Obviously, the price of bitcoin over those two years would be very important to your income and assuming a price of 60k (where it was a few months ago) would result in a very different outcome than the same calculation with the current price of 30k. Bitcoin has been very volatile since basically forever, so it is very difficult to predict of your scheme would be profitable.
https://balkaninsight.com/2021/05/12/in-north-kosovo-mining-...
https://bankwatch.org/beyond-fossil-fuels/the-energy-sector-...
No it wouldn't. The electricity cost is a factor, but it's not that significant compared to the capital cost of the equipment, the price of which fluctuates depending on the expected profit.
You can also see this with GPUs, but it's far more pronounced with Bitcoin mining hardware which has no other use.
You will find that it's not possible to actually order stuff from bitmain when mining is profitable at their list prices.
It's almost as if they just run the machines themselves when it's profitable, and deliver orders when that is more profitable than using them.
So there is effectively a "spot" price for the machines where sellers who have inventory try to extract as much value as they can. Thus, the capital cost is more significant than electrical. (Obviously within reason, but paying 5 cents or 10 cents per kw/h is less relevant than capital cost)
I should say though, after the 2018 crash S9s could be had in bulk for $100 each, where they were selling for over $3000 only months earlier. So maybe the flood of these out there makes my experience outdated.
The catch was that the companies took the feed-in tariff (the government subsidy for generating renewable electricity), and that you needed to commit to having the panels on your house for a minimum number of years (making it unviable if you rented, or planned to move in a few years).
In the mid-2010s the UK changed how the subsidies worked, changing from the feed-in scheme where you were paid per unit of electricity generated (regardless of if you consumed that energy or sent it back to the electricity grid) to the Smart Export Guarantee, where you are only paid for the electricity that you sent back to the grid. According to Wikipedia [0] this caused many of the companies operating the "free solar panels" schemes to go out of business.
[0] https://en.wikipedia.org/wiki/Feed-in_tariffs_in_the_United_...
The reason solar panel manufacturers don't go into the power generation business is because building a solar plant is a political problem, while building solar panels is a technological problem. It's not their core expertise.
[1] In locations that need more electricity, have regulators that will favor you over coal-burning and gas-burning incumbents, and where you can deal with the NIMBYs.
[2] It should be obvious when you consider that economies of scale mean that utility solar will always be cheaper than rooftop solar for on-grid homes.
Not really. Panel lifetimes are measured in decades and the break-even point is usually around a decade, less if daytime utility power is expensive. They're not high volume money printers but they'll eventually pay for themselves (including their carbon usage during production).
Solar works mathematically because the Sun is constantly bombarding the Earth with energy. Rooftop solar increases the efficiency of otherwise wasted acreage of rooftops of buildings. Not only can they offset energy use of the stuff inside the building but the rooftop shade is that much less cooling needed for the building.
My point is that daytime utility power that comes from a solar farm will always be cheaper then rooftop solar. Because it takes a lot less labor to deploy solar at utility-scale, than to bolt it to your roof.
The only reason rooftop solar can currently be cost-efficient[1] is if its competing with expensive sources of energy generation. If it has to compete with cheap sources (utility solar), it's not cost-efficient.
[1] Or if you're receiving subsidies for the energy you sell back to the grid.
If you ignore the cost of maintaining the grid between A and B, yes and if you ignore the value of people having storage in their house being able to optimise their in house consumptions to match the solar production, yes (this would be possible with pricing signals but it is not done, also there are slight psychological differences for the user) and if you ignore communities having access to power in case the electricity grid is under attack due to foreign invasion, yes.
If your house is off-grid, and you have to invest tens of thousands of dollars into battery capacity, your economics will look worse then the grid's economics.
Because if batteries were a cost-efficient way to deal with solar's intermittent generation, every utility in the world would be tripping over itself to order batteries by the TWH.
They, uh, aren't.
I also can't optimize my energy usage around the sun. I'm not home when the sun is shining. I don't have an AC. I don't run heat most of the year. I need electricity for lights (Because it's dark), and appliances (which I use when it's dark, because that's when I'm home).
I would a lot of on-site storage to get me through the days when it gets dark before I'm home. This is not cost-efficient. It would be cost-efficient if my entire town could aggregate their generation and usage... At utility scale.
Yes but building new solar causes new grid cost.
> Because if batteries were a cost-efficient way to deal with solar's intermittent generation, every utility in the world would be tripping over itself to order batteries by the TWH.
They are cost efficient in Germany. So i am not to familiar with other countries situation.
> I also can't optimize my energy usage around the sun.
With batteries you could do that more.
Both have a role to play. Another reason for solar is that people rather invest $10000 in their house then $5000 in shares of a grid scale solar installation. So while it might not be capital efficient it unlocks more capital investment for the green transition. From an economic view roof top solar is a jobs program where well paying trade jobs are created all over the country.
How many GWH of capacity have they deployed?
And isn't it the country where a KWH costs 33 cents?
Given that solar produces electricity at ~2 cents per KWH, this seems pretty damning.
[1] Are you sure you're not confusing this with minute-over-minute smoothing, which requires ~two orders of magnitude less battery capacity?
Yes. https://www.vb-bordesholm.de/batteriespeicher.html
> Are you sure you're not confusing this with minute-over-minute smoothing, which requires ~two orders of magnitude less battery capacity?
