Quote (balrog66 @ Oct 25 2017 10:17am)
Bitcoin is already requiring the energy production of a small country (Ecuador). Annual electricity consumption of 22.71 TWh. That's no joke and in no way sustainable, especially as complexity keeps increasing.
To put the energy consumed by the Bitcoin network into perspective we can compare it to another payment system like VISA for example. Even though the available information on VISA’s energy consumption is limited, we can establish that the data centers that process VISA’s transactions consume energy equal to that of 50,000 U.S. households. We also know VISA processed 82.3 billion transactions in 2016. With the help of these numbers, it is possible to compare both networks and show that Bitcoin is extremely more energy intensive per transaction than VISA.
https://digiconomist.net/bitcoin-energy-consumptionTo be fair, the mining energy consumption has nothing to do with the design of the system itself. In theory, you could operate the network just as efficiently with a single Dell running in some mom's basement (from a computational power standpoint without considering network traffic, security, proof of work, outages, etc). The mining difficulty scales up and down to keep the rate of new blocks constant, so the number of miners (and their energy consumption) is determined by economic factors. As long as it remains profitable to convert electricity into bitcoin, people will keep doing it, but the system balances itself. As more people start mining complexity increases and makes it less profitable to mine, so some people stop mining. You end up reaching an equilibrium for any given price of bitcoin and kWh, regardless of how many people are actually using the system to pay. The only exception is bounties, since more users means more transaction bounty, which would increase the value of mining beyond just the value of the block bitcoin reward and bring in some more miners.
You could argue that it's not good for the world as a whole that we are burning energy on this, but if that's the angle then you have much bigger fish to fry. For example, we could walk and use bicycles instead of driving cars. In the US alone, the annual energy cost of gasoline in 2012 was about 1,100 TWh (source:
http://www.slate.com/blogs/quora/2014/05/02/electric_vehicles_how_much_energy_would_we_need_to_fuel_them.html). USA is responsible for about 40% of the world's gasoline consumption, so we can estimate the annual global cost at about 2,500 TWh.
And of course bitcoin is NOT a safe investment by any means. Most of the value is still speculation, and it's very volatile. A completely unpredictable event, like a newly found exploit being used to steal a large sum, could easily crash the value. There may also be significant technological advances that give a competing currency enough of an advantage to take over as the go-to crypto, causing bitcoin's value to decline over time as people abandon it. Something like Ethereum, for example. The blockchain technology will almost certainly thrive, but not necessarily in the current incarnation.
Quote (datajunky @ Oct 25 2017 09:19pm)
That's proof of work. Just another reason why it's a better store of value than anything we've ever encountered. The cost may be high but the value must be preserved and protected properly.
The energy put into bitcoin mining is completely wasted, it has no actual value on its own. You can't recover it to do useful work, so what you said makes no sense. By your logic, investing in incandescent bulbs is a great idea because they burn a shitload of energy.
This post was edited by russian on Oct 27 2017 12:24pm