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Bitcoin Power Earth

One Bitcoin Transaction Now Uses As Much Energy As Your House In a Week (vice.com) 225

Long-time Slashdot reader SlaveToTheGrind quotes Motherboard: Bitcoin's incredible price run to break over $7,000 this year has sent its overall electricity consumption soaring, as people worldwide bring more energy-hungry computers online to mine the digital currency. An index from cryptocurrency analyst Alex de Vries, aka Digiconomist, estimates that with prices the way they are now, it would be profitable for Bitcoin miners to burn through over 24 terawatt-hours of electricity annually as they compete to solve increasingly difficult cryptographic puzzles to "mine" more Bitcoins. That's about as much as Nigeria, a country of 186 million people, uses in a year.

This averages out to a shocking 215 kilowatt-hours (KWh) of juice used by miners for each Bitcoin transaction (there are currently about 300,000 transactions per day). Since the average American household consumes 901 KWh per month, each Bitcoin transfer represents enough energy to run a comfortable house, and everything in it, for nearly a week.

One Bitcoin Transaction Now Uses As Much Energy As Your House In a Week

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  • by thereitis ( 2355426 ) on Saturday November 11, 2017 @11:38AM (#55530997) Journal
    Is the ever-increasing proof-of-work requirement inherent with virtual currency (or even blockchain in general), or is there a more efficient way to make it work?
    • Re: (Score:3, Informative)

      by Anonymous Coward

      Yes. Proof of Stake requires almost no electricity at all, as the blockchain is determined by who puts up the largest stakes. The reason Proof of Stake isn't popular is because it's a "rich get richer, poor may as well not play" system, just like capitalism.

      • Re:Proof of work (Score:5, Insightful)

        by LordKronos ( 470910 ) on Saturday November 11, 2017 @12:30PM (#55531245)

        The reason Proof of Stake isn't popular is because it's a "rich get richer, poor may as well not play" system, just like capitalism.

        Because we know that with Bitcoin's Proof-of-Work system, it's the poor that can afford racks full of ASIC miners, right?

      • Re:Proof of work (Score:5, Informative)

        by Troed ( 102527 ) on Saturday November 11, 2017 @01:27PM (#55531531) Homepage Journal

        No, the reason PoS isn't popular is because it's provably insecure.

        Contrary to a PoW-chain absent a +51% cartel, it’s mathematically proven that it is impossible to determine the “true” transaction history in a PoS blockchain without an additional source of trust. If a source of trust is always needed, a potential pandora’s box of attack and centralization scenarios is opened. This is a seed of truth behind the joke that Ethereum plans to use “proof of Vitalik”.

        (follow the links for the actual paper)

        https://medium.com/@tuurdemees... [medium.com]

        • by perpenso ( 1613749 ) on Saturday November 11, 2017 @01:57PM (#55531655)

          Contrary to a PoW-chain absent a +51% cartel

          In 2014 a single mining pool reached 50%.
          https://www.coindesk.com/51-at... [coindesk.com]

          As bitcoin mining in increasingly centralized on expensive specialized ASIC hardware, as individual/small miners increasingly host remotely (where they don't have physical control of ASICs) where electricity is inexpensive, bitcoin insecurity is increasing.

          Bitcoin was designed with the assumption of distributed mining. With many small players contributing to the blockchain, as in the early days when CPU and GPU mining was practical. That assumption of bitcoin's design has turned out to be false, bitcoin is vulnerable.

          • by Troed ( 102527 )

            The difference is that any "51% attack" (which in reality needs to be ~80% or so) is temporary with PoW. In PoS any catastrophic breakage in trust cannot be gotten back.

            • The difference is that any "51% attack" (which in reality needs to be ~80% or so) is temporary with PoW. In PoS any catastrophic breakage in trust cannot be gotten back.

              How is a successful 51% attack upon bitcoin not going to damage trust? How is the fraud/damage going to be undone?

              The future is the blockchain. Bitcoin is just one of many users of the blockchain, bitcoin is as replaceable as other coins. It is not established, its use beyond speculators extremely rare. For the average consumer using bitcoin the switching cost from bitcoin to something else is very low.

              • by Troed ( 102527 )

                Of course it damages perception, but the integrity can be regained by others having more PoW than the attacker. The same is not true for PoS. Once the stakes cannot be trusted you cannot regain the trust.

                • Of course it damages perception, but the integrity can be regained by others having more PoW than the attacker.

