Bitcoin hashrate drops nearly 40% as deadly U.S. storm unplugs miners
finance.yahoo.com
finance.yahoo.com
40% of latest value (November) would be 116×.4=46 TWh ("estimated") or 78×.4=31 TWh ("minimum"). USA uses 4223 TWh per year (Wikipedia "Electricity sector of the United States", 2018), so Bitcoin uses around 1% of the USA's electricity per year (1.09%, or 0.73% for the minimum value).
The lower value is truly a minimum of minimum, as I understand it, because (1) not everyone will have been unplugged, and (2) the source "minimum TWh" value makes unlikely assumptions about the efficiency of every miner (latest equipment, no overhead).
At "7.09 × 10⁻⁴ metric tons CO2/kWh" in the USA https://www.epa.gov/energy/greenhouse-gases-equivalencies-ca... (709 grams per kWh; 2019) this seems to come out between 22 and 32 million tonnes of CO2 per year, and iirc the average first-world person uses just over ten tons (ten thousand kilograms) per year so this is the equivalent of having an extra 2.2–3.2 million rich people on the planet (just the USA consumption, not Bitcoin's consumption elsewhere or other PoW currencies').
Drive down your street, look at all the businesses with their power on, all running computers. Every home running lights, fans, computers, video games, TVs, etc. then we have industrial manufacturing, etc.
You mean to tell me there’s some people in a warehouse around here with racks of servers running hashes? Just hashes, not a data center. We’d need hundreds of those warehouses to be 1% of the On-grid power. Sorry, I don’t buy it.
I've done it myself also in the past because, like you, I couldn't believe it either (this was around 2018 I'd guess).
It's a fairly simple calculation to take an energy-efficient graphics card and see how many SHA2 hashes per second you can get from that, see its energy consumption (ignore the rest of the computer and connectivity to support the GPU for now), multiply that with the hash rate, et voila you get some ridiculous number (don't remember, but something like half the world's energy consumption). This indicates that all Bitcoin miners are using ASICs. Now the question becomes how efficient a Bitcoin ASIC is, and when you hunt for that number and plug that in, the result is in the same range as what the news has been saying.
Edit: if you want to take a shortcut and use a readymade hashes per gigajoule value from last summer, see figure 1 here https://ccaf.io/cbeci/index/methodology </edit>
It also roughly works out when you look at kWh costs versus Bitcoin profit per consumed kWh, so the figure is not unreasonable. People would be leaving money on the table if their real electricity consumption were lower, because then they could add more equipment and make greater profits. Everything points towards this unbelievable waste to be real, unfortunately.
When you can be profitable running a datacenter without even needing to find customers to pay for your services on actual servers, why wouldn't you just run miners instead?
Clearly the incentive is there for this to be the reality.
It doesn't matter what you see driving down the street. There are widely available stats on how much energy mining takes (based on GPU energy usage, nobody's lying about this, you can run an energy meter yourself) and how much mining is done (verifiable with actual Bitcoin stats, this can't be falsified).
And obviously the warehouses aren't evenly distributed. They're concentrated where costs are cheapest (mainly energy costs).
What does GPU energy usage have to do with Bitcoin? Isn’t it predominantly mined by ASICs? (Though GPU and even CPU is possible, but uneconomical unless someone else is paying the bill...)
But I'll get you started: The estimate I find from various publications, both crypto friendly & otherwise, estimate around 1,500 kwh/bitcoin. Multiple out from there to the ~40% network hashrate capacity in the US and divide by total US kwh output.
Alternatively you can find a bitcoin profit calculator of choice and use its inputs to work backward.
Buy it or not. Your gut feeling doesn't have to correspond to the math, and I'm mostly okay with your gut being wrong (unless you're in a position to make policy decisions or something. Doubtful though...)
Take the network hash rate, the take the latest AntMiner S9's MH/J. Multiply it out. Weep.
That's gonna be your best case too, btw, assuming nothing less efficient is on the network.
[0] https://www.asicminervalue.com/miners/bitmain/antminer-s19-x...
