Bitcoin consumes 2nd highest electricity per capita
twitter.comThe tweet makes an assumption that there are 10 million people holding bitcoin, and the tweet goes on to imply that this is actually an overestimate.
The first google result for "how many people hold bitcoins" says that an estimated 46 million Americans own bitcoin. The huge inaccuracy shows the author's bias and kills the credibility of the rest of the thread.
Are you saying "has a Bitcoin wallet" = "own bitcoin"?
Only ~60M households (50%) have an investment account. I'm skeptical that there's a huge portion of households with bitcoin but w/o a traditional investment account. I'm also skeptical that ~80% of people with investment accounts have Bitcoin. Almost everyone I work with and most of my friends and family have an investment account. I only know a couple of people who currently have any Bitcoin. I know a lot of people that at one point owned Bitcoin, though.
I'm not saying either way (as this wasn't specified in the tweet either) - just pointing out the huge discrepancy between easily accessible statistics and the story the author of the tweet is trying to tell. There is a huge assumption being made (10 million people hold bitcoin) and zero justification for that assumption.
It also seems like there is zero justification for you 46M Americans figure.
https://www.buybitcoinworldwide.com/how-many-bitcoin-users/
There might be 46M wallets related to US accounts with Bitcoin in them, but 1 person could own 45M of them (I seriously doubt it, but you get the point).
there are only 18.6 million bitcoins currently mined (upper bound of 21 million which will be asymptotically approached as the difficulty increases) and like 1.8 million of them are missing forever due to lost wallets.
Yep - it seems we're getting deep into "73.6% of statistics are made up on the spot" territory no matter which source we choose :) Which then raises the question - why did the author of the tweet choose 10 million?
> the author of the tweet
I think I see the problem.
Why does anyone treat tweets as though they're academic papers? It's just some rando BSing.
where did you get the 60M households from and why are you counting households? Everyone in my family has an investment account, so you should be looking at per individual/capita which is closer to ~150 million. So the number of bitcoin holder is significantly higher even if you consider 20% of 150 million.
That studies claims that 1 in 5 American adults hold BTC. I'm ... highly skeptical ... of that.
Then I look and see that it was a small sample sized survey of higher income individuals, and was commissioned by an "alternative investments firm" who wants to tout Bitcoin annuities and life insurance.
Since we're speaking of bias, after all...
Wow. Ok, where to start.
For one, this is why reading articles and doing your own research (DYOR) is so important. That headline, which is attributed to NYDIG, a crypto proprietor, isn’t actually sourced anywhere else. Gemini, the Winklevii crypto exchange, places the number substantially lower.
Given that Coinbase has had a maximum of 8.8 million monthly active users, which is going to put us within spitting distance of the true number, suggests the true figure is much much lower.
Additionally, speculating on bitcoin’s price on an exchange does not mean you’re utilizing the network (hell, you don’t even need actual bitcoin to do this, futures will do). But this is what the overwhelming majority of people do with bitcoin.
So the real question is how many people use the bitcoin network to transfer bitcoins. This is what POW enables. Do I believe that 10m are sending bitcoin to each other? No fucking way. Much much lower.
So yeah, 10m seems conservative even if the assumption is poorly worded (network users vs coin holders).
The first result is a survey done by a firm dedicated to Bitcoin that only surveyed people making $50k or higher. It's possible that 46m number is correct, but I wouldn't make the assumption that it's anywhere close to accurate.
Agreed! Also consider that the first result is only meant to represent bitcoin owners in a country that makes up 4.6% of the world population.
Besides the assumption about the number of holders, it's not clear how a holder contributes individually to power consumption. What if you own a wallet and don't do transactions? What if you're "hosting" it on a publicly traded company's servers?
In my understanding, there are many stakeholders when it's about bitcoin technology. Be it miners, traders, holders, exchanges... BTC is not solely a common legal entity (like: country, company) nor a widespread regular resource (as: oil, gas, water). It's more like the Internet; another protocol to exchange information(+value). Then, who is going to fairly assess the overall energy consumption of The Internet? Thus, the logic followed in that assertion is incredibly hard to understand (but unfortunately popular nowadays).
On the other hand, the vast majority of anyone holding any bitcoin are not making transactions, so the electricity per person using bitcoin over any medium sized window is probably vastly higher.
