Sometimes I feel like an atheist walking into a church.
I know I'm right, but nobody has an open mind.
Topic: Debunking the "Bitcoin is an environmental disaster" argument. - page 16. (Read 5220 times)
Great OP fillippone! This should be pinned somewhere for everyone to visit constantly.
Bitcoins energy consumption has been used as a stick to beat it with for years by those
opposed to it but this certainly highlights the facts. Unfortunately the vast majority
of people will continue to believe the bankers and politicians when they play that
card again but we have the facts.
We can also compare the cost of minting coins and printing notes for the FIAT system,
the process used for all currencies around the world.
I would love to see the statistics and numbers for this.
The cost considerations of producing coinage:
1. Heavy machinery production
2. Transportation to mining site
3.Fuel and energy to extract raw material from the earth
4. Raw material transported to a refinery and the cost of refining itself
5. Transportation of refined metal to minting locations and 6. Minting process
7. Transportation to central banks
8. Distribution from central banks to regional banks
9. Distribution from regional banks to retailers
10. Management of coins
11. Storage and security
The cost considerations of producing paper notes
1. Transporting heavy machinery to forests
2. Felling trees
3. Transportation to paper mills
4. Transportation of fibre to the mills
5. Producing raw material for notes
6. Printing of notes
7. Management of waste chemicals
8. Transportation of notes to central banks
9. Distribution of notes to regional banks
10. Distribution of notes to retailers
11. Management of used notes
12. Storage and security
And after all that, what is the cost to the environment?
Bitcoins energy consumption has been used as a stick to beat it with for years by those
opposed to it but this certainly highlights the facts. Unfortunately the vast majority
of people will continue to believe the bankers and politicians when they play that
card again but we have the facts.
We can also compare the cost of minting coins and printing notes for the FIAT system,
the process used for all currencies around the world.
I would love to see the statistics and numbers for this.
The cost considerations of producing coinage:
1. Heavy machinery production
2. Transportation to mining site
3.Fuel and energy to extract raw material from the earth
4. Raw material transported to a refinery and the cost of refining itself
5. Transportation of refined metal to minting locations and 6. Minting process
7. Transportation to central banks
8. Distribution from central banks to regional banks
9. Distribution from regional banks to retailers
10. Management of coins
11. Storage and security
The cost considerations of producing paper notes
1. Transporting heavy machinery to forests
2. Felling trees
3. Transportation to paper mills
4. Transportation of fibre to the mills
5. Producing raw material for notes
6. Printing of notes
7. Management of waste chemicals
8. Transportation of notes to central banks
9. Distribution of notes to regional banks
10. Distribution of notes to retailers
11. Management of used notes
12. Storage and security
And after all that, what is the cost to the environment?
I do believe that this problem with energy sources is problem of both sides, I mean miners can choose to invest in renewable energy like solar or wind but they chose to go the fossil fuel route, but if the energy sector doesn't change how they are getting their energy source then the cycle will continue. The only environmental disaster here is that we are still using fossil fuels and other polluting energy sources when the technology to make an efficient and environmentally friendly energy source is available already.
With great development and industrialization also comes with great environmental disaster but not to bitcoin. As what the OP had shows that there are many environmental disaster that industrialization and development has brought.
I agree to OP that when it comes to production relatively like plastics produce too much waste that most organization had been too concern. The question is that are they doing something that could reduce the use of these plastics? The answer is YES they had done something but the result is not visible and still plastics produce a lot of waste and after being use is becoming troublesome. Actually one of the worst environmental disaster that has been cause.
This is why those environmental friendly called people could be sometimes be more like hypocrite people. They tend to scrutinize every development like bitcoin and then later on began to silence with some sort of reason and that is corruption. They like to attack to get attention and then they will ask for money to for them to make their silence. I know most critics has done strategy like this in which they called AC/DC. "Attack Collect, Defend Collect" and these groups usually use publicity stunts to get more attention to get paid. The more attention they get the high amount of money they will ask for their silence.
