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I hope not. From a business point of view, Bitcoin and hardware are both risky; putting the two together is exceptionally so. From an ethical point of view, the

I hope not. From a business point of view, Bitcoin and hardware are both risky; putting the two together is exceptionally so. From an ethical point of view, the environmental impact of large-scale Bitcoin mining is a real problem.

fpgaminer 10y ago
I'm not a VC, but I would assume the question is not whether a venture is risky or not, but whether it is worthwhile. All startups are exceptionally risky. YC has already funded at least one Bitcoin startup, which is currently doing quite well for itself (Coinbase). Of all the ASICs that could be built, mining ASICs are the least risky. Their logic is simple, repetitive, and self testing. They have the highest yield and are the most flexible for binning. And cryptocurrency mining has a _long_ history of pre-sales. That effectively eliminates all risk.
- sanswork 10y ago
  We don't actually know how well Coinbase is doing just that they seem to still be regularly raising money and doing it from weird places.
CyberDildonics 10y ago
> the environmental impact of large-scale Bitcoin mining is a real problem This is completely ridiculous. I've never seen anyone supply numbers to remotely back this up. A few people have linked to a blog post that through extrapolation and gross misunderstanding asserted that bitcoin mining used up as much electricity as all of Ireland (lets use our very best judgement). The truth is the financial industry is 8% of GDP. How much power does it take to air condition all the banks of world? Beyond that there is the fact that not all electricity has significant environmental impact and the fact that bitcoin mining ends up happening in places where electricity is the cheapest and most plentiful, which means it probably is not being generated with coal or oil. This assertion is an enormous detachment from reality based on gut feeling.
- fpgaminer 10y ago
  Alright, well, here's some math. The Bitcoin network hashrate is currently at ~3,800,000,000 GH/s. The most efficient miners are at ~0.1W/GH. So the Bitcoin network, at its most efficient, would be using 380,000,000 Watts right now. I'm not sure what to compare that against. I looked up and found this article: https://www9.nationalgridus.com/non_html/shared_energyeff_office.pdf https://www9.nationalgridus.com/non_html/shared_energyeff_of... That article says that office buildings use ~1.53 Watts per square foot to cool the building (that's an average 1.53 throughout the year). So the power used to secure the Bitcoin network is equal to cooling ~248 million square feet of office space. Sounds like a lot, but pulling up a random office building, 55 Water Street, and I see it's 3.5 million square feet. The U.S. as a whole uses 446,689,497,716 Watts on average. So Bitcoin is using 0.085% of the total U.S. power consumption. Or, 0.015% of world power consumption. I have no idea if what we are currently spending on the Bitcoin network, in terms of natural resources, is more or less efficient than our current banking system. But those are the numbers. Personally, I don't think any of its relevant. Reducing energy consumption should not be the primary focus of our species. We should focus on increasing sustainable energy _production_. Energy production is a core attribute of our economy and our civilization. It may even be the _most_ important thing to us, as a growing species. Obviously reducing waste when we can is good, but I'd rather expend the majority of our resources building out solar installations rather than quibbling about whether Bitcoin is power efficient or not.
  - snowwindwaves 10y ago
    Generally a house that isn't electrically heated or cooled uses 1 kWh per hour. So 380 megawatts for Bitcoin mining is the around the same amount of energy that 380,000 houses would use on a nice day.
  - deleted 10y ago
    [deleted]
- asymmetric 10y ago
  Here's some numbers[0] from a study done by the Natuonal University of Ireland. They conclude that "the power currently used for Bitcoin mining is comparable to Ireland’s electricity consumption." [0]: https://karlodwyer.github.io/publications/pdf/bitcoin_KJOD_2014.pdf https://karlodwyer.github.io/publications/pdf/bitcoin_KJOD_2...
_coldfire 10y ago
Bitcoin mining has congregated around cheap sources of energy, In China at least, many are using surplus energy from the grid in cutprice deals with provincial govts. Undoubtedly there is huge amounts of energy being pumped into Bitcoin daily, but it's environmental effects seem over-hyped compared to many other human endeavours.
- acdha 10y ago
  Those other activities produce something of value. A pure fiat currency like Bitcoin has no value other than the consensus: gold has a lower bound capped at industrial use and you could at least plant tulip bulbs but if people stop using Bitcoin or switch systems all of that effort will be wasted.

