How long to mine 1 bitcoin calculator
Luckily for us, however, bitcoins seem to be going up in value and should maintain their value over time, unlike your mint condition Tiny the stuffed Chihuahua. But how do you get bitcoins?
You can begin by buying them outright, but the market is currently wild. In short, you should probably mine. But what is bitcoin mining? Think of it as work done by groups of people to find large prime numbers or trying keys to decrypt a file.
In fact, many wager that the DDOS attacks on many bitcoin-related services are direct action by hackers to inject instability in order to reduce the price. As it stands, mining solo is very nearly deprecated. The process of finding blocks is now so popular and the difficulty of finding a block so high that it could take over three years to generate any coins. While you could simply set a machine aside and have it run the algorithms endlessly, the energy cost and equipment deprecation will eventually cost more than the actual bitcoins are worth.
Pooled mining, however, is far more lucrative. While this is simplified, it is basically how the system works. You work for shares in a block and when complete you get a percentage of the block based on the number of workers alongside you, less fees.
The astute among you will note that I probably used twice that amount of electricity. My buddy Tom explained how to set up a pooled mining account so I thought it would be interesting to share the instructions.
You can either store your wallet locally or store it online. They may succeed, but it's more likely they won't, as their centralized principle will have a very expensive time to match the hashing power of the distributed bitcoin network.
Give your hashing power to the bitcoin Blockchain, screw the banks. To learn bitcoin and the Blockchain is a useful personal literacy project. It's a kindergarten for learning about encryption and privacy, both skills everyone will need to navigate with over the next decade and onwards. The Blockchain and it's emerging 'ecology' of technologies will replace more than just the "credit " card. Perhaps the coin's limited supply will be its strength and so worth the initial cost of electricity.
Preventing its manipulation and resulting inflationary tendencies may well be a value with the knowledge that it can't be manipulated and rob people of value via the money printing fractional banking system.
I absolutely agree with every single point brought up in this article. When I first heard of the existence of Bitcoin in , I remember trying to think of one single way that such a "currency" could be of any value to humanity in any way. I'm still yet to come up with or be convinced of a single way.
It's a shame that there are so many jokers out there who would prefer to increase their own material wealth by burning precious energy, wasting huge quantities of semi-conducting devices that cold be used for serious computing i.
I frankly don't care how much Bitcoin "protects freedom of speech", if you don't feel comfortable with having an online transaction being able to be tracked back to you by the police, perhaps you should reconsider said purchase.
The benefit is that its supply is dictated by an algorithm that cannot be manipulated to reduce its value by a government or central bank. It is also good for making anonymous, instantaneous, cash-like transactions over the internet with low fees. I have found BTC to be a great investment. Have you tried to get into Peer to Peer lending in Australia using Fiat currency? If you could gain access only available to sophisticated investors at the moment I can easily invest fractions of a cent worth of bitcoin over thousands of loans Yes it can be expensive to mine, so you don't, but regardless it's a tiny fraction of the energy used to manage even our currency let alone every currency in the world.
How much energy is used by say Armagaurd to physically transport cash every day? By bank tellers just going to and from work? By all the ATM's and bank servers? Actually printing our currency? I don't like that it uses so much energy but that's simply the nature of the beast and is essential to it being secure. This article is a waist of time - literally! To state my biases - I think bitcoin is a complete waste of time and would never be bothered with it.
I did whoever do some research before coming to this conclusion and have a sound knowledge of what a bitcoin is and the system that it works within. This article is so full of biases, untruths and misconceptions that it would be easier to write a complete factual article from scratch than it would be to correct the error in this one.
I commend you on your effort so far to understand the bitcoin payment network, it seems you have done some research into it. I think what you are missing though, is that the energy used by the bitcoin network is not 'wasted' or 'useless'.
