Bitcoin Electricity Consumption

[juvo_3]

Hello all,

Since market prices have reached "those" levels again, I would like to have a discussion about the Bitcoin network's electricity consumption.

It seems to be a little bit of a convoluted topic as there are multiple factors to consider. In terms of Bitcoin price being feasible in regards to other systems that exist (e.g. environmental systems, the broader economy and markets), the carbon footprint of the bitcoin is a key indicator as a direct extension of electricity consumption.

We have miners that are distributed all over the world, as location of the miner is not constrained by the protocol, miners would migrate to areas where electricity is cheaper. Therefore the specific CO2 production will vary with miners based on:

- proportion of electricity obtained from the grid and independently generated
- What the average CO2 production is from their local electricity grid
- What the average CO2 production is from their independent electricity generation methods.

This data is hard to get without having some form of survey done on each one. And as since BTC is decentralized, it is difficult to survey everyone.

Factors to consider are:

• Since the last major bull run their has been a halving in the BTC reward (12.5btc to 6.25btc). The next halving is predicted to occur in 2024. This means that the profit a miner would have to spend on electricity would be less.
• The peak hash rate since the 2017 peak was approx 55 EH/s. It is currently approx. 126 EH/s
• Mining Rigs would have become more efficient meaning more hashes per KWh. I do not know the eff of state of the art mining rigs.

There are some insightful studies done in the realm of understanding BTC electricity consumption:

- https://digiconomist.net/bitcoin-energy-consumption/
- https://www.sciencedirect.com/science/article/abs/pii/S2214629620302966?via%3Dihub

So, I guess the question is, what is the feasible price of bitcoin when considering other objective functions such as environmental sustainability?

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[davis196]

So, I guess the question is, what is the feasible price of bitcoin when considering other objective functions such as environmental sustainability?

Electricity produces CO2,but so what?Trees and plants consume CO2,so the problem with CO2 production can be solved,if we plant more trees on the planet Earth.
Can you measure "environmental sustainability"?I don't think so.
Coal mining and coal consumption in the third world countries is a way bigger problem than crypto mining,so let's not become like all those "progressive" ecological fanatics,like Greta Tunberg.
Many industries are polluting the Earth way more than the crypto industry.
And yes,crypto mining will become more and more energy efficient,year after year.The miners want lower electricity costs,don't they?

[aoluain]

So, I guess the question is, what is the feasible price of bitcoin when considering other objective functions such as environmental sustainability?

Apologies, I'm not sure I understand the question but i'll throw in my 2c.

Electricity consumption has been hotly debated and used by some who dont look favourably at bitcoin as a stick to beat it with.

The fact is that bitcoins electricity consumption through miners is far less than the production of FIAT and GOLD.

Think of the production of Paper, the printing, the transportation, storage, security and management involved. Now look at the production of coins and apply the same production, transportation, storage, security and management, its massive.

Gold! we are ripping the earth apart in the search. The energy spent in the extraction,
The processing, and all of the above FIAT considerations above combine to its consumption of energy.

Bitcoin mining is far more efficient, and this is what it comes down to, quantity of energy units consumed and the efficiency of that useage, BTCmining wins.

[Lorence.xD]

So, I guess the question is, what is the feasible price of bitcoin when considering other objective functions such as environmental sustainability?

Electricity produces CO2,but so what?Trees and plants consume CO2,so the problem with CO2 production can be solved,if we plant more trees on the planet Earth.
Can you measure "environmental sustainability"?I don't think so.
Coal mining and coal consumption in the third world countries is a way bigger problem than crypto mining,so let's not become like all those "progressive" ecological fanatics,like Greta Tunberg.
Many industries are polluting the Earth way more than the crypto industry.
And yes,crypto mining will become more and more energy efficient,year after year.The miners want lower electricity costs,don't they?

It is better if we care for ocean algae because they are the biggest CO2 absorber, planting a lot of trees will be inefficient because maturity takes a lot of time. If we do not solve the electricity consumption problem within crypto mining then what is it good for rather than contributing to the carbon footprint. Can you explain how the mines become more energy efficient?

