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I know; my point is that this situation isn't unique to crypto mining: their argument applies to every industry. If crypto didn't exist, another industry would

I know; my point is that this situation isn't unique to crypto mining: their argument applies to every industry. If crypto didn't exist, another industry would need to be shutdown.

quickthrower2 3y ago
Indeed. Think of it like this. If there is a water shortage they ban hosepipes not tap water. They may ask people to limit showers. The equivalent here would be picking what industries to forcibly shut down. In that sense with such a system crypto mining might be OK (at least for this argument). But this compensation is a subsidy to ask more people to come in and use up a scarce resource.
- brutusborn 3y ago
  Your last sentence is where you go wrong: compensation is not a subsidy. If the government uses my land to build a highway, I am compensated because I lose something of value. Subsidies are not an exchange but are one-way. You are mischaracterizing the payments because you hate crypto.
  - quickthrower2 3y ago
    It is a subsidy signal. "Build crypto mining in Texas and your expected earnings are higher than anywhere else!" I don't hate crypto, I have some nuanced opinions on it. Happy to criticize and defend it, depending on the argument. Once you get to PoS there is a lot less wrong with it environmentally. Unlimited carbon-free energy infra (and silicon production infra too, along with proper recycling!) would also make it less of a problem, but obviously we are not there yet. And I say unlimited because PoW demands that difficulty goes up and up and up to bid up PoW assets.
- nullc 3y ago
  The program is equivalent to selling the miners spare capacity at reduced prices. There are accounting reasons that the utility prefers to structure it as payments for load shedding. Try thinking it through in terms of reduced rates for spare capacity. Any criticism that doesn't work under both frameworks is logically unsound.
  - p1mrx 3y ago
    Your argument would make sense if Texas had a near-term goal to decarbonize its power grid. As long as fossil fuels are burning, there is no spare capacity.
    - nullc 3y ago
      Embracing your response on its own terms, https://insideclimatenews.org/news/09032023/inside-clean-energy-texas-renewables/ https://insideclimatenews.org/news/09032023/inside-clean-ene... But that aside I don't think your response is a fair one for three reasons: (1) because solar and wind are the least expensive source of energy the excess power is significantly solar/wind. (2) But because they're the least reliable maximizing their use requires solutions like a large amount of sheddable load on the grid. (3) You're imposing your own opinions on the 'right' and 'wrong' sources of power which far from universal outside of internet filter bubbles and are not supported by the law. You may not like that some parties burn fossil fuels for energy but they currently have a right to do so. I agree that good cases can be made for restricting fossil fuel use, but so long as it isn't it's unproductive to pick and choose arbitrary targets that use energy for purposes you don't care about simply because fossil fuels for energy happens to exist. It's doubly so, considering 1/2 above because responsive loads help increase the share of renewable power.
      - p1mrx 3y ago
        I agree that the BTC miners are behaving legally, and in some sense they have a moral responsibility to maximize profit within the law, but their existence highlights why the law itself is unethical. I think lawmakers have an ethical duty to fix the "burning carbon is too cheap" problem, but the odds of that happening in Texas are low. If we had something like a carbon fee and dividend, miners could become a net good for society just by following price signals.
raincole 3y ago
Yes, I believe the Texas gov actually did the right thing here. If they believed crypto mining is inherently bad, it should not be allowed in the first place. If they believed crypto mining is at least neutral, it should get compensated for being forced to shut down (even temporarily), and it did.
enkid 3y ago
This is such a weird take. The existence of bitcoin mining increases electric demand. There's no inherent reason that without it demand would spike above what it already is without, outside of the price of energy, which it sounds like wasn't really a factor here. (Because the market is clearly being inefficient when a supplier is paying someone not to buy their product.)
stouset 3y ago
> If crypto didn't exist, another industry would need to be shutdown. This makes literally zero sense. Mining adds extra load that wouldn’t otherwise exist. If crypto didn’t exist, the Texas grid would experience reduced load. This should be obvious: if paying these miners to stop has the desired effect of reducing the load on the grid, miners not existing would surely have a similar effect. > their argument applies to every industry. Most other industries provide actual societal value, unlike crypto. And to hear off the rebuttal I already hear coming: no, just because it has a market cap doesn’t mean it’s adding value to society. As a trivial counterexample, Mexican cartels are undoubtedly worth billions but I think it’s pretty inarguable we’d all be better off without them.
- brutusborn 3y ago
  Does your argument work at the limits? E.g. if all non-essential industry in Texas didn't exist, would you expect the same amount of investment in energy production and thus an abundance of energy for 'socially valuable' uses? No: if there was no industrial demand there would be no need for huge renewable investments. Your counter-factual doesn't make sense because you assume that additional demand has no effect on supply and vice-versa. Electricity generation isn't some constant that is unrelated to industrial needs.
  - wolfendin 3y ago
    yes. If there isn’t enough supply to satisfy things like residential demand then you loose demand (and therefore re revinue
  - stouset 3y ago
    > if all non-essential industry in Texas didn't exist, would you expect the same amount of investment in energy production and thus an abundance of energy for 'socially valuable' uses? If those industries are using that power that Texas has invested in producing, then how is it "abundantly available" for socially valuable uses? Yes, without things like crypto, we probably would have somewhat less investment in green energy sources. We'd also be burning less coal. Given possible futures with "more fossil fuels and more renewables" versus "fossil fuels coal and fewer renewables", I'll pick the latter every time. The goal isn't more renewables, it's replacing fossil fuel with renewables. Worse, those renewables being used up by cryptocurrencies are going to be the optimally-located renewables with the lowest installation and maintenance costs for the highest energy output (think: most reliable wind at high speeds, least cloud cover and highest sun angle). As we do continue to transition further away from fossil fuels, every additional installation is going to be in locations marginally less competitive than the ones that came before. This means that transitioning the non-crypto loads will take longer and be less cost-effective than if crypto magically disappeared overnight.

