Energy consumption will become an issue if bitcoin really breaks through

[amincd]

You're right.  And I haven't checked your figures.  But if you think that 7% is "significant", then we'll just have to agree to disagree.  As pointed out, this is well within the range of energy already used for heat in colder areas.

Heating with electricity is a stupid option in the environmental sense because each Joule of electrically produced heat causes even more primary energy consumption at the power plant because of low efficiency.

But heating with electricity is done right now in many places, because it's more convenient than other methods in some cases. In the scenario where bitcoin becomes the world's main currency, then all of those heaters could be dual-purpose devices that also produce bitcoin.

Also there is a lot of waste energy all over the world that could be used, since bitcoin can be produced any where in the world with electricity, and can be sent a lot more easily than electricity can be transmitted.

Finally, the block subsidy will eventually end, and the block generation reward will become only what block generators get from transaction fees, which could and likely will result in the block reward being a much lower percentage of the total market capitalization of bitcoin than it is now.

[herzmeister]

what about the Absorption Refrigerator someone mentioned? Why are the electric ones mainly used in hotel rooms only so far? Can't be that they're less efficient then.

I'm very tempted by the Proof-of-Stake concept: https://en.bitcoin.it/wiki/Proof_of_Stake

I'm afraid such a currency will soon find itself to be under total control of MtGox and (later) Goldman Sachs.

[brenzi]

I'm very tempted by the Proof-of-Stake concept: https://en.bitcoin.it/wiki/Proof_of_Stake

I'm afraid such a currency will soon find itself to be under total control of MtGox and (later) Goldman Sachs.

You got a good point there. Food for thought, thanks. PPC probably only works if people do not let banks or ewallet providers take care of their coins. But: Isn't this risk comparable to pooled mining in bitcoin? What about a BTC guild 51% attack?

[brenzi]

Ok, inform us please if you'll come
to something practically useful.

Actually, Proof-of-burn could be a way out of bitcoin's waste of real-world resources (https://en.bitcoin.it/wiki/Proof_of_burn)
At first sight, it seems to me that this approach would even be compatible with bitcoin. Maybe even without a hard-fork. However, I'm no expert of bitcoin protocol.

Basically this would replace spending fiat currency on hardware and energy by spending the cryptocurrency itself in such a way that the same randomness of possible reward results.

[brenzi]

what about the Absorption Refrigerator someone mentioned? Why are the electric ones mainly used in hotel rooms only so far? Can't be that they're less efficient then.

Thermodynamics are not my strongest field, but I just did some reading for the fun of it (the german article has more detail: http://de.wikipedia.org/wiki/Absorptionsk%C3%A4ltemaschine)

Probably one should use a lithium bromide / water system which needs >70°C input and produces 5°C output at a COP of 0.7

The 70°C might be just about acceptable for silicon devices. And the 5°C are perfect for air conditioning.

But this doesn't change anything in my criticism of bitcoins PoW concept. I just don't see why such energy consumption should be necessary just to make a currency stable. PPCoin has yet to mature and proof its stability - but it already shows a possible way out.

[wrenchmonkey]

what about the Absorption Refrigerator someone mentioned? Why are the electric ones mainly used in hotel rooms only so far? Can't be that they're less efficient then.

The question is, less efficient than WHAT? Are they less efficient than using electricity to heat the solution to create the heat absorbtion effect? Yes. That, and the fact that they're not as compact as electric units.

If you don't already have a waste heat source, it's not worth the extra space consideration of such a system, even if it's a little more efficient, so nobody uses them.

Now, fast-forward to some distant point in the future. People are burning lots of juice to mine bitcoin. In the winter, this is a great system, because waste heat can be used for everything from heating buildings, to heating water (potable, swimming pools, hot tubs, whatever). In the summer this is a problem. You got countless BTUs of heat that you need to get rid of, as well as a building to cool (including keeping your mining hardware cool). Enter absorption refrigeration. You can now use those BTUs of waste heat to cool your building, or even do industrial refrigeration. Combine a mining farm with a food packaging plant? You were gonna burn that energy to refrigerate the food anyway, right? Why not harness that wasted energy and also mine some money. It's win/win/win. How about combining a mega-mining operation with a mega casino? Can you imagine what amount of electricity is spent on just cooling a casino floor? Let alone cooling 3000-5000 hotel rooms?

