[2018-01-29] IMF’s Lagarde Says That Bitcoin Mining Consumes Too Much Electricit

[nickbelski]

Bitcoin mining is too energy intensive — that’s the message that International Monetary Fund (IMF) Managing Director Christine Lagarde has for advocates of the flagship cryptocurrency.

Bitcoin Mining Too Energy Intensive: IMF Director Lagarde

Lagarde, who was speaking from Davos at the World Economic Forum, said that Bitcoin mining is an “energy angry” industry, a factor that the IMF finds concerning.

“The Bitcoins mining, which is this accelerated and augmented use of computers to actually determine the value and incentive the functioning of the mechanism, is energy angry,” Lagarde said in Bloomberg TV interview. “And we figure that in 2018 if it continues that system will actually consume as much electricity as Argentina.”

According to Bloomberg, the Bitcoin mining industry’s collective power consumption tripled in 2017, reaching a peak daily usage of 43 GWh in December.



Many analysts and environmentalists have sounded the alarm on the industry’s power usage, and Lagarde said that it has turned in to a “big concern” given that the world is already battle climate change.

“In times of climate change and when we look at how much coal is being used in some Chinese provinces to actually mine Bitcoin it’s a big concern,” she concluded.

However, despite such clarion calls, other analysts have said that the industry’s energy consumption has been overblown. Last week, a Credit Suisse report said that although miners’ electricity usage will increase as long as the practice remains profitable, actual projections are a “far cry from the power and environmental Armageddon that some have feared.”

Source: > https://www.ccn.com/imfs-lagarde-says-bitcoin-mining-consumes-much-electricity/

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[Hell-raiser]

Bitcoin mining is too energy intensive — that’s the message that International Monetary Fund (IMF) Managing Director Christine Lagarde has for advocates of the flagship cryptocurrency.

Bitcoin Mining Too Energy Intensive: IMF Director Lagarde

Lagarde, who was speaking from Davos at the World Economic Forum, said that Bitcoin mining is an “energy angry” industry, a factor that the IMF finds concerning.

“The Bitcoins mining, which is this accelerated and augmented use of computers to actually determine the value and incentive the functioning of the mechanism, is energy angry,” Lagarde said in Bloomberg TV interview. “And we figure that in 2018 if it continues that system will actually consume as much electricity as Argentina.”

According to Bloomberg, the Bitcoin mining industry’s collective power consumption tripled in 2017, reaching a peak daily usage of 43 GWh in December.

Many analysts and environmentalists have sounded the alarm on the industry’s power usage, and Lagarde said that it has turned in to a “big concern” given that the world is already battle climate change.

“In times of climate change and when we look at how much coal is being used in some Chinese provinces to actually mine Bitcoin it’s a big concern,” she concluded.

However, despite such clarion calls, other analysts have said that the industry’s energy consumption has been overblown. Last week, a Credit Suisse report said that although miners’ electricity usage will increase as long as the practice remains profitable, actual projections are a “far cry from the power and environmental Armageddon that some have feared.”

Source: > https://www.ccn.com/imfs-lagarde-says-bitcoin-mining-consumes-much-electricity/

Let's hope Bitcoin will switch to something more energy efficient like POS mining. Myself, I'm not a believer in global warming, at least not via human activity, especially when some scientists even say that we will be facing a new Ice Age soon, but such energy consumption is an absolute waste of resources. The good part is that we seemingly already hit technological limits so it is unlikely that power consumption will be rising so much in the future, though altcoin mining may still contribute to its growth.

[Sir Cross]

Battling climate change is already very alarming and I wish that a new way of mining - one that does not consume that much energy would be discovered really soon. I'm concerned as to how humans have been consuming non-renewable energy at such a fast rate when renewable energy is not yet a thing. This should be given more attention given the effects that this would bring and the possible aftermath if we do not resort to more environment friendly options.

[bbc.reporter]

I reckon the world's governments will start using that argument to kill where bitcoin can be killed. Its mining process. If their campaign against mining captures more support, what other means of securing the blockchain is there? Proof of Stake? That has its own problems, especially in initial distribution. Also, there was the Vericoin incident.

https://www.coindesk.com/bitcoin-protected-vericoin-stolen-mintpal-wallet-breach/

[Carlton Banks]

I'm concerned as to how humans have been consuming non-renewable energy at such a fast rate when renewable energy is not yet a thing.

