8 ms·

So it's not a complete waste of natural resources because it helps secure "the chain"?

by jacquesc 8y ago

gowld 8y ago
Is it a complete waste of natural resources to lock a bank vault door, or run a network firewall?
- Smaug123 8y ago
  Those are both activities which use up trivial quantities of those natural resources. Bitcoin uses up nontrivial quantities of electricity.
  - drb91 8y ago
    There's a hidden cost of trust there, though, which vanishes with bitcoin (or at least reduces its cost). Maybe the value of bitcoin is more apparent from the perspective of venezuela at the moment, where the risk involved with traditional banks, currency, and security is more apparent. I am emphatically not taking a stance on which I prefer here, I might add, just pointing out that there are more variables here than you're acknowledging.
    - gamblor956 8y ago
      Bitcoin and other cryptocurrencies require even more trust than normal currency. With a normal currency transaction, you need only trust at most 2 other entities entities: your counterpart to the transaction and the government issuing the currency. With a blockchain, you still need to trust the counterparty, but now you also need to trust that the coders have properly designed and programmed the system, and that the miners either don't have the power to corrupt the system or aren't corrupt, and you need to trust whatever exchange you use to get into and out of the cryptocurrency. Plus, you've added in a significant amount of time--at a minimum 20x the time with Bitcoin and significant transaction fees that as a practical matter have exceeded card interchange fees by 2x or more for the past 3 years straight. Your right about their being more variables...with cryptocurrency.
      - drb91 8y ago
        I think there are fundamentally different ways we're talking about trust: you "only" need to trust a government, you "only" need to trust a bank, vs trusting a certain proportion of miners to be following the same bitcoin specs you are, as well as trusting that people will value it tomorrow. Both of bitcoin and government-issued currency requires trust, and building that trust is fundamentally difficult, depending on your needs, and comes with tradeoffs. It seems like you're only acknowledging one end of these tradeoffs. One obvious tradeoff you're not considering is that of a criminal getting its assets frozen, for instance. There are less black and white situations where you might prefer bitcoin as well, if you have a little imagination. If you could address that, I'd probably appreciate your comments more.
        deleted 8y ago
        [deleted]
        bronson 8y ago
        Let's not use HN as a place to enumerate cryptocoin variables? You can find plenty of that discussion elsewhere.
      - marcosdumay 8y ago
        And you need to trust that your government won't take the currency away. There is no escaping from this one.
    - dragonwriter 8y ago
      > There's a hidden cost of trust there, though, which vanishes with bitcoin With fiat, I at least have some idea who I am trusting, and if my trust is betrayed, I have some idea who to work with others to organize to work to inflict punishment. And, the people involved are aware of that. With crypto, I have to trust an anonymous network of people that I have only distant and indirect indications aren't, in overwhelming majority, mutually cooperating agents of a single potentially adverse party, and no idea of who to go after if my trust is betrayed. And the people involved know that, too.
      - morogop 8y ago
        in addition to the miners, you also have to trust a largely centralized group of software authors who make the key decisions.
    - TeMPOraL 8y ago
      > There's a hidden cost of trust there Yes, except the trust is free. Bitcoin replaces that trust with burning electricity. It's kind of like standing on the ground. The surface of the Earth stops you from accelerating under gravity for free. But if you want to hover just above it, you have to burn ungodly amounts of energy, because you're now replacing surface with active propulsion. This is the same relationship as Bitcoin has with trust. And yes, flying is occasionally useful. So are trustless systems. But both the ground and trust are features that cut out a lot of unnecessary energy usage from our lives.
