Crypto and NFTs are a absolute disaster for so many more reasons than ecological
everestpipkin.medium.com
everestpipkin.medium.com
Most of the mining happening in China, for instance, is happening near non-CO2 emitting plants (hydropower, wind) where energy is virtually free most of the time. The increased demand for energy that is otherwise of little value may in fact be financing a rollout for renewable energy. The primary problem with renewables like wind power today is not production capacity, it is storage.
It stands to reason that at least some mining temporarily leads to increased CO2 emissions due to revenue exceeding the cost of fossil fuels. However, this only happens in the short term, because of difficulty adjusting revenue to the point where only the very cheapest energy sources remain competitive, and these are not fossil fuels. Furthermore, the increased demand for more efficient semiconductors finances the R&D required to lower the power usage of all computing into the indefinite future.
Also, the green power generation requires the manufacturing and distribution of things like solar panels, which is not currently CO2-neutral and has other environmental impacts.
There are also theoretical (if not real) limits to how much you can actually expand grid capacity. Mining already even in conservative estimates consumes a lot of power, and unless PoS is fully rolled out it will continue to consume more and more, which will put increasing strain on local power grids.
The post you were replying to is disagreeing with this. Power made available for extremely low cost next door to a hydroelectric dam etc. might be technically "on the grid" in that there is some connection between that town and the rest of the grid, but if the long-distance transmission lines are already at maximum capacity (which is usually the case, otherwise power wouldn't be any cheaper in those towns than anywhere else) then that surplus power is de facto not available to the rest of the grid.
Not necessarily in the sense of having their own physical wire, but if the path from the power generation facility to where the mining is taking place doesn't take up any long-distance transmission capacity (which is why power in those towns is cheap) then it's de facto the same thing.
> there's still a huge amount of mining that would by necessity have to happen on the grid. If consumers or small-time business owners get involved in crypto they have no choice but to use the grid.
If they want to participate as full nodes, sure. Maybe they shouldn't. And even if they are, they're going to be an insignificant fraction of mining volume.
This is a hypothesis, but where is the evidence, i.e. actually increased CO2 emissions? My argument is that most of this mining is using electricity that would otherwise not be used or produced. That is why it is so cheap in the first place.
If the power was literally not being used the cost would be negative - this is a real thing that happens. If it costs you more than $0/kWH you are creating demand and potentially increasing CO2 emissions.
That isn't really related. Like I said, it's possible the temporary spikes in prices can make mining with fossil fuels profitable, but that is in the short term.
> If the power was literally not being used the cost would be negative - this is a real thing that happens.
Price only goes negative when there is too much energy produced, but downregulating production would be even more expensive. This is mostly a problem with wind energy combined with coal or nuclear plants. Otherwise you would downregulate production so you don't have to pay the penalty. Consuming this excess energy in a profitable manner would keep prices above zero.
That’s the funny thing about this genre of arguments (Bitcoin improves GPU tech; Bitcoin subsidizes clean energy) — even if true, the gains will only be realized if there’s a crypto price crash, since otherwise mining absorbs the gains that it is responsible for by definition.
Similarly, one can point out all the advances that the Apollo program brought that are unrelated to space travel. COVID brought in lots of scientific insights that will bear fruit regardless of whether we have to deal with any other coronaviruses in the future.
The broken window fallacy does not consider the benefits from improvements of technology that may result from destruction. Suppose that smashing a bunch of windows would lead to permanent improvements in glassmaking efficiency. In that case, the benefits in the long run would far outweigh the short term costs. Of course, that's not a given with any form of destruction, but I am arguing that it is the case with cryptocurrency.
Like I said, not all destruction is destined to create excess value, but some destruction is, and I am arguing that this is the case here specifically. A counterfactual where this money would've been spent on something even more beneficial doesn't really matter. It wasn't spent that way and it could also have been spent in numerous other ways that are even less beneficial.
