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Comment by toomim | Hacker News Reader

As a Bitcoin miner (https://toom.im), while I appreciate the work put into it, this particular metric of "transactions per kW" might not work the way you expect.

The main point that you should understand is that a PoW blockchain's energy usage is not proportional to its transactions.

I'll say that a different way: the transactions themselves do not use any energy in mining.

I'll say this in a third way: it takes exactly the same amount of energy to mine an empty block as it does a 1GB block of transactions, as it does a 1,000,000,000 PB block.

In reality, transactions are all hashed together in a mining pool into a single numeric hash before miners ever see them. It doesn't matter how many transactions are included in the hash. The hashpower just has to find a magic number matching that hash.

On the other hand, the #1 factor that increases a blockchain's energy usage is its price per coin. The price of a coin is how much that coin is worth to be mined, which is the incentive for miners to dump energy into mining it. In steady state, miners will dump energy into mining a coin until the cost of energy = the value of the coins coming out.

This is why you can see Bitcoin SV at the top of the list -- it's worth the least of the Bitcoins.

And it's also misleading to compute the second factor -- transactions per second -- by counting the actual transactions on the blockchain, rather than looking at the transaction capacity. Because blockchains only cost something per transaction once they reach capacity. This is misleading with Bitcoin SV, for instance, because that coin artificially creates bogus transactions on its blockchain in order to make it look popular and demonstrate the vision of large blockchains. Bitcoin Cash, on the other hand, can handle a thousands of transactions per second (on testnet) but doesn't clog its live blockchain with them.

So, in sum, if you send a transaction on Bitcoin Cash, it will cost 0 kW of electricity, even though it says 31.3 Txs/MWh (which equates to 31.9kW/Tx) in this chart. This is because transactions do not cost anything in electricity. Electricity only goes to preventing double-spends. A better metric would be "energy use per double-spend that was prevented."

View on HN

"Energy used / total value secured" is a better measurement. "Double-spend prevented" isn't calculable.

Important to remember that the energy used on mining both secures current and *PAST* transactions, that's the entire point of the blockchain. I think "total value secured" captures this point.

I find it frustrating that crypto-currencies are judged by their energy usage, meanwhile traditional fiat currencies are secured by massive banking industries, governments, and militaries. The total energy required to maintain a secure and stable fiat currency is likely orders of magnitude greater than that of Bitcoin today. The problem is one is easier to calculate, so it generates easy headlines from lazy journalists.

Fundamentally energy usage isn't a worthy argument for or against a currency. It's the wrong measurement to use. It seems to be the go-to straw-man argument for those who already made up their minds about cryptocurrency before hand.

Yes, Proof-of-Stake exists, but notably it does not exist at a reasonable scale yet. If it could work as well as Proof-of-Work then it eventually would displace it. All attempts so far have not lived up to their hype.

Do you have an estimate of energy used / total value secured ? If I am understanding correctly, an upper bound on "total value secured" would just be the total transaction volume moved in a block?

Each block secures the entire chain. The lower bound of the total value secured is market cap of the coin. In the case of Bitcoin, the upper bound is the value of the entire "crypto" ecosystem, including all tokens, companies, jobs, infrastructure, etc.

I don’t think you’re going to be able to secure the blockchain without those governments and militaries. Maybe you replace the massive banking industry with a new massive crypto financial industry?

“The creatures outside looked from pig to man, and from man to pig, and from pig to man again; but already it was impossible to say which was which.”

>> I find it frustrating that crypto-currencies are judged by their energy usage, meanwhile traditional fiat currencies are secured by massive banking industries, governments, and militaries. The total energy required to maintain a secure and stable fiat currency is likely orders of magnitude greater than that of Bitcoin today.

1. By that logic bitcoin is also supported by the military, education system, banking industries etc. It relies on a secure society that has power and internet and computers and wealth for citizens to have and use these things as a prerequisite.

2. The military etc you mention actually is the basis of alot more in society than just fiat currency. So your formula "Energy used / total value secured". If you want to include those things in "energy used" then under "total value secured" you need to include basically all value ever created by humans in western countries which is in the hundreds of trillions (if not more). Not just fiat currency. And actually if we went back to the gold standard all those institutions would still need to exist to secure society. (banks, governments, and militaries existed long before we abandoned the gold standard.)

Overall its a silly concept/argument.

>>> meanwhile traditional fiat currencies are secured by massive banking industries, governments, and militaries.

Crypto-currencies are also secured by those things in their present state. So long as crypto remains a small portion of the overall economy, it depends on the mainstream economy for its existence. For instance, it can't exist without an economic infrastructure that can develop and produce computer chips, telecommunications, the electric grid, and so forth.

The energy cost of Crypto is on top of the cost and externalities of the present day economic infrastructure.

But computer chips, telecommunications, the electric grid, etc., don't require for governments to exist for them to exist and work. I would even argue that they would work better and more efficiently under a free market economy, so governments, in general, are holding back progress.

> I would even argue that they would work better and more efficiently under a free market economy

That sort of argument would need some extraordinary evidence, given the sort of chaotic, crime-ridden, violent state places without governments tend to devolve into.

I didn't say "no government" or "no laws", I asked for free market. For a free market to work one of the important aspects is open competition with low barriers of entry. I believe most governments today do the opposite: their laws add barriers to competition, leading to inefficiencies that are in detriment of the general public. Examples are all around us, from cities forbidding Uber as a competition to taxi companies to states restricting use of cryptocurrencies as a method of payment. If you compound everything the damage that most governments do to the economy, and therefore to the wellness of humankind, is immense.

> I believe most governments today do the opposite

You're entitled to your beliefs, OTOH I believe that the free market cannot work unfettered. Monopolistic behaviour of large corporations shows us this again and again and again, as do environmental and Labour abuses and a million and one things people will do to screw each other over for a fast buck.

I think your view is extremely naive.

I think you confuse free market with "no rules, everything is allowed", which is not what I am proposing. Those monopolies you mention in the abstract are largely possible because laws make it much more difficult than it could be for competitors to arise. In a free market most monopolies are unstable and don't last long. Milton Friedman's Capitalism and Freedom and Thomas Sowell's Basic Economics both have chapters dedicated to monopolies and how states are the main reason they can be sustained.

Negative externalities, like environmental damage, should ideally be internalized, although I grant that this is not always easy. Private ownership of all land might help, as public ownership dilutes responsibility.

> I think your view is extremely naive.

Isn't it interesting that I think the same about your view? :)

> Those monopolies you mention in the abstract are largely possible because laws make it much more difficult than it could be for competitors to arise.

This is just more libertarian apologetics. There have been more than enough examples (cough intel *cough) of monopolistic practices caused by unfair market practices. Using dominance to force suppliers to exclusive use of your products is not a practice enabled by the state.

> Private ownership of all land might help

Rivers too? And then what? I can sue you for polluting my downstream, but it's OK if a company just buys up the whole river, then they can ruin it to their heart's content?

This is just nonsense.

> There have been more than enough examples (cough intel *cough) of monopolistic practices caused by unfair market practices. Using dominance to force suppliers to exclusive use of your products is not a practice enabled by the state.

Microchip fabrication is a very lucrative business, so why aren't there more competitors to Intel? I can think of at least two reasons:

1. It's a very capital-intensive industry. Here all government disincentives to saving, investment and business operation apply, mostly in the way of taxes, but also things like the SEC "accredited investor" qualification, restrictions to investment from foreign sources, barriers to crowdsourcing, licenses and bureaucracy, and a long etcetera.

2. Patents and copyright. Because of these government-granted monopolies competitors cannot copy products, so they represent another barrier to entry. Granted the idea behind patents is to incentivize private-funded research, but the drawback is reduced competition for the time the patents lasts. I believe patents are too long-lived in a world that moves at an ever-increasing pace.

