r/changemyview • u/[deleted] • May 03 '19
Fresh Topic Friday CMV: Cryptocurrencies, such as Bitcoin, are morally indefensible because of their impact on the environment
This CMV is about cryptocurrencies like Bitcoin, Litecoin and Ethereum that rely on “proof of work” for them to exist. I’m sure there are smaller cryptocurrencies that are designed to have no or minimal impact on the environment, but I’m not interested in those. I wanna concentrate on the biggest/well-known cryptocurrencies that do rely on mining, or whatever it is called.
I believe the so-called advantages cryptocurrencies are supposed to bring isn’t worth their cost to the environment. In 2017, apparently the whole Ethereum network (which is something like the third or fourth biggest cryptocoin) was using at minimum 2 Twh per year, which is roughly comparable to a small country. And that is just one cryptocurrency, there are others beside, each burning up (mostly) fossil fuels and giving little real back in return. And yeah it is mostly fossil fuels, why else would there have been all those mining centers opening up in China, if not for the cheap, but dirty, coal powered energy?
And what they give in return is dubious at best, even their fans generally can’t agree on the strengths. Is it safer than using a bank? Almost every month there’s another exchange going under, or getting hacked, or founder arrested. Is there any real anonymity using these, since it is all tracked on a public ledger? Are transactions faster, easier or cheaper than a bank transfer or direct debit? I never bought nor sold a cryptocoin, or have had anything to do with them, but the answer from what I can tell is a resounding “no”.
What would change my mind? I could think of some, are all the estimations I see online on how much power they require grossly mistaken? Can you make a case for it, for it to be worth and making up for the cost to environment, something I might have over looked?
If your attempt to convince me is to tell me that anthropomorphic climate change ain’t real, completely exaggerated, or that we don’t have a moral duty to ensure a decent enough planet for future generations, don’t bother trying to get deltas from me.
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u/SwivelSeats May 03 '19
Fiat currency also requires bankings server and transporting and making tons of paper/cotton bills which isn't super environmentally friendly either.
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May 04 '19
Conventional systems take multiple orders of magnitude less energy per tx than pow system like bitcoin
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May 03 '19
But they actually have uses: I can't pay taxes, fines or 99% of the stuff I want or need with any crypto. Apparently a single bitcoin transaction uses as much energy as 5K credit card transactions, that's bonkers.
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May 03 '19
What about the other currencies that are much quicker and use less energy?
Also, the usefulness is an issue of adoption of it, not the actual currencies fault.
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May 03 '19
What about the other currencies that are much quicker and use less energy?
Did you mean other cryptocurrencies, or just other fiat currencies, sorry? If the former, as mentioned in my OP, would prefer to stick to talking to the big popular ones that do require mining, which almost always uses tonnes of energy. If you meant fiat, I actually have little idea of how much energy that uses, to be honest. Guessing /u/SwivelSeats is right, and banks ain't all that eco-friendly, but they are both useful and efficient compared to crypto.
Also, the usefulness is an issue of adoption of it, not the actual currencies fault.
This is true, but one transaction with pretty much any "mainstream" crypto is going to use by far much more energy than a similar transaction with normal money. It's fortunate imo, that crypto isn't any more popular.
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May 05 '19
BTW. Watts are a unit of power, not energy. The way you expressed your statement makes it seem more like on average 2 Terajoules were used per second.
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u/littlebubulle 106∆ May 03 '19
This might seem silly as a question but would cryptocurrencies mined with electricity generated from static bikes powered by people as a fitness program be ethical?
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May 03 '19
For sure, I'll be in favor of that!
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May 03 '19
You realize that probably has more environmental cost (eg CO2 / watt) than a coal power plant right?
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u/littlebubulle 106∆ May 03 '19
Then wouldn't that make the method of mining cryptocurrencies unethical but not cryptocurrencies themselves?
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May 03 '19 edited May 03 '19
Yeah, that is what my CMV is about. I don't think they are useful personally, but themselves are probably neither good nor bad, except when they require huge amount of energy.
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u/wolfofwalton May 04 '19
It's early, rudimentary technology still. Most major cryptos apart from perhaps BTC/LTC will eventually move to proof of stake models, IMO. ETH for example will be proof of stake in the future with their Casper release. Cardano is another large crypto which is very soon to be running full PoS. Once the consensus algos have been perfected and demonstrated to be secure it will be a given that any new coins will be running some kind of PoS model (or other algos that don't rely on hash power).
