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Has there been articles or research done on how much energy is used to coin, print, distribute, and utilize fiat currencies?

Nursie 9y ago
Yeah, it's far far less.
brazzy 9y ago
I don't know, but the infrastructure for fiat currencies can achieve efficiency gains through scale. Bitcoin cannot, on a very fundamental level: energy expenditure for mining must at all times be so high that an attack is financially unattractive. So energy usage has to increase linearly with the market cap - and completely independant of how many transactions there are.
jcranmer 9y ago
The Bureau of Printing and Engraving budgeted $14.35 million in FY2017 for "Communication, utilities, and misc. charges." If we assume that 100% of that is electricity costs, and that electricity costs 12¢/kWh, then we get somewhere in the region of 120 million kWh in FY2017 to produce USD. That is 0.1% the annual electricity consumption of Argentina.
- yithump 9y ago
  Just checked the Treasury 2017 budget which is around 3 billion.
mutatio 9y ago
I think it's only fair to include the cost of governments and armies in these costs, i.e. the value of GBP/USD is in part secured by guns and everything that comes with it.
- CJefferson 9y ago
  I suspect if you tried using bitcoin in a country with no government or army, it would turn out to not be very useful either.
simonh 9y ago
Most Fiat currency and transactions are electronic, so they cost infinitesimal amounts of energy to ‘coin’ and transactions are just simple addition and subtraction. Conversely, bitcoin cost a relatively vast amount of energy to mine, are extremely bulky to store compared to a fairly compact numeric value, and also can cost a huge amount of energy per transaction since every transaction is highly complex and is replicated across the entire network. I can’t put numbers on that, but bitcoin is horrendously complex, computationally costly and energy costly across all the aspects of its operation compared to fiat currency electronic transactions. Physical fiat currency might be a different story, but bitcoin doesn’t address the problem of physical money so it’s not really relevant.
xiphias 9y ago
Most of the wasted energy of fiat currencies is the huge amount of waste due to central banking and fractional reserve banking inflation: military spending, artificial house prices, artificially high stock market. If you add the effect of all these inefficient markets up, Bitcoin's cost for security (which is about 8%/year if you add up transaction fees as well) doesn't sound that bad (and the market shows that it's more efficient than the current system).

Nursie 9y ago

Yeah, it's far far less.

brazzy 9y ago

I don't know, but the infrastructure for fiat currencies can achieve efficiency gains through scale. Bitcoin cannot, on a very fundamental level: energy expenditure for mining must at all times be so high that an attack is financially unattractive. So energy usage has to increase linearly with the market cap - and completely independant of how many transactions there are.

jcranmer 9y ago

The Bureau of Printing and Engraving budgeted $14.35 million in FY2017 for "Communication, utilities, and misc. charges." If we assume that 100% of that is electricity costs, and that electricity costs 12¢/kWh, then we get somewhere in the region of 120 million kWh in FY2017 to produce USD. That is 0.1% the annual electricity consumption of Argentina.

yithump 9y ago
Just checked the Treasury 2017 budget which is around 3 billion.

mutatio 9y ago

I think it's only fair to include the cost of governments and armies in these costs, i.e. the value of GBP/USD is in part secured by guns and everything that comes with it.

CJefferson 9y ago
I suspect if you tried using bitcoin in a country with no government or army, it would turn out to not be very useful either.

simonh 9y ago

Most Fiat currency and transactions are electronic, so they cost infinitesimal amounts of energy to ‘coin’ and transactions are just simple addition and subtraction. Conversely, bitcoin cost a relatively vast amount of energy to mine, are extremely bulky to store compared to a fairly compact numeric value, and also can cost a huge amount of energy per transaction since every transaction is highly complex and is replicated across the entire network. I can’t put numbers on that, but bitcoin is horrendously complex, computationally costly and energy costly across all the aspects of its operation compared to fiat currency electronic transactions. Physical fiat currency might be a different story, but bitcoin doesn’t address the problem of physical money so it’s not really relevant.

xiphias 9y ago

Most of the wasted energy of fiat currencies is the huge amount of waste due to central banking and fractional reserve banking inflation: military spending, artificial house prices, artificially high stock market. If you add the effect of all these inefficient markets up, Bitcoin's cost for security (which is about 8%/year if you add up transaction fees as well) doesn't sound that bad (and the market shows that it's more efficient than the current system).