An Order-of-Magnitude
Estimate of the Relative
Sustainability of the Bitcoin
Network
A critical assessment of the Bitcoin ...
About Me
Practical Experience & Qualifications:
  Chartered Civil Engineer of 8 years’ experience – heavily involved in t...
Research Context
  Overwhelming amount of misinformation / FUD regarding
sustainability of bitcoin network
  Whole of li...
How “Green” Is Bitcoin?
Summary Statistics (as at 21 July 2014)
  Total Network Hash Rate: 143,000,000 GH/s (or, 143 PH/s)
  Approximate Network...
Where did the “Average” Figures Come
From?
  Average figures were based on the following network composition
  Sense Che...
Scope Exclusions
  Environmental Impact of manufacturing ASICs. Why?
  95% of e-waste is recyclable
  ASICs vs. Mining ...
So How Does Bitcoin Stack Up With
Other Monetary Systems?
Energy Used (GJ)	
   Tonnes CO2 Produced	
   Externalities
Gold ...
“Who cares about “Going Green”? I personally
believe that “Climate Change” is a myth,
despite the 97% scientific-community...
Annual Economic Impact
Gross Yearly Cost	
  
Gold Mining	
   USD$105 billion	
  
Gold Recycling	
   USD$40 billion	
  
Pap...
Annual Social Impact
Gold	
   Fiat Currency	
   Bitcoin	
  
Worker Deaths	
  
Over 50,000 historically
recorded & Over 100...
Future Trends
  Koomey’s Law
  Computations / W.h doubles every 1.57 years
  Law been in place since 1950s, and will re...
Parting Thoughts
  For those who are willing to back their principles and
morals with their money, Bitcoin provides the o...
Questions, Feedback, and Constructive
Criticism…
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Hass McCook, The Lifeboat Foundation - And Order of Magnitude – Estimate of the Relative Sustainability of the Bitcoin Network

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Hass McCook, The Lifeboat Foundation delivered the presentation at the 2014 Cryptocon Summit and Barcamp in Sydney.

The 2014 Cryptocon Summit and Barcamp focused opportunities stemming from Bitcoins core innovation – the blockchain - a decentralised ledger system that allows seamless and efficient exchanges of virtual currency between users and opens up a wealth of opportunities not only for financial products and retail, but literally for any business, enabling them to conduct business more cheaply and more efficiently than ever before. .

For more information about the event, please visit: http://bit.ly/cryptoconsydney14

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Hass McCook, The Lifeboat Foundation - And Order of Magnitude – Estimate of the Relative Sustainability of the Bitcoin Network

