Mastodawn

Martin Seeger Apr 17, 2024

If you do 12 Bitcoin transactions per year, you use a higher amount of energy than we use for a complete family (including: heating, warm water, electricity, car charging) in the same year. We do all via electricity.

From: @tkinias
https://historians.social/@tkinias/112283441665687815

Thanasis Kinias (@[email protected])

I just read that a single Bitcoin transaction requires upwards of 1,000 kW-hr of electricity. That’s like running a small air conditioner 24/7 for a month and a half. Edit: This got way more attention than I expected from an offhand remark; I guess it hit a nerve on here! But I’m going to have to mute this, as it’s taken over my notifications...

Mastodon

Goblin Apr 17, 2024

@masek @tkinias That sounded so ridiculous I did a quick websearch to check the numbers and it checks out. I found values between 800 and 1800 kwh.

How the f*** is this s*** still around??? 🤯

MeltingPenguins 🍉🤠

@goblin @masek @tkinias Because it makes rich people (especially in the graphiccard manufactoring and energy provider sector) richer

Bolt Apr 17, 2024

@meltingpenguins @goblin @masek @[email protected] graphics cards actually aren't often used anymore, due to them being unprofitable. They use dedicated mining rigs designed just to mine BTC.

The main reason they still use the wasteful "Proof of Work" (PoW) mechanism is because Bitcoin 'maximalists' don't like change, and refuse to adapt. It's gotten pretty cultish.

Every other major cryptocurrency uses a mechanism called "Proof of Stake" (PoS) which uses ~99.98% less power. BTC miners refuse to switch.

MeltingPenguins 🍉🤠Apr 17, 2024

@boltx But look which 'market' is now gobbling up graphicchips...

Basically all these things were never about doing anything good. It was just always to make rich people richer at the cost of everyone and everything else.

You wanna have a save, stable currency? Unravel capitalism. And you can't do that if you are buying into something that is ultimately making rich people richer. /shrug

Bolt Apr 17, 2024

@meltingpenguins I don't think these things were "never about doing anything good." If you look at what the vision behind Bitcoin or newer, less outdated chains like Ethereum is, it's certainly quite a good aspiration.

Take power away from corporations and governments to negatively affect the things that affect people.

Of course, there is a lot that now disrespects these original goals, namely PoW defenders, scammers, VC-funded vaporware, etc, but many groups still defend the original vision.

MeltingPenguins 🍉🤠Apr 17, 2024

@boltx why are you sounding to me as if you are trying to sell me on the whole nonsense?

Bolt Apr 17, 2024

@meltingpenguins I'm not trying to 'sell you' on anything. I'm just trying to point out that blockchains were created with the primary purpose of taking power away from centralized entities that created problems for the public.

Quite literally the very first block in the Bitcoin blockchain includes a headline from a newspaper, regarding publicly-funded bank bailouts after deliberate, risky fractional reserve actions taken by banks.

They weren't 'never about doing anything good' as you claim.

Bolt Apr 17, 2024

@meltingpenguins That's not to say that today they're somehow inherently pure, beacons of hope, etc. I'm certainly not saying that, and I can and do dispel that notion whenever it's brought up.

I just think that stating, point blank, that blockchains were never created with any good intent, ignores the fundamental reality behind why they were created in the first place.

MeltingPenguins 🍉🤠Apr 18, 2024

@boltx My train of though is: 'this was created for that, but that requires, at bottom line, giving more power to those you want to take power away from, albeit in a kinda round-about way'.

the intentions might have been good, but the infrastructure they require could never have worked out for the cause.

That's why I said you need to unravel capitalism first. And then I don't think blockchain based stuff would be 'needed' at all.

MeltingPenguins 🍉🤠Apr 18, 2024

@boltx Actually let me rephrase this, cause I think I'm sounding far more aggressive than intended.

Blockchain currency was an idea meant to solve a problem that stems from capitalism. But due to how the blockchain and all functions it only benefits capitalism.

So the idea might have been good, but it isn't what's needed to solve the issue, regardless what model it might be using.

Bolt Apr 18, 2024

@meltingpenguins That's definitely an interesting take! Could you elaborate on how exactly blockchains give more power to those we want to take power from?

Because at least from what I've seen, the infrastructure underpinning it is already more globally distributed and cryptographically secure than any financial institution I've seen, the access it provides to under-served communities is massive, and the mechanisms (like PoS + Slashing) remove wealthy actors' power if they do something bad.

Bolt Apr 18, 2024

@meltingpenguins
I can definitely see how a system based around such financial mechanisms could be considered as benefiting capitalism, (and most of the heavily venture capital funded projects especially do try to push it that way) but my personal take on it is that it's a good stepping stone to more just socioeconomic systems in the future.

