Bitcoin Miners Eye Nuclear Power as Environmental Criticism Mounts
wsj.com
wsj.com
Any electricity used for Bitcoin is electricity that isn't used to take a coal-fired power plant offline somewhere else.
Not to mention, there's enough accessible uranium to make concerns about the being "renewable" moot: https://www.forbes.com/sites/jamesconca/2016/07/01/uranium-s...
And the huge win provided by nuclear power is it's geographic independence and consistent output. Nuclear plants work regardless of wind speed, and give the same output in the Arctic circle as they do at the equator. And this output is consistent, it doesn't fluctuate with weather or day/night cycles. This eliminates the need for storage, which is something we don't currently have the capability to build at any substantial scale.
That's what people don't realize when they compare costs of nuclear vs solar + wind. The reality is it's costs of nuclear vs. costs of solar + wind + thousands of miles of HVDC lines to move energy from rural areas to population centers + massive amounts of grid storage to accommodate intermittent generation.
Furthermore, full decomissioning and waste storage costs are included for the whole lifecycle, so that argument is moot.
How nice to ignore inconvenient facts like Europe's skyrocketing energy costs.
1) The conglomerates profiting from nuclear are not the same profiting from renewable energy.
2) Renewables can be very decentralized. Nuclear is the most centralized. This changes the balance of power.
3) A small set of people paid to push for some ideas on the Internet can shift public opinion a lot.
> Any electricity used for Bitcoin is electricity that isn't used to take a coal-fired power plant offline somewhere else
There are numbers of locations that would be great sources of geothermal power that have literally no way of transmitting that power. Build a mining operation there, no one would notice or care.
There really isn't any "spare energy" that can be used for guilt-free bitcoin mining.
At least not on an industrial scale. Some countries use resistive electric heating for some domestic heating and you could replace that with mining. That's a small edge case though.
If you come up with a scheme to make economic dual use of the Work (mine bitcoin and heat houses) then it will no longer cost enough Work and again, more mining will be incented till the price equalizes again.
But long term, proof-of-work is a definite dead end. I'm not sure if Bitcoin will eventually collapse, or of it will find a way to transition to some other proof mechanism before it does so, but proof-of-work is fundamentally not viable. By design the amount of energy required to keep the network secure increases as the value of the network grows - that's the exact opposite of most endeavors, where growth gets you economies of scale which greatly reduce per-item costs.
So the only options are either that BTC has a relative ceiling on it's total value, or it eventually takes up a majority of worldwide energy use. I'm guessing the wheels will come off before the latter occurs.
Also has anyone actually looked at the btc energy usage as a percentage of global energy usage? Its a pimple and that rate does not increase with userbase it increases with coin value which will hit a plateau.
The whole thing about proof-of-work is that it serves as a way to prove that a particular miner spent some amount of money (in the form of energy costs) validating a transaction. As the value of Bitcoin increases, then, it means there is more incentive to throw energy at the problem, because the reward you get for mining (or, for that matter, for a chain attack) is worth more.
There is no way to get out of the proof-of-work problem by deploying cheaper or more abundant forms of energy, because, again by design, it just means that any miner would need to use more of that cheaper form of energy to validate a transaction.
No, that's not what I'm talking about. I'm making no judgment at all as to whether validating transactions is a good use of energy.
> And as mentioned above, the hash rate is not an infinite black hole, it levels off as the price levels off regardless of userbase.
Exactly, and your statement here 100% proves my point. Since the total number of Bitcoins is fixed, the only 2 options are (1) "the price levels off" as you put it - but the only way (long term) for the price to level off, when supply is restricted, is for demand to eventually wane. The other option (2) is for Bitcoin to eventually become a sizable portion of the financial system, in which case it's energy demands will grow proportionally.
The point I'm trying to emphasize is that Bitcoin backers' position is not possibly consistent: either Bitcoin becomes widely deployed for actually facilitating transactions, in which case its energy use grows proportionally, or its energy use plateaus, in which case it means usage of Bitcoin will have plateaued as well. There is no middle option.
Again thats not how it works. Energy usage does not grow in proportion with transactions. It grows in proportion to hash rate which is a function of market capitalization value. I can assure you the MC of bitcoin is not going to grow exponentially infinitely because that is a physical impossibility.
Yes, you are absolutely correct, energy usage is a function of market cap. But my point is that if people actually start using Bitcoin to facilitate transactions (instead of its primary purpose of a speculative asset as it exists today) then its market cap would explode. And again, this has been what Bitcoin proponents have been arguing forever now - that the time to "get in" is now, because once it starts being used for "real commerce", demand will soar.
