Cryptocurrency

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Given the amount of energy expended should we dissuade/ban their use.


https://www.thebalance.com/how-much-power-does-the-bitcoin-network-use-391280#:~:text=If%20this%20information%20is%20correct,hours%20(TWh)%20per%20year.&text=Regardless%20of%20the%20number%20of,minutes%20to%20mine%20one%20Bitcoin.


https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7402366/#mmc1


In 2020 63 TWH per year for bitcoin


another estimate
87.7 TWH per year for bitcoin 2020

" Based on the underlying algorithms, current hash rates, and suitable mining devices, we conclude that Bitcoin accounts for 2/3 of the total energy consumption, and understudied cryptocurrencies represent the remaining 1/3"

[oren]

Cryptocurrencies are an unnecessary and wasteful frivolity and should not be encouraged. The same applies to many other current human activities btw, so I am not hopeful that anyone would listen.
Given the very serious risk of environmental and civilizational collapse in the coming decades, humanity should switch to a war footing asap and cut out many activities.

[BeeKnees]

I agree,
The biggest concern for me is that bitcoin mining is most active in areas with large amounts of renewables. Places like areas of China with large Hydro.  This is preventing the electricity being exported to areas relying on coal or storing this energy for times when hydro cannot meat demand.

The higher the demand goes, the more energy will be expended chasing the rewards.  It is the enemy of a renewable grid. 

It's also unnecessary as most currencies are heading towards being solely digital and the days of using notes and coins have taken a huge hit as a result of covid.

[blu_ice]

There is this famous tweet that describes Bitcoin pretty accurately:

imagine if keeping your car idling 24/7 produced solved Sudokus you could trade for heroin

It seems you can trade them for Tesla cars also but the basic principle remains the same. It's a useless waste of energy and computing power.

Also, cryptos are terrible medium of exchange because their value is volatile an mainly increasing. Why spend 1 BC for a model 3 if next year it will buy you two model S.

[grixm]

I am a big fan of cryptocurrencies. I think they are in fact a necessity. Maybe you don't notice much difference here in the free west (at least if you are not paying attention), but there are many examples of countries in the world with a gravely dysfunctional monetary system, either due to hyperinflation, oppression, etc, and for these people having access to a third party currency where they and only they are in control of their money, can make all the difference in the world. And that's without even considering all the other applications aside from money.

The energy use is a regrettable side effect, but this is in the process of being fixed. Ethereum "2.0" and many other chains are switching to a Proof Of Stake consensus mechanism, which do not utilize energy (mining) as the voting power.

[SimonF92]

I mine ethereum and agree they need to fix energy use but dont like the idea of PoS as it will only further drive the industrialization of mining.

I would happily pay a few percentage toward green energy initiatives

[kassy]

By 2018, bitcoin was estimated by Joule[233] to use 2.55 GW, while Environmental Science & Technology[234] estimated bitcoin to consume 3.572 GW (31.29 TWh for the year). In July 2019 BBC reported bitcoin consumes about 7 gigawatts, 0.2% of the global total, or equivalent to that of Switzerland.[235]

https://en.wikipedia.org/wiki/Bitcoin#Blockchain

Nice numbers for a hobby project. Of course there are many more and while the link states that many miners take advantage of green energy a whole bunch of others will not.

You can cheer on this nice new techno development without thinking what it does to the planet or it might actually bother you.

Switzerland is #44 in a list of 219 countries. This should tell you something is not right here.

https://en.wikipedia.org/wiki/List_of_countries_by_electricity_consumption

There are a lot of currency/money problems but they have the have their underlying causes that could be fixed. We obviously cannot have crypto for all and i think we should just not have it at all.

[NeilT]

If anyone can give me an annual estimate of the energy wasted in minting coins, through mineral mining smelting forging etc; in printing currency, including the harvesting or resources for ink and material, then I'd be happy to address the current cost of energy that crypto creates.

There are 180 currencies in the world today.  Each and every one mints coins, prints "paper" (or plastic), currencies and spends a lot of energy on it.

Before we start going on about the cost of crypto, we also have to assess the ongoing cost of crypto as opposed to the ongoing cost of physical cash.  Crypto, once mined, is zero cost.  Physical currency must be refreshed on a regular basis.  Incurring not only production costs but secure decommissioning costs too.

Once we understand the true cost of traditional currency, then it will be possible to weigh the costs and benefits (if any), of crypto.

[grixm]

but dont like the idea of PoS as it will only further drive the industrialization of mining.

Not sure what you mean. There is no mining in PoS.

[kassy]

As you posted in the Tesla thread they have mined 18,5 out of 21 million available coins. And along the way that needed the amount of energy Switzerland used in 2018.

