Does Bitcoin waste electricity?

[WestDogg]

Of all the arguments made against Bitcoin, this is probably one of the more convincing ones. With fossil fuels being in short supply, how can we allow such a huge number of computers to run at very high collective wattage just to verify transactions? Why would we have a reward system that encourages spending electricity?

Can we build a reward system that will focus around an activity that does not involve spending a large amount of electricity? For example, thinking. Yes, I'm serious. Brains only use air, water and, some food which you would be consuming anyway. Why not put them to use to verify transactions or do whatever else is needed to keep the blockchain going?

Then there are arguments against wasting not just electricity, but computing power, which could otherwise be directed at distributed computing projects that solve real problems: protein folding, medical conditions indexing and analysis, other yet undiscovered big data uses that are promising to improve people's lives.

I've seen bits and pieces of these arguments mentioned on this forum and other sites, but never exhaustively answered anywhere. The answers might involve deeper analysis than I'm presuming is at play or hidden premises that I'm missing, but I'd like to hear them.

 

[SockPuppet]

• The wastage is capped economically - it doesn't exceed blockreward + fees. And the block‐reward is halving every 4 years.
• The wastage is not large in the grand scheme of things, e.g. compared to the carbon footprint and how many resources are wasted by the traditional system, in banks & security, preventing counterfeit etc.
  
• In that regard the wastage isn't really "wastage" — it's securing bitcoin. We don't think of the costs of supporting other systems as wastage, it's just a cost, if it's worthwhile then we pay it.
  
• The wastage is necessary. This is the deeper idea that's often missed, if mining is free you create a nothing at stake problem, which people are trying to "fix" by bolting on a scaffolding of ad hoc carrots and sticks, but it's unclear whether it can be fixed, as every leak you plug creates another. Even merged mining could be a problem because it lowers the cost to mess with your altcoin. Security comes from attacks having a real cost — a cost which must exceed the rewards of the attack.
  
• If you use something valuable for mining, such as protein folding, it subtracts from the cost of the mining. Quoting from that link above "More deeply, if your mining work has independent value then that dilutes your incentive to mine on the one true best consensus, since you'll still gain that value even if you mine on a losing consensus."
• Bitcoin doesn't need to be fossil fuels. Many western bitcoin miners are running on green energy, usually hydro, as they tend to locate in places with cheap electricty. I heard the Chinese miners are all coal though — does anyone have stats?
  
• My gut feeling (tho my gut never sat any math, econ, or cosc exams) is that bitcoin is buying more security than it needs right now, so it does feel like wastage, but the block‐reward is about to halve again soon. Bitcoin is about to get twice as lean, the real question is whether its incentive schemes will always buy an appropriate amount of security in the future. It's a fascinating experiment.

 

[AdrianX]

The energy spent mining is not wasted. Bitcoin can actually be seen as a way of save energy.

Energy is the commodity for productivity, all you need is creativity and energy, and not only can you go to the moon but you can make more of the "things" we want more of.

In sustainable systems waste is food. Our economy is a simplified and rudimentary ecosystem, it's unsustainable and wasteful in its current incarnation.

This state of un-sustainability is not a natural state it's actuality designed this way - to grow exponentially consuming more and more limited resources.

Bitcoin on the other hand is designed to use energy as an economic input, the same fundamental unit used to make and do everything. (Everything)

The more Bitcoin has value in our finite system the more discerning we need to be about the choices we make when it comes to spending our energy.

To say it's wasted is a subjective value judgment, it's like saying people who buy expensive Teslas are wasting money. Or people who drive Teslas instead of cycling are wasting energy and people who cycle are wasting time.

If there was a definitive Authority, we could look to them to tell us what was wasteful or not. More practically you can decide for your self, and use the free market to obtain the resources you need through mutually beneficial trade, you choose how much is waste.

The only waste is what you personally consider waste.

 

[cypherdoc]

@AdrianX

i like how well what you said jives with @Peter R's description of what that Chinese miner said to him at Scaling; Bitcoin is the energy currency. i really like that even though i think Bitcoin is even more than a representation of energy.

 

[AdrianX]

@cypherdoc the idea of saving energy was triggered by the comments from Peters interaction with the Chinese miner. It reminded me how Adam Smith explained how metals came to be a store of value, they too were a product of surplus energy (cheaper food and wood) invested in mining that then became money.

Some more thoughts.

Mining just seems wasteful at this time when you look at the energy cost per transaction in comparison to fiat. If you think about it a little, the energy being invested in Bitcoin is actually securing the network at a time when it's small and vulnerable. It's the egg, in the chicken and egg scenario of building a secure global value exchange network with just a few paying users.

