In the developed world in particular, we're seeing the move away from fossil-fuel power. This is good but currently relatively expensive.
Crypto mining is starting to have very real impact on the ability of other people to live. It is adversely and disproportionately affecting poor people (who pay a greater share of their income for power).
And at best crypto provides extremely limited utility for society.
Crypto-mining apologists will point to figures that say "crypto-mining uses mostly renewable energy". What this actually means is that crypto-mining is focused on areas that have hydroelectric power because it's the cheapest, generally.
While you might say that's still good, it's starting to raise prices for other people. this has been an issue in towns on the Hudson Valley in New York, for example.
Even if you believe the overall impact of crypto-mining is small I guarantee you it's only a matter of time before politicians start using crypto-mining as a convenient whipping boy.
> Crypto-mining apologists will point to figures that say "crypto-mining uses mostly renewable energy".
Which is a shit take anyway because that means that non-renewable energy (plus the renewable energy non-consumed by the miners) is now more expensive for everyone else, it's the basic law of supply and demand.
And in the process those miners are also making non-renewable energy a more desirable investment because it now returns more money to those who invest in it (because of said increased prices people are now forced to pay for said non-renewable energy).
Update cause I'm getting down voted: the point is that the quoted articles are talking about China and are therefore outdated. I'm not referring to what is happening today with regards to the movement of mining.
_Some_ miners moved to Kazakhstan, but the truth is, they went global.
Apparently you didn't fully read the article. The shortages aren't the miners, it is the fact that 3 plants shut down...
"On October 15, the national grid operator, KEGOC, announced electricity rationing after three major coal-fired power plants shut down. KEGOC did not directly blame miners, but it used language similar to the energy minister’s and said it was cutting off customers who “over-consume.”"
> KEGOC did not directly blame miners, but it used language similar to the energy minister’s and said it was cutting off customers who “over-consume.”
And:
> "We have seen that our [country's] electricity consumption has literally increased by 7 percent in one year. That's a very big increase," Energy Minister Magzum Mirzagaliyev said on September 30, noting that consumption usually grows by about 2 percent per annum.
> Mirzagaliyev linked the demand to mining and proposed the government limit supplies of electricity to 1 MW per mining farm and to 100 MW for the whole sector.
Where's the mystery here? Again, hopefully for the last time: China banned mining. Chinese miners moved to Kazakhstan. Now Kazakhstan is having power shortages.
If big crypto-mining syndacates start using small scale nuclear (as some have shown interest in doing) to be carbon neutral, they could be on the vangaurd of proving out the technology and be a net positive in the medium to long term.
They really want low, consistent prices for electricity. Hydro gives them that but nuclear could also. Solar and wind do not.
They won't be running them, of course, just have long term contracts with the companies that make them. Check out NuScale Power[1]. They recently had their small reactor approved in the US (approval paperwork cost $500 million dollars) and they should have some of them running soon. The reactor can be built in a factory and is small enough to be delivered in one piece via truck. This will dramatically reduce construction costs, if they can get enough orders. Why buying and deploying 1000 of these is not in the climate bill is just crazy if climate change is the huge threat people claim it to be. I think global warming is going to be a big problem; bring on the nukes.
I agree with you that all sorts of nuclear power is going to be important in dealing with climate change.
I still disagree with the types of people that run crypto and are ideologically opposed to any kind of common sense regulation being let anywhere near nuclear power.
Here's [1] what happened when those people got something comparatively harmless like a cruise ship. I really don't think it sets a good precedent.
Seems fine to me. I already have nuclear irradiated genes, I'm sterile, and I prefer nature for company over human beings.
(If you were sarcastically implying that no one would volunteer, you are mistaken. I encourage making your point more clearly and with less sarcasm, since a worthwhile discussion is possible if you do so.)
I was a bit sarcastic, but the effects on real estate values alone prevent many from wanting to live near a plant.
The sarcasm came from the crypto part. The idea that swaths of US land would be devalued for the latest crypto pump and dump project makes me laugh and die inside.
I mean Solana is actually pretty cool. But all other crypto projects of which I am aware do not add value to our species as a whole. So adding nuclear power to the mix, for which the total cost of ownership is not even calculable? Just wow.
Energy is not fungible. Just because you have electricity in place A doesn't mean you can get it to place B in a cost-effective way, so mining next to, say, a hydro station with spare capacity (where electricity is cheap) doesn't necessarily have any impact at all elsewhere.
Coinmint in upstate new york is located in an old Alcoa aluminum smelter plant that has long shut down. It gets power from Moses Saunders dam a few miles away. The factory was originally placed near the dam so that it could provide massive amounts of power to keep the pot lines hot 24/7.
The whole place is super remote. I've seen the costs for carrying hundreds of MW just a few miles and they are massive at this scale. You can't just economically build more lines to send the power elsewhere.
Short of firing up the superfund site again and smelting aluminum, a bitcoin mine is literally the most profitable thing you could use this power for. The dam needs maintenance and a constant draw of power to keep it operational, and this pays for it.
Since the power lines are direct from the dam to the plant and the contracts were all drawn up decades ago, this has zero impact on the local community prices. Never mind that the local community doesn't draw anywhere near enough power compared with what the dam produces.
The crypto miners who set up shop in Northern NY to take advantage of cheap hydro and wind power caused electricity prices to spike for local residents, resulting in municipalities leveraging new taxes on the companies or issuing outright bans. This article is from 2018:
Plattsburgh went over its power allotment and was forced to purchase electricity on the open market for far higher prices. This cost was distributed among the city’s residents, some of whom ended up paying between $100 and $200 more for their electricity than usual.
Massena (near the Alcoa facility) this year issued a moratorium so the city could draw up new regulations:
“The moratorium is a pretty straightforward procedure. The language is relatively clear. The idea is that we place a moratorium on any further cryptocurrency mining development while we get some regulations in place that will govern those types of facilities. The planning board had indicated, and I agreed that the code lacked any real regulatory scheme for these types of facilities within the town,” Mr. Gustafson said.
You picked off the easily googled articles that are unrelated to Coinmint and happened during the crypto boom in 2017 / 2018, when people were renting warehouses and filling them with miners. Everyone got rightfully pissed.
You are just googling articles and not even reading them. Coinmint is mentioned in there, but there is no 'angle' in that article other than the mention. They are still in operation today and expanding and I doubt that is going to change any time soon.
Not to mention that all New York power plants, including Moses Saunders, are connected to a massive electrical highway that runs straight to New York City.
The Moses Saunders dam is connected to the NYISO transmission network. The power system in New York is designed to move power north to south, west to east (lines tend to be symmetric in theory but a good model is that the city is the load). You can look at a price map of New York State and see that. Power from the dam can go from it to anywhere else in New York (or the eastern interconnect) at the cost of transmission losses and tolling. Drawing power directly from a hydro plant doesn’t make that power green because, insofar as the plant could supply electricity to the rest of the grid, it means your power usage has the same environmental impact as the average unit of electricity on the grid at that time. The only thing it does is reduce your cost.
The amount of load that is allocated to the Alcoa facility has been negotiated and fixed into contracts and capex has been spent to build out the infrastructure for that. It isn't like you can just flip a switch and direct the power to the NYISO.
Yes you can flip a switch and direct the power elsewhere, that is what switching yards do. The plant might have a supply contract with Alcoa but if Alcoa doesn’t use the supply they contracted for you they don’t have to throw the power away. Usually those agreements have take or pay provisions which require the buyer to pay regardless of whether they take the power. If they don’t take the power the generator is free to sell it on.
Transmission losses are not nothing but they are not huge. Maybe 2% to New York (it isn’t they far). Maybe 5% total if you include distribution.
Edit: Follow the lines out of the plant, at 44.978432, -74.797925 they split.
This does make me wonder how difficult it is to raise the voltage on the same lines by changing transformers.
You might need to separate the lines more (and need bigger insulators), but I wonder how much of this gets overbuilt at the point of construction so you can upgrade to run more energy over the same wires without replacing them.
The NYPA is in the process of upgrading the Massena-Adirondack transmission lines which will initially be at 230kV, but later be able to be run at 345kV.
Lol your 150km loop captures Ottawa, Montreal and Kingston in Canada and Watertown/Plattsburgh NY.
All of these are about as apples to oranges in relation to geographic ties to Massena as you can get.
Between Massena and those places is a whole lot of nothing for a couple hours.
That's like saying there is some meaningful geographic tie between Bethlehem, PA and NYC (133km), or that "Unity House, PA" is not remote because it's 143km away from NYC and its 8.4mil residents.
Perhaps Massena is geographically remote and isolated then, but it is certainly not when it comes to the electrical system, which is what is being discussed here. There is plenty of existing transmission capacity to export hydroelectric power from Massena even without Alcoa and Coinmint.
You seemed to be asserting that without a major user near the dam, they would need to build more transmission lines or otherwise waste the generating capacity available.
This seemed unlikely to me, as transmission grids are built with significant redundancy, especially for the high-voltage networks. For example, the transmission capacity for the 8 500kV circuits from Bruce Nuclear (ignoring 3 230kV circuits) is 1.5 times the generating capacity. I wasn't sure about this particular station, but with a bit of digging, it seems like the Massena-Adirondack lines alone (there are several others) can carry 900MW, which is more than the capacity of the power station. So no additional lines should be needed.
I can't be that much since we've had long distance high voltage transmission lines for decades, even in relatively poor countries.
