You are viewing a single comment's thread from:
RE: Simple economics prove that Bitcoin will fail
If somebody wants to do their own calculations, here is how I did it.
How much of the world's electricity will be consumed by Bitcoin:
price of bitcoin ($/BTC)* block rewards per year (BTC) / (electricity consumption of the world per year (KWh) * price of electricity ($/KWh)) * how much of the block reward is used for electricity * 100
If we assume that price will go to one million per btc:
1,000,000 $/BTC * 657,000 BTC / (20,000 TWh * 0,05 $/KWh) * 0,8 * 100 = 52.56 % (Yeah, more than half of the world's electricity would go to bitcoin mining. Hard to see that ever happening.)
52.56% of the world's electricity is way off. Today the network uses as much electricity as an average sized city ( 300 000 homes). Even if more miners started to mine due to an increase in price the electricity used by the network will never be more than a large city like London or Paris.
Think about it this way... Replace Bitcoin with a company and mining with apples. So there is a company that is using money to buy apples.
Today the company is spending 1,750,000 dollars to buy apples from anybody who is willing to sell them to it.
If the price of company share goes up, it can afford to buy more apples. It can spend 50,000,000 dollars to buy apples.
Don't you think people would sell more apples to it?
This is the simple economic truth: people respond to incentives.
My bad, you are right. If the price was 1 million today with the current block rewards the consumption would be 52% that's correct. ( assuming miners respond to incentives)
The thing is that when we will be at 1 million per BTC the block reward would be a lot smaller than now, I don't see a million dollar bitcoin in the next 10 -20 years at least .
Mining is not selling. Bitcoin is not apples. They have a market cap, and you cant just make new bit coin like apples. There is a limit, and then the money is in the pool and at end goal allows people at home to make money for processing transaction that go on by the million a second. They do respond to real incentives, like how you posting gibberish on a web sight because they said they pay you.
Why are you dividing basically the moles of coins by the worlds electricity usage?? This equation has no validity.
Imagine I have a bunch of car prices and divided their cost by their mpg. Then divided by the gas consumption of the world times everyones gas price times how much of their gas goes to driving(so like it will always be all of it) I get one crazy number that means nothing.
"how much of the block reward is used for electricity"
um what...
First of all that relative to what your mining when with how much power in what pool at even what temp.
Second, everyone pays different amounts for electricity based on where it is consumed.
Third "20,000 TWh" where did you get this number?? I cant find anywhere that says a number that low. Thats like how much New York on a good day.
The estimated number is 157.5 PWh, https://en.wikipedia.org/wiki/World_energy_consumption