I think the opposite is true. Now that we have cheap GPU accelerators, the machine learning revolution is taking place. But where does that cheap GPU accelerator come from? Clearly, the more frivolous "gaming demand" was paving the way for machine learning, not the other way around. It's similar for mining.
> All the crypto boom did is create shortages and raise prices.
Rising prices are a signal to the market that production needs to be increased, which lowers prices in the long term. Shortages are short term.
A few minutes with Wikipedia and a calculator would also lead to the conclusion that transmission losses in the worst case of having to transmit the power the longest straight line within Chinese borders are somewhere between 5 and 10 %.
1. If you are the Communist party and you are planning electricity for a 5M inhabitants city in 2007, growing at 9% (doubling every ~7 years, electricity use is highly correlated with economic growth), you need to make the plants 10 times bigger than needed for them to last 20 years
2. Mining equipment is placed next to the source of electricity
3. Corrupt officials are co-opted (just turn on that turbine that is wasted working capacity for you, and I'll pay you in cash)
4. Profit?
FWIW, I think this doesn't happen exclusively in China but in every place where there's idle energy capture potential.
https://arstechnica.com/information-technology/2018/09/const...
Now I'm imagining a crypto currency that just gets awarded randomly to any person on the planet in a world-wide lottery. Or it could get distributed evenly like UBI to everyone.
Are you seriously asking how having the value distributed out to a large number of people could ever have utility without oligarchs to "set the value" to some "proper" value?
If you devise a way to have a proveably fair worldwide lottery for every human on the planet at essentially zero cost to each participant, in a decentralized network, I think you would will win a Turing at least if not a Nobel, aside from making billions of dollars.
You need a random oracle that outputs a value that maps 1:1 to a human in the world, probably without any form of pre-registration, because any registration function can be reused by the same human multiple times.
Basically a decentralized technology that can identify souls on the planet and randomly select them in a Byzantine fault environment. As of today, entirely indistinguishable from magic.
Of course it’s possible to do with a centralized registration system, but building and deploying such a tracking system IMO is akin to a war crime.
Imagine you did that, everybody has 1 UniversalToken every newborn gets one (and people are absolutely not killing they own children for personal gain as it was done throughout the human history, I diverge). And by yet another miracle this token has some value.
You know exactly what those struggling financially do with that token right away. Food is better than tokens.
You also know who will buy it.
Thy system self-"corrects" itself right away.
I've been thinking about it for some time. Fiat system is flawed, it literally takes money away from the bottom and puts it at the top (inflations + being able to diversify outside cash + loans + bailouts). But even the most perfect forms of money seem to have inherent unfairness in them. Money makes money. Having time to research possible investments, having money to do them, being able to afford risk, liquidity that allow you to avoid loans (unless you want to use them for leverage) etc. At least as long as people sell their time which seems like the foreseeable future.
If you were hoping for me to offer some solution I have none.
<daydreaming> But on the long enough run (if we have one) I think money will become irrelevant and our society will be more like a single organism. A shift in entity and entities mindset to be more oriented towards information processing and achieving specific goals / playing specific role and less driven by the limbic system which now can be satisfied at will if still present. I mean, it sounds mooshy wooshy, but look around your lucky good coders bubble. I think money is already losing value for those who don't worry about basic needs (while of course still being solution to 95% of problems for those less lucky, which seems great to remember).
In more strict terms, the only valuable thing on the long run is information. I hope for some well-grounded disagreement on that.
That being said, this has been done, but usually off the backs of existing blockchains. In Etheriumland this is known as an "airdrop" and is considered a form of annoying spam these days. Of course, if you actually wanted a wallet full of no-name ICOs you could just send coins back and forth to yourself to keep your address on the blockchain so that you got more airdrops. This is bounded mainly by gas price (which is artificially made scarce through protocol limits), but I wouldn't consider this system robust or equitable.
Also, NFTs are generally based on Ethereum, not Bitcoin. Did you read the article?