Plus, if you really wanted to because there was no other use, you could, you know, shut down the hydro power plant and return the land to nature. Hydro power plants still have an environmental impact, no point in running them for what is practically, speculation.
It's not that simple because these imbalances won't last forever. If the cost of renewable power remains low, it will encourage people in those regions to buy EVs, electrify their homes and businesses, relocate industrial usage to that area, etc.
If crypto-miners jump in to soak up that excess capacity, that cycle doesn't happen and there's very little positive outcome to show compared to all of those uses. 50 years from now, people are going to wish electrifying normal life had happened quickly but they're not going to be using a blockchain or glad that some speculators were able to make large returns for a few years.
People don't build hydroelectric plants in, say, northern Quebec and suddenly discover that there's all this free energy and no one around to use it. The build those hydroelectric plants and the transmission lines to places (say, Montreal) where people need that energy, even if those lines are 1000s of km long.
The electricity may be cheaper next to that hydro station because you're not also paying for the 1000km transmission line. But your use of that electricity would preclude the people 1000km away from using it.
What an odd take, given that electricity is almost the poster definition of fungible. Sure there are transmission losses, but they are very minor.
It's not perfectly fungible, but nothing in the real world is, everything has some sort of shipping costs. I can't think of anything more fungible than electricity except for virtual items like dollars.
I disagree, the hydro stations that we have in place were in fact meant to transport electricity from place A (a mountain area, in most of the cases) to place B (where people actually live) in cost-effective ways, that was their purpose from the very beginning. Using that energy up increases the price people from place B have to pay.
You could say that one could build a new hydro station just for delivering energy to crypto miners but that would open another can of worms as we're slowly starting to realise that hydro stations are not the most environment-friendly things imaginable (especially when it comes to habitat loss and disruption).
What you must also mention is that electricity is a finite resource. Consuming electrical energy - even at a hydro power station - means the energy you used isn't delivered to somewhere else.
you might say that the grid can only support a certain load at a some given time, but obviously more energy could be provided.
in any case, i think it's silly to concern ourselves with (specifically Bitcoin's) energy consumption, as it's tiny compared to the efficiency gains that are realized elsewhere as a result of bitcoin's adoption.
I'm a bit of a crypto enthusiast, but I generally agree that crypto-mining suck too much power out of the grid for it's current utility level.
However, your comment is a bit short-sighted and doesn't account for the switch of Proof-of-Work to Proof-of-Stake algorithms that is currently happening. PoS use A LOT less power and doesn't need extensive mining farms. See also: https://blog.ethereum.org/2021/05/18/country-power-no-more/
The only remaining question is: are we going to transition away from bitcoin, the largest PoW bastion, or not ? Probably, yes.
No, never.
Bitcoin will be PoW forever. PoS is and will never have the same security properties of PoW. Its bad for decentralization, its bad for censorship resistance, and its bad for the free world.
Yeaaaaah i will believe it when i see it. I don't think betting the economy on changing airplane engines mid-flight is a good play. My prediction is that if ETH switches to a PoS consensus model, the value will TANK. If this happens at all. I know the PoS timeline, I think it is fiction.
Ironically, ETH switching to PoS is the reason I am holding the currency.
In the future I expect all PoW cryptocurrencies to be banned, or severely hobbled, because of their electricity usage and e-waste. I have a long bet on ETH specifically because of its eventual move to PoS. Bitcoin doesn't even have a plan, and when the legal landscape changes it will be in the worst position to pivot.
We'll just have to see what the future holds. But I got my money down.
Nah, I don't think it can be banned.
At least not in the non-authoritarian parts of the world.
Even if it is, they would need to break my fingers to prevent me running a Bitcoin node. And I will get the blocks via Satellite. If there was a credible threat, we would go somewhere it is not.
If your economic thesis is based on hoping the government bans something, why are you even playing with state-resistant decentralized monetary systems?
> Nah, I don't think it can be banned. At least not in the non-authoritarian parts of the world.
Why can't it be banned? It's wasteful and closer to a Ponzi scheme than an actual currency.
> Even if it is, they would need to break my fingers to prevent me running a Bitcoin node. And I will get the blocks via Satellite. If there was a credible threat, we would go somewhere it is not.
That could be hard if many of the worthwhile places ban it :-)
> If your economic thesis is based on hoping the government bans something, why are you even playing with state-resistant decentralized monetary systems?
Most people in crypto are in it for the money, not for idealism.
As someone who has been in this space a long time, I assure you I am idealistic in my positions. Hopelessly idealistic.
What does Ban even mean? That it is illegal to run in places like the US?
Very unlikely, and as more institutional money flows into it, it grows more unlikely. Some places are starting to put 401k/pension funds into it. Some places are raising it as legal tender. There is also that 1st amendment thing.
So will it banned like drinking straws? (which are still available) Or banned like drugs? (which are still available).
I feel you WANT it to be banned because it tickles your authoritarian tendencies. I am glad we live in a world, at least today, where your wishes are ignored.
"If your economic thesis is based on hoping the government bans something, why are you even playing with state-resistant decentralized monetary systems? "
Because I want to make money? I don't see why that matters.
I don't need or want the technology to be banned. I want mining operations to be illegal in the US, and I want it to be illegal to convert to/from USD.
Actually PoW accentuates the concentration of miners, while in Ethereum 2 you are limited to a few mining machine, thus distributing more equally the mining power.
Bitcoin miners per se do not control Bitcoin network. They are the backbone, but the nodes ultimately decide whether they include a mined block or not. Validating blocks is way cheaper than mining them. Expensive mining process only ensures that you can't easily flood the network with bogus blocks.
Actually, no, the opposite. One of the fundamental problems with PoS is that it has no externally observable metric that a block is correct. PoW is trivially externally verifiable. This is good for decentralization. There can be no lies from the miners.
Bad for the free world? That's a bit of a fucking stretch. I think you can pretty comfortably argue the power and e-waste situation created by PoW is much worse for the "free world" than a slightly stronger consensus mechanism for a speculative value store.
I think the other thing ignored is that crypto tends to take as much power as possible.
Making crypto more efficient wouldn't make it use less electricity, it would just increase the number of miners. And you'd be a fool not to do that because only one node becomes part of the chain and the more you mine, the greater your chances you get that golden ticket.
Crypto will always try to get power usage as close to 100% as possible from every possible source. We never get off of fossil fuels unless crypto stops being a thing.
And not to mention, being at capacity all the time is a bad thing. In something you want available all the time, you want a lot of potential capacity in case of failures or demand spikes.
It does not appear that this particular electricity shortage is caused by moving away from fossil fuels. The coal plant shutdowns mentioned in the article were outages (2 unplanned and 1 planned) [1] rather than permanent closures due to an energy transition.
Even if it did use mostly renewable energy, which I doubt (I've heard some buy old coal fired plants to run their mining operations), it's still energy that could have been used for something useful. It takes away power for real enterprises and people that use it for their daily living.
> What this actually means is that crypto-mining is focused on areas that have hydroelectric power because it's the cheapest, generally.
Hydro is also interesting because it has to output power. When the reservoir gets above a certain level water has to be let out because dams can't handle overflow. That's achieved by diverting water to a stream without a turbine.
> this has been an issue in towns on the Hudson Valley in New York, for example.
Believe you have your NY State river valleys swapped. There's not much mining downstate. Most of the the mining in NYS is up in the North Country and pulling excess power of the St. Lawrence River and a dam up there that supplies a fair bit of power to NYS/Canada/surrounding region. There was a study from Wharton recently on the impacts of power prices as a result.
Taxation could be a solution though, with rebates for low-income people and individuals. This means that the disadvantaged still get access to cheap power, where as crypto miners have to pay the (taxed) price which makes their operation less profitable.
It's not uncommon for poor people to not have spare money to float some taxes to the government for up to 12 months until they can get their rebate at tax time. That's assuming that the rebate is easy enough to get for 100% of those eligible to claim it.
This seems strictly worse than just taxing "mined" bitcoins more harshly.
The Sun is not a limited resource, not until we're a K2 civilization anyway -- and we're no where close to K2. The other materials in solar panels are abundant and reusable. There is plenty of unoccupied desert to build on.
Yes, let's look at the actual world as it exists today: the land area required to power the annual global energy consumption (110 TWh) with the inefficient solar panels that we have today is smaller than the US state of New Mexico.
Are you thinking of purified silicon? Silicon is made starting with quartz, quartzite, or similar minerals rich in silicon dioxide. Crude silicon always requires additional purification for solar uses after it's initially created, so the purity of quartz going into the electric furnace isn't critical.
You can see the process flow from raw materials to completed PV modules here:
> And at best crypto provides extremely limited utility for society.
This is true for bitcoin. It failed at everything it set out to be and yet it is the most mined coin. Truly a waste of energy.
There are better projects out there which actually provide value and utility. Monero is an example. It's pretty sad that bitcoin is still number one despite the existence of these projects.
Monero is a proof of work cryptocurrency. I like PoW, it is the most secure distributed consensus algorithm we have discovered. If Monero was as popular as Bitcoin, it would use something similar to the energy. None of it is a 'waste of energy'.
I agree with you. It's a waste of energy because that energy is being spent mining BTC, a useless coin that isn't anonymous, private, decentralized, fungible, it isn't even an actual currency. It should be spent mining Monero instead which actually does have all of those properties.
