
Bitcoin Energy Consumption Index - schwabacher
https://digiconomist.net/bitcoin-energy-consumption
======
alister
You can't compare Bitcoin to Visa. Visa is merely a payment sytem -- a means
of transfer of money that already exists. Visa is not money.

Bitcoin however _is_ money. As well as being a payment system.

The correct comparison would be to compare the cost of Bitcoin to U.S. dollars
or gold. Gold requires hundreds of dollars per ounce and untold energy to
extract. U.S. dollars require the existence of a powerful economy and trillion
dollar military to keep the currency secure and desirable.

~~~
hwillis
>The correct comparison would be to compare the cost of Bitcoin to U.S.
dollars or gold. Gold requires hundreds of dollars per ounce and untold energy
to extract. U.S. dollars require the existence of a powerful economy and
trillion dollar military to keep the currency secure and desirable.

No it isn't- the energy cost of bitcoin is ongoing and depends on the volume
of transactions. Each time money changes hands, it costs energy to verify it.
Comparing it to VISA or ACH makes the most sense, because those also incur
ongoing costs per transaction.

~~~
alister
If read the article correctly, he's including the cost of mining Bitcoin, not
merely energy cost to verify a coin (which is absolutely trivial). Once all
Bitcoin is mined (yes, there's a built-in maximum), or it becomes
prohibitively expensive to mine, there won't be any mining costs.

You can look at the current Bitcoin energy costs as the startup cost to
establish a new gold mine or a new country with its own currency.

~~~
acchow
> Once all Bitcoin is mined (yes, there's a built-in maximum), or it becomes
> prohibitively expensive to mine, there won't be any mining costs.

In that future you will still mine blocks, but there won't be any new bitcoin
generated in that block. Sure, you might want to use a different word for that
than "mining", but it will still have very real and significant energy.

~~~
tylersmith
"Validators" is the more generic for term what are also called miners or
stakers.

------
givinguflac
That is an absurd amount of energy. This really changes my opinion on this
being a feasible currency.

~~~
1001101
I agree. I've been racking my brain on ways to connect proof of work to
something useful (like folding proteins, general purpose distributed
computing, etc.)

~~~
kobeya
Do that and it would no longer be useful as proof of work. Proof of work-i-
was-going-to-do-anyway is not useful for securing the ledger.

~~~
akvadrako
That's incorrect. All that matters is you can't game the system by taking
shortcuts or deciding what the problem will be beforehand; the work cannot be
even partially computable without knowing the previous block.

~~~
Taek
No, you are incorrect. The important aspect of proof of work is that it is
very expensive to create an alternate history (maybe one where you didn't send
$15,000,000 to the exchange, for example). If you are doing useful work,
someone can pay for it, and you can use that payment to make an alternate
history for free, defeating the security assumption of blockchains.

Blockchains only work by probably wasting in order to build a history. If you
aren't wasting, then it wasn't expensive to build the history (it was
subsidised), and it wouldn't be expensive to build a different history (that
one could also be subsidized)

~~~
SilasX
But "socially useful" does not imply saleable (to the bane of venture
capitalists everywhere).

It's possible for something to provide a social benefit but not make sense for
anyone to pay for as a for-profit business because others would get the same
benefit and free ride off them. (Hence the problem of public goods in
economics.)

So if the proof of work is only solving some general research problem, then it
might not be feasible to double dip like you've described. That's why
primecoin was able to avoid the problem.

~~~
kobeya
There are very few things that are actually useful (socially or otherwise) but
don't provide economic incentive. As pointed out by others primecoin isn't
really a very good example. A good application to shoot for, if there are any
budding cryptographers in the audience, is a ticking timelock encryption. A
set of keys known in advance, and each block solves the next key. This would
let you encrypt messages into the future, where the cost to decrypt is equal
to the cost of minting that many blocks.

I've seen partial schemes for this, but no complete ones that would justify
implementation. If a full and workable scheme could be devised, I would bet on
it replacing sha256 based proof of work, eventually.

~~~
SilasX
Every public goods problem is mathematical research is a case where the
solutions are socially useful but not saleable. The problem (pointed out by
the sibling) with primecoin was that it worked too well, such that further
solutions were uninteresting and past the point of diminishing returns.

Edit: See my here for a model of how NP complete problems could fill the role
of you could predict difficulty in advance. There wouldn't be double dipping
because the person wanting the answer wouldn't pay both bounties.

[https://news.ycombinator.com/item?id=15107653](https://news.ycombinator.com/item?id=15107653)

~~~
kobeya
No the problem with primecoin is the mathematical "problem" it is solving
isn't scientifically interesting.

