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Running Bitcoin uses a small city’s worth of electricity
- xiphias 9y agoEnergy of a small city is still not big enough to protect from a government takeover. Also what matters more is the cost of the mining equipment (which is more than 1.5 years of electricity if the equipment is refreshed every 1.5 years). Anyways if Intel can make North Korea trust its hardware, I might take a look at their project.
- samstave 9y agoYeah... Weird thought... (I do not know if thi already exists, as I dont care about crytocurrency - only because I dont have the cycles, currently) What if there was a crytocoin that was just a centrally mined 'thing' - and the value of the coin was what others were willing to bid on the next coin vs volume of those willing.... Isnt that literally how gold currently works? So rather than consume billions of watts on bitcoin - just make digital gold?
- paulddraper 9y agoBut what do you do with the payment? With bitcoin, pay for the computers and the electric bill. With gold, pay for the machinery and the miners. It "has" to go somewhere though.
- noncoml 9y agoNo need to bid. Just give X amount of coins to every person and newborn for free.
- lawn 9y agoThe point of Bitcoin is to be p2p cash. A centrally mined thing is... centralized digital cash. We already have central digital cash.
- jontro 9y agoNot sure if I like where this is going. https://software.intel.com/en-us/sgx https://software.intel.com/en-us/sgx sounds like drm for code.
- nvk 9y agoYou could say it's much worst to dig gold out of the ground. (even accounting for the percentage for industrial use)
- maxerickson 9y agoCould you clarify how you are making the comparison? I understand you are talking about the energy cost and other environmental impacts of gold mining, I just don't see how you are determining the present day value of the utility that each thing provides to humanity.
- danmaz74 9y agoBut at least gold isn't designed to make you waste as much energy as you can to secure its value. Instead, Bitcoin (and every other proof of work cryptocurrency) is based exactly on this principle.
- duskwuff 9y agoPrecisely. Bitcoin is, by design, a Red Queen's race -- miners are incentivised to spend more energy on mining, but the total reward available to miners is fixed. "Well, in our country," said Alice, still panting a little, "you'd generally get to somewhere else—if you run very fast for a long time, as we've been doing." "A slow sort of country!" said the Queen. "Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!"
- bdcravens 9y agoThat's the common response to the energy question, but Expedia doesn't take gold. They do take Visa, and they do take Bitcoin, so let's compare those.
- xapata 9y agoWe haven't used a gold-backed currency since the end of Bretton Woods in 1972.
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- stephengillie 9y agoHow much energy does it take to run the US Mint and the US banking industry?
- closeparen 9y agoThe more interesting question is how much per transaction.
- deadmetheny 9y agoEnergy used to run the mint is incidental, so lower energy usage can be an attainable target if it's prioritized. The energy wasted from Bitcoin, on the other hand, is a feature and cannot be reduced without reducing Bitcoin's core functionality.
- lufte 9y agoBut in Bitcoin's case it's the same, even the article mentions that "doing today’s calculations would “consume way more power than is generated on the entire planet” if it were done using the CPUs available when Bitcoin launched in 2009.". Energy used when mining Bitcoin could also be considered incidental, the goal is to calculate hashes.
- imtringued 9y agoNo it wouldn't because increasing energy efficiency of the bitcoin miners just means that the difficulty will rise until you're back to the same power consumption. The power consumption depends on the block reward and transaction fees. >Energy used when mining Bitcoin could also be considered incidental, the goal is to calculate hashes. The goal isn't to calculate hashes. That is the incidental part. The goal is to have a randomly chosen node create one block every X seconds.
- aperrien 9y agoI agree. These out of context questions really bother me, as I have no frame of reference to relate the quantity to to know if it's excessive or not. It just seems like a pure ply for attention. Here are some questions that would make for a better answer: How much energy do household TV's use? How much energy does the sports industry use? How much energy does it take to run our traffic system? How much energy does the gold mining industry use? How much energy does it take to run the US Stock Exchange? At least the article should put up a fair power comparison...
- VMG 9y agoMy best hope is that there will be some kind of OPEC cartel that agrees to limit production. The members could have unused reserves of mining hardware that ramps up when somebody violates the agreement.