I know; my point is that this situation isn't unique to crypto mining: their argument applies to every industry. If crypto didn't exist, another industry would need to be shutdown.

quickthrower2 3y ago

Indeed. Think of it like this. If there is a water shortage they ban hosepipes not tap water. They may ask people to limit showers. The equivalent here would be picking what industries to forcibly shut down. In that sense with such a system crypto mining might be OK (at least for this argument). But this compensation is a subsidy to ask more people to come in and use up a scarce resource.

brutusborn 3y ago
Your last sentence is where you go wrong: compensation is not a subsidy. If the government uses my land to build a highway, I am compensated because I lose something of value. Subsidies are not an exchange but are one-way. You are mischaracterizing the payments because you hate crypto.
- quickthrower2 3y ago
  It is a subsidy signal. "Build crypto mining in Texas and your expected earnings are higher than anywhere else!" I don't hate crypto, I have some nuanced opinions on it. Happy to criticize and defend it, depending on the argument. Once you get to PoS there is a lot less wrong with it environmentally. Unlimited carbon-free energy infra (and silicon production infra too, along with proper recycling!) would also make it less of a problem, but obviously we are not there yet. And I say unlimited because PoW demands that difficulty goes up and up and up to bid up PoW assets.
nullc 3y ago
The program is equivalent to selling the miners spare capacity at reduced prices. There are accounting reasons that the utility prefers to structure it as payments for load shedding. Try thinking it through in terms of reduced rates for spare capacity. Any criticism that doesn't work under both frameworks is logically unsound.
- p1mrx 3y ago
  Your argument would make sense if Texas had a near-term goal to decarbonize its power grid. As long as fossil fuels are burning, there is no spare capacity.
  - nullc 3y ago
    Embracing your response on its own terms, https://insideclimatenews.org/news/09032023/inside-clean-energy-texas-renewables/ https://insideclimatenews.org/news/09032023/inside-clean-ene... But that aside I don't think your response is a fair one for three reasons: (1) because solar and wind are the least expensive source of energy the excess power is significantly solar/wind. (2) But because they're the least reliable maximizing their use requires solutions like a large amount of sheddable load on the grid. (3) You're imposing your own opinions on the 'right' and 'wrong' sources of power which far from universal outside of internet filter bubbles and are not supported by the law. You may not like that some parties burn fossil fuels for energy but they currently have a right to do so. I agree that good cases can be made for restricting fossil fuel use, but so long as it isn't it's unproductive to pick and choose arbitrary targets that use energy for purposes you don't care about simply because fossil fuels for energy happens to exist. It's doubly so, considering 1/2 above because responsive loads help increase the share of renewable power.
    - p1mrx 3y ago
      I agree that the BTC miners are behaving legally, and in some sense they have a moral responsibility to maximize profit within the law, but their existence highlights why the law itself is unethical. I think lawmakers have an ethical duty to fix the "burning carbon is too cheap" problem, but the odds of that happening in Texas are low. If we had something like a carbon fee and dividend, miners could become a net good for society just by following price signals.

