Bitcoin and other PoW coins are an ESG nightmare • Hacker News Board

Re: Bitcoin and other PoW coins are an ESG nightmare

#51

Post by zyphr » Mon, Feb 15, 2021, 2:03 PM UTC

ForHackernews wrote: post #37

mightybyte wrote: post #33

Earlier quoted context omitted.

If you smelt aluminium in a remote area you then have to move it to an area where it can be useful. Moving it consumes a lot of energy. If you mine a bitcoin near a power plant with excess capacity, anyone anywhere in the world with an internet connection can leverage that work for value transmission. This literally allows a computer in China to replace an armored car in Denver, Colorado. > There are plenty of other…

But if you smelt aluminium, you have valuable aluminium. It's disingenuous to pretend (without any sourcing) that bitcoin is only mined using electricity that would otherwise have been wasted. If this were really true, then bitcoin miners should all be getting paid to act as load banks[0] for their local electrical grid and soak up that excess power. Since they are instead paying for electricity, they are using valua…

That is exactly what power companies are going to do.

Re: Bitcoin and other PoW coins are an ESG nightmare

#52

Post by cableshaft » Mon, Feb 15, 2021, 2:05 PM UTC

raverbashing wrote: post #46

Rallerbabs wrote: post #42

Earlier quoted context omitted.

Hacker News is indeed being overrun by a too large amount of irrational bitcoin FUD. The energy 'argument' is easily debunked. But that's not what this comment is about, so I won't rehash it here. Trying to change people's minds on here doesn't work. But you know what? That's okay! It signals us bitcoin holders how incredibly early we are in this life changing monetary revolution, that we are seeing unfold before our…

Ah I see https://www.amazon.com/Are-Missing-Real-Estate-Boom/dp/03855... One can invest in Bitcoin if one wants, but only because The Market Can Remain Irrational Longer Than You Can Remain Solvent

I would agree there are people that are buying in now that think there's no risk that Bitcoin will go down, and think it's only going to keep going up, and will probably sell as soon as it drops and lose a lot of money.

There's definitely a risk it could go down. Bitcoin has been super volatile in the past, and has cratered to 20% of its price before and probably will again. Might even be relatively soon (within a year, I'm guessing).

But people who have held on to the asset through those dips are now doing incredibly well, assuming they sell before the next major dip (and probably even if it they don't, 20% of $48,000 is $9600, and if they bought while it was $3500 a year ago, that's still triple what they bought it at).

People who have bought and held since it was $220 back in 2015 are likely doing extremely well.

There's very few assets out there that can offer 200x returns in just five years.

Re: Bitcoin and other PoW coins are an ESG nightmare

#53

Post by snakeboy » Mon, Feb 15, 2021, 2:05 PM UTC

dsukhin wrote: post #30

It's worth comparing Bitcoin's proof of work to other schemes of maintaining currency value to understand this in a relative sense. The Military Industrial Complex which arguably is the mechanism by which the dollar maintains its position as the global reserve currency puts out 152MtCO2/yr [1]. Without making any judgement on if this ratio is reasonable: this is 3-5x more than BTC POW but arguably also contains other…

I don't really know much about bitcoin and how mining scales with the number of trades, but there are only a few million Bitcoin users, meanwhile there are billions of USD holders/users each of whom have (I'd guess) significantly more average daily transactions.

That's something like 5 orders of magnitude more activity with USD vs BTC.

So for something that is used upwards of 100,000x more and only takes 5x more energy, that'd be a win for USD, no?

This of course is all disregarding my strong skepticism that the excesses of the US Military is a reasonable proxy for the strength of the US dollar.

Re: Bitcoin and other PoW coins are an ESG nightmare

#54

Post by cableshaft » Mon, Feb 15, 2021, 2:09 PM UTC

pdpi wrote: post #44

cableshaft wrote: post #17

So since bitcoin is up right now, we're just going to see nonstop attacks on the fact that it's not climate friendly with its energy usage? Feels like this is the sixth article I've seen on Hacker News in the last month. From a quick skim this article seems like it might have some good data, but it also has a bunch of loaded language in it that turns me off from wanting to read the article. "Bitcoin and other PoW coi…

"Anarchic" is a perfectly reasonable, even necessary, descriptor for cryptocurrencies. They were born in the cypherpunk community, and Bitcoin cites Wei Dai's B-money, which directly namechecks Tim May's Crypto-anarchist manifesto.

