Some things are very amenable to solving with technology. Other things are more amenable to solving with people. Only data will tell for sure.
Current estimated USD Transaction Volume is ~$70 Million per day[1], so the transaction fees needed to sustain the $150k per day electricity overhead would be ~0.2%.
All of the parameters in this calculation are in high flux of course (and we're not including total cost to mine here, just electricity), but when I've run this same calculation in the past at various times I've gotten similar results.
Note also that mining is profitable enough due to new coin creation that transaction fees in practice are much smaller than this for now (average ~0.01%), but coin creation will gradually taper off over the years.
1] http://blockchain.info/charts/estimated-transaction-volume-u...
While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust based model. Completely non-reversible transactions are not really possible, since financial institutions cannot avoid mediating disputes. The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions, and there is a broader cost in the loss of ability to make non reversible payments for nonreversible services. With the possibility of reversal, the need for trust spreads. Merchants must be wary of their customers, hassling them for more information than they would otherwise need. A certain percentage of fraud is accepted as unavoidable.
Doesn't this also impact the block chain in some way? A ton of small transactions can flood the chain, requiring more computational energy to be spent than the transactions are actually even worth.
http://www.reddit.com/r/Bitcoin/comments/1cc72b/the_maximum_...
"By convention, the first transaction in a block is a special transaction that starts a new coin owned by the creator of the block. This adds an incentive for nodes to support the network, and provides a way to initially distribute coins into circulation, since there is no central authority to issue them."
Only more efficient in that nobody's throwing lots of chunky GPUs at it.
But as far as bitcon presents it, proof of work is needed to resolve the problem of keeping a honest transaction log in an untrusted environment.
So that whole block (which is maybe what you're calling the "output"), does contain the puzzle solution as well as all the latest transactions. But the actual specifics of the puzzle (which is currently brute-force SHA1 reversing), aren't super important. It could always be swapped out for some other task.
You seem to be saying that The Miners have to verify transactions to claim their reward? When you say "which are all verified separately" - you mean verified by the same miner who publishes the block? If so then the bitcoin network as a whole benefits from their energy use.
On the other hand, I see your point that the make-work is not intrinsically linked to transaction verification. But my understanding is, its the difficulty of the make-work that protects the block-chain from being hijacked by ..er... 'the bad guys', whomever they may be.
So, the whole thing kinda makes sense, and the 'make-work' is like an energy commitment that keeps the whole thing integrated. The assumption being, the total commitment of all bitcoin users will always be greater than the commitment of any single attacker/attacker group.
1:http://en.wikipedia.org/wiki/Penny_(United_States_coin)#Meta...
- many countries have eliminated pennies - mining will have to continue even after "coins" aren't produced, to verify transactions.
It's more apt to measure power per transaction, against a traditional bank (or a handful of cash, amortized over it's life.) There was a good explain xkcd about the cost of carrying around physical money in your car.
That doesn't sound right - do you have a reference for that?