[schmichael]

More electricity is being burned to do the same amount of work.

I know that sounds snarky, but it's how proof-of-work systems like bitcoin work: "miners" all attempt to generate a specific hash which just means lots and lots of computation. The number of transactions per second the bitcoin protocol can handle is essentially capped and completely unrelated to hash rate as the difficulty of producing a correct hash is adjusted based on the hash rate.

[JoeAltmaier]

And still no discussion on the value of pissing away our planets energy reserves, just to create imaginary points in a paranoid game. In one view, all the electricity burned to make bitcoins is a crime against the planet.

[codehalo]

Somewhere out there some God is cursing another God for pissing away an entire sun just for some puny humans.

[brighton36]

You're correct. The problem is that bitcoin exists due to holes in the regulatory structure. People mine because people need anonymous value transfers. If you allow people to purchase drugs/gamble/capital-flight/etc with credit cards, then this externality cost will go away :)

[Shorel]

> People mine because people need anonymous value transfers.

No, people mine because a global contest was the only way to create a self synchronized global database. Why a global database? To avoid the problem of double spending that all other electronic money initiatives had. But this is a distributed instead of a centralized database.

The process of mining is a way to make all miners maintain the blockchain in working order. Every miner has a copy of the full blockchain DB and all these copies are in sync. In fact, a mined block is a list of transactions between accounts, with their corresponding digital signatures.

The incentive of giving a token size of bitcoins to the first miner that finds the correct hash signature was to make mining something that people would like to do, instead of a burden for everyone.

If you can find another way to make a group of very diverse people, with possibly diverse interests in the game, to maintain a distributed networked database in sync, welcome to the community.

In fact, some groups are starting to test one alternative to mining, called Proof of Stake. If it is better for everyone, then another currency instead of Bitcoin will take the crown.

[VMG]

Even then, you'd still need a fair way of distributing the initial value. Mining provides censorship-resistance and transparent issuance.

[JoeAltmaier]

But the 'transparent issuance' is 'give value to those that piss away the most resources'. That's got to be the worst solution for the planet we could imagine.

Other solutions: issue more value to those already holding more value. Issue more value to those holding less value. Issue more value in the form of credit transactions within the community.

In fact, since imaginary value points are real numbers, just revalue what's there? Its not like we'll run out of fractions. Imagine if you will that only 1 bitcoin was ever issued. Folks trade around ever-decreasing fractional numbers (milli-coins? nano-coins?).

[VMG]

Believe it or not, people have thought about these things. Mining wasn't chosen because the developers love destroying the environment, but because it's the only way to bootstrap the system and keep it going.

It's a system to distribute scarce tokens as fairly as possible. At the beginning, you could just do it on your own computer device. Now the space is much more specialized, the barriers to entry is much higher, but anyone can still participate.

> issue more value to those already holding more value

Again, how should the initial units be distributed fairly? Besides, this system is not attractive to latecomers and will end even more centralized that the current system.

> Issue more value to those holding less value.

So I just create free new identities out to get the scarce tokens? Then the tokens are not that scarce, are they?

> Issue more value in the form of credit transactions within the community.

Not sure what you even mean here.

> Imagine if you will that only 1 bitcoin was ever issued.

A Bitcoin already is divisible into 100 million Satoshis. Mining is a solution to the question who gets the tokens.

[huherto]

> Again, how should the initial units be distributed fairly?

Same amount for everybody. One weekly/monthly payment for everybody. Like basic income. I am just guessing, I haven't thought about it deeply.

[eganist]

Well, unless you replace furnaces with bitcoin mining hardware.

But then again, I'd rather replace a furnace with a more productive set of hardware anyway.

[wlesieutre]

A couple of things:

1) With electric heat you have to account for the energy production and grid transmission being around 30% efficient. Even though an electric heater or bitcoin miner is converting electricity to heat 100% efficiently, a majority of the thermal energy released in the power plant was already thrown out as waste.

