China says it wants to eliminate Bitcoin mining
reuters.com
reuters.com
* They overestimate (probably by 3x-5x) the present power consumption of miners because they assume the distribution of types of mining machine is homogenous in this table: https://github.com/moracamilo/Bitcoin/blob/master/Randi_Tabl... (when in fact 60-70% of the mining power comes from a single row in this table: Antminer S9). This error causes their calculated average efficiency (J/GH) to be much overestimated as their dataset contains mostly inefficient obsolete ASICs
* They overestimate future power consumption by ~50x by assuming it grows linearly with the transaction rate (in reality it doesn't). Power consumption grows with miners revenues, proportional to {block rewards + transaction fees}. Fees account for currently ~2% of revenues (average of last 60 days). Rewards decline over time, so that fees will eventually account for close to 100% of revenues, which will happen on the authors timeline of 100 years. So if fees per transaction remaimed constant, we could see a 50x tx rate growth with no increase of power consumption.
* They assume the proportion of CO2 emissions per kWh never improves over the next 100 years (great progress of renewables coming to a sudden stop?), and that Bitcoin consumes more fossil fuels than what the entire world currently consumes (infinite fossil fuel reserves?). It is not unrealistic to imagine the proportion of CO2 per kWh could be in a century 20% of what it is today.
Overall, these errors combined mean their scenario overestimates CO2 emissions by a factor of about a thousand: (3 to 5) x 50 ÷ 20% = 750x to 1250x
Edit: simplified bullet point #2
It's an absolutely atrocious example of the Red Queen effect ("running just to stand still") and I can't believe that technologists who in other contexts value elegance and efficiency can defend bitcoin with a straight face. I can only assume they have a lot of money tied up in bitcoin, because otherwise it makes no sense.
CO2 emissions being wrong by a factor of a thousand is a "detail" to you? ;) My point is that the impact of proof-of-work, although real, is grossly exaggerated and appears to be more manageable than what eye-catching press titles suggest.
Another example: journalists like to claim Bitcoin emits as much CO2 as an entire country. But in fact current emissions are comparable to what a single city like Cape Town emits (28 MtCO2/yr.) Thus these sorts of statements are not so much a testament of how much Bitcoin emits, but more a testament of how little CO2 these countries emits.
"designed to waste as much energy as possible"
It is designed to use no more than what the revenues (fees+rewards) allow to purchase.
But instead of debating how big or how small Bitcoin's energy use is, I think a more intellectually interesting debate to have is whether or not Bitcoin is useful to society, and whether or not its utility justifies the costs.
> I think a more intellectually interesting debate to have is whether or not Bitcoin is useful to society
Exactly.
I honestly don't think it's an interesting debate. It's been done to death, and neither side will ever make any headway in convincing the other.
In this case, perhaps because there's no easy yes/no answer to it. I'm an opponent of Bitcoin and cryptocurrency in general. I find the environment important. However, I can attest there are valid use cases for cryptocurrency. I don't think there are valid use cases for me (a European utilizing the EUR who's not interested in tax avoidance or buying illegal utilities) though. So for me cryptocurrencies are not only irrelevant, they're harmful.
It would be good if it were actually and deliberately properly designed this way to create an arms race of "who can get more general-purpose computing power for less" because it would accelerate technology development with this Red Queen effect...
Unfortunately they've missed the "general purpose part" - most mining todays is done by special-purpose hardware made for mining only, and improving it is generally useless for CPU / GPU / TPU design.
I'd fully support a similar coin that would be mine-able on GPU / TPU / other-general-matrix-multiplication-hardware because it would lead to a race decreasing the price of hardware that can run large neural networks :)
As it stands, brute-forcing SHA256 on ASICs is just a travesty.
If the mining algorithm requires specialized hardware, then no group starts out with an existing advantage. If the NSA decided it wanted to 51% attack a cryptocurrency, they'd have to make a massive investment in their own hardware, and then that hardware can't be repurposed after the attack. A 51% attack is likely to devastate the value of a cryptocurrency, which also de-values any mining hardware built for it, which naturally discourages anyone who invested in mining hardware from attacking the cryptocurrency.
Though mining algorithms that require specialized hardware also come with their own downsides: the companies that invest in making the mining hardware early on could decide to keep the most advanced mining hardware for themselves and gain a lot of control over the network.
The dollar is backed by a few million troops. Bitcoin is backed by a few million tons of coal.
Just FYI, a 51% attack doesn't allow you to "steal all the bitcoins"
Governments such as Iceland borrow military power through international agreements.
>mining would eventually become too computationally expensive
I don't think that's true, the difficulty adjusts every two(?) weeks based on the hashrate.
At the present moment network users are collectively paying about $700 000 a day in tx fees, so clearly the network itself creates value.
[citation needed]
But even if that were true, it would be disincentivizing the deployment of grid-scale storage technologies, so still hurting the battle against climate change.
> This Nature article was debunked by other researchers.
Who are these other researcher? Care to link to their research on this?
