4

Yes, there is a way, by creating a BIP, but an alternative to PoW would very likely not get consensus in the community, and thus its supporters would be forced (and are free to) to create a hard fork, creating a new coin altogether. It is then to be seen which coin the market will choose, but my sense is that the majority of bitcoin investors will still ...


4

I have read somewhere that every Bitcoin transaction is "equivalent to the power consumption of an average U.S. household over 22.86 days.". Is that true? Isn't that horrible? tl;dr: Most people don't value Bitcoin as a payment mechanism, and even if they were, most payments are not recorded on-chain. So calculating the energy cost of a transaction ...


3

other coins. Do they work fundamentally differently, To secure the record of transactions, Bitcoin uses a type of mechanism called Proof of Work (PoW). Some other cryptocurrencies use any of several other mechanisms such as Proof of Stake (PoS). BTC (and many others) rely on solving ever increasingly complex algorithmic problems The complexity is not ...


3

would there be a way to change the algorithm to limit how many transactions a given mining installation could process per day, No. Miners can submit blocks anonymously, there is no mechanism by which miners can or do 'register with the network' in order to perform their mining work. Further, energy use has nothing to do with how many transactions are ...


3

No, it does not seem possible to impose limitations as proposed on miners without severely impacting key properties of Bitcoin. The proposed change would at least require registering miners and instituting some sort of oversight mechanism to evaluate their participation. The likely outcome would be some mix of reduced utility and evasion of the oversight at ...


3

Like chytrik said, the paper is light on all the interesting details. How do the rules get enforced? How are miners identified? How is the global time agreed upon? Why wouldn't miners just hop pools for the second round? What happens when miners fiddle with their block template's timestamps to get a head start on mining the second round block in case the ...


3

I think that implementing the protocol described in this paper wouldn't do much to diminish the total energy spent mining, but it would increase network instability and the potential for malicious miners to game the network to their advantage. This protocol creates a condition where every other block actually requires that the miner to find 2 valid blocks in ...


3

Who is paying for the running costs of Bitcoin? The primary costs are almost entirely paid by miners. Anyone else who runs any other sort of node (wallet etc) is likely to be also contributing by forwarding Bitcoin messages. They also pay a tiny amount of costs to sustain the network in terms of their own electricity costs, networking costs, capital assets (...


3

The people operating the mining hardware do. Mining hardware consumes electricity, so people who run the hardware receive an electricity bill from their electricity provider. They pay the bill using the proceeds from mining. Usually miners will sell some portion of the Bitcoin they earn for fiat, and pay for electricity using that fiat.


3

Bitcoin should switch to BFT (Byzantine Fault Tolerant) PoS which is secure by definition. Most people that don't like PoS are thinking in "vanilla" or "chain based" PoS protocols which are certainly more insecure than PoW. Ethereum 2.0 is using Casper currently in the Beacon Chain, and other coins are also using BFT PoS protocols. I will ...


3

I would assume that the transactions fees would stay or converge to be very low levels, because every miner has always an incentive to add any transaction with a positive fee. Block space is finite, so users are bidding for their position within the next block. Miners will always choose the transactions which have the highest feerate because it makes their ...


2

Proof of work allows the history of transactions on the network to be considered secure (ie, immutable). When measuring the security of any thing, what we are ultimately asking is how much energy will it take to defeat the security system? The more value being stored, the more security we will desire. The bitcoin network consumes energy in a very ...


2

The most extensive research on this topic is:"An Order-of-Magnitude Estimate of the Relative Sustainability of the Bitcoin Network" by Hass McCook among others, it cover specific topic as the economic and environmental cost of cash printing & coin minting, banking system, gold mining & recycling etc ... The results of the research are ...


2

There's an entirely different way of thinking about energy costs. Consider the functions that the Bitcoin network provide, the corresponding functions in banks, and how much energy they consume. How much energy is consumed by: Citibank Chase Hundreds of thousands of banks and branches Where is the Bitcoin Building? All the electricity for all of the desks ...


2

The miners pay for the energy use directly, but the whole network pays indirectly. As @AndrewChow described, the miners provide a service to the network. They secure the ledger and provide the transaction ordering necessary for users to converge on a shared ground-truth. In exchange for this public service, the miners are reimbursed via block rewards. The ...


2

There is no difference between those two things. If you have a data set that includes only things that you have fully validated all of and you confirm that something is in that data set, you have fully validated all of it. So checking that it's in a data set of things you have validated cannot be done instead of validating the entire chain because it does ...


1

Your approach is interesting however to have a significant energy-consumption decrease you need to have a signficiant reward decrease which will involve a significant hash power decrease since then the security would have a significant decrease (because any old high hash power organization like current mining pool could "easily" reach 51 % of hash ...


1

When accountants calculate the current years income, they don't go back to when the company started and add up every income and expense item, they just add the current years results to the archived past totals. What am I missing. The accountants won't start from the beginning, because they will have already done all of those calculations in previous years. ...


1

Perhaps more a clarification than an answer: there is absolutely no need for validating nodes to keep a copy of the full historical blockchain around, and it's unnecessary to have access to the chain's data for validation. Storing the block data or not is pretty much irrelevant for energy usage. In Bitcoin Core (a fully-validating node that's often ...


1

In a way the large energy expenditure is what secures the large sums of money being transacted today. These days it's not uncommon to see a single transaction of hundreds of millions of dollars. 5 years ago something that size probably would have been riskier because the total energy used to secure the network was far smaller. The energy usage helps secure ...


1

Since no one else has made the attempt, I will (partially) answer my own question. To create a lower bound on the operating cost of the non-bitcoin financial system, I will add the operating costs of the 10 largest banks in the world. 2020/2021 are atypical years, so lets use the operating costs from 2019. According to the doughroller.net these are the &...


1

What this means is that going forward the cost of securing currency will keep increasing and it will be difficult to transact in smaller denominations, it will turn into asset that just can not be transacted at smaller sizes, will not really be a payment instrument. I think to keep security but allow for higher transactions by increasing block size to allow ...


1

Is it permitted There are certain regions (e.g. the Pacific Ocean) where everything is permitted, and certain regions where doing stuff that are allowed by law may even land you in jail. crypto currency miner for heating and thus qualify for the lower energy rates Yes, this is a smart thing to do wherever it's cold and mining is permitted! Be careful, if ...


1

The other answers do a good job of explaining how miners are compensated for their electricity (and other) costs. As the other answers point out, there are two ways that miners are compensated: block rewards and transaction fees. In real terms, the block rewards (which halve approximately every four years) are paid for by everyone holding bitcoin, as the ...


1

In addition to other answers, Bitcoin investors would also like to have a very conservative approach to updating bitcoin. Messing with the core idea will increase the perceived risk for something wanting to be a store of value.


Only top voted, non community-wiki answers of a minimum length are eligible