Re the S19: it's not the hash rate that matters, it's the hash rate per unit energy. The S19 consumes 3X as much power as the S9 and yields 10X the hash rate so it's only 3.33X as efficient. Of course efficiency here is purely transitory as old miners are thrown into the rubbish bin and replaced with these new lotto scratching machines - and the network difficulty adjusts to consume the new efficiency.
Why do you think your belief, unsupported by any facts, sources or calculations, has any value?
> Drive down your street,
Can you explain why this is some sort of reasonable way to find data centers? Why would you expect these data centers to be on streets where people live?
IMO average should be ditched and median used instead for personal emissions for a country. Even in reasonably low inequality OECD countries the difference between average and median is substantial as a low percentage of people drive the average high.
I'm too tired to look up the sources but OECD ones can be found from the stated report though a few years old by now.
This is not quite accurate. As the hash rate drops, the next difficulty adjustment will lower the difficulty, and that is what improves profitability. At a given difficulty, it doesn't matter how many other miners join, that just makes blocks arrive faster; it doesn't change the frequency at which a given miner hits the difficulty target, which is what determines their profitability.
The last adjustment was around Dec 19 [1], and the next one is normally 2 weeks after, but with 3/5 of the former hashrate, blocks will arrive 5/3 slower, so it will take longer to adjust to a lower difficulty, in early to mid January.
[1] https://bitinfocharts.com/comparison/bitcoin-difficulty.html...
The Bitcoin chain difficulty is essentially the number of random lottery tickets ‘issued’ for a given block (size of hash space hashes will be generated in).
The first miner to get a winning lottery ticket wins the block rewards. (Each hash being a ‘ticket’). The space is typically insanely large, think 10’s of trillions.
Sometimes that happens really fast, sometimes it takes a long time. The difficulty (number of tickets) adjusts at periodic intervals to keep the average winning frequency at around 5 minutes based on the current quantity of hashing, but the actual win rate varies a lot.
So cutting actual hash power in half (by taking half of miners off line) gives any single miner remaining twice the odds of getting a block reward. But it will likely take twice as long hashing, and the blocks will mine about half the speed of usual (think 10 mins avg instead of 5), unless the difficulty resets.
Think of it like this: if the difficulty is such that there is 1 winning hash out of 1 million possible hashes (oversimplified), and if your hardware calculates 1,000 hashes per second, then your odds of finding a winning hash in 1 second is 1/1,000. Notice how this odds calculation does not take as an input what the other miners are doing.
Of course, after a difficulty readjustment, your odds will actually change; that is the entire purpose of the difficulty target.
(This comment ignores block header propagation etc. affecting mining latency, which will change mining overhead slightly if block times double)
If half the hash rate disappears, your odds do indeed double, as every hash anyone does has the same odds of success, and with has of your competition gone, you now have twice the odds of being the one that gets it. It’s a (approximate to many decimal places) linear relationship.
If you had 1% odds, you’d now have 2% odds in the ‘half the hash power disappears’ situation.
There is no explicit co-ordination regarding blocks mined, and no hashes tried by other miners have any impact on you or your odds, except if they win, as there is no (known) co-ordination between (independent) miners on what has or has not been tried yet - any block which produces a valid next-in-chain value is the 'right' one, and every miner who gets a value which isn't the right one, got a wrong one.
This is not the right way to think about it. Someone else publishing a valid block doesn't deprive you of a reward. You just continue mining on top of their now latest block.
When a miner's hash meets the difficulty target, they have a valid block that they publish, and will collect its reward (except in the unlikely case of another miner finding a valid block at almost exactly the same time). The amount of rewards a miner collects thus depends solely on how often their hashes meet the difficulty target, irrespective of the total hashrate.
The rewards a miner collects do not depend solely on how often their hashes meet the difficulty target. Otherwise, every miner could keep mining prior blocks forever until they got a hash that matched, and collect the reward for that block. But that isn't allowed to happen.
The first miner that gets a block accepted by the network with a valid hash wins. A block can only be mined once, by one miner. Otherwise, transactions would be double spent, or blocks double mined.
