Hacker News Reader

Comment by once_inc | Hacker News Reader

Using electricity isn't the problem. Anyone could use vast amounts of electricity as long as they are willing to pay the price for it. The problem is carbon emissions.

The switch to PoS is a non-issue from my perspective: a centralized system changed from using method A to method B, I don't understand why I should care.

Bitcoin mining is increasingly being used to prevent methane emissions in stranded gas reserves. Having an economic incentive to not flare or emit methane but instead using it for generating bitcoin allows Bitcoin mining to become net carbon negative.

Reducing methane emissions is vastly more effective at preventing climate change than reducing co2 emissions.

View on HN

> The switch to PoS is a non-issue from my perspective: a centralized system changed from using method A to method B, I don't understand why I should care.

Because every bitcoin transaction costs $60 in electricity. That is a monumentally stupid amount to pay. It's $125 per kB.

Proof of stake incentivizes capital directly. Proof of work incentivizes capital via the ability to find prime numbers, which limits you to people who are willing to spend $1000s to millions of dollars to do it efficiently. Limiting the validators like that drives up costs massively.

> Bitcoin mining is increasingly being used to prevent methane emissions in stranded gas reserves. Having an economic incentive to not flare or emit methane but instead using it for generating bitcoin allows Bitcoin mining to become net carbon negative.

No, it is not. Projects like that may be branded with bitcoin, but bitcoin miners are buying the same electricity as everyone else. The rising cost of electricity is causing new sources of power to be exploited.

Instead of being used for something useful, that electricity is being turned into waste heat.

> Because every bitcoin transaction costs $60 in electricity. That is a monumentally stupid amount to pay. It's $125 per kB.

Its incredibly fallacious to measure the cost of electricity per transaction on Bitcoin. Blocks can be completely full or utterly empty and still use the amount of power. You're also missing the point of the power consumption. Its not used to move capital from one person to another, its used to secure the network from attacks and preserve its integrity. Measuring the cost of electricity per transaction is like measuring the amount of energy bank vaults and the US army use per dollar transaction. Stats like the one you quoted don't take into account the number of Lightning network transactions happening off-chain but is secured by a past on-chain transaction.

> No, it is not. Projects like that may be branded with bitcoin, but bitcoin miners are buying the same electricity as everyone else. The rising cost of electricity is causing new sources of power to be exploited.

> Instead of being used for something useful, that electricity is being turned into waste heat.

One, value and usefulness is subjective. Because something is "useless" for someone like you doesn't mean its useless to others. I, and many people around the world, find Bitcoin to be incredibly useful and worth the electricity. Secondly, if oil and gas companies could profitably monetize flared methane, they would have already. They don't because trapping and transporting the methane would lose them money. Its an industry standard to simply release or burn the methane instead. So Bitcoin IS useful in that respect.

> Blocks can be completely full or utterly empty and still use the amount of power.

It has been steady around 1500 tx/block for years.

> You're also missing the point of the power consumption. Its not used to move capital from one person to another, its used to secure the network from attacks and preserve its integrity.

I'm not. That's a completely insane amount of money to pay for that service. It's totally unnecessary.

> Stats like the one you quoted don't take into account the number of Lightning network transactions happening off-chain but is secured by a past on-chain transaction.

They don't have to. All those techniques are equally applicable to POW, but POW doesn't spend $18 million daily on electricity to do it.

> Secondly, if oil and gas companies could profitably monetize flared methane, they would have already.

Oil and gas companies sell oil and gas, not electricity. Bitcoin miners are not running methane gas turbines. Electricity companies are.

>>It has been steady around 1500 tx/block for years.

>>That's a completely insane amount of money to pay for that service. It's totally unnecessary.

You cant know exactly how many transactions are processed per bitcoin block. The introduction of the lightning network and other 2nd layers mean any one of the ~1500txs per block could in reality be a batch of a 1,000,000 or more transactions being settled. There could easily be 15,000,000,000,000,000 txs per block, think about what that does to any $/tx calculation.

Bitcoin is cheaper than visa because it is designed to process infinite transactions for a fixed security cost.

Bitcoin is cheaper than visa because you have zero consumer protections.

https://www.statista.com/statistics/881541/bitcoin-energy-co...

Let's add up the carbon footprint of the traditional financial ecosystem, in whole. I think once all the externalities are factored in (including things like minting and handling physical cash and coin), doing it all on a computer makes more sense even if POW is energy intensive.

Converting energy into economic value is the opposite of waste. That is what mining does.

> I think once all the externalities are factored in, doing it all on a computer makes more sense even if POW is energy intensive.

No, it's not even close. Bitcoin currently uses as much electricity as 31 million US residents. One transaction uses more than two months of average residential usage.

