Kay so let me go over it.
(1) #Bitcoin is not useless, it has utility. Many people, including myself, use it to save some of my income for later spending without losing value due to government-caused inflation. This is even more relevant in countries with smaller economies. As opposed to gold, bitcoin can be liquidated fast, cheap and easily.
(2) Saying that bitcoin lacks "income" doesn't make sense. Euros or gold also don't have "income"..
(3) Mining doesn't require a "vast scale": it can be done at any scale. If you have solar panels or any other source of cheap electricity, you can mine in your home. Devices can be found anywhere between 250 and 5000 EUR.
(4) Before getting to the power consumption, comparing #Bitcoin to Visa doesn't make sense. Visa does not settle transactions. It's simply a database that keeps track of who owes whom and is then sent to a bank to actually try settle a payment.
So one should compare #Bitcoin to either gold or the euro or dollar, where money is actually settled.
(5) Coming to the main claim about power consumption. There's plenty of reading on how most claims on mainstream media are very misleading. Firstly there's a vast difference between power consumption and power production globally. A huge share of produced power is wasted because it is not consumed. Examples are power plants that need to overproduce to cover peak use
as well as most power plants' inability to change output easily: think nuclear plants that always need to produce a high output and can't be scaled back. Other examples are hydro installations in a remote area, wind or solar peak production without peak consumption. And that's just about electricity. When exploring oil/gas production, waste is even more astonishing.
Combine this observation with the fact that all that is needed to mine #Bitcoin other than power is a slow internet connection. Now where would electricity be cheapest? Anywhere power would otherwise be wasted. China got famous for its mining farms because it has lots of hydro installations that are vastly overproducing. In many other places, Bitcoin mining is bridging the gap between production and consumption.
There is huge interest from power plant operators for mobile #Bitcoin mining units that they can turn on when they are overproducing (which they are usually legally required to do) and they can turn off when consumption peaks.
This goes extra so for big (often nuclear) installations near industry centers where electricity demand from the industry has decreased and they cannot easily scale back their output.
@Erik @whiskeysailor Another fast-growing demand for mining is oil producers that need to vent natural gas from their oil wells. Usually this gas is burned (because CO2 is a lesser greenhouse gas than methane) without capturing the heat. There's companies building mobile #Bitcoin mining installations that capture this otherwise wasted heat and use it to generate power for mining.
The mining industry has run on a small scale for years, but with increased scale, efficiency also increases.
Coming to my main conclusion: it doesn't matter how much electricity #Bitcoin mining *consumes*. What matters is how much electricity is *produced* for it. Because that number will be a lot smaller. With mining, every cent saved on electricity cost is a cent of extra profit. Having someone produce power for you is expensive. Finding places that have excess power is the better strategy.
Continuing, but relatedly, (6) #Bitcoin mining does certainly favor renewable energy. Exactly because renewable energy has the property that the marginal cost of each extra kWh is zero. So every renewable installation will always produce the maximum of power, regardless of demand. Mining can bridge that gap.
Which brings us to (7), mining does absolutely not need to run 24/7. A mining farm can be turned on and off in seconds with the press of a button.
@Erik @whiskeysailor So ultimately, I'd like to finish with a but more of an ideological note. #Bitcoin doesn't compare to "Visa" or any other modern payment network. It aims to replace a vast part of our traditional financial system. That includes all of retail banking, where a monopoly to print money makes bankers rich by exploiting the poor. It includes the IMF and World Bank that use the US dollar as a weapon to force small countries to do as they demand.
It won't be a surprise, but I honestly believe we'd have a better world if #Bitcoin were to get a chance to replace part of these industries. And given the immense power these industries have over our policy makers, I don't see any other way to get rid of them. Bitcoin is unstoppable, it is 100% neutral and honest; it has no opinion that can be corrupted by wealth and power.
Anyone with internet can use it. Anyone with electricity can mine it. No permission required.
@Erik @whiskeysailor Sorry for the lack of sources. Unfortunately, most of my claims are hard to quantify and proof anyway. As for mining demand, in part I can speak from experience in the company I work for, but I cannot disclose things further until we make a public statement. Also, since mining is anonymous, it's hard to survey mining installations to analyze their power sources.
@stevenroose Thanks a lot. I understand that doing something useful with your leftover energy is efficient, but I don't really get why that couldn't be any other form of distributed cloud computing that's actually doing something useful. If initiatives need computing power, for simulations or things like folding@home, you can pay people for computing power if you value it.
Your last points about the financial system, power and decentralisation make more sense to me. Would enjoy to hava a chat!
@Erik Well, mostly computation power goes hand in hand with data to compute things about. #Bitcoin mining can run on something like a few hundred bytes of traffic, which means even in remote areas with just a satellite connection.
But I think ultimately the biggest factor is that mining gives these producers some value back for their otherwise lost energy. They make large investments, the ability to recover these leftovers does actually encourage renewable energy projects.
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