Bitcoin Q&A: Power Consumption

Is the “vitality consumption” in mining an issue? Mining is a enterprise of arbitrage for the most affordable sources of electrical energy. Proof-of-work mining is contributing to huge funding and subsidy in renewables / different vitality and effectivity enhancements in processing. It’s driving the decentralization of vitality manufacturing. “Consumption” in Bitcoin is simple to criticize as a result of it’s apparent, whereas the hidden externalities of the standard monetary system are huge.

Chapters
0:00 What is the resolution for vitality consumption in mining?
0:32 Selecting your mining location
2:28 Decentralization of vitality manufacturing
3:06 Bitcoin is simple to criticize for its vitality consumption as a result of it is apparent
4:00 The extent of safety we’ve for bitcoin immediately is a degree of safety that may deal with world assaults
4:50 I do not suppose we are able to afford two proof-of-work programs on this planet

That is a part of a chat which passed off on the Bitcoin Open Blockchain (BOB) neighborhood occasion on October twenty ninth 2017 on the mHUB innovation middle in Chicago, Illinois:

RELATED:
Immutability and Proof-of-Work: The Planetary Scale Digital Monument –
Proof-of-Work (PoW), Proof-of-Stake (PoS), Delegated Proof-of-Stake (DPoS) –
What’s mining? –
Photo voltaic vitality and mining in house –
What mustn’t go on a blockchain? –
The 14nm restrict, decentralization, and renewable-energy mining –
Why has mining centralised in China? –
Bitmain and the ASICBoost allegations –

Andreas M. Antonopoulos is a technologist and serial entrepreneur who has change into one of the crucial well-known and revered figures in bitcoin.

Observe on Twitter: @aantonop
Web site:

He’s the creator of two books: “Mastering Bitcoin,” revealed by O’Reilly Media and regarded the perfect technical information to bitcoin; “The Web of Cash,” a guide about why bitcoin issues.

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MASTERING BITCOIN, 2nd Version:

Translations of MASTERING BITCOIN:

THE INTERNET OF MONEY, v1:

THE INTERNET OF MONEY, v2:

Translations of THE INTERNET OF MONEY:
Spanish, ‘Web del Dinero’ (v1) –
French, ‘L’web de l’argent’ (v1) –
Russian, ‘Интернет денег’ (v1) –
Vietnamese, ‘Web Của Tiền Tệ’ (v1) –

MASTERING ETHEREUM (This fall):

Music: “Unbounded” by Orfan ()
Outro Graphics: Phneep ()
Outro Artwork: Rock Barcellos ()
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50 COMMENTS

  1. I happen to mine in the us and in a state that has some of the highest prices for electricity in the entire county. BUT I use so much that I was pretty much forced to go and try to find a supplier with the cheapest rates and it turns out that im now paying even less for all my other electic I use in my house and my work shop. But Im still makeing such a good profit on every kw I consume that its still really efficant use of power and not have to pull up stakes and move to some other location to be able to get my electic cheaper and save a few $100 a month in power bills. That would end up being off set by the higher costs of everything else such as renting or leasing space as well as would end up useing more energy in cooling if I moved out of the cold of up state ny. Were we only get few weeks of warm weather per year.. So in the end its still one of them 6 to one or a 1/2 dozzen to another type things. and whats even sort of funny is I have become much more of an energy mizer then I ever was before. now when I see a light on in my house in a room in not useing. I think oh no that electric being waisted and costing me a few fractions of a penny thats not even makeing me money and so turn it off. lol

  2. That was an incredible response to that question, Andreas. I had been struggling with that myself, just getting into crypto currency. Thanks for everything.

  3. So cutting through the hero worship, the real answer was right at the end:

    “I don’t think we can afford two proof of work systems on the planet.”

  4. I think what he’s talking about is plausible in the future, but I don’t see China or the US investing in the necessary tech and infrastructure to meet the need in time before ecological disaster. That’s not really BitCoins fault though.

  5. That’s the biggest train of evasive arguments I’ve heard in a while…
    1. How does the market price of electricity across the globe say anything about the sustainability of it? You could argue that lower prices are even worse for the environment.
    2. Did he just say that the energy that is used in mining would otherwise be wasted? Really?? Don’t you think the energy producers are adjusting their production based on estimated usage? And don’t you think increased usage would result in higher capacity (and thus production).
    3. I agree with the point that normal transaction usage (banking system) uses tremendous energy as well. But he hides the fact that mining is so incredibly inefficient compared to the usual ways of handling transactions (banks) or things like PoS. It will not get better over time because if adoption of the currency increases, the fees will only go up in value and so will the mining.

  6. Why use a mining currency when there are countless low energy currencies that function as well or better than bitcoin. I think we all just see the $$ and money bug in our brain overrides rationality. Sure they maybe setting up Renewables to mine BTC but its all material, energy, being wasted that could be used for useful purposes. So yes it IS possible to waste renewables. Dont let greed cloud your judgement.

  7. but but but… we already have a solution. and that is a token having NO MINERS as one of its features.