If there were more real competitors there would be more suppliers willing to not sign with Intel. There would also be more competitors in the supplying space, of course.

>> Private ownership of all land might help

> Rivers too? And then what? I can sue you for polluting my downstream, but it's OK if a company just buys up the whole river, then they can ruin it to their heart's content?

People rarely ruin their own property, on the contrary they make an effort to preserve it and keep their value high. Public-owned property, on the other hand, has no such incentive. This is why people don't treat a hotel room or AirBnB with the same care as their own house. Like it or not humans are moved by incentives, not by ideals, so we should take that into account when designing our policies. In other words: policies should be judged by their results, not by their intentions.

In the case of the river it might make sense to have some kind of joint ownership by people and/or companies involved with it. Please notice that private ownership doesn't mean individual. Even assuming that a single company or individual owns the river and that they have more to gain by polluting the river than keeping it clean, they couldn't just dump whatever they want in there, as it gets to the sea. An effort should be made to factor in all negative externalities.

> This is just nonsense.

I don't think so, and neither do many renowned economists. I think you lack imagination or are misconstruing the libertarian proposals. The idea is not "get rid of every and all regulations", but being aware that regulations, taxes and centralization of the economy have rippling effects that, when combined, greatly reduce the wealth generation for all of us.

> so why aren't there more competitors to Intel? I can think of at least two reasons:

So, just completely ignore the anti-competitive contracts it forced on suppliers, and other market-dominating tactics it was convicted of, in favour of some handwaving about patents.

Good, honest argumentation there.

> People rarely ruin their own property

Again, utterly naive given what we know happens in the real world. Companies can and will act like utter sociopaths in pursuit of short term gain.

> I think you lack imagination

And I think you lack any attachment to what people and companies actually do, here in the real world, rather than what you imagine economic incentives might make people do.

You aren't even wrong here, you are incoherent. You say "government is the problem" then say "externalities must be factored in" (yet give no hint as to how)

You say "libertarian" but then you reject intellectual property.

Does free market mean getting rid of corporations? It has always occurred to me that the institution of corporations, notably liability limitation, as at once an intrusion into an ideal free market but also the only way to enable the funding of great ventures such as semiconductors.

>I find it frustrating that crypto-currencies are judged by their energy usage

Carbon footprint is a totally valid measure for anything we create or maintain, including crypto and fiat currencies.

“The total energy required to maintain a secure and stable fiat currency is likely orders of magnitude greater than that of Bitcoin today.”

No way. You hear this argument all the time — that fiat currency also uses tons of energy - but I just don’t think it’s true (relative to the amount of transaction throughout, and also in absolute terms). Bitcoin mining uses something like 0.5-0.6% of global electricity consumption for a tiny, tiny fraction of (purely speculative, not economically meaningful) transactions. What % do you think fiat uses?

That is one of the important points point made by jtoomin in the first post of this thread: the energy consumption of a PoW blockchain if not proportional to the number of transactions. This means we could have everyone, everywhere, using a PoW blockchain with the same percentage of energy consumption as today (although it would probably rise as price would arguably also rise as demand increases, but it would eventually find an equilibrium, it will never "consume all electricity").

Didn't bitcoin have the chance to double their transactions-per-second for a constant amount of power consumption, in the form of Segwit2x, and decide not to do so?

The fact Bitcoin could be more efficient and chooses not to isn't really an improvement over being unable to be more efficient IMHO - in fact arguably it's worse.

I completely agree, increasing the maximum block size is the simplest way to scale. Bitcoin BTC refused to do that, keeping the 1 MiB maximum block size instituted by Satoshi Nakamoto in 2010 as a spam-prevention measure, which led to raising transaction fees as users compete for the scarce block space. That is also the reason why Bitcoin Cash BCH was born in August 2017: to raise the maximum block size and allow the Bitcoin blockchain to process more transactions per second while keeping fees low.

At the technical level BCH has showed that the network is stable in production with 20 MiB blocks, but the goal and ongoing work is to support gigabyte and eventually terabyte blocks so it would scale to worldwide usage while keeping transaction fees low. The counterargument by Bitcoin BTC is that large blocks centralize the network, as not everyone can afford to run a full node. That's a different debate that I would be happy to discuss, but I want to start by pointing out that keeping the block size low also centralizes the network, as many users will not be able to afford the increasing transaction fees (which rose to $50 at recent times). Does it make sense to restrict the network so anyone can run a $50 node but not be able to transact on it? I think decentralization is a means to an end (electronic P2P cash), not a goal in itself. In other words, blockchains should be decentralized enough that no single entity can take control of the network, but too much decentralization is inefficient, so an equilibrium must be found.

> In other words, blockchains should be decentralized enough that no single entity can take control of the network, but too much decentralization is inefficient, so an equilibrium must be found.

I believe that is the hardest problem that bitcoin didn‘t solve. The hashrate is governed by the price and a arbitrary halving schedule. There is no mechanism to regulate the hashrate to a certain setpoint where attacking the network is not feasible. This issue becomes even more severe when the block reward is dominated by fees in the future. In that scenario the hashrate is not so much determined by the price anymore but the available block space and the utility of on-chain transactions. It is really hard to judge bitcoins security model considering all these variables. But for now the solution seems to be to vastly overcommit hashrate

Bitcoin strength and value is on decentralization. If you increase the block size, it will be seized by governments or large corporations. This has long being debated, and the reason it is like it is today, is that everyone really vested into it agreed (in a distributed way) to keep it as so.

More on that here: https://twitter.com/DocumentingBTC/status/139399717145689293...

And you can even buy books explaining this way better than I (or twitter) can.

Just says “tweet unavailable” for me, and I don’t understand how a 2mb block means a government can “seize” Bitcoin where they can’t with a 1mb block

today with a raspberry pi and a 1TB hard drive you can have a node and be one of the validators. If hardware is unattainable by the users interested in helping with decentralization (and there are few enough of those) large corporations or governments will be the only validators and defeat the purpose of decentralization

> If you increase the block size, it will be seized by governments or large corporations.

That doesn't make any sense. Any actor, like for example a government, might seize (control) a blockchain by having overwhelming mining majority (51% attack), but that has little to do with the size of the blockchain itself.

The only reason one might have to think that way is believing the false narrative that a BTC "full node" does anything to secure the network. Only mining nodes secure the network, having a copy of the full blockchain is not enough.

Edit: typo.

It's not becoming more efficient if you are just allowing blocks to be filled with frivolous data that wouldn't have otherwise ever been put on the blockchain.

It's easy to increase the block size, but it's very unlikely it would ever be decreased again, so it makes sense to wait until there is no other option.

This is only the case of you would arbitrarily increase the number of potential transactions per block.

But as far as I know the maximal number of transactions is capped in practice.

Furthermore the security of PoW is based on it being far more expensive to mess with it then to mine it. But if you push more mommy through the same number of blocks it's at some point breaking apart.

Lastly no one says it will ever consume all energy. That works be absurd. It's about the required energy (and hardware cost) in relationship to the provided value being unhinged and for security you need steadily increasing energy costs for increased usage.

> But as far as I know the maximal number of transactions is capped in practice.

What do you mean? There are no hard technical impediments to Bitcoin being able to scale to worldwide usage with basically the same structure as today. It's a matter of optimizing software and having powerful hardware (that is available today, and will be even cheaper in the future). This article by Johannes Vermorel [1] goes over it in detail.

If you have any evidence that goes counter to this I would love to read more about it.

[1] http://blog.vermorel.com/journal/2017/12/17/terabyte-blocks-...

