So is the global population of the banking industry comparable to 41 M ?
UK employees: 1.1M
US Employees: 8.3M
So I went round a few houses and there is a lack of solid stats. But I think I can go with a decent indicator.
The USA has about 7.5 % of GDP (1.5tn) in Finance Services, and 6.3M employees (2018). Now translate that up to the global GDP of 87TRN, and say the global finance sector is as large globally as in USA (generous assumption) and that give 7.5 % of 87TRN - 6.5TRN. At 4.2M employees per Trillion that gives us 27 M global employees.
Now there can be lots of hand waving, but if bitcoin uses same amount of electricity as Argentina, and Argentina has
around 1.5 many people as the global finance sector, then bitcoins electrical use does seem very excessive.
I think I am replying to the oft-heard crypto argument that because bitcoin is self contained we need to bring in the whole costs of the current financial system to compare it.
This was my first attempt at it - and it seems bitcoin loses badly - the current bitcoin energy use is easily comparable or greater than the energy use of the people, buildings etc of the global finance industry.
And bitcoin still cannot buy me a latte at starbucks.
So it's a weird speculative / money controls avoidance thing that happens to subsidise dubious global activity to the tune of Argentina's electrical usage.
It has always seemed BS - it still seems BS. And speculators have grown rich not on a technology that will replace currency but on massive migration of dubious activity (Chinese currency outflows). That Tesla was paid for by Chinese billionaires securing their gains.
:-(
Edit: so dissing bitcoin and Tesla is probably a bad idea on HN.
But to be fair I am not dissing Tesla - it's a genuine company making genuine product. It just seems to be marketing towards a ... marketing archetype that got lucky with their Crypto.
You see, to make cash from Chinese money laundering, one would previously have had to be a lawyer in the City or a real estate agent selling central London flats. But we democratised access to this flood of grey market cash via Bitcoin.
Maybe I would feel differently with a couple of coins in a wallet somewhere. But from a regulatory point of view, it's still taking cash from the poorest globally.
> the current bitcoin energy use is easily comparable or greater than the energy use of the people, buildings etc of the global finance industry
But energy consumption behavior of all people who are deployed in the global finance industry ≠ energy consumption of the median of Argentinan/Ukrankian people. I think you can agree that most people who work in finance are generally in at least low middle-class to super wealthy. If you compare the mobility/consumption index of such a class to median income level of countries where wealth is generally much lower, the equation changes drastically in favor of computers doing the job without having the urge to fly to fiji over the WE, up to 4x between poor and lower middle-class already [1]
That wouldn't be a valid comparison. There's a lot more to the other financial system than just currency and payments. Even if hypothetically the whole world adopted Bitcoin we would still need most parts of the other financial system.
Sure, but rather than a vertical slice, do a horizontal slice. How much energy does every country in the world’s mints, bank vaults, etc. use up, including their whole logistical pipelines that wouldn’t be needed if countries didn’t mint+store physical currency?
my conclusion so far is that a lot of things use as much power as entire countries, but this unit of measure is a higher standard created specifically for bitcoin, and I'm waiting to see otherwise.
I don't mean to imply that switching to bitcoin will stop wars, but rather just remind that the true cost (and value) of USD isn't in it's infrastructure, but in the efforts taken to enforce it's dominance.
If we imagine the ideal future 100 years from now, with a more balanced world order and economic justice for all, then we have to experiment with radically different systems at some point in between. Not saying that bitcoin is the solution or even a good one, but I think it's important to experiment with new ideas, and not just technologies but systems like UBI too.
Of course, getting climate change under control is a much more pressing issue, so bitcoin is untenable, but I don't think it's as frivolous as a lot people make it out to be. It's a valuable experiment, and there's a lot to learn from its failure and success. My takeaway from the issue of its energy usage is that trying to save the climate by discouraging energy usage is kind of fruitless because society will always want more; focusing on replacing polluting energy sources with clean ones is the sustainable systemic solution.
> If we imagine the ideal future 100 years from now, with a more balanced world order and economic justice for all, then we have to experiment with radically different systems at some point in between.
