
Bitcoin mining uses more energy than Ecuador – but there’s a fix - rbanffy
https://www.newscientist.com/article/2151823-bitcoin-mining-uses-more-energy-than-ecuador-but-theres-a-fix/
======
cs702
From the point of view of economic and societal impact, the ridiculously high
and growing energy consumption of Bitcoin mining makes no sense. Smart people
everyday wonder, why are all these miners around the planet burning up all
this energy every instant of the day? Is this really necessary?

From a _marketing_ standpoint, however, I think proof-of-work is a brilliant
feature of Bitcoin. As mining becomes harder and costlier, requiring ever more
specialized knowledge and energy, Bitcoin becomes harder and harder to obtain,
and therefore looks more "valuable" to many human beings.

Bitcoin's wasteful energy expenditure reminds me of the hypothesized _handicap
principle_ in natural selection: Many species spend a disproportionate amount
of energy on "wasteful" features and traits (such as colorful peacock tails)
to signal their worth and status to potential sexual partners:
[https://en.wikipedia.org/wiki/Handicap_principle](https://en.wikipedia.org/wiki/Handicap_principle)
. For the species as a whole, the expenditure _is_ wasteful, but from the
point of view of individual members of the species, the expenditure is not
wasteful if it leads to mating!

From the Bitcoin network's standpoint, the energy expenditure is not wasteful
if it leads to greater perceived "value" and adoption (compared to other
networks).

------
Artemis2
I have found this article’s quality to be extremely low. The “fix” mentioned
in the title is proof-of-work, with an explanation that spans one full
sentence. According to the author, the annual electricity consumption of
bitcoin mining is estimated to be 27.03 TWh. To compare, we have a very
scientific “that’s still peanuts compared to the energy use of the internet”.
Recall that the bitcoin network processes approximately 3 transactions per
second when running in full gear.

I dug up this report [0], which seems to be one of the most recent estimates
of datacenter energy usage (US only unfortunately). The estimated energy usage
for datacenters in the US is 70 TWh in 2014, and estimated to be 73 TWh in
2020.

So bitcoin uses approximately ⅓ of the energy the Internet uses in the US.
That is far from “peanuts”.

0:
[https://eta.lbl.gov/sites/all/files/publications/lbnl-100577...](https://eta.lbl.gov/sites/all/files/publications/lbnl-1005775_v2.pdf)

~~~
root_axis
> _that’s still peanuts compared to the energy use of the internet_

This is terrible reasoning. The internet services something like 3 _billion_
users across millions of websites and applications, bitcoin is a niche toy
that _runs on the internet_ and services a few million users by the most
optimistic projections.

> _the estimated energy usage for datacenters in the US is 70 TWh in 2014_

So bitcoin manages to consume 1/3rd the energy of all US data centers to
verify a handful of transactions that could be performed on a raspberry pi in
a trusted environment.

------
deweller
Most people who are new to cryptocurrency try to "fix" Bitcoin at least once.
After a while some come to realize that Bitcoin's proof-of-work algorithm is
actually a feature and not a bug.

~~~
gooseus
So bitcoin, which still has almost no practical use for anyone in the real
world, consumes as much energy as a country with a GDP of $98B and population
of $16M.

It used to be that this was acceptable because bitcoin was going to solve our
inequality problems and make money more egalitarian and all internet
transactions smoother (or something). Yet, with a price of $7K per coin I
still struggle to find anyone I know who has ever made a real purchase with
it.

So what exactly are we getting from this energy demand? Does there exist a pie
chart for where all the miners source their energy and maybe a metric for tons
of CO2 per coin/transaction?

~~~
loceng
And realize these energy costs can only be afforded because of the speculation
that these crypto-assets will gain mass legitimacy, and therefore cause a
(unreasonable) wealth distribution weighted towards the earliest adopters -
along with the increased perceived value of the crypto-assets.

------
jerkstate
These articles about how much energy Bitcoin uses never mention the value it
provides - it's a secure way to make financial transactions internationally
with zero trust, relatively (compared to most other current methods) low fees
and high speed. There are other ways, like the banking system, but they have
their own costs associated with the security of the transactions, and their
guarantees are backed by government, which don't always agree with you.

Maybe this kind of system is worth burning a lot of electricity for. It seems
like the market is saying that it is.