That was the first one I noticed, and if it was only that word in isolation (without the rest) I wouldn't have bothered making the comment.

Regardless of how it was born, I don't think it qualifies as anarchy now, especially with how it can be tracked and regulated (indirectly, i.e. it can be banned, transactions taxed, exchanges subpoena'd for transaction information, ledgers tracked, etc) by governments.

Re: Bitcoin and other PoW coins are an ESG nightmare

#55

Post by mariusor » Mon, Feb 15, 2021, 2:17 PM UTC

ycombinatorrio wrote: post #43

Bitcoin critics continue to assert that mining is wasteful and disproportionately damaging to the environment. Contrary to consensus thinking, we believe the impact of bitcoin mining is a net positive for the environment. Here's why: First, proof-of-work mining is critical to Bitcoin. In the Bitcoin network, trustworthiness is protected by computation, and mining is what gives Bitcoin its ability to coordinate trust…

"But they did it first" stops being an excuse once you move on from third grade. Even if the costs of bitcoin generation and transactions are better than mining gold, it's still a poor excuse to prefer "getting rich quick" to being considerate to the future generations.

Re: Bitcoin and other PoW coins are an ESG nightmare

#56

Post by Rallerbabs » Mon, Feb 15, 2021, 2:21 PM UTC

cableshaft wrote: post #52

raverbashing wrote: post #46

Earlier quoted context omitted.

Ah I see https://www.amazon.com/Are-Missing-Real-Estate-Boom/dp/03855... One can invest in Bitcoin if one wants, but only because The Market Can Remain Irrational Longer Than You Can Remain Solvent

I would agree there are people that are buying in now that think there's no risk that Bitcoin will go down, and think it's only going to keep going up, and will probably sell as soon as it drops and lose a lot of money. There's definitely a risk it could go down. Bitcoin has been super volatile in the past, and has cratered to 20% of its price before and probably will again. Might even be relatively soon (within a ye…

The real estate & bitcoin comparison is apples & oranges.

Real estate existed (and still exists) in a world of inflationary government IOUs (read: fiat). People were taking out too many & too large loans. Ofcourse it was going to go bust. People were talking about it. The author of the book he linked, was being a contrarian.

Bitcoin has created its own reality, which has only just started to gain traction. It's the early days of the dot com boom. It's the early days of SEO.

Every informed individual sees the writing on the wall. Something doesn't grow for 12 years straight, unless it's got something interesting going on.

To state that bitcoin is going away, is the equivalent of stating that the Internet is just a fad that will soon die out. It's an inherently contrarian view.

Re: Bitcoin and other PoW coins are an ESG nightmare

#57

Post by rebuilder » Mon, Feb 15, 2021, 2:22 PM UTC

djbebs wrote: post #25

ForHackernews wrote: post #21

Earlier quoted context omitted.

No other systems I know of are deliberately designed to continuously become less efficient. That's why Bitcoin/PoW is in a different category to me: It's a Red Queen's Race where all the miners are incentivized to keep wasting more and more energy (for no greater benefit) or else risk that somebody else can execute a 51% attack. Imagine if your email host needed to keep burning more and more energy, not to send any m…

Except they are not incentivised to expend more and more energy. The amount of energy expended is a direct correlation to how important bitcoin is. You wouldn't criticize a government for spending millions keeping ita gold reserves safe, even though it can store them just as easily in a warehouse as it can in fort knox

How secure does the Bitcoin network need to be? What mechanism exists to determine that?

Rhetorical question, BTW. There is no market mechanism that determines what is sufficient security. This should become clear if one looks at what the network is choosing to pay the miners who secure transactions.