Your individual odds of being that miner are directly proportional to the amount of hash power being used to mine the current, most recent block.
The window of time you have (aka the 'time until the lottery drawing') is until someone finds a winning hash to the current block. When there is a conflict/split in the blockchain, the longest/highest chain of blocks wins, and everything on the 'split' chain gets ignored.
The algorithm bitcoin uses to mine is a rather simple one.
1) Collect validated transactions
2) Add the block metadata, such as prior/highest current block (this is what makes it a block chain), this miners metadata (if any), and the block reward address if this block wins.
3) Add/Change the blocks random nonce
4) Construct a block by putting all these together into the binary format.
5) Hash it
6) If the produced output hash has the right number of zeros in it (really) to match the difficulty target, it is a winning block. Publish it, and if the network accepts and builds more blocks on top of it, you can spend your reward. Otherwise, go back to 3.
The difficulty target is partitioning up the bitspace to determine the odds of 'winning' blocks, just like I'm describing using the lottery ticket analogy.
There is no way any miner can change their odds here (or 'try to meet the difficulty target'), unless they collude with others to avoid already tried hashes/nonces for the same exact block values, which they have negative incentive to do.
In fact, independent miners have every incentive to make their opponents try the things they already know won't work.
Removing half the hash power would double the chances (all other things remaining the same) of the remaining hashers winning, as there is now half the number of competitors randomly trying to get a winning hash, as the winning hashes are randomly distributed.
It also doubles the time to find a winning hash, all other things remaining the same, as there is now half the number of players trying random values. (or half the number of random attempts to find the right value).
Unless someone has broken SHA-256, Every active miner has the same odds on any hash attempt to get the winning hash value.
That means everyone has to try every value within that space. And they won't know what value they'll get from hashing until they do the actual hashing (aka do the work).
That's pretty fundamental to the protocol.
Increasing/changing difficulty targets isn't linear in impact, but that's not related to what is being discussed here, as the target itself isn't changing. Just available hashing power.
Which detail?
> The rewards a miner collects do not depend solely on how often their hashes meet the difficulty target. Otherwise, every miner could keep mining prior blocks forever until they got a hash that matched, and collect the reward for that block. But that isn't allowed to happen.
Obviously you have to mine based on the current block. Nobody suggested otherwise.
It doesn't affect your odds of finding blocks because it only takes a fraction of a second to switch to the new one.
> The first miner [...] and everything on the 'split' chain gets ignored.
Nobody suggested otherwise.
> The algorithm bitcoin uses
Yes.
> There is no way any miner can change their odds here
Nobody suggested otherwise.
> (or 'try to meet the difficulty target')
That just means doing hashes and hoping you win.
> Removing half the hash power would double the chances (all other things remaining the same) of the remaining hashers winning, as there is now half the number of competitors randomly trying to get a winning hash, as the winning hashes are randomly distributed.
It changes the percent of blocks a miner wins.
It does not change the number of blocks per hour they win. And that's the only number that matters.
(Both expressed as expected averages, of course.)
> Unless someone [...] Just available hashing power.
Nobody suggested otherwise.
The sibling comment is exactly right. Your odds of mining a specific block are altered, but this doesn't mean much. If everyone else but you disappeared from the network, without a difficulty retarget, your odds of mining the next specific block are 100%. The rate at which you mine these blocks is exactly the same as the rate at which you mine blocks when you represent 1% or 0.1% of the network hashrate.
Example: Fixed difficulty, so 1/1,000,000 hash wins, 1,000 hashes/sec.
a) You are 100% of the network hashrate. Your odds of finding the next block are 100%. After 500 seconds of mining, your odds of having mined 1 block are 50%. After 500 seconds, the network will have produced on average 0.5 blocks (I know, awkward.)
b) You are 1% of the network hashrate. Your odds of finding the next block are 1%. After 500 seconds of mining, your odds of having mined 1 block are 50%. After 500 seconds, the network will have produced on average 50 blocks.
If the OVERALL rate of exploration of the keyspace of valid hashes halves, the remaining half will take twice as long (on average) to find the winning value.