The energy consumed is the very thing that gives bitcoin security as a currency. Think about Australian paper currency. But the resulting currency would have no security No, they spend a vast amount of energy and money producing and replacing paper currency, the machines that produce them, the buildings that house them the staff that run them etc.
The energy that the bitcoin network consumes enables the creation of something truly worthwhile: It is one that is not restricted to a few banking institutions, but allows anybody on earth with an internet connection to access it. A really interesting piece John. I can't help but wonder though as at least one person pointed out, what about the coins that have already been mined? Also, once the cost of mining them is more than what they are worth, I understand no new ones will be produced, but wouldn't the older coins still hold some value as a unit of trade, to be dictated by the market pricing?
I'm confused as to why coins already mined would get a zero pricing. That would imply they are worthless - I'd suggest they wouldn't be worthless while people are willing to trade them. Thanks John for an interesting article. I think the fact that costly calculations of no use to anyone, are used in creating bitcoins, may be a bit of a red herring. Is bitcoin any stranger than people accepting the current economic system? I have often thought that accountants would get better results handing out monopoly money i.
How long until this news 'article' is pulled? If only cash were as traceable as Bitcoin, there would be a lot less illegal activity. Every Bitcoin can be traced; transaction by transaction, back to its discovery, it's called a blockchain. This is what makes it secure and does away with a single 3rd party approver. The other major flaw with this article is it implies that the mining of Bitcoin will go on forever, and ignores all the environmental costs we currently accept in our stride.
How much electricity does the current system consume? Once a Bitcoin is mined, that Bitcoin will only ever consume energy if it's traded. I'd put a Bitcoin or two on the current system being far worse energy consumption wise. I'd also challenge the author to declare they have no conflict of interest in this article All I've heard recently is banks closing ranks around the Bitcoin issue, and now this. I wonder how the weighted average carbon footprint of all of Australia's paper and metal currency compares on a carbon-per-dollar basis to that of bitcoins, especially considering that notes and coins get retired from circulation and replaced periodically.
Whilst the longevity and stability of bitcoins is a valuable discussion to have, linking their viability to their carbon footprint seems a very, very long stretch to me, and the figures quoted for the energy required to mine one don't quite smell right to me either At least if there is an energy cost associated with creating them it does to some degree put a floor under their price though! I think that the inevitable way forward for currency is the complete removal of physical cash, and I think it is probably only a decade away.
Without cash, consumption tax i. I'm sure that there must be significant downsides to going cashless, and I'd be interested to hear what they are, because I cant really see any of significance and it just seems so obvious and inevitable. I agree with your assessment of the positives. However, here are a few down sides to a cashless society that can be seen by very ordinary person: Errors are onerous to have corrected.
It is difficult even now to change providers, with the accompanying need to advise every other body with who one deals; this would become more so if there were no cash system for small and frequent transactions - again, an invitation to defraud those less able to supervise their financial activities. AND 4 A system where all transactions are mediated through electronic systems is not only an invitation to forgo our privacy, but a guarantee that we do so. Number 4 is the down side that bothers me most.
It is not only about our sense of personal autonomy, but also freedom from being pestered by advertisers. Already I can't buy a book on line without being bombarded by other on-line retailers. I am so tired of this that I no longer use a credit card or any 'loyalty' cards and pay cash when ever possible.
Thanks Connie, you make good points Government payments to the vulnerable are already made electronically - anyone receiving welfare necessarily must have a bank account as far as I understand it. The problem only exists for the homeless who have fallen outside of the welfare net and rely on begging. This is still clearly a problem, but surely not an insurmountable one. Busking on the other hand would be pretty much dead as a pastime, and that would be a mostly sad thing. Cash is also vulnerable to theft albeit on a small scale , but more generally with the threat of violence around it.
Given that a very significant portion of the economy is already cashless, we would not be introducing new risks we already face them , so much as eliminating existing ones. As I said in point 2, a significant proportion of our economy is cashless already, so the administrative burden already exists. I would suggest that this administrative burden is inherently scale-able however and in the long run would be more efficient than a mixed currency economy.