I don't remember who said that crypto is Lululemon, Amway, multi-level marketing for tech guys, but it's amazing the similarities.
In a discussion on Proof of work does not scale, cannot scale, will choke out production in the economy going forward because of its design, a person responds with say "you're right, that product is bad. Don't buy that one instead buy this one".
Does this other one solve any of those problems? Nope, but the person hawking it has purchased a lot of product and gets a cut if you buy into it.
It's amazing how disingenuous crypto conflict of interest has made any and all discussion about crypto.
So you think I'm a multi-level marketer? Is it even possible to prove otherwise? I just happen to believe in that project and like to talk about it. Am I supposed to not talk about this stuff?
I don't particularly care that energy is being spent on cryptocurrency. What I hate is the fact that energy is being spent on bitcoin in particular. The energy is not supposed to be wasted, it's supposed to buy us something. Namely, a decentralized, private, anonymous, uncensorable, unsanctionable digital cash network. Something that could withstand even the might of the US and China if needed.
Bitcoin is not it. At this moment I think Monero is closest to being it. I'm totally open to new ideas.
It's not even 1% of global energy consumption. It's the oil companies who are boiling the world but nobody dares to touch them. The cars, the factories, the developed nations and their comfortable lifestyles supported by such a highly polluting economy. China is the most polluting country in the world, but will the US, Europe stop trading with it? No. How will the west survive without its cheap consumer products? The very computers we're posting this on? Yet I'm expected to care about BTC energy consumption? No, I refuse to care. It's a drop in the ocean compared to the real problems that no government will lift a finger to solve.
For now. As its usage goes up, its energy consumption will go up, <<by design>>. It's crazy that we're even talking about a <<currency>> (!!!) using this much power.
> It's the oil companies who are boiling the world but nobody dares to touch them.
We are working on all of that, I guess you haven't been following the news. It's not easy, but we are.
> The cars, the factories, the developed nations and their comfortable lifestyles supported by such a highly polluting economy.
Same. Electric cars, environmental regulations for factories, increased energy efficiency for houses, etc.
> China is the most polluting country in the world, but will the US, Europe stop trading with it? No.
China's working on it and the US and EU are actually kind of gearing up towards a trade reduction.
> No. How will the west survive without its cheap consumer products? The very computers we're posting this on?
These computers are also used for work, hobbies, making people's lives better.
> No, I refuse to care. It's a drop in the ocean compared to the real problems that no government will lift a finger to solve.
It's not a drop. It's something we created about a decade ago and it uses up a 100th of the energy the entire world is using. That's crazy. And those real problems are being tackled, you just don't know it or refuse to see or think it's simple and easy to solve.
> And those real problems are being tackled, you just don't know it or refuse to see or think it's simple and easy to solve.
Okay. Let's wait for them to solve the big problems first before we focus on inconsequential stuff like cryptocurrency. Once that's taken care of, we'll see if proof of work remains an issue.
In absolute terms, sure. In relative terms, it's nothing. Removing BTC energy consumption from the equation barely affects the result. In order to actually do something about climate change, humanity needs to tackle that big 80-90% chunk of energy consumption coming from much more problematic industries. Cryptocurrency is a nuisance by comparison, a minor problem.
I think if you're going to promote this view, you really need to look into the energy growth rate of Bitcoin.
It has doubled in the past 6 months. And gone up 10x over the past 4 years. How many more times can it go up 10x before you would consider it no longer nothing, and now a concern for the world?
The first rule of holes is "stop digging". We are in a hole with energy consumption. And we've set off an automated digger to sit next to us. People are shouting, if we want to get out of this hole, yes we need to fill it, but first need to do something immediately about this automated digging machine.
In my option (and I'm not singling you out as many in crypto feel this way), it is incredibly backwards for anyone to both say stopping climate change and energy consumption is a priority - and that promoting a growing energy beast isn't a huge concern to be addressed.
I'm not ignoring or dismissing the problem. I just think it's not a priority right now. I also completely support ideas that make cryptocurrency mining more sustainable. In this thread I had an amazing discussion about using the waste heat generated by miners for useful purposes. We definitely need more of that.
I don't like these posts claiming cryptocurrency is literally destroying the world and must be banned or regulated out of existence. Those need a reality check, and the reality is cryptocurrency is not even 1% of world energy consumption.
Why would law-abiding citizens need untraceable, anonymous cash (which is used in 99.99% of crime). This is not a good argument. There are plenty of uses for privacy beyond crime. It is the equivalence of the 'you have nothing to hide' argument, which is total authoritarian bs.
Whatever a law-abiding person does. We should not be subjected to total government surveillance because someone somewhere might evade taxes or launder money. We fight hard to maintain our privacy in all fronts, there's no reason for finances to be any different.
But it is not Bitcoin. It likely will never have the attention of large capital holders (eg: Financial Institutions). Ignoring the regulatory risks (which absolutely exist), IMHO the real critical risk is that bugs or bad math will break the economic model.
With transparent blockchains like BTC, you can trace every satoshi. With opaque chains like XMR, you risk that a bug in the code will permit invisible inflation. This has happened before! (https://jonasnick.github.io/blog/2017/05/23/exploiting-low-o...).
The same problem applies to all ZK based solutions -- Zcash, Grin, Mina... You are one mistake away from invisible inflation that will sap all the value from the coin.
> Ignoring the regulatory risks (which absolutely exist)
I'm of the opinion that Monero is a failure if it can't withstand regulation.
> IMHO the real critical risk is that bugs or bad math will break the economic model.
I agree. I don't think I have sufficient cryptography knowledge to evaluate this risk but I acknowledge its existence. For the moment I trust that the Monero developers will do everything possible to prevent this from happening.
Still, BTC is way too valuable for something that failed to become everything it was envisioned to be. It seems to be driven by brand name alone. XMR is way too undervalued and undermined for a coin that at least tried to address the majority of problems in BTC.
Not a surprise when it is the most valuable one, a day of drops and the corresponding surges that come afterwards can set you up for a long time if you're not from the EU/US, it also appreciates faster than a house, which makes it a great asset to hold.
Not a surprise it is the most sought after, looking at it from the supply/demand aspect.
An important distinction here, this really only applies to PoW (proof of work) tokens. The original philosophy for Bitcoin being proof of work is that you had to give up something (electricity) to produce it.
Your comment is very true for Bitcoin and other PoW tokens but that will soon be in the rearview mirror as more and more coins either come out as PoS (proof of stake) or migrate to it (in the case of Ethereum), even Bitcoin is taking about migrating to a PoS model.
This has been a popular defense for several years now. For awhile I too bought into it. But there are real questions about whether it can ever work and won't in fact be vulnerable to attack.
The best evidence for this is that PoS hasn't happened despite years of talk about it.
> But there are real questions about whether it can ever work and won't in fact be vulnerable to attack.
At this point PoS is quite prevalent among modern blockchains (Cosmos, Solana, NEAR, Algorand, Polygon, Cardano, ...). As far as I know, there have been no successful attacks based on PoS's theoretical weaknesses, like its reliance on weak subjectivity. Some PoS networks like NXT have been in production for nearly a decade now. Isn't that fairly strong evidence that PoS works fine in practice?
There have been several consensus failures from PoS, including the recent outage of Solana. One just needs to look at the Steem/Hive 'takeover' by Sun to see how political wars can form and threaten the security model in PoS world. Contrast with bcash incident of 2017.
A few years ago, I saw a Hybrid PoS/Work chain (a satoshi-client derivative coin) being attacked in real time, and totally hijacked. Ultimately it was a bug in the PoS logic that enabled it. I am very apprehensive about PoS even providing a fragment of the security.
Chain takeovers are a real threat in PoS world. The attacker needs very little physical resources -- just know the right stakeholders. PoW need resources. PoW is trivial to verify and test.
PoS advocates like to gloss over all the real world failures.
You may notice that during the China ban, Bitcoin worked pretty much as expected (with some slight block delays until difficulty adjusted). PoW works.
The other metric to observe is how many chain reorg's occur due to PoS. This is practically a non-event in large PoW chains like Bitcoin, today. In Turing complete chains like EVM chains, it might not be possible to reorder transactions with no-loss during reorgs as transactions are state dependent. PoS potentially destroys finality.
Do you mean [1]? It sounds like the consensus issues there were related to Solana's unusual PoH model. Validators being "unable to process all the proposed forks" would never happen in a BFT PoS model, like Tendermint etc, since forks cannot occur (under a 2/3 honesty assumption).
> Ultimately it was a bug in the PoS logic that enabled it.
To state the obvious, PoW chains can have bugs too. It sounds like you were just looking at a niche project that didn't have high standards for engineering and audits.
> PoS advocates like to gloss over all the real world failures.
PoS and PoW chains have both had plenty of incidents, but you haven't really pointed out any PoS incidents that were caused by weaknesses inherent in the PoS security model.
> Bitcoin worked pretty much as expected
Bitcoin has been around the longest, has a relatively small feature set, and rarely changes. One would expect such a chain to be very stable regardless of PoW/PoS.
> The other metric to observe is how many chain reorg's occur due to PoS.
Reorgs can't occur in BFT PoS chains (under a 2/3 honesty assumption).
"extremely limited utility for society" is harldy an argument.
It's limited today. In 10 years it can change many things for people (very possibly in areas that are not even close to crypto).
Going to space had hardly any utility, going to Mars even less. But on the way there will a TON of progress and discoveries made that will be used in medicine, manufacturing etc.
> And at best crypto provides extremely limited utility for society.
Whenever you sell it, if you generated a profit on that sale, you are going to pay taxes on it (at least in the US).
That's a real value for society. Can it ever be enough to offset the added squeeze on the electricity grid (which we really don't need right now, with EVs coming on and our grid in serious need of upgrade/expansion)? Someone will have to do the math on that.
No. Your profit from trading bitcoins is someone else's loss. The amount wealth in society remains unchanged, only it's allocated differently. Total value added = zero. A tax on profits doesn't add any value either, it's just an additional re-allocation of the same wealth.
Crypto transactions cannot create or destroy fiat currency.
If you buy and hold cryptocurrency, at no time will it produce "dividends" in fiat currency, or physical objects like cell phones.
So if you make money by selling some cryptocoin, that is _entirely_ because someone else purchased it at a greater price than you did.
Their expectation is that someone else will later buy it at a greater price from them, and that person will be buying it on the hope that someone will pay yet more again.
No actual cashflows appear anywhere in this process.
> at no time will it produce "dividends" in fiat currency, or physical objects like cell phones
Why it has to be physical? One could use cryptocurrencies to pay for virtual things on virtual internet, which are nevertheless thought to be meaningful.
Like, fiat currencies exist as a way of paying taxes to your government and also you can exchange them for goods and services.
Don't ever let any Bitcoin or NFT shills get away with lying to you that their cryptocurrencies and CryptoKitties and Digital Pet Rocks run on renewable energy.
And never let any of those get-rich-quick pyramid scheme shills get away without forcing them to openly admit that even though they're burning coal, wasting electricity, destroying the environment, causing climate change, cancer, and heart disease, they simply don't give a flying fuck about that.
>In 2013, the country produced 93.76 billion kWH - 70 billion kWh (81%) from coal, 8 from gas and 8 from hydro. The country has 71 power stations, including 5 hydro power plants located on the Irtysh river, which translates to total installed generating capacity of 19.6 GW. 75 percent of electricity generated is consumed by industry, 11 percent by households, 2 percent by transportation.[25]
Looks like you're being downvoted by all of the people that refuse to own up to their own hypocrisy over this issue. You're exactly correct, of course. China manufactures the vast majority of this equipment, and China runs on coal.
We need computers for a lot of solid, real life uses.
We don't need cryptocurrencies for almost anything being peddled. They're supposed to be decentralized, but you can't really use them that way in 99% of situations. They're supposed to be currencies and instead they're vehicles for speculation. Etc.
I think their slogan should be: "You don't really need cryptocurrencies for that".
PoW crypocurrencies are global communications systems that offer nonrepudiation, instant settlement, and finality; a subset additionally offer privacy. It's valuable to people who need those guarantees. There are speculators in every market.
I'll be the first to admit that bitcoin failed to achieve everything it was supposed to. However, criticizing cryptocurrency as a whole over energy usage of all things is hypocrisy. It's not even 1% of global energy consumption. The world is being destroyed, but not by this.
Yeah, but in the grand scheme of things it's nothing. A nuisance at best. If people really are worried about climate change, they need to stop trading with China, regulate big oil, invest in public infrastructure and transportation, heavily incentivize development and usage of clean energy sources, etc. Bitcoin is just a convenient distraction from the real problems. Regulating it will contribute virtually nothing to this cause.
At this point in time, there is no reason to care about this. Maybe we start caring if some insane development happens and BTC suddenly starts representing 10-20% of our energy consumption. Until then, there are bigger problems to worry about.
Indeed. If folks weren't just virtue signaling about climate change, then we could get on with tiling a third of the State of New Mexico with solar panels to power the North American hemisphere.
If that energy were produced by solar, then it would require 332 km^2 of 290W 60-cell solar panels which is roughly the size of downtown Austin, TX.
The ability to tile a land area the size of a smaller American city with relatively bad solar panels to power half a percent of the world's energy usage is pretty amazing.
You could have made the same argument about the Internet itself 20 years ago (i.e., a speculative new technology that provides little evident utility while costing a lot in terms of energy usage). What about Amazon's 2-hr delivery? Do you really need a gas-guzzling vans delivering at all hours when the USPS will come to your door daily anyway? What about ride share? How many millions of people opted to ride alone in a gas-guzzling car vs taking a bus or the train?
Energy usage is highly correlated with economic development, trying to curtail energy usage is akin to economic suicide. What you should be advocating for is clean energy production, not consumption. You're headed down a precarious slope if you start policing how and on what people can use energy.
Amazon is a net positive for energy in car dependent places. It's more energy efficient to drop something off than for someone to drive to the store to buy it. You can get significant economies of scale and those apply to energy usage.
Beyond that, we can and will eventually force Amazon to use EVs if they don't by themselves to save money, which is possible.
I'm all for strongly inducing people to use trains, buses, ebikes, and the like.
We can advocate for clean energy, and we should. But advocating against zero-sum energy usage is perfectly fine and completely consistent with good economic policy.
The internet never used all that much energy. The computers were there anyways, and when it was in its speculative stage it was piggy-backing off the telephone network for most of the actual transmission. It was never even close to a power hog until it became very evident how useful it was.
There are quite a few carbon neutral chains that people do launch on. Most businesses do require energy but they try to offset it. People are trying to shift away from mining for the largest NFT blockchain though, ethereum.
> Don't ever let any Bitcoin or NFT shills get away with lying to you that their cryptocurrencies and CryptoKitties and Digital Pet Rocks run on renewable energy.
Cryptokitties run on Ethereum and Ethereum is already partially using PoS. Now from day one people have said "PoW does not work" and yet PoW, so far, is still working. People are now saying "PoS does not work" and yet, so far, PoS is working.
The cryptocurrencies haters better come up with something else than the "energy" argument against cryptocurrencies because the shift to PoS is coming and it's coming fast.
If PoS comes, it'll be something to stop criticizing Ethereum over. It'll still be useful to criticize cryptocurrencies in general. See Bitcoin, Monero, etc.
If you're using resistive heating, a computer is about as efficient as a space heater.
I have not recently done the math, but I'm pretty sure in my area its still more economically efficient to heat my home with natural gas than resistive heat. Obviously, emissions are a concern, future price uncertainty of fossil fuels, etc. Not the best way forward.
However, heat pumps in my area can make a ton of sense. They're far more efficient than resistive heating as long as it doesn't get practically arctic cold outside. When in decent climates they're about as economically efficient than a gas furnace.
In other words, mining crypto for heat isn't necessarily the most economical thing to do. It may just be better for you to use a heat pump and put your savings into buying crypto if ultimately having crypto and being warm is your goal.
I use NatGas to heat my house here in Alaska (in-floor radiant heat, quite efficient). But I also have wood burning stoves and am surrounded by forest. If the price of NatGas increases to the point it becomes unaffordable, trust me when I say my carbon footprint will go up dramatically. NOT heating my house is not an option in the winter here.
Electric heat is 100% efficient. Natural gas is anywhere between 80-97% efficient depending on your model of furnace. Convert therms of gas[0] and kWh[1] to BTUs, and multiply by efficiency and price to determine which is cheapest[2]. Usually natural gas wins.
For emissions it’s more complicated. You need to look up the energy source for your grid[3], it will vary a bit seasonally, and factor in transmission losses for electric heat. You can then calculate the emissions per BTU of natural gas heat vs. the emissions of the grid to give you a BTU of electric heat. For most grids, natural gas still wins.
Where this gets complicated is if you use a heat pump, either a “mini split” (common in Europe and some new apartments) or a ground source (“geothermal”) heat pump. These have a seasonally adjusted efficiency rating[4], usually between 2 and 4. This means per unit of electrical energy the unit is moving 2-4 units of heat (depending on model and exterior conditions). You can take the electric heating number from above and divide by this number to figure out the cost and emissions for a heat pump. Usually a heat pump will win on emissions and lose on price (including installation costs) because natural gas is very very cheap.
0 - A “therm” of gas is the traditional measuring and billing unit of natural gas in the United States, it’s equivalent to roughly 100,000 BTUs. Your bill will probably be in therms, but cubic feet are trivially convertible to BTUs too.
1 - 1 kWh is 3,412 BTUs
2 - You can either compare per BTU costs, or your estimated monthly cost based on your heating need. The latter is important if you have tiered or seasonal electricity pricing. To figure this out take a sample monthly gas bill from winter, subtract your summer gas bill (if you have gas hot water) and use the calculations above to determine your heating needs in BTUs. This lets you calculate your electricity needs in kWh and therefore costs.
3 - It’s important that this is a seasonally correct. Most grids get dirtier as more polluting and less efficient power plants are turned on for summer AC, often coal power plants in most regions. Therefore the emissions per kWh will vary on a month by month basis for a given grid.
4 - If we’re being very precise, a non seasonally adjusted number would be best here. An air sourde Heat pump will struggle to extract heat from very cold exterior air, reducing its efficiency. A ground source one will be more efficient, given that ground water is warmer than the air typically.
Assuming you already have a gas furnace (I do, was in the house when I bought it), and the option is to either use resistive heat (space heaters, computers, inefficient lightbulbs) or the natural gas furnace, you would need to look at two main things. The cost of electricity per BTU and the cost of natural gas per BTU.
