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What Happens When Bitcoin Miners Take Over Your Town (politico.com)
124 points by tuna-piano on March 9, 2018 | hide | past | favorite | 129 comments



for comparison, even the high-end estimates of bitcoin’s total current power consumption are still less than 6 percent of the power consumed by the world’s banking sector.

Indeed, congratulations Bitcoin. You are able to process 2.3 transactions per second using only 6 percent of the power of the entire worldwide banking sector!

   * VISA: 2,000 transactions per second

   * ACH: 800 transactions per second

   * MasterCard: 3,000 transactions per second (?)

   * NYSE: Who even knows?

   * Etc...


> NYSE: Who even knows?

Semi-wild guess, based on [1] indicating yesterday's volume was 3.1bn, and knowing that trading volume on exchanges typically has big spikes near the open and close, they are probably able to comfortably handle upwards of a quarter million transactions per second.

Also worth noting that the world's banking sector does a lot more than just processing transactions.

[1]: http://www.wsj.com/mdc/public/page/2_3021-tradingdiary2.html


Not to mention that the banking sector is providing many millions of jobs.


thats because they provide services beyond processing transactions.


That's the point: more services, more jobs are all part of the quoted energy consumption.


FYI a major global bank will typically do 2-4 billion transactions per day.


Throw in lightning and all of a sudden bitcoin can handle millions of transactions per second using only 6% of the power consumed by the world's banking sector. Not too shabby.


I still find lightning incredibly ironic. To me, it looks like:

   * Gold =~ Bitcoin (2009)

   * Gold Standard =~ Lightning Network (2018)

   * Fiat Currency =~ (???)


> * Gold Standard =~ Lightning Network (2018)

the crucial difference is that nothing is held in reserve. ie. you don't have to trust that the bank is going to run away with your deposits.


Savings and loan banking, and the risks associated with it, is a separate thing from the basis of the currency. If Bitcoin-as-a-currency ever develops to the point that you can have a bitcoin-denominated savings account that earns interest, your bitcoin-denominated assets that you place into such an account will be just as susceptible to bank insolvency as any other kind of money you can deposit in a bank.

That, and, I think you have the analogy backwards. It's not that nothing is held in reserve - that would be Tether ;) - it's that everything is held in reserve.


Fiat currency would probably be something like Fiat = Cardano (2019) or one of the other proof of stake non mining coins. (Or Credits tokens - buy those! I'm long them.)


Am I missing something, or is it inevitable that bitcoin mining will lose profitability again, possibly very soon?

The problem is anecdotally outlined in the article. People are willing to mine bitcoin at a loss if need be and that makes mining rough for everybody because of the increased difficulty.

The problem is it's too easy to mine bitcoin. As the article points out, all you really need is somebody to keep an eye on the servers. People will push it to the edge, at which point, a tragedy of the commons will ruin it for everybody.

The only hope is for bitcoin prices to increase exponentially for all of eternity.


It's kind of the way with all capital intensive industries - airlines, car and steel manufacturing and the like. People put in capital till the profits are gone.


Your uninformed opinion only serves to mislead others. You should at least have the courtesy to preface your post with a "I don't know anything about Bitcoin" to warn other readers.

Anyways: The mining difficulty is dynamic. If mining becomes unprofitable and miners stop mining the difficulty will adjust downwards making it easier to mine and hence profitable again.


I 100% understand that it is dynamic.

My point is that that is not how it will work out. As the article points out, people were still mining when bitcoin dropped to $200 even though it was unprofitable. Because they were still mining even though it was unprofitable, they kept the dynamic difficulty high enough that mining remained unprofitable. Why? Because they had the infrastructure and it is easy enough to keep on mining until you are completely bankrupt. You don't quit mining just to make it profitable again for somebody else, so you hope that you can outlast them. That is the tragedy of the commons and it seems inevitable as people spend more and more money on infrastructure investment.


Of course -- it's unreasonable to think that all miners would exit at the same time. Different miners have different margins. Miners exit when it's no longer profitable for them. I don't quite see what the problem is.


My point is, there will always be somebody willing to mine it unprofitably. The only reason that hasn't happened now is because the price has increased too quickly for capacity to keep up.


They literally started with "Am I missing something"


Who cares? Bitcoins power use is hardly linked to it's transaction rate.


