Post
Topic
Board Economics
Re: Estimating the energy/power consumption of the Bitcoin Network
by
raid_n
on 13/10/2014, 19:51:12 UTC
That is an interesting point with respect to the dream of having 1 BTC = $100,000 (or pick your favorite high number).

Using my previously derived formula for the power consumption:

P = (6(50/2e) + 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 $100,000 per BTC.

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

x = $100,000 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
Era   starting year    BTC/block    BTC/hour      GW
--- ---------------  -----------  ----------  ------
  0            2009  50.00000000  0.00000000  270.00
  1            2013  25.00000000  0.00000000  135.00
  2            2017  12.50000000  0.00000000   67.50
...

Based on the same premise of a 100,000 USD bitcoin for this era (1):
I am assuming an energy consumption of 0.5 W/GH/s and 1.5 GH/s/USD for new miners and a current hashrate of 2,65×10¹⁷ Hashes per second.

Code:
6,75×10¹⁹ ( hashrate at efficiency of 0.5W/GH/s for 135.00 GW)
6,75×10¹⁹−(2,65000000×10¹⁷) = 6,7235×10¹⁹ ( the outstanding hashrate required)
6,7235×10¹⁹÷(1,5×10⁹) = 44823333333,333333333 USD (The amount of USD needed to buy mining hardware with the above specs to actually reach that hashrate)

Does that make sense? Did I miss something?

I'll look like an idiot if I've made a gross miscalculation but according to this you would need roughly 44 billion USD in current mining equipment to actually reach
that energy consumption level.

[edit]

First mistake already! ;-) (I used a more specific hashrate beforehand I have no idea where that number came from! Calculator memory? who knows. Apparently it wasn't insanely far off)
Numbers before edit: 6,643811699×10¹⁹  outstanding hashrate in usd ->  44292077993,333333333 USD