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What a colossally stupid waste of resources. Right now its costing somewhere between ~3500 and ~9000 USD to mine a single bitcoin (on average). To me, we've ess

by ctime 8y ago

What a colossally stupid waste of resources. Right now its costing somewhere between ~3500 and ~9000 USD to mine a single bitcoin (on average). To me, we've essentially engineered a mechanism to capture and trade something that represents the value of squandered electricity. 1) we're generating a ton of co2, further destabilizing the planet ecosystem 2) if we ever _do_ sort out cold fusion energy, crytoholes are going to abuse the shit out of it. I feel like cryptocurrency and perhaps nuclear weapons are a built in 'kill switch' by nature to make sure only useful species ever get off the planet.

maxerickson 8y ago
Squandered electricity has no value, bitcoin are not imbued with any value from the mining process, their value is strictly a function of what someone is willing to pay for them. (I imagine you agree, but clarity is useful)
- bob_theslob646 8y ago
  I think he/she misspoke about what they meant by "squandered electricity." I think what they were referring to is how electricity is allocated or stored. Currently, we cannot do so effectively. It is ironic that Bitcoin is being referred to as a store of value. I would hesitate to say that squandered electricity has very little value but it is all dependent on what your definition of value is, potential or realized.
  - maxerickson 8y ago
    Squandered electricity is like burning cash. It's obvious waste. Hesitate all you want. Note that chemical batteries and pumped storage hydroelectric both store large amounts of electricity very effectively (there lots and lots of deployments that were done by commercial interests seeking to improve the economics of their operations, some going back decades).
    - marvin 8y ago
      Burning cash is a poor analogy, apart from the destruction of the physical paper (which is very cheap). Burning cash causes a small amount of deflation, which increases everyone else's fortune a tiny amount, but does not waste any human effort. A better analogy would be digging a hole and filling it up again. Or maybe better, causing a small amount of destruction to something that other people value.
      - craftyguy 8y ago
        > causing a small amount of destruction to something that other people value. Yea, like the environment.
      - hn0 8y ago
        So if I take a truckload of 100$ bills, a bottle of gin and a can of gasoline, drive into the dessert, out of sight of the authorities, and burn the entire lot, then the next night all retailers will have a vision which tells them to lower their average prices by 0.573%?
        BoiledCabbage 8y ago
        Is this comment sarcastic? I can't tell. The money supply affects prices. It's basic econ.
        vageli 8y ago
        How fast does a change made by a private actor to the money supply propagate? Surely not instantaneously?
        marcosdumay 8y ago
        By the time you fill your truck with those $100 bills, the prices will have already adjusted. If you decide to not burn them, but spend them quickly, the prices will adjust again.
        8y ago
- criddell 8y ago
  Bitcoins are sooooo 2017. I'm thinking about liquidating my hodlings and moving into tulips.
- simias 8y ago
  There is a relation though, although admittedly it's the other way around: the more expensive bitcoins are the most money can be invested into the mining process which correlates strongly with the total amount of energy "wasted" mining it. If BTC was worth $4 the hash rate would probably be a tiny fraction of what it is today.
- jonnydubowsky 8y ago
  Bitcoin is the single largest coordination of encryption in history, and this delivers a store of value which cannot be seized. This has incredible value to those who already utilize offshore banking havens and complex legal coordination mechanisms to protect their wealth. Within a growing number of use cases, bitcoin via the lightning network provides access to financial services to the unbanked who are able to also establish their self soverign identity. To those individuals these edge cases are incredibly valuable.
  - maxerickson 8y ago
    >Bitcoin is the single largest coordination of encryption in history What is that supposed to mean? Blockchain isn't encrypted. It's secured with cryptographic hashes of course. >and this delivers a store of value which cannot be seized. Make sure to watch what happens when/if the US government and China have both decided it is a problem worth much attention.
  - majewsky 8y ago
    > a store of value which cannot be seized Police can absolutely seize the physical artifacts on which your wallet resides. And if that storage is encrypted, consider https://www.xkcd.com/538/ https://www.xkcd.com/538/ - You may not be able to seize the bitcoins, but you can absolutely seize the person owning them.
    - downandout 8y ago
      >Police can absolutely seize the physical artifacts on which your wallet resides. They have to find it first, which can be easy or difficult, depending on how motivated you are to make it difficult. You can quite easily make it more difficult than it is for them to walk into a bank and say “freeze this account”.
      - rufugee 8y ago