Bitcoin miners (even in China) are using mostly renewable hydro-electric or geo-thermal energy, because they're the cheapest

[hv_]

Gold / PM mining, fiat money minting and securing uses much more energy and even pollutes / destroys our planet much worse.

[gabbie2010]

The IMF boss is mounting a  smear campaign against bitcoin using electricity consumption as a reference is uncalled-for there have been other alternative to the regular Electricity which is solar energy and bitcoin miners had been utilizing it for their operations, I belief this is another threat and campaign against bitcoin and at the of the day bitcoin will remain unscathed.

[aigeezer]

How would a central banker know the "right" amount of electricity a competitor should use? After a while, you notice the patterns of smear techniques from the central banking advocates. They lost their credibility long ago. People might think I mean 2007 ("too big to fail" and all that), but where I live the locals don't trust the banks because of stories from the Great Depression in the 1930s. Hard-earned lessons from one generation are often forgotten by the next. Stay alert out there. Fiat is gonna blow sooner or later.     

[Carlton Banks]

How would a central banker know the "right" amount of electricity a competitor should use? After a while, you notice the patterns of smear techniques from the central banking advocates. They lost their credibility long ago. People might think I mean 2007 ("too big to fail" and all that), but where I live the locals don't trust the banks because of stories from the Great Depression in the 1930s.

Nice clear reasoning.



Let's leave aside the fact that finding difficult hashes of block headers (i.e. mining) keeps your money safe from rogue miners attempting to re-write the blockchain (i.e. this is what makes Bitcoin uncensorable, so more mining is better, not worse). Let's just park that issue, despite how much more honest and transparent Bitcoin is than central banking fiat as a result.

So, Christine Lagarde doesn't like that Bitcoin costs energy to produce. After all, the IMF and other fiat printing central banks can produce new money supply for a disappearingly small fraction of what that new fiat money is valued at.

But that's essentially the problem underlying the entire world financial system: the privileged ability to create money (and debt) at will has, unsurprisingly, led to a severe lack of discipline amongst those privileged to do so. Anyone familiar with the history of such abuses of monetary levers of power knows how this story ends: badly, and in many flavours of badly. And the current abuses (in fairness, only sanctioned by IMF hubris so they're only indirectly responsible) are probably the greatest ever seen. It's prudent to expect the economic fallout to be on a similar scale.

So no Christine Lagarde, forcing discipline on the monetary supply using a finite and tangible resource is not a problem, it is a virtue. Your practice of approving fiat money printing at essentially zero cost (with correspondingly zero discipline) is a serious threat to the world economy, and the lives of the people who constitute it.

[Hell-raiser]

But that's essentially the problem underlying the entire world financial system: the privileged ability to create money (and debt) at will has, unsurprisingly, led to a severe lack of discipline amongst those privileged to do so. Anyone familiar with the history of such abuses of monetary levers of power knows how this story ends: badly, and in many flavours of badly. And the current abuses (in fairness, only sanctioned by IMF hubris so they're only indirectly responsible) are probably the greatest ever seen. It's prudent to expect the economic fallout to be on a similar scale.

Let me interrupt you here. As kind of first, I'm gonna tell you that I agree that the lack of discipline may lead and in many cases, like in Zimbabwe and Venezuela, actually leads to heavy abuse of the system built on printing money at will. Then the logic of your thought seems to suggest a rather frivolous and reckless thing. It is fixing the deficiency of one system, in this case the system which involves unrestricted money printing, with the strength of another, in this case the system based on monetary supply limited by a finite resource. But you seem not to care that the second system, despite its self-imposed monetary discipline, is a lot worse in and by itself than the first system whenever the latter has proper monetary discipline in place.

Do you understand how erroneous this approach is?

[J. Cooper]

I think I'm just going to quote myself here because I've made the same point too my times now.

Bitcoin's proof of work mining system isn't good for the environment and we know that but it's extremely unfair to use that against bitcoin because there's a lot more electricity pollution on a much larger scale by bigger government backed corporations. So even if bitcoin would become proof of stake it won't cancel out all the environmental problems.

