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Bitcoin and other PoW coins are an ESG nightmare

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Re: Bitcoin and other PoW coins are an ESG nightmare

#81

Post by bouncycastle »

ForHackernews wrote: post #21
reedf1 wrote: post #14

I am so conflicted about the environmental impact of Proof-Of-Work. In many ways it feels like an arbitrary energy spend - but I think criticizing cryptocurrency for it seems a little disingenuous when we don't apply the same logic to other areas. What's the environmental impact of better refresh rates on monitors? What's the environmental impact of large scale cctv systems? What's the environmental impact of western…

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…

> or else risk that somebody else can execute a 51% attack

No, they aren't motivated by that. They are motivated purely by profit. If more miners start mining, the difficulty goes up, and therefore profit goes down. So they need to keep adding more machines. The price is driving this cycle too. The current hashrate & difficulty are at their ATH levels.

(Edited)

Re: Bitcoin and other PoW coins are an ESG nightmare

#82

Post by [deleted] »

Glench wrote: post #6

Worth mentioning the cryptocurrency that Bram Cohen (inventor of bittorrent) is creating that is explicitly designed to be low-energy usage and more distributed: https://www.chia.net/ It uses "Proof of Space" (proof that you're allocating a certain amount of storage space) instead of Proof of Work or Proof of Stake. Pretty interesting and they're coming out of beta into their mainnet in the next few weeks. Their on-c…

[deleted]

Re: Bitcoin and other PoW coins are an ESG nightmare

#83

Post by solosoyokaze »

Nursie wrote: post #77
ComodoHacker wrote: post #49

Earlier quoted context omitted.

Perhaps it's more reasonable to compare the energy footprint of cryptocurrency with that of our traditional fiat currencies. Including all computing power used by banks to settle their transactions.

When cryptocurrency provides 1% of the services that the traditional banking system does, let me know and we can do this comparison.

You can already do many things with crypto that you cannot do with the traditional banking system. Can you open 10,000 bank accounts right now? I can make 10k wallets.

There are so many new things we can do with crypto that it's going to take decades for people to discover them.

Re: Bitcoin and other PoW coins are an ESG nightmare

#84

Post by Nursie »

solosoyokaze wrote: post #83
Nursie wrote: post #77

Earlier quoted context omitted.

When cryptocurrency provides 1% of the services that the traditional banking system does, let me know and we can do this comparison.

You can already do many things with crypto that you cannot do with the traditional banking system. Can you open 10,000 bank accounts right now? I can make 10k wallets. There are so many new things we can do with crypto that it's going to take decades for people to discover them.

The number of times such an activity would be useful to me is zero.

However calling my bank and having cash recalled from fraudulent (or even just bankrupt) merchants, that's happened. Who do I call at Bitcoin?

Re: Bitcoin and other PoW coins are an ESG nightmare

#86

Post by ForHackernews »

Rallerbabs wrote: post #35
ForHackernews wrote: post #22

Earlier quoted context omitted.

None of the neutral language moves the needle. People have been pointing out for years that using more energy than all of Denmark to handle fewer transactions than a mid-sized Walmart is not a recipe for success. There are too many bagholders, excuse me, "investors" who are financially motivated to keep pushing this stuff.

Bitcoin is at all time high, meaning just about everybody who ever bought bitcoin is currently in profit. There are very few bagholders.

Yeah, and I was a paper multimillionaire around the time of the first dot-com boom. We'll see how it shakes out when the music stops.

Re: Bitcoin and other PoW coins are an ESG nightmare

#87

Post by ForHackernews »

pizza234 wrote: post #79
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…

> No other systems I know of are deliberately designed to continuously become less efficient. Well, there are - think of bcrypt :) It actually fits exactly the definition of design that deliberately becomes less efficient. Ultimately it's a matter of the perceived cost/benefit - encryption is deemed necessary, so the benefits [perceived] offset the costs, while the cryptocurrencies' benefits don't (or do, depending o…

BCrypt is designed to BE inefficient. It doesn't automatically become increasingly less efficient.

Re: Bitcoin and other PoW coins are an ESG nightmare

#88

Post by ashtonkem »

solosoyokaze wrote: post #69
ComodoHacker wrote: post #49

Earlier quoted context omitted.

Perhaps it's more reasonable to compare the energy footprint of cryptocurrency with that of our traditional fiat currencies. Including all computing power used by banks to settle their transactions.

You really also need to include the entire military budget (and eco damage) as that's what props up the state, which backs the fiat.

This is such a silly counter argument.

First of all, countries secure energy because people want energy. Even in a world where we use Bitcoin, people are still going to want HVAC, cars, cell phones, and all the other things that we use/buy that consume energy and damage the environment. The idea that a country will magically stop wanting oil because it's using Bitcoin is just laughable.

Second, Bitcoin uses a ton of energy by design. It's literally built to create a competition between miners for hashing power in order to prevent 51% attacks. This structure is why increased hashing efficiency hasn't reduced Bitcoin's energy usage, it only results in spending the same amount of electricity on new hardware rather than old. A country that runs on Bitcoin will need a bit more energy as a fiat country, because maintaining sufficient hashing power will suddenly become a strategic problem. Up until today the risk of a 51% attack on Bitcoin is a private concern; only the miners and those involved in Bitcoin are concerned about it. But if a country used BTC as its main currency, suddenly that is a strategic problem. Does anyone honestly think that the USA wouldn't use its military to secure oil in order to hedge off a 51% attack on its entire financial system? Honestly, it would be dereliction of duty to not do that, given that scenario.

Re: Bitcoin and other PoW coins are an ESG nightmare

#89

Post by xirbeosbwo1234 »

ComodoHacker wrote: post #49
reedf1 wrote: post #14

I am so conflicted about the environmental impact of Proof-Of-Work. In many ways it feels like an arbitrary energy spend - but I think criticizing cryptocurrency for it seems a little disingenuous when we don't apply the same logic to other areas. What's the environmental impact of better refresh rates on monitors? What's the environmental impact of large scale cctv systems? What's the environmental impact of western…

Perhaps it's more reasonable to compare the energy footprint of cryptocurrency with that of our traditional fiat currencies. Including all computing power used by banks to settle their transactions.

Bitcoin uses about 1/3 the energy of all datacenters in the world put together.

Datacenters use about 205 TWh/year.

https://www.networkworld.com/article/3531316/data-center-pow...

Bitcoin uses about 75 TWh/year.

https://digiconomist.net/bitcoin-energy-consumption

And that's with everyone on the planet using normal money every day and just about no one using Bitcoin.

Re: Bitcoin and other PoW coins are an ESG nightmare

#90

Post by WanderPanda »

rebuilder wrote: post #57
djbebs wrote: post #25

Earlier quoted context omitted.

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…

This is a very good point. At some point in the future the mining power will need to be paid majorly by the transaction fees. This depends a lot on how high the price can rise, but lets assume gold market cap. Then it would be maybe 3-4 halvings = 12-15 years until the share of block rewards in miners compensation will decline and the transaction fees have to compensate for it. In my view this is the biggest long term security and usability issue because transactions will probably cost hundreds to thousands of current day dollars assuming steady or slightly rising power usage = tech-innovation adjusted hash-rate.

Hundreds of dollars are too much for the average joe to regularly open and close lighting channels, so we might see some kind of centralisation.

The big question is if bitcoin can provide enough value as a international settlement backbone to fund the biggest pool of sha-mining hardware in the world. If an alternstive usecase for sha-miners comes up (be it blockchain related or not) that would also be a bigg security blow (but I don‘t see this on the horizon for now)

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