The Blockchain Is a Dark Forest
somethinginteresting.news
somethinginteresting.news
The energy is not wasted, it is ordered, not demanded and thus never produced. If it were produced it would actually be extremely difficult to get rid of this much energy. You can't just easily dump energy.
As the author is waving their credentials around, I am an active researcher on renewable power grids. It's a bit scary to think that someone with such a basic misunderstanding of the power grid was asked to referee a paper on this, but then a lot of marginal research is published everyday and referees have to come from somewhere...
"For a coal fired power station, for instance, about 2/3 of the energy released when the coal is burnt is discarded as heat in the environment. This reject energy sometimes appears as clouds of vapour coming off a power-station’s cooling towers, such as the well-known ones at Didcot in England."
-- https://energycultures.org/2014/07/rejected-energy-much-ener...
As others have pointed out, the power grid does not even have the capability to "burn off" excess power. It is simply nerver produced in the first place.
Edit: Ok I read the note at the bottom and the graph literally adjusts the rejected energy of renewables to match thermal power plants. Assuming 33% efficiency that means 12.56 phantom units of energy that never even existed in the first place are being rejected.
The only way Bitcoin would use this energy is if they had a contract with the power company to be an on-demand load, switching on and off to help smooth the peaks.
If they aren’t they’re just driving up power use and forcing more operation of less efficient reserve generation on peak.
I understand that a lot of the servers are close to large hydro plants. Under-utilised hydro plants can simply spill water - they spin up and down rapidly compared to thermal plants.
But that is exactly how power plants are using Bitcoin. That's the idea behind Seetee.
I didn't know about Seetee but potentially there are some minor opportunities to mine bitcoins (effectively as an on-demand load) to help balance the grid at short time scales. It also makes sense for a Norwegian Energy company to do this. However this is a tiny amount, especially compared to the efficiency losses the author is presenting in the graphic. I looked up some data I had handy right now and I think we are looking at a few percent of the overall energy consumed at most.
- The visualization used by the author shows US energy consumption while ~65% of mining takes place in China[0] where burning coal remains the dominant energy source.[1]
- Miners run 24/7/365, they add to the baseload!
--
[0] - https://www.statista.com/statistics/1200477/bitcoin-mining-b...
[1] - https://www.eia.gov/international/analysis/country/CHN
98 % of the electricity in Iran is generated from burning either gas or oil. https://www.eia.gov/international/analysis/country/IRN
What surprised me is that "Transportation" in that graph is supposed to "reject" over 22% of its energy, which seems odd to me. For electricity I get it, it's hard to store so if you have excess production there's not much you can do. If your wind turbine can't dump its energy anywhere it's just lost, usually. But for petroleum can't you just... not use it?
As such I wonder if "rejected" means all losses? In which case it's unclear how bitcoin would fit into that.
In general I think the author doesn't make a good enough case. He'd have to show not only that there's enough loss to power the bitcoin network, but also that bitcoin actually slots into these losses instead of adding to the demand.
(Tin - Tout) / Tin.
Actual numbers for coal, oil, and nuclear plants run lower, maybe 40%. The most efficient natural gas plants come close, around 60%, by running at higher temperatures and avoiding conversion to steam.[1]
[1] https://www.brighthubengineering.com/power-plants/72369-comp...
It's a really weird take if that's what the author is saying.
>If Bitcoin used only wasted energy it would consume >2/3rds of the energy of the planet.
>This is why hand-wringing about Bitcoin’s energy use is so frustrating. Bitcoin is pointing at the moon and people are yelling at its finger. The self-congratulatory ignorance I see in this debate is unreal.
I don't get what it means or what point the author tries to make here.
The software Ethermine is using simulates each transaction and then reads the logs to analyze transaction profitability. They could have chosen to analyze the “opcodes” instead, but that is technically complex, and Ethermine was in a hurry to steal. So this guy created a coin that emits fake transaction events that are recorded in the logs, specifically a fake event that made Ethermine and others like them believe that they were being transferred X number of coins, when they were actually being transferred 0.1X. This led to Ethermine and several others unintentionally donating over 100 ETH to him before they figured out what was happening.
The wasted energy he is talking about here is mostly waste heat and other losses, it is not energy that is actually available for use. That makes the argument pretty silly, since increasing power consumption incurs the exact same losses.
Another, earlier application of the Dark Forest metaphor to ETH / Uniswap by different (?) authors.
The ‘generalized front runner’ described in ^^ seems to me far more pernicious and terrifying than the behavior described in TFA.
In blockchain, the miners control the order of transactions. They do all manner of things to extract profit from your trade because of that control. The simple solution, which is good enough for most people, is to restrict the slippage and assume the miners will get as close to that number as possible. But people are thinking of this problem very hard and ways to solve it.
However, it's not front running legally, because the transactions are public.
HFTs are again, not able to effect your trade. If you place an order in an exchange then HFT's will respond once you have traded, but your trade is guaranteed to go into the market and execute without anyone interfering before hand. If there was liquidity in the market when you tried to trade at the price you entered, you will get that trade. Now it may be that an HFT sees your trade in Chicago and goes off and trades on some other exchange super quickly based on the new information or they might cancel their remaining orders in the makret, but they cannot interfere with your trade before execution.
What's unique about the ethereum situation is that different actors int he market can interfere with your trade before it executes because your desire to trade gets published before it's executed and the miners (in this case I guess sort of analogous to the exchange) are willing to prevent you accessing the market due to a bribe from a third party based on the information you were forced to publish. Which means you never have confidence that you can actually execute a transaction you beleive is available in the market.
Payment for order flow (at least in the case of retail brokerages) is more about the big players preference for trading with unsophisticated players. The rubes just lose more often without any malfeasance required on the side of the brokerage
Won't Bitcoin mining show up as part of use used residential and commercial electricity?
And, wouldn't "less coal and natural gas burned" be more desirable than "using that to mine Bitcoin" and sneering about "handwringing"?
But to answer your question: IC engines are energetically inefficient - at best a large fraction of the input potential energy escapes as heat, and actual car engines are worse than ideal.
Transportation is inefficient because ICE engines need to run at lots of different RPM ranges. Hybrid cars have more efficient engines because the engine can run at the most efficient RPM. EVs only have charging and battery losses.
Since trading doesn't impact price, front-running can't be done by sandwiching buy/sell orders but with LP orders.
Also slippage isn't price movement due your own trading (that's price impact). Slippage is difference between displayed price the moment your press trade and price when order is processed at exchange (due to other people's trading during network delay).