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Bitcoin Power The Almighty Buck United States

Energy Cost of 'Mining' Bitcoin More Than Twice That of Copper Or Gold (theguardian.com) 165

An anonymous reader quotes a report from The Guardian: The amount of energy required to "mine" one dollar's worth of bitcoin is more than twice that required to mine the same value of copper, gold or platinum, according to a new paper, suggesting that the virtual work that underpins bitcoin, ethereum and similar projects is more similar to real mining than anyone intended. One dollar's worth of bitcoin takes about 17 megajoules of energy to mine, according to researchers from the Oak Ridge Institute in Cincinnati, Ohio, compared with four, five and seven megajoules for copper, gold and platinum.

Other cryptocurrencies also fair poorly in comparison, the researchers write in the journal Nature Sustainability, ascribing a cost-per-dollar of 7MJ for ethereum and 14MJ for the privacy focused cryptocurrency monero. But all the cryptocurrencies examined come off well compared with aluminium, which takes an astonishing 122MJ to mine one dollar's worth of ore. [...] To account for the wild fluctuations in cryptocurrency price, and therefore effort expended by miners, the researchers used a median of all the values between January 1, 2016 and June 30, 2018, and attempted to account for the geographic dispersal of bitcoin miners. "Any cryptocurrency mined in China would generate four times the amount of CO2 compared to the amount generated in Canada," they write, highlighting the importance of such country-dependent accounting.

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Energy Cost of 'Mining' Bitcoin More Than Twice That of Copper Or Gold

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  • by Kiuas ( 1084567 ) on Tuesday November 06, 2018 @08:08AM (#57598980)

    suggesting that the virtual work that underpins bitcoin, ethereum and similar projects is more similar to real mining than anyone intended.

    Can't speak for ethereum, but in the case of BC this is entirely intentional. Since the computational complexity of the BC transactions grows with time, it's unavoidable that the energy-usage is also going to increase at the same time. This, coupled with a finite cap on the total amount of BC is also what makes BC deflationary by design, which can be a good property for an investment but is overall a terrible property for a currency.

    To claim that this is not intentional when it stems from the way the currency & cryptography is set up is just ridiculous.

    • Since the computational complexity of the BC transactions grows with time

      That's not how it works. The complexity grows with the mining capacity. And mining capacity grows (and possibly shrinks) with price of bitcoin, mining reward, and electricity. The mining reward consists of a fixed reward per block (halved every 4 years), plus a fee per transaction (determined by market mechanism)

      • by Gr8Apes ( 679165 )

        Since the computational complexity of the BC transactions grows with time

        That's not how it works. The complexity grows with the mining capacity. And mining capacity grows (and possibly shrinks) with price of bitcoin, mining reward, and electricity. The mining reward consists of a fixed reward per block (halved every 4 years), plus a fee per transaction (determined by market mechanism)

        You're right - it doesn't grow with time, it grows with transactions. It has nothing to do with the mining capacity, although transaction cost might increase as the capacity goes down, and the time to complete transactions will go up once capacity thresholds are reached. The whole thing is a virtual house of cards.

        • You're right - it doesn't grow with time, it grows with transactions. It has nothing to do with the mining capacity,

          The computational complexity is adjusted based on mining speed so that there is (on average) 1 block mined every 10 minutes. If mining capacity goes up, then more blocks are found, and difficulty is increased. If mining capacity goes down, difficulty is decreased.

          The amount of transactions only affects complexity indirectly. As there is more demand for transactions, the mining fee goes up (not linearly, because the fixed block reward is much more dominant right now), which makes mining more attractive, and

          • by ET3D ( 1169851 )

            Thanks for educating people on this. One day hopefully people will realise that mining is just social engineering with no good technical backing. It's a way to get people to get on the bandwagon and support the network. For that it works, but for any other goal it's pretty terrible. In particular, crypto is supposed to be distributed, but mining encourages centralisation, because most profit can be made in areas where electricity costs less. Money also goes to those with the more money, those who can afford

          • by Kiuas ( 1084567 )

            Yes, but what I'm saying is that the way it is set up has created a cycle. Because the amount of bitcoins awarded has a half-life, and because the awarded coin always goes to the group who solves the block, this has created a situation where the competition for new coins grows all the time, leading to higher centralization (most mining is now done by commercial operators) and increasing difficulty. If you look at the chart from the wiki [wikipedia.org] you'll not that although there are occasional small drops, the overall

  • by Anonymous Coward

    The energy cost doesn't fucking matter. The purpose of mining something is not to save energy. The purpose of mining something is to make money, regardless of whether you're mining gold, diamonds, or cryptocurrency.