On a somewhat recent decently high gas usage month that emulated a cold winter (forgot to turn off the pool heater from spa mode on the whole pool circulation mode for a few days...oof) my $/CCF (Centi-Cubic Foot) was 1.22. Converting $/CCF to $/MMBTU, divide by 1.037 to get ~$1.176/MMBTU.
Electricity is usually billed at kWh pricing. 1MMBTU = ~293kWh. I pay ~$0.086/kWh, so 293 * .086 = $25.198/MMBTU.
Obviously, you're not getting 100% efficiency with the natural gas furnace. I think the one I have in my attic which is almost a decade old is rated at like 85% efficient. 90% efficient furnaces are available, some of them don't even require a metal chimney as the resulting air isn't even that hot.
But even at only 85% efficiency, you're still taking more than 10x less dollars per heat.
This math changes when thinking about buying new equipment and other factors. I haven't looked at equipment pricing so it would be hard for me to say how expensive it would be compared to alternatives. This can also vary a good bit from your local market. Energy is stupid cheap in my area, natural gas is a good bit cheaper here than a good chunk of the US while electricity prices are about median, maybe a bit lower.
> Computers also generate heat. Wish I could use cryptocurrency miners for my heating needs. Why burn fuel or pass current through resistances for that?
Realistically? Cost. If your goal is to heat a space, it's much cheaper and more reliable to NOT use thousands of dollars of silicon. Doing calculations based on the site below, you might be able to heat a smallish bedroom with a very beefy PC. I can get a space heater that puts out that much heat for less than $50 and is far less likely to stop working (e.g. heatsink gets clogged and system overheats).
I mean, you laugh, but during winter in my office at home whenever I get cold I just start running Folding@Home on my pc, it helps cure cancer and keeps me nice and warm. As far as I can tell it's cheaper than turning the heating on in the whole house too.
I already have an rtx gpu. It nets about 8$ of eth a day. Uses 250w. So that's around 1$ of power a day. And enough wattage to heat my office. So I can get paid to keep my room at a nice temperature. This is why I mine now
> I already have an rtx gpu. It nets about 8$ of eth a day. Uses 250w. So that's around 1$ of power a day. And enough wattage to heat my office. So I can get paid to keep my room at a nice temperature. This is why I mine now
Unless your office is the size of a closet, that doesn't sound like it's enough to provide all of its heating needs (at least according to the formula of the website I linked).
It's certainly practical to provide to exploit heat generated by computers to partially heat a space, but I don't think it's practical to use silicon as the main heat source.
My heater doesn't become less effective each year, requiring replacement. While ASIC concretely implies this, GPU is not excluded if you want to remain competitive (read: generating profit)
You might say that a regular electric heater is 100% efficient, converting every unit of electricity into exactly one unit of equivalent heat.
Crypto mining hardware is >100% efficient, as it's exactly as efficient as an electric heater, but also generates revenue. Over time, others make more efficient crypto mining hardware, reducing the yield from yours. This causes your "efficiency" to gradually reduce down to 100%, but no lower.
However, nowadays we have heat pumps, which are also more efficient than our 100% benchmark, and produce additional useful heat.
It also makes the hardware depreciate (simply with the passage of time, but also because of the particular usage), which in practice effects the balance and can easily turn the monetary efficiency into negative.
4+ kWh electric showers are ubiquitous in my country. Literally a dumb piece of metal resistance immersed in water. Anything is better than the current situation. What if it was a processor instead?
What if a bunch of home servers could heat up stored water through their heat instead of just dissipating that energy uselessly into the air?
We'd be getting the heat we need and we'd be helping build a decentralized cash network. We were gonna spend energy heating up stuff anyway. Might as well get some cryptocurrency out of that heat.
This is what WiseMining.io is addressing with their Sato “bitcoin boiler.” It uses hashcards (daughterboards populated with mining ASICs) immersed in coolant to augment a typical heat pump setup.
That's interesting. My search for products in this category turned up the Qarnot company which also has a "digital boiler". Apparently, it's a general purpose Linux server that can be used to mine any coin or perform any type of computation.
Not sure if it's even available outside Europe. I wonder if it's possible to somehow replicate this with a home server. How is it pumping the heat out of the components and into the water system?
Resistive heaters use energy to create heat. Heat pumps use energy to move heat.
For a resistive heater, its taking 1 energy unit from the wall and putting 1 energy unit into the air.
A heat pump will use one unit of energy from the wall to take 3-5 units of energy from one side of the system and dump that 3-5 units of energy to the other side of the system.
I see. Heat pumps must move existing heat from somewhere though. Won't those come from burning fuels?
I have a lot of solar panels in my home. I'm generating more energy than I'm using. I don't consider efficiency to be a significant concern at the moment.
There's plenty of available heat outside, even when its somewhat cold outside. This breaks down when it gets really cold, like arctic kind of cold, but most places where lots of people live don't get that cold for very long. Its the same principle as how even when its hot outside your AC unit can still manage to dump some heat out there. Its because of the latent heat of the refrigerant and the phase change induced by the changes in pressure from the compressor. Its kind of hacking the physics of phase changes to move energy from one place to another.
> I'm generating more energy than I'm using. I don't consider efficiency to be a significant concern at the moment.
I also produce a surplus and I sell it (for more than the local utility charges to boot). More efficiency is more money in my pocket, is it not for you?
> More efficiency is more money in my pocket, is it not for you?
Unfortunately, it isn't. I also inject surplus energy into the local power distribution network. In my country, I don't actually get paid for that. They give me "kWh credits" that I'm supposed to spend whenever I generare less energy than I consume. These credits will expire if unused, I can't accumulate them.
So it is simply not viable for any home or business to generate more power than they consume. I have space for more solar panels but I'd be giving the power companies free energy if I installed them.
Cryprocurrency is the perfect solution for my problem. Instead of giving them my energy surplus, I sink it into my computers instead so they can mine cryptocurrency. If the waste heat could be reused somehow, it would be even better...
It moves existing heat from the outside to the inside of the house. It works exactly like an air conditioner, but in the other direction. (And some heat pumps are reversible so they can be used as both)
You drill very deep shafts and move refrigerant up and down. It’s efficient but capital costs are huge. Usually it does not make sense economically without government regulations.
There was a video I've seen someone, a year ago, setup a 'pre-heater' for their home heating system with a mining rig, so that the home heater doesn't have to use nearly as much fuel/electricity to warm the home. I forget how efficient it was, but the summary was that the net decrease in cost to run the heater was observable but not significant enough to justify everyone doing so.
That sounds freaking awesome. Do you know how to find it? I found a company called Qarnot that's offering products along those lines but they're probably extremely expensive. A home project would be ideal.
The premise was to only operate the miner in cold months, when the outside air could easily cool the system. I didn't fully re-watch this video but it does give a good setup and explanation for it.
> Cryptos = suck that energy out of the power grid to gamble with one another.
All crypto currencies are used for gambling?
Can you give us a good solution to hedge against government induced inflation that does not involve usury or having enough cash to purchase property outright to rent it out? Note: almost all companies deal with interest in some way or another, even if they don't need to, so usury is embedded in their stocks.
Can you give us a good solution to keep the price of bread from rising above the ability for impoverished people to purchase it over government induced inflation?
Oh right, I'm dealing with someone who believes in the "free market" while plugging their ears when people talk about subsidies for the gas, meat, defense, and other "profitable" industries.
> Oh right, I'm dealing with someone who believes in the "free market"
I don't believe in absolute free market as defined by capitalism. Case in point: I do not deal with interest (usury), as it is prohibited in my faith. There are also some other red lines which I will not get into here, as it is not the subject of discussion. I'm happy to go into them more though if someone is curious. As such, no, it is not your typical capitalistic position.
> Can you give us a good solution to keep the price of bread from rising above the ability for impoverished people to purchase it over government induced inflation?
Yes. In Islam, we have something called Zakat, a form of "wealth tax" if you will. Its proceedings go to impoverished people, among others. It has been documented that in Iraq during the Ummayad period, there were no poor people left to even accept Zakat, after everyone was paying their share.
Of course we still need to handle the root cause: move to a currency that is not bound to interest that keeps growing, and the government can print money at will, devaluing everyone's hard work in an instant.
Interest is not the same as usury whatever definition you use. The fact that your faith equates them does not make them equal. You are perfectly free to use them interchangeably in your mind but most people do not do so, and your use leads to misunderstandings.
Interest, in traditional western societies is just the measure of the present value of future time, which is understood as valuable. Thus, money+time=“more money”.
> Interest is not the same as usury whatever definition you use.
In Islam, there is no difference. If I lend you $10,000 and I ask for $10,000.01 back, that $.01 is usury. They are equal because both operate on the same exploitation principle, that not only pries on the poor, but exacerbates the wealth inequality gap that everyone is complaining about today. Once the door is open to artificially differentiate the two, many other immoral things become acceptable. We've seen it time and time again.
We don't deny the time value of money, we jus say that use money in a moral way to extract value over time, by taking appropriate risk in a manner that is not exploitative.
> use money in a moral way to extract value over time, by taking appropriate risk in a manner that is not exploitative
I've been reading on islamic banking recently, and I have to say that it appears one can arrive at a consistent philosophy and working economics with usury being prohibited. The world won't grind to a halt because capital is no longer entitled to gains by the virtue of purely existing, as opposed to being used productively. (Observe PoS vs PoW parallels, in the theme of this submission.)
You can lend money and earn a profit without interest, and you can pay for getting a credit without it being immoral. The trick is that both parties share both the gains and the risk, not just the lender being responsible for all the risk.
