
Bitcoin Energy Consumption Index - arcticbull
https://digiconomist.net/bitcoin-energy-consumption
======
lukev
The energy consumption of Bitcoin isn't new news. What continues to disappoint
me, however, is how many people immediately jump to its defense with arguments
based on the value it provides, as if that offset its cost.

What gets neglected is that the Bitcoin algorithm is _inherently wasteful_. By
its very design, it results in an insane amount of duplicated, pointless
computation.

The question isn't whether something like Bitcoin can provide any value. The
question is whether we have better options. And the answer is: we do, by far.
From proof-of-stake (like Ethereum is moving towards) or trust-based models
(like Stellar), technologies exist that grant almost all the benefits of
Bitcoin at tiny fraction of the environmental (and monetary!) cost.

I give Bitcoin credit for being an interesting "first answer" to an extremely
hard problem. But it is in no way something that we should be doubling down
on.

~~~
puranjay
I don't even know what problem Bitcoin is solving anymore. I haven't seen a
single website accepting Bitcoin as a payment in the last whole year.

~~~
btcd
Bitcoin's main function is store of value, with the additional benefit of
being relatively easy to transfer. It is basically a more convenient form a
gold.

After all these years of growth, Bitcoin's market cap becomes its own unique
edge. One simply cannot transfer significant amount, say tens of millions of
dollars, easily in any other crypto currency.

The cost of energy is minuscule compared to alternative means of achieving the
same: vaults, guards, banks, lawyers, etc.

~~~
xg15
So the purpose of Bitcoin is to give billionaires better tools to move their
wealth around while externalising the energy consumption and CO2 omissions to
all of us. Thanks a lot!

~~~
btcd
That is a side effect, not the purpose. Millionaires can use Bitcoins to move
their wealth too. I'd say even for a transaction of $1,000, it is often
cheaper to move in Bitcoins.

On the contrary: the purpose of private banks is almost exclusively for
billionaires to move their wealth around, while externalising costs to all of
us. Many financial market interventions in the past are the society bailing
out billionaires who bet irresponsibly and cannot bear reducing themselves to
millionaires.

~~~
arcticbull
> That is a side effect, not the purpose. Millionaires can use Bitcoins to
> move their wealth too. I'd say even for a transaction of $1,000, it is often
> cheaper to move in Bitcoins.

Compared to a free domestic ACH or wire?

Internationally you have to pay exchanges on the receiving end >1% fees to
convert it to something you can actually spend.

------
TheSpiceIsLife
I saw this a couple days ago when @arcticbull mentioned it here
[https://news.ycombinator.com/item?id=21256112](https://news.ycombinator.com/item?id=21256112)

Jaw dropping.

Converted to Telsa Model S miles as per
[https://en.m.wikipedia.org/wiki/Tesla_Model_S](https://en.m.wikipedia.org/wiki/Tesla_Model_S)

Comes out to about 2000 miles or 3200 kilometers for _one_ Bitcoin
transaction.

Astounding.

~~~
reportgunner
It does not really matter if it's 2 miles or 2 million miles per bitcoin
transaction.

You cannot stop bitcoin.

Edit: You would end up burning even more if you tried to stop it.

~~~
davidgerard
nah, there's approaches. I meet with politicians and suggest a carbon tax on
crypto exchange conversion to fiat - miners have to cash out, after all.

You have to tax the clean coins too, otherwise buyers will just exchange
dirtycoin for cleancoin before cashing out.

~~~
lifty
Why not tax or make all energy more expensive? That way all wasteful usage
will be curtailed and only the valuable use cases will be left after a while.
If we do what you proposed it sounds like we should start taxing other
behavior on the internet based on its usefulness to society and electricity
usage.

~~~
TeMPOraL
We definitely should tax all dirty energy, and the shifting price landscape
will do a lot to fix the environmental issues we're facing.

That said, it's not enough - because the market isn't some NP-complete-
problem-solving magic oracle. It's just a greedy optimization algorithm. It's
very prone to falling into bad local optima. We know that for a fact, that's
the basis of most regulations around markets. Left unattended, the market
would happily prioritize mining Bitcoin over producing food, as running
Bitcoins in circles is more profitable than selling grain - up until there's
an actual shortage of food and the market self-destructs.

~~~
reportgunner
Energy on it's own is not dirty or clean. You cannot test the wires in the
wall to say _yep, this energy is clean_.

You can of course tax the energy producers, but that does not prevent fraud on
it's own - see oil tankers converting gas pollutants to water and causing even
more harm.

~~~
TeMPOraL
> _Energy on it 's own is not dirty or clean. You cannot test the wires in the
> wall to say yep, this energy is clean._

Yes. "Clean/dirty energy" is a shorthand for clean/dirty energy _sources_.

> _You can of course tax the energy producers, but that does not prevent fraud
> on it 's own_

Sure. Taxing emissions is a necessary but not sufficient component of a sane
energy policy.

~~~
reportgunner
> _Yes. "Clean/dirty energy" is a shorthand for clean/dirty energy sources._

So how do you make sure you are not getting dirty energy ?

~~~
TheSpiceIsLife
What is the purpose of this questions?

You purchase electricity with _clean_ production guarantees.

That doesn't necessarily mean the electricity you use comes from that, or any,
_clean_ source, but that _clean_ sources are used to contribute to grid supply
equally.

If that's not actually happening then we can call that fraud, but that's a
separate issue.

Are you claiming you were not aware of this?

------
me551ah
The most powerful supercomputer in the world reaches 143 petaflops, bitcoin
network in comparison reaches 80704290.84 Petaflops. Granted that a majority
of this computing power is in the form of custom ASIC's, but the figure is
really staggering.

And all of the 80704290.84 Petaflops, consume 73.12 TWh to repeatedly
calculate SHA256 ! What could be the world's most powerful network does
absolutely nothing but crunch hashes billions of times to discard almost all
of the results anyway. Sheer waste of computing power.

