this post was submitted on 10 Feb 2024
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Since it's a common mistake when discussing cryptocurrency energy use, I should point out that it's really only Bitcoin specifically that uses significant amounts of electricity these days. Most other cryptocurrencies have switched to proof of stake systems, which uses negligible energy.
Just to expand on this, While eth is 99.99% less energy use than Bitcoin, it still added 2.8 kilotonnes of co2 last year which is equal to about 2000 average houses for a year.
It's a negligible amount in the scheme of things, but a lot for a virtual currency especially when you add up all the various cryptocurrencies out there.
It wouldn't hurt to make all the POS ones use green energy, but probably wouldn't impact anything by itself.
Changing Bitcoin to green energy alone probably would however.
Why is it "a lot for a virtual currency?" What's the typical energy usage of a virtual currency?
In 2019 Visa used 740,000 gigajoules of energy, which is equivalent to 6727 households (google dug up a figure of 110 Gj/year for that). So this really doesn't seem like a lot for this kind of thing.
By your estimate, visa used 3.4x the power of eth. I would guess visa handles much much more than 3.4x the volume of currency transactions and is way more efficient on energy.
The thing that everyone misses in these comparisons is that yes that’s the energy that VISA expended to make these transactions but for a crypto currency the energy use isn’t even to make the transaction. In the end each transaction is a few Bytes of data that have no difficulty getting across the world (much like this post or any comment). The energy use is so “high” because that’s is used to secure the currency. And of course that’s a much harder comparison to make but a fairer one.
How much energy does the the banking system actually use? How much energy is used to secure the US dollar for example?
You have to account for the entirety of it. That’s like saying that F1 doesn’t pollute all that much because they use bio fuel and the cars are very energy efficient, completely disregarding the fact that the majority of the pollution is in the constant global shipping of cars and gear, as well as R & D
Ethereum did approximately 1.1m transactions a day. Visa did approximately 660m a day.
Small difference lol
Probably, but Ethereum does a lot of things that Visa can't. Visa transactions are exceedingly simple. It was just the only generally comparable thing I could think of that I could get energy figures for, do you know of any better examples?
And that's just Visa.
https://www.eia.gov/consumption/commercial/data/2012/c&e/cfm/pba4.php
That lists the energy usage of banking and financial office space to be 18 billion kWh, or 64.8 petajoules. (About 87x that Visa figure.)
And even that is just office space. Doesn't factor in the manufacture, distribution, transport, storage, and disposal of physical money, or any other associated costs.
On the flip side, global banking processes something like 5+ orders of magnitude more transactions than ETH, so even at the low end it’s 1000x more efficient than the most well known POS coin.
Acting like 2000 average houses is a lot of power consumption for a cryptocurrency with such an unimaginably high market cap... That's basically a rounding error.
I specifically said it's negligible if you bothered to read past that line
Where did I say I was disagreeing with you, mate?
Sorry, I've had like 2 hours sleep in the last 2 days so I'm tired and grumpy lol, just ignore me
There's an estimated 2.2 billion residences on earth. That's a pretty small percentage 😅
Everything above 0% is not neglible for such uselessly decadent endeavours as cryptocurrency.
Who decides what "negligible" is? It's unnecessary and we're living in a climate crisis.
Greedy arrogant cryptobros decides that obviously.
Interesting, is it because of competition requiring more machines? What about something like Monero?
It's because proof-of-stake is fundamentally different from how proof-of-work operates.
The fundamental problem that all blockchains need to solve is something called the Byzantine Generals Problem. A blockchain needs to consist of a list of transactions that everyone agrees on - everyone needs to be able to know which transactions are part of the list, and what order they appear on that list. But there can't be any central "authority" making that decision, it has to be done in a completely decentralized way.
