Is Bitcoin Mining a Real-World Environmental Problem? 595
First time accepted submitter HeadOffice writes "Mark Gimein points out that Bitcoing mining uses a lot of power, enough that it is a real world problem: 'About 982 megawatt hours a day, to be exact. That’s enough to power roughly 31,000 US homes, or about half a Large Hadron Collider. If the dreams of Bitcoin proponents are realized, and the currency is adopted for widespread commerce, the power demands of bitcoin mines would rise dramatically. If that makes you think of the vast efforts devoted to the mining of precious metals in the centuries of gold- and silver-based economies, it should. One of the strangest aspects of the Bitcoin frenzy is that the Bitcoin economy replicates some of the most archaic features of the gold standard. Real-world mining of precious metals for currency was a resource-hungry and value-destroying process. Bitcoin mining is too.' However, not everyone is convinced that virtual mining is as bad for the environment as the real thing."
I guess it depends (Score:3, Interesting)
Hard to say (Score:3, Interesting)
How much is bitcoin worth? There was an interview recently with some 'bitcoin millionaires', people who had a million dollars worth of bitcoin. That of course raises the question: if they sold their bitcoin, would there be enough buyers to actually get them a million dollars? Or would such a large sale cause the market to collapse?
"About 982 megawatt hours a day" (Score:2, Interesting)
That's "41 megawatts" for those of you who prefer it in non-retarded units. In case you were wondering, that's 0.003% of the US's electrical generation capacity. Yeah, that's a real environmental disaster, there. It's not a problem, it's a rounding error.
Re:Or an economic drain? (Score:3, Interesting)
I believe right now 3600 btc are mined per day. At 100$ each that's 360k per day. I wouldn't mine those profit margins.
Re:Or an economic drain? (Score:4, Interesting)
Kinda funny, but the windmills here in Ontario have a negative profit margin of roughly the same daily.
Re:Hard to say (Score:4, Interesting)
Comment removed (Score:4, Interesting)
Re:Hard to say (Score:5, Interesting)
IANABP (I am not a Bitcoin Proponent, I own exactly 0BC and will not in the forseeable future), but I am interested in the idea and mechanisms involved.
If a break is ever found, suspected, or even slightly likely an orderly migration to better cryptographic primitives can be performed. If you are interested in knowing more the wiki [bitcoin.it] enumerates all the known possible attacks.
Re:Moore's Law? (Score:5, Interesting)
Actually they already use GPUs - and there are companies making ASICs now. Dedicated Bitcoin mining boxes. The people who purchased GPUs specifically with mining in mind are apparently already annoyed, because the new computational power coming online means they are seeing less return, due to the increasing requirements as the number of mined bitcoins increases.
Re:I guess it depends (Score:5, Interesting)
Electricity is not something we can efficiently transport from places where it's abundant to places where it's needed. Unused excess electricity is a waste.
A 2000km HVDC line loses about 5% of its energy to heat [abb.com]. 95% efficiency over 2000km lines seems pretty efficient.
Re:I guess it depends (Score:5, Interesting)
A few years ago (2008?), much was made of the tidal capture planned for the Bristol Channel. The study on which the argument of both sides was based had calculated that capturing enough energy in the channel would supply the entire energy needs of England, Wales, Scotland and Eire, all the outlying islands and the North Sea Oil Rigs, and still only deplete 5% of the total amount of energy passing through the channel at any time. Capturing 100% of the energy would not only supply most of Europe, it would also result in a glass-smooth Bristol Channel. The surfing fraternity won the argument, saying that even a 5% drop in tidal energy would kill the tourism industry in the area since most of the coastal tourism in the area relied on the four foot breakers*!
*Yep, that's what was said. The Bristol Channel has a 47 foot tidal range, which is pretty much the highest tidal range of any estuary on the British coastline.
Re:Until they hit the max number of bitcoins (Score:4, Interesting)
actually, you can. That's the whole point of the Gold Standard.