I agree that this point about privacy is the most significant and structurally unavoidable problem. Whilst the advertising issue doesn't bother me at all a. You cannot walk m down the street in a city and not be bombarded with advertisements, b. I quite like getting new reading suggestions from my kindle and am happy to ignore the unsuitable ones!
The fascinating question and potential positive trad-off here in my opinion is the effect that a cashless society would have on crime. Crime would, by and large be forced into the crypto currencies, but the entry and exit of AUD from those currencies would still be traceable. Quite a few claims of "lack of research", and "what about cost of paper money", but no one seems to have thought to use Google.
Ten seconds yields the answer: An unintended consequence of the mining craze, as with all endeavours in their pioneering phase, has been a boom in energy-efficient, low-cost, complex processors. Anyway Professor Quiggan, if bitcoin is indeed a fatally flawed currency, a person in your position can rest easy, right? Surely Gresham's Law will eventually win out, no? I haven't read all the comments so forgive me if I am repeating someone else. Surely the problem here is the burning of fossil fuels for electricity rather than the Bitcoin mining using electricity?
Oops, I just contributed to the end of the world by using electricity to type this comment, eating Perspective would be a nice breath of fresh air. In a word tulips?
The only slightly longer version is that bitcoins for all the effort you put into trying to disparage them are inherently as valuable or as worthless as any other fiat currency by agreement between those who exchange it.
Trading in them may well in that case take on an aspect of speculative trading in any other commodity. I would argue that hedge funds raking over derivatives and options are also a damnable waste of resources producing adding nothing worthwhile to wealth creation in any truer sense of the word. Of course that might just be a prejudice of mine that's showing, but isn't this? Those who've the most to fear from crypto currency are probably a combination of the banks and their investors.
We may not like banks but investors include most of us, and all of us who've been sold the superannuation miracle. You may argue in that sense that it can't be allowed to succeed because of some deleterious effects of the stability of other sectors of the market we know and love. I think ultimately though the technology in a good way questions the viability of currency exchange under the current unnecessarily expensive auspices. There simply is no reason or justification for the fees and charges that are levied on most forms of transaction if you can secure it with crypto technology.
I was wondering when someone was going to point these things out. Advances in parallel computing technology change the numbers somewhat, but Professor Quiggin's overall argument still holds. Actually, bitcoin has a built-in self adjusting difficulty mechanism which aims to keep the creation of bitcoin at a constant rate, currently 25 bitcoins every 10 minutes.
Advances in computing won't make any difference, as the difficulty of the computational problem will automatically adjust. That's just like saying because there is only a limited number of sporting trophies, no-one will use anabolic steroids, HGR, blood transfusions.
Of course the individual seeks a competitive advantage even if it doesn't result in a greater number of prizes for the economy as a whole. Yes, this does drive development of optimised systems even though it won't result in more bitcoins overall. Very surprised to see such a one sided and unsupported article written by an academic. What's your backing and research for this argument? Most articles I've read, growing acceptance of Bitcoin at various stock exchanges and the beginnings of banks to recognise bitcoin services seem to suggest the exact opposite of this.
This article is written like 1st year's facebook rant, too emotional to be taken seriously, and so much so that you almost have to suspect the Professor is actually testing a hypothesis for some research. Probably around testing if the thought on correlation of bitcoin media still has a volatile effect on bitcoin pricing i.
Looking forward to reading the results, professor. What a flawed article. Firstly, Once the bitcoin exists it doesn't wear out or be consumed so its not necessary to create more. At the moment its the end of the gold rush. Once the number of coins stabilizes due to new ones being out of reach the currency will stabilize.
Secondly, You mention that it takes 3 tonnes of C02 to produce a bit coin but then said if the price of power doubles the amount of CO2 produced halves. That makes no sense. The amount of energy produced to build the coin is fixed therefore the amount of carbon produced is fixed.
