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Cryptocurrency Mining in Texas
- thelastgallon 3y agoRelated: Texas paid Bitcoin miner Riot $31.7M to shut down in August (cnbc.com): https://news.ycombinator.com/item?id=37418866 https://news.ycombinator.com/item?id=37418866 Texas just got closer to blackouts than it has since 2021. What happened? (kut.org): https://news.ycombinator.com/item?id=37419220 https://news.ycombinator.com/item?id=37419220
- icpmacdo 3y agoThis truly seems like scapegoating larger issues
- friend_and_foe 3y agoOpens with a disingenuous "$86M owed, which will be paid for by Texas consumers" no, it already has been paid for by consumers when they bought the energy from them because they needed it. I'm trying to figure out if these people truly don't know how any of this works because they're uninterested or if they deliberately pretend like they don't because the truth is not condusive to the narrative they want to build.
- WillPostForFood 3y agoThey hate crypto, and they hate Texas, so they can take a cheap shot.
- kennywinker 3y agoWho is this they you speak of? Texas is a beautiful state, with a psychotic energy system, and a government that doesn’t represent the will of their people.
- Aloha 3y agoThe UK has an almost identical power market. We just generate more wind and solar than anyone else.
- friend_and_foe 3y agoYou've never been to Texas if you think it's beautiful lol. Its pretty in some places, particularly the desert and hills, but most of Texas is flat, muggy, hot, the forests are overgrown, pig farms and grain fields. Even the ocean is brown. California is beautiful. Texas is mid at best. But it has other things going for it. The energy system in Texas is one of it's strengths, the government does represent the will of the majority and is probably the main thing the state has going for it, that and energy resources. People don't move there because it's beautiful, they move there because it is governed and run pretty sensibly.
- kennywinker 3y agoCitations: Gov. policy not representing the people: https://www.texasmonthly.com/news-politics/texas-primary-election-2022-polling/ https://www.texasmonthly.com/news-politics/texas-primary-ele... Energy system insanity: https://www.cnn.com/2023/06/22/politics/texas-power-grid-heat-what-matters/index.html https://www.cnn.com/2023/06/22/politics/texas-power-grid-hea... As for texas being a beautiful state, I have no citations, just good memories from my many visits. I will grant you that there are a growing number of oil extraction / fracking hellscape in the state.
- friend_and_foe 3y agoAn article only talking about what voters may disagree with the government on? Why not address the other issues that keep getting these people reelected? They're winning on some platform. The article says mask and vaccine mandates, and only mentions that the people disagreed on the mask mandates. What about the vaccine mandates? Why leave the polling on that one out? And a biased article that only cites critics. The Texas grid has had one catastrophic failure in living memory. It also has some of the cheapest electricity anywhere in the country, even the world.
- kennywinker 3y agoNot sure how one can “buy energy” from a crypto company that doesn’t generate electricity…
- dublinben 3y agoThis is known as a Virtual Power Plant.[0] In the case of this cryptocurrency company, they are selling the electricity that they "would" be consuming if it wasn't being bought back from them. If they hadn't "sold" it back to the grid, it wouldn't have been available to be used by other customers. [0]https://en.wikipedia.org/wiki/Virtual_power_plant https://en.wikipedia.org/wiki/Virtual_power_plant
- arcticbull 3y agoWhat an absurd name for basically a big resistor generating heat you are paid to disconnect from the grid when it’s about to go up in flames. They need batteries not sudoku solver bots. Talk about doublespeak in this case, wow.
- anonporridge 3y agoIf there is no buyer for excess solar/wind electricity, then it must curtail and earn less income. Less income means it takes longer to pay off initial capital costs and generate return. Slower investment return from solar and wind deployments means expansion of them will take longer. If wind and solar takes longer to roll out at full scale for financial reasons, then our goals towards fossil fuel reductions takes longer. Therefore, if you can find a buyer who will suck up any excess solar and wind and pay them, we eliminate fossil fuels quicker.
- jcranmer 3y ago> If there is no buyer for excess solar/wind electricity, then it must curtail and earn less income. Solar and wind have the lowest marginal costs of production, which means they'll win out on the wholesale power markets. Furthermore, Texas is a state with increasing population growth and increasing energy needs (hotter planet means more A/C, after all), and has regularly been setting all-time highs on daily energy consumption. So there'll always be a buyer for the excess electricity.
- sneak 3y agoThis site is pretty generic template agitprop. Industry and activist groups make things like this all of the time to frame certain issues they don't like in the worst possible light. You can find this sort of stuff in lots of industries that have cash flows at risk that are trying to manufacture outrage in the voting public to create activists who will attempt to influence legislative priorities.
- imbusy111 3y agoThe only positive perspective here is that at least Texas is disconnected from the rest of the country grid.
- WillPostForFood 3y agoThe actual positive is that Texas is the largest producer of wind and solar, by a pretty large margin. The problem is that it creates an excess of energy production from morning to mid afternoon. Having flexible users, like crypto miners, buy that energy offsets the occasional energy crunch where they are paid, with energy credits, to cut usage.
- imbusy111 3y agoWouldn't the power be easily used up by all the air conditioning units?
