BitcoinEmissions – A project to calculate CO2 emissions of mining bitcoin
github.com
github.com
[1] "On average, one broad leaf tree will absorb in the region of 1 tonne of carbon dioxide during its full life-time (approximately 100 years)." http://www.carbonfootprint.com/plantingtrees.html
Ecosia is helping people help the environment. Currently planting trees in Burkina Faso as a part of Great Green Wall.
Full disclosure: I work at Ecosia.
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Also a major fraction of trees, ballpark 50+%, have leaves and drop them once a year, and the leaves contribute to topsoil.
Even if a forest burns, the burned trees create ash which has carbon and adds to topsoil.
Some of the topsoil gets washed into rivers and lakes, becomes mud, gets covered over by more mud, and, thus, essentially buries its carbon.
There is more that is similar: a major fraction of the surface of the earth has, within 1000 feet deep, a lot of limestone, and that is partly, largely, or mostly just old sea shells where the animals pulled carbon from the water or what it ate and converted it to calcium carbonate, that is, buried the carbon (disclaimer, I'm no geologist).
In simple terms, basically, net, the earth's biosphere grabs and buries a lot of carbon including CO2 from the atmosphere.
Note: Nowhere here have I made a remark of any kind about the effects on climate of CO2 in the atmosphere.
You'd have to plant 1.6 trees every year, in perpetuity and keep all of them alive for a century.
The obvious solution is to plant an entire forest to ensure that new trees grow to replace old trees.
n CO2 + n H2O + photons → (CH2O)n + n O2
carbon dioxide + water + light energy → carbohydrate + oxygen
Even if the single oxygen per carbon stayed buried, we'd lose a maximum of 400ppm[1] of oxygen, of currently 20.95 % volume of oxygen. That does not even affect the last digit of that rounded number, and the number is normally not given with more digits because it changes with the season and stuff.
No carbon dioxide in the atmosphere would probably be really bad for further tree growth (among other things), so it is naturally limited.
The problem is not that something consumes energy if there are people willing to pay for that energy. The problem is how we generate electricity. It's getting better, but it has nothing to do with bitcoin.
The mathematics behind the individual transactions and ledger maintenance are relatively simple. Getting computers to do this part requires almost no effort. It's the deliberate 'find a needle in a haystack' part of the protocol (which is there to ratelimit the creation of bitcoins) that wastes all of the energy.
The fact that this needle-finding task is deliberately difficult, wasteful and time-consuming is the horrific part.
That's something which is actually handled fine in fiat, believe it or not.
Nor is Bitcoin "low cost": Even with the price in the dumps recently a Bitcoin transaction still averages about $10 per transaction.
Nor can Bitcoin feasibly handle international commerce, given that it's still capped in theory to 7 transactions per second, and in practice to 2-3 transactions per second, and this total capacity also has to support non-remittance transfers such as the normal exchange hackings (like BTER today) and SatoshiDice (which can take up about half of all Bitcoin protocol capacity on some days).
Not if you're Wikileaks. Bitcoin was (probably) built to solve the kind of problems they had getting money transferred to them. there's a cost associated with a low-trust network.
How does this make it not low cost? Transferring that $10 still only costs $.02
>capped in theory to 7 transactions per second
Not 7 transactions but 7 settlements per second, which clear in under 60 minutes. You can have as many binding transactions per second as you want off the chain.
If you're willing to engage in transactions off-chain then you might as well use PayPal or other fiat. The blockchain and the protocol surrounding its maintenance is central to Bitcoin and its philosophy, it's not merely some 'nice-to-have' feature that should be jettisoned as soon as it becomes inconvenient.
After all, the blockchain is the one and only authoritative Bitcoin ledger, everything else in Bitcoin is an IOU, no matter how sensible it might seem, which is why Bitcoin itself will reject a transaction if it's not included into a mined block in time.
And either way, way to ignore the in-practice 2-3 transaction per second limit.
Assuming max TPS rate of 3tps, a 10-minute block will contain 3 * 60 * 10 = 1800 transactions. Each block generates 25btc, which is equivalent $6125 at the current $245 price.
Each transaction therefore costs $6125 / 1800 = $3.40.
Of this only a small amount is paid for the by the person who creates the transaction, the rest of paid for by those who hold Bitcoin.
I always find it ironic that the illusion of low fees per transaction in Bitcoin is subsidized by the ongoing inflation of the money supply. Apparently inflation is acceptable when it helps evangelize the product you're trying to sell, but it's not acceptable monetary policy in any other situation.
How? Are we comparing transaction fees?