- yyyyip 9y agoThe Bitcoin protocol contains an incrementally diminishing mining reward that prevents endless expansion of mining long term
- ZenoArrow 9y ago> "My best hope is that there will be some kind of OPEC cartel that agrees to limit production." Those limits were baked into the design from the start. In the current design there are only 21 million Bitcoins that can be mined, and we're approximately 80% of the way to that target. http://www.bitcoinblockhalf.com/ http://www.bitcoinblockhalf.com/ Also, Bitcoin is designed to be harder to come by as time goes on. The number of new coins issued diminishes over time. See the Supply Growth section here: https://en.wikipedia.org/wiki/Bitcoin https://en.wikipedia.org/wiki/Bitcoin "12.5 bitcoins per block (approximately every ten minutes) until mid 2020, and then afterwards 6.25 bitcoins per block for 4 years until next halving. This halving continues until 2110–40, when 21 million bitcoins will have been issued." There will come a time when Bitcoin mining is no longer profitable. If the scaling problems with the transactions are solved in time, we may see more people trading in Satoshis (fractions of a Bitcoin). The scaling problems are pretty hard to solve though, it's probably going to take a hard fork to make Bitcoin a true alternative to traditional government-backed currencies.
- nnfy 9y agoHow much power is drawn by the "ever-expanding" racks of servers powering other stores of value? How many servers are running in the banking and financial industries just to enable non pseudonymous transactions of value? This article is sensationalist nonsense. I would argue it is a positive point that a globally tradeable cryptocurrency with billions in market cap only requires the energy of a "small city."
- djrogers 9y ago> a globally tradeable cryptocurrency with billions in market cap only requires the energy of a "small city." It only sounds good because we haven't really considered the scale here, so let's scale that up a bit. What if even 1% of non cash financial transactions in the US were handled with BTC? For 2015, that would have worked out to about $1.8T. How big would BTC need to be to handle that? Well, it looks like last year it's estimated to have done a little over $100B, so it'd have to scale somewhere around 15-20x to even cover 1% of one country's transactions... [1] https://www.federalreserve.gov/newsevents/press/other/2016-payments-study-20161222.pdf https://www.federalreserve.gov/newsevents/press/other/2016-p... [2]https://blockchain.info/charts/estimated-transaction-volume?timespan=1year https://blockchain.info/charts/estimated-transaction-volume?...
- tonyztan 9y agoAFAIK Bitcoin mining difficulty adjusts depending on how much processing power is on the network, not how many transactions are being processed.
- uncoder0 9y agoCorrect and certainly not related to the value of those transactions as GP implied.
- nnfy 9y agoYou may have a point, except you haven't mentioned how many city's worth of power non-btc transactions currently require, not to mention the additional inneficiency of hundreds of thousands of staff which could possibly be reduced in number because of the distributed ledger. I really don't think things are as clear cut as the article implies, but I dont have numbers for the amount of energy consumed by modern electronic value transaction and storage. Edit: also, "city's worth" as a measure of electricity, as in the article, is a terrible choice because it immediately biases the reader and does not convey much useful information. My GPU maxes at 300W; the article provides no way of conversion. Never mind that a small city may be a suburb using one hundredth of the power used by a small city center full of servers and a handful of skyscrapers.
- mooneater 9y agoPutting the "trust" back in "trustless" using drm'd hardware, is antithetical to bitcoin's design.
- csomar 9y agoIsn't an Energy-Free-Bitcoin or Cryptocurrency having your lunch and eating it too? If you are going to have a cryptocurrency that consumes little energy (or energy consumption doesn't scale with transactional value), how do you secure the network?
- Lon7 9y agoOne Way is through Proof of Stake, which Ethereum will likely be moving towards in the future. https://en.wikipedia.org/wiki/Proof-of-stake https://en.wikipedia.org/wiki/Proof-of-stake
- csomar 9y agoIsn't that equivalent to "centralization"? Instead of "spending energy" for mining; you spend "credibility" or "holding cash".
