Comparing bitcoin to the banking industry is so absurd to me unless you account for users served.
How much water per user served did the banking industry use? It makes sense that banking uses a lot of resources in total because it is a huge industry, serving hundreds of millions of people worldwide, if not billions. Bitcoin serves what, at most a few tens of thousands of users?
I heard people talk about the electricity usage of the banking industry in comparison to bitcoin and its the same thing. Yeah it takes a lot of energy to heat and cool every bank in the world, but it is serving several orders of magnitude more people than bitcoin and offering way more services. Can I walk in to a bitcoin building and get a loan for a new car? Nope.
Perhaps it could be compared to _just_ FedWire. But even then, FedWire handles about $4t of transfers per day. That's a couple orders of magnitude more than BitCoin.
That is a reasonable comparison. Bitcoin can do that much volume as well (without much change in water “usage”). The difference being that one is controlled by the US government and one is not.
To put it in perspective Bank of America alone has over 60 million customers.
60 million real people. People that forget a password, lose their wallet, encounter fraud, need to walk into banks occasionally, use debit cards/deal with cash/ATMs, credit cards that are also accepted everywhere, and as you point out financing products people can actually use (not some crazy smart contract DEX who knows what), need help, have questions, etc, etc, etc.
Safety deposit boxes to notary services the list just never ends. This is just retail.
Plus little things like at least trying to comply with the law, customer protections, regulation, oversight, fraud departments, etc.
People that even bring up comparison to the banking or financial system in discussion of bitcoin power usage instantly have zero credibility.
Although the same could be said for almost any comparison between bitcoin and the banking system. It has total users measured in the 7-8 figures tops after 16 years for many valid reason.
Well yeah it’s called regulatory capital for a reason. Banks are happy to provide token services in exchange for mispriced loans from retail to support their nonretail biz. It’s cool I can walk into a BoA branch in my neighborhood; in exchange I can’t get a house for less than a million bucks. Number one rule of banking is retail’s getting fucked. Most people would be better off with a narrow bank.
Nothing stops you from borrowing Bitcoin loans and using that to pay for your house... except the risk that Bitcoin goes up from 40k€ to 60k€ and your loan got 50% more expensive and there you go, your comment becomes pure hypocrisy.
The idea that 11 people bidding up 10 houses is going to radically change if you have Bitcoin or a narrow bank is ridiculous. If people borrow Bitcoin for the loan, they will still have to outbid everyone else at exactly the same price measured in dollars, because eleven people are bidding up 10 houses.
I am honestly quite tired of nonsense like your comment. If the economy is in general equilibrium, then there is no meaningful difference between Bitcoin and the dollar. If there is no general equilibrium, I would expect Bitcoin to be further away from it than dollars.
> People that forget a password, lose their wallet, encounter fraud, need to walk into banks occasionally
hmm these seem to be usecases that are almost impossible for bitcoin/blockchains that say "cheap transaction fees / trust in the system" due to no-person-in-the-loop...
Yes, it's "not a problem" because all transactions are final and if you lose the key to your virtual wallet with all your savings, then you're fucked, but that's part of the point?
Banks provide these essential services that people need. Bitcoin doesn't, and it still consumes massively more energy.
And wouldn't bitcoin likely use almost same amount of servers if they provided same services? Moving numbers around on ledger is only part of it. Heavy computing is in all business rules and internal logs and traceability. And you are not getting rid of those situations where one service called an other even if final ledger is immutable...
This is always the default response to these conversations, but I think it should be evaluated in different terms: what is the ratio of resources consumed to value created/maintained?
This is on top of the water used for power generation.
Electric power generators are the largest source of U.S. water withdrawals and account for about 40% of total water withdrawals in the United States. Water withdrawals by U.S. thermoelectric power plants reached 52.8 trillion gallons in 2017: https://www.eia.gov/todayinenergy/detail.php?id=37453
I guess its not sufficient that we waste trillions of gallons of water on fossil fuels, we must find new ways to waste water.
Is it really wasting water? For instance, I don't really consider drawing water out of rivers in the East to be a waste of water, because ultimately they flow into the ocean and become salt water. Also, I'm going to assume the power plants don't violate the laws of conservation of matter and the water re-enters the environment somewhere.
Article fails to disclose Alex de Vries actually works at the DNB—the Dutch central bank. Seems to be a propaganda piece aimed at dissuading younger people from exploring alternative financial systems by tying their use to climate change. I wouldn’t expect much truth here.
Yes they are because they are both activities that take up resources. And both are unnecessary because humans can feed themselves without using animals.
Cotton is one of the most water-intensive crops, but when evaluating anything, we need to look at ROI. Most of the conversations around crypto tend to ignore this.
