Will Cryptocurrency Destroy the Environment?

oh hello i'm award-winning science educator and tom cruise if you got captured by nerds and not samurai in that one movie kyle hill you know when you warp space time as much as i do here in my facility it never hurts to brush up on the basics of the physics and engineering that you're trying to break that's why today's episode is brought to you by skillshare skillshare is an online learning community centered around thousands of classes and courses that inspire creativity and creation i just finished introduction to arduino creating interactive projects by mark fraudenfelder founder of make and boing boing and now i finally understand how to make my laser turrets stop targeting my staff's butts it's very annoying if you want to try skillshare like i did the first thousand of you nerds that go down into the description and click the link get to try skillshare premium for free on me and after the trial is over it's only about 10 bucks per month you're welcome now on to today's episode i didn't fix the laser problem oh hey all right nice to see you okay please now please hold your applause hold your applause i'm just a man i'm just a man a man here to announce kyle corn hey baby [Applause] nice to see you here mike yep that's true that's true in just a few short months all of you out there will be able to purchase all your hair care products and whatever else you use money for i don't know food with this very exciting new cryptocurrency yes yes yes yes and all i'm asking for from you today is the equivalent amount of electricity that the entire country of argentina uses hey hey hey hey hey calm down all right i know you've heard a lot about crypto in the news but it's not like it's going to totally destroy the environment i mean come on look at my nikes or will it destroy the environment [Applause] [Music] if you've been anywhere on the internet over the last year you've probably seen the surge in popularity of so-called cryptocurrencies and you probably heard about crypto from some guy who had you know my energy and if you heard about this surge in popularity you probably also saw the backlash against this technology the supposed effects that cryptocurrency has on the environment wait do you really have to dress like that oh yeah yeah i'm a crypto guy now but don't worry it's definitely not my whole personality since both the environment and technology are science adjacent i thought it would be useful to devote today's program to answer what seems to be the biggest argument against adopting cryptocurrency technology and full disclosure i do have some of my own personal funds bound up in bitcoin geez don't get him started first what is a cryptocurrency well simply put crypto as we'll call it from now on is a digital currency that secures itself with cryptography the science of obscuring information with puzzles mathematics leather jackets man buns and ciphers the advantage of a cryptocurrency like bitcoin is that it is entirely peer-to-peer meaning that it doesn't require an intermediary like a bank instead everyone has access to an evolving public record called a ledger that records transactions and their details between users it sounds like that could be chaos and very hackable but this is where the crypto in cryptocurrency comes in transactions can only take place once a complicated cryptographic puzzle is solved this takes a lot of computing power so much so in fact that the electricity and its cost that you need to commit fraud by faking transaction makes fraud uneconomical and therefore it doesn't really happen so say i wanted to buy some dogecoin i connect to the network and the computers or nodes in that network validate my details by having a network user solve a cryptographic puzzle once this puzzle is solved and the transaction verified the transaction is added to a block of data and that data is added to an existing chain of previous transactions and blocks the blockchain with enough data detailing the transaction and addition of a new block to make altering the blockchain in some malicious way all but impossible as a consensus of computers and users must be reached before anything is added to the ledger okay i know that was a lot to take in all at once but hey now you know more than most of the population does about bitcoin and feel free if you want to to grow your own man bun requiring the consensus of many miners many users in the network requiring the solving of complex and highly specialized cryptographic puzzles and the energy to do all that is what's called proof of work it keeps the blockchain secure and now it's to the point where as the price of bitcoin and other cryptocurrencies goes up the puzzle solving gets harder and harder which means that no human can solve any of these cryptographic puzzles by hand this means that bitcoin and other crypto miners need highly specialized computers to do the work for them which use electricity and a lot of it it's estimated now that the vast majority of crypto mining revenue goes towards just paying the electric bill so if this is the case if so much electricity is needed just to show your proof of work why is anyone doing this people are doing this because the first computer or miner to solve that cryptographic puzzle to add a new block to the chain gets rewarded with some newly minted cryptocurrency it's what incentivizes people to do this in the first place making the entire system work and at the time i'm filming this episode just one bitcoin for example newly minted from mining efforts is worth 30 40 36 000 it's a lot and so there are immense number of computers right now all over the world running at top speed making 160 quintillion attempts per second to solve that puzzle and add a new block to the chain it's this insane competition that again keeps everything secure that keeps the whole system running doesn't need a middleman but this is all electricity based and that's the price has dropped another 10 percent oh no because proof of work cryptocurrencies are designed to be energy inefficient to verify and secure transactions as they've gotten more popular the numbers regarding their electricity use have gotten kind of crazy for example all coin mining right now accounts for about the same amount of carbon emission that the entire country of new zealand puts out ethereum the world's second largest bitcoin uses about the same amount of electricity as the entire country of libya a single bitcoin transaction is a million times less energy efficient than swiping your visa or mastercard and the energy required for a single bitcoin transaction could power your home for a month all around the world all the bitcoin miners and their computers are using about half a percent of the entire planet's electricity and it's these facts alone that make up the meat of the articles that you'll see saying that crypto is going to quote destroy the environment but like a crypto durude's wardrobe things are a bit lamer than they seem more complicated more complicated is what i meant to say while it's true that the banking industry as a whole uses more energy