Kazakhstan to restrict crypto miners amid power shortages
eurasianet.org
eurasianet.org
In the developed world in particular, we're seeing the move away from fossil-fuel power. This is good but currently relatively expensive.
Crypto mining is starting to have very real impact on the ability of other people to live. It is adversely and disproportionately affecting poor people (who pay a greater share of their income for power).
And at best crypto provides extremely limited utility for society.
Crypto-mining apologists will point to figures that say "crypto-mining uses mostly renewable energy". What this actually means is that crypto-mining is focused on areas that have hydroelectric power because it's the cheapest, generally.
While you might say that's still good, it's starting to raise prices for other people. this has been an issue in towns on the Hudson Valley in New York, for example.
Even if you believe the overall impact of crypto-mining is small I guarantee you it's only a matter of time before politicians start using crypto-mining as a convenient whipping boy.
This is true for bitcoin. It failed at everything it set out to be and yet it is the most mined coin. Truly a waste of energy.
There are better projects out there which actually provide value and utility. Monero is an example. It's pretty sad that bitcoin is still number one despite the existence of these projects.
I don't remember who said that crypto is Lululemon, Amway, multi-level marketing for tech guys, but it's amazing the similarities.
In a discussion on Proof of work does not scale, cannot scale, will choke out production in the economy going forward because of its design, a person responds with say "you're right, that product is bad. Don't buy that one instead buy this one".
Does this other one solve any of those problems? Nope, but the person hawking it has purchased a lot of product and gets a cut if you buy into it.
It's amazing how disingenuous crypto conflict of interest has made any and all discussion about crypto.
I don't particularly care that energy is being spent on cryptocurrency. What I hate is the fact that energy is being spent on bitcoin in particular. The energy is not supposed to be wasted, it's supposed to buy us something. Namely, a decentralized, private, anonymous, uncensorable, unsanctionable digital cash network. Something that could withstand even the might of the US and China if needed.
Bitcoin is not it. At this moment I think Monero is closest to being it. I'm totally open to new ideas.
Find a better hobby =/ This casino is not worth boiling the world.
That said, I'm totally open to new hobbies.
For now. As its usage goes up, its energy consumption will go up, <<by design>>. It's crazy that we're even talking about a <<currency>> (!!!) using this much power.
> It's the oil companies who are boiling the world but nobody dares to touch them.
We are working on all of that, I guess you haven't been following the news. It's not easy, but we are.
> The cars, the factories, the developed nations and their comfortable lifestyles supported by such a highly polluting economy.
Same. Electric cars, environmental regulations for factories, increased energy efficiency for houses, etc.
> China is the most polluting country in the world, but will the US, Europe stop trading with it? No.
China's working on it and the US and EU are actually kind of gearing up towards a trade reduction.
> No. How will the west survive without its cheap consumer products? The very computers we're posting this on?
These computers are also used for work, hobbies, making people's lives better.
> No, I refuse to care. It's a drop in the ocean compared to the real problems that no government will lift a finger to solve.
It's not a drop. It's something we created about a decade ago and it uses up a 100th of the energy the entire world is using. That's crazy. And those real problems are being tackled, you just don't know it or refuse to see or think it's simple and easy to solve.
Okay. Let's wait for them to solve the big problems first before we focus on inconsequential stuff like cryptocurrency. Once that's taken care of, we'll see if proof of work remains an issue.
It has doubled in the past 6 months. And gone up 10x over the past 4 years. How many more times can it go up 10x before you would consider it no longer nothing, and now a concern for the world?
The first rule of holes is "stop digging". We are in a hole with energy consumption. And we've set off an automated digger to sit next to us. People are shouting, if we want to get out of this hole, yes we need to fill it, but first need to do something immediately about this automated digging machine.
In my option (and I'm not singling you out as many in crypto feel this way), it is incredibly backwards for anyone to both say stopping climate change and energy consumption is a priority - and that promoting a growing energy beast isn't a huge concern to be addressed.
I don't like these posts claiming cryptocurrency is literally destroying the world and must be banned or regulated out of existence. Those need a reality check, and the reality is cryptocurrency is not even 1% of world energy consumption.
It’s fine to hope that things might be different, but making decisions and plans based on that hope seems…imprudent.
In other words, the perfect ability to money launder, evade taxes and purchase contraband. Great.
But what would a law-abiding person do with this?
'I have nothing to share'.
And do you own any Monero?
You can't earn any money by re-selling their clothes, you'd probably get sued if you tried.
You probably mean LuLaRoe, a brand that is capitalizing on the name similarity.
https://en.wikipedia.org/wiki/LuLaRoe https://en.wikipedia.org/wiki/Lululemon_Athletica
But it is not Bitcoin. It likely will never have the attention of large capital holders (eg: Financial Institutions). Ignoring the regulatory risks (which absolutely exist), IMHO the real critical risk is that bugs or bad math will break the economic model.
With transparent blockchains like BTC, you can trace every satoshi. With opaque chains like XMR, you risk that a bug in the code will permit invisible inflation. This has happened before! (https://jonasnick.github.io/blog/2017/05/23/exploiting-low-o...).
The same problem applies to all ZK based solutions -- Zcash, Grin, Mina... You are one mistake away from invisible inflation that will sap all the value from the coin.
I'm of the opinion that Monero is a failure if it can't withstand regulation.
> IMHO the real critical risk is that bugs or bad math will break the economic model.
I agree. I don't think I have sufficient cryptography knowledge to evaluate this risk but I acknowledge its existence. For the moment I trust that the Monero developers will do everything possible to prevent this from happening.
Still, BTC is way too valuable for something that failed to become everything it was envisioned to be. It seems to be driven by brand name alone. XMR is way too undervalued and undermined for a coin that at least tried to address the majority of problems in BTC.
Not a surprise when it is the most valuable one, a day of drops and the corresponding surges that come afterwards can set you up for a long time if you're not from the EU/US, it also appreciates faster than a house, which makes it a great asset to hold.
Not a surprise it is the most sought after, looking at it from the supply/demand aspect.
Which is a shit take anyway because that means that non-renewable energy (plus the renewable energy non-consumed by the miners) is now more expensive for everyone else, it's the basic law of supply and demand.
And in the process those miners are also making non-renewable energy a more desirable investment because it now returns more money to those who invest in it (because of said increased prices people are now forced to pay for said non-renewable energy).
