6 ms·

I think it's not entirely valid to say it's useless. Perhaps overly energy intensive, but the whole point of mining is to verify the blockchain, it's not a mind

by joshvm 9y ago

I think it's not entirely valid to say it's useless. Perhaps overly energy intensive, but the whole point of mining is to verify the blockchain, it's not a mindless calculation (though it is artificially inefficient). This is supposedly what the Ethereum proof of stake will fix. The problem is that you have two competing goals: you want fast hashes to keep transactions quick, but since you incentivise hashing, you don't want people to be able to exploit it to print money. Currently, we have around 6M Thash/s. If you pretend that it's all using an Antminer S9 (1.3kW/14Thash) you end up with around half a gigawatt of power running the Bitcoin network. So over a year that's about 4.4TWh per year. In reality, few people have S9's and it's more like 15TWh per year. China alone uses around 4000TWh per year for comparison. That is a staggering amount of power, but the global power consumption is perhaps 1/1000 of China's (or the US's for that matter) annual energy usage. What is the equivalent for, say, VISA or Mastercard processing? Somewhere there are a bunch of enormous datacentres which are processing transactions. I would imagine a lot less (my back of the envelope suggests around 1GWh/year). EDIT: Actually they have VISA's consumption here, so I wasn't far off: http://digiconomist.net/bitcoin-energy-consumption http://digiconomist.net/bitcoin-energy-consumption. I estimated each data centre (x2 with a back up each) to use 8MW of power - they have 2x diesel generators quoted at 4MW. That works out to around 0.25GWh of power per datacentre per year. I assumed that there's probably more overhead elsewhere in the system (i.e. POS readers, etc.) and doubled it. I don't know if their analysis accounts for the fact that each centre has a backup running simultaneously. Also because people seem to be getting the wrong end of the stick here: where did I say that Bitcoin is comparable to VISA? I'm putting the numbers there to show how massively disparate the two networks are. Partly out of curiosity, and partly because you can't just quote one number without a reference point and I think a large finance company is a good place to look. Nor am I saying that bitcoin's inefficiency is somehow justified - it uses more energy than a small country.

bpodgursky 9y ago
First -- that's even worse because VISA powers probably 1/3 of all modern commerce. Bitcoin is a hobby of the .01%. And even if that wasn't the case, it's not comparable because bitcoin is _fundamentally backed_ by the willingness to waste electricity. This is very important, and I feel like people gloss over this. If VISA figured out how to run their datacenters without electricity, they would do it in a heartbeat, and it would have no impact on the amount of processing being done -- they'd just do the work cheaper, and it would be great. If bitcoin mining got more energy efficient, THERE WOULD BE MORE MINERS BECAUSE COSTS DROP. The amount of money miners are willing to waste on hardware and electricity is fundamentally tied to the price, and as the costs go down, it's easier to fight for the fixed-sum payout. This will never change. As bitcoin gets more popular, a proportionally large amount of electricity is WORTH BEING WASTED. It is a fundamentally broken model, if you are trying not to rape the environment.
- silverdrake11 9y ago
  You could argue that energy is being wasted in traditional currency systems. Printing currency, ATM machines, cash registers, transporting cash in armored cars. This energy doesn't serve any purpose besides maintaining the currency itself, similar to bitcoin.
- chaostheory 9y ago
  > Bitcoin is a hobby of the .01%. It's still relatively easily accessible to the middle class. It also allows the middle class in regimes with unstable currencies to more easily transfer and store value.
- joshvm 9y ago
  I think you're reading too much into my post. I was simply curious to see what the actual numbers were. There's no point saying "Bitcoin is bad." without any justification: so I justified it - it's insanely inefficient. And you need that extra data point (VISA) to see just how inefficient it is. My favourite horrifying fact is that if Bitcoin were a country ranked by energy consumption it would come in at around North Korea.
- shpongled 9y ago
  You're off your rocker - a "hobby of the .01%". If you can't see the potential of a decentralized cryptographically secure store-of-value/currency then you are incredibly short sighted.
  - bpodgursky 9y ago
    The point is that almost nobody uses bitcoin, and it still uses as much electricity as VISA (or more). If it became the currency of the masses, we'd spend half the world's electricity farming blocks.
    - Dylan16807 9y ago
      > If it became the currency of the masses, we'd spend half the world's electricity farming blocks. Yeah, some rough math on current market cap suggests not quite half but probably more than a tenth. But the problem is saying the 0.01%. Bitcoin is certainly used by a small fraction of people, but it's not at all a rich-person thing.
mikeash 9y ago
Bitcoin feels like digging a mine with plastic spoons. Technically speaking the energy is not useless, since it does go into digging. But at the same time there are far more efficient ways to do it, so "useless" is a pretty decent way to describe the vast excess. The comparison with VISA is bonkers once you account for the different sizes involved. Bitcoin uses 26,000 times more energy per transaction. If energy per transaction remained constant while Bitcoin scaled to the size of VISA (a dubious assumption, to be sure) then Bitcoin's total power consumption would be 390,000TWh/year, several times more energy than is consumed by human civilization worldwide at present. Edit: it sure would be nice if we could just price the externalities into energy costs, then all of this would just work itself out and we wouldn't have to worry about it.
- JohnJamesRambo 9y ago
  All the electricity spent isn't to do the transactions, it is actually a security cost to prevent 51% attacks on the blockchain. Amassing the amount of miners and electricity to do that attack becomes immense, hence the security. Hopefully in the future Ethereum's proof of stake implementation can solve the problem without wasting electricity.
  - mikeash 9y ago
    The purpose of that security is to protect the integrity of the transactions. Without transactions, the network is pointless. The energy used for mining should be charged to the transactions, just like the energy VISA uses to light its offices would be.
    - Dylan16807 9y ago
      > The energy used for mining should be charged to the transactions I mean, it basically is. The built-in rewards drop every couple years, so the only reason people will continue to mine is for transaction fees. What are you suggesting should be different?
      - 9y ago
hueving 9y ago
The data center doesn't consume the max output of each diesel, that would be an idiotic design. Also, Visa handles orders of magnitude more transactions per second so the energy difference is staggering. Bitcoin users are like regular people driving around in coal fired steam locomotives.
- joshvm 9y ago
  Right, but this is a Fermi problem. We have no idea what the true output of each generator is, or that there are only two per centre. All we know is anecdotal evidence from reporters who visited the sites and whatever VISA will publicly admit. As an order of magnitude estimate, it's good enough. And yes - it does highlight the problem with bitcoin well: 3 orders of magnitude less electricity to process 3 orders of magnitude more transactions.
wmf 9y ago
Bitcoin mining is wasteful compared to other mechanisms (e.g. Stellar SCP) that can secure a blockchain without mining.
deleted 9y ago
[deleted]

