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What percent of the electricity used by Bitcoin miners is generated by fossil fuels? My impression is that most miners are located to take advantage of locales

What percent of the electricity used by Bitcoin miners is generated by fossil fuels? My impression is that most miners are located to take advantage of locales with very cheap hydroelectric/geothermal or take advantage of subsidized/overbuilt renewables. But I could be wrong. Any data on this?

lemoncurd 6y ago
whatever has the lowest costs
DennisP 6y ago
If they're on an electric grid that also has fossil fuels, then it doesn't really matter. More clean energy to them is less to other customers, who have to make up for it with more fossil.
- dcolkitt 6y ago
  That assumes that the demand for electricity is not price elastic.
  - bildung 6y ago
    It only assumes that demand is not 100% price elastic, which is almost guaranteed to be true.
  - matthewdgreen 6y ago
    The weird thing here is that Bitcoin doesn't care about whether it's mined with clean electricity or other, and the realities of the market are pretty opaque. When people correctly point out that Bitcoin mining consumes a lot of energy, a bunch of people immediately make the claim that most of this energy must come from excess renewable sources. But there's actually no reason at all to believe this, very little evidence in favor of it, and nothing in the Bitcoin system design that ensures it. It's basically an article of faith -- because the alternative would be objectively horrifying. We could design cryptocurrency systems that deliberately focus on using excess renewables, or just plain use less energy for mining. But the problem is that "Bitcoin" has come to stand in for "a cryptocurrency using the specific design choices that its inventor made more than a decade ago" and so privileging Bitcoin itself makes these choices impossible. The very best possible outcome is that (small-b) bitcoin tokens will eventually migrate to more efficient consensus networks, and the big-B Bitcoin network itself will be spun down to consume less power.
    - ethbr0 6y ago
      > We could design cryptocurrency systems that deliberately focus on using excess renewables Could we? I thought Ethereum still had a pretty big digital/physical gap. In that there was no way to digitally ensure a physical truth (barring third party attestation).
    - WanderPanda 6y ago
      I think you are a bit too pessimistic about it. Bitcoin mining is location invariant and its cost are mainly driven by energy costs, can we agree on that? We should also agree that in certain (many) locations renewable energy sources are the cheapest ones. Based on this you can also see it as an alternative store of value / money that also subsidises renewable energy demand. This drives development of new technologies and efficiency improvements due to economies of scale. Wouldn’t it be nice if you could buy solar panels as cheap as the rasperry pi foundation is able to source its arm processor (where the cheapness is also coming from an orthogonal use case with scale effects)?
      - Fischinn 6y ago
        Bitcoin has done shit for the environment or for reneweable energy. I would love to see a real example where you would proof me wrong. Nonetheless, bitcoin itself is not necssary and it doesn't solve a problem. People trust currencies. I trust currencies. Bitcoin also has to have a trust system and right now it is connected to currencies. It is not decoupled. The only thing bitcoin is, its irradical and its basically gambling.
      - rebuilder 6y ago
