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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 e

by 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.
  - skohan 6y ago
    Not only that, but if you look at the energy usage per transaction, bitcoin is probably many orders of magnitude more expensive than the financial system
vmception 6y ago
And how many countries of energy does the other financial system use, for comparison?
- nradov 6y ago
  That wouldn't be a valid comparison. There's a lot more to the other financial system than just currency and payments. Even if hypothetically the whole world adopted Bitcoin we would still need most parts of the other financial system.
  - derefr 6y ago
    Sure, but rather than a vertical slice, do a horizontal slice. How much energy does every country in the world’s mints, bank vaults, etc. use up, including their whole logistical pipelines that wouldn’t be needed if countries didn’t mint+store physical currency?
  - lifeformed 6y ago
    What about the costs of military and lives and environment of the efforts spent in maintaining the USD hegemony?
    - simiones 6y ago
      If you think the USA would stop asserting its hegemony if the world used Bitcoin instead of USD, I don't know what to tell you.
      - vmception 6y ago
        Basically they think that deflationary assets irreparably cripple the debt market, and therefore the government bonds market, and therefore wars will be harder to fund and less arbitrary. There is some accuracy to that. Would raise the stakes and the resources involved in funding a war. The last 70-80 years of US hegemony have been based off of the market tolerance for US debt and slowly being paid their money back, in US dollartoken. And before then, US hegemony was not a thing. So there is nothing to say that the market won't find a way to have fractional speculation on bitcoin/crypto asset backed securities, and there is nothing to say that a governing body won't find a way to sustain itself and gain compliance with its peers through it. But there is also not a history of US hegemony supporting it either. Not a panacea because the world was much more of a tinderbox before US debt based hegemony.
sho_hn 6y ago
It's also Bitcoin _right now_. It's still growing!
- sho_hn 6y ago
  I'm not sure if I'm being down-voted for being pro-Bitcoin or anti-Bitcoin at the moment, but to clarify: My point is that the Bitcoin energy consumption problem has been and is getting worse over time.
lifeisstillgood 6y ago
Thank you - I heard the 'if you add the costs of Visa / banking it evens out' and was not sure how to tackle it. https://en.wikipedia.org/wiki/Argentina https://en.wikipedia.org/wiki/Argentina - 44 Million people https://en.wikipedia.org/wiki/Ukraine https://en.wikipedia.org/wiki/Ukraine - 41 M (handwaving around bits that got invaded etc) So is the global population of the banking industry comparable to 41 M ? UK employees: 1.1M US Employees: 8.3M So I went round a few houses and there is a lack of solid stats. But I think I can go with a decent indicator. The USA has about 7.5 % of GDP (1.5tn) in Finance Services, and 6.3M employees (2018). Now translate that up to the global GDP of 87TRN, and say the global finance sector is as large globally as in USA (generous assumption) and that give 7.5 % of 87TRN - 6.5TRN. At 4.2M employees per Trillion that gives us 27 M global employees. Now there can be lots of hand waving, but if bitcoin uses same amount of electricity as Argentina, and Argentina has around 1.5 many people as the global finance sector, then bitcoins electrical use does seem very excessive. https://www.selectusa.gov/financial-services-industry-united-states https://www.selectusa.gov/financial-services-industry-united... -> 6.3 M employees, 1.5 Tn (USA), 7.5% of GDP Bibliography: https://www.statista.com/statistics/298370/uk-financial-sector-total-financial-services-employment/#:~:text=In%202019%2C%20the%20total%20number,all%20subsectors%20of%20financial%20services https://www.statista.com/statistics/298370/uk-financial-sect.... https://www.bls.gov/iag/tgs/iag50.htm https://www.bls.gov/iag/tgs/iag50.htm https://www.investopedia.com/ask/answers/030515/what-percentage-global-economy-comprised-financial-services-sector.asp https://www.investopedia.com/ask/answers/030515/what-percent... https://www.selectusa.gov/financial-services-industry-united-states https://www.selectusa.gov/financial-services-industry-united... -> 6.3 M employees, 1.5 Tn (USA), 7.5% of GDP
- krrrh 6y ago
  And it’s estimated that there area only around 1 million active Bitcoin wallets.
- capitol_ 6y ago
  But here you are comparing apple and oranges. The energy one technical component uses versus the energy that all the people that use another technology uses. Bitcoin also have support systems around it, hardware production lines, and a lot of people who use it that you don't include in your comparison.
lupire 6y ago
That's incorrect because electricity is only one form of energy consumed. Oil/gasoline for cars/heat and natural gas for heat are other forms

by pas 6y ago

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.
- skohan 6y ago
  Not only that, but if you look at the energy usage per transaction, bitcoin is probably many orders of magnitude more expensive than the financial system

vmception 6y ago

And how many countries of energy does the other financial system use, for comparison?