~~~
mrb
It's incredible that people on HN, a technical readership, still don't
understand why the energetic or computational "waste" of proof-of-work is
needed.

There is simply no other known way of implementing a decentralized,
censorship-resistant, robust digital currency. Without PoW you lose one of
these properties.

Proof-of-stake doesn't work. It isn't robust. Eg. PoS cryptocurrencies can't
resolved which chain is correct after a network split. There are many other
unsolved problems. That's why Ethereum is years behind schedule in designing
and deploying PoS.

Replacing PoW with a useful algorithm (eg. protein folding) loses
decentralization (a central trusted authority must verify/sample who performs
the work correctly).

Trust-based systems (Stellar, Libra) lose censorship-resistance.

A "dumb" PoW is literally the only practical solution.

If the social benefits of a cryptocurrency are worth the computational power,
and if PoW is the only technical solution to implement it, then by definition
PoW isn't wasteful.

~~~
danmaz74
If the only way to have a decentralized, trustless, robust digital currency is
to waste an inordinate amount of energy and increase our global warming and
pollution problems, then we'll have to do without that kind of digital
currency. It's a matter of priorities.

~~~
mrb
" _inordinate amount of energy_ "

It's comparable to what a single hydro dam like the Three Gorges Dam can
produce. Don't fall prey to the scary comparisons BECI employs to mislead its
readers.

Global warming is critical, but there are other energy wasters much, much
bigger than Bitcoin miners.

Besides, as it's been said many times, miners tend to use renewables since
they have become cheaper than fossil fuel power plants. A recent paper by
Stoll et al. estimated CO2 emissions as being comparable to what a single city
like Las Vegas emits:
[https://mobile.twitter.com/zorinaq/status/113943906857019392...](https://mobile.twitter.com/zorinaq/status/1139439068570193921)

~~~
danmaz74
Right now the share of the world economy running on Bitcoin is negligible, yet
its energy consumption is relevant. If that share became consistent, the price
of Bitcoin would increase by many orders of magnitude, and mining bitcoin
would become more and more competitive in relation to other uses of energy,
and would increase in tune - that's why I say inordinate. PoW is just
unsustainable by design.

~~~
trickstra
Bitcoin's energy consumption is also by design self balancing - increase the
price of electricity, less electricity will be used. With the same benefits
for the network.

~~~
arcticbull
Not really, it's self-balancing with respect to the efficiency of the
technology around it. As tech gets better, Bitcoin gets worse to compensate.

------
zallarak
Clarifications (this website perpetuates some common misconceptions):

\- A single bitcoin "transaction" can actually have thousands of inputs and
thousands of outputs. So energy "per transaction" or "transactions per second"
is not analogous to a typical monetary transaction.

\- Bitcoin does not compete with literal credit card transactions (although
some use it like that today). I'd compare Bitcoin on-chain transactions with
how nation-states settle their central-bank ledgers with gold. Gold is the
best comparison to Bitcoin because trading in hard gold is "final". Credit
card transactions happen on a higher level in the financial stack. As does
cash. As do bank transfers. All of these bubble down into interbank transfers
that eventually settle on the base layer of central banks. So compared to
shipping and securing gold, Bitcoin is quite cheap!

\- Adding to the above point; if Bitcoin succeeds in beind "adopted", it would
not mean we no longer use credit cards. Credit cards would just port their
underlying mechanism on top of Bitcoin instead of fiat moneys.

~~~
nrp
The linked website attempts to quantify the impact with some stated
assumptions. You’ve stated some alternative assumptions, but haven’t
quantified the conclusions to determine if they hold.

I’ve been long on Bitcoin, but I am exiting my position over concerns about
the environment impact. I don’t think it’s plausible that a proof-of-work
based blockchain can be anywhere near as efficient as centralized ledgers are.
If any of the proof-of-stake based solutions ever gain traction, maybe I’ll
participate in those.

~~~
Erlich_Bachman
> can be anywhere near as efficient as centralized ledgers are

Yeah, no one ever claimed that they would be more efficient. If you have
invested assuming the efficiency is the main goal, you have been misled. What
they do provide is efficient _decentralized_ ledgers, which is a whole other
game completely.

------
grapehut
Per transaction is intentionally a bit misleading, as the amount of power
usage is proportional to how-much-power the block-reward can buy regardless of
there being 1 or 1 million transactions.

Not to mention, a single transaction can power an infinite amount of (wash)
transactions thanks to 2nd layer stuff like the lightning network. So it'd be
similarly misleading to try quote in terms of that.

So the correct unit would be power usage, per block or time unit.

~~~
baroffoos
The bitcoin network has a limited number of transactions per second that it
can process (Limited by block size). Last time I checked the network was
basically at the limit so per transaction is not an insane way of looking at
it.

I get what you mean, if you decide not to make a transaction, the energy still
gets spent but the more you use bitcoin the more valuable it becomes which
incentivizes miners to keep mining. Also someone elses transaction will just
slot in to fill the gap left since there is a very limited amount of space for
transactions which is always fully utilized.

~~~
jimmydorry
Not exactly. Second layer transactions sit on top, so the hard max of 4200
"settlements"[1] in a block does not necessarily mean 4200 transactions.

With enough people using the second layer network, each "settlement" could
mean finalising hundreds of transactions for thousands of people. This second
layer network acts like a caching layer, and consolidates many transactions
into a single transaction (put into very simple terms).

[1] Combinations of inputs and outputs.

