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Comment by Me1000 | Hacker News Reader

My problem with these takes is that they're missing the forest through the trees. I don't believe you'll ever be able to solve climate change by shaming people based on their usage of electricity. The problem is not HOW people use electricity, it's how the electricity itself is generated. The electricity might be used to draw triangles on my screen, hash some value, keep me warm in my apartment, or make my car move; each of those things might be objectionable to someone.

Ever since humans learned to harness electricity our usage has increased, and with it our quality of life has also increased. That's not going to change. The only way to prevent electricity usage from causing climate change is to regulate emissions themselves (either through carbon taxes or outright bans: that's for regulators to decide) and invest in alternative forms for electricity generation (that includes nuclear).

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This would be a reasonable stance if Bitcoin were just another activity, but it’s unique in its energy profile. What other technology is designed so that energy efficiency improvements are absorbed and nullified (through the difficulty adjustment mechanism)?

Precisely.

Without Bitcoin, we could be retiring coal plants with the additional solar and wind that have been coming online. Instead, every additional Watt-hour we generate is used to mine Bitcoin on top of existing demand.

That's an absurd argument. And as long as we're using solar and wind, we'll need backup from coal, gas and nuclear for when the sun isn't shining and the wind isn't blowing. If you think increasing battery capacity will solve that, read up on the supply chain of lithium.

Coal is a baseload generator. It cannot ramp up or down very easily.

Nuclear is mostly baseload... not so much because its impossible to ramp-down nuclear, but because nuclear's initial-investment (site planning / engineering / regulations) are the bulk of its costs. Ongoing costs (ie: fuel) are miniscule.

There's "no point" ramping down Nuclear, given its miniscule fuel costs. Might as well keep pumping electricity as long as the price of electricity is non-negative.

So only gas ramps up-and-down.

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As such, Solar / Wind + Gas Peaker combinations are very good for ramping down Coal production. Because the bulk of electricity is needed in the daytime (due to the hot sun making AC work harder), Solar/Wind + Gas Peakers will use less fossil fuels than a Coal baseload generator over the same period.

What about hydroelectric? Is it not possible to ramp up and down there?

Hydroelectric is great, but only when the geography + local water usage agrees with the construction project.

For places like California which is facing a shortage of Water, Hydroelectric is a weaker option. Ex: if you run a dam in reverse for Pumped Storage, that implies sucking up the precious water from the lower-reservoir back up to the upper side.

Realistically speaking, the near term future is Solar + Gas peakers. We should build out as much Hydro-electric as possible, but most good river sites are already built out. (IE: Rivers which have a large change in elevation to make a Dam project actually worthwhile).

I read somewhere recently that if existing dams in West Virginia were retrofitted with hydroelectric capabilities, they could yield something close to the power requirements of New York City.

Maybe hydroelectric isn't an option for California, but in the east, there might be much more of an opportunity.

Ish. The east already has the Bath County Pumped Hydro station (aka: "the largest battery in the world")

Its not like the East needs more hydro / energy storage. They've already got GW-hrs of energy storage. That's the "problem" about geography-based solutions: the places where Hydro already makes sense are already built up 50 years ago.

Not that that makes Hydro a "bad idea" or anything. If anything, it proves how Hydro has been tested for decades and is effective. It does mean that the East can build up more Solar Panels, since there's plenty of energy storage available.

Coal plants can't dynamically ramp up or down to partial capacity but coal plants can be activated and deactivated according to demand - there is, essentially, a priority list of plants in the US dictating the order in which to turn them on in times when demand is exceeded - there are also some bi-modal plants out there (some hydro plants on lakes which can pump water into the lake during low demand times and run their turbines when demand is high).

