> First - clearly reducing the environmental impact of anything by this much is pro-humanity.
How long until BTC follows suit?
How long until BTC follows suit?
If I have to make a bet, though, I think that what will happen is that financial institutions will start pushing for the idea of wrapping BTC on the Ethereum blockchain, and once it reaches a certain threshold (let's say 80%) they will campaign to drop the bitcoin PoW altogether.
But this is a conversation that bitcoiners are not ready to have, yet.
[0] https://ethresear.ch/t/trustless-bitcoin-bridge-creation-wit...
The energy consumption has always been a red herring. Everything consumes energy. Humanity's goal is to optimise energy generation and make it as green as possible, not reduce total energy usage to zero. That's just an idiotic proposition. The problem has never been "Bitcoin draws too much power", the problem is "we need more energy generation, and cheaper, and possibly not from fossil fuels."
But it certainly doesn't fit on a slogan.
Imagine governments putting a tax on fossil fuels. Bam! coal and petrol cheap energy is non-viable anymore, you'll see Bitcoin miners building solar and wind plants to power their operation. And along with them the rest of the world.
It's easier for politicians and keyboard warriors to blame climate change on Bitcoin than actually moving to a greener world by making fossil fuels unprofitable.
The extra consumption angle doesn't make any sense for an ultra technologic world, that only 1/4th of the world populace has access. Bitcoin or not, energy usage will be ramping up, especially if we want to create a fairer world. The only way to reduce energy usage is to stop being a technological civilisation, or give access to electricity to fewer and fewer people.
You can bridge bitcoin to another chain with faster finality, smart contracts, and environmental consensus.
But at the end if the day there will still be a huge amount of people who will never deviate from the core ideology.
The idea behind PoW was to decentralize proofs by allowing anyone to participate. This is a valuable property in a cryptocurrency. Bitcoin's implementation utterly failed in that regard. There are better projects out there, like Monero, but Bitcoin just refuses to die.
So if BTC uses an Argentina's worth of energy now, if the value of BTC grew 10X it would have to use on the order of 10 Argentina's worth of electricity. Obviously, that is not sustainable, and it ensures BTC can never grow in value too much if it sticks with PoW.
Perhaps if a 51% attack let you fully steal coins yes. But there are only specific things a 51% attacker can do, and even attempting to pull off the attack has game-theoretic impact on the price if Bitcoin.
The more practical attacks are greedy miner type attacks which just boost a large miners win rate.
The 51%-esque chain rewriting, double-spending and transaction censorship stuff is a different story.
What you can definitely say is that economically the profitability of the block reward and transaction fees will drive new entrants into mining. As BTC price increases the willingness to spend more on mining (wasting electricity) increases. But the block reward also halves now and then to reduce the value of new blocks and prevent the waste from getting absurdly out of hand.
I’m confused. Why must this be the case and how would it lead to a 51% attack if it were not?
I know the difficult goes up when the price goes up because more people are able to mine profitably and the system will automatically scale the difficulty to maintain the 1 block per 10 minutes rate, but I don’t understand what the difficultly being proportional to value has to do with 51% attacks being feasible.
2. First of all, this means that (eventually) the amount of electricity spent on mining is proportional to the total rewards earned (again, block rewards PLUS fees). So if the value of BTC goes up, it's a classic arbitrage play - miners would spend more electricity to win the more valuable rewards. Of course, everyone with the capacity would do this, until the difficulty level is set at a higher level.
3. Similarly, the value to be gained from a nefarious mining attack is proportional to the total value of BTC, so the difficulty must increase to keep a 51% from being feasible.
The fact that electricity spend absolutely must be proportional (over time, there can be short term imbalances before they are arbitraged away) to total value of the coins in a PoW system is a fundamental, undeniable fact. It is simply how PoW works. Yet I still am amazed how many BTC fan boys try to wave this away.
This doesn't limit the potential growth of Bitcoin, it only puts an upper bound on the security per block.
And this is by design, as the only way to mint a new bitcoin is to throw away computational power (ie energy -> money). And the amount of power needing to be wasted is constantly adjusted by the network (it's targeting a certain amount of blocks / hour, adjusting the difficulty of the sha bruteforce, compensating for technological improvement).
Now, to create a bitcoin you need to mine a block (solving the bruteforce), inherently requiring a set (on average) amount of real world value (mostly energy) to be irrevocably wasted. For the miners to recoup those losses, they MUST sell the bitcoin they just created for at least their lost value. Which in turn, guarantee the minimum value of each bitcoin.
And with this system, the minimum value of each bitcoin is inversely equal to the amount of value "wasted".
Claiming that PoW cost gives BTC its value is bonkers.
I wonder if there's a graph anywhere showing the value of 1 BTC in kWh.
You have causation reversed here. It is not that bitcoin would not sell/be worth less than the amount to mine it.
Instead, it is that it wouldn't be mined if it were worth less than the cost to mine it.
At which point, miners would drop out, and the cost to mine it would reduce, as the difficulty goes down.
> Meaning even if the value drops at exchanges, no miner will sell below this value due to not breaking even on electricity.
It does not work like that. If you need to pay your bills you will sell BTC for whatever price it is right now. Unless you want to long BTC, but that's a different story.
Heat causes chips and other components to degrade, so not everyone runs their miners at maximum output all the time.
the process generally creates some CO2, rerouting that energy on flare gas sites into power for miners, but thats much less worse than methane, and we can’t let a sustainability goal of perfect be the enemy of good