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There's a pretty good writeup about this issue in the Stanford/Princeton Cryptocurrency Class: https://drive.google.com/uc?id=0B4-bDFu_72Beelkxd3VlbXoyd0E&expo

by nemild 11y ago

There's a pretty good writeup about this issue in the Stanford/Princeton Cryptocurrency Class: https://drive.google.com/uc?id=0B4-bDFu_72Beelkxd3VlbXoyd0E&export=download https://drive.google.com/uc?id=0B4-bDFu_72Beelkxd3VlbXoyd0E&... Excerpt: According to our estimates then, the whole Bitcoin network is consuming maybe 10% of a large power plant’s worth of electricity. Although this is not an insignificant amount of power, it's not yet a large amount of electricity compared to all the other things that people are using electricity for on the planet. Any payment system requires energy and electricity. With traditional currency, lots of energy is consumed guarding and moving gold bullions around, running ATM machines, coin sorting machines, cash registers, and payment processing services, and transporting money in armored cars. Some people say Bitcoin wastes energy because the energy expended computing SHA-256 hashes doesn’t serve any apparent purpose. But you could make this same argument for traditional currency as well — there’s a lot of energy being wasted and it doesn't serve any purpose besides maintaining the currency system. So, if we value Bitcoin as a useful currency system, then the energy required to support it is not really being wasted. That said, we can ask if there’s a way to do better ...

guelo 11y ago
That paper estimates the bitcoin network's total power consumption at around 117MW. This latest increase is estimated at 40MW. So it is a significant increase.
- jnbiche 11y ago
  Not sure how they came up with that estimate, but the miners are getting more and more efficient, so it's not a linear increase.
  - davidgerard 11y ago
    No, it's a race to the bottom. The cost of mining 1 BTC will naturally tend to 1 BTC, and we're already circling that.
homogeneous 11y ago
>Any payment system requires energy and electricity. With traditional currency, lots of energy is consumed guarding and moving gold bullions around Whenever the topic of bitcoin's inherent wastefulness is discussed, someone always brings up this point, but it's a fallacious comparison because most of the power consumed by the traditional financial system is spent in its capacity as a ubiquitous pillar of modern society, wherein bitcoin would be completely subsumed were it to become anything more than a technical novelty. Even when you subtract the common denominator that represents the vast majority of the world's financial intuitions, bitcoin is still the only currency that burns resources as a function of its circulation.
- justin2004 11y ago
  >most of the power consumed by the traditional financial system is spent in its capacity as a ubiquitous pillar of modern society Either I missed your point or it would be nice if you brought this back down to Earth. Yes, traditional ledgers help mediate economic exchanges. Bitcoin, as a ledger system, also helps mediate economic exchanges. > ... wherein bitcoin would be completely subsumed were it to become anything more than a technical novelty. You put this forward like we should all nod and say of course. Care to tell us about this scenario?
- deleted 11y ago
  [deleted]
jlarocco 11y ago
> guarding and moving gold bullions around I forget where I read it, but when countries and banks buy and sell large amounts of gold bullion they don't usually move it around because it's expensive and inconvenient. The ownership changes, but it's usually left where it is.
gritzko 11y ago
I believe that most of money consumed by the financial system actually goes back into the economy. Some bankers buy sushis, then sushi chefs buy gasoline, then oil drillers... and so on. BitCoin tends to waste energy irrecoverably. Apples-to-apples comparison is a challenging task, but the modern financial system hardly has that feature of burning more for the sake of burning more.
- exo762 11y ago
  > I believe that most of money consumed by the financial system actually goes back into the economy. Some bankers buy sushis, then sushi chefs buy gasoline, then oil drillers... and so on. BitCoin tends to waste energy irrecoverably. Bitcoin is best technical solution we have for an existing societal problem. As soon as better technical solution will be created (e.g. proof-of-stake which can be relied upon), Bitcoin will be modified to use it. And Bitcoin will continue to operate with lower costs - burning less energy.
- vojvod 11y ago
  Money is returned to the economy via energy company profits and wages just as effectively as via bankers' salaries. It's the labour and energy itself that is wasted.
- lmm 11y ago
  > I believe that most of money consumed by the financial system actually goes back into the economy. Some bankers buy sushis, then sushi chefs buy gasoline, then oil drillers... and so on. Yes and no. If a banker is being paid $100/hour then presumably (in an efficient-markets sense) their labour is worth that much, and they could be doing something else with their time that would be creating $100 of value instead.
morenoh149 11y ago
can you share more pdfs ?
- nemild 11y ago
  Sure, take a look at the syllabus here: https://crypto.stanford.edu/cs251/syllabus.html https://crypto.stanford.edu/cs251/syllabus.html (all are hyperlinked)

