If maintaining the infrastructure for something a miniscule percentage of the world's population benefit from requires more energy than entire countries, surely it's worth interrogating whether the benefits outweigh the costs?
edit: 39% of it, as in a lot of it and that number should go up as the world is phasing out dirty energy for cleaner energy sources.
> However, the CCAF’s report specifies that the 76% refers to the share of hashers who use renewable energy at any point. It estimates that only 39% of hashing’s total energy consumption comes from renewables.
> Behind hydroelectricity, coal (38%) and natural gas (36%) are the energy sources hashers favour most.
[1]https://www.finextra.com/newsarticle/36672/renewable-energy-....
Genuinely curious, what it is useful for?
I strongly believe that the current financial system is completely broken, so I'd like to opt out of it as much as possible.
Don't ruin the planet for everybody else so that you can sit on your un-diluting hoard of tulips like a dutch dragon.
This is not the same as "renewable" energy, it's locally bound opportunistic energy. Hydro- and geothermal power is limited and almost exhausted already. These power sources are not chosen because they are ecologically neutral, but because mining is portable and can opportunistically use temporary cheap sources, like hydro-electrical dams build before the intended consumers arrived. Nothing in Bitcoin inherently favors sustainable energy sources, over cheap supply. In the coming years, we will have to bite the bullet and chose very expensive endeavors over what the market suggests. Bitcoin doesn't fit this future. It's suggested "value" is nothing compared to humanity's survival.
What does this mean, in practice? Who investigates and what is the outcome?
Do the things OP listed above warrant a similar investigation?
The public? Something that benefits a few at the expense of the many is the canonical case for regulation.
(I don’t think we should ban or even really regulate Bitcoin. Not at this point.)
I think you've misunderstood something. Those people are buying their own electricity...at their own expense. So, you want to bring arbitrary restrictions to electricity - as if we didn't have enough issues with net neutrality already.
It's not bitcoin's fault.
So, ca. 76 of those TWh/year are still carbon heavy.
>The market could solve this problem properly if there were a global carbon tax, but unfortunately, there isn't.
"Solve it"? How so? Crypto mining is largely powered by renewables (40% according to one source in Sep 2020). It is a race to find the most energy efficient way create power to make it worthwhile to mine, which has some positive effect on society by driving innovation. No idea if that is a net positive, but this is not black and white issue at all the way many here are framing it.
That’s one source and less than half does not mean “largely” in standard English usage. More importantly, almost nobody uses Bitcoin so a key question would be how that’d change if usage could be scaled up to, say, even 0.1% of daily transactions.
And that still doesn't really answer whose job it is to ban all these things, and what mechanism would be used to enforce it.
Enforcing could be done via banning any payment with bitcoin.
If they produce a net negative for the majority and only benefit a small number of people, then yes.
We don't go around driving tanks, do we?
I love tanks, but there's a reason why we can't drive them to go to the mall.
There is a difference between majority not liking and only like 0.2% of the world consuming more energy than _a whole country_. There are 5million bitcoin users, they are consuming more electricity than 44 million people's daily lives. Think about the scale of imbalance here.
For example MGM claims their properties in Nevada consume 171 MW. That's more than 65 of the countries from this list: https://en.wikipedia.org/wiki/List_of_countries_by_electrici...
That's an awfully subjective claim and one I find to be contentious. I think even today Bitcoin's impact on global politics has already provided massively more value to global society than all of the resources it has spent on electricity.
BTW, afaik bitcoin has 5million users and Argentina's population is 44 million. Also, this energy consumption by 44million people includes all the activities you can think of to add to this argument.
Or then we let people use their own resources the way they see fit.
scale in general does not excuse, but consumption per capita should.
A Ps4 consume around 100 watt/hour
If you keep it on 24 hours a day, 7 days a week, is 876 KW/year.
Which is not very much.
At 120Tw/year with 5 million users BC consumption per capita is an astonishing 24,000kw/year (or 24Mw)
Every bitcoin user consumes 27 times the energy consumed by a (quite powerful) gaming console turned on non stop (which is never the case)
That's why there have been campaigns around the World to replace incandescent bulbs with the energy efficient ones.
Compared to the traditional ones the new light bulbs can save up to the 80% of the energy, compared to a bitcoiner, a non bitcoiner can save ~97% of the energy by simply playing videogames.
You need to take in the manufacturing costs, costs to develop software, costs to run servers too, otherwise you're only measuring marginal energy consumption for a new user.
