| Energy use is proportional to the revenues gained from mining. Revenues are based on the block coinbase reward and transaction fees from transactions (txns) included in the block. The coinbase reward is currently a large majority of mining revenue, but this will decrease over time according to the coinbase halving schedule every ~4 years. Since block capacity is arbitrarily limited to 1MB, txn throughput is limited. Therefore, all txns contribute to txn fee competition. There is a transaction fee market where users must outbid each other to ensure their txns are incorporated into the blockchain in a timely manner. The net effect is that txn demand does contribute to mining rewards and ultimately the energy used for mining. But it is a very small effect at present: * Txn fee competition only rarely kicks in. The network operates most of the time without substantial mempool backlog. https://jochen-hoenicke.de/queue/#0,6m This does change with market activity, and we are certainly looking at more txn fees overall in the future. * Coinbase rewards dominate mining revenues, so the effect is proportionally small. As these rewards decrease in the future, txn effects will have bigger effects. The upshot of all of this is a shift into a 'mature' paradigm of blockchain security funding. It's a pretty big shift and easily the biggest unknown in the future of Bitcoin. More and more, the focus will be on scaling and whether the opposing goals of affordable transactions and miner revenue (and therefore network security) can be balanced. There are also interesting technical issues such as whether txn-fee dominated revenue will present new malicious actions. Namely, whether miners can withhold blocks to gain advantage, plaguing the network with reorgs and further centralizing mining. |