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New study quantifies Bitcoin’s ludicrous energy consumption

77 points by fabian2k 8y ago

brockers 8y ago
Why the obsession about energy consumption from mining bitcoin? It is because many people still consider it imaginary or non-productive? It is because, unlike many other markets, it is fairly straightforward to find upper and lower bounds for consumption?
- 1337biz 8y ago
  Because it brings people together. Crypto bashers meets Sustainability preachers. Just connect two popular sub-trends and you are golden!
  - SlowRobotAhead 8y ago
    I have no real opinion on crypto except that like everyone else I’m mad I didn’t buy bitcoin st $5, and am far from an “environmental preacher” - I only enjoy the irony that some people will go from posting about climate change and go right over checking their bitcoin value.
- granshaw 8y ago
  You’re being down voted, but this was a useful comment for me. Made me realize that there’s plenty of energy being spent to mine and handle other commodities too, e.g. gold.
  - Cthulhu_ 8y ago
    Gold is generally a one-time investment though - you could smelt it into a bar at a high initial energy cost, but after that, transferring it is free. As opposed to BTC which apparently costs 300 KWh per transaction.
    - jacquesm 8y ago
      > you could smelt it into a bar at a high initial energy cost, but after that, transferring it is free. How is it free after the initial smelting to transfer? Moving physical gold around is very expensive.
      - granshaw 8y ago
        Exactly. Plus you need to factor in the exploration, mining, and extraction costs too
- maxerickson 8y ago
  I think people looking into it doesn't necessarily rise to the level of obsession. The incentive here was likely to publish something (rather than an emotional attachment to some aspect of bitcoin). That Bitcoin are probably little more than coal-fired Beanie Babies likely does contribute to message board attention.
  - mkirklions 8y ago
    Beanie Babies can be reverse engineered and replicated. Bitcoin cannot generate copycat coins(on the BTC blockchain). They are rare numbers.
    - SlowRobotAhead 8y ago
      That’s true. But like beanie babies they only have value people want to believe. Bitcoin is not fiat, it’s a commodity. It’s not decentralized at all and there are a handful of people thus could destroy it at any time. Sounds a lot like beanie babies the more I think about it.
      - mkirklions 8y ago
        >It’s not decentralized at all and there are a handful of people thus could destroy it at any time. Uh you might want to check that.
        haikuginger 8y ago
        The three largest pools combined hold over 50% of the total hashing power, and all are based in China.
        mkirklions 8y ago
        Thats the mining pool though. You can join those pools from anywhere.
        SlowRobotAhead 8y ago
- danmg 8y ago
  Well, if this sort of system is going to be the future of finance, isn't the environmental impact of it something we should consider? Especially, when we hear about old inefficient power pants coming back on-line to fulfill the new demand created by cryptocurrencies. Edit: Don't the mining costs basically exponentially increase as the supply of bitcoin runs out as it's an exponential decay? Being bounded by an exponential function isn't a good sign.
  - sf_rob 8y ago
    Minting of new coins is an exponential decay (hence the mining metaphor, gold becomes rarer to find as mining continues). There's also transaction fees which are based on supply/demand for blockchain operations.
  - TangoTrotFox 8y ago
    In response to your edit, no. There is no set cost to mine a bitcoin. Energy is expended in trying to solve the problems the generate bitcoins. Once bitcoins run out, this is still true as instead of directly creating new bitcoins, miners will still be rewarded with the transaction fees connected to whatever block they main. The difficulty of solving a problem to generate coins is dynamically and automatically adjusted such that it takes about 10 minutes. What this means is that if you had a total of 800 nuclear reactors dedicated to exclusively powering ASIC systems to mine Bitcoins it'd take, on average, just as long as it would if your total electricity consumption was the equivalent of one guy running a low power laptop using a hand crank or bike generator. So all the electricity consumption represents is demand. As demand increases for bitcoin, so does this price. When the price goes up this means you can afford to pay more for electricity and still show a profit. When demand goes down for bitcoin you need to pay less and less for electricity to maintain profitability. What will happen when no new coins are being generated is that the reward for each block mined will decrease. This will mean you receive less money for mining a block and thus can not afford to pay as much for energy and remain profitable. The net effect being that we'll see a decline in energy usage as miners running on thinner margins are pushed out of profitability. The dynamic balancing is actually quite a clever design.
  - toomuchgov 8y ago
- epmaybe 8y ago
  I think it's interesting because it allows you to quantify the impact of Bitcoin mining on energy consumption. What would we do with our resources if this was not a viable way to produce wealth? With the continuing decline of natural resources in the world, it's worth seeing what we as humans do with these resources from an academic perspective. Also, I imagine a lot of people do indeed think that Bitcoin is imaginary or nonproductive. Arstechnica makes money off of readers viewing their articles, so content that validates an opinion or strikes controversy generally does well.
- freeloop10 8y ago
  It's quite a gimmick imo. The amount spent has no basis in what is needed, but simply chosen by multiplication of the guesswork of a person several years ago by the chaotic swings of the market. It's also quite inefficient and even if it was chosen with some rationale basis, the idea of burning energy for years in the hope of providing a high enough bar to prevent a single tsunami of effort over the a brief period of time, less than a few hours and only required to match it, is one of the dumbest security ideas I've ever heard. I'm not against cryptocurrency, not do I think it will fail in concept, but I very much hope that PoS proves viable and will succeed this utter waste.
- tgb 8y ago
  No, it's not because people consider it imaginary or non-productive: it's because they consider it insufficiently productive for what it costs the globe and that the rewards are obviously localized while the costs are global.
curun1r 8y ago
