
Bitcoin boom may be a disaster for the environment - secfirstmd
http://money.cnn.com/2017/12/07/technology/bitcoin-energy-environment/index.html
======
seibelj
Comparing the energy used for Visa transactions to Bitcoin is a false
comparison. Bitcoin not only handles transactions, but more importantly, it
maintains current wealth and the entire history of every transaction that took
place, including the rules that manage it.

You should compare the energy bitcoin uses to all energy used by traditional
banks, their corporate headquarters, the government regulators responsible for
managing the system, lawyers / judges / institutions managing conflicts,
mobile apps and servers powering it, etc.

Bitcoin is doing all of these things without formal institutions, employees,
governance, and official regulation.

~~~
spookthesunset
> Bitcoin is doing all of these things without formal institutions, employees,
> governance, and official regulation.

All at a whopping pace of 4 transactions per second... Which means that if the
entire population of Denver used Bitcoin, they'd only get to make a single
transaction once every 2 days.

I don't care what you say or what you compare it to, Bitcoin is _very_
inefficient at what it does. And worse, its energy consumption is _not_ a
function of its transaction volume, but of its price in fiat. The higher the
price, the more energy miners will throw at it as they attempt to win the next
block reward.

And it is this way _by design_. Take all that inefficiency away and you give
up all that makes Bitcoin what it is....

source:
[https://www.wolframalpha.com/input/?i=(population+of+denver)...](https://www.wolframalpha.com/input/?i=\(population+of+denver\)+%2F+\(4+people+per+second\))

~~~
marcoperaza
The best way to think about it is like gold. The gold standard didn't mean
that everyone was doing day to day trading in gold. While you could carry
around physical gold (and coins did contain precious metals), gold-backed
notes were a big part of the equation.

If Bitcoin became a major currency, you'd have banks that pay you interest for
your deposits and then issue you notes (not necessarily physical). They would
pay for your interest and make their profit by lending out a portion of
deposits.

~~~
BoiledCabbage
So essentially Bitcoin is so terrible as an actual currency / method of
transferring money that we'll need to create another crypto on top of it that
fixes all of the original issues of Bitcoin. All the while Bitcoin will still
be using > 15% of all energy consumed in the world. Oh and we still have to
trust Banks to make the underlying transactions on the Bitcoin when we use
this new currency but Bitcoin is too slow to keep up with the needed
transaction rate.

This is a disaster. And like most technologists, everyone enamored with the
technology is completely blind or in denial of the actual societal interaction
- which will be abysmam.

Bitcoin will be society's first grey goo. It's just a waiting game until
people are ready to admit it.

------
fragsworth
It's not nearly that bad, because it makes more sense to compare these numbers
to gold. Gold is economically similar, since most of its value comes from
speculation on the notion that it is deflationary.

If we assume that 85% of total global gold production comes from primary gold
mining only, then the 88 million oz (Moz) produced in 2016 consumed the energy
value of an estimated 123.2 million barrels of oil equivalent versus 6.6
million barrels of oil equivalent for all Bitcoin production.

[https://srsroccoreport.com/bitcoin-vs-gold-which-ones-a-
bubb...](https://srsroccoreport.com/bitcoin-vs-gold-which-ones-a-bubble-how-
much-energy-do-they-really-consume/)

The speculative power of gold comes from a kind of "Proof of Work" very much
like Bitcoin, by a different mechanism (with different economic properties, of
course).

If Bitcoin partially replaces gold (in market cap), and we don't find
alternatives for Proof-Of-Work, it seems reasonable to assume that it will
_also_ partially replace gold's energy consumption as well.

~~~
sametmax
Also, let's compare it to cash. Bitcoin is currently worth more than $15000.
How much energy is spent to create this in bank notes ?