[1]: https://www.newscientist.com/article/2284222-coal-powered-bi...
[2]: https://fortune.com/2021/04/20/bitcoin-mining-coal-china-env...
[3]: https://arstechnica.com/tech-policy/2021/09/old-coal-plant-i...
Update cause I'm getting down voted: the point is that the quoted articles are talking about China and are therefore outdated. I'm not referring to what is happening today with regards to the movement of mining.
_Some_ miners moved to Kazakhstan, but the truth is, they went global.
"On October 15, the national grid operator, KEGOC, announced electricity rationing after three major coal-fired power plants shut down. KEGOC did not directly blame miners, but it used language similar to the energy minister’s and said it was cutting off customers who “over-consume.”"
And:
> "We have seen that our [country's] electricity consumption has literally increased by 7 percent in one year. That's a very big increase," Energy Minister Magzum Mirzagaliyev said on September 30, noting that consumption usually grows by about 2 percent per annum.
> Mirzagaliyev linked the demand to mining and proposed the government limit supplies of electricity to 1 MW per mining farm and to 100 MW for the whole sector.
Where's the mystery here? Again, hopefully for the last time: China banned mining. Chinese miners moved to Kazakhstan. Now Kazakhstan is having power shortages.
We wouldn't be reading about power shortages at all if 3 major power plants didn't go offline.
you might say that the grid can only support a certain load at a some given time, but obviously more energy could be provided.
in any case, i think it's silly to concern ourselves with (specifically Bitcoin's) energy consumption, as it's tiny compared to the efficiency gains that are realized elsewhere as a result of bitcoin's adoption.
You could say that one could build a new hydro station just for delivering energy to crypto miners but that would open another can of worms as we're slowly starting to realise that hydro stations are not the most environment-friendly things imaginable (especially when it comes to habitat loss and disruption).
If crypto-miners jump in to soak up that excess capacity, that cycle doesn't happen and there's very little positive outcome to show compared to all of those uses. 50 years from now, people are going to wish electrifying normal life had happened quickly but they're not going to be using a blockchain or glad that some speculators were able to make large returns for a few years.
Coinmint in upstate new york is located in an old Alcoa aluminum smelter plant that has long shut down. It gets power from Moses Saunders dam a few miles away. The factory was originally placed near the dam so that it could provide massive amounts of power to keep the pot lines hot 24/7.
The whole place is super remote. I've seen the costs for carrying hundreds of MW just a few miles and they are massive at this scale. You can't just economically build more lines to send the power elsewhere.
Short of firing up the superfund site again and smelting aluminum, a bitcoin mine is literally the most profitable thing you could use this power for. The dam needs maintenance and a constant draw of power to keep it operational, and this pays for it.
Since the power lines are direct from the dam to the plant and the contracts were all drawn up decades ago, this has zero impact on the local community prices. Never mind that the local community doesn't draw anywhere near enough power compared with what the dam produces.
You can't just suddenly push more power through the same lines.
> at the cost of transmission losses and tolling
... a key point that I feel you're glossing over.
Transmission losses are not nothing but they are not huge. Maybe 2% to New York (it isn’t they far). Maybe 5% total if you include distribution.
Edit: Follow the lines out of the plant, at 44.978432, -74.797925 they split.
You might need to separate the lines more (and need bigger insulators), but I wonder how much of this gets overbuilt at the point of construction so you can upgrade to run more energy over the same wires without replacing them.
Anyone know?
https://www.nny360.com/news/stlawrencecounty/power-authority...
Plus, if you really wanted to because there was no other use, you could, you know, shut down the hydro power plant and return the land to nature. Hydro power plants still have an environmental impact, no point in running them for what is practically, speculation.
Shutting down the dam isn't going to happen. It is split by Canada and the US and does more than just power Coinmint.
This seemed unlikely to me, as transmission grids are built with significant redundancy, especially for the high-voltage networks. For example, the transmission capacity for the 8 500kV circuits from Bruce Nuclear (ignoring 3 230kV circuits) is 1.5 times the generating capacity. I wasn't sure about this particular station, but with a bit of digging, it seems like the Massena-Adirondack lines alone (there are several others) can carry 900MW, which is more than the capacity of the power station. So no additional lines should be needed.
All of these are about as apples to oranges in relation to geographic ties to Massena as you can get.
Between Massena and those places is a whole lot of nothing for a couple hours.
That's like saying there is some meaningful geographic tie between Bethlehem, PA and NYC (133km), or that "Unity House, PA" is not remote because it's 143km away from NYC and its 8.4mil residents.
Plattsburgh went over its power allotment and was forced to purchase electricity on the open market for far higher prices. This cost was distributed among the city’s residents, some of whom ended up paying between $100 and $200 more for their electricity than usual.
https://www.vice.com/en/article/8xk4qv/bitcoin-ban-plattsbur...
Massena (near the Alcoa facility) this year issued a moratorium so the city could draw up new regulations:
“The moratorium is a pretty straightforward procedure. The language is relatively clear. The idea is that we place a moratorium on any further cryptocurrency mining development while we get some regulations in place that will govern those types of facilities. The planning board had indicated, and I agreed that the code lacked any real regulatory scheme for these types of facilities within the town,” Mr. Gustafson said.
https://www.nny360.com/communitynews/business/town-of-massen...
https://www.northcountrynow.com/letters/snake-oil-alert-bloc...
https://www.northcountrynow.com/news/massena-town-board-plan...
The other aspect to consider, which is being dropped, is Coinmint operates with support from NYS via Empire State Development, so there's that.
The electricity may be cheaper next to that hydro station because you're not also paying for the 1000km transmission line. But your use of that electricity would preclude the people 1000km away from using it.
It's not perfectly fungible, but nothing in the real world is, everything has some sort of shipping costs. I can't think of anything more fungible than electricity except for virtual items like dollars.
They really want low, consistent prices for electricity. Hydro gives them that but nuclear could also. Solar and wind do not.
Any volunteers for living in the exclusion zones?
(If you were sarcastically implying that no one would volunteer, you are mistaken. I encourage making your point more clearly and with less sarcasm, since a worthwhile discussion is possible if you do so.)
The sarcasm came from the crypto part. The idea that swaths of US land would be devalued for the latest crypto pump and dump project makes me laugh and die inside.
