[ChancyChance]

An easier and more reliable way to make money is to sell it to neighboring countries that need energy. Like they had been doing. Seems to me a little corrupt birdie told them about BTC and their ruling class wanted in on another way to hide wealth. Like every other use of BTC

[HashBasher]

How is it easier to sell energy? Electricity is not digital, you need to build the wires, figure out the demand and fund the operations of the whole thing.

[acdha]

That’s already setup: they export something like ¾ of the electricity they produce to India. I suspect this is either trying to get higher rates or possibly challenges related to their seasonal hydropower issues – if India is building more capacity for the times when the water levels are too low, the long-term rates aren’t going to be going up.

[NBJack]

I also speculate they have gotten all they can out of the arrangement. Or it just isn't as economically lucrative as holding back some of that power as a speculative bet on the future.

[lordlimecat]

You need to do those things for a datacenter too.

[HashBasher]

You don't need to build wires that spans half your country! Just a big building, some transformers or whatever equipment is used to consume the energy from the stranded producer and a lot of miners, as much as you can power!

[Zetice]

That’s the rub; you can’t get the energy out of where it is. You can’t really use it for your country, you can’t sell it, it’s just kind of there, unused.

[zetazzed]

What do you mean you can't sell it? Bhutan exports 70% of their energy to India (https://www.sasec.asia/index.php?page=news&nid=1178&url=bhu-...). India needs lots of energy to do normal energy things that improve people's lives, like lighting and cooling homes and running irrigation systems.

[Zetice]

So my understanding is that this particular power plant is hard to connect to their grid. Such things tend to be true, for example Kazakstan’s mountainous coal deposits.

Lots of things could prevent the sale of some energy, though. Someone else mentioned the idea that their market is saturated.

[incomethax]

So I work in the energy sector, and you are correct. The method we use for pricing power at a grid level is "local marginal pricing" - this is a price that is based on the location, the demand for power, and the ability for us to get the power across constraints (that is across a power gradient). It is often uneconomical to transmit power great distances, and loss factors are not insignificant. Not sure about Bhutan's grid, or who they can interchange to, but there are frequently wind farms in TX that have to take a loss to generate power simply because they are forced to generate power, and there is no demand for power in the region, and the buses (power lines) are congested. Also stranded hydropower is common the world over - it's easy to generate that power but difficult to build grid and interconnects to transmit that power - the line losses would be too high. For other types of generators - typically nuclear, often times ramp times for them are in the months, so turning up and turning down power is often difficult which is why an application that is passive, droppable, and can withstand latency is ideal to consume such power.

[arcticbull]

> ... so turning up and turning down power is often difficult which is why an application that is passive, droppable, and can withstand latency is ideal to consume such power.

Sure, so investing in smart load management is an optimal solution. With EVs and chargers coming online that's a huge load you can send a signal to in order to adjust demand. A country like Bhutan is very well suited to this kind of approach.

Or change the energy mix so you have a balance of baseload and variable load generation.

Or do something with it that isn't guessing random numbers on machines 99.7% of which will never successfully guess a single block and go from factory to space heater to landfill.

Can't remember which miner, but one of the majors, made more money in credits for pausing their waste than they did from the bitcoins that came out the other end last year. It's just extorting the public.

> Not sure about Bhutan's grid, or who they can interchange to, but there are frequently wind farms in TX that have to take a loss to generate power simply because they are forced to generate power, and there is no demand for power in the region, and the buses (power lines) are congested.

So invest in building more power lines.

The myth of stranded energy is toxic. Wasting it on bitcoin mining is an incentive not to connect it to the grid the way it should be connected. Either don't build it, or build it and connect it. The worst case outcome is to build and then waste it.

Transmission losses are only 2-3% per 1000km.

[peyton]

You’re suggesting Bhutan alter their national energy mix rather than run a Bitcoin mining operation?

Bhutan has 0.15 vehicles per capita, among the lowest in the world. 47% of their popular has no education. You’re saying Bhutan should build a smart grid for EVs rather than run a Bitcoin mining operation?

I think that’s kinda ridiculous.