Coal plants tend to be quite low on this list due to their poor scaling and obvious environmental impact - in fact for a while (I'm not certain if this is still accurate - it's about a decade out of date) one of the last entries on that list was a rarely activated coal power plant in downtown boston that had an extremely inefficient conversion ratio and was deemed exceptionally dangerous due to being located in a population center - still, in times of extreme demand it was standing ready to be activated.

lithium is now barely used in the latest battery tech. See Tesla

No design needed. If the price of gold doubles, twice as much resources can be invested to dig up a ton of gold.

That applies to bitcoin too, but gold doesn't also become twice as hard to dig up just because mining equipment became twice as efficient.

>gold doesn't also become twice as hard to dig up just because mining equipment became twice as efficient.

it does, kind of. as we use up the easy to find deposits, the remaining deposits are harder to mine/refine, so essentially it does get harder.

Gold has an intrinsic additional cost to acquiring that is unrelated to humans. There exist deposits that are harder to get to in the world and it isn't currently economically viable to extract them. This isn't mankind's doing it is just a truth of the world.

Bitcoin adds artificial scarcity that isn't intrinsic. And unfortunately society as a whole pays for that additional scarcity by increasing the resources spent mining blocks.

I am not saying this is an unacceptable trade-off all things considered. I just think the gold analogy is flawed.

>Gold has an intrinsic additional cost to acquiring that is unrelated to humans. There exist deposits that are harder to get to in the world and it isn't currently economically viable to extract them. This isn't mankind's doing it is just a truth of the world.

I disagree. Gold was specifically chosen to be rare and hard to counterfeit. That's why we don't use sea shells as a store of value. In that respect I don't see how awarding value to holders of a shinny yellow metal is any different than awarding value to holders of a hard to find hash.

The most obvious difference is that the "mining" of BTC is necessary for its security/transaction layer. The security of the worldwide gold supply is not contingent on constantly directing more resources towards mining, and it is possible to continue to transact with gold if mining were banned altogether. Most holders of gold don't have any interest at all in mining; indeed curtailing gold mining would actually work in their favour.

(But yeah, gold hoarding is pretty wasteful in multiple ways too)

> gold hoarding is pretty wasteful in multiple ways too

Isn't most hoarding wasteful?

This is also literally how oil/fracking projects work and are decided

Bitcoin is far from unique in this. When gas prices fall people have been shown to drive more. And buy less efficient cars and drive them less efficiently (faster, more aggressively).

When water prices are lower people water their lawns more and take more baths.

When shipping ePackets from China is cheap, people buy more stuff from there.

I just don’t see how Bitcoin responding to supply and demand is different from any other consumable.

It feels like the argument makes the unstated presumption that Bitcoin has no utility, which is a separate debate. Bitcoin advocates would say that more and more miners arguably provide greater security assurances making the currency itself more valuable.

> Bitcoin is far from unique in this. When gas prices fall people have been shown to drive more.

This is human behavior responding to incentives. Yes, more energy is burned, but more people get places.

What I’m talking about is like if a car responded to the price of gas decreasing by 50% by revving in neutral until the total cost per mile was the same.

I think this is not what the parent poster was saying. The problem of bitcoin is not one of induced demand, where cheaper goods means that people become willing to use it less efficiently. Difficulty adjustment is as if every car monitored its MPG and then dynamically adjusted the engine until it became as efficient as a 2003 hummer.

When the mining efficiency is increased, that isn't translated into more bitcoins being mined or more people benefiting from bitcoin. The matching mining difficulty increase ensures that all that extra efficiency will be turned into waste heat.

>> This would be a reasonable stance if Bitcoin were just another activity, but it’s unique in its energy profile. What other technology is designed so that energy efficiency improvements are absorbed and nullified (through the difficulty adjustment mechanism)?

> Bitcoin is far from unique in this. When gas prices fall people have been shown to drive more. And buy less efficient cars and drive them less efficiently (faster, more aggressively).

I don't think that's true, or it's only true if you look at it from a consumption perspective that ignores important parts of the picture.

When gas prices fall, more energy is used, but travel miles increase. More work gets done per dollar.