I mean Solana is actually pretty cool. But all other crypto projects of which I am aware do not add value to our species as a whole. So adding nuclear power to the mix, for which the total cost of ownership is not even calculable? Just wow.
So what you're really saying between the lines, is that nuclear power will lead to affordable housing?
I really don't want those same kinds of people running nuclear reactors so I can read about how crypto scheme X literally blew up.
I still disagree with the types of people that run crypto and are ideologically opposed to any kind of common sense regulation being let anywhere near nuclear power.
Here's [1] what happened when those people got something comparatively harmless like a cruise ship. I really don't think it sets a good precedent.
[1] https://www.theguardian.com/news/2021/sep/07/disastrous-voya...
This seems strictly worse than just taxing "mined" bitcoins more harshly.
Your comment is very true for Bitcoin and other PoW tokens but that will soon be in the rearview mirror as more and more coins either come out as PoS (proof of stake) or migrate to it (in the case of Ethereum), even Bitcoin is taking about migrating to a PoS model.
Crypto will evolve past this.
The best evidence for this is that PoS hasn't happened despite years of talk about it.
At this point PoS is quite prevalent among modern blockchains (Cosmos, Solana, NEAR, Algorand, Polygon, Cardano, ...). As far as I know, there have been no successful attacks based on PoS's theoretical weaknesses, like its reliance on weak subjectivity. Some PoS networks like NXT have been in production for nearly a decade now. Isn't that fairly strong evidence that PoS works fine in practice?
A few years ago, I saw a Hybrid PoS/Work chain (a satoshi-client derivative coin) being attacked in real time, and totally hijacked. Ultimately it was a bug in the PoS logic that enabled it. I am very apprehensive about PoS even providing a fragment of the security. Chain takeovers are a real threat in PoS world. The attacker needs very little physical resources -- just know the right stakeholders. PoW need resources. PoW is trivial to verify and test. PoS advocates like to gloss over all the real world failures.
You may notice that during the China ban, Bitcoin worked pretty much as expected (with some slight block delays until difficulty adjusted). PoW works.
The other metric to observe is how many chain reorg's occur due to PoS. This is practically a non-event in large PoW chains like Bitcoin, today. In Turing complete chains like EVM chains, it might not be possible to reorder transactions with no-loss during reorgs as transactions are state dependent. PoS potentially destroys finality.
Do you mean [1]? It sounds like the consensus issues there were related to Solana's unusual PoH model. Validators being "unable to process all the proposed forks" would never happen in a BFT PoS model, like Tendermint etc, since forks cannot occur (under a 2/3 honesty assumption).
> Ultimately it was a bug in the PoS logic that enabled it.
To state the obvious, PoW chains can have bugs too. It sounds like you were just looking at a niche project that didn't have high standards for engineering and audits.
> PoS advocates like to gloss over all the real world failures.
PoS and PoW chains have both had plenty of incidents, but you haven't really pointed out any PoS incidents that were caused by weaknesses inherent in the PoS security model.
> Bitcoin worked pretty much as expected
Bitcoin has been around the longest, has a relatively small feature set, and rarely changes. One would expect such a chain to be very stable regardless of PoW/PoS.
> The other metric to observe is how many chain reorg's occur due to PoS.
Reorgs can't occur in BFT PoS chains (under a 2/3 honesty assumption).
[1] https://solana.com/news/9-14-network-outage-initial-overview
Contrasting: https://etherscan.io/blocks_forked and https://polygonscan.com/blocks_forked it would appear that indeed PoS BFT chains like Polygon can and do reorg, very regularly.
However, your comment is a bit short-sighted and doesn't account for the switch of Proof-of-Work to Proof-of-Stake algorithms that is currently happening. PoS use A LOT less power and doesn't need extensive mining farms. See also: https://blog.ethereum.org/2021/05/18/country-power-no-more/
The only remaining question is: are we going to transition away from bitcoin, the largest PoW bastion, or not ? Probably, yes.
In the future I expect all PoW cryptocurrencies to be banned, or severely hobbled, because of their electricity usage and e-waste. I have a long bet on ETH specifically because of its eventual move to PoS. Bitcoin doesn't even have a plan, and when the legal landscape changes it will be in the worst position to pivot.
We'll just have to see what the future holds. But I got my money down.
Even if it is, they would need to break my fingers to prevent me running a Bitcoin node. And I will get the blocks via Satellite. If there was a credible threat, we would go somewhere it is not.
If your economic thesis is based on hoping the government bans something, why are you even playing with state-resistant decentralized monetary systems?
Why can't it be banned? It's wasteful and closer to a Ponzi scheme than an actual currency.
> Even if it is, they would need to break my fingers to prevent me running a Bitcoin node. And I will get the blocks via Satellite. If there was a credible threat, we would go somewhere it is not.
That could be hard if many of the worthwhile places ban it :-)
> If your economic thesis is based on hoping the government bans something, why are you even playing with state-resistant decentralized monetary systems?
Most people in crypto are in it for the money, not for idealism.
What does Ban even mean? That it is illegal to run in places like the US? Very unlikely, and as more institutional money flows into it, it grows more unlikely. Some places are starting to put 401k/pension funds into it. Some places are raising it as legal tender. There is also that 1st amendment thing.
So will it banned like drinking straws? (which are still available) Or banned like drugs? (which are still available).
I feel you WANT it to be banned because it tickles your authoritarian tendencies. I am glad we live in a world, at least today, where your wishes are ignored.
https://www.eff.org/deeplinks/2015/04/remembering-case-estab...
There is an argument to be made that running software that speaks a protocol is an extension of speech.
The mental position that wants to ban cryptocurrency is the same one that that wanted to ban/suppress cryptography in the 90s.
Because I want to make money? I don't see why that matters.
If you still want to use it then, enjoy.
Ethereum shall also lower the block reward, lower the fees, and make more people hold on to their ETH to get the staking reward.
Why would the price tank? Also ETH is already at 1/2th the "market cap" of Bitcoin, so a takeover is definitely not unthinkable.
(i mean proof-of-stake, not the alternative inflammatory PoS)
Whenever you sell it, if you generated a profit on that sale, you are going to pay taxes on it (at least in the US).
