13 ms·

Countries That Consumer More or Less Electricity Than Bitcoin in 2021

26 points by beavershaw 6y ago

rawtxapp 6y ago
Whether you like it or not, Bitcoin's current market cap is 1 trillion$ (which btw is more than the GDP of many countries), when you look at it from that perspective, the energy spent to secure it is worth it.
- rideontime 6y ago
  Depends on how much you value money.
- chmod775 6y ago
  Bitcoin has no real intrinsic value, so no, it's not worth it. To make this more obvious suppose all money was bitcoin. By your logic it would be worth it to make our sole economic activity 'securing' it. We'd literally all starve and die.
  - thebean11 6y ago
    That makes no sense. If all money was USD would literally everyone be in the banking industry with no market for corn?
    - anbende 6y ago
      I believe the argument they were making was about the electricity cost of securing it if all money was in bitcoin. At the current energy requirements (which are escalating per transaction), it would take more than the entire energy production of the world to make bitcoin the sole currency.
      - thebean11 6y ago
        > which are escalating per transaction Wrong. The number (or more specifically "weight") of the transactions that can be processed in a given time period is constant, and does not scale with the hash rate. > it would take more than the entire energy production of the world to make bitcoin the sole currency I do not follow..
        rspeele 6y ago
        Let me see if I can help you. One of Bitcoin's biggest selling points is that there is a limited supply of it. For it to be the world's reserve currency, each 1 BTC would represent a stunning amount of actual wealth. You can find plenty of starry-eyed investors using this principle to explain how their price target of, say, $10M/BTC makes sense. Sound good so far? Next, the block reward is denominated in BTC. Currently 6.25 BTC every 10 minutes, but it'll halve again in 2024. The block reward, plus transaction fees, is what the network pays miners. It makes sense for miners in aggregate to expend about that much money on mining, because if the network is spending less than that, there is still profit available for additional miners joining in. If that 6.25 BTC becomes valued at 10x or 100x as much as it is today, the expenditure on mining will also be 10x or 100x larger. Obviously this can't actually exceed the energy production of the world because that's impossible, but this new artificial demand for energy can soak up lots of capacity that would otherwise go to more productive, yet less profitable, endeavors. The fact that it's using 1/200th of the world's energy production already, while it's just a toy speculation vehicle, doesn't bode well. As you correctly point out though, this additional expenditure on mining will do absolutely nothing to help the number of transactions that can be processed in any given time period.
        thebean11 6y ago
        > Let me see if I can help you. Nobody here is impressed by you, the condescension sounds ridiculous. > the expenditure on mining will also be 10x or 100x larger This is correct, but the assumption that energy will continue to represent a very large part of that expenditure is faulty. There is a huge incentive for miners to mine more efficiently, especially in this hypothetical universe where Bitcoin is driving up energy prices.. That expenditure could easily be disproportionately spent on more efficient hardware / algorithms. Alternatively Bitcoin might not be using proof of work in this hypothetical future. It's not immutable.
    - chmod775 6y ago
      > That makes no sense. If all money was USD would literally everyone be in the banking industry with no market for corn? It indeed makes no sense if you completely ignore half of the argument (and probably misunderstand it on top of that). The argument was that it makes sense to spend currency for security equal to the amount of currency you are securing, meaning if you do that for all currency, (pretty much) the sole economic activity will be securing it. Suppose for the moment that what is mining power to bitcoin is the US military to the USD. It makes no sense to spend all USD on just the military, so that it can secure the currency, does it?
      - thebean11 6y ago
        > The argument was that it makes sense to spend currency for security equal to the amount of currency you are securing You are right, I don't understand this argument at all. It only makes sense to spend the minimal amount that would keep it secure. The incentive to mine is only the block reward, which is only transaction fees plus inflation. The incentive is not the entire pool of currency.
  - rawtxapp 6y ago
