Wednesday, March 8, 2017

Whoops, transaction costs are not zero

Motherboard: Unfortunately, it's more likely that things are getting worse. A new index has recently modeled potential energy costs per transaction as high as 94 kWh, or enough electricity to power 3.17 households for a day. To put it another way, that's almost enough energy to fully charge the battery of a Tesla Model S P100D, the world's quickest production car, and drive it over 300 miles.
OK, we learn that a bitcoin ledger service has a $15 electricity cost. I dispute the method a bit, there is wide variation in electricity prices. But let's accept the numbers. It is still a valuable service, where is a niche in which a $15 transaction costs is measurably zero, like multi-thousand dollar transactions. Bitcoin still gets two markets, the ventral bank hedge market and the base money market for many digital coins.

In the sandbox, the null ledger service is fine over some finite transaction sequences.  The electricity cost is the same as an ad service, without the images. The sandbox pricing technology supports the base money concept, drop a bunch of bitcoins in an S&L, and let smaller transactions pick it apart and put it back together.

No comments: