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What Happens When Bitcoin Miners Take Over Your Town
- onychomys 9y agoThe most surprising thing in that article is that for a new mine to be profitable, it will require more power than an AWS data center. Like, how is that even possible?!? That's amazing!
- blattimwind 9y agoAmazing in a really bad way. I can't wait for fake internet money being killed off.
- valine 9y agoIt would be nice to have readily available GPUs at a reasonable price again.
- bringtheaction 9y agoThere exists other means of achieving consensus in blockchains than the power eating monster that is proof-of-work [1]. For example, proof-of-stake [2]. We can have our fake internet money and be environmentally responsible too. [1]: https://en.bitcoin.it/wiki/Proof_of_work https://en.bitcoin.it/wiki/Proof_of_work [2]: https://github.com/ethereum/wiki/wiki/Proof-of-Stake-FAQ https://github.com/ethereum/wiki/wiki/Proof-of-Stake-FAQ
- moccachino 9y agoThis is interesting. How would people acquire coins in the proof-of-stake model?
- proaralyst 9y agoThe more coins you lock into an investing wallet, the more likely the network is to choose you to mint a block. In practice it's quite a bit more complex but that's the basic idea.
- jdiez17 9y agoSame way as in a proof-of-work blockchain. Miners (validators) receive the transaction fees plus some number of coins per block that is included in the chain, but instead of anyone being able to mine a block (and thus requiring a very high difficulty), only nodes that have a large number of coins frozen (the stake) are allowed to publish new blocks.
- s73v3r_ 9y agoSo, the rich get richer?
- mywittyname 9y agoIt's not that different our current economic model. You can choose between spending the cash you have now, or "locking it up" (i.e., buying bonds/equities) and receiving a dividend. With PoW, it's still the case that the "rich get richer," because you have to be pretty wealthy in order to afford the equipment to mine any reasonable amount of coins.
- s73v3r_ 9y agoYeah, but this stuff is supposed to make things much better. If it's the same as our current system, I don't see much reason to change.
- moccachino 9y agoOk, so coin holders are allowed to validate transactions between other coin holders, and for that they get more coins. But if I have no coins, I have to buy them from a coin holder with another form of money. So this system would require the original issuer to be someone that you trust and have a reason to do business with in the first place right? So it's kind of like banks and central banks today? I realize ICOs by startups are a thing but I kind of want to just ignore that whole phenomenon... I don't own any kind of coin and don't understand it well enough, but this seems to me to be a technology that will eventually be very useful.
- 9y ago
- tim333 9y ago> How would people acquire coins in the proof-of-stake model They usually sell them in an initial offering. Of the top 8 coins on coinmarketcap only 4 have mining. Ripple, NEO, Stellar and Cardano don't.
- deleted 9y ago[deleted]
- sp332 9y agoThe same number of bitcoins (well, on average) are made every day. A bigger mining rig just gets you a bigger slice of the same-size pie.
- driverdan 9y agoServing web pages, static files, and DB transactions requires a trivial amount of processing power compared to cryptocurrencies. The per-square-foot power density of mining is 10x or more than that of a standard rack server.
- nathanaldensr 9y agoWhat a sad, sorry state we as a species are in when energy is used for such purposes. Greed does know no bounds.
- andrepd 9y agoAs opposed to: gold/silver/diamonds mining (greater energy and human cost), arms manufacturing (orders of magnitude larger industry), etc. Why single out bitcoin (which is actually offering a useful service that critically needs PoW to work)?
- onychomys 9y agoWell, offering a service, anyway. We could have a long debate about "useful".
- jonknee 9y agoWhat useful service? Scams as a service?
- waynecochran 9y agoIf it wasn't for all the speculation and grotesque scams surrounding it could actually be useful as a decentralized currency. But we can't have nice things.
- ianai 9y agoThis might be a learning moment. Without government, aka anarchy, society would quickly devolve into bitter, cruel chaos.
- unknown_apostle 9y agoLong ago given up on cryptocurrency, at least as long as current technical problems exist. But that without government we'd devolve into "bitter, cruel chaos" is definitely not a lesson. That's "not even wrong" level stuff.
- thisisit 9y agoAs much I empathize with the people in Eastern Washington this one is similar to any other stories out there like "This is what happens when X take over your town" and x can be Walmart, Amazon HQ, or any other big company. Things like price increases follows as people start moving and most of the time smaller towns are not equipped to handle the influx.
