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Points 8-12 about energy consumption are well written, but ignore the fact that the flexibility in which bitcoin mining consumes electricity uniquely allows dev

by yrral 5y ago

Points 8-12 about energy consumption are well written, but ignore the fact that the flexibility in which bitcoin mining consumes electricity uniquely allows development of renewables in areas where further development would otherwise be economically non-viable. In places with a high renewable generation mix, electricity prices are often very volatile, sometimes very cheap and even negative in times of high production and sometimes very expensive when production is low and demand is high. Proof of work mining uniquely only draws electricity when prices are economically viable, only buying electricity when there is excess supply, and can quickly shut down when that situation changes. You can see this eg: in Texas where ERCOT has signed demand response agreements with many bitcoin mining companies to cut power when demand is high and supply is low (not that they would choose to continue operating anyway given the marginal price of electricity vs the marginal bitcoin production). https://www.cnbc.com/2021/12/04/bitcoin-miners-say-theyre-fixing-texas-electric-grid-ted-cruz-agrees.html https://www.cnbc.com/2021/12/04/bitcoin-miners-say-theyre-fi... https://www.dallasnews.com/business/energy/2022/02/04/texas-crypto-miners-voluntarily-shut-down-to-keep-electricity-flowing-to-homes-during-freeze/ https://www.dallasnews.com/business/energy/2022/02/04/texas-...

