Guest essay by Eric Worrall
Grist has joined the rising chorus of greens condemning the vast energy expenditures of Bitcoin miners.
Bitcoin gobbles up clean energy — just when the real world needs it most
By Eric Holthaus on Feb 16, 2018
One of the biggest near-term threats to our clean energy future doesn’t even physically exist — but the danger is increasingly very real.
The stupendous growth of the virtual currency Bitcoin is creating real-world consequences. Massive number-crunching computer facilities for mining Bitcoin have popped up in parts of the planet where renewable electricity comes especially cheap. And now it looks like this mining is starting to siphon green energy away from everybody else.
…
To maintain security as its network grows, the math problems that Bitcoin “miners” must solve are getting ever more difficult. That requires a constant supply of additional computing power, which requires a constant supply of additional electricity. One Bitcoin transaction uses as much energy as a single U.S. household consumes in three weeks, and there are nearly 200,000 transactions around the world every day. In total, Bitcoin now consumes about as much energyas Portugal.
And it’s about to get much, much worse than that. A couple of months ago, I wrote that Bitcoin mining’s rapid growth was unsustainable, because the electricity required to feed it would overtake the supply. In Iceland, that’s starting to happen.
“We are spending tens or maybe hundreds of megawatts on producing something that has no tangible existence and no real use for humans outside the realm of financial speculation,”Smári McCarthy, an Icelandic member of parliament recently told the Associated Press. “That can’t be good.”
…
Read more: https://grist.org/article/bitcoin-gobbles-up-clean-energy-just-when-the-real-world-needs-it-most/
I must say its entertaining watching greens who believe in the imaginary climate crisis condemn the enthusiasm of people who believe in an imaginary currency.
But sooner or later Bitcoin’s insatiable thirst for electricity may spill into real world consequences – ordinary people could experience power price spikes or worse, for the sake of an activity which produces no real world value.
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Anywho, nevermind bitcoin, I’m in the process of creating a new crypto, called Climacoin, and am currently seeking backers for it. I haven’t worked out all the details yet, but suffice it to say, it’s going to be HUGE. The target date for a launch will be April 1.
The UN beat you to it.
https://wattsupwiththat.com/2018/01/24/un-embraces-bitcoin-technology-for-climate-data-integrity/
It has value if people will pay for it.
*ALL* value of anything is a subjective value judgement. It is the human mind which imparts value to products, goods, desires, anything. Even objects which have an empirical existence have only the value assigned them by a human mind.
Taking off after bitcoin on the basis that it has no ‘legitimate’ or ‘real’ value is to take off down a path of economic fallacy with the first step in that direction.
Noted economist Ellen DeGeneres compared bitcoin to an online baby goat, but confessed that she’d rather have the baby goat.
https://twitter.com/theellenshow/status/964287117466640389?lang=en
Here, I fixed it:
Massive number-crunching computer facilities for
mining Bitcoinsupercomputer modelling climate have popped up in parts of the planet whererenewableelectricity comes especially cheap. And now it looks like thisminingmodel hustle is starting to siphon greenenergybacks away from everybody else.Climate models are simply grant miners.
I’m sure the Political classes will use this as the perfect excuse to completely nationalize Electricity generation and supply, then regulate it utterly….. Never let a crisis go to waste.
No One has explained what happens when the 21 million limit of bitcoins is reached. At that point you cant mine anymore. Then the bitcoin becomes little more than an expensive rare piece of art that you cant even see and appreciate. It will never replace gold as the real worlds money supply. However possessing gold does nothing for you. You cant earn interest on it. However you can trade it for other currencies and goods the same as you can trade bitcoin for other currencies and goods. Gold has the advantage however that the limited supply will always increase a little bit so it will always be a tradeable asset instead of an increasingly rare ( ratio of bitcoin to the population) asset. The rarer something becomes the harder it is to be used for transactions. Bitcoin will eventually go down that route. The originator of bitcoin should never have made a limit. The problem is how do you create a currency with artificially built in increases to the total without running the risk of making those increases so large eventually that you get runaway supply. Runaway supply always ends when the you have to use wheelbarrows to transport the money to buy a loaf of bread. People then switch to another currency. Runaway demand always ends when the bubble bursts. The bubble bursts when you run out of people that are pushing up the demand. Choice keeps the demand-supply economic equation working. Attempts by governments to either limit demand or limit supply always fail because people have choices. The largest bitcoin miners are those in Mongolia where the price of electricity is the cheapest in the world because of low coal prices. If the government attempts to limit bitcoin mining you will have black market mining setups. The cost of enforcement will exceed the extra costs of increased energy prices caused by bitcoin mining demand. Greens (who are the 21 century communists) are always wanting the government to step in and regulate everything. They are now wanting to put taxes as high as 40% on eating meat. What this will do to the black market meat demand is everyones guess. Suffice it to say it wont end in a good way. Just as greens dont realize that 100% renewables is an impossibility , they also dont realize that tampering with the supply demand equation will never work. There is no difference between using electricity for bitcoin mining or using it to play video games. Both are activities that may give the user pleasure( either in anticpated profits or smugness of having won the game but in the end are useless. Attempts to stop humans from useless activities are all doomed to failure.
