9 ms·

Bitcoin and carbon dioxide emissions: Evidence from daily production decisions

42 points by pen2l 3y ago

x86x87 3y ago
Love it how the boogeyman is back once bitcoin starts doing better.
- nwiswell 3y ago
  This is an academic journal article. It was originally submitted for publication at least six months ago.
  - vaninvestment 3y ago
    Back on Hackernews.
- pornel 3y ago
  You haven't even read the abstract.
  - x86x87 3y ago
    Ha. I did read it. My comment was related to the fearmongering that it resurfacing.
- wkat4242 3y ago
  Bitcoin will start doing a lot better for sure because another block halving is coming up. I'm sure all the greedy speculators are getting ready for another bullrun.
  - latchkey 3y ago
    More like multiple ETFs are pending approval.
psychlops 3y ago
No effort was spent calculating "damages" from competing currencies or stores of wealth.
- anonporridge 3y ago
  This is where you get accused of whataboutism for asking why we're not comparing and contrasting one morally dubious choice with the alternative choice that happens to be the default.
  - uoaei 3y ago
    Well, that's literally the definition of "opportunity cost". So it's expected in any reasonable economic analysis. I'm not defending proof-of-work cryptocurrencies at all. I'm bringing it up because the culture within the field of economics generally seems to have forgotten to compare alternatives, rather than doing analysis based on some idealized vacuum scenario. Once you're aware of this you will see it everywhere.
  - psychlops 3y ago
    Does that make it a bad argument? Say we accept that Bitcoin causes damage to the environment, do we then ignore the energy expenses of the default because...I'm not sure where you are going with this. While I don't know the incentives of the author's, I suspect a reason they target Bitcoin energy expenditure because it's easy.
- jcranmer 3y ago
  The US Bureau of Engraving and Printing had greenhouse emissions of roughly 40,000 tons in 2021 to make roughly $900m worth of dollar bills. The US Mint I don't have up-to-date numbers for, but reasonable extrapolation is something like 20,000,000 tons for $5b worth of coinage. In other words, Bitcoin uses more energy, and emits more carbon, than the largest currency in circulation. If you scale it by transaction volume, it's not even close.
  - spiralx 3y ago
TheDudeMan 3y ago
Carbon tax fixes this?
- wkat4242 3y ago
  Not really. It just increases the price on it. After all energy is not free as it is. The proof of work scheme will lead to an ever-increasing energy usage. It's just hardcoded into the system. Carbon tax will just price it so that it will accelerate a bit slower.
  - microtherion 3y ago
    If you could implement a perfect global tax system, a high tax on energy used specifically for mining would be a good solution. Proof of work is designed to force miners to spend a given amount per bitcoin mined, and it doesn't matter whether that amount is spent on energy or taxes, so the tax would not actually cause any economic cost to miners. Unfortunately, such a scheme would highly incentivize cheaters, or countries opting out of the tax collection.
droffel 3y ago
In the short term, flexible power production like coal generation gets used to satisfy grid demand during situations with abnormally high power requirements. It has the benefit of being able to be turned on and off practically instantly. There is no economic incentive to build out sustainable generative capacity if it won't be running all the time, and balancing the load on renewable power is awkward (see power price rate inversions for examples of utilities paying people to use excess energy). I remain unconvinced that cryptocurrency is long term detrimental to clean power generation infrastructure. Quite the contrary, the existence of cryptocurrency to mine acts as a 'productive' sink for power produced in excess of grid baselines. In practice, our entire grid could be renewables in excess of peak demand, and cryptocurrency mining a flexible network load. It could quite possibly get us off of non-clean energy entirely.
- staplers 3y ago
  Many renewable power companies have already started mining directly at the source when demand drops and proven this concept. It's really a shame so many blindly follow group-think on this nuanced subject.
  - kokanee 3y ago
    I can't speak for others but I'm definitely not blindly following group-think on this. There are countless uses for energy, and the idea that mining crypto is the best possible use for excess renewable power is a bold statement that requires a lot of explanation.