It's great you're reading up on it. I would however, exercise caution as to what falls under "Islamic banking". From spending quite a bit of time reading up on it, many present day "Islamic banking offerings" aren't Islamic. They're simply ways to dance around the issue. What I'm saying isn't something controversial, I've talked to people, including a well known scholar who confirmed that to me. When there is a lot of money involved, things can go bad, and corporations with the most money and potential to profit can end up getting their way. Like seriously, a usurious bank like HSBC can offer a traditional mortgage product and an "Islamic financing" product side by side? Give me a break.
Note however, that this does not affect Islam one bit. True and honest scholars will always call out such actions, and they have been.
That being said, yes, at the core, true Islamic finance is about true and proper risk sharing, and reward sharing. Want to open a business? Get someone, or a group of people to fund you. They put in the money and you put in the risk. If it succeeds, you both share the rewards, if it doesn't, you lost the time and effort, and they lost the money. This is a very straight forward example.
Under Islamic law, lending money is only to be done as a purely charitable act, as the lender cannot benefit from the loan - either monetarily or in a non-tangential manner even. The general ruling is as follows: any loan that brings a benefit to the lender is Riba (can be loosely translated as usury). Riba involves more than the usury or interest that are done today by banks, it also includes things like buying gold on credit (Riba), or exchanging silver for silver of non equal amounts (also Riba).
Technically if all electric space heaters were crypto miners as well then crytpo mining would be well distributed, resistant to attack and unprofitable to mine - win, win, win.
Edit: Looks like matheusmoreira below doesn’t understand a 500w electric heater and a 500w crypto miner produce the same amount of heat and use the same amount of electricity.
There have been a number of startups selling crypto-mining electric heaters, but they've all faced the same problems:
- They're much more expensive than normal heaters, and the returns on mining don't make it cost effective.
- If you've spent that much money on heaters/miners, you're going to want to max them out 24/7 before they become obsolete rather than just switch them on when its cold, which defeats the point.
- They'll also need to be upgraded every 6-12 months to keep up with the mining arms race, and no-one wants to have to replace their super-expensive heating system that often.
The chips can be less powerful, cheaper, and higher volume because the goal would be to put them in millions of heaters without increasing the base price too much. People buying them would be for heat, not mining. It could be advertised to save a few bucks on heating each month but nothing major.
A 500w crypto miner produces much less useful heat than even the cheapest and most primitive 500w heat pump. So no, crypto mining is always less efficient.
But imagine when you want to warm yourself up in a cold time, instead of plunging a simple heater in, you have to deal with a machine which might even need to connect to internet to work (if looking at current IoT devices is any indication). I don't like to deal with such a complexity, unless they make it so simple that I can gift a crypto heater to my suburban grandma and not worry about installing it for her.
I’m sure it would still generate heat still without doing anything other than plugging it in.. Stick a LTE chip in there as a fallback to mine for the company’s pool. Would probably make enough money to offset the cost.
More like Proof-Of-Waste, both of precious electricity, and of precious rare earth elements and other materials.
Not to mention how much precious time cryptocurrency shills waste, and dangerous greenhouse gasses they produce from all the hot air of their rancid breath, by droning on and on and on about cryptocurrency all the time, parroting all the lies they heard in youtube get-rich-quick pyramid scheme videos.
Another shill in this thread just mindlessly repeated the same old lie they parrot all the time:
>Crypto helps accelerate the growth, demand, and build-out of renewable energy.
That's like saying using more Cocaine helps you quit using Cocaine faster.
"Cocaine makes me feel like a new man. And he wants some too!"
In an unfortunate and unintended way, it's true...
And the absurd idea of using a crypto rig as a space heater has already been completely debunked in this thread. Go back and read it.
If it's such a great idea, then why doesn't everybody already have one or a hundred of them, huh?
matheusmoreira: Do you really believe in get-rich-quick schemes and perpetual motion devices and miracle cures, even when you can't seem to find any for sale that actually work? Then you must not believe in the free market, either. Is it easier to believe there's a huge well organized conspiracy suppressing these technologies, instead of simply the laws of physics and economics?
Go back and read astoor's comment again, which trixie_'s fancifully wishful reply simply doesn't refute. But of course you can't argue facts with a true believer.
I'm just gonna ignore the hateful parts of your post.
> More like Proof-Of-Waste, both of precious electricity, and of precious rare earth elements and other materials.
Is it really a waste if the heat produced is useful?
> idea of using a crypto rig as a space heater has already been completely debunked
Where? I've read detailed posts describing that it probably wouldn't be as efficient as other heat transfer methods. Doesn't mean it is "debunked". I'm convinced it could work in certain circumstances, such as availability of free energy in the form of solar power.
> If it's such a great idea, then why doesn't everybody already have one or a hundred of them, huh?
I don't know. I've been wondering for a while. That's why I started a discussion. Maybe the idea is too new or there aren't consumer products in the market that make it easy for people to do it.
Miners are already looking into new business models which could actually improve the financial viability of green energy production, possibly driving down energy prices, rather than driving them up: https://www.forbes.com/sites/christopherhelman/2021/08/02/gr...
Easy solution: Mining generates heat to keep you warm and cook your food. A peltier setup turns some of it into electricity to power stuff. #rocket #diamondhands /s
I’ve brought this up before and I was downvoted for it[0], but I don’t think I made my point clear enough last time.
People seemed to think I was questioning the soundness of the algorithm, but that’s not what concerns me. I was talking about the concept of bitcoin itself.
What I’m concerned with is what if the true point of this thing we have been led to call “bitcoin” is to destabilize countries. What if it’s a new type of nation-state attack, or virus, that we haven’t seen before. Something we don’t yet have a word for. Something that takes advantage of a country’s citizens’ greed while doing things like disrupting power grids and causing countries to be worse off than they would be without bitcoin.
It’s like finding food someone left on your doorstep and eating it without being worried someone is trying to poison you.
Most people that are supporters of bitcoin are driven by pure greed. What if someone has found a way to weaponize greed?
Sorry that I don't know how to present this more constructively, but you sound pretty tin-foil-hat-y. You argument seems to be just "I don't understand this thing, so doesn't that mean someone could have introduced it out of malice". As the replies from your previous comment stated, try reading about the block chain protocol. It's definitely easier to understand than the whole of our fiat currency system.
In my opinion, crypto is largely a ponzi scheme, so rest assured I'm not saying this out of love for bitcoin. But I also don't believe there's some master-mind illuminati behind the scenes orchestrating this intentionally. This is a 100% open and transparent protocol that people are supporting out of fear of existing societal power structure. If you have a good reason to suspect someone of manipulating crypto for some greater purpose, present your evidence and let us evaluate it. But vague paranoia about some puppet master's scheme sounds a bit like crying wolf to me.
We as a society just haven't gotten good at pricing in externalities (eg: carbon emissions) to consumer goods yet. If crypto miners were providing enough societal value to afford the excessive consumption of energy, then I think everyone would be praising crypto as the next industrial revolution -- improving quality of life for everyone! But instead, I think most people recognize it as siphoning value from many for the benefit of a fortunate few.
I have friends that joke that Crypto was introduced by alien lifeforms or time travelers as a way to burn our environment down before reaching Stage 2 of the Kardashev scale[0].
Human greed is too powerful for us to ignore the negative impacts and it is destined to destroy humanity. I work in a related space so I don't agree but it is interesting to think about.
I am not getting the sense that people, who talking about global warming, will really follow up with the actions, when it concerns their wallets or their quality of life. Look at the number of the private jets at the COP26. Look at number of Hummers that Arnold Schwarzenegger (whom I love btw!) owns. He talks climate change but drives a Hummer.
By the same token, people with money, progressive or otherwise, will continue to invest in crypto as it is the highest yielding asset on the market. Kazakhstan became the 2nd largest crypto miner, after the US. It looks like they are balancing the demand for the energy supply between crypto miners and the rest of their customers. This sounds like a very reasonable thing for them to do.
We will see more regulations concerning the crypto currency and I think it's a good thing for the market. The regulations will ensure continuous growth and mainstream acceptance of crypto.
Bitcoin mining incentivizes the plentiful production of cheap electricity. This will make it so that there are no such thing as power shortages in the future and push us towards a Type I civilization on the Kardashev scale.
Bitcoin mining reduces the risk for energy generation projects, because they no longer need to worry about who will purchase the extra capacity.
Bitcoin mining can act as a load-balancer for the grid – spin down some machines if there is high demand, spin up machines if there is low demand.
There are so many benefits. It is unfortunate that there is a serious lack of understanding on this website.
Breaking windows incentivizes the plentiful production of new windows. This will make it so that there is no such thing as window shortages in the future.
In a way, yes. If windows didn't break, that hurts profits of window-making companies, and makes them all go out of business, leaving people without jobs, etc. Once everyone has a Forever Window there will be no one to sell new windows to, and there's hardly much innovation left in the field of windows. Planned obsolescence is a thing.
Bitcoin mining uses up all of the efficiency gains from energy saving over the past decade, and more. Bitcoin incentivizes carbon production by keeping electricity demand artificially high, even dedicating entire coal power plants to a single mining location. Therefore, cryptocurrency has already guaranteed we will never have time to advance on the Kardashev scale.
That's preposterous, Bitcoin incentivizes production of whatever energy is cheapest. That does not necessarily mean fossil fuels, though it is often that those are cheaper.
