This, in essence, is why any further adoption of PoW chains is deeply incompatible with climate change mitigation. I'm happy to see crypto mature into some kind of open source / open protocol financial system but it needs to happen strictly on proof-of-stake chains (whatever the challenges to decentralization).
If someone wants anarchism they should simplify and use gold or some other easier to carry and exchange.
In a crypto anarchist’s dream world, the employee’s income claimable token could be resold, purchased by a loan shark, and the loan shark could provide another permission-less contract where anybody can upload a picture of the employer’s knees being broken, likely verified on chain by some other pain oracle.
The countervailing factors are, the poor are mostly ignored (except for kidnappings of large groups of children) while the rich can afford private security at an equilibrium price point where betrayal is not rational. Although crime rates are high, most do not participate because people are good for the most part. The major drags are scams, unpaid workers, phone theft (a phone is more likely to be stolen than a laptop), equipment sabotage (from wiring to rail tracks), political campaign related violence and most especially, theft, corruption and embezzlement by government officials.
In an environment of rampant corruption, minimizing the surface area exposed to trust is a rational preference. It might even be helpful in exiting a high corruption steady state.
Neither are great, but various crypto scams have been more common than even bank fraud, plus they use more energy.
Five? Ten?
It's possible that the US dollar doesn't collapse at all in the next 50 years... and that would be great... but it's also possible that at some point in the next 50 years the US dollar ends up being devalued significantly in which case it isn't such a horrible idea to take some of your cash and store it in a globally accessible cryptocurrency in addition to other assets such as gold.
You're saying that because world currencies collapse (your claim is the majority of them have within the past 100 years, which I don't have the data on, but let's just assume for the sake of argument that you're right), bitcoin is needed.
But bitcoin collapses not just every 30-100 years, it collapses every 0.5-5 years. [1]
How is that in any way better? Why are we spending all this energy on this?
[1] https://www.yahoo.com/now/7-biggest-bitcoin-crashes-history-...
When someone says that a fiat currency collapsed, it means the value went to zero forever. Bitcoin hit a new all-time high price in USD just recently. Not the same usage of the word collapse.
It specifically does not require permanence for any of the definitions, there's even an entire subsection on the varying degrees of persistence of various currency collapses.
Interestingly, from a first glance, it would also appear that most of the bitcoin collapses linked above fit the definitions in the paper, or iow, are just that, collapses.
Sometimes it's okay to admit when you're wrong.
“Bitcoin's Energy Usage Isn't a Problem. Here's Why.”
https://www.lynalden.com/bitcoin-energy/
Also, fraud is absolutely everywhere. Everywhere.
Yes. You can.
Let's actually generalize it to anything with an outsized carbon footprint (e.g. commuter flights, car dependent housing development, &c).
We will almost certainly continue doing that stuff but it's incompatible with any vaguely desirable ecological outcome. PoW crypto is special in that it is both highly optional (it's not essential to the lifestyles of 99.999% of people) and has easy substitutes.
Crypto mining can't be curbed by carbon taxes in any energy market like normal electrical consumption.
It can be done. We banned CFCs after all.
The taxes on PoW specifically interfacing with the financial system is a weak form of banning it and is definitely something that would work though, but what the gp seems to be arguing strongly against. They are asking why the energy price can't be updated to encompass the negative externalities instead of indirectly taxing it through the PoW's blockchain when it interfaces with the financial system.
Carbon taxes on energy used to mine bitcoin will cut into profitability, leading to some proportion of the least-efficient miners turning off because they are no longer profitable.
How to coordinate a global carbon tax seems like a much bigger problem than cryptocurrency. At 0.5% of global energy use, even if crypto mining was magically eliminated in an instant, 99.5% of the problem would still remain.
Also, feels weird to try to address this problem on the demand side instead of the supply side (which has much more direct influence). Machine Learning training is power intensive and location-insensitive, but it feels odd to worry about 'how to enforce carbon taxes on ML training'. "Which uses of energy are economically profitable" seems tangential to "how much carbon is produced by energy generation".
I’d like to hear what other economic activities you consider “highly optional” and whether they are more or less deserving of economic resources than Bitcoin.
The immediate carbon impact of proof-of-work should be solved by banning proof-of-work. What is the problem any of this is solving?
It seems to me like your defense of proof-of-work is "it needs to be this way to work properly and it's not that big a deal", but why do we even need it to work? If it has a clear carbon cost and no perceivable benefit, then it seems obvious to me we should get rid of it.
I see no “perceivable” benefit in lots of things that other people choose to spend their time and money on. But at least I have the decency not to say it out loud.
Does that mean everyone who plays video games after work is literally satan for consuming energy for mere entertainment?