    I prefaced it with "Whether you like it or not", because what you think doesn't matter, you don't get to tell people what has value and what doesn't, the market decides and there's currently a market with billions of dollars in volume across many different exchanges that decides the value. You think it's a worthless tulip? Great, go and short it. I'm not sure what you mean by the 2nd paragraph, are you saying if all money was bitcoin, we'd only spend energy to secure that and we wouldn't do nothing else? That wouldn't make sense right? If all money was Bitcoin, there wouldn't be as much upside to it, because it will have already won, so you'd need to do other economic activities which will grow faster than that.
- gammalost 6y ago
  >the energy spent to secure it is worth it According to who, the people making all the money? It's obvious that people don't find it that simple.
- gidam 6y ago
  If the profit is the only measure that a lot of people here seem to consider: why not just burning the trash in the air, pouring polluted water directly in the ocean and allowing toxic material in our food chain? Do we want forbidding people to become rich doing nothing for others? These markets are bigger than several GDP of many countries, "whether you like it or not".
  - rawtxapp 6y ago
    I mean you realize all those things you mentioned are happening right? Waters are polluted, global warming is real, oil/gold extraction destroys the environment. If anything, this problem is not limited to Bitcoin, we should put a carbon tax on everything with externalities. Why just focus on crypto when there are far bigger polluters?
- mdemare 6y ago
  You cannot compare $ (market cap) with $/year (GDP)
- gorkish 6y ago
  Another way to say this is that Bitcoin's value comes entirely from the sunken cost fallacy. It is a war of consumption. Whoever can waste the most resources and/or produce them the most cheaply will gain the most economic benefit. It's just another one of the forms of mutually assured destruction that we will eventually have to confront. It's unfortunate that being very obviously horrible isn't enough to change it, but the same could be said for climate change or nuclear proliferation, and these things are still moving along, full-tilt.
Maxburn 6y ago
Has anyone looked at it from the angle; does bitcoin consume more or less energy than the current banking industry?
- paulgb 6y ago
  Per transaction it certainly does, the proof of which being that if you were to scale the energy per transaction up to the volume of transactions in the broader economy, you end up with more energy than humans produce. I'm not sure a comparison to banking is appropriate though; much of what banks do (loans, etc.) is not obsoleted by cryptocurrencies.
  - Maxburn 6y ago
    When I mentioned my concern with the energy bitcoin uses someones response was that it is less than the banking industry. It didn't pass the sniff test but I honestly didn't know once you included all the overhead real banks have. I thought it was a interesting perspective.
  - rawtxapp 6y ago
    You're completely ignoring layer 2 and other off-chain places where you can exchange Bitcoin. For example, while a transaction on-chain might move only 1 Bitcoin, it's very much possible that that Bitcoin has changed hands millions of times in another layer.
    - paulgb 6y ago
      I'm ignoring Layer 2 because I think it's vaporware. Every time I look for volume numbers they are negligible compared to BTC as a whole.
      - Melting_Harps 6y ago
        It's a UX/UI issue, you as a (presumed) tech worker should know better and consider it a working beta, not vaporware. It's there, it works, but most people have not been onboarded.
thebean11 6y ago
These are getting a little bit repetitive
- minikites 6y ago
  Ignoring the ecological problems of Bitcoin won't make them go away.
  - DethNinja 6y ago
    What about ecological impact of fiat currency/current state capitalism? Why not compare that with ecological impact of bitcoin?
    - minikites 6y ago
      I'd love to talk about the ecological impact of capitalism but criticizing capitalism goes poorly around here.
    - Guest42 6y ago
      Bitcoin is an invalid comparison and has a laundry list of cons without very many (if any) pros. Comparing dollars to bitcoins is useless. I don’t have a single bill I can pay in bitcoin and if there was, the fees would be worse than current options. I don’t want to have my salary in bitcoin as its “value” is in a quantum state. Regardless of how loud proponents keep using the same 3 arguments, bitcoin usage will never be the norm.
      - pcthrowaway 6y ago
        If you can't think of a single pro of Bitcoin, you may not understand it very well; that's ok , it's complex and new paradigms can take a while to propagate. To be clear, I want people to stop using Bitcoin. There are better cryptocurrencies which don't rely on energy burning to secure their networks, which have negligible fees, and which have near-instant confirmation times.
