If half of all people stop sending bitcoin around, the amount of electricity used doesn't go down by 50%. So you sending or not sending bitcoin doesn't impact the electricity spend by miners at all.
Miners mine to secure the network, there is not a certain amount of electricity needed per transaction.
So if the network can only do X transactions per day, and it costs $Y to run the network, it seems fair to use a "cost per transaction" to describe that inefficiency.
Kind of like how I could represent the total cost of ownership of a car (purchase price, oil changes, tire changes, big repairs, fuel) in terms of $ per mile, even though out of all those costs, only fuel is directly consumed by driving a single mile.
It is not, as many on HN have correctly pointed out, a viable transactional currency for most use cases due to price volatility, taxation related friction, limited real-world adoption for payments or transaction costs. The only compelling transactional use cases I know of are censorship resistant payments (e.g, Wikileaks) or high value international funds transfers outside G8 countries where wires are slow and risky.
Most Bitcoin is held by savers or speculators over long periods and transactions are infrequent. Therefore the primary purpose of Bitcoin mining is securing the network from bad actors. Bitcoin is a secure vault on the internet. Just because people put money in and take money out of a vault doesn’t mean the purpose of a vault is transactions. It is security against 51% attacks.
Therefore, the appropriate measure is not cost per transaction. It is cost per total value secured.
This is like saying that if the US banned gold that gold mines wouldn't be impacted at all. Demand (and thus profitability of the asset) fuels mining.
People mine because mining is profitable, not to secure the network. Securing the network is a side effect.
They are ultimately humans, not machines, so they mine for the mining reward, not as a public service of securing the network.
Transactions are the only service provided by Bitcoin (what else is a currency for other than transactions?), so it's totally fair to consider it's energy cost per transaction, especially since the banking system is evaluated in the same way.
Not yet. But that will be increasingly the case in the coming decades as the block subsidy gets repeatedly halved into insignificance. Then the brunt of Bitcoin's security (protection against 51% attacks) will have to be borne by transaction fees.
The price of bitcoin is supported by inflow of "fresh money" from newcomers. If this inflow stopped, for how long would mining continue?
If all Bitcoin holders decide tomorrow that it’s worth $200k per coin, then that’s the price, even if there are very few buyers at that price.
It’s like the price of a stock: it’s not dependent on trading volume.
It’s so frustrating having these discussions about energy consumption.
If you make a statement about the absolute energy consumption of a PoW blockchain, the first response usually is “But this other thing consumes way more energy!!!!”
In order to compare the consumption of the network to anything you will need to calculate it by some unit of utility. Transactions is the only metric that makes sense.
> Each Bitcoin transaction consumes around 2,150 kWh as of the time of this writing.
This is wrong because Proof of Work blockchains use the same amount of energy whether any individual makes a transaction or not.
Doesn't anyone else find it ironic that actually understanding how that blockchain works could bolster that particular anti-energy use reaction?
Ah! but the same people don't want to spend any of their own energy understanding how blockchains work because they've already made up their mind that its not worth doing that!
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"My car constantly consumes oil at a prodigious rate even if I only drive it to the grocery store occasionally."
"Even if it's just sitting in your garage? Does... does that make it go faster or further?"
"No, even if my car suddenly starts consuming a lot of additional oil out of the blue, I still can't drive it any faster or further than I could before. The maximum distance I can drive it in a week is a fixed distance regardless of how much gasoline I pump into this bad boy."
"..."
"Anyway, this should probably be the future of transportation."
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The reasonable conclusion here is not, "when you think about it, driving my car has no environmental impact". The reasonable conclusion is, "holy heck, why would you design a car that way?"
> Doesn't anyone else find it ironic that actually understanding how that blockchain works could bolster that particular anti-energy use reaction?
I'm saying make the better, more accurate, argument. I also think if people were able to independently come to those arguments, they would discover things they find interesting about blockchains in the process, as well as where to place that energy
Not entirely; that depends on the blockchain in question and on how much block subsidy is left. For bitcoin at this time (as well as for blockchains with a tail emission at any time), it's mostly correct since tx fees are a small part of the block reward. But in a few decades the bitcoin tx fees will dominate the every halving block subsidy.
The source of energy is way more important, bitcoin's source of energy is pretty good compared to any industry, and it can be better. Individual vigilance should be placed on ensuring that the overall source of energy for bitcoin gets better. because some of those major sources are reducing pollution and emissions. more mining can happen at more of those places. while other energy sources can be avoided.
