Bitcoin may consume as much energy as all data centers globally(digiconomist.net) |
Bitcoin may consume as much energy as all data centers globally(digiconomist.net) |
At this point BTC is a speculative bubble that benefits a very small group to the detriment of the rest of us.
I also have a lot of personal frustration with how mining (more of ETH and others) is impacting the global GPU supply.
A whole cottage industry has cropped up of sites, discords, etc that provide notifications when GPUs come into stock. Not all the issues are related to mining, but it certainly is enough of an issue that Nvidia has announced mining specific cards and is throttling mining on their 3060 series. AMD is rumored to be doing similar soon.
Edit: Replaced 'anti-social Ponzi scheme' with 'speculative bubble' to be more accurate.
I'm curious to hear what dumb use of energy you have in your head that rivals this level of stupidity.
edit: I'll address the "apple to oranges" replies here: you can combine the energy consumed by VISA and whatever other financial service exists that would together match the feature-set of bitcoin (eg. VISA + Bank of America + ...) and you'd still have energy consumption many orders of magnitude lower than the Bitcoin network.
[0] https://usa.visa.com/dam/VCOM/download/corporate/media/visan...
How does one ban a blockchain? Serious question.
Would you only arrest the miners or would you also arrest non-mining full node operators?
How could you tell if regular citizens were transacting with POW coins? Would you subpoena telecom companies for records where customers have visited known sites which transact in POW coins? Or would you go the AT&T route and pipe telecom traffic through a little cabinet that uses deep packet inspection to sniff out POW transactions occurring over RPC?
What about traders? Would you outlaw trading POW coins and make exchange exclude US customers? That could make for some serious arbitrage opportunities for tech savy citizens.
I would genuinely appreciate your answer to any or all of these questions.
I build cryptocurrency software and would gain a lot from additional insight into the threat model I face in the not-so-distant future.
Then the demand for the crypto currency plummets.
In 2010-2011, I traded BTC for USD in person, with a laptop on wifi. And via PayPal with someone I met on IRC, where there was a bot that kept track of your reputation so the BTC sellers would know if it was safe to sell to you.
At that time the price of 1 BTC was about $1 USD.
I think we'd see something similar, if there was an outright ban.
Also you can look for energy consumption. Towns in upstate New York are banning new permits for mining. So it's already happened.
In short, society has certain expectations and if you violate those there will be consequences. Govt and laws are always behind the publics will, so it's coming for cryptos. Which survive is the real speculative bets that will pay off
Then what? Do you end up with this problem? https://news.ycombinator.com/item?id=26226470
speculative bubble =/= ponzi scheme
BTC mining makes the miners more wealthy. In service of the BTC network, which has what utility?
There are quite a number of criminal or at least grey market uses for BTC.
But what are the legitimate uses that are not as well or better served by the traditional payment networks?
I get that people feel this is important, or perhaps are excited to share something wrong with Bitcoin, but I’d be surprised if 99% of the regular visitors to this site haven’t heard about Bitcoin’s energy use and perhaps heard some counterarguments already several times.
It really does seem like a grudge more than a genuine care. For example, you can often find some of the same accounts parroting cherry picked takes or intentionally misleading comparisons in the comments.
I have money invested in cryptocurrencies, and still don't like that it's an incredible waste of energy.
well not really, the amount of bitcoin to be mined is fixed (and actually drops in the long term), so the amount of money that is up for grabs should stay the same unless the price changes. Therefore it's more reasonable to say that the increase is power consumption is fueled by the increase in price, not because of increase in efficiency.
This only works out if all non-DC bitcoin related power usage (At home mining), is higher than all non-Bitcoin related DC power usage. Are there really that many people mining at home vs. in some sort of DC?
Instead of looking for ways to curtail it (because that ALWAYS works, right?) we should be looking for cleaner ways to power it like renewables and nuclear.
That means that whatever practical good bitcoin provides, we’ve DOUBLED the energy usage of data centers.
Is that good worth having to build that much additional capacity?
What about the problem that bitcoin keeps increasing it’s energy usage?
And finally, is there no more efficient (in energy usage) way of doing the same thing?
Bitcoin's future value may end up being no more and no less than helping us preserve a functioning world economy given an unprecedented financial crisis. Is that worth double the energy of data centers? Yes, because without it you will have 0 data centers.
Solutions will have to be implemented to curtail that energy use. Could be better power sources, could be more efficient consensus mechanisms.
- mining metal for coins of fiat currency
- mining gold because people don't trust fiat (digging otherwise useless-in-that-quantity rocks out of the earth, a Proof of... hmm... WORK?)
