Bitcoin consumes 2nd highest electricity per capita
twitter.com
twitter.com
The first google result for "how many people hold bitcoins" says that an estimated 46 million Americans own bitcoin. The huge inaccuracy shows the author's bias and kills the credibility of the rest of the thread.
Only ~60M households (50%) have an investment account. I'm skeptical that there's a huge portion of households with bitcoin but w/o a traditional investment account. I'm also skeptical that ~80% of people with investment accounts have Bitcoin. Almost everyone I work with and most of my friends and family have an investment account. I only know a couple of people who currently have any Bitcoin. I know a lot of people that at one point owned Bitcoin, though.
https://www.buybitcoinworldwide.com/how-many-bitcoin-users/
There might be 46M wallets related to US accounts with Bitcoin in them, but 1 person could own 45M of them (I seriously doubt it, but you get the point).
I think I see the problem.
Why does anyone treat tweets as though they're academic papers? It's just some rando BSing.
For one, this is why reading articles and doing your own research (DYOR) is so important. That headline, which is attributed to NYDIG, a crypto proprietor, isn’t actually sourced anywhere else. Gemini, the Winklevii crypto exchange, places the number substantially lower.
Given that Coinbase has had a maximum of 8.8 million monthly active users, which is going to put us within spitting distance of the true number, suggests the true figure is much much lower.
Additionally, speculating on bitcoin’s price on an exchange does not mean you’re utilizing the network (hell, you don’t even need actual bitcoin to do this, futures will do). But this is what the overwhelming majority of people do with bitcoin.
So the real question is how many people use the bitcoin network to transfer bitcoins. This is what POW enables. Do I believe that 10m are sending bitcoin to each other? No fucking way. Much much lower.
So yeah, 10m seems conservative even if the assumption is poorly worded (network users vs coin holders).
Then I look and see that it was a small sample sized survey of higher income individuals, and was commissioned by an "alternative investments firm" who wants to tout Bitcoin annuities and life insurance.
Since we're speaking of bias, after all...
In my understanding, there are many stakeholders when it's about bitcoin technology. Be it miners, traders, holders, exchanges... BTC is not solely a common legal entity (like: country, company) nor a widespread regular resource (as: oil, gas, water). It's more like the Internet; another protocol to exchange information(+value). Then, who is going to fairly assess the overall energy consumption of The Internet? Thus, the logic followed in that assertion is incredibly hard to understand (but unfortunately popular nowadays).
For example, in Jan 23 million bitcoin wallets had transactions. Since many actors hold multiple wallets, this would imply not so many active bitcoin users. [1]
Per capita could mean anyone who has ever touched it in any way, or could mean someone who actually uses it reasonably often.
[1] https://decrypt.co/56188/bitcoin-hit-record-number-of-22-3-m...
The Tweet is specifically about electricity (kWh). It appears Norway uses mostly electricity in applications where other countries might use more natural gas (heating). This is likely because Norway has plentiful clean hydroelectric electricity, so they export their natural gas instead of burning it.
This inflates their electricity consumption numbers but given the mostly hydroelectric source and reduced fossil fuel burning it’s actually a net win.
The exclusion of hydro from "green" is of tactical nature. It's mature technology and without spectacular learning curves.
Iceland is small but has some power-hungry industries (that's the point, to produce Aluminum with cheap power), influencing their total.
Well, showing a logarithmic graph is a deceptive way of comparing things.
I do not see many people in the crypto community approaching this with the deadly seriousness it deserves. Most conversations seem to devolve into:
- wishcasting about how energy is produced: “There are a whole bunch of miners in South America running on hydro!” This ignores that we are decades away at least from a solarpunk world where energy isn’t a zero-sum game, the hydro energy being used by miners just means the people in nearby cities have to resort to fossil fuels.
- wishcasting about Proof-of-Stake: “We could just switch to this and the carbon problems go away!” I admit it would be great if this happened, but No large coins use it, and I’ll believe Ethereum when I see it. Proof-of-Stake also has downsides that some crypto people won’t accept, so by their own admission it’s not credibly considered an option (certainly not for Bitcoin).
- wishcasting about carbon offsets: “We can buy our way out!” The recent California wildfires have burned through a lot of the trees planted as “carbon offsets”, releasing their carbon back into the atmosphere. Offsets were a neat idea, but they don’t seem to have panned out well, and I have yet to hear a credible case that carbon capture can ramp up fast enough to match crypto’s growing carbon footprint.
- whataboutism: “You ride planes don’t you? Those have huge carbon footprints!” I have yet to hear a compelling argument that a Planes+Bitcoin world would have a smaller carbon footprint than the current Planes+Mastercard world. And no one is talking about Bitcoin making planes go away.
I’d love to hear a clear and credulous case for how we get out of this problem, but I have yet to hear one from the crypto community. If the crypto community won’t take this seriously and propose real solutions, people from outside the crypto community will come up with solutions that will involve banning crypto.