For example, in Jan 23 million bitcoin wallets had transactions. Since many actors hold multiple wallets, this would imply not so many active bitcoin users. [1]
Per capita could mean anyone who has ever touched it in any way, or could mean someone who actually uses it reasonably often.
[1] https://decrypt.co/56188/bitcoin-hit-record-number-of-22-3-m...
Do you think that between a third and half of US households have people holding significant amounts of bitcoin?
Stop ranking things with arbitrary categories! It's meaningless! I'll bet there's some aluminium smelter that has a far higher "per capita" electricity use than his bitcoin calculation if you only count the workers there as the population. Or how about the category "cooks" or "welders" who have high personal electricity usage?
The other amazing thing in that tweet is that Norway uses more energy per capita than the next three countries combined? Double the USA? What is the explanation there?
I was curious too. Quick Googling shows this breakdown of energy usage by sector and source: https://energifaktanorge.no/en/norsk-energibruk/energibruken...
The Tweet is specifically about electricity (kWh). It appears Norway uses mostly electricity in applications where other countries might use more natural gas (heating). This is likely because Norway has plentiful clean hydroelectric electricity, so they export their natural gas instead of burning it.
This inflates their electricity consumption numbers but given the mostly hydroelectric source and reduced fossil fuel burning it’s actually a net win.
Is there a way to differentiate clean hydro and dirty hydro? In the US the most recent "green" standards exclude hydroelectricity as renewable energy.
The only truly green energy is the energy you don't use. All electric is dirty to some degree. Hyrdo is cleaner than almost anything else, but not a clean as not using it at all. On top of that "clean" is not a very well defined metric. Carbon emissions are not the only thing to consider.
The exclusion of hydro from "green" is of tactical nature. It's mature technology and without spectacular learning curves.
Really? That seems dumb. Have any references for why they made this decision?
If you want to be nice to the environment, damming (damning?) rivers would intuitively seem like a bad thing for wildlife.
I don't have the details, but when my company went to purchase RECs for 2021 we were told that hydro is no longer considered to be in the level of REC we were targeting (extra green something or other). So the cost for this year was much higher than 2020.
Dumb or not, hydroelectric has its own ecological problems and as the dams near the and of life, the costs associated with that will be most likely "externalized"
Norway is high up but not the top of the per capita list that Wikipedia uses: https://en.wikipedia.org/wiki/List_of_countries_by_electrici...
Iceland is small but has some power-hungry industries (that's the point, to produce Aluminum with cheap power), influencing their total.
Could it be a lot if electric heating instead of fossil fuels? Pure guess.
Norway's cold and rich?
99% is renewable from hydro power. I would say they reached their goal.
I don't know what this post is suppose to prove. You can say the same to the top 10million richest people. How much resources do they actually use in the world? They have the ability to use almost all of it.
I wonder what the energy consumption is from things like video games and brainless media (tiktok, mindless YT videos, etc).
Well, give an estimate. Sounds like a Fermi problem.
> It's not that other solutions are better either. We really gotta level up! Source: https://rdcu.be/cxtR7
Well, showing a logarithmic graph is a deceptive way of comparing things.
The 10 million users is unknowable. But we have a upper bound of 74million UTXOs so it is at most 74M on chain. With custody like CB and RH, I suspect it’s 2 or 3x that on top. I hear “200M Bitcoin users in 2021” which may be closer to the truth. https://www.blockchain.com/charts/utxo-count
Right now very few people are actually using Bitcoin for everyday transactions, and yet still the carbon footprint rivals many large countries. If this became the world’s primary currency (as many crypto fans seem to want) it would increase our total carbon footprint by multiple orders of magnitude.
I do not see many people in the crypto community approaching this with the deadly seriousness it deserves. Most conversations seem to devolve into:
- wishcasting about how energy is produced: “There are a whole bunch of miners in South America running on hydro!” This ignores that we are decades away at least from a solarpunk world where energy isn’t a zero-sum game, the hydro energy being used by miners just means the people in nearby cities have to resort to fossil fuels.
