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It's actually a complete waste. All it produces is more security for the blockchain, which is of low marginal value. They could use that energy to produce somet

It's actually a complete waste. All it produces is more security for the blockchain, which is of low marginal value. They could use that energy to produce something of actual value, like hydroponic food, or desalinated water, or run a data center, or literally anything else.

wcfields 5y ago
Aluminum smelting and concrete production both take an immense amount of energy.
bogota 5y ago
Bitcoin has value that they can spend on doing all of this. You are falsely saying the only value it provides is blockchain security when im sure that isn’t even a reason they thought about when doing this. Its to produced more money for the government and hopefully that translates to better public infrastructure.
- nitrogen 5y ago
  Bitcoin has value that they can spend on doing all of this. Money doesn't directly convert into food. Someone still has to consume the energy to actually make things. By using energy to mine bitcoin to buy food, one is potentially doubling energy consumed.
wmil 5y ago
Right now there's a chicken and egg problem where cheap power is not near things that need it. Crypto mining will allow places with cheap power sources to build up energy production. Once that's established it's easier to build up infrastructure for things like data centers.
- bootlooped 5y ago
  I think it's somewhat of a Tragedy of the Commons situation. Everybody would benefit from power being built in remote places, but nobody wants to be the one to pay to build it there. I'm not seeing why crypto mining is any different though; it's a for-profit endeavor like anything else.
randomhodler84 5y ago
I’m sorry you don’t see that it has value. It has value to me. In fact, I need a secure, permissionless, censorship resistant, non-state backed value storage system more than I need hydroponic food or desalinated water. The problem is the disconnect between your wants/needs and the needs of others in the world. Waste is entirely in the eye of the beholder.
- JamilD 5y ago
  Are the benefits of proof of work worth the additional cost over other consensus algorithms, to you?
  - rawtxapp 5y ago
    PoW keeps things fair, you have to spend money on hardware and energy or become irrelevant. In other consensus systems like PoS, whoever has the most capital controls pretty much everything and has 0 incentive to sell what they get since they aren't really spending any energy for their cryptographic signature. It literally says "rich gets richer" in the protocol which is fundamentally broken in my humble opinion.
    - JamilD 5y ago
      Compute power requires money though, no? Whoever has the most capital now controls the BTC blockchain, which happens to be mostly miners in China. It’s a lot easier for me to stake ETH than to buy hundreds of GPUs. And my reward is linear with how much I stake or put down, whereas with economies of scale in mining the reward is more like quadratic. Seems to me that with PoS the rich get richer linearly, with PoW the rich get richer ~quadratically. If I spend 0.01% of what the Chinese miners spend on my mining setup, I’m not getting 0.01% of the rewards.
      - rawtxapp 5y ago
        The thing is, let's say you spend 100M$ on mining equipment today, that equipment is worth a lot less in a year from now and is worth practically nothing in 5+ years, so you can't just sit on it, you have to keep spending. Likewise with electricity, it's not free, you have to source it and spend money on it. So whatever Bitcoin reward you get barely covers your running cost + small profit margin. Imagine like you're running from a monster, you can't stop or you'll become irrelevant. Whereas with ETH, I can buy 100M$ worth of it, I'll get say 5% back which means I'm making 5M$ every year, thing is I don't have any pressure to sell it whereas the poorer stakers will have to sell to cover their cost of living or other reasons, so over time the % of my stake in eth grows. Things get even worse when you include custodians into the mix, exchanges will have much larger wallets and get much larger rewards which they may not share with the actual holders or keep a small % for themselves.
wyager 5y ago
Bitcoin subsidizes the creation of constant-output power sources (geothermal, nuclear) which are not usually economical for highly variable consumer/industrial power usage. Long-term, these sources will probably power the grid during peak hours and power Bitcoin hardware during off-peak.
- bootlooped 5y ago
  It also subsidizes the use of dirty power sources. The greenwashing of Proof of Work cryptocurrencies is insane. It's using the same amount of electricity as Argentina. https://www.vice.com/en/article/pkby7z/a-fossil-fuel-power-plant-that-mines-bitcoin-is-about-to-massively-expand https://www.vice.com/en/article/pkby7z/a-fossil-fuel-power-p...
  - wyager 5y ago
    Green energy sources are cheaper when you don’t have to scale demand hour by hour. The overwhelming majority of Bitcoin power usage is already green and that will only increase. Claims like “Bitcoin uses more electricity than <some poor country that doesn’t use much electricity>.” are totally irrelevant. Good. I want humanity to climb the Kardashev scale. If we have an invention that can help fund the creation of billions of watts of efficient energy capacity then that’s great!
    - bootlooped 5y ago
      > The overwhelming majority of Bitcoin power usage is already green and that will only increase. Is there any source for this, the first part, that it is currently powered overwhelmingly by green energy? Anything I can find suggests otherwise. And the part of the claim that Bitcoin will use a greater share of green energy in the future is not very meaningful if you expect that is also true of every other industry. https://theconversation.com/bitcoin-isnt-getting-greener-four-environmental-myths-about-cryptocurrency-debunked-155329 https://theconversation.com/bitcoin-isnt-getting-greener-fou... https://www.infokreek.com/green-bitcoin-the-impact-and-importance-of-energy-use-for-pow/ https://www.infokreek.com/green-bitcoin-the-impact-and-impor... https://medium.com/crypto-lucid/enough-with-bitcoins-greenwashing-bitcoin-uses-mainly-fossil-energy-b83256d693bc https://medium.com/crypto-lucid/enough-with-bitcoins-greenwa... https://www.motherjones.com/environment/2021/05/bitcoin-mining-fossil-fuel-plants-alive-greenidge-dresden-new-york/ https://www.motherjones.com/environment/2021/05/bitcoin-mini...
X6S1x6Okd1st 5y ago
Yeah it's a really good point that additional security for the blockchain has low value. Really the total mining reward (txfees + subsidy) should adjust to offer just enough security. We now have the mechanisms in place to do something like that through DAOs, however it seems hopeless to apply that to Bitcoin, they are so resistant towards any change what so ever. It's wild that it took the bitcoin subsidy less than 2 decades to become far too high proportional to it's externalities.
sentinel 5y ago
The counter argument here is that sound money is the foundation on which all other activities of value develop.