- Lon7 9y agoWell, it's no closer to centralization than proof of work is. If one, or more than one party working together control >50% of the staked coins you are left with the same result as one party controlling 50% of the hashing power.
- tonyztan 9y agoI think the assumption is that the more Ethereum you hold, the more incentive you have to keep Ethereum valuable and thus not attack the currency or its transactions.
- maxerickson 9y agoIt depends on whether you consider distributed consensus to be fundamental to cyber coins or not. For instance, a cyber coin could publish a hash of their block chain in the New York Times everyday. A sound implementation would secure the chain up to that point.
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- brockers 9y agoI'm not sure I understand the issue. I'm betting that the amount of energy used to power online games for Play Station Online is orders of magnitude worse than for bitcoin with arguably less benifit to society. What am I missing?
- curiousgal 9y agoExactly, this is a non-issue at best.
- marank 9y agois not bitcoin consuming energy's is people's greed, china or whatever can ban mining same of US can ban industrial mining, bitcoin won't be affected a bit, I would be happy to be able to mine it on my laptop.
- qudat 9y agoThe most striking statistic was that bitcoin is 5000 times more energy intensive than a VISA transaction. Maybe my naive interpretation of what VISA actually does is showing here, but I don't see how it's a valid comparison. Bitcoin doesn't simply replace credit card transactions, it replaces an entire banking system. Who confirms VISA transactions? How can you send and receive transactions through VISA? What about all the facilities that are supporting that transaction? I think it's easier to trace the cost of a bitcoin transaction, which bears the entire cost succinctly, compared to an institution like VISA, which has its tentacles in a ton of energy costing faculties.
- nightcracker 9y agoThe real question is what the hell VISA is doing that one of their transactions requires even a tiny fraction of the work that goes into the mass hashing of Bitcoin.
- deleted 9y ago[deleted]
- CamelCaseName 9y agoVISA has to maintain its data centers. They're working on becoming more energy efficient, but it's a long and involved process. [0] On top of that, there's also the energy required to run the PoS terminals, I'm not sure if that was factored into the equation though because that burden is shifted to vendors. [0] http://www.businesswire.com/news/home/20170725006524/en/ http://www.businesswire.com/news/home/20170725006524/en/
- xapata 9y agoDoes a Bitcoin PoS terminal require less energy or are they about the same?
- eropple 9y agoThat's not "the real question" at all, and to frame it as such smacks of whataboutism. High-availability data centers use power. We understand this. They also have meaningful outputs that Bitcoin struggles to demonstrate on its own.
- elif 9y agoRunning USD uses a small planet's worth of hydrocarbons
- s0rce 9y agoI'm guessing many of the miners are located in regions like Washington State or Quebec with low cost relatively-green hydroelectric power and the power use doesn't correspond to the environmental impact of an average small city (except obviously one located where the miners are).
- _h_o_d_ 9y agoMost of the miners are in China, which runs a lot of coal and gas
- CyberDildonics 9y agoActually lots of mining is done in China using cheap electricity that comes from a glut of hydro-electric power created by government infrastructure spending.
- knodi123 9y agoBut that electricity is cheaply available. We could stop bitcoin's use of electricity overnight, if electricity began to cost more than the expected return on investment. And this will inevitably happen anyway, since bitcoins only get harder to mine over time. This is a temporary problem. Honestly it seems more like "bitcoin is a way to launder stolen electricity" rather than "oh noes, if people keep mining, eventually they'll have a huge impact on global energy consumption"
- matt_wulfeck 9y agoI hate wasteful software. A city’s worth of energy and a max throughout of 7 transactions per second[1]. When everybody’s done trying to get rich quick we can talk about improvements. 1. https://bitcoin.stackexchange.com/questions/53620/what-is-the-maximum-transaction-throughput-of-the-bitcoin-network https://bitcoin.stackexchange.com/questions/53620/what-is-th...
