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Bitcoin network average energy consumption per transaction compared to VISA
- bigphishy 6y agoFor the love of god, we get it. What are no-coiners going to complain about when ethereum moves to proof of stake?
- UncleMeat 6y agoWe will keep complaining about BTC, since it continues to cause a huge number of unnecessary CO2 emissions.
- tedunangst 6y agoPerhaps the people saying is pow is bad want to see the transition to pos?
- gcbirzan 6y agoThat it's still useless.
- bigphishy 6y agoI can see this is a productive conversation.
- rspeele 6y agoMostly the price of jetpack fuel and all the pigs I keep running into during my sky-commute.
- zepto 6y agoBitcoin and Ethereum are two different things.
- ddtaylor 6y agoIt's worth mentioning that this kind of comparison is strange. Bitcoin mining does not get more difficult or change in any way with the number of transactions you mine. Mining always occurs on a single 80-byte header, and the entire transaction portion of that is a Merkle hash tree. The point here is that if Bitcoin would actually finally increase the block size of their chain (like Bitcoin Cash and others have done) then a.) there wouldn't be a constant backlog of transactions and b.) the "energy-per-tx" graph like this would look better.
- rspeele 6y agoWhat is the correct block size for a PoW cryptocurrency?
- ddtaylor 6y agoThat's almost like asking "what is the correct number of sushi restaurants for a city?" The answer is a function of the marketplace. In the case of cryptocurrencies, the answer is likely a combination of what miners and users can support. The goal is to be large enough that we don't have throughput problems and block space doesn't become a bidding war. It's also worth mentioning that this doesn't mean the end-users have to be able to run nodes themselves or on mobile phones, since that makes use of a process called Simple Payment Verification (SPV) where they only process block headers and get the blocks they are interested in, but still verify the consensus of the network. But, it also depends on what you see cryptocurrencies as. If you want them to replace traditional cash and create a "digital cash" world, then you want to see them accepted and used anywhere at a very large scale. In that world-view you have millions of transactions regularly and miners get paid with the sum of lots of small fees. However, if you think that cryptocurrencies should only be used as a speculative asset or as a "digital gold" then you don't care much about it actually being transacted, and in that case fees as high as $50/tx are fine because you don't have any expectation that the world will be using it at scale.
- rspeele 6y agoBut wouldn't we always want block space to be at least a little bit of a bidding war? After all anything I add to the blockchain is stored permanently and massively georeplicated. Miners don't have to store the full chain, end users don't need to store the full chain, but somebody has to store it. Seems like those people, the people running full nodes, should have the final say on how big the blocks are and therefore what the throughput of the network is. I guess in reality, they do, since they decide which fork to run. Right?
- obilgic 6y agoHow about all the people work for Visa etc and their commutes and all the other things that come with it. If you think about it Bitcoin is completely autonomous
- JumpCrisscross 6y ago> Bitcoin is completely autonomous If we're counting the footprint of Visa's 19,500 employees [1], we'd have to start counting the footprint of every Bitcoin miner and ASIC manufacturer. Which is (a) silly and (b) unlikely to affect a difference of orders of magnitude. [1] https://en.wikipedia.org/wiki/Visa_Inc https://en.wikipedia.org/wiki/Visa_Inc.
- obilgic 6y ago> the footprint of every Bitcoin miner Do they have 1000s of office all around the world with 100s of thousands working in offices and branches like banking industry?
- JumpCrisscross 6y ago> Do they have 1000s of office all around the world with 100s of thousands working in offices and branches like banking industry? Banking does a lot more than payments. Most people working at banks do not work on payments.
