Virtual Bitcoin Mining Is a Real-World Environmental Disaster

[Javaman]

http://www.bloomberg.com/news/2013-04-12/virtual-bitcoin-mining-is-a-real-world-environmental-disaster.html


Here's a puzzle: How can a virtual currency, existing in digital form on computer hard drives, demand real power and real fuel, and have real-world environmental costs? If you're struggling to think of an answer, welcome to the world of "Bitcoin mining."

As a lot of folks know now, thanks to all-hands-on-deck media saturation, Bitcoin is a medium of transaction created in 2009 by an anonymous programmer to facilitate anonymous digital transactions (there’s an excellent history here). Recently, thanks to a speculative mania, the value of Bitcoins have skyrocketed. Before Bitcoins can be traded, though, they need to be created.

That's where "mining" comes in. Mining is a process in which powerful computers create Bitcoins by solving processor-intensive equations. The idea is to keep the supply of Bitcoins from multiplying too quickly. Bitcoin mining, like mining of precious metals, is supposed to be arduous. By design, the more miners there are, the more processing power is required to mint new coins.

Most people aren’t used to thinking in terms of the energy it takes to solve math problems; a few minutes of Excel may not take much energy. But make the problems complicated enough, and things change. “Mining” Bitcoins takes so much processor power that it’s often done with specialized computers optimized for rapid repetitive calculations. So how much power can that take?

More at link...

[Poll_Blind]

1. How does that compare to, say, the energy used to play Angry Birds?

Or all the games on Steam or...take your pick, really.

PB

[Javaman]

2. I thought the article was rather odd myself, that's why I posted it...

they seemed to skim over the whole actual bitcoin mining part, which to me, seems like a much much bigger deal.

That part struck me like the gold farms in WOW that screw up the economy in that game which forces Blizzard to go in and occasionally "adjust" the money levels in the game.

Sadly, bitcoin isn't a game and has all the earmarks if florida land grab in the 1920's. where lots of land, that were actually located in the swamps, were sold to gullible buyers as prime real estated. That's what the Marx Brothers movie, "Coconuts" was all about.

Plus any "money" that can be so easily manipulated by the "investors" strikes me also like the 1929 market crash when people were buying all sorts of stock on margin. When in actually the market was so heavily manipulated by the rich for their own benefit.

[Poll_Blind]

6. I would actually argue that it's not that scam it seems to be, AS LONG as...

...the currency is not outlawed. I don't know if you caught this or not, but after the BitCoin crash, a few of the big investors came out of the woodwork, who were secretly getting into the currency including the Winklevoss twins. Some other investors are mentioned in this article.

This is less about a scheme and more about a virtual currency. Understand that virtual currencies could reshape the way money moves on Earth.

Think of it as a progression:

National Currency (Dollar) --> Multinational Currency (Euro) --> Virtual Currency (BitCoin)

The difference between BitCoin and those Florida properties you talked about is that those properties were, in most cases, totally worthless. With BitCoin, as long as the currency is not outlawed (which is a major point, obviusly), it allows borderless transactions between anyone in the world without an exchange. That feature of the BitCoin has great worth. That and the mathematically-limited nature of the currency.

That's the point, from my understanding.

PB

[Javaman]

8. Oh I agree as long as...

it's kept above the board and properly regulated, which it seems neither exist.

If the bitcoin can be hacked, as we found out that what caused the crash, and investors buying up huge amounts of basically nothing can swing and sway the daily price in wild extremes, then I have a real issue with the entire concept.

And, much like the tranches (used in the mortgage industry) that were calculated via algorithms that no human could possibly hope to understand in their overall complexity and allow them to run roughshod over the gullible in the ever overreach of greed, the concept of bitcoin and it's practical real world usage has a long way to go before the general public will embrace it as an alternative currency.

All monies are based upon the accepted notion that it's value is set by a governing body in reflection of the economy as a whole. But bitcoin, so far as I see it, it's based completely on the concept that it's value is based upon other people believing it has a value which in turn is based upon a nothing. Not too different than the tranches that were cut up and parceled out in hopes that x percentage of people will pay off their loan, but even with the tranches, there was a belief that money would come in from people paying off their debts.

I'm not sold on this and it still feels so much like another scam of the wealthy upon the desperate poor or the partially informed middle class out to get a break with a potemkin type lottery.

[KoKo]

10. I have your same uneasy feeling about this...

And a long time Wall Street Floor Trader said it's a "Tulip Bubble" and the next day it crashed. Since few Wall Streeters and Bankers have been prosecuted for their "Sophisticated Games" that almost brought down US Financial system (which we suffer from today) and is causing problems for people in countries all over Eurozone...it would seem this might be dangerous. As long as those wanting to "play in it" keep it to themselves ...who cares. But these times we live it where everyone is out for themselves...in ways in which can endanger others, I wouldn't go near it.

[Javaman]

11. Quite frankly...

the whole thing has struck me as a wall street party game. And that's why I referenced the '29 crash earlier. No regs to keep a watch on anyone involved is this.

I guess what I'm trying to say is this feels like a pump and dump scheme.

[KoKo]

12. Agree...but it's so Blantent. Bloomberg Business and CNBC

were all over it...just before it's crashed. Talking about how much it was up showing the charts ...(sort of "You Better Get in NOW).

And, all for a computer generated currency? After what we've all just been through? I wondered "Have You No Shame?" I guess the answer is.....NO WE DON'T.

[muriel_volestrangler]

3. One solution could be to make the computer work useful

Rather than random mathematical puzzles, as it is at present, make it do the kind of stuff that Folding@home and climateprediction.net do - heavy computing workloads that produce results useful to the community.

[DanTex]

4. That would be pretty cool if they could tie the bitcoin mining to something productive.

[dipsydoodle]

5. Mowing my lawn for example.

[Javaman]

9. Imaging if bitcoin were tided to the rate of poverty.

as the rate improved bitcoin would go up.

suddenly, wall street would find investing in the poor a profitable idea.

I can dream.

[Dr. Strange]

7. Ooh, maybe GIMPS!

http://www.mersenne.org/