        Honestly not sure why you're being downvoted here. Your point seems reasonable and true based on how easy it is to create a paper wallet and make that paper sheet all but unfindable.
sparkie 8y ago
Cryptocurrency is driving both improvements in computational efficiency and in cheaper clean energies. Most of the big mining operations are run on 100% renewable energy sources.
- dmead 8y ago
  This sounds wrong as hell, for anyone reading.
  - billmalarky 8y ago
    Of course it is. Bitcoin is mined via the cheapest possible available source of energy. Generally that isn't renewable (at this time).
    - dmra327 8y ago
      The number of times I've seen mining have a double use leads me to believe that it isn't so clear cut as this statement. It generates heat, and I use that heat in my greenhouses and no longer need a heater. It's not the most efficient way to heat the greenhouses but it's more profitable that using a normal heater.
      - Semirhage 8y ago
        Other than individual-scale mining being an inefficient greenhouse heater, (or just heater in general) what are some of those dual uses you’ve seen so many times? On what scale compared to the bulk of mining activity?
- nwah1 8y ago
  >Cryptocurrency is driving both improvements in computational efficiency and in cheaper clean energies. This is also true of war and those who buy computers to make models of why the Earth is flat. >Most of the big mining operations are run on 100% renewable energy sources. Admit it, you just made this up.
VMG 8y ago
How do you define waste? Is bitcoin mining more wasteful than gold mining?
- friesen 8y ago
  You can make things with gold.
  - mkagenius 8y ago
    You can buy gold with bitcoins. We should be aware of any unstable direct effect caused by bitcoins/gold no matter how useful the end product is.
    - hinkley 8y ago
      But gold has a use other than for trade. If a bitcoin replacement were built on, say, folding proteins, then the information gathered has a benefit that outlasts the value of the currency. Bitcoin only accomplishes two things: burn dinosaurs and slowly erode the usefulness of SHA2. Maybe it improves the situation for ASIC manufacturers? I dunno. But gold improves the situation of wheelbarrow and shovel manufacturers just as much.
  - deleted 8y ago
    [deleted]
  - VMG 8y ago
    Most of it sits in vaults.
- samastur 8y ago
  Does it need to be? Can only one be wasteful? This sounds very close to whataboutism.
- _ph_ 8y ago
  Correct me if I am wrong, but my understanding is, that it is not the mining itself which creates the bitcoin, but an arbitrary challenge set up to earn the bitcoins. So by definition, any energy used is completely wasted.
argo_ 8y ago
If everybody stops using fiat money and switch to bitcoin, the consumption of energy will be the same by miners, but the consumption per transaction will be much lower.
- mikepurvis 8y ago
  Really? Isn't there an upper limit in terms of transactions per time period?
  - Klathmon 8y ago
    As Lightning Network ramps up, and if it is able to get a significant amount of usage, the upper limit in terms of transactions per time period is basically infinite. Without Lightning then yes the amount of transactions-per-time-period is very limited.
  - argo_ 8y ago
    The scalabity problem was partly solved by the introduction of the Lightning Network in the ecosystem https://lightning.network/ https://lightning.network/
- deleted 8y ago
  [deleted]
- thisisit 8y ago
  Consumption per transaction will go up, actually. Bitcoin's value has to appreciate to accommodate everybody using it as a fiat replacement. And once it goes up, people will add even more energy to mine ever valuable bitcoin.
  - hndamien 8y ago
    Nobody mines any more, there are too many people doing it.
  - argo_ 8y ago
    bitcoin's value is not important in the long run because the block reward (number of bitcoins created every 10 minutes) drops every 4 years and eventually go to zero by 2140. More people using bitcoin will definitely attract more energy in the short run, but the energy alocated to mine bitcoin is not going to consume the whole world as some people say. The increase of energy consumption by bitcoin miners will probably look like a sigmoid function in the far future.
rufugee 8y ago
It is a waste of resources. I do agree with you. The good news, I suppose, is that all possible the bitcoins will be eventually mined (https://www.investopedia.com/news/what-happens-bitcoin-after-all-21-million-are-mined/ https://www.investopedia.com/news/what-happens-bitcoin-after...). At that point, it will likely be transaction fees that drive the economy, not mining.
- sadgit 8y ago
  And whos going to create the blocks? It's still mining. However, tx fees might not be enough to pay for security in the network.
  - rufugee 8y ago
    I didn't think of it that way, but you are very correct.
- cslarson 8y ago
  There will still be mining, just no block reward. The "payment" would instead be solely from transaction fees.
  - andruby 8y ago
    If we make the transactions more efficient, lowering the fees, we might remove the huge incentive to mine so much. That would be great.
    - paulmd 8y ago