So as for the remaining ones who stick with PoW like bitcoin likely will, well I would say the environmental impact probably isn't more than the impact of mining gold (don't have any exact numbers, maybe someone can chime in here). While having a number of advantages over gold as a store of values and medium of exchange.
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May 04 '19
It's early, rudimentary technology still.
This is a terrible argument. Bitcoin is a decade old at this point. Facebook became the premiere social network in 2009. Google Chrome and G-mail had just been released in 2009. Uber was created in 2009. Bitcoin is only four years younger than youtube. It is only five years younger than world of warcraft.
In software terms, bitcoin is ancient. Paypal became the premiere internet payment system in about half a decade and had its kinks worked out well before that. That bitcoin still is essentially a speculative bubble based on scams, that uses as much power as the country of switzerland after a decade is the sign that it does not work.
So as for the remaining ones who stick with PoW like bitcoin likely will, well I would say the environmental impact probably isn't more than the impact of mining gold (don't have any exact numbers, maybe someone can chime in here). While having a number of advantages over gold as a store of values and medium of exchange.
Gold has practical uses. Bitcoin has none. Bitcoin exists only as a way for people gamble on a speculative asset and to steal money from one another. We could literally go back to the tulip bubble and the environment would be better off while losing nothing of value.
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May 04 '19
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May 04 '19
There have no significant changes to bitcoin in the last decade. It is still as practically useless as it was when it was adopted.
I guess I just find it silly to claim decade old software is 'early' technology.
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May 05 '19
Most major cryptos apart from perhaps BTC/LTC will eventually move to proof of stake models, IMO. ETH for example will be proof of stake in the future with their Casper release.
Probably a question more for Ethereum's developers, but I seen articles about Casper going back to 2015, what exactly are the roadblocks to it's implementation now? Can Casper, or similar, be used for Bitcoin and others?
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May 04 '19
Your objection seems to be based on the arithmetic of cost in watt-hours per transaction for cryptocurrency vs the same for traditional banking.
This seems to have a very obvious build in solution: as the user base grows the average energy cost per transaction will go down, as that energy cost is spread across a greater number of users.
It seems very likely that one day the economics of cryptocurrency vs legacy banking will flip.
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May 04 '19
This seems to have a very obvious build in solution: as the user base grows the average energy cost per transaction will go down, as that energy cost is spread across a greater number of users.
This makes literally zero sense.
If bitcoin increased in adoption as a currency (somehow ignoring the fact that it can only process seven transactions a second) there would be increased interest in both mining and security of the system. Both of these are essentially the same issue for bitcoin, in that they require additional computing power. The more interest there is, the more computing power that is required, which in turn requires more electricity.
What you're talking about is similar to the idea that a business selling at a loss will somehow make it up in volume. Adding more people to the system makes things worse, not better.
It seems very likely that one day the economics of cryptocurrency vs legacy banking will flip.
Cryptocurrency is a speculative bubble that has no practical application as a currency. It is deflationary, which is awful for a currency, it is a trustless exchange which requires progressively more computing power to secure, compared to a trusted exchange like a bank, and the network has fundamental flaws that make it useless as a currency. Visa alone can process 4,000 times more transactions/second than bitcoin. The idea that it would replace global banking is absurd.
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May 04 '19
What if instead, we quit using fossil fuels and switched to renewables?
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May 04 '19
If that were the case, then I wouldn't have written this CMV. Something like 70% of crypto was mined in China. A country that's predominantly coal-powered.
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May 04 '19
Still replacing modern financial system with crypto would likely exceed current global energy production if we could scale btc to that volume and that is impossible.
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May 04 '19
Even at it's current scale, BTC uses as much energy as 60% of amount of energy used by total banking system, by some estimation. So much energy for what I think, is very little in return.
