Why Bitcoin Is Bad for the Environment

Why Bitcoin Is Bad for the Environment(newyorker.com)

23 points by andy9775 5 years ago | 20 comments

Was this post flagged?

It was near the top of the front page 5 minutes ago. Now it's not anywhere in the top 200 stories.

The fact that an entire natural gas power plant in upstate NY was purchased to exclusively power Bitcoin mining seems to be pretty newsworthy, at a time where we're trying to cut carbon.

remolacha 5 years ago |

At its core, criticism of Bitcoin as bad for the environment is premised on the notion that Bitcoin is just a pointless game, rather than a useful piece of infrastructure. If it achieves everything that Bitcoin maximalists claim it will (more efficient financial rails, self-sovereign identity), then it is a cost worth paying. If needed, we can better incentivize green bitcoin mining with carbon taxes or renewable energy mining subsidies.

andy9775 5 years ago | |

The issue is finance firms will get (are getting) involved. It becomes easy to purchase an inefficient energy production source (old coal, natural gas, etc.) that cities/counties/states are trying to get rid of which would otherwise sit dormant and require some sort of upkeep. As soon as such a company goes public they'll have more money to purchase up more (financially cheap, environmentally expensive) sources of direct electricity and they'll be bound to do so since it's in the best interest of the shareholder to continue to mine.

Perhaps bitcoin is a nice academic theory and would work well if humans were responsible. Just like nuclear cars are nice in theory - so long as people don't have accidents.

Edit:

> If needed, we can better incentivize green bitcoin mining with carbon taxes or renewable energy mining subsidies.

Plastic is a wonderful material but virgin plastic is cheaper than recycled and various attempts to artificially decrease the price of recycled plastic via government incentive programs haven't worked.

Electronics are awesome, but despite efforts to recycle electronic waste it all ends up in third world countries where it gets burned off. it's just cheaper that way. Some ecyclers were even caught trying to game the system. Taking government incentives and still shipping e-waste overseas.

I'd like to believe in the idea that some sort of incentive program would come into place but so far none have worked in the may other industries that desperately need it.

remolacha 5 years ago | | |

An “old energy production source” can be cheaper now because the environmental damage it causes is an unpriced externality. A carbon tax solves that by giving a price to that environmental damage. Suddenly, fossil fuels only make sense in the rare cases where renewables cannot be used.

crazygringo 5 years ago | |

From the article:

> According to the Web site Digiconomist, a single bitcoin transaction uses the same amount of power that the average American household consumes in a month, and is responsible for roughly a million times more carbon emissions than a single Visa transaction.

How can you justify that as a cost worth paying? A month's worth of electricity for a single transaction?

It doesn't matter what you do with taxes or renewables. That's insane.

remolacha 5 years ago | | |

It's a misleading comparison. They are comparing the cost of an on-chain Bitcoin transaction to the immediate energy cost of a Visa transaction. On average, one on-chain Bitcoin transaction corresponds to 1000s of total transactions, since most transactions occur through L2s like exchanges, the lightning network, or PayPal. This L2 activity is written to chain batchwise, and only when necessary. And the article doesn't calculate the true total cost of running the Visa network, which also involves 10s of thousands of Visa employees and facilities, not to mention the energy consumed by the Federal Reserve in minting and recycling physical money, and preventing fraud and counterfeiting.

bitcoinmonger 5 years ago |

I don't understand why Bitcoin has been designed to burn fossil fuels when it should just as easily be able to be run using green energy.

Until this is changed I can't see cryptocurrencies having a future, despite their utility.

andy9775 5 years ago | |

Exactly. If bitcoin mining drives demand for solar, leads to solar production jobs in the US and increases R&D leading to more efficient panels - awesome. But if companies start to go public based on the premise of mining bitcoin at the cheapest possible price - I doubt they'll invest in Solar/wind/geo[0].

[0] Yes, I know mining in Iceland is a thing. But mines in Iceland don't make up a huge chunk of the network.

Black101 5 years ago |

Maybe the Government will make it illegal to mine new bitcoins and my bitcoins will go to the moon?

joe_the_user 5 years ago | |

Maybe the government will make it illegal to sell or possess bitcoins. That might not impact those coins as favorably.

Black101 5 years ago | | |

I would like to see that too

sintaxi 5 years ago |

Bitcoin uses far less energy than fiat currencies - and its not even close.

A4ET8a8uTh0 5 years ago |

I find the recent push to frame crypto as an ecological fight mildly interesting as it clearly appears to be somewhat coordinated. That does not mean it is not true. But it is genuinely hard to not to wonder who is setting that on the agenda.

jonny_eh 5 years ago | |

Everything is a conspiracy with crypto promoters.

A4ET8a8uTh0 5 years ago | | |

Conspiracy is an interesting concept in my mind. Isn't it interesting that claiming someone is a conspiracy theorist is a way to dismiss arguments now without attempting to even consider those arguments? It is a very useful tactic.