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Author Topic: Bitcoin mining and other computing energy costs  (Read 1312 times)

numerobis

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Bitcoin mining and other computing energy costs
« on: December 06, 2017, 05:37:42 PM »
There was a grist article that made the rounds predicting that Bitcoin mining would take more power than the US uses by two years from now. Ars Technica points out that's not likely:

https://arstechnica.com/tech-policy/2017/12/bitcoins-insane-energy-consumption-explained/

The number of bitcoins is controlled to grow by roughly a set amount per time period. If it's increasing too fast, the network increases the computational cost per bitcoin.

As bitcoin prices rise, miners fire up their computers to mine bitcoin, increasing the energy cost. That increase the rate of bitcoin production, so the network increases the computational cost. That reduces the bitcoin benefit per $ spent on computation, so miners start to drop out, and there's an equilibrium reached.

In short, bitcoin energy cost grows roughly as the number of kWh you can buy for one bitcoin grows. It doesn't grow without bound.

numerobis

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Re: Bitcoin mining and other computing energy costs
« Reply #1 on: December 06, 2017, 05:56:55 PM »
One comment on the Ars thread mentions bitcoin mining in winter only, displacing electric resistive heat. There's very little wasted energy in that context!

Bob Wallace

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Re: Bitcoin mining and other computing energy costs
« Reply #2 on: December 06, 2017, 08:03:32 PM »
Someone installed bitcoin mining computers in his Tesla S so he could use Tesla's free charging.

He'll get cut off....

numerobis

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Re: Bitcoin mining and other computing energy costs
« Reply #3 on: December 06, 2017, 09:55:22 PM »
Vox reports that data centre computing is consuming about 3% of US electricity supply:
https://www.vox.com/energy-and-environment/2017/12/6/16734228/google-renewable-energy-wind-solar-2017

Bob Wallace

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Re: Bitcoin mining and other computing energy costs
« Reply #4 on: December 06, 2017, 10:42:19 PM »
Let's hope the bitcoin bubble bursts soon.

We could close a more coal plants and cut way back on our NG use.

Jim Hunt

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Re: Bitcoin mining and other computing energy costs
« Reply #5 on: December 06, 2017, 11:41:31 PM »
New Scientist has been running a (probably paywalled) series of articles on the topic. My (brief!) take:

https://twitter.com/V2gUK/status/936929253614071809

From outside the wall:

Quote
Update: as this feature was in preparation, bitcoin was continuing its unprecedented surge, hitting a value of $10,000 on 29 November 2017
Reality is merely an illusion, albeit a very persistent one - Albert Einstein

Sigmetnow

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Re: Bitcoin mining and other computing energy costs
« Reply #6 on: December 07, 2017, 03:52:16 PM »
This is nuts.

LONDON, Dec 7 (Reuters) - Bitcoin rocketed above $15,000 for the first time ever on Thursday, up more than 10 percent on the day, after adding more than $2,000 to its price in fewer than 12 hours.
http://www.nasdaq.com/article/bitcoin-surges-above-15000-after-climbing-2000-in-12-hours-20171207-00657
People who say it cannot be done should not interrupt those who are doing it.

abraca

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Re: Bitcoin mining and other computing energy costs
« Reply #7 on: December 07, 2017, 09:50:49 PM »
Bitcoin equilibrium is 1% of whole electricity consumption per each $50k value of bitcoin. So it's 0.3% already - it is starting to be a really significant part, it seems to be growing faster than we can produce new renewable sources. This can very soon have a real influence on CO2 production and electricity prices.

Bob Wallace

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Re: Bitcoin mining and other computing energy costs
« Reply #8 on: December 07, 2017, 11:02:43 PM »
Quote
The greater fool theory states that the price of an object is determined not by its intrinsic value, but rather by irrational beliefs and expectations of market participants. A price can be justified by a rational buyer under the belief that another party is willing to pay an even higher price.

But at some point the planet runs short of fools....

oren

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Re: Bitcoin mining and other computing energy costs
« Reply #9 on: December 07, 2017, 11:18:39 PM »
Let's hope these specific fools run out very soon, or the planet will suffer. Somehow economic stupidity has a tendency to translate to more emissions, not less.

magnamentis

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Re: Bitcoin mining and other computing energy costs
« Reply #10 on: December 08, 2017, 06:45:44 PM »
the crash of bitcoin will happen as certainly as the amen in the church, hence we just have to wait till things get cut down and then i'm as certain that regulations or attempts for such are imminent, could even be the or one of the triggers for one or the next crash.

it's a hype that will flatten like all others, only that most probably replacement is in the pipeline as well ;)
« Last Edit: May 30, 2018, 12:18:08 AM by magnamentis »
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numerobis

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Re: Bitcoin mining and other computing energy costs
« Reply #11 on: December 12, 2017, 02:48:07 AM »
https://www.theguardian.com/environment/2017/dec/11/tsunami-of-data-could-consume-fifth-global-electricity-by-2025

Quote
The communications industry could use 20% of all the world’s electricity by 2025, hampering attempts to meet climate change targets and straining grids as demand by power-hungry server farms storing digital data from billions of smartphones, tablets and internet-connected devices grows exponentially.