by nemild 11y ago

guelo 11y ago

That paper estimates the bitcoin network's total power consumption at around 117MW. This latest increase is estimated at 40MW. So it is a significant increase.

jnbiche 11y ago
Not sure how they came up with that estimate, but the miners are getting more and more efficient, so it's not a linear increase.
- davidgerard 11y ago
  No, it's a race to the bottom. The cost of mining 1 BTC will naturally tend to 1 BTC, and we're already circling that.

homogeneous 11y ago

>Any payment system requires energy and electricity. With traditional currency, lots of energy is consumed guarding and moving gold bullions around Whenever the topic of bitcoin's inherent wastefulness is discussed, someone always brings up this point, but it's a fallacious comparison because most of the power consumed by the traditional financial system is spent in its capacity as a ubiquitous pillar of modern society, wherein bitcoin would be completely subsumed were it to become anything more than a technical novelty. Even when you subtract the common denominator that represents the vast majority of the world's financial intuitions, bitcoin is still the only currency that burns resources as a function of its circulation.

justin2004 11y ago
>most of the power consumed by the traditional financial system is spent in its capacity as a ubiquitous pillar of modern society Either I missed your point or it would be nice if you brought this back down to Earth. Yes, traditional ledgers help mediate economic exchanges. Bitcoin, as a ledger system, also helps mediate economic exchanges. > ... wherein bitcoin would be completely subsumed were it to become anything more than a technical novelty. You put this forward like we should all nod and say of course. Care to tell us about this scenario?
deleted 11y ago
[deleted]

jlarocco 11y ago

> guarding and moving gold bullions around I forget where I read it, but when countries and banks buy and sell large amounts of gold bullion they don't usually move it around because it's expensive and inconvenient. The ownership changes, but it's usually left where it is.

gritzko 11y ago

I believe that most of money consumed by the financial system actually goes back into the economy. Some bankers buy sushis, then sushi chefs buy gasoline, then oil drillers... and so on. BitCoin tends to waste energy irrecoverably. Apples-to-apples comparison is a challenging task, but the modern financial system hardly has that feature of burning more for the sake of burning more.

exo762 11y ago
> I believe that most of money consumed by the financial system actually goes back into the economy. Some bankers buy sushis, then sushi chefs buy gasoline, then oil drillers... and so on. BitCoin tends to waste energy irrecoverably. Bitcoin is best technical solution we have for an existing societal problem. As soon as better technical solution will be created (e.g. proof-of-stake which can be relied upon), Bitcoin will be modified to use it. And Bitcoin will continue to operate with lower costs - burning less energy.
vojvod 11y ago
Money is returned to the economy via energy company profits and wages just as effectively as via bankers' salaries. It's the labour and energy itself that is wasted.
lmm 11y ago
> I believe that most of money consumed by the financial system actually goes back into the economy. Some bankers buy sushis, then sushi chefs buy gasoline, then oil drillers... and so on. Yes and no. If a banker is being paid $100/hour then presumably (in an efficient-markets sense) their labour is worth that much, and they could be doing something else with their time that would be creating $100 of value instead.

morenoh149 11y ago

can you share more pdfs ?

nemild 11y ago
Sure, take a look at the syllabus here: https://crypto.stanford.edu/cs251/syllabus.html https://crypto.stanford.edu/cs251/syllabus.html (all are hyperlinked)