Saturday, October 28, 2017

James Stafford — How Many Barrels Of Oil Are Needed To Mine One Bitcoin?

The Bitcoin mining industry consumes 22.5 TWh of energy annually, which amounts to 13,239,916 barrels of oil equivalent. With 12.5 bitcoins being mined every 10 minutes, that means the average energy cost of one bitcoin would equate to 20 barrels of oil equivalent....

Bitcoin transactions are secured by computer miners, who are competing for rewards in the form of coins from the network. The more computation power they use, the better their chances. The drill rig is a computer, and hydraulic fracturing is done with the tip of your fingers. It’s a phenomenally energy-intensive process.
To put this in perspective, the total energy consumption of the world’s Bitcoin mining activities is more than 40 times greater than that required to power the entire Visa network....
Some, Chris Cook for example, argue that the optimal parameter for measuring economic data is energy rather than a monetary unit of account or a weight of precious metal like gold.
How Many Barrels Of Oil Are Needed To Mine One Bitcoin?
James Stafford | Editor of

See also

Zero Hedge
Bill Miller Put 30% Of His Fund's Assets In Bitcoin
Tyler Durden


Ryan Harris said...

In any other context aiding and abetting money laundering, tax evasion, investment fraud, and illicit commerce would get a banker put in prison, but when people say they are disrupting with black box innovation and a microprocessor suddenly people turn their minds off and accept software designers aren't responsible for the consequences of their behavior and creations. We give deference to technology for fear of stifling innovation or fear of being labelled Luddite. Crypto is far worse than the crimes of Uber, Microsoft or any of the other well known criminal enterprises of the past where the criminality was mostly tangential and done to enrich the shareholders at the expense of society in a small way that actually had some (debatable) beneficial effects overall. Also unlike cash, where most use is legitimate but a small amount of fraud around the edges, The coins are almost a pure criminal enterprise with virtually no legitimate users and everyone involved either speculating or criminals. It's too bad because the coins have a narrow place in society and use that isn't criminal but the criminals are going to ruin it for everyone.
The system is hideously inefficient, difficult to use, time consuming to maintain and expensive which is WHY there remains few non-criminal uses. Technology is supposed to improve productivity not lower it. When even oligopolists like Visa or government agencies like Fed's 50 year old ACH system make Bitcoin look efficient, you have to ask why the coins are even used. No one is working to make the systems more efficient in any marked way. Even the legitimate companies that accept, often require you buy a USD gift card with coins because the systems are so cumbersome. At the same time the number of dodgy investments, fake banks, crime rings grow more dominant by the day.

NeilW said...

Bitcoin just has a 'proof of work system' for issuing tokens that involves energy production.

The Job Guarantee has a 'proof of work system' for issuing tokens that involves giving up hours of your time.

So Dirty subsidised coal fired power station standard or labour hour standard.

Pick your peg.