edit: 39% of it, as in a lot of it and that number should go up as the world is phasing out dirty energy for cleaner energy sources.
> However, the CCAF’s report specifies that the 76% refers to the share of hashers who use renewable energy at any point. It estimates that only 39% of hashing’s total energy consumption comes from renewables.
> Behind hydroelectricity, coal (38%) and natural gas (36%) are the energy sources hashers favour most.
[1]https://www.finextra.com/newsarticle/36672/renewable-energy-....
Genuinely curious, what it is useful for?
I strongly believe that the current financial system is completely broken, so I'd like to opt out of it as much as possible.
Don't ruin the planet for everybody else so that you can sit on your un-diluting hoard of tulips like a dutch dragon.
This is not the same as "renewable" energy, it's locally bound opportunistic energy. Hydro- and geothermal power is limited and almost exhausted already. These power sources are not chosen because they are ecologically neutral, but because mining is portable and can opportunistically use temporary cheap sources, like hydro-electrical dams build before the intended consumers arrived. Nothing in Bitcoin inherently favors sustainable energy sources, over cheap supply. In the coming years, we will have to bite the bullet and chose very expensive endeavors over what the market suggests. Bitcoin doesn't fit this future. It's suggested "value" is nothing compared to humanity's survival.
What does this mean, in practice? Who investigates and what is the outcome?
Do the things OP listed above warrant a similar investigation?
BTW, afaik bitcoin has 5million users and Argentina's population is 44 million. Also, this energy consumption by 44million people includes all the activities you can think of to add to this argument.
Or then we let people use their own resources the way they see fit.
scale in general does not excuse, but consumption per capita should.
A Ps4 consume around 100 watt/hour
If you keep it on 24 hours a day, 7 days a week, is 876 KW/year.
Which is not very much.
At 120Tw/year with 5 million users BC consumption per capita is an astonishing 24,000kw/year (or 24Mw)
Every bitcoin user consumes 27 times the energy consumed by a (quite powerful) gaming console turned on non stop (which is never the case)
That's why there have been campaigns around the World to replace incandescent bulbs with the energy efficient ones.
Compared to the traditional ones the new light bulbs can save up to the 80% of the energy, compared to a bitcoiner, a non bitcoiner can save ~97% of the energy by simply playing videogames.
You need to take in the manufacturing costs, costs to develop software, costs to run servers too, otherwise you're only measuring marginal energy consumption for a new user.
Marginal energy consumption for a new Bitcoin user is probably small too.
It's not the total amount of energy used to create the BC network, the software, the HW and everything else.
> The Cambridge Bitcoin Electricity Consumption Index (CBECI) provides a real-time estimate of the total electricity load and consumption of the Bitcoin network. The model is based on a bottom-up approach initially developed by Marc Bevand in 2017 that takes different types of available mining hardware as the starting point.
> The first number refers to the total electrical power consumed by the Bitcoin network and is expressed in gigawatts (GW). This figure is updated every 30 seconds and corresponds to the rate at which Bitcoin uses electricity. The second number refers to the total yearly electricity consumption of the Bitcoin network and is expressed in terawatt-hours (TWh). We annualise Bitcoin’s electricity consumption assuming continuous power usage at the aforementioned rate over the period of one year. We apply a 7-day moving average to the resulting data point in order to make the output value less dependent of short-term hashrate movements, and thus more suitable for comparisons with alternative uses of electricity.
I disagree the comparison is useful.
BC on the other hand are very expensive in terms of energy consumed, by design
BTC don't make any sense energy wise and in the end don't make any sense to invest in something designed to burn energy in the long run, especially now that we are trying to fix the mistakes of the past
Market caps in speculative, unregulated markets aren't indicators of economic relevance. Gaming facilitates billions in production on a yearly basis. Crypto related activity produces very little in comparison. And no, someone buying billions worth of Bitcoin doesn't count (just like people buying GameStop stock doesn't reflect the economic impact of the gaming industry).
You could make the same argument about any nascent technology that hasn't succeeded or failed yet.
Let's watch for 5-10 years. If you're right about bitcoin, I bet its price will be much lower and you can gloat. If you're wrong, I bet its price will be much higher (because I agree with the basic assessment that gaming "feels" much bigger today). Luckily, we can both place our bets based on our best assessments of the future.
How confident are you that you can present a substantive case against bitcoin that matches the diligence that Ross Stevens has done for years? https://www.youtube.com/watch?v=lczPTYf_tvA
The comment above, in a nutshell, is what's enveloping the current crypto environment. Maybe one day we'll get past it (or maybe this is just it).
Either he doesn't know what volatility means or he is trying to scam people.
We already do apply such laws. Car manufacturers are required to sell a certain number of EVs. Emissions must meet standards. Appliances have energy ratings. etc. etc.
If Bitcoin were regulated so that those using the excess output of hydroelectric or other fixed output systems could do so for free, but everyone else was taxed appropriately, then that would actually probably do very little because that is largely the situation already: far from being an anonymous decentralized anarcho capitalist future, it is just large organized crime syndicates in China and Russia generating the transactions. And for all these reasons, the US should make it illegal.
And that still doesn't really answer whose job it is to ban all these things, and what mechanism would be used to enforce it.
There is a difference between majority not liking and only like 0.2% of the world consuming more energy than _a whole country_. There are 5million bitcoin users, they are consuming more electricity than 44 million people's daily lives. Think about the scale of imbalance here.
For example MGM claims their properties in Nevada consume 171 MW. That's more than 65 of the countries from this list: https://en.wikipedia.org/wiki/List_of_countries_by_electrici...
Enforcing could be done via banning any payment with bitcoin.
If they produce a net negative for the majority and only benefit a small number of people, then yes.
We don't go around driving tanks, do we?
I love tanks, but there's a reason why we can't drive them to go to the mall.
That's an awfully subjective claim and one I find to be contentious. I think even today Bitcoin's impact on global politics has already provided massively more value to global society than all of the resources it has spent on electricity.
The public? Something that benefits a few at the expense of the many is the canonical case for regulation.
(I don’t think we should ban or even really regulate Bitcoin. Not at this point.)
I think you've misunderstood something. Those people are buying their own electricity...at their own expense. So, you want to bring arbitrary restrictions to electricity - as if we didn't have enough issues with net neutrality already.
>The market could solve this problem properly if there were a global carbon tax, but unfortunately, there isn't.
"Solve it"? How so? Crypto mining is largely powered by renewables (40% according to one source in Sep 2020). It is a race to find the most energy efficient way create power to make it worthwhile to mine, which has some positive effect on society by driving innovation. No idea if that is a net positive, but this is not black and white issue at all the way many here are framing it.
That’s one source and less than half does not mean “largely” in standard English usage. More importantly, almost nobody uses Bitcoin so a key question would be how that’d change if usage could be scaled up to, say, even 0.1% of daily transactions.
It's not bitcoin's fault.
So, ca. 76 of those TWh/year are still carbon heavy.
gold mining uses tons of energy we knew automobiles will pollute the environment, why didn't we stop using them altogether?
It’s basically saying if you don’t like pollution don’t pollute, which is flawed in ways I don’t have to explain.
may be you are right , may be you're wrong
just don't be too sure that you know better than most
Automobiles pollute, sure, but the vast majority of people benefit from vehicles.
But what, if any, benefit does bitcoin offer to the public - other than being a speculative asset?
gold is not that useful in utility sense tbh, less than 10% is industrial use.
Incidentally, why would we ever let the market decide when the market consistently throws externalities under the bus?
Other industries and activities, such gold mining, automotives, food production, tourism, etc., must of course also be covered by said carbon tax. However, what makes Bitcoin particularly noxious compared to them is that it intrinsically carries a financial incentive to expend more energy as time moves on.
The original Model T could run on ethanol (not perfect, but better than gasoline in many regards for pollution, and back then IDK if they would have noticed) and Henry Ford was fond of the idea of biofuels; at the time I think he was fond of Potatoes for the purpose.
