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Topic: Energy consumption will become an issue if bitcoin really breaks through - page 7. (Read 23459 times)

hero member
Activity: 798
Merit: 1000
The largest cost of production is energy.

That is quite debatable. In fact, to think so is incredibly short-sighted with ASICs right around the corner. Maybe it's the largest cost *right now*, but are you familiar at all with the term amortization?

I mean we can use costs in $ as an indication of how many resources are being dedicated to bitcoin, can we not? You did the same by equating financial GDP with consumption.

I'm just going to make up some numbers here for second that I know are not real-world, but I that doesn't matter--as has already been explained and I will explain again in a second.

Let's say an ASIC and a GPU are both 100% guaranteed to mine bitcoin for 5 years straight and then fail. Let's say the ASIC costs $1000 and uses $1000 in electricity in that time. Total 5 year investment: $2000. Let's say a GPU costs $200 but uses $1800 in electricity. Total 5 year investment: $2000.

Your only counter-argument to this is "well the ASIC is 100x faster, it is therefore more efficient". Sure, in terms of mhash/joule, it is. In terms of resources consumed, there is no difference. All a 100x faster machine is going to do is drive up the difficulty and weed out GPUs. Now if the world were a static place, ASIC guy would win all the monies. Unfortunately for him, anyone with a computer has a built-in calculating machine that can figure out that there is a profit margin to be had by purchasing an ASIC.

Replace ASIC with "solar panel array" or whatever consumption activity that you prefer to make it sound better and you have the same thing. Resources must be consumed until there is only a small profit margin remaining from the mining system.

Your counter-argument to that is that this consumption will drive innovation (lol where's ur deflation economy now), but the innovation only drives to further consumption--expending the maximum amount of resources possible in the name of profit. Instead of acknowledging the fact that hey, maybe this is batshit, you must rationalize this epic fail in the most extreme of ways, namely hinging on the hope that oil will no longer be our dominant energy source in the near future. Pathetic.

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It's not a design flaw.  It's an intentional feature.  And it can be changed if absolutely necessary.  But it likely won't be.

Wishy washy, flippy floppy, bitcoin good bcuz i say so and if not good we change.
legendary
Activity: 1330
Merit: 1000
if billions of tons of earth are being dug up to find silicon for circuit boards to produce devices designed to mine bitcoin

 Roll Eyes

I don't think there's an eye-rolling icon big enough to convey my thoughts on this.  Silicon is extremely common.  The largest cost of production is energy.  I can setup some renewable energy source almost anywhere, sell when it's profitable, and use the excess energy to refine silicon.  But I won't even need to do that, because the amount of silicon used by Bitcoin mining doesn't even grow that quickly thanks to reductions in die size.

Listen, in 20 years, by the time Bitcoin energy usage matters at all, our problem will be that we have too much renewable energy at certain times and in certain places.  Bitcoin mining can make use of that energy.  Our other problem will be that we won't have enough energy at certain times, in certain (cold) places.  And Bitcoin can help to even that out, as well.

7% of electricity seems like a shocking figure.  But, really, it isn't.  It will be easily absorbed into the future structure of otherwise wasted energy when the time comes.

You seem to assume that thanks to almighty bitcoin the world will be a better one and that there will be less wars. I do not share your belief.

It's kind of hard to prosecute wars when they can't be financed.  "It is no coincidence that the century of total war coincided with the century of central banking."

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Bitcoin has a serious design flaw being its potentially enormous energy consumption.

It's not a design flaw.  It's an intentional feature.  And it can be changed if absolutely necessary.  But it likely won't be.

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Disclaimer: I hold Bitcoins. (But probably not for much longer).

That's unfortunate, since the value of Bitcoin is in decentralization, not "efficiency".
member
Activity: 113
Merit: 10
So, when you say "7% of electricity" as though that's supposed to be a big number, who cares?  It isn't.  The worst case is that it's slightly less efficient than the current economic system without, you know, subsidizing murderous psychopaths.  The best case is that it ushers in a new golden age of renewable energy and slightly subsidizes those living in colder areas.

You seem to assume that thanks to almighty bitcoin the world will be a better one and that there will be less wars. I do not share your belief.

Bitcoin has a serious design flaw being its potentially enormous energy consumption.I think bitcoin is an absolutely brilliant idea whose time has come. But I sure hope it will not be bitcoin that breaks through but a more energy-efficient successor.

Disclaimer: I hold Bitcoins. (But probably not for much longer).
hero member
Activity: 798
Merit: 1000
The best case is that it ushers in a new golden age of renewable energy

Would this not be the best case under any scenario where crony capitalism or whatever term you want to give to the us government+MIC+financial sector loses a lot of its power? Electricity is only one part of bitcoin mining. Energy use encompasses every stage. Bitcoin is not more efficient with renewable energy if billions of tons of earth are being dug up to find silicon for circuit boards to produce devices designed to mine bitcoin in a more electrically efficient manner in an ongoing effort to compete for more of a fixed piece of pie.
legendary
Activity: 1330
Merit: 1000
3) Energy is centralized because of the financial system (I've always wanted 3 separate power lines from 3 companies running to my house...)