      This is nonsensical and wrong. Transactions aren't what causes energy consumption in Bitcoin, you can process all the transactions in the whole Bitcoin or Ethereum network on a Raspberry Pi. It's the proof-of-work hashing that makes Bitcoin energy-inefficient, and that's purely a make-work problem, just a way to make mining arbitrarily difficult so the block times hit the expected average. The problem with scaling to larger numbers of transactions is that block sizes become bigger and it takes more disk space and bandwidth to run a node. But, the bigger we make them, the more transaction fees there are, so incentives for miners would actually go up. (very marginally so - block rewards are like 100x as high as the transaction fees, which actually leads some miners to not include transactions at all - trading off a 1% lower payout for faster propagation times and an increased chance of "winning" if they successfully mine a block at nearly the same time as another miner)
conanbatt 8y ago
Wow, bitcoin got so big by now that people believe it can wipe out human race.
- stu432 8y ago
  Easter Island mk2!
aje403 8y ago
...But think of the oppressed nations that will be freed!
Ajedi32 8y ago
It's not a waste. Each miner is expending resources in order to get something valuable. (Bitcoin.) They will continue to do so until the value of the resources they're expending is higher than the value of what they're receiving in return. You don't get to decide what's wasteful and what isn't; each person decides that for themselves. That's just how economics works.
- asfgionio 8y ago
  >That's just how economics works. I find it interesting that people who talk about how things are "simple economics" very rarely understand economics. The economic definition of "efficiency" is not just "everyone doing whatever they want."
  - shitgoose 8y ago
    1. Parent is not talking about "efficiency", but about "waste". 2. Please, provide your economic definition of "waste", which contradicts parent.
  - Ajedi32 8y ago
    I don't think the people claiming that Bitcoin mining as a waste are using the economic definition of "efficiency" either. They just see Bitcoin as worthless, and therefore consider Bitcoin mining to be expending energy for nothing. That's very obviously wrong though, as I've just explained. People mining Bitcoin are doing so out of their own self-interest. If Bitcoin were not valuable enough to overcome the cost of mining it, they wouldn't be mining in the first place. Whether or not there's a more "efficient" way of doing things is irrelevant to this point.
    - root_axis 8y ago
      Bitcoin is fundamentally wasteful because the energy expended to facilitate a transaction is a function of the network's size rather than the number of transactions that need to be processed, it's hard to think of a less efficient system.
AnIdiotOnTheNet 8y ago
I think it is kind of funny, in a tragic sort of way, that just when humanity is coming around to the idea that climate change is real, someone goes and invents a get-rich-quick scheme that involves burning large amounts of electricity.
- gdulli 8y ago
  At the end of the day there's greed and inefficiency in the existing banking system and there's greed and inefficiency in crypto banking systems and there's going to be greed and inefficiency in any subsequent banking system. Turns out that greed and inefficiency were part of us the whole time. The devil we know doesn't seem so bad when you see it in perspective.
  - loceng 8y ago
    Luckily we can design systems that aren't influenced by greed, and are as efficient as technology allows. I'm seeing greed more and more as a battle between short-term vs. long-term thinking, selfish vs. holistic.
    - placebo 8y ago
      I agree with selfish vs. holostic, less so with short-term vs. long-term. You could have someone doing the long con and in my book they are just as greedy as the short con. Better at deferred gratification perhaps, but just as greedy.
      - loceng 8y ago
        Fair point. Love the username.
  - paulgb 8y ago
    There's no comparison here. The world financial system may have inefficiencies, but competition will sort them out over time. In POW crypto-currencies, efficiency improvements will be canceled out as quickly as the next difficulty adjustment. In POW, by design, competition leads to more inefficiency, not less.
jchrisa 8y ago
By definition it can only get worse or fail. The amount of energy spent defending the blockchain must be proportionately more than the amount of value stored on the blockchain. So if we organized the entire human economy on bitcoin, we'd spend 51% of our total global economy on energy to burn running the currency.
- esrauch 8y ago
  Isn't it just the cost to mint a new coin that has to be proportional? As in, it can cost more than a cent to make a penny but each penny is used in more than one transaction. I understand that the transaction cost is also quite high with Bitcoin but that isn't intrinsically necessary (like the cost to mint is).
- sowbug 8y ago
  You're going to need to show your math for that one. It's somewhat similar to the argument that you can't put a value on a human life, therefore [insert position] is unassailable.
awt 8y ago
If it isn't too obvious to bring up, is it possible that we don't necessarily know for certain that using energy to mine Bitcoin is a waste? For example some may have considered manufacturing computers a waste of energy, but the productivity gains of that use of energy has far surpassed the cost of manufacturing computers.
- root_axis 8y ago