I agree to OP that when it comes to production relatively like plastics produce too much waste that most organization had been too concern. The question is that are they doing something that could reduce the use of these plastics? The answer is YES they had done something but the result is not visible and still plastics produce a lot of waste and after being use is becoming troublesome. Actually one of the worst environmental disaster that has been cause.
This is why those environmental friendly called people could be sometimes be more like hypocrite people. They tend to scrutinize every development like bitcoin and then later on began to silence with some sort of reason and that is corruption. They like to attack to get attention and then they will ask for money to for them to make their silence. I know most critics has done strategy like this in which they called AC/DC. "Attack Collect, Defend Collect" and these groups usually use publicity stunts to get more attention to get paid. The more attention they get the high amount of money they will ask for their silence.
I don't think that whataboutism is a way to combat this argument. Thing is that general public will most likely see this POW as a energy wasting giant. And after bitcoin hits 200k or 1M the attention doesn't exactly go away from us.
I partially agree with it. Things like Netflix or video games and other entertainment brings happines to billions. Bitcoin users are counted by tens of millions and many of them are only into Bitcoin for investing.
I personally think Bitcoin's ecological damage is simply insignificant, if Bitcoin mining stopped tomorrow, the difference in temperature change in decades would be far below the margin of error. So why ban it? Better focus on fossil fuels, agriculture and other big polluters. Fighting Bitcoin is a waste of time.
I don't think that whataboutism is a way to combat this argument. Thing is that general public will most likely see this POW as a energy wasting giant. And after bitcoin hits 200k or 1M the attention doesn't exactly go away from us.
The critics will not see how mining industries benefiting, employing workers also miner manufacturing companies employ workers and provide more employment. They will not check the fact that bitcoin mining generates energy, in a way miners mine bitcoin, profit from the mining and pay their electricity bill so electricity company will benefit in a way they will also employ more workers. In that case, I do not think bitcoin waste energy so far miners profit from it and pay electricity bill. If it is said that bitcoin waste energy? That is 100% wrong. If it is said that bitcoin energy production also produces carbodioxide which can contribute to global warming, that is yes, but know that miners are moving towards the ones that will not produce green house gases, miners are moving towards solar and wind as the source of energy to avoid future complains.
I don't think that whataboutism is a way to combat this argument. Thing is that general public will most likely see this POW as a energy wasting giant. And after bitcoin hits 200k or 1M the attention doesn't exactly go away from us.
In fact at some point governments most likely set up a bigger tax for btc and that will launch another bear run. They will use enviromental reasons as an scapegoat and most likely try to tax btc to death, and not just btc, but all the cryptocurrencies, because the public doesn't know the difference or care.
In fact at some point governments most likely set up a bigger tax for btc and that will launch another bear run. They will use enviromental reasons as an scapegoat and most likely try to tax btc to death, and not just btc, but all the cryptocurrencies, because the public doesn't know the difference or care.
About the issue with China, miners in China according to 2020 statistics mined approximately 65% of bitcoin into circulation. I have noticed the use of coal to generate energy has been reducing since 2015.
The reduction in 2020 was so significant in a way that China are focusing more on nuclear, wind and solar energy which are clean source of energy.
The focus of the critics are on electricity producing carbon which contributes to global warming, while the electricity source that produces carbon are mostly from coal (thermal). But with the pictures above which is from Wikipedia, shows how coal energy production greatly reduced and substituted with clean sources.
But, about the renewable energy, I see this links usefully:
https://cointelegraph.com/news/report-76-crypto-miners-use-renewables-as-part-of-their-energy-mix
https://moneyweek.com/investments/alternative-finance/bitcoin/602678/bitcoin-energy-consumption
From the link, it is clear that over 70% of bitcoin mined are from renewable energy, but what I am still considering is that of hydroelectric, hydroelectric in the process of producing energy, I have read online how some hydroelectric power plants emit carbodioxide and methane into the environment, methane is a potent greenhouse gas that is 20 times more effective/potent than carbodioxide in contributing to global warming. Although, properly constructed ones have ways these gaeses are trapped and not released into atmosphere but wind, nuclear and solar as been the best clean source of energy, while wind and solar sources are on the rise in China.
