I'm gonna steal that one, thanks. :D
The upkeep cost for Bitcoin is, and by necessity must be, proportional to the value represented by Bitcoin.
In other words, if you just mine a physical gold block, you don't really have an asset without the state's (or your own) continual upkeep that keeps it protected from attacks.
This completely misses the point, which was one of magnitude:
>> The upkeep cost for Bitcoin is, and by necessity must be, PROPORTIOANAL TO THE VALUE REPRESENTED by Bitcoin.
Also, that upkeep cost is 100.00% to protect the value of existing bitcoin.
C.f., gold:
> If you want to own some gold you need to protect it (usually with the state apparatus of violence, which has massive externalities).
I don't need continuous mining of bitcoin to protect my non-bitcoin stuff.
However, I do need the "state apparatus of violence" to protect my non-gold stuff, including things like my house and my body, and oh yeah, my fucking mining rig!
If all gold disappeared tomorrow, would anything about the "state apparatus of violence" change? No, of course not. That is absurd.
Although as a Brit myself it's amusing to consider myself some kind of atavistic archetype of humanity
This describes Bitcoin too.
I think it's facially absurd to claim that the existing financial system (including military, police, etc) costs anywhere near what bitcoin does, but even if it does, it's irrelevant because bitcoin doesn't provide the same things. Bitcoin is a virtual bar of gold or piece of currency, not a financial system.
"Of the existing 18.5 million Bitcoin, around 20 percent — currently worth around $140 billion — appear to be in lost or otherwise stranded wallets, according to the cryptocurrency data firm Chainalysis"
"“Even sophisticated investors have been completely incapable of doing any kind of management of private keys,” said Diogo Monica, the co-founder of a start-up called Anchorage, which helps companies handle cryptocurrency security. Mr. Monica started the company in 2017 after helping a hedge fund regain access to one of its Bitcoin wallets."
"“This whole idea of being your own bank — let me put it this way, ‘Do you make your own shoes?’” he said. “The reason we have banks is that we don’t want to deal with all those things that banks do.”
Like remembering where the money is!"
https://www.bloomberg.com/opinion/articles/2021-01-12/don-t-...
But let's be honest, Fort Knox doesn't require 0.5% of the world's energy consumption (and increasing) just to continue existing.
False equivalencies don't help this argument. Yes, we know everything requires energy. No, that doesn't make it all the same.
This is a tangent, but it's more fun than the usual Bitcoin fetishizing and bashing.
There is building evidence that neutron star collisions, not supernovae, are the primary source of the universe's gold [1].
[1] https://www.quantamagazine.org/did-neutron-stars-or-supernov...
Unless you've got some dyson spheres lying around that you're not telling me about, I'm going to politely request that bitcoin advocates not expend more energy than we have in the entire world just so that they can diversify their investment portfolios.
Actually though, I wonder if there's an analogy that could be drawn between the real origin of gold (supernova) and bitcoin (mining a block). Both are created as dense byproducts of a large compression event (bitcoin: transactions; supernova: the rest of the star). ?
I was curious about this. What would "significant" be? What is it based on - the number of outstanding blocks? Is this vulnerability mentioned anywhere in the protocol spec?
Mutual funds, the most legible way to get an estimate of the holding cost of securities (since they are required to transact at net asset value) routinely charge between 0.2-1% fees, depending on size and asset class.
Clearinghouses, transfer agents, and cash management firms don't work for free, which is the problem that cryptocurrencies explicitly solve; neither do compliance, KYC, fraud, etc., which most cryptocurrency protocols elide altogether.
Oh wait.. You don't want that functionality, and you're still using up the energy footprint in the event you are correct. One of these delivers significantly less versatility than the other for the same energy investment.
The energy usage of ethereum comes from the proof-of-work DAG, not the solidity execution. You can easily see this by running a (non mining) ethereum node, any decent CPU will churn through the transactions in blocks in a matter of milliseconds (~200 ms per block), not the 13 seconds it takes to generate that block
No? Then it's a calculation. Or an abstract and useless one in your terms.
I don’t have an opinion on this but if you’re making a point, you should be the one providing evidence, not telling others to look it up.
This is different than people blithely spouting “it’s not my job to educate you” when asked to give some support for their controversial, unsubstantiated claim.
Yes, it's work to back up your claims with direct links to a source. But maybe that's a reasonable minimum bar to hurdle to stand behind ones statements.
There’s real uses for Merkel trees in finance - Cryptographically secure history is valuable. I’ve yet to see any problems that blockchains solve that merkel trees do not[1]. Finance and interchange works just fine with just Git - Interchange done via simple published balancesheets with countersignatures by both parties, then merged into “head” on the regular by any form of rollup. It doesn’t have the (well overstated) pseudonymity advantages of bitcoin, and that’s a feature in a well regulated financial market.
[1] With one ridiculous exception: In Iain Bank’s “Excession”, a mothballed war-fleet is resurrected by a traitor who presents enough cryptographic signatures of coconspirators to burn the keys of the real C+C chain. Blockchain would make this much harder - But not necessarily enough harder, even if they had to effectively recreate the military history of an entire total-peace (through superior firepower) civilization.
[1] https://en.wikipedia.org/wiki/California_Gold_Rush#Longer-te...
Bitcoin is not humanity using energy. It is humanity flushing energy down the drain.
