The paper behind these breathless articles leaves a LOT to be desired. Brief thread…
This is the article in question. It doesn't really purport to rigorously quantify bitcoin's emissions. It offers black boxy simulations of bitcoin emissions under various regulatory scenarios.…
As anyone knows, if you want to understand bitcoin c02 impact, you need to 1. identify where it is being mined and 2. identify the energy mix that those miners are using. This paper doesn't attempt to do either
I expected most of the paper to be about province-level data covering energy mix of Chinese miners. But that's missing. Instead, they claim to have taken this into account... but don't show their work (!) They just assert they've quantified this
(The paper they cite there, footnote 17, is Krause and Tolaymat 2018, which naively assumes a blanket homogenous energy mix for China. Obviously wrong. So if they're leaning on the Krause methodology they're way way off base. But it's not clear, because they don't elaborate)
It's impossible to evaluate the key claim made in the paper – the relationship between energy outlay and c02 impact – because the authors don't present any data. This isn't an energy paper. The necessary component is just not there.
Other questionable things: the authors naively assume Chinese hashrate is 70% of Bitcoin mining because of pool data from Also a crazy assumption. Pools ≠ mining machines. More sloppy reasoning
In the category of crazy assumptions, the following is an actual passage from the paper. Read it carefully. I want it to really sink in for you:
"Bitcoin blockchain reward halving occurs every four years, which means that the reward of broadcasting a new block in Bitcoin blockchain will be zero in 2140. As a result, the Bitcoin market price increases periodically due to the halving mechanism of Bitcoin blockchain."
Yep, they're relying on the absolutely insane assumption that due to the halving, the bitcoin price will mechanically increase. This is a key cornerstone of the analysis, as they're projecting Bitcoin emissions in the future. This is meant to be a scientific paper.
If you want to forecast bitcoin emissions, you have to
a) forecast the price of bitcoin
b) forecast fees
c) project where bitcoin will be mined
d) project the energy mix of those miners

They haven't done any of these things convincingly. 0/4
This paper is confusingly written, contains very little data or original work, and no energy mix data, just bald assertions. It's completely illegitimate as a credible work to be cited. Journalists should read the papers they're citing next time.
There's a cycle, whereby academics produce incredibly questionable work, and journalists breathlessly launder their nonsense into the mainstream, without having read or understood the paper. It's all so tiresome.
How can you just assert this stuff? Do you know the price of Bitcoin in 2024? Fee rates? Miner location? Energy mix? You know all of those things for sure?…

• • •

Missing some Tweet in this thread? You can try to force a refresh

Keep Current with nic carter

nic carter Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!


Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @nic__carter

6 Apr
Appeared on a @verge-moderated debate of sorts against @steve_hanke (although we didn't face off directly)…
I haven't heard Steve's side of the debate yet. Excited to listen. I'm a huge fan of Prof Hanke and his work is incredibly influential to me.
I'll say it again: being willing and able to learn from people you disagree with is a super underrated skill.
Read 4 tweets
5 Apr
This take is wrong in a subtle way that many people don’t understand: because bitcoin tracks quantities, not individual units
Bitcoin isn’t a serialised cash system like chaumian e-cash where you have specific, fixed denomination bills floating around. Instead, bitcoin tracks various quantities of .. bitcoin through the medium of UTXOs
This is a dramatic improvement in efficiency and system design between ecash and bitcoin, and an under appreciated one. Our main man on this topic is @craigwarmke with his great paper electronic coins…
Read 6 tweets
29 Mar
In which I take @Noahpinion to task on his takes on Bitcoin mining…
Last week, Noah published an article entitled Bitcoin Miners Are on a Path to Self-Destruction…
Noah is generally reasonable on Bitcoin but his piece makes a few claims that I respond to

- "unlike other financial assets, Bitcoin uses more resources as its price goes up"

- Bitcoin "hogs local power resources" & "it remains to be seen" if stranded energy can support BTC
Read 8 tweets
3 Mar
I don't recommend reading "when money dies". it infects you with the fatal disease of thinking everything is reminiscent of weimar.

everything is weimar, though.
two things really stand out for me.

one: everyone in the weimar republic thought prices were going up. they didn't realize the denominator was going down.

two: policymakers were absolutely adamant that there was no relationship between the quantity of money and inflation
and of course, there's the obvious fact that _all_ major inflationary periods in history are met with coincident speculative manias, mises' infamous "crack up boom"

(christ does 'crack up boom' sound satisfying. what a phrase!)
Read 4 tweets
3 Mar
"We know the inflationary beast is now on the
loose. We just don’t know when the predator
will strike."

Fantastic note from Ruffer, beautifully written. I particularly enjoyed Henry Maxey's section on inflation…
"I believe inflation, when it emerges in
earnest, will be a tipping-point phenomenon [...]
rather than a more linear input-output
mechanical phenomenon. Policymakers
will be focused on labour markets and
output gaps, not on the growing fragility
of confidence in fiat money."
"Armed with partial truths and partial
information, and powered by social media,
the collective action of the public may reveal
the greater truth about money and inflation:
it is a confidence game."
Read 5 tweets
3 Mar
Talking about "the scalability problem" that blockchains face is akin to talking about "the speed of light problem" for spacecrafts
a lot of people that think they're creating scalability are just creating deferred settlement, and that's fine, but you'll find that there's no free-lunch scalability WITH composability and WITH base-layer assurances.
lightning, for instance, doesn't "scale" bitcoin. it trades off settlement assurances in order to win efficiency. it creates a new transactional context. same with rollups, all sidechains, sharding, etc. there is no scalability free lunch. always consider the actual properties.
Read 4 tweets

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!

Follow Us on Twitter!