Peter wrote:
I read somewhere that it is using up so much electricity that it is becoming a significant CO2 generator.
That’s a bit of a red herring. Yes, it uses electricity for all the computer power and that requirement is growing. But the CO2 generation depends on the electricity source. Most (>70%??) of the mining is being done in China due to cheap coal-based electricity, but that is changing for various reasons. Almost all North American mining is being done with solar, atomic, etc energy which is CO2-free.
But most jump on bitcoin mining energy consumption without any comment about gold mining. Bitcoin mining uses 30% of the energy currently used by gold mining, and that is certainly not CO2-free.
a single bitcoin transaction (so when you transfer some fraction of a bitcoin from your wallet to mine) has approximately the same Carbon footprint as an economy flight from London to New York.
Is there any truth to that statement, or is it FUD spread by the centralised finance industry and swallowed by gullible alumni of the Diane Abbot school of mathematics?
Does the comparison take account of whole life infrastructure costs, or is it just like an (idiotic) comparison of weight of carbon burnt per 100 miles by a car and a light aircraft?
Nobody questions the total carbon footprint of the traditional centralised finance industry. Not just the electricity to run aircon systems and IT networks 24/7, but also the glass and concrete, the civil and structural engineering infrastructure and its demolition costs, the workers, the regulatory, security and support services and all their cars, roads and mass transit systems?
Incidentally, BTC transactions don’t all have to be individually recorded on the blockchain. Small amounts (up to about 3.6 million sats, currently about 1,000 EUR) can be exchanged on Layer 2 channels like Lightning, which is almost free, instant – and essential to the scalability of Bitcoin’s decentralised finance concept.
Jacko wrote:
Nobody questions the total carbon footprint of the traditional centralised finance industry.
Don’t know which part of the finance industry you are referring to but all major financial institutions issue Carbon reports these days and have programs in place to reduce it. If you do not like comparisons with air traffic: A single bitcoin transaction consumes about as much energy as a million traditional credit card transactions (that is E2E from Customer account to customer account).
And yes: There are obviously other payment channels for bitcoin emerging like Lightning, but they all share a commonality: They are no longer on blockchain so they basically give away all the advantages of bitcoin and rather build “virtual mini banks” to transfer money exactly the way “traditional banks” do. There is not a single advantage to use such a payment channel instead of a traditional bank – it’s actually less secure.
Let’s face it: The whole security concept of bitcoin is based on the fact that a transaction is so expensive energy wise that it would be a bad deal to risk this energy on trying to cheat rather than to execute a legal transaction. So the huge energy consumption (more accurately: Huge consumption of computing power but that very well scales with energy consumption) is not a bug, it’s the core security feature!
chflyer wrote:
But most jump on bitcoin mining energy consumption without any comment about gold mining.
There are substantial differences to gold mining:
- Gold has a usage value (e.g. in electronics) and is not purely virtual
- To mine gold you actually have to spend the effort while the effort spend to “mine” btc is completely useless.
- “w/o any comment about gold mining” is also not completely accurate: Just last year Siemens received a global shitstorm just because they planned to deliver signal technology for a railway that is build to serve a mine!
chflyer wrote:
Bitcoin mining uses 30% of the energy currently used by gold mining, and that is certainly not CO2-free.
Even if it might be true (which I haven’t checked.
About 650.000 etc. have been mined last year. Even at the current etc prices of about 30.000EUR/BTC this represents a value of about 20bn USD.
In contrast, the yearly gold mining output is about 3300t = 3.3000.000kg. Given a gold price of about 50.000EU/kg. That equals 165bn USD in value.
Therefore even if we ignore the practical value of gold, from a purely monetary value POV with bitcoin mining you get 12% of the value at 30% of the energy. Bad deal in terms of carbon.
(and yes, on both sides of this equation one could argue that the energy consumption is only part of the story and there is additional waste generated by building the machinery, etc.)
chflyer wrote:
But the CO2 generation depends on the electricity source.