------
amelius
> Electricity consumed per transaction: 165 kWh

Thats about $20 in the US.

If a transaction is _that_ expensive, how can this system even work for
transactions with a value of that order? Are large transactions "sponsoring"
small transactions?

What happens if more people use the system for small transactions? Will BTC
become unusable?

~~~
amelius
So, if you look just at transaction cost the system clearly cannot sustain
itself. But as more people buy into BTC, the system keeps from collapsing. If
you ask me, that's starting to look like a Ponzi scheme in disguise ...

~~~
rothbardrand
Check your premises-- your transaction cost is inaccurate.

~~~
amelius
Check jaekwon's comment above.

------
schwabacher
The statistic that stands out to me from this article is that 1 bitcoin
transaction uses enough energy to power 5.58 us households for a day.

I'm hoping someone more knowledgeable about bitcoin can comment - is it likely
that this will continue as the mining reward decreases? How expensive will
transactions be after that happens? And if smaller rewards reduce total mining
and power consumption, how vulnerable does the blockchain become to attack?

What i'm wondering is if transaction costs in the 'end state' of bitcoin can
be competitive with centralized competitors like credit cards, paypal, etc.
given this level of power consumption?

~~~
TekMol

        I'm hoping someone more knowledgeable
        about bitcoin can comment
    

I did and was quickly voted to the bottom.

    
    
        bitcoin can be competitive with
        centralized competitors like credit cards
    

In it's current form it can't. It's already running at max capacity. No
further increase in transactions per day is possible.

If there will be a cryptocurrency that can handle as many transactions as
Visa, it will be something else then what we currently call Bitcoin.

~~~
etatoby
Iota?

~~~
WikipediasBad
Correct. Glad someone has heard of it at least on hacker news.

------
brndnmtthws
Long term outlook for mining isn't good. Ethereum, for example, is moving
toward Proof of Stake ([https://github.com/ethereum/wiki/wiki/Proof-of-Stake-
FAQ](https://github.com/ethereum/wiki/wiki/Proof-of-Stake-FAQ)), and Bitcoin
will become less profitable for miners soon, beginning with the activation of
Segwit.

The reason for the recent Bitcoin Cash fork, was that miners are terrified of
losing control given the substantial investment required to maintain
profitability. I don't think Satoshi ever thought mining would become so
profitable, centralized, and political. If Satoshi had, he or she may have
rethought the mining aspect of Bitcoin.

It's the end of days for mining as we know it.

~~~
GBiT
Miners can choose to include more profitable transactions, skiping segwit
ones.

POS will not work. you need to back Bitcoins value with something, and its
electricity. Gov backing with gold.

~~~
jaekwon
Incorrect. Bitcoin isn't "backed by electricity". You can't turn Bitcoin back
into energy. The energy is used to secure a distributed ledger to prevent
double spend attacks on ongoing transactions, in a really inefficient way, but
don't call it "backing".

PoS will succeed. It already has, we've set all the pieces. The thing is, you
don't want to live in a world where Bitcoin and PoW dominate our financial
transactions. That world is not livable.

Bitcoin transactions are secured by spent electricity. PoS transactions are
secured by cryptographic signature schemes and reputation of operational
security. It's how the world already functions, just more replicated.

~~~
Taek
It takes a cryptographically provable amount of energy to reverse a Bitcoin
transaction, and that amount is equal to the money spent on electricity mining
blocks that confirm a transaction.

Proof of Stake systems have no equivalent. They operate by trusting the
staking parties are not colluding to create an alternate history. But if they
do decide to collude, there is little thermodynamic cost to rewriting history.

It's a fundamentally weaker system, and one that depends on trust. The whole
value of proof of work is that it allows you to escape trust.

~~~
jcfrei
PoS as well as PoW depend on the assumption that a majority (either in terms
of value invested in hashing power or invested in tokens) of the network is
following the rules. If you try to double spend in a PoW system you are
betting your current electricity usage on a new block becoming the longest
chain and in a PoS system you are betting the tokens themselves - from an
economic point of view those two systems are indifferent (if your attempt
doesn't succeed you have wasted either electricity or tokens). Collusion can
happen in both cases. PoS systems introduce new (probably yet unsolved)
problems but they aren't inferior from an economical point of view imho.

~~~
Taek
No, in a proof of stake system collusion to rewrite history is essentially
free.

In a proof of work system, even if you collude you still have to spend a non-
trivial sum of electricity to create that alternate history. Electricity that
would be making you money via the block reward if you were using it honestly.

It is provably more expensive to reconstruct history in a PoW setting, even
when everyone is happily colluding.