- Rebelgecko 6y agoBased off of current GPU availability (which isnt mining bitcoin per se but is) does cover coins which are comparable) I would say no, Bitcoin probably has more physical locations and more people involved
- deleted 6y ago[deleted]
- 627467 6y agoBut visa doesn't provide most of the functions of bitcoin infrastructure. Visa does need to hold the balance of my account. Visa does need or make available all of my equity worth of assets for me to transfer. Visa does not custody my assets. This is literally apple to oranges (or visa to bitcoin)
- mjparrott 6y agoapples and oranges
- deleted 6y ago[deleted]
- johndevor 6y agoThe lightning network will naturally grow as a result of this.
- mplewis 6y agoI'll believe that when the lightning network is usable.
- rspeele 6y agoThere's no way to measure either directly, but I bet Lightning network has been used an order of magnitude more times to handwave Bitcoin's scaling issues in internet discussions, than it has been used to actually transfer money. I went through a bitcoin phase in mid 2017 and that's what we used it for back then. Lightning network adoption is just around the corner! It'll solve high fees and do billions of transactions per day!
- spaced-out 6y agoThe link doesn't state whether it's counting only the energy costs incurred by VISA, or if it includes the energy costs of making a transaction on the SWIFT payment network that VISA, Mastercard, banks, and other institutions run on top of. Obviously to do a fair comparison you have to take SWIFT into account, otherwise you're not capturing the true energy cost of making a VISA payment. https://www.investopedia.com/articles/personal-finance/050515/how-swift-system-works.asp https://www.investopedia.com/articles/personal-finance/05051...
- 101008 6y agoIf you add every layer above or below you would end up consdering the own internet infrastructure, wouldn't you?
- JumpCrisscross 6y ago> to do a fair comparison you have to take SWIFT into account The difference is orders of magnitude. SWIFT won't cross the gap. Bitcoin has a lot of things going for it. Energy efficiency isn't one of them.
- EthicalHacker03 6y agoVISA (or Mastercard) do not 'run on top of' SWIFT. The net position of each VISA/MC institution will be transferred with SWIFT, but this is one payment with potentially millions of underlying card transactions.
- JumpCrisscross 6y ago> will be transferred with SWIFT Nitpick: nothing gets transferred with SWIFT. SWIFT is a messaging service. Settlement happens on separate rails.
- tmcw 6y agoIf they factored in the other-bank transaction costs, there'd be something else to "what-about." What about the company's energy costs in its non-payment processing? How about all the plastic they use to make those credit cards? The silicon in the card swipe machine? None of these things will bridge that gap, unveiling a missing data point that somehow makes VISA less efficient by six magnitudes that somehow researchers were missing all this time. But constantly asking for more detail is a good way to stay in denial about Bitcoin's terrible numbers.
- vonsydov 6y agoHow about the energy footprint of all the people that work for Visa ?
- supernova87a 6y agoYeah, but does this compare the cost of creation of the currency? Isn't that what's (fallaciously) being compared here? How much does it cost to create a US dollar, to be able to have transactions with it? Did it take 100 years of faith in the US credit to establish that? How much energy was that?
- tmcw 6y agoIt costs about 16 cents to make a $20 bill. https://www.federalreserve.gov/faqs/currency_12771.htm https://www.federalreserve.gov/faqs/currency_12771.htm In truth, if I factor in the establishment of the United States and several hundred years of money policy, it'll be higher. But for a fair comparison with Bitcoin, that'd be unfair, right? Because the US's money policy is obviously historically tied to Britain's, so I should include that too. And Britain was adapting the system that was established in feudal times. A lot of work went into making fiat currency real. So a fair comparison would be Bitcoin versus the cost to print money, plus the history of the US currency system, UK, and all of monetary history before that. This is starting to look pretty bad!
- keypusher 6y agoHow much does it cost to run the US treasury though?
- JumpCrisscross 6y ago> How much does it cost to run the US treasury though? Would the U.S. Treasury disappear if we switched to Bitcoin? (Hint: look at countries that don't have their own currency. They still collect taxes and spend and borrow money.)
