5 ms·

This is a rehash of a previous post of mine regarding electricity consumption: Back in the days where all our electricity came from fossil fuels, I completely

by yrral 6y ago

This is a rehash of a previous post of mine regarding electricity consumption: Back in the days where all our electricity came from fossil fuels, I completely agree that marginal electricity usage was bad for the environment. However I think that thought has persisted with us even though it is no longer true 100% of the time. With renewables sometimes the marginal cost of electricity to our environment is near 0 or even negative (eg, during periods of higher winds and lower demand.) I predict that in the future as bitcoin mining becomes more and more of an efficiency game that you will see bitcoin mining be kind of a load balancer the grid, effectively turning off during peak demand (or low supply) times and contributing to the base load during regular times. For example, it may even help the economics of building new wind plants. Eg, currently it may not be profitable to build a new wind plant because base load is too low that the excess power generated would need to be sold off at 0 or even negative prices. However if bitcoin mining could be turned on during these times and off during periods of high demand, there will need to be fewer peaker plants in operation and it would positively affect the economics of opening a new wind plant. Bitcoin mining only cares about the cost of electricity at a given time, it is not like most other electricity demands that are very time based. With the large variance of electricity generation by renewables, I think bitcoin can in the future help smooth demand according to the real supply/demand curve. It's kind of like a different implementation of the Tesla utility grid batteries. Instead of deploying power, you force the grid to build more renewable capacity (that the miners are paying for) that you use except in peak periods, where you turn off and effectively provide the grid with more power. Edit: here is an article of a bitcoin mining company doing just that: https://www.bloomberg.com/news/articles/2020-09-01/bitcoin-miner-is-scoring-700-profits-selling-energy-to-grid https://www.bloomberg.com/news/articles/2020-09-01/bitcoin-m... https://www.forbes.com/sites/christopherhelman/2020/05/21/how-this-billionaire-backed-crypto-startup-gets-paid-to-not-mine-bitcoin/?sh=1a6f86e97596 https://www.forbes.com/sites/christopherhelman/2020/05/21/ho...

