Topic: Cambridge Bitcoin Electricity Consumption Index - The impact of BTC in the World (Read 312 times)

That is if the government and the people is on the same page when it comes to a power plant construction or even solar farms, most of the time people are not in favor of power plants near their neighborhood because of the possible ergonomic hazard and solar farms take up a lot of land and people that care about their taxes will not be easily persuaded. Not to mention that a lot of countries are slowly dismantling their nuclear power plant because they favor coal power plant. Only way to save this is for an innovation in power storage and not power generation.

Including for this reason, I do not see any serious fears of obtaining energy to mine bitcoins. Nowadays solar panel production technologies are getting cheaper every day. The construction of power plants is very beneficial even for individuals on the roofs of houses and it can completely solve the problem of cheap clean energy. The sun can still be considered an inexhaustible source of such energy.

Safe is a relative term, my bank account is FDIC insured to $250000.
Any Bitcoin , I own is not insured, if I lose the password, then it is gone
if I get hacked , then the bitcoin is gone.
If I die, and my children don't have my password, then bitcoin is also gone.

So in my existence, FIAT is safer.
Lose my bank password, the bank will reset it.
if the bank gets hacked, the funds will be restored.
My children can use the legal system to gain access to my bank account after my death.

So safe is not a good term.
You can say bitcoin is a good hedge against hyper inflation of fiat,
but so is oil, gold , real estate or any other commodity.  

One other point , the claim the banking system uses 4X the electricity of bitcoin,
has anyone calculated the number of transactions processed by all Banks verses bitcoin.
My guess is Banks process 1000X more transactions per second than bitcoin,
so in the end they are thousands of time more efficient for their energy usage.

I ask you not to assume that I made this thread in order to bash BTC and it's ecosystem in some way. I just found those articles and wanted to hear what the community might think of them. And it turns out they actually have a lot of (informative) things to say, I'm glad that I did in fact started this topic.

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This is actually a fair comparison. I guess that there will always be a group of people ready to grab pitchforks against BTC and they will basically attack it in any way possible, and the energy consumption is right there for the taking. If we do stop for a second to think the amount of energy that banks and such use (and have used!) to power up the economy, I'm sure they'll have a harder time trying to justify why they only make calculations for BTC only.

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This basically sumps up the point I brought before, well said. I wonder if there are similar tools that have been made to "estimate" the amount of processing power it takes to make global economy work? Or at least a particular bank to operate and such?

Yeah, totally overlook the fact that fees aren't going to halve but I doubt it will reach those numbers.
If we assume a higher price and double income in BTC for fees this will have to be 4 times bigger on average in $ for a tx since we're still going to have roughly the same amount of transactions a day.  As of right now, we're surpassing almost daily a minimum fee of 7-8$ for inclusion in the next block that should rise to 30-35$ which might affect the price in a negative way, nobody is going to pay constantly 30$ to move around 500$ and there aren't that many people moving millions.

Of course, the biggest question will be the effect of LN as this will help split the initial cost since you can make hundreds inside the network to cover for the initial fee but I don't think anyone could even approximate how this will impact the total fee spent.
In short, yeah, still my bad, probably that 75% will be something around 50% at best and more likely 40%.

So, the next thing that might help keep consumption down.
Let's hope the semiconductors crisis keeps going on for around two years so no new gear will be shipped and we stay flat as we did for almost 3 months.


2018 Numbers, the hash rate was 40Exa, now it's close to 140Exa.
Read the new numbers before telling others how much research they have done.

I turned this into a spreadsheet so I could plug in the variables and play about with it a bit.

It seems to me that the key assumption is "r = the average percentage of income miners spend on energy [unit less ratio]" and setting this to 0.8.

In short the model says power consumption is directly linked to the price - as the price goes up miners earn more and they spend more on electricity.

It drops with each halving of course as the block reward drops, but if as anticipated fees replace some or all of that lost income the effect will be smaller.

Couple of worked examples, using more or less the numbers above, the only difference was to use average fee income over the last few days to get 4.56 BTC/hour for the current era, increased to 9 BTC/hour for the next:

Current era (3), fee income 4.56/hour:

Price: $50,000    Energy consumed: 56 GW
Price: $100,000  Energy consumed: 112 GW
Price: $200,000  Energy consumed: 224 GW

Next era (4), fee income 9/hour:

Price: $50,000   Energy consumed: 37 GW
Price: $100,000 Energy consumed: 74 GW
Price: $200,000 Energy consumed: 148 GW

As you can see according to the model the energy consumed is a straight line with the price.  And at current rates bitcoin at $200k suggests about 1.5% of total world energy production will go to Bitcoin mining - anyone who doesn't think that is insane, really needs their head examining ...