  - bufferoverflow 8y ago
    You forgot to calculate how much (in resources) it costed to build all those banks and vaults and how much it costs to run and maintain, globally.
    - deleted 8y ago
      [deleted]
    - gamblor956 8y ago
      It probably cost a few billion dollars to build all those banks globally. It costs a few hundred million to maintain all those banks and vaults. However, these banks and vaults can handle more than 2000x the transactions of Bitcoin in a single day (Visa on its own is 750x the capacity of Bitcoin, and Mastercard handles about twice the number of transactions as Visa), so Bitcoin would need to be at least 1/2000th the price to build and maintain the network to maintain a comparative economic advantage against just those two companies. Including the entire financial system, Bitcoin would need to be somewhere in the neighborhood of 20,000x cheaper and more efficient. And since we're taking into account all of the underlying systemic costs going into banks, we need to do the same for Bitcoin. That means including all of the power utilities, factories, and mining facilities that went into making the hardware, plus the cost of shipping the hardware worldwide, plus the cost of the utilities and transmission lines needed to operate the network. And that's clearly not 1/20,000th the cost or resource usage of our current financial system.
      - slededit 8y ago
        Fort Knox has an entire military base to secure it. That alone would use up a good chunk of your few hundred million dollar budget. I think you are vastly underestimating the cost in supporting our current financial system.
        paulgb 8y ago
        These have to do with storing something of value, they aren't inherent to gold. People are already storing Bitcoin keys in physical vaults: https://www.bloomberg.com/news/articles/2018-05-09/bunkers-for-the-wealthy-are-said-to-hoard-10-billion-of-bitcoin https://www.bloomberg.com/news/articles/2018-05-09/bunkers-f...
- GW150914 8y ago
  If locking it or running the firewall required energy waste on the order of bitcoin they would. Fortunately both have been designed with minimizing energy use in mind, rather than wastefully maximizing it.
- deleted 8y ago
  [deleted]
cachvico 8y ago
Exactly. We should stop using the word "waste" to describe the energy consumption of the Bitcoin miners. It's not waste if it serves a purpose. The service it provides is to guarantee the integrity of the blockchain without the requirement of a central authority.
- s73v3r_ 8y ago
  "It's not waste if it serves a purpose. " It's an open question as if it actually does serve a purpose, though.
- tgb 8y ago
  It's wasting if it's using more than the alternatives and it is using more than the alternatives.
- spookthesunset 8y ago
  > We should stop using the word "waste" to describe the energy consumption of the Bitcoin miners. All you bitcoin shysters can keep telling yourself that to sleep at night, but you are lying to yourself and you know it. Bitcoin consumes massive amounts of energy for a pathetically small amount of transactions per second. ON a per transaction basis, Bitcoin uses several orders of magnitude more energy than anything used by modern day financial systems. Like, embarrassingly, shamefully large amounts of electricity. Y'all should bow your heads in shame for the harm you are doing to the world. > The service it provides is to guarantee the integrity of the blockchain without the requirement of a central authority. The blockchain, whose only use case is to enable rampant speculation and amazingly large quantities of fraud. The whole "space" needs to go away.
  - aje403 8y ago
    Bbbut... the blockchain?
  - arebop 8y ago
    Your biggest mistake is comparing energy use. You need to compare the total overhead of bitcoin to the total overhead of the competitive financial system. The second mistake is comparing a per-transaction basis; this is of interest when we are comparing suitability for particular applications, but if you want to talk more generally about whether bitcoin is efficient for payments you need to look at things on a value basis (use usd, eur, cny, or gold ounces).
