
A New York Power Plant Is Mining $50K Worth of Bitcoin a Day - okareaman
https://www.coindesk.com/a-new-york-power-plant-is-mining-50k-worth-of-bitcoin-a-day
======
Reason077
> _" 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.

~~~
gruez
Not any different than dumping massive amounts of cyanide into the environment
so we can get some shinny yellow rocks.

~~~
jrockway
Gold is quite useful industrially, however. Last I checked, you can't coat
wires with Bitcoin to make them less prone to oxidation.

~~~
Torwald
Bitcoin is also quite useful industrially, that is not the problem.

~~~
jrockway
The thing is, it's not.

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speedgoose
I think everyone involved in this project should be ashamed. Energy shouldn't
be wasted into bruteforcing sha1 checksums of lists of transactions, a hash of
a previous block to have a neat Merkle tree, and random data to find checksums
starting with enough zeros. This is so unnecessary when we have global warming
and much better things to do with our energy budget.

~~~
fermienrico
What if I told you that you can use this "useless" BTC to purchase carbon
offsets, invest in renewable energy (which otherwise would have no funding),
etc?

Sure, money has no value when you're stuck on an island, but a bow and arrow
does. Similarly, a bow and arrow has little value in Tokyo city and money
does. Money is the engine that drives motivation - it can be used to compel
others to do good things.

Also, people don't understand what Bitcoin mining in wholistic sense is.

Model A: Energy -> Factory (Assets) + Labor -> Revenue

Model B: Energy -> Mining hardware (Assets) -> Revenue

It is surprisingly the same (we can even argue that labor is involved in
building mining assets, GPUs don't grow naturally). You can argue that any
economic endeavor is a waste.

~~~
DagAgren
Not only is nobody using bitcoin for that, bitcoin is also a negative-sum
game, and no actual new wealth is created. If you were going to buy those
credits, you would get more if you cut bitcoin out of the equation entirely.

~~~
thebean11
That's assuming it never creates any utility, which might be a fair assessment
now but the same argument could have been made about many early stage
innovations

~~~
DagAgren
How many decades is it going to take for bitcoin to not be “early stage”?

~~~
thebean11
Maybe never, but just dismissing the technology as worse than useless seems a
bit irrational. If your position is that the entire crypto space is just
delusion, it's probably good to take a step back and consider that you are the
one that's missing something.

~~~
DagAgren
I am not actually doing any of those things, even though they would all be
fair to say.

I am saying that the economic system built around bitcoin is, by definition,
negative-sum. And there is nothing about the technology that can change that.

~~~
thebean11
Can you give an example of why an economy using bitcoin would be negative sum?
If I'm producing widgets and transacting in crypto, value (widgets) are
created, the transaction medium seems irrelevant to me.

I don't actually think switching exclusively to a deflationary currency is a
good idea, but I don't buy that it creates a situation where value can only be
destroyed..

~~~
DagAgren
The only input of wealth is people buying tokens on the market. The only
output is people selling tokens on the market. There is a constant drain of
this wealth from both market fees and from miners minting new coins and
cashing them out.

There is no wealth creation anywhere else in this system. There are only these
factors, and they are negative-sum, except for market operators and miners.

If you are producing widgets on the side, that is entirely unrelated to the
token market. You can do that with any currency, and it is entirely orthogonal
to the tokens. You are not creating wealth within that market, you are
creating it outside that market, and possibly transferring it into as a
separate step, to be siphoned off by market operators and miners.

~~~
thebean11
Maybe I misunderstood what you meant by "the economic system built around
bitcoin", I thought you meant "the economy if bitcoin were adopted would be
negative sum".

Now that I understand your point: how is this different from any currency?
Currencies are a medium of exchange, by definition they don't have intrinsic
value. The value is defined by what you can buy. They are simply a convenient
accounting system for value, not the source of value.

How does your argument not apply to every other currency?

