I'm tired of the "Bitcoin will consume more power than the world" FUD

in bitcoin •  6 days ago

These articles keep popping up every once in a while about how bitcoin minning will consume more and more power until the world explodes....it ridiculous obviously. Finally an article came out talking some sense about the subject. The author did forget the fact that miners get exponentially more effecient every year. Below is the meat of the article. What do you guys think?

Source : https://arstechnica.com/tech-policy/2017/12/bitcoins-insane-energy-consumption-explained/

The Bitcoin network consumes massive amounts of energy

Bitcoin mining—the process that generates new bitcoins while maintaining the network's shared transaction ledger—is a >secretive global industry. No one knows exactly how much energy it consumes.

However, we can make some educated guesses. For starters, we know the industry's revenue: Bitcoin miners currently >generate 75 bitcoins per hour, which, at the current price of around $12,500 per bitcoin, translates to $937,500 per hour, >or more than $8 billion per year.

Moreover, the industry is highly competitive, and electricity is one of its biggest costs. So when the price of bitcoins rises, >we can expect miners to spend more and more on electricity until electricity costs are roughly on par with revenues.

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This is the methodology the Digiconomist website uses to estimate the Bitcoin network's energy consumption. It assumes >that the industry will spend 60 percent of its revenue on electricity and then extrapolates from the current bitcoin price >and prevailing electricity prices. It finds that the network is consuming energy at an annual rate of 32TWh.

It also assumes that the network takes time to adjust to big price increases like we've seen in recent days. This means >that, if Bitcoin stays above $12,000, we can expect this figure to rise further in the coming weeks.

Will the network's energy consumption continue to rise over the longer run? Under Bitcoin's current design, this depends >entirely on what happens to the price of Bitcoin. If Bitcoin's price doubles to $25,000, we can expect the Bitcoin network's >energy consumption to roughly double as well. If Bitcoin's price falls significantly, on the other hand, miners will find their >operations unprofitable and will start to switch off their least efficient equipment, causing energy use to decline.

Right now, Digiconomist estimates that Bitcoin is consuming less than 1 percent as much energy as the US economy. This >means that, for Bitcoin's energy consumption to exceed that of the United States, Bitcoin's price would have to rise by >roughly 100-fold to more than $1 million.

Could that happen before 2020? It doesn't seem likely. Of course, in early 2015, Bitcoin was worth only $200—hardly >anyone expected a 50-fold increase over the last two years. But here we are.

Bitcoin’s energy use should decline in the long run

There's a widespread misconception that Bitcoin mining is based on a mathematical process that gets steadily harder as >more and more bitcoins are produced.

That's wrong. The Bitcoin network is designed to automatically adjust the difficulty of mining to ensure that one block is >produced every 10 minutes, no matter how much (or how little) computing power there is on the network.

When Bitcoin launched in 2009, each block came with a 50-bitcoin reward for the miner who created it. This figure is >scheduled to fall by half every four years. It fell to 25 bitcoins in 2012 and 12.5 bitcoins in 2016. The reward will fall again >to 6.25 bitcoins in 2020. When the mining industry's revenue falls by half, its energy consumption should fall by the same >proportion, since, if it didn't fall, mining would become an unprofitable activity.

FURTHER READING
Bitcoin: Seven questions you were too embarrassed to ask
The reward halves again in 2024, in 2028, and every four years after that. So, if the price of bitcoins stabilizes, the Bitcoin >network's energy consumption will steadily fall over the coming decades.

Another important point: that fixed 12.5 bitcoin reward doesn't depend on the number of transactions the Bitcoin >network processes. Miners do also collect per-transaction fees from Bitcoin users, but those are currently much smaller >than the fixed per-block reward.

This means that the Bitcoin network could easily be upgraded to handle more transactions—potentially a lot more—>without significantly changing miner revenues or energy consumption. So it's not the case that a growing Bitcoin network >will necessarily lead to a growing environmental disaster.

On the other hand, growing use of the network could push up Bitcoin's price, which in turn would increase energy use.

Can we reduce Bitcoin’s energy use?

While Bitcoin may not be a total environmental disaster, the Earth would certainly be a greener place if the Bitcoin >network didn't consume so much electricity to process a relatively small number of transactions.

