But that is limited by the block reward. Right now, solving a block is worth around $100k in the form of the Bitcoin reward. So, it's worth it for miners to spend $90k in hardware and electricity to mine a block.
The difficulty is NOT designed to rise. The difficulty is designed to adjust to the mining capacity. As prices go up, the reward goes up, the mining capacity goes up, and the difficulty goes up.
But the reward is designed to phase out. So, every four years or so, the reward gets cut in half, and so miners will only spend half as much trying to mine.
Under current network usage, electricity use can be expected to drop to about 10% of what it is today. That's because in addition to $100k reward, the miner earns about $12k in transaction fees, and those fees will continue.
But we can also expect fees to drop as capacity is improved. It's reasonable to expect to see fees drop from their current price of about $5 to something less than a dollar. So, we should actually expect the mature network - all other things being equal - to consume only 1-3% of the electricity it does today.
Until the block reward disappears, we can expect electricity use to be driven by price, but tempered by the reward cuts.
No, most mining equipment is not consumers operating out of their homes. Almost no one can make a rig efficient enough for that to be anywhere near cost effective. Mining is concentrated in data centers, oftentimes bootstrapped by consumers leasing mining equipment that resides on premises at the data center.
So, your argument is buyers are dumb because they think the price will go up. You're smart, but you won't short it because you think the price will go up. Hmmm...
But the argument against Bitcoin being enery efficient is based on energy use per transaction. If blocks start getting more transactions, that drives the energy per transaction down assuming no price movements.
Right now there are 2500 transactions per block (and rising) and an average fee of around $5. On top of that is a 6.5 BTC reward. That puts the cost of the transactions at $12,500 and the cost of mining around $100,000. So, without anything else changing, we can expect the energy consumption to drop to 10% of what it is today.
Now, more transactions per block means more transaction reward to miners per block. But the fees people are willing to pay will go down because the more transactional volume the chain can handle, the less scarce is the resoure of confirmation, and so the less valuable, and so one would exect highter transaction volume to lead to lower fees. So, even that 10% consumption is at the high end.
They move it into dollars because dollars are fungible and liquid. The price stability is a bonus, to those with a crashing national currency, the price is rising. Bitcoin just rises quicker.
That's actually baked in to the original protocol. Right now mining gets you transaction fees plus a reward of something like 6.5 Bitcoins (worth about $90k). As the network ages, the Bitcoin reward disappears, so the cost to mine a block will drop by about $90k in the long run.
No one really sells operating systems to consumers, via subscription or otherwise. MS sells OEM licenses. Apple sells computers with free OS upgrades. Linux vendors sell support. No one is paying fees to subscribe to OS releases.
That's not accurate. Mining power accelerates to meet price demand (the more demand, the higher price, the more miners are willing to spend mining). But price demand is affected by the mining reward (currently 6.25 or 12.5 BTC). As the mining reward is scheduled to disappear sometime in the 23rd century, the only reward will be transaction fees. So unless BTC spenders are willing to pay considerably more transaction fees than they already do, the miners will spend commensurately little on power.
I don't think anything like a systemic critical mass of people have been buying BTC on leverage. People buy BTC with credit cards, sure, but that's just because that's how people buy everything. The rumblings of a leveraged BTC collapse are probably specious. Every step of the way, everyone and everything is warning you that BTC prices can crash at any moment. Not too many people have the balls to risk their house on something like that.
30 years ago, people thought of real estate and telecoms as a safe investment. No one has ever thought of BTC that way.
I think the entire sentiment of "it's rising, so no one will spend" is overblown. I spend BTC most when it's rising towards what I expect to be a peak or crash. It's a cheap and easy way to take a bit of profit without bothering to move BTC onto an exchange. When it's stable, I'm more likely hodling for the future or completely divested.
Yesterday, we saw the first successful test of the Lightning network built on top of Bitcoin. This layer largely addresses the transaction price and scaling issues. I wouldn't be surprised if that's the news that kicked off this rally acceleration.
The irony of Google telling us we need net neutrality. Isn't this almost exactly what Google is saying internet providers should be forbidden from doing?
Slashdot Mirror
But that is limited by the block reward. Right now, solving a block is worth around $100k in the form of the Bitcoin reward. So, it's worth it for miners to spend $90k in hardware and electricity to mine a block.
The difficulty is NOT designed to rise. The difficulty is designed to adjust to the mining capacity. As prices go up, the reward goes up, the mining capacity goes up, and the difficulty goes up.
But the reward is designed to phase out. So, every four years or so, the reward gets cut in half, and so miners will only spend half as much trying to mine.
