Bitcoin Will Soon Use More Energy Than Austria

[Zippyjuan]

http://blogs.discovermagazine.com/d...on-use-more-energy-than-austria/#.WvyQdkgvyUk

By now, we’re all tired of hearing about the virtual currency turned investment craze known as Bitcoin. Created in response to the 2008 financial crisis, anarcho-capitalists hailed it as the decentralized future of commerce.

But as prices soared and the biggest names on Wall Street bought in, Bitcoin became mostly known as a speculative, unregulated investment. Think Beanie Babies, but you can also use them to buy drugs and engage in human trafficking.

Perhaps the most remarkable Bitcoin storyline recently has been just how much computational horsepower it takes to create the virtual currency: some 26 quintillion calculations per second. That adds up to tremendous energy bills.

But it’s been tough to put exact numbers on Bitcoin’s massive energy consumption. Most estimates have been “back-of-the-envelope” type calculations. A study published Wednesday in the journal Joule attempts to change that. Economist and digital currency expert Alex de Vries applied traditional economics to better understand Bitcoin’s current and future energy consumption.

His results are staggering: Bitcoin uses roughly as much electricity annually as Ireland. And just one Bitcoin transaction requires as much electricity as an average household in his native Netherlands uses in a month.

Projecting forward, the power drain becomes even more alarming. By year’s end, Bitcoin could consume as much electricity as Austria — or roughly one half of one percent of humanity’s total power needs. If the cryptocurrency’s price grows as some expect, it could eventually chew up 5 percent of global electricity.

“This increasing electricity demand is definitely not going to help us reach our climate goals,” says de Vries, who’s also the founder of Digiconomist, in a media release.

Always-On Technology

Bitcoin’s intense energy consumption is baked into its design.

To stop people from fraudulently spending their virtual money more than once, each Bitcoin transaction gets a precise timestamp. This public ledger is known as the blockchain. It underpins all consumer confidence in the system.

To create it, computers around the world continuously crank away at calculations, generating numbers as they compete to process transactions. If your computer gets selected to process a Bitcoin transaction, you’re rewarded 12.5 new coins plus a transaction fee.

This means that the computers processing Bitcoin are chugging away at calculations non-stop — even when they’re not involved in an actual transaction. The more calculations you do, the more chances you have to get a transaction fee.

In Bitcoin’s early days, the need was small and many transactions happened on home computers. But now some 200,000 Bitcoin transactions transpire every day.

“If you want to get a bigger slice of the pie, you need to increase your computing power,” de Vries says. “So there’s a big incentive for people to increase how much they’re spending on electricity and on machines.”

The growth and increased complexity, paired with the reward, has led to a worldwide rush to build vast Bitcoin mining operations. You can see this across Eastern Europe, China, Russia and Siberia, where Bitcoin server farms are so big that their excess energy is literally warming houses. Or, for example, the Russian nuclear scientists caught trying to use a government supercomputer for mining cryptocurrency.

de Vries’ study tries to figure out when the expense will level off with the reward, slowing the industry’s growth and energy consumption. And he admits his estimates are shaky. Bitcoin mining is a secretive business, and so some of the information he relies on came from eyewitness accounts. But the results are important for understanding the industry’s sustainability and passing effective regulations.

 

[dannno]

This is fake news, it is based on bullshit calculations that came out a few months ago that were debunked.

And just one Bitcoin transaction requires as much electricity as an average household in his native Netherlands uses in a month.

Actually, a single bitcoin transaction requires about 1 or 2 cents in electricity.

 

[dannno]

No, bitcoin isn't likely to consume all the world’s electricity in 2020

https://www.cnbc.com/2017/12/21/no-...to-consume-all-the-worlds-energy-in-2020.html


DEBUNKING THE GREAT BITCOIN ENERGY CONSUMPTION MYTH

Another factor that appears to contribute to the myth is that many of those bashing Bitcoin’s energy consumption are doing so off non-existent or somewhat questionable statistics. Digiconimist does keep stats on Bitcoin’s energy usage, with these numbers seemingly being the root of most so-called reports on the matter. These stats show that Bitcoin’s overall energy consumption is 30.2 tWh, across 63 countries, with a Bitcoin transaction taking a similar amount of power as that of 10 US households on a daily basis. However, these stats are becoming increasingly easy to pick holes in.

https://www.bitstarz.com/blog/debunking-the-great-bitcoin-energy-consumption-myth


Fake News: Bitcoin Energy Consumption


https://medium.com/setocean/fake-news-bitcoin-energy-consumption-4312da7f12fa

Debunking The “Bitcoin’s Electricity Consumption” Problem


https://blockchaind.net/debunking-bitcoins-electricity-problem/

 

[dannno]

Of course, I've already pointed this out to zippy multiple times - but fake news zippy's biggest flaw, as they have shown time and time again, is that they are unable to learn.. ANYTHING. Ever.