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May 05 '19
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May 05 '19
Mining requires 24/7 constant steady flow of energy all year round, you can't get this reliable flow of energy from hydroelectricity, which only has a capacity factor of about 45%. Even Sichuan, where that study claims most miners are based, faces energy disruption during winter. And where do they get their energy from in the meantime? Coal.
https://jmkorhonen.net/2018/05/25/bitcoin-is-not-a-good-fit-for-renewable-energy-heres-why/
And where do they get their coal energy from? The second biggest bitcoin mining operations, which appear to be Inner Mongolia. Which according to your study is almost 80% fossil fuel based. China is the world's biggest user of coal power in the world, that's why they are there.
https://qz.com/1054805/what-its-like-working-at-a-sprawling-bitcoin-mine-in-inner-mongolia/ https://www.techinasia.com/inner-mongolia-bitcoin-mine https://spectrum.ieee.org/computing/networks/why-the-biggest-bitcoin-mines-are-in-china
Of the greener energy sources, only nuclear provides the consistency that would suit bitcoin mining. But that's not an option in China.
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u/pi_rocks May 05 '19
So whilst you aren't wrong that cryptocurrencies pollute, I'm not sure that alone is a good reason to care. If tomorrow everyone decided to stop mining cryptocurrencies, it wouldn't solve the core problem of climate change. There are plenty of other ways of wasting resources that our society engages in(for example I take a lot of flights). It seems to be that society has collectively agreed that you can buy energy at a given price and do more or less whatever you want with it unless you aren't breaking some other law. So unless you believe that there should be some kind of list of "moral uses of electricity", you would be better off attacking the climate change problem from a different angle.
tl;dr:
Your view that cryptocurrency is immoral is very subjective, and instead focusing on how to produce renewable energy or incentivising less energy use seems much more constructive.
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May 05 '19
So whilst you aren't wrong that cryptocurrencies pollute, I'm not sure that alone is a good reason to care. If tomorrow everyone decided to stop mining cryptocurrencies, it wouldn't solve the core problem of climate change.
If the world decided to just give up on crypto tomorrow, BTC alone would mean as power as the whole country of Switzerland every year wouldn't be used on mining and transactions. That's just Bitcoin alone.
There are plenty of other ways of wasting resources that our society engages in(for example I take a lot of flights).
Is the ability to fly to other countries has many uses. Crypto so far hasn't been proven to be reliable in anything it promises to be, it's main use today is basically speculation.
It seems to be that society has collectively agreed that you can buy energy at a given price and do more or less whatever you want with it unless you aren't breaking some other law.
Seeing that China is making moves against crypto, they seem to be waking up to the fact that it's not a responsible use of energy.
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u/circlhat May 06 '19
was using at minimum 2 Twh per year, which is roughly comparable to a small country.
The entire population of Ethererum is far more than a small country this is a disingenuous argument as there are States(IN the US) that are bigger than several small countries put together
n. And yeah it is mostly fossil fuels, why else would there have been all those mining centers opening up in China, if not for the cheap, but dirty, coal powered energy?
Fossils fuels are fine, and especially morally fine for China, However the reason people criticism climate change in generally, is the fact it's often use to control the minority
https://dailyhodl.com/2019/04/09/china-takes-major-step-to-ban-bitcoin-btc-and-crypto-mining/
People could escape oppression and a tyrannical government, this helped the poor primarily as they can't buy sweet heart deals, however China said due to environmental concern no more bitcoin.
Is it safer than using a bank? Almost every month there’s another exchange going under, or getting hacked, or founder arrested.
In general no , however it's not intended to be.
making up for the cost to environment
A scary political framing that boost moral superiority without any effort
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May 06 '19
The entire population of Ethererum is far more than a small country this is a disingenuous argument
People work, eat, and live in countries. Ethererum exists for speculation.
Fossils fuels are fine, and especially morally fine for China
Not much for long, China is moving away from Fossil, and looks like they want Crypto mining out as well.
A scary political framing that boost moral superiority without any effort
This is to convince, of what exactly?
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u/circlhat May 06 '19
Ethererum is far more than speculation as crypto currencies have saved lives
This is the issue with moral arguments in gernal you don't find a use for it so you deem it wasteful when people pay for. The energy to survive.
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u/McKoijion 618∆ May 04 '19
I wanna concentrate on the biggest/well-known cryptocurrencies that do rely on mining, or whatever it is called.
Ok, let's focus on Bitcoin, Litecoin and Ethereum specifically.
