11 ms·
Bitcoin's fundamental value is negative given its environmental impact
- pjfin123 6y agoI wonder if Bitcoin could ever migrate to Ethereum technology/proof of stake? It seems like a good idea but the Bitcoin community seems very resistant to change (see block size debate).
- wmf 6y agoBitcoin will never change. In the future we'll probably see large amounts of BTC wrapped on Ethereum/Avalanche for DeFi trading.
- thebean11 6y agoBitcoin has undergone pretty massive updates in the last few years. Proof of stake doesn't seem that far fetched honestly.
- cesarb 6y agoAFAIK, none of the Bitcoin updates in the last few years is a "hard fork", that is, old nodes can still process valid blocks made by new nodes (though they might accept blocks which new nodes would reject). Changing from proof of work to proof of stake would require a hard fork.
- suikadayo 6y agoWe’re already seeing more wrapped BTC on Ethereum, than there is BTC on Lightning, so that’s very telling.
- wmf 6y agoThat makes sense; people want to hodl or trade, not spend.
- iwubu99 6y agoYup, proof of stake is the simple solution to this. BTC community won't be able to justify it eventually. Unless we get free energy in the mean time lol
- gwillen 6y agoEthereum hasn't even migrated to "Ethereum technology". They have been claiming for years that they are planning to move from Proof of Work to Proof of Stake. Maybe someday they will. My take on this: I remain unconvinced that any form of Proof of Stake can give the same security properties we easily get from Proof of Work. I won't say never, but getting Bitcoin to move would take a very convincing argument about the viability of PoS, and so far that's not happening. (Especially given that the poster child for PoS does not actually _use_ PoS yet, they just keep promising it "soon".)
- suikadayo 6y agoEth2 with PoS is already running with Phase 0 on mainnnet though. https://beaconcha.in/ https://beaconcha.in/ The merge from Eth1 to Eth2 is expected to happen this year or after. There shouldn’t be any significant delays now because Phase 0 was the biggest hurdle with research and technical dependencies that didn’t exist yet, like BLS signatures. There’s no way Bitcoin will move to PoS without another contentious fork.
- avmich 6y agoIf the price of energy is calculated with corresponding carbon tax included, shouldn't Bitcoin be neutral?
- wmf 6y agoThat would be true after a carbon tax exists.
- westurner 6y ago> If the price of energy is calculated with corresponding carbon tax included, shouldn't Bitcoin be neutral? Yes, but there are vastly more energy efficient substitute DLTs with near-zero switching costs. Litecoin and scrypt (instead of AES256), for example. Apply a USD/kWhr threshold across all industries. Is this change (and focus on the external costs of energy production) more the result of penalties or incentives? Pre-mined coins are vastly more energy efficient (with tx costs <1¢ and similarly minimal kWhr/tx costs), but the market doesn't trust undefined escrow terms that are fair game in commodities and retail markets. We have trouble otherwise storing energy from noon to commute and dinner time; whereas a commodity like grain may keep for quite awhile. Bitcoin serves as a demand subsidy when heavily-subsidized energy prices crash due to oversupply (that we should recognize as temporary because we are moving to electric vehicles and we need to reach production volumes so that, in comparison to alternatives, renewables are now more cost effective) In the US, we have neither carbon taxes nor intraday prices. The EU has carbon taxes and electrical energy markets.
- ourlordcaffeine 6y ago>In the US, we have neither carbon taxes nor intraday prices. Like, no intraday electricity market?
- sjtindell 6y agoI’m biased but I wonder whether these outlets write more about Bitcoin hurting the environment than oil companies and other energy producers pushing back so hard on alternative energy.
- dubcanada 6y agoYes, articles tend to go in groups. Everyone focuses on one topic and then changes. At the moment the topic seems to be Bitcoin, since it's currently skyrocketing due to Tesla. But don't worry, they will return to gas/oil soon.
- frongpik 6y agoThe elephant in the room is Adtech. It wastes obscene amounts of energy, mostly coal mines, and it's only going to waste more with the growth of the economy and the increasing competition between advertisers.
- oarabbus_ 6y agoVideo gaming has more environmental impact than bitcoin. So do porn sites. Bitcoin just seems like an easy target because people are more directly profiting off of it.
