How Bitcoin's vast energy use could burst its bubble

[UndercoverElephant]

If it does so, it will be by far the biggest financial bubble-collapse in history, absolutely dwarfing the Tulipmania of 1637 and the South Sea Bubble of 1720. If it is viewed as having no future because of unavoidable exponential increases in energy use, then it could go from $60,000 to zero, and it could happen in a very short period of time.

https://www.bbc.co.uk/news/science-environment-56215787

How Bitcoin's vast energy use could burst its bubble

[Little John]

Bitcoins, as far as I understand it from an explanation given to me, are finite in number. So, when they are all "mined", then that's it. Their exchange value will, of course fluctuate from that point onward. But, no more energy will be expended mining them.

The biggest risk to bitcoins will be their outlawing as a currency by states. If they are outlawed, then they are worthless 1's and 0s on hard-drives

[UndercoverElephant]

Bitcoins, as far as I understand it from an explanation given to me, are finite in number. So, when they are all "mined", then that's it.

That's by agreement rather than designed into it. If whoever controls bitcoin decides more can be mined, then more can always be mined. As I understand it, it is not clear at the moment which way that decision would go.

Their exchange value will, of course fluctuate from that point onward. But, no more energy will be expended mining them.

That isn't what the article said. It says that large amounts of processing power is required just to process the transactions involving existing coins.

[Little John]

Bitcoins, as far as I understand it from an explanation given to me, are finite in number. So, when they are all "mined", then that's it.

That's by agreement rather than designed into it. If whoever controls bitcoin decides more can be mined, then more can always be mined. As I understand it, it is not clear at the moment which way that decision would go.

Their exchange value will, of course fluctuate from that point onward. But, no more energy will be expended mining them.

That isn't what the article said. It says that large amounts of processing power is required just to process the transactions involving existing coins.

Does it mention how much energy is expended daily by FIAT currency digital transactions worldwide to provide a comparison?

[PS_RalphW]

As I understand it, bitcoin transactions are many thousands of times more energy intensive because each transaction is linked back through the entire history of previous transactions across multiple distributed databases to make it much more secure. However there are thousands or millions of more fiat currency transactions because automated trading is used to exploit tiny differences in value in circular currency trades to extract value from basically noise in the system. (for example).

In both cases, huge amounts of finite fossil energy are consumed to gain paper advantages in arbitrary trading rules that have no net gain to the human condition, all the trades are net zero real value.

We are burning down the forests to increase the value of leaves.

[BritDownUnder]

I thought the energy consumption was in mining these things not transacting them after they have been mined, i.e. using an already mined bitcoin to buy something.
And each additional new bitcoin mined requires incrementally more complex calculations and hence more energy to mine than the previous one.

Probably no more of a bubble than a lot of national currencies and could be useful means of transactions that don't attract attention of the authorities. I don't understand bitcoin so I don't go near them.

[Catweazle]

I'll be surprised if the people laundering £billions via bitcoin give a stuff about the ecological costs.

[Catweazle]

Attention has been drawn to this problem, now that Elon Musk has refused to take Bitcoin for his Tesla cars on environmental grounds. There was a blip in Bitcoin price, but no crash. Cardano, a "proof of stake" coin rather than a "proof of work" coin, is doing rather well though.

[adam2]

Stolen electricity used for bitcoin mining.
https://www.bbc.co.uk/news/uk-england-b ... m-57280115

The police expected to find a cannabis farm.

[kenneal - lagger]

Trading in tulip bulbs would be more sensible and a lot less environmentally damaging and at least with tulip bulbs you actually have something physical that has a value when the whole Ponzi scheme collapses.

[Mark]

Iran bans cryptocurrency mining for four months after blackouts:
https://www.bbc.co.uk/news/world-middle-east-57260829

But he said cryptocurrency mining, 85% of which is unlicensed, was draining more than 2GW from the grid each day.
An estimated 4.5% of all Bitcoin mining takes place in Iran.

[Mark]

A US company has turned a former coal plant into a gas-fired Bitcoin mine:
https://www.bbc.co.uk/news/av/technology-58020010

This really fries my brain.

[clv101]

I mine bitcoin, but only using surplus energy from my off-grid solar setup.

[Stumuz2]

I mine bitcoin, but only using surplus energy from my off-grid solar setup.

Ooh, a couple of questions!

Have you ever found any? And did you keep them or sell them?

[clv101]

To be clear, I don't actually 'mine' bitcoin. For some years now it's only be viable with specially designed ASIC hardware. I generate a different currency, Ethereum, but receive payment for my efforts in bitcoin. It's small time, just one computer/GPU, but should have paid for at least the GPU by the end of summer.