  8. Yeah this is the answer of a child has when you ask “Why are you eating ice cream when you’re not supposed to?” And the child says, “But he’s eating ice cream too.” I get what he’s saying but his answer is predicated upon the idea that Bitcoin’s and thereby blockchain technology use is worthy of the power it uses. I think the jury is still out on that.

    He’s absolutely right we don’t have enough energy on Earth for more than one proof of work system. And he’s right that there’s an end game on mining for Bitcoin. But if we extend this power-hogging technology beyond currency we’re in trouble.
    The fact is that blockchain technology is intentionally written to be a power hog. It’s bad design. It could have been designed a different way but it isn’t. And it was fine for a few geeks playing coin God’s on their CPUs but now it’s I the real world and people are actually trying to find use cases for it we’ve got a problem. It’s not enough to say Blockchain soaks up wasted energy; it can and it does but I have a problem with the way that energy is generetated. His “green coin,” comment is particularly aggregious. Energy is usually cheap because it’s exploitive. The costs to humanity are great. I’m not saying blockchain technology started this problem my gripe is that it needlessly and without true value adds to it.

    The real opportunity is in redesigning the proof of work system in a way that doesn’t require untold energy amounts.
    What does a redesigned blockchain technology look like with actual value embedded in proof of work look like. How might we reengineer blockchain technology to provide value that data exceeds its costs?
    Also not sure I buy the Visa argument. I’ll have to look at the real data. But if you want to put it in those terms the only real value in Bitcoin is to miners. That’s the way it’s designed where as Visa has a value arc that crosses many.

  9. Andreas is not saying we should plan energy (blah blah) based on bitcoin needs. Rather the opposite, he says plants are built for future people’s demands, so there is always initial excess capacity. Bitcoin can use this temporarily, helping pay back the investment on the plant, and moving alsewhere when people’s demands increase and local energy prices rise.

  10. We could use some convoluted solution to sort of solve some of Bitcoin’s huge list of shortcomings, or we could just use RaiBlocks which was built with these solutions from the ground up. No mining, no transaction fees, instant transactions. There’s literally no practical reason to use Bitcoin or one of its thousands of clones over RaiBlocks. The only people hanging on to 1st generation cryptocurrencies are those that are heavily invested in them, either via the market, or mining equipment. It’s time to move on to the future. Bitcoin is the 28k modem of crypto.

  11. Well that was full of incorrect conclusions. Just saying something doesn’t make it real. For one, how is it driving decentralization of energy production? And if it would be, that would be wasted energy production, because it’s used for bitcoin. Cheap electricity prices aren’t a result of overproduction, negative electricity prices would be.

  12. Just wondering, what you say about one thing, that usually is in everybodies head, when thinking about entering:
    Why should I now just get minor mining results, while a 12 year old, who just heard about it and just simply did it out of pure lack of safety awreness, just started his program back in the day and is now millionaire or even billionaire?
    What did he make, what did he actually performed getting so much money for doing nothing? Sure: you can compare that with some lucky and highly profitable startups involving people, who also had no clue and suddenly were millionaires.
    But why should I do so and why should I live in a society, where there are people around me buying stuff with just having had their computer on for several months back in the beginning of a bitcoin?
    And what is this currency jumping tell you. I just see hippsters trying to find another upcoming currency, who does perform similarly and make them millionaires out of thin air? Why should someone earn millions with such a stupid stuff, while people are dieing from hunger everywhere.
    I know: Comparing it to banking systems, someone would paint me the picture of it being absolutely the same, but we are just anaware of the crimes. But how does an anonymous currency is better than a currency controlled buy institutes, that are largely depending on their countries society and their money and for getting that money, they have to be better than others….having resulted in some policies, that prevent, that the banks now simply go on rage mode and officially call for child molestation. Sure, bank and companies (economy in general) are in total responsible for such fucked up things as well, but doesnt on kryptocurrncy just happen more and more shit? Why is noone seriously accepting bitcoin as a trading currency for their goods? Why is there hardly anyone serious to really use it instead of just shifting it from hand to hand over exchange/buy back/exchange, etc… Why should we involve the absolute downside of stock markets (that are ruining the world already) to our earning…..One day I have 600 dollars, the next day it is 1 dollar and 2 days further it is 2800 dollars again? Sorry, but in the end it is even more fucked than anything else as any second, someone in this network got screwed over and lost nearly anything.

  13. Yes, miners seek cheapest sources of electricity and that gives entities with an abundance of energy significant power – particularly those with cold climates. I wonder if this pursuit of cheap energy lead to a concentration of miners, which then makes them vulnerable to influence and also attack?

  14. Nobody is talking about the energy being saved from settlements on the CC networks, the buildings needed to house this data, the people driving to work to settle transactions / involve in the process. Bitcoin is a replacement to many things, time for a comparison on the consumption.

  15. I have a question on the text to the video “misrepresented very often in two ways” – what are the two ways of misrepresented?

  16. Come on guys, solar is getting cheaper and more efficient. Not to mention other alternative energy production methods. In some years it won’t be an issue…

  17. This guy has no freaking idea how the electrical grid works. I would also be surprised if he ever had a course in physics.