Therefore I recommend that folks assume EVERYTHING zippy says should be considered wrong until proven otherwise.

 

[Zippyjuan]

This is fake news, it is based on bull$#@! calculations that came out a few months ago that were debunked.


Actually, a single bitcoin transaction requires about 1 or 2 cents in electricity.

That line did sound pretty amazing but the study was only published Wednesday so it would be hard to debunk it "months ago".

Source: https://www.cell.com/joule/fulltext/S2542-4351(18)30177-6

 

[dannno]

That line did sound pretty amazing but the study was only published Wednesday so it would be hard to debunk it "months ago".

Source: https://www.cell.com/joule/fulltext/S2542-4351(18)30177-6

The study used the calculations that were debunked months ago. Fuck man. Learn!!

It's like a fucking Frankenstein.

 

[timosman]

The study used the calculations that were debunked months ago. Fuck man. Learn!!

It's like a fucking Frankenstein.

You start sounding like somebody who defends AGW. What is hard to understand in the following statements:

1. Mining bitcoins is a way to turn electricity back into money - at profit.
2. The electric power used by bitcoin miners will be increasing as long as it is profitable.... or no more power available on this planet.

 

[dannno]

You start sounding like somebody who defends AGW. What is hard to understand in the following statements:

1. Mining bitcoins is a way to turn electricity back into money - at profit.
2. The electric power used by bitcoin miners will be increasing as long as it is profitable.... or no more power available on this planet.

It will use less electricity and resources than our current monetary exchanges in the long run.. Like I said, it's actually one or two cents per transaction, you are promoting the idea that it can power a house for a month or something, so what, $100/transaction?? It's insanity, and it is completely false. You're on the fear mongering side, talking about the world ending because bitcoin takes too much electricity, that sounds more like defending AGW to me..

Most banks have buildings, maintenance, people they have to house, clothe and feed including expensive executives, they use electricity too, and many other types of resources and they often have high rises in downtown areas..

 

[timosman]

It will use less electricity and resources than our current monetary exchanges in the long run..

Because?

Like I said, it's actually one or two cents per transaction, you are promoting the idea that it can power a house for a month or something, so what, $100/transaction?? It's insanity, and it is completely false.

I am talking about mining not transactions. The growth of mining will only stop if it is no longer profitable. The electricity cost per transaction takes into account mining. Are you saying it shouldn't?

 

[dannno]

Because?

Because it doesn't require wasteful human capital and buildings.. just some servers.. and not nearly as many as you are imaging..

I am talking about mining not transactions. The growth of mining will only stop if it is no longer profitable. The electricity cost per transaction takes into account mining. Are you saying it shouldn't?

Ya, since that is what you were referring to and what we are discussing that is exactly what I meant - the cost of a bitcoin transaction in terms of mining electricity. But if you understood crypto better you would know that the cost of a bitcoin transaction in terms of mining (electricity AND equipment) is actually LOWER than the cost of the transaction the person pays. Otherwise it wouldn't be profitable to mine bitcoin and nobody would do it..

So if you take the average cost of a bitcoin transaction, you can figure that a portion of that cost is profit, a portion is equipment and a portion is electricity:

mining profit + equipment + electricity = average cost of bitcoin transaction on the consumer side

The average cost of of a transaction is currently around $2, and that includes mining profits, equipment and electricity. Then there is the btc that the miners get from mining a block that is created which is fairly negligible (and eventually goes to zero)

While it is impossible to calculate exactly how much electricity is being used as it can only be estimated, we do know that there is an absolute upper bound to the highest possible cost of electricity per transaction that is WELL BELOW $2.... so to say it is costing the same amount as a household in the Netherlands uses in a month or some insane statistic is just completely foolish and wrong.

