Need Mathematical Help. Mining Costs.
I’m bantering amiably with a user in regards to a post I made earlier.
That post here: https://steemit.com/bitcoin/@pawsdog/is-bitcoin-really-decentralized-or-are-we-being-led-like-lambs-to-the-slaughter
In doing so I started doing the math on mining costs. I’ll just excerpt my response.
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"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 that 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 BTC price appreciation the miners are fucked. I did this in a hurry so correct me if my math is wrong...
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Is this making sense or am I way out in left field here?
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STOPAlso forgetting thing's like where blockchain could go, power security or the mid to longterm viability of www, it is the FIRST time we have something on the net that could last forever, from an economic stand point people can do irrational thing's for collectables....Look at baseball card's.
Not just the economic face value but psychological, sociological and emotional value are all factor's.
But yes, it's a crap system, as it sit's now.
Baseball cards are a bad analogy if you are trying to promote the long term popularity the of the coin. They pretty much fizzled out in the early 90's...lol... but you are right people will do dumb shit for collectibles.
Thank you for getting the real point, now I get why I like your post's so much.
I'm not promoting anything just trying to sift threw the bullshit of the internet to get a clearer idea of where the world is heading.
Even if it fall's on it's ass it might still hold an emotional value for a while to the upper middle class who keep up with the Jone's. Just another option to watch out for.
:)