eufo wrote:It's an interesting point about the "mining". To my understanding Bitcoins can be created to infinity, but requiring more and more computing power as time goes on. How many barrels of oil, pounds of coal, etc. have been burned to provide the electricity to create these extraneous virtual currencies? Way to go, humanity.
The last time I looked into it was around the time of the
VICE article a couple years ago that stated that mining a bitcoin used as much energy as 1.57 American households a day. Although:
"The actual figure is likely worse, given that a large number of transactions are exchanges and miners moving bitcoins around and other low-value 'dust' transactions," said Matthew Green, a cryptography expert at Johns Hopkins University. "So each transaction where there's an exchange of goods or services happening is really representing even more electricity."
It also doesn't seem likely, considering (if this is still valid information):
Keeping power consumption high in general also makes the network more secure by making it harder for any one entity to gain control. "The right way to think about this is that the energy expenditure provides a level of protection against attacks—it establishes a price floor, currently in the many millions, to launch a 34 percent or 51 percent attack [where an attacker can block transactions and double spend bitcoins as they please]," Emin Gun Sirer, a Cornell professor and blogger at Hacking Distributed, explained in an email.
However, that same level of security could be maintained while allowing for more transactions, he said, shrinking the cost per transaction.
All that needs to happen, then, is to expand the userbase so we have more transactions, right?
Unfortunately for Bitcoin, if user adoption spikes, so will price—and so must power consumption. Bitcoin mining leads to an arms race among miners to grab a slice of the fixed rewards doled out by the network, Stolfi said. The higher the financial rewards, the more miners will invest in powerful equipment to keep up with the competition. The Bitcoin protocol will continue to increase the difficulty of the cryptopuzzles to keep rewards constant, continuing the arms race until the last block is mined.
So... the higher the financial rewards, the more energy use. And the more energy the collective "you" puts in, the more energy required to mine the same amount of coins; a Red Queen Effect. Back in mid-2015, when that article was written, the
bitcoin index was at 226. It was at 4,153 as of Sep 2017, half a year after the
follow-up article on VICE went up.
"Updated calculations with optimistic assumptions show that in a best-case hypothetical, each bitcoin transaction is backed by approximately 90 percent of an American household's daily average electricity consumption. So even though that's still about 3,994 times as energy-intensive as a credit card transaction, things could be getting better since 2015.
Unfortunately, it's more likely that things are getting worse. A new index has recently modeled potential energy costs per transaction as high as 94 kWh, or enough electricity to power 3.17 households for a day. To put it another way,
that's almost enough energy to fully charge the battery of a Tesla Model S P100D, the world's quickest production car, and drive it over 300 miles."
Now, it's gonna take resources to make money, how does bitcoin compare to gold in the resources it takes to "make" it: bitcoin is about 7x more resource-intensive than gold. That's using an "optimistic" number for the energy requirements of bitcoin. Taken from
here. But if a bitcoin is worth $6,800 and an ounce of gold is worth $1,275, maybe you could say that bitcoin is only 1.3x as resource intensive ($673 worth of currency created/barrel of oil vs $910 for gold) using the same numbers?
So all in all, I dunno.