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I'm not arguing whether the use of electricity is compelling or not. I'm arguing that the unique energy demand characteristics of bitcoin mining allow it to su

by yrral 3y ago

I'm not arguing whether the use of electricity is compelling or not. I'm arguing that the unique energy demand characteristics of bitcoin mining allow it to support building renewable energy projects and balance electricity costs and thus it has effective positive contribution to the environment. Whether it's used to mine bitcoins or cool a house is irrelevant, except that the demand for cooling a house is location and time sensitive, whereas bitcoin mining is cost sensitive. This flexible consumption gives it unique properties that support deployment of renewables. Please explain what you mean by "false economy". Is the economy for skins in a game you don't care about "false" because you don't like that game?

woodruffw 3y ago
> except that the demand for cooling a house is location and time sensitive Not if someone paid me to do it. That's the point. If there was money in hauling ACs around the US and running them on the cheapest electricity the local market could provide, we'd have exactly the same false economy. (Besides: the GP points out that Bitcoin appears to be sufficiently profitable on NYC electricity prices, which are not cheap. They also appear to be sufficiently profitable on "retiring coal plant" prices[1], which undermines any kind of unique incentivization of renewals argument.) [1]: https://www.indystar.com/story/news/environment/2023/12/05/crypto-mine-comes-to-indiana-and-major-polluting-coal-plant-stays-open/70992299007/ https://www.indystar.com/story/news/environment/2023/12/05/c...
- ianai 3y ago
  I think the underlying argument also misses the “willingness to pay” on at least a couple parts of the transaction. Specifically assuming the grid provider is going to pay you to use their electricity. (Transmission is still costly and maybe turning off capacity is a better option.) Further, missing the core “willingness to pay” for btc or any other cryptocurrency. Gold worked as a currency as it was independently verifiable from either side of a transaction. Modern currencies work so long as they’re backed by credible assurances of their value. Ie passing off fakes is dangerous and they may be used as “legal tender.” (That term could itself be further defined via google.) crypto currencies seem to lack this functionality. (Not wanting to abide by any law outside core network mechanics is functionally close to establishing a new form of sovereignty. Only sovereignty doesn’t work like that.) Also note how hyperinflation is dangerous to the assurance of value of a currency. Similarly, any form of instability could shake those assurances. Modern currency is also almost trivially, embarrassingly parallel.
- ephbit 3y ago
  > Not if someone paid me to do it. That's the point. If there was money in hauling ACs around the US and running them on the cheapest electricity the local market could provide, we'd have exactly the same false economy. How is such a purely hypothetical scenario useful as an argument? It's like saying: "If nobody ever did physical harm to anybody, we could get rid of some part of law enforcement." Not useful because it's simply not the case and very likely never will be. > They also appear to be sufficiently profitable on "retiring coal plant" prices[1], which undermines any kind of unique incentivization of renewals argument. Bitcoin mining incentivizes any kind of generation that cannot be consumed by a more profitable process or use case. If the price of electricity on a mostly fossil powered grid is low enough, then Bitcoin mining will be profitable. Same goes for a mostly renewables powered grid. There are two ways, politics can handle this: A) Impose a high enough carbon tax on fossil generation. This will lead to higher electricity prices for the fossil grid, possibly making Bitcoin mining unprofitable. But it will also make other uses of electricity unviable. B) Regulate that Bitcoin mining is prohibited under certain conditions (location, grid generation mix, ...) B doesn't appear wise to me. Since it's highly subjective what kind of energy/electricity use one deems useful/legitimate. I personally find the use of a > 100 horsepower private car or a private jet totally illegitimate and would welcome regulation that drastically hinders these absurd uses of energy.
