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It wouldn't occur elsewhere. The way the incentives are built, anywhere energy is cheaper than the expected return of mining, all excess energy will be consumed
by ip26 5y ago
It wouldn't occur elsewhere. The way the incentives are built, anywhere energy is cheaper than the expected return of mining, all excess energy will be consumed mining. Thus, new sources of inexpensive energy translate to more mining than before.
- paconbork 5y agoBut more mining reduces the expected return of mining, so a miner would need marginally cheaper energy in order to break even.
- zozbot234 5y agoMore mining only results when the marginal kW of power becomes cheaper. Using otherwise-wasted power for mining does not affect prices at the margin, it's almost certainly a pure gain for the producer. The most expensive supply of something is the first to drop away when gains to the marginal supplier decrease (because some of these gains were opportunistically grabbed by inframarginal suppliers).
- samatman 5y agoThis is backward: the way the incentives are built, anytime the market value of $reward + $fees BTC is $value, the miners will spend ($value - $margin) * %total-of-pool to mine that block. It could only consume 'all excess energy' if the block reward is absurdly high, which it isn't.