The limit on bitcoins will never be reached. That’s because the algorithm cuts the reward (the number of bitcoins you get for successfully mining) in half for every 21000 blocks.
Okay, eventually you’ll get to the point where the rounding error (bitcoin is only calculated to eight decimal places) is arbitrarily close to the limit and you’ll have to stop. But the current trending puts that in the year 2200 or so. I imagine they’ll probably figure out an acceptable change to the protocol by then.
Alan Tomalty
February 19, 2018 at 10:48 am
No One has explained what happens when the 21 million limit of bitcoins is reached.
——————–
Oh, well, it has being explained already, same as with every other “peakanything”. Like peak oil etc.
Lots of literature, most of it “scientific”. No any reason for any other kind of explanation I think, if you have time to waste there I think where you may get that explanation…:)
cheers
No one has explained?
FFS
DAFS
https://cryptocoinmastery.com/what-happens-when-all-bitcoins-have-been-mined/
My favorite post in a long, long while. Mosh scares the hell outta me and merely reinforces why I have no business commenting on Anthony’s blog ha ha ha!
A phoney ‘currency’ upstaging a phoney science. Historians will have field day.
We live in interesting times.
The only thing I hate about all this “Crypto-currency mining” is it has driven the price of newer video cards into the ridiculous range! Since graphic cards are very efficient number crunchers, miners are scooping up all the new cards as fast as the chips can be set, driving the price up 100%. My computer is getting old and it is soon time to build a newer generation one, but the graphic card price is the thing holding me up.
That is only a temporary problem . Either newer technologies will come along or new suppliers will spring up to sell you.
Wrong. The supply of GPUs is fixed by the wafer capacity of TSMC. Today thats 80K 16nm wafers per month, growing to 100K after nanjing comes on line (june) and ramps. That extra capacity wont come close to filling the demand. There are only two suppliers of GPUs: AMD and Nvidia. There will not be a new supplier and if there was he would have to fight those two for the same number of wafer starts at TSMC.
As for new technology, yes, wait and see. some interesting stuff
So that’s what the problem is. I’ve been looking for a video card so I can run Blender, but anything with enough horsepower costs an arm and a leg.
People should be more cautious about commenting on things they do not know much about. For those who have done their homework on these subjects, you are exposing yourself as susceptible to misleading narratives.
The most obvious problem w/ this article is that all forms of currency consume some amount of energy — be it running a mint, transporting the currency, protecting the currency, whatever. The article fails to calculate the cost of traditional currency, so the reader has nothing to compare cryptocurrency against.
People who already follow the cryptocurrencies are well aware of this type of article. People widely vary in their comprehension of these subjects, so the journalism is all over the map.
That’s a very good point. I wish I’d made it!
paradigmsareconstructed February 19, 2018 at 11:38 am
People should be more cautious about commenting on things they do not know much about. For those who have done their homework on these subjects, you are exposing yourself as susceptible to misleading narratives.
The most obvious problem w/ this article is that all forms of currency consume some amount of energy — be it running a mint, transporting the currency, protecting the currency, whatever.
_____
I think the point is that enormous energy costs that are built into this type of currency.
What are the energy requirements of traditional currencies?
You raise the point, but provide no facts to support your position.
Ultracrepidarians run amok whenever gold is discussed.
There are so many misconceptions about gold on this thread that it is beyond repair.