> when in fact 60-70% of the mining power comes from a single row in this table: Antminer S9
How do we know that?
> It is not unrealistic to imagine the proportion of CO2 per kWh could be in a century 20% of what it is today.
Again, how do we know that?
When a bitcoiner says something is "debunked", what they mean is that someone wrote a post on Medium. In this case, it's an investment banker who put some money into electricity companies before he put money into Bitcoin: https://hackernoon.com/the-reports-of-bitcoin-environmental-...
Digiconomist's response: "Verify, don't trust" - he shows his working. https://digiconomist.net/verify-dont-trust/
It takes months to write, peer-review, and publish research papers, so given that this Nature Climate Change article is quite recent at the moment there exists absolutely zero peer-reviewed studies or counterstudies following up on it. However here are some researchers who have criticized it in their own informal analysis or press interviews: see links in https://is.gd/ksyKyv — shortened URL for https://thinkprogress-org.cdn.ampproject.org/v/s/thinkprogre...
The researchers in question are:
Dr. Jon Koomey, who was a Lawrence Berkeley National Laboratory (LBNL) scientist for more than two decades.
Professor Eric Masanet, who leads the Energy and Resource Systems Analysis Lab at Northwestern University.
Arman Shehabi, research scientist at Lawrence Berkeley National Lab.
And myself who has criticized it here on HN (my work's been cited in Nature Sustainability and the NYT: http://blog.zorinaq.com/bitcoin-electricity-consumption/ so I guess this makes me a researcher now)
"How do we know that?"
It's common knowledge to anyone in the industry that the Antminer S9 is by far the most popular Bitcoin mining machine. For some official reports on that, see market research reports and IPO filings from multiple mining hardware manufacturers. For example this has been neatly researched and presented by the team lead by Christian Stoll in https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3335781 Read their Supplementary Data, tab "3.4 IPO filing analysis"
"Again, how do we know that?"
As I said elsewhere in this thread, according to https://www.hsdl.org/?abstract&did=801297 CO2 emissions per kWh have already decreased -25% over 11 years. Therefore -80% in 100 years seems easily achievable (the trend only has to continue for 60 years, then there can be 40 years of technological stagnation.)
In fact we don't even need any technological breakthrough to achieve -80%. France already emits 90% less CO2 per kWh than the average country, thanks to nuclear power.
So, there are no peer-reviewed, published research on this? Good to know.
> It's common knowledge to anyone in the industry that the Antminer S9 is by far the most popular Bitcoin mining machine.
Most popular can mean 30% or even 70% of hash rate. How do we know it is 60-70% as you claim?
> As I said elsewhere in this thread, according to https://www.hsdl.org/?abstract&did=801297 CO2 emissions per kWh have already decreased -25% over 11 years. Therefore -80% in 100 years seems easily achievable (the trend only has to continue for 60 years, then there can be 40 years of technological stagnation.)
To actually do a comparison, what exactly was the efficiency achieved in last 100 years? Because it looks like you are drawing the same line assumption which the paper does regarding transaction fees and power growth.
> In fact we don't even need any technological breakthrough to achieve -80%. France already emits 90% less CO2 per kWh than the average country, thanks to nuclear power.
And how much of the hash rate does France generate? Or how much of China's energy in the future is going to come from nuclear power (assuming they remain the country with largest hashrate).
That’s a reasonable approximation. Over time mining is paid for by transaction fees in a competitive market. If you get 2x the fees and the cost to mine stays the same, you get 2x as much mining.
Granted that assumes transaction fees are ~1:1 with transaction count. However, protection from a 51% attack eventually requires 1:1 increase in mining as the value of a 51% attack increase, so the lower bound is there.
No, because the authors don't understand how miners gain revenue. For every dollar of miners revenues, currently $0.02 come from tx fees and $0.98 come from the block reward (12.5 BTC today.) Therefore with everything remaining equal (same average fee per tx, which is the authors' assumption), if the tx rate grew 50x it would increase miners revenues to $1.98, hence only doubling revenues and power consumption.
However, looking at historical data the current fees are well below the cap. https://bitinfocharts.com/comparison/bitcoin-transactionfees...
Now, currently Bitcoin can’t scale transactions so extrapolation is kind of up in the air. But, in practice if it’s going to survive it needs to create value to offset the cost of mining.
True, we will never be able to extrapolate future fees. I'm merely pointing out the authors did it in a way that is completely bogus.
I mostly agreed with the first two bullet points, but please show me a significant country that managed to reduce their CO2 emissions with renewables.
For instance, in China, where a lot of Bitcoin mining happens, the share of renewables increases in many countries, but not even as fast as the actual consumption by the population, leading them to open more coal power plants as well.
I'll wait until I see it.
https://www.umweltbundesamt.de/daten/klima/treibhausgas-emis...
Renewables are the biggest increase in new power supply in Germany.
Improvments in renewable technology should make renewable energy cost effective even without subsidy (at least the newer ones).
The number of misleading claims when it comes to the current state of batteries the cost-effectiveness of wind and solar etc is staggering.
