7 ms·

DLTs are inefficient by design. The energy consumption is unsustainable with the technology as it stands. For example Bitcoin consumed an estimated 40 million K

DLTs are inefficient by design. The energy consumption is unsustainable with the technology as it stands. For example Bitcoin consumed an estimated 40 million KWh in the past 24 hours - 137KWh per transaction. Enough to power ~1.3M American homes. Many of the alt-coins are even worse. Source: http://digiconomist.net/bitcoin-energy-consumption http://digiconomist.net/bitcoin-energy-consumption

hdhzy 9y ago
I wonder what's the energy consumption of an average credit card transaction (including keeping the infrastructure, charge backs etc.)...
- _Marak_ 9y ago
  From the article: VISA Network Statistics VISA's estimated annual electricity consumption (TWh) 0.54 Number of U.S. households that could be powered by VISA 50,000 Electricity consumed per transaction (KWh) 0.00651 Number of seconds the electricity consumed by 1 VISA transaction could power 1 U.S. household 19 Number of VISA transactions that could be powered with the electricity consumed by 1 Bitcoin transaction 20,983 `
  - Rmilb 9y ago
    A decentralized network has trade offs associated with it.
- runeks 9y ago
  The more important point is that VISA is broken by design. Every day hackers steal credit card info and leech millions from the system, which is included in the fee you pay. The only reason it keeps working is because hackers aren't sufficiently sophisticated yet. The solution, of course, is to store a private key on a hardware device, not have the private key be 16+3 decimal digits and an expiration date.
  - UncleMeat 9y ago
    That is entirely unrelated to a decentralized or centralized design. One could build a centralized CC network where we don't need to transmit credentials to third parties in order to make purchases.
  - bo1024 9y ago
    I agree with you, but this is in principle a separate issue. We would like to aim for a system that has both the security of Bitcoin AND the "efficiency" of, in this example, VISA.
    - runeks 9y ago
      That would be great, but what if such a system doesn't exist? Pointing out inefficiencies in Bitcoin isn't very useful when no alternative exists to reach the same level of decentralization.
wayn3 9y ago
i think its a fair argument to claim that bleeding edge technology is inefficient during its invention phase. the very first fusion reactors arent all that efficient, either.
- nradov 9y ago
  The very latest fusion reactors aren't efficient either, still under unity. Maybe we'll have commercial fusion power in 30 years...
  - wayn3 9y ago
    I used present tense for a reason.
runeks 9y ago
Gold is also inefficient by design. But it's been successfully used as a store of value for thousands of years. It causes miners to expend large amounts of energy to extract gold from dirt. "Inefficient by design" misses the point because proof-of-work is the feature, not an inefficiency. I've written about the similarity between gold and Bitcoin here: https://runeksvendsen.github.io/blog/posts/2017-06-14-bitcoin-is-the-commoditisation-of-energy.html https://runeksvendsen.github.io/blog/posts/2017-06-14-bitcoi...
quinndupont 9y ago
This argument certainly has some validity (see also Ensmenger's project to understand the environmental role of computing in general: http://homes.soic.indiana.edu/nensmeng/enviro-compute/dirtybits.html http://homes.soic.indiana.edu/nensmeng/enviro-compute/dirtyb...). However, it only goes so far, since other consensus mechanisms could have lower energy requirements. Proof of stake, e.g., (if it ever gets off the ground) could change the game. Similarly, if the economics of proof of work were re-jigged, it isn't impossible that the energy required for mining could be dramatically lowered. But, as it stands, Bitcoin, in particular, has a shamefully large environmental footprint.

hdhzy 9y ago

I wonder what's the energy consumption of an average credit card transaction (including keeping the infrastructure, charge backs etc.)...

_Marak_ 9y ago
From the article: VISA Network Statistics VISA's estimated annual electricity consumption (TWh) 0.54 Number of U.S. households that could be powered by VISA 50,000 Electricity consumed per transaction (KWh) 0.00651 Number of seconds the electricity consumed by 1 VISA transaction could power 1 U.S. household 19 Number of VISA transactions that could be powered with the electricity consumed by 1 Bitcoin transaction 20,983 `
- Rmilb 9y ago
  A decentralized network has trade offs associated with it.
runeks 9y ago
The more important point is that VISA is broken by design. Every day hackers steal credit card info and leech millions from the system, which is included in the fee you pay. The only reason it keeps working is because hackers aren't sufficiently sophisticated yet. The solution, of course, is to store a private key on a hardware device, not have the private key be 16+3 decimal digits and an expiration date.
- UncleMeat 9y ago
  That is entirely unrelated to a decentralized or centralized design. One could build a centralized CC network where we don't need to transmit credentials to third parties in order to make purchases.
- bo1024 9y ago
  I agree with you, but this is in principle a separate issue. We would like to aim for a system that has both the security of Bitcoin AND the "efficiency" of, in this example, VISA.
  - runeks 9y ago
    That would be great, but what if such a system doesn't exist? Pointing out inefficiencies in Bitcoin isn't very useful when no alternative exists to reach the same level of decentralization.

wayn3 9y ago

i think its a fair argument to claim that bleeding edge technology is inefficient during its invention phase. the very first fusion reactors arent all that efficient, either.

nradov 9y ago
The very latest fusion reactors aren't efficient either, still under unity. Maybe we'll have commercial fusion power in 30 years...
- wayn3 9y ago
  I used present tense for a reason.

runeks 9y ago

Gold is also inefficient by design. But it's been successfully used as a store of value for thousands of years. It causes miners to expend large amounts of energy to extract gold from dirt. "Inefficient by design" misses the point because proof-of-work is the feature, not an inefficiency. I've written about the similarity between gold and Bitcoin here: https://runeksvendsen.github.io/blog/posts/2017-06-14-bitcoin-is-the-commoditisation-of-energy.html https://runeksvendsen.github.io/blog/posts/2017-06-14-bitcoi...

quinndupont 9y ago

This argument certainly has some validity (see also Ensmenger's project to understand the environmental role of computing in general: http://homes.soic.indiana.edu/nensmeng/enviro-compute/dirtybits.html http://homes.soic.indiana.edu/nensmeng/enviro-compute/dirtyb...). However, it only goes so far, since other consensus mechanisms could have lower energy requirements. Proof of stake, e.g., (if it ever gets off the ground) could change the game. Similarly, if the economics of proof of work were re-jigged, it isn't impossible that the energy required for mining could be dramatically lowered. But, as it stands, Bitcoin, in particular, has a shamefully large environmental footprint.