drexlspivey 8y ago
Would you ask the same question if the world run 100% on renewables? If not, it seems that your argument should be "we should accelerate our transition to renewables" instead of "bitcoin spends too much power". Also they pay for all the energy they spend so what exactly is the problem? Do you see vegans complain for the resources spent to raise animals?
- mikeash 8y ago
  The problem is that energy is priced far below costs at the moment, due to a large proportion of the costs being externalized.
- vkou 8y ago
  > Would you ask the same question if the world run 100% on renewables? Yes, because the resources (Material or labour) that went into building those renewable power plants could have gone into building something else that people want or need. Houses. Retaining walls. High-speed rail tracks. Electric cars. Bicycles. Video games. Rolls of sushi. I will keep asking that question until we are in a post-scarcity society.
  - eriken 8y ago
    So we all get to decide how all the resources are spent? I am concerned that the desire to deem certain energy spending as unethical can lead us down a creepy path of authoritarianism.
- baddox 8y ago
  This is a fairly good point. Any argument about externalities in energy usage applies to all usages of energy, and the solution is to internalize them in the price of energy.
  - rspeer 8y ago
    What a great idea. All you'd need is a centralized world government to enforce it, and then you can have a responsible, decentralized currency! Wait.
api 8y ago
How much energy is spent securing conventional financial systems? You have to include everything: banks, minting, enforcement, physical security, even military and intelligence action.
- gtirloni 8y ago
  If/when cryptocurrencies reach the same size as conventional financial systems, they will require all of the same. Bitcoin is relevant for the US economy and a rogue state tries to have 51% of hashing power? Military and intelligence to the rescue. Someone is very rich in Bitcoins? Bunker services for offline storage, physical/computer security, etc. Too many scams with altcoins? Legal enforcement, more bureaucracy, education, etc. One could say that, somehow, the cryptocurrencies won't require as much of any of that, but I don't see this point being made as often (and not with any realistic estimations).
  - api 8y ago
    The 51% scenario: just install more hash power. That would be cheaper and would not risk anyone's life. Protecting cryptocurrency: there are cryptographic ways to achieve very high security that are free or very inexpensive. Physical encryption keys cost under $100. Combine those with multiple signatures and offline storage in a safe deposit box and you have several physical and cryptographic layers of security for pretty cheap. Services that do those things do not need to be very expensive. Too many scams? Point taken. We will still need police. BTW there's a reason I said cryptocurrency and not Bitcoin. Bitcoin is one of the slower cryptocurrencies. Energy spent securing the chain is per block, and its block size limit and other aspects of its design artificially boost its energy per TX. That and in the long term I expect people to find less energy intensive ways to secure block chains.
- root_axis 8y ago
  Why is this argument repeated so often? How is that comparison not clearly absurd to you? The conventional financial system is very obviously many orders of magnitude more efficient than bitcoin.
hndamien 8y ago
You know all that sunlight that hits the Earth that we don't convert into energy. Wasted natural resource. Loads of it.
- TeMPOraL 8y ago
  No, it isn't. It's what lets you, and everything else, live, instead of freezing to death.
  - hndamien 8y ago
    It is a good thing we don't need all of it then. A tiny fraction will suffice. https://www.businessinsider.com.au/map-shows-solar-panels-to-power-the-earth-2015-9?r=US&IR=T https://www.businessinsider.com.au/map-shows-solar-panels-to... I think you may be missing my point and sarcasm.
    - TeMPOraL 8y ago
      Might be. Didn't have my morning coffee yet.