Indeed, transaction rate at bitcoin's highest points has been very low. Power usage is strongly correlated to price, while price isn't correlated to... anything.


Price is correlated to power usage. There's an odd sort of feedback loop where a rising bitcoin price causes more mining which raises the price of bitcoin and so on exponentially.

You may ask why not just walk away and let bitcoin return to zero but there are a large number of people in the mining industry and similar with incentives to promote and prop it up.


I would imagine people who like to breathe clean air and drink clean water would care.


Only the people who pay little attention and wildly overestimate bitcoins impact on these things.

Besides, the "Who cares?" was mostly aimed at the irrelevant comparisons made by gascan.


Bitcoin mining is proportional to how many there are, it will suck up more power with more miners performing difficult hash operations by design. Bitcoin is a fucking blight on the planet.


The guy who probably designed it writes "its prolific resource consumption and poor computational scalability is buying something even more valuable: social scalability."

Not quite sure about that one myself. You can motivate a lot of people to do something social pretty well with fiat currency.


All I can think of while reading this story is... this must be what the Rapa Nui must have felt like as they cut down the last tree on Easter Island to erect even taller mo'ai (statues)

I always wondered how such a clearly talented and advanced civilization could paint itself into a corner. Now I guess I understand.


Someone said that's the solution to Fermi's paradox - every sufficiently advanced civilization eventually spends all its resources on cryptocurrency mining :)


Funny, but it actually contains a sliver of truth. There is a theory called ‘The Great filter’ that tries to explain the Fermi paradox. It basically posits there is some almost insurmountable barrier that must be vaulted for a species to become spacefaring. Whether that barrier is behind us (the evolution of intelligent life) or ahead of us (no idea what, avoiding interplanetary warfare possibly?) has not been conclusively theorized.


The Quintans in Stanislaw Lem's novel "Fiasco" were too busy mining cryptocurrency to make contact and communicate with.

https://en.wikipedia.org/wiki/Fiasco_(novel)


Or maybe generalize it to frivolous computing.



That same site has published a response from Jared Diamond: http://www.marklynas.org/2011/09/the-myths-of-easter-island-...

It seems far from established that the ecocide is a myth.


Thanks. Good rebuttal.


We are many orders of magnitude away from “the last tree”.

There’s plenty more energy available from the sun, and we should be happy that there’s a market encouraging us to get it.


What a sad, sorry state we as a species are in when energy is used for such purposes. Greed does know no bounds.


As opposed to: gold/silver/diamonds mining (greater energy and human cost), arms manufacturing (orders of magnitude larger industry), etc. Why single out bitcoin (which is actually offering a useful service that critically needs PoW to work)?


Clearly the parent doesn't believe Bitcoin to be a useful service. I agree with you that precious metal mining and arms manufacturing are also not useful services, except insofar as some precious metals are used to make useful things.

I think it's fair to say "Bitcoin is wasting energy" does not necessarily imply other useless things don't also waste energy given that this whole conversation and article are about Bitcoin.

The fact that huge sums of money, energy, and human time is also wasted on arms manufacturing doesn't make Bitcoin mining somehow a good thing.

Your kind of argument is called "Whataboutism": https://en.wikipedia.org/wiki/Whataboutism


The argument being challenged is a comparison -- "... is used for such purposes" that clearly make the point that this purpose is a bad one. That is, the argument is "this use of energy is worse than most others".

It is not specious to confront the argument head-on. If someone says "I am the strongest person in the world" and you say "what about that guy over there", you are not engaging in a useless rhetorical device, you are making a valid counterpoint to the original point.


Except that it's not a comparison, it's a statement about Bitcoin, not those other things, which is the key element that makes it whataboutism instead of a valid counterpoint.

Bitcoin mining is wasting energy.

Other potential uses of such wasted energy include not generating it in the first place.


And yet an argument such as this does serve a purpose. It draws attention to the larger follies we commit. It may even give a better perspective from which we might see a common cause for such behaviour.

Rather than shutting a conversation down with cries of "off topic" or "fallacy" (I'm addressing the crowd moreso than you in particular) maybe we should all be looking towards the question of why all of us have a propensity for wastefulness? Surely, some waste is necessary when figuring out new processes or keeping old ones up to date but is there a way we can reduce waste without reducing or putting limits on innovation?