~~~
jcfrei
Whether it is more expensive or not is irrelevant. If a majority of the
network (either in hashing power or number of tokens) decides to collude and
start modifying network states for their own benefit then they will ultimately
succeed. You argue that in a PoW system rewriting older blocks is more
difficult than in a PoS system but that doesn't matter, because when a
majority of the network becomes hostile and starts blocking all of your
transaction attempts then the value of your coins immediately goes to zero. In
a PoW system the records of your older transactions might be around forever
but that's little more than damage control.

In such an adversarial environment proof of stake even has advantages over
proof of work. If in a proof of work system a majority of the network starts
to double spend or censor transactions, what can you do? You are essentially
powerless because any fork (that tries to fix their malicious blocks) can be
quickly taken over by the colluding miners. However in a proof of stake system
you could simply fork once and destroy/invalidate all the tokens of the
malicious miners.

~~~
Taek
If you are resorting to a hardfork to manage malicious actors, you can always
change the proof of work algorithm, which would damage the malicious miners to
a tune of billions of dollars in bitcoin.

Rewriting a year of history in a proof of stake system takes a couple days on
consumer hardware. Rewriting a year of history in Bitcoin is going to require
burning a literal hundred million dollars of electricity, if not an order of
magnitude more.

In a proof of stake system, typically less than 30% of participants by coin
amount actually do the proof of stake. And that's for systems that don't
require you to bond coins for months. Exchanges frequently control that many
coins. And if an exchange abuses their power, are you going to burn the coins
of every single person using the exchange?

It gets worse than that though. You don't need current coins to attack the
system. You only need old keys of coins that you sold. After you sell your
coins, why wouldn't you sell your keys to an attacker too? If the attacker is
paying for the keys, and you sold the coins anyway, there's nothing to lose
for you.

Or an exchange can rotate their coins to new addresses and use the old coins
to attack the system.

------
rainbowmverse
Just another thing people went wild for without thinking about externalities.
You don't need to be a genius computer scientist to realize a thing that
requires a constantly rising amount of processing power just to keep pace will
eventually need an unreasonable amount of power.

~~~
mrb
Bitcoin does NOT need constantly increasing computing power. The hashrate and
difficulty level adjust up _or down_ as needed.

------
spiorf
The energy expended is a guarantee of security and immutability.

The fact that real world energy is expended is the thermodynamic guarantee of
the irreversibility of a transaction.

If you have access to the VISA database, and change something, you cannot have
the cryptographic proof that it has not been tampered with. At the very best,
you trust a VISA root key.

With Bitcoin you trust math and physics, telling that if the whole network has
expended 1TWh after my transaction, at least twice that energy will be
necessary to reverse it, and the only data i need to prove that, is the
blockchain.

~~~
kybernetikos
I get that the energy is being used for something useful and cool, but when
the energy cost to secure a single transaction could power 5 households for a
day, then something is wrong and needs to be fixed.

Surely even fans can agree there's a level at which it just doesn't make sense
any more.

~~~
Taek
That energy is not just confirming the transactions in the existing block, it
is protecting all transactions in the blockchain history, adding security to
each of them. That represents a history of more than $70 billion in value.
Suddenly it doesn't seem so expensive anymore.

~~~
Tomte
That's actually revealing.

First people try to argue that all this gigantic energy expenditure "buys"
security.

And then – in the fine print – you are learning that you don't actually "buy"
security, you have been sold a subscription. This gigantic waste of energy
doesn't do anything unless you follow up with even more energy.

So the calculations that x amount of energy "secures" y amount of economic
value is flat out wrong. Because x should be x + x' \+ x'' ad infinitum.

Oh, and the longer you stay in, the more difficult is getting out, because
"sunk cost" isn't a fallacy in this scheme, it's actually real.

~~~
Taek
Yeah, the inflation is a tax more or less. It's a tax on your holdings to pay
for the security and integrity of the network, and to make sure things keep
moving forward.

