Bitcoin energy consumption a feature, not a bug, says crypto-miner
(2022/10/14)
- Reference: 1665763210
- News link: https://www.theregister.co.uk/2022/10/14/bitcoin_energy_consumption/
- Source link:
Conspicuous energy consumption is a feature of the Bitcoin model, rather than a flaw, according to a crypto-miner defending the power-guzzling activity.
Zach Bradford, chief executive of publicly traded Bitcoin miner CleanSpark, [1]waded into the debate sparked by the [2]Ethereum Merge , the shift from proof of work to proof of stake, which could see an order of magnitude reduction in the power consumed by the rival cryptocurrency network.
"Proof of work, and the energy it uses, is a feature and not a flaw. There is no CEO of Bitcoin, it is fully decentralized and really proof of work is the only good way to truly secure the blockchain without an overseer. That has value because Bitcoin is used worldwide as a currency without somebody changing the mechanism," he said.
[3]
While power consumption is central to Bitcoin, Bradford argued, the carbon emissions resulting from power generation are not such a problem for ClearSpark as the crypto-miner uses 90 percent carbon-free power. Nuclear power made up a large chunk of that, he said.
[4]
[5]
Bradford also contends that even though there was an energy shortage globally, his company's consumption was justified in that ClearSpark's facilities are located in "grid edge areas" where there is excess electricity, such as the US state of Georgia.
All this seems reasonable enough until it meets a nasty tussle with evidence. Claims that Bitcoin, and the blockchain on which it relies, is fully decentralized were brought into question by [6]a report commissioned by the Defense Advanced Research Projects Agency (DARPA).
[7]
Published in June, the report found the low-level protocols – or cryptographic primitives – underpinning distributed ledger technology security were sound, but implementation decisions mean the claim of immutability is open to question. "We show that a subset of participants can garner excessive, centralized control over the entire system," the researchers said.
The study points out that Bitcoin traffic is unencrypted, meaning any third party on the network route between nodes, including ISPs, Wi-Fi access point operators, or governments could observe and drop any messages they wished. "Of all Bitcoin traffic, 60 percent traverses just three ISPs."
While ClearSpark may feel it is off the hook in terms of carbon emissions, it is hardly reassuring when one considers the scale of the environmental impact of Bitcoin mining against the tiny contribution it makes to global financial transactions.
[8]US warns cryptominers must cut power use to avoid busting US carbon goals
[9]Crypto miners aren't honest about power use – time for a crackdown
[10]Intel blasts Bitcoin mining, unveils own mining kit
[11]Don't hate on cryptomining, hate the power stations, say Bitcoin super-fans
In September, [12]a study by researchers at the University of New Mexico found that in 2020 Bitcoin mining used 75.4 terawatt hours per year (TWhyear-1) – higher energy usage than Austria (69.9 TWhyear-1) or Portugal (48.4 TWhyear-1).
The team also found the energy emissions for Bitcoin mining had grown 126 times from 0.9 tons of emissions per coin in 2016 to 113 tons per coin in 2021. A Bitcoin mined in 2021 created $11,314 in climate damages, with total global damages exceeding $12 billion or 25 percent of market prices. Damages peaked at 156 percent of coin price in May 2020, such that each $1 of Bitcoin market value led to $1.56 global climate damages. The relative damage was slightly greater than the relative damage of beef production (at 33 percent) and much more than gold mining (at 4 percent).
[13]
Alex de Vries, the founder of Digiconomist, pointed out that Bitcoin handles 100 million transactions per year. "That is completely negligible when you look at the regular world of finance. Traditional financial institutions are responsible for handling more than 700 billion digital payments every year and that is still growing."
Bradford counters that Bitcoin was not subject to the whims of central banking policy like conventional currency. Only 21 million will ever be made, where central banks tend to print money when it suits the economic circumstances. Bitcoin is set to hit its ceiling in 2140, a moment ClearSpark is not yet planning for, Bradford said.