Except the purpose of a "Whataboutism" type argument is to shut down the conversation.


I generally find 'Whataboutism' to be an incredibly annoying form of argument. Sometimes though there are useful arguments about priorities of the form: 'x is a problem but y is such a larger problem that spending time and energy on x instead of y is actually an additional problem'. Is there a useful strategy to help distinguish such an argument from 'Whataboutism' when constructing such an argument?

(Note: I don't think the grandparent's argument is of this form as there don't seem to be any obvious shared constrained resources which could be applied to reduce precious metal mining that are instead directed at reducing bitcoin mining ... I'm curious though if you have any suggestions for how to shift one's thinking when _trying_ to make an argument about priorities so as to help prevent oneself from making arguments that amount to whataboutism ...)


I can see how the OP visualizes mining as wasteful. But it's easy to forget how much energy is consumed by resistive electrical heating.

Using British Columbia as an example, which until recently had very cheap electricity relative to North America as a whole, for many years a huge number of apartments, condos and houses were built with resistive electrical heating as the default option.

Laws of thermodynamics say that if a hashing ASIC isn't doing physical work, it's producing a huge amount of waste heat. The problem is that waste heat is being vented into the atmosphere rather than being used to heat offices, homes and warehouses. I know there's a few startups that have tried to produce cryptocurrency-mining waste heat appliances that can be installed in decentralized locations. Not sure how successful they have been.

If the waste heat can be used from October to April to heat offices, homes and other things that consume vast amounts of electricity via resistive heating (swimming pools, etc), it would accomplish both the function of hashing and heating.


I could of course be wrong or ignorant, but I have yet to see a single application that isn't speculation, save a few that uses it as currency transfer but using centralized nodes, meaning they could just use any much cheaper sharded data storage.

I don't doubt theoretical applications, I'm just saying everything thus far has been hype and cluster"%#&s.


People need something to put money in. They work, they run a surplus. They need to keep it somewhere. You could keep your local currency or buy some other but hyperinflation is a thing and also plain inflation can eat your money in few decades. You could buy property but it can be bothersome to pick, buy, hold and sell. You may end up with a loss if you are unlucky or need money back quick. You could buy gold but it can be easily stolen.

People need gold but better. Bitcoin is just that assuming bitcoin network survives.


> You could buy gold but it can be easily stolen.

So can your bitcoin wallet, or you could forget your key or lose your hard copy.

> People need gold but better.

Debatable.

> Bitcoin is just that assuming bitcoin network survives.

No, you can fork bitcoin, or create a thousand slightly different blockchains, and you can replace it in the blink of an eye. However weird gold is, it is a finite resource with real world applications (albeit not unique for most of them).

And I'm sure you can buy a number of funds or stocks backed by gold, if that's your thing. But you also have thousands of other stocks and funds, and real estate, and micro financing, etc where your money can both work for you while also potentially benefiting the world. Bitcoin without any application is a pyramid scheme, by definition. You put money in, to take money out later when more people have entered the system.


> So can your bitcoin wallet, or you could forget your key or lose your hard copy.

You can also encrypt your wallet, put it in few public places on internet and not forget a key. And be completely safe. Gold is much harder to secure.

>> People need gold but better. > Debatable.

People always need better versions of things they already have.

> No, you can fork bitcoin, or create a thousand slightly different blockchains, and you can replace it in the blink of an eye.

It has already happened, didn't replace bitcoin.

> However weird gold is, it is a finite resource with real world applications (albeit not unique for most of them).

Real world applications of gold don't justify any significant fraction of its price. Most of the value comes from scarcity and durability, properties that bitcoin has. Again assuming bitcoin network doesn't die.

> But you also have thousands of other stocks and funds, and real estate, and micro financing, etc where your money can both work for you while also potentially benefiting the world.

When you buy bitcoin you also pass money around to people that need it more than you at the moment.


>meaning they could just use any much cheaper sharded data storage.

There are a plenty of regulatory reasons why this is simply not true. Cryptocurrencies may sound stupid from a technical point of view, but clearly they have a bunch of very real advantages over e.g. liberty reserve.

Edit: I guess I'll be waiting for Show HN: MongoDB based money laundering platform. :)


I would really like to upgrade my GPU, but currently it's impossible as the bitcoin miners have caused the prices to sky rocket into unobtainable pricing.


