[zMiller]

FWIW there's a lot of half baked arguments going around the space, so a few comments for anyone genuinely interested in evaluating facts:

- The usage of electricity in Bitcoin is a feature not a bug. It's designed to use the most democratic and ubiquitous commodity avalible. Any nation/individual can evaluate their electrical opportunity cost and at any point make the decision to dedicate resources to towards re-balancing the network without permission. This is not possible with proof of stake.

- We produce about 160,000 TWh of power, ~50,000 TWh is wasted due to inefficiencies. Bitcoin using 120 TWh (0.25% of wasted power)

- A lot of Power projects get scraped due to inconsistencies in demand. Random Ex: Texas power outages during summer peak AC usage. It's infeasible to spin up and spin down extra generators to meet spikes in demand. #Bitcoin fixes this by providing excess supply a discounted demand during normal hours that can be routed away during peak needs else where. Ditto for renewables.

- Bonus: SHA-256 did not get broken this week.

[jcranmer]

> It's designed to use the most democratic and ubiquitous commodity avalible.

Which is why Bitcoin mining is only feasible in the areas that have the lowest electricity rate?

> We produce about 160,000 TWh of power, ~50,000 TWh is wasted due to inefficiencies. Bitcoin using 120 TWh (0.25% of wasted power)

How much of those inefficiencies are caused by Bitcoin? My understanding is that a substantial fraction of that inefficiency is things like "there's power loss in running power from a power plant 100s of miles away" or "converting from AC to DC power induces power loss." In other words, Bitcoin isn't converting electrical waste into useful work, it's just creating more electrical waste on top of the power it directly uses.

> A lot of Power projects get scraped due to inconsistencies in demand. Random Ex: Texas power outages during summer peak AC usage. It's infeasible to spin up and spin down extra generators to meet spikes in demand. #Bitcoin fixes this by providing excess supply a discounted demand during normal hours that can be routed away during peak needs else where. Ditto for renewables.

Are you aware that the electrical grid already manages demand in large part by telling the smelters to stop smelting for a few hours? There's no need to invent new demand to manage existing demand.

[zMiller]

> Which is why Bitcoin mining is only feasible in the areas that have the lowest electricity rate?

Nope, not where Electricity is cheapest, but where it's opportunity cost is lowest. In developed nations with a stable currency this might be high, in others that don't have the privilege of printing the world's reserve to bail out bad decisions, different story. And that's what the market is reflecting.

>My understanding is that a substantial fraction of that inefficiency is things like "there's power loss in running power from a power plant 100s of miles away" or "converting from AC to DC power induces power loss

Precisely, most Bitcoin mines are remotely located right next to the power plants, partially for this reason.

> There's no need to invent new demand to manage existing demand.

No you need demand to bring excess supply.

[schoen]

The biggest trouble here is that pollution externalities of power generation are very commonly not priced into the cost of electricity, so generic incentives to consume energy also very commonly mean incentives to pollute more.

> Random Ex: Texas power outages during summer peak AC usage. It's infeasible to spin up and spin down extra generators to meet spikes in demand. #Bitcoin fixes this by providing excess supply a discounted demand during normal hours that can be routed away during peak needs else where. Ditto for renewables.

Could be, but are the price signals really in place to make this out work in practice in many places? How many electric utilities have so far succeeded in charging people more at all during peak demand times? (maybe other than electric customers they've identified as industrial)

Edit: To be clear, I agree that there is such a thing as surplus power generation and usefully smoothing out demand, I just don't agree that we're in a scenario where cryptocurrency mining is predominantly used or predominantly incentivized to be used that way.

[zMiller]

> The biggest trouble here is that pollution externalities of power generation are very commonly not priced into the cost of electricity, so generic incentives to consume energy also very commonly mean incentives to pollute more.

This is true and is a function of context and locale. That's the point. Opportunity cost.

[_Microft]

How low does the energy price have to be that someone could currently expect to profitably mine Bitcoin on commodity hardware? (I read "without permission" that one cannot expect to have specialized hardware available as import of mining rigs could be regulated).

[zMiller]

It's a question of opportunity cost of electricity, not absolute numbers:

- You live in a place where the "cost" of mining = Electricity + Amortized cost of mining rig.

- Someone else lives in a place where "cost" of mining = (Electricity + Amortized Blackmarket Rig Cost) - (5% Inflation per month - 30% reduction in remittance fee -etc..)

[chatbot2]

The solution for the excess supply issue is energy storage, not mining bitcoin. I've worked in clean energy for years, and no energy expert is advocating digital currency mining + increased energy production as a method for meeting demand peaks.

[zMiller]

- While storage is part of the infrastructure, it not the solution -> Not feasible for a large set of energy sources and often falls to the same pitfalls of bringing new power online (remoteness, capacity, etc..).

- Actually Bitcoin mining is being adopted by renewable providers as very good solution to offset intermittence and wasted excess.

- Further something like Natural gas flaring is something that cannot be stored but can largely routed through mining setups. Which is being adopted at scale.