You know, actually that just makes me want to underline this particular reason this argument is dumb.  Energy is not the same thing as electricity.  The electricity that is used in houses is almost completely irrelevant to the energy consumed by society.  It's something like 15%.  Yet, thanks to financialization and centralized money printing forced at the barrel of a gun, it's sold to you at 4 times the production cost.  That's the mark-up, for a technology that hasn't changed in a hundred years.

So, when you say "7% of electricity" as though that's supposed to be a big number, who cares?  It isn't.  The worst case is that it's slightly less efficient than the current economic system without, you know, subsidizing murderous psychopaths.  The best case is that it ushers in a new golden age of renewable energy and slightly subsidizes those living in colder areas.
legendary
Activity: 1764
Merit: 1007
Other than that, if OP doesn't know yet, there's also the "proof of stack" approach that doesn't require this kind of processing (but may have other problems). Or the "centrally issued and web of trust for consensus and less privacy" model that ripple.com uses for their XRPs.
legendary
Activity: 1764
Merit: 1007
I've been thinking for a while maybe it's possible to build fridges and air conditioners in a way that they need generated heat (for the compressors, or maybe some other idea) that could come from electricity spent for mining.
hero member
Activity: 798
Merit: 1000
So the gist is:

1) People in the financial industry should never work again
2) People voluntarily choosing to waste energy is more efficient than not voluntarily wasting energy
3) Energy is centralized because of the financial system (I've always wanted 3 separate power lines from 3 companies running to my house...)
4) % of GDP = % of energy used

you forgot

5) The financial system also is the cause of cancer and many other incurable diseases
legendary
Activity: 1330
Merit: 1000
Okay, first of all, I'm going to voice a general objection to your using Switzerland as an example of anything.  Switzerland is completely irrelevant to the resources consumed by the global financial system.  Most are consumed by the United States military, which you haven't even begun to account for.  Who do you think, ultimately, balances all the ledgers of the global financial system in the same way that the Bitcoin network does?  I'll give you a hint, it's the world's biggest collections agency.

So, this argument strikes me as an example of Europeans holding themselves up as models of efficient economy, while actually being completely dependent upon Federal Reserve money printing that supports the largest military on the planet by an order of magnitude, and which has, additionally, directly bailed out Europe twice in the last century.  So, with that out of the way,

You can't just go by the electricity directly used by the financial system.  First of all, you have to include other forms of energy than just electricity.  

Other forms of energy: These account mostly for heating of buildings and transport (for the switzerland case this is 1 PJ for Oil and 1.7PJ for Gas, the others don't matter. Same source as above). Now think about where the employees go that are no longer needed by banks because of bitcoin (those are not so many because new fields of banking might arise thanks to bitcoin). Those employees will work in some other office that need to be heated as well.

Why?  Why can't they go home instead?  This is like my arguing that Bitcoin mining doesn't waste energy because "what would the Bitcoin miners be doing otherwise?"  Same argument.

But, more importantly, you have to include all of the energy used by all of the subsidiary industries and by those who work in the financial system.
Are you sure they will disappear because of bitcoin breaking through? Which ones exactly?

Which people?  The ones who do nothing but leech off of others and subsist on money-printing.

The financial industry is a huge portion of the economies of developed countries.  It's over 8% of US GDP.  You can't compare the electricity used by Bitcoin to that.
Why? GDP is a bad measure for what we are looking for. We should compare apples to apples. And please quote your sources.

Source.

You know, I almost hesitated to use GDP, because it is generally a terrible metric.  But it happens to be a great measure for what we're looking for because, despite its name, GDP measures consumption and not "production".
hero member
Activity: 798
Merit: 1000
I would like to point out that my proposal for a stable value currency (Decrits - see sig) solves this problem by separating the security of the network from currency creation. Detailed more in the thread, part of my goals was to eliminate the "hardware tax" where people are forced to ever upgrade hardware used only for mining -- aka a complete waste of resources in the grand scheme of things. The quick and dirty idea for why getting rid of the hardware tax is a necessary idea for a free and stable currency: https://bitcointalksearch.org/topic/m.1891309
legendary
Activity: 4466
Merit: 3391
My prediction is that if Bitcoin gains real global acceptance, Iceland will become the bitcoin mining capital of the world. It has an enormous supply of low-cost renewable energy.
member
Activity: 113
Merit: 10
I'm open to your suggestions. But please be more specific.

It's really hard to estimate and I know I'm on thin ice here, but if I read other people on this forum just wildly guessing what fits their beliefs (or what they've read from other people doing exactly that) I want to counter with at least trying to get the right order of magnitude in a more scientific way.

You can't just go by the electricity directly used by the financial system.  First of all, you have to include other forms of energy than just electricity.  

