This is not strictly correct.

When you game on your 3080 GTX at max graphics in VR, you wouldn't call that wasted computation because it provided utility to a human in the form of entertainment.

Proof of work provides utility in the form of trustless proof, allowing a decentralized network to actually work. The computational work carries meaning which is valued by network participants.

I guess you can make the argument that crypto is useful as a form of entertainment, but that's one hell of a polluting casino you got there.

Crypto provides utility by being decentralized, permissionless to participate in, and censorship resistance.

The reason mining consumes so much aggregate energy is because it is the most profitable use of energy at the moment. Part of this is because the cost of energy for fossil fuels in not accurately represented in its price.

Tax payers / governments subsidize the fossil fuel industry in billions every year, including coal which is used in coal power plants. A carbon tax is also not implemented. So externalities are not captured in price.

It should fairly obvious how energy sources change once those issues are addressed.

Yeah, the utility is obvious. We just need to internalize GHG mitigation costs and then prices will hit the correct place. It’s unfortunate, but the most effective way to do this would be to actually tax power sources and power generation at source, which means fuel taxes.

It will be hella regressive, but that’s the reality. Most poor people are polluting the planet disproportionately to their output.

Crypto today is like e-commerce in 2000. Or the internet in 1995. It has enormous potential to change the world.

I bet if the internet was invented today we would hear the same energy arguments.

Except, ya know, it powers the decentralized currency with a market cap of $1T.

In a disgustingly inefficient way.

Global Financial System: 263.72TWh

Bitcoin: 113.89TWh

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GFS deposits: US$404.1 trillion

Bitcoin: US$1.1 trillion

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GFS energy per US$: 0.65 Wh

Bitcoin energy per US$: 103.53 Wh

And this is calculated just for the value of deposits, if we do it again for number of transactions it's even more scathing.

https://docsend.com/view/adwmdeeyfvqwecj2

I'm not trying to be pedantic, but this doesn't seem to include the daily commute for bank employees, the waste from each bank, and the collective volume of mail delivered.

Ok cool. Let's double the energy used by banks then, still 100x as efficient as Bitcoin.

That's a fair statement. I'm not really even sure what the $404 trillion is after trying to look up where you were going with that (all assets globally).

We should do an attempt with just US dollars. It looks like there is about $40 trillion in actual physical/digital circulation (i.e. not investments in things like crypto, buildings, stocks).

Driving even an electric vehicle uses ~250-300 Wh per mile (we can round down to 250Wh).

Bank of America, Chase, Wells Fargo, and Citigroup have about 738k (we can round down to 700k) employees and the average US commute is 32 miles (we can round down to 25). We'll assume ~235 days of work a year.

25 * 0.250 * 700000 * 235 = 1,028.1 TWh to commute for bank employees of the top four US banks per year

Which is about 25.7 Wh / $. We can safely assume this is significantly lower than reality already since we only counted the top four US banks and rounded all of our figures down. This also doesn't count any other industry required to keep USD working (like datacenters, as referenced in the paper you linked).

Edit: I'm not trying to prove you wrong or anything, I'm just genuinely curious if this "bitcoin is worse" statement is correct.

Thanks for working this one out, unfortunately you're off by a factor of 1000.

Your calculation comes out to 1.028 TWh

1 TWh = 1,000,000,000 KWh

Yep, my bad! So commutes aren't as significant a contributor as I thought. I ran through some more calculations trying to only use the US, and it looks like the Wh / $ is somewhere around 3.51. Is there any other category of use that isn't being included? This is a pretty stark difference, even being many times more than the first calculation.

Commute: 1.028 TWh

Data centers: ~3.3TWh per trillion (for USD) = 132 TWh

ATMs: 470,135 independent in the US (1.27MWh each per year) = 0.597TWh

Banks: ~98,000 in the US (PDF wasn't clear, using 60MWh each per year) = 5.88 TWh

Card networks: ~1TWh/yr (just assuming "half" of global)

Total: 140.5TWh/yr

https://data.worldbank.org/indicator/FB.CBK.BRCH.P5?location...

https://blog.sfgate.com/lifestyle/2020/08/31/its-electric-ho....

OK the main discrepancy is from the Data center calculation. The Galaxy PDF lists the top 100 banks as owning $70Tn of deposits. I calculated using the galaxy energy number but divided by total deposits wheras I should have only used the data for the top 100 banks as they did.

I think your calculation of 3.5 Wh/$ is closer to the real number. When I put $70Tn instead of $404Tn in I get 3.71Wh/$

Perhaps the definition of value goes beyond dollars, and into what is valuable or not for society (even if it makes people money, or not!)

A currency that is practically impossible to use as such...

Perhaps that’s the part they think is not useful?