[danhak]

A crypto enthusiast friend once made that argument to me and it was so baffling.

By this logic, we should all leave our lights and air conditioners on while we're at work or on vacation because it will increase demand and hasten the transition to renewables.

[nightski]

I'm no crypto enthusiast, but that's not the same argument. You are not moving demand to physical proximity of the renewables in that case, whereas miners claim they can.

[arcticbull]

The correct answer is to connect the energy source to the grid or to do something useful with it at the point of generation. If it's being consumed instead to guess random numbers the economic incentive to do something useful with it is suppressed.

[wkat4242]

Miners don't really want to use energy only when it's at a surplus though. Because the equipment is expensive and due to the difficulty increasing it's only viable a short time. So this is an argument that also doesn't really fly (and draws attention to another issue; the e-waste)

[foobarian]

On the flipside if all resistive load heaters came with a BTC miner they could get some additional utility from the energy.

[arcticbull]

Sure, but the gotcha there is that we shouldn't be using resistive load heaters, they're only 100% efficient. Heat pumps are several hundred percent efficient - 300-600% in fact. Whereas resistive heaters convert electricity into heat directly, heat pumps use energy to move heat against a temperature gradient.

The idea that you can be paid to waste this power just creates economic incentives against the improvements we actually need to be making.

[danhak]

Friend in question was mining bitcoin out of his NYC co-op apartment on a master electricity meter.

[yrral]

Leaving stuff on when you are away is completely different than how bitcoin mining demand response works.

Firstly, at regular electricity prices, bitcoin mining is profitable and it is profitable for the utility to run renewables (which in turn means it is/was profitable to build renewables). When there is substantial demand or low supply, then it is profitable for the utility to pay the bitcoin miners to turn off, because the alternative to import power is more expensive. This in turn makes your electricity cheaper. In addition, the additional steady state demand for power allows for more renewables to be built, which further increases the supply during low supply periods. Your AC does not automatically turn off when this happens.

I am one of those enthusiasts making "strange logic" claims. I've been making this claim well before others but I feel that I keep getting downvoted on them off of people's emotion rather than rational logic.

The transition from fossil fuels to renewable energy sources has altered the environmental impact of additional electricity consumption. Where once any increase in consumption was considered harmful due to its reliance on fossil fuels, the rise of renewables introduces scenarios where the marginal environmental cost of electricity can be beneficial if the demand is flexible.

Bitcoin mining has the potential to act as a load balancer for the electricity grid. By increasing its energy consumption during periods when renewable energy production exceeds demand, and reducing consumption during peak demand periods, Bitcoin mining could help stabilize the grid and make renewable energy generation more economically viable.

Bitcoin mining's demand for electricity is unique in that it is primarily cost-driven. Renewable energy generation capacity is particularly volatile. Bitcoin mining power usage can be flexible and responsive to the availability and cost of electricity.

The ability of Bitcoin mining to consume excess renewable energy when it's available (and potentially at low or negative prices) could improve the financial viability of renewable energy projects by increasing the floor price these new projects can sell electricity at. This can encourage the development of additional renewable energy capacity by providing a reliable demand for their output during otherwise unprofitable periods.

Here's some examples:

https://news.ycombinator.com/item?id=25444985

https://news.ycombinator.com/item?id=26094279

https://news.ycombinator.com/item?id=26811819

https://news.ycombinator.com/item?id=29367174

https://news.ycombinator.com/item?id=30310572

[woodruffw]

To understand why people don't find this compelling (and are sick of hearing it), you probably need to first understand that people consider Bitcoin's profitability a false economy.

In other words: your scenario is identical to GP's except that someone is paying you to run your AC while you aren't at home, rather than just doing it because you can. The logical question is then to ask why they're paying you to run your AC, and that is the uncompelling part: it's not clear that we should be paying people to burn energy to crack hashes.

[wharvle]

People’d find it outrageous if beanie baby collectors were sacrificing 2% of US food production on altars to their beanie babies, because doing so made the beanie babies more valuable to other collectors. Even if some of the collectors were growing their own food for the purpose, et c, et c—it’d still bother a lot of people. Maybe most people.

[thereisnospork]

> it's not clear that we should be paying people to burn energy to crack hashes.

In particular when we artificially increase the energy require to crack said hashes. If hash-cracking was, for instance, bid out on a competitive marketplace[0] instead of limited by difficulty bitcoin would need far less power to perform its 'role' as a 'currency'.

[0]Want to mine a block? Bid for the mining rights (in USD or BTC).

[randomNumber7]

The point of bitcoin is, that you would need to burn the same amount of energy to fake the blockchain.

Im not saying this is good, but its the way it works...

[ruined]

and this is where it comes to a point: what can you possibly change about the world to deincentivize that, and make it uninteresting?

if you want a transition away from carbon, you have to solve that question.

[p1mrx]

> what can you possibly change about the world to deincentivize that

https://en.wikipedia.org/wiki/Carbon_fee_and_dividend

This would remove the incentive to mine crypto on any grid that is coincidentally emitting carbon.

[ephbit]

The carbon fee would lower and possibly sometimes completely remove the incentive to mine Bitcoin on a grid that is coincidentally emitting CO2, when the current electricity generation mix has a large share of fossil generation.

As most (if not all) uses of electricity, Bitcoin mining is sensitive to the electricity price. Introducing a a carbon tax / carbon dividend, doesn't magically make any particular use of electricity economically unviable all of the time. It just pushes the cost equilibria to different values.

[jonahbenton]

The why requires a few steps.

Money is just another technology. As a technology it has existed in various forms over thousands of years.

Technologies see continual innovation and change, with various actors and various motives influencing their use, function, reach.

Governments of various forms are our current best method- govern-ance- for managing human-scale assets, resources, and technologies with collective purpose and implication.

Moneys- currencies- as a technology are one of those human assets owned and managed by governments, like land, and other resources. There are over 200 distinct currencies in the world.

The mechanism for this management is based on the notion of a ledger- the record of balances, of debts, of interest, and the creation- inflation- of money supply in the context of that management.

Most governments are poor at this management when measured by how well their implementation of this technology that is money serves the needs of most of their populations.

Governments themselves- both "democratic" and non- in their current form are fragile and vulnerable, with the powers of governments utilized against portions of theirs and other populations.

BTC is a technology, a cryptographically-secured system of record- a ledger- that can be used as a money. It is not under the control of an existing government.

By collective agreement of its participants, a complex balance of users playing different roles with different incentives and risks, the rate of creation of assets recorded there is managed to a low level of inflation. As such, as a technology utilized for money, it is a stable "store of value" in contrast to the moneys supplied by literally every government.

The ledger, the system of record can be preserved- secured- if and only if it is too expensive for attackers to change it. The turning of energy into hash minting is the security for that system of record.

That's it.

Adopting a mindset where the above argument takes hold involves a kind of leap of faith. It is a belief. Sure, a religion. The game theory/mechanism design behind BTC is a true innovation, the first demonstrated solution to the Byzantine Generals problem.

There is an argument- won't people stop believing in it?

Maybe? I would suggest evaluating that argument against the lifespans of other innovative beliefs.

Is it something that comes and goes, or is it like the eye, an invention of evolution that solves a specific problem and appears distinctly and repeatedly in different organisms once they hit certain levels of complexity.

Cheers.

[lolc]

One thing I don't get about the "store of value" belief in Bitcoin is: why specifically this chain? It has only network effects going for it. Mindshare is a fickle thing.

[jonahbenton]

Yeah- well:

It was first, and first mover advantage is significant, which has turned into network effects and inertia, and now with the ETF recognition has gained "official" validation;

Anti-inflation is one of its core design principles, is the basis for store of value, and commitment to it has remained solid;

After ETH PoS changes it remains the only proof of work chain. PoS has belief failure modes that can lead to collapse of value. PoW-based value by definition is secured by the cost of the work. It is a financial equation- a ledger can be maintained at the underlying cost of recoverable energy- not a political/fashionable one.

Mindshare can be fickle, and if purely based on fashion, if there is no inertia and there are adjacent equivalents, value can be lost quickly. With BTC there is inertia, because at a deeper level there are no adjacent equivalents. BTC continues to occupy a unique niche in the design space of these artifacts/assets.