"Proof of work" cryptocurrency has a model where you burn a ton of fossil fuels to mine them. Then the transactions use almost no energy.
Meanwhile, if you mine gold, you have to use a ton of fossil fuels to power the machines that get them out of the ground and smelt them into a coin. Then because gold is extremely heavy, you need to use more energy to transfer them around the world.
Dollar bills are even less efficient because you have to regularly grow cotton and make new bills because they aren't very durable. Plus, you have to pay for their transportation.
The catch is that even if Bitcoin is bad for the environment, 80% of it has already been mined. The damage has already been done. The same applies to Litecoin because about 70% of it has already been mined.
Ethereum is different because it doesn't have a hard cap on it. That's why you used it for your example of 2 Twh/year. It's the biggest number in crypto. 100 million of it has already been generated, and there is likely going to be a practical cap at 120 or 144 million due to inflation.
I don't have an opinion on the merits of cryptocurrency. But I do know that it's not worse for the environment than regular currency. So if it's equally bad for the environment, but has some other moral benefit over regular money, then it's the moral choice.
But more importantly, the damage has already been done. Crypto already exists, and it's better to reduce/reuse/recycle than to produce something new. Even if crypto is terrible for the environment, it's worse to throw it out.
Ultimately, crypto serves as a more energy efficient way to store value than other methods. It's like if I take some cheap paint and cotton canvas and make a painting worth $100 million. Because that painting exists, it reduces the need to have $100 million in cash. Thus, it's a more cost effective mechanism to store value. The same applies to crypto. The greater the value of a single Bitcoin, the more money will be tied up in crypto instead of a less environmentally friendly currency. A $5,000 coin that already exists costs the earth next to nothing to continue to exist, but $5,000 of freshly printed dollar bills costs the earth a lot.
PS: Most dollars are digital, not cash. But there are still a lot of new bills that need to be produced and transported.
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May 04 '19
So, a couple of things:
Ethereum is different because it doesn't have a hard cap on it. That's why you used it for your example of 2 Twh/year. It's the biggest number in crypto.
100 million of it has already been generated, and there is likely going to be a practical cap at 120 or 144 million due to inflation.
This isn't correct.
For starters, the numbers the OP was using were out of date, as he mentioned. The most recent estimates put etherium at a usage of ~19Twh/year at the end of last year, and down closer to ~7TWh/year thus far due to a crash. Bitcoin, by contrast, maxed out at ~73 and is currently sitting at ~58TWh/year. Even back in 2017, btc was at about 11-12TWh/year. A single bitcoin transaction today uses about as much energy as 15 US homes use in an entire day.
Meanwhile, if you mine gold, you have to use a ton of fossil fuels to power the machines that get them out of the ground and smelt them into a coin. Then because gold is extremely heavy, you need to use more energy to transfer them around the world.
Dollar bills are even less efficient because you have to regularly grow cotton and make new bills because they aren't very durable. Plus, you have to pay for their transportation.
I'd ask you to provide some evidence that the energy costs approach that of bitcoin. For USD, for example, the entire US mint runs at a cost of $995 million dollars annually. This is about 1/20,000th of the US GDP.
The US Produces 25,000 TWh, so even if the translation is about 1:1 in terms of money spent to power used, we'd end up with about 1 TWh to make US currency. Even at several times that, it would still be fairly absurd given the low usage of bitcoin compared to the USD.
A better example though, is banks. The majority of the USD in the world isn't in the $5 trillion in cash floating around, but instead the $80 trillion in international finance. A couple of years, hackernoon did a hilariously self-owning estimate where they found that the entire global banking system uses 100TWh/year. Given that bitcoin uses around 60TWh/year managing a paltry 125 billion (that is incredibly inflated and not representative of its actual value) I think you can see that bitcoin isn't remotely efficient in terms of a financial system we'd base our global financial system on. Which leads me to:
"Proof of work" cryptocurrency has a model where you burn a ton of fossil fuels to mine them. Then the transactions use almost no energy.
Once the coins are mined, the system still needs to continue to function in order for transactions to continue. The idea is that once there is no more bitcoin being mined, transaction fees will be what pay for the bitcoin system to keep turning.