~~~
DagAgren
Currencies do not exist in a vacuum, like bitcoin, it is an instrument of an
entire country's economy. There is wealth created inside that economy, unlike
bitcoin.

~~~
thebean11
Right that's exactly my point, you're critiquing bitcoin as an alternative to
the "economy" part, but that's not something it has ever claimed to be. It's
an alternative for the "currency" part.

~~~
DagAgren
Those are not two different things. They are one and the same, in a regular
currency.

Bitcoin implements only half of it, and pretends this is just as good. It is
not. It is just gambling.

~~~
thebean11
> Bitcoin implements only half of it

What does that mean? That the dollar implements the entirety of the economy?
No currency "creates value"

I understand what you mean by saying bitcoin is zero sum, but I'm asking for
an explanation of how that's any different (for example how is the dollar NOT
zero sum)? I don't think you've explained what, in your opinion, is the
differentiating characteristic here.

~~~
DagAgren
The dollar does not exist on its own. It is an integral part of the US
economy. The two can not be separated. The dollar represents, in some sense, a
unit of the US economy.

Bitcoin has nothing like this.

~~~
thebean11
Bitcoin could theoretically become an integral part of some economy (or a
smaller part of every economy). Then by your standards it would no longer have
a problem?

It seems like a catch 22 you're presenting. It's a bad currency because nobody
uses it, and nobody uses it because it's a bad currency. To me that's kind of
a circular argument, and the same argument could be made about any early-stage
network (the internet, facebook, etc.)

~~~
DagAgren
No, this can not be changed. It doesn't matter how many people use it or not.
It very deliberately, by design and implementation, does not represent
anything at all. This would not change even if an entire country used it
(putting aside that it is not technically capable of doing so).

~~~
thebean11
> This would not change even if an entire country used it (putting aside that
> it is not technically capable of doing so).

This is the point you need to expand on. When I asked what the difference
between bitcoin and the dollar is, you said the defining difference is that
the dollar is used by a country. So if that's not the difference what is?

If bitcoin was adopted, would it not also represent a unit of the economy?

Does your argument boil down to "it's not officially backed by country
therefor it cannot serve as a medium of exchange"? If so I ask you WHY that
prevents it from being a medium of exchange?

I really don't follow the "negative sum" argument. It seems like that applies
to every currency, so it's kind of an irrelevant point

~~~
DagAgren
It is not that it is USED by a country. It is that it is an INTEGRAL PART of
the country's economic policy. The country can, as part of managing its
economy, also manage the currency.

Bitcoin is not managed this way. It has rules set in stone it follows entirely
on its own, without external input. This means it exists in isolation,
unaffected by whatever economic activity takes place around it. This is
entirely unlike a national currency.

~~~
thebean11
> The country can, as part of managing its economy, also manage the currency.

You think a requirement for currency is that the country using it can manage
it? What about all the non-US countries that use the dollar? They absolutely
cannot manage their currency. What about in the past when the US and others
were on the gold standard? There are a million counterexamples.

And again, let me reiterate (because it seems we're drifting away from the
point here) that we were originally discussing whether bitcoin was "negative
sum". I'm telling you that if it has utility (like any other currency) there
is value being created.

> This means it exists in isolation, unaffected by whatever economic activity
> takes place around it.

I don't really know what that means, everything is subject to outside economic
forces.

~~~
DagAgren
They moved away from the gold standard for some pretty good reasons. And
countries don't use other currencies unless they are in a very bad position
and have no other choice. Bitcoin is gleefully copying all the bad features of
these kinds of systems, and not really any of the benefits.

And I have explained why it is negative sum. It is an exceedingly simple
system and easy to analyse. There is no value creation involved at any point.
Any value creation happens _outside_ of the bitcoin economy.

There are only three factors:

1\. People putting real money into markets. 2\. People taking real money out
of markets. 3\. Exchanges taking a cut of that real money.

Nothing else involves actual value.

The combination of 3 and the fact that miners are allowed to do 2 without
transferring any value in means that for the reason of the users, the sum is
negative.

