The Bitcoin mine with its own power plant(bbc.com)
bbc.com
The Bitcoin mine with its own power plant
https://www.bbc.com/news/av/technology-58020010
79 comments
It's a shame we don't have a carbon tax.
Why only carbon, why not tax any polluters?
Of course. Internalize the cost of cleanup to the price of everything.
We'll all have to make due with consuming a lot less if we actually paid for the cost of our wasteful and destructive first world lifestyles.
We'll all have to make due with consuming a lot less if we actually paid for the cost of our wasteful and destructive first world lifestyles.
I don't understand how, with the cost associated with re-opening and operating the plant, the cost of purchasing the rigs, the cost of paying to offset their carbon emissions, the cost of the gas, etc., this can be profitable? Or is it a bet that Bitcoin is going to rise? That seems incredibly risky, even in the crypto space.
The fixation with the dollar value of Bitcoin has led to the sad debasement of Bitcoin. Now people hoard it and traders prey on retail investors with it.
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what a complete waste of energy
Whenever Bitcoin collapses, whether it be next week or 5 years, we will look back in history and wonder what the fuck we wasted all that energy on.
Well, from my perspective, a bunch of us are playing some very weirdly human constructed game of wasting life years on work and passive content consumption.
If we ever make it to a cashless utopia, I'm pretty sure someone's going to look at us and see how much untapped human potential was wasted on years of watching a screen and experiencing dopamine release.
If we ever make it to a cashless utopia, I'm pretty sure someone's going to look at us and see how much untapped human potential was wasted on years of watching a screen and experiencing dopamine release.
What is the point of human potential if you aren’t working for the ability to enjoy life?
I think the suggestion there is hacking this artificial happiness through gamification of banal activities is a waste of our existence.
If we ever make it to post-scarcity, we need to still be producing something. Or we may as well be batteries plugged into the Matrix.
If we ever make it to post-scarcity, we need to still be producing something. Or we may as well be batteries plugged into the Matrix.
You know there’s always an auto counter argument for an argument like yours.
What else would have done? Hiked and played sports? Or let me mention the cool/hip things — “build shit” “ship things” “be productive”? For what? Some other chemical release?
This will keep going in a loop.
What else would have done? Hiked and played sports? Or let me mention the cool/hip things — “build shit” “ship things” “be productive”? For what? Some other chemical release?
This will keep going in a loop.
Absolutely, that's exactly the answer to the guy talking about "wasting energy" on Bitcoin. On what else would we waste it then?
Energy is being wasted everywhere on much sillier things at much grander scales.
Energy is being wasted everywhere on much sillier things at much grander scales.
>Energy is being wasted everywhere on much sillier things at much grander scales.
Setting aside for a moment that I don't believe this, it's not even a valid argument to begin with.
Setting aside for a moment that I don't believe this, it's not even a valid argument to begin with.
Valid argument for what?
Humans around the world are consuming food, heating/cooling themselves, all in the service of some gamified activity. Some of these activities are as useless as mining Bitcoin. Yes, these activities aren't burning through energy, but people are burning through energy, with the sole focus of doing the activity.
Any justification for these activities can most definitely be used to justify people wasting energy on mining Bitcoin.
Humans around the world are consuming food, heating/cooling themselves, all in the service of some gamified activity. Some of these activities are as useless as mining Bitcoin. Yes, these activities aren't burning through energy, but people are burning through energy, with the sole focus of doing the activity.
Any justification for these activities can most definitely be used to justify people wasting energy on mining Bitcoin.
That's the thing: I don't see anyone justifying those other vague activities in this thread. The notion that nothing can be criticized as being wasteful because something, somewhere else, might possibly be more wasteful is just false. It's not a valid argument.
This reasoning has no bearing on whether or not bitcoin is a waste of energy or whether its energy use is justified. It is akin to saying, "Sure, I burn ten tons of coal a day to power my iPhone, but someone else burns twenty tons a day to do the same thing. Therefore, I'm not being wasteful." This logic doesn't cut it.
This reasoning has no bearing on whether or not bitcoin is a waste of energy or whether its energy use is justified. It is akin to saying, "Sure, I burn ten tons of coal a day to power my iPhone, but someone else burns twenty tons a day to do the same thing. Therefore, I'm not being wasteful." This logic doesn't cut it.