                  Once the illusion of security is broken it cannot be regained. Few are currently aware of the 2014 50% pool because nothing resulted from it. Should a group attain 51% AND cause fraudulent transactions that will become widely known and not forgotten. Bitcoin would never be the same.

                  The same is not true for PoS. Once the stakes cannot be trusted you cannot regain the trust.

                  If your argument of getting PoW below 50% restores trust then getting stake below 50% also restores trust. You can't have it both ways.

                  More importantly increasing use tends to diversify ownership of coins. Large stakeholders a

                  • by Troed ( 102527 )

                    No, just because someone reaches ~80% PoW temporarily that doesn't affect future immutability once such a hashrate superiority dips again. The same is still not true for PoS. Once someone gains superiority it stays that way.

                    I agree Ethereum is a good benchmark. Still no PoS switch in sight.

      • Yes. Proof of Stake requires almost no electricity at all, as the blockchain is determined by who puts up the largest stakes. The reason Proof of Stake isn't popular is because it's a "rich get richer, poor may as well not play" system, just like capitalism.

        No, the "rich" and the "poor" experience the same percentage increase in wealth. The problem with proof of stake is getting started, the distribution of coins from the founders to the masses. In proof of work there is a basis for coin distribution, "work", but for proof of stake?

        Also note that "stake" is not simply how many coins you have. The age, the amount of time you have held those coins, is also factored into the "stake". So those who hold coins get a little extra compared to those who just trade.

    • There's also proof-of-stake [blockgeeks.com].

    • Re:Proof of work (Score:5, Interesting)

      by m00sh ( 2538182 ) on Saturday November 11, 2017 @11:48AM (#55531041)
      There's proof of space proposal from the bit-torrent guy. https://www.coindesk.com/proof... [coindesk.com]
    • by mysidia ( 191772 )

      No.... Make mining less profitable, and the amount of hash power being used for mining will go down.

      For starters; I would suggest modifying the protocol so that miners have to pay some of their mining reward out to those operating full nodes -- basically add some "originating node" data to each transaction, where the first N nodes in the path through the network replace a designated piece of data being propagated with a blob that can be used to prove the node knew the correct piece of data without re

  • And this crypto-currency mining....

    • The usual government response to folks who are wasting precious bodily fluids to cause global warming would be to tax the hell out of them.

      But, hey, these days it seems like we have electricity coming out our asses for free. When I was a kid, I remember my parents telling me to turn off lights in the house or to remember to turn off the radio when leaving the room to save expensive electricity.

      Today, I see all the kids on the bus showing each other videos on their smartphones. I guess that these days, e

  • Bad Math (Score:5, Insightful)

    by freeze128 ( 544774 ) on Saturday November 11, 2017 @11:45AM (#55531025)
    The energy spent *MINING* a bitcoin is not at all close to the energy spent *TRANSACTING* a bitcoin. Why is this even a metric?
    • Re: (Score:2, Informative)

      by uvajed_ekil ( 914487 )

      The energy spent *MINING* a bitcoin is not at all close to the energy spent *TRANSACTING* a bitcoin. Why is this even a metric?

      Thank you! Terrible bad title and terrible summary to go along with the bad math. This is so misleading that this junk should just be removed. It reads like government propaganda.

      • Re:Bad Math (Score:4, Funny)

        by Notabadguy ( 961343 ) on Saturday November 11, 2017 @01:11PM (#55531447)

        Its worse than a bad title and summary - it assumes a speculative future state as current fact.

        -It COULD be profitable for bitcoin miners to spend XYZ Terawatts of Electricity mining Bitcoins.
        -Assume XYZ Terawatts of power are currently being used to mine bitcoins.
        -Interchange creating something with trading something.

        TRADING BITCOINS COST XYZ TERAWATTS OF POWER OMG.

        Let's do that with a non-bitcoin related story.

        -Actors could use their status to take unfair advantage of women.
        -Bill Cosby raped like 76 women.
        -Bill Cosby is an actor, and can equally theoretically represent any other actor.

        HOLLYWOOD ACTORS ARE RAPING HUNDREDS OF WOMEN EACH!

    • Re:Bad Math (Score:5, Insightful)

      by Mr D from 63 ( 3395377 ) on Saturday November 11, 2017 @11:59AM (#55531095)

      The energy spent *MINING* a bitcoin is not at all close to the energy spent *TRANSACTING* a bitcoin. Why is this even a metric?