That's a real value for society. Can it ever be enough to offset the added squeeze on the electricity grid (which we really don't need right now, with EVs coming on and our grid in serious need of upgrade/expansion)? Someone will have to do the math on that.
If you buy and hold cryptocurrency, at no time will it produce "dividends" in fiat currency, or physical objects like cell phones.
So if you make money by selling some cryptocoin, that is _entirely_ because someone else purchased it at a greater price than you did.
Their expectation is that someone else will later buy it at a greater price from them, and that person will be buying it on the hope that someone will pay yet more again.
No actual cashflows appear anywhere in this process.
What happens when there isn't a new Greater Fool?
Why it has to be physical? One could use cryptocurrencies to pay for virtual things on virtual internet, which are nevertheless thought to be meaningful.
Like, fiat currencies exist as a way of paying taxes to your government and also you can exchange them for goods and services.
[1] https://www.nasdaq.com/articles/kazakhstan-rations-power-aft...
Plus producing solar farms is harmful to the environment, as is running them.
Unless you actually use solar farms for something useful, you know, replacing stuff with a higher negative environmental impact.
Building your own power grid for crypto speculation is kind of the textbook definition of greed and selfishness.
In what way are resources limited?
You can see the process flow from raw materials to completed PV modules here:
Photovoltaic cells and the materials to use them _are_ limited and the amount of power produced by solar today is _very_ limited.
> not until we're a K2 civilization anyway
People should read less science-fiction and look at the actual world as it exists today.
How's that for pragmatics?
It's limited today. In 10 years it can change many things for people (very possibly in areas that are not even close to crypto).
Going to space had hardly any utility, going to Mars even less. But on the way there will a TON of progress and discoveries made that will be used in medicine, manufacturing etc.
Let's ban all resource intensive crypto-currencies.
If they're so good for society, surely they can be lean, too?
Can you suggest some ways my life might be different in ten years thanks to cryptocurrency?
Making crypto more efficient wouldn't make it use less electricity, it would just increase the number of miners. And you'd be a fool not to do that because only one node becomes part of the chain and the more you mine, the greater your chances you get that golden ticket.
Crypto will always try to get power usage as close to 100% as possible from every possible source. We never get off of fossil fuels unless crypto stops being a thing.
And not to mention, being at capacity all the time is a bad thing. In something you want available all the time, you want a lot of potential capacity in case of failures or demand spikes.
Hydro is also interesting because it has to output power. When the reservoir gets above a certain level water has to be let out because dams can't handle overflow. That's achieved by diverting water to a stream without a turbine.
Believe you have your NY State river valleys swapped. There's not much mining downstate. Most of the the mining in NYS is up in the North Country and pulling excess power of the St. Lawrence River and a dam up there that supplies a fair bit of power to NYS/Canada/surrounding region. There was a study from Wharton recently on the impacts of power prices as a result.
And never let any of those get-rich-quick pyramid scheme shills get away without forcing them to openly admit that even though they're burning coal, wasting electricity, destroying the environment, causing climate change, cancer, and heart disease, they simply don't give a flying fuck about that.
https://en.wikipedia.org/wiki/Energy_in_Kazakhstan#Electrici...
>In 2013, the country produced 93.76 billion kWH - 70 billion kWh (81%) from coal, 8 from gas and 8 from hydro. The country has 71 power stations, including 5 hydro power plants located on the Irtysh river, which translates to total installed generating capacity of 19.6 GW. 75 percent of electricity generated is consumed by industry, 11 percent by households, 2 percent by transportation.[25]
We need computers for a lot of solid, real life uses.
We don't need cryptocurrencies for almost anything being peddled. They're supposed to be decentralized, but you can't really use them that way in 99% of situations. They're supposed to be currencies and instead they're vehicles for speculation. Etc.
I think their slogan should be: "You don't really need cryptocurrencies for that".
For crypto speculation is <<the market>>.
0: https://hbr.org/2021/05/how-much-energy-does-bitcoin-actuall...
At this point in time, there is no reason to care about this. Maybe we start caring if some insane development happens and BTC suddenly starts representing 10-20% of our energy consumption. Until then, there are bigger problems to worry about.
We already have the technology and the land area.
The ability to tile a land area the size of a smaller American city with relatively bad solar panels to power half a percent of the world's energy usage is pretty amazing.
I'm guessing since there are no hypocrites in crypto you are all using non-fiat "coins" to pay your bills and buy groceries, right?
Cryptokitties run on Ethereum and Ethereum is already partially using PoS. Now from day one people have said "PoW does not work" and yet PoW, so far, is still working. People are now saying "PoS does not work" and yet, so far, PoS is working.
The cryptocurrencies haters better come up with something else than the "energy" argument against cryptocurrencies because the shift to PoS is coming and it's coming fast.
Like they said, it's already here. The only thing that's left is to end PoW which will happen within the next ~5 months.
Energy usage is highly correlated with economic development, trying to curtail energy usage is akin to economic suicide. What you should be advocating for is clean energy production, not consumption. You're headed down a precarious slope if you start policing how and on what people can use energy.
Beyond that, we can and will eventually force Amazon to use EVs if they don't by themselves to save money, which is possible.
I'm all for strongly inducing people to use trains, buses, ebikes, and the like.
We can advocate for clean energy, and we should. But advocating against zero-sum energy usage is perfectly fine and completely consistent with good economic policy.
The internet never used all that much energy. The computers were there anyways, and when it was in its speculative stage it was piggy-backing off the telephone network for most of the actual transmission. It was never even close to a power hog until it became very evident how useful it was.
Cryptos = suck that energy out of the power grid to gamble with one another.
Computers also generate heat. Wish I could use cryptocurrency miners for my heating needs. Why burn fuel or pass current through resistances for that?
4+ kWh electric showers are ubiquitous in my country. Literally a dumb piece of metal resistance immersed in water. Anything is better than the current situation. What if it was a processor instead?
What if a bunch of home servers could heat up stored water through their heat instead of just dissipating that energy uselessly into the air?
We'd be getting the heat we need and we'd be helping build a decentralized cash network. We were gonna spend energy heating up stuff anyway. Might as well get some cryptocurrency out of that heat.
https://qarnot.com/en/heating-water/
Not sure if it's even available outside Europe. I wonder if it's possible to somehow replicate this with a home server. How is it pumping the heat out of the components and into the water system?