The issue with bitcoin when it comes to cost is that unlike traditional centralized systems, cheaper energy or more efficient computers don't translate to making it cheaper to run the network. What happens is that miners get to afford more hashes per second and the overall hashrate goes up, with the mining difficulty also going up to compensate, making mining even more wasteful.
The alternative is to get by without it. There are fiat currencies, proof of stake and much more.
Capitalism of any kind always seeks to exploit externalities. The cost of producing electricity is currently not reflective of the true future cost of the pollution. That is the externality. Every metric in a capitalistic system is designed to reward the exploitation of externalities.
You could look at a space heater and say: wow, it just wastes all this electricity, deliberately causing resistive elements to heat up. Well, of course, the heat is intended. With bitcoins, the extra calculations are a part of what makes everything work.
It goes on and on. Most of that stuff, bitcoin doesn't have to do at all.
In essence, Bitcoin's harm to the ecosystem is almost directly proportional to Bitcoin price.
Just imagine everyone using this more efficient hardware to save money on electricity, not increasing the mining difficulty. Eventually you'll have the risk of a single entity (e.g. a government organization) just buying enough hardware to have more than 50% of the hashing power, taking over the whole blockchain.
The second argument is something that is independent from the energy problem. The danger always exists, that some entity is taking over the blockchain.
That's just the creation side. On the use side, there are broadly different costs in using and maintaining gold-based, crypto-based and fiat-based money systems. I would like to see others way in on this.
You can essentially include the entirety of operations of the bank, and the lifestyle of the people employed by the bank. There are literally millions and millions of people throughout the world who do nothing more than manage and monitor a system that moves numbers around and deals with proxy derivatives like bills and coins.
Not that bitcoin is a panacea -- personally it seems completely untenable -- but if we want to talk waste, the current regime is extraordinarily wasteful.
Its a bit pedantic, but please don't say bitcoin when you mean cryptocurrency, as bitcoin is a pretty bad one.
And that's exactly the whole point, and is the very reason it's working.
> a pyramid scheme
Then every other successful investment is a pyramid scheme. Gold is a pyramid scheme! Storing food for catastrophes is a pyramid scheme! Paintings are a pyramid scheme!
What makes bitcoin into kind of a pyramid scheme is that right now a big part of the reward for miners is the 25 bitcoin you get from mining a block. Only a very small fraction comes from the transaction fees. The only way to keep bitcoin stable is by having a constant supply of new users buying into bitcoin by acquiring those fresh bitcoins from the miners.
https://blog.ethereum.org/2014/07/05/stake/
https://blog.ethereum.org/2015/01/10/light-clients-proof-sta...
https://blog.ethereum.org/2015/01/28/p-epsilon-attack/
Achievement unlocked!
If there's a chain fork (which is the important corner case that Proof of Work is excellent at dealing with), there is no incentive for a Proof of Stake holder not to "vote" on both forks. This reduces network security substantially.
It also leads to the rich gaining more and more wealth over time.
Proof of Work leads to moderate energy consumption, but it's negligible compared to the utility of a Bitcoin.
I wonder how much CO2 it takes to make around $250 in cash?
Similarly, rising prices is an effect of inflation, and not inflation itself.
Your confusion is understandable: over the last decade or so, several high profile "macro-economists" have subtly but suddenly began misusing these terms as you just did, so much so that dictionaries and textbooks have begun to follow suit.
In any case, most proof-of-stake coins inflate per their mechanism, and do so at a generally faster pace than proof-of-work coins. Moreover, proof-of-stake advocates believe that their coins' mechanisms favor a healthier and more predictable distribution of units, rather than the volatile arms race of proof-of-work.
I think a lot of climate change action includes to a degree a reduction in energy usage - but I don't see that happening any time soon. Unless computers get dramatically more efficient in their energy usage, energy demand will continue to grow. Renewable energy source growth will have to beat it.
Or developers get dramatically better at writing efficient code. Or both.
I guess this is still substantially higher than for normal bank transactions -- but how much? Normal money and living also releases CO2. When you use your big car to drive to the bakery 0.2 miles away, you release a lot of CO2 and all to buy some rolls worth 0.0...? Bitcoin.
When I understand the system right, the number of transactions possible per generated Bitcoin should also rise in the same speed (or higher?) as the CO2 release does.
This transparency allows us (humanity) to actually have discussions on how we can go about managing our resources in the 21st century.
What is the total CO2 cost of <Large Payment Processor X>? No one knows - the network is opaque since that kind of information is a competitive advantage. Which is fine, the core competency of the payment processor isn't understanding their CO2 footprint.
However, from a policy maker point of view, a system where total resource cost is verifiable by a third party audit makes for a compelling argument in favour of the open network.