- 1-more 6y agoI went looking for an example and to save anyone else some time: Ecuador no longer uses the sucre and instead has used the US dollar since 2000. They do still have a ministry of economy and finance which has a central bank. Fascinating ty!! https://en.wikipedia.org/wiki/Ministry_of_Economy_and_Finance_(Ecuador) https://en.wikipedia.org/wiki/Ministry_of_Economy_and_Financ...
- hn_throwaway_99 6y agoI mean, I know people are commenting on whether the comparison is valid, but regardless, the BTC energy cost at at 741 kWh for a single transaction is pretty close to the average monthly household energy usage in the US of 867 kWh [1]. That seems pretty nuts on its face to me. [1] https://electricityplans.com/kwh-kilowatt-hour-can-power/ https://electricityplans.com/kwh-kilowatt-hour-can-power/
- ed25519FUUU 6y agoTo put it in perspective, a single bitcoin transaction can power the average american's household electricity needs for... an entire month.
- turbinerneiter 6y agoWhat is that in money, 50 bucks? (Live in Germany, we have very high energy prices, so I relly don't know. Single in 50sqm Appartment, paying 47euros per month for a 100% renewable plan.)
- mikeyouse 6y agoDepends where in the US -- In Texas (as long as there aren't any blizzard-driven blackouts with accompanying rate spikes), retail electricity costs something like $0.10/kWh. In California, it's closer to $0.20/kWh. So roughly somewhere between $70-$150.
- tgtweak 6y agoIf you've looked at the transaction fees lately, you can definitely pay to power an American house for 1 month too (that is, assuming unreasonably that the house was powered at the same cost that most bitcoin miners pay for power: ~$0.04/kWh)
- yunvme 6y agoTo put it in perspective, ~$1,000,000,000,000 USD is being secured by a decentralized system by using that much electricity. How much electricity/oil/other power is used by the US military to ensure the US government stays in power and the US currency retains its value? Surely orders of magnitude more energy than what is used for Bitcoin. The number of transactions that are completed on the base layer is not the relevant metric. As the technology matures and as Bitcoin is more fully monetized, transactions will happen on higher layers. The "high" energy cost is necessary to secure the decentralized system.
- bkmrkr 6y agoWhat all of these analyses fail to realize is that the network is just used for clearing most of trading and payments are actually done off network. Think of the difference between energy used to buy gold (just buy GLD) vs energy used to move physical gold. (Fuel + Security etc)
- JumpCrisscross 6y ago> payments are actually done off network Fine, add 0.00000000000001% for the energy a wire transfer takes to net out hundreds of millions of credit card transactions.
- snicksnak 6y agoIs this really per transaction or per block?
- 627467 6y agoWhat is the economic (hence energy cost) impact of maintaining the financial infrastructure where VISA is only a tiny part of? While the traditional financial infrastructure is under doing rapid modernization, my layman eye still see lots of manual intervention for compliance, enforcement, etc...
- lanevorockz 6y agoWho provided this data ? We used WAY WAY WAY less energy in Brazil. Maybe the US is indeed the new third world country.
- coralreef 6y agoNot sure why Visa is a relevant comparison. I can setup a dozen nodes on AWS and build a crypto with a million times the transaction capacity of Bitcoin. Obviously the downside to this is centralization; someone can be banned or censoredfor any reason. Blockchains are first decentralized, permissionless, censorship resistant solutions.
- jasonlaramburu 6y agoBTC mining is highly centralized. Fiat on/off ramps (essential if one wishes to spend her BTC) are regulated by local governments and relatively easy to censor. If there really were global demand for a censorship resistant currency don’t you think there would be more merchants accepting BTC by now?
- coralreef 6y agohttps://twitter.com/real_vijay/status/968854238095753216?lang=en https://twitter.com/real_vijay/status/968854238095753216?lan... 1/ There are four stages that all market-based monetary goods pass through in their evolution to becoming a fully fledged money: 1. Collectible 2. Store of Value 3. Medium of exchange 4. Unit of account
- jasonlaramburu 6y agoHow many examples of this exist besides gold and silver?