There are basically three ways this could happen. One way, as we've already discussed, is for Bitcoin's price to decline.

A second option would be to shrink the network's 12.5 bitcoin-per-block reward sooner than the scheduled 2020 >reduction. But that's easier said than done. Bitcoin mining companies are not going to go along with this willingly, and >Bitcoin traditionalists are likely to oppose such a move as well.

Governments may also be powerless here. If any one country tries to force a change, mining operations would simply flee >to another jurisdiction. Changing Bitcoin by regulatory fiat would require a coordinated global regulatory effort, which >doesn't seem likely to happen any time soon.

FURTHER READING
Bitcoin Gold, the latest Bitcoin fork, explained
A third option would be to change the Bitcoin mining process altogether. Bitcoin's current mining algorithm is based on >computing a supermassive number of cryptographic hash functions. But other cryptocurrencies have been exploring >alternatives. Bitcoin Gold is a recently created variant of Bitcoin that uses a "memory-hard" mining algorithm that might >prove to be less power hungry—though it would still consume huge amounts of juice. More exotic mining algorithms exist >that could dramatically reduce power consumption.

Switching to an alternative mining algorithm would also be controversial among traditionalists and would be strongly >opposed by miners. It would wipe out mining companies' multi-million dollar investments in custom mining hardware. >Such a step is not impossible, but it seems unlikely to happen any time soon.

All of which means that Bitcoin's power-hungry ways are unlikely to change any time soon.

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Its not a very effecient system, I prefer POS even though I'm a miner lol

the presumption is that energy usage is bad.

absurd.

we're converting excess, otherwise unused, energy into fungible, transmittable, secure value tokens that can be used to buy food, water, shelter, and clothing.

only a fool would say that's a negative.

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Me too! Yesterday, I read that BTC could use as much energy as the entire US in 2 years... The entire US...Lol. Do people check their sources sometimes...?

download.jpg

I have already written detailed analysis on this. It comes down to perspective. The total power consumed for Bitcoin mining is a matter of perspective. From the position of the miners, power consumption is outrageous as the network fees fail to cover the mining costs of the coin. Without the continual appreciation in price and block chain rewards the business model would be one destined for failure.

If you compare its power consumption to say that of the US, it's more like comparing the Great Lakes the the entirety of the worlds oceans and really is not that much at all. I read that the total power consumed by bitcoin mining is less than the power consumed by all devices in the US on standby. For in depth reading on the subject see the following two articles.

https://steemit.com/bitcoin/@pawsdog/is-bitcoin-really-decentralized-or-are-we-being-led-like-lambs-to-the-slaughter

https://steemit.com/bitcoin/@pawsdog/need-mathematical-help-mining-costs

Lastly as shameless self promotion read this one.

https://steemit.com/steemit/@pawsdog/steemit-quest-for-one-million-time-required-to-build-a-usd1-000-000-00-steemit-account

The question still remains about the future of bitcoin. Awesome post

Great post

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i agree with you my dear

So, do you think cryptocurrencies will be able to avoid government control forever? Given that China and the US are starting to grow more concerned about the anonymity Cryptos offer to the people.

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Yes, thats the whole point of being decentralized

coolio. and this was a great read. =)

The photo shows a bullish character. Quite bitcoin-like. Thanks!

All I know is, BTC fees are outrageous and it takes forever to process / confirm. Someone commented on government / central bank control. Check out NYSE.com. BTC is now on the front page.

I think the crash will come when markets open up in the exchanges for coins other than BTC or tether. Poloniex is getting there.

This post has received gratitude of 25.29 % from @appreciator thanks to: @brittuf.

I find it ironic that you don't like upvoting, but 90% of the content of this post is copied and pasted from another article.

POS will be the future. Bitcoin is junk to be fair. Expensive, slow, complicated and consumes an insane amount of electricity per transaction. Literally 99% of the altcoins are better than it.

INFORMATIVE POST ...............NICE CHOICE

thats a great news this time..thanks a lot for diacuss about bitcoin...

This post has received a 13.20 % upvote from @buildawhale thanks to: @brittuf. Send at least 1 SBD to @buildawhale with a post link in the memo field for a portion of the next vote.

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