  The difference is that bitcoin is of dubious value in terms of productivity gains.
  - awt 8y ago
    As were computers. And the internet. It is not a given in any way that x amount of energy maps to productivity level y.
    - root_axis 8y ago
      >As were computers. That's just completely incorrect and demonstrates an ignorance of the history of computers. >And the internet. Once again, this statement demonstrates an ignorance of history. The early internet was a monumental research and engineering effort funded by the U.S. military because its utility was completely apparent before it was even built.
      - awt 8y ago
        You might want to re-consider your claim of my ignorance of history and maybe think if I might have a point, even though it opposes your opinion. Nevertheless, certainly you're not claiming the USG knew that expending X resources on the early internet would result in Google? [edit] For those reading this who are perhaps a bit more open minded, it is not clear what the future productivity gains will be from moving capital allocation out of the hands of central banks into the hands of Bitcoin hodlers. To beat a dead horse, If 51% of energy is devoted to securing btc, but capital is allocated in a way such that productivity increases x%, where x offsets mining/transaction costs, what's the problem?
calchris42 8y ago
Exactly this. Bitcoin as it stands is the definition of inefficient. Consuming vast amounts of energy for no purpose. Yes, there are ever-changing explanatiins for Bitcoin's usefulness. But there is no fundamental reason why massive energy consumption is required to store digital value, or to make a transaction across borders. As it stands, Bitcoin is actively bad for the world. We need more energy efficiency, not get rich schemes combined with electric heating for empty warehouses. There are likely good uses that will come from crypto tech, but this doesn't seem to be it. (And I'm not knowledgeable enough to guess what they will be)
wellboy 8y ago
This doesn't matter, PoW (achieving consensus through mining power) is becoming obsolete. Ethereum is moving to a PoW PoS hybrid (Casper) which uses a lot less energy and so are most of the new cryptocurrencies. It's possible that bitcoin will soon, too.
- paulmd 8y ago
  I'm not aware of any cryptocurrency that has successfully implemented a decentralized PoS system. There have been a few that have "master keys" to sign blocks, however.
skybrian 8y ago
If it's any comfort, electricity isn't all the same. It's more valuable if generated at the right place at the right time. At some point, after hardware improvements plateau and competition heats up even more, this turns into a competition to find the cheapest electricity. In a ideal electricity market, this should be surplus electricity that's not used for any other purpose yet (wind farm not yet connected to the grid). Or perhaps generating bitcoin as a byproduct of electric heating? Any better use for electricity should result in higher prices that make Bitcoin mining unprofitable. But before that happens, the electricity market would have to get a lot more rational, and externalities need to be fixed. For example, carbon pricing would ensure that bitcoin mining only uses clean power.
onecooldev24 8y ago
Have you been sleeping your entire life. Why can't you bring the same points up for gold. Civilizations have been destroyed for gold, let alone electricity.
- rspeer 8y ago
  So you're on board with destruction as long as you get to do it your way? This is going to be a radical idea, so bear with me here. What if instead of destroying civilizations, we didn't destroy civilizations?
  - onecooldev24 8y ago
    So according to you gold should be valued at zero?
btcindivist 8y ago
Ton of CO2 is generated by christmas lights. It trumps BTC or is very close. Yes, producing a lot of cheap energy is an opportunity to use more of it. There's a bunch of stupid things people do with energy and increase their CO2 impact. Bitcoin is just one. I'm pretty sure abstaining from flying planes throughout all your life is more CO2 not emitted than building a small mining operation and mining for life. I'm pretty sure if we summed up the CO2 impact of increased dietary requirements of athletes and body builders and similar would get to huge numbers.
- craftyguy 8y ago
  > Ton of CO2 is generated by christmas lights. It trumps BTC or is very close. So once you have a dumpster fire, it's OK to have infinitely more dumpster fires?
  - btcindivist 8y ago
    The rest of my comment explains that worrying about BTC CO2 impact is useless. People do a bunch of stuff that has magnitudes bigger CO2 footprint. Are we profiling CO2 usage? If so, what, we want to optimize the tiny footprints instead of the biggest? BTC mining, just like Christmas lights, can work with solar. Then we are going to complain about electricity wasted.
dlwdlw 8y ago
Burning of "real" value for something of symbolic value that often locks in value is fairly common. Designer watches and bags and 500$ shirts basically create a flame that says "look at meeeeee" Price to extract gold and value of gold is also an interesting dynamic. Fiat tokens also seem to have value built in via trust via the burning of value to create organizational systems to reduce friction. Expensive apparel also reduces certain types of social friction.

