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Texas paid bitcoin miner more than $31 million to cut energy usage during heat wave
(www.cbsnews.com)
this post was submitted on 08 Sep 2023
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Honestly, why allow them to mine on the grid at all until it is upgraded? It’s just a big wasteful use of energy that uses public resources but doesn’t benefit the public at all. It just prints money for the guys doing it.
Also, $31 million could go towards better infrastructure that could allow this in the future.
Logic has no power here! —- said in Gandalf’s voice.
Wait, wasn't that wormtongue
We’re both wrong, it was Saruman.
You are advancing towards TolkienBoomer
Sure, but I don't know how much that would matter. In the short-term, batteries might be a viable solution, but $31million would get you about a ~15MW storage system from my understanding, which is about 1 order of magnitude too small to be more than a rounding error and 2 orders of magnitude off from being a fix. Also, electric companies profit off of cryptominers (which theoretically could be used to improve the grid) and ERCOT sees them as a flexible demand that can be turned off in emergencies (at the cost of money).
Site I worked at was on the company's smaller end and we consumed around 10MW an hour.
That's 15MW for 4 hours. Typical period of tight conditions is probably more like 1 hour, so 4 hour capacity is overkill for what Texas has been going though this summer). You could get more capacity for a 2 hour period. I think Texas peak power demand was about 100GW (I think that excludes some parts of Texas that aren't part of the Texas grid at the East and West ends)
Fixing the power grid works be socialism or something...
“Mah freedoms!”
Because they are buying the power, which pays for grid upgrades. The grid won't be improved without demand, and miners provide a flexible, profitable demand for power.
ERCOT's incentives are a bit off, though. They should be offering power to miners at very low rates when they have excess supply available, then jacking up the rates to miners well beyond the point of profitability when they don't have it. Ideally, they would convince the miners to install their own solar and wind generation (and maybe pumped storage as well) and pay them more than they would earn mining to backfeed the grid during power shortages.
Paying miners not to use power is just fucking stupid.
It probably falls under a general policy where they compensate big industrial users if they shut down to save the grid, think like a factory shutting down for the day. It would make sense in those instances, but for crypto mining it's just wasteful.
That makes sense, but if that's the case, ERCOT needs to adjust its rates for that plan. They need to increase the cost of power and decrease the reward for discontinuing their use.
Miners should be pushed toward a plan with highly variable power costs. They should have the very lowest rates when power is plentiful, but the highest rates when it is scarce. They are ideal candidates for this kind of "demand shaping".
Yeah, a compensation plan should basically compensate a user for their fixed costs involved in shutting down (wages, etc), and not things like opportunity cost (the products you would've otherwise been able to produce and sell).
Thing is, you can't tailor different rates per customer, so a crypto miner is probably always going to be ahead, because they basically have no running costs besides electricity. The only other cost is basically the cost of acquiring the ASICs and having a security guard on site.
You certainly can establish different rate plans for your customers to choose from. You don't need a fixed cost per kWh. You could offer discounts for off-peak consumption, and surcharges for on-peak. You could establish reliability tiers, where you get a discount in exchange for being ready to shut down consumption when needed. The lower the tier you select, the cheaper your power, but the more you have to shut down.
Agreed. This is a good solution for the wasteful energy usage of the miners. I don’t see how they arrived at paying them not to use the grid. Does literally any private citizen get paid not to use large amounts of electricity?
Certain large industrial customers might get paid to voluntarily shed loads as part of a service level agreement, but those agreements should include rates structured to make mining unprofitable.
Was in the thread yesterday saying the same thing. What you describe is exactly what TVA does in essence.
Texas has a 'problem' that prevents them from being able to incentivize this well. At least from what I overheard during my stint at a mine. Texas's big draw are all of the abandoned oil wells. You can simply go purchase a plot of land with a capped well, uncap it and install a Natural Gas generator that captures and burns the NG often released when drilling for oil. This gives you a one time fee for the generator costs and then after that you are in the clear with 'free' (relatively, minus initial costs) energy. This isn't exclusive to Texas, but obviously it can be done at a higher rate in the state compared to others.
Because it’s Texas land of the free.
Individuals can do whatever they want and the costs are set appropriately. Mining bitcoin is more profitable than the cost of electricity. They can either jack the prices up for everyone, or pay miners not to mine. It’s cheaper to pay.
Is it cheaper to ban mining or improve infrastructure? Sure, but there is no societal good, only individual. Banning mining would be an “infringement on the right to make money”.
Texas.
Women might have something to say about "the rights of the individual" in Texas...
Yeah, well. A lot of Texans have a strong belief in who qualifies as an individual, and who may as well be property.
There is absolutely no reason why anyone should be allowed to waste energy on that pyramid scheme shit in the first place.
Bitcoin is not a pyramid scheme because nobody controls bitcoin.
FIAT is closer to a pyramid scheme than bitcoin. Do I like bitcoin? No, I prefer monero when it comes to crypto transactions because it actually serves a purpose, but it is the truth.
It basically is. Crypto itself has no inherit worth. You don’t actually own anything. It is purely speculative. If the value of crypto collapses today, there is nobody who will ever recoup any value.
Let’s contrast that with the stock market. Are a lot of people screwed as well? Yes. But the business has physical assets that can be sold or auctioned off to recoup something
Actually, yes, you DO own crypto. If you hold the private keys to your crypto, you OWN that crypto.