raverbashing 5y ago
> n Texas where ERCOT has signed demand response agreements with many bitcoin mining companies to cut power when demand is high So the "cryptobros" think this is new and exclusive for crypto? No and no. Their hype to damage ratio is starting to match those of tobacco companies.
- yrral 5y ago
  I am not aware of any other large consumer of power that can cut power with seconds of notice without economic harm. Eg: google/facebook datacenters, aluminum smelters, factories, etc.
  - rrrazdan 5y ago
    Aluminum smelters do this all the time btw. Also there is economic harm in shutting down mining I.e loss of mining fees.
    - yrral 5y ago
      > Aluminum smelters are typically slow to curb production as the costs of shutting down and restarting capacity are high. https://www.bloomberg.com/news/articles/2021-12-22/europe-s-largest-aluminum-smelter-trims-output-after-power-spike https://www.bloomberg.com/news/articles/2021-12-22/europe-s-... > "I think it's clear that one of the issues facing aluminum is that it is costly to bring down smelting capacity and even more costly to bring it back up again," Harvey said during a virtual presentation at the Bank of America Securities Global Metals, Mining & Steel Conference. "I think it has tended to be a relatively slow process for producers to come to those decisions." > Harvey said each potline at a smelter requires about $25 million to restart, which made it challenging for operators to reach curtailment decisions. https://www.spglobal.com/platts/en/market-insights/latest-news/metals/051420-high-costs-challenge-smelter-responses-to-aluminum-oversupply-alcoa https://www.spglobal.com/platts/en/market-insights/latest-ne...
  - gefhfffh 5y ago
    E.g. energy storage systems
    - yrral 5y ago
      They have a max capacity. They cannot be steady consumers of electricity for the 95%+ of the time that there is enough electricity to go around.
      - gefhfffh 5y ago
        So does mining. Just turn off fossil based plants and you reduce needed max capacity. Didn't know we have too much energy with a low carbon footprint.
  - raverbashing 5y ago
    Some domestic users can (for things like AC, heaters etc) For industrial, they can establish peak-times and broadcast the pricing info. So maybe not "seconds" but they can react to demands and pricing. It is possible (and depending on the industry, likely) that some industries do have backup power on site, so they switch to that and stop using grid power.
    - inter_netuser 5y ago
      only failed states turn off residential AC or heating. Boggles my mind how some think it's acceptable.
      - gefhfffh 5y ago
        Nope, smart states do that. Heat can be stored. Heat when it's cheap.
        inter_netuser 5y ago
        Nah, I'll just run my own generator instead.
        gefhfffh 5y ago
        Well that's not smart
      - Thorrez 5y ago
        I don't think raverbashing was talking about the state turning it off, but rather individual people turning their own AC/heating off. Nest Thermostat offers many features to automatically do this if users want it, both to save money, as well as to help the planet. Full disclosure, I work at Google, but not Nest. https://support.google.com/googlenest/answer/9244031 https://support.google.com/googlenest/answer/9244031 https://support.google.com/googlenest/answer/10975756 https://support.google.com/googlenest/answer/10975756 https://support.google.com/googlenest/answer/9242289 https://support.google.com/googlenest/answer/9242289
  - yxhuvud 5y ago
    In the long term, I expect this to become very common as hydrogen replaces methane in ammonia production and coal in steel production. Hydrolysis can happen when price is low and as long as the hydrogen buffer is big enough it will last through high prices.
usgroup 5y ago
I think he’s saying that of all the things you could power in whatever electricity consumption regime you care to mention , bitcoin competes for supply with more socially useful things.
- inter_netuser 5y ago
  ..and it's absolutely not possible to build more nuclear powerplants..? We are going to settle Mars by relying on windmills. That's the plan?
  - arrrg 5y ago
    We will not settle Mars. That doesn’t even begin to make sense. There are places orders of magnitude more friendly to human settlement on Earth than on Mars and we don’t even settle those. On Earth those windmill are much cheaper than nuclear power, even taking into account their capacity factor.
    - inter_netuser 5y ago
      "settling mars" is just a meme. humanity however, needs to branch out, and quick. and windmills aren't going to help us make that jump to an interplanetary civilization. Nuclear is cheap, very cheap. It was made expensive by political decisions, under the guise of proliferation suppression, but is actually a tool of economic suppression of potential challengers. Germany, one of the most high-tech countries in the world, cannot make renewables work. Germany also has very electricity rates. France, on the other hand, builds nuclear, supplies Germany, and has MUCH lower electricity rates. I guess no one told them nuclear is too expensive?
      - dopidopHN 5y ago
        Cost was not really a factor in France decision . Historically De Gaule launched the trend to reach energy indépendance and get the bomb. Now Macron is doing it to secure energy independence and win point in upcoming elections.
cr__ 5y ago
The “work” does not need to be done. Doing the work cannot have a societal benefit
- yrral 5y ago
  > The “work” does not need to be done. That point is up for debate, but that's not the point I'm addressing. > Doing the work cannot have a societal benefit I'm just pointing out that this use of electricity makes new renewable electricity deployments viable when they otherwise would not be. In that sense, if you think that replacing fossil fuel generation with renewables is valuable then bitcoin mining is valuable in that sense. Renewables are cheaper already than fossil fuels. Their electricity generation is just not stable enough to replace all of fossil fuels. We can use bitcoin mining to smooth out supply/demand of electricity which allows us to use a higher proportion of renewables in our supply than would otherwise be possible.
  - gefhfffh 5y ago
    We can use storage systems to smooth out supply/demand of electricity. Mining is unsufficient, because it can't provide energy in the night when the sun is not shining. Storage systems can
    - inter_netuser 5y ago
      or we can just finally admit renewables cannot supply the entire Earth, and something else needs to be in the mix too.
      - gefhfffh 5y ago
        Like storage systems, yeah. Bitcoin only makes it worse, because it uses/wastes energy of which we don't have enough clean one
        inter_netuser 5y ago
        Usually, when you don't have enough of something - you go and build it. Bitcoin requires only as much power as a tiny country size of Portugal/Netherlands, less than 1% of electricity consumption globally. Less than dishwashers, heated pools or computer games use. Perhaps we should ban these also? If anything, we should be thankful Bitcoin exposed the inability of renewables to scale in practice.
yholio 5y ago
> Proof of work mining uniquely only draws electricity when prices are economically viable, only buying electricity when there is excess supply The numbers don't make sense to do that. The average time a piece of hardware lives on the Bitcoin network is just 16 months, after which it becomes e-waste, too underpowered to matter. So assuming the CAPEX is $1000 for a piece of hardware that draws 1kW, the most it can consume is 11 MWh during its lifetime - about $1500 at residential prices (Texas) or $500 at wholesale prices. So just how deep can you throttle down the rig to take advantage of the low energy prices? The numbers seem to show that anything below 70-80% active ratio will start to cost you more in capital than you save in electricity. So you can avoid the peaks but certainly cannot wait for the relatively rare excess renewables events.
- cubic_earth 5y ago
  The amount of time a miner is economically viable for should be increasing as "Moore's Law" for ASICs slows down. Just the same laptops are usable for more years nowadays than they were in the early 2000's. Also - if you have free electricity, which is a thing in certain settings, where prices can and do go negative, mining hardware will be viable for "a long time".