Name a single thing we produce with Bitcoin.
I have it on good authority that owning bitcoin gives people a very similar kind of feeling and there is nothing wrong with that. humans doing human things.
of course now there's plenty of arbiters of what constitutes proper warm fuzziness, and apparently a new BMW made from aluminium and steel is AAA+, but buying 0.1 of a bitcoin is not.
We think of them as having _other benefits_ besides environmental costs, but is this true? Is it better to travel far away to enjoy nature and a magnificent view, or to have the patience to look at things living in your own backyard for example?
Unless these things are being used as status symbols, or the person in question is actively attempting to destroy the environment, there must be some other benefit. Indeed, I certainly don't consider environmental cost to be a "benefit".
My "big petrol car" (which isn't really so big; more of a mid-sized coupe, but I digress) gives me the following benefits:
- "Warm fuzzy feeling" (the rumble, the hum, the traditional construction, etc).
- Plenty of power when I want it
- A traditional, relatively simple design that I understand; when something breaks or needs maintenance I can generally fix it. Some electronics, but not riddled with it throughout every system as today's vehicles are.
> Is it better to travel far away to enjoy nature and a magnificent view, or to have the patience to look at things living in your own backyard for example?
Well, not everybody has much of a backyard to speak of; however...
I would say that both are good. I don't get to travel much. Once every couple of years if I'm lucky. I wish I could more often. I probably won't even see most of my own country in my lifetime, let alone the wider world, and that... seems something of a shame. To imply that this feeling is somehow connected to the environmental cost of travel, well... seems a bit off.
Internet arguments about Bitcoin?
If can start on the agreement that we need to curb our environmental impact, then any new technology we embrace surely needs to be very useful to as many people as possible in order to justify any significant affect on the environment.
And just to be clear: Bitcoin is a bit more pushback than, say, residential heating, because it’s an entirely new CO2-emitting industry, and it is neither necessary nor beneficial except maybe for the thin slice of humanity that spends too much time on Reddit.
In other industries carbon emissions are an issue too, but at least there are people trying to bring energy use down with technology. Bitcoin’s difficulty mechanism nullifies any such attempts.
2. Charity: It's hard to really grok this if you don't live in the crypto world but people make insane amounts of money from Ethereum. I know multiple people who are under 30 and have each made upwards of $500,000,000 from buying ETH in the presale / insider trading in bull markets. Generally someone who bought into the ETH presale is a mega crypto bull and keeps a large percentage of their net worth in crypto. It's trivial for them to support artists by buying their artwork for a minuscule fraction of the money they've made. What sounds like "buying a .jpg for thousands of dollars" to someone not in this world, is more like the crypto equivalent of tipping a live streamer a bit on twitch.
Second of all - why do people pay more for a limited edition print than a normal print?
Why not buy Bitcoins instead? I think it has to do with the cool factor. It feels probably better to own an NFT than a Bitcoin, as it feels different to own actual art than stock in the Coca-Cola company.
(I can only guess though, I have never owned any of those.)
Well...no. Quite the opposite. The art is an asset. NFTs are not the artwork, and they're not a deed to the artwork. Buying an NFT gives you ownership of the NFT; it doesn't give you ownership of the artwork.
Selling digital unfakeable deeds to an artwork, and trading those deeds on the blockchain, sounds really cool. That might have value! But to the best of my knowledge, nobody has done that, largely because it's utterly impossible and we have no idea how to even go about trying to do it. And in any case, NFTs certainly aren't that. You're not buying and selling the artwork, you're buying and selling a numbered acknowledgement that the artwork exists.
- .pngs are you're 8 year old self may have left in your parents windows MyDocuments folder,
- scratch files your 14 year old self made at VFX camp
- any unused game assets that you have made for Unity/Godot
e.g. http://cryptoart.wtf/#https://superrare.co/artwork-v2/spheri...
