Energy consumption will become an issue if bitcoin really breaks through

[brenzi]

You also need to substract the amount of energy, fuel and other ressources that are used for our current currncy system,

OK, let's try to estimate this: I'll take switzerland as an example, just because I know where to get the figures. As you sure know, in switzerland the financial sector is a big part of economy and switzerland is highly developed in global comparison. So it's not really representative. But lets try anyway:

The Credit and Insurance Sector uses 4.4PJ of a total of 211PJ Electricity.
(http://www.bfe.admin.ch/php/modules/publikationen/stream.php?extlang=de&name=de_828732397.pdf)

As bitcoin does not replace insurances and only a part of financial services, I'd arbitrarily reduce the 4.4PJ to 1PJ that is used for things that bitcoin could replace (I'm sure its a lot lower than that). This would be < 0.47% of switzerlands electricity use.

So if the benefit of bitcoin has to compete with classical banking in terms of energy use, 0.470% of todays global electricity use is the figure.

Somebody fancy researching the numbers for global banking?

[benjamindees]

You can't just go by the electricity directly used by the financial system.  First of all, you have to include other forms of energy than just electricity.  But, more importantly, you have to include all of the energy used by all of the subsidiary industries and by those who work in the financial system.

The financial industry is a huge portion of the economies of developed countries.  It's over 8% of US GDP.  You can't compare the electricity used by Bitcoin to that.

[brenzi]

I'm open to your suggestions. But please be more specific.

It's really hard to estimate and I know I'm on thin ice here, but if I read other people on this forum just wildly guessing what fits their beliefs (or what they've read from other people doing exactly that) I want to counter with at least trying to get the right order of magnitude in a more scientific way.

You can't just go by the electricity directly used by the financial system.  First of all, you have to include other forms of energy than just electricity.  

Other forms of energy: These account mostly for heating of buildings and transport (for the switzerland case this is 1 PJ for Oil and 1.7PJ for Gas, the others don't matter. Same source as above). Now think about where the employees go that are no longer needed by banks because of bitcoin (those are not so many because new fields of banking might arise thanks to bitcoin). Those employees will work in some other office that need to be heated as well.

But, more importantly, you have to include all of the energy used by all of the subsidiary industries and by those who work in the financial system.

Are you sure they will disappear because of bitcoin breaking through? Which ones exactly?

I could think of telecommunication industries, but bitcoin needs the internet and will cause a lot of traffic in my scenario.

The financial industry is a huge portion of the economies of developed countries.  It's over 8% of US GDP.  You can't compare the electricity used by Bitcoin to that.

Why? GDP is a bad measure for what we are looking for. We should compare apples to apples. And please quote your sources.

[odolvlobo]

My prediction is that if Bitcoin gains real global acceptance, Iceland will become the bitcoin mining capital of the world. It has an enormous supply of low-cost renewable energy.

[Etlase2]

I would like to point out that my proposal for a stable value currency (Decrits - see sig) solves this problem by separating the security of the network from currency creation. Detailed more in the thread, part of my goals was to eliminate the "hardware tax" where people are forced to ever upgrade hardware used only for mining -- aka a complete waste of resources in the grand scheme of things. The quick and dirty idea for why getting rid of the hardware tax is a necessary idea for a free and stable currency: https://bitcointalk.org/index.php?topic=178140.msg1891309#msg1891309

[benjamindees]

Okay, first of all, I'm going to voice a general objection to your using Switzerland as an example of anything.  Switzerland is completely irrelevant to the resources consumed by the global financial system.  Most are consumed by the United States military, which you haven't even begun to account for.  Who do you think, ultimately, balances all the ledgers of the global financial system in the same way that the Bitcoin network does?  I'll give you a hint, it's the world's biggest collections agency.

So, this argument strikes me as an example of Europeans holding themselves up as models of efficient economy, while actually being completely dependent upon Federal Reserve money printing that supports the largest military on the planet by an order of magnitude, and which has, additionally, directly bailed out Europe twice in the last century.  So, with that out of the way,

You can't just go by the electricity directly used by the financial system.  First of all, you have to include other forms of energy than just electricity.  

