[jonathanaird]

It has no relation to transaction volume. It is related to the price of BTC and the block reward every 10 minutes. The higher the price, the more miners compete to find a block. Transaction volume can never increase because they have capped the block size at 1mb.

[627467]

> The higher the price, the more miners compete to find a block.

But only if it's profitable to miners coming in. Ultimately mining pressures miners into finding cheap sources of electricity. Yes, many just take advantage of subsidies (governmental or environmental) to lower their costs, but as mining difficulty and competition increases inefficient are kicked out.

[hntrader]

Good to know, appreciate the explanation. So these estimates that it uses about the same energy as Argentina are probably based on a rather old price and we could get to many multiples of that if the price keeps increasing?

[jonathanaird]

It also depends on the available market for asics. In bear markets, asics are very affordable as miners go out of business but the price can go up quite a lot in bull markets which affects the profitability of buying new machines.

[hntrader]

I wonder what the observed relationship is if we were to plot energy usage vs price over the last 3 years

[jonathanaird]

In case you’re interested the two bitcoin forks BCH and BSV have unlimited block size and so energy/transaction validated can scale very well. Eventually all forks will have to rely on transaction fees as the block reward has a halving schedule. If something like BSV succeeds the hash rate and thus energy consumption will be a complicated combination of transaction volume, and variable transaction fees. It will essentially be a race to the bottom to see who can provide the cheapest transactions while still being profitable. I think one should expect much higher energy efficiency than something like Visa just from pure scale and the intense competition.