Don't forget calculating the price and consequences of ex CO2 of wind and solar does not include things like true cost of production (the entire vertical stack), decommission, the fact that it makes other energy types more expensive (like coal used ex at night when the sun don't shine), doesn't include the cost of digging for rare-earth materials etc.
Don't forget that solar and wind require huge areas to work because the density of wind and solar is so low compared to nuclear, oil or coal.
Sun and wind combined cover less than 1% of the worlds energy needs. The high percentages some claim like when Denmark claim 40% comes from wind are misleading as they only compare to electricity, only talks about the energy that's produced in the country (an excludes energy imported for ex when there is no wind)
There is so much disingenuous information out there it's quite astounding.
And according to https://www.hsdl.org/?abstract&did=801297 CO2 emissions per kWh have already decreased 2.58%/year between 2005 and 2016 (-25% over 11 years). That's already far better than the 1.60%/year I assumed (-80% over 100 years), further strengthening my point that these Nature authors' assumption that CO2/kWh will never improve in 100 years is utterly unrealistic.
I was asking for a country that managed to reduce their CO2 emissions significantly with renewables. It may happen in the future, and I'm certainly hoping for it, but we don't have a large-scale concrete example yet.
"we don't have a large-scale concrete example yet"
China single-handedly added 230 GW of hydropower in 10 years (2006-2016). This could power the entire country of Japan (5th biggest electricity consumer in the world). If this isn't "large-scale" enough for you, I don't know what is ;) China also added a ton of fossil fuel power plants in that same period, but still it shows at least hydro, as a renewable, can work at very large scales.
Nuclear is literally the best combination of the best features from each of the other forms of energy.
[1] https://www.forbes.com/sites/cbovaird/2019/03/22/95-of-repor...
To gauge Bitcoin's adoption you need to look at on-chain transactions, not exchange trades. Makes sense?
(1) There are more people now. Not creating money disproportionately benefits the people who were alive before you. If you print no new money, the amount of wealth you have doubles as a proportion of the population when the population doubles. As economic activity increases and becomes more efficient you can do even more with that money. This pressure creates wealth inequality over time -- this is in part what the pilgrims sought to escape as they fled the old world of kings/queens/fiefs/lords.
(2) A predictable rate of inflation incentivizes the allocation of capital to productive endeavors. If your money just became more valuable over time, why on earth would you risk it by investing in something when you can just sit back, chill and be rich? That's why Bitcoin is a god-awful currency. Nobody wants to spend it because they think it will "mewn soon."
The federal reserve doesn't print money, the treasury does. They didn't create money to offset Chinese loans, they sold treasuries (debt obligations) to China, which in turn yielded money. You know what, I won't do as good a job as this article will explaining it to you [1], entitled "Understanding How the Federal Reserve Creates Money."
That all said none of this matters to you, a savvy investor with assets, because you shouldn't hold money. It's not intended to be held, it's meant to be circulated. Go buy things with it, that's what it's for. It can't depreciate in your hands if you've bought something with it. Salaries track inflation, housing tracks inflation, debts don't, so your principal goes down in real-world dollars over time. If you live paycheck-to-paycheck you're totally unaffected.
I'm starting to think the solution to Bitcoin is forcing everyone to attend civics and economics classes.
[1] https://www.investopedia.com/articles/investing/081415/under...
[1] https://cointelegraph.com/news/north-korea-increasingly-uses...
[2] https://www.ccn.com/how-mexican-cartels-use-chinese-crypto-b...
Bitcoin, 0.1% of all electricity: 7 tps
THE ENTIRE REST OF CIVILISATION, 99.9% of all electricity: a whole lot more than 6993 tps.
Please try not to let that influence your opinion about the article though, because it does rightly point out the flaws in the original calculations, and the validity of the peer review of the original article.
Is that not also a problem that can result in humanitarian disaster? It certainly has before. I don’t think we should be comfortable with blanket bans just because they are accompanied by government greenwashing PR.
The dollar has lost 98% of its purchasing power over the past 100 years, and in recent years has been watered down enormously with QE. That money had to go somewhere, which is why stocks and corporate debt is currently at record highs. QE isn't possible in Bitcoin, and the coin itself is deflationary to 0 in about 2140.
Additionally, if you are implying that anything "natural" should be biased against cryptocurrencies, you are actually showing support for the root comment. It's admitting that cryptocurrencies are harming nature.
Source on this?
Open-mindedness is a virtue only if it helps you find the truth. Often it is more useful to judiciously discard ideas which have been debunked.
I'm sure there are pros to cryptocurrency. One of the cons is that it contributes to climate change. We've all heard plenty of cryptocurrency drum-beating over the years, it's not like "focusing on the latter" is some crazy imbalance of criticism.
Now where did I put that Cryptonite...
<rant> I'm sick and tired of this anti-con attitude. I've been encountering it a lot while talking to people about their ideas, especially from those that can't hold their idea together.