So it's not a complete waste of natural resources because it helps secure "the chain"?

gowld 8y ago

Is it a complete waste of natural resources to lock a bank vault door, or run a network firewall?

Smaug123 8y ago
Those are both activities which use up trivial quantities of those natural resources. Bitcoin uses up nontrivial quantities of electricity.
- drb91 8y ago
  There's a hidden cost of trust there, though, which vanishes with bitcoin (or at least reduces its cost). Maybe the value of bitcoin is more apparent from the perspective of venezuela at the moment, where the risk involved with traditional banks, currency, and security is more apparent. I am emphatically not taking a stance on which I prefer here, I might add, just pointing out that there are more variables here than you're acknowledging.
  - gamblor956 8y ago
    Bitcoin and other cryptocurrencies require even more trust than normal currency. With a normal currency transaction, you need only trust at most 2 other entities entities: your counterpart to the transaction and the government issuing the currency. With a blockchain, you still need to trust the counterparty, but now you also need to trust that the coders have properly designed and programmed the system, and that the miners either don't have the power to corrupt the system or aren't corrupt, and you need to trust whatever exchange you use to get into and out of the cryptocurrency. Plus, you've added in a significant amount of time--at a minimum 20x the time with Bitcoin and significant transaction fees that as a practical matter have exceeded card interchange fees by 2x or more for the past 3 years straight. Your right about their being more variables...with cryptocurrency.
    - drb91 8y ago
      I think there are fundamentally different ways we're talking about trust: you "only" need to trust a government, you "only" need to trust a bank, vs trusting a certain proportion of miners to be following the same bitcoin specs you are, as well as trusting that people will value it tomorrow. Both of bitcoin and government-issued currency requires trust, and building that trust is fundamentally difficult, depending on your needs, and comes with tradeoffs. It seems like you're only acknowledging one end of these tradeoffs. One obvious tradeoff you're not considering is that of a criminal getting its assets frozen, for instance. There are less black and white situations where you might prefer bitcoin as well, if you have a little imagination. If you could address that, I'd probably appreciate your comments more.
      - deleted 8y ago
        [deleted]
      - bronson 8y ago
        Let's not use HN as a place to enumerate cryptocoin variables? You can find plenty of that discussion elsewhere.
    - marcosdumay 8y ago
      And you need to trust that your government won't take the currency away. There is no escaping from this one.
  - dragonwriter 8y ago
    > There's a hidden cost of trust there, though, which vanishes with bitcoin With fiat, I at least have some idea who I am trusting, and if my trust is betrayed, I have some idea who to work with others to organize to work to inflict punishment. And, the people involved are aware of that. With crypto, I have to trust an anonymous network of people that I have only distant and indirect indications aren't, in overwhelming majority, mutually cooperating agents of a single potentially adverse party, and no idea of who to go after if my trust is betrayed. And the people involved know that, too.
    - morogop 8y ago
      in addition to the miners, you also have to trust a largely centralized group of software authors who make the key decisions.
  - TeMPOraL 8y ago
    > There's a hidden cost of trust there Yes, except the trust is free. Bitcoin replaces that trust with burning electricity. It's kind of like standing on the ground. The surface of the Earth stops you from accelerating under gravity for free. But if you want to hover just above it, you have to burn ungodly amounts of energy, because you're now replacing surface with active propulsion. This is the same relationship as Bitcoin has with trust. And yes, flying is occasionally useful. So are trustless systems. But both the ground and trust are features that cut out a lot of unnecessary energy usage from our lives.
- bufferoverflow 8y ago
  You forgot to calculate how much (in resources) it costed to build all those banks and vaults and how much it costs to run and maintain, globally.
  - deleted 8y ago
    [deleted]
  - gamblor956 8y ago
    It probably cost a few billion dollars to build all those banks globally. It costs a few hundred million to maintain all those banks and vaults. However, these banks and vaults can handle more than 2000x the transactions of Bitcoin in a single day (Visa on its own is 750x the capacity of Bitcoin, and Mastercard handles about twice the number of transactions as Visa), so Bitcoin would need to be at least 1/2000th the price to build and maintain the network to maintain a comparative economic advantage against just those two companies. Including the entire financial system, Bitcoin would need to be somewhere in the neighborhood of 20,000x cheaper and more efficient. And since we're taking into account all of the underlying systemic costs going into banks, we need to do the same for Bitcoin. That means including all of the power utilities, factories, and mining facilities that went into making the hardware, plus the cost of shipping the hardware worldwide, plus the cost of the utilities and transmission lines needed to operate the network. And that's clearly not 1/20,000th the cost or resource usage of our current financial system.
    - slededit 8y ago
      Fort Knox has an entire military base to secure it. That alone would use up a good chunk of your few hundred million dollar budget. I think you are vastly underestimating the cost in supporting our current financial system.
      - paulgb 8y ago
        These have to do with storing something of value, they aren't inherent to gold. People are already storing Bitcoin keys in physical vaults: https://www.bloomberg.com/news/articles/2018-05-09/bunkers-for-the-wealthy-are-said-to-hoard-10-billion-of-bitcoin https://www.bloomberg.com/news/articles/2018-05-09/bunkers-f...
GW150914 8y ago
If locking it or running the firewall required energy waste on the order of bitcoin they would. Fortunately both have been designed with minimizing energy use in mind, rather than wastefully maximizing it.
deleted 8y ago
[deleted]

cachvico 8y ago

Exactly. We should stop using the word "waste" to describe the energy consumption of the Bitcoin miners. It's not waste if it serves a purpose. The service it provides is to guarantee the integrity of the blockchain without the requirement of a central authority.