It is always interesting to see how these sort of damaging scams, Global Warming, ‘Renewable Energy’ and Bitcoin are naturally drawn together by natural forces. Here false science, false problem and false solution meet false currency.
re: “parts of the planet where renewable electricity comes especially cheap”
I’m really curious where those places are. The only reputable stories I’ve read about bitcoin-electricity arbitrage were in Venezula where the government artificially depressed the cost of (fossil-fuel-generated) electricity.
Mike Rossander
February 19, 2018 at
I think he is pointing at SAUS, or maybe Germany! 🙂
You are curious?
Stay curious, because the secret of this business is prospecting for cheap unused power.
I could name the countries and some of this has been laid out in public documents, but there is
no benefit in proving to you what I see firsthand everyday. Unless you want to pay.
Hang on a tick, Mosh, isn’t cheap power: cheap fossil fuel power? Or at the absolute worst: hydro-power which is frowned upon by the alt-left?
You seem to have a sliding scale when it comes to ethics, but adept at finding and exploiting Ponzi schemes when it suits your fancy.
You guys dont get it.
Steven Mosher February 19, 2018 at 11:23 pm
You guys dont get it.
——
I get it alright. Bitcoin is a speculative investment, not a viable currency.
I live in a city of over several million people, and none of the several million different businesses in my area accepts accepts Bitcoin.
Why?
“I get it alright. Bitcoin is a speculative investment, not a viable currency.
I live in a city of over several million people, and none of the several million different businesses in my area accepts accepts Bitcoin.
Why?”
########################################
What Reg doesnt get is the Phase of adoption we are at.
Those of us who were around for the begining of the internet see the parallel.
In terms of deployment and use we are at the Earliest stages.
Super early, think the equivalent of 1992
People used to think the internet would never replace the fax.
The broad lansscape looks like this people are moving away from cash payments to an all digita world.
Take china, without wechat pay it is nearly impossible to get a cab or DIDI.
We see a day when 100% of every payment you make will be digital, via card or phone.
The problem with these systems is they all rely on a third party: a bank, the government.
Bitcoin is very simply an alternative system of digital payment and value that wont rely on these third parties.
So why does your city not have places where you can spend bitcoin? You might have asked in 1992 why
no businesses in your town had internet.
That is how early we are in this technology. So, I’ve spent my adult life at the edge of technology. Stealth in the 80s, Arpanet, 3D graphics, MP3, smart phone, R. We are probably 5 years away from the beginings of main stream adoption, maybe 10. There is a lot to do, 2 layer payment systems ( millions of transactions per second) and decentralized exchanges..
If you can spot technology trends and want in. Go ahead and join.
Another self- limiting ‘problem’ already constrained by price mechanisms within the system. If the greens manage to politically-engineer electricity to be supplied when nobody wants it, then they shouldn’t be surprised that the system evolves to find a use for it.
While not as entertaining as videos of dogs chasing their own tails, it does at least have the merit of keeping the professional complainers occupied and not doing something more harmful.
Pelople who believe in immutable computing are suckers in the vein of CAWG believers.
Clearly here at WUWT many are pontificating from a platform of ignorance.
The Bitcoin ‘engine’ programmers can do whatever they like including writing routines to cause every Bitcoin to eat every other Bitcoin then delete every block in existence.
CAGW (bloody American Wire Gauge)
“Pelople who believe in immutable computing are suckers in the vein of CAWG believers.
Clearly here at WUWT many are pontificating from a platform of ignorance.
The Bitcoin ‘engine’ programmers can do whatever they like including writing routines to cause every Bitcoin to eat every other Bitcoin then delete every block in existence.”
wrong.
The programmers cannot do anything they want. they can try but they will fail
The code that runs Miners and Nodes is Open source.
So, If one group, or a single coder decides to change the code, it means nothing since the Miners
and nodes can just run the old software.
Recently one group ( bitcoin cash) decided to change the code and increase block size.
To make this work they had to: Find enough Miners to agree to the change; Create new node computers
that run the chain.
They ended up with about 10-20% of the miners and nodes running new rules for Bitcoin. This is called a fork. The Orginal chain and the fork are both alive, with one coin worth 11K and the worth 1.5K
The software guys can change the code all they like, but unless Miners and Nodes run the change nothing
will happen. So you need consensus to make it work.
