
MS: Bitcoin mining uses as much electricity as 1M US homes - pulisse
https://twitter.com/FatTailCapital/status/899714838796148745
======
alexkcd
Proof of work systems are, at the core, a race towards ever greater energy
consumption. They're an environmental disaster waiting to happen. Surprised
how little attention this gets.

I would argue that the benefit of decentralization is not worth the price.

~~~
sbenitoj
What would you say is the value of decentralization?

~~~
alexkcd
I'm not advocating for decentralization. Just offering that up as a common
argument that PoW advocates use.

I think that in reality, PoW systems become more centralized over time. You
can already see that with Bitcoin. Eventually the gatekeepers become those
with the largest energy resources available to them, and "we the people" will
be in the noise when it comes to hashing power.

I'd rather take energy efficient centralization than faux decentralization
that also happens to destroy the environment.

~~~
sbenitoj
The ability to fork off from the main chain and create your own coin + the
long-term economic interest of miners being aligned with the entire ecosystem
acts as checks on these potential problems.

------
modeless
I am always disappointed when this discussion comes up, because nobody
considers what will certainly happen in the future. This situation, where a
large percentage of Bitcoin's value is spent on mining, is temporary.

Bitcoin's mining reward halves every couple of years. When the Bitcoin block
reward becomes negligible, as it _certainly_ will in within a few decades, the
only thing funding Bitcoin miners will be transaction fees, so the entire cost
of Bitcoin mining will be borne directly by users of the network.

The amount of money spent on electricity for mining is exactly the same as the
(perceived) value of the mining rewards. Therefore, in the future the amount
of money spent on electricity for mining will _certainly_ go down as a
percentage of Bitcoin's value.

If Bitcoin becomes very popular and valuable, transaction fees may be
significant in absolute terms, but they will always be a very small percentage
of the total, and likely smaller than the percentage of economic output
consumed by the traditional financial system (in the future when the block
reward is small).

~~~
beebmam
I think that's one of the biggest flaws of bitcoin and will eventually lead to
its collapse.

I simply don't want to invest in mining considering how much people have
already mined. There's deflationary pressure for many reasons, but definitely
because of the rewards being cut in half every couple of years. And currency
deflation is highly unappealing for those who don't have large amounts of that
currency.

Psychologically this is bad design, and it turns a lot people off from it. It
makes it feel like a scam. That's good enough to piss enough people off about
it to never use it, including me.

~~~
abhisharm
You're describing a cognitive bias wherein you would be turned off from a
monetarily beneficial decision because of the foregone gains you would've had
had you made the decision to enter the game earlier. This won't lead to the
collapse of bitcoin, it just means that those who will profit from mining now
and in the future are those who won't fall prey to that sort of thinking.

------
billytetrud
This isn't at all true. 1.4 terawatts would only power about 230,000 homes.
And other sources have estimated bitcoin's energy cost at significantly lower:
330 megawatts: [https://securitygladiators.com/2017/03/15/bitcoin-uses-
energ...](https://securitygladiators.com/2017/03/15/bitcoin-uses-energy-a-
lot/) .

Also think about the cost of normal money. Just printing currency costs the US
over $700 million per year:
[https://www.federalreserve.gov/faqs/currency_12771.htm](https://www.federalreserve.gov/faqs/currency_12771.htm)
. This is not to mention the rest of the infrastructure.

Last point, Bitcoin mining won't get much more energy intensive. Why? Because
the amount of energy used in mining is directly proportional to the value of
mining a block. As soon as segwit is activated tomorrow, the value of mining
will drop. As soon as the lightning network funnels 99% of transactions off
the blockchain, the value of mining will drop. As soon as bigger block sizes
are allowed, the value of mining will drop. Bitcoin doesn't have to be any
more "wasteful" than is needed to secure the blockchain.

------
skrebbel
As usual in any environmental debate, all sides choose deceiving stats. In
most western countries, homes only account for about a quarter of total energy
consumption [0].

So while people reading this headline would think "wow, that's the total
energy use of a town like San Francisco!", in reality, it's more like the
total energy usage of a town like Fremont. Less spectacular for sure.

Remember to use this! If you're pro-environment, always express your energy
consumption numbers in terms of "homes", for a 4x more impressive result.
After all, who care about the truth when the planet is going to shit (note:
the anti-environment folks, or whatever they call themselves, do the exact
same thing but I can't come up with a nice example right now).

This also means that if you see someone express energy usage in terms of N
homes, you know they're ok with twisting the numbers to make a point. Read the
rest with a grain of salt.

[0] [http://ec.europa.eu/eurostat/web/products-eurostat-
news/-/DD...](http://ec.europa.eu/eurostat/web/products-eurostat-
news/-/DDN-20170328-1)

------
anandsuresh
The proof-of-work algorithm is an expensive proposition. I wonder if there are
ways to utilize all that power and compute to perform useful work... like
reCAPTCHA. The desired characteristics would include to ability to dynamically
modify the difficulty of the problem.