Hydro is a perfect example. A sizeable percentage of all Bitcoin mining is done with cheap hydro.
Bitcoin will do the same for nuclear, making it cheap and plentiful.
How does Bitcoin incentivize cheap energy? It only incentivizes energy that has a marginal cost less than the Bitcoin it can produce. As long as human speculation outpaces finite resources, it makes economic sense to burn the most expensive, dijon fuels. This is true even if externalities are factored into energy prices, which they aren’t.
You think the current global financial system is energy efficient? How about the raw materials used by global militarizes financed by unending money printing? If you fast forward a couple decades, and Bitcoin becomes the global reserve currency, mining will be far more efficient than the amount of enormous military spending and middle-eastern oil production financed by fiat currencies and the petrodollar standard.
You people are advocating for shutting down one of the most important human advancements of all time – money that is directly linked to energy.
It is not efficient, I agree. But the cryptocurrencies should be of low priority right now, there are much more significant topics and problems, plus - how do you expect people to use cryptocurrencies if they won't even have any computers due to various shortages caused by the miners?
If you're honestly looking for the best solution to plentiful, on-demand, cheap electricity, energy storage via batteries is a much better solution. Why burn up excess energy from a wind farm, rather than storing it to be reused during peak periods?
You don't usually need to store energy for a significant period of time, just until the daily peak. Last I checked, the efficiency for charge + discharge was something like 70%, which, in any case, is much better than the 0% energy savings from using that energy to mine crypto.
However bad batteries are at storing energy long-term, I guarantee that bitcoin mining rigs are worse. It's hard for a battery to do worse than losing 100% of "stored" energy immediately to heat.
The general public doesn't have the best grasp on crypto to begin with. If it starts messing with their ability to go about their daily lives with consistently available electricity at inflated prices then mining in those impacted areas may die a quick political death. Or have their facilities burned down by mobs that need those fires to keep them warm.
The crypto hate here is ridiculous. Every thread about crypto is the dropbox thread x 10.
Unless you want to live in a dictatorship where the government dictates what is and isn’t a useful use of energy, the constant bitcoin electricity usage hysteria is a waste of everyone’s energy. :-)
You're not free to use the grid as you please. That's not how freedom works anywhere. The grid can decide to subsidize some uses, tax others, and forbid some.
Not only you can use the excess heat from the miners to heat your office you can also use adsorption chillers [0] to cool down your office using the heat.
Why not create incentives to mine crypto with solar?
Lower or eliminate any sort of capitol gains taxes on crypto mined with solar, make solar panels tax free for companies that mine crypto, and crypto would not only go up in value but the solar industry would also be supported.
Oh yeah. The Federal Reserve and the central banks need fiat.
Why do we want to subsidize a huge block of solar panel production going toward crypto mining? Not to mention the waste of computing resources that crypto burns through on a constant basis.
The core problem of crypto is that despite what its promotors seek in vain to prove, it provides little societal value, while requiring a constant flow of an enormous amount of resources. This doesn't change whether your GPU farm is connected to a coal plant or solar field.
Well, I didn't say it couldn't be subsidized for all. In fact that'd probably a great thing. Just applying a potential solution to one particular problem doesn't exclude it from being applied elsewhere.
Is Texas next? Given that several mining companies have set up or about to set up shop on Rockdale and Pyote. And this is a state that endured a major grid crisis early this year.
That'd be tough, they'd need to figure out the mental gymnastics with their muh freedom narratives, especially since this is something that'd be good for the environment which it seems they're adamantly against.
That doesn't really help if crypto is also consuming the renewable energy it "helps" build-out.
The problem isn't that the relative proportion of renewable energy is too low, but that the consumption of non-renewable energy is too high. It doesn't matter if renewables make up 10% or 90% if that number doesn't mean a large reduction in the consumption of fossile fuels.
I wonder if cryptominers in poorer countries speed up the buildout of more stable and robust electricity networks in the long run? I understand they sometimes stress it too much in the short run such as here and then the regulators have to take action but the interplay on a longer timescale would be interesting to see.
You could say the same about whether bridges to nowhere generate important economic robustness. The problem with this view is it ignores that such activity crowds out the ability to do something actually useful with the same resources, while also producing all the same externalities (both positive and negative).
This point hinges on the assumption that bitcoin itself doesn't provide any benefit to humanity.
If its a useless speculative asset with no purpose other than as a ponzi scheme then yes, all energy used towards it is a huge waste and needs to be eradicated immediately.
If it has the potential to allow people to save their wealth under unstable regimes, as a long term hedge against inflation, as away of getting people to save more instead of spending every penny they have before it depreciates, to cause real wages to rise again, to encourage actual economic productivity rather than continually investing fake printed currency into an endless series of economic bubbles producing significantly more environmental damage than anything that could occur as a result of bitcoin mining.... then it is not waste.
You're talking about the broken window fallacy. I don't think it's immediately clear that a more robust and stable electricity network wouldn't lead to additional economical and societal benefits thus making it a positive sum game?
I don't think it's immediately clear that cryptomining leads to a more robust and stable electricity network for the people it outcompetes on power. The evidence of Kazakhstan certainly doesn't point in that direction...
I don't know the answer of course otherwise I wouldn't have posed the question but I guess asking questions qualifies for getting downvoted to -3. Some of you are clearly sitting on all the answers but you're not sharing them with the rest of us.
We see the short term results, my question was directed at the long term. I don't think it really matters if it's crypto mining or aluminum melters or any other energy intensive industry, it just happens to be crypto mining in Kazakhstan.
It just seems plausible since higher energy usage correlates with BNP. (I know, I know tax havens are exceptions to that rule.) If mining sticks around then this may turn out well for Kazakhstan, from an economical perspective.
What I mean by outcompeting is that if rich cryptominers are pricing poor Kazakhs out of an electricity supply which was perfectly fine before, I don't see how that counts as a win for their robustness and stability of power supply.
And PoW crypto isn't like aluminium smelting. The value of aluminium smelting isn't in winning an arms race with other aluminium smelters based on how much power they consume, so if you bring more power plants online at a lower-than-average price, market logic doesn't dictate that competing aluminium smelters should immediately seek to buy all that capacity until they've bid the price up to the original level.
The whole "crypto creates demand for innovation in power supply" only makes sense if you believe people haven't been investing in innovation in power supply because there's been barely anybody that wants cheap electricity for the past century or so! That might be the case for [formerly] tiny niches affected by new use cases, like say, lithium batteries suitable for powering vehicles. It isn't the case for Kazakh ability to keep the lights on
> What I mean by outcompeting is that if rich cryptominers are pricing poor Kazakhs out of an electricity supply which was perfectly fine before, I don't see how that counts as a win for their robustness and stability of power supply.
The article doesn't mention any of that though. It says that the miners got cut off (rationed) because 3 coal plants were offline. The regulator is stepping in to make sure regular people and industries are prioritized.
> The whole "crypto creates demand for innovation in power supply" only makes sense if you believe people haven't been investing in innovation in power supply because there's been barely anybody that wants cheap electricity for the past century or so! That might be the case for [formerly] tiny niches affected by new use cases, like say, lithium batteries suitable for powering vehicles. It isn't the case for Kazakh ability to keep the lights on
Investments and innovation follow demand so now that demand has risen and assuming demand stays high, what should we expect will happen? This is not unique to crypto, it just happens to be the driving force here. Of course other industries can lead to similar outcomes. If you think this will not lead to innovation and investments, you are basically saying that cryptomining deviates from the norm and you would need to justify this claim.
> The article doesn't mention any of that though. It says that the miners got cut off (rationed) because 3 coal plants were offline. The regulator is stepping in to make sure regular people and industries are prioritized.
The regulator has stepped in to ration to avoid cryptominers competing with the Kazakh poor for the electricity that is left over. That sounds like the power supply is less robust to me.
(A quick google suggests the power companies are claiming the shutdowns were scheduled but the recent demand spikes weren't part of the plan...)
> Investments and innovation follow demand so now that demand has risen and assuming demand stays high, what should we expect will happen? This is not unique to crypto, it just happens to be the driving force here. Of course other industries can lead to similar outcomes. If you think this will not lead to innovation and investments, you are basically saying that cryptomining deviates from the norm and you would need to justify this claim.
I'm not sure why you're pretending I haven't already observed what's different about POW cryptomining (unlike other industries which tend to increase yields by consuming less energy per unit of output than the competition, miners seeking block rewards maximise yields by consuming more energy, which means they are highly incentivised to consume all increases in energy output at a given price) or indeed why you are claiming that the norm is for increase in demand to result in something becoming cheaper and more widely available (it invariably has the opposite effect in the short term, and usually in the long run too) in an attempt to shift the burden of proof onto me, but doesn't exactly create the impression that you are arguing in good faith.
You are making assumptions about what I write, if something is unclear simply ask and I will try to clarify my argument. I am not saying the norm for an increase in demand is to result in something becoming cheaper and more widely available. I am saying demand spurs investment and innovation. I am saying that this could have beneficial effects such as a more stable and robust electricity net as well as other societal benefits, since this is what we usually observe when investments are made and innovation happens. This is not unique to crypto mining, hence why expecting something else to happen would be outside the norm.
But the uncensorable aspect also allows money transfer between organizations that we do want to censor, like terrorists or those who prey on children. So even that supposed benefit is largely nullified.