by ctime 8y ago

maxerickson 8y ago

Squandered electricity has no value, bitcoin are not imbued with any value from the mining process, their value is strictly a function of what someone is willing to pay for them. (I imagine you agree, but clarity is useful)

bob_theslob646 8y ago
I think he/she misspoke about what they meant by "squandered electricity." I think what they were referring to is how electricity is allocated or stored. Currently, we cannot do so effectively. It is ironic that Bitcoin is being referred to as a store of value. I would hesitate to say that squandered electricity has very little value but it is all dependent on what your definition of value is, potential or realized.
- maxerickson 8y ago
  Squandered electricity is like burning cash. It's obvious waste. Hesitate all you want. Note that chemical batteries and pumped storage hydroelectric both store large amounts of electricity very effectively (there lots and lots of deployments that were done by commercial interests seeking to improve the economics of their operations, some going back decades).
  - marvin 8y ago
    Burning cash is a poor analogy, apart from the destruction of the physical paper (which is very cheap). Burning cash causes a small amount of deflation, which increases everyone else's fortune a tiny amount, but does not waste any human effort. A better analogy would be digging a hole and filling it up again. Or maybe better, causing a small amount of destruction to something that other people value.
    - craftyguy 8y ago
      > causing a small amount of destruction to something that other people value. Yea, like the environment.
    - hn0 8y ago
      So if I take a truckload of 100$ bills, a bottle of gin and a can of gasoline, drive into the dessert, out of sight of the authorities, and burn the entire lot, then the next night all retailers will have a vision which tells them to lower their average prices by 0.573%?
      - BoiledCabbage 8y ago
        Is this comment sarcastic? I can't tell. The money supply affects prices. It's basic econ.
        vageli 8y ago
        How fast does a change made by a private actor to the money supply propagate? Surely not instantaneously?
        marcosdumay 8y ago
        By the time you fill your truck with those $100 bills, the prices will have already adjusted. If you decide to not burn them, but spend them quickly, the prices will adjust again.
      - 8y ago
criddell 8y ago
Bitcoins are sooooo 2017. I'm thinking about liquidating my hodlings and moving into tulips.
simias 8y ago
There is a relation though, although admittedly it's the other way around: the more expensive bitcoins are the most money can be invested into the mining process which correlates strongly with the total amount of energy "wasted" mining it. If BTC was worth $4 the hash rate would probably be a tiny fraction of what it is today.
jonnydubowsky 8y ago
Bitcoin is the single largest coordination of encryption in history, and this delivers a store of value which cannot be seized. This has incredible value to those who already utilize offshore banking havens and complex legal coordination mechanisms to protect their wealth. Within a growing number of use cases, bitcoin via the lightning network provides access to financial services to the unbanked who are able to also establish their self soverign identity. To those individuals these edge cases are incredibly valuable.
- maxerickson 8y ago
  >Bitcoin is the single largest coordination of encryption in history What is that supposed to mean? Blockchain isn't encrypted. It's secured with cryptographic hashes of course. >and this delivers a store of value which cannot be seized. Make sure to watch what happens when/if the US government and China have both decided it is a problem worth much attention.
- majewsky 8y ago
  > a store of value which cannot be seized Police can absolutely seize the physical artifacts on which your wallet resides. And if that storage is encrypted, consider https://www.xkcd.com/538/ https://www.xkcd.com/538/ - You may not be able to seize the bitcoins, but you can absolutely seize the person owning them.
  - downandout 8y ago
    >Police can absolutely seize the physical artifacts on which your wallet resides. They have to find it first, which can be easy or difficult, depending on how motivated you are to make it difficult. You can quite easily make it more difficult than it is for them to walk into a bank and say “freeze this account”.
    - rufugee 8y ago
      Honestly not sure why you're being downvoted here. Your point seems reasonable and true based on how easy it is to create a paper wallet and make that paper sheet all but unfindable.

sparkie 8y ago

Cryptocurrency is driving both improvements in computational efficiency and in cheaper clean energies. Most of the big mining operations are run on 100% renewable energy sources.

