Concerns about Bitcoin's energy use are overblown
bloomberg.com
bloomberg.com
That's bad analysis. Bitcoin energy usage is bounded very closely by the value of the coins mined at whatever the most efficient method is at the time. That is, it's worth it to spend electricity mining as long as the coins are worth a little bit more than the energy input.
So bitcoin growth has absolutely nothing to do with hardware efficiencies, and is entirely a function of the outrageously inflated growth bubble it is experiencing.
Basically: cleaner energy and more efficient computing hardware won't save us from this monster. But thankfully the coming crash will.
1. severely reduce number of transactions on main blockchain, which will:
2. allow for lower transaction fees (due to less competition), with will:
3. cause mining to be less profitable, which will:
4. result in fewer miners, which will:
5. reduce energy consumption.
The current power consumption simply a "growing pain".
It's not a monster, it just sounds ridiculously big, but Internet uses more. Airplanes use magnitudes more, even cow farts are much bigger than CO2 footprint of Bitcoin.
It sounds like you're trying to joke about "cow farts" but they're a well-known massive source of pollution, I don't think it's a flattering comparison
> but Internet uses more
So the most important innovation of this century, used by billions of people daily, uses more energy than a financial network doing only ~400,000 transactions per day?
If Bitcoin were to replace the entire financial sector, sure, it would be worth the energy expenditure. But as it is, there are solutions thousands of times more efficient for all of the problems Bitcoin tries to solve.
Except in that case its energy expenditure would increase a thousandfold if not more.
No there aren't. Just because you don't agree with the validity of some of the problems bitcoin tries to solve doesn't mean it's not trying to solve them.
I don't actually know what you have in mind, but if you name some of the more efficient alternatives to bitcoin, I'll tell you which problems they're failing to solve.
Between proof-of-stake solutions and the traditional financial system, as far as I know Bitcoin doesn't solve anything more efficiently, from transaction processing rate to distributed consensus.
This. Nothing except prof-of-work generates inherent value. All those other proof-ofs are flawed.
No, they will not. They cannot, because the energy use is directly and irrevocably tied to the market capitalization of bitcoin as a whole.
Again, it will crash, so this won't happen. But the community expectation (even if the community doesn't realize it) of bitcoin absolutely is that it will eat all the world's electricity.
We've been waiting for a long time for that catalyst, and if anything I think it's been receding further off into the distance as bitcoin becomes more, not less, established as a mainstream technology.
The people who keep buying into BTC because they think it's fundamentally more useful than fiat currency are in a very small minority. Most of the people buying BTC are viewing it as a speculative investment, but the only reason they're buying it as an investment is because it keeps going up, and the only reason it keeps going up is because people keep investing in it. If it starts going down for some reason, even a little bit, the positive feedback loop could easily switch to a negative one and the bubble will pop. All the investors will start selling at once to try and reap their profits before it falls further.
Also, part of the reason the bubble has gone on for so long is that historically it's been difficult to short BTC. This may change with the advent of Bitcoin futures markets....
Look, I can't tell you the future. I don't know when or how any better than people knew when the dot com crash or real estate crisis would hit. But people in the late 90's and mid 00's absolutely could see that the relevant markets were inflating in unsustainable ways, and absolutely did predict a "crash".
This is no different. Bitcoin is growing in an unsustainable way (c.f. literally eating all the world's electricity if it continues). That never ends well.
The amount of energy used for heating and cooling is extremely huge. Bitcoin is probably 0.0x% of that amount.
Internet is 2% of the whole CO2 emissions, heating and cooling is more than 30%. The industry pollution of China is so big you can't see their impact on CO2 emissions from their cars or their agriculture.
The estimates for Bitcoin, as much as they sound big, they really are not.
Cost in energy per transaction can only fall down with TPS increase (which is something lightning network, or bigger blocksize can do).
With the additional benefit that it keeps people warm/cool?
Can you please tell me why you are not interested in solving this problem? My guess is that it is impossible to do with Bitcoin, and people dismissing the energy problems want to protect their investment rather than develop better technologies.
Most of that energy is wasted because of the architecture and irrational desire of 24/7 comfort AC blasting at the coolest setting.
> Can you please tell me why you are not interested in solving this problem? My guess is that it is impossible to do with Bitcoin, and people dismissing the energy problems want to protect their investment rather than develop better technologies.
Problem is solved easily by clean energy sources.
There are bigger problems to solve, like heating and cooling, like CO2 footprint of animal agriculture, like deforestation of Amazon forest for Argentinian and Brazilian steak etc.