Bitcoin is nearing the point where most security will be paid by fees instead
of inflation, but imo inflation is the more fair model to pay for security.

------
pedrocr
Spending 800M$ a year in electricity alone to run a digital currency is
massive and at 8$ per transaction seems incredibly inneficient. The comparison
to the VISA network is incredible. Independently of your opinion of the value
of Bitcoin in the long term the current network is definitely not more useful
to society than the VISA network.

~~~
GBiT
800M is not to run the network, its hard money. If 1 mb limit was removed
today, this network can handle loads of VISA and more. Electricity is spent to
create new blocks... Hard work is done to create new Bitcoin and verify
transactions.

------
mrb
BECI is flawed, I wrote a critic of it some months ago:
[http://blog.zorinaq.com/serious-faults-in-
beci](http://blog.zorinaq.com/serious-faults-in-beci)

This motivated me to research and publish a more precise energy comsumption
estimate, and I have been published in Bitcoin Magazine:
[http://blog.zorinaq.com/bitcoin-electricity-
consumption](http://blog.zorinaq.com/bitcoin-electricity-consumption)
[https://bitcoinmagazine.com/articles/op-ed-bitcoin-miners-
co...](https://bitcoinmagazine.com/articles/op-ed-bitcoin-miners-consume-
reasonable-amount-energy-and-its-all-worth-it/)

I always like to remind people that Bitcoin miners consume about the same
amount of energy as Christmas decorative lights in the US. Kinda puts things
in perspective...

~~~
chinathrow
> I always like to remind people that Bitcoin miners consume about the same
> amount of energy as Christmas decorative lights in the US. Kinda puts things
> in perspective...

[https://en.m.wikipedia.org/wiki/Whataboutism](https://en.m.wikipedia.org/wiki/Whataboutism)

------
rspeer
Apparently "terawatt-hours per year" is a unit that people use in public
policy, but it strikes me as strange. Converting 16.22 TWh/year to a "more
metric" unit, that's a sustained power usage of 1.85 gigawatts.

So Bitcoin is constantly using more than enough power to make Doc Brown's eyes
bug out.

~~~
aqme28
I too hate seeing __ watt-hours per year. What's the point of the double time
conversion? It's like saying "The movie starts in 3 kilometers per mile-per-
hour"

~~~
rspeer
I mean, I understand why, it's because often you want to relate it to cost,
and electricity is _priced_ in $/KWh, not in ($/sec)/watt.

~~~
davidad_
I do wish energy were priced per megajoule. But I suppose this is probably a
symptom, like miles-per-hour vs meters-per-second, of the non-metrication of
time units at the relevant scales. (It takes order of an hour to drive
somewhere, and order of an hour to run a laundry machine.) If we had a metric
hour of a thousand seconds, a kWh would just be a MJ, no problem. And if we
had a "metric year" of a million seconds, a "TWh/yr" would just be a GW.
Unfortunately, it's pretty important to humans to track time in a way that
lines up with earth's rotation and revolution, and there's no way to make that
metric. (If French Revolutionary Time caught on, a second would be 1e-5 days
instead of 1/86400 and an hour would be 1/10 of a day, and that would be a
start, but the year/day ratio is pretty intractable.)

------
politician
This is one of the reasons I prefer proof-of-stake schemes, despite the
complexity, low power consensus is preferable given roughly equivalent tamper
resistance. State collusion with mining pools is a credible threat to proof-
of-work schemes.

~~~
jstanley
Proof of Stake is just Proof of Work with hidden work.

Miners will crank whatever handle they can crank to increase their payout, up
to the point where they spend more marginal effort cranking the handle than
the corresponding marginal payout is worth. In PoW (in bitcoin) that handle is
SHA256. In Proof of Stake, it's more obscure, but they will find it, and they
will crank it, and you'll just be back where you started.