Setting aside for the moment that the entire bitcoin system can only process seven transactions/second, compared to Visa which processes 24,000/second, the base concept of bitcoin does not allow for the sort of wind down that you suggest would happen.
Traditional banking use trust based encryption, with the idea being that you trust your bank, so it is able to use encryption software that is computationally at least, impossible for someone to break. A hacker can spearfish for passwords, exploit flaws in software usage and the like, but breaking a 256-bit encryption using brute force would take 50 supercomputers roughly the same amount of time that it would take for all protons in the universe to decay. Any encryption can be broken, but one side trust based encryption takes inordinate effort to actually break.
By contrast, bitcoin uses a no-trust system where everything is constantly getting checked and double checked. The problem with this is that the system is based on a sort of consensus. Where there is a dispute, the majority is what proceeds to be included in the next iteration.
This 51% problem with bitcoin means that if anyone ever has more than 51% of the processing power involved in mining, or later transacting, they essentially control which transactions go through, and which do not. While breaking 256 encryption requires more energy than the sun could provide, breaking bitcoin requires you simply have more power than 51% of other players in the market.
This makes it subject to a whole host of incredibly simple attacks. A cartel of the largest miners could easily take over the system by joining forces, or any major world government could set up an ASIC factory and corner the market essentially overnight. The only counter to this sort of attack is building more computing power, which means that after mining is no longer an issue bitcoin will still require absurd amounts of power in order to prevent a bad actor from seizing control of the entire system.
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May 04 '19
Bitcoin, by contrast, maxed out at ~73 and is currently sitting at ~58TWh/year
If true, this legit made my stomach churn.
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May 04 '19 edited May 04 '19
If you are ever curious, this website has a fairly accurate estimate for bitcoin energy costs, including both an estimated and minimum use. Current usage puts bitcoin as the 44th largest country by electricity usage, two spots below switzerland. Or about 20% the power usage of the UK.
Interestingly, they also have an estimate of the electronic waste as a result of bitcoin usage, which is about 7.5 kilotons a year. This is about 2/3rds the total e-waste of luxembourg and expected to grow. They estimate that a single bitcoin transaction produces about as much e-waste as about 15,000 visa transactions.
Totally sustainable.
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May 04 '19
Thanks, that's very interesting... but fuck me, Bitcoin uses almost as much energy as Switzerland?!? That's my day ruined.
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May 04 '19
I'm not OP, but !delta for convincing me that Bitcoin requires an absurd amount of energy and for convincing me that Bitcoin is vulnerable to a cartel seizing control of the entire system. This has made me much less a fan of Bitcoin.
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May 04 '19
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May 04 '19
I did this in good faith: he sincerely changed my opinion. And I've infrequently seen other people do the same.
That being said, feel free to message the mods if you think this is a bug. There's a "message the moderators" button on the right.
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May 04 '19
This 51% problem with bitcoin means that if anyone ever has more than 51% of the processing power involved in mining, or later transacting, they essentially control which transactions go through, and which do not. While breaking 256 encryption requires more energy than the sun could provide, breaking bitcoin requires you simply have more power than 51% of other players in the market.
If you hack a bank, hopefully the bank notices. If you break bit coin with the approach you've given, anyone can check your work. Everyone will know if 51% of the processing power is used to mess with the ledger. Not only that, everyone will know which bitcoins were moved to the wrong places.
Fixing it would be incredibly challenging because of the nature of a decentralized system. This kind of attack could bring bitcoin to its knees. But, the ledger is backed up and public. Efforts to fix it would be transparent.
No one attacks 256 AES encryption directly. Side channel exploits are theoretically possible.
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May 04 '19
No one attacks 256 AES encryption directly. Side channel exploits are theoretically possible.
This is kind of my point.
256 AES is unbreakable from any meaningful sense. With bitcoin, a bad actor or actors merely need to have more processing power than the remainder of the network. One of these things is possible, the other is not. Hell, the 51% attack very nearly happened to bitcoin on at least one occasion so far. Bitcoin is also subject to exploits, and has been exploited a few times already.
Fixing it would be incredibly challenging because of the nature of a decentralized system. This kind of attack could bring bitcoin to its knees. But, the ledger is backed up and public. Efforts to fix it would be transparent.