There's no reason that "waste heat" has to actually be wasted.

[Flaff]

As if banks don't use electricity.

[halfawake]

Flaff made a point that I think this entire debate was missing.  Yes, mining bitcoins has a price beyond just the cost of the ASICs, in electricity.  But how much energy do all the banks in the states use, not even counting the ones elsewhere in the world?  You could count just the energy the banks use directly, but I think it'd be more fair to count the banks' energy, the energy used by the armored cars transporting money, that used by the Federal Reserve, and so on and so forth.

That's not even getting into the energy used to encrypt credit card transactions online.  Actually, with the speed of computers currently, that's the cheap part of the cost: you just have to pay for an SSL certificate.  The expensive part is making sure websites comply with PCI Compliance and so on.  That may be derailing the conversation somewhat but it's to make a point: there's a real opportunity cost in accepting credit cards. 

Granted, if you're selling things online and not accepting credit cards, for most markets you're pretty much shooting yourself in the foot.  But the bitcoin protocal handles all that security so that if all the world used bitcoin instead of credit cards, e-commerce websites wouldn't have to worry about these things.  In other words: how much energy does PayPal use?  Even if credit card transactions are being done and not PayPal transactions, they are often still using PayPal as a credit card processor.

So the question to me isn't, does the bitcoin network use energy?  But rather, does the bitcoin network use more energy than the traditional financial network?  And, would it use more if it scaled up to the volume of, say, Visa and became a replacement for Visa in many cases.

[brenzi]

Flaff made a point that I think this entire debate was missing.  Yes, mining bitcoins has a price beyond just the cost of the ASICs, in electricity.  But how much energy do all the banks in the states use, not even counting the ones elsewhere in the world?  You could count just the energy the banks use directly, but I think it'd be more fair to count the banks' energy, the energy used by the armored cars transporting money, that used by the Federal Reserve, and so on and so forth.

I tried to estimate this in this previous post. You are right that one should compare it to today's banking usage. But keep in mind that banking is not just about issuing and transferring money. There are services included that bitcoin doesn't supply and never will (funds/asset management, customer services, loans....)

In other words: how much energy does PayPal use?  Even if credit card transactions are being done and not PayPal transactions, they are often still using PayPal as a credit card processor.

So the question to me isn't, does the bitcoin network use energy?  But rather, does the bitcoin network use more energy than the traditional financial network?  And, would it use more if it scaled up to the volume of, say, Visa and became a replacement for Visa in many cases.

I would be very interested in the figures, but they might be hard to get. But please read my linked post. If you can show me with quotes to reliable sources that the ratio of (paypal transaction volume)/(paypal plus credit cards energy use) is better than in the case of bitcoin, I'll be more than glad to change my opinion. I came to the conclusion that bitcoin's ratio is worse by orders of magnitude.

[hashman]

This means that the bitcoin network by itself would raise global electricity consumption by up to 7%

Energy consumption *could* become an issue? 
Energy consumption is a huge issue.  Some key facts which prove humans are extremely stupid:


1) More than half of all hydrocarbon energy of our spaceship earth already was burned off with no attempt at use or capture ("natural gas flaring").

2) Continued pouring of energy as visible light away from Earth at night for no fucking reason at all (see pictures of the Earth from space).

3) Horrendous inefficient use of energy for transport, including millions of folks bringing 2 tons of steel huge distances every day with them.

4) So-called "defense" or "military" using energy just to destroy other energy, in efforts to demonstrate how psychotic they are so other folks will be afraid of them. 


Yes, piss-poor use of energy resources is a *huge* problem on spaceship earth right now.  No, proof of work networks don't add meaningfully to the total.  But yes, it is something we should think about, so my apologies for getting upset.  It happens whenever the topic comes up.   
     

