Can someone explain to me why bitcoin is worth spending 1/400th of the total electrical generation capacity of Humanity on it. And while Bitcoin is currently fairly secure what is going to secure it once really fast Quantum computing arrives and public/private key pairs (prime numbers) melt like butter. Ok and I know it is supposed to be hardened against quantum computing at this point in time but that won't be the case forever. Really 1/400th of the total electrical capacity of the planet and that was 2019 Bitcoin consumes more energy than Switzerland, according to new estimate - The Verge And just to add some technical analysis and perspective, this is the Cambridge Bitcoin Electricity Consumption Index (CBECI) updated every 30 seconds, see that middle number just now 15.55GW, that's the output of 15 medium size nuclear power plants, 118 Terawatt hours per year estimated and it could be closer to the upper bound. All that power just to keep one ledger secure, estimated to use more electrical power than the entire world banking industry, does this make sense? The bigger Bitcoin gets the more complex it has to make the numerical calculations in order to continue to secure the blockchain so this energy use is going up that is absolutely certain, where are we when bitcoin is 100 time the size it is now is that 25% of humanity's electrical generation spent moving ones and zeros around?
You have a point. Its really amusing how hopelessly partisan some of the articles that try and address it are: Here is one from coinbase https://www.coindesk.com/the-last-word-on-bitcoins-energy-consumption If course its all rubbish -because bitcoin isn't a useful commodity ike aluminum is and because electricity is not "wasted' when you have overproduction - you reduce your capacity. Finally there's no point in expending the vast amount of energy that these currencies require when we already have a perfectly good global financial system. The only thing that drives people to invest in bitcoin is fear of missing out - pyramid selling on a large scale. I've owned cryptocurrencies and made money on them. But I wouldn't talk it up as a safe investment. Its a gamble and when you get away with it, you're lucky.
It's very easy to get sucked in. I still hold some crypto because I had some money I didn't mind losing and fancied a flutter. A friend of mine - a usually very level headed engineering type-has got sucked into mining. He's spent 7, 000 quid on his mining rig and now uses about 1600w of electricity mining this stuff in his garage. He reckons he will break more than break even but I'm not that convinced by his accounting. The equipment cost alarms me - so while he bought gear - I just bought the coin. Its all great fun and highly risky - and despite my own personal position I still stand by my statements that it's a bubble, a risky gamble, and all the rest.
If I ever bought a set of bitcoin mining ASICs and associated hardware I would at least put it somewhere where I could use the heat like the corner of the living room, 30 odd units of electricity is a lot per day if British gas were supplying that it would be about 1800 quid a year I might move the rig in the summer but in the winter I would want it heating my room I suppose if he had a big garage it would keep the cars toastie
Bitcoin miners are dedicated computers that are specially designed to solve particular complex calculations deriving prime numbers those numbers are used in clever ways to encrypt information in an accounting ledger (the blockchain) the ledger tracks bit coins, a notion a made up idea, and who has them (who owns the keys). You can create bitcoins using the mining equipment you are not really mining them the mining notion comes from the discovery of these very very large numbers which are prime, they are members of the set of natural numbers i.e. integers and with enough effort you can work out the numbers that are prime. People have decided that this has value and started gambling on the coins (information) that are secured by these numbers (primes are very useful in cryptography) and created a speculators market where they buy and sell them. My description is probably not technically accurate as I don't know the deep details of the blockchain but it is close.
My bill is 900 a year for for 5000 KWh of electricity, 5000 units. I did this in my head so it is approximate. 2000 W for 24 hours is 48 KWh. 1600 W 24 hours a day is about 80% of that so I was out a bit it is about 40 units (KWh) a day I did 30 units * 365 which about 10000 units which is double my bill. So a rough guess was £1800 a year to run these mining computers 24 hours a day and rest assured they do run them 24 hours a day. My rough guess was wrong it is quite a bit more than that at about £2600 a year to run a 1600W rig continuously.