Energy is how our society is able to maintain its existence and current quality of life. If you over extended that energy usage you are looking towards total collapse of that system. That's what "unsustainable" means, that the system cannot be sustained in it's current state indefinitely.
We already rely on fossil fuels to over extended the carrying capacity of the planet for humans by nearly and order of magnitude. Ignoring climate change and other sustainability issues, the inevitable end of fossil fuels would mean billions of lives lost, even if we were able to stabilize the current global population.
I suspect, ultimately we will learn that humans are no different than bacteria in a petri dish: completely unable to do anything but consume all available resource even at their own eventual peril. But if you have any hope that we as a species can avoid the fate of any other species placed in a similar situation, then you, at the very least, have to recognize that "markets" can't solve this problem.
Also, as a small aside... the concept of an externality is not about pollution or waste. It is about a cost that is imposed on people other than the individual responsible for the cost. The finitude of the planet is immaterial to the existence of externalities.
This is true right now considering how nascent this is, but what happens if adoption picks up?
One thing I’d like to see discussed is what the marginal power cost of Bitcoin is. From where I sit, the vast majority of power consumption is fixed per block, and occurs regardless of whether you have 1 or 10,000 transactions.
The existence of Bitcoin forces all other money systems around the world to be at least as good as Bitcoin, or citizens will flee into Bitcoin.
Bitcoin adds value simply by existing, even absent serious adoption.
How many products and services are bought every day with Bitcoin?
I suspect BTC will have as much impact on conventional currencies as a fly landing on an aircraft carrier.
Companies like Tesla are buying Bitcoin, not because they intend to transact with Bitcoin but because it gives them protection against inflation within the US economy, and it gives them a stash of money that cannot be forcibly shut down, allowing them to do business even in jurisdictions that don't want them there.
If you are looking at just the "products and services" you are missing the forest for the trees.
Until people start accepting bitcoin for bread, rent and salaries, Tesla most certainly does not have a “stash of money that cannot be forcibly shut down”. It has something that might be able to be exchanged into a local currency to buy those things.
What’s more, that stash of bitcoin most certainly could be forcibly shut down at the stroke of a pen. Tesla is a public US company listed on a US stock exchange. If the USA decided tomorrow to criminalise BTC, Tesla would be left with a huge 1.5bn hole in its accounts and a huge number of very pissed off investors.
Moreover, if Elbonia doesn’t want Tesla there, how in the hell are Tesla cars going to arrive at ports? How are they going to be registered? How are Tesla going to deploy charging infrastructure? BTC has exactly squat to offer in terms of dealing with jurisdictions that don’t want them there.
BTC isn’t some magic wand that lets you operate in a fairy dimension where none of the rules of reality apply.
Bitcoin is already accepted by many for rent and salaries. Bread is not likely to ever happen because transactions are too inefficient, but that doesn't mean you can't viable have an economy based on larger exchanges.
If anything, I’d say that’s more a reflection of the poor state of the USA banking sector than its currency.
For proof of work networks to function securely, the network as a whole must have a much higher computation rate than an attacker.
Obviously capabilities increase the whole time, so the bitcoin network needs to be able to adapt - to do this, it adjusts its 'difficulty' approximately every two weeks. The power usage corresponds directly to the difficulty level set by the network.
If you add more miners, the difficulty will increase, and power consumption will go up, if miners leave, the difficulty will decrease and power consumption will go down.
A certain amount of bitcoin -- the amount determined by a schedule that was defined before the network became operational -- is given as a mining reward every 10 minutes. The incentives of the individual miners is such that the expenses of the miners (collectively) equals the mining reward -- and the major mining expense is electricity.
If the mining reward is cut in half, the electricity consumption of the network is cut in half, too.
In contrast, if the rate of transactions changes or the number of miners change, electricity consumption stays the same. (More precisely, the expenses of running the network equals the mining reward plus any transaction fees, and since the blocks are of fixed size, for more transactions to compete for space in the blocks increases transaction fees, but I am guessing that transaction fees are currently a small fraction of the mining reward.)
> If the mining reward is cut in half, the electricity consumption of the network is cut in half, too.
That's not true it all -- there is no difficulty adjustment when the reward is halved. There may be pressure on some miners to stop mining, but that adjustment is not immediate and can also be compensated for by change in the price of bitcoin.
> In contrast, if the rate of transactions changes or the number of miners change, electricity consumption stays the same.
Given the network is operating at peak transaction rate already, there's not much change here. Neither block size nor the transaction count has a meaningful affect on the computations required to "solve" a block. The merkle tree for the transactions is computed once, but most of computation is finding a nonce, that combined with the rest of the block header, produces a hash with a certain number of leading zeros.
Changing the block size or transaction count doesn't meaningfully change electricity consumption.
>that adjustment . . . can also be compensated for by change in the price of bitcoin.
It can. When I wrote that if the mining reward is cut in half, the electricity consumption of the network is cut in half, too, I assumed that the price remains constant.
A miner must pay for the electricity he or she uses. Where do you think the money comes from to pay for the massive amount of electricity used by the network?
Do you imagine that rich people (i.e., people who can afford to lose money) are buying the electricity for pro-Bitcoin ideological reasons?
I don't: I believe that it comes out of the revenue made (collectively) by the miners. In other words, the payments for the electricity are parts of (individual) plans to make money through mining.
And I believe that if that (collective) revenue were cut in half -- especially if miners and prospective miners knew of the halving in advance (particularly, before they decided what mining hardware if any to buy) -- then money spent on electricity is approximately cut in half, too. (Because otherwise the plans to make money would not work.)
You are correct that the adjustment in the hash rate is not immediate after a halving of the mining reward. Mostly that is because miners who recently bought mining hardware have to continue mining after the halving to continue to pay for their hardware.
If the halving was announced in advance, then the halving will start exerting downward pressure on the mining difficulty months in advance of the actual date of the halving. The major cause of that downward pressure is miners opting not to upgrade their hardware and prospective miners opting not to enter the mining business in the first place (the effect of which is to make it take longer for the remaining miners with their non-upgraded hardware to solve the proof-of-work puzzles, which in turns causes the software to reduce mining difficulty to return the average time between successive blocks back to 10 minutes).
Basically, it takes many months for newly-manufactured mining hardware to pay for itself, and that delay is the main reason the response to a reward-rate halving is slow. But again the response starts months before the actual halving; and the cumulative effect of the halving on the rate -- more precisely the effect the rate has on how much electricity is consumed by the network over the years -- is approximately the same as it would be if the effect of the halving on the rate were instantaneous.
It is the fact that one of the major expenses (namely, hardware) of the miners is "lumpy" (requires an upfront expenditure that is then recouped over many months) that obscures the simple relationship whereby the collective expenses of the mining community approximately equals the collective revenues of that community -- where most of that revenue is from mining rewards, which is equal to the price of bitcoin (or the value of bitcoin if you prefer) times the rate at which the network dispenses bitcoins from miners as rewards. What makes me confident that expenses = revenues is that miners are rational and consequently are capable of taking into account scheduled halvings of the rewards to mining and the "lumpiness" of the cost of mining hardware (and many other factors).
> if the mining reward is cut in half, the electricity consumption of the network is cut in half
This would only happen if half of the miners shut off their equipment as soon as the reward adjustment occurred, which does not happen [1]. Even then, that doesn't change the electricity consumed by a single miner producing a single block, since that is governed by the difficulty parameter, which also did not halve and took multiple weeks to bottom out before increasing again [2].
There is no simple function between block reward and network or block electricity consumption.
1. There was a drop of 120PH/s to 90PH/s within a week after the halvening. https://www.blockchain.com/charts/hash-rate
2. You can see a similar curve of difficulty _following_ the hash rate of network, albeit over multiple weeks. https://www.coinwarz.com/mining/bitcoin/difficulty-chart
> A certain amount of bitcoin -- the amount determined by a schedule that was defined before the network became operational -- is given as a mining reward every 10 minutes. The incentives of the individual miners is such that the expenses of the miners (collectively) equals the mining reward -- and the major mining expense is electricity.