> (including things like minting and handling physical cash and coin)

Why would you include that? Do you think people won't want to carry money? Do you think bitcoin makes cards, POS processors, and cash obsolete? Do physical wallets not take energy to make and run?

Regardless, the amount of energy used to make and use physical money is very small:

1. coins are irrelevant; the most expensive coins are cents, which cost about a cent to make. The total amount of coins made is much smaller than the amount of paper dollars made, so the value of energy used is small compared to the total cash made.

2. The US spends 1 billion annually to mint currency. Bitcoin spends 6.5 billion USD on electricity directly.

Transactions do not have an energy cost unto themselves, blocks do. If the entire world were to stop sending Bitcoin transactions for one hour, it would make almost no difference in the power consumption of the world's miners. Roughly 7 to 10 empty blocks would be produced. The mining process provides network security all on its own, transactions or no transactions.

>Why would you include that?

Because I said "all externalities". Bitcoin competes with the traditional financial system, including all the people and infrastructure involved in cash handling. That includes not just minting, but distributing it, collecting it, counting it, securing it, and so forth. And that is a cost borne not just by the United States federal government, but every government with physical currency and every bank on the planet. The idea that doing all this with physical objects is less power consuming than doing it with data is ridiculous.

If you want to make an honest apples to apples comparison, you include everything. Mining power usage is the single largest driver of bitcoin energy footprint granted, but it has a lot less other stuff attached.

> The mining process provides network security all on its own, transactions or no transactions.

It seems to me that if nobody transacted, nobody would be able to sell Bitcoin, mining rewards would be rendered worthless, and mining would stop.

Sure, you can't point at any given transaction and blame any particular emissions on it, but surely it's reasonable to amortize it and assign a fraction of the emissions during each block to each transaction, considering that Bitcoin has no value without them.

No, because there is no relation between transaction volume and block production times, and this is a protocol level constraint. The network aims to produce a constant number of blocks per hour, which happens no matter how many transactions are available to be included in that block.

Here's an example: If, say, the maximum block size was doubled so they could hold twice as many transactions, this would cut your energy usage figure in half, but actual energy consumption by miners would barely change at all. Similarly, if the maximum block size was halved, your figure would double, but the energy consumed would not. If there were no such thing as a maximum block size, your value then scales linearly with the amount of transactions that can be crammed into 10-ish minutes of time.

I dunno, isn't that like saying "if planes were all half-empty, the carbon emissions of the plane would barely change, so you can't blame the carbon emissions on any of the passengers"? Yes, the "marginal carbon emissions" of a single transaction is ~0, much like the marginal carbon emission of taking an empty seat on an airplane is ~0, but by this logic nobody on the plane is responsible for any carbon emissions, which is obviously silly, so in lieu of any better accounting method, you just amortize the carbon emission of the plane across the passengers.

If the block size was reduced to, say, one transaction, then the economic value of the Bitcoin network would surely drop, mining rewards would be worth less, miners would quit, and the electricity use would fall. It's the economic value of the transactions that end up rewarding miners; I can't see how people transacting on the chain aren't partly responsible for the miners' emissions.

I can't think of any obviously better way to assign a number to that than just amortizing it across the number of transactions. It's a meaningful number that explains something about how much usefulness the network produces per unit of electricity. Doubling that by doubling the block size (or, halving it by halving the block size) would be a meaningful change!

>But by this logic nobody on the plane is responsible for any carbon emissions

That is strictly true. This is why the concept of a personal carbon footprint (something dreamed up by a British Petroleum marketing team) is inherently inane.

>Doubling that by doubling the block size (or, halving it by halving the block size) would be a meaningful change!

How and why? It would change your metric, but it wouldn't make the network consume one single watt less or more power. Its efficiency is unchanged.

A machine that spits out one widget per watt is less efficient than a machine that spits out 10 widgets per watt. Even if there is exactly one widget machine in the world, it is always turned on and always draws the same amount of energy, one type of machine would produce more widgets than the other. That machine is more efficient. It is more useful for the same energy input. It's a totally reasonable metric to compare widget-producing machines by!

If the bitcoin network is a transaction-producing machine, the more energy it takes to produce the same number of transactions, the less efficient it is. All else being equal, spending more money and energy for the same result is worse than spending less money and energy.

You're telling us that since mining costs don't vary with the number of transactions processed, they don't count. Production costs that don't depend on the level of output are called fixed costs. [1] They're still costs. Pretending that a cost doesn't exist doesn't make it cease to exist.

[1] https://en.wikipedia.org/wiki/Fixed_cost

And I'm telling you that the production cost is tied up in blocks, not transactions. This is not up for debate, it is intrinsic to how bitcoin works. If you send a transaction, the only power consumption involved in that act is involved in the transmission of the data and its broadcast to the network.