I had to buy mine direct from the manufacturer for MSRP for a new build.

Still cheaper than Newegg/Amazon/etc.


how did you do it?


Bought direct from EVGA. Check their websites, many of them offer them direct for sale. They may be out of stock so you'll have to do a notify.


to be more specific bitcoin mining is not driving up your GPU pricing (bitcoin has been uneconomical on GPUs for years, since the advent of dedicated purpose hashing ASICs), but it's ethereum mining and other cryptocurrencies that can still be mined on GPUs that are influencing the price.


I know! I was browsing for one and all the mid-range cards are out of stock, only low-end and super high-end are available. What a ridiculous situation.


What useful service? Scams as a service?


If it wasn't for all the speculation and grotesque scams surrounding it could actually be useful as a decentralized currency. But we can't have nice things.


This might be a learning moment. Without government, aka anarchy, society would quickly devolve into bitter, cruel chaos.


Long ago given up on cryptocurrency, at least as long as current technical problems exist. But that without government we'd devolve into "bitter, cruel chaos" is definitely not a lesson. That's "not even wrong" level stuff.


Alright, you want me and the majority of society to take cryptocurrency seriously? Find a way to disallow or at least police illicit uses of it. Until you do that, I refuse to even entertain the idea that it’s a valuable asset and certainly not currency.

This is not a technical challenge I’m making. This is a political demand.

You would also still have to prove it’s more efficient and has a smaller carbon and energy footprint than traditional currency.


Have we effectively disallowed or policed the illicit use of $100 bills for drugs, weapons, or other trade?

I agree with you that cryptocurrency is not currently particularly intrinsically useful, but I don't believe that "let everyone use it in a decentralized tamper-proof manner" fundamentally requires "and simultaneously restrict it from the following uses, which a subset of the global population deems undesirable".

(In that regard, it's similar to "regular" crypto. I don't mind that people I don't particularly like are also able to use crypto to secure their communications. It's essential to my use case that they not be able to intercept my comms, and I accept in return that I can't intercept their comms either.)


There are genuine attempts made to police those uses. In the case of USD, the US enjoys being the default global currency. That bad actors also use it is more of a side note alongside everyone using it.


What about cultures that didn't have centralized government like native Americans?


They had various forms of government, depending on which particular tribe you are thinking of. Many had a theocracy, and some, like the Iroquois were part of a federation.


Before blockchains, I wondered about how to prove something on the internet. I thought about an authority that could hash any piece of data and you could query it. For example if someone claimed someone tweeted "X", the authority website could show that the hash is really from that Twitter account and is the sentence "X", or disprove it.

I didn't really think about distributed cryptographic "proof" and the chaining so you can't delete B from A - B - C and chain up A - C, indeed the authority would just have to be trusted and be somehow tamper proof.

Blockchain would be interesting to record the sequence of events you want to make sure people can't change retroactively, making it distributed means it's ecologically disastrous though.


Before Blockchains, most people who cared about cryptography were well aware of Merkle Trees. They date back to 1979.

Yes, there's also the proof-of-work part. We had that in 1999 with Hashcash.

The only thing bitcoin brought to the table was moving proof-of-work from a trusted hardware module to a P2P network.


Easily moving money between countries. Not every country makes this as easy as it is in Europe.


There are a lot of ways to transfer money between countries and Bitcoin is one of the worst (sketchy exchanges, slow, huge spreads, etc). If you want easy try something like TransferWise.


Well, offering a service, anyway. We could have a long debate about "useful".


"which is actually offering a useful service that critically needs PoW to work"

That's hugely debatable.


Yes, those things are also bad. And entrenched and hard to stop.


This is happening north of the boarder as well, but not just with Hydro power. Because natural gas prices are so low ATM, you are starting to see long-term Power Purchase agreements for sites in Southern Alberta. I can't see any reasonable argument for putting more carbon in the atmosphere for such a speculative asset/business model.


> I can't see any reasonable argument for putting more carbon in the atmosphere for such a speculative asset/business model.

I can't see any reasonable argument for putting more carbon into the atmosphere for heating mcmansions, driving trucks as a passenger vehicles, or maintaining a perfect lawn, but other people seem to disagree.