tomcooks 6y ago
Is the energy use going to diminish to a halt once mining is not profitable anymore? Or is energy needed also for transactions?
- thebean11 6y ago
  If mining becomes unprofitable -> miners will drop out -> difficulty goes down -> profitability goes back up. Miners are always necessary to process transactions.
- paulgb 6y ago
  When mining is not profitable (such as just after a halving for a miner who was already on the edge of profitability), miners leave the market and the difficulty rate adjusts until the market is once again in equilibrium. Transactions do take energy, but currently only a fraction (about 1/7) of the mining reward is paid for by transaction fees alone. An interesting question is whether the network can stay secure if the difficulty drops to ~1/7th of what it is today, or whether something else will have to give. (For what it's worth, even at 1/7th of the energy use the network is still incredibly wasteful by design.)
- sp332 6y ago
  Not much energy is required for a transaction, but the network of legitimate miners has to have more hash power than any attacker. Once the block reward gets tiny, the profit will come from transaction fees. So it will depend on whether the users collectively get enough benefit to pay the miners. If the attackers get more hash power, the blockchain will lose legitimacy as the source of truth and the whole thing will collapse.
santialbo 6y ago
I wish you could mute certain topics on HN like you can do on Twitter.
greenwich26 6y ago
Stop using MWh as some metric of environmental consequence. A MWh from a French nuclear plant or a Danish wind farm is not equivalent to a MWh from a Chinese coal power plant. Also, it's not fair that countries who primarily use wood for fuel (Africa) get to look like they're environmentally great, even though combustion of wood causes a huge amount of pollution and global warming. Average fuelwood consumption in Africa often exceeds 1000 kg/capita annually. That's got to add up to the Chinese mining a bunch of coins, right?
- D13Fd 6y ago
  Even if you don't believe in climate change, MWh is a useful metric. Electricity is not free. Drastically increasing demand for electricity drives up the prices for everyone, in the short term, as electricity rates go up. Even once more supply is created--not an easy thing--society as a whole still bears the risk that the Bitcoin-driven demand will go away (due, e.g., to a crash in value) leaving us with an oversupply of electricity. Either way, "Bitcoin uses more electricity than x" can be a helpful comparison to more effectively convey just what we are signing up for in adopting Bitcoin widely.
martin1975 6y ago
This among other less environmentally impactful factors is why I believe Bitcoin isn't sustainable in the long run. There are other cryptocurrencies which guarantee the same properties as bitcoin (immutability, no double spend, etc) without bitcoin's flaws. For a first attempt Bitcoin killed it. But scaling isn't its virtue.
Glench 6y ago
Folks may want to check out Chia, an energy-efficient blockchain by the creator of Bittorrent based on storage space not processing power: https://www.chia.net/ https://www.chia.net/ People are mining Chia with petabytes of storage off a single raspberry pi so the energy usage is really minimal and there's tons of over-provisionsed hard drive space out there.
- idlewords 6y ago
  Next year: folks balking at the high cost of hard drives may want to check out Bitcoin, which runs on surplus graphics cards.
  - Glench 6y ago
    Haha yeah, I wish the Chia guys would put something in the FAQ about this because it's a common criticism. I've heard them make a convincing case that, unlike CPU cycles, there's actually a lot of over-provisioned space on existing consumer and enterprise hard drives. And unlike Bitcoin, Chia can actually be mined ("farmed") by anyone with extra space on their drives because the technical requirements are so minimal (there are people mining petabytes off a Raspberry Pi, for example). The Chia team also seems to think that if Chia actually does scale to the point of significantly altering production resources, it would be likely to just drive down the price of storage for everyone since there's no specialized hardware that makes mining Chia economically worthwhile. Plus unlike the bitcoin mining hardware, you (or corporations buying lots of drives) can use the storage space for things besides Chia. I have no idea myself if that's how the economics would work out, but it seems likely we'll find out — the network is currently at 200PB and growing: https://www.chiaexplorer.com/charts/netspace https://www.chiaexplorer.com/charts/netspace Love your work by the way! Hope you're well.

