7 ms·

Cambridge Bitcoin Electricity Consumption Index

37 points by cyrksoft 6y ago

monopoledance 6y ago
So, you think there will be another bubble, before Bitcoin goes out of fashion for climate reasons? I think there is definitely a future for crypto, but surely there isn't for Bitcoin.
- kinghajj 6y ago
  I don't think Bitcoin will "go out of fashion." In the long run, I believe it will "flip" the market cap of gold and become the new standard hedge against inflation. I've read reports that Bitcoin mining is already being used to subsidize green energy infrastructure. If this trend continues, then its role in making the transition from fossil fuels more economical will outweigh any temporary setbacks it has caused via increased energy consumption. I'm still not really up-to-date on Lightning Network and its potential. But even without that, I think that Bitcoin will remain dominant in the cryptocurrency space due to network effects. It has the best name recognition, the most secure PoW blockchain, and the highest capitalization. Ethereum will likely stay quite relevant, but between its migration to the less-secure PoS system, and its constant inflation rate without any cap (vs. Bitcoin's decreasing one with the 21 million cap), I think that Bitcoin will continue to be prized as a store of value.
  - ivanche 6y ago
    Anything claimed to be a hedge against inflation must have positive correlation with inflation. There are 200+ countries in the world and inflation in them is happening at different times and different rates. There's no way that gold knows which country you live at and if there's an inflation there currently.
    - monopoledance 6y ago
      Isn't that because all thing generally become cheaper with technological/economical progression (ecological debt)?
    - kinghajj 6y ago
      Well, sure, no asset will track inflation in any particular country with a perfect correlation, but the markets are pretty good at minimizing arbitrage. I'm sure Venezuelan holders of gold or cryptocurrencies appreciate its use as a hedge. https://www.goldbroker.com/charts/gold-price/ves https://www.goldbroker.com/charts/gold-price/ves
  - monopoledance 6y ago
    > subsidize green energy infrastructure. That doesn't matter really. It's just energy "wasted" with artificial challenges. The only purpose of digging for hashes is to blow energy... Bitcoin apologists ignore the fact that there are alternatives. There is just no future in that. No energy source is carbon neutral, much less resource-neutral. Western life is too wasteful, we all need to cut back. Bitcoin doesn't fit humanity's future.
- vmception 6y ago
  Well it is terrawatts of environmentally sustainable energy, so no, as it is an ESG solution thats immediately profitable, filling a void of any economical ESG solution since those haven't existed or had too many other compromises. ex. https://oilmanmagazine.com/how-and-why-natural-gas-flaring-is-being-used-to-mine-bitcoin/ https://oilmanmagazine.com/how-and-why-natural-gas-flaring-i... find a similar source that you recognize and choose to respect same is happening at hydro and wind plants. no energy that would have been sent to another purpose is being used for mining on these sites everything else is a much smaller mining operation for anyone passing by: make sure to post a reason when you disagree. A lot of people have spent a long time not considering the source of energy, and validating their existing negative thoughts on bitcoin, and this hurts their world view.
  - T-A 6y ago
    > Well it is terrawatts of environmentally sustainable energy, so no, as it is an ESG solution https://www.bloomberg.com/news/articles/2021-02-09/tesla-s-bitcoin-binge-spells-overtime-for-xinjiang-coal-miners https://www.bloomberg.com/news/articles/2021-02-09/tesla-s-b...
    - vmception 6y ago
      I estimate about 70% of bitcoin mining is ESG (clean or preventing hydrocarbons), that article suggests up to a quarter is coal. Fits.
  - monopoledance 6y ago
    > Well it is terrawatts of environmentally sustainable energy No wasting of energy is environmentally sustainable. We exhausted earth's capacity for hydroelectric dams and their "free" energy of the past will be gone, when they operate for their intended purpose of powering new settlements. And do you think bitcoin will thrive when it's all mined with iceland's geothermal monopoly? Nuclear, solar and wind are resource intense "not carbon-based" / "sustainable" technologies, but blowing away their production in unnecessary heat generation is not environmentally sustainable. 1 TW would be 71,000 upcoming SGRE 14MW(!) offshore wind turbines running at max capacity (which of course is completely unrealistic). If you line them up, that would be a wind park of about 16,000 km length, or about twice the distance between Europe and the US. Apart from all the material wasted, maintenance efforts and lives lost, I am sure earth's capacity for wind energy is limited too, as obviously winds don't produce free energy either and over exploitation may, or may not be catastrophic for earth's local climates. E.g. there are ideas to kill American hurricanes with offshore windparks, afaik. And really, the question is never, if your could operate bitcoin with "sustainable" energy production, but what else you could invest the energy in instead. Bitcoin has nothing to offer which justifies its energy demand, as there are (possible) alternatives which cost us less. Bitcoin has no future, if humanity has one.
- cwkoss 6y ago
  We are already in the midst of the most recent Bitcoin bubble.
  - monopoledance 6y ago