The current Inflation economy has distorted the cost of energy so much that it is practical to burn it just to go to and from work, or to visit a friend. Bitcoin puts this abundant energy to good use, it's being used to secure the new value exchange network and as the demand for energy increases the networks need for it diminishes.

Bitcoin laggards could be screaming when the cost of energy is pushed up because Bitcoin mining will be consuming so much. (haha, I suspect even some Bitcoin Core developers will be part of the free S#!+ army who want inflation subsidized cheep energy.) If the price of bitcoin goes up, less efficient miners become more efficient, the current price trend is consolidating mining, but when it reverses mining competition is going to explode.

Just a back of the envelope estimate if the price of bitcoin hit $50,000 it would be efficient to mine bitcoin with your computer GPU in competition with those 4th generation ASICs. If you owned a thermometric generator and 4th generation ASIC's, in this current price zone at $100,000 it could be economically efficient to burn down your house to convert the energy into Bitcoin. Seems wasteful (crazy even) if you like houses more than you do Bitcoin.

The more valuable energy becomes the more it's used efficiently, and with sound money, resources will be allocated more effectively in a free market economy. Bitcoins going to give us both and bring about an environmental renascence as much as economic one.

 

[Bitterom]

It is a tricky question to answer. Yes because it uses about 67.74 terawatt hours TWH of electricity. It uses the amount of energy as Ireland. No because it is not wasted. The electricity is been used for a purpose. What is your take on this question?

 

[Toros]

It depends upon your definition of ''wastage''. I admit that a lot of electrictiy is used in the whole Bitcoin process. We need to use renewable energy source for the whole mining business. Our children will curse us if we don't take the whole energy crisis serious.

 

[Haert]

I agree that Bitcoin consumes a lot of electricity but that doesn't mean it wastes energy. You can say that we should use renewable energy source production for the cryptocurrency mining. I was reading somewhere that the overall cryptocurrency mining consumes the same amount of energy as Ireland.

 

[cryptomen]

There is no doubt that consumption is very high and is approaching the consumption of not one country in the world ... Wise heads should somehow use our share in the issue of electricity for the good of the world.

 

[torkinakiza]

It is true that bitcoin needs a lot of energy to work and it would be best to use alternatives such as wind and solar energy for this type of task. But for the time being for reasons of productivity it is best to use electricity as it has been done with that "waste" of energy, youy are buying comfort and making the process of mining more profitable.

 

[qrcode]

I think that there are more important problems than the usage of electricity by bitcoin. And sorry, but brains are never be able to verify this amount of transactions. Moreover, human brain and human work is loaded with mistakes and sometimes incorrect decisions.

 

[oryxminer]

Innovation can address the high levels of electricity consumption. We have developed a miner that consumes far less electricity by using optical hybrid circuits. This allows round-the-clock mining that is 95% more efficient in terms of electrical consumption. There are ways to conserve electricity to make mining more efficient. But making these ideas a reality requires time, effort, and a lot of brainpower.

Thinking as an alternative is an interesting idea, but unfortunately there's no way to document the human brain's internal processes. The blockchain infrastructure's cryptography is far too complex for a single person to process without some type of mechanical aid.

 

[Wildworm]

Some people are really wasting electricity. I know people that illegally do not pay for electricity, trying to get more profit from the crypto mining. But that's not a problem of bitcoin, the problem is people...

 

[jOPLER]

Really, if you mine successfully than you may pay for electricity without any trouble and then you`ll help cover those wastes

 

[Linkkoin]

We will see the outcome of Chinese discussion on 7th of May. Wondering what would be arguments in favour of banning crypto mining in China

 

[Georg Engelmann]

We will see the outcome of Chinese discussion on 7th of May. Wondering what would be arguments in favour of banning crypto mining in China​

From what I heard: China never had rules to protect the environment like most European countries and is now facing the consequences. A mining ban isn't really helpful in their situation.

 

[Bitterom]

I think that mining is not the worst for the environment. The authorities would have thought better of more pressing issues.

 

[Bartab]

Yes, it wastes, but not much compared to other industries.

 

[AnotherName]

yes it does but so does most other things in our modern day. We can find more nature friendly ways to create electricity which will help in the long-term for BTC.

 

[Utagawa]

There are many problems in our environment that we can’t blame it on mining itself. It’s true that mining costs a lot more electricity. But, energy saving can also be used on other daily processes that we have.