1. Data centers & Bitcoin are using about the same amount of electricity, about 2% of the US energy production each
2. AI is a subset of data center usage, but expect this portion to drastically rise and drive up the energy usage
3. Data centers & AI are continuingly becoming more efficient while Bitcoin becomes less so by design, L2 crypto is an efficiency play for crypto more generally
It looks like estimates for global energy production are over 30 TWh last year, so that would mean bitcoin is around 1/3rd of one percent of total global power usage.
Note that’s just bitcoin, not all of crypto.
That means the 2% claim is an order of magnitude lie.
Ironically, this nature can actually fortify the electric grid in some areas, such as Texas. Bitcoin mining businesses have discovered that the unreliability of the existing grid can be mitigated through vertical integration - they create renewable power generation facilities, and when the cost of electricity on the grid is low (because demand is low and supply is high), they use their own renewably-sourced energy for next to nothing.
When grid conditions deteriorate in Texas' deregulated energy market, wholesale electricity prices surge, as those are times when demand approaches or exceeds supply.
When that happens, the electricity being generated by these vertically integrated companies is worth more being sold to the grid than it's worth being used to mine bitcoin, so the miners all shut off (within milliseconds, as this is all automated), and the power that location generates starts getting sold to the grid, which increases supply, helping to lower the electricity prices, and to keep the lights on for everyday people.
It's not a magic bullet that fixes the entire grid, but there is a growing body of evidence saying that it helps grid reliability in Texas more than it hurts, and these vertical integrations are overwhelmingly done with renewable energy sources.
I'm sure the location-agnostic aspect of Bitcoin mining does lend itself to deployment in places where power is plentiful, but where there is little local demand, and the cost of transporting that power far away is cost prohibitive, though I don't have specific example of that.
> I'm sure the location-agnostic aspect of Bitcoin mining does lend itself to deployment in places where power is plentiful, but where there is little local demand, and the cost of transporting that power far away is cost prohibitive, though I don't have specific example of that.
https://www.coinmint.one/ is a specific example of that. Power is delivered directly from the Moses-Saunders dam to a shuttered aluminum smelting plant. Sending the power anywhere else, is cost prohibitive due to the remote location and low local power needs. Connecting it to the grid would overwhelm what is there, so new construction would be needed.
If their numbers and methodology are correct, bitcoin mining energy use in the US is somewhere between 0.8-3.8% of US electric generation. However, we don't know how much of this mining is actually connected to the grid. There are some off grid operations, like waste methane harvesters. The US government is starting to collect this data, so we might have more precise public information soonish.
If the price of bitcoin were to double, the (collective) rewards to mining double, too, and so does the environmental damage. In about 4 years, the reward for mining a block is scheduled to halve, and the environmental damage will at that time be about half of what it is now (a few months after the previous halving) provided the price of bitcoin does not change. All the miners know exactly when the reward is going to halve, so as the halving-date approaches, about 4 years from now, miners will invest less and less in mining hardware and other capital improvements, which "smooths out" the damage so that it decreases somewhat smoothly between now and then instead of suddenly halving on the day the reward halves.
And, of course, let's not discuss:
- tourism + air travel
- increasingly large cars far bigger than required from a utilitarian perspective
- luxury good production
- theme parks/fireworks displays
- cruise ships
Etc.
Bitcoin/crypto opposition is 95% pushed by embedded financial interests that will use any lever to protect their control over money and the power it gives them.
It's not really about efficiency as it's about computing power and available miners.
If it's not economically beneficial to mine (costs more than reward) miners will stop mining leading to the difficulty decreasing which in turns makes it profitable to mine again.
one of the major key principles behind bitcoin is that the hashing becomes more difficult over time.
hardware can't constantly keep parity with difficulty.
Now, there has been a strong positive correlation between time and total network hashrate, so for all practical purposes, difficulty has (and likely will continue to) increase over time.
That said, if half of all miners went offline overnight, block times would approximately double, and the next difficulty rebalabce would go dramatically lower in an effort to maintain 20 minute block times.
e.g. you can't bullshit your way into finding this number, 000000000000000000024394a1f3cb1a0c16e601a2bd5910635bb2468d2ba316, without expending a huge amount of energy, while you can verify very quickly how many guesses it statistically took to find it.
An attacker can't just use words to spin a manipulative narrative, or cut of the head of an organization with a targeted attack. They actually have to commit massive numbers of joules and bit flips. And if an attacker actually acquires that much control over mining power, suddenly they realize they're too heavily invested in the network to want to harm it.
In the age of increasing generative AI, proof that you have some tie to real world cost is an increasingly valuable trait.