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Comment by jgowdy | Hacker News Reader

In my humble opinion, burning fossil fuels to create electricity to “mine” this “currency” is unethical because it literally has no net gain to society, not even entertainment. The same goes for the manufacture of the electronics used to mine. You hear a lot of condemnation for businesses willing to pollute to create wealth, but many of those same people don’t see that cryptocurrency mining is exactly that.

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> In my humble opinion, burning fossil fuels to create electricity to “mine” this “currency” is unethical because it literally has no net gain to society, not even entertainment.

A true peer-to-peer digital currency enabling you to make payments globally without a third party being able to censor has very real benefits.

For example:

  * Donations to wikileaks or similar organizations
  * Payments in gray areas, for example porn
  * Transfers to and from inaccessible areas, for example war zones or dictatorships

It might be inefficient but the concept isn't completely useless. So far alternatives without mining are being researched but are lacking in various ways.

We say it is inefficient but I've not seen a detailed study on the origin and amount of electricity used for Bitcoin mining vs. the origin and amount used to keep a similar portion (by transaction volume) of the VISA network (not just the main clearing house) running.

I hear much of the electricity is hydro power in China.

Lastly, Bitcoin isn't finished yet. I was dialing up to the internet on a 56kbps modem just 20 years ago. I can't imagine where crypto currencies will be in 20 years.

You can say that pretty much about everything. Why have big malls when you can do online shopping? Why have big skyscrapers that are super expensive to maintain when you can live comfortably on small studios?

The answer is we consume for our understanding (or assessment) of value. Bitcoin is not burning electricity. People are burning electricity to generate bitcoin.

What percentage of mining energy comes from burning fossil fuels?

Transmission losses for sending electrical power across the large diagonal of china is <10%. That's the worst case scenario, because in reality most of China is densely populated and hydroelectric plants weren't build somewhere where they had to wait for bitcoin to come around to find demand for their electricity.

Considering hydro power supposedly consumed by mining would be generated no matter what (the costs are largely fixed), almost all the power used by mining is ultimately produced by coal plants, which are the main source for adjustable electrical generation in China.

No, most bitcoin mines are located next to hydroelectric dams in China and the USA. There are no large transmission losses, because you don't need to transmit the power.

In the USA, mines are mostly located in 3 counties in central Washington State, along the Columbia river. Power rates there are much cheaper (around 2.5¢/kW), which is the main incentive to put your mine there.

Mining on coal is stupid because it's expensive and miners want to make a profit: https://en.wikipedia.org/wiki/Cost_of_electricity_by_source

> here are no large transmission losses, because you don't need to transmit the power.

You've misunderstood the argument: "being close to" implies that the electricity would otherwise go to waste.

But because transmission losses are low, distances to markets aren't as large as one might believe, and the Chinese weren't stupid enough to build hydroelectric dams in places where the energy would uselessly go to waste, that argument is wrong.

Most bitcoin mining is on hydropower. The fossil fuel ratio is around 2%.

You have a citation for that? That's a very bold claim with no actual facts to back it up. I'm willing to bet the fossil fuel ratio is way WAY higher than you have asserted here.

2% seems too low to me, but I'd be surprised if it was much over 20%. Professional level bitcoin mining has been a thing for 5+ years now, and it's highly optimized for efficiency. Hydroelectric power is often where the best deals can be cut, so the industrial scale miners have tended in that direction.

Okay, let me pose a question to you then - how much electricity do banks consume in their data centres, their offices, etc. etc.?

How is that any different?

Banks are very different from cryptocurrency. The economic value of banks is through loans, not monetary transfer. Through loans, and regulations/backing of a central bank, money is created. This economic effect is what enables economic growth. The money created by banks likely offsets the energy/overhead. https://en.wikipedia.org/wiki/Fractional-reserve_banking

Bitcoin cannot replace banks, even at full adoption we would need banks for loans, investments, financial planning, etc. Bitcoin could replace Visa, but it uses orders of magnitude more energy per transaction. So yes, it is an environmental disaster. I don't see any possible way that a decentralized system that is secured by doing useless computations could ever use less energy than a centralized one, it just doesn't make sense.

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