> So de Vries calculated how much electricity bitcoin miners would have to consume for bitcoin mining to no longer be profitable. He assumed that electricity prices make up 60 percent of the cost of mining and that electricity costs an average of 5 cents per KWh. That yielded energy consumption of 7.7GW, which serves as an upper bound of the bitcoin network's energy consumption That's not the upper bound, since there a monetization strategies that end up using other people's hardware and electricity. Websites that run JavaScript miners are ridiculously inefficient but also don't have to meet his profitability formula because the electricity is paid by someone different than the person/entity that gets the Bitcoin.
mrb 8y ago
I provided this statement to some journalists who contacted me to get another viewpoint on Alex de Vries's paper: His findings are not completely accurate, but also not completely wrong either. My own formal well-documented estimate is that Bitcoin used 0.09% of the world's electricity as of January 11th, 2018 (http://blog.zorinaq.com/bitcoin-electricity-consumption/ http://blog.zorinaq.com/bitcoin-electricity-consumption/). After 4 months of growth I estimate we are around 0.15-0.20% today. Therefore reaching 0.50% by the end of 2018 is plausible; not likely but plausible. That said, overall I think Alex de Vries's figures are rather inflated because he makes two errors. Firstly, his model assumes that manufacturers sell at cost and make zero profits, which allows miners to spend more on electricity. In reality we've seen Bitmain, the largest manufacturer, make billions of dollars over the last few years. No one expects them to make zero profits by the end of 2018. Secondly, de Vries makes the mistake of assuming that all cryptocurrency mining chips produced by TSMC on behalf of Bitmain end up in Bitcoin mining machines. In reality many chips are fabricated for cryptocurrencies other than Bitcoin. This altcoin sector is rapidly growing. It wouldn't be unreasonable to assume that Bitcoin mining machines will represent less than half of Bitmain's sales by the end of 2018. (This is a copy of my comment from yesterday's thread on the same topic https://news.ycombinator.com/item?id=17084253 https://news.ycombinator.com/item?id=17084253)
- brianberns 8y ago
  > In reality many chips are fabricated for cryptocurrencies other than Bitcoin. OK, so replace "Bitcoin" with "Bitcoin and other cryptocurrencies" in the title. The point remains the same: blockchain-based technologies are extremely inefficient with energy. That's the nature of "proof of work" algorithms.
  - VMG 8y ago
    Which algorithms are more efficient at doing what Bitcoin does?
    - kennywinker 8y ago
      You’re thinking efficient compared to another hashing algorithm. I think op is saying efficient compared to the value it creates. I.e. cryptocurrency is useful for some things, but it’s burning a LOT of energy to do it.
SlowRobotAhead 8y ago
Serious question... has there been a bigger waste of electricity in any commodity trading or in any internet trend? A the cost of a single bitcoin transaction (~300kW) could power a use home for more than a week [1]. How is this even remotely defensible by people who participates in coins and also make posts about climate change? Seems very hypocritical to me, because I’m pretty sure it’s not those “filthy denier types” that are wrapped up in the coin game. [1] https://www.eia.gov/tools/faqs/faq.php?id=97&t=3 https://www.eia.gov/tools/faqs/faq.php?id=97&t=3
- mbunch 8y ago
  That's part of the reason why Bitcoin is seen as V1 tech that's being moved away from and other cryptocurrencies using variants of Proof of Stake (which consumes orders of magnitude less electricity but has other potential pitfalls) instead of Proof of Work have grown more popular. Ethereum, generally considered the #2 crypto, is planning to make the switch from PoW to PoS, for instance. There are some people who still support large-scale adoption of PoW coins, though, and you are right that they're generally willfully ignorant of the environmental concerns. The only case I can see for those is something that aims for true trustlessness and anonymity like Monero, since most PoS methods make compromises around that. EDIT: I stand corrected. Ethereum is still laying the groundwork for a switch from PoW to PoS and hasn't yet transitioned.
  - redbeard0x0a 8y ago
    Ethereum is still PoW, they released an initial PoS that runs along side the PoW, "verifying" every 100 transactions or so. The goal is to move entirely to PoS, but things take time.
    - kimsk112 8y ago
      Why has it taken so long? I thought this would happen in 2017.
      - lostmsu 8y ago
kenpomeroy 8y ago
There's nothing inherently bad about energy consumption. The raw amount of energy consumed is a useless metric without determining how much of this energy is derived from clean/renewable sources.
- Cthulhu_ 8y ago
  There is an argument that could be made that if that power was from a renewable source, it could instead have been used to replace non-renewable power output - all of bitcoin's power usage combined is several coal burning power plants, I'm sure. Second there's the fact that most of that power is changed into heat. I don't think the heat emitted from anything using electricity is significant enough to have an impact on climate (outside of the cities at least), but still.
- finaliteration 8y ago
  Only about 10% of energy consumption in the US comes from renewable sources... https://www.eia.gov/tools/faqs/faq.php?id=92&t=4 https://www.eia.gov/tools/faqs/faq.php?id=92&t=4
  - kenpomeroy 8y ago
    Not sure why this is relevant unless you think 100% of bitcoin mining takes place in the US.
- Majestic121 8y ago
  You're right that's there's nothing inherently bad about energy consumption. I would gladly use 7.7 gigawatts and more if it meant developing a cure for cancer, or exploring Mars, or anything useful really. The crux of the issue is that Bitcoin is mostly used as a speculative asset, i.e. something with little actual usefulness except for traders basically. Using 0.5% of the world's total energy consumption for this is an issue, imho.
  - deleted 8y ago
    [deleted]
isoprophlex 8y ago
Three hundred kWh per transaction!!! That keeps my household running for 40 days! Humanity has a pretty screwed up way of getting its global priorities right.
- justherefortart 8y ago
  What do you think human's priorities should be? Just curious. I'm not a scam-coin fan at all.
  - vertexFarm 8y ago
    I think that securing a safe and prosperous future should be an obvious one, and one that we're royally screwing up with the amount of energy we spend. If climate change is even a tenth as bad as it is projected to be this will have been a terribly selfish era of history. We're essentially devouring our young.
    - cryptoz 8y ago
      Okay, but that came as a problem long before Bitcoin arrived on the scene. In fact, bitcoin itself is a response to an overreaching, overextended global system of control led by banks and other corporations - the same ones who have ravaged the Earth and lied about it, causing the runaway global climate change we have now. Yes, bitcoin uses way too much energy. But if we had a more fair system in the first place - that is, distribution of resources - it is unlikely anyone would have resorted to inventing bitcoin in the first place.
