Worrying about today's Bitcoin mining is as silly as worrying about plastic straws. Maybe in the future Bitcoin mining could become an environmental disaster, but today it's insignificant.
Further details in https://news.ycombinator.com/item?id=27449443 and https://hbr.org/2021/05/how-much-energy-does-bitcoin-actuall....
If I'm following this right, the only evidence for Bitcoin being mostly based on renewable energy is because people believe it's uneconomical to not be renewable, and not based on any actual attempt to figure out what energy types are actually being used by large mining groups?
Because, especially when you compare across international countries, retail prices are only vaguely correlated with production prices. Many places subsidize the crap out of energy prices, and electricity in a subsidized place could well be much cheaper than in a non-subsidized place, even if the first plant is burning coal and other plant is using wind.
For some specific data points, I believe a large clutch of miners operated out of Inner Mongolia, whose electricity capacity increases in recent years has been dominated by coal-fired power plants (because it's a coal-rich region that doesn't give two whits about environmental effects). I'll also note that there was a story a few weeks back about a coal powered plant being recommissioned solely for mining bitcoin.
Nope, sounds like you didn't look at the references I linked at all. If you want to follow something right, try reading the references, or at least casually skimming them. https://coinshares.com/insights/beware-of-lazy-research-bitc... is one of the sources for the percentages cited in the Harvard Business Review article explaining their methodology (in 02018). It's the polar opposite of what you're saying.
It's also true that there are fundamental economic reasons that Bitcoin mining is mostly done with renewable energy; it's not just a weird coincidence. But it's not just a theoretical prediction.
> retail prices are only vaguely correlated with production prices. Many places subsidize the crap out of energy prices
Yeah, that does happen. Also, outright theft happens; the cheapest energy is energy that you steal. But it turns out that unprofitable subsidies and stolen energy aren't very scalable, because places where the government pays for most of the energy ① tend to have strict oversight of industrial-scale operations, ② don't generate much electricity in the first place, and ③ tend to consider entrepreneurs criminals by default because they increase wealth inequality, so they shut them down when they get found out. When Bitcoin mining (or, say, Litecoin mining) starts to scale up in such places, as it did here in Argentina some years back, the energy subsidies have a way of evaporating.
> I'll also note that there was a story a few weeks back about a coal powered plant being recommissioned solely for mining bitcoin
No, that was gas; my comments on it are https://news.ycombinator.com/item?id=27450889.
You're right that there are a variety of unusual circumstances that can make fossil-fueled Bitcoin mining profitable at small scales in one or another place, so it's easy to find anecdotes of it. But it's not the majority of the network.
Really now?
https://arstechnica.com/tech-policy/2021/05/private-equity-f...:
> Private-equity firm revives zombie fossil-fuel power plant to mine bitcoin
> Few bitcoin projects illustrate the cryptocurrency’s enormous climate impact better than the Greenidge power plant in upstate New York. The once-abandoned power plant was bought by private equity firm Atlas Holdings and retasked. A significant portion of Greenidge's electricity no longer powers nearby homes or businesses; rather, the plant's smokestacks are increasingly pouring pollutants into the atmosphere in the service of mining bitcoin.
https://www.bloomberg.com/news/articles/2021-05-26/china-s-c...:
> China’s Crypto Mining Crackdown Followed Deadly Coal Accidents
> China’s escalating push to rein in cryptocurrency mining was triggered in part by concern that the practice has stoked a surge in illicit coal extraction, endangering lives and undermining Xi Jinping’s ambitious environmental goals.
> Authorities decided to act after concluding the spike in electricity consumption from server farms underpinning Bitcoin and other tokens was a key factor behind rising demand for coal in certain parts of China, according to a person who participated in high-level government meetings on the issue and asked not to be identified discussing private information.
Yeah, my comments on this are at https://news.ycombinator.com/item?id=27450889. Either they're dumb or they're pulling some scam I'm not wise to.
> illicit coal extraction
Yeah, if you steal your energy it can even be cheaper than any energy you have to pay for. But then you get "authorities deciding to act," which really limits your scalability.
Did you mean to say "international environmental disaster"? I don't know in which way it's intentional that Bitcoin destroys the environment. The damage seems incidental.
