Bitcoin on the rise

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Kriegsspiel
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Re: Bitcoin on the rise

Post by Kriegsspiel » Sun Mar 12, 2017 2:23 pm

https://motherboard.vice.com/en_us/arti ... ustainable

"Updated calculations with optimistic assumptions show that in a best-case hypothetical, each bitcoin transaction is backed by approximately 90 percent of an American household's daily average electricity consumption. So even though that's still about 3,994 times as energy-intensive as a credit card transaction, things could be getting better since 2015.

Unfortunately, it's more likely that things are getting worse. A new index has recently modeled potential energy costs per transaction as high as 94 kWh, or enough electricity to power 3.17 households for a day. To put it another way, that's almost enough energy to fully charge the battery of a Tesla Model S P100D, the world's quickest production car, and drive it over 300 miles."

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bryan
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Re: Bitcoin on the rise

Post by bryan » Sun Mar 12, 2017 4:47 pm

Yeah, proof-of-work tied into Bitcoin was great, years ago, but a future version will probably eliminate the unnecessary step of "work" and go straight to something like proof-of-capital or proof-of-capital-invested (e.g. proof-of-stake) or proof-of-burn or proof-of-identity (one person, one vote/chance).

For now, I am not worried about Bitcoin's energy costs (and I still believe it could have an interesting side-effect of encouraging newer forms of energies.. though the chip costs are more worrisome, to me, as they are very dependent on scale of semiconductor fabrication).

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Re: Bitcoin on the rise

Post by jacob » Sun Mar 12, 2017 7:17 pm

Wait what? If each transaction costs now 300 miles of driving in zombie electricity (what's that $25 of gas in the real world (outside SV)) ... surely that's going to impact the valuation of the "fancy transaction techmology" eventually even if it isn't presently clear to the bitcoin market participants. If bitcoin mainly serves as the equivalent of petrodollars in the [dark] economies that prefer to stay under the radar [in China], a $25 "Tobin Tax" for each transaction should materially and severely impact valuation, eventually.

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jennypenny
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Re: Bitcoin on the rise

Post by jennypenny » Sun Mar 12, 2017 7:30 pm

Bitcoin mining is a losing proposition in many places because of the energy costs. I think I read somewhere that bitcoin-related energy usage is equal to all of Denmark's usage.

I've been tempted to enter the bitcoin playing field for a couple of years, but environmental concerns have kept me on the sideline up to this point.

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BRUTE
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Re: Bitcoin on the rise

Post by BRUTE » Sun Mar 12, 2017 8:43 pm

does Bitcoin provide more marginal utility than Denmark?

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bryan
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Re: Bitcoin on the rise

Post by bryan » Sun Mar 12, 2017 9:02 pm

Indeed, site I shared elsewhere, http://digiconomist.net/beci, will give a good picture of energy usage.

Note the energy used per block is roughly the same whether there is a single transaction or maximum number of transactions (the statistic above is based on avg. number of transactions), assuming a not-so-volatile exchange rate. For me, looking at energy/transaction is a bit meh (why not just look at the actual transaction fee?). Energy sources will be those that make sense holistically. Mining is happening in China mostly due to all the chip manufacturing happening in China.

The end-game for Bitcoin was never that great or well thought out. The plan in the past/present was for transaction fees to be the primary revenue for miners. It doesn't make so much sense to me.. but ultimately Bitcoin has bootstrapped this entire new world of viable digital monies (and should then lead to the development of some revolutionary stuff).

Finally, this lack of scaling (and energy usage) from Bitcoin has been the primary criticism for a few years. Developers have dropped out because it wasn't fitting their intended use-cases (e.g. micro-transactions). For the most part, it seems systems will be built anchored to Bitcoin to accomplish some of this stuff (lightning network, teechain, counter-parties, drive-chain/side-chains), but it is disappointing Bitcoin itself wasn't able to work.

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theanimal
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Re: Bitcoin on the rise

Post by theanimal » Tue Mar 14, 2017 5:11 pm

EconTalk had a good episode recently discussing the use of bitcoin to combat hyperinflation in Venezuela. The government there heavily subsidizes electricity usage though, and that seems to be the only thing that allows it to work on a practical level.

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