by joshvm 9y ago

bpodgursky 9y ago

First -- that's even worse because VISA powers probably 1/3 of all modern commerce. Bitcoin is a hobby of the .01%. And even if that wasn't the case, it's not comparable because bitcoin is _fundamentally backed_ by the willingness to waste electricity. This is very important, and I feel like people gloss over this. If VISA figured out how to run their datacenters without electricity, they would do it in a heartbeat, and it would have no impact on the amount of processing being done -- they'd just do the work cheaper, and it would be great. If bitcoin mining got more energy efficient, THERE WOULD BE MORE MINERS BECAUSE COSTS DROP. The amount of money miners are willing to waste on hardware and electricity is fundamentally tied to the price, and as the costs go down, it's easier to fight for the fixed-sum payout. This will never change. As bitcoin gets more popular, a proportionally large amount of electricity is WORTH BEING WASTED. It is a fundamentally broken model, if you are trying not to rape the environment.

silverdrake11 9y ago
You could argue that energy is being wasted in traditional currency systems. Printing currency, ATM machines, cash registers, transporting cash in armored cars. This energy doesn't serve any purpose besides maintaining the currency itself, similar to bitcoin.
chaostheory 9y ago
> Bitcoin is a hobby of the .01%. It's still relatively easily accessible to the middle class. It also allows the middle class in regimes with unstable currencies to more easily transfer and store value.
joshvm 9y ago
I think you're reading too much into my post. I was simply curious to see what the actual numbers were. There's no point saying "Bitcoin is bad." without any justification: so I justified it - it's insanely inefficient. And you need that extra data point (VISA) to see just how inefficient it is. My favourite horrifying fact is that if Bitcoin were a country ranked by energy consumption it would come in at around North Korea.
shpongled 9y ago
You're off your rocker - a "hobby of the .01%". If you can't see the potential of a decentralized cryptographically secure store-of-value/currency then you are incredibly short sighted.
- bpodgursky 9y ago
  The point is that almost nobody uses bitcoin, and it still uses as much electricity as VISA (or more). If it became the currency of the masses, we'd spend half the world's electricity farming blocks.
  - Dylan16807 9y ago
    > If it became the currency of the masses, we'd spend half the world's electricity farming blocks. Yeah, some rough math on current market cap suggests not quite half but probably more than a tenth. But the problem is saying the 0.01%. Bitcoin is certainly used by a small fraction of people, but it's not at all a rich-person thing.

mikeash 9y ago

Bitcoin feels like digging a mine with plastic spoons. Technically speaking the energy is not useless, since it does go into digging. But at the same time there are far more efficient ways to do it, so "useless" is a pretty decent way to describe the vast excess. The comparison with VISA is bonkers once you account for the different sizes involved. Bitcoin uses 26,000 times more energy per transaction. If energy per transaction remained constant while Bitcoin scaled to the size of VISA (a dubious assumption, to be sure) then Bitcoin's total power consumption would be 390,000TWh/year, several times more energy than is consumed by human civilization worldwide at present. Edit: it sure would be nice if we could just price the externalities into energy costs, then all of this would just work itself out and we wouldn't have to worry about it.

JohnJamesRambo 9y ago
All the electricity spent isn't to do the transactions, it is actually a security cost to prevent 51% attacks on the blockchain. Amassing the amount of miners and electricity to do that attack becomes immense, hence the security. Hopefully in the future Ethereum's proof of stake implementation can solve the problem without wasting electricity.
- mikeash 9y ago
  The purpose of that security is to protect the integrity of the transactions. Without transactions, the network is pointless. The energy used for mining should be charged to the transactions, just like the energy VISA uses to light its offices would be.
  - Dylan16807 9y ago
    > The energy used for mining should be charged to the transactions I mean, it basically is. The built-in rewards drop every couple years, so the only reason people will continue to mine is for transaction fees. What are you suggesting should be different?
    - 9y ago

hueving 9y ago

The data center doesn't consume the max output of each diesel, that would be an idiotic design. Also, Visa handles orders of magnitude more transactions per second so the energy difference is staggering. Bitcoin users are like regular people driving around in coal fired steam locomotives.

joshvm 9y ago
Right, but this is a Fermi problem. We have no idea what the true output of each generator is, or that there are only two per centre. All we know is anecdotal evidence from reporters who visited the sites and whatever VISA will publicly admit. As an order of magnitude estimate, it's good enough. And yes - it does highlight the problem with bitcoin well: 3 orders of magnitude less electricity to process 3 orders of magnitude more transactions.

wmf 9y ago

Bitcoin mining is wasteful compared to other mechanisms (e.g. Stellar SCP) that can secure a blockchain without mining.

deleted 9y ago

[deleted]