Now that Bitcoin ETFs have been approved, let's recap the colossal waste of resources in BTC mining over the past year.
During 2023, Bitcoin's proof-of-useless-work mechanism consumed almost as much electricity as the entire traditional financial sector combined.
The yearly electricity consumption of Bitcoin mining amounted to 121 TWh according to the Cambridge Bitcoin Electricity Consumption Index https://ccaf.io/cbnsi/cbeci
@digiconomist if a cryptocurrency was more, not less energy efficient than the incumbents, faster and able to handle transactions at scale with less cost, would that make them desirable?
Another way of asking this is whether you see any other significant problems, with the principle rather than the current implementation?
I have long criticised Blockchain but am not opposed to decentralised electronic cash, and interested to learn if others critical of #Blockchain are fundamentally opposed.
@markhughes@digiconomist Right. Based on this, when I was caught up in the hype of the boom, I invested a diverse set of less popular, lightweight cryptocurrencies like Nano, that use alternatives to "proof of work", and hence are fast (definitively verifiable in 100s of ms) and use no more power than a Visa transaction. Hence are actually useful as a currency, eg in a shop. But they crashed with everything else, and are still irrevocably subject to massive fluctuation due to price speculation.
@markhughes@digiconomist To my mind, that last fact seems to be the inherent deal breaker. How do you create an electronic currency that isn't subject to massive price fluctuation as the financial industry pumps billions of dollars in and out as part of price fixing schemes? Seems it would require regulation, the ultimate fallout of which is to end up making the ecurrency an awful lot like a regular currency.
Thanks both of you for replying. I agree with the point about manipulation and need for stability.
I think there are ways these can be addressed. One is for the currency to be tied to a stabilising asset such as storage of data. Another is ensuring anyone can acquire the currency easily by providing resources so there's a low risk alternative to speculation.
I'm also aware that people will scam and be scammed regardless of the medium, so that can't be eradicated.
The carbon footprint related to this electricity consumption exceeds 55 megatonnes of CO2. This is comparable to the amount of avoided CO2 emissions from the global fleet of electric vehicles.
On top of the previous impact, the network likely produced over 40 kilotons of electronic waste and consumed over 2,000 gigaliters of fresh water.
The carbon footprint of a single Bitcoin transaction likely exceeded 350 kilograms of CO2. This is about half the per person CO2 emissions of a flight from London to New York. This is the outcome of a single transaction, on average, consuming as much power as an average US household consumes in a month.
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