The environmental issues are concerning to me. The amount of electricity being burned through for what is essentially a skeuomorphism of gold mining, pretty much primarily for speculation now, is beyond belief. It's a completely artificial, and artificially scarce, product.
Whatever original hopeful goals the creator(s) of Bitcoin had with this idea, and decentralised currency...if there was any victory at all it is a pyrrhic one when you look at the externalities.
If you can call a digital gold rush a victory, anyway. The physical one in the US was pretty bad for a lot of people.
That's putting it in the best possible light. Mining gold leaves the world with physical blocks of gold, which has no continuous upkeep cost. "Mining" cryptocurrency leaves the world with an asset that requires continual upkeep (further "mining") in order to maintain that asset. Any significant drop in the network's hashrate opens it up to attacks.
The upkeep cost for Bitcoin is, and by necessity must be, proportional to the value represented by Bitcoin.
But the upkeep cost of protecting the gold is continuous in the same way as bitcoin mining. If you want to own some gold you need to protect it (usually with the state apparatus of violence, which has massive externalities).
In other words, if you just mine a physical gold block, you don't really have an asset without the state's (or your own) continual upkeep that keeps it protected from attacks.
Those same apparatus are also needed to maintain a global internet without which Bitcoin is useless. You can also just bury gold to keep people from finding it, which is one of the reasons it’s maintained value throughout history.
Upkeep of gold doesn't scale at the same rate as Bitcoin. If we suddenly had 1000 tons more gold, we could put it in existing vaults and very little increased cost.
> But the upkeep cost of protecting the gold is continuous in the same way as bitcoin mining.
This completely misses the point, which was one of magnitude:
>> The upkeep cost for Bitcoin is, and by necessity must be, PROPORTIOANAL TO THE VALUE REPRESENTED by Bitcoin.
Also, that upkeep cost is 100.00% to protect the value of existing bitcoin.
C.f., gold:
> If you want to own some gold you need to protect it (usually with the state apparatus of violence, which has massive externalities).
I don't need continuous mining of bitcoin to protect my non-bitcoin stuff.
However, I do need the "state apparatus of violence" to protect my non-gold stuff, including things like my house and my body, and oh yeah, my fucking mining rig!
If all gold disappeared tomorrow, would anything about the "state apparatus of violence" change? No, of course not. That is absurd.
I never understood the "violence" argument against government. In that sense of the word "violence", there is no alternative that does not at some level also come down to the threat of force. The "state apparatus of violence" won't look so bad after you've dismantled the state in favor of something approaching anarcho-capitalism and are then close to Hobbe's state of nature: nasty, british, and short.
>you don't really have an asset without the state's (or your own) continual upkeep that keeps it protected from attacks.
This describes Bitcoin too.
I think it's facially absurd to claim that the existing financial system (including military, police, etc) costs anywhere near what bitcoin does, but even if it does, it's irrelevant because bitcoin doesn't provide the same things. Bitcoin is a virtual bar of gold or piece of currency, not a financial system.
"Of the existing 18.5 million Bitcoin, around 20 percent — currently worth around $140 billion — appear to be in lost or otherwise stranded wallets, according to the cryptocurrency data firm Chainalysis"
"“Even sophisticated investors have been completely incapable of doing any kind of management of private keys,” said Diogo Monica, the co-founder of a start-up called Anchorage, which helps companies handle cryptocurrency security. Mr. Monica started the company in 2017 after helping a hedge fund regain access to one of its Bitcoin wallets."
"“This whole idea of being your own bank — let me put it this way, ‘Do you make your own shoes?’” he said. “The reason we have banks is that we don’t want to deal with all those things that banks do.”
And there's a great PBS spacetime video exclusively covering the creation of heavy elements, and why they no longer think it's solely the result of supernovae [0].
This comment is probably sarcasm, but just in case it was meant seriously, I just want to make it clear that expending the energy of another supernova to create a currency would be, overall, a Bad Thing at this point in time.
Unless you've got some dyson spheres lying around that you're not telling me about, I'm going to politely request that bitcoin advocates not expend more energy than we have in the entire world just so that they can diversify their investment portfolios.
Actually though, I wonder if there's an analogy that could be drawn between the real origin of gold (supernova) and bitcoin (mining a block). Both are created as dense byproducts of a large compression event (bitcoin: transactions; supernova: the rest of the star). ?
There's nothing special about gold, every other heavy element is also a by-product of supernovae. So, the analogy only works on a dully contrived poetic level, unless you also want to compare Bitcoin meaningfully with lead.
>"Any significant drop in the network's hashrate opens it up to attacks."