Crypto mining hardware is >100% efficient, as it's exactly as efficient as an electric heater, but also generates revenue. Over time, others make more efficient crypto mining hardware, reducing the yield from yours. This causes your "efficiency" to gradually reduce down to 100%, but no lower.
However, nowadays we have heat pumps, which are also more efficient than our 100% benchmark, and produce additional useful heat.
It also makes the hardware depreciate (simply with the passage of time, but also because of the particular usage), which in practice effects the balance and can easily turn the monetary efficiency into negative.
A heat pump is more than twice as efficient as direct heat.
For a resistive heater, its taking 1 energy unit from the wall and putting 1 energy unit into the air.
A heat pump will use one unit of energy from the wall to take 3-5 units of energy from one side of the system and dump that 3-5 units of energy to the other side of the system.
I have a lot of solar panels in my home. I'm generating more energy than I'm using. I don't consider efficiency to be a significant concern at the moment.
I also produce a surplus and I sell it (for more than the local utility charges to boot). More efficiency is more money in my pocket, is it not for you?
> More efficiency is more money in my pocket, is it not for you?
Unfortunately, it isn't. I also inject surplus energy into the local power distribution network. In my country, I don't actually get paid for that. They give me "kWh credits" that I'm supposed to spend whenever I generare less energy than I consume. These credits will expire if unused, I can't accumulate them.
So it is simply not viable for any home or business to generate more power than they consume. I have space for more solar panels but I'd be giving the power companies free energy if I installed them.
Cryprocurrency is the perfect solution for my problem. Instead of giving them my energy surplus, I sink it into my computers instead so they can mine cryptocurrency. If the waste heat could be reused somehow, it would be even better...
I have not recently done the math, but I'm pretty sure in my area its still more economically efficient to heat my home with natural gas than resistive heat. Obviously, emissions are a concern, future price uncertainty of fossil fuels, etc. Not the best way forward.
However, heat pumps in my area can make a ton of sense. They're far more efficient than resistive heating as long as it doesn't get practically arctic cold outside. When in decent climates they're about as economically efficient than a gas furnace.
In other words, mining crypto for heat isn't necessarily the most economical thing to do. It may just be better for you to use a heat pump and put your savings into buying crypto if ultimately having crypto and being warm is your goal.
What calculations are these? How do I figure out if it's worth it?
Electric heat is 100% efficient. Natural gas is anywhere between 80-97% efficient depending on your model of furnace. Convert therms of gas[0] and kWh[1] to BTUs, and multiply by efficiency and price to determine which is cheapest[2]. Usually natural gas wins.
For emissions it’s more complicated. You need to look up the energy source for your grid[3], it will vary a bit seasonally, and factor in transmission losses for electric heat. You can then calculate the emissions per BTU of natural gas heat vs. the emissions of the grid to give you a BTU of electric heat. For most grids, natural gas still wins.
Where this gets complicated is if you use a heat pump, either a “mini split” (common in Europe and some new apartments) or a ground source (“geothermal”) heat pump. These have a seasonally adjusted efficiency rating[4], usually between 2 and 4. This means per unit of electrical energy the unit is moving 2-4 units of heat (depending on model and exterior conditions). You can take the electric heating number from above and divide by this number to figure out the cost and emissions for a heat pump. Usually a heat pump will win on emissions and lose on price (including installation costs) because natural gas is very very cheap.
0 - A “therm” of gas is the traditional measuring and billing unit of natural gas in the United States, it’s equivalent to roughly 100,000 BTUs. Your bill will probably be in therms, but cubic feet are trivially convertible to BTUs too.
1 - 1 kWh is 3,412 BTUs
2 - You can either compare per BTU costs, or your estimated monthly cost based on your heating need. The latter is important if you have tiered or seasonal electricity pricing. To figure this out take a sample monthly gas bill from winter, subtract your summer gas bill (if you have gas hot water) and use the calculations above to determine your heating needs in BTUs. This lets you calculate your electricity needs in kWh and therefore costs.
3 - It’s important that this is a seasonally correct. Most grids get dirtier as more polluting and less efficient power plants are turned on for summer AC, often coal power plants in most regions. Therefore the emissions per kWh will vary on a month by month basis for a given grid.
4 - If we’re being very precise, a non seasonally adjusted number would be best here. An air sourde Heat pump will struggle to extract heat from very cold exterior air, reducing its efficiency. A ground source one will be more efficient, given that ground water is warmer than the air typically.
On a somewhat recent decently high gas usage month that emulated a cold winter (forgot to turn off the pool heater from spa mode on the whole pool circulation mode for a few days...oof) my $/CCF (Centi-Cubic Foot) was 1.22. Converting $/CCF to $/MMBTU, divide by 1.037 to get ~$1.176/MMBTU.
Electricity is usually billed at kWh pricing. 1MMBTU = ~293kWh. I pay ~$0.086/kWh, so 293 * .086 = $25.198/MMBTU.
Obviously, you're not getting 100% efficiency with the natural gas furnace. I think the one I have in my attic which is almost a decade old is rated at like 85% efficient. 90% efficient furnaces are available, some of them don't even require a metal chimney as the resulting air isn't even that hot.
But even at only 85% efficiency, you're still taking more than 10x less dollars per heat.
This math changes when thinking about buying new equipment and other factors. I haven't looked at equipment pricing so it would be hard for me to say how expensive it would be compared to alternatives. This can also vary a good bit from your local market. Energy is stupid cheap in my area, natural gas is a good bit cheaper here than a good chunk of the US while electricity prices are about median, maybe a bit lower.
Realistically? Cost. If your goal is to heat a space, it's much cheaper and more reliable to NOT use thousands of dollars of silicon. Doing calculations based on the site below, you might be able to heat a smallish bedroom with a very beefy PC. I can get a space heater that puts out that much heat for less than $50 and is far less likely to stop working (e.g. heatsink gets clogged and system overheats).
https://www.stelpro.com/en/expert-advices/calculating-the-ri...
Unless your office is the size of a closet, that doesn't sound like it's enough to provide all of its heating needs (at least according to the formula of the website I linked).
It's certainly practical to provide to exploit heat generated by computers to partially heat a space, but I don't think it's practical to use silicon as the main heat source.
[0] https://www.technologyreview.com/2011/03/30/196054/using-hea...
