- Director General at the Swedish Financial Supervisory Authority
- Director General at the Swedish Environmental Protection Agency
I’m not sure who you think is more qualified to have a stance that represents Sweden?
Or maybe you could just let people do what they like with the electricity they paid for
(alternatively, tax the electricity use beyond a certain per-person allocation).
I agree that there can be harms from PoW, but this is because of the electricity use, and so the thing to tax is the electricity use. Rather than the state deciding what things it considers valid for an individual to value and seek, it should put the restrictions on the thing that more directly causes negative externalities to others.
If there is a concern that this would harm things that we are sufficiently convinced is objectively valuable (e.g. making it more costly than is appropriate for people to heat their homes), so that we want to not significantly impact the finances of people who are like, using "reasonable" amounts of electricity, then we can, as I said, put some threshold amount of electricity use per person below which there's no tax on it, and increase the tax rate above that amount to account for this (and use the revenue to pay for CO2 removal and/or green energy development).
Or, like, I suppose in the most extreme case you could (on e.g. an annual basis) give everyone an initial amount of CO2 credits and no one is allowed to emit CO2 beyond the credits they have (but unused credits can be bought and sold).
Right of ways are real, tweets are not.
I’m not sure if the people making the most money from crypto-mining’s energy usage, are to be believed?
PoW is throwing away electricity for the sake of it, and resists getting more efficient. If the goal is for the bitcoin network to cost $1M to do a single double spend, then PoW has to use $1M worth of electricity every 10 minutes.
Let's say we live in a future where we suddenly have 10x as much electricity. Due to supply and demand, electricity now costs 10% of what it did before.
Dryers etc all keep using the same amount of electricity with no issue, but bitcoin has a problem: it's now really cheap to double spend unless bitcoin uses 10x as much electricity. So of course, it does.
There's a similar proper with making things more efficient. If we make a christmas light more efficient (make it use an LED instead of an incandescent bulb or whatever), christmas lights will use less electricity.
If we make ASICs or GPUs more efficient, then people will just have to run more of them, or else bitcoin will be less secure.
I think this is a real and notable difference, and I think that's enough of a justification to consider a ban.
Btw Satoshi introduced blockchain checkpoint so no attacker can fork the existing Bitcoin chain and make a competing one.
It really sounds like you're rationalizing banning Bitcoin because you don't see any value in it. That's a dangerous way to decide who gets to use electricity.
LED was a technological innovation. Nothing says Bitcoin can't have those. If you want more light, you need more lamps and you need to spend more energy. I don't really see the difference here.
About every 4 years the reward for mining a block will be halved. I don't see LED lights getting two times more efficient every 4 years.
It would only be benefitial if after a certain level of efficiency were achieved, PoW got banned and all that efficiency increase could actually benefit consumers of energy that did not have to keep increasing spend to keep up (though even that's not sure, because if energy becomes 10x cheaper, it's just a matter of time for people to invent new creative ways to use all that cheap energy that's prohebitevely expensive right now).
There is a lot of resources getting wasted in the real life. For example I'm from East Europe and we do not have good water pipes' infrastructure and lots of water gets leaked every month.
Speaking of wasting and leaking electricity I did a quick Google search and this is what I found:
"Are your appliances leaking electricity? Some of you might not be familiar with what this means. Not only do we have more small- and medium-sized appliances than ever before, but many of these never really stop using electricity. For example, if the television has a remote, then part of the TV is always on, waiting for a signal from the remote. If there is a clock on the microwave then the microwave is always using some electricity. Experts call this usage "standby consumption" or "leaking electricity" because people are often not aware that the appliance is using electricity.
A single appliance usually leaks only a small amount of electricity each hour (see Leaking Watts Chart below). Since these appliances leak electricity whenevery they are not turned on, and since people have a lot of these appliances, the amount of leaking electricity is significant. The average household spends about $40 a year on leaking electricity. The federal government works with appliance manufacturers to reduce the amount of electricity that leaks out of new appliances[1]."
Also here is another good resource on electricity leak which is related to the first web document I linked[2].
And then how much food is getting wasted every month globally? Probably billions of dollars of food is getting thrown away every month.
[1] https://www.uwsp.edu/cnr-ap/KEEP/nres633/Pages/Unit3/Section...
[2] https://www.teachengineering.org/content/cla_/activities/cla...
All uses of energy incentivize the search for cheaper energy.
Not all energy uses are optimized to increase usage over time, to cancel efficiencies. Proof of work, whatever it's merits, is anti-efficiency with respect to itself.
This is a significant difference.
Bitcoin has merits. So proof of work, being a part that is currently necessary for it to work has merits.