2) Even using electricity, a heat pump beats the electric heaters. They're 2-3x as "efficient" in terms of how much heat it pushes into the house vs how much electricity it takes to do it. Technically this is measured as "coefficient of performance" instead of efficiency, since it's a ratio of heat transferred / energy consumed, rather than energy released / energy consumed (and efficiency >100% wouldn't make much sense).

3) Gas furnaces can be >90% efficient, which also beats the bitcoin miners. Even the lowest efficiency allowed by law (78%) is better than resistive electric.

4) There's more "embodied energy" in building a bitcoin miner than an electric heater, and it has a very short life as a useful miner before it's obseleted by newer chips.

Resistive electric heating only makes sense if you're looking for a low cost solution in a climate with a very minor cold season. And I highly doubt anybody's going to buy a bitcoin miner with the intent to only run it 3 weeks a year when it gets chilly outside.

Bitcoin is basically a giant scheme to extract as much value for the miners by dumping a bunch of externalities on everyone else in the form of fossil fuel subsidies and greenhouse gas production. Not a fan.

[icebraining]

Bitcoin is basically a giant scheme to extract as much value for the miners by dumping a bunch of externalities on everyone else in the form of fossil fuel subsidies and greenhouse gas production. Not a fan.

How is that different from any other of thousands of energy-intensive services?

[wlesieutre]

Most of those energy-intensive services are providing a useful service that makes the energy expenditure worthwhile. Bitcoin has some novel features like its decentralization, but I don't believe its benefits outweigh the deliberately energy-guzzling architecture. That is, of course, just my opinion.

The bitcoin network's integrity basically boils down to "Waste so much energy that a single adversary couldn't possibly waste more energy than everyone else." It then rewards individual actors for wasting more energy to make sure that stays true.

[codyb]

I totally agree, but I'm also curious how expensive in terms of resources distributing paper and metal currency is?

Presumably mining zinc, copper, aluminum, etc must have pretty big costs to the environment? Paper is mostly paper but isn't it also some special silk? At least here in the US.

Those seem slightly more renewable for paper. But yea, creating an extra power plants worth of fumes is pretty shitty over time.

I believe there's one currency which at the very least does some sorts of scientific calculations with the processing power? Maybe we should at least encourage those types of coins.

[brighton36]

no one is a fan. Not even the people who need to use bitcoin. If you feel strongly about it, advocate for the reduction of KYC and AML constraints in the incumbent value routing systems.

[toomuchtodo]

Heat pump.

EDIT: Unless you live somewhere where the ambient temp goes below ~0F, get a heat pump.

[eganist]

Hence furnaces. Unless someone's managed to create servers which become cooler upon load, I'd assume these boxes wouldn't be able to substitute for heat pumps.

But in general, I agree with you. :)

[martindevans]

What's special about 255K (0F) in relation to heat pumps?

[toomuchtodo]

Just a number I picked from domain knowledge. Almost all newer heat pumps can still efficiently pull heat out of that temperature, although some more expensive ones can go all the way down to -20 - -30F ambient air temp.

EDIT: If you're in a colder climate, in-ground coolant loops are preferred over an air transfer heat pump.

[martindevans]

Ah I see. So it's nothing fundamental, just a limit on our current heat pump technology.

[ethanbond]

I think it's a worse crime to say that because you have access to a stable, relatively apolitical currency, that no one else needs one.

Bitcoin could be hugely beneficial for fledgling financial systems, and robust financial systems can be hugely beneficial for billions of people.

Our energy crisis was not created by, and will not be solved by, Bitcoin. Numerous monetary crises could be addressed in serious ways by it, though.

[this_user]

> Bitcoin could be hugely beneficial for fledgling financial systems, and robust financial systems can be hugely beneficial for billions of people.

The latter part is true, but BTC cannot provide that. It's nothing more than a nifty hack. It kind of works, which is impressive, but it is horrible inefficient and impossible to scale due to its inherent limitations. So far the only solutions that have been proposed were to tack on even more complexity. To make matters worse, all of these solutions have remained vapourware for quite some time.