    No, I know. I just wonder, if this one is the last. I am following bitcoin for 11 years now. The hype seems to have vanished, it's still not useful much apart from speculation and pump and dump... But now, we also really, really need to think about climate change and wasting energy no matter the source, doesn't appear sensible to me. I think this bubble may go still a lot higher, but I am skeptical, if it will ever recover after the next crash. This is important, because it has implications for those buying in high(-ish). I think this crash could be very different. Different psychology, different positions exiting.
cwkoss 6y ago
I think arguments about electricity consumption of Bitcoin are purely a waste of energy. I know of zero people who used to like Bitcoin but are turned off by energy consumption. Bitcoin has the potential to make huge portions of the finance industry obsolete: how much energy does the finance industry as a whole use? How do we make a valid comparison? Does anyone have an amount of power consumption reduction that they think would make Bitcoin use justified for the functionality it provides? The only time I see people arguing against Bitcoin based on power consumption, it seems like the speaker already had a distaste for Bitcoin and latched onto the power consumption argument because it's easy to state and you don't have to understand the technology or economics to use the argument. There is no call to action or suggestion, it's just "See? Bitcoin is bad." I see it as just a method to mollify the insecurities and regret from not recognizing that Bitcoin was going to be valuable back when they first heard about it. If you saw a website that showed the power consumption of all internet services, would you find that to be a compelling reason to change the way you interact with the internet?
- washedup 6y ago
  Great comment, it articulates something I’ve had on the tip of my tongue but couldn’t express. Energy usage itself is not a bad thing, it’s the energy source that can be environmentally problematic. Currently 39% of mining power is driven by renewables [1]. It’s not much but a good start. The simplest solution to speed this up would be to create a law requiring that all mining must come from renewable sources (or at least tax those that don’t). It would drive innovation, jobs, and make locations with renewable sources competitive places to live. [1] https://www.jbs.cam.ac.uk/faculty-research/centres/alternative-finance/publications/3rd-global-cryptoasset-benchmarking-study https://www.jbs.cam.ac.uk/faculty-research/centres/alternati...
  - geekpowa 6y ago
    The energy usage of itself is a red herring. My issue is just how incredibly wasteful and inefficient PoW is. It's resource requirements completely disproportionate to the the underlying problem/solution space. It offends my sensibilities and aesthetic appreciation of elegance in design. It is like contemplating a trillion record bubble sort.
jude- 6y ago
As long as it's green power, who cares how much gets used? If we could put miniature 1 GW power plants in every home that were 100% renewable and didn't pollute, we would.
- paulryanrogers 6y ago
  Because resources are limited and BTC adds little to support or advance the human experience or preserve any life really. Quite the opposite as people in Iran suffer blackouts.
  - NeutronStar 6y ago
    So it's bitcoins fault Iran has blackouts now?
  - jude- 6y ago
    BTC has nothing to do with the incompetence of Iran's government.
    - paulryanrogers 6y ago
      BTC amplifies the dysfunction in the iranian government through its energy hungry incentives. I'd say that's more than nothing, regardless of intent.
      - jude- 6y ago
        Government competence means hiring officials that do not allow the misappropriation of the people's resources, no matter the upside. It also means structuring the incentives for being official such that doing the right thing is incentive-compatible (i.e. if you steal power, you have to pay it back, go to jail for a while, and get banned from future government work). If the Iranian government was competent, it wouldn't matter whether or not BTC exists or how valuable it was -- it wouldn't be trying to mine it in the first place. Governments shouldn't be so fragile that the mere existence of Bitcoin poses such an existential risk to the wellbeing of the people.
widdakay 6y ago
I found it interesting also to look at kwh per transaction. Several places claim that in early 2020 bitcoin used ~700kwh per transaction (https://www.statista.com/statistics/881541/bitcoin-energy-consumption-transaction-comparison-visa/ https://www.statista.com/statistics/881541/bitcoin-energy-co...), and this equates to about 2700 miles of driving a Tesla Model 3 at the rated consumption of 257wh/mi which is plain a ton (and also is about 1 month of solar production from my house's rooftop solar). With Tesla now accepting bitcoin, this means you can add ~2.7k miles of emissions to the car without even driving it, and probably even more since they have to move the money afterwards. Edit: Don't forget about ewaste also. Some quick math and assuming a 2 year lifetime says that each miner can contribute 10-20 transactions. This is why I think proof of stake is a better way to go.
- imtringued 6y ago
  kwh per transaction is meaningless though. It's purely a function of how much a person is willing to pay in transaction fees + Block rewards on top.
hndamien 6y ago
If you price carbon for energy production, all industries are incentivised to move clean. Bitcoin miners would love it. This argument is a complete red herring.
- imtringued 6y ago
  Bitcoin/cryptocurrency mining is highly mobile though. It's just a bunch of ASICs/GPUs in a room with cheap power and crappy internet. If carbon prices change or get introduced you can just move your mining rigs to a different country.

