Sunday, December 10, 2017

Bitcoin's Electricity Usage Fears Exaggerated

While much of the world marvels at bitcoin's meteoric rise, another part is focused on an environmental byproduct: The sheer amount of electricity that crypto-currencies use. By some estimates, bitcoin's consumption alone exceeds -- or will exceed -- that of Ireland, Denmark, Japan or even the entire world. Instead of worrying about how soon bitcoin will melt the polar ice caps, though, it's worth considering how much energy might be saved. Digital currency is wasteful by design. Bitcoin "miners," who process transactions in return for new currency, must race to solve extremely difficult cryptographic puzzles. This computational burden helps keep the transaction record secure -- by raising the bar for anyone who would want to tamper with it -- - but also requires miners to build giant farms of servers that consume vast amounts of energy. The more valuable bitcoin becomes, the more miners are willing to spend on equipment and electricity.

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Still, it's important to put things in perspective. A recent report suggests that at current prices, Bitcoin miners will consume an estimated 8.27 terawatt-hours per year. That might sound like a lot, but it's actually less than an eighth of what U.S. data centers use, and only about 0.21 percent of total U.S. consumption. It also compares favorably to the currencies and commodities that bitcoin could help replace: Global production of cash and coins consumes an estimated 11 terawatt-hours per year, while gold mining burns the equivalent of 132 terawatt-hours. And that doesn't include armored trucks, bank vaults, security systems and such. So in the right context, bitcoin is positively green.

Comments

It's easy to criticize bitcoin for being wasteful. But so are many things in life, including airplanes, commuting to work and Sunday Night Football. A return to subsistence farming could drastically reduce our carbon footprint, but sometimes using energy to improve our quality of life is worthwhile.

Does BTC actually "improve quality of life," though?

#1 | Posted by GOnoles92 at 2017-12-09 11:11 AM


... The more valuable bitcoin becomes ...

Therein lies the rub. What happens in a scenario of declining price?

Is bitcoin just going to continue its meteoric rise in price or are we in a "tulip" bubble?

What is going to happen to the price when the CBOE futures contract trading goes live a week from Monday?


#2 | Posted by LampLighter at 2017-12-09 11:31 AM

So the article just mentions mining and not all the energy required to use it (internet, end user devices, etc)?

#3 | Posted by Pirate at 2017-12-10 08:40 PM

#1 | POSTED BY GONOLES92

If you bought low enough and sold high enough, yes.

#4 | Posted by IndianaJones at 2017-12-11 12:19 PM

The problem is that you can no longer use it as a currency. It's worthless when it is that volatile.

#5 | Posted by Sycophant at 2017-12-11 02:14 PM

The problem is that you can no longer use it as a currency. It's worthless when it is that volatile.

Posted by Sycophant at 2017-12-11 02:14 PM | Reply

How is this even constitutional???

#6 | Posted by LauraMohr at 2017-12-11 02:18 PM

Consti-what?

Why wouldn't it be Constitutional to invent digital money?

#7 | Posted by snoofy at 2017-12-11 02:48 PM

Sounds like most Ponzi-schemes.

#8 | Posted by aborted_monson at 2017-12-11 08:58 PM

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