      What metric should be used and why? The purpose of currency is to provide a means to conduct transactions, so in that sense it seems reasonable as the metric is tied to the purpose.

      • What metric should be used and why?

        Troy fucking ounces.

        • So long as they are consenting ounces, I don't see the need to publicise Troy's sex life, especially in bold text...

        • Hm... I suppose if we found a way to use gold in a nuclear reactor, we could use that energy to power a bitcoin setup, then we could measure its value in TFOs. I can see how your idea would work. How's the nuclear research coming?
    • Re:Bad Math (Score:4, Interesting)

      by SlayerofGods ( 682938 ) on Saturday November 11, 2017 @12:10PM (#55531155)
      Not really. Since bitcoins specifically ties mining activity to confirming transactions it's fair to link them. Now could it cost a lot less energy to confirm a transaction? Easily, but the design of bitcoin ensures that people will 'waste' as much energy as economically feasible to mine them and thus ensures the energy cost will remain high.
      This is epically true since bitcoins whole purpose is to conduct transactions so it would be fair to consider all the computers, network equipment, man hours, etc in the entire system as a direct cost of conducting those transactions.
      This wouldn't be any different then looking at all of Visas equipment and energy costs and dividing by the number of transactions it conducts per day to arrive at a 'cost' of swiping your credit card.
      • Not really. Since bitcoins specifically ties mining activity to confirming transactions it's fair to link them.

        If it is fair to link them then it is more than fair to ask that we at least get the most basic math, explanations, and conclusions right, which are points where this story (or title and summary, at the very least) fail miserably. If it is right to link them, then it is wrong to do so incorrectly and in the most inflammatory way possible.

      • by Kjella ( 173770 )

        This wouldn't be any different then looking at all of Visas equipment and energy costs and dividing by the number of transactions it conducts per day to arrive at a 'cost' of swiping your credit card.

        Note that this would only be a tiiiiiny fraction of the cost. Here in Norway we have "BankAxept" which is a no-frills direct debit solution, it costs the store around $0.03/transaction (plus ~$100 to establish, ~$20/month) and VISAs physical transaction costs are probably roughly the same. The rest are the kickbacks, dispute process etc. which is why the store usually pays around 2% in processing fees. Plus they run the risk of chargebacks and such, while with direct debit it's as good as cash in hand. Whic

    • Because on a fully effective bitcoin network, there is a fixed(constant) ration between the number of transaction that can happen on the network, and the number of blocks which are mined.

    • The energy spent *MINING* a bitcoin is not at all close to the energy spent *TRANSACTING* a bitcoin. Why is this even a metric?

      Mining subsidizes transaction fees.

      Mining is sort of like a fixed cost, transactions fees like a variable cost. You have to factor in both.

  • Irony (Score:5, Insightful)

    by markdavis ( 642305 ) on Saturday November 11, 2017 @11:46AM (#55531029)

    It is ironic that in a era where most people are talking about:

    * Energy efficiency
    * Energy independence
    * Emissions reduction
    * Green power production

    we are racing to consume [waste] tons of energy to produce "currency" which doesn't actually produce any goods or services. Imagine consuming megawatts of energy just to produce currency that could then be used to later buy things like, perhaps, more megawatts of energy. Seems insane.

    • So ... just like gold or diamond mining.

      • No. Both gold and diamonds have practical uses in industrial and scientific settings.
        • Industry and science can now use synthetic diamonds. They are cheaper (especially the little ones used in saw blades) and have better quality. Industry use of gold is only 10% of the mined amount. We could stop gold mining, and the industry could survive on the already-mined gold for centuries.

      • Other than resulting in something tangible and useful? Yes. Otherwise, it's exactly like when I mine items to make money in my favorite MMORPG.
        • Just because it is tangible and useful doesn't mean that it is valuable. Water is tangible and useful.

          I mentioned diamonds and gold because the price of those commodities is far higher than their intrinsic value.

      • Re: (Score:2, Troll)

        by markdavis ( 642305 )

        >"So ... just like gold or diamond mining."

        Both have intrinsic value. Just like coal, copper, or uranium, or any other actually mined materials have intrinsic value. A "bitcoin" or whatnot, however, has no actual value whatsoever, just a conceptional value that people artificially place on it. It is a lot like actual fiat currency which has no actual value; except fiat money costs very little resources to create.

        • fiat money costs very little resources to create.

