
New study quantifies Bitcoin’s ludicrous energy consumption - fabian2k
https://arstechnica.com/tech-policy/2018/05/new-study-quantifies-bitcoins-ludicrous-energy-consumption
======
mrb
I provided this statement to some journalists who contacted me to get another
viewpoint on Alex de Vries's paper:

His findings are not completely accurate, but also not completely wrong
either. My own formal well-documented estimate is that Bitcoin used 0.09% of
the world's electricity as of January 11th, 2018
([http://blog.zorinaq.com/bitcoin-electricity-
consumption/](http://blog.zorinaq.com/bitcoin-electricity-consumption/)).
After 4 months of growth I estimate we are around 0.15-0.20% today. Therefore
reaching 0.50% by the end of 2018 is plausible; not likely but plausible. That
said, overall I think Alex de Vries's figures are rather inflated because he
makes two errors. Firstly, his model assumes that manufacturers sell at cost
and make zero profits, which allows miners to spend more on electricity. In
reality we've seen Bitmain, the largest manufacturer, make billions of dollars
over the last few years. No one expects them to make zero profits by the end
of 2018. Secondly, de Vries makes the mistake of assuming that all
cryptocurrency mining chips produced by TSMC on behalf of Bitmain end up in
Bitcoin mining machines. In reality many chips are fabricated for
cryptocurrencies other than Bitcoin. This altcoin sector is rapidly growing.
It wouldn't be unreasonable to assume that Bitcoin mining machines will
represent less than half of Bitmain's sales by the end of 2018.

(This is a copy of my comment from yesterday's thread on the same topic
[https://news.ycombinator.com/item?id=17084253](https://news.ycombinator.com/item?id=17084253))

~~~
brianberns
> In reality many chips are fabricated for cryptocurrencies other than
> Bitcoin.

OK, so replace "Bitcoin" with "Bitcoin and other cryptocurrencies" in the
title. The point remains the same: blockchain-based technologies are extremely
inefficient with energy. That's the nature of "proof of work" algorithms.

~~~
VMG
Which algorithms are more efficient at doing what Bitcoin does?

~~~
kennywinker
You’re thinking efficient compared to another hashing algorithm. I think op is
saying efficient compared to the value it creates. I.e. cryptocurrency is
useful for some things, but it’s burning a LOT of energy to do it.

~~~
VMG
I'm asking what is more efficient at doing what Bitcoin does: censorship-
resistant transactions with sound money.

~~~
luddaite
I think the point here is that the need for such a currency is not absolute
and may be outweighed by the cost of such a large energy consumption rate.

------
SlowRobotAhead
Serious question... has there been a bigger waste of electricity in any
commodity trading or in any internet trend?

A the cost of a single bitcoin transaction (~300kW) could power a use home for
more than a week [1]. How is this even remotely defensible by people who
participates in coins and also make posts about climate change? Seems very
hypocritical to me, because I’m pretty sure it’s not those “filthy denier
types” that are wrapped up in the coin game.

[1]
[https://www.eia.gov/tools/faqs/faq.php?id=97&t=3](https://www.eia.gov/tools/faqs/faq.php?id=97&t=3)

~~~
asketak
The question about how much costs a single bitcoin transaction is deeply
flawed. The amount of transactions a bitcoin network can process does not
directly depend on amount of electricity spent. Bitcoin network can work the
same way using 10% of its current electricity consumption. Also, lightning
network will allow for thousand times more transactions with same energy cost.

Why is everyone obsessed with bitcoin electricity consumption? I wonder how
much energy is required by the banking system to operate(imagine those
thousands of people burning gas in cars to get to their daily work at bank).
Humanity spends vast amount of energy on much more useless stuff with just
entertainment value(World football cup, all those fans coming from different
parts of world in the jets, logistics...)

Also, energy is a resource like any other and it's generation and price is
subject to supply/demand. The fact, that is is used on mining bitcoins just
indicate, that people value bitcoin technology more than something else they
would spend the electricity on.

~~~
deadmetheny
>Why is everyone obsessed with bitcoin electricity consumption? I wonder how
much energy is required by the banking system to operate

People care because Bitcoin is, by design, massively wasteful. The banking
system's energy use can be curtailed with green tech. Bitcoin's entire ledger
is powered by proof of work, which _by definition_ requires computers to grind
at maximum power calculating millions of hashes. And the difficulty goes up if
more people are mining. And on top of that, the Bitcoin network is extremely
slow _and_ several orders of magnitude less efficient than other banking
systems in terms of transactions per second.

Everyone is obsessed because we're wasting damn near 1% of the world's energy
so nerds can speculate on Dunning-Krugerrands and it's not doing anyone any
favours in the long run.

