Visa, MasterCard, AmEX, &c along with each individual bank, not to mention the intermediaries and gateways all of them use also consume a tremendous amount of power. It's not as if our current system uses a negligible amount of power, not to mention the number of steps and entities a transaction needs in order to be finalized.
Our current system does in fact use a negligible amount of power. Each $2 latte you put on a credit card uses an amount of electricity so infinitesimal that it can only be measured in the aggregate.
The percentage of the power used to generate a single bitcoin block for a single transaction can power an average US household for (approximately) an entire week.
To put it in perspective: If the bitcoin network scaled up to the size of the VISA network it would require 100% of all energy used for all purposes planet-wide, from transportation, manufacturing, agriculture, etc. Everything you could possibly want to buy with bitcoin would be unavailable, as 100% of all human activity would go to powering the miners.
Those costs specifically end up being reified in the fee those processors charge to their customers, so we can determine an upper limit to how much is spent on energy in that way.
We don't really know the relationship between transaction rate and electrical usage in a mature BTC system, because mining is mainly used to prevent double-spends and the minimum required mining rate to support a given transaction rate is a game-theoretical concern and not a technical one. We can only really observe what has happened so far in the Bitcoin ecosystem.
Otherwise there will be a point where it is cost effective to attack the network.
Bitcoin is designed to be wasteful.
"I'm working on these hashes. You know I'm not taking a shortcut, because there's not yet a known way to do that with this secure hash. And because you know I'm doing the work, you should reward me with some coins."
Alternatives have been considered, like proof-of-stake.
Bitcoin network scaling has to do with transactions per second, and it is a protocol problem, and an storage problem, but it is independent of the hash capacity of the system.
We can theoretically improve the Bitcoin network capacity to handle 100x the number of transactions, while having the same hash rate.
In fact, if hash rate were halved each month, and the protocol unchanged, Bitcoin network transaction capacity would still be the same after Bitcoin difficulty is auto adjusted.
Hash rate and transaction capacity are orthogonal issues.
If you raise the block size to put more transactions into a single block, you will end up with a normal banking system because nobody can carry the whole blockchain with them to pay and has to trust providers that manage wallets.
The person I replied to compalined about "wasting" power to run the bitcoin network. It's only a valid comparison when compared against current usage, as our current system also "wastes" power to run the current system.
> PoW incentivizes miners to use as much power as possible because that is a necessary requirement for increasing hash output.
It also incentives them to get the most performance per Watt. I'm just saying it's meaningless to complain that bitcoin uses power, it only matters how it compares to the current system.
No, even if "the current system" was an apt comparison, there is still a fundamental difference between PoW and everything else. The power consumed in the process of facilitating a bank or any type of business is incidental to the useful work being performed. Power is burned so there are lights for people to see, power is burned so computers can perform calculations so that employees can get their jobs done faster, power is burned so that people can go back home after their shift is over; all this is incidental, the power is expended to make the business process more efficient, but the business could still run (though much less efficiently) without spending power on lights, computers and transportation. On the other hand, PoW is literally a waste of work because the nature of the work itself does not matter, the only thing that matters is that the unbounded cost of wasting energy keeps everyone honest.
> I'm just saying it's meaningless to complain that bitcoin uses power, it only matters how it compares to the current system.
The comparison is meaningless because "the current system" continues to exist regardless of any developments in bitcoin, if anything ubiquitous bitcoin would almost certainly increase the power impact of the finance industry.
But is it more or less than the equivalent amount of power it would take for Bitcoin (or something like it) to scale to Visa, MC, AMEX, etc. global levels?