[Spendulus]

but if you look at it from the perspective that energy costs can also drive people to move toward their own energy generation (Solar, Wind, Tidal, etc), in order to be competitive in that market, the total energy consumption isn't as relavent as the source of that energy being consumed.

If you think of the trilions of gigawatts of energy that are wasted by not harnessing the Sun's power... There's not a big issue with consuming a lot of energy.

In the far future you might even be right. There are clever people around that think energy will be 100% renewable and almost for free in the future. But I think we should consider the status quo and not rely on utopia when judging weaknesses of today's bitcoin technology. Bitcoin value might rise a lot faster than renewable energy will progress.

In the case of Photovoltaics one should bear in mind that today PV cells are produced in china using non-renewable energy. So their embodied energy is not renewable at all.

As long as renewable energy is more expensive than fossil and nuclear energy, I consider excessive energy use as being bad because real costs are externalized.

....just because something is produced using another type of energy makes it not 'clean energy' is disingenuous at best. In order for that statement to be true, it would require that every cell produced consumes more 'dirty' energy in the the production process than it will produce in its working lifetime, which, if that were the case, solar energy would already make ZERO economic sense. People would never be able to come out ahead, as the solar installation would cost more in energy costs alone to produce, than would ever be recovered...

Haven't you just disproved your own argument?

But in so doing you asserted based on the absolutes..."every cell produced"..."zero economic sense"...

and economics of A vs B is never based on absolutes.  We see solar cells used for ranch gate openers - GOOD.  For city stop signs and other markers where there'd be a high cost to run the power wires - GOOD.  For a city stop sign right next to a power line - STUPID.

This isn't terribly complicated unless you preface the argument with a moral premise such as SOLAR = GOOD, then proceed in a twisted and warped fashion to ignore actual numbers because you've predefined GOOD.

In fact, you've argued against the other poster who simply stated that externalized costs (and pollution) have to be entered into the equation.  Sorry, you can't do that.

[halfawake]

I tried to estimate this in this previous post. You are right that one should compare it to today's banking usage. But keep in mind that banking is not just about issuing and transferring money. There are services included that bitcoin doesn't supply and never will (funds/asset management, customer services, loans....)
...


I would be very interested in the figures, but they might be hard to get. But please read my linked post. If you can show me with quotes to reliable sources that the ratio of (paypal transaction volume)/(paypal plus credit cards energy use) is better than in the case of bitcoin, I'll be more than glad to change my opinion. I came to the conclusion that bitcoin's ratio is worse by orders of magnitude.

I would happily give you the figures if I could, but you have a valid point that they're hard to get.  I don't work for paypal / ebay and even if I did I probably wouldn't have access to that kind of information.  I'm not arguing the original point, bitcoin IS an energy hog, that's probably its biggest weakness.  Just trying to make a comparison and unfortunately it's not a very good comparison because I simply don't have the data to compare it to.

I'm also not really sure I buy your point about bitcoin being unable to supply all the services you listed.  Can it supply customer services?  Probably not very well.  But funds / asset management, and loans?  I don't see why not.  I don't think bitcoin is mature enough to do it yet, but that doesn't mean that it's impossible.  The hardest part would be loans and that may very well have to be pegged to some fiat currency to be possible, so I could be wrong about it being possible.  Easy?  No, it'd be quite tricky to do based on the very nature of bitcoin.  But probably not impossible.

[Etlase2]

I'm also not really sure I buy your point about bitcoin being unable to supply all the services you listed.  Can it supply customer services?  Probably not very well.  But funds / asset management, and loans?  I don't see why not.  I don't think bitcoin is mature enough to do it yet, but that doesn't mean that it's impossible.  The hardest part would be loans and that may very well have to be pegged to some fiat currency to be possible, so I could be wrong about it being possible.  Easy?  No, it'd be quite tricky to do based on the very nature of bitcoin.  But probably not impossible.

He is saying that bitcoin does not replace those services. e.g. they will still use the energy that they do now, even if they are operating with bitcoin. So it is not fair to use the lights that a bank uses to operate as part of the energy cost of fiat because it is related to the energy cost of money in general.

