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Not that long ago Kazakhstan was considered very attractive for BTC miners. https://www.bloomberg.com/news/articles/2021-12-09/bitcoin-btc-miners-who-flocked-to

by nikanj 5y ago

Not that long ago Kazakhstan was considered very attractive for BTC miners. https://www.bloomberg.com/news/articles/2021-12-09/bitcoin-btc-miners-who-flocked-to-kazakhstan-now-see-zero-potential https://www.bloomberg.com/news/articles/2021-12-09/bitcoin-b... One of the surprising features of the crypto boom is the discovery of places where the price of energy is directly subsidized, or otherwise broken (e.g. you can just bribe the head of the city power plant, instead of paying your power bill).

baybal2 5y ago
The Xive, the biggest mining business there actually don't mine itself. They lease self-contained mines in ISO containers, and a membership in the pool. Anybody with access to near free electricity gets it hauled, or even flown to him, then they only have to wire-in few kiloamps of power, and internet.
SilasX 5y ago
Wait, really? It wasn’t possible to efficiently turn spare energy into money at scale before crypto?
- dustintrex 5y ago
  Not very easily: the capital expenditure required to build, say, an aluminum smelter (which is how Iceland converts excess geothermal into cash) is orders of magnitude more than some crypto rigs.
  - nikanj 5y ago
    And once you've built it, you have to have the aluminum ore shipped to you, and get the processed aluminum shipped to the world market. A BTC mine fits into a few shipping containers, needs no in-out logistics, and can easily be transported around as needed
    - throwaway0a5e 5y ago
      Containers or a warehouse of miners also has far less effect on anything local. You don't have to worry nearly as much about local oligarchs or regulators getting uppity and trying to shut you down.
      - beckman466 5y ago
        > Containers or a warehouse of miners also has far less effect on anything local. uhm what? the presence of miners mean energy prices rise as well as more environmental destruction to produce energy, especially if it's a place without green(er) energy production.
        hippich 5y ago
        prices rise until mine is moved to different place with cheap (for now) energy.
        bellyfullofbac 5y ago
        Even if it's green, wouldn't it be better if that produced energy goes somewhere to replace non-green energy, rather than to calculate hashes that are mostly thrown away? Obviously it's all stupidly chaotic, there might be a huge waterfall somewhere, and if we ignore the natural beauty aspects, before some cryptobros show up with money (however tangible) to build a hydropower plant and some wires to their container site, that waterfall's energy is not being utilized...
        beckman466 5y ago
        > Even if it's green, wouldn't it be better if that produced energy goes somewhere to replace non-green energy, rather than to calculate hashes that are mostly thrown away? yep, that's my argument above. and i personally wouldn't say hashes "are mostly thrown away", i would argue they're all thrown away, especially when considering this 'tech' will become defunct in a few years. “In what may be the best expression yet of capitalist realism, a new tool for free market speculation has become for many a populist symbol of resistance to the ravages of finance capitalism.” https://mronline.org/2021/12/28/cryptocurrencies-a-view-from-the-left/ https://mronline.org/2021/12/28/cryptocurrencies-a-view-from...
  - SilasX 5y ago
    What about storage of energy in batteries for resale to the grid? That’s very low (or negative) return by comparison? (Also probably not possible everywhere.) Also, if the claim is correct (about crypto making energy price arbitrage much easier), then a motivated reasoner could argue that it has had the positive effect of eliminating inefficiencies by forcing energy to obey the “law of one price”. Which, to clarify, doesn’t necessarily make it positive-sum overall, but still needs to be weighed against its energy usage cost to accurately gauge the full effect.
    - acdha 5y ago
      There’s an interesting short term versus long term discussion: if a place has cheap electricity (hydro, geothermal, solar, etc.) for a while it becomes appealing for people to reconfigure around it — electrification for homes & vehicles, building heavy industry or cloud data centers, etc. If someone can deliver shipping containers full of cryptocurrency mining hardware, they can very quickly soak up that extra capacity, maybe even drive prices up a bit, and it has no benefit to the surrounding community other than perhaps a maintenance job.
      - SilasX 5y ago
        To make my point more concrete in terms of your example, the benefit would be something like: Let's say Iceland has some natural advantage in fishing, because of the great fish around there. But, because our world violates the law of one price, it's instead of profitable to smelt aluminum there instead of fishing[2], and the world is deprived of the utility gain from the fish captured and shipped[1]. But then, once the world obeys "one energy price", the smelting doesn't make sense and they go back to fishing (while the imported crypto miners sop up the extra energy). [1] hopefully with sustainable management [2] They still fish there, today and in the hypothetical, but probably much less than the optimum.
        acdha 5y ago
