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Energy Cost of 'Mining' Bitcoin More Than Twice That of Copper Or Gold (theguardian.com)
An anonymous reader quotes a report from The Guardian: The amount of energy required to "mine" one dollar's worth of bitcoin is more than twice that required to mine the same value of copper, gold or platinum, according to a new paper, suggesting that the virtual work that underpins bitcoin, ethereum and similar projects is more similar to real mining than anyone intended. One dollar's worth of bitcoin takes about 17 megajoules of energy to mine, according to researchers from the Oak Ridge Institute in Cincinnati, Ohio, compared with four, five and seven megajoules for copper, gold and platinum.
Other cryptocurrencies also fair poorly in comparison, the researchers write in the journal Nature Sustainability, ascribing a cost-per-dollar of 7MJ for ethereum and 14MJ for the privacy focused cryptocurrency monero. But all the cryptocurrencies examined come off well compared with aluminium, which takes an astonishing 122MJ to mine one dollar's worth of ore. [...] To account for the wild fluctuations in cryptocurrency price, and therefore effort expended by miners, the researchers used a median of all the values between January 1, 2016 and June 30, 2018, and attempted to account for the geographic dispersal of bitcoin miners. "Any cryptocurrency mined in China would generate four times the amount of CO2 compared to the amount generated in Canada," they write, highlighting the importance of such country-dependent accounting.
Other cryptocurrencies also fair poorly in comparison, the researchers write in the journal Nature Sustainability, ascribing a cost-per-dollar of 7MJ for ethereum and 14MJ for the privacy focused cryptocurrency monero. But all the cryptocurrencies examined come off well compared with aluminium, which takes an astonishing 122MJ to mine one dollar's worth of ore. [...] To account for the wild fluctuations in cryptocurrency price, and therefore effort expended by miners, the researchers used a median of all the values between January 1, 2016 and June 30, 2018, and attempted to account for the geographic dispersal of bitcoin miners. "Any cryptocurrency mined in China would generate four times the amount of CO2 compared to the amount generated in Canada," they write, highlighting the importance of such country-dependent accounting.
Can't speak for ethereum, but in the case of BC this is entirely intentional. Since the computational complexity of the BC transactions grows with time, it's unavoidable that the energy-usage is also going to increase at the same time. This, coupled with a finite cap on the total amount of BC is also what makes BC deflationary by design, which can be a good property for an investment but is overall a terrible property for a currency.
To claim that this is not intentional when it stems from the way the currency & cryptography is set up is just ridiculous.
"It is the business of the future to be dangerous" -Alfred North Whitehead
The energy cost doesn't fucking matter. The purpose of mining something is not to save energy. The purpose of mining something is to make money, regardless of whether you're mining gold, diamonds, or cryptocurrency.
So, the important fact is not how much energy it costs to mine the crypto; the important fact is does the crypto mining process create a net gain in money? If it makes money, that's all that matters.
How much energy is spent trying to mine gold and failing to do so profitably, or even entirely? I'm guessing most.
The difference is that the average schlub sitting at home mining bitcoin can't use the energy they have access to in order to mine gold, etc. so from their perspective it's a non-starter to even consider producing gold instead. Never mind the additional capital costs of mining gold, unless you're going to pan for it on public land.
All this wasted energy sounds like an argument for some stiff taxes on energy. I honestly see no other way to discourage people from wasting so much energy on these things. I'm all for cheap energy, but if people start wasting it like that, just because it's cheap, maybe the cost for energy should include its true cost, which includes the cost of repairing the damage it cases.
Of course that also means we should then invest those taxes into solutions for the problems created by this energy waste. Either cleaner energy technology, or carbon sequestration.
(Also, how is aluminium mining even economically viable?)
It does not matter if it uses more energy. It matters if the cost is worthwhile. Look at e.g. aluminium. That uses a shitload of electricity to to turn Bauxite into aluminium. Yet people still make money of it.
Don't fight for your country, if your country does not fight for you.