knuthsat 6y ago
Using fossil fuels for electricity is very nice. Imagine all the forests that stayed intact in remote places of the world that just started burning oil.
donutloop 6y ago
Nano coin is the answer
eternauta3k 6y ago
Only turning on miners when electricity is cheap lowers your ROI.
- sneak 6y ago
  I think that depends entirely on the delta between "cheap" and "normal" electricity.
obviouspenguin 6y ago
I don't think this will work out for several reasons: 1) Peak power usage is when people are awake - this is when you want transactions to happen. 2) This wouldn't reduce the need of peak plants, since you aren't generating power when mining for bitcoin. How would increasing overall energy consumption require less energy generation? If renewables could ramp up/down quickly and not be dependent on external factors - that would remove the need for current peak plants - which is usually nat gas.
- gruez 6y ago
  >1) Peak power usage is when people are awake - this is when you want transactions to happen. Mining is global, so this isn't an issue. It might be peak period in europe right now (2PM UTC) but not in asia or western US. >This wouldn't reduce the need of peak plants, since you aren't generating power when mining for bitcoin. How would increasing overall energy consumption require less energy generation? This is a big unknown, because the economics depends entirely on the cost of electricity vs the cost of equipment. If electricity cost dominates, then it'd make sense to shut down mining operations during periods of peak usage (because electricity prices are higher), but if equipment costs dominate then it'd make sense to mine 24/7.
cecja 6y ago
England lost 80% oft their forest to industrialization before fossil fuel came up.
tgv 6y ago
As long as we need coal or gas plants, bitcoin mining is a net negative for the environment. It also doesn't add anything of value and facilitates crime. If you want to push bitcoin to low demand hours via pricing, you're increasing the price for the rest of us. It's a lose-lose-lose situation for people.
FabHK 6y ago
> bitcoin mining be kind of a load balancer Given that the difficulty adjusts only every 2 weeks, that means that the time to find a block will vary enormously during the day as the demand/supply imbalance varies. That'll make BTC even more annoying than it is already (it's currently peak electricity demand where most of the miners are sitting, so I'll have to wait 3 hours for my 6 confirms?). At any rate, you're basically saying that with renewable energy it's ok to waste energy, and I think we are not quite there yet.
- gruez 6y ago
  >Given that the difficulty adjusts only every 2 weeks, that means that the time to find a block will vary enormously during the day as the demand/supply imbalance varies. Isn't this a non-issue because mining is global? Peak time in europe doesn't mean it's peak time in north america or east asia.
  - FabHK 6y ago
    Interesting question. If miners are approximately evenly distributed across timezones, it could be indeed the case, say, that those where demand is currently at its peak (following the sunlight) switch off their mining as electricity is expensive, and then switch back on as the sun leaves and electricity demand (and prices) fall. I had assumed that mining is concentrated more. Empirical question.
SamBam 6y ago
I think that this is a great big stretch to try and justify BitCoin mining. I don't know if you personally own BitCoin, but I would say that this is a prime example of motivated reasoning. > or even negative I can see no way that consuming more energy can result in an improvement to the environment (unless that energy usage was directly related to improving the environment). There is absolutely no time where you can say "the more lights I leave on, the better the climate will be," no matter what your energy source is. In general the rest of your argument can be summed up as "if there is more demand for electricity, more utilities will build renewable plants." The problem with this argument is that there is already far more electricity being used than renewables can supply, so there is already all the incentive needed to build more plants. As for the present-day, a BitCoin mining rig consumes whatever proportion of fossils are inputs to that grid. If a grid is 50% renewable and 50% fossil, you can't pretend that you're consuming only the renewable portion. Indeed, the opposite may be true: renewables generally just produce their max output, the fossils can ramp up and down to meet higher demand. So it's best to think of the fossils as the ones that are rising to supply any "unnecessary" usage. > where you turn off and effectively provide the grid with more power This is again pretty striking motivated reasoning. Yes, if we turn off all non-essential lights during peak hours we are kind of "supplying the grid" with more energy, but if we build a huge energy-suck, and then occasionally turn it off, we don't get to pretend we are actually energy suppliers. If I set fire to $1000 of my company's money every day, I don't get to pretend I earned them $1000 on the days when I don't.
- bhupy 6y ago
  I think that this critique severely mischaracterizes the argument: we're not just talking about the merits of blindly consuming electricity ("leaving the lights on forever"), we're talking about what happens when you attach a financial incentive to consuming electricity structured in such a way that your net profit increases if you spend less on that energy. For Bitcoin miners, the input is energy, and the output is money. This means that there is now possibly an incentive to make available cheaper sources of energy, and right now that happens to be wind and solar (at least per kWh). It's worth litigating whether such an incentive actually exists, or if it does exist whether it will actually stimulate green energy development, or whether cheap energy is always going to be clean energy. These are interesting debates. But it's impossible to talk about Bitcoin as long as we mischaracterize the arguments.
lxgr 6y ago
> Bitcoin mining only cares about the cost of electricity at a given time I think this is the fallacy in your argument: In the absence of a block reward, Bitcoin mining seems like a purely demand-driven activity. The demand is people wanting their transactions be confirmed on-chain, which seems entirely uncorrelated with electricity prices. On the other side, you have miners wanting to operate at marginal profit. Total mining expenses would therefore be driven to always exactly match the total monetary value of being able to transact. In other words, the demand for transaction confirmation drives the demand for mining, which in turn drives the demand for electricity. In a world in which the only electricity sources available are renewable, I'd agree that Bitcoin mining has no net impact on the environment. In any other world, some of that demand for electricity will be satisfied using fossil fuels, directly or indirectly.

by yrral 6y ago

knuthsat 6y ago

Using fossil fuels for electricity is very nice. Imagine all the forests that stayed intact in remote places of the world that just started burning oil.

donutloop 6y ago

Nano coin is the answer

eternauta3k 6y ago

Only turning on miners when electricity is cheap lowers your ROI.

sneak 6y ago
I think that depends entirely on the delta between "cheap" and "normal" electricity.

obviouspenguin 6y ago

I don't think this will work out for several reasons: 1) Peak power usage is when people are awake - this is when you want transactions to happen. 2) This wouldn't reduce the need of peak plants, since you aren't generating power when mining for bitcoin. How would increasing overall energy consumption require less energy generation? If renewables could ramp up/down quickly and not be dependent on external factors - that would remove the need for current peak plants - which is usually nat gas.

gruez 6y ago
>1) Peak power usage is when people are awake - this is when you want transactions to happen. Mining is global, so this isn't an issue. It might be peak period in europe right now (2PM UTC) but not in asia or western US. >This wouldn't reduce the need of peak plants, since you aren't generating power when mining for bitcoin. How would increasing overall energy consumption require less energy generation? This is a big unknown, because the economics depends entirely on the cost of electricity vs the cost of equipment. If electricity cost dominates, then it'd make sense to shut down mining operations during periods of peak usage (because electricity prices are higher), but if equipment costs dominate then it'd make sense to mine 24/7.

cecja 6y ago

England lost 80% oft their forest to industrialization before fossil fuel came up.

tgv 6y ago

As long as we need coal or gas plants, bitcoin mining is a net negative for the environment. It also doesn't add anything of value and facilitates crime. If you want to push bitcoin to low demand hours via pricing, you're increasing the price for the rest of us. It's a lose-lose-lose situation for people.