Life itself consumes energy; does this mean the universe would be better off without us in it?
This is obviously a nihilistic viewpoint once you follow it to it's natural conclusion.
I expect the future will have a combination of both PoW and PoS due to fundamental trade-offs. So I got news for everyone. Proof-of-work exists and isn't going anywhere. You can't just yell at the clouds wishing we could make it illegal for "environmental reasons". PoW is not "incompatible with climate change mitigation", this is obviously a straw-man. There's plenty of energy to go around, and we have to solve the climate+energy crises either way. Not to mention Co2 emissions alone is just one small part of the overall climate concern.
I'm more interested in individuals and organizations willing to actually solve technical problems related to energy and climate, and choose to ignore those just yelling at politicians to solve it for them.
If that replaces them and the three friends they are playing with from each driving in their own car to the bowling alley 25 minutes away then it's a net carbon savings. It's all about the alternatives, and in the case of cryptocurrencies, a lot of people think there are comparable, much more energy efficient alternatives for everything you use crypto for legally. There really is no ridiculous conclusion here, it's about the alternatives.
Neither is PoW and PoS, but it's still a question whether those differences are meaningful and worth the tradeoff. The argument is not absurd, there are real costs to the PoW approach worth considering.
The PoW powered by solar is different but it's also a mythical beast. By design there would be no way to legislate the kind of energy the mining part uses because it's opaque to the users of the network. The only thing reasonably open to legislation by a country are the interfaces of the network with the countries financial system and by then it is impossible to determine the providence of the energy it used. It's also impractical to make enough energy where coal or other fossil fuels aren't economical to mine blocks in a popular PoW scheme.
No. The only alternative that is even remotely similar to Bitcoin is gold, and gold mining is horrendous to the environment. Proof of stake coins are not Bitcoin, they don’t provide the same value proposition, and if you don’t understand why then I’d encourage you to do some more reading (including the entirety of the article linked in this post).
Sure, but it's especially important to say here because proof-of-work cryptocurrencies are novel, popular, and consume orders of magnitude more electricity per transaction than more common transaction processing systems.
Ex. How much of the energy budget of the US military should be included in the cost of a dollar denominated transaction?
And if we were charging for underlying infrastructure costs, then Bitcoin would have to put in its share. Unlike paper/specie currencies, Bitcoin is entirely dependent on a functioning global internet. There are an awful lot of long-tail scenarios under which Bitcoin becomes effectively useless and therefore valueless.
This is a very weak straw man. The majority of people on the planet interact with the dollar economy, either directly or indirectly, because of its extreme dominance. Of course a ~0.3% reduction in users isn't going to change much.
Dollar hegemony is fairly binary: either it's the dominant world currency or it isn't. If hegemony falls, the US military will have to reduce in size, because it can no longer be funded by being the gatekeeper of the global economy.
It seems you don't see the value of POW cryptocurrencies at all. The attitude that "bitcoin is worthless, so any energy spent on it is wasteful" has been parroted a lot on HN recently, but... scoreboard: the market disagrees. I wish more bitcoin skeptics kept some intellectual curiosity around it rather than just writing it off as "I don't get it: its worthless" - there are reasons people are paying tens of thousands of dollars for a bitcoin, even if you don't understand them.
I think these attitudes are indicative of cognitive dissonance in individuals who dismissed Bitcoin a long time ago and don't want to recognize their own regret for discounting it: if they didn't dismiss it their net worth would probably be higher today.
Markets also value Ponzi schemes highly. So what? Markets can be a useful guide to value in certain circumstances, but it's correlative, not probative.
I've had plenty of intellectual curiosity around Bitcoin, blockchains, etc. For a while I was hoping something good would come out of it. But it's been 10 years and there's been almost no economically positive use demonstrated. It's great for certain kinds of light financial crime (ransomware, money laundering, etc) and it's great for creating the sort of unregulated markets in which scammers, fraudsters, and other economic parasites thrive.
I'm personally very happy never to have put a nickel into cryptocurrencies. Could I have made a bunch of money? Maybe! Would have it been through creating value? No, not at all. It's a "greater fool" game, and I don't play those. I haven't since I quit working for financial traders in the 1990s, as I don't think it's moral to get paid when no value is created.
> The energy problem isn't unique to Bitcoin.
The unique problem with Bitcoin and PoW in general is that its energy usage is inversely proportional to the cost of energy. If the total value of Bitcoins mined every day is $X, collectively Bitcoin miners will use just a little less than $X of power every day.