When bitcoin mining gets more efficient or energy cheaper, the amount of bicoin "work" done stays constant, because the difficulty changes to compensate. It's like if roads got longer the cheaper gas gets.

> When bitcoin gets more efficient or energy cheaper, the amount of bicoin "work" done stays constant...

Not quite. The extra work it does allows the network to secure itself better. We don't have to agree with this energy use, but it does do something.

Do you believe the Bitcoin network would be insufficiently secure if miners were incentivized only by the transaction fees and not the block rewards?

Bitcoin has to withstand an attack from central banks of the world in the future. Just look at some comments from Christine Legarde to see what is coming. It's the war of media companies vs internet coming back, just with something much more important. I hope Bitcoin wins, but I think that nobody knows the future for certain.

Other cryptocurrencies? Maybe, I am not an expert on them. But definitely not bitcoin. Its transaction speed is simply way too slow. And it is not even close.

Most cryptocurrencies are a joke, trivial to attack by any state, or even somebody renting machines on AWS

> Bitcoin has to withstand an attack from central banks of the world in the future

Q: How do we imagine central banks would 'attack' a cryptocurrency, and how is a cryptocurrency (or its users/owners/proponents) going to defend against whatever form such attacks might take?

Buy / bribe miners to have a constant 50% attack even if they lose billions / tens of billions of dollars.

Bitcoin mining should soon be seen as national security threat for countries that have the most bitcoins, that's why having so much hashing power in China is dangerous.

> Buy / bribe miners to have a constant 50% attack even if they lose billions / tens of billions of dollars

(This is a genuine question, I'm not nearly as well-read on this as I should be) What would this achieve, and whom would benefit?

My naïve assumption would be that coordinated, deliberate (over-)regulating of cryptocurrencies and/or attempting to manipulate prices lower might be a) much cheaper, and b) much more effective.

If you bring enough political pressure to bear on any particular international financial flow, it takes quite a lot of (political!) effort to stand up to that.

Look at what happened between the US and Iran re: the reintroduction of sanctions; then look at the response from France, the United Kingdom, and Germany.[0][1]

Can Bitcoin and its backers (yet?) muster sufficient political muscle to respond if there's a coordinated political attack?

[0] https://www.europarl.europa.eu/thinktank/en/document.html?re... [1] https://ecfr.eu/article/commentary_trading_with_iran_special...

It's easy to censor Iran if you control the international clearing system.

What you suggest is more similar to banning gold, which happened 100 years ago in US. Where do you think gold price went after that?

> What you suggest is more similar to banning gold, which happened 100 years ago in US. Where do you think gold price went after that?

Where the gold price when after 1933 isn't that relevant to all those who were forced to sell their gold to the Federal Reserve at that time.[0]

Thought experiment: were your national government to pass a law forcing you to sell your Bitcoin to them at a price they pick, you would appear to have precisely two options: 1) sell, or 2) be prosecuted

There's plenty of precedent for 2) [1], so I'm guessing most people would end up opting to sell. That would appear to be the end of that... (?)

For clarity: no, I don't think this is right. It might happen anyway.

[0] https://en.wikipedia.org/wiki/Executive_Order_6102 [1] https://en.wikipedia.org/wiki/Executive_Order_6102#Prosecuti...

Any decent sized nation state could afford a 51% attack if they didn’t care about profiting on it and only wanted to wreck Bitcoin.

In theory sure, but how do you suggest to do it in practice?

Turn off electricity to half of residents because you have this crazy idea that doesn't help them? Buy miners just to get nothing out of it at the end?

Also what do you think other billionaires with Bitcoin holdings do? Sell it all, or counteract by buying even more miner equipments?

It would be a political disaster unless all natiom states work together to take over all miners...which is a possibility.

A fall in the price of a product (say, as a consequence of efficiency gains in the production process that shift the supply curve) increases the quantity demanded for that product. The end result of the efficiency gain is an increased consumption at a lower cost.

