spent has no basis in what is needed, but simply chosen by multiplication of the guesswork of a person several years ago by the chaotic swings of the market.

It's also quite inefficient and even if it was chosen with some rationale basis, the idea of burning energy for years in the hope of providing a high enough bar to prevent a single tsunami of effort over the a brief period of time, less than a few hours and only required to match it, is one of the dumbest security ideas I've ever heard.

I'm not against cryptocurrency, not do I think it will fail in concept, but I very much hope that PoS proves viable and will succeed this utter waste.

[epmaybe]

I think it's interesting because it allows you to quantify the impact of Bitcoin mining on energy consumption. What would we do with our resources if this was not a viable way to produce wealth? With the continuing decline of natural resources in the world, it's worth seeing what we as humans do with these resources from an academic perspective.

Also, I imagine a lot of people do indeed think that Bitcoin is imaginary or nonproductive. Arstechnica makes money off of readers viewing their articles, so content that validates an opinion or strikes controversy generally does well.

[granshaw]

You’re being down voted, but this was a useful comment for me. Made me realize that there’s plenty of energy being spent to mine and handle other commodities too, e.g. gold.

[Cthulhu_]

Gold is generally a one-time investment though - you could smelt it into a bar at a high initial energy cost, but after that, transferring it is free. As opposed to BTC which apparently costs 300 KWh per transaction.

[jacquesm]

> you could smelt it into a bar at a high initial energy cost, but after that, transferring it is free.

How is it free after the initial smelting to transfer?

Moving physical gold around is very expensive.

[granshaw]

Exactly. Plus you need to factor in the exploration, mining, and extraction costs too

[1337biz]

Because it brings people together. Crypto bashers meets Sustainability preachers. Just connect two popular sub-trends and you are golden!

[SlowRobotAhead]

I have no real opinion on crypto except that like everyone else I’m mad I didn’t buy bitcoin st $5, and am far from an “environmental preacher” -

I only enjoy the irony that some people will go from posting about climate change and go right over checking their bitcoin value.