[0]https://www.youtube.com/watch?v=uLO73bbIJtU
The premise was to only operate the miner in cold months, when the outside air could easily cool the system. I didn't fully re-watch this video but it does give a good setup and explanation for it.
Edit: Looks like matheusmoreira below doesn’t understand a 500w electric heater and a 500w crypto miner produce the same amount of heat and use the same amount of electricity.
Not to mention how much precious time cryptocurrency shills waste, and dangerous greenhouse gasses they produce from all the hot air of their rancid breath, by droning on and on and on about cryptocurrency all the time, parroting all the lies they heard in youtube get-rich-quick pyramid scheme videos.
Another shill in this thread just mindlessly repeated the same old lie they parrot all the time:
>Crypto helps accelerate the growth, demand, and build-out of renewable energy.
That's like saying using more Cocaine helps you quit using Cocaine faster.
"Cocaine makes me feel like a new man. And he wants some too!"
In an unfortunate and unintended way, it's true...
And the absurd idea of using a crypto rig as a space heater has already been completely debunked in this thread. Go back and read it.
If it's such a great idea, then why doesn't everybody already have one or a hundred of them, huh?
matheusmoreira: Do you really believe in get-rich-quick schemes and perpetual motion devices and miracle cures, even when you can't seem to find any for sale that actually work? Then you must not believe in the free market, either. Is it easier to believe there's a huge well organized conspiracy suppressing these technologies, instead of simply the laws of physics and economics?
Go back and read astoor's comment again, which trixie_'s fancifully wishful reply simply doesn't refute. But of course you can't argue facts with a true believer.
https://news.ycombinator.com/item?id=29095560
>Theoretically if every space heater right now was also a crypto miner, it would make any dedicated mining operation completely unprofitable.
If your grandmother had wheels, then she'd be a bicycle.
https://www.urbandictionary.com/define.php?term=If%20my%20gr...
>Sir, this is a casino. Please direct your anger towards Wall Street.
POS = Proof of Shock:
Sir, this is a casino. Please direct your anger towards Wall Street.
Theoretically if every space heater right now was also a crypto miner, it would make any dedicated mining operation completely unprofitable.
> More like Proof-Of-Waste, both of precious electricity, and of precious rare earth elements and other materials.
Is it really a waste if the heat produced is useful?
> idea of using a crypto rig as a space heater has already been completely debunked
Where? I've read detailed posts describing that it probably wouldn't be as efficient as other heat transfer methods. Doesn't mean it is "debunked". I'm convinced it could work in certain circumstances, such as availability of free energy in the form of solar power.
> If it's such a great idea, then why doesn't everybody already have one or a hundred of them, huh?
I don't know. I've been wondering for a while. That's why I started a discussion. Maybe the idea is too new or there aren't consumer products in the market that make it easy for people to do it.
- They're much more expensive than normal heaters, and the returns on mining don't make it cost effective.
- If you've spent that much money on heaters/miners, you're going to want to max them out 24/7 before they become obsolete rather than just switch them on when its cold, which defeats the point.
- They'll also need to be upgraded every 6-12 months to keep up with the mining arms race, and no-one wants to have to replace their super-expensive heating system that often.
All crypto currencies are used for gambling?
Can you give us a good solution to hedge against government induced inflation that does not involve usury or having enough cash to purchase property outright to rent it out? Note: almost all companies deal with interest in some way or another, even if they don't need to, so usury is embedded in their stocks.
Oh right, I'm dealing with someone who believes in the "free market" while plugging their ears when people talk about subsidies for the gas, meat, defense, and other "profitable" industries.
I don't believe in absolute free market as defined by capitalism. Case in point: I do not deal with interest (usury), as it is prohibited in my faith. There are also some other red lines which I will not get into here, as it is not the subject of discussion. I'm happy to go into them more though if someone is curious. As such, no, it is not your typical capitalistic position.
> Can you give us a good solution to keep the price of bread from rising above the ability for impoverished people to purchase it over government induced inflation?
Yes. In Islam, we have something called Zakat, a form of "wealth tax" if you will. Its proceedings go to impoverished people, among others. It has been documented that in Iraq during the Ummayad period, there were no poor people left to even accept Zakat, after everyone was paying their share.
Of course we still need to handle the root cause: move to a currency that is not bound to interest that keeps growing, and the government can print money at will, devaluing everyone's hard work in an instant.
Interest, in traditional western societies is just the measure of the present value of future time, which is understood as valuable. Thus, money+time=“more money”.
In Islam, there is no difference. If I lend you $10,000 and I ask for $10,000.01 back, that $.01 is usury. They are equal because both operate on the same exploitation principle, that not only pries on the poor, but exacerbates the wealth inequality gap that everyone is complaining about today. Once the door is open to artificially differentiate the two, many other immoral things become acceptable. We've seen it time and time again.
We don't deny the time value of money, we jus say that use money in a moral way to extract value over time, by taking appropriate risk in a manner that is not exploitative.
I've been reading on islamic banking recently, and I have to say that it appears one can arrive at a consistent philosophy and working economics with usury being prohibited. The world won't grind to a halt because capital is no longer entitled to gains by the virtue of purely existing, as opposed to being used productively. (Observe PoS vs PoW parallels, in the theme of this submission.)
You can lend money and earn a profit without interest, and you can pay for getting a credit without it being immoral. The trick is that both parties share both the gains and the risk, not just the lender being responsible for all the risk.
Note however, that this does not affect Islam one bit. True and honest scholars will always call out such actions, and they have been.
That being said, yes, at the core, true Islamic finance is about true and proper risk sharing, and reward sharing. Want to open a business? Get someone, or a group of people to fund you. They put in the money and you put in the risk. If it succeeds, you both share the rewards, if it doesn't, you lost the time and effort, and they lost the money. This is a very straight forward example.
Under Islamic law, lending money is only to be done as a purely charitable act, as the lender cannot benefit from the loan - either monetarily or in a non-tangential manner even. The general ruling is as follows: any loan that brings a benefit to the lender is Riba (can be loosely translated as usury). Riba involves more than the usury or interest that are done today by banks, it also includes things like buying gold on credit (Riba), or exchanging silver for silver of non equal amounts (also Riba).
