 Felly, we'll have on with a few rules here. If I make a noise it means I want you to stop and we'll move it on because this could get quite heated We've only got like 15 minutes. Try and be fair to all get the most important questions in the way. I am a bit coiner, I'll try and be impartial. I've brought some lipstick to put on the pig. So if I win the argument you have to wear this and if you're doing Gylch. Beth ydych chi'n swyddi, Adam, rydych chi'n gweinogi'i Яwsu ac Alex, rydych chi'n gweinogi, Michele, rydych chi'n gweinogi? Rydyn ni'n gweinogi'n gweld fel hynod, ond... Iedd y gwinedd y gweinogi ar gyfer ymateb Cymru. Gwyta ceifach. Rwy'n ddim yn ddych chi fyddwn ni. Dan, is bitcoins yw hwnnw o'n gltyd? Gwyd. Ie. gan. Fe wnaeth ardal. Ie. Fen cael. As demonstrated before, we have to evaluate Bitcoin's energy usage relative to every other monetary system. I think it harnesses electricity in a more explicit fashion that's easy to calculate, calculating the existing financial system and the gold mining monetary systems in terms of the energy needed to move it around is less explicit therefore it's less transparent and people feel that Bitcoin looks to be inefficient. Bitcoin, in the essence of its nature, is most efficient because it takes pure electricity and converts that to protect the network in my new bitcoins. Okay, thank you. Alex, when you looked at the number of transactions, did you consider in part of that that the amount of transactions on chain doesn't reflect the real usage of Bitcoin and really the base chain is used to secure the network, but actually a whole lot of activity happens on lightning network, on sidechains and in custodial solutions, but we require the security to protect the base chain? Well, first a little note about usage. So one thing I saw coming by was a little research from chain analysis and they found that 1% of Bitcoin transactions is designated for merchants and the rest is just going around at exchanges, which is not really economically meaningful if you're just moving your money around. That's price discovery. Actually, no one can use gold at any single merchant in the whole world. There's no merchant in Bavaria that accepts gold for payment, but gold is very valuable to store value. That's what Bitcoin does. Bitcoin isn't a cheap PayPal. Michelle, you could translate interject here. Can you tell everyone the work you've been doing, the research on what you've found? Yes, so for example, we produced that mining map that you showed before. So the thing is we reached out to miners in the space and we identified 128 different facilities, either through server data, calling them and verifying everything, public information, but even that only covers around 10% to 20% maybe of the entire essentially mining activities going on. So it's very, very difficult to actually get to the actual facilities. So when we talk about energy consumption, it's one thing, but the environmental footprint, you actually need to take into account the energy mix that's being used in that if you don't know where the facilities are and agree with you that renewables are not that magical either because of the intermittent nature, which makes it very difficult. So if you want to try to say whether the costs associated with it, so especially environmental costs, are worth it, then we need to do cost benefit analysis. The problem is it's already difficult to estimate the costs, but it's almost impossible to really put a number on the benefits because people use it in a contextual way, which changes from one individual to another, so you can't really put a number to that. Bitcoin moves $1.3 trillion annually. It's a protocol created by a pseudo-anonymous founder running a decentralized manner to move $1.3 trillion across the world where anyone can move their Bitcoin without permission. That's pretty valuable. Alex, do you believe Bitcoin has any value? One Bitcoin is worth one Bitcoin, right? But do you believe in Bitcoin? Do you not believe in Bitcoin? Do you have a personal view on Bitcoin? Oh, sure. I'm actually generally quite positive toward Bitcoin, which may be hard to believe, but in general I do like the technology. I like the fact that it gives you the option to at least do transactions without going through a financial intermediary, which is something we haven't had before. It's just that, in my opinion, it's not worth the cost that it has in Bitcoin. Have you spent any other time evaluating the cost and use of energy against other, say, gold mining, against fiat? Have you done like-for-like comparisons rather than just per transaction, the actual total cost per industry? Yes, so I looked at the comparison with gold mining, or I already showed a number there. Whereas at the moment relatively Bitcoin is eight times less efficient than mining gold per one Bitcoin mine of gold per dollar mine of gold, that's