These guys shouldn't be worrying too much about the power consumption of bitcoin. Because as we speak the world is being polluted right left and center but you don't hear a word. Just look up the Canadian tar sands. It's a disgrace.

[pixie85]

They are so stupid. Why doesn't the director say something about the electricity being wasted by appliances on standby? Why doesn't she mention the amount of electricity wasted by bank servers processing transactions? What about the computers run by clerks in every single bank branch? Bitcoin eliminates the need for branches, clerks and their computers. If you have people buying electricity and they want more get more them and profit from it instead of complaining!

[Hell-raiser]

They are so stupid. Why doesn't the director say something about the electricity being wasted by appliances on standby? Why doesn't she mention the amount of electricity wasted by bank servers processing transactions? What about the computers run by clerks in every single bank branch? Bitcoin eliminates the need for branches, clerks and their computers. If you have people buying electricity and they want more get more them and profit from it instead of complaining!

I think she means something else, though it is hard to say since she doesn't say it directly. It seems she talks about the amount of electricity required to process transactions, and, honestly speaking, she has a point. If we removed the speculative part from Bitcoin, Bitcoin transactions would be very expensive in terms of electricity consumed. To put it differently, we could do the same with less, and this is what POS coins do. In this regard Bitcoin is very inefficient.

[Carlton Banks]

Then the logic of your thought seems to suggest a rather frivolous and reckless thing. It is fixing the deficiency of one system, in this case the system which involves unrestricted money printing, with the strength of another, in this case the system based on monetary supply limited by a finite resource. But you seem not to care that the second system, despite its self-imposed monetary discipline, is a lot worse in and by itself than the first system whenever the latter has proper monetary discipline in place.

What is reckless or frivolous about imposing absolute discipline on inflating the money supply?

And I think you've been reading too much central bank friendly sources of information; the means by which the money supply can be expanded are many, and there is rarely any discipline as a consequence.

Bitcoin's proof of work mining system isn't good for the environment and we know that but it's extremely unfair to use that against bitcoin because there's a lot more electricity pollution on a much larger scale by bigger government backed corporations. So even if bitcoin would become proof of stake it won't cancel out all the environmental problems.

These guys shouldn't be worrying too much about the power consumption of bitcoin. Because as we speak the world is being polluted right left and center but you don't hear a word. Just look up the Canadian tar sands. It's a disgrace.

There is a dispute between scientists as to whether increases in CO₂ is the reason for climate change anyway. The climate has changed far more dramatically in the past without 0.01% increases in atmospheric CO₂.

They are so stupid. Why doesn't the director say something about the electricity being wasted by appliances on standby? Why doesn't she mention the amount of electricity wasted by bank servers processing transactions? What about the computers run by clerks in every single bank branch? Bitcoin eliminates the need for branches, clerks and their computers. If you have people buying electricity and they want more get more them and profit from it instead of complaining!

There is a dispute between climate scientists as to whether increases in CO₂ is the reason for climate change anyway. The climate has changed far more dramatically in the past without 0.01% increases in atmospheric CO₂.

I think she means something else, though it is hard to say since she doesn't say it directly. It seems she talks about the amount of electricity required to process transactions, and, honestly speaking, she has a point. If we removed the speculative part from Bitcoin, Bitcoin transactions would be very expensive in terms of electricity consumed. To put it differently, we could do the same with less, and this is what POS coins do. In this regard Bitcoin is very inefficient.

There is a dispute between climate scientists as to whether increases in CO₂ is the reason for climate change anyway. The climate has changed far more dramatically in the past without 0.01% increases in atmospheric CO₂.


"The bigger the lie, the more likely people are to believe it"


Sorry to have to repeat this, but the whole world appears to be a victim of the constant repetition of this unproven CO₂ climate change theory. Scientists are in dispute about the veracity of the claims, but politicians love the idea, because it gives them and their corporate cronies more power over us. The carbon trading scheme being pushed as the solution to this problem puts the big villains of this piece very much in control; big CO₂ producers (i.e. corporate energy giants) can offset their CO₂ production by larger factors than anyone else, meaning they can accumulate the largest number of carbon credits. This gives them the power to set the prices of carbon credits, and therefore the price of the carbon taxes.