The monstrous energy usage comes from trying to brute force a single hash. It is entirely decoupled from transaction volume.

You can't send a transaction without mining a block. Therefore all the costs that are incurred mining a block are costs that are incurred sending transactions.

Changing the maximum block size would change the "energy used by a transaction" since block production is a factor of fixed time, not transaction volume, so the comparison is absurd on its face.

But what is the current block size, and what's the plan for changing it?

It's not a comparison. The fact is that the costs of processing bitcoin transactions are predominantly fixed. This tells us that bitcoin doesn't have economies of scale. The average cost of a bitcoin transaction doesn't decrease as the number of transactions increases. This makes bitcoin uncompetitive in relation to pretty much any other transaction processing technology.

And once that block size changes, the energy used per transaction will go down. It's really very simple, stop making it complicated. Blocks are there to hold transactions - that's their whole purpose. The fact that technically you can mine an empty block is an irrelevant detail of the protocol: bitcoin would not keep getting mined if there were no more transactions.

> production cost is tied up in blocks, not transactions

Fixed costs are amortized. The block's footprint is spread across transactions. Arguing otherwise is like someone taking the power bill of a bank to infer the cost per teller-window transaction, and the manager arguing that teller-window transactions don't burn energy, branches do. Yes, sure. But also irrelevant.

And yes, if the branch tripled in size its energy use would reduce the per-teller energy footprint. (Assuming constant transaction volume.) But that's a hypothetical.

>You can still amortize the cost of the block across its transactions

Sure, if you're more interested in talking points then useful metrics. Increasing or decreasing the block size limit would lower or increase the "cost of a transaction" (since blocks are generated on a schedule commensurate with difficulty, which is roughly a function of how many miners there are) without actually changing the amount of power consumed.

What you're doing is basically correlating the world's average temperature versus the number of pirates and declaring that pirates are responsible for global warming. In reality, the two variables are unrelated and not even correlated.

> the block size limit would lower or increase the "cost of a transaction"

Assuming constant transaction volume and other factors related to difficulty. You have a point. But it's far from a panacea for proof of work, and certainly not at the threshold to derail coming taxes and regulation. (Though one might find a way to structure the taxes such that they reward a productive increase in the block size.)

Are you really arguing that the number of blocks and the number of transactions in BitCoin are two variables that are “unrelated and not even correlated“?

Of course they’re related. It’s trivial.

But what do you amortize the fixed cost over? Refugees can use bitcoin to hold money while fleeing dangerous situations. Not being forced to do a transaction is the value in such a case.

> The mining process provides network security all on its own, transactions or no transactions.

The mining process provides a fixed amount of network security. $125,000 per 15000 transactions. The fact that it would still cost that much money even with zero transactions is not a feature. It's not a good thing.

Each individual block is secured. You can't just add more and more transactions to each block without reducing security.

> Bitcoin competes with the traditional financial system, including all the people and infrastructure involved in cash handling.

Right now bitcoin competes with practically nothing. How much pizza is bought with bitcoin vs cash? You're effectively assuming that all those other functions are either irrelevant or that bitcoin can somehow do them for zero cost. Neither is true.

> And that is a cost borne not just by the United States federal government, but every government with physical currency and every bank on the planet.

60% of global federal reserves are in dollars. Dollars are the world's dominant currency. Compared to the massive disparity in energy use, it doesn't matter if even only 10% of global currency is in dollars. Dollars win.

Plus, if you're trying to compare with the places where cash really matters -where they can't use VISA or cell phones to transfer money- then bitcoin is certainly at a huge disadvantage after you have to buy computers for all those people.

> The idea that doing all this with physical objects is less power consuming than doing it with data is ridiculous.

Again, you're not replacing coins with data. You're replacing coins with USB sticks.

But you're right! It IS ridiculous, because it's completely insane how pathetically inefficient bitcoin is.

>The mining process provides a fixed amount of network security. $125,000 per 15000 transactions. The fact that it would still cost that much money even with zero transactions is not a feature. It's not a good thing.

Completely wrong, you cant know exactly how many transactions are processed per bitcoin block. The introduction of the lightning network and other 2nd layers mean any one of the ~1500txs per block could in reality be a batch of a 1,000,000 or more transactions being settled. There could easily be 15,000,000,000,000,000 txs per block, think about what that does to any $/tx calculation.

Bitcoin is cheaper than visa because it is designed to process infinite transactions for a fixed security cost.

Lightning network and other Layer 2 solutions are a joke. Those are only created because the Bitcoin network was intentionally designed to be slow and congested, to make it artificially expensive, and waste ridiculous amounts of electricity in the process. If those things actually worked then someone could make them work with anything else as a settlement layer, even traditional currencies. There is no actual reason for them to use Bitcoin.