        Doesn't this argument imply that the way to stop climate change is to use as much energy as possible in order to subsidize renewable energy production? If a miner's power source is on the grid, it doesn't really matter all that much if they own a hydro plant, a solar plant, a coal plant, or are just buying power off the market. Either way, they are increasing the total energy consumption of the grid and their environmental footprint is determined by the grid average emissions and the amount of power the miner uses. If they've built an off-grid renewable power station, you might argue it would otherwise not been built and is therefore relatively neutral, emission-wise. I think that argument would be wrong, because of the scale of large mining operations. If you can build new renewable energy capacity at a competitive price and at sufficient scale to power a large mining operation, that's one thing and has nothing to do with whether or not you mine crypto with that energy. Deciding to not sell to the grid at that scale seems irrational, and honestly I doubt miners also operate power stations except maybe at a hobbyist level.
  - LudwigNagasena 6y ago
    The household demand for electricity is non-elastic.
- wp381640 6y ago
  That really isn't how most grids work. There are large times where prices are now negative because of oversupply of renewables. Mining by it's nature has energy as its largest input cost, so it chases lower and more efficient sources of energy which are largely renewable energy Further, good renewable sources are often poorly located for electricity distribution. You have situations where the power wouldn't otherwise be used, so it is being tapped into Bitcoin. Iceland has a pretty much infinite supply of clean energy with geothermal. They're not interconnected to the grid so previously they would export that energy via aluminum, today they can export it with bitcoin and other processing (colo compute) Georgia has also become a destination for bitcoin mining and it is largely hydro power The reports on what bitcoin's proportion of renewable sources vary very widely from ~75%[0] and ~25%[1] You can debate the methodologies of these estimates all day - but one thing to note is that the worst case estimates take an emissions factor which is average _for an entire country_ - while large scale mining operations (which account for the vast majority of mining) are often colocated in specific cheaper regions, usually around hydro/renewable power The only X factor is that a lot of energy for bitcoin is sourced corruptly. The Chinese are already some way towards resolving that (they have an incentive to!) and shut down the heavily subsidized dirty mining that was happening[2] My main takeaway is that the trends points to bitcoin eventually becoming a lot more efficient, and potentially can be used as a regulating mechanism on grids or as a way to export energy from renewable sources that aren't well interconnected [0] https://coinshares.com/research/bitcoin-mining-network-december-2019#mailmunch-pop-849406 https://coinshares.com/research/bitcoin-mining-network-decem... [1] https://www.cell.com/joule/fulltext/S2542-4351(19)30255-7 https://www.cell.com/joule/fulltext/S2542-4351(19)30255-7 [2] https://www.coindesk.com/bitmain-ebang-bitcoin-mining-energy-china-inner-mongolia https://www.coindesk.com/bitmain-ebang-bitcoin-mining-energy...
  - DennisP 6y ago
    > They're not interconnected to the grid so previously they would export that energy via aluminum Ok, but now somebody else is making that aluminum. There's always something we could do with free energy, including making carbon-neutral liquid fuels or ammonia fertilizer, or taking CO2 out of the atmosphere. If Bitcoin were the only way to have a working cryptocurrency, there'd at least be an argument for it. Now that proof-of-stake is available, Bitcoin's energy consumption is pure waste, since we can have essentially the same product without using the energy.
Swenrekcah 6y ago
Hydro and geothermal aren't without environmental cost. They don't destroy the whole world but can be fairly destructive locally. If you're going to flood a valley, please make it for something actually worthwile.
- emteycz 6y ago