    - staplers 3y ago
      Don't shun others on subjects you are unfamiliar with. Speak gently and listen. Perhaps to the National Hydropower Association knows a bit more than you: https://www.hydro.org/powerhouse/article/why-hydropower-owners-need-to-talk-with-bitcoin-miners/ https://www.hydro.org/powerhouse/article/why-hydropower-owne...
      - deleted 3y ago
deleted 3y ago
[deleted]
cyphertruck 3y ago
There are so many false premises here that it’s not worth listing them. But if the power in the area is coming from coal then every use of that power is equally coal based. Hair dryers use more power than bitcoin mining, ban them first. The attempt to demonize certain uses of power is just the attempt to demonize certain people in order to oppress them.
- vkou 3y ago
  Hair dryers are far more socially useful than all the cryptoshit we've seen over the past 14 years. For one, I've yet to see a hairdryer be a critical component of a large-scale swindle.
  - crtified 3y ago
    I realise I'm getting into the 3-level-deep silly semantics of a comparison I don't really care about here (and certainly have no interest in defending that which you poetically label 'cryptoshit'), but if we're going to play Bastardly Inventions comparisons, hairdryers have apparently killed quite a few people over the decades - the cause of many a tragic house fire. Google "hairdryer fire" and you'll be scrolling a looong time. And how many million$ of cryptoswindle funds would the family of each victim pay, in theory, if they could have their loved one back? How would that overall balance sheet conclude?
  - microtherion 3y ago
    I suspect con men pay above average attention to their hair (as well as other aspects of their appearance).
    - vkou 3y ago
      They also probably eat food, but no reasonable person would accuse bologna of having any part of import in your run-of-the-mill fraud.
- kibwen 3y ago
  The problem is not bitcoin's energy usage per se, the problem is that proof-of-work is a feedback loop where the more one person mines, the more everyone else needs to mine to keep up. In other words, the mere existence of proof-of-work puts a floor on the price of energy; in the presence of proof-of-work it is impossible for us as a society to ever have energy that is "too cheap to meter", because when the price of energy falls below the production price of bitcoin it economically incentivizes more miners. It's self-fulfilling conspicuous consumption for the electronic age. In contrast, one person blow-drying their hair does not create a feedback loop of more people blow-drying their hair.
meristohm 3y ago
How do the costs of our current dominant model of currency change at scale? Seems to me the cost-per-unit drops as the currency foothold expands, based primarily on existing infrastructure. Conversely, costs to "mine" bitcoin and similar proof-of-work currencies increase over time, unless I'm mistaken. The infrastructure is already in place, so it seems absolutely bonkers for costs to go up at scale. Is the argument for bitcoin that in the long run (hundreds of years), with bitcoin the global currency and no longer being mined since it hit the cap, costs will on average be less than bills/coins/credit/cheques?
- snailmailman 3y ago
  The mining must continue. Mined blocks allow transactions to occur. Without mining there is no transactions either. In theory, instead of getting paid through newly minted bitcoin, the miners get paid through transaction fees instead. The cost of mining doesn't always rise though, it adjusts based on the number of miners competing for the prize. If you work harder than everyone else, you get paid more. So usually this cost rises. But if it stops being profitable and lots of people stop mining, the cost of mining will decrease.
  - wkat4242 3y ago
    > The mining must continue. Mined blocks allow transactions to occur. Without mining there is no transactions either. Yes. BUT, the energy used for the actual transaction processing is negligible compared to the energy wasted on the random number hashing that is mining. I could probably process all the world's bitcoin transactions on a raspberry pi in realtime if this hadn't been artificially coupled to doing a ton of mathematical busywork. Of course there is a reason for this busywork, meaning not everyone can do it. But this busywork really should be replaced with something less harmful to the environment like the proof of stake ETH has implemented now.
dang 3y ago
This was commented about here before the Bitcoin paper even came out: https://news.ycombinator.com/item?id=253999 https://news.ycombinator.com/item?id=253999