~~~
enkiie
> People care because Bitcoin is, by design, massively wasteful. The banking
> system's energy use can be curtailed with green tech.

Still does not explain how the current banking industry along with others,
such as the entertainment industry is not "massively wasteful" by design.
Sure, maybe a small portion of the banking system's energy can be curtailed
with green tech, but what about the 24 hour ATM, the light posts at the banks,
the AC units in each branch, the massive skyscrapers in which all of the banks
corporate offices operate? and the energy required to build all of that
infrastructure? As stated already, there are countless number of things that
"waste energy", and in some cases "by design". Check out "b.s. jobs" on
wikipedia.

~~~
TeMPOraL
> _Sure, maybe a small portion of the banking system 's energy can be
> curtailed with green tech, but what about the 24 hour ATM, the light posts
> at the banks, the AC units in each branch, the massive skyscrapers in which
> all of the banks corporate offices operate? and the energy required to build
> all of that infrastructure?_

The point is, that waste is all upkeep. Something the system tries to
minimize, as it bleeds money through it. If ATMs can be made more efficient,
the system saves money. In Bitcoin, OTOH, waste is not upkeep but _a feature_
, which the system tries to _maximize_.

~~~
lostmsu
> which the system tries to maximize

How exactly the system is trying to maximize waste?

In fact, miners did more progress on efficiency in terms of pure hashrate/watt
with a million time improvement in past 10 years, than banking industry ever.

It is demand, that is driving the energy usage, not the system on its own. I
agree with the person above, that it is basically justified by increasing
consumption of the service.

------
curun1r
> So de Vries calculated how much electricity bitcoin miners would have to
> consume for bitcoin mining to no longer be profitable. He assumed that
> electricity prices make up 60 percent of the cost of mining and that
> electricity costs an average of 5 cents per KWh. That yielded energy
> consumption of 7.7GW, which serves as an upper bound of the bitcoin
> network's energy consumption

That's not the upper bound, since there a monetization strategies that end up
using other people's hardware and electricity. Websites that run JavaScript
miners are ridiculously inefficient but also don't have to meet his
profitability formula because the electricity is paid by someone different
than the person/entity that gets the Bitcoin.

------
isoprophlex
Three hundred kWh per transaction!!! That keeps my household running for 40
days!

Humanity has a pretty screwed up way of getting its global priorities right.

~~~
justherefortart
What do you think human's priorities should be?

Just curious. I'm not a scam-coin fan at all.

~~~
vertexFarm
I think that securing a safe and prosperous future should be an obvious one,
and one that we're royally screwing up with the amount of energy we spend.

If climate change is even a tenth as bad as it is projected to be this will
have been a terribly selfish era of history. We're essentially devouring our
young.

~~~
cryptoz
Okay, but that came as a problem long before Bitcoin arrived on the scene. In
fact, bitcoin itself is a response to an overreaching, overextended global
system of control led by banks and other corporations - the same ones who have
ravaged the Earth and lied about it, causing the runaway global climate change
we have now.

Yes, bitcoin uses way too much energy. But if we had a more fair system in the
first place - that is, distribution of resources - it is unlikely anyone would
have resorted to inventing bitcoin in the first place.

~~~
vertexFarm
Well you can't change it now. There's no use crying over spilt milk. I don't
see the logic in creating this wasteful system in response to an pre-existing
wasteful system, especially with how dubious it is that cryptocurrency is
beneficial to mankind.

Like okay Alex Jones, we got a global system of control led by globally
globalist banks. I don't think bitcoin is going to change that. Call me crazy,
but that seems a bit grandiose.

------
blondie9x
Bitcoin is a ridiculous waste of energy. Can we please have more regulation of
this waste? What is the real benefit of Bitcoin? It can't even be used to pay
for anything.

Gold sits somewhere and can be used for manufacturing. Storage of gold uses
almost no energy whatsoever. Maybe to protect and produce a safe and hire
people to watch it if its a large stockpile. Extraction is also difficult and
energy intensive. Best way would be to move beyond move gold and Bitcoin.
Bitcoin just continues to waste more and more energy without being used for
anything. Storing it and seeing if coins are actually real is too energy
intensive.

Bitcoin is irresponsible and a waste. Gotta be a better way to use and create
cryptocurrencies for the environment and to avoid exuberant transaction costs.

~~~
solean
You know what else is a huge waste of energy? Video games. They produce
negative value. Should we regulate them? Should you even be allowed to play
them?

~~~
DFHippie
This argument comes down to "we can't regulate anything if we don't regulate
everything". You could use the same argument to say everyone should have
nuclear weapons if they're allowed to have toothpicks. It's a slippery slope!