There is just no getting around the fact that the more "popular" Bitcoin gets ("popularity" eventually has to show up in market cap) that its energy use will grow in lock step.
That's not the only issue, another is how BC did not really deliver on what it originally promised.
Instead, the whole cryptomarket seems to have simply turned a massive speculative market with more manipulation going on than any other financial market.
So all these high and noble goals crypto originally started out on, have turned into a whole bunch of people just trying to make the largest profits, even if that means defrauding a whole bunch of people of their savings.
El Salvador has 6 million people, China has around 1.4 billion people.
.. as long as the Carbon-centric economy grows, food-miles continue, the high-end leisure hotel market gets subsidy and wasteful wars continue to literally kill and maim as well as use yet more fossil fuel, yes, agree.. none of that matters
meanwhile, viva crypto
That seems paradoxical to me. The power of blockchain (to me, okay, I'm no blockchain expert, I'm barely a novice) comes from the number of people publicly using your blockchain because every user added makes it that much more difficult to execute a 51%-style attack on the blockchain.
Stuffing blockchain under the rug by placing it exclusively on the back-end seems like you wouldn't actually be having people use it in a way that wouldn't be just as useful by including a hash on each transaction in your transaction DB. If we're being honest, the people "trading" cryptocurrencies on the current exchanges are antithetical to what crypto is about because they're not actually trading cryptocurrencies - they're trading the rights to the cryptocurrencies owned by the exchange. By centralizing the ownership of the cryptocurrencies to the exchanges instead of using their own wallet, they're again opening the gates further to a 51% attack.
I can’t read the full article to see if there is a rebuttal though as it’s behind a paywall.
By Jennifer Hiller - WSJ
Bitcoin miners, under fire for their sizable environmental footprint, are forging partnerships with owners of struggling nuclear-power plants with electricity to spare. The matchups have the potential to solve key issues facing each industry, executives and analysts say: Electricity-hungry bitcoin miners want stable and carbon-free power, while nuclear plants facing competition from cheaper power sources need new customers. Talen Energy Corp. has entered into a joint venture with bitcoin-mining company TeraWulf Inc., which has started land development for a mining facility the size of four football fields next to its Pennsylvania nuclear plant. Nuclear generator Energy Harbor Corp. will provide power to a Standard Power mining center in Ohio starting in December. “We are building demand adjacent to the existing nuclear plant,” said Talen Energy President Alex Hernandez, who heads the subsidiary jointly developing the mining project near the Susquehanna Steam Electric Station.
New nuclear projects are eyeing cryptocurrency miners as well: Startup Oklo Inc., which plans to build a small-scale fission power plant that can run on used nuclear fuel, has signed a 20-year supply deal with hardware and hosting firm Compass Mining. “Both industry’s challenges are the other industry’s positives,” said Sean Lawrie, partner at consulting firm ScottMadden Inc. Mining bitcoin is an energy-intensive process. To unlock more of the currency, miners must solve mathematical puzzles that become increasingly complex, which means they require more computing power—and electricity. Mining a decade ago required only a person with a PC, but rising bitcoin prices and a limited supply have created a race. The way to boost the odds of figuring out the puzzle is to put more machines to work. “At the core of bitcoin mining is energy and energy infrastructure,” said Paul Prager, chief executive of TeraWulf. The rise of vast mining operations has fueled criticism from environmentalists and others that growing use of fossil-fuel electricity for cryptocurrency could waste resources and worsen climate change. A tweet from Tesla Inc. Chief Executive Elon Musk expressing concern over the environmental impact of mining operations briefly caused bitcoin prices to fall in May. Nuclear power, meanwhile, has lost public favor in the wake of accidents such as Japan’s 2011 Fukushima disaster and has struggled to compete economically in the U.S. Nuclear plants provide a steady source of emissions-free power, but like coal-fired power plants, many face a daunting challenge selling their output in wholesale power markets amid stiff competition from wind and solar power—and natural-gas generation, which became cheaper after the fracking boom led to huge new discoveries of the fuel.