The problem is that the cost of carbon release is too low. If we internalized the carbon externality with a carbon tax it would give people the pricing information they need to make good decisions.


Alberta has a carbon tax.


The most surprising thing in that article is that for a new mine to be profitable, it will require more power than an AWS data center. Like, how is that even possible?!? That's amazing!


Amazing in a really bad way. I can't wait for fake internet money being killed off.


There exists other means of achieving consensus in blockchains than the power eating monster that is proof-of-work [1]. For example, proof-of-stake [2].

We can have our fake internet money and be environmentally responsible too.

[1]: https://en.bitcoin.it/wiki/Proof_of_work

[2]: https://github.com/ethereum/wiki/wiki/Proof-of-Stake-FAQ


This is interesting. How would people acquire coins in the proof-of-stake model?


The more coins you lock into an investing wallet, the more likely the network is to choose you to mint a block.

In practice it's quite a bit more complex but that's the basic idea.


Same way as in a proof-of-work blockchain. Miners (validators) receive the transaction fees plus some number of coins per block that is included in the chain, but instead of anyone being able to mine a block (and thus requiring a very high difficulty), only nodes that have a large number of coins frozen (the stake) are allowed to publish new blocks.


Ok, so coin holders are allowed to validate transactions between other coin holders, and for that they get more coins.

But if I have no coins, I have to buy them from a coin holder with another form of money.

So this system would require the original issuer to be someone that you trust and have a reason to do business with in the first place right? So it's kind of like banks and central banks today?

I realize ICOs by startups are a thing but I kind of want to just ignore that whole phenomenon... I don't own any kind of coin and don't understand it well enough, but this seems to me to be a technology that will eventually be very useful.


You do need to trust the validators in a PoS scheme, but with PoW you also need to trust the majority of miners.


So, the rich get richer?


It's not that different our current economic model. You can choose between spending the cash you have now, or "locking it up" (i.e., buying bonds/equities) and receiving a dividend.

With PoW, it's still the case that the "rich get richer," because you have to be pretty wealthy in order to afford the equipment to mine any reasonable amount of coins.


Yeah, but this stuff is supposed to make things much better. If it's the same as our current system, I don't see much reason to change.


> How would people acquire coins in the proof-of-stake model

They usually sell them in an initial offering. Of the top 8 coins on coinmarketcap only 4 have mining. Ripple, NEO, Stellar and Cardano don't.


It would be nice to have readily available GPUs at a reasonable price again.


Serving web pages, static files, and DB transactions requires a trivial amount of processing power compared to cryptocurrencies. The per-square-foot power density of mining is 10x or more than that of a standard rack server.


The same number of bitcoins (well, on average) are made every day. A bigger mining rig just gets you a bigger slice of the same-size pie.


It's worth pointing out that compared to other "useless" products of us humans like diamonds etc. bitcoin is rather ok environment wise. Green electricity goes up and down and can't be stored so bitcoin is a good way to create some "value" as those guys in the article are doing.

On the value side, "trust" is one of the most expensive commodities on earth. More "trust" creates more opportunities for business. Think if you could not trust a $1 bill to be exchangeable for some product. I think if you look at crypto as a way to increase trust in whatever area, you can start to see the value. Think of it in terms of Nash equilibrium, like a prisoner dilemma where you can "trust" your prison mate and both get more value out of collaboration.


> Green electricity goes up and down and can't be stored so bitcoin is a good way to create some "value" as those guys in the article are doing.

If you think bitcoin miners shut down on low wind day and only use "excess" power you're delusional.


But does bitcoin create trust? It's a highly volatile currency. Maybe it's better than the Zimbabwean dollar, but it's not a foundation for the world economy.


At the moment of writing there is $394B worth of "trust" in the crypto coin markets. Before you say it's speculation, let me point out that speculation still operates on trust: the trust of exchanging coins on the market, the trust the blockchain would not lose their transactions, etc.


There is no dollar amount attached to bitcoin. The moment a fraction of the coins are being sold, the exchange rate will drop dramatically.

Not to mention that a vast portion of the coins are probably lost in forgotten wallets, while the rest is in the hands of the early investors who will never sell it to not drop their value.


As someone who mined bitcoin at home before, stories like this is the reason why I don't advocate for bitcoin. This is a slap in the face of a decentralized system.