"But look at the sun man! That's the real waste"
Are you high?
A more useful perspective is "humanity uses more and more energy for computation". The many devices which enable us to post these comments burn energy. The astronomically high video-traffic these days burns energy. Modelling early universe, protein folding, advanced chemistry... every damn thing we compute has the cost of burning energy.
As an aside, let's not forget how much electricity gets used simply for heating. There's no shortage already of "smart heaters" with a nice side effect of mining you some coins while they keep your house warm. Anything environmentally wrong with that?
See, it's not the endgoal of cryptocurrencies to burn energy; it's simply a cost. Now, thanks to bitcoin, we can have economies of scale drive optimization of that cost: improving the core compute-per-joule ratio of our technology. With all the collateral improvements across the globe with regards to environmental impact.
Could you say that porn distribution industry "kind of by design" lead to people watching more and more porn? Regardless of the answer, thanks to that we can have fast internets now. Similarly with bitcoin: thanks to it, we'll pack more & more bitflips into every joule, up to the thermodynamic limit.
It's a myth from the pro-cryptocurrency crowd.
With recent price spikes, mining is profitable even if you have to pay relative high prices for electricity. You don't need to have cheap energy.
Also, it's another myth that we have an abundance of hydroelectric power that would otherwise go to waste if not for Bitcoin. With modern power transmission it's trivial to send power through the grid to other locations, and nobody is building power plants in the middle of nowhere without a way to send that electricity somewhere else.
Finally, Bitcoin's power consumption is additive. Energy that goes into Bitcoin mining is energy that isn't being used to power cities and other infrastructure, which must still get its power from somewhere.
Don't believe the whitewashing campaigns to downplay Bitcoin's energy usage. It's very bad.
(It's only an upper bound because energy isn't perfectly fungible.)
Renewable energy is also better than fossil energy in terms of environmental damage, but it's not free from damage. A dam is a massive localised environmental impact, and a huge amount of concrete. A solar farm requires (holes-in-ground) mining and significant industrial processing to build. The lower bound on environmental harm is the cost of building renewable energy sources that are used for something so unproductive.
Or is there energy being "stolen" from other uses?
As I wrote: is there any reliable data?
If a billionaire hoarded manufacturing plants and kept them shut down, people would probably be mad, since resources were being wasted, even if it was a net positive on greenhouse gas output.
It is almost exclusively reflected back out into space, and wasted. We have nearly no incentive to capture it, so the energy is being wasted at a mind boggling scale. I've been mining cryptocurrencies with solar power for about 6 years or so.
The great thing about crypto mining is that it creates a price floor for energy usage. This gives people real incentive to build the tools we need to harness the energy on our planet.
[1] https://www.businessinsider.com/this-is-the-potential-of-sol...
I am obviously not an expert but I looked at the magnitude of the energy itself vs the greenhouse effect and it's about 10-100x less potent than the greenhouse effect. But that means that even if we had 100% clean carbon-free energy, we can't continue increasing our energy utilization forever. And we still have a huge portion of the world that is below a first-world living standard and will eventually want automobiles and air conditioning and vacations using jet travel too.
IF we do not level off the energy consumption of the "first world" standard of living sometime within the next 50-100 years then we are on a course to cook ourselves to death even with 100% clean energy.
Whether or not that limit is actually reachable and something we should actually worry about I don't know. i.e: is there enough physical space for that many people on earth where each person uses X amount of renewable energy where the sum of X is greater than the amount of energy the earth can actually capture without being negatively affected.
Solar? It heats the atmosphere, because it captures solar heat which would bounce back.
Wind? Obviously it slows winds down, and who knows how it affects the existing ecosystem. We know how important the gulf stream is, you wouldn’t want to slow that down..
Etc..
As was pointed out upstream, capital and resources are required to get a solar panel, and if its output is directed to something frivolous like crypto mining, those inputs are being wasted. The fact that there remains unused energy from the sun is completely orthogonal to the waste that is happening.
To be clear, I'm less passing a judgement about the efficiency of crypto than I am pointing out that crafting objectively absurd arguments about why it is not actually wasteful helps nobody.
A) the environmental impact of manufacturing a solar panel is 0 and carbon neutral itself (it's not),
B) there's an excess of solar panels available too (not really),
C) the bitcoin miners aren't often running on coal power during the nighttime hours (they often are), and
D) there's nowhere better for mankind to deploy the capital used in deploying miners and renewable power production than for cryptocurrency mining (dubious).
The infinitesimal portion we do manage to convert with the currently available technology shouldn't be pissed away in the wind so lightly.
>Markets facilitate trade and enable the distribution and resource allocation in a society.
as long as a majority of bitcoin mining happens from non-renewable resources, the network as a whole is damaging.
That's not true at all.
You can enter a power cost into this calculator: https://www.nicehash.com/profitability-calculator/nvidia-rtx...
It comes out positive using energy prices from virtually anywhere.
The idea that mining is powered purely by renewables that would somehow otherwise go to waste (that is, not take fossil fuel plants offline) is pure FUD.
Happy?
Whatever original hopeful goals the creator(s) of Bitcoin had with this idea, and decentralised currency...if there was any victory at all it is a pyrrhic one when you look at the externalities.
If you can call a digital gold rush a victory, anyway. The physical one in the US was pretty bad for a lot of people.