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Is Bitcoin Mining a Real-World Environmental Problem?
First time accepted submitter HeadOffice writes "Mark Gimein points out that Bitcoing mining uses a lot of power, enough that it is a real world problem: 'About 982 megawatt hours a day, to be exact. That’s enough to power roughly 31,000 US homes, or about half a Large Hadron Collider. If the dreams of Bitcoin proponents are realized, and the currency is adopted for widespread commerce, the power demands of bitcoin mines would rise dramatically. If that makes you think of the vast efforts devoted to the mining of precious metals in the centuries of gold- and silver-based economies, it should. One of the strangest aspects of the Bitcoin frenzy is that the Bitcoin economy replicates some of the most archaic features of the gold standard. Real-world mining of precious metals for currency was a resource-hungry and value-destroying process. Bitcoin mining is too.' However, not everyone is convinced that virtual mining is as bad for the environment as the real thing."
"About 982 megawatt hours a day, to be exact"
982 MWh/day / 24 = ~41 megawatts
Come on reporters, convert brain-dead units into normal units.
MWH is a unit of energy. It's also readily convertible to money.
Considering that most people pay for their electricity by the kilowatt hour, the megawatt hour is not a bad unit to be using. It lets me say, for example, that it's about 200,000 times my average daily electricity usage (5 kWh on my last bill, probably because of the air conditioning). Much easier to compare scales.
Mind you, megawatts aren't bad either ... they're just not as intuitively transformable to real-world scenarios for most people.
Continuing my tradition of using Hydro-Québec's installed capacity as a unit of measurement, this "environmental problem" is only consuming 0.0011 Hydro-Québecs.
In short, my considered advice to anybody looking at bitcoins as a way to get rich quick:....steer clear.
That's good advice for pretty near any way to get rich quick. Especially if someone is trying to sell it to you.
"First they came for the slanderers and i said nothing."
It's not quite that simple. Fractional-reserve banking creates promises of money out of thin air. You can do fractional-reserve banking with gold coins, barrels of oil, strawberries, or any other commodity.
Even that's not quite fair to say, because every promise of money created is created at the same time as a right to future money, so the total net amount of money isn't changed.
Many people get f-r banking and fiat currency confused.
Sorry, but there is a mechanism built in to the algorithm to prevent that from happening.
The truth is that all men having power ought to be mistrusted. James Madison
On where the power is coming from. Wind Powered bittcoin mining wouldn't be so bad right?
No. Electrical energy is fungible. So if you use wind power, there is less wind power available for others, so they have to use more coal power (or whatever). The result is the same as if you had just used the coal power directly. The only way it would make a difference is if the wind power was otherwise going unused (unlikely).
it's a rounding error.
So is every car on the planet, but that doesn't mean we don't consider the output of those cars, does it?
Little things tend to add up quickly when you're paying absolutely no attention to efficiency.
Persistent Volume manager for Kubernetes - https://github.com/dwimsey/openshift-pvmanager
IANABP (I am not a Bitcoin Proponent, I own exactly 0BC and will not in the forseeable future), but I am interested in the idea and mechanisms involved.
If a break is ever found, suspected, or even slightly likely an orderly migration to better cryptographic primitives can be performed. If you are interested in knowing more the wiki enumerates all the known possible attacks.
md5sum
d41d8cd98f00b204e9800998ecf8427e
He simply wanted to say "fungible"
Pain is merely failure leaving the body
So people are paying real money for electricity to then convert it to fake currency?
Actually they already use GPUs - and there are companies making ASICs now. Dedicated Bitcoin mining boxes. The people who purchased GPUs specifically with mining in mind are apparently already annoyed, because the new computational power coming online means they are seeing less return, due to the increasing requirements as the number of mined bitcoins increases.
Correct. You can use a bitcoin exchange to convert real money into fake currency as well.
...Bitcoin is an MMO?
Electricity is not something we can efficiently transport from places where it's abundant to places where it's needed. Unused excess electricity is a waste.
A 2000km HVDC line loses about 5% of its energy to heat. 95% efficiency over 2000km lines seems pretty efficient.
In my opinion, no.
Reporters use the units of energy, so that the total would look much bigger than it is. 982MWh/day - I only use 1.2MWh in a month wow that's a lot, but remember that this is for the entire mining network, not for an individual miner. On the other hand, 41MW - that's not a lot, a hydroelectric power plant in my city is 100MW - that single power plant could power two bitcoin mining networks - I bet Google's servers use more power than this...
you can exchange it for other currencies or goods & services, how exactly is it a fake currency?
This is a joke. I am joking. Joke joke joke.