[lolc]

Sure as long as people believe in Bitcoin it will keep existing. Like other currencies.

I can see the inertia argument. Why switch when it works. I still don't see the store of value argument when Bitcoin requires such exorbitant amounts of energy to keep up. That's a tax on the value. "Look how much energy it's using, it must be worth a lot!"

[yrral]

I'm not arguing whether the use of electricity is compelling or not.

I'm arguing that the unique energy demand characteristics of bitcoin mining allow it to support building renewable energy projects and balance electricity costs and thus it has effective positive contribution to the environment.

Whether it's used to mine bitcoins or cool a house is irrelevant, except that the demand for cooling a house is location and time sensitive, whereas bitcoin mining is cost sensitive. This flexible consumption gives it unique properties that support deployment of renewables.

Please explain what you mean by "false economy". Is the economy for skins in a game you don't care about "false" because you don't like that game?

[woodruffw]

> except that the demand for cooling a house is location and time sensitive

Not if someone paid me to do it. That's the point. If there was money in hauling ACs around the US and running them on the cheapest electricity the local market could provide, we'd have exactly the same false economy.

(Besides: the GP points out that Bitcoin appears to be sufficiently profitable on NYC electricity prices, which are not cheap. They also appear to be sufficiently profitable on "retiring coal plant" prices[1], which undermines any kind of unique incentivization of renewals argument.)

[1]: https://www.indystar.com/story/news/environment/2023/12/05/c...

[ephbit]

> Not if someone paid me to do it. That's the point. If there was money in hauling ACs around the US and running them on the cheapest electricity the local market could provide, we'd have exactly the same false economy.

How is such a purely hypothetical scenario useful as an argument?

It's like saying: "If nobody ever did physical harm to anybody, we could get rid of some part of law enforcement." Not useful because it's simply not the case and very likely never will be.

> They also appear to be sufficiently profitable on "retiring coal plant" prices[1], which undermines any kind of unique incentivization of renewals argument.

Bitcoin mining incentivizes any kind of generation that cannot be consumed by a more profitable process or use case. If the price of electricity on a mostly fossil powered grid is low enough, then Bitcoin mining will be profitable. Same goes for a mostly renewables powered grid.

There are two ways, politics can handle this:

A) Impose a high enough carbon tax on fossil generation. This will lead to higher electricity prices for the fossil grid, possibly making Bitcoin mining unprofitable. But it will also make other uses of electricity unviable.

B) Regulate that Bitcoin mining is prohibited under certain conditions (location, grid generation mix, ...)

B doesn't appear wise to me. Since it's highly subjective what kind of energy/electricity use one deems useful/legitimate. I personally find the use of a > 100 horsepower private car or a private jet totally illegitimate and would welcome regulation that drastically hinders these absurd uses of energy.

[ianai]

I think the underlying argument also misses the “willingness to pay” on at least a couple parts of the transaction. Specifically assuming the grid provider is going to pay you to use their electricity. (Transmission is still costly and maybe turning off capacity is a better option.) Further, missing the core “willingness to pay” for btc or any other cryptocurrency.

Gold worked as a currency as it was independently verifiable from either side of a transaction. Modern currencies work so long as they’re backed by credible assurances of their value. Ie passing off fakes is dangerous and they may be used as “legal tender.” (That term could itself be further defined via google.) crypto currencies seem to lack this functionality. (Not wanting to abide by any law outside core network mechanics is functionally close to establishing a new form of sovereignty. Only sovereignty doesn’t work like that.) Also note how hyperinflation is dangerous to the assurance of value of a currency. Similarly, any form of instability could shake those assurances.

Modern currency is also almost trivially, embarrassingly parallel.

[lostlogin]

Would you say that bitcoin mining is good for the environment?

