This paper was published when there were big fights going on about whether the block size should be increased. Om camp argued for the status quo, which was causing high transaction fees and long backlogs. The other camp argued for a larger block size, which would reduce or eliminate the transaction backlog. Eliminating the backlog was generally considered a good thing, and the arguments were mostly around the block size, but this paper essentially came in and said "wait a minute, we might actually need the backlog once the block reward is 0."
Not to disagree, but to emphasize that the idea that the only way to increase bitcoin capacity is increasing the block size is in error. You didn't push that idea but others do.
Nearly every release of bitcoin over past 8 years has increased capacity or efficiency, often both.
I think this is depends on how large the network has scaled at the time the block reward dies. If BTC is doing 100x visa levels, each transaction fee can have a tiny fee and mining would still be viable.
That being said, I don't BTC has any intention of scaling to that degree (or at all really). The BTC devs seem much more concerned with building second layer products like lightning network. All these products actually reduce the number of on-chain transactions and by extension, miner revenue.
The problem is that lightning is basically federated Paypal. You have to trust your specific provider to some degree. If he stiffs you, you can get arbitration on-chain. There are almost zero barriers to entry so Paypal can be replaced by Paypal 2.0.
I don't believe for one second that when you increase the size of the audience that anyone will care which provider they use. In practice that means they will just use Visa, Mastercard and Paypal, maybe even by skipping lightning entirely.
"The average energy consumption for one single Bitcoin transaction in 2020 was 741 kilowatt-hours. This was significantly more compared to the cumulative 100,000 VISA transactions with only an energy consumption of 149 kilowatt-hours."
You can. But it is not a good metric. Assuming the difficulty adjustments ramp down you could still mine blocks with a couple of raspberry pis.
The energy consumption and capital investment in hardware is Bitcoins security model. As it would require you to put in the same amount of HW and energy to subvert the mining process. Probably we are at a point that this is almost impossible other than a state actor or a global conspiracy.
The block size increase/decrease is also tied to security. There are latency implications as well as the fact that some nodes might drop of if you increased the block size.
In both cases it comes back to security rather than the transactional throughput. I am a huge proponent but still kind of struggle with the idea of how much resources this thing sucks up.
But then again if it truly becomes the worlds ledger for wealth preservation... idk ... might be worth it.
Because that would imply linear scaling. There is a fixed energy cost that doesn't depend on the number of transactions. It goes up and down all the time.
The choice of the word “meaningfully” was deliberate . Of course you can do that. But I don’t think it is meaningful. The energy use isn’t a result of the transaction.
Feels like natural progression as underlying technology (internet speeds and HDD space) improves. So more network traffic can now get synced across more nodes faster.