People seemed to think I was questioning the soundness of the algorithm, but that’s not what concerns me. I was talking about the concept of bitcoin itself.
What I’m concerned with is what if the true point of this thing we have been led to call “bitcoin” is to destabilize countries. What if it’s a new type of nation-state attack, or virus, that we haven’t seen before. Something we don’t yet have a word for. Something that takes advantage of a country’s citizens’ greed while doing things like disrupting power grids and causing countries to be worse off than they would be without bitcoin.
It’s like finding food someone left on your doorstep and eating it without being worried someone is trying to poison you.
Most people that are supporters of bitcoin are driven by pure greed. What if someone has found a way to weaponize greed?
In my opinion, crypto is largely a ponzi scheme, so rest assured I'm not saying this out of love for bitcoin. But I also don't believe there's some master-mind illuminati behind the scenes orchestrating this intentionally. This is a 100% open and transparent protocol that people are supporting out of fear of existing societal power structure. If you have a good reason to suspect someone of manipulating crypto for some greater purpose, present your evidence and let us evaluate it. But vague paranoia about some puppet master's scheme sounds a bit like crying wolf to me.
We as a society just haven't gotten good at pricing in externalities (eg: carbon emissions) to consumer goods yet. If crypto miners were providing enough societal value to afford the excessive consumption of energy, then I think everyone would be praising crypto as the next industrial revolution -- improving quality of life for everyone! But instead, I think most people recognize it as siphoning value from many for the benefit of a fortunate few.
Human greed is too powerful for us to ignore the negative impacts and it is destined to destroy humanity. I work in a related space so I don't agree but it is interesting to think about.
Allowing people to abandon their currency for another one only used by wealthy people could starve people who do not make enough money to catch up.
Look at the housing market. It has become a store of wealth. And now people can't afford housing and we have a massive unhoused epidemic.
By the same token, people with money, progressive or otherwise, will continue to invest in crypto as it is the highest yielding asset on the market. Kazakhstan became the 2nd largest crypto miner, after the US. It looks like they are balancing the demand for the energy supply between crypto miners and the rest of their customers. This sounds like a very reasonable thing for them to do.
We will see more regulations concerning the crypto currency and I think it's a good thing for the market. The regulations will ensure continuous growth and mainstream acceptance of crypto.
https://www.motor1.com/news/181048/schwarzenegger-shows-elec...
Bitcoin mining reduces the risk for energy generation projects, because they no longer need to worry about who will purchase the extra capacity.
Bitcoin mining can act as a load-balancer for the grid – spin down some machines if there is high demand, spin up machines if there is low demand.
There are so many benefits. It is unfortunate that there is a serious lack of understanding on this website.
Hydro is a perfect example. A sizeable percentage of all Bitcoin mining is done with cheap hydro.
Bitcoin will do the same for nuclear, making it cheap and plentiful.
The components used for mining could have much better use cases and the raw material shortage does not make this easier.
I doubt that mining is the reason why countries/companies/people are pushing for that cheaper green energy.
Additionally, the cryptocurrency market right now is a mess, an online casino one might say, where only few can benefit.
And to push prices up, people are encouraging others to buy them, to push the prices up more and not because they believe in the future.
You people are advocating for shutting down one of the most important human advancements of all time – money that is directly linked to energy.
Maybe sometime, but not right now.
Unless you want to live in a dictatorship where the government dictates what is and isn’t a useful use of energy, the constant bitcoin electricity usage hysteria is a waste of everyone’s energy. :-)
I don't think you can just start your own power plant and/or major consumer without a ton of permits.
[0] https://www.technologyreview.com/2011/03/30/196054/using-hea...
Lower or eliminate any sort of capitol gains taxes on crypto mined with solar, make solar panels tax free for companies that mine crypto, and crypto would not only go up in value but the solar industry would also be supported.
Oh yeah. The Federal Reserve and the central banks need fiat.
Us peasants have to work for the government 4 months a year and even after our take home we eat taxes on purchases, investments and property.
But yeah, let’s give crypto miners the tax breaks surely they deserve it…
As I mentioned to someone else, applying a solution to one particular problem doesn't exclude it from being applied elsewhere.
Maybe lobby to lower taxes then?
Picking winners doesn’t work very well
The core problem of crypto is that despite what its promotors seek in vain to prove, it provides little societal value, while requiring a constant flow of an enormous amount of resources. This doesn't change whether your GPU farm is connected to a coal plant or solar field.
The problem isn't that the relative proportion of renewable energy is too low, but that the consumption of non-renewable energy is too high. It doesn't matter if renewables make up 10% or 90% if that number doesn't mean a large reduction in the consumption of fossile fuels.
I don't know the answer of course otherwise I wouldn't have posed the question but I guess asking questions qualifies for getting downvoted to -3. Some of you are clearly sitting on all the answers but you're not sharing them with the rest of us.
We see the short term results, my question was directed at the long term. I don't think it really matters if it's crypto mining or aluminum melters or any other energy intensive industry, it just happens to be crypto mining in Kazakhstan.
It just seems plausible since higher energy usage correlates with BNP. (I know, I know tax havens are exceptions to that rule.) If mining sticks around then this may turn out well for Kazakhstan, from an economical perspective.
And PoW crypto isn't like aluminium smelting. The value of aluminium smelting isn't in winning an arms race with other aluminium smelters based on how much power they consume, so if you bring more power plants online at a lower-than-average price, market logic doesn't dictate that competing aluminium smelters should immediately seek to buy all that capacity until they've bid the price up to the original level.
The whole "crypto creates demand for innovation in power supply" only makes sense if you believe people haven't been investing in innovation in power supply because there's been barely anybody that wants cheap electricity for the past century or so! That might be the case for [formerly] tiny niches affected by new use cases, like say, lithium batteries suitable for powering vehicles. It isn't the case for Kazakh ability to keep the lights on
The article doesn't mention any of that though. It says that the miners got cut off (rationed) because 3 coal plants were offline. The regulator is stepping in to make sure regular people and industries are prioritized.
> The whole "crypto creates demand for innovation in power supply" only makes sense if you believe people haven't been investing in innovation in power supply because there's been barely anybody that wants cheap electricity for the past century or so! That might be the case for [formerly] tiny niches affected by new use cases, like say, lithium batteries suitable for powering vehicles. It isn't the case for Kazakh ability to keep the lights on
Investments and innovation follow demand so now that demand has risen and assuming demand stays high, what should we expect will happen? This is not unique to crypto, it just happens to be the driving force here. Of course other industries can lead to similar outcomes. If you think this will not lead to innovation and investments, you are basically saying that cryptomining deviates from the norm and you would need to justify this claim.
