Quote from: stompix on March 19, 2021, 06:21:45 PM

Your assumption has one major flaw

If you look at the price and hashrate evolution you will see that hashrate has not managed to keep up with the rise in price, and thus energy consumption, why? Simple because there is no gear to burn that electricity and mine available.
As of right now, those two indicators are so far away it makes no sense trying to find any relation between them.

The second problem is that electricity consumption follows price, miners don't buy gear, plug it in and then think wait, we need to raise the price to x level to make mining profitable, it's completely the opposite if the price goes up, profits increase buying gear becomes a good investment, electric consumption goes up.

But this is my argument exactly, perhaps I did not explain it clearly, I am saying that the price drives electricity consumption - as miners make more money (due to a rising price) then they will spend more money on electricity, thus electricity consumption follows the price. However, I am also saying that there will be a cap on the amount of electricity that the network can use and when we are at or about that cap it will signal the approximate maximum sustained price, as if miners cannot acquire more electricity their costs will not increase and there will be no reason for them not to sell at a lower price.

Quote from: stompix on March 19, 2021, 06:21:45 PM

Now to your assumption:

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Assertion – the proportion of worldwide electricity generation that may be consumed by the Bitcoin network cannot exceed 1%.

Why? Who is stopping it to go to 1.0007%?

That is not an assumption it is an assertion - it is the crux of my argument - I am saying that the network will not exceed 1% because socially and economically there is no justification for it to do so. There is insufficient benefit to the world as a whole for more than 1% of worldwide electricity generation to be consumed by Bitcoin. Accordingly people (individuals, corporates, governments, etc.) will not make the investment decisions and compromises required for more than 1% to go to Bitcoin.

Note I fully accept that 1% is just a guess - it may well be 1.0007% or even 2% - the key point is that I am arguing that there is a practical cap. It may be better to re-word the assertion to something like:

Assertion – the proportion of worldwide electricity generation that may be consumed by the Bitcoin network cannot exceed [N%] unless there is a step change in the general perceived value delivered by Bitcoin.

Quote from: stompix on March 19, 2021, 06:21:45 PM

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Between now and the next halving (mid 2024) the maximum sustained high we should expect the bitcoin price to reach will be no more than about $95,000.

Who is sustaining this price? One thing I can tell you for sure, it's not miners.

I am using the word sustained in its meaning for an extended period not to mean held up by something. Since there is a significant lag between price changes and additional gear coming online price changes need to persist for some time for them to have a meaningful effect.

Quote from: stompix on March 19, 2021, 06:21:45 PM

Now, to understand simply why your projected growth is not realistic you should look at your own numbers:

You're capping the price at double the current one based on the assumption that bitcoin staying at a certain level requires 0.47% of the world production which is false.

The problem arises with the fact that even if the price doesn't move, with current profitability if enough gear will be released on the market the power consumption could still double even if the price retracts.
Remember that we were doing around 130EH/s when the price was 10k, and now we're barely at 160EX.
So if the electric consumption was already at 0.3-0.4% when the price was at 10k it means that we're already far beyond the above levels imposed by your 1% limit, but somehow still under Grin

Firstly that is why I have set my "limit" at more than double the current consumption - as I say above I don't know what the limit is, but I am arguing there is one and for the sake of the argument I picked a value to hang my hat on!

Secondly my prediction only sets an upper limit it does not set a lower limit at all. As you rightly say there is nothing to prevent the price being far far below the maximum implied by the power consumption cap. However, I would expect total consumption of the network to fall if the price fell and remained significantly lower for an extended period.

Also let me add this is mainly a thought exercise - so thanks for your replies which are helping to refine my thoughts.