Environmental Standards and Impact of Mining for a Virtual Currency

[robotarmy]

Have any of the implementers considered ethical strategies around building a virtual currency that requires the use of power?

While we move to take power out of the hands of banks are we designing in fair share? ways to prevent greed and the perversion of our human dignity from deconstructing the earth, are we thinking about ways to support and create a nurturing environment for our fellow man - or are we simply re-creating the centralized capital oriented systems in our own preferred form?


Who is thinking about fair share, people care and earth care in this design - because if we are not thinking about this - then we are not actually building a better digital world - for this digital world we are building is grounded in the real and the physical - and exactly what we do in that physical world will be for us in the digital world - and exactly how we construct this digital world will be in our physical world?

So how are we including people care, fair share and earth care in our technical design??

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[robotarmy]

Is Bitcoin designed to take into consideration problems around distribution of wealth?

Will this currency be equally accessible for people in Nairobi, or Chad or New Zea land or India or Nepal or is this kind of computational currency going to create a digital divide that is even more significant than what we are currently faced with?

[FatherMcGruder]

Well, anyone with a computer and internet access can participate. As far as the environment is concerned, I'm not sure how any currency could intrinsically affect it. I guess paper money requires trees...

[ffe]

Also, eventually, anyone with a phone can participate (smartphone). A large fraction of the world's people own phones already.

[Teslah]

As it becomes less profitable to mine, I think the lack of miners will mitigate environmental hazards. It would only be a real problem if everyone was mining.

I can't see it being any worse than the lumber, printing, and manufacturing required for paper cash.

[kiba]

This problem, one of access to markets, is not something that Bitcoin can solve in and of itself. However, Bitcoin is a tool that can be used to overcome the artificial barriers enforced by modern economic systems. It does this by allowing the transfer of value between individuals, without the kind of restrictions imposed by established banking and trading systems. There are yet many barriers that Bitcoin can not surmount, for instance, the transportation of physical goods. So, the greatest economic benefit of Bitcoin will likely come from the trade of less tangible items. Right now it seems the Bitcoin economy is driven by the ability to convert it into different currencies... The intangible item really being traded in this case is simply that of mutual trust; trust between individual traders, and trust in the capability of those very exchange systems. This is something that people in Nairobi, Chad, New Zealand, India, and Nepal would have to earn just as anyone else in the world.

I think of the bitcoin economy as first and foremost a global information economy.

[bitcoinBull]

One thing at a time.

What chodpapa said, bitcoin in and of itself, does not address all the world's ills.

I'm not sure what you mean by ethical issues involved in the use of "power".  Everything people do involves the use of power, even though they may be Calories instead of watts.

As for "earth care", bitcoin does not and cannot track environmental externalities.  That belongs to the physical realm of the users, who decide if their computers will be powered by solar, by coal, or by nuclear.  And who decide if they will use bitcoin to pay for urban gardens or for environmental destruction. 

As for "fair share", bitcoin does not solve inequality, but it can help.  One source of inequality in the world is the unfair balance of power in the fiat monetary system, where banks get bailed out but people don't.  Bitcoin solves that.

As for "people care", the best way bitcoin helps with this is by providing security through anonymity to its users.  Consider the value of social networking (twitter and facebook) to organizers trying to overthrow brutal repressive regimes.  Anonymity is essential for such organizers.  Bitcoin gives them a currency, so they can accept donations and people can give them.

More broadly, bitcoin provides pseudo or absolute anonymity for any type of monetary transaction.  This helps "people care" when the law is unjust.  Trying to sell "patented" medicines to cover your costs but without the huge profit margins of evil pharma?  Bitcoin lets you do that.  Want to leak your company's intellectual property for the benefit of humanity, or whistleblow for the benefit of humanity, but worried they will nail you you'll be left on the streets even if you stay out of jail?  With bitcoin you can accept donations for leaks.

Of course, real, violent criminals can also use bitcoin for their benefit.  Assassination markets, weapons dealing... These problems already existed, but they may change form.  We should protect ourselves from them using the same tool (anonymity).


Bitcoin is a neutral means, to many possible ends.

[bitcool]

I'm not sure what you mean by ethical issues involved in the use of "power".  Everything people do involves the use of power, even though they may be Calories instead of watts.

Sometime I have this sneaky suspicion that the fundamental reason human race came to existence was to facilitate the universe creating entropy.  Those thoughts usually come to my mind after a few glasses of wine though so don't accuse me of insanity.

There are clever ways and stupid ways of using energy, but guilt is never a factor to me.

[FatherMcGruder]

Sometime I have this sneaky suspicion that the fundamental reason human race came to existence was to facilitate the universe creating entropy.  Those thoughts usually come to my mind after a few glasses of wine though so don't accuse me of insanity.

There are clear ways and stupid ways of using energy, but guilt is never a factor to me.

Sometimes I think that we exist for the purpose of observing the universe. Why exist if nothing else exists to care? Although, that's a very human thing to think.

[Stephen Gornick]

Have any of the implementers considered ethical strategies around building a virtual currency that requires the use of power?

Point me to another decentralized, pseudonymous digital currency and I'll consider it.

[robotarmy]

One thing at a time.
...

Bitcoin is a neutral means, to many possible ends.

Thank you for your excellent, considerate and thorough post - I appreciate your input.
 