The regulator has stepped in to ration to avoid cryptominers competing with the Kazakh poor for the electricity that is left over. That sounds like the power supply is less robust to me. (A quick google suggests the power companies are claiming the shutdowns were scheduled but the recent demand spikes weren't part of the plan...)
> Investments and innovation follow demand so now that demand has risen and assuming demand stays high, what should we expect will happen? This is not unique to crypto, it just happens to be the driving force here. Of course other industries can lead to similar outcomes. If you think this will not lead to innovation and investments, you are basically saying that cryptomining deviates from the norm and you would need to justify this claim.
I'm not sure why you're pretending I haven't already observed what's different about POW cryptomining (unlike other industries which tend to increase yields by consuming less energy per unit of output than the competition, miners seeking block rewards maximise yields by consuming more energy, which means they are highly incentivised to consume all increases in energy output at a given price) or indeed why you are claiming that the norm is for increase in demand to result in something becoming cheaper and more widely available (it invariably has the opposite effect in the short term, and usually in the long run too) in an attempt to shift the burden of proof onto me, but doesn't exactly create the impression that you are arguing in good faith.
Think about as providing some form of uncensorsable money, eg for orgs like Wikileakd, Tor Project, etc.
If its a useless speculative asset with no purpose other than as a ponzi scheme then yes, all energy used towards it is a huge waste and needs to be eradicated immediately.
If it has the potential to allow people to save their wealth under unstable regimes, as a long term hedge against inflation, as away of getting people to save more instead of spending every penny they have before it depreciates, to cause real wages to rise again, to encourage actual economic productivity rather than continually investing fake printed currency into an endless series of economic bubbles producing significantly more environmental damage than anything that could occur as a result of bitcoin mining.... then it is not waste.
Capitalism is not the cookie cutter solution to all problems.
What about solar? Wind?
The point of that real-time example? Wind and solar are great, but they take time and the infrastructure is not yet there. Nuclear is arguably cleaner and cheaper for the output in the long term. Of course, infrastructure for nuclear isn't there in Kazakhstan yet either.
"Let market sort itself" only works if government thinks about it in advance, have fair elections, low corruption, etc.
Cost of natural gas / coal / oil is going up significantly and is a huge problem for all of Europe (not just Eastern) at the moment. A lot of Eastern Europe will have rolling blackouts and need to buy power from Russia / Belarus. Kazakhstan is in the same boat in that regard. I would venture that they are probably still on the USSR power grid as well and can buy easily from Russia / Belarus.
An better example would be Venezuela, with the largest oil reserves on Earth, they subsidised energy costs to an extreme extent and it was one of the things that drove them into the ground.
People seem to dislike my comment above, yet no one seems to be arguing for petrol to cost ten cents a litre. Why not subsidise fuel if doing such things has such a successful history in the United States?
For example, many EU countries have decided to enact policies that knowingly lead to high prices for motor vehicle petroleum, but this was decided to be acceptable because alternatives like public transportation exist, and are in many cases, preferable. Energy used to heat someone’s home is different in impact.
Venezuela’s economic issues are not a result of subsidies of petroleum for domestic use.
> Why not subsidise fuel if doing such things has such a successful history in the United States?
We do.
They seem to mean price controls for a limited number of essential goods and services, to ensure access to them for the least fortunate groups. Energy definitely seems to be part of this even in the most market-oriented societies.
One can look at cheap fossil fuels, and the unwillingness of Western governments to make them more expensive by integrating their negative pollution externalities into their consumer cost, as a sort of ad-hoc price control. Lots of social protests over living standards were triggered by increases in energy costs - the Gilets Jaunes in France for example.
They would've gone bankrupt if they didn't do it with their weather (-40<C°)
Imaging the hubris required to even suggest that an essential input to daily life should have its price affected by an almost completely useless financial hedge for the elites.
https://en.wikipedia.org/wiki/East_India_Company#Indian_Rebe...
I thought that was a good thing to have in your country, but apparently because this is crypto it is suddenly a bad thing?
A crypto operation might provide a small fraction of everything above while also producing nothing of tangible value to society.
I’m not an economist, so I doubt my understanding is either deep or broad enough to make a proper critique in Kazakhstan’s case.
How does that work?
/s
This doesn't seem complicated tbh and I'm actually struggling to understand why you wouldn't get this if you generally understand net imports/exports.
Coin mining doesn't fit / necessarily that pattern at all.
In the meantime they have power shortages so I'm not sure at all what you're thinking about here... your idea of cheap power is pretty meaningless when there's a shortage.
Article implies a lot have moved from China.
> presumably they are spending the majority of these gains in-country
Unevidenced assumption, that they are even spending the gains at all - it's crypto, after all.
> or are paying taxes on the proceeds
Unevidenced assumption, probably false for crypto libertarians.
You cannot run a mine bigger than what your wiring can support in your apartment.
None of them is using the subsidised residential rate.
That said, Kazakhstan may subsidize their power, I don’t know.
Oh wait. That's exactly what "cost" is.
Electricity is a finite resource.
The locals couldn't afford the "cost".
I'll let you put 2 and 2 together for the rest.
> The locals couldn't afford the "cost".
That sounds like one of the many soviet famines, which happened exactly because there wasn't an open and free market for said food.
In this example it prioritizes made-up computer money for already rich people over a Kazakh citizen having heating or being able to refrigerate food.
It's a terrible mechanism for most things.
USA regained the firm lead after a few months when bigger Chinese mines moved there.
This is wrong. Multiple currencies use proof-of-stake and still have value. Price is determined by demand and supply.
Are they Bitcoin valuable? Are they as valuable as proof of work? I think not.
> Price is determined by demand and supply.
So the supply is lower because it's harder to mine so the price goes up and because the price is going up demand is higher. It's kinda like diamonds. Pretty useless but because the big companies hoarde all the diamonds they keep the price high and because the price is high people put value in them.
A challenge might be in effective tax collection, but it isn't that hard to find heavy electricity consumers.