The amount of money that translates to varies but lets go with 50k per coin that is a little over a billion. Double the amount and it is two billion.

If doubt our ´real money´ had anything like that relative energy cost. Block chain is computationally intensive and that eats energy. The minting process is highly optimized. In the Netherlands there are about 1,5 billion coins in circulation which is about half which was minted.
Coins do not last forever but they do last a long time. When i was young i collected the oldest coins of every type so oldest 1 or 5 cent pieces. I think the oldest i had was from 1905 and in great condition. Most of them last a very long time.

The printing part is also highly optimized with only a small number of companies doing that. They are buying high grade inks and all kinds of other stuff on an existing market which offers a whole range of inks papers and papers and plastics. When printing they also print way more of the small notes  that get used all the time.

If you were to compare metrics you would have to work how much money the coin or coupon represented over time which punches way higher then crypto because they get used a lot and they are designed to last a certain time.

Crypto is a BS technocratic fake solution.

So you do not trust your governments and banks so you create an alternative currency which only works if the governments and banks allow it.

For a whole lot of people in countries below Switzerland it is not even an option. So it is a toy and a harmful one.

[NeilT]

I wasn't talking money kassy, I was talking energy.  Nobody captures the energy stats for their physical money creation operations, but it is not small and it is continual.

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The vast majority of money I use and people I know use no longer gets converted to physical tender.


I do not really understand cryptocurrency. I thought that the blockchain showing ownership created the need for computations and mining was performing these calculations for others providing value. It sounds like the mining is a separate solving of puzzles. But this seems pointless. I am not sure how the blockchain protects ownership or does not lead to continuously increasing calculations.


I think I understand that a blockchain is an irreversible calculation that allows information to be retrieved and new information added without being able to change previously added information. It seems to me this leads to blockchain that always grows and never shrinks or is a blockchain a fixed size that eventually loses the oldest transactions? IDK

[BeeKnees]

Physical money is history, even more so since covid.

[Sigmetnow]

What is the combined electricity usage of every bank branch in the world, plus all corporate offices?
…
The blockchain doesn’t need any of that

https://twitter.com/wholemarsblog/status/1359697732940623876

[grixm]

I do not really understand cryptocurrency. I thought that the blockchain showing ownership created the need for computations and mining was performing these calculations for others providing value. It sounds like the mining is a separate solving of puzzles. But this seems pointless. I am not sure how the blockchain protects ownership or does not lead to continuously increasing calculations.

For an attacker to manipulate Proof-Of-Work blockchains, for example by double-spending, they would need to amass more processing power than the rest of the mining network combined. This means that more people mining makes the blockchain more secure, even if the actual mining calculations are not strictly meaningful. You can think of it like: The blockchain is secured in a vault, and the more energy is spent mining, the thicker the vault door is.

I think I understand that a blockchain is an irreversible calculation that allows information to be retrieved and new information added without being able to change previously added information. It seems to me this leads to blockchain that always grows and never shrinks or is a blockchain a fixed size that eventually loses the oldest transactions? IDK

The blockchain keeps growing when new transactions are made. It never shrinks.
However, the growth is not related to mining, it wouldn't grow faster if more people mined.

[SimonF92]

but dont like the idea of PoS as it will only further drive the industrialization of mining.

Not sure what you mean. There is no mining in PoS.

Sorry, I should have been clearer. PoS implementations in cryptos will force rollovers into other coins- the leanest and most time-efficient mining operations will always be faster in moving. This, compounded by PoS favouring high-capital entities will gradually root out DIY miners. There will always be PoW coins out there, but every time a crypto goes PoS its going to disproportionately affect DIY miners.

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thanks grixm that helps.

[Sigmetnow]

So this is happening:

Bitcoin blows past $48,000 to hit another record high as major financial firms warm to crypto
https://www.cnbc.com/2021/02/11/bitcoin-btc-price-hits-48k-amid-support-from-bny-mellon-mastercard.html

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Uber Will Consider Crypto As Payment, CEO Says It's 'Good For Business'
https://m.benzinga.com/article/19621127

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Mastercard to open up network to select cryptocurrencies

(Reuters) - Mastercard Inc said on Wednesday it was planning to offer support for some cryptocurrencies on its network this year, joining a string of big-ticket firms that have pledged similar support.

The credit-card giant's announcement comes days after Elon Musk's Tesla Inc revealed it had purchased $1.5 billion of bitcoin and would soon accept it as a form of payment. Asset manager BlackRock Inc and payments companies Square and PayPal have also recently backed cryptocurrencies.

Mastercard already offers customers cards that allow people to transact using their cryptocurrencies, although without going through its network.

