If your concern is about avoidable energy waste, you'd need to have a bizarrely weird misunderstanding of the scales here to pick Bitcoin as your hill to die on.
It's like when people complain about how much water you waste by leaving the tap on while you brush your teeth while my dad has the water rights to waste 10,000,000L/year of creek water because he owns a single cow. People have such little understanding of the relative scale of everything, so they laser-focus on whatever inconsequential, concrete morsel that sounds good to them.
That seems like a lot, no?
Regardless, I would be sceptical about that 621 KWh. Does not sound realistic...
If the network wasn't consuming absurd amounts of hardware and energy, anyone could waltz in and use a perfectly reasonable amount of hardware and energy to break it. So yes, it does need to constantly increase as fast as possible. If it ever increased less fast, someone could eventually exploit that delta.
If a bitcoin costs $30k then the amount of electricity you can afford to waste is exactly... $30k worth of electricity. Higher energy efficiency is just a competition among miners. Less efficient ones have to stop mining.
If anything that is contributing more to energy waste because you have to periodically replace old miners and not every miner managed to break even on their less efficient hardware by the time the latest hardware became available. It's probably less significant over the long term though because eventually there is a limit to how efficient bitcoin miners can be.
You didn'tconsider that the things you have listed cost money. There is an incentive to reduce them to the absolute minimum because you would go broke if you leased commercial property and put 200 clothes dryers running 24/7.
Mining bitcoin is a profitable activity. You can afford to do that. The price of bitcoin dictates how profitable mining is. The higher the bitcoin price and transaction fees the higher the margins and that means you can buy more miners and thus waste more energy. There is no limit to how much energy can be wasted. Every time you think this is an insane amount of energy it can always get worse. Right now it is only at approximately 80 TWh. In 10 years it could be at 300 TWh. In 20 years it could be 1000TWh. There is no reason why this shouldn't happen.
Bitcoin doubled multiple times in the last decade. The value of a bitcoin could easily outpace the reduction in block reward.
From the angle that bitcoin is useless, it's easy to dismiss it as waste. The reality is that you live in world where people have different understandings and values than you may have. So advocating against Bitcoin is no different than advocating against air travel. You see no issue in the huge amounts of energy consumption for "seeing the world" and "business travel" but maybe I do.
Use resources the way you wish and so will others. Free markets will decide where scarce resources work best.
Huge energy consumption would be much less of an issue if it wasn’t also causing huge long term problems.
Humanity's reliance on fossil fuels and animal products are two far larger, far more pressing issues than Bitcoin's carbon footprint.
I would additionally rank “bullshit jobs” far above Bitcoin's carbon footprint in a ranking of things causing widespread social ills.
If Bitcoin became global reserve currency, all things would decrease in absolute price, disincentivizing consumerism. As the pace of technological innovation increases, and vendor competition increases along with it, absolute prices in BTC terms will go down even assuming everyone already transacts in BTC exclusively. Higher amount of available products/services, same amount of money, equals lower absolute prices. Assuming 1% annual "growth", that's 1% you gain. This isn't outside the bounds of inflation policies today, and keep in mind those inflation targets skim off the top after haircutting GDP growth — a 1% inflation in an economy expanding by 2% equals the central bank skims the 2% growth plus expands by 1%. In a Bitcoin world, that would be 3% gains for simply holding onto your coins.
As such a deflationary global currency could cause a global economic slowdown, which might be completely necessary to save the planet's natural ecosystems.
If CPI inflation is high that means there are not enough workers to do the most valuable work. Workers reallocate to more productive jobs and earn more money.
Interest rates usually follow CPI inflation. If interest rates are near 0% then you get lots of people starting stupid businesses. That's fine if everyone is unemployed and thus would prefer a bullshit job over a productive job but once the pandemic is over it won't be true anymore.
High interest rates force a company to be profitable enough to at least cover the interest payments. In theory the Fed should raise rates to at least 1% just to match current inflation but the economy is now full of bullshit and that bullshit is going to fail once the cheap money dries up. We can't afford to do that during a pandemic but once it is over it is necessary to cull the useless zombies.
I may or may not have conveyed this in a dramatic way but don't take this as a call to action. If you are invested in the stock market you should always make sure that you don't put too much money into dead companies regardless of how well the economy is doing. Timing crashes or whatever is futile. Your personal goals (risk tolerance aka financial security and when you want to withdraw money) are more important and should be planned well in advance.
What we've ended up with is a planetwide tragedy of the commons - and free markets aren't going to solve this. They can only continue to exacerbate it.
Unregulated pollution is basically like having unregulated crimes. Criminals obviously want to keep committing crimes because they benefit personally.
Imagine if you could just go and mug a random CEO and get $10k out of that and the police won't stop you. The CEO and even those who hate the CEO would agree that muggings are bad. The only one who disagrees is the criminal. Therefore regulation is actually necessary to have a well functioning free market in the first place. Heck, punishing net negative behavior is compatible with the free market. The only question is how that punishment is implemented.
Without CO2 taxes you basically have people legally dump waste into the atmosphere which is shared by everyone equally. It's pretty obvious that there is nothing free about this. You can consider the act of pollution to be a forced transaction between the polluter and every other living being on earth. It's like you are mugging a tiny fraction of a cent off of millions of people.
The obvious idea is to just do the same thing we did with garbage disposal. Just charge a fee that covers the damage. That way the polluter has to weigh the damage he does. In some cases the damage outweighs the benefits, in other cases the benefits outweigh the damage. As a society we only want the latter.
