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From the bitcoin.org FAQ: >Isn't Bitcoin mining a waste of energy? >Spending energy to secure and operate a payment system is hardly a waste. Like any other p

by ywecur 11y ago

From the bitcoin.org FAQ: >Isn't Bitcoin mining a waste of energy? >Spending energy to secure and operate a payment system is hardly a waste. Like any other payment service, the use of Bitcoin entails processing costs. Services necessary for the operation of currently widespread monetary systems, such as banks, credit cards, and armored vehicles, also use a lot of energy. Although unlike Bitcoin, their total energy consumption is not transparent and cannot be as easily measured. Bitcoin mining has been designed to become more optimized over time with specialized hardware consuming less energy, and the operating costs of mining should continue to be proportional to demand. When Bitcoin mining becomes too competitive and less profitable, some miners choose to stop their activities. Furthermore, all energy expended mining is eventually transformed into heat, and the most profitable miners will be those who have put this heat to good use. An optimally efficient mining network is one that isn't actually consuming any extra energy. While this is an ideal, the economics of mining are such that miners individually strive toward it.

cwyers 11y ago
It uses vastly more energy than payment processors that have vastly more throughput. And the ideal miner that finds a valuable use for the waste heat is a fantasy, and it's an incredibly inefficient way of generating that heat.
- acdha 11y ago
  Also we have no reason to believe that the trend will change away from advances in hardware efficiency just buying more of them - the ratchet mechanism doesn't reward stable capacity.
- saalweachter 11y ago
  I think at the end of the day there's an important axiomatic difference. Are you willing to trust any central authority? Maybe a government, maybe a set of independent businesses you can chose among, maybe a specifically selected advisory committee, one really cool dude. Just anything. If you are, then burning coal and compute cycles is just insane and wasteful. If you aren't, then you might be willing to admit that from some angles it is an inelegant solution, but it is a solution. Taking Bitcoin on its own terms, as a solution to a problem you may not personally care about, the wastefulness of the process isn't really a problem. If anything, I agree with what someone else said down thread -- it would be better if mining for Bitcoin wasn't profitable, and it was a lottery people played at a loss (wasting even more resources!). That would discourage the centralization of mining power. IMO the biggest problem Bitcoin faces is that it put voting power in the hands of miners instead of users, and then encouraged those miners to coalesce into a relatively small coalition of big-money players.
  - cwyers 11y ago
    The energy waste of Bitcoin isn't a function of its decentralized nature, it's evidence that the decentralized nature is being subverted. A truly decentralized Bitcoin wouldn't have giant mining rigs that have to figure out what to do with all the waste heat, it'd be using spare CPU cycles that everyone has and the energy impact would be minimal. The energy waste comes from people using ASICs devoted to nothing but Bitcoin mining. And those same people, according to the article being discussed, are using their outsized impact to help steer the direction Bitcoin is headed in to the detriment of the majority of Bitcoin users. Bitcoin's ethos of "one CPU, one vote" was subverted as soon as people using dedicated Bitcoin mining hardware could have more votes than all the CPUs in the ecosystem put together.
    - barkingcat 11y ago
      In support of your points, I think it's worth remembering those "life in a bitcoin mine" videos that some journalists groups did http://media.coindesk.com/2014/09/20140729120509_0210.jpg http://media.coindesk.com/2014/09/20140729120509_0210.jpg The waste heat from these operations are not being reused. The energy most likely came from a coal fired power plant, or from a nuclear reactor.
Nursie 11y ago
I disagree that the optimal network doesn't waste any energy - any hash attempt that fails is a waste of energy. As more people compete and the difficulty goes up, more and more energy is consumed. I understand that this is the way BitCoin protects itself. I want to be clear that I am saying I think this is a bad way of doing things. As someone that understands a bit about crypto - most crypto schemes that are hard to break are not hard to break because the encrypting device has worked so hard at encrypting them. They're hard to break because they have been designed in a mathematically sound way. I hope this endless grind is not something inherent to the idea of decentralised crypto-currency, but if it is I don't think the decentralisation aspect is worth it, and as we see in this article it can be illusory anyway and the amounts of energy involved are pretty huge. >> Furthermore, all energy expended mining is eventually transformed into heat This is just such a cop-out!
- barkingcat 11y ago
  Well, there's always the conspiracy theory that the bitcoin network (and the blockchain) is a harness created by the NSA to crack encryption around the planet.
geofft 11y ago
> Spending energy to secure and operate a payment system is hardly a waste. That's not the question. The question is if more energy is being spent than is necessary to achieve the goals of a well-secured, well-operated a payment system, and I think there are very strong reasons to believe the answer is yes. (Among many other things, Ripple and Stellar are existence proofs of being able to get something with comparable security and much lower energy usage.) > Furthermore, all energy expended mining is eventually transformed into heat, and the most profitable miners will be those who have put this heat to good use. what > While this is an ideal, the economics of mining are such that miners individually strive toward it. And it is equally valid to say that the economics of cloud computing are that cloud hosts should individually strive towards it, too, but is AWS so much as keeping a single pizza warm? Is there any previous case in human history where "Negative externalities could be turned into profitable positive externalities with cleverness" has worked?