~~~
zaarn
Ah, so how many percent of the network are currently using this second layer?
If it sounds so good, everyone must be using it already!

------
jeremyw
The contrarian take on Bitcoin and carbon is that Bitcoin chases the cheapest
energy, and solar is quickly becoming the cheapest source. In some areas of
the world it already is (various subsidized infra in China).

See Ramez Naam (co-chair for energy and the environment at Singularity
University) for more on this friendliness to proof-of-work. This is a good
intro:
[https://www.preposterousuniverse.com/podcast/2019/09/16/64-r...](https://www.preposterousuniverse.com/podcast/2019/09/16/64-ramez-
naam-on-renewable-energy-and-an-optimistic-future/)

~~~
Geee
That's correct. Bitcoin actually accelerates the adoption of renewables
because it provides an instant economic incentive to build e.g. solar in
places where electricity demand doesn't provide high return on the investment.

------
eindiran
The way the model works is very interesting:

1\. Calculate total mining revenues, across all miners in the Bitcoin network.

2\. Estimate that, on average, miners spend 60% of their revenues on
electricity. (I believe the origin of this number are the calculations in this
paper [0]).

3\. Find out how much miners pay per kWh on average.

4\. Convert the costs into a consumption.

There is some discussion of the origin of the assumptions, and some criticism
and validation here [1] and here [2] respectively.

[0]
[https://www.cell.com/joule/fulltext/S2542-4351(18)30177-6](https://www.cell.com/joule/fulltext/S2542-4351\(18\)30177-6)

Specifically, see the calculations using Antminer S9 in Table 2.

[1] [https://digiconomist.net/bitcoin-energy-
consumption#assumpti...](https://digiconomist.net/bitcoin-energy-
consumption#assumptions)

[2] [https://digiconomist.net/bitcoin-energy-
consumption#validati...](https://digiconomist.net/bitcoin-energy-
consumption#validation)

------
paulsutter
The Bitcoin network has a fixed transaction capacity that has no relation to
the amount of power expended to mine bitcoin.

The amount of power used is proportional to the value of the reward for
successfully mining a new block, which happens about every 10 minutes (12.5
BTC or about $100k).

If the value of BTC goes up miners will increase their spend and more power
will be consumed per block mined, and if the value goes down so to will the
power used.

Regardless of the power used for mining, there is a fixed transaction capacity
in the network.

~~~
spookthesunset
Power used can also be a function of energy costs. It costs go down by half,
miners will be incentivized to increase mining capacity (else their
competition will) and as a result presumably energy consumption will double.

------
y3k
One of the main reasons why I dropped BTC.

"Getting rich" at cost of the environment (extremely high resource
consumption)? No thanks, I'd rather leave that world for future generations.

~~~
cwkoss
I think the traditional stock market has significantly greater environmental
externalities, even proportionally to net value.

Greed creates waste in all venues.

~~~
aaron_m04
I think you're comparing apples and oranges here.

We're talking about just keeping track of who owns what amounts of a
commodity. That part is using terawatt hours per year! I am very doubtful that
the "keeping track of who owns what amounts" part of the stock market is
anywhere near that.

~~~
cwkoss
One fairly-big sql database could do that.

Determining who has the rights to make changes to what data, auditing changes,
auditing ever-changing access control rights, systematically changing these
rules to adapt to technological advancements, etc. is the function which
Bitcoin accomplishes that you are discounting from your perceived cost of the
traditional stock market.

------
Reason077
To put this in perspective, Bitcoin's 73.12 TWh annual energy consumption is
enough to power over 10 million electric cars each driving 100 km (61 miles)
daily, every day of the year.

------
rlt
This is obviously a problem if you expect small or even medium-sized
transactions to be recorded on the blockchain itself.

It's less obviously a problem if the blockchain is able to function as a
"trust anchor" for additional protocol "layers", e.x. Lightning Network.

TBD whether that actually works in practice at scale, but I believe it's
Bitcoin's only hope.

------
lucisferre
This seems completely outrageous to me. I had seen similar numbers thrown
around casually in the past but still found it hard to believe to be true,
(despite being pretty bearish on Bitcoin myself). This seems to provide some
pretty detailed evidence, analysis and validation directly addressing
criticisms. It seems pretty thorough.

Is there any more to discuss on the topic of Bitcoin being outrageously
wasteful? Or is this pretty much the final word?

Is Bitcoin figuratively, and almost literally, a tire fire?

~~~
aeternum
Wasteful compared to what though? How much energy, human capital, and
resources are consumed by the banking industry?

If (and big if) bitcoin is able to replace a significant fraction of the
banking industry it will be extremely efficient in comparison. Per-transaction
measures isn't the right metric since the Bitcoin blockchain can still be
successful as a reconciliation backbone without being used for small everyday
purchases.

~~~
dragontamer
> Wasteful compared to what though? How much energy, human capital, and
> resources are consumed by the banking industry?

The article actually answers this to some degree. See the following graphic:
[https://i.imgur.com/8TdKevG.png](https://i.imgur.com/8TdKevG.png)

~~~
WillPostForFood
How much energy to mine an ounce of gold?

~~~
jcranmer
Since gold bullion isn't legal currency anywhere, I'm not sure it's the most
relevant comparison.

From the US Mint's financial statement [1]:

2017 cost $13.5 million dollars in "Communications, utilities, and misc
charges", which presumably is the bucket that electricity bills falls under.
There's no breakdown of overhead between currency coinage production and
bullion/numismatic production, but the manufacturing obligation suggests that
currency is roughly ⅕ of their total costs, which suggests that we might
ascribe about $3 million in utility cost to produce coinage. The coins
themselves were worth about $870 million, which suggests about 250 kJ (or 0.07
kWh) per $1 of coinage if we assume the Mint pays $0.05/kWh. I'm not including
the energy cost of metal production itself, because I don't want to spend the
time to track down that information.

[1] [https://www.treasury.gov/about/budget-
performance/CJ19/23.%2...](https://www.treasury.gov/about/budget-
performance/CJ19/23.%20US%20Mint%20FY%202019%20CJ.pdf)

~~~
Erlich_Bachman
> Since gold bullion isn't legal currency anywhere

Neither is Bitcoin, so it should be a perfectly valid comparison?