26 points by beavershaw 6y ago

Whether you like it or not, Bitcoin's current market cap is 1 trillion$ (which btw is more than the GDP of many countries), when you look at it from that perspective, the energy spent to secure it is worth it.

rideontime 6y ago
Depends on how much you value money.
chmod775 6y ago
Bitcoin has no real intrinsic value, so no, it's not worth it. To make this more obvious suppose all money was bitcoin. By your logic it would be worth it to make our sole economic activity 'securing' it. We'd literally all starve and die.
- thebean11 6y ago
  That makes no sense. If all money was USD would literally everyone be in the banking industry with no market for corn?
  - anbende 6y ago
    I believe the argument they were making was about the electricity cost of securing it if all money was in bitcoin. At the current energy requirements (which are escalating per transaction), it would take more than the entire energy production of the world to make bitcoin the sole currency.
    - thebean11 6y ago
      > which are escalating per transaction Wrong. The number (or more specifically "weight") of the transactions that can be processed in a given time period is constant, and does not scale with the hash rate. > it would take more than the entire energy production of the world to make bitcoin the sole currency I do not follow..
      - rspeele 6y ago
        Let me see if I can help you. One of Bitcoin's biggest selling points is that there is a limited supply of it. For it to be the world's reserve currency, each 1 BTC would represent a stunning amount of actual wealth. You can find plenty of starry-eyed investors using this principle to explain how their price target of, say, $10M/BTC makes sense. Sound good so far? Next, the block reward is denominated in BTC. Currently 6.25 BTC every 10 minutes, but it'll halve again in 2024. The block reward, plus transaction fees, is what the network pays miners. It makes sense for miners in aggregate to expend about that much money on mining, because if the network is spending less than that, there is still profit available for additional miners joining in. If that 6.25 BTC becomes valued at 10x or 100x as much as it is today, the expenditure on mining will also be 10x or 100x larger. Obviously this can't actually exceed the energy production of the world because that's impossible, but this new artificial demand for energy can soak up lots of capacity that would otherwise go to more productive, yet less profitable, endeavors. The fact that it's using 1/200th of the world's energy production already, while it's just a toy speculation vehicle, doesn't bode well. As you correctly point out though, this additional expenditure on mining will do absolutely nothing to help the number of transactions that can be processed in any given time period.
        thebean11 6y ago
        > Let me see if I can help you. Nobody here is impressed by you, the condescension sounds ridiculous. > the expenditure on mining will also be 10x or 100x larger This is correct, but the assumption that energy will continue to represent a very large part of that expenditure is faulty. There is a huge incentive for miners to mine more efficiently, especially in this hypothetical universe where Bitcoin is driving up energy prices.. That expenditure could easily be disproportionately spent on more efficient hardware / algorithms. Alternatively Bitcoin might not be using proof of work in this hypothetical future. It's not immutable.
  - chmod775 6y ago
    > That makes no sense. If all money was USD would literally everyone be in the banking industry with no market for corn? It indeed makes no sense if you completely ignore half of the argument (and probably misunderstand it on top of that). The argument was that it makes sense to spend currency for security equal to the amount of currency you are securing, meaning if you do that for all currency, (pretty much) the sole economic activity will be securing it. Suppose for the moment that what is mining power to bitcoin is the US military to the USD. It makes no sense to spend all USD on just the military, so that it can secure the currency, does it?
    - thebean11 6y ago
      > The argument was that it makes sense to spend currency for security equal to the amount of currency you are securing You are right, I don't understand this argument at all. It only makes sense to spend the minimal amount that would keep it secure. The incentive to mine is only the block reward, which is only transaction fees plus inflation. The incentive is not the entire pool of currency.
- rawtxapp 6y ago
  I prefaced it with "Whether you like it or not", because what you think doesn't matter, you don't get to tell people what has value and what doesn't, the market decides and there's currently a market with billions of dollars in volume across many different exchanges that decides the value. You think it's a worthless tulip? Great, go and short it. I'm not sure what you mean by the 2nd paragraph, are you saying if all money was bitcoin, we'd only spend energy to secure that and we wouldn't do nothing else? That wouldn't make sense right? If all money was Bitcoin, there wouldn't be as much upside to it, because it will have already won, so you'd need to do other economic activities which will grow faster than that.
gammalost 6y ago
>the energy spent to secure it is worth it According to who, the people making all the money? It's obvious that people don't find it that simple.
gidam 6y ago
If the profit is the only measure that a lot of people here seem to consider: why not just burning the trash in the air, pouring polluted water directly in the ocean and allowing toxic material in our food chain? Do we want forbidding people to become rich doing nothing for others? These markets are bigger than several GDP of many countries, "whether you like it or not".
- rawtxapp 6y ago
  I mean you realize all those things you mentioned are happening right? Waters are polluted, global warming is real, oil/gold extraction destroys the environment. If anything, this problem is not limited to Bitcoin, we should put a carbon tax on everything with externalities. Why just focus on crypto when there are far bigger polluters?
mdemare 6y ago
You cannot compare $ (market cap) with $/year (GDP)
gorkish 6y ago
Another way to say this is that Bitcoin's value comes entirely from the sunken cost fallacy. It is a war of consumption. Whoever can waste the most resources and/or produce them the most cheaply will gain the most economic benefit. It's just another one of the forms of mutually assured destruction that we will eventually have to confront. It's unfortunate that being very obviously horrible isn't enough to change it, but the same could be said for climate change or nuclear proliferation, and these things are still moving along, full-tilt.