fpgaminer 10y ago

I'm not a VC, but I would assume the question is not whether a venture is risky or not, but whether it is worthwhile. All startups are exceptionally risky. YC has already funded at least one Bitcoin startup, which is currently doing quite well for itself (Coinbase). Of all the ASICs that could be built, mining ASICs are the least risky. Their logic is simple, repetitive, and self testing. They have the highest yield and are the most flexible for binning. And cryptocurrency mining has a _long_ history of pre-sales. That effectively eliminates all risk.

sanswork 10y ago
We don't actually know how well Coinbase is doing just that they seem to still be regularly raising money and doing it from weird places.

CyberDildonics 10y ago

> the environmental impact of large-scale Bitcoin mining is a real problem This is completely ridiculous. I've never seen anyone supply numbers to remotely back this up. A few people have linked to a blog post that through extrapolation and gross misunderstanding asserted that bitcoin mining used up as much electricity as all of Ireland (lets use our very best judgement). The truth is the financial industry is 8% of GDP. How much power does it take to air condition all the banks of world? Beyond that there is the fact that not all electricity has significant environmental impact and the fact that bitcoin mining ends up happening in places where electricity is the cheapest and most plentiful, which means it probably is not being generated with coal or oil. This assertion is an enormous detachment from reality based on gut feeling.

fpgaminer 10y ago
Alright, well, here's some math. The Bitcoin network hashrate is currently at ~3,800,000,000 GH/s. The most efficient miners are at ~0.1W/GH. So the Bitcoin network, at its most efficient, would be using 380,000,000 Watts right now. I'm not sure what to compare that against. I looked up and found this article: https://www9.nationalgridus.com/non_html/shared_energyeff_office.pdf https://www9.nationalgridus.com/non_html/shared_energyeff_of... That article says that office buildings use ~1.53 Watts per square foot to cool the building (that's an average 1.53 throughout the year). So the power used to secure the Bitcoin network is equal to cooling ~248 million square feet of office space. Sounds like a lot, but pulling up a random office building, 55 Water Street, and I see it's 3.5 million square feet. The U.S. as a whole uses 446,689,497,716 Watts on average. So Bitcoin is using 0.085% of the total U.S. power consumption. Or, 0.015% of world power consumption. I have no idea if what we are currently spending on the Bitcoin network, in terms of natural resources, is more or less efficient than our current banking system. But those are the numbers. Personally, I don't think any of its relevant. Reducing energy consumption should not be the primary focus of our species. We should focus on increasing sustainable energy _production_. Energy production is a core attribute of our economy and our civilization. It may even be the _most_ important thing to us, as a growing species. Obviously reducing waste when we can is good, but I'd rather expend the majority of our resources building out solar installations rather than quibbling about whether Bitcoin is power efficient or not.
- snowwindwaves 10y ago
  Generally a house that isn't electrically heated or cooled uses 1 kWh per hour. So 380 megawatts for Bitcoin mining is the around the same amount of energy that 380,000 houses would use on a nice day.
- deleted 10y ago
  [deleted]
asymmetric 10y ago
Here's some numbers[0] from a study done by the Natuonal University of Ireland. They conclude that "the power currently used for Bitcoin mining is comparable to Ireland’s electricity consumption." [0]: https://karlodwyer.github.io/publications/pdf/bitcoin_KJOD_2014.pdf https://karlodwyer.github.io/publications/pdf/bitcoin_KJOD_2...

_coldfire 10y ago

Bitcoin mining has congregated around cheap sources of energy, In China at least, many are using surplus energy from the grid in cutprice deals with provincial govts. Undoubtedly there is huge amounts of energy being pumped into Bitcoin daily, but it's environmental effects seem over-hyped compared to many other human endeavours.

acdha 10y ago
Those other activities produce something of value. A pure fiat currency like Bitcoin has no value other than the consensus: gold has a lower bound capped at industrial use and you could at least plant tulip bulbs but if people stop using Bitcoin or switch systems all of that effort will be wasted.