So, the reason these systems use something like Bitcoin (or Ethereum, whatever) is because the goal is to build programmatic money, and you can build that on Ethereum and you simply can't directly build that on a "traditional currency" without first writing an adapter (such as some stable coin, as either a centralized regulated entity or as a decentralized protocol) to some decentralized programmatic system that you can then piggy-back on top of as a settlement layer.

The way that then, for example, (and this is really glossing) Lightning works is to provide a number of hypothetical signed Bitcoin transactions that rely on each other in a way where, if someone attempts to screw you over, you can put down one of the other transactions and move to a different state. You make it sound like Bitcoin is purposefully crippled to prevent this kind of performance enhancement, but one of the few and subtle big changes to Bitcoin was to support this!

https://en.wikipedia.org/wiki/SegWit

> If the entire world were to stop sending Bitcoin transactions for one hour, it would make almost no difference in the power consumption of the world's miners. Roughly 7 to 10 empty blocks would be produced

Yes, and then the average cost of a transaction would be even higher than the ridiculously high amount it already is.

PoW crypto was using over 1.2 percent of the world's electricity. That's an insane waste irrespective of any kind of comparison to whatever other industries.

> Let's add up the carbon footprint of the traditional financial ecosystem, in whole. I think once all the externalities are factored in (including things like minting and handling physical cash and coin), doing it all on a computer makes more sense even if POW is energy intensive.

Cryptocurrency didn't event the idea of using computer ledgers instead of physical cash and doesn't get to take credit for it. There are dozens of ways to pay by computer that don't involve wasteful PoW.

> Converting energy into economic value is the opposite of waste.

Agreed, but I still don't see the value being produced by the cryptocurrency system. The value (not price, but value) that it delivers compared to traditional visa/mastercard/etc. seems marginal at best (and perhaps even negative once you account for the externalities that cryptocurrency-enabled crime imposes).

«Because every bitcoin transaction costs $60 in electricity.»

A common misconception. Only a fraction (about 1% at the moment) of Bitcoin's electricity consumption is derived from transactions, because transaction fees account for only about 1% of miners revenues. The average transaction fee is about $1 at the moment, so a transaction "costs" only $1 in electricity because it provides $1 of extra revenue to miners who can subsequently spend it on opex (electricity).

I haven't computed it, but you need to take into account the energy it takes to mine a block and the number of transactions in that block.

The transaction fee is irrelevant, as the fees being paid were mined in the past and already "paid for" with electicity.

In the end, transactions drive the chain forward. You don't need (a lot of?) them to continue mining, but they are the only "useful" part of the blockchain.

I have no idea if bitcoin operates at max capacity, but I think it does. If so, I think it's perfectly fair to attach mining energy use to transactions.

«I haven't computed it, but you need to take into account the energy it takes to mine a block»

No, because the energy consumption is the same regardless if a block contains zero or a thousand transactions. Therefore it is misleading to attribute mining energy as the "cost" of transactions. And Bitcoin doesn't operate at max capacity: its lightning network is very under-used at the moment.

As to the transaction fee, it is relevant: even though it was already "paid for", it is being redistributed to miners again, therefore drives energy consumption further up than if it was not being redistributed.

Also worth considering: Proof of Transfer consensus mechanisms like Stacks allow entire networks to run in paralleled with Bitcoin by piggybacking on Bitcoin's consensus mechanism. That's a whole big pile of transactions happening that go entirely unaccounted for by folks who just count the number of transactions in a block.

Looking at the Stacks block explorer, there’s very little activity on it.

It is intellectually dishonest to use marginal cost here and not average cost.

A transactions costs $60, in the sense that all transactions together over some period, say N, cost $60*N over that period.

That is invisible to the user insofar as it is financed through an increase in money supply [1] which accrues to the miners at the expense of all other BTC holders.

[1] Increase in money supply is sometimes, particularly by Austrian economists and crypto acolytes, identified with inflation. The irony...

It would be intellectually dishonest, if the foundations of your reasoning were sound.

The increase in the money supply, aka block subsidy, is a value transfer from BTC holders to miners compensating them for enforcing the consensus rules of the ledger. Very similar to if you were paying fees to a mega secure vault company, though no vault company can provide decentralised value storage; value storage without any single point of failure. Considering the unprecedented level of security on offer, the value for money is astonishing.