"We'll all be in the metaverse [by then]," said Bloomberg TV host Katie Greifeld.
"… and everyone will be using Bitcoin there," rejoined Bradford, demonstrating if nothing else that the media and tech industries can engage in circlejerk groupthink while the planet on which they rely has [14]lost 70 percent of its wildlife since 1970 . ®
Get our [15]Tech Resources
[1] https://www.bloomberg.com/news/videos/2022-10-13/the-merge-miners-making-bitcoin-greener-crypto-irl
[2] https://www.theregister.com/2022/09/15/ethereum_merge_stake/
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Y0nb@38NhewiWC81rTocNgAAAMc&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
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[6] https://www.theregister.com/2022/06/22/research_challenges_assumptions_about_distributed/
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Y0nb@38NhewiWC81rTocNgAAAMc&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[8] https://www.theregister.com/2022/09/09/crypto_mining_regulations_us/
[9] https://www.theregister.com/2022/07/18/cryptomining_crackdown/
[10] https://www.theregister.com/2022/02/26/intel_bitcoin_chip/
[11] https://www.theregister.com/2022/05/03/crypto_mining_environment/
[12] https://www.theregister.com/2022/09/30/bitcoin_climate_impact/
[13] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y0nb@38NhewiWC81rTocNgAAAMc&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[14] https://www.theguardian.com/environment/2022/oct/13/almost-70-of-animal-populations-wiped-out-since-1970-report-reveals-aoe
[15] https://whitepapers.theregister.com/
Zach Bradford, chief executive of publicly traded Bitcoin miner CleanSpark, [1]waded into the debate sparked by the [2]Ethereum Merge , the shift from proof of work to proof of stake, which could see an order of magnitude reduction in the power consumed by the rival cryptocurrency network.
"Proof of work, and the energy it uses, is a feature and not a flaw. There is no CEO of Bitcoin, it is fully decentralized and really proof of work is the only good way to truly secure the blockchain without an overseer. That has value because Bitcoin is used worldwide as a currency without somebody changing the mechanism," he said.
[3]
While power consumption is central to Bitcoin, Bradford argued, the carbon emissions resulting from power generation are not such a problem for ClearSpark as the crypto-miner uses 90 percent carbon-free power. Nuclear power made up a large chunk of that, he said.
[4]
[5]
Bradford also contends that even though there was an energy shortage globally, his company's consumption was justified in that ClearSpark's facilities are located in "grid edge areas" where there is excess electricity, such as the US state of Georgia.
All this seems reasonable enough until it meets a nasty tussle with evidence. Claims that Bitcoin, and the blockchain on which it relies, is fully decentralized were brought into question by [6]a report commissioned by the Defense Advanced Research Projects Agency (DARPA).
[7]
Published in June, the report found the low-level protocols – or cryptographic primitives – underpinning distributed ledger technology security were sound, but implementation decisions mean the claim of immutability is open to question. "We show that a subset of participants can garner excessive, centralized control over the entire system," the researchers said.
The study points out that Bitcoin traffic is unencrypted, meaning any third party on the network route between nodes, including ISPs, Wi-Fi access point operators, or governments could observe and drop any messages they wished. "Of all Bitcoin traffic, 60 percent traverses just three ISPs."
While ClearSpark may feel it is off the hook in terms of carbon emissions, it is hardly reassuring when one considers the scale of the environmental impact of Bitcoin mining against the tiny contribution it makes to global financial transactions.
[8]US warns cryptominers must cut power use to avoid busting US carbon goals
[9]Crypto miners aren't honest about power use – time for a crackdown
[10]Intel blasts Bitcoin mining, unveils own mining kit
[11]Don't hate on cryptomining, hate the power stations, say Bitcoin super-fans
In September, [12]a study by researchers at the University of New Mexico found that in 2020 Bitcoin mining used 75.4 terawatt hours per year (TWhyear-1) – higher energy usage than Austria (69.9 TWhyear-1) or Portugal (48.4 TWhyear-1).