Maxburn 6y ago

Has anyone looked at it from the angle; does bitcoin consume more or less energy than the current banking industry?

paulgb 6y ago
Per transaction it certainly does, the proof of which being that if you were to scale the energy per transaction up to the volume of transactions in the broader economy, you end up with more energy than humans produce. I'm not sure a comparison to banking is appropriate though; much of what banks do (loans, etc.) is not obsoleted by cryptocurrencies.
- Maxburn 6y ago
  When I mentioned my concern with the energy bitcoin uses someones response was that it is less than the banking industry. It didn't pass the sniff test but I honestly didn't know once you included all the overhead real banks have. I thought it was a interesting perspective.
- rawtxapp 6y ago
  You're completely ignoring layer 2 and other off-chain places where you can exchange Bitcoin. For example, while a transaction on-chain might move only 1 Bitcoin, it's very much possible that that Bitcoin has changed hands millions of times in another layer.
  - paulgb 6y ago
    I'm ignoring Layer 2 because I think it's vaporware. Every time I look for volume numbers they are negligible compared to BTC as a whole.
    - Melting_Harps 6y ago
      It's a UX/UI issue, you as a (presumed) tech worker should know better and consider it a working beta, not vaporware. It's there, it works, but most people have not been onboarded.

thebean11 6y ago

These are getting a little bit repetitive

minikites 6y ago
Ignoring the ecological problems of Bitcoin won't make them go away.
- DethNinja 6y ago
  What about ecological impact of fiat currency/current state capitalism? Why not compare that with ecological impact of bitcoin?
  - minikites 6y ago
    I'd love to talk about the ecological impact of capitalism but criticizing capitalism goes poorly around here.
  - Guest42 6y ago
    Bitcoin is an invalid comparison and has a laundry list of cons without very many (if any) pros. Comparing dollars to bitcoins is useless. I don’t have a single bill I can pay in bitcoin and if there was, the fees would be worse than current options. I don’t want to have my salary in bitcoin as its “value” is in a quantum state. Regardless of how loud proponents keep using the same 3 arguments, bitcoin usage will never be the norm.
    - pcthrowaway 6y ago
      If you can't think of a single pro of Bitcoin, you may not understand it very well; that's ok , it's complex and new paradigms can take a while to propagate. To be clear, I want people to stop using Bitcoin. There are better cryptocurrencies which don't rely on energy burning to secure their networks, which have negligible fees, and which have near-instant confirmation times.