But I was not making an argument that Bitcoin is not wasteful.
I was making an argument that deciding what is a valuable human activity does not include wastefulness at all. (OP was implying that someone from the future will value these mining efforts in a regretful way)
People are having fun earning money by burning gas and mining Bitcoin. There are so many other equivalent activities that do not receive any uproar but are even more wasteful.
For example, eating meat is insanely wasteful. Yet you will find people defending it.
Wasting energy is the thing we do for various reasons. The underlying "regret" that someone from the future should have due to it not being productive or useful is completely irrelevant. We rarely do things because they are energy efficient.
I was making an argument that deciding what is a valuable human activity does not include wastefulness at all. (OP was implying that someone from the future will value these mining efforts in a regretful way)
People are having fun earning money by burning gas and mining Bitcoin. There are so many other equivalent activities that do not receive any uproar but are even more wasteful.
For example, eating meat is insanely wasteful. Yet you will find people defending it.
Wasting energy is the thing we do for various reasons. The underlying "regret" that someone from the future should have due to it not being productive or useful is completely irrelevant. We rarely do things because they are energy efficient.
Okay, so we're not talking about whether bitcoin is wasteful, but whether its waste is justified, which is really the same thing. Other than that, it seems you're using the same invalid argument (other activities are more wasteful) as before. It makes no sense. Whether or not people defend more wasteful activities is irrelevant, for reasons I already discussed.
But if we are arguing if waste is justified then obviously it's not for you or me to decide if it is, including the humans from the future.
I'm just laughing at the inconsistency. If people were really consistent in their views of (un)justified waste, I just don't see the same uproar to those other magnitudes more wasteful things (like eating meat, spending a life playing video games etc.).
It's like being mad about one of the fastest functions in your code when there's many others to optimized.
I also do not want to talk about the philosophical side to taking a life of an ant (delve into what waste is justified or not, and which degrees of dopamine response would justify it).
I'm just laughing at the inconsistency. If people were really consistent in their views of (un)justified waste, I just don't see the same uproar to those other magnitudes more wasteful things (like eating meat, spending a life playing video games etc.).
It's like being mad about one of the fastest functions in your code when there's many others to optimized.
I also do not want to talk about the philosophical side to taking a life of an ant (delve into what waste is justified or not, and which degrees of dopamine response would justify it).
What makes you conflate "cashless" with "utopia?"
I was thinking more in the lines of Star Trek / The Orville where material wealth is no longer a thing.
It’s too bad we didn’t go the scifi route of having money be energy credits and instead went the route of proof of energy wasted.
It's only waste insofar as you don't ascribe value to Bitcoin. It's not fundamentally different from any computing task.
Well it’s waste in the sense that you are spending lots of energy to calculate magic numbers, which don’t have any other value except to prove you own bitcoin. It is or is very near a tautology.
In contrast to energy credits in scifi which is something like a promise to deliver a fixed amount of energy, like how a dollar used to have an equivalence in gold.
Like, do you imagine some future spacefaring civilization going around and blowing up stars in order to calculate hashes for their currency? I can, but really only as something that an evil civilization or runaway automation would do.
Why not build a dyson sphere and sell contracts on the energy instead, to people who will use it to be productive? Why is it better to burn all stored energy you can find off as quickly as possible to generate numbers you don’t otherwise need?
In contrast to energy credits in scifi which is something like a promise to deliver a fixed amount of energy, like how a dollar used to have an equivalence in gold.
Like, do you imagine some future spacefaring civilization going around and blowing up stars in order to calculate hashes for their currency? I can, but really only as something that an evil civilization or runaway automation would do.
Why not build a dyson sphere and sell contracts on the energy instead, to people who will use it to be productive? Why is it better to burn all stored energy you can find off as quickly as possible to generate numbers you don’t otherwise need?
As long as humanity is divided and has factions that are in conflict, something like proof of work can be useful, because it allows those that are in conflict or don’t trust each other, to maintain a shared view of an accounting system (Bitcoin). When we pass that stage of bickering apes we won’t need Bitcoin anymore.
> because it allows those that are in conflict or don’t trust each other,
People use this argument a lot, and I don't get it. You're trusting that miners don't perform a 51% attack; you're trusting that the underlying crypto doesn't have shortcuts; you're trusting the wallet software. Some of these things are unverifiable, leaving you only with trust.