> traditional fiat currencies are secured by massive banking industries, governments, and militaries

This argument makes no sense. Bitcoin doesn't obviate the need for militaries, banks, or governments, those things would exist regardless of the type of currency being used. Furthermore, these institutions have functions that go far beyond "securing fiat currency", not to mention the fact that bitcoin's existence relies on the massive infrastructure that facilitates the power grid and internet (which are secured by governments and militaries). Beyond that, bitcoin's value is inextricably linked to the utility of government issued currencies since bitcoin is not a suitable unit of exchange in a real economy due to its miniscule transaction capacity. In a world where fiat currencies collapsed the value of bitcoin would also plummet due to the fact that bitcoin's poor throughput could not sustain the the market for staple goods such as food, water, and medicine.

I would like to offer a different perspective.

The end of gold backed currencies in the 70s and replacement by fiat currencies hinged on the middle east oil states agreeing to sell oil in USD, in return for global policing by the US[1]. There is thus an intimate relationship between the current system and fossil fuels and the military, which goes beyond just ‘existing infrastructure’ arguments. This doesn’t mean we should countenance burning coal to mine bitcoin, but we shouldn’t forget history either, and as such the argument of the OP has some merit.

Second point is about transaction volume. Compared to total global money, the transaction volume of fiat is also very small. The recent money printing should make this obvious. The amount of fiat in fixed income markets and derivatives is staggering compared to what you mean by ‘transactions’[2]. Bitcoin has payment solutions in the works, it is likely that transaction volume and unit of exchange utility will increase over time. Additionally, if we take an actual example of a collapsing fiat as occurred in the hyperinflationary period in Brazil in 1994, the Government fixed the problem by inventing a new currency [3]. It is quite possible that in the current era, countries with collapsing fiats would use cryptocurrencies for this purpose, as there are some obvious advantages.

[1] https://www.lynalden.com/fraying-petrodollar-system/ [2] https://www.marketwatch.com/story/this-is-how-much-money-exi... [3] https://en.m.wikipedia.org/wiki/Hyperinflation_in_Brazil

That’s a common misconception. Selling oil in any currency has minimal impact on the US or USD, a buyer needs USD just long enough for a transaction and the seller gets rid of USD ASAP. The value is if 3rd parties need to hold some value worth of USD and the USD has inflation, then those 3rd parties need to constantly buy more USD to make up for inflation. In effect the US gets to print money and get stuff for free.

As to long term hyper inflation, you can only get long term hyper inflation if the country prints more currency. Suppose 1 trillion USD was worth 1 apple, and the US economy was even 1% as large as today, and their was the same number of USD in circulation, and the IRS only accepted taxes paid in USD. Now suddenly a lot of people really really want USD to pay taxes as their hypothetical tax bills are larger than the amount of USD possible to acquire. Except people constantly need to pay taxes so that can’t happen. What can happen is significant shifts in USD’s vale, aka it can go up or down within a range or the US can print a lot more currency.

> There is thus an intimate relationship between the current system and fossil fuels and the military

Even granting this premise, the argument still makes no sense. Governments, banks, and militaries existed for centuries prior to the existence of even the U.S. itself, so the suggestion that these institutions are somehow a product of U.S. monetary policy in the 70s is absurd on its face. I also think it's important not to "forget history" and the history of these institutions far exceeds what that argument grants.

> Compared to total global money, the transaction volume of fiat is also very small.

This is also beside the point. Bitcoin's value is highly dependent on the utility of government issued currency so that people can obtain staple goods and services that have inherent value, bitcoin is simply not able to fill this role.

> Bitcoin has payment solutions in the works, it is likely that transaction volume and unit of exchange utility will increase over time

There is always a myriad number of solutions in the works, but they don't actually mean anything until they solve the problem.

I agree about the suggestion to look at transaction capacity, however:

- Bitcoin is operating at capacity and has shown unwillingness to adjust capacity, so the "kWh/tx" is valid for Bitcoin.

- Transaction fees increase the block reward, and as a consequence, the energy that can be used for mining before it becomes unprofitable. This is currently only about 10% of the total reward miners get for mining a block on the Bitcoin (BTC) blockchain, but it is something to consider. The corresponding part of the energy usage would, at a fixed fee, be proportional to transactions.

> Bitcoin is operating at capacity and has shown unwillingness to adjust capacity, so the "kWh/tx" is valid for Bitcoin.

Bitcoin's layer 1 is operating at capacity - different networks make different tradeoffs. Bitcoin has gone the "less change" and "more decentralization" route by keeping layer 1 small, with the goal of moving transaction volume to layer 2.

I don't buy it.

Bitcoin introduced a number of changes like SegWit that are way more complex than adjusting a constant on layer 1, plus a huge amount of complexity on layer 2 that makes using layer 2 just as complicated as (or more complicated than) using a different cryptocurrency.

Whether it leads to "more decentralization" when everyone can run their own (L1) node but a single L1 transaction costs as much as the node hardware is quite debatable IMO. By making L1 transactions unaffordable, it encourages _centralized_ solutions where IOUs are shuffled around entirely off-chain.

By making L1 transactions cheap, it's basically like giving away cheap, permanent, verifiable storage to anyone which is constantly replicated across the globe.

Even if second layer solutions become highly centralized, the risk is significantly mitigated if you just don't keep your savings on them. If popular second layer solutions become untrustworthy then it would be easy to switch to different ones.

And to be complete, there are other ways that PoW blockchains can compete on energy efficiency:

1) Inflation rate

2) PoW function

3) Transaction cost after blocksize limit reached

The inflation rate determines the incentive given to miners. With less incentive, the energy use will go down. This comes at the cost of increasing the ease of a double-spend, but there is already far more than enough difficulty to double-spend at the current mining rates.

The PoW function determines the capital cost required to buy the miners themselves. If you increase the capital costs (e.g. with a memory-hard PoW function, or requiring less-efficient GPUs instead of more-efficient ASICs) then miners will be able to spend less of their costs on energy. This is one way in which Eth does well by the above metric, and is a valid way to reduce energy usage in PoW.

Of course, transitioning to proof-of-stake (as eth is doing) will eliminate the energy problem entirely.

Finally, some blockchains (e.g. BTC, ETH) have reached their capacity of transactions per second, and then users can add a fee to each transaction to incentivize mining pools to include them in a block. These fees do add incentive for miners to dump energy into their blocks. However, they are a much smaller portion of the incentive than you would expect.

On your website that you linked says "We conduct our business in a way that protects ... our planet's climate against warming." Can you elaborate how providing infra to mine Bitcoin is helping the planet against global warming? Aren't you doing the exact opposite? If you are using 100% green energy, that energy can be used for something productive not providing PoW. Note Bitcoin alone currently consumes 0.55% of world's TOTAL electricity production and this is going to get even worse with more adoption.

Reference: https://hbr.org/2021/05/how-much-energy-does-bitcoin-actuall...

> that energy can be used for something productive

A decentralized/borderless/censorship-resistant/virtual currency is one of the most productive things we can use energy for. It might not be as apparent in the US or the developed world, but Bitcoin is a life-saver for many people in countries with crumbling currencies. We waste a lot of energy on things that are far more more useless (like christmas lights for example[1]).

We should just put carbon tax on everything with environmental side effects and let the market decides what's a productive use case vs one that isn't.

1: https://bitcoinist.com/bitcoin-mining-energy-consumption-us-...

You could regulate inefficient christmas lights, but consumers will likely choose more efficient options anyway when they become available to them.

How do you enforce carbon taxes on miners under a defunct government in a remote location of the world?