I was curious about this. What would "significant" be? What is it based on - the number of outstanding blocks? Is this vulnerability mentioned anywhere in the protocol spec?
Did you know that vanilla financial securities also require upkeep? Approximately 0.5% of the value of all financial assets is burned every year (and potentially an order of magnitude more, depending on what asset and packaging you're talking about).
That's a heck of a figure you're not providing a reference or explanation for at all. Or even an explanation of what you mean by financial securities and "burned".
Mutual funds, the most legible way to get an estimate of the holding cost of securities (since they are required to transact at net asset value) routinely charge between 0.2-1% fees, depending on size and asset class.
Clearinghouses, transfer agents, and cash management firms don't work for free, which is the problem that cryptocurrencies explicitly solve; neither do compliance, KYC, fraud, etc., which most cryptocurrency protocols elide altogether.
They also have an entire corpus of regulation surrounding them and coordination overhead that allows sovereign states to compare apples to apples, and ensure that these respective sovereign State's financial systems are not utilized to facilitate patterns of behavior those respective State's citizens define as criminal.
Oh wait.. You don't want that functionality, and you're still using up the energy footprint in the event you are correct. One of these delivers significantly less versatility than the other for the same energy investment.
I agree that the analogy does not extend past the surface look, but that's the point of calling it a skeumorphism: a new thing that tries to perform the function of an old thing, under a facade that mimics the old thing in a shallow way to ease transitioning.
this is correct, I think solidity doesn't even run on a gpu at all
The energy usage of ethereum comes from the proof-of-work DAG, not the solidity execution. You can easily see this by running a (non mining) ethereum node, any decent CPU will churn through the transactions in blocks in a matter of milliseconds (~200 ms per block), not the 13 seconds it takes to generate that block
It's a calculation, but not a useless one done just to simulate gold mining, unlike Bitcoin. Look deeper into what Ethereum actually is, it's not just a cryptocoin, it's also a computing platform.
They’re not really making a point that needs evidence. If you have no idea what Ethereum is, it’s not unreasonable to suggest that you take a quick look at their website before participating in an web forum discussion about it.
This is different than people blithely spouting “it’s not my job to educate you” when asked to give some support for their controversial, unsubstantiated claim.
Since we've gone meta anyways... Why do so few people value simply linking to and quoting directly from primary sources? From random internet comment #37846399, to sms chats, to user stories on a scrum board, and even news articles these days, nobody cares to drop a link to or actually quote the thing they're referring to. Docs, articles, code, journals...
Yes, it's work to back up your claims with direct links to a source. But maybe that's a reasonable minimum bar to hurdle to stand behind ones statements.
I am not the first one who made a claim in this thread - your reply would be better placed under that comment talking about gold. Surely opening the homepage is reasonable minimum before posting a negative comment.
I’m firmly of the belief that Bitcoin (and it’s ilk) should be illegal. There’s many reasons for it - Sometimes because it’s an unregistered security, sometimes because it falls afoul of laws against paying people in scrip, sometimes because it’s outright fraud.
There’s real uses for Merkel trees in finance - Cryptographically secure history is valuable. I’ve yet to see any problems that blockchains solve that merkel trees do not[1]. Finance and interchange works just fine with just Git - Interchange done via simple published balancesheets with countersignatures by both parties, then merged into “head” on the regular by any form of rollup. It doesn’t have the (well overstated) pseudonymity advantages of bitcoin, and that’s a feature in a well regulated financial market.
[1] With one ridiculous exception: In Iain Bank’s “Excession”, a mothballed war-fleet is resurrected by a traitor who presents enough cryptographic signatures of coconspirators to burn the keys of the real C+C chain. Blockchain would make this much harder - But not necessarily enough harder, even if they had to effectively recreate the military history of an entire total-peace (through superior firepower) civilization.
Modern day California, and by extension Silicon Valley, would not look the way it is today without the California Gold Rush [1], as horrible as its externalities were.
Great prosperity often comes at, or with, a great cost. California today doesn't make a great picture when you look at the homelessness and inequality, and the exorbitant cost of living anywhere near where the action is.
Electricity usage will forever be a human need and people need to realize and accept that. Taking down bitcoin because it's software that runs on computers that uses electricity is not the answer here - renewable and sustainable energy is the answer.
Everybody is just echoing the same headline they read on some news article about bitcoin using a lot of energy without thinking it through properly.
I think you are the one not thinking it through properly. Yes, humanity will use energy. But it is kind of by design that bitcoin uses more and more energy, and that just doesn't make sense. Sorry.
