Bitcoin / Bitcoins / Crypto Currency

Sheesh. Sorry, I must have forgotten to include the necessary disclaimer that, a) any article(s) posted don't wholly represent my views and/or understanding or those of the entire bitcoin community, and b) I just found some of the points interesting and pertinent to the (what I thought was a casual...) discussion about Bitcoin value and energy. I'll think twice next time before I speak up in the ABSOLUTE TRUTH OR NOTHING forum.

I find the 'Bitcoin-energy-usage-equals-X-country' argument pretty tiring.

If you can't be bothered to put any effort into actually thinking about the issue, better to just stay out of the debate. People do care about the issue and it's offensive if you can muster just enough energy to tell them they're wrong but not bother to do any of the thinking to explain why.

https://mobile.twitter.com/OlafStorbeck/status/1390685826380668934

Who's telling anyone they're wrong? It's just my opinion, which I foolishly shared... Honestly, it's a sub thread on a bike forum. I just wanted to post some interesting stuff I'd read about magic internet money...

Right, but you shared the article and didn't specify before hand which parts you agree with and what parts you don't.

The response from Bruce was entirely reasonable.

Bitcoin mining could form symbiotic partnerships with green energy or carbon neutral plans but right now it isn't because there's no incentive.

Isn't the incentive to use green energy pretty huge? Green, renewable or 'free' energy significantly lowers cost of production.

Anyway, I still think PoW needs to go. Proof of stake definitely seems the way forward. That's one of the reasons I'm a fan of the Cardano project, currently. They recently signed a deal with the government of Ethiopia to track student performance on the blockchain.

Green mining has loads of incentives as @heldring says. Not least of all because consumer opinion has turned against PoW so much.

I mentioned it a few pages back but one of my clients, who is acting on behalf of a consortium of various billionaires, is spending big money on wind and geothermal power for their bitcoin mining operations. The benefit to them? Ignoring the investment costs, their price per Kw has dropped from about 0.07 USD per KW to 0.03 USD per KW. Thats a game changer.

Yes, a lot of mining is concentrated in countries that the US would rather not have control the production of emerging asset classes. As a result you are starting to see incentives to onshore mining with places like Texas with a supply of cheap wind and grid balancing issues encouraging miners to move. Same in Canada and Scandanvia.

Until all[1] electricity is generated from green sources then any PoW style mining is contributing to increased electricity generation from non-green sources.

If the PoW style mining didn't happen then there would be less of a demand for electricity and so there would be less of a shortfall that has to be made up from non-green sources.

1. Given national/international distribution constraints.
   

Unfortunately, the miners have to consent to ditching PoW and many of the larger miners have no incentive to do that.

The problem to solve is engineering that incentive.

Isn't the incentive to use green energy pretty huge?

Not to miners. For them, the only incentive is to find the cheapest (also has to be reasonably reliable and available in the desired quantity). All the miner needs to care about is the price. Why should they care about how it is produced? Why would a miner want to be tied to one particular form of energy production when they could have the freedom to shop around? Why would they want (big one this) to make their business more complicated?

Bitcoin miners do not have to care. The current financial rewards mean that business is attracting those who really don't care.

In any case, the biggest problem is the sheer volume of energy being consumed. The share of the world's energy coming from Green and renewable energy sources is slowly increasing. Even in their current status as an experimental niche, PoW cryptocurrencies have the potential to completely outstrip that growth and increase the demand for fossil fuels. If they actually replaced fiat currencies, the amount of energy required to run the world's economies would be several times larger than the entire energy demand of the world today.

There's no such thing as free or even totally green energy. Setting aside land or water for energy production, construction, maintenance, even the significant waste heat generated (because no mechanical or electrical process is 100% efficient), it all adds up. And it would add up to a really big figure if BTC ruled the world.

Not to miners. For them, the only incentive is to find the cheapest (also has to be reasonably reliable and available in the desired quantity). All the miner needs to care about is the price. Why should they care about how it is produced? Why would a miner want to be tied to one particular form of energy production when they could have the freedom to shop around? Why would they want (big one this) to make their business more complicated?