whatever especially you want to use over there. Although, in essence, Bitcoin mining, gold mining remains fundamentally a bit difficult to compare, because in gold you don't put your gold back into the ground and mine it again, whereas if you have transaction fees, coins that have already been mined before. You're not remining the same coin. Talk about transaction fees. So have you looked at the total NECG consumption for the gold industry? Yes, I have. So how does it compare? In total it's obviously going to be, it's about half at the moment. It's about half. Half of what Bitcoin is. And the total, say, for fiat, so people will understand the total for the fiat system. It depends on what you include, because I think it's unfair to just compare Bitcoin to the fiat system as a whole, because in Bitcoin there's also an ecosystem evolving with exchanges with, well, I've been to some local places where they like the coin house in Paris and other places like that. There's Bitcoin ADMs. If Bitcoin grows to, let's say, the size of the current financial system, we might need a few less offices here and there, but it's still very much the question what's going to be the difference to that. And so what I looked at primarily was what's the difference in terms of processing capacity, and that's why I was primarily looking at data center energy use and trying to look at how much of that is useful. It's unfair, though. I mean, a data center processing is just one of many costs of the existing financial system. The physical creation of the buildings and the entire lifetimes of people who live and work in the financial industry, its entire lives, you have to feed them with energy in the buildings they live in, the cars they live in, and then you have the payment processing terminals as well, and then you have the handling of cash, you have banks, you have vaults, you have ATMs, like enormous amounts of energy. The comparison, well, in total, the amount of energy used by the banking industry, including branches and all that stuff, I think it was estimated at around 650 terawatt hours, that's one estimate that somebody did maybe four years ago, so not the most, let's say, established number, and Bitcoin would be doing one tenth of that at the moment, although obviously the size difference is still humongous, 500 billion transactions, not including cash, by the way. I'm being generous, too. We're not including the military, or the courts, or the political system, which enforces the monetary policy and enforces the monetary system. I'm not sure we won't be having a military anymore if we are all running Bitcoin. Dan. Well, I think we can all agree that we can't compare the two things. No, they're very hard to compare. Well, this is the key point because we're trying to compare things which aren't comparable, and everything's relative. Dan, I am as a Bitcoiner, a big Bitcoin fan, obviously. I am also concerned about energy usage. I see these charts, and I do think there must be a better way for us to potentially be using the same amount of power as China to secure the network. I ask the question, the network is secure now. The incentives for miners and the incentive in the market is for more ASICs to be produced, more people to be mined in because of the rewards from the block subsidy and mining fees. But is there a better way, and how much security is enough? So proof of work solves something that previously was solved through a similar proof of stake system. So proof of stake is an old technology. It's more of a political mechanism, whereas proof of work is using something fundamental which is about physics. Proof of work, there is no way to shortcut proof of work. You have to expend the energy. There's no shortcut. There's no way to get around it within the realm of physics. Proof of stake has political attack vectors that are still undiscovered. Proof of stake is untested. It's also something that's from the legacy system, and has numerous different gaping holes in its potential capabilities. Now, is it interesting? Sure. Does it work? We're not sure yet, and are we willing to try something that is not rooted in physics? We can, but it is less secure than Bitcoin, and will always be less secure than it. To highlight the environmental concern, I'm a huge environmentalist. I love the earth. I love hiking. I like to reduce as much consumption as I have. I have low time preference for the Bitcoiners out there. Reducing my current consumption and saving my money. By reducing my consumption, I like to increase the number of available goods and services to everyone here now. I believe in a minimalist philosophy in life. So I would love to be as minimal as possible, but Bitcoin takes the most minimal amount of energy possible to prove the work that is necessary to protect the network. So I think there's been a lot of systems that have been tried. I