      - vertexFarm 8y ago
        Well you can't change it now. There's no use crying over spilt milk. I don't see the logic in creating this wasteful system in response to an pre-existing wasteful system, especially with how dubious it is that cryptocurrency is beneficial to mankind. Like okay Alex Jones, we got a global system of control led by globally globalist banks. I don't think bitcoin is going to change that. Call me crazy, but that seems a bit grandiose.
hart_russell 8y ago
This is why proof of stake is so needed
anonymfus 8y ago
Please somebody convert it to human deaths, for example using data from this paper about death toll of energy generation: https://sci-hub.tw/https://doi.org/10.1016/S0140-6736(07)61253-7 https://sci-hub.tw/https://doi.org/10.1016/S0140-6736(07)612...
xutopia 8y ago
It's a currency that is backed by crypto and is printed via a kWh backing. Better than gold and government if you ask me.
onecooldev24 8y ago
Why weren't these points raised for gold & diamond mining through out human civilization. Africans have been killed ruthlessly for diamonds and our so called "smart users" of HN can't seem to see eye to eye on these points. Cause they missed out on BTC! and now they hate it.
itchyjunk 8y ago
If bitcoin was not using said electricity (if there was no demand), would the power plants be producing that electricity in the first place? You might say no and hence we burn less fossil fuel. But for renewable sources like hydro, you just produce less when the demand is less. (Based on what I read on wiki [0]). Should we really say `don't try out new ideas because it's wasting precious electricity`? Maybe we should. But I feel like humans have enough technology under their belt that enough electricity generation isn't a dire situation. So are people worried about fossil fuel? If so maybe we should address that. If not, are we saying we need to quota electricity and decide if new techs shouldn't get a shot (if they are somewhat 'wasteful' and we don't know how useful it is)? Side not, I wonder how much electricity gaming system uses. [0] https://en.wikipedia.org/wiki/Hydroelectricity#Flexibility https://en.wikipedia.org/wiki/Hydroelectricity#Flexibility
- Guvante 8y ago
  > But I feel like humans have enough technology under their belt that enough electricity generation isn't a dire situation. It isn't a direct situation it is just wasteful... > Side not, I wonder how much electricity gaming system uses. A high end system uses around 750W and assuming 3 hours of game play a day is around 800kWh a year, so enough for 2.5 Bitcoin transactions. Besides honest question: is there anything about Bitcoin that is experimental anymore? Seems most research switched to different coins so defending Bitcoin to defend research is odd.
birracerveza 8y ago
Disclaimer: I have invested in Bitcoin, and I think that PoW is outdated. However, I also think that people that keep attacking this aspect are better off tackling other issues. As everyone else before me said, the banks are wasting a much greater amount of electricity in order to operate. I am not talking simply about gas, lights et al. (although all banks where I live keep lights on 24/7, and in some cases even air conditioners), but also about the massive, MASSIVE amount of legacy infrastructure that keep them going. I'm talking software and hardware that are several decades old, stacked on top of each other with little to no optimization in order to support legacy features and to avoid breaking anything. I fully expect that if we even had a way to calculate how much power is wasted in order to support that kind of jurassic infrastructure for every bank, Bitcoin would still come out on top by an order of magnitude at the very least. And on top of that, we have to compound the aforementioned energy to operate the physical locations. Yes, I know that this is pure and simple whataboutism, but seeing this kind of argument over and over and over again is tiresome, especially since the fact that we found a way to monetize power consumption could also -hopefully, I admit- have the added benefit of incentivizing renewable power sources such as solar panels. And remember, cryptocurrencies are at their infancy, and we are already moving away from PoW. I fully expect that at some point Bitcoin will move on too, if it is not replaced by Ethereum or something much more sensible energy-wise.
- misja111 8y ago
  You might have a point if banks provided the same service as Bitcoin, but they do multitudes more. Such as, providing a infrastructure for doing payments that is actually used by billions of people. Bitcoins are mainly used as an investment or as a store of value, for payments they are not a very good fit.
- iainmerrick 8y ago
  I fully expect that if we even had a way to calculate how much power is wasted in order to support that kind of jurassic infrastructure for every bank, Bitcoin would still come out on top by an order of magnitude at the very least. If Bitcoin is around .01% as estimated, that would mean banks account for 1% of world energy usage. I’d bet against it being anything like that high. High-frequency trading might waste a lot of energy, but that’s another silly arms race with dubious social value, exactly like Bitcoin.
touchofevil 8y ago
This is one reason why I think Nano (Nano.org) will eclipse Bitcoin for pure transfer of value transactions. Nano uses a block lattice that doesn't require mining. The transactions are instant and feeless b/c of this. There is a tiny bit of PoW on the sender's device to prevent spam transactions.
- iainmerrick 8y ago
  Hmm, how small is “tiny”? I suspect it would either be too small to be a deterrent, big enough to be wasteful at scale, or both. Is there really a sweet spot that avoids both of those?
  - touchofevil 8y ago
    This site claims that a single Nano transaction taking 0.112 Wh vs a Bitcoin transaction taking 950kWh. (note Wh vs kWh) https://isnanogreenyet.com/ https://isnanogreenyet.com/ Check Nano's FAQ regarding "Is Nano vulnerable to attacks?" here https://nano.org/en/faq https://nano.org/en/faq
rando-brando420 8y ago
In a market system, why is this a problem? How much energy and resources are used in all manner of activities which somebody could consider wasteful? In any event, it seems to me that bitcoin is becoming a proxy for Arthur C Clarke's "megawatt-hour" currency which he predicted would emerge by 2016 [0]. Tying a currency to a fundamental quantity (the Joule) seems like a reasonable way to overcome the deficiencies of fiat currencies. [0] http://www.kurzweilai.net/arthur-c-clarke-offers-his-vision-of-the-future http://www.kurzweilai.net/arthur-c-clarke-offers-his-vision-...
- WorldMaker 8y ago