Other forms of energy: These account mostly for heating of buildings and transport (for the switzerland case this is 1 PJ for Oil and 1.7PJ for Gas, the others don't matter. Same source as above). Now think about where the employees go that are no longer needed by banks because of bitcoin (those are not so many because new fields of banking might arise thanks to bitcoin). Those employees will work in some other office that need to be heated as well.

But, more importantly, you have to include all of the energy used by all of the subsidiary industries and by those who work in the financial system.
Are you sure they will disappear because of bitcoin breaking through? Which ones exactly?

I could think of telecommunication industries, but bitcoin needs the internet and will cause a lot of traffic in my scenario.

The financial industry is a huge portion of the economies of developed countries.  It's over 8% of US GDP.  You can't compare the electricity used by Bitcoin to that.
Why? GDP is a bad measure for what we are looking for. We should compare apples to apples. And please quote your sources.
legendary
Activity: 1330
Merit: 1000
You can't just go by the electricity directly used by the financial system.  First of all, you have to include other forms of energy than just electricity.  But, more importantly, you have to include all of the energy used by all of the subsidiary industries and by those who work in the financial system.

The financial industry is a huge portion of the economies of developed countries.  It's over 8% of US GDP.  You can't compare the electricity used by Bitcoin to that.
member
Activity: 113
Merit: 10
You also need to substract the amount of energy, fuel and other ressources that are used for our current currncy system,

OK, let's try to estimate this: I'll take switzerland as an example, just because I know where to get the figures. As you sure know, in switzerland the financial sector is a big part of economy and switzerland is highly developed in global comparison. So it's not really representative. But lets try anyway:

The Credit and Insurance Sector uses 4.4PJ of a total of 211PJ Electricity.
(http://www.bfe.admin.ch/php/modules/publikationen/stream.php?extlang=de&name=de_828732397.pdf)

As bitcoin does not replace insurances and only a part of financial services, I'd arbitrarily reduce the 4.4PJ to 1PJ that is used for things that bitcoin could replace (I'm sure its a lot lower than that). This would be < 0.47% of switzerlands electricity use.

So if the benefit of bitcoin has to compete with classical banking in terms of energy use, 0.470% of todays global electricity use is the figure.

Somebody fancy researching the numbers for global banking?
member
Activity: 113
Merit: 10
You're right.  And I haven't checked your figures.  But if you think that 7% is "significant", then we'll just have to agree to disagree.  As pointed out, this is well within the range of energy already used for heat in colder areas.

Heating with electricity is a stupid option in the environmental sense because each Joule of electrically produced heat causes even more primary energy consumption at the power plant because of low efficiency. Of course, a geothermal heat pump is a different case (But then you won't be mining at the same time anyway). So Gavin's "bitcoin heater" to me just makes things a little less worse.

And how to use your mining heat in summer anyway?
legendary
Activity: 1330
Merit: 1000
Let's say that we find a supercheap possibility to produce electricity a 1 cts $ /kWh. This only multiplies the profitable energy consumption of the bitcoin network. It's the proof-of-energy-consumption principle that is the problem in the first place.

We could even convert the whole solar irradiation on earth into electricity with an efficiency of 100% (we never will..of course). The bitcoin network would still burn a significant part of it, given that its market cap is significant on global scale.

You're right.  And I haven't checked your figures.  But if you think that 7% is "significant", then we'll just have to agree to disagree.  As pointed out, this is well within the range of energy already used for heat in colder areas.
sr. member
Activity: 364
Merit: 250
And actually this is good, it pushes more people to research for the more efficient energy resource

Unfortunately, this won't help at all. Let's say that we find a supercheap possibility to produce electricity a 1 cts $ /kWh. This only multiplies the profitable energy consumption of the bitcoin network. It's the proof-of-energy-consumption principle that is the problem in the first place.
Yes, brenzi is right. If energy is cheaper, more will be used.
It happened in a lot of other technology,too.
member
Activity: 113
Merit: 10
Internet power consumption is how much % of total world? 10%? Or 15%?

Please consider that many phone carriers, TV, mobile also use internet for data transport.

As the bitcoin revolution would be historically comparable to the internet revolution your point is valid. But it then comes back to the benefit for society that we expect from bitcoin. I'm not yet convinced, that the majority of the world's polulation will have a better life thanks to bitcoin breaking through. But that's a different topic.
member
Activity: 113
Merit: 10
And actually this is good, it pushes more people to research for the more efficient energy resource

Unfortunately, this won't help at all. Let's say that we find a supercheap possibility to produce electricity a 1 cts $ /kWh. This only multiplies the profitable energy consumption of the bitcoin network. It's the proof-of-energy-consumption principle that is the problem in the first place.

We could even convert the whole solar irradiation on earth into electricity with an efficiency of 100% (we never will..of course). The bitcoin network would still burn a significant part of it, given that its market cap is significant on global scale.
sr. member
Activity: 364
Merit: 250
You also need to substract the amount of energy, fuel and other ressources that are used for our current currncy system,
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