Or compare to banks. How many people do you need to provide an office for with
all the associated cost so that the structure can create $15000 ?

~~~
cryptodogemoon
Banks safeguard your deposit and offer significantly more services than
Bitcoin.

A better comparison to energy usage would be other distributed computing
systems.

Bitcoin is insanely wasteful by design because it's requiring clients brute
force guess the hashes in increasingly rising difficulty.

Computational work in cryptosystems of the future would ideally provide useful
work that provides value other than brute force hash resistance.

------
ttul
Nobody is forcing anyone to build mining rigs and pay to power them. To the
extent that there are environmental externalities to Bitcoin mining, they are
the result of improper pricing on these externalities - such as a lack of a
carbon tax in many places.

If the energy required to mine BTC costs more than the value generated, miners
stop mining. Tax the externalities properly and there is no environmental
problem here.

~~~
jsmthrowaway
You think energy should be taxed more and cost more because of Bitcoin’s
value? Am I reducing that argument correctly?

~~~
kaffeemitsahne
Either the negative externalities of energy consumption are included in the
energy price, or they aren't. Bitcoin is just bringing this point to light.

~~~
jsmthrowaway
So, that’s a yes, then? Coming from Bitcoin, the harbinger of free marketry,
her proponents calling for additional taxes to be levied upon energy to help
unfree a market is a bit odd.

“We made this thing which consumes about as much energy as Serbia on an
international scale, and is very likely in the running for the most expensive
computation on the planet. It’s designed incredibly inefficiently to brute
force through SHA2 in 30MW+ space heaters around the world because we believe
centralization is Evil, but now that what it makes is valuable, we can deflect
criticism of its energy consumption to the pricing of the electricity markets.
Raise the price of energy to stop us. What’s that? A lot of people already
can’t afford electricity?”

It’s OK to admit Bitcoin is inefficient.

~~~
crazygringo
You're setting up a complete straw man. Believing in benefits of an
international, decentralized currency in no way implies you're against
taxation or higher taxes.

Free markets don't exist in a vacuum. Taxes pay for all the institutions that
enable free markets -- including but not limited to law, enforcement of
contracts, and especially (hopefully) the proper accounting of externalities.

------
erentz
I don’t like the power consumption but it seems interesting what we value. A
distributed currency is bad. But Google consuming something like 26 TWh per
year (by my back of napkin math) to serve Youtube videos of cats is fine? How
much do Facebook and all the other social networks consume?

The reality is we produce power and price it for a reason. Because the modern
world runs on it for all kinds of things. What we really have a problem with,
that all these articles are upset about, is that we DO NOT price power
correctly and allow it to externalize all environmental cost. Let’s be
intellectually honest and rather than attacking Google, or Facebook, or
Bitcoin for existing, let’s make sure we price in the environmental cost
correctly through carbon taxes.

~~~
filereaper
I understand your argument, but specifically with Google, they now claim:

"100% renewable energy for our global operations — including both our data
centers and offices." [1]

I'm not here to debate the merits of cat videos vs bitcoin mining, but to
point out that the youtube cat videos are hosted on environmentally friendly
data centers.

[1]
[https://environment.google/projects/announcement-100/](https://environment.google/projects/announcement-100/)

------
jrowley
Etherium’s proof of stake should solve this problem. But I agree, the
incentives aren’t aligned to help the environment and that should be a major
concern for anyone who cares about future generations livelihood.

~~~
Sir_Substance
It would solve this problem, but it will introduce new, exciting problems in
the process:

[https://download.wpsoftware.net/bitcoin/pos.pdf](https://download.wpsoftware.net/bitcoin/pos.pdf)
(skip ahead to costless simulation)