How did you come to the 0.8 value for r?  And do you think it will change over time? 

I presume it is really a competition thing, if a miner can manage on a smaller margin, they can spend more on power (i.e. r will be greater) and thus bring in more income.  There is actually no incentive to drive r down.

Ok, now how much does the same transaction cost to buy a Tesla with fiat currency?

Now, remember to take into account that the transaction in the Banking system are processed by giant mainframes/database servers that are supported by 24/7 Air conditioning and CCTV monitoring etc.. etc..

A transaction between different Banks doubles the need for this hardware and supporting infrastructure (modems/switches/backup devices etc.)

Ok, so reconciliation and auditing are also done.. so you have people working in a Office environment that are using computers and printers and air conditioning that are consuming electricity.. (They have to drive to work / Armored vehicles transport cash / Coins have to be minted / Paper notes has to be manufactured)

Do you get the "hidden" picture into what the alternative method of payment are costing in CO2 emissions and electricity cost? (I have not even started on the manufacturing of credit cards / debit cards / ATMs / Credit card machines etc.) 

How much research have you actually done? I was studying this very topic two days ago.
The global banking system uses 4x more electricity than bitcoin does and is nowhere near as safe.
Though I do agree they both use a lot of electricity.
The problem is how the electricity is made and not so much about how much is needed.

Bitcoin - 32.56 TWh Global baning system - 140TWh

https://medium.com/@zodhyatech/which-consumes-more-power-banks-or-bitcoins-8302750fe2bc

The next halving may have less impact than you think.

Currently the miners are getting about 5 BTC/hour from fees and 6(50/2³) = 37.5 BTC/hour from the subsidy.

Assuming steady growth in transaction demand until the next halving this could easily grow to 10 BTC/hour in fees.

So at the next halving we could have 10 BTC/hour in fees and 6(50/2⁴) = 18.75 BTC/hour from the subsidy, all at a higher price.

We will have to see how it all plays out...

No, I was strictly referring to the comparison with other things that do the same stuff, you can't go out and say well bitcoin does 0.00..1%, and agriculture burns one hundred times more, let's see long people last without bitcoin and how much without refrigerators! Bitcoin it's an economic environment of its own if it generates activity it will come with everything others have good and bad, you have to defend it but also keep being rational.


Like it or not we are contributing to it, you're contributing to global warming with every action, bitcoin consumes energy, cars consume energy, heating your house does so and so is every single human activity on this planet. Bitcoin has a part of it and others have more, but you can't say that it's something eco-friendly either, as there is no such action, even planting a tree isn't if you're burning more gas to get them there and plant them than all the carbon they will grab from the atmosphere during their lifetime.

It is what it is and let's deal with it, this ain't a religion, this is economy.
Going to extremes will not help our cause either as people will just see us as a bunch of cultists.

Since you're probably partly referring to my post, I can only say that it would be stupid not to say anything and let talk about how Bitcoin will destroy the planet, take root and become something that will soon be seen as one of the main reasons "why don't use Bitcoin".

Many beginners are just reading this part of the forum and taking things for granted, and they should know how small the impact of BTC on the world really is - and how will you illustrate it to them if you don't give a concrete example? I personally mind when some push us into the category of criminals who use BTC to deal with illegal things, among other things - and I certainly don't want anyone to push us into the category of those who contribute to global warming and all that comes with it.

This is a attempt to generate a (bad guy) of sorts.  Media models Require a bad guy for a story.  Truth is optional.  Welcome to modern media.    It should be ignored for the trash it is.

Let's hope it will not grow at a rate that will impact prices as you will see a lot of negative reactions and even restrictions like the ones happening in a few places but on a far larger scale, I don't know how legit the news about Inner Mongolia is but if this keeps going on like this we will soon see them replicating quite soon as basically one location cutting electricity for miners means the load will shift to others


This KGB-style whataboutism propaganda is just as bad, What about that, what about that what about..
Ok, let's take banknotes
How many people in the world used bitcoin today? Half a million? How many people used banknotes? 5 billion?
How many people used BTC to buy food today? How many used cash?
I don't know why people are immediately getting triggered and rush to compare it to something else and their only defense is to point fingers: "Look, this is worse!"