If your car runs on electricity, is taking your from place A to B waste of energy?
That energy is used to secure transactions. And even with its decentralized nature which is usually less efficient that centralized systems (but more reliable, and without single point of failure), it seems to be so far doing it more efficiently than banking systems.
Financial systems is one of those things we do because as human beings, we're handicapped in terms of coordinating with each other. We depend on external feedback loops to do anything as a big group. Perhaps if we were smarter, we could all just agree to do things for common benefit. But we're not that smart, and hence we need an economy. Maintaining it takes energy, but it should be seen as civilization upkeep costs - something we have to pay, but would do well to reduce as much as possible. It's a trade-off between amount of energy we use and the utility we get from it, and so it's fair to call unneccessary energy expenditure a waste.
The reason people call Bitcoin a waste of energy is that because it makes it clear how ridiculous the whole thing is - you're literally throwing away useful resources to generate abstract numbers that exist solely because we suck at coordinating with each other. In case of traditional banking the energy expenditure is hidden under many layers of indirection (the mentioned AC costs, for example), so it's not that obvious to people.
The other problem with Bitcoin is that resource usage is - as far as I understand the mechanics of that cryptocurrency - locked in a zero-sum game. You need to throw more and more electricity away just to keep up with other people doing exactly the same thing. This is the worst case of waste imaginable - because you can scale up your energy use ad infinitum without any marginal benefit. That's why also political campaign and advertising is mostly waste - everyone's effort just goes to cancel out the effort of everyone elses.
We'd do well as a civilization to reduce our upkeep to the minimum required.
(1) I am of course ignorant of peak loads here.
Not peek as in to look.
This is one of those annoying misspellings that is making the rounds recently, especially on reddit.
The task is not to have some spreadsheet with transactions that you could have of course on the oldest computers. The task is to provide a global payment system that people trust.
So obviously we're not going to use RPi. We need some solid machine. No problem, best server is cheap for the global payment system.
Well we also need reliability. So at least a few of these machines.
Real reliability, so actually they must be in some separate geographical locations.
At this point there are already some problems with consensus but they can be solved since we control the whole system. Cool.
But what if one location is compromised? We have to care about that, our global payment system must not be destroyed by servers being compromised in any way.
So first, we need some really good software security. Solvable, it can be open source, maybe people who depend on it will review it. Then we need hardware security. Security at these locations must be really good. It's global so we might actually want to be able to protect ourselves from some country's army - that bumps cost of these facilities a bit. Actually, a bit too much. We want to be independent from governments. They have a lot of money, it's really hard to protect physical locations.
Then there's the trust problem. Who runs it? Some organization I assume that have some cut of the cost of the whole operation. I won't even dive into details here. Throughout human history there probably was not a single organization that could be trusted, objective and rational once it gained enough power.
And to make it complete, unrelated to your comment, some people are mentioning proof of stake. Apart from the fact that it doesn't seem to provide any provable security, you have a trust problem again. Proof of stake is based on the assumption that most holders (in terms of money) want bright future for the currency. I wouldn't assume that. I'm happy that it is completely irrelevant for me who is Satoshi and what is she going to do with her coins.
And then, there's initial distribution problem...
I don't really see any more efficient solution to what Bitcoin currently provides. It is of course probable that such solution will appear in the future, but the network effect is huge. It's really first time in history we have such kind of money and Patrick Byrne (overstock CEO) explains it nicely in some of his talks. So even if such technology appears, I think it will get implemented in what is currently called Bitcoin (sidechains seem to be some baby steps of that).
(OK, I got a bit of topic, but these WASD keyboards are such a pleasure to type on.)
The price of Bitcoin is dictated by greed and speculation, not by its utility.
On a scale of one to ridiculous, bitcoin does not even come close to the stuff crazy people do.
Today, if I go to the bank and request a large withdraw from my savings account, I am required to provide a explanation for the withdraw and the teller can deny the withdraw at their discretion. They can at any point close accounts and hold money indefinite. They collect private and highly sensitive information about customers lives in secret for purposes of data mining and sharing it with private organizations and governments.
The price of the modern banking system is to me very high, higher than the waste from e-currencies. If it was an option, I would use the banks of old.
http://commons.wikimedia.org/wiki/File:Dunbar_armored_car.JP...
How much is released keeping the rest of the currency system running?
Bitcoin may or may not win on these questions, but if we're going to ask them about Bitcoin, we should also ask them about the way we're doing it now.
What I would find interesting is to compare the power consumption per bitcoin transaction with other currencies.