- running stock exchanges because people don't trust gold either (tungsten has almost the same density)
- smelting the plain metal and gold
- the US military which backs the dollar, and the other armies which compete with it
- manufacturing paper for fiat (lots of water consumption?)
- printing fiat
- transporting fiat
- transporting bank employees
- building shiny glass palaces for banks to signal their status (PoW)
- flying bank managers across the planet to signal status (PoW)
- the office equipment, servers, and employees of banks
- existing fiat currency becoming garbage due to wear, better fakes, and inflation
- the network of hundreds of thousands of ATMs and the COBOL mainframes which back them
- Mining metals for GPUs and other devices that run proof of work
- Manufacturing those devices
- Transporting those devices
- Building shiny glass bitcoin cafes.
I'm aware that several of your list items dwarf my items, but it's useful to still remember that producing (and as the article states, using) electronics _also_ has a cost.
That puts it at about 0.1% the energy usage of Bitcoin. Now compare how much transaction volume Bitcoin supports versus that of USD cash currency.
- space exploration
- streaming videos
- grocery stores
- cars
- shipping containers full of fidget spinners
- building and maintaining zoos
- giant casinos in Las Vegas
- hospitals
And all the other things associated with the so-called "green" USD ecosystem.
HN has discussed this to death.
If they are going to ban ICE vehicles, crypto mining is worth considering for the same fate, especially when energy efficient alternatives exist
They're joyless and authoritarian.
You can dismiss it each time it comes up, but the reality of the situation isn't changing.
So yes bitcoin absolutely consumes energy, it goes hand it hand with bitcoin being a popular speculation vehicle.
My view is definitely that Bitcoin solves a problem I don't have, in just about the worst way possible (proof of work).
I truly believe it’s simply that they want it to fail since they missed the boat, and their ego is on the line as a forward thinking, “ahead of the curve” technologist.
It can’t be the biggest development of the last decade, what would that say about them? Therefore, inefficient ponzi that’s only used for drugs!
I certainly don't think so.
Thus most of the analysis is in the framework of systems efficiency (obviously, we're tech nerds afterall).
Crypto is a breakthrough in distributed computing, but utterly under-performs in efficiency against typical computing solutions. This is because of the trade-offs made in order to create a decentralized, permissionless, censorship resistant network.
dollars-per-btc * btc-reward-per-block / kwh-per-dollar
Here on HN people seem to mostly understand that this means:
1. Higher bitcoin valuation leads directly to more spending on mining
2. Cheaper energy just leads to more energy consumed by mining for the same amount of spending
3. The amount spent on mining has no market-driven correlation to the amount "needed" for security
That seems like a pretty bad system from a technology point of view.
People would prefer if Matrix multiplication was O(n^2) algorithm (which would get rid of a lot of waste resources in the datacenters), but people accept that it takes more resources.
What I don’t accept is the amount of lies that people say about Proof of Stake algorithms being an improvement over Bitcoin’s current protocol without any security compromise.
If I see an algorithm that is less costly while giving the same security as Bitcoin, I will evaluate it, but the amount of shaming that I get for paying miners a seignorage to secure my money is what I don’t have to tolerate.
* cocaine prices aren't $1/kg, even after governments around the world banned it
* exotic/endangered species are still being traded for top dollars, despite anti-poaching and anti-trafficking regulations
* stolen art is still worth millions
The only reason I would ever want to hold a Bitcoin is that I trust that somebody else will give me something of value for it in the future.
If governments make it very difficult for me to exchange bitcoins for other things, its utility as a "store of value" gets lower. I'd rather store my value in stocks, real estate, gold, or whatever else. The regulation directly interferes with the use case.
On the other hand, all the regulation in the world doesn't interfere with cocaine's use case of getting you high. If governments could make it so that cocaine doesn't get you high, its price would certainly plummet.
I thought we were just listing things paid for in dollars. Like "the US military which backs the dollar, and the other armies which compete with it". The armies of the world ain't going away either. Nor banks. Nor status signaling.
More likely, I think it's the cognitive dissonance of Bitcoin's insane energy usage causing them to find anything remotely plausible to tot up in fiat's column, especially now that Bitcoin pretty clearly consumes more energy than not merely "all the computers backing VISA" but "all the computers backing all financial transactions for all currencies in the world."
I don't really have a lot of regrets about that though. I have more regrets about selling other things too early, like stock positions I once owned.
However, I think the speculative bubble valuation of 2010 is well justified now. The thing about speculation is that sometimes the speculators are right. Tesla is almost certainly in a speculative bubble, too, but every day they arguably justify a higher base value.