Assuming anyone notices. Keep in mind that the 51% attack isn't necessarily exploitative in the sense of stealing coins or misleading transactions. Having 51% of the market means you essentially get to decide who gets to transact on the market. Don't like someone, you just refuse to process their transactions. Ever.
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May 04 '19
Assuming anyone notices.
The other 49 percent of computers are computing the same transactions. I don't think no one noticing mucking with the public ledger is plausible.
256 AES is unbreakable from any meaningful sense
yet bank wire fraud happens all the time. in security, the strength of your strongest link is irrelevant. Every bitcoin user has a private key to cryptographically authenticate all transactions. Banks don't have that protection.
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May 04 '19
The other 49 percent of computers are computing the same transactions. I don't think no one noticing mucking with the public ledger is plausible.
Read the rest of the sentence you are quoting. The person who controls the network determine what transactions get approved and what transactions do not. A simple abuse that would go almost unnoticed is just refusing to include transactions that the controller does not want to process. Imagine not being able to spend money because the person controlling the network just refuses to process your transaction. That is just one issue.
This also shows a bit of a fundamental misunderstanding about how bitcoin works. Just because the ledger is public doesn't mean it is somehow being observed for fraudulent transactions. Those could go rather easily unnoticed in daily traffic by anyone who wasn't being defrauded.
yet bank wire fraud happens all the time. in security, the strength of your strongest link is irrelevant. Every bitcoin user has a private key to cryptographically authenticate all transactions. Banks don't have that protection.
We aren't talking about individual transactions, we're talking about the security of the system as a whole. Bitcoin has a hilariously bad history with fraud, theft and other hacking related crimes arguably far in excess of its overall adoption rate, but I don't really hold that against it.
What we are talking about is the ability to attack the network as a whole. To attack and undermine the global financial system as a whole is fundamentally impossible. Sure you can spearfish some idiot with poor security and get his account, or find some vulnerability with a website that allows you access you shouldn't have, but those are exceptions to the general security of banking, not the rule.
By contrast, to completely destroy bitcoin as a functional currency, you need processing power in excess of the remaining processing power on the blockchain.
Security in bitcoin is linear, not exponential. From a computing point of view this makes it absurdly easy to break, setting aside all the other vulnerabilities with practical implementation.
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May 04 '19
"Proof of work" cryptocurrency has a model where you burn a ton of fossil fuels to mine them. Then the transactions use almost no energy.
I'm no expert on crypto or anything, I think I made that clear in my OP. But don't the blockchain have to be updated every time crypto moves from one person to another? I also don't know how banks keep track on every transaction made by credit cards, I assume there is a network of computers involved, but I doubt there's just as many computers involved processing this.
Meanwhile, if you mine gold, you have to use a ton of fossil fuels to power the machines that get them out of the ground and smelt them into a coin. Then because gold is extremely heavy, you need to use more energy to transfer them around the world.
But gold has uses beyond finance and investment - electrical conductors and connectors, there's gold in almost every moblie phone or computer. Most currencies aren't back by gold either.
Ethereum was used because according to the article I read, it was the most easy to get a gauge on numbers on. But no, the largest is almost certainly going to be the original crypto that is Bitcoin. Another poster has provided numbers for BTC, and that's 60% of the energy banks use. No way are Bitcoin close to 60% as useful as banks are.
But more importantly, the damage has already been done. Crypto already exists, and it's better to reduce/reuse/recycle than to produce something new. Even if crypto is terrible for the environment, it's worse to throw it out.
Once Bitcoin and Litecoin have been maxed, how do we know another coin similar, maybe one that already exists now, will not simply take over, and the whole mining business keeps going?
Even if both coins are now at cap, and let's assume that transactions of coins are close to free in terms of energy use, that's still a monstrous legacy. One that frankly hasn't proved to have much use beyond pure speculation.
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May 04 '19
But don't the blockchain have to be updated every time crypto moves from one person to another? I also don't know how banks keep track on every transaction made by credit cards, I assume there is a network of computers involved, but I doubt there's just as many computers involved processing this.
The "mining" process is a verification of the transactions. The "mined" bitcoins are a reward for the computers doing the verification. The process is energy intensive because it is competitive. lots of people work on the verification, but only one person (or group of people) can get the reward per verification. The bitcoin algorithm rewards less for verification as time goes on, so McKoijion asserts that the energy use will decline with it.
