Petition to ban bitcoins

[nctnico]

I just read a news article that even TSMC (Taiwan Semiconductor) is going to invest in hardware to mine bitcoins. What worries me is that it takes an enormous amount of energy to mine bitcoins. IMHO people should stop mining bitcoins for this reason.

http://www.bloomberg.com/news/2013-04-12/virtual-bitcoin-mining-is-a-real-world-environmental-disaster.html

[AndyC_772]

Unsurprisingly, the article quotes various figures to try and evoke a response, without putting them in any kind of context. It's a depressingly common method used by the 'something-must-be-done' brigade and those who pander to them. The use of the word "disaster" in the headline is a dead give-away, and the completely irrelevant photo of a gold mine only serves to undermine the credibility of the article and its author even further.

As an industry, what is the proportionate cost of energy used per unit of revenue created, and how does this compare with other energy-intensive industries?

How does the total size of the bitcoin mining industry compare to other industries?

Does it even appear on the top 100 industrial consumers of electricity? The top 1000?

In countries where this industry exists, what proportion of the country's total electricity generation does it use? How does this compare to, say, the power lost by phone chargers being left on?

[ddavidebor]

Shit article for ipocondriac readers

[nctnico]

Unsurprisingly, the article quotes various figures to try and evoke a response, without putting them in any kind of context. It's a depressingly common method used by the 'something-must-be-done' brigade and those who pander to them. The use of the word "disaster" in the headline is a dead give-away, and the completely irrelevant photo of a gold mine only serves to undermine the credibility of the article and its author even further.

Its just one of the many articles you'll find using Google. I just randomly picked one of the first 3 links.

As an industry, what is the proportionate cost of energy used per unit of revenue created, and how does this compare with other energy-intensive industries?

Perhaps. But other industries produce something real instead of trying to inflate a big soap bubble. The people behind bitcoin should have thought about the consequences of their system. Part of my EE study was about professional ethics.

[Dago]

This falls in to the same category as the news where they calculate and announce that you can save over 9000 jiggawatthours when you remove phone chargers from the socket when you're not using them. But then they fail to mention that it's a tiny miniscule fraction of the energy used by lets say street lamps or even toasters (who needs toasters, you can eat your bread without toasting it, right!?). It probably used more energy to create and view the news article than they would save by removing the chargers from the wall...

[smashedProton]

Yes, but their contention is that mining bitcoins is fundamentally wasteful. It isn't.  Bitcoin mining is rhe accounting and redundancy checks and stuff for transactions.  Its hell of a lot more efficient than it is now for sure.

[metalphreak]

TSMC are already making ASIC chips for a number of companies already aren't they? I've seen a few different products now with proper ASIC hardware (and not FPGA).

On the topic of wasting energy, what magical energy free hardware do you think all the current banking systems work on? You shouldn't play video games or use a computer for fun, because it's using energy that's destroying the environment... (at least bitcoins serve a purpose  )

[lgbeno]

I think you could argue the same thing about any currency, just some bubbles are fortified much more than others.

Investment bankers burn megawatts of energy doing "low latency trading" for the same reason with no "real" effect on the world.

Bitcoins are an interesting 21st century quark.  With the Internet and cheap computers, the infrastructure is now in place for a non-gov backed currency.  If adopted (which I think is a long road) it could change things and further flatten the world. 

Bitcoins will progress the speed & sopistication of our encryption technology by leaps because there is a financial incentive to do so.  Not quite sure if that is a good or bad thing come to think of it...  Either way it is forward progress IMO.


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[Balaur]

I just read a news article that even TSMC (Taiwan Semiconductor) is going to invest in hardware to mine bitcoins.

Any sources for this very bold affirmation?

Some company (Avalon) may manufacture its chips at TSMC (as 49% of the industry it's doing but that doesn't mean that TSMC themselves will invest in bitcoins.

[AndyC_772]

Its just one of the many articles you'll find using Google. I just randomly picked one of the first 3 links.

What happens if you spend a while longer sorting through the results to try and pick out credible reports with meaningful, quantitative figures and context in them? Are there any? And if there are, do they tend to lead the reader towards the same conclusion as the alarmist rubbish?

But other industries produce something real instead of trying to inflate a big soap bubble. The people behind bitcoin should have thought about the consequences of their system. Part of my EE study was about professional ethics.

Since when has producing a tangible product ever been a requirement for a legitimate industry?

Does the energy usage involved in, say, hosting and viewing videos on YouTube bother you as much? Why?

Would you feel differently if a Bitcoin were a real, shiny object that took the same amount of energy to dig out of the ground?

Do you object to the physical mining of precious stones that have no practical utility over and above the fact that they look nice and people will therefore pay good money for them?

[nctnico]

If you can go down that road you might as well kill yourself because ultimately life is meaningless... 

