I can see that mining is a good incentive to look for excess energy in all kinds of places and make use of it. That's a capitalistic motiv, finding solutions to derived issues, when something else is at the core of the problem. But anyway.
B$ still looks ridiculous, let me explain.
* world electrical energy consumption: ~25000 TWh [1]
* bitcoin energy consumption index: ~77 TWh [2]
Bitcoin today consumes as much as 0.3% of the total energy available on this planet.
That's fine, if half the world would use it and would do meaningful things with it.
What is it actually used for most visibly?
As a betting ground with galactic momentum, a technology promising to be the solution to everything, and just outrageous claims that only the bovine left to be excited about.
It's not that the algorithms and data structures are not cool, the certainly are - but we can do so much more today with technology than this.
I'm sorry, what? Bitcoin mining has spawned an entire new industry focused solely on converting a scarce shared resource (electrical energy) into perceived personal profits. It is wasteful pollution on a global scale: a single bitcoin transaction consumes as much power as an average U.S. household does in 77 days (https://digiconomist.net/bitcoin-energy-consumption)
It's a perfect example of the tragedy of the commons. The energy already wasted on bitcoin mining will never be recuperated by the efficiency gains you so eagerly (and without merit) ascribe to bitcoin.
This argument is incredibly tired and inaccurate. The majority of Bitcoin mining happens on renewable power and actually HELPS the renewables industry by making renewables more profitable by buying off-peak and surplus energy.
Additionally, the OP conflates power consumption with emissions.
Home mining of Eth is significantly more harmful because cities are still majority powered by coal and gas. If you want to get mad about cryptocurrency power usage, focus your attention there.
Bitcoin mining is profitable only if you can get cheap energy. That means outside of city centres, off peak, often energy that is otherwise unsaleable. No, Bitcoin mining isn't making summer heatwave weekday peak electricity more expensive.
Imagine governments putting a tax on fossil fuels. Bam! coal and petrol cheap energy is non-viable anymore, you'll see Bitcoin miners building solar and wind plants to power their operation. And along with them the rest of the world.
It's easier for politicians and keyboard warriors to blame climate change on Bitcoin than actually moving to a greener world by making fossil fuels unprofitable.
The extra consumption angle doesn't make any sense for an ultra technologic world, that only 1/4th of the world populace has access. Bitcoin or not, energy usage will be ramping up, especially if we want to create a fairer world. The only way to reduce energy usage is to stop being a technological civilisation, or give access to electricity to fewer and fewer people.
This also means that our efforts to replace non-renewable sources of energy are being wasted as we are just adding capacity to bitcoin mining network. When you are paying your taxes and subsidize "green" energy know that part of your subsidy just goes to shit.
Bitcoin mining can serve as a price floor to incentivize green energy production - ex. An otherwise unprofitable solar farm could be profitable because instead of peak production getting sent to the grid at low or negative rates, they can mine Bitcoin and monetize that energy that doesn't have other demand.
This is certainly not universally the case at the moment. It is probably offsetting in the majority of cases currently. But I bet there are a non-zero number of renewable energy products that were able to get greenlit purely because crypto mining can function as a buyer of last resort, and this number will continue increasing.
Bitcoin mining uses a higher proportion of green energy than most other industries though, so I think this energy use criticism is pretty shallow. Some people just don't like Bitcoin and so are enthusiastic to have a reason to complain about it that doesn't require any critical thinking about energy markets. These people believe Bitcoin is entirely worthless, so they'd complain about any level of energy usage, because there is no upside in their calculus.
Of course Bitcoin's energy consumption isn't ideal, but you've got to realize something: Bitcoin mining is only profitable if you have access to very cheap energy. This is why there are so many miners in China that use hydroelectric power, because there's so much excess energy that wouldn't be used otherwise.
Miners don't really use coal power or use up renewable energy that could be used elsewhere. That would be too expensive for them.
>Spending energy to secure and operate a payment system is hardly a waste. Like any other payment service, the use of Bitcoin entails processing costs. Services necessary for the operation of currently widespread monetary systems, such as banks, credit cards, and armored vehicles, also use a lot of energy. Although unlike Bitcoin, their total energy consumption is not transparent and cannot be as easily measured. Bitcoin mining has been designed to become more optimized over time with specialized hardware consuming less energy, and the operating costs of mining should continue to be proportional to demand. When Bitcoin mining becomes too competitive and less profitable, some miners choose to stop their activities. Furthermore, all energy expended mining is eventually transformed into heat, and the most profitable miners will be those who have put this heat to good use. An optimally efficient mining network is one that isn't actually consuming any extra energy. While this is an ideal, the economics of mining are such that miners individually strive toward it.