~~~
hamandcheese
I really like this idea. Perhaps transaction fees could be paid by those
needing compute, and the result might be a globally distributed cryptocurrency
AND a huge pool of (hopefully) cheap compute resources.

~~~
anandsuresh
Exactly! I don't expect this to work for every case, but if we can re-think
even a small subset of socially-relevant computation problems as a PoW scheme,
that could be a game-changer!

------
dplarson
I'm having trouble finding the source of the figure shown, but I did find a
page with similar information ("Bitcoin Energy Consumption Index"):
[https://digiconomist.net/bitcoin-energy-
consumption](https://digiconomist.net/bitcoin-energy-consumption)

~~~
mrb
I have produced what is to my knowledge the most precise estimate of Bitcoin's
energy consumption: [http://blog.zorinaq.com/bitcoin-electricity-
consumption/](http://blog.zorinaq.com/bitcoin-electricity-consumption/) That
other index ("Bitcoin Energy Consumption Index") is famously flawed, and its
author is strangely defensive. I wrote a critic:
[http://blog.zorinaq.com/serious-faults-in-
beci/](http://blog.zorinaq.com/serious-faults-in-beci/)

The chart
[https://twitter.com/FatTailCapital/status/899714838796148745](https://twitter.com/FatTailCapital/status/899714838796148745)
was produced as described in the footnote (mining hashrate × efficiency
linearly declining from 1.5 to 0.2 J/GH), which IMHO fairly represents the
"upper bound" of the energy consumption. The real consumption is likely lower.
For example my study estimates the current efficiency is between 0.100 and
0.195 J/GH.

To give you an idea, "1M US homes continuously" is roughly the annual
electricity consumption of decorative Christmas lights in the US.

~~~
dplarson
Thanks for the info and context!

------
cbanek
Is that more or less than the amount of power used to grow marijuana indoors?

[https://www.theguardian.com/us-news/2016/feb/27/marijuana-
in...](https://www.theguardian.com/us-news/2016/feb/27/marijuana-industry-
huge-energy-footprint)

~~~
dajohnson89
Consider also that residential power consumption is a minority percentage of
the total (vs manufacturing and commercial).

~~~
cbanek
True, although I imagine the legal dispensary grows are all on commercial
rates, and those are pretty big.

------
urza
I wonder how much energy is consumed by wallstreet and all banks worldvide,
including the work wasted by all the employees, money printing facilities, and
all this other things required for fiat money to have any value. I bet you
bitcoin minig is drop in the ocean compared to it.

------
colordrops
Isn't a lot of mining done in places where electricity is cheap and/or clean,
such as hydroelectric in China and geothermal in Scandinavia?

~~~
urza
Yes it is. Chinese mines are mostly hydro powered. On iceland is running huge
mining operarion on thermals.

~~~
zakk
No, more than half of Chinese energy is produced from coal.

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

I did some research, and it doesn't seem that the mining farm in Iceland is
even comparable to Chinese ones in terms of hashrate. Do you have any source?

~~~
urza
Many od the mines in china are placed directly near the hydro poweplants.. not
becauss any environmental factors but because hydro pw is cheaper for them.

~~~
zakk
It still seems a quite a stretch to say that "Chinese mines are mostly hydro
powered", when the country runs mostly on fossile fuels and the three biggest
mining pools (accounting for 46% of total world hashrate) don't seem to be
anywhere near a hydro powerplants.

------
coryl
Whats the alternative cost of printing, storing, protecting, and maintaining
an equivalent cash value? Is that a fair comparison?

~~~
bdcravens
Then you'd have to factor in cost of running exchanges as well as storing for
those who maintain their own wallet.

~~~
coryl
Regardless, an economy running on say $100b of cryptocurrency is more cost
efficient than one running on cash, is it not?

I mean, as a matter of principle, the transaction fees of a bitcoin
transaction are always cheaper than any credit card swipe, ATM withdrawal, or
wire transfer.

------
cgb223
I wonder how much that contributes to something like global warming

It would be pretty strange if bitcoin had a noticeable effect

------
westurner
So, clean energy incentives.

> That means 1.2% of the Sahara desert is sufficient to cover all of the
> energy needs of the world in solar energy.

[https://www.forbes.com/sites/quora/2016/09/22/we-could-
power...](https://www.forbes.com/sites/quora/2016/09/22/we-could-power-the-
entire-world-by-harnessing-solar-energy-from-1-of-the-sahara/)

Nearly all other animals on the planet survive entirely on solar energy.

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

------
0xbear
I only mine during late fall and winter, when heat is not wasted. I wonder if
they took that into account.

~~~
czechdeveloper
Most mining are centralized factories where such thing is not even possible,
so I believe it would not even make sense to put your case into account.

~~~
kalleboo
Well, it _could_ be possible (district heating is a thing in many places)

------
pmuk
Please correct me if I'm wrong but does this mean it takes around 3-4
households worth of daily energy use to confirm a bitcoin single transaction?

[https://blockchain.info/charts](https://blockchain.info/charts)

------
choonway
I wonder what would happen when quantum computers manage to break Bitcoin.