s73v3r_ 8y ago
"It's not waste if it serves a purpose. " It's an open question as if it actually does serve a purpose, though.
tgb 8y ago
It's wasting if it's using more than the alternatives and it is using more than the alternatives.
spookthesunset 8y ago
> We should stop using the word "waste" to describe the energy consumption of the Bitcoin miners. All you bitcoin shysters can keep telling yourself that to sleep at night, but you are lying to yourself and you know it. Bitcoin consumes massive amounts of energy for a pathetically small amount of transactions per second. ON a per transaction basis, Bitcoin uses several orders of magnitude more energy than anything used by modern day financial systems. Like, embarrassingly, shamefully large amounts of electricity. Y'all should bow your heads in shame for the harm you are doing to the world. > The service it provides is to guarantee the integrity of the blockchain without the requirement of a central authority. The blockchain, whose only use case is to enable rampant speculation and amazingly large quantities of fraud. The whole "space" needs to go away.
- aje403 8y ago
  Bbbut... the blockchain?
- arebop 8y ago
  Your biggest mistake is comparing energy use. You need to compare the total overhead of bitcoin to the total overhead of the competitive financial system. The second mistake is comparing a per-transaction basis; this is of interest when we are comparing suitability for particular applications, but if you want to talk more generally about whether bitcoin is efficient for payments you need to look at things on a value basis (use usd, eur, cny, or gold ounces).

drexlspivey 8y ago

Would you ask the same question if the world run 100% on renewables? If not, it seems that your argument should be "we should accelerate our transition to renewables" instead of "bitcoin spends too much power". Also they pay for all the energy they spend so what exactly is the problem? Do you see vegans complain for the resources spent to raise animals?

mikeash 8y ago
The problem is that energy is priced far below costs at the moment, due to a large proportion of the costs being externalized.
vkou 8y ago
> Would you ask the same question if the world run 100% on renewables? Yes, because the resources (Material or labour) that went into building those renewable power plants could have gone into building something else that people want or need. Houses. Retaining walls. High-speed rail tracks. Electric cars. Bicycles. Video games. Rolls of sushi. I will keep asking that question until we are in a post-scarcity society.
- eriken 8y ago
  So we all get to decide how all the resources are spent? I am concerned that the desire to deem certain energy spending as unethical can lead us down a creepy path of authoritarianism.
baddox 8y ago
This is a fairly good point. Any argument about externalities in energy usage applies to all usages of energy, and the solution is to internalize them in the price of energy.
- rspeer 8y ago
  What a great idea. All you'd need is a centralized world government to enforce it, and then you can have a responsible, decentralized currency! Wait.

api 8y ago

How much energy is spent securing conventional financial systems? You have to include everything: banks, minting, enforcement, physical security, even military and intelligence action.

gtirloni 8y ago
If/when cryptocurrencies reach the same size as conventional financial systems, they will require all of the same. Bitcoin is relevant for the US economy and a rogue state tries to have 51% of hashing power? Military and intelligence to the rescue. Someone is very rich in Bitcoins? Bunker services for offline storage, physical/computer security, etc. Too many scams with altcoins? Legal enforcement, more bureaucracy, education, etc. One could say that, somehow, the cryptocurrencies won't require as much of any of that, but I don't see this point being made as often (and not with any realistic estimations).
- api 8y ago
  The 51% scenario: just install more hash power. That would be cheaper and would not risk anyone's life. Protecting cryptocurrency: there are cryptographic ways to achieve very high security that are free or very inexpensive. Physical encryption keys cost under $100. Combine those with multiple signatures and offline storage in a safe deposit box and you have several physical and cryptographic layers of security for pretty cheap. Services that do those things do not need to be very expensive. Too many scams? Point taken. We will still need police. BTW there's a reason I said cryptocurrency and not Bitcoin. Bitcoin is one of the slower cryptocurrencies. Energy spent securing the chain is per block, and its block size limit and other aspects of its design artificially boost its energy per TX. That and in the long term I expect people to find less energy intensive ways to secure block chains.
root_axis 8y ago
Why is this argument repeated so often? How is that comparison not clearly absurd to you? The conventional financial system is very obviously many orders of magnitude more efficient than bitcoin.

hndamien 8y ago

You know all that sunlight that hits the Earth that we don't convert into energy. Wasted natural resource. Loads of it.

TeMPOraL 8y ago
No, it isn't. It's what lets you, and everything else, live, instead of freezing to death.
- hndamien 8y ago
  It is a good thing we don't need all of it then. A tiny fraction will suffice. https://www.businessinsider.com.au/map-shows-solar-panels-to-power-the-earth-2015-9?r=US&IR=T https://www.businessinsider.com.au/map-shows-solar-panels-to... I think you may be missing my point and sarcasm.
  - TeMPOraL 8y ago
    Might be. Didn't have my morning coffee yet.