------
floatingatoll
A footnote says:

> The assumptions underlying this energy consumption estimate can be found
> here [1]. Criticism and potential validation of the estimate is discussed
> here [2].

[1] [https://digiconomist.net/bitcoin-energy-
consumption#assumpti...](https://digiconomist.net/bitcoin-energy-
consumption#assumptions)

[2] [https://digiconomist.net/bitcoin-energy-
consumption#validati...](https://digiconomist.net/bitcoin-energy-
consumption#validation)

~~~
Analemma_
FWIW, [2] doesn't seem to offer substantive criticism at all. It mentions a
couple independent verifications of the numbers in [1], with one complaint
(from a very biased party) whose claims are not sourced.

This pretty much lines up with what I've seen in all Bitcoin energy use
debaters: the evangelists insist the numbers are all wrong, but never really
provide any evidence to that point.

------
fitzroy
New Dark Forest theory: The universe is teeming with alien civilizations that
have survived The Great Filter ...but they all built Dyson spheres around
their respective stars to harness the maximum amount of energy for mining
cryptocurrency.

Now they pass the time counting their money until their stars burn out.

------
qwerty456127
If only governments and corporations did not insist on limiting people's
freedom to trade freely and anonymously we wouldn't need that. Just make
trading and privacy fundamental human rights like air breathing is and huge
amount of energy will be saved.

~~~
iikoolpp
Didn't realise cash was suddenly outlawed

~~~
DethNinja
Don’t worry it won’t be suddenly outlawed but all the governments will
gradually outlaw it as it directly threatens their power. I hope somebody
manages to release a conscious AI before they manage to completely outlaw it,
otherwise it will be very hard to fight against tyrannical governments.

~~~
cwkoss
India suddenly demonetized a large portion of circulating cash without
warning.

[https://www.theguardian.com/world/2016/nov/08/india-
withdraw...](https://www.theguardian.com/world/2016/nov/08/india-
withdraws-500-1000-rupee-notes-fight-corruption)

------
pembrook
>" _Single transaction footprint: Equivalent to the carbon footprint of
742,348 VISA transactions_ "

One thing is clear, no matter how far blockchain technology progresses, proof-
of-work will never reach the efficiency of a trusted intermediary.

------
spyder
Iceland using more electricity for bitcoin mining than for its households is
interesting, but at least it's a greener energy:

[https://qz.com/1204840/iceland-will-use-more-electricity-
min...](https://qz.com/1204840/iceland-will-use-more-electricity-mining-
bitcoins-than-powering-homes/)

but reopening closed coal power plants for crypto mining is more worrying:

[https://qz.com/1250980/an-australian-coal-power-plant-
will-r...](https://qz.com/1250980/an-australian-coal-power-plant-will-reopen-
to-help-mine-bitcoins/)

------
sword_smith
This does not seem to include transactions on the Bitcoin Lightning network
which are transaction that are handled offchain so they are not included in
blocks. I don't have the exact number of lightning transaction ocurring but it
is the Bitcoin Core developers' plan that the scaling to thousand of
transactions per second will and should take place on the lightning network
(this is where they differ from their competitor Bitcoin Cash which is aiming
for bigger blocks and onchain scaling). Bitcoin is still a technology in its
infancy ten years after being started.

~~~
spookthesunset
> Bitcoin is still a technology in its infancy ten years after being started.

Meanwhile Apple introduced the first version of the iPhone, completely
transforming the mobile landscape.

Meanwhile, Uber and lyft upended the taxi market completely.

Meanwhile, we have private companies sending payloads to the space station

Meanwhile, electric cars are increasingly becoming mainstream.

In what possible way can you claim bitcoin is “in its infancy”?

~~~
sword_smith
The market cap of Bitcoin is above 120bn USD, less than Apple and Facebook but
more than Netflix. But that is still only about 0.1 to 1 % of its potential.
So, big but in its infancy.

~~~
jacobush
Besides it being completely different in other ways, the market cap is not
value. You couldn't realize a tiny fraction of that without tanking the market
cap.

~~~
sword_smith
The opposite also applies: You couldn't buy up a large proportion of Bitcoins
without the price skyrocketing. Prices are determined at the margin, what the
marginal seller (probably miners) will sell for and what the marginal buyer
will buy for. They are the best measure of "fair value".

------
desc
Bitcoin is another wonderful example of trying to solve a people problem with
technology.

A complete and utter waste of resources, which at best fills a gap while the
actual problem remains unsolved.

------
btcd
Although interesting in its own right, Bitcoin's energy consumption is in no
way a good basis on which to judge its social value.

Bitcoin is fundamentally an asset. A useful analogy is to think of it as gold.
Gold can be used to make payments, but it is not convenient. Same goes for
Bitcoin. But they are both useful as a robust way of storing value.

Maintaining the Bitcoin network costs energy, but almost nothing else. Given
Bitcoin's price history, it's safe to assume that Bitcoin's total energy cost
is a tiny fraction of its current market cap of around $150b. Now compare that
to the social costs of protecting gold, which probably has an over $7 trillion
market cap. Wars were fought and lives lost for its ownership.

