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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 exa

by 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.
- SamBam 6y ago
  You have the supply-demand curve backwards. If there is more consumption of electricity, that raises the price, it doesn't make it cheaper. Of course the bitcoin miners would like to buy it cheaper. The power companies would like to make it more expensive. Economics dictates that their meeting point will be higher with more demand. You're describing it as if BitCoin miners have the ability to construct their own gigawatt power plant. But even if they did, the argument is still "If I use more electricity, and I/they create more green power plants to match my demand, the environment is better off." If I burn 100 TWh/yr of electricity, and they build a power plant for me that supplies 100 TWh/yr of green power, how, exactly, have I reduced the demand for fossil fuels? I'm burning all the new green energy that's being created!
  - bhupy 6y ago
    > If there is more consumption of electricity, that raises the price, it doesn't make it cheaper. Of course the bitcoin miners would like to buy it cheaper. The power companies would like to make it more expensive. Economics dictates that their meeting point will be higher with more demand. First of all, economics dictates that supply will catch up to meet the demand as long as the barrier to entry is low. You'd be right if there was a cartel in green energy — but there's not. As long as supply is elastic, high prices are always transient. > You're describing it as if BitCoin miners have the ability to construct their own gigawatt power plant. No, I'm describing it as if BitCoin miners have the ability to set up ASICs powered by solar panels in the middle of a desert in Nevada. Somewhat high upfront cost, but effectively zero marginal cost of power. What's being stimulated here is the demand for accessible solar panels that can be quickly/cheaply installed. > If I burn 100 TWh/yr of electricity, and they build a power plant for me that supplies 100 TWh/yr of green power, how, exactly, have I reduced the demand for fossil fuels? I'm burning all the new green energy that's being created! But again, that presupposes that there's some fixed supply. Supply also changes, and it responds to demand. This is the core thesis behind Keynesian stimulus, and why inflation doesn't necessarily follow from stimulating demand. Now, baked into all of my points here is the assumption that the barrier to entry for new supply is low. It might not be! That's, I think, the more interesting question. The market conditions could also change making it easier and easier to spin up a solar farm, or spin up a wind-farm.
paystaxes 6y ago
> 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). Literally the entire point of the comment you are responding to was to outline how bitcoin mining can help support the economic viability of renewable energy projects like wind farms.
- SamBam 6y ago
  And since we already use far more electricity than renewables generate, I dismissed this concern in my comment. I mean, if that were valid, wouldn't it be more environmental if we all just left the lights on 24 hours a day? Or turned on thousands of A/C units outdoors? It's like saying my burning $1000/day of my company's money incentives the company to earn more money, so it's actually a good thing.
  - paystaxes 6y ago
    I don't think you're understanding the point being made. It's not simply that bitcoin consumes energy, but about the economics of renewable energy infrastructure. Building a renewable project large enough to power an entire city during peak hours often does not make economic sense because of the large fluctuations in consumption. But, if you have a bitcoin mine that you can flip on to consume the excess energy during off hours, suddenly the economic viability is completely different.

by SamBam 6y ago

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.

SamBam 6y ago
You have the supply-demand curve backwards. If there is more consumption of electricity, that raises the price, it doesn't make it cheaper. Of course the bitcoin miners would like to buy it cheaper. The power companies would like to make it more expensive. Economics dictates that their meeting point will be higher with more demand. You're describing it as if BitCoin miners have the ability to construct their own gigawatt power plant. But even if they did, the argument is still "If I use more electricity, and I/they create more green power plants to match my demand, the environment is better off." If I burn 100 TWh/yr of electricity, and they build a power plant for me that supplies 100 TWh/yr of green power, how, exactly, have I reduced the demand for fossil fuels? I'm burning all the new green energy that's being created!
- bhupy 6y ago
  > If there is more consumption of electricity, that raises the price, it doesn't make it cheaper. Of course the bitcoin miners would like to buy it cheaper. The power companies would like to make it more expensive. Economics dictates that their meeting point will be higher with more demand. First of all, economics dictates that supply will catch up to meet the demand as long as the barrier to entry is low. You'd be right if there was a cartel in green energy — but there's not. As long as supply is elastic, high prices are always transient. > You're describing it as if BitCoin miners have the ability to construct their own gigawatt power plant. No, I'm describing it as if BitCoin miners have the ability to set up ASICs powered by solar panels in the middle of a desert in Nevada. Somewhat high upfront cost, but effectively zero marginal cost of power. What's being stimulated here is the demand for accessible solar panels that can be quickly/cheaply installed. > If I burn 100 TWh/yr of electricity, and they build a power plant for me that supplies 100 TWh/yr of green power, how, exactly, have I reduced the demand for fossil fuels? I'm burning all the new green energy that's being created! But again, that presupposes that there's some fixed supply. Supply also changes, and it responds to demand. This is the core thesis behind Keynesian stimulus, and why inflation doesn't necessarily follow from stimulating demand. Now, baked into all of my points here is the assumption that the barrier to entry for new supply is low. It might not be! That's, I think, the more interesting question. The market conditions could also change making it easier and easier to spin up a solar farm, or spin up a wind-farm.

paystaxes 6y ago

> 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). Literally the entire point of the comment you are responding to was to outline how bitcoin mining can help support the economic viability of renewable energy projects like wind farms.

SamBam 6y ago
And since we already use far more electricity than renewables generate, I dismissed this concern in my comment. I mean, if that were valid, wouldn't it be more environmental if we all just left the lights on 24 hours a day? Or turned on thousands of A/C units outdoors? It's like saying my burning $1000/day of my company's money incentives the company to earn more money, so it's actually a good thing.
- paystaxes 6y ago
  I don't think you're understanding the point being made. It's not simply that bitcoin consumes energy, but about the economics of renewable energy infrastructure. Building a renewable project large enough to power an entire city during peak hours often does not make economic sense because of the large fluctuations in consumption. But, if you have a bitcoin mine that you can flip on to consume the excess energy during off hours, suddenly the economic viability is completely different.