As a product builder, I meet with a lot of people who pitch me their ideas and I decide if I help them build it or not. Now, I do spend a lot of times before actually building the product to understand what problem the customers solve and what solution they chose. That means asking a lot of questions and asking a lot of why. I've had a lot of clients become defensive and giving me the pros and cons to everything so why focus on the latter speech. This is before we even start building the product.
Asking for input on how something works, and they become defensive that I'm a pessimist...
I've had three outcomes from this: * first is a group of people that will not work with me anymore, will tell their friends not to work with me and none of which I've heard a lot about after we discussed; * second is a group of people that went with my analysis and most of them are still my customers and refer me to their network; * third is a group of people that pivoted based on my analysis and work with me with open ears and trust; these are the customers that give me the best return on investment and the best referrals. </rant>
While I agree that when someone showcases an achievement, it's rather bad to focus on the cons; when analysing a technology, a cult and or something that combines both of these, especially when it gets shoved down your throat every once in a while, I think we can assume a default not-interested position. I think it's in the people presenting the benefits to focus on the benefits, and the people that they want to convince to hang on as tight as they can to what they feel this technology is not solving for them.
Anyway, sorry about the unstructured rant, I just feel like this 'why focus on the latter?' attitude is damaging for products, for technologies and society in general. Don't focus on the good, or the bad, focus on whatever needs to be in focus to solve your current query...
I think in the context of making business decisions you are absolutely right.
All I'm saying is that the benefits of an idea that has the potential to disrupt banking are much greater IMO than the cost of ironing out faults (that are sometimes exaggerated as in this case).
I'm not saying there aren't valid cons to it or that we should ignore them from a practical standpoint. We need to know what they are to fix them.
I just noticed that people are quick to dismiss something because it's not perfect and that sort of mindset is counterproductive.
The only reason they are accepted at the moment is that it's free money, especially for the initial coin holders(founders/friend investors etc.).
For some reason people now accept fully pre-distributed coins. At least Ethereum went through a PoW phase to allow for some non-ICO distribution.
It's why alt coins have stayed basically irrelevant.
The article estimates the total number of ATMs at 3 million, with an average daily power consumption of 5Wh, for a total yearly power consumption of 13Twh. Except if I punch [3 million * 5Wh * 365.25 to terawatt-hours] into the Google, I get 0.0055TWh. If I assume the author meant to type 5kWh as the average daily power consumption, you get 5.5TWh, which is closer, but still not the stated quantity.
[EDIT: OK, so I if I punch [3 million * 500W * 365.25 days to terawatt-hours] into the Google I get the 13TWh the author estimated for ATM consumption. So the author is actually assuming that the average ATM is consuming 500W?]
Likewise the numbers for how much electricity bank branches consume doesn't seem to add up (it seems like the author assumes branches consume an average of 10kW, not 10kWh/day?), and I can't replicate any of the numbers given for bank server energy consumption (just multiplying the numbers given in the article together in different ways).
Can someone else get the numbers in the original article [https://hackernoon.com/the-bitcoin-vs-visa-electricity-consu...] to add up?
bitcoin security on the other hand is backed purely by energy spent by miners.
Hint: wars predate fiat currency. You’d still need army without fiat.
It’s entirely possible to fund massive wars without fiat currencies. We know this because we’ve seen it time and again. Taxes and bonds can be used even with a hard metal currency, as does the handy expedient of promising a portion of the spoils of war. I see no reason why a bitcoin based country couldn’t just raise taxes and bonds just like the gold backed ones did for literally all of human history.
Beyond that, the world hasn’t seen any truly massive multi-lateral engagements since the proliferation of fiat currency. While the Middle East remains a hot spot, there has been nothing to match the scale and hardship of a world war or a napoleonic war. If the theory is that fiat currency enables war, you’re going to have a very hard time explaining the limited scope of conflict since the abandonment of Bretton Woods in 1971.
That's not "at least some chunk", that's the entire cost that you're trying to wedge in there.
There's perhaps worries that Bitmain could get too big and poison the chain, but they're hamstrung in that by Bitcoin being an open protocol. If they did that the network would fork, and despite the higher hash rate in the Bitmain fork, holders would dump the Bitmain coins and buy the original fork, since they wouldn't trust the poisoned chain.
also miners are not middlemen - they don't control transactions, they don't control the peer to peer network. they are there to publish the proof and get their reward.
you really should inform yourself on the topic before debating it.
And it is a waste. There are plenty of more efficient ways to make a transaction. I get that bitcoin is designed around this waste but that's hardly an excuse.
What you call waste is simply price for some level of security that isn’t backed by any armies.
Edit: also, no, miners aren't middlemen, that's just another misunderstanding on your part. middleman has control over the process they facilitate, miners have no control over anything but construction of blocks and how much energy they are willing to spend. you could argue miners can choose to ignore transactions coming from me (if they manage to figure out how to identify them), but it's a competition of independent parties so there will always be other miners that do not choose to ignore me. for that to be an issue big enough to call miners middlemen you'd need majority of miners to collude on something quite obvious and demonstrable, which would undermine bitcoin project itself, rendering miners' own investments in bitcoin and infrastructure worthless - not in their interest. besides, with confidential transactions this entire point will be moot.
