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Bitcoin’s energy usage is huge – we can't afford to ignore it

theguardian.com

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Re: Bitcoin’s energy usage is huge – we can't afford to ignore it

#71

Post by jamez1 »

lojack wrote: post #62
jamez1 wrote: post #35

High electricity consumption is the trade bitcoin made in its design for a stable money supply, it's not an inherent problem with cryptocurrency.

It's the tradeoff made for a distributed money supply. Satoshi just as easily could have made a fixed supply of money which is also stable and doesn't rely on proof of work. That said, at the time, I don't think this was really the tradeoff being made. When bitcoin originally came out, proof of work was the only decentralized consensus mechanism available.

Having a distributed money supply makes it unstable, since you've tied an incentive to creating bitcoin.

Money supply would then be equal to how many miners there are without adding a difficulty, and the amount of bitcoins would go through the roof. Difficulty was clearly added as a solution after this to keep the money supply stable.

Note I didn't say it's necessary to waste electricity to have a stable money supply, only that the reason Bitcoin does is because it keeps it's money supply stable.

Re: Bitcoin’s energy usage is huge – we can't afford to ignore it

#72

Post by andirk »

wmf wrote: post #66
mesozoic wrote: post #33

The idea is the switch to proof of stake will likely fix this particular problem if it works.

A lot of people seem to be ideologically opposed to proof of stake; they define "works" in a very narrow way that proof of stake can never satisfy.

Work as a concept is fine, but that massive amount of work having a direct correlation to massive amounts of energy consumption isn't ideal.

Re: Bitcoin’s energy usage is huge – we can't afford to ignore it

#73

Post by andirk »

Lxr wrote: post #56

Is there a reason the proof of work can’t do something more useful, like protein folding?

Look into Primecoin (I have no stake) where the work done is to find the next largest prime number. This trudging work can be useful if we will it!

Re: Bitcoin’s energy usage is huge – we can't afford to ignore it

#74

Post by drukenemo »

It's a problem because it's a digital currency? Because many other things that could be considered "surpeflous" also consumer massive amount of electricity. Or for example (not superfluous but potentially equivalent) how much electricity all the global banking system uses? I bet that it's more than "a nation".

Re: Bitcoin’s energy usage is huge – we can't afford to ignore it

#75

Post by pdemporg »

AlexandrB wrote: post #53
pdemporg wrote: post #21

What a ridiculous article. Household air-conditioning wastes energy. Running your television wastes energy. Serving up webpages for The Guardian is apparently a waste of energy. If the problem is that the price of energy does not encompass the negative externalities it creates, then we need a Pigouvian tax on it. The price rises, and miners reassess whether or not they are profitable in a carbon-neutral world. The au…

> What a ridiculous article. Household air-conditioning wastes energy. Running your television wastes energy. Serving up webpages for The Guardian is apparently a waste of energy. All of these provide some form of value to the user. I have yet to see what value bitcoin provides over USD. Okay, so we now have another medium of exchange, so what? Why is that worth the 1000x energy consumption per transaction over payme…

Thank you for actually engaging! Let me preface this by saying I'm usually the first to deride Bitcoin as a payments platform. However, using energy to mine Bitcoin does provide value to the user - profits over and above what the power bill and ASICs/GPUs cost. And you're right - for a payments platform, it is a regression in terms of energy consumption.

That, however, does not change the fundamental issue - the severe underpricing of emissions-heavy power generation. The externalities that the author is so worried about (in the form of climate change) are not priced into the going rate for electricity. Blaming bitcoin miners is silly - if I pay for my power, I should be able to use it however I see fit. The alternative leads to absurdity, such as a law that states your aircon may be set no lower than 22C in summer, as anything more would be "a waste". I pay for it, I use it, bugger off.

The external social cost of electricity generation needs to be internalised into the private end-cost - a carbon tax or an ETS. Pick one, follow through, and stop blaming rational agents for acting rationally.

EDIT: Spelling

Re: Bitcoin’s energy usage is huge – we can't afford to ignore it

#76

Post by lubos »

withdavidli wrote: post #49
lubos wrote: post #30

Earlier quoted context omitted.

According to https://digiconomist.net/bitcoin-energy-consumption , Bitcoin is currently at 42 TWh. That's over 20 million tonnes of CO2. If we assume energy costs to produce annual supply of new banknotes and coins in entire world is at 1 TWh. You see how insane energy consumption of Bitcoin really is. And that's comparing an entire money supply of the world to single cryptocurrency. Banks cannot be part of the equat…

Fair point. All I was trying to show was that currencies like the Euro or USD has greater than zero energy usage to create/distribute. I don't think BTC will stay the top crypto if it cannot resolve its current issues (though new ones will come after). Articles like takes stance, whether they know it or not, of this is here to stay for a long time and we need to deal with the ramifications. If that is true, more peop…

> Fair point. All I was trying to show was that currencies like the Euro or USD has greater than zero energy usage to create/distribute.

How many cash transactions occur in the world in 1 year? The number must be over 7 trillions assuming average person on this planet makes 1,000 cash transactions per year.

Now, let's divide 1 TWh by 7 trillions, we will get 0.14 Wh per cash transaction which is equivalent of having 60W light bulb switched on for about 8 seconds.

Considering one Bitcoin transaction currently consumes 345 kWh of electricity. That's equivalent of having 60W light bulb switched on for about 8 months.

So yeah, technically you are right. 8 seconds is not zero. But it's hell of a less than 8 months.

Re: Bitcoin’s energy usage is huge – we can't afford to ignore it

#77

Post by spraak »

llamataboot wrote: post #20
spraak wrote: post #2

Sincere question: what's the energy usage for e.g. USD or EUR?

Irrelevant question though, in many ways. There's simply no chance that bitcoin is replacing fiat money. I realize that offends the bitcoin True Believers, but fiat money is not going away unless nation states go away, and if that happens there's some more issues we have to deal with than the cost of a transaction.

Whether it's relevant or not wasn't my concern, as I wasn't even trying to propose that any cryptocurrency replace fiat. I was simply curious.

Re: Bitcoin’s energy usage is huge – we can't afford to ignore it

#78

Post by lojack »

jamez1 wrote: post #71
lojack wrote: post #62

Earlier quoted context omitted.

It's the tradeoff made for a distributed money supply. Satoshi just as easily could have made a fixed supply of money which is also stable and doesn't rely on proof of work. That said, at the time, I don't think this was really the tradeoff being made. When bitcoin originally came out, proof of work was the only decentralized consensus mechanism available.

Having a distributed money supply makes it unstable, since you've tied an incentive to creating bitcoin. Money supply would then be equal to how many miners there are without adding a difficulty, and the amount of bitcoins would go through the roof. Difficulty was clearly added as a solution after this to keep the money supply stable. Note I didn't say it's necessary to waste electricity to have a stable money supply…

Difficulty adjustment is used to keep block times stable. Without this adjustment block times would continue to go down until you would eventually end up with a chain that has much more frequent forks of greater lengths. You eventually end up with a state where the current head becomes indeterminate and all sorts of security issues become possible, including double spends.

Bitcoin could have easily based block rewards on timestamps to keep the supply of money consistent, similar to how the current difficulty is calculated.

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