this post was submitted on 04 Dec 2023
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These calculations are a bit off IMO. They factor the total amount of mining and divide it by the number of transactions.
However, the amount of mining is not dependent on the amount of transactions.
I'm not a fan of bitcoin due to the wasteful proof of work mechanism but 'blaming' the transactions is not really fair IMO, especially because people don't really use bitcoin as a payment method anymore. It's just used by speculators now.
Wasteful and unsustainable.
Entertain my ignorance on this for a second, but isn't there some sort of dependence here? Like not a strictly casual dependence, but if transactions were, say, to magically halve for a few days, would that not affect the mining required and thus the total energy expenditure of the mining?
(Obviously the limit case would show this to be true, in that in the absence of any transactions at all, mining would cease. But I'm after something a bit more clearly casually related, somewhat like supply and demand in the marketplace – consumption of beef driving more supply and more methane, e.g.)
@janguv
@Zworf @technology
The mining isn't based on transactions, the mining is set to target a 10 minute block time, the difficulty changes based on how much mining capacity there is.
If a block takes less than 10 minutes the difficulty goes up. If it takes more the difficulty goes down.
Each block has a maximum capacity of 2500 transactions, which is why gas is used to prioritize who gets added in a block.
There have been many blocks with zero transactions.
(May bot be correct #)
Thanks for clarifying that!
No, transactions piggyback on the mined blocks but if there are no transactions mining still happens.
I see. But in the limit case where just everybody decided BTC is nonsense and stopped transacting entirely, while mining could continue, eventually it would die out, right?
So in a sense, do transactions not drive the need for mining? If that's the case, the connection isn't directly casual so much as one of complicity. Does that make sense or am I still barking up the wrong tree with this way of thinking?
Probably, yes. But it's important to realise that bitcoin started as a payment system. Meaning lots of daily transactions would be done. These days it's used more for speculation, as a value storage system and for transferring to other coins. Which implies a lot less transactions.
Everybody basically has already decided that BTC is nonsense for payments and stopped using it for that. This is exactly why the transactions have so much "overhead" because so few transactions are compared to so much mining.
Not really, no. Miners mine as an investment. The whole payment system community has already been taken over by other systems which are much better suited for that, like Etherium, which has proof of stake for low overhead, fast transaction time and smart contracts. Or Monero, which hides the identity better so it's more common in the purchasing of certain illicit substances.
The BTC community reacted with lightning but it was too little too late to solve this usecase. The BCH (bitcoin cash) fork was also motivated by this as far as I understand, because the miners were opposed to any changes to facilitate easier payments and lower transaction costs. But this is more hearsay I have to admit, I'm not a cryptobro and not fully into this.
So now BTC is less like a "bank" and more like a "goldmine". That's how you should see it. Even though gold is a useful material, most investors that buy gold don't buy it with the intention to ever sell it to a factory making connectors or whatever. They just buy it because it's scarce and the price keeps going up, and people assign value to it.
Bitcoin is in the same position now. It has value because people decide it has value. This is not really related to its potential use as a payment system. Miners (the ones who control the bitcoin stack now) are not even interested in its use for that purpose and seem to actively block enhancements to make that easier. Though transactions are still necessary for trading between investors, it's much much less in volume than it would be if people were still using it to pay for stuff in shops.
But anyway, going back to my original point: Articles like the link here that claim that Bitcoin is a really shitty payment system are kinda stating the obvious. It's practically speaking not a payment system anymore even though it technically could be used as such.
Thanks for that, interesting stuff.