~~~
virtuexru
Exactly. This is the crucial point all of these people seem to miss.

There is all kinds of other egregious waste (electrical and otherwise) going
on in the world, how is this any worse than say millions of computer's
online/burning power to play DoTA for instance (sorry MOBA fans, nothing
personal. using it bc it has an enormous player base). It's a weird comparison
but it gets the point across.

Plus, relatively speaking.. an entire year to power the country of Ecuador is
the same amount of energy it takes to power the Bitcoin blockchain for a year
doesn't seem that "wasteful" considering how many lives Bitcoin has changed &
the miracle of being able to send up to $x,xxx,xxx USD (or any other currency)
around the world, confirmed in less than 10 minutes for a paltry fee of ~$5.

I'm not sure why but there is a clear bias on HN regarding most Bitcoin
articles.

This is just my opinion; take it with a grain of salt.

~~~
evanlivingston
Can you talk more about the lives Bitcoin has changed? Are you referring to
people using it for black market transactions or are you referring to
speculators?

~~~
virtuexru
By the way you asked the question I can already sense your clear bias. I'll
answer you however.

Countries where the currency is inflating at enormous rates, countries where
the banking system is corrupt/out of date/not functioning, Bitcoin has changed
these people's lives. Venezuela would be a good example from this year:
[https://www.forbes.com/sites/realspin/2017/02/03/why-
venezue...](https://www.forbes.com/sites/realspin/2017/02/03/why-venezuelas-
currency-crisis-is-a-case-study-for-bitcoin/)

~~~
root_axis
This is a myth. I can tell you from first-hand experience that bitcoin is
_not_ changing lives in Venezuela (at least not on a noteworthy scale).
Practically _nobody_ accepts bitcoin in exchange for food and services and
many of the rural regions that are hit the hardest by the failing economy
don't even have reliable access to internet. This idea that bitcoin is somehow
aiding the impoverished is the height of technocratic arrogance.

------
Spooky23
Why is this a problem?

We do all sorts of relatively useless stuff that burns electricity. How many
gigawatts are wasted in internet forums? Call of Duty? Lighting empty rooms?

Why is bitcoin worse?

~~~
icoder
If not worse, at least just as bad, which makes it, on itself, bad. Two wrongs
don't make a right.

On top of that, although not everyone may agree: one may argue that internet
forums and Call of Duty are not a waste. At least not compared to bitcoin
mining.

Bitcoin mining requires more energy if more people join in (difficulty
increases), while the outcome basically stays the same. Furthermore one could
say it's not _doing_ anything, only _preventing_ something (too many blocks
being created).

~~~
Spooky23
Why? Mining allows you to certify transactions and create a tangible thing.
How is that worse than electricity from credit card terminals, etc?

------
vorotato
lol proof of stake, that's basically giving all the power to banks and
governments to control the transactions which is exactly what we have now.

~~~
beager
In a sense, if the growing power requirements for cryptocurrency mining box
out players who can't afford the compute and the energy, wouldn't that give
all the power to the monied players anyway?

~~~
loceng
Indeed, anyone who can afford and dumps the most computational power and
energy into the system. Imagine the waste of resources if there was a
war/battle against bad actor(s) for control.

------
raverbashing
Maybe instead of a linear chain we need a hierarchical chain, with distributed
verifications

As in: you send a transaction, there's a low effort PoW needed for that to be
accepted by the network

Intermediate nodes bundle up some transactions and create a hash using a
higher difficulty PoW. Those are compensated with a small fee

Higher level nodes bundle those in bigger blocks with a high-effort PoW and
higher fee.

This way the transaction cost is spread more evenly

~~~
kneel
Bitcoin and all it's altcoins that connect to it could work like this if
'atomic swaps' took off.

------
xashor
[https://ark.io/](https://ark.io/) is a coin with proof of stake with
delegates, who mine. You vote is proportional to your money, but you get back
a portion of the mining bonus from the delegates. A bit more complicated than
BTC but that's ok for me for not burning so much energy.

------
ghostbrainalpha
What I don't understand about the energy use is, what percentage of that is
mining, and what percentage is to facilitate transactions?

If 90% of that energy is going into mining, won't Bitcoins energy usage really
come down once all the coins are mined? Or once the value of the coins is much
less than the cost of the energy required to mine them?