That means that any time we do improve our energy infrastructure, by increasing supply with more renewable sources or reducing demand via efficiency improvements elsewhere (all of which reduce energy prices) Bitcoin mining becomes much more profitable, miners expand and new miners appear, and PoW's energy usage goes up accordingly to use as much power as they can possibly afford (up to $X).
This isn't true for anything else - there's no other industry that so directly turns energy into money without limits. While there is a relationship to other energy usage, if energy drops to 1/100th of its current price, people don't start heating their houses 100x more, they don't start gaming on 100x more power-hungry computers, and they don't start taking 100x more flights than they do today, because in each case, there are significant other limits and marginal costs involved.
PoW meanwhile will absolutely increase its power usage by 100x, as fast as the network possibly can. This is why PoW's energy usage is a unique problem.
Aluminum refining maybe, but even then you are going to run out of ore to turn into aluminum. This really highlights how novel the mining economics are.
Using more cheaper energy to hit a higher difficulty to protect the same network isn't a societal gain in the same way.
I.e. aluminum still follows the normal supply-demand curve even if it is highly sensitive to energy prices
They both suffer from the negative energy externalities, but you get something more with higher aluminum production. You get more aluminum.
More generally, the Rebound effect suggests other expansions will consume a sizeable portion of efficiency gains (or possibly exceed it). Video gamers will want higher res VR devices, they'll want richer worlds with better physics, animation, AI units and high fps high resolution graphics. AI software is absolutely guaranteed to use up any 100x gain in efficiency and more will be demanded of computers.
A backfire effect is predicted as possible if new capabilities once discarded as infeasible open up (ala aluminum smelting, constant use of AC) and when new economic activity generated by gains in efficiency results in a larger number of wealthier participants. Such effects from efficiency gains are fine so long as they're focused on energy and not say, polluting fuel use efficiency.
Buckminster Fuller proposed ephemeralization as the manner in which prosperity could increase given growing population and finite resources. This takes place because as material use decreases; information, computation and energy use intensity increase as more activity is displaced into them.
The author's opinion on this topic is that energy arguments are basically bunk, but she doesn't mention the scaling you do. I'm unequipped to judge who's right.
Every economic activity uses energy (electricity, or combustion) in one form or another. The argument you’re really making is that the net increase in energy usage due to Bitcoin’s existence—and the resultant carbon impact, however you propose to measure it—is not worth the benefit provided by the Bitcoin network. But if you’re going to judge Bitcoin by its carbon footprint, you might want to judge all other economic activities by the same standard to avoid accusations of hypocrisy.
Moreover, to the proponents of PoW, it is not a flaw to be removed, but a necessary foundation that makes the protocol incorruptible and eternally open and permissionless for anyone to join as first class citizens, even late adopters. This stands in stark contrast to PoS which gives an absurd level of power and protocol control to early adopters that potentially can't ever be diluted, and may even increase since PoS rewards holders of coin with even more coin.
1) A system that turns energy usage into $ will always gravitate towards the cheapest energy source (fossil fuels). Maybe we'll eventually figure out cold fusion, but for the next few decades it's pretty important to promote carbon neutral energy production even if it's more expensive while simultaneously cutting out gratuitous industrial scale waste like PoW mining.
2) "makes the protocol incorruptible and eternally open and permissionless for anyone to join as first class citizens, even late adopters". Ah yes, let me just fire up my warehouse full of ASICs connected to a dedicated power plant. Any old Joe could do it.
Renewables are often cheaper - it depends.
https://www.theguardian.com/environment/2021/jun/23/most-new...
1) Bitcoin mining is increasingly migrating to hydro and geothermal, because fossil fuels are too expensive in comparison. Presumably, nuclear will come eventually.
2) See what I did there in my first sentence? We should have an intellectually hygenic discussion; there is no valid place for the kind of rhetoric you're employing.
There are arguments against these, but yours is a poor one.
Developed countries are already making okish strides on decarbonizing, but how can we in the first world effectively decree that the developing world must halt or slow progress towards the lifestyles that we enjoy. That reeks of a new kind of colonialism, and simply won't go over well without the threat of global violence.
The only way we'll actually make strides on decarbonization is with some kind of global carbon tax. I'm not going to pretend I know how we accomplish that, but if we can't, we're not going to mitigate climate change in any reasonable way.
The majority of these harms are in heavy industry, manufacturing, logistics, etc. I'd estimate only 1% of this problem can be attributed to cryptocurrency.
If crypto was somehow globally banned, the problem would not be significantly diminished. If bitcoin eventually becomes responsible for 10%+ of dirty energy, only then would this argument be compelling to me.
And you seem to be ignoring my point, that until we internalize the costs of burning fossil fuels, there will always be someone willing to burn it, even if it's not bitcoin miners.