I'm not convinced PoS is a practical improvement on PoW.

~~~
jcfrei
This is a misleading argument. Yes, miners will always spend more until
marginal revenue == marginal cost. The problem with the proof of work system
of bitcoin (and many others) is its inefficiency that only allows for a low
transactions throughput. Proof of work has no inherent value for the system,
it's simply a way to cap the network throughput to about 1MB per 10 minutes
because anything lower than 10 minutes will make the network increasingly
vulnerable to adversarial attacks [1]. There's got to be a way to increase
network throughput beyond this while maintaining censorship resistance and
decentralization.

[1] C. Decker, Information Propagation in the Bitcoin Network:
[http://www.tik.ee.ethz.ch/file/49318d3f56c1d525aabf7fda78b23...](http://www.tik.ee.ethz.ch/file/49318d3f56c1d525aabf7fda78b23fc0/P2P2013_041.pdf)

~~~
tylersmith
The point is expend work to create signatures, creating a crytoeconomic cost
to state changes.

~~~
jcfrei
The purpose of PoW is to reduce the number of forks and also making double
spending attacks very expensive. Why can't the computing power of the entire
network be used to just verify the integrity of all transactions and skip the
nonce finding part? This would immensely increase network throughput. The
reason is because Bitcoin's PoW implementation can't provide the same level of
consensus and security with a higher number of transactions. Newer PoS systems
might.

------
Zamicol
PoW needs to die.

PoS can be superior to PoW in every way except the problem of initial wealth
distribution. PoW solves this problem elegantly. PoS currently has no
meaningful alternative to this distribution method.

What Ethereum is doing with using PoW to bootstrap wealth and then transition
to PoS looks like a winning combination.

------
maxerickson
So the calculation is incredibly sensitive to the assumptions, that miners
spend 60% of revenues on electricity and that they have an average cost of
$0.05 per kw-h.

Anyone have any sense of how accurate either of those is?

~~~
Digiconomist
Just want to note that 60% is the expected future (ultimately), but the
current % is more like 22 (found by taking the total cost # divided by the
total annualized mining revenue #).

~~~
jstanley
So in that case it's only ~2 houses rather than 5.58? Is this your website? Do
you think the figure should be made more accurate?

~~~
Digiconomist
Ah no, it's 5.58 for the current 22%. If it actually gets to 60% it would be
much worse.

~~~
maxerickson
If you aren't going to disclose your actual assumptions and methodology you
should probably delete all the text that purports to do that.

Will save people time.

~~~
Digiconomist
Huh? It's all in the infographic. 60% is the target, but "production takes
time" (see content here) hence the "ultimately". I'm not hiding the current
number, it's in the key statistics.

If you're interested in where the 60% comes from in the first place > it's
based on the lifetime costs of a number of machines. It was on the page a
while ago, but the index page itself isn't a research paper so I removed it.
I'll give it a new spot soon, probably on this page (already containing the
foundation of the method):

[https://digiconomist.net/bitcoin-electricity-
consumption](https://digiconomist.net/bitcoin-electricity-consumption)

If you just want to see some real-world numbers, check out my break-down a
farm recently:

[https://twitter.com/digieconomist/status/898582265080446976](https://twitter.com/digieconomist/status/898582265080446976)

(Note: subtle difference between part spent on elec & part spent on ongoing
costs. I take costs and then 1 kWh for every 5 cents spent, so including
overhead.)

~~~
maxerickson
Okay, I'll rephrase: An explanation of where each number in the table comes
from would be more interesting than the current text.

It would also be useful to separate the table so that one contained the
information meant to be conveyed by the index and another contained the
impressive comparisons to countries and households and stuff.

------
westurner
... Speaking of environmental externalities,

In the US, "Class C" fire extinguishers work on electrical fires:

From Fire_class#Electrical:

[https://en.wikipedia.org/wiki/Fire_class#Electrical](https://en.wikipedia.org/wiki/Fire_class#Electrical)

> Carbon dioxide CO2, NOVEC 1230, FM-200 and dry chemical powder extinguishers
> such as PKP and even baking soda are especially suited to extinguishing this
> sort of fire. PKP should be a last resort solution to extinguishing the fire
> due to its corrosive tendencies. Once electricity is shut off to the
> equipment involved, it will generally become an ordinary combustible fire.

> In Europe, "electrical fires" are no longer recognized as a separate class
> of fire as electricity itself cannot burn. The items around the electrical
> sources may burn. By turning the electrical source off, the fire can be
> fought by one of the other class of fire extinguishers [citation needed].

------
TekMol
The reward for mining a block will go down over time. In the end, all mining
will be financed via the transaction fees. Then the market will figure out how
much energy should be used per transaction.

~~~
iaw
Does that justify wasting enough electricity to power Dallas, Texas in the
mean time?

~~~
jstanley
It's not "wasted". The miners wouldn't spend the energy if they weren't
getting a good return on their investment.

Just because you don't like bitcoin doesn't make it a "waste" of energy, any
more than mining gold is a "waste" of energy if you don't like gold.

