5 ms·

The Bitcoin Energy Argument That Nobody Makes

18 points by leifg 5y ago

smoldesu 5y ago
I'd like to take this article seriously, but it's missing a ton of punctuation which leads me to believe it never got proofread...
aeternum 5y ago
>Once we hit 100% energy shortage Here's the fallacy. We will never hit 100% energy shortage. It's all about equilibrium. Throughout history energy prices on the whole have declined and continue to decline precipitously. Especially from when trees were our primary energy source.
- hammyhavoc 5y ago
  Energy prices are rising: https://www.bbc.co.uk/news/uk-northern-ireland-60227306 https://www.bbc.co.uk/news/uk-northern-ireland-60227306
  - aeternum 5y ago
    Oil futures in 2020 were negatively priced so a rise and perturbations are to be expected. There can still be short-term rises amid a long-term decline. Are we also going to declare climate change/global warming over after a single year drop in temp? I hope not.
    - hammyhavoc 5y ago
      Saying this as the most ignorant sack-of-shit 28 year-old you're ever likely to meet, does this then mean that energy prices may indeed reduce over time and go back to their figure from several years ago in equivocal value once inflation is taken into consideration? And do you have any sources to show this has happened before?
      - aeternum 5y ago
        Yes, in inflation-adjusted (real) terms, energy costs have generally decreased. https://www.eia.gov/totalenergy/data/annual/showtext.php?t=ptb0810 https://www.eia.gov/totalenergy/data/annual/showtext.php?t=p... and https://www.in2013dollars.com/Electricity/price-inflation https://www.in2013dollars.com/Electricity/price-inflation Since electricity hasn't been around for that long (relatively), another way to look at it is the cost of light. We take it for granted but being able to do anything at night was really a luxury for the rich for much of human history: https://www.vox.com/2015/6/9/8749751/historic-cost-of-lighting https://www.vox.com/2015/6/9/8749751/historic-cost-of-lighti...
        hammyhavoc 5y ago
        You're amazing for sharing this with me, thank you so much.
jerry1979 5y ago
Isn't it possible to rate limit grid customers based on their use patterns? Couldn't sensible local policies prevent industrial miners from increasing power costs for residential users? I think most people want to prevent emissions, but the following line of argumentation is getting old: Green energy? Not good enough. Stranded energy? Not good enough. Stranded green energy? Not good enough.
- presentation 5y ago
  What he seems to be saying is that by design proof of work incentivizes fully saturating available energy, and that the only world in which it won’t compete with other uses of energy is one in which we have more than enough capacity for all other uses, plus excess, and that until we’re there being in favor of devoting energy to proof of work is functionally equivalent to being against preventing emissions. I’m unaware of the debate, so as a lay man I admit I don’t know if the argument is old or not (and I think how old it is is irrelevant to whether or not it is right), but I find this line of argument compelling.
dustyquince 5y ago
I actually agree that the carbon-intensiveness of the power source is no more relevant for Bitcoin than it is for any other use of energy. We use energy to do things we think are valuable. All of us do. If the distribution of costs and benefits of using that energy is out-of-whack, then our focus should be on aligning them better. Carbon-intensive energy use in many ways does a bad job of aligning those costs and benefits, (though I think that case is generally overstated). So, at least some uses of energy produce value, and we should focus on making sure that those who derive that value also bear the cost. The real issue with the article happens here: 'It should rather be: “Is it worth it?”. I answer this question with a clear: Hell no.' But it's anything but clear. The article treats it as an accepted truth that the benefit isn't proportional to the cost. It's not an accepted truth. Millions of people have determined that the value of what PoW blockchains do is worth using some energy to make it happen. Does the author derive a great deal of value from the Bitcoin blockchain? Clearly not. So don't use it. Just because one doesn't derive any benefit from a particular use of energy doesn't imply that nobody does or that nobody should. There are exajoules of energy used to do things that I derive 0 value from. I use energy in a manner that many would consider to be frivolous. There's no objective function to determine the utility of a particular use of energy. Should the costs be borne by the same people who derive the benefit? Absolutely. Should we treat as implicitly accepted that a particular use of energy is frivolous and should be stopped? Not if you care about your own ability to use energy to do things you think are valuable.
- dumpsterdiver 5y ago
