Quote from: slaveforanunnak1 on August 01, 2014, 07:54:04 PM

Quote from: Possum577 on August 01, 2014, 06:10:05 PM

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 $500,00 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%

How does increased prices of BTC per USD increase the amount of power required to mine? The amount of effort required to mine isn't based on price but rather the amount of blocks that have been mined alredy...the price is meaningless.

Or, what am I missing?

Thanks.

I think what he is saying is this:

currently each btc is about 600 bucks! Thats the reason I'm about to stop mining. I think i've reached my ROI for my miners and at this price they are just wasting power. Might as well just buy the BTCs.
however, if the BTC was fucking half a mil, guess what?? i'll be starting my miners back up again, and so will everyone and their moms. Then the total power used to mine btc will reach astronomic amounts. Unless, we can use solar cells, or some other form of reusable energy + ASICs to mine.

Correct, except the source of the power does not matter unless it is more expensive (network will use less of it) or less expensive (network will just use more of it). Also better ASICs do not matter because people will just buy more of them.

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