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The most striking statistic was that bitcoin is 5000 times more energy intensive than a VISA transaction. Maybe my naive interpretation of what VISA actually d

by qudat 9y ago

The 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 ago
The 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 ago
  VISA 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 ago
    Does a Bitcoin PoS terminal require less energy or are they about the same?
- eropple 9y ago
  That'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.
lukev 9y ago
Bitcoin isn't a payment processor. It can't handle the tiniest fraction of Visa's transaction volume natively. Of course you can work around this by having third party payment processors that sit between customers and the raw blockchain. But because Visa already does much of that, you need to include the cost of those as well, in order to get an apples-to-apples comparison.
- brink 9y ago
  Right, don't think of Bitcoin as digital dollars. Bitcoin is more like digital gold. Use it to hedge the digital markets, but don't use it to buy coffee. Granted, some coffee shops will take your "digital gold" as they would take a sliver of actual gold, but logistically it doesn't make sense.
- lawn 9y ago
  That's true. However the transaction throughput doesn't depend on the hashrate. The network could for example handle 10x or 100x the number of transaction with the same hashrate as today.
- sillysaurus3 9y ago
  It can't handle the tiniest fraction of Visa's transaction volume natively. Not actually true. See the Lightning proposal.
  - lawn 9y ago
    1. It's not Bitcoin, it's a sidechain utilizing Bitcoin 2. It's not certain it can work in a decentralized way
    - sillysaurus3 9y ago
      It's bitcoin. It uses bitcoin, it's powered by bitcoin, it's bitcoin. The sidechain distinction isn't a helpful one if people end up using it by default. Yes, it's uncertain it will work, but the point is that it's not inherently obvious that bitcoin can't accommodate Visa's transaction volume. The above comment made it seem like that's a given.
matt_wulfeck 9y ago
5000x the energy and provides a maximum throughout of 7 transactions-per-second, so you’re right. They’re completely different leagues.
- JBReefer 9y ago
  Yeah, Visa is useful.
austenallred 9y ago
That doesn’t include the cost of visa actually processing the transaction though. It’s including governance, maintenance, arbitration, etc. Bitcoin does much more than just move cash from a to b.
kllrnohj 9y ago
VISA is a credit agency. As in, they confirm the money is paid, nobody else. There's no other transaction that happens as part of paying with VISA other than the monthly bill. But it should be glaringly obvious that Bitcoin is by far the most expensive way to do financial transactions. That shouldn't even be contentious. It's literally built on the idea of doing computationally-expensive busywork. Whether or not that busywork is a waste of power or a necessary cost then depends on your social beliefs, but it's definitely going to be vastly more power-expensive than any of the existing systems.
- Animats 9y ago
  Even excluding mining cost, Bitcoin does a lot of work per transaction. Every full node gets an update for every transaction.
  - _jtrig 9y ago
    The bitcoin network leverages electricity/computing costs as a way to ensure competitive decentralized security. It's driving electrical/computational consumption efficiency but its definitely a catch-22 as with most technology.
- lojack 9y ago
  > There's no other transaction that happens as part of paying with VISA other than the monthly bill. I respectfully disagree. There are many many transactions that happen behind the scenes when you're paying with a Visa card. All transactions go through a merchant bank before ever being sent to Visa, and they may even go through a second third party. Additionally there's a number of times in which clearing and settlement occurs, both on the merchant side and on the "monthly bill" part that you discounted as irrelevant. This all takes energy, the POS takes energy, the banks all require energy to process transactions, it takes energy to send out statements, to pay your bill. I have no clue if this entire process takes more energy than Bitcoin or not, but I can guarantee the cost of doing a transaction through Visa isn't glaringly obvious.
  - kllrnohj 9y ago
Alex3917 9y ago
A lot of the energy that powers Bitcoin would otherwise go unused though, e.g. energy from very remote hydroelectric dams in Siberia, China, and Canada.

by qudat 9y ago

nightcracker 9y ago

The 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 ago
VISA 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 ago
  Does a Bitcoin PoS terminal require less energy or are they about the same?
eropple 9y ago
That'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.

lukev 9y ago

Bitcoin isn't a payment processor. It can't handle the tiniest fraction of Visa's transaction volume natively. Of course you can work around this by having third party payment processors that sit between customers and the raw blockchain. But because Visa already does much of that, you need to include the cost of those as well, in order to get an apples-to-apples comparison.

brink 9y ago
Right, don't think of Bitcoin as digital dollars. Bitcoin is more like digital gold. Use it to hedge the digital markets, but don't use it to buy coffee. Granted, some coffee shops will take your "digital gold" as they would take a sliver of actual gold, but logistically it doesn't make sense.
lawn 9y ago
That's true. However the transaction throughput doesn't depend on the hashrate. The network could for example handle 10x or 100x the number of transaction with the same hashrate as today.
sillysaurus3 9y ago
It can't handle the tiniest fraction of Visa's transaction volume natively. Not actually true. See the Lightning proposal.
- lawn 9y ago
  1. It's not Bitcoin, it's a sidechain utilizing Bitcoin 2. It's not certain it can work in a decentralized way
  - sillysaurus3 9y ago
    It's bitcoin. It uses bitcoin, it's powered by bitcoin, it's bitcoin. The sidechain distinction isn't a helpful one if people end up using it by default. Yes, it's uncertain it will work, but the point is that it's not inherently obvious that bitcoin can't accommodate Visa's transaction volume. The above comment made it seem like that's a given.

matt_wulfeck 9y ago

5000x the energy and provides a maximum throughout of 7 transactions-per-second, so you’re right. They’re completely different leagues.

JBReefer 9y ago
Yeah, Visa is useful.

austenallred 9y ago

That doesn’t include the cost of visa actually processing the transaction though. It’s including governance, maintenance, arbitration, etc. Bitcoin does much more than just move cash from a to b.

kllrnohj 9y ago

VISA is a credit agency. As in, they confirm the money is paid, nobody else. There's no other transaction that happens as part of paying with VISA other than the monthly bill. But it should be glaringly obvious that Bitcoin is by far the most expensive way to do financial transactions. That shouldn't even be contentious. It's literally built on the idea of doing computationally-expensive busywork. Whether or not that busywork is a waste of power or a necessary cost then depends on your social beliefs, but it's definitely going to be vastly more power-expensive than any of the existing systems.

Animats 9y ago
Even excluding mining cost, Bitcoin does a lot of work per transaction. Every full node gets an update for every transaction.
- _jtrig 9y ago
  The bitcoin network leverages electricity/computing costs as a way to ensure competitive decentralized security. It's driving electrical/computational consumption efficiency but its definitely a catch-22 as with most technology.
lojack 9y ago
> There's no other transaction that happens as part of paying with VISA other than the monthly bill. I respectfully disagree. There are many many transactions that happen behind the scenes when you're paying with a Visa card. All transactions go through a merchant bank before ever being sent to Visa, and they may even go through a second third party. Additionally there's a number of times in which clearing and settlement occurs, both on the merchant side and on the "monthly bill" part that you discounted as irrelevant. This all takes energy, the POS takes energy, the banks all require energy to process transactions, it takes energy to send out statements, to pay your bill. I have no clue if this entire process takes more energy than Bitcoin or not, but I can guarantee the cost of doing a transaction through Visa isn't glaringly obvious.
- kllrnohj 9y ago

Alex3917 9y ago

A lot of the energy that powers Bitcoin would otherwise go unused though, e.g. energy from very remote hydroelectric dams in Siberia, China, and Canada.