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Bitcoin as a Battery

nickgrossman.xyz

41–50 of 319 posts

Re: Bitcoin as a Battery

#41
post #18

I don't buy the argument in the article. The purpose of a battery is to store energy to be used later and potentially elsewhere. There is no way to regain the energy that was turned into heat while mining bitcoins, so bitcoin is not a battery. The comparison with aluminum production is also quite weak, since aluminum has an intrinsic economic value, whereas cryptocurrencies don't. Most of the arguments given in the a…

The point is, why do you store energy at all.

It's not because you'll need it later. It's because you can sell it later.

If there's no way to monetize excess energy (because we lack storage), people won't invest into making excess energy. And since renewables produce a lot of excess energy it makes them less desirable than they should be.

Analogy to broken window fallacy is totally warranted. But please notice that what broken windows do is extend capacity of glaziers. And if windows are broken cyclically then at times when there's not much demand for window repair additional glazier capacity will be used in other ways like for building glass skyscrapers (I'm stretching analogy, I know).

Renewable energy is not a scarce resource, so it's unlike the glass from the fallacy. And work put into creating too much renewable energy is work well spent given horrible state of our power network and our over-reliance on polluting energy generation methods.

The fallacy in broken windows fallacy is that additional money earned by glazier will somehow benefit the economy, and that's not the case. What might possibly benefit the economy would be oversupply of glaziers, which could make some very beneficial enterprises economical.

It's like with education. We know education is of a huge value to society. But we don't have in the economy a good way to funnel more money into education, especially to the places where it's most needed.

If you figure out a way of pouring money into training new teachers and paying them, so you have oversupply of teachers on the surface of it you are wasting resources, but additional teacher capacity even if it's often underutilized or used to 'spin the wheels' will benefit society.

Economy is prone to getting stuck into local optima and sometimes you need countereconomical nudge to get out of it to be free to travel to better optimum. I hope crypto can be such nudge for renewable energy production by sort of filling the gap of lacking storage capacity technologies.

Re: Bitcoin as a Battery

#42

I'm so happy that other people start to notice this dynamic. Why are we not yet fully running on renewables? Why don't we have trillions of dollars pouring into solar panels and wind turbines and pumped storage hydroelectricity and battery storage? The answer is there's not enough demand for excess electricity to create and keep excess electricity. I read about new pumped storage hydroelectricity installation closed…

What about training ML models as another example? It requires a lot of energy as well (and I expect it to be more significant in the future), and the optimal power draw should depend on the price of energy. Of course it requires GPU/TPU pricing to change depending on clock speed, which is hard to sell to customers. So yeah, for now Bitcoin mining is a more scalable solution.

Re: Bitcoin as a Battery

#43
post #36
post #18

I don't buy the argument in the article. The purpose of a battery is to store energy to be used later and potentially elsewhere. There is no way to regain the energy that was turned into heat while mining bitcoins, so bitcoin is not a battery. The comparison with aluminum production is also quite weak, since aluminum has an intrinsic economic value, whereas cryptocurrencies don't. Most of the arguments given in the a…

How much of the energy used by a processor is dissipated as heat? If it's a significant amount, perhaps it could be recovered in some way?

It can be utilized for heating human occupied spaces. Humans need a lot of heating.

Re: Bitcoin as a Battery

#44
People claiming bitcoin is a battery understand nothing about batteries. It's just fake rethoric designed to greenwash it.

Batteries are batteries, fair enough.

Load shifting "are batteries" because you're not using the electricity now, but later. So it's equivalent to storing it now and using later. Fine

Aluminium smelting "are batteries" because you're shifting the location. It's like putting a battery in a ship, charging it then shipping it somewhere else (as long as it doesn't get stuck ;) )

Bitcoin mining is... ? You mined your coin now, using electricity, cool. Then to use it you need to spend more electricity. 812.74 kWh per transaction to be exact https://digiconomist.net/bitcoin-energy-consumption/

This is ridiculous. This is not a battery.

Re: Bitcoin as a Battery

#45
post #35

This seems like a pretty flawed idea and an attempt to justify the incredible amount of electricity required by bitcoin. If bitcoin was changed to require a fraction the amount of electricity all of these ideas would suddenly fall apart. Building renewable energy sources in the middle of nowhere to power a bitcoin farm is just completely nonsensical and does noting to help with the shift to renewables.

Bitcoin mining is good for the environment https://pomp.substack.com/p/bitcoin-mining-is-good-for-the-e...