~~~
rainbowmverse
You're thinking of waste too narrowly. That power wasn't available for other
things, so more had to be produced to cover Bitcoin and the other things,
which meant more of all the negatives that come with energy production. Does
Bitcoin provide something valuable enough to human civilization to account for
that? Could that value have come from a more efficient source?

Failing to account for externalities is how we get rapid ecosystem destruction
(before even bringing in climate change). Those Bitcoins aren't innocent
little bits on drives. They have a cost to the planet they're produced on and
the life that inhabits it.

~~~
jstanley
If you think you can replace bitcoin with something more efficient, please do
so. The millions of people who use bitcoin every day would gladly switch to a
cheaper version if it was truly just as good.

~~~
rainbowmverse
I don't take it as a given that Bitcoin is a good solution to the problem
those people solve with it. The best of the bad solutions is still bad, and
Bitcoin isn't looking too good by its power consumption. It's okay to stop,
really think about a problem, and find a good solution instead of charging
ahead with a bad one oblivious to the brick wall ahead.

~~~
jstanley
What do you think is the best way to store+exchange value across borders in a
way that can't be censored or reversed by any third party and doesn't require
trusting or asking permission from any third party?

Personally, I think the answer is bitcoin.

~~~
JuicyJay
Made an account just to upvote your comment. This is an incredibly powerful
point that appears to be completely missed by the majority of threads I'm
seeing. Maybe PoS will turn out to be effective and reduce energy costs for
cryptocurrencies, but there is absolutely nothing like them. The anonymity of
money is valuable for any free and open society, and Bitcoin is currently
providing that to anyone willing to create a wallet.

~~~
Nursie
Who told you bitcoin was anonymous?

------
jacquesm
What the article fails to take into account is the huge volatility of BTC
relative to the USD. So if you are going to make this calculation over a whole
year then you have to split it up into many small calculations (for instance,
per block with the going rate of BTC:USD at the time) and then accumulate in
USD.

On another note: a very large fraction of all bitcoin mining is happening in
China and electricity cost there is quite different compared to the USA.

So I seriously question the prime assumption leading to the quoted energy
consumption.

------
blondie9x
It's such a waste of energy in a planet already burdened with climate change
we worsen annually. Greed is crazy. What this is wasting is painful to see.

------
chriswilmer
This is a stupid comparison. The number of transactions can be increased by a
factor of a 1000 easily while holding the amount of energy expended constant.

~~~
rspeer
If it's so easy, please describe how.

~~~
Shorel
The how is easy to explain with just the name of an implementation/fork:
Bitcoin Cash.

The reason it has not happened for original Bitcoin is internal politics. If
the number of transactions are limited then they are more profitable.

~~~
rspeer
I do not believe that Bitcoin Cash is 1000x more efficient than Bitcoin. It is
an extraordinary claim and requires extraordinary evidence.

~~~
Shorel
It is not, each block in Bitcoin Cash can only hold 8x more transactions.

Also, and more important: it is not necessary to for it to be 1000x more
efficient, because no cryptocurrency currently has such a big amount of
transactions per hour. It would be more wasteful to support 1GB blocks when
they would go empty.

But, and this is actually my claim, if volume transaction increases enough to
saturate a Bitcoin Cash block, then they will increase block size, as many
times as it is needed, as that is the proposed Bitcoin Cash strategy. In stark
contrast with the Bitcoin 1MB blocks forever strategy.

(I am assuming you don't think efficiency is measured in watts per
transaction, because if you do, /facepalm)

------
merkaloid
>Number of U.S. households powered for 1 day by the electricity consumed for a
single transaction: 5.58

The one that surprised me the most

~~~
Taek
It's a bad stat. The electricity that goes into a block doesn't just confirm
the transactions in the block, it also confirms all the transactions in all
blocks prior to that block, and those transactions have a cumulative value of
about $70 billion.

The bleak picture painted on the article is an incomplete one by far.

~~~
lttlrck
Why is it a bad stat? Is having to confirm all transactions in all prior
blocks not a direct result of a transaction? Why is the cumulative value
relevant? I can see how there is a perceived value there but if the
transaction didn’t happen it wouldn’t have been needed?

~~~
Taek
If the block had zero transactions in it, it still would have cost just as
much energy to create.

Similarly, if the price of the coin were 1/1000th but the block were full, it
would have cost 1/1000th the price to confirm those transactions.