dmead 8y ago
This sounds wrong as hell, for anyone reading.
- billmalarky 8y ago
  Of course it is. Bitcoin is mined via the cheapest possible available source of energy. Generally that isn't renewable (at this time).
  - dmra327 8y ago
    The number of times I've seen mining have a double use leads me to believe that it isn't so clear cut as this statement. It generates heat, and I use that heat in my greenhouses and no longer need a heater. It's not the most efficient way to heat the greenhouses but it's more profitable that using a normal heater.
    - Semirhage 8y ago
      Other than individual-scale mining being an inefficient greenhouse heater, (or just heater in general) what are some of those dual uses you’ve seen so many times? On what scale compared to the bulk of mining activity?
nwah1 8y ago
>Cryptocurrency is driving both improvements in computational efficiency and in cheaper clean energies. This is also true of war and those who buy computers to make models of why the Earth is flat. >Most of the big mining operations are run on 100% renewable energy sources. Admit it, you just made this up.

VMG 8y ago

How do you define waste? Is bitcoin mining more wasteful than gold mining?

friesen 8y ago
You can make things with gold.
- mkagenius 8y ago
  You can buy gold with bitcoins. We should be aware of any unstable direct effect caused by bitcoins/gold no matter how useful the end product is.
  - hinkley 8y ago
    But gold has a use other than for trade. If a bitcoin replacement were built on, say, folding proteins, then the information gathered has a benefit that outlasts the value of the currency. Bitcoin only accomplishes two things: burn dinosaurs and slowly erode the usefulness of SHA2. Maybe it improves the situation for ASIC manufacturers? I dunno. But gold improves the situation of wheelbarrow and shovel manufacturers just as much.
- deleted 8y ago
  [deleted]
- VMG 8y ago
  Most of it sits in vaults.
samastur 8y ago
Does it need to be? Can only one be wasteful? This sounds very close to whataboutism.
_ph_ 8y ago
Correct me if I am wrong, but my understanding is, that it is not the mining itself which creates the bitcoin, but an arbitrary challenge set up to earn the bitcoins. So by definition, any energy used is completely wasted.

argo_ 8y ago

If everybody stops using fiat money and switch to bitcoin, the consumption of energy will be the same by miners, but the consumption per transaction will be much lower.

mikepurvis 8y ago
Really? Isn't there an upper limit in terms of transactions per time period?
- Klathmon 8y ago
  As Lightning Network ramps up, and if it is able to get a significant amount of usage, the upper limit in terms of transactions per time period is basically infinite. Without Lightning then yes the amount of transactions-per-time-period is very limited.
- argo_ 8y ago
  The scalabity problem was partly solved by the introduction of the Lightning Network in the ecosystem https://lightning.network/ https://lightning.network/
deleted 8y ago
[deleted]
thisisit 8y ago
Consumption per transaction will go up, actually. Bitcoin's value has to appreciate to accommodate everybody using it as a fiat replacement. And once it goes up, people will add even more energy to mine ever valuable bitcoin.
- hndamien 8y ago
  Nobody mines any more, there are too many people doing it.
- argo_ 8y ago
  bitcoin's value is not important in the long run because the block reward (number of bitcoins created every 10 minutes) drops every 4 years and eventually go to zero by 2140. More people using bitcoin will definitely attract more energy in the short run, but the energy alocated to mine bitcoin is not going to consume the whole world as some people say. The increase of energy consumption by bitcoin miners will probably look like a sigmoid function in the far future.

rufugee 8y ago

It is a waste of resources. I do agree with you. The good news, I suppose, is that all possible the bitcoins will be eventually mined (https://www.investopedia.com/news/what-happens-bitcoin-after-all-21-million-are-mined/ https://www.investopedia.com/news/what-happens-bitcoin-after...). At that point, it will likely be transaction fees that drive the economy, not mining.

sadgit 8y ago
And whos going to create the blocks? It's still mining. However, tx fees might not be enough to pay for security in the network.
- rufugee 8y ago
  I didn't think of it that way, but you are very correct.
cslarson 8y ago
There will still be mining, just no block reward. The "payment" would instead be solely from transaction fees.
- andruby 8y ago
  If we make the transactions more efficient, lowering the fees, we might remove the huge incentive to mine so much. That would be great.
  - paulmd 8y ago
    This is nonsensical and wrong. Transactions aren't what causes energy consumption in Bitcoin, you can process all the transactions in the whole Bitcoin or Ethereum network on a Raspberry Pi. It's the proof-of-work hashing that makes Bitcoin energy-inefficient, and that's purely a make-work problem, just a way to make mining arbitrarily difficult so the block times hit the expected average. The problem with scaling to larger numbers of transactions is that block sizes become bigger and it takes more disk space and bandwidth to run a node. But, the bigger we make them, the more transaction fees there are, so incentives for miners would actually go up. (very marginally so - block rewards are like 100x as high as the transaction fees, which actually leads some miners to not include transactions at all - trading off a 1% lower payout for faster propagation times and an increased chance of "winning" if they successfully mine a block at nearly the same time as another miner)

conanbatt 8y ago

Wow, bitcoin got so big by now that people believe it can wipe out human race.