42 points by pen2l 3y ago

x86x87 3y ago

Love it how the boogeyman is back once bitcoin starts doing better.

nwiswell 3y ago
This is an academic journal article. It was originally submitted for publication at least six months ago.
- vaninvestment 3y ago
  Back on Hackernews.
pornel 3y ago
You haven't even read the abstract.
- x86x87 3y ago
  Ha. I did read it. My comment was related to the fearmongering that it resurfacing.
wkat4242 3y ago
Bitcoin will start doing a lot better for sure because another block halving is coming up. I'm sure all the greedy speculators are getting ready for another bullrun.
- latchkey 3y ago
  More like multiple ETFs are pending approval.

psychlops 3y ago

No effort was spent calculating "damages" from competing currencies or stores of wealth.

anonporridge 3y ago
This is where you get accused of whataboutism for asking why we're not comparing and contrasting one morally dubious choice with the alternative choice that happens to be the default.
- uoaei 3y ago
  Well, that's literally the definition of "opportunity cost". So it's expected in any reasonable economic analysis. I'm not defending proof-of-work cryptocurrencies at all. I'm bringing it up because the culture within the field of economics generally seems to have forgotten to compare alternatives, rather than doing analysis based on some idealized vacuum scenario. Once you're aware of this you will see it everywhere.
- psychlops 3y ago
  Does that make it a bad argument? Say we accept that Bitcoin causes damage to the environment, do we then ignore the energy expenses of the default because...I'm not sure where you are going with this. While I don't know the incentives of the author's, I suspect a reason they target Bitcoin energy expenditure because it's easy.
jcranmer 3y ago
The US Bureau of Engraving and Printing had greenhouse emissions of roughly 40,000 tons in 2021 to make roughly $900m worth of dollar bills. The US Mint I don't have up-to-date numbers for, but reasonable extrapolation is something like 20,000,000 tons for $5b worth of coinage. In other words, Bitcoin uses more energy, and emits more carbon, than the largest currency in circulation. If you scale it by transaction volume, it's not even close.
- spiralx 3y ago

TheDudeMan 3y ago

Carbon tax fixes this?

wkat4242 3y ago
Not really. It just increases the price on it. After all energy is not free as it is. The proof of work scheme will lead to an ever-increasing energy usage. It's just hardcoded into the system. Carbon tax will just price it so that it will accelerate a bit slower.
- microtherion 3y ago
  If you could implement a perfect global tax system, a high tax on energy used specifically for mining would be a good solution. Proof of work is designed to force miners to spend a given amount per bitcoin mined, and it doesn't matter whether that amount is spent on energy or taxes, so the tax would not actually cause any economic cost to miners. Unfortunately, such a scheme would highly incentivize cheaters, or countries opting out of the tax collection.

droffel 3y ago

In the short term, flexible power production like coal generation gets used to satisfy grid demand during situations with abnormally high power requirements. It has the benefit of being able to be turned on and off practically instantly. There is no economic incentive to build out sustainable generative capacity if it won't be running all the time, and balancing the load on renewable power is awkward (see power price rate inversions for examples of utilities paying people to use excess energy). I remain unconvinced that cryptocurrency is long term detrimental to clean power generation infrastructure. Quite the contrary, the existence of cryptocurrency to mine acts as a 'productive' sink for power produced in excess of grid baselines. In practice, our entire grid could be renewables in excess of peak demand, and cryptocurrency mining a flexible network load. It could quite possibly get us off of non-clean energy entirely.

