Usually surplus power is stored up in batteries... but yes... they only work in the day.

Solar powered Bitcoin miners on the moon!  Then all those "too the moon" comments would become true.

Obsolete technology is the byproduct of innovation. We are seeing progress.

This

Unprofitable miners quitting have little impact on difficulty. asic's are a 1000 x more powerful than gpu's.

As long as the cost of production is lower than market price miners have a profit incentive.

Hardware costs are not a factor in revenue as they are fixed assets are a sunk costs.
The investment in new hardware is stimulated by large gaps between production cost and market price.

As the profit shrinks, risk in investing in more efficient hardware increase.

The problem is that you obviously do not understand BurtW's calculations.

I will give you a real world analogy to think about:
Mining Gold is profitable but generally requires heavy machinery that runs mostly on fossil fuel.
The equivalent calculation would be to take the value of the global output of newly mined gold and say "Mining gold will consume that value divided by fuel prices of fuel because it is profitable"

You are ignoring the cost of mining equipment, the cost of labor, local conditions, changes in technological requirements that require research etc.

Do you see the issue? You have just reduced a complex problem into one dimension, in the above case fuel and in BurtW's case electricity.

Essentially his observation is not really how much energy the bitcoin network will "try to consume" (even that statement makes no sense. A miner has a limited amount of hashrate so for the network to consume more energy would mean you HAVE to increase the number of miners or their efficiency, both of which require an input of new money through both purchases and research and development)

The observation is: For x amount of money I can buy y amount of electricity.

Even with the current situation we see that calculations purely based on required energy make little sense.
If I buy a 1st generation block erupter it is pretty much useless unless I have very low energy costs. Its price, the cost of its development and ultimately, the fact that it will and is being replaced by new hardware that also requires new investments show that assuming 100% of rewards created by mining flow into energy makes little sense

I will even go as far as speculating that energy costs will become a smaller factor than today if prices ever do climb up significantly.
The limited capacity of producing efficient asic chips for everyone means that you will run into a global scarcity of hardware, driving the prices up for new machines. Furthermore if mining is indeed a billion dollar industry you will have RnD by manufacturers to try and get a competitive edge on both hashrate and energy efficiency. These costs need to be paid for somehow and that is where a portion of the block rewards of miners will go into.

People on these forums have made calculations on the energy cost of producing a bitcoin and arrive at quite low values.
Many blindly assume that that is the only cost for producing a bitcoin and consider them overvalued. What you are missing is
that a miner needs to be bought and that initial investment needs to be paid for. Because difficulty is increasing your miner is producing less and less money until it ultimately is no longer profitable and has become obsolete.

Hence again I will ask, what is the point in assuming a stable network where everyone already has hardware for no cost and technology does not change when that is clearly not the case?

raid_n:

Your entire argument is:  BurtW, your estimate for g of 0.1 is too low, I think the value of g is higher than that.

So, just change the value of g to what you estimate it should be.

What do you think it should be?  0.5?  0.6?

You don't have to write walls of text to tell us the value I picked out of the air in my example is wrong.  If you could calculate and justify an actual value for g - that would be interesting.

Just a quick extension.

if we assume a churn on hardware to counter the decay of individual units your model can be reduced to two bounds

[edit] removed asymptotically, does not have to be that way

a) mining converges to 100% expenditure on hardware
b) mining  converges to 100% expenditure on energy.

The reality will be in between. I doubt there will be a fixed factor between both bounds (eg 0.5 spent on new miners, 0.5 on power)

can't all hardware expenditure be estimated as energy?

Never thought of it like this good answer

Power consumption?
why should we care power consumption?
people always did worst thing to nature. even a btc, couldnt it be a POS ? i would like to.
when speakings about economics widely i could say we didnt evaluate  solar energy, we didnt evaluate wind mills technology, but we were good at oil and nuclear power. were we good at nuclear power?? of course NOT We didnt evaluate Thorium.

What the fuck is Thorium?

Thorium's advantages start from the moment it is mined and purified, in that all but a trace of naturally occurring thorium is Th232, the isotope useful in nuclear reactors. That's a heck of a lot better than the 3 to 5% of uranium that comes in the form we need.

Then there's the safety side of thorium reactions. Unlike U235, thorium is not fissile. That means no matter how many thorium nuclei you pack together, they will not on their own start splitting apart and exploding. If you want to make thorium nuclei split apart, though, it's easy: you simply start throwing neutrons at them. Then, when you need the reaction to stop, simply turn off the source of neutrons and the whole process shuts down, simple as pie.

Here's how it works. When Th232 absorbs a neutron it becomes Th233, which is unstable and decays into protactinium-233 and then into U233. That's the same uranium isotope we use in reactors now as a nuclear fuel, the one that is fissile all on its own. Thankfully, it is also relatively long lived, which means at this point in the cycle the irradiated fuel can be unloaded from the reactor and the U233 separated from the remaining thorium. The uranium is then fed into another reactor all on its own, to generate energy.

The U233 does its thing, splitting apart and releasing high-energy neutrons. But there isn't a pile of U238 sitting by. Remember, with uranium reactors it's the U238, turned into U239 by absorbing some of those high-flying neutrons, that produces all the highly radioactive waste products. With thorium, the U233 is isolated and the result is far fewer highly radioactive, long-lived byproducts. Thorium nuclear waste only stays radioactive for 500 years, instead of 10,000, and there is 1,000 to 10,000 times less of it to start with.





We will have plenty of energy/power soon.

imagine a car - refuel, 100 years drive...  100 years.
Start engine, neutrons flow. drive forever !

If i were developer, i would create a Thorium Coin
TRC
energy for P2P power !

If i remember good, 9grams Thorium can run all USA for a year.
and it is everywhere, all around us. in the beaches and so on. we will never lack of energy again..
Thorium is as powerful as bitcoin