In conclusion: a large and liquid crypto asset like Bitcoin provides a much
more advanced solution of value storage and transfer than traditional physical
assets. Its net social benefits should be orders of magnitudes higher than its
energy expenditure.

------
labster
Bitcoin is an ongoing environmental disaster, profiting off of subsidized coal
power in China and elsewhere in the world. Millions of people die every year
from air pollution.

But on the other side, hey blockchains are so cool they can do the same work
as banks but six orders of magnitude less efficiently.

~~~
ISL
By that measure, the problem is the pricing of energy, not Bitcoin.

~~~
spookthesunset
Doesn’t work that way. Bitcoin’s block reward system is designed so that the
systems energy consumption costs are basically some percentage of the price of
bitcoin. The higher the price, the more energy used. Drop the price of energy,
and all rational miners will just buy more hardware. Why? If they don’t, their
competitors will and the odds of them getting block rewards will go down.

~~~
ISL
I'm arguing the opposite -- if energy cost more, less energy would be consumed
by Bitcoin.

------
privateSFacct
Or $68/transaction supposedly if electricity cost at 11 cents per KwH is used.
Actual transaction fees run around $0.20 for on-chain which implies either
math is wrong or per block reward is sufficient still (total blocks I believe
are fixed with increasing difficulty).

Does this analysis take into account secondary network transactions? For
example wire transfers are relatively expensive to process still, but are
often used to settle huge volumes of things like ACH payments, nightly sweeps
etc.

~~~
arcticbull
Transaction costs are currently being socialized across all holders. The block
reward is sold to pay the power bill creating downward pressure on price for
everyone.

------
reaperducer
I wonder how that compares to mining various precious metals.

------
kbody
Quite arguable numbers that seem to be used to drive traffic to this site
rather than do a proper scientific report like done by the University of
Cambridge [https://cbeci.org/](https://cbeci.org/)

The CO2 emissions heavily depend on the actual use of renewable which nobody
can be sure about. In some cases like bitcoin mining using fuel that would
otherwise cause CO2 emissions, you actual have a net gain. (See companies like
[https://www.upstreamdata.ca/](https://www.upstreamdata.ca/))

So even by those arguable arguable CO2 emissions it's actually less than 0.1%
of the world's total.

I wish people that have knee-jerk reactions about this, actual think about the
big picture and what actually causes high CO2 emissions and offer way fewer
benefits than censorship-resistant money.

The luxury fashion industry for example for a long time has had a big negative
effect, from drying up whole lakes, to child labor to effectively destroying
villages for what... anyhow.

------
heimatau
The idea that bitcoin is 'wasteful' is entirely missing the solution that
bitcoin is. Byzantine Generals Problem.

This network is unmatched in it's provability and security.

There is a turing complete machine, operating that _can_ be trusted.
Seriously, the possibilities are limitless but guess what, they do have a
cost. And there are too many con-artists around. But an industry that is
changing the entire monetary policy around world is very impactful. It's
changing it and you'll notice in the coming years how much monetary policy is
going to change. The grand experiment is about to happen. Are we going back to
gold? Are we going to innovate a replacement that's better than crypto? How is
'money' going to function in the 21st century?

P.S. Proof of Stake is terrible in it's economics. If you think rent-seeking
is good, then PoS is for you. It's not for me and I think it's terrible based
on the game theory of it. Remember the 'We are the 99%' chants? Yeah, not
going to go over well.

~~~
Kbelicius
If PoS is rent-seeking how come PoW isn't rent-seeking?

~~~
heimatau
In a PoW network (read Bitcoin), those that have the currency
(satoshis/'sats') don't gain any more sats by just possessing them. The only
way to gain more is from either those that have some or to mine more (until
2140).

In a PoS network, those that have the currency can "stake" their possessions
to gain more. They don't need to spend in hardware/electricity to mine more.
There is a built in function to extract currency.

------
daniel_ameli
One bitcoin transaction is not directly comparable to one transaction on other
payment systems. One bitcoin transaction can represent thousands or millions
of transactions. It isn't fair to say bitcoin requires this amount of
electricity. Different people all over the world choose to spend electricity
to try to find new bitcoin. The amount of new bitcoin is exponentially
decaying to zero. It's like telling someone their gold jewelry uses up too
much electricity because someone they don't know is spending electricity to
mine gold. Some amount of mining is necessary for the security of the network.
Most global endeavors use electricity, whether it is traditional finance or
video games. Bitcoin mining believed to be one of the greenest industries (a
very high percent of electricity comes from solar, wind, and hydrolelectric).
This is due to some of the cheapest electricity in the world being from green
energy in remote places (and bitcoin mining is extremely portable)

------
RcouF1uZ4gsC
To put this somewhat in perspective, we can look at Wh/$

From the article, Bitcoin used 73.12 * 10^12 Wh and generated $5,749,979,074
in mining revenue

Googling shows that the US economy used 3.82 * 10^15 Wh and generated $ 19.39
* 10^12 in GDP

So bitcoin uses 12,716 Wh of electricity for every $ of revenue, and the US
economy uses 197 Wh of electricity for every $ of GDP.