[datadata]

> Or do something with it that isn't guessing random numbers on machines 99.7% of which will never successfully guess a single block and go from factory to space heater to landfill.

By this logic we should remove airbags from cars also-- the vast majority of airbags just cost money to manufacture and don't ever expand or save a life, ending up in landfills unused.

[vxNsr]

Not to detract from anything you said but I read that Texas specifically is unique in that they don’t want to connect to the national grid to avoid being regulated by the federal government. It creates other problems like we saw in 2021 as well

[eru]

If you drop the prices, the market for energy is never saturated (especially outside of the very short term).

But the prices might drop below what crypto-mining pays.

[iainmartin]

Hey Zetice, I'm the author of this story. Can we have a chat on another platform? Open DMs on Twitter.

[shrubble]

If they are gapped out on transmission capacity, then they can produce it but can't send it to India, in which case doing something locally with it woukd be useful.

[throwaway2037]

Two options: They can build the transmission lines themselves, or lend money to India to build them.

[whitesilhouette]

Lend money to India.... that they earned from Bitcoins‽ That's kind of a circular logic, isn't it?

[lordlimecat]

The article (and Bhutan) are strangely cagey about whether this process has actually generated a return.

Spoiler: it hasn't.

[alienthrowaway]

What? They are already selling energy to neighbours - it contributes 30% to GDP. Are you suggesting they cannot sell more of it?

[Mistletoe]

It seems likely they felt they can get more for it from mining Bitcoin. Surely they’ve done the math. Why would a country, like a business, choose to make less money?

[SamBam]

Because it's worse for the world. They have a tremendous source of green energy, and they could sell more of it to India reduce the amount of coal and oil India burns, but instead they use it to spin motors to power computers to guess random numbers and hope they make the rich a little richer.

Plenty of countries have chosen to have environmental goals at the cost of making less money.

[Mistletoe]

I’m not sure Bhutan can afford to do that. It reminds me of when Western countries burned coal for 100 years to get where they are and then don’t want other countries to do that. I get it, and I don’t want the earth polluted either but it certainly smacks of colonialism/manifest destiny type thinking.

[jcranmer]

> It reminds me of when Western countries burned coal for 100 years to get where they are and then don’t want other countries to do that. I get it, and I don’t want the earth polluted either but it certainly smacks of colonialism/manifest destiny type thinking.

That kind of argument makes less and less sense the more you think about it. It's like arguing that Africa can't develop the Internet until after they get their telegraph network up and running. There's no reason that a functional power grid requires the use of fossil fuels as the primary energy source, and we're already at a point where renewable energy is as cheap to set up as fossil fuel plants. An advantage to starting industrialization later is you don't have to waste time working through worse versions of technology. If you want to be competitive, starting out on the latest and greatest is the best choice, especially because you often have a chance of undercutting existing providers who have too much sunk capital costs in less efficient technology.

[polygamous_bat]

Possibly because there are hucksters whose entire life's goal is to convince others that soon rapture (hyperbitcoinization) will arrive and the believers (hodlers) will be rewarded greatly for their faith.

> Why would a country, like a business, choose to make less money?

See also: Microstrategy, El Salvador.

[mtlmtlmtlmtl]

Because they think it will make more, but their predictions are wrong?

That's usually how I end up choosing things I thought I could never choose.

[lordlimecat]

For the same reason people got suckered by FTX and the same reason so many got burned in the many BTC crashes: They got taken in by the wild promises of cryptogains.

[pclmulqdq]

They probably can't. They don't control the demand for their power.

[robocat]

Huh?

Quantity demanded increases as price decreases https://wikipedia.org/wiki/Law_of_demand

Bhutan controls the price they will sell at, and for hydropower the marginal costs can be very low, so surely they do control the quantity demanded.

[pclmulqdq]

A lot of people don't understand energy markets. They are not basic commodity markets. They use weird pricing mechanisms and they are tied up with national security concerns on both sides of the border. They rely on a weird kind of distribution infrastructure. The product is consumed immediately, with no (realistic) way to store a ton of it.

Most likely there is a treaty setting a floor price on the power or a demand ceiling, and they have hit one of those. Those limits are negotiated based on all of these considerations.