tomcooks 6y ago

Is the energy use going to diminish to a halt once mining is not profitable anymore? Or is energy needed also for transactions?

thebean11 6y ago
If mining becomes unprofitable -> miners will drop out -> difficulty goes down -> profitability goes back up. Miners are always necessary to process transactions.
paulgb 6y ago
When mining is not profitable (such as just after a halving for a miner who was already on the edge of profitability), miners leave the market and the difficulty rate adjusts until the market is once again in equilibrium. Transactions do take energy, but currently only a fraction (about 1/7) of the mining reward is paid for by transaction fees alone. An interesting question is whether the network can stay secure if the difficulty drops to ~1/7th of what it is today, or whether something else will have to give. (For what it's worth, even at 1/7th of the energy use the network is still incredibly wasteful by design.)
sp332 6y ago
Not much energy is required for a transaction, but the network of legitimate miners has to have more hash power than any attacker. Once the block reward gets tiny, the profit will come from transaction fees. So it will depend on whether the users collectively get enough benefit to pay the miners. If the attackers get more hash power, the blockchain will lose legitimacy as the source of truth and the whole thing will collapse.

santialbo 6y ago

I wish you could mute certain topics on HN like you can do on Twitter.

greenwich26 6y ago

Stop using MWh as some metric of environmental consequence. A MWh from a French nuclear plant or a Danish wind farm is not equivalent to a MWh from a Chinese coal power plant. Also, it's not fair that countries who primarily use wood for fuel (Africa) get to look like they're environmentally great, even though combustion of wood causes a huge amount of pollution and global warming. Average fuelwood consumption in Africa often exceeds 1000 kg/capita annually. That's got to add up to the Chinese mining a bunch of coins, right?

D13Fd 6y ago
Even if you don't believe in climate change, MWh is a useful metric. Electricity is not free. Drastically increasing demand for electricity drives up the prices for everyone, in the short term, as electricity rates go up. Even once more supply is created--not an easy thing--society as a whole still bears the risk that the Bitcoin-driven demand will go away (due, e.g., to a crash in value) leaving us with an oversupply of electricity. Either way, "Bitcoin uses more electricity than x" can be a helpful comparison to more effectively convey just what we are signing up for in adopting Bitcoin widely.

martin1975 6y ago

This among other less environmentally impactful factors is why I believe Bitcoin isn't sustainable in the long run. There are other cryptocurrencies which guarantee the same properties as bitcoin (immutability, no double spend, etc) without bitcoin's flaws. For a first attempt Bitcoin killed it. But scaling isn't its virtue.

Glench 6y ago

Folks may want to check out Chia, an energy-efficient blockchain by the creator of Bittorrent based on storage space not processing power: https://www.chia.net/ https://www.chia.net/ People are mining Chia with petabytes of storage off a single raspberry pi so the energy usage is really minimal and there's tons of over-provisionsed hard drive space out there.

idlewords 6y ago
Next year: folks balking at the high cost of hard drives may want to check out Bitcoin, which runs on surplus graphics cards.
- Glench 6y ago
  Haha yeah, I wish the Chia guys would put something in the FAQ about this because it's a common criticism. I've heard them make a convincing case that, unlike CPU cycles, there's actually a lot of over-provisioned space on existing consumer and enterprise hard drives. And unlike Bitcoin, Chia can actually be mined ("farmed") by anyone with extra space on their drives because the technical requirements are so minimal (there are people mining petabytes off a Raspberry Pi, for example). The Chia team also seems to think that if Chia actually does scale to the point of significantly altering production resources, it would be likely to just drive down the price of storage for everyone since there's no specialized hardware that makes mining Chia economically worthwhile. Plus unlike the bitcoin mining hardware, you (or corporations buying lots of drives) can use the storage space for things besides Chia. I have no idea myself if that's how the economics would work out, but it seems likely we'll find out — the network is currently at 200PB and growing: https://www.chiaexplorer.com/charts/netspace https://www.chiaexplorer.com/charts/netspace Love your work by the way! Hope you're well.