The team also found the energy emissions for Bitcoin mining had grown 126 times from 0.9 tons of emissions per coin in 2016 to 113 tons per coin in 2021. A Bitcoin mined in 2021 created $11,314 in climate damages, with total global damages exceeding $12 billion or 25 percent of market prices. Damages peaked at 156 percent of coin price in May 2020, such that each $1 of Bitcoin market value led to $1.56 global climate damages. The relative damage was slightly greater than the relative damage of beef production (at 33 percent) and much more than gold mining (at 4 percent).
[13]
Alex de Vries, the founder of Digiconomist, pointed out that Bitcoin handles 100 million transactions per year. "That is completely negligible when you look at the regular world of finance. Traditional financial institutions are responsible for handling more than 700 billion digital payments every year and that is still growing."
Bradford counters that Bitcoin was not subject to the whims of central banking policy like conventional currency. Only 21 million will ever be made, where central banks tend to print money when it suits the economic circumstances. Bitcoin is set to hit its ceiling in 2140, a moment ClearSpark is not yet planning for, Bradford said.
"We'll all be in the metaverse [by then]," said Bloomberg TV host Katie Greifeld.
"… and everyone will be using Bitcoin there," rejoined Bradford, demonstrating if nothing else that the media and tech industries can engage in circlejerk groupthink while the planet on which they rely has [14]lost 70 percent of its wildlife since 1970 . ®
Get our [15]Tech Resources
[1] https://www.bloomberg.com/news/videos/2022-10-13/the-merge-miners-making-bitcoin-greener-crypto-irl
[2] https://www.theregister.com/2022/09/15/ethereum_merge_stake/
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Y0nb@38NhewiWC81rTocNgAAAMc&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
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[6] https://www.theregister.com/2022/06/22/research_challenges_assumptions_about_distributed/
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Y0nb@38NhewiWC81rTocNgAAAMc&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[8] https://www.theregister.com/2022/09/09/crypto_mining_regulations_us/
[9] https://www.theregister.com/2022/07/18/cryptomining_crackdown/
[10] https://www.theregister.com/2022/02/26/intel_bitcoin_chip/
[11] https://www.theregister.com/2022/05/03/crypto_mining_environment/
[12] https://www.theregister.com/2022/09/30/bitcoin_climate_impact/
[13] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y0nb@38NhewiWC81rTocNgAAAMc&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[14] https://www.theguardian.com/environment/2022/oct/13/almost-70-of-animal-populations-wiped-out-since-1970-report-reveals-aoe
[15] https://whitepapers.theregister.com/
Mr Bradford demonstrates he understands neither economics nor physics.
Androgynous Cupboard
How fortunate we are that Bitcoin is there to soak up all that excess green energy that would otherwise have just been poured down the drain.
Proof of Work
redpawn
Converting useful energy to waste heat as a definition of "Work" is magical. I guess that makes arsonists valued entrepreneurs.
Re: Proof of Work
Anonymous Coward
That's why it is proof of "work" not "useful work" or "remotely efficient use of electricity"
Someone found the lucky number (technically hash). Something was accomplished. Therefore it IS work
Not quite "Any"
MatthewSt
"and drop any messages they wished"
As long as they also dropped every message after it, and carried on building their own blockchain at a slightly faster rate than the "legitimate" one. Due to the way each is signed, you can't just remove one out of the middle.
Not pro-blockchain by any stretch, but I'm pro-facts and would prefer it if the criticisms (and benefits) of the technology were all genuine
Funny how this is already pushing bitcoin trading off the blockchain and into the exchanges.
Anonymous Coward
Funny, because while it is both power efficient and cheap to do so, you are placing blind faith in the exchange to actually honor the trades. You literally have zero protection from a technical level.
(the funny part is that from Mt Gox, probably the first real exchange rug pull, onward the exchanges have been the point of the largest fraud.)
Bitcoin the plot ...
A great invention for both big oil and any martians looking to invade.
Obviously the martians would prefer us to sprout two sets of fins.