  Nobody is building a dam because of Bitcoin. Bitcoin is what's done when there is egress electricity (which there always is, somewhere).
  - TeMPOraL 6y ago
    Yet. When people fab ASICs for crypto, it's only a step away from building a power plant.
    - Swenrekcah 6y ago
      Actually I'm fairly sure it has been done. I personally know of serious plans to do so.
    - emteycz 6y ago
      And they're welcome to do so, as long as it's ecological it's not a problem. Geothermals (which the other poster is probably speaking about) are not an issue.
- raverbashing 6y ago
  Yes they aren't but compared with the consumption of non-renewable fossil-fuels I'll take the Hydro any day Depending on the place you pick you might not even need to flood too much
codenotmath 6y ago
There are many who mine on subsidized fosil fuel. Especially in argentinia.
- emteycz 6y ago
  And yet you label Bitcoin as the problem instead of resolving the actual problem of subsidized fossil fuel.
  - Fischinn 6y ago
    Without bitcoin the problem wouldn't be to be fixed as it wouldn't be a problem. Its also not the responsibility of the world to create unlimited carbon neutral power source for bitcoin. Bitcoin needs to solve a real issue worth solving, which it doesn't.
    - emteycz 6y ago
      Or maybe "without subsidies damaging the environment there wouldn't be a problem"? We can only thank Bitcoin for uncovering it, this subsidy needs to stop ASAP. That Bitcoin didn't solve your problems doesn't mean it didn't solve real issues worth solving. Bitcoin solved the problem of quickly and cheaply moving money across the world without risking it will be lost. I was unable to move money between Africa and Europe before Bitcoin, now it's quick, cheap and reliable. Moving money between the USA and Europe also used to be problematic (took long and was expensive, at least it was reliable though), now with Bitcoin it's very easy. Since Bitcoin uses waste electricity (you will immediately loose a lot of money mining with ordinary electricity), it doesn't make anything worse - of course as long as governments don't kick the balance away.
      - Lapitotapito 6y ago
        'waste' electricity; Right. Not a single bitcoin miner in europe would use waste electricity; China banned bitcoin mining due to grid issues; So tell me again who has enough money to waste energy? Bitcoin is balanced by the energy market otherwise it will deflate. IF its becoming worthless to do that job, bitcoin can't work, therefore it will always be cost effective somehow. This still doesn't mean, that there is no better alternative.
londons_explore 6y ago
Even if that was the case, this excess power would very rarely go to waste. If bitcoin mining farms didn't pop up, then aluminium smelters would appear instead. Aluminium is pretty much electricity in a form that can be put on a truck.
- tome 6y ago
  Huh? How do you get the electricity back out of the aluminium? Oh, OK, I get it. Region A consumes a lot of electricity smelting aluminium. Region B has cheap electricity so a smelting company moves there and ships the aluminium to region A. Region A now has one smelting company's worth of extra electricity available.
  - usrusr 6y ago
    You don't. You use the aluminium instead of aluminium from a less clean source you'd usr otherwise.
    - tome 6y ago
      Then I don't understand how "Aluminium is pretty much electricity in a form that can be put on a truck".
      - linux-user 6y ago
        It is called a "figure of speech".
        tome 6y ago
        OK, so interpret my question as asking for an explanation of the figure of speech! It's a little bit surprising to get such pushback on a genuine question when there are substances you could describe as "electricity you can put on the back of a truck" such as hydrogen canisters and various forms of battery!
brenner100 6y ago
https://coinshares.com/research/bitcoin-mining-network-december-2019 https://coinshares.com/research/bitcoin-mining-network-decem...