[alchemist1e9]

Bitcoin mining is not just an economic activity but a catalyst for innovation in renewable energy. By inherently seeking the most cost-effective power sources to maximize profitability, Bitcoin miners are driving the demand for, and thus the development of, cheap, renewable energy worldwide. This process aligns perfectly with the goal of expanding humanity’s energy supply, a necessity for continued growth and technological advancement. The decentralized, uncensored nature of Bitcoin provides invaluable financial infrastructure on a global scale, while simultaneously incentivizing the energy sector towards efficiency and sustainability. Viewing Bitcoin mining’s energy consumption as a problem overlooks the broader benefit: it acts as a buffer in energy markets, ensuring there’s always an incentive to increase supply and reduce costs. Criticisms focusing on environmental impacts should address the real issue—regulating harmful energy sources—not curbing the innovative push for more and cheaper energy that Bitcoin mining embodies. Condemning Bitcoin’s energy use echoes failed collectivist approaches, ignoring the potential for positive, market-driven environmental and economic outcomes.

[tsimionescu]

There is a finite amount of energy though, so even if it would be optimal to have infinite supply, we can't.

And even if that weren't the case, your argument still makes no sense. Every watt that Bitcoin mining incentivizes is then consumed on Bitcoin mining, it's a zero sum game.

It's like building heaters in the desert: if you're willing to spend money for 1GW of electricity to run your heater, someone will build a 1GW plant for you. Now there is nominally one more 1GW plant in the world, but there is 0 extra available power, you're using up all of it to heat the desert.

[anigbrowl]

Every industrial power user inherently makes the most cost-effective choices to maximize profitability. Some can't be selective, eg if you run trains or a steel mill you have to keep your power flowing whenever people want to move or prevent your furnace cooling off. But many industries can adjust production to fit power availability.

It's not clear to me that Bitcoin delivers sufficient economic value to justify the vast power demand. What utility do all these hashes provide, except to other people who bought into crypto trading? If there were some positive externality that'd be great, but there's no inherent value to crypto beyond the artificial scarcity.

[jcranmer]

The issue with your argument is there's no real evidence that Bitcoin mining is spurring investment in renewable power plants, and quite a bit of evidence that it is deterring disinvestment in dirty power plants. Furthermore, the links you point to start out by talking about how Bitcoin miners are being paid to not mine.

It's actually rather more like "we'll rapaciously use energy to bring the grid to its utmost limits, but don't worry, if you pay us lots of money [in some cases, more than we get from our regular business!], we'll happily not use quite enough to actually cause it to buckle and fail." Sounds like an extortion racket, doesn't it?

[tsimionescu]

> Where once any increase in consumption was considered harmful due to its reliance on fossil fuels, the rise of renewables introduces scenarios where the marginal environmental cost of electricity can be beneficial if the demand is flexible.

This is a major flawed assumption. Even in a 100% renewable world, every extra watt consumed carries an environmental cost. It is of course less than when burning fossil fuels, but it's still there, and not necessarily even that small.

> The ability of Bitcoin mining to consume excess renewable energy when it's available (and potentially at low or negative prices) could improve the financial viability of renewable energy projects by increasing the floor price these new projects can sell electricity at.

The world has not run out of useful things to do with energy yet, so this is already a bizarre claim. But even ignoring the uselessness of Bitcoin for a moment, this clearly incentivizes the wrong kind of renewable development. If you need to turn your power to Bitcoin to be profitable, that means you can't afford to store this power even as the technology to do that improves. And if you can't store the power, then you can't be part of a fully renewable grid, so you're essentially building the wrong thing and it's better to leave the resources alone to be used in other projects that can actually be self sustaining.

[arp242]

> Bitcoin mining has the potential to act as a load balancer for the electricity grid. By increasing its energy consumption during periods when renewable energy production exceeds demand, and reducing consumption during peak demand periods, Bitcoin mining could help stabilize the grid and make renewable energy generation more economically viable.

Lots of things have the potential for lots of things. But we need to operate on the reality as it exists, and that reality is that Bitcoin uses a phenomenal amount of power, to the point that people are paying Bitcoin miners to not use electricity when the grid is at capacity (as mentioned in the article).

[anigbrowl]

I see your point but disagree with it. It's not load balancing because you're not putting anything back to the grid at times of high demand. Yes, you're incentivizing production of renewable energy (good), but that could be done equally well by investing more in batteries, whether of the chemical or gravitational variety.