Externalized costs of Bitcoin

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Kopie von chequebook vandalism_03

Just as I was wondering where to find some background on external costs of Bitcoin, Bloomberg swooped in to save the day with some reporting on the energy consumption that goes into mining Bitcoin.

The article first goes a bit into the financial costs of consumed energy; that seems to be to be clearly secondary, after all, as long as those guys pay their bills, who cares what they spend their money on.

More important is this:

The trade-off here is that as virtual value is created, real-world value is used up. About 982 megawatt hours a day, to be exact. That’s enough to power roughly 31,000 U.S. homes, or about half a Large Hadron Collider. If the dreams of Bitcoin proponents are realized, and the currency is adopted for widespread commerce, the power demands of bitcoin mines would rise dramatically.

Mining Bitcoins currently uses as much as half what’s needed to run the LHC? To generate another financial market place that’s even less regulated then the ones we already see failing from lack of oversight?

There are many legitimate, good reasons why a “virtual” currency like Bitcoin could be a good idea. (Think anonymous money transfer, for example.) A currency that in some way isn’t just for the web, but of the web.

But this just seems ridiculous unsustainable if not irresponsible. Or as Bloomberg puts it nicely:

Real-world mining of precious metals for currency was a resource-hungry and value-destroying process. Bitcoin mining is too.

ps. As the saying goes, in a gold rush the only ones really earning money are the ones selling the shovels & picks. I guess the folks selling Bitcoin mining computers are making a killing right now?