  > Should the costs be borne by the same people who derive the benefit? Absolutely. Apologies in advance, but for the sake of argument I'm going to create a straw man for a moment. I'll do my best to bring my straw man argument back around to fit the context of this conversation. Sometimes the real cost of an activity isn't fully apparent until a crisis emerges from those activities, such as the Flint, Michigan water crisis. And sometimes by the time we figure out how much damage has really been done, the people who "should have paid" are long gone (soil contamination is still a good example here). Sadly, humanity has proven time and again that we are entirely willing to dump our problems onto others in order to further enrich ourselves. At the most visible level there is inflation, where producers happily pass the burden of increased operational costs on to the consumer. When land tax increases, profit doesn't go down, rent simply goes up. My point is that the true cost of an activity isn't always readily apparent, and sometimes humanity will be left to foot the bill. Case in point, in the distant future our planet will be a very unsafe place to just run around digging holes in - because you might run into a nuclear waste deposit. All of the measures that we take to try to scare people away from these sites (https://en.wikipedia.org/wiki/Long-time_nuclear_waste_warning_messages https://en.wikipedia.org/wiki/Long-time_nuclear_waste_warnin...), may in fact end up piquing their curiosity and attracting them. So when you talk about "the costs being borne by the same people who derive benefit", to my ears that sounds very tone deaf when you consider that those costs involve burying nuclear waste and marking those locations on maps that will very likely become lost long before the waste site is safe. If you don't care about the humans of the far future, then I don't think we even have enough common ground to constructively argue upon. > Should we treat as implicitly accepted that a particular use of energy is frivolous and should be stopped? Not if you care about your own ability to use energy to do things you think are valuable. Implicitly accept? No, I think we should explicitly reject frivolous energy use on the grounds that we endanger the future inhabitants of this planet with the byproducts of that energy use.
throwaway22032 5y ago
Isn't the root issue that money itself is an "inefficient" allocation mechanism for scarce resources? The theoretical economics idea seems to be that it's some sort of voting system. But it's a voting system in which I have a thousand times more votes than someone else. If a fairly well off person thinks that X is worth doing, they have an outsized say in whether we use energy on X. And probably, if X has anything to do with business or investment, this advantage accumulates. I agree with the article in principle as a result of the above argumentation but I'm still not convinced that it leads us to a situation in which Bitcoin is somehow something special. You could make the same argument for essentially anything that has market demand. If you're going to have some central planning actor decide that Bitcoin is a waste of energy then I don't see how you can avoid the conclusion that me taking a holiday is, that plastic fidget spinners are, etc etc. You end up in the coronavirus 2020 "what is essential" situation really quickly. I sometimes wonder if there's a misgiving that Bitcoin is somehow set up to eventually use "all energy". This is incorrect, because the amount of mining that will occur is governed by transaction fees. Logically a person is never going to spend 100% of their wealth on simply transferring bitcoin from one place to another.
troon-lover 5y ago
This post is dumb and the author is trolling. The discussion about energy usage took place at length over 10s of forum pages in 2021. To the author: you should be ashamed of yourself for not mentioning or acknowledging the well formed reasons and longform discussions of the early bitcoin community. You also seem to be unaware of their point.
- deleted 5y ago
  [deleted]
- presentation 5y ago
  Guess everybody knows what’s going on in your 10’s of forum pages lol. What are you referring to and what’s the substantive argument against the idea that “proof of work is uniquely incentivized to always maximize energy consumption by design?” As someone who lives under a rock and has not read a single one of these aforementioned forum pages, would love some clarity.
walkhour 5y ago
I think the author actually does a good job summing up the usual arguments given to dismiss Bitcoin not being environment friendly but I don't think they are refuted. Bitcoin uses less energy than completely useless things (like Christmas lights) and way way way less energy than actual harmful things (videogames). However we just can't stop taking about how harmful Bitcoin is to the environment and if anyone suggested banning gold for similar reasons they would simply be laughed out of the room. Honestly it looks like there are no good Bitcoin externalities that can be pointed out, so let's just zero in into this one, however inconsistent we'll be towards other industries.
- rspeele 5y ago
  The author does point out your Christmas light comparison but identifies a key distinction: for Christmas lights, the point is the colorful lighting for human enjoyment. That's the upside and the energy cost is the downside. Coming up with a lower-energy way to generate the same colorful lighting will save energy. For Bitcoin, the destruction of value is the point. The nature of proof-of-work is that you continuously expend more resources than a hypothetical attacker possibly could. If resources get cheaper or more abundant, you must burn more of them to compensate, because your attacker can too and you always have to outpace them. So Bitcoin incentivizes using an "expensive" amount of energy no matter how "cheap" energy gets.