Big companies and environmentalists have been making much stance about more efficient servers, bandwidth conserving protocols and less computational intensive tasks. Some companies even move their data warehouses to cooler areas to reduce the amount of energy required for cooling. In that context its quite bad to come up with a system which needs a lot of computational power.

Read about Google's efforts:
http://www.google.com/green/efficiency/datacenters/

[lgbeno]

Actually bitcoins are self regulating in power consumption because miners won't spend more money on energy than the bitcoins are worth. Therefore a huge metric is simply how many hashes per watt can your mining rig do. 

This is why TSMC is important, the mining ASICs need to get into deep sub-micro in order to become more efficient.  Could also explain why TSMC is "investing," could just mean that they are fabing ASICs for less margin and therefore asking for equity in a bitcoin ASIC company.


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[Phaedrus]

The fact that electricity costs money means that bitcoin miners will also seek to reduce the power consumption of their mining systems. The bitcoiners are trying just as hard to reduce their power consumption as Google is, and both for the same reason: money.

[dfmischler]

My question is, who are you planning to petition?  The bitcoin people?  Your own national government?  The UN?  The pope?

[AndyC_772]

If you can go down that road you might as well kill yourself because ultimately life is meaningless... 

Which road? All I've done - consciously, at least - is try to ascertain quantitatively whether this is an issue of genuine significance, or something so vanishingly trivial that it's not even worth thinking about. We, as technically competent people with a reasonable grasp of science and mathematics, have a responsibility to ask these questions. If we don't, then nobody else will.

You mentioned professional ethics earlier. Do you think it is ethical to publish stories which mislead the public in order to sell news coverage?

What would the likely long-term consequences be of spreading "information" like this?

Big companies and environmentalists have been making much stance about more efficient servers, bandwidth conserving protocols and less computational intensive tasks. Some companies even move their data warehouses to cooler areas to reduce the amount of energy required for cooling. In that context its quite bad to come up with a system which needs a lot of computational power.

Sure. Energy is expensive, and being seen to do something environmentally friendly is good for business.

[Corporate666]

Bitcoins are based on something - production.  Actually, they are one of the only (maybe THE only) currency that is tethered to something of fundamental value.  One might argue that the computations being done are not inherently beneficial to mankind and therefore have no value... but couldn't the same be said for currency exchanges who are much larger than simple liquidity demands they be?  What about companies that manufacture "positive ion" bracelets and that crap?  Or companies that make unhealthy food? 

At the end of the day, capitalism wins.  Bitcoins have a finite quantity and their value is essentially based on the free market.  It's already a negative ROI proposition to mine bitcoins on your home PC... but with custom ASIC's and very low cost of energy?  It's probably still viable. 

And just as people manufacturing bullshit magnetic bracelets keeps people employed, even though the end result is worthless, even if one thinks Bitcoins are inherently worthless, it's still keeping people in jobs (like the people making the ASICs and the hardware people are using to mine the bitcoins).

[free_electron]

Part of my EE study was about professional ethics.

- are you soldering lead-free ?
- do you follow RoHs and WEEE for everything you do ?
- when you write code, are you making sure not a single instruction cycle is being wasted ?
- are you sure the parts you use don't contain any minerals coming from conflict zones ?
- do you get boards in china where people work for peanuts and they dump the spent etchant fluid down the drain ?

how far do you want to go ?

as far as 'life being meaningless'  : it is only meaningful to one self. the rest may all just be a figment of your imagination.

the question is how far do you want to go , and when do you hit the point that further efforts are meaningless. ( law of diminishing returns)

[Mechatrommer]

can you eat harddrive?

[alm]

And just as people manufacturing bullshit magnetic bracelets keeps people employed, even though the end result is worthless, even if one thinks Bitcoins are inherently worthless, it's still keeping people in jobs (like the people making the ASICs and the hardware people are using to mine the bitcoins).

Breaking windows also provides jobs to people.

[nctnico]

Bitcoins are based on something - production.  Actually, they are one of the only (maybe THE only) currency that is tethered to something of fundamental value.  One might argue that the computations being done are not inherently beneficial to mankind and therefore have no value... but couldn't the same be said for currency exchanges who are much larger than simple liquidity demands they be?  What about companies that manufacture "positive ion" bracelets and that crap?  Or companies that make unhealthy food? 

At the end of the day, capitalism wins.

Not really. Capitalism is ultimately self destructive. Why do you think there are so many rules about food quality, car emissions, safe working conditions, etc, etc? I suggest you watch this documentary on how shockingly unethical people, society and companies can be:

[Corporate666]

And just as people manufacturing bullshit magnetic bracelets keeps people employed, even though the end result is worthless, even if one thinks Bitcoins are inherently worthless, it's still keeping people in jobs (like the people making the ASICs and the hardware people are using to mine the bitcoins).