- luhn 6y agoSource? All these whatabout takes I've seen compare the sum total of some hugely popular activity to the relatively small userbase of Bitcoin. I'm highly skeptical Bitcoin would compare favorably on a per-user basis.
- minikites 6y agoVideo games and porn sites serve some purpose. Bitcoin is virtual Monopoly money for libertarians.
- recursive 6y ago> Bitcoin is [...] That's a purpose.
- a1369209993 6y agoBitcoin's purpose is to provide a global append-only (ie, non-censorable) database. It doesn't actually serve that purpose, but that's true of, eg, 'free'-to-play mobile games as well.
- wmf 6y agoGaming and computer hardware is ruthlessly optimized to be as energy-efficient as possible while Bitcoin mining is specifically designed to waste energy even though more efficient ways (PoS) exist. Cable boxes used to waste massive amounts of energy (because GI/SA don't pay your power bill) and eventually the government stepped in to force efficiency. So no, Bitcoin isn't being unfairly singled out for criticism.
- thebean11 6y agoBitcoin mining does not waste energy in the same way cable boxes did. The more energy is "wasted" the more secure the network is. This isn't an argument that it's worth the energy expenditure, or that there aren't alternate ways to get the same level of security, but it's an apples and oranges comparison.
- kerng 6y agoBitcoin could be using clean energy in future (at least there is the opportunity for it) - maybe Tesla does something in this place. Regular finance, banks and money printing are also using a lot of resources. Why does the article not attempt to compare these? Seems more of an opportunistic write up, than an in depth analysis of the problem space. I guess news outlets also have to ride the hype whenever it happens.
- kaonwarb 6y agoFor this critique to be meaningful, it should compare vs. alternative approaches of storing and transferring value - including cash, which can’t possibly be environmentally friendly. Not just in production, but storage, transfer (I wonder what the MPG is on those Brinks trucks), and so forth. I suspect Bitcoin still comes out behind, but at least it would be a meaningful comparison.
- grumple 6y ago"Cash" is usually just 1s and 0s these days, at least in the US, isn't it? It doesn't require mining, unlike bitcoin.
- chordalkeyboard 6y agoNo, we use physical money all the time.
- mrits 6y agoWhat do you use physical money for?
- ChuckNorris89 6y agoIn my area of Europe: Buying things at stores and shops that don't take card payments for one. Buying weed for another. Buying/selling small things in person, think garage sales, or even buying second hand cars.
- bufferoverflow 6y agoMost bitcoin mining is done with hydro or solar electricity, because it's either very cheap or free. Both are renewable. And even if it wasn't, who are we too tell people how to spend their energy? What we really need is a proper carbon tax.
- nipponese 6y agoSource?
- stouset 6y agoEven if we accept this argument at face value, every Watt-hour of hydro or solar that goes to mining Bitcoin could have been used to reduce demand for power generated from fossil fuels. Power generation isn't perfectly fungible, but it's enough so that this argument falls completely on its face. I wish people would stop making it. Bitcoin is an environmental disaster.
- chordalkeyboard 6y ago> Watt-hour of hydro or solar that goes to mining Bitcoin could have been used to reduce demand for power generated from fossil fuels. No, that power would have gone to reducing the price of power and people would have found new uses for it. https://en.wikipedia.org/wiki/Jevons_paradox https://en.wikipedia.org/wiki/Jevons_paradox
- wmf 6y agoI love the Jevons paradox but it has limits. Per capita energy consumption in the US peaked in 1979 and has dropped 14% in the last 20 years. https://www.eia.gov/totalenergy/data/browser/index.php?tbl=T01.07#/?f=M&start=200001 https://www.eia.gov/totalenergy/data/browser/index.php?tbl=T...
- chordalkeyboard 6y agoIn the context of Jevons, wouldn’t that explain why we have bitcoin?
- nipponese 6y agoWhy is mining the only factor here? All currency has a quantifiable velocity of economic value, and that economy has environmental impact.
- deleted 6y ago[deleted]
- consumer451 6y agoYes, and my understanding is that neither metric favors bitcoin.
