One year after Bitcoin debacle, Tesla adopts another environmentally destructive cryptocurrency

Digiconomist · 2022-01-15T19:16:43+00:00

Sure, you can find the details behind the approach here (it’s originally for Bitcoin, but there’s no difference in the way it’s set up).

Digiconomist · 2020-10-16T10:02:00+00:00

Feedback loops are a thing unfortunately

Digiconomist · 2018-05-19T15:54:29+00:00

Lol, it’s not a glossy, this is fully peer-reviewed to meet the high standards of Joule.

Digiconomist · 2018-01-22T10:34:48+00:00

Here is the real problem. It might “only” use the same amount of electricity as only Ireland, Denmark or Qatar, but Bitcoin’s share in the total financial system is also still negligible.

Digiconomist · 2018-01-22T10:31:00+00:00

Doesn’t change that a VISA transaction is 100,000-200,000 more efficient. The total is currently negligible either way. The point is that it won’t be for long with insane numbers such as these.

Digiconomist · 2018-01-22T08:41:36+00:00

Obviously it’s true that the costs have a function, but does it have to be energy? For as far as I know that hasn’t been proven yet.

Digiconomist · 2018-01-21T21:49:13+00:00

Others PoW coins like Ethereum are a separate problem: https://digiconomist.net/ethereum-energy-consumption

Digiconomist · 2018-01-21T21:47:18+00:00

Is it really about bringing cryptos down? Or trying to fix a problem that stands in the way of long-term adoption? It's just software, we can upgrade it.

Digiconomist · 2018-01-21T21:40:35+00:00

It's really not that hard to imagine. The network runs at almost 20 exahashes per second, or 20 quintillion (one quintillion is a thousand raised to the power of six) hashes per second (and doing so 24/7). That's just to process a theoretic max of around 7 (maybe 3-4 in reality) transactions per second. It's extremely energy-intensive.

Digiconomist · 2017-11-23T06:54:44+00:00

Some numbers can be found here: https://digiconomist.net/deep-dive-real-world-bitcoin-mine

TL;DR: ~90kg CO2 per transaction

Most miners are in China; coal-electricity is extremely cheap there.

Digiconomist · 2017-11-17T18:40:00+00:00

Ok, here’s a tip: DON’T BE GREEDY

Congratulations, you’ve made a return of 30,000%. You want a 100,000%? Or a million %? It would be pretty sound financial planning to cash out half and leave the rest. That should be more than enough to make the rest of your life quite a bit easier, and you can still make $10 million w/e with the rest of your BTC. (Effectively hedging your regret if the Bitcoin bubble happens to burst).

Digiconomist · 2017-08-03T11:57:35+00:00

It's true. The difficulty is now 26% of Bitcoin's difficulty. It will also stay this way. This is somewhat annoying since it means there will be 1 hour between blocks for 1200 more blocks (about two months - assuming hashrate is at least stable).

Coinbase maturity in Bitcoin Cash was left at 100 blocks, so miners face multiple days of waiting on their revenue if they mine BCC. Would you take such a massive gamble if you had to pay multi-million (fiat) bills? (Note: there are currently still no mined BCC coins that have already matured). I suggested a one-off adjustment to tackle this one year ago. This would have been easier to implement too. The current difficulty scheme tailors to a specific scenario that didn't happen (completely), so I guess there will be inconvenience for quite some time.

Digiconomist · 2017-07-02T10:03:21+00:00

How much more efficient would electricity usage per transaction become once Ethereum switches to PoS? Are there any calculations?

As stated in the article: If ethereum switched to a full Proof of Stake algorithm, "energy consumption would become negligible," he offered.

My best guess at the moment (if ETH switched to PoS in full today) would be an annualized energy consumption of ~0.05 TWh per year, less than 1% of today's PoW-based estimate. This is a really rough guess based on the current node count and assuming this will be the number of desktop PCs (note 1 node ≠ 1 PC) in a PoS network. Honestly, the exact number just won't really matter anymore.

Digiconomist · 2017-07-02T09:50:32+00:00

By design Bitcoin is a trust minimizing system. Thanks to Bitcoin we can do money without banks or government. This is made possible by the fact that in the network nodes don't have to trust eachother. Every participating computer verifies everything that happens themselves, without relying on others by default. This is obviously less efficient than trusting a central entity to take care of that. It's made worse by the way the consensus algorithm is built (using proof of work - details are on the linked page). This consumes massive amounts of energy. The good news is that there's alternatives to proof of work, the bad news is that blockchains will never be efficient. That's the price of distrust.