Sure, but I think for any effect a bitcoin-like system has any chance to have on the US's ability to wage war, it will have the same effect on the US government's ability to fund massive social programs. That is, bitcoin is going in the opposite direction from what is needed for achieving the world we hope for.
> My takeaway from the issue of its energy usage is that trying to save the climate by discouraging energy usage is kind of fruitless because society will always want more; focusing on replacing polluting energy sources with clean ones is the sustainable systemic solution.
While I agree with you that this is how things are looking, and it is also the most important long-term goal, I personally don't believe that we have any hope of avoiding catastrophic climate failure if we don't focus on drastically reducing consumption in the short term. To me bitcoin has proved exactly how chasing free economic growth will always drink up any electricity we can produce.
Basically they think that deflationary assets irreparably cripple the debt market, and therefore the government bonds market, and therefore wars will be harder to fund and less arbitrary.
There is some accuracy to that. Would raise the stakes and the resources involved in funding a war. The last 70-80 years of US hegemony have been based off of the market tolerance for US debt and slowly being paid their money back, in US dollartoken. And before then, US hegemony was not a thing.
So there is nothing to say that the market won't find a way to have fractional speculation on bitcoin/crypto asset backed securities, and there is nothing to say that a governing body won't find a way to sustain itself and gain compliance with its peers through it. But there is also not a history of US hegemony supporting it either. Not a panacea because the world was much more of a tinderbox before US debt based hegemony.
As long as the top reply to that comment explains that replacing dollar with a cryptocurrency would change absolutely nothing about the size and activities of the US military.
I'm not sure if I'm being down-voted for being pro-Bitcoin or anti-Bitcoin at the moment, but to clarify: My point is that the Bitcoin energy consumption problem has been and is getting worse over time.
I didn't do the math on this one, but it seems to me that the whole financial system (and all that's needed to ensure it's reliability and security) uses a bit more energy than Ukraine or Argentina.
The infrastructure supporting hundreds of national currencies, hundreds of stock exchanges, thousands of banks, hundreds of payment providers and cryptocurrency exchanges vs a single distributed ledger (basically a piece of paper). Bitcoin has 200 million users at most if you are really generous. It's really not a fair comparison. You would have to combine all cryptocurrencies and their energy consumption to even approach a fair comparison.
The energy usage is only used for mining, it's not even used to secure and ensure its reliability on exchanges whose energy consumption is actually counted against the mining energy. The energy consumption will grow simply because Bitcoin is going up, not because Bitcoin is processing more transactions or providing value in any form. Yes bigger banks need more energy but they can also provide more services thanks to their increased size.
Bitcoin doesn't even compete with Banks because Banks offer loans, consolidate small deposits into large capital reserves, etc. Bitcoin doesn't compete with stocks because Bitcoin ownership doesn't represent an ownership stake in the Bitcoin industry or any other industry. Bitcoin doesn't compete with payment providers because it is too slow and expensive. Bitcoin doesn't compete against cryptocurrency exchanges. Ethereum with its uniswap protocol may do so but that's not Bitcoin. Ethereum provides more value for less energy consumption than bitcoin. The only thing Bitcoin really competes against is gold because of the proof of ownership. You own your Bitcoin in your wallet the same way you own your car or house (after paying your mortgage or car loan off of course).
Bonus:
Why did I compare Bitcoin to a piece of paper? Because the people working in finance are part of the finance system. In Bitcoin only the miners are part of the system. So ultimately you just have a fancy piece of paper on which you cannot write lies on. With the finance system it is closer to bodyguards guarding the paper and making sure nobody can write on it. Again, people are part of the system. It's not just the paper that is important.
The whole financial system actually has some usefulness: you can pay for things with it. Anywhere in the world. Without paying $30 in fees, without waiting for 3 days to clear. It's also not likely to run on 60% coal.
Since bitcoin zealots have moved to pretending that it's a "store of value", you can compare Bitcoin to the energy used to secure the gold in the world. Hint: it's much more worse.
Not only that, but if you look at the energy usage per transaction, bitcoin is probably many orders of magnitude more expensive than the financial system
It's as if everyone would be a banker in Ukraine and every building would be a bank.
Seems excessive.