- Me1000 6y agoMy problem with these takes is that they're missing the forest through the trees. I don't believe you'll ever be able to solve climate change by shaming people based on their usage of electricity. The problem is not HOW people use electricity, it's how the electricity itself is generated. The electricity might be used to draw triangles on my screen, hash some value, keep me warm in my apartment, or make my car move; each of those things might be objectionable to someone. Ever since humans learned to harness electricity our usage has increased, and with it our quality of life has also increased. That's not going to change. The only way to prevent electricity usage from causing climate change is to regulate emissions themselves (either through carbon taxes or outright bans: that's for regulators to decide) and invest in alternative forms for electricity generation (that includes nuclear).
- paulgb 6y agoThis would be a reasonable stance if Bitcoin were just another activity, but it’s unique in its energy profile. What other technology is designed so that energy efficiency improvements are absorbed and nullified (through the difficulty adjustment mechanism)?
- stouset 6y agoPrecisely. Without Bitcoin, we could be retiring coal plants with the additional solar and wind that have been coming online. Instead, every additional Watt-hour we generate is used to mine Bitcoin on top of existing demand.
- lai-yin 6y agoThat's an absurd argument. And as long as we're using solar and wind, we'll need backup from coal, gas and nuclear for when the sun isn't shining and the wind isn't blowing. If you think increasing battery capacity will solve that, read up on the supply chain of lithium.
- dragontamer 6y ago
- Mindless2112 6y agoInternet advertising's fundamental value is negative given its environmental (not to mention psychological and sociological) impact. So can we get rid of ads?
- frongpik 6y agoSomeone needs to pay businessinsider to make an article against ads. And such an article could be sponsored by... nobody.
- nprz 6y agoThis is the 3rd story I've seen on the front page today about the environmental impact of mining BTC. Interesting.
- nemo44x 6y agoI’m thinking a decent amount of people missed the boat on it, are currently seeing the reality of the new economy unfolding and realizing they aren’t going to be one of the winners in it. And that their power games don’t work here. I think what scares some well connected people that could use politics to influence things is that the people who got behind this revolution don’t need them now. We chose not to play that game anymore and made a new game that doesn’t care about the rules they (the well connected in journalism, universities, think tanks, lobbies, corporations, activists, etc) corrupted. You have to understand what a threat this is as millions of individuals will be able to more or less remove themselves from the system and just not participate in their political power game. Financial independence is a threat.
- frongpik 6y agoSomeone's really serious about pushing the "bitcoin is bad" narrative. Too many articles like that recently. Nevertheless, upvoting because HN should see this.
- tppiotrowski 6y agohttp://www.paulgraham.com/submarine.html http://www.paulgraham.com/submarine.html
- thatguy0900 6y agoI mean is it not a good narrative to push? Someone in another comment pointed out each transaction uses so much energy it would be more effecient to just drive 600 miles in a tesla to hand deliver them money. That is awful, and basically for no reason, a digital currency could be designed without that entirely. There is no way to fix it, as proof of work demands that much energy be used no matter how effecient computers become.
- frongpik 6y agoAn important nuance: such a bitcoin transaction is worth about a billion dollars. It's not a grocery store kind of transaction.
- fl0wenol 6y agoThat's also a separate issue, it _also_ requires trusted 3rd parties to broker small, everyday transactions, which has it's own costs (energy and otherwise) and fundamentally requires some centralization and/or escrow, which kind of defeats the purpose.
- hannob 6y agoMaybe it's, you know, people caring about a livable planet. The "Big survival of humanity" lobby.
- insert_coin 6y ago
- AlexandrB 6y agoI'm a Bitcoin skeptic, but mentioning "fundamental value" when talking about currency seems incongruous. The "fundamental value" of bitcoin is whatever people think it's worth. Just like USD.
- jes 6y agoI agree with your example. I think the problem, though, is with the concept of value itself. To my knowledge, the value of something is necessarily a personal assessment that individuals 1) make for themselves and 2) by a process that they do not and can not fully comprehend.
- insert_coin 6y agoPrice is what you pay but value is what you get. As Warren Buffett (I think) once said.