There is a solution for this problem that we are facing, as we all know, more countries are leaning towards a more efficient and clean energy like wind, solar, hydro and the worst but efficient of the bunch which is nuclear. The thing with power source is the farther you are to the source, the more expensive the cost of electricity is. If we can put those mines as close as possible to the source, I think that we can alleviate the environmental impacts that mining contributes.

[Charles-Tim]

So, I guess the question is, what is the feasible price of bitcoin when considering other objective functions such as environmental sustainability?

I guess you question is not correct asked, the price of bitcoin is not determined by electricity or such other factors than the factors that can directly or indirectly affect the price of bitcoin. But, I guess your question is what is the profit of bitcoin mining after considering all factors that can lessen the profit', factors like electricity cost and the likes. If that is the case, you will need to talk more about your region because the cost of electricity will be costier from one region to another.

For example
If you are in a cold region, you will spend less on electricity because your cooling equipments will not be used often
Also available of equipments like miners and other mining hardwares
The cost of electricity itself
Cost of labour in case you employ people to do one work or the other for you and pay them

Then, after determine these, you can be able to determine the net profit of bitcoin mining.

[Ucy]

I read that alots of the miners depend on clean/environmental-friendly energy sources. I think it's important to know how true this is and whether most of the miners rely on clean energy sources. If they do, then I think the price wouldn't matter much assuming the hardware required for mining doesn't keep increasing in size and in energy consumption without commensurate or sufficient increase in the usefulness of Bitcoin or without sufficient increase in the "value" Bitcoin is generating for the world/network.

[slaman29]

And never to forget the point most discussions fail to even touch: the value brought by all this expensive processes. Bitcoin is still the most powerful network in terms of security and hashpower, giving the confidence of investors to keep investing. Altcoins cannot even come close. All that "cost" of securing the network is well warranted.

[o_e_l_e_o]

This data is hard to get without having some form of survey done on each one. And as since BTC is decentralized, it is difficult to survey everyone.

Here is the data we do have: https://coinshares.com/assets/resources/Research/bitcoin-mining-network-december-2019.pdf

I would direct you to pages 8 and 9 which discuss the "energy mix" of bitcoin mining. They reach the conclusion that approximately 73% of bitcoin mining is performed using renewable energy. This is around 4 times higher than the average global renewable energy use.

Mining Rigs would have become more efficient meaning more hashes per KWh. I do not know the eff of state of the art mining rigs.

The Antminer S1 has a hashrate of 180 GH/s while using 360 watts of power - https://minerstat.com/hardware/antminer-s1
The Antminer S19 pro has a hashrate of 110 Th/s (110,000 GH/s) while using 3,250 watts of power - https://minerstat.com/hardware/antminer-s19-pro

This means the Antminer S1 produced 0.5 GH per joule, while the Antminer S19 Pro produces 33.8 GH per joule. This represents a 68 fold increase in efficiency, or conversely, a 98.5% decrease in energy use.

[Darker45]

So, I guess the question is, what is the feasible price of bitcoin when considering other objective functions such as environmental sustainability?

Electricity produces CO2,but so what?Trees and plants consume CO2,so the problem with CO2 production can be solved,if we plant more trees on the planet Earth.
Can you measure "environmental sustainability"?I don't think so.
Coal mining and coal consumption in the third world countries is a way bigger problem than crypto mining,so let's not become like all those "progressive" ecological fanatics,like Greta Tunberg.
Many industries are polluting the Earth way more than the crypto industry.
And yes,crypto mining will become more and more energy efficient,year after year.The miners want lower electricity costs,don't they?

And the biggest problem is people's fallacious and even destructive thinking that since there are much bigger problems out there the smaller ones could just be set aside and not attended to. In the first place, those bigger problems, some of which are now seemingly insurmountable, were but small problems back then.

In a way, environmental sustainability could indeed be measured. That is why a set of criteria is integrated in business license applications or even project proposals that the planned business or project does not cause terrible harm to the environment.