[robotarmy]

..
There is a single, fundamental factor that results in economic disparity. This is the result of one group of people that have access to only a few markets, while another group has access to many markets. In order for people in Nairobi, Chad, New Zealand, India, and Nepal to have access to the kind of capital that is available to the rest of the world, their economies have to be integrated with the same banking systems that the rest of the world has access to. Unfortunately, those same banking systems are structured so as to exclude the poor from markets, while the wealthy have access to more markets, or all markets. So, the current situation is something of a double-bind. Nations choosing less participation in global banking systems, and the strings that come attached to that, disparity appears across geographic boundaries; but the choice to become more integrated causes disparity across economic boundaries, even within the same geopolitical boarders.

..

Thank you again for your attention and consideration Chodpaba. I appreciate the care in your response.

[Gavin Andresen]

If more bitcoin adoption means bitcoin mining replaces actual, physical gold and silver mining then that should be a net positive for the environment.  Gold mining is dirty, dangerous, and destructive; if bitcoins eventually become "a better gold", then there will be less pressure to dig up virgin wilderness.

Right now, bitcoin mining is inefficient, but natural economic forces will make it become increasingly efficient.  We've already seen that, with more efficient GPU mining replacing CPU mining because you get more hashing for less electricity.

Eventually, I'm confident you'll see big commercial-scale bitcoin mining operations in places where either electricity is clean and cheap to produce, or where the waste heat from bitcoin production is put to productive use (maybe we'll all have network-connected bitcoin-mining space heaters to warm our offices in 10 years).

Before then, we probably will see bitcoin production using cheap, dirty electricity in poorer countries.  If history is any guide, as that helps to make those countries richer their citizens will demand better environmental standards.  Even if we all decided that is unacceptable, I don't see any way to prevent it-- there's no way to tell if a bitcoin was generated using solar panels in the Sahara or dirty coal in Pennsylvania.

[Jered Kenna (TradeHill)]

Personally I see the cost being worth it. It's a good cause, the amount of energy is insignificant to what it could accomplish. It's also more efficient than shipping currency. Especially if you figure over distance and in quantity.

[Anonymous]

The government will want bitcoin to pay carbon taxes....

How much carbon does the military emit ?

[eMansipater]

I definitely took this into consideration when deciding to begin mining, and participating in the bitcoin economy in general.  For me, my electricity comes from a hydroelectric source and my mining rig is used as a space heater, reducing the amount of energy required to heat my house.  This results in a reduced (but not zero) environmental footprint for all my digital activities, and mining in particular.  When summer comes I will likely reduce or eliminate mining activity, depending on the demand for it from the network.

In the long-range perspective electricity is a very environmentally-friendly type of energy to be reliant on.  As soon as direct solar power generation gets a little more efficient (which physics leads us to believe is a likely outcome) we will have more than we need for the foreseeable future of computing, especially since computing is continually progressing with regards to electrical efficiency (and physics also leads us to believe there is plenty of room for growth here).  In the long range it is also reasonable to suppose that we may harvest solar energy directly from space, with no significant environmental impact of any kind providing we either perform the computing there directly, or are able to effectively dump the heat back to space.  There is also the potential for performing fission and/or fusion in regions of space where no biological organisms live--the physical density of the universe makes this latter approach arbitrarily extensible, and again physics in general leads us to believe that these technologies are all attainable provided we can live long enough to see them .

My conclusion is that the most effective way to be environmentally responsible with any digital activity is to:

• Be careful where you source your electricity, and take action to encourage the development of more environmentally-friendly electrical generation.
• Be aware of the chemical content of your digital devices, and recycle them on disposal whether or not this recycling is immediately profitable for you or the recycler.  Re-use is of course the best type of recycling.
• And, of course, be aware of the entire use lifecycle when you purchase digital devices.  Devices which will retain some use over a long period of time tend to displace wasteful production of similar products while expanding the availability of technology for people with lower incomes.  For example, we are at the point now where any cutting edge computer will be usable for document editting and at least basic web browsing until it dies.  So choose quality devices that aren't designed to break within 3 years just because people upgrade that frequently anyways.  They will cost a bit more, but they will save you more than you think in not needing to have them repaired or replaced during your own usage, and be valuable to someone else long after you're done with it.  Buying cheap crap hurts everybody.
• Finally, mitigate your level of technological activity correspondent to your level of success in the above three areas

Pretty simple for most of us to do, methinks.

[marcus_of_augustus]

Anything that drives the demand for energy is good in my assessment. Kardashev's categorisation of technologically advanced civilizations is founded on their energy conversion capacity.
http://en.wikipedia.org/wiki/Kardashev_scale

Liquid-Fluorine molten salt thorium reactors (LFTR) are on the horizon (very cheap low-risk fission) and a fusion breakthrough is an ever present threat to the fossil fuel shackles; shale reserves should provide the breathing room to transition.
http://en.wikipedia.org/wiki/Molten_salt_reactor

A search for bitcoins (money) becomes a search for better energy sources ... when energy becomes essentially free, money (bitcoin) may no longer be needed.

[FatherMcGruder]

...shale reserves should provide the breathing room to transition.

If we can figure out how to get it safely.

[Jered Kenna (TradeHill)]

We still have equipment costs so if we magically got free or super cheap energy one day it wouldn't alter the mining (and economy) drastically immediately. It would balance out the load though I'd imagine. I'm guessing countries with 25cent+ kilowatt hours mine considerably less.