Looks like Bitcoin isn't so eco-friendly...

This is an unexpected development.

https://www.wired.com/story/bitcoin...yand-its-carbon-footprint-just-keeps-growing/

Basically, to try to make something really complicated very simple, the Bitcoin network doesn't have a central server. Instead, so-called "miners" provide the framework for transactions to take place, and these "miners" are incentivized by the creation of new bitcoins, according to an algorithm built into the Bitcoin code design. But the more bitcoins are created, the harder it gets to create new bitcoins, and so more computational power and bigger computers are required. The problem is now these huge computers are guzzling large amounts of electricity just to process useless mathematical problems that were designed to thwart too many people from creating too many bitcoins at the same time.

At this point, each bitcoin transaction requires the same amount of energy that nine average homes in the US use for one day, and that energy amount is only going to keep growing.

Looks like all the eco-loving Silicon Valley programmers who were so enthusiastic about the rise of Bitcoin didn't foresee or anticipate this.

Gives a little more information about the function behind "mining":
https://www.huffingtonpost.com/entry/whats-the-future-of-bitcoin-mining_us_57c22ff9e4b00c54015e2ec3

https://www.bitcoinmining.com/how-are-new-bitcoins-created/

 

Kinda like electric cars.

 

Evidence in support? We do have the analysis by Hawkins et al (2012,Comparative Environmental Life Cycle Assessment of Conventional and Electric Vehicles, Journal of Industrial Ecology) that concludes impacts are "indistinguishable from those of a diesel vehicle". However, things have changed since (given the innovation process).

 

The issue is, the more computers there are trying to "mine" bitcoins, the harder the computational problems become. The difficulty automatically adjusts to the number of computer algorithms attempting to create new bitcoins. At this point, mining is extremely competitive and it takes a powerful computer network and a lot of energy to try to mine a bitcoin. But with the current going price of a bitcoin at $14,000, even if it takes $10,000 worth of electrical energy to do all the computational problems and mine that bitcoin, it's still worth it.

 

Eco shmiko, I bought some. LOL

 

You know, I was thinking, maybe they should at least operate these Bitcoin mining warehouses in Iceland and Russia next to greenhouses. That way the greenhouses could utilize all the waste heat from all those computers running and they could have a source of fresh grown vegetables.

 

Wow! And the source referenced now says it takes 14 homes.

Well that isn't going to work!!! But this doesn't make any sense from an economic point of view. Someone is paying for all of that power. Who? And what is their incentive to do so?

 

By "bitcoin transaction", do you mean mining a bitcoin, or just an ordinary transaction using bitcoin?

 

Number of U.S. households powered for 1 day by the electricity consumed for a single transaction: 14.01
https://digiconomist.net/bitcoin-energy-consumption

 

Wow, I had no idea. I knew mining bitcoin was energy intensive (by design), but I thought that transactions with existing bitcoin wouldn't be. That seems incredibly wasteful.

 

Something you need to understand about the concept of Bitcoin is that the transactions are integrally tied to the mining of new Bitcoins.

The incentive to process transactions is facilitated by the potential ability to "mine" a new Bitcoin. The processing power required to mine only gets harder when there is more computational processing power devoted to mining Bitcoins. So the issue really isn't so much about transactions as it is the mining.

Just reducing the number of transactions isn't really going to cause less energy to be used because the difficulty of mathematical equations is just going to adjust to whatever the miners are capable of.

 

Who pays for the mining?

 

The for-profit businesses that do the mining. Can you guess what they get paid in??

Mining can lead to the creation of new Bitcoins. It's very competitive now since there is already so much computational power devoted to trying to mine Bitcoins.

 

Who pays the energy bills? Who is paying for all of this power. Or does the value of a typical bitcoin transaction dwarf the cost of power to 14 homes for a day?

The obvious solution is to ensure that the cost of energy is factored into the cost of the currency. But someone has to be paying for it now, somehow.

 

Every time someone buys a Bitcoin...

 

Who actually pays the power bill?

 

The for-profit companies engaged in mining Bitcoins.
They wouldn't be doing all this if there wasn't people buying the Bitcoins.

 

Well, then the bitcoin market will be limited by the cost of energy. The cost per transaction won't increase without bounds.

 

OK, well that is enlightening. However, I've read that the supply of bitcoin available to mine is mathematically limited to 21 million, and over 16 million have already been mined. So, once all the mining is done, who will pay for the transactions?

 

As it approaches 21 million the pace of mining will become exponentially slower, so there should still be plenty of time. And if there is less computational power attempting to mine, the mining will get easier (and thus less expensive). It's a sort of equilibrium.

 

tldr

Ethereum resolves this by switching to a proof of stake instead of proof of work model at some point. They also made it ASIC resistant. Many cryptocurrencies are now made after learning from the pitfalls and shortcomings of bitcoin. Bitcoin is already old technology and the only thing it has to offer is popularity. Eventually it will even lose that.

 

Yup, charge them with coal burning power plants

 

If all cars in the US suddenly become electric, how much more electricity do we need to produce (in percentage)?
Ryan Carlyle, BSChE, engineer at an oil company
Updated May 7, 2014 · Featured on Slate · Upvoted by Vivek Kumar Bagaria, PhD Electrical Engineering & Statistics, Stanford University

 

That doesn't solve the problem, it just delays it. And it may not even do that that; if, as you say, the mining gets exponentially slower, the last few Bitcoin may even remain unmined due to no one wanting to spend a year's worth of electricity on one millionth of a Bitcoin. But even if they somehow do, this system is destined to fail if transactions require such a stupid amount of power. Eventually there will be no one paying for them.

 

Why didn't you go for an actual scientific publication? "Some bloke on the internet reckons..." might lack a level of quality control