The reduction in 2020 was so significant in a way that China are focusing more on nuclear, wind and solar energy which are clean source of energy.
The focus of the critics are on electricity producing carbon which contributes to global warming, while the electricity source that produces carbon are mostly from coal (thermal). But with the pictures above which is from Wikipedia, shows how coal energy production greatly reduced and substituted with clean sources.
But, about the renewable energy, I see this links usefully:
https://cointelegraph.com/news/report-76-crypto-miners-use-renewables-as-part-of-their-energy-mix
https://moneyweek.com/investments/alternative-finance/bitcoin/602678/bitcoin-energy-consumption
From the link, it is clear that over 70% of bitcoin mined are from renewable energy, but what I am still considering is that of hydroelectric, hydroelectric in the process of producing energy, I have read online how some hydroelectric power plants emit carbodioxide and methane into the environment, methane is a potent greenhouse gas that is 20 times more effective/potent than carbodioxide in contributing to global warming. Although, properly constructed ones have ways these gaeses are trapped and not released into atmosphere but wind, nuclear and solar as been the best clean source of energy, while wind and solar sources are on the rise in China.
First, I think you hugely overestimate the price miners pay for electricity.
My assumption is based on if you can spend $1 and earn $2 then most people would spend more. If you have a more accurate method that says people wouldn't spend that then please share.Second, as many articles in my post demonstrated, the energy is not produced BECAUSE of the miners, but rather the other way round: there are miners because there is plenty of energy.
Are you smoking pot? People mine to make money.Third, this reasoning can be applied to everything, why only to mining? "Any cut in indoor lightning will be pretty much a cut in hydro-carbons", so why concentrate on mining?
It does apply to everything, that's why we use leds these days. Bitcoin uses thousands (or millions) more energy per transaction then visa/debit systems.Fourth, fossil fuels generated electricity is only a brief accident in history, soon, very soon, electricity will be entirely based on renewable energy.
Well at least you got one point right. But its not there yet, and won't be for 10 years at least. 
Currently there are about 900 bitcoins generated each day by mining worth about $50 million dollars.
Miners must be spending at least half of that on electric so say 25 million a day.
Back of the envelope calculations but I bet I'm pretty close.
Since the world isn't 100% powered by green energy, any cut in mining will be pretty much a cut in hydro-carbons.
I bet you disagree with this though
Miners must be spending at least half of that on electric so say 25 million a day.
Back of the envelope calculations but I bet I'm pretty close.
Since the world isn't 100% powered by green energy, any cut in mining will be pretty much a cut in hydro-carbons.
I bet you disagree with this though
Indeed, I disagree.
First, I think you hugely overestimate the price miners pay for electricity.
Second, as many articles in my post demonstrated, the energy is not produced BECAUSE of the miners, but rather the other way round: there are miners because there is plenty of energy.
Third, this reasoning can be applied to everything, why only to mining? "Any cut in indoor lightning will be pretty much a cut in hydro-carbons", so why concentrate on mining?
Fourth, fossil fuels generated electricity is only a brief accident in history, soon, very soon, electricity will be entirely based on renewable energy.
Currently there are about 900 bitcoins generated each day by mining worth about $50 million dollars.
Miners must be spending at least half of that on electric so say 25 million a day.
Back of the envelope calculations but I bet I'm pretty close.
Since the world isn't 100% powered by green energy, any cut in mining will be pretty much a cut in hydro-carbons.
I bet you disagree with this though
Miners must be spending at least half of that on electric so say 25 million a day.
Back of the envelope calculations but I bet I'm pretty close.
Since the world isn't 100% powered by green energy, any cut in mining will be pretty much a cut in hydro-carbons.
I bet you disagree with this though
Recently I often heard bitcoin critics telling me that "Bitcoin is too polluting", "Bitcoin waste too much energy" or other similar arguments.
