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Comment by tlb | Hacker News Reader

Previously debunked: the actual number is 1 or 2 orders of magnitude lower. https://news.ycombinator.com/item?id=6829860

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I was curious so here's my napkin calculations:

Assume a block erupter is the base level to get into mining now. The network hash rate right now is 6,751,767.65 GH/s. Let's round to 6,600,000GH/s. Block erupters are 330MH/s and take 2.5w. The network would need 20m of them. That would be 50MW, or 1,200MWh / day. PG&E charges me $0.15 per kWh. So running the network would be $180,000 / day.

Yeah there's a lot of assumptions in there, but that's nowhere near $15m.

Isn't that still very expensive?

Well that's a very subjective question. Compared to keeping an ounce of gold under your mattress, yes. Compared to Western Union's daily operating costs, no.

It should be, otherwise it would be easy to attack the network

The natural equilibrium is where it costs a little less than $1 to make $1 worth of bitcoin. The system isn't quite at equilibrium now because of price uncertainty and the lag time to order new mining equipment, but the invisible hand is working on it.

Keep in mind that the equilibrium is where the total cost to make $1 of bitcoin is $1 -- not where the electricity cost is $1. The relative weight of electricity vs. amortized hardware cost will vary, of course.

If you're doing accounting (backward-looking financial reporting) you should look at amortised cost. If, on the other hand, you're making a decision about whether or not to mine, then you care only about marginal (cash) costs.

If you already paid for your hardware (or already committed to paying for it), then there's zero additional cost, unless (i) there are significant maintenance costs or, more likely (ii) you could recoup some of the cash by selling the equipment if you stop mining. I'm ignoring time value of money, and also the drop in the resale value of the equipment. (Deliberately avoiding the work 'depreciation' here as the accounting meaning the every day meaning confuse the issue.)

This is going to be interesting since the volatility of bitcoin price in USD is so high. If you have +15% one day and -30% two days after, this completely destroys your forecast if and when mining is still profitable.

A Block Eruptor ASIC (BE100) uses 10W/GH/s, a newer chip like Bitfury uses 0.9W/GW/s, the Block Eruptor 2 chip uses less than 0.2W/GH/s. It's decreasing rapidly.

if its about $150K a day - let's compare that to other world-wide power wasters:

- Old type base load power stations run with coal or other fossil, nuclear e.a. 24h/day but only contributing energy a few days a month (high estimate). IMHO they are only running because it's such a great business for the large power supplier conglomerates (otherwise they would have long replaced them with more efficient, quick starting solutions) - rough guess 2-3 are wasting comparable electric energy per day and there are 1000+ of those power stations around the globe.

- 100M+ people having their office computer(s) running at least 8h/5days-week but rarely using them or using computers 10-20 times more powerful than their applications are requiring. Alternative approach - using operating systems that require the latest, high powerful computers just to display some glossy windows, but are solely used for text processing e.a. - rough guess 3-5M of those equal to the amount of energy used for BitCoin production.

with these two examples alone you already have at least 400-500 times the energy used for BitCoin production each day just puffing away into hot air and I'm sure there are plenty more examples available.

We are wasting energy (and depleting limited resources) on a very large scale every day and only because it's such a great business today (not calculated at true cost) seemingly nobody needs to care about tomorrow.

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