- Electricity costs are not constant everywhere, not everyone burning that power is spending the same amount as you (and in general, home farming Bitcoin using the cost of electricity in your area is probably not profitable, at least for most people reading this). It's almost certainly a mistake to use your local electricity rates as a baseline for how much money mining costs.
- Not everyone mining Bitcoin actually pays for their electricity, some of it is stolen. Some mining happens on hacked hardware, sometimes mining rigs tap into electrical sources that they shouldn't have access to.
And the really big reason that springs to mind:
- You are not paying the full electricity cost for mining Bitcoin in transaction fees, the generation of new coins is offsetting some of that cost.
Remember that Bitcoin is a speculative asset first, and a transaction method second. The network, and payout/fee structure for transactions are also constructed in a way that can mess with market forces a bit. There's a lot more going on than just "you want to spend money, pay enough to cover the electricity fees to make that happen."
This is the big factor.
As the block reward decreases, transaction costs will need to increase dramatically.
So this is trying to average out the total electrical cost including mining into a per-transaction cost.
Further, the rates for your home are not the same as rates in other places (odds are that somewhere else has cheaper electricity than you do).
How much is your monthly bill? I pay somewhere around 10€.
It's just a very obfuscating way to describe what's happening. Not only is it not a useful abstraction, but it actively leads you to wrong conclusions to talk about it in terms of energy use per transaction.
The amount of energy spent on a Bitcoin transaction is partially a function of the expected payout for mining that transaction.
The network doesn't only pay the energy cost one time per block, Bitcoin by design duplicates effort mining that block because miners compete with each other -- that's the whole point of POW, duplicated effort. The amount of attention/price of Bitcoin influences that, which is partially dictated by usage.
If Bitcoin crashed to $10 a coin tomorrow, the amount of energy being expended on each block would go down because there would be fewer people mining it. The number of miners (and the amount of duplicated work) will increase with Bitcoin's usage.
Energy usage in Bitcoin is not a global constant, the coin is designed so that people will suck up as much available electricity as possible until the cost of that electricity is higher than the profitability of mining. It is designed to always take up the maximum amount of electricity/hardware possible and to immediately consume any extra bandwidth or lower prices on the electrical grid (sidenote, this is why the "Bitcoin pushes renewables" argument is so silly).
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> There is no "energy cost for transaction" in Bitcoin, it's an energy cost per block.
This feels like word games to me. The blocks are getting mined in order to process the pooled transactions, that's why mining was invented in the first place.
If we say that the transactions aren't contributing to the energy usage, then we might as well take it a step further and say that the energy is all wasted because it would be spent anyway, regardless of how many transactions are happening. But I think the more reasonable way to approach what's going on is to say that the energy is expended in order to keep a functional network that supports transactions, and that it supports transactions at a fixed maximum rate.
It's like arguing that the environmental/human cost of gold shouldn't be factored into its usage because literally handing someone a block of gold doesn't at that moment incur that cost. That doesn't mean the gold mine stops existing and it doesn't mean that the usage of gold as an asset isn't the main reason why the mine was built in the first place.
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And in a lot of ways, this take (the block would be mined anyway so transactions are environmentally free) is kind of the opposite of the conclusion that would be more logical to reach. The fact that Bitcoin's energy usage can rise independently of functional usage is a flaw, not a strength. One of the sources for the article goes into more detail (https://digiconomist.net/bitcoin-energy-consumption#scalabil...). It argues:
> Unlike the network’s transaction limit, the energy consumption of the network isn’t capped. The price of Bitcoin is the main driver of the network’s environmental impact, and there’s no limit to how high this can go.
It isn't actually a positive that Bitcoin's energy usage can spike to match the entire country of Hungary while still only processing at max 7 transactions per second; far from meaning that individual transactions don't matter for energy usage, this means that individual transactions can spike to even higher energy usage than they would otherwise require regardless of how congested the network is. It's bad that the spike in energy usage does not come with any benefits to scalability.
If you leave the amount of transactions constant, and the price rises, the security of those transactions goes up (this might be too idealistic of a model, maybe wrong, but it's widely accepted basic microeconomics, not macro). If you leave out the speculation aspects of the price of bitcoin (say, in a couple of decades), a price increase means the market wanted to pay for more security (which is why the price rises). If the price goes down to say, $10, it's just the market signaling that bitcoin is not useful anymore.
I don't know about you, but I would like to have some backup next time Trudeau wants to freeze my accounts for protesting his measures. I'm not sure about 30k, or $10, probably right now something in the middle. But if that isn't a concern that bothers me, I would leave for a warmer authoritarian country, if there are any left.
