Why don't we just mine Bitcoin with perpetual motion machines?

Leo Zhang

By Leo Zhang

"O speculators on perpetual motion, how many vain chimeras have you created in the like quest! Go and join up with the seekers after gold."
--Leonardo Da Vinci

An aging debate that keeps resurfacing is how much energy Bitcoin mining consumes. In the Proof-of-Work consensus scheme, energy expenditure is a crucial ingredient in securing the decentralized network. To some extent, Bitcoin and other PoW-based crypto-assets are crystallizations of energy spent in mining. Some critics find the enormous amount of energy PoW consumes alarming, and are quick to jump into conclusion that Bitcoin is damaging to the environment.

The real issue here is much more complex than looking at total energy consumption. Like all things that involve the interests of multiple groups, the narratives are often reduced to black and white. In a series of articles and threads below, the authors elaborate upon the necessity of such energy consumption, and why other alternatives are simply not realistic.

Stop worrying about how much energy Bitcoin uses
(Phys.org, by Katrina Kelly-Pitou)

"I am a researcher who studies clean energy technology, specifically the transition toward decarbonized energy systems. I think that the conversation around bitcoin and energy has been oversimplified.”

Thread on the misconceptions around energy consumption of mining

Thread on energy efficiency of blockchain

Nothing is cheaper than Proof of Work
(Truthcoin, by Paul Sztorc)

"First, the argument is ridiculous because Bitcoin is already doing something useful for society (mining wouldn’t be profitable if it wasn’t). Mining creates the network we know and love; Miners don’t share in the marginal benefit that I experience when I use the Bitcoin network (my privacy benefits or cost savings), or (more relevant) the value-added to society as a result of owning the option to use the Bitcoin network."

The anatomy of Proof-of-Work
(Hugo Nguyen)

"Using energy burnt to back a block allows us to view immutability objectively. Whereas any non-energy-based method ultimately requires someone’s subjective interpretation of immutability."

Technical Updates

Time travelling with Satoshi
(Chainalysis)

"Between 2010 and 2012, when mining switched to GPUs and later FPGAs, error rates were relatively low except when there were large increases in hash power, which indicates a surge of new mining rigs. From 2012, named mining pools, shown by the dark blue area in the chart below, started to be established and the error rate climbed, possibly reflecting challenges in the setting up of these pools."

5b7c6967b85be002adb3c557_Percentage-of-errors-per-month-by-type-vs-hash-rate

Ethereum developers voting to drop mining rewards without miner inputs

Strong encryption isn't everything; poor opsec can still fail you

How microservices saved the internet
(Hackernoon, by Will Wang)

"The biggest and most undeniable advantage to the microservice framework is the ability to horizontally scale any of its compoenents. If one service (say the neural net) is under heavy load, you can simply run more replicas of that particular service."

News & Commentary

A brief history of Bitcoin bear markets
(LongHash, by Jason Yannos and Eliézer Ndinga)

"We broke down cryptocurrencies into different bear-market periods. For our analysis, we define a bear market as a minimum of a 20 percent drop in price lasting for at least 2 months in time. Through this definition, we discovered four major bear market periods over the course of Bitcoin’s life, excluding the prolonged bear market of 2018 and onward."

The impossible job: inside Facebook's struggle to moderate two billion people
(Motherboard, by Jason Koebler and Joseph Cox)

"Facebook is still making tens of thousands of moderation errors per day, based on its own targets. And while Facebook moderators apply the company's rules correctly the vast majority of the time, users, politicians, and governments rarely agree on the rules in the first place. The issue, experts say, is that Facebook's audience is now so large and so diverse that it's nearly impossible to govern every possible interaction on the site."

The next slide
(Epsilon Theory, by W.Ben Hunt)

"What is the linchpin of our smileyface authoritarian world? It’s the power of abstraction and cartoons in service to the Nudging State and the Nudging Oligarchy. It’s the Next Slide."

It's the debt cycle (and other things)
(Mish Talk, by Mike Mish Shedlock)

"Turkey represents the catalyst for a new theme, which is 'too much debt and current account deficits equals crisis'. In that sense, we have come full cycle from deficits and debt mattering in the 1980s and ‘90s but not in the ‘00s and ‘10s post- the Nasdaq crash and great financial crisis under the biggest monetary experiment of all time."