~~~
manveru
Coins like NXT already use proof of stake. And NEM has so-called proof of
importance. Do you know how that might play out long term? I'm rather fond of
their approach but then I see the top coin holders get almost all the rewards
for "forging". I'll read your linked document in a bit when in not on mobile
anymore

~~~
Sir_Substance
>Do you know how that might play out long term?

Anyone who tells you they know how cryptocurrencies are going to play out long
term is blowing smoke up your arse.

The killer feature of bitcoin is that it's distributed. That has a lot of
tradeoffs, because it's a fundamentally different way of doing electronic
money. Bitcoin is shit for doing some things, but hey, so are SWIFT
transactions. Bitcoin uses more electricity than AMEX but it pulps less trees
than paper notes, pick your poison. It's all about having a broad set of tools
in the toolbox, so you can pick the right one for the job. The reason bitcoin
has value is because it offers a unique set of tradeoffs that can do /some/
jobs better than all prior financial tools.

A lot of people are going to spend a lot of time trying to find ways to fix
the negative parts of the tradeoff, but thus far the fixes that have been
proposed generally involve making the network more centralized and/or
accepting a certain number of trusted actors in the system.

The thing is, if you're going to have a centralized system that maybe hinges
on trusted actors, you might as well use an actual bank. Banks have tradeoffs
as well and there are certainly downsides to them, but one of the pros is that
a bank operates under regulation that creates legal ramifications if it
breaches it's trust responsibilities (at least in theory). Why would anyone
want a version of bitcoin that requires you to trust that you won't get lied
to when you bring a new node online to join the network?

So my guess (and it is just a guess) is that proof of stake systems will not
overtake bitcoin in market value /unless/ they become subject to government
regulation that enforces trust through threat of arms (police kicking down
your door). Without that, their inherent bias towards creeping centralization
will cause them to hit a value plateau.

------
sysout
This author has no vision. Within five years, we will have big energy crisis:
we will produce more energy than what we can consume! Solar farm in Dubai is
built for only 3¢/kWh this year. Solar energy is crushing fossil fuels. We
will become type 1 civilization faster than you can imagine.

Legendary Satoshi foresees this energy crisis and invented bitcoin to save
energy companies from bankruptcy and accelerate the progress we become type 1
civilization.

Thinking bitcoin just as a digital currency? Think it again!

------
macawfish
Bram Cohen is working on "Chia", an alternative to Bitcoin that uses
alternative, low power proofs:

[https://www.facebook.com/BerkeleyBlockchain/videos/200606982...](https://www.facebook.com/BerkeleyBlockchain/videos/2006069823011271/)

------
toyg
A friend recently pointed out that all these projections are based on a single
source: Digiconomics. A source that has an interest in touting the
technologies it “reports” on, which have a perennial credibility problem.

So I wouldn’t take all these discussions of bitcoin-powered ecological doom
too seriously yet.

------
_Marak_
I am sending this message from the year 2025. Things are looking bleak here,
and some of you will carry blood on your hands. If you don't believe me,
please move on, as I have no way of proving to you I'm really who I claim to
be.

I don't want to waste any of your time, so I'm merely going to explain what
happened. On average, every year so far, the value of Bitcoin has increased by
about a factor ten. From 0.1 dollar in 2010, to 1 dollar in 2011, to 10 dollar
in 2012, to 100 dollar in 2013. From now on, there's a slight slowdown, as the
value increased by a factor ten every two years, to 1,000 dollar in 2015, to
10,000 in 2017, 100,000 in 2019, and 1,000,000 in 2021. From here onwards,
there's no good way of expressing its value in dollars, as the dollar is no
longer used, nor is any central bank issued currency for that matter. There
are two main forms of wealth in today's world. Land and cryptocurrency. There
are just over 19 million Bitcoin known to be used in the world today, as well
as a few hundred thousand that were permanently lost, and we're still dealing
with a population of just over 7 billion people today. On average, this means
the average person owns just under 0.003 bitcoin. However, due to the unequal
distribution of wealth in my world, the mean person owns just 0.001 bitcoin.
That's right, most of you reading this today are rich. I personally live next
to an annoying young man who logged into his old Reddit account two years ago
and discovered that he received a tip of 0.01 Bitcoin back in 2013 for calling
someone a "faggot" when he was a 16 year old boy. Upon making this discovery
he bought an airline ticket, left his house without telling anyone anything
and went to a Citadel.

"What is a Citadel?" you might wonder. Well, by the time Bitcoin became worth
1,000 dollar, services began to emerge for the "Bitcoin rich" to protect
themselves as well as their wealth. It started with expensive safes, then
began to include bodyguards, and today, "earlies" (our term for early
adapters), as well as those rich whose wealth survived the "transition" live
in isolated gated cities called Citadels, where most work is automated. Most
such Citadels are born out of the fortification used to protect places where
Bitcoin mining machines are located. The company known as Coinbase to you is
known to me as a city where Mr. Armstrong rules as a king.

In my world, soon to be your world, most governments no longer exist, as