Whoever finds a winning value first stops the contest.
If I am 1% of the networks hashrate, and everyone but me disappears, my odds are indeed 100% of finding the next block - but that's not the right analogy here, because there is always someone else looking, and whoever is the first to find it wins.
The time you could expect that to take, if all but 1% of the hashrate disappears, is going to be 100x of the time (on average) it would take with the original hashrate. Unless it takes so long the difficulty target reduces, of course, and the odds change.
This is done infrequently to avoid someone gaming the system by kicking everyone else off to start being the sole miner with an economic amount of $$ spent.
You got lost at your example b I think because you seem to think that the odds of any particular hash attempt being a win have something to do with current aggregate hashrate (which is what we're discussing changing), but it does not. It only changes the odds of it being a match IN TIME.
With network hash rate being a rate (aka value over time), halving the value, doubles the time to completion on average.
The odds of any specific hash being a win is set by the difficulty target, which is based on HISTORIC AVERAGE hash rate, and only adjusts infrequently. When that is adjusted, it changes the odds. But that is done independently of this whole 'suddenly half the network disappears' event.
It doesn't matter what happens to the rest of the network--- you'll win the same number of blocks per year, whether you're the only miner or one of many miners. You'll win a greater proportion of blocks if there's fewer miners, but the same number overall.
Only difficulty changing changes this.
You will not win the same number of blocks per year, and fundamentally can’t, unless you have the same share of the overall mining hashpower that entire time.
Bitcoin literally could not work if that was not the case.
If your share of the hash power doubles, because your total hashes stayed the same but the overall hash power halved, you’ll ‘win’ twice as many blocks.
Changing difficulty does not change this.
Changing difficulty only changes how much hashpower is required (on average) to mine a block, and indirectly the number of blocks produced over over time, for a given hashpower.
Difficulty changes the odds of any given hash attempt winning. It does not change the odds you will find a winning hash before anyone else does. That is based on your proportion of the overall hash rate.
This is why there is such strong incentive to add more hashpower at lower per-hash price to mine Bitcoin. Because it increases individuals share of the overall hashrate, they end up mining more blocks, and they get more block rewards for it.
Less efficient hashers get less and less share of winning blocks as this happens, until it becomes uneconomic for them to hash at all.
If all miners dropped off (or 99%), blocks won’t keep getting mined every 5 minutes. They’ll take forever to mine until the network adjusts the difficulty, which takes awhile - 2016 blocks, to be precise.
In fact, with a sufficiently high hash rate setting a high difficulty, then dropping to a sufficiently low hash rate right after a difficulty adjustment, it might never adjust back, and it could be years or decades to mine the next block.
Nobody cares about who finds it first.
They care about blocks per hour.
> If all miners dropped off (or 99%), blocks won’t keep getting mined every 5 minutes. They’ll take forever to mine until the network adjusts the difficulty, which takes awhile - 2016 blocks, to be precise.
And until that difficulty changes, the remaining miners will find they still get the same number of blocks per hour. In the time the network used to find 1000 blocks, of which they got 10, the network will now find 10 blocks, and they will get... 10.
Since SHA256 has not yet been broken, it will over time be in proportion to each miners contribution to the overall hash rate. By design.
If someone gets a valid value for a block and gets it in the chain (mines the block) is 100% dependent on if anyone else finds it first and gets it accepted by the network.
As to the rest of it - yikes. Not only is there no mechanism whatsoever that would do what you seem to think happens, but it makes zero sense if you have a cursory idea of how Bitcoin is constructed, or what miners even do.
Good luck, and adios!
They want to find A block.
So two seconds after someone else finds a block, they're working on the next block. They don't care about the event at all. Their expected reward per hash doesn't change at all. Their expected reward per hour doesn't change at all.
Finding a hash "first" is an irrelevant idea, because everyone stops searching for that block instantly, and starts searching for the next block. Roughly zero hashes get wasted.
> As to the rest of it - yikes.
I'm quoting the scenario in your earlier post, you goofus.