        Those seem fairly separate industries — I don't know how many power-plant operators would switch to fishing. The process I was thinking of would be more like this: 1. A major hydro / geothermal / solar / etc. project goes online providing n GW/day 2. Usage within the region where that power can viably be transmitted is 0.2n so there isn't pressure to elevate prices. Because the power supply is based on the local geography, there isn't a way to bring production closer to the consumers in distant areas (e.g. a solar farm is going to be more productive in Arizon even if you want to power a factory in Portland). 3. Ordinarily, someone who owns, say, an aluminum smelter might consider building a new one in that region to take advantage of the guaranteed green power rather than facing escalating prices based on competition and emissions controls take effect. However, if someone ships a bunch of cryptocurrency miners in to soak up any available power there won't be slack capacity and that's guaranteed to happen because they can ship containers of mining hardware in days whereas building an industrial facility takes years.
  - Symmetry 5y ago
    The aluminium smelter also requires collocated skilled labor which is another factor.
  - meheleventyone 5y ago
    Just FYI most of the energy in Iceland goes into smelting. It's not excess the capacity has been expanded and continues to be expanded to power smelting. https://nea.is/hydro-power/power-intensive-industries/nr/70 https://nea.is/hydro-power/power-intensive-industries/nr/70 It's also quite borderline as to whether or not it breaks even these days. Supply chain woes increasing prices have helped last year for example but before that they were losing money. https://www.ruv.is/frett/2021/09/14/icelandic-smelters-helped-by-high-aluminium-prices https://www.ruv.is/frett/2021/09/14/icelandic-smelters-helpe...
- pjc50 5y ago
  The electricity in this case is not "spare", just at non-global prices. Electricity generation has always been managed by turning down the generation to match the demand. Your point below about battery storage: battery storage has only just become economically viable at the best of times, and that relies on getting paid to provide "fast frequency response" - stabilisation as a service.
beckman466 5y ago
> One of the surprising features of the crypto boom is the discovery of places where the price of energy is directly subsidized, or otherwise broken are you really arguing that letting the market work on energy instead of having somewhat democratic state run utilities works well? i think the evidence speaks for itself. what do you see? https://www.wsws.org/en/articles/2021/04/10/texa-a10.html https://www.wsws.org/en/articles/2021/04/10/texa-a10.html https://www.wsws.org/en/articles/2021/06/01/texa-j01.html https://www.wsws.org/en/articles/2021/06/01/texa-j01.html https://www.wsws.org/en/articles/2021/03/08/texa-m08.html https://www.wsws.org/en/articles/2021/03/08/texa-m08.html
deleted 5y ago
[deleted]
h4kor 5y ago
Just stumbled over this site being down because of the shutdown https://blockchair.com/ https://blockchair.com/
_jal 5y ago
> discovery of places where the price of energy is directly subsidized, or otherwise broken So, an anti-state financial mechanism subsidized by governments and fraud. There is nothing new under the sun.
- tsol 5y ago
  What are the prior examples of this happening?
trembolram 5y ago
They are now disconnected from the global Internet. What happens to all BTC transactions made in Kazakhstan? Will the local network accept them? What will happen to them when the Internet connection to the global world is back?
- VMG 5y ago
  They can use a satellite connection. There are ready-made setups for this: https://blockstream.com/satellite/ https://blockstream.com/satellite/
- xxpor 5y ago
  As a someone ignorant occational user: It'd operate similar to a git repo no? Transactions within KZ would be accepted by the local chain, which would then be merged when reconnected. If there's a conflict you have to decide which chain is the correct one, which in this case would be the global version.
  - 8organicbits 5y ago
    When the network is segmented multiple chains could form. Likely KZ would have a very low hash rate, so that segment would take very long to form blocks (or never complete any). Once the networks rejoin, the global chain almost certainly "wins" and the local chain is ignored. Transactions written to a KZ block will show some confirmations, but won't remain in the eventual dominant chain.
    - nybble41 5y ago
      The global chain will "win" but transactions made in the local chain can be retried in the global chain after the networks rejoin so long as there are no conflicts. Absent deliberate or accidental double-spending, the biggest source of conflicts would be the mining rewards from the local chain since these rewards never existed in the global chain and cannot be carried over. There is a 100-block waiting period before mining rewards can be spent specifically to avoid this issue for shorter-term forks, but it could still be a problem in the event of sustained network fragmentation. On the bright side, it's not necessary to have full Internet connectivity to keep the local chain in sync with the global chain. A single local node with access to the global blockchain (via a VPN or dedicated satellite receiver[0] or multiple upstream Internet connections near the border) can ensure that the local chain is constantly synchronized with the global one, and even forward local transactions for inclusion in the global blockchain. [0] https://blockstream.com/satellite/ https://blockstream.com/satellite/

by nikanj 5y ago

baybal2 5y ago

The Xive, the biggest mining business there actually don't mine itself. They lease self-contained mines in ISO containers, and a membership in the pool. Anybody with access to near free electricity gets it hauled, or even flown to him, then they only have to wire-in few kiloamps of power, and internet.