The 10 minute rate is true, but the expense is not collective. I as a miner am in active competition with my fellow miners and am incentivised to find ways to decrease costs (electricity), but only mine. In fact it would be in my best interest to increase the electricity cost of a competing miner in order to force them off the network, and if I win the block it is only my personal power backing that block.
> If the mining reward is cut in half, the electricity consumption of the network is cut in half, too.
Not necessarily. If the reward is cut in half but the price of BTC has risen considerably since starting mining operations then I will remain on the network as the profit is sufficient to continue. This is why the "halving" event that Bitcoin goes through has never had a major impact on either the price of BTC or the scale of mining operations globally.
> In contrast, if the rate of transactions changes or the number of miners change, electricity consumption stays the same. (More precisely, the expenses of running the network equals the mining reward plus any transaction fees, and since the blocks are of fixed size, for more transactions to compete for space in the blocks increases transaction fees, but I am guessing that transaction fees are currently a small fraction of the mining reward.)
This is very wrong. The expense of running the network is equivalent to all the energy burned by the entire network in order to find the next block. This isn't felt by the individual miner in any way other than a potential increase in competition to find the block, but taken as a whole the network is for example now considered to be using the total energy consumption of Argentina.
And, at the same time, there are many people, in less fortunate circumstances, for whom the benefits of bitcoin are felt much more acutely: https://twitter.com/gladstein/status/1357757736394444800
The "minuscule percentage" you quote (without reference) is very likely already clearly incorrect and will continue, over time, to become more incorrect.
To participate in PoS, you need an existing stash of coins, which is inaccessible for many individuals from countries where cryptocurrencies are outlawed. Not forgetting to mention that participation in consensus would indirectly require going through KYC.
PoW, on the other hand, is akin to buying Bitcoin with electricity - a borderless natural resource.
I dislike the way that cryptocurrencies have managed their initial allocations, but it's way better than the way that fiat currencies have managed their initial allocations (usually encoding generations of violence, rascism and oppression).
To 'participate' in PoS (by which you mean mining a block I suppose), you can buy all the stake you need from other people, just like if you want to 'participate' in stock ownership, or land ownership or ownership of nearly anything else in the world.
> PoW, on the other hand, is akin to buying Bitcoin with electricity - a borderless natural resource.
Well.... if you try to mine BTC these days with a standard computer on a standard electricity tarif, you're not going to have a fun time.
Given the fact that to reasonably 'participate' in PoS you need only the kind of computer you already have and an easily acquired stake, while to reasonably 'participate' in many forms of PoW you need unusual, expensive custom hardware and cheap electricity, I'm not at all convinced that PoW has anything better to say about 'fairness'.
Just a nit, but I would argue that those encoded privileges are still present; just now with the added indirect layer of "People who were adjacent to the cypherpunks mailing list circa 2009"
Wow, I never knew ASICs grew on trees.
Those three things would give a government interested in banning cryptocurrencies plenty of leverage to disrupt mining operations in their country.
All they would need to do is regulate the import of ASIC mining hardware; sinkhole any traffic that looks "bitcoin-y" (damn the collateral damage, we're fighting fascist communist pedophile terrorist drug traffickers here!) and similarly block access to any known mining pools.
They could go even further and introduce severe and draconian penalties to anyone producing, possessing, or using cryptocurrencies (which of course would be selectively enforced).
At this point, once you factor in the real-world element, the fact that, in theory, you only need electricity to produce bitcoin becomes such a small part of that equation.
I think at that point why not use PoS (or better yet, a DPoS scheme), if there isn't any real-world benefit to PoW? I think the tradeoff of introducing a small amount of revocable trust in exchange for RADICALLY reduced energy consumption is pretty clearly worth it, given the real world constraints.
There will be independent PoS validators who can afford upfront costs, but there are independent miners too who purchase lots of hardware. In PoS the next block is randomly distributed, so those with better hardware dont outperform. So you can validate off a solar powered raspberry pi or nuc if you'd like and not underperform someone with a highend gpu, so the hardware cost is much lower, added to this in long run it will be cheaper to participate in staking than having to replace gpus/asics to mine with.
I don't see how this leads you to think it is unfair in comparison to mining? Upfront costs pretty similar, running costs cheaper, long term hardware replacement costs much less.
I'm not seeing much difference in terms of accessibility. In theory PoS is easier because PoW requires actual hardware and/or more technical knowledge.
Hydro, wind are other possibilities.
Sure. You can easily create your own conventional fiat currency too, you just need to set up your own nation.
(For values of "we" denoting various constitutional democracies of the so-called free world.)
Further, whether or not some folks move to ethereum is more or less irrelevant to whether BTC carries on doing what it's doing. The problem is not individuals making the switch, it's getting enough people to switch in order to reduce the energy footprint of BTC.
The other big change on the way is a massive increase in scalability, which I'm hoping will help move the market in a more sustainable direction.
Et voilà!
"Some" people think $X is now important, and thus, the rest of the world shall no longer be able to produce judgements on either $X or "those people".
I think it is definitely up for debate, and we can ask questions such as how absurd $X actually is (or is not), how absurdly wasteful (or not) $X is, how many "some people" is, whether the assumption that $X is important for $Y is true (or not), etc.
Please...
And there is incentive to improve the total energy use. Every participant in the system pays for the electricity that secures bitcoin in the form of inflation and transaction fees. If some alternative to Bitcoin can provide all the same benefit but with less inflation and lower fees, then there is a good reason to switch to that alternative. And people are trying to innovate here continuously, the blockchain sector at this point is getting more investment than the AI sector.
The only problem Bitcoin mining solves is the lack of identification among the miners (i.e. the "Sybil attack" problem). Seems pretty obvious to solve the problem by introducing identity, particularly given that the large miners / mining pools are not really anonymous. Sacrifice the small miners who contribute little to the system, set up a consortium, and enjoy whatever benefits the distributed ledger provide without the waste.
(Yes I know, banks are evil, how dare anyone suggest that we acknowledge any authorities in a system, why should we trust the banks, etc.)
This is a multi-trillion dollar opportunity, if it's that easy, then just do it!
[1]: https://www.statista.com/statistics/881541/bitcoin-energy-co...
Further: https://hackernoon.com/the-bitcoin-vs-visa-electricity-consu...
Bitcoin's current market cap is about $600 billion. There are quadrillions of dollars worth of capital in the the world, mostly managed by banks. Bitcoin remains EXTREMELY inefficient in comparison.
Mining bitcoin is a growing contributor to energy consumption, and subsequently environmental damage and harm.
Similar precedent?
If you want to save the environment, regulate the production of electricity irrespective of how that electricity is put to use. Let the market figure out how to allocate the electricity to various tasks.
Everything else you’ve listed provides subjective value to the user, which makes them hard to attack. Who can say what the value of skiing is to a society in terms of kWh? There is no way to objectively compare the value of energy spent on a ski lift vs. driving to see friends; that’s all subjective value.
But the issue is that Bitcoin isn’t supposed to provide subjective value, it’s supposed to provide objective value; it’s literally supposed to be money. Once you remember that it’s supposed to literally be money, then comparisons to ski lifts become extremely disingenuous. It also becomes fair to compare Bitcoin against other competitors that provide the exact same service to society, comparisons that make Bitcoin look very wasteful indeed.
even if it never proves to be a viable currency, a secure digital store of value is objectively useful. especially if you're in a country experiencing institutional failure, risk of hyperinflation and so on.
The only reason I don't laugh at these arguments is because I'm utterly exhausted by hearing them. The value prop for bitcoin is, fundamentally, circular. It's valuable because it's money (like gold!), but when you point out how it's an objectively crap currency, it's suddenly a store of value. When you ask why it has value, it's because it's the currency of the future. Round and round it goes.
> even if it never proves to be a viable currency, a secure digital store of value is objectively useful.
I mean, you're just asserting that it stores value. But, why does it have value?
Money's value is also subjective, I'm not sure what you think is objective about it.
Sounds like you're just trying to dodge the comparison.