------
fermienrico
Curious questions:

Are we converting increase in thermodynamic entropy with decrease in
information entropy (with some loss)?

What if we use bitcoins mined by renewable resources (for e.g. Hydroelectric
generator) to purchase carbon credits? What would the energy balance and
economics look like?

~~~
solotronics
Already this is happening in a roundabout way. Much of the bitcoin mining is
unused hydroelectric in China, they are using the excess power that is
basically free.

------
ilamont
Not just in the Finger Lakes. Various firms have set up shop in northern NY
near the St. Lawrence River to access cheap power. Two years ago, authorities
became concerned because of the impact on residential rates:

 _“[These] companies are using extraordinary amounts of electricity —
typically thousands of times more electricity than an average residential
customer would use. While such a significant amount of electricity usage might
go unnoticed in large metropolitan areas, the sheer amount of electricity
being used is leading to higher costs for customers in small communities
because of a limited supply of low-cost hydropower,” according to the New York
State Public Service Commission._

[https://www.northcountrynow.com/business/blockchain-
industri...](https://www.northcountrynow.com/business/blockchain-industries-
pulling-out-massena-nypa-moratorium-puts-coinmint-plans-jeopardy)

After NY state authorities set higher rates for crypto mining, one of the
local communities withdrew from the local power agency so it could set its own
rates, which has prompted at least one company (Coinmint) to announce plans to
relocate there. [https://northcountrynow.com/business/cryptocurrency-
mining-c...](https://northcountrynow.com/business/cryptocurrency-mining-
company-will-move-plattsburgh-operation-massena-winter-0268560)

------
beautifulfreak
_The server farm currently consumes 14 megawatts of the 106 megawatts of
Greenidge 's capacity. That's enough electricity to power well over 11,000
average U.S. homes._

~~~
beamatronic
It’s fascinating, such a machine, so much power, with no visible (tangible)
output. Other than heat.

~~~
BenjiWiebe
It's a 100% efficient 14MW electric heater.

------
dmos62
The opposite situation would be where we'd redirect excess nuclear energy (or
other energy that can't be throttled easily) to mining BTC. That would be
pretty OK in my opinion. Though I hope that future of crypto is more energy-
efficient consesus mechanisms. As far as redirecting excess energy goes, there
are surely better uses too.

------
RichardHeart
Imagine 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.

~~~
cmer
[https://thedailychain.com/the-rise-and-fall-of-hex-the-
quick...](https://thedailychain.com/the-rise-and-fall-of-hex-the-quickest-
scam-of-the-decade/)

~~~
RichardHeart
You probably want to delete that link lol. Check the facts.

------
kemonocode
HN is very Bitcoin and cryptocurrency in general-hostile so I'm not going to
debate about how bad it is or isn't for the environment or set up a strawman
with gold mining. However, I'll say this: in a world where Bitcoin did not
exist, I don't really think that power plant would have remained idle.

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jes5199
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!

------
MadSudaca
Reminder: not all cryptocurrencies are this wasteful. Don’t disregard cryptos
in general for the pitfalls of the first one.

~~~
jessaustin
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)

~~~
MadSudaca
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.

~~~
jessaustin
The first several reasons seem plausible; the last one does not. It isn't
clear why the cryptocurrency community would care about others' investments in
mining equipment. If I had made such investments, I would use bitcoin, but
that wouldn't force anyone else to use it.

~~~
MadSudaca
True, but you could use your money and influence to try and prevent the market
from moving to other, more efficient cryptocurrencies. Remember that BTC
started in 2009, significant efforts have been made to build infrastructure
around it. Many people got rich thanks to the increase in price. There’s a lot
of money and emotions invested, for material and philosophical reasons.

------
econcon
But if they use the heat to heat homes isn't this a good use?

~~~
speedgoose
It's better to use heat pumps.

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sam_lowry_
Wat a shame!

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mooneater
Waste

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idclip
The comments in this thread ...

Well for what its worth, i think its a bit weird theyre doing this - and hope
we get fusion power soon.