lemoncurd 6y ago

whatever has the lowest costs

DennisP 6y ago

If they're on an electric grid that also has fossil fuels, then it doesn't really matter. More clean energy to them is less to other customers, who have to make up for it with more fossil.

dcolkitt 6y ago
That assumes that the demand for electricity is not price elastic.
- bildung 6y ago
  It only assumes that demand is not 100% price elastic, which is almost guaranteed to be true.
- matthewdgreen 6y ago
  The weird thing here is that Bitcoin doesn't care about whether it's mined with clean electricity or other, and the realities of the market are pretty opaque. When people correctly point out that Bitcoin mining consumes a lot of energy, a bunch of people immediately make the claim that most of this energy must come from excess renewable sources. But there's actually no reason at all to believe this, very little evidence in favor of it, and nothing in the Bitcoin system design that ensures it. It's basically an article of faith -- because the alternative would be objectively horrifying. We could design cryptocurrency systems that deliberately focus on using excess renewables, or just plain use less energy for mining. But the problem is that "Bitcoin" has come to stand in for "a cryptocurrency using the specific design choices that its inventor made more than a decade ago" and so privileging Bitcoin itself makes these choices impossible. The very best possible outcome is that (small-b) bitcoin tokens will eventually migrate to more efficient consensus networks, and the big-B Bitcoin network itself will be spun down to consume less power.
  - ethbr0 6y ago
    > We could design cryptocurrency systems that deliberately focus on using excess renewables Could we? I thought Ethereum still had a pretty big digital/physical gap. In that there was no way to digitally ensure a physical truth (barring third party attestation).
  - WanderPanda 6y ago
    I think you are a bit too pessimistic about it. Bitcoin mining is location invariant and its cost are mainly driven by energy costs, can we agree on that? We should also agree that in certain (many) locations renewable energy sources are the cheapest ones. Based on this you can also see it as an alternative store of value / money that also subsidises renewable energy demand. This drives development of new technologies and efficiency improvements due to economies of scale. Wouldn’t it be nice if you could buy solar panels as cheap as the rasperry pi foundation is able to source its arm processor (where the cheapness is also coming from an orthogonal use case with scale effects)?
    - Fischinn 6y ago
      Bitcoin has done shit for the environment or for reneweable energy. I would love to see a real example where you would proof me wrong. Nonetheless, bitcoin itself is not necssary and it doesn't solve a problem. People trust currencies. I trust currencies. Bitcoin also has to have a trust system and right now it is connected to currencies. It is not decoupled. The only thing bitcoin is, its irradical and its basically gambling.
    - rebuilder 6y ago
      Doesn't this argument imply that the way to stop climate change is to use as much energy as possible in order to subsidize renewable energy production? If a miner's power source is on the grid, it doesn't really matter all that much if they own a hydro plant, a solar plant, a coal plant, or are just buying power off the market. Either way, they are increasing the total energy consumption of the grid and their environmental footprint is determined by the grid average emissions and the amount of power the miner uses. If they've built an off-grid renewable power station, you might argue it would otherwise not been built and is therefore relatively neutral, emission-wise. I think that argument would be wrong, because of the scale of large mining operations. If you can build new renewable energy capacity at a competitive price and at sufficient scale to power a large mining operation, that's one thing and has nothing to do with whether or not you mine crypto with that energy. Deciding to not sell to the grid at that scale seems irrational, and honestly I doubt miners also operate power stations except maybe at a hobbyist level.
- LudwigNagasena 6y ago
  The household demand for electricity is non-elastic.
wp381640 6y ago
That really isn't how most grids work. There are large times where prices are now negative because of oversupply of renewables. Mining by it's nature has energy as its largest input cost, so it chases lower and more efficient sources of energy which are largely renewable energy Further, good renewable sources are often poorly located for electricity distribution. You have situations where the power wouldn't otherwise be used, so it is being tapped into Bitcoin. Iceland has a pretty much infinite supply of clean energy with geothermal. They're not interconnected to the grid so previously they would export that energy via aluminum, today they can export it with bitcoin and other processing (colo compute) Georgia has also become a destination for bitcoin mining and it is largely hydro power The reports on what bitcoin's proportion of renewable sources vary very widely from ~75%[0] and ~25%[1] You can debate the methodologies of these estimates all day - but one thing to note is that the worst case estimates take an emissions factor which is average _for an entire country_ - while large scale mining operations (which account for the vast majority of mining) are often colocated in specific cheaper regions, usually around hydro/renewable power The only X factor is that a lot of energy for bitcoin is sourced corruptly. The Chinese are already some way towards resolving that (they have an incentive to!) and shut down the heavily subsidized dirty mining that was happening[2] My main takeaway is that the trends points to bitcoin eventually becoming a lot more efficient, and potentially can be used as a regulating mechanism on grids or as a way to export energy from renewable sources that aren't well interconnected [0] https://coinshares.com/research/bitcoin-mining-network-december-2019#mailmunch-pop-849406 https://coinshares.com/research/bitcoin-mining-network-decem... [1] https://www.cell.com/joule/fulltext/S2542-4351(19)30255-7 https://www.cell.com/joule/fulltext/S2542-4351(19)30255-7 [2] https://www.coindesk.com/bitmain-ebang-bitcoin-mining-energy-china-inner-mongolia https://www.coindesk.com/bitmain-ebang-bitcoin-mining-energy...
- DennisP 6y ago
  > They're not interconnected to the grid so previously they would export that energy via aluminum Ok, but now somebody else is making that aluminum. There's always something we could do with free energy, including making carbon-neutral liquid fuels or ammonia fertilizer, or taking CO2 out of the atmosphere. If Bitcoin were the only way to have a working cryptocurrency, there'd at least be an argument for it. Now that proof-of-stake is available, Bitcoin's energy consumption is pure waste, since we can have essentially the same product without using the energy.