What determines the cost/mining reward of a block is not the transactions in
it, but the value of the chain as a whole.

~~~
lttlrck
Ah got it. Thanks.

------
decentralised
Why don't we compare Bitcoin's energy footprint with that of all the banks,
remittance shops and associated infrastructure instead?

The PoW is quite expensive, but remember that mining is a subsidised activity
amounting to billions of dollars worth of rewards for the miners, many of whom
make extensive use of hydro-electric and solar power.

There's the question of wether we need all this hashing power to protect the
billions of dollars worth of bitcoin market cap. The truth is that ASICs
mining was not anticipated and neither was the "arms race" that made mining
into a profession. With Proof of Stake consensus algorithms taking front stage
in Ethereum, EOS and other blockchain projects, PoW is bound to be abandoned
or significantly changed.

~~~
sowbug
Both ASIC mining and the arms race were anticipated as early as 2008:

"[As] the network grows beyond a certain point, it would be left more and more
to specialists with server farms of specialized hardware." [https://www.mail-
archive.com/cryptography@metzdowd.com/msg09...](https://www.mail-
archive.com/cryptography@metzdowd.com/msg09964.html)

"We should have a gentleman’s agreement to postpone the GPU arms race as long
as we can for the good of the network. It’s much easer to get new users up to
speed if they don’t have to worry about GPU drivers and compatibility. It’s
nice how anyone with just a CPU can compete fairly equally right now."
[https://bitcointalk.org/index.php?topic=12.msg54#msg54](https://bitcointalk.org/index.php?topic=12.msg54#msg54)

~~~
decentralised
You're right.

------
GuB-42
What kind of unit is a TWh/year? Why not just use watts?

By the way, 10 TWh/year is about 1.21 GW.

------
z3t4
While it's a lot of power being used, it's pretty much all automated, versus
any other currency that takes a lot of manual labor. Bitcoints biggest flaw in
my mind is that there is no trust built in. After each transaction it should
be possible to give a rating, so that each wallet/account has a reputation, it
could work like "Pagerank". Trust is essential to Bitcoin and Bitcoin markets
usually has either public trust, or rating and escrow added on.

------
codecamper
I always thought it was purely ridiculous that bitcoin requires mining which
eats energy. So freaking ugly. The genius that created bitcoin could not see
that the cheapest form of energy is coal and that his idea will just spew more
CO2 into the atmosphere. Or somehow this genius could not see that? OK, yes...
Iceland's geothermal energy.

------
raffomania
Has anyone read up on the proof-of-stakes algorithms mentioned in this
article? I didn't hear of those before.

~~~
schoen
There's some Wikipedia coverage.

[https://en.wikipedia.org/wiki/Proof-of-
stake](https://en.wikipedia.org/wiki/Proof-of-stake)

Maybe there's a better or more up-to-date introduction elsewhere.

~~~
Taek
[https://download.wpsoftware.net/bitcoin/pos.pdf](https://download.wpsoftware.net/bitcoin/pos.pdf)

Most bitcoin heavyweights who have researched proof of stake have concluded
that it's not viable, and not worth further research in the context to
trustless and decentralized systems.

------
westurner
How does this compare to carbon-intensive resource extraction operations like
gold mining?

(Gold is industrially and medically useful, IIUC)

See also:

"So, clean energy incentives"
[https://news.ycombinator.com/item?id=15070430](https://news.ycombinator.com/item?id=15070430)

------
tehlike
Funny way to say this. Why not 1 us household for 5.58? Any reason for this?

Edit: title seems to be fixed.

------
kaonashi
Bitcoin is the very essence of the free rider problem, it derives its value
from illicit goods and money laundering and uses real resources at an
incredibly inefficient rate to do so.

------
diafygi
Well...yeah. It's kind of by design, right?

I mean, it's either "work" or centralization, so that's the trade off bitcoin
makes. The work is the disincentive against cornering, right?

~~~
jaekwon
No. There are sustainable alternatives to PoW. See Tendermint and the Cosmos
Network, for example.

------
freech
Taking lots of energy is literally the point of proof-of-work. Criticizing
Bitcoin mining for using lots of energy is like criticizing DNA evidence for
being hard to fake.

------
Myrth
The article says that Bitcoin could switch to proof-of-stake. Can it really do
that and stay Bitcoin? I'm sure it would require at least blockchain split...