by yrral 5y ago

raverbashing 5y ago

> n Texas where ERCOT has signed demand response agreements with many bitcoin mining companies to cut power when demand is high So the "cryptobros" think this is new and exclusive for crypto? No and no. Their hype to damage ratio is starting to match those of tobacco companies.

yrral 5y ago
I am not aware of any other large consumer of power that can cut power with seconds of notice without economic harm. Eg: google/facebook datacenters, aluminum smelters, factories, etc.
- rrrazdan 5y ago
  Aluminum smelters do this all the time btw. Also there is economic harm in shutting down mining I.e loss of mining fees.
  - yrral 5y ago
    > Aluminum smelters are typically slow to curb production as the costs of shutting down and restarting capacity are high. https://www.bloomberg.com/news/articles/2021-12-22/europe-s-largest-aluminum-smelter-trims-output-after-power-spike https://www.bloomberg.com/news/articles/2021-12-22/europe-s-... > "I think it's clear that one of the issues facing aluminum is that it is costly to bring down smelting capacity and even more costly to bring it back up again," Harvey said during a virtual presentation at the Bank of America Securities Global Metals, Mining & Steel Conference. "I think it has tended to be a relatively slow process for producers to come to those decisions." > Harvey said each potline at a smelter requires about $25 million to restart, which made it challenging for operators to reach curtailment decisions. https://www.spglobal.com/platts/en/market-insights/latest-news/metals/051420-high-costs-challenge-smelter-responses-to-aluminum-oversupply-alcoa https://www.spglobal.com/platts/en/market-insights/latest-ne...
- gefhfffh 5y ago
  E.g. energy storage systems
  - yrral 5y ago
    They have a max capacity. They cannot be steady consumers of electricity for the 95%+ of the time that there is enough electricity to go around.
    - gefhfffh 5y ago
      So does mining. Just turn off fossil based plants and you reduce needed max capacity. Didn't know we have too much energy with a low carbon footprint.
- raverbashing 5y ago
  Some domestic users can (for things like AC, heaters etc) For industrial, they can establish peak-times and broadcast the pricing info. So maybe not "seconds" but they can react to demands and pricing. It is possible (and depending on the industry, likely) that some industries do have backup power on site, so they switch to that and stop using grid power.
  - inter_netuser 5y ago
    only failed states turn off residential AC or heating. Boggles my mind how some think it's acceptable.
    - gefhfffh 5y ago
      Nope, smart states do that. Heat can be stored. Heat when it's cheap.
      - inter_netuser 5y ago
        Nah, I'll just run my own generator instead.
        gefhfffh 5y ago
        Well that's not smart
    - Thorrez 5y ago
      I don't think raverbashing was talking about the state turning it off, but rather individual people turning their own AC/heating off. Nest Thermostat offers many features to automatically do this if users want it, both to save money, as well as to help the planet. Full disclosure, I work at Google, but not Nest. https://support.google.com/googlenest/answer/9244031 https://support.google.com/googlenest/answer/9244031 https://support.google.com/googlenest/answer/10975756 https://support.google.com/googlenest/answer/10975756 https://support.google.com/googlenest/answer/9242289 https://support.google.com/googlenest/answer/9242289
- yxhuvud 5y ago
  In the long term, I expect this to become very common as hydrogen replaces methane in ammonia production and coal in steel production. Hydrolysis can happen when price is low and as long as the hydrogen buffer is big enough it will last through high prices.