Bolt Apr 18, 2024

@meltingpenguins (in my opinion) It's hard to throw out capitalism or dismantle it directly, but it's easier to, over time, convert its infrastructure to one that's controlled by everyone, rather than a few, then replace the system with a more just one, aligned with the public good.

MeltingPenguins 🍉🤠Apr 18, 2024

@boltx The best cause of action would be to either do away with money as a whole, or start treating money as what it was invented to be:
Placeholders for goods and services meant to make trading easier.

Helping each other out simply because it's the right thing to do is a thing that needs to be done, but I'd argue money can help making that easier.

but not if money is treated as measurement of someone's achievements/status/etc

Bolt Apr 19, 2024

@meltingpenguins I 100% agree that money should be used just as a placeholder, or say, a liquid representation for the local exchange of goods and services. Combine that with mutual aid and generally just helping your neighbors, and you get a pretty damn good society.

I just personally don't think we can easily get there without 'stepping stones,' so to speak, to aid in the process of migrating to a better system altogether.

MeltingPenguins 🍉🤠Apr 18, 2024

@boltx you need real money and/or hardware to get more crypto, regardless of model. which means those that already have money can get it easier. and due to the nature of it, no one really doublechecks how many wallets are connected etc. cue a lot of laundering, scams etc.

also, here's the most important part:
It's all digital without a papertrail. any form of currency that completely fails the moment you don't have good internet, or internet at all is not a great thing at all. (1/2)

MeltingPenguins 🍉🤠Apr 18, 2024

@boltx take paypal: paypal leaves a papertrail. meaning that, yes, if the internet itself should fail there's still recoverable documents that tell you there's X amount of money in your possession.

crypto does not have that.

Thus, no, with financial stuff you can't just 'give control to everyone' without unraveling capitalism first.

And as said, once that happens these models would be obsolute immediately.

It is what it is.

Bolt Apr 19, 2024

@meltingpenguins True on the point that those with money can get crypto easier. Crypto doesn't change the existing distribution of capital.

On your next point though, I'd say it's the opposite. Due to the nature of blockchains, more people keep track of what goes on than in traditional finance. Fraud is exposed faster, and more thoroughly, and even independent investigators with no privileged access, such as one by the pseudonym of ZachXBT, have been contacted by the U.S. government for help.

Bolt Apr 19, 2024

@meltingpenguins The rate of money laundering and general fraudulent activity in crypto is, on average, quite low, usually under 1%, compared to around 5% in traditional finance. (See: https://www.unodc.org/unodc/en/money-laundering/overview.html & https://www.chainalysis.com/blog/2022-crypto-crime-report-preview-cryptocurrency-money-laundering/)

On top of that, since crypto is more traceable, it's likely the % for traditional finance is even higher.

Overview

Overview

United Nations : Office on Drugs and Crime

Bolt Apr 19, 2024

@meltingpenguins As for your papertrail point, I'm not sure if I'm misinterpreting what you're trying to get across, but the availability of your transaction data is guaranteed to be much higher for a blockchain than it is for a company like PayPal.

Bolt Apr 19, 2024

@meltingpenguins For instance, the Ethereum blockchain has an estimated 11.5k+ "nodes" currently active, all of which store a full copy of every transaction that ever existed on Ethereum. As long as even a single person keeps a copy, you can cryptographically verify that it is accurate. That count doesn't include external databases, cloud backups, internal corporate nodes, etc, that could also be storing data.

Bolt Apr 19, 2024

@meltingpenguins I'm willing to bet PayPal doesn't keep tens of thousands of backups scattered globally with every single transaction archived in them.

On your point regarding internet, it's definitely fair to say that crypto not working without internet is a flaw. However, there are some people working on offline rails, which, while still in their infancy, are looking promising, and could provide similar trust assumptions to cash when transferring money.

Bolt Apr 19, 2024

@meltingpenguins
And to bring it back to your original point regarding those who already have lots of capital being able to acquire more crypto, mechanisms like Slashing built into the consensus mechanisms that run blockchains like Ethereum would prevent those people from actually abusing their power.

Bolt Apr 19, 2024

@meltingpenguins Let's say they had 90 billion dollars, out of 100 billion total dollars securing the network. (with the other 10 billion being from normal everyday people) If that rich person tried to, say, forge a transaction, change the network rules, or wipe someone's balance, all the other people's machines would delete their 90 billion dollars from existence, and continue operating normally.

Bolt Apr 19, 2024

@meltingpenguins The only way to change those rules is to get the vast majority of network participants to agree to update their machine's code, which is far more democratic than say, the CEO of a bank being capable of banning a user, freezing funds, changing interest rates, etc.

Bolt Apr 19, 2024

@meltingpenguins It's not perfect, but it's substantially better than traditional finance at resisting outside pressure, staying secure and keeping backups, speedily processing transactions, and dividing control more across its userbase.