The only real problem with CO2 taxes is that every nation has to agree on them. That's what the paris agreement is for. Dismissing CO2 taxes entirely because of global competition doesn't make sense. Global competition merely puts an upper bound on how high domestic CO2 taxes can be without introducing special tariffs or other means of global enforcement.
I prefer a token amount over complete denial because at that point you can just point out that the price is too low instead of pointlessly arguing about which policy to implement or whether to implement a policy at all.
The debate is not about useless/useful, it is about : can we solve the same needs with a lot less spend energy?
> Use resources the way you wish and so will others. Free markets will decide where scarce resources work best.
That way of thinking leads us to the carbon catastrophe the entire world is trying to reverse right now.
BTC runs mostly on surplus hydroelectric power. This may change based on what's locally available and the local cost of oil gas and coal, but when renewables will become cheaper than fossil (which will never be soon enough) it will not make any sense to mine on fossils.
Seems at least half of Bitcoin is currently mined directly using coal.
This doesn't happen with fossil fuels, since the plant operator will of course reduce output as far as possible by reducing fuel consumption.
So it seems entirely reasonable that the bulk of bitcoin mining in the future is going to be done at times when the electricity price is exceptionally low (or negative), and mostly be powered by renewables. It's an economically rational thing to do and as a bonus it will provide some grid stability.
In China it in particular it is seen as an easy way to convert coal to money, as one of the other commenters already linked [1] (which is also economically responsible, given the looming deadlines due to international agreements, but also disastrous to the climate at large).
Also, not to put too fine a point at it, neither Chinese nor US bitcoin miner server farms (mines?) have been found to be using particularly clean energy sources [0].
[0] https://digiconomist.net/bitcoin-energy-consumption/ [1] https://news.ycombinator.com/item?id=25881601
I can never take the bitcoin climate change hysteria seriously. I wonder why the people who write these articles aren't calling out traditional banks? hmm.
Banks are also a very different model with different overheads compared to Bitcoin. I'd argue that banking infrastructure is quite wasteful with their physical skyscrapers and vaults. Executives at banks would argue otherwise.
Bitcoin aims to disrupt financial services to some extent. A significant electricity cost shouldn't be a surprise. Does that mean it should be outlawed? I think not.
If we banned every costly disruptive idea that emerged, we wouldn't get anywhere.
I wonder how much energy we would consume if bitcoin would replace the whole banking sector? Back-of-an-envelope calculation: If it would be powering billion transactions per day, it would need 400 nuclear power plants to provide required energy.
I don't know if we should ban bitcoin or not. I don't have any strong sentiment towards it. But if the numbers here are right, I don't think it is a viable main stream currency.
* Of course, at the moment it's not a very good store of value because of the price volatility. But advocates argue that these are just growing pains.
It would seem to me that the efficiency gap is insurmountably large.
I would advocate for renewable energy. It's not like miners demand electricity to be from fossil fuels. The electricity gets paid for, how you use it is up to you.
If Bitcoin would run 100% on solar power I guess then it would be fine? Or maybe you're unhappy with Bitcoin because of its goal and not the means it gets there? That would be different discussion.
It feels like people want to argue against Bitcoin, don't have credible arguments, and bring out the climate card.
Climate is going to shit, but not because of Bitcoin.
(in response to a single BTC transaction consuming 621 kwh)
A Tesla gets 4.1 miles per KWh. So one transaction costs 2,546 miles. Seattle to Boston is 3k miles.
Paying for a burger with bitcoin has the same environmental cost as driving that burger to you from the other coast.
a) Sending payments is not the only purpose of the network, it's issuance, it's security, it's to make the ledger immutable.
b) No one's buying a burger with bitcoin. Bitcoin's production is a monetary base. Using the same block space you can have an infinite number of economic transactions happen with the same power consumption (block) on multiple layers, each with a degrading level of security. Of course you don't need the full force of the bitcoin network for a coffee or burger.
That’s exactly the point being made, isn’t it? No one uses Bitcoin as a currency for real transactions.
The power consumption does not depend on the block size.
Securing blocks has a cost that is independent of the block size. Bitcoin Cash is a good example.
I also find it interesting that Bitcoin Cash is not as prone to deflation which means that in theory you could actually use it as money. It never caught on so it is effectively dead though. It's best to forget about it.
I hope that initiatives like Lightning Network can help it scale further though.
Other solutions to this problem include owning gold and stocks, both of which are also costly, but in ways that are harder to quantify.
If you want to avoid the waste caused by government money printing, lobby your government to stop confiscating wealth by allowing gold-backed money and reducing taxes.
It’s also a good time to explore the tether bubble: https://link.medium.com/Wsf1ZmBT7cb
BTW, what if the demand for Bitcoin mining hardware accelerated our technological or economical development of semiconductors? I think that's good, and the electricity is small price for that.
I dont even know where to start, the fact that you're really criticizing bitcoin when you got factories cars and plastics around you, or the fact that the energy isnt wasted but spent to secure and preserve its speculated market value.
Sure, we could just use fiat (paper money), it's eco-friendly, right? But good luck in dealing with inflation lol.
Simple math for all: your 1 USD today is 0.99x tomorrow, while 1 BTC will always = 1 BTC.
I doesn't seem to make sense to say 1BTC = 1BTC, when people reference it's value to regular currency.
2% inflation is necessary to keep economies fair and productive. Without inflation you basically get hoarders that do nothing productive with their wealth. Deflation increases wealth inequality and is far worse for the average person.