People use this argument a lot, and I don't get it. You're trusting that miners don't perform a 51% attack; you're trusting that the underlying crypto doesn't have shortcuts; you're trusting the wallet software. Some of these things are unverifiable, leaving you only with trust.
> Why not build a dyson sphere and sell contracts on the energy instead
Because bitcoin miners would buy it and "waste" it
Because bitcoin miners would buy it and "waste" it
Tautological. This is essentially: “It’s only waste in so far as you consider it waste”
However the real point about bitcoin is it’s efficiency decreases as adoption or speculation increases, whereas another use of computation such as say Google search this is not the case and they are actively trying to make it more efficient.
However the real point about bitcoin is it’s efficiency decreases as adoption or speculation increases, whereas another use of computation such as say Google search this is not the case and they are actively trying to make it more efficient.
I don't agree; for most computing tasks, the result of every computation produced by each node is used. In Bitcoin, only the "winner" for each particular block gets their computation result used, everyone else literally throws their results away.
No it’s waste in the same way there is waste heat generated by nuclear reactors even though 100% of the useful energy was initially heat.
Energy arbitrage already exists IRL in the form of aluminium smelting.
A very large bitcoin mining facility [0] in upstate NY is in an old Alcoa smelter and is powered by a hydropower dam. [1]
The original factory was built to take advantage of the power from the dam. The dam needs a constant draw of power in order to maintain it and smelting potlines were perfect for this.
Today, transmitting the electricity further would be too cost prohibitive due to the remote location. In this case, bitcoin is less polluting energy arbitrage than aluminum smelting.
[0] https://www.coinmint.one/
[1] https://en.wikipedia.org/wiki/Moses-Saunders_Power_Dam
The original factory was built to take advantage of the power from the dam. The dam needs a constant draw of power in order to maintain it and smelting potlines were perfect for this.
Today, transmitting the electricity further would be too cost prohibitive due to the remote location. In this case, bitcoin is less polluting energy arbitrage than aluminum smelting.
[0] https://www.coinmint.one/
[1] https://en.wikipedia.org/wiki/Moses-Saunders_Power_Dam
> In this case, bitcoin is less polluting energy arbitrage than aluminum smelting.
Only if 100% of global aluminum smelting occurred from green sources. As that’s not the case the world would be better off if they had kept smelting aluminum as long as the reductions occurred in less green locations.
Only if 100% of global aluminum smelting occurred from green sources. As that’s not the case the world would be better off if they had kept smelting aluminum as long as the reductions occurred in less green locations.
> proof of energy wasted
I really like this term.
I really like this term.
PoW - Proof of Waste
Proof of excess energy production may be better.
It is wasted in terms of burning fossil fuels though, since that is stored energy that took millions of years to charge up.
It is wasted in terms of burning fossil fuels though, since that is stored energy that took millions of years to charge up.
Bitcoin is subject to the Lindy effect. Neither of those timelines are very good bets. It’s already been around for 12 years.
If you see a lot of people doing something intentionally and you think they’re wasting resources, you probably just don’t understand what they’re spending resources on.
If you see a lot of people doing something intentionally and you think they’re wasting resources, you probably just don’t understand what they’re spending resources on.
Proof-of-work blockchains were necessary to bootstrap proof-of-stake chains. Proof-of-stake is necessary to scale blockchains. It’s a relatively small, temporary price to birth a revolutionary technology.
Proof of stake lacks the security properties of proof of work. They are not comparable. PoS is markedly inferior in many respects. Look up e.g. the “grinding” family of attacks.
The proof is in the pudding. The Ethereum beacon chain text s currently securing $14 billion in value and has been running for nearly a year without incident.
I can understand the claim that PoS was impractical even a year ago. But given Ethereum 2’s massive success, it’s an untenable claim. If you really think PoS in insecure, don’t bother at arguing it. Just go hack some of your share of that $14 billion.
I can understand the claim that PoS was impractical even a year ago. But given Ethereum 2’s massive success, it’s an untenable claim. If you really think PoS in insecure, don’t bother at arguing it. Just go hack some of your share of that $14 billion.
Shifting people's relative positions in the status hierarchy.
What would you have spent that energy on instead?
You could not produce this energy. It's better for the environment. If the energy is there anyway, maybe aluminium or equivalent. Not magic numbers.