The only variable in the equation is the cost of power. If the price of electricity doubles, then you need to find a way to make a Bitcoin with half the power, in order for it to still be profitable.
A by-product would be half the emissions say 1. I'm going to go out on a limb here and congratulate Professor Quiggin for writing one of the funniest, tongue-in-cheek articles I have ever read. Judging by the number of furious and super-serious replies he's garnered to date I think he may well be in line for a major comedy award complete with a Bitcoin cheque.
I thank him for not keeping it until April 1 next year - in a world where conventional business models are breaking down I think it's only appropriate that spoof articles can be traded any day of the year and not have to attract the sorts of penalty rates that keeping them for only that one preordained day in April normally attract.
If I'm right, you must be laughing your nuts off reading what you've generated from the gullible here today. I think this article is a waste of energy. Thousands of computers, reading an article, that the author doesn't even truly understand the concept of bitcoin or alt-coins.
I've seen hydro powered bitcoin operations. So your statement for that is invalid Gold is mostly worthless, as the plating in electronics boils down to pennies these days instead of the dollars 30 years ago. Ask any person or company that tries to recycle gold from electronics. Most of this article is based on misguided information and a lack of fact. I think the author needs to get a clue, or become more educated in what they are tearing down.
I was going to make my Daughter a kite, but after reading the worthy Professors argument about the use of "dirty" power I decided that the kite components, paper, string and plastic struts, would have used much of this dirty power to manufacture, and added to the Bitcoin crisis this was way over the top. So I burnt it. Whilst Bitcoin has many of the advantages that previous posters have pointed out, I think many are also missing the point of this post: For households to acquire Bitcoin equivalent to their current "cash and near cash" holdings would require electricity production equivalent to several times their current annual household electricity consumption.
Given we still need our fiat cash to pay our taxes etc. That I think is the point of the article. That's not how bitcoin mining works. It's not like it costs x electricity to make a bitcoin and then twice that to make two, as if you were physically digging gold out of the ground. It could easily cost less next month if fewer people were trying at the same time.
It costs electricity and computing power to secure the network. Not to mention we don't actually need any more to be created. The world could get on just fine with the 15 million or so that are already out there. The new ones are just incentive to get people to contribute power to keep the network secure. Bitcoin is far more trackable to authorities than cash has it has a record of past transactions called a block chain that logs and displays every Bitcoin transaction in real time, and makes that data available to anyone.
It is not controlled by any government, though it can be taxed. The free market determines its value and not the committee of a central bank or finance minister. Transactions are almost instantaneous and cost free. Mining will stop because the algorithm is limited to 21 million coins. Each coin is divisible by 8 decimal places allowing fractional exchange.
It can operate concurrently with existing fiat money, real currency gold and silver or other crypto-currencies such as Litecoin. It may be the way of the future, in which banking will be greatly reduced in importance as lending will be peer to peer, all transaction public and coins held in an individuals own crypto currency coin wallet.
A currency revolution not less important than the invention of coinage in ancient times. Or a passing fad. In the meantime no harm in having a few Bitcoins as a hedge. This is an incredibly disingenuous article. The Professor has basically outed himself as a "flat-earther" of the economic world.
There wasn't even any attempt to compare the energy use of other currencies versus bitcoin? What about all the mining for hard currencies? Or the towers and towers of bankers sitting at computers that Bitcoin could completely tear down!?
Other currencies are exactly the same, using bank's supercomputers to verify transaction, what's their energy use? Also even the slightest bit of research would have found that bitcoins have become harder to mine deliberately! Bitcoins have several advantages over fiat currencies - one of the my favorites is that they can't be devalued by central governments! They have inherent scarcity!