"Doing this work will create a lot more possibilities for shoppers and merchants, allowing them to transact in an entirely new form of payment. This change may open merchants up to new customers who are already flocking to digital assets," Mastercard said.

Mastercard specified that not all cryptocurrencies will be supported on its network, adding that many of the hundreds of digital assets in circulation still need to tighten their compliance measures. Many cryptocurrencies have struggled to win the trust of mainstream investors and the general public due to their speculative nature and potential for money laundering. 

https://mobile.reuters.com/article/amp/idUSKBN2AA2WF

[Sigmetnow]

Chamath Palihapitiya (@chamath) 2/9/21, 4:10 PM
Loss porn: In 2014 I bought an empty lot in Lake Tahoe for $1.6M....in Bitcoin. 
Price adjusted for today, I paid $27.5M for it.
wsj.com/articles/lake-…
https://twitter.com/chamath/status/1359248379377762310
Chamath Palihapitiya:
I got the math wrong...it cost $128M. #FML 

[kassy]

So overall cryptocurrency cost a lots of energy and solves nothing in social warming, right?

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Is it possible to own 1/100th of a bitcoin or smaller? If not why do people think they can use at as a currency?

[oren]

It is possible to own any fraction, AFAIK.

[Sigmetnow]

ARK Invest analyst’s thread on cryptocurrency energy use.  Part One:

1/ Bitcoin critics continue to assert that mining is wasteful and disproportionately damaging to the environment.
Contrary to consensus thinking, we believe the impact of bitcoin mining is a net positive for the environment.

Here's why:
2/ First, proof-of-work mining is critical to Bitcoin. In the Bitcoin network, trustworthiness is protected by computation, and mining is what gives Bitcoin its ability to coordinate trust and facilitate the transfer of value without relying on a centralized authority.

3/ The costliness to produce bitcoin is fundamental to its value.
Unlike the US dollar, Bitcoin cannot be printed with the stroke of a keyboard.
Instead, it converts the output from cheap stranded energy sources into something with monetary value.
lynalden.com/misconceptions…

4/ Even so, Bitcoin’s energy consumption is trivial compared to legacy financial systems. As measured by electricity costs alone, Bitcoin is much more efficient than traditional banking and gold mining on a global scale.

5/ Traditional banking consumes 2.34 B GJ/yr and gold mining 500 M GJ/yr, while Bitcoin consumes 184 M GJ/yr.
Additionally, Bitcoin mining’s estimated $ cost / GJ expended is 40x more efficient than that of traditional banking and 10x more efficient than that of gold mining. ...

https://threadreaderapp.com/thread/1360343382556483587.html
Continues at the link.

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ARK Invest analyst’s thread on cryptocurrency energy use.  Part One:
 https://threadreaderapp.com/thread/1360343382556483587.html
Continues at the link.

Not comparing like for like. Currently us banking services represent about 19.414 trillion in m2 money supply compared to 647 billion. A little shy of a 30 fold difference in value. Do the math and bitcoin uses more than three times the energy of the banking sector.  That more than three fold factor is before you factor in a massive increase in activity if people use it for everyday transactions. Many banking services will still be needed. Most people will still need home loans and car loans and other services.

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I wonder if their cost and energy consumption estimates include trading platforms used to make bitcoin transactions possible for most people.

[kassy]

Instead, it converts the output from cheap stranded energy sources into something with monetary value.

Of course the mining is not only done with cheap stranded resources. Maybe we should get back to this after building an oversupply of solar.

[oren]

What a load of BS, sorry. As if Bitcoin replaces banking and gold mining. Both banking and gold are needed for more than just speculation and/or dubious store of monetary value. Besides, banking and gold are far more pervasive than Bitcoin. Scale Bitcoin across the global population and those numbers will explode a hundredfold or more.

Let's face it, ARK Invest meant to say:
Why?
Because Elon Musk supports it, so it can't be bad.

[blu_ice]

Chamath Palihapitiya (@chamath) 2/9/21, 4:10 PM
Loss porn: In 2014 I bought an empty lot in Lake Tahoe for $1.6M....in Bitcoin. 
Price adjusted for today, I paid $27.5M for it.
wsj.com/articles/lake-…
https://twitter.com/chamath/status/1359248379377762310
Chamath Palihapitiya:
I got the math wrong...it cost $128M. #FML 

A perfect example why bitcoin is useless as a medium of exchange, ie money.

Cryptos are for speculation without any practical use.

[BeeKnees]

Instead, it converts the output from cheap stranded energy sources into something with monetary value.

Of course the mining is not only done with cheap stranded resources. Maybe we should get back to this after building an oversupply of solar.

It makes the resource stranded by providing a demand for it locally rather than encouraging infrastructure to export it to where it's needed.