usgroup 5y ago

I think he’s saying that of all the things you could power in whatever electricity consumption regime you care to mention , bitcoin competes for supply with more socially useful things.

inter_netuser 5y ago
..and it's absolutely not possible to build more nuclear powerplants..? We are going to settle Mars by relying on windmills. That's the plan?
- arrrg 5y ago
  We will not settle Mars. That doesn’t even begin to make sense. There are places orders of magnitude more friendly to human settlement on Earth than on Mars and we don’t even settle those. On Earth those windmill are much cheaper than nuclear power, even taking into account their capacity factor.
  - inter_netuser 5y ago
    "settling mars" is just a meme. humanity however, needs to branch out, and quick. and windmills aren't going to help us make that jump to an interplanetary civilization. Nuclear is cheap, very cheap. It was made expensive by political decisions, under the guise of proliferation suppression, but is actually a tool of economic suppression of potential challengers. Germany, one of the most high-tech countries in the world, cannot make renewables work. Germany also has very electricity rates. France, on the other hand, builds nuclear, supplies Germany, and has MUCH lower electricity rates. I guess no one told them nuclear is too expensive?
    - dopidopHN 5y ago
      Cost was not really a factor in France decision . Historically De Gaule launched the trend to reach energy indépendance and get the bomb. Now Macron is doing it to secure energy independence and win point in upcoming elections.

cr__ 5y ago

The “work” does not need to be done. Doing the work cannot have a societal benefit

yrral 5y ago
> The “work” does not need to be done. That point is up for debate, but that's not the point I'm addressing. > Doing the work cannot have a societal benefit I'm just pointing out that this use of electricity makes new renewable electricity deployments viable when they otherwise would not be. In that sense, if you think that replacing fossil fuel generation with renewables is valuable then bitcoin mining is valuable in that sense. Renewables are cheaper already than fossil fuels. Their electricity generation is just not stable enough to replace all of fossil fuels. We can use bitcoin mining to smooth out supply/demand of electricity which allows us to use a higher proportion of renewables in our supply than would otherwise be possible.
- gefhfffh 5y ago
  We can use storage systems to smooth out supply/demand of electricity. Mining is unsufficient, because it can't provide energy in the night when the sun is not shining. Storage systems can
  - inter_netuser 5y ago
    or we can just finally admit renewables cannot supply the entire Earth, and something else needs to be in the mix too.
    - gefhfffh 5y ago
      Like storage systems, yeah. Bitcoin only makes it worse, because it uses/wastes energy of which we don't have enough clean one
      - inter_netuser 5y ago
        Usually, when you don't have enough of something - you go and build it. Bitcoin requires only as much power as a tiny country size of Portugal/Netherlands, less than 1% of electricity consumption globally. Less than dishwashers, heated pools or computer games use. Perhaps we should ban these also? If anything, we should be thankful Bitcoin exposed the inability of renewables to scale in practice.

yholio 5y ago

> Proof of work mining uniquely only draws electricity when prices are economically viable, only buying electricity when there is excess supply The numbers don't make sense to do that. The average time a piece of hardware lives on the Bitcoin network is just 16 months, after which it becomes e-waste, too underpowered to matter. So assuming the CAPEX is $1000 for a piece of hardware that draws 1kW, the most it can consume is 11 MWh during its lifetime - about $1500 at residential prices (Texas) or $500 at wholesale prices. So just how deep can you throttle down the rig to take advantage of the low energy prices? The numbers seem to show that anything below 70-80% active ratio will start to cost you more in capital than you save in electricity. So you can avoid the peaks but certainly cannot wait for the relatively rare excess renewables events.

cubic_earth 5y ago
The amount of time a miner is economically viable for should be increasing as "Moore's Law" for ASICs slows down. Just the same laptops are usable for more years nowadays than they were in the early 2000's. Also - if you have free electricity, which is a thing in certain settings, where prices can and do go negative, mining hardware will be viable for "a long time".