stu432 8y ago
Easter Island mk2!

aje403 8y ago

...But think of the oppressed nations that will be freed!

Ajedi32 8y ago

It's not a waste. Each miner is expending resources in order to get something valuable. (Bitcoin.) They will continue to do so until the value of the resources they're expending is higher than the value of what they're receiving in return. You don't get to decide what's wasteful and what isn't; each person decides that for themselves. That's just how economics works.

asfgionio 8y ago
>That's just how economics works. I find it interesting that people who talk about how things are "simple economics" very rarely understand economics. The economic definition of "efficiency" is not just "everyone doing whatever they want."
- shitgoose 8y ago
  1. Parent is not talking about "efficiency", but about "waste". 2. Please, provide your economic definition of "waste", which contradicts parent.
- Ajedi32 8y ago
  I don't think the people claiming that Bitcoin mining as a waste are using the economic definition of "efficiency" either. They just see Bitcoin as worthless, and therefore consider Bitcoin mining to be expending energy for nothing. That's very obviously wrong though, as I've just explained. People mining Bitcoin are doing so out of their own self-interest. If Bitcoin were not valuable enough to overcome the cost of mining it, they wouldn't be mining in the first place. Whether or not there's a more "efficient" way of doing things is irrelevant to this point.
  - root_axis 8y ago
    Bitcoin is fundamentally wasteful because the energy expended to facilitate a transaction is a function of the network's size rather than the number of transactions that need to be processed, it's hard to think of a less efficient system.

AnIdiotOnTheNet 8y ago

I think it is kind of funny, in a tragic sort of way, that just when humanity is coming around to the idea that climate change is real, someone goes and invents a get-rich-quick scheme that involves burning large amounts of electricity.

gdulli 8y ago
At the end of the day there's greed and inefficiency in the existing banking system and there's greed and inefficiency in crypto banking systems and there's going to be greed and inefficiency in any subsequent banking system. Turns out that greed and inefficiency were part of us the whole time. The devil we know doesn't seem so bad when you see it in perspective.
- loceng 8y ago
  Luckily we can design systems that aren't influenced by greed, and are as efficient as technology allows. I'm seeing greed more and more as a battle between short-term vs. long-term thinking, selfish vs. holistic.
  - placebo 8y ago
    I agree with selfish vs. holostic, less so with short-term vs. long-term. You could have someone doing the long con and in my book they are just as greedy as the short con. Better at deferred gratification perhaps, but just as greedy.
    - loceng 8y ago
      Fair point. Love the username.
- paulgb 8y ago
  There's no comparison here. The world financial system may have inefficiencies, but competition will sort them out over time. In POW crypto-currencies, efficiency improvements will be canceled out as quickly as the next difficulty adjustment. In POW, by design, competition leads to more inefficiency, not less.

jchrisa 8y ago

By definition it can only get worse or fail. The amount of energy spent defending the blockchain must be proportionately more than the amount of value stored on the blockchain. So if we organized the entire human economy on bitcoin, we'd spend 51% of our total global economy on energy to burn running the currency.

esrauch 8y ago
Isn't it just the cost to mint a new coin that has to be proportional? As in, it can cost more than a cent to make a penny but each penny is used in more than one transaction. I understand that the transaction cost is also quite high with Bitcoin but that isn't intrinsically necessary (like the cost to mint is).
sowbug 8y ago
You're going to need to show your math for that one. It's somewhat similar to the argument that you can't put a value on a human life, therefore [insert position] is unassailable.

awt 8y ago

If it isn't too obvious to bring up, is it possible that we don't necessarily know for certain that using energy to mine Bitcoin is a waste? For example some may have considered manufacturing computers a waste of energy, but the productivity gains of that use of energy has far surpassed the cost of manufacturing computers.