But the argument that proof-of-work has the merit of incentivizing cheaper energy sources does not stand up.
1. All uses of energy already incentivize the search for cheaper energy. This isn't a novel incentive that proof-of-work provides.
2. But proof-of-work does have a relatively novel disadvantage. It won't just incentivize greater energy uses as prices come down, as in normal supply-demand curves, but must keep up the original and even grow the amount spent on energy.
This would not be a problem in a market without negative externalities, but energy is famously a huge industry that will be struggling with negative externalities for quite some time and at great cost.
This is just like saying: let's burn as much coal and oil as fast as we can, so we can accelerate the need to develop alternative fuel sources.
https://futurism.com/bitcoin-mining-company-buys-entire-coal... https://grist.org/technology/bitcoin-greenidge-seneca-lake-c... https://arstechnica.com/tech-policy/2021/09/old-coal-plant-i...
Even clothes dryer seem to be using less energy than Bitcoin. If you run the dryer for an hour each week, you're at 12-15kWh per month, which is 1-2% of your average household energy usage in the US, Canada or the EU. Now households at most around a third of the electricity in cold countries with a decent amount of electric heating for which dryers are much less, but let's run with it. That still sets the upper bound to 0.6%, which incidentally is the same as bitcoin.
If we're going to start legislating how we're all allowed to use energy that civilization has made available, who gets to decide what's allowed?
Numbers I've seen suggest that global PC gaming alone (excluding consoles) currently uses about as much electricity as bitcoin. Should we ban that too since playing cards are readily available and use almost no energy? Maybe we can make a concession and only allow low powered handheld consoles?
If bitcoin mining actually becomes problematic, then by all means we can definitely ban it or add some sin taxes to it, and we probably will in a lot of jurisdictions. I'm actually kind of eager for that to happen, because it will force miners to actually become novel/stranded energy ventures. They'll be the capital drive that builds out energy sources that not enough humans live around to justify tapping and/or we can't economically justifying building without expensive transmission infrastructure. And once it's built out and paid off, it may be a lot easier to justify investing in building out long distance transmission infrastructure so the rest of civilization can also tap into these sources.
We already legislate different pricing for different applications. Household electricity has a different price than industrial usage. A 1000x price of electricity for certain applications is just a small extension of what we currently have.
it's called "we the people" or democracy if you will. We as a society decide that cryptocurrency aren't worth destroying the world over, and that's about it.
If bitcoin mining uses co2 producing power (because the economics supports it), is that the fault of bitcoin or the government for not sufficiently taxing the negative externalities of that means of production?
Unless we believe that Bitcoin has some use, its power consumption would be problematic even if it weren't so monstrously large. And vanishingly few people believe Bitcoin has any value beyond a get rich quick scheme.
There is no market in the world where you are going to decrease consumption by increasing the demand. That's just not how economics works.
It's curious how much agitation there is concerning the energy consumption of PoW. I don't see nearly as many articles calling for restricting AWS & co. Coincidentally Bitcoin is the base layer of a decentralized finance world completely out of the control of traditional elites and banks.
It's also a new finance world completely under the control of an even smaller elite of devs and mining pool owners (see the hard fork of Ethereum that happened a long time ago, and the upcoming fork of Ethereum that will move it to PoS; sure, Ethereum isn't Bitcoin, but there is nothing fundamentally different to prevent Bitcoin taking a similar step whenever the devs and miners decide).
What Bitcoin definitely is not is a new currency where the people have any kind of control. It is actively opposed to that goal, and takes away even the slight chance of a benevolent leader that exists with central bank controlled currencies.
You forgot a (perhaps even more) crucial part: the exchanges/stablecoins!
They're the whole reason this clown show is considered "finance" rather than funbux.
And they're all extremely suspicious. And by suspicious I mean obviously fraudulent. The value of Bitcoin (!) is propped up by Tether printing fake dollars backed by nothing.
And best of all, someone complaining that this is clearly a wasteful scam and being told back, "how much energy did videocassettes and magazines consume, huh?"
Well, let's see
>Bright lights strung on American trees, rooftops and lawns account for 6.63 billion kilowatt hours of electricity consumption every year [1]
>Bitcoin mining consumes around 91 terawatt-hours of electricity annually. [2]
Huh. That's at least the same order of magnitude, at any rate.
[1] https://phys.org/news/2015-12-christmas-energy-entire-countr... [2] https://www.businessinsider.com/bitcoin-mining-electricity-u...
Did I miss something or is your comment factually incorrect?
Meanwhile, I'd reckon that the US accounts for the majority of Christmas lights.