- wishcasting about Proof-of-Stake: “We could just switch to this and the carbon problems go away!” I admit it would be great if this happened, but No large coins use it, and I’ll believe Ethereum when I see it. Proof-of-Stake also has downsides that some crypto people won’t accept, so by their own admission it’s not credibly considered an option (certainly not for Bitcoin).
- wishcasting about carbon offsets: “We can buy our way out!” The recent California wildfires have burned through a lot of the trees planted as “carbon offsets”, releasing their carbon back into the atmosphere. Offsets were a neat idea, but they don’t seem to have panned out well, and I have yet to hear a credible case that carbon capture can ramp up fast enough to match crypto’s growing carbon footprint.
- whataboutism: “You ride planes don’t you? Those have huge carbon footprints!” I have yet to hear a compelling argument that a Planes+Bitcoin world would have a smaller carbon footprint than the current Planes+Mastercard world. And no one is talking about Bitcoin making planes go away.
I’d love to hear a clear and credulous case for how we get out of this problem, but I have yet to hear one from the crypto community. If the crypto community won’t take this seriously and propose real solutions, people from outside the crypto community will come up with solutions that will involve banning crypto.
If the cost of electricity rose 100% now, the kwh used to mine bitcoin would drop correspondingly.
IOW, Bitcoin isn't a scheme to destroy the world by exhausting energy or destroying the planet, it's just a bunch of people who want distributed consensus and they're willing to pay for it and you can't fathom why. You don't complain about aluminum fiends or anybody else spending money and potentially exploiting carbon externalities, ask yourself why not.
If you care about the environment so much then impose pollution controls rather than singling out one particular use you don't understand.
I mean yeah, I’d love to propose a worldwide carbon tax and solve the root problem here! But that seems unlikely to happen on a short timescale, and without it we’ll see coal plants that were driven out of business by solar’s cheapness re-open now that there’s all this extra demand for energy (and solar isn’t keeping pace).
And don’t tell me what I don’t complain about ;) I’m plenty concerned with other sources of carbon emissions too.
As for the rest: I feel like another bad trope I see in these debates is the “you just don’t get it. Enjoy your irrelevance” thing. If crypto is misunderstood, then explain it. If there’s something people like me aren’t getting, help us get it. The burden of proof is on crypto-boosters to demonstrate why this is worth it and what the actual endgame here is.
Except exponential scarcity is built in, we're not near the end yet, and the scarcity is causing exponential growth in energy expenditure, carbon release, and heat. Bitcoin would be the perfect scheme to destroy the world.
Scarcity is built in, yes .. but block reward halving is built in as well.
Now if there were a time to come, when lightning network allowed wide adoption of bitcoin as an actual payment system ... and the speculation on ever rising price were obsolete, because the price was more or less stable ... then the limited mining rewards would put a stop to exponential growth in energy expenditure.
Where do I get it wrong? (Serious question)
The supply dictates the price. Thought experiment:
Imagine any item with a certain amount of demand. Now cut the supply of that good in half. What happens to the price?
If the supply gets cut in half, then cut in half again, and again, what happens? If we accept that the mining reward is the "supply" then we can see that it should cause continual increases.
As for the already-emitted supply, you can essentially ignore it because of self-interest. Seeing the effect of diminishing supply and unlike miners, not needing immediate funds to buy new mining hardware to stay competitive, for currency hodlers, HODLing is the rational strategy. So holders aren't really part of the supply equation, hence the "store of value" narrative.
So you've got a dwindling supply flow, that causes higher prices, which, because of built in competition, guarantees that the blocks will go to whoever is willing to expend the most energy to get them, which is a ceiling only provided by the current price, which is ever driven higher by the increasing exponential scarcity of the halving block rewards.
Essentially, this scheme ends with the heat death of our planet, and unlike climate change, green energy might not be able to make a dent in time.
The halvening stops in 2140, if I remember right. Humans intuitively don't understand exponential growth well, but if the same path continues, the energy growth (halvening = price doubling)
1 = Today = ARGENTINA's energy usage
2,4,8,16,32,64,128,256,512,1024,2048
In 40 years, 2048 times that. And it just goes up from there. Now, if you're thinking, that's more than the world produces, you're right. But what happens if it is even half, or 1/10th as bad? Still nothing that leaves us a habitable planet, because the heat and carbon from mining will drive climate change past the brink.