Does anyone really believe that the bulk of Bitcoin mining energy is coming from renewable energy sources that would otherwise go to waste?
Obviously some of it might come from such energy sources, but the idea that Bitcoin is somehow mostly powered by green, renewable energy that would otherwise go to waste is a massive exaggeration. I know Bitcoiners want to believe that Bitcoin has no harmful energy impact, but we need to be honest about how a system that incentivizes increasing energy consumption is not a sustainable solution.
The weird thing here is that Bitcoin doesn't care about whether it's mined with clean electricity or other, and the realities of the market are pretty opaque. When people correctly point out that Bitcoin mining consumes a lot of energy, a bunch of people immediately make the claim that most of this energy must come from excess renewable sources. But there's actually no reason at all to believe this, very little evidence in favor of it, and nothing in the Bitcoin system design that ensures it. It's basically an article of faith -- because the alternative would be objectively horrifying.
We could design cryptocurrency systems that deliberately focus on using excess renewables, or just plain use less energy for mining. But the problem is that "Bitcoin" has come to stand in for "a cryptocurrency using the specific design choices that its inventor made more than a decade ago" and so privileging Bitcoin itself makes these choices impossible. The very best possible outcome is that (small-b) bitcoin tokens will eventually migrate to more efficient consensus networks, and the big-B Bitcoin network itself will be spun down to consume less power.
If Bitcoin miners are paying for or producing the electricity themselves, what's the problem?
But that's not really the point though is it? Electricity use is not the problem. Carbon emissions are.
If renewables are competitive with fossil fuels (hint: they are), and profit-driven Bitcoin miners are incentivized to seek out the cheapest sources of energy, then Bitcoin mining should be one of the "greenest" industries on the planet.
Guess what? It already is greener than many other industries, with close to 60% of it's energy coming from renewable sources AND on top of that there are lots of operations popping up to capture and burn flared gas (i.e. methane, which is a far worse GHG than CO2).
You're missing the point. We shouldn't be using the energy period. Like, regardless of where we are getting our energy from, we should be making efforts to massively reduce consumption across the board. Bitcoin mining doesn't help this at all. Capitalism be damned.
I've realized that you likely have made up your mind on this and my arguments won't sway you. That's fine by me, as long as others that have read can get it.
This article entirely misses the point. Bitcoin mining is being used by utilities to balance the demand curve. If you need 40gw at peak and 20gw in the middle of the night you have to do some juggling to make it work. If you guess wrong you get fined. Bitcoin serves as the emergency dump for power. They spin up and down as requested by the utility. That way the utility buys a steady stream and bounces the Bitcoin utility up and down making sure demand perfectly matches supply. It’s dumb but it works. And it makes power outages less likely because it allows for oversupply.
It would be far more ecologically sensible to build a grid scale battery, but that costs money up front. Whereas the Bitcoin miners front all the hardware capital for the miners and it’s cash flow positive from day one.
A more Texas solution would be grid tied battery packs in homes. If the homeowner and the utility split the cost both sides could benefit. Homeowner gets reliable power. Utility gets a flat demand curve and a more resilient grid. Add rooftop solar and the grid is even more resilient.
Again, not saying Bitcoin is the right move, just suggesting that we consider the problem it is solving.
Harnessing energy is the basis for civilization. The amount of energy used is highly correlated to the level of civilization.
Using energy is not an issue, it's how we produce it that matters. This applies to all forms of energy use of which bitcoin is just a tiny fraction.
Bitcoin will not compete with current energy demand which is geographically constrained. Bitcoin miners can operate at any location in the world and are incentivised to use free, unwanted, waste energy. Any miners that try to increase the demand of current energy supplies will be uneconomical and go out of business.
Also miners using more energy does not directly increase the price of bitcoin. Ultimately the amount of (otherwise wasted) energy used by the network will be limited by the transaction fees which are a free market.