I don't believe mining Bitcoin quite falls into the category of "most productive things we can use energy for". Drug discovery, carbon capture, agriculture, construction, etc. etc. come to mind as slightly more useful. Financial transactions in traditional banking systems which Bitcoin mining is more comparable with consume far far far less energy. Also Bitcoin is designed to adjust PoW difficulty based on network's average mining performance. In other words, the more compute power you provide the less efficient it becomes.

>If you are using 100% green energy, that energy can be used for something productive not providing PoW

You can say the same thing about ANY activity that isn't an arbitrarily defined form of altruism. Sports? Concerts? Video games? All vast wastes of time, money, and energy that could be spent fighting poverty or feeding the poor. This betrays the intention of criticizing bitcoin's energy usage because it moves the goal post of "...but but it's not using renewable energy" to "...but but that renewable energy is not being used for what I want it to be used for".

But almost any other activity only benefits from getting more efficient. Compare today's efficient LED lighting technology with what was available a few decades ago. With proof-of-work on the other hand, efficiency is actively counteracted. If a proof-of-work cryptocurrency holds its price, its energy usage can only go up.

You are also assuming that only renewable energy will be used for mining in the first place. I don't think that is a given: As long as it stays profitable no matter how, miners will exploit any resource that is available to them, literally burning resources for money in their wallet. Cryptocurrencies are decentralized by design, so while the US for example can stop the use or import of inefficient stadium lighting technologies, there is no way to apply a carbon tax or stop the "import" of cryptocurrency mined through "dirty" means.

I'll admit that based on my limited knowledge of PoW I was unaware of this disincentive against efficiency. I'll have to study more about how PoW works.

That's perfectly understandable, I think relatively few people looked at proof-of-work in detail. I can give you a quick overview of how proof-of-work works (I understand it well enough to actually be able to do it by hand on paper), but nevertheless doing your own research always helps:

To "mine" a block, a miner attaches a random number to the content of the block (the content mostly being the actual transactions), performs a difficult calculation on the entirety (i.e. block and random number), and checks whether the result of that calculation matches a prescribed goal. The goal is to have at least a certain amount of leading zeroes in the resulting number, and it is (to everyone's best knowledge) impossible to know how many leading zeroes there will be without performing the calculation. That is the literal goal, not an analogy.

In the massively overwhelming majority of tries, this goal is not reached. The calculation was useless, and the miner tries again with a different random number attached to the block. There is no other value to the calculation than to reach the arbitrary goal. If the goal is reached, the miner has won the lottery: All participating nodes in the network accept the result (the calculation is easy to verify) and the miner may claim the rewards for themselves.

The amount of leading zeroes to achieve is directly tied to the mutually agreed upon "difficulty". If mining becomes easier and the lottery is won too quickly (say because new faster ASICs flood the market, or more miners participate), the network adjusts the difficulty up, meaning more leading zeroes, so that the overall chances of winning the lottery within a given time frame stays stable.

Total energy costs from PoW mining won’t rise to exceed PoW mining revenues unless miners are willing to mine at a loss. In an efficient market, one where PoW mining profits have been driven down to zero, total energy use should remain constant if market price is held constant. PoW mining energy efficiency may increase, though.

The rest of your post could be read as a criticism against incomplete application of hypothetical carbon taxation regimes. It seems weird to single out PoW cryptocurrency as the one and only benefactor to a patchwork carbon taxation regime globally.

How can efficiency increase in a way that decreases energy use?

Let's say a new ASIC comes out that mines twice as efficiently, i.e. 2x less energy per calculation. Because miners can now afford to run twice the amount of ASICs on the same energy budget, this means that eventually miners are mining twice as fast.

The network however needs to keep the block rate constant (6 blocks per hour in Bitcoin), so it counteracts by adjusting the difficulty. In this case, mining a block becomes twice as difficult. In summary, everyone has now twice the amount of ASICs consuming the same amount of energy, still mining at 6 blocks per hour.

The misconception is that the "work" in "proof-of-work" is meaningful by itself. It is actually not, it is a lottery whose probability to win is adjusted exactly so that statistically, all miners in the world together will mine 6 blocks per hour on average.

As for "mining at a loss": I am not convinced there is a general principle that only allows for absolutely clean energy to make mining profitable, across the whole world and in any situation. We have already seen a coal plant being ramped up for the purpose of mining in New York, and hash rate going down when coal plants in China got flooded.

You said, quote:

> If a proof-of-work cryptocurrency holds its price, its energy usage can only go up

But in fact, if BTC holds its price, Bitcoin miners won’t increase their energy usage — unless they’re willing to mine at a loss.

It can spike up when new miners join the game, possibly in remote locations of the world with defunct governments that decide that mining Bitcoin for a select few is a more "important" use of their non-clean energy source. The network will react, miners in other parts of the world where regulations do not allow the same may scale their operation down, but there was a spike, and much more importantly you now incentivized burning resources by whatever means available where regulations do not stand in the way.

That’s not what you said, though. You said, quote:

> If a proof-of-work cryptocurrency holds its price, its energy usage can only go up

“Energy usage can only go up”

Only go up? When price is flat? I’m really sorry, but it seems you’re just grasping at straws, here.

FWIW - The plant you're referring to in NY is not a coal plant, it's a natural gas plant.

> If a proof-of-work cryptocurrency holds its price, its energy usage can only go up.

The cost of proof-of-work is paid by the network participants. When you transact on Bitcoin or Ethereum, you pay massive fees to proof of work miners that significantly limits the number of things you can do productively. Dozens of interesting use cases on Ethereum are made completely non-viable by fees that sometimes break $100 per transaction.

Proof of work cryptocurrencies however exist in a competitive environment with other cryptocurrencies. If a new cryptocurrency launches that can provide the same utility and security guarantees at a lower cost (either through less work, or through some other means) you will have a natural migration of users from the more expensive cryptocurrency to the cheaper cryptocurrency.

At equilibrium (which we may not be at, given all the hype currently), a proof of work cryptocurrency is only sustainable if its cost structure is competitive. There is an active incentive applied to the entire space to invent more efficient means to transact in a decentralized way, so that participants don't have to pay such high transaction fees and inflation costs to update a decentralized ledger.

> Cryptocurrencies are decentralized by design, so while the US for example can stop the use or import of inefficient stadium lighting technologies, there is no way to apply a carbon tax or stop the "import" of cryptocurrency mined through "dirty" means.

This approximately applies to all manufacturing though. What percentage of US goods are manufactured in regions that have limited regulation regarding the environment? Most of them, because if you don't use those regions, you are going to have trouble competing in the marketplace. It IS a problem for Bitcoin, but it's also a problem for all global production in general.

> If a new cryptocurrency launches that can provide the same utility and security guarantees at a lower cost (either through less work, or through some other means) you will have a natural migration of users from the more expensive cryptocurrency to the cheaper cryptocurrency.

This seems to be purely theoretical.

In the real world, most people stick with the recognised names regardless.

>efficient LED lighting

This isn't as clear cut as it sounds. The Jevons paradox: as enegry efficiency goes up, enegry demand goes up by more. Or, put another way: humans wasted less electricity 20 years ago with incandescent bulbs than we do now with LEDs. One could also say that LED efficiency is counteracted by tech improvements. But in reality, we may be using more energy, but we're also doing more, and doing things we couldn't have done 20 years ago.

I'm skeptical of assigning a value judgment to things that a lot of people find valuable. LEDs are used for bigger, brighter advertisements. If I don't personally like ads, does that mean energy efficient LEDs are a waste? Bitcoin mining is used to secure a ledger from attackers with the resources of a nation state. If I don't personally care about a secure ledger, does that mean mining is a waste?