If the amount of throughput and everything else remains constant while more and more computers are in a zero-sum arms race to waste electricity to solve a useless hash problem, then it is by definition not useful except for “securing the network”.
And if you can secure a network some other way, then it definitely becomes better by any arbitrary order of magnitude, assuming your utility function doesn’t place infinite value on securing 10 transactions a second with to over 99.9999% certainty and willing to waste all the world’s electricity to do it.
Literally even if you value all other uses of electricity put together as 1/100000 of securing Bitcoin then in a few years banning PoW becomes the right move.
But I imagine it will be like the war on drugs — impossible to totally eradicate, since mining rewards become more lucrative every year forever. Until bitcoin blackouts are frequent in the first world, msot people won’t care though.
Imagine if people asked how many emails (SMTP), conversations (VOIP) or websites (HTTP) the Internet can ever handle pet second and the answer was 10, no matter how many computers joined the network. Because every time you had to make progress, everything went through one bottleneck called a miner. Would this be the topology you want to reward with ever-more-valuable rewards?
Imagine if BitTorrent worked this way, and every computer would seed every file. And maximalists said that this was the ONLY AND BEST WAY.
Also aren't each of those used by significantly more people than Bitcoin? So the per capita use is less and they scale better?
Also how are you estimating cost of porn? Viewing cost? Generation cost?
So your statement ends up being incorrect over a period of time.
These discussions should talk about the ratio between a certain measure of productivity (e.g. GDP generated for the country) to the energy use; energy on its own does not mean much. I'm sure worldwide food production consumes more energy than Bitcoin.
Other than that, a problem with POW (at least as implemented in Bitcoin) is that technological advances won't result in less energy consumption as it's mostly a function of (price of Bitcoin, price of energy).
Our legislators and regulators, because that's their job.
Just like we ban heroin, regulate over the counter drugs, and tax alcohol.
Mining BTC is a waste of everyone's time.
Electricity production is partly socialized - and - we're literally facing a kind of global crisis.
Ban it, and let the Cryto Warriers figure out other, better ways (of which there are numerous) for allocating magic numbers.
We can actually start with 1 question: If electricity demand from PoW mining spurs new renewable plants to be built, is that bad for the environment?
I (and many electricity companies) actually think PoW mining is good for the grid/renewable adoption in the long term. Let me explain why:
Some indisputable facts to get us started:
1. Most renewable electricity has unpredictable supply
2. Introducing marginal capacity of the same type gives diminishing returns. Eg: you're producing more during high supply times where electricity rate is low. During lower production periods all of the same type of renewable will be producing less so you can't even take advantage of the higher rates.
3. Rational bitcoin miners will turn off their machines when cost of power is greater than marginal return.
As a result, PoW mining will help the economics of building new wind/solar plants. Eg, currently it may not be profitable to build a new wind plant because base load is too low that the excess power generated would need to be sold off at 0 or even negative prices. However if bitcoin mining could be turned on during these times and off during periods of high demand, there will need to be fewer peaker plants in operation and it would positively affect the economics of opening a new wind plant.
Bitcoin mining only cares about the cost of electricity at a given time, it is not like most other electricity demands that are very time based. With the large variance of electricity generation by renewables, I think bitcoin can in the future help smooth demand according to the real supply/demand curve.
It's kind of like a different implementation of the Tesla utility grid batteries. Instead of deploying batteries, you force the grid to build more renewable capacity (that the miners are paying for) that miners use except in peak periods, where you turn off and effectively provide the grid with more power.
Yes, obviously.
Even if every single miner pool built its own solar/wind plant to power 100% of its energy needs, that would still be horrible for the environment: building the power plant itself produces harm to the environment; and the space and work and money used to create the Bitcoin miner's power plant could have gone into replacing (closing down) a non-renewable power plant.
Silly arguments about pricing volatile electricity only work if we assume maximizing profit is the ultimate good or that PoW is the only way to use that excess power. In reality, if we want to avoid the worse catastrophes that our current economy is pushing the world towards, we have to stop looking at profit, and choose less profitable but more useful ways of handling volatility - batteries, long-distance transmission, etc.
2. do you agree that nuclear is a sustainable and necessary solution?
3. do you agree that mining provides massive incentives, on huge scale, to nuclear power developers?
Power generation is a social concern, and states provide plenty of incentive to build power plants, especially nuclear - crypto mining is a profit chasing wasteful afterthought.
To be honest, I don't understand why it hasn't been banned already.
Sweden has recently called for a EU wide ban because it identified PoW mining as a threat to transition their economy to renewable energy.
https://www.fi.se/en/published/presentations/2021/crypto-ass...