This strikes me as one-sided: one thing that’s been noticed is the millennial generation spending time on their phone (evil telecommunications) rather than driving around and buying big houses.

numerobis

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Re: Bitcoin mining and other computing energy costs
« Reply #12 on: May 18, 2018, 05:03:06 PM »
As mentioned by JimD in the rewables thread, bitcoin at equilibrium at the current price consumes an estimated about 0.5% of world electricity output. It’s not at equilibrium right now, it’s still ramping up. It could reach equilibrium sooner (and at lower electricity cost) if the price falls.

https://arstechnica.com/tech-policy/2018/05/new-study-quantifies-bitcoins-ludicrous-energy-consumption/

SteveMDFP

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Re: Bitcoin mining and other computing energy costs
« Reply #13 on: May 18, 2018, 06:35:54 PM »
As mentioned by JimD in the rewables thread, bitcoin at equilibrium at the current price consumes an estimated about 0.5% of world electricity output. It’s not at equilibrium right now, it’s still ramping up. It could reach equilibrium sooner (and at lower electricity cost) if the price falls.

https://arstechnica.com/tech-policy/2018/05/new-study-quantifies-bitcoins-ludicrous-energy-consumption/

I was recently reading up on blockchain technology and cryptocurrencies.
In principle, this could be an enormously liberating technology.
Transactions need no longer rely on trust in financial institutions.  Transactions can rely on trust in public, published algorithms.  In principle, all banking could be made obsolete.

Bitcoin, in particular, is a pestilence on humanity, and this is an unintended consequence of its design.  Restricting coin production by increasing complexity of calculations was brilliant.  This absolutely prevents inflation/devaluation by over-production.  But incentivizing application of massive computing power is plainly now a toxic side-effect.  This needn't have been the basis for limiting coin production.

It's also terribly inefficient in the way transactions are recorded.  I've read that any given Bitcoin transaction requires about $35 in electricity alone.  This limits its usefulness and efficiency to large-value transactions.  There are a number of strategies being developed for low-cost transactions with other "currencies."

Overall, it should be possible for any given community (local or global) to create their own "currency."  Such cryptocurriences, when easily convertible to "real" money, may just serve as another facet of capitalism.

It seems to me possibly feasible to create essentially non-convertible currencies easily and efficiently.  It could thus, perhaps, be possible to create whole new economic systems in which traditional money is irrelevant. 

I don't think society can manage to take away wealth from those who have extreme amounts.  It may be possible, however, for society to make their traditional monetary wealth gradually irrelevant to the rest of us.

Bob Wallace

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Re: Bitcoin mining and other computing energy costs
« Reply #14 on: May 18, 2018, 07:11:41 PM »
Quote
I don't think society can manage to take away wealth from those who have extreme amounts.

Can do.  Just increase taxes on wealth.

numerobis

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Re: Bitcoin mining and other computing energy costs
« Reply #15 on: May 18, 2018, 07:24:02 PM »
It's a lot easier to take wealth from the wealthy via traditional governance methods than to implement a trust-free distributed system that somehow avoids massive concentration of wealth.

SteveMDFP

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Re: Bitcoin mining and other computing energy costs
« Reply #16 on: May 18, 2018, 07:30:45 PM »
Quote
I don't think society can manage to take away wealth from those who have extreme amounts.

Can do.  Just increase taxes on wealth.

The necessity of doing so has been apparent for roughly 40 years.  The trends keep going in the opposite direction, all over the world.  Getting from here to there is much easier said than done.

Bob Wallace

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Re: Bitcoin mining and other computing energy costs
« Reply #17 on: May 18, 2018, 07:39:55 PM »
Humans are not very good at taking preventative measures.  We tend to wait until we're feeling pain before acting.