[Smartprofit]

We have miners that are distributed all over the world, as location of the miner is not constrained by the protocol, miners would migrate to areas where electricity is cheaper. Therefore the specific CO2 production will vary with miners based on:

- proportion of electricity obtained from the grid and independently generated
- What the average CO2 production is from their local electricity grid
- What the average CO2 production is from their independent electricity generation methods.

This data is hard to get without having some form of survey done on each one. And as since BTC is decentralized, it is difficult to survey everyone.

Factors to consider are:

• Since the last major bull run their has been a halving in the BTC reward (12.5btc to 6.25btc). The next halving is predicted to occur in 2024. This means that the profit a miner would have to spend on electricity would be less.
• The peak hash rate since the 2017 peak was approx 55 EH/s. It is currently approx. 126 EH/s
• Mining Rigs would have become more efficient meaning more hashes per KWh. I do not know the eff of state of the art mining rigs.

There are some insightful studies done in the realm of understanding BTC electricity consumption:

- https://digiconomist.net/bitcoin-energy-consumption/
- https://www.sciencedirect.com/science/article/abs/pii/S2214629620302966?via%3Dihub

So, I guess the question is, what is the feasible price of bitcoin when considering other objective functions such as environmental sustainability?

Your topic is very interesting!

The modern economy is based on making a profit.  The modern economy does not aim to solve environmental problems.  In the modern capitalist system, world economic crises arise due to falling energy consumption.  

Hence, based on this, "energy money" (bitcoins) can help the modern economic system get out of the crisis.  

To solve environmental problems, you do not need "energy money" (petrodollar, bitcoin), but "environmental money".  

Let me give you an example - I have improved the situation with the environment, therefore I can issue my own money.  

This is "environmental money".

[ranochigo]

You have to also consider the electrical consumption of the nodes on the network if you want to be absolutely spot-on when talking about the numbers. I would think they are negligible when compared to the electrical consumption of the ASICs, so let's take that out of the picture.

I don't think electrical consumption (and its impact) is a good point to be made against POW Cryptos in general. Fact is, most of the alternative currency use far more resources and have far worse impacts when you compare it to the environment degradation as a result of Bitcoin mining. Fact is, most of the calculations are done with the presumption that miners don't use the more efficient ASICs and that the miners are using coal as a source of energy. In reality, those ASICs which are less efficient are already phased out. In addition, AFAIK most of the miners are situated near renewable and clean sources of energy and some of them are obtained from the surplus from such facilities.

For a network that "processes" or rather, has a transaction volume of tens of billions of dollars (even when Bitcoin was at 10k), I think it's reasonable to have that levels of electricity consumption. When the critics complain about the electrical consumption, ask them whether their proposed alternative could provide similar levels of security and characteristics that Bitcoin currently has.

[Oshosondy]

With what I know as fact, you can not compare old miners to new miners, old miners consume energy than the new miners while they are not also efficient like new miners. Also in the future, the companies producing the miners will found means of creating miners that still mine more efficiently but also with low energy consumption. This does not go to only miners but all mining hardwares that makes use of electricity will be created later in a way to work more effectively and with more work done.

[pixie85]

So, I guess the question is, what is the feasible price of bitcoin when considering other objective functions such as environmental sustainability?

Electricity produces CO2,but so what?Trees and plants consume CO2,so the problem with CO2 production can be solved,if we plant more trees on the planet Earth.
Can you measure "environmental sustainability"?I don't think so.
Coal mining and coal consumption in the third world countries is a way bigger problem than crypto mining,so let's not become like all those "progressive" ecological fanatics,like Greta Tunberg.
Many industries are polluting the Earth way more than the crypto industry.
And yes,crypto mining will become more and more energy efficient,year after year.The miners want lower electricity costs,don't they?

Electricity doesn't produce CO2, its production does and not even all of it because solar panels don't produce CO2.

Miners don't produce CO2 just like your home computer doesn't do it.

