How much electricity does the world banking system use? (Answer: a whole lot more)
How much of that electricity could be used to simultaneously run the banking system AND turn incredibly ambitious renewable energy project ideas from absurd pipe dreams into economic no brainers? (Answer: none)
But this parallel financial system can also serve a tangible social good, offering an onramp to the financial system for people who would otherwise be left out.
…
Bitcoin could eliminate all these intermediaries, allowing citizens to send digital payments directly to one another, without relying on credit and without incurring multiple settlement fees along the way.
Per what capita? There’s only one global banking system on Earth. That’s what makes it global. There’s only one Bitcoin blockchain, and it’s globally accessible. Trying to subdivide either into arbitrary regions based on geographic or geopolitical borders is meaningless.
How about per ‘people who are actually going to use this shit for day-to-day spending’?
I just got my mom using a password manager and still have to remote in to help her from time to time. And you wanna get her to move to digital cash that, once stolen, is unrecoverable?
You don’t think that the world banking system would use more energy if it quintupled in size? The world banking system uses more energy every time your local credit union installs an ATM at another grocery store.
And that’s why we say that per person or per transaction matters. For the amount of value it provides how much does it use? Bitcoin is worse by a lot even if its primary use was as a currency rather than an investment vehicle
Their math is nonsense because that document compares total energy consumption instead of consumption per transaction. That’s like saying Lamborghinis are the most efficient cars on the road because their summed up fuel consumption is lower than that of all VWs or all Toyotas (or probably even all bicycles).
There.
/edit
I just needed to come back to this comment because that document really makes me irrationally angry. It’s not just that it doesn’t compare energy consumption per transaction, it’s also that especially btc is pretty much the worst offender when it comes to energy per transaction. It’s not just that it consumes more energy if more transactions are scheduled… Once the blocks are full, the users spend horrendous fees to get their transactions through in time, meaning that suddenly it becomes economically viable to spend a lot more on mining to be the one to find the next block with all those precious transaction fees. Btc’s energy footprint literally explodes once the blocks are at capacity - and at that point btc is still orders of magnitude away from visa or banks and their transaction volume. That problem is so bad that other cryptos have written their protocols to automatically increase block size once the volume increases or simply forked away from btc to allow bigger blocks (which was necessary because the miners have absolutely no incentive to increase the block size as it’s obviously in their best interest to earn money with transaction fees). Proof of work crypto is literally the worst offender when it comes to energy efficiency, with high performance computing centres spending incomprehensible amounts of energy to solve the mathematical equivalent of Sudokus, just to be eligible to retrieve the next prize as the first solver of that puzzle with no gain for humanity from all that spent energy whatsoever. It’s as if banks insisted on all transfers being brought to the next bank using a pick up truck that is only allowed to drive in first gear and at max rpm, just because.
And for what? Power to the people? Instead of a handful of banks, the important cryptos are now in the hands of a handful of miners, but without the consumer protection laws that banks have to follow. Great job.
Re: your on chain transactions argument, you’re completely over looking (intentionally?) the fact that day to day transactions don’t need to be on chain. In fact many would argue that they shouldn’t be on chain. Layer 2 protocols can handle all of that.
Just one example scenario could be…
Step 1. Your employer opens a Lightning Network channel to your node (self hosted, or not, your call). This requires one on chain transaction (actually, there are enhancements that allow opening multiple channels in a single transaction, but that’s beyond the scope of this conversation.)
Step 2. Every month, your employer pays you over this channel. No new on chain transactions happen for this.
Step 3. You use the channel to pay your rent/mortage, utility bill, etc. Still, no new on chain transactions.
Step 4. You continue to use the channel to buy groceries, lunch, drinks for friends, a massage, etc. No on chain transactions.
Step 5. Oops, you’ve got a bill that needs to be paid in fiat. What now?!? Use the channel to transfer some Bitcoin to your bank account, where it’s automatically converted into fiat. Pay your bill from there. Still no on chain transactions.
Step 6. Return to step 2. Still no on chain transactions.
…
Step 3,658,423. 6 years later, you leave your job, Your employer closes the channel. Any Bitcoin left on your side of the channel (if any) is sent to an on chain address that you provided in step 1. This requires one more on chain transaction.