The way proof of work does it is that it requires people adding transactions to the list to do some extremely expensive calculations and attach the results of those calculations to the transactions that they're adding. Anyone can do those calculations so there's no central authority, but the costliness of the calculations means that once the transactions are added it becomes just as expensive to create a substitute set of transactions. So everyone ends up agreeing on what transactions were added because it would be unfeasably costly to "fake" an alternative history to the blockchain. This means it's impossible to make a proof-of-work chain that isn't hugely "wasteful", because the waste is the point of it. It has to be costly for it to work.
Proof-of-stake takes a very different approach. It solves the same basic problem - determining which transactions are part of the chain in a decentralized manner - using some very fancy cryptography that I have to admit that I don't fully understand. But instead of proving that the transactions you're adding are "trustworthy" due to proving you've wasted a whole lot of resources adding them, you do it by putting up a "stake." You lock a big sum of money in your cryptocurrency staking account and essentially make it a hostage to your good behaviour. If you put up a bad transaction you can lose your stake. So under proof-of-stake there's simply no need to burn huge amounts of electricity.
Monero uses a proof-of-work algorithm like Bitcoin. The reason Monero doesn't use anywhere near as much energy as Bitcoin is simply because it isn't worth as much and so not as many people are mining it. If Monero was worth as much as Bitcoin the energy usage would rise to become comparable.
Also over half is used by green energy already and will continue to grow
There is a caveat to this. It’s been a few years since I read the article, but oftentimes the reason Bitcoin miners run on renewables is because they set up shop in places that have established local cheap electricity.
The example in the article was a town with ideal geography for hydro power, to the point electricity was cheap enough to sell it to the next town over. Crypto-miners set up in the first town and quickly began using more power, driving up the cost and eventually causing serious issues for the second town as there wasn’t enough electricity leftover to send their way anymore.
I'm no fan of Bitcoin, but often the energy they use from hydro plants is energy that would literally be wasted otherwise. A hydro dam can't control how much water is entering the reservoir, so if there's more water entering the reservoir than is needed to generate electricity for the current demand then the dam will need to just throw the extra water away. Trying to transmit the electricty to remote markets can be an alternative, but that costs resources too and isn't always practical.
I dug up the original article: https://www.politico.com/magazine/story/2018/03/09/bitcoin-mining-energy-prices-smalltown-feature-217230/
In this case, they already were exporting 80% of the hydro-energy generated, about enough to power Los Angeles in 2018 when it was written. Maybe there are some cases for your suggestion on a small scale, but if a site is generating enough excess electricity to make mining worthwhile, why would it be less worthwhile to connect it to a larger grid?
The hydro plant for my city doesn't even have a reservoir. It's just on a river that flows down a mountain. And 99.999% of the water doesn't go through any turbines.
Having said that - it doesn't produce enough power for the city, let alone spare to be wasted on other things.
I’ve read different stories. Of towns where cheap and renewable electricity can be made but it’s financially not viable especially at the start. So Bitcoin miners were used to sell the excess energy and that made the project possible. In a way something like Bitcoin can create a global price/demand for electricity which can have its advantages like I mentioned or disadvantages like you mentioned.
I’ll concede there’s probably something to miners footing the initial capital to build the infrastructure, and if it’s in a remote area it may be prohibitively expensive for public utilities to extend the grid to it. But mining setups still require high internet speed connections to use the network, and I just have to wonder if installing that is a better use of resources than installing power lines to take some load off non-renewable power sources.
They don’t require high internet speed at all. Why do you say that? You have to keep up with the network that creates a couple MBs of data every 10mins. That’s it. You need processing power and as such electricity but none of that requires high speed internet, quite the contrary. You can get away with a mobile data in most places.
There's a sentence in the article I linked to in another comment that, in the city the article was about, there were data centers for Microsoft and similar companies that had required high-speed internet infrastructure be built in town despite its small size. I suppose, based on what you said, that speed wouldn't be too essential but you would want stability to maintain a connection. Satellite internet probably wouldn't be great for that (maybe Starlink is?) in which case you still want to run some kind of cable.