So the colleges get access to what amounts to a supercomputer
I get some crypto. I was doing this for nearly a decade before they added the crypto so it is either actual money in the future or just another way to keep score.
The last bonus is I had a stack of old machines in the garage collecting dust. A fresh OS install and BOINC and now they are set to wake up at night and crunch numbers to keep the house warm. It doesn't even matter that they are very outdated, any number crunching is a bonus, and the money that would have been spent anyway for the exact same thing. One day when I get motivated I'll rig up a thermostat that turns the software on and off so I can have better temperature control.
Energy Cost of 'Mining' Bitcoin More Than Twice That of Copper Or Gold
Well, yeah, but fake pyramid scheme "currencies" have more than twice the fake pyramid scheme coolness factor than either copper or gold, so there!
If Bitcoin was only mined with off-peak electricity, making Bitcoin the only sustainable currency on the planet.
"Off-peak" does not mean sustainable. Most off-peak power in America comes from gas or coal.
Most bitcoins are mined in China. China is also the biggest aluminum producer, producing more than the rest of the world combined.
There are 3.6 megajoules per kwh. Wholesale electricity in China is about 4 US-cents per kwh.
So if aluminum really needs 122mj = 34 kwh = $1.35 worth of electricity, to make $1 worth of aluminum, then the Chinese smelters are either getting really low prices on power, or are getting subsidies. So Trump was right.
The 17 mj for $1 worth of bitcoin costs about 19 US-cents.
What intrinsic value does gold have?
This question is trivially answered with google, or even just Wikipedia. It has numerous applications which have nothing to do with how shiny it is.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
It has numerous applications which have nothing to do with how shiny it is.
But only 10% of the mined gold is actually used for those applications. The rest is stored in vaults or converted to jewelry, for no other reason than that's it's shiny and perceived to be valuable.
Easily proven. If I put a bar of gold in your path you will pick it up. If you saw you wouldn't, you are lying. Even if you yourself see no value in gold, you realize that other people do, and therefore you realize you could sell it for profit. QED. The intrinsic value of gold is the perceived value of gold.
Seven puppies were harmed during the making of this post.
Maybe I wasn't clear. The whole concept of value is man made. Those applications are for human benefit. There is no intrinsic (which implies natural) 'value' to gold or anything else.
Granted, but unless you aren't human, that's a ridiculous objection.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
'wasted energy' implies there is no benefit or use in bitcoin mining.
Different people have different ideas of what is beneficial or useful - needless to say, many people clearly find mining bitcoin beneficial and useful otherwise they wouldn't be doing it. As a get-rich-quick scheme or for ideological views of currency and traditional banking - either way, people are doing it for a reason.
So who are you to say they are wasting energy?
But only 10% of the mined gold is actually used for those applications. The rest is stored in vaults or converted to jewelry, for no other reason than that's it's shiny and perceived to be valuable.
And presumably, like diamonds, that if you lock it up it continues to be valuable. But I propose that the intrinsic value of gold will continue to rise up until we get into serious asteroid mining, because of those very real practical applications. And locking up gold is essentially betting that this is the case. I personally agree, but my crystal ball has been cloudy before. Still, they're not making more gold around here.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
That's true, but that doesn't mean that gold has zero intrinsic value, only that the intrinsic value is much lower than the current market price.
Future energy consumption should drop for BTC, so that energy cost will probably put it below precious metals. Then people can stop bitching about BTC energy use.
Feel free to look up the word "intrinsic"
It's a lumpy world; it means essential, but in finance it's used to mean calculated value, not market-based. And if we're talking about an element, it means what it's worth based on what it's good for. The fact that people will pay for it for jewelry actually is part of its intrinsic value. I'm talking about it in the sense of the things that it's better at than other metals, like resisting corrosion, or reflecting heat. I think its value as jewelry is actually likely to fall over time, because it's old and we'll make new and more impressive-looking things using coatings with nanoscale features. I think its value in manufacturing will likely increase if/when we substantially increase our activity in space.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
That's true, but that doesn't mean that gold has zero intrinsic value, only that the intrinsic value is much lower than the current market price.