SilasX 5y ago

Wait, really? It wasn’t possible to efficiently turn spare energy into money at scale before crypto?

dustintrex 5y ago
Not very easily: the capital expenditure required to build, say, an aluminum smelter (which is how Iceland converts excess geothermal into cash) is orders of magnitude more than some crypto rigs.
- nikanj 5y ago
  And once you've built it, you have to have the aluminum ore shipped to you, and get the processed aluminum shipped to the world market. A BTC mine fits into a few shipping containers, needs no in-out logistics, and can easily be transported around as needed
  - throwaway0a5e 5y ago
    Containers or a warehouse of miners also has far less effect on anything local. You don't have to worry nearly as much about local oligarchs or regulators getting uppity and trying to shut you down.
    - beckman466 5y ago
      > Containers or a warehouse of miners also has far less effect on anything local. uhm what? the presence of miners mean energy prices rise as well as more environmental destruction to produce energy, especially if it's a place without green(er) energy production.
      - hippich 5y ago
        prices rise until mine is moved to different place with cheap (for now) energy.
      - bellyfullofbac 5y ago
        Even if it's green, wouldn't it be better if that produced energy goes somewhere to replace non-green energy, rather than to calculate hashes that are mostly thrown away? Obviously it's all stupidly chaotic, there might be a huge waterfall somewhere, and if we ignore the natural beauty aspects, before some cryptobros show up with money (however tangible) to build a hydropower plant and some wires to their container site, that waterfall's energy is not being utilized...
        beckman466 5y ago
        > Even if it's green, wouldn't it be better if that produced energy goes somewhere to replace non-green energy, rather than to calculate hashes that are mostly thrown away? yep, that's my argument above. and i personally wouldn't say hashes "are mostly thrown away", i would argue they're all thrown away, especially when considering this 'tech' will become defunct in a few years. “In what may be the best expression yet of capitalist realism, a new tool for free market speculation has become for many a populist symbol of resistance to the ravages of finance capitalism.” https://mronline.org/2021/12/28/cryptocurrencies-a-view-from-the-left/ https://mronline.org/2021/12/28/cryptocurrencies-a-view-from...
- SilasX 5y ago
  What about storage of energy in batteries for resale to the grid? That’s very low (or negative) return by comparison? (Also probably not possible everywhere.) Also, if the claim is correct (about crypto making energy price arbitrage much easier), then a motivated reasoner could argue that it has had the positive effect of eliminating inefficiencies by forcing energy to obey the “law of one price”. Which, to clarify, doesn’t necessarily make it positive-sum overall, but still needs to be weighed against its energy usage cost to accurately gauge the full effect.
  - acdha 5y ago
    There’s an interesting short term versus long term discussion: if a place has cheap electricity (hydro, geothermal, solar, etc.) for a while it becomes appealing for people to reconfigure around it — electrification for homes & vehicles, building heavy industry or cloud data centers, etc. If someone can deliver shipping containers full of cryptocurrency mining hardware, they can very quickly soak up that extra capacity, maybe even drive prices up a bit, and it has no benefit to the surrounding community other than perhaps a maintenance job.
    - SilasX 5y ago
      To make my point more concrete in terms of your example, the benefit would be something like: Let's say Iceland has some natural advantage in fishing, because of the great fish around there. But, because our world violates the law of one price, it's instead of profitable to smelt aluminum there instead of fishing[2], and the world is deprived of the utility gain from the fish captured and shipped[1]. But then, once the world obeys "one energy price", the smelting doesn't make sense and they go back to fishing (while the imported crypto miners sop up the extra energy). [1] hopefully with sustainable management [2] They still fish there, today and in the hypothetical, but probably much less than the optimum.
      - acdha 5y ago
        Those seem fairly separate industries — I don't know how many power-plant operators would switch to fishing. The process I was thinking of would be more like this: 1. A major hydro / geothermal / solar / etc. project goes online providing n GW/day 2. Usage within the region where that power can viably be transmitted is 0.2n so there isn't pressure to elevate prices. Because the power supply is based on the local geography, there isn't a way to bring production closer to the consumers in distant areas (e.g. a solar farm is going to be more productive in Arizon even if you want to power a factory in Portland). 3. Ordinarily, someone who owns, say, an aluminum smelter might consider building a new one in that region to take advantage of the guaranteed green power rather than facing escalating prices based on competition and emissions controls take effect. However, if someone ships a bunch of cryptocurrency miners in to soak up any available power there won't be slack capacity and that's guaranteed to happen because they can ship containers of mining hardware in days whereas building an industrial facility takes years.
- Symmetry 5y ago
  The aluminium smelter also requires collocated skilled labor which is another factor.
- meheleventyone 5y ago
  Just FYI most of the energy in Iceland goes into smelting. It's not excess the capacity has been expanded and continues to be expanded to power smelting. https://nea.is/hydro-power/power-intensive-industries/nr/70 https://nea.is/hydro-power/power-intensive-industries/nr/70 It's also quite borderline as to whether or not it breaks even these days. Supply chain woes increasing prices have helped last year for example but before that they were losing money. https://www.ruv.is/frett/2021/09/14/icelandic-smelters-helped-by-high-aluminium-prices https://www.ruv.is/frett/2021/09/14/icelandic-smelters-helpe...
pjc50 5y ago
The electricity in this case is not "spare", just at non-global prices. Electricity generation has always been managed by turning down the generation to match the demand. Your point below about battery storage: battery storage has only just become economically viable at the best of times, and that relies on getting paid to provide "fast frequency response" - stabilisation as a service.