A few years ago (2008?), much was made of the tidal capture planned for the Bristol Channel. The study on which the argument of both sides was based had calculated that capturing enough energy in the channel would supply the entire energy needs of England, Wales, Scotland and Eire, all the outlying islands and the North Sea Oil Rigs, and still only deplete 5% of the total amount of energy passing through the channel at any time. Capturing 100% of the energy would not only supply most of Europe, it would also result in a glass-smooth Bristol Channel. The surfing fraternity won the argument, saying that even a 5% drop in tidal energy would kill the tourism industry in the area since most of the coastal tourism in the area relied on the four foot breakers*!
*Yep, that's what was said. The Bristol Channel has a 47 foot tidal range, which is pretty much the highest tidal range of any estuary on the British coastline.
Operation Guillotine is in effect.
After that there is exactly ZERO point or need for mining.
Incorrect. Mining is the process that adds transactions to the block chain. If there is no mining, then the entire system grinds to a halt, and existing bitcoins cannot be spent.
The mining reward serves two purposes: 1) Gradually introduce bitcoins into the system over a period of time. 2) Provide an incentive for people to mine while the system is still young and not yet widely adopted. Once the mining rewards dwindle to zero (i.e., all of the bitcoins have been created), then transaction fees remain as an incentive to miners. Many current miners will probably drop out of the pool by the time the mining reward is reduced to zero, but mining will still be necessary to make the system work.
Not really. Say your energy grid has 100MW wind and 500MW coal and you're using 400MW. If your BitCoin mining adds 100MW consumption, you could always say it's using 100MW of wind power, but then that means whatever was using that power before now derives it from coal. It's just swapping numbers around.
Yes, it'd be hard to remove wind power from others, but that's only potential available energy, it's not realized and thus entirely irrelevant to the discussion, unless BitCoin mining magically builds wind farms.
CONGRATULATIONS, sir, you have picked door #2, marked "Bitcoin mining will eventually stop." Behind that door we have ... that bitcoin is a pyramid scheme. Also, congratulations to the zombie botnet owners of the world, who will soon be owning most bitcoin.
How very fortunate you did not pick door #1, the door marked "Bitcoin mining will pay for itself in perpetuity." Behind that door you would have found a colossal waste of resources. For every unit of value a bitcoin represents, the same value would be wasted by the mining machines, leading to economic loss and global warming escalation.
Bitcoin is a cool technology experiment - but in the end, it's just a bad idea.
"I mean the guys could make a mint that got in on the ground floor, because mining was super duper easy, but as more and more enter it becomes harder and harder and now I seriously doubt anyone that isn't stealing the electricity will ever break even."
That isn't why they made a killing. First, it wasn't "super duper easy" even in the beginning. I made a couple of bitcoins back in the early days, and it took my laptop grinding away for a total of about a couple of days each (I ran it overnight when I was sleeping).
That's not "super duper easy" when you consider that a Bitcoin was only worth about 50 cents to a dollar. You were lucky if you broke even on the electricity.
Most of the people who made lots of money in the market were not bitcoin miners (though that has probably changed if anybody has half a brain). It was the investors. People who bought bitcoins hoping their market value would go up.
But there's a problem with that, too, see. Last I checked (which wasn't very long ago), it was costing in the neighborhood of around $30 to mine a bitcoin, if you add up the amortized equipment cost, time and electricity. Yet Bitcoins went up as high as $250.
Wouldn't you like to be able to make something for $30 and sell it for $250? Yeah, me too. Of course it's down from that now but it's still selling for about 5 or 6 times what it costs to make. That's a pretty good markup. So people who are making bitcoins TODAY are making a killing. Not just the initial investors (though they did pretty well).
Which of course means more people will make Bitcoins, which means the price will come down, until the difficulty (cost) of making them is not that far from market price.
All you are seeing right now is a bubble. As long as they are selling for lots more than they cost to make, you are going to have an irrational, lopsided market that could crash at any time. But it's hardly a "pyramid scheme". There is lots of opportunity right now for somebody to invest in hardware and make a lot of money... if they do it quick.
Actually you get it backwards. A commodity is something you can actually use. Gold for example is used as currency and is a commodity, since it is used to make jewelry or electronics. Bitcoin is just a currency, you can't use it for anything. If Bitcoins are complacently devalued they are not worth the "bits they are printed on". Commodity that is also used as a currency, retains value if the actual currency is fully devalued. For example after WWII cigarettes where used as black market currency. But once the situation normalized and people started to get real money in their hands and could buy something for it, the cigarettes as currency where useless, but you could still sell them as cigarettes for real money.
About the fake part of Bitcoin, it's only fake as in there is not sovereign nation backing the currency, so what? Any currency is as good as the trust it is put into it by it's users. The currencies of nations tend to devalue too, as the users lose trust in that currency. For example during the perestroika in Russia many people used USD instead of the ruble, because they did not trust the ruble to be stable.
"Isn't there a mechanism for adjusting the difficulty of mining depending on how much mining is done? Wouldn't that mean that the difficulty will go up if the price does, so that they will match?"