(assign a GPT3 generated phrase, being fed some texts from the cubism,dada era (duchamp, picasso etc...) )
make 400$!
This thing is gonna get flooded
And I'm sitting on Marcel Duchamp's toilet chuckling to myself.
If you are worried about the environmental impact (which for 1 minting is fairly small) just use the PoS options available today and rant about ETH generally using PoW instead.
The article makes specific claims to the contrary
> just use the PoS options available today
Does PoS actually work today? AFAICS it's vaporware.
Yes. PoS chains using real practical byzantine fault tolerance like Cosmos Hub, using Tendermint consensus, have been running since 2018.
Which are unsubstantiated. One minting is basically one (largish) transaction. Transactions arent quite that expensive, it costs maybe $50-100 and you definitely don't put months of electricity to earn that little as a miner. I don't have the numbers but it doesn't check out.
>Does PoS actually work today? AFAICS it's vaporware.
Yes, it's worked for a while.
It's been coming soon on ETH. Again, you can use PoS options today outside of ETH. Tezos is a popular one, and even the biggest ETH marketplace (opensea) is adding Tezos as an option right now.
I'm not making _any_ claim about the worthiness/sustainability of the platform, just that it is what is being used. The list of "communities" on the Flow landing page suggests that it's being considered for a couple of high-profile platforms.
> today when you sell crypto art it's PoW.
I think more specifically when you sell crypto art on a platform that uses PoW, which makes this sentence a truism.
The author addresses the existence of Po[X]:
""" I’m sure you’re seeing the problem here- there is not a schema that doesn’t reward those who already are already wealthy, who are already bought in, who already have excess capital or access to outsized computational power. Almost universally they grant power to the already powerful.
This is also a climate issue. """
This is not correct. About 1 block is mined every 10 minutes, while block rewards decrease over time.
The one block per 10 minutes is also what is kept stable, and the reason mining difficulty increases over time. There is nothing in BTC mandating the difficulty to increase, and indeed it does decrease sometimes.
I think a better way to put this would be to say that cryptocurrency and cryptoart cannot maintain value without maintaining scarcity, which they do by burning energy. The value doesn't come from the energy burning in itself, but in the current NFT system, that energy burn is a necessary component to preserve value. An attempt to change this would require finding a different way to produce scarcity.
Ethereum seems to very much be in the process is switching to proof of stake but we should ignore that because of the author's gut feeling it's a "joke"?
I guess this claim depends on the definition of "climate justice." But if we broaden that "climate fixing" (which is how I initially took it, before going back to the original quote and noticing the word justice), what has to happen is that those in power need to care about the problem and know what to do to fix it. This can happen by putting power into the hands of those who care and know what to do and it can happen by changing the goals and know-how of those who currently have power. Neither option is easy!
I also think that these kind of insights are what would be needed for states to act on technologies that pose these threats, though I believe if regulation is applied there will be a lot, and I mean a lot, of backlash.
It’s ironic that Bitcoin started as a way to subvert the state, but now that its externalities are clear it’s a failure of the state to control those externalities. Never mind that it would require a global carbon tax, since coins are fungible and mining will relocate to avoid having to pay the cost of its externalities.
You're probably right that the same is not true of Bitcoin. In my experience the digital art community is less nihilistic than the Bitcoin community about climate impacts, if only because Bitcoin has had a longer time for people concerned about the climate to self-select out of the community.
This is not true, there are numerous ways to discourage these harmful proof-of-work systems.
This could be done at the mining source, by states taxing this industry extremely heavily or just banning it outright, and at the point of exchange, with states heavily taxing or banning conversion between normal currency to cryptocurrency. A wealth tax (payable in real money) on cryptocurrency holdings would be another option.
If enough economically influential states decided to do this, we should see a massive crash in the price of Bitcoin and similar cryptocurrencies from this, as people realise it's not worth the hassle of dealing with under these increased regulations.
Because that would be absolutely pointless.
If energy were infinite and free, then all of this would disappear instantly.