37 points by cyrksoft 6y ago

So, you think there will be another bubble, before Bitcoin goes out of fashion for climate reasons? I think there is definitely a future for crypto, but surely there isn't for Bitcoin.

kinghajj 6y ago
I don't think Bitcoin will "go out of fashion." In the long run, I believe it will "flip" the market cap of gold and become the new standard hedge against inflation. I've read reports that Bitcoin mining is already being used to subsidize green energy infrastructure. If this trend continues, then its role in making the transition from fossil fuels more economical will outweigh any temporary setbacks it has caused via increased energy consumption. I'm still not really up-to-date on Lightning Network and its potential. But even without that, I think that Bitcoin will remain dominant in the cryptocurrency space due to network effects. It has the best name recognition, the most secure PoW blockchain, and the highest capitalization. Ethereum will likely stay quite relevant, but between its migration to the less-secure PoS system, and its constant inflation rate without any cap (vs. Bitcoin's decreasing one with the 21 million cap), I think that Bitcoin will continue to be prized as a store of value.
- ivanche 6y ago
  Anything claimed to be a hedge against inflation must have positive correlation with inflation. There are 200+ countries in the world and inflation in them is happening at different times and different rates. There's no way that gold knows which country you live at and if there's an inflation there currently.
  - monopoledance 6y ago
    Isn't that because all thing generally become cheaper with technological/economical progression (ecological debt)?
  - kinghajj 6y ago
    Well, sure, no asset will track inflation in any particular country with a perfect correlation, but the markets are pretty good at minimizing arbitrage. I'm sure Venezuelan holders of gold or cryptocurrencies appreciate its use as a hedge. https://www.goldbroker.com/charts/gold-price/ves https://www.goldbroker.com/charts/gold-price/ves
- monopoledance 6y ago
  > subsidize green energy infrastructure. That doesn't matter really. It's just energy "wasted" with artificial challenges. The only purpose of digging for hashes is to blow energy... Bitcoin apologists ignore the fact that there are alternatives. There is just no future in that. No energy source is carbon neutral, much less resource-neutral. Western life is too wasteful, we all need to cut back. Bitcoin doesn't fit humanity's future.
vmception 6y ago
Well it is terrawatts of environmentally sustainable energy, so no, as it is an ESG solution thats immediately profitable, filling a void of any economical ESG solution since those haven't existed or had too many other compromises. ex. https://oilmanmagazine.com/how-and-why-natural-gas-flaring-is-being-used-to-mine-bitcoin/ https://oilmanmagazine.com/how-and-why-natural-gas-flaring-i... find a similar source that you recognize and choose to respect same is happening at hydro and wind plants. no energy that would have been sent to another purpose is being used for mining on these sites everything else is a much smaller mining operation for anyone passing by: make sure to post a reason when you disagree. A lot of people have spent a long time not considering the source of energy, and validating their existing negative thoughts on bitcoin, and this hurts their world view.
- T-A 6y ago
  > Well it is terrawatts of environmentally sustainable energy, so no, as it is an ESG solution https://www.bloomberg.com/news/articles/2021-02-09/tesla-s-bitcoin-binge-spells-overtime-for-xinjiang-coal-miners https://www.bloomberg.com/news/articles/2021-02-09/tesla-s-b...