Other forms of energy: These account mostly for heating of buildings and transport (for the switzerland case this is 1 PJ for Oil and 1.7PJ for Gas, the others don't matter. Same source as above). Now think about where the employees go that are no longer needed by banks because of bitcoin (those are not so many because new fields of banking might arise thanks to bitcoin). Those employees will work in some other office that need to be heated as well.

Why?  Why can't they go home instead?  This is like my arguing that Bitcoin mining doesn't waste energy because "what would the Bitcoin miners be doing otherwise?"  Same argument.

new fields of banking might arise thanks to bitcoin

But they won't last long unless they are either productive or supported by central bank money printing.  That's the difference that you fail to recognize.  Ultimately, if Bitcoin wastes energy, it will be because people voluntarily choose to waste energy, because it is their economic preference to do so.  Because of this distinction, the energy wasted will always be less than the energy wasted via force and fraud under the current global regime, which, believe me, is substantial and of which you have only scratched the surface.  You haven't even begun to address the mechanics of energy production, and the fact that the reason most of it is centralized and wasteful is directly attributable to the centralized financial system.  What percentage of energy produced do you think is wasted in production, more or less than 7%?

But, more importantly, you have to include all of the energy used by all of the subsidiary industries and by those who work in the financial system.

Are you sure they will disappear because of bitcoin breaking through? Which ones exactly?

Which people?  The ones who do nothing but leech off of others and subsist on money-printing.

The financial industry is a huge portion of the economies of developed countries.  It's over 8% of US GDP.  You can't compare the electricity used by Bitcoin to that.

Why? GDP is a bad measure for what we are looking for. We should compare apples to apples. And please quote your sources.

Source.

You know, I almost hesitated to use GDP, because it is generally a terrible metric.  But it happens to be a great measure for what we're looking for because, despite its name, GDP measures consumption and not "production".

[Etlase2]

So the gist is:

1) People in the financial industry should never work again
2) People voluntarily choosing to waste energy is more efficient than not voluntarily wasting energy
3) Energy is centralized because of the financial system (I've always wanted 3 separate power lines from 3 companies running to my house...)
4) % of GDP = % of energy used

you forgot

5) The financial system also is the cause of cancer and many other incurable diseases

[herzmeister]

I've been thinking for a while maybe it's possible to build fridges and air conditioners in a way that they need generated heat (for the compressors, or maybe some other idea) that could come from electricity spent for mining.

[herzmeister]

Other than that, if OP doesn't know yet, there's also the "proof of stack" approach that doesn't require this kind of processing (but may have other problems). Or the "centrally issued and web of trust for consensus and less privacy" model that ripple.com uses for their XRPs.

[benjamindees]

3) Energy is centralized because of the financial system (I've always wanted 3 separate power lines from 3 companies running to my house...)

You know, actually that just makes me want to underline this particular reason this argument is dumb.  Energy is not the same thing as electricity.  The electricity that is used in houses is almost completely irrelevant to the energy consumed by society.  It's something like 15%.  Yet, thanks to financialization and centralized money printing forced at the barrel of a gun, it's sold to you at 4 times the production cost.  That's the mark-up, for a technology that hasn't changed in a hundred years.

So, when you say "7% of electricity" as though that's supposed to be a big number, who cares?  It isn't.  The worst case is that it's slightly less efficient than the current economic system without, you know, subsidizing murderous psychopaths.  The best case is that it ushers in a new golden age of renewable energy and slightly subsidizes those living in colder areas.

[Etlase2]

The best case is that it ushers in a new golden age of renewable energy

Would this not be the best case under any scenario where crony capitalism or whatever term you want to give to the us government+MIC+financial sector loses a lot of its power? Electricity is only one part of bitcoin mining. Energy use encompasses every stage. Bitcoin is not more efficient with renewable energy if billions of tons of earth are being dug up to find silicon for circuit boards to produce devices designed to mine bitcoin in a more electrically efficient manner in an ongoing effort to compete for more of a fixed piece of pie.

[brenzi]

So, when you say "7% of electricity" as though that's supposed to be a big number, who cares?  It isn't.  The worst case is that it's slightly less efficient than the current economic system without, you know, subsidizing murderous psychopaths.  The best case is that it ushers in a new golden age of renewable energy and slightly subsidizes those living in colder areas.

You seem to assume that thanks to almighty bitcoin the world will be a better one and that there will be less wars. I do not share your belief.