------
jron
Some counter points to consider:
[https://www.youtube.com/watch?v=uvFqEofdAZ0](https://www.youtube.com/watch?v=uvFqEofdAZ0)

More nuanced:
[https://www.youtube.com/watch?v=iTelx_iGajE](https://www.youtube.com/watch?v=iTelx_iGajE)

------
RichardHeart
I developed something that can help reduce some of these problems. The energy
used to mine a resource trends towards the value of the resource. The resource
in cryptocurrencies is the block reward + fees. One can reduces pollution by
paying miners only transaction fees and not inflation. One further increase
savings by utilizing an existing network, and employing time locks. More
hashrate is not what matters most. Hashrate from honest, non cooperative
parties is what makes the system censorship and collusion resistant. It's
interesting to note that the people you "defend" yourself against in sha256
hashing are only the very same people you're paying, as only they have
equipment relevant to attacking. On GPU and CPU mined algos, hash rate matters
more as a larger set of humans can become attackers.

------
danfo
Shut it down.

Can a couple of these people agree that a well-coordinated merge & release to
sabotage proof of work is ethical.

[https://github.com/orgs/bitcoin/people](https://github.com/orgs/bitcoin/people)

~~~
kinghajj
Even if you got a maintainer to commit and release code to disable PoW, you'd
still have to get enough node operators to update, which... I doubt would
happen.

~~~
danfo
You may not be able to be so forthcoming about the transition

~~~
cwkoss
You greatly underestimate the resiliency of the Bitcoin network.

------
hndamien
Bitcoin appears to be highlighting the issue of how we price dirty energy vs
clean energy. There is nothing Bitcoin miners would like more than for all
energy have the correlated carbon tax associated with it in the price.

------
hexo
I don't think this makes even sense to account. Try to look at internets
energy consumption as a whole and how much of it "makes" sense and provides
real value - tranferring memes, DDoSes, ADs and so. Look at all animated
websites - how needed is this "feature", what value it provides (usability?
haha) and how much total energy it consumes in sum across all devices. I
really "love" that Belgium uses city night lights on their highways - this is
total nonsense. Compared to these, Bitcoin energy consumption makes complete
sense.

------
mcnichol
Do your research on the guy who writes these articles.

Alex de Vries (blockchain hobbyist with no scientific / economics background
who started digiconomist)

[https://hackernoon.com/the-reports-of-bitcoin-
environmental-...](https://hackernoon.com/the-reports-of-bitcoin-
environmental-damage-are-garbage-5a93d32c2d7)

Oh yeah, and he invented this energy consumption index...stop letting yourself
get trolled.

------
celticninja
Personally I prefer to use the CBECI

[https://www.cbeci.org/](https://www.cbeci.org/)

------
zornado
Bitcoin is good for the economy because it encourages spending. It's better
than having a electricity as a resource and not using it. Miners buy equipment
which is income to the producer. Also increases employment in the power plant
and the factory producing the equipment.

------
exabrial
One transaction of bitcoin:

> Equivalent to the power consumption of an average U.S. household over 21.13
> days.

------
DanielleMolloy
Can someone tell me whether this is ever going to change? When the last
bitcoin is mined?

~~~
Rebelgecko
Not even then, and that won't be for a while. Even though about 85% of all BTC
have been mined, the process gets exponentially slower the closer you get to
the final blocks.

After the last BTC is mined, miners will still presumably be able to profit
from block transaction fees. That might help power a little bit since they'll
worry more about being efficient with which transactions go into a block.

------
AtlasBarfed
Cannot the bitcoin developers put in a massive difficulty jump at this point?
Just make mining useless.

It won't solve the transaction cost, but I thought sharding was supposed to
help that, although I never bothered to learn about lightning network.

~~~
tgsovlerkhgsel
> Just make mining useless.

This would make Bitcoin useless.

> Cannot the bitcoin developers put in a massive difficulty jump at this
> point?

No, because the miners will continue to run the useful version (for some
definition of useful). Changing the algorithm would require a hard-fork and a
hard-fork to turn down the network will result in the "new" branch of the fork
... turning down, while the old one continues.

~~~
AtlasBarfed
Why would people no longer mining make bitcoin useless? There's a supply of
existing bitcoins that can be split to ludicrous degrees. Scarcity is already
enforced by the difficulty, and a huge difficulty jump won't affect that.

If bitcoin can't survive without mining (which IIRC isn't related to
transactional processing or any actual use of bitcoins), then bitcoin has a
guaranteed uselessness point when the difficulty jumps exceed, I dunno, the
output of the sun?

As for code changes, what is the lightning network about? Isn't that a code
change? And if every major exchange enforced the switch, and miners kept
mining coins that the exchanges didn't take, then those coins would be worth
much less.

I'm not saying the code change is easily done or even technically feasible.
But it should be considered.

Bitcoin is immoral in the age of human global warming.

~~~
tgsovlerkhgsel
> Why would people no longer mining make bitcoin useless?

Because mining is what secures the network.

> which IIRC isn't related to transactional processing

Transactions are confirmed by being included in mined blocks. The amount of
compute power burned to mine that block, and the following blocks, is what
prevents someone from pretending a different transaction (moving the money
somewhere else - a double-spend) happened first.

> what is the lightning network about? Isn't that a code change?

Software running on top of the existing mining network, although downwards-
compatible changes were made to enable it. The downwards-compatible is key
here.

> if every major exchange enforced the switch, and miners kept mining coins
> that the exchanges didn't take,

Then someone would make an exchange that still trades "original Bitcoin" and
get rich, and the exchanges would go bankrupt.

More sensible and less controversial changes failed or resulted in splits
(with the chain that remained downwards compatible being the most valuable
one).

(Downwards compatible is the easiest approximation I can come up with for the
much more complicated reality.)

~~~
AtlasBarfed
I did not know mining was performing blockchain transactional comps. I thought
it was a scarcity mechanism.

Thus BTC is a bankrupt idea, since it assumes geometric growth in
energy/computation. Time to sell!