Correct. And the market price has been much higher than its 'intrinsic' value for as long as gold has existed.
What intrinsic value does gold have?
Gold has a ton of practical applications and if gold was more plentiful (and therefore less costly), it would have a ton more practical applications. Most of the stuff we use copper for (like wiring in houses), gold actually works better, it's just too expensive to use for those applications. Because of the high price of gold, we instead use it sparingly and only where we absolutely have to, but even if the investment and jewellery applications of gold disappeared tomorrow, gold would still have considerable value.
Maybe I wasn't clear. The whole concept of value is man made. Those applications are for human benefit. There is no intrinsic (which implies natural) 'value' to gold or anything else.
The value of everything is manmade. Even food only has intrinsic value because humans can eat it to get energy. Most stuff eventually comes down to "can I use it to get food". Gold will continue to be useful to get food as long as it has industrial and electrical uses. Does scarcity and hoarding affect the price, probably, but there are still plenty of marginal industrial uses of gold that would prop up the price if it started falling too much.
So, if the countries that have ample renewable power, like Germany f.ex. instead of paying Switzerland and Austria to take the surplus on some days off their hands, they could just mine bitcoins instead, simpler than storing it in batteries or generating hydrogen.
It means, belonging naturally, essential. You could say naturally essential. Gold is very convenient, not essential. Food, water, shelter is essential, to more than just humans. That's real intrinsic value.
“He’s not deformed, he’s just drunk!”
How much would gold be worth if only priced in intrinsic value?
It's not that useful of question, and difficult to answer. Chemically gold is extremely useful. If there were no scarcity we'd use a lot more of it. It was discovered fairly recently that gold is a good catalyst for converting carbon monoxide to carbon dioxide. (effectively a different way to burn "wood gas")
“Common sense is not so common.” — Voltaire
Most of the stuff we use copper for (like wiring in houses), gold actually works better,
No, copper conducts electricity better than gold. Only silver is slightly better than copper. In addition, copper only weighs half of gold, has slightly higher melting point, and is twice as strong, making it overall much superior for wiring than gold. The big reason for using gold instead of copper in some electrical applications is that gold doesn't tarnish, but for most cases, you only need a thin gold plating to benefit from that.
Just wondering.
---- The above post was generated by the Turing Institute. Maybe.
Even food only has intrinsic value because humans can eat it to get energy.
Speciesist! :-) All living things need food to survive. We use and hoard gold to get sex. The primary objective is reproduction.
“He’s not deformed, he’s just drunk!”
Aluminum is made where electricity is cheaper than that.
However the more obvious problem with this analysis is that $1 worth of Aluminum is a large piece that is actually useful to make things, some of which cost many orders of magnitude more than $1. $1 of gold is pretty tiny and difficult to make into anything worth much more than a few dollars. Also if Bitcoin crashes it's energy cost per dollar goes up a lot.
the researchers used a median of all the values between January 1, 2016 and June 30, 2018
Wait a minute.... Averaging by median starting from 2016 is misleading. The COST TO MINE is not fixed. The cost to mine is a function of difficulty, and the difficulty is affected by hashrate --- how much hashrate people are willing to turn up is based on value but has steadily increased over time.
If you want to "average" the value of a BTC, then you should be doing a weighted average where the weight value is the hash rate: the price of BTC at times when the hashrate were higher are more important for determining the worth ---- or just plain evaluate RECENT values that match up with the recent use of mining power and recent mining proceeds, but anything before November 2017 is too old to be looking at.
Every time I point out that crypto currency is a colossal waste of energy often generated by fossil fuel, I get attacked by hordes of guilty miners.
Privacy and low friction international transactions are the big advantages to crypto currency, but there are other ways to accomplish those goals without destroying the ecosystem and making the fossil fuel industry rich..
Greed is the root of all evil.
Food, water, shelter is essential, to more than just humans. That's real intrinsic value.