think Bitcoin does it extremely efficiently. Michelle, do the benefits of Bitcoin outweigh the cost? Well, as I just said before, there's absolutely no way of actually quantifying the benefits because they are contextual. So every individual using it for a different thing may derive a different utility from it. And if you aggregate all of that together, it would be great, but you can't do that bottom-up analysis. Which then also means that if you want to compare it again, these are transactions. As you said just before, you can compare it to digital gold, right? It can be used as a payment method. It can be used as a censorship-resistant way of transferring value. So you need to take these things into account as well. And one thing I think that hasn't even been mentioned today is Bitcoin's used as a public notary. So that you can actually notarise billions of data points in one single transaction. And that is a use case that I think will definitely be very important in the future. So if you take all these things into account, then what exactly are you comparing it to? Something completely new that encompasses all these different uses? Well, I fully agree that it depends on the person. Look, if you are living over here in Germany and you want to send money to the other side of the ocean, and you can choose between using Visa or you can use Bitcoin, well, then you probably don't have much of an issue going through Visa. So why would you use a system that has a footprint like Bitcoin has, but consider being in... To avoid bank fees. So I invoice all my clients in the US and save 3.2% surcharge on exchange rate fees. So there you go. If that's based, I should probably save around $15,000 next year. So how was that going during the 2017 bubble? The bubble was relevant. I invoice and I immediately cash in. But I avoid country to country exchange rate fees. So there is a use case there of Bitcoin over Visa. I just wanted to point out the transaction fees kind of exploded at the time, which is actually probably good from a developer perspective. But you can play the transaction fees. You can time your transaction. That's only if you want immediate settlement. Yeah, and run the risk that your transaction doesn't get processed until... Yeah, I mean, it's always kind of... Sorry, I don't mean to Bitcoin you as an independent user moderator. But the one... Essentially one month of very high fees over a 10-year lifespan of a protocol when it gets used as an argument is kind of... It's a little bit weak because... A bit cherry picking. Yeah, I mean, I'm not having... Well, that's the direction where it's going, right? Somebody moved... What was it the other day? Somebody moved $240 million for about $3. To be clear, transaction fees on layer one are based on bytes. So the size of the transaction in bytes, the data size. Transactions on layer two, which is lightning, are based on the size of the value that you're moving. So everyone kind of knows. Yeah, so it's not that I don't appreciate your point, so I have a concern over the energy usage, but there are definite use cases of Bitcoin over Visa or MasterCard or bank to bank. It's usually over international borders. Yeah, sure, but just what I was pointing out is that in the end, the block subsidies is going to zero in the long run. The network will be more dependent on transaction fees, and then it's going to matter a whole lot more, obviously. And the process takes 120 years. But wait, let's take a step back. Why are we even proof of work, right? So I think I was originally trying to say something about Venezuela because I was trying to get into something positive. This is Venezuela. I know a lot about it. Because in Venezuela, if you have no banking system or the banking system has completely lost your faith, then you might actually think, OK, Bitcoin is not that bad or it's the only option I have. So, yeah, I'll definitely use it. It offers a means when there is no means, although I have to add, obviously, in Venezuela. At some point, they started having power outages and then Bitcoin is not useful anymore either. But neither is the existing banking system. Well, obviously. And actually Bitcoin works with satellites and radio, so, yeah. You don't want to have Bitcoin minus around when you're running short on energy. You don't want to have Fiat where you can't get out of the ATM because the ATM doesn't have electricity. So in any case, in Venezuela, they would definitely have a more positive view towards Bitcoin even if the energy costs are that high. It depends on the person. That went really quickly. If anyone wants to learn more about Venezuela, I've done three interviews with people who live there, work there, or work with people there, and try to discover how the financial system is working. It's really interesting stuff to learn all about that. A round of applause for the guests.