[halfawake]

I'm also not really sure I buy your point about bitcoin being unable to supply all the services you listed.  Can it supply customer services?  Probably not very well.  But funds / asset management, and loans?  I don't see why not.  I don't think bitcoin is mature enough to do it yet, but that doesn't mean that it's impossible.  The hardest part would be loans and that may very well have to be pegged to some fiat currency to be possible, so I could be wrong about it being possible.  Easy?  No, it'd be quite tricky to do based on the very nature of bitcoin.  But probably not impossible.

He is saying that bitcoin does not replace those services. e.g. they will still use the energy that they do now, even if they are operating with bitcoin. So it is not fair to use the lights that a bank uses to operate as part of the energy cost of fiat because it is related to the energy cost of money in general.

Ah, I get it, that makes more sense now.  I meant more the parts of the currency costs that wouldn't be necessary with bitcoin such as the armored cars full of trucks, all the security needed to secure credit cards, etc, but I admit that I didn't make that clear with my original post.  Technically, security (ie not losing your bitcoins) is still an issue in the bitcoin world, it's just shifted from the responsibility of the banks / companies / credit card processors to the individuals who own the bitcoins themselves.

[Impaler]

Seriously people, any comparison to the energy consumption of the current financial infrastructure would conclude that BTC is HUGELY WASTEFUL, because BTC is performing so few transactions.  Just look here at the cost per transaction, the miners are getting paid on the order of 8 dollars per transaction and even before the bubble it was more then a dollar, that makes BTC easily the most costly system ever devised.  Now a lot of that cost now is just pure profit for miners but competition dictates that it will eventually become energy expenditure.

http://blockchain.info/charts/cost-per-transaction

[Lethn]

Synechococcus bacteria, solves the problem of too much carbon dioxide in the atmosphere, we found the answer to this problem years ago.

You're welcome

http://microbewiki.kenyon.edu/index.php/Synechococcus_elongatus

   Synechococcus elongatus uses carbon dioxide (CO2) as its carbon source through the Calvin cycle. During photosynthesis, Synechococcus elongatus uses water (H2O) for the electron donor, which produces oxygen (O2) as the by-product. Carbon dioxide is then converted to glucose through the Calvin cycle and is used for biosynthesis or other energetic needs.

[brenzi]

Synechococcus bacteria, solves the problem of too much carbon dioxide in the atmosphere, we found the answer to this problem years ago.

Even if that would be true and these bacteria would solve our CO2 problem without causing even worse side effects (hear my doubt?), there would still be the other side of energy supply: limited resources.

[Lethn]

Synechococcus bacteria, solves the problem of too much carbon dioxide in the atmosphere, we found the answer to this problem years ago.

Even if that would be true and these bacteria would solve our CO2 problem without causing even worse side effects (hear my doubt?), there would still be the other side of energy supply: limited resources.

True, it may well be that this kind of bacteria is a key component in terraforming though which I find pretty interesting

[Spendulus]

Synechococcus bacteria, solves the problem of too much carbon dioxide in the atmosphere, we found the answer to this problem years ago.

Even if that would be true and these bacteria would solve our CO2 problem without causing even worse side effects (hear my doubt?), there would still be the other side of energy supply: limited resources.

gotta start building a dyson sphere or two 

I looked at those a while back and determined that the physics was flawed, stress strain and tidal forces would never allow such a thing to exist.  It's a real shame because the Matrioska brains could provide us with lots  of free beer.

[Spendulus]

There is no CO2 problem.
Global Warming craze is a scam.

Humans can tolerate up to 4% of CO2 in the air.
A lot of CO2 will be good for plants.
More plants == more food for humans.
more humans == more slaves for us.
Et cetera ...

Hmm....maybe not 4%, that'd be 40,000 ppm, and we are currently < 400 ppm.  Seems like 7000 ppm is the max IIRC.  So but yeah, your point is that weed would grow better with the higher CO2...

OOPS, never mind.  I see you were referring to food.