It might seem like righteous crusading now, when all you need to do to "be green" is ride a bicycle or buy local seasonal vegetables. But when your already very high tax burden gets increased even closer to 99% (it's typically above 50% now), let's see how you feel about this disputed science then. I'm not convinced, especially when politicians are the only ones that are unanimously in agreement.

[Hell-raiser]

Then the logic of your thought seems to suggest a rather frivolous and reckless thing. It is fixing the deficiency of one system, in this case the system which involves unrestricted money printing, with the strength of another, in this case the system based on monetary supply limited by a finite resource. But you seem not to care that the second system, despite its self-imposed monetary discipline, is a lot worse in and by itself than the first system whenever the latter has proper monetary discipline in place.

What is reckless or frivolous about imposing absolute discipline on inflating the money supply?

And I think you've been reading too much central bank friendly sources of information; the means by which the money supply can be expanded are many, and there is rarely any discipline as a consequence.

Well, in fact there is nothing wrong in that, and personally I'm totally fine with it, with imposing absolute discipline on inflating the money supply. But this is not what I meant. It looked like you suggested substituting one system for another just because the first has this financial discipline built-in while the other hasn't, at the same time completely discarding their other deficiencies and advantages. This is what I call a reckless or irrational thing (if you are not happy with the frivolous part).

[BattleField]

Battling climate change is already very alarming and I wish that a new way of mining - one that does not consume that much energy would be discovered really soon. I'm concerned as to how humans have been consuming non-renewable energy at such a fast rate when renewable energy is not yet a thing. This should be given more attention given the effects that this would bring and the possible aftermath if we do not resort to more environment friendly options.

For the bitcoin to be your own bank, the electricity consumption is worth it. How much power does the world's bank consume every day?  Much more than Bitcoin.

[Carlton Banks]

It looked like you suggested substituting one system for another just because the first has this financial discipline built-in while the other hasn't, at the same time completely discarding their other deficiencies and advantages.

Well, this is what choice looks like.

I choose a system where my money cannot be inflated away, or stolen from me without my consent. If that comes with downsides, then that's a compromise I'm happy with.

[Lancusters]

The world has a surplus of electricity. If mining stop something to do with the surplus? Will stop production? Lol. The purpose of the IMF to destroy economies of poor countries so that they always remain a raw material appendage and a source of cheap labor. The IMF is part piatogo market. Let give advice on the use of Fiat. But I don't know of any state which helped their recommendations.

[Notcalculator]

They're just using more and more argument against bitcoins to keep their monopoly on the financial system. It doesnt matter if bitcoin is power intensive, because the only way they're making a profit is by using cheap renewable energy. This is no environmental concern because once they use more energy than their renewable facilities can generate then they wouldnt profit.

Their next argument regarding the dark side of BTC seems compelling. It is true it has been used to do illegal activities, but the current banking system is no different. Aside from the mentioned irresponsible printing, fraudulent loans and manipulation there is also this case where HSBC has been caught helping drug cartels in mexico. And because they are too big to fail all they got was a slap on the wrist. There was zero accountability. Unlike what happened to the CEO of Mt Gox who was jailed for losing millions.

Link on HSBC
https://www.nytimes.com/2017/12/11/business/dealbook/hsbc-us-charges.html

[pixie85]

They are so stupid. Why doesn't the director say something about the electricity being wasted by appliances on standby? Why doesn't she mention the amount of electricity wasted by bank servers processing transactions? What about the computers run by clerks in every single bank branch? Bitcoin eliminates the need for branches, clerks and their computers. If you have people buying electricity and they want more get more them and profit from it instead of complaining!

There is a dispute between climate scientists as to whether increases in CO₂ is the reason for climate change anyway. The climate has changed far more dramatically in the past without 0.01% increases in atmospheric CO₂.

I wasn't even thinking about CO2 as we have many different sources of power with a lot of it being generated by dams and nuclear plants that don't emit it. What i'm talking about is the fact that we are producing more power than we're using. There's no scare of shortages, especially in countries like Canada that are producing far more than they need. All this power is going to waste  because we don't have plants meant to store it. If it's wasted why not allow miners to use it? Why cry about them taking it if they're buying it on the market and paying for it like everybody else?