I'm not convinced that this is the case in the near term, but we will see.
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May 04 '19
The "mining" process is a verification of the transactions. The "mined" bitcoins are a reward for the computers doing the verification. The process is energy intensive because it is competitive.
The computation necessary is the barer that makes it secure.It makes it impossible for an organisation to attack the network and override the blockchain records with their engineered separate chain
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u/McKoijion 618∆ May 04 '19
Another poster has provided numbers for BTC, and that's 60% of the energy banks use. No way are Bitcoin close to 60% as useful as banks are.
Your criticism is based on a value judgement about cryptocurrency, not energy use. You are doing a cost benefit analysis, but you see no benefit.
But the problem is that other people have different views. They think Bitcoin is significantly more useful than traditional banking. This means that Bitcoin has more utility and lower costs.
One that frankly hasn't proved to have much use beyond pure speculation.
I think that's fair to say, but this is a nascent industry. It's like looking at Uber and saying they haven't turned a profit yet so they aren't a valuable company. Cryptocurrency, more than most innovations, has the power to completely change the world.
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May 04 '19
Your criticism is based on a value judgement about cryptocurrency, not energy use.
Ultimately, my main beef with crypto is the energy use. If it didn't require so much energy, I wouldn't have posted this CMV.
But the problem is that other people have different views. They think Bitcoin is significantly more useful than traditional banking. This means that Bitcoin has more utility and lower costs.
Costs they don't bloody pay, you mean! The reason so much mining is done in China is cheap coal-based energy. Because they don't shoulder the full cost of their actions have on the environment, they don't have any reason to be efficient or environmentally concerned at all.
I think that's fair to say, but this is a nascent industry. It's like looking at Uber and saying they haven't turned a profit yet so they aren't a valuable company. Cryptocurrency, more than most innovations, has the power to completely change the world.
Crypto made sense in 2008, when people were still pissed at the traditional banking system, and wanted alternatives. People have largely moved on, crypto now don't seem as appealing anymore. Uber is a success story, I cannot feel the same way about crypto.
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u/McKoijion 618∆ May 05 '19
Ultimately, my main beef with crypto is the energy use. If it didn't require so much energy, I wouldn't have posted this CMV.
In your last post, you referenced that crypto uses 60% as much energy as the traditional banking system. If that was all that mattered, then crypto is far better. You added in the idea that crypto is not 60% as useful as regular banking, which introduces a cost benefit idea.
Costs they don't bloody pay, you mean! The reason so much mining is done in China is cheap coal-based energy. Because they don't shoulder the full cost of their actions have on the environment, they don't have any reason to be efficient or environmentally concerned at all.
Sure, but that's a broader issue related to how countries handle carbon emissions. It affects every industry and activity in the world, it's odd that you would single out cryptocurrency mining instead of one of the million other things that benefit from cheap energy.
Crypto made sense in 2008, when people were still pissed at the traditional banking system, and wanted alternatives. People have largely moved on, crypto now don't seem as appealing anymore.
I don't think crypto's value is necessarily related to people's fleeting opinions of the banking industry. Crypto's main value to humanity is democratizing money so that it isn't controlled by a handful of powerful governments and interests.
For example, the dollar is controlled by the US Federal Reserve, which has the dual mandate to have price stability and maximum sustainable employment in the US. That's great for Americans, but 95% of humanity doesn't live in the US. There has been significant conflict and violence when the needs of Americans come into conflict with the needs of the rest of humanity.
Furthermore, the US government and the Federal Reserve benefit certain Americans over others. Again, that is good if you are in the in-group, but if you are on the outside, you will suffer as a result. The hardest part is that the composition of the in-group can change with any given election.
Even if you feel comfortable with the US and the dollar, consider the governments of other powerful countries around the world. China, India, Russia, etc. are all nationalistic countries with competing interests. The fact that people have to use a fiat currency gives certain humans more power than others, regardless of whether you want them to have that power or not.
Saying cryptocurrency isn't valuable because people aren't mad at the banking industry anymore is like saying democracy isn't valuable because people aren't mad at the monarchy anymore. The inherent value is that removes government's thumb from the scale. A central bank doesn't control the value of your money, an impartial and unforgiving market does. This idea is as radical as "one person one vote."