18 points by leifg 5y ago

I'd like to take this article seriously, but it's missing a ton of punctuation which leads me to believe it never got proofread...

aeternum 5y ago

>Once we hit 100% energy shortage Here's the fallacy. We will never hit 100% energy shortage. It's all about equilibrium. Throughout history energy prices on the whole have declined and continue to decline precipitously. Especially from when trees were our primary energy source.

hammyhavoc 5y ago
Energy prices are rising: https://www.bbc.co.uk/news/uk-northern-ireland-60227306 https://www.bbc.co.uk/news/uk-northern-ireland-60227306
- aeternum 5y ago
  Oil futures in 2020 were negatively priced so a rise and perturbations are to be expected. There can still be short-term rises amid a long-term decline. Are we also going to declare climate change/global warming over after a single year drop in temp? I hope not.
  - hammyhavoc 5y ago
    Saying this as the most ignorant sack-of-shit 28 year-old you're ever likely to meet, does this then mean that energy prices may indeed reduce over time and go back to their figure from several years ago in equivocal value once inflation is taken into consideration? And do you have any sources to show this has happened before?
    - aeternum 5y ago
      Yes, in inflation-adjusted (real) terms, energy costs have generally decreased. https://www.eia.gov/totalenergy/data/annual/showtext.php?t=ptb0810 https://www.eia.gov/totalenergy/data/annual/showtext.php?t=p... and https://www.in2013dollars.com/Electricity/price-inflation https://www.in2013dollars.com/Electricity/price-inflation Since electricity hasn't been around for that long (relatively), another way to look at it is the cost of light. We take it for granted but being able to do anything at night was really a luxury for the rich for much of human history: https://www.vox.com/2015/6/9/8749751/historic-cost-of-lighting https://www.vox.com/2015/6/9/8749751/historic-cost-of-lighti...
      - hammyhavoc 5y ago
        You're amazing for sharing this with me, thank you so much.

jerry1979 5y ago

Isn't it possible to rate limit grid customers based on their use patterns? Couldn't sensible local policies prevent industrial miners from increasing power costs for residential users? I think most people want to prevent emissions, but the following line of argumentation is getting old: Green energy? Not good enough. Stranded energy? Not good enough. Stranded green energy? Not good enough.

presentation 5y ago
What he seems to be saying is that by design proof of work incentivizes fully saturating available energy, and that the only world in which it won’t compete with other uses of energy is one in which we have more than enough capacity for all other uses, plus excess, and that until we’re there being in favor of devoting energy to proof of work is functionally equivalent to being against preventing emissions. I’m unaware of the debate, so as a lay man I admit I don’t know if the argument is old or not (and I think how old it is is irrelevant to whether or not it is right), but I find this line of argument compelling.

dustyquince 5y ago

I actually agree that the carbon-intensiveness of the power source is no more relevant for Bitcoin than it is for any other use of energy. We use energy to do things we think are valuable. All of us do. If the distribution of costs and benefits of using that energy is out-of-whack, then our focus should be on aligning them better. Carbon-intensive energy use in many ways does a bad job of aligning those costs and benefits, (though I think that case is generally overstated). So, at least some uses of energy produce value, and we should focus on making sure that those who derive that value also bear the cost. The real issue with the article happens here: 'It should rather be: “Is it worth it?”. I answer this question with a clear: Hell no.' But it's anything but clear. The article treats it as an accepted truth that the benefit isn't proportional to the cost. It's not an accepted truth. Millions of people have determined that the value of what PoW blockchains do is worth using some energy to make it happen. Does the author derive a great deal of value from the Bitcoin blockchain? Clearly not. So don't use it. Just because one doesn't derive any benefit from a particular use of energy doesn't imply that nobody does or that nobody should. There are exajoules of energy used to do things that I derive 0 value from. I use energy in a manner that many would consider to be frivolous. There's no objective function to determine the utility of a particular use of energy. Should the costs be borne by the same people who derive the benefit? Absolutely. Should we treat as implicitly accepted that a particular use of energy is frivolous and should be stopped? Not if you care about your own ability to use energy to do things you think are valuable.

