1) The total electricity used in Bitcoin mining is pegged to the bitcoin supply, which is decreasing towards zero. So the amount of electricity used should be decreasing. It may temporarily increase while prices go up, but the long term trend will be towards zero. And transaction fees shouldn't change this too much. Competition amongst miners should eventually drive those towards zero too.
2) It's not just bookkeeping that's happening, it's dispute resolution. Currently your financial disputes are solved by calling your credit card company and having them deal with it. There's a whole network of dispute resolution services going all the way up to the SCOTUS. All of which uses resources. Bitcoin does all that through mining.
3) It's not actually that much power. The hashrate is 7m GH/s. Let's assume 2 watts per GH/s, that's 14 megawatts. You could power that with three big wind turbines.
> The total electricity used in Bitcoin mining is pegged to the bitcoin supply
No, its not. "Mining" is a misleading term based on the early-phase reward. A better name for the function would be "providing resources for transaction processing". In the early phase, the reward is new bitcoins (hence, "mining" as the common name for the process), in the late phase it becomes transaction fees.
> And transaction fees shouldn't change this too much. Competition amongst miners should eventually drive those towards zero too.
Competition among miners only drives transaction fees to zero if there are a large number of miners compared to the number of transactions -- i.e., if either usage isn't high or lots of people are dedicating resources to mining (and thus, electricity usage isn't going to zero.)
> It's not just bookkeeping that's happening, it's dispute resolution.
No, its just bookkeeping.
> Currently your financial disputes are solved by calling your credit card company and having them deal with it.
True for certain classes of financial disputes when credit cards are used, but not generally the case. But, whatever.
> There's a whole network of dispute resolution services going all the way up to the SCOTUS. All of which uses resources. Bitcoin does all that through mining.
No, it does not do the same function as the entire court system in terms of financial dispute resolution. Disputes involving Bitcoin are still resolved through the legal process. In fact, the absence of chargeback like mechanisms means that any disputes require escalation to more expensive mechanisms of dispute resolution sooner.
(Now, if transactions are done in a manner which is anonymous, dispute resolution may be practically impossible in the same way that that can be become the case if you are doing anonymous drops to exchange cash and goods -- but that doesn't mean that mining is fulfilling the dispute resolution function, just that you've adopted a protocol which excludes dispute resolution.)
If there is zero electricity being used to mine bitcoin, it has failed and will be worth nothing.
Describing the relationship as 'pegged' is also sort of aggressive. A better statement would be that most people will only spend electricity if they are able to recover that cost in bitcoin (and probably a small profit). So there is some upper limit of mining activity to be expected given the current bitcoin price, size of reward and typical efficiency of mining hardware (cost of electricity will also factor in, but that should be relatively stable).
Except the lower limit is pretty close to the cost of electricity too, since there are lots of opportunistic miners interested in bringing more capacity online if there's a profit to be made.
So, if the upper bound and lower bound are pretty close, what's wrong with saying "pegged"?
Things haven't been stable enough for that to be true.
For example, you've put the current electricity consumption at something like $100,000 a day (14,000 kw * 24 hours * $0.20 = $67,200). The mining reward is closer to $3 million per day.
1) The total electricity used in Bitcoin mining is pegged to the bitcoin supply, which is decreasing towards zero. So the amount of electricity used should be decreasing. It may temporarily increase while prices go up, but the long term trend will be towards zero. And transaction fees shouldn't change this too much. Competition amongst miners should eventually drive those towards zero too.
2) It's not just bookkeeping that's happening, it's dispute resolution. Currently your financial disputes are solved by calling your credit card company and having them deal with it. There's a whole network of dispute resolution services going all the way up to the SCOTUS. All of which uses resources. Bitcoin does all that through mining.
3) It's not actually that much power. The hashrate is 7m GH/s. Let's assume 2 watts per GH/s, that's 14 megawatts. You could power that with three big wind turbines.