Yes this is known as Jevon's paradox and is not unique to these situations

https://en.wikipedia.org/wiki/Jevons_paradox

We can't simply just rely on improvements in efficiency to solve these problems.

But when gas prices fall people either move those savings to cheaper, less efficient cars or get more satisfaction out of their driving?

Whereas there is very little change in the bitcoin mining, unless you have fetish for long zeros in hash values.

The zeros translate to "more secure network"

This is both a good and a fair critique of bitcoin. But I don't understand the endgame. Should the use of bitcoin be banned or just shamed?

Let's assume for a moment that I live "off the grid" and run my full BTC node using my own solar power. Is that something that should be banned? Should it be shamed?

I don't know where to draw the line.

This is a great question and I don’t have all the answers, but I’d at least like to see CEOs who put it on their balance sheet put to task for it. E.g. putting it on your books should be penalized by ESG funds. Elon Musk shouldn’t get away with greenwashing it through Tesla’s (possibly overrated anyway) environmental halo. Nor should California taxpayers be subsidizing electric vehicles if the carbon benefits are negated by the manufacturer’s Bitcoin holdings.

>This is a great question and I don’t have all the answers, but I’d at least like to see CEOs who put it on their balance sheet put to task for it

Should CEOs who put gold on their balance sheets be put to task for the environmental damage that causes? Should companies that buy conflict minerals be put to task for that as well? If so, you're just describing a pollution tax.

Yes, I think they should.

The difference between this and a tax is that it’s not done by the government, but for what it’s worth I don’t oppose that either.

> Should companies that buy conflict minerals be put to task for that as well?

They very frequently are.

What is the marginal environmental impact of a company adding 1BTC to its balance sheet?

Nothing, The miners are already securing the bitcoin network regardless of companies adding them to their balance sheets.

Teslas holdings do not cause emissions. Every time I see one of these bitcoin climate articles on HN the quality of dialog and general knowledgeability of the subject at hand, takes a nose dive.

Sure, technically it’s not holding that increases emissions, it’s buying, but you can’t hold without buying.

Buying increases the market price, which increases the market value of the block reward, which increases the amount of energy miners are willing to use to earn the block reward.

And also increases the demand for more efficient mining rigs and pushes miners to move equipment. When we sold the miners we used to heat our building back in the winter of 2017, We made sure they went to an ethical place (a hydro dam in OR). In some cases, it's a neat way to store energy that would otherwise be waisted.

banning bitcoin would be fine with me, because i think the tradeoff is a bad one.

The endgame should be a global carbon tax.

In my original comment I said I favor carbon taxes (in addition to other measures to stop carbon emissions).

But the comment I'm replying to seems to imply that it doesn't matter where the electricity comes from, that bitcoin is bad regardless of how the electricity is generated.

If the externalities were properly accounted for, I wouldn’t have a problem with Bitcoin. It wouldn’t be my cup of tea, but neither are lots of things. It’s purely the externalities I care about.

A global carbon tax would be great if it were enforceable but it’s not. Just look at how we treat our oceans. It’s especially a problem with Bitcoin since production will naturally shift to the cheapest location, and since it’s fungible and non-physical this can’t be accounted for with trade law/sanctions the same way it could with manufacturing.

Compared to other methods of money transfer I think Bitcoin does pretty well in terms of its energy usage. How much energy is used printing money and shipping it to various banks in Brinks trucks? How much is used building and operating millions of bank branches/ATMs worldwide?

Cash is terrible. But that's not all "other methods of money transfer". Compared to an ATM debit, credit card payment, or even most modern crypto coins, the energy cost of Bitcoin is ridiculous.

The marginal cost to use an ATM is low but what about the fixed costs of installing them and the ongoing maintenance? How much methane is released into the atmosphere feeding bankers porterhouse steaks?

The problem is more fundamental than that. We cannot solve climate change by subtraction (eliminating things, usage, consumption, fuels, factories, etc.). We know this with absolute certainty through at least 800,000 years of highly accurate ice core atmospheric data.

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