Quote from: pa on October 07, 2015, 10:26:00 PM

Quote from: Biodom on October 07, 2015, 10:14:49 PM

Quote from: pa on October 07, 2015, 10:05:16 PM

Quote from: sgbett on October 07, 2015, 09:49:28 PM

its all a bit pie in the sky but I can see this kind of price action giving people a real hard time!

How do you respond to Burt W's objections regarding the implausibility that so large a fraction of the world's electricity supply would be diverted to mining? Bitcoin to the moon means electricity price to the moon.

efficiency of mining keeps increasing, however, difficulty is increasing as well.

In March 2014 antminer S1 was producing 0.08BTC/day while hashing at 178GH/s
In October 2015 antminer S7 is producing 0.04BTC/day while hashing at 4860Gh/s
So, in mere 19 mo, hashing speed of the consumer machine increased ~27-fold.
Efficiency per watt went from 2 to 0.25-an eightfold increase in efficiency.
However, difficulty increased ~54-fold, making the best (so far) machine to produce just half of what it's predecessor did 19 mo ago.

This is the Burt W post I was thinking of: https://bitcointalk.org/index.php?topic=720179.msg8135635#msg8135635

Quote from: BurtW on August 01, 2014, 12:56:52 PM

We cannot/do not want to get to $500,000 per BTC any time soon. Here is the math behind it:

https://bitcointalk.org/index.php?topic=694401.0

If BTC were to go to $500,000 in this era it would cause a catastrophic mining bubble:

$500,000 x 25 = $12,500,000 per block = $75,000,000 per hour

$75 million per hour would drive the mining to attempt to use 675 GW. This is about 30% of all the power generated on the planet.

So, in order to keep our power consumption under about 2% of world wide power production, we cannot/do not want the price to get to $500,000 before era 6, which is about 2033 or so.

Using my previously derived formula for the power consumption:

P = (6(50/2^e) + f)(x)(1 - g)/c [kW]

where:

x = exchange rate [USD/BTC]
e = era [0..32] (we are currently in era 1)
f = average fees per hour [BTC/hour]
c = cost of energy [USD/kWh]
g = average gross profit margin [unitless ratio]

we can look at the power consumption in each era assuming a price of $500,000 per BTC.

In order to make it simple I will make the following assumptions:

x = $500,000 per BTC
f = fees per hour will keep the coinbase above 6 BTC/hour (1 BTC/block) in all eras
c = $0.10 per kWh
g = 0.1 miner gross profit margin

Code:

Original target Subsidy Est Fees Power % of total world
Era starting year BTC/block BTC/hour GW power production
--- --------------- ----------- ---------- ----- ----------------
  0 2009 50.00000000 0.00000000 1,350 58.41%
  1 2013 25.00000000 0.00000000 675 29.20%
  2 2017 12.50000000 0.00000000 337 14.60%
  3 2021 6.25000000 0.00000000 169 7.30%
  4 2025 3.12500000 0.00000000 84 3.65%
  5 2029 1.56250000 0.00000000 42 1.83%
  6 2033 0.78125000 1.31250000 27 1.17%
  7 2037 0.39062500 3.65625000 27 1.17%
  8 2041 0.19531250 4.82812500 27 1.17%
  9 2045 0.09765625 5.41406250 27 1.17%

Yeah I remember that thread, it was food for thought indeed. I think it reconciles with the idea that we can't (sadly) see 560k this november - as I said a couple posts back my timing was waaaaay out Wink

That hypothetical 4 year bubble though, that could hit in 5 years time and still work out ok in terms of power (imho).

For now we probably have a smaller bubble in stall one that takes about 3 months, maybe even touches 5 digits, followed by 5 years of 'bear' back down to low 4 digits.

"Ouchies" springs to mind.