Yes, that is one of the things that would serve to bring the cost up to market place. While more miners will also bring the price down to the cost. (Actually, it's not "adjusted" per se. It's built in to the math. The more Bitcoins that are mined, the more difficult they become to mine.)
But my main point was that the market right now is very, very far from that equilibrium. It's completely irrational.
I'd like to see your conversation with the salesperson at a checkout point of a supermarket with you trying to pay for other purchased goods (of matching value) with a bag of potatoes.
It would be the same conversation that would occur were I to try paying with bitcoins.
Which brings us in a rather circular way back to the original point: there is no practical difference between someone accepting payment in bitcoins and someone accepting payment in a bag of potatoes. "Accepting payment in $FOO" doesn't make $FOO a currency, or money or tender of any sort. Criteria for what constitutes a currency is high enough that it disqualifies precious metals, after all. Bitcoin doesn't (yet?) satisfy the criteria for being a currency.
Now, it's possible that in the future bitcoins will satisfy the criteria for being a currency and everyone will trade in it ... then you run into the same problem that we ran into with precious metals and cowrie shells: there is no match between the "currency" and the value it is supposed to represent (which is why precious metals were eventually abandoned as currencies).
Ironically, by following the same model used by precious metals (mining a finite resource at a specified and hard-to-change rate), bitcoins are doomed to be abandoned as currencies too ... that's if they ever get adopted as currrencies - but I'm willing to give it the benefit of the doubt and say that it will one day achieve critical mass and take off, only to be shot down later when it runs into the same problems that gold and silver and diamonds and bronze and tools and cowrie shells and cows and goats and poultry ran into.
(If you'd like to read more email me; I'm about 75% done with a tiny eBook on money and it's development. There will eventually be a bitcoin section in there).
I'm a minority race. Save your vitriol for white people.
It is isn't a pyramid scheme, it is just ruined by speculators. And the worst kind of speculators, the dumb kind that buys gold from vending machines because prices are at record heights.
If you know ANYTHING at all about successful speculation, you know that you buy LOW and sell HIGH. The dumb speculators are however slow as well as dumb and only dive on say speculating in gold when prices are already high. Buy Apple stock 10 years ago. Smart. Buying Apple stock right now. Dumb.
Bitcoin is seen as having a high value right now, like say comic books had a while ago and dumb people think that this is then worth investing in with the logic that if you buy high, you can sell at even HIGHER! And really cleanup!
It doesn't tend to work that way. Instead, you can buy high because smarter speculators are SELLING high and they are selling because they don't think it is going to go any higher. Bitcoin as a anonymous paypal alternative has some merrit. As an investment, not so much. As a currency, none whatsoever. It would be like creating a currency out of comic books or bottle caps.
Fallout fans may be familiar with that idea, it is silly but do you fully understand HOW silly it is? Bottle caps were garbage once. How can you put a real world value on an item someone may at any point find a whole stockpile off, or worse, the machines that make them in the millions? North Korea has its defacto currency, the US dollar. Even loyalty taxes to the state have to be paid in it. NK ALSO had projects to create huge piles of counterfeit US dollars. Some ended up in the rest of the world but the majority of counterfeit US dollars is in NK circulation. NK has flooded its own economy with counterfeit currency they can't even hope to spend anywhere because if you had any brains and a North Korean handed you a wad of dollars you check every note individually.
Almost anything can be used as a currency, and has. Stamps have been used as currency almost exactly as Terry Pratchett described it in one of his latest books. In fact, paper money is an alterntive not that different from bitcoin to using real precious metals as barter counters. Nobody has a need for gold however, it was just for thousand of years convenient to barter for goods with a in between mechanism of gold/silver. I trade you my chickens for X gram of precious metal I have no need off because I know that I can barter that for clothes with that other guy.
ANYTHING will do for that, and has. There have even been cases of shops creating their own low currency for giving chance to small for real currency. You give me your silver coin and I give you produce and a chit saying that you still have some spending power left in this shop.
But what you NEED for a currency to be usable is some stability. Deflation is bad because it causes people to hoard and to much inflation hurts as well because if you pay me now, I will have far less tomorrow. Rampant speculation causing a currency to go rise and fall thousands of percent are useless. How am I going to price my goods when every second the currency has a different value.
Say you are going to sell beer for REAL (and not just as a novelty value, bars can afford to "sell" some beer just for a smile if 99% of the customers buy it for hard cash) for 1 bitcoin you might get within a day get anywhere between a dollar and a 400 dollars.
There is a reason people talk about HARD cash. Hard cash needs to be hard, have a consitent value. Salt worked once because people had a stable need for salt, a stable market existed so it could be reliable used to barter with. Comic books, baseball card, tulip bulbs and bitcoins don't.
It makes no sense to invest in it, you can only speculate in it if you understand what buying low, selling high really means AND until the idiot speculation stops it is even useless as a paypal alternative because you can't mark your products in bitcoins when that goes up and down per minute.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.