Nothing is stopping you from setting up shop somewhere with the same wasted electrical surplus, finding the machinery needed, an adequate staff to run it, figuring out your international supply chain, and hoping you turn out profitable.
Does magic numbers mean a decentralized network that is permissionless to participate in, is censorship resistant, virtually unstoppable, and global?
Not necessarily.
It can't happen soon enough.
Keep waiting. You have until 2140 until the mining stops. What you see today ain’t nothing yet, and after 12 years you ain’t seeing it, please look harder.
Mining is the process of validating transactions and miners are rewarded for doing so with emissions + fees from transactions.
Mining bitcoin won't stop. Emissions will stop.
Mining bitcoin won't stop. Emissions will stop.
Mining doesn't stop in 2140. Mining stops if and only if Bitcoin dies.
Bitcoin mostly reuses wasted energy where there is no other better paying customer. Even if we would stop all Bitcoin mining on the planet, it wouldn't make any difference for this wasted energy, it wouldn't be put to other uses.
Please take the time to watch this podcast about bitcoin and electric grids and power usage:
"The Truth About Bitcoin's Energy with Harry Sudock" https://youtu.be/vSkEgUsgP3E
And one other point: energy usage != pollution
Please take the time to watch this podcast about bitcoin and electric grids and power usage:
"The Truth About Bitcoin's Energy with Harry Sudock" https://youtu.be/vSkEgUsgP3E
And one other point: energy usage != pollution
...except that people are bringing new carbon-emitting power plants online to power their mining rigs.
Really though, this argument is utter nonsense. Solar/wind/etc. power being dumped into Bitcoin mining means carbon-emitting power is being used elsewhere instead of being shut down. Bitcoin is an environmental disaster that consumes massive amounts of energy just to process a tiny number of transactions.
Really though, this argument is utter nonsense. Solar/wind/etc. power being dumped into Bitcoin mining means carbon-emitting power is being used elsewhere instead of being shut down. Bitcoin is an environmental disaster that consumes massive amounts of energy just to process a tiny number of transactions.
That’s not how power grids work. It’s only economically viable to build many forms of green energy if you have a constant baseline consumer, so you rarely or never have to turn off the power plant, and you don’t waste money if you over-allocate enough to meet demand during low production periods (like for wind). Bitcoin is unique in that it provides a constant demand at a particular price.
One neat thing about bitcoin is that we can estimate transactions and related energy usage.
Try that with global finance.
updated: for clarity.
Try that with global finance.
updated: for clarity.
Visa issues annual "Corporate Responsibility and Sustainability" reports, which include detailed accounting of Visa's energy consumption, greenhouse gas emissions, etc. Mastercard issues a similar report. So do big banks like Chase and Citi.
So...challenge accepted?
(If you actually read these reports and compare with Bitcoin, the thing that will immediately stand out is how many orders of magnitude more energy Bitcoin consumes per transactions than the mainstream electronic payments networks.)
So...challenge accepted?
(If you actually read these reports and compare with Bitcoin, the thing that will immediately stand out is how many orders of magnitude more energy Bitcoin consumes per transactions than the mainstream electronic payments networks.)
That's not completely true.
Off chain transactions, whether thinks like lightning network or centralized exchanges, make it very difficult to actually know how much value transfer is happening. As the network scales up, these kinds of transactions will increasingly make up a greater percentage of all value transfer, while easily measurable base chain settlement transactions will be a minority.
Off chain transactions, whether thinks like lightning network or centralized exchanges, make it very difficult to actually know how much value transfer is happening. As the network scales up, these kinds of transactions will increasingly make up a greater percentage of all value transfer, while easily measurable base chain settlement transactions will be a minority.
You're right, for the same reason that articles like the op's aren't entirely accurate either. Nothing is perfect, however it is easy to consider that global finance is orders of magnitude more wasteful than bitcoin. Just imagine all the bank tellers (transaction validators) driving to work each day.
It is always interesting to me how other PoW chains are completely ignored in the general hatred. ETH mining is a massive consumer of electricity, but since that is supposed to be ending some day, nobody seems to care.
The end solution might eventually be to tokenize all btc, on top of eth.
It is always interesting to me how other PoW chains are completely ignored in the general hatred. ETH mining is a massive consumer of electricity, but since that is supposed to be ending some day, nobody seems to care.
The end solution might eventually be to tokenize all btc, on top of eth.
