Re There Is Nothing Virtual About Bitcoin's Energy Appetite

["Dave Farber" <dave () farber net>]

---------- Forwarded message ---------
From: John Bartas <jbartas () gmail com>
Date: Mon, Jan 22, 2018 at 6:10 PM
Subject: Re: [IP] Re There Is Nothing Virtual About Bitcoin's Energy
Appetite
To: <dave () farber net>


If any of that excess capacity is coal fired then the world would be better
off if they decommissioned it rather then continue polluting the world to
mine bitcoin.

On 1/22/2018 12:12 PM, Dave Farber wrote:


---------- Forwarded message ---------
From: Limber, Jim <uic.edu1 () gmail com>
Date: Mon, Jan 22, 2018 at 2:45 PM
Subject: Fwd: [IP] There Is Nothing Virtual About Bitcoin's Energy Appetite
To: George Yanos <george () yanos com>
CC: <dave () farber net>


The main locations - Russia, China, Canada, etc., have surplus generating
capacity that would substantially result in generator and transmission
losses if not fully matched to load capacity....
---------- Forwarded message ----------
From: "Dave Farber" <dave () farber net>
Date: Jan 22, 2018 7:14 AM
Subject: [IP] There Is Nothing Virtual About Bitcoin's Energy Appetite
To: "ip" <ip () listbox com>
Cc:


---------- Forwarded message ---------
From: Dewayne Hendricks <dewayne () warpspeed com>
Date: Mon, Jan 22, 2018 at 4:55 AM
Subject: [Dewayne-Net] There Is Nothing Virtual About Bitcoin's Energy
Appetite
To: Multiple recipients of Dewayne-Net <dewayne-net () warpspeed com>


There Is Nothing Virtual About Bitcoin’s Energy Appetite
By NATHANIEL POPPER
Jan 21 2018
<
https://www.nytimes.com/2018/01/21/technology/bitcoin-mining-energy-consumption.html
>

SAN FRANCISCO — Creating a new Bitcoin requires electricity. A lot of it.

In the virtual currency world this creation process is called “mining.”
There is no physical digging, since Bitcoins are purely digital. But the
computer power needed to create each digital token consumes at least as
much electricity as the average American household burns through in two
years, according to figures from Morgan Stanley and Alex de Vries, an
economist who tracks energy use in the industry.

The total network of computers plugged into the Bitcoin network consumes as
much energy each day as some medium-size countries — which country depends
on whose estimates you believe. And the network supporting Ethereum, the
second-most valuable virtual currency, gobbles up another country’s worth
of electricity each day.

The energy consumption of these systems has risen as the prices of virtual
currencies have skyrocketed, leading to a vigorous debate among Bitcoin and
Ethereum enthusiasts about burning so much electricity.

The creator of Ethereum, Vitalik Buterin, is leading an experiment with a
more energy-efficient way to create tokens, in part because of his concern
about the impact that the network’s electricity use could have on global
warming.

“I would personally feel very unhappy if my main contribution to the world
was adding Cyprus’s worth of electricity consumption to global warming,”
Mr. Buterin said in an interview.

But many virtual currency aficionados argue that the energy consumption is
worth it for the grander cause of securing the Bitcoin and Ethereum
networks and making a new kind of financial infrastructure, free from the
meddling of banks or governments.

“The electricity usage is really essential,” said Peter Van Valkenburgh,
the director of research at Coin Center, a group that advocates for virtual
currency technology. “Because of the costs, we know the only people
participating are serious, that they are economically invested. That
creates the incentives for cooperation.”

This dispute has its foundations in the complex systems that produce tokens
like Bitcoin; Ether, the currency on the Ethereum network; and many other
new virtual currencies.

All of the computers trying to mine tokens are in a computational race,
trying to find a particular, somewhat random answer to a math algorithm.
The algorithm is so complicated that the only way to find the desired
answer is to make lots of different guesses. The more guesses a computer
makes, the better its chances of winning. But each time the computers try
new guesses, they use computational power and electricity.

The lure of new Bitcoins encourages people to use lots of fast computers,
and lots of electricity, to find the right answer and unlock the new
Bitcoins that are distributed every 10 minutes or so.

This process was defined by the original Bitcoin software, released in
2009. The goal was to distribute new coins to people on the Bitcoin network
without a central institution handing out the money.

Early on, it was possible to win the contest with just a laptop computer.
But the rules of the network dictate that as more computers join in the
race, the algorithm automatically adjusts to get harder, requiring anyone
who wants to compete to use more computers and more electricity.

These days, the 12.5 Bitcoins that are handed out every 10 minutes or so
are worth about $145,000, so people have been willing to invest
astronomical sums to participate in this race, which has in turn made the
race harder. This explains why there are now enormous server farms around
the world dedicated to mining Bitcoin.

[snip]

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