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Comment by kushti | Hacker News Reader

This is definitely the waste of resources. A lottery to choose a block generator could be useful, e.g. PrimeCoin or PermaCoin(http://cs.umd.edu/~amiller/permacoin.pdf). We are working to launch Scorex(https://github.com/ScorexProject/Scorex-Lagonaki) w. Permacoin testnet in coming days.

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From the referenced document where OP says "No, this is not wasteful" [0]:

"Miners currently use approximately only 0.0012% .. [and] economic modelling predicts miners will not account for more than 0.74% of the energy consumed by the world".

Expending nearly 1% of all energy consumed by the world is an insanely large figure. How much hubris does it take to call this "not wasteful" on its face?

[0] Miners currently use approximately only 0.0012%

Well to make any reasonable comparison we need to see it at a human scale number like dollars per person per day or something otherwise it's just posturing and politics... Big numbers are always manipulated to serve one interest or another

To make a reasonable comparison you would actually need to look at the opportunity costs. This gets even harder as bitcoin mining operations frequently locate at locations which have extremely cheap power. Power which would have huge transmission loss when moving to individual's homes.

The model I used to calculate 0.74% assumes Bitcoin's market cap is $1 trillion(!).

We can all agree that IF the market cap gets this large, it will mean Bitcoin will have had a huge positive impact on society. Therefore it will have been worth it to spend 0.74% of the world's energy.

Edit: I am puzzled by the downvotes. I would like to hear (and respond to) counterpoints if what I am saying is incredibly silly.

> We can all agree that IF the market cap gets this large, it will mean Bitcoin will have had a huge positive impact on society.

What, why?! Even if that were the case, it doesn't follow that the good it does outweighs using 1% of all energy.

I will explain.

Firstly, I think you are underestimating the societal impact that would have led a cryptocurrency to be worth $1 trillion. It would mean it has succeeded on a massive scale: foreign trade made more fluid thanks to Bitcoin's disregard of political borders, hundreds of millions of people using it to escape inflation/financial restrictions/etc (vs. today's few million users), millions of merchants accepting it (vs. today's 130 000 merchants). All Bitcoin would have to accomplish to justify using 0.X% of the world's energy is to increase the world GDP by 0.X%.

Secondly, 0.74% is an upper bound. It assumes power costs of $0.01 per kWh (read section 2 at http://blog.zorinaq.com/?e=82) when actually the average power cost worldwide is 10x higher ($0.10/kWh). Maybe it will be 0.3% of the total energy. Maybe 0.1%. How low is low enough that you would consider it worthwhile?

There is no level of hash calculations that is acceptable.

It is crazy to have a currency that requires this dumb make-work of hashing which results in CO2 emissions. We live in a world of dangerous climate change and Bitcoin users want us to expel CO2 into the atmosphere with every currency transaction. That is dumb and not sustainable.

I actually address this point in my post: "Many/most miners use hydroelectric power because competition compels them to use cheap renewable energy instead of other polluting power sources such as coal power plants" examples:

BitFury: https://www.businesswire.com/news/home/20151211005837/en/Bit...

KnC: http://thenodepole.com/2015/06/04/kncminer-to-build-new-20mw...

Therefore your worry about CO₂ emissions is misplaced.

> There is no level of hash calculations that is acceptable.

Well that's just unreasonable. Do you have any earthly idea how much CO2 the current banking system expends?

Question: does the model account for general increase in energy use, within the timespan of (and, possibly, also as a consequence of) Bitcoin growing to reach that market cap, or is 0.74% just the absolute amount of energy as a cut of today's total usage?

If the latter, 0.74% seems less alarming, as it would surely be less when growth is accounted for, especially considering that some of this growth would likely (hypothetically) be driven by an increase in both production and consumption as a direct consequence of the use of Bitcoin, with all the benefits that brings.

But either way, it does still seem moderately alarming, albeit as a kneejerk reaction to the figure without much critical analysis. It's a very interesting economic question as to whether investing this order of energy consumption into Bitcoin would be worth it, both for individuals and for society(ies). I expect many an economics PhD will be minted on this very topic!

It's the latter (0.74% of today's total usage, therefore 0.37% if the world's energy usage doubles).

That's the answer I was hoping for :-) Thanks!