> Just imagine all the bank tellers (transaction validators) driving to work each day.
Don't forget the Proof of Violence that secures the fiat monetary system. The US military is the largest institutional consumer of oil on the planet.
> It is always interesting to me how other PoW chains are completely ignored in the general hatred.
And simultaneously, bitcoin still gets blamed for GPU prices, even though that's Ethereum and other alts.
> The end solution might eventually be to tokenize all btc, on top of eth.
Highly unlikely. There are good arguments for why PoS will never fully replace PoW. I think it's more likely that all the altcoin use cases get rebased as second layers anchored into bitcoin's PoW.
Don't forget the Proof of Violence that secures the fiat monetary system. The US military is the largest institutional consumer of oil on the planet.
> It is always interesting to me how other PoW chains are completely ignored in the general hatred.
And simultaneously, bitcoin still gets blamed for GPU prices, even though that's Ethereum and other alts.
> The end solution might eventually be to tokenize all btc, on top of eth.
Highly unlikely. There are good arguments for why PoS will never fully replace PoW. I think it's more likely that all the altcoin use cases get rebased as second layers anchored into bitcoin's PoW.
Have you thought though that if more money goes into Solar, Wind/etc (via BTC, Eth mining and similar) that more money goes into renewable energy and thus more money can be spent by those companies improving their existing offerings or researching new tech?
A lot of the time Early adopters end up essentially funding technology that would have investment otherwise.
A lot of the time Early adopters end up essentially funding technology that would have investment otherwise.
With Bitcoin mining, that money comes with the massive carbon emissions driven by the huge energy demand. The alternative, governments subsidizing solar/wind/etc. deployments, comes without the massive energy demand and lets grid operators shut down their carbon-emitting plants.
Like I said, the fact that people are bringing carbon-emitting power plants online to power Bitcoin rigs speaks volumes about this line of thinking.
Like I said, the fact that people are bringing carbon-emitting power plants online to power Bitcoin rigs speaks volumes about this line of thinking.
The problem is with many with your attitude is that everything must be done perfectly now. This is the attitude of an abolitionist. It isn't perfect therefore it must be banned.
There is money to be made mining Bitcoin and people will mine it (illegally if need be). It is better that if this funds renewables (they claim to be paying for offsets according to the clip and investing in Solar) now even if it isn't perfect (The plant itself seems to be better than the Coal powered plants in China).
There is money to be made mining Bitcoin and people will mine it (illegally if need be). It is better that if this funds renewables (they claim to be paying for offsets according to the clip and investing in Solar) now even if it isn't perfect (The plant itself seems to be better than the Coal powered plants in China).
This is a broken windows fallacy that is often repeated on reddit and HN. It makes about as much sense as all of us buying solar panels and leaving our refrigerators open all day.
I didn't know what the broken window fallacy was. So I looked it up. It is rather dubious if what I said fits into this fallacy.
If I leave my refrigerator open all day, it is guaranteed it will produce nothing of value. In this case, it is more dubious. They are producing a good that people want to buy. You might think Bitcoin is worthless, but that is besides the point, other people think it is worth it. Since the benefit vs the energy usage is completely subjective it isn't as clear cut as you like to make out.
My point was that people spending time doing things that seem pointless at the time can sometimes benefit everyone in the future in unexpected way. You, nor I can know what the future holds.
If I leave my refrigerator open all day, it is guaranteed it will produce nothing of value. In this case, it is more dubious. They are producing a good that people want to buy. You might think Bitcoin is worthless, but that is besides the point, other people think it is worth it. Since the benefit vs the energy usage is completely subjective it isn't as clear cut as you like to make out.
My point was that people spending time doing things that seem pointless at the time can sometimes benefit everyone in the future in unexpected way. You, nor I can know what the future holds.
>If I leave my refrigerator open all day, it is guaranteed it will produce nothing of value.
This isn't true. I can put the back of my refrigerator in my doorway and use it to cool my house. "Leaving my refrigerator open all day isn't wasteful, because it cools my house and I use green energy to do it." This is essentially the logic used in this thread; it is a complete non sequitur.
I suppose one could say that whether or not it's wasteful to cool my home with my refrigerator is subjective, but most would say that's just being obtuse.