Given that we all accept some things should be regulated/disallowed, we can
set aside the slippery slope argument and try to decide what the threshold for
societal good or harm should be. Should you be allowed to dump CFCs into the
atmosphere? How about lead in the drinking water? Can you defoliate the rain
forest for your own amusement? Can you fire machine guns into the air over a
city and let the bullets fall where they may? People disagree about where the
threshold is, but they generally agree that there is some threshold.

------
itchyjunk
If bitcoin was not using said electricity (if there was no demand), would the
power plants be producing that electricity in the first place? You might say
no and hence we burn less fossil fuel. But for renewable sources like hydro,
you just produce less when the demand is less. (Based on what I read on wiki
[0]).

Should we really say `don't try out new ideas because it's wasting precious
electricity`? Maybe we should. But I feel like humans have enough technology
under their belt that enough electricity generation isn't a dire situation. So
are people worried about fossil fuel? If so maybe we should address that. If
not, are we saying we need to quota electricity and decide if new techs
shouldn't get a shot (if they are somewhat 'wasteful' and we don't know how
useful it is)?

Side not, I wonder how much electricity gaming system uses.

[0]
[https://en.wikipedia.org/wiki/Hydroelectricity#Flexibility](https://en.wikipedia.org/wiki/Hydroelectricity#Flexibility)

~~~
Guvante
> But I feel like humans have enough technology under their belt that enough
> electricity generation isn't a dire situation.

It isn't a direct situation it is just wasteful...

> Side not, I wonder how much electricity gaming system uses.

A high end system uses around 750W and assuming 3 hours of game play a day is
around 800kWh a year, so enough for 2.5 Bitcoin transactions.

Besides honest question: is there anything about Bitcoin that is experimental
anymore? Seems most research switched to different coins so defending Bitcoin
to defend research is odd.

------
VMG
1\. There is no proven alternative to Proof-of-Work. No, not even Proof-of-
Stake:
[https://download.wpsoftware.net/bitcoin/pos.pdf](https://download.wpsoftware.net/bitcoin/pos.pdf).
Most PoS fans admit this.

2\. Thanks to second-layer scaling solutions, there can be arbitrarily many
off-chain transactions powered by an on-chain transactions. For more
information, visit [http://lightning.network/](http://lightning.network/)

3\. Bitcoin was not invented as a cheap transaction medium, although it was
mistakenly marketed as such for a long time. It was invented to serve as a
uncensorable sound money. The cost calculation needs to reflect that aspect,
otherwise we are measuring the aerodynamics of a tank.

~~~
tim333
Oroborus proof of stake is kind of proven on paper
[https://eprint.iacr.org/2016/889.pdf](https://eprint.iacr.org/2016/889.pdf)

And bitcoin proof of work isn't that perfect. Over 50% of the hash power is
with a few guys in China so they could hack the system if they wanted to.

~~~
VMG
No they can't "hack" the system - they can try do a double-spend, but it would
be very expensive. The cost is proportional to chain length.

What's the cost of creating a parallel chain in "Oroborus" as a function of
chain length?

------
brockers
Why the obsession about energy consumption from mining bitcoin? It is because
many people still consider it imaginary or non-productive? It is because,
unlike many other markets, it is fairly straightforward to find upper and
lower bounds for consumption?

~~~
danmg
Well, if this sort of system is going to be the future of finance, isn't the
environmental impact of it something we should consider? Especially, when we
hear about old inefficient power pants coming back on-line to fulfill the new
demand created by cryptocurrencies.

Edit: Don't the mining costs basically exponentially increase as the supply of
bitcoin runs out as it's an exponential decay? Being bounded by an exponential
function isn't a good sign.

~~~
TangoTrotFox
In response to your edit, no. There is no set cost to mine a bitcoin. Energy
is expended in trying to solve the problems the generate bitcoins. Once
bitcoins run out, this is still true as instead of directly creating new
bitcoins, miners will still be rewarded with the transaction fees connected to
whatever block they main.

The difficulty of solving a problem to generate coins is dynamically and
automatically adjusted such that it takes about 10 minutes. What this means is
that if you had a total of 800 nuclear reactors dedicated to exclusively
powering ASIC systems to mine Bitcoins it'd take, on average, just as long as
it would if your total electricity consumption was the equivalent of one guy
running a low power laptop using a hand crank or bike generator.

So all the electricity consumption represents is demand. As demand increases
for bitcoin, so does this price. When the price goes up this means you can
afford to pay more for electricity and still show a profit. When demand goes
down for bitcoin you need to pay less and less for electricity to maintain
profitability.

What will happen when no new coins are being generated is that the reward for
each block mined will decrease. This will mean you receive less money for
mining a block and thus can not afford to pay as much for energy and remain
profitable. The net effect being that we'll see a decline in energy usage as
miners running on thinner margins are pushed out of profitability.

The dynamic balancing is actually quite a clever design.

------
rando-brando420
In a market system, why is this a problem? How much energy and resources are
used in all manner of activities which somebody could consider wasteful?

In any event, it seems to me that bitcoin is becoming a proxy for Arthur C
Clarke's "megawatt-hour" currency which he predicted would emerge by 2016 [0].
Tying a currency to a fundamental quantity (the Joule) seems like a reasonable
way to overcome the deficiencies of fiat currencies.

[0] [http://www.kurzweilai.net/arthur-c-clarke-offers-his-
vision-...](http://www.kurzweilai.net/arthur-c-clarke-offers-his-vision-of-
the-future)