  1. 1. An Order-of-Magnitude Estimate of the Relative Sustainability of the Bitcoin Network A critical assessment of the Bitcoin mining industry, gold production industry, the legacy banking system, and the production of physical currency
  2. 2. About Me Practical Experience & Qualifications:   Chartered Civil Engineer of 8 years’ experience – heavily involved in the delivery of over $20bn of Australian Infrastructure (including Sydney Desal Plant, North West Rail Link, M5 West Widening Project, Pacific & Princes Highway Upgrades, Brisbane Airport Link) in design, construction, consulting, operational and financing roles Academic Qualifications:   Bachelor of Civil & Structural Engineering (First Class Honours) – UTS   Master of Engineering Science (Distinction) – UNSW   Master of Business Administration (Dean’s Commendation) – University of Oxford
  3. 3. Research Context   Overwhelming amount of misinformation / FUD regarding sustainability of bitcoin network   Whole of life sustainability analysis is best left to the people who created the methodology and are trained in undertaking such analyses – Civil/Environmental Engineers   Research is based on personal experience and knowledge in the fields of mining engineering, backed by 100 reliable sources of research material   Full paper and sources can be found here: https://www.academia.edu/7666373/An_Order-of- Magnitude_Estimate_of_the_Relative_Sustainability_of_th e_Bitcoin_Network_-_2nd_Edition
  4. 4. How “Green” Is Bitcoin?
  5. 5. Summary Statistics (as at 21 July 2014)   Total Network Hash Rate: 143,000,000 GH/s (or, 143 PH/s)   Approximate Network Average W.h / GH: 0.888   Approximate Network Average $/GH: $2.52   Global Average Cost / kWh of Electricity: $100 / MWh   Global Average Tonnes CO2 / MWh = 0.6 tonne / MWh   Approximate Annual Network Electricity Consumption: 1,114,846 MWh   Approximate Annual Network Energy Consumption: 4.01 million GJ   Approximate Annual Network Carbon Emissions: 670,000 tonnes CO2   Approximate Annual Electricity Cost: $111,484,400
  6. 6. Where did the “Average” Figures Come From?   Average figures were based on the following network composition   Sense Check: Cost to mine at Cex.io is $2.9394/GH. Cex.io’s pool speed is 44.34 PH/s, or, about 32% of entire Network Hash Rate – therefore a weighted average of $2.52/GH and 0.888W/GH feel quite reasonable. ASIC Type % of Network $/GH W/GH KnC Neptune 20% $3.33 0.733 Cointerra TerraMiner IV 20% $3.00 1.100 BitFury BF3500 35% $2.57 0.800 Bitmain Antminer S2 10% $1.63 1.100 Bitmain Antminer S3 15% $1.13 0.766 Weighted Average $2.52 0.888
  7. 7. Scope Exclusions   Environmental Impact of manufacturing ASICs. Why?   95% of e-waste is recyclable   ASICs vs. Mining Machinery – no contest!
  8. 8. So How Does Bitcoin Stack Up With Other Monetary Systems? Energy Used (GJ)   Tonnes CO2 Produced   Externalities Gold Mining   475 million   54 million   400,000  tonnes  of  Cyanide  &   810  billion  litres  of  water  used   +  4  billion  tonnes  of  waste   rock  generated  Gold Recycling   25 million   4 million   Paper Currency & Minting   39.6 million   6.7 million   10  billion  litres  of  water,   10,000  tonnes  of  co<on  and   linen,  210,000  tonnes  of   metal  for  coins  Banking System   2340 million   390 million   Bitcoin Mining   4.01 million   0.67 million   Minimal  
  9. 9. “Who cares about “Going Green”? I personally believe that “Climate Change” is a myth, despite the 97% scientific-community consensus telling me otherwise” /s So, let’s also have a look at Economic Impact and Social Impact alongside Environmental Impact
  10. 10. Annual Economic Impact Gross Yearly Cost   Gold Mining   USD$105 billion   Gold Recycling   USD$40 billion   Paper Currency & Minting   USD$28 billion   Banking System   USD$1870 billion (of which $63.8 billion are electricity costs)   Bitcoin Mining   USD$0.83 billion  
  11. 11. Annual Social Impact Gold   Fiat Currency   Bitcoin   Worker Deaths   Over 50,000 historically recorded & Over 100 per year   0   0   Corruption   USD$600m   USD$1.60 trillion   Negligible  Money Laundering   USD$2.65 trillion   Black Markets   USD$1.80 trillion   Institutional Fraud / Theft   USD$21 billion across two single events & several billion historically recorded   USD$3800 billion/year & several trillion historically recorded   < USD$0.5 billion ever recorded   Transactional Fraud   N/A   $190 billion   $0   Inflation   Deflationary (Long-term)   3.9% per year (time to loss of 50% of value: 17.5 years)   Deflationary (Long- term)  
  12. 12. Future Trends   Koomey’s Law   Computations / W.h doubles every 1.57 years   Law been in place since 1950s, and will remain valid by the laws of thermodynamics until 2048   W/GH will reduce by a factor of 100 every 10 years => in 2048, we can expect efficiency to be 0.0000000873804 W/GH, or, 0.0873804 W/PH, making today’s network hash rate of 143 PH equivalent in electricity consumption to one single 12.5 W energy-saving light- bulb!   Moore’s Law   Slowing down, but likely to remain valid until 2020, where we are constrained by physical size of silicon atom (12nm)   Transistor Density doubling every 1.5 years with cost remaining fixed i.e. $/GH halving every 1.5 years until 2020   Current best $/GH of $1.13 can be expect to go to $0.071/GH by 2020   Sense Check   Spondoolies SP30 Yukon – shipping in September 2014, has following statistics: W/GH: 0.417 $/GH: $0.85
  13. 13. Parting Thoughts   For those who are willing to back their principles and morals with their money, Bitcoin provides the opportunity for socially, environmentally and economically conscious global citizens to choose to no longer participate in the fragile and rotten legacy monetary system, and voluntarily participate in the open and wondrous Bitcoin ecosystem. Due to the several benefits and significantly reduced burden on our planet and society, there is a certain feeling of inevitability about digital currencies, whether it be Bitcoin, or a future digital currency that proves to be even more sustainable and beneficial for humanity.
  14. 14. Questions, Feedback, and Constructive Criticism…

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