{"id":168,"date":"2014-07-20T07:30:00","date_gmt":"2014-07-20T07:30:00","guid":{"rendered":"http:\/\/blog.holytransaction.com\/conclusions-on-costs-of-bitcoin\/"},"modified":"2023-01-10T03:43:34","modified_gmt":"2023-01-10T01:43:34","slug":"conclusions-on-costs-of-bitcoin","status":"publish","type":"post","link":"https:\/\/holytransaction.com\/blog\/2014\/07\/conclusions-on-costs-of-bitcoin.html","title":{"rendered":"Under the microscope: conclusions on the costs of Bitcoin"},"content":{"rendered":"
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Hass McCook is a chartered engineer and freshly minted Oxford MBA. He has been researching bitcoin over the past several months and recently joined the Lifeboat Foundation\u2019s New Money Systems advisory board.<\/b><\/em><\/div>\n<\/div>\n
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This, the final\u00a0instalment\u00a0in his\u00a0five-part series<\/a>,\u00a0evaluates\u00a0the relative sustainability of the bitcoin\u00a0network against the costs of gold production, the printing and minting of physical currency and the legacy banking system.<\/em><\/div>\n<\/div>\n
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Under the Microscope\u00a0<\/em>has\u00a0aimed\u00a0to\u00a0cast\u00a0a critical eye over the social, environmental and\u00a0economic impacts of the way we currently transact and transfer wealth, be it through legacy systems\u00a0like\u00a0gold<\/a>\u00a0and\u00a0fiat currencies<\/a>, or through newer\u00a0digital cryptographic ones<\/a>.<\/div>\n<\/div>\n
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The\u00a0series\u00a0has also endeavoured\u00a0to give readers a clearer idea of the human and environmental impacts\u00a0associated with both current and future monetary systems, and allow them to draw their own\u00a0conclusions on the relative sustainability of the old and new systems when viewed from a holistic\u00a0\u201ctriple-bottom-line\u201d approach.<\/div>\n<\/div>\n
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Although it is not necessarily fair to compare bitcoin to the entire legacy\u00a0banking system, there was doubt in the community about the impact of the legacy banking system,\u00a0and thus, it has been quantified for completeness.<\/div>\n<\/div>\n
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It should be noted that the only thing involved in bitcoin mining is electricity use, and as the world\u00a0moves towards clean and renewable energy, Bitcoin<\/a> will have even less of an impact on the\u00a0environment (See Koomey\u2019s and Moore\u2019s Laws). There is also much larger scope for energy efficiency\u00a0improvements in integrated circuits and computing than there are in gold recycling.<\/div>\n<\/div>\n
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As can be conclusively seen, the relative impact of the bitcoin network does not even register on the\u00a0radar of the fiat and gold-based monetary systems, representing a very conservative relative\u00a0environmental impact of just over 0.13%, and a relative economic impact of just under 0.04%. When\u00a0one considers Koomey\u2019s Law, we can\u00a0expect energy\/GH to continue to half every 18 months until 2048.<\/div>\n<\/div>\n
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This means that we can expect our current industry best efficiency of 0.733 W\/GH to reach\u00a00.0000000873804 W\/GH. Thus\u00a0\u2013\u00a0armchair academics take\u00a0note \u2013 in the event that bitcoin scales to a million\u00a0times its current size and market cap over the next 30 years, it\u2019s environmental impact will still be\u00a0insignificant compared to existing systems.<\/div>\n<\/div>\n
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When considering Moore\u2019s Law, we can expect $\/GH to\u00a0continue to half every 18 months until at least 2020. When we consider the advent of decentralised\u00a0emission-free renewable energy, we can expect tCO2\/GH, and possibly even $\/kWh, to tend towards\u00a0zero.<\/div>\n<\/div>\n
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The more agile and dynamic bitcoin companies can take advantage of these trends, but the\u00a0sluggish, inert and over-encumbered incumbents simply cannot. As time goes on, bitcoin only becomes\u00a0more sustainable, while legacy systems continue to bloat year-on-year.<\/div>\n<\/div>\n
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There are no negative social externalities as a result of bitcoin proliferation, and any money laundering\u00a0and shadow economy dealings that currently happen on the network will reduce drastically in\u00a0proportion as adoption grows and regulations firm up on the on-and-off ramps into the bitcoin\u00a0economy.<\/div>\n
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Rome wasn\u2019t built in a day, and the crypto-currency space will take time to evolve to ensure\u00a0that the issues faced and created by our legacy monetary systems do not continue to plague us for the\u00a0next century and beyond.<\/div>\n
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It has been demonstrated that institutional fraud is a problem systemic to\u00a0humans, and not to monetary systems. However, transactional fraud is only a problem in legacy\u00a0systems due to the infallibility of the fact that 2 + 2 will always equal 4.<\/div>\n<\/div>\n
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Although this paper has shied away from all of the ideological and philosophical debates surrounding bitcoin, what is clear is that the argument that bitcoin is superior monetary system \u2013 from the benefits\u00a0and protections it provides to merchants and consumers, to the relative lack of negative impact it has\u00a0on our planet and humanity in general \u2013 is a strong one.<\/div>\n<\/div>\n
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The world is currently crippled by several issues, and the human race faces several existential threats\u00a0such as climate change, the global ageing population demographic crisis and wealth and income\u00a0inequality.<\/div>\n
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It is also unacceptable in 2014 to still have tens of millions of people forced into labour, and\u00a0current monetary systems are somewhat responsible for several of the social ills brought about by\u00a0corruption, money laundering and the black market.<\/div>\n<\/div>\n
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For those who are willing to back their principles and morals with their money, bitcoin provides the\u00a0opportunity for socially, environmentally and economically conscious global citizens to choose to no\u00a0longer participate in the fragile and rotten legacy monetary system, and voluntarily participate in the\u00a0open and wondrous bitcoin ecosystem.<\/div>\n
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Due to the several benefits and significantly reduced burden\u00a0on our planet and society, there is a certain feeling of inevitability about digital currencies, whether it\u00a0be bitcoin, or a future currency that proves to be even more sustainable and beneficial for humanity.<\/div>\n
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You can read Hass McCook\u2019s paper \u2018An Order-of-Magnitude Estimate of the\u00a0Relative Sustainability of the Bitcoin\u00a0Network\u2018 (on which this series is based) in fu<\/em>ll\u00a0here<\/a>.<\/em><\/div>\n<\/div>\n

Open your free digital wallet here<\/a> to store your cryptocurrencies in a safe place.<\/p>\n","protected":false},"excerpt":{"rendered":"

Hass McCook is a chartered engineer and freshly minted Oxford MBA. He has been researching bitcoin over the past several months and recently joined the Lifeboat Foundation\u2019s New Money Systems advisory board. This, the final\u00a0instalment\u00a0in his\u00a0five-part series,\u00a0evaluates\u00a0the relative sustainability of the bitcoin\u00a0network against the costs of gold production, the printing and minting of physical currency […]<\/p>\n","protected":false},"author":1,"featured_media":671,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[37,76,191,434],"tags":[764,871,1096],"yoast_head":"\nUnder the microscope: conclusions on the costs of Bitcoin -<\/title>\n<meta name=\"description\" content=\"Stay informed with HolyTransaction's blog: learn about the costs of Bitcoin and how they are changing. 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