Those arguments are as as as bitcoin, even Satoshi discussed those have been debunked a few several times, but I am trying here to organise the material to counter those accusations.
I will try to "answer" specific claims, with a few counterarguments, supported by data, websites and references. so that it will be easier to organise a "defence" of Bitcoin, in the unlikely case Bitcoin need a defence.
Noahbjectivity on Bitcoin Mining
A few "all rounders" long form:
Other Useful Links:
If you have any other suggestion, please point me in the right direction, and I will try to address every issue.
Those arguments are as as as bitcoin, even Satoshi discussed those have been debunked a few several times, but I am trying here to organise the material to counter those accusations.
I will try to "answer" specific claims, with a few counterarguments, supported by data, websites and references. so that it will be easier to organise a "defence" of Bitcoin, in the unlikely case Bitcoin need a defence.
- Accusation
- The bitcoin network consumes as much electricity as XXX
- Bitcoin Energy Consumption Index
- Defence
- Televisions, aeroplanes,Christmas lights, plastic, all require enormous amounts of energy to be produced and used: what is the amount of energy considered excessive to produce them? Why is this calculation done for Bitcoin and not for other goods?
- According to data from the Cambridge Bitcoin Electricity Consumption Index devices kept on standby, in the United States alone, could power the bitcoin network for more than a year and a half. (a figure that has been constantly decreasing)
- Mining bitcoin is actually quite environmentally friendly, compared to mining other Store of Value (Gold) Notice that rejected energy accounts for around two-thirds of all electricity generation. This energy is produced but ultimately does not go to useful work. The amount wasted annually is around 66.7 quadrillions BTU’s (“quads”) of energy. For perspective, that is the energy equivalent of wasting 2.3 billion metric tons of coal every year.QuoteThe potential for Bitcoin-powered renewables is already evident in China. A 2019 report by Coinshares found that approximately 75% of Bitcoin mining comes from renewable energy sources, much of which stems from newly created hydroelectricity. These new revenue streams have brought power plants online which otherwise would not have been economically viable given existing.
- Bitcoin is a battery.QuoteSo, if we think of Bitcoin as a battery, what can we do with it? The key properties of Bitcoin’s battery are: 1) always on and permissionless (no need to find customers, just plug and go) and 2) naturally seeking low-cost electricity: it will always buy when the price is right.
Given those properties, Bitcoin’s battery can assist renewable builds (and electric grids more generally) in a number of ways:- Interconnection queues: when you develop new energy resources, you must apply to get them connected to the grid. Texas alone has over 100 GW of renewables in its queue. These queues can take years to clear. In the meantime, these assets could be online and earning Bitcoin.
Project finance: Renewable developers need capital to finance build-outs before they have customers. Bitcoin’s battery is always ready to be the first customer. - Geographic issues: Sometimes the sunniest, windiest places are not the ones with the most customers, so it’s hard to justify the development of new renewables. Bitcoin’s battery solves this, becoming a “virtual transmission line” of sorts.
- Timing & grid balance: Sometimes when the sun shines and when the wind blows is not when we need the most electricity. Yet, electric grids are marketplaces that must stay in perfect balance between supply and demand. Therefore, grid-connected renewables often have to “curtail” (turn off) if the are producing too much energy at the wrong time. Bitcoin’s battery is ready to buy 24/7/365 when the price is right, and turning up and down as needed, and participating via direct power purchase agreements as well as via demand response programs.
- Underperformance: Related to the timing & balance issues above, often times, renewables produce more energy than is needed on their grid, leading to subpar financial performance. Bitcoin’s battery is ready to buy if no one else will.
- Cleaning the grid: Even outside of renewable generation, Bitcoin’s battery can help improve both emissions and the energy mix. For example, Crusoe Energy attaches efficient turbines and mining equipment to existing gas flaring sites, both improving emissions and converting energy into Bitcoin’s battery. Taking this a step further, you could even then take those profits and reinvest them in on-grid renewables elsewhere, another twist on the idea of Bitcoin as a “virtual transmission line” (aka battery).