Power consumption per transaction will probably always stay pretty low. Because one way or another the users of Bitcoin have to pay for them. And they won't use it, if it is expensive.
Energy efficiency is one of the few areas I think should be handled by the government rather then by the individual. If using up energy is cheap but bad for the environment: tax energy higher. Everything will fall into place then in just the right proportion.
I don't think that's a particularly useful characterisation of the situation. It makes it seem like some kind of "processing" on the transactions is where the real computationally expensive work occurs, with a side-effect of creating bitcoins.
In reality, mining is pure mathematical busywork. A miner spends time trying to find a valid block (a valid hash with enough zeros at the start, as determined by the current difficulty level). This is a mathematical task unrelated to any "processing" of transactions, and is independent of the number of transactions or their complexity.
While the miner is performing this busywork (trying hash after hash waiting for a valid one to come up) a number of transactions are occurring and are flying around the network. The miner is noticing these and caching them up. Eventually, if the miner should "find" a valid block, he publishes it to the network, and crams into it all his cached up transactions.
So creating bitcoins isn't really a side-effect of processing transactions, per se. Rather, both the approval of transactions and the creation of bitcoins are side-effects of running a mathematical algorithm (mining).
As such I probably wouldn't usually describe transactions as being "processed" at all (which would tend to imply computation related to the transactions themselves), but that they get "included" into a mined block.
>I don't know how many transactions are currently processed when one Bitcoin is generated
https://blockchain.info/charts/n-transactions-per-block
That graph shows the number of transactions per block over time. You could then divide by the block reward to find transactions-mined-per-bitcoin-generated figure.
>Power consumption per transaction will probably always stay pretty low. Because one way or another the users of Bitcoin have to pay for them. And they won't use it, if it is expensive.
Well the mining "difficulty" level (which essentially dictates how much power is needed on average to find a block) is controlled by rules programmed into the bitcoin system, in such a way that the higher the total mining power contributing to the network, the higher the difficulty (adjusted every 2016 blocks, so that the entire mining network on average discovers a block every 10 minutes). Here is a graph of how difficulty has evolved over time, as the aggregate mining power has ebbed and flowed https://blockchain.info/charts/difficulty
ps: I think a satellite that is dedicated to compute Bitcoin with solar energy (no atmosphere/night to bother out there) would be awesome!
Why is P=NP unsolved? Nobody seems to put proportional effort in that.
Oh wait, they do, but J. Random Citizen doesn't know about it...? Huh!
Flying to the moon was also a hard problem, but resources got allocated and things got done.
If I'd see that 5% GDP would go into the project with proper focus and aim, I have the feeling it'd be faster.
PS: and the money could be made with carbon taxation to push fossil fuel cost into perspective.
[1] https://www.academia.edu/7666373/An_Order-of-Magnitude_Estim...
[0] http://toom.im/
This is one of the main reasons I have been a big supporter of Peercoin. Peercoin eliminates the need for massive energy consumption and dedicated server farms. Both of these features will be very important in the future.
http://en.wikipedia.org/wiki/Peercoin
Bitcoin is a huge innovation, but it can be considered the first major crypto-currency. In the long-run, alternate solutions like Peercoin will play a larger role in the market.
Full disclosure: I have investments in both Bitcoin and Peercoin.
Anyway, it's a very neat idea, and it'd make all this much more energy-efficient while still costing burners quite a lot (and hence making it expensive to try to attack the network).
I believe the author merely looked at the mean of the CO2/KWh stats on Wikipedia for all generation. That leads to misleading numbers. For example, I recall hearing that a large number of miners have set up shop in Iceland, where the electricity is all low-impact geothermal (and cheap).
To get accurate numbers, one would need to figure out what types of electricity sources the miners are ACTUALLY using.
I think about the wars of Alexander III of Macedon, the Mongolian wars, and the wars of Rome, and wonder how they could have existed without fiat money. Or is the argument that they would have been more successful with fiat money? For that matter, how would the Spanish conquest of the Aztecs and Incans been enabled by fiat money when the accumulated wealth of those empires effectively gave Spain the ability to mint its own commodity money?
In "Debt: The First 5, 000 Years", David Graeber makes a convincing argument that the introduction of commodity money helped the king raise larger armies. The king pays soldiers in gold or silver, then requires people to pay taxes in the same. Otherwise the soldiers, who are effectively strangers, don't have access to the credit economy of small communities.
I still think that using proof of work as a part of a consensus algorithm is terribly wasteful. The rich get richer by way of buying energy in an arms race and the externality is pollution.
But seriously, don't call those "alternatives" if they are not secure. There is no known replacement for PoW.
Let's compare like to like.