          Yep. And that's actually a bad thing if you're trying to keep your wealth stored as fiat money. Inevitably, someone will come along and decide to solve their problems by creating a bit more money, making your store worth less.

          • Bingo! And that's why the cryptocurrencies are gaining strength ... they finally equate the relative value of the currency to the strength of the global marketplace, and the role of the Federal Reserve is replaced by the cooperative of miners.

            A thing can only be used as currency if it is expensive to replicate and its source can be controlled by a reliable producer. The US dollar is hard to replicate, and every few years the "proof of work" has to be increased to keep ahead of people who figure out how t
    • There is a small benefit to the increasing cost of mining BTC, in that it pushes the technology of high speed computing, including economizing on power consumption.

      • Bitcoin mining doesn't create very useful technology. It only creates optimized technology for calculating a particular SHA-256 hash. There's very little spinoff from this.

        • Sure, the actual computing is being done with an ASIC specially for this task. But because the limiting factor on mining is already keeping the cost of power below the value of the coins produced, any way of shaving power used counts, as does any way of cramming in more parallelism.

    • by mysidia ( 191772 )

      This is because of COMPETITION for mining, AND the low cost of energy. When energy costs increases, mining will be less profitable or unsustainable at current hashrate at that point, and thus less power will be consumed mining, and the difficulty/energy required will drop.

      I would point out that a LOT of mining is occurring in China and using up excess renewable/subsidized energy production that would be wasted otherwise.

      So what happens is mining also incentivizes production of that renewable energy a

    • However, as the waste product is heat, it can be viable to use mining to warm buildings in cold countries.
      • I live in a cold country - the UK.

        Energy costs about 5 times as much in the form of Electricity as it does in the form of gas*. I would be better off with a personal truck engine converted to gas generating electricity in my house, and that is without considering the waste heat from a gas engine would heat my house - but the neighbours might complain about the noise.

        Centralised energy generation was an excellent idea with steam engines in Victorian times, but its damn stupid now. Using giant gas turbines

        • I'm in the UK too and yes, gas is more economical for heating and cooking. However, not everywhere has a gas connection and some people do use electricity to heat their homes (e.g. storage heaters using cheap night-time electricity).

          I found a Ukranian company selling some heaters (their website looks a bit old, so I don't know if they're still in business): http://en.hotmine.io/ [hotmine.io]
        • I think you forgot the actual energy distribution part of your equation. Electricity is far easier to distribute than other forms of energy: lpg, petrol, diesel, etc. The infrastructure is also easier to maintain than the other forms.

          Not to mention the distributed maintenance costs would be higher when stuff breaks.

          Then there is the sharing benefits where a group has less peak demand than the combined peak demands of each so you need to produce less energy in the first place.

          Distributed solar I guess comes

    • We need DIGITAL currency that BTC currently is not:

      - has low latency transactions (seconds at most, scaling problem, transaction history drag)
      - is eco-friendly = transactions are near free (minimum payment for watts/others/intermediaries/...)
      - the price is fixed (to avoid speculations/currency being a subject of trade instead of tool for trade, maybe price fixed to Basket of Goods?)

      + all the cool features that BTC curently has like limited amount of coins (to avoid inflation), security, validability, decent

      • We already have that. It's called a debit card. Those things are easy to do if you are willing to trust in a central authority.

    • As long as stores are willing to take my bitcoin and give me real products ranging from toilet paper to cars, houses and boats... is your statement holding any value?

    • FALSE. It does produce something: confidence in value. If it takes megawatts of energy to create the coin, then it cannot be counterfeited without similar input of megawatts of energy. All that power is providing the basis that lets us have confidence in the value of the transactions. If you look at physical currency, you will see that bills and coins are designed to prevent counterfeiting by increasing the amount of work needed to simulate one. This is just the logical step -- if any physical object can be
      • Smart post... Bitcoin is proof of energy production capacity, which in a world gaining AI and robotics is equivalent to the capacity to produce EVERYTHING. It seems renewables are the way to go with it, as a renewable source that can sustain itself (with a little love from robotics AI) is equivalent to an ever flowing cornucopia of money, because it's equivalent to an ever flowing cornucopia of wealth in terms of production capacity. This is because it all comes back to energy in a robotic world, mining the

        • If the currency draws more power than makes it worth it, then it starts requiring less power to validate transactions. More importantly, if the transactions can't cost X amount of power, it implies there isn't enough power for the hospitals anyway -- that's when the economy would be contracting, perhaps collapsing because we've run out of resources to sustain that level of life. The math behind the cryptocurrencies tries to take such things into account. We don't know if it'll work out, but that's the theor
  • Off-Topic (Score:2, Informative)

    by Anonymous Coward

    Since the average American household consumes 901 KWh per month, each Bitcoin transfer represents enough energy to run a comfortable house, and everything in it, for nearly a week.

