You are viewing a single comment's thread from:
RE: Is Bitcoin really decentralized, or are we being led like lambs to the slaughter?
i'm not buying the hype on the electrical costs. But I agree with your synopsis of the situation; at any time government can move to shut anything/anyone down.
I read an interesting article today where the author did some not very precise calculations to show that the total amount of electricity devoted to bitcoin mining is "less than 1% of all the electricity squandered by appliances and devices on stand-by" globally. If this is true, then all the talk about 'unsustainable' mining is nothing but the latest fud.
(i'll throw that link in here if you'd like, or you can duckduck Charles Hugh Smith Minimal Check Sensationalist Bitcoin and it should come up.
Found it... https://www.silverdoctors.com/headlines/world-news/charles-hugh-smith-crushes-the-bitcoin-uses-a-bunch-of-energy-meme/
"But then a few paragraphs down, we discover the electricity per transaction might only be 77 kWh– nobody really knows for sure. Hmm. 77 is 36% of 215, so the “shocking” consumption might overstate actual consumption by a factor of three?
Let’s choose a number between 77 and the “shocking” 215, since nobody really knows what the real number is: shall we guesstimate 135, or 2/3 of the high guesstimate? That would drop the annual consumption of bitcoin mining from 24 B kWh annually to 15 B kWh, less than 1% of the electricity wasted annually on stand-by devices doing no work whatsoever."
I think it is a matter of perspective. That said; if you were to divide the mining cost between all residents of the United States or base it on Power Consumed relative to the US it does look to be inconsequential.
In my article I'm not concerned with the planet, or the relative share of power usage BTC mining consumes proportionate to the nations of the earth or any other large metric.
I'm concerned with the power usage for mining relative to the businesses that operate it. Instead of comparing the Great Lakes ( 6 quadrillion gallons)-"Mining Power Consumption" to the Ocean (352 quintillion, gallons)-"US Power Grid", which makes them small. I'm comparing one of the Great lakes (mining costs) to the sum total of the five Great Lakes (mining industry).
That said even looking in that article I find this.. "consumption of bitcoin mining from 24 B kWh annually to 15 B kWh". A little more searching and it cost something like .08 cents per KWH in China. So if we do the math on that... 15,000,000,000 x .08 = $1,200,000,000 .00 (Low end) or 24,000,000,000 x .08 =$1,920,000,000.00 (High end) Dollars per year in electrical costs for mining, excluding labor, equipment costs etc. This price is born by the miners.
Which got me thinking... Whats the average transaction fee now? $5.00 I think.. Bitcoin can handle how many transactions per second? 7.. So lets math this shit out..
60 seconds in a minute, 60 minutes in and hour, 24 hours in a day, 365 days in a year = 31,526,000 seconds per year.
7 transactions each second = 220,682,000 transactions per year.
220,682,000 transactions per year x $5.00 = $1,103,410,000 US dollars in Transaction fees collected.
A figure that even at the low end is $100,000,000.00 (One hundred million dollars short) of the electrical costs spent to complete them. Herein is the paradox of diminishing returns. Without appreciation the miners are fucked. I did this in a hurry so correct me if my math is wrong...
I think I see. For the miner the electrical costs become prohibitive. My brother mines in Texas and that's pretty much what he says.
Headlines usually refer to 'sustainable' as having to do with the biological health of the planet, rather than the financial health of cryptominers. Hence the confusion the headlines were designed to generate.
That aside, I still think you hit the nail on its head in this article. At any time governments can step in and use their power.
Sure toss in the link..
Sure thing.
Charles Hugh Smith