When I stopped mining a few years ago, almost half of bitcoin's mining power was coming out of China.

I don't know how hardcore bitcoiners live with this contradiction to their ideals.


This is why I think Proof of Stake is destined to outcompete Proof of Work. The costs are drastically lower in both electricity and hardware; and in practice, PoW is basically PoS with extra steps.


Almost half of thr stuff you buy comes from China or somesuch. Why butcoin should be any different?


As much I empathize with the people in Eastern Washington this one is similar to any other stories out there like "This is what happens when X take over your town" and x can be Walmart, Amazon HQ, or any other big company.

Things like price increases follows as people start moving and most of the time smaller towns are not equipped to handle the influx.


Bitcoin mining has by no means "taken over" Wenatchee and East Wenatchee. If you go there and drive around what you'll see is ordinary businesses, fruit warehouses, huge numbers of fruit farms, etc. And then the datacenters which are in East Wenatchee and Quincy.

It's just a weird aberration of people setting up super cheap facilities for ASIC mining that need huge amounts of electricity, but very little network infrastructure. Compared to the Sabey and Vantage datacenters an Ethereum mine needs only a few dozen Mbps for a WAN link, at most.


What's your point? A problem's non-uniqueness doesn't make the problem boring or solved.


The more I read about it the more Bitcoin reminds me of the California gold rush.

Bitcoin's current price is based on pure speculation, it's useless as an actual currency at the moment. What happens to places like this when the value crashes?


Why do you think it's useless as a currency? I've noticed "We accept bitcoin" signs more and more frequently. I've also used it to pay friends who live abroad. I don't think you've actually ever used bitcoin but apparently you have plenty of opinions.


I've seen companies dropping support for it more and more frequently, too. Stripe, for example.


Wow, you named one. Congrats. I'm referring more to small businesses. To name a few I've seen: A bed and breakfast I stayed at in Tulum, a cellphone repair shop not far from my home, a small theater also near my home.

Bitcoin has better characteristics than the USD. If people continue to see that, it'll succeed. There's of course an element of speculation when buying bitcoin -- I'm hoping other people see value in a currency which can't be manipulated by governments, can't be confiscated, can't be censored, has a known supply, can transfer instantly anywhere in the world, and anyone can open an 'account' with.

To quote Julian Assange: "Bitcoin is the real Occupy Wallstreet".


Stripe is an entire payment network, which means many websites lost Bitcoin support when Stripe left. It's a bit more than just "one".

I think Steam dropping Bitcoin support is a particularly useful canary as well. Valve said that the usage they saw of Bitcoin was relatively high (a lot of people invested in Bitcoin like videogames, to no ones surprise), but the exchange volatility and increasingly slow transaction times got to be enough that Valve was more often than not losing too much money on purchases by the time Bitcoins were exchanged for USD.


Do you live in California? Cause that would explain things.


How can a currency function that can only process 200 transactions per minute globally? And if you think the lightning network is going to work, I have some snake oil to sell you


> ... Carlson suspected that many of these stalwarts were probably doing so irrationally ... others had found a way to making mining pay.

> ... separated these survivors from the quitters and the double-downers, Carlson concluded, was simply the price of electricity...knew that if he could find a place where the power wasn’t just cheap, but really cheap, he’d be able to mine bitcoin both profitably and on an industrial scale.

Is the electricity cost really that significant when compared with the amortized cost of the mining equipment itself?

Lo those many years ago that I looked into mining, it was marked by extreme risk. New ASIC designs would emerge that would obsolete the old ones. Retailers would have extremely long and unpredictable lead times for new equipment. You could bet on the wrong manufacturer and end up with no product or late product, which would arrive after your competition delivers a difficulty increase.

I would wager that this system finds equilibrium marked by optimism, such that everyone has at least a minimal net operating loss. But maybe if you get on the leading wave of ASIC production somehow you can stay ahead?


Bitmain is already at 10nm Bitcoin ASICs. That's the commercial state of the art right now. 7nm fabs are just starting to come on line.


The article barely touches on a strong solution to this problem: Charging (a lot) more for high marginal electricity use. The local power authority can extract most of the value of mining.


Seriously, this. They mention their wholesale rates to neighboring cities is so profitable it subsidizes the local rates.