Yes, Frequenzregelmarkt (minute over minute smoothing) and the normal electricity capacity trades happen in two separate markets in Germany right now. Allowing battery storage to take part in both markets is one of the goals of the current coalition government. Since this happened before that change and the article mentions it being involved supplying a city decoupled from the long distance energy transmission it is legally impossible that this battery installation just did minute over minute smoothing.
> How many GWH of capacity have they deployed?
4,5 GWh [1] out of which 1GWh is grid scale and industrial use.
> And isn't it the country where a KWH costs 33 cents?
For normal consumers, yes. Industrial users have a lot lower rates. A lot of this is taxes and similar stuff too. I found conflicting numbers on the precise details but 9-12ct are the used for producing the energy (including profits and investments of those companies), 8-9ct are used for the network (including profits and investments of those companies). The rest are taxes or other kinds of levys.
[1] https://www.pv-magazine.de/2022/03/15/rekordjahr-im-speicher...
Also, if one company was making the majority of bitcoin ASICs, they'd be at risk of gaining the ability to do a 51% attack, right? Which would reduce confidence in the network I guess.
I don't own any of this stuff because bitcoin seems fundamentally bad for the planet and a pain to manage, but I don't think we should assume these things are necessarily irrational purchases just because we don't like them.
You also need to estimate the Bitcoin price over the next two years.
And you probably need to estimate the bitcoin hash rate over the next two years.
Good luck.
one is the cost of the hardware. 2000$ is not enough for latest generation ASIC miners. It just isn't. You want the latest generation ones. We are probably talking 10k+ for something decent.
The second one is the cost of power. People like to talk shit about the environmental impact of bitcoin and stuff, but the reality is that the bitcoin you mine is worth less than the power you are using in most places around the world. Bitcoin mining is profitable in areas where the cost of power is heavily subsidized (it's free real estate meme) or you can easily generate power yourself (solar, wind, thermal, etc). So, if the cost of power is > value of mined bitcoin, it does not make sense to mine it
The third part is mining pools. You can build all the rigs you want, but the reality is that most bitcoin is mined by mining pools. So you will have to join one of those pools if you want to have a steady guaranteed small income.
So to answer your question: depending where you are for an investment of X this could be profitable (medium/long term) but you need to understand more about the cost of the hardware, cost of power and dynamic of mining pools to actually pull this off (so for a noob, you're better off just buying 2000$ of BTC, holding for 2 years and selling. sorry noob. The wild west era of bitcoin mining is long behind us)
As an analogy, the sticky part of lottery tickets is, people will reliably participate with their own money; others complain; nothing changes as people do it again anyway. Opportunistic planners take advantage of the "I see food" people, make glossy lottery tickets and pay a premium to food store managers to sell those lottery tickets; more people complain.
Can we identify the systems parts in play here, to create enough context to actually decide what is important, what is unstoppable, and what might be a rational, thinking response to all of this going on ?
If you want to make a statement about the nature of bitcoin, I would consider an "equilibrium" situation where:
* The cost of specialized hardware is stable (e.g. what are the economies of scale as t->infinity ?)
* The price of bitcoin in terms of energy (BTC/watt hr) is stable
* Miners are rational actors
It seems to me like the most concerning aspect of cryptocurrency mining is that the hashrate is dependent on externalities like the price of bitcoin, rather than the necessary hashrate to defeat a 51% attack.
What is the mechanism that will make this happen?
But unless you can find free electricity (like at work or school), it usually isn't worth it. You also have to factor in the failure rates at keeping a computer running 24/7 at max cycles.
But in your case you're probably not so much making money from the "free electricity" as reducing the potential loss on the cost of installing and maintaining the system?
Oh, they'll happily accept the power I'm generating... They just won't pay me for it.
> your summertime production doesn't much exceed consumption then you have a big shortfall in the rest of the year
Indeed, that's the case with most homes who invested into solar power. Most of them are planned precisely so they'll generate just enough energy to cover their yearly comsumption.
Mine is set up to generate as much energy as possible. I just installed as many panels as possible.
> Here (Germany) there are limits on what the network will accept so people play elaborate games of trading off battery charging vs selling across the day, with one eye on the weather forecast.
That's interesting, I didn't know that. Everything I've read about the german solar power system made me think it was perfect: you could just generate as much power as you wanted and get paid for it. I had no idea people had to play those games. Why can't the network accept the power?
> But in your case you're probably not so much making money from the "free electricity" as reducing the potential loss on the cost of installing and maintaining the system?
In my case the equipment has already more than paid for itself. I generate more power than I consume almost all year long and my energy bill is almost zero. Maintenance costs have been minimal so far.
When I generate more power than I consume, they give me expiring kWh credits. I don't want these credits to accumulate under any circumstances since I'm already generating surplus at almost all times. So it's in my interest to increase my energy consumption: anything else means giving them energy for free. So I set up a miner.
The network can but it doesn't want to for a variety of reasons.
Solar too. Solar powered miners let you literally monetize the sun.
https://www.epa.gov/greenvehicles/greenhouse-gas-emissions-t...
Go get your mining rig, my dude. The median number of cars in American households is 1.88 so you have lots of room to play.
If you can take advantage of some of those and don't mind that the money isn't being generated so much as taken from other people then it's a great idea.
TL;DR: Just dont.