IIRC Polkadot staking has a 28 day minimum unstaking cool-off period, yet one can stake/unstake instantaneously in Kraken, so I'm led to believe that off-chain transactions must already happen to at least some extent.
Am I missing something?
The mining-related costs are mostly unrelated to whether the bitcoins are traded on-chain or off-chain. The mining-related costs are more directly related to the price of bitcoin, or rather, how much a miner can earn with the block rewards and transaction fees. By trading bitcoin, even off-chain, you increase the demand for bitcoin, and therefore indirectly increase its price; the only difference is that by trading off-chain, the miners don't receive the transaction fees (which are currently less than 2% of the block rewards).
IOW, Bitcoin isn't a scheme to destroy the world by exhausting energy or destroying the planet, it's just a bunch of people who want distributed consensus and they're willing to pay for it and you can't fathom why. You don't complain about aluminum fiends or anybody else spending money and potentially exploiting carbon externalities, ask yourself why not.
If you care about the environment so much then impose pollution controls rather than singling out one particular use you don't understand.
Now if there were a time to come, when lightning network allowed wide adoption of bitcoin as an actual payment system ... and the speculation on ever rising price were obsolete, because the price was more or less stable ... then the limited mining rewards would put a stop to exponential growth in energy expenditure.
Where do I get it wrong? (Serious question)
Imagine any item with a certain amount of demand. Now cut the supply of that good in half. What happens to the price?
If the supply gets cut in half, then cut in half again, and again, what happens? If we accept that the mining reward is the "supply" then we can see that it should cause continual increases.
As for the already-emitted supply, you can essentially ignore it because of self-interest. Seeing the effect of diminishing supply and unlike miners, not needing immediate funds to buy new mining hardware to stay competitive, for currency hodlers, HODLing is the rational strategy. So holders aren't really part of the supply equation, hence the "store of value" narrative.
So you've got a dwindling supply flow, that causes higher prices, which, because of built in competition, guarantees that the blocks will go to whoever is willing to expend the most energy to get them, which is a ceiling only provided by the current price, which is ever driven higher by the increasing exponential scarcity of the halving block rewards.
Essentially, this scheme ends with the heat death of our planet, and unlike climate change, green energy might not be able to make a dent in time.
The halvening stops in 2140, if I remember right. Humans intuitively don't understand exponential growth well, but if the same path continues, the energy growth (halvening = price doubling)
1 = Today = ARGENTINA's energy usage
2,4,8,16,32,64,128,256,512,1024,2048
In 40 years, 2048 times that. And it just goes up from there. Now, if you're thinking, that's more than the world produces, you're right. But what happens if it is even half, or 1/10th as bad? Still nothing that leaves us a habitable planet, because the heat and carbon from mining will drive climate change past the brink.
IMO the assumption/premise here doesn't describe the situation ("bitcoin" or more broadly "currency") in a precise enough way to make this a useful thought experiment.
Ordinary people don't really demand money per se. They work or sell goods/services and get paid money for that and they spend money to get other goods/services in return. There's no demand for money itself, it's just a means of exchange and value storage. Now of course, everyone would like to have a little more of this "item", but that's not what demand is, really. Or would you also say there is demand for USD and if the FED doesn't meet this demand by issuing more USD then the price for USD increases? I'd say that's just deflation due to the supply of goods having increased (in a growing economy) in comparison to the currency.
> So you've got a dwindling supply flow, that causes higher prices, ...
Yep, prices are going to rise ... but as with most things in the observable world there'll likely be some kind of dynamic equilibrium. Let the price rise to 1M and combine that with the fact that even HODLers won't live forever (to wait for even higher prices) and you'll see many of them buy actual goods/services with their btc ... and what does that mean? Yep, there you have your supply and circulation of btc. People have real life needs and can't just wait for deflation to enable them to buy two new fridges in a year instead of one right now when the old one went silent. Let the price rise to 10M and you'll see even more HODLers become buyers .. yes, there are some greedy HODLers out there (who probably prefer dreaming about what they can buy in the future over buying something now), but still, they will spend some and thus slow down the theoretically exponential price curve.
So no, I'm absolutely convinced that the price won't develop exponentially over the long term. Exponential price increase equates exponentially increased incentive to spend .. which is essentially direct negative feedback which leads to some sort of equilibrium. And I strongly doubt that this simple mechanism is the only negative feedback mechanism for the price of bitcoin.
Yes, bitcoin as a currency would have a deflationary nature. Which should mean that it nudges people to postpone purchases a little bit into the future rather than spend as quickly as possible .. which to me sounds much more like reasonable economic behaviour (from a sustainability point of view) in light of the current planetary environmental situation, compared to a monetary system that incentivises putting money back into the economy as quickly as possible.
Ultimately, many aspects of society will probably function as a negative feedback loop for the price of bitcoin, since bitcoin isn't the only use for energy. It competes with other uses that are much closer to what people actually really need and can't do without. Like riding a train or using an electrical stove. People aren't going to stop riding trains because they could use the energy to mine bitcoin instead.
