Is Bitcoin the Next Big Thing?

[Edwin]

Incidentally, that means that Bitcoin uses about $100/Bitcoin/year of electricity. So if the price of Bitcoin dropped below $100 (I know, a long long way from here) then it would be loss-making on electricity alone.

The other snag is that although ASICs are getting more efficient at mining Bitcoin, the way the algorithm difficulty levels work means that over a fairly short period of time the Bitcoin network will "eat" any improvements. The better ASICs have to do more work, so they're quickly no more efficient than the old ones were. Meanwhile you've got millions and millions of dollars of hardware turning to scrap at a more-than-Moore's-law pace.

If only Bitcoin computations could be used for something useful instead, we'd have Godlike AI already. But SHA256 is a hyper-narrow use case, so the mining ASICs can't be repurposed for general use.

 

[dee]

If Bitcoin were a country, it would be the 61st greediest in the world in terms of power consumption...
https://hacked.com/power-consumption-for-bitcoin-mining-is-now-ranked-61st-in-the-world/

The Bitcoin network already uses over $1.6 billion worth of electricity a year...
https://digiconomist.net/bitcoin-energy-consumption

Wow. Pretty sure thats one of the reasons it pointless mining here anymore. You cant compete with places like China or Iceland where electricity is almost free and you have warehouses set up with ascic factories mining.

 

[Edwin]

Wow. Pretty sure thats one of the reasons it pointless mining here anymore. You cant compete with places like China or Iceland where electricity is almost free and you have warehouses set up with ascic factories mining.

That's why people who want to mine at home mine secondary cryptocurrencies (ones that are easier to mine) then convert them to BTC. There are plenty of mining difficulty calculators out there that compare the supposed profitability of different cryptocurrencies, but I won't link to any as they all make so many assumptions that you get a different answer every time. Safer to do your own in-depth research.

 

[mojoco]

Take a look at a serious bitcoin mining setup...

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[ausername]

Incidentally, that means that Bitcoin uses about $100/Bitcoin/year of electricity. So if the price of Bitcoin dropped below $100 (I know, a long long way from here) then it would be loss-making on electricity alone.

This doesn't sound quite right to me, because the energy is consumed validating transactions. The more transactions = the more energy consumed. Number of coins isn't relevant?

Whatever calculation is necessary to determine the price point + transaction ratio at which bitcoin becomes non-viable would require some sort of complex calculation which is way beyond my head and would probably require a Phd or at very least a red brick mathematics degree I suspect.

21 million bitcoins which are each transacted an average of 1000 times in a year consumes twice as much energy as 21 million bitcoins which are each transacted an average of 500 times per year (in the simplest possible back of fag packet terms?).

The yield of 'Mining' is partly transaction fees, and will eventually be entirely transaction fees. So the comparison of yield vs cost will be yield of transaction fees vs electricity cost to validate transactions.

A bitcoin worth $100 could be transacted 5, 50, 1000, 10000 times in a year. Each time the miner taking a % of the coin. So goes way beyond the value of the coin to purchase, when taken in isolation.

E.g if Bitcoins price is $10,000 but only 10 million transactions per year, then that would yield less to all miners in total in terms of both BTC and $ value than a Bitcoin price of $1,000 but with 1 billion transactions per year?

 

[martin-s]

200 kWh costs about £40 in the UK. It's the same as boiling your kettle for 10 hours non-stop.

This article mentions that in 18 months, powering Bitcoin could take more energy than the whole of the USA uses right now. And they're not exactly known for being energy conscious over there are they...

http://www.bbc.co.uk/news/technology-42265728

https://www.theguardian.com/technology/2017/nov/27/bitcoin-mining-consumes-electricity-ireland

https://en.bitcoin.it/wiki/Difficulty

 

[dog]

The frenzy continues...

http://blockchain.link/34311748/bitcoin-futures-are-here-the-story-so-far

 

[Edwin]

Bu

The frenzy continues...

http://blockchain.link/34311748/bitcoin-futures-are-here-the-story-so-far

Wow, so it’s not just Bitcoin futures that are being launched, but Bitcoin binary options too.

