I'm tired of this BS about Bitcoin and pollution. So tired that yesterday I wrote this [0]. Of course you might be in complete disagreement with me, but please read it and let me know what you think. Be kind. I am trying to have a good conversation about it, not to impose my view.
It's not BS. The world in general is trying to find ways to be more energy efficient and up pops bitcoin, now using more power than a country of 44 million people. It's ridiculous.
As is your reference on that article - "Most bitcoin mining is using energy at the source that was uneconomical to use for other purposes, because of the loss experienced in transporting the energy to economic centers", which just links to one of your own comments on HN!
The rest appears to be handwaving - "Gold is worse!" or "It'll move to proof of stake!"
(edit: the link to the comment is not the OPs own, but it is an HN comment which just contains an assertion about green energy use)
How do we determine how much/little energy usage is acceptable though? Is it okay for Google to use about as much energy as Tunisia? Maybe Bitcoin provides more economical value than Argentina? How much energy has and is being expended during the mining of all the gold that is just being used as store of value?
(Mostly playing devil's advocate here. I would personally be for strong carbon taxes on electricity.)
> How do we determine how much/little energy usage is acceptable though?
Well, a purely electronic financial instrument that pretty much by definition cannot produce anything, and provides little but an arena for speculation, would seem to me to be a bad thing to introduce to a world that's trying to reduce energy use.
If you want to get into "well people clearly value it", the evidence being the money they pump in, well then any energy expenditure is justified if it is profitable, and this conversation is pointless.
> How much energy has and is being expended during the mining of all the gold
This is just whataboutery. Gold can be a problem as well.
What I meant by "BS" is that most discussions about Bitcoin and its polluting effects are very superficial, and ignore some of the facts that I try to highlight in my post.
> just links to one of your own comments on HN!
No, the comment that I reference on HN is not mine, it's by someone else. BTW, I quite agree with it.
> The rest appears to be handwaving
I don't see why. We have used, and are still using, Gold as store of value. Each year gold pollutes tens of times more than Bitcoin. The ones criticizing Bitcoin should have been criticizing Gold all along; and they should criticize Gold way more than Bitcoin even now.
Mining gold is environmentally problematic, but no new gold needs to be mined when gold is transferred from one person to another. Bitcoin transactions require new blocks to be added to the block chain, and therefore more "mining" must take place.
There is a bigger problem, however. If a gold miner finds a more energy-efficient mining process, they will use it because it is more profitable. No technological improvements make Bitcoin mining more energy efficient (miners are incentivized to expand their operation rather than to mine at the same rate using less power), because the whole point of Bitcoin mining is to prove that electricity was utilized. That means that there is no real solution to Bitcoin's pollution problem, other than scrapping Bitcoin entirely and replacing it with something more energy-efficient (like a distributed ledger operated by a consortium of banks).
Bitcoin's energy consumption is a function of the number of miners, not the numbers of users. Just because more people transfer and use bitcoin doesn't mean more energy is used.
Every transaction requires at least one block (typically several) to be added to the block chain, and the block size limit means that, in fact, energy consumption in Bitcoin is proportional to the number of transactions. Beyond technical details, there is also the economic incentive: miners are paid to include transactions in new blocks, and if there are more transactions (thus higher demand) the fee will rise and miners will consume more power in order to collect the higher fees.
> No, the comment that I reference on HN is not mine, it's by someone else. BTW, I quite agree with it.
Ok, misread that. Either way it's just an HN comment, it's not proof of anything much.
Gold mining is terribly polluting, yep, but your attitude to it is pretty much the definition of whataboutery.
In the spirit of actually answering your question, first let’s just say that complaining about critics treating something named BitCOIN by its creators and something that has been promoted as an alternate currency from its creators to at least a decade of its supporters as a currency (Its the top cryptoCURRENCY) as currency is unfair to say the least.
The whole shift of calling it a store of value as opposed to currency that Bitcoin supporters have started over the past couple of years is very clearly a post hoc justification for its existence.
The problem, however, is that BTC isn’t even a very good store of value. Golds pricing has never collapsed 10x over the matter of months and nor has it risen 5-10x over the matter of months. As a result BTC isn’t even a very good store of value.
It’s currently, at best, a pure speculative asset. It’s like the GME trading from a week ago taken to its logical extreme. A speculative asset that has no relationship to its underlying fundamentals. Much like how GME’s price was completely divorced from any fundamentals of the company, BTC is like saying let’s do that thing, but why even bother with tethering GME the stock to an underlying company. Let it just exist on its own.
That’s what BTC is at the moment. GME if GameStop didn’t exist.
I should have explained the "BS" part at the beginning of my comment in a different way.
I think that comparing Bitcoin energy consumption with a country (it used to be Chile, now Argentina), while technically correct, misses the big picture.
I also avoided a discussion on the true cost of having a global currency like the US$, which one might argue pollutes far more (military, etc).
> I think that comparing Bitcoin energy consumption with a country (it used to be Chile, now Argentina), while technically correct, misses the big picture.
I think a comparison like that actually is the big picture.
You'll have a hard time convincing people that Bitcoin is OK by comparing it gold since most people who think Bitcoin is wasteful would also think mining of gold is very wasteful. Moreover, I feel like you're making the mistake you highlight in your first paragraph: conflating 'mining' in gold with 'mining' in BTC. Bitcoin mining is necessary for transactions to occur, not so for gold. It's a very foggy comparison as far as I can tell.
Your comparison to VISA links to a source that says that better comparison is Fedwire and that it only settles 1% of the money that FedWire does. So Bitcoin significantly loses to VISA in transaction count and FedWire in value settled. So I'm not convinced by your argument. And how much energy does Fedwire use? Presumably much less than VISA.
It would be more apt to comparing the cost of transacting Bitcoin to that of recycling gold instead of mining it, which is not zero, but is substantially less than mining and that's where again, Bitcoin takes another lump. Recycled gold is useful; it's a precious metal obviously and one immune to most forms of oxidation, so once reclaimed, it can be used again in the next generation of smartphones and what have you.
Gold is however undoubtedly a good comparison pick for Bitcoin; it's something with a few natural pros on it's side that's been hideously overvalued for largely irrational reasons. Like... this metal is advertised as the "right" basis to back currency but I also have some of it in nearly every gadget I own? Then how rare can it possibly be if a small amount comes in a $15 audio decoder for goodness sakes!?
Impressed. I didn't know Bitcoin transactions accounted for such huge volume almost as large as MasterCard. I use MC almost every day for almost everything. Is there people like, entirely living with BTC?
Looking at the transaction amounts isn’t very informative, as one is primarily used as a speculative asset, the other two are actual payment methods. A better comparison would be looking at daily trading volume on the stock market.
To help put the difference more in scope, Visa and MasterCard each did over 100 billion payment transactions (nearly 300B combined) in 2019[0], yet Bitcoin still is over 3 orders of magnitude lower at around ~130 million (350k daily average x 365 days). The key distinction is the fact that the average Bitcoin transaction (currently ~$100k) is far higher than the average credit card transaction.
I think it's more like I can create a currency, say that one myCoin is worth $5B, do 2 transactions of 1 myCoin and I can claim that I handle $10B/day.
[0]: https://simon.medium.com/bitcoin-and-pollution-the-definitiv...