Would CO2 not be produced if we stopped mining? The answer is no.

[hatshepsut93]

Therefore, I think the price of a bitcoin is independent of the cost of producing it and so environmental sustainability is not a factor.

It's the cost of producing Bitcoin that is dependent on the price, because of the difficulty adjustment algorithm. AKA "the hashrate follows the price". But Bitcoin's price would need to grow a few orders of magnitude in order to be able to attract enough electricity to become a noticeable carbon-emission offender. As of now, there are much bigger sources of carbon emissions, to the point where blaming Bitcoin for global warming sounds suspiciously like a deflection by some of those industries.

[GrassBite]

We have miners that are distributed all over the world, as location of the miner is not constrained by the protocol, miners would migrate to areas where electricity is cheaper. Therefore the specific CO2 production will vary with miners based on:

- proportion of electricity obtained from the grid and independently generated
- What the average CO2 production is from their local electricity grid
- What the average CO2 production is from their independent electricity generation methods.

This data is hard to get without having some form of survey done on each one. And as since BTC is decentralized, it is difficult to survey everyone.

Factors to consider are:

• Since the last major bull run their has been a halving in the BTC reward (12.5btc to 6.25btc). The next halving is predicted to occur in 2024. This means that the profit a miner would have to spend on electricity would be less.
• The peak hash rate since the 2017 peak was approx 55 EH/s. It is currently approx. 126 EH/s
• Mining Rigs would have become more efficient meaning more hashes per KWh. I do not know the eff of state of the art mining rigs.

There are some insightful studies done in the realm of understanding BTC electricity consumption:

- https://digiconomist.net/bitcoin-energy-consumption/
- https://www.sciencedirect.com/science/article/abs/pii/S2214629620302966?via%3Dihub

So, I guess the question is, what is the feasible price of bitcoin when considering other objective functions such as environmental sustainability?

Your topic is very interesting!

The modern economy is based on making a profit.  The modern economy does not aim to solve environmental problems.  In the modern capitalist system, world economic crises arise due to falling energy consumption.  

Hence, based on this, "energy money" (bitcoins) can help the modern economic system get out of the crisis.  

To solve environmental problems, you do not need "energy money" (petrodollar, bitcoin), but "environmental money".  

Let me give you an example - I have improved the situation with the environment, therefore I can issue my own money.  

This is "environmental money".

I would disagree, somewhat.  While making money is critical, the current investment movement is towards green and away from hydrocarbons.  Companies like Tesla get stratospheric price to sales ratios while industrials and others sell for below book value.

In other words, making $10 in an oil an gas company actually rewards you LESS than making $10 in a EV or Solar company.  Your elementary approach is limited and does not take this into account.

[ranochigo]

Electricity doesn't produce CO2, its production does and not even all of it because solar panels don't produce CO2.

Miners don't produce CO2 just like your home computer doesn't do it.

Would CO2 not be produced if we stopped mining? The answer is no.

I think it's a pretty common myth but the construction of most renewable energy will actually incur some form of environmental degradation, CO2 or not. Solar panels don't just lay around and the manufacturing of the panels will essentially produce some pollution and it will take some time for the benefits of a solar panel to outweigh the environmental costs of it. It's obviously not without it's problem.

It would be wrong to assume that just because some mining operations uses renewable energy, all of the energy inputs are green energy. The issue on hand is that the electrical energy that could otherwise have been used for other purposes were used for Bitcoin mining. I wouldn't say it's completely invalid to attribute the CO2 production to Bitcoin mining because they use a ton of electricity and the production of which produces greenhouse gases.

No, CO2 production will never stop. But if Bitcoin mining doesn't use electricity, then the reliance on coal energy and/or natural gas would be lesser since that the energy requirements of the country would be lower.

To some extent, the above argument will hold water. But it's important to consider the transaction volume of Bitcoin on a daily basis.

[tranthidung]

There are seasonal cycles with difficulty adjustments on the bitcoin network. It usually appears are late of the second quarter or very late months of every year. It is the time for floods, storms, etc. in China mainland. The most negative changes (< -10%) in history are recorded in October (2 times), December (2 times), and March (1 time).