 

[timosman]

But if you understood crypto better you would know that the cost of a bitcoin transaction in terms of mining (electricity AND equipment) is actually LOWER than the cost of the transaction the person pays. Otherwise it wouldn't be profitable to mine bitcoin and nobody would do it..

I am not sure if you realize but you just made my point. There is no deterrent and there is a financial incentive. What's the limit? ∞?

 

[dannno]

I am not sure if you realize but you just made my point. There is no deterrent and there is a financial incentive. What's the limit? ∞?

No, I made my point. Your point is that the electricity for BTC is outlandishly expensive, and that is disinfo.

As people switch from dollars to bTC, from the banking system to crypto servers, financial transactions in the longrun will become less energy intensive than they are today.

These are scaremongering pieces that you and zippy post that are akin to the global warming scaremongering disinfo.

 

[FSP-Rebel]

Bitcoin is a wealth transfer/store/settlement layer. Litecoin is what you will use for everyday purchases.

 

[timosman]

No, I made my point. Your point is that the electricity for BTC is outlandishly expensive, and that is disinfo.

That's not what I said. All I am saying is there is no limit to power usage of bitcoin miners. If I can spend $100k, buy mining equipment and make a profit what is preventing me from spending $100M, $500M or $5B? All I need is electricity. Lots of electricity.

As people switch from dollars to bTC, from the banking system to crypto servers, financial transactions in the longrun will become less energy intensive than they are today.

Ahhhh....., the power of wishful thinking.

These are scaremongering pieces that you and zippy post that are akin to the global warming scaremongering disinfo.

You can always refute these claims.

 

[dannno]

Bitcoin is a wealth transfer/store/settlement layer. Litecoin is what you will use for everyday purchases.

Ya, if you think about how many large transfers banks and financial institutions do daily that need to be incredibly secure, this is likely what btc will be used for eventually.

Buying a cup of coffee? LTC..

 

[dannno]

That's not what I said. All I am saying is there is no limit to power usage of bitcoin miners. If I can spend $100k, buy mining equipment and make a profit what is preventing me from spending $100M, $500M or $5B? All I need is electricity. Lots of electricity.

This is why we keep telling you to learn how bitcoin works before trying to tell everybody else who is into bitcoin about how it works.

You would be much better off making these statements in the form of asking questions first rather than making assumptions.

As the number of miners increase, the difficulty of mining increases and it becomes less profitable. When it becomes unprofitable for miners who have higher electricity costs, those miners start dropping off - they either turn off completely to save electricity or they switch to another crypto currency to mine.

You can always refute these claims.

I already have, SEVERAL times.. in several ways, using both mathematics and basic logic.

 

[dannno]

As the number of miners increase, the difficulty of mining increases and it becomes less profitable. When it becomes unprofitable for miners who have higher electricity costs, those miners start dropping off - they either turn off completely to save electricity or they switch to another crypto currency to mine.

i.e.

 

[timosman]

they switch to another crypto currency to mine.

How does it reduce electricity usage? Also in the meantime better GPUs become available, you upgrade your farm and crank even more coins.

I already have, SEVERAL times.. in several ways, using both mathematics and basic logic.

I still don't know why anybody with access to cheap electricity shouldn't be mining? It is as good as printing money. How can you discourage that?

 

[dannno]

How does it reduce electricity usage?

Questions!! Now we're talking..

Ok, let's say someone turns on a big BTC mining farm that has very low electricity costs as well as the latest hardware that is highly efficient. A bunch of BTC miners with higher electricity costs and lower efficiency rigs either turn off, or they switch to other cryptos. Let's say that 80% switch to other cryptos to mine. When they go in to mine those other cryptos, the difficulty increases and people who are mining those lower end cryptos who have higher electricity costs and lower efficiency rigs in comparison turn off their machines, eventually putting them into retirement.

Also in the meantime better GPUs become available, you upgrade your farm and crank even more coins.

Nobody uses GPUs to mine crypto anymore, definitely not BTC or any of the major ones. That is soooo 5 years ago... They use specially designed ASIC chips that are a lot more efficient with electricity and much more powerful.

I still don't know why anybody with access to cheap electricity shouldn't be mining? It is as good as printing money. How can you discourage that?

I believe I answered this question above..

 

[zelkoj]

This is actually a pretty cool piece of info. I personally only use bitcoin when I play some games there, but I am well aware that some people use it very often. The fact that it takes so much energy is pretty insane to me to be completely honest.