If, for example, it were possible to create steel alloy in a way that took 1% less energy or made less waste (and thus was presumably cheaper at scale), the trucks would use this slightly more efficient steel.
On the other hand, Bitcoin relies on wasting a certain monetary value of energy for the security of the network. Its waste is adversarial. If we manage to produce 2x the electricity tomorrow and it becomes significantly cheaper, that just means a 51% attack also became much cheaper so people need to waste even more energy mining.
I can't think of any other uses of energy offhand that so actively resist any improvements. I can think of other intentional forms of waste (like dumping toxic waste, "rolling coal", etc), but I can't think of any that are aligned such that making upstream production of a resource more efficient then requires producing even more waste and environmental damage.
It's not like energy use in the world has gone down. If it's cheaper or more efficient it will go up or at best stay the same. Bitcoin has made the transition to more efficient ASICs because that increases profits, it just didn't result in less energy use because now you make more profit.
I don't think you can neglect the price of a new ASIC in a real situation though, those things are very expensive. Where it was first possible to attack the network using regular hardware, it now requires a much bigger capital investment. When ASICs were first released they had a bigger advantage than they have now, it seems unlikely a 2x improvement over the previous generation is still possible (assuming it was possible before, I didn't check).
Right, I'm not saying there will be a new ASIC; just that there will be no innovation in the Bitcoin space (unless they switch out of PoW) that leads to less energy being used.
Bitcoin mining does respond to market pressure, if the price goes down, or you wait until the subsidy halves, there will be less incentive to mine.
So, now we're at two things I don't do because they're bad for the environment.
I don't understand what argument you tried to make. Other than a far fetched attempt at whattaboutism... Is bitcoin's astronomical power drain ok because some hypothetical person might drive a big car or goods are shipped with trucks? That does not follow. I mean, aren't there alternatives to bitcoin that have far lower energy needs? Why stick with absurd non-sequiturs to insist that bitcoin's astronomical power drain is somehow ok?
We’re opining about a system that finally, for the first time in the history of man, might accurately price the cost of the electricity consumed to power the system.
It’s pretty mind boggling but that’s the internet for you.
I agree about cleaning the inputs, but I think the parallelism implicit in your phrasing is misleading.
Bitcoin uses about 12 GW. https://www.eia.gov/outlooks/ieo/pdf/transportation.pdf says freight trucks use 23% of global transportation energy use, which seems to be about 110 quads/year (figure 8-2), so that's 25 quads/year or about 850 GW. (And all of that is fossil fuel, while most Bitcoin energy consumption is from renewables.)
You could say that an 850-kg rhinoceros has a lot of weight and so does a lot of damage when it runs into things, and a 12-kg poodle also has a lot of weight, but there is a noticeable difference when they accidentally crash into your garage door.
Just because I walked by a Chase bank right now... I mean, wouldn't it safe more energy if banks would start turning off their lights from 5pm to 8am and on weekends also?
Investment in environmental disasters? I'd suggest the developed world stop trading with China but we all know people can't live without cheap consumer products, including the computers we're using to post our opinions. How about we drop the USD instead? It's literally backed by petroleum and the US military. Hard to think of anything with a bigger environmental impact. It should be easy, right? Just quote petroleum prices in cryptocurrency. Simple... The hard part is surving the inevitable US invasion and destruction of your country.
If you actually cared about the environment, you would be attempting to invest money into disruptive technologies like BTC that can move money away from traditional banks that have literally funded global corruption, wars, genocide and (surprise surprise), ecocide.
It makes no sense whatsoever and what it tells me is that you're just regurgitating the same dribble that you heard with no critical thought of your own
If they succeed on the other hand at becoming world reserve currency, then that energy usage will be justified since it's replacing something that takes even more energy (current fiat system). In this scenario, your 1% investment has probably grown to be a much larger % of your portfolio.
Note I've had similar debates with my kids: "Why don't we just replace the entire economy and political system with X?"
I really doubt that, at least with proof-of-work cryptocurrencies, since a competitive waste of resources is at the very core of their design (e.g. he who can waste the most, wins). The equivalent part of the fiat network is far more efficient (e.g. a basic money transfer probably takes as much power as a couple of HTTPS web requests to a dynamic website).