Breaking windows also provides jobs to people.

I know that parable well, and it's not applicable to Bitcoins.  The parable is about the net effect of destruction on economics being negative.  Bitcoin mining is not a destructive endeavor.  It may not be as productive as some folks would like, but it does create something.  That is the inherent value of bitcoins, the solving of the underlying mathematically complex equations.  That creates jobs, creates value and supports ancillary businesses (like the companies making/selling video card based systems for bitcoin mining.  Those are jobs that would otherwise not exist).

[Corporate666]

Bitcoins are based on something - production.  Actually, they are one of the only (maybe THE only) currency that is tethered to something of fundamental value.  One might argue that the computations being done are not inherently beneficial to mankind and therefore have no value... but couldn't the same be said for currency exchanges who are much larger than simple liquidity demands they be?  What about companies that manufacture "positive ion" bracelets and that crap?  Or companies that make unhealthy food? 

At the end of the day, capitalism wins.

Not really. Capitalism is ultimately self destructive. Why do you think there are so many rules about food quality, car emissions, safe working conditions, etc, etc? I suggest you watch this documentary on how shockingly unethical people, society and companies can be:

We don't have true capitalism.  If we did, the world economy would be a smoldering heap right now because the banks would have been allowed to fail.  We have restricted capitalism, and some of those restrictions are the things you mention.   But that doesn't mean capitalism doesn't work anymore than rules of ethics on physicians mean that medicine doesn't work.  Capitalism is responsible for the high standard of living we all enjoy and it's a great thing. 

Mining for bitcoins is a capitalist endeavor - one of the great ones, actually, because it's open to anyone and anyone can create direct value themselves without an intermediary like production or a salary.  There are companies making hardware specifically for bitcoins - and those jobs would otherwise not exist.  That is a great thing.

[MacAttak]

It's already a negative ROI proposition to mine bitcoins on your home PC... but with custom ASIC's and very low cost of energy?  It's probably still viable. 

It's not a negative ROI yet, only for those using power-hungry GPU miners. Custom ASIC's are already here in full force, and they dominate the current hashing pools. There are several USB-powered miners available now which use a fraction of the power of a high-end GPU card but deliver higher hash rates.

One of those USB-powered miners will mine enough to pay for itself in something like 6 months or so (assuming you don't overpay for it).

And there are standalone products in the $1,000 to $2,000 range that are 10 times more efficient than the USB miners. These repay their investment in a matter of around 6 to 8 weeks.

edit: This table is quite thorough and up-to-date: https://en.bitcoin.it/wiki/Mining_hardware_comparison

[Corporate666]

It's already a negative ROI proposition to mine bitcoins on your home PC... but with custom ASIC's and very low cost of energy?  It's probably still viable. 

It's not a negative ROI yet, only for those using power-hungry GPU miners. Custom ASIC's are already here in full force, and they dominate the current hashing pools. There are several USB-powered miners available now which use a fraction of the power of a high-end GPU card but deliver higher hash rates.

One of those USB-powered miners will mine enough to pay for itself in something like 6 months or so (assuming you don't overpay for it).

And there are standalone products in the $1,000 to $2,000 range that are 10 times more efficient than the USB miners. These repay their investment in a matter of around 6 to 8 weeks.

edit: This table is quite thorough and up-to-date: https://en.bitcoin.it/wiki/Mining_hardware_comparison

Did you see that I was saying "on your home PC" though?  I agree that the ROI can be there if you use the right hardware, but I don't think it's there for the average Joe using their home PC.  The fastest GPU setups are about 3Mhash/Joule whereas most of the ASIC setups are over 100.  MHash/$ is another one - the ASIC's are so far out in front I don't think there is any ROI on doing it on your home PC.

Could be wrong though, I haven't been keeping that up to date with the latest.

[kaz911]

With the rate that the difficulty index is moving up now - even the best ASIC (400 GH/s) miners are outdated in about 8 months with negative ROI.

From March 2013 to August 2013 - difficulty index has gone from about 3200 - to 37000 - and with all the new ASIC miners hitting "miners" within the next 2-5 months - I don't see the trend stopping. Since the system is capped with 1 block pr. 10 minutes - you wont get anywhere with 1 TH/s miner in 6 months. So all the extra ASIC's are just used to find the same 1 block / 10 minute.

But maybe we can use the mining hardware for ANTI-PRISM key-gen when they become obsolete.

Just go in here http://mining.thegenesisblock.com/ - and select the "mining hardware" and potential delivery date - and you will see how quickly your ROI is blasted out of the water. I think Bitcoin mining is dead unless the currency starts increasing massively in value - in which case it might be a better investment just to purchase Bitcoins outright.