Marginal energy consumption for a new Bitcoin user is probably small too.
It's not the total amount of energy used to create the BC network, the software, the HW and everything else.
> The Cambridge Bitcoin Electricity Consumption Index (CBECI) provides a real-time estimate of the total electricity load and consumption of the Bitcoin network. The model is based on a bottom-up approach initially developed by Marc Bevand in 2017 that takes different types of available mining hardware as the starting point.
> The first number refers to the total electrical power consumed by the Bitcoin network and is expressed in gigawatts (GW). This figure is updated every 30 seconds and corresponds to the rate at which Bitcoin uses electricity. The second number refers to the total yearly electricity consumption of the Bitcoin network and is expressed in terawatt-hours (TWh). We annualise Bitcoin’s electricity consumption assuming continuous power usage at the aforementioned rate over the period of one year. We apply a 7-day moving average to the resulting data point in order to make the output value less dependent of short-term hashrate movements, and thus more suitable for comparisons with alternative uses of electricity.
I disagree the comparison is useful.
BC on the other hand are very expensive in terms of energy consumed, by design
BTC don't make any sense energy wise and in the end don't make any sense to invest in something designed to burn energy in the long run, especially now that we are trying to fix the mistakes of the past
Market caps in speculative, unregulated markets aren't indicators of economic relevance. Gaming facilitates billions in production on a yearly basis. Crypto related activity produces very little in comparison. And no, someone buying billions worth of Bitcoin doesn't count (just like people buying GameStop stock doesn't reflect the economic impact of the gaming industry).
Let's watch for 5-10 years. If you're right about bitcoin, I bet its price will be much lower and you can gloat. If you're wrong, I bet its price will be much higher (because I agree with the basic assessment that gaming "feels" much bigger today). Luckily, we can both place our bets based on our best assessments of the future.
How confident are you that you can present a substantive case against bitcoin that matches the diligence that Ross Stevens has done for years? https://www.youtube.com/watch?v=lczPTYf_tvA
The comment above, in a nutshell, is what's enveloping the current crypto environment. Maybe one day we'll get past it (or maybe this is just it).
Either he doesn't know what volatility means or he is trying to scam people.
You could make the same argument about any nascent technology that hasn't succeeded or failed yet.
We already do apply such laws. Car manufacturers are required to sell a certain number of EVs. Emissions must meet standards. Appliances have energy ratings. etc. etc.
If Bitcoin were regulated so that those using the excess output of hydroelectric or other fixed output systems could do so for free, but everyone else was taxed appropriately, then that would actually probably do very little because that is largely the situation already: far from being an anonymous decentralized anarcho capitalist future, it is just large organized crime syndicates in China and Russia generating the transactions. And for all these reasons, the US should make it illegal.
gold mining uses tons of energy we knew automobiles will pollute the environment, why didn't we stop using them altogether?
Incidentally, why would we ever let the market decide when the market consistently throws externalities under the bus?
The original Model T could run on ethanol (not perfect, but better than gasoline in many regards for pollution, and back then IDK if they would have noticed) and Henry Ford was fond of the idea of biofuels; at the time I think he was fond of Potatoes for the purpose.
It’s basically saying if you don’t like pollution don’t pollute, which is flawed in ways I don’t have to explain.
may be you are right , may be you're wrong
just don't be too sure that you know better than most
Automobiles pollute, sure, but the vast majority of people benefit from vehicles.
But what, if any, benefit does bitcoin offer to the public - other than being a speculative asset?
gold is not that useful in utility sense tbh, less than 10% is industrial use.
Other industries and activities, such gold mining, automotives, food production, tourism, etc., must of course also be covered by said carbon tax. However, what makes Bitcoin particularly noxious compared to them is that it intrinsically carries a financial incentive to expend more energy as time moves on.
Energy is how our society is able to maintain its existence and current quality of life. If you over extended that energy usage you are looking towards total collapse of that system. That's what "unsustainable" means, that the system cannot be sustained in it's current state indefinitely.
We already rely on fossil fuels to over extended the carrying capacity of the planet for humans by nearly and order of magnitude. Ignoring climate change and other sustainability issues, the inevitable end of fossil fuels would mean billions of lives lost, even if we were able to stabilize the current global population.
I suspect, ultimately we will learn that humans are no different than bacteria in a petri dish: completely unable to do anything but consume all available resource even at their own eventual peril. But if you have any hope that we as a species can avoid the fate of any other species placed in a similar situation, then you, at the very least, have to recognize that "markets" can't solve this problem.