beckman466 5y ago

> One of the surprising features of the crypto boom is the discovery of places where the price of energy is directly subsidized, or otherwise broken are you really arguing that letting the market work on energy instead of having somewhat democratic state run utilities works well? i think the evidence speaks for itself. what do you see? https://www.wsws.org/en/articles/2021/04/10/texa-a10.html https://www.wsws.org/en/articles/2021/04/10/texa-a10.html https://www.wsws.org/en/articles/2021/06/01/texa-j01.html https://www.wsws.org/en/articles/2021/06/01/texa-j01.html https://www.wsws.org/en/articles/2021/03/08/texa-m08.html https://www.wsws.org/en/articles/2021/03/08/texa-m08.html

deleted 5y ago

[deleted]

h4kor 5y ago

Just stumbled over this site being down because of the shutdown https://blockchair.com/ https://blockchair.com/

_jal 5y ago

> discovery of places where the price of energy is directly subsidized, or otherwise broken So, an anti-state financial mechanism subsidized by governments and fraud. There is nothing new under the sun.

tsol 5y ago
What are the prior examples of this happening?

trembolram 5y ago

They are now disconnected from the global Internet. What happens to all BTC transactions made in Kazakhstan? Will the local network accept them? What will happen to them when the Internet connection to the global world is back?

VMG 5y ago
They can use a satellite connection. There are ready-made setups for this: https://blockstream.com/satellite/ https://blockstream.com/satellite/
xxpor 5y ago
As a someone ignorant occational user: It'd operate similar to a git repo no? Transactions within KZ would be accepted by the local chain, which would then be merged when reconnected. If there's a conflict you have to decide which chain is the correct one, which in this case would be the global version.
- 8organicbits 5y ago
  When the network is segmented multiple chains could form. Likely KZ would have a very low hash rate, so that segment would take very long to form blocks (or never complete any). Once the networks rejoin, the global chain almost certainly "wins" and the local chain is ignored. Transactions written to a KZ block will show some confirmations, but won't remain in the eventual dominant chain.
  - nybble41 5y ago
    The global chain will "win" but transactions made in the local chain can be retried in the global chain after the networks rejoin so long as there are no conflicts. Absent deliberate or accidental double-spending, the biggest source of conflicts would be the mining rewards from the local chain since these rewards never existed in the global chain and cannot be carried over. There is a 100-block waiting period before mining rewards can be spent specifically to avoid this issue for shorter-term forks, but it could still be a problem in the event of sustained network fragmentation. On the bright side, it's not necessary to have full Internet connectivity to keep the local chain in sync with the global chain. A single local node with access to the global blockchain (via a VPN or dedicated satellite receiver[0] or multiple upstream Internet connections near the border) can ensure that the local chain is constantly synchronized with the global one, and even forward local transactions for inclusion in the global blockchain. [0] https://blockstream.com/satellite/ https://blockstream.com/satellite/