    So, the important fact is not how much energy it costs to mine the crypto; the important fact is does the crypto mining process create a net gain in money? If it makes money, that's all that matters.

    How much energy is spent trying to mine gold and failing to do so profitably, or even entirely? I'

    • How much energy is spent trying to mine gold and failing to do so profitably, or even entirely? I'm guessing most.

      Private gold miners/companies don't have to provide numbers regarding the amount of gold they produce, so any estimate would be a guess. Presumably, publicly-traded gold mining companies produce more gold (I think they're required to state how much gold they produce) than private gold miners/companies, but that's another guess. I do know that for the old-fashioned, placer-mining, multistory, floating gold dredges (a pretty efficient way to mine gold, if the dredge is located in the right place), the price

  • by alvinrod ( 889928 ) on Tuesday November 06, 2018 @08:11AM (#57598998)
    The difference is that the average schlub sitting at home mining bitcoin can't use the energy they have access to in order to mine gold, etc. so from their perspective it's a non-starter to even consider producing gold instead. Never mind the additional capital costs of mining gold, unless you're going to pan for it on public land.
    • Sure you can. You can buy the stocks of (precious metal) mining companies. That uses even less energy.
      • That's no different than buying stock in any company though. You just own the enterprise that does the work, which doesn't necessarily mean that any more or less work will be done as a result of that change of ownership. Maybe the closest thing would be running a high-frequency trading algorithm to spend electricity to attempt to gain value through arbitrage trading, but that market is already pretty saturated.

        Bitcoin mining isn't difficult to understand. If people can get paid more for a bitcoin than it
    • Also we don't have "blood bitcoins" yet: coins mined by kids under horrible conditions. Well, give it time...
      • by Gr8Apes ( 679165 )

        Also we don't have "blood bitcoins" yet: coins mined by kids under horrible conditions. Well, give it time...

        Now you have me picturing hordes of children running on treadmills powering generators....

  • by mcvos ( 645701 ) on Tuesday November 06, 2018 @08:15AM (#57599006)

    All this wasted energy sounds like an argument for some stiff taxes on energy. I honestly see no other way to discourage people from wasting so much energy on these things. I'm all for cheap energy, but if people start wasting it like that, just because it's cheap, maybe the cost for energy should include its true cost, which includes the cost of repairing the damage it cases.

    Of course that also means we should then invest those taxes into solutions for the problems created by this energy waste. Either cleaner energy technology, or carbon sequestration.

    (Also, how is aluminium mining even economically viable?)

    • All this wasted energy sounds like an argument for some stiff taxes on energy. I honestly see no other way to discourage people from wasting so much energy on these things. I'm all for cheap energy, but if people start wasting it like that, just because it's cheap, maybe the cost for energy should include its true cost, which includes the cost of repairing the damage it cases.

      Of course that also means we should then invest those taxes into solutions for the problems created by this energy waste. Either cleaner energy technology, or carbon sequestration.

      (Also, how is aluminium mining even economically viable?)

      Im heating my whole house with this. I would need heat in cold climate even if I did not do it this way. Is it an energy waste when you are consuming the heat generated from mining ? It feels like a really nice way to heat a house to me, and you get paid for it.... can you find other heating systems that pays you to heat your house ?

      • by mcvos ( 645701 )

        If you use the energy to heat your house, that's definitely useful. I doubt most cryptomining energy is used that way, though.

        Whether using electricity to heat your house is the most efficient way to heat it, depends on how your electricity is generated and whether heat pumps are a viable alternative.

        • by RobinH ( 124750 )
          Useful but not really efficient. In most temperate climates (let's say Britain), if you're heating with electricity, you could heat with 1/4 the electricity if you used even an air source heat pump. In colder climates a ground source heat pump may be required, but still it's much better than just turning a very high grade energy source (electricity) into heat. Plus, south of the arctic circle, where you do actually need all that heat year round?
      • by jensend ( 71114 )

        Even if the waste heat is a benefit, that's still turning a pure usable form of energy, one that's ready to do useful work, into waste heat. That electricity was probably generated by burning fossil fuels, spending roughly 3.3W of heat per 1W of generated electricity. Then you have transmission losses etc too. Any kind of resistive electric heating is extremely inefficient.

        The only kind of electric heating that makes sense at household or larger scales is using the electricity to do the work of running a he

        • That electricity was probably generated by burning fossil fuels, spending roughly 3.3W of heat per 1W of generated electricity.
          It is more a 2 : 1 ratio, depending how you define efficiency, as a thermal power plant usually runs a bit less than 45% efficiency.

