13

Asking how to prevent the mining industry from being centralized into places with low electricity costs is like asking how to prevent the shipping industry from being centralized into cities that are on the coast. Both industries will tend to thrive in places where the profit margins are highest...and there's no profit margin in building a port in a land-...


8

Blockchain.info reckons the network used 156.51 megawatt hours of electricity in the last 24 hours. This random physics page I googled up reckons a car driving at 40mph takes 100kW (so, 2.4 MWh in 24 hours). So by these (very) rough figures, running the Bitcoin network takes about as much energy as driving 65 cars. How many vehicles are used in the ...


8

I think you misunderstand the problem. The reason mining is becoming impractical is because there's too much of it. It's like a restaurant that's too crowded. It means you can't get a table, but the restaurant is not going to go out of business.


8

I feel that a solution will have to be found I'm not sure I agree there is a 'problem' that needs to be explicitly fixed. The article you linked explains the relationship between price and electricity usage, now remember that price is a measure of the demand (since the supply is fixed and known). So the market acts as a naturally regulating force: as ...


7

The upper boundary for energy usage can be described with a function of the profit and energy costs. Miners won't ever pay more for energy than they get from profits. The actual energy usage formula will also have to count for the hardware costs. The formula will look something like this : max energy usage = (profit - hardware costs) / energy cost per unit ...


7

First, mining does not require a lot of bandwidth. Whatever you have is likely enough. Second, mining profits (in bitcoin, not some currency after exchange) is determined by difficulty. Difficulty is like a level number. The higher it is, the harder it is for mining computers to hash (the under-the-hood work). Calculating mining profits only needs the ...


6

On the deflationary death-spiral part: The bitcoin wiki has a good discussion of deflationary spiral, so that's a good place to get a counter point. I'd like to make some of my own (amateur) observations: Gold is currently not the most popular money used in the world not because gold is "bad" money, but because: a) Laws make it more difficult/expensive ...


6

Of course. At the current block reward of 25 BTC per block, on average 3600 BTC are mined per day which are worth over $1 million. If it were significantly much cheaper than $1M (in terms of energy costs) to mine that $1M worth of coins, more people would do so, thus the difficulty would go up, thus the energy costs would go up. By definition, the energy ...


6

One possibility among others to encourage mining decentralization is to rely on already owned/amortized hardware to mine the currency. Most people will not by ASICs to mine bitcoin, but many already have a computer, so the jump to mining is easier if that computer is somwwhat plausible as a miner. For bitcoin, ASICs are so far ahead that mining with a ...


5

If your electricity costs are high, unprofitable for you may mean profitable for someone else. Some miners may still use unprofitable ASICs either to support the network (at a smaller loss than with GPUs) or in hopes that BTC price will rise in the future (although just buying BTC in this case may be more profitable). Try to sell them. If you have no ...


5

When transactions are created they are essentially a payment promise. They are submitted as a message to the network, where every node checks that the promised money exists and then forwards the transaction. Some of these nodes collect transactions in order to create a new block. These miners are essentially participating in a giant lottery where the winner ...


4

I assert that this question is virtually irrelevant based on another assertion: Bitcoin is more energy efficient and will always be more energy efficient than the systems it intends to wholly replace. In both Bitcoin and the legacy currency and monetary systems, there is energy spent for some of the key tenets of a value storage and exchange system. ...


4

The specifics of hardware (cost efficiency and hashing rate) are not very important. The availability of the most competitive mining hardware matters, but in the long run, the cost of electricity burned will tend towards the value of BTC granted to miners. obviously it won't quite get there (they have to return their hardware costs), but barring availability ...


4

Basic Algebra 101: 100 W = 0.1 kW so 0.1 (kW) * 0.1399 (USD/kWh) = ~$0.014 (USD/hour) or 0.1 (kW) * 24 (h/Day) = 2.4 kWh/Day 2.4 (kWh/Day) * 0.1399 (USD/kWh) = $0.3358 (USD/Day)


4

This is my second answer, which does not cover your question directly but is rather given after the lengthy discussion. Bitcoin is the first approach to a distributed, cryptographic currency. As of now it has not been the last one however. Bitcoin layed the foundation to spawn a lot of similar currencies. This is not destructive to the idea. in fact, the ...


