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Question: Are the resource demands of the entire world banking system a perverse use of resources? If bitcoin supplants a large chunk of that system but in doin

Question: Are the resource demands of the entire world banking system a perverse use of resources? If bitcoin supplants a large chunk of that system but in doing so uses less resources overall...?

mikeash 9y ago
The second question is based on faulty assumptions. Bitcoin uses orders of magnitude more energy per transaction.
- ayemiller 9y ago
  Does it? How many employees does bitcoin have?...
  - mikeash 9y ago
    Yes, it does. The figures are out there. Bitcoin is absolutely tiny on the scale of global finance, so the denominator is extremely small. Not having employees doesn't save it.
- honestlyreally 9y ago
  But virtually all mining is done near cheap renewable power. People talk a lot about how much energy it uses, yet to see attempt at quantifying co2 emissions, they are likely quite low.
  - ctz 9y ago
    In a country with an electricity grid and 60% coal-based electricity generation.
  - mikeash 9y ago
    Couldn't that cheap renewable electricity be transmitted and used elsewhere if the miners weren't using it? The disparity in energy use is so large that even if Bitcoin mining emitted only 1% of the CO2 per kWh that normal energy users do, it would still be far ahead.
- redcalx 9y ago
  > energy per transaction The lightning network may address this specific concern. I.e. bitcoin may become primarily a settlement mechanism for a much less resource hungry payment handling protocol/layer.
- yebyen 9y ago
  Humans are involved in banking transactions too, don't discount the carbon footprint of the collective of bankers and bank tellers. Those people won't go away if we eliminated the whole banking system, but their carbon footprint will not have been wasted on the tracking and transfer of assets!
  - mikeash 9y ago
    A single bitcoin transaction uses about as much energy as the average American uses in 10 hours. As long as those bankers are doing at least a couple of transactions per day, they still come out ahead.
    - yebyen 9y ago
      "They get more done" =/= "They do more things" =/= "They are more efficient" There is downward pressure on the transaction volume of bitcoin for bitcoin users, because each individual transaction costs so much. This is not exactly an advantage of Bitcoin, I'll admit, but there are some people who will consider Bitcoin a success if ultimately it is only used for larger settlements between payment companies (they would prefer to see Bitcoin is not involved in micro-transactions, they would raise the tx fees to make this use case impracticable.) All I'm saying is, don't look at Bitcoin handling an average of 7 transactions per second and say "that's less efficient" because your average Bitcoin transaction is currently trending toward being significantly more complicated than your average credit card transaction. (And even after the recent improvements and pricing hype, I'm not actually betting on Bitcoin myself.) The BTC system, by design, is unsuitable for trustless person-to-person transactions in the form of Point-of-Sale. Every merchant who operates Bitcoin is trained to know that the transaction is not over until it's mined and in a block, and it's really much safer to wait at least a few blocks. So if you're selling coffee, maybe you don't worry about it because absolutely nobody is waiting 30 minutes for their cup of coffee, and if someone defrauds you more than twice you'll surely remember their face. By then you're still only out ~$10, and the cost of each attack is high, and likelihood of success is non-zero but fairly low. So you can eat the loss for the cup of coffee, sure, but this is definitely not a great sales pitch for Point-of-Sale system at BestBuy or basically anywhere else. Ethereum, on the other hand, mines a block on average every 14 seconds. You could realistically be safe and use that in a Point-of-Sale system. (And I'm not the expert, there may be even better systems than Ethereum. But don't say Visa... :-)
consto 9y ago
Bitcoin can never and will never be a fraction of the efficiency of the modern world banking system, and it can never and will never be able to handle the number of transactions. While you could argue that updates and changes over the years might be able to mould Bitcoin into an efficient transaction network, at that point it would not be Bitcoin anymore. VISA is capable of handling 56,000 transactions per second [1] while Bitcoin is capable of handing a measly 2.5 [2]. Bitcoin would need to scale by 224,000% to match VISA, and VISA is one of my different global networks. I don't know how much energy VISA uses but as of today, the bitcoin network is estimated to be using 16TWh [3], that's the same as all of Jordan or Lebanon or 5.2% of the energy consumption of the United Kingdom [4]. Assuming no energy consumption improvements, to scale to VISA levels Bitcoin would need to consume 224,000% more energy. That's 35,840TWh, which is nearly twice as much energy as the entire planet uses (21,776TWh)!!! So, if Bitcoin is able to become 90% more efficient, it would only require as much energy as nearly two European Unions. If Bitcoin is able to become 99% more efficient, it would only require as much energy more energy than the entire United Kingdom. If Bitcoin is able to become 99.9% more efficient, it would only require as much energy as Qatar. I can keep going but I won't. I might have made a mistake and been a factor out, but even then it doesn't even matter, that's how ridiculous the numbers are. I don't know about you but I find it rather unlikely that Bitcoin will every be a viable replacement for the world banking system. Maybe in a universe where Nuclear fusion is easy and ASICs never wear out, and the cost of cooling them is free but unfortunately for Bitcoin we don't live in that universe. Bitcoin and crypocurrancys are horrible inventions if you care about the planet, if you think a massive decentralised network where value is created from ever increasing difficulty proof of work could be more efficient than VISA you are frankly deluded. Granted, this is someone who does not own any Bitcoins, so maybe I just haven't drunk the kool aid. --- 1. https://usa.visa.com/dam/VCOM/download/corporate/media/visa-fact-sheet-Jun2015.pdf https://usa.visa.com/dam/VCOM/download/corporate/media/visa-... 2. https://blockchain.info/charts/transactions-per-second https://blockchain.info/charts/transactions-per-second 3. https://digiconomist.net/bitcoin-energy-consumption https://digiconomist.net/bitcoin-energy-consumption 4. https://en.wikipedia.org/wiki/List_of_countries_by_electricity_consumption https://en.wikipedia.org/wiki/List_of_countries_by_electrici...
- gruez 9y ago

