[automatic6131]

In fact, it is precisely the reverse of that: it's not a buyer of last resort, it's an energy price FLOOR. Any energy that you could sell to a customer, must be sold above "y". And so it is with computer hardware - any top or near top wafer capacity item you may want to buy must be above "Y" (what a crypto miner would pay for it). And this is why we saw massive price hikes for consumer computer tech in the last two years.

And is this way - a price floor - and not the way you describe it, because of the economic incentives of miners. They have already paid for these captial intensive mining rigs, and to best turn a profit they must be running at all times. The marginal cost of mining is important, but given the capital costs (incl depreciation of hardware!) you cannot ignore it.

Basically, your explaination is a failure of first order thinking. To a first order approximation, only the marignal cost of mining matters and thus the scenario you describe is true. However, you must include the second and nth order effects of capex to truly match reality.

[barnbuilder]

The miners don't need to be running at all times. If the cost of power exceeds mining returns then they definitely should not be running -- they'd be losing money AND wearing out their equipment. There is a middle ground where mining returns exceed power costs but don't fully cover capital expenditures, but the miner doesn't have to operate during that time if they think they are better off making no revenue but avoiding the wear on their machines. The question is whether you think you will have a period of cheap power in the near future, and in this case miners can benefit from the cyclical and predictable nature of power demand in answering that for themselves.

One can easily imagine a scenario where miners run overnight when power is cheap, turn their machines off during the day when power is in high demand and expensive (and you'd either lose money by having them on, or you would make less than you would by conserving your hardware and optimizing its usage), and earn a profit overall (while leaving the power producer better off too by letting them sell power that would otherwise be wasted).

[automatic6131]

>wear on mining machines There is virtually no wear on mining machines from actual use. There is, but it's negligible compared the main cause of depreciation of mining machines: better hardware coming out every 2-4 years AND the reduction in mining reward rate[1]. A bitcoin mining rig is worth essentially 0 after 2 years due to this depreciation. Not failure from wear. This is also true for GPU miners.

Second, there are many better uses for cheap power - one could use it to store energy in a hypothetical future where we use lots of intermittent renewables. You could use it to produce highly energy intensive physical goods - aluminum, hydrogen gas, fertilizer. You could use it for intensive climate engineering with carbon capture.

Almost anything else you can think of would be better than running a proof-of-waste cryptocurrency network.

[1] https://paulbutler.org/2022/the-problem-with-bitcoin-miners/