4

As we've answered earlier today the description of what happens when 90% of the hashpower is lost is approximately accurate, although somewhat exaggerated: "A 90% loss will create 2 hour block intervals and take a year to resolve." Actually, it would be 100 minute blocks and would take less than half a year even assuming that no new hashrate were added ...


4

As more transactions are added to the block chain, does each individual transaction (ie. I send a bitcoin to a friend) get more expensive (in terms of FLOPS) to verify and commit to the chain? No, it does not get more expensive in terms of anything. It especially does not get more expensive in terms of FLOPS because there are no floating point operations in ...


3

It largely depends on what machine you want to power with those solar panels. You're definitely going nowhere with GPU based mining. As PCs consume a huge lot of energy, and those who don't, are equipped with Atom and Intel graphics, meaning mining won't get you far with that equipment. However, it may be possible to run a USB ASIC miner based on a ...


3

If you can hold your hand on the Bitcoin Miner for an extended period of time without burning it, I doubt the cube is consuming 270 Watts. What does your mining software indicate the temperature is? My two cubes run at temperatures between upper 30s and low 50s Celsius. (These cubes do make nice winter hand warmers for cold typing hands:-) Once you rule ...


3

The difficulty actually does not continually increase. It has continued to increase recently because hashing power has continued to increase, causing blocks to be found quicker. Difficulty is calculated by taking into account how long it has taken for the network to create 2016ª blocks and adjusting the difficulty accordingly. Here's some messing around in ...


3

There is no guarantee that transaction processing, aka "mining", will always be attractive. As such there is no guarantee that the network 'difficulty' will always go up, it fluctuates. Therefore in a scenario, difficulty can settle at a value much lower than it is today, and/or specialized computers can become more power efficient. Bitcoin can also use a ...


3

Interesting thought. Years from now we may get to a point where transaction fees are the majority of mining income and profits are so marginalized that electricity expense is a major factor. What makes sense for a miner may be to have a low-power computer with ASICs sitting idle and waiting until there are some transactions with big juicy fees, then ...


3

One of scrypt design goals was to make CPU and GPU performance balanced, which meant that it was far more dependent on memory speed. The GPU had a solid work around and as far as I know CPUs don't have any advantage. But that did cause it basically impossible to do scrypt mining with an ASIC unless it has a ton of memory and memory channels added in, ...


3

I'm not an expert, but as far as I understand it, Moore's Law applies to ASICs just like other chips. So, every two years you get newer ASICs which can hash more, even though the chip design is not all the different from the previous ASICs, the number of transistors that chip has on it is doubled. So, there is always going to be a cost of keeping up with ...


3

This is a bad article. While it may be true that Bitcoin is difficult to change, it is much easier to shut down. This is true! While full clients will not accept invalid blocks, nothing guarantees that there will be valid blocks to confirm transactions. The largest mining firms has worked out special arrangements with the chinese government which ...


3

As the answer for this question, we have the Proof of Stake approach, firstly implemented by Peercoin (PPC). I think other coins as Ethereum have as well a proof of stake mining/minting approach links: https://peercoin.net/minting and https://github.com/peercoin/peercoin/wiki/FAQ


3

Yes, this number is the total energy consumption of mining, divided by the number of transactions confirmed. The total energy consumption has basically nothing to do with the actual number of transactions, at least not directly. There's an indirect relationship: since the total number of transactions (or rather, total size in bytes) that can be confirmed ...


2

One attempt, .... Diablo Mining Company didn't go so well. http://bitcointalk.org/index.php?topic=77469 So far, the most profitable mining has been in nations whose taxpayers provide subsidized electricity. Essentially, it is like a form of welfare for Bitcoin mining entrepreneurs. ASICs have removed that advantage though so it never got to be that big ...


2

You need whats called a Power Filter. There are varying levels of filters, some cut the tops off of AC signals, others take dirty input current and consume it, then create a completely new AC signal for device use. The C2 is a good intro, but if you want superior protection, look for something called a Power Conditioner. Here are links to the current ...


2

An interesting question, but I don't think block difficulty is aimed to solve this problem. However, I anticipate that the free market would solve the question as posed. In short, if we have an off-peak hour that provides a lower expectation of BTC per hour in transaction fees, then we will see the miners with higher costs per hour in operation drop out. In ...


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