  18. If bitcoin was really this efficient the banks would have taken it over a long time ago. And know bitcoiners begin to talk about becoming the world bank by providing a centralised mining operation on which everyone else is piggybacking? But that would be equivalent to a takeover by the old banking system.

  19. “Bitcoin is easy to criticize for its energy consumption, because it’s obvious”. Yes indeed Andreas. I feel like you’ve danced around the question, there is a fundamental issue with a proof of work system. Surely Bitcoin must work to resolve this

  20. Usually you say good things Andreas, but if you just answered: Yes Bitcoin and PoW is awfully wasteful of energy and we need to solve that.
    I would have kept you to higher standards. Cardano and their Ouroboros algo will run more decentralized then any other blockchain the world has seen by end of 2019. In addition it will be 100x faster and all this can run on a low energy computer similar to a RasberryPi. And we will all know it in a few months time. BTC will never solve its energy problems. And with todays knowledge of our planets climate issues… Sorry.

  21. Cryptocurrency mining simply needs decentralised power generation systems, that are better at generation of power than currently available through solar, wind and hydro, yet don’t create the short and long-term pollution that nuclear, coal and petroleum-based systems provide.

  22. Actually China does have a large distribution network but miners are increasing the baseload needed.
    In addition to that, China also makes extensive use of HVDC. Alternative energy can be stored as pumped hydro, flywheels etc. Stop trying to justify something to get people to join in increasing the value of bitcoin to benefit yourself.
    All that wasted processing power can be used to process for medical research rather than your currency that only benefits a few people but doesn’t create anything useful for mankind. That data center is used to serve data for the internet and much of it visualized and is used to do productive things. As for offices, you are simply trying to justify for yourself while your little server for one person uses up kilowatts of power.
    Offices in general serve many people not just you so do banks, cars and diesel trucks. All transport good for consumers. Your bitcoins can be used for purchasing of goods as well, but serves less but the per capita cost is high. Bitcoin is no were near as efficient as current transactions and cannot be accepted as a “national” currency due to it’s many flaws. You don’t want two proof of work systems because you want one so you can get the most benefit.

  23. There are 2 components to Bitcoin energy usage. The first component is the Block Value (currently 12.5 BTC per block). This is a ONE TIME ENERGY COST to create the coin so the energy to mine a block of 12.5 Bitcoins is expended one time only to create these 12.5 BTC. This is analogous to the energy and expense used to mine and refine gold into a coin for the first time. The second part of energy usage is the transaction fees (typically very small) which is the energy used to actually perform the transaction. This is analogous to the energy needed to transport a gold coin from place to place to allow money to be spent. The same can be said for the banking network or the credit card network where it takes energy to perform a transaction. The actual energy needed (transaction fees) to perform a Bitcoin transaction is actually 1560 times more efficient than the banking network at performing transactions if you compared the value of the Bitcoin transaction fees to the total cost of energy to run all of the bank branches, the energy needed for all of the employees of banks needed to drive to work, the energy needed to run all the computers that connect all the bank ATMs and central computer networks, and the energy needed to power all the cash registers and credit card terminals. The people that are anti-Bitcoin tries to lump the ONE TIME ENERGY USE to create the Bitcoin with the transactions in order to make Bitcoin look like it uses much more energy per transaction than it actually does.

  24. He forgets to mention how much it costs to keep store and transfer the coins… bitcoin is a the pioneer for crypto’s, but it is ran by dated tech and will die soon.

  25. Sounds like green washing to me. 
    Fact: Production of Bitcoins uses more energy at the moment then what a country like Switzerland consumes. And that’s going to double .., triple.., etcetera.., in the years to come. Is that green?
    Fact: Cheap energy = Russian oil. A lot of mining takes place there, causing an incredible amount of CO2, aiding to the climate crisis.
    Fact: The fluctuation in energy demand can better be used for H2 production or charging electric vehicles for transportation and later even planes. That helps us to solve the climate problem. Far better then wasting this energy for bitcoin mining.
    Fact: The green energy now produced in the Netherlands for instance, is rapidly being claimed by huge server parks, in stead of being used for the energy transition (where these wind farms have been built for in the first place). So these data centres are actually destroying the energy transition.
    Fact: That the hidden externalities of the traditional financial system massive is, is a statement by the author, without prove. It’s a bit like the statement “Streaming music causes less energy demand then cd’s because of the hidden externalities of cd production/ consumption industry”, which has been proved to be wrong. Streaming music is proven to consume a lot more energy because of all the servers it uses then the whole former cd industry.

    So mister Antonopoulos is a good seller of his own case. I understand that, because it is his job.
    I rather like independent information. I’m not going to ask Shell how ‘Green’ their oil is for instance.

  26. Choose location is possible? BS… empirical data says otherwise and then there’s a lot of crypto malware that doesn’t give a shit! Once global energy production is 100% based on renewable energy, we can talk again about this bitshit…

  27. “Using electricity that would be otherwise wasted” – a very specific niche use case I think. What percentage of BTC miner use is actually in these scenarios with renewables spoken of?

  28. To prove that I have collateral, I could just put several tonnes of coal in escrow, or I could burn them. Bitcoin chooses the latter. Bitcoin must die

Comments are closed.