Bitcoin has a serious design flaw being its potentially enormous energy consumption.I think bitcoin is an absolutely brilliant idea whose time has come. But I sure hope it will not be bitcoin that breaks through but a more energy-efficient successor.

Disclaimer: I hold Bitcoins. (But probably not for much longer).

[benjamindees]

if billions of tons of earth are being dug up to find silicon for circuit boards to produce devices designed to mine bitcoin

 

I don't think there's an eye-rolling icon big enough to convey my thoughts on this.  Silicon is extremely common.  The largest cost of production is energy.  I can setup some renewable energy source almost anywhere, sell when it's profitable, and use the excess energy to refine silicon.  But I won't even need to do that, because the amount of silicon used by Bitcoin mining doesn't even grow that quickly thanks to reductions in die size.

Listen, in 20 years, by the time Bitcoin energy usage matters at all, our problem will be that we have too much renewable energy at certain times and in certain places.  Bitcoin mining can make use of that energy.  Our other problem will be that we won't have enough energy at certain times, in certain (cold) places.  And Bitcoin can help to even that out, as well.

7% of electricity seems like a shocking figure.  But, really, it isn't.  It will be easily absorbed into the future structure of otherwise wasted energy when the time comes.

You seem to assume that thanks to almighty bitcoin the world will be a better one and that there will be less wars. I do not share your belief.

It's kind of hard to prosecute wars when they can't be financed.  "It is no coincidence that the century of total war coincided with the century of central banking."

Bitcoin has a serious design flaw being its potentially enormous energy consumption.

It's not a design flaw.  It's an intentional feature.  And it can be changed if absolutely necessary.  But it likely won't be.

Disclaimer: I hold Bitcoins. (But probably not for much longer).

That's unfortunate, since the value of Bitcoin is in decentralization, not "efficiency".

[Etlase2]

The largest cost of production is energy.

That is quite debatable. In fact, to think so is incredibly short-sighted with ASICs right around the corner. Maybe it's the largest cost *right now*, but are you familiar at all with the term amortization?

I mean we can use costs in $ as an indication of how many resources are being dedicated to bitcoin, can we not? You did the same by equating financial GDP with consumption.

I'm just going to make up some numbers here for second that I know are not real-world, but I that doesn't matter--as has already been explained and I will explain again in a second.

Let's say an ASIC and a GPU are both 100% guaranteed to mine bitcoin for 5 years straight and then fail. Let's say the ASIC costs $1000 and uses $1000 in electricity in that time. Total 5 year investment: $2000. Let's say a GPU costs $200 but uses $1800 in electricity. Total 5 year investment: $2000.

Your only counter-argument to this is "well the ASIC is 100x faster, it is therefore more efficient". Sure, in terms of mhash/joule, it is. In terms of resources consumed, there is no difference. All a 100x faster machine is going to do is drive up the difficulty and weed out GPUs. Now if the world were a static place, ASIC guy would win all the monies. Unfortunately for him, anyone with a computer has a built-in calculating machine that can figure out that there is a profit margin to be had by purchasing an ASIC.

Replace ASIC with "solar panel array" or whatever consumption activity that you prefer to make it sound better and you have the same thing. Resources must be consumed until there is only a small profit margin remaining from the mining system.

Your counter-argument to that is that this consumption will drive innovation (lol where's ur deflation economy now), but the innovation only drives to further consumption--expending the maximum amount of resources possible in the name of profit. Instead of acknowledging the fact that hey, maybe this is batshit, you must rationalize this epic fail in the most extreme of ways, namely hinging on the hope that oil will no longer be our dominant energy source in the near future. Pathetic.

It's not a design flaw.  It's an intentional feature.  And it can be changed if absolutely necessary.  But it likely won't be.

Wishy washy, flippy floppy, bitcoin good bcuz i say so and if not good we change.

[benjamindees]

That sure is a whole lot of words you put in my mouth.

[inge]

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

…a very good reason to use sustainable forms of energy, not just for Bitcoins…

[brenzi]

>>>energy-efficient successor.
2brenzi
And what do you propose ?
PoW - is evil ?! Fine...
What will be your proof-type of choice ?

I don't know.
I'm still updating on alternate concepts, haven't crossed and understood a better solution yet

[brenzi]

It's kind of hard to prosecute wars when they can't be financed.  "It is no coincidence that the century of total war coincided with the century of central banking."