To own is to have something that you control. If you have the private keys and nobody has the seed phrase or the spend address to your wallet, literally no one can take it from you.
Everything you just said applies to any form of currency. Don't tell me you actually believe FIAT is backed by anything.
Stop. You're already fucking up there. Cryptocurrency as a concept is not meant to be a stock. Yes there are people who treat bitcoin and shitcoins as such, that doesn't make it a stock. That is the mistake that many people and so many others make on a daily basis. This is why I don't support shitcoins, the only currency you should support is one with a purpose, such as the many time aforementioned monero.
If the Japanese yen had the volatility that it could go from now to worthless to 3x it's current value in a week, would you not put money into it at the dip and cash out at the peak? Yet yen is not a stock, it is a currency. Currency is something you exchange for goods.
The word pyramid scheme does not apply to bitcoin, it applies to RUGPULLS, but nobody controls bitcoin.
Crypto is not backed by anything. The US dollar is backed by the credit of the US government. Crypto is not backed by anything.
That is literally nothing. It's worth what they say it is worth.
Bitcoin and monero is worth the efforts of the community to support it. Pretty much nothing backs FIAT, that is LITERALLY what fiat is, fiat is Latin for "let it be done".
You can argue that without FIAT currency, crypto has no value, but in reality that is not the case because they have their own value. That value is determined by the community as well as the difficulty and abundance of coins. It is literally more stable than real world cash, you just have to USE it as such. ACTUAL COINS, not shitcoins.
The US government has an entire country it could liquidate if it really had to. It just is not linked to gold. There is nothing to liquidate for bitcoin. It is pure speculation. It is simply not backed by any physical value - and never will be.
I simply cannot wrap my head around how you are still not understanding this.
What exactly do you think would happen if the government liquidated all of its assets? Police, military, tax offices, literally everything that it does to be able to extract money from the public?
The US dollar is not backed by anything. It only has value because a large body says it does. They mint more money when they want to, which means that they can always just pull more money out of their ass when they want to.
Bitcoin and other actual coins require you to actually put in work to acquire them. They are agnostic of any body, person or government. They are still assets at the end of the day, they are just not backed by a governing body, they are instead backed by a community.
It sure ain't looking good for fiat, almost seems like fiat is a tool for the government to conduct a pyramid scheme while actual coins have no one pulling the strings.
Police, military, tax offices are NOT assets that can be liquidated.
The US can cede high-value land, lease ports, etc. to back the US dollar with something physical. The US dollar is not backed by a metal, that much is true. However, it is backed by the entire US now.
Blockchain is essentially a huge, decentralized database (or ledger) that says who owns what. The big issue with crypto is you can manipulate who owns what if you own a majority of the coin available. The other big issue is that nobody accepts bitcoin. Therefore, people are using exchanges and getting absolutely fucked by malicious smart contracts.
You keep talking about the fall of fiat, but you fail to prove that crypto is a valid replacement
They already do the second thing, and answer this, what EXACTLY is on that high value land you're talking about?
This is a blatant lie. I don't know who told you that. The closest thing to what you are describing is a 51% attack in which you have +51% of the network hashrate, in which you try to insert an alternate blockchain because everyone will have to do confirmations on you. This allows them to:
block transactions
double spend coins
prevent the creation of new blocks
It does not allow them to steal crypto from confirmed transactions. At most, it will allow them to spend a coin somewhere and then yoink it to another address.
You may point your finger and be all like "See! You just admitted it right there, that's PROOF"
Nuh uh uh, not so fast buddy
If you are using a reputable coin, this is prohibitively expensive to perform, and the thing about this is, you get ONE SHOT to do this.
The thing that is comical about this, is that the government's mint has the exact issues you are describing right now.
And who's fault is that exactly? Besides, that's not even accurate to begin with. Some of the largest companies on earth accept bitcoin. Tesla for instance accepts bitcoin. Many smaller vendors accept multiple cryptocurrencies, hell, I've bought real world goods including food off of MoneroMarket.
Lol. Do you think I got my crypto from an exchange? Don't you think the idea of KYC defeats the entire concept of a CRYPTO currency? A currency based around cryptography? One that allows for privacy and anonymity on different levels based on which one you choose (which should always be monero or its forks)? Also, what do you mean smart contract? None of that shit matters if you transfer your coins to a wallet you own and get confirmations.
If you are buying crypto from robinhood, first off you're fucking retarded, but second off that's not an exchange, that's a stock broker who is using crypto (that they likely are not even holding) as a stock.
Capitalism. Socialism would allocate energy and eliminate BTC mining. Social Democrats would give people energy allowance for home use and increase the price by taking it. Pure capitalists say it's good.
All your downvotes are for using the words pyramid scheme. It's a lot of not great things, for sure, but it's not a pyramid scheme.
Because its Texas: the state run by idiots that refuse to connect to the rest of the american grid because if they did, theyd have to actually get everything to code eventually.
They also built much of the solar in one region instead of diversifying. So even when other places are under fire-weather watch from high winds, we can have low wind energy because of low winds where they're built...
So capitalism?
Err yew insineratin the free merkert is wrong?
Because normally they make a small profit on the miners. They just didn't expect prices to shoot up.
I am sure they will change their contracts to have contingency clauses for the future.