Also, as a small aside... the concept of an externality is not about pollution or waste. It is about a cost that is imposed on people other than the individual responsible for the cost. The finitude of the planet is immaterial to the existence of externalities.
This is true right now considering how nascent this is, but what happens if adoption picks up?
One thing I’d like to see discussed is what the marginal power cost of Bitcoin is. From where I sit, the vast majority of power consumption is fixed per block, and occurs regardless of whether you have 1 or 10,000 transactions.
A certain amount of bitcoin -- the amount determined by a schedule that was defined before the network became operational -- is given as a mining reward every 10 minutes. The incentives of the individual miners is such that the expenses of the miners (collectively) equals the mining reward -- and the major mining expense is electricity.
If the mining reward is cut in half, the electricity consumption of the network is cut in half, too.
In contrast, if the rate of transactions changes or the number of miners change, electricity consumption stays the same. (More precisely, the expenses of running the network equals the mining reward plus any transaction fees, and since the blocks are of fixed size, for more transactions to compete for space in the blocks increases transaction fees, but I am guessing that transaction fees are currently a small fraction of the mining reward.)
> If the mining reward is cut in half, the electricity consumption of the network is cut in half, too.
That's not true it all -- there is no difficulty adjustment when the reward is halved. There may be pressure on some miners to stop mining, but that adjustment is not immediate and can also be compensated for by change in the price of bitcoin.
> In contrast, if the rate of transactions changes or the number of miners change, electricity consumption stays the same.
Given the network is operating at peak transaction rate already, there's not much change here. Neither block size nor the transaction count has a meaningful affect on the computations required to "solve" a block. The merkle tree for the transactions is computed once, but most of computation is finding a nonce, that combined with the rest of the block header, produces a hash with a certain number of leading zeros.
Changing the block size or transaction count doesn't meaningfully change electricity consumption.
>that adjustment . . . can also be compensated for by change in the price of bitcoin.
It can. When I wrote that if the mining reward is cut in half, the electricity consumption of the network is cut in half, too, I assumed that the price remains constant.
A miner must pay for the electricity he or she uses. Where do you think the money comes from to pay for the massive amount of electricity used by the network?
Do you imagine that rich people (i.e., people who can afford to lose money) are buying the electricity for pro-Bitcoin ideological reasons?
I don't: I believe that it comes out of the revenue made (collectively) by the miners. In other words, the payments for the electricity are parts of (individual) plans to make money through mining.
And I believe that if that (collective) revenue were cut in half -- especially if miners and prospective miners knew of the halving in advance (particularly, before they decided what mining hardware if any to buy) -- then money spent on electricity is approximately cut in half, too. (Because otherwise the plans to make money would not work.)
You are correct that the adjustment in the hash rate is not immediate after a halving of the mining reward. Mostly that is because miners who recently bought mining hardware have to continue mining after the halving to continue to pay for their hardware.
If the halving was announced in advance, then the halving will start exerting downward pressure on the mining difficulty months in advance of the actual date of the halving. The major cause of that downward pressure is miners opting not to upgrade their hardware and prospective miners opting not to enter the mining business in the first place (the effect of which is to make it take longer for the remaining miners with their non-upgraded hardware to solve the proof-of-work puzzles, which in turns causes the software to reduce mining difficulty to return the average time between successive blocks back to 10 minutes).
Basically, it takes many months for newly-manufactured mining hardware to pay for itself, and that delay is the main reason the response to a reward-rate halving is slow. But again the response starts months before the actual halving; and the cumulative effect of the halving on the rate -- more precisely the effect the rate has on how much electricity is consumed by the network over the years -- is approximately the same as it would be if the effect of the halving on the rate were instantaneous.
It is the fact that one of the major expenses (namely, hardware) of the miners is "lumpy" (requires an upfront expenditure that is then recouped over many months) that obscures the simple relationship whereby the collective expenses of the mining community approximately equals the collective revenues of that community -- where most of that revenue is from mining rewards, which is equal to the price of bitcoin (or the value of bitcoin if you prefer) times the rate at which the network dispenses bitcoins from miners as rewards. What makes me confident that expenses = revenues is that miners are rational and consequently are capable of taking into account scheduled halvings of the rewards to mining and the "lumpiness" of the cost of mining hardware (and many other factors).