    Would be 3-5 weeks for other western countries who actually insulate their houses, use modern appliances and lighting.

  • Given that the average electric bill per household per month is substantially less that $7,000 (price of BTC), its economically viable to keep doing this. The cost to the environment is another thing. Letâ(TM)s just hope that some of those bitcoins are put towards research to mitigate the environmental cost.

  • by hxnwix ( 652290 ) on Saturday November 11, 2017 @01:06PM (#55531429) Journal

    I pay my power bill using bitcoins. I noticed that I have to build out exponentially more bitcoin mining infrastructure every month, but I thought that was normal. I guess I should have realized something was amiss when we built the 60-acre data center. Anyhoo, the 3,600-acre data center will be sufficient, I am confident.

    • Same here but I built it under my house. I alternate floors of miners and floors of marijuana plants, just like every bitcoiner. Last time the cops came for the high electricity bill, they stopped at the first floor of miners they saw. Now 180 floors and counting!
  • Each transaction costs about $32.25 just in energy used alone at my peak rates.

    What a fucking waste.

    • by MrL0G1C ( 867445 )

      2nd this, I'm surprised at the level of support bitcoin is getting when it's horribly inefficient, doesn't scale linearly and it's pretty obvious that a lot of the transactions are pure speculation into a bubble currency.

  • by RobinH ( 124750 ) on Saturday November 11, 2017 @02:05PM (#55531673) Homepage
    That 215 kWh per transaction number is out of date, since the power consumption is growing so rapidly. Last I saw, late this week, it was over 250 kWh per transaction. This is a ridiculous amount of electricity to consume per transaction. Sure, bitcoin is an interesting experiment, but the power consumption problem needs to get fixed. At some rough cost of $0.10 per kWh, that's creating a cost of $25 per transaction. Insane.
  • The flip side is that there is a huge profit motive here to actually pursue some of the many ways that energy usage could be reduced. This could create the incentive for someone to take a new approach that could then save energy throughout the computing industry which consumes orders of magnitude more energy than bitcoin mining alone. Many breakthroughs and milder advances spinoff from people madly pursuing wealth. How much of the modern internet would we have without the energy wasted on distributing porn?
  • From the "I'm not saying it's aliens - but IT'S ALIENS" department:
    I recently read speculations that Satoshi Nakamoto is actually an alien space probe, sent to destroy our civilisation.
  • According to this: https://blockchain.info/de/cha... [blockchain.info]
    we have up to 350k transactions per day. (This has similar numbers: https://www.quandl.com/data/BC... [quandl.com])

    So we "waste" 350,000 weeks of american households energy, per day.

    Where on the planet are the power plants supporting that?

  • And this is why Bitcoin is doomed to failure. The idea of a deflationary mechanism, making bitcoins rarer and rarer as time progresses, made it an automatic investment mechanism. But the increasing rarity increases in proportion to ever more computational work. If the worth ever goes down, or probably even appears like there's an outside chance of going down below transaction cost then bitcoins become worthless instantly.

    Let's see who has, or rather had two months ago, the intelligence to sell and get ou
    • If the worth ever goes down, or probably even appears like there's an outside chance of going down below transaction cost then bitcoins become worthless instantly.

      Just like anything right? I mean when nickles cost more than 5cents to make they'll stop making them then the world will end. Or....

      Let's see who has, or rather had two months ago, the intelligence to sell and get out at the peak before the crash.

      Two months? BTC peaked at $7800 3 days ago. Naturally it sank a little after a lofty rise and is at the same price it was two weeks ago when it was at it's then peak. Sure it could crash in the next 2 minutes, or in 20 years. But just wishing it away won't make it happen.

  • > This averages out to a shocking 215 kilowatt-hours (KWh) of juice used by miners for each Bitcoin transaction (there are currently about 300,000 transactions per day). Since the average American household consumes 901 KWh per month, each Bitcoin transfer represents enough energy to run a comfortable house, and everything in it, for nearly a week.

    That's just being silly. Imagine a company that has three vice presidents and spends $1 billion per year. I can say that company spends "over $300 million per

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