> Imagine any item with a certain amount of demand. Now cut the supply of that good in half. What happens to the price?
IMO the assumption/premise here doesn't describe the situation ("bitcoin" or more broadly "currency") in a precise enough way to make this a useful thought experiment.
Ordinary people don't really demand money per se. They work or sell goods/services and get paid money for that and they spend money to get other goods/services in return. There's no demand for money itself, it's just a means of exchange and value storage. Now of course, everyone would like to have a little more of this "item", but that's not what demand is, really. Or would you also say there is demand for USD and if the FED doesn't meet this demand by issuing more USD then the price for USD increases? I'd say that's just deflation due to the supply of goods having increased (in a growing economy) in comparison to the currency.
> So you've got a dwindling supply flow, that causes higher prices, ...
Yep, prices are going to rise ... but as with most things in the observable world there'll likely be some kind of dynamic equilibrium. Let the price rise to 1M and combine that with the fact that even HODLers won't live forever (to wait for even higher prices) and you'll see many of them buy actual goods/services with their btc ... and what does that mean? Yep, there you have your supply and circulation of btc. People have real life needs and can't just wait for deflation to enable them to buy two new fridges in a year instead of one right now when the old one went silent. Let the price rise to 10M and you'll see even more HODLers become buyers .. yes, there are some greedy HODLers out there (who probably prefer dreaming about what they can buy in the future over buying something now), but still, they will spend some and thus slow down the theoretically exponential price curve.
So no, I'm absolutely convinced that the price won't develop exponentially over the long term. Exponential price increase equates exponentially increased incentive to spend .. which is essentially direct negative feedback which leads to some sort of equilibrium. And I strongly doubt that this simple mechanism is the only negative feedback mechanism for the price of bitcoin.
Yes, bitcoin as a currency would have a deflationary nature. Which should mean that it nudges people to postpone purchases a little bit into the future rather than spend as quickly as possible .. which to me sounds much more like reasonable economic behaviour (from a sustainability point of view) in light of the current planetary environmental situation, compared to a monetary system that incentivises putting money back into the economy as quickly as possible.
Ultimately, many aspects of society will probably function as a negative feedback loop for the price of bitcoin, since bitcoin isn't the only use for energy. It competes with other uses that are much closer to what people actually really need and can't do without. Like riding a train or using an electrical stove. People aren't going to stop riding trains because they could use the energy to mine bitcoin instead.
No, the exponential scheme would IMO only apply in some very limited economic model where all these real world negative feedback effects were left out.
Clearly, the outcome you describe (consuming 1/10 of the world's energy supply) is inacceptable. But since this outcome is based upon assumptions that (IMO) don't adequately reflect reality, it's not valuable for assessing whether bitcoin might be useful enough to legitimize its energy consumption.
Forgive me if this is a dumb comment, but my understanding is that bitcoin's footprint is largely due to mining, correct? But bitcoin itself is considered an asset (in the US, at least). So in theory, it's possible to just trade bitcoins off-chain (either on another blockchain or just using boring centralized tech) without necessarily incurring a corresponding increase in mining-related costs, right?
IIRC Polkadot staking has a 28 day minimum unstaking cool-off period, yet one can stake/unstake instantaneously in Kraken, so I'm led to believe that off-chain transactions must already happen to at least some extent.
Am I missing something?
> So in theory, it's possible to just trade bitcoins off-chain (either on another blockchain or just using boring centralized tech) without necessarily incurring a corresponding increase in mining-related costs, right?
The mining-related costs are mostly unrelated to whether the bitcoins are traded on-chain or off-chain. The mining-related costs are more directly related to the price of bitcoin, or rather, how much a miner can earn with the block rewards and transaction fees. By trading bitcoin, even off-chain, you increase the demand for bitcoin, and therefore indirectly increase its price; the only difference is that by trading off-chain, the miners don't receive the transaction fees (which are currently less than 2% of the block rewards).
But if you’re trading bitcoins “off-chain”, doesn’t that mean you’re negating the point of a blockchain-based currency?