It's a nasty and unacceptable excuse.

[grixm]

Chamath Palihapitiya (@chamath) 2/9/21, 4:10 PM
Loss porn: In 2014 I bought an empty lot in Lake Tahoe for $1.6M....in Bitcoin. 
Price adjusted for today, I paid $27.5M for it.
wsj.com/articles/lake-…
https://twitter.com/chamath/status/1359248379377762310
Chamath Palihapitiya:
I got the math wrong...it cost $128M. #FML 

A perfect example why bitcoin is useless as a medium of exchange, ie money.

Cryptos are for speculation without any practical use.

You said bitcoin in your first sentence, and then "crypto" in your second sentence, even though there are crypto that are completely stable and thus not relevant to your argument.

It's important not to generalize when dismissing something. Bitcoin having a problem does not mean all crypto have that problem. Pretty much all disadvantages of bitcoin has been solved or is being solved by other cryptocurrencies.

[Sigmetnow]

ARK Invest analyst’s thread on cryptocurrency energy use.  Part One:
 https://threadreaderapp.com/thread/1360343382556483587.html
Continues at the link.

Not comparing like for like. Currently us banking services represent about 19.414 trillion in m2 money supply compared to 647 billion. A little shy of a 30 fold difference in value. Do the math and bitcoin uses more than three times the energy of the banking sector.  That more than three fold factor is before you factor in a massive increase in activity if people use it for everyday transactions. Many banking services will still be needed. Most people will still need home loans and car loans and other services.

Different math is stated above:

Bitcoin mining’s estimated $ cost / GJ expended is 40x more efficient than that of traditional banking and 10x more efficient than that of gold mining.

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Different math is stated above:

Bitcoin mining’s estimated $ cost / GJ expended is 40x more efficient than that of traditional banking and 10x more efficient than that of gold mining.

[/quote]
I did see they were using different units but their choice seemed deceptive to me. Unless I misunderstood the abrieviations GJ
What is the interest in cost per giga joule? I assume that is what GJ stands for. The cost / energy unit seems like a sidebar. While their is likely no way to perfectly compare their costs until a cryptocurrency replaces a sovereign currency normalizing for value seems like the closest approximation.

[Sigmetnow]

BITCOIN & ENERGY

Cathie Wood @CathieDWood‬⁩
In a research collaboration with $SQ, ⁦‪@yassineARK‬⁩, ⁦‪@wintonARK‬⁩, and ⁦‪@skorusARK‬⁩ debunk the myth that #Bitcoin mining is damaging the environment. Instead, as crypto mining, energy storage, and AI technologies converge, the adoption of renewable energy is likely to accelerate!
https://twitter.com/cathiedwood/status/1385082685111087104
4/22/21, 12:07 AM

Square Crypto @sqcrypto‬⁩
If bitcoin needs anything, it’s more white papers. In this one, ⁦‪@Square‬⁩ and ⁦‪@ARKInvest‬⁩ team up to argue for bitcoin as a key driver of renewable energy’s future: squ.re/BCEI-whitepaper

Hate reading? Here’s the nutshell version:

Solar and wind produce cheaper energy than fossil fuels. This should make them ubiquitous, but they’re held back by an obvious flaw: they produce too much energy when demand is low and not enough when it’s high. Batteries could fix this, but alone aren’t economical enough.
  —
What can fix this problem is an ecosystem where solar/wind, batteries, and bitcoin mining co-exist to form a green grid that runs almost exclusively on renewable energy. Not only is this doable, it is doable without jeopardizing the sector’s profitability.
  —
For much more info about how this would work, check out the white paper link and ARK’s comprehensive open-source model and assumptions:

GitHub - ARKInvest/SolarBatteryBitcoin
https://github.com/ARKInvest/SolarBatteryBitcoin

https://twitter.com/sqcrypto/status/1384901045134974978
4/21/21

[kassy]

What can fix this problem is an ecosystem where solar/wind, batteries, and bitcoin mining co-exist to form a green grid that runs almost exclusively on renewable energy.

It would waste less energy without the bitcoin:

“It is really by design that Bitcoin consumes that much electricity,” Mr Rauchs told BBC’s Tech Tent podcast. “This is not something that will change in the future unless the Bitcoin price is going to significantly go down."

The online tool has ranked Bitcoin’s electricity consumption above Argentina (121 TWh), the Netherlands (108.8 TWh) and the United Arab Emirates (113.20 TWh) - and it is gradually creeping up on Norway (122.20 TWh).

The energy it uses could power all kettles used in the UK for 27 years, it said.

https://www.bbc.com/news/technology-56012952

Hence i am closing this thread since it´s not a solution to global warming and there are plenty of places to talk about your bitcoin on the wider net.