raincole 3y ago

Yes, I believe the Texas gov actually did the right thing here. If they believed crypto mining is inherently bad, it should not be allowed in the first place. If they believed crypto mining is at least neutral, it should get compensated for being forced to shut down (even temporarily), and it did.

enkid 3y ago

This is such a weird take. The existence of bitcoin mining increases electric demand. There's no inherent reason that without it demand would spike above what it already is without, outside of the price of energy, which it sounds like wasn't really a factor here. (Because the market is clearly being inefficient when a supplier is paying someone not to buy their product.)

stouset 3y ago

> If crypto didn't exist, another industry would need to be shutdown. This makes literally zero sense. Mining adds extra load that wouldn’t otherwise exist. If crypto didn’t exist, the Texas grid would experience reduced load. This should be obvious: if paying these miners to stop has the desired effect of reducing the load on the grid, miners not existing would surely have a similar effect. > their argument applies to every industry. Most other industries provide actual societal value, unlike crypto. And to hear off the rebuttal I already hear coming: no, just because it has a market cap doesn’t mean it’s adding value to society. As a trivial counterexample, Mexican cartels are undoubtedly worth billions but I think it’s pretty inarguable we’d all be better off without them.

brutusborn 3y ago
Does your argument work at the limits? E.g. if all non-essential industry in Texas didn't exist, would you expect the same amount of investment in energy production and thus an abundance of energy for 'socially valuable' uses? No: if there was no industrial demand there would be no need for huge renewable investments. Your counter-factual doesn't make sense because you assume that additional demand has no effect on supply and vice-versa. Electricity generation isn't some constant that is unrelated to industrial needs.
- wolfendin 3y ago
  yes. If there isn’t enough supply to satisfy things like residential demand then you loose demand (and therefore re revinue
- stouset 3y ago
  > if all non-essential industry in Texas didn't exist, would you expect the same amount of investment in energy production and thus an abundance of energy for 'socially valuable' uses? If those industries are using that power that Texas has invested in producing, then how is it "abundantly available" for socially valuable uses? Yes, without things like crypto, we probably would have somewhat less investment in green energy sources. We'd also be burning less coal. Given possible futures with "more fossil fuels and more renewables" versus "fossil fuels coal and fewer renewables", I'll pick the latter every time. The goal isn't more renewables, it's replacing fossil fuel with renewables. Worse, those renewables being used up by cryptocurrencies are going to be the optimally-located renewables with the lowest installation and maintenance costs for the highest energy output (think: most reliable wind at high speeds, least cloud cover and highest sun angle). As we do continue to transition further away from fossil fuels, every additional installation is going to be in locations marginally less competitive than the ones that came before. This means that transitioning the non-crypto loads will take longer and be less cost-effective than if crypto magically disappeared overnight.