- Interconnection queues: when you develop new energy resources, you must apply to get them connected to the grid. Texas alone has over 100 GW of renewables in its queue. These queues can take years to clear. In the meantime, these assets could be online and earning Bitcoin.
- Accusation
- Accusation
- The Bitcoin network is maximally inefficient. PoW leads to the consumption of a huge amount of energy for each Bitcoin transaction if for example, we compare it with VISA.
- Defence
- The energy consumed by the Bitcoin network is also used to secure it, since an attacker who wants to try to destroy Bitcoin would have to use (therefore buy or produce) a higher amount of energy compared to that used by the Bitcoin network.
- Il PoW is efficientand mining is a highly competitive industry. Any slightest energy inefficiency is punished by lower profitability. This guides miners towards the highest possible efficiency.
- The cost of mining is not the energy cost of transactions, and certain metrics they claim to compare eg. the cost of a single bitcoin transaction with the energy consumption of a transaction on the Visa circuit are completely meaningless. The mining mechanism serves precisely to make the system safe (from double-spending to other possible attacks on the network) in a trustless network, i.e. without a central authority that effectively updates the ledger. The only honest comparison would be with the overall cost of circuit security systems and banking systems. How much is spent globally each year to make banks and payment systems safe and reliable? With all the dedicated servers, data centres, network infrastructures, procedures constantly running for authorization, settlement, clearing, reconciliation, etc. Not to mention the costs for the construction, operation, maintenance and surveillance of ATMs, bank branches, vaults and related security systems, etc.
- In a very well written article by Conio's Guido D.Assori (who signed the very first Segwit transaction) says this is a feature, not a bug.
Here a courtesy translation of this specific part of the article.QuoteThe third attack would be that Bitcoin would move 7 transactions per second and that in a nutshell for such a system even a few kilowatts now would be wasted (curious, then, that Attivissimo remembers this after accepting Bitcoin donations for years, on its blog, of this great problem).
Quickly: this number, unfortunately, arises from a profound misunderstanding of the real decoupling between the technological infrastructure called "blockchain" and the transfer of value in Bitcoin.
It is frequent, but this does not make it any less wrong.
Premise: "It's a feature!", Or rather the size of the Blockchain is deliberately small.
Being able to write on a blockchain must be a luxury, so that it remains decentralized, so that everyone, at any time and with a relatively low effort, can independently verify the correctness of transactions on the network, and not just the large banking institutions.
However, nowadays, at every moment of the day, Bitcoins, or contracts that are related to their value, are brokered and traded on cryptocurrency exchanges, on custodial platforms, by means of pegged tokens, on sidechains, on Lighting Networks, by means of CFDs. , with various levels of enforcement.
And this happens through a number of transactions that are much more than 7 per second, believe me! Claiming the opposite would be like expecting our morning coffee paid for at the bar to be recorded by all the backups of all the nodes of all the Eurozone interbank circuits.
So how many transactions, really?
In general, it is a non-measurable number, and it will be less and less, the estimates will be more and more heuristic, also thanks to privacy-preserving platforms.
We can say, to give a general idea, that every transaction that takes place on an order book of any platform, which represents Bitcoin, can only exist thanks to the fact that, underneath, there is the Proof Of Work which, when necessary, allows settlement of a precise state of a chain of transactions of indefinite length (my token goes to you, you give it to him, you give it to the other, who breaks it in three and gives it to the other, who collects 8 ). Aren't you going to expect all the coins you exchange to end up written down somewhere?
Quite simply, people every day rely on intermediaries to exchange Bitcoin value without using a blockchain directly.
The global concept of decentralization is maintained, relocation is increased with confidence in the last mile (not always! LN!) But the connection element always remains the last, only, true, mandatory, a digital ledger in which the compensation movements.
Comparing, therefore, the phantom 7 transactions (which is a number that was good in 2013, today there are many more even on-chain) to the world's ability to transact Bitcoin, and tie it to the PoW, is a bit like expecting that there are, at all times, a sufficient quantity of vans to move all the gold in all the vaults of the world that intend to exchange gold.
