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US government tracking the energy implications of booming bitcoin mining in US.
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This is a classic case of “tech journalism”… If you follow the sources the source of the data and it’s methodology uses the CBECI which the latest update lists a range of 75-384 TWh. (Note that the “2%” listed in the parent article is the global power consumption of the Bitcoin network compared to the US electrical network, aka a bad faith comparison). It explicitly states:
The upper-bound estimate corresponds to the absolute maximum power demand of the Bitcoin network. While useful for providing a quantifiable maximum, it is a purely hypothetical value that is non-viable for various reasons…
Which of course is the estimate that the journalists use for this peice.
There’s also a bunch of likely issues within the methodology as it’s estimate is largely based on the number of ASICs produced; the assumption that “mining nodes (‘miners’) are rational economic agents that only use profitable hardware.” and that any amount profit is sufficient to keep a mining operation ongoing; and many others. It actually does a pretty good job of disclosing a lot of the methodology flaws within the link above.
My goal is just to call out bad/lazy journalism and what I assume is oil/gas distractionary tactics. Electricity is ~38% of US energy consumption and even that maximum bound of 2% when comparing it to the global Bitcoin network is practically negligible when contextualized.
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If you follow the sources the source of the data and it’s methodology uses the CBECI which the latest update lists a range of 75-384 TWh. (Note that the “2%” listed in the parent article is the global power consumption of the Bitcoin network compared to the US electrical network, aka a bad faith comparison)
This is Incorrect. The source for the 2 percent is https://www.eia.gov/todayinenergy/detail.php?id=61364. Which is a government study giving a rage from .6 to 2.3. They arrived at this number by extrapolating the CBECI data to the US, and by investigating individual bitcoin mining facilities.
Electricity is ~38% of US energy consumption
38% is a lot. Also, electricity consumption is 100% of the load on our power grid, so its worth looking into whether the use of electricity is pro-social or anti-social. From my perspective, even the 0.6% figure is far too much electricity to devote to mining bitcoin. We are talking about power use at the order of magnitude of a small state whose sole purpose is to generate profits for a few people.
Its sole purpose is to be a global currency you can send from A to B effortlessly and without relying on trusted intermediaries. It has done that for 15 years, every day, every hour, without a single hour of downtime or hack.
Even if these statistics are perfect, it’s nonsense framing to not put them in context. How does that electrical compare to the electrical burden caused by SWIFT? Western Union? etc. https://endthefud.org has a number of great sources for that
It’s intrinsically designed to be wasteful of energy. A foundational requirement is ‘proof of waste’
Its sole purpose is to be a global currency you can send from A to B effortlessly and without relying on trusted intermediaries.
Perhaps that was the design goal, but it seems that speculation is also a significant (perhaps the larger) use case. I agree that crypto has been great for international money transfer, but it is far more expensive than traditional banks for domestic transfers. It seems that
it’s nonsense framing to not put them in context.
I checked a few of those links, and wasn’t completely convinced. It was full of peoples blogs comparing the costs of running all the brick and mortar banks to crypto. Of course, banks provide more services than saving and transferring money. Perhaps a better comparison would be to the energy use per dollar of the EFT system, or to a proof of stake crypto.
On its face, spending a measurable amount of energy guessing random numbers to satisfy an algorithm is wasteful. This is especially problematic since society subsidizes energy costs with the assumption that people will use it to create value.
As far as I can tell, (please let me know if I’m mistaken) mining Bitcoin does not create very much value since marginal increases in mining does not have a commiserate increase in Bitcoin trade efficiency or security. Marginal increases in mining does put money into the pocket of people doing the mining.