      • by Trogre ( 513942 )

        So you're heating your house with an electric heat engine with a CoP of... 1.0?

        You can do better.

    • I'm all for cheap energy, but if people start wasting it like that, just because it's cheap, maybe the cost for energy should include its true cost, which includes the cost of repairing the damage it cases.

      The true cost should be the price in any case. Not counting externalities is like "sticking it to the man" when self employed, you can pretend they don't exist but society pays the price. The opportunity to make large amounts of money then leads a few, through economies of scale, to profit disproportionately while the costs are socialized. It's not clear to buyers what those external costs are, and most people don't think about it much. This leads to the current state of affairs where libertarian views

    • by Muros ( 1167213 )

      (Also, how is aluminium mining even economically viable?)

      I'm reasonably sure that the energy cost given for aluminium was mostly for smelting, not mining. Aluminium is a fairly light metal, so even though a quick google was showing it 7 times the price of iron by weight, it's only about twice the price by volume. And it has uses where it is cheaper than other metals, like in drink cans, simply because of the properties of the metal.

    • by Koby77 ( 992785 )
      First, the energy wasnt wasted, unless you think that you know better than everyone else and should be the arbiter of everyone else's energy decisions. Who is to say that a cryptocurrency won't be double or triple the current value in the future? Who is to say i cant prefer $1000 equivalent of a cryptocurrency that i can easily exchange, rather than a $1000 chunk of platinum in my hand that i cant easily exchange? Second, the miners likely paid for their energy fair and square. Third, you sound like someone
      • by Trogre ( 513942 )

        Yes, it was wasted.

        All those people who set their computers spinning on pointless calculations and didn't win the bitcoin lottery have achieved literally nothing other than waste.

        Those who did earn a bitcoin only succeeded in growing their own personal wealth without contributing anything useful to anyone else, and in the process made it that much more difficult for the next person to find one.

    • (Also, how is aluminium mining even economically viable?)

      Because aluminum is expensive per kg. With how wonderful it is as a metal you would think that hardly anything would be made out of steel any more, and you would be right if aluminum were cheaper. It's excellently cheap to recycle, so if we instituted a policy where everyone was responsible for the waste produced by disposal of their products, you'd see a lot more use of aluminum. By just the first time it was recycled, you would see break-even, or even economic benefit. Aluminum melts at literally a thousa

    • 'wasted energy' implies there is no benefit or use in bitcoin mining.

      Different people have different ideas of what is beneficial or useful - needless to say, many people clearly find mining bitcoin beneficial and useful otherwise they wouldn't be doing it. As a get-rich-quick scheme or for ideological views of currency and traditional banking - either way, people are doing it for a reason.

      So who are you to say they are wasting energy?
      • by mcvos ( 645701 )

        They are wasting energy because that's the explicit purpose. New bitcoins are awarded to the people doing the most pointless calculations, which wastes energy. You could award those bitcoins based on something more productive than that.

        • by Mouldy ( 1322581 )
          You're missing the point. Using large amounts of energy cycling through calculations is a side-effect, not the purpose. The purpose is using proof of work as the core mechanism to bitcoin's decentralised trust model.

          There are other mechanisms that could be used like proof of stake or even proof of importance - but those trade different pros and cons and aren't as proven as PoW at this point.

          Using large amounts of energy isn't the problem. Using large amounts of fossil-fuel energy is. Many miners are
          • by mcvos ( 645701 )

            The purpose is using proof of work as the core mechanism to bitcoin's decentralised trust model.

            Yes, but it's the proof of pointless work. Nothing useful is being done with that work. It would be very different if all that massive work accomplished something useful.

            Using large amounts of energy isn't the problem. Using large amounts of fossil-fuel energy is.

            Sadly, at the moment, the vast majority of energy in the world still comes from fossil energy. Energy used to win bitcoins is not being used to heat the homes of the elderly or increase food production in poor countries. If bitcoin miners use clean energy, that's fantastic of course. But if they buy clean energy that could also have been us

    • by euxneks ( 516538 )
      This is absurd. What the fuck are we paying for with our electrical bills? What a dumb argument to make. "stiff taxes on energy"... Jesus Christ. We can get electricity from any number of sources. Taxing the _energy_ itself is absurd. Tax dirty energy if you feel you have to.
      • by mcvos ( 645701 )

        You're absolutely right, and I did not express that correctly. It's dirty energy that needs to be taxed. If all energy were green, wasting it would be much less of an issue. (Though wasting it could still lead to shortages for people who need it for more practical things, of course.)