Additionally, can only improve with increasing processor efficiencies over time too (unless this is also predicted for in the model) - though saying that increasing processing power is accounted for in Bitcoin itself, with the work getting progressively harder, so this may be moot

1 trillion is the current GDP of Australia, a modest szed industrial nation. 1% of energy consumption for just that much currency is not an all worth it.

Australia consumes 5831 petajoules [1] or 1620 terawatt-hours yearly. In my model miners would consume a comparable amount (actually less): 800 terawatt-hours. Therefore Bitcoin and the Australian economy extract comparable economic value from energy.

IOW if you think Bitcoin is not worth it, then Australia is not worth it :) Thanks for this interesting comparison!

[1] http://www.industry.gov.au/Office-of-the-Chief-Economist/Pub...

Australia keeps 25 million people alive in a first-world lifestyle. Bitcoin keeps computers warm.

No, Bitcoin creates more than just heat: it created thousands of jobs (see section "Bitcoin already benefits the economy" in http://blog.zorinaq.com/?e=82).

A better argument here is that we must compare it to the current banking system. Sum up the cost of supporting banks, bankers, bank failures, runs on currency, etc. and bitcoin would clearly a good deal efficiency-wise if it was our main currency.

But banks provide credit which Bitcoin does not. Most of the problems with banks (bank failures etc) comes from the credit side, not the payments side.

At a glance, it might seem that simple. In more depth, people who try to hold money essentially don't have a place they can easily park and access it other than a bank. People get forced into a fractional reserve system. That fractional reserve system in turn needs a lot of extra work and systems behind it to function. Bitcoin is a way for people to keep and move money without being subject to either money printing or fractional reserve. So it is, in part, a replacement for that system.

Banks and Bitcoin serve radically different purposes. (Try getting a mortgage from Bitcoin!) A more appropriate comparison would be the percentage of bank energy that goes to payment processing, which is probably pretty low.

You should include the energy to print and mint notes and coins as well and the energy to make plastic cards.

What about all those air conditioned buildings with all those eating, breathing, commuting human beings everywhere? Bitcoin looks pretty competitive to me against that.

One major thing other than move money that bitcoin does is print it. If you also look into the complexities and inefficiencies where our money/debt come from I think you'll find they've very high indeed.

I agree that Bitcoin's energy costs risk becoming ridiculously high, but general IT energy expenditures are currently 10% of the world's total, eclipsing aviation [1].

Bearing this in mind, using things like PHP, Python and Ruby to build massive web services also seems massively wasteful to me. I'm quite sure that compared to a lower level language like Go or C++, those languages use up an order of magnitude more energy. The energy difference between those two language groups almost certainly exceeds Bitcoin's total energy usage right now, and I don't see people moaning about this.

I mean, build your prototype using one of those languages, but once you starting building a significant audience, switch over to C++, Go, or Rust, and use a fraction of the energy you use with Python or Ruby.

1. http://www.theregister.co.uk/2013/08/16/it_electricity_use_w...

It'd be cheaper to generate the energy cleanly than to spend the cost (development, opportunity, etc...) of developing such things in a lower level language, I'd imagine.

You are right on this one, bitcoin is a large an noneffective resource waste. Our world need to have ideas to make an energy transition, and bitcoin is based on energy waste, mainly produced by carbon resources.

Our future world need energy, and we cannot afford burning real material to create a virtual money with no practical value, this is a nonsense.

"mainly produced by carbon resources"

No, many/most miners use hydropower. See next-to-last paragraph in section 1.

As hydropower is clearly the cleanest and cheapest source of electricity and would be used first in any location, bitcoin miners are essentially shifting other power consumers to carbon-based sources.

I don't think they are shifting other consumers. More and more often we have seen that large miners either build their own mini-power plant[1] or use excess hydro power in remote areas that would otherwise be unused[2].

[1] http://thenodepole.com/2015/06/04/kncminer-to-build-new-20mw...

[2] https://bitcoinmagazine.com/articles/the-unknown-giant-a-fir...

"Definitively"? Have you read my counter-arguments here: http://blog.zorinaq.com/?e=82 ?

There is a difference between wasting and spending.

It is impossible to get the security guarantees that Bitcoin affords without spending energy. That expense is the end goal of proof of work, not a side effect.

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