I can't really follow the logic in this article – maybe I don't get it?

The article states that Bitcoin uses a lot of energy and as miners want to maximize profit, they want cheap energy. This is good for renewables as that is cheaper than other forms of energy generation.

Doesn't everyone want cheap energy, like factories or heavy industry? Are Bitcoin miners really more eager to push for clean energy than other industries?

The whole arguments sounds like "we need to use up more energy so there's more incentive to produce additional, clean energy".

Re: Bitcoin as a Battery

#46
post #35

This seems like a pretty flawed idea and an attempt to justify the incredible amount of electricity required by bitcoin. If bitcoin was changed to require a fraction the amount of electricity all of these ideas would suddenly fall apart. Building renewable energy sources in the middle of nowhere to power a bitcoin farm is just completely nonsensical and does noting to help with the shift to renewables.

Bitcoin mining is good for the environment https://pomp.substack.com/p/bitcoin-mining-is-good-for-the-e...

The post is making the free-market argument:

> In reality, this couldn’t be further from the truth. Bitcoin is actually one of the greatest financial incentives to transition the world to clean energy.

without bothering to explain why any one point they highlight would beget any one outcome claimed by the post. In fact, there are some backwards incentives that are missed. An example would be their claim with regards to Great American Mining: rather than using mining as an incentive to pay for capturing lost methane, what's to stop producers from diverting existing gas production towards mining right now, putting demand pressure on existing supplies and driving up gas production (and leaks, etc.) rather than just capturing and processing leaked gas?

There's nothing. There's no incentive for existing gas facilities to fix their leaks when they can just pipe their existing output into bitcoin, drive up demand for gas, and therefore justify more drilling (and more inevitable leaks that they won't have any incentive to fix).

> Bitcoin isn’t bad for the environment. In fact, Bitcoin is very, very good for the environment. The University of Cambridge reported at over 75% of miners use renewable energy and now there are solutions to turn methane emissions into mining as well.

This doesn't mean anything. Or worse, it means 25% of a phantom industry makes use of dirty power, So whatever Bitcoin imposes on the world in power usage (130 Terawatt-hours of energy - https://techcrunch.com/2021/03/21/the-debate-about-cryptocur...), 25% of that, or about 0.15% of global power production, leverages dirty fuels. If all mining ceased tomorrow, we'd benefit substantially from dirty power usage coming down and more clean energy supply being directed back into productive work.

Thanks for hearing my rant.

Re: Bitcoin as a Battery

#47
post #36

Earlier quoted context omitted.

How much of the energy used by a processor is dissipated as heat? If it's a significant amount, perhaps it could be recovered in some way?

It can be utilized for heating human occupied spaces. Humans need a lot of heating.

If you are going to use electricity to heat human occupied spaces, you should use a heatpump which has much better efficiency, above 100%.

Re: Bitcoin as a Battery

#48
post #35

This seems like a pretty flawed idea and an attempt to justify the incredible amount of electricity required by bitcoin. If bitcoin was changed to require a fraction the amount of electricity all of these ideas would suddenly fall apart. Building renewable energy sources in the middle of nowhere to power a bitcoin farm is just completely nonsensical and does noting to help with the shift to renewables.

Bitcoin mining is good for the environment https://pomp.substack.com/p/bitcoin-mining-is-good-for-the-e...

"Bitcoin isn’t bad for the environment. In fact, Bitcoin is very, very good for the environment."

wish I could downvote.

Re: Bitcoin as a Battery

#49
post #6

A bit nonsensical imho. A battery by definition has to be able to produce the same type of energy that was put into it. While correlating crypto with something random every week (Easter bunnies next Sunday?) can be marginally interesting, this instance makes no sense. We can't extract electricity from aluminum or Satoshis, we can buy it though, but that's outside of the battery scope.

Human organisations don't run on energy and resources. They run on money.

Crypto is a weird kind of battery, where you can put in energy, take out money, and when you need energy later, buy energy for that money.

Analogy doesn't make sense at all if you skip the money part.

Re: Bitcoin as a Battery

#50
post #27

The only way PoW crypto is superceded is if someone finally implements PoS. There is a lot of hope in ethereum "moving to" proof of stake, but I think a move will never happen. Miners will not allow it. It'll be a fork. Then, if it has to be forked why not start from scratch with something better? I imagine/hope many people are working on better crypto protocols at the moment.

Etherium has a grim trigger in to form of a future parabolic increase in difficulty that is perpetually delayed by a signed patch to prevent miners from being too conservative.
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