Not only is that not true, but if to was it would just render “money” a non-concept, because definitionally value (in general, not just of money) is subjective.
The purpose of any monetary system is to facilitate the exchange of goods and services. That’s why humans make money; to avoid the need to barter or depend on social credit systems that don’t scale well. This provides us some objective goals with which we can compare and contrast monetary systems against; while what one does with money is subjective, we can objectively compare the efficiency and ease with which a monetary system can facilitate transactions. In this area Bitcoin does terribly. This is probably why Bitcoin advocates have mostly moved onto “it’s a store of value”, that’s more a more defensible proposition.
“Everything is subjective” is a (reasonable) epistemological argument about all access to data about the world being through subjective lenses, and thus all conclusions about the world being grounded in subjectivity. But that's not the sense in which value specifically is subjective.
Value specifically is subjective because value is dependent on the subjective utility functions of people who have (or who might seek to acquire) the good and it's competing/alternative goods.
> This provides us some objective goals
That's about the value of a monetary system not the value of money, but both the specific goals, and more particularly how they are weighted against each other, remain subjective and the source of considerable disagreement.
Ok. How much does ease of use matter for the value of a currency? 50%? 20%? 80%? What about all it's other characteristics?
You can certainly be objective when comparing each characteristic in isolation but the value of the currency depends on how all of them are weighted against each other, and that is completely subjective.
Just like the value of anything else. Even the same person might change the weights they use to value something depending on what's going on in their life.
The original poster's argument was that we all "waste" power watching pornography and going on skiing trips, so how dare we judge Bitcoin. My counter argument is that they're mixing up energy usage between subjective and objective utility in an attempt to shift Bitcoin into a harder to compare category.
Subjectively, how can we judge the relative utility of a kWh spent on entertainment? The utility of each of the activities listed (minus Bitcoin) are all literally in the eye of the beholder; we can't possibly hope to compare the utility of a kWh spent on pornography vs. skiing. Obviously we can compare energy usage per minute of each, but comparing the utility of a kWh spent running a ski lift vs. PornHub's servers really just breaks down to which form of entertainment you value more.
My issue is that Bitcoin is supposed to do something objective; it's supposed to be money. This means that we absolutely can (and should!) sit down and compare it against its alternatives on numeric values, such as kWh consumption. The moment one starts actually comparing Bitcoin against its direct competitors in measurable categories it starts looking really bad, which is probably why its proponents try to prevent that.
> You can certainly be objective when comparing each characteristic in isolation but the value of the currency depends on how all of them are weighted against each other, and that is completely subjective.
Back to value now.
Ideally currencies aren't supposed to have value per se, rather other things are supposed to have value in terms of it. Obviously this runs into the reality of multiple currencies and exchange rates, but at the local level it actually works this way. You and I might disagree about the relative value of a product, but we express our own disagreement in terms of dollars. We don't disagree about the relative value of the dollar itself. This is why inflation is usually measured in the shift of common goods and services in terms of dollars, since measuring the value of the dollar itself is a fool's errand.
As far as the value of Bitcoin in terms of USD, that's a subject that has been pretty thoroughly dug into. I doubt that I'll add anything new and interesting here.
According to whose ideals? Currency is a thing used as a medium of exchange. Like any thing used in trade, it will have value determined by supply and demand, both to individuals and in broad markets, and like all things that value will vary individual in ways that are subjective but in some broad patterns predictable (e.g., declining marginal utility is true of money as it is of anything else, though the fungibility of money suggests that the decline should be slower in terms of how much additional utility you can derive from money, compared to other things, before losing any given proportion of starting marginal utility.)
> You and I might disagree about the relative value of a product, but we express our own disagreement in terms of dollars.
That's not because we agree on the value of dollars ($/util) but because we agree to use dollars as a currency of account and/or medium of exchange.
> We don't disagree about the relative value of the dollar itself.
Relative to... what? I mean, the entire idea of mutually beneficial trade requires disagreement on relative value of the goods exchanged, and that doesn't change when one side of the exchange is dollars. So, yes, we probably do disagree on the most relevant relative value of dollars to the exchange, otherwise the exchange wouldn't happen.
I don't care how you value something (in terms of how much utility it gives you), I care how much utility it will cost me to get it from you. I don't need to concur with you on the value of the dollar to exchange dollars with you for goods.
> This is why inflation is usually measured in the shift of common goods and services in terms of dollars, since measuring the value of the dollar itself is a fool's errand.
Measuring what you can exchange something for is measuring it's (market) value, which is the only measurable (on a ratio level) kind of value. Subjective utility can be measured (with difficulty), but only to an ordinal level (x > y), and only for an individual.
It's impossible to have a good debate if you from the get-go insult everyone that disagree with you and heighten bitcoin to something not allowed to be criticized because some people believe it can be important in the future. As if that absolves something from all sins.
Yeah, but those people are wrong. It's perfectly reasonable to judge them for doing harmful actions in service of a wrong belief.
How do you know this is a wrong belief that will stay wrong?
Put more simply: just because gay rights campaigners were ultimately vindicated doesn’t mean you’re their modern equivalent.
How do you know it won't?
Just because some beliefs that used to be "wrong" are now considered "right", does not mean all beliefs that used to be "wrong" will in the future be considered "right".
As the quote says, "They laughed at Columbus, they laughed at Fulton, they laughed at the Wright brothers. But they also laughed at Bozo the Clown."
Here is a primer on why BTC and crypto are important to the future of the global financial system.
https://research.stlouisfed.org/publications/review/2021/02/...
As another poster here shared, a single transaction uses upwards of hundreds of kwh. That kind of energy that moves thousands of pounds hundreds of miles, or power a typical US household for almost an entire month.
I believe the research is useful, but to base an international currency around it with these costs is not
Bitcoin is capable of handling 4 transactions a second. If you've created a financial system that consumes more energy than Argentina and can't actually handle the transaction requirements of a decent sized mall, then I'd begin to wonder what definition of "solid" you're using.
> Also you shouldn't look at it in terms of energy/transaction, the energy consumption isn't a function of transactions.
We can look at energy consumption per block, but there's no way to slice and dice this in a way that doesn't make Bitcoin look like a massive waste of energy compared to competitive systems.
People speculate on loads of assets which have no real life utility. For example, art or classic cars.
Also, Bitcoin has value and if you wanted, you unlock it and spend your money without even selling your asset, there was a discussion the other day about defi, highly recommend checking out MakerDAO if you want to have a practical use for your Bitcoins.
Assuming I'm playing with someone across the country, I hop 13 routers in a quick traceroute.
Assuming each router is commercial hardware (~400W) and my traffic completely saturates them, that's 5,200W.
Plus the two machines at the end of each line, assuming they're beefy gaming PCs/servers with 1,000W power supplies at 100% load just for this game. That's 2,000W.
Playing a 30 minute Starcraft game comes to 3.6kWh, or two orders of magnitude less than a bitcoin transaction. It's almost certainly less than that since my assumptions were very conservative.
~~~
For something live like a concert, a 54,000 sqft hall uses about 1,100 kWh of power per day (lighting, HVAC). Plus 15kW of speakers for a 6 hour concert is 1,190 kWh. Divided by the 6000 people attending, is 0.2 kWh per attendee. Adding a 10 mile solo drive per person is about 3 kWh. Or again about 2 orders of magnitude less.
~~~
These aren't good comparisons when I could do hundreds of each of the activities you listed for the cost of one transaction.
obviously this raises the question of what is and isn't excessive, but I think there are apparent cases where the benefits of excessive energy consumption people clearly don't out weight the cost - see flying, cruises, rampant shopping, etc.
I think Bitcoin and similar cryptocurrencies fall into that category, especially when there are other coins that require nearly as many resources to function
No, seeing a bunch of rich nerds wasting massive amounts of energy in a time of environmental crisis so they can make millions convincing people a store of value is actually a currency, and then getting mad about it, is not hypocritical.
> While not everybody agrees, this may be more important than countless other ways we use energy,
It's not. It's a massive waste. Stop killing the planet.