Just crazy, I'm ashamed that my Universities' name is also attached to this nonsense. Lots of complaints about "no research" on my part, but none of any attempts to do research by the critics. The Bitcoin network does more than mint money. It processes transactions allowing peers to transact without any censorship. It does this in a secure and immutable way without any central trusted party. This nuance seems to have eluded you. John, a section of your article reads "Switching even a small part of a typical household's financial transactions to Bitcoins must therefore entail a massive increase in electricity use".
This logic is incorrect. The number of transactions in the bitcoin network is not relevant to the amount of power consumed. Miners expend energy by solving blocks, not individual transactions. A block can contain zero or many transactions. A block is mined approximately every 10 minutes regardless of how many transactions are being created.
The core software controls this period automatically by altering the difficulty of the cryptographic puzzle. As more miners join the network, the difficulty is increased to keep the block solution period at 10 minutes.
As miners drop off the network, maybe because they are inefficient or have higher energy costs then the difficulty is reduced. It's not just the cost of one physical note, it's the cost of the whole system that secures, transports, regulates and supports that note and its 'value'.
Think how much better off the planet would be if all the bankers were out planting trees instead of sitting in air-conditioned skyscrapers, for example. You are right, however, that the computer cycles used in bitcoin mining could be put to better use.
That is a shame, but I think Satoshi did a pretty good job with other aspects of Bitcoin. Because you don't seem to understand that bitcoin is not just the currency, it's the distribution network as well. That said, your point of energy consumption is already well known which is why there are other cryptocurrencies that use proof-of-stake, delegated proof-of-stake, etc.
Every bank in the world is researching ways which they can leverage blockchain technology to reduce their costs precisely because the current system is so inefficient. I can't speak for others, but I never disputed your core claim. Just the background and supporting evidence was anything but.
There are many statements in your piece which are misleading at best. When you say this: It may very well be complex, but that calculation confirms all the previous transactions. It has tremendous value. If you are going to make a connection between this calculation and the electricity consumed to make it work, then it's only fair to compare that against the global financial system's electricity consumption.
For the benefit of me and the hundreds of others who don't know what a Bitcoin is, could somebody please explain. Bitcoin is a form of electronic cash. It differs from regular cash in that it can be transmitted across the internet. There are many types of electronic cash, but bitcoin is the most widely accepted of them. Please note that credit cards, paypal, bank transfers etc.
You cannot use them unless you have a bank account. Your bitcoin is like the computer record in your bank that says how much money you have in your account, with the following differences: The computer record is in a public ledger, visible to anyone in the world.
This ledger is called "the block chain". You can receive bitcoins from, or send them to anyone in the world for a very small fee, and your transaction cannot be blocked by corporations or governments. Most shops don't accept bitcoin payments yet - they're mainly useful for online purchases.
You keep track of your bitcoins with a program called a wallet, that runs on your computer or phone. Your wallet has a number, which identifies your coins in the public ledger. Without your wallet, you can't spend your coins, so don't lose it!
This sensationalist puff piece has no grounding in reality. The Bitcoin network along with the bitcoin tokens has enormous utility that seems to go right over the author's head. The energy used isn't just for creating new bitcoins. The computations and consequently the energy consumed is what secures the network and gives it trust. This trust is distributed across the network, not relying on any central authority. This is why bitcoin is the people's money.
Bitcoin won't go away and the value won't approach zero as the author seems to hope. Wake up, John Quiggin. The world is changing and guess what, technology matters. Have you not learned your lesson? The internet isn't just for geeks. So here are some back of the envelope calcs to check the author's numbers. The most efficient bitcoin mining machines have a mining speed rated at 0.
This is similar to the author's numbers. It seems pretty emissions intensive - and it will become even more emission-y as the mining rate continues to drop - unless a low-carbon electricity source can be cheaper than coal.
The flaw in the argument is that this is only the cost of creating the coin. Among other things, it also includes the cost of distribution, security and auditing.