The miners job is to construct a block. They're paid via a special transaction called a coinbase (a large American exchange named their company after this special transaction), which they can make payable to whomever they wish. They take incoming transactions and may include a certain number of those; the limit is 4 million weight units, as opposed to a certain number of kB as is commonly believed. Each transaction they include will usually include in addition to fixed recipients, a special "spend to anyone" transaction output, this is to encourage a miner to include your transaction preferentially as they can make this portion payable to themselves. They may attempt to include multiple transactions spending the same funds to different recipients, or to insert a coinbase transaction wherein they have made payable to themselves any number of bitcoin, or include more than 4 million weight units worth of transactions, or make some other attempt to break the rules of consensus that any block they published will be tested against by thousands of other computers who will then choose to store locally the new block as the new strongest valid chain tip, or disregard. Before publishing the transaction though, the miner must also solve the double spending problem, by providing proof of work. They do this by going back to that block they're constructing, and firstly putting a random number in the nonce field of the header. Then, they pass the blocks bits into a sha256 hash function, take the resulting hash and hash it again with the sha256 function. The result must meet the current block height difficulty, for example to just happen to start with 18 leading zeroes. If it doesn't, the nonce is incremented in the header and the block is hashed again. Without an appropriately difficult proof, first of all you wouldn't know which valid block had come first, and so would have double spend problems where after receiving payment, the block containing your payment was dropped and replaced with another, or outside of bitcoin, anyone can for example send you a transaction receipt via e-mail stating you have been paid, on its own it's worthless though, you will have to rely on PayPal or a bank to ultimately tell you if you have received a payment, and PayPal or bank payments are reversible in a way Bitcoin transactions are not so even then, you don't have the same degree of certainty (furthermore your funds are not in your custody, instead you have lent your money to the bank; they owe you it). I hope this clears up the difference between these different fees and what they are in payment for, please DYOR next time before speaking on a subject as though you have some knowledge of it, much of the confusion around Bitcoin results from people who have not studied it wanting to sound knowledgeable.

I don't know much about cryptocurrency, but I'm not sure I understand how your response relates to the question of whether, on average, bitcoin transactions use about $60 worth of electricity.

Thanks for this summary of the basics of mining (that most people here are familiar with). None of it presents a challenge to my two arguments:

1. BTC holders pay a fee of around 1.7% p.a. of their holdings (until the next halving) to miners (through an increase in money supply),

2. which amounts to around $60 per transaction currently. (Higher if BTCUSD rises or the number of transactions falls; lower if BTCUSD falls or the number of transaction increases, which it cannot much because BTC operates not too far from the limit.)

> please DYOR next time before speaking on a subject as though you have some knowledge of it,

Ah, the old "you just don't understand crypto" chestnut...

The time taken to refute bs is much greater than the time it takes to generate bs. Your argument is at best mistaken and at worst intentionally misleading. My summary of mining is better than most you will find online and, only lacking in mention that the previous blocks hash is also included in each new proposed block to ensure each builds upon the chain tip. Even if I hadn't studied the source code and game theory myself, I think I trust the technical analysis of the Steve Wozniak's of the world over yours. A simple way to see through this argument that transactions cost $60 would be to say, that being the case, why can I currently pay $1-2 for a transaction. And if no transactions occur, why would miners still be able to continue creating blocks? I think it's very likely you simply dislike Bitcoin and want to mislead people about it, for personal reasons.

$60 (or, more currently, ~$83) is the block reward, at the current price, divided by the average number of transactions per block. It does not even include the added incentives from fees.

Yes, and the block reward can be claimed without any transactions in the block.

On BTC this never happens, on other chains it's quite common, since no one uses them.

That $60 in electricity 'per transaction' is simply not correct, the value of the block reward doesn't come from transactions. The transaction fee does.

The value you try to compute is currently exactly $79, including fees (which are about $1). If the number of transactions were to double (or halve) tomorrow, that value would halve (or double). You are just dividing fixed ongoing rewards by a variable metric unrelated to the rewards (transactions). You are propagating a misconception that somehow this represents the cost of a transaction.

Funny thing is that traditional finance (say a credit card transaction) definitely beats BTC both on average cost and on marginal cost.

Incorrect assumption: miners use energy regardless of the number of transactions going through.

The energy is not used to handle the transactions, the energy is used to secure the network.

> Instead of being used for something useful

Bitcoin uses less energy than YouTube. Wether you think having a decentralized, global monetary system that gives everyone an opportunity to own sound money that the government cannot take away is more or less useful than YouTube is of course something everyone is entitled to have an opinion on.

It might be that you are correct, it is too early to tell, but you are no the final judge of what is useful in the world or not, so this quote is just your personal opinion and nothing more.

> Bitcoin uses less energy than YouTube

I believe this is totally wrong - I think Bitcoin uses significantly more than YouTube. Where did you get your numbers?

The 2020 Google Environmental Report [1] lists the total energy consumption of all Google/Alphabet data centers as ~12.2 TWh/year in 2019 and growing at about 2 TWh/year. (See page 32.) So in 2022 the approximate usage for all Google/Alphabet properties, not just YouTube, would be about 18.2 TWh.