nradov 6y ago
That wouldn't be a valid comparison. There's a lot more to the other financial system than just currency and payments. Even if hypothetically the whole world adopted Bitcoin we would still need most parts of the other financial system.
- derefr 6y ago
  Sure, but rather than a vertical slice, do a horizontal slice. How much energy does every country in the world’s mints, bank vaults, etc. use up, including their whole logistical pipelines that wouldn’t be needed if countries didn’t mint+store physical currency?
- lifeformed 6y ago
  What about the costs of military and lives and environment of the efforts spent in maintaining the USD hegemony?
  - simiones 6y ago
    If you think the USA would stop asserting its hegemony if the world used Bitcoin instead of USD, I don't know what to tell you.
    - vmception 6y ago
      Basically they think that deflationary assets irreparably cripple the debt market, and therefore the government bonds market, and therefore wars will be harder to fund and less arbitrary. There is some accuracy to that. Would raise the stakes and the resources involved in funding a war. The last 70-80 years of US hegemony have been based off of the market tolerance for US debt and slowly being paid their money back, in US dollartoken. And before then, US hegemony was not a thing. So there is nothing to say that the market won't find a way to have fractional speculation on bitcoin/crypto asset backed securities, and there is nothing to say that a governing body won't find a way to sustain itself and gain compliance with its peers through it. But there is also not a history of US hegemony supporting it either. Not a panacea because the world was much more of a tinderbox before US debt based hegemony.

sho_hn 6y ago

It's also Bitcoin _right now_. It's still growing!

sho_hn 6y ago
I'm not sure if I'm being down-voted for being pro-Bitcoin or anti-Bitcoin at the moment, but to clarify: My point is that the Bitcoin energy consumption problem has been and is getting worse over time.

lifeisstillgood 6y ago

Thank you - I heard the 'if you add the costs of Visa / banking it evens out' and was not sure how to tackle it. https://en.wikipedia.org/wiki/Argentina https://en.wikipedia.org/wiki/Argentina - 44 Million people https://en.wikipedia.org/wiki/Ukraine https://en.wikipedia.org/wiki/Ukraine - 41 M (handwaving around bits that got invaded etc) So is the global population of the banking industry comparable to 41 M ? UK employees: 1.1M US Employees: 8.3M So I went round a few houses and there is a lack of solid stats. But I think I can go with a decent indicator. The USA has about 7.5 % of GDP (1.5tn) in Finance Services, and 6.3M employees (2018). Now translate that up to the global GDP of 87TRN, and say the global finance sector is as large globally as in USA (generous assumption) and that give 7.5 % of 87TRN - 6.5TRN. At 4.2M employees per Trillion that gives us 27 M global employees. Now there can be lots of hand waving, but if bitcoin uses same amount of electricity as Argentina, and Argentina has around 1.5 many people as the global finance sector, then bitcoins electrical use does seem very excessive. https://www.selectusa.gov/financial-services-industry-united-states https://www.selectusa.gov/financial-services-industry-united... -> 6.3 M employees, 1.5 Tn (USA), 7.5% of GDP Bibliography: https://www.statista.com/statistics/298370/uk-financial-sector-total-financial-services-employment/#:~:text=In%202019%2C%20the%20total%20number,all%20subsectors%20of%20financial%20services https://www.statista.com/statistics/298370/uk-financial-sect.... https://www.bls.gov/iag/tgs/iag50.htm https://www.bls.gov/iag/tgs/iag50.htm https://www.investopedia.com/ask/answers/030515/what-percentage-global-economy-comprised-financial-services-sector.asp https://www.investopedia.com/ask/answers/030515/what-percent... https://www.selectusa.gov/financial-services-industry-united-states https://www.selectusa.gov/financial-services-industry-united... -> 6.3 M employees, 1.5 Tn (USA), 7.5% of GDP

krrrh 6y ago
And it’s estimated that there area only around 1 million active Bitcoin wallets.
capitol_ 6y ago
But here you are comparing apple and oranges. The energy one technical component uses versus the energy that all the people that use another technology uses. Bitcoin also have support systems around it, hardware production lines, and a lot of people who use it that you don't include in your comparison.

lupire 6y ago

That's incorrect because electricity is only one form of energy consumed. Oil/gasoline for cars/heat and natural gas for heat are other forms