On Fri, Dec 8, 2017 at 9:22 PM, Michael Nelson <nelson_mikel@yahoo.com> wrote:

The mapping between Bitcoin and energy is missing the point, from the point of view of understanding the system. The correct mapping is between Bitcoin and the *price* of energy.

If electricity were 10 times as expensive, Bitcoin mining use of electric power would drop by a factor of 10 (for a given BTC price). The point of spending money on mining is to be competitive. The absolute amount of power is irrelevant.

This means that if governments raised the price of electricity, or resources used for generating it, then BTC would never be a problem. Not trivial to do, admittedly, but the point here is to understand the system.

it has nothing to do with the price of energy. the price of energy is never mentioned in the analyses that worry about Bitcoin's energy use, and for good reason.

the problem with Bitcoin is that it uses an enormous QUANTITY of energy to verify each new transaction. That amount has nothing to do with the price of energy. It is a quantity of energy, measured in kilowatt hours or whatever quantity you want (they currently use "TeraWatt hours," because it uses that much). It takes a certain amount of coal or oil or solar power to generate those kilowatt hours, and the number is rising steeply:

https://digiconomist.net/bitcoin-energy-consumption

There is no mention of price in the equations that produce this analysis, nor should there be.

IF coal and oil did not pollute and we had infinite free energy, this would not be a problem. But they do, and we don't, and it is, and it's getting worse.

- z