Anywhere I’ve ever paid for power there’s a supply charge and a separate generation charge. TFA makes it sound like there’s no supply charge, only a generation charge. Well, no wonder they can’t afford to build out their grid?!

Their hydro generation is 3,000 megawatts (woah!). Add a supply charge of $0.01/kWh (possibly phased in after the first 500kWh/mo) and... problem solved? On 1,000 MW that’s $0.01 * 24 * 365 * 1,000,000 = $87 million!

I think I pay $0.15 / kW locally so we’re not even price gouging here.

Having excess electrical capacity in 2018 is a license to print money, this town is sitting on a gold mine with zero carbon emissions or ecological damage and they are complaining about it?


That is basically anti-net neutrality, but for energy, instead of information.

Why should I pay more if I use my laptop for mining crypto, instead of playing the latest AAA video game on the highest settings?


I believe the OP was saying power providers should charge slightly more for each cumulative kilowatt hour someone consumes. This way, the top 10% of consumers end up paying more per kW-hr than the median consumer.

The current situation has this reversed: the top consumers of power negotiate discounted rates. So while they use 1000 times more power than the average person, they only pay 70 times as much.


For some reason, it seems that lots of people find cryptocoin mining amoral. It's pretty unclear to me how they got there, but I can only guess that it's something like "free money" or a "get rich quick scheme." To think that I think is to discount the capital and operating expenses, to say nothing of the risk taken on.


To me, it's the fact that all this power, all these computing resources, are basically being thrown away. Nothing useful is done with the computational power. If it was doing something like folding proteins or otherwise using that computational power to better humanity, then it'd be different.


It's really not, though. It's just associated with something that "seems greedy". I could argue that "nothing useful is done with the computational power used for playing video games or watching and producing films." I could argue that, but I think that line of reasoning suffers the same way yours does. It requires a value judgment and you think that the cryptocoin eco system has no value.

Cryptocoins have tremendous value for remittances alone. We can argue whether it's optimal allocation of resources and I think that is a healthy debate. Mining is required for trustless, decentralized currencies with provably equitable distribution. But we could probably forfeit some of the latter and eliminate the proof-of-work entirely (in fact it's already been done). Another option is to make the proof-of-work of greater independent utility from the transaction itself (also has been done).


Because you're using more power.


I wonder why the price of electricity there doesn't go up? It's not like they can't find buyers for it.


Because miners would move to places where the electricity is cheap.

In theory you could always keep raising the price of electricity, because everybody needs to buy electricity to keep the lights on.

You can't have your cake and eat it too. You can't become a tax haven for international companies either, and then raise those taxes when you have some customers.


This doesn't explain why not.


Because long-term you'll end up with a situation, where your special profitable customers leave for greener pastures (those willing/able to pay higher fees) and your base customers can't or won't afford it.

Short-term they can make some money raises the prices, until supply-demand equilibrium is reached again. But then you shoot yourself in the foot for the long term.


But your special profitable customers aren't paying anyway.



ITT: “The vague notion of ideal resource allocation I’ve come up with after 15 seconds of thought is the correct one.”


One could probably intellectually power a small third world country, if one rerouted all the mental energy that went into deriding Bitcoin's energy consumption into something useful (like getting more people to click on ads, HFT, or random gridsearch for GPU deep learning on MNIST).


It sure as hell isn't, "That guy has more money, so give it to him."


This sucks. Poor people have trouble paying electricity bills. In come the bitcoin miners, who drive up the cost of electricity, causing the poor to fall behind on bills and potentially become homeless. All so they can drive a fancy Land Rover.

Fucking stupid. This gold rush needs to die.


If Bitcoin succeeds, it will consume 51% of the earth's energy supply. If you want to claim this is bad, you will need the support of some sort system of universal ethics.


Your argument tries to set a trap for anyone responding, by forcing a debate on moral relativism.

So, let me counter with this question: If we presuppose we can't label anything "bad" without settling that debate, then is murder "bad"?

If you think murder cannot be defined as "bad", then why have we outlawed it?


> Your argument tries to set a trap for anyone responding, by forcing a debate on moral relativism.

True.

> If you think murder cannot be defined as "bad", then why have we outlawed it?

The original comment has already been downvoted and is on its way to becoming invisible, so I see no point in having the debate.

[EDIT]

Or for that matter, I don't see the point of taking any unpopular position on HN.




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