The block reward is now 12.6% of what it originally was, and tx fees have certainly not gone up correspondingly. So is the network now undersecured? Or was it previously overpaying for security? Again, rhetorical questions - the users of the network aren't paying for security, they're paying to have their transactions processed and have no choice but to subsidize the miners with the block reward as well. As far as how much security is needed goes, the Bitcoin answer is simply "more is more."

But in the future, as the block reward dwindles, won't market forces start to price in security? I'm sceptical, personally, because the only gauge of whether or not the network is paying its miners enough is whether or not the network works. So if, in the process of finding the proper price of security, the market goes too low, attacks will be possible and the price of BTC will likely suffer as a consequence. This would make it less attractive to mine BTC and less attractive to use BTC. You can see how this could lead to a downward spiral.

Re: Bitcoin and other PoW coins are an ESG nightmare

#58

Post by waynesonfire » Mon, Feb 15, 2021, 2:28 PM UTC

kyrieeschaton wrote: post #28

What's the energy cost of a financial sector that takes a ~3% cut of all retail transactions, puts up physical bank branches to manage money, empowers a federal reserve to manage the value of currency with more or less competency... Comparing BTC energy costs to some mythical world where we just burn free lunches for heat is not honest.

There is nothing about BTC that deprecates the issues you present.

Re: Bitcoin and other PoW coins are an ESG nightmare

#59

Post by mightybyte » Mon, Feb 15, 2021, 2:33 PM UTC

ForHackernews wrote: post #37

mightybyte wrote: post #33

Earlier quoted context omitted.

If you smelt aluminium in a remote area you then have to move it to an area where it can be useful. Moving it consumes a lot of energy. If you mine a bitcoin near a power plant with excess capacity, anyone anywhere in the world with an internet connection can leverage that work for value transmission. This literally allows a computer in China to replace an armored car in Denver, Colorado. > There are plenty of other…

But if you smelt aluminium, you have valuable aluminium. It's disingenuous to pretend (without any sourcing) that bitcoin is only mined using electricity that would otherwise have been wasted. If this were really true, then bitcoin miners should all be getting paid to act as load banks[0] for their local electrical grid and soak up that excess power. Since they are instead paying for electricity, they are using valua…

> But if you smelt aluminium, you have valuable aluminium.

And it's useless until you spend more energy to move it to where people want it.

> It's disingenuous to pretend (without any sourcing) that bitcoin is only mined using electricity that would otherwise have been wasted.

It doesn't have to be only mined that way. You're being absolutist. Competition has resulted in bitcoin mining being very sensitive to energy costs. It stands to reason that miners--especially the ones operating at large scale--will move to places where there is cheap energy.

https://www.publish0x.com/muchograph/top-5-biggest-bitcoin-m...

Several of the big mining operations mentioned there are located in places known for cheap electricity. Genesis mining relocated to Canada and Iceland specifically for cheaper power. Gigawatt is located in Washington State which has some of the cheapest electricity in the U.S. (part of the reason Google chose The Dalles, OR for one of their data centers).

Re: Bitcoin and other PoW coins are an ESG nightmare

#60

Post by blueblob » Mon, Feb 15, 2021, 2:34 PM UTC

cableshaft wrote: post #52

raverbashing wrote: post #46

Earlier quoted context omitted.

Ah I see https://www.amazon.com/Are-Missing-Real-Estate-Boom/dp/03855... One can invest in Bitcoin if one wants, but only because The Market Can Remain Irrational Longer Than You Can Remain Solvent

I would agree there are people that are buying in now that think there's no risk that Bitcoin will go down, and think it's only going to keep going up, and will probably sell as soon as it drops and lose a lot of money. There's definitely a risk it could go down. Bitcoin has been super volatile in the past, and has cratered to 20% of its price before and probably will again. Might even be relatively soon (within a ye…

In my mind this comparison isn't exactly the right way of looking at it. Most of the early buyers who held on bought full shares of bitcoin before fractional shares were an option. The people buying it at 48,000 are likely buying fractional shares. So they're not necessarily invested at the full risk of losing such a significant amount of money. I think this is part of the reason it's going up.