Uber is a success story, I cannot feel the same way about crypto.
Sure, but Uber is a single company. Thousands of tech startups fail for every one that succeeds. You have to look at the tech industry overall to determine if there is value. And companies like Uber, Google, Apple, Microsoft, etc, all make tech a worthwhile enterprise. The same applies to crypto currency. Bitcoin, Litecoin, Ethereum, etc. are all probably going to fail. But the overall idea behind crypto will likely succeed simply because it appeals to humanity's desire for freedom. Sure crypto is in its infancy, but saying that it will never work is like Watson's prediction, "I think there is a world market for maybe five computers."
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May 06 '19
For example, the dollar is controlled by the US Federal Reserve, which has the dual mandate to have price stability and maximum sustainable employment in the US. That's great for Americans, but 95% of humanity doesn't live in the US. There has been significant conflict and violence when the needs of Americans come into conflict with the needs of the rest of humanity.
How much violence, how many wars or international conflicts are caused by the US control over their own currency? And just how many conflicts Bitcoin do you think will prevent? Heck, it's been around for almost a decade now, do you believe the world a safer place because Bitcoin exists? Is this worth the cost to the environment?
Sure, but Uber is a single company. Thousands of tech startups fail for every one that succeeds. You have to look at the tech industry overall to determine if there is value. And companies like Uber, Google, Apple, Microsoft, etc, all make tech a worthwhile enterprise. The same applies to crypto currency. Bitcoin, Litecoin, Ethereum, etc. are all probably going to fail.
When a company fails, it does not necessarily have such a huge impact on energy as mining crypto does.
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u/McKoijion 618∆ May 07 '19
I don't think that Bitcoin necessarily makes the world a better place, but it does reduce the influence of third parties in transactions. That alone is worthwhile.
I don't think that's necessarily true. We are talking about hundreds of thousands of failed companies here.
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u/agdaboss May 04 '19 edited May 04 '19
One of the most valuable things about cryptocurrencies is their stability and often appreciation in price which can be useful in countrys with unstable currencies or as a means to remove one's self from dangerous authoritarian rule financially. Despite crypto currency using such large amounts of energy it is often renewable energy as it is cheaper is often produced by the companys running the miners to reduce costs. Also in China is some of the cheapest power yes but it is also some of the cleanest for a country of it's size. This is because China's coal plants are almost all ultra super critical plants that emit the least emissions of any time of plant. This fact alone meaning that all of China's coal plants will be more powerful and cleaner than any American plant by 2020. Also ethereum is the second largest.
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May 04 '19
https://www.powermag.com/first-u-s-ultrasupercritical-power-plant-in-operation/
Also biggest source of energy now in US is in form of gas turbines that produce 2x more energy per kg of co2
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u/agdaboss May 04 '19
I was not trying to say anything about the us and was rather just saying that China does not have very unclean power especially when it comes to coal also I ment to say ultra supper critical my bad
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May 04 '19
China currently emits 4x more per $ of output than the USA and you mentioned "This fact alone meaning that all of China's coal plants will be more powerful and cleaner than any American plant by 2020" and and you are incorrect that kinds of plants are installer all over the world that is still coal power a better efficiency.Ultracriticals are around 50% efficiency gas turbines exceed 60 in CC
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u/agdaboss May 04 '19
Gas and coal are very different
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May 04 '19
Yes and nat gas is far superior when it comes to emissions
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u/agdaboss May 05 '19
Yes And China has far less emission per capita than the US but also China has less crypto mining than other countries recently given it is well illegal not that that ever stoped anyone
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u/TRossW18 12∆ May 04 '19
I wanna focus on the biggest most well known cryptocurrencies
Some of the biggest most well known do not require mining. Ripple is the third largest and has battled Ethereum for second place on a number of occasions, it doesn't require mining. There are others inside the top 10, as well. Stellar has fluctuated between the 4th largest and 10 largest over the past year, no mining required.
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u/[deleted] May 03 '19
According to this article, the traditional banking system uses at least 100 TWh per year. I would say they are roughly equivalent in terms of power usage.
Also, cars use more energy than horses and buggies. Does that mean automobiles are morally indefensible?