[robocat]

Without specific knowledge of the agreements between India and Bhutan, or knowledge of the constraints on the network, plus other factors, your comment is hypothetical. I agree with some of your points.

I don’t agree with “They don't control the demand for their power” because Bhutan do have choice over how much they deliver, even if it is only in the long term via their contracts. Bhutan exports 70% of their power, so clearly India wants it.

As an aside, I have two very good friends who work designing electricity markets, and planning country interlinks. I am not a specialist, but I do try to keep up with the play.

[1123581321]

There is an optimal product of price * quantity sold they can’t exceed without something changing on the buyers’ end.

[thoi342343434]

The part of India that neighbors Bhutan is extremely un/de-industrialized, and due to years of insane 'SJW-liberalism' driven politics, is as bad as the worst of sub-Saharan countries in terms of development metrics. India also gives away electricity for free to farmers (due to similar idiotic populism), and compensates by charging industries more (grid losses in India are also very high). To say that demand side is anemic is an understatement.

Bhutan doesn't have the best relations with Nepal either after the ethnic-cleaning of Nepali Hindus (1/5 its population) from Bhutan. Nepal, ofc, is as poor as India (though better than Bihar).

[crooked-v]

> you can’t sell it

Bhutan sells a massive amount of power.

[arcticbull]

You absolutely can by investing in transmission infrastructure instead of wasting it on guessing nonces. It incentivizes continuing to waste it instead of transmitting to to places with productive uses.

Transmission is extremely efficient. A power line spanning all the way from New York to San Francisco should be about 92% efficient.

Transmission line losses are only about 2-3% per 1000km. [1]

[1] https://iea-etsap.org/E-TechDS/PDF/E12_el-t&d_KV_Apr2014_GSO...

[datadata]

Transmission loss can actually be reduced to zero, if voltage is infinite (or super conductors were used). However, the important part is the installation and operational cost of a high voltage line-- which is definitely non zero. For a small enough economic value of a far enough away stranded power source, installing transmission lines would not be economically rational. It is a bit like saying that every house should have 10 Gigabit internet. The technology is there, but the capital expenses are not reasonable for ubiquitous deployment.

[arcticbull]

If there's a small amount of power available then it's not worth mining. If there's a lot of power available it's worth building a transmission line. There's no rational economic system where the ideal case is build-to-waste - that's just policy failure. Bitcoin just provides economic incentive to create that policy failure instead of minimize it.

[datadata]

> If there's a small amount of power available then it's not worth mining.

Could you explain how you arrived at this conclusion? The value of mining is generally proportional to the available power. If the capital expense of a mining rig is less than a transmission line, it might be better to mine than to transmit. For example, if it costs 1 million dollars to install a transmission line, but only 1 thousand dollars to setup a mining rig that could consume all the energy, it probably be more feasible to mine than to transmit.

[arcticbull]

Mining does zero useful productive work. That's the point. That's how it has to work. It's literally a proof of waste system. Each unit of wasted energy should be spent doing something useful. If you economically incentivize waste, there's no market signal to utilize the power to productive ends.

So if there's a small amount of power, you get no yield from mining. If there's a lot of power, you can afford to connect it to the grid. If there's a medium amount of power, decommission some of the supply - or never build it in the first place. All three options are better that using it to probabilistically guess at nonces and prove you expended it on nothing of value - and get paid for it.

[zamnos]

And if there's a medium amount of power?

[lordlimecat]

So we're effectively saying, "infrastructure is expensive" to justify burning the piles of money instead of using it to improve the situation?

[datadata]

Where did I say burn piles of money? I'm saying that if the transmission line is profitable, build it. If it isn't profitable and bitcoin mining is profitable, mine bitcoin. Both options should only be done if they are profitable.

This is the exact opposite of burning money. Your assessment whether bitcoin mining is wasteful or not is beside the point, the point is merely to unlock the economic value of stranded energy.

[mtlmtlmtlmtl]

Cables.

[throwaway290]

after I heard about express cryptocurrency management workshops for Thai buddhist monks last year I am not surprised

[sidiropo]

There are power generation facilities in Canada that are paying the US to take their excess energy.