by ywecur 11y ago

cwyers 11y ago

It uses vastly more energy than payment processors that have vastly more throughput. And the ideal miner that finds a valuable use for the waste heat is a fantasy, and it's an incredibly inefficient way of generating that heat.

acdha 11y ago
Also we have no reason to believe that the trend will change away from advances in hardware efficiency just buying more of them - the ratchet mechanism doesn't reward stable capacity.
saalweachter 11y ago
I think at the end of the day there's an important axiomatic difference. Are you willing to trust any central authority? Maybe a government, maybe a set of independent businesses you can chose among, maybe a specifically selected advisory committee, one really cool dude. Just anything. If you are, then burning coal and compute cycles is just insane and wasteful. If you aren't, then you might be willing to admit that from some angles it is an inelegant solution, but it is a solution. Taking Bitcoin on its own terms, as a solution to a problem you may not personally care about, the wastefulness of the process isn't really a problem. If anything, I agree with what someone else said down thread -- it would be better if mining for Bitcoin wasn't profitable, and it was a lottery people played at a loss (wasting even more resources!). That would discourage the centralization of mining power. IMO the biggest problem Bitcoin faces is that it put voting power in the hands of miners instead of users, and then encouraged those miners to coalesce into a relatively small coalition of big-money players.
- cwyers 11y ago
  The energy waste of Bitcoin isn't a function of its decentralized nature, it's evidence that the decentralized nature is being subverted. A truly decentralized Bitcoin wouldn't have giant mining rigs that have to figure out what to do with all the waste heat, it'd be using spare CPU cycles that everyone has and the energy impact would be minimal. The energy waste comes from people using ASICs devoted to nothing but Bitcoin mining. And those same people, according to the article being discussed, are using their outsized impact to help steer the direction Bitcoin is headed in to the detriment of the majority of Bitcoin users. Bitcoin's ethos of "one CPU, one vote" was subverted as soon as people using dedicated Bitcoin mining hardware could have more votes than all the CPUs in the ecosystem put together.
  - barkingcat 11y ago
    In support of your points, I think it's worth remembering those "life in a bitcoin mine" videos that some journalists groups did http://media.coindesk.com/2014/09/20140729120509_0210.jpg http://media.coindesk.com/2014/09/20140729120509_0210.jpg The waste heat from these operations are not being reused. The energy most likely came from a coal fired power plant, or from a nuclear reactor.

Nursie 11y ago

I disagree that the optimal network doesn't waste any energy - any hash attempt that fails is a waste of energy. As more people compete and the difficulty goes up, more and more energy is consumed. I understand that this is the way BitCoin protects itself. I want to be clear that I am saying I think this is a bad way of doing things. As someone that understands a bit about crypto - most crypto schemes that are hard to break are not hard to break because the encrypting device has worked so hard at encrypting them. They're hard to break because they have been designed in a mathematically sound way. I hope this endless grind is not something inherent to the idea of decentralised crypto-currency, but if it is I don't think the decentralisation aspect is worth it, and as we see in this article it can be illusory anyway and the amounts of energy involved are pretty huge. >> Furthermore, all energy expended mining is eventually transformed into heat This is just such a cop-out!

barkingcat 11y ago
Well, there's always the conspiracy theory that the bitcoin network (and the blockchain) is a harness created by the NSA to crack encryption around the planet.

geofft 11y ago

> Spending energy to secure and operate a payment system is hardly a waste. That's not the question. The question is if more energy is being spent than is necessary to achieve the goals of a well-secured, well-operated a payment system, and I think there are very strong reasons to believe the answer is yes. (Among many other things, Ripple and Stellar are existence proofs of being able to get something with comparable security and much lower energy usage.) > Furthermore, all energy expended mining is eventually transformed into heat, and the most profitable miners will be those who have put this heat to good use. what > While this is an ideal, the economics of mining are such that miners individually strive toward it. And it is equally valid to say that the economics of cloud computing are that cloud hosts should individually strive towards it, too, but is AWS so much as keeping a single pizza warm? Is there any previous case in human history where "Negative externalities could be turned into profitable positive externalities with cleverness" has worked?