Bitcoin is not humanity using energy. It is humanity flushing energy down the drain.
Bitcoin doesn't have to keep halving until 2140, their governance could decide to stop mining early once it becomes an existential crisis for the network. Bitcoin is code and there could be special cases made so long as they can get the miners to agree. The miners can name their price on processing transactions on the network in lieu of continuing to mine. The transaction processing is much less onerous in terms of power consumption.
I was indirectly referring back to my original post above if you did not notice. And no I'm not high, just having a conversation about Bitcoin energy usage in relation to renewable and sustainable energy technology.
I find the "Bitcoin burns energy" argument completely laughable. With all due respect, your skepticism appreciated; let me explain.
A more useful perspective is "humanity uses more and more energy for computation". The many devices which enable us to post these comments burn energy. The astronomically high video-traffic these days burns energy. Modelling early universe, protein folding, advanced chemistry... every damn thing we compute has the cost of burning energy.
As an aside, let's not forget how much electricity gets used simply for heating. There's no shortage already of "smart heaters" with a nice side effect of mining you some coins while they keep your house warm. Anything environmentally wrong with that?
See, it's not the endgoal of cryptocurrencies to burn energy; it's simply a cost. Now, thanks to bitcoin, we can have economies of scale drive optimization of that cost: improving the core compute-per-joule ratio of our technology. With all the collateral improvements across the globe with regards to environmental impact.
Could you say that porn distribution industry "kind of by design" lead to people watching more and more porn? Regardless of the answer, thanks to that we can have fast internets now. Similarly with bitcoin: thanks to it, we'll pack more & more bitflips into every joule, up to the thermodynamic limit.
Maybe the solution to the Fermi paradox is that significantly advanced civilizations discover crypto currencies and then furiously burn through all available energy sources until they go extinct.
I realized recently it feels like pogs did. Really hot for a minute and then poofed out of relevancy. People also had high value on certain pogs over others ala the hoarding seen in Bitcoin.
I don’t even agree with the scarcity argument. Every Bitcoin represents 100,000,000 traceable assets. The “supply” of an entire Bitcoin may be artificially limited, but practically speaking there are infinite Bitcoin satoshi to trade.
Is there any reliable data on the actual environmental harm? I've heard so many times that it's renewable energy being used because it's so cheap. There was something about mining near dams.
> I've heard so many times that it's renewable energy being used because it's so cheap.
It's a myth from the pro-cryptocurrency crowd.
With recent price spikes, mining is profitable even if you have to pay relative high prices for electricity. You don't need to have cheap energy.
Also, it's another myth that we have an abundance of hydroelectric power that would otherwise go to waste if not for Bitcoin. With modern power transmission it's trivial to send power through the grid to other locations, and nobody is building power plants in the middle of nowhere without a way to send that electricity somewhere else.
Finally, Bitcoin's power consumption is additive. Energy that goes into Bitcoin mining is energy that isn't being used to power cities and other infrastructure, which must still get its power from somewhere.
Don't believe the whitewashing campaigns to downplay Bitcoin's energy usage. It's very bad.
The upper bound on environmental harm is the damage that would be done by the most harmful energy production method used: any renewable energy spent on mining could be used instead to replace that harmful production.
(It's only an upper bound because energy isn't perfectly fungible.)
Renewable energy is also better than fossil energy in terms of environmental damage, but it's not free from damage. A dam is a massive localised environmental impact, and a huge amount of concrete. A solar farm requires (holes-in-ground) mining and significant industrial processing to build. The lower bound on environmental harm is the cost of building renewable energy sources that are used for something so unproductive.
Does all mining apply here? I saw some videos where people were setting up solar panels and minig using that power. If you have a system of solar panels + mining cards, is there more harm compared to no such system (not taking producing solar panels and cards into account).
You have to look at the planet as a set of resources. Resources grow and shrink, but are definite and limited in any given moment all the same. Generally, spending them on less productive tasks is bad. It's cool they are using solar power vs burning gas/coal, but it doesn't change the fact that those same resources would benefit the planet much more if used in a different capacity.
If a billionaire hoarded manufacturing plants and kept them shut down, people would probably be mad, since resources were being wasted, even if it was a net positive on greenhouse gas output.
Each hour 430 quintillion Joules (430 exajoules) of energy from the sun hits the Earth.[1]
It is almost exclusively reflected back out into space, and wasted. We have nearly no incentive to capture it, so the energy is being wasted at a mind boggling scale. I've been mining cryptocurrencies with solar power for about 6 years or so.
