Ask Lemmy

I said the environmental cost, let's just look at one tiny fraction of it, money needs armoured trucks to move around, an armoured truck does 4 Km/L according to a quick google search, every bank has at least one armoured truck that gets driven around daily, let's assume they use a single litre of fuel each day to account for the possibility of some days not being driven around. This means a single bank uses around 200L a year. Just in the US there are over 72k bank branches, that means ober 14 Million Litres of fuel. A diesel engine produces 2.7Kg of CO2 per Litre, i.e. a very low estimate is that 39 thousands Tons of CO2 emitted just in the US only by moving money around.

When you add all of the small stuff, for all of the physical currency in the world, plus all of the stuff for the digital version of that same currency I think it surpasses Cryptocurrency usage by a long shot, especially because crypto farms are almost exclusively located near green power plants because for example during raining season electricity is much cheaper since they will generate it regardless of usage.

but the per transaction energy cost is much much higher for blockchain. If we scaled Bitcoin to handle every transaction in the world the energy costs would massively eclipse conventional finance, and that's before accounting for the corresponding massive increase in mining difficulty.

That's the point that everyone misses in cryptocurrency, the technology can already process global levels of transactions, the amount of energy that a crypto farm consumes is independent of number of transactions processed, finding a block with one or thousands of transactions is essentially the same difficulty, and consumes the same amount of energy. The cost of energy is only directly related to the difficulty, and the difficulty is only a matter of how fast blocks are being found, essentially the system tries to stabilise so that you get one block every 10 minutes regardless of amount of computers trying to find the next block. If there are more computers the difficulty goes up, less computers less difficulty, but the size of a block, i.e. the limit of transactions that can be processed during a period of time, is virtually infinite (not technically because you need to account for network speed, storage capabilities and a bunch of other stuff, but it's independent of electricity consumption). To prove that take a look at Bitcoin Cash (BCH), it's essentially a fork from Bitcoin that increased the block size but where the underlying technology remains the same. It uses a lot less energy BTC but that's only because less miners are interested in it. Even using 10% of the energy, currently BCH can process 100 transactions per second, to put that into perspective MasterCard processes 5 to 6k transactions per second, while Visa a whopping 65k, so BCH can't currently compete with either, but it outperforms BTCs 4 TPS by a LOT while consuming a lot less energy even though it's the same technology. So again, the cost of energy of a cryptocurrency is a function that depends only on the amount of miners, not what those miners are doing.

Even IF amount of transactions had a significant impact on time to find a block, that would mean that more adoption would diminish the difficulty to maintain balance. E.g. if 100 computers take 10 min to find a block of size 1MB, but they take 20 min to find a 2MB block, the difficulty will drop by half of there are twice the transaction to maintain the average of one block every 10 minutes.

Finally, none of this has anything whatsoever to do with profitability. A coin being profitable to mine dictates how many computers will be trying to mine it, but the system self regulates, if miners migrate the difficulty goes down to compensate. But less difficulty makes it more profitable so miners come back, so on and so forth.