And about profitability, this is important, and new within just the past few years: renewable energy is the cheapest energy. [1] Anyone mining with coal is behind the times and will be competed out of the market in due time. The more incentive people have to seek out the cheapest energy, the higher the demand for renewables will be, and the faster the world will get on board. I for one welcome this catalyst.

[1]: https://ourworldindata.org/cheap-renewables-growth

> A better metric would be "energy use per double-spend that was prevented."

Not for a general audience. The purpose of a currency is to enable transactions. Internally, I get why people involved might fuss about the metric. But from the societal perspective it's reasonable to ask, "What does it cost per unit of value created?"

Further the purpose of mining is to enable mutations to the chain as quantized into transactions. If you stop permitting mutations energy use drops to zero, ergo energy use per transaction is totally reasonable.

That's not how logic works.

That would be like saying "you need light to your math homework so we will measure how many math problems you can do per lumen of light".

The throughput of transactions is not coupled to the amount of electricity used to mine. They are two elements in the system, that doesn't mean they move proportionally in any way.

A better analogy would be trying to use a 7-seater dump truck as a school bus, then complaining when the 'haters' analysis is based on "gallons of gasoline per available seat-day." As if the fact the gallons of gasoline per seat-day changes based on external factors (i.e. with the weather or traffic) makes any difference? It legitimately does not matter that (i) not all 7 seats may be populated each day or that (ii) the gas required varies day to day based on externalities. That's why we invented averages and spot measurements.

So fine, "kWh per available transaction-second" may be a more apt moniker however that's strictly what I've been talking about. Since 100% of electricity usage is attributable to mutations, this is a completely fair quantization. As blocks have been overwhelmingly full for years, the point on discrepancy is pretty much moot.

And further, the point is a dump truck is totally unsuitable for use as a school bus.

You are more than welcome to measure Wh of electricity used per math question in regards to the lighting setup. You'll find that number small and irrelevant, however. On the other hand if it requires a few thousand kWh worth of light to do a math question, you're well within your rights to ask (a) why you're doing math questions in what must be a stadium setting and (b) whether there's a more efficient lighting solution.

Which are exactly the questions we're asking here.

So, respectfully, that's exactly how logic works.

No one is complaining and no one said "haters", these are things you hallucinated. I'm not defending bitcoin, I'm just pointing out that you have huge misunderstanding about how it and cryptocurrency works in general even though these things have been explained to you over and over.

Bitcoin's electricity use it because of its sustained price. If the miners could not consistently sell for high prices the overall electricity use would go down. Price/electricity usage going up or down does not affect throughput over the long term.

Bitcoin's throughput is from being artificially crippled to sell a second layer. If the maximum block size was raised, it would have more throughput. The max block size does not change the amount of electricity used from the block reward.

The same way that you would not measure your internet connection on mb per kw/hr since the energy used by 10mbs service is going to be the same as 1000gbs service. The two things are barely correlated.

Energy per transaction is barely correlated. I know it is simple and easy to look at two numbers and pretend they depend on each other, but that isn't the dynamic here, which is why everything you are saying is nonsense.

> No one is complaining and no one said "haters", these are things you hallucinated.

> ... which is why everything you are saying is nonsense.

You're being rude again. Once again this is against the site terms. I'm happy to engage in any civil conversation with you that doesn't involve name-calling, as I'm sure you've seen a number of times. This thread, however is closed.

No one is being rude to you. If you don't want someone to mention that you made up something they didn't say, then don't do that. If you say the same things over and over that have been explained to you to be false, don't be surprised if that gets brought up. If you can confront what I'm saying with something true, feel free.

> No one is being rude to you.

You may wanna chat with your mother for a second opinion ;)

> No one is complaining and no one said "haters", these are things you hallucinated.

I didn't say you said 'haters' that's a stylized/flourished way of saying an opposing viewpoint. That's why it's in quotes. If anything it was self-deprecating/deferential with respect to my biases. Jumping in with "that's not how logic works" is certainly a valid thing to call out as whining or complaining because again it's not particularly civil. Off the basis of your misinterpretation you once again accuse your counter-party of 'hallucinating.'

As I said this thread is over and should in the future you decide to have a civil conversation I'll happily engage.

You said it makes sense to put something in terms of a ratio even though they are uncorrelated except for a binary neccesity. That's like saying movies need sound and movies make money so let's measure movies by volume to dollars. It is literally broken logic.

You seem happy to engage on how something is being said, but not so much on what is being said.

> You seem happy to engage on how something is being said, but not so much on what is being said.

Of course, because I'm here to have an interesting conversation about an idea on its own merits, not be accused of hallucinating when you misinterpret something I've said. If you stop attacking the speaker, assumed some good faith, and have a civil conversation I suspect you'd have a better time.

Normally I have much more tolerance for shenanigans but you've demonstrated a pattern in our interactions.

I think if you had something of substance to say backing up what you originally said, you would have said it already instead of constantly calling yourself a victim as a diversion.

Nope, the last time I engaged after you descended to name calling was totally unproductive.

There hasn't been any name calling, this is all a diversion to avoid backing up the initial claims you made.

> The throughput of transactions is not coupled to the amount of electricity used to mine. They are two elements in the system, that doesn't mean they move proportionally in any way.

We know that. This is not an argument against cost per transaction being an adequate measure of efficiency for a transaction processing system.

Cost per transaction to the users is important, but it is mostly separate from the cost of mining. The cost of mining is dictated by the price. Conflating the two doesn't make sense, because they aren't correlated and the costs are taken on by different groups of people.

Not only that, but not all cryptocurrencies are even trying to optimize for this. I would say that bitcoin is actually in the opposite direction and trying to be as expensive per transaction for both the miners and users as possible.

Okay as far as it goes, but it doesn't explain how to fix the problem. We need to drum up interest for a solution.

The way I like to explain it is that Bitcoin is collectively giving away about $1.5 billion a month in prize money to miners. That's the root of the problem. Miners will spend up to $1.5 billion a month on electricity (mainly) and their other expenses. Currently it's about 10x Google's electricity usage.

Total revenue is proportional to the block reward (an algorithmic parameter) and Bitcoin price. So to fix this, either they could reduce the block reward ahead of schedule (won't happen) or something could happen to crash Bitcoin's price. More transaction volume would actually be better if it were due to a fire sale.

Taxing holdings of Bitcoin would be a way to convince people and businesses to sell and discourage buying, at least for those that pay their taxes.

Or who knows, maybe threatening to do this would result in enough consensus to accelerate the block reward halving schedule?

> We need to drum up interest for a solution.

There is already massive interest in finding more efficient ways to solve the problem. It's a difficult problem to solve (as Elon Musk will likely learn in the coming year).

The cost of proof of work is paid in two forms. The first is in the form of inflation. Merely holding onto Bitcoin means eating dilution as new Bitcoins are printed to fund the mining ecosystem. And the second cost is in terms of transaction fees. At times, it can cost $20+ to send a transaction over the Bitcoin network, and a more efficient / higher throughput system could significantly reduce these fees.

The users of Bitcoin are already themselves naturally incentivized to look for better solutions, even completely absent any care about the environment.

>The users of Bitcoin are already themselves naturally incentivized to look for better solutions

This would imply the users of Bitcoin use it for anything more than speculative investment.

Holders of Bitcoin want to see the price go up, which makes the problem worse. So the primary incentive is very bad and that's how we got here.

More enlightened self-interest would be to want to see the price go up without using more electricity, but this is secondary to the primary incentive.

To get action from enlightened self-interest, there needs to be leadership for making changes. (Ethereum seems to have this?)

> To get action from enlightened self-interest, there needs to be leadership for making changes. (Ethereum seems to have this?)

