All this crypto currency mining and speculation is a perverse form of wasting resources. While most people talk about energy conservation others keep buying hardware they don't need to burn electricity 24/7 so they can "create" made up resources to sell to other speculators online.
And let's quantify the waste of resources by storing vast buckets of useless data people put on the internet. Snapchat, Instagram, Facebook, Google Plus. What about the PoP's the house the IP transit traffic? How about the thousands of advertisement/Spam companies that just add to the noise? Telemarketers and their like (legal and not).
Surely there is a better argument to be made here. Speculative "mining" on consumer purchased hardware is hardly near the top of global wasted resources.
Yes, pretty much everything in our current economy is extremely inefficient. In terms of waste, cryptocurrencies are peanuts.
- Facebook ad spending is a waste; do companies actually get a ROI on all the money they give to Facebook? They don't actually know! In the grand scheme of things it's a complete waste. If Facebook didn't exist, then companies wouldn't be forced to pay it money just to stay relevant; they could focus their funds on actually improving their products instead. Not to mention the enormous amount of otherwise productive human hours that Facebook is responsible for wasting every day. That's not even counting all the other social networks.
- Gambling; $240 billion per year; the money does nothing for society. The amount of money spent on gambling every year is MORE than the total market capitalization of all cryptocurrencies added up together. So even if you think that buying a cryptocurrency is gambling, your odds are much better (and improve as you do more research). If people stopped gambling on horses and lottery and started gambling with cryptocurrencies instead, the total market cap for cryptocurrencies would be much higher than it is now.
- Sports; the sport industry makes $75 billion per year. Yes it's entertainment. So is trading cryptocurrencies.
- Tobacco industry makes $35 billion in PROFITS per year. Doesn't add anything positive to society. I think that if you were to add up all fees (profits) ever charged for transferring cryptocurrencies, you wouldn't get anything close to $35 billion.
> In terms of waste, cryptocurrencies are peanuts.
I don't have a link for you, but just yesterday I read a headline saying bitcoin mining accounts for 5% of the UK's energy expenditure. That's not peanuts.
Now, even if that headline is wrong, here's a site that offers a Bitcoin Energy Consumption Index Chart (https://digiconomist.net/bitcoin-energy-consumption) and they say that bitcoin accounts for 0.08% of the world's electricity consumption. That seems absurdly high.
Maybe for a small subset of the total advertising spend, but for the big players, they can't always be sure which part of their revenue can be attributed to Facebook and which part can be attributed to other sources or which part can be attributed to their sheer scale (everyone knows about Coca Cola, but that won't stop the company from spending big on advertising). Companies like Procter and Gamble started scaling back their Facebook ad spend; they had no idea what their FB ROI was until they actually started scaling back and they realized that it was essentially $0.
If they can't measure their ROI, big or small the players, it's their fault, not Facebook. It's not that hard to deploy direct marketing campaigns and monitor conversions. It's actually the ABC of online marketing.
I don't think that lead generation ad spending on facebook represents a small subset of the total advertising spend on there. Sure, there are always going to be monolithic companies that market poorly on facebook, but from my experience this is not the norm, and a lot of companies and startups are marketing on facebook without blindly throwing money at it.
So your argument is because it's not the "top of globally wasted resources", we should ignore the waste? It's a large enough industry that GPU stock and prices are hugely affected by it, and its much more conventionally wasteful than the services you're trying to compare it to. Plus if the goal of cryptocurrency is to become more mainstream, this is a super important argument to make against it in its current form.
> So your argument is because it's not the "top of globally wasted resources", we should ignore the waste?
Sometimes this argumentation is totally valid. For example, it's utterly
stupid reasoning when one uses less water at home "to save fresh water and
environment", because households use half of the fresh water used by industry,
and agriculture uses twice as much as the two combined. Whatever inconvenience
the person trying to save the environment this way puts themselves into, the
effect is capped at about 10% of total fresh water consumption. It's an effort
applied in the wrong place.
Saving water or such is a mentality and you might not be able to measure it through a simple people * saving/person. If everyone's wasteful there'd be way less incentive to nudge industries into changing. Where would the change be coming from?
More philosophically speaking, if there's an equation of life with all the variables and we apply it here by taking all the "saved effort thanks to not promoting water consciousness in regular households" and dumping it into whichever area we'd think is ideally efficient, it wouldn't be _too_ surprising if holistically, the result comes out less favorable of this approach vs just telling regular folks to save water. For example, consider that it might take tenfold the effort to convince an agricultural company CEO to change approach; if ninefold the effort doesn't reach the activation energy to convince such person then you're better off telling nine people to stop the waste.