lostlogin 3y ago
Would you say that bitcoin mining is good for the environment?
- alchemist1e9 3y ago
  Bitcoin mining is not just an economic activity but a catalyst for innovation in renewable energy. By inherently seeking the most cost-effective power sources to maximize profitability, Bitcoin miners are driving the demand for, and thus the development of, cheap, renewable energy worldwide. This process aligns perfectly with the goal of expanding humanity’s energy supply, a necessity for continued growth and technological advancement. The decentralized, uncensored nature of Bitcoin provides invaluable financial infrastructure on a global scale, while simultaneously incentivizing the energy sector towards efficiency and sustainability. Viewing Bitcoin mining’s energy consumption as a problem overlooks the broader benefit: it acts as a buffer in energy markets, ensuring there’s always an incentive to increase supply and reduce costs. Criticisms focusing on environmental impacts should address the real issue—regulating harmful energy sources—not curbing the innovative push for more and cheaper energy that Bitcoin mining embodies. Condemning Bitcoin’s energy use echoes failed collectivist approaches, ignoring the potential for positive, market-driven environmental and economic outcomes.
  - tsimionescu 3y ago
    There is a finite amount of energy though, so even if it would be optimal to have infinite supply, we can't. And even if that weren't the case, your argument still makes no sense. Every watt that Bitcoin mining incentivizes is then consumed on Bitcoin mining, it's a zero sum game. It's like building heaters in the desert: if you're willing to spend money for 1GW of electricity to run your heater, someone will build a 1GW plant for you. Now there is nominally one more 1GW plant in the world, but there is 0 extra available power, you're using up all of it to heat the desert.
    - alchemist1e9 3y ago
      Your argument reflects a fundamental misunderstanding of both energy markets and the role of Bitcoin in the modern economy. Asserting there’s a ‘finite’ amount of energy oversimplifies the issue and ignores the capacity for human ingenuity to tap into ever-more efficient and renewable energy sources. The notion of energy being a zero-sum game is a defeatist and static view that hampers progress. Bitcoin mining, far from the wasteful ‘heating the desert’ analogy you propose, incentivizes the development of excess energy infrastructure that can be redirected or scaled based on demand fluctuations, acting as a catalyst for innovation in energy production and management. Moreover, your argument smacks of a dangerous ‘divide the cake’ mentality, suggesting we should cap our aspirations and limit access to energy and technological advancement to maintain a status quo. Should we tell emerging economies that they must forego the benefits of modern technology because we’ve decided there’s simply no more room for energy growth? That’s not only patronizing but inherently regressive. The beauty of Bitcoin and its underlying energy consumption is that it encourages the search for more efficient, cost-effective, and often greener energy solutions. This is not about wasting resources; it’s about driving forward a future where energy is more abundant, accessible, and sustainable for all. To stifle this under the guise of protecting resources is to deny the very essence of human progress and innovation.