That said, you seem relatively balanced for a crypto critic, and didn’t miss the boat but rather jumped off, so I’m not sure you’re part of the cohort I’m describing.
I'm also very excited about Moderna's mRNA pipeline for example, building new vaccine for cronic illnesses (vaccines are trivial important application at this point of course), and Tesla's mission of decarbonizing the world and getting rid of air pollution. It's just Bitcoin is what I believe will give me the highest ROI right now to invest later in other important technologies.
The safest safe haven asset. A global currency of fixed supply controlled by computer algorithms.
> There are quite a number of criminal or at least grey market uses for BTC.
Criminals the world over prefer cash. Should we ban cash?
> But what are the legitimate uses that are not as well or better served by the traditional payment networks?
A programmable, internet-native inflation-proof store of value with transparent fully-auditable supply metrics. Or to quote Elon Musk, “simply a less dumb form of liquidity than cash”.
There are quite a number of criminal and grey market uses for data centers.
What are the legitimate uses of data centers that are not served by traditional pen & paper?
However, I've been wondering lately what happens in a future where the grid is destroyed by a sun storm? Say the power grids get knocked off for 21 months (I read this is a very possible scenario with a big sun flare), as well as a lot of satellites.
If we move a lot of the world's monetary systems/value to blockchain, how do we use blockchain with no internet or electricity?
You're comparing your bicycle to a cargo ship saying "see how much more energy efficient my bicycle is?". Meanwhile your bicycle can't tow 1000 tonnes of freight across the ocean. That's why is moot to compare them.
[0] https://www.cnn.com/2013/10/04/world/americas/silk-road-ross...
[1] https://www.theverge.com/2017/7/29/16060344/btce-bitcoin-exc...
[2] https://home.treasury.gov/news/press-releases/sm556
[3] https://cointelegraph.com/news/slippery-slope-as-new-bitcoin...
- Geographic distribution of nodes and mining is important for decentralization.
- I don't live in the United States. I can wash/tumble my coins, proxy through other networks. Transact through Monero. The power is on the side of the users.
> But visa doesn't provide most of the functions of bitcoin infrastructure. Visa does[n't] need to hold the balance of my account. Visa does[n't] need to or makes available all of my equity worth of assets for me to transfer. Visa does not custody my assets. This is literally apple to oranges (or visa to bitcoin)
Yes they do?
> Visa does[n't] need to or makes available all of my equity worth of assets for me to transfer.
This is a horrifying bug, right? A thing that no person would ever want, and it's so rare that visa would make you talk to a person and raise your limit first, or they'd get more people involved to make sure you're not being coerced because it's such an abnormal thing to do. Lawyers in some cases, just because you're being so silly. But if you REALLY wanted to make a $1b debit card transaction, you probably totally could, just call the visa billionaire line.
> Visa does not custody my assets.
But a regular bank can, and visa will send to and from there with a debit card.
And I'm sure that Visa + banks for settlement are still using a lot less energy than Bitcoin if you normalize it to transaction volume. Even if you only count the settlements as "real" transactions.
I'm personally mixed on crypto but strongly dislike the glossing-over of its various fundamental properties by people taking intense absolute positions about what free people should be able to do. That can get me shaking my fist at the internet, though now I mostly realize these opinions are as irrelevant as mine is, and this is good.
That drew me in with some geeky allure as something quite unique. And the scenarios like "crossing a border with a fortune stored as a memorized passphrase in your head" are cool in a cyberpunk kind of way.
But these days I'm in the "bitcoin is a paperclip maximizer" camp. I don't really want control of my money to be based on crypto keys that I could lose or have stolen with one bad mistake. And proof of work is so wildly expensive for what it does, I can't endorse it.
The PoW stuff, yeah, there is a reason it exists as you know but it is undeniably insane too. PoS is going to be interesting to see how it goes with Eth.
As a third dimension, I am very optimistic that we're on the order of 1 decade away from a huge change in energy, where solar is dirt cheap. If we see an S curve style shift to that mode of energy production, I think the PoW conversation changes a lot.
If solar becomes 100x cheaper than today's energy sources, but bitcoin mining still pays a large reward, bitcoin miners will just use 100x more energy, right? They're in a race with each other, it doesn't make sense to leave any extra hashrate capacity on the table since if you don't use it, somebody else will and they'll get more of the block rewards.
Maybe that's fine, since solar is still zero-emission, but surely there's still some cost to producing that energy (such as the space taken up by the solar panels, the cost to make and replace them, etc). Otherwise it'd be free, not just cheap.