Imagine you are miner with 100 million dollar capital investment. Imagine the software guys change the code to destroy the chain. YOU SIMPLY WONT RUN THAT CODE. you will run the old code. Its open source.
All other miners will also not run the new code and the chain will go on.
Through out the history of BTC there have been many attempts to fork the code and build a new chain.
The old chain keeps running because no miner wants to trash his investment.
Rubbish a crypto logic bomb can be propagated over time via innocuous patches.
wrong.
The Git is public. The Pull requests are all public. you cant simply introduce changes.
FURTHER, no miner or node is OBLIGATED to run any new software.
Changes to software cannot be forced on miners or nodes. all upgrades are optional.
If you try to run different software and change the chain rules, your blocks will be rejected.
“The Bitcoin ‘engine’ programmers can do whatever they like including writing routines to cause every Bitcoin to eat every other Bitcoin then delete every block in existence.”
Programmers cannot do that. Miners could, if they together agreed (or at least a big enough proportion of them, more than half for sure, to validate a new block into the chain that fit their desire). This would of course kill the BTC, so the question is, if you have effective control of the system as hypothesized, do you kill it for a big one shot and face the legal aftermath, or do you just enjoy the golden goose?
Just like a bank already can, actually. A bank, or some mad evil genius if he took control, he could do whatever he wants out of bank accounts, too.
And this actually happened,
In that respect, BTC is safer than a bank
Miners build blocks.
Nodes validate them
Rubbish a crypto logic bomb can be propagated over time via innocuous patches.
wrong:
If Bitcoin transactions are truly anonymous, as claimed, then it is of huge value in maintaining privacy, and also potentially in money laundering, ransom demands (both real and fake), etc.. It’s becoming increasingly difficult, if not impossible, to conduct any online transaction without revealing your identity, so much so that it sometimes seems that this data gathering is the primary goal of online businesses, to the point of sacrificing potential profits.
Here in Canada, the proposed legalization of cannabis certainly seems to follow this trend. Customers will not be allowed to purchase the product without fully identifying themselves. Of course there is a clear profit motive for government in this, as determination of being “under the influence” of cannabis is left entirely to the whim of police, there being no objective test.
And since all legal cannabis users will be “known to police” they can be targeted, unlike alcohol consumers, who can still pay cash up here.
So many more people will pay hefty fines or bribes, or both, no matter how competently they’re driving. For the wealthier, trial lawyers will be reaping the benefits.
Logically, this will discourage current cannabis users from buying from legal channels, and so should do little to eradicate the underground market. In fact, it may stimulate it, because government here has announced it’s going to price the legal product some 50% higher than current black market prices. Evidently, they are more interested in collecting data on the trusting public (their favourite game species) than in eradicating illegal use or bringing in revenue.
So, in a way, illegal pot is to legalized pot what bitcoin is to legal tender.
1% of bitcoin transactions are involved in illicit activities
Steven Mosher February 19, 2018 at 11:16 pm
1% of bitcoin transactions are involved in illicit activities
—
Wow! Have any facts to back that up, Mosh?
i would think think those that are involved in illicit activities would tend to suppress their activities.
You would think that clowns would learn by now.
Now, will you learn the lesson of being skeptical of your own skepticism?
https://info.elliptic.co/whitepaper-fdd-bitcoin-laundering
“Now, will you learn the lesson of being skeptical of your own skepticism?”
Do you have this paper posted on your website for download?
I’d like to read it but they want contact info…nah.
sy computing
DAFS. you can find a synopsis. or download it. If you dont know how to conceal your identity
they you have no business asking questions
Nah I’ll pass rather than be a liar…but hey thanks anyway!
“If Bitcoin transactions are truly anonymous, as claimed…”
It is not anonymous, it is pseudonymous, which makes a huge difference.
Ordinary bill are anonymous: you never know from which hand to which hand it passed before yours. BTC is the very opposite: all the movements of a BTC from it’s birth are logged, as are all the money flows (if any) involving “otropogo” (whoever use this pseudonym).
If what you say is true, then the several uncontested reports of ransomeware payments made in bitcoins must all be fake news. And if that were true, then it would amount to a conspiracy to mislead the public by all of the major English language broadcast networks in North America. Not that that would be a first, by any means.