- ur-whale 6y agoThe "fundamental value" of anything is whatever people think it's worth. I have a very hard time understanding why people can't wrap their heads around this very basic concept. It's just a restatement of the law of supply and demand.
- defen 6y agoCurrency is a special case of this because most other things have some sort of inherent-use value independent of what someone will pay you for it. In other words, for most things, even if the most someone will pay you for it is $0, it may still be useful to you for some reason and therefore not worth giving it away for free.
- unethical_ban 6y agoI think there is some nuance. The fundamental value of wheat is linked to its ability to feed people. In other words, it has concrete qualitative value to human existence, with natural scarcity. BTC's scarcity is set by algorithm and BTC provides no value other than being a store for value. USD's scarcity is set by the printers and databases at the Federal Reserve, and its value is derived from the faith that the US economy and government will honor its value.
- washedup 6y agoBitcoin can be carbon neutral but it has a long way to go. 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 use 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...
- deleted 6y ago[deleted]
- tppiotrowski 6y agoI think BTC mining provides a needed incentive to invest renewable power. You have a customer that needs infinite electricity and they’re okay if supply is not 100% available as long as the price is low. In the future I hope we use this supply for something else but in the short term it solves the issue of no one wanting to invest in and improve renewables.
- srib 6y agoI am a strong believer of voting with your wallet. Don't like something? Build something better. Opinions in news media are worthless.
- insert_coin 6y agoBitcoin or anything really should be allowed to use however much energy it is economically feasible. The real question is, why is there no better use for that electricity than to compute numbers? How our economies became so stagnant the best return for capital investment is bitcoin? Bitcoin was designed in part as a challenge to the monetary system, but it has ended up shining a light onto a much bigger problem: the economy itself is broken, it is sick, energy usage is just one of the symptoms. Resources in most industries are being wasted so much investors see no value in generating 'real' productivity. Hence the demand for cryptocurrencies.
- deleted 6y ago[deleted]
- monkeydust 6y agoIs bitcoin able to alter its approach from POW to POS or something else? If so how might that work?
- yrral 6y agoThis is a rehash of a previous post of mine regarding electricity consumption. Just wanted to repost this to get more eyeballs and critiques: Back in the days where all our electricity came from fossil fuels, I completely agree that marginal electricity usage was bad for the environment. However I think that thought has persisted with us even though it is no longer true 100% of the time. With renewables sometimes the marginal cost of electricity to our environment is near 0 or even negative (eg, during periods of higher winds and lower demand.) I predict that in the future as bitcoin mining becomes more and more of an efficiency game that you will see bitcoin mining be kind of a load balancer the grid, effectively turning off during peak demand (or low supply) times and contributing to the base load during regular times. For example, it may even help the economics of building new wind plants. Eg, currently it may not be profitable to build a new wind plant because base load is too low that the excess power generated would need to be sold off at 0 or even negative prices. However if bitcoin mining could be turned on during these times and off during periods of high demand, there will need to be fewer peaker plants in operation and it would positively affect the economics of opening a new wind plant. Bitcoin mining only cares about the cost of electricity at a given time, it is not like most other electricity demands that are very time based. With the large variance of electricity generation by renewables, I think bitcoin can in the future help smooth demand according to the real supply/demand curve. It's kind of like a different implementation of the Tesla utility grid batteries. Instead of deploying power, you force the grid to build more renewable capacity (that the miners are paying for) that you use except in peak periods, where you turn off and effectively provide the grid with more power. Here are 2 articles of a bitcoin mining company doing just this: https://www.bloomberg.com/news/articles/2020-09-01/bitcoin-miner-is-scoring-700-profits-selling-energy-to-grid https://www.bloomberg.com/news/articles/2020-09-01/bitcoin-m... https://www.forbes.com/sites/christopherhelman/2020/05/21/how-this-billionaire-backed-crypto-startup-gets-paid-to-not-mine-bitcoin/?sh=1a6f86e97596 https://www.forbes.com/sites/christopherhelman/2020/05/21/ho...
- tomjen3 6y agoI love the angle these attacks on BTC has been taking lately, it really seems somebody is getting desparate for it not to succeed. This however seems a particularly bad attack on BTC, because we are not (spoilers) going to be able to to solve global warming, or even to mitigate it much. That ship has sailed, if it ever existed at all.