I guess if you got stats on how much porn they watch in Argentina you would be well on your way to answering this question. Same for the rest.
I think the more interesting thing is: as bitcoin becomes more difficult to mine energy needs go up, but countries are working hard to bring their energy usage down. Can bitcoin be overtaken on the downward journey by a country, or will it always be bitcoin overtaking countries on its upward swing. Is there some country decreasing its usage as bitcoin increases its, and the two pass each other like ships in the night.
What is the next country most likely to be surpassed by bitcoin?
If the enegry used in Argentina <= energy used in bitcoin transactions.
and, if people living in Argentina are doing any of the things listed (watching porn, etc).
Then the energy used to watch all the porn in Argentina must still be included as part of the Energy use of Argentina; thus less than the use of bitcoin. (I guess this would have to assume the porn is also hosted in Argentina; but I would imagine at least 1 porn unit is hosted and viewed internally to Argentina).
Also how much bitcoin is mined in Argentina, obviously less than 50% of the world's bitcoin - but how much less!?!
We also need to talk to South Africa about Youtube.
Difficulty adjusts up and down as needed to maintain an average of 1 block every 10 minutes, it doesn't just tend to infinity.
It's mostly correlated to the block reward, miners won't spend more money on energy than they get back from mining blocks.
The difficulty adjustment goes both ways, if blocks start taking longer than 10 minutes to be mined (for example if some large miner stops mining for some reason) the difficulty goes down, which likely means less energy is used.
You're correct that the actual adjustment is on the number of computations, so the correlation to energy use isn't direct, different machines can be more or less efficient at making those calculations.
People are free to be judgmental about anything they like.
Banks, exchanges, government tax agencies, accountants, money printing, retail cash machines (ATM, registers, etc) and all the way to gold mining.
[1]: https://www.statista.com/statistics/881541/bitcoin-energy-co...
"First of all, Bitcoin and Visa are fundamentally different systems. Bitcoin is a complete, self-contained monetary settlement system; Visa transactions are non-final credit transactions that rely on external underlying settlement rails. Visa relies on ACH, Fedwire, SWIFT, the global correspondent banking system, the Federal Reserve and, of course, the military and diplomatic strength of the U.S. government to ensure all of the above are working smoothly.
Any energy comparison must take the above into account – including the externalities from the extraction of oil, which implicitly backs the dollar. As those who make this comparison inevitably fail to mention, the dollar’s ubiquity is partly due to a covert arrangement whereby the U.S. provides military support to countries like Saudi Arabia that agree to sell oil exclusively for dollars. It’s worth noting that the grossly oversized U.S. military, whose presence worldwide is necessary to backstop the international dollar system, is the largest single consumer of oil worldwide."
And if you want to start talking about the Fed and US imperial power, then we have to start talking about the bitcoin hype industry which exists to pump the value of various cryptocurriencies. Cruises, conferences, etc, etc. Besides, it's not as if we could get rid of US imperialism or oil extraction by switching from USD to BTC. You're just naming tangentially-related institutions with high externalities, not actual costs of USD transactions.
This is a deliberate obfuscation on the massive inefficiency in Bitcoin's transaction infrastructure. We don't need to talk about geopolitical power to talk about Bitcoin's transparent wastefulness.
Half of them think people are mining Bitcoin on GPUs, and almost none of them know about Proof of Stake coins. Not that I want to excuse the egregious power consumption of PoW coins, but I do wish the holier-than-thou crowd would at least do a little more research.
You can power a typical US household for almost an entire month using the energy of a single bitcoin transaction. What utility does Bitcoin bring with that single transaction? Is it worth the measurable harm it's doing to our ecosystem and human lives?
I'm personally fully onboard with Bitcoin and all PoW coins being crap and wish they would die, leaving only PoS coins in the crypto space.
The difference is that, for all of these, the incentive is to lower the energy usage. For Bitcoin, the incentive is to increase the energy usage, until the amount of energy used costs the same as the amount of Bitcoin received by the miners.
If you have a carbon tax? Then sure. But if you dump all your emission on the rest of us and wash your hand because "you paid for it", then yes, we will question the value of a waste of energy because that's really the only thing we can do.
Are people concerned with the negative externalities of energy usage? If so, it seems like the real issue is that all energy use is "bad", anything that causes people to severely increase their energy usage is especially bad, and bitcoin is one such thing.
But even though it's bitcoin in practice, the real issue seems like not being able to correctly price energy.
YES.
> anything that causes people to severely increase their energy usage is especially bad
YES.
This is not hard. The earth's climate is being affected by the emissions from our energy demands. Most nations are trying to control emissions and one major way of doing that is energy efficiency. Bitcoin comes along and is anti-efficient, incentivises using as much power as is still (just about) profitable in mining, and creates nothing but a speculative financial instrument on the back of it. It looks like the worst kind of insult to anyone that gives a crap about climate change.
Rough analogy to "safer systems over safer processes": if an intern presses a big red button that brings down google, the problem isn't that they pressed that button, it's that there's a button any intern can just press to bring down google.
The fact that the market allows trades that are net negative is a bug. Bitcoin just happens to be the intern that pressed the button.
BUT, if we're in a state where we can't get rid of the big red button, it seems reasonable to get people to stop pressing it in the interim.
There are baby steps in some places, and there is massive progress in some countries towards renewables and carbon-zero energy. But in the current state, huge increases in energy consumption are a bad thing.
So I think we're in a state where we could potentially get rid of the big red button but a lot of people don't really want to and the realistic chances of doing so are basically zero. And in that situation, yes, we call out the button pressers.
It's not a problem only in the ethical framework of the free market, where the morality of any kind of consumption is judged only by its cost to society.
So for example, in the free market ethics, it's perfectly acceptable, when the water is generally scarce, for somebody to have a swimming pool in their garden (definitely not a necessity in that situation), as long as he can pay for it.
But many, if not all, societies do not fully accept this ethical framework. Often, we collectively agree to limit frivolous usages of extremely scarce resources.
People who use disproportionately large amounts of electricity should absolutely be judged (yes, this includes things other than btc).
Indirectly, if a lot of people use it for payments it may be worth more and attract more mining competition.
There are perhaps, some reasonable arguments for using crypto-currencies, but buying groceries is not on the list. Buying Houses... *MAYBE*, since that information is already public anyway.
It takes about 30 W to watch video in a browser [1].
Assuming every internet user watches 85 minutes of video per day [2] (517 hr/year), video consumption is 52 TWh per year. Or less than half of than the bitcoin network.
Google uses 12 TWh per year [3]. Assuming Google is entirely focused on serving the world's video (it likely could), that still is ~half of the bitcoin network.
(France consumes about 480 TWh per year [4])
[1] https://techcrunch.com/2013/06/05/microsoft-internet-explore...
[2] https://www.marketingcharts.com/digital/video-110520
[3] https://www.forbes.com/sites/robertbryce/2020/10/21/googles-...
Energy usage of it is ridiculously high and people are totally allowed to question how wasteful it is, no matter if you allow them to.
If quantifying the energy usage of Bitcoin makes you angry, you should probably self-reflect a bit.
This is a very unbiased source, and nothing they have published is untrue.
Incidentally, I am learning about bitcoin now since it is clearly becoming mainstream and it is related to my job. I am trying to build a miner ( I don't want one click zerohash solutions for variety of reasons ) on Ubuntu derivative ( POPos ) and now I am stuck troubleshooting pool connections. Anyone could recommend a reliable resource? I am starting to get really aggravated by having to google every single error encountered.
It's not, and doing so is a hard problem, requiring a global solution, against the wishes of many interests and industries. It doesn't seem likely any time soon.
Really? You mean that just because you have used the word "triggering" (there are no other meaningful arguments in your comment), that would somehow invalidate an argument? What grade is that logic from?
- Bitcoin consumes so much energy! Think of the planet!
- Iran, China, and Russia mine bitcoin! They are our enemies!
Indeed it does reek of hypocrisy. Oh, now you care about the environment and international competition? Please...
