Date: Wed, 03 Feb 2021 03:17:48 +0000
To: Luke Kenneth Casson Leighton <lkcl@lkcl.net>,
 Bitcoin Protocol Discussion <bitcoin-dev@lists.linuxfoundation.org>
From: ZmnSCPxj <ZmnSCPxj@protonmail.com>
Reply-To: ZmnSCPxj <ZmnSCPxj@protonmail.com>
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Subject: Re: [bitcoin-dev] Libre/Open blockchain / cryptographic ASICs
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Good morning again Luke,


> [my personal favourite is a focus on power-efficiency: battery-operated h=
and-held devices at or below 3.5 watts (thus not requiring thermal pipes or=
 fans - which tend to break). i have to admit i am a little alarmed at the =
world-wide energy consumption of bitcoin: personally i would very much pref=
er to be involved in eco-conscious blockchain and crypto-currency products]=
.

If you mean miner power usage, then power efficiency will not reduce energy=
 consumption.

Suppose you are a miner.
Suppose you have access to 1 watt of energy at a particular fixed cost of 1=
 BTC per watt, and you have a current hardware that gives 1 Exahash for 1 w=
att of energy usage.
Suppose this 1 Exahash earns 2 BTC (and that is why you mine, you earn 1 BT=
C).

Now suppose there is a new technology where a hardware can give 1 Exohash f=
or only 0.5 watt of energy usage.
Your choices are:

* Buy only one unit, get 1 Exohash for 0.5 watt, thus getting 2.0 BTC while=
 only paying 0.5 BTC in electricity fees for a net of 1.5 BTC.
* Buy two units, get 2 Exohash for 1.0 watt, thus getting 4.0 BTC while onl=
y paying 1.0 BTC in electricity fees for a net of 3.0 BTC.

What do you think your better choice is?

That assumes that difficulty adjustments do not occur.
If difficulty adjustments are put into consideration, then if everyone *els=
e* does the second choice, global mining hashrate doubles and the difficult=
y adjustment matches, and if you took the first choice, you would end up ea=
rning far less than 2.0 BTC after the difficulty adjustment.

Thus, any rational miner will just pack more miners in the same number of w=
atts rather than reduce their watt consumption.
There may be physical limits involved (only so many miners you can put in a=
n amount of space, or whatever other limits) but absent those, a rational m=
iner will not reduce their energy expenditure with higher-efficiency units,=
 they will buy more units.

Thus, increasing power efficiency for mining does not reduce the amount of =
actual energy that will be consumed by Bitcoin mining.

If you are not referring to mining energy, then I think a computer running =
BitTorrent software 24/7 would consume about the same amount of energy as a=
 fullnode running Bitcoin software 24/7, and I do not think the energy cons=
umed thus is actually particularly high relative to a lot of other things.

Regards,
ZmnSCPxj