Hold on, the response to “Bitcoin is inefficient with energy” is that efficiency doesn’t matter? That isn’t moving the goalpost so much as removing it.
Edit: seems like you've edited your message. next time try to be more polite and mark your edits.
i'm not saying efficiency doesn't matter, i'm saying primary goals of bitcoin are different.
it's really not the same as having limited number of third parties proclaim which version of blockchain is correct.
but more importantly - one doesn't have to ask permission from any third party to publish their transaction either via internet or radio or satellite or morse code. if you still think trading in gold is safer/easier - i don't know what else to say.
And decentralised currency is not useful or important, unless you've got some sort of decentralisation fetish, which most people don't.
This is honestly one of the most inflated, ridiculous claims I've ever seen in the cryptocurrency space. A space which is already riddled with ridiculous, overblown claims!
you're welcome to provide actual refutation.
Miners are the middlemen, complete with fees. Bitcoin is not pure energy any more than any other electronic currency. Proof of work is energy already used, not somehow carried in a bitcoin.
The whole "pure energy" thing is just air-headed utopianism AFAICT
this is an assertion from your previous message.
> Miners are the middlemen
this is an elaboration for your assertion, that was missing from your previous message.
you don't have to lie, it's fine if you admit your mistake and fix it.
> Miners are the middlemen, complete with fees
this is false. middlemen have control over the process. miners don't control who can transact with whom and transaction fees are still orders of magnitude lower than the actual flat block reward. moreover - miners don't set the fees either, market does. miners only participate in a competitive environment of providing proof of work and getting paid for it. they are "contractors", not middlemen.
> Bitcoin is not pure energy any more than any other electronic currency. Proof of work is energy already used, not somehow carried in a bitcoin.
bitcoin is not pure energy and i never claimed it was. if you go back and try to read carefully you'll see that i was talking about monetary value and security. bitcoin is just a record in a ledger and not different in t hat regard from thousands other cryptocurrencies. what's different is the difficulty number of every block in the bitcoin blockchain - that's where security comes from, that's how hard it is to modify history and that is where big chunk of bitcoin's value is coming from.
> Proof of work is energy already used, not somehow carried in a bitcoin.
again, you're misunderstanding what i'm saying. you can't convert bitcoin back into energy that was used to create the blockchain, however you do have to spend equivalent amount of energy for each block to be able to mutate the history. that's what i mean when i say that bitcoin is security of money backed by pure energy.
Not really. Who else was it going to be, it's not like I'm the first to point this out.
> miners don't control who can transact with whom
Of course they do. It's up to them which transactions to include in a block.
> transaction fees are still orders of magnitude lower than the actual flat block reward
People who like bitcoin like to talk about inflation and QE as theft from their pockets. The block reward is a fee extracted from the ecosystem in the same way.
> bitcoin is not pure energy and i never claimed it was
"it's the first time in history we've been able to express and implement monetary value and security thereof in terms of pure energy"
So yeah, you did, you said it was monetary value expressed as pure energy, which is meaningless. It's not a measure of joules, and it's not the hashing which gives it value. Quite the opposite - the speculative value is what attracts the hashpower.
and "them" is not a single entity or even small number of entities. miners compete for block rewards and every transaction with a fee contributes to the profit - whatever malicious miners choose to leave out will be included by non-malicious miners making them more profitable.
calling miners middlemen when they would only have actual control over which transactions appear on the chain if majority of miners colluded (destroying the value proposition of bitcoin in the process) is very disingenuous.
> talk about inflation and QE as theft from their pockets. The block reward is a fee extracted from the ecosystem in the same way.
i don't even... QE and other fiscal measures are short term decisions made by bunch of powerful humans behind closed doors. Bitcoin emission schedule was decided ten years ago and has virtually zero chance of being changed without destroying the project and it's value. you must be trolling right now if you say you don't see the difference.
as for why is there bitcoin emission schedule at all - because that's probably the most fair process of distributing bitcoin.
> So yeah, you did, you said it was monetary value expressed as pure energy, which is meaningless
either you start reading and quoting me correctly or this discussion is over, i'm done with your manipulative tactics.
It's not linear at every stage (for example, more USD per block reward will reboot Bitmain to produce even more efficient miners, which will eat up some of the rewards) but it's close enough to be concerned.
Only for speculation and money laundering. Bitcoin's exaggerated volatility makes it unusable as a currency. If it would you wouldn't be making fun of the guy who spent N bitcoins on 2 pizzas instead of holding it. And conversely, if everyone would hold bitcoin, it wouldn't bring any utility to society.
Equating the cost of Bitcoin and aluminum doesn't seem like a sound argument unless you can also equate the value (or show that they are approximately close.
Could you credibly claim Bitcoin brings the nearly the same value to society that aluminum does?