I think that this is a great big stretch to try and justify BitCoin mining. I don't know if you personally own BitCoin, but I would say that this is a prime example of motivated reasoning.
> or even negative
I can see no way that consuming more energy can result in an improvement to the environment (unless that energy usage was directly related to improving the environment). There is absolutely no time where you can say "the more lights I leave on, the better the climate will be," no matter what your energy source is.
In general the rest of your argument can be summed up as "if there is more demand for electricity, more utilities will build renewable plants." The problem with this argument is that there is already far more electricity being used than renewables can supply, so there is already all the incentive needed to build more plants.
As for the present-day, a BitCoin mining rig consumes whatever proportion of fossils are inputs to that grid. If a grid is 50% renewable and 50% fossil, you can't pretend that you're consuming only the renewable portion. Indeed, the opposite may be true: renewables generally just produce their max output, the fossils can ramp up and down to meet higher demand. So it's best to think of the fossils as the ones that are rising to supply any "unnecessary" usage.
> where you turn off and effectively provide the grid with more power
This is again pretty striking motivated reasoning. Yes, if we turn off all non-essential lights during peak hours we are kind of "supplying the grid" with more energy, but if we build a huge energy-suck, and then occasionally turn it off, we don't get to pretend we are actually energy suppliers. If I set fire to $1000 of my company's money every day, I don't get to pretend I earned them $1000 on the days when I don't.
But whether that is a bad thing definitely is up for debate. Bitcoin mining is a buyer of last resort for stranded renewable energy. It also incentivises renewable energy capture. Energy isn't fungible, it can't be magically teleported to where it can be used. Energy consumption in itself isn't something to be ashamed of or avoided. Personally I think mining Bitcoin with fossil fuels is wrong, but trying to tell people what they can compute is a dangerous road to go down.
1. See last paragraph in my post's argument 1. The point I raise is that it makes no sense for people to be so outraged and vocal about miner's energy use and apparently don't care about much bigger energy users/wasters by multiple orders of magnitude... At the very least this makes critics hypocrites as they themselves waste energy and don't to care about it (eg. driving a car with low fuel efficiency.)
3. It's not a fallacy. If X is worthwhile to society, and if the only one way to obtain X is to spend energy doing Y, and if alternative uses of this energy are not clearly superior (for example doing Z), then Y is not an energy waste. X = permission-less censorship-resistant decentralized financial network. Y = mining. Z = for example building desalination plants to provide clean water to third-world countries.
5. This argument shows that even if you are unconvinced by arguments 1-4 and holds the view that mining is wasteful, you should at least recognize that it is becoming less and less wasteful over time.
Bitcoin allows you to convert excess energy into money. Because it can be mined anywhere at any time, it's priced to the global low cost of energy. It doesn't make sense to use expensive energy sources.
Much of energy production is meant to meet peak demand and storage is difficult. Bitcoin mining is a great way to monetize energy that has a low market value and would likely go to waste.
If you want to price energy or put a tax, by all means. But you shouldn't discriminate against particular usages of energy. You're angry at the wrong thing
Sure, we get the arguments why people prefer Bitcoin mining to other possible uses for energy. We just don't see it as remotely plausible that this leads to a net increase in renewable energy available for things which are not Bitcoin mining (especially since Bitcoin demand for energy which costs less than expected block rewards is inexhaustible by design and gravitates towards the cheapest power source).
Difficult enough to find real world examples of places whose existing power demand became more economic to convert to renewable sources as a direct result of cryptomining, never mind to assume the scale of these ventures plausibly exceeds the amount of fossil fuels burned to mine Bitcoin or provide power for other activities which needed to find additional power as a result of Bitcoin mining.
B$ still looks ridiculous, let me explain.
* world electrical energy consumption: ~25000 TWh [1] * bitcoin energy consumption index: ~77 TWh [2]
Bitcoin today consumes as much as 0.3% of the total energy available on this planet.
That's fine, if half the world would use it and would do meaningful things with it.
What is it actually used for most visibly?
As a betting ground with galactic momentum, a technology promising to be the solution to everything, and just outrageous claims that only the bovine left to be excited about.
It's not that the algorithms and data structures are not cool, the certainly are - but we can do so much more today with technology than this.
[1] https://www.vgb.org/en/data_powergeneration.html?dfid=98054 [2] https://digiconomist.net/bitcoin-energy-consumption
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