In general, I have the feeling that many decisions can wrongly be made to look stupid if we recalculate it using the select few variables we care about.
> If everyone's wasteful there'd be way less incentive to nudge industries into changing.
Ah yes, "let's show them not to be wasteful". Ever heard of the activities of
making industries not to use child labour or improve working conditions of
factory workers? If they didn't work, why do you think this one would?
> Where would the change be coming from?
Certainly not from social movements. They rarely have enough power to make
a single company change, much less a whole industry.
Saving water can still be a false mentality. For example, my wife's hometown has poor water infrastructure. On vacation days everyone is home and nobody saves since the source is plenty. By noon the infrastructure is overloaded and gives out until evening. If people were more frugal everyone could have water all day.
I could be completely wrong (I don't fully immerse myself in cryptocurrency) but isn't mining coins way more heavily intensive on a CPU and overall power consumption than simply passively storing a lot of personal data?
I remember a couple of friends wanting to buy some powerful machines to mine bitcoins a few years ago, and they had to actually calculate their electricity bill to make sure they weren't losing money.
That's quite a ways from storing Instagram pics.
The argument is not about individual intensity, but about absolute numbers. Millions of people on facebook/google/twitter compared to few crypto miners.
Instagram et all provides humans with a great deal of value compared to bitcoin though. Rather than hashing random things they allow communication and entertainment.
The energy spent to facilitate these services are incidental to the work being performed; the total energy spent is a function of the task being accomplished. "Proof of work", on the other hand, is wasteful by design, which is obvious when you consider that "the work" itself is not useful, all that's useful is the assumption that the cost of wasting energy is too great to be worth it for a malicious actor. That isn't to say that POW cryptocurrencies themselves are useless, but they are certainly wasteful. An aversion to waste is literally the security mechanism.
Why isn't the current argument valuable unto it self? We don't need to equate it to anything in order to measure it's worth (or lack there of). It's a valid statement that can be discussed. If you want to do the same for other data, go for it, but in another conversation.
I wish more people would talk about this. It seems like a completely ignored aspect of cryptocurrency. It's not even just the electricity but the raw materials that go into all these GPUs that are being bought up (to the point of real scarcity and crazy price hikes), and tossed away when a more performant chip comes out. Like you say, it is seriously perverse.
> It seems like a completely ignored aspect of cryptocurrency.
I don't think it's ignored at all. It's covered in Bitcoin's FAQ because it comes up pretty often. Also some folks have tried to create coins that use something other than a PoW. Some have created coins whose PoW has independent utility (XPM: cunningham chains of primes).
> raw materials that go into all these GPUs
Well, thank goodness the GPUs have independent utility. If you want to be concerned about waste, the ASICs are generally much less useful after difficulty increases than GPUs.
> seriously perverse.
shrug people every day "waste" global resources on things that I think are totally worthless. You might see bitcoin and friends as similarly worthless but if absolutely nothing else it does seem like it has real utility for making remittances more affordable.
Last time I looked at the like profit "mining" ETH (a couple of people at work go on about it endlessly so I thought I'd check the maths) with my current hardware (a pretty decent single GPU and a couple of reasonable CPUs) and the price I pay for electricity I could net about $100 in a few months. That just isn't worth the potential hassle (setup, monitoring, keeping mining clients up-to-date, leaving the main desktop machine on full blast 24/7 heating up the room in summer for a start, and the profit calculation didn't include anything regarding extra wear-and-tear) to me.
You can talk about it all you want. I don't think anyone has begun to come up with a realistic solution. You can't make it against the law to mine, so what else is there?
Plenty of people talk about, issue is people are so locked into their profit motives that they reject dissenting statements like a hot poker to the skin.
Except those are all good things, more demand in this space will drive more competition and force manufacturers to push the energy saving capabilities of chips further in order to stay competitive. Raw materials can be recycled, we're not dealing with finite resources here.
Then again it could all just be a bubble, in which case yes there will be a lot of waste but the market will correct itself. The problem is cryptocurrency has real value, it takes real computing power to process and once it's processed it's very secure (therein lies the value) so I don't think cryptocurrency is going away
You need to slow down, big fella. By this same argument, all data processing by Google, Facebook, Amazon, and the like are all wasted resources. Burning CPU time on AI research is wasted resources. Using Excel is wasted resources.