- CyberDildonics 9y agoThe mistake is thinking that the energy used from mining is a direct result from the number of transactions being processed. The reality is that the two are not coupled together. Larger block sizes are obviously possible as demonstrated by bitcoin cash (and by anyone with common sense who hasn't been taken in the censorship on /r/bitcoin). More transaction throughput doesn't affect how much hash power is needed, therefore the main limiting factor is mostly just how many transactions are actually being made.
- bitL 9y agoAnyone finds it silly/irresponsible to trade non-renewable resources for virtual ones?
- CyberDildonics 9y agoWouldn't rendering 3D movies fall under that category?
- bitL 9y agoYou don't make billion movies. You probably make billion transactions though; when these are energy-demanding, you are burning precious resources for very little value. If all of humanity switched to bitcoin, imagine we spent 50% of energy production to run mining and blockchain verification. It's a nice proof of concept, we need something different though to survive.
- CyberDildonics 9y agoThat's not how bitcoin works. The mining power being spent now is not tied to the number of transactions. The price is what is dictating all the mining that is currently being done. More transaction throughput requires almost nothing more from the miners than they are doing now.
- sboselli 9y agoThis is known and well understood. Bitcoin's implementation consumes lots of energy. There have been however lots of developments in the blockchain space, especially as it refers to different proof systems and algorithms. The alt-coins in general, though mostly badly viewed due to the often poor and sleazy behaviours, are a playing ground for exactly this kind of problem. I won't give specific names because I'm not an advocate for any one in particular, but there are several other coins and implementations that try to do away with the energy consumption and improve scaling. Some have even gotten to the point of eliminating mining and transaction fees altogether (yup, zero fees: transfer value anywhere in the world, instantly, and pay absolutely nothing for doing so). A quick google search should point you in the right direction if it sounds interesting.
- korzun 9y agoThis is remarkably good news for Bitcoin because it forces innovation within the energy sector.
- pbreit 9y agoSo...way, way, way less energy than mining for gold? Isn't the energy consumption the whole point?
- BoiledCabbage 9y agoMining for gold has become orders of magnitude more efficient over time. Bit coin will become orders of magnitude less efficient by design...
- louprado 9y agoThe alternatives proposed in the article are also known as Proof of Luck and Proof of Time. Both require a trusted execution environment, which is what Intel's SGX enabled processors provide. Perhaps Intel can find new blockchain applications for their technology, but it is unlikely to be adopted by a digital currency.
- gt_ 9y agoMy novice armchair estimate is that something like ZCash is broadly much less efficient than Bitcoin. Of course, no measure can go beyond a loose estimate.
- AgentME 9y agoI don't think it makes any sense to try to compare the efficiency of different proof of work systems. Now you could compare the work that goes into synchronizing the blockchain between all nodes, but I'd expect that has a near-negligible environmental impact compared to all of the miners. (Individual Zcash transactions are a bigger file size than individual Bitcoin transactions if I remember right.)
- gt_ 9y agoOK I'm confused. Thank you though!
- CJefferson 9y agoThere are real costs to bitcoin, the electricity being burnt in China is killing hundreds of people.
- chrisco255 9y ago/s
- xapata 9y agoWe can tackle problems in parallel. Cultural issues are not a blocking problem.
- lftl 9y agoCould Bitcoin just halve the difficulty and half the reward for mining a block at the same time? Wouldn't that effectively double the throughput of the system? I'm guessing there's some negative consequences to this I don't understand.
- alanfalcon 9y agoThen we’d get blocks twice as quickly, but the transaction capacity of each block is not related to the difficulty or reward, it’s an artificial constraint. You could, say, have blocks 8x as large and increase capcity 8x without affecting the difficulty directly. (Some argue there are other ramifications to this, of course.)
- lftl 9y agoRight, so speeding up blocks is roughly equivalent to increasing the block size, which is what the whole BCH vs. BTC split was over, correct? So I guess the arguments against it would be the same? And if I understand correctly the core argument is that it would make it harder for anyone to verify the entire block chain. Is there any real argument against it beyond that?
- gambiting 9y agoAt the same time there was an article here some time ago showing that bitcoin uses as much energy in a year as a coal mine uses in a day. Everything is relative.