  It's a problem because market systems commonly fail at correctly gauging externalities without enforced regulation or taxation to properly tune the market to more effectively balance short term gains against long term/big picture (planetary) losses. Something like Carbon taxes, for instance, might help the market hit a better long-term equilibrium for uses of electricity that takes long-term problems like climate change into better account.
  - rando-brando420 8y ago
    Carbon taxes apply to power generation, not power utilization. Put another way, why is it not a problem for millions of people to turn on tv sets and "waste" electricity watching football? What is the logical endpoint of the regulatory approach?
    - WorldMaker 8y ago
      A) See the "something like" hedge. B) Most taxes get "passed on" to the next buyer, eventually. A carbon tax on power generation affects power costs, which in turn affects power utilization. It's not a direct effect, but it's still more awareness of the externality in the market as a whole than without such a tax. C) It's possible that household TV usage is a waste of power utilization, in terms of long term carbon state, and a carbon tax or something like it might encourage more people to watch football games in person or read more books. A carbon tax could encourage more household users to reexamine their power utilization. If you trust the markets to be rational (and that's a wild assumption, I think, these days), people will sort that out for themselves if the market reflected externalities better. D) That said, the people truly fighting against options like carbon taxes are industries whose daily output far outpaces household power utilization and households may not need to change hardly that much, if industry simply got cleaner or paid more of its share of the damage it was causing. E) Just because your hypothetical is a silly one, I think the statistics show that right now in terms of carbon output, staying at home and watching TV is actually one of the best power utilizations with regard to greenhouse gas output of an average household. Most American households' carbon output are most influenced by their a) internal combustion vehicles, b) HVAC systems, c) beef-eating habits, roughly in that order. Modern LED TVs are masters of efficiency with respect to other things in one's household.
awt 8y ago
What is the standard for virtuous use of energy?
- solean 8y ago
  So much outrage for bitcoin energy consumption from people on their computers, in well-lit, air-conditioned rooms.
geraldbauer 8y ago
FYI: At Bits & Blocks Press I've collected some bitcoin myths and facts, see Best of Bitcoin Maximalist - Scammers, Morons, Clowns, Shills & BagHODLers - Inside The New New Crypto Ponzi Economics [1] or Crypto Facts - Decentralize Payments - Efficient, Low Cost, Fair, Clean - True or False? [2] [1]: https://bitsblocks.github.io/bitcoin-maximalist https://bitsblocks.github.io/bitcoin-maximalist [2]: https://bitsblocks.github.io/crypto-facts https://bitsblocks.github.io/crypto-facts
blondie9x 8y ago
Bitcoin is a ridiculous waste of energy. Can we please have more regulation of this waste? What is the real benefit of Bitcoin? It can't even be used to pay for anything. Gold sits somewhere and can be used for manufacturing. Storage of gold uses almost no energy whatsoever. Maybe to protect and produce a safe and hire people to watch it if its a large stockpile. Extraction is also difficult and energy intensive. Best way would be to move beyond move gold and Bitcoin. Bitcoin just continues to waste more and more energy without being used for anything. Storing it and seeing if coins are actually real is too energy intensive. Bitcoin is irresponsible and a waste. Gotta be a better way to use and create cryptocurrencies for the environment and to avoid exuberant transaction costs.
- mythrwy 8y ago
  Yes but extracting bitcoin need not leave large holes in the ground nor create heavy metal runoff in the water supply. Can always use more efficient power sources to mitigate some of the effects. And, there is incentive to do so. But agree on better ways to create cryptocurrencies. That seems a better solution.
- solean 8y ago
  You know what else is a huge waste of energy? Video games. They produce negative value. Should we regulate them? Should you even be allowed to play them?
  - DFHippie 8y ago
    This argument comes down to "we can't regulate anything if we don't regulate everything". You could use the same argument to say everyone should have nuclear weapons if they're allowed to have toothpicks. It's a slippery slope! Given that we all accept some things should be regulated/disallowed, we can set aside the slippery slope argument and try to decide what the threshold for societal good or harm should be. Should you be allowed to dump CFCs into the atmosphere? How about lead in the drinking water? Can you defoliate the rain forest for your own amusement? Can you fire machine guns into the air over a city and let the bullets fall where they may? People disagree about where the threshold is, but they generally agree that there is some threshold.
VMG 8y ago
1. There is no proven alternative to Proof-of-Work. No, not even Proof-of-Stake: https://download.wpsoftware.net/bitcoin/pos.pdf https://download.wpsoftware.net/bitcoin/pos.pdf. Most PoS fans admit this. 2. Thanks to second-layer scaling solutions, there can be arbitrarily many off-chain transactions powered by an on-chain transactions. For more information, visit http://lightning.network/ http://lightning.network/ 3. Bitcoin was not invented as a cheap transaction medium, although it was mistakenly marketed as such for a long time. It was invented to serve as a uncensorable sound money. The cost calculation needs to reflect that aspect, otherwise we are measuring the aerodynamics of a tank.
- tim333 8y ago
  Oroborus proof of stake is kind of proven on paper https://eprint.iacr.org/2016/889.pdf https://eprint.iacr.org/2016/889.pdf And bitcoin proof of work isn't that perfect. Over 50% of the hash power is with a few guys in China so they could hack the system if they wanted to.
  - VMG 8y ago
    No they can't "hack" the system - they can try do a double-spend, but it would be very expensive. The cost is proportional to chain length. What's the cost of creating a parallel chain in "Oroborus" as a function of chain length?
    - deleted 8y ago
      [deleted]
bastawhiz 8y ago
Correct me if I'm wrong, but this seems like a problem that can't be corrected, either. Decreasing energy use means doing fewer calculations (and a few people here have mentioned PoS). If I'm running a multi million dollar cryptocurrency farm, it's against my interests to support a system that's less computationally intensive. The whole point of investing in powerful GPUs is to crunch numbers harder. If the community comes along and says "we're switching to this thing that doesn't need your beefy energy-guzzling hardware" these miners are going to do whatever they can to make sure their investment is still maximally beneficial. Nobody is going to say "Well it was fun while it lasted!" and throw millions of dollars of hardware in the trash.

