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Comment by skrause | Hacker News Reader

The difference is that you can optimize the current banking system for lower power consumption. Bitcoin mining will always be a race on who can waste the most resources/electricity for mining.

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That is right, but does not take into account, that by construction, the system is becoming more efficient over time. The rise in computing power for every Bitcoin is reflecting that more transactions are done per Bitcoin over time. So, more and more efficient hardware is used and thus the relative energy needed per transaction is dropping.

But that doesn't take into account that Bitcoin price increases (since we're assuming for the sake of argument that the price will actually reach insane heights again) cause mining hashrate to go up, which causes network difficulty to go up, which is by definition less efficient.

In essence, Bitcoin's harm to the ecosystem is almost directly proportional to Bitcoin price.

It does. The rate of transactions is growing faster than the Bitcoin price.

My fingernails are growing faster than Bitcoin's price... the bigger concern is that Bitcoin is already near its practical transaction-per-second. Just a couple of weeks ago there were a few whole blocks' worth of unconfirmed transactions hanging out, and while that may have improved in the meantime it's just a harbinger of problems to come.

With more and more efficient hardware you'll just get a higher number of hashes per second and an increased difficulty. At least someone else will reinvest that saved electricity into more hardware, so you have to do the same to compete.

Just imagine everyone using this more efficient hardware to save money on electricity, not increasing the mining difficulty. Eventually you'll have the risk of a single entity (e.g. a government organization) just buying enough hardware to have more than 50% of the hashing power, taking over the whole blockchain.

I do not know exactly, how the mining difficulty is set up, but to my understanding, more and more transactions are possible with not so fast growing energy effort. And the number that is really interesting is the number of transactions per energy unit.

The second argument is something that is independent from the energy problem. The danger always exists, that some entity is taking over the blockchain.

Bitcoin adds a new block to the blockchain every 10 minutes. The difficulty rate is roughly proportional to the total network hash power and is there to keep that constant speed of block generation.

It's not exactly that. More energy-effective systems allow you to mine the same bitcoins with lower electricity expenses. When bitcoin mining will hit the wall of physical restrictions, they will start to optimize energy efficiency.

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