- coralreef 6y agoDepends how far back you go. I'm not a historian, but there are obviously local systems of currency; some used gems, feathers, etc. Rai stones were used by islanders as a ledger and store of value. https://en.wikipedia.org/wiki/Rai_stones https://en.wikipedia.org/wiki/Rai_stones
- tgtweak 6y agoIf anyone is looking for energy/txn as the main metric for measurement, there are many other fully decentralized blockchains can also perform 500,000x more efficiently than bitcoin.
- G3rn0ti 6y agoSo another story about Bitcoin‘s energy consumption. Sigh. What we should really be interested in is its actual carbon foot print. You can’t just translate energy usage into CO2 emissions. These are a function of geolocation and energy efficiency of the underlying hardware. It’s actually pretty tricky to calculate that. If anybody's interested, here is a careful analysis of Bitcoin's carbon foot print (2019): https://www.sciencedirect.com/science/article/pii/S2542435119302557 https://www.sciencedirect.com/science/article/pii/S254243511... TL;DR: While there is this "energy consumption of Argentina" number in circulation implying Bitcoin's carbon emissions equates that of a whole developed country, in reality this number is closer to that of Kansas City.
- flowersjeff 6y agoThanks so much for that read :-)
- G3rn0ti 6y agoYou’re welcome. The article also gives some interesting insights into the mining business. I actually I would love to see some Bitcoin miners to comment about this whole topic more often on HN. I know at least some of them should be lurking here but for some reason decide to keep completely silent.
- noxer 6y agohttps://xrpl.org/carbon-calculator.html https://xrpl.org/carbon-calculator.html As expected PoW is by far the worst. Worse than paper money.
- DJBunnies 6y agoIt’s not really directly related. Miners load hash rate to get a better chance at the next block, the transactions just go along for the ride. This would be true regardless of how much hash power is cumulative.
- whoooooo123 6y agoUm... Can you rephrase this such that people like me who aren't Bitcoin aficionados can understand it?
- DJBunnies 6y agoHash power translates to proof of work, which is like a miner buying a lotto ticket to win the next block. The more tickets a miner has, the more likely they are to win the next block. That's what hash power does.
- tracedddd 6y agoThe energy usage of Bitcoin or similar projects like Ethereum are derived from the “mining” aspect which is not connected to transactions or transaction volume. For example, early Bitcoin was generally, for purposes of discussion, about the same transaction throughput as we have today. But there were very few miners, so the energy costs were very low. Was Bitcoin truly many orders of magnitude more efficient back then? No. It’s simply that there are many many more miners competing for rewards, because Bitcoin is valuable. There’s an energy lottery built into the Bitcoin protocol that emits new currency. This lottery is directly related to the security of the network but not the number of transactions or usage. Unfortunately it’s hard to find an exact parallel but something like the military protection of the dollar would be a more valid comparison than Visa’s transaction volume. Consider this: even if the blocks were empty, which means no transactions, the energy usage would be the same.
- savaka 6y ago"Those critics of Bitcoin who point to its energy usage (as of this writing, ~75 terawatt hours per year) seem unwilling to acknowledge the energy usage that keeps the US dollar afloat. The US economy used almost 29,000 terawatt hours in 2019. As confirmed by the US Treasury Department, the value of the dollar is backed by all the goods and services in the US economy which would also include its energy sector. Furthermore, in 2019 world energy consumption was something on the order of 120,000 terawatt hours. Bitcoin uses ~0.25% of US energy consumption and less than 0.05% of world energy consumption." https://jamie-dyer.medium.com/why-i-hate-bitcoin-38fad90b37e1 https://jamie-dyer.medium.com/why-i-hate-bitcoin-38fad90b37e...