77 points by fabian2k 8y ago

Why the obsession about energy consumption from mining bitcoin? It is because many people still consider it imaginary or non-productive? It is because, unlike many other markets, it is fairly straightforward to find upper and lower bounds for consumption?

1337biz 8y ago
Because it brings people together. Crypto bashers meets Sustainability preachers. Just connect two popular sub-trends and you are golden!
- SlowRobotAhead 8y ago
  I have no real opinion on crypto except that like everyone else I’m mad I didn’t buy bitcoin st $5, and am far from an “environmental preacher” - I only enjoy the irony that some people will go from posting about climate change and go right over checking their bitcoin value.
granshaw 8y ago
You’re being down voted, but this was a useful comment for me. Made me realize that there’s plenty of energy being spent to mine and handle other commodities too, e.g. gold.
- Cthulhu_ 8y ago
  Gold is generally a one-time investment though - you could smelt it into a bar at a high initial energy cost, but after that, transferring it is free. As opposed to BTC which apparently costs 300 KWh per transaction.
  - jacquesm 8y ago
    > you could smelt it into a bar at a high initial energy cost, but after that, transferring it is free. How is it free after the initial smelting to transfer? Moving physical gold around is very expensive.
    - granshaw 8y ago
      Exactly. Plus you need to factor in the exploration, mining, and extraction costs too
maxerickson 8y ago
I think people looking into it doesn't necessarily rise to the level of obsession. The incentive here was likely to publish something (rather than an emotional attachment to some aspect of bitcoin). That Bitcoin are probably little more than coal-fired Beanie Babies likely does contribute to message board attention.
- mkirklions 8y ago
  Beanie Babies can be reverse engineered and replicated. Bitcoin cannot generate copycat coins(on the BTC blockchain). They are rare numbers.
  - SlowRobotAhead 8y ago
    That’s true. But like beanie babies they only have value people want to believe. Bitcoin is not fiat, it’s a commodity. It’s not decentralized at all and there are a handful of people thus could destroy it at any time. Sounds a lot like beanie babies the more I think about it.
    - mkirklions 8y ago
      >It’s not decentralized at all and there are a handful of people thus could destroy it at any time. Uh you might want to check that.
      - haikuginger 8y ago
        The three largest pools combined hold over 50% of the total hashing power, and all are based in China.
        mkirklions 8y ago
        Thats the mining pool though. You can join those pools from anywhere.
      - SlowRobotAhead 8y ago
danmg 8y ago
Well, if this sort of system is going to be the future of finance, isn't the environmental impact of it something we should consider? Especially, when we hear about old inefficient power pants coming back on-line to fulfill the new demand created by cryptocurrencies. Edit: Don't the mining costs basically exponentially increase as the supply of bitcoin runs out as it's an exponential decay? Being bounded by an exponential function isn't a good sign.
- sf_rob 8y ago
  Minting of new coins is an exponential decay (hence the mining metaphor, gold becomes rarer to find as mining continues). There's also transaction fees which are based on supply/demand for blockchain operations.
- TangoTrotFox 8y ago
  In response to your edit, no. There is no set cost to mine a bitcoin. Energy is expended in trying to solve the problems the generate bitcoins. Once bitcoins run out, this is still true as instead of directly creating new bitcoins, miners will still be rewarded with the transaction fees connected to whatever block they main. The difficulty of solving a problem to generate coins is dynamically and automatically adjusted such that it takes about 10 minutes. What this means is that if you had a total of 800 nuclear reactors dedicated to exclusively powering ASIC systems to mine Bitcoins it'd take, on average, just as long as it would if your total electricity consumption was the equivalent of one guy running a low power laptop using a hand crank or bike generator. So all the electricity consumption represents is demand. As demand increases for bitcoin, so does this price. When the price goes up this means you can afford to pay more for electricity and still show a profit. When demand goes down for bitcoin you need to pay less and less for electricity to maintain profitability. What will happen when no new coins are being generated is that the reward for each block mined will decrease. This will mean you receive less money for mining a block and thus can not afford to pay as much for energy and remain profitable. The net effect being that we'll see a decline in energy usage as miners running on thinner margins are pushed out of profitability. The dynamic balancing is actually quite a clever design.
- toomuchgov 8y ago
epmaybe 8y ago
I think it's interesting because it allows you to quantify the impact of Bitcoin mining on energy consumption. What would we do with our resources if this was not a viable way to produce wealth? With the continuing decline of natural resources in the world, it's worth seeing what we as humans do with these resources from an academic perspective. Also, I imagine a lot of people do indeed think that Bitcoin is imaginary or nonproductive. Arstechnica makes money off of readers viewing their articles, so content that validates an opinion or strikes controversy generally does well.
freeloop10 8y ago
It's quite a gimmick imo. The amount spent has no basis in what is needed, but simply chosen by multiplication of the guesswork of a person several years ago by the chaotic swings of the market. It's also quite inefficient and even if it was chosen with some rationale basis, the idea of burning energy for years in the hope of providing a high enough bar to prevent a single tsunami of effort over the a brief period of time, less than a few hours and only required to match it, is one of the dumbest security ideas I've ever heard. I'm not against cryptocurrency, not do I think it will fail in concept, but I very much hope that PoS proves viable and will succeed this utter waste.
tgb 8y ago
No, it's not because people consider it imaginary or non-productive: it's because they consider it insufficiently productive for what it costs the globe and that the rewards are obviously localized while the costs are global.

curun1r 8y ago

> So de Vries calculated how much electricity bitcoin miners would have to consume for bitcoin mining to no longer be profitable. He assumed that electricity prices make up 60 percent of the cost of mining and that electricity costs an average of 5 cents per KWh. That yielded energy consumption of 7.7GW, which serves as an upper bound of the bitcoin network's energy consumption That's not the upper bound, since there a monetization strategies that end up using other people's hardware and electricity. Websites that run JavaScript miners are ridiculously inefficient but also don't have to meet his profitability formula because the electricity is paid by someone different than the person/entity that gets the Bitcoin.

