9 ms·

I don't think that cryptocurrency energy consumption is as big a problem as it's been recently painted in the media. Bitcoin, Ethereum etc. are, potentially, se

by mszcz 6y ago

I don't think that cryptocurrency energy consumption is as big a problem as it's been recently painted in the media. Bitcoin, Ethereum etc. are, potentially, self-contained, almost complete, final, financial systems. Using a VISA card (for instance to make the same contribution to wild-life preservation) would use a fraction of the energy that's used to sustain cryptocurrencies, sure, but that's not a fair comparison. Using VISA requires a working settlement layer (because VISA transactions are reversable), banks, bank employees, bank buildings, international transfer support, international settlement layer, people handling those settlements, regulation, regulation enforcement etc. If you include all that then the energy usage of Bitcoin doesn't look all that bad.

Sebb767 6y ago
And mining Bitcoin requires chip makers (including rare earth materials), the tech industry and the whole internet. If you include side channels in visa, you'll need to do the same for Bitcoin. Yes, Bitcoin has advantages, but low energy consumption is not one of them.
- mszcz 6y ago
  I never said it's energy usage is low. I said (more or less) that for what it is it's energy usage is low.
  - simiones 6y ago
    Bitcoin, at best, does what SWIFT does for the financial system. Comparing it with the entire global financial system is laughable. For what it is, it consumes ENORMOUS amounts of energy.
pas 6y ago
The estimated energy consumption of BTC is between the electricity consumption of Ukraine and Argentina. It's as if everyone would be a banker in Ukraine and every building would be a bank. Seems excessive.
- mszcz 6y ago
  I didn't do the math on this one, but it seems to me that the whole financial system (and all that's needed to ensure it's reliability and security) uses a bit more energy than Ukraine or Argentina.
  - imtringued 6y ago
    The infrastructure supporting hundreds of national currencies, hundreds of stock exchanges, thousands of banks, hundreds of payment providers and cryptocurrency exchanges vs a single distributed ledger (basically a piece of paper). Bitcoin has 200 million users at most if you are really generous. It's really not a fair comparison. You would have to combine all cryptocurrencies and their energy consumption to even approach a fair comparison. The energy usage is only used for mining, it's not even used to secure and ensure its reliability on exchanges whose energy consumption is actually counted against the mining energy. The energy consumption will grow simply because Bitcoin is going up, not because Bitcoin is processing more transactions or providing value in any form. Yes bigger banks need more energy but they can also provide more services thanks to their increased size. Bitcoin doesn't even compete with Banks because Banks offer loans, consolidate small deposits into large capital reserves, etc. Bitcoin doesn't compete with stocks because Bitcoin ownership doesn't represent an ownership stake in the Bitcoin industry or any other industry. Bitcoin doesn't compete with payment providers because it is too slow and expensive. Bitcoin doesn't compete against cryptocurrency exchanges. Ethereum with its uniswap protocol may do so but that's not Bitcoin. Ethereum provides more value for less energy consumption than bitcoin. The only thing Bitcoin really competes against is gold because of the proof of ownership. You own your Bitcoin in your wallet the same way you own your car or house (after paying your mortgage or car loan off of course). Bonus: Why did I compare Bitcoin to a piece of paper? Because the people working in finance are part of the finance system. In Bitcoin only the miners are part of the system. So ultimately you just have a fancy piece of paper on which you cannot write lies on. With the finance system it is closer to bodyguards guarding the paper and making sure nobody can write on it. Again, people are part of the system. It's not just the paper that is important.
  - ohgodplsno 6y ago
    The whole financial system actually has some usefulness: you can pay for things with it. Anywhere in the world. Without paying $30 in fees, without waiting for 3 days to clear. It's also not likely to run on 60% coal. Since bitcoin zealots have moved to pretending that it's a "store of value", you can compare Bitcoin to the energy used to secure the gold in the world. Hint: it's much more worse.
simiones 6y ago
> Bitcoin, Ethereum etc. are, potentially, self-contained, almost complete, final, financial systems. ...for a small village of maybe 1000 people? At the current transaction rate, they could barely handle that. And of course they don't handle disputes, loans, insurance, tech support, legal compliance, KYC and AML, or any other part of a financial system (you're even forgetting that someone needs to design and print the physical cards). Bitcoin in particular does nothing more than verifying a handful of transactions per second (5? 7?) while consuming more electrical energy than all of the world's regular transaction processing hardware combined, perhaps with the exception of ATMs - which amounts to hundreds of millions of transactions per second, all over the world, in a truly decentralized system.
cycomanic 6y ago
What sort of calculation is that? Let's for a moment disregard the fact that banks do much more than just transactions, let's also ignore that there is more then the transaction energy in bitcoin (there are also people working for the miners, producing the hardware etc). Just the comparison between the number of transactions of the banking system (including credit cards) to the number of bitcoin transactions should tell you how different the scales are. There were around daily 400k bitcoin transactions. There were 100 Million credit card transactions per day in the US alone. That would mean if we were to transition to use crypto currencies as our main financial system we'd use more than all the energy we produce worldwide just for bitcoin. So bitcoin looks even worse after doing a bit more of a comparison.