- JumpCrisscross 6y ago> the value of the dollar is backed by all the goods and services in the US economy which would also include its energy sector. Bitcoin has a lot going for it. But these arguments are so incredibly stupid. Would the energy sector go away if the U.S. switched to Bitcoin? The American economy? No? Then it isn't a cost inherent to the U.S. dollar.
- Gibbon1 6y agoFiat currency is used to mediate economic transactions. Bitcoin is just a distributed ponzi scheme.
- kbd 6y ago> seem unwilling to acknowledge the energy usage that keeps the US dollar afloat Except you're comparing all the "real things" that make up the US economy to Bitcoin where the energy usage is just for Bitcoin (discovering coins and doing transactions). The statement you quoted seems entirely disingenuous.
- FpUser 6y agoYou flipping subject on it's head. The US economy does not produce stuff in order for dollar to exist. The dollar (at least in theory) exists to reflect the US economy and simplify exchange of goods.
- 6y ago
- defcon-007 6y agoDoes this actually include all the energy needed to maintain the VISA infrastructure too? Like the servers, energy used by VISA employees, offices, etc?
- defcon-007 6y agoDoes this also include all the energy required to maintain the VISA infrastructure too? Like the servers, employees, office etc!
- deleted 6y ago[deleted]
- giorgioz 6y agoThere is no paper/overview of how those 2 values are calculated. One questions that comes to mind is: Is the energy consumption of VISA transactions calculated based on their servers energy consumption? So now what about the energy consumption of the whole VISA company? Visa has 19,500 employees https://en.wikipedia.org/wiki/Visa_Inc https://en.wikipedia.org/wiki/Visa_Inc. Does Bitcoin employees 19500 people full-time to work? Time is interchangeable with money and money with electricity/CO2 emissions.
- zepto 6y ago> So now what about the energy consumption of the whole VISA company? Visa has 19,500 employees Ok - but then you need to include all the exchanges and wallet developers etc. https://en.wikipedia.org/wiki/Visa_Inc https://en.wikipedia.org/wiki/Visa_Inc. Does Bitcoin employees 19500 people full-time to work? Time is interchangeable with money and money with electricity/CO2 emissions Maybe, when you include all the miners and the other parts of the ecosystem needed to make Bitcoin available for use.
- giorgioz 6y ago> Ok - but then you need to include all the exchanges and wallet developers etc. Yes indeed we should consider all factors. For Bitcoins we should count the number of active full-time people employed as miners and developers. I feel like the amount of people required to maintain a system should be counted in green efforts. Like for example bio supermarkets they provide you with products without packaging. Example you get your cereals from a giant glass container to your reusable container. Now that requires extra effort on handling/trasportation/refrigeration/storage. If all those things require a lot of more time we should consider the time of X people vs the saving in Y plastic or the saving in Z plastic. It might turn out that Bitcoin employees less/equal/more people time for transaction. People's time is very expensive.
- cletus 6y agoHere's a fun comparison for you: - One study [1] estimated that 70B kWh were required to run the Internet, at an estimated cost of ~$7B annually assuming 10c/kWh (which is probably high); - One report [2] estimated the energy consumed by Bitcoin at 121.36TWh, which is 121.36B kWh. So assuming these numbers are remotely accurate, which is a big "if" I'll admit, more energy is spent on Bitcoin than the entire rest of the Internet infrastructure. Other commenters have asked variation of "once [coin] moves from PoW to PoS, what will [no coiners] complain about?" That's easy: not the (essentially pointless) energy expenditure (and resultant carbon footprint) obviously. [1]: https://www.forbes.com/sites/christopherhelman/2016/06/28/how-much-electricity-does-it-take-to-run-the-internet/?sh=52ca4ff81fff https://www.forbes.com/sites/christopherhelman/2016/06/28/ho... [2]: https://www.bbc.com/news/technology-56012952 https://www.bbc.com/news/technology-56012952
- noxer 6y agoHere is something similar with more different technologies https://xrpl.org/carbon-calculator.html https://xrpl.org/carbon-calculator.html (scroll to the bottom) Compares BTC/ETH/XRP/VISA/MASTERCARD and Paper Money I wound not interpret too much into the actual values they are unlikely to be very accurate.
