[beaconstudios]

There is a meaningful service cost, it's just paid for by mining. Environmentally there's also a massive cost, one that is not offset by the benefits bitcoin brings - which is primarily financial speculation and scams.

Cryptocurrency is probably one of the worst inventions in recent memory.

[anderber]

> Cryptocurrency is probably one of the worst inventions in recent memory

Keep in mind that not all Cryptocurrency use mining. Nano, for example, is zero fee, environmentally friendly coin that is incredibly fast. Bitcoin gets all the talk but there are some great and interesting tech out there. Get yourself a wallet (https://natrium.io/) and I'll send you some so you can try it out.

https://nano.org/

[veltas]

https://docs.nano.org/what-is-nano/overview/

> Every block must also contain a small, user-generated Proof-of-Work value which is a Quality-of-Service prioritization mechanism allowing occasional, average user transactions to process quickly and consistently. The PoW computation for a transaction typically takes a few seconds on a modern desktop CPU.

Seems to me like this hasn't changed anything.

[anderber]

The proof of work is done on the user end, there are no miners.

[Yuioup]

I keep hearing bitcoin apologists saying "Bitcoin is environmentally unfriendly but... check this out" as if that would solve the record temperatures we're having at the moment.

How about we stop using cryptocurrency completely. Time for the UN to get together and get this banned.

[notch656a]

You can't ban it. I mean you can say you've banned it, but you can't ban crypto. It's way harder than banning the drugs found everywhere in the world (I guess not a lot in Singapore, you willing to start chopping heads off for your goal?)

The best you can do is decide you don't like it, tell people not to use it, choose not to accept it, not to buy it, and rally your friend not to. That's all cool with me. But you can't stop crypto. If it dies it will be because something that replaces the advantages it presents comes along and people can't help but switch over to that.

[matheusmoreira]

Cryptocurrency's not responsible for even 1% of global energy consumption.

> How about we stop using cryptocurrency completely.

> Time for the UN to get together and get this banned.

How about we get the developed nations to stop trading with China instead? How about we get them to stop burning fossil fuels?

They're the ones ruining this world. Cryptocurrency is merely a little raindrop compared to that ocean.

[squarefoot]

> Cryptocurrency's not responsible for even 1% of global energy consumption.

1% is huge, especially considering the trend: Bitcoin alone tripled their energy consumption during last year. Source: https://digiconomist.net/bitcoin-energy-consumption/

Why shouldn't I think that 5 years from it could become 25% or more?

[matheusmoreira]

That's the figure responsible for my "less than 1%" statement and I'm not even sure how accurate that estimate is. Honestly it makes no sense to me.

> The index is built on the premise that miner income and costs are related.

> Since electricity costs are a major component of the ongoing costs, it follows that the total electricity consumption of the Bitcoin network must be related to miner income as well.

> To put it simply, the higher mining revenues, the more energy-hungry machines can be supported.

So BTC price shoots up all the way up to nearly $70k. This means miner profits will also increase proportionally since they get paid in BTC.

The problem is they try to correlate energy consumption with miner income. Profits are up so energy consumption must have risen proportionally as well? I'm not sure I buy that. When BTC prices rise, profits must be higher and therefore the costs will represent a smaller percentage of miner income, not the constant 71.44% that's apparently assumed by this study.

The way they estimate the minimum energy consumption does make lot more sense.

[donkarma]

What is your issue? If my dog bites a dog, do we need to ban all dogs? Cryptocurrency is not even that much responsible for emissions in comparison to countries or corporations. Who told you that crypto is bad?

[nmz]

The problem is mining, its a good idea, but bitcoin is basically an alpha project that is being treated as a fully fledged solution.

[cbxyp]

It's afraid.

[hartator]

I am curious as well. I’ve created a wallet: nano_1g6bkdkp9h6y4594sa3kiyu4xdmfz3nbj9z4zeptrdatcztpprcdsno5p6nr

How is it secure if it’s not doing any wasteful mining though?

[nojster]

The general answer is: through proof of stake.

Since this is HN, you might enjoy this paper: https://arxiv.org/abs/0805.2815 originating from a project called Cardano, which has published dozens of peer reviewed papers (not only on arxiv), presented continuously at EuroCRYPT and works with great academics from “boring” fields (at least to most CS students) such as formal verification.