Swenrekcah 6y ago

Hydro and geothermal aren't without environmental cost. They don't destroy the whole world but can be fairly destructive locally. If you're going to flood a valley, please make it for something actually worthwile.

emteycz 6y ago
Nobody is building a dam because of Bitcoin. Bitcoin is what's done when there is egress electricity (which there always is, somewhere).
- TeMPOraL 6y ago
  Yet. When people fab ASICs for crypto, it's only a step away from building a power plant.
  - Swenrekcah 6y ago
    Actually I'm fairly sure it has been done. I personally know of serious plans to do so.
  - emteycz 6y ago
    And they're welcome to do so, as long as it's ecological it's not a problem. Geothermals (which the other poster is probably speaking about) are not an issue.
raverbashing 6y ago
Yes they aren't but compared with the consumption of non-renewable fossil-fuels I'll take the Hydro any day Depending on the place you pick you might not even need to flood too much

codenotmath 6y ago

There are many who mine on subsidized fosil fuel. Especially in argentinia.

emteycz 6y ago
And yet you label Bitcoin as the problem instead of resolving the actual problem of subsidized fossil fuel.
- Fischinn 6y ago
  Without bitcoin the problem wouldn't be to be fixed as it wouldn't be a problem. Its also not the responsibility of the world to create unlimited carbon neutral power source for bitcoin. Bitcoin needs to solve a real issue worth solving, which it doesn't.
  - emteycz 6y ago
    Or maybe "without subsidies damaging the environment there wouldn't be a problem"? We can only thank Bitcoin for uncovering it, this subsidy needs to stop ASAP. That Bitcoin didn't solve your problems doesn't mean it didn't solve real issues worth solving. Bitcoin solved the problem of quickly and cheaply moving money across the world without risking it will be lost. I was unable to move money between Africa and Europe before Bitcoin, now it's quick, cheap and reliable. Moving money between the USA and Europe also used to be problematic (took long and was expensive, at least it was reliable though), now with Bitcoin it's very easy. Since Bitcoin uses waste electricity (you will immediately loose a lot of money mining with ordinary electricity), it doesn't make anything worse - of course as long as governments don't kick the balance away.
    - Lapitotapito 6y ago
      'waste' electricity; Right. Not a single bitcoin miner in europe would use waste electricity; China banned bitcoin mining due to grid issues; So tell me again who has enough money to waste energy? Bitcoin is balanced by the energy market otherwise it will deflate. IF its becoming worthless to do that job, bitcoin can't work, therefore it will always be cost effective somehow. This still doesn't mean, that there is no better alternative.

londons_explore 6y ago

Even if that was the case, this excess power would very rarely go to waste. If bitcoin mining farms didn't pop up, then aluminium smelters would appear instead. Aluminium is pretty much electricity in a form that can be put on a truck.

tome 6y ago
Huh? How do you get the electricity back out of the aluminium? Oh, OK, I get it. Region A consumes a lot of electricity smelting aluminium. Region B has cheap electricity so a smelting company moves there and ships the aluminium to region A. Region A now has one smelting company's worth of extra electricity available.
- usrusr 6y ago
  You don't. You use the aluminium instead of aluminium from a less clean source you'd usr otherwise.
  - tome 6y ago
    Then I don't understand how "Aluminium is pretty much electricity in a form that can be put on a truck".
    - linux-user 6y ago
      It is called a "figure of speech".
      - tome 6y ago
        OK, so interpret my question as asking for an explanation of the figure of speech! It's a little bit surprising to get such pushback on a genuine question when there are substances you could describe as "electricity you can put on the back of a truck" such as hydrogen canisters and various forms of battery!

brenner100 6y ago

https://coinshares.com/research/bitcoin-mining-network-december-2019 https://coinshares.com/research/bitcoin-mining-network-decem...