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bitcoin and energy

 
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ANYONE CONCERNED ?
 
steward
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I changed the subject line (because I have superpowers).


I have read that a single bitcoin transaction uses as much energy as powering a house for two months.   My rough math says that that is about $400 worth of electricity.

At the same time, a single bitcoin transaction on the bitcoin lightning network costs far less than a penny.  

Further, I am no bitcoin expert, but I have heard a rumor that there are some people with billions (trillions) of dollars that got rich on non-bitcoin stuff, and bitcoin is threatening their pot-o-gold.  So, they carve of a billion or two to spread FUD across the internet.  



So, a bitcoin transaction uses very little energy.  

Bitcoin mining, however ...      the idea is that there are still a thousand bitcoins out there yet to be found.  You just have to find them.  And the last few bitcoins are gonna be crazy hard to find.   But with the price of bitcoin well over $50,000, then it could be worthwhile to somebody to have a computer burn $40,000 worth of electricity to try and find one bitcoin.  So people are doing that.  I hope that they choose to do it deep in winter and all that computing is also heating their home.  

That is, indeed, a LOT of energy.  I think if we are going to contemplate the ups and downs, it would be wise to look at other currency alternatives like gold - wow, there is a lot of energy and environmental disaster there.   And then maybe it is wise to take a look at stuff involving the dollar:  all those bank branches and all those bankers driving to work every day - that is a non-zero value.


Bitcoin isn't perfect.  But it isn't as bad as the fudders make it out to be either.
 
Murielle Cordemans
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Superman with super powers
Thanks for your view on it
 
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There is an economic incentive for Bitcoin miners to migrate from dirty, expensive energy to low cost renewable energy in order to mine Bitcoin.  Bitcoin will only become more green over time as it matures.  Elon Musk and his ilk are building massive solar and wind generation facilities to mine in Texas and Hawaii which will have near zero emissions even now.   This is a much better alternative to gold mining in particular. Wither or not people want to be part of storing their wealth on an open, tracible wallet ledger is a different story...
 
Murielle Cordemans
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Yes! Good news... Thanks
 
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I'm just waiting for Dogecoin to take over...
 
pollinator
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Real money is a representation of units of energy. Which is what gives real money it's core value as a unit of exchange.

Take Silver and Gold for instance. They successfully worked as money for a VERY long time (longest of all forms that have ever existed). They required a certain amount of energy to find, dig up, refine, and then be turned into coins. All of that time/energy gave them their intrinsic value. Sprinkle a little rarity on top and it becomes stable because you can't just produce a ton. Currently Silver and Gold do not work for several reasons. 1) they are heavy and inefficient 2) they are direct competition for the U.S. dollar and are thus suppressed in the paper markets where they will dump 10yrs worth of global silver production (in paper/electronic form) onto the market at a time to keep the price down. Some day they will lose control and the price will explode.

I like the electricity aspect of Bitcoin and other cryptos because, if using clean energy, then it's not as bad for the environment. There is only a finite amount too. Which means gvts hate it because they can't just put their countries into extreme dept... then print their currency into oblivion to pay it off. Which is why they hate Bitcoin and it's ilk. Some cryptos are not like that though. Some can be "printed" into oblivion.

The U.S. dollar is not real money (80% of it is electronic too by the way). It is fiat that is backed by debt (people's life energy) and oil (fossil energy) for stability. There is no limited supply since it was separated from it's Gold/Silver backing back in the 1970s. Which is when the price of Silver/Gold spiked... and they started suppressing it on the paper market. They typically try to aim for a 2 to 3% inflation rate. Which robs from the people/savers every year. The dollar, like all other previous fiats, will be printed into oblivion. It will fail.

I used my "Stimulus Check" to buy some different cryptos. I will never sell them for U.S. dollars. I will give them to my kids some day and they will be able to use those monies to direct-buy some land or something that will change their lives (I hope). Empowering them to make change.

It is a complicated subject and I left a LOT out. Sorry if I didn't make a lick of sense.

~Marty
 
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The amount of energy consumption is a necessary part of Bitcoin's security model. It cannot be reduced without also undermining that same security model. That said, the energy consumption of Bitcoin only bothers you because it's transparent; the energy consumption of fiat currencies (in use) is also quite high, but opaque. The energy needs of fiat currencies include such diverse needs as the central heating of massive buildings owned by banks, the fuel requirements of armored cars, and the computer servers of credit card companies. Bitcoin's great "stretch" goal is to replace these institutions outright.  While that's not likely, any reduction of the public's need to use these institutions put their future at risk.
 
Marty Mitchell
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Creighton Samuels wrote:The amount of energy consumption is a necessary part of Bitcoin's security model. It cannot be reduced without also undermining that same security model. That said, the energy consumption of Bitcoin only bothers you because it's transparent; the energy consumption of fiat currencies (in use) is also quite high, but opaque. The energy needs of fiat currencies include such diverse needs as the central heating of massive buildings owned by banks, the fuel requirements of armored cars, and the computer servers of credit card companies. Bitcoin's great "stretch" goal is to replace these institutions outright.  While that's not likely, any reduction of the public's need to use these institutions put their future at risk.



That is so true. 80% of U.S. dollars are digital these days already anyways. Thanks to the Debit card system we are nearly a cashless society already.  

There are definitely MANY ways classic currencies cost energy.
 