The value of crypto is proportional to the future cost of minting. No future cost == zero present value.
You are actually arguing that it's pointless to incentivise usage of clean over dirty energy. Do you own a coal mine?
> The value of crypto is proportional to the future cost of minting. No future cost == zero present value.
This argument requires some evidence. I was under the impression that scarcity of the asset underpinned the value.
Frankly, I'm increasingly of the opinion that we don't deserve to survive as a species.
> Digital files also require power to access and maintain, and are incredibly unstable over time as new operating systems, plugins and standards render things unviewable- often within a decade. They are also vulnerable to bitrot and physical degradation of storage media- the stable shelf life of a CD-ROM, for instance, is less than 20 years.
This is pretty much nonsense. The actual artwork on a piece of paper will typically be lower fidelity than a digital version of it, and paper degrades faster than CD-roms. I've dug out a CD full of photos that spent 10 years in a damp attic, and the photos are as good as the day they were taken - try that with photos printed on physical paper. Furthemore, while an NFT is by design not copyable in some sense, it's certainly not vulnerable to degradation of physical media.
For physical medium, given the right storage conditions, you can store film for quite a while, and that technically has infinite resolution in comparison to a digital copy.
I think the post does a nice job of countering this; a physical object will always contain much more information (in the Shannonian sense) than any digital alternative could, and that goes far beyond things like DPI.
I don't know your definition of fidelity, but a paper artwork is full of details and a digital capture of it will loss information. Consider the tridimensional nature of real paper and paints, or the infinite interplay between light and medium. You can't capture any of that information in a digital copy.
Also, the argument about longevity is not that clear cut. We can see paintings in cave walls from thousands of years ago, same with stone carvings. Let's see if you can render a JPG 10.000 years from now. (without having to reconvert/maintain it each epoch)
The solution to proof of work using too much energy is not proof of work. It's fractional reserve bitcoins / ethereum / etc.
To explain:
For game theoretic / economic reasons, people will spend as much effort mining as there are mining rewards to be claimed.
If move to a system that doesn't hand out mining rewards, you still have to hand out the coins on some basis. So people will do the activity of that basis as much as there are rewards.
I will talk about bitcoin for simplicity.
It behaves very much like gold in a lot of respects.
If bitcoin sees wider adoption as cash, that means it will have to support a larger amount of spending in real terms and also a larger demand for real balances held in 'cash'.
Since the total nominal amount of bitcoins is fixed, you can only get the latter via an increase in the real value of each bitcoin.
But, here's the solution: gold was (and is) also hard to mine, but even when gold was money, you didn't actually need physical gold coins to serve most of your cash needs.
Bank notes and 'checkable' deposits fill this very need: they allow to expand the effective money supply without needing to mine more gold. The same will work for bitcoin.
(Of course, only that the banknotes will be electronic, of course.)
We already see some signs of that eg in bitcoin futures. The only way to get investment exposure to bitcoin used to be buying physical bitcoins. But nowadays you can buy (and roll over) bitcoin futures instead.
Of course, every future needs a counter party that's taking the opposite side of that exposure.
If you think about it, that's pretty much the same thing that banks do. Selling futures is very similar to offering time deposits:
With a time deposit, the bank incurs an obligation to pay a certain amount of money later. They could hedge that obligation by just holding on to physical money, but more typically, they invest in assets like bonds and loans, and hope to be able to exchange them for money when they have to pay back the time deposit.
That's basically the same economic exposure as being short a bitcoin future and going long a bond future.
To end the long rant, even if your base currency is gold or bitcoin, you can support lots more money than that.
> a financial network that uses more energy than Argentina
https://en.wikipedia.org/wiki/List_of_countries_by_electrici...
Just for context: Argentina used about 3% of the energy consumed by the US alone in 2018. And only a fraction of that amount consumed by G8 in total. However, the number does not tell us how this energy was produced and, hence, can not provide an insight into the environmental impact of Cryptos. If it came mostly from renewable sources, the carbon footprint of Bitcoin and other cryptos would be quite reasonable, I believe.