~~~
WorldMaker
It's a problem because market systems commonly fail at correctly gauging
externalities without enforced regulation or taxation to properly tune the
market to more effectively balance short term gains against long term/big
picture (planetary) losses.

Something like Carbon taxes, for instance, might help the market hit a better
long-term equilibrium for uses of electricity that takes long-term problems
like climate change into better account.

~~~
rando-brando420
Carbon taxes apply to power generation, not power utilization.

Put another way, why is it not a problem for millions of people to turn on tv
sets and "waste" electricity watching football? What is the logical endpoint
of the regulatory approach?

~~~
WorldMaker
A) See the "something like" hedge.

B) Most taxes get "passed on" to the next buyer, eventually. A carbon tax on
power generation affects power costs, which in turn affects power utilization.
It's not a direct effect, but it's still more awareness of the externality in
the market as a whole than without such a tax.

C) It's possible that household TV usage is a waste of power utilization, in
terms of long term carbon state, and a carbon tax or something like it might
encourage more people to watch football games in person or read more books. A
carbon tax could encourage more household users to reexamine their power
utilization. If you trust the markets to be rational (and that's a wild
assumption, I think, these days), people will sort that out for themselves if
the market reflected externalities better.

D) That said, the people truly fighting against options like carbon taxes are
industries whose daily output far outpaces household power utilization and
households may not need to change hardly that much, if industry simply got
cleaner or paid more of its share of the damage it was causing.

E) Just because your hypothetical is a silly one, I think the statistics show
that right now in terms of carbon output, staying at home and watching TV is
actually one of the best power utilizations with regard to greenhouse gas
output of an average household. Most American households' carbon output are
most influenced by their a) internal combustion vehicles, b) HVAC systems, c)
beef-eating habits, roughly in that order. Modern LED TVs are masters of
efficiency with respect to other things in one's household.

------
awt
What is the standard for virtuous use of energy?

~~~
solean
So much outrage for bitcoin energy consumption from people on their computers,
in well-lit, air-conditioned rooms.

------
anonymfus
Please somebody convert it to human deaths, for example using data from this
paper about death toll of energy generation: [https://sci-
hub.tw/https://doi.org/10.1016/S0140-6736(07)612...](https://sci-
hub.tw/https://doi.org/10.1016/S0140-6736\(07\)61253-7)

------
bastawhiz
Correct me if I'm wrong, but this seems like a problem that can't be
corrected, either. Decreasing energy use means doing fewer calculations (and a
few people here have mentioned PoS). If I'm running a multi million dollar
cryptocurrency farm, it's against my interests to support a system that's less
computationally intensive. The whole point of investing in powerful GPUs is to
crunch numbers harder. If the community comes along and says "we're switching
to this thing that doesn't need your beefy energy-guzzling hardware" these
miners are going to do whatever they can to make sure their investment is
still maximally beneficial. Nobody is going to say "Well it was fun while it
lasted!" and throw millions of dollars of hardware in the trash.

------
geraldbauer
FYI: At Bits & Blocks Press I've collected some bitcoin myths and facts, see
Best of Bitcoin Maximalist - Scammers, Morons, Clowns, Shills & BagHODLers -
Inside The New New Crypto Ponzi Economics [1] or Crypto Facts - Decentralize
Payments - Efficient, Low Cost, Fair, Clean - True or False? [2]

[1]: [https://bitsblocks.github.io/bitcoin-
maximalist](https://bitsblocks.github.io/bitcoin-maximalist) [2]:
[https://bitsblocks.github.io/crypto-
facts](https://bitsblocks.github.io/crypto-facts)

------
xutopia
It's a currency that is backed by crypto and is printed via a kWh backing.
Better than gold and government if you ask me.

------
touchofevil
This is one reason why I think Nano (Nano.org) will eclipse Bitcoin for pure
transfer of value transactions. Nano uses a block lattice that doesn't require
mining. The transactions are instant and feeless b/c of this. There is a tiny
bit of PoW on the sender's device to prevent spam transactions.