mrb 8y ago

I provided this statement to some journalists who contacted me to get another viewpoint on Alex de Vries's paper: His findings are not completely accurate, but also not completely wrong either. My own formal well-documented estimate is that Bitcoin used 0.09% of the world's electricity as of January 11th, 2018 (http://blog.zorinaq.com/bitcoin-electricity-consumption/ http://blog.zorinaq.com/bitcoin-electricity-consumption/). After 4 months of growth I estimate we are around 0.15-0.20% today. Therefore reaching 0.50% by the end of 2018 is plausible; not likely but plausible. That said, overall I think Alex de Vries's figures are rather inflated because he makes two errors. Firstly, his model assumes that manufacturers sell at cost and make zero profits, which allows miners to spend more on electricity. In reality we've seen Bitmain, the largest manufacturer, make billions of dollars over the last few years. No one expects them to make zero profits by the end of 2018. Secondly, de Vries makes the mistake of assuming that all cryptocurrency mining chips produced by TSMC on behalf of Bitmain end up in Bitcoin mining machines. In reality many chips are fabricated for cryptocurrencies other than Bitcoin. This altcoin sector is rapidly growing. It wouldn't be unreasonable to assume that Bitcoin mining machines will represent less than half of Bitmain's sales by the end of 2018. (This is a copy of my comment from yesterday's thread on the same topic https://news.ycombinator.com/item?id=17084253 https://news.ycombinator.com/item?id=17084253)

brianberns 8y ago
> In reality many chips are fabricated for cryptocurrencies other than Bitcoin. OK, so replace "Bitcoin" with "Bitcoin and other cryptocurrencies" in the title. The point remains the same: blockchain-based technologies are extremely inefficient with energy. That's the nature of "proof of work" algorithms.
- VMG 8y ago
  Which algorithms are more efficient at doing what Bitcoin does?
  - kennywinker 8y ago
    You’re thinking efficient compared to another hashing algorithm. I think op is saying efficient compared to the value it creates. I.e. cryptocurrency is useful for some things, but it’s burning a LOT of energy to do it.

SlowRobotAhead 8y ago

Serious question... has there been a bigger waste of electricity in any commodity trading or in any internet trend? A the cost of a single bitcoin transaction (~300kW) could power a use home for more than a week [1]. How is this even remotely defensible by people who participates in coins and also make posts about climate change? Seems very hypocritical to me, because I’m pretty sure it’s not those “filthy denier types” that are wrapped up in the coin game. [1] https://www.eia.gov/tools/faqs/faq.php?id=97&t=3 https://www.eia.gov/tools/faqs/faq.php?id=97&t=3

mbunch 8y ago
That's part of the reason why Bitcoin is seen as V1 tech that's being moved away from and other cryptocurrencies using variants of Proof of Stake (which consumes orders of magnitude less electricity but has other potential pitfalls) instead of Proof of Work have grown more popular. Ethereum, generally considered the #2 crypto, is planning to make the switch from PoW to PoS, for instance. There are some people who still support large-scale adoption of PoW coins, though, and you are right that they're generally willfully ignorant of the environmental concerns. The only case I can see for those is something that aims for true trustlessness and anonymity like Monero, since most PoS methods make compromises around that. EDIT: I stand corrected. Ethereum is still laying the groundwork for a switch from PoW to PoS and hasn't yet transitioned.
- redbeard0x0a 8y ago
  Ethereum is still PoW, they released an initial PoS that runs along side the PoW, "verifying" every 100 transactions or so. The goal is to move entirely to PoS, but things take time.
  - kimsk112 8y ago
    Why has it taken so long? I thought this would happen in 2017.
    - lostmsu 8y ago

kenpomeroy 8y ago

There's nothing inherently bad about energy consumption. The raw amount of energy consumed is a useless metric without determining how much of this energy is derived from clean/renewable sources.

Cthulhu_ 8y ago
There is an argument that could be made that if that power was from a renewable source, it could instead have been used to replace non-renewable power output - all of bitcoin's power usage combined is several coal burning power plants, I'm sure. Second there's the fact that most of that power is changed into heat. I don't think the heat emitted from anything using electricity is significant enough to have an impact on climate (outside of the cities at least), but still.
finaliteration 8y ago
Only about 10% of energy consumption in the US comes from renewable sources... https://www.eia.gov/tools/faqs/faq.php?id=92&t=4 https://www.eia.gov/tools/faqs/faq.php?id=92&t=4
- kenpomeroy 8y ago
  Not sure why this is relevant unless you think 100% of bitcoin mining takes place in the US.
Majestic121 8y ago
You're right that's there's nothing inherently bad about energy consumption. I would gladly use 7.7 gigawatts and more if it meant developing a cure for cancer, or exploring Mars, or anything useful really. The crux of the issue is that Bitcoin is mostly used as a speculative asset, i.e. something with little actual usefulness except for traders basically. Using 0.5% of the world's total energy consumption for this is an issue, imho.
- deleted 8y ago
  [deleted]

isoprophlex 8y ago

Three hundred kWh per transaction!!! That keeps my household running for 40 days! Humanity has a pretty screwed up way of getting its global priorities right.

justherefortart 8y ago
What do you think human's priorities should be? Just curious. I'm not a scam-coin fan at all.
- vertexFarm 8y ago
  I think that securing a safe and prosperous future should be an obvious one, and one that we're royally screwing up with the amount of energy we spend. If climate change is even a tenth as bad as it is projected to be this will have been a terribly selfish era of history. We're essentially devouring our young.
  - cryptoz 8y ago
    Okay, but that came as a problem long before Bitcoin arrived on the scene. In fact, bitcoin itself is a response to an overreaching, overextended global system of control led by banks and other corporations - the same ones who have ravaged the Earth and lied about it, causing the runaway global climate change we have now. Yes, bitcoin uses way too much energy. But if we had a more fair system in the first place - that is, distribution of resources - it is unlikely anyone would have resorted to inventing bitcoin in the first place.
    - vertexFarm 8y ago
      Well you can't change it now. There's no use crying over spilt milk. I don't see the logic in creating this wasteful system in response to an pre-existing wasteful system, especially with how dubious it is that cryptocurrency is beneficial to mankind. Like okay Alex Jones, we got a global system of control led by globally globalist banks. I don't think bitcoin is going to change that. Call me crazy, but that seems a bit grandiose.

