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Energy Cost of 'Mining' Bitcoin More Than Twice That of Copper Or Gold (theguardian.com)

Posted by BeauHD on from the electricity-per-dollar dept.

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.

13 of 165 comments (clear)

  1. No surprise here, it's designed that way by Kiuas · · Score: 5, Informative

    suggesting that the virtual work that underpins bitcoin, ethereum and similar projects is more similar to real mining than anyone intended.

    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
    1. Re:No surprise here, it's designed that way by Gr8Apes · · Score: 2

      Since the computational complexity of the BC transactions grows with time

      That's not how it works. The complexity grows with the mining capacity. And mining capacity grows (and possibly shrinks) with price of bitcoin, mining reward, and electricity. The mining reward consists of a fixed reward per block (halved every 4 years), plus a fee per transaction (determined by market mechanism)

      You're right - it doesn't grow with time, it grows with transactions. It has nothing to do with the mining capacity, although transaction cost might increase as the capacity goes down, and the time to complete transactions will go up once capacity thresholds are reached. The whole thing is a virtual house of cards.

      --
      The cesspool just got a check and balance.
    2. Re:No surprise here, it's designed that way by religionofpeas · · Score: 2

      You're right - it doesn't grow with time, it grows with transactions. It has nothing to do with the mining capacity,

      The computational complexity is adjusted based on mining speed so that there is (on average) 1 block mined every 10 minutes. If mining capacity goes up, then more blocks are found, and difficulty is increased. If mining capacity goes down, difficulty is decreased.

      The amount of transactions only affects complexity indirectly. As there is more demand for transactions, the mining fee goes up (not linearly, because the fixed block reward is much more dominant right now), which makes mining more attractive, and as mining gets more attractive, the capacity increases, which increases difficulty.

  2. The difference by alvinrod · · Score: 2

    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.

    1. Re:The difference by alvinrod · · Score: 2

      That's no different than buying stock in any company though. You just own the enterprise that does the work, which doesn't necessarily mean that any more or less work will be done as a result of that change of ownership. Maybe the closest thing would be running a high-frequency trading algorithm to spend electricity to attempt to gain value through arbitrage trading, but that market is already pretty saturated.

      Bitcoin mining isn't difficult to understand. If people can get paid more for a bitcoin than it costs them to mine it in purchased electricity (and other capital investment such as the hardware to mine on) then they'll do that unless there's something more valuable they could do with that electricity instead. When the value drops, it's not financially worthwhile for people to make that exchange, so they stop doing it. It's no different than oil wells which have been set up but then shut down because the price per barrel is too low to justify the cost of extraction.

  3. All this wasted energy by mcvos · · Score: 5, Insightful

    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?)

  4. If it is worth it to you, who cares. by Charcharodon · · Score: 3, Interesting
    My personal favorite is Gridcoin. Your CPU/GPU time are being used to provide cycles for research on the projects of your choice through BOINC (Berkeley Open Infrastructure for Network Computing).

    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.

  5. Re:Meaningless comparison by necro81 · · Score: 5, Informative

    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.

    It is worth pointing out that aluminum is eminently recyclable, too. In fact, it takes only 5% as much energy to recycle existing aluminum than to refine new aluminum from ore. Because of this, most of the aluminum produced in the history of humanity is still in use. One could think of that energy as a one-time cost, unlike cryptocurrencies, where there is no end in sight.

    Most of the energy cost of refining aluminum comes from the fact that aluminum, unlike gold, is bound up in various oxides. To break the oxides and purify aluminum metal requires massive amounts of electricity - it's a lot like a battery in reverse. Until we had access to large amounts of electricity, the alternative means of purifying aluminum were so costly and time consuming that aluminum was treated like a precious metal. Napoleon III had aluminum tableware to flaunt his wealth and power (which is just laughable today, especially when you consider how soft pure aluminum is). The tip of the Washington Monument in D.C. is aluminum. At the time (1884), it was the largest chunk of aluminum in existence.

  6. Well, yeah by cascadingstylesheet · · Score: 2

    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!

  7. Re: All for fake money by drinkypoo · · Score: 2

    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.'"
  8. Re: All for fake money by Wycliffe · · Score: 2

    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.

  9. Re: All for fake money by religionofpeas · · Score: 2

    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.

  10. Re:Great! by Artem+S.+Tashkinov · · Score: 2

    /. 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.