> Numerous monetary crises could be addressed in serious ways by it, though.

How? It would have not prevented the Dotcom Bubble. It would have not prevented the Subprime Mortgage Crisis. It would have not kept Argentina or Greece from borrowing way too much money. It's a libertarian pipe dream that Bitcoin will magically solve all of the world's economic problems. In fact, it would make matters worse due to unpredictable volatility and its lack of scalability. It would only drag any country trying to adopt it into a deflationary death spiral. There is a reason why the gold standard has been abolished.

[onnoonno]

> The latter part is true, but BTC cannot provide that. It's nothing more than a nifty hack. It kind of works, which is impressive, but it is horrible inefficient and impossible to scale due to its inherent limitations. So far the only solutions that have been proposed were to tack on even more complexity. To make matters worse, all of these solutions have remained vapourware for quite some time.

It is not a given that Bitcoin cannot scale, even though a select few in the ecosystem repeat this as if it is a fundamental truth.

Bitcoin is proposed by many in the ecosystem to scale as it has been before: By scaling up transactions on the chain. See http://www.bitcoinclassic.com/

[ZenoArrow]

> "Numerous monetary crises could be addressed in serious ways by it, though."

To give an example of this, Bitcoin appears to be growing in popularity in Greece:

http://www.ibtimes.co.uk/rollout-1000-bitcoin-atms-planned-g...

http://www.coindesk.com/has-the-greek-crisis-increased-bitco...

[zamalek]

> Numerous monetary crises could be addressed in serious ways by it, though.

That may be true, however, every time we've replaced one currency with another there have been unforeseen consequences decades or centuries later.

One dead-simple example: A bitcoin can be divided down to 8 decimal places and there is a limited supply. It is deflationary. No, that isn't a good thing (ignoring short-term greed). What happens when we either mine all the bitcoins, or mining more becomes computationally impossible? How do you run a business when the minimum possible amount of currency increases by $1 every day? You have a piece of bread worth $3, but the minimum amount someone can give you is $5 (then $6, then $7). Suddenly this deflationary currency that was supposed to fix everything has resulted in global hyperinflation.

"So we'll just switch to a new system at that point." We can't get countries to drive on the same side of the road, use the same measurement system or even upgrade to IPv6. How on earth are you going to roll out a global currency change overnight? Bitcoin stakeholders can't even agree on much smaller changes at the moment.

Call it a commodity, sure. It is not a viable long-term currency.

[Shorel]

If that ever becomes a problem, there's Ether to the rescue.

[ikeboy]

You can easily add more decimals with a soft fork, or with a sidechain.

[zamalek]

See: second-to-last paragraph.

[ikeboy]

What change that's less significant than allowing individual satoshis to be further divided has been refused as a soft fork? (Bigger blocks is far more significant.)

You don't even need a fork, you can just use off chain middlemen that add extra units, or if it's done as a sidechain then no agreement is needed and it's all on chain.

[a_humean]

I think many people would say that bitcoins aren't apolitical, but a new kind of gold buggery. Making it difficult in principle for a government treasury or a central bank to make certain kinds of decisions about monetary policy is political.

[VMG]

I guess it's political in the same was as encryption is.

Encryption makes it difficult for the government to make certain kinds of decisions as well.

[a_humean]

Yes, but in the case of encryption we have competing issues relating to commerce, privacy, crime, and national security that have to be considered and weighed - which is a political process. In the case of gold buggery all we have is a political ideology of unrelenting suspicion of government trying to enforce through law or technology ideas about monetary policy that fall well outside of the economic mainstream all in service of depriving government of tools we know to be very effective at influencing the economy.

[jacalata]

Also a ton of people who want to get rich.

[VMG]

Would you say the suspicion is justified in, say, Venezuela or Zimbabwe?

[hasch]

miners do more than just burning energy, and without this mechanism, the price can't be justified. a really forward looking perspective is, how a structure on top could be created to leverage bitcoin without mining. if you figure out something clever, you can call yourself the saviour of the planet :-)

[schmichael]

> miners do more than just burning energy, and without this mechanism, the price can't be justified

The price is based on utility of the commodity and speculation about its future utility, not mining costs. Put another way: more hash power does not raise the value but more value may raise the hash power (by making it profitable for less efficient miners to mine).