dumpsterdiver 5y ago
> Should the costs be borne by the same people who derive the benefit? Absolutely. Apologies in advance, but for the sake of argument I'm going to create a straw man for a moment. I'll do my best to bring my straw man argument back around to fit the context of this conversation. Sometimes the real cost of an activity isn't fully apparent until a crisis emerges from those activities, such as the Flint, Michigan water crisis. And sometimes by the time we figure out how much damage has really been done, the people who "should have paid" are long gone (soil contamination is still a good example here). Sadly, humanity has proven time and again that we are entirely willing to dump our problems onto others in order to further enrich ourselves. At the most visible level there is inflation, where producers happily pass the burden of increased operational costs on to the consumer. When land tax increases, profit doesn't go down, rent simply goes up. My point is that the true cost of an activity isn't always readily apparent, and sometimes humanity will be left to foot the bill. Case in point, in the distant future our planet will be a very unsafe place to just run around digging holes in - because you might run into a nuclear waste deposit. All of the measures that we take to try to scare people away from these sites (https://en.wikipedia.org/wiki/Long-time_nuclear_waste_warning_messages https://en.wikipedia.org/wiki/Long-time_nuclear_waste_warnin...), may in fact end up piquing their curiosity and attracting them. So when you talk about "the costs being borne by the same people who derive benefit", to my ears that sounds very tone deaf when you consider that those costs involve burying nuclear waste and marking those locations on maps that will very likely become lost long before the waste site is safe. If you don't care about the humans of the far future, then I don't think we even have enough common ground to constructively argue upon. > Should we treat as implicitly accepted that a particular use of energy is frivolous and should be stopped? Not if you care about your own ability to use energy to do things you think are valuable. Implicitly accept? No, I think we should explicitly reject frivolous energy use on the grounds that we endanger the future inhabitants of this planet with the byproducts of that energy use.

throwaway22032 5y ago

Isn't the root issue that money itself is an "inefficient" allocation mechanism for scarce resources? The theoretical economics idea seems to be that it's some sort of voting system. But it's a voting system in which I have a thousand times more votes than someone else. If a fairly well off person thinks that X is worth doing, they have an outsized say in whether we use energy on X. And probably, if X has anything to do with business or investment, this advantage accumulates. I agree with the article in principle as a result of the above argumentation but I'm still not convinced that it leads us to a situation in which Bitcoin is somehow something special. You could make the same argument for essentially anything that has market demand. If you're going to have some central planning actor decide that Bitcoin is a waste of energy then I don't see how you can avoid the conclusion that me taking a holiday is, that plastic fidget spinners are, etc etc. You end up in the coronavirus 2020 "what is essential" situation really quickly. I sometimes wonder if there's a misgiving that Bitcoin is somehow set up to eventually use "all energy". This is incorrect, because the amount of mining that will occur is governed by transaction fees. Logically a person is never going to spend 100% of their wealth on simply transferring bitcoin from one place to another.

troon-lover 5y ago

This post is dumb and the author is trolling. The discussion about energy usage took place at length over 10s of forum pages in 2021. To the author: you should be ashamed of yourself for not mentioning or acknowledging the well formed reasons and longform discussions of the early bitcoin community. You also seem to be unaware of their point.

deleted 5y ago
[deleted]
presentation 5y ago
Guess everybody knows what’s going on in your 10’s of forum pages lol. What are you referring to and what’s the substantive argument against the idea that “proof of work is uniquely incentivized to always maximize energy consumption by design?” As someone who lives under a rock and has not read a single one of these aforementioned forum pages, would love some clarity.

walkhour 5y ago

I think the author actually does a good job summing up the usual arguments given to dismiss Bitcoin not being environment friendly but I don't think they are refuted. Bitcoin uses less energy than completely useless things (like Christmas lights) and way way way less energy than actual harmful things (videogames). However we just can't stop taking about how harmful Bitcoin is to the environment and if anyone suggested banning gold for similar reasons they would simply be laughed out of the room. Honestly it looks like there are no good Bitcoin externalities that can be pointed out, so let's just zero in into this one, however inconsistent we'll be towards other industries.

rspeele 5y ago
The author does point out your Christmas light comparison but identifies a key distinction: for Christmas lights, the point is the colorful lighting for human enjoyment. That's the upside and the energy cost is the downside. Coming up with a lower-energy way to generate the same colorful lighting will save energy. For Bitcoin, the destruction of value is the point. The nature of proof-of-work is that you continuously expend more resources than a hypothetical attacker possibly could. If resources get cheaper or more abundant, you must burn more of them to compensate, because your attacker can too and you always have to outpace them. So Bitcoin incentivizes using an "expensive" amount of energy no matter how "cheap" energy gets.