oh huh it’s really happening. I’ve been trying to work out the effects of this for a while - bitcoin will always be more profitable than curtailment, but supply and demand should push the cost of bitcoin down below most other uses of electricity... except in places where the generators are distant from other kinds of capital. But some of those bitcoins will probably go towards buying other kinds of equipment by the power company? (direct air capture to high value molecules, eventually, I hope.) If the cost of utility power gets inflated, more people will buy solar panels.... lowering demand? It’s complicated!
A New York Power Plant Is Mining $50K Worth of Bitcoin a Day
51–60 of 97 posts
Re: A New York Power Plant Is Mining $50K Worth of Bitcoin a Day
#52Earlier quoted context omitted.
That's not the same at all. You left out an important step in the first model: Energy -> Factory + Labor -> Goods and Services -> Revenue Goods and services improve the life of people, and we have deliberately organized our society in such a way that providing goods and services is incentivized with revenue. That you can also leech revenue for yourself by shuffling liquid assets around while providing no net benefit…
This is a really good counterpoint, thanks. What, if any, government interventions could be put in place to somehow add value to BTC mining? What are your thoughts of governments using a resource such as hydroelectric dam or wind power to mine BTC and using it to build infrastructure (Goods), healthcare (Service), etc.? It kind of sounds like trickle down economics though, I am afraid.
> What, if any, government interventions could be put in place to somehow add value to BTC mining?
Well, the typical answer to "what can government do about this thing that is bad for society, but not bad enough to ban outright" is "tax it", though as another poster pointed out offshoring limits the efficacy of this strategy.
I'm going to interpret your second question as "What are your thoughts of governments using a resource such as hydroelectric dam or wind power to mine BTC and using it to increase their budget?" since in general, money spent on Expense X doesn't remember whether it was generated from Assets Y or Z; money in the budget is money in the budget. That said, I suppose I'm not strictly opposed to the idea, though I'd be interested in an analysis of the returns you can get on those CPUs when you're optimizing for a community rather than an individual - for example, how much benefit does society get from putting all that CPU to work for something like folding@home?
Re: A New York Power Plant Is Mining $50K Worth of Bitcoin a Day
#53Earlier quoted context omitted.
Bitcoin hardly created the perverse incentive; pollution has always been an externalized cost in most parts of the world. We really need a carbon tax (or similar) so that pollution costs aren't externalized.
Unless buyers of the coins were charged based on the carbon footprint of the coins they bought, this would just cause mining to move to places where there was no carbon tax.
It would also reduce supply of locations, increasing the amount people would have to pay. Do this enough, and it would no longer be economically feasible.
Re: A New York Power Plant Is Mining $50K Worth of Bitcoin a Day
#54> "The plant used to only open at peak times in the summer and winter months; the new mining initiative means it now operates all year round." This is actually pretty sad. This isn't power that would otherwise be wasted: they are emitting more pollution and greenhouse gasses in order to mine Bitcoins. Bitcoin has created a perverse incentive to pollute here.
Yup. This is ultimately the problem with Bitcoin it requires the consumption of energy to produce currency. The only intrinsic value is the amount of energy wasted to mine the bitcoins.
I wouldn't even call it intrinsic value because it's not like you can convert bitcoins back into the energy used to produce them.
Re: A New York Power Plant Is Mining $50K Worth of Bitcoin a Day
#55Earlier quoted context omitted.
That's not true. There are people who are making a living of trading Bitcoin whose lives will deteriorate. Since Bitcoin only functions when it's hard, cutting the energy consumption means cutting the thing. And attempting to control things like this is a whack-a-mole expedition. If you'd like to account for the carbon externalities, then do so. Tax carbon emissions. Proxy by purchases of fossil fuels if you have to.…
Wouldn't the same be true of eliminating anything in society? If we all went to electric cars, those in the petro industry would suffer. After all, I don't hear anyone in the Bitcoin community decrying the bank jobs when they wax poetic about putting the banks out of business.
Oh no, we absolutely should allow for people to change. Few things in the world are Pareto-optimal and we should not restrict change to Pareto-optimal things alone.
But the comment I responded to said this:
> We could cut the energy consumption of bitcoin to zero and the quality of life of everyone would not change at all.
Now I'm not one to normally be pedantic, but if we actually treat this non-literally we're faced with an optimization problem: how much is it worth reducing the quality of life of these people to ensure that energy isn't "wasted"?
So either you take the statement as a rhetorical flourish, in which case it is an inadequate response that merely relies on emotive appeals. Or you take the statement as literal, in which case it is obviously true. I guessed at a path but perhaps I should have articulated both sides. As it turns out I guessed wrong and you can see from his response that it was just an optimization problem inadequately specified.
Re: A New York Power Plant Is Mining $50K Worth of Bitcoin a Day
#56Earlier quoted context omitted.
That's not true. There are people who are making a living of trading Bitcoin whose lives will deteriorate. Since Bitcoin only functions when it's hard, cutting the energy consumption means cutting the thing. And attempting to control things like this is a whack-a-mole expedition. If you'd like to account for the carbon externalities, then do so. Tax carbon emissions. Proxy by purchases of fossil fuels if you have to.…
The people living from Bitcoin are so few that they don't really matter. I'm sure many of them would find another well paid occupation shortly after and I wouldn't be sorry for the ones that would have to reduce the costs of their lifestyle. I do think social shaming is very powerful, but it must be used correctly. Shaming Bitcoin professionals is fine in my opinion.
I don't think it will be effective. Are you interested in laying a bet with some time-frame? You don't have to be, but I find that it clarifies my priors appropriately.
Re: A New York Power Plant Is Mining $50K Worth of Bitcoin a Day
#57But if they use the heat to heat homes isn't this a good use?
Re: A New York Power Plant Is Mining $50K Worth of Bitcoin a Day
#58But if they use the heat to heat homes isn't this a good use?
It's better to use heat pumps.
Re: A New York Power Plant Is Mining $50K Worth of Bitcoin a Day
#59Imagine how much pollution Bitcoin would create a day if it became 10x more valuable. Roughly 10x. This is because the cost to mine a resource trends towards the value of a resource. Disclaimer. I invented a cryptocurrency that pays stakers inflation instead of miners.
Re: A New York Power Plant Is Mining $50K Worth of Bitcoin a Day
#60Reminder: not all cryptocurrencies are this wasteful. Don’t disregard cryptos in general for the pitfalls of the first one.
Why can't the less "wasteful" currencies compete with bitcoin? (serious question; I've never owned it and though the crypto seems straightforward enough I don't feel I understand the market in general)
Several reasons. There have been to many scam projects so it’s hard for most people to separate wheat from shaft. Bitcoin is oldest and therefore the most accessible one, with more ways to buy it and trade it. Finally, there’s vested interests that help keep the status quo as it is. For example, miners who have invested capital in mining equipment and who wish to keep making a profit.