. Yeah @oss is spot on. Actually the speculation in the crypto market has even affected secondary markets like graphics cards. The nvidia RTX 3060ti is is supposed to be a 360 dollar card. Used by miners right now. You can't get them for love nor money. People are selling them on ebay for 800+ quid. It's crazy it's like the wild west. Love of money and making an easy buck is a powerful motivator and this is what drives these bubbles. I personally dislike it. I will make some money on this flutter I'm sure, but I'm these sorts of bubbles there are always matched winners and losers. To look at it another wayz for every thousand quid I make, it means that other people don't. It doesn't generate money for free. And it's a bit against my principles to take money from idiots who should know better so this is why the whole crypto thing is a bit of an evil delusion and I wish it would stop.
a bit off topic but--household energy bills. i have a centrally heated 4 bedroomed house..well insulated semi. my electricity bill averages £1.00 a day--all year round =£365 a year my gas bill like most--fluctuates a lot summer /winter..but this last month--coldest of the year--it was £60..|£ 2-00 a day. i put this modest gas usage down to a flueless 100% efficient gas fire i had installed oct 2019. On low it uses a kw of gas an hour--and its on all day most days. my combined total is just over £700 a year--and i'm home most of the day.
I live in a tiny one bedroom flat no gas my bills are crazy, I've just switched to EON to get the price down, it is electric heating that is the killer.
Electric heating? Ugh. Why not get yourself some servers and heat the house as a side effect whilst doing something useful and fun. my server rack keeps the room really toasty.
This is where I ended up when I lost my business I could rent something better but this place is very cheap and the money I save is better off in my pension. Four laptops, a 32in QHD monitor, 43 inch TV Fridge freezer and a separate Fridge freezer, the oven and a few other small devices help keep the room warm but in winter it is not enough and I need an extra fan heater, I try not to use the wall mounted electric oil radiators, lights are all LED very low energy. This year was exceptional as I probably used 800 extra units by working from home, my bill will go down a lot when we get back to the office. I'm looking to buy a flat in Scotland in 4 years time, I'm unlikely to ever be able to afford a house as nice as the one I lost so a flat it will be when I do that I will get creative about the heating, colder up there all year anyway but I plan to spend a lot of the cold months in the Phils with my kids
electric heating ? cheaper to burn a bundle of £10 notes. i'm dreading the day the gov switches off the gas supply. i expect that will coincide with the petrol / diesel close down, so then we will all heat and cook with electricity--and run our cars on it. Great ! dont worry too much where all the extra electric will come from..just flick a switch. Or switch off the bitcoin trading.
Hey @oss well after this chat on the forum I decided to sell my crypto over the weekend because the price was sky high and figured it was time. Just as well... Bitcoin (BTC USD) Cryptocurrency Price Pulls Back From Record High - Bloomberg Started to build a mining rig instead. If you can't beat 'em - join em. At least mining it gives you concrete hardware to sell. I've got some graphics cards I can use - not going to use the Ebay ones that are going for silly dreamers prices.
I was just lucky. And yes - absolutely. Cryptocurrencies are so volatile that it feels safer to mine it than invest in it. Still a risk, but the intrinsic value of the gear hedges the potential downside a bit.
Yes. I made the point about liquidity several times in this thread. For bitcoin, I think about 14 million bitcoins are defined as illiquid - there are only about 4 million being circulated. That makes the market very volatile and inefficient since as you pointed out, a big trade will move the market (upward for a buy, downward for a sell). The volatility and it's uselessness for risk management is the reason why most large investment companies do not indulge. The few desks that do trade cryptocurrency do so strictly speculatively and not really in serious volume. The liquidity just isn't there. For all of it's life until Jan 2021 - bitcoin has had tiny trading volume - less than $500m per day. Bear in mind that in a real market - for example in US Treasuries - a single large $800m trade is basically worth the entire day's trading for bitcoin. Blockchain Charts I can think of five product groups in the real world that trade basically more than one hundred times as much per day - for example US Treasuries are about $160bn a day. Real gold regularly trades $130bn a day. This is why liquidity is a problem. Because bitcoin, 'the digital gold' is actually nowhere. The reason for the wild price swings is that it's being bought and sold by retail (ie - average joes) (which you can tell because the average trade size is very very small) based on emotion and gut feel and because it's an illiquid market.