We are here mostly programmers, we don't profile the code and then optimize the fastest function, but the biggest bottleneck. Bitcoin is no where near the bottleneck and all scaling solutions will require less energy per transaction.
Problem is also automagically solved by the market. If mining gets to expensive to do, miners will figure out how to use less energy.
For example, market is not solving all of the above environmental problems because, for example, there is not fair market in animal agriculture.
"Bitcoin is a tool for freeing humanity from oligarchs and tyrants, dressed up as a get-rich-quick scheme."
I consider myself a member of the bitcoin community, and I absolutely do not believe it will increase 100x within 2 years. I think this bubble is going to crash.
Dismissing it as not a problem or potential problem by pointing out even bigger problems doesn't make it not a problem. See https://en.wikipedia.org/wiki/Whataboutism
Not only that, but some entrepreneurs are selling bitcoin miners as heaters that make money! :)
This is just flat out wrong and shows the author has no idea what she is talking about. The rate of BTC production is fixed, so "efficiency" has no impact on the dollar cost of electricity it is using.
If a BTC can sell for $X, it is profitable for the network to spend any amount upto $12.5*X every 10 minutes on electricity(ignoring hardware/fixed costs) mining bitcoin.
At $15,000 a BTC, this means it can consume $27,000,000 worth of electricity a day and still remain profitable.
Furthermore, comparing Bitcoin to physical currency is disingenuous even if you completely discount the (gargantuan)scale difference. You would get rid of that energy consumption even if could get everyone to switch to electronic (fiat) money instead of paper currency, and presumably have it be much greener than having them switch to bitcoin.
If I'm going to set up a mining operation, wouldn't it make financial sense to set it up near a hydroelectric plant where my electric cost is 1/10th of what it is in my home in PA? Any cost reduction is an increase in profit, so there's still motivation to reduce costs, a pretty large one.
The 2 are pretty much linked for each "generation" of miner.
So in order to continue spending $27 million per day at the cheaper electricity rate, they would need to buy more miners, which would produce more bitcoin, which means more profit.
So their whole incentive is based around the price of electricity, and the cheaper they can get it for, the more money they are going to make.
No, Bitcoin is produced at a fixed rate. If more power goes into mining, difficulty increases to compensate.
If I have 2x as much hashpower as I did yesterday, i'll get roughly 2x as much bitcoin as a reward (which over time will go down as the global hashrate goes up).
In other words I'll get a larger percentage of global bitcoin production, which is fixed.
One of the largest US mining operations are said to be located in Seattle where there is dirt cheap hydroelectric. So are many of the Chinese operations.
It's not as mich of a zero sum game as it might seem, it's more of a race to the bottom.
If your competitors are running on cheaper electric, you'd better find some cheaper electric or they are going to increase the difficulty to the point that it's not profitable for you.
While we're at it, factor in the cost of robberies where the robbers take cash, as Bitcoin eliminates those costs as well.
That's unfair. A more reasonable comparison is with credit card transactions. Several European countries are positioned to go cashless you know.
> While we're at it, factor in the cost of robberies where the robbers take cash, as Bitcoin eliminates those costs as well.
That's a really stupid argument to make, but while you're at it, factor in the cost of Bitcoin robberies of people getting hacked, more and more every day. There's even a story around of a guy robbed at gunpoint.
The more popular it gets, the bigger as a target it becomes ;-)
My sense was that this was only the case in countries that have effective environmental regulation, and that coal was cheaper in countries where you could legally operate super-dirty plants. Is this no longer the case?
It may turn out that there are other regulations (e.g. privacy regulations) preventing a company from gathering that information about individuals, though. At which point the power company would probably have to stop selling to individuals altogether (i.e. provide no residential power service any more, just private commercial/industrial service to other companies, because companies have a lot fewer privacy protections so it's easy enough to figure out whether they're mining.)
An even better scenario is if the government subsidizes the building of the hydro plant - then you get cheaper up front cost and cheaper recurring costs. This is the case in Austria, according to HydroMiner[0].
If there is a sudden insta-crash in bitcoin value, is there a point where miners just won't bother anymore?
If the mining energy cost is higher than the value of the bitcoin mined, doesn't it become un-economical and the whole block-chain seizes up? 'Someone will invent a more efficient method' doesn't seem a reasonable justification. If a major crash occurs would the route out be a fork to a variant where mining is reset to be easier/cheaper?