Because green energy is cheaper than fossil in the long run?

PoW cryptocurrencies have the potential to completely outstrip that growth and increase the demand for fossil fuels. If they actually replaced fiat currencies, the amount of energy required to run the world's economies would be several times larger than the entire energy demand of the world today.

Fair, agree.

And it would add up to a really big figure if BTC ruled the world.

I agree, but isn't that unlikely? The BTC blockchain is not very efficient for handling such large amounts of transactions. I feel BTC may be able to survive since it was the first, but other 1st and 2nd generation cryptocurrencies will die out if they don't move towards a more sustainable model. I feel we're currently living the 'internet bubble' all over again.

Indeed. Cryptocurrencies will always be at risk of imminent collapse until they can cope with a huge number of microtransactions. Just work out how much it would cost for me to send £5 to someone else via BTC - transaction fees overwhelm small amounts such as that.

It's also one cryptographic flaw away from falling apart completely.

A substantial flaw in either SHA-256 or secp256k1 (for example) could render BTC utterly worthless in an instant.

A substantial flaw in either SHA-256 or secp256k1 (for example) could render BTC utterly worthless in an instant.

It will be cracked one day. But after 20 years of people trying, it doesn't feel very close as yet.

It'll be really interesting to see how crypto quantum proofs itself.

Don't forget that the problem is bigger than crypto itself. If somebody cracked sha256 today, its the entire world's banking systems and internet at risk...not just Bitcoin.

That's where layer two comes in. The Lightning Network (and its like) could facilitate smaller transactions off-chain to free up capacity and offer lower fees.

Fun fact: It was Bitcoin co-inventor Peter Todd who first cracked Sha1.

The last point is very important. Production of solar panels and wind turbines requires a lot of resources including toxic mining for rare earths. At the end of their life span it is also difficult to recycle the equipment.

Surely anyone sending small amounts is using XRP, Nano, RSR, LTC etc. No one is sending small amounts using BTC or ETH. The fee's will still often be small compared to using Western Union for people who are sending money home.

Because green energy is cheaper than fossil in the long run?

The miner can buy what's available now. They don't have to care where it's coming from. They don't have to invest in the power supply system to make it cheaper in the future - other people are doing that. Besides which, I'm pretty sure if you did a survey of the big miners you would find that a significant number believe the whole green energy and climate change idea is a scam and that the rest just don't care.

And it would add up to a really big figure if BTC ruled the world.

I agree, but isn't that unlikely?

It was the logical conclusion of your argument. But it doesn't matter. The scale of BTC energy use is a problem now.

The fee's will still often be small compared to using Western Union for people who are sending money home.

This. Some of my Dev team are unbanked in their home country and Bitcoin offers far better fees than Western Union and the alternatives.

Edit: They also get far better exchange rates on exchanging BTC for USD than they do from banks and money transmitters. (Given that the local currency is not desirable)

Whats ppls thoughts on Telcoin?

The miner can buy what's available now. They don't have to care where it's coming from. They don't have to invest in the power supply system to make it cheaper in the future - other people are doing that. Besides which, I'm pretty sure if you did a survey of the big miners you would find that a significant number believe the whole green energy and climate change idea is a scam and that the rest just don't care.

Show me some numbers and I'll believe you... Right now you're making loads of assumptions. According to ARK, 76% of all miners are using renewable energy. However, that's a biased source. I'm open to information!

It was the logical conclusion of your argument. But it doesn't matter. The scale of BTC energy use is a problem now.

Sure I agree, I believe we would be better off without BTC... But I guess it'll take a while for the world to also believe that.

Show me some numbers and I'll believe you

Considering where much of the mining is happening at the moment, I don't think turning up with a clipboard and pen is a healthy career choice.

Them brush strokes are almost as broad as the country(s) you're slagging off lad.

https://youtu.be/x5RCfQyTDFI