> how a structure on top could be created to leverage bitcoin without mining.

There's lots of activity around alternatives to bitcon's proof-of-work based mining: proof of stake, proof of activity, etc. Just search "proof of work alternatives"

[nostrebored]

Savior of the planet? Bitcoin without mining is just fiat money sans government.

Bitcoin is not necessary. The environment is. Easier solution is stop operating a power plant to play speculator on play money.

[CyberDildonics]

This is so misguided I can barely think of a place to start. Do you think the current financial system is optimal? The financial industry currently makes up 8% of the entire US economy. Do you realize that bitcoin mining hashes and the number of transactions they can process are not linked?

[icebraining]

One may believe that the current system is not optimal, yet not believe that Bitcoin is improvement.

As for the transactions vs hashes correlation, while technically true, in practice the two are inevitably linked, as the currency must be protected proportionally to the sums it manages. As more value is stored and transacted, so the incentive to attack it increases, and so an increase in the cost of attacking it is required. Though it might trail off at some point, Bitcoin's history has shown this relation to exist.

[MichaelBurge]

Does the 'financial industry' include loans, insurance, and stock brokers? Or - this being compared to Bitcoin - are you strictly speaking about 8% of the economy being devoted to maintaining point-to-point transfers of money using credit cards, checks, or wire transfers?

In practice ACH transfers within the United States are free and clear within a few days(giving you time to catch fraud). There's also very little technical barrier to transferring money abroad, although there is risk to the bank.

Credit cards are a different matter. They have to clear instantly so the merchant is guaranteed payment(excepting a chargeback). Bitcoin (usually) clears in an hour, or at least 10 minutes, so it's unsuitable for realtime financial transactions unless you build a financial industry on top of it to mitigate risk.

[Shorel]

It could be argued that the electricity burned to make and watch reality shows is an ever bigger crime, in both terms of total energy wasted and the utility to the human species.

[27182818284]

I've never mined, but the serious miners I did know because energy is expensive, sought other means to power it like sheds with solar etc.

[cookiecaper]

The difficulty mechanism has proven to be the Achilles Heel in bitcoin's design and is responsible for the blocksize impasse as well as the waste of infinite CPU-millennia. I'm sure that more interesting negative effects will be observed before the project concludes.

[VMG]

These "imaginary points" have very useful properties that cannot be achieved any other way.

Bitcoin mining is still vastly more efficient and sustainable than gold mining.

Edit: dear downvoters, rebuttals are welcome

[icebraining]

I think the belief that they're useful is not widely shared.

[VMG]

Do you know any other "imaginary points" that are scarce and can be transacted in an open system?

[icebraining]

There are many things that I believe not to exist, which doesn't mean they've be useful if they were, in fact, to exist.

[VMG]

Do you think money is useful? How about digital money?

[gnaritas]

Because that point is just silly, far more energy is burned on the old system making paper bills than on bitcoin; don't hear you complaining about that. If energy is such a big concern to you, why aren't you screaming to replace the old energy inefficient system with the new more energy efficient bitcoin?

[JoeAltmaier]

citation needed. There is no limit to the energy burned to create bitcoins; it is increasing by design.

And, other digital currency implementation don't require 'mining' at all; just the paranoid ones.

[gnaritas]

> There is no limit to the energy burned to create bitcoins

Nonsense. No one will burn more energy to create bitcoins than those bitcoins are worth, the limit is market price. And if you think bitcoin is burning more energy than the existing banking system, well then you're just not in touch with reality my friend.

> And, other digital currency implementation don't require 'mining' at all; just the paranoid ones.

Which is why all of those other coins are little more than failed experiments; lacking proof of work, you lose the main feature of bitcoin, trust-less transactions. None of the other ideas work to achieve the actual goal of a digital currency, trust-less transactions.