Yes, but for my purposes as a layperson using a currency, I'm choosing to trust a system that is opaque to me anyways (be it a bank/exchange/other financial institution vs a validator pool). One could argue, for example, that anti-fraud mechanisms in off-chain systems don't have a on-chain counterpart, despite being a desirable feature, so IMHO, if the argument goes that crypto can't do things on-chain that regular currencies can, it seems most feasible to just treat them as digital assets to be tradeable over existing centralized systems, no?
Based on screenshots posted to an unverified twitter account? Why would this get upvotes?
The source is in the very next tweet.
https://link.springer.com/epdf/10.1007/s12599-020-00656-x?sh...
From the conclusion to that link:
...we found that they do not pose a large threat to the climate, mainly because the energy consumption of PoW blockchains does not increase substantially when they process more transactions.
The only meaningful comparison is to the energy usage of the legacy banking system. Banks have a lot of data centers, office space, employees who drive to work etc.
The banking system finances all commercial activity, it’s essential to civilization.
BTC is not.
(DeFi is used to speculate on crypto prices with leverage, which is also not essential)
This whole thing is a racket. Bitcoin's actual market value is entirely a function of its' utility in facilitating cybercrime payments. There is precisely zero actual use for it beyond that. And now that all the biggest names on Wall Street are getting a piece of the pie, we can be guaranteed it's not going anywhere.
> There is precisely zero actual use for it beyond that
I was staying in a hotel in Nepal around 10 years ago. I was sharing a room with someone I met. I paid the hotel, and my roommate paid me in bitcoin. It was pretty convenient considering my home currency is USD, his was EUR, and the local currency was rupees.
Anyway, as far as I'm aware there wasn't any cybercrime taking place that day :)
Good. I want to incentivize the progression of humanity to a kardashev type 1 civilization and beyond.
It would be a neat trick to let Bitcoin energy consumption grow till it was more than half of global energy consumption while ramping up carbon taxes, then regulate it into oblivion overnight. Boom, instant massive energy surplus!
Bitcoin is one of the few energy sinks where carbon-producing power sources are not economically optimal. Because Bitcoin facilities have constant 24/7 demand at a pretty stable price floor, it actually makes sense to use energy sources like geothermal and nuclear for Bitcoin where it wouldn’t make much sense for industrial or residential generation.
Even if that's your goal, wasting electricity on Bitcoin might not be the optimal route to getting there...
Bitcoin really feels like a paperclip maximizer type situation.
Bitcoin resource consumption is bounded to demand for secure settlement - large, but not excessive. I would expect long-term Bitcoin resource consumption to correspond to less than 1% of human productive output (but probably more than 1% of power generation). How much of human productive capacity is spent on banking right now? Bitcoin will probably consume some fraction of that. It should be a net productivity win (assuming it sticks around).
It’s probably pretty close to optimal. Leaving aside the mischaracterizarion of “waste” (that’s been covered plenty of times), Bitcoin is economically unique in that it provides a guaranteed price floor on power consumption, allowing us to overcome the “bathtub curve”, distribution costs, and other problems associated with novel green energy sources.
Are you really incapable of understanding that bitcoin might not be a waste?
An unfathomable transfer of wealth from normal people to the rich is happening because of the Fed. How? The rich can borrow money from the Fed at near zero rates. They use that money to buy assets. Meanwhile, the government borrows money from the Fed at near zero rates. The government spends the money, inflating the circulating money supply. That causes the value of money to go down.
The rich can repay their loans to the Fed using money that is worth less than when they borrowed it. I.e., borrow $100M in 2021 dollars and repay $100M in cheap 2050 dollars.
This is turning America into a nation of renters, rather than a nation of homeowners.
It's also turning us into a nation of debtors, via the Federal debt, which will become overburdensome soon. We will either default, or the debt will be erased through hyperinflation, making the rich even richer again (as they get the money first and buy assets at the old prices).
Bitcoin fixes this.
And only bitcoin, or something almost exactly like it, can fix this.
The impoverishment of normal people via the banking system is exactly what the Jeffersons of the world were trying to prevent the Hamiltons of the world from doing.
This is pretty much how I interpret what's happening in the US and Europe as well.
Anyone here who can point their finger on any of the above statements and explain why it's wrong?
> Are you really incapable of understanding that bitcoin might not be a waste?
Quite capable of understanding, thank you. I just think you're wrong.