than crypto does in isolation crypto uses much more energy per transaction and so the worry is that if crypto is in fact one of the currencies of the future the price of it will go up the puzzles will get harder and so the energy use will also go up while the relatively small number of crypto transactions stays the same it should be noted however that coin transactions do now outnumber those of traditional competitors like discover and paypal now you may have already asked yourself this question but why is any of this bad if crypto didn't use all that energy surely something else would right well here's the complicated part because crypto trades access to electricity for manpower crypto miners flock to areas with the lowest energy costs possible one of those places is china where an estimated 75 percent of the world's crypto mining is done and two-thirds of china's energy comes from fossil fuels miners have also descended on siberia where the cold naturally cools servers and wait a second just look at how insane this image is like this is where we're at they've also flocked to iran where electricity is subsidized and some miners have hidden their server farms in mosques to dodge bills because crypto requires mining and mining requires electricity right now the market incentivizes crypto miners to find flock 2 and exploit the cheapest sources of energy if there is a good argument in this vein against crypto technology then this is it if it stays the same and it becomes more popular then it's going to use more and more and more power than any comparable monetary technology and it's going to get most of that power from places that use mostly fossil fuels and george is currently up 30 percent i'm rich again there are other environmental concerns with cryptocurrency as well crypto advocates will claim that they already use a majority of renewable energy for their electricity but that claim has been widely disputed by experts and there's an estimated eight to twelve thousand tons of discarded computer equipment per year that cannot be used for anything else because it's so specialized it goes straight into landfills as e-waste but even considering everything we've just said we should ask the question is this crypto's fault no really it's just a competitive technology driven to do what it does by current market forces if we were to change what those current market forces were then crypto might change for the betterment of the environment and after talking to a number of sweet crypto dudes and leather jackets and ponytails for this video i honestly do think that change might be on its way remember how we said that current crypto technology essentially makes sure that everyone on the network is being legit by requiring them to expend a lot of electricity right well there's another way to do this instead of proof of work it's called proof of stake instead of making people show their work and expend energy in order to verify transactions you put up some of your own coin as stake as collateral in the network bro and so if you were to do anything fishy and try to falsify a transaction on the chain they take away your stake bro and you lose all your sweet coin bro this means essentially no one is incentivized to commit fraud and so it basically doesn't happen and with coin as collateral not electricity there's no mining there's no heavy use of fossil fuels it could drop theoretically the energy use of cryptocurrencies to essentially just that of a computer network basically zero now this is apparently controversial as a switch to a different way of working in some coin communities but some coins like cardano have already made the switch and for example per transaction cardano is now 4 million times more energy efficient than something like bitcoin and the world's second largest coin ethereum has said that it's eventually also gonna make the switch to proof of stake but let's check on what doge is up to stop checking your phone it's a fine habit that's not killing me okay current crypto infrastructure incentivizes people to find the cheapest sources of electricity and right now that's fossil fuels but it doesn't have to be that means yes i'm saying that crypto technology will not destroy the environment by default we don't have to let it yes i know that's exactly what a crypto bro like me would say but blaming the technology itself is too simplistic and too easy these are still companies run by people who make these technologies who respond to public and political pressure to change from something like proof of work to proof of stake for fear of being out competed or just cancelled look it's on us too the world needs to switch to a majority renewables anyway and then this whole crypto thing really isn't even an issue even though you should still buy kyle coin and then you can you can lose all the life savings on the reddit stock market that you want until next time why are you buying why are you booing me i'm right now exiting the facility thank you so much to the vir nerdy staff at the facility for their direct and substantial support in the creation of this year video which i didn't put directly into bitcoin today especially i want to recognize research assistant hina ansari and visiting scholar mega milk if you want to join the facility if you want to drape on a black on black on slate black leather jacket if you want to see videos early if you want private members only live streams with me not like that join our discord you can go to patreon.com kyle hill and get on the facility staff today and hey if you support us just enough bro you get your name on aria each and every week bro and as you can see there's literally hundreds and hundreds of you so i have no idea how i'm gonna pass that um remember how back on this channel we were talking about how theoretically powerful a jupiter brain would be a planet-sized computer something that could simulate all of human history faster than the blink of an eye well i did a quick calculation for how much uh how many bitcoin transactions a jupiter brain could make and if you took all of the bitcoin transactions currently happening across the entire planet it wouldn't consume 1 million quadrillionth of a jupiter brain's power you should get that thing trading your doge bro thanks for watching doge is down another 30 percent elon stop tweeting about it i'm i'm i'm i'm ruined you

Channel: Kyle Hill

Views: 244,725

Keywords: because science, engineering, kyle hill, learning, math, physics, science, stem, the facility, bitcoin energy consumption, bitcoin news, bitcoin mining, bitcoin carbon footprint, bitcoin, cryptocurrency, environment, carbon footprint, etherium, cardano, doge, dogecoin, bit coin, passive income, bitcoin explained, bitcoin mining explained

Id: N560E3PNQoQ

Length: 15min 12sec (912 seconds)

Published: Fri Jun 18 2021

Reddit Comments

[u/BloodyPommelStudio]

Not sure how feasible this is but would it be possible to have a coin which rather than performing calculations with no inherent value you're payed for donating CPU/GPU cycles towards scientific research which needs to or should be done anyway?