New CoinMetrics Research: Energy Use Comparison with Crypto and Auto Industry is a Perspective Shifter
The environmental impact that cryptocurrency has had on the world has been researched through the years to a certain extent.
Much of the attention has previously been on the toll that mining takes, though a researcher for CoinMetrics wanted to take a broader approach, finding out how the impact of the auto industry on the environment compared to Bitcoin’s impact.
Antoine Le Calvez, the researcher, discovered that the amount of energy consumed by US vehicles in a three-day span is equivalent to the amount of energy consumed by Bitcoin in its lifetime.
The research was discovered using the energy involved with keeping cars moving, along with the 1.3 million tons of oil required daily, comparing it to the amount of energy that Bitcoin takes up to mine in the last decade.
1790635332537685941996748800 hashes computed by S9 miners ~= 1.75 e17 joules ~= 4.2M tons of oil.
US cars consume ~1.3M tons of oil per day.
— Antoine Le Calvez (@khannib) April 11, 2019
As striking of a comparison as this is, the conclusion that Le Calvez comes to has some issues. For instance, while the mining industry now has the energy-efficient Antminer S9 to do a lot of the work, the first few years of Bitcoin mining was performed regular computers.
Even a thousand computers result in less energy usage than the same number of Antminer S9s, but with less hash power. With the variety of hardware used, it is almost impossible to determine how much energy was actually used in mining Bitcoin through the years.
David Harding chimed in on Twitter, saying that the best way to account for this difference is to simply opt to calculate energy usage with the less efficient hardware for a more realistic reading.
In that case, you could get a crude estimate on the electricity used by aggregating all miner rewards (in USD terms at time of mining), guessing what percentage of that went to pay for electric, and dividing by a reasonable electrical rate.
— David A. Harding (@hrdng) April 11, 2019
It is worth noting here that there has been almost no (if any) mining performed with oil power, though coal power has been used frequently with Bitcoin mining in China. Still, this number is not necessarily accurate, because the carbon emissions in China with coal power plants are lower than what the United States has.
Less than one percent of people in the world own crypto. Less than one percent of those people run a node. Less than one percent of those people mine. What percent of people in the world drive a carbdaily? Stupid comparison.
— Keyword: Crypto Podcast (@keywordcrypto) April 11, 2019
The information that Le Calvez figures in his conclusion also contradicts reports that other people have researched and posted, showing that Bitcoin is a consumer of energy.
Bitcoin has a carbon footprint, but the idea that it uses more energy than some countries is clearly overexaggerated. As new concerns about Bitcoin’s impact on the environment have come up, new algorithms have been developed to help with these issues, like the proof-of-stake algorithm that is being adopted by Ethereum.
Bram Cohen, the creator of BitTorrent, has seen these concerns arise over time as well, leading to the eventual creation of Chia, Cohen’s own cryptocurrency. This asset will verify and create blocks with the use of storage “farming” instead.
Even though high energy consumption is a big concern in the scheme of Bitcoin mining, it is hardly the only one. There are still very few producers for the necessary hardware in the industry, and Bitmain’s place at the top has not even been slightly challenged by any competitors.
Bitmain has seen some problems with the bear market and had to let the initial public offering expire. There have been many rumors of layoffs happening and changes in the members of the board. Most recently, reports are claiming that the actions of the current miners are struggling to even be affordable at all.
Thread🔥🔥 on Bitmain, particularly interesting the S15 miner game: 7nm yield unusably low, 7nm cost 3x 10nm, selling demo-only volume (1000 s15s) at a 30% loss per unit. And efficiency similar to multiple competitors new gen 10nm chips. And no 7nm fab capacity available anyway. https://t.co/RCSpzpfIH2
— Adam Back (@adam3us) March 10, 2019
Still, GPUs will continue to be produced, no matter how the crypto market changes. Though there are some crypto exchanges that still have protocols that allow the use of GPUs for mining, companies like Nvidia, AMD, and others that produce GPUs are not exclusive to the industry. Even if cryptocurrency were to fade away entirely, these companies would still be around to survive.
The conclusion that Le Calvez comes to brings attention to how limited the carbon footprint of Bitcoin is, especially when compared with other industries. However, that does not make everyone happy in the crypto world, considering that comparing energy usage to something more terrible is not useful.
Not sure the relative merit of using US car energy consumption converted into oil as a baseline. This feels like context-light misdirection. It's not like US car energy consumption as it is today is sustainable, given its negative externalities.
— Det Insp Spacetime (@dream_king) April 11, 2019
The overall functionality of the Bitcoin market does not really improve the details either. Even with the best efficiency in a mining chip, the only activity would be a greater hashrate and more difficulty. There are potentially higher margins that Bitcoin miners would be subjected to. At this point, based on evidence alone, there is no reason to believe that less energy would ultimately be consumed with improvements in efficiency.
Bitcoin mining comes with a lot of competition. Hash power has to be continually contributed, and hash power always needs some form of electricity. Still, solar energy could help the sustainability of crypto mining over time, according to market analyst Willy Woo.
And coincidentally, the 1.75×10^17 joules used in the 10 years of mining bitcoin (hypothetically with S9 miners as a baseline) equals ONE SECOND of solar energy hitting the earth right now. (1.74×10^17 Watts) https://t.co/fRFBQJ75W1
— Willy Woo (@woonomic) April 11, 2019