Question: Are the resource demands of the entire world banking system a perverse use of resources? If bitcoin supplants a large chunk of that system but in doing so uses less resources overall...?

mikeash 9y ago

The second question is based on faulty assumptions. Bitcoin uses orders of magnitude more energy per transaction.

ayemiller 9y ago
Does it? How many employees does bitcoin have?...
- mikeash 9y ago
  Yes, it does. The figures are out there. Bitcoin is absolutely tiny on the scale of global finance, so the denominator is extremely small. Not having employees doesn't save it.
honestlyreally 9y ago
But virtually all mining is done near cheap renewable power. People talk a lot about how much energy it uses, yet to see attempt at quantifying co2 emissions, they are likely quite low.
- ctz 9y ago
  In a country with an electricity grid and 60% coal-based electricity generation.
- mikeash 9y ago
  Couldn't that cheap renewable electricity be transmitted and used elsewhere if the miners weren't using it? The disparity in energy use is so large that even if Bitcoin mining emitted only 1% of the CO2 per kWh that normal energy users do, it would still be far ahead.
redcalx 9y ago
> energy per transaction The lightning network may address this specific concern. I.e. bitcoin may become primarily a settlement mechanism for a much less resource hungry payment handling protocol/layer.
yebyen 9y ago
Humans are involved in banking transactions too, don't discount the carbon footprint of the collective of bankers and bank tellers. Those people won't go away if we eliminated the whole banking system, but their carbon footprint will not have been wasted on the tracking and transfer of assets!
- mikeash 9y ago
  A single bitcoin transaction uses about as much energy as the average American uses in 10 hours. As long as those bankers are doing at least a couple of transactions per day, they still come out ahead.
  - yebyen 9y ago
    "They get more done" =/= "They do more things" =/= "They are more efficient" There is downward pressure on the transaction volume of bitcoin for bitcoin users, because each individual transaction costs so much. This is not exactly an advantage of Bitcoin, I'll admit, but there are some people who will consider Bitcoin a success if ultimately it is only used for larger settlements between payment companies (they would prefer to see Bitcoin is not involved in micro-transactions, they would raise the tx fees to make this use case impracticable.) All I'm saying is, don't look at Bitcoin handling an average of 7 transactions per second and say "that's less efficient" because your average Bitcoin transaction is currently trending toward being significantly more complicated than your average credit card transaction. (And even after the recent improvements and pricing hype, I'm not actually betting on Bitcoin myself.) The BTC system, by design, is unsuitable for trustless person-to-person transactions in the form of Point-of-Sale. Every merchant who operates Bitcoin is trained to know that the transaction is not over until it's mined and in a block, and it's really much safer to wait at least a few blocks. So if you're selling coffee, maybe you don't worry about it because absolutely nobody is waiting 30 minutes for their cup of coffee, and if someone defrauds you more than twice you'll surely remember their face. By then you're still only out ~$10, and the cost of each attack is high, and likelihood of success is non-zero but fairly low. So you can eat the loss for the cup of coffee, sure, but this is definitely not a great sales pitch for Point-of-Sale system at BestBuy or basically anywhere else. Ethereum, on the other hand, mines a block on average every 14 seconds. You could realistically be safe and use that in a Point-of-Sale system. (And I'm not the expert, there may be even better systems than Ethereum. But don't say Visa... :-)