Agree with parent, I think you might not understand what is going on.
At what point would you admit you are wrong? $100K/BTC? $1M/BTC? I will gladly accept that I got it wrong at $0/BTC, hell I’d go as low as $100/BTC. Who is going to be correct?
"Waste" is not disproven by "high price". "Waste" (in this context, at least) would be disproven by bitcoin fixing much of javert's second through fifth paragraphs. My money is on "waste", no matter what the price does.
Yeah see you don’t get it :-) one mans waste is another mans gold. Basically you don’t want to accept others value things differently than yourself, right?
If you "value things differently", that's fine. Some people value bitcoin; some value gold, some value Andy Warhol paintings. And that's fine. "It's differences of opinion that make horse races."
But javert laid out this grand vision of what bitcoin was going to do for us, and it was considerably more than "be a good investment" or "be something that people like". And he implied I was too stupid to understand it, which is... not cool. I understood exactly what he said the case for bitcoin was. I remain skeptical that it's going to achieve that, ever.
And if it doesn't, then... it's a waste in terms of the lofty goals that bitcoin proponents have stated, no matter how people valued it financially.
> And he implied I was too stupid to understand it, which is... not cool
I'm sorry. I don't think you're too stupid.
It's just that at this point, "Bitcoin is a waste of electricity" comes across as trollish behavior. We've all seen that a million times. It's been explained a million times why that arguably isn't the case. So either engage with the actual argument people are having, or don't say anything.
Saying "bitcoin is a waste of electricity" doesn't contribute to the conversation at all anymore. It's the exact equivalent of posting a comment that says "boo bitcoin" or "bitcoin sucks."
So yeah, if you say that, I'm going to poke at you. And then I'm going to give you the actual argument, in case you haven't seen it. As I did.
If you want to get a read on the "Reduce your carbon footprint" camp's success, check out the top selling vehicle in America (1)
Treating this as a "crypto problem" and not a general energy / fuels problem does almost nothing but sell clicks / views / newspapers.
Trying to contribute here though on where we really are in crypto and angles of attack for discussion, vs an alarmist view:
1) BTC maximalists don't care and will argue to the teeth that the energy costs are baked into the economic value of the network. From a purely market argument they're not wrong here. BTCs energy use is "worth it" to a lot of people who truly believe BTC to be a store of value, a hedge against inflation, and a vote for decentralization.
2) Short term companies like Crusoe Energy are working on solutions to onboard "trapped" energy stores to reduce the carbon footprint. The most likely outcome of these efforts is likely not an overall reduced carbon footprint given the continued growth and interest in the overall market. (2)
3) Proof of Stake is much more efficient than Proof of Work (3) but it is unlikely that BTC moves in that direction short term. Or perhaps ever.
(1) https://www.torquenews.com/9539/ford-f-150-continues-its-sal...
(2) https://www.crusoeenergy.com/
(3) https://www.coinbase.com/learn/crypto-basics/what-is-proof-o...
I'm not sure what I'm writing above that isn't objective
I would love to hear responses vs downvotes to the floor
Do you think that we can regulate crypto into lower energy use?
Change hearts and minds?
Objectivity or its lack has very little to do with downvotes on bitcoin threads. These bring out all the would-be authoritarians to impose their will on HN posts in a way they can't impose it on crypto in the real world.
Thank you.
I get the lightning rod component of these threads.
But head-in-the-sand won't get us anywhere.
I've been on HN looks at profile for 13 years now, not going to register a complaint now but makes me sad to have no discourse.
This. I strongly feel that anyone anti-BTC at this point is basically a state boot licker who loves to push for authoritarian policies. It was designed exactly to ignore these authoritarians. Honey badger doesn’t give a shit.
The network is designed to consume all available resources until it achieves financial equilibrium. It produces junk computations and heat. It does this very well. I'm glad its helped some people, but you can talk about 'BTC maximalists' all you like it still doesn't address that bitcoin is fundamentally a huge resource sink.
PoS is more energy efficient, but so is an xls running on a single desktop. The argument is if PoS can replace the security model of PoW. I have been arguing for a long time now it can’t, in fact, those pushing us towards PoS are throwing away everything we have gained in decentralization and censorship resistance with PoW/Bitcoin.