Knowledge preceedes enlightenment. For example, Git is also green-friendly, and shares a virtually identical consensus model to pure PoS consensus designs. It’s just that “green-friendliness” wasn’t a design goal of cryptocurrency — creating a lasting store of value sans institutions, exchangeable pseudonymously over the internet, was.

As it were, pure PoS consensus suffers from the misfeature of not even having a quantitative fork ranking protocol — i.e. it lacks a way to objectively compare the truthfulness of divergent blockchains [1]. In PoW networks, cumulative hashing power can be simply and easily mathematically compared to produce cold, quantitative consensus. In PoS networks, there is no hashing power, and human intervention is required — just like Git.

Which begs the question, why do PoS networks even need a blockchain? I think we all know the reason for that, though — Git doesn’t have a hype train. Git just isn’t good enough at separating the general public from their hard-earned money.

[1]: https://news.ycombinator.com/item?id=27144921

Saying "just use git" seems simplistic. But I could imagine a Debian-like organization that chooses a pool of trusted servers run by independent organizations in multiple countries, where they all have to agree, and with a full transparency log like DNS.

Bitcoin is trustless, it is designed to withstand quite serious attempts at committing fraud (haha, a pun).

Git was designed for cooperative work, and critically depends on trust (commit access).

Merkle trees are easy, scalable schemes of trustless consensus, less so :(

The saddest or the most idiotic part of this whole story is the "bitcoin to the moon" crowd. Bitcoin price almost directly increases the effort spent on mining - if you're going into bitcoin now hoping it will 2x this literally means you're hoping it will 2x the hardware and energy consumption.

In one sense the solution is PoS. But Bitcoin will never ever ever adopt PoS, so we need to somehow convince hodlers and traders to switch to another cryptocurrency in a way that doesn't look like discrimination (e.g. outright banning PoW). A global carbon tax is an obvious yet oh so difficult possibility. Some kind of memetic warfare might be more feasible.

Discriminating against PoW algorithms seems fine? It's like discriminating against fossil fuels.

Which is fine.

Great point! For what it's worth, they could easily spend more than that $1.5 billion. Or at least cause to be spent. There's well known theft of electricity and computation for mining. Give the opaqueness of the industry, it's totally plausible that there are under-the-table deals or power diversions at large scale. Some people will be in the grip of sunk-cost fallacy or irrational optimism about Bitcoin's future gains. And then of course there are the negative externalities from things like pollution.

One way would be to simply start to do CO2 offsets of the total estimated energy spent per block mined. It’s a fun thing to calculate & dream about but enforcement would be hard.

The way the bitcoin network works, as far as I understand it, is by running a lottery every 10 minutes. The thing is there are many ways of running a lottery that don't involve burning tons of electricity in the process. In fact most lotteries don't burn any energy at all. Why the inventors of bitcoin decided to do it this way is beyond me.

> there are many ways of running a lottery that don't involve burning tons of electricity in the process

You need something to be the limiting factor on the amount that you can try to win such a lottery. With proof of work, it's electricity. (assuming everyone is about as efficient as each other) Early on, they talked about it being proportional to cpu-time. That has become more abstract since.

The limiting factor can be the price of the lottery ticket. (It seems the most obvious limiting factor, by the way.)

But what's the cost of the lottery ticket? Is it a certain amount work done? That's "proof of work". Is it an amount of the currency? That's "proof of stake", kinda.

I haven't heard of any cryptos that require you to risk your coins to mine. Sounds like a neat gimmick, but hard to implement.

The lottery isn't the point, it's a side effect. The network needs consensus on what transactions have happened and which haven't. The main difficulty in getting this when you can't trust the nodes that someone can just spin up an arbitrary number of nodes to overwhelm the consensus, if the consensus just goes by majority vote. If you want to prevent this you need to tie the consensus to something which is scarce, which is what proof of work does. As a side effect of how this is implemented, it becomes a lottery.

If you implement proof of stake, for example (where the scarce resource becomes the currency of the network itself, which is a lot trickier to implement and especially quite hard to bootstrap from nothing because in the early days of a currency there's going to be only a few people owning it), then there's no need for the reward process to be a lottery (though it still can be).

It's still a lottery, except the way you buy tickets is by wasting electricity. The more electricity wasted the more lottery tickets you have. It doesn't need be like this, just buy the tickets with effing bitcoins and you achieve the same result without wasting electricity.

It’s not that easy. You can’t secure Bitcoin with a lottery run on Bitcoin, because then you could forge your own tickets and forge the drawing, too.

The proof of stake proposals don’t seem to work that way. They seem to be more a matter of stakeholders having machines that vote about who is trustworthy.

I don't think you would be able to forge your own ticket. For example, the lottery tickets could be "purchased" by sending some amount of BTC to a special/nonexistent address, and these transactions would be required to be present in the block being validated for the block to be considered valid. Admittedly I haven't thought about all the details but it would surprise me if there wasn't an obvious alternative to the proof-of-waste system currently in place.

Not all transactions are created equal. Some transactions are more valuable than others, and there is also value in just maintaining a steady state (holding wealth).

Something that also seems to get lost in the mix frequently is the fact that bitcoin owners themselves are the ones paying for the electricity. The security benefit comes at a cost - manifested as inflation (not just transaction fees) - and that cost is borne by all of the owners of Bitcoin. To that extent, the participants in Bitcoin are actually incentivized to use more efficient systems, because it means the inflation cost of being a participant is lower.

That they don't use cheaper systems indicates (though there are plenty of confounding factors) that they see value in paying the larger cost of holding Bitcoin.

With no transactions, the wealth stored is valueless, like deeds to property on the moon. People store wealth in currencies only because they think they can get it out later. That's in contrast to assets like houses or land, which have use value.

And Bitcoin users are only paying the fraction of the cost paid for energy. But that ignores negative externalities like the pollution that's the subject of the article.

Of course, you need _some_ amount of transactions. But that could theoretically be 500 a year and still adding just as much value as bitcoin today, so long as the transactions were sufficiently significant.

Probably not. An important component in value for many assets is liquidity. That's even more true for a currency.

> But from the societal perspective it's reasonable to ask, "What does it cost per unit of value created?"

Then you have to define value. I don't think it's transactions. Any random bank can make transactions. People can transact with cash.

Cryptocurrencies create value by providing other properties such as decentralization, trustlessness, privacy. For example, Monero enables private and untraceable transactions and for privacy enthusiasts it has essentially infinite value.

With this definition of value, we can see how bitcoin isn't providing much. By now it's centralized, has no privacy, has high fees... It sucks basically. The only reason it's still the number one currency seems to be inertia. It's the most frustrating thing about this market honestly. Not only is bitcoin still king but it drags down better coins when its value plummets.

> I don't think it's transactions.

Interesting.

> For example, Monero enables private and untraceable transactions [...]

So so...

> Cryptocurrencies create value by providing other properties such as decentralization, trustlessness, privacy.

Let's add "a largely unregulated gambling area where people with too much money can bet their excess money on being among those who pull out before the music eventually stops" to that list, shall we?

That's also where your frustration comes from: Bitcoin is perfectly fine for this kind of "value proposition", hence it stays King of the Hill.

> So so...

What I mean is people can transact via traditional systems just fine and they choose cryptocurrency because of other qualities.

> largely unregulated gambling area

The speculation is a separate thing from the coins themselves. People also speculate with fiat currencies, stocks, real estate.

> That's also where your frustration comes from: Bitcoin is perfectly fine for this kind of "value proposition", hence it stays King of the Hill.

Yes. What I don't understand is how it drags the whole market along with it no matter where it goes.

> The speculation is a separate thing from the coins themselves. People also speculate with fiat currencies, stocks, real estate.

No, speculation is the primary use case for all of these coins right now.