Bitcoin transactions are done anonymously and thus most governments can
enforce no taxation on their citizens. Most of the success of Bitcoin is due
to the fact that Bitcoin turned out to be an effective method to hide your
wealth from the government. Whereas people entering "rogue states" like
Luxemberg, Monaco and Liechtenstein were followed by unmanned drones to ensure
that governments know who is hiding wealth, no such option was available to
stop people from hiding their money in Bitcoin. Governments tried to stay
relevant in my society by buying Bitcoin, which just made the problem worse,
by increasing the value of Bitcoin. Governments did so in secret of course,
but my generation's "Snowdens" are in fact greedy government employees who
transferred Bitcoin to their own private account, and escaped to anarchic
places where no questions are asked as long as you can cough up some money.

The four institutions with the largest still accessible Bitcoin balance are
believed to be as following:

    
    
      - Coinbase - 50,000 Bitcoin
    
      - The IMF's "currency stabilization fund" - 70,000 Bitcoin
    
      - Government of Saudi Arabia - 110,000 Bitcoin
    
      - The North Korean government - 180,000 Bitcoin
    

Economic growth today is about -2% per year. Why is this? If you own more than
0.01 Bitcoin, chances are you don't do anything with your money. There is no
inflation, and thus no incentive to invest your money. Just like the medieval
ages had no significant economic growth, as wealth was measured in gold, our
society has no economic growth either, as people know their 0.01 Bitcoin will
be enough to last them a lifetime. The fact that there are still new Bitcoin
released is what prevents our world from collapse so far it seems, but people
fear that the decline in inflation that will occur during the next block
halving may further wreck our economy. What happened to the Winklevoss twins?
The Winklevoss twins were among the first to die. After seeing the enormous
damage done to the fabric of society, terrorist movements emerged that sought
to hunt down and murder anyone known to have a large balance of Bitcoin, or
believed to be responsible in any way for the development of cryptocurrency.
Ironically, these terrorist movements use Bitcoin to anonymously fund their
operations.

Most people who own any significant amount of Bitcoin no longer speak to their
families and lost their friends, because they had to change their identities.
There have been also been a few suicides of people who could not handle the
guilt after seeing what happened to the bag-holders, the type of skeptical
people who continued to believe it would eventually collapse, even after
hearing the rumors of governments buying Bitcoin. Many people were taken
hostage, and thus, it is suspected that 25% percent of "Bitcoin rich" actually
physically tortured someone to get him to spill his password. Why didn't we
abandon Bitcoin, and move to another system? Well, we tried of course. We
tried to step over to an inflationary cryptocurrency, but nobody with an IQ
above 70 was willing to step up first and volunteer. After all, why would you
voluntarily invest a lot of your money into a currency where you know your
wealth will continually decline? The thing that made Bitcoin so dangerous to
society was also what made it so successful. Bitcoin allows us to give into
our greed. In Africa, surveys show that an estimated 70% of people believe
that Bitcoin was invented by the devil himself. There's a reason for this.
It's a very sensitive issue that today is generally referred to as "the
tragedy". The African Union had ambitious plans to help its citizens be ready
to step over to Bitcoin. Governments gave their own citizens cell phones for
free, tied to their government ID, and thus government sought to integrate
Bitcoin into their economy. All went well, until "the tragedy" that is. A
criminal organization, believed to be located in Russia, exploited a hardware
fault in the government issued cell phones. It's believed that the entire
continent of Africa lost an estimated 60% of its wealth in a period of 48
hours. What followed was a period of chaos and civil war, until the Saudi
Arabian and North Korean governments, two of the world's major superpowers due
to their authoritarian political system's unique ability to adapt to the
"Bitcoin challenge", divided most African land between themselves and were
praised as heroes by the local African population for it.

You might wonder, what is our plan now? It's clear that the current situation
can not be sustained, without ending in a nuclear holocaust. I am part of an
underground network, who seek to launch a coordinated attack against the very
infrastructure of the Internet itself. We have at our disposal about 20
nuclear submarines, which we will use to cut all underwater cables between
different continents. After this has been successfully achieved, we will
launch a simultaneous nuclear pulse attack on every densely population area of
the world. We believe that the resulting chaos will allow the world's
population to rise up in revolt, and destroy as many computers out there as
possible, until we reach the point where Bitcoin loses any relevance. Of
course, this outcome will likely lead to billions of deaths. This is a price
we are forced to pay, to avoid the eternal enslavement of humanity to a tiny
elite. This is also the reason we contacted you. It doesn't have to be like
this. You do not have to share our fate. I don't know how, but you must find a
way to destroy this godforsaken project in its infancy. I know this is a
difficult thing to ask of you. You believed you were helping the world by
eliminating the central banking cartel that governs your economies.