- panarky 6y agoBitcoin's primary use case isn't the same as Visa's. Visa is good at processing many small transactions. Bitcoin is good at storing value over time, across borders, without censorship. Since Bitcoin is useful without many transactions, it's deceptive to measure its energy usage per transaction. It would be equally useless to cite Visa's 10-year stored value percentage gain vs. gold, because preserving value over time is not what Visa does.
- cosmotic 6y agoA bank is good at storing value over time. I'd argue that bitcoin is not, considering all the lost wallets and wild swings in value. From my limited vantage point, BitCoin's actual use cases are underground/gray markets and speculation.
- panarky 6y agoBanks are not good at storing value over time, that's why institutions and high net worth individuals are searching for alternatives. Banks store government money which depreciates gradually in good years, and devalues rapidly in bad years. It's all one direction, toward zero, it never gains value. On top of the relentless depreciation, add the risk of bank insolvency. Banks are terrible stores of value.
- cosmotic 6y agoAre you referring to the low interest rate? I suspect that depends largely on which bank/currency you're referring to. Bitcoin sure doesn't fair very well, except if you invest at the right time. The bank is a known quantity.
- panarky 6y ago> Bitcoin sure doesn't fair (sic) very well, except if you invest at the right time Historically, you could have bought 99.8% of the days Bitcoin existed and you would be up today.
- hombre_fatal 6y agoThe judgemental overtone of these comparisons never makes sense to me. We supposedly draw the line on how others spend their energy when it comes to bitcoin and nowhere else. Animal agriculture is a great place to look when it comes to senseless energy expenditure just to produce products that please our taste buds, if this were something we actually cared about, but we don't. 800-1200kWh are consumed to prop up a single dairy cow every year, just to produce a product that tastes good. 250M+ dairy cows in the world. It's just so tempting and convenient to bemoan things we happen to not partake in, and then we pat ourselves on the back as if we are avoiding it for ecological/energy reasons. It's a bit boring to see on HN every week, mostly because it's a cesspit of world view confirmation and anti-bitcoin circlejerking rather than a spark of intellectual curiosity.
- cesarb 6y ago> We supposedly draw the line on how others spend their energy when it comes to bitcoin and nowhere else. Nowhere else has an incentive to use as much power as possible. With your example of animal agriculture, the incentives align towards a lower energy expenditure (if a farmer spends more on energy, either the profit is lower, or the extra cost is passed to the customer, who then has an incentive to consume less). With Bitcoin, the incentive aligns towards a higher energy expenditure (for a given Bitcoin price and amount of transaction fees, a miner which uses more energy gets a higher portion of the block rewards and transaction fees, so the collective energy usage of all miners converges towards using all of the block rewards and transaction fees to pay for energy).
- thecrash 6y agoPower is the input for a machine that performs calculations which can be used to get money. On a factory farm, power is the input for a machine that raises animals, which can be exchanged to money. If your animal-raising machine is profitable, you absolutely want to put as much power into it as possible - raising more animals means more profit. Both machines can be optimized, but that just allows more production for the same energy use. There's no incentive to reduce energy consumption unless some other factor bounds the machine's capacity (for example lack of materials, hardware, labor) Capitalism in general is a machine for consuming natural resources and converting them to profit as quickly as possible.
- deleted 6y ago[deleted]
- CryptoPunk 6y agoBitcoin's reward per transaction and fee per transaction would be orders of magnitude smaller if it followed the community and Satoshi's original plan and allowed for blocks to grow to meet market demand. Previous discussion on this: https://news.ycombinator.com/item?id=26374566 https://news.ycombinator.com/item?id=26374566