*edit - aha I see the mining difficulty can go up or down over time: https://en.bitcoin.it/wiki/Difficulty
edit2 - I was thinking of 'halving'. The reward (in number of bitcoins) for mining a block will halve over time, but not necessarily the difficulty or value of the bitcoin. https://www.coindesk.com/making-sense-bitcoins-halving/
However, there's a really fun corner case failure mode. The difficulty is supposed to adjust about once every two weeks to make for a roughly 10 minute interval between blocks. If more power is added to the network such that the interval is, say, 9 minutes, then when the next adjustment hits, the difficulty will be bumped up by 11%.
But! That "every two weeks" thing is based on the block interval. The actual adjustment period is 2016 blocks. When blocks are mined every 10 minutes, that works out to two weeks. If they're mined faster, the network adjusts faster. If they're mined slower, the network adjusts slower.
When the changes in hash rate are slow, this is fine. But what happens if there's a sudden massive change in the hash rate? Like, what happens if the hash rate somehow changes by a factor of a thousand in a brief period?
If it goes up by a factor of a thousand, then the network will start mining blocks roughly every 0.6 seconds. Within about 20 minutes, the 2016 block interval will hit and the difficulty will also go up by a factor of 1000, then everything continues as usual. No problem.
The problem is if the hash rate goes down by a factor of a thousand. Then the network will start mining blocks roughly once a week. The difficulty will readjust to bring that back down to 10 minutes... eventually. But the interval to the next readjustment is measured in blocks! Let's say you're halfway through the adjustment period when this crash happens, so you have 1008 blocks to go before the next adjustment. That would have taken about a week, but now it will take about twenty years! Unless you can get the hash rate back up substantially, the network will be in extreme slow mode for a long time.
http://bitcoinandtheblockchain.blogspot.com/2017/08/chain-de...
https://cointelegraph.com/news/how-close-did-bitcoin-get-to-...
(12000000THs / 14THs) * 1372W = 1,176,000,000W
QED.
Edit: numbers maybe not so far off after all, as it appears to say 8.27TWh/year now.
You're also operating under the assumption that every miner is already using these systems, which I don't believe is the case. Lots of people are likely running older systems, and as the price of bitcoin gets higher older less efficient machines become more profitable to turn back on.
I think reading the original source of their power consumption numbers will give a much better insight to where those numbers came from- http://blog.zorinaq.com/bitcoin-electricity-consumption/
(12000000 (TH per second s) / 14 (TH per second)) * 1372W = 1,176,000,000W/s
Now we need to convert seconds to hours (60 * 60)-
1,176,000,000W/s * 60 * 60 = 4,233,600,000,000W/h
That is roughly 4.23 terawatt hours. Take into account cooling and the fact that not everyone is using the same efficient miner from your example and the numbers look pretty damn accurate to me.
During your calculations above you use the "terra hashes per second" number- as you said, "14TH/s at 1372W". The device runs at 1372W, and it also calculates hashes at 14TH/s. You can use the same formula you did to calculate the 10Wh for the lightbulb- if you leave the device running for 1h it will consume 1372W/h of electricity (or 1372 Watts * 1 hour).
If you want to convert the W/h unit to W/d you can multiple the "hour" unit by "24" (since there are 24 hours in a day). To convert in the other direction you do the opposite (divide the day by the number of hours in it). Converting from Wh to Watt seconds is similar.
You're not the first person to be confused by this, and wikipedia has a whole section devoted to explaining it[1].
[1] https://en.wikipedia.org/wiki/Watt#Difference_between_watts....
https://digiconomist.net/bitcoin-energy-consumption#assumpti...
The premise is simply that Bitcoin uses less energy than physical cash production. Obviously this implies that Bitcoin will replace cash. If it doesn't -- if say the primary use case for Bitcoin remains currency speculation -- then the argument falls apart.
At some point the mining rewards will stop, and transaction fees will be the only reward. The price will be driven by demand, but will need to be kept high.
I'm not saying Bitcoin should do that, but as proof-by-construction that a more green coin with the same properties could exist.
Probably still not as bad but Bitcoin is still far less efficient than credit/debit transactions at that scale. There are some great crypto alternatives that would use magnitudes less power also.
There are data limits on bitcoin that make it literally impossible, and even given big technical changes that significantly lift limits it would still not even be close. Bitcoin would have to go through an enormous transformation to be able to scale to that many transactions.
Other comments explain it well but damn.
https://en.wikipedia.org/wiki/Exorbitant_privilege
At least the bitcoin blockchain can be audited, unlike the US Federal Reserve, an institution accountable to no one.