Meanwhile, Statista estimates Bitcoin as consuming about 177 TWh/year [2].

So this means Bitcoin consumes about 10x as much as not just YouTube but all Google/Alphabet data centers combined!

There are some urban legends about YouTube using much more energy than it does; some of those urban legends are refuted here: [3]

[1] https://www.gstatic.com/gumdrop/sustainability/google-2020-e... [2] https://www.statista.com/statistics/881472/worldwide-bitcoin... [3] https://www.iea.org/commentaries/the-carbon-footprint-of-str...

Whether Bitcoin uses less energy today than YouTube is immaterial. (As is whether Bitcoin counts as "sound money", which I'll leave to the side.) What's important is the energy use per transaction, the total of which -- if scaled up to match what's handled by traditional banking -- would be absolutely staggering.

My lifestyle of keeping my high-end PC running all the time, cranking the AC down to 68, turning all the lights on, and so on, would of course use less energy than YouTube. But if everyone behaved as I do it'd be a bad thing (don't tell Kant).

"If scaled up" presumes incorrectly that the costs are somehow linearly bound to the number of transactions, they are not, so that whole line of reasoning is flawed.

I looked into your statement about bitcoin mining preventing methane emissions and it doesn't add up to me. Oil drillers already flare the methane, which turns it into carbon dioxide. The solution these bitcoin miners are implementing is to burn the methane in a controlled manner so they can harness the energy produced for electricity to mine bitcoin. The same chemical reaction occurs, converting methane into carbon dioxide. The companies internal research claims this reduces carbon dioxide equivalent units, but I'm pretty skeptical. Of course, they would want their research to show they are doing something good. Sure, I guess it is more useful to harness the energy than to just burn it fruitlessly, but I don't see how it reduces emissions. Is there something I'm missing as to why this would make sense?

If you release the CO2 into the atmosphere, it doesn't really reduce emissions. However, because miners can harness the energy in a profitable way, they could afford to sequester or scrub the CO2. That would make oil and gas companies look a little greener, which is even more of an incentive. I believe some miners are doing this already.

They may or may not be able to afford to sequester the carbon. Even if they do that (and I have never heard before that they do), in the long run would surely be out-competed by other miners who don't bother.

I don't think anyone, anywhere is profitably doing carbon sequestration (and i'm not aware of any practical 'scrubbing' scheme).

I have been on oil and gas pads and drill sites. Flares have significant incomplete combustion. A financial incentive (lots outside north America) to pipe it into a generator encourages those with troublesome gas leaks to fix it.

> allows Bitcoin mining to become net carbon negative

Phrasing in this way suggests that Bitcoin is already net carbon negative or can plausibly become it. That is not true.

> Using electricity isn't the problem.

It is, as electricity is fungible and wasting it on bitcoin increases prices for everyone else and encourages greater degradation of shared resources.

I agree Bitcoin probably won't be carbon negative any time soon if ever. But electricity is definitely not fungible as production is not always in the same place as demand.

If something is not 100% fungible, it can still be fungible to some extent. Given the size of our electricity grids and to a lesser extent the capacity to store energy, electricity is definitely fungible at some level. I don’t have the numbers but I’d say this level is pretty high.

There are very few goods as fungible as electricity, even though it is not perfectly fungible.

If this were true we would not still be dependent on fossil fuels.

OP didn't say there were no goods as fungible, they said few. Fossil fuels can be more fungible without them being wrong.

Arguably, "fossil fuels" are not as fungible as electricity anyway. I can take electricity from any outlet and, with the right adapter, use it to power any electric appliance. I cannot take gasoline intended for my car and use it in a grill, or in the furnace, or in a jet, no matter what equipment I buy.

It’s the other way around. You can transport barrels of oil overseas and use for trading but sending electricity requires infrastructure that may take some time to deploy. It’s the same problem with gas pipelines.

How it is related? Fossil fuels are used primarily to generate and store electricity.

Even if electricity could be transmitted at any distance without loss we would use basically the same amount of fossil fuels.

Ok, fungible electricity. And unless it is consumed immediately it expires. Electricity doesn't magically transport itself to where people can use it.

BTC miners can be put near the oil pad to consume the electricity there.

Or we could simply not waste resources and time with such absurdities.

What absurdities? The wells are already there and they may leak or have flares with incomplete combustion. This cleans it up.

> BTC miners can be put near the oil pad to consume the electricity there.

It is happening so rarely that it can be dismissed and treated as smoke screen.

1) It is less than 0.01% of all energy consumed by BTC

2) Would still require energy waste on equipment

Genuinely curious: how does burning methane to generate electricity make an organization carbon negative? Do you have a reference for this?