> The time you could expect that to take, if all but 1% of the hashrate disappears, is going to be 100x of the time (on average) it would take with the original hashrate. Unless it takes so long the difficulty target reduces, of course, and the odds change.
It takes the remaining miners 100x as long to find blocks.
But they get to keep 100x as many of the found blocks.
So they still get the same reward per hour. Until the difficulty adjusts.
This is basic arithmetic.
> Since SHA256 has not yet been broken, it will over time be in proportion to each miners contribution to the overall hash rate. By design.
In proportion to each miner's contribution, and also in proportion to how many blocks per minute are being found.
If you don't wait for a difficulty update, then removing some amount of miners changes the block-finding rate in exact inverse proportion. So the blocks-per-hour of each miner stays exactly the same.
Remove half the miners, blocks are found half as fast until difficulty updates.
Triple the number of miners, blocks are found three times as fast until difficulty updates.
2x win rate * 1/2x block rate = 1x
1/3x win rate * 3x block rate = 1x
Until the difficulty updates.
But, unless difficulty changes, the blockrate changes.
If you keep the entire existing network, and say I'm 0.002% of the hashpower; I'll win 1 block per year, losing 99.998% of blocks.
If the whole rest of the network goes away except me, it'll take me 1 year to mine a block. I lose 0% of blocks.
But in either case, I mine one block per year.
This is wrong. Each of your hashes (the number of which in a given period is fixed as you admit) either meets the difficulty target or not. If it does, you win a block reward. Otherwise you don't.
The only impact other miners have on this is how often you have to rebuild your candidate block in order to always mine on top of the latest block.
Please just think this through before replying...
And then say that "50 railroad cars of coal" is equivalent to X BTUs.
I'm being pedantic. I think its well known that the US Grid is a complex mix of solar, nuclear, wind, and fossil fuels. It is also known that its mostly fossil fuels (natural gas, coal, and petrol), despite our best efforts to the contrary. So I think the visualization is pretty good. But a few additional words for clarity here would probably be better?
Come on, it is literally British!
thats not how the bitcoin mining sector works, its like you heard about one recommissioned coal plant in new york and assumed that was representative of anything
it isn't economical for miners to operate that way, whereas it is economical at some sources of renewable energy or redirecting energy from polluters - reducing emissions - so thats where the miners are
If the renewable generation capacity was built entirely for the purpose of crypto mining and in other words, wouldn't have ever been built without it, you could argue that it's zero emissions (or more accurately, some miners are running effectively with zero emissions while others aren't).
However, since the supplies of renewable energy equipment are not unlimited, demand is already high (so you can't argue that you're driving innovation in the sector), and the production of said equipment is very much carbon positive (from mining to processing to transport), it's just not a very strong argument. If anything, mining with renewables reduces further investment in renewables for the grid as it drives equipment prices up, while still indirectly polluting the environment.
No matter how your slice it, terawatt hours of electricity are being used each year to run the networks, when the biggest problem we face as humans is a shortage of energy.
And I say all of this as someone who supports decentralized digital currency. We have a problem in our society where we obscure and mangle the narrative when something we dislike is true.
We should stop lying about what makes us uncomfortable and start focusing on the solutions to the problems. And there are plenty of reasonable options here:
1. Use the excess heat generated from mining to generate more electricity (with considerable efficiency loss) to supply the grid or to put back into the operation, or run any useful chemical process that requires heat.
2. Use the excess heat generated from mining to heat homes, buildings, etc.
3. Move to a more power efficient method of mining such as a PoS instead PoW. Or an entirely new method that hasn't been thought of yet.(Which, IMO, is the only way to prevent centralization once Quantum Computing or Fusion become commercially available).
Given that 60% of the energy consumed for Bitcoin is carbon neutral, this is probably an easy one.
So yes you are correct, it would be pretty easy win, but not for who you think.
It might be easier to visualize the energy waste by framing it as burning through a 48 car long train full of coal each and every single day to run Bitcoin mining alone.
about 40% of bitcoin mining is either reducing emissions from another source or using renewable like hydro
name another industry with similar numbers aside from hydro/solar/wind itself?
