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Yes, there are Chinese bitcoin miners paying even less than that for power. China has a quarter of the world's hydroelectric generating capacity, but its utili
by pash 11y ago
Yes, there are Chinese bitcoin miners paying even less than that for power.
China has a quarter of the world's hydroelectric generating capacity, but its utilization rate is low, far lower than in places like the Unites States, Canada, or Norway. This is primarily because much of the potential hydropower cannot be absorbed by the grid in western China, where many dams have been built over the past decade on the rivers flowing off the Tibetan plateau. Bitcoin mining operations are the rare customers that can show up near an isolated, idle hydropower station and gobble up electricity from turbines that otherwise wouldn't even be spinning.
The other factor I mentioned, that bitcoin mining in China provides an added return in the form of expatriated revenue, does not enter into the calculation of marginal cost. But it does effectively add several percent—the price of moving money out of China via other mechanisms—to Chinese miners' marginal revenue. And it's marginal revenue minus marginal cost that matters, not marginal cost alone.
- aianus 11y agoWhy are these hydroelectric plants not connected to the main grid that powers Shanghai and Beijing? If the turbines are otherwise literally turned off, surely the transmission losses become irrelevant?
- mrb 11y agoI don't believe large mining farms in China pay less than 2 cents per kWh. But if you have sources, quote them. I would like to be proven wrong. For example the lowest Chinese costs I remember reading were from a remote farm who benefits from hydro power and admits that paying 3 cents per kWh is already "on the cheap side": https://bitcointalk.org/index.php?topic=1072474.msg11472186#msg11472186 https://bitcointalk.org/index.php?topic=1072474.msg11472186#... Farms don't usually disclose how much they pay (strategically sensitive number), but I always do some back-of-the-napkin math when possible, eg. when they release approximate figures, and I usually calculate somewhere between 4 and 10 cents per kWh.