Total number of on chain transactions in 6 years and countless payments: 2
In reality, that’s probably not exactly how it would work. For instance, I would quickly just send my entire paycheck back out on the channel to a different LN channel I had open with a reliable node operator so that I wasn’t dependent on my employer keeping their node running over the weekend so I could pick up the tab at the bar. Etc
Regardless, that’s how it could work. There are countless other ways it could work, limited only by the desires and imagination of those setting up their channels, and all allowing for countless transactions over months, years, even decades, to be represented by two small on chain transactions.
Ah, lightning… The dumbest idea ever to happen to bitcoin.
Those channels need to be filled with btc before they work. Who can do that? I certainly can’t do that for 6 years in advance. I’m certain my employer can’t do that for all his employees. You know what players can create large lightning channels? Banks! Why on earth would anyone who likes the idea of btc, with its promise of “your keys, your coins” suddenly go back to a banking system where an arbitrary third party service can just lock your funds because they dislike what you spend your money for? Lightning has been 10 years in the making but the idea hasn’t been picked up and I’m certain it never will. Because not only does the current implementation and user experience suck hard but because it literally copies the banking system that btc came to fight, giving users an experience that has literally no advantage at all compared to PayPal or visa. 10 years and even you are still all “would” and “could” in how you describe it.
If your argument why pow crypto isn’t energy hungry is that you don’t even have to use pow crypto but can just rely on an entirely different tech tacked to it in order to reduce usage of the core tech, fine. I guess it still proves my point. Besides the issue that nobody uses that broken piece of crap, the issue of course remains that there’s still no indication that it’s less energy hungry per transaction than any banking system. Banks are good at one thing, which is managing money. If you think that they’re intentionally wasting terawatthours of energy because of laziness or incompetence you’re mistaken. Distributing it to the users won’t cost less energy and I have no idea where that notion comes from.
And don’t waste ridiculous amounts of electricity.
Like AI?
How much electricity does the world banking system use? (Answer: a whole lot more)
How much of that electricity could be used to simultaneously run the banking system AND turn incredibly ambitious renewable energy project ideas from absurd pipe dreams into economic no brainers? (Answer: none)
It’s also the world banking system for several billion people, and not a few hundred thousand gamblers.
Don’t worry, we only have to deal with the true believers as long as the price is high. Just wait.
https://www.cnbc.com/2023/03/26/bitcoin-is-poised-to-blow-up-africas-86-billion-banking-system.html
Bitcoin is for everybody.
Per capita or in total?
Apples to apples. One global banking system to one global Bitcoin network.
That is the opposite of apples to apples.
Per capita measurements exist for a reason.
Per what capita? There’s only one global banking system on Earth. That’s what makes it global. There’s only one Bitcoin blockchain, and it’s globally accessible. Trying to subdivide either into arbitrary regions based on geographic or geopolitical borders is meaningless.
How about per ‘people who are actually going to use this shit for day-to-day spending’?
I just got my mom using a password manager and still have to remote in to help her from time to time. And you wanna get her to move to digital cash that, once stolen, is unrecoverable?
Get real.
That’s a strong argument against password managers. We probably shouldn’t allow them, since some people are going to find them difficult to use.
ETA: Doubling the number of people using Bitcoin (especially on layer 2 protocols), is not going to remotely double it’s energy usage.
You’d have a point if managing passwords was as central to existing in modern society as being able to use money.
So does that mean that it won’t use appreciably more electricity if it quintuples in size and volume unlike the world banking system?
You don’t think that the world banking system would use more energy if it quintupled in size? The world banking system uses more energy every time your local credit union installs an ATM at another grocery store.
And that’s why we say that per person or per transaction matters. For the amount of value it provides how much does it use? Bitcoin is worse by a lot even if its primary use was as a currency rather than an investment vehicle
Despite having millions of ATMs and banking offices, it uses less energy.
There’s probably more ATMs than Bitcoin users.
The Bitcoin network is absolutely tiny in userbase for the amount of energy they waste.
You have a source on that? Proof of work is notoriously energy hungry… That’s the “work” part.
https://docsend.com/view/adwmdeeyfvqwecj2#
The direct answer to your question starts on page 6, but I recommend starting at the beginning to get the full context.
A crypto mining company is your source for claims that crypto mining companies operate ethically?
Can you refute their math? You asked for a source. That’s the most comprehensive data I could find. I’m happy to look at any better if you’ve got it.
Their math is nonsense because that document compares total energy consumption instead of consumption per transaction. That’s like saying Lamborghinis are the most efficient cars on the road because their summed up fuel consumption is lower than that of all VWs or all Toyotas (or probably even all bicycles).
There.