~~~
iainmerrick
Hmm, how small is “tiny”?

I suspect it would either be too small to be a deterrent, big enough to be
wasteful at scale, or both. Is there really a sweet spot that avoids both of
those?

~~~
touchofevil
This site claims that a single Nano transaction taking 0.112 Wh vs a Bitcoin
transaction taking 950kWh. (note Wh vs kWh)
[https://isnanogreenyet.com/](https://isnanogreenyet.com/)

Check Nano's FAQ regarding "Is Nano vulnerable to attacks?" here
[https://nano.org/en/faq](https://nano.org/en/faq)

------
onecooldev24
Why weren't these points raised for gold & diamond mining through out human
civilization. Africans have been killed ruthlessly for diamonds and our so
called "smart users" of HN can't seem to see eye to eye on these points. Cause
they missed out on BTC! and now they hate it.

------
birracerveza
Disclaimer: I have invested in Bitcoin, and I think that PoW is outdated.
However, I also think that people that keep attacking this aspect are better
off tackling other issues.

As everyone else before me said, the banks are wasting a much greater amount
of electricity in order to operate. I am not talking simply about gas, lights
et al. (although all banks where I live keep lights on 24/7, and in some cases
even air conditioners), but also about the massive, MASSIVE amount of legacy
infrastructure that keep them going. I'm talking software and hardware that
are several decades old, stacked on top of each other with little to no
optimization in order to support legacy features and to avoid breaking
anything. I fully expect that if we even had a way to calculate how much power
is wasted in order to support that kind of jurassic infrastructure for every
bank, Bitcoin would still come out on top by an order of magnitude at the very
least. And on top of that, we have to compound the aforementioned energy to
operate the physical locations.

Yes, I know that this is pure and simple whataboutism, but seeing this kind of
argument over and over and over again is tiresome, especially since the fact
that we found a way to monetize power consumption could also -hopefully, I
admit- have the added benefit of incentivizing renewable power sources such as
solar panels.

And remember, cryptocurrencies are at their infancy, and we are already moving
away from PoW. I fully expect that at some point Bitcoin will move on too, if
it is not replaced by Ethereum or something much more sensible energy-wise.

~~~
misja111
You might have a point if banks provided the same service as Bitcoin, but they
do multitudes more. Such as, providing a infrastructure for doing payments
that is actually used by billions of people. Bitcoins are mainly used as an
investment or as a store of value, for payments they are not a very good fit.

------
hart_russell
This is why proof of stake is so needed

------
kenpomeroy
There's nothing inherently bad about energy consumption. The raw amount of
energy consumed is a useless metric without determining how much of this
energy is derived from clean/renewable sources.

~~~
Majestic121
You're right that's there's nothing inherently bad about energy consumption.

I would gladly use 7.7 gigawatts and more if it meant developing a cure for
cancer, or exploring Mars, or anything useful really.

The crux of the issue is that Bitcoin is mostly used as a speculative asset,
i.e. something with little actual usefulness except for traders basically.

Using 0.5% of the world's total energy consumption for this is an issue, imho.

~~~
kenpomeroy
If there's nothing inherently bad about energy consumption, why do you think
it is an "issue" for 0.5% of the world's consumption to be used for mining
bitcoin? What if 100% of bitcoin mining is powered by renewables?

~~~
DFHippie
"If there's nothing inherently bad about energy consumption" is assuming a
lot. In theory we could produce all the energy we need with wind, tides,
solar, hydro, fusion, zero-point energy, or whatever. Then there would be no
issue. But we don't live in that world. We live in a world where most energy
in some places is produced with enormous externalities. In other places, the
externalities are fewer, but wasting this energy generating bitcoins doesn't
eliminate the other uses of the energy, so the aluminum smelters or whatever
that might have used the clean energy buy their energy from a different source
that pollutes. And if most of the bitcoin mining is happening in China, most
of it is being powered with the dirtiest energy source: coal.

~~~
kenpomeroy
You assume that a substantial portion of bitcoins are being mined in populated
areas where the energy would otherwise be used for what you deem "better"
purposes. How do you reach this conclusion?

The article does not make any effort to investigate the location of bitcoin
mining facilities or sources of energy being used. For all we know, 99% of
bitcoins may be mined using sustainable energy, off the grid. Without this
information, any estimation of raw energy consumption is meaningless.