------
c3534l
I'm really confused by this article. Sometimes it seems like they're talking
about bitcoin mining, then they start talking about transactions.

~~~
iaw
The act of mining confirms transactions in bitcoin.

------
toisanji
Such a waste of energy for this experiment.

------
raverbashing
I wonder what happens if/when the cost of mining becomes prohibitive

This is a crash waiting to happen

~~~
fab13n
It can't: regularly (every 2 weeks IIRC) the hash difficulty is ajusted, so
that with the average hashing power available during the last period, a new
block would be found every 10 minutes on average.

So if it becomes less profitable, some miners give up, the mining rate falls,
and the difficulty is adjusted so that it becomes cheaper, hence more
profitable, to mine.

~~~
raverbashing
Ah I see, I was not aware the difficulty could go down as well

------
antocv
Byteball is not PoW or PoS, but has no energy waste for consensus.

------
abalone
Note: Ethereum adds another 30% and is rapidly rising.[1]

[1] [https://digiconomist.net/ethereum-energy-
consumption](https://digiconomist.net/ethereum-energy-consumption)

------
cgb223
Next week in the headlines:

"Bitcoin causes global warming"

------
decentralised
I'm saddened with how many technologists here think of money. As if our
current system of fiat currency is in any way reliable, let alone at the
ultimate stage of its evolution as a technology of wealth transfer.

If I look at the US currency as a technology that enables trade and
cooperation, I notice:

\- falsifiable; see the North Korean super dollar;

\- pieces of metal alloy; coins are a souvenir from the past we shouldn't be
bringing them into the future.

\- porous fibre carry bacteria; See here:
[http://www.newsmax.com/health/Health-News/paper-money-
germs-...](http://www.newsmax.com/health/Health-News/paper-money-germs-
bacteria/2014/04/21/id/566829/)

This makes me doubt if I can trust it and unlikely that I'll carry it on me.

On the other hand Bitcoin and other cryptos are currencies from the future
that we all can buy and use today.

These are currencies designed to assure trust between unknown parties, so they
are most definitely a means of exchange with no significant counter-party
risk.

As a store of value, they suffer from the same speculative price fluctuations
all too common in the FX markets, as we can see with the GBP over the last
year or so. In crypto, this natural movements are amplified because there are
no jurisdictions and very low barriers of entry, so when the coin supply
doesn't increase to meet the demand prices go up, as they should. And lets not
forget that several countries have already moved to recognise crypto-
currencies as legal tender, so demand is increasing by reaching wider portions
of consumer market.

As for crashes, to the best of my recollection, all major ones were caused by
panic selling following news of major hacks
([https://storeofvalue.github.io/posts/cryptocurrency-hacks-
so...](https://storeofvalue.github.io/posts/cryptocurrency-hacks-so-far-
august-24th/)) or rumours of impending legislative crackdown in China and now
in the US.

The intrinsic value of crypto-currencies is in the platforms that support
them, so not only the market cap but also what the project stands for and what
it can deliver in terms of market proposition, for instance:

\- Ether is used to pay for resource utilisation on the Ethereum platform
which I use to develop smart contracts, but the Foundation is re-inventing the
internet so that's how I value the currency.

\- Monero, ZCash are in the forefront of cryptographic research and are some
of the most accessible and privacy protecting financial instruments available
so that's how I value them.

\- Bitcoin is all about economic resilience and self-sovereignty,
unfortunately the in-fighting is bound to decrease its usefulness.

(edit: formatting)

------
mark024
demand & offer, if the energy were more expensive, fewer would mine and the
difficulty would drop, I wish I could mine on my low powered laptop, but if
you want to raise the pitch forks against bitcoin, on the same logic, we could
stop playing computer games, watch movies/shows/tv etc, even using modern
phones, the old nokias that lasted a week one one charge would do fine.

~~~
rainbowmverse
People have been raising the issue of our civilization's wastefulness for
years. Where have you been?

~~~
mark024
Don't remember seeing any article about how many houses we could power by not
playing computer games.

~~~
rainbowmverse
A bit old, but it's one of the first results on Google.

[https://www.scientificamerican.com/article/video-gamers-
use-...](https://www.scientificamerican.com/article/video-gamers-use-as-much-
energy-as-san-diego/)

>> _U.S. homes have about 63 million video game consoles, and together they
use about as much energy as San Diego does in a year, according to a 2008
study by the Natural Resources Defense Council_

