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Bitcoin backlash as ‘miners’ stress power grids in Central Washington

seattletimes.com

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Re: Bitcoin backlash as ‘miners’ stress power grids in Central Washington

#21

Post by seunosewa »

tradedash wrote: post #3
Semirhage wrote: post #2

Those bargain rates are possible largely because the Basin’s five dams generate around six times what the region can use locally. Much of the surplus is exported, at premium prices, to outside buyers such as Puget Sound Energy, and those outside sales subsidize local rates. But if the utilities are selling more of their power to local Bitcoin miners, they’re exporting less power at those premium prices, which makes i…

Why is the solution to everything "pass a law"? there is an ocean of possible solutions to this problem yet people somehow always jump to "pass more laws" before other options are considered. I find that rather weird.

Also, unless there is a law compelling them to charge miners the same prices, a new law is not needed. The utility can just implement it as a price policy.

Re: Bitcoin backlash as ‘miners’ stress power grids in Central Washington

#23

Post by UncleEntity »

MichaelApproved wrote: post #12
Faaak wrote: post #4

Earlier quoted context omitted.

Solution 2: don't subsidize prices. Problem solved.

Prices aren't being outright subsidized. The other states who don't have the foresight of creating enough power for their own citizens have to pay premium prices to the states that properly planned infrastructure. The situation is being taken advantage of by miners who can exploit low rates that couldn't realistically be planned for when power production infrastructure was being created.

The other states did plan ahead by getting long-term contracts for power, probably makes more sense to buy excess hydro-power than building a coal fired plant locally.

Now they find they can't supply export power and local power because their crystal ball didn't predict there would be a power hungry technology moving in.

Re: Bitcoin backlash as ‘miners’ stress power grids in Central Washington

#24

Post by skybrian »

tradedash wrote: post #3
Semirhage wrote: post #2

Those bargain rates are possible largely because the Basin’s five dams generate around six times what the region can use locally. Much of the surplus is exported, at premium prices, to outside buyers such as Puget Sound Energy, and those outside sales subsidize local rates. But if the utilities are selling more of their power to local Bitcoin miners, they’re exporting less power at those premium prices, which makes i…

Why is the solution to everything "pass a law"? there is an ocean of possible solutions to this problem yet people somehow always jump to "pass more laws" before other options are considered. I find that rather weird.

This is like asking why the solution to bad software is to commit more code.

It's because the way to fix a bad law is to pass another law. Otherwise you're saying we should keep the bad laws we have and work around it some other way.

Sometimes fixing the symptoms actually is better, but it's not surprising when people suggest changing the code.

Re: Bitcoin backlash as ‘miners’ stress power grids in Central Washington

#25

Post by ldayley »

JamisonM wrote: post #10

Subsidising energy prices for local consumers based on export revenues is widely practiced but is bad policy. The utilities should charge market rates for consumption and cut local rate-payers a cheque annually using a scheme that encourages energy saving practices.

Crypro-miners are taking advantage of the same asymmetries that the FAANG data centers enjoy. They were built in those same areas of WA/OR for the same reasons. They just don’t use as much power as mining rigs...

Re: Bitcoin backlash as ‘miners’ stress power grids in Central Washington

#26

Post by tass »

testplzignore wrote: post #19

> But backers insist that a local mining sector, if allowed to grow, will attract other ancillary services, such as software development, and ultimately provide the Basin with some of the tech-fueled prosperity that Seattle has enjoyed. Wow. Any municipality who falls for this crock of shit would be crazy.

It sounds good to people who don’t understand how mining works.

Since this argument has been made however, they could make local prices contingent on number of jobs. If you consume x power employing less than y local employees, pay the export rate.

Re: Bitcoin backlash as ‘miners’ stress power grids in Central Washington

#27

Post by d0ugie »

tomhallett wrote: post #13
Semirhage wrote: post #2

Those bargain rates are possible largely because the Basin’s five dams generate around six times what the region can use locally. Much of the surplus is exported, at premium prices, to outside buyers such as Puget Sound Energy, and those outside sales subsidize local rates. But if the utilities are selling more of their power to local Bitcoin miners, they’re exporting less power at those premium prices, which makes i…

I was just wondering about this - are the miners being charged taxes on the revenues generated?

According to this Q&A from the IRS, yes, miners are on the hook: https://www.irs.gov/pub/irs-drop/n-14-21.pdf:

A-8: Yes, when a taxpayer successfully “mines” virtual currency, the fair market value of the virtual currency as of the date of receipt is includible in gross income. (...)

A-9: If a taxpayer’s “mining” of virtual currency constitutes a trade or business, and the “mining” activity is not undertaken by the taxpayer as an employee, the net earnings from self-employment (generally, gross income derived from carrying on a trade or business less allowable deductions) resulting from those activities constitute self-employment income and are subject to the self-employment tax.

Re: Bitcoin backlash as ‘miners’ stress power grids in Central Washington

#28

Post by stephengillie »

testplzignore wrote: post #19

> But backers insist that a local mining sector, if allowed to grow, will attract other ancillary services, such as software development, and ultimately provide the Basin with some of the tech-fueled prosperity that Seattle has enjoyed. Wow. Any municipality who falls for this crock of shit would be crazy.

Indeed, my first thought for how to exploit is already covered in the article:

> In other cases, utility crews responding to unusual spikes in power usage have found racks of remotely controlled servers whirring away in empty apartments.

House and apartment rental and sale prices are lower than the Seattle area as well. You could rent a 1 bedroom apartment as a "weekend getaway studio with attached server room".

One alternative that would drive their intentions is that Bitcoin miners must be Washington State businesses, registered in state and with offices in-state. There are work-arounds for this, but it's another hurdle for foreign groups to overcome.

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