Is the development of bitcoin ASICs actually driving any general purpose advances? My understanding is they were just applying existing advanced technology to Bitcoin. The idea of an ASIC isn't new, and Bitcoin mining is niche compared to other areas (e.g. cell phone processors, desktop CPUs & GPUs)
Isn't that called keeping the economy going? There are people and physical capital that need something to do today. You can't save today's time for tomorrow, no matter what kind of money you have.
> Thereby massively misallocating investment in the world simply because people don't have a sound money which they can save for the future.
That sounds a lot like a depression, which probably wouldn't be too painful of an experience to the few people sitting on hoards of money, waiting for the choicest investment opportunities. Everyone else on the other hand...
Yes, saving is impossible. The shiny gold rock doesn't wither. It will be long there after your death.
A shiny rock isn't meaningfully different from fiat either. It's just a token that represents an entry in a ledger. That rock represents that someone else owes you a debt but that debt continues to exist after your death. The only way that debt can be repaid is if someone completely unrelated is born in the future and works to repay the debt of a long dead person. This can't work because that person also has to work for himself to pay for food and shelter. The only reason it works today is because population and productivity growth has exploded and can take care of that debt and even pay above and beyond the original debt.
The reason why fiat rots (inflation) is that the rest of the world rots as well. Gold is the exception, it doesn't rot, therefore it lets you pretend that the rest of the world doesn't rot.
Second, the problem with fiat is that people are saving too much to the point where we have underemployment and in some countries extreme amounts of youth unemployment.
The gold standard failed because the supply of gold was not growing fast enough. The constraints of money creation under a gold standard constrained the maximum size of the economy.
The underlying reasoning behind fiat is that money creation should be driven by demand so that the money supply grows with the economy. A good approximation is that private debt creation follows demand. A growing economy needs loans to finance expansion, therefore creating loans will ensure the money supply catches up with economic growth.
However, the obvious problem is that loans have to be paid back and paying back loans contracts the money supply. If the economy needs $4 trillion and growth ceases then we will actually fall short of the $4 trillion and we will enter deflation and deflation is a self reinforcing cycle that prevents further growth. We are running into the same problem as the gold standard. The money in circulation is not adjusting to the level needed for the economy. The private banking sector as the sole source of money simply isn't enough as it requires lowering the interest rates until you hit 0%. Without negative interest rates the system just stops there. This isn't surprising. Tally sticks [0] function the exact same way as fiat does. There isn't enough silver/gold in circulation so people create a ledger on top of it. When the ledger has served its purpose the two sticks (each representing credit and debit) are united and then destroyed together. A short term fall in growth doesn't imply that we have reached the end of growth. Ending the economy today is obviously a mistake.
What is needed is a secondary method of money issuance in the hand of the public. Direct issuance of money by the government generally suffers from discipline problems. Politicians just can't get enough money and when there is too much of it they refuse to stop, often there are legitimate reasons to not stop. What we'd need is an independent organization whose sole function is money issuance based on a macroeconomic measure that is important even if we don't have real growth right now.
Turns out, what the fiat system needs isn't real growth to begin with. It only needs nominal growth. That is, nominal growth caused by inflation is just as good as real growth as it still stimulates organic debt creation and therefore a demand driven increase in the money supply. As we are merely fighting off a contraction in the money supply, the destination of the issued money is not important, as long as it drives inflation. You can hand the money to unemployed people if that helps to drive inflation.
One unique difference between private banks and public government is that banks require you to return the money via monthly payments. Governments require you to return the money via taxation. This difference means that publicly issued money doesn't have to disappear on a schedule, it only has to disappear when there is too much of it, e.g. you are suffering from too high inflation. An inflation based tax policy could solve this problem.
If we went back to the gold standard we would run in the same not enough money for the economy problem except it would be even worse. Interest rates would have to be very negative. -10% interest probably wouldn't be an exaggeration but then people just withdraw their gold for risk free gains and we'd have no economy to speak of whatsoever.
How does the lighting network obviate the need for mining, which is the deliberately wasteful part?
(a) the energy of the Army/Navy/Air-force supports nothing other than US currency
(b) no force would be necessary to back compliance with entries in a crypto ledger
crypto, especially bitcoin, is an intentional environmental disaster. I don't want to invest 1% of my money into an intentional environmental disaster.