99.44%/0.56% = ~178 according to their estimate. So if you want to compare, the premise is that there are no more than 178 things on Earth more valuable per watt, no more than 178 things to compare to... That is absurd.
Bitcoin can be used as a store of value (among other garbage text that people have thrown into the blocks as a joke) but the newer blockchain solutions also allow from "smart contracts" which BTC does not.
Personally I don't see why Elon Musk invested so much in BTC instead of things like ETH which are much better solutions and stores of value.
The way it works is that "validator" nodes confirm the blocks. The validators are randomly chosen based on the percentage they have staked.
You stake by owning the coin and locking it up using a staking mechanism tied into the protocol. This locks up your coins for a set period of time.
If a validator does not validate correctly or fakes the transactions then they run the risk of being "slashed". Slashing means they forfeit what they have invested.
Usually you need to stake $10K+ USD but there are also pools where people can combine their money.
Both pools and proof of work mining farms suffer from large groups consolidating the validation power.
One of the newer blockchains (Caradano) introduces the concept of a penalty for large pools in favor of having lots of smaller validators to make the network more resilient to a single group having too much validation power. This encourages decentralization.
The fact is, I see all of those massive distributed consensus algorithms as much more robust than they appeared initially. 51%/double spend attacks in practice are extremely hard to occur because of the exposure/publicity of the ledger and how hard it would be to capitalize on crashing the currency (PoS/PoW does not change it).
They're not mathematically provable and the jury is still out. Attackers who know some exploit might be waiting for the much larger Ethereum to switch to PoS so they can reap maximum profit.
How many of those businesses have been rent seeking countries/states/locations that subsidize electricity for their populations?
Electricity is one of those things most of society has deemed an essential good, and as such has subsidized it for the poorest among us. Bitcoin farmers are abusing that system to turn the government subsidies into personal profit for a handful.
Let's not even begin to equate THAT to someone going to a concert put on for the benefit of and at the cost to those participating.
Sounds like an argument for giving subsidies to the poor instead of anyone using electricity.
Are you actually seeing this or are you conflating criticisms of bitcoin with criticisms of bitcoin miners? Because I feel like I see a lot of the former and very little of the latter, but maybe I'm looking in the wrong places.
I think the main problem people have is the actual result of the mining is useless, say compared to using all those computers for MI or Folding @ Home.
I think a better solution would be to get rid of these random bytes and replace them with a Folding @ Home or similar solution, where the computing power you donate results in you getting X bitcoin. Things that are a positive on society, rather then a negative.
But then again that is me being judgmental on others, maybe people care a ton about that string of random alphanumeric characters.
For PoW to work it must be a costly signal. If you introduce positive externalities of mining (such as Folding @ Home) the system isn't sustainable.
So yes, I absolutely do judge people who leave an SUV idling in their driveway 24/7 because "you never know when I'll need to jump in and run away from government agents"
Bitcoin energy consumption is not a function of the number of transactions. A node broadcasts a transaction which miners then include in a block which, within limits, can have an arbitrary number of transactions. It is the Proof of Work(PoW) contest to find a valid hash for the block at a certain level of difficulty that creates a valid block.
Further, with Layer 2 solutions, a single transaction in a Bitcoin block can be "dense" with the value of an arbitrary number of transactions that occurred in Layer 2. That is Bitcoin providing the settlement layer.
Importantly, because Bitcoin is a timechain where the current blockheight represents the entire history of Bitcoin.
"The average cost per transaction isn’t an adequate metric for measuring the efficiency of Bitcoin’s PoW, it should be defined in terms of the security of an economic history. The energy spend secures the stock of bitcoin, and that percentage is going down over time as inflation decreases. A Bitcoin “accumulates” the energy associated with all the blocks mined since its creation. LaurentMT, a researcher, has found empirically that Bitcoin’s PoW is indeed becoming more efficient over time: increasing cost is counterbalanced by the even greater increasing total value secured by the system."[0]
[0] : https://danhedl.medium.com/pow-is-efficient-aa3d442754d3
And those limits come up to the theoretical maximum of was it 7 or so and in practice around 4
https://www.blockchain.com/charts/transactions-per-second
Also PoW is hilariously inefficient. Because the amount of energy one needs to spend is basically related to the amount of value one could grab by cheating, so if all economy would be based on Bitcoin we'd be talking about basically cooking the planet due to PoW.
When Satoshi originally devised PoW it was more about owning the hardware and using that as basis for voting. Energy costs were miniscule. He simply didn't foresee the, now obvious, result that it will became a function of burned energy rather than amount of hardware out there.
> https://www.blockchain.com/charts/transactions-per-second
The link you provided indicates transactions added to the mempool per second! The mempool is a cache of broadcast transactions from which miners pick transactions to be added to the next block.
At the current block height, 2700 transactions were in the block. https://mempool.space/block/00000000000000000007a3688746c1d0...
> Also PoW is hilariously inefficient. Because the amount of energy one needs to spend is basically related to the amount of value one could grab by cheating
Your statement is entirely unclear. Could you restate it? For Steelman purposes, I'll ignore the non-sequitur about cheating.
You claim that algorithm x is inefficient in absolute terms? Assuming you're an engineer, you know that engineering operates by comparisons and tradeoffs. PoW is how Bitcoin provides final settlement of transactions and unforgeable costliness compared to existing systems of money (e.g. fiat) and money transfer(e.g. visa, paypal, swift) which are all centralised and built for censorship, while bitcoin is decentralised and censorship resistant. And it provides final settlement of transactions every hour for thousands of transactions. "Finality" and "Unforgeability" are the terms you should attend to. These are both tied to hashrate which is tied to the profitability of mining the heaviest chain.
"Bitcoin has unforgeable costliness, because it costs a lot of electricity to produce new bitcoins. Producing bitcoins cannot be easily faked [..]" [0]
"So what are settlement assurances exactly? They refer to a system’s ability to grant recipients confidence that an inbound transaction will not be reversed. Wire transfers using a messaging system like SWIFT are popular in part because they are practically impossible to reverse. They are considered safe for recipients because originating banks will only release the funds if they are fully present in the sender’s account. [...] recipients of a Bitcoin transaction can have extremely high confidence that, once buried under a few blocks, a transaction is unlikely to be reversed."[1]
> When Satoshi originally devised PoW [...] Energy costs were miniscule.
I'm not sure what you mean. In general, energy costs seem to be dropping over time https://ourworldindata.org/grapher/levelized-cost-of-energy
> [Satoshi] simply didn't foresee the, now obvious, result that it will became a function of burned energy rather than amount of hardware out there.
I'm wary of trying to interpret Satoshi, but here are his own words:
"I think the case will be the same for Bitcoin. The utility of the exchanges made possible by Bitcoin will far exceed the cost of electricity used. Therefore, not having Bitcoin would be the net waste. [...] Each node’s influence on the network is proportional to its CPU power. The only way to show the network how much CPU power you have is to actually use it." [2]
[0]: https://medium.com/@100trillionUSD/modeling-bitcoins-value-w...
[1]: https://medium.com/@nic__carter/its-the-settlement-assurance...
[2]: https://satoshi.nakamotoinstitute.org/posts/bitcointalk/327/
> Your statement is entirely unclear. Could you restate it? For Steelman purposes, I'll ignore the non-sequitur about cheating.
By cheating I meant making a sidechain that would become longer than the mainchain, thus enabling a double spending attack. If the amount of money to be made in double spending attack is higher than honest mining someone will make it, the only thing protecting against that is that the cost of mining must be large enough compared to value being transferred.
>I'm not sure what you mean. In general, energy costs seem to be dropping over time
Back when it was CPU mined. Before even the first GPU mining. It was just about proving that you have an actual HW dedicated into the task.
Exactly as mentioned in the quote that you said. He didn't have a clue that it would become dedicated HW that has only a single function, burning energy to calculate SHA256 and nothing more.
Also do note that the whole concept of non mining node was foreign. Instead of the original design of nodes that mine we're in situation where nodes don't mine and most mining happens in centralized farms.