This isn't true. I can put the back of my refrigerator in my doorway and use it to cool my house. "Leaving my refrigerator open all day isn't wasteful, because it cools my house and I use green energy to do it." This is essentially the logic used in this thread; it is a complete non sequitur.
I suppose one could say that whether or not it's wasteful to cool my home with my refrigerator is subjective, but most would say that's just being obtuse.
Wouldn't utilities just generate less energy, if a significant consumer of energy vanished?
Utilities are incredibly constrained in how much power they can generate, where they can send it to, at what times, and how quickly they can adjust these parameters. Bitcoin mining, as a reliable but highly flexible consumer at a reasonable price, actually makes operating a grid way easier and makes the use of slow-to-react (like nuclear) or unreliable (solar, wind) power generation much more feasible.
Except that:
1. difficulty calculations only happen every 2 weeks - so this would result in a comically bad UX where your transactions confirm dramatically faster or slower depending on the weather
2. the network security provided from mining using electricity is directly related to the opportunity cost of using that electricity for mining. If energy was otherwise going to be thrown away, the security provided from mining using that energy is zero.
1. difficulty calculations only happen every 2 weeks - so this would result in a comically bad UX where your transactions confirm dramatically faster or slower depending on the weather
2. the network security provided from mining using electricity is directly related to the opportunity cost of using that electricity for mining. If energy was otherwise going to be thrown away, the security provided from mining using that energy is zero.
What do you think would happen? Electricity doesn't just get "vented", and grids can't generate too much above usage without serious damage. If it wasn't being used it wouldn't be generated.
That’s not what this news story is about, though.
This is untrue, of course.
51% attack resistance requires that mining be resource-intensive and have significant opportunity costs. Otherwise - if mining is not costly and wasteful- it's not costly for an attacker. If electricity prices went down to 1% of their current value tomorrow, miners would need to increase their electricity consumption by approximately 100x, or network security would suffer.
To the extent that energy or resources used for mining are free, or surplus (would otherwise be wasted)... that mining activity provides no security to the network.
This is the same reason advances in miner performance (e.g. better ASICs) don't provide more network security. Miners mine faster, but any attacker would have access to the same technology. The only thing that can actually make the network more secure is using more scarce resources - whether directly, .eg. via energy usage, or indirectly, by manufacturing ASICs, etc.
Bitcoin mining is not resource-intensive in the sense that, say, aluminum smelting is. The thing about aluminum smelting is that if there's efficiency improvements, that's good! That means more aluminum from the same limited supply of free/low-cost/surplus energy. I like aluminum! But when somebody finds a way to, say, double the hashrate-per-watt you can get mining Bitcoin... the hashrate increases, but the network-security-per-watt stays the same. It has to.
It's not resource-intensive in the sense that automobile transportation is. If cars get more gas-efficient (or energy-efficient in general), awesome! Everybody's life gets better. If Bitcoin mining gets more efficient... miners just mine more. No extra security. No actual reduction in resource usage.
Assuming that miners mine when it's profitable (+EV) and don't mine when it's not profitable, Bitcoin's difficulty adjustment system implies the following: "The sum of all transaction fees and the coinbase reward for each block equals, on average, the cost of the resources used by all miners during that block period plus a small profit."
In other words, with a 6.25BTC block reward at current prices, every Bitcoin block requires burning about $250,000 in resources- or about $1.5 million an hour.
Now, that doesn't have to be electricity. If we discover free energy tomorrow and electricity prices go to zero, the resources used would likely switch to be those used in miner ASIC manufacturing- since every ASIC made would be a literal free money printer. But you'd still need to (amortized across the ASIC's life, of course) use resources worth about $1.5 million an hour on network security - or accept that network security is weaker. And to be clear, that's "worth" including things like transportation costs- natural gas may be worth $X per BTU, but natural gas out in the middle of nowhere where it'd otherwise be flared is worth far, far less, and using it thus provides far less security.
So, Bitcoin is either insecure or wasteful on an almost unimaginable scale - and probably isn't even wasteful enough today. (And no, that's not an XOR.)
The only way I can see not to wind up at this conclusion is to argue that markets aren't even weakly efficient.
51% attack resistance requires that mining be resource-intensive and have significant opportunity costs. Otherwise - if mining is not costly and wasteful- it's not costly for an attacker. If electricity prices went down to 1% of their current value tomorrow, miners would need to increase their electricity consumption by approximately 100x, or network security would suffer.
