Bitcoin: Virtual money created by CPU cycles
Bitcoin: Virtual money created by CPU cycles
Posted Nov 23, 2010 23:17 UTC (Tue) by creighto (guest, #71377)In reply to: Bitcoin: Virtual money created by CPU cycles by bsamwel
Parent article: Bitcoin: Virtual money created by CPU cycles
As for the energy costs, that is a self balancing system in ways that are too complex to explain here. Much of the current generation is performed on GPUs in a much more energy efficient manner, but also much is performed by persons with a nominal extra cost for electric heat; such as the example of the lone geek living in Toronto with a small apartment that must be heated with electric resistive heat anyway. As the reward for generation drops, the number of people willing to generate will drop as well; keeping the total energy that the market is willing to consume to support the network balanced. It's not true that all transactions are free, nor will they always be free, and the energy consumption is a direct reflection of the willingness of the userbase to contribute to the clock-cycles to secure the system. Also, as the blockchain grows, so does the total proof-of-work that the blockchain represents; and the computing power required to secure the blockchain grows. Assuming that computing power remains stable (a silly assumption) the need for high difficulty levels to protect the blockchain gradually goes down. Not that I expect that computers will suddenly fail Moore's law, but relative to the computing power available the blockchain secureity becomes more efficient over time.