staplers 3y ago
Many renewable power companies have already started mining directly at the source when demand drops and proven this concept. It's really a shame so many blindly follow group-think on this nuanced subject.
- kokanee 3y ago
  I can't speak for others but I'm definitely not blindly following group-think on this. There are countless uses for energy, and the idea that mining crypto is the best possible use for excess renewable power is a bold statement that requires a lot of explanation.
  - staplers 3y ago
    Don't shun others on subjects you are unfamiliar with. Speak gently and listen. Perhaps to the National Hydropower Association knows a bit more than you: https://www.hydro.org/powerhouse/article/why-hydropower-owners-need-to-talk-with-bitcoin-miners/ https://www.hydro.org/powerhouse/article/why-hydropower-owne...
    - deleted 3y ago

deleted 3y ago

[deleted]

cyphertruck 3y ago

There are so many false premises here that it’s not worth listing them. But if the power in the area is coming from coal then every use of that power is equally coal based. Hair dryers use more power than bitcoin mining, ban them first. The attempt to demonize certain uses of power is just the attempt to demonize certain people in order to oppress them.

vkou 3y ago
Hair dryers are far more socially useful than all the cryptoshit we've seen over the past 14 years. For one, I've yet to see a hairdryer be a critical component of a large-scale swindle.
- crtified 3y ago
  I realise I'm getting into the 3-level-deep silly semantics of a comparison I don't really care about here (and certainly have no interest in defending that which you poetically label 'cryptoshit'), but if we're going to play Bastardly Inventions comparisons, hairdryers have apparently killed quite a few people over the decades - the cause of many a tragic house fire. Google "hairdryer fire" and you'll be scrolling a looong time. And how many million$ of cryptoswindle funds would the family of each victim pay, in theory, if they could have their loved one back? How would that overall balance sheet conclude?
- microtherion 3y ago
  I suspect con men pay above average attention to their hair (as well as other aspects of their appearance).
  - vkou 3y ago
    They also probably eat food, but no reasonable person would accuse bologna of having any part of import in your run-of-the-mill fraud.
kibwen 3y ago
The problem is not bitcoin's energy usage per se, the problem is that proof-of-work is a feedback loop where the more one person mines, the more everyone else needs to mine to keep up. In other words, the mere existence of proof-of-work puts a floor on the price of energy; in the presence of proof-of-work it is impossible for us as a society to ever have energy that is "too cheap to meter", because when the price of energy falls below the production price of bitcoin it economically incentivizes more miners. It's self-fulfilling conspicuous consumption for the electronic age. In contrast, one person blow-drying their hair does not create a feedback loop of more people blow-drying their hair.

meristohm 3y ago

How do the costs of our current dominant model of currency change at scale? Seems to me the cost-per-unit drops as the currency foothold expands, based primarily on existing infrastructure. Conversely, costs to "mine" bitcoin and similar proof-of-work currencies increase over time, unless I'm mistaken. The infrastructure is already in place, so it seems absolutely bonkers for costs to go up at scale. Is the argument for bitcoin that in the long run (hundreds of years), with bitcoin the global currency and no longer being mined since it hit the cap, costs will on average be less than bills/coins/credit/cheques?

snailmailman 3y ago
The mining must continue. Mined blocks allow transactions to occur. Without mining there is no transactions either. In theory, instead of getting paid through newly minted bitcoin, the miners get paid through transaction fees instead. The cost of mining doesn't always rise though, it adjusts based on the number of miners competing for the prize. If you work harder than everyone else, you get paid more. So usually this cost rises. But if it stops being profitable and lots of people stop mining, the cost of mining will decrease.
- wkat4242 3y ago
  > The mining must continue. Mined blocks allow transactions to occur. Without mining there is no transactions either. Yes. BUT, the energy used for the actual transaction processing is negligible compared to the energy wasted on the random number hashing that is mining. I could probably process all the world's bitcoin transactions on a raspberry pi in realtime if this hadn't been artificially coupled to doing a ton of mathematical busywork. Of course there is a reason for this busywork, meaning not everyone can do it. But this busywork really should be replaced with something less harmful to the environment like the proof of stake ETH has implemented now.

dang 3y ago

This was commented about here before the Bitcoin paper even came out: https://news.ycombinator.com/item?id=253999 https://news.ycombinator.com/item?id=253999