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Why the obsession about energy consumption from mining bitcoin? It is because many people still consider it imaginary or non-productive? It is because, unlik

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.

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.