- unethical_ban 6y agoMore likely to be coincidence than malice, but after crypto got some positive attention through tweets and dogecoin, I wonder if these negative stories are a push against it in order to suppress their value.
- gegtik 6y agoI think its wild that when the absurd energy consumption curve of bitcoin used to be brought up the defense was "you're blowing it out of proportion", whereas now it's "so what.. don't you have a fridge?" (Same pattern I recall about climate change, ice caps melting, etc. Deny until it's impossible and then dismiss instead)
- dang 6y agoThe other thread (which now points to the original source) is here: https://news.ycombinator.com/item?id=26091536 https://news.ycombinator.com/item?id=26091536. There are paywall workarounds posted in the comments. I don't know if it makes sense to merge these threads, because the point about environmental impact is mostly just a side comment in the original article.
- thysultan 6y ago>$44,000
- BTCOG 6y agoThe USD and all the banks must really have some serious negative value if this farce is to be believed. What about automobiles? I won't go on, so tired of this phony narrative. Things cost electricity and money to create. Has anyone tried to add up the power consumption of all the banks collective offices total power consumption? Just to manage money hmmm? This is a blatant smear campaign as Bitcoin gains popularity. I'm genuinely curious to know how much power is being used for things like machine learning (tons) and AWS hosting and various other large power consumers and what "value" they have vs, anything else. Edit: I know I said I won't go on, but I started thinking about total power consumption from Netflix and all streaming servers, the load, the bandwidth etc because I'm quite familiar with how much a datacenter full of video streaming/conversion servers can pull. All just so people can sit at home totally unproductive sapping up bandwidth and power through multiple points.
- thecrash 6y agoAs a miner, I'm running a machine that takes electricity as input and outputs bitcoin. Since I have to pay for the electricity in dollars, and since I sell the bitcoin for dollars, I'm actually operating a machine that takes dollars as input and outputs dollars. As long as I get more than a dollar out for every dollar I put in, I basically want to put as much money through the machine as it can handle, and I want to build as many more machines as I can afford. That will only change if the $ input:output ratio drops below 1. If the cost of electricity goes up, my ratio suffers. I have to pay more to get the same amount of bitcoin out. If the price of bitcoin goes down, my ratio suffers. I get less dollars out for the same input. If you want me to burn less electricity, you need at least one of those two things to happen: Increase my electricity cost or decrease the price of bitcoin. You may be rolling your eyes at the obviousness of this. That's because all industrial capitalism operates this way. You put money in to pay for power (to extract resources and fabricate), and you get money out the other end when you sell your product. The "use value" of the product never comes into it for the capitalist. All that matters is what it costs to produce vs what someone will pay at the end. You may say "but industrial capitalism produces actually useful things like food and clothes" but when it does, that's just coincidental! The situation with bitcoin isn't unique, it just illustrates the phenomenon especially elegantly: the economy does not care whether it's producing useful things or destroying humanity. It only cares if the math works.
- rorykoehler 6y agoFIAT is backed by the military. The countless wars to maintain hegemony are surely very environmentally destructive. Has anyone done a comparison study between the US dollar and Bitcoin from this environmental perspective? Edit: I looked it up on Wikipedia and found this: >In FY 2006, the DoD used almost 30,000 gigawatt hours (GWH) of electricity, at a cost of almost $2.2 billion. The DoD's electricity use would supply enough electricity to power more than 2.3 million average American homes. In electricity consumption, if it were a country, the DoD would rank 58th in the world, using slightly less than Denmark and slightly more than Syria (CIA World Factbook, 2006).[1] The Department of Defense uses 4,600,000,000 US gallons (1.7×1010 L) of fuel annually, an average of 12,600,000 US gallons (48,000,000 L) of fuel per day. A large Army division may use about 6,000 US gallons (23,000 L) per day. According to the 2005 CIA World Factbook, if it were a country, the DoD would rank 34th in the world in average daily oil use, coming in just behind Iraq and just ahead of Sweden. https://en.m.wikipedia.org/wiki/Energy_usage_of_the_United_States_military https://en.m.wikipedia.org/wiki/Energy_usage_of_the_United_S...