Not trying to defend it, I’m sure the e-waste of the hardware is a problem, the CO2 thing is not accurate
I'm skeptical of this. The only way I know that Bitcoin mining can reduce emissions is if all else equal, the waste heat from a mining facility is used to displace fossil fuels that would otherwise be used for heating purposes. That amount can't be significant in the context of Bitcoin mining's overall massive energy use.
If you are referring to demand smoothing by filling demand with mining when other types of demand fall, that has more to do with avoiding short cycling of fossil fuels based generation facilities and thereby maximizing their utilization/revenue and little to do with cutting emissions. At most you could argue that avoiding peak load periods by curtailing mining is avoiding the worst emissions, but that is again a drop in the bucket of the massive emissions.
Care to explain or cite this claim if you have examples of reducing the emissions of other fossil energy sources?
its a symbiotic relationship at fracking sites, where some byproducts are flared into the atmosphere, this is called flare gas
methane (worse than CO2) and hydrocarbons are flared directly into the atmosphere
bitcoin mining companies move operations on premise and use the gas directly to power their machines before it is flared, thereby reducing emissions. Some but industrial catalyctic converters reduce the emissions substantially, leaving some H2O and some CO2
flare sites have problems growing due to state and federal regulations if their emissions are too high, so their desperation results in many ways to help make mining company presence a sweetheart deal in the energy rates the miners receive. (but they still arent expanding, yet, as they get exemptions from the regulations and are courting miners because of the threat that the exemptions will stop. Currently mining reduces emissions, and this is only a matter of accuracy, criticisms about the possible future of too much mining/fracking equalizing into no net benefit are accurate)
in any case, thats before selling to the grid
which brings me to the next point, there are
1) grid connected flare gas miners
2) non-grid connected flare gas miners
you probably wont find much literature on the 2nd type as they are off the grid
but the 2nd type is also not subject to your form of criticism
What grounds do we have to assume that this has a substantial effect compared to the rest of the carbon footprint of Bitcoin?
The word "flaring" in this case indicates burning the methane. Releasing it without burning it is called venting [1].
I question how significant the difference is in the C02 and methane emissions of flaring the non marketable methane directly vs running a natural gas turbine to power a mining facility.
> so their desperation results in many ways to help make mining company presence a sweetheart deal in the energy rates the miners receive.
It seems more like a a way to maximize the profit of or minimize regulatory penalties on the fracking operation, which is a fine business objective, but likely not a significant emissions reduction overall compared to the fracked gas itself. I'd like to see independent numbers comparing C02 and methane emissions associated with flaring vs BTC mining.
1. https://www.energy.gov/fecm/articles/doe-flaring-and-venting....
https://old.reddit.com/r/Bitcoin/comments/mtugta/mentor_mond...
(the answer from nullc is the most insightful)
In the hypothetical scenario that the mining rate drops to just tens of percents of the original, then the utility of BitCoin drops because transactions get both slower and more expensive.
This could cause a "run on the bank" where people try to get their money out, but can't transact on the network. If the next hash rate change is far enough out and a panic sets in long enough, then BitCoin's value could plummet as users lose all confidence.
This can recover, but if it's juuust bad enough to take out more miners via bankruptcy after the next hash rate adjustment, then it can sustain itself.
Miners have fiat expenses and BitCoin revenue.
If BitCoin drops too fast, they have to cease operations, otherwise they're literally burning piles of valuable currency to make worthless monopoly money they can't spend on anything.
It all depends on how long the big miners can "hold out" while being unprofitable, or more importantly.. how long they're willing to risk losing everything they've made until then.
after two or three orders of magnitude drop in the hashrate 51% attacks would be quite affordable
These attacks are not affordable in a capital sense when the miners are running near capacity. There isn’t an AWS with unlimited piles of hashing ASICS that you can rent for the hour at a reasonable price. You need to buy or lease these things, Ave capacity is finite.
But I suspect that, if mining profitability per hash drops enough, then the capital limitation on attacks will go away.
Is there any kind of geographical map that shows in which states/cities these hashrates are? I guess there probably isn't good correlation between hashrate + external IP?