The great thing about crypto mining is that it creates a price floor for energy usage. This gives people real incentive to build the tools we need to harness the energy on our planet.
Since we're firmly in the ridiculous arguments camp already, it may as well be pointed out that all of that energy leaving the planet is a good thing. It's why the earth isn't a barren hellscape like venus, whose atmosphere captures energy much more efficiently. Most people would actually prefer that we capture just a bit less than we currently do.
So you are saying we will capture so much energy from the sun that the entire planet will become inhospitable. Do we then just keep burning fossil fuels until earth becomes inhospitable instead? Or do we kill ourselves and stop the need for energy use entirely? Remember that humans will forever have energy needs as we advance.
Absolutely yes, at a sufficiently big-picture view the eventual problem is energy expenditure itself. Capturing more energy from the sun, or more realistically something like large-scale fission/fusion utilization still results in an increased amount of energy being deposited into the earth's atmosphere even aside from the greenhouse effect.
I am obviously not an expert but I looked at the magnitude of the energy itself vs the greenhouse effect and it's about 10-100x less potent than the greenhouse effect. But that means that even if we had 100% clean carbon-free energy, we can't continue increasing our energy utilization forever. And we still have a huge portion of the world that is below a first-world living standard and will eventually want automobiles and air conditioning and vacations using jet travel too.
IF we do not level off the energy consumption of the "first world" standard of living sometime within the next 50-100 years then we are on a course to cook ourselves to death even with 100% clean energy.
What I am really getting out all of this is that at some point we will hit the human population limit that earth can sustain, even with renewable energy sources.
Whether or not that limit is actually reachable and something we should actually worry about I don't know. i.e: is there enough physical space for that many people on earth where each person uses X amount of renewable energy where the sum of X is greater than the amount of energy the earth can actually capture without being negatively affected.
The point is that nothing is as simple as it seems. Using a renewable sources has their own side effects.
Solar? It heats the atmosphere, because it captures solar heat which would bounce back.
Wind? Obviously it slows winds down, and who knows how it affects the existing ecosystem. We know how important the gulf stream is, you wouldn’t want to slow that down..
I've been just casually browsing this discussion, but your comment stands out as an example of the kind of mental gymnastics people are playing to try and justify something so obviously wasteful.
As was pointed out upstream, capital and resources are required to get a solar panel, and if its output is directed to something frivolous like crypto mining, those inputs are being wasted. The fact that there remains unused energy from the sun is completely orthogonal to the waste that is happening.
To be clear, I'm less passing a judgement about the efficiency of crypto than I am pointing out that crafting objectively absurd arguments about why it is not actually wasteful helps nobody.
A) the environmental impact of manufacturing a solar panel is 0 and carbon neutral itself (it's not),
B) there's an excess of solar panels available too (not really),
C) the bitcoin miners aren't often running on coal power during the nighttime hours (they often are), and
D) there's nowhere better for mankind to deploy the capital used in deploying miners and renewable power production than for cryptocurrency mining (dubious).
Solar panels and GPUs use rare metals of which there are a finite quantity, and are also mined through the use of slave labor in some parts of the world.
Nope, no, don't go that way. Yes, the Sun does bathe the Earth with a constant stream of energy, a stream that remains mostly unused. The point is, that it is also mostly not useful energy, energy we have technology to convert into forms we can make use of. And that is a fundamental quality of that Energy.
The infinitesimal portion we do manage to convert with the currently available technology shouldn't be pissed away in the wind so lightly.
There's still the environmental costs related with creation of the panels and cards. Making Circuit boards and Silicon is a costly endeavor in and of itself from an energy and waste standpoint.
ultimately, it's a fraction of miners doing what you say. so as a green miner your personal contribution might be 0, but you're supporting a system that does considerable harm.
as long as a majority of bitcoin mining happens from non-renewable resources, the network as a whole is damaging.
the vast majority of mining happens off renewable energy, because it doesn't make economic sense to mine on non-renewables. its why 'mines' cluster near hydro plants and places that have good solar.
It comes out positive using energy prices from virtually anywhere.
The idea that mining is powered purely by renewables that would somehow otherwise go to waste (that is, not take fossil fuel plants offline) is pure FUD.
Do you apply the same level of concern to the US military? It produces a lot more CO2 emissions than Bitcoin. I don’t think it produces more benefits for normal people either.
Whatever original hopeful goals the creator(s) of Bitcoin had with this idea, and decentralised currency...if there was any victory at all it is a pyrrhic one when you look at the externalities.
If you can call a digital gold rush a victory, anyway. The physical one in the US was pretty bad for a lot of people.