1/1000th of global energy production. Or the output of one nuclear power plant, or the same as all energy lost to friction for every car in the world. That really puts it into perspective.
Still, there is a fixed amount of hydro power available, short of building new dams. This puts Bitcoin's toll on fossil fuel.
(If Bitcoin didn't exist, the hydro power would still be there and would be used for something else, therefore less fossil fuel would have to be burned in its place.)
> If Bitcoin didn't exist, the hydro power would still be there and would be used for something else
That's not a good assumption. There are many power plants in China in the middle of nowhere unconnected to much. It's completely plausible that the entire bitcoin network could run on clean energy that otherwise couldn't be used for much else because it's too remote (geothermal in Greenland or something).
I hope we're not building hydro power plants for the sole purpose of supporting the Bitcoin network. The energy may be "clean", but these projects have their own impact on the surrounding ecosystem.
There's huge energy oversupply in Sichuan province, you can't just keep storing hydropower infinitely, it has to be released to protect the dams.
All this outrage is misguided, the market incentives mean miners go to where the cheapest power is, all the industrial scale mining is located next to large renewables sources in China, Pacific NW, Scandanvia/Iceland.
The largest ethereum mine in the world is 100% renewable.
I agree. I've been racking my brain on ways to connect proof of work to something useful (like folding proteins, general purpose distributed computing, etc.)
There's primecoin, which uses a proof of work based on finding a special kind of prime number, which (they claim) has use in the outside world, at least the academic one.
Generally, to have a useful PoW, it needs to meet some criteria:
1) Easily verifiable
2) Necessary work on the problem is easily quantifiable and estimable
3) Problem can be programmatically generated from random data.
One model might be NP-complete problems. Users feed in problem instances they want solved, with a bounty. You find out how many guesses it should take. A valid proof of work then requires solving enough such problems, combined, to exceed the difficulty threshold. (You'd also need to solve one based on the current known transaction history.)
The problem there is that it's hard to know if a given NP complete problem instance is "one of the hard ones" and to find such instances.
That's incorrect. All that matters is you can't game the system by taking shortcuts or deciding what the problem will be beforehand; the work cannot be even partially computable without knowing the previous block.
No, you are incorrect. The important aspect of proof of work is that it is very expensive to create an alternate history (maybe one where you didn't send $15,000,000 to the exchange, for example). If you are doing useful work, someone can pay for it, and you can use that payment to make an alternate history for free, defeating the security assumption of blockchains.
Blockchains only work by probably wasting in order to build a history. If you aren't wasting, then it wasn't expensive to build the history (it was subsidised), and it wouldn't be expensive to build a different history (that one could also be subsidized)
But "socially useful" does not imply saleable (to the bane of venture capitalists everywhere).
It's possible for something to provide a social benefit but not make sense for anyone to pay for as a for-profit business because others would get the same benefit and free ride off them. (Hence the problem of public goods in economics.)
So if the proof of work is only solving some general research problem, then it might not be feasible to double dip like you've described. That's why primecoin was able to avoid the problem.
There are very few things that are actually useful (socially or otherwise) but don't provide economic incentive. As pointed out by others primecoin isn't really a very good example. A good application to shoot for, if there are any budding cryptographers in the audience, is a ticking timelock encryption. A set of keys known in advance, and each block solves the next key. This would let you encrypt messages into the future, where the cost to decrypt is equal to the cost of minting that many blocks.
I've seen partial schemes for this, but no complete ones that would justify implementation. If a full and workable scheme could be devised, I would bet on it replacing sha256 based proof of work, eventually.
Every public goods problem is mathematical research is a case where the solutions are socially useful but not saleable. The problem (pointed out by the sibling) with primecoin was that it worked too well, such that further solutions were uninteresting and past the point of diminishing returns.
Edit: See my here for a model of how NP complete problems could fill the role of you could predict difficulty in advance. There wouldn't be double dipping because the person wanting the answer wouldn't pay both bounties.
Primecoin also ultimately had limited utility. It found the world's largest prime number thousands of times, continually beating it's own record. At some point we had more prime numbers than had mathematical utility.
My unprovable guess is that any other non-sellable problem will ultimately have the same outcome. It's interesting and useful for a bit, but when you have a billion dollars of hardware grinding nonstop for years in a row, you eventually exhaust everything interesting about the original problem and then it's back to the same waste you started with.
It doesn't matter if the work is profitable because you only need to create an alternate history for a few blocks.
If you attack the network you can steal billions - so if you have that much computing power available for your useful work, you can temporarially use it against the block chain.
As long as that mining power is available anywhere the chain isn't secure.
The energy expended is the security of the currency.
If a transaction is confirmed by 1 TWh of proof of work, that much energy is required to alter it, meanwhile the bitcoin network has expended even more energy.
It is still young, and the exponential growth in energy consumption is going to stop as an equilibrium is reached.
It's only a temporary situation. There's a lot of research going on into replacing "Proof of Work" blockchains with "Proof of Stake" which doesn't require any mining. Ethereum is likely to get Proof of Stake fairly soon. Bitcoin and other cryptocurrencies will likely follow if it works out.
That's a good point -- in earlier times slaves worked the mines to extract gold from raw earth. Gold was a good store of value because of its scarcity. Likewise, Bitcoin mines the electrical grid.
Are you arguing that using the electricity you paid for is immoral, or are you arguing that using slaves is not immoral as long as you use them for something good?
Slaves are unimportant to his point. Gold being scarce means it was hard to counterfeit gold coins in a time when you couldn't mint coins in a reliable way. Likewise, the purpose of bitcoin mining is to verify transactions in a way that is hard to counterfeit, making it more difficult to get a majority share of mining. The difficulty enforces scarcity.
This is completely true; miners will mine the coin that gives them the best ROI. If Bitcoin's value decreases without an equal decrease in difficulty, the whole thing could crash quite fast.
Energy doesn't back bitcoin, it just stops the currency from inflating. Or it would, if mining could always produce new bitcoins, but IIRC its supposed to stop after a while.
The difference being that a bitcoin does not entitle you to some unit of energy or work produced from it. The energy used to verify bitcoin transactions is just lost.
"backing" a currency usually refers to exchanging fiat money for a good with intrinsic value. That does not describe the relationship between bitcoin and electricity at all.
Energy ensures bitcoin's ownership, not its value (although it does impact its value indirectly).
The more energy Bitcoin network uses, the more valuable Bitcoins are... If Bitcoins value falls down, energy usage will fall down too. Energy is used to create valuable document - The Block. And block is not necessary new Bitcoins, its transactions too.
did you mean price will go up? either way it doesn't offset that high cost of use, so if humans here still value efficiency they might find it worthwhile to switch tools.