And crypto currency has some advantages over the other speculation options you mentioned:

- more people can participate because of them being unregulated (compare: forex trading, which has much higher barriers of entry)

- it is rather easy to not pay taxes on crypto gains in many countries, especially if you're staying below certain limits

And the most important of them all: the crypto cake is still expanding and has been expanding for over ten years now. That is the crucial difference between classic forex trading and crypto - in forex, the comparative value of different currencies usually stays within a certain range. It goes up and it goes down. In crypto, the crypto just has been getting more and more valuable over the long term. It goes up, and up, and down, and further up than before again, and then some more up.

As long as this continues, any gambler betting on crypto has an edge and will win more than he loses. Of course it can't continue like this forever, but that's easy to ignore when looking at a ten year history of unbelievable gains.

Economic value is measured by how much people are willing to pay for it. Transactions have economic value, because people are willing to pay a fee in return for having a transaction processed. And cryptocurrencies are transaction processing systems. So it absolutely makes perfect sense to measure how efficient these systems are processing transactions, and the way to measure that is by looking at how much it costs to process a transaction with each of these systems.

If you wanted to know how much people are willing to pay for decentralisation, trustlessness and privacy (most certainly not an infinite amount of money) you could also do that, but that's answering a different question.

> Transactions have economic value, because people are willing to pay a fee in return for having a transaction processed.

Why transact via cryptocurrencies instead of other systems? Because of these other desirable properties. They're the value cryptocurrencies add to the world and the reason why people choose to them despite the inefficiency. People transact in Ethereum because they want to run smart contracts. People transact in Monero because they want privacy.

> So it absolutely makes perfect sense to measure how efficient these systems are processing transactions, and the way to measure that is by looking at how much it costs to process a transaction with each of these systems.

I don't think so. People measure this in order to compare with traditional banking systems which are centralized, require trust in institutions and affords no privacy. This is not a fair comparison.

The fact that some people don't care about efficiency doesn't mean we shouldn't measure it. For example, a lot of people buy cars that are fuel-inefficient. Does that mean we should stop measuring car efficiency? No, that's a ridiculous argument. If you don't care about efficiency because you care more about other stuff, at least you should be aware of the trade-offs, and also have the intellectual honesty to admit that you don't care about efficiency, instead of pretending that efficiency is not important.

I didn't say you shouldn't measure it. I said people are buying other things for their money. Simply measuring transactions/energy ignores all that. Monero provides decentralized trustless private untraceable transactions, Ethereum provides decentralized trustless transactions that execute smart contracts. The energy consumption is merely the cost of all those features.

> The energy consumption is merely the cost of all those features.

This is a big assumption, and almost certainly untrue.

Why?

Because we don't know that any of these systems incurs the least possible cost in processing transactions with these particular features.

> Economic value is measured by how much people are willing to pay for it.

That's an ok general rule, but it breaks down in a lot of circumstances. Look at scams, for example. People pay quite a lot for them, but at a societal level, they have strong negative value.

> In steady state, miners will dump energy into mining a coin until the cost of energy = the value of the coins coming out.

Exactly, that's why if you're using this list to somehow decide coin X is more "efficient" than coin Y, then it's a foolhardy exercise.

For proof of work to actually work, the cost of the electricity has to be proportional to the total market cap of the coin. Otherwise, if the amount of work was low compared to the value of the network, it would be a strong incentive for someone to try to attack it.

"Efficient" could also be read as "I am willing to sacrifice x Wh to the gods of crypto wealth, where do I get the biggest return?"

That might even be a tolerable mindset if you happen to live in a cold place and the only tool available to keep you from freezing to death was electricity.

I’ve gone back and forth on this myself, but I think it is valid to consider the cost of the entire network as a matter of carbon accounting. After all, one of Bitcoin’s selling points is the difficulty of a double-spend. This wouldn’t be the case if Bitcoin mining was not subsidized from the pool of unmined coins.

Yes, rather than thinking about transactions we should ask whether the existence of Bitcoin as a whole is worth 6 GW of power.

Haven’t the people spending the GWs of power already done that?

Ultimately the money comes from people buying in to Bitcoin and many of them are not aware of the power consumption or the fact that it's possible to achieve number go up with virtually no energy.

The people buying Bitcoin don't need to be aware that it costs 6 GW of power, any more than they need to be aware of the electricity costs associated with the manufacture of plastic, electronics, or other goods and services.

If we as a society feel like there is too much energy being consumed, we should regulate the production, and let the market come to equilibrium on a fair price for the cost of electricity. If you don't like the fact that coal plants are spewing millions of tons of CO2 into the atmosphere, regulate the coal plants, not Bitcoin. Regulation of electricity will increase the cost of electricity, which will naturally reduce the total amount of electrify that Bitcoin uses - Bitcoin's energy use is proportional to the price of energy, not to the actual quantity of energy.

I'm assuming that our society doesn't/can't internalize externalities.

> The people buying Bitcoin don't need to be aware that it costs 6 GW of power, any more than they need to be aware of the electricity costs associated with the manufacture of plastic, electronics, or other goods and services.

But people do need to be aware of the environmental costs of such things, because society does not account for negative externalities.

> regulate the coal plants, not Bitcoin. Regulation of electricity will increase the cost of electricity

What if society actually thinks it's reasonable to discriminate on energy use? What if we want to provide cheap-ish energy for end-consumers, for essential services like the medical sector, but not for cryptocurrencies?

Seems like a fine choice for a society to make.

I think a more thorough societal discussion about what our goals are given tight carbon budgets is what they're getting at, not the individual decision of someone to mine it.

I agree in general, but it makes the analysis more complicated, I think, especially when considering marginal usage/activity from the perspective of an end user/consumer.

For example, one could naively believe that there's absolutely no marginal emission from deciding to get on a plane. The plane is emitting basically the same amount whether there's 99 people on board or 99 + 1 (you) on board, and the plane's going to make that particular flight whether or not you get on. However, you're funding the airline industry and increasing demand (and therefore supply) for flights along that route and perhaps also indirectly helping pay for other things the airline is doing, so that could probably be considered a marginal emission contribution.

If you ignore transaction fees for a moment, it seems like this logic doesn't quite work for cryptocurrency networks. It seems like a closer analogy would be something like a contrived scenario with an airline that has routes which are absolutely static and predetermined (e.g. a contrived scenario where an airline decides it's going to fly a passenger plane a certain route once per day every day at the exact same time for a year no matter what, even if no one's aboard, and also the tickets are free if assuming no transaction fees). There are still the indirect issues with supporting the network, but it seems like there's less of a marginal emission concern if you're someone who's just making transactions, or arguably even no marginal emission concern.

In reality, you are adding some marginal emissions due to transaction fees (direct incentive to mine), and the indirect incentives could maybe be broken down into something marginal as well (no one using the network = no incentive to mine since the currency would probably have no value), but basically it kind of feels like there's less of a direct marginal emission concern as an end user of the network compared to something like getting on a plane, especially if you take transaction fees out of the equation. In that sense, it feels like abstaining is somewhat more of a moral protest rather than a direct economic "vote" or boycott.

Am I wrong about any of this? I probably am; this is just a random thought. Maybe the transaction fees are the crux of it (even if the block rewards are much more lucrative), so eliminating them from the equation for the sake of argument makes the whole point moot?

Another technologically interesting very low energy coin is NANO but it has his own challenges because with the feeless transactions the spamming costs almost nothing.

But still at one point it confirmed more transactions than BTC + ETH + LTC combined without tx fees and sub-second confirmation time:

https://www.reddit.com/r/nanocurrency/comments/lxbhh5/nano_c...