Under current network usage, electricity use can be expected to drop to about 10% of what it is today. That's because in addition to $100k reward, the miner earns about $12k in transaction fees, and those fees will continue.
But we can also expect fees to drop as capacity is improved. It's reasonable to expect to see fees drop from their current price of about $5 to something less than a dollar. So, we should actually expect the mature network - all other things being equal - to consume only 1-3% of the electricity it does today.
Until the block reward disappears, we can expect electricity use to be driven by price, but tempered by the reward cuts.
No, most mining equipment is not consumers operating out of their homes. Almost no one can make a rig efficient enough for that to be anywhere near cost effective. Mining is concentrated in data centers, oftentimes bootstrapped by consumers leasing mining equipment that resides on premises at the data center.
So, your argument is buyers are dumb because they think the price will go up. You're smart, but you won't short it because you think the price will go up. Hmmm...
But the argument against Bitcoin being enery efficient is based on energy use per transaction. If blocks start getting more transactions, that drives the energy per transaction down assuming no price movements.
Right now there are 2500 transactions per block (and rising) and an average fee of around $5. On top of that is a 6.5 BTC reward. That puts the cost of the transactions at $12,500 and the cost of mining around $100,000. So, without anything else changing, we can expect the energy consumption to drop to 10% of what it is today.
Now, more transactions per block means more transaction reward to miners per block. But the fees people are willing to pay will go down because the more transactional volume the chain can handle, the less scarce is the resoure of confirmation, and so the less valuable, and so one would exect highter transaction volume to lead to lower fees. So, even that 10% consumption is at the high end.
I appreciate that. I sold them to you, then took your money to buy at $11k.
That's completely false.
They move it into dollars because dollars are fungible and liquid. The price stability is a bonus, to those with a crashing national currency, the price is rising. Bitcoin just rises quicker.
Which exactly describes how Bitcoin exchanges work. Congratulations.
That's actually baked in to the original protocol. Right now mining gets you transaction fees plus a reward of something like 6.5 Bitcoins (worth about $90k). As the network ages, the Bitcoin reward disappears, so the cost to mine a block will drop by about $90k in the long run.
No one really sells operating systems to consumers, via subscription or otherwise. MS sells OEM licenses. Apple sells computers with free OS upgrades. Linux vendors sell support. No one is paying fees to subscribe to OS releases.
What does that say about all the Eurasian adults who let the children tell them what to do?
And where do you think the increase in price came from that led to people buying in?
That's not accurate. Mining power accelerates to meet price demand (the more demand, the higher price, the more miners are willing to spend mining). But price demand is affected by the mining reward (currently 6.25 or 12.5 BTC). As the mining reward is scheduled to disappear sometime in the 23rd century, the only reward will be transaction fees. So unless BTC spenders are willing to pay considerably more transaction fees than they already do, the miners will spend commensurately little on power.
I think I just had an acid flashback.
I don't think anything like a systemic critical mass of people have been buying BTC on leverage. People buy BTC with credit cards, sure, but that's just because that's how people buy everything. The rumblings of a leveraged BTC collapse are probably specious. Every step of the way, everyone and everything is warning you that BTC prices can crash at any moment. Not too many people have the balls to risk their house on something like that.
30 years ago, people thought of real estate and telecoms as a safe investment. No one has ever thought of BTC that way.
I think the entire sentiment of "it's rising, so no one will spend" is overblown. I spend BTC most when it's rising towards what I expect to be a peak or crash. It's a cheap and easy way to take a bit of profit without bothering to move BTC onto an exchange. When it's stable, I'm more likely hodling for the future or completely divested.
No there isn't. Businesses mostly use payment gateways that sell the BTC immediately. There's no risk of price fluctuation to the business.
Yesterday, we saw the first successful test of the Lightning network built on top of Bitcoin. This layer largely addresses the transaction price and scaling issues. I wouldn't be surprised if that's the news that kicked off this rally acceleration.
What are those other methods? Burning fossil fuels? Do we all have to move to geothermal areas for your plan?
You're building an international payment platform. That's real work.
And I don't want the algorithms for security to be compromised by a secondary purpose.
The irony of Google telling us we need net neutrality. Isn't this almost exactly what Google is saying internet providers should be forbidden from doing?
You know GMOs are safe right? Or are you a gene denier?
Journalists pushing ads are far more valuable than traditional advertising. Traditional (Internet) advertising is super cheap.
Just like you can on Android. Users have to make smart choices.
I use MessageEase. The only permission it asks for is "Record Audio" so it can perform voice typing.