Good point. We might have to change the thread for this discussion. Still:

Why do you think bitcoin can change this? The US still dictates in what currency US citizens have to pay their taxes.
And even more: The USA are very good at evilizing what "they" don't like. Expect Bitcoiners to be treated like enemies of the state once Bitcoin really starts to weaken the States

[wrenchmonkey]

  I gotta say, I think that this would do nothing but increase the efficiency of electricity generation. If it becomes more profitable to generate electricity for your mining purposes by installing your own solar array, or your own hydroelectric, wind, or tidal generating system, then that's what people will do, and in the Bitcoin 'arms race', that would almost guarantee that in order to remain profitable, EVERYBODY mining bitcoin would be required to convert to renewable energy, in order to remain competitive. And it's really not hard to scale up an installation economically. So if you have to put in a (arbitrarily picking a number here) $50,000 installation to run your farm, and it takes another $$3000-$5000 to go ahead and scale up enough to run the rest of your home, then it's safe to assume that most folks running a home-based operation large enough to justify continuing to mine (meaning they economically have no choice but to switch to renewable energy) would go ahead and do it up for their homes as well. Less residential consumption (although probably an insignificant impact, some is better than none, right? It's a start).

7% of the world's energy generation being shifted to renewable energy, essentially 'overnight' would have significant impact in areas that would 'trickle down'. Economies of scale in alternative energy production equipment would make it affordable for the average joe to now also invest in cheaper renewable energy (like solar or wind), for his home/business which would have a domino effect on the current constraints limiting people from switching (cost). People aren't burning oil and coal because they hate the environment, they're doing it because it's too expensive to shift. Implementation is currently so low that there's no economy of scale that allows producers to make energy production equipment cheap enough for the average consumer. Most people can't justify the upfront costs of spending $10,000-$20,000 for a solar system that is going to take 20 years to pay for itself (assuming no maintenance costs), and last for 30, just to save $75-$100/month on their electricity bill.

The bitcoin mining 'climate control' systems are also interesting to me.

As to the question regarding how heat from a mining farm could be converted to COOL a building, you might want to read up on "Absorbtion cooling" It's one of the most efficient methods for cooling, and the original way that refrigerators worked (propane or natural gas). Not a new concept, zero moving parts, so maintenance costs would be essentially ZERO. Not to mention, you could ALSO use the heat to heat water. Be that residential water, a pool, hot tub, what have you...

Sounds to me like if your theory is correct, we could potentially move a very large portion of our current energy consumption to renewable energy, move heating and cooling to a nearly 100% efficiency scale (turning "waste" heat into building heating/cooling), all while kicking the banksters and oligarchs to the curb.

Empty the banking buildings, move in huge mining farms, harvest the heat waste for climate control, and move in legitimate jobs in their place. Win/Win/Win. 

[wrenchmonkey]

~wrenchmonkey I think you are wrong on the whole line.

A miner doesn't want nor need renewable electricity. All he wants is cheap electricity.

If renewable is cheap, then it's ok he will buy it. Unfortunately it is not. Cheap electricity comes from nuclear power plants. Especially cheap electricity is delivered to clients that consume it 24/7. Witch are the perfect clients for nuclear power plants. Witch is the perfect configuration for miners.

I do not want more nuclear power plants. I live in France, where we have 58 nuclear reactors, producing something like 18% of the world's nuclear electricity.

Statistically France will be the place where the next major nuclear accident will happen (after the USA, the USSR and Japan).

I am not pleased with that. I really really love the concept of bitcoin, but that concept of burning electricity to secure the network bothers me a lot.

Renewable energy IS CHEAP, it just takes a long time to recover the costs, unless you're a high volume consumer. I personally don't have a problem with clean energy like Nuclear either, but I seriously doubt that bitcoin mining is going to drive the creation of even a single new nuclear power plant. Certainly not here in the U.S., where it's practically illegal (and effectively impossible) to build a new nuclear power plant, and has been for as long as many of us have been alive. Not a single nuclear power plant has been built in the U.S. since 1974...

So for your part of the world, it might be a different story. From where I am, if 7% of our energy consumption were cryptocoin mining, it would absolutely drive a move to renewable energy more than any socialist government programs ever could.