by yrral 3y ago

woodruffw 3y ago

> except that the demand for cooling a house is location and time sensitive Not if someone paid me to do it. That's the point. If there was money in hauling ACs around the US and running them on the cheapest electricity the local market could provide, we'd have exactly the same false economy. (Besides: the GP points out that Bitcoin appears to be sufficiently profitable on NYC electricity prices, which are not cheap. They also appear to be sufficiently profitable on "retiring coal plant" prices[1], which undermines any kind of unique incentivization of renewals argument.) [1]: https://www.indystar.com/story/news/environment/2023/12/05/crypto-mine-comes-to-indiana-and-major-polluting-coal-plant-stays-open/70992299007/ https://www.indystar.com/story/news/environment/2023/12/05/c...

ianai 3y ago
I think the underlying argument also misses the “willingness to pay” on at least a couple parts of the transaction. Specifically assuming the grid provider is going to pay you to use their electricity. (Transmission is still costly and maybe turning off capacity is a better option.) Further, missing the core “willingness to pay” for btc or any other cryptocurrency. Gold worked as a currency as it was independently verifiable from either side of a transaction. Modern currencies work so long as they’re backed by credible assurances of their value. Ie passing off fakes is dangerous and they may be used as “legal tender.” (That term could itself be further defined via google.) crypto currencies seem to lack this functionality. (Not wanting to abide by any law outside core network mechanics is functionally close to establishing a new form of sovereignty. Only sovereignty doesn’t work like that.) Also note how hyperinflation is dangerous to the assurance of value of a currency. Similarly, any form of instability could shake those assurances. Modern currency is also almost trivially, embarrassingly parallel.
ephbit 3y ago
> Not if someone paid me to do it. That's the point. If there was money in hauling ACs around the US and running them on the cheapest electricity the local market could provide, we'd have exactly the same false economy. How is such a purely hypothetical scenario useful as an argument? It's like saying: "If nobody ever did physical harm to anybody, we could get rid of some part of law enforcement." Not useful because it's simply not the case and very likely never will be. > They also appear to be sufficiently profitable on "retiring coal plant" prices[1], which undermines any kind of unique incentivization of renewals argument. Bitcoin mining incentivizes any kind of generation that cannot be consumed by a more profitable process or use case. If the price of electricity on a mostly fossil powered grid is low enough, then Bitcoin mining will be profitable. Same goes for a mostly renewables powered grid. There are two ways, politics can handle this: A) Impose a high enough carbon tax on fossil generation. This will lead to higher electricity prices for the fossil grid, possibly making Bitcoin mining unprofitable. But it will also make other uses of electricity unviable. B) Regulate that Bitcoin mining is prohibited under certain conditions (location, grid generation mix, ...) B doesn't appear wise to me. Since it's highly subjective what kind of energy/electricity use one deems useful/legitimate. I personally find the use of a > 100 horsepower private car or a private jet totally illegitimate and would welcome regulation that drastically hinders these absurd uses of energy.

lostlogin 3y ago

Would you say that bitcoin mining is good for the environment?

alchemist1e9 3y ago
Bitcoin mining is not just an economic activity but a catalyst for innovation in renewable energy. By inherently seeking the most cost-effective power sources to maximize profitability, Bitcoin miners are driving the demand for, and thus the development of, cheap, renewable energy worldwide. This process aligns perfectly with the goal of expanding humanity’s energy supply, a necessity for continued growth and technological advancement. The decentralized, uncensored nature of Bitcoin provides invaluable financial infrastructure on a global scale, while simultaneously incentivizing the energy sector towards efficiency and sustainability. Viewing Bitcoin mining’s energy consumption as a problem overlooks the broader benefit: it acts as a buffer in energy markets, ensuring there’s always an incentive to increase supply and reduce costs. Criticisms focusing on environmental impacts should address the real issue—regulating harmful energy sources—not curbing the innovative push for more and cheaper energy that Bitcoin mining embodies. Condemning Bitcoin’s energy use echoes failed collectivist approaches, ignoring the potential for positive, market-driven environmental and economic outcomes.
- tsimionescu 3y ago
  There is a finite amount of energy though, so even if it would be optimal to have infinite supply, we can't. And even if that weren't the case, your argument still makes no sense. Every watt that Bitcoin mining incentivizes is then consumed on Bitcoin mining, it's a zero sum game. It's like building heaters in the desert: if you're willing to spend money for 1GW of electricity to run your heater, someone will build a 1GW plant for you. Now there is nominally one more 1GW plant in the world, but there is 0 extra available power, you're using up all of it to heat the desert.
  - alchemist1e9 3y ago
    Your argument reflects a fundamental misunderstanding of both energy markets and the role of Bitcoin in the modern economy. Asserting there’s a ‘finite’ amount of energy oversimplifies the issue and ignores the capacity for human ingenuity to tap into ever-more efficient and renewable energy sources. The notion of energy being a zero-sum game is a defeatist and static view that hampers progress. Bitcoin mining, far from the wasteful ‘heating the desert’ analogy you propose, incentivizes the development of excess energy infrastructure that can be redirected or scaled based on demand fluctuations, acting as a catalyst for innovation in energy production and management. Moreover, your argument smacks of a dangerous ‘divide the cake’ mentality, suggesting we should cap our aspirations and limit access to energy and technological advancement to maintain a status quo. Should we tell emerging economies that they must forego the benefits of modern technology because we’ve decided there’s simply no more room for energy growth? That’s not only patronizing but inherently regressive. The beauty of Bitcoin and its underlying energy consumption is that it encourages the search for more efficient, cost-effective, and often greener energy solutions. This is not about wasting resources; it’s about driving forward a future where energy is more abundant, accessible, and sustainable for all. To stifle this under the guise of protecting resources is to deny the very essence of human progress and innovation.