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I've had a contrarian thought about Bitcoin and energy lately. I am not convinced it's right so it's just a speculation. A lot of people have scratched their h
by api 6y ago
I've had a contrarian thought about Bitcoin and energy lately. I am not convinced it's right so it's just a speculation.
A lot of people have scratched their heads about Elon's backing of cryptocurrency while at the same time apparently being concerned about climate change.
What if it actually does make sense? What if increasing energy demand actually will help transition toward lower carbon emissions?
When demand is stable or falling, industries become very conservative. Why invest in anything new if demand is static? Just run that old clunky coal burner plant as long as possible.
But if demand is rising you have to expand. That means deploying new stuff. What new stuff do you build now? Well there's gas, which is mostly lower carbon than coal, but most new capacity being built is solar and wind. So you build that, then you build storage to back it.
Once that's done, then why invest more money in stringing along those ancient coal burners?
- wmf 6y agoThis has been discussed a bunch on HN and elsewhere in recent months. I haven't seen any comprehensive analysis of it, but I have a few concerns: If you create net new demand then fill it with renewables you haven't reduced emissions at all because the coal plants are still running. In theory, higher demand can make new tech cheaper due to economy of scale but the effect isn't linear; it's probably like an S-curve. Where are renewables on that scale? Are they already large enough that diminishing returns are kicking in? How much crypto energy demand would move renewable costs? Would it need to be 10% of existing usage? Higher? Lower?
- airza 6y agoThe very cynical (and imo correct view) is that he is very interested in the aggregate demand side and not particularly interested in the saving the planet side.
- sadness3 6y agoWhat is too often left out of the discussion is the highly inefficient traditional establishment which are the alternative for currency trading and distributed financial activity. Most studies show that the traditional approach uses more energy.
- asd4232 6y agoMore energy in absolute terms, or per financial transaction? I mean, what matters is whether replacing the entire financial system with Bitcoin would produce more emissions through mining than the system currently does.
- bingbong70 6y agoThe current system is backed by the largest polluter on the planet, the US military. Bitcoin in comparison uses less energy but its too early for some to recognize this fact. Bitcoin is the settlement layer, tools built on top of it (like 2nd/3rd layer tech that can achieve 100K-1M+ transactions per second) require very little additional energy.
- bingbong70 6y agoRather than downvote how about telling us where you disagree? Seems silly to rob readers of a potentially useful rebuttal.
- aaron-santos 6y ago> If you create net new demand then fill it with renewables you haven't reduced emissions at all because the coal plants are still running. There is a non-zero possibility that the public's perception of coal power plants being associated with Bitcoin mining increases to a point where the support to ban coal power plants reaches an actionable threshold. Consider who benefits from delivering a setback to Bitcoin and see if they enter the arena of public opinion on this issue.
- api 6y agoYes you do have a period when you have more renewables and the coal is still running. Then it ages out and you don’t build more.
- kaba0 6y agoElon is an egoistic billionaire scammer, hardly caring about anything other than his wallet.
- api 6y agoIf he only cared about his wallet he would have gone into finance, not tried to build an aerospace company and do other absurdly hard things. Finance is where all the cushy easy money is. He is definitely egotistical but he obviously has more complex motives.
- kaba0 6y agoLike enjoying playing with stocks? And frankly, he would not be the richest person on Earth if finance was where the sweet old money is.