I guess we have to deal with a bunch of this kind of reporting again now that BTC is recovering its value.
While I’m certainly no fan of the environmental impact Bitcoin had in its last bull run, I like Lyn Alden’s point that having access to a stable banking system and a currency that isn’t subject to massive devaluation at the whims of your government is a luxury that many of us enjoy, but that many in the rest of the world do not. Many are stuck saving in currencies that could have their values wrecked at almost any time, in bank accounts that could realistically be frozen or drained by their governments unilaterally with little recourse, especially if they’re a suspected dissident. Obviously, BTC’s value is far from stable, but its future value is at least not certain to be much lower, and it gives people an escape hatch from almost certain financial repression, basically being forced by their government to fall back the financial ladder that they’ve been working for a large portion of their lives to climb up.
Yeah, I’m saying that most people here seem to live in those advanced economies where banking works pretty well, and so they think it’s totally useless because it’s useless for them.
If they can get dollars, that’s maybe a reasonable substitute, and I’ve heard that USD stablecoins are popular in those places as well.
Yeah, I feel like "your 4-figures investment will eventually start growing again after years (unless the bubble pops for good)" isn't what people are thinking of when they hear about bringing stable banking to impoverished countries.
Yeah, "I'm too important to lower myself to debate with you" doesn't really inspire confidence in the whole bringing-stable-banking-to-impoverished-countries agenda either, sorry.
I do love that your response to a fairly mild objection was "oh no, we don't allow critical thought unless you already agree with us". That attitude sure seems like a microcosm of the ecosystem, hence why it's so filled with naked scams and people running with the money.
No self importance. You called it a bubble, but the subject is simply so broad and deep that I won't be able to convince you otherwise in the comments section of a forum. For most people it involves turning their world view on its head. If you're truly interested in understanding, listen to the full "What is money: Saylor series" by Robert Breedlove, which is a good introduction.
Fine, remove the "bubble" part. The idea that bitcoin is fine if you can afford to not touch your savings for a few years is incompatible with the idea it's a viable alternative to national currencies in unstable countries.
I was countering the idea that just because it's value fluctuates in the short/medium-term (natural for anything growing in value) doesn't prevent it from being an escape hatch from the continuous devaluation of fiat across the world. It absolutely is, _providing_ you are willing to store your wealth for at least 4 years (i.e. across a full halving cycle).
When reports like this come up the counterargument is always FIAT bad tha is why we need bitcoin.
But why compare bitcoin to fiat and not to other cryptocurrencies? There are many that don't need such enormous amounts of energy to work. Why not use them in stead of bitcoin?
Because the other cryptocurrencies are actually shitcoins and scams.
I know that this statement is bold and makes people angry especially in the first world, but using the financial system as reference there are many reports out there of funds explaining why Bitcoin is the only “crypto” that will outlive, and that Proof Of Stake is basically and oligarchy scam system.
So using a slang, this is not anymore a “trust me bro” argumentation.
Bitcoin is more centralized than some proof of stake chains. Just 3-5 pools control almost all of the hashrate. Many popular proof of stake chains have 20-50 validators, and some have thousands. Proof of stake is proven to be more decentralized than Bitcoin - except in cases like Ethereum which are similarly centralized.
IMHO, You have a wrong idea of what decentralisation means.
- light validator nodes, more than 50ks around the world
- no foundations, CEOs, companies behind
- proposals based on BIP
- miners don’t own the chain since rules are based on nodes (except some quick activations in the past for segwit and taproot)
- no premining
- the only one truly censorship resistant (stratum v2)
- I could go on and on and on
But yes, I agree with you on the mining pools topic.
Why don’t Bitcoin maxis prefer Monero? It seems you get better decentralization plus a more private digital gold and something that’s much more similar to p2p cash than Bitcoin, without needing a proof of stake chain.
Does Monero match all of those attributes of BTC that the parent listed? Lightweight validator is one of the big ones that most seem to trade in exchange for higher transaction throughput.
I'm interested in the question: why does Bitcoin use water? Apparently some of the water comes from cooling power plants, but a lot of the water usage comes from hydroelectric power. From the study the WSJ article is based on:
> Iran’s high reliance on natural gas for electricity production lowers the water footprint of its mining activities in comparison to countries like Canada and Norway where water-intensive energy sources like hydropower have a more significant role than Iran.
Depending on the source, using hydroelectric power is not really a waste of water. For instance, another WSJ article linked from TFA [0] talks about using hydroelectric power from the Niagra river. At night, there is often surplus energy generated by hydroelectric power plants along the river. Both Canada and New York have pumped storage hydroelectric plants to handle the excess power generated at night from both hydroelectric plants like the ones along the Niagra river as well as nuclear power plants. And still there is excess power at night. You're actually doing the state of New York a favor if you can put excess night time electricity to use.