Bitcoin is a transaction processing platform, the success of which is unfortunately limited by severe volatility issues. Many of these altcoins are designed to process arbitrary data, control ownership/identity, etc. Yes, there are plenty of pump and dump schemes, but you're talking out of your ass if you're trying to generally equate the usage of CPU time with "wasting energy."
I have a conspiracy theory that cryptocurrencies have been created by security agencies to conduct massively parallel calculations (mainly to break crypto) with costs offloaded onto the private sector.
"All this crypto currency mining and speculation is a perverse form of wasting resources"
It is not a waste because we extract economic & social worth from cryptocurrencies. Same thing with cars: they waste 97% of their fuel energy but we tolerate them because they provide obvious economic advantages. Also see: http://blog.zorinaq.com/bitcoin-mining-is-not-wasteful/
I was under the impression that making use of the otherwise 'wasted' compute cycles was the purpose of Ethereum - to allow people to throw 'useful' problems into the fray as people mine?
You're partially right. But "wasted" compute cycles refers to time that your CPU sits idle. I think the argument here is about energy usage. So sitting idle is not the same as running other people's computations.
Or conversely big players will pony up for larger operations to exploit marginal inefficiencies and other economies of scale, which is what seems to be happening.
Additionally you're assuming the only motive behind mining bitcoin is the value of bitcoin, effectively ignoring realities like, e.g., that entities use it to avoid capital flight regulations.
That's not self-regulating; environmental harms of increased electricity usage and elements usage in hardware is an externality that isn't always captured by the market.
Question: Are the resource demands of the entire world banking system a perverse use of resources? If bitcoin supplants a large chunk of that system but in doing so uses less resources overall...?
Couldn't that cheap renewable electricity be transmitted and used elsewhere if the miners weren't using it?
The disparity in energy use is so large that even if Bitcoin mining emitted only 1% of the CO2 per kWh that normal energy users do, it would still be far ahead.
Yes, it does. The figures are out there. Bitcoin is absolutely tiny on the scale of global finance, so the denominator is extremely small. Not having employees doesn't save it.
The lightning network may address this specific concern. I.e. bitcoin may become primarily a settlement mechanism for a much less resource hungry payment handling protocol/layer.
Humans are involved in banking transactions too, don't discount the carbon footprint of the collective of bankers and bank tellers.
Those people won't go away if we eliminated the whole banking system, but their carbon footprint will not have been wasted on the tracking and transfer of assets!
A single bitcoin transaction uses about as much energy as the average American uses in 10 hours. As long as those bankers are doing at least a couple of transactions per day, they still come out ahead.
"They get more done" =/= "They do more things" =/= "They are more efficient"
There is downward pressure on the transaction volume of bitcoin for bitcoin users, because each individual transaction costs so much. This is not exactly an advantage of Bitcoin, I'll admit, but there are some people who will consider Bitcoin a success if ultimately it is only used for larger settlements between payment companies (they would prefer to see Bitcoin is not involved in micro-transactions, they would raise the tx fees to make this use case impracticable.)
All I'm saying is, don't look at Bitcoin handling an average of 7 transactions per second and say "that's less efficient" because your average Bitcoin transaction is currently trending toward being significantly more complicated than your average credit card transaction.
(And even after the recent improvements and pricing hype, I'm not actually betting on Bitcoin myself.)
The BTC system, by design, is unsuitable for trustless person-to-person transactions in the form of Point-of-Sale. Every merchant who operates Bitcoin is trained to know that the transaction is not over until it's mined and in a block, and it's really much safer to wait at least a few blocks.
So if you're selling coffee, maybe you don't worry about it because absolutely nobody is waiting 30 minutes for their cup of coffee, and if someone defrauds you more than twice you'll surely remember their face. By then you're still only out ~$10, and the cost of each attack is high, and likelihood of success is non-zero but fairly low. So you can eat the loss for the cup of coffee, sure, but this is definitely not a great sales pitch for Point-of-Sale system at BestBuy or basically anywhere else.
Ethereum, on the other hand, mines a block on average every 14 seconds. You could realistically be safe and use that in a Point-of-Sale system. (And I'm not the expert, there may be even better systems than Ethereum. But don't say Visa... :-)
The magnitude of the difference is so huge that I don't think it matters how complicated a bitcoin transaction is. It's something like a factor of 10,000 at the moment.