Bitcoin mining results in heat, both literal and metaphorical.
Do you have any proof of this dubious statement?
The idea that you can send "money" to anyone regardless of who you or they are does provide some value. Unlike any other financial transaction system that proceeded it that I'm aware of, you can't be deplatformed from crypto.
How valuable you find this likely coincides with the value you place in the ideas of crypto (the original definition) anarchy.
As it stands, crypto currencies are a promise, not a fulfillment. They will become a fulfillment after they actually solve those problems. But it's a long way from theory to practice, even after all the technology is deployed.
https://www.schneier.com/blog/archives/2019/02/blockchain_an...
And the good it brings to the world in being a non-nation state controlled currency is obvious. From enabling continuation of money transfer in failing or restrictive governments to allowing for capital exchange between individuals directly without rent seeking or censorship it provides good every day.
Compared to that, I'm not aware that the Swift Network or Visa/Mastercard would run whole power plants to support their energy needs. They just need a medium sized data center to support hundreds of millions of payments a day.
People, offices and everything related requires power and physical location too.
The problem was the original poster in this thread setting up the strawman that bitcoin is for every single transaction (or even a decent fraction of them).
But to answer your direct question: because the security and processing of it's transactions depends on the security of a nation state. That nation state's security stems from the military among other things. The energy expenditure is enormous and the influence of the nation state's desires on what transactions are processed is an everyday factor. This is obvious in watching the Justice Dept. interact with the major credit card companies.
https://www.reddit.com/r/buttcoin contains good reading
That being said, I just found https://www.coindesk.com/norway-ends-power-tax-subsidy-for-b..., which makes me wonder if current prices would be able to support mining there. Also, at least part of Washington State is interested: https://www.bendbulletin.com/business/6853387-151/central-wa...
Actually, most crypto mines in China are located in Sichuan or Yunnan, precisely because of an oversupply of hydroelectricity. More than a quarter of the world's hydropower is generated in China (350 GW) and most of that is from Sichuan & Yunnan. 350 GW is more hydropower generated than the next three biggest hydro producers combined (US + Brazil + Canada.)
Because of the demand-supply imbalance in Sichuan an Yunnan, kWh prices are cheap, hence mining is profitable. ~90% of the electricity in these regions is generated from hydropower.
The oversupply is a result of inadequate grid infrastructure preventing the transport of electricity to resell it to neighboring regions, and a slowdown of China's economic growth.
Sources:
http://dx.doi.org/10.1016/j.renene.2018.01.090 — Hydropower curtailment in Yunnan Province, southwestern China: Constraint analysis and suggestions — "The increasing curtailment of hydropower generation not only caused large-scale waste of sustainable energy [...]" In 2016 alone, Yunnan was forced to waste 15% or 31.4 terawatt-hours of hydroelectricity.
https://www.financemagnates.com/cryptocurrency/news/chinese-... ("In 2016, for instance, overcapacity from hydropower stations in Sichuan and Yunnan amounted to a whopping 45.6 terawatt hours")
It's so bad that China is now restricting the constructions of dams in Sichuan an Yunnan to not exacerbate the overcapacity problem.
People often bring this up when talking about bitcoin mining but it makes no sense to me. How can this be true (and the whole truth)? It sounds like the kind of argument that bitcoin supporters would spread happily. Which I used to be, by the way. I GPU mined back when it was all fun and games. I used to also doubt the claims that bitcoin uses the power of a small country. I assumed some journalist looked at the difficulty, derived the number of hashes that need be done, looked at an average computer in their office, and voila. But then I did the math, taking the hash rate and figuring in the most optimal case, using only the most efficient miners, and to my surprise it's true. A small country of power just being wasted. I'm all for proof of stake networks, but bitcoin just has to die, the sooner the better.
Even if it's true that they built capacity for nothing, no way that the power is just up for the grabs at almost no cost. There are always other purposes for surplus power.
In addition, China has also been trying to shove people to the interior provinces as a policy for quite a while now.
Because China. The country is/was flooded with cheap capital and the result is infrastructure projects everywhere. Some make sense, some not so much.
If the government incentivises construction there will be big infrastructure projects. The government might not need the actual project and its output but rather the construction itself for fueling employment and economic growth.
Let's say you go to such place with cheap electricity, start your own business, use that cheap electricity and produce something. If you cannot generate the same profit with your product as the bitcoin miners, then that's a waste. You just wasted electricity on your business that could otherwise be used to mine bitcoins and turn them into more dollars - more value for somebody.
Obesity is a problem in the united states and represents the over purchasing of food.
- Let's say you go to such place with cheap electricity, start your own business, use that cheap electricity and produce something. If you cannot generate the same profit with your product as the bitcoin miners, then that's a waste. You just wasted electricity on your business that could otherwise be used to mine bitcoins and turn them into more dollars - more value for somebody.
Value cannot be produced out of thin air. Mining a bitcoin without doing "work" is the equivalent of having a printing press and printing money. No work is done.