Under your analogy we shouldn't regulate car exhausts before we regulate cargo ships. At any rate, article says 250k mining devices there so the electricity usage is likely more from mining but not orders of magnitude more, and even if it was it would suggest they are not banned because of how useful it is (arguably gaming is even less useful) but because of size. But sure compare to gaming + TVs then.
Residential rates are not typically subsidized, they are regulated and billed at cost plus. The only thing that can be called a subsidy is a delay in raising costs. When local utilities are required to supply at a fixed price and that fixed price is less then cost + fixed profit margin, then they are losing money. The remedy for this is to ask their regulators to change the fixed price to account for both the higher expected base rate and their losses during prior periods. The utility commissions which regulate them almost always grant such requests. In extreme cases, CA power crisis, this can bankrupt utilities but in simple shifts of the demand curve most utilities have great credit ratings and can borrow to cover opex during the shortfalls.
This is true in the US generally as well as some countries with already very low energy generation costs. For developing nations residential electricity is normally subsidized.
There being a price difference between business and residential does not imply a subsidy. It can simply cost more to distribute electricity to businesses, the time power is supplied may be different, and the nature of what is supplied may also be different. Commonly (in the US) businesses have larger supplies, three phase power, and lines and transformers may be buried or harder to access. Midday electricity is also more expensive typically and businesses use more electricity midday (which is why it is more expensive). Further, businesses may be charged real time rates while residential rates lag spikes in price or are averaged over time.
That said, Kazakhstan may subsidize their power, I don’t know.
Yup, I'm sure that every time we've let the market do its thing, nobody suffered. I don't really want to get into too much of what's very gross territory, but let's say that a long time ago a certain nation controlling another nation decided that the food from said controlled nation was economically most useful being sold somewhere else.
> a certain nation controlling another nation decided that the food from said controlled nation was economically most useful being sold somewhere else.
> The locals couldn't afford the "cost".
That sounds like one of the many soviet famines, which happened exactly because there wasn't an open and free market for said food.
Pollution (most electricity production is still coal-based), raising electricity prices for everybody else, contributing to an ongoing energy crisis (electricity is going to start being rationed in Kazakhstan).
I mean, as an authoritarian state whose elections are generally considered rigged they probably could let their peasants choose between darkness and food/heat to ensure wealthy foreigners continued to to use their country to print themselves money, but I'm not sure it would make sense to do so...
No. Role of government is to provide minimum standard of living for general population. A lot of people will freeze in Kaza, as basic necessities are a huge part of their monthly budget and price hike is too severe to handle.
"Let market sort itself" only works if government thinks about it in advance, have fair elections, low corruption, etc.
Cost of natural gas / coal / oil is going up significantly and is a huge problem for all of Europe (not just Eastern) at the moment. A lot of Eastern Europe will have rolling blackouts and need to buy power from Russia / Belarus. Kazakhstan is in the same boat in that regard. I would venture that they are probably still on the USSR power grid as well and can buy easily from Russia / Belarus.
Price controls on utilities in the US are extremely common and successful. There are good ways to implement price controls and there are bad ways. Also, there are just as many examples of bad outcomes when you treat markets which are inherently unfree (i.e utilites, where infrastructure is typically monopolized) as free markets.
Price controls are successful until they aren't. The US can subsidise an egregious amount of bad policies for a very long time I suspect, from agriculture to health, it's not really going to hurt as there are other parts of the diverse economy that can pay.
An better example would be Venezuela, with the largest oil reserves on Earth, they subsidised energy costs to an extreme extent and it was one of the things that drove them into the ground.
People seem to dislike my comment above, yet no one seems to be arguing for petrol to cost ten cents a litre. Why not subsidise fuel if doing such things has such a successful history in the United States?
Different markets have different dynamics, and therefore will react to economic interventions in different ways. Furthermore, the resulting effects of those interventions will have different impacts on consumers, depending on what the thing is. Any policy that is enacted will have multiple effects, and the determining factor in whether a policy will succeed or fail is whether those effects are acceptable.
For example, many EU countries have decided to enact policies that knowingly lead to high prices for motor vehicle petroleum, but this was decided to be acceptable because alternatives like public transportation exist, and are in many cases, preferable. Energy used to heat someone’s home is different in impact.
Venezuela’s economic issues are not a result of subsidies of petroleum for domestic use.
> Why not subsidise fuel if doing such things has such a successful history in the United States?
I think you mean history of generalized (applied to all products and services) price controls, especially in a planned economy. That definitely did not bring the hoped prosperity.
They seem to mean price controls for a limited number of essential goods and services, to ensure access to them for the least fortunate groups. Energy definitely seems to be part of this even in the most market-oriented societies.
One can look at cheap fossil fuels, and the unwillingness of Western governments to make them more expensive by integrating their negative pollution externalities into their consumer cost, as a sort of ad-hoc price control. Lots of social protests over living standards were triggered by increases in energy costs - the Gilets Jaunes in France for example.
A factory provides jobs to locals. A factory stimulates the economy by creating local economic activity (suppliers, logistics, construction, restaurants).
A crypto operation might provide a small fraction of everything above while also producing nothing of tangible value to society.
Dutch disease is a thing even when the economic value isn’t being frequent dismissed as a Ponzi-adjacent scam, precisely because of foreigners paying for stuff in one sector disproportionately to all the others.
I’m not an economist, so I doubt my understanding is either deep or broad enough to make a proper critique in Kazakhstan’s case.
If mining is profitable that means electricity is costing less than the proceeds of mining. If these miners are Kazakhstani, presumably they are spending the majority of these gains in-country, or are paying taxes on the proceeds. As such this should be a net gain for Kazakhstan, since I assume the majority of people buying the crypto the miners are generating are not in fact Kazakhstani.
This doesn't seem complicated tbh and I'm actually struggling to understand why you wouldn't get this if you generally understand net imports/exports.
I understand the imports and exports for goods that employ people create services and etc.
Coin mining doesn't fit / necessarily that pattern at all.
In the meantime they have power shortages so I'm not sure at all what you're thinking about here... your idea of cheap power is pretty meaningless when there's a shortage.
Imaging the hubris required to even suggest that an essential input to daily life should have its price affected by an almost completely useless financial hedge for the elites.
I assumed, based on my experiences as a power consumer, they meant increase the marginal price of electricity above some threshold. That's how electricity is priced everywhere I've lived (US). Maybe it's different on Kazakhstan, although I don't think it'd be hard to implement.
Thats the weird thing, the more you use, the cheaper it can be delivered to you, same with gas. It should be the other way around, the more you use, the more expensive it should get.
There is no capability to increase supply. See my other post - Eastern Europe is out of coal and nat gas. Belarus has excess energy from Nuclear, but is still triaging exports. People will go without power this winter if this isn't done.
Yup, the magic pixie fairy will manage to build out electricity producing capacity that takes years to decades to build in days, weeks or months at best.
Europe tried that, now they are trying to buy more gas from Russia. See Poland for an example.
The point of that real-time example? Wind and solar are great, but they take time and the infrastructure is not yet there. Nuclear is arguably cleaner and cheaper for the output in the long term. Of course, infrastructure for nuclear isn't there in Kazakhstan yet either.
Both solar and wind are simultaneously underperforming in Europe at the moment because of weather phenomena that reduce wind and increase cloud cover, plus of course winter. There is no solution outside of nuclear, coal, and nat gas. And Europe, save for France, doesn't have enough nuclear to go around.
So the power company should spend tens to hundreds of millions of dollars building out infrastructure for subsidized bitcoin mining? And that makes sense how?
As far as I can tell cryptocurrency's value comes from how much it costs to mine the currency. So that would just affect everyone who isn't mining currency since the miners just offset their costs by selling.
You got cause and effect flipped. Cryptocurrency's value determines how much money can be poured into mining it. If bitcoin is at $60k, the block reward is 6.25 BTC, and there's a block every 10 minutes, then the entire mining bitcoin mining system can only consume 6.25 * $60k = $375k worth of electricity every 10 minutes. If the cost of electricity doubles, all that would mean is that the system can consume half as much electricity.
But cryptocurrency can be mined anywhere, not just in Kazakhstan. If only Kazakhstan raises their electricity prices, then the price of the cryptocurrency will basically stay the same, but mining will naturally move elsewhere.
> Multiple currencies use proof-of-stake and still have value.
Are they Bitcoin valuable? Are they as valuable as proof of work? I think not.
> Price is determined by demand and supply.
So the supply is lower because it's harder to mine so the price goes up and because the price is going up demand is higher. It's kinda like diamonds. Pretty useless but because the big companies hoarde all the diamonds they keep the price high and because the price is high people put value in them.
In the developed world in particular, we're seeing the move away from fossil-fuel power. This is good but currently relatively expensive.
Crypto mining is starting to have very real impact on the ability of other people to live. It is adversely and disproportionately affecting poor people (who pay a greater share of their income for power).
And at best crypto provides extremely limited utility for society.
Crypto-mining apologists will point to figures that say "crypto-mining uses mostly renewable energy". What this actually means is that crypto-mining is focused on areas that have hydroelectric power because it's the cheapest, generally.
While you might say that's still good, it's starting to raise prices for other people. this has been an issue in towns on the Hudson Valley in New York, for example.
Even if you believe the overall impact of crypto-mining is small I guarantee you it's only a matter of time before politicians start using crypto-mining as a convenient whipping boy.