Recently Vitalik Buterin, the founder of the cryptocurrency Ethereum, donated 500 ETH coins, which worth $2,030,580, to India’s crypto COVID-19 relief fund. See the news report here.
As BitCoin, Ethereum uses Proof-of-work to keep its block-chain secure, which necessarily consumes huge amount of electricity. Also as BitCoin, ETH’s price is very volatile. This makes it unsuitable for day-to-day payment. So far, the only real “application” of Ethereum is perhaps speculation.
So should any aid organization accepting ETH donations, which seems to me to be money obtained in quite unethical ways.
If India’s COVID-19 relief fund is similarly impactful to GiveWell’s Maximum Impact Fund, it can use $2 million to give people thousands of total years of healthy life (or “save” hundreds of lives).
It’s hard to imagine that the risk of losses to crypto investors has much ethical importance relative to those years — everyone who buys or sells ETH should understand that they are willingly taking on risk.
As for electricity: Via this calculator, it seems like $2 million in ETH requires roughly 60,000 kWh of electricity to mine. (The transfer takes roughly 100 additional kWh.) For comparison, a single intercontinental flight requires ~12,000 kWh per person.
If Vitalik Buterin had access to lifesaving medicine for hundreds of people, but he had to fly across the globe with four other people to deliver it, to what extent would it be unethical for him to do so?
The situation is more complicated than that — most instances of crypto use, especially high-profile ones, presumably make it more likely that others will use crypto —but I don’t think it’s so much more complicated that it becomes unethical for the relief fund to accept the money.
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$2 million is an unusually large crypto donation. Might it be unethical to accept donations below a certain size, since the transfer cost is constant?
I’d leave it up to the charity in question to determine how much good they can do with a given donation, and how to weigh that against the environmental cost. A blanket answer of “no, it’s always unethical” seems very unlikely to be right.
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That’s without getting into the question of what counts as an “ethical” source of money. Many people would argue that Bill Gates’s donations are unethical because of his business practices, or that anyone who earns-to-give as an investment banker is doing something unethical. But because of those donors, millions of people are alive who otherwise would have died; ethical tradeoffs are part of life, and these seem like good trades to make.
I know there were articles/calculations that claim this, but I still am a bit skeptical if it really is similarly impactful. I wish GiveWell would make a blog post to comment on this, and do their own shallow analysis. If it gets to the end of the year, or even to the end of June, and they don’t make a comment about whether donations for COVID-19 relief in India (i.e. providing oxygen) were as impactful as donating to some of their top charities, that would be disappointing.
I might email GiveWell soon to ask them if they plan on making a blog post about it!
I have no opinion on the impact of the fund, other than having updated slightly on a few Forum users’ views that this area might be similarly promising to GiveWell’s core areas. But if you think the fund is e.g. only 1⁄10 as impactful per dollar, saving dozens of lives with a plane trip still seems like a good deal.
Emailing GiveWell is generally a good idea! They tend to be quite responsive.
Yes, these are extremely energy efficient ways of saving lives. I think most people would think it is ethical to save lives from radon gas causing cancer, despite the solution being more ventilation. If it costs $5 million to save a life (typical value in the US), since electricity costs about $0.10 a kilowatt hour, then we would be willing to spend 50 million kWh to save a life! In reality, not all of the cost goes to energy, but a lot of the cost would be saved in the form of heating fuel, which is much less than $0.10 a kilowatt hour. This can be used to show that the energy used to fly flowers grown in Africa to Europe is also a relatively energy efficient way of saving lives.
Thanks. In the example raised in my question, I do agree that the donation is perhaps acceptable. Though the comparison with Bill Gates is perhaps not very appropriate. Microsoft does provide a tangible service. In contrast, the contribution of cryptocurrency to the world appears to be very much negative.
Is this based solely on the electricity usage? You haven’t given any other reason why we should assume that crypto money was obtained unethically—and the electricity reason seems to be a pretty weak one to me.
Why is electric usage a weak argument? BitCoin alone consumes 144.28 TWh per year. That is more that what Sweden consumes a year. And what we get for this in return?
Given that we are talking about Ethereum, Bitcoin’s energy usage is completely irrelevant to this discussion expect for Ethereum having the best chance to stop Bitcoin from wasting so much energy.
While Ethereum currently uses proof-of-work they are working on transitioning to proof-of-stake, so I would book the electricity it currently uses as growing pains of a new technology.
Ethereum currently has real world usages such as https://kleros.io/ that does neutral conflict arbitration.
While Ethereum’s current prediction markets aren’t very good at providing probability for events they will mature and provide information about events that’s valuable.
Once Ethereum switches to proof-of-stake the transaction costs will also go down and projects that currently aren’t viable will become viable.
I’m aware that Ethereum has just announced that they will switch to Proof-of-stake. I hope they succeed, but I am not optimistic about it. If you are patient enough, here are 1580 comments on this topic—https://news.ycombinator.com/item?id=27194586