To the extent that energy or resources used for mining are free, or surplus (would otherwise be wasted)... that mining activity provides no security to the network.
This is the same reason advances in miner performance (e.g. better ASICs) don't provide more network security. Miners mine faster, but any attacker would have access to the same technology. The only thing that can actually make the network more secure is using more scarce resources - whether directly, .eg. via energy usage, or indirectly, by manufacturing ASICs, etc.
Bitcoin mining is not resource-intensive in the sense that, say, aluminum smelting is. The thing about aluminum smelting is that if there's efficiency improvements, that's good! That means more aluminum from the same limited supply of free/low-cost/surplus energy. I like aluminum! But when somebody finds a way to, say, double the hashrate-per-watt you can get mining Bitcoin... the hashrate increases, but the network-security-per-watt stays the same. It has to.
It's not resource-intensive in the sense that automobile transportation is. If cars get more gas-efficient (or energy-efficient in general), awesome! Everybody's life gets better. If Bitcoin mining gets more efficient... miners just mine more. No extra security. No actual reduction in resource usage.
Assuming that miners mine when it's profitable (+EV) and don't mine when it's not profitable, Bitcoin's difficulty adjustment system implies the following: "The sum of all transaction fees and the coinbase reward for each block equals, on average, the cost of the resources used by all miners during that block period plus a small profit."
In other words, with a 6.25BTC block reward at current prices, every Bitcoin block requires burning about $250,000 in resources- or about $1.5 million an hour.
Now, that doesn't have to be electricity. If we discover free energy tomorrow and electricity prices go to zero, the resources used would likely switch to be those used in miner ASIC manufacturing- since every ASIC made would be a literal free money printer. But you'd still need to (amortized across the ASIC's life, of course) use resources worth about $1.5 million an hour on network security - or accept that network security is weaker. And to be clear, that's "worth" including things like transportation costs- natural gas may be worth $X per BTU, but natural gas out in the middle of nowhere where it'd otherwise be flared is worth far, far less, and using it thus provides far less security.
So, Bitcoin is either insecure or wasteful on an almost unimaginable scale - and probably isn't even wasteful enough today. (And no, that's not an XOR.)
The only way I can see not to wind up at this conclusion is to argue that markets aren't even weakly efficient.
The push to use clean energy for Bitcoin will ultimately lead to the increase of clean energy and lower costs of it for all, especially, for out of the beaten path locations. It might seem like a waste of energy but all technologies look like wasted effort until they are not.
This is a great example of the transition happening. Coal --> gas --> Solar? Nuclear? Hydrogen? ...
I think we are about to pass the tipping point of Bitcoin being around until money is no longer needed. There will be a time when Bitcoin will be expensive enough that it will be profitable to build a Solar Power plant to mine Crypto in the middle of the desert with nothing else around. I bet it will be in a bit over 2 generations, 40+ years.
This statement is from someone who used to think that $10.00 was a crazy amount to pay for Bitcoin.
This is a great example of the transition happening. Coal --> gas --> Solar? Nuclear? Hydrogen? ...
I think we are about to pass the tipping point of Bitcoin being around until money is no longer needed. There will be a time when Bitcoin will be expensive enough that it will be profitable to build a Solar Power plant to mine Crypto in the middle of the desert with nothing else around. I bet it will be in a bit over 2 generations, 40+ years.
This statement is from someone who used to think that $10.00 was a crazy amount to pay for Bitcoin.
Why would you build that solar power plant there when you can build them on the grid itself?
The investment sell I've been seeing lately is to burn stranded natural gas (that would otherwise be flared) in generators that would power a crypto mine. That also gives you 24/7 runtimes without needing energy storage systems.
The investment sell I've been seeing lately is to burn stranded natural gas (that would otherwise be flared) in generators that would power a crypto mine. That also gives you 24/7 runtimes without needing energy storage systems.
>>"Why would you build that solar power plant there when you can build them on the grid itself?"
My point isn't that they will be built in the desert but my point is that if they can be built there then they can be built many other places where it's not profitable now.
My point isn't that they will be built in the desert but my point is that if they can be built there then they can be built many other places where it's not profitable now.
[1]https://www.gem.wiki/Federal_coal_subsidies
[2]https://www.eesi.org/papers/view/fact-sheet-fossil-fuel-subs...