No, the exponential scheme would IMO only apply in some very limited economic model where all these real world negative feedback effects were left out.
Clearly, the outcome you describe (consuming 1/10 of the world's energy supply) is inacceptable. But since this outcome is based upon assumptions that (IMO) don't adequately reflect reality, it's not valuable for assessing whether bitcoin might be useful enough to legitimize its energy consumption.
And don’t tell me what I don’t complain about ;) I’m plenty concerned with other sources of carbon emissions too.
As for the rest: I feel like another bad trope I see in these debates is the “you just don’t get it. Enjoy your irrelevance” thing. If crypto is misunderstood, then explain it. If there’s something people like me aren’t getting, help us get it. The burden of proof is on crypto-boosters to demonstrate why this is worth it and what the actual endgame here is.
https://link.springer.com/epdf/10.1007/s12599-020-00656-x?sh...
...we found that they do not pose a large threat to the climate, mainly because the energy consumption of PoW blockchains does not increase substantially when they process more transactions.
BTC is not.
(DeFi is used to speculate on crypto prices with leverage, which is also not essential)
I was staying in a hotel in Nepal around 10 years ago. I was sharing a room with someone I met. I paid the hotel, and my roommate paid me in bitcoin. It was pretty convenient considering my home currency is USD, his was EUR, and the local currency was rupees.
Anyway, as far as I'm aware there wasn't any cybercrime taking place that day :)
An unfathomable transfer of wealth from normal people to the rich is happening because of the Fed. How? The rich can borrow money from the Fed at near zero rates. They use that money to buy assets. Meanwhile, the government borrows money from the Fed at near zero rates. The government spends the money, inflating the circulating money supply. That causes the value of money to go down.
The rich can repay their loans to the Fed using money that is worth less than when they borrowed it. I.e., borrow $100M in 2021 dollars and repay $100M in cheap 2050 dollars.
This is turning America into a nation of renters, rather than a nation of homeowners.
It's also turning us into a nation of debtors, via the Federal debt, which will become overburdensome soon. We will either default, or the debt will be erased through hyperinflation, making the rich even richer again (as they get the money first and buy assets at the old prices).
Bitcoin fixes this.
And only bitcoin, or something almost exactly like it, can fix this.
The impoverishment of normal people via the banking system is exactly what the Jeffersons of the world were trying to prevent the Hamiltons of the world from doing.
Quite capable of understanding, thank you. I just think you're wrong.
At what point would you admit you are wrong? $100K/BTC? $1M/BTC? I will gladly accept that I got it wrong at $0/BTC, hell I’d go as low as $100/BTC. Who is going to be correct?
But javert laid out this grand vision of what bitcoin was going to do for us, and it was considerably more than "be a good investment" or "be something that people like". And he implied I was too stupid to understand it, which is... not cool. I understood exactly what he said the case for bitcoin was. I remain skeptical that it's going to achieve that, ever.
And if it doesn't, then... it's a waste in terms of the lofty goals that bitcoin proponents have stated, no matter how people valued it financially.
I'm sorry. I don't think you're too stupid.
It's just that at this point, "Bitcoin is a waste of electricity" comes across as trollish behavior. We've all seen that a million times. It's been explained a million times why that arguably isn't the case. So either engage with the actual argument people are having, or don't say anything.
Saying "bitcoin is a waste of electricity" doesn't contribute to the conversation at all anymore. It's the exact equivalent of posting a comment that says "boo bitcoin" or "bitcoin sucks."
So yeah, if you say that, I'm going to poke at you. And then I'm going to give you the actual argument, in case you haven't seen it. As I did.
Anyone here who can point their finger on any of the above statements and explain why it's wrong?
Treating this as a "crypto problem" and not a general energy / fuels problem does almost nothing but sell clicks / views / newspapers.
Trying to contribute here though on where we really are in crypto and angles of attack for discussion, vs an alarmist view:
1) BTC maximalists don't care and will argue to the teeth that the energy costs are baked into the economic value of the network. From a purely market argument they're not wrong here. BTCs energy use is "worth it" to a lot of people who truly believe BTC to be a store of value, a hedge against inflation, and a vote for decentralization.
2) Short term companies like Crusoe Energy are working on solutions to onboard "trapped" energy stores to reduce the carbon footprint. The most likely outcome of these efforts is likely not an overall reduced carbon footprint given the continued growth and interest in the overall market. (2)
3) Proof of Stake is much more efficient than Proof of Work (3) but it is unlikely that BTC moves in that direction short term. Or perhaps ever.
(1) https://www.torquenews.com/9539/ford-f-150-continues-its-sal...
(2) https://www.crusoeenergy.com/
(3) https://www.coinbase.com/learn/crypto-basics/what-is-proof-o...
I would love to hear responses vs downvotes to the floor
Do you think that we can regulate crypto into lower energy use?
Change hearts and minds?
I get the lightning rod component of these threads.
But head-in-the-sand won't get us anywhere.
I've been on HN looks at profile for 13 years now, not going to register a complaint now but makes me sad to have no discourse.