Ah, here goes the "recycling otherwise wasted electricity" myth again. I just don't buy it from an economics point of view:
Bitcoin miners don't stop mining as soon as literally anybody else needs the electricity – they stop mining as soon as local electricity prices make it uneconomical for them.
In the end, they'll accordingly always contribute to raising prices from the demand side and will at least sometimes be pricing some other consumers out or, worse, raising the electricity price enough for gas turbines to have an economic incentive to start producing. (Renewables have an effectively free marginal cost per joule but are inflexible/unpredictable; gas turbines are expensive but flexible.)
Additionally, some types of hydroelectric plants support variable flow – they can just increase storage levels instead of running their turbines at maximum capacity.
> Ah, here goes the "recycling otherwise wasted electricity" myth again. I just don't buy it from an economics point of view
There’s not really anything to “buy” here. I just described how the New York Power Authority generates power. Here’s a press release from last August announcing a new facility for 20 MW of storage with a target goal of 6000 MW of storage by 2030 [0]. This is just battery storage and doesn't include other storage like pumped hydro. It’s just a fact that NY has excess electricity from hydroelectric power plants.
Now imagine a world where Bitcoin miners would buy all that excess energy for more than that battery storage plant would be projected to earn after costs and you can see how Bitcoin is not just saving electricity that would otherwise go to waste.
There's 'using' as in using naturaly present gravity running water through turbines to produce electricity (hydropower) coming out clean and usable, and then then there is 'using' as in turning it into sewage as in the NYC cases.
Unsurprising to see the WSJ deliberatly suggesting both are comparable.
"In 2021, Greenidge Generation, a Bitcoin-mining and power-generation company gained global attention for allegedly discharging large volumes of hot water into New York's Seneca Lake. The company had repurposed a once-abandoned power plant for Bitcoin mining in 2019, leading to increased carbon emissions and water usage. Residents raised concerns that the warm water discharges were heating Seneca Lake to beyond state water-quality standards. In 2023, environmental groups sued Greenidge Generation for violating the Clean Water Act and other environmental regulations, though this lawsuit was dismissed in the same year."
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[ 1.7 ms ] story [ 423 ms ] threadHow much water per user served did the banking industry use? It makes sense that banking uses a lot of resources in total because it is a huge industry, serving hundreds of millions of people worldwide, if not billions. Bitcoin serves what, at most a few tens of thousands of users?
I heard people talk about the electricity usage of the banking industry in comparison to bitcoin and its the same thing. Yeah it takes a lot of energy to heat and cool every bank in the world, but it is serving several orders of magnitude more people than bitcoin and offering way more services. Can I walk in to a bitcoin building and get a loan for a new car? Nope.
And that's literally one service, from one bank.
60 million real people. People that forget a password, lose their wallet, encounter fraud, need to walk into banks occasionally, use debit cards/deal with cash/ATMs, credit cards that are also accepted everywhere, and as you point out financing products people can actually use (not some crazy smart contract DEX who knows what), need help, have questions, etc, etc, etc.
Safety deposit boxes to notary services the list just never ends. This is just retail.
Plus little things like at least trying to comply with the law, customer protections, regulation, oversight, fraud departments, etc.
People that even bring up comparison to the banking or financial system in discussion of bitcoin power usage instantly have zero credibility.
Although the same could be said for almost any comparison between bitcoin and the banking system. It has total users measured in the 7-8 figures tops after 16 years for many valid reason.
The idea that 11 people bidding up 10 houses is going to radically change if you have Bitcoin or a narrow bank is ridiculous. If people borrow Bitcoin for the loan, they will still have to outbid everyone else at exactly the same price measured in dollars, because eleven people are bidding up 10 houses.
I am honestly quite tired of nonsense like your comment. If the economy is in general equilibrium, then there is no meaningful difference between Bitcoin and the dollar. If there is no general equilibrium, I would expect Bitcoin to be further away from it than dollars.
hmm these seem to be usecases that are almost impossible for bitcoin/blockchains that say "cheap transaction fees / trust in the system" due to no-person-in-the-loop...
Yes, it's "not a problem" because all transactions are final and if you lose the key to your virtual wallet with all your savings, then you're fucked, but that's part of the point?
Banks provide these essential services that people need. Bitcoin doesn't, and it still consumes massively more energy.
I just noticed you were listing vital features of a financial system, and yet wasn't using them as your foremost argument.