Anyhow, the halving will take care of some of this, the revenue will drop by 75% in 7 years so even if the price will hit 200k will be at the same levels as now, the rest will probably be solved if we stop with all those renewables that only work with subsidies and go full nuclear, constant power no matter what time of the year and of the day.

Franck Leroy dedicated his life to trash talk Bitcoin (and Gold mining), and he is talking about Tesla without researching that they produce more CO2 with process of creating their batteries than Bitcoin could ever do.
Everything is not black and white like it appears and Franck spent a lot CO2 writing all his posts and tweaking all the data to fit his narrative.
I mean just look at his Twitter, Mastodon and Medium pages and you will see that he magically appeared in February with his theories and fairytales...

https://mastodon.online/@FranckLeroy
https://twitter.com/franckleroy_

Agreed.  That is why I said "trend to" perhaps "try to use" that much power would be better since, as you point out, prices would adjust.

Thanks.  Fixed the typos in all my exponents.

It is an incredible obsession with the idea that Bitcoin consumes huge amounts of energy and thus destroys the environment, that melts glaciers, raises the level of the world's seas and creates ozone holes. It’s all absurd and completely ridiculous if we know that that same amount of energy is thrown into the wind only in the US on standby devices every year.


I don’t know how much total energy is thrown into the wind each year globally, but I believe Bitcoin hasn’t been consumed as much since it originated - so the impact of Bitcoin on the world in that sense is negligible - except for those who want to believe it.

The reason that no one is talking about it is because they have no relevance to their agenda which is to point out how bitcoin consumes a lot of electricity to operate. And if they talk about it in the same realm as bitcoin then they would end up dwarfing the amount of electricity that bitcoin compared to the ones that they put together with it. Banknotes that are out of commission can be used to make fertilizers depending if the bank note is made up of cotton or if it is made with polymer then there isn't a need to replace, it's not bitcoin against the world after all, they just want it to look like that.

That is much much smaller picture than what we think I guess.

We are all discussing this within a limited dimension box right now because we are not thinking about future energy consumptions and resources.

What if we are able to harness the Sun's energy or Ocean's energy more than 100% all over the globe? What if we produce techniques that are cheaper than Solar panels or wind mills? This could just turn the above picture upside down.

If we get our hands on such renewable energy then we can end up in completely different line of work. At the time electricity will not be the sole factor to decide the price of BTC but the demand and the way that crypto tech is used in the future.

Well, free energy won't be that far considering the giant leaps that we are taking towards Mars, Moon, Edge of the Solar system and what not!!

All the FUD about bitcoin mining energy consumption is nonsense and written by people who don't understand bitcoin and just want to put it down.

Yes, Bitcoin uses lots of electricity. A lot of that comes from renewables. Also it is stupid to calculate the energy or CO2 cost of a bitcoin transaction because it isn't the transactions that take electricity, it is the blocks, no matter how many transactions are in that block. The power/CO2 cost doesn't scale with transactions so it's a pointless calculation. Also, the blockchain is the settlement layer, there are plenty of transactions done through 3rd party services, LN txs, and batched transactions that are all off chain and later settle on-chain. So even if you for some reason wanted to talk about electricity/CO2 used per tx, the numbers used are wildly inaccurate.

The Tesla thing is stupid for the reasons explained above, but also because Tesla is a company and the purpose of a company is to make money. Bitcoin will preserve (and grow) the value of Tesla's money on hand so it makes sense for them to invest in Bitcoin as a store of value. And people already have Bitcoin, allowing people to use Bitcoin to buy a Tesla doesn't add anything to Bitcoin's carbon footprint. People aren't going to stop mining Bitcoin if Tesla never allowed people to buy their cars with Bitcoin, so it's a moot point. But rather than understand the real situation with Bitcoin its easier just to do a simple calculation and try to act smart so that's what everyone does who has an anti-bitcoin agenda.

And of course these people never bother to weight their wildly inaccurate calculation of the cost of bitcoin with what bitcoin gives to the world. Nor do they bother to calculate the energy/CO2 costs of the banking sector or any other industry. Because these things would take actual research and thought.

Because this in now a new and popular way of explaining why bitcoin is bad. Before it was pyramid and not backed by anything, now they found this convenient information which every media will use against crypto, which we have to admit its very efficiant way of FUDing