When you print money it is a form of theft not a form of work. Most countries recognize it and classify it as counterfeit. When you exchange a counterfeit dollar for a real product that required work, you are doing an act of thievery. When you mine a bitcoin then exchange it for real money, it is similar to theft. The only difference is the person you exchange the money with has knowledge about what bitcoin is, and the "work" (nothing) you did to get it. Sort of like how when a drug addict buys some heroin he's either in too deep or for users just starting out, he's ignorant.
A currency that constantly uses up energy is more wasteful than a currency that does not. Simple logic.
yeah, that's why miners do work. They validate transactions, for which they are rewarded. Those who want their transactions validated see value in that, so they pay them. Therefore it's not like printing money. Therefore it's not a form of theft. Your simple logic breaks there.
No one mines cryptos where energy in less supply because energy prices tend to be high. The current mining rigs in China are almost exclusively located in regions where energy is cheap and in oversupply. China has many power-plants that must run at certain capacity floor and despite of that the demand is much lower. It makes so much sense to let that energy be used to mine cryptos which is like store of that value. This way energy is not wasted.
Chinese move has less to do with energy or environment but more about undermining a threat to their monopoly on currency.
Bitcoin mining has a potential to push innovation to invest more in alternative and greener energy sources.
* It kills the narrative that China controls Bitcoin.
* It severely diminishes the Chinese state's ability to disrupt the Bitcoin network by commandeering hashpower.
* The Chinese miners will move their operations overseas, leading to higher geographical/jurisdictional decentralization.
* It becomes relatively speaking more profitable for Chinese ASIC manufacturers to directly sell their miners compared to mining themselves. This will diminish their oversized power in the ASIC market and decentralize mining in terms of operators.
* BTC itself isn't banned, OTC demand will stay, causing a premium. This means some mining will likely continue in smaller, less obvious operations outside the reach of the state. Everything about that is healthy for the network.
* The biggest source of Bitcoin blocks won't be behind the biggest firewall of the globe anymore.
* The article mentions a phasing out, so the two-week difficulty adjustment period can more than likely gracefully handle this.
* Although a lot of Bitcoin mining is done with hydropower in China, it also has a significant share of cheap coal-powered mining. This likely makes overall Bitcoin mining greener, hurting the Bitcoin climate change FUD.
I dislike the fact that Bitcoin fans have commandeered the term "FUD". The term originally referred to coming out of Microsoft, but you are using it to refer to well-intentioned people saying things that are true.
It's the same as what happened to the term "fake news."
Bitcoin has some very serious problems. We all know what they are. If you keep pretending they don't exist, you only hurt your own credibility.
No. It originally referred to the marketing strategy of IBM, which basically consisted of casting doubt on the viability of their competitors. "No-one's ever been fired for buying IBM."
It specifically did not mean outright lies, but the strategy of pointing out that when the market consists of an 800-pound gorilla and hordes of chimps, the chimps might be nimbler to respond to your needs and offer better prices, but you never know when one of them gets bulldozed, and if your infrastructure depends on them, that might be really bad for you. It is not necessary to lie to do this, and good FUD explicitly just consists of carefully selected verifiable factual statements that cast doubt on your competitors.
It is an extremely ballsy marketing strategy: "Yes, our product is worse and costs much more, but you know that we have done this for decades and will still be doing this and supporting you for decades to come." It sold mainframes like hot cakes, even when competing systems sometimes were literally an order of magnitude less expensive.
The association with Microsoft comes from how Gates was really impressed by it, and copied it for Microsoft, once they got big enough to use it. Unlike IBM, Microsoft used the term FUD internally, as revealed in the various documents that were leaked and/or published through discovery.
> the whole bitcoin climate change story isn’t true
Wasting renewable energy on crypto mining prevents that energy being used for something productive and so drives the need for more renewable capacity or drives further use of fossil fuels.
Bitcoin is an environmental disaster in the making. I see mining as akin to a religious rite that diverts potential away from useful activity and towards a fantasy instead.
I feel like you really don't get the... particulars of being a Chinese national, on multiple levels
Heck, given the amount of money invested, a visa for a first world country might be possible too.
https://extraproperty.com/turkish-citizenship-buying-propert...
Don't see this equation actually changing. Like you mentioned, operations will just be moved elsewhere. ASIC manufacturing and mining "tech" will still be hoarded and profit maximized.
It's not FUD if it's true, which you're implying with the first half of that there sentence...
Is that not also a problem that can result in humanitarian disaster? I don’t think we should be comfortable with blanket bans just because they are accompanied by government greenwashing PR.
Plus your entire premise is wrong, yuan is definitely not increasingly devalued. Even if it was that wouldn't directly mean it's a problem
That said, reducing the energy consumption of Bitcoin should be an absolute priority. Lightning Network and other such technologies help.
If you buy counterfeit goods with bitcoin there's not much you can do. A credit card protects you from fraud over $50.
What exactly is this bitcoin waste getting us?
As the political landscape worsens, bitcoin and similar technologies will begin to be used more, regardless of environmental concerns. The best way to avoid this would be to improve the political landscape with regards to money transmission/storage, which would be no simple task.