[JoeAltmaier]

They are independent (trust and mining). Mining is just one solution to minting, and only chosen to limit the rate of inflation. Other solutions exist. Don't get the cart before the horse.

[gnaritas]

> hey are independent (trust and mining).

Oh but they are not. People wish it so but it just ain't so.

> Mining is just one solution to minting

Yes, the only successful one. Every other solution that tries to remove mining comes with bigger flaws which why no other coin has taken off. Every alt coin that exists today is a failed experiment.

> Other solutions exist.

Other failed solutions that have prevented any other coin from being able to process payments of the scale Bitcoin processes.

Mining is core to Bitcoins success as it's the only solution that actually works well enough to have gained traction.

[EdHominem]

The ones that don't involve a small list of nodes that you are required to trust to get anything done.

[JoeAltmaier]

Exactly. Its a matter of trust (i.e. the paranoid part), and we're burning the planet's limited resources so that we feel better about that.

[EdHominem]

Do you know how many resources we "waste" making non-copyable bills, staffing the Secret Service, running payment networks, etc?

[VMG]

> Because that point is just silly, far more energy is burned on the old system making paper bills than on bitcoin;

Plus they still manage to destroy economies with hyperinflation. They're more wasteful in providing a worse product.

[blah5432]

all the electricity burned to make bitcoins is a crime against the planet

Actually I'm happy to have a chance to say this:

Fuck the planet.

[IkmoIkmo]

> More electricity is being burned to do the same amount of work.

You're assuming hashrates and electricity consumption are 1:1, ignoring improvements in efficiency.

> The number of transactions the bitcoin protocol can handle is essentially capped and completely unrelated to hash rate as the difficulty of producing a correct hash is adjusted based on the hash rate.

That is true, but one must also consider that transactions & value transfer is not necessarily 1:1 either. A transaction can carry information which refers to multiple transactions, or is a transaction for a billion dollars. So value transfer is not necessarily capped, although in practice of course it is right now.

Further, to say there's no relation isn't true, either. Transactions are not dependent, but they are related to hash rates to some extent, and by virtue of the protocol this will increasingly become so, as transactions will be the main source of income that funds hash rates, there is indeed a relation.

[schmichael]

> You're assuming hashrates and electricity consumption are 1:1, ignoring improvements in efficiency.

You're right, but since the price of bitcoin has risen over the past month the increase in hash rate could be due to miners turning back on less efficient equipment that wasn't profitable at lower prices.

It's really impossible to know, but since the price is rising I think it's likely additional hash power would mean more mining equipment coming online -- therefore using additional power -- while leaving existing mining hardware but still profitable hardware running.

[CydeWeys]

> More electricity is being burned to do the same amount of work.

Not true at all. The total hash rate has gone up a factor of 10^11 since the early days of Bitcoin, but total electricity consumption certainly hasn't gone up by that much. Data here: http://bitcoin.sipa.be/speed-ever.png

Most of that can be attributed to efficiency gains. More efficient miners are coming on the market all the time, and in any given year, the vast majority of increased hash rate can be explained by better hardware, not another 100-1000X in electricity consumption.

This latest hash rate increase is most likely caused by the release of the latest batch of mining hardware, see, e.g., Antminer: https://bitmaintech.com/productDetail.htm?pid=00020150827084...

[ikeboy]

Hash rate going up doesn't directly imply more electricity has been used. If it's because more efficient miners have been deployed, they could be using the same amount of electricity for doing more work.

The relevant number is bitcoin's price*the block reward. That's exactly how much one block is worth, and so that's how much it should cost to mine one block. If it diverges from that number then either miners will turn off or new miners will turn on.

[placeybordeaux]

In general I agree with you, but it's not quite that simple. A lot of the increases of the hash rate are due to more efficient machines, not more power being devoted. Also frequently bitcoin mines are established where power is very cheap.

[davideous]

We should pump the waste heat into greenhouses and grow tulips.

(https://en.wikipedia.org/wiki/Tulip_mania)