> if the mining reward is cut in half, the electricity consumption of the network is cut in half
This would only happen if half of the miners shut off their equipment as soon as the reward adjustment occurred, which does not happen [1]. Even then, that doesn't change the electricity consumed by a single miner producing a single block, since that is governed by the difficulty parameter, which also did not halve and took multiple weeks to bottom out before increasing again [2].
There is no simple function between block reward and network or block electricity consumption.
1. There was a drop of 120PH/s to 90PH/s within a week after the halvening. https://www.blockchain.com/charts/hash-rate
2. You can see a similar curve of difficulty _following_ the hash rate of network, albeit over multiple weeks. https://www.coinwarz.com/mining/bitcoin/difficulty-chart
> A certain amount of bitcoin -- the amount determined by a schedule that was defined before the network became operational -- is given as a mining reward every 10 minutes. The incentives of the individual miners is such that the expenses of the miners (collectively) equals the mining reward -- and the major mining expense is electricity.
The 10 minute rate is true, but the expense is not collective. I as a miner am in active competition with my fellow miners and am incentivised to find ways to decrease costs (electricity), but only mine. In fact it would be in my best interest to increase the electricity cost of a competing miner in order to force them off the network, and if I win the block it is only my personal power backing that block.
> If the mining reward is cut in half, the electricity consumption of the network is cut in half, too.
Not necessarily. If the reward is cut in half but the price of BTC has risen considerably since starting mining operations then I will remain on the network as the profit is sufficient to continue. This is why the "halving" event that Bitcoin goes through has never had a major impact on either the price of BTC or the scale of mining operations globally.
> In contrast, if the rate of transactions changes or the number of miners change, electricity consumption stays the same. (More precisely, the expenses of running the network equals the mining reward plus any transaction fees, and since the blocks are of fixed size, for more transactions to compete for space in the blocks increases transaction fees, but I am guessing that transaction fees are currently a small fraction of the mining reward.)
This is very wrong. The expense of running the network is equivalent to all the energy burned by the entire network in order to find the next block. This isn't felt by the individual miner in any way other than a potential increase in competition to find the block, but taken as a whole the network is for example now considered to be using the total energy consumption of Argentina.
For proof of work networks to function securely, the network as a whole must have a much higher computation rate than an attacker.
Obviously capabilities increase the whole time, so the bitcoin network needs to be able to adapt - to do this, it adjusts its 'difficulty' approximately every two weeks. The power usage corresponds directly to the difficulty level set by the network.
If you add more miners, the difficulty will increase, and power consumption will go up, if miners leave, the difficulty will decrease and power consumption will go down.
The existence of Bitcoin forces all other money systems around the world to be at least as good as Bitcoin, or citizens will flee into Bitcoin.
Bitcoin adds value simply by existing, even absent serious adoption.
How many products and services are bought every day with Bitcoin?
I suspect BTC will have as much impact on conventional currencies as a fly landing on an aircraft carrier.
Companies like Tesla are buying Bitcoin, not because they intend to transact with Bitcoin but because it gives them protection against inflation within the US economy, and it gives them a stash of money that cannot be forcibly shut down, allowing them to do business even in jurisdictions that don't want them there.
If you are looking at just the "products and services" you are missing the forest for the trees.
Until people start accepting bitcoin for bread, rent and salaries, Tesla most certainly does not have a “stash of money that cannot be forcibly shut down”. It has something that might be able to be exchanged into a local currency to buy those things.
What’s more, that stash of bitcoin most certainly could be forcibly shut down at the stroke of a pen. Tesla is a public US company listed on a US stock exchange. If the USA decided tomorrow to criminalise BTC, Tesla would be left with a huge 1.5bn hole in its accounts and a huge number of very pissed off investors.
Moreover, if Elbonia doesn’t want Tesla there, how in the hell are Tesla cars going to arrive at ports? How are they going to be registered? How are Tesla going to deploy charging infrastructure? BTC has exactly squat to offer in terms of dealing with jurisdictions that don’t want them there.
BTC isn’t some magic wand that lets you operate in a fairy dimension where none of the rules of reality apply.
Bitcoin is already accepted by many for rent and salaries. Bread is not likely to ever happen because transactions are too inefficient, but that doesn't mean you can't viable have an economy based on larger exchanges.
If anything, I’d say that’s more a reflection of the poor state of the USA banking sector than its currency.
And, at the same time, there are many people, in less fortunate circumstances, for whom the benefits of bitcoin are felt much more acutely: https://twitter.com/gladstein/status/1357757736394444800
The "minuscule percentage" you quote (without reference) is very likely already clearly incorrect and will continue, over time, to become more incorrect.