  • Comment removed based on user account deletion
    • by necro81 ( 917438 ) on Tuesday November 06, 2018 @08:46AM (#57599116) Journal

      It does not matter if it uses more energy. It matters if the cost is worthwhile. Look at e.g. aluminium. That uses a shitload of electricity to to turn Bauxite into aluminium. Yet people still make money of it.

      It is worth pointing out that aluminum is eminently recyclable, too. In fact, it takes only 5% as much energy [wikipedia.org] to recycle existing aluminum than to refine new aluminum from ore. Because of this, most of the aluminum produced in the history of humanity is still in use. One could think of that energy as a one-time cost, unlike cryptocurrencies, where there is no end in sight.

      Most of the energy cost of refining aluminum comes from the fact that aluminum, unlike gold, is bound up in various oxides. To break the oxides and purify aluminum metal requires massive amounts of electricity - it's a lot like a battery in reverse [youtube.com]. Until we had access to large amounts of electricity, the alternative means of purifying aluminum were so costly and time consuming that aluminum was treated like a precious metal. Napoleon III had aluminum tableware [google.com] to flaunt his wealth and power (which is just laughable today, especially when you consider how soft pure aluminum is). The tip of the Washington Monument [wikipedia.org] in D.C. is aluminum. At the time (1884), it was the largest chunk of aluminum in existence.

      • Because of this, most of the aluminum produced in the history of humanity is still in use.

        It also doesn't hurt that aluminum oxide protects the underlying metal, so if you leave it lying around for a while, it remains highly recyclable. We do tend to aggressively recycle large steel things, but small ones are now just trash. Twenty years ago, steel was still worth scrapping for money. Today, there's few places that will take it without charging you for the privilege. Hopefully, this will have forward effects; more stuff made out of aluminum, less stuff out of steel, on the premise that it can be

        • Twenty years ago, steel was still worth scrapping for money. Today, there's few places that will take it without charging you for the privilege.
          You must live at a weird place. In Europe 90% of all steel/iron is recycled, just like aluminium (which is meanwhile close to 100%)

  • by Charcharodon ( 611187 ) on Tuesday November 06, 2018 @08:29AM (#57599050)
    My personal favorite is Gridcoin. Your CPU/GPU time are being used to provide cycles for research on the projects of your choice through BOINC (Berkeley Open Infrastructure for Network Computing).

    So the colleges get access to what amounts to a supercomputer

    I get some crypto. I was doing this for nearly a decade before they added the crypto so it is either actual money in the future or just another way to keep score.

    The last bonus is I had a stack of old machines in the garage collecting dust. A fresh OS install and BOINC and now they are set to wake up at night and crunch numbers to keep the house warm. It doesn't even matter that they are very outdated, any number crunching is a bonus, and the money that would have been spent anyway for the exact same thing. One day when I get motivated I'll rig up a thermostat that turns the software on and off so I can have better temperature control.

  • After the great crypto crash, the world will be left with a lot of usable generating capacity in out-of-the-way areas, such as small dams in rural China. This will bring electric cars, etc., to areas that never contemplated having such big-city amenities.

  • by cascadingstylesheet ( 140919 ) on Tuesday November 06, 2018 @09:02AM (#57599198) Journal

    Energy Cost of 'Mining' Bitcoin More Than Twice That of Copper Or Gold

    Well, yeah, but fake pyramid scheme "currencies" have more than twice the fake pyramid scheme coolness factor than either copper or gold, so there!

  • Future energy consumption should drop for BTC, so that energy cost will probably put it below precious metals. Then people can stop bitching about BTC energy use.

  • So, if the countries that have ample renewable power, like Germany f.ex. instead of paying Switzerland and Austria to take the surplus on some days off their hands, they could just mine bitcoins instead, simpler than storing it in batteries or generating hydrogen.

  • the researchers used a median of all the values between January 1, 2016 and June 30, 2018

    Wait a minute.... Averaging by median starting from 2016 is misleading. The COST TO MINE is not fixed. The cost to mine is a function of difficulty, and the difficulty is affected by hashrate --- how much hashrate people are willing to turn up is based on value but has steadily increased over time.

    If you want to "average" the value of a BTC, then you should be doing a weighted average where the weight valu

  • Every time I point out that crypto currency is a colossal waste of energy often generated by fossil fuel, I get attacked by hordes of guilty miners.

    Privacy and low friction international transactions are the big advantages to crypto currency, but there are other ways to accomplish those goals without destroying the ecosystem and making the fossil fuel industry rich..

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