That is kind of naive as mining requires additional industry and therefore as long as there is a shortage of renewable energy, they contribute to traditional power plants being kept alive. Also from a load profile this is actually true as I’m not aware of a single mining farm that is actually shut down during night or low wind times. So mining farms are the perfect example for the so called base load that actually prevents to go full renewable…
chflyer wrote:
Almost all North American mining is being done with solar, atomic, etc energy which is CO2-free.
It still has an opportunity cost: if that energy wasn’t used for computing bitcoin hashes, it could be getting used instead to run industrial machinery, reducing the amount of coal that’s being burned.
My understanding is that in some areas such as west Texas, they actually produce more wind and solar electricity than they can use so a great deal of it gets wasted. I think California has had similar issues with having to dump / pay to get rid of electricity when they’re generating too much with renewables.
El Salvador has just announced it will be harnessing volcanic energy to mine bitcoin.
This FUD does rather remind me of the claims that the internet was going to use so much coal that it’d destroy the planet.
The environmental argument seems rather a sideshow to me. The simple fact that it is a secure, safe, permissionless store of value available to anyone who can gain access to the internet is very impressive. It offers banking facilities to billions who do not have access to them.
Of course there are other shitcoins about, I read about one:
-27 trillion in circulation
-Unlimited supply cap
-only 1 node
-25% of supply minted in the last 6 months
-1% of holders own 30%
Then realised that was the US Dollar.
Off_Field wrote:
It offers banking facilities to billions who do not have access to them.
The share of the global population that does not have access to “traditional” banking facilities but does have internet access is extremely small and absolutely sure not billions!
Or do say it straight: You need a bank account to have a mobile phone to do (bitcoin) banking without bank account.
Off_Field wrote:
My understanding is that in some areas such as west Texas, they actually produce more wind and solar electricity than they can use so a great deal of it gets wasted.
The problem is that even in such areas that is only true for part of the day/year. Bitcoind “mining” hardware, however, is so expensive and gets outdated so fast that it doesn’t make any sense economically to only use such excess energy and shut the farm down when no excess energy is available.
Malibuflyer wrote:
absolutely sure not billions!
According to the world bank global financial inclusion studies they put it at about 1.7 billion. it was at 2.2 billion.
Off_Field wrote:
According to the world bank global financial inclusion studies they put it at about 1.7 billion. it was at 2.2 billion.
Absolutely not!
1.7 billion is the number of people w/o financial inclusion. It is not the number of people w/o financial inclusion that have internet access. The global number of people w/o internet access (that therefore could not use bitcoin) is estimated at about 3bn (about 40% of global population).
Yes, if we have no ideas what these numbers men we could still say, there is a theoretic option that the 3bn w/o internet all have banking and the 1.7bn w/o banking is a different group that have internet but this is “very unlikely”.
Reality tells: If you have internet access you need to somehow pay this access – and in order to do so you need to have access to banking.
Malibuflyer wrote:
somehow pay this access – and in order to do so you need to have access to banking.
Absolutely not!
Lots of poor places use prepaid cards to top up phone balances. Paid for by cash. No banking facilities required.
It’s OK though, we do need luddite quotes to look back at in the future. Much like there only being a need for a handful of computers in the world.
Having an asset that can’t be taken off you could be tremendously liberating for many. Especially those stuck with atrocious governments and hyperinflation.
Off_Field wrote:
Having an asset that can’t be taken off you could be tremendously liberating for many.
One of the many myths about bitcoin. Of course it can be “taken off you”. It only takes the majority of bitcoin miners (as in 50.000001% measured by calculation capacity) to take any amount of bitcoin away from you terminally. And before you answer the typical “yeah, but this is only a theoretical threat as the group of miners is so diverse, etc.” one small fact: 65% of bitcoin mining capacity is located in China.
So the whole question of bitcoin today is of you trust the Chinese government more or less than the Bank of England, the FED or the EZB…
