I feel like it's really easy to pin bitcoin on its energy usage just because it's so easily measurable. Is there any research that compares a traditional banking platform in terms of W/tx in comparison to bitcoin?
The upper limit of the amount of power a country’s financial system could use is the power footprint of that country. Likely the real usage is a small percentage of that, but that’s the upper limit.
Now, given Bitcoin uses more power than countries of millions, but supports the transaction load of a few hundred thousand, do you think it is the slightest bit possible your comparison would come out favourable to Bitcoin?
Dollars are backed and secured by the USA. How much energy does the USA military use?
>That's not just to secure the value of dollars, your comparison is meaningless.
Yes the calculation is not complete, but it demonstrates that the other calculations are completely invalid too because it doesn't consider those factors either
The total market cap of a cryptocurrency is a somewhat meaningless statistic, it certainly doesn't directly translate to value.
Yes and the calculations are all completely invalid. Not sure what you are missing.
You need a whole infrastructure to power a transaction. That means an asset with value, a secure way to broadcast it, for other people to see it, etc. Running the infrastructure and securing it is absurdly expensive for the traditional system; they are even employing perhaps millions of people to run the worldwide network. The human cost is extreme but you are limiting the discussion to energy expended. Unless you consider all this how can you put the energy usage of BTC in context? This is especially true since a system like BTC, the energy used is not even proportional to the number of transactions that are processed. Extrapolations don't even consider that the mining reward is motivating miners but it will disappear completely in future - i.e. the energy is being used to build a system and distribute assets that can exist for endless years. All the logic is a joke
It's like saying it's cheaper to solve an equation by hand than to build software that can do it automatically. But doing it by hand requires human intervention, while that one-time cost of building the software can automate the work, be adapted for myriad usecases and run for the next 1000 years
The consequences of expending the energy to create and distribute this 'unit of account' is profound and incalculable, even if one wants to argue that a decentralised financial system with mass surveillance like BTC will have a negative impact on society
> 778,988 - The number of VISA transactions that could be powered by the energy consumed for a single Bitcoin transaction on average (1157.81 kWh).
Obviously bank transactions would also come out way ahead, those are essentially a DB update built on trust and for speed, whereas proof-of-work is severely inefficient by design.
Current block reward is 6.25 and it will be half that by 2025.
Another easy thing to measure about Bitcoin is its economic value. You can readily assess the market capitalization, and you can also examine the blockchain to see precisely how much it cost users to conduct the transactions in recent blocks. The bottom line for me is that the miners aren't working for charity; they are taking fees+reward >= their electricity cost, and this is paid for by the users of Bitcoin. So those who criticize Bitcoin as an environmental catastrophe might as well say the same thing about YouTube, Aluminum production, or modern industry more generally.
It's just a particularly easy target because many people find the economic importance of Bitcoin and the recent development of the same mystifying.
A comparison I found recently is that Bitcoin uses 10x as much electricity as Google.
Why is this? Well, you can think of Bitcoin as giving away prize money to miners who win a contest. Currently they are giving away over $50 million in Bitcoin every day. [1] The electricity spend by miners is capped by the amount of prize money.
Why so much? It wasn't planned. The bug in Bitcoin's algorithm is that energy usage is proportional to market price, and the amount it went up wasn't anticipated. If Bitcoin crashed to a tenth of its current market value, it would be about even with Google. That's still way too much for what it does. Maybe it should crash to 1% its current price, to be reasonable?
Besides a market crash, the other way to fix it would be speeding up the schedule for lowering miner awards. It's going to drop in half this month, but there's no principled reason to wait another four years for the reward to drop in half again. But good luck getting consensus for that. More revenue is better than less revenue and miners don't want the prize money to drop.
Another comparison: Musk sponsored a $100 million X Prize for inventing carbon capture technology. That's a very big prize for an important cause, and it's only 2 days of Bitcoin prize money.
The Bitcoin prizes are too damn high.
[1] https://ycharts.com/indicators/bitcoin_miners_revenue_per_da... [2] https://www.xprize.org/prizes/elonmusk
That doesn't really fix it, because transaction fees will start to dominate the block subsidy within 4 halvings or so.