A double spend attack can only spend the attackers coins.
> If the amount of money to be made in double spending attack is higher than honest mining someone will make it, the only thing protecting against that is that the cost of mining must be large enough compared to value being transferred.
That's precisely the game theory and why the network remains secure. It's addressed in the whitepaper and fundamental. Economic incentives are the security model. [0]
I'm not sure what the rest of your points have to do with settlement finality and assurances so I can't address them.
There's been a decade of analysis of Bitcoin engineering. I'm yet to hear anyone venture an original criticism that hasn't been rigorously and extensively rebutted already since genesis.
[0]: https://blog.lopp.net/are-chinese-miners-threat-bitcoin/
The reason I linked to a block was so that you could see that transactions can have arbitrary numbers of outputs. See: https://news.ycombinator.com/item?id=26099812
The energy usage of Bitcoin doesn't meaningfully go up with more transactions, so pretending that each transaction uses some specific amount of energy is just misleading.
And if the maximum daily number of transactions is more or less fixed, and the total energy spend is also relatively stable, then it’s very easy to calculate the energy cost per transaction.
You don't understand how transactions work.
A transaction can have arbitrary value, an arbitrary number of inputs, and an arbitrary number of outputs.
Therefore Bitcoin has infinite throughout and 1 hour confirmation/finality latency.
An example:
My company has 100 engineers each paid USD10k in bitcoin per month. We generate 1 transaction worth USD1M with 100 outputs.
Similarly when paying numerous suppliers for hardware, machinery, logistics, transportation, catering. 1 transaction of high value with numerous heterogeneous outputs.
Transaction count is not the correct way to measure the throughout of the Bitcoin network at a given block height or over several retargets.[0]
[0]: https://medium.com/@hasufly/an-analysis-of-batching-in-bitco...
Nah. You don't need to double and triple down on wrong ideas and metrics that are scientifically spurious. You know calculus so you know multiplying by averages won't tell you what you want to know.
Transaction count relative to energy usage doesn't tell you what's valuable about the observed system and its energy consumption, which is its decentralisation, censorship resistance, assurances, and trustlessness.
Assuming you care about logic, simply update your broken mental model.
Because batching will increase as Bitcoin grows, and has practically infinite throughput, its efficiency improves exponentially by securing more value relative to energy consumption.To secure ever more value using the Bitcoin network, humans are incentivised to find and build more efficient energy sources.
Further, an arbitrary number of transactions can occur securely offchain and get aggregated and finalised on-chain i.e the settlement layer. In fact this is how the future will be. See Lightning, Liquid, other L2 designs. The order of operations is first to have a bulletproof settlement layer.
Bitcoin was designed to be the single planetary currency. Spend time studying it and you'll realise that Satoshi was smarter than all his current critics who all imagine they've brilliantly and uniquely perceived some fatal flaw in Bitcoin's engineering, game theory or economics.
Remember, if Bitcoin were a company, it would currently have a market cap of >USD800B. Few programmers can build anything that valuable let alone critique it meaningfully.
Let go of useless, poorly reasoned concepts. Humble yourself and study Bitcoin. It's a wonderful optimistic scientific discovery on par with fire, antibiotics, and electricity. http://lopp.net/bitcoin-information.html
> what's valuable about the observed system and its energy consumption, which is its decentralisation, censorship resistance, assurances, and trustlessness.
The thing you need to understand is that nobody cares about this, except a small fringe of libertarians and computer scientists. Sure, it's cool that it's possible but not a single one of these would come up if you ask the man in the street (or your average economist in the street for that matter) what he wants from money.
> Humble yourself and study Bitcoin
I built a prediction market that used bitcoins in 2014, and ran a small but profitable crypto quant fund a few years later. I think crypto currencies are fun and there are one or two legitimate use cases, but the way you and other zealots look at bitcoin as a kind of panacea is just insane. Your fervour borders on a religious mania.
In reality there is still almost nothing that crypto can do that anyone actually wants, and bitcoin is far from the best even at what it actually does.
And no, the fact that the price of bitcoin is high does not indicate that people think it's useful. It's still a purely speculative asset, almost nobody uses it as a medium of exchange, and those who do are either criminals or zealots. Close to zero non-criminals use it because it solves an actual problem in the real world.
Not saying this will never change, but that is where we are now, more than a decade later.
Um. Don't be obtuse and obdurate. This conversation is getting really tedious. Look at the market, look around the world. Actually research the statements you make. There are already millions who care.
> I built a prediction market that used bitcoins in 2014.
You built on bitcoin yet you never understood how transactions work? That's deeply disturbing. Nonetheless, I sincerely wish you good luck. I respect your effort at building and sincerely hope you keep building winning products.
The market will decide the victor. See you on the builder's battlefield. That's where all the action is. En garde!
> the way you and other zealots look at bitcoin as a kind of panacea is just insane. Your fervour borders on a religious mania.
P.S. I totally want Bitcoin to be declared a religion, if only for the possible tax advantage! Fun times.
> not a single one of these would come up if you ask the man in the street (or your average economist in the street for that matter) what he wants from money.
[sigh] If you asked them what they want they'd have said they want a faster horse, not a car. The purpose of travelling and talking to people is to discover their problems and pain-points not what they imagine the solutions are. The innovator then inserts a solution into the machine.
> bitcoin is far from the best even at what it actually does.
You keep making these vacuous statements yet you don't even have a grasp of what Bitcoin actually does because, apparently, what it does has no value to you. I mean, good for you. What you don't seem to realise is that your inability to look at reality looks like a religious mania.
Now, respectfully, I have to bow out. Code to write, Bitcoin to build on.
No it just always always goes up regardless of transaction volume as the block-difficulty increases infinitely. You've built a system that by design can literally only become less efficient.
It's actually even worse and stupider than if it were a per-transaction energy usage.
[sigh] The difficulty adjustment is so a block is issued on average every 10 minutes. It therefore does not increase infinitely but both increases and decreases depending on the amount of hashpower in the network.
> What is the maximum difficulty?
> There is no minimum target. The maximum difficulty is roughly: maximum_target / 1 (since 0 would result in infinity), which is a ridiculously huge number (about 2^224).
Obviously.
https://www.coindesk.com/bitcoin-mining-difficulty-large-dro...
- There are other, better cryptocurrencies that don't bake the planet.
- There are other, better financial infrastructures that process more transactions and provide a better stable store of value.
- There are other, better distributed computing networks that do more than calculate sha256 over and over again.
People in a free market pay for what they care about. To date, those who use Bitcoin have been happy to pay for the energy the network consumes. In the end, that is all that matters.
Society is made up of individuals. Assuming you don't believe a small cabal of individuals should, in the name of society and ideology, force other individuals to follow their dictates, the questions then are:
- will eliminating Bitcoin really reduce carbon emissions to a meaningful extent compared to other sources of carbon emissions?
- How much are individuals willing to pay to reduce carbon emissions? i.e. skin in the game. One way to pay to reduce Bitcoin's carbon emissions would be to sufficiently/relentlessly short Bitcoin to tank the price or develop/invest in an alternative green currency and let the market decide which is best.
- How much, in carbon emission, are individuals willing to pay for the benefit of a given technology like Bitcoin?
We all pay because of the negative externalities involved with producing electricity. They are not part of the price of electricity currently.
If all countries had robust carbon taxes or similar schemes, then you could possibly argue that the price of bitcoin reflects their true cost. Possibly. But definitely not now.
This contradicts your earlier point that markets can't resolve negative externalities. Presumably a tax will cause a marked market response.
Further, Bitcoin's price is a reflection of demand, not cost. In the long run, however, the price of any currency will likely converge to its cost of production, which is also why fiat is fundamentally a poor store of value.
> You really don't get the concept of "tragedy of the commons" do you?
The tragedy of the commons is mostly in the word "commons", as opposed to "private property".
I merely have a different opinion on how negative externalities should be resolved. [0]
> We all pay because of the negative externalities involved with producing electricity [...]
