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Bitcoin Energy Consumption Index

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Re: Bitcoin Energy Consumption Index

#41

Post by aeternum »

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

As others have commented, per-transaction is a very misleading metric. Hashing difficulty is based on the number of other miners and time between blocks, not based on the number of transactions.

With something like lightning network, a single Bitcoin transaction can facilitate millions of 'lightning' transactions.

Re: Bitcoin Energy Consumption Index

#42

Post by aeternum »

roywiggins wrote: post #35
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…

> 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…

It's up and running now: https://bitcoinvisuals.com/lightning

Re: Bitcoin Energy Consumption Index

#43

Post by skywhopper »

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.

Well, the bad news is that this method is unsustainably expensive, then. And it also fails the test of avoiding oversight, so...

Re: Bitcoin Energy Consumption Index

#44

Post by ISL »

labster wrote: post #11

Bitcoin is an ongoing environmental disaster, profiting off of subsidized coal power in China and elsewhere in the world. Millions of people die every year from air pollution. But on the other side, hey blockchains are so cool they can do the same work as banks but six orders of magnitude less efficiently.

By that measure, the problem is the pricing of energy, not Bitcoin.

Re: Bitcoin Energy Consumption Index

#45

Post by privateSFacct »

Or $68/transaction supposedly if electricity cost at 11 cents per KwH is used. Actual transaction fees run around $0.20 for on-chain which implies either math is wrong or per block reward is sufficient still (total blocks I believe are fixed with increasing difficulty).

Does this analysis take into account secondary network transactions? For example wire transfers are relatively expensive to process still, but are often used to settle huge volumes of things like ACH payments, nightly sweeps etc.

Re: Bitcoin Energy Consumption Index

#46

Post by VRay »

Kinnard wrote: post #5
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…

Do you have some back of the napkin counter calculations? Or critiques of their methodology?

I'm not sure if the article is right or wrong, but the commenter above you was probably getting at this:

You can see how much money a block miner receives for a block of transactions, and given the money they received, and an estimate for the cost of power, you can estimate how much power they might have been willing to expend on it

Going off the guy's link, I guess it's 24 cents to get into the next block, and a block has about 500,000 transactions, so whoever mines that block gets $125,000. Assuming 4 cents per kWh, the presence of only one miner, and no other operation costs, he'd still be breaking even if he expended (1 kwH/$0.04)*$125,000 =~ 2,500 kWh per block

(and by the same napkin math, that's 6 kWh per transaction)

What's weird is TFA seems to be using a similar methodology (but looking at total bitcoin mining revenue instead of an individual block), and yet they came out with a number 100x as large. I'm not sure why there's such a big discrepancy.

Re: Bitcoin Energy Consumption Index

#47

Post by iikoolpp »

qwerty456127 wrote: post #29

If only governments and corporations did not insist on limiting people's freedom to trade freely and anonymously we wouldn't need that. Just make trading and privacy fundamental human rights like air breathing is and huge amount of energy will be saved.

Didn't realise cash was suddenly outlawed

Re: Bitcoin Energy Consumption Index

#49

Post by snagglegaggle »

Analemma_ wrote: post #31
snagglegaggle wrote: post #26

Earlier quoted context omitted.

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.

That's great, but you could argue that AML/KYC has pollution costs of a different nature in regards to personal liberty. Whether or not they do me suggesting that is about as baseless as suggesting bitcoin has huge negative externalities.

Without explicit evidence of a market failure it's probably fine to assume that negative externalities are factored into sticker price of goods as the opportunity cost of product X eventually must take into account those externalities as applied to everyone.

Re: Bitcoin Energy Consumption Index

#50

Post by newnewpdro »

y3k wrote: post #19

One of the main reasons why I dropped BTC. "Getting rich" at cost of the environment (extremely high resource consumption)? No thanks, I'd rather leave that world for future generations.

I have similar feelings, but if you apply this attitude uniformly it's nearly impossible to participate in the economy at all, since it's mostly riding on fossil fuels in one way or another.

At least with bitcoin you could theoretically throw up a pile of solar panels and directly convert that clean electricity into money.

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