- AKifer 9y agoIsn't that what really backs that currency ? The more you spend value to make it, the more valuable it becomes. Just look at the relative values of BTC and other altcoins that require less energy to mine. IMO there's nothing to worry about it, it's just the natural order of things, you cannot find gold in every house backyard.
- allenz 9y agoNo, you have the causality backwards: the high value of BTC is what incentivizes large investments of electricity and servers. The value of a currency depends only on supply and demand. BTC has the highest demand among cryptocurrencies mainly due to network effects.
- ece 9y agoPyramid schemes are expensive, no shit.
- andrewla 9y agoOne of Bitcoin's biggest obstacles to widespread adoption is the utility problem -- how can Bitcoin transition to being a transactional currency. The problem is a dual one; on the one hand, if you can denominate your supply chain in Bitcoin, then that removes much volatility, because you no longer care about the cost of Bitcoin. But that requires that all of the components of your supply chain are also denominated in Bitcoin. And on the other hand, what is the "appropriate" value for Bitcoin? Is it too expensive right now, or alarmingly cheap? This relates to volatility as well; the uncertainty in how to price the asset is real. The power/Bitcoin correspondence is a way to take a crack at both of these problems. The price of Bitcoin and the price of energy are fundamentally related, once capital costs of Bitcoin mining equipment is removed from the equation. An energy provider can safely denominate their provided energy in Bitcoin because they know that they can use any unpurchased capacity to mine Bitcoin directly. Once we start to see Bitcoin appearing on commodity exchanges, which should be soonish, I think it's likely that power companies (which are already notoriously active in the securities market) will find that they can hedge against price fluctuations with Bitcoin futures; basically leveraging that correspondence. We might be a long way off from them directly billing in Bitcoin, but it would not surprise me to see correlations between energy futures and Bitcoin futures once there's a more liquid market for the latter.
- progx 9y agoBurstcoin!
- cocktailpeanuts 9y agoDear author: Compare Bitcoin mining vs. the entire infrastructure that powers Visa and you'll be so ashamed of yourself for writing this.
- Noos 9y agoif bitcoin were used anywhere near visa was, it would be mining + the infrastructure. How else would you spend them at walmart? They'd need a POS for example.
- cocktailpeanuts 9y agoI'm not saying POW is perfect. I'm just pointing out how idiotic it is to just make this type of statement. Also, Bitcoin is not trying to beat Visa. BitTorrent disrupted the entire entertainment industry without being as fast as regular download.
- sp332 9y agoI think this will solve itself over time. As the block reward gets smaller, miners will afford less and less wasted electricity.
- tromp 9y agoUnless bitcoin doubles in price every 4 years, the frequency of reward halvings. Then cost of electricity used in mining will remain constant.
- sp332 9y agoI don't think it's going to double forever. Transaction fees will eventually outpace the actual block reward and level things out, but even with that it's going to be a much smaller amount per block.
- BoiledCabbage 9y agoI'll repost the same comment I made previously on an Etherium thread. I think We're really under appreciating the pandora's box we've opened. Energy is one of the most important items for societal progress. And the fact we've now designed an industry to get rich quick for throwing it away is a societal burden we'll never get rid of. > Almost all of society functions on energy, some of the largest breakthroughs in society have been on sudden abundance of cheap energy and the machines, vehicles products they can create. Entire economies can be crippled by rising costs in energy (oil shocks of the 70s) and boom by sudden drops in cost of energy. So we've created an "industry" where you are essentially paid by comverting energy to waste. Paid to perform extremely intense difficult (ie wasteful) operations to back a useful technology (digital currency). Assuming it catches on, energy will never be cheap, there will always be a higher floor now due to options for "mining". As we get better at it and it becomes less wasteful, the digital system will simply raise the reward so people are incentivised to once again waste it. Ignore the short term for the moment, and which ever currency you're backing. We've created a long term societal motivation/reward to harvest every joule produce by the sun and use it to calculate hashes. I'm not talking about the next decade obviously, but we have incentivised that behavior. If there is anything technologists should understand is that whatever your beautiful perfect technology is, it will instead be used based on whatever has been incentivised. Regardless of the technology it powers, this is a terrible societal incentive - and one that will be around a lot longer than people are considering.