It seems like there are some natural checks here.

~~~
ddebernardy
Mining and facilitating transactions, by which I'm assuming you're meaning
certifying that transactions are legit, are the same thing.

Here's a short video by 3Blue1Brown on how cryptocurrencies work:

[https://www.youtube.com/watch?v=bBC-
nXj3Ng4](https://www.youtube.com/watch?v=bBC-nXj3Ng4)

------
k__
Can we have something like a person or democratic coin?

Everyone gets one vote for being a human alone.

Not for having more money or more computing power.

~~~
nemo1618
How do you propose one proves that they are (a unique) human?

~~~
crdoconnor
Web of trust?

Absolute proof this way isn't possible, but you could render the cost of fraud
very very high.

~~~
wyldfire
> the cost of fraud very very high.

Just high enough for lots of people and their friends to conspire against the
rest of the network?

I'm afraid web-of-trust alone is not enough to make a safe and useful
cryptocoin. It would also require significant additional changes from current
popular cryptocoin designs.

~~~
crdoconnor
>Just high enough for lots of people and their friends to conspire against the
rest of the network?

That depends upon what they conspire to do, surely?

As far as I can see there are three attacks:

* Creation of fictional people

* Conspiracy to "unperson" a real person

* Identity theft

There are many defenses that could be put in place against all of these using
a web of trust system.

The PGP version is a little rudimentary to protect against them, but it's
still a good foundation.

------
AndrewDucker
If a different cryptocurrency can make Proof Of Stake work _and_ persude
BitCoin miners that switching to Proof Of Stake is better for them than not,
then Bitcoin might switch.

But those are both pretty high hurdles to clear.

------
sunsu
The GDP of Ecuador in 2014 (all time high) was $102.29B.

------
crypt1d
instead of eliminating PoW we can improve on the efficiency of the miners. Its
possible to use the emitted heat from the ASICs/GPUs to warm up households for
example. Imagine if this were a city/country-wide thing: you could have an
economically self sustaining heating system.

------
Simon_says
Is Ecuador known for using a lot of energy?

~~~
Synaesthesia
No, it's a small country too, only 15 million people, and it uses a lot less
energy than the US per capita.

~~~
Simon_says
I prefer units of power of a burning Library of Congress.

------
nnfy
Everyone is happy to sentationalize the amount of energy that the bitcoin
network uses, but no one ever mentions how much energy use is acceptable.

Nor does anyone seem to attempt a thorough cost/benefit analysis. How much
energy from financial infrastructure could bitcoin free up?

Edit: vague comparisons like these really bug me, because while they make
problems seem large by comparing them to A WHOLE COUNTRY, they actually offer
little in the way of information. Most of us know nothing about Ecuador's
energy use in comparison to any other country or industry, except perhaps that
it is relatively small. But I guess it gets you the clicks...

~~~
SomeStupidPoint
Ecuador is about 66th percentile by economy size, with a GDP of about $100bil.

So Ecuador is producing $100bil in value, which is similar to the total volume
of transactions on the Bitcoin network.

So using less energy, Ecuador produces more economic value than Bitcoin can
even move.

That sounds like Bitcoin is wildly inefficient, in that it can't transmit
stored value for less than that value costs to generate in power:

It would be more efficient to use the power to create more wealth than
transmit it with Bitcoin!

~~~
nnfy
But you're ignoring the fact that bitcoin is about more than simply moving
money. There is value in security and decentralization.

Further, GDP ignores consumption, it is gross product, not net product.
Further indication to me that comparing bitcoin to power consumption of a
small country is inappropriate. Apples to oranges.

Edit: after reading a couple articles on wikipedia, I'm confused. Gross
implies product before subtraction of consumption (I.E. revenue), while
wikipedia claims that GDP factors in so called intermediate consumption, which
would make it more like a net value (I.e. profit). Do we have any economists
browsing? Genuinely curious.

------
CyberDildonics
Their 'fix' is proof of stake, which is unproven, though I think can work
technically. Whether it works economically and leads to more or less
decentralization remains to be seen.

Either way, bitcoin isn't going to switch to proof of stake, so the headline
is still nonsense from any angle.

Edit: I see downvotes but not replies - I'm not sure which part of this is
controversial.