------
Empact
It makes no sense to me to put Bitcoin under different scrutiny than, say,
Christmas lights, Netflix or the US Military. We need to decarbonize our
energy sources, but Bitcoin or not is not the answer to how.

[https://bitcoinist.com/bitcoin-mining-energy-consumption-
us-...](https://bitcoinist.com/bitcoin-mining-energy-consumption-us-christmas-
lights/) [https://www.thesun.co.uk/tech/9062282/netflix-energy-
crisis-...](https://www.thesun.co.uk/tech/9062282/netflix-energy-crisis-
fears/) [http://theconversation.com/us-military-is-a-bigger-
polluter-...](http://theconversation.com/us-military-is-a-bigger-polluter-
than-as-many-as-140-countries-shrinking-this-war-machine-is-a-must-119269)

------
myroon5
Unrelated to the content itself, I like the inclusion and format of the
Recommended Reading section, especially "If you find an article missing from
this list please report it here, and it will be added as soon as possible."

------
exabrial
For anyone that wants to promote a free-market cryptocurrency ecosystem, my
suggestion is to look at the Stellar Foundation. Doesn't fill the earth with
C02, and enables trades across borders

~~~
aey
[https://arxiv.org/pdf/1904.13302.pdf](https://arxiv.org/pdf/1904.13302.pdf)

only 2 nodes away from failing :)

------
tgsovlerkhgsel
Are the smooth raises and flat lines in the estimated values explained
somewhere? Seems highly questionable if the hash rate is fluctuating.

------
H8crilA
How much would an average BTC transaction cost with proper carbon emissions
pricing? Carbon emissions are already priced in Europe.

------
DonHopkins
Bitcoin is China's way of exporting subsidized coal via the atmosphere.

[https://www.buybitcoinworldwide.com/mining/china/#reason-2-e...](https://www.buybitcoinworldwide.com/mining/china/#reason-2-excess-
coal)

Reason #2: Excess Coal

Coal is the cheapest power source but also the dirtiest. It’s well-known that
China has comparatively lax environmental policies. Major cities like Beijing
are notorious for their high levels of smog, produced mostly by burning coal.

Energy producers can freely burn coal and use the energy for Bitcoin mining.
Instead of physically transporting the coal, it’s easier and more cost-
effective to establish a Bitcoin mining operation near a source of coal and
convert carbon directly to crypto.

#Bitcoin enables Chinese entrepreneurs to export coal by burning it and using
the energy to mine.

[https://twitter.com/el33th4xor/status/623178828727361536](https://twitter.com/el33th4xor/status/623178828727361536)

#Bitcoin enables Chinese entrepreneurs to export coal by burning it and using
the energy to mine.

— Emin Gün Sirer (@el33th4xor) July 20, 2015

FTA:

Carbon footprint

Bitcoin’s biggest problem is perhaps not even its massive energy consumption,
but the fact most mining facilties in Bitcoin’s network are located in regions
(primarily in China) that rely heavily on coal-based power (either directly or
for the purpose of load balancing). To put it simply: “coal is fueling
Bitcoin” (Stoll, 2019).

[https://www.wired.com/story/bitcoins-climate-impact-
global-c...](https://www.wired.com/story/bitcoins-climate-impact-global-cures-
local/)

Bitcoin's Climate Impact Is Global. The Cures Are Local. To measure bitcoin's
contribution to global warming, you need to know where it is mined and where
those computers get their electricity.

...

Not so fast, said county officials. They pointed to a different culprit: a
giant coal plant halfway across the state. If energy from the dam went to
bitcoin mining, they said, the county as a whole would wind up using more
coal. In April, officials required all future mines to build their own
renewable power.

Missoula County was on the right track, says Christian Stoll, an energy
researcher at the Technical University of Munich. In a paper published
Wednesday in the journal Joule, his team takes a closer look at the energy
consumption of bitcoin mining, based on where miners are located and the types
of machines they are using. “Coal is fueling Bitcoin,” he says. “The question
is how to prevent it, and that’s up to local regulators.”

~~~
lone_haxx0r
> convert carbon directly to crypto

That's the coolest phrase I've read today. What would someone from before
Bitcoin think about that?

~~~
DonHopkins
Superman can convert coal directly to diamonds, but their value is artificial
too.

------
MichaelMoser123
I read that some miners operate right next to hydro electric stations where
electricity comes cheap, that would mean they are using excess energy that
would have been lost in transit?

[https://news.bitcoin.com/how-big-hydro-power-partners-
with-b...](https://news.bitcoin.com/how-big-hydro-power-partners-with-bitcoin-
miners-to-prevent-energy-waste/)

------
gleglegle
One could drive an electric car for nearly 2000 miles with that much energy.

------
kneel
small price to pay to put the vampire squids out of business

------
ctdonath
Define “transaction”.

------
cortic
>energy consumption of VISA offices isn’t included

------
your-nanny
if true Bitcoin needs to die, and eventually will under its own weight.

~~~
cwkoss
The traditional financial system is the root cause a significantly greater
amount of pollution.

------
bmking
A little late to the party, but here are my two cents.

First of all I also want to mention "Cambridge Bitcoin Electricity Consumption
Index" ([https://www.cbeci.org](https://www.cbeci.org)). In my opinion it
makes better comparisons
([https://www.cbeci.org/comparisons/](https://www.cbeci.org/comparisons/)).

The strongest hypothetical argument against the consumption is that Bitcoin
incentivizes _green_ energy. The mining operation is mostly interested in one
thing: access to the cheapest electricity possible. Currently China is still
subsidizing electricity, which has attracted a lot of Chinese miners and
apparently is tolerated by the state.