by mszcz 6y ago

Sebb767 6y ago

And mining Bitcoin requires chip makers (including rare earth materials), the tech industry and the whole internet. If you include side channels in visa, you'll need to do the same for Bitcoin. Yes, Bitcoin has advantages, but low energy consumption is not one of them.

mszcz 6y ago
I never said it's energy usage is low. I said (more or less) that for what it is it's energy usage is low.
- simiones 6y ago
  Bitcoin, at best, does what SWIFT does for the financial system. Comparing it with the entire global financial system is laughable. For what it is, it consumes ENORMOUS amounts of energy.

pas 6y ago

The estimated energy consumption of BTC is between the electricity consumption of Ukraine and Argentina. It's as if everyone would be a banker in Ukraine and every building would be a bank. Seems excessive.

mszcz 6y ago
I didn't do the math on this one, but it seems to me that the whole financial system (and all that's needed to ensure it's reliability and security) uses a bit more energy than Ukraine or Argentina.
- imtringued 6y ago
  The infrastructure supporting hundreds of national currencies, hundreds of stock exchanges, thousands of banks, hundreds of payment providers and cryptocurrency exchanges vs a single distributed ledger (basically a piece of paper). Bitcoin has 200 million users at most if you are really generous. It's really not a fair comparison. You would have to combine all cryptocurrencies and their energy consumption to even approach a fair comparison. The energy usage is only used for mining, it's not even used to secure and ensure its reliability on exchanges whose energy consumption is actually counted against the mining energy. The energy consumption will grow simply because Bitcoin is going up, not because Bitcoin is processing more transactions or providing value in any form. Yes bigger banks need more energy but they can also provide more services thanks to their increased size. Bitcoin doesn't even compete with Banks because Banks offer loans, consolidate small deposits into large capital reserves, etc. Bitcoin doesn't compete with stocks because Bitcoin ownership doesn't represent an ownership stake in the Bitcoin industry or any other industry. Bitcoin doesn't compete with payment providers because it is too slow and expensive. Bitcoin doesn't compete against cryptocurrency exchanges. Ethereum with its uniswap protocol may do so but that's not Bitcoin. Ethereum provides more value for less energy consumption than bitcoin. The only thing Bitcoin really competes against is gold because of the proof of ownership. You own your Bitcoin in your wallet the same way you own your car or house (after paying your mortgage or car loan off of course). Bonus: Why did I compare Bitcoin to a piece of paper? Because the people working in finance are part of the finance system. In Bitcoin only the miners are part of the system. So ultimately you just have a fancy piece of paper on which you cannot write lies on. With the finance system it is closer to bodyguards guarding the paper and making sure nobody can write on it. Again, people are part of the system. It's not just the paper that is important.
- ohgodplsno 6y ago
  The whole financial system actually has some usefulness: you can pay for things with it. Anywhere in the world. Without paying $30 in fees, without waiting for 3 days to clear. It's also not likely to run on 60% coal. Since bitcoin zealots have moved to pretending that it's a "store of value", you can compare Bitcoin to the energy used to secure the gold in the world. Hint: it's much more worse.

simiones 6y ago

> Bitcoin, Ethereum etc. are, potentially, self-contained, almost complete, final, financial systems. ...for a small village of maybe 1000 people? At the current transaction rate, they could barely handle that. And of course they don't handle disputes, loans, insurance, tech support, legal compliance, KYC and AML, or any other part of a financial system (you're even forgetting that someone needs to design and print the physical cards). Bitcoin in particular does nothing more than verifying a handful of transactions per second (5? 7?) while consuming more electrical energy than all of the world's regular transaction processing hardware combined, perhaps with the exception of ATMs - which amounts to hundreds of millions of transactions per second, all over the world, in a truly decentralized system.

cycomanic 6y ago

What sort of calculation is that? Let's for a moment disregard the fact that banks do much more than just transactions, let's also ignore that there is more then the transaction energy in bitcoin (there are also people working for the miners, producing the hardware etc). Just the comparison between the number of transactions of the banking system (including credit cards) to the number of bitcoin transactions should tell you how different the scales are. There were around daily 400k bitcoin transactions. There were 100 Million credit card transactions per day in the US alone. That would mean if we were to transition to use crypto currencies as our main financial system we'd use more than all the energy we produce worldwide just for bitcoin. So bitcoin looks even worse after doing a bit more of a comparison.