/edit I just needed to come back to this comment because that document really makes me irrationally angry. It’s not just that it doesn’t compare energy consumption per transaction, it’s also that especially btc is pretty much the worst offender when it comes to energy per transaction. It’s not just that it consumes more energy if more transactions are scheduled… Once the blocks are full, the users spend horrendous fees to get their transactions through in time, meaning that suddenly it becomes economically viable to spend a lot more on mining to be the one to find the next block with all those precious transaction fees. Btc’s energy footprint literally explodes once the blocks are at capacity - and at that point btc is still orders of magnitude away from visa or banks and their transaction volume. That problem is so bad that other cryptos have written their protocols to automatically increase block size once the volume increases or simply forked away from btc to allow bigger blocks (which was necessary because the miners have absolutely no incentive to increase the block size as it’s obviously in their best interest to earn money with transaction fees). Proof of work crypto is literally the worst offender when it comes to energy efficiency, with high performance computing centres spending incomprehensible amounts of energy to solve the mathematical equivalent of Sudokus, just to be eligible to retrieve the next prize as the first solver of that puzzle with no gain for humanity from all that spent energy whatsoever. It’s as if banks insisted on all transfers being brought to the next bank using a pick up truck that is only allowed to drive in first gear and at max rpm, just because.
And for what? Power to the people? Instead of a handful of banks, the important cryptos are now in the hands of a handful of miners, but without the consumer protection laws that banks have to follow. Great job.
Re: your on chain transactions argument, you’re completely over looking (intentionally?) the fact that day to day transactions don’t need to be on chain. In fact many would argue that they shouldn’t be on chain. Layer 2 protocols can handle all of that.
Just one example scenario could be…
Step 1. Your employer opens a Lightning Network channel to your node (self hosted, or not, your call). This requires one on chain transaction (actually, there are enhancements that allow opening multiple channels in a single transaction, but that’s beyond the scope of this conversation.) Step 2. Every month, your employer pays you over this channel. No new on chain transactions happen for this. Step 3. You use the channel to pay your rent/mortage, utility bill, etc. Still, no new on chain transactions. Step 4. You continue to use the channel to buy groceries, lunch, drinks for friends, a massage, etc. No on chain transactions. Step 5. Oops, you’ve got a bill that needs to be paid in fiat. What now?!? Use the channel to transfer some Bitcoin to your bank account, where it’s automatically converted into fiat. Pay your bill from there. Still no on chain transactions. Step 6. Return to step 2. Still no on chain transactions. … Step 3,658,423. 6 years later, you leave your job, Your employer closes the channel. Any Bitcoin left on your side of the channel (if any) is sent to an on chain address that you provided in step 1. This requires one more on chain transaction.
Total number of on chain transactions in 6 years and countless payments: 2
In reality, that’s probably not exactly how it would work. For instance, I would quickly just send my entire paycheck back out on the channel to a different LN channel I had open with a reliable node operator so that I wasn’t dependent on my employer keeping their node running over the weekend so I could pick up the tab at the bar. Etc
Regardless, that’s how it could work. There are countless other ways it could work, limited only by the desires and imagination of those setting up their channels, and all allowing for countless transactions over months, years, even decades, to be represented by two small on chain transactions.
Ah, lightning… The dumbest idea ever to happen to bitcoin.
Those channels need to be filled with btc before they work. Who can do that? I certainly can’t do that for 6 years in advance. I’m certain my employer can’t do that for all his employees. You know what players can create large lightning channels? Banks! Why on earth would anyone who likes the idea of btc, with its promise of “your keys, your coins” suddenly go back to a banking system where an arbitrary third party service can just lock your funds because they dislike what you spend your money for? Lightning has been 10 years in the making but the idea hasn’t been picked up and I’m certain it never will. Because not only does the current implementation and user experience suck hard but because it literally copies the banking system that btc came to fight, giving users an experience that has literally no advantage at all compared to PayPal or visa. 10 years and even you are still all “would” and “could” in how you describe it.
If your argument why pow crypto isn’t energy hungry is that you don’t even have to use pow crypto but can just rely on an entirely different tech tacked to it in order to reduce usage of the core tech, fine. I guess it still proves my point. Besides the issue that nobody uses that broken piece of crap, the issue of course remains that there’s still no indication that it’s less energy hungry per transaction than any banking system. Banks are good at one thing, which is managing money. If you think that they’re intentionally wasting terawatthours of energy because of laziness or incompetence you’re mistaken. Distributing it to the users won’t cost less energy and I have no idea where that notion comes from.