[keithtom]

Re environmental costs, I have yet to hear anyone make an analysis of the environmental cost of the banking system or an equivalent; that is, how much to warm all the offices, the computers and servers, the transportation costs of cars & planes for all the employees.

Also, proof of stake will reduce 99% of the environmental cost.

[TomSwirly]

> I have yet to hear anyone make an analysis of the environmental cost of the banking system

I immediately found this: https://www.bloomberg.com/opinion/articles/2021-01-26/is-bit...

"One Bitcoin transaction would generate the CO2 equivalent to 706,765 swipes of a Visa credit card,"

Another way to look at it:

Bitcoin uses over 0.5% of the world's electricity: https://interestingengineering.com/why-bitcoin-mining-consum...

With that, Bitcoin does about 300,000 transactions a day. https://www.statista.com/statistics/730806/daily-number-of-b...

But there are over a billion daily credit card transactions alone - 3000 times as much.

So if each credit card transaction were replaced by a Bitcoin transaction, we'd use 30 times as much electricity as the entire planet produces.

---

These numbers are so grossly lopsided and so widely bandied about that when I hear someone say, "I have yet to hear anyone make an analysis of the environmental cost" I think, "Perhaps you don't want to hear it."

[ohgodplsno]

The banking system _exists_. It's what powers all our daily transactions. It's what has been tried and tested for hundreds of years, and got regulated. Even if Ethereum or coin-of-the-week takes off, this existing banking system will not go away. What you're doing is a well known crypto-lover tactic to distract from the fact that cryptocurrencies are an ecological catastrophe.

Meanwhile, we're burning coal to produce bitcoin whose only value is that number gets green and goes up. Eth is slightly better on that point, but still wasted multiple TWh of electricity while it was in PoW mode, and it still is today.

[Karunamon]

I strongly disagree with this loaded characterization of mining as "waste". Converting power into value is the opposite of waste, and that's not even addressing the network security that it provides. Mining provides useful work. If you don't like cryptocurrency, fine, but don't pretend that no value is being created or that no purpose exists.

Waste would be an incandescent bulb that throws away the majority of its energy generating heat that isn't used for any purpose.

[Retric]

The issue isn’t the useful product of light or a functional crypto system, the issue is the amount of waste heat produced by the light bulb or data center.

This should be obvious when you consider proof of work systems that generate less waste heat by using a memory bound rather than a computationally bound algorithm. They both operate on the principle of wealth destruction as all proof of work algorithms do, but you get different externalities.

Interestingly, if you found something really useful to do with the waste heat of crypto then the systems would become roughly equivalent.

PS: The idea of a memory bound algorithm is 1 million dollars of RAM consumes less energy than 1 million dollars of ASIC’s.

[Karunamon]

the issue is the amount of waste heat produced by the light bulb or data center.

..which in the case of the average crypto, is overshadowed many times over. One block mined equates to $333K worth BTC generated alone, and that's not counting the value of every transaction included in that block. A block happens every 10 minutes give or take, so in an hour, that's about 2 million worth of coin generated and 13K transactions.

There's no way on earth every bitcoin miner, combined, is using $2M+ worth of electricity every hour, even factoring in negative environmental externalities (which in the case of crypto mining, will be lower than most people think given their proximity to renewable, hence cheap, energy.)

It is, objectively speaking, not a waste.

[Retric]

Coal power plants generate more value in the from of electricity than they lose value as waste heat. Otherwise they wouldn’t operate. But, clearly the creation of value is independent of something being wasted as you can have more or less efficient power plants that generate the same value using more or less fuel and thus more or less waste heat.

Similarly, as I just pointed out different algorithms would use more or less energy and therefore be more or less efficient. Thus the heat produced is a waste byproduct mining, and electricity is the fuel. A more efficient process simply uses less fuel though it may have higher capital costs.

The same is true of say cars, you’re burning gas because driving is useful. But, increasing efficiency means less fuel while creating identical value etc etc.

[Karunamon]

But that heat you speak of applies to any kind of long-running computation. Whether that be render farms, ML model training, distributed computing like BOINC, or anything else with similar properties.

It seems to me that crypto is being unfairly singled out. Things that are digital have meaningful existence.

[TomSwirly]

It's a complete waste. It turns energy into nothing at all.

[Retric]

Comparing the banking sector to crypto is wildly optimistic. Crypto is still smaller than just the Gold market both in number of transactions and total stored value of 9.4 trillion. Gold transactions, mining, and storage still produces significantly less CO2 while also being useful in industry.

That’s not meant as an attack, it’s simply a ballpark comparison. For those pro crypto take it a sign of possible future growth.

[MagnumOpus]

The banking system does a lot of other things than transaction processing. Mortgages, loans commercial banking, trade finance, acquisition financing etc are 95% of what banks do, and cryptocoins won't replace them in any way.

Of course even if you count all that, the power consumption per transaction will be at least five orders of magnitude lower than the 0.6MWh per transaction in BTC.

[shuckles]

This whataboutism ignores the logic of the question: the banking system is not incentivized to burn power. You would expect each node to try to minimize their input costs to maximize returns. For a given unit of compute, putting in more energy does not increase profits for any participant in the traditional banking system. This isn’t the case for cryptocurrencies, so they are asked a fair question.

[svachalek]

This isn't the case for Proof of Work cryptocurrencies. Many newer networks are moving away from the POW model.

[shuckles]

There might be an answer to the original question. I was pointing out, “But what about banks!?” is simply not a good one, and why it isn’t.