For the value you have calculated to have meaning you would have to compare it with the cost of either: Or - Mining and refining the materials used, turning those materials into a credit card, assigning and adding value to that credit card, transferring the value from the users bank to a credit card transaction clearing house and from the credit card transaction clearing house to the sellers bank, the systems both IT based and people based used to detect and prevent fraud in all three organisations, The systems used to keep internal and external parties from gaining access to this highly sensitive information, The systems used to monitor the other systems for maintenance purposes.
Once people become a part of these "systems" the cost financially and in CO2 emissions goes up exponentially. Bit coin removes duplication and people from the equation. Yes, you make some good points and of course fiat currency has embedded and ongoing emissions.
Do you have any data to compare? Do the calculations for bitcoin mining actually need to be otherwise purposeless?
If these computers were doing something useful as part of mining Then none of this would matter. Or if it has to be otherwise useless, can its creation be limited to electricity markets with proactive carbon prices? Professor, What is the cost to the environment of inflation and government regulation of fiat currency?
Perhaps you should be doing more research into the possible applications for bitcoin. I was initially sceptical about Bitcoin, that is until I did my own research on it. Bitcoin will be the single most transformative technology the world has seen since the internet, like many emerging technologies it takes time for the infrastructure to be built. I've become a strong believer and supporter of Bitcoin, it is here to stay, it can't go away and is gaining in popularity and acceptance.
Australia's big four banks have attempted to stifle bitcoin in Australia, that alone should be reason to check out for yourself why they are so scared about it and the benefits to you of a decentralised currency. Also check out what the Winklevoss Twins the guys who started Facebook with Mark Zuckerberg are saying about Bitcoin - In their own words they "eat sleep and breath Bitcoin".
It is far more than just a currency. It is the future and it's here to stay. Just a thought here from someone who doesn't know much about Bitcoin: All the Bitcoin supporters in this comment section repeatedly mention Bitcoin creation is limited to 21 million Bitcoins. What is to stop an interested party from purchasing every single Bitcoin created and refusing to trade them, essentially making Bitcoin redundant?
You will need to have a lot of money. Current market value is over 5 Billion AUD, and this would increase if someone was buying them up. You will have to convince all current owners to sell to you. What's to stop someone buying all the gold in the world? Really fundamentally the same thing, the only significant difference there is that more people care about gold and the remaining supply of gold on Earth is substantially larger than the remaining supply of bitcoins.
Maybe I'm stupid, but I just don't see how this is could possibly result in significant harm to the environment. This article claims that generating four Bitcoins consumes the same amount of energy that the average US household uses. Taking that on face value, we need to know how many Bitcoins are being generated in order to see exactly how much energy is being wasted.
As there are currently somewhere around 53, Bitcoins being mined each year, that's a worldwide total energy equivalent of 13, average US households. That's a minuscule amount compared to, for example all the energy consumed by the hundreds of millions of US households.
The number will halve next year and continue to halve every fourth year. The article also seems to assume that the amount of energy consumed has some connection to the number of transactions made. Quiggin does not once mention the word "blockchain. Consider this sentence from Quiggin's article: Fortunately, it's unlikely that the digital currency will survive long enough to generate the environmental disaster that would arise if it became a major part of the financial system.
To see the math to go from the normal difficulty calculations which require large big ints bigger than the space in any normal integer to the calculation above, here's some python:. Current difficulty , as output by Bitcoin's getDifficulty. There is no minimum target. The maximum difficulty is roughly: The difficulty is adjusted every blocks based on the time it took to find the previous blocks.
At the desired rate of one block each 10 minutes, blocks would take exactly two weeks to find. If the previous blocks took more than two weeks to find, the difficulty is reduced. If they took less than two weeks, the difficulty is increased. The change in difficulty is in proportion to the amount of time over or under two weeks the previous blocks took to find. To find a block, the hash must be less than the target.
The offset for difficulty 1 is. The expected number of hashes we need to calculate to find a block with difficulty D is therefore. That means the hash rate of the network was.