- gowld 9y agoWhat's your point? A problem's non-uniqueness doesn't make the problem boring or solved.
- walrus01 9y agoBitcoin mining has by no means "taken over" Wenatchee and East Wenatchee. If you go there and drive around what you'll see is ordinary businesses, fruit warehouses, huge numbers of fruit farms, etc. And then the datacenters which are in East Wenatchee and Quincy. It's just a weird aberration of people setting up super cheap facilities for ASIC mining that need huge amounts of electricity, but very little network infrastructure. Compared to the Sabey and Vantage datacenters an Ethereum mine needs only a few dozen Mbps for a WAN link, at most.
- ipython 9y agoAll I can think of while reading this story is... this must be what the Rapa Nui must have felt like as they cut down the last tree on Easter Island to erect even taller mo'ai (statues) I always wondered how such a clearly talented and advanced civilization could paint itself into a corner. Now I guess I understand.
- pakitan 9y agoSomeone said that's the solution to Fermi's paradox - every sufficiently advanced civilization eventually spends all its resources on cryptocurrency mining :)
- jorvi 9y agoFunny, but it actually contains a sliver of truth. There is a theory called ‘The Great filter’ that tries to explain the Fermi paradox. It basically posits there is some almost insurmountable barrier that must be vaulted for a species to become spacefaring. Whether that barrier is behind us (the evolution of intelligent life) or ahead of us (no idea what, avoiding interplanetary warfare possibly?) has not been conclusively theorized.
- DonHopkins 9y agoThe Quintans in Stanislaw Lem's novel "Fiasco" were too busy mining cryptocurrency to make contact and communicate with. https://en.wikipedia.org/wiki/Fiasco_(novel) https://en.wikipedia.org/wiki/Fiasco_(novel)
- digi_owl 9y agoOr maybe generalize it to frivolous computing.
- wyager 9y agoWe are many orders of magnitude away from “the last tree”. There’s plenty more energy available from the sun, and we should be happy that there’s a market encouraging us to get it.
- mhb 9y ago
- awt 9y agoIf Bitcoin succeeds, it will consume 51% of the earth's energy supply. If you want to claim this is bad, you will need the support of some sort system of universal ethics.
- ncallaway 9y agoYour argument tries to set a trap for anyone responding, by forcing a debate on moral relativism. So, let me counter with this question: If we presuppose we can't label anything "bad" without settling that debate, then is murder "bad"? If you think murder cannot be defined as "bad", then why have we outlawed it?
- awt 9y ago> Your argument tries to set a trap for anyone responding, by forcing a debate on moral relativism. True. > If you think murder cannot be defined as "bad", then why have we outlawed it? The original comment has already been downvoted and is on its way to becoming invisible, so I see no point in having the debate. [EDIT] Or for that matter, I don't see the point of taking any unpopular position on HN.
- jbob2000 9y agoThis sucks. Poor people have trouble paying electricity bills. In come the bitcoin miners, who drive up the cost of electricity, causing the poor to fall behind on bills and potentially become homeless. All so they can drive a fancy Land Rover. Fucking stupid. This gold rush needs to die.
- gunnr15 9y agoThis is happening north of the boarder as well, but not just with Hydro power. Because natural gas prices are so low ATM, you are starting to see long-term Power Purchase agreements for sites in Southern Alberta. I can't see any reasonable argument for putting more carbon in the atmosphere for such a speculative asset/business model.
- dmm 9y ago> I can't see any reasonable argument for putting more carbon in the atmosphere for such a speculative asset/business model. I can't see any reasonable argument for putting more carbon into the atmosphere for heating mcmansions, driving trucks as a passenger vehicles, or maintaining a perfect lawn, but other people seem to disagree. The problem is that the cost of carbon release is too low. If we internalized the carbon externality with a carbon tax it would give people the pricing information they need to make good decisions.
- giarc 9y agoAlberta has a carbon tax.
- klondike_ 9y agoThe more I read about it the more Bitcoin reminds me of the California gold rush. Bitcoin's current price is based on pure speculation, it's useless as an actual currency at the moment. What happens to places like this when the value crashes?
- freejulian 9y agoWhy do you think it's useless as a currency? I've noticed "We accept bitcoin" signs more and more frequently. I've also used it to pay friends who live abroad. I don't think you've actually ever used bitcoin but apparently you have plenty of opinions.