In 1925, the Gold Standard in England was set at three Pounds twenty Shillings and change. The Bank of England was authorised to print gold certificates (later to become promissory notes) to nine times the amount of gold it held in its vaults. In 1931, the 1925 Standard was abolished, and the BoE was authorised to not only deny any requests to make good on any certificate, they were authorised to print even more certificates to the total amount of national and Government debt(!), add the words "I promise to pay the bearer on demand the sum of..." on all its new issue promissory notes (they weren't called certificates now) and also the phrase "This note is legal tender for any debt" (or something like that). What this created was a fiat currency that had by 1932, a gold backing of something like .01%, and by the time decimalisation kicked in in 1971, the amount of gold ratio to the amount of currency in circulation was so low as to constitute a rounding error no computer of its time could calculate. What we have now since even the Silver Standard is abolished is like the United States, a currency that has zero intrinsic value (it is literally worth even less than the paper it was printed on), it's current value being based on the amount of book debt held by the banks against the amount of currency in circulation measured against similar situations of other currencies. If the Dollar takes a dive, Sterling follows. If the Euro falls off a cliff, as it has done since its inception, so does the Dollar. The only thing that keeps any of these currencies afloat is the seizure of lands and properties resulting from subpar mortgaging and artificial hiking of house prices, and the sheer audacity of private financial institutions in their recent activities in Cyprus and Ireland. At least Iceland had the balls to tell the bankers to go fuck themselves.
Re:I guess it depends (Score:4, Interesting)
You mean like how we, over time, produced so many cars and factories and other shit that we started effecting the environment?
Are you seriously arguing that we can just ignore the side effects of using window power? Thats the EXACT kind of thinking that lead to where we are now.
Using wind power ... USES the power thats in the wind. That means change, these are laws of physics, its just the way the universe works. You can't wish it away.
The sun will help replenish it, but it is not an unlimited resource and we'd be pretty fucking stupid and short sighted to treat it like one.
Re:Conversion (Score:4, Interesting)
you can exchange it for other currencies or goods & services, how exactly is it a fake currency?
Down at the local market I can exchange potatoes for other currencies or goods & services; that doesn't make potatoes a real currency though. Bitcoins are commodities. Nothing more, nothing less.
Re:Conversion (Score:5, Interesting)
Actually you get it backwards. A commodity is something you can actually use. Gold for example is used as currency and is a commodity, since it is used to make jewelry or electronics. Bitcoin is just a currency, you can't use it for anything. If Bitcoins are complacently devalued they are not worth the "bits they are printed on". Commodity that is also used as a currency, retains value if the actual currency is fully devalued. For example after WWII cigarettes where used as black market currency. But once the situation normalized and people started to get real money in their hands and could buy something for it, the cigarettes as currency where useless, but you could still sell them as cigarettes for real money.
About the fake part of Bitcoin, it's only fake as in there is not sovereign nation backing the currency, so what? Any currency is as good as the trust it is put into it by it's users. The currencies of nations tend to devalue too, as the users lose trust in that currency. For example during the perestroika in Russia many people used USD instead of the ruble, because they did not trust the ruble to be stable.
Re:Conversion (Score:5, Interesting)
"Isn't there a mechanism for adjusting the difficulty of mining depending on how much mining is done? Wouldn't that mean that the difficulty will go up if the price does, so that they will match?"
Yes, that is one of the things that would serve to bring the cost up to market place. While more miners will also bring the price down to the cost. (Actually, it's not "adjusted" per se. It's built in to the math. The more Bitcoins that are mined, the more difficult they become to mine.)
But my main point was that the market right now is very, very far from that equilibrium. It's completely irrational.
Re:Conversion (Score:4, Interesting)
As time goes by, new, more efficient methods of mining emerge. First there was CPU, then GPU, now we got FPGA.
I guess next comes a dedicated ASIC, an order of magnitude faster than FPGA.
With current difficulties CPU yields roughly 1-10 Mhash/s, GPU: 10-100, FPGA: 100-1000 (with rare exceptions.)
Breaking even on a CPU is nearly impossible nowadays, but the FPGA yields still a decent ROI. And creating 100BTC on a CPU in the early days took about as much time and money as creating 100BTC nowadays on FPGA.
Of course nowadays 100BTC is worth vastly more than early on, but that only means those who *bought* early got really rich. Those who mined early got rich only due to spending more time mining...