From my limited reading, those are the crack cocaine of investing because they’re little more than gambling - and indeed are banned in certain jurisdictions. They abstract the Bitcoins even further because at no point does anything get settled in Bitcoin, regardless of price movements. It’s a pure bet.

https://www.investopedia.com/articles/optioninvestor/10/binary-options.asp

 

[boxerdog]

Thats not a mining rig..............this is a mining rig..............
"

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[Edwin]

The other thing that I took from the article is that Bitcoin trading volumes are relatively low. A $10 billion volume of a $10,000 BTC means just 1,000,000 a day get traded. So that’s only about 40,000 BTC an hour across all exchanges. It’s not negligible, but it’s not much either.

If you imagine that volume is split across half a dozen large exchanges and many smaller venues, it’s even easier to see that a 25 or 30 BTC trade could block things up for a bit.

 

[RobM]

This is why a 1c spread is dodgy. Can't see anyone refusing to buy or sell a single $10k coin for the sake of 1c Guess we need to start up an 'exchange' like the majority of them out there - nice profit from buyer or seller if they ever do.

 

[Edwin]

But the trades are often 1/100th coin or less, so 1c is more significant.

 

[RobM]

Some people who got in early do have much larger chunks of bitcoin. Also the more people there are buying/selling the more likely one will accept a transaction. That is why it is normal to see prices in forex 'hover' but the actual transactions on both sides are constantly moving - not sitting dead still. You can watch unchanging odds on a bet exchange (with lots of participants around a pivot price) like betfair but see the amount buying and selling and the changing figures of the weight of money to get an idea of that. It can never be static except in an unvolatile market when spreads are naturally high.

 

[Admin]

On the energy and eco angle of discussion, this was said in an article today:

"One of the key challenges of existing blockchain technology is scale and performance. I predict that next year we will see alternatives to current blockchain technologies that will be more scalable, faster and minimize energy consumption."

To my mind, 2017 was a year of recognition, ridiculous IPOs, rampant speculation and market cap increase and 2018 will be the year of ICO failures and disappearing alt coins, scalability and efficiency in the blockchain networks which will increase performance in transaction time, cost reduction and allow micro payments. It will be the year of the 'lightning network'

 

[Marcoose]

Thanks, I looked at the Ledger Nano thing you mentioned in a post by @Marcoose last night, and I was expecting you could save them to your own standard memory stick, rather than the Ledger one.

I thought the paper wallet would be a simple case of printing off a webpage with details on it and then deleting something in the account on coinbase so that it was no longer on their site, hadn't thought about keys and techy stuff

It's all about Ledger products, mate. Or take a look at the Trezor....

 

[Marcoose]

So many comments on here that I want to debate. Maybe I'll come back tomorrow when I'm sober .

 

[dee]

So many comments on here that I want to debate. Maybe I'll come back tomorrow when I'm sober .

Carry on ! Doesn't stop most of us.

 

[Marcoose]

If Bitcoin were a country, it would be the 61st greediest in the world in terms of power consumption...
https://hacked.com/power-consumption-for-bitcoin-mining-is-now-ranked-61st-in-the-world/

The Bitcoin network already uses over $1.6 billion worth of electricity a year...
https://digiconomist.net/bitcoin-energy-consumption

This is something I wanted to debunk myself in an article but haven't had the time. There was someone on Twitter the other day offering either $20k or $200k (I actually think it was the latter) to a hardcore researcher to run a study into the topic. Anyway, think about how much energy is used, on a macro level, maintaining the current fiat monetary system. Really think about it. BTC, no matter how wasteful it is, is far less environmentally unfriendly than fiat. It does create far-fewer jobs though.... back to the Rioja.

 

[Marcoose]

Carry on ! Doesn't stop most of us.

I want to "like" this but cant find the button!

Edit: found it!

 

[Edwin]

This is something I wanted to debunk myself in an article but haven't had the time. There was someone on Twitter the other day offering either $20k or $200k (I actually think it was the latter) to a hardcore researcher to run a study into the topic. Anyway, think about how much energy is used, on a macro level, maintaining the current fiat monetary system. Really think about it. BTC, no matter how wasteful it is, is far less environmentally unfriendly than fiat. It does create far-fewer jobs though.... back to the Rioja.

Not if you include usefulness as a measure. Bitcoin achieves almost nothing useful. Fiat enables every transaction from the purchase of a coffee and up. So it’s hardly apples to apples.

If you add utility into the mix, Bitcoin is thousands of times more wasteful.