All value is extrinsic, not intrinsic. One who has abundant food to eat, water to drink, and a nice place to stay will not place any great value on additional food, water, or shelter. The fact that humans need some amount of these essentials is an intrinsic property of humans. The fact that these things are needed by humans is not an intrinsic property of food, water, or shelter. The facts that they can satisfy thirst and hunger and protect one from the elements are intrinsic properties, but this only gives them value so long as the means of fulfilling those needs remain scarce.
"The state is that great fiction by which everyone tries to live at the expense of everyone else." - Bastiat
All value is extrinsic, not intrinsic.
“He’s not deformed, he’s just drunk!”
Gold is beautiful. Yes, that is a valuable attribute.
/. moderation sometimes falter. The same comment was modded informative/insightful just a year ago but today I guess different people are moderating and they find the current economical system viable and our governments impeccable.
They are wasting energy because that's the explicit purpose. New bitcoins are awarded to the people doing the most pointless calculations, which wastes energy. You could award those bitcoins based on something more productive than that.
There is no such thing as "intrinsic value". There is only what others are willing to pay for it.
A hundred years ago, the thought of anyone paying money for horse manure was unthinkable. It had value as fertiliser, but nobody handed over money for something that was freely available on many streets. People pay (a small amount of) money for it today.
sub f{($f)=@_;print"$f(q{$f});";}f(q{sub f{($f)=@_;print"$f(q{$f});";}f});
If I put a bar of gold in your path you will pick it up.
...and at the earliest opportunity, I will sell it to someone else in exchange for cash which, unlike gold, is actually useful to me.
sub f{($f)=@_;print"$f(q{$f});";}f(q{sub f{($f)=@_;print"$f(q{$f});";}f});
Ideally not manufacturable - this means elements are ideal
...or counterfeitable. Gold became especially useful as a currency when touchstone was discovered.
sub f{($f)=@_;print"$f(q{$f});";}f(q{sub f{($f)=@_;print"$f(q{$f});";}f});
Nothing wrong with facts. Nothing wrong with opinions. But opinions presented as facts is another thing entirely.
You're missing the point. Using large amounts of energy cycling through calculations is a side-effect, not the purpose. The purpose is using proof of work as the core mechanism to bitcoin's decentralised trust model.
There are other mechanisms that could be used like proof of stake or even proof of importance - but those trade different pros and cons and aren't as proven as PoW at this point.
Using large amounts of energy isn't the problem. Using large amounts of fossil-fuel energy is. Many miners are setting up camp in Iceland where they can take advantage of geothermal energy and environmental cooling.
The solution here isn't "Use less energy because I didn't understand why you need to use so much". It's "use energy more responsibly".
The purpose is using proof of work as the core mechanism to bitcoin's decentralised trust model.
Yes, but it's the proof of pointless work. Nothing useful is being done with that work. It would be very different if all that massive work accomplished something useful.
Using large amounts of energy isn't the problem. Using large amounts of fossil-fuel energy is.
Sadly, at the moment, the vast majority of energy in the world still comes from fossil energy. Energy used to win bitcoins is not being used to heat the homes of the elderly or increase food production in poor countries. If bitcoin miners use clean energy, that's fantastic of course. But if they buy clean energy that could also have been used to replace fossil energy, they are still slowing down the reduction of fossil energy.
I've heard many miners are in China using energy from big hydro plants, which is clean, but thereby also not being used for the many other purposes for which China needs energy. And despite their investments in clean energy, China is still burning a lot of coal.
You could use that for smelting aluminum, grinding wheat into flour, or other similar processes as well.
I know what I would rather have.
Iceland is already home to large smelters like Alcoa.
Not everyone buys used and dirty tulips and beanie babies. Not much of a market for those items. Whereas dirty gold - oh wait, gold never tarnishes!
Seven puppies were harmed during the making of this post.
Or you could hold on to it, realizing that it will always be a store of value and can always be sold for cash, anywhere in the world.
Seven puppies were harmed during the making of this post.