hart_russell 8y ago

This is why proof of stake is so needed

anonymfus 8y ago

Please somebody convert it to human deaths, for example using data from this paper about death toll of energy generation: https://sci-hub.tw/https://doi.org/10.1016/S0140-6736(07)61253-7 https://sci-hub.tw/https://doi.org/10.1016/S0140-6736(07)612...

xutopia 8y ago

It's a currency that is backed by crypto and is printed via a kWh backing. Better than gold and government if you ask me.

onecooldev24 8y ago

Why weren't these points raised for gold & diamond mining through out human civilization. Africans have been killed ruthlessly for diamonds and our so called "smart users" of HN can't seem to see eye to eye on these points. Cause they missed out on BTC! and now they hate it.

itchyjunk 8y ago

If bitcoin was not using said electricity (if there was no demand), would the power plants be producing that electricity in the first place? You might say no and hence we burn less fossil fuel. But for renewable sources like hydro, you just produce less when the demand is less. (Based on what I read on wiki [0]). Should we really say `don't try out new ideas because it's wasting precious electricity`? Maybe we should. But I feel like humans have enough technology under their belt that enough electricity generation isn't a dire situation. So are people worried about fossil fuel? If so maybe we should address that. If not, are we saying we need to quota electricity and decide if new techs shouldn't get a shot (if they are somewhat 'wasteful' and we don't know how useful it is)? Side not, I wonder how much electricity gaming system uses. [0] https://en.wikipedia.org/wiki/Hydroelectricity#Flexibility https://en.wikipedia.org/wiki/Hydroelectricity#Flexibility

Guvante 8y ago
> But I feel like humans have enough technology under their belt that enough electricity generation isn't a dire situation. It isn't a direct situation it is just wasteful... > Side not, I wonder how much electricity gaming system uses. A high end system uses around 750W and assuming 3 hours of game play a day is around 800kWh a year, so enough for 2.5 Bitcoin transactions. Besides honest question: is there anything about Bitcoin that is experimental anymore? Seems most research switched to different coins so defending Bitcoin to defend research is odd.

birracerveza 8y ago

Disclaimer: I have invested in Bitcoin, and I think that PoW is outdated. However, I also think that people that keep attacking this aspect are better off tackling other issues. As everyone else before me said, the banks are wasting a much greater amount of electricity in order to operate. I am not talking simply about gas, lights et al. (although all banks where I live keep lights on 24/7, and in some cases even air conditioners), but also about the massive, MASSIVE amount of legacy infrastructure that keep them going. I'm talking software and hardware that are several decades old, stacked on top of each other with little to no optimization in order to support legacy features and to avoid breaking anything. I fully expect that if we even had a way to calculate how much power is wasted in order to support that kind of jurassic infrastructure for every bank, Bitcoin would still come out on top by an order of magnitude at the very least. And on top of that, we have to compound the aforementioned energy to operate the physical locations. Yes, I know that this is pure and simple whataboutism, but seeing this kind of argument over and over and over again is tiresome, especially since the fact that we found a way to monetize power consumption could also -hopefully, I admit- have the added benefit of incentivizing renewable power sources such as solar panels. And remember, cryptocurrencies are at their infancy, and we are already moving away from PoW. I fully expect that at some point Bitcoin will move on too, if it is not replaced by Ethereum or something much more sensible energy-wise.

misja111 8y ago
You might have a point if banks provided the same service as Bitcoin, but they do multitudes more. Such as, providing a infrastructure for doing payments that is actually used by billions of people. Bitcoins are mainly used as an investment or as a store of value, for payments they are not a very good fit.
iainmerrick 8y ago
I fully expect that if we even had a way to calculate how much power is wasted in order to support that kind of jurassic infrastructure for every bank, Bitcoin would still come out on top by an order of magnitude at the very least. If Bitcoin is around .01% as estimated, that would mean banks account for 1% of world energy usage. I’d bet against it being anything like that high. High-frequency trading might waste a lot of energy, but that’s another silly arms race with dubious social value, exactly like Bitcoin.

touchofevil 8y ago

This is one reason why I think Nano (Nano.org) will eclipse Bitcoin for pure transfer of value transactions. Nano uses a block lattice that doesn't require mining. The transactions are instant and feeless b/c of this. There is a tiny bit of PoW on the sender's device to prevent spam transactions.

iainmerrick 8y ago
Hmm, how small is “tiny”? I suspect it would either be too small to be a deterrent, big enough to be wasteful at scale, or both. Is there really a sweet spot that avoids both of those?
- touchofevil 8y ago
  This site claims that a single Nano transaction taking 0.112 Wh vs a Bitcoin transaction taking 950kWh. (note Wh vs kWh) https://isnanogreenyet.com/ https://isnanogreenyet.com/ Check Nano's FAQ regarding "Is Nano vulnerable to attacks?" here https://nano.org/en/faq https://nano.org/en/faq

rando-brando420 8y ago

In a market system, why is this a problem? How much energy and resources are used in all manner of activities which somebody could consider wasteful? In any event, it seems to me that bitcoin is becoming a proxy for Arthur C Clarke's "megawatt-hour" currency which he predicted would emerge by 2016 [0]. Tying a currency to a fundamental quantity (the Joule) seems like a reasonable way to overcome the deficiencies of fiat currencies. [0] http://www.kurzweilai.net/arthur-c-clarke-offers-his-vision-of-the-future http://www.kurzweilai.net/arthur-c-clarke-offers-his-vision-...