All other systems are centralized, only work without adversarial parties or both.
This means Bitcoin doesn't need central banks. It doesn't need reporting transactions over 10k to some central governing entity. You can memorize a list of words that the cops can't seize in a random search from your car. It gives some freedoms to people.
However, the hash difficulty/energy consumption problem is a serious issue and many people in the community are investigating alternatives for it.
Also, take into account that the energy consumption is related to the hash calculation power available in a given moment, not to the number of transactions performed.
This also means that Bitcoin mining will consume the same amount of power even if no new transactions are being done between the owners of Bitcoin wallets.
If there's a way to make a distributed ledger that can store and publish transaction information for a number of adversarial parties without consuming the energy of an African country, I am confident someone will find it.
Many alt-coins are experiments on that regard, using several different algorithms and ideas.
However, this is still an open problem and I don't know any timeline about when it can be resolved.
Cash solves this rather cheaply (because it is physical). Electronic money does it a lot more efficiently that bitcoin. Perhaps the power usage of all banks is higher than bitcoin, but power per transaction is a lot better.
https://www.ccn.com/chinas-merchants-are-legally-allowed-to-...
Manufacturing mining ASICs and running your own mining operations seems like it has these big inherent conflicts of interest to me.
Source, their IPO documents: https://techcrunch.com/2018/09/26/bitmain-hong-kong-ipo/
Best part is that they are well known to take an order and payment from a customer and then ship out machines they've been using themselves for the last few months. I've gotten machines from them that were definitely used equipment. They say that they do 'testing' with them first as an excuse.
[0] https://www.coindesk.com/bitmain-bitcoin-mining-farms-antmin...
Existing systems, banks and all adjacent institutions and companies, are close to impossible to track and measure.
Exchanging cash versus submitting a Bitcoin transaction would be more on par.
This manta keepa being repeated by the bitcoin crowd as if it were a fledgling technology, when its already 10 years old.
Is mass adoption just around the corner, do you reckon?
There's lots of people working on more energy efficient, yet still secure cryptocurrencies, but IMO we won't see truly energy efficient cryptocurrencies until we shift the trust away from the central chain and into individual actors.
Theoretically you should be able to establish a trust coefficient for an action given the signature of the actor & the gossip on the network about their outstanding debts, their current balance & their non-transferable value.
You'd still need to pay the cost for obtaining the information about the actor and a method for verifying that you haven't been subjected to a sybill attack w.r.t. that information, but that amount of data transfer/computation should be orders of magnitude lower than the current PoW technique that bitcoin uses.
There's no way that the rough system I am talking about would be adopted by bitcoin, and I'm not gonna be working on it, I haven't seen a project that looks similar so I'm guessing it will still be quite some time.
If I was going to go with a cryptocurrency that is energy efficient and currently exists I'd probably take a serious look at https://www.nanode.co/
However, I'm not happy to see an outright ban on it, for all sorts of reasons. Not only are there fundamental freedom of speech issues involved, but it sets a dangerous precedent with regard to decentralized computing in general. I also believe that the best way forward in a bitcoin-free future is to leave things be, expose rather than suppress, and to let people do what they want so as to encourage transition.
I'm surprised to see so many comments supportive of this move here. First they come for bitcoin, then they come for Matrix?
It surely doesn’t help keeping the rivers clean
https://www.steamtablesonline.com/
To get steam at 70°C you would have to draw a vacuum on the system. I see this ending expensively.
Surely you cant get the density needed before the GPU's themselves burst in to flames?
To break it down, if you have a comically large stove top heater set to 70 degrees and a regular sized one set to 70 degrees, if you put a pot on either the max temperature of the water in the pot is still 70 degrees. The rate at which it heated to 70 would change but max temp wouldn't.
^Max safe temp of GPUs is around 100c. What will actually happen is that the GPUs will heat the coolant to this temperature, then either the coolant will lose heat through normal means (when water isn't heated it cools), or if the coolant stays hot eventually a GPU will turn itself off through overheat safety mechanisms. Once this GPU is off the coolant loop will drop temperature for a while then slowly approach max temp again, until either another GPU gets turned off or the system finds its equilibrium where the coolant is at a stable temperature and no more GPUs are turning themselves off.
We're still stuck with two Chinese ASIC manufacturers, but at least more of the actual mining will be outside china.
What do you think?
These are mobile, and will surely emigrate.
I guess existing miners would get their coins cheaper, so there would be less pressure on them to sell to cover electricity costs, so the supply may reduce a little via that mechanism.
So instead the media told that it's a revolution with blockchain, they should tell people that: BTC is also a game, a trading game, keep yourself at risk before pouring your money into it.
[1] https://github.com/ethereum/wiki/wiki/Proof-of-Stake-FAQ
Counter to what principle? I don't think that's right.
Bitcoin has changed the protocol multiple times, too.
China makes so much money from mining and crypto, there is no way they would get rid of it.