  - vmception 6y ago
    I estimate about 70% of bitcoin mining is ESG (clean or preventing hydrocarbons), that article suggests up to a quarter is coal. Fits.
- monopoledance 6y ago
  > Well it is terrawatts of environmentally sustainable energy No wasting of energy is environmentally sustainable. We exhausted earth's capacity for hydroelectric dams and their "free" energy of the past will be gone, when they operate for their intended purpose of powering new settlements. And do you think bitcoin will thrive when it's all mined with iceland's geothermal monopoly? Nuclear, solar and wind are resource intense "not carbon-based" / "sustainable" technologies, but blowing away their production in unnecessary heat generation is not environmentally sustainable. 1 TW would be 71,000 upcoming SGRE 14MW(!) offshore wind turbines running at max capacity (which of course is completely unrealistic). If you line them up, that would be a wind park of about 16,000 km length, or about twice the distance between Europe and the US. Apart from all the material wasted, maintenance efforts and lives lost, I am sure earth's capacity for wind energy is limited too, as obviously winds don't produce free energy either and over exploitation may, or may not be catastrophic for earth's local climates. E.g. there are ideas to kill American hurricanes with offshore windparks, afaik. And really, the question is never, if your could operate bitcoin with "sustainable" energy production, but what else you could invest the energy in instead. Bitcoin has nothing to offer which justifies its energy demand, as there are (possible) alternatives which cost us less. Bitcoin has no future, if humanity has one.
cwkoss 6y ago
We are already in the midst of the most recent Bitcoin bubble.
- monopoledance 6y ago
  No, I know. I just wonder, if this one is the last. I am following bitcoin for 11 years now. The hype seems to have vanished, it's still not useful much apart from speculation and pump and dump... But now, we also really, really need to think about climate change and wasting energy no matter the source, doesn't appear sensible to me. I think this bubble may go still a lot higher, but I am skeptical, if it will ever recover after the next crash. This is important, because it has implications for those buying in high(-ish). I think this crash could be very different. Different psychology, different positions exiting.

cwkoss 6y ago

I think arguments about electricity consumption of Bitcoin are purely a waste of energy. I know of zero people who used to like Bitcoin but are turned off by energy consumption. Bitcoin has the potential to make huge portions of the finance industry obsolete: how much energy does the finance industry as a whole use? How do we make a valid comparison? Does anyone have an amount of power consumption reduction that they think would make Bitcoin use justified for the functionality it provides? The only time I see people arguing against Bitcoin based on power consumption, it seems like the speaker already had a distaste for Bitcoin and latched onto the power consumption argument because it's easy to state and you don't have to understand the technology or economics to use the argument. There is no call to action or suggestion, it's just "See? Bitcoin is bad." I see it as just a method to mollify the insecurities and regret from not recognizing that Bitcoin was going to be valuable back when they first heard about it. If you saw a website that showed the power consumption of all internet services, would you find that to be a compelling reason to change the way you interact with the internet?