WorldMaker 8y ago
It's a problem because market systems commonly fail at correctly gauging externalities without enforced regulation or taxation to properly tune the market to more effectively balance short term gains against long term/big picture (planetary) losses. Something like Carbon taxes, for instance, might help the market hit a better long-term equilibrium for uses of electricity that takes long-term problems like climate change into better account.
- rando-brando420 8y ago
  Carbon taxes apply to power generation, not power utilization. Put another way, why is it not a problem for millions of people to turn on tv sets and "waste" electricity watching football? What is the logical endpoint of the regulatory approach?
  - WorldMaker 8y ago
    A) See the "something like" hedge. B) Most taxes get "passed on" to the next buyer, eventually. A carbon tax on power generation affects power costs, which in turn affects power utilization. It's not a direct effect, but it's still more awareness of the externality in the market as a whole than without such a tax. C) It's possible that household TV usage is a waste of power utilization, in terms of long term carbon state, and a carbon tax or something like it might encourage more people to watch football games in person or read more books. A carbon tax could encourage more household users to reexamine their power utilization. If you trust the markets to be rational (and that's a wild assumption, I think, these days), people will sort that out for themselves if the market reflected externalities better. D) That said, the people truly fighting against options like carbon taxes are industries whose daily output far outpaces household power utilization and households may not need to change hardly that much, if industry simply got cleaner or paid more of its share of the damage it was causing. E) Just because your hypothetical is a silly one, I think the statistics show that right now in terms of carbon output, staying at home and watching TV is actually one of the best power utilizations with regard to greenhouse gas output of an average household. Most American households' carbon output are most influenced by their a) internal combustion vehicles, b) HVAC systems, c) beef-eating habits, roughly in that order. Modern LED TVs are masters of efficiency with respect to other things in one's household.

awt 8y ago

What is the standard for virtuous use of energy?

solean 8y ago
So much outrage for bitcoin energy consumption from people on their computers, in well-lit, air-conditioned rooms.

geraldbauer 8y ago

FYI: At Bits & Blocks Press I've collected some bitcoin myths and facts, see Best of Bitcoin Maximalist - Scammers, Morons, Clowns, Shills & BagHODLers - Inside The New New Crypto Ponzi Economics [1] or Crypto Facts - Decentralize Payments - Efficient, Low Cost, Fair, Clean - True or False? [2] [1]: https://bitsblocks.github.io/bitcoin-maximalist https://bitsblocks.github.io/bitcoin-maximalist [2]: https://bitsblocks.github.io/crypto-facts https://bitsblocks.github.io/crypto-facts

blondie9x 8y ago

Bitcoin is a ridiculous waste of energy. Can we please have more regulation of this waste? What is the real benefit of Bitcoin? It can't even be used to pay for anything. Gold sits somewhere and can be used for manufacturing. Storage of gold uses almost no energy whatsoever. Maybe to protect and produce a safe and hire people to watch it if its a large stockpile. Extraction is also difficult and energy intensive. Best way would be to move beyond move gold and Bitcoin. Bitcoin just continues to waste more and more energy without being used for anything. Storing it and seeing if coins are actually real is too energy intensive. Bitcoin is irresponsible and a waste. Gotta be a better way to use and create cryptocurrencies for the environment and to avoid exuberant transaction costs.

mythrwy 8y ago
Yes but extracting bitcoin need not leave large holes in the ground nor create heavy metal runoff in the water supply. Can always use more efficient power sources to mitigate some of the effects. And, there is incentive to do so. But agree on better ways to create cryptocurrencies. That seems a better solution.
solean 8y ago
You know what else is a huge waste of energy? Video games. They produce negative value. Should we regulate them? Should you even be allowed to play them?
- DFHippie 8y ago
  This argument comes down to "we can't regulate anything if we don't regulate everything". You could use the same argument to say everyone should have nuclear weapons if they're allowed to have toothpicks. It's a slippery slope! Given that we all accept some things should be regulated/disallowed, we can set aside the slippery slope argument and try to decide what the threshold for societal good or harm should be. Should you be allowed to dump CFCs into the atmosphere? How about lead in the drinking water? Can you defoliate the rain forest for your own amusement? Can you fire machine guns into the air over a city and let the bullets fall where they may? People disagree about where the threshold is, but they generally agree that there is some threshold.

VMG 8y ago

1. There is no proven alternative to Proof-of-Work. No, not even Proof-of-Stake: https://download.wpsoftware.net/bitcoin/pos.pdf https://download.wpsoftware.net/bitcoin/pos.pdf. Most PoS fans admit this. 2. Thanks to second-layer scaling solutions, there can be arbitrarily many off-chain transactions powered by an on-chain transactions. For more information, visit http://lightning.network/ http://lightning.network/ 3. Bitcoin was not invented as a cheap transaction medium, although it was mistakenly marketed as such for a long time. It was invented to serve as a uncensorable sound money. The cost calculation needs to reflect that aspect, otherwise we are measuring the aerodynamics of a tank.

tim333 8y ago
Oroborus proof of stake is kind of proven on paper https://eprint.iacr.org/2016/889.pdf https://eprint.iacr.org/2016/889.pdf And bitcoin proof of work isn't that perfect. Over 50% of the hash power is with a few guys in China so they could hack the system if they wanted to.
- VMG 8y ago
  No they can't "hack" the system - they can try do a double-spend, but it would be very expensive. The cost is proportional to chain length. What's the cost of creating a parallel chain in "Oroborus" as a function of chain length?
  - deleted 8y ago
    [deleted]

bastawhiz 8y ago

Correct me if I'm wrong, but this seems like a problem that can't be corrected, either. Decreasing energy use means doing fewer calculations (and a few people here have mentioned PoS). If I'm running a multi million dollar cryptocurrency farm, it's against my interests to support a system that's less computationally intensive. The whole point of investing in powerful GPUs is to crunch numbers harder. If the community comes along and says "we're switching to this thing that doesn't need your beefy energy-guzzling hardware" these miners are going to do whatever they can to make sure their investment is still maximally beneficial. Nobody is going to say "Well it was fun while it lasted!" and throw millions of dollars of hardware in the trash.