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- user423 3y ago[flagged]
- paulgb 3y agoThis works in theory, but the problem is, these miners are not actually a flexible user in practice. Every minute they’re not mining, they’re losing money in the sunk cost of (depreciating) hardware. For example, in Q2 2023, Riot (the biggest miner in Texas) recognized 66mm of depreciation on only 50mm in revenue.
- nullc 3y ago> recognized 66mm of depreciation on only 50mm in revenue. https://www.usbank.com/financialiq/improve-your-operations/industry-insights/Maximizing-your-deductions-Section-179-and-Bonus-Depreciation.html https://www.usbank.com/financialiq/improve-your-operations/i...
- deleted 3y ago[deleted]
- monero-xmr 3y agoCrypto mining can scale up and down extremely easily. They are a good fit for hydro, wind, solar, and nuclear where not using the energy means it’s simply wasted (at least until serious grid scale battery exists). If you want to judge payers of electricity you should also look at video games. It is pure entertainment with no societal value beyond that. If that doesn’t bother you, maybe don’t judge what people want to electricity for if they buy it on the open market.
- paulgb 3y ago> They are a good fit for hydro, wind, and solar, and nuclear where not using the energy means it’s simply wasted This is a persistent myth in crypto circles, but it doesn’t match up with the financials of any company I’ve seen. Instead what happens is that once you’ve paid to build up mining capacity, particularly for mining rigs, any downtime is extremely costly. Miners are always racing against the clock of increasing hashrate and the next halving.
- monero-xmr 3y agoWhat I mean is, if the price of electricity skyrockets temporarily, it’s very easy to stop mining. They are extraordinarily sensitive to prices given there is a direct relationship to electricity and mining pool payouts.
- paulgb 3y agoThat’s true, but being a damper when prices skyrocket is different from being a damper on the predictable 24-hour output fluctuations of wind or solar.
- sneak 3y agoI think people have underestimated the environmental impact of training AI models. While one can argue things like GPT3/4 are useful, the question becomes how useful are they if they burn up gigawatthours to do it? GPT3 alone took around 334MWh to train, and that's one model from one company, and that's just for training, not usage. We should be focusing on making power cheaper and more accessible to everyone, not policing what people do with the power they have purchased.
- Animats 3y agoThis crypto mine in Google Earth.[1] What looks like a crypto mine is in the upper left. Notice the new tent-like structures. some under construction, all the air-handling equipment, and the huge busbars of the power distribution system. Also notice the active parking lot. The big plant at the lower right is a defunct Alcoa aluminum refining operation, sold in 2021. It looks like two of the long buildings that formerly housed aluminum electrolysis operations have been converted - they have what looks like air handling equipment outside and there is an active parking lot nearby. The large substation to the northeast of the mining farm is left over from the Alcoa era. So heavy power was available at that site. [1] https://earth.google.com/web/search/Rockdale,+TX/@30.56999181,-97.07218051,144.89514379a,4291.88285038d,35y,5.17935934h,0t,0r https://earth.google.com/web/search/Rockdale,+TX/@30.5699918...
- Aloha 3y agoThere are basically two places in earth that have a power market structured like Texas, Texas and the United Kingdom. We have an extraordinary reliance on wind and solar, and broadly insufficient thermal generation to deal with generation falloff. To be clear - I think wind and solar are great, and we should build more, but you also need a sizable amount of thermal generation (preferably nuclear) to provide for base load. I also don't think thermal can be replaced readily with gas turbine, battery, pumped storage, or other forms of rapid spin up equipment. Bitcoin (as what is effectively a big resistor) is useful as a artificial price support, to keep the market price at or above the marginal cost to generate power via a thermal plant. Essentially artificial static - but easy to shed - demand. To explain further, bulk power buyers buy their power often directly from a nearby source and site their facilities near those points, but they purchase power at fixed rates. When market price at those interconnection points rises above the price they paid, they're can be forced to shut down and resell that power back into the market pool. The losses from shutting dorm bitcoin are limited to production losses during the shutdown, and there is no loss of already made inventory, or other secondary losses like process startup and shutdown for a refinery, semiconductor fab, or other kinds of manufacturing which product a physical good. I probably wouldn't have picked a market power system like Texas, but it's here, it's what we have, and these kinds of weird market incentives are needed to make it operate correctly (absent a rate of return pricing mechanism.
- esalman 3y agoThere's a way insufficient thermal generation can be mitigated- operate under one of the Eastern or Western grids instead of maintaining your own. The motivation behind having a separate Texas grid is political and nothing else. That's why they have ask home consumers to conserve energy.
- Aloha 3y agoThe 2019 power crisis, when the texas grid kinda almost went dark? Our shortage was greater than the entire State of California's generation. It was greater than the spare capacity in any of the three neighboring interconnections. Like I'm not opposed to us joining our neighboring interconnections, but the problem would still exist to some extent because of the ability to move power long distances - and this assumes you build more HVDC and AC interconnections. (There is currently HVDC interconnection). Also, the problem would still remain, 4-6 hours a day, the cost of spot power at interconnection points would be lower than the marginal cost to operate a thermal plant.