~~~
rabidrat
Copied from a reddit post from 4 years ago:
[https://www.reddit.com/r/Bitcoin/comments/1lfobc/i_am_a_time...](https://www.reddit.com/r/Bitcoin/comments/1lfobc/i_am_a_timetraveler_from_the_future_here_to_beg/)

------
geophile
Isn't there another possibility? What if a math breakthrough makes bitcoin
mining much cheaper? What would that do to Bitcoin -- hyperinflation?

~~~
ktta
It is meant to be expensive. The expense is what makes the network secure

~~~
jsmthrowaway
And if Satoshi hadn’t thought “how do I make this hard? I know: spin a
computer through SHA2 as fast as possible until it finds a magic hash,” we
would be having a much different conversation because Bitcoin and it’s
derivatives wouldn’t consume a medium-sized nation state’s worth of
electricity.

It was a bad decision. Satoshi fucked up. Please stop justifying it as a
community, I beg you. Now we are all paying for that incredibly stupid design,
and any criticism is being bearish on cryptocurrency itself.

It’s an important learning experience. Decentralization made a brilliant
engineer reach for a _brute force hash_ , and what seemed to be a pedestrian
decision while writing a paper now has _gigawatt_ ramifications and a comment
section advocating for alterations to world energy policy. Hold the paper
another year and come up with something more reasonable and respectful of the
world around you; there’s already other currencies attempting proof of work
without plugging in a billion hair dryers around the world.

