The only reason anyone cares is because it's relatively easy to compute this inefficiency compared to the vast sea of inefficient products that would require signifigant effort to even approximate.
Bitcoin doesn't intrinsically require that much power. The computation to verify transactions is a tiny fraction of that required to compete for the next block by hashing. The high hash rate is because of the high difficulty, which is itself dependent on the hash rate of the entire network. If the price of bitcoin drops, the incentive to mine decreases, and thus so does the difficulty.
This is comparable to gold, as an increase in the gold price also incentivises increased mining.
But once extracted their energy costs are negligible (especially with gold being stored and the rights traded instead of the physical asset a lot of the time). In the case of BTC you can't really separate out the cost of mining a block from validating the transaction because until it's in a block a transaction doesn't really exist (this will get much better with lightning though). But without the constant burn of mining BTC (even post lightning) will be come useless.
Until it IS in a block. Then, like the storage cost of gold or any "real" material, the energy expenditure for maintenance is negligible. In fact, considering the storage requirements of something like bullion I'd argue the maintenance costs are considerably lower.
Yes any given transaction is valid once it is in a block but without continuous mining it's still worthless because it cannot be spent without a new block being mined. And since mining has to be pretty continuous or the whole thing becomes unusable because of loooong processing times the maintenance of the whole network kind of becomes maintenance of the transactions.
Even lightning would only last for a while without new blocks being mined because adding funds to your 'lightning channel' requires a transaction to be placed on the blockchain to open a channel.
You're assuming gold / physicalvaluestores can be spent without shipping cost and exchange fees and that the volume traded reaches 0 in your comparison. Is the volume of any valuestore ever 0?
Also mining doesn't have to be continuious, it's reward varies with volume to adjust the rate mined so you only wait a looong time if suddenly transaction volume spikes.
> You're assuming gold / physicalvaluestores can be spent without shipping cost and exchange fees and that the volume traded reaches 0 in your comparison. Is the volume of any valuestore ever 0?
That's why gold isn't a currency there are definite transaction costs but the whole of the costs of transporting gold spent isn't required for my gold to be spent. With BTC the whole network supports all transactions and all transactions require the mining network for validation.
> mining doesn't have to be continuious, it's reward varies with volume to adjust the rate mined so you only wait a looong time if suddenly transaction volume spikes.
Mining has to continue as a whole though is what I'm meaning. Because it has not physical value and no ability to transfer without active mining the utility and value of BTC is inherently tied to the act of mining. There's also a hard minimum of active mining where the network remains secure against 51%/double spending attacks.
> That's why gold isn't a currency there are definite transaction costs but the whole of the costs of transporting gold spent isn't required for my gold to be spent.
Whole costs for transporting gold are definitely required to be spent... the gold must be transported from one owner's location to another, unless the escrow between the two parties is the same or you're actually trading ETFs.
> With BTC the whole network supports all transactions and all transactions require the mining network for validation.
This is true for the network as a whole, but not any given transaction. Such a model would mean that the network is topologically fully connected, which would in turn mean that it'd be orders of magnitude slower than it already is.
> That's why gold isn't a currency there are definite transaction costs but the whole of the costs of transporting gold spent isn't required for my gold to be spent.
What I'm trying to say here is that my transaction doesn't depend on the energy required to transport all the gold traded.
Physical gold still needs to be mined, smelted, transported, and guarded. When you buy it and move it around energy is spent too. So if you really want an apples-to-apples comparison you'd have to count the energy needed to mine each oz. of gold.
The most succinct critique of Bitcoin is, in my opinion, that it's rediscovering the drawbacks of a 100% gold standard vs paper money. It's just like a pure abstraction of the waste of digging stuff out of the ground just so we can count things. It's inexpressibly sophomoric.
The large majority of gold traded for bullion or investment isn't actually moved. It's just the rights to claim X tr. oz. of gold in the vault of XYZ company. Also value of my gold doesn't depend on the transport of all the gold out there so rolling those costs in at the individual level doesn't make much sense. BTC on the otherhand is useless without mining because the existence and transfer of BTC depends on the miners. Even post lightning mining is still critical to opening new channels.
The large majority of Bitcoin isn't actually moved every block either. And those systems you describe to reassign rights to gold also use energy. As block rewards fall, profit will come from transaction fees only, and only the most efficient miners (best equipment or energy access) will remain. Sure, Bitcoin uses more energy now than a database sitting on a server, but it's solving a different problem.
It is solving a different problem but that doesn't change the fact that the whole network's mining work is required to make it work. There are some energy costs to tracking the rights of stored gold but they're vanishingly small compared to BTC.
We're getting sucked down into the weeds here and losing sight of the original point which is BTC as designed requires the use of massive amount of energy to validate and secure the transaction ledger and that ledger and the things it enables is the whole value of BTC.
I think gold is flawed in essentially the same way as BTC. Mining BTC is called mining because it's a neat abstraction of the old fashioned process. The reason fiat currency took over historically is because there's a tremendous benefit to eliminating the dead weight of mining if you can evolve a more subtle way of limiting supply.
If we're going to play that game, where did the electricity come from for your watt-hour-sucking GPU?
A coal plant? How many died mining it? How many got life long illness or injury/disability mining it? How much poverty did the abusive mining industry inflict on poor dependent communities? How many hundreds of thousands of people were affected by it's emissions? How many thousands of cases of asthma? How many deaths?
If we go nuclear : Where was it mined? Who mined it? Who processed it? Where is the waste going? Are you supporting rather despotic countries depending on ore source? Etc
Or the cards themselves. Where did the rare earth materials that go into graphics cards come from? Where were the graphics card parts manufactured, and where was the board assembled? Are you benefiting from near-slave labor for your cards?
I mean, if we want to play that game, there's so much to examine!
"Uranium mining in the United States produced 3,303,977 pounds (1,498,659 kg) of U3O8 (1271 tonnes of uranium) in 2015"
The US. I wasn't aware there were a significant number of uranium mining deaths? I also assume the US can process it and safely dispose of the waste. No despotic countries of course.
China is a tough one though, I don't know how we justify it.
But that isn't an inherent fact of a diamond. Mining them doesn't require that people lose their lives it's a fact of shitty people. And most diamonds consumers will encounter aren't from that stream.
I strongly doubt the intention was to waste electricity, more likely it was incidentally designed that way, as it's difficult to conceive how you could create such a decentralized cryptocurrency without proof-of-work (at least at the time).
Useful is a subjective value judgement, so... no. But I get what you're saying - I'd say it's more correct to say it's valued, but not that it has intrinsic value.
For example - over history gold has been mostly considered pretty, but not exactly high value. It was only through trade it became representative of value (of the goods).