During the recent news “flash” over the Russian meddling indictment, I heard a former senior spook say solemnly that a grand jury indictment is never made unless the evidence is bulletproof.
Perhaps because the same PBS Newshour broadcast reviewed the new blockbuster movie “Black Panther” that statement made me think of the L.A grand jury indictment against Shirley Sutherland, wife of Donald, mother of Keifer, and daughter of Tommy Douglas, the late Saskatchewan Premier and then Leader of the New Democratic Party in Ottawa. That indictment accused her of supplying hand grenades to the Blank Panther movement.
She had that indictment hanging over her head for about a year, IIRC, long enough, in any case, for the publicity to cost her dad his party leadership and any chance of becoming Prime Minister of Canada, before the indictment was simply dropped and she was deported as an “undesirable alien” (same as former UN Secretary General Kurt Waldheim – falsely accused of being an accessory to war crimes, but refused rehabilitation by Colin Powell when the relevant CIA files were declassified).
Talking about fake news – well, how can one forget the case of the “murdered” Kuwaiti premies in the Gulf War? I guess the CIA’s “intelligence” wasn’t good enough to debunk this story told by the niece (IIRC) of the Kuwaiti ambassador, and propagated so successfully by a prominent US PR firm. The NY Times and the Washington Post must have been asleep at the wheel that time too…
It seems to me that bitcoin is valuable because it preserves privacy of financial transactions, something we certainly don’t have any more in Australia, where the government can look into your bank account any time it wants to.
Then you are wrong. All is public with BTC. You only get as much privacy as the pseudonym you use, as long as nobody cares to know who you really are. It is very dumb to use BTC for any sort of operation that would attract the attention of a government, as you can safely bet they will pretty quickly connect the pseudonym to the relevant physical person.
Some even say that the whole thing was launched by some intelligence service for this very purpose. Whether they launched it or not, they surely ride it.
“It is very dumb to use BTC for any sort of operation that would attract the attention of a government”
Doesn’t seem to bother terrorists. I suspect they attract the attention of government:
Jihadists See a Funding Boon in Bitcoin
https://www.wsj.com/articles/jihadists-see-a-funding-boon-in-bitcoin-1519131601
From the article sy computing referenced:
Al Sadaqah has realized what other violent groups have found: Raising funds in cryptocurrencies can evade the rules the global banking system has put in place to block terror financing and money laundering.
“It is fast, efficient, and does not pass through the same interest-loaded and traceable routes that any usual payment methods would go through,” Hassan Abdo, an al Sadaqah spokesman, wrote to The Wall Street Journal in a text message. “This way we and our donors can keep our full anonymity.”
Yaya Fanusie, an ex-CIA analyst who is the director of the Washington-based counterterrorism think-tank Foundation for Defense of Democracies, has been tracking al Sadaqah’s bitcoin accounts for months. He said it is difficult to confirm the identities of such groups online because they hide behind fake personas and use technology to protect their identities.
The terrorist are using crypto currencies, and specifically Bitcoin, to evade traceability. The CIA says they have difficulty tracking the terrorists that use Bitcoin for terrorist funding. As such, it gives the appearance of advocates of Bitcoin and sellers of equipment to manufacture Bitcoin being unwittingly or knowingly complicit in aiding and abetting global terrorism. It makes one wonder about their ulterior motives, when they offer feeble assurances that Bitcoin is not being used in that fashion…. and the CIA flat out says it is.
Who the hell is going to mine — that is, who is going to keep the blockchain alive — if and when the bitcoin market price falls below its marginal cost of production?
Well that was a VERY interesting thread with lots of great ideas comments and rebuttals about Bitcoin.
However it’s all a bit old hat/outdated as we now have a fork in bitcoin (so 42 million not 21) and the new improved Bitcoin called Bitcoin Cash.
In the interests of keeping up with technological progress I suggest we have a NEW thread just to discuss BCH as it seems a much more practically useful currency so inevitably will be winning over the outdated slow silly Bitcoin in the future.
its still 21 million. If you think BCH will win. Money:mouth
I thought I knew nothing about bitcoins before I read this thread, now I KNOW I know nothing about bitcoins.
Sure as heck ain’t going down that rabbit hole 🙂