Such a statement is too nebulous to be useful. Consider that what "we" pay is entirely subjective based on what individuals value. I know people who care deeply about every part per millon of carbon emission while others don't. How then do you propose to determine what "we" pay? Who is this "we"?
Are you going to somehow convince nonplussed people that they are paying for some particular externality that they don't care about? Suffering and loss are subjective.
You want carbon taxes, enforced by some authority who can presumably accurately determine the correct price for such things. All I can say is good luck.
And how many other externalities would you like taxed? At what granularity? Perhaps households or individuals should pay carbon taxes too? What about all that energy wasted on Christmas lights?[1] What's your preferred maximum level of elictricity production that will guarantee carbon neutrality? Is carbon neutrality the most important thing and everything else a distant second?
However, for those who care deeply about the matter, they can make their preferences and values felt right now and every day in the market, which is especially easy to do in cryptocurrency markets.
Organise a coalition to short Bitcoin to protect the environment. Surely there are many of you just on HN alone given that this article was on the front page. Shorting is a form of taxing. Drive the price to 0. Save the environment. If one is not willing to have skin in the game to stop Bitcoin's energy consumption, they are just larping as saviours of the environment.
[0]: https://mises.org/library/austrian-theory-environmental-econ...
[1] https://www.nsenergybusiness.com/features/christmas-lights-e...
Not at all. Things like carbon taxes internalise the externalities. It makes all electricity consumers pay the true cost of electricity, at least as far as can be determined.
I know that libertarians are as dogmatic as any marxist, but it seems to me that you should be more interested than anyone else in internalising the true cost of things into their price?
If you want to rely on the market as much as possible, then all the more reason to make sure that the cost of making things includes all the costs. Only then can consumers make a considered purchase.
As the text in your link so eloquently puts it:
"Social inefficiency arises when the social costs associated with external effects, such as air or water pollution, are not incorporated into the cost of producing the pollution generating product or its market price."
Almost every single one of your statements here reflect a misunderstanding of my argument, basic economics and/or your own Austrian philosophy.
You think I don't understand my own thoughts (which aren't Austrian but merely mine). Meanwhile I think you don't understand what I'm expressing. Thus, we agree to disagree. Thanks for the conversation. Bonne chance.
Compared to what else that provides a decentralised, censorship resistant monetary network without trusted third parties required to secure it?
> the metric mentioned is not relevant
It's relevant in explaining the energy usage relative to economic value and architecture of an engineered monetary system.
If you have a metric that can explain Bitcoin's design and value proposition with respect to energy consumption better than Dan Held's explanation, you should propose it and logically demonstrate your idea's superior explanatory and predictive power.
I don't particularly feel that any of those characteristics are very important, and I think most people would agree.
> It's relevant in explaining the energy usage relative to economic value and architecture of an engineered monetary system
Again, that is not how you construct a metric for how cost efficient something is. You start with the "job to be done" of the object. And storing all historical transactions forever is seldom desirable.
If you want to measure the efficiency of electric cars vs combustion engine ones you look at things like miles/Wh or CO2 emissions/mile.
You DON'T look at explosions per second or something like that. It might explain how combustion engines work but it is not the goal of a car.
Bitcoin doesn't care what you feel. It exists as an engineering artifact, continues to exist and functions to serve the needs of those who use it. Those who use it don't pay for it with their feelings but with their hard earned money. You evaluate a piece of engineering for what it aims to achieves not what you feel it should achieve.
Bitcoin at block height 670061 has a market cap >USD800B. That's a lot of people who feel the characteristics of Bitcoin are valuable.
Cf. A statement like: "I don't particularly feel HD screens on a phone are important and I think most people would agree that they're a waste and bad for the environment. Therefore HD screens shouldn't be in smart phones."
> if you want to measure the efficiency of electric cars vs combustion engine ones you look at things like miles/Wh or CO2 emissions/mile.
> You DON'T look at explosions per second or something like that. It might explain how combustion engines work but it is not the goal of a car.
Again, Dan Held said:
"the efficiency of Bitcoin’s PoW, should be defined in terms of the security of an economic history."[0]
That history is perhaps analogous to the entire lifetime travel distance of the vehicle. Let a coin be a vehicle. There are 21M coins. Let a block be a mile long and infinitely wide (for transactions of any value can be contained in a block without limit to the value), for instance, and you can get your miles/Wh. Or just humbly study the Bitcoin timechain and understand what it does and why it does it.
[0]: https://danhedl.medium.com/pow-is-efficient-aa3d442754d3
Torturing metaphors: it's more useful to say that the gas/mile (kw per block) fuels all 21 million cars simultaneously, not just one car, and ensures that all the roads they've travelled remain useable, and that anyone in the world can use a car at any time and verify the journey it made and the cargo it carried. Further, each car can carry an arbitrary amount of cargo (the value of the transaction).
And in any case, there are other ways to build a global system for transferring money that is many orders of magnitude more efficient, so there is still no reason for society to support the cost of bitcoin, because it’s a terrible alternative.
And no, people don’t want or need a completely decentralized, trustless etc payment system. It’s a non-goal.
Good. Build one. That's a huge arbitrage opportunity. The market will decide. Meanwhile we'll continue building systems on top of Bitcoin[2]. Game on. See you in 50 years.
> And no, people don’t want or need a completely decentralized, trustless etc payment system. It’s a non-goal
Now you're being hopelessly naive to the point of being helpless and ineffective in the real world. Travel the world a bit. Learn what real humans need. Learn history.[0] Learn how many have been ruined by a legacy financial system built on manipulable currencies and fiat.[3]
At the very least, open your mind[1] and just learn instead of pounding your chest to confirm your narrow priors. The goal is to get smarter not less smart.
[0]: https://breedlove22.medium.com/our-most-brilliant-idea-aced3...
[1]: https://breedlove22.medium.com/bitcoin-is-hope-bedce21b3648
[2]: https://dergigi.com/2021/01/14/bitcoin-is-time/
[3]: https://breedlove22.medium.com/masters-and-slaves-of-money-2...
I already know a fair bit, that is not the issue here. And I’ve lived long term in places as diverse as Japan, Russia, China, the Middle East and Scandinavia, so I don’t lack experience of the world. That’s why I know that normal people don’t care about trustless or decentralized money.
As to bitcoin alternatives, there are plenty, both with crypto and without. Many other cryptos are technically far superior to bitcoin, but go almost unused because that’s not the point.
Just about all of mine
Really? give us a source, one who isn't either a grifter, a shill, or a criminal.
Bitcoin may not be around for ever if it isn’t upgraded to be more efficient, but public and private blockchains are here to stay and have real use cases.
You can be a salty Luddite if you want, but assuming proponents are mostly grifters, shills, or criminals just tells me you don’t have a clue.
check your comprehension.
One Bitcoin transaction is about 750 kWh. That's enough to power a typical home for a month. It's enough to drive about 500 miles in an electric car, or (with vigorous handwaving based on EPA numbers) about 200 miles in an efficient gasoline car.
Bitcoin uses about 1/3 the energy of all the datacenters in the world. There are about 120 million Bitcoin transactions per year. If we assume 360 million people are using services that run in datacenters (obviously too low), one Bitcoin transaction uses as much electricity as the server time to support one user across all the services they use for a year.
>Being judgmental about how others use energy they pay for reeks of hypocrisy, virtue signaling and holier-than-thou attitude.
This is an engineering problem.
The cost to "mine" a whole block is even more ludicrous.
The energy consumption of Bitcoin makes a few thousand people rich and that's about it.
Yes other things consume a lot of energy, maybe even more, but that doesn't justify the energy consumption of Bitcoin.
As a species we use energy to meet our goals. Those goals may be situated anywhere in our hierarchy of needs. Some are essential, some could be considered trivial. But they are all important for their consumers.
Bitcoin is now considered by some important for our future finance system. While not everybody agrees, this may be more important than countless other ways we use energy, for much more trivial reasons.
Being judgmental about how others use energy they pay for reeks of hypocrisy, virtue signaling and holier-than-thou attitude.