(Sorry for the extremely long tangent, but I like to try and fully explain my views as best I can, and my instance's character limit is a bit low 😅)

bojkotiMalbona Apr 17, 2024

@boltx @meltingpenguins @goblin @masek @tkinias To be clear, the problem is not wholly PoW, but specifically *old* PoW tech. From a scientific study¹:

“We illustrate that these kinds of blockchain technology already consume several orders of magnitude less energy than the first generation PoW blockchains and that these blockchains, thus, largely mitigate the energy problem.”

① https://doi.org/10.1007/s12599-020-00656-x

The Energy Consumption of Blockchain Technology: Beyond Myth - Business & Information Systems Engineering

When talking about blockchain technology in academia, business, and society, frequently generalizations are still heared about its – supposedly inherent – enormous energy consumption. This perception inevitably raises concerns about the further adoption of blockchain technology, a fact that inhibits rapid uptake of what is widely considered to be a groundbreaking and disruptive innovation. However, blockchain technology is far from homogeneous, meaning that blanket statements about its energy consumption should be reviewed with care. The article is meant to bring clarity to the topic in a holistic fashion, looking beyond claims regarding the energy consumption of Bitcoin, which have, so far, dominated the discussion.

SpringerLink

Bolt Apr 17, 2024

@bojkotiMalbona @meltingpenguins @goblin @masek @[email protected] While the paper is certainly interesting, I don't think it's quite a good defense of new PoW chains.

As much as new PoW mechanisms might decrease energy use compared to Bitcoin's traditional PoW mechanics, a lot of that can be chalked up to them simply having less fee revenue, and thus less incentive to run more miners.

The graph in the paper should be Fee Revenue vs Energy, not Market Cap.

Bolt Apr 17, 2024

@bojkotiMalbona @meltingpenguins @goblin @masek @[email protected]
And on top of that, look at Ethereum. Sure, these new PoW chains might be more efficient than Bitcoin, but when Ethereum is over 99.9% more energy efficient, can those minor efficiency improvements for new PoW chains really compete?

bojkotiMalbona Apr 17, 2024

@boltx The paper concluded a difference of a few orders of magnitude, which would not be minor. The new PoW algos would not be able to compete with PoS on energy, but PoS cannot compete on other factors like balance of power and requires a bit more trust iirc. So on a PoS chain, wouldn’t you have people hoarding large amounts of coins and just sitting on them? That seems to drive the currency to be used as an investment when really we want it to be treated like a currency.

They both have their place and the extent of PoW energy demand is always way overblown. It’s not a significant climate factor.

OTOH, banks invest in fossil fuels with reckless disregard. The #WarOnCrypto and #WarOnCash together culminate into Bill Gates’ wet dream: forced banking, which IMO would be the greatest dystopia. We may not be able to stop the elimination of cash but should cling to PoS and PoW to the extent needed to avoid forced banking.

Bolt Apr 17, 2024

@bojkotiMalbona Based on my understanding of PoS networks, (assuming they have implemented Slashing mechanisms) PoS is actually more competitive on the capital efficiency, security, distribution, and power balance scales. If a bad actor has billions of dollars, but acts maliciously, every honest node will not follow their chain, and will follow the one where the honest minority slashes them. In PoW, you have no way to take away the attacker's machines.

Bolt Apr 17, 2024

@bojkotiMalbona As for the hoarding aspect, that's why automatic rate adjustments happen. For instance, Ethereum's staking rate continually declines as more ETH is staked, so eventually it makes more sense to use ETH as money, than it does to earn a fraction of a percent risk-free interest. There's always a limit, naturally hit through supply and demand.

Bolt Apr 17, 2024

@bojkotiMalbona PoW energy use is definitely overblown a lot, but it's still significant, especially when considering the scale PoW chains like Bitcoin aspire to have in the future.

Good point on banks funding fossil fuels though. They definitely do exacerbate the crisis.

bojkotiMalbona Apr 17, 2024

@boltx I’m not sure why fee revenue would even be a factor. There is a finite number of coins to mine and the (increasing) energy cost of mining each of them. That energy cost is fixed. Taking fees into account just muddies the waters AFAICT.

Many irrelevant factors influence the fees such as popularity/demand. Low fees would lower the /rate/ of mining, not the number of computations or the complexity of the work.

Bolt Apr 17, 2024

@bojkotiMalbona Fee revenue would be a major factor, because fees also provide incentives, on top of newly minted coins.

Fees are a representation of demand, so low demand = low fees = lower rewards for miners = less mining/hashpower.

And low fees would actually lower the amount of computations & work complexity, as it adjusts based on average block times (see: https://www.coindesk.com/learn/bitcoin-mining-difficulty-everything-you-need-to-know/)

Especially as chains like Bitcoin have halvings, fees become a larger % of rewards, and have more influence.