Not all cryptocurrencies are PoW like Bitcoin. XRP, Cardano, Solana, Polkadot, Stellar and Algorand to name a few with over $1B market cap are not 'burning the planet'. Maybe by that logic, every single car (including electric ones) is worse for the climate than you think. Is that a safe generalization? Does that mean you should stop driving your car, truck, etc? No.
Greener alternatives to petrol and diesel actually exist for such vehicles. The same is true for some 'cryptocurrencies' (coins) that have over a billion market cap which are greener alternatives to PoW cryptocurrencies like Bitcoin.
But nice try with the clickbait headline and sweeping generalization to all cryptocurrencies though. How comes this petition, led by many critics also know this difference? [2] They tried to ban mining in the UK and it appears to have failed to get attention and enough signatures for a discussion in parliament in the UK.
[0] https://rollen.io/blog/crypto-climate/#footnote:1
[1] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7402366/table/t...
EDIT: PoS is a dumpster fire. But PoW and PoS are not the only games in town.
Why make alternative finance systems based on the same fact that the wealthiest entities control the policy of the network? Exactly like in the current system with central banks and governments.
which means everything that uses 0.5% or more of global power uses the same amount of energy as many countries
seems like an irrelevant metric, and it is. this isn't about "pointing out worse things to justify bitcoin's energy use", its about this just being a bad metric to begin with.
But also, this article gets so many things wrong I don't even know where to start. For one, it confuses a "transaction" with "mining a block". A single block can facilitate around 500 transactions on the bitcoin chain, so if an end user wants to "send a bitcoin" as the article states, divide that monstrous energy usage by 500, and suddenly the graphs are not quite as emotionally charged anymore.
The other part is that not all energy is created equal. A third of the time, the world has a surplus of energy that can't be efficiently used or stored (daylight for solar, wet season for hydro...) — miners have taken advantage of that years ago and most mining is done when and where energy is cheap because it's a surplus. Doesn't mean that this nullifies the impact, but any comparisons of bitcoin energy use to that of a physically constrained country are incredibly misleading.
[1] https://stats.buybitcoinworldwide.com/blocks-daily/ [2] https://digiconomist.net/bitcoin-energy-consumption/ [3] https://ycharts.com/indicators/bitcoin_average_transactions_...
The drama against cryptos and their energy consumption is unproductive and is imho going to yield no change (in the grand scheme of things), as the field can't really be tamed the same way other industries can due to its decentralized approach of doing things. Instead of wasting time with this approach, we should be pushing for and incentivizing cheap green energy sources, as that is where the real issue comes for every industry.
As long as the source is green, which it already is fo a huge chunk of the energy behind cryptos, and as long as it is not messing with the availability for the demand in the grid for other industries/consumers, then who cares how much it consumes?
And if that happens, if Bitcoin goes from being used by ~0% of the world population (for everyday exchange) to being the main way people transact goods and services, then we can expect the demand for miners to skyrocket, possibly leading to an energy draw that is a multiple of the world’s current non-blockchain usage.
If/when that will happen is unclear, and I’d agree that “this much by 2030” forecasts that just extrapolate the current trend will likely be inaccurate. But if we’re debating whether Bitcoin/crypto should be more used or less, I think it’s only fair to reckon with the effects that future crypto growth would have on its energy draw. We can’t argue about tomorrow’s revolution with yesterday’s numbers.
Similarly, F1 or NASCAR racing are incredibly inefficient uses of fossil fuels. But there is no threat of performance racing becoming how everyone's cars work. So it can stay as just some weird hobby of rich people and not represent an existential threat to life as we currently know it.
The point of continuing to advertise the climate cost of cryptocurrency is to help keep consumers informed. If people care about the climate, are thinking about getting into crypto, and they learn ahead of time that crypto is bad for the environment, then they might skip getting involved in the first place. In this way, we can hopefully cut off the supply of Greater Fools that are necessary to keep the cryptocurrency-cum-hyper-speculative-asset-investment pyramid scheme from growing.
Why is it "drama" to put forth arguments against crypto and why is assessing pros and cons less productive than any other argument on Hacker News? Making a statement like that marks you, at least in my mind, as a true believer.
What? Look at all the things we do with electricity. Spoiler, there are quite a few. Spending half a percent on crypto currencies is a lot.
As long as the source is green, which it already is fo a huge chunk of the energy behind cryptos, and as long as it is not messing with the availability for the demand in the grid for other industries/consumers, then who cares how much it consumes?
Even if the energy is green, it could be used for better purposes. [1]
[1] Yes, I have heard about the green energy used in remote places where there is no other demand. If this is the dominant source of electricity, then calculate as much hashes as you want.