And I think either way, my statement that the question is based on faulty assumptions is correct. If bitcoin supplants a large portion of the financial system then the energy use will be ridiculous. If bitcoin's energy use is kept low by limiting it to large settlements between payment companies, then it won't supplant a large portion of the financial system.
I don't think that's a given. You're assuming that interest in mining will continue to grow at the same exponentially increasing rate forever, but that would most likely require the price to continue rising forever too. I don't think either of those scenarios sounds at all realistic. The bubble will eventually burst, but the blockchain will continue on.
Bitcoin price can drop to $1000 tomorrow and many miners will lose interest on the following day, but the difficulty is what governs how much work is required to put a block onto the end of the chain; not the number of transactions. When the difficulty drops, (yeah it will bring some miners back). In this way, it is extremely beneficial that the price drops for the viability of the network. And sure, that is scary for speculators who may or may not understand it, but this isn't a frozen banana stand, it is a brand new monetary system. There is tons of risk involved for stakeholders.
As solutions are implemented that make it easier to include more transactions in a single block, or to safely defer publishing the transactions into a block at all until some later date when there is less friction (SegWit does this?) the number of transactions that Bitcoin may process per second will rise, but the difficulty/hashrate are not a factor in this calculation.
The price of bitcoin is what has driven the interest in mining, and the explosion of difficulty is what follows from that based on how the protocol is designed to work. These variables are not in any way dependent on transaction volume by number or complexity of transactions, though.
You can absolutely increase or decrease the throughput of transactions handled by the network without necessarily having any dependent effect on energy usage, hashrate, or difficulty. (We could have a fine blockchain with only 5-10 people doing the mining, and it would almost certainly be able to handle just as many transactions, but there are quite a lot more people interested than that.)
Bitcoin can never and will never be a fraction of the efficiency of the modern world banking system, and it can never and will never be able to handle the number of transactions. While you could argue that updates and changes over the years might be able to mould Bitcoin into an efficient transaction network, at that point it would not be Bitcoin anymore.
VISA is capable of handling 56,000 transactions per second [1] while Bitcoin is capable of handing a measly 2.5 [2]. Bitcoin would need to scale by 224,000% to match VISA, and VISA is one of my different global networks. I don't know how much energy VISA uses but as of today, the bitcoin network is estimated to be using 16TWh [3], that's the same as all of Jordan or Lebanon or 5.2% of the energy consumption of the United Kingdom [4].
Assuming no energy consumption improvements, to scale to VISA levels Bitcoin would need to consume 224,000% more energy. That's 35,840TWh, which is nearly twice as much energy as the entire planet uses (21,776TWh)!!!
So, if Bitcoin is able to become 90% more efficient, it would only require as much energy as nearly two European Unions. If Bitcoin is able to become 99% more efficient, it would only require as much energy more energy than the entire United Kingdom. If Bitcoin is able to become 99.9% more efficient, it would only require as much energy as Qatar. I can keep going but I won't. I might have made a mistake and been a factor out, but even then it doesn't even matter, that's how ridiculous the numbers are.
I don't know about you but I find it rather unlikely that Bitcoin will every be a viable replacement for the world banking system. Maybe in a universe where Nuclear fusion is easy and ASICs never wear out, and the cost of cooling them is free but unfortunately for Bitcoin we don't live in that universe.
Bitcoin and crypocurrancys are horrible inventions if you care about the planet, if you think a massive decentralised network where value is created from ever increasing difficulty proof of work could be more efficient than VISA you are frankly deluded. Granted, this is someone who does not own any Bitcoins, so maybe I just haven't drunk the kool aid.
>if you think a massive decentralised network where value is created from ever increasing difficulty proof of work could be more efficient than VISA you are frankly deluded
nobody ever thought that. seems to a strawman to me.
With the current state of Bitcoin, you are absolutely right, but at the moment there are some developments that will improve this situation, mainly lighting network [0] which will help Bitcoin to scale in the number of transactions per second, granted, this is an off-chain transaction but it might be the right way to do it.
Actual resources? Much less than you think. By and large the bailout was done by transferring liability to central banks. Much of the "money" involved was purely virtual, credit or credit guarantees of one form or another.
Profitable to the US maybe .. but bless inflation exporting that took that burden and placed it on every thing (countries, assets,etc..) that are pegged to the USD.