I wonder how profitable mining Bitcoin is these days at any scale.
Probably not, since you don’t even need to be online at all to mine bitcoin.
> Every 10 minutes or so, some miner on the network guesses correctly, and their block becomes the new one that everyone uses for their guessing.
> If your miner isn't on the network, it'll never be told that some other miner guessed correctly and that everyone else on the network is now working on a newer block. Your miner will keep on guessing, but if it does eventually guess correctly, it won't matter as the network has moved on.
https://www.reddit.com/r/Bitcoin/comments/sjfds/why_am_i_abl...
Seems kind of inefficient?
You don't need fiber internet but just a DSL modem with most-of-the-time connectivity to do mining for contributing to the network's safety, but doing it offline altogether indeed does not really make sense. (If you're doing it for the moneys then you probably do want to get information early (stable, low latency internet) so that you don't waste hash cycles.)
They have calculators for this [0]. The summary is that assuming mining difficulty, electricity rate, and bitcoin value hold constant it's a 10+ year return on the most energy efficient miners, so you're probably better off buying bonds. If you don't have access to very cheap electricity ($0.06/kwh or cheaper) and don't have an efficient way of handling waste heat then it's a non-starter. Even then the price of bitcoin and the mining difficulty are likely to move considerably in 10 years so it's a very risky business plan.
[0] https://www.coinwarz.com/mining/bitcoin/calculator?hs=80
what does one large mining operation (one large enough that when it goes offline during a blizzard, it's a mention-worthy part of that 40% hash rate drop figure) look like in terms of the calculator variables?
How many of what piece of equipment do they have, are they getting electricity for $0.06/kwh or less like you said, how are they handling the waste heat?
I wasn't aware we had huge mining farms in America to be honest. I thought it was mainly other countries. I'm also not super knowledgeable/in the know about this kind of stuff so, might just be accidental ignorance on my part.
2. The blizzard probably took multiple mining operations offline. Large parts of the US are experiencing very cold conditions.
3. Maybe Rockland, TX has the most PR about currently operating large miners in the US. I think they have a contract for ~$0.03/kwh and purchase hundreds of megawatts [0]. It's tens of thousands of miners.
[0] https://www.wired.com/story/hard-luck-texas-town-bet-bitcoin...
Riot Blockchain (RIOT) [1], Marathon Digital (MARA), HIVE Blockchain Technologies (HUBTF) and Hut 8 Mining Corp (HUTMF) have public financials [2].
[1] https://www.sec.gov/Archives/edgar/data/1167419/000107997321...
[2] https://marketrealist.com/p/publicly-traded-bitcoin-mining-c...
It boils down to a function of Capex and Opex.
Today though it is a bit more complicated. Given that the bitcoin price goes in cycles, it is less about the current profitability and more about the ability to weather bear cycles. Miners now will hold as much as possible and then take profits when the prices go up again. Sometimes, they borrow against their existing holdings to buy more hardware.
During bear cycles it is far more risky to setup a new mining operation, especially when presented with the ability to just market buy BTC in large enough quantities to not affect price.
To answer your question though, it makes almost no sense to start a mining operation these days. You're competing with much larger players who have much deeper pockets. If you're doing just a small operation, the difficulty adjustments will hurt you more than a larger player who's lighting up thousands of machines at a time.
One example: https://markets.businessinsider.com/news/commodities/natural...
[0] https://seekingalpha.com/article/4546309-ivanhoe-mines-upsid...
https://ccaf.io/cbeci/mining_map
I didn't know this existed but randomly saw it in the website's menu while researching another comment. It even drills down to state level in the USA and province level in China if you click the button at the top of the map. Georgia is popular in the USA, anyone know why?
The practice known as curtailment, is a way for miners to help electricity grids. The miners' steady demand ensures power producers are bringing in revenue to offset costs, but can power off when demand from other sources is high, such as during winter storms.
Show me empirical evidence what you described is actually happening on a large scale.
Small/medium mining operators just build in those cheapest locations.