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I rarely post here. Too busy working on my cancer problem. But I'll chime in on this one.
The huge energy and carbon emissions numbers that show up in these scaremongering articles are usually done with a calculation of the hashing power of the network, how much energy it takes, and then they figure it as if it all came from the nasty high Sulphur coal fired power plants of China. In reality though, supply and demand has caused bitcoin mining operations to move to where the electricity is inexpensive. Examples are the massively over built dams in China where their grid can only transport half the power. Mining operations moved there to buy that unused power and everyone is happy. The state makes more money since it can sell the power and the mining operations get a cheap power source that they can use to out compete their competitors. Same goes with the geothermal power of iceland, and the massively difficult and dangerous methane that comes from oil rigs. Generally they just blast the gas into the sky and light it on fire. It's wasted. Now though bitcoin mining operations have moved in, purchased that gas for pennies on the dollar, run it through generators and run their mining operations with it. It's pretty rare for large mining operations to compete directly with population centers and pay those high prices. They're always looking for bargains and they're always ready to move.

All that power goes to provide tremendous hashing power to the network. That makes it so ultra secure that it's pretty much impossible to attack. Any group or entity that somehow collects enough hashing power to harm the network would find it vastly more profitable to join the network and rake in the profits.

What attracted me to bitcoin was it's resistance to government seizure. There are situations where, through no fault of your own, you can find yourself under financial attack. Examples if you have an illegal invasive species on your property you could start getting fines. Or if you have a stream on your property and some kind of contamination occurs. Government has been known to start dumping 1000 dollar a day fines on you until you're financially obliterated. If you have bitcoin however, you have something to fall back on in such an emergency. I was a precious metals guy until I got clued in on bitcoin.

Another positive aspect of bitcoin is it's ability to give people an alternative when their local government currency is over printed and inflated into insanity. With bitcoin they can preserve some of their savings by moving outside of the local economic system. And as bitcoin gains adoption it very gradually decreases a government's ability to print unlimited currency and then wage all these giant international wars, such as Vietnam and that mess we've got going in the middle east right now. I drove down the highway of death in Irag as a young man. It was one of the most horrific experiences of my life. It was all paid for with printed money. When governments have to get the tax payers to pay for these giant wars, they'd have to charge a hefty tax bill. That would cause push back and make these wars less common. With less ability to create money out of nothing, we should have fewer of these problems.

You could say that governments would then resist bitcoin adoption, and some have. The trend seems to be greater adoption on wall street though. Banks can use crypto now. Deutsche bank is opening bitcoin services, visa and mastercard are adding bitcoin to the massive list of currencies that they offer their services on (soon you'll be able to buy things priced in bitcoin with your visa card. Billionaires and large corporations are adding it to their reserves. And of course representatives in government as buying it as well. This should decrease the danger of bitcoin being regulated into uselessness or made illegal. Those in power won't want their investment harmed so they will resist if they are told to stomp on it. The result will be less centralized power among these large nation states. Less power to cause problems for their people. Fewer weird operations such as fast and furious, and a less totalitarian society. I suspect it's going to happen slowly enough that it won't alarm anyone until it's too late.

The actual use of bitcoin is an amazing thing. The main net is moving toward larger transactions that require high security. In such situations the fees or the wait time aren't a problem. Most of the purchases I make though use the bitcoin lightning network. I'm kicking back in Mexico (working on my cancer problem) and I've bought quite a few uber rides and food deliveries from uber eats. There is a vastly greater selection of gift cards available in the states though, and they can all be purchased with Lightning. Plus Lightning uses onion routing so it's almost entirely anonymous. So that claws back some of our privacy that has been violated by the financial system and government in recent decades. If you want to buy a bushel of apples from a farmer you could pay with lightning. The transaction is instant, anonymous and the fee is way way less than a penny. Very exciting times. I hope I can push my expiration date out a few more years. I want to see how all this unfolds over the next few years. Wish me luck.
 
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My concern with bitcoin is it requires the electrical grid to function, what if power to your city is out? What if you don't have internet? To mine bitcoin I need an expensive rig & electricity. With something like gold I can only loose access to if it is stolen which I have more control over than keeping a city powered.

I can't imagine running a bitcoin mining operation on an off grid homestead is worth nearly as much as if you were to pan for gold for an hour each weekend.


I am generally pessimistic on the topic of bitcoin and I'm a software engineer who has worked with Ethereum a bit. Bitcoin is ok if you can use it, but really I'm more likely to trade good without a currency involved than use bitcoin. I would like to note that centralized/government controlled cryptocurrencies should be avoided like the plague.

My point is have multiple redundancies and don't bet it all on bitcoin as your backup currency.



To stay on topic there are a few alt coins that mine based on things like hard drive space instead of hashing algorithms, these are generally much more energy efficient.
 
Creighton Samuels
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T Simpson wrote:My concern with bitcoin is it requires the electrical grid to function, what if power to your city is out? What if you don't have internet?



Not quite right. Miners need electricity & internet in order to process transactions, but users don't really need either, and transactions can still be processed (slower) during an outage by miners across the world not affected by the outage.  I've personally been involved in test transactions that have occurred in person over Bluetooth, as well as transactions over ham radio.  The direct IP option was disabled early on for anonymity reasons, and an IP is necessary in both methods; but the ability exists.  Of course, if you're trying to transact in person, precious metals in small units are a better non-bank method.  I have both, myself.
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