Conversation

1) Ok, so how much CO2 does BTC actually create? How much of a worry is it?

Quote Tweet

1) So on energy usage of BTC: The profile will change long-term. Right now the main driver is from block rewards. But as block rewards exponentially decay, those will become less relevant. Long-term, there are really two core drivers.

Show this thread

58

271

1,077

2) NOT... advice, really. Just math.

1

5

103

3) Ok, so. Let's say you spend $X on BTC/ETH blockchain fees (or any PoW currency). Those $X are going to miners in a bidding war for block slots. In an efficient market, as long as it's profitable to run a BTC/ETH mining rig, more people will open them up.

3

5

99

4) So in equilibrium, it should be a bit above breakeven: if they're paid $X, they must have < $X of total expenses. So gas fees ~ 1.5 * mining costs. mining costs are 1/2 electricity 1/2 machines, which take electricity. So 3/4 * mining costs ~ $ spent on electricity.

3

5

89

5) Something like 1/3 of mining rigs run on renewable electricity, so dirty electricity ~ 2/3 * $ spent on electricity. Electricity that miners use costs ~$0.05 / kWh. Each kWh of dirty electricity produces about 0.0004 tons of CO2.

5

6

87

6) Finally, how bad is one ton of CO2? Well, givingwhatwecan.org/report/cool-ea estimates about $1 to reduce CO2 emissions by 1 ton.

5

10

97

7) Ok, so putting it all together.... a) $x in gas b) * 2/3 --> in mining cost c) * 3/4 --> electricity d) * 2/3--> dirty electricity e) / $0.05 --> kWh f) * 0.0004 --> tons of CO2 g) * $1 --> cost to offset 2/3 * 3/4 * 2/3 / 0.05 * 0.0004 * 1 = 0.0026

8

15

226

BitMEX Research

@BitMEXResearch

Replying to

and

> $1 --> cost to offset Where did this $1 per ton offset cost come from?

3

3

Replying to

@BitMEXResearch

givingwhatwecan.org/report/cool-ea fwiw there's significant uncertainty on that parameter--depends on the source you look at

3:40 PM · May 21, 2021Twitter Web App

BitMEX Research

@BitMEXResearch

Replying to

and

Thanks $1 per tonne may be an appropriate rate to offset carbon at the margin. However, presumably that doesnt scale up to solve the entire issue?

1

6

Replying to

@BitMEXResearch

yea might not be -- it's been hard to get *great* info on this; I ended up building in 6x uncertainty, idk if that was the right amount

1

11

Show replies