The largest operations are turning towards purchasing or building their own capacity, some of which activity will still contribute to a supply/demand curve that raises prices for the entire country (or at least region). In some cases large mining companies have even recommissions old coal power plants, e.g., Marathon Digital Holdings w/ the Harding plant.
Some countries have different prices for residential areas vs businesses vs industry.
For residential areas they might do something like first 10 kWh = $0.01/kWh, next 20 kWh = $0.02/kWh, etc. This punishes people who use excessive amounts and helps keep electricity affordable for people living in poverty.
It's the US's fault for not implementing something like that (and I'm one of the people living in it).
Even in China, it was individuals setting up mining rigs, not some giant government conspiracy to control all the hashrate.
Even in China, I don't think they can just declare eminent domain over someone's business, but they can certainly control who gets power generated for them.
On top of it, if you've ever run a large scale mining operation (and I've run several), it isn't easy. There is a lot of competence required to do it profitably.
Beijing can absolutely just seize a business. Disappearing leadership [1], installing Party Board members [2], promoting Party management members (a requirement for any business of consequence [3]) and simply taking assets are commonplace in China.
Eminent domain doesn’t really exist because the legal system is subservient to the Party [4]. If the CCP wants something, it takes it; it doesn’t need court permission.
[1] https://www.ft.com/content/2f7c7a10-2df3-4f1b-8d2a-eea0e0548...
[2] https://thediplomat.com/2019/12/politics-in-the-boardroom-th...
[3] https://amp.theguardian.com/world/2019/jul/25/china-business...
[4] https://www.hrw.org/report/2008/04/28/walking-thin-ice/contr...
It is one thing to take it over and shut it down, but a whole another thing to keep it running. It isn't like the people running it will just suddenly want to work for a new (hostile) boss. Like I said before, this stuff isn't trivial to run. You don't just plug a box in and call it good.
Have you ever done business in China? Everyone already works for that boss.
The boss may not be as present yet, but they’re there, and refusing to follow a Party member’s orders is a criminal offense.
You're taking one talking point out of the conversation and then trying to apply that as a whole. The larger picture here is that what you are replying to isn't the point of what I'm talking about, but it sure makes you sound like you know what you're talking about though.
The fact is that the govt would likely never take over every single mining operation, when the lowest barrier is to simply ban it. That's exactly what happened.
They don't need Bitcoin, when they have their own infinite money printer. Even if they didn't ban it, and still took it all over, they wouldn't have enough hashrate to control the network (~40 < ~51). If they somehow invested even more funds into this massive operation to control more hashrate, what could they do? At most, reorg a few blocks and effectively destroy bitcoin. It would be a very expensive suicide, for what purpose?
Totally agree. I was contesting the narrow point of the government not being able to seize those operations. They could have. But they aren’t idiots, those rigs are strategically worthless because Bitcoin is strategically worthless.
It follows that a misnomer is a "bad name," usually stemming from a misunderstanding about an origin. E.g., a firefly isn't a fly, a peanut isn't a nut, a starfish isn't a fish, a shooting star isn't a star, etc.
I fail to understand how people expect to use crypto when stuck in a dangerous situation or in the middle of natural/political turmoil.
There was a disaster, and Bitcoin resisted it. How does that make it the opposite of disaster-resistant?
After a 40% hash rate drop, transaction inclusion would take 66% longer on average (1/0.60). So, it would increase from an average of 10 minutes (and potentially up to 40 minutes) to an average of 17 minutes (and potentially up to 50 minutes).
I can't imagine any kind of transaction where 10-50 minutes is timely and acceptable, yet 17-67 minutes is unacceptably long. Either 10-50 minutes is already too long/unpredictable, or an increase to 17-67 minutes does not make any difference.
> probably an increase in fees
Bitcoin's fees did not spike significantly during the one hour between 17:00 and 18:00 UTC.
Edit: Furthermore, it's completely normal for Bitcoin's throughput to jump up and down by 40% for an hour during any normal day (and even down to zero blocks in an entire hour every once in a while). Block variance means that blocks come in unpredictably, and each block has a hard size limit, so the network can't "make up for" the lost throughput.