I understand that methane is orders of magnitude more significant from a greenhouse effect point of view than CO2, but I don't see how it would be economically viable to burn methane "in stranded gas reserves" to generate electricity for Bitcoin mining but somehow it's not viable for other electrical consumption purposes.

The methane gas has already been burned for decades, adding bitcoin to the equation just made you look

No other use case has been profitable for the gas by products so the sites pump it directly into the atmosphere

Bitcoin mining is profitable and so the methane is not burned into the atmosphere, the molecules are stripped for electricity in simple catalytic converters and energy used on the spot (some sites are completely disconnected from the grid, these are the best use cases of this. others are connected to the grid which gets the most debate. in both cases no other solution exists in bitcoin mining’s absence and there was no political will to meet climate goals ever)

So the solution solves itself simply because it is an environmental solution that is profitable

I asked my question because I doubted the assertion being made without any math to back it up. It seems unlikely that

1) this could ever be a significant enough amount of Bitcoin mining energy to make Bitcoin "carbon neutral", and

2) if it ever did become a significant source of energy for Bitcoin, it would likely also be viable for other uses, eliminating the carbon offset argument

I'm not doubting that you can put a cheap and inefficient boiler generator on top of a methane flare and label it "green energy."

1) North America has lots of this kind of energy. Gigawatts/hr being spewed into the atmosphere as an unprofitable waste byproduct as is.

2) Transporting this energy is a cost. Storing and then transporting the energy is a cost. And other kinds of computation on site requires much greater infrastructure, like internet and big box data centers, which these remote sites do not have. Bitcoin mining barely needs any internet bandwidth and doesn't need a low latency connection either. It creates an asset that can be easily sold to people willing to buy that asset at a price far greater than the costs to create it.

Its important to understand that these are partnerships between two companies.

The existing energy producer who is taking a risk on a dangerous operation, largely technophobic and takes far too long to understand how it benefits them. And a separate crypto mining company searching for cheap energy, driven purely by the market.

The mining company sees the energy. The energy producer needs to reduce their waste byproducts.

Its semantics and pure coincidence about whether “less hydrocarbons billowing directly into the atmosphere” meets your criteria for “carbon offset” or “green energy”, its also what happens

Interesting framing. I'd frame it as Bitcoin having a local unexpected environmental positive externality. (As opposed to negative, which it has most other places without an unplugged methane leak.)

It's not negative or unexpected. Bitcoin naturally uses the cheapest energy it can find (arbitrage), which usually ends up being stranded energy. Something like a third of all electricity generated is wasted. So the idea that Bitcoin is unique compared to any other arbitrary & subjective use of energy is just anti-Bitcoin propaganda & green dis-information.

Whereas it may be difficult for one reason or another to transmit energy from where it's most abundant (a desert, or other remote areas), it's not hard to co-locate miners in those places & incentivize further development & utilization of that energy resource.

Does the expression "perverse incentives" mean anything?

This argument is like energy incentives in the world were mostly fine, except that some energy was stranded and could only be picked up by Bitcoin.

For something that is supposed to "change the System" it for sure is often pitched like the System can never change. That missing (enforcement of) regulation makes it economically beneficial to just vent methane without even flaring, is not something to celebrate. It's nice that the incentives lined up decently, this time. We should work on fixing the incentives so the methane can stay in the ground where it belongs. Don't dig that well.

Say, you have access to cheap hydro power somewhere. The powerlines are not yet completed to export the electricity to where it could be more useful. Along comes a Bitcoin factory and sets up shop. Suddenly, the incentives are not in favour of ever completing that powerline, for benefits amortized over decades, when you can sell that sweet, sweet Bitcoin today.

Of course, the owners of the Bitcoin factory would never try to exert their influence and try to keep their cheap source of hydro power, or keep the methane flowing. /s

I will make sure to bring popcorn for the future culture wars between ETH and BTC, now that their incentives are so divorced.

> Of course, the owners of the Bitcoin factory would never try to exert their influence and try to keep their cheap source of hydro power, or keep the methane flowing. /s

You see how you just substantiated my argument that Bitcoin naturally ends up favoring renewables, linking up the most efficient use of energy?

It’s not like there is (or should be) a limit on renewable energy production.

> For something that is supposed to "change the System" it for sure is often pitched like the System can never change. That missing (enforcement of) regulation makes it economically beneficial to just vent methane without even flaring, is not something to celebrate. It's nice that the incentives lined up decently, this time. We should work on fixing the incentives so the methane can stay in the ground where it belongs. Don't dig that well.

Bitcoin was never billed to change that system, and yet it is anyway.