But in the longer run I believe that Bitcoin will be the thing that will allow
investments into green energy on a big scale. This is currently only happening
by e.g. governments guaranteeing a minimum electricity price with other
horrible consequences (see Germany:
[https://translate.google.com/translate?sl=auto&tl=en&u=https...](https://translate.google.com/translate?sl=auto&tl=en&u=https%3A%2F%2Fwww.focus.de%2Fimmobilien%2Fenergiesparen%2Fregenerative_energie%2Fnegative-
strompreise-deutschland-verschenkt-tausende-euro-ans-ausland-die-rechnung-
zahlt-der-verbraucher_id_8309486.html)).

Bitcoin however provides the incentive by itself to invest into green energy.
This also is regardless of the fact that where there are optimal conditions
for green energy often no infrastructure is available to add it to the grid.
Bitcoin only needs an internet connection and consumes energy on-site.

Regarding arguments that compare transactions with energy spent (comparing
apples-to-banana...), I will make a counter-comparison: "The amount of
electricity consumed every year by _always-on but inactive home devices in the
USA_ alone" spends three times the energy of the Bitcoin network (see "Fun
Facts" at
[https://www.cbeci.org/comparison](https://www.cbeci.org/comparison)).

Comparing the energy consumption of a transaction is meaningless, because this
transaction may enable thousands of off-chain transactions (see Lightning
network) and vary in actually block-spent-size depending on if it aggregates
many actual transactions or not. It also shouldn't be a surprise that a lot of
energy went into it in the first place, since otherwise the whole point of
Bitcoin, namely being open, borderless, censorship-resistant and neutral,
wouldn't be possible.

It's like saying that all the many maintenance checks of airplanes
([https://en.wikipedia.org/wiki/Aircraft_maintenance_checks](https://en.wikipedia.org/wiki/Aircraft_maintenance_checks))
wastes so and so many hours and energy of engineers' work-time, just because
you don't _see_ that they make air travel safer.

------
cryptica
It's disturbing that people are still praising Bitcoin in spite of that fact
that it can only handle at most 4 transactions per second and consumes as much
energy as Austria.

Same goes for Ethereum at 15 TPS... Ethereum is an over-engineered mess of
technical debt. It's been stretched way past its original design goals.

All these valuable cryptocurrencies are a symptom of a failing capitalist
system. The only reason that they had value in the first place was because the
rest of the economy was so inefficient and speculative that they started to
look like a wise investment in comparison (especially as a hedge).

The rise of useless jobs is real, this is especially true in the
cryptocurrency industry. The amount of human effort and talent which has been
wasted on Bitcoin, Ethereum and other overhyped, poorly engineered
cryptocurrencies is staggering.

Not only is it wasteful, but this industry is producing a new wave of
engineers and scientists who are gullible (hype-driven), unskilled and
complacent; a dangerous combination.

Most cryptocurrency projects were created by juniors who had limited
understanding of distributed systems and scalability at the time. If Vitalik
Buterin had to start Ethereum from scratch today (knowing what he knows now),
I think he would design it very differently. But instead, he is forced to
support the existing network and protocol even though the only real way to fix
the project is by starting from scratch with a new foundation.

It's like if you start building a 1-storey apartment and after you finish, you
realize that you actually needed a skyscraper; but instead of starting again
from scratch, you decide to re-use the existing building foundation with the
same investors, same architects, same engineers, same builders. You even allow
the existing tenants continue to live inside the house while you continue
building on top. It's probably not going to work because you don't have the
right foundation, your team doesn't have experience building tall structures
and you don't have any experience leading projects of such complexity - The
fact is that your odds of success are extremely low; your foundation is
probably not strong enough, your team is probably not smart enough and not
adaptable enough and you, the leader, are probably not humble enough to accept
reality; so you will fail to take the necessary steps to fix the problems.

------
dnprock
Bitcoin has grown a complex mining ecosystem that is pretty difficult to
understand. Bitcoin has high level of energy consumption because of its
demand. If demand goes down, energy consumption will go down. From what I've
seen in the market, Bitcoin works the best.

Many coins attempt to tweak this Proof of Work model. The result is not wasted
energy but wasted human effort. What we need is to go back and explore Bitcoin
Proof of Work model. It's works and simplest to configure.

I create Bitflate, a Bitcoin fork with constant inflation. I get to see a
small-scale, simpler version of Bitcoin energy consumption. Currently, it
costs me about $3/day to mine coins and verify transactions. I get about 12-14
TH/s. That is cheap for running a digital ledger system. It's cheaper than
renting any server on AWS. I imagine, in the future, businesses can run
private permissioned digital ledger system to verify their own transactions. A
Proof of Work system like Bitcoin is not wasteful.

------
steve19
It says a single transaction generates almost 300kg of CO2. Surely not. 95g of
e-waste also seems incredible. And 600 kwh of energy per transaction? Really.

Edit: based on a cost of electricity at $0.1/kwh, and assuming bitcoin
operators break even and are rational, one transaction costs less than 3kw of
energy:

[https://bitcoinfees.info](https://bitcoinfees.info)

If it cost 600kwh, we would assume a transaction would cost at least $60.

Electricity is probably a lot cheaper in China. If it was half as much we
would be looking at under 6kwh of electricity at the most.

~~~
cjbprime
They're missing that the reward has fallen below the cost of non-renewable
energy, such that the only profitable way to mine Bitcoin now is with
renewables. The only way to profitably mine Bitcoin with any country's
electric grid would be if someone else is paying the electric bill for you.

> Electricity is probably a lot cheaper in China.

Specifically, miners in China are famous for colocating with overprovisioned
excess hydroelectric power that is not transportable elsewhere via the grid.

~~~
jron
Easy to miss the point that the power would be lost if it wasn't used.

