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Comment by gascan | Hacker News Reader

for comparison, even the high-end estimates of bitcoin’s total current power consumption are still less than 6 percent of the power consumed by the world’s banking sector.

Indeed, congratulations Bitcoin. You are able to process 2.3 transactions per second using only 6 percent of the power of the entire worldwide banking sector!

   * VISA: 2,000 transactions per second

   * ACH: 800 transactions per second

   * MasterCard: 3,000 transactions per second (?)

   * NYSE: Who even knows?

   * Etc...

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> NYSE: Who even knows?

Semi-wild guess, based on [1] indicating yesterday's volume was 3.1bn, and knowing that trading volume on exchanges typically has big spikes near the open and close, they are probably able to comfortably handle upwards of a quarter million transactions per second.

Also worth noting that the world's banking sector does a lot more than just processing transactions.

[1]: http://www.wsj.com/mdc/public/page/2_3021-tradingdiary2.html

Not to mention that the banking sector is providing many millions of jobs.

thats because they provide services beyond processing transactions.

That's the point: more services, more jobs are all part of the quoted energy consumption.

FYI a major global bank will typically do 2-4 billion transactions per day.

Throw in lightning and all of a sudden bitcoin can handle millions of transactions per second using only 6% of the power consumed by the world's banking sector. Not too shabby.

I still find lightning incredibly ironic. To me, it looks like:

   * Gold =~ Bitcoin (2009)

   * Gold Standard =~ Lightning Network (2018)

   * Fiat Currency =~ (???)

> * Gold Standard =~ Lightning Network (2018)

the crucial difference is that nothing is held in reserve. ie. you don't have to trust that the bank is going to run away with your deposits.

Savings and loan banking, and the risks associated with it, is a separate thing from the basis of the currency. If Bitcoin-as-a-currency ever develops to the point that you can have a bitcoin-denominated savings account that earns interest, your bitcoin-denominated assets that you place into such an account will be just as susceptible to bank insolvency as any other kind of money you can deposit in a bank.

That, and, I think you have the analogy backwards. It's not that nothing is held in reserve - that would be Tether ;) - it's that everything is held in reserve.

Fiat currency would probably be something like Fiat = Cardano (2019) or one of the other proof of stake non mining coins. (Or Credits tokens - buy those! I'm long them.)

Am I missing something, or is it inevitable that bitcoin mining will lose profitability again, possibly very soon?

The problem is anecdotally outlined in the article. People are willing to mine bitcoin at a loss if need be and that makes mining rough for everybody because of the increased difficulty.

The problem is it's too easy to mine bitcoin. As the article points out, all you really need is somebody to keep an eye on the servers. People will push it to the edge, at which point, a tragedy of the commons will ruin it for everybody.

The only hope is for bitcoin prices to increase exponentially for all of eternity.

Your uninformed opinion only serves to mislead others. You should at least have the courtesy to preface your post with a "I don't know anything about Bitcoin" to warn other readers.

Anyways: The mining difficulty is dynamic. If mining becomes unprofitable and miners stop mining the difficulty will adjust downwards making it easier to mine and hence profitable again.

I 100% understand that it is dynamic.

My point is that that is not how it will work out. As the article points out, people were still mining when bitcoin dropped to $200 even though it was unprofitable. Because they were still mining even though it was unprofitable, they kept the dynamic difficulty high enough that mining remained unprofitable. Why? Because they had the infrastructure and it is easy enough to keep on mining until you are completely bankrupt. You don't quit mining just to make it profitable again for somebody else, so you hope that you can outlast them. That is the tragedy of the commons and it seems inevitable as people spend more and more money on infrastructure investment.

Of course -- it's unreasonable to think that all miners would exit at the same time. Different miners have different margins. Miners exit when it's no longer profitable for them. I don't quite see what the problem is.

My point is, there will always be somebody willing to mine it unprofitably. The only reason that hasn't happened now is because the price has increased too quickly for capacity to keep up.

They literally started with "Am I missing something"

It's kind of the way with all capital intensive industries - airlines, car and steel manufacturing and the like. People put in capital till the profits are gone.

Who cares? Bitcoins power use is hardly linked to it's transaction rate.

Indeed, transaction rate at bitcoin's highest points has been very low. Power usage is strongly correlated to price, while price isn't correlated to... anything.

Price is correlated to power usage. There's an odd sort of feedback loop where a rising bitcoin price causes more mining which raises the price of bitcoin and so on exponentially.

You may ask why not just walk away and let bitcoin return to zero but there are a large number of people in the mining industry and similar with incentives to promote and prop it up.

I would imagine people who like to breathe clean air and drink clean water would care.

Only the people who pay little attention and wildly overestimate bitcoins impact on these things.

Besides, the "Who cares?" was mostly aimed at the irrelevant comparisons made by gascan.

Bitcoin mining is proportional to how many there are, it will suck up more power with more miners performing difficult hash operations by design. Bitcoin is a fucking blight on the planet.

The guy who probably designed it writes "its prolific resource consumption and poor computational scalability is buying something even more valuable: social scalability."

Not quite sure about that one myself. You can motivate a lot of people to do something social pretty well with fiat currency.

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