- sillysaurus3 9y agoIf Bitcoin reaches a 2 trillion market cap, it will require less than 1% additional world energy output. Is less than 1% additional energy usage worth a 2 trillion cap? Well, I'm sure people can find a way to argue that it's not, but the point is that bitcoin isn't this enormous threat to energy usage that people try to argue it is.
- kafkaesq 9y agoIf Bitcoin reaches a 2 trillion market cap, it will require less than 1% additional world energy output. The key question raised in the parent comment, which your own riposte artfully dodges, is once again - who stands to benefit from this N% increase in global energy usage?
- jimjimjim 9y agobitcoin is the This Is Fine dog pouring petrol around the room saying "I wish I started pouring earlier"
- Synaesthesia 9y agoCompared to the environmental damage and pollution caused by the mulitary, it will surely be much smaller. Also motor racing is another huge waster of resources, with no real benefit to the population.
- rwcarlsen 9y agoThinking of the bitcoin network "wasting" money as a "feature" (rather than incidentally) to process transactions is not quite the right way to think about it. From a bird's-eye-view the current baking/financial system of transactions (banks+visa+federal reserve, mints, FINCEN, etc.) all are part of what makes it difficult to cheat with money like USD. Rather than use this huge network of organizations to make it difficult to cheat, bitcoin uses proof-of-work. Replacing all those big, expensive organizations is, well, expensive! I believe bitcoin (or technologies like it) have the potential to be more efficient at this than the current system; bitcoin just makes more explicit the cost of making it expensive to cheat.
- jimjimjim 9y agodo people understand electronic payment transactions? most payment specifications were written when every single byte in a message was important. A lot was done to keep message (and data storage) size as small as possible because that was just common sense. you may think that there are a lot of coin transactions but that's just peanuts compared to the vast vast amount of normal payment transactions.
- horusthecat 9y agoThey hate us for our freedoms
- mrb 9y ago«But estimates by independent researchers suggest it’s around 500 megawatts» My work is starting to pay off. This author appears to have used estimates coming from my research: 470-540 MW as of 26 February 2017.¹ Sometimes people stumble upon and blindly trust the flawed estimate published by digiconomist of ~2000 MW.² ¹http://blog.zorinaq.com/bitcoin-electricity-consumption/ http://blog.zorinaq.com/bitcoin-electricity-consumption/ ²http://blog.zorinaq.com/serious-faults-in-beci/ http://blog.zorinaq.com/serious-faults-in-beci/
- antisthenes 9y agoI absolutely love your blog and have used it many times to show that Bitcoin is much less wasteful than people think it is, mostly due to obsolete miners no longer being used. The data and graphs are very well presented.
- mrb 9y agoThank you! I did put a lot of effort into it, eg. my energy estimate research represents 30-40 hours of work.
- wickedlogic 9y agoThe objections in the comments around this are somewhat funny. There is more than a small city's worth of electricity in whole system waste alone. It is like complaining that you didn't eat all of your bell pepper, when behind you is a whole dumpster full of individually wrapped bell pepper sandwiches being thrown away because a pending sell-by-date or a marketing material change.
- jimjimjim 9y agoburn the world to make a buck
- clarkmoody 9y agoAll of the comments in here that are saying something like, > "well at Bitcoin's current throughput it consumes X, and $large_financial_institution does Y, Bitcoin's equivalent energy usage would be Z" have a fundamental misunderstanding of Bitcoin's mining. The current difficulty to a produce a block is the same, regardless of the transaction throughput of the system. The Merkle root of the block's transactions goes into the block header, and that is hashed over and over. Empty blocks or huge blocks would require approximately the same energy in mining effort.
- freech 9y agoThat is exactly the point of proof of work. Criticizing Bitcoin for this, is like criticizing DNA Evidence for being hard to fake.
- lotsoflumens 9y agoI used to worry about this. Now I realise that my worry came from a scarcity mindset. There is no reason at all to believe that electricity production will always be difficult or expensive. These problems will be solved.