[NetBehaviour] bitcoin power (from Michel Bauwens, G+)

[Jaka Železnikar]

I'm not properly acquainted too - how the security of the Bitcoin 
network will be achieved once all the Bitcoins are "mined"?

best, Jaka

On 27. 11. 2017 04:56, Rob Myers wrote:
> On 26/11/17 05:06 PM, Alan Sondheim wrote:
>> https://powercompare.co.uk/bitcoin/
>>
>> One question, why does it take so much power?
> Security.
>
> "Miners" are machines that compete to be rewarded in Bitcoin for
> securing the Bitcoin network. They do this by gathering up transactions
> broadcast to the network every ten minutes or so into blocks, making
> sure they all follow the rules of the system, then solving a difficult
> mathematical puzzle to prove their good faith.
>
> The difficulty of that puzzle is set by an algorithm that measures the
> average time of the last two weeks worth of blocks, and tries to ensure
> that it will average out to ten minutes over the next two.
>
> Because Bitcoin has value, people compete for the block rewards. Lots of
> people. Lots and lots and lots of people. With lots and lots and lots
> and lots of ever more specialized computers. This means that the
> difficulty algorithm keeps making the puzzle more difficult. And so it
> takes more computing power to solve it. Which takes more energy.
>
> This is the "proof of work" system. It is not a waste of electricity, it
> is the cost of securing the network.
>
> It is possible to try to create proof of work algorithms that are more
> energy efficient. Or to use different security systems altogether, for
> example "proof of stake", that use much less energy.
>
> But these are currently less popular than Bitcoin. So if people are
> worried about blockchain energy usage they should make sure to use
> hydro-electric or solar power for mining. ;-)
>
>> Excuse my ignorance.
> No it's weird. It's an effect of the key technological breakthrough of
> Bitcoin: cheating and using economic incentives to solve a computer
> science problem.
>
>> And do you think this will affect future value?
> It secures that future value.
>
> There was a hilarious article that extended the Bitcoin energy
> consumption curve to show that in a couple of years it will consume all
> the energy on the planet.
>
> If that happens its value will be absolute for a single moment before
> the economy and human society collapses...
>
> - Rob.
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