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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