- dvlsg 9y agoI've seen companies dropping support for it more and more frequently, too. Stripe, for example.
- freejulian 9y agoWow, you named one. Congrats. I'm referring more to small businesses. To name a few I've seen: A bed and breakfast I stayed at in Tulum, a cellphone repair shop not far from my home, a small theater also near my home. Bitcoin has better characteristics than the USD. If people continue to see that, it'll succeed. There's of course an element of speculation when buying bitcoin -- I'm hoping other people see value in a currency which can't be manipulated by governments, can't be confiscated, can't be censored, has a known supply, can transfer instantly anywhere in the world, and anyone can open an 'account' with. To quote Julian Assange: "Bitcoin is the real Occupy Wallstreet".
- Kevin_S 9y agoDo you live in California? Cause that would explain things.
- WorldMaker 9y agoStripe is an entire payment network, which means many websites lost Bitcoin support when Stripe left. It's a bit more than just "one". I think Steam dropping Bitcoin support is a particularly useful canary as well. Valve said that the usage they saw of Bitcoin was relatively high (a lot of people invested in Bitcoin like videogames, to no ones surprise), but the exchange volatility and increasingly slow transaction times got to be enough that Valve was more often than not losing too much money on purchases by the time Bitcoins were exchanged for USD.
- kfk 9y agoIt's worth pointing out that compared to other "useless" products of us humans like diamonds etc. bitcoin is rather ok environment wise. Green electricity goes up and down and can't be stored so bitcoin is a good way to create some "value" as those guys in the article are doing. On the value side, "trust" is one of the most expensive commodities on earth. More "trust" creates more opportunities for business. Think if you could not trust a $1 bill to be exchangeable for some product. I think if you look at crypto as a way to increase trust in whatever area, you can start to see the value. Think of it in terms of Nash equilibrium, like a prisoner dilemma where you can "trust" your prison mate and both get more value out of collaboration.
- gowld 9y agoBut does bitcoin create trust? It's a highly volatile currency. Maybe it's better than the Zimbabwean dollar, but it's not a foundation for the world economy.
- kfk 9y agoAt the moment of writing there is $394B worth of "trust" in the crypto coin markets. Before you say it's speculation, let me point out that speculation still operates on trust: the trust of exchanging coins on the market, the trust the blockchain would not lose their transactions, etc.
- user5994461 9y agoThere is no dollar amount attached to bitcoin. The moment a fraction of the coins are being sold, the exchange rate will drop dramatically. Not to mention that a vast portion of the coins are probably lost in forgotten wallets, while the rest is in the hands of the early investors who will never sell it to not drop their value.
- jeanmichelx 9y ago> Green electricity goes up and down and can't be stored so bitcoin is a good way to create some "value" as those guys in the article are doing. If you think bitcoin miners shut down on low wind day and only use "excess" power you're delusional.
- vinhboy 9y agoAs someone who mined bitcoin at home before, stories like this is the reason why I don't advocate for bitcoin. This is a slap in the face of a decentralized system. When I stopped mining a few years ago, almost half of bitcoin's mining power was coming out of China. I don't know how hardcore bitcoiners live with this contradiction to their ideals.
- lukifer 9y agoThis is why I think Proof of Stake is destined to outcompete Proof of Work. The costs are drastically lower in both electricity and hardware; and in practice, PoW is basically PoS with extra steps.
- scotty79 9y agoAlmost half of thr stuff you buy comes from China or somesuch. Why butcoin should be any different?
- wyager 9y agoITT: “The vague notion of ideal resource allocation I’ve come up with after 15 seconds of thought is the correct one.”
- Nazare 9y agoOne could probably intellectually power a small third world country, if one rerouted all the mental energy that went into deriding Bitcoin's energy consumption into something useful (like getting more people to click on ads, HFT, or random gridsearch for GPU deep learning on MNIST).
- s73v3r_ 9y agoIt sure as hell isn't, "That guy has more money, so give it to him."
- gascan 9y agofor comparison, even the high-end estimates of bitcoin’s total current power consumption are still less than 6 percent of the power consumed by the world’s banking sector. Indeed, congratulations Bitcoin. You are able to process 2.3 transactions per second using only 6 percent of the power of the entire worldwide banking sector! * VISA: 2,000 transactions per second * ACH: 800 transactions per second * MasterCard: 3,000 transactions per second (?) * NYSE: Who even knows? * Etc...