There are lags between price and electricity cost estimates (I did not look at their methodology).

Code:

      +------------------------+
      |      date   diff_pcneg |
      |------------------------|
1010. | 14oct2011       -13.09 |
1027. | 31oct2011       -18.03 |
1449. | 26dec2012       -11.59 |
3617. | 03dec2018       -15.13 |
4096. | 26mar2020       -15.95 |
      +------------------------+

I used some multipliers from original values to make charts more visually comparable among some variables.

• The history of Bitcoin difficulty adjustment (in percent)
• Data sources:
  
  • cbeci.org: for the estimates of max, min, guess electricity costs (TWh)
  • coinmarketcap.com/currencies/bitcoin: price of bitcoin
  • loyce.club/blockdata/difficulty.txt: Difficulty

[Debonaire217]

So, I guess the question is, what is the feasible price of bitcoin when considering other objective functions such as environmental sustainability?

Electricity produces CO2,but so what?Trees and plants consume CO2,so the problem with CO2 production can be solved,if we plant more trees on the planet Earth.
Can you measure "environmental sustainability"?I don't think so.
Coal mining and coal consumption in the third world countries is a way bigger problem than crypto mining,so let's not become like all those "progressive" ecological fanatics,like Greta Tunberg.
Many industries are polluting the Earth way more than the crypto industry.
And yes,crypto mining will become more and more energy efficient,year after year.The miners want lower electricity costs,don't they?

I think his point is that the bitcoin miners consumes more electricity than those computer users that mainly use their devices with just searching or browsing. Remember the fact that miners need their devices to continue running 24/7 in order to mine passively with more outcomes. Hence, a household with atleast 15 drvices such as gadgets, appliances, etc are still consuming less than the bitcoin miners. I agree that we are already making this Earth more poluted but since he brought up this I think it should be considered by the bitcoin miners on how it affects Earth.

[o_e_l_e_o]

I think his point is that the bitcoin miners consumes more electricity than those computer users that mainly use their devices with just searching or browsing.

Yes, but we've already seen above that bitcoin miners use significantly more green and renewable energy than standard computers and other appliances. In addition, there is evidence that bitcoin miners actually increase the production of green energy and the development of renewable infrastructure. You can't just stick solar panels in the middle of the desert or build a hydro plant 100km from civilization and expect to make a profit - you need people or facilities nearby that you can sell your energy too. Bitcoin miners can be placed anywhere, and so will buy energy from green sources which would otherwise be unprofitable. Because of this, bitcoin mining can lead to the development of new and existing renewable projects which otherwise would not exist.

[ranochigo]

In addition, there is evidence that bitcoin miners actually increase the production of green energy and the development of renewable infrastructure. You can't just stick solar panels in the middle of the desert or build a hydro plant 100km from civilization and expect to make a profit - you need people or facilities nearby that you can sell your energy too. Bitcoin miners can be placed anywhere, and so will buy energy from green sources which would otherwise be unprofitable. Because of this, bitcoin mining can lead to the development of new and existing renewable projects which otherwise would not exist.

That's an interesting perspective to consider as well. I wouldn't consider "green" energy as carbon neutral or completely environmentally friendly. Arguably, such infrastructure would benefit the economy primary. Green and renewable energy are ideal when they are able to replace the needs for traditional fossil fuel as a source of electrical generation. In fact, most solar farms, wind turbines, hydrodams, are not very environmentally friendly due to the fact that they will also contribute to the diminishing ecosystem or the production involves processes that are not carbon neutral.

In terms of economic impact, such projects will contribute significantly but if you're considering from the ecological perspective, I don't think the building or expansion of such infrastructure will actually benefit the environment at all and would perhaps bring about less than expected benefits for the economy, given that Bitcoin miners are seeking lower electrical rates and the construction and development of such facilities would bring about an increase in electrical prices and I doubt they will ROI in the short run.