Bitcoin mining cost: proof of work, waste, but fair

Bitcoin mining cost: proof of work, waste, but fair

“Proof of work mechanism (POW)” the cost is reasonable in bitcoin mining in? Department of computer science University College London center TomasoAste block chain technology at University College London, said the current mining cost is too high and the waste, though, but it is fair and reasonable. Aste recently carefully check factors related to bitcoin mining, and the determination of the cost of the workload that recently made a subject of “proof of bitcoin workload cost is reasonable” article.

Bitcoin mining cost: proof of work, waste, but fair

Aste pointed out that the two sides have proved that bitcoin distrust in the Internet exchange value and does not require any third party intermediary or trust institution, bitcoin’s market value has reached $10 billion a day, tens of thousands of transactions are facing serious challenges of attack.

The calculation process of intensive

The sealing mechanism is crucial to bitcoin network authentication and encryption, because it involves the computation intensive. A lot of nodes of the bitcoin network are engaged in the verification process.

This process provides a false and repeat vote to avoid compulsory voting to confirm a mechanism to calculate performance. In order to ensure the safety of the number of valid votes, the system uses the encryption process that is sealed, intensive computing. This process includes a mechanism called “the proof of work”. First to complete this challenge node will get bitcoin reward. This mechanism is called “mining”, to create new bitcoin.

Global miners per second can produce billions of hash values. The use of existing equipment, calculation of 1 billion hash value will consume 0.1 to 1 joules of energy. Therefore, the world every second there will be about 1 billion watts of electricity are used to create a valid proof of work mechanism.

The power consumption is about $50000 per hour, of course, the cost of electricity in the world are not the same.

The miners reward: 12.5BTC

According to the current process of the bitcoin system is processed per hour 10000 transactions, so the transaction costs about $5. Users do not need to pay the money. The miners to pay this cost and will be rewarded with a new bitcoin.

Personal proof of work reward is 25 coins, in accordance with the current price equal to $15000, but now the reward has halved.

The mining community every 10 minutes to create a block of electricity cost is 50000/6, about $8333, they received a reward of about $15000. This allows to take into account the infrastructure and hardware cost, the mining operation is still profitable.

The mining operation cost of electricity a year spent a total of about $400 million. This can be seen as a huge waste.

Aste pointed out that now block half awards to 12.5BTC, which makes the profit margins smaller miners.

Proof of work benefits

Proof of work to ensure the blockchain is always a kind of pure mechanism, it is effective to let the whole community competition that transaction, at the same time makes the attack of the bitcoin network will pay a huge price.

The proof of work cost is reasonable? Aste said the cost should be the dual consumption directly prohibitive in see this price.

When a person tries to consume the same bitcoin transactions to different users and get more more bitcoin, double attack will appear. The attacker will try double spending bitcoin more. The consumer is usually restricted in a block, and this value is about 100W dollars.

In a block, if a transaction amount than all the value of the transaction must be high, it will attract the attention of the network. The real situation will limit the double consumption value is 100W dollars. Although the repeated consumption will be repeated verification, but this does not affect the present results.

From attack

An attacker could also try to get a part of the $100w. To do this, the attacker must ensure that repeat transactions have been identified. This requires a fork, two blocks are connected with the previous block.

If the attacker has enough computing power, it is possible to produce two effective hash value to generate block packing stamp, makes the two transaction is confirmed. For the final settlement, he must wait for 6 new blocks into the block chain to ensure that the transaction is unlikely to be modified to restore.

The attacker must be in double spending is prior to the settlement of 6 effective hash value. The attacker must also be in the shortest time artificially two bifurcation in one branch legalization. This system will think another bifurcation is effective, and then let the other miners to continue to expand the chain block. The attacker can also expand the chain block.

Aste pointed out that if no one goes to the expansion of the bifurcation idea this is unrealistic, but this assumption is the most ideal for this purpose hypothesis.

The attacker away

The bifurcation of the man-made expanded fraud cost is 6 times the cost of the proof of work. The attacker will verify whether he cost less than income. The breakeven point is represented by the following formula: proof of work fair balance cost = a block in the repeated consumption part of the value to the block number / settlement.

According to the latest price, the attacker repeated consumption a block value by 60%, then he double spending $600000.

6 blocks of each block in the settlement to estimate the cost of the fair and balanced work proof:

Each block in the proof of the fair and balanced workload cost $=100000.

This calculation overestimated the attack cost, in order not to be noticed, the attacker can only be possible to block the small double consumption value. A long branch after one hour was confirmed again by the same block all miners expansion without other people found traces, it is not possible. Then, considering 10% of the cost is reasonable, it is already a sufficient deterrent to the attacker.

The proof of work is wasted, but also necessary.

Aste summarizes the current bitcoin proof of work cost, it is high cost and waste, but also essential. Cost reduction can be improved by for settlement or in the early detection of the bifurcation of the block number. At the same time, the attacker can attack mine pool or steal electricity to cut costs.

Aste pointed out that the mechanism of intensive computing there are other building block chain does not require proof of work.

Proof of work mechanism is the creation of qualified voters in an anonymous distrust system. The mechanism for verifying the identity of the voter or avoid repeating the process does not control the voters, which can remove or reduce the workload that demand. But this function must be able to relax other characteristics, such as openness, equality, distributed authentication or anonymity.

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