“They’re still making money because they’re still running, but it’s very hard for them in the current power markets to recover a fair return on their maintenance investments,” said Travis Miller, energy and utilities strategist for Morningstar. Numerous nuclear plants have been retired in the U.S. in recent years, including the Indian Point facility outside of New York City formerly owned by Entergy Corp. With retirements likely to outpace new projects, nuclear is poised to decrease in the U.S. electricity mix in coming years, according to the Energy Information Administration. Exelon Corp. EXC -0.83%▲ in June said that it would shut two of three Illinois nuclear plants that failed to sell their electricity during the most recent wholesale power auction for PJM Interconnection, which operates a market serving 13 states and Washington, D.C. That led state lawmakers to approve a bailout this month to keep the plants running. Talen’s Susquehanna plant also had fewer megawatts clear the same PJM auction than the previous one in 2018. The outlook for Talen subsidiary Talen Energy Supply LLC was revised to negative by Fitch Ratings and Moody’s Investors Service. The upshot will be a decline in auction revenue of $209 million over 2022 and 2023, according to Fitch.
Cryptocurrency miners in China are turning off their machines after Beijing warned it would tighten its control over the industry. This has created an opportunity for miners elsewhere, as the power behind crypto becomes less dependent on one place. Photo illustration: Sharon Shi “We find ourselves in a place where the power markets continue to be oversupplied, and in general with a few exceptions, pretty weak,” said Mr. Hernandez, Talen’s president. The company sees the bitcoin facility as key in building out a carbon-free digital infrastructure business, he added. It also plans a data center next to Susquehanna, and on Tuesday said it had secured another $175 million in capital for the projects.
While more nuclear-bitcoin tie-ups are expected, they aren’t likely to be large enough or happen quickly enough to save nuclear plants teetering on the edge of closure, said Bill Dugan, a director at Customized Energy Solutions, an energy advisory firm. “It would have to be a lot of them aggregated together,” Mr. Dugan said. For bitcoin miners, the partnerships allow them to promote projects as having an environmentally friendly source of power. “That was a big differentiator for us,” said Maxim Serezhin, chief executive at Standard Power, which is building a nuclear-powered bitcoin-mining facility at a former paper mill in Coshocton, Ohio. Standard Power’s formal name is 500 N 4th Street LLC. Energy Harbor declined to comment and referred questions to Mr. Serezhin.
The Compass Mining deal with startup Oklo doesn’t include a set price for power, but Whit Gibbs, chief executive of Compass, said he is confident that the companies will agree on a price that allows for profitable cryptocurrency mining. Jacob DeWitte, co-founder and chief executive at Oklo, said he had received inquiries from other bitcoin miners interested in the company’s 1.5-megawatt project using small modular reactors. It still needs federal approval, however, and isn’t likely to happen until sometime between 2023 and 2025, he said. In Miami, Mayor Francis Suarez has been touting his hometown as a destination for cryptocurrency miners, exchanges and investment firms. Part of his pitch includes the nearby nuclear-power plant owned by Florida Power & Light Co., a subsidiary of NextEra Energy Inc. NEE -0.70%▲ Many environmental, social and governance, or ESG, concerns about bitcoin mining “come from the fact that a lot of the mining was being done in coal-producing countries,” said Mr. Suarez. Talks with Florida Power & Light officials have included whether mining facilities might be located near the nuclear plant, and challenges such as the lack of cheap land to build big warehouses for mining gear, Mr. Suarez said.
Florida Power & Light declined to comment on the discussions, but spokesman Bill Orlove said South Florida has become a relocation destination for the tech industry. “We look forward to supporting the continued innovation and growth those companies bring,” Mr. Orlove said.
I've not heard that nuclear fission is particularly sustainable. Clean, relative to fossil fuels, yes. But sustainable? Does that word even make sense to use in referring to nuclear power, outside the technical sense of "self-sustaining fission reaction"?
Basically, through a combination of subsidies, geography, and credit score, if you've got the technical know-how, in my region one could effectively not have a power bill through a combination of solar and bitcoin mining.
Some of the largest economies on this planet have poured massive resources into fission for literally decades. Whatever we might discover/improve, we already did, anything past that seems to have quite diminishing returns.
Particularly compared to other technological fields that didn't even get remotely the same levels of funding and time investment.
Which means there's much more potential there for actually innovative breakthroughs.
Case in point: Grid-scale storage was for the longest time a field that saw barely any attention, it's quite underdeveloped. As the common consensus was that fission will deliver all the electricity we would ever need.
Now we have plenty of renewables, but we lack the storage to fully utilize them. Which means if we get grid-storage right, we have already solved a very big part of the problem.
It just seems that the next step is going to be for bitcoin miners to start building a Dyson Sphere even though it will kill the rest of the planet off.