Electric power generators are the largest source of U.S. water withdrawals and account for about 40% of total water withdrawals in the United States. Water withdrawals by U.S. thermoelectric power plants reached 52.8 trillion gallons in 2017: https://www.eia.gov/todayinenergy/detail.php?id=37453
I guess its not sufficient that we waste trillions of gallons of water on fossil fuels, we must find new ways to waste water.
New technologies that require massive amounts of bandwidth and CPU/GPU power are expensive. And those will not became cheaper overtime.
That's what you implied.
) New technologies are expensive *at the beginning*
While I’m certainly no fan of the environmental impact Bitcoin had in its last bull run, I like Lyn Alden’s point that having access to a stable banking system and a currency that isn’t subject to massive devaluation at the whims of your government is a luxury that many of us enjoy, but that many in the rest of the world do not. Many are stuck saving in currencies that could have their values wrecked at almost any time, in bank accounts that could realistically be frozen or drained by their governments unilaterally with little recourse, especially if they’re a suspected dissident. Obviously, BTC’s value is far from stable, but its future value is at least not certain to be much lower, and it gives people an escape hatch from almost certain financial repression, basically being forced by their government to fall back the financial ladder that they’ve been working for a large portion of their lives to climb up.
In practice, BTC value is more volatile than currencies in advanced economies, no?
If they can get dollars, that’s maybe a reasonable substitute, and I’ve heard that USD stablecoins are popular in those places as well.
I do love that your response to a fairly mild objection was "oh no, we don't allow critical thought unless you already agree with us". That attitude sure seems like a microcosm of the ecosystem, hence why it's so filled with naked scams and people running with the money.
https://www.youtube.com/playlist?list=PL2jAZ0x9H0bQFY6wIbQfn...
I said nothing about it being a viable currency.
But why compare bitcoin to fiat and not to other cryptocurrencies? There are many that don't need such enormous amounts of energy to work. Why not use them in stead of bitcoin?
I know that this statement is bold and makes people angry especially in the first world, but using the financial system as reference there are many reports out there of funds explaining why Bitcoin is the only “crypto” that will outlive, and that Proof Of Stake is basically and oligarchy scam system. So using a slang, this is not anymore a “trust me bro” argumentation.
- light validator nodes, more than 50ks around the world - no foundations, CEOs, companies behind - proposals based on BIP - miners don’t own the chain since rules are based on nodes (except some quick activations in the past for segwit and taproot) - no premining - the only one truly censorship resistant (stratum v2) - I could go on and on and on
But yes, I agree with you on the mining pools topic.
Unfortunately, the whole industry has turned into get rich quick schemes and investment toys for rich kids.
> Iran’s high reliance on natural gas for electricity production lowers the water footprint of its mining activities in comparison to countries like Canada and Norway where water-intensive energy sources like hydropower have a more significant role than Iran.
Depending on the source, using hydroelectric power is not really a waste of water. For instance, another WSJ article linked from TFA [0] talks about using hydroelectric power from the Niagra river. At night, there is often surplus energy generated by hydroelectric power plants along the river. Both Canada and New York have pumped storage hydroelectric plants to handle the excess power generated at night from both hydroelectric plants like the ones along the Niagra river as well as nuclear power plants. And still there is excess power at night. You're actually doing the state of New York a favor if you can put excess night time electricity to use.
0: https://archive.ph/y3CFt
Bitcoin miners don't stop mining as soon as literally anybody else needs the electricity – they stop mining as soon as local electricity prices make it uneconomical for them.
In the end, they'll accordingly always contribute to raising prices from the demand side and will at least sometimes be pricing some other consumers out or, worse, raising the electricity price enough for gas turbines to have an economic incentive to start producing. (Renewables have an effectively free marginal cost per joule but are inflexible/unpredictable; gas turbines are expensive but flexible.)
Additionally, some types of hydroelectric plants support variable flow – they can just increase storage levels instead of running their turbines at maximum capacity.
There’s not really anything to “buy” here. I just described how the New York Power Authority generates power. Here’s a press release from last August announcing a new facility for 20 MW of storage with a target goal of 6000 MW of storage by 2030 [0]. This is just battery storage and doesn't include other storage like pumped hydro. It’s just a fact that NY has excess electricity from hydroelectric power plants.
0: https://www.nypa.gov/news/press-releases/2023/20230825-utili...
They don't pay for the CO2.
It's the most stupid thing to assume Bitcoin is a net positive for energy when it's clearly not.
It arbitrage energy against a independent market. This leads to ridiculous stupid results.
Unsurprising to see the WSJ deliberatly suggesting both are comparable.
https://www.cell.com/cell-reports-sustainability/fulltext/S2...