- ryanlol 9y agoWho cares? Bitcoins power use is hardly linked to it's transaction rate.
- annabellish 9y agoIndeed, transaction rate at bitcoin's highest points has been very low. Power usage is strongly correlated to price, while price isn't correlated to... anything.
- tim333 9y agoPrice is correlated to power usage. There's an odd sort of feedback loop where a rising bitcoin price causes more mining which raises the price of bitcoin and so on exponentially. You may ask why not just walk away and let bitcoin return to zero but there are a large number of people in the mining industry and similar with incentives to promote and prop it up.
- s73v3r_ 9y agoI would imagine people who like to breathe clean air and drink clean water would care.
- ryanlol 9y agoOnly the people who pay little attention and wildly overestimate bitcoins impact on these things. Besides, the "Who cares?" was mostly aimed at the irrelevant comparisons made by gascan.
- miesman 9y agohttps://www.electricitylocal.com/states/washington/east-wenatchee/ https://www.electricitylocal.com/states/washington/east-wena...
- skybrian 9y agoI wonder why the price of electricity there doesn't go up? It's not like they can't find buyers for it.
- Nazare 9y agoBecause miners would move to places where the electricity is cheap. In theory you could always keep raising the price of electricity, because everybody needs to buy electricity to keep the lights on. You can't have your cake and eat it too. You can't become a tax haven for international companies either, and then raise those taxes when you have some customers.
- skybrian 9y agoThis doesn't explain why not.
- Nazare 9y agoBecause long-term you'll end up with a situation, where your special profitable customers leave for greener pastures (those willing/able to pay higher fees) and your base customers can't or won't afford it. Short-term they can make some money raises the prices, until supply-demand equilibrium is reached again. But then you shoot yourself in the foot for the long term.
- s73v3r_ 9y agoBut your special profitable customers aren't paying anyway.
- gowld 9y agoThe article barely touches on a strong solution to this problem: Charging (a lot) more for high marginal electricity use. The local power authority can extract most of the value of mining.
- Nazare 9y agoThat is basically anti-net neutrality, but for energy, instead of information. Why should I pay more if I use my laptop for mining crypto, instead of playing the latest AAA video game on the highest settings?
- wyldfire 9y agoFor some reason, it seems that lots of people find cryptocoin mining amoral. It's pretty unclear to me how they got there, but I can only guess that it's something like "free money" or a "get rich quick scheme." To think that I think is to discount the capital and operating expenses, to say nothing of the risk taken on.
- s73v3r_ 9y agoTo me, it's the fact that all this power, all these computing resources, are basically being thrown away. Nothing useful is done with the computational power. If it was doing something like folding proteins or otherwise using that computational power to better humanity, then it'd be different.
- wyldfire 9y agoIt's really not, though. It's just associated with something that "seems greedy". I could argue that "nothing useful is done with the computational power used for playing video games or watching and producing films." I could argue that, but I think that line of reasoning suffers the same way yours does. It requires a value judgment and you think that the cryptocoin eco system has no value. Cryptocoins have tremendous value for remittances alone. We can argue whether it's optimal allocation of resources and I think that is a healthy debate. Mining is required for trustless, decentralized currencies with provably equitable distribution. But we could probably forfeit some of the latter and eliminate the proof-of-work entirely (in fact it's already been done). Another option is to make the proof-of-work of greater independent utility from the transaction itself (also has been done).
- wyldfire 9y ago> ... Carlson suspected that many of these stalwarts were probably doing so irrationally ... others had found a way to making mining pay. > ... separated these survivors from the quitters and the double-downers, Carlson concluded, was simply the price of electricity...knew that if he could find a place where the power wasn’t just cheap, but really cheap, he’d be able to mine bitcoin both profitably and on an industrial scale. Is the electricity cost really that significant when compared with the amortized cost of the mining equipment itself? Lo those many years ago that I looked into mining, it was marked by extreme risk. New ASIC designs would emerge that would obsolete the old ones. Retailers would have extremely long and unpredictable lead times for new equipment. You could bet on the wrong manufacturer and end up with no product or late product, which would arrive after your competition delivers a difficulty increase. I would wager that this system finds equilibrium marked by optimism, such that everyone has at least a minimal net operating loss. But maybe if you get on the leading wave of ASIC production somehow you can stay ahead?
- Animats 9y agoBitmain is already at 10nm Bitcoin ASICs. That's the commercial state of the art right now. 7nm fabs are just starting to come on line.