wcfields 5y ago

Aluminum smelting and concrete production both take an immense amount of energy.

bogota 5y ago

Bitcoin has value that they can spend on doing all of this. You are falsely saying the only value it provides is blockchain security when im sure that isn’t even a reason they thought about when doing this. Its to produced more money for the government and hopefully that translates to better public infrastructure.

nitrogen 5y ago
Bitcoin has value that they can spend on doing all of this. Money doesn't directly convert into food. Someone still has to consume the energy to actually make things. By using energy to mine bitcoin to buy food, one is potentially doubling energy consumed.

wmil 5y ago

Right now there's a chicken and egg problem where cheap power is not near things that need it. Crypto mining will allow places with cheap power sources to build up energy production. Once that's established it's easier to build up infrastructure for things like data centers.

bootlooped 5y ago
I think it's somewhat of a Tragedy of the Commons situation. Everybody would benefit from power being built in remote places, but nobody wants to be the one to pay to build it there. I'm not seeing why crypto mining is any different though; it's a for-profit endeavor like anything else.

randomhodler84 5y ago

I’m sorry you don’t see that it has value. It has value to me. In fact, I need a secure, permissionless, censorship resistant, non-state backed value storage system more than I need hydroponic food or desalinated water. The problem is the disconnect between your wants/needs and the needs of others in the world. Waste is entirely in the eye of the beholder.