Is this worth looking into?
It's about how he's against the tokenization of art, which happens on the public ethereum blockchain. Tokenization brings uniqueness to digital goods, because it allows you to prove ownership if all parties involved accept the blockchain as a source of truth.
Edit: I see I am getting downvoted for simply stating facts again. Perhaps you could try and debate instead?
Downvoting without providing a reason is indeed demoralizing and toxic imho.
That's an opinion - one I tend to share - so feel free to disagree.
> Cryptoart lets a few artist early adopters get rich from a system made to reward investors, not artists.
This is true in the same way as Da Vinci pieces are expensive because Da Vinci was an "early adopter" (one of the first great artists)
When the value of crypto is high, large amounts of economic output are funneled into crypto at the expense of other opportunities. NVidia expects supply shortages of its newest line of video cards (released in December and going for $1500+ on eBay from an MSRP of $700) to extend into 2022. Oh yeah, and this happens every time a new generation of chips is released. Hope you didn’t need any to train ML models.
I started out mining BTC on a Core2Duo laptop from 2006, in 2010. I upgraded to a Butterfly Labs Jalapeno miner. Then I started to realize Chinese miners were soaking up the mining equipment and many of them were getting industrial power rates.
Then people who couldn't afford / acquire BTC ASIC miners made more ridiculous alt-coins that they could mine with GPUs. Cryptocurrency isn't the problem, people butthurt about missing out and wanting to make their own coin are the problem.
This is part of the story, the other part would be central banks printing money nonstop, or in common parlance, "money printer go brrr".
Bitcoin can only exist in a post-2008-financial-crash world. Prior to that, there was no reason to consider anything other than the US Dollar. Bitcoin, however, is a solution to only one part of an overarching problem, or at least this is what I think: financial services need to be reigned back in if we have any hope as a species of surviving. Continued worldwide crashes caused by financiers engaging in riskier and riskier behavior in the name of enormous profits will eventually result in a war when one of the nations on the "losing end" decides they've had enough.
Maybe if they would fix their ideology, people wouldn't have to resort to decentralized solutions.
As for the actual content, I plainly don't trust the calculations of the anti-crypto crowd.
And while I also had lost faith in Proof of Stakes ever making it into Ethereum (unfortunately also selling all my Ethereum when I gave up on them), they have now activated the PoS chain and run it in parallel to PoW, with the goal to switch completely.
The stuff about "social justice" is also nonsense, at least with respect to mining in PoS: it is not that much Eth you need to participate, and if you don't want to invest as much, you can join a mining pool. Everybody can participate, if they want to. It is also not "unjust" if people who invest (or stake) more receive higher rewards. The opposite would be unjust.
Contrary to the article title, 90% of the arguments exposed are just rehashing why energy waste os bad, and why we shouldn't make use of it for NFTs. 10% of the article ("the many other reasons") is a critique of the art circuit and imho, a little ranty about how hard it is to get rich from art.
The actually interesting part of the article is at the end, but its just an enumeration of the ways in which cryptoart world:
* Cryptoart creates artificial scarcity for digital objects, creating an “original” which can be owned
* Cryptoart recreates the some of the worst aspects of existing art markets
* Cryptoart offers no intellectual property protection and there is no regulatory structure in place to keep copyrighted materials from being minted into and sold as NFTs
* Cryptoart smart contracts offer no legal protection, and any talk of contracts baked into the NFT “requiring resales to cut in the artist” or “compensate gallery workers” depend entirely on the goodwill of the purchaser.
The rest 4500 words are a repetition of how bad it is to waste energy, woth a note at the end about how the author was "never as bored with a subject to write 5000 words about it", which to me is pretty passionate.
edit: formatting
I always enjoy the few people like yourself who call it like it actually is.