FabHK 6y ago

> bitcoin mining be kind of a load balancer Given that the difficulty adjusts only every 2 weeks, that means that the time to find a block will vary enormously during the day as the demand/supply imbalance varies. That'll make BTC even more annoying than it is already (it's currently peak electricity demand where most of the miners are sitting, so I'll have to wait 3 hours for my 6 confirms?). At any rate, you're basically saying that with renewable energy it's ok to waste energy, and I think we are not quite there yet.

gruez 6y ago
>Given that the difficulty adjusts only every 2 weeks, that means that the time to find a block will vary enormously during the day as the demand/supply imbalance varies. Isn't this a non-issue because mining is global? Peak time in europe doesn't mean it's peak time in north america or east asia.
- FabHK 6y ago
  Interesting question. If miners are approximately evenly distributed across timezones, it could be indeed the case, say, that those where demand is currently at its peak (following the sunlight) switch off their mining as electricity is expensive, and then switch back on as the sun leaves and electricity demand (and prices) fall. I had assumed that mining is concentrated more. Empirical question.

SamBam 6y ago

I think that this is a great big stretch to try and justify BitCoin mining. I don't know if you personally own BitCoin, but I would say that this is a prime example of motivated reasoning. > or even negative I can see no way that consuming more energy can result in an improvement to the environment (unless that energy usage was directly related to improving the environment). There is absolutely no time where you can say "the more lights I leave on, the better the climate will be," no matter what your energy source is. In general the rest of your argument can be summed up as "if there is more demand for electricity, more utilities will build renewable plants." The problem with this argument is that there is already far more electricity being used than renewables can supply, so there is already all the incentive needed to build more plants. As for the present-day, a BitCoin mining rig consumes whatever proportion of fossils are inputs to that grid. If a grid is 50% renewable and 50% fossil, you can't pretend that you're consuming only the renewable portion. Indeed, the opposite may be true: renewables generally just produce their max output, the fossils can ramp up and down to meet higher demand. So it's best to think of the fossils as the ones that are rising to supply any "unnecessary" usage. > where you turn off and effectively provide the grid with more power This is again pretty striking motivated reasoning. Yes, if we turn off all non-essential lights during peak hours we are kind of "supplying the grid" with more energy, but if we build a huge energy-suck, and then occasionally turn it off, we don't get to pretend we are actually energy suppliers. If I set fire to $1000 of my company's money every day, I don't get to pretend I earned them $1000 on the days when I don't.

bhupy 6y ago
I think that this critique severely mischaracterizes the argument: we're not just talking about the merits of blindly consuming electricity ("leaving the lights on forever"), we're talking about what happens when you attach a financial incentive to consuming electricity structured in such a way that your net profit increases if you spend less on that energy. For Bitcoin miners, the input is energy, and the output is money. This means that there is now possibly an incentive to make available cheaper sources of energy, and right now that happens to be wind and solar (at least per kWh). It's worth litigating whether such an incentive actually exists, or if it does exist whether it will actually stimulate green energy development, or whether cheap energy is always going to be clean energy. These are interesting debates. But it's impossible to talk about Bitcoin as long as we mischaracterize the arguments.

lxgr 6y ago

> Bitcoin mining only cares about the cost of electricity at a given time I think this is the fallacy in your argument: In the absence of a block reward, Bitcoin mining seems like a purely demand-driven activity. The demand is people wanting their transactions be confirmed on-chain, which seems entirely uncorrelated with electricity prices. On the other side, you have miners wanting to operate at marginal profit. Total mining expenses would therefore be driven to always exactly match the total monetary value of being able to transact. In other words, the demand for transaction confirmation drives the demand for mining, which in turn drives the demand for electricity. In a world in which the only electricity sources available are renewable, I'd agree that Bitcoin mining has no net impact on the environment. In any other world, some of that demand for electricity will be satisfied using fossil fuels, directly or indirectly.