JamilD 5y ago
Are the benefits of proof of work worth the additional cost over other consensus algorithms, to you?
- rawtxapp 5y ago
  PoW keeps things fair, you have to spend money on hardware and energy or become irrelevant. In other consensus systems like PoS, whoever has the most capital controls pretty much everything and has 0 incentive to sell what they get since they aren't really spending any energy for their cryptographic signature. It literally says "rich gets richer" in the protocol which is fundamentally broken in my humble opinion.
  - JamilD 5y ago
    Compute power requires money though, no? Whoever has the most capital now controls the BTC blockchain, which happens to be mostly miners in China. It’s a lot easier for me to stake ETH than to buy hundreds of GPUs. And my reward is linear with how much I stake or put down, whereas with economies of scale in mining the reward is more like quadratic. Seems to me that with PoS the rich get richer linearly, with PoW the rich get richer ~quadratically. If I spend 0.01% of what the Chinese miners spend on my mining setup, I’m not getting 0.01% of the rewards.
    - rawtxapp 5y ago
      The thing is, let's say you spend 100M$ on mining equipment today, that equipment is worth a lot less in a year from now and is worth practically nothing in 5+ years, so you can't just sit on it, you have to keep spending. Likewise with electricity, it's not free, you have to source it and spend money on it. So whatever Bitcoin reward you get barely covers your running cost + small profit margin. Imagine like you're running from a monster, you can't stop or you'll become irrelevant. Whereas with ETH, I can buy 100M$ worth of it, I'll get say 5% back which means I'm making 5M$ every year, thing is I don't have any pressure to sell it whereas the poorer stakers will have to sell to cover their cost of living or other reasons, so over time the % of my stake in eth grows. Things get even worse when you include custodians into the mix, exchanges will have much larger wallets and get much larger rewards which they may not share with the actual holders or keep a small % for themselves.

wyager 5y ago

Bitcoin subsidizes the creation of constant-output power sources (geothermal, nuclear) which are not usually economical for highly variable consumer/industrial power usage. Long-term, these sources will probably power the grid during peak hours and power Bitcoin hardware during off-peak.

bootlooped 5y ago
It also subsidizes the use of dirty power sources. The greenwashing of Proof of Work cryptocurrencies is insane. It's using the same amount of electricity as Argentina. https://www.vice.com/en/article/pkby7z/a-fossil-fuel-power-plant-that-mines-bitcoin-is-about-to-massively-expand https://www.vice.com/en/article/pkby7z/a-fossil-fuel-power-p...
- wyager 5y ago
  Green energy sources are cheaper when you don’t have to scale demand hour by hour. The overwhelming majority of Bitcoin power usage is already green and that will only increase. Claims like “Bitcoin uses more electricity than <some poor country that doesn’t use much electricity>.” are totally irrelevant. Good. I want humanity to climb the Kardashev scale. If we have an invention that can help fund the creation of billions of watts of efficient energy capacity then that’s great!
  - bootlooped 5y ago
    > The overwhelming majority of Bitcoin power usage is already green and that will only increase. Is there any source for this, the first part, that it is currently powered overwhelmingly by green energy? Anything I can find suggests otherwise. And the part of the claim that Bitcoin will use a greater share of green energy in the future is not very meaningful if you expect that is also true of every other industry. https://theconversation.com/bitcoin-isnt-getting-greener-four-environmental-myths-about-cryptocurrency-debunked-155329 https://theconversation.com/bitcoin-isnt-getting-greener-fou... https://www.infokreek.com/green-bitcoin-the-impact-and-importance-of-energy-use-for-pow/ https://www.infokreek.com/green-bitcoin-the-impact-and-impor... https://medium.com/crypto-lucid/enough-with-bitcoins-greenwashing-bitcoin-uses-mainly-fossil-energy-b83256d693bc https://medium.com/crypto-lucid/enough-with-bitcoins-greenwa... https://www.motherjones.com/environment/2021/05/bitcoin-mining-fossil-fuel-plants-alive-greenidge-dresden-new-york/ https://www.motherjones.com/environment/2021/05/bitcoin-mini...

X6S1x6Okd1st 5y ago

Yeah it's a really good point that additional security for the blockchain has low value. Really the total mining reward (txfees + subsidy) should adjust to offer just enough security. We now have the mechanisms in place to do something like that through DAOs, however it seems hopeless to apply that to Bitcoin, they are so resistant towards any change what so ever. It's wild that it took the bitcoin subsidy less than 2 decades to become far too high proportional to it's externalities.

sentinel 5y ago

The counter argument here is that sound money is the foundation on which all other activities of value develop.