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by bunderbunder
2881 days ago
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Nah, I'd say the waste is built into the Bitcoin design itself. The reward rate is relatively constant, since the protocol automatically scales the difficulty of completing a block to try and make it happen on about the same interval regardless of how many people are mining. And mining is also a zero-sum game. (Unlike in real-world mining.) This creates a completely wacky incentive structure where, instead of incentivizing producers to only expend enough resources to satisfy market demand, and no more, they're instead incentivized to expend as much energy as possible, at all times. It's like if there were a King who likes to buy cheeseburgers for $10,000 apiece, and he always buys the first cheeseburger he sees, but he considers any cheeseburger that is more than 1 second old to be spoiled. So then you end up with a market where people are furiously making cheeseburgers as fast as they can, and just littering them everywhere, in the hopes that one of the cheeseburgers they made happens to be the one that the King sees first whenever the urge for a snack strikes him. Meanwhile, the world is getting increasingly littered with spoiled, rotting cheeseburgers. |
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This is not entirely correct. You pointed out that the reward rate is relatively constant which limits the income of all miners combined to 1.25 Bitcoin/minute. They really can't be spending more then that on mining. That includes Hardware + Energy + Salaries + Offices + Warehouse. Any single miner is also only going to get a fraction of that 1.25 Bitcoin/minute and anyone spending more then what they get will find themselves with a deficit.
That is also just until ~May 2020 when the next Halving is going to occur. They have until then to figure out to decrease their spending on mining to be lower then 0.625 Bitcoin/minute.