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Bitcoin Energy Consumption Index

digiconomist.net

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Re: Bitcoin Energy Consumption Index

#31

Post by Analemma_ »

snagglegaggle wrote: post #26
lucisferre wrote: post #4

This seems completely outrageous to me. I had seen similar numbers thrown around casually in the past but still found it hard to believe to be true, (despite being pretty bearish on Bitcoin myself). This seems to provide some pretty detailed evidence, analysis and validation directly addressing criticisms. It seems pretty thorough. Is there any more to discuss on the topic of Bitcoin being outrageously wasteful? Or i…

Perhaps look at it another way: this is what people will pay to avoid tyranny.

That's not an accurate statement, since the pollution costs of Bitcoin are an externality not being paid by the people using it. It's more like Bitcoin users are dumping costs on the unconsenting public to avoid the "tyranny" of AML/KYC banking regulations.

Re: Bitcoin Energy Consumption Index

#32

Post by xyzzyz »

steve19 wrote: post #2

It says a single transaction generates almost 300kg of CO2. Surely not. 95g of e-waste also seems incredible. And 600 kwh of energy per transaction? Really. Edit: based on a cost of electricity at $0.1/kwh, and assuming bitcoin operators break even and are rational, one transaction costs less than 3kw of energy: https://bitcoinfees.info If it cost 600kwh, we would assume a transaction would cost at least $60. Electri…

An average block has something like 2500 transactions in it. It means that there is about 1-2 transactions per second. Bitcoin network is running at 100 million TH/s. Modern mining hardware does 10 GH/Joule = 10^10 H/J, so 100 million TH = 10^8 * 10^12 H = 10^20 H is 10^20/10^10 = 10^10 Joules. 1 kWh is 3.6 * 10^6 joules, so 10^10 Joules is something like 3 * 10^3 kWh, so 3 MWh. One ton of coal produces something like 2 MWh. So yeah, assuming some of the electricity is not coal, the numbers do add up.

Re: Bitcoin Energy Consumption Index

#33

Post by TheSpiceIsLife »

arcticbull wrote: post #17
TheSpiceIsLife wrote: post #3

I saw this a couple days ago when @arcticbull mentioned it here https://news.ycombinator.com/item?id=21256112 Jaw dropping. Converted to Telsa Model S miles as per https://en.m.wikipedia.org/wiki/Tesla_Model_S Comes out to about 2000 miles or 3200 kilometers for one Bitcoin transaction. Astounding.

I mentioned it in a couple of threads and people seemed surprised, so I figured it would be worth surfacing more broadly as its own post.

Definitely agree.

I have some rather left-leaning friends, vegans and all, who recently mentioned they were going to take a punt on Bitcoin.

Might have to show them this.

Re: Bitcoin Energy Consumption Index

#34

Post by eindiran »

The way the model works is very interesting:

1. Calculate total mining revenues, across all miners in the Bitcoin network.

2. Estimate that, on average, miners spend 60% of their revenues on electricity. (I believe the origin of this number are the calculations in this paper [0]).

3. Find out how much miners pay per kWh on average.

4. Convert the costs into a consumption.

There is some discussion of the origin of the assumptions, and some criticism and validation here [1] and here [2] respectively.

[0] https://www.cell.com/joule/fulltext/S2542-4351(18)30177-6

Specifically, see the calculations using Antminer S9 in Table 2.

[1] https://digiconomist.net/bitcoin-energy-consumption#assumpti...

[2] https://digiconomist.net/bitcoin-energy-consumption#validati...

Re: Bitcoin Energy Consumption Index

#35

Post by roywiggins »

aeternum wrote: post #24
lucisferre wrote: post #4

This seems completely outrageous to me. I had seen similar numbers thrown around casually in the past but still found it hard to believe to be true, (despite being pretty bearish on Bitcoin myself). This seems to provide some pretty detailed evidence, analysis and validation directly addressing criticisms. It seems pretty thorough. Is there any more to discuss on the topic of Bitcoin being outrageously wasteful? Or i…

Wasteful compared to what though? How much energy, human capital, and resources are consumed by the banking industry? If (and big if) bitcoin is able to replace a significant fraction of the banking industry it will be extremely efficient in comparison. Per-transaction measures isn't the right metric since the Bitcoin blockchain can still be successful as a reconciliation backbone without being used for small everyda…

> Per-transaction measures isn't the right metric since the Bitcoin blockchain can still be successful as a reconciliation backbone without being used for small everyday purchases.

This idea has been around the corner for a while now. How likely is it really, how long will it take, and what will adoption look like? Until it happens and is popular, it seems fair to discuss how much a Bitcoin transaction actually costs...

Re: Bitcoin Energy Consumption Index

#36

Post by TylerE »

snagglegaggle wrote: post #26
lucisferre wrote: post #4

This seems completely outrageous to me. I had seen similar numbers thrown around casually in the past but still found it hard to believe to be true, (despite being pretty bearish on Bitcoin myself). This seems to provide some pretty detailed evidence, analysis and validation directly addressing criticisms. It seems pretty thorough. Is there any more to discuss on the topic of Bitcoin being outrageously wasteful? Or i…

Perhaps look at it another way: this is what people will pay to avoid tyranny.

More like to choose a different tyrany.

Re: Bitcoin Energy Consumption Index

#37

Post by mdavidn »

grapehut wrote: post #16

Per transaction is intentionally a bit misleading, as the amount of power usage is proportional to how-much-power the block-reward can buy regardless of there being 1 or 1 million transactions. Not to mention, a single transaction can power an infinite amount of (wash) transactions thanks to 2nd layer stuff like the lightning network. So it'd be similarly misleading to try quote in terms of that. So the correct unit…

The average number of transactions per block is easy to measure historically.

If each block takes 10 minutes, and the miner network indeed draws 73 TWh each year, then that works out to ~1.4 GWh per block.

Re: Bitcoin Energy Consumption Index

#39

Post by paulsutter »

The Bitcoin network has a fixed transaction capacity that has no relation to the amount of power expended to mine bitcoin.

The amount of power used is proportional to the value of the reward for successfully mining a new block, which happens about every 10 minutes (12.5 BTC or about $100k).

If the value of BTC goes up miners will increase their spend and more power will be consumed per block mined, and if the value goes down so to will the power used.

Regardless of the power used for mining, there is a fixed transaction capacity in the network.

Re: Bitcoin Energy Consumption Index

#40

Post by WillPostForFood »

dragontamer wrote: post #28
aeternum wrote: post #24

Earlier quoted context omitted.

Wasteful compared to what though? How much energy, human capital, and resources are consumed by the banking industry? If (and big if) bitcoin is able to replace a significant fraction of the banking industry it will be extremely efficient in comparison. Per-transaction measures isn't the right metric since the Bitcoin blockchain can still be successful as a reconciliation backbone without being used for small everyda…

> Wasteful compared to what though? How much energy, human capital, and resources are consumed by the banking industry? The article actually answers this to some degree. See the following graphic: https://i.imgur.com/8TdKevG.png

How much energy to mine an ounce of gold?
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