washedup 6y ago
Great comment, it articulates something I’ve had on the tip of my tongue but couldn’t express. Energy usage itself is not a bad thing, it’s the energy source that can be environmentally problematic. Currently 39% of mining power is driven by renewables [1]. It’s not much but a good start. The simplest solution to speed this up would be to create a law requiring that all mining must come from renewable sources (or at least tax those that don’t). It would drive innovation, jobs, and make locations with renewable sources competitive places to live. [1] https://www.jbs.cam.ac.uk/faculty-research/centres/alternative-finance/publications/3rd-global-cryptoasset-benchmarking-study https://www.jbs.cam.ac.uk/faculty-research/centres/alternati...
- geekpowa 6y ago
  The energy usage of itself is a red herring. My issue is just how incredibly wasteful and inefficient PoW is. It's resource requirements completely disproportionate to the the underlying problem/solution space. It offends my sensibilities and aesthetic appreciation of elegance in design. It is like contemplating a trillion record bubble sort.

jude- 6y ago

As long as it's green power, who cares how much gets used? If we could put miniature 1 GW power plants in every home that were 100% renewable and didn't pollute, we would.

paulryanrogers 6y ago
Because resources are limited and BTC adds little to support or advance the human experience or preserve any life really. Quite the opposite as people in Iran suffer blackouts.
- NeutronStar 6y ago
  So it's bitcoins fault Iran has blackouts now?
- jude- 6y ago
  BTC has nothing to do with the incompetence of Iran's government.
  - paulryanrogers 6y ago
    BTC amplifies the dysfunction in the iranian government through its energy hungry incentives. I'd say that's more than nothing, regardless of intent.
    - jude- 6y ago
      Government competence means hiring officials that do not allow the misappropriation of the people's resources, no matter the upside. It also means structuring the incentives for being official such that doing the right thing is incentive-compatible (i.e. if you steal power, you have to pay it back, go to jail for a while, and get banned from future government work). If the Iranian government was competent, it wouldn't matter whether or not BTC exists or how valuable it was -- it wouldn't be trying to mine it in the first place. Governments shouldn't be so fragile that the mere existence of Bitcoin poses such an existential risk to the wellbeing of the people.

widdakay 6y ago

I found it interesting also to look at kwh per transaction. Several places claim that in early 2020 bitcoin used ~700kwh per transaction (https://www.statista.com/statistics/881541/bitcoin-energy-consumption-transaction-comparison-visa/ https://www.statista.com/statistics/881541/bitcoin-energy-co...), and this equates to about 2700 miles of driving a Tesla Model 3 at the rated consumption of 257wh/mi which is plain a ton (and also is about 1 month of solar production from my house's rooftop solar). With Tesla now accepting bitcoin, this means you can add ~2.7k miles of emissions to the car without even driving it, and probably even more since they have to move the money afterwards. Edit: Don't forget about ewaste also. Some quick math and assuming a 2 year lifetime says that each miner can contribute 10-20 transactions. This is why I think proof of stake is a better way to go.

imtringued 6y ago
kwh per transaction is meaningless though. It's purely a function of how much a person is willing to pay in transaction fees + Block rewards on top.

hndamien 6y ago

If you price carbon for energy production, all industries are incentivised to move clean. Bitcoin miners would love it. This argument is a complete red herring.

imtringued 6y ago
Bitcoin/cryptocurrency mining is highly mobile though. It's just a bunch of ASICs/GPUs in a room with cheap power and crappy internet. If carbon prices change or get introduced you can just move your mining rigs to a different country.