The spam is becoming a too big problem, but they're trying to mitigate it in the new versions:

https://www.reddit.com/r/nanocurrency/comments/namwzf/v22_hi...

Thanks for highlighting why scaling is what matters and how BSV is obviously the only chain worth anything. And no, price is meaningless when it's 80% wash traded ponzi money

You just wrote an entire thread on why BSV is the ONLY system capable of anything... Lol? That's the point toom -- the more TXs in the block, the more efficient the system. That's why Merkel's, that's why small-world... That's why no CTOR or check points. Because SCALING. BSV is O(1), none of the other "projects" are or even come close to O(1) which is what this site is very elegantly showing

THIS, THIS THIS THIS. How does Toom, not understand this. Not only does it scale but then miners get more fee's from more transactions. It baffles me the keyboard gymnastics against BSV, while showing exactly why BSV is the best.

May I ask how much you have invested in BSV, and whether that investment might be coloring your portrayal of BSV's strengths?

oh totally going to tell some random dude on the internet how much I've invested in any asset lmao. Regardless i have more portfolio in ETH as im riding the trend, however long term, BSV is the ONLY option. actually scales, its cheaper for the end user and the miners capatalise on more transaction fees. its a win win win game.

Indeed, I'd say this Tx/power is the most misleading metric here. Bitcoin is slow (7tx/s) compared to what for example Algorand boasts they will achieve at the end of the year (25000tx/s).

Interesting angle -- but it's really not a defense of POW so much an argument for networks like Saito (https://saito.io) that replace mining with routing work and get cost-of-attack from the electricity spent running the servers / routing infrastructure.

Sooo you tell me effectilfy not to worry because bitcoin doesn't consume terrawats of energy as a whole system?

We don't need all those miners like you and mining and consuming terrawats of energy?

And at the end of the day, when i own bitcoins or take part in bitcoins in any form i have a green thumb and our planet is not additonally getting destroyed through the massive amount of energy consumed into finding the right hash?

Did you finnaly convince yourself that just because you consume water energy what you are doing is okay?

"We believe that Bitcoin and other CryptoCurrencies will play an important role in the future of finance, technology and governance. We conduct our business in a way that protects the blockchain against plurality attacks, and our planet's climate against warming."

Let me ask you a few questions to your statement:

Why do you support Bitcoin in particular and name bitcoin and don't use something like etherium which is potentially switching to PoS?

The energy you consume (apparently already 2 mega watts) how do you know that this energy couldn't have been used for something which creates direct and longlasting value?

Do you make any investments into renewable energy?

How do you feel about bitcoin using as a whole system (where you part of) a lot of energy?

How do you feel about bitcoin using a lot of dirty energy?

What is your take on how bitcoin can help global warming (and i actually mean cooling down the planet not activly heating it)?

Do you use your waste heat in any form or do you heat the environment with it?

Have you / your company invested in any form of research or change to bitcoin itself to reduce its 'energy consumption for preventing double-spend'?

Do you believe in the future of PoW or PoS? If you believe in PoS why do you support currently bitcoin?

Biden (after other countries have done this much earlier) is now back on climate change support and targets 0 emissions. How do you think the future with bitcoin and 0 emission will look like?

And at the end of the day: Based on your FAQ and the increase of power prices, will you able to consume that much energy for bitcoin in the long run?

Energy used per real world non-speculative use?

I imagine Bitcoin would fair terribly and Monero would be the best.

Or energy use per transaction based on full throughput capacity (full blocks).

That's a very dubious way of looking at it.

Blockchains all have a bottleneck. All transactions in the world have to go through the miner. And the situation is actually worse than that because we don't know who will solve the useless Proof of Work hashcash function ahead of time, so EVERY potential transaction is gossipped to EVERY potential miner, and then the miners ALL go to town wasting electricity. How great!

Anyway, because of this architecture (preventing double-spending by literally aggregating all ambiguities into N potential histories of EVERYTHING, and then having them duke it out with PoW or PoS or any other way), we literally have a cap on how many "TPS" (Transactions Per Second) can go through.

Before Bitcoin, no one ever asked how many transactions per second an Internet protocol could support. It would be ridiculous to ask that of HTTP, or FTP or SMTP because there is no central bottleneck: the number of websites, files and emails that can be sent increases with the number of computers on the network.

With Bitcoin, Ethereum and other blockchain-based networks, this is not the case. The max number of transactions that fit inside a block is the most throughput you're going to get. The best thing to come out of these blockchains is Microsoft's Sidetree protocol championed by @csuwildcat but that's for identities, not currencies. So basically, you have a payment system which is super-secure and also super-wasteful.

It's as if BitTorrent required every computer to seed every movie, and BitTorrent maximalists called everything else that used a Kademlia DHT a ShitTorrent.

Except here, it's actually worse because you're not doing Proof of SpaceTime (like FileCoin) but you're requiring a growing number of computers to participate in a lottery proving they burn electricity and get rewarded sometimes. And this amount of computers is growing, just so we can do one operation (transfer money) 10 times a second. At least Ethereum made it into virtual machine capable of executingmore than one operation, thus enabling Turing-complete programming languages like Solidity, and smart contracts. Still, the way it's designed as a "world computer" it's basically a glorified mainframe, and gas is basically paying for time on the mainframe. It is the reason "flash loans" are even possible, they are artifacts of the idea that literally ONE transaction in the entire world can happen at any given time. Nice for atomicity guarantees, I guess, but overall not so great for almost every real world application.

Blockchains with global consensus about every transaction in the world are NOT what I would think of when I think "decentralized" in the sense of having no central bottlenecks. Actually @vbuterin wrote a great article years ago about the different senses of the word "decentralized".

A single transaction on the blockchain most likely corresponds to thousands if not millions of transactions in another layer.

Unless you buy straight from a miner, the Bitcoin you buy changed hands many times before reaching you and those transfers didn't all occur on the blockchain (could have happened on an exchange, could have happened on lightning network, could happen on another blockchain like eth).

If you look at actual transactions on the blockchain, you'll see that they have an average value of ~300-400K [1] per transaction which means it's acting as final settlement.

1: https://bitinfocharts.com/comparison/bitcoin-transactionvalu...

Almost all IP traffic goes through an Internet backbone router which can process 100Gbps+. It's no problem. I suggest people think of Bitcoin miners like this in the future. These would be big operations, yes, but they are economically incentivized to honesty, and there will be plenty of competition. Once you use your imagination, or try to build a node yourself, you'll see the only real bottleneck in Bitcoin's architecture is the updating of the UTXO set, and this can be made extremely fast - eventually in hardware. All other transaction and block validation and propagation can be parallelized or removed as a bottleneck. Users share transactions p2p and settle them onchain, and apps and services create sub-networks of transactions they care about. It all works. But to do that people need to drop the assumption that home users need to run a node - it's a broken idea that holds Bitcoin back. The original design of Bitcoin was remarkable in its ability to scale, which was written about by Satoshi and ignored, and this is being demonstrated again in Bitcoin SV. On the other hand, almost every other cryptocurrency has deviated from that simple design. Ethereum for example requires a global state database and cannot parallelize this way.

"Trusted backbone transaction processors" that don't use megawatts of power to do this work have existed for some time as "banks".

No. In this design users don't trust miners. Users trust Bitcoin. This is important. Banks can censor. Banks can go down. Banks can be forced to confiscate your money by a single court. But if one miner were to act up, other miners around the globe could keep them in check, and apps and users could switch around as desired. It's an incentivized complete system that you can't reduce this way.

You right. It's written in the FAQ of the page that metric is not really that important. But most of the treads in HN talk about tx/kw anyway... However, if Bitcoin had more transactions, I think a lot less discussion would be right now.

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