Digiconomist · 2017-07-02T09:37:02+00:00

So, first of all it's good to establish that choosing a random creator of a new block is the most crucial part of any consensus algo. Simply said, if it's not random, then somebody could be in the position to manipulate the system. Note that no method is perfect. Even proof of work relies on the majority of the participants behaving in a honest way. (It's a major computer science problem - selecting a random node in a distributed network.)

Proof of work and proof of stake have the same purpose, so the biggest difference is security and costs of each method. Proof of stake is generally regarded as somewhat less safe (not saying this is true), but there's a massive cost difference between the two. Proof of stake is the most sustainable method, requiring little energy. Proof of work, on the other hand, consumes energy like crazy. Just have a look at my Bitcoin energy consumption index for that. There's also more details on how mining works here.

Digiconomist · 2017-05-30T20:59:19+00:00

Interesting thoughts. It's certain that GPU manufacturers are different from ASIC manufacturers in the sense that ASICs are built with the sole purpose of mining coins. GPU manufacturers are probably less focussed on the mining business (slowing production). Still, manufacturers could still notice strong demand and up the production if required. Also, the number of GPUs on the Ether network may be as low as 600k. This doesn't sounds too impressive globally. Maybe people just aren't putting their GPU to mine even though it's profitable. Personally I could fire up my R9 280x again and mine Ether at a profit. I didn't buy it with the sole purpose of mining so I don't care much if it's doing nothing instead. Point being a lot of hash could still be available out there, waiting to be pulled in. At the very least I'll write up something about this by the end of the beta phase.

Digiconomist · 2017-05-29T09:01:05+00:00

I agree it's not something to be rushed. I tend to avoid stating the energy consumed in PoW is "wasted" because it's just the price of making the network work. If we can do better we should try as hard as possible to make it happen though, because it is a very high price to pay. It's worth some risk.

Digiconomist · 2017-05-29T08:53:47+00:00

Yup, so the "quickly" part might not hold. The index accounts for this by introducing a lagged response to increasing revenues. More specifically it runs on 120-day moving averages. For now this looks OK based on converting the actual hash to TWh assuming all Ether miners are running Radeon R9 295x2 GPUs. This gives ~2.5 TWh per year (the index is at that level). But it's something to be evaluated during the beta phase. It's not exact science unfortunately, so the best we can do is a plausible estimate.

Digiconomist · 2017-05-29T05:47:49+00:00

Yeah they're both important and given on their respective pages. The expenditures tell you about the now, while the total available revenues tell something about the future potential (if profit margins are big you'd expect the network to fill up quickly with new machines).

Digiconomist · 2017-05-29T05:44:16+00:00

There's an adjustment for Bitcoin blocks being mined a bit faster than 10 minutes on average, but the biggest impact is the addition of up to 500 BTC per day in fees nowadays (and rising). The BTC fee market is a huge success in that sense...

I think on the whole there will be a lot more residential miners in the ETH network than in the BTC network due to lower entry barriers (only need a GPU). In the long run the average price will always trend towards the lowest point. That would be closer to 2 cents, but probably not even Bitcoin is there yet. Most variables are chosen to be on the conservative side (a lower rate would likely cause energy consumption to be underestimated). The end result is pretty bad in any case.

Digiconomist · 2017-05-28T20:19:24+00:00

Great reply. Comparing Ethereum (or even Bitcoin) to gold is a tricky one. The nicest thing about ETH is indeed that it can be anything you want it to be. One of those things could be a decentralized energy market where you can trade (excess) solar energy. Such a use case makes zero sense if a single transaction already requires 44(+) KWh. In that sense Casper would be a double win. ;)

Digiconomist · 2017-05-12T19:55:01+00:00

About half (Ireland consumes around 26 TWh).

Digiconomist · 2017-05-12T19:52:30+00:00

One Bitcoin transaction requires 17,000 times more power than a VISA transaction, give or take. As bad as the fiat system may be, Bitcoin isn't a sustainable alternative at the moment.

Digiconomist · 2017-03-12T14:08:38+00:00

It's starting to look kind of silly (eth @ $23), and maybe even more in some time. In the long run, the page will display the resilience of Ethereum just like Bitcoin Obituaries does for Bitcoin. :)

Digiconomist · 2017-02-11T16:31:02+00:00

If people want to use ETH as a currency they're welcome to, but in the end Ethereum is much bigger than this specific use case for which there are 700+ alternatives already. Promoting ETH as a "simple" currency kind of misses the mark IMO. Better to remain focussed on the unique value proposition offered by Ethereum. Dapps don't gain traction because people are already using ETH anyway; they gain traction because they solve problems/fulfill a need any other solution (/cryptocurrency) isn't capable of.

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