You're trying to let perfect get in the way of good, failing all modes of consensus until the world is uninhabitable, while this just works and fulfills the goals of all political parties at the moment: reducing emissions and being economical.

Bitcoin mining on existing fracking sites is a stop-gap solution at best, right now nobody is making new wells with the perk of adding miners or renting space to mining firms. Right now, the fracking operations are just meeting their climate goals, the captured state regulator no longer needs to be in the awkward position to rubber stamp emissions exemptions, the governor no longer needs to run interference for the whole fracking industry. Its only a stop gap solution because if 10x more wells were made after a 90% drop in emissions, then we're at the same place we were, so if you begin seeing that then be vigilant about that. But thats really not a bitcoin issue, thats a fracking issue that you're putting on bitcoin because you've had zero influence your entire life on the oil and gas sector, the separate higher standard doesn't make sense though, as - for now - this stop-gap solution is here and working. "oh no but its bitcoin, that other thing I spent so much of my energy hating" cope, my guy. this is working.

> Bitcoin naturally uses the cheapest energy it can find

As opposed to everybody else, who naturally use the most expensive energy they can find.

In order to argue that wicked corporations are wasting massive amounts energy for profit, yes this requires the idea of finding very cheap power, i.e. something like off-peak or excess.

miners are driven purely by the market to find cheap energy sources

its not altruism by any means and it doesn't matter

this is what happens, frame it any way you prefer, it doesn’t really matter as the constant is that North America is the best market for this

all levels of government are noticing and investors are noticing and they all need the sustainability framing, I don’t think I had made any framing in my reply

Articles that talk about the “amount” of energy bitcoin mining uses are going to keep coming out, if you’re more familiar with that framing, the source of energy has been more important than the amount for a very long time, to convey environmental impact, and this is just one example

I don't think I get your point. To me, any renewable power going into bitcoin mining, is contributing nothing except "securing the blockchain".

I don't even have a stake in this game, except living on the same planet as everyone else. And it's getting warmer. Any power spent on bitcoin is power not spent solving more practical problems elsewhere.

As I wrote in my other reply to your other comment

You're trying to let perfect get in the way of good

The power is never ever ever going to be spent on anything else, the energy used would be purely hydrocarbons in the atmosphere. This is what is happening for decades. Absolutely zero sentiment and protest has or would change that.

Bitcoin mining has changed that. If that is what makes you think of a solution that nobody else has thought of for decades, just because bitcoin makes your tummy ache, be our guest.

> To me, any renewable power going into bitcoin mining, is contributing nothing

I also think it will be helpful for you to get the terms accurate, this benefit comes from stranded energy, using this energy is more sustainable. This doesn't necessarily mean renewable or clean, it can though. Since we are talking about reducing methane emission, this isn't a renewable or clean source, it just has 90% drop in methane and hydrocarbons going into the atmosphere while stripping them apart in catalytic converters just like cars do. This is good!

Exactly and a play for corporate strategy.

> Reducing methane emissions is vastly more effective at preventing climate change than reducing co2 emissions.

This statement caused me to do some light research. I discovered that methane is 25 times as potent as carbon dioxide at trapping heat in the atmosphere.

https://climateer.substack.com/p/methane-lifetime

> Methane emissions decay gradually, with an average lifetime of about 12 years (“perturbation lifetime”, which is what matters for climate purposes).

> This will increase by roughly 35% if methane concentrations double, or decrease roughly 25% if concentrations return to pre-industrial levels.

Methane is actually 150x-ish worse than CO2, but it breaks down over time. Ameliorated over a long time it's 25-30x worse.

Rough part is that breaking down methane depends on OH radicals in the air, of which there are a fixed amount. The more methane there is, the slower methane is broken down. If there were a sudden massive release of methane, it would stay at that 150x potency for a very long time. Fun!

> OH radicals in the air, of which there are a fixed amount

To make the complexity really mind-blowing, no, the amount is not fixed. It varies, and temperature is one of the largest factors. But it's not a simple relation, because air currents are also very important, and temperature also changes those.

Messaging and information on actual greenhouse gas emissions and impact have long been god awful, often to the point of borderline misinformation. It's a source of tremendous frustration, in part because spending enormous political capital solving the wrong problems is actively counter-productive

Which is why oil production without a gas connection tends to flare the methane. With the renewable transition we will in a not too distant future just leave the oil in the ground instead.

https://www.iea.org/reports/flaring-emissions

Closer to 200. Which is why not eating beef has more impact on environment than the car you drive.

> Anyone could use vast amounts of electricity as long as they are willing to pay the price for it

That would be so if all externalities were priced in properly, which is not the case.

Can you prove out the math on that one please?

Oil companies are printing their own money now? God I hope you made that up.

Reply on news.ycombinator.com