Neven

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Re: Bitcoin mining and other computing energy costs
« Reply #18 on: May 18, 2018, 10:02:01 PM »
We should have some kind of reverse lottery for the rich. Everyone who has more than 10 million participates, and every week the person who wins the lottery, loses all of his capital.  ;D
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P-maker

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Re: Bitcoin mining and other computing energy costs
« Reply #19 on: May 18, 2018, 10:53:52 PM »
I see a different perspective here:

Old guys like Bob and Numerobis are afraid to lose their wealth, if such revolutionary ideas should tend to spread out.

I happen to know some of these young bitch coin types. They are not only in it for the money.

How about linking the oil economy to the Arctic sea ice extent. Thatwould kill two birds in one stroke.

RealityCheck

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Re: Bitcoin mining and other computing energy costs
« Reply #20 on: May 18, 2018, 11:25:01 PM »
Ok, lots to talk about up-post. But on bitcoin:
It's only one cryptocurrency - they all use blockchain technology.
There are at least 4 classes of uses for blockchain - a cryptocurrency is only one.
Bitcoin's blockchain algorithm  is now highly inefficient due to its structure / design.
Other blockchain designers now focus on effiency and speed; and increasingly on non-currency use cases.
So blockchain systems are here to stay and evolving fast. So are cryptocurrency uses including efforts to enable zero-knowledge proof of identity verification, submission to regulation and 'mainstreaming' of the technology.
'Bitcoin as a catastrophic waste of energy due to greed' is a passing line in the overall narrative...
(BTW: no I am not connected to or invested in any cryptocurrency; and yes, I have been researching this area.)
Sic transit gloria mundi

numerobis

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Re: Bitcoin mining and other computing energy costs
« Reply #21 on: May 21, 2018, 09:10:23 PM »
P-maker: Are you denying that bitcoin uses lots of power? Or are you merely interested in diversionary tactics?

SteveMDFP

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Re: Bitcoin mining and other computing energy costs
« Reply #22 on: May 28, 2018, 07:58:53 PM »
P-maker: Are you denying that bitcoin uses lots of power? Or are you merely interested in diversionary tactics?

P-maker can make his own defense.  One point worth noting is that Bitcoin is only one of the cryptocurriences, and I suspect it will soon lose popularity, and drop to a value below the costs of new production.  Then Bitcoin production in particular will simply stop.

It uses a brilliant but inefficient concept.  Other approaches are being developed that will eliminate the massive computing costs of the Bitcoin system.  Given high transaction costs of Bitcoin compared to other possibilities, I think it's not going to be much of a "thing" for long.

Sigmetnow

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Re: Bitcoin mining and other computing energy costs
« Reply #23 on: May 31, 2018, 10:10:05 PM »
The Bitcoin cycle is acting like a bubble, which is about to burst.  If so, the energy drain it is causing will stop on its own.

If bitcoin is a bubble, the ‘panic’ stage is near: economist
The smart money will soon head for the exits, if the typical pattern emerges
Quote
Now, even as price volatility subsides, the hype remains. Van der Burgt argues that the bitcoin bubble is now entering the euphoric stage, one with direct parallels with the period leading up to the 2008 financial crisis.

“The euphoria phase is also when people start to borrow extensively to finance their investments,” said van der Burgt. “According to a recent survey, 18% of active bitcoin investors have financed their investments by credit card, and 22% of this group indicated that they have not yet paid off their credit card balance.”
https://www.marketwatch.com/story/if-bitcoin-is-a-bubble-the-panic-stage-is-near-economist-2018-05-31
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numerobis

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Re: Bitcoin mining and other computing energy costs
« Reply #24 on: June 07, 2018, 10:30:45 PM »
Large cryptocurrency mining operations have applied for a total of 15 GW capacity from Hydro-Quebec. The utility proposes to limit it to 500 MW (already a stupid amount), and to require demand reduction so it can cut their power during cold snaps.

http://www.lapresse.ca/affaires/economie/energie-et-ressources/201806/07/01-5184818-hydro-quebec-met-un-stop-au-secteur-des-cryptomonnaies.php

Sigmetnow

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Re: Bitcoin mining and other computing energy costs
« Reply #25 on: June 13, 2018, 08:26:01 PM »
More trouble.

Bitcoin’s Collapse Accelerates, Falls to Lowest Since February
June 12, 2018
- Digital token has declined more than $1,000 in two days
- Trading venues coming under increased scrutiny worldwide
Quote
Bitcoin tumbled to its lowest level since February as the meltdown in the world’s largest digital currency accelerated, renewing concern about the long-term viability of the much hyped alternative to traditional currencies. ...
https://www.bloomberg.com/amp/news/articles/2018-06-12/bitcoin-drops-to-lowest-since-february-as-collapse-accelerates
People who say it cannot be done should not interrupt those who are doing it.