Now the cat’s out of the bag, so to speak, so let’s call it a cat. Bitcoin is
one of the most inefficient, wasteful computing systems ever developed. It
happens to produce value.

~~~
ktta
>Decentralization made a brilliant engineer reach for a brute force hash

This isn't about SHA-256. This about the concept of Proof of Work. This
applies to every coin based on Proof of Work out there.

What I'm saying is that the entire concept of Proof of work is dependent on
people 'wasting' energy to prevent an attacker from taking over the network.
It _has_ to be so expensive that someone can't just spend a million dollars
and be able to take over the network.

I think of it has a bank spending a couple million on a secure safe to prevent
breaking in. What you're saying is "Banks are spending lots of money on safes,
and that's bad". Safes' value is nothing unless an attacker tries to get in.
The bitcoin network's mining seems worthless until someone tries to take over
the network.

This is a very new thing, but I'm surprised HN is still struggling to
understand. Every news outlet parroting the same thing as if the bitcoin
community is stupid is what gets me the most. I'm almost beginning to think
there's a PR campaign going on against bitcoin.

I'm all for the environment. So let's get rid of the wasteful safes, cameras,
lasers and guards protecting pieces of paper. Let's get rid of cash counters,
counterfeit currency detectors, cashiers at banks who take money to deposit
all day long. I assure you, that'll result in less wastage of resources.

>there’s already other currencies attempting proof of work without plugging in
a billion hair dryers around the world.

Take a different proof of work algorithm. The same thing will happen. People
will buy and build computers to do the same thing. The resource consumption is
a factor of the value of the coin, not the PoW algorithm. The power
consumption might vary a little depending on the exact algorithm, but the net
total of resource spent will be similar. Take some time to understand this.

There are better alternatives people are really trying to come up with. Proof
of Stake, Proof of Space, etc. But the thing is, no one is sure about their
validity. Ethereum has been talking about Proof of Stake for a _long_ time
now, but there still isn't a sure schedule.

This isn't great, but it is the best we have. If you have a better idea, I'm
all ears.

~~~
mitchellberry
AMD already building coin mining optimised gpu's, making the algorithm memory-
hard to exempt asic's doesn't really change much except the direction of
hardware manufacture

------
nikhil9865
Disgusting CNN, people loose their lives mining gold what happen to CNN
covering about Gold mining.

~~~
jeffwass
In a five second google query I found these two top results. Probably took
less time than you writing your post.

From CNN last month : [http://edition.cnn.com/2017/11/10/world/wonder-list-
bill-wei...](http://edition.cnn.com/2017/11/10/world/wonder-list-bill-weir-
peru-amazon-illegal-gold-mining/index.html)

Another six months ago : [http://edition.cnn.com/2017/06/12/africa/uganda-
mining-corru...](http://edition.cnn.com/2017/06/12/africa/uganda-mining-
corruption/index.html)

------
sandworm101
>> The fact that most bitcoin is mined in China is also fueling the
environmental concerns.

When identity politics and environmentalism ride in the same cart, the
whirlwind follows.

~~~
jrowley
From a strictly environmental perspective, mining in China in general is going
to be worse for the global environment than in the US due to restrictions on
pollution from energy generation in the states, at least for now.

~~~
CPLX
Are you sure about that? I thought one of the reasons a lot of this happens in
China is because they can locate in areas with very cheap surplus hydropower.

Also the idea that the US just automatically can be assumed to have cleaner
energy policy than China is archaic at this point. The world changes fast.

~~~
dmoy
China still burns a shit ton of nasty poorly regulated coal. The hydro (and in
the near future nuclear) doesn't cover the growing needs of 1.4b people.

Coal is literally like 3/4 of China's electric generation capacity. If Bitcoin
is taking up some of the hydro, the slack is gonna come from coal.

------
kcorbitt
> Bitcoin boom may be a disaster for the environment

Probably the most important implication of this undeniable truth is that it's
a ready-made justification for liberal governments to ban Bitcoin if it
becomes sufficiently disagreeable to them. (It's a great justification for
despotic governments as well, but they don't really need one -- one of the
perks of being despotic!)

EDIT: I meant "liberal" in the classical, pro-freedom sense (as opposed to
despotic), not trying to place governments on the liberal/conservative
spectrum of contemporary American politics. I thought that was clear from the
context.

~~~
castle-bravo
Why do you use the term liberal as opposed to something more general? I think
the descriptor 'tax-collecting' might capture some of the reasons why a
government might want to ban Bitcoin (if they could).

~~~
s0rce
Although it might be harder to tax, since regular banks are mandated to do a
lot of the reporting leg work for the tax collectors, is it really different
than taxing other commodities like gold. If we can admit its not really a
practical currency.