Bitcoin is not a payment system, but a settlement system. Therefore, the comparison should not be made with payment circuits (Credit Cards), but with the various settlement layers (SWIFT, CHIPS, FedWire ) o Fedwire.
On this particular aspect, please consider reading A Closer Look at the Environmental Impact of Bitcoin MiningQuote
Bitcoin is a settlement system, not a payments aggregator
First things first. What is Bitcoin[1] and what is it not?
Bitcoin is a settlement system like FedWire, it is not a payments aggregator like Visa. I constantly see Bitcoin compared to Visa, MasterCard, or PayPal, and this is the main source of mathematical atrocities whereby Bitcoin’s overall electricity cost is divided by its transactions and then compared to something it’s not. Energy use per settlement transaction is a nonsensical metric by which to judge Bitcoin’s energy use.
Just like the 800,000 or so daily FedWire transactions are not a good measure of the total amount of daily Dollar (USD) transactions, Bitcoin’s 325,000[2] or so daily transactions are not a good measure of the total amount of daily bitcoin (BTC/XBT) transactions. Most bitcoin transactions are not visible. They take place inside the payment aggregation systems of exchanges, on the Lightning network, and yes, even inside of actual aggregators like PayPal, Square, or MasterCard. Only periodically are they settled onto the Bitcoin blockchain as visible transactions.
Solutions like this are referred to as network layering. This is a tried and tested approach to separating casual retail transactions from heavier settlement transactions and it is exactly how we already do things in the fiat monetary and payment systems. In such a system, the base layer, like FedWire (or Bitcoin), only acts as the final arbitrator of settlement transactions, everything else, and that is the vast majority of all transactions, happen in higher payment aggregation layers, which are often entirely different systems.
In other words, Bitcoin is not a competitor to Visa, MasterCard or Paypal. Bitcoin is an independent monetary system that aggregators can make use of.
Presenting Bitcoin’s electricity consumption in terms of its daily number of settlement transactions is a red herring. - Similar considerations can be made for a comparison between gold and bitcoin as "digital gold", and then in addition to the costs for the safe custody of gold, those for its mining, refining, smelting, transport, etc. should also be added. I challenge anyone to argue that all this can be considered particularly "green", but strangely I have never heard anyone complain and ask to ban gold for its environmental impact.
- Accusation
Noahbjectivity on Bitcoin Mining
Quote
The Bloomberg columnist Noah Smith has a lot of thoughts on Bitcoin. Some of them are really solid and engage with the reality of the protocol itself, which is rare for a member of the mainstream media circuit. He also discloses that he owns Bitcoin, which is impressive for an economist and a member of the establishment. So I’m pretty happy with him overall. I don’t want this piece to be interpreted as a blanket critique of Noah’s stance on Bitcoin. However, Noah’s recent column in Bloomberg, Bitcoin Miners are on a Path to Self-Destruction, makes a few claims that warrant a response.
Noah’s basic premise is that Bitcoin miners are effectively hogging the grid in the various places where they operate and risk getting banned entirely. Not only is the notion of a global coordinated ban on mining far fetched, but Noah relies on a few claims that are dubious at best. Let’s investigate.
Noah’s basic premise is that Bitcoin miners are effectively hogging the grid in the various places where they operate and risk getting banned entirely. Not only is the notion of a global coordinated ban on mining far fetched, but Noah relies on a few claims that are dubious at best. Let’s investigate.
A few "all rounders" long form:
- Bitcoin Energy Consumption written by Paul Veradittakit from Pantera Capital.
How Much Energy Does Bitcoin Actually Consume? by Nic Carter
- Bitcoin is Key to an Abundant, Clean Energy Futureby Square
Other Useful Links:
- 2020 gold produced
- Gold CO2 estimate
- Paris Agreement
- Environmental impact of gold
- China’s renewable energy
If you have any other suggestion, please point me in the right direction, and I will try to address every issue.
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