root_axis 8y ago
The difference is that bitcoin is of dubious value in terms of productivity gains.
- awt 8y ago
  As were computers. And the internet. It is not a given in any way that x amount of energy maps to productivity level y.
  - root_axis 8y ago
    >As were computers. That's just completely incorrect and demonstrates an ignorance of the history of computers. >And the internet. Once again, this statement demonstrates an ignorance of history. The early internet was a monumental research and engineering effort funded by the U.S. military because its utility was completely apparent before it was even built.
    - awt 8y ago
      You might want to re-consider your claim of my ignorance of history and maybe think if I might have a point, even though it opposes your opinion. Nevertheless, certainly you're not claiming the USG knew that expending X resources on the early internet would result in Google? [edit] For those reading this who are perhaps a bit more open minded, it is not clear what the future productivity gains will be from moving capital allocation out of the hands of central banks into the hands of Bitcoin hodlers. To beat a dead horse, If 51% of energy is devoted to securing btc, but capital is allocated in a way such that productivity increases x%, where x offsets mining/transaction costs, what's the problem?

calchris42 8y ago

Exactly this. Bitcoin as it stands is the definition of inefficient. Consuming vast amounts of energy for no purpose. Yes, there are ever-changing explanatiins for Bitcoin's usefulness. But there is no fundamental reason why massive energy consumption is required to store digital value, or to make a transaction across borders. As it stands, Bitcoin is actively bad for the world. We need more energy efficiency, not get rich schemes combined with electric heating for empty warehouses. There are likely good uses that will come from crypto tech, but this doesn't seem to be it. (And I'm not knowledgeable enough to guess what they will be)

wellboy 8y ago

This doesn't matter, PoW (achieving consensus through mining power) is becoming obsolete. Ethereum is moving to a PoW PoS hybrid (Casper) which uses a lot less energy and so are most of the new cryptocurrencies. It's possible that bitcoin will soon, too.

paulmd 8y ago
I'm not aware of any cryptocurrency that has successfully implemented a decentralized PoS system. There have been a few that have "master keys" to sign blocks, however.

skybrian 8y ago

If it's any comfort, electricity isn't all the same. It's more valuable if generated at the right place at the right time. At some point, after hardware improvements plateau and competition heats up even more, this turns into a competition to find the cheapest electricity. In a ideal electricity market, this should be surplus electricity that's not used for any other purpose yet (wind farm not yet connected to the grid). Or perhaps generating bitcoin as a byproduct of electric heating? Any better use for electricity should result in higher prices that make Bitcoin mining unprofitable. But before that happens, the electricity market would have to get a lot more rational, and externalities need to be fixed. For example, carbon pricing would ensure that bitcoin mining only uses clean power.

onecooldev24 8y ago

Have you been sleeping your entire life. Why can't you bring the same points up for gold. Civilizations have been destroyed for gold, let alone electricity.

rspeer 8y ago
So you're on board with destruction as long as you get to do it your way? This is going to be a radical idea, so bear with me here. What if instead of destroying civilizations, we didn't destroy civilizations?
- onecooldev24 8y ago
  So according to you gold should be valued at zero?

btcindivist 8y ago

Ton of CO2 is generated by christmas lights. It trumps BTC or is very close. Yes, producing a lot of cheap energy is an opportunity to use more of it. There's a bunch of stupid things people do with energy and increase their CO2 impact. Bitcoin is just one. I'm pretty sure abstaining from flying planes throughout all your life is more CO2 not emitted than building a small mining operation and mining for life. I'm pretty sure if we summed up the CO2 impact of increased dietary requirements of athletes and body builders and similar would get to huge numbers.

craftyguy 8y ago
> Ton of CO2 is generated by christmas lights. It trumps BTC or is very close. So once you have a dumpster fire, it's OK to have infinitely more dumpster fires?
- btcindivist 8y ago
  The rest of my comment explains that worrying about BTC CO2 impact is useless. People do a bunch of stuff that has magnitudes bigger CO2 footprint. Are we profiling CO2 usage? If so, what, we want to optimize the tiny footprints instead of the biggest? BTC mining, just like Christmas lights, can work with solar. Then we are going to complain about electricity wasted.

dlwdlw 8y ago

Burning of "real" value for something of symbolic value that often locks in value is fairly common. Designer watches and bags and 500$ shirts basically create a flame that says "look at meeeeee" Price to extract gold and value of gold is also an interesting dynamic. Fiat tokens also seem to have value built in via trust via the burning of value to create organizational systems to reduce friction. Expensive apparel also reduces certain types of social friction.