consto 9y ago

Bitcoin can never and will never be a fraction of the efficiency of the modern world banking system, and it can never and will never be able to handle the number of transactions. While you could argue that updates and changes over the years might be able to mould Bitcoin into an efficient transaction network, at that point it would not be Bitcoin anymore. VISA is capable of handling 56,000 transactions per second [1] while Bitcoin is capable of handing a measly 2.5 [2]. Bitcoin would need to scale by 224,000% to match VISA, and VISA is one of my different global networks. I don't know how much energy VISA uses but as of today, the bitcoin network is estimated to be using 16TWh [3], that's the same as all of Jordan or Lebanon or 5.2% of the energy consumption of the United Kingdom [4]. Assuming no energy consumption improvements, to scale to VISA levels Bitcoin would need to consume 224,000% more energy. That's 35,840TWh, which is nearly twice as much energy as the entire planet uses (21,776TWh)!!! So, if Bitcoin is able to become 90% more efficient, it would only require as much energy as nearly two European Unions. If Bitcoin is able to become 99% more efficient, it would only require as much energy more energy than the entire United Kingdom. If Bitcoin is able to become 99.9% more efficient, it would only require as much energy as Qatar. I can keep going but I won't. I might have made a mistake and been a factor out, but even then it doesn't even matter, that's how ridiculous the numbers are. I don't know about you but I find it rather unlikely that Bitcoin will every be a viable replacement for the world banking system. Maybe in a universe where Nuclear fusion is easy and ASICs never wear out, and the cost of cooling them is free but unfortunately for Bitcoin we don't live in that universe. Bitcoin and crypocurrancys are horrible inventions if you care about the planet, if you think a massive decentralised network where value is created from ever increasing difficulty proof of work could be more efficient than VISA you are frankly deluded. Granted, this is someone who does not own any Bitcoins, so maybe I just haven't drunk the kool aid. --- 1. https://usa.visa.com/dam/VCOM/download/corporate/media/visa-fact-sheet-Jun2015.pdf https://usa.visa.com/dam/VCOM/download/corporate/media/visa-... 2. https://blockchain.info/charts/transactions-per-second https://blockchain.info/charts/transactions-per-second 3. https://digiconomist.net/bitcoin-energy-consumption https://digiconomist.net/bitcoin-energy-consumption 4. https://en.wikipedia.org/wiki/List_of_countries_by_electricity_consumption https://en.wikipedia.org/wiki/List_of_countries_by_electrici...

gruez 9y ago