The main gist in pos (to which Cardano showed the first viable solution that does not have extensive unbonding periods or requires centralized coordination) is that stake pool operators (similar but different to miners in Bitcoin) are chosen randomly to validate the next block based on how much tokens are staked with them. The incentive system to keep these SPOs truthful is outlined in detail in the above mentioned paper.

You basically do not let everyone hunt one complex problem (where all but one miner waste their energy to secure the network) but build a system to chose one to then perform a validation. This decreases energy consumption of the overall network substantially.

[anderber]

This article (https://www.kraken.com/en-us/learn/what-is-nano) goes into how it keeps the network secure. But Proof of Stake is the basics of it.

I sent you one Nano to play with. Let me know what you think! For me, I think Nano is a great replacement to cash. You can give and receive without fees. It makes a great way to donate or pay for things.

[hartator]

Thanks! I’ll play around with it.

[rackjack]

Silly question: what's the problem with fees? If you need other people to do work (process your transaction) for you, you should pay them, right?

[anderber]

> In very basic, the computers you and the receiver own do the processing work for you. Think of it like you're the one mining your own transaction. Instead of fees there's tiny few seconds worth of extra power being used by your CPU

https://www.reddit.com/r/nanocurrency/comments/7z9pwk/what_m...

The real amount of work needed to process transactions is extremely minimal. Bitcoin and other proof-of-work coins adds unneeded work that is taxing to systems and therefore, the environment.

[bestouff]

So you can't use nano without installing some proprietary software on a phone ? That doesn't look good ...

[anderber]

There are many wallets and ways to make a wallet, including open source. I just shared the easiest way, which happens to be open source: https://github.com/appditto/natrium_wallet_flutter

[killingtime74]

Only all the crypto people actually use

[Andrew_nenakhov]

If bitcoin's benefits do not offset the "massive costs" for you (because you're likely coming from a first-world country), it doesn't mean that these benefits do not exist for people who were not so lucky as you are.

[SantalBlush]

Carbon pollution is not just a one-time cost, it is a debt that carries a massive interest rate with it that will be paid for generations. So whatever benefits someone else might reap from Bitcoin, it certainly isn't worth it to me.

[Andrew_nenakhov]

People use way more energy for dumb heating. In my region humans can't survive in winter without it. There is no reason why mining rigs can't be used for 'smart' heating, heat being a byproduct of mining.

It is not done currently only because the energy use of bitcoin is so miniscule compared to other uses, that it's not even worthy to bother yet. Down the road, it'll likely change, but currently complaints about 'massive costs to the environment' are mostly virtue signalling.

[8note]

Resistive heating is still dumb heating.

Smart heating involves heat concentration, not heat production

[SantalBlush]

If the energy use of bitcoin was minuscule while heating a building, and it could generate mining rewards while doing so, then people would be using it for that purpose. They aren't.

[Andrew_nenakhov]

People absolutely do use bitcoin mining for heating. It's just not yet popular enough, and it makes sense only in certain climates.

[SantalBlush]

That's my point. It's not popular because it's not economically viable in many cases. So heating buildings is another thing that Bitcoin is supposed to improve, except it really doesn't.

[spinny]

correct. the cost of the Bitcoin network, at least in terms of energy is the sum of all the energy spent mining so far. this is also what values the network and makes it secure. it's a very efficient method to convert raw energy into a digital token

[kebman]

Do you have a measure against the banking system? If you do, then I'd love to see how Bitcoin is worse.

[tsimionescu]

Let's take an article [0] produced by a big Bitcoin miner at face value. They claim the banking system consumes 263.72 TWh globally, twice the power consumption of the Bitcoin network at that time, 113.89 TWh.

Now, Bitcoin is processing 4.6 transactions/second [1]. VISA alone is processing 1700 transactions/second on average, with peak transaction rates claimed in the 24000/second [2]. Mastercard is similar, as are other payment processors.

Even worse, the claimed energy usage is for the entire banking system. This easily amounts to billions of daily transactions, but also many other services that Bitcoin doesn't even come close to offering: insurance, mortgages, credits, risk evaluations, escrow and many others. All this for a mere 2x the total energy expenditure.

[0] https://cointelegraph.com/news/banking-system-consumes-two-t...

[1] https://towardsdatascience.com/the-blockchain-scalability-pr...

[2] https://news.bitcoin.com/no-visa-doesnt-handle-24000-tps-and...

[neb_b]

Your transactions/second number ignores the lightning network

[tsimionescu]

We were discussing Bitcoin. The Lightning network is a completely different thing, with completely different guarantees of payment security/trust than Bitcoin (it's possible to steal money on the Lightning network, or to do denial of service attacks against nodes, by design).

[kentonv]

According to this: https://www.blockchain.com/charts/cost-per-transaction

Bitcoin costs $150-$300 per transaction. Unless I'm misunderstanding something?

Needless to say, nothing in the regular banking system comes anywhere near those kinds of costs.

[iso1210]

Money laundering millions costs more than that. Hiding illgotten gains in swiss bank accounts costs more.

[beaconstudios]

Bitcoin hasn't replaced the banking system though, nor could it (or should it). A crypto backed finance industry would be a libertarian hellscape of consumer abuse.

[iso1210]

Bitcoin takes 200kWh per transaction. At current US energy pries of 13 cents, that's $26 per transaction.

[notch656a]

The average transaction value made in bitcoin is $80k. A financial service cost of $26 on an $80k international transaction is amazingly good. And with something like litecoin goes down to $0.02

[iso1210]

Just showing that bitcoin is more about international money laundering than a realistic currency

[unobatbayar]

How is financial speculation and scams an environmental cost?

[blackshaw]

It's not the speculation and scams that are an environmental cost, it's the fact that the Bitcoin network uses more energy than a medium-sized country.

[wombat-man]

driving up the price of bitcoin increases the motivation to run even more bitcoin miners which use more and more electricity. Depending on where it's generated that can come at the cost of the environment.

[lowkey]

Tell me you don’t understand the problem Bitcoin solves without telling me.

[SantalBlush]

Bitcoin does solve a problem, but it's a theoretical problem, not a practical one.

[beaconstudios]

"it's not bad you just don't understand it"

Good one

[matheusmoreira]

There's no benefits to mining bitcoin specifically. You're right about that, it buys us nothing. Wouldn't mind even more energy being spent to secure the Monero blockchain though.

Also, scams are only common in the smart contract networks. People create useless shitcoins and spam telegram groups in order to generate some quick hype and exit with as much money as possible. I'd certainly like to believe nobody would be dumb enough to actually invest massive amounts of capital into these scams but that's exactly what they do.

[theturtletalks]

The cost users are paying is the cost of decentralization. One single entity will always be cheaper than blockchain decentralization, but the cost can be spread across millions or billions of users.

Now if the cost is worth it remains to be seen.

[matheusmoreira]

Bitcoin is not decentralized. You need specialized hardware to mine bitcoin and the entry costs are enormous. One CPU one vote is history. As a result there are relatively few miners. Just look at how much bitcoin suffered when countries started banning mining activities. A truly decentralized coin would simply shrug off attempts at regulation because there are so many independent nodes no single country could possibly ban them all. What happened instead is one country banning BTC put a stop to a huge chunk of the network.

[theturtletalks]

I mean decentralization in the "proving ownership" way. Right now, a bank can be the central authority on how much money you have in your account. With Bitcoin, people collectively determine how much each person has through the blockchain. A bank doing it will always be cheaper, but then the bank has too much control. How much are people willing to pay to make sure one entity does not have too much control or power?

[matheusmoreira]

> With Bitcoin, people collectively determine how much each person has through the blockchain.

That's how it was supposed work. The current reality is small highly centralized group of miners maintain the blockchain.

[theturtletalks]

Do you think more miners will join if Bitcoin gains more adoption? Their is a cost to even find out if decentralization (through blockchain) is even worth it.

[cft]

>Cryptocurrency is probably one of the worst inventions in recent memory.

Do you have a source for this fact? It might survive the 50 year old fiat dollar experiment. Until 50 years ago, there has not been a currency that wasn't backed up by something that was beyond the government

[Guvante]

Don't believe the lies they say about fiat currencies in crypto circles. Currency is way more complicated than they lead you to believe.

After all fractional reserve banking has existed since before currency did. And if you have fractional reserve banking you aren't "back up by something" unless you count the credit of the bank as something. Given that is the literal definition of fiat currency (backed by the full faith and credit of the United States) that means that it is way more complicated than the gold standard.

To give a modern example (the gold standard no longer exists anywhere) many countries have a fixed currency backed by the USD. Since fractional reserve banking is a thing there too it isn't like the country is holding onto $1 USD for every $1 USD equivalent of currency. However it isn't like there isn't a relationship so the source of that relationship is government exchange. You can exchange $1 USD equivalent of currency for $1 USD.

Now we get to the real wrinkle. How can countries have higher inflation than the USD if they are locked with USD? (Which they objectively have) By simply restricting the amount of currency that can be exchanged for USD. This can be hand waved around pretty easy "we have a shortage" or "it is difficult to obtain that much". Now you have a fiat currency in reality but technically it is a backed currency.

To be clear it isn't like ditching the gold standard was without downsides, this is just long enough to point out that broad statements like "backed by anything" fail to account for the reality of backed currencies in a modern financial system.

[notch656a]

>After all fractional reserve banking has existed since before currency did.

We don't even have fractional reserve banking. There is no reserve ratio, it's 0. Bernanke's own published book states it is only fractional reserve banking when it is required to keep a fractional reserve.

[Guvante]

I am talking about the consequence of fractional reserve banking. Specifically that money is made by banks to some amount. Also I think saying "we don't have fractional reserve banking" is needlessly splitting hairs. The requirements are just more complicated than "hold onto X% of deposits".

[cft]

My statement was that the currency (in this example, USD) until 1971 has always been at least partially backed up by something beyond control of any single government (gold). That was the whole reason of Nixon's speech and abolishing gold convertibility on August 15, 1971 [1]. This regime existed since at least Ancient Greece, but probably longer. I have no empirical reason to believe that the currency system of last 50 years is more stable than the one that existed for 2000+ years ( I think substantially longer).

1. https://www.youtube.com/watch?v=iRzr1QU6K1o

[Guvante]

You are ignoring my point because it wasn't what you wanted to say. "At least partially backed up by" is a meaningless statement. Certainly everyone agrees that US wasn't holding onto the amount of USD that existed as gold. So what percentage was it? Was that percentage stable?

The answer to both of those questions was no. The actual amount of currency in circulation (including balance sheets) was certainly well in excess of what the US was holding in reserve.

You could say that by offering gold at a rate you fix the value of the currency but I already covered how that is nuanced.

The reality of course is the reason we had trades for reserves and reserve requirements were to provide faith from consumers that the currency was worth something. I don't think anyone can claim that USD isn't worth anything today.

[notch656a]

Switzerland's currency was linked to gold all the way up to like '99

[root_axis]

Bitcoin subsists on the massive electrical and internet infrastructure that is only possible through government.

[notch656a]

Because no private enterprise could provide power or internet. Sure, some of the internet technology was invented with government grants, but lets not pretend these inventions were only inevitable due to US government. If US government were gone today the internet, electricity, and bitcoin will still be here but the usefulness of the dollar will massively decrease.

[analog31]

If not for the relative regularization of commerce provided by corporate law, and relative stability achieved through economic policy, I think there would be no investment in great ventures of the scale needed to build the electric grid, semiconductor manufacturing, telecommunications, etc.

The limitation of liability granted to the shareholders of corporations is the granddaddy of all entitlements, because it enables relatively hands off investment. Without those things, a "big business" would be on the scale of a corner grocery store, or a family owned factory.

[notch656a]

Those achievements are through cooperative contracts and agreements. That can happen without US government. They can even happen without any government at all. Government after all is just a body with a monopoly on violence.

[analog31]

I don't think contracts can replace law. Imagine having to read and understand a unique 3000 page contract in order to buy a share of stock, or a house, or to get married. Imagine trying to do something like loan money if you have no way of knowing what someone's existing financial obligations are. I think the volume of economic activity would plummet.

"Monopoly on violence" is something I've heard about before. Is this theory supported by evidence? Actually I think that a monopoly on violence might be a good thing. The number of bodies that can engage in violence is either 0 or 1, or many.

I read a translation of Njal's Saga which takes place in pre-literate Iceland. The erstwhile "government" had no monopoly on violence, except to assign cash damages in lawsuits. What the saga describes is basically a continuous blood feud.

[politician]

I'd argue the opposite, if the US government ceased to exist, the electrical grids in North America would collapse shortly thereafter, followed by the Internet and Bitcoin. Without the rule of law and threat of prosecution, a massive surge in usage due to theft would overwhelm systems. Without the nuclear status quo and the threat of retaliation, NA would either be glassed or invaded.

[notch656a]

They would probably be collapsed in the short term and eventually be replaced by something, if not decentralized power generation.

>Without the rule of law and threat of prosecution, a massive surge in usage due to theft would overwhelm systems.

I used both internet and electricity in Northern Syria circa 2015, provided by private providers, and it seemed to work just fine then. Why you think rule of law is so important to internet existing? If the dude running the cell phone towers and cell phone stand points an AK out the window when they see a crook, most people decide not to theft that. You don't need central power grid to have enough electricity to run phones and cryptocurrencies.

>Without the nuclear status quo and the threat of retaliation, NA would either be glassed or invaded.

Or cooperative militias and private individuals ally with someone with nukes or seize the ones already in existence. Not to mention invading American part of NA is hilariously foolish as there would be a "rifle behind every blade of grass."

[analog31]

Sounds like the next startup mecca. Now, before bitcoin, where did smart people put their savings? Probably, any money that wasn't needed for immediate liquidity went into dollars or euro or securities denominated in those currencies.

The present state of the art is that cryptocurrency is an arbitrage that converts subsidized electricity into value that can be transported out of the country.

[vanusa]

I'd argue the opposite, if the US government ceased to exist, the electrical grids in North America would collapse shortly thereafter, followed by the Internet and Bitcoin.

No, there will just be temporary outages and prices these things (electrical grids, internet) will rise to extortionist levels as local authorities / militias take over. Just like they do in any other conflict zone in the world.

[politician]

If a major superpower falls, adversarial superpowers will be the ones to move in to fill the power vacuum, not local tribal warlords. See Russia after the fall of the USSR, but before Putin.

[Guvante]

Are we pretending that the US government is gone without a worldwide depression? (To be clear the US isn't alone, any of the major countries disappearing overnight would shock the economic system too hard to make these style what ifs meaningful)

If so it wouldn't stop being valuable for quite a while still, in this hypothetical you would still have years of contracts in terms of USD, not all of which would be renegotiated for tons of reasons. Additionally most foreign trade that historically ran of the USD would want to change to a new world currency but would need to figure out what currency to use.

So lets flip it on its head. What if the mining reward disappeared? Would Bitcoin survive?

[notch656a]

>Are we pretending that the US government is gone without a worldwide depression? (To be clear the US isn't alone, any of the major countries disappearing overnight would shock the economic system too hard to make these style what ifs meaningful)

Crytpo will march on with or without US government, I don't see them as existential concern for BTC or other crypto.

I'm not sure if BTC will survive once there is nothing to mine, but other crypto like XMR has infinite tail emission thus mining never dies. I apologize but here I often use BTC interchangeably to mean PoW cryptos in general. I shouldn't do that.

[root_axis]

Private enterprise providing power and internet would be a massive disaster, this is the reason we have utilities; a cadre of competitors dredging up the shared public space to each erect their own private lines would create a hideous patchwork of incompatible and inefficient infrastructure that would have completely destroyed any possibility for the internet as we know it today.

[beaconstudios]

A source for this fact? It's an opinion.

[8note]

Gold isn't backed up by anything.

If anything, government is a stronger backing than before

[notch656a]

Quantify the environment cost that has been borne by bitcoin and now compare it to the cost by overheating or cooling houses (except perhaps a few elderly or infants, no one needs a house to stay within 60-80 degree band, you can survive with much less heating/cooling energy usage). Then explain to us how anyone living in a comfortable room temperature heated home that complains about bitcoin isn't a hypocrite, using environmental concerns as propaganda to shame people using computation cycles in some way they deem unfit while simultaneously restraining their outrage for AI training or video games.

This comment is unpopular, because it hits too close to the heart of home for many of you sitting in your comfortable home wasting energy on heat and A/C while complaining about environmental consumption of bitcoin.

[beaconstudios]

"You criticise bitcoin for using more electricity than Ireland while using disproportionately high levels of coal power usage, and yet you live in a house. Hypocrite!"

This isn't a cogent argument. Yes, overheating or overcooling houses is also bad. If AI training used as much electricity as Ireland I'd be critical of that too.

[notch656a]

Heating and cooling uses way more electricity than Ireland. This message is for the hypocrites who complain about bitcoin while keeping their house above 60 when it's cold, or those running A/C below 80 when its hot. Y'all are wasting way more energy than bitcoin, while many of you simultaneously complain about bitcoin.

>This isn't a cogent argument. Yes, overheating or overcooling houses is also bad. If AI training used as much electricity as Ireland I'd be critical of that too.

It's a cogent argument to point out the hypocrisy. If you want to argue we should create a watt-police or ensure externalities of power consumption are better accounted for, that's a different argument.

[beaconstudios]

I mainly just want to ensure the earth doesn't burn. Yes people should ideally not be overheating their home (could easily be done using smart meters if electric companies weren't incentivised to ignore it) and many other things like reducing fossil fuel usage. Bitcoin consumes massive amounts of energy for basically no benefit except pure money wonkery, which is no benefit at all. It's a net negative in every possible way.

[notch656a]

>Bitcoin consumes massive amounts of energy for basically no benefit except pure money wonkery, which is no benefit at all. It's a net negative in every possible way.

Well I disagree here. It provides benefit for many people. The example I continually use for me personally is buying precious metals with <30 min clearing without paying credit card fees (and I really hate funding credit card companies anyway). But people in Argentina also using it for reasons just to have efficient way of receiving dollar for free-lance work.

I think we're in agreement we would do well to be as efficient as we can with our resources. It would be great to find a way to eliminate externalities of energy production/consumption.

[kaba0]

But those rules/fees are there for a reason. You (and me also) may not agree with those reasons, but still you are just circumventing a law made through a democratic process.

[beaconstudios]

Are you buying precious metals in the abstract, commodities market sense or are you manufacturing? Because if its the former, I still don't think that's a net positive.

I do think it has some small benefits like transferring money where there are no other options. But the vast majority of the network's use is in purely financial use and justified by HODLers and libertarian types. Its existence is largely a downside on its own even without the huge energy costs.

[rsynnott]

A lot more than Ireland now; that was years ago. It now uses more electricity than Argentina (about 6 Irelands).

[beaconstudios]

Oh, wonderful.

[brokencode]

Of course we could live at 60 degrees in the winter, but most people would agree that their lives are meaningfully improved by increasing the temperature to closer to 70-72.

On the other hand, Bitcoin provides no meaningful benefit to society compared to other currency. The only real benefits of Bitcoin are that it makes ransomware easier to accomplish (which is bad for most people) and that it has made some people a lot of money due to its pyramid scheme qualities (again, bad for most people).

[notch656a]

Crypto provides extraordinary meaning to many people in society compared to other currency. Argentinian freelancers use it to get paid, for instance due to systemic issues with financial transaction in their country.

One big one to me is buying precious metals online with <30 minute clearing time without paying credit card fees. Literally nothing else I can find accomplishes that; I didn't even set out to use crypto for that purpose it just happened to be the best way to do it in my circumstance.

>lives are meaningfully improved by increasing the temperature to closer to 70-72.

Well I could say "nuh uh" and then you could say about bitcoin "nuh uh" but then we'd both merely be saying the other's use of energy consumption is bad. If you have an issue with making sure every bit of electricity is only used for necessities, why don't you go out and say that or explain how you want to make sure externalities are paid for by power consumers. Singling out bitcoin by people living near room temperature with aid of heating/cooling is just hypocrisy.

[brokencode]

That’s a fair point. We should be including the cost of pollution and climate change with the price of energy, and if we were, then I’d care a lot less about the energy use for what I consider nonessential.

That is unfortunately not the world we live in though, and probably never will be due to political reasons.

[paulryanrogers]

Citizens of Kazakhstan or Iran suffering from brown outs or people near recently restarted coal plants may prefer argentinians seek other ways to work around currency and corruption problems.

[spinny]

> On the other hand, Bitcoin provides no meaningful benefit to society compared to other